WEBVTT - AI Spending Separates Tech Winners and Losers 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.400 --> 0:00:31.440 Brian Weezer joins us, Madison and Wall And what's great 0:00:31.480 --> 0:00:34.160 about Brian Weezer It's it's less by hold. 0:00:34.040 --> 0:00:37.680 Cell and much more. What in God's name are they doing? 0:00:37.960 --> 0:00:43.080 What's the single myth of Facebook Meta that our listeners 0:00:43.120 --> 0:00:43.919 and viewers have. 0:00:44.000 --> 0:00:45.720 What's the thing that drives you nuts? 0:00:46.440 --> 0:00:49.800 That the myth that advertisers care about all the problems 0:00:49.800 --> 0:00:53.319 on the platform, and that they will care, they care 0:00:53.320 --> 0:00:57.400 about performance for better and worse, and they care about 0:00:57.400 --> 0:00:59.120 whether or not they get what they think are results, 0:00:59.480 --> 0:01:02.640 and that they think results come from meta. Because Metta's 0:01:02.680 --> 0:01:04.920 got great attribution tools, right, even if a lot of 0:01:04.920 --> 0:01:05.760 its false attribution. 0:01:05.959 --> 0:01:07.720 Will dan Off, Good Morning ninety to nine. 0:01:07.720 --> 0:01:09.800 If I'm up in Boston, Will dan Off, I believe 0:01:09.800 --> 0:01:13.000 it's his number one holding, a contrafund, And I think 0:01:13.040 --> 0:01:15.480 he would suggest the reason it's his number one holding 0:01:15.920 --> 0:01:19.040 is he bought it and he never sold it and 0:01:19.200 --> 0:01:22.560 just kept adding to it as well. 0:01:22.920 --> 0:01:25.560 Is that the emotion you feel about Meta even with 0:01:25.640 --> 0:01:26.800 these valuations. 0:01:26.560 --> 0:01:28.320 That's a really good way to put it. I mean, 0:01:28.360 --> 0:01:30.520 if someone just held on, obviously they did incredibly well. 0:01:30.560 --> 0:01:32.720 There are lots of reasons why you should have expected 0:01:32.800 --> 0:01:38.360 that markers might have abandoned the platform, let alone consumers. 0:01:37.560 --> 0:01:40.120 Nobody screwing it. 0:01:40.600 --> 0:01:42.839 So the I mean, you got a two hundred billion 0:01:42.880 --> 0:01:48.840 dollar revenue company with Meta here streets forecasting twenty percent 0:01:48.920 --> 0:01:51.520 top line revenue growth. This is advertising. 0:01:51.600 --> 0:01:54.560 Yeah, it's what's going on here the advertise. Well, to 0:01:54.600 --> 0:01:57.160 be clear, they undoubtedly have a more optimistic go look 0:01:57.200 --> 0:01:59.880 on the ad market, let alone the economy than we do. 0:02:01.080 --> 0:02:03.840 But nonetheless they're sure certainly taking share no matter what's 0:02:03.840 --> 0:02:05.720 happening here. And that's the main thing. They're building these 0:02:05.760 --> 0:02:08.639 performance based tools. They're segmenting the market really well. When 0:02:08.680 --> 0:02:10.720 I say segmenting, I mean Fudy, the markers who are 0:02:10.720 --> 0:02:13.480 willing to pay the most fun fact just came out 0:02:13.480 --> 0:02:17.600 the ten k an hour ago. Their third biggest market, Singapore. 0:02:17.960 --> 0:02:22.520 Really that's new. Why Singapore it's a tiny ad market 0:02:22.720 --> 0:02:24.880 because that's where all the Chinese transhipers are sending all 0:02:24.919 --> 0:02:25.440 their budgets. 0:02:25.440 --> 0:02:28.119 This is like when I talked to YouTube here at Bloomberg, 0:02:28.160 --> 0:02:30.080 whos spearheaded ore YouTube Bedford? 0:02:30.120 --> 0:02:31.760 Paul's same thing for YouTube. 0:02:31.800 --> 0:02:35.080 How was AI impacting? Is it making their ad tools 0:02:35.600 --> 0:02:36.200 even better? 0:02:36.320 --> 0:02:36.959 Yeah? 0:02:37.000 --> 0:02:39.119 I mean the attributed performance. 0:02:39.160 --> 0:02:39.919 That's the key thing. 0:02:40.000 --> 0:02:43.360 We don't know that actually drive performance, right, but they 0:02:43.400 --> 0:02:46.560 can claim performance because of the modeling tools that they offer, 0:02:46.919 --> 0:02:49.840 because they may just be targeting the customer that was 0:02:49.840 --> 0:02:52.480 already going to buy a product better than someone else does. 0:02:53.240 --> 0:02:55.720 Thanks for joining this morning, Brian Weezer. Where a Seamashawn 0:02:55.800 --> 0:02:58.080 Deck and London. We'll get to her in a moment, 0:02:58.120 --> 0:03:00.680 Brian Weezer, is it Madison? And Okay, so you were 0:03:00.720 --> 0:03:04.360 an intern at Stirling and Cooper way way long time ago. 0:03:04.720 --> 0:03:05.359 You nailed this. 0:03:05.480 --> 0:03:09.040 I remember the IPO day, Paul Kodrowski, David Kirkpatrick. What 0:03:09.160 --> 0:03:13.240 a magical IPO release we did. Did you see this coming? 0:03:13.280 --> 0:03:16.400 Did you know in the first year of their public 0:03:16.440 --> 0:03:18.760 trading that they'd be twenty three percent per year? 0:03:19.160 --> 0:03:21.160 Well, we definitely had an optimistic view in the business. 0:03:21.320 --> 0:03:23.360 Not the stock That's why I had a celebrating at 0:03:23.400 --> 0:03:26.600 the IPO, but the business itself was incredibly durable. That's 0:03:26.600 --> 0:03:29.160 why at the trough, if you remember the summer after 0:03:29.400 --> 0:03:32.320 the IPO, we're like, why is everyone selling this thing? 0:03:32.440 --> 0:03:34.960 This is a great business. It was always going to 0:03:34.960 --> 0:03:37.640 be a really good business, and they've got amazing business professionals. 0:03:37.640 --> 0:03:38.360 That's the core thing. 0:03:38.720 --> 0:03:41.520 When you look at the great results of Facebook here, 0:03:41.720 --> 0:03:43.920 how do we extrapolate it or can we extrapolate it 0:03:43.960 --> 0:03:45.480 to Google in the search business? 0:03:45.600 --> 0:03:47.160 Yeah, well, at least you can say that there are 0:03:47.160 --> 0:03:49.960 good tailwinds for growth for advertising. Overall, Google's not going 0:03:49.960 --> 0:03:52.560 to grow this fast. But the reality is that if 0:03:52.640 --> 0:03:55.480 medic can grow at twenty percent, you should expect that 0:03:55.520 --> 0:03:57.480 Google can grow like called ten or something. 0:03:57.720 --> 0:04:00.960 What is the it's much big? Yeah, I know, And 0:04:01.280 --> 0:04:04.880 but my use of Google right now Gemini gives me 0:04:04.960 --> 0:04:08.520 what I want right on tom means I'm not clicking 0:04:08.560 --> 0:04:11.400 as much, Isn't that doesn't that impact Google's revenue if 0:04:11.400 --> 0:04:12.320 I'm not clicking as much? 0:04:12.400 --> 0:04:14.200 There's a lot of threats around that, but we argue 0:04:14.200 --> 0:04:16.480 that the budgets and marketers have are independent of what 0:04:16.520 --> 0:04:18.039 consumers do on that level. 0:04:19.000 --> 0:04:21.440 Just because it's the time of the blue lights, did 0:04:21.440 --> 0:04:25.480 Detroit Lyons, Blue Light, Brian Weezer, just because we're here 0:04:25.680 --> 0:04:28.400 the super Bowl does it? You know you you nailed. 0:04:28.760 --> 0:04:31.599 People will still watch sports like you more than anyone. 0:04:31.720 --> 0:04:35.640 I know you, Nathan so Moffatt nailed in Greenfield. 0:04:35.720 --> 0:04:38.240 You nailed. It's not going to end. Yeah. Super Bowl 0:04:38.400 --> 0:04:39.360 still a big deal. 0:04:39.320 --> 0:04:41.839 Still the single most important event. It is the center 0:04:41.880 --> 0:04:44.160 of the universe for a lot of the advertising industry. 0:04:44.360 --> 0:04:45.279 It's not going way anytime. 0:04:45.440 --> 0:04:47.599 It's the industry like when you were at Sterling Cooper. 0:04:47.680 --> 0:04:49.120 I mean, is he is he? 0:04:49.279 --> 0:04:52.839 You know, Martin Soro and all that and Rob Schwartz 0:04:52.960 --> 0:04:54.080 and you know, is it gone. 0:04:54.279 --> 0:04:55.400 No, it's involving. 0:04:55.480 --> 0:04:57.520 Here's the thing, I argue, this is a contrary view 0:04:57.839 --> 0:04:59.440 for all of AI, and there's a lot of fears 0:04:59.440 --> 0:05:01.000 that A is going to places a lot of people. 0:05:01.200 --> 0:05:02.920 I argue it's going to cause the need for more 0:05:03.000 --> 0:05:06.320 people because that's more complexity, and the complexity is what 0:05:06.360 --> 0:05:08.599 requires people to manage the processes. We already saw this 0:05:08.680 --> 0:05:11.720 in ad tech at Technique, the automation of most core 0:05:12.000 --> 0:05:15.279 media buying. It was meant to automate the whole industry. No, 0:05:15.560 --> 0:05:18.000 it caused the need for more people and you're going 0:05:18.080 --> 0:05:19.880 to see that in the creative size the agency as. 0:05:19.720 --> 0:05:22.520 Well Warner Brothers Discovery. When you talk to big, big 0:05:22.560 --> 0:05:26.000 advertisers out there, did they care who owns Warner Brothers Discovery, 0:05:26.000 --> 0:05:27.520 whether it's Netflix or Paramount. 0:05:27.720 --> 0:05:30.120 So, to be clear, while they care about many things 0:05:30.120 --> 0:05:33.440 about television, like sports in particular, they don't care about 0:05:33.480 --> 0:05:36.080 television broadly. So when you think about like the Warner 0:05:36.120 --> 0:05:38.800 Cable networks and now Netflix is still interesting too many 0:05:38.839 --> 0:05:41.599 because it's an incremental reach thing and it seems to 0:05:41.640 --> 0:05:43.359 be sexy, but at the end of the day to 0:05:43.640 --> 0:05:45.920 is diminishing. That's a good way to think about it 0:05:45.960 --> 0:05:48.080 in the minds of marketers. 0:05:48.120 --> 0:05:50.680 Sparta emails it's Sparta, thanks for getting out of bed 0:05:50.720 --> 0:05:53.520 so early, seven h nine am. To have Sparta email 0:05:53.560 --> 0:05:56.599 in this early is a real shock here. We're like 0:05:57.120 --> 0:06:01.239 devoted to YouTube. Where is you too? In five years? 0:06:01.560 --> 0:06:02.560 Sparda wants to know. 0:06:02.839 --> 0:06:05.440 So they continue to invest in content. They continue to 0:06:05.680 --> 0:06:08.400 look at this, having the oscars in twenty twenty nine, right, 0:06:08.560 --> 0:06:10.919 they're not letting up on investment contents speak of sports, right, 0:06:11.040 --> 0:06:15.080 NFL Sunday Ticket, that's the YouTube property. They will continue 0:06:15.120 --> 0:06:17.960 to invest They continue to share revenue with creators. They're 0:06:17.960 --> 0:06:20.880 spending more than anyone else on earth on content. I 0:06:20.880 --> 0:06:21.599 think they'll be fine. 0:06:21.640 --> 0:06:24.159 Okay, see Michelle wants to know. Is met a single 0:06:24.200 --> 0:06:25.560 best buy? Is it like a bye? 0:06:25.640 --> 0:06:27.680 Is it a hold where I don't have a bicell 0:06:27.720 --> 0:06:29.320 hold record? There we go. I need to hear that. 0:06:29.400 --> 0:06:31.880 Brian Weezer, thank you, thank you so much for getting 0:06:31.880 --> 0:06:32.960 and started Madison room. 0:06:32.960 --> 0:06:35.240 Well this morning, there, stay with us. 0:06:35.480 --> 0:06:38.720 More from Bloomberg Surveillance coming up after this. 0:06:45.960 --> 0:06:49.559 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:06:49.600 --> 0:06:52.800 weekday afternoons from seven to ten am Eastern. Listen on 0:06:52.880 --> 0:06:56.279 Apple Karplay and Android Auto with the Bloomberg Business app, 0:06:56.440 --> 0:06:58.120 or watch us Live on YouTube. 0:06:58.240 --> 0:07:01.400 This is a really important conversation thermodynamics this morning. 0:07:01.520 --> 0:07:02.640 Yeah, physics is great. 0:07:02.680 --> 0:07:05.040 That hurts. This is way more importantly one of the 0:07:05.040 --> 0:07:07.800 great words tossed around like a mint, like one of 0:07:07.839 --> 0:07:10.600 the York peppermint patties. You want you're to bar, you 0:07:10.600 --> 0:07:14.040 want to impress somebody. Well, I'm looking at the liquidity. 0:07:14.960 --> 0:07:20.720 Jerom Schneider is expert on liquidity. He's a pimpco legendary 0:07:20.800 --> 0:07:23.720 in the short term paper space and we're Theriolldy could 0:07:23.720 --> 0:07:25.160 be in studio with us today. 0:07:25.440 --> 0:07:28.760 When an idiot like me says liquidity, what do we 0:07:28.800 --> 0:07:29.280 get wrong? 0:07:29.680 --> 0:07:32.280 Well, there's two different aspects of liquid It's the one 0:07:32.320 --> 0:07:36.800 that the person thinks about how much liquid liquidity liquid 0:07:36.840 --> 0:07:39.440 assets they need to survive in day to day life. 0:07:39.880 --> 0:07:42.680 And then there's what the macroeconomist thinks about liquidy is 0:07:42.920 --> 0:07:45.280 what is the arrogate amount of demand for cash and 0:07:45.320 --> 0:07:50.240 liquid type products that saints yates or sustains business activity. 0:07:50.520 --> 0:07:53.480 And that's where the intersection comes within the economic cycles. 0:07:53.480 --> 0:07:56.600 And really, as a functionary you don't really want to 0:07:56.600 --> 0:07:59.080 make it too complex. You want to understand that there's 0:07:59.440 --> 0:08:02.240 risk to both sides. People can over cherish liquidity and 0:08:02.600 --> 0:08:05.080 markets can over cherish liquidity or assume liquidity is there. 0:08:05.080 --> 0:08:06.560 But at the same time you want to keep your 0:08:06.600 --> 0:08:09.400 eyes open that liquity may not be there at all 0:08:09.440 --> 0:08:11.400 times at the same cost. And that's really what the 0:08:11.560 --> 0:08:14.800 lessons of the past twenty five years have been for 0:08:14.840 --> 0:08:15.560 the financial market. 0:08:15.640 --> 0:08:16.880 Can I do an audible quickly? 0:08:16.920 --> 0:08:17.080 Paul? 0:08:17.240 --> 0:08:17.880 That right? Okay? 0:08:18.000 --> 0:08:18.680 Okay, thank you? 0:08:19.280 --> 0:08:22.120 I mean Jerome, your idea of long term is two 0:08:22.200 --> 0:08:26.680 year paper. Jerome Schneider on the liquidity of private equity 0:08:26.720 --> 0:08:27.640 and private credit. 0:08:27.800 --> 0:08:29.400 I don't want to get you in trouble with Dan, 0:08:29.880 --> 0:08:34.439 but tell me about the liquidity of these new alternative investments. 0:08:34.480 --> 0:08:36.640 Well, I think it's you know, one of the things 0:08:36.679 --> 0:08:39.320 to keep in mind as an investor is you're not 0:08:39.360 --> 0:08:42.160 only making an investment in an asset, meaning you want 0:08:42.160 --> 0:08:45.839 the asset to perform some ready to return and horizon 0:08:45.880 --> 0:08:48.920 for that asset's return of principle or capital. That's the 0:08:49.040 --> 0:08:52.880 key metric that many investors overlook. There's some variability in 0:08:52.920 --> 0:08:56.520 that metric. Many investors make that predisposition because they're assuming 0:08:56.840 --> 0:08:59.880 economic returns are going to be x percent over a 0:09:00.040 --> 0:09:02.520 period of time. That period of time is going to 0:09:02.520 --> 0:09:04.280 grow in flocks. And I think we're finding in private 0:09:04.280 --> 0:09:07.120 credit markets is assumptions that were made several years ago 0:09:07.200 --> 0:09:09.800 may not necessarily be as concrete as what people had 0:09:09.840 --> 0:09:13.840 expected to have a infruition. At the same time, what 0:09:13.880 --> 0:09:16.960 we are also finding is that there's differentiation in those 0:09:17.000 --> 0:09:20.080 private markets, in those private credit markets, and really what 0:09:20.080 --> 0:09:23.079 we're finding is that those assets that might have more 0:09:23.120 --> 0:09:26.160 resiliency because they're asset backed in those private credit markets 0:09:26.200 --> 0:09:29.040 or potentially of the transability to transcend. Both public and 0:09:29.080 --> 0:09:32.320 private credit markets have a different, perhaps a more improved 0:09:32.360 --> 0:09:36.839 liquidity profile than the predecessors. And that's really what we're 0:09:36.880 --> 0:09:39.880 focused on is in the broader market, make sure, as 0:09:39.920 --> 0:09:42.680 an investor you understand what that liquidity horizon looks like 0:09:42.679 --> 0:09:46.280 and what you expect likelihood to get that maturity payment 0:09:46.320 --> 0:09:48.760 back or that capital repayment back over that horizon is 0:09:48.800 --> 0:09:50.520 incredibly important obviously to returns. 0:09:50.760 --> 0:09:52.040 What do you say to the people that have got 0:09:52.040 --> 0:09:54.840 that I don't know, seven billion dollars in money markets? 0:09:55.240 --> 0:09:59.320 You go see them at a PIMPO dinner somewhere. You say, hey, 0:09:59.320 --> 0:10:01.880 come on and buy some two year paper. Here, let's 0:10:01.880 --> 0:10:03.280 get into the market here. What do you say there? 0:10:03.400 --> 0:10:05.480 So we've been having that conversation a lot over the 0:10:05.559 --> 0:10:08.199 past few years, obviously since we got off the zero bound, 0:10:08.480 --> 0:10:11.480 and we recognize the fact that it has worked. We 0:10:11.600 --> 0:10:13.839 have seen people come off the sidelines where seeing people 0:10:13.880 --> 0:10:17.360 move to those ultra shortened loderation strategies. You know, about 0:10:17.360 --> 0:10:20.320 fifteen percent growth year of year. Oddly though, money market 0:10:20.360 --> 0:10:23.560 funds are still growing at twelve to thirteen percent, above 0:10:23.640 --> 0:10:25.480 the organic growth rate of you know, three to four 0:10:25.520 --> 0:10:27.960 percent interest. So what I would say is is that 0:10:27.960 --> 0:10:32.040 that message is making and is resonating, but there's still 0:10:32.080 --> 0:10:33.440 a lot of cash sitting on the side, and so 0:10:33.480 --> 0:10:35.600 that doesn't mean it's all risk seeking. There's a lot 0:10:35.640 --> 0:10:39.120 of equidy from central banks, from corporations, that's operational cash, 0:10:39.440 --> 0:10:41.400 but it is sitting on the sidelines. But people are 0:10:41.440 --> 0:10:44.880 recognizing that with the FED coming to the end of 0:10:44.920 --> 0:10:47.840 their rate cutting cycle over the next year, let's call it. 0:10:48.320 --> 0:10:50.920 You find yourself in a situation where rates are fairly balanced, 0:10:51.120 --> 0:10:53.199 there's real rates that are attractive and maybe adding a 0:10:53.240 --> 0:10:56.360 little duration to the portfolio outside my long bond. That, 0:10:56.360 --> 0:10:59.959 to your point, is perhaps perhaps a perhaps an attractive point. 0:11:00.160 --> 0:11:02.200 Jerrem senaider or PIMCO with US. I need to do 0:11:02.280 --> 0:11:05.319 some economics here. As mister Holman was speaking in Minneapolis, 0:11:05.600 --> 0:11:08.560 claims came in. It is stunning, two hundred and nine thousand, 0:11:09.000 --> 0:11:12.800 just above survey the four week moving average of claims. 0:11:12.800 --> 0:11:18.040 Paul is worth noting two hundred and six thousand. That 0:11:18.160 --> 0:11:21.800 is just absolutely was really addressed by the chairman yesterday. 0:11:21.880 --> 0:11:24.679 Some other nother non farm productivity came in on survey 0:11:24.960 --> 0:11:27.480 at a buoyant four point nine percent, and Paul, you 0:11:27.559 --> 0:11:31.960 and I mentioned this yesterday the thirty year bond. Jerome 0:11:32.000 --> 0:11:35.080 doesn't even know the function on the Bloomberg the thirty 0:11:35.160 --> 0:11:39.160 year bond four point eighty eight percent creeping grinding, I say, 0:11:39.480 --> 0:11:40.440 up to five percent. 0:11:40.520 --> 0:11:42.000 Paul Sweeney, what did you. 0:11:41.960 --> 0:11:44.880 Take away from our fit chairman yesterday in his comment? 0:11:45.160 --> 0:11:47.480 Yeah, First of all, GT thirty is the function, so 0:11:47.840 --> 0:11:51.600 I know. There you go there, Bill Groves Cone. So, 0:11:51.960 --> 0:11:54.679 but I would say that a few things. One, we're 0:11:54.720 --> 0:11:57.400 obviously data dependent for some period of time here, and 0:11:57.480 --> 0:11:59.640 I think one of the Fikey facets here is that 0:12:00.040 --> 0:12:03.280 the tension between jobs and inflation is probably going to 0:12:03.280 --> 0:12:05.120 be a key theme that we have to see evolving 0:12:05.120 --> 0:12:09.120 as we sort of dissect inflation or economic data over 0:12:09.160 --> 0:12:11.640 the next few few months. At PIMCO. We believe that, 0:12:11.679 --> 0:12:13.280 you know, we obviously have one to two rate cuts 0:12:13.360 --> 0:12:16.360 later on this year, obviously influenced by the incoming FED 0:12:16.400 --> 0:12:20.120 share But the committee based approach really maintains the fact 0:12:20.160 --> 0:12:21.280 that we're going to have to look at it from 0:12:21.280 --> 0:12:24.360 an economic point of view, recognizing the fact that yes, 0:12:24.400 --> 0:12:27.760 there's growth that's pretty pretty outstanding compared to where we 0:12:27.760 --> 0:12:30.400 thought it'd be. A year ago being resilient, and the 0:12:30.520 --> 0:12:31.960 and the FED is going to have to sort of 0:12:31.960 --> 0:12:34.680 take that into account as we get into the later 0:12:34.760 --> 0:12:38.000 months of this year. So from that perspective, we might 0:12:38.040 --> 0:12:42.160 actually find ourselves in attention that has high growth inflation 0:12:42.240 --> 0:12:44.640 that obviously is moving higher over the coming months, but 0:12:44.720 --> 0:12:46.400 then coming back down to two and a half percent. 0:12:46.840 --> 0:12:50.760 But the need for significant rate cuts beyond the one 0:12:50.960 --> 0:12:53.920 maybe two cuts later on this year is not really noteworthy. 0:12:53.960 --> 0:12:56.240 And I think you know, we are, you know, at 0:12:56.280 --> 0:12:58.360 the usual rate probably right now. The market's probably going 0:12:58.440 --> 0:13:01.720 to bifurcate that and cut another expect another cut or so, 0:13:02.120 --> 0:13:04.760 but is it meaningful to the broader market? Probably not. 0:13:04.960 --> 0:13:07.720 And I think a stronger economy and productivity combined with 0:13:08.320 --> 0:13:11.400 profitability of many corporations is going to be a dominating 0:13:11.440 --> 0:13:12.560 theme for later on this year. 0:13:12.640 --> 0:13:14.480 Do you is that kind of your call there that 0:13:14.480 --> 0:13:17.320 you think this economy a is strong and perhaps can 0:13:17.360 --> 0:13:18.880 even get stronger throughout the year. 0:13:19.200 --> 0:13:22.240 There's inclinations. One of the key facets to obviously keep 0:13:22.240 --> 0:13:24.760 in mind is the fiscal element, the stimulus coming from 0:13:24.800 --> 0:13:27.240 the fiscal side, the consumerism. Yes, we call it the 0:13:27.280 --> 0:13:29.959 K shaped economy at PIMCO, and that lower end of 0:13:29.960 --> 0:13:32.520 the economy is under some stress and to rest, but 0:13:32.600 --> 0:13:36.240 the average remains really really impressive right now. So you 0:13:36.280 --> 0:13:38.000 could easily have a growth rate that's about two and 0:13:38.040 --> 0:13:40.959 a half percent. That sort of creates animal spirits from 0:13:41.000 --> 0:13:43.520 the positive side. And yes, you might have that as 0:13:43.559 --> 0:13:45.640 a lingering effect that is in the back of the 0:13:45.679 --> 0:13:48.600 Fed Committee's mind as we get into the later half 0:13:48.640 --> 0:13:51.400 of this year as reasons maybe to maybe hesitate about 0:13:51.400 --> 0:13:52.600 that great cut later this year. 0:13:53.000 --> 0:13:54.120 Cherald, thank you so much. 0:13:54.160 --> 0:13:56.240 She really waited around quite a long time to be 0:13:56.280 --> 0:13:58.720 with us the Home and Press conference on Really Cherim, 0:13:58.800 --> 0:14:01.439 thank you for your commitment to Bloomberg Surveillance. 0:14:01.480 --> 0:14:04.320 Mister Schneider is with Pim Koll. Stay with us. 0:14:04.559 --> 0:14:07.800 More from Bloomberg Surveillance coming up after this. 0:14:15.040 --> 0:14:18.600 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:14:18.679 --> 0:14:21.840 weekday afternoons from seven to ten am Eastern Listen on 0:14:21.920 --> 0:14:25.320 Apple Karplay and Android Auto with the Bloomberg Business app, 0:14:25.480 --> 0:14:27.240 or watch us live on YouTube. 0:14:27.560 --> 0:14:31.440 Stephanie Sansheva, Besides the privilege you're working under, Kenneth Rogoff 0:14:31.480 --> 0:14:35.920 at Harvard has become a force worldwide and economics, founder 0:14:35.960 --> 0:14:39.880 of Social Economics Lab at Harvard in her latest research, 0:14:40.560 --> 0:14:44.360 goes to the tension that we heard in the home 0:14:44.400 --> 0:14:48.840 and press conference. This is the emotion and the anger 0:14:49.080 --> 0:14:53.400 in society in our political discourse. Stephanie, this is going 0:14:53.480 --> 0:14:56.040 to be a three hour conversation. I got to squeeze 0:14:56.040 --> 0:14:58.640 it in a few minutes. How do you measure the 0:14:58.800 --> 0:15:03.359 rage the anger of a modern American political discourse? 0:15:04.680 --> 0:15:06.920 Yes, that's a great question, and really happy to be 0:15:07.000 --> 0:15:11.040 with you today. We measure it both online and offline. 0:15:11.200 --> 0:15:13.800 So we have this amazing data of a lot of 0:15:13.840 --> 0:15:18.160 social media posts. You know, since since twenty eleven, we 0:15:18.280 --> 0:15:22.400 have campaign speeches, we have congressional speeches. We can compare 0:15:22.440 --> 0:15:25.600 the same person tweeting online and talking in congress. So 0:15:25.640 --> 0:15:28.280 we have this amazing body of data where we can measure, 0:15:28.760 --> 0:15:32.920 thanks to AI, that emotional content of the statements. And 0:15:32.960 --> 0:15:35.840 what we can see is that, especially since twenty sixteen, 0:15:35.880 --> 0:15:39.600 there has been a really sharp rise in anger. So 0:15:39.680 --> 0:15:42.480 the share of statements, the share of tweets that are 0:15:42.560 --> 0:15:44.400 angry has really really risen. 0:15:45.000 --> 0:15:46.600 And this comes at the expense of. 0:15:46.920 --> 0:15:52.680 The factual or like lack mutually emotional tweets. Other emotions 0:15:52.680 --> 0:15:56.480 don't show this pattern, so fear, joy, other emotions have 0:15:56.560 --> 0:15:57.280 been pretty flat. 0:15:57.720 --> 0:16:03.120 Professor Richard Nixon, November third, nineteen sixty nine. Is there 0:16:03.160 --> 0:16:06.520 a silent majority out there in twenty twenty five. 0:16:08.160 --> 0:16:10.720 Yeah, that's a really great question. But what we see 0:16:10.760 --> 0:16:13.920 is that this rise and anger is actually very general. 0:16:14.600 --> 0:16:16.440 So you might think it's on one side. 0:16:16.200 --> 0:16:18.880 Of the political spectrum or not, But what we see 0:16:19.000 --> 0:16:22.520 is that policy makers do follow some cycles. So when 0:16:22.560 --> 0:16:26.160 policymakers are in power, they tend to have less angry content, 0:16:26.720 --> 0:16:28.480 and then when they're in the opposition they have more 0:16:28.520 --> 0:16:31.640 angry content, And it's pretty symmetric on both sides. But 0:16:31.720 --> 0:16:34.640 for citizens, it seems like the anger has just risen 0:16:34.800 --> 0:16:37.960 and doesn't come down anymore, regardless of your political leaning. 0:16:38.600 --> 0:16:42.280 So perhaps this anger has been triggered by policymaker and 0:16:42.320 --> 0:16:45.160 now just doesn't come back down. And what we also 0:16:45.160 --> 0:16:48.000 see is that it seems like anger is used strategically. 0:16:48.560 --> 0:16:51.320 If you tweet something angry, you're much more likely to 0:16:51.360 --> 0:16:54.960 be retweeted and to get engagement. If you post something angry, 0:16:55.080 --> 0:16:57.720 you know, you get a lot more attention, and so 0:16:57.840 --> 0:17:01.600 this actually reinforces this pattern where angry content is going 0:17:01.640 --> 0:17:04.000 to spread much more rapidly than neutral content. 0:17:05.000 --> 0:17:07.360 So if in fact there has been a rise in 0:17:07.359 --> 0:17:11.120 increase in anger in political discourse, that does that suggest 0:17:11.200 --> 0:17:16.280 that centrist type policy making is that becoming more and 0:17:16.320 --> 0:17:18.000 more difficult going forward. 0:17:19.040 --> 0:17:21.240 So what's interesting is that anger is not a part 0:17:21.320 --> 0:17:25.080 is an issue. It is actually very evenly spread on 0:17:25.160 --> 0:17:27.960 both sides of the political spectrum, and so it is 0:17:28.000 --> 0:17:30.320 not something that will determine, you know, which side you're. 0:17:30.240 --> 0:17:31.320 On, if you're on the center. 0:17:31.440 --> 0:17:35.480 On the ends, it does correlate with being more extremely partisan, 0:17:36.440 --> 0:17:39.399 So it is stronger among people who tend to follow 0:17:39.400 --> 0:17:42.359 more partisan accounts, who tend to be you know, more 0:17:42.680 --> 0:17:46.640 stronger Republicans or stronger Democrats rather than moderate. But what's 0:17:46.720 --> 0:17:49.960 most important to me is that this really matters for 0:17:50.080 --> 0:17:50.919 our policies. 0:17:51.640 --> 0:17:52.840 It matters for economics. 0:17:53.000 --> 0:17:55.160 What we see is that if you make people angrier, 0:17:55.840 --> 0:17:59.879 they become more anti immigration, more anti free trade, they 0:18:00.119 --> 0:18:04.200 become more anti democracy as well. So there's this very 0:18:04.240 --> 0:18:07.639 strong effect on the policy views that you express. And 0:18:07.680 --> 0:18:09.760 while this might be short lived, you know, in the moment, 0:18:10.040 --> 0:18:13.119 if we are constantly being bombarded by angry content, you 0:18:13.160 --> 0:18:15.239 can imagine that this is going to persist and have 0:18:15.320 --> 0:18:16.480 some real consequences. 0:18:16.880 --> 0:18:19.920 Social media doesn't appear to be going anywhere soon, Professor, 0:18:20.320 --> 0:18:25.160 Is there any solution or I don't change in behavior 0:18:25.200 --> 0:18:27.600 that may take the rhetoric down and may allow for 0:18:27.720 --> 0:18:31.720 some more again, I get bipartisan policy making. 0:18:32.800 --> 0:18:35.360 So I'm glad you're mentioning the role of social media 0:18:35.400 --> 0:18:37.720 here because we can compare the same person, the same 0:18:37.760 --> 0:18:41.520 Congress person online you know how they tweet, how they 0:18:41.520 --> 0:18:44.840 speak online and offline, you know which means on the 0:18:44.880 --> 0:18:47.359 Congress floor. And what we see is that for the 0:18:47.400 --> 0:18:52.320 same person, content is systematically angrier when it's online. So 0:18:52.359 --> 0:18:54.080 it's not that some people just tend to be angrier 0:18:54.119 --> 0:18:56.760 than others. It's also that everybody tends to be angrier 0:18:56.800 --> 0:18:59.800 when they're posting publicly, when they're posting online. So clearly 0:18:59.840 --> 0:19:02.760 social media does have a role to play in amplifying this. 0:19:04.320 --> 0:19:05.960 What are next steps here? Do you think? 0:19:06.119 --> 0:19:06.400 I mean? 0:19:06.480 --> 0:19:10.560 It's this interesting polarization. We all feel it, we all 0:19:10.560 --> 0:19:13.600 see it. It seems to be growing. Is there a 0:19:13.680 --> 0:19:17.920 sense that at some point people on both sides, if 0:19:17.920 --> 0:19:21.600 nothing else, will just grow punch drunk, weary, tired, And 0:19:21.640 --> 0:19:24.679 maybe you just start seeing that in tone down rhetoric 0:19:24.720 --> 0:19:25.480 and policymaking. 0:19:26.680 --> 0:19:28.560 So what we see is that this is happening in 0:19:28.600 --> 0:19:32.560