WEBVTT - Interest Rates, Housing, And Roe v. Wade (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:24.120 at Bloomberg dot com. Slash podcast now on Bloomberg Markets. 0:00:24.120 --> 0:00:29.640 Focus on fixed income with Iron Jersey bloom Focus on 0:00:29.680 --> 0:00:32.159 fixed income is brought to you by Pimco, a global 0:00:32.240 --> 0:00:35.360 leader and active fixed income. Learned how Pimco creates opportunities 0:00:35.400 --> 0:00:38.519 for investors at pimco dot Com slash bonds. All investments 0:00:38.560 --> 0:00:41.400 contain risk and may lose value of con Consult your 0:00:41.479 --> 0:00:45.400 investment professional before investing. All right, Ira, before we get 0:00:45.400 --> 0:00:47.280 to the soccer discussion here, I think we've got a 0:00:47.320 --> 0:00:49.720 FED meeting tomorrow. Some people here are telling me that's 0:00:49.800 --> 0:00:51.560 kind of important that I should talk to you about 0:00:51.880 --> 0:00:54.040 what the FED is gonna do. All I know is 0:00:54.080 --> 0:00:56.920 because I go like an inch deep on this FED stuff. 0:00:56.920 --> 0:00:59.880 But I know guys like you go way way deep. 0:01:00.480 --> 0:01:02.920 Is it fifty basis points or SEVENTI five basis points? 0:01:02.920 --> 0:01:04.440 Is that what I need to focus on tomorrow. What 0:01:04.480 --> 0:01:06.960 should I really be looking at when we hear from 0:01:07.000 --> 0:01:09.679 the feder Reserve chairman. Yeah, so I think in the 0:01:09.760 --> 0:01:12.680 statement it's not going to be much of anything. I 0:01:12.720 --> 0:01:14.760 think it would be pretty surprising if they didn't go 0:01:15.319 --> 0:01:18.959 fifty basis points as the market expects. But the press 0:01:18.959 --> 0:01:21.560 conference afterward could have a lot of interesting detail that 0:01:21.920 --> 0:01:24.840 could really move a short term interest rate markets quite 0:01:24.840 --> 0:01:28.240 a lot, because if j Powell hints that, hey, if 0:01:28.280 --> 0:01:31.080 inflation stays at seven percent or six and a half percent, 0:01:31.120 --> 0:01:33.240 which is very likely to do in the near term 0:01:33.760 --> 0:01:35.880 on a year on ear basis, then we might go 0:01:36.000 --> 0:01:38.640 seventy five basis points. That's when you're going to see 0:01:38.680 --> 0:01:42.160 some fireworks potentially in in the pricing for future moves. 0:01:42.200 --> 0:01:44.600 So so I think it's that nuance that you're gonna 0:01:44.600 --> 0:01:47.960 have to listen for it at the press conference. Or 0:01:48.000 --> 0:01:49.560 do you think the market is going to react more 0:01:49.880 --> 0:01:52.559 perhaps to the balance sheet and any indication on what 0:01:52.640 --> 0:01:56.240 that actually looks like in the exercising of what shrinking 0:01:56.240 --> 0:01:59.640 the balance sheet actually looks like. Well. So, so it's 0:01:59.640 --> 0:02:02.520 interesting because the Federal Reserve, and I think this was 0:02:02.560 --> 0:02:05.000 missed pile a lot of folks. The Federal Reserve basically 0:02:05.000 --> 0:02:07.200 pre announced exactly what they're going to do, So the 0:02:07.240 --> 0:02:09.280 only thing that they really need to say tomorrow is 0:02:09.560 --> 0:02:10.880 are we going to start in May, are we going 0:02:10.919 --> 0:02:12.440 to start in June, or we're gonna start in July. 0:02:12.680 --> 0:02:14.880 But they basically told us almost all of the other 0:02:14.919 --> 0:02:18.239 relevant details. So we know this size that they're going 0:02:18.280 --> 0:02:20.480 to start to shrink. We know that they're going to 0:02:20.600 --> 0:02:24.359 use T bills to make a sixty billion dollar runoff 0:02:24.360 --> 0:02:27.560 of treasuries possible every month, so it's that's both a 0:02:27.600 --> 0:02:30.160 floor and a cap uh and also the size of 0:02:30.200 --> 0:02:33.080 the mortgage runoff. So so so we know all of 0:02:33.080 --> 0:02:35.880 those details already except the start date. So so that's 0:02:35.880 --> 0:02:39.280 gonna be the only relevant information. Um, there is I 0:02:39.280 --> 0:02:43.240 think a big misconception in the market that runoff is 0:02:43.240 --> 0:02:45.920 going to mean that you get higher longer term interest 0:02:46.000 --> 0:02:50.400 rates because the Federal Reserve is selling long term assets. Um, 0:02:50.440 --> 0:02:54.040 that's wrong. They are not. The Treasury Department is going 0:02:54.080 --> 0:02:56.960 to make the decision on what to sell. And so 0:02:57.000 --> 0:02:59.160 I think while yeah, you might get a little weakness, 0:02:59.160 --> 0:03:00.800 and I think the knee you are reaction might be 0:03:00.880 --> 0:03:02.480 for the yield curve to steep in a little bit 0:03:02.480 --> 0:03:05.120 on the announcement. I think you fade that because it's 0:03:05.160 --> 0:03:08.200 not going to persist for very long. But it hasn't 0:03:08.800 --> 0:03:11.360 been made clear, right, I mean it, correct me if 0:03:11.360 --> 0:03:13.120 I'm wrong, Ira, and I very well could be here 0:03:13.160 --> 0:03:15.799 the expert here. But there's two ways that a balance 0:03:15.800 --> 0:03:17.679 sheet can can be run off, right, You just don't 0:03:17.680 --> 0:03:21.880 reinvest the funds of or you actively sell it on 0:03:21.919 --> 0:03:24.240 the market. Are you saying that the actively selling part 0:03:24.320 --> 0:03:26.480 is off the table? They're they're not going to be 0:03:26.480 --> 0:03:29.000 actively selling. They've already told us that actually, and they 0:03:29.000 --> 0:03:31.160 told us that in January when they get their principles, 0:03:31.160 --> 0:03:33.400 and then they reiterated it at the last meeting when 0:03:33.720 --> 0:03:35.800 at the March meeting when they mentioned that they were 0:03:35.840 --> 0:03:37.400 going to do sixty billion dollars, it was going to 0:03:37.480 --> 0:03:40.800 be passive runoff. Um. Eventually they might sell, particularly in 0:03:40.840 --> 0:03:42.800 the mortgage sector. I don't think that they'll ever sell 0:03:42.800 --> 0:03:45.360 a treasury, but in the mortgage sector, at some point 0:03:45.400 --> 0:03:48.200 in a year, eighteen months, two years, they might end 0:03:48.240 --> 0:03:51.120 up selling some mortgages because as interest rates are so high, 0:03:51.520 --> 0:03:54.520 you don't get the pre payments of mortgages that maybe 0:03:54.560 --> 0:03:56.800 the FED wants, in fact, that thirty five billion dollar 0:03:56.880 --> 0:03:59.640 mortgage number is never going to get hit, um at 0:03:59.720 --> 0:04:02.840 least not until interest rates go down another hundred or 0:04:02.880 --> 0:04:05.040 hundred and fifty basis points. So it is going to 0:04:05.120 --> 0:04:07.640 be passive. So so we know that. So so that's where, 0:04:08.080 --> 0:04:10.480 um eight thirty tomorrow morning we get probably the more 0:04:10.520 --> 0:04:13.040 relevant information for the yield curve, and that's when the 0:04:13.080 --> 0:04:16.200 Treasury Department announces what they're going to be selling over 0:04:16.240 --> 0:04:19.080 the next three months in terms of notes and bonds 0:04:19.160 --> 0:04:21.960 and and even T bills. So so that's gonna be 0:04:22.080 --> 0:04:24.640 kind of almost a pre announcement. And now that we 0:04:24.680 --> 0:04:26.200 know that the FED is at some point in the 0:04:26.240 --> 0:04:28.400 near future going to be running off its balance sheet, 0:04:28.640 --> 0:04:31.800 the Treasury Department basically has to increase sales to the 0:04:31.839 --> 0:04:35.320 public um more than that than they would have had 0:04:35.320 --> 0:04:38.320 to otherwise. So um, so, so it's all going to 0:04:38.400 --> 0:04:41.040 be very mechanical. Uh. The market reaction, I think is 0:04:41.560 --> 0:04:44.320 maybe going to be the wrong market reaction initially until 0:04:44.320 --> 0:04:45.960 people kind of realize it's not as big of a 0:04:45.960 --> 0:04:48.320 deal as they think. Hey, I when the when the 0:04:48.320 --> 0:04:51.200 FED announced their pivot becoming more hawk is several months ago, 0:04:51.240 --> 0:04:54.400 it was kind of like three rate hikes in two Now, 0:04:55.040 --> 0:04:58.080 as I look at my w I RP GO function 0:04:58.080 --> 0:05:00.880 on the Bloomberg Trumoral World Interest Rate Ability, Yes, there 0:05:00.920 --> 0:05:03.640 is a function for that. I'm looking at ten, maybe 0:05:03.640 --> 0:05:06.479 eleven rate hikes through February of next year. Does that 0:05:06.520 --> 0:05:10.080 seem reasonable to you? Yeah? So, so it's it's not 0:05:10.120 --> 0:05:11.840 the number of hikes, that's how much they hike at 0:05:11.839 --> 0:05:13.920 each of those meetings, right. But but yeah, I mean 0:05:13.920 --> 0:05:16.440 we're talking about another you know, two hundred and fifty 0:05:16.480 --> 0:05:20.520 to three hundred basis points of interest rate increases. So um, So, 0:05:20.600 --> 0:05:23.800 using the w I RP function, what you'll note is 0:05:23.800 --> 0:05:27.520 eleven eleven hikes or cuts really means you have around 0:05:27.560 --> 0:05:31.680 two two seventy five bases points of hikes and and 0:05:31.720 --> 0:05:34.040 you know that's pretty significant. I mean, we haven't seen 0:05:34.080 --> 0:05:37.200 that pace of hiking really since the nineteen since the 0:05:37.279 --> 0:05:42.320 nineteen eighties. So, um, these were very good to me. Yeah, 0:05:42.360 --> 0:05:43.800 they were good for me too. It was it was 0:05:43.839 --> 0:05:45.400 a good year for music. It was a good decade 0:05:45.400 --> 0:05:48.360 for music as well. All right, So here's important stuff. 0:05:49.080 --> 0:05:51.640 I'm knee deep in the Yankee baseball I got NBA 0:05:51.760 --> 0:05:54.080 playoffs and then I've got one of my favorite sporting 0:05:54.080 --> 0:05:57.159 events of the year, which is a Kentucky Derby Saturday. 0:05:57.200 --> 0:05:59.440 If I do manage to find some free time in 0:05:59.480 --> 0:06:03.240 my sports viewing schedule, what football slash soccer match should 0:06:03.279 --> 0:06:05.600 I be watching? Oh? I think you gotta go with 0:06:06.000 --> 0:06:09.560 Liverpool Tottenham? Which will happen? Which will be taking place? 0:06:09.560 --> 0:06:13.280 Actually fight during the Kentucky Derby. Um So, Liverpool is 0:06:13.320 --> 0:06:15.440 still fighting to try to win the Premier League and 0:06:15.480 --> 0:06:18.359 Tottenham needs to win in order to uh have hopes 0:06:18.400 --> 0:06:20.360 to make the Champions League and stay in the top four. 0:06:20.400 --> 0:06:22.080 So that that's gonna be one heck of a match, 0:06:22.279 --> 0:06:24.159 all right. I know Tom will be onto that. Tom 0:06:24.400 --> 0:06:26.839 Keene is a big Tottenham fan. How that came about? 0:06:26.880 --> 0:06:29.359 I have no idea Ire Jersey, chief US interest rate 0:06:29.440 --> 0:06:33.120 strategists for Bloomberg Intelligence, also our go to person on 0:06:33.200 --> 0:06:35.560 all things soccer. You gotta get that in there because 0:06:35.720 --> 0:06:38.240 it's big. Um So, we'll see. But the I were 0:06:38.279 --> 0:06:42.320 talking about the FED tomorrow reporting, you know their meeting today. 0:06:42.360 --> 0:06:44.760 They're meeting tomorrow, will have the announcement two pm. Wall 0:06:44.800 --> 0:06:49.320 Street Time, Bloomberg TV coverage and radio starting at one o'clock. 0:06:49.360 --> 0:06:52.440 That full coverage of that, So we will be all 0:06:52.440 --> 0:06:54.640 over that. And again the question for this Feller Reserve 0:06:54.760 --> 0:06:58.560 is how restive does it need to be to fight uh, 0:06:58.600 --> 0:07:02.040 this persistent inflation that we're seeing in this economy. What 0:07:02.160 --> 0:07:04.880 can they do and how should they achieve that? So 0:07:04.920 --> 0:07:07.080 we'll be all over that tomorrow. Plus we've got jobs 0:07:07.120 --> 0:07:15.920 later in the week. This is Bloomer. All right, let's 0:07:15.920 --> 0:07:17.760 head down to Washington right now. I want to check 0:07:17.760 --> 0:07:19.200 them with Joe Matthew. I said, we gotta talk to 0:07:19.280 --> 0:07:20.840 Joe because he knows what's going on down there. He's 0:07:20.920 --> 0:07:24.480 watching it. Corresponding and host of Bloomberg Sound on that's 0:07:24.480 --> 0:07:27.280 a weekdays at five pm, All Street time, Joe. This 0:07:27.360 --> 0:07:30.680 Supreme Court, the United States Supreme Court generally doesn't leak stuff, 0:07:30.760 --> 0:07:32.960 does it. What's going on today with you folks down 0:07:32.960 --> 0:07:35.040 in Washington. Well, you know, it's it's interesting when you 0:07:35.080 --> 0:07:38.680 see the reaction from Democrats versus Republicans. You can imagine 0:07:38.720 --> 0:07:42.720 the Democratic reaction. Outraged. Senator Schumer just on the floor 0:07:42.760 --> 0:07:45.240 called this a dark and disturbing day for America. But 0:07:45.320 --> 0:07:50.920 Republicans are are demanding an investigation into who leaked this. 0:07:51.120 --> 0:07:54.000 You know, they're about three dozen clerks in the Supreme Court, 0:07:54.080 --> 0:07:57.440 the justices themselves. Not many people have access to a 0:07:57.520 --> 0:08:01.360 document like this. My goodness, the pdf is published right online. So, uh, 0:08:01.720 --> 0:08:04.920 at some point you can expect hearings into this. Uh. 0:08:05.040 --> 0:08:07.600 We heard from Senator Mitch McConnell in a written statement 0:08:07.600 --> 0:08:11.320 a short time ago. He's even talking about possible criminal charges. 0:08:11.360 --> 0:08:13.480 He says, the Chief Justice must get to the bottom 0:08:13.520 --> 0:08:16.440 of it. The Department of Justice must pursue criminal charges 0:08:16.800 --> 0:08:20.840 if applicable. That's coming from the Republican leader in the Senate, Joe. 0:08:20.920 --> 0:08:25.240 So I take from that that maybe the the idea 0:08:25.320 --> 0:08:28.200 that's forming within the Beltway today is that perhaps this 0:08:28.320 --> 0:08:32.600 was leaked to benefit the Democrats. Well, look, that's certainly 0:08:32.640 --> 0:08:34.800 how Republicans might look at it. Not not only that, 0:08:34.840 --> 0:08:36.840 but just to kind of up end, you know, the 0:08:36.880 --> 0:08:39.880 balance here in Washington, to turn another institution around. It's 0:08:39.880 --> 0:08:42.240 hard to tell what the motivation would be, because a 0:08:42.280 --> 0:08:44.960 lot of people do lead themselves to think that this 0:08:45.000 --> 0:08:48.560 would help Democrats in the midterm elections. Uh. Certainly could 0:08:48.559 --> 0:08:51.360 be a motivating principle, could mean a very different level 0:08:51.400 --> 0:08:53.880 of turnout for Democrats. But there's gonna be a legislative 0:08:53.880 --> 0:08:58.160 answer to this, potentially even before November, we heard from 0:08:58.240 --> 0:09:00.079 Chuck Schumer that he wants to bring this to a 0:09:00.160 --> 0:09:02.880 vote UH in the Senate. He just said that a 0:09:02.920 --> 0:09:07.000 short time ago. UH will need more pro choice senators, 0:09:07.040 --> 0:09:09.720 says President Biden, and a pro choice majority in the 0:09:09.760 --> 0:09:14.640 House to adopt legislation that codifies ROW, which Joe Biden 0:09:14.679 --> 0:09:16.720 says he will work to pass and sign into law. 0:09:17.080 --> 0:09:19.360 So it'll be interesting to see how quickly this could happen. 0:09:19.360 --> 0:09:21.800 Of course, it's not likely they have the votes in 0:09:21.920 --> 0:09:25.480 the United States Senate, but members will be called to 0:09:26.080 --> 0:09:28.160 say up or down on this. They will have to, 0:09:28.360 --> 0:09:31.880 likely before the midterms, let the world know how they 0:09:31.920 --> 0:09:35.520 would vote on abortion. Well, as I was gonna ask next, Joe, 0:09:36.160 --> 0:09:38.640 do we expect anything to change the result in terms 0:09:38.679 --> 0:09:41.800 of next steps? Well, look, we have to remember that 0:09:41.840 --> 0:09:43.600 this is a draft. It is not a ruling. We 0:09:43.640 --> 0:09:47.040 will get one, we expect by July. So it's frequent 0:09:47.280 --> 0:09:51.520 that these change. They evolve dramatically between the draft stage 0:09:51.559 --> 0:09:54.640 and a final ruling. The thing is, we're talking about 0:09:54.720 --> 0:09:57.840 Roe v. Wade, and if you're in the legal community, 0:09:57.960 --> 0:10:01.079 never mind as Supreme Court justice, you probably know how 0:10:01.120 --> 0:10:03.560 you feel about this. So it's not like we're going 0:10:03.600 --> 0:10:07.880 into this with with undecided justices or justices that may 0:10:07.880 --> 0:10:10.400 be compelled to change their minds. That's probably less likely 0:10:10.440 --> 0:10:13.720 in this case. Uh. And and if this is what 0:10:13.760 --> 0:10:16.679 it appears to be, we're about to see a major 0:10:16.760 --> 0:10:20.400 change in this court. What's the feeling Joe down in 0:10:20.720 --> 0:10:25.880 Washington as to timing? I mean, I guess you could say, boy, 0:10:25.920 --> 0:10:28.959 this is you know, we've got the midterm elections coming 0:10:29.040 --> 0:10:31.320 up and it's tied to that. And any sense of 0:10:31.360 --> 0:10:34.760 why now this came out? No, Uh, we certainly can't 0:10:34.760 --> 0:10:36.080 tell you that if we don't know who did it. 0:10:36.120 --> 0:10:39.160 But uh, I will also remind you though that people 0:10:39.320 --> 0:10:42.160 knew that this could happen, This was likely gonna come. 0:10:42.400 --> 0:10:46.000 We've had oral arguments over the Mississippi law back in December. 0:10:46.400 --> 0:10:50.120 This was drawn up in February. It's just it's different 0:10:50.240 --> 0:10:53.360 when you actually see it in writing. It just feels 0:10:53.400 --> 0:10:55.800 different this morning because a lot of folks, I think, 0:10:55.800 --> 0:10:58.960 probably didn't want to believe what their what their brains 0:10:59.000 --> 0:11:03.320 might have been telling them. I mean, it's still shocking 0:11:03.360 --> 0:11:05.480 to me in terms of that this was even leaked. 0:11:05.520 --> 0:11:07.720 And I have to ask, is there any precedent for 0:11:07.840 --> 0:11:10.680 something like this. There's not on this level a creaty 0:11:10.679 --> 0:11:14.280 where you've actually got a document dump. But we have 0:11:14.440 --> 0:11:18.280 had leaks from the court, and ironically or coincidentally, it 0:11:18.400 --> 0:11:21.560 was in fact Roe v. Wade. It was in two 0:11:22.080 --> 0:11:26.400 when the Washington Post had had sources reporting on discord 0:11:26.440 --> 0:11:29.200 within the Court that justices were wrangling over this, struggling 0:11:29.240 --> 0:11:32.920 to come to a final ruling. But you know, this 0:11:33.000 --> 0:11:36.600 is a whole other level, This is Pentagon papers level, 0:11:37.200 --> 0:11:40.880 uh leak here where you've got the document with names people, uh, 0:11:40.920 --> 0:11:44.840 their actual language written out very clearly. It's ninety eight 0:11:44.840 --> 0:11:47.079 pages and it doesn't leave a lot to the imagination. 0:11:47.200 --> 0:11:49.000 All right, Joe, good stuff. Thank you so much for 0:11:49.080 --> 0:11:51.079 taking a time Joe to join us. Give us the 0:11:51.160 --> 0:11:54.320 latest from Washington, d C. Again, this news bombshell this 0:11:54.360 --> 0:11:57.360 morning that we all woke up to and including our 0:11:57.360 --> 0:12:01.720 folks down on Washington, about this leaked document purportedly from 0:12:01.760 --> 0:12:04.960 the Supreme Court as it relates to uh Roe v. Wade. 0:12:05.000 --> 0:12:08.199 And obviously it's got everybody talking about and certainly the 0:12:08.200 --> 0:12:11.840 folks in Washington demanding some action there. Joe, Matthew, Washington corresponded. 0:12:12.040 --> 0:12:15.360 He's hosted Bloomberg Sound on weekdays at five pm Wall 0:12:15.400 --> 0:12:21.120 Street Time on Bloomberg Radio. You think about the economics 0:12:21.120 --> 0:12:23.480 of this country, you look at the labor market. Very 0:12:23.520 --> 0:12:26.120 interesting story that we're gonna get some labor numbers later 0:12:26.200 --> 0:12:28.760 this week, but we're near a fifty three year low 0:12:28.840 --> 0:12:31.040 of three point six percent in terms of unemployment. About 0:12:31.040 --> 0:12:34.520 the labor force participation rate is still below its pre 0:12:34.640 --> 0:12:38.000 pandemic levels at sixty two point four and far off 0:12:38.360 --> 0:12:41.160 the peak of sixty seven point three percent in two thousand. 0:12:41.480 --> 0:12:44.480 U Matt Winkler, editor in Chief emeritus, more importantly the 0:12:44.640 --> 0:12:48.200 founder of Bloomberg News, the whole kit and caboodle. He 0:12:48.280 --> 0:12:50.560 joined us here in our Bloomberg and after Broker Studio. Matt, 0:12:50.559 --> 0:12:53.640 you sat down with the Commerce Secretary Gina Ramondo recently. 0:12:55.080 --> 0:12:57.440 What did she have to say about kind of how 0:12:57.520 --> 0:12:59.960 they in the administration are viewing this economy, maybe the 0:13:00.080 --> 0:13:03.800 messaging around what is going on about current economic conditions. 0:13:03.800 --> 0:13:09.560 Well as the former treasurer, former governor, and first venture 0:13:09.600 --> 0:13:13.240 capitalist of Rhode Island, she would say born out of 0:13:13.280 --> 0:13:16.360 experience and also looking at data that we've compiled at 0:13:16.400 --> 0:13:25.080 Bloomberg that UM. Childcare, daycare UM are investments UM, and 0:13:25.200 --> 0:13:31.320 they're not as many politicians assert social programs. And the 0:13:31.480 --> 0:13:37.120 data that shows that is in fact true is when 0:13:37.120 --> 0:13:41.160 you look at states that have invested in child care 0:13:41.240 --> 0:13:45.680 specifically UH and embraced say the medicaid expansion of the 0:13:45.720 --> 0:13:50.320 Affordable Care Act, those states have actually generated greater job 0:13:50.360 --> 0:13:55.320 growth UM, higher labor participation rates, and higher rates of 0:13:55.360 --> 0:13:59.040 personal income, whereas the states that have done nothing with 0:13:59.120 --> 0:14:05.520 job care UH sorry, childcare or healthcare UM have inferior 0:14:06.160 --> 0:14:10.680 rates of job growth and similarly with personal income. And 0:14:10.720 --> 0:14:15.160 then again she would look at businesses that disclose annually 0:14:15.400 --> 0:14:18.960 what they're doing with their workforce, making it more diverse, 0:14:19.400 --> 0:14:24.920 providing more childcare uh extensions of medical care beyond the 0:14:24.960 --> 0:14:28.880 Affordable Care Act, and those companies actually outperform the companies 0:14:28.880 --> 0:14:33.040 that do nothing or disclose nothing UM in terms of 0:14:33.160 --> 0:14:37.680 share performance and lower volatility. So that's the data, and 0:14:37.760 --> 0:14:40.560 so her mantra would be, UH, this is all good 0:14:40.560 --> 0:14:42.320 for the economy and we should be doing it. And 0:14:42.360 --> 0:14:45.480 if we do it, then the labor participation rate will 0:14:45.520 --> 0:14:49.480 improve accordingly. And it kind of makes sense if you 0:14:49.560 --> 0:14:52.040 think about it, because if women don't have to worry 0:14:52.120 --> 0:14:54.840 about things like childcare, which they always have to do 0:14:54.880 --> 0:15:00.400 because they're usually the ones who are saddled with that responsibility. UM, 0:15:00.440 --> 0:15:03.480 and also healthcare for that matter. Uh, you're gonna get 0:15:03.480 --> 0:15:06.560 a higher labor participation rate. And this is coming out 0:15:06.560 --> 0:15:09.320 of time when you have an extremely tight jobs market. 0:15:09.360 --> 0:15:11.200 I expect to term of how to speak about that 0:15:11.240 --> 0:15:13.960 tomorrow as well. But not the only issue, uh, specifically 0:15:14.000 --> 0:15:17.640 for the American economy inflation, chip shortages, and Gina Vermondo 0:15:17.680 --> 0:15:21.400 has been very vocal about that as well. Yeah, Unfortunately 0:15:21.440 --> 0:15:25.200 she doesn't have a magic wand that everybody would like 0:15:25.240 --> 0:15:28.840 her to have. However, she did uh do a few 0:15:28.880 --> 0:15:32.479 things at commerce that are a departure from a predecessor. 0:15:32.560 --> 0:15:37.200 She created uh, you know, challenge programs that are public 0:15:37.240 --> 0:15:43.040 private partnerships to get business incentivized to do things that 0:15:43.080 --> 0:15:45.200 maybe they otherwise wouldn't do it. One of those things, 0:15:45.200 --> 0:15:47.200 by the way, is you know, she's a big proponent 0:15:47.360 --> 0:15:51.600 of getting Congress to provide fifty billion dollars UH to 0:15:52.480 --> 0:15:56.480 create chip manufacturing, computer chip manufacturing in the United States. 0:15:57.040 --> 0:15:59.760 And her argument would be looked, this is good for everybody, 0:16:00.240 --> 0:16:02.520 it's good for the local economies, it's good for the 0:16:02.560 --> 0:16:06.760 businesses that have a shortage of chips right now. Uh 0:16:06.800 --> 0:16:09.960 so everything we can do in a public private uh 0:16:10.120 --> 0:16:13.240 partnership would go a long way to improving the problem. 0:16:13.280 --> 0:16:15.880 Having said that, she also says this isn't something that's 0:16:15.920 --> 0:16:19.760 going to be solved overnight or in six months or 0:16:19.800 --> 0:16:23.800 you know, the end of next year, because the demand 0:16:23.840 --> 0:16:29.840 for chips today is inexorable, meaning everything that we do 0:16:29.920 --> 0:16:32.760 in the twenty one century economy depends on chips, and 0:16:32.760 --> 0:16:34.640 we just don't have enough of them. Yeah, and that's 0:16:34.640 --> 0:16:36.840 a whole another story. I still don't understand how this 0:16:37.040 --> 0:16:40.600 industry did not foresee this and how they missed it. 0:16:40.800 --> 0:16:43.240 So and I haven't gotten a great answer, but um, 0:16:43.280 --> 0:16:45.440 because we'll have to see. But one of the issues, 0:16:45.960 --> 0:16:49.000 Matt is just you know, when you think about this, 0:16:49.080 --> 0:16:51.480 it might be a messaging problem for the Democratic Party 0:16:51.480 --> 0:16:53.640 because when you talk about some of these social programs, 0:16:53.960 --> 0:16:58.440 programs childcare, Republicans might frame and in context of spending, 0:16:59.000 --> 0:17:01.840 whereas the Democrats probably preferred to frame it in the 0:17:01.920 --> 0:17:05.919 context of investment in the economy. But your column shows 0:17:06.000 --> 0:17:09.760 the data supports these investments. It seems like that might 0:17:09.840 --> 0:17:13.280 be something that this Commerce secretary, maybe the administration we 0:17:13.359 --> 0:17:18.040 want to think about. You know, Uh, Clinton's great political strategist, 0:17:18.119 --> 0:17:22.600 Jim carverl you know, said it's the economy stupid. And 0:17:22.840 --> 0:17:27.520 that's one thing that Gena Romundo has always gotten. And 0:17:27.680 --> 0:17:30.160 she's gotten it because she started out, as I said, 0:17:30.200 --> 0:17:34.040 as a venture capitalist. She's no stranger by the way 0:17:34.119 --> 0:17:39.440 to poverty and all the issues associated with broken families 0:17:39.480 --> 0:17:42.880 and childcare. I mean, she worked in these programs before 0:17:42.880 --> 0:17:45.920 she went to Yale Law School. But what she did 0:17:45.960 --> 0:17:49.040 show when she was Treasurer of Rhode Island and then 0:17:49.160 --> 0:17:54.480 governor is that if you can frame what ails us 0:17:54.600 --> 0:17:57.600 in the context of this is what we need to 0:17:57.640 --> 0:18:00.920 do to solve it. And sometimes it's not a happy message, 0:18:00.920 --> 0:18:03.400 but it's a very accurate message, and you just need 0:18:03.480 --> 0:18:05.600 to say it again and again. And that's what she's done. 0:18:05.600 --> 0:18:09.239 And I suspect that there aren't as many Democrats with 0:18:09.280 --> 0:18:14.120 her experience or her knowledge of the economy and business. Uh. 0:18:14.160 --> 0:18:16.399 You know, she brought thirty companies to Rhode Island to 0:18:16.480 --> 0:18:20.600 create jobs in the unemployment rate dropped to a record low, 0:18:20.680 --> 0:18:23.680 I think three point four percent in Rhode Island by 0:18:23.720 --> 0:18:26.399 the time she left to become Calmerce secretary. So she 0:18:26.480 --> 0:18:29.480 knows her way around data, she knows her way around 0:18:30.560 --> 0:18:34.280 the politics of the economy, and she can frame those 0:18:34.320 --> 0:18:39.240 politics in a way that is understandable but also you know, compelling, 0:18:39.600 --> 0:18:43.000 because if it is true according to the data, then 0:18:43.119 --> 0:18:45.960 why shouldn't we go along with it? And not every 0:18:46.119 --> 0:18:49.320 politician has her experience or knowledge. Matt, while we've got 0:18:49.359 --> 0:18:52.000 here in our studio, would need to get the benefit 0:18:52.040 --> 0:18:54.639 of your wisdom, your experience. Falling, Washington, d C. What 0:18:54.680 --> 0:18:57.000 did you make of the news this morning about this 0:18:57.119 --> 0:19:01.520 Supreme Court potential ruling that has been leaked to the world. 0:19:01.520 --> 0:19:05.760 Weare initial take, Well, uh, we've never seen a leak, 0:19:06.560 --> 0:19:10.200 at least in our time modern times. We've never seen 0:19:10.240 --> 0:19:15.480 a leak of a Supreme Court pending decision. So that's 0:19:15.520 --> 0:19:20.359 the first, uh, if you like stunning surprise. The second, 0:19:20.359 --> 0:19:24.600 of course, is what was written itself, which um, I 0:19:24.680 --> 0:19:28.080 have to say, if it is the law, if it 0:19:28.160 --> 0:19:31.120 becomes a Supreme Court decision in June, uh, it will 0:19:31.160 --> 0:19:33.120 take us all the way back to dread. Scott. We're 0:19:33.119 --> 0:19:36.600 not just talking about abortion. We're talking about reproductive rights. 0:19:36.640 --> 0:19:40.560 We're talking about contraception, We're talking about gay rights, gay marriage, 0:19:41.000 --> 0:19:45.119 the whole package. That's what this decision says to America 0:19:45.280 --> 0:19:48.680 right now. It takes us back more than a century. Interesting, 0:19:48.720 --> 0:19:50.680 all right, We'll have to put that in context and 0:19:50.680 --> 0:19:52.840 will be a lot more reporting on this as we 0:19:52.920 --> 0:19:55.000 go forward, and clearly it will be an issue if 0:19:55.040 --> 0:19:58.760 these upcoming midterm elections. Matt Winkler, editor in chief Bloomberg News. 0:19:58.840 --> 0:20:03.560 Check out his columns. They're really fascinating talking about Gina Ramundo, 0:20:03.640 --> 0:20:07.280 the Commerce Secretary, and the benefits of investing in some 0:20:07.320 --> 0:20:15.280 of these social programs for the economy. Katherine Hawkins joins 0:20:15.359 --> 0:20:17.879 us you, Sup, portfolio manager and senior vice president at 0:20:17.920 --> 0:20:21.199 Baringer UM. Katherine, I want to talk a little bit 0:20:21.240 --> 0:20:24.760 about housing with you because I take since the beginning 0:20:24.800 --> 0:20:28.000 of this pandemic, I've been so pleasantly surprised, I think 0:20:28.040 --> 0:20:31.159 is the way to frame it, how strong the housing 0:20:31.240 --> 0:20:34.120 market has been. And yes, we've had tremendously low interest rates, 0:20:34.119 --> 0:20:36.359 and we've got a change in how people think about 0:20:36.359 --> 0:20:40.440 their work uh life balance. As we step back today 0:20:40.480 --> 0:20:43.520 with rising interest rates, how do you view this housing 0:20:43.600 --> 0:20:48.040 marketing United States? Hi, Paul, thanks for having me back 0:20:48.080 --> 0:20:50.560 on UM. I think that's a great question. I mean, 0:20:50.600 --> 0:20:53.600 we have seen a strong housing market, you know, despite 0:20:53.600 --> 0:20:58.480 the pandemic, and actually in the face of it becomes stronger, UM. 0:20:58.520 --> 0:21:00.720 And I think that there's a big concerned that that 0:21:00.840 --> 0:21:02.479 is going to lead to another bust that we all 0:21:02.520 --> 0:21:05.600 remember in the two thousands. UM. I think the biggest 0:21:05.640 --> 0:21:08.760 difference of this market and kind of the two thousands 0:21:08.760 --> 0:21:13.520 that everyone is really scared about, is that the difference 0:21:13.800 --> 0:21:17.480 is from what happened fifteen years ago. These high home 0:21:17.520 --> 0:21:20.800 prices were then driven by really loose lending practices and 0:21:20.920 --> 0:21:23.600 rampant investors speculation in the market. There was a lot 0:21:23.640 --> 0:21:26.760 of financial engineering taking place and putting borrowers in homes 0:21:26.800 --> 0:21:29.760 that they really couldn't afford, um. And then we're hit 0:21:29.880 --> 0:21:35.240 with some you know, interest rate hikes. Today, those housing 0:21:35.440 --> 0:21:39.560 the housing prices ingres increase is really driven by supply 0:21:39.600 --> 0:21:41.800 and demand rate. Throughout the all time record low, like 0:21:41.840 --> 0:21:44.040 you mentioned, Um, you had more people wanting to buy 0:21:44.080 --> 0:21:47.200