WEBVTT - Single Best Idea with Tom Keene: Seth Carpenter

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea in the first full week of the

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<v Speaker 2>year jobs report on Friday, Goldman Sachs coming out with

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<v Speaker 2>a tepid look. Thank you David Miracle for sending that

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<v Speaker 2>over consensus is one sixties. I don't know where the

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<v Speaker 2>whisper number is. Michael McKee knows that, but they're down

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<v Speaker 2>at one twenty with an elevated unemployment rate to four

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<v Speaker 2>point three percent. Just one view of that from you

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<v Speaker 2>on Azziisen team over at Goldman Sachs. We spoke with

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<v Speaker 2>Seth Carpenter of Morgan Stanley today, wide ranging discussion, really

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<v Speaker 2>really interesting, and one of the great things we talked

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<v Speaker 2>about was just the state of the economy and the

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<v Speaker 2>path forward here. Seth Carpenter of Morgan Stanley.

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<v Speaker 1>So, I think every year and there's a bit of revision,

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<v Speaker 1>I suspect there is a good chance that we're going

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<v Speaker 1>to see a bit more than I think in the

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<v Speaker 1>near dart right over the next three months, that so

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<v Speaker 1>called residual seasonality that we've seen in the PCE inflation numbers.

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<v Speaker 1>I think that's a real possibility here that could throw

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<v Speaker 1>the throw a real curveball for the FED, I will

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<v Speaker 1>say the numbers on employment right, given how much immigration

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<v Speaker 1>we've had over the past couple of years, and as

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<v Speaker 1>the BLS tries to catch up with sort of their

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<v Speaker 1>different surveys, I think we could see some more revisions

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<v Speaker 1>this year. Twenty twenty five is probably the most difficult

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<v Speaker 1>forecasting year since twenty twenty and maybe early twenty twenty

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<v Speaker 1>one when we had COVID. I mean, this is a

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<v Speaker 1>really tricky year for forecasting.

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<v Speaker 2>That's a really important comment from a guy I worked

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<v Speaker 2>at the Federal Reserve, at the Treasury, and of course

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<v Speaker 2>his work at Princeton under Ben Bernanke a number of

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<v Speaker 2>years ago. Further seth Carpenter here, I'm not so much

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<v Speaker 2>like getting a crystal ball out and gaming the future

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<v Speaker 2>and all the marketing blah blah blah forecasts. He taught

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<v Speaker 2>about the risks ahead.

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<v Speaker 1>You know, usually we do our year ahead forecasts and

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<v Speaker 1>it's supposed to be a bit of a roadmap for people.

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<v Speaker 1>But now this time around, it's more of a set

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<v Speaker 1>of risks and how to start to create a framework

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<v Speaker 1>for those risks. So for economic policies that might move

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<v Speaker 1>the macro needle, you know, we break it down into

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<v Speaker 1>trade policy, tariffs, immigration policy, fiscal policy, and then deregulation.

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<v Speaker 1>And what might be slightly controversial is we've said for

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<v Speaker 1>those last two fiscal policy and deregulation, maybe move those

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<v Speaker 1>off the table for twenty twenty five for macro implications.

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<v Speaker 1>Deregulation I think is going to be huge at a

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<v Speaker 1>micro level and definitely for individual sectors in parts of

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<v Speaker 1>the equity market, But in terms of GDP inflation, that

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<v Speaker 1>sort of thing, I'm not convinced it matters at all

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<v Speaker 1>for at least for twenty twenty five. Similarly, fiscal policy

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<v Speaker 1>we're at least for now assuming the Congress spends the

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<v Speaker 1>better part of the year extending the tax cuts, and

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<v Speaker 1>so again it off the table for twenty twenty five.

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<v Speaker 1>So we're really looking at tariff policy and immigration policy

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<v Speaker 1>as the key factors here.

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<v Speaker 2>Seth Carpenter of Morgan Stanley. The view Ford is simple,

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<v Speaker 2>an eventful year. There will be a focus on international relations,

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<v Speaker 2>the politics of America as we moved to the inauguration,

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<v Speaker 2>But I really have to say we're going to stay

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<v Speaker 2>focused on markets, on equities, bonds, currencies and commodities, and

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<v Speaker 2>I have to say front center for me right now

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<v Speaker 2>is gleaning the dollar I came in today my Bloomberg

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<v Speaker 2>launch pad. I probably have twenty currency pairs, I'm guessing,

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<v Speaker 2>and all of it was quiescent. Except and those are

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<v Speaker 2>the kind of things we're going to try to bring

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<v Speaker 2>to you. Except today was a Chinese y want with

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<v Speaker 2>a two day jump condition. Weaker from the very managed

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<v Speaker 2>trend that you see out of Beijing, you wonder as

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<v Speaker 2>a weaker in Nby and Order. Here is a solution

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<v Speaker 2>for the horrific real estate domestic finance crisis, and a

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<v Speaker 2>commute across the nation. An Apple car place here six

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<v Speaker 2>Sam Android Auto, A good morning to ninety nine to

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<v Speaker 2>one FM in Washington up to our flagship, and a

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<v Speaker 2>congested New York Bloomberg eleven's forree oh and up to

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<v Speaker 2>ninety two nine in New England and Boston as well.

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<v Speaker 2>On podcasts, the best path to YouTube podcasts. This is

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<v Speaker 2>single best idea.