1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,560 --> 00:00:15,560 Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast 5 00:00:15,560 --> 00:00:18,479 Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:23,480 Speaker 1: at Bloomberg dot com Slash podcast. Let's get over to UM. 7 00:00:23,520 --> 00:00:26,400 Speaker 1: Lisa ericson right now, Senior VP and co headed Public Markets, 8 00:00:26,400 --> 00:00:31,600 Speaker 1: the Public Markets Group at US Bank Wealth Management, Lisa, UM, 9 00:00:31,640 --> 00:00:34,920 Speaker 1: I wonder what you think as we look at inflation 10 00:00:35,000 --> 00:00:37,440 Speaker 1: numbers that are either shockingly high like the p p 11 00:00:37,600 --> 00:00:41,559 Speaker 1: I number yesterday, or even higher than expected like the 12 00:00:41,600 --> 00:00:47,440 Speaker 1: cp I number today, does that concern you, Well, absolutely mad. 13 00:00:47,520 --> 00:00:50,320 Speaker 1: It's something that we're keeping an eye on, and while 14 00:00:50,360 --> 00:00:53,600 Speaker 1: our base cases that some of those inflationary pressures do 15 00:00:53,720 --> 00:00:59,880 Speaker 1: come down over the remainder of this year and into 16 00:01:00,320 --> 00:01:03,680 Speaker 1: UM certainly, the fact that we've got a pretty broad 17 00:01:03,680 --> 00:01:07,279 Speaker 1: based basket of goods that are contributing to the inflation number, 18 00:01:07,680 --> 00:01:10,440 Speaker 1: and the fact that it's taking some time for both 19 00:01:10,480 --> 00:01:13,520 Speaker 1: the labor market and the supply chains to adjust is 20 00:01:13,560 --> 00:01:16,600 Speaker 1: something that we want to keep our eyes on right, tins. 21 00:01:16,680 --> 00:01:20,000 Speaker 1: Inflation is so broad based. I'm wondering what concerns you 22 00:01:20,040 --> 00:01:24,040 Speaker 1: the most. Energy is a really easy thing to point out, 23 00:01:24,120 --> 00:01:26,759 Speaker 1: and you think about the ripple effects for but are 24 00:01:26,760 --> 00:01:30,520 Speaker 1: there places that are maybe less obvious that we should 25 00:01:30,560 --> 00:01:35,199 Speaker 1: also be concerned about. Yeah, well, I think to your point, 26 00:01:35,360 --> 00:01:38,360 Speaker 1: it's it's really two things. So one is just the 27 00:01:38,400 --> 00:01:41,839 Speaker 1: fact that it's really across the broader base. So while 28 00:01:41,920 --> 00:01:45,320 Speaker 1: you have some areas like energy that can be more 29 00:01:45,400 --> 00:01:48,520 Speaker 1: volatile over time, what you see is, you know, over 30 00:01:48,520 --> 00:01:51,200 Speaker 1: the last few months is really looking at the basket 31 00:01:51,240 --> 00:01:54,120 Speaker 1: of goods. It's not just some of the areas that 32 00:01:54,200 --> 00:01:57,840 Speaker 1: historically can fluctuate some as much, but also some of 33 00:01:57,840 --> 00:02:02,520 Speaker 1: the stickier types of I think that are increasing. So 34 00:02:02,760 --> 00:02:05,320 Speaker 1: that really is a concern, and I think, um, you know, 35 00:02:05,640 --> 00:02:08,600 Speaker 1: the other issue is how much that then begins to 36 00:02:09,240 --> 00:02:13,200 Speaker 1: affect inflation expectations going forward. And as we look at it, 37 00:02:13,240 --> 00:02:16,080 Speaker 1: what we see is that there are some elevation in 38 00:02:16,080 --> 00:02:20,640 Speaker 1: inflation expectations over the next couple of years as a result. Um, 39 00:02:20,680 --> 00:02:22,720 Speaker 1: but you know, over the longer term, what we see 40 00:02:22,760 --> 00:02:26,680 Speaker 1: is that those are trending down. So again, um, you know, 41 00:02:26,760 --> 00:02:28,640 Speaker 1: that's The other thing I think we really want to 42 00:02:28,680 --> 00:02:31,799 Speaker 1: watch is not just where the basket goes right now, 43 00:02:31,880 --> 00:02:37,160 Speaker 1: but how that's affecting the expectations going forward. What do 44 00:02:37,240 --> 00:02:41,280 Speaker 1: you expect in terms of the SMP right now? Um, 45 00:02:41,280 --> 00:02:45,560 Speaker 1: we're I think up about year to date. Last year 46 00:02:45,720 --> 00:02:48,960 Speaker 1: was a good seventeen percent gain, the year before that 47 00:02:49,120 --> 00:02:55,360 Speaker 1: was almost Do we can we really move much further higher? Yeah? 48 00:02:55,440 --> 00:02:58,400 Speaker 1: Great question that. Well, we're still optimistic on the US 49 00:02:58,440 --> 00:03:01,680 Speaker 1: equity market and the SMPS five. And the reason why is, 50 00:03:01,760 --> 00:03:04,079 Speaker 1: you know, overall, if you look at it, we've got 51 00:03:04,120 --> 00:03:07,800 Speaker 1: a pretty nice context. Despite what some of the worries 52 00:03:07,880 --> 00:03:10,880 Speaker 1: we are talking about with respect to inflation. If you 53 00:03:10,919 --> 00:03:14,560 Speaker 1: step back and look at the indicators underpinning growth, for example, 54 00:03:14,960 --> 00:03:18,160 Speaker 1: you know they're universally as strong, and we see the 55 00:03:18,280 --> 00:03:21,360 Speaker 1: trend of movement of those indicators as continuing to be 56 00:03:21,480 --> 00:03:25,480 Speaker 1: positive when we measure across a broad range. And you 57 00:03:25,520 --> 00:03:28,480 Speaker 1: know that's also being reflected in corporate earning. So, as 58 00:03:28,520 --> 00:03:32,280 Speaker 1: we all know, third quarter earnings reports came in very nicely, 59 00:03:32,320 --> 00:03:34,760 Speaker 1: and that again was across the board as opposed to 60 00:03:34,840 --> 00:03:38,240 Speaker 1: being limited to a couple of sectors. So you've got 61 00:03:38,240 --> 00:03:41,000 Speaker 1: the fundamental support there for the market, I think to 62 00:03:41,080 --> 00:03:44,520 Speaker 1: your point, you know, as we move into the question 63 00:03:44,600 --> 00:03:47,120 Speaker 1: is really going to be you know how that continues 64 00:03:47,160 --> 00:03:50,600 Speaker 1: to play out, you know, as some of the initial 65 00:03:51,040 --> 00:03:54,880 Speaker 1: reopening spurt comes off, and then again as we've been 66 00:03:54,920 --> 00:03:57,320 Speaker 1: talking about with the trajectory of what's going to happen 67 00:03:57,360 --> 00:04:01,640 Speaker 1: with inflation, there's been so much talk about bubbles lately, 68 00:04:02,040 --> 00:04:04,520 Speaker 1: I mean all year really, and then we've kept on 69 00:04:05,240 --> 00:04:07,960 Speaker 1: charging higher. You know, Matt and I were looking at 70 00:04:07,960 --> 00:04:10,520 Speaker 1: the screens. Just the Rivian IPO today is set for 71 00:04:11,360 --> 00:04:14,360 Speaker 1: a very healthy pop as it starts to trade, and 72 00:04:14,440 --> 00:04:17,159 Speaker 1: so we're unhealthy depending on how you look. Yeah, depending 73 00:04:17,360 --> 00:04:19,960 Speaker 1: that was our big debate, do you pop or not? Um? 74 00:04:20,160 --> 00:04:23,880 Speaker 1: And so that's the thing. Are you worried about valuations? 75 00:04:24,000 --> 00:04:27,320 Speaker 1: If everybody is so constructive here, at what point do 76 00:04:27,320 --> 00:04:30,400 Speaker 1: you start to get concerns that things are worth so 77 00:04:30,480 --> 00:04:34,279 Speaker 1: much more than they're actually earning. Yeah. No, that's a 78 00:04:34,320 --> 00:04:37,360 Speaker 1: great point, and you know, valuations is something to keep 79 00:04:37,400 --> 00:04:39,280 Speaker 1: an eye on. But as we look at it, I 80 00:04:39,279 --> 00:04:43,000 Speaker 1: think just the current low level of interest rates really 81 00:04:43,040 --> 00:04:46,440 Speaker 1: actually makes valuations in what we would call the high 82 00:04:46,440 --> 00:04:49,240 Speaker 1: side off fair but not excessive. So if you just 83 00:04:49,279 --> 00:04:53,160 Speaker 1: look again at history and how much, uh, you know, 84 00:04:53,200 --> 00:04:57,080 Speaker 1: earning yields are pricing over where interest rates are now, 85 00:04:57,160 --> 00:05:01,719 Speaker 1: we actually see that they're above average, meaning that stocks 86 00:05:01,720 --> 00:05:05,200 Speaker 1: are actually giving you a nice premium in terms of 87 00:05:05,360 --> 00:05:09,880 Speaker 1: the potential return relative to fixed income um compared to 88 00:05:09,960 --> 00:05:13,039 Speaker 1: that spread historically. So again it's something we want to 89 00:05:13,120 --> 00:05:15,520 Speaker 1: keep an eye on. But in an environment like today, 90 00:05:15,600 --> 00:05:18,960 Speaker 1: where again you see both the macro indicators as well 91 00:05:19,000 --> 00:05:22,400 Speaker 1: as what's going on with corporate operations and earnings coming 92 00:05:22,400 --> 00:05:27,640 Speaker 1: in very nicely, those valuations can be more easily justified. Lisa, 93 00:05:27,640 --> 00:05:29,200 Speaker 1: great to get some time with you, Thanks so much 94 00:05:29,360 --> 00:05:32,719 Speaker 1: for joining us. Lisa ericson their senior VP and co 95 00:05:32,920 --> 00:05:37,600 Speaker 1: head of the Public Markets Group at US Bank Wealth Management. 96 00:05:41,880 --> 00:05:44,600 Speaker 1: Let's get over right now to David Kat's, chief investment 97 00:05:44,640 --> 00:05:48,280 Speaker 1: officer and President Matrix Asset Advisors. Have been talking a 98 00:05:48,320 --> 00:05:50,640 Speaker 1: lot about inflation today, David, and we did see a 99 00:05:50,720 --> 00:05:55,080 Speaker 1: higher print than anticipated on the cp I. What's your 100 00:05:55,080 --> 00:05:59,160 Speaker 1: take so short term, there's no question inflation has picked 101 00:05:59,240 --> 00:06:02,040 Speaker 1: up to a very eating full level. We don't think 102 00:06:02,080 --> 00:06:04,360 Speaker 1: it's going to go away, but we do think it's 103 00:06:04,400 --> 00:06:09,000 Speaker 1: going to trend lower starting in early two and we 104 00:06:09,040 --> 00:06:11,279 Speaker 1: think it will get down to a manageable level. So 105 00:06:11,600 --> 00:06:14,280 Speaker 1: we're looking for inflation to stabilize somewhere under like three 106 00:06:14,320 --> 00:06:17,400 Speaker 1: and a half percent. We don't think it's ultimately going 107 00:06:17,480 --> 00:06:20,120 Speaker 1: to derail the financial markets, but it does mean that 108 00:06:20,160 --> 00:06:22,640 Speaker 1: we do think bond rates should be going up and 109 00:06:22,720 --> 00:06:26,000 Speaker 1: and the Feds next move at some point we'll be 110 00:06:26,040 --> 00:06:31,279 Speaker 1: moving rate higher. Well, how do you play the smp 111 00:06:32,040 --> 00:06:35,039 Speaker 1: I mean, we're not seeing major losses here, even on 112 00:06:35,080 --> 00:06:38,159 Speaker 1: its second day of declines after a very steady rally. 113 00:06:38,480 --> 00:06:39,880 Speaker 1: What are you buying? How do you how do you 114 00:06:39,880 --> 00:06:42,160 Speaker 1: deal with this for the rest of the year. So so, 115 00:06:42,200 --> 00:06:45,000 Speaker 1: we've been pretty bullish about stocks this year in light 116 00:06:45,040 --> 00:06:47,440 Speaker 1: of the most recent run up. We would not be 117 00:06:47,520 --> 00:06:51,200 Speaker 1: throwing new money into the market basically because the market 118 00:06:51,240 --> 00:06:53,880 Speaker 1: is pretty fully valued. However, there are a lot of 119 00:06:54,000 --> 00:06:56,720 Speaker 1: very good businesses that haven't done nearly as well as 120 00:06:56,760 --> 00:06:59,599 Speaker 1: the overall market, that are selling it fifteen or less 121 00:06:59,680 --> 00:07:02,000 Speaker 1: times earnings, and we think there in lies the opportunity, 122 00:07:02,040 --> 00:07:04,400 Speaker 1: so we think you want to be selective. Lots of 123 00:07:04,520 --> 00:07:07,919 Speaker 1: very good businesses out there. Um, you know, companies like 124 00:07:07,920 --> 00:07:11,160 Speaker 1: an am Gen or Beckton Dickinson haven't done a lot 125 00:07:11,200 --> 00:07:15,200 Speaker 1: but the businesses are doing well, very attractive valuations. UH 126 00:07:15,280 --> 00:07:18,800 Speaker 1: five serve in the technology and financial space as a 127 00:07:18,920 --> 00:07:22,360 Speaker 1: very strong company. They have an activist involved. Yet the 128 00:07:22,360 --> 00:07:24,680 Speaker 1: stock is down for the year. We think that easily 129 00:07:24,680 --> 00:07:28,440 Speaker 1: as like twenty or thirty percent upside. Zimmer is a 130 00:07:29,240 --> 00:07:32,320 Speaker 1: knee and hip replacement company. They just had a fairly 131 00:07:32,440 --> 00:07:35,320 Speaker 1: mediocre quarter. Part of it was because of the COVID 132 00:07:35,400 --> 00:07:38,360 Speaker 1: pick up. As COVID comes under control again, we think 133 00:07:38,360 --> 00:07:41,720 Speaker 1: it's a great reopening play. Um. So there are definitely 134 00:07:41,760 --> 00:07:44,840 Speaker 1: opportunities out there, but we would not get involved with 135 00:07:44,880 --> 00:07:47,400 Speaker 1: the things that are really hot. We don't think now 136 00:07:47,520 --> 00:07:49,760 Speaker 1: is a great time to be throwing money at the 137 00:07:49,920 --> 00:07:54,000 Speaker 1: electric vehicle area or the battery area because we think 138 00:07:54,000 --> 00:07:56,240 Speaker 1: a lot of those areas are very fully priced. Well. 139 00:07:56,280 --> 00:07:59,360 Speaker 1: Even with that said, you see Rivan today poised for 140 00:07:59,520 --> 00:08:03,680 Speaker 1: a really healthy pop if you could get syndicate. I 141 00:08:03,720 --> 00:08:05,880 Speaker 1: hope you got it right. I mean, you know that 142 00:08:05,920 --> 00:08:09,200 Speaker 1: those retail traders are also going to be loving that today. 143 00:08:09,280 --> 00:08:10,880 Speaker 1: You know, how do you feel about a lot of 144 00:08:10,880 --> 00:08:13,640 Speaker 1: these moonshot projects that are kind of happening in the 145 00:08:13,680 --> 00:08:15,480 Speaker 1: world right now. At the end of the day, it 146 00:08:15,600 --> 00:08:20,800 Speaker 1: does certainly seem like there's a whole generation of investors 147 00:08:21,400 --> 00:08:24,560 Speaker 1: ready to jump on them. So it's a little bit 148 00:08:24,560 --> 00:08:27,920 Speaker 1: worrisome to us. The that market has been exceptionally hot, 149 00:08:28,120 --> 00:08:31,640 Speaker 1: and right now the electric vehicle car companies and batteries 150 00:08:31,680 --> 00:08:35,000 Speaker 1: are assuming that everybody that's involved is going to be successful, 151 00:08:35,000 --> 00:08:38,600 Speaker 1: and not only successful, but wildly successful. That's simply not 152 00:08:38,640 --> 00:08:40,959 Speaker 1: going to be the case. So yes, the stocks and 153 00:08:41,080 --> 00:08:44,280 Speaker 1: open up very richly. We think it's not going to 154 00:08:44,320 --> 00:08:46,719 Speaker 1: be a great investment over the next one or two 155 00:08:46,800 --> 00:08:49,959 Speaker 1: years because it's fully priced. We look at companies um 156 00:08:49,960 --> 00:08:53,199 Speaker 1: like Zoom or Peloton that had all of this excitement 157 00:08:53,240 --> 00:08:55,439 Speaker 1: a year ago. Those stocks are down by half to 158 00:08:55,520 --> 00:08:58,880 Speaker 1: three quarters. We think it's not a great time to 159 00:08:58,920 --> 00:09:01,439 Speaker 1: be speculum lative in the market right now. For the 160 00:09:01,480 --> 00:09:04,000 Speaker 1: short term, it's gonna feel good, but we really believe 161 00:09:04,400 --> 00:09:06,480 Speaker 1: that ultimately the music is going to stop and a 162 00:09:06,480 --> 00:09:09,480 Speaker 1: lot of people are getting involved with companies that they're 163 00:09:09,520 --> 00:09:11,880 Speaker 1: not paying attention to valuation and they're going to get hurt. 164 00:09:12,559 --> 00:09:16,400 Speaker 1: What about companies. I mean, for example, everyone's bid up 165 00:09:16,400 --> 00:09:20,280 Speaker 1: Tesla to make it a trillion dollar company, and meanwhile, 166 00:09:20,880 --> 00:09:25,120 Speaker 1: uh Ford Motor Company is worth eighty billion. You know, 167 00:09:25,240 --> 00:09:31,240 Speaker 1: General Motors is worth eighty five billion. Folkswagen, which has 168 00:09:31,679 --> 00:09:36,600 Speaker 1: invested a ton into um the electric business is still 169 00:09:37,200 --> 00:09:40,600 Speaker 1: only worth a hundred and forty billion. Do you like 170 00:09:40,720 --> 00:09:44,760 Speaker 1: any of those legacy players. So, so that's a great point. 171 00:09:44,880 --> 00:09:47,880 Speaker 1: Right now. Testla sells for the exact same valuation as 172 00:09:47,920 --> 00:09:51,520 Speaker 1: the rest of the entire automobile industry, and we just 173 00:09:51,520 --> 00:09:54,360 Speaker 1: don't think that's sustainable on the Tesla side. Uh. In 174 00:09:54,440 --> 00:09:57,000 Speaker 1: terms of the other companies, um, the question is do 175 00:09:57,040 --> 00:09:59,840 Speaker 1: you want to own an automobile company because more electric 176 00:10:00,040 --> 00:10:03,560 Speaker 1: vehicles any of these companies make the less um oil 177 00:10:03,960 --> 00:10:06,600 Speaker 1: um cars, you know, the regular combustion cars they're gonna 178 00:10:06,600 --> 00:10:09,360 Speaker 1: be selling. So that is a zero sum game. In 179 00:10:09,440 --> 00:10:11,480 Speaker 1: terms of the automobile industry. The one that we are 180 00:10:11,559 --> 00:10:15,040 Speaker 1: most comfortable with right now is Toyota. We think they're 181 00:10:15,080 --> 00:10:18,160 Speaker 1: going to be a winner in electric vehicles down the 182 00:10:18,240 --> 00:10:20,920 Speaker 1: road and hybrid vehicles, and you're not paying a whole 183 00:10:20,960 --> 00:10:23,120 Speaker 1: lot for it. But we think there are lots of 184 00:10:23,120 --> 00:10:25,360 Speaker 1: other errors to make money in the market, and we're 185 00:10:25,360 --> 00:10:27,720 Speaker 1: not spending a great deal of time on the auto sector. 186 00:10:28,040 --> 00:10:30,839 Speaker 1: Bitcoin is at a record Do you think that it's 187 00:10:30,840 --> 00:10:35,719 Speaker 1: an inflation hedge. We don't, um, you know, we're we're 188 00:10:35,840 --> 00:10:37,960 Speaker 1: sort of old school, and old school hasn't been that 189 00:10:38,000 --> 00:10:40,240 Speaker 1: helpful of late. But we like to have things on 190 00:10:40,280 --> 00:10:43,439 Speaker 1: a fundamental basis. We like intrinsic value, and when you 191 00:10:43,520 --> 00:10:47,320 Speaker 1: look at bitcoin, there's not a lot of intrinsic value there. So, uh, 192 00:10:47,360 --> 00:10:50,480 Speaker 1: this is one that we're also pretty wary about. We 193 00:10:50,559 --> 00:10:53,240 Speaker 1: don't think it ends well. Um, so we would not 194 00:10:53,280 --> 00:10:55,200 Speaker 1: be putting money. And we we do believe there are 195 00:10:55,200 --> 00:10:57,360 Speaker 1: a lot of people that are throwing money in, uh, 196 00:10:57,400 --> 00:11:00,200 Speaker 1: simply because of fear of missing out. Everybody's talking about 197 00:11:00,200 --> 00:11:03,120 Speaker 1: how wealthy they became. Uh, so they're throwing money in. 198 00:11:03,040 --> 00:11:05,440 Speaker 1: And once that bubble verse, we think it can go 199 00:11:05,520 --> 00:11:08,160 Speaker 1: down a lot. And what we'd say is, look at 200 00:11:08,160 --> 00:11:11,120 Speaker 1: what happened during the Internet bubble of the late nineties. 201 00:11:11,880 --> 00:11:14,080 Speaker 1: A number of the businesses simply went out of business, 202 00:11:14,080 --> 00:11:16,960 Speaker 1: like an E Toys, but a number of great companies 203 00:11:16,960 --> 00:11:22,000 Speaker 1: like Microsoft, Cisco, Intel, Um, we're all about a half 204 00:11:22,080 --> 00:11:25,920 Speaker 1: to three quarters lower ten years later. So when things stop, 205 00:11:26,040 --> 00:11:29,600 Speaker 1: valuation matters. David, thanks so much for joining us. David Katz, 206 00:11:29,679 --> 00:11:33,800 Speaker 1: President and Chief investment Officer over at Matrix Asset advisors. 207 00:11:37,120 --> 00:11:38,720 Speaker 1: Let me just quickly take a look at what we're 208 00:11:38,720 --> 00:11:43,440 Speaker 1: seeing in terms of prices. Bitcoin trading up one percent 209 00:11:43,480 --> 00:11:47,040 Speaker 1: and change three dollars up to sixty eight thousand, five 210 00:11:47,120 --> 00:11:51,720 Speaker 1: hundred and nineteen, just around the record high. We also 211 00:11:51,760 --> 00:11:55,240 Speaker 1: have ether trading or ethereum Um I guess ether is 212 00:11:55,280 --> 00:11:56,679 Speaker 1: the is the right way to call it? Trading up 213 00:11:56,679 --> 00:11:59,000 Speaker 1: one percent and change about forty nine a coin to 214 00:12:00,040 --> 00:12:01,720 Speaker 1: forty nine. Let's bring in someone who knows for sure. 215 00:12:01,800 --> 00:12:08,200 Speaker 1: Mike mcgloan, senior commodity strategist with Bloomberg Intelligence. Um, I guess, 216 00:12:08,720 --> 00:12:14,960 Speaker 1: uh these highs? What what's behind this rise that we've seen. 217 00:12:15,000 --> 00:12:18,960 Speaker 1: Is it just excess liquidity? Is it concern about inflation? 218 00:12:19,559 --> 00:12:23,079 Speaker 1: Is it has China? Have China and Jamie Diamond and 219 00:12:23,120 --> 00:12:27,480 Speaker 1: trashing Bitcoin again? What's going on here? Mike hey Man, Well, 220 00:12:26,760 --> 00:12:30,160 Speaker 1: the the key thing is it's actually much more simpler 221 00:12:30,240 --> 00:12:33,199 Speaker 1: to that than that. It's all the above. It's one 222 00:12:33,200 --> 00:12:35,280 Speaker 1: of those points. Now it's November, we only have two 223 00:12:35,320 --> 00:12:36,840 Speaker 1: months left than the year. There's a lot of cash 224 00:12:36,880 --> 00:12:39,000 Speaker 1: on the side. Bitcoins one of the best performing assets 225 00:12:39,040 --> 00:12:42,360 Speaker 1: on the planet, and a theorium is two and it's 226 00:12:42,800 --> 00:12:45,719 Speaker 1: got fundamental independents that are increasing in improving. So I 227 00:12:45,800 --> 00:12:47,640 Speaker 1: think that's what you've seen now is typically it is 228 00:12:47,640 --> 00:12:50,080 Speaker 1: the best time of year. It's at sixty eight thousand 229 00:12:50,160 --> 00:12:52,080 Speaker 1: right now. I think it's heading towards a hundred thousands. 230 00:12:52,080 --> 00:12:54,840 Speaker 1: The questions when and the key the question I asked 231 00:12:54,880 --> 00:12:56,600 Speaker 1: is what's going to keep it down? Now? Today was 232 00:12:56,640 --> 00:12:59,760 Speaker 1: the key key barometer to that. You know, CPI printed 233 00:12:59,800 --> 00:13:02,480 Speaker 1: high and expected, Bitcoin was down and Dye it popped 234 00:13:02,559 --> 00:13:04,800 Speaker 1: right up. Gold was down and it popped up. You 235 00:13:04,840 --> 00:13:07,880 Speaker 1: mentioned silver and earlier segment popped up. But Bitcoin is 236 00:13:08,600 --> 00:13:10,720 Speaker 1: you know, it's the one with the vig it's potential 237 00:13:10,760 --> 00:13:12,839 Speaker 1: upside for the future. So I look at this as 238 00:13:13,280 --> 00:13:15,760 Speaker 1: you know, this is a market that's had a substantial correction. 239 00:13:16,000 --> 00:13:19,239 Speaker 1: Demand and adoption are increasing, it's becoming part of every portfolio, 240 00:13:19,280 --> 00:13:22,520 Speaker 1: and supplies declining. What makes that go lower? At this stage, 241 00:13:22,559 --> 00:13:25,319 Speaker 1: it's pretty strong and I don't see overbought indications yet. 242 00:13:26,200 --> 00:13:30,920 Speaker 1: So it's interesting because while the bitcoin, ether other coins 243 00:13:30,920 --> 00:13:34,439 Speaker 1: are definitely up today, it's not everything. Guys. She was 244 00:13:34,520 --> 00:13:37,600 Speaker 1: down and that was one of the I just wanted 245 00:13:37,600 --> 00:13:40,040 Speaker 1: to mention it here because I don't think you're seeing 246 00:13:40,040 --> 00:13:44,319 Speaker 1: everything moving lockstep necessarily anymore. Well so, no, thanks for 247 00:13:44,360 --> 00:13:46,640 Speaker 1: mentioning that Sheba in you is down, and that's a 248 00:13:46,800 --> 00:13:50,440 Speaker 1: speculation machine that most of us hope will just get 249 00:13:50,440 --> 00:13:52,200 Speaker 1: it over with and go by and go back, just 250 00:13:52,360 --> 00:13:54,559 Speaker 1: like those kind of went back. It's just a machine 251 00:13:54,559 --> 00:13:58,520 Speaker 1: for speculation. And then you have pure infrastructure building in 252 00:13:58,559 --> 00:14:00,640 Speaker 1: bitcoin and there, and they're just in the world a 253 00:14:00,640 --> 00:14:04,559 Speaker 1: better place. She believe it was for speculators clearly undisputable. 254 00:14:04,800 --> 00:14:07,479 Speaker 1: And then things like a Theorium there, every single cryptodology, 255 00:14:07,480 --> 00:14:10,360 Speaker 1: the most widely traded Cryptosis and Planet, most of them 256 00:14:10,360 --> 00:14:13,080 Speaker 1: traded in theory platforms. And then you have Bitcoin becoming 257 00:14:13,160 --> 00:14:16,880 Speaker 1: global digital collateral. So to me, that's what's happening. The 258 00:14:16,920 --> 00:14:19,720 Speaker 1: inflation heads. I don't really think it's so much there yet. 259 00:14:19,840 --> 00:14:22,160 Speaker 1: It will be when it gets to the higher plateau. 260 00:14:22,240 --> 00:14:25,000 Speaker 1: I see bitcoin in theorum right now in that price 261 00:14:25,080 --> 00:14:27,720 Speaker 1: discovery stage, and it's just that time of year. Well, 262 00:14:27,760 --> 00:14:30,960 Speaker 1: there's boy. Technicals are good, fundamentals are good. Where does 263 00:14:31,000 --> 00:14:32,640 Speaker 1: it end up the year? That's kind of the quick 264 00:14:32,720 --> 00:14:34,840 Speaker 1: key question we're all asking ourselves, what do you think 265 00:14:34,840 --> 00:14:40,560 Speaker 1: about finance? Um c Z is pretty cool to interview. 266 00:14:40,600 --> 00:14:43,120 Speaker 1: We have him on the network. Sometimes. He actually used 267 00:14:43,160 --> 00:14:45,800 Speaker 1: to work at Bloomberg. Um. He's got to be one 268 00:14:45,800 --> 00:14:49,600 Speaker 1: of the richest people in the world now and he 269 00:14:49,680 --> 00:14:53,120 Speaker 1: has his own coin that's one of the biggest. C 270 00:14:53,320 --> 00:14:56,400 Speaker 1: Z is just an edge vacational machinal. Every time he speaks, 271 00:14:56,440 --> 00:14:59,200 Speaker 1: I shut up and I listened. The key thing I 272 00:14:59,240 --> 00:15:02,680 Speaker 1: think he repped resents Matt is there's a lot of very, 273 00:15:02,800 --> 00:15:05,200 Speaker 1: very wealthy young people in the space, and they have 274 00:15:05,280 --> 00:15:08,720 Speaker 1: a major inclination to make the world a better place. 275 00:15:08,760 --> 00:15:10,960 Speaker 1: Don't underestimate that. That's the key thing I got out 276 00:15:10,960 --> 00:15:14,200 Speaker 1: of bitcoin. Everybody here wants to make a world a 277 00:15:14,240 --> 00:15:17,520 Speaker 1: better place, and they have the facility, capacity and money 278 00:15:17,680 --> 00:15:19,920 Speaker 1: to do it in this space. And now that the 279 00:15:20,000 --> 00:15:24,680 Speaker 1: US is counting China by accepting and um properly regulating cryptos, 280 00:15:24,720 --> 00:15:27,280 Speaker 1: they have a major platform. So to me, this is 281 00:15:27,280 --> 00:15:29,040 Speaker 1: a bull market. No many questions when and where do 282 00:15:29,080 --> 00:15:30,600 Speaker 1: you jump on? And I think that's what every money 283 00:15:30,640 --> 00:15:32,600 Speaker 1: manager in the planet is saying. Okay, I might as 284 00:15:32,600 --> 00:15:34,320 Speaker 1: well get off zero, and I think that's what's happening. 285 00:15:34,440 --> 00:15:36,560 Speaker 1: The greater risk is being on zero with allocations to 286 00:15:36,720 --> 00:15:39,160 Speaker 1: cryptos in bitcoins, Okay, help me out here. Because of 287 00:15:39,240 --> 00:15:43,240 Speaker 1: this inflation hedge aspect of this. You know, crypto people 288 00:15:43,640 --> 00:15:48,000 Speaker 1: so many inherently um you know with skeptical of the Fed. 289 00:15:48,400 --> 00:15:50,840 Speaker 1: Do you can you poke a hole in the inflation 290 00:15:50,880 --> 00:15:53,360 Speaker 1: hedge theory? Well, I think the key things can always 291 00:15:53,400 --> 00:15:56,320 Speaker 1: look at it. You can't hold gold anymore without having 292 00:15:56,400 --> 00:15:59,920 Speaker 1: some bitcoin and the theorum in that bucket because bitcoins 293 00:16:00,000 --> 00:16:02,440 Speaker 1: clearly replacing it. Now as far as you measure inflations 294 00:16:02,520 --> 00:16:05,080 Speaker 1: use the currency debasement. Let's look at this month so far. 295 00:16:05,400 --> 00:16:07,960 Speaker 1: On the month, bitcoins about about ten percent right now, 296 00:16:08,240 --> 00:16:11,880 Speaker 1: goals up about four and and crudels down one person. 297 00:16:12,040 --> 00:16:14,560 Speaker 1: I think by this time next year, the key, the bigger, 298 00:16:14,640 --> 00:16:17,160 Speaker 1: bigger risk will be deflationary trends. And I pointed out 299 00:16:17,160 --> 00:16:19,440 Speaker 1: clearly because it's measured on a twelve month basis. The 300 00:16:19,440 --> 00:16:22,000 Speaker 1: Bloomberg because of crypto and I'm sorry, I'm sorry. The 301 00:16:22,000 --> 00:16:25,320 Speaker 1: Bloomberg Command Index just reaching all time high twelve months 302 00:16:25,360 --> 00:16:27,640 Speaker 1: and now it's a real high bar to beat. So 303 00:16:27,680 --> 00:16:30,720 Speaker 1: and you just measure on a twelve month basis, deflationary 304 00:16:30,760 --> 00:16:33,840 Speaker 1: trends will kick back in if also needs a little 305 00:16:33,840 --> 00:16:36,000 Speaker 1: wobble in the stock market, and you'll see those deflation 306 00:16:36,000 --> 00:16:38,000 Speaker 1: near trends come back and the FED will have to ease. 307 00:16:38,000 --> 00:16:40,600 Speaker 1: And that's what bitcoin is. It's no one's project, no 308 00:16:40,640 --> 00:16:46,200 Speaker 1: one's liability. Declining supply, increasing demand. Even goal has elastic supply, 309 00:16:46,480 --> 00:16:49,560 Speaker 1: Bitcoin doesn't have that, and people understanding WHOA Okay, I 310 00:16:49,600 --> 00:16:51,200 Speaker 1: might as well get some allocation to this. So the 311 00:16:51,240 --> 00:16:54,440 Speaker 1: inflation argument, I think it's coming, but be wonderful if 312 00:16:54,440 --> 00:16:57,040 Speaker 1: we get true inflation and real demand pull right now. 313 00:16:57,360 --> 00:16:58,760 Speaker 1: To me, this is the kind of when you hear 314 00:16:58,800 --> 00:17:00,520 Speaker 1: headlines like to that that's where you back the peak 315 00:17:00,520 --> 00:17:03,360 Speaker 1: A year from now. I fully predict we're gonna have 316 00:17:03,400 --> 00:17:09,800 Speaker 1: more problems with deflationary trends. What when do we know that? Um, 317 00:17:09,840 --> 00:17:13,560 Speaker 1: you know mom and pop, either retail mom and pop 318 00:17:13,720 --> 00:17:17,800 Speaker 1: or institutions have fully embraced crypto. Because these are I 319 00:17:17,800 --> 00:17:20,159 Speaker 1: think two things we're still waiting for. Snelly and I 320 00:17:20,200 --> 00:17:24,359 Speaker 1: spoke with the conservative fund manager earlier who is just 321 00:17:24,520 --> 00:17:29,720 Speaker 1: not down to clown because he thinks there's too much volatility. Absolutely, 322 00:17:29,760 --> 00:17:31,520 Speaker 1: there will be less alto when there's greater depth than 323 00:17:31,520 --> 00:17:33,399 Speaker 1: the market reaches a higher plateau. So that's one key 324 00:17:33,400 --> 00:17:36,000 Speaker 1: thing is probably're gonna miss a big monoch appreciation. The 325 00:17:36,040 --> 00:17:38,480 Speaker 1: answer to that question, Matt, is very simple. When we 326 00:17:38,520 --> 00:17:41,399 Speaker 1: have wide dissemination of an e t S or e 327 00:17:41,480 --> 00:17:44,800 Speaker 1: t S that track a broad index attracts the crypto market, 328 00:17:45,200 --> 00:17:47,399 Speaker 1: that's where we're going. It's a matter of time. The 329 00:17:47,560 --> 00:17:50,080 Speaker 1: SEC knows it. If they're truly on to protect investors, 330 00:17:50,080 --> 00:17:51,720 Speaker 1: they need to approve an e t F to tracts. 331 00:17:51,760 --> 00:17:54,879 Speaker 1: A spot index attracts a spot markets, not you know, 332 00:17:54,960 --> 00:17:57,280 Speaker 1: Bitcoin and SAM and index. That's the proper. That's why 333 00:17:57,359 --> 00:17:59,760 Speaker 1: we hate most almost everybody in the planet. Tracks stocks 334 00:18:00,080 --> 00:18:02,120 Speaker 1: go through NT. You have two tracks, an index. We'll 335 00:18:02,160 --> 00:18:04,119 Speaker 1: get there. It's going to be many years, will be 336 00:18:04,160 --> 00:18:07,040 Speaker 1: many bumps on the road, But until then, I don't 337 00:18:07,040 --> 00:18:08,960 Speaker 1: think we're gonna have anything but a bull market that 338 00:18:09,000 --> 00:18:12,840 Speaker 1: has dips. Alright, Mike mcglogan, thanks very much for joining us. 339 00:18:12,920 --> 00:18:16,480 Speaker 1: Mike mcglonan their senior commodity strategist with Bloomberg Intelligence talking 340 00:18:16,520 --> 00:18:22,000 Speaker 1: to us about KRYP Bloomberg Opinion informed perspectives and expert 341 00:18:22,080 --> 00:18:27,960 Speaker 1: data driven commentary on breaking news. Alright, time for Bloomberg Opinion. 342 00:18:28,000 --> 00:18:31,239 Speaker 1: We have our debt markets columnists Brian Hippata in the 343 00:18:31,320 --> 00:18:38,200 Speaker 1: studio today at the Interactive Brokers Um complex inside one 344 00:18:38,320 --> 00:18:40,840 Speaker 1: Lexington Avenue, the mother Ship as we call it. He's 345 00:18:40,880 --> 00:18:45,159 Speaker 1: writing about the FED ignoring a key bubble risk for 346 00:18:45,240 --> 00:18:48,959 Speaker 1: the stock market or maybe can I say bubbles plural? Brian, 347 00:18:49,119 --> 00:18:52,600 Speaker 1: Sure you can say that crypto, but they're not saying it. No, 348 00:18:52,800 --> 00:18:55,040 Speaker 1: they don't use the word bubble. No, I mean they 349 00:18:55,040 --> 00:18:57,560 Speaker 1: don't say bubble. They didn't say that may even though 350 00:18:57,560 --> 00:19:01,360 Speaker 1: they flagged a lot of financial stabild be concerns. And 351 00:19:01,400 --> 00:19:03,240 Speaker 1: the thing they don't really talk about a lot is 352 00:19:03,359 --> 00:19:06,119 Speaker 1: real yields. And that is something that you just see 353 00:19:06,160 --> 00:19:08,560 Speaker 1: written about over and over, talked about over and over. 354 00:19:08,920 --> 00:19:11,640 Speaker 1: You see real rates hit record lows and there's basically 355 00:19:11,680 --> 00:19:14,760 Speaker 1: no choice but to to buy risky assets because your 356 00:19:14,800 --> 00:19:17,600 Speaker 1: alternative is that you buy fixed income, you buy treasuries, 357 00:19:17,600 --> 00:19:20,000 Speaker 1: and you get a negative inflation adjusted yield. It doesn't 358 00:19:20,080 --> 00:19:22,199 Speaker 1: seem worth it to a lot of people. And what 359 00:19:22,320 --> 00:19:25,760 Speaker 1: pops the bubble? I mean, that's a good question. I mean, 360 00:19:25,800 --> 00:19:29,000 Speaker 1: I think right now you're seeing inflation go up tremendously 361 00:19:29,520 --> 00:19:32,520 Speaker 1: uh and you're seeing stocks barely off there they're all 362 00:19:32,560 --> 00:19:35,440 Speaker 1: time highs. So it's not clear what exactly happens the 363 00:19:35,440 --> 00:19:38,440 Speaker 1: FEDS reaction function, right now is to just look through 364 00:19:38,440 --> 00:19:42,199 Speaker 1: this inflation keep keep their Fed funds rate at at 365 00:19:42,200 --> 00:19:45,320 Speaker 1: record lows. UM it's at the lowest since the nineteen 366 00:19:45,400 --> 00:19:48,560 Speaker 1: seventies when you adjusted for inflation the Fed funds rates. 367 00:19:48,560 --> 00:19:51,080 Speaker 1: So so rates are staying really low, and it's going 368 00:19:51,119 --> 00:19:53,400 Speaker 1: to be a question of whether the Fed blinks, whether 369 00:19:53,440 --> 00:19:56,960 Speaker 1: they flinch under political pressure. I think, uh to to 370 00:19:57,080 --> 00:20:00,040 Speaker 1: do something to to slow inflation down. Next year's the 371 00:20:00,200 --> 00:20:03,320 Speaker 1: crucial midterm elections. After all, the seventies were bad. By 372 00:20:03,359 --> 00:20:05,920 Speaker 1: the way, Sinale, for those of you who weren't there, 373 00:20:06,000 --> 00:20:09,720 Speaker 1: I'm gonna remind you that's when the Mustang turned from 374 00:20:09,760 --> 00:20:14,800 Speaker 1: a boss muscle car into an embarrassment. Plus we had 375 00:20:15,000 --> 00:20:19,040 Speaker 1: incredible inflation. There were uh, you know, people parked around 376 00:20:19,119 --> 00:20:22,280 Speaker 1: the block waiting to get gasoline. Oil prices went nuts, 377 00:20:22,960 --> 00:20:25,919 Speaker 1: and as Greg Jarrett was just saying, his mortgage was 378 00:20:25,960 --> 00:20:29,320 Speaker 1: like four yeah, I mean because the Fed had to 379 00:20:29,400 --> 00:20:31,119 Speaker 1: raise rates, right, and now you get a mortgage for 380 00:20:31,280 --> 00:20:35,840 Speaker 1: three basically, So, uh, nominal rates are still extremely low, 381 00:20:36,119 --> 00:20:38,840 Speaker 1: and that does raise this risk that if you can't 382 00:20:38,880 --> 00:20:41,480 Speaker 1: get anything in fixed income, you have to go to 383 00:20:41,520 --> 00:20:44,159 Speaker 1: the stock market. Some of these statistics that I cited 384 00:20:44,200 --> 00:20:47,119 Speaker 1: from them from the FED Zone data is that you 385 00:20:47,160 --> 00:20:49,239 Speaker 1: look at people who are sixty to seventy four, even 386 00:20:49,280 --> 00:20:52,240 Speaker 1: though seventy five and older, and stockholdings have never before 387 00:20:52,320 --> 00:20:55,160 Speaker 1: been such a core part of their portfolio because after 388 00:20:55,200 --> 00:20:58,080 Speaker 1: a decade of near zero interest rates, uh, you just 389 00:20:58,119 --> 00:21:01,080 Speaker 1: can't count on fixed income anymore, even even if you're 390 00:21:01,080 --> 00:21:03,680 Speaker 1: in retirement. Well yeah, I mean the other thing about 391 00:21:03,680 --> 00:21:06,000 Speaker 1: this too, is that the market is already expecting some 392 00:21:06,400 --> 00:21:09,040 Speaker 1: like they're they're they're planning for rate hikes next year. Right, 393 00:21:09,160 --> 00:21:11,439 Speaker 1: That's what's the plan. Right. But the thing is, what 394 00:21:11,520 --> 00:21:14,639 Speaker 1: about this idea that Mary Daily had brought up to 395 00:21:14,800 --> 00:21:17,480 Speaker 1: our own Mike McKee a little bit earlier, This idea 396 00:21:17,560 --> 00:21:20,800 Speaker 1: that we're still in COVID this is going to be transitory. 397 00:21:20,840 --> 00:21:23,080 Speaker 1: I mean that seems to be the parting line from 398 00:21:23,119 --> 00:21:28,560 Speaker 1: most beneficials. But how do you know that? Yeah? I 399 00:21:28,560 --> 00:21:30,159 Speaker 1: mean one of the things, Um, I don't think this 400 00:21:30,240 --> 00:21:32,320 Speaker 1: is spoiling anything because I tweeted about it. If I 401 00:21:32,320 --> 00:21:34,040 Speaker 1: do have a column coming out pretty soon, I mean, 402 00:21:34,040 --> 00:21:37,879 Speaker 1: you look at um this idea that uh the inflation 403 00:21:37,920 --> 00:21:41,720 Speaker 1: guy on Twitter um basically came out and said, um, 404 00:21:41,760 --> 00:21:44,280 Speaker 1: I'm looking for an outlier in this inflation data and 405 00:21:44,320 --> 00:21:47,000 Speaker 1: I can't find one, and that's a scary thing. And 406 00:21:47,119 --> 00:21:49,959 Speaker 1: the idea that it's just COVID and that things are 407 00:21:50,000 --> 00:21:52,119 Speaker 1: just going to come out right, that's the scale, not 408 00:21:52,240 --> 00:21:55,080 Speaker 1: the length. Yeah, I mean, I think the question is 409 00:21:55,080 --> 00:21:57,639 Speaker 1: is can you just blame used cars again? Um, some 410 00:21:57,680 --> 00:21:59,920 Speaker 1: people might try to, but I think it's starting to 411 00:22:00,200 --> 00:22:03,679 Speaker 1: feel as if there's more broad based price pressure. And 412 00:22:03,680 --> 00:22:06,080 Speaker 1: you look at the New York Fed statistics on consumer 413 00:22:06,119 --> 00:22:10,119 Speaker 1: expectations for inflation. Three year inflation expectations still at a 414 00:22:10,160 --> 00:22:13,560 Speaker 1: series high. One year expectations still going up over five 415 00:22:13,600 --> 00:22:16,960 Speaker 1: percent now, Um, so it's getting baked into the cake 416 00:22:17,000 --> 00:22:19,800 Speaker 1: a little bit here. Uh, in terms of inflation expectations. 417 00:22:19,920 --> 00:22:21,880 Speaker 1: The Fed has talked about how they wanted to get 418 00:22:21,920 --> 00:22:24,600 Speaker 1: inflation expectations up because they want to be able to 419 00:22:24,600 --> 00:22:28,080 Speaker 1: conduct monetary policy about the zero lower abound, and they're there, 420 00:22:28,320 --> 00:22:30,120 Speaker 1: and yet we're still at zero. And so I think 421 00:22:30,119 --> 00:22:33,440 Speaker 1: the question has to become at a certain point, why 422 00:22:33,480 --> 00:22:36,560 Speaker 1: is zero the baseline for the Fed funds rate? And 423 00:22:36,600 --> 00:22:38,840 Speaker 1: that all comes back to the real yields when you 424 00:22:38,880 --> 00:22:41,760 Speaker 1: see them so deeply negative, that's because the Fed funds 425 00:22:41,840 --> 00:22:43,480 Speaker 1: rate is held at stare not expected to go out. 426 00:22:43,520 --> 00:22:45,720 Speaker 1: You know, real wage growth is even more of a 427 00:22:45,800 --> 00:22:50,160 Speaker 1: problem because inflation is growing at a faster pace than 428 00:22:50,400 --> 00:22:54,040 Speaker 1: wages are. So you know, even if this is transitory, 429 00:22:54,160 --> 00:22:57,440 Speaker 1: if it all stops at the same time, the stuff 430 00:22:57,480 --> 00:23:01,080 Speaker 1: that I need is still cost is costing more than 431 00:23:01,320 --> 00:23:04,119 Speaker 1: what I'm getting paid, and that's going to continue to 432 00:23:04,160 --> 00:23:07,119 Speaker 1: increase unless they can turn it around. The problem that 433 00:23:07,119 --> 00:23:09,240 Speaker 1: that I have is I don't see what the FED 434 00:23:09,320 --> 00:23:13,920 Speaker 1: can do about inflation that's caused by supply constraints. Monetary 435 00:23:13,960 --> 00:23:16,880 Speaker 1: policy doesn't help, right, I mean, the question ultimately has 436 00:23:16,920 --> 00:23:20,000 Speaker 1: to be is it the Fed's job to constrain demand? Right? 437 00:23:20,080 --> 00:23:22,760 Speaker 1: If you have demand at a super elevated level and 438 00:23:22,840 --> 00:23:24,920 Speaker 1: supply is not what they want to there? Right, that's 439 00:23:25,119 --> 00:23:28,200 Speaker 1: the surgeon who declares his job of success because the 440 00:23:28,240 --> 00:23:31,240 Speaker 1: patient is dead. In some ways, yes, but in stuff 441 00:23:31,280 --> 00:23:33,919 Speaker 1: I said that, right, Well, you know, I think I 442 00:23:33,960 --> 00:23:35,720 Speaker 1: get it. I don't want to really think about surgeons 443 00:23:35,760 --> 00:23:38,760 Speaker 1: killing anyone, but but I but I think I get it. 444 00:23:38,800 --> 00:23:42,399 Speaker 1: But the point is is if demand is running so hot, 445 00:23:42,800 --> 00:23:46,560 Speaker 1: should the FED cut back a little bit? And John 446 00:23:46,600 --> 00:23:49,440 Speaker 1: Powell said that current inflation is not at all consistent 447 00:23:49,480 --> 00:23:52,960 Speaker 1: with price stability, and price stability is one of the 448 00:23:53,000 --> 00:23:56,640 Speaker 1: Fed's mandates from Congress. Boring for just a second here, 449 00:23:56,800 --> 00:24:00,320 Speaker 1: I mean, if you're a saver, you're getting decimated unless 450 00:24:00,320 --> 00:24:03,400 Speaker 1: you're investing in serious eyes savings bonds which are linked 451 00:24:03,440 --> 00:24:06,520 Speaker 1: to inflation and give a seven point one interest rate, 452 00:24:07,080 --> 00:24:09,920 Speaker 1: which we which our wealth team wrote about recently. Well, 453 00:24:09,960 --> 00:24:12,680 Speaker 1: how many people are actually doing that? Not a lot? Yeah, 454 00:24:12,720 --> 00:24:15,480 Speaker 1: And that's what I'm coming down to also, Right, if 455 00:24:15,520 --> 00:24:18,439 Speaker 1: you are in our generation, if you're a millennial or 456 00:24:18,480 --> 00:24:21,560 Speaker 1: Gen Z and interest rates are this low, and even 457 00:24:21,600 --> 00:24:23,320 Speaker 1: with the rate hike, they're not you know, you're not 458 00:24:23,359 --> 00:24:26,399 Speaker 1: going to get a fourteen percent mortgage anytime soon. So 459 00:24:26,920 --> 00:24:29,800 Speaker 1: what what to make of that? Of this new environment? Yeah, 460 00:24:29,800 --> 00:24:32,359 Speaker 1: I mean that's goes back to the stock You know, 461 00:24:32,520 --> 00:24:33,879 Speaker 1: you want to call it a bubble, you don't want 462 00:24:33,880 --> 00:24:36,320 Speaker 1: to call it a bubble, But ultimately more people are 463 00:24:36,359 --> 00:24:40,480 Speaker 1: invested in stocks than ever before. And the reason why 464 00:24:40,600 --> 00:24:43,760 Speaker 1: it seems to be because there is no alternative to 465 00:24:43,920 --> 00:24:47,360 Speaker 1: use the often used enough phrase, right, I mean, but when, 466 00:24:47,480 --> 00:24:48,960 Speaker 1: but when it comes down to it, if the FED 467 00:24:49,080 --> 00:24:53,240 Speaker 1: is concerned about elevated asset prices, elevated stock prices. It's 468 00:24:53,280 --> 00:24:58,679 Speaker 1: because its policies have pushed people into those various instruments, 469 00:24:58,800 --> 00:25:02,000 Speaker 1: and as a result, it's policy is also dictated by 470 00:25:02,080 --> 00:25:04,560 Speaker 1: the stock market to a greater extent. You saw what 471 00:25:04,600 --> 00:25:07,320 Speaker 1: happened in eighteen There was a big decline at the 472 00:25:07,400 --> 00:25:11,800 Speaker 1: end of the year, and pal pivoted in January immediately 473 00:25:12,119 --> 00:25:15,200 Speaker 1: and went to rape cuts. Um. So there is this 474 00:25:15,240 --> 00:25:17,560 Speaker 1: feeling of the push and pull and it feels tenuous, 475 00:25:17,600 --> 00:25:20,240 Speaker 1: but people don't really know what else they can do, 476 00:25:20,600 --> 00:25:25,479 Speaker 1: and so you've got this situation that feels uh, feels tenuous. Um. 477 00:25:25,520 --> 00:25:27,480 Speaker 1: And there's really no other way to put it, all right, Brian, 478 00:25:27,520 --> 00:25:29,680 Speaker 1: thanks so much for joining us. Brian Jrpota there rights 479 00:25:29,720 --> 00:25:33,439 Speaker 1: for Bloomberg. Thanks for listening to the Bloomberg Markets podcast. 480 00:25:33,840 --> 00:25:37,040 Speaker 1: You can subscribe and listen to interviews with Apple Podcasts 481 00:25:37,200 --> 00:25:41,080 Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm 482 00:25:41,119 --> 00:25:45,159 Speaker 1: on Twitter at Matt Miller three. Put on ball Sweeney 483 00:25:45,160 --> 00:25:47,800 Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast. You 484 00:25:47,840 --> 00:25:50,200 Speaker 1: can always catch us worldwide at Bloomberg Radio.