1 00:00:02,440 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:12,000 --> 00:00:15,600 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,640 --> 00:00:19,000 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:19,000 --> 00:00:23,159 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,200 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,320 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,320 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,040 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,400 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,120 --> 00:00:47,200 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app. Just about 11 00:00:47,280 --> 00:00:49,040 Speaker 2: in town. Keen with you and you get started. Tourist 12 00:00:49,080 --> 00:00:51,879 Speaker 2: and Slock joins us for the Street. The ex Dedeutsche 13 00:00:51,960 --> 00:00:54,960 Speaker 2: banker puts out a note nine ish a clock every 14 00:00:54,960 --> 00:00:58,560 Speaker 2: morning maybe eightish, which is a single paragraph two paragraphs 15 00:00:58,560 --> 00:01:02,400 Speaker 2: in one chart is read by Global Wall Street. Turstan, 16 00:01:02,440 --> 00:01:04,920 Speaker 2: thanks for joining us for the entire How far will 17 00:01:04,959 --> 00:01:06,880 Speaker 2: do some hurricane stuff here in the middle here this 18 00:01:07,000 --> 00:01:10,520 Speaker 2: is so serious for Tampa and the golf, Turstan. What's 19 00:01:10,560 --> 00:01:13,360 Speaker 2: your chart this morning? What's the number one thing that's 20 00:01:13,440 --> 00:01:14,120 Speaker 2: on your mind? 21 00:01:14,240 --> 00:01:14,280 Speaker 3: It? 22 00:01:14,360 --> 00:01:19,200 Speaker 1: Apollo so well, the job this morning is showing that 23 00:01:19,600 --> 00:01:23,640 Speaker 1: twenty six percent of our consumption in Virginia goes to 24 00:01:23,840 --> 00:01:29,000 Speaker 1: data centers. So the need ford investment in renewable energy 25 00:01:29,040 --> 00:01:31,320 Speaker 1: need find investment in data centers. The need for long 26 00:01:31,400 --> 00:01:35,400 Speaker 1: term caucil to invest in long term projects is including 27 00:01:35,560 --> 00:01:37,360 Speaker 1: in boosting here the AI revolution. 28 00:01:37,600 --> 00:01:40,160 Speaker 2: Why can't Google by their own utility? 29 00:01:41,800 --> 00:01:45,360 Speaker 1: Well, some of the tech companies are actually building their 30 00:01:45,400 --> 00:01:48,440 Speaker 1: own power plans and building their own power sources. But 31 00:01:48,720 --> 00:01:51,000 Speaker 1: the bigger issue, of course continues to be that, as 32 00:01:51,040 --> 00:01:56,040 Speaker 1: we all know, one search on CHATGBT takes ten times 33 00:01:56,040 --> 00:01:59,880 Speaker 1: as much energy as one search on Google. So therefore, 34 00:02:00,160 --> 00:02:04,960 Speaker 1: with everything that's going on everywhere in AI, last language models, 35 00:02:05,080 --> 00:02:08,440 Speaker 1: things getting more complicated, processing powers needed. There is certainly 36 00:02:08,480 --> 00:02:11,720 Speaker 1: a very substantial need to power the AI revolution, and 37 00:02:11,720 --> 00:02:17,200 Speaker 1: that does require long term capital to finances. 38 00:02:15,360 --> 00:02:17,840 Speaker 2: And Turst and Sluck Andjument on the same page. He's 39 00:02:17,840 --> 00:02:20,960 Speaker 2: writing about this this morning for Bloomberg. Just let's complete 40 00:02:20,960 --> 00:02:23,280 Speaker 2: your story. Questions for Twisted Sluck. 41 00:02:23,160 --> 00:02:25,320 Speaker 4: Well, you were talking about how the risk to cutting 42 00:02:25,360 --> 00:02:28,280 Speaker 4: interest rate too much too quickly is, especially on the 43 00:02:28,280 --> 00:02:31,040 Speaker 4: back of the latest jobs report, could become and especially 44 00:02:31,040 --> 00:02:33,720 Speaker 4: looking at inflation might be too hot again. Expand more 45 00:02:33,760 --> 00:02:35,400 Speaker 4: on that because we're gonna get an update on CPI 46 00:02:35,480 --> 00:02:36,120 Speaker 4: later this week. 47 00:02:36,680 --> 00:02:38,000 Speaker 5: Yeah, this is very important. 48 00:02:38,040 --> 00:02:41,280 Speaker 1: So the key question really is why is the economy 49 00:02:41,320 --> 00:02:44,360 Speaker 1: still so strong. Your textbook would have told you that 50 00:02:44,400 --> 00:02:46,280 Speaker 1: when the FITS started raising interest rates in much of 51 00:02:46,280 --> 00:02:49,480 Speaker 1: twenty twenty two, the economy should have begun to slow 52 00:02:49,520 --> 00:02:52,400 Speaker 1: down because when interest rates go up, people should be 53 00:02:52,480 --> 00:02:53,720 Speaker 1: buying fuel costs. 54 00:02:53,919 --> 00:02:55,080 Speaker 5: That's not what we have seen. 55 00:02:55,280 --> 00:02:57,720 Speaker 1: When insist rates go up, you should have seen the 56 00:02:57,720 --> 00:03:00,360 Speaker 1: housing markets low down. That's not what we've seen. So 57 00:03:00,400 --> 00:03:03,840 Speaker 1: there's a number of tailwinds to the economic outlook from AI, 58 00:03:04,160 --> 00:03:07,639 Speaker 1: from defense spending, from fiscal policy, the Chips Act, the 59 00:03:07,680 --> 00:03:10,839 Speaker 1: Face and Production Act. All those things combined have kept 60 00:03:10,840 --> 00:03:14,760 Speaker 1: the economy afloat, including also that consumers were less sensitive 61 00:03:14,919 --> 00:03:17,799 Speaker 1: to interest rates because they had locked in mortgage rates 62 00:03:17,840 --> 00:03:19,800 Speaker 1: at very low levels. Ninety five percent of mortgages are 63 00:03:19,840 --> 00:03:23,040 Speaker 1: fixed rates. So because of these very special forces, we've 64 00:03:23,120 --> 00:03:25,080 Speaker 1: just not had that slow down that the FED has 65 00:03:25,080 --> 00:03:27,359 Speaker 1: been looking for, and we think these forces will continue. 66 00:03:27,480 --> 00:03:29,720 Speaker 1: So therefore the answer to your question is we still 67 00:03:29,760 --> 00:03:31,079 Speaker 1: think that the economy is doing fine. 68 00:03:31,080 --> 00:03:33,400 Speaker 5: There is no need for the FED to lower interest rates. 69 00:03:34,400 --> 00:03:36,520 Speaker 4: And you made a bold call earlier this spring that 70 00:03:36,560 --> 00:03:39,200 Speaker 4: the Fed wouldn't cut interest rates this year. What changed? 71 00:03:40,440 --> 00:03:43,520 Speaker 1: So we actually still think that that was and is 72 00:03:43,520 --> 00:03:46,480 Speaker 1: the right call, because now we're debating was it a 73 00:03:46,520 --> 00:03:49,440 Speaker 1: mistake for the Fed to cut rates fifty basis points? 74 00:03:49,640 --> 00:03:51,960 Speaker 1: We just saw non fine payrolls on Friday. It again 75 00:03:52,040 --> 00:03:54,520 Speaker 1: shows that there is no need to lower interest rates. 76 00:03:54,560 --> 00:03:57,360 Speaker 1: So this raises the question why did the FIT lower 77 00:03:57,400 --> 00:03:57,960 Speaker 1: interest rates? 78 00:03:58,000 --> 00:03:59,760 Speaker 5: And this Tom and I have been talking about this for. 79 00:03:59,840 --> 00:04:03,480 Speaker 1: Year because they have an our style model framework which 80 00:04:03,520 --> 00:04:06,640 Speaker 1: says that, well, our long term interest rate needs to 81 00:04:06,680 --> 00:04:08,560 Speaker 1: be lower, so therefore we need to lower it, not 82 00:04:08,640 --> 00:04:11,000 Speaker 1: because of the incoming data, but really because we think 83 00:04:11,000 --> 00:04:12,440 Speaker 1: in the long run we should have a lower level 84 00:04:12,480 --> 00:04:15,120 Speaker 1: of rates. So yes, it is true that they did 85 00:04:15,200 --> 00:04:18,040 Speaker 1: cut and our expectation is that they may even also 86 00:04:18,080 --> 00:04:18,880 Speaker 1: cut here in November. 87 00:04:19,279 --> 00:04:21,120 Speaker 5: But given the incoming data. 88 00:04:20,960 --> 00:04:23,000 Speaker 1: The risks are rising now that we may have more 89 00:04:23,080 --> 00:04:25,240 Speaker 1: upside risk than downside risk to the economic. 90 00:04:25,400 --> 00:04:28,000 Speaker 2: Tursting on about so if your continental view of years 91 00:04:28,000 --> 00:04:31,640 Speaker 2: ago at Deutsche Bank, to me, the great differential here 92 00:04:31,680 --> 00:04:34,760 Speaker 2: in becoming ever more evident each and every day, is 93 00:04:34,760 --> 00:04:39,599 Speaker 2: the nominal GDP difference between Europe, say, and the United States. 94 00:04:39,640 --> 00:04:42,520 Speaker 2: I got four percent even five percent nomenal working in 95 00:04:42,560 --> 00:04:46,080 Speaker 2: the US. Europe's pretty much flat on their back. Is 96 00:04:46,120 --> 00:04:48,200 Speaker 2: that because of our debt build up or we sent 97 00:04:49,160 --> 00:04:52,839 Speaker 2: our grandchildren essentially funding our nominal GDP. 98 00:04:53,880 --> 00:04:56,839 Speaker 1: Well, the US has some tailwinds that are rather unique 99 00:04:56,880 --> 00:04:58,800 Speaker 1: to the US. We have an AI revolution in the 100 00:04:58,920 --> 00:05:01,320 Speaker 1: US we don't really have in Europe. We also have 101 00:05:01,480 --> 00:05:04,440 Speaker 1: significant support from the Chips Act, the Inflaze Production Act, 102 00:05:04,480 --> 00:05:07,520 Speaker 1: the Infrastructure Act. We don't have those tailwinds in Europe either. 103 00:05:07,720 --> 00:05:09,960 Speaker 1: And on top of that, Europe has now some headwinds, 104 00:05:10,000 --> 00:05:13,160 Speaker 1: of course from inner new sensation, from the challenges more 105 00:05:13,200 --> 00:05:16,720 Speaker 1: broadly speaking that they have with the economy with low productivity. 106 00:05:17,000 --> 00:05:19,760 Speaker 1: They have some challenges also with elections in Germany and 107 00:05:19,760 --> 00:05:22,240 Speaker 1: in France that have created a little bit more complicated 108 00:05:22,279 --> 00:05:26,120 Speaker 1: political situation. So broadly speaking, the US has some tailwinds, 109 00:05:26,200 --> 00:05:28,479 Speaker 1: Europe has some hit winds, and that's the reason why 110 00:05:28,520 --> 00:05:32,360 Speaker 1: Europe still is unfortunately having a weaker outlook for growth. 111 00:05:32,560 --> 00:05:35,120 Speaker 2: So you're having a cup of coffee with Rowan and Zelter. 112 00:05:35,520 --> 00:05:37,320 Speaker 2: I know you're not on speaking terms with them, but 113 00:05:37,640 --> 00:05:39,240 Speaker 2: you know, Let's presume you know you're doing an eight 114 00:05:39,240 --> 00:05:42,880 Speaker 2: o'clock meeting with the fancy people, Apollo, what are you 115 00:05:43,000 --> 00:05:47,640 Speaker 2: advising them about the general market, the tone of our 116 00:05:47,720 --> 00:05:49,200 Speaker 2: equity markets. 117 00:05:49,520 --> 00:05:50,800 Speaker 5: Well, we talk every day. 118 00:05:50,960 --> 00:05:54,479 Speaker 1: And the advice, of course is here still that the 119 00:05:54,480 --> 00:05:58,080 Speaker 1: economy is doing just fine across the board wide range 120 00:05:58,120 --> 00:06:00,520 Speaker 1: of indicators we are seeing. If you look at the 121 00:06:00,560 --> 00:06:02,400 Speaker 1: daily data for how many people fly on airplanes is 122 00:06:02,400 --> 00:06:05,119 Speaker 1: still very strong. The daily data from my Bloomberg screen 123 00:06:05,480 --> 00:06:07,719 Speaker 1: how many people go to restaurants is also very strong. 124 00:06:07,960 --> 00:06:10,440 Speaker 1: The daily data from my Bloomberg screen on depit card 125 00:06:10,480 --> 00:06:13,480 Speaker 1: transactions is also very strong. The weekly data for how 126 00:06:13,520 --> 00:06:15,760 Speaker 1: many people go to the movies, go to Broadway shows, 127 00:06:15,839 --> 00:06:18,960 Speaker 1: retail spending is all very strong. So that's basically telling 128 00:06:19,000 --> 00:06:22,039 Speaker 1: you that broadly speaking, there is no recession. There's no 129 00:06:22,080 --> 00:06:24,799 Speaker 1: sign of a recession. GDP last quarter was three percent 130 00:06:24,800 --> 00:06:26,600 Speaker 1: Atlanta fit GDP NOWT for this quarter is two and 131 00:06:26,640 --> 00:06:29,120 Speaker 1: a half. Where is the slowdown everyone is so worried about, 132 00:06:29,320 --> 00:06:31,600 Speaker 1: So it's not surprising the non found payrolls. 133 00:06:31,279 --> 00:06:32,279 Speaker 5: Continues to be strong. 134 00:06:32,320 --> 00:06:34,800 Speaker 1: So the advice really is that look at the data 135 00:06:34,800 --> 00:06:37,720 Speaker 1: that comes in instead of looking at frameworks for thinking 136 00:06:37,760 --> 00:06:40,760 Speaker 1: about where we might be theoretically with us STAR and 137 00:06:40,839 --> 00:06:42,560 Speaker 1: if it funds raised in several years time. 138 00:06:42,920 --> 00:06:45,520 Speaker 4: What's the top question that you're getting from clients and 139 00:06:45,560 --> 00:06:48,039 Speaker 4: how do you use that as a potential sentiment gauge. 140 00:06:48,600 --> 00:06:51,640 Speaker 1: Yeah, a very important question is, of course financing and 141 00:06:51,680 --> 00:06:55,480 Speaker 1: financial conditions. Financial markets are very easy, with the stock 142 00:06:55,560 --> 00:06:58,840 Speaker 1: market as usual close to all time highs, credit spreads 143 00:06:58,960 --> 00:07:01,840 Speaker 1: very tight on ITG high yield and loans, and likewise, 144 00:07:01,839 --> 00:07:04,320 Speaker 1: when it comes to financing for companies, there is a 145 00:07:04,400 --> 00:07:07,320 Speaker 1: general trend of deep banking, where financing is moving away 146 00:07:07,320 --> 00:07:10,720 Speaker 1: from the banking sector, moving to long term stable financing 147 00:07:10,800 --> 00:07:14,000 Speaker 1: capucial sources, and those types of financing of course are 148 00:07:14,040 --> 00:07:16,440 Speaker 1: beginning to play a bigger and bigger role because there 149 00:07:16,520 --> 00:07:19,520 Speaker 1: is a change in the financial system that's beginning to 150 00:07:19,600 --> 00:07:22,760 Speaker 1: be much more pronounced and play a more significant role 151 00:07:22,760 --> 00:07:26,080 Speaker 1: when it comes to providing financing to consumers and providing 152 00:07:26,120 --> 00:07:27,160 Speaker 1: financing to firms. 153 00:07:27,320 --> 00:07:28,720 Speaker 5: So this debate about how is. 154 00:07:28,720 --> 00:07:31,400 Speaker 1: The financial system changing, both in terms of how we 155 00:07:31,440 --> 00:07:34,640 Speaker 1: say for retirement, also in terms of how consumers borrow, 156 00:07:34,760 --> 00:07:37,280 Speaker 1: how firms borrow, and also in terms of the role 157 00:07:37,320 --> 00:07:39,560 Speaker 1: of banks is playing a very important part of my 158 00:07:39,640 --> 00:07:40,720 Speaker 1: conversations with LPs. 159 00:07:40,720 --> 00:07:41,400 Speaker 5: At the moment. 160 00:07:41,240 --> 00:07:44,720 Speaker 2: Torston slock with us with apollow global management. We continue 161 00:07:44,760 --> 00:07:50,040 Speaker 2: a good conversation here Turiston. If we don't get the 162 00:07:50,160 --> 00:07:53,840 Speaker 2: rate cuts, so many people are modeling what does that 163 00:07:53,960 --> 00:07:56,800 Speaker 2: do to our economy? Is it something that we have 164 00:07:56,840 --> 00:07:59,560 Speaker 2: to work out and work through or is it just 165 00:07:59,600 --> 00:08:03,400 Speaker 2: another at the races and we normalize at these levels. 166 00:08:04,040 --> 00:08:06,320 Speaker 5: I like that description another day the races. 167 00:08:06,400 --> 00:08:09,600 Speaker 1: So I do think that this is a very fundamental question, namely, 168 00:08:10,080 --> 00:08:12,800 Speaker 1: if monetary policy really is restrictive. 169 00:08:13,280 --> 00:08:15,920 Speaker 5: The FED keeps emphasizing and saying the Fed funds rate. 170 00:08:15,760 --> 00:08:18,480 Speaker 1: Which today is about five, and in the long run 171 00:08:18,520 --> 00:08:22,160 Speaker 1: we're going to down around three. Well, given five in 172 00:08:22,160 --> 00:08:25,680 Speaker 1: interest rates is higher than three, then the definition, according 173 00:08:25,680 --> 00:08:28,520 Speaker 1: to the Fed must be that the monetary policy stands 174 00:08:28,640 --> 00:08:32,600 Speaker 1: is restrictive or constraining on economic growth. But that's not 175 00:08:32,640 --> 00:08:34,760 Speaker 1: what non found payrolls of two hundred and fifty four 176 00:08:34,760 --> 00:08:37,320 Speaker 1: thousand suggesting, that's not what a declining on in plantar 177 00:08:37,360 --> 00:08:40,240 Speaker 1: rate is suggesting. That's not a declining default rate for 178 00:08:40,320 --> 00:08:43,000 Speaker 1: lebl loads is suggesting. So if it really were the 179 00:08:43,080 --> 00:08:46,560 Speaker 1: case that monaster policy was restrictive, as the FED has 180 00:08:46,600 --> 00:08:50,120 Speaker 1: been arguing, why is the incoming data then still good? So, therefore, 181 00:08:50,160 --> 00:08:53,120 Speaker 1: tom to your question, if they do not cut, we 182 00:08:53,160 --> 00:08:57,560 Speaker 1: should expect that these tailwinds from AI investing, from energy transition, 183 00:08:57,720 --> 00:09:01,360 Speaker 1: from the Chips Act, Inflation Reduction Act, infrastruction, government spending, 184 00:09:01,600 --> 00:09:05,240 Speaker 1: and generally less sensitivity to interstrates for consumers and firms 185 00:09:05,280 --> 00:09:07,280 Speaker 1: because they have locked in low interest rates. We should 186 00:09:07,280 --> 00:09:09,760 Speaker 1: expect these things to still provide a tail and therefore 187 00:09:09,760 --> 00:09:12,640 Speaker 1: make the US economic outlook stronger than what we see 188 00:09:12,679 --> 00:09:15,480 Speaker 1: elsewhere in the world because of these idiosyncratic forces that 189 00:09:15,520 --> 00:09:16,480 Speaker 1: we're seeing in the US. 190 00:09:16,880 --> 00:09:19,360 Speaker 4: After that blew out jobs report, Bank of America is 191 00:09:19,400 --> 00:09:21,520 Speaker 4: making a call about how CPI is no longer a 192 00:09:21,559 --> 00:09:23,400 Speaker 4: non event. And the implied move right now in the 193 00:09:23,400 --> 00:09:25,679 Speaker 4: options market for CPI day is about one point one 194 00:09:25,679 --> 00:09:27,480 Speaker 4: percent in either direction for the S and P five 195 00:09:27,559 --> 00:09:30,319 Speaker 4: hundred versus about a seventy basis point move over the 196 00:09:30,440 --> 00:09:32,840 Speaker 4: last three months on that day. So how vital is 197 00:09:32,840 --> 00:09:35,400 Speaker 4: it when it comes to this latest report coming up 198 00:09:35,440 --> 00:09:37,120 Speaker 4: in a few sessions here as far as what it 199 00:09:37,160 --> 00:09:38,880 Speaker 4: means for the Fed's next rate decision. 200 00:09:39,400 --> 00:09:42,080 Speaker 1: Yeah, this is a really important question because think about 201 00:09:42,120 --> 00:09:45,160 Speaker 1: it for years when inflation started going up in twenty 202 00:09:45,200 --> 00:09:49,400 Speaker 1: twenty one twenty two, all the debate was inflation, inflation, inflation. 203 00:09:50,000 --> 00:09:52,719 Speaker 1: Now when inflation there has come down much closer to two, 204 00:09:52,800 --> 00:09:55,000 Speaker 1: we're two and a half today. We were at nine 205 00:09:55,080 --> 00:09:57,160 Speaker 1: in twenty twenty two, so we are very close to two. 206 00:09:57,240 --> 00:10:00,600 Speaker 1: Now the pendulum swung back to well, now you know 207 00:10:00,640 --> 00:10:03,319 Speaker 1: what it's all about unemployment, because we can check off 208 00:10:03,320 --> 00:10:05,680 Speaker 1: the box with inflation and say, let's not worry about 209 00:10:05,720 --> 00:10:08,440 Speaker 1: that anymore. But because we now have this risk that 210 00:10:08,480 --> 00:10:11,160 Speaker 1: inflation could potentially begin to move higher, it is almost 211 00:10:11,200 --> 00:10:13,920 Speaker 1: as if the problem is about to swing back towards 212 00:10:13,960 --> 00:10:16,600 Speaker 1: inflation again. As you're saying, that's not how markets look 213 00:10:16,679 --> 00:10:20,080 Speaker 1: at Thursday's data that's coming out on the CPI. But 214 00:10:20,160 --> 00:10:23,480 Speaker 1: it still is very important here that the different focus 215 00:10:23,480 --> 00:10:25,000 Speaker 1: from the Fed sometimes is inflation. 216 00:10:25,360 --> 00:10:26,480 Speaker 5: Now it's been unemployment. 217 00:10:26,640 --> 00:10:29,280 Speaker 1: Well, now we're back to watching inflation actually is on 218 00:10:29,320 --> 00:10:29,840 Speaker 1: its way. 219 00:10:29,720 --> 00:10:31,000 Speaker 5: Back to the two percent target. 220 00:10:31,160 --> 00:10:33,160 Speaker 1: Or if there's a risk that in particular the forty 221 00:10:33,160 --> 00:10:35,480 Speaker 1: percent of the CPI basket that is housing, if that 222 00:10:35,520 --> 00:10:38,080 Speaker 1: begins to move higher again, then we will certainly have 223 00:10:38,480 --> 00:10:40,559 Speaker 1: much more focus back on inflation again. 224 00:10:40,920 --> 00:10:43,160 Speaker 4: And of course when you're looking at the money market 225 00:10:43,160 --> 00:10:46,280 Speaker 4: funds still being around records here, if rates do stay 226 00:10:46,480 --> 00:10:50,160 Speaker 4: a bit elevated, what's the actual yield based on history 227 00:10:50,280 --> 00:10:51,920 Speaker 4: as far as when need see money coming out of 228 00:10:51,920 --> 00:10:54,520 Speaker 4: money market funds and more going into the equity market. 229 00:10:54,679 --> 00:10:57,959 Speaker 1: Yeah, and this is the real host mystery looking ahead, 230 00:10:58,040 --> 00:11:01,480 Speaker 1: namely the more than six trillion dollars in money market funds. 231 00:11:01,640 --> 00:11:04,360 Speaker 1: A lot of that money came into money market funds 232 00:11:04,400 --> 00:11:07,360 Speaker 1: because the fifth funds rate went up. Now the fifth 233 00:11:07,360 --> 00:11:09,960 Speaker 1: funds rate is going down. So the question is what 234 00:11:10,080 --> 00:11:11,920 Speaker 1: I invest us in money market funds going to do? 235 00:11:12,520 --> 00:11:16,240 Speaker 1: Historically they have gone into other types of fixed income itg. Credit, 236 00:11:16,400 --> 00:11:19,240 Speaker 1: some high yield, maybe some loans. But the question is 237 00:11:19,320 --> 00:11:20,800 Speaker 1: might they even take some of this and put it 238 00:11:20,840 --> 00:11:23,439 Speaker 1: into equities if the fit continues to. 239 00:11:23,400 --> 00:11:24,280 Speaker 5: Lower interest rates? 240 00:11:24,320 --> 00:11:26,600 Speaker 1: In other words, what is the risk willingness of that 241 00:11:26,679 --> 00:11:28,600 Speaker 1: six trillion dollars in money market funds? 242 00:11:28,720 --> 00:11:29,320 Speaker 5: Where do they go? 243 00:11:29,720 --> 00:11:32,640 Speaker 2: Yeah, this is brilliant tours. Just great question because this 244 00:11:32,760 --> 00:11:36,320 Speaker 2: is just the heart of the matter. But it's nonlinear tours. 245 00:11:36,320 --> 00:11:38,280 Speaker 2: And we just had a model. What did you learn 246 00:11:38,840 --> 00:11:42,920 Speaker 2: in the lower interest rate experiment of the last twelve 247 00:11:43,280 --> 00:11:46,240 Speaker 2: Maybe sixteen weeks. What's a lesson you took away? 248 00:11:46,960 --> 00:11:50,600 Speaker 1: Well, I think a lesson is exactly something that we 249 00:11:50,640 --> 00:11:52,640 Speaker 1: can get from what happened for the fourteen years from 250 00:11:52,640 --> 00:11:54,840 Speaker 1: two thousand and eight to twenty twenty two, when interest 251 00:11:54,920 --> 00:11:58,280 Speaker 1: rates were literally at zero. Well, in those situations, when 252 00:11:58,320 --> 00:12:01,920 Speaker 1: we had investors a lot of money that gave much 253 00:12:01,960 --> 00:12:02,559 Speaker 1: lower in. 254 00:12:02,600 --> 00:12:06,160 Speaker 5: Return in rates, they began to chase yield. 255 00:12:06,520 --> 00:12:09,120 Speaker 1: The hunter yield, of course resulted in a rally in 256 00:12:09,200 --> 00:12:12,400 Speaker 1: a broad range of asset classes, and also in this case, 257 00:12:12,400 --> 00:12:15,400 Speaker 1: will likely result when the Fed now embarks on lowering rates. 258 00:12:15,480 --> 00:12:17,760 Speaker 1: What we're debating is to speak with which they're lowering rates, 259 00:12:17,760 --> 00:12:20,120 Speaker 1: not if they're lowering rates. So even if they do 260 00:12:20,200 --> 00:12:22,600 Speaker 1: lower a little bit slower as I would expect, I 261 00:12:22,640 --> 00:12:23,800 Speaker 1: do think that this will. 262 00:12:23,640 --> 00:12:26,320 Speaker 5: Be positive also for credit. It will also be positive 263 00:12:26,320 --> 00:12:26,959 Speaker 5: for equities. 264 00:12:27,080 --> 00:12:30,080 Speaker 1: It'll be positive for asset classes that generally benefit when 265 00:12:30,080 --> 00:12:32,559 Speaker 1: interest rates move to lower levels. But what's most important 266 00:12:32,600 --> 00:12:35,199 Speaker 1: this debate is that we are not going back to zero. 267 00:12:35,679 --> 00:12:38,840 Speaker 1: We will have According to so for futures, the fitfunds 268 00:12:38,920 --> 00:12:41,199 Speaker 1: rate at around three to four percent for the next 269 00:12:41,240 --> 00:12:43,199 Speaker 1: five to seven years, and that does mean that fixed 270 00:12:43,240 --> 00:12:47,040 Speaker 1: income including private credit is looking more attractive because we 271 00:12:47,160 --> 00:12:49,520 Speaker 1: had a very different environment with interest rate for zero 272 00:12:49,760 --> 00:12:51,640 Speaker 1: relative to now we're interest rates are between three and 273 00:12:51,679 --> 00:12:52,920 Speaker 1: four Tourdson Slack. 274 00:12:53,040 --> 00:12:56,600 Speaker 2: Michelle Bowman gets a massive victory lab you grew up 275 00:12:56,640 --> 00:12:59,240 Speaker 2: with the descent of the ECB, the descent of the 276 00:12:59,280 --> 00:13:02,480 Speaker 2: Bank of England, and should we see more Michelle Bowman 277 00:13:02,720 --> 00:13:04,439 Speaker 2: like dissent at the FED. 278 00:13:05,800 --> 00:13:08,520 Speaker 1: I do think that this is a healthy development. Not 279 00:13:08,640 --> 00:13:12,080 Speaker 1: that they shouldn't all agree all the time, but I 280 00:13:12,120 --> 00:13:14,040 Speaker 1: do think that in particular in this instance where we 281 00:13:14,080 --> 00:13:18,319 Speaker 1: are exactly debating will maybe the fifty basis points cut 282 00:13:18,400 --> 00:13:22,600 Speaker 1: which was really justified by a recalibration. Remember j Pal 283 00:13:22,800 --> 00:13:24,800 Speaker 1: mentioned ten times in the press conference that the reason 284 00:13:24,840 --> 00:13:27,760 Speaker 1: why they did this was to recalibrate monetary policy, not 285 00:13:27,800 --> 00:13:30,200 Speaker 1: because the incoming data was weak. I do think that 286 00:13:30,280 --> 00:13:32,760 Speaker 1: there is now a healthy debate among the FFORMC MEM 287 00:13:32,800 --> 00:13:35,440 Speaker 1: which we heard from several of them yesterday, that hey, 288 00:13:35,520 --> 00:13:37,240 Speaker 1: maybe we should go a little bit slower, maybe we 289 00:13:37,240 --> 00:13:39,280 Speaker 1: should watch the data a bit more carefully. And I 290 00:13:39,320 --> 00:13:42,520 Speaker 1: do think that therefore descents are probably more pronounced feature 291 00:13:42,760 --> 00:13:44,600 Speaker 1: of AFMC meetings over the next level. 292 00:13:44,679 --> 00:13:47,320 Speaker 2: Quarters can't wait towisted few to be appointed a governor. 293 00:13:47,400 --> 00:13:49,480 Speaker 2: Mister Slock is with the Powell. Thank you for the 294 00:13:49,559 --> 00:14:02,800 Speaker 2: generous time here. Had an uncle. He is a professor 295 00:14:02,840 --> 00:14:05,839 Speaker 2: at Union College in Schenectady. When my father got angry 296 00:14:05,880 --> 00:14:08,800 Speaker 2: at me, say spell Schenectady, which I never could do. 297 00:14:09,160 --> 00:14:13,920 Speaker 2: Jennifer Lawless Caspell, Schenectady. She survived Winter's there. What was 298 00:14:13,960 --> 00:14:17,160 Speaker 2: it like at Union College a few years ago, Jennifer Lawless. 299 00:14:18,240 --> 00:14:20,360 Speaker 6: It was so many years ago now, but it was 300 00:14:20,400 --> 00:14:21,400 Speaker 6: snowy and cold. 301 00:14:21,480 --> 00:14:24,680 Speaker 2: It was cold, That's what I remember. On the Mohawk River, 302 00:14:24,800 --> 00:14:27,800 Speaker 2: it was mostly called. Jennifer Lawless out of Union and 303 00:14:28,160 --> 00:14:31,000 Speaker 2: of course Stanford and now holding court at the University 304 00:14:31,040 --> 00:14:36,840 Speaker 2: of Virginia. She's absolutely definitive on the female species in 305 00:14:36,880 --> 00:14:40,600 Speaker 2: our political moment, Professor Lawless, How was the Vice President 306 00:14:40,640 --> 00:14:44,560 Speaker 2: of the United States doing and garnering the votes of women? 307 00:14:46,280 --> 00:14:49,640 Speaker 6: She's doing as well as most Democratic candidates do. Most 308 00:14:49,680 --> 00:14:51,840 Speaker 6: people think that when there's a woman at the top 309 00:14:51,880 --> 00:14:54,680 Speaker 6: of the ticket, there's a bigger gender gap, But the 310 00:14:54,760 --> 00:14:59,080 Speaker 6: reality is that female voters tend to prefer Democratic candidates, 311 00:14:59,360 --> 00:15:02,200 Speaker 6: male voters to prefer Republicans, and the sex of the 312 00:15:02,240 --> 00:15:04,960 Speaker 6: candidate doesn't matter that much in terms of vote choice. 313 00:15:05,040 --> 00:15:08,160 Speaker 6: But what Kamala Harris is doing is really motivating women 314 00:15:08,480 --> 00:15:11,680 Speaker 6: to turnout, and ultimately it's likely going to be a 315 00:15:11,680 --> 00:15:12,360 Speaker 6: turnout election. 316 00:15:12,600 --> 00:15:15,800 Speaker 2: Which is the key female turnout? Is it the women 317 00:15:15,840 --> 00:15:18,640 Speaker 2: of the suburbs of Philadelphia and Pittsburgh that we heard 318 00:15:18,680 --> 00:15:21,680 Speaker 2: about two years ago and four years ago or is 319 00:15:21,680 --> 00:15:24,960 Speaker 2: it a different distinction of women that she needs to win. 320 00:15:26,320 --> 00:15:27,600 Speaker 7: I think it's two groups of women. 321 00:15:27,640 --> 00:15:31,040 Speaker 6: It's the suburban women for sure, because in battleground states 322 00:15:31,040 --> 00:15:35,320 Speaker 6: they're often decisive. But it's also motivating young women who 323 00:15:35,760 --> 00:15:38,040 Speaker 6: need to turn out if Harris is going to not 324 00:15:38,120 --> 00:15:41,440 Speaker 6: only build up her popular vote but also secure wins 325 00:15:41,520 --> 00:15:44,640 Speaker 6: in tough states, and young people have traditionally been less 326 00:15:44,640 --> 00:15:47,400 Speaker 6: reliable when it comes to turnout, so anything she can 327 00:15:47,440 --> 00:15:51,160 Speaker 6: do to make sure that young women are enthusiastic will 328 00:15:51,160 --> 00:15:52,560 Speaker 6: be very helpful on election day. 329 00:15:52,720 --> 00:15:55,000 Speaker 4: So which states are going to be most crucial for 330 00:15:55,240 --> 00:15:57,360 Speaker 4: the female vote? 331 00:15:57,880 --> 00:16:00,560 Speaker 6: Well, basically the female vote is really important in all 332 00:16:00,680 --> 00:16:04,320 Speaker 6: states because when the Democrats are able to ensure that 333 00:16:04,360 --> 00:16:07,480 Speaker 6: they have greater margins among women, they tend to win. 334 00:16:07,680 --> 00:16:09,960 Speaker 6: So if she can up the female vote, if she 335 00:16:10,000 --> 00:16:13,840 Speaker 6: can increase her margins on blue wall states like Michigan, Wisconsin, 336 00:16:13,880 --> 00:16:17,000 Speaker 6: in Pennsylvania as well as along the Sun Belt. Those 337 00:16:17,000 --> 00:16:19,720 Speaker 6: are two good paths to victory without a big advantage 338 00:16:19,720 --> 00:16:21,560 Speaker 6: among women, it's hard to see that happening. 339 00:16:23,040 --> 00:16:25,440 Speaker 4: And as far as when it comes to those swing states, 340 00:16:25,440 --> 00:16:27,400 Speaker 4: which ones do you think are most crucial because you're 341 00:16:27,440 --> 00:16:29,280 Speaker 4: named a couple there, But do you think it'll really 342 00:16:29,360 --> 00:16:30,160 Speaker 4: come down to those? 343 00:16:31,840 --> 00:16:32,240 Speaker 7: I do. 344 00:16:32,640 --> 00:16:36,440 Speaker 6: I think without winning Pennsylvania it becomes very, very difficult 345 00:16:36,520 --> 00:16:39,160 Speaker 6: to win the election, especially given the amount of time 346 00:16:39,200 --> 00:16:41,800 Speaker 6: that she's been spending in Pennsylvania, that Walls has been 347 00:16:41,800 --> 00:16:44,760 Speaker 6: spending in Pennsylvania, and Joe Biden's connections to Pennsylvania. 348 00:16:44,800 --> 00:16:46,320 Speaker 7: So I think that's the most important state. 349 00:16:46,640 --> 00:16:49,400 Speaker 6: And if she wins Pennsylvania or plans to win Pennsylvania, 350 00:16:49,640 --> 00:16:52,280 Speaker 6: the easiest path to victory is then through the blue 351 00:16:52,320 --> 00:16:53,880 Speaker 6: wall states of Michigan and Wisconsin. 352 00:16:54,960 --> 00:16:57,160 Speaker 2: I look, Jennifer Loss, I want to go back to 353 00:16:57,160 --> 00:17:00,840 Speaker 2: your core research here, which is so many other countries 354 00:17:01,040 --> 00:17:04,200 Speaker 2: we seem to be very comfortable with women in any 355 00:17:04,320 --> 00:17:07,080 Speaker 2: number of slots, whether a representative, senator, even at the 356 00:17:07,119 --> 00:17:10,920 Speaker 2: local level, is well, you know, the work you've done 357 00:17:10,960 --> 00:17:15,320 Speaker 2: at UVA. Running for office is still for men. How 358 00:17:15,359 --> 00:17:17,840 Speaker 2: did we get there? Why are we distinctive in this? 359 00:17:19,680 --> 00:17:22,639 Speaker 6: It's interesting. It's really a supply problem and not a 360 00:17:22,640 --> 00:17:24,960 Speaker 6: demand problem. And by that I mean that when women 361 00:17:25,040 --> 00:17:27,880 Speaker 6: run for office, they generally fare just as well as men. 362 00:17:28,000 --> 00:17:30,080 Speaker 6: They're just as likely to win their elections, they raise 363 00:17:30,160 --> 00:17:33,520 Speaker 6: just as much money, their media coverage generally looks the same. 364 00:17:34,040 --> 00:17:36,920 Speaker 7: And keep in mind, in twenty sixteen, Hillary Clinton. 365 00:17:36,600 --> 00:17:39,480 Speaker 6: Did win the popular vote, so voters, donors, and the 366 00:17:39,560 --> 00:17:42,960 Speaker 6: media seem okay with women. The problem is that women 367 00:17:43,000 --> 00:17:45,880 Speaker 6: are still significantly less likely than men to emerge as 368 00:17:45,880 --> 00:17:49,119 Speaker 6: candidates and run for office, largely because they perceived that 369 00:17:49,160 --> 00:17:51,640 Speaker 6: there's widespread systematic bias against them. 370 00:17:51,960 --> 00:17:54,200 Speaker 7: And so it's sort of a chicken and egg problem. 371 00:17:54,320 --> 00:17:56,280 Speaker 6: If we don't have enough women out there, we can't 372 00:17:56,280 --> 00:17:58,800 Speaker 6: normalize it for more women to start emerging. 373 00:17:59,000 --> 00:18:00,720 Speaker 4: So what do you think ultimately needs to be done 374 00:18:00,760 --> 00:18:01,600 Speaker 4: in order to fix that? 375 00:18:03,000 --> 00:18:05,200 Speaker 7: Two things. The first is political recruitment. 376 00:18:05,520 --> 00:18:08,080 Speaker 6: When women are encouraged to run for office, either by 377 00:18:08,080 --> 00:18:11,359 Speaker 6: a party leader, elected official, or political activist, but also 378 00:18:11,480 --> 00:18:14,120 Speaker 6: by a family member, colleague, or friend, they're far more 379 00:18:14,200 --> 00:18:16,440 Speaker 6: likely to give it serious thought. And if you don't 380 00:18:16,440 --> 00:18:18,080 Speaker 6: think about something, you're not going to do it. So 381 00:18:18,119 --> 00:18:20,560 Speaker 6: that's an important first step. And the next thing that 382 00:18:20,600 --> 00:18:23,800 Speaker 6: we have to do, I think, is convey the reality 383 00:18:23,880 --> 00:18:26,520 Speaker 6: that when women run, they are just as likely to win. 384 00:18:26,800 --> 00:18:30,280 Speaker 6: We hear high profile stories about gender bias and discrimination 385 00:18:30,480 --> 00:18:32,600 Speaker 6: right all the time, and those things are true and 386 00:18:32,640 --> 00:18:34,800 Speaker 6: they do happen. But part of the reason that they're 387 00:18:34,840 --> 00:18:36,399 Speaker 6: newsworthy is because they're rare. 388 00:18:36,640 --> 00:18:39,240 Speaker 2: Professor Lawless, I believe in the Wall Street Journal today, 389 00:18:39,240 --> 00:18:41,119 Speaker 2: I don't have it in front of me. There was 390 00:18:41,160 --> 00:18:46,240 Speaker 2: a patheartical about Democrats in Michigan basically saying to the 391 00:18:46,320 --> 00:18:50,320 Speaker 2: vice president, let's go lose the media dash and get 392 00:18:50,400 --> 00:18:53,439 Speaker 2: up here in campaign. Where do you stand on that? 393 00:18:53,600 --> 00:18:57,119 Speaker 2: Does a vice president? I mean President Trump has a mode, 394 00:18:57,240 --> 00:19:00,000 Speaker 2: He has a model and he grinds it out every day. 395 00:19:00,800 --> 00:19:03,000 Speaker 2: Is there a mode? Is there a model to Harris 396 00:19:03,280 --> 00:19:06,520 Speaker 2: or does she to shift now? Twenty x days before. 397 00:19:06,200 --> 00:19:09,840 Speaker 6: The election, I think she's got to walk on chew gum. 398 00:19:10,200 --> 00:19:13,679 Speaker 6: We saw in twenty sixteen that Hillary Clinton wasn't campaigning 399 00:19:13,760 --> 00:19:17,880 Speaker 6: as actively as a lot of people thoughts it's and 400 00:19:17,960 --> 00:19:20,560 Speaker 6: turnout wasn't where it needed to be. But We've also 401 00:19:20,640 --> 00:19:23,920 Speaker 6: seen people like Joe Biden take a hit for avoiding 402 00:19:23,960 --> 00:19:29,040 Speaker 6: tough questions by journalists and doing the media tours and blitzes. 403 00:19:29,359 --> 00:19:31,879 Speaker 6: So I think the Harris campaign is trying to do both, 404 00:19:31,960 --> 00:19:34,240 Speaker 6: and she's got twenty eight days to demonstrate that she's 405 00:19:34,240 --> 00:19:34,879 Speaker 6: able to do it. 406 00:19:35,240 --> 00:19:38,880 Speaker 2: Jennifer Lawless, thank you so much, greatly, greatly appreciate it. 407 00:19:42,960 --> 00:19:47,399 Speaker 2: I really can't convey enough the theoretical foundations of Jeffrey Rosenberg. 408 00:19:47,920 --> 00:19:50,480 Speaker 2: He comes on the Fed day, he comes on other days, 409 00:19:50,520 --> 00:19:53,600 Speaker 2: and for Black Rock it's blah blah blah, and the 410 00:19:53,640 --> 00:19:56,800 Speaker 2: fixed income market over to economics, even with a touch 411 00:19:56,840 --> 00:20:01,520 Speaker 2: of equity analysis, but behind it is me Minnesota, Wisconsin, 412 00:20:02,160 --> 00:20:06,560 Speaker 2: and then on to Carnegie Mellon. It is rigorous mathematics. 413 00:20:07,080 --> 00:20:11,120 Speaker 2: Behind the Jeffrey Rosenberg comments, Jeff, what part of your 414 00:20:11,160 --> 00:20:16,040 Speaker 2: mathematics matters right now? And a basic equation of where 415 00:20:16,040 --> 00:20:18,720 Speaker 2: we're heading? What's your number one focus? 416 00:20:19,960 --> 00:20:23,160 Speaker 8: That's a great question, Tom, and the answer is rate 417 00:20:23,160 --> 00:20:27,120 Speaker 8: of change. And that's really what markets focus on. They 418 00:20:27,160 --> 00:20:32,399 Speaker 8: focus on much more than the level, the rate of change, 419 00:20:32,480 --> 00:20:35,680 Speaker 8: and that's really what last week's economic data and really 420 00:20:35,720 --> 00:20:37,920 Speaker 8: before that was all about. Right the rate of change 421 00:20:37,920 --> 00:20:41,480 Speaker 8: in the actual data and as importantly the rate of 422 00:20:41,560 --> 00:20:42,320 Speaker 8: change in. 423 00:20:42,200 --> 00:20:43,320 Speaker 3: The revised data. 424 00:20:43,920 --> 00:20:46,720 Speaker 8: And so that's really changing people's perspective about where this 425 00:20:46,840 --> 00:20:48,679 Speaker 8: economy is and where the FED has to be. And 426 00:20:48,720 --> 00:20:50,440 Speaker 8: that's what you see in the bond market the last 427 00:20:50,480 --> 00:20:53,399 Speaker 8: two three days. And it's pretty violent this rate of change. 428 00:20:53,400 --> 00:20:56,639 Speaker 2: To me, what's important here with first second derivative Newtonian 429 00:20:56,720 --> 00:21:02,080 Speaker 2: mechanics is a basic idea, Jeff Rosenberg, it's simple, chug 430 00:21:02,320 --> 00:21:06,439 Speaker 2: and plug. I mean, what does Jerown Powell need to 431 00:21:06,480 --> 00:21:10,399 Speaker 2: plug into the equation to lead us some stability for 432 00:21:10,520 --> 00:21:13,840 Speaker 2: dare I say a vision out to late twenty twenty five, 433 00:21:14,080 --> 00:21:15,040 Speaker 2: What does he need to do? 434 00:21:16,280 --> 00:21:18,720 Speaker 8: Yeah, you know, it's it's an interesting question because there 435 00:21:18,760 --> 00:21:21,159 Speaker 8: is a lot of you know, kind of taking the 436 00:21:21,320 --> 00:21:27,680 Speaker 8: SEP forecasts for growth and inflation, plugging those into a formula, 437 00:21:28,320 --> 00:21:32,000 Speaker 8: various variants of the tailor rule, and determining whether or 438 00:21:32,080 --> 00:21:35,160 Speaker 8: not the Fed's policy excuse me here for a second, 439 00:21:36,320 --> 00:21:40,879 Speaker 8: is overly restrictive. And the problem is the inputs to 440 00:21:41,000 --> 00:21:44,800 Speaker 8: those formulas they change, right, And that's a big part 441 00:21:44,800 --> 00:21:48,040 Speaker 8: of the recent you know, kind of reassessment here in 442 00:21:48,080 --> 00:21:51,119 Speaker 8: the bond markets. Really all the financial markets, that the 443 00:21:51,240 --> 00:21:56,800 Speaker 8: data has been revised, and the data particularly on labor markets, 444 00:21:56,840 --> 00:21:59,680 Speaker 8: the data in terms of the consumer and the broad 445 00:21:59,680 --> 00:22:00,320 Speaker 8: a coomy. 446 00:22:00,400 --> 00:22:02,920 Speaker 3: The debate between GDP. 447 00:22:02,560 --> 00:22:07,480 Speaker 8: And gd I basically was settled in favor of GDP 448 00:22:08,000 --> 00:22:11,280 Speaker 8: being the right measure, meaning this economy is as strong 449 00:22:11,320 --> 00:22:15,200 Speaker 8: as it appears and not this kind of stinky weakening. 450 00:22:15,440 --> 00:22:18,040 Speaker 8: And so the data going into those formulas is changing, 451 00:22:18,080 --> 00:22:20,320 Speaker 8: and it's basically saying, you know, the Fed is not 452 00:22:20,560 --> 00:22:22,680 Speaker 8: as restrictive as. 453 00:22:22,480 --> 00:22:23,159 Speaker 3: It thought it was. 454 00:22:23,320 --> 00:22:25,280 Speaker 4: And so in that case, on the back of this 455 00:22:25,400 --> 00:22:27,760 Speaker 4: latest jobs report and ahead of the CPI data later 456 00:22:27,800 --> 00:22:30,280 Speaker 4: this week, what is speculative trading in the futures market 457 00:22:30,320 --> 00:22:32,760 Speaker 4: for bonds telling us about the direction of yields? 458 00:22:34,400 --> 00:22:36,480 Speaker 8: Well, I mean you don't have to look at the 459 00:22:36,520 --> 00:22:40,520 Speaker 8: futures markets to see what the trading is saying. It's 460 00:22:40,880 --> 00:22:46,399 Speaker 8: it's basically spoken pretty clearly here and I think you 461 00:22:46,520 --> 00:22:50,240 Speaker 8: highlighted it in the break a minute ago. That we've 462 00:22:50,280 --> 00:22:53,480 Speaker 8: priced out the expectation that we're going to have, you know, 463 00:22:53,640 --> 00:22:58,000 Speaker 8: three fifty basis point cuts in a row, and now 464 00:22:58,040 --> 00:23:01,880 Speaker 8: you've backed off that pricing to November's twenty five. It's 465 00:23:01,880 --> 00:23:04,399 Speaker 8: actually a little bit underneath the twenty five and then 466 00:23:04,480 --> 00:23:08,639 Speaker 8: another twenty five in December, and so you're back to 467 00:23:09,160 --> 00:23:12,080 Speaker 8: a little bit more of the bond markets aligned to 468 00:23:12,160 --> 00:23:14,840 Speaker 8: what the FED was saying, whereas before and really much 469 00:23:14,880 --> 00:23:17,320 Speaker 8: of the year, the bond market has been just very 470 00:23:17,480 --> 00:23:20,280 Speaker 8: much aggressive, kind of overreacting. 471 00:23:20,720 --> 00:23:20,879 Speaker 2: You know. 472 00:23:20,880 --> 00:23:24,439 Speaker 8: Obviously, we came into the year huge expectations for a 473 00:23:24,440 --> 00:23:26,560 Speaker 8: lot of cuts. We had to price that out given 474 00:23:26,560 --> 00:23:27,640 Speaker 8: the inflation. 475 00:23:27,480 --> 00:23:29,879 Speaker 4: So level, and you know, as we head into the 476 00:23:29,920 --> 00:23:33,160 Speaker 4: final months of the year, how are you suggesting to clients? 477 00:23:33,240 --> 00:23:35,560 Speaker 4: What do they buy? What do they sell? In the 478 00:23:35,600 --> 00:23:37,679 Speaker 4: treasury market. 479 00:23:38,080 --> 00:23:42,080 Speaker 8: We've been, you know, pretty adamant that the vulnerability in 480 00:23:42,359 --> 00:23:45,600 Speaker 8: the bond positioning for most clients is what we've been 481 00:23:45,640 --> 00:23:47,560 Speaker 8: seeing a lot in the flows. 482 00:23:47,600 --> 00:23:49,480 Speaker 3: And what you see in the flows is this kind 483 00:23:49,480 --> 00:23:50,440 Speaker 3: of knee jerk. 484 00:23:50,240 --> 00:23:54,800 Speaker 8: Reaction to the expectation of the commencement of the Fed's 485 00:23:55,000 --> 00:23:57,840 Speaker 8: cutting cycle. And the knee jerk reaction is if the 486 00:23:57,840 --> 00:24:00,560 Speaker 8: Fed's cutting interest rates, then duration is my my friend, 487 00:24:00,760 --> 00:24:03,440 Speaker 8: and I want to own the maximal amount of duration 488 00:24:03,520 --> 00:24:04,440 Speaker 8: in my portfolio. 489 00:24:04,600 --> 00:24:06,840 Speaker 3: I want to own the longest maturities out there. 490 00:24:07,680 --> 00:24:10,720 Speaker 8: And that we've really been very much saying you gotta 491 00:24:10,760 --> 00:24:14,480 Speaker 8: be careful now. Number one, it's a little bit of 492 00:24:15,560 --> 00:24:18,000 Speaker 8: buy the rumor sell the news. The FED cut fifty 493 00:24:18,000 --> 00:24:21,359 Speaker 8: basis points and bonds lost money, so a lot of 494 00:24:21,400 --> 00:24:24,040 Speaker 8: it was already in the price, and you had a 495 00:24:24,080 --> 00:24:25,440 Speaker 8: lot of heightened expectations. 496 00:24:25,440 --> 00:24:27,040 Speaker 3: And number two is that. 497 00:24:27,040 --> 00:24:30,879 Speaker 8: You just have a lot differential reaction along the maturity spectrum. 498 00:24:31,240 --> 00:24:33,200 Speaker 8: When the FED cuts rates, it's mostly in the front 499 00:24:33,280 --> 00:24:35,479 Speaker 8: end where you see that impact, and the back end 500 00:24:35,480 --> 00:24:37,600 Speaker 8: can be affected by a lot of different things besides 501 00:24:37,640 --> 00:24:38,439 Speaker 8: just the FED cutting rate. 502 00:24:38,440 --> 00:24:40,920 Speaker 2: Now, I'm gonna go a little mathy here math warning 503 00:24:41,680 --> 00:24:44,360 Speaker 2: and Jeff, it goes off of what James Glassman said 504 00:24:44,400 --> 00:24:48,040 Speaker 2: yesterday I retired from JP Morgan about the technology overlay. 505 00:24:48,800 --> 00:24:50,959 Speaker 2: All the work you've done, Jeff, and how it folds 506 00:24:50,960 --> 00:24:55,399 Speaker 2: into the bond market is off of a productivity analysis 507 00:24:56,080 --> 00:24:59,840 Speaker 2: off of technology, and I would suggest off the foundation 508 00:25:00,240 --> 00:25:04,080 Speaker 2: Cob Douglas function, which has some exponents, it's got some 509 00:25:04,080 --> 00:25:07,399 Speaker 2: Greek letters in it, but there's a big, fat, ugly 510 00:25:07,600 --> 00:25:11,600 Speaker 2: A at the beginning of the Cob Douglas function, and 511 00:25:11,640 --> 00:25:15,119 Speaker 2: that's sort of like where are we now? Well, it's like, okay, 512 00:25:15,160 --> 00:25:18,600 Speaker 2: this is the technology, this is the economy. We're going 513 00:25:18,680 --> 00:25:20,680 Speaker 2: to do the math, but we really don't know where 514 00:25:20,720 --> 00:25:24,840 Speaker 2: are we now. How blind are you, Jeff Rosenberg in 515 00:25:25,440 --> 00:25:28,719 Speaker 2: working in fixed income at Blackrock, because you don't know 516 00:25:28,760 --> 00:25:32,560 Speaker 2: where we are right now on productivity or technology. 517 00:25:33,680 --> 00:25:37,880 Speaker 8: Yeah, the Cob Douglas production function, we can measure what 518 00:25:37,920 --> 00:25:41,600 Speaker 8: goes in and we can measure what comes out. It's 519 00:25:41,720 --> 00:25:46,760 Speaker 8: the magic inside that we don't know about. That's total 520 00:25:46,760 --> 00:25:47,880 Speaker 8: factory productivity. 521 00:25:49,680 --> 00:25:49,879 Speaker 5: You know. 522 00:25:50,480 --> 00:25:51,960 Speaker 3: You know, it's interesting time. 523 00:25:51,840 --> 00:25:54,280 Speaker 8: You talk a lot about you know, the math and 524 00:25:54,280 --> 00:25:56,000 Speaker 8: the science that we use, and a lot of the 525 00:25:56,000 --> 00:25:58,960 Speaker 8: math and the science that we use is the mathematics 526 00:25:58,960 --> 00:26:03,360 Speaker 8: of uncertainty, right It's it's using probability and statistics and 527 00:26:03,760 --> 00:26:08,119 Speaker 8: risk models to try to quantify uncertainty, because that's really 528 00:26:08,520 --> 00:26:09,320 Speaker 8: what it's about. 529 00:26:09,960 --> 00:26:10,119 Speaker 2: You know. 530 00:26:10,160 --> 00:26:11,640 Speaker 3: The cop Douglass function is nice. 531 00:26:11,680 --> 00:26:14,320 Speaker 8: It gives you a very certain form with a very 532 00:26:14,400 --> 00:26:16,840 Speaker 8: uncertain input. And that's a lot of what we see 533 00:26:16,840 --> 00:26:20,160 Speaker 8: in kind of the mathematics of economics is that there's 534 00:26:20,200 --> 00:26:24,119 Speaker 8: a there's a proposal of how the economy works, and 535 00:26:24,160 --> 00:26:27,280 Speaker 8: it's very nice and clean. The problem is a lot 536 00:26:27,280 --> 00:26:29,840 Speaker 8: of the inputs are unknown, and that's really what we're 537 00:26:29,880 --> 00:26:32,760 Speaker 8: dealing with whether it's kind of the role of AI, 538 00:26:33,440 --> 00:26:37,520 Speaker 8: the role of technology in changing total factor productivity and 539 00:26:37,600 --> 00:26:40,800 Speaker 8: our inability to measure that, or other things that we 540 00:26:40,800 --> 00:26:43,840 Speaker 8: were talking about before in reference to the tailor role. 541 00:26:43,920 --> 00:26:46,800 Speaker 8: The other you know, kind of big uncertainty is, you know, 542 00:26:46,880 --> 00:26:48,360 Speaker 8: the real neutral rate. 543 00:26:48,440 --> 00:26:51,320 Speaker 3: We don't know what that real neutral rate is, or 544 00:26:51,320 --> 00:26:52,120 Speaker 3: something even. 545 00:26:51,960 --> 00:26:54,240 Speaker 8: More, you know, kind of basic, which is we measure 546 00:26:54,359 --> 00:26:58,000 Speaker 8: economic data that we think we know with certainty, like 547 00:26:58,200 --> 00:27:02,280 Speaker 8: growth and inflation, or our payrolls are employment, we measure 548 00:27:02,320 --> 00:27:05,680 Speaker 8: it with error. So when there are revisions, there's a lot. 549 00:27:05,760 --> 00:27:07,879 Speaker 8: So it's really about dealing with that uncertainty. And I 550 00:27:07,880 --> 00:27:10,800 Speaker 8: think on this technology issue, you know, we really just 551 00:27:10,880 --> 00:27:13,520 Speaker 8: don't know what we really see in terms of technology. 552 00:27:13,560 --> 00:27:17,119 Speaker 8: The impact is this first phase, which is the investment 553 00:27:17,240 --> 00:27:21,879 Speaker 8: side and the tremendous kind of infrastructure build out, but 554 00:27:22,000 --> 00:27:24,040 Speaker 8: it's really kind of the second phase, which is the 555 00:27:24,080 --> 00:27:26,879 Speaker 8: services on top of that, and then the third stage, 556 00:27:26,920 --> 00:27:29,760 Speaker 8: which is you have the services that are expanding the 557 00:27:29,800 --> 00:27:34,200 Speaker 8: impact of that AI. That really builds into that fundamental 558 00:27:34,280 --> 00:27:37,240 Speaker 8: game shift or that many are talking about. Here is 559 00:27:37,240 --> 00:27:41,800 Speaker 8: the potential for AI to shift upward the total factor productivity. 560 00:27:41,800 --> 00:27:44,600 Speaker 8: But to say that's in the economic statistics today. I 561 00:27:44,600 --> 00:27:47,480 Speaker 8: think it's too early for that. What we clearly see 562 00:27:47,560 --> 00:27:49,200 Speaker 8: is this first phase of the investments. 563 00:27:49,480 --> 00:27:52,199 Speaker 2: I can't emphasize enough, Jess, and everybody knows where I 564 00:27:52,240 --> 00:27:56,640 Speaker 2: am on this is l Arian would say, thenown unknowns 565 00:27:56,720 --> 00:28:00,679 Speaker 2: right now that Jeff brilliantly laid out there the finance media. 566 00:28:00,760 --> 00:28:03,840 Speaker 2: I'm as guilty as this as anyone. We are certitude 567 00:28:03,840 --> 00:28:08,520 Speaker 2: one oh one. We believe the ten year yield Blowney, 568 00:28:09,000 --> 00:28:11,520 Speaker 2: I'm sorry. We have no clue when you look at 569 00:28:11,520 --> 00:28:13,720 Speaker 2: these variables like technology. 570 00:28:13,200 --> 00:28:14,960 Speaker 4: And this time a year ago is actually when the 571 00:28:15,000 --> 00:28:19,040 Speaker 4: ten year treasury yield spiked around five percent to that level. 572 00:28:19,040 --> 00:28:19,200 Speaker 2: There. 573 00:28:19,200 --> 00:28:21,080 Speaker 4: If you look now, it's trading at around the four 574 00:28:21,200 --> 00:28:23,960 Speaker 4: level after being around three six. But of course, if 575 00:28:23,960 --> 00:28:26,159 Speaker 4: you're looking at the Atlanta Fed GDP now model, it's 576 00:28:26,160 --> 00:28:28,160 Speaker 4: around two and a half percent for the third quarter. 577 00:28:28,200 --> 00:28:30,879 Speaker 4: So I'm curious why had Bonn yields continued to creep 578 00:28:30,960 --> 00:28:33,359 Speaker 4: lower this year despite sturdy economic growth. 579 00:28:35,280 --> 00:28:37,720 Speaker 3: You know, they went lower on a number of factors. 580 00:28:37,720 --> 00:28:41,240 Speaker 8: The biggest thing, you know, was this this fear, this slowdown, right, 581 00:28:41,360 --> 00:28:44,400 Speaker 8: I mean, we had a lot of conversation about the 582 00:28:44,480 --> 00:28:48,040 Speaker 8: unemployment rate ticking up, the PM rule predicting in recession, 583 00:28:48,480 --> 00:28:51,200 Speaker 8: a lot of recession fears, and that you know, pushed 584 00:28:51,320 --> 00:28:53,440 Speaker 8: and we got I would say, you know, the kind 585 00:28:53,440 --> 00:28:55,680 Speaker 8: of impact on that was. You know, the big fifty 586 00:28:55,720 --> 00:28:59,360 Speaker 8: basis point start of the cutting cycle is very much 587 00:28:59,400 --> 00:29:02,040 Speaker 8: built off of this kind of legacy of the late. 588 00:29:01,840 --> 00:29:05,480 Speaker 3: Summer slow down in the labor markets. 589 00:29:05,520 --> 00:29:07,160 Speaker 8: And now when we look back on it, with the 590 00:29:07,160 --> 00:29:13,080 Speaker 8: revisions and the data, the residual seasonality story around initial 591 00:29:13,480 --> 00:29:16,880 Speaker 8: jobless claims, you know, it's all kind of pointing to 592 00:29:17,080 --> 00:29:19,560 Speaker 8: maybe this labor market is a lot tighter than we 593 00:29:19,600 --> 00:29:21,360 Speaker 8: thought it was. But I think the big drop in 594 00:29:21,360 --> 00:29:24,120 Speaker 8: the yields was because we had this recession fear and 595 00:29:24,200 --> 00:29:28,360 Speaker 8: the jobs market and the labor data kind of supporting 596 00:29:28,400 --> 00:29:32,600 Speaker 8: this notion that the shift from the focus on inflation 597 00:29:32,800 --> 00:29:35,720 Speaker 8: to the shift on securing the soft landing meant the 598 00:29:35,760 --> 00:29:38,280 Speaker 8: FED had to be very, very aggressive, and that's where 599 00:29:38,320 --> 00:29:40,200 Speaker 8: you got yields coming down so aggressively. 600 00:29:40,280 --> 00:29:42,440 Speaker 4: And do you still see and you're keeping your call 601 00:29:42,480 --> 00:29:45,240 Speaker 4: of two twenty five basis point rate cuts for the 602 00:29:45,240 --> 00:29:47,160 Speaker 4: remainder of the year. For obviously, we have two more 603 00:29:47,160 --> 00:29:49,360 Speaker 4: meetings left in November and then in December. 604 00:29:50,280 --> 00:29:51,960 Speaker 8: Yeah, I said that kind of at the end of 605 00:29:52,120 --> 00:29:55,720 Speaker 8: Friday post payroll that you know, the easy call was 606 00:29:55,760 --> 00:29:59,000 Speaker 8: taking the fifty out for November. I think they're going 607 00:29:59,040 --> 00:30:01,040 Speaker 8: to want to stick with tw twenty five and twenty five. 608 00:30:01,080 --> 00:30:03,640 Speaker 8: Obviously we've got some more data between now and then, 609 00:30:03,680 --> 00:30:04,960 Speaker 8: and you know, critically. 610 00:30:04,560 --> 00:30:09,320 Speaker 3: Thursday this this inflation report. You know, we've moved inflation 611 00:30:09,480 --> 00:30:12,800 Speaker 3: to the secondary category of importance because of the I 612 00:30:12,840 --> 00:30:17,120 Speaker 3: would say erroneous belief that the attainment of two percent 613 00:30:17,240 --> 00:30:18,520 Speaker 3: is just is just a given. 614 00:30:18,720 --> 00:30:21,760 Speaker 8: And so I think if you had some surprises on inflation, 615 00:30:22,000 --> 00:30:23,160 Speaker 8: you can't really predict that. 616 00:30:23,160 --> 00:30:25,080 Speaker 3: That's the definition of surprise. 617 00:30:26,320 --> 00:30:29,360 Speaker 8: You know, you could change the narrative around the twenty five, 618 00:30:29,440 --> 00:30:31,840 Speaker 8: but right now, not knowing you know, whether we're. 619 00:30:31,640 --> 00:30:33,000 Speaker 3: Going to get that. I think the Fed's going to 620 00:30:33,080 --> 00:30:34,920 Speaker 3: try to continue to deliver on. 621 00:30:34,880 --> 00:30:37,040 Speaker 8: Twenty five and twenty five in November December, and that's 622 00:30:37,040 --> 00:30:38,400 Speaker 8: where I would you be expecting. 623 00:30:38,480 --> 00:30:40,480 Speaker 3: But you know, the data changes, we're going to have 624 00:30:40,520 --> 00:30:41,200 Speaker 3: to change your mind. 625 00:30:41,640 --> 00:30:43,560 Speaker 2: Jeff, this has been brilliant. Thank you so much, Jeff 626 00:30:43,640 --> 00:30:56,320 Speaker 2: Rosenberg with us in Black Rocket. This is a joy. 627 00:30:57,120 --> 00:31:00,520 Speaker 2: Greg Giau and the only one close is Dave Wasserman 628 00:31:00,560 --> 00:31:05,000 Speaker 2: and Cook Political Report is the granularity of America away 629 00:31:05,040 --> 00:31:08,920 Speaker 2: from all the endless news of two candidates. In that 630 00:31:08,960 --> 00:31:11,960 Speaker 2: we are thrilled that Greg Dureau of Bloomberg Government would 631 00:31:11,960 --> 00:31:14,680 Speaker 2: take time with us this morning. Greg, you're focused on 632 00:31:14,880 --> 00:31:20,200 Speaker 2: Washington State Republicans, and you're focused in California and Democrats 633 00:31:20,920 --> 00:31:24,479 Speaker 2: in a two at the top outcome. Explain that. 634 00:31:25,760 --> 00:31:29,320 Speaker 9: Yeah, So in some states it's possible for two Democrats 635 00:31:29,360 --> 00:31:32,120 Speaker 9: or two Republicans to advance to the general election because 636 00:31:32,120 --> 00:31:35,600 Speaker 9: they have unusual primary systems. Everyone runs on one ballot 637 00:31:35,640 --> 00:31:39,240 Speaker 9: in the primary instead of in separate Democratic or Republican primaries, 638 00:31:39,520 --> 00:31:41,840 Speaker 9: and the top two vote getters in that single ballot 639 00:31:41,960 --> 00:31:45,520 Speaker 9: race advanced to the general election regardless of party affiliation. 640 00:31:45,880 --> 00:31:49,360 Speaker 9: So in states like California, Washington State, and even in 641 00:31:49,680 --> 00:31:52,920 Speaker 9: states like Louisiana, it's possible to have two members of 642 00:31:52,960 --> 00:31:56,000 Speaker 9: the same party compete against one another in the general election. 643 00:31:56,680 --> 00:32:00,520 Speaker 2: It even sounds like seventeen eighty or seventeen ninety almost, 644 00:32:00,800 --> 00:32:05,400 Speaker 2: Greg duo, How is the left, the liberals, the progressive 645 00:32:05,600 --> 00:32:11,760 Speaker 2: doing nationwide? Do they have traction in this election? Yeah? 646 00:32:11,800 --> 00:32:13,720 Speaker 9: I mean I think they probably cast their lot in 647 00:32:13,800 --> 00:32:16,360 Speaker 9: with Vice President Harris. In the presidential race, you have, 648 00:32:16,400 --> 00:32:19,040 Speaker 9: you know, two choices. The left is going to buy 649 00:32:19,040 --> 00:32:22,080 Speaker 9: and large back Vice President Harris. I mean, they're always 650 00:32:22,120 --> 00:32:24,720 Speaker 9: going to be some disgruntle of people on the left 651 00:32:24,760 --> 00:32:27,560 Speaker 9: and the right who are going to, you know, maybe 652 00:32:27,600 --> 00:32:29,440 Speaker 9: not vote. But I think there'd probably be a decent 653 00:32:29,520 --> 00:32:32,080 Speaker 9: voter I to not in this election. In the Senate, 654 00:32:32,520 --> 00:32:35,400 Speaker 9: I think it's a bit different in that control the 655 00:32:35,440 --> 00:32:38,120 Speaker 9: Senate may come down to not what progressives think, but 656 00:32:38,240 --> 00:32:41,680 Speaker 9: what some Trump voters in Montana think, because I think 657 00:32:41,720 --> 00:32:44,200 Speaker 9: the tipping point state for control of the Senate right 658 00:32:44,240 --> 00:32:48,320 Speaker 9: now is Montana. And if John Tester, the Democratic senator there, 659 00:32:48,400 --> 00:32:51,560 Speaker 9: can win enough ticket splitters in his state, which is 660 00:32:51,600 --> 00:32:54,480 Speaker 9: going to vote for Trump by about fifteen to twenty points, 661 00:32:55,000 --> 00:32:58,280 Speaker 9: he needs so many Trump voters to split their tickets 662 00:32:58,280 --> 00:33:01,640 Speaker 9: and back him. So progressives will be very I think, 663 00:33:01,640 --> 00:33:04,760 Speaker 9: more important than presidential race and some down ballot races 664 00:33:04,800 --> 00:33:07,800 Speaker 9: for the House. But in the Senate, while they're important 665 00:33:07,800 --> 00:33:10,520 Speaker 9: in law of these swing states, watch Montana and what 666 00:33:10,560 --> 00:33:12,160 Speaker 9: do these Trump voters do. 667 00:33:12,440 --> 00:33:14,800 Speaker 4: One state I wanted to bring up is Texas because 668 00:33:14,800 --> 00:33:17,400 Speaker 4: you've written about how it's offering Democrats the best shot 669 00:33:17,480 --> 00:33:20,200 Speaker 4: for a Senate upset. Walk us through the dynamics here 670 00:33:20,200 --> 00:33:20,920 Speaker 4: and what's happening. 671 00:33:21,960 --> 00:33:24,320 Speaker 9: Yeah, So in Texas As, Senator Ted Cruz is seeking 672 00:33:24,320 --> 00:33:27,840 Speaker 9: a third term. Texas has not elected a Democrat and 673 00:33:27,880 --> 00:33:31,680 Speaker 9: a state wide election since since the nineteen nineties, has 674 00:33:31,720 --> 00:33:35,240 Speaker 9: not voted Democratic for the Senate since Lloyd Benson in 675 00:33:35,320 --> 00:33:38,960 Speaker 9: nineteen eighty eight, but Democrats have come close, including in 676 00:33:39,000 --> 00:33:42,600 Speaker 9: twenty eighteen when Bellew O'Rourke, who was Cruise's challenger, came 677 00:33:42,640 --> 00:33:46,000 Speaker 9: within three percentage points of beating the Senator. That wasn't 678 00:33:46,000 --> 00:33:49,520 Speaker 9: a good Democratic year Texas. Now we're in a presidential 679 00:33:49,560 --> 00:33:52,800 Speaker 9: election year. Trump is almost certainly going to carry Texas. 680 00:33:53,040 --> 00:33:55,360 Speaker 9: Maybe not by a wide margin, but the margin in 681 00:33:55,440 --> 00:33:57,840 Speaker 9: Texas four years ago was only five and a half 682 00:33:57,880 --> 00:34:02,360 Speaker 9: percentage points. So it's not a blowout state of Republicans anymore. 683 00:34:02,720 --> 00:34:05,800 Speaker 9: But it's still going to be very tough for Colin already, 684 00:34:05,960 --> 00:34:10,160 Speaker 9: a Democratic congressman who is Cruci's Democratic opponent, to get 685 00:34:10,200 --> 00:34:13,280 Speaker 9: from say forty seven percent to fifty percent plus one. 686 00:34:13,480 --> 00:34:15,920 Speaker 2: Greg jo Nick conadd article two days ago I think 687 00:34:15,960 --> 00:34:18,000 Speaker 2: in the New York Times, and I'm going to Senator 688 00:34:18,040 --> 00:34:22,400 Speaker 2: around the New York congressional race the surprise of twenty 689 00:34:22,680 --> 00:34:26,239 Speaker 2: twenty two. Do you frame the Greg juro work is 690 00:34:26,280 --> 00:34:30,040 Speaker 2: a continuation of what we saw in twenty twenty two 691 00:34:30,560 --> 00:34:34,120 Speaker 2: or is twenty twenty four really discreete and presidential? 692 00:34:35,960 --> 00:34:37,800 Speaker 9: Well, I think twenty twenty four in the race for 693 00:34:37,880 --> 00:34:39,719 Speaker 9: the House, New York is a state to watch, New 694 00:34:39,800 --> 00:34:42,440 Speaker 9: York and California, which makes it kind of different from 695 00:34:42,520 --> 00:34:45,480 Speaker 9: the presidential and senate election maps, which have a lot 696 00:34:45,520 --> 00:34:48,320 Speaker 9: of overlap in you know, the industrial Midwest and some 697 00:34:48,440 --> 00:34:50,680 Speaker 9: competitive sun Belt states. But when we were looking at 698 00:34:50,680 --> 00:34:52,839 Speaker 9: control of the House, yes, I'm looking at a lot 699 00:34:52,880 --> 00:34:55,480 Speaker 9: of my twenty twenty two notes in New York. You 700 00:34:55,920 --> 00:35:00,560 Speaker 9: have some rematch campaigns there, and it's going to come 701 00:35:00,640 --> 00:35:03,440 Speaker 9: down to Harris's margin in New York is going to 702 00:35:03,440 --> 00:35:06,399 Speaker 9: be important. Biden carried New York by about twenty three 703 00:35:06,480 --> 00:35:09,120 Speaker 9: points four years ago. It looks like Harris is not 704 00:35:09,200 --> 00:35:11,320 Speaker 9: going to win New York by that much. And therefore, 705 00:35:11,760 --> 00:35:14,640 Speaker 9: you know, those Republican congressmen seeking reelection may not have 706 00:35:14,800 --> 00:35:17,440 Speaker 9: to win as many ticket splitters as they did before, 707 00:35:17,840 --> 00:35:21,920 Speaker 9: but those are that the disproportionate number of competitive seats 708 00:35:22,280 --> 00:35:24,560 Speaker 9: for the House are in New York and California. 709 00:35:24,920 --> 00:35:28,480 Speaker 2: Greg. One final question, what's the single race Greg Dureau 710 00:35:28,640 --> 00:35:29,640 Speaker 2: is most focused on. 711 00:35:31,960 --> 00:35:34,480 Speaker 9: Wow, Well, I think the Montana Senate race for the 712 00:35:34,560 --> 00:35:37,759 Speaker 9: past as you mentioned earlier, but also I don't know. 713 00:35:37,880 --> 00:35:41,640 Speaker 9: I think I'll pick New York's nineteenth district since we 714 00:35:41,680 --> 00:35:44,600 Speaker 9: were just talking about New York Mark Malonaro. This district 715 00:35:44,719 --> 00:35:48,160 Speaker 9: runs from Ithaca east through the Catskills, some of the 716 00:35:48,239 --> 00:35:51,360 Speaker 9: Upper Hudson Valley all the way to the past Albany. 717 00:35:51,640 --> 00:35:55,279 Speaker 9: It voted almost exactly for Biden and Trump as the 718 00:35:55,400 --> 00:35:58,560 Speaker 9: nation did. So it's a very good I think bell 719 00:35:58,640 --> 00:36:01,840 Speaker 9: weather as to which which way the political wins may 720 00:36:01,880 --> 00:36:02,680 Speaker 9: be shifting this year. 721 00:36:03,000 --> 00:36:05,040 Speaker 2: Greg, this has been wonderful. Hope we can catch up 722 00:36:05,040 --> 00:36:07,560 Speaker 2: with you on a weekly basis here as we dashed 723 00:36:07,600 --> 00:36:10,279 Speaker 2: in November fifth, Greg d Folks. For those of you 724 00:36:10,440 --> 00:36:14,000 Speaker 2: within Bloomberg Government and available on the Bloomberg terminal, I 725 00:36:14,120 --> 00:36:19,680 Speaker 2: can't say enough about Greg Dua. His newsletter Ballots and 726 00:36:19,719 --> 00:36:23,000 Speaker 2: Power is absolutely must read. I just I can't say enough. 727 00:36:23,239 --> 00:36:26,120 Speaker 2: Sign up for that as you're able to Greg Duau 728 00:36:26,280 --> 00:36:31,200 Speaker 2: with Bloomberg Government. This is the Bloomberg Surveillance Podcast. Bringing 729 00:36:31,239 --> 00:36:35,600 Speaker 2: you the best in economics, finance, investment, and international relations. 730 00:36:35,920 --> 00:36:39,239 Speaker 2: You can also watch the show live on YouTube. Visit 731 00:36:39,320 --> 00:36:43,360 Speaker 2: the Bloomberg Podcast channel on YouTube to see the show 732 00:36:43,719 --> 00:36:46,719 Speaker 2: weekday mornings from seven to ten am Eastern from our 733 00:36:46,800 --> 00:36:50,520 Speaker 2: global headquarters in New York City. Subscribe to the podcast 734 00:36:50,640 --> 00:36:54,600 Speaker 2: on Apple, Spotify, or anywhere else you listen, and always 735 00:36:54,800 --> 00:36:59,120 Speaker 2: on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.