WEBVTT - Rate Cut Calls and Election Latest 0:00:02.440 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio news. 0:00:12.000 --> 0:00:15.600 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.640 --> 0:00:19.000 with Paul Sweeney. Join us each day for insight from 0:00:19.000 --> 0:00:23.159 the best in economics, finance, investment, and international relations. You 0:00:23.200 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.320 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.320 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.040 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.400 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.120 --> 0:00:47.200 the Bloomberg Terminal, and the Bloomberg Business app. Just about 0:00:47.280 --> 0:00:49.040 in town. Keen with you and you get started. Tourist 0:00:49.080 --> 0:00:51.879 and Slock joins us for the Street. The ex Dedeutsche 0:00:51.960 --> 0:00:54.960 banker puts out a note nine ish a clock every 0:00:54.960 --> 0:00:58.560 morning maybe eightish, which is a single paragraph two paragraphs 0:00:58.560 --> 0:01:02.400 in one chart is read by Global Wall Street. Turstan, 0:01:02.440 --> 0:01:04.920 thanks for joining us for the entire How far will 0:01:04.959 --> 0:01:06.880 do some hurricane stuff here in the middle here this 0:01:07.000 --> 0:01:10.520 is so serious for Tampa and the golf, Turstan. What's 0:01:10.560 --> 0:01:13.360 your chart this morning? What's the number one thing that's 0:01:13.440 --> 0:01:14.120 on your mind? 0:01:14.240 --> 0:01:14.280 It? 0:01:14.360 --> 0:01:19.200 Apollo so well, the job this morning is showing that 0:01:19.600 --> 0:01:23.640 twenty six percent of our consumption in Virginia goes to 0:01:23.840 --> 0:01:29.000 data centers. So the need ford investment in renewable energy 0:01:29.040 --> 0:01:31.320 need find investment in data centers. The need for long 0:01:31.400 --> 0:01:35.400 term caucil to invest in long term projects is including 0:01:35.560 --> 0:01:37.360 in boosting here the AI revolution. 0:01:37.600 --> 0:01:40.160 Why can't Google by their own utility? 0:01:41.800 --> 0:01:45.360 Well, some of the tech companies are actually building their 0:01:45.400 --> 0:01:48.440 own power plans and building their own power sources. But 0:01:48.720 --> 0:01:51.000 the bigger issue, of course continues to be that, as 0:01:51.040 --> 0:01:56.040 we all know, one search on CHATGBT takes ten times 0:01:56.040 --> 0:01:59.880 as much energy as one search on Google. So therefore, 0:02:00.160 --> 0:02:04.960 with everything that's going on everywhere in AI, last language models, 0:02:05.080 --> 0:02:08.440 things getting more complicated, processing powers needed. There is certainly 0:02:08.480 --> 0:02:11.720 a very substantial need to power the AI revolution, and 0:02:11.720 --> 0:02:17.200 that does require long term capital to finances. 0:02:15.360 --> 0:02:17.840 And Turst and Sluck Andjument on the same page. He's 0:02:17.840 --> 0:02:20.960 writing about this this morning for Bloomberg. Just let's complete 0:02:20.960 --> 0:02:23.280 your story. Questions for Twisted Sluck. 0:02:23.160 --> 0:02:25.320 Well, you were talking about how the risk to cutting 0:02:25.360 --> 0:02:28.280 interest rate too much too quickly is, especially on the 0:02:28.280 --> 0:02:31.040 back of the latest jobs report, could become and especially 0:02:31.040 --> 0:02:33.720 looking at inflation might be too hot again. Expand more 0:02:33.760 --> 0:02:35.400 on that because we're gonna get an update on CPI 0:02:35.480 --> 0:02:36.120 later this week. 0:02:36.680 --> 0:02:38.000 Yeah, this is very important. 0:02:38.040 --> 0:02:41.280 So the key question really is why is the economy 0:02:41.320 --> 0:02:44.360 still so strong. Your textbook would have told you that 0:02:44.400 --> 0:02:46.280 when the FITS started raising interest rates in much of 0:02:46.280 --> 0:02:49.480 twenty twenty two, the economy should have begun to slow 0:02:49.520 --> 0:02:52.400 down because when interest rates go up, people should be 0:02:52.480 --> 0:02:53.720 buying fuel costs. 0:02:53.919 --> 0:02:55.080 That's not what we have seen. 0:02:55.280 --> 0:02:57.720 When insist rates go up, you should have seen the 0:02:57.720 --> 0:03:00.360 housing markets low down. That's not what we've seen. So 0:03:00.400 --> 0:03:03.840 there's a number of tailwinds to the economic outlook from AI, 0:03:04.160 --> 0:03:07.639 from defense spending, from fiscal policy, the Chips Act, the 0:03:07.680 --> 0:03:10.839 Face and Production Act. All those things combined have kept 0:03:10.840 --> 0:03:14.760 the economy afloat, including also that consumers were less sensitive 0:03:14.919 --> 0:03:17.799 to interest rates because they had locked in mortgage rates 0:03:17.840 --> 0:03:19.800 at very low levels. Ninety five percent of mortgages are 0:03:19.840 --> 0:03:23.040 fixed rates. So because of these very special forces, we've 0:03:23.120 --> 0:03:25.080 just not had that slow down that the FED has 0:03:25.080 --> 0:03:27.359 been looking for, and we think these forces will continue. 0:03:27.480 --> 0:03:29.720 So therefore the answer to your question is we still 0:03:29.760 --> 0:03:31.079 think that the economy is doing fine. 0:03:31.080 --> 0:03:33.400 There is no need for the FED to lower interest rates. 0:03:34.400 --> 0:03:36.520 And you made a bold call earlier this spring that 0:03:36.560 --> 0:03:39.200 the Fed wouldn't cut interest rates this year. What changed? 0:03:40.440 --> 0:03:43.520 So we actually still think that that was and is 0:03:43.520 --> 0:03:46.480 the right call, because now we're debating was it a 0:03:46.520 --> 0:03:49.440 mistake for the Fed to cut rates fifty basis points? 0:03:49.640 --> 0:03:51.960 We just saw non fine payrolls on Friday. It again 0:03:52.040 --> 0:03:54.520 shows that there is no need to lower interest rates. 0:03:54.560 --> 0:03:57.360 So this raises the question why did the FIT lower 0:03:57.400 --> 0:03:57.960 interest rates? 0:03:58.000 --> 0:03:59.760 And this Tom and I have been talking about this for. 0:03:59.840 --> 0:04:03.480 Year because they have an our style model framework which 0:04:03.520 --> 0:04:06.640 says that, well, our long term interest rate needs to 0:04:06.680 --> 0:04:08.560 be lower, so therefore we need to lower it, not 0:04:08.640 --> 0:04:11.000 because of the incoming data, but really because we think 0:04:11.000 --> 0:04:12.440 in the long run we should have a lower level 0:04:12.480 --> 0:04:15.120 of rates. So yes, it is true that they did 0:04:15.200 --> 0:04:18.040 cut and our expectation is that they may even also 0:04:18.080 --> 0:04:18.880 cut here in November. 0:04:19.279 --> 0:04:21.120 But given the incoming data. 0:04:20.960 --> 0:04:23.000 The risks are rising now that we may have more 0:04:23.080 --> 0:04:25.240 upside risk than downside risk to the economic. 0:04:25.400 --> 0:04:28.000 Tursting on about so if your continental view of years 0:04:28.000 --> 0:04:31.640 ago at Deutsche Bank, to me, the great differential here 0:04:31.680 --> 0:04:34.760 in becoming ever more evident each and every day, is 0:04:34.760 --> 0:04:39.599 the nominal GDP difference between Europe, say, and the United States. 0:04:39.640 --> 0:04:42.520 I got four percent even five percent nomenal working in 0:04:42.560 --> 0:04:46.080 the US. Europe's pretty much flat on their back. Is 0:04:46.120 --> 0:04:48.200 that because of our debt build up or we sent 0:04:49.160 --> 0:04:52.839 our grandchildren essentially funding our nominal GDP. 0:04:53.880 --> 0:04:56.839 Well, the US has some tailwinds that are rather unique 0:04:56.880 --> 0:04:58.800 to the US. We have an AI revolution in the 0:04:58.920 --> 0:05:01.320 US we don't really have in Europe. We also have 0:05:01.480 --> 0:05:04.440 significant support from the Chips Act, the Inflaze Production Act, 0:05:04.480 --> 0:05:07.520 the Infrastructure Act. We don't have those tailwinds in Europe either. 0:05:07.720 --> 0:05:09.960 And on top of that, Europe has now some headwinds, 0:05:10.000 --> 0:05:13.160 of course from inner new sensation, from the challenges more 0:05:13.200 --> 0:05:16.720 broadly speaking that they have with the economy with low productivity. 0:05:17.000 --> 0:05:19.760 They have some challenges also with elections in Germany and 0:05:19.760 --> 0:05:22.240 in France that have created a little bit more complicated 0:05:22.279 --> 0:05:26.120 political situation. So broadly speaking, the US has some tailwinds, 0:05:26.200 --> 0:05:28.479 Europe has some hit winds, and that's the reason why 0:05:28.520 --> 0:05:32.360 Europe still is unfortunately having a weaker outlook for growth. 0:05:32.560 --> 0:05:35.120 So you're having a cup of coffee with Rowan and Zelter. 0:05:35.520 --> 0:05:37.320 I know you're not on speaking terms with them, but 0:05:37.640 --> 0:05:39.240 you know, Let's presume you know you're doing an eight 0:05:39.240 --> 0:05:42.880 o'clock meeting with the fancy people, Apollo, what are you 0:05:43.000 --> 0:05:47.640 advising them about the general market, the tone of our 0:05:47.720 --> 0:05:49.200 equity markets. 0:05:49.520 --> 0:05:50.800 Well, we talk every day. 0:05:50.960 --> 0:05:54.479 And the advice, of course is here still that the 0:05:54.480 --> 0:05:58.080 economy is doing just fine across the board wide range 0:05:58.120 --> 0:06:00.520 of indicators we are seeing. If you look at the 0:06:00.560 --> 0:06:02.400 daily data for how many people fly on airplanes is 0:06:02.400 --> 0:06:05.119 still very strong. The daily data from my Bloomberg screen 0:06:05.480 --> 0:06:07.719 how many people go to restaurants is also very strong. 0:06:07.960 --> 0:06:10.440 The daily data from my Bloomberg screen on depit card 0:06:10.480 --> 0:06:13.480 transactions is also very strong. The weekly data for how 0:06:13.520 --> 0:06:15.760 many people go to the movies, go to Broadway shows, 0:06:15.839 --> 0:06:18.960 retail spending is all very strong. So that's basically telling 0:06:19.000 --> 0:06:22.039 you that broadly speaking, there is no recession. There's no 0:06:22.080 --> 0:06:24.799 sign of a recession. GDP last quarter was three percent 0:06:24.800 --> 0:06:26.600 Atlanta fit GDP NOWT for this quarter is two and 0:06:26.640 --> 0:06:29.120 a half. Where is the slowdown everyone is so worried about, 0:06:29.320 --> 0:06:31.600 So it's not surprising the non found payrolls. 0:06:31.279 --> 0:06:32.279 Continues to be strong. 0:06:32.320 --> 0:06:34.800 So the advice really is that look at the data 0:06:34.800 --> 0:06:37.720 that comes in instead of looking at frameworks for thinking 0:06:37.760 --> 0:06:40.760 about where we might be theoretically with us STAR and 0:06:40.839 --> 0:06:42.560 if it funds raised in several years time. 0:06:42.920 --> 0:06:45.520 What's the top question that you're getting from clients and 0:06:45.560 --> 0:06:48.039 how do you use that as a potential sentiment gauge. 0:06:48.600 --> 0:06:51.640 Yeah, a very important question is, of course financing and 0:06:51.680 --> 0:06:55.480 financial conditions. Financial markets are very easy, with the stock 0:06:55.560 --> 0:06:58.840 market as usual close to all time highs, credit spreads 0:06:58.960 --> 0:07:01.840 very tight on ITG high yield and loans, and likewise, 0:07:01.839 --> 0:07:04.320 when it comes to financing for companies, there is a 0:07:04.400 --> 0:07:07.320 general trend of deep banking, where financing is moving away 0:07:07.320 --> 0:07:10.720 from the banking sector, moving to long term stable financing 0:07:10.800 --> 0:07:14.000 capucial sources, and those types of financing of course are 0:07:14.040 --> 0:07:16.440 beginning to play a bigger and bigger role because there 0:07:16.520 --> 0:07:19.520 is a change in the financial system that's beginning to 0:07:19.600 --> 0:07:22.760 be much more pronounced and play a more significant role 0:07:22.760 --> 0:07:26.080 when it comes to providing financing to consumers and providing 0:07:26.120 --> 0:07:27.160 financing to firms. 0:07:27.320 --> 0:07:28.720 So this debate about how is. 0:07:28.720 --> 0:07:31.400 The financial system changing, both in terms of how we 0:07:31.440 --> 0:07:34.640 say for retirement, also in terms of how consumers borrow, 0:07:34.760 --> 0:07:37.280 how firms borrow, and also in terms of the role 0:07:37.320 --> 0:07:39.560 of banks is playing a very important part of my 0:07:39.640 --> 0:07:40.720 conversations with LPs. 0:07:40.720 --> 0:07:41.400 At the moment. 0:07:41.240 --> 0:07:44.720 Torston slock with us with apollow global management. We continue 0:07:44.760 --> 0:07:50.040 a good conversation here Turiston. If we don't get the 0:07:50.160 --> 0:07:53.840 rate cuts, so many people are modeling what does that 0:07:53.960 --> 0:07:56.800 do to our economy? Is it something that we have 0:07:56.840 --> 0:07:59.560 to work out and work through or is it just 0:07:59.600 --> 0:08:03.400 another at the races and we normalize at these levels. 0:08:04.040 --> 0:08:06.320 I like that description another day the races. 0:08:06.400 --> 0:08:09.600 So I do think that this is a very fundamental question, namely, 0:08:10.080 --> 0:08:12.800 if monetary policy really is restrictive. 0:08:13.280 --> 0:08:15.920 The FED keeps emphasizing and saying the Fed funds rate. 0:08:15.760 --> 0:08:18.480 Which today is about five, and in the long run 0:08:18.520 --> 0:08:22.160 we're going to down around three. Well, given five in 0:08:22.160 --> 0:08:25.680 interest rates is higher than three, then the definition, according 0:08:25.680 --> 0:08:28.520 to the Fed must be that the monetary policy stands 0:08:28.640 --> 0:08:32.600 is restrictive or constraining on economic growth. But that's not 0:08:32.640 --> 0:08:34.760 what non found payrolls of two hundred and fifty four 0:08:34.760 --> 0:08:37.320 thousand suggesting, that's not what a declining on in plantar 0:08:37.360 --> 0:08:40.240 rate is suggesting. That's not a declining default rate for 0:08:40.320 --> 0:08:43.000 lebl loads is suggesting. So if it really were the 0:08:43.080 --> 0:08:46.560 case that monaster policy was restrictive, as the FED has 0:08:46.600 --> 0:08:50.120 been arguing, why is the incoming data then still good? So, therefore, 0:08:50.160 --> 0:08:53.120 tom to your question, if they do not cut, we 0:08:53.160 --> 0:08:57.560 should expect that these tailwinds from AI investing, from energy transition, 0:08:57.720 --> 0:09:01.360 from the Chips Act, Inflation Reduction Act, infrastruction, government spending, 0:09:01.600 --> 0:09:05.240 and generally less sensitivity to interstrates for consumers and firms 0:09:05.280 --> 0:09:07.280 because they have locked in low interest rates. We should 0:09:07.280 --> 0:09:09.760 expect these things to still provide a tail and therefore 0:09:09.760 --> 0:09:12.640 make the US economic outlook stronger than what we see 0:09:12.679 --> 0:09:15.480 elsewhere in the world because of these idiosyncratic forces that 0:09:15.520 --> 0:09:16.480 we're seeing in the US. 0:09:16.880 --> 0:09:19.360 After that blew out jobs report, Bank of America is 0:09:19.400 --> 0:09:21.520 making a call about how CPI is no longer a 0:09:21.559 --> 0:09:23.400 non event. And the implied move right now in the 0:09:23.400 --> 0:09:25.679 options market for CPI day is about one point one 0:09:25.679 --> 0:09:27.480 percent in either direction for the S and P five 0:09:27.559 --> 0:09:30.319 hundred versus about a seventy basis point move over the 0:09:30.440 --> 0:09:32.840 last three months on that day. So how vital is 0:09:32.840 --> 0:09:35.400 it when it comes to this latest report coming up 0:09:35.440 --> 0:09:37.120 in a few sessions here as far as what it 0:09:37.160 --> 0:09:38.880 means for the Fed's next rate decision. 0:09:39.400 --> 0:09:42.080 Yeah, this is a really important question because think about 0:09:42.120 --> 0:09:45.160 it for years when inflation started going up in twenty 0:09:45.200 --> 0:09:49.400 twenty one twenty two, all the debate was inflation, inflation, inflation. 0:09:50.000 --> 0:09:52.719 Now when inflation there has come down much closer to two, 0:09:52.800 --> 0:09:55.000 we're two and a half today. We were at nine 0:09:55.080 --> 0:09:57.160 in twenty twenty two, so we are very close to two. 0:09:57.240 --> 0:10:00.600 Now the pendulum swung back to well, now you know 0:10:00.640 --> 0:10:03.319 what it's all about unemployment, because we can check off 0:10:03.320 --> 0:10:05.680 the box with inflation and say, let's not worry about 0:10:05.720 --> 0:10:08.440 that anymore. But because we now have this risk that 0:10:08.480 --> 0:10:11.160 inflation could potentially begin to move higher, it is almost 0:10:11.200 --> 0:10:13.920 as if the problem is about to swing back towards 0:10:13.960 --> 0:10:16.600 inflation again. As you're saying, that's not how markets look 0:10:16.679 --> 0:10:20.080 at Thursday's data that's coming out on the CPI. But 0:10:20.160 --> 0:10:23.480 it still is very important here that the different focus 0:10:23.480 --> 0:10:25.000 from the Fed sometimes is inflation. 0:10:25.360 --> 0:10:26.480 Now it's been unemployment. 0:10:26.640 --> 0:10:29.280 Well, now we're back to watching inflation actually is on 0:10:29.320 --> 0:10:29.840 its way. 0:10:29.720 --> 0:10:31.000 Back to the two percent target. 0:10:31.160 --> 0:10:33.160 Or if there's a risk that in particular the forty 0:10:33.160 --> 0:10:35.480 percent of the CPI basket that is housing, if that 0:10:35.520 --> 0:10:38.080 begins to move higher again, then we will certainly have 0:10:38.480 --> 0:10:40.559 much more focus back on inflation again. 0:10:40.920 --> 0:10:43.160 And of course when you're looking at the money market 0:10:43.160 --> 0:10:46.280 funds still being around records here, if rates do stay 0:10:46.480 --> 0:10:50.160 a bit elevated, what's the actual yield based on history 0:10:50.280 --> 0:10:51.920 as far as when need see money coming out of 0:10:51.920 --> 0:10:54.520 money market funds and more going into the equity market. 0:10:54.679 --> 0:10:57.959 Yeah, and this is the real host mystery looking ahead, 0:10:58.040 --> 0:11:01.480 namely the more than six trillion dollars in money market funds. 0:11:01.640 --> 0:11:04.360 A lot of that money came into money market funds 0:11:04.400 --> 0:11:07.360 because the fifth funds rate went up. Now the fifth 0:11:07.360 --> 0:11:09.960 funds rate is going down. So the question is what 0:11:10.080 --> 0:11:11.920 I invest us in money market funds going to do? 0:11:12.520 --> 0:11:16.240 Historically they have gone into other types of fixed income itg. Credit, 0:11:16.400 --> 0:11:19.240 some high yield, maybe some loans. But the question is 0:11:19.320 --> 0:11:20.800 might they even take some of this and put it 0:11:20.840 --> 0:11:23.439 into equities if the fit continues to. 0:11:23.400 --> 0:11:24.280 Lower interest rates? 0:11:24.320 --> 0:11:26.600 In other words, what is the risk willingness of that 0:11:26.679 --> 0:11:28.600 six trillion dollars in money market funds? 0:11:28.720 --> 0:11:29.320 Where do they go? 0:11:29.720 --> 0:11:32.640 Yeah, this is brilliant tours. Just great question because this 0:11:32.760 --> 0:11:36.320 is just the heart of the matter. But it's nonlinear tours. 0:11:36.320 --> 0:11:38.280 And we just had a model. What did you learn 0:11:38.840 --> 0:11:42.920 in the lower interest rate experiment of the last twelve 0:11:43.280 --> 0:11:46.240 Maybe sixteen weeks. What's a lesson you took away? 0:11:46.960 --> 0:11:50.600 Well, I think a lesson is exactly something that we 0:11:50.640 --> 0:11:52.640 can get from what happened for the fourteen years from 0:11:52.640 --> 0:11:54.840 two thousand and eight to twenty twenty two, when interest 0:11:54.920 --> 0:11:58.280 rates were literally at zero. Well, in those situations, when 0:11:58.320 --> 0:12:01.920 we had investors a lot of money that gave much 0:12:01.960 --> 0:12:02.559 lower in. 0:12:02.600 --> 0:12:06.160 Return in rates, they began to chase yield. 0:12:06.520 --> 0:12:09.120 The hunter yield, of course resulted in a rally in 0:12:09.200 --> 0:12:12.400 a broad range of asset classes, and also in this case, 0:12:12.400 --> 0:12:15.400 will likely result when the Fed now embarks on lowering rates. 0:12:15.480 --> 0:12:17.760 What we're debating is to speak with which they're lowering rates, 0:12:17.760 --> 0:12:20.120 not if they're lowering rates. So even if they do 0:12:20.200 --> 0:12:22.600 lower a little bit slower as I would expect, I 0:12:22.640 --> 0:12:23.800 do think that this will. 0:12:23.640 --> 0:12:26.320 Be positive also for credit. It will also be positive 0:12:26.320 --> 0:12:26.959 for equities. 0:12:27.080 --> 0:12:30.080 It'll be positive for asset classes that generally benefit when 0:12:30.080 --> 0:12:32.559 interest rates move to lower levels. But what's most important 0:12:32.600 --> 0:12:35.199 this debate is that we are not going back to zero. 0:12:35.679 --> 0:12:38.840 We will have According to so for futures, the fitfunds 0:12:38.920 --> 0:12:41.199 rate at around three to four percent for the next 0:12:41.240 --> 0:12:43.199 five to seven years, and that does mean that fixed 0:12:43.240 --> 0:12:47.040 income including private credit is looking more attractive because we 0:12:47.160 --> 0:12:49.520 had a very different environment with interest rate for zero 0:12:49.760 --> 0:12:51.640 relative to now we're interest rates are between three and 0:12:51.679 --> 0:12:52.920 four Tourdson Slack. 0:12:53.040 --> 0:12:56.600 Michelle Bowman gets a massive victory lab you grew up 0:12:56.640 --> 0:12:59.240 with the descent of the ECB, the descent of the 0:12:59.280 --> 0:13:02.480 Bank of England, and should we see more Michelle Bowman 0:13:02.720 --> 0:13:04.439 like dissent at the FED. 0:13:05.800 --> 0:13:08.520 I do think that this is a healthy development. Not 0:13:08.640 --> 0:13:12.080 that they shouldn't all agree all the time, but I 0:13:12.120 --> 0:13:14.040 do think that in particular in this instance where we 0:13:14.080 --> 0:13:18.319 are exactly debating will maybe the fifty basis points cut 0:13:18.400 --> 0:13:22.600 which was really justified by a recalibration. Remember j Pal 0:13:22.800 --> 0:13:24.800 mentioned ten times in the press conference that the reason 0:13:24.840 --> 0:13:27.760 why they did this was to recalibrate monetary policy, not 0:13:27.800 --> 0:13:30.200 because the incoming data was weak. I do think that 0:13:30.280 --> 0:13:32.760 there is now a healthy debate among the FFORMC MEM 0:13:32.800 --> 0:13:35.440 which we heard from several of them yesterday, that hey, 0:13:35.520 --> 0:13:37.240 maybe we should go a little bit slower, maybe we 0:13:37.240 --> 0:13:39.280 should watch the data a bit more carefully. And I 0:13:39.320 --> 0:13:42.520 do think that therefore descents are probably more pronounced feature 0:13:42.760 --> 0:13:44.600 of AFMC meetings over the next level. 0:13:44.679 --> 0:13:47.320 Quarters can't wait towisted few to be appointed a governor. 0:13:47.400 --> 0:13:49.480 Mister Slock is with the Powell. Thank you for the 0:13:49.559 --> 0:14:02.800 generous time here. Had an uncle. He is a professor 0:14:02.840 --> 0:14:05.839 at Union College in Schenectady. When my father got angry 0:14:05.880 --> 0:14:08.800 at me, say spell Schenectady, which I never could do. 0:14:09.160 --> 0:14:13.920 Jennifer Lawless Caspell, Schenectady. She survived Winter's there. What was 0:14:13.960 --> 0:14:17.160 it like at Union College a few years ago, Jennifer Lawless. 0:14:18.240 --> 0:14:20.360 It was so many years ago now, but it was 0:14:20.400 --> 0:14:21.400 snowy and cold. 0:14:21.480 --> 0:14:24.680 It was cold, That's what I remember. On the Mohawk River, 0:14:24.800 --> 0:14:27.800 it was mostly called. Jennifer Lawless out of Union and 0:14:28.160 --> 0:14:31.000 of course Stanford and now holding court at the University 0:14:31.040 --> 0:14:36.840 of Virginia. She's absolutely definitive on the female species in 0:14:36.880 --> 0:14:40.600 our political moment, Professor Lawless, How was the Vice President 0:14:40.640 --> 0:14:44.560 of the United States doing and garnering the votes of women? 0:14:46.280 --> 0:14:49.640 She's doing as well as most Democratic candidates do. Most 0:14:49.680 --> 0:14:51.840 people think that when there's a woman at the top 0:14:51.880 --> 0:14:54.680 of the ticket, there's a bigger gender gap, But the 0:14:54.760 --> 0:14:59.080 reality is that female voters tend to prefer Democratic candidates, 0:14:59.360 --> 0:15:02.200 male voters to prefer Republicans, and the sex of the 0:15:02.240 --> 0:15:04.960 candidate doesn't matter that much in terms of vote choice. 0:15:05.040 --> 0:15:08.160 But what Kamala Harris is doing is really motivating women 0:15:08.480 --> 0:15:11.680 to turnout, and ultimately it's likely going to be a 0:15:11.680 --> 0:15:12.360 turnout election. 0:15:12.600 --> 0:15:15.800 Which is the key female turnout? Is it the women 0:15:15.840 --> 0:15:18.640 of the suburbs of Philadelphia and Pittsburgh that we heard 0:15:18.680 --> 0:15:21.680 about two years ago and four years ago or is 0:15:21.680 --> 0:15:24.960 it a different distinction of women that she needs to win. 0:15:26.320 --> 0:15:27.600 I think it's two groups of women. 0:15:27.640 --> 0:15:31.040 It's the suburban women for sure, because in battleground states 0:15:31.040 --> 0:15:35.320 they're often decisive. But it's also motivating young women who 0:15:35.760 --> 0:15:38.040 need to turn out if Harris is going to not 0:15:38.120 --> 0:15:41.440 only build up her popular vote but also secure wins 0:15:41.520 --> 0:15:44.640 in tough states, and young people have traditionally been less 0:15:44.640 --> 0:15:47.400 reliable when it comes to turnout, so anything she can 0:15:47.440 --> 0:15:51.160 do to make sure that young women are enthusiastic will 0:15:51.160 --> 0:15:52.560 be very helpful on election day. 0:15:52.720 --> 0:15:55.000 So which states are going to be most crucial for 0:15:55.240 --> 0:15:57.360 the female vote? 0:15:57.880 --> 0:16:00.560 Well, basically the female vote is really important in all 0:16:00.680 --> 0:16:04.320 states because when the Democrats are able to ensure that 0:16:04.360 --> 0:16:07.480 they have greater margins among women, they tend to win. 0:16:07.680 --> 0:16:09.960 So if she can up the female vote, if she 0:16:10.000 --> 0:16:13.840 can increase her margins on blue wall states like Michigan, Wisconsin, 0:16:13.880 --> 0:16:17.000 in Pennsylvania as well as along the Sun Belt. Those 0:16:17.000 --> 0:16:19.720 are two good paths to victory without a big advantage 0:16:19.720 --> 0:16:21.560 among women, it's hard to see that happening. 0:16:23.040 --> 0:16:25.440 And as far as when it comes to those swing states, 0:16:25.440 --> 0:16:27.400 which ones do you think are most crucial because you're 0:16:27.440 --> 0:16:29.280 named a couple there, But do you think it'll really 0:16:29.360 --> 0:16:30.160 come down to those? 0:16:31.840 --> 0:16:32.240 I do. 0:16:32.640 --> 0:16:36.440 I think without winning Pennsylvania it becomes very, very difficult 0:16:36.520 --> 0:16:39.160 to win the election, especially given the amount of time 0:16:39.200 --> 0:16:41.800 that she's been spending in Pennsylvania, that Walls has been 0:16:41.800 --> 0:16:44.760 spending in Pennsylvania, and Joe Biden's connections to Pennsylvania. 0:16:44.800 --> 0:16:46.320 So I think that's the most important state. 0:16:46.640 --> 0:16:49.400 And if she wins Pennsylvania or plans to win Pennsylvania, 0:16:49.640 --> 0:16:52.280 the easiest path to victory is then through the blue 0:16:52.320 --> 0:16:53.880 wall states of Michigan and Wisconsin. 0:16:54.960 --> 0:16:57.160 I look, Jennifer Loss, I want to go back to 0:16:57.160 --> 0:17:00.840 your core research here, which is so many other countries 0:17:01.040 --> 0:17:04.200 we seem to be very comfortable with women in any 0:17:04.320 --> 0:17:07.080 number of slots, whether a representative, senator, even at the 0:17:07.119 --> 0:17:10.920 local level, is well, you know, the work you've done 0:17:10.960 --> 0:17:15.320 at UVA. Running for office is still for men. How 0:17:15.359 --> 0:17:17.840 did we get there? Why are we distinctive in this? 0:17:19.680 --> 0:17:22.639 It's interesting. It's really a supply problem and not a 0:17:22.640 --> 0:17:24.960 demand problem. And by that I mean that when women 0:17:25.040 --> 0:17:27.880 run for office, they generally fare just as well as men. 0:17:28.000 --> 0:17:30.080 They're just as likely to win their elections, they raise 0:17:30.160 --> 0:17:33.520 just as much money, their media coverage generally looks the same. 0:17:34.040 --> 0:17:36.920 And keep in mind, in twenty sixteen, Hillary Clinton. 0:17:36.600 --> 0:17:39.480 Did win the popular vote, so voters, donors, and the 0:17:39.560 --> 0:17:42.960 media seem okay with women. The problem is that women 0:17:43.000 --> 0:17:45.880 are still significantly less likely than men to emerge as 0:17:45.880 --> 0:17:49.119 candidates and run for office, largely because they perceived that 0:17:49.160 --> 0:17:51.640 there's widespread systematic bias against them. 0:17:51.960 --> 0:17:54.200 And so it's sort of a chicken and egg problem. 0:17:54.320 --> 0:17:56.280 If we don't have enough women out there, we can't 0:17:56.280 --> 0:17:58.800 normalize it for more women to start emerging. 0:17:59.000 --> 0:18:00.720 So what do you think ultimately needs to be done 0:18:00.760 --> 0:18:01.600 in order to fix that? 0:18:03.000 --> 0:18:05.200 Two things. The first is political recruitment. 0:18:05.520 --> 0:18:08.080 When women are encouraged to run for office, either by 0:18:08.080 --> 0:18:11.359 a party leader, elected official, or political activist, but also 0:18:11.480 --> 0:18:14.120 by a family member, colleague, or friend, they're far more 0:18:14.200 --> 0:18:16.440 likely to give it serious thought. And if you don't 0:18:16.440 --> 0:18:18.080 think about something, you're not going to do it. So 0:18:18.119 --> 0:18:20.560 that's an important first step. And the next thing that 0:18:20.600 --> 0:18:23.800 we have to do, I think, is convey the reality 0:18:23.880 --> 0:18:26.520 that when women run, they are just as likely to win. 0:18:26.800 --> 0:18:30.280 We hear high profile stories about gender bias and discrimination 0:18:30.480 --> 0:18:32.600 right all the time, and those things are true and 0:18:32.640 --> 0:18:34.800 they do happen. But part of the reason that they're 0:18:34.840 --> 0:18:36.399 newsworthy is because they're rare. 0:18:36.640 --> 0:18:39.240 Professor Lawless, I believe in the Wall Street Journal today, 0:18:39.240 --> 0:18:41.119 I don't have it in front of me. There was 0:18:41.160 --> 0:18:46.240 a patheartical about Democrats in Michigan basically saying to the 0:18:46.320 --> 0:18:50.320 vice president, let's go lose the media dash and get 0:18:50.400 --> 0:18:53.439 up here in campaign. Where do you stand on that? 0:18:53.600 --> 0:18:57.119 Does a vice president? I mean President Trump has a mode, 0:18:57.240 --> 0:19:00.000 He has a model and he grinds it out every day. 0:19:00.800 --> 0:19:03.000 Is there a mode? Is there a model to Harris 0:19:03.280 --> 0:19:06.520 or does she to shift now? Twenty x days before. 0:19:06.200 --> 0:19:09.840 The election, I think she's got to walk on chew gum. 0:19:10.200 --> 0:19:13.679 We saw in twenty sixteen that Hillary Clinton wasn't campaigning 0:19:13.760 --> 0:19:17.880 as actively as a lot of people thoughts it's and 0:19:17.960 --> 0:19:20.560 turnout wasn't where it needed to be. But We've also 0:19:20.640 --> 0:19:23.920