1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:31,280 Speaker 1: and of course on the Bloomberg terminal Longer going far Away. 6 00:00:31,280 --> 00:00:33,519 Speaker 1: And Bill Dudley has been on fire recently as a 7 00:00:33,560 --> 00:00:37,000 Speaker 1: former president of New York FED. There was Dudley uh 8 00:00:37,000 --> 00:00:40,920 Speaker 1: and McKelvey at Goldben Sacks and had this guy out 9 00:00:40,920 --> 00:00:47,280 Speaker 1: of Germany via Wisconsin, Madison and Oxford and I was like, uh, okay, 10 00:00:47,920 --> 00:00:50,760 Speaker 1: and then he stopped the US market economy world with 11 00:00:50,840 --> 00:00:54,760 Speaker 1: mortgage equity withdrawal. That's how he first came to my attention. 12 00:00:54,800 --> 00:00:57,960 Speaker 1: Yea Nazis has gone on to Acclaim at Golden Sex, 13 00:00:58,080 --> 00:01:01,600 Speaker 1: not only running economics but providing a view over investment 14 00:01:01,680 --> 00:01:05,000 Speaker 1: research for the Acclaimed firm. And we're thrilled he could 15 00:01:05,080 --> 00:01:07,800 Speaker 1: join us today in our studios. Yeah, and I want 16 00:01:07,800 --> 00:01:10,240 Speaker 1: to go right to the time continuum OM investors really 17 00:01:10,240 --> 00:01:13,800 Speaker 1: looking this is well. The X axis out for any 18 00:01:13,880 --> 00:01:17,600 Speaker 1: FED chairman is always a challenge. What's the challenge for 19 00:01:17,680 --> 00:01:20,680 Speaker 1: Chairman Powell right now is he looks out to two 20 00:01:20,720 --> 00:01:24,800 Speaker 1: thousand twenty three. Well, I think there is a number 21 00:01:24,880 --> 00:01:28,640 Speaker 1: of decisions that have to be made before that. When 22 00:01:28,640 --> 00:01:32,080 Speaker 1: do they start to tap our QUEI they've said that 23 00:01:32,120 --> 00:01:35,760 Speaker 1: they are not going to high grates until that process 24 00:01:35,880 --> 00:01:40,040 Speaker 1: has has concluded or that is strongly implied it And 25 00:01:40,319 --> 00:01:43,600 Speaker 1: that's also going to then determine what do you think 26 00:01:43,800 --> 00:01:46,880 Speaker 1: when rates are going to start start rising at the moment, 27 00:01:46,920 --> 00:01:49,400 Speaker 1: as you know, the dot plot is basically saying no 28 00:01:49,600 --> 00:01:52,280 Speaker 1: hikes until the end of two thousand twenty three. But 29 00:01:52,360 --> 00:01:54,200 Speaker 1: that's going to be on the table today and I 30 00:01:54,200 --> 00:01:56,320 Speaker 1: think it's a close call. It's all the best guesses 31 00:01:56,440 --> 00:01:59,360 Speaker 1: that they stick with what they said, with the message 32 00:01:59,400 --> 00:02:01,760 Speaker 1: they're sending, but it could move forward. There's your b 33 00:02:01,800 --> 00:02:05,360 Speaker 1: exlusive banner, folks, HOTSI has predicts boring meeting. Okay, forget 34 00:02:05,360 --> 00:02:07,960 Speaker 1: about that. It's Latin, it's ex anti, it's ex post. 35 00:02:08,280 --> 00:02:11,359 Speaker 1: After the fact, I'm Matt Besler with a really important question. 36 00:02:11,400 --> 00:02:13,679 Speaker 1: Maybe he'll be in the press conference as well. Matt 37 00:02:13,720 --> 00:02:17,480 Speaker 1: Bosler making very very clear that this is about the 38 00:02:17,520 --> 00:02:23,000 Speaker 1: present base effect analysis versus the truly ex post inflation 39 00:02:23,200 --> 00:02:27,240 Speaker 1: expectation game, which is it is this analysis of base 40 00:02:27,280 --> 00:02:31,440 Speaker 1: effect dynamics or is it truly traditional FED analysis of 41 00:02:31,480 --> 00:02:37,680 Speaker 1: inflation expectations? You mean, what what happens into the mystery 42 00:02:37,720 --> 00:02:39,600 Speaker 1: of how we get out there to this in this 43 00:02:39,680 --> 00:02:42,480 Speaker 1: new theory. I think that's going to be driven more 44 00:02:42,600 --> 00:02:46,240 Speaker 1: by what you think about how type the labor market is, 45 00:02:46,440 --> 00:02:50,680 Speaker 1: and really the traditional stuff, the neo charm. Inflation increases 46 00:02:50,760 --> 00:02:54,359 Speaker 1: partly base effect, it's partly reopening effects, and of course 47 00:02:54,360 --> 00:02:59,480 Speaker 1: it's these bottlenecks, which which which which Michael just talked about. Yeah, 48 00:02:59,520 --> 00:03:03,239 Speaker 1: and before we get into just the granularity of inflation, 49 00:03:03,520 --> 00:03:06,639 Speaker 1: I want to understand the granularity of tapering. People talk 50 00:03:06,680 --> 00:03:09,120 Speaker 1: about it as though it's a monolith, and yet is it, 51 00:03:09,240 --> 00:03:12,359 Speaker 1: as Michael Collins said, the FED getting to zero, getting 52 00:03:12,400 --> 00:03:15,440 Speaker 1: to no bond purchases at all before they hike rates. 53 00:03:16,080 --> 00:03:19,280 Speaker 1: That's our assumption. I mean, they haven't said that explicitly, 54 00:03:19,400 --> 00:03:22,280 Speaker 1: but I would guess that they're going to get to 55 00:03:23,120 --> 00:03:26,560 Speaker 1: zero and then there will be some time that will 56 00:03:26,600 --> 00:03:30,799 Speaker 1: elapse before they start moving rates higher. And obviously that's 57 00:03:30,800 --> 00:03:35,200 Speaker 1: going to depend on the data, but I would be 58 00:03:35,280 --> 00:03:38,880 Speaker 1: surprised or not. Maybe shocked, but surprised if they were 59 00:03:38,960 --> 00:03:42,560 Speaker 1: still planning to buy say twenty or forty billion dollars 60 00:03:42,600 --> 00:03:46,440 Speaker 1: per month in perpetuity. It's not our expectations. So yeah, 61 00:03:46,680 --> 00:03:48,840 Speaker 1: I guess I'm kind of struggling with the idea that 62 00:03:48,920 --> 00:03:51,400 Speaker 1: they're buying the Federal Service buying more than a trillion 63 00:03:51,440 --> 00:03:54,720 Speaker 1: dollars a year in its base case for continuing a 64 00:03:54,760 --> 00:03:57,320 Speaker 1: monetary accommodation as it currently is laid out, it's it's 65 00:03:57,360 --> 00:04:02,440 Speaker 1: balance she currently almost eight trillion dollars. It removes this accommodation. 66 00:04:02,720 --> 00:04:04,800 Speaker 1: Do you really see that it's feasible for it to 67 00:04:04,840 --> 00:04:08,080 Speaker 1: do so without disrupting financial markets in a way that 68 00:04:08,200 --> 00:04:12,160 Speaker 1: stymies its effort to ever raise rates. I think there 69 00:04:12,160 --> 00:04:17,080 Speaker 1: could certainly be some hiccups, especially if you're also seeing 70 00:04:17,120 --> 00:04:20,760 Speaker 1: a slowdown in growth next year that's driven by the 71 00:04:20,839 --> 00:04:24,360 Speaker 1: removal of some of the fiscal support. I do think 72 00:04:24,400 --> 00:04:27,400 Speaker 1: that two thousand twenty two is going to be substantially 73 00:04:27,440 --> 00:04:30,640 Speaker 1: slower on a fourth quarter to fourth quarter basis. We 74 00:04:30,680 --> 00:04:33,560 Speaker 1: think basically two and a half percent after a real 75 00:04:33,640 --> 00:04:37,280 Speaker 1: banner year of you know, seven point seven percent Q 76 00:04:37,440 --> 00:04:40,400 Speaker 1: four to Q four in two thousand and twenty one, 77 00:04:40,760 --> 00:04:43,440 Speaker 1: and So if that interacts with an environment in which 78 00:04:43,480 --> 00:04:46,919 Speaker 1: the FED is is tapering bond purchases, you know, I 79 00:04:46,960 --> 00:04:49,440 Speaker 1: think that could result in a in a growth scare. Yes, 80 00:04:49,640 --> 00:04:52,640 Speaker 1: I do think we probably are going to have some 81 00:04:52,680 --> 00:04:55,039 Speaker 1: nervousness in that environment. Well, let's talk a little bit 82 00:04:55,080 --> 00:04:57,440 Speaker 1: more about some of the fiscal policies here, yeh, Because 83 00:04:57,480 --> 00:05:00,080 Speaker 1: I mean, obviously there's a multi chillion dollar propos z 84 00:05:00,120 --> 00:05:02,320 Speaker 1: all down at Washington sitting on someone's desk. It may 85 00:05:02,320 --> 00:05:04,440 Speaker 1: not go anywhere, or it may end up being a 86 00:05:04,440 --> 00:05:07,120 Speaker 1: lot smaller than, of course what the President proposed. But 87 00:05:07,160 --> 00:05:09,240 Speaker 1: I'm wondering how much of that has to factor in 88 00:05:09,320 --> 00:05:11,720 Speaker 1: right now to the glide path at the FIT is 89 00:05:11,720 --> 00:05:15,320 Speaker 1: trying to chart out here. So I think the baseline 90 00:05:15,360 --> 00:05:18,760 Speaker 1: should be that something gets past, maybe not the whole thing, 91 00:05:18,920 --> 00:05:23,080 Speaker 1: but something large in terms of the headline number. But 92 00:05:23,160 --> 00:05:25,440 Speaker 1: I think the key point is that this is a 93 00:05:25,560 --> 00:05:29,320 Speaker 1: very different type of spending program relative to the American 94 00:05:29,320 --> 00:05:33,000 Speaker 1: Rescue Plan Act that was very front loaded one point 95 00:05:33,120 --> 00:05:36,360 Speaker 1: nine trillion dollars basically over a year or a little 96 00:05:36,360 --> 00:05:40,280 Speaker 1: over a year, whereas this, uh, this this plan is 97 00:05:40,279 --> 00:05:42,799 Speaker 1: going to be over ten years or whatever number you see. 98 00:05:43,200 --> 00:05:45,240 Speaker 1: You have to divide them by ten and that's still 99 00:05:45,240 --> 00:05:48,400 Speaker 1: going to me in a significant amount of fiscal drag 100 00:05:48,480 --> 00:05:51,080 Speaker 1: in two thousand and twenty two. Right, that's a great point. 101 00:05:51,080 --> 00:05:52,760 Speaker 1: It also means, of course, there's still got to be 102 00:05:52,839 --> 00:05:56,360 Speaker 1: some additional treasury issuance. It does mean, of course there's 103 00:05:56,400 --> 00:05:59,400 Speaker 1: a potential here for changes in tax policy as well. 104 00:05:59,480 --> 00:06:01,360 Speaker 1: Yeahn how do you factor that in? I think that 105 00:06:01,800 --> 00:06:05,200 Speaker 1: strengthens that point that it's not going to be as 106 00:06:05,279 --> 00:06:09,040 Speaker 1: stimulative because, as you say, a significant part of the 107 00:06:09,120 --> 00:06:13,599 Speaker 1: spending increase is going to be offset by tax increases. 108 00:06:14,080 --> 00:06:16,400 Speaker 1: And you know, I think it would be somewhat simulative, 109 00:06:16,920 --> 00:06:19,320 Speaker 1: but you know, much less so than the than the 110 00:06:19,360 --> 00:06:23,080 Speaker 1: headline number, both because of the tenure horizon and because 111 00:06:23,120 --> 00:06:26,200 Speaker 1: of the tax increases. I'm Bloomberg Radio and Bloomberg Television worldwide. 112 00:06:26,279 --> 00:06:29,760 Speaker 1: Yeh us with us with Golden sex Or, chief economist 113 00:06:29,760 --> 00:06:32,480 Speaker 1: and head of investment Research on this day before an 114 00:06:32,520 --> 00:06:35,960 Speaker 1: important FED meeting. Young. Your your statistics there on the 115 00:06:36,000 --> 00:06:38,919 Speaker 1: slowing of the American economy under three percent is really 116 00:06:38,960 --> 00:06:42,120 Speaker 1: really important. I would suggest a huge body of Americans 117 00:06:42,320 --> 00:06:45,080 Speaker 1: are not prepared for that. If we slow from a 118 00:06:45,120 --> 00:06:50,000 Speaker 1: boom to a hot CEUs under three economy. We've never 119 00:06:50,200 --> 00:06:52,560 Speaker 1: done that before. I mean, you and I remember the 120 00:06:52,800 --> 00:06:57,440 Speaker 1: we've studied the fifties yearly fifties deflation. Do you anticipate 121 00:06:57,560 --> 00:07:01,279 Speaker 1: such a shock there in GDP dynamics that we could 122 00:07:01,360 --> 00:07:05,800 Speaker 1: get to a deflationary dynamic that Eisenhower new? I don't 123 00:07:05,920 --> 00:07:10,040 Speaker 1: view it so negatively. I mean the right now, we're 124 00:07:10,080 --> 00:07:13,600 Speaker 1: still a long ways away from full employment. There's still 125 00:07:13,640 --> 00:07:15,800 Speaker 1: a lot of slack in the in the labor market. 126 00:07:16,200 --> 00:07:21,360 Speaker 1: Despite the near term labor supply issues and strong growth 127 00:07:21,400 --> 00:07:23,520 Speaker 1: this year is going to get to get us to 128 00:07:24,080 --> 00:07:27,160 Speaker 1: something like full employment by two thousand and twenty two. 129 00:07:27,360 --> 00:07:30,920 Speaker 1: At that point, you want to see slower growth because 130 00:07:30,960 --> 00:07:33,800 Speaker 1: otherwise the economy is going to overheat. You do have 131 00:07:33,840 --> 00:07:38,320 Speaker 1: to worry a lot more about persistent inflation, and ultimately 132 00:07:38,440 --> 00:07:40,880 Speaker 1: that's not going to be a good environment. So I 133 00:07:40,880 --> 00:07:43,240 Speaker 1: think you'll need to see a slowdown. I don't worry 134 00:07:43,240 --> 00:07:45,800 Speaker 1: about deflation, but at the same time, I think the 135 00:07:45,840 --> 00:07:49,200 Speaker 1: current inflation is probably largely transfer so much as a 136 00:07:49,280 --> 00:07:52,320 Speaker 1: new economy in the overlay of technology on it. We 137 00:07:52,360 --> 00:07:57,200 Speaker 1: partition it into goods dynamics inflation and service dynamic inflation. 138 00:07:57,600 --> 00:08:00,560 Speaker 1: Parts the difference now is we look at a service 139 00:08:00,600 --> 00:08:04,840 Speaker 1: sector dominant and goods producing as well, those inflation dynamics 140 00:08:04,880 --> 00:08:09,640 Speaker 1: for our inflation expectations. Well, I think the surprise in 141 00:08:09,720 --> 00:08:12,480 Speaker 1: two thousand and twenty one really has been on the 142 00:08:12,520 --> 00:08:17,120 Speaker 1: good side. The acceleration and COVID sensitive sectors, that was 143 00:08:17,240 --> 00:08:20,720 Speaker 1: very much expected. The base effects were very much expected. 144 00:08:21,080 --> 00:08:23,480 Speaker 1: I think six months ago most economists would have been 145 00:08:23,480 --> 00:08:27,200 Speaker 1: really surprised with the enormous surge in used car prices 146 00:08:27,240 --> 00:08:30,760 Speaker 1: and other other durable goods like that, and that's really 147 00:08:30,800 --> 00:08:34,640 Speaker 1: been been the key driver. They are outliers relative to 148 00:08:34,679 --> 00:08:39,840 Speaker 1: the overall distribution of prices. Core PC is above three percent, 149 00:08:40,000 --> 00:08:42,840 Speaker 1: probably will be above three percent for most of the 150 00:08:42,840 --> 00:08:46,080 Speaker 1: rest of the year. But the if you if you 151 00:08:46,120 --> 00:08:49,640 Speaker 1: look at trim mean measures or median measures that really 152 00:08:49,679 --> 00:08:53,800 Speaker 1: capture more the distribution of prices, those are still pretty 153 00:08:53,800 --> 00:08:58,720 Speaker 1: well behaved. So to me, that that screams uh, screams transitory. 154 00:08:58,840 --> 00:09:00,960 Speaker 1: What about wages? That way just have been going up 155 00:09:01,000 --> 00:09:04,040 Speaker 1: in particular sectors that have been more in demand, especially 156 00:09:04,120 --> 00:09:07,560 Speaker 1: with the reopening husticky is that well, I think we've 157 00:09:07,559 --> 00:09:11,240 Speaker 1: seen wage increases, especially at the bottom end of the 158 00:09:11,240 --> 00:09:15,640 Speaker 1: pay scale leisure and hospitality in particular. I think the 159 00:09:16,440 --> 00:09:22,760 Speaker 1: evidence suggests that the remaining COVID effects around fear of 160 00:09:22,840 --> 00:09:27,120 Speaker 1: the pandemic, and maybe it's some childcare issues, but also 161 00:09:27,640 --> 00:09:32,640 Speaker 1: the three dollar unemployment top up have weighed on labor supply. 162 00:09:33,440 --> 00:09:36,040 Speaker 1: That's going to be true probably for a few months longer, 163 00:09:36,160 --> 00:09:38,240 Speaker 1: but in the fall, I think we'll see a big 164 00:09:38,280 --> 00:09:41,240 Speaker 1: increase in labor supply, and I think that's also probably 165 00:09:41,240 --> 00:09:44,520 Speaker 1: going to lead to reduced wage increases in some of 166 00:09:44,520 --> 00:09:47,319 Speaker 1: these sectors. Jhanna, we've got a headline at the FENS. J. 167 00:09:47,440 --> 00:09:51,120 Speaker 1: Powell is planning to discuss the pandemic emergency lending program 168 00:09:51,120 --> 00:09:53,880 Speaker 1: as well as the economic recovery at a House hearing 169 00:09:53,960 --> 00:09:57,280 Speaker 1: on June twenty two. I am wondering about how concerned 170 00:09:57,320 --> 00:10:00,840 Speaker 1: you are about the increasingly political nature of the Federal Reserve, 171 00:10:00,960 --> 00:10:02,760 Speaker 1: not saying that they are political, but that they're getting 172 00:10:02,800 --> 00:10:06,720 Speaker 1: increasing pressure to be political to finance the US debt 173 00:10:07,000 --> 00:10:10,360 Speaker 1: and deficit, especially as the US plans to increase its 174 00:10:10,360 --> 00:10:15,840 Speaker 1: deficit by so much. I think the there's always been 175 00:10:16,080 --> 00:10:21,800 Speaker 1: political pressure and Congress congressional oversight, and you know, obviously 176 00:10:22,200 --> 00:10:25,320 Speaker 1: jaw boning of Fed officials. I mean, if you go 177 00:10:25,400 --> 00:10:28,720 Speaker 1: back to President Trump, there was a lot more overt 178 00:10:29,240 --> 00:10:32,680 Speaker 1: pressure on the FED than than what we're seeing now. 179 00:10:32,720 --> 00:10:36,160 Speaker 1: I think now we're more in a more normal historical 180 00:10:36,280 --> 00:10:40,960 Speaker 1: environment where there was always, you know, always hearings like 181 00:10:41,040 --> 00:10:46,080 Speaker 1: this and strong opinions expressed. But in the end, I 182 00:10:46,120 --> 00:10:49,640 Speaker 1: think the FED is committed to the to the mandate, 183 00:10:49,679 --> 00:10:52,680 Speaker 1: and the mandate obviously looks somewhat different now after the 184 00:10:53,440 --> 00:10:56,360 Speaker 1: after the changes of last summer, but I don't think 185 00:10:56,400 --> 00:10:58,720 Speaker 1: it's a dramatically different from where we've been over the 186 00:10:58,760 --> 00:11:01,360 Speaker 1: long term. Well, but at least his point as well, though, 187 00:11:01,400 --> 00:11:03,160 Speaker 1: it's sort of the shift in that mandate, or at 188 00:11:03,200 --> 00:11:05,320 Speaker 1: least the tweaking of it, does sort of open the 189 00:11:05,360 --> 00:11:07,760 Speaker 1: door for greater criticism here. As much as a fit 190 00:11:08,000 --> 00:11:10,920 Speaker 1: will will, of course try to remain independent and preserve 191 00:11:11,200 --> 00:11:14,880 Speaker 1: the perceptions of independence here, does the political landscape shift 192 00:11:15,000 --> 00:11:20,040 Speaker 1: enough here, Yan or maybe that undermines some of the messaging. Look, 193 00:11:20,080 --> 00:11:24,079 Speaker 1: I think the way that the mandate is being interpreted 194 00:11:24,480 --> 00:11:27,960 Speaker 1: looks a little different. I think for for good reasons, 195 00:11:28,360 --> 00:11:31,320 Speaker 1: it does make sense to try to average two percent. 196 00:11:31,480 --> 00:11:34,439 Speaker 1: I don't think one point seven percent, which was the 197 00:11:34,480 --> 00:11:38,120 Speaker 1: average before, is drammatically different from from two percent, So 198 00:11:38,160 --> 00:11:40,760 Speaker 1: I don't think it's a it's a massive shift. But 199 00:11:41,160 --> 00:11:45,560 Speaker 1: I do think that the changes that took place last 200 00:11:45,600 --> 00:11:50,120 Speaker 1: summer at Jackson Hole, you know, do make sense. Is 201 00:11:50,200 --> 00:11:53,880 Speaker 1: that going to be something that will you know, maybe 202 00:11:53,960 --> 00:11:58,600 Speaker 1: raise more more questions, uh, and including questions from from 203 00:11:58,600 --> 00:12:03,320 Speaker 1: policymakers on and electric officials. Probably, But I do think 204 00:12:03,360 --> 00:12:08,440 Speaker 1: the the mandate is reasonably clear and we, you know, 205 00:12:08,559 --> 00:12:11,760 Speaker 1: should over time find out more about exactly how it 206 00:12:11,800 --> 00:12:14,880 Speaker 1: gets interpreted. NAIs, thank you for joining us today, greatly 207 00:12:14,920 --> 00:12:24,000 Speaker 1: appreciate it. With Golden sex, very generous conversation here right now. 208 00:12:24,040 --> 00:12:27,360 Speaker 1: We are absolutely honored to bring it from the Cannon Institute, 209 00:12:27,440 --> 00:12:31,640 Speaker 1: their deputy director, William Palmerans in the United States of America. 210 00:12:31,760 --> 00:12:35,880 Speaker 1: He is truly our expert on law in Russia, truly 211 00:12:35,920 --> 00:12:38,559 Speaker 1: going back to Peter the Great in his important book 212 00:12:38,559 --> 00:12:41,920 Speaker 1: of a few years ago. Professor Palmerence, thank you so 213 00:12:42,000 --> 00:12:44,680 Speaker 1: much for joining us today. If you were to write 214 00:12:44,720 --> 00:12:49,000 Speaker 1: a long telegram from Geneva today about this summit, what 215 00:12:49,120 --> 00:12:51,680 Speaker 1: would you say or is there not enough to say? 216 00:12:51,920 --> 00:12:56,240 Speaker 1: So it would be a Pomerans short telegram. I think 217 00:12:56,240 --> 00:12:59,040 Speaker 1: it would be a very short telegram because we still 218 00:12:59,080 --> 00:13:01,800 Speaker 1: need to see what actually the two leaders agree upon. 219 00:13:02,720 --> 00:13:07,400 Speaker 1: We don't have any preliminary agreements, we have any preliminary agenda. 220 00:13:07,880 --> 00:13:10,880 Speaker 1: So I think a lot will depend on the communication 221 00:13:10,960 --> 00:13:14,320 Speaker 1: between the two leaders and what comes out of this meeting. UH. 222 00:13:14,400 --> 00:13:18,440 Speaker 1: It is much heightened. It is recognized that the relations 223 00:13:18,480 --> 00:13:20,920 Speaker 1: between the United States and Russia are at a low 224 00:13:20,960 --> 00:13:24,960 Speaker 1: ebb um. But this is not the Cold War. I 225 00:13:25,040 --> 00:13:29,600 Speaker 1: don't anticipate Mr Putin arriving like Mr Gobatrov and UH 226 00:13:29,840 --> 00:13:32,719 Speaker 1: aving a surprise. I think it will be a business like, 227 00:13:32,960 --> 00:13:36,360 Speaker 1: work in like meeting. UH. They'll agree to disagree on 228 00:13:36,400 --> 00:13:39,000 Speaker 1: a lot of things, and they'll try to see where 229 00:13:39,040 --> 00:13:43,600 Speaker 1: they can cooperate. Professor Primary, it's very importantly here and 230 00:13:43,679 --> 00:13:46,760 Speaker 1: I think of the Soviet Union. How much of the 231 00:13:46,880 --> 00:13:52,520 Speaker 1: Soviet Union tone or diplomacy is represented by Mr Putin 232 00:13:52,920 --> 00:13:56,640 Speaker 1: or is Russia completely moved on from the legacy that 233 00:13:56,720 --> 00:14:01,480 Speaker 1: you're expert in. I think that the deemer Putin does 234 00:14:01,559 --> 00:14:06,000 Speaker 1: have certain Soviet tendencies. UH. In terms of international relations. 235 00:14:06,400 --> 00:14:10,319 Speaker 1: He is not interested in joining the global order as 236 00:14:10,360 --> 00:14:14,840 Speaker 1: it were. UH. He is interested in sovereignty and Russia's 237 00:14:14,880 --> 00:14:20,280 Speaker 1: ability to x to UH, to a certain sovereignty in 238 00:14:20,480 --> 00:14:24,680 Speaker 1: domestically and overseas. So I think that this is really 239 00:14:24,920 --> 00:14:29,520 Speaker 1: the important aspect of Putin's foreign policy. UH. It's not 240 00:14:29,720 --> 00:14:33,600 Speaker 1: overly ideological. UH. It is just to make sure that 241 00:14:33,800 --> 00:14:37,520 Speaker 1: Russia is respected and has its sphere of influence. And 242 00:14:37,560 --> 00:14:41,000 Speaker 1: this is not only a Soviet tendency. This goes back 243 00:14:41,440 --> 00:14:45,560 Speaker 1: hundreds of years. William. Before this summit, a President Biden 244 00:14:45,600 --> 00:14:48,400 Speaker 1: met with the allies and asked for their input about 245 00:14:48,480 --> 00:14:51,560 Speaker 1: how to handle this meeting. I'm wondering how much is 246 00:14:51,600 --> 00:14:54,040 Speaker 1: Biden talking to Vladimir Putin and how much is he 247 00:14:54,120 --> 00:14:57,240 Speaker 1: talking to the allies in terms of supporting how they 248 00:14:57,280 --> 00:15:01,320 Speaker 1: want their relationship with Russia to develop. I think coming 249 00:15:01,320 --> 00:15:05,000 Speaker 1: out of the EU and the NATO summit, we have 250 00:15:05,160 --> 00:15:08,480 Speaker 1: seen a resurgence in the role of the United States 251 00:15:08,480 --> 00:15:11,360 Speaker 1: of the global leader, and its ability to talk and 252 00:15:11,400 --> 00:15:15,520 Speaker 1: communicate with its allies. So I think that going into 253 00:15:15,560 --> 00:15:20,920 Speaker 1: this UH the summit, UH, President Biden has listened to 254 00:15:20,960 --> 00:15:25,840 Speaker 1: his allies. There were some important achievements UH out of 255 00:15:25,880 --> 00:15:29,000 Speaker 1: the EU and NATO summits, both in terms of dealing 256 00:15:29,080 --> 00:15:32,440 Speaker 1: with China and with dealing with Russia. And I think 257 00:15:32,600 --> 00:15:37,400 Speaker 1: that one of the real victories forged Joseph Biden happened 258 00:15:37,400 --> 00:15:40,760 Speaker 1: before the summit with Putin, and that is that he 259 00:15:40,920 --> 00:15:46,880 Speaker 1: reasserted global leadership and reasserted the relationship and with with 260 00:15:46,880 --> 00:15:50,680 Speaker 1: with our traditional allies. William we are expecting President Biden 261 00:15:50,720 --> 00:15:53,920 Speaker 1: to arrive at this summit any minute, his motorcade on 262 00:15:53,960 --> 00:15:57,120 Speaker 1: the way. There is a question though President Biden is 263 00:15:57,160 --> 00:16:02,560 Speaker 1: toggling between a harder stance that domesticly is politically popular 264 00:16:02,760 --> 00:16:06,760 Speaker 1: and then internationally is much more delicate. Given some of 265 00:16:06,800 --> 00:16:10,480 Speaker 1: the trade relationships between Europe and Russia, and given the 266 00:16:10,560 --> 00:16:15,440 Speaker 1: geographic proximity of those regions. How is President Biden toggling this? 267 00:16:15,600 --> 00:16:19,240 Speaker 1: How much has the European view and frankly the US 268 00:16:19,440 --> 00:16:24,120 Speaker 1: domestic political vision of Russia having a hardening line diverging 269 00:16:24,200 --> 00:16:29,320 Speaker 1: at this point? I think leading up to the summit UH, 270 00:16:29,480 --> 00:16:37,160 Speaker 1: President Biden has uh given Europe a tremendous victory in 271 00:16:37,200 --> 00:16:39,600 Speaker 1: the sense that we have the United States is not 272 00:16:39,720 --> 00:16:43,000 Speaker 1: going to sanction the owners of the North Stream to 273 00:16:43,200 --> 00:16:46,160 Speaker 1: pipeline and that that is now going to most likely 274 00:16:46,240 --> 00:16:50,160 Speaker 1: be completed. So in terms of listening to the United 275 00:16:50,240 --> 00:16:55,200 Speaker 1: States and the European allies, I think President Biden has said, 276 00:16:55,640 --> 00:17:01,760 Speaker 1: has demonstrated that he wants this relationship ship with our 277 00:17:01,800 --> 00:17:06,560 Speaker 1: European allies, and he has decided that that is acceptable, 278 00:17:06,920 --> 00:17:10,000 Speaker 1: even to the point of not fulfilling Congresses wishes to 279 00:17:10,240 --> 00:17:13,280 Speaker 1: sanction owners of the North Stream two pipeline. So I 280 00:17:13,320 --> 00:17:18,000 Speaker 1: think listening to European leaders, I think that they're trying 281 00:17:18,000 --> 00:17:22,040 Speaker 1: to present the United Front. It's always difficult to unify 282 00:17:22,359 --> 00:17:26,680 Speaker 1: Europe on foreign policy issues, but I think President Biden 283 00:17:26,720 --> 00:17:29,560 Speaker 1: went a long way to healing the riffs that occurred 284 00:17:29,640 --> 00:17:33,080 Speaker 1: during the Trump administration. Absolutely, And of course William though, 285 00:17:33,119 --> 00:17:35,359 Speaker 1: I mean, we've been here before. We're actually watching on 286 00:17:35,480 --> 00:17:38,320 Speaker 1: screen right now. I believe that is the motorcada of 287 00:17:38,560 --> 00:17:42,240 Speaker 1: President Biden working its way through Geneva here, Uh Biden 288 00:17:42,320 --> 00:17:44,320 Speaker 1: of Coors going into this meeting. But of course we've 289 00:17:44,359 --> 00:17:48,160 Speaker 1: been here before, here with Trump, with Obama, with Bush. 290 00:17:48,200 --> 00:17:50,240 Speaker 1: There's been a lot of attempts to sort of restart 291 00:17:50,280 --> 00:17:53,760 Speaker 1: re kick off the relationship between the US and Russia. Here, 292 00:17:54,280 --> 00:17:57,080 Speaker 1: is there any reason why outside observers looking at this 293 00:17:57,080 --> 00:17:59,879 Speaker 1: should be more hopeful that this time around the outcome 294 00:18:00,080 --> 00:18:04,000 Speaker 1: going to be different. In one word, now, um, I 295 00:18:04,040 --> 00:18:07,439 Speaker 1: think President Putin has decided to go it alone in 296 00:18:07,560 --> 00:18:13,960 Speaker 1: terms of international um for policy and geopolitical objectives. UH. 297 00:18:14,000 --> 00:18:16,080 Speaker 1: So I think that there is not going to be 298 00:18:16,119 --> 00:18:21,040 Speaker 1: a reset or anything like that. And Biden has asserted 299 00:18:21,480 --> 00:18:24,520 Speaker 1: that he's not looking for a reset. UH. We are 300 00:18:24,600 --> 00:18:27,840 Speaker 1: looking for ways to which to tone down the rhetoric. 301 00:18:28,640 --> 00:18:32,240 Speaker 1: We are trying to identify areas where we can cooperate, 302 00:18:32,880 --> 00:18:35,119 Speaker 1: which sounds like the reset. But I don't think his 303 00:18:35,200 --> 00:18:40,280 Speaker 1: ambitious as a reset. I don't think that President Putin 304 00:18:40,800 --> 00:18:43,399 Speaker 1: UH is going to change his political stripes and his 305 00:18:43,520 --> 00:18:47,560 Speaker 1: geo political goals. UH. He has a go at alone strategy. 306 00:18:48,000 --> 00:18:54,600 Speaker 1: He and he has asserted that both politically, geopolitically and UH. 307 00:18:54,680 --> 00:18:59,680 Speaker 1: He has introduced various policies such as import substitution UH 308 00:18:59,720 --> 00:19:03,840 Speaker 1: say acians UH, counter sanctions on food, on food, et cetera. 309 00:19:04,640 --> 00:19:08,200 Speaker 1: That suggests that he's not interested in becoming part of 310 00:19:08,280 --> 00:19:12,439 Speaker 1: the international global order. That Russia really believes that it 311 00:19:12,520 --> 00:19:16,480 Speaker 1: needs to go it alone, and that is UM. That 312 00:19:16,680 --> 00:19:21,679 Speaker 1: is the policy of the demur Putin. Well, let me 313 00:19:21,760 --> 00:19:24,280 Speaker 1: reset here. Mr Palmeranson will come back to you in 314 00:19:24,280 --> 00:19:28,040 Speaker 1: a moment. On radio and television. We we sat this morning. 315 00:19:28,040 --> 00:19:30,720 Speaker 1: We welcome all of you worldwide and across this nation. 316 00:19:30,760 --> 00:19:34,680 Speaker 1: William Palmerance with us with the Kennon Institute, their deputy director, 317 00:19:34,760 --> 00:19:37,880 Speaker 1: absolutely honored that he could give us perspective here this 318 00:19:37,960 --> 00:19:42,240 Speaker 1: morning on television the nineteenth century actually eighteenth century building, 319 00:19:42,320 --> 00:19:46,199 Speaker 1: Villa Lagrange, where Mr Putin awaits the arrival of the 320 00:19:46,240 --> 00:19:50,280 Speaker 1: President of the United States and rude. My major observation 321 00:19:50,400 --> 00:19:52,879 Speaker 1: is the US motorcave was maybe going at a faster 322 00:19:52,960 --> 00:19:58,879 Speaker 1: speed than the Russian motorc Yeah, Professor palmerans, Um, I 323 00:19:58,920 --> 00:20:02,160 Speaker 1: think very important. Only here is what we've observed over 324 00:20:02,200 --> 00:20:05,400 Speaker 1: the last number of days and many John Muirscheimer, Chicago. 325 00:20:05,560 --> 00:20:09,240 Speaker 1: Richard has at the Council on Foreign Relations suggesting a 326 00:20:09,359 --> 00:20:14,159 Speaker 1: NATO overreach. Did NATO reset in the last number of 327 00:20:14,280 --> 00:20:18,879 Speaker 1: days their overreach of adding countries over the recent end 328 00:20:18,920 --> 00:20:22,200 Speaker 1: of Cold War years? Was there a reset Tornato which 329 00:20:22,240 --> 00:20:26,200 Speaker 1: could be in discussion today? Um, I don't think there's 330 00:20:26,200 --> 00:20:30,600 Speaker 1: a reset to NATO. Obviously there is the addition in 331 00:20:30,640 --> 00:20:34,639 Speaker 1: the communication of dealing with China, although there isn't really 332 00:20:35,000 --> 00:20:38,679 Speaker 1: overwhelming agreement on how that should be done. So I 333 00:20:38,760 --> 00:20:42,679 Speaker 1: don't think that we've had overreach uh in NATO. The 334 00:20:42,720 --> 00:20:45,439 Speaker 1: second important reason why I don't think we have overreach 335 00:20:46,040 --> 00:20:51,120 Speaker 1: is that President Biden yesterday issued a very strong statement 336 00:20:51,560 --> 00:20:56,960 Speaker 1: that NATO is not going to have Ukraine joined it 337 00:20:57,000 --> 00:21:01,040 Speaker 1: anytime soon. That Ukraine has to deal with it's domestic policies, 338 00:21:01,320 --> 00:21:03,840 Speaker 1: it has to deal with corruption before it gets an 339 00:21:03,840 --> 00:21:07,800 Speaker 1: action plan before it becomes a part of NATO, and 340 00:21:07,840 --> 00:21:12,000 Speaker 1: that is an important objective of the deemer Putin. Putin 341 00:21:12,119 --> 00:21:15,320 Speaker 1: does not want Ukraine to become a member of NATO. 342 00:21:15,560 --> 00:21:19,280 Speaker 1: Uh and it appears now that Ukraine won't anytime soon 343 00:21:19,480 --> 00:21:23,880 Speaker 1: become a member. So I don't see overreach. I see 344 00:21:23,920 --> 00:21:27,720 Speaker 1: trying to deal with a post Cold War world. We're 345 00:21:27,760 --> 00:21:30,880 Speaker 1: trying to play a bigger role. But I don't see 346 00:21:30,920 --> 00:21:33,960 Speaker 1: that we're over that NATO is overreaching, And I think 347 00:21:33,960 --> 00:21:36,640 Speaker 1: the best evidence of that is that it's going very 348 00:21:36,680 --> 00:21:40,760 Speaker 1: slow in terms of inviting Ukraine to become a member. 349 00:21:40,880 --> 00:21:43,800 Speaker 1: President Biden pulling up to Villa Grange and waiting here 350 00:21:43,800 --> 00:21:47,000 Speaker 1: the Swiss authorities of waiting to greet the President of 351 00:21:47,040 --> 00:21:49,360 Speaker 1: the United States, and I believe in side Mr Putin, 352 00:21:49,359 --> 00:21:52,000 Speaker 1: and we'll get an image of the two leaders here 353 00:21:52,000 --> 00:21:54,720 Speaker 1: in a number of minutes. William Pomer It's just so 354 00:21:54,800 --> 00:21:58,359 Speaker 1: importantly to any of us is this word that the 355 00:21:58,400 --> 00:22:02,080 Speaker 1: President of the United States you his autocrat. When we 356 00:22:02,119 --> 00:22:04,480 Speaker 1: see that within the media, when we see that within 357 00:22:04,800 --> 00:22:09,080 Speaker 1: international relations, how do you define the autocrat that Joseph 358 00:22:09,080 --> 00:22:13,480 Speaker 1: Biden sees. I think that when we talk about an autocrat, 359 00:22:13,520 --> 00:22:16,840 Speaker 1: and especially in the Russian sense, we deal with a 360 00:22:16,960 --> 00:22:22,320 Speaker 1: leader who doesn't have to address uh domestic politics as 361 00:22:22,359 --> 00:22:26,520 Speaker 1: a word, that Putin's word is the final word. Now, 362 00:22:26,560 --> 00:22:28,720 Speaker 1: he has different issues that he has to deal with, 363 00:22:29,480 --> 00:22:33,760 Speaker 1: but he doesn't have a legislature that is opposed to him. 364 00:22:33,800 --> 00:22:37,159 Speaker 1: He doesn't have a judiciary that overrules him. Indeed, in 365 00:22:37,200 --> 00:22:42,640 Speaker 1: the aftermath of all the constitutional amendments, this Putin has 366 00:22:42,680 --> 00:22:46,920 Speaker 1: solidified his power. So when we talk about an autocrat, 367 00:22:47,320 --> 00:22:50,639 Speaker 1: it's someone who doesn't have to really deal with the 368 00:22:51,840 --> 00:22:58,360 Speaker 1: vicstitudes of politics. Power is is always in the hands 369 00:22:58,480 --> 00:23:03,200 Speaker 1: of the autocrat, and in Russia's case, uh Putin's degrees, 370 00:23:03,359 --> 00:23:07,680 Speaker 1: Putin's word can become law. So this is obviously very 371 00:23:07,720 --> 00:23:12,600 Speaker 1: different from the American system of checks and balances and 372 00:23:12,800 --> 00:23:16,520 Speaker 1: and separation of powers. But this is what the advantage 373 00:23:16,520 --> 00:23:20,239 Speaker 1: of ladieber Putin is. He doesn't have to address Congress Uh, 374 00:23:20,359 --> 00:23:26,720 Speaker 1: he doesn't have to address other consistencies. His word becomes law. 375 00:23:28,440 --> 00:23:30,960 Speaker 1: William palmerans thank you this morning for joining us with 376 00:23:31,040 --> 00:23:34,320 Speaker 1: the Kennon Institute. Just a spectacular brief there on this 377 00:23:34,400 --> 00:23:45,040 Speaker 1: moment for Russia and the United States right now with 378 00:23:45,119 --> 00:23:47,840 Speaker 1: global strategy off of this moment and certainly off the 379 00:23:47,840 --> 00:23:51,200 Speaker 1: FED moment. This afternoon, we're thrilled that Brian Levin could 380 00:23:51,240 --> 00:23:55,480 Speaker 1: join us. He's with Investco and their global market strategist. Brian, 381 00:23:55,560 --> 00:23:57,480 Speaker 1: just a perfect day to speak to you as well. 382 00:23:57,880 --> 00:24:02,560 Speaker 1: How does Investco reset it midyear? I don't know if 383 00:24:02,600 --> 00:24:05,240 Speaker 1: we necessarily reset. I mean, I think the reality is 384 00:24:05,240 --> 00:24:08,240 Speaker 1: it's an economy that's starting to move from recovery into 385 00:24:08,280 --> 00:24:12,080 Speaker 1: an expansion phase. So from the large story, a better 386 00:24:12,200 --> 00:24:15,280 Speaker 1: economic backdrop of FED that's on hold, it's still an 387 00:24:15,359 --> 00:24:18,320 Speaker 1: environment that you want to favor stocks over bonds, you 388 00:24:18,359 --> 00:24:20,480 Speaker 1: want to favor credit over treasuries. I think to the 389 00:24:20,520 --> 00:24:24,520 Speaker 1: extent that you reset in an expansion phase is that 390 00:24:24,840 --> 00:24:27,040 Speaker 1: you start to see more of the growth oriented parts 391 00:24:27,040 --> 00:24:30,040 Speaker 1: of the market participate again. And so we had this 392 00:24:30,160 --> 00:24:33,840 Speaker 1: pretty big value move, uh, from the fall of last 393 00:24:33,920 --> 00:24:35,800 Speaker 1: year at the beginning of this year, and I think 394 00:24:35,800 --> 00:24:39,040 Speaker 1: that continues in an improving economic backdrop, but you tend 395 00:24:39,080 --> 00:24:41,880 Speaker 1: to see in the expansion phase your big growth stocks 396 00:24:41,960 --> 00:24:44,399 Speaker 1: also start to perform quite well. Bryan, it will be 397 00:24:44,440 --> 00:24:47,160 Speaker 1: a bigger surprise to markets today if the Fed does 398 00:24:47,200 --> 00:24:49,959 Speaker 1: not bring forward their rate high expectations based on the 399 00:24:50,000 --> 00:24:56,879 Speaker 1: dots to three, or if the Fed does. I think 400 00:24:56,920 --> 00:25:00,480 Speaker 1: a bigger surprise to the market would be if they 401 00:25:00,520 --> 00:25:02,919 Speaker 1: do bring it forward. I think that we're still going 402 00:25:02,960 --> 00:25:06,840 Speaker 1: to be talking about a very gradual path of normalization, 403 00:25:06,960 --> 00:25:09,960 Speaker 1: and so my expectation from the FED is to focus 404 00:25:10,040 --> 00:25:12,400 Speaker 1: more on what they're gonna do with their asset purchases. 405 00:25:12,440 --> 00:25:14,879 Speaker 1: I think the message is going to be, we're gonna 406 00:25:14,920 --> 00:25:19,919 Speaker 1: start talking about talking about tapering asset purchases at some point, 407 00:25:19,960 --> 00:25:22,840 Speaker 1: will bring forward. At some point we'll we'll move towards 408 00:25:23,119 --> 00:25:26,080 Speaker 1: where rate expectations are going to be. But the reality is, 409 00:25:26,400 --> 00:25:28,800 Speaker 1: this is a FED that's telegraphed this pretty well, and 410 00:25:28,840 --> 00:25:30,600 Speaker 1: I think so far has done quite a good job, 411 00:25:30,640 --> 00:25:33,520 Speaker 1: particularly if you look at inflation expectations three and five 412 00:25:33,600 --> 00:25:36,200 Speaker 1: year out which are very much near their comfort zone, 413 00:25:36,280 --> 00:25:38,280 Speaker 1: and so um I think the FED is going to 414 00:25:38,359 --> 00:25:41,520 Speaker 1: continue on a gradual path. It's it's a supportive backdrop 415 00:25:41,600 --> 00:25:45,480 Speaker 1: for markets, and you know, invest you should note even 416 00:25:45,600 --> 00:25:48,080 Speaker 1: these early moves and FED policy tend to not be 417 00:25:48,280 --> 00:25:51,080 Speaker 1: what ends the cycle. They may create some volatility along 418 00:25:51,080 --> 00:25:53,440 Speaker 1: the way, but it's really the last rate hikes that matter, 419 00:25:53,480 --> 00:25:55,960 Speaker 1: and we're a long ways away from that. Brian, Where 420 00:25:55,960 --> 00:25:58,440 Speaker 1: do you see us right now in the economic cycle here, 421 00:25:58,720 --> 00:26:02,080 Speaker 1: and particularly at that sort of dovetails with the positioning 422 00:26:02,080 --> 00:26:05,920 Speaker 1: that we've seen in equity markets, that rotation two cyclicals 423 00:26:05,920 --> 00:26:09,600 Speaker 1: and now over the past couple of weeks away from cyclicals. Well, 424 00:26:09,600 --> 00:26:12,960 Speaker 1: it's a critical question, and I would say that we're 425 00:26:13,000 --> 00:26:15,840 Speaker 1: still very early in the economic cycle. And the reason 426 00:26:15,920 --> 00:26:17,840 Speaker 1: I say that, try and say that forcefully, is because 427 00:26:17,840 --> 00:26:19,760 Speaker 1: I hear a lot of questions of is it ending soon? 428 00:26:19,880 --> 00:26:21,680 Speaker 1: Is it too is there too much access? Is it 429 00:26:21,760 --> 00:26:25,560 Speaker 1: too inflationary? Remember, we had a disastrous outcome. We're digging 430 00:26:25,600 --> 00:26:27,840 Speaker 1: out of that outcome. If you look at it from 431 00:26:27,840 --> 00:26:31,720 Speaker 1: a real GDP perspective, we're getting back to where we 432 00:26:31,720 --> 00:26:34,800 Speaker 1: were at the end of But if you look at 433 00:26:34,880 --> 00:26:38,320 Speaker 1: past cycles in the United States, you find that cycles 434 00:26:38,320 --> 00:26:43,080 Speaker 1: have lasted on average around seven years. With the cumulative 435 00:26:43,119 --> 00:26:45,800 Speaker 1: increase in real GDP so this idea that we're a 436 00:26:45,880 --> 00:26:48,479 Speaker 1: year in and only just getting back to where we 437 00:26:48,520 --> 00:26:51,320 Speaker 1: otherwise would have been suggested. It's very early in the 438 00:26:51,359 --> 00:26:55,000 Speaker 1: cycle now that to me favors risk assets until it 439 00:26:55,040 --> 00:26:57,320 Speaker 1: looks like the economy is going to roll over. The 440 00:26:57,440 --> 00:27:01,240 Speaker 1: next question is directionally, where are we. We just had 441 00:27:01,240 --> 00:27:04,360 Speaker 1: a great recovery phase with all the implications for markets. 442 00:27:04,560 --> 00:27:06,880 Speaker 1: Now we move into a more expansion phase and an 443 00:27:06,880 --> 00:27:10,360 Speaker 1: expansion phase. Um, you shouldn't expect interest rates up as 444 00:27:10,440 --> 00:27:12,560 Speaker 1: much as they were. I think the dollar is still 445 00:27:12,680 --> 00:27:16,240 Speaker 1: somewhat weaker. Commodity should continue to do well, Equity should 446 00:27:16,240 --> 00:27:18,960 Speaker 1: do well within equities again shifting more to growth stocks. 447 00:27:19,000 --> 00:27:21,080 Speaker 1: I got about eight ways to go here, Brian. Hey, 448 00:27:21,200 --> 00:27:23,360 Speaker 1: having you on for what you're on for forty five 449 00:27:23,400 --> 00:27:25,040 Speaker 1: minutes today, we need to get you on for three 450 00:27:25,880 --> 00:27:28,800 Speaker 1: hours here. But you know, you know I'm gonna go 451 00:27:28,880 --> 00:27:32,000 Speaker 1: here to what you just said, which is horse and cart. 452 00:27:32,960 --> 00:27:36,760 Speaker 1: Is a week dollar the horse or is a week 453 00:27:36,840 --> 00:27:41,800 Speaker 1: dollar the cart. Well, the weak dollar is a is 454 00:27:41,840 --> 00:27:45,480 Speaker 1: a by product of a We're coming out of a 455 00:27:45,600 --> 00:27:50,080 Speaker 1: very um strong dollar environment, where now in an environment 456 00:27:50,119 --> 00:27:52,760 Speaker 1: where growth around the world maybe a bit more synchronized 457 00:27:52,760 --> 00:27:55,280 Speaker 1: than it was in the aftermath of the global financial crisis, 458 00:27:55,359 --> 00:27:58,240 Speaker 1: there's been a lot of policy support in the United 459 00:27:58,320 --> 00:28:00,600 Speaker 1: States and the FEDS telling us that they're going to 460 00:28:00,680 --> 00:28:03,200 Speaker 1: be on hold. So whether it's a horse or a card, 461 00:28:03,240 --> 00:28:05,480 Speaker 1: I think what you're asking is, does that start to 462 00:28:05,560 --> 00:28:08,120 Speaker 1: unlock some of the value that exists around the world. 463 00:28:08,160 --> 00:28:10,760 Speaker 1: And I suspect that it does that. The challenge that 464 00:28:10,840 --> 00:28:13,879 Speaker 1: investors had investing internationally over the last number yere has 465 00:28:13,920 --> 00:28:16,520 Speaker 1: been a strong dollar environment, to the extent that the 466 00:28:16,640 --> 00:28:19,840 Speaker 1: FEDS on hold policies relatively accommodative, and the rest of 467 00:28:19,880 --> 00:28:23,199 Speaker 1: the world starts to participate more in this expansion than 468 00:28:23,280 --> 00:28:26,160 Speaker 1: the dollars should be stable a weaker and international markets 469 00:28:26,160 --> 00:28:28,320 Speaker 1: should perform well. Brian, let it thank you so much 470 00:28:28,359 --> 00:28:37,440 Speaker 1: with invest Go today just really well timed. We're still 471 00:28:37,440 --> 00:28:41,000 Speaker 1: degree the engineer Sean Donovan who's engineering a New York 472 00:28:41,040 --> 00:28:45,400 Speaker 1: City mayoral candidacy looking for victory, and I haven't done 473 00:28:45,440 --> 00:28:47,680 Speaker 1: this show, and I'm thrilled to have yon today because 474 00:28:48,000 --> 00:28:52,120 Speaker 1: the most unusual vote of New York where second or 475 00:28:52,280 --> 00:28:56,200 Speaker 1: third is a viable alternative. All of a sudden it 476 00:28:56,320 --> 00:28:59,800 Speaker 1: is upon us explain how your day is different each 477 00:29:00,640 --> 00:29:04,040 Speaker 1: because maybe nobody's trying to be number one, but they're 478 00:29:04,080 --> 00:29:06,719 Speaker 1: trying to be number two or even number three in 479 00:29:06,760 --> 00:29:11,760 Speaker 1: this ranked voting. Well, Tom, you're exactly right. This is 480 00:29:11,800 --> 00:29:15,200 Speaker 1: a historic election because we're using rank choice voting for 481 00:29:15,240 --> 00:29:18,200 Speaker 1: the first time in New York City, and that means 482 00:29:18,680 --> 00:29:21,000 Speaker 1: you have to be able to get more than fifty 483 00:29:21,480 --> 00:29:25,560 Speaker 1: of New Yorkers supporting you all across this city. And 484 00:29:25,600 --> 00:29:28,080 Speaker 1: what it means is, and we've seen this in other 485 00:29:28,120 --> 00:29:31,520 Speaker 1: places around the country, that rather than the kind of 486 00:29:31,560 --> 00:29:34,840 Speaker 1: political attacks we've seen the mud slinging from the other 487 00:29:34,880 --> 00:29:39,400 Speaker 1: candidates going into the final debate tonight, what really New 488 00:29:39,480 --> 00:29:43,080 Speaker 1: Yorkers want at this moment is somebody that instead of politics, 489 00:29:43,240 --> 00:29:46,280 Speaker 1: is talking about plans. And that's I think the thing 490 00:29:46,320 --> 00:29:49,920 Speaker 1: that separates me in this election is I bring real 491 00:29:50,080 --> 00:29:52,760 Speaker 1: change from the status quo of the last eight years 492 00:29:52,840 --> 00:29:54,800 Speaker 1: New York has been headed in the wrong direction. But 493 00:29:54,880 --> 00:29:58,640 Speaker 1: I also bring deep experience in the moments of crisis 494 00:29:58,680 --> 00:30:02,760 Speaker 1: that have hit our city. Nine eleven, Sandy, the Great Recession, 495 00:30:02,840 --> 00:30:05,400 Speaker 1: all of those I helped to rebuild New York from, 496 00:30:05,440 --> 00:30:08,080 Speaker 1: and now is a moment you talked about the excitement 497 00:30:08,120 --> 00:30:11,560 Speaker 1: of reopening, but it's as if we've just been hit 498 00:30:11,600 --> 00:30:14,280 Speaker 1: by the hurricane. Now the hard work begins. We still 499 00:30:14,320 --> 00:30:17,360 Speaker 1: have more than five hundred thousand New Yorkers out of work, 500 00:30:17,720 --> 00:30:19,840 Speaker 1: and we need a mayor who really can lead the 501 00:30:19,880 --> 00:30:22,960 Speaker 1: scene forward and has the experience in these moments of 502 00:30:23,040 --> 00:30:27,600 Speaker 1: christis Sean. Let's dovetail the reality of the ranked voting 503 00:30:27,680 --> 00:30:31,200 Speaker 1: and maybe a move to a centrist dialogue with what's 504 00:30:31,240 --> 00:30:34,400 Speaker 1: clearly become the theme, which is crime in the New 505 00:30:34,480 --> 00:30:38,719 Speaker 1: York Police Department. How do you dovetail a centrist vote 506 00:30:39,200 --> 00:30:44,200 Speaker 1: with the responsibility of all constituencies and the New York 507 00:30:44,240 --> 00:30:49,400 Speaker 1: Police Department. Tom's such an important question, And you know, 508 00:30:49,440 --> 00:30:52,560 Speaker 1: if we step back and think about the work we 509 00:30:52,600 --> 00:30:55,400 Speaker 1: did under Mayor Bloomberg that really helped to make New 510 00:30:55,480 --> 00:30:58,840 Speaker 1: York City the leading city in the world in so 511 00:30:58,920 --> 00:31:02,800 Speaker 1: many areas that rebuild growth in this city. It was 512 00:31:02,880 --> 00:31:05,840 Speaker 1: really centered around the idea that in the modern economy, 513 00:31:05,880 --> 00:31:09,240 Speaker 1: talent decides where to live and companies in capital follow. 514 00:31:09,320 --> 00:31:13,160 Speaker 1: So quality of life, safe streets, clean streets, all of 515 00:31:13,200 --> 00:31:16,120 Speaker 1: the things that make New York a good place to 516 00:31:16,200 --> 00:31:20,360 Speaker 1: live are central to the economic success of the city. 517 00:31:20,440 --> 00:31:23,760 Speaker 1: And so we need a mayor who really understands how 518 00:31:23,800 --> 00:31:26,920 Speaker 1: to keep New York safe. Part of that is getting 519 00:31:26,920 --> 00:31:29,520 Speaker 1: guns off the street. Having a mayor who can work 520 00:31:29,600 --> 00:31:32,480 Speaker 1: with President Biden, with other mayors and governors. I have 521 00:31:32,640 --> 00:31:36,320 Speaker 1: those relationships, we could stop guns coming into our city. 522 00:31:36,480 --> 00:31:39,080 Speaker 1: We also have to recognize though we're seeing a mental 523 00:31:39,080 --> 00:31:42,920 Speaker 1: health epidemic playing out on our streets. Homelessness is exploded. 524 00:31:43,240 --> 00:31:46,880 Speaker 1: We're seeing people pushed on our subways. UH. Knife attacks, 525 00:31:46,920 --> 00:31:50,040 Speaker 1: anti Asian hate crimes all connected to this epidemic of 526 00:31:50,120 --> 00:31:53,120 Speaker 1: mental health. And that's work I've done for thirty years 527 00:31:53,440 --> 00:31:57,880 Speaker 1: is breaking that cycle, providing housing, getting folks off our streets, 528 00:31:57,920 --> 00:32:01,400 Speaker 1: in addition to the work I've done on public safety 529 00:32:01,600 --> 00:32:04,760 Speaker 1: and policing that we need to bring those together under 530 00:32:04,800 --> 00:32:07,520 Speaker 1: the next mayor to help New York City start growing 531 00:32:07,560 --> 00:32:10,360 Speaker 1: again and to put those more than five thousand folks 532 00:32:10,360 --> 00:32:13,320 Speaker 1: back to work. Okay, and of course, in addition to safety, 533 00:32:13,320 --> 00:32:16,680 Speaker 1: here sean a lot of folks UH also looking at affordability, 534 00:32:16,720 --> 00:32:19,719 Speaker 1: housing affordability. This is a tough city to live in 535 00:32:19,760 --> 00:32:23,320 Speaker 1: for a lot of folks. You are UH, basically housing 536 00:32:23,360 --> 00:32:26,200 Speaker 1: affordability nerds. You've spent a good portion of your career 537 00:32:26,280 --> 00:32:29,040 Speaker 1: doing this here. What's the solution though for New York City, 538 00:32:29,080 --> 00:32:31,000 Speaker 1: because a lot of people have tried to address this 539 00:32:31,080 --> 00:32:35,160 Speaker 1: before and have failed spectacularly. Look, the first thing we 540 00:32:35,200 --> 00:32:37,680 Speaker 1: need to do is help keep people in their homes. 541 00:32:38,240 --> 00:32:40,200 Speaker 1: New York City was the hardest hit city in the 542 00:32:40,200 --> 00:32:43,120 Speaker 1: world a year ago. We still have more than half 543 00:32:43,120 --> 00:32:44,880 Speaker 1: a million hours. We're on the verge of the worst 544 00:32:44,880 --> 00:32:48,680 Speaker 1: eviction crisis our lifetimes. And instead of having a mayor 545 00:32:48,760 --> 00:32:52,560 Speaker 1: who will demonize and divide us go after the private sector. 546 00:32:52,800 --> 00:32:55,040 Speaker 1: We need to bring billions of dollars of aid that's 547 00:32:55,040 --> 00:32:59,400 Speaker 1: available right now, get it quickly to our renters, but 548 00:32:59,520 --> 00:33:02,600 Speaker 1: also to our landlords to keep them afloat and make 549 00:33:02,680 --> 00:33:05,920 Speaker 1: sure that we avoid that crisis. Second, we need a 550 00:33:05,960 --> 00:33:09,280 Speaker 1: mayor who can work effectively between public sector and private 551 00:33:09,280 --> 00:33:13,040 Speaker 1: sector to grow our economy and to create more housing. 552 00:33:13,080 --> 00:33:15,840 Speaker 1: We have a desperate shortage of housing that is pushing 553 00:33:15,920 --> 00:33:19,200 Speaker 1: up prices all across the city. And so what I 554 00:33:19,200 --> 00:33:20,720 Speaker 1: would do is, just as I did when I was 555 00:33:20,760 --> 00:33:24,880 Speaker 1: Housing Commissioner, work to make more housing affordable, to grow 556 00:33:25,000 --> 00:33:27,840 Speaker 1: New York City, but also to make sure we're using 557 00:33:28,000 --> 00:33:30,840 Speaker 1: all of our tools to create a lot more affordability, 558 00:33:30,880 --> 00:33:33,880 Speaker 1: and one of those is homeownership. You know, we've learned 559 00:33:33,920 --> 00:33:35,960 Speaker 1: that the best way to stop people being pushed out 560 00:33:35,960 --> 00:33:38,440 Speaker 1: of their neighborhoods is give them a piece of the pie, 561 00:33:38,520 --> 00:33:41,760 Speaker 1: help them own. And that's kind of the forgotten strategy 562 00:33:41,840 --> 00:33:44,440 Speaker 1: in affordable housing in New York City the last day years. 563 00:33:44,760 --> 00:33:46,800 Speaker 1: I would bring that back and make sure that we're 564 00:33:46,840 --> 00:33:50,760 Speaker 1: creating wealth and growing opportunity in the city for affordable housing. 565 00:33:50,920 --> 00:33:53,479 Speaker 1: We're out of time, valuable time, it has been Seawn Donovan. 566 00:33:53,520 --> 00:33:56,160 Speaker 1: Thank you so much, New York City, Mayor of Canneda. 567 00:33:56,960 --> 00:34:00,720 Speaker 1: This is the Bloomberg Surveillance Podcast. Thanks for listen. Join 568 00:34:00,840 --> 00:34:04,160 Speaker 1: us live weekdays from seven to ten am Eastern on 569 00:34:04,240 --> 00:34:08,520 Speaker 1: Bloomberg Radio and on Bloomberg Television each day from six 570 00:34:08,600 --> 00:34:13,480 Speaker 1: to nine am for insight from the best in economics, finance, investment, 571 00:34:13,600 --> 00:34:18,640 Speaker 1: and international relations. And subscribe to the Surveillance podcast on 572 00:34:18,719 --> 00:34:22,520 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on 573 00:34:22,640 --> 00:34:26,839 Speaker 1: the terminal. I'm Tom Keene and this is Bloomberg