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Speaker 2: Terminal and the Bloomberg Business app. Just on the conversations
Speaker 2: around the meeting between President Trump and Jijingping. Look at
Speaker 2: the lineup of CEOs that will be attending that meeting
Speaker 2: with the president, or at least attending the visit alongside him.
Speaker 2: Look who's missing. Spot the guy who's not on the screen,
Speaker 2: Jensen of Nvidia.
Speaker 3: This comes after Jens Yu Wang said that he would
Speaker 3: be honored to accompany President Trump on this trip, and
Speaker 3: it comes with Chips much at the forefront of discussions
Speaker 3: with China. Is this a signal that maybe the President's
Speaker 3: trying to distance himself from Jensen Wong? How does this
Speaker 3: sort of leave some of the chip negotiations that have
Speaker 3: been incredibly far between this g enation.
Speaker 2: You know what, from my perspective, for whatever that's worth
Speaker 2: this morning, probably not much. But I think it probably
Speaker 2: doesn't video a favor some of those chips getting into
Speaker 2: the country through the back door. People questioning the relationship
Speaker 2: between him and the administration right now, I think it
Speaker 2: probably doesn't a favor. That is a bit of separation
Speaker 2: on this visit to China.
Speaker 3: Perhaps it also could be hinged in the idea that
Speaker 3: China has created some chips that are starting to work.
Speaker 4: For the deep seek model.
Speaker 3: How much is that going to be at the forefront
Speaker 3: also of these negotiations.
Speaker 2: Let's build on some of this conversation. Catherine Tompson at
Speaker 2: the Cano Institute, writing the volume of rejections and counter
Speaker 2: proposals between around and the US demonstrates just how far
Speaker 2: the administration is from winding down this war. Catherine joins
Speaker 2: us now for more. Catherine, Welcome to the program. The
Speaker 2: President's been very clear on his objectives. Are you clear
Speaker 2: on the strategy to achieve them?
Speaker 5: No?
Speaker 1: Absolutely not, right, especially because right if you look at
Speaker 1: the president's own national security and national defense strategy, this
Speaker 1: isn't you know, starting a war with Iran? And and
Speaker 1: sort of, Iran's nuclear ambitions are not core planks of
Speaker 1: the strategy. They are not core elements of America First priorities,
Speaker 1: and so, you know, I think unfortunately we've we've deviated
Speaker 1: quite a bit from from the strategy, from the plan,
Speaker 1: and I think we're now so far down the rungs
Speaker 1: of the escalation ladder that unfortunately, there aren't too many
Speaker 1: options left to to save the ceasefire, so to speak,
Speaker 1: keep it, you know, off of life support, as the
Speaker 1: President illustrated.
Speaker 4: And prevent the resumption of fighting.
Speaker 3: Catherine, there is an option to try to get trying
Speaker 3: to exert leverage over Iran. How much do you expect
Speaker 3: this to be on the table and what can the
Speaker 3: US offer as an exchange?
Speaker 1: You know, it's hard to predict exactly how much it's
Speaker 1: going to be on the table, but I think, you know, actually,
Speaker 1: you know, in terms of the military dynamic between you know,
Speaker 1: the US and China on Iran and then also on Taiwan,
Speaker 1: because I think, you know, these pieces kind of fit together.
Speaker 1: The recent Time magazine cover that included President Trump and
Speaker 1: President jib with the headline never interrupt your enemy when
Speaker 1: he's making a mistake. I think is illustrative of how
Speaker 1: this conversation could play out. I think, you know, for China,
Speaker 1: right like, this is the time to put big issues
Speaker 1: on the table, like Taiwan, because they know that the
Speaker 1: US is distracted and bogged down in the Middle East.
Speaker 1: Obviously you know, of course the oil the oil dynamic
Speaker 1: and the energy dynamic affects the Chinese, and so it's
Speaker 1: in their interests to you know, have that be part
Speaker 1: of the conversation, certainly.
Speaker 4: But if I was them, you know.
Speaker 1: Right now, one of the things that I would be
Speaker 1: focused on is getting sort of my security agenda on
Speaker 1: the table. And it looks like, based on what the
Speaker 1: President was hinting about, you know, in terms of the
Speaker 1: Taiwan dynamic and arms sales to Taiwan, that it's certainly
Speaker 1: something they're not shying away from putting on the table.
Speaker 1: And I think they understand that the US is significantly
Speaker 1: distracted in the Middle East, yet again not prioritizing the
Speaker 1: Indo Pacific as as our defense strategy says, and unfortunately, uh,
Speaker 1: you know, that dynamic for US puts US I think
Speaker 1: in a in a bit of a disadvantage at the
Speaker 1: table across from the Chinese.
Speaker 3: That's a there's a coterie of incredible CEOs who are
Speaker 3: heading over there. I'm just wondering what you think the
Speaker 3: delivererbals deliverables are going to be on some sort of
Speaker 3: economic truce or economic negotiation between China and the US,
Speaker 3: and how much that could still be at the forefront
Speaker 3: of these negotiations.
Speaker 1: I mean, it seems like that's the priority for the
Speaker 1: president and certainly, you know, his suite of guests that
Speaker 1: are attending would seem to indicate that as well. And right,
Speaker 1: I mean, and this is this is the concern, and
Speaker 1: this is why I'm watching the Taiwan piece of this
Speaker 1: so closely, because you know, for the Chinese, the piece
Speaker 1: on arm sales to Taiwan and potential further conversations about
Speaker 1: you know, the US role and in deterrence and the
Speaker 1: Taiwan strait becomes a forefront of the conversation for the Chinese.
Speaker 1: For US, it's the economic piece of the equation and
Speaker 1: getting some sort of walking away with some sort of
Speaker 1: economic deal. And how those those two pieces on the
Speaker 1: chessboard interact with each other I think will be incredibly
Speaker 1: important and will be, you know, one of the most
Speaker 1: pivotal dynamics to watch. And it's true you can't separate,
Speaker 1: you know, the military and the strategic dynamic from the economic.
Speaker 2: Stay with US mulplindex. Savanna's coming up after this. The
Speaker 2: big global event over the next twenty four forty hours
Speaker 2: is this one and the Savannas. This morning, a high
Speaker 2: stakes macink with President Sheet.
Speaker 5: I have a great relationship with the Presidency. We're doing
Speaker 5: a lot of business, but it's smart business. I think
Speaker 5: you can see that with the fact that in her
Speaker 5: moves they get a big percentage, forty percent.
Speaker 4: Of their oil from horm moves.
Speaker 5: There's been no ships coming in, no nasty ships coming
Speaker 5: in that we end.
Speaker 4: Up in skirmishes with.
Speaker 5: There's been. He'd like to see it get and I
Speaker 5: respect him a lot and hopefully he respects me.
Speaker 2: So here's the latest this morning. President Trump traveling to
Speaker 2: China today for a summit with this Chinese Caunterapageijing Ping.
Speaker 2: The meeting on Thursday said to be shaped by the
Speaker 2: ongoing war in Iran. Elizabeth Economy of the Hoover Institution writing,
Speaker 2: the only channel of communication is economic. That is both
Speaker 2: where there is the greatest conflict but also the most
Speaker 2: forward momentum. Elizabeth Johns is now for more. Listen, go
Speaker 2: to see you.
Speaker 4: Thanks great to be here.
Speaker 2: What are you expecting to come out of this meeting?
Speaker 2: Leans to this week?
Speaker 6: Look, I think there are basically three big buckets of
Speaker 6: issues that both sides want to address. The first, and
Speaker 6: I think most important, is that both sides really want
Speaker 6: to find some stabilization in the relationship. I think they're
Speaker 6: aligned around that. So developing a mechanism so that we're
Speaker 6: not doing a tit for tad on the tariffs and
Speaker 6: the export controls and investigations, I think is number one,
Speaker 6: and that's where I think you're going to get this
Speaker 6: board of Trade and maybe further down the line, a
Speaker 6: board of investment.
Speaker 4: I think that's really the most important.
Speaker 6: Second, of course, and crucial for President Trump for some
Speaker 6: big wins that he can take home, right, some purchases
Speaker 6: of soybeans and who knows energy, airplanes, of course, and
Speaker 6: we see some of the CEOs that are accompanying President
Speaker 6: Trump that are in these spaces.
Speaker 4: I think for.
Speaker 6: China, they'd like the US to just treat China as
Speaker 6: a normal country, right, not to have the highest level
Speaker 6: export controls, not to have the most investment restrictions, not
Speaker 6: to have the highest level of terrorists, but to really
Speaker 6: find a way to do sort of normal trade.
Speaker 4: And then third, I think is that.
Speaker 6: That bucket of broader security issues Iran, Russia, fentanyl. I
Speaker 6: think these are other issues, and certainly I should say
Speaker 6: the Chinese will raise Taiwan. I think these are the
Speaker 6: other issues that are going to be on the deck
Speaker 6: for the two leaders.
Speaker 2: Point too, aren't they a normal country?
Speaker 6: I don't think economically they're a normal country. No, And
Speaker 6: I think the sort of Chinese economic model is now
Speaker 6: presenting problems not only for the United States, but for
Speaker 6: the rest of the world. I think it's useful to
Speaker 6: note that fifty two countries last year put in place
Speaker 6: trade defense measures against China. So the way that China
Speaker 6: does business really poses challenges for not only advanced income
Speaker 6: but now middle income and emerging economies.
Speaker 3: There was a story, there've been a number of stories
Speaker 3: in a number of the biggest newspapers about how China
Speaker 3: has a lot more leverage than the United States and
Speaker 3: about how the economy is in a much better position
Speaker 3: to propose to pose a real competitive threat to the
Speaker 3: United States.
Speaker 4: Do you agree with that framing?
Speaker 6: Well, look, I think it's fair to say that China
Speaker 6: has an important chokehold on sort of goods that are
Speaker 6: essential to US economic and national security, like rare earth
Speaker 6: elements and critical minerals like active pharmaceutical ingredients. So certainly
Speaker 6: they've developed new leverage, new tools. But I think President
Speaker 6: Trump has the capacity to move past that in many respects,
Speaker 6: maybe to put on some virtual reality glasses and create
Speaker 6: his own world and negotiate from what he believes is
Speaker 6: a position of strength. United States doesn't go into this
Speaker 6: without any tools at its disposal. The tariffs have had
Speaker 6: some impact on China. It has export controls that just
Speaker 6: it's been continuing to move forward on export controls around
Speaker 6: chip making equipment. Just this past week it had, you know,
Speaker 6: a letter of intent, basically an informed letter, which basically
Speaker 6: signals to some US companies that they're going to have
Speaker 6: to put in some new export controls.
Speaker 4: Against Chinese companies.
Speaker 6: So I think there are tools that we have at
Speaker 6: our disposal, and the President will go in at least
Speaker 6: feeling stronger than many many other people may recognize.
Speaker 3: If that's the case, what's the signal that you take
Speaker 3: from Jenson Wang of Nvidia not accompanying President Trump on
Speaker 3: this trip.
Speaker 6: Well, look, I think Jensen's had a lot of attention,
Speaker 6: you know, paid to in Nvidia, and the President you know,
Speaker 6: made a move basically on his behalf and on AMD's
Speaker 6: behalf last year when he allowed the sale of the
Speaker 6: H two hundreds to go forward, which was something that
Speaker 6: he did against a lot of opposition both within his
Speaker 6: own administration and Congress and within the national security community.
Speaker 6: Those sales haven't materialized, so I think maybe what would
Speaker 6: be the point at this point of him going I
Speaker 6: think if you look at the companies that are accompanying
Speaker 6: the president in the tech space, many of them are
Speaker 6: a little bit of problem children. They have issues with
Speaker 6: the Chinese government right now. Either they're not getting licenses,
Speaker 6: they're under investigation, they're concerned about shrinking market share. So
Speaker 6: I think there will probably be an effort to get
Speaker 6: some of those very particular issues addressed in the summit.
Speaker 2: Can we finish on Taiwan, and maybe a bit of
Speaker 2: a reality check to the narrative that we hear a
Speaker 2: lot in these kind of conversations. There is an opening
Speaker 2: care for them to make a move on Taiwan. The
Speaker 2: President's distracted, he's broke down in the Middle East. Right now,
Speaker 2: what's your read and what's actually going to happen.
Speaker 6: So I don't think the Chinese are going to make
Speaker 6: a move, a military move on Taiwan because President she
Speaker 6: really wants to have a peaceful resolution. I think he's
Speaker 6: planning to wait until twenty twenty eight when there's an
Speaker 6: election in Taiwan where he believes that perhaps the opposition party,
Speaker 6: the KMT, may come to power, and the KMT is
Speaker 6: more favorably disposed toward Beijing. So I think there's a
Speaker 6: window here where I think we're not going to see
Speaker 6: any military action. That being said, we also don't want
Speaker 6: to see President Trump give any more space to Beijing
Speaker 6: on Taiwan. I think, you know, the administration certainly recognizes
Speaker 6: that Taiwan, you know, basically produces over ninety percent of
Speaker 6: the most advanced chips that we need both for commercial
Speaker 6: and military purposes, and it is essential to our national security.
Speaker 4: It's part of the first Island chain.
Speaker 6: So I think what we don't want is for Taiwan
Speaker 6: to be central in this meeting or to see any
Speaker 6: give on the US position.
Speaker 2: We hear repeatedly to under this president, the administration of
Speaker 2: the US is wanting to give up is global leadership role.
Speaker 4: Do you say it the same way.
Speaker 6: I think the US is redefining its global leadership role
Speaker 6: under President Trump.
Speaker 4: It's not giving up.
Speaker 6: I think there's a misperception that President Trump has retreated
Speaker 6: from of the global stage.
Speaker 4: You know, the sort of.
Speaker 6: Idea that we're going to have a sphere of influence,
Speaker 6: policy only be focused on the Western hemisphere. I mean,
Speaker 6: we are deeply embedded in the Indo Pacific, We're clearly
Speaker 6: still in the Middle East. See any evidence that we're
Speaker 6: pulling back from our global positioning In the security realm.
Speaker 6: I also think what we see is, yes, the President
Speaker 6: has withdrawn the United States from over five dozen international
Speaker 6: institutions and arrangements, but at the same time he's creating
Speaker 6: new ones. His administration is creating new arrangements like the
Speaker 6: Shield of Americas and forged around issues where the administration
Speaker 6: feels they're critical to US sort of security and economic interests,
Speaker 6: so around you know, critical minerals, around rare earth elements,
Speaker 6: doing bilateral deals, establishing a new multilateral trade arrangement, so
Speaker 6: it's not a complete withdrawal, but it's a refocusing around
Speaker 6: what this particular administration considers to be sort of the
Speaker 6: essential US economic and security interests.
Speaker 2: Stay with us. Mulplenberg Savannah's coming up after this. I'll
Speaker 2: give it the breakdown month over month and year over
Speaker 2: year sat ON coming month over month at zero point six,
Speaker 2: the estimate zero point six for core on a month
Speaker 2: over month reading that comes in at zero point four.
Speaker 2: The media estimate in our survey with zero point three.
Speaker 2: That takes the year of a year headline and core
Speaker 2: headline year over a year to three point eight percent.
Speaker 2: That's above the three point seven expected core CPI year
Speaker 2: of a year coming at a two point eight percent
Speaker 2: above the two point seven expected. Those numbers are hard
Speaker 2: reading for an incoming FED share who might otherwise have
Speaker 2: been looking for kind of interest rates.
Speaker 3: You can make an argument that three percent is okay,
Speaker 3: but not four percent. That is a problem child when
Speaker 3: it comes to inflation. When you look at the pace
Speaker 3: of increase in year of year core CPI, we're looking
Speaker 3: at the biggest increase into August of twenty twenty two. Again,
Speaker 3: we have to talk about not only the fact that
Speaker 3: inflation is increasing, but the pace of the increase and
Speaker 3: where it's coming from it is not necessarily those gasoline.
Speaker 2: Process That was not a good time. Michael cape And and
Speaker 2: Morgan Stanley joints around the table for more. Michael, good
Speaker 2: morning morning. What catches you right looking at this report, Well.
Speaker 7: There's some hints of second round effects of higher energy
Speaker 7: prices on core, So those airline numbers, the food at
Speaker 7: hone numbers, there's also kind of spillage into headline through
Speaker 7: food because a lot of food prices are related to
Speaker 7: transportation costs. So the concern here, the assumption here, I
Speaker 7: think from the Fed's point of view and ours, is
Speaker 7: that oil prices tend to give you headline effects but
Speaker 7: not core effects. And there's, at least at the moment,
Speaker 7: given the magnitude of the rise in energy prices, some
Speaker 7: hints of those second round effects and core. We need
Speaker 7: to see if those persist. So to me, that's what
Speaker 7: catches my eyes. The four tenth on core was not
Speaker 7: a surprise to us. That's where we were And as
Speaker 7: Michael mentioned, there is some catch up effect here on
Speaker 7: rents and owners equivalent rent from the government shutdown last fall.
Speaker 7: So this number is artificially higher because of that, but
Speaker 7: you still have kind of a what I'll call a trifecta.
Speaker 7: Hear you have energy prices pushing the headline. We think
Speaker 7: we have the last vestiges of tariff passed through on
Speaker 7: core infla core goods. You saw the apparel number today,
Speaker 7: and then we had that catch up effect on shelter
Speaker 7: inside of services. So three forces pushing inflation in this particular,
Speaker 7: CPI reading higher this month.
Speaker 2: If you are looking at the calendar right now, and
Speaker 2: I say to you the following, can you just circle
Speaker 2: way you see the peak for inflation this year. We're
Speaker 2: on the calendar with that full on a year on
Speaker 2: your rate mayor June mail June.
Speaker 7: We think we're at peak pressures now.
Speaker 3: If that's the case, then do you think that the
Speaker 3: FED should look through this with time?
Speaker 7: Yes, but there are a number of forces here. This
Speaker 7: is our fourth major supply shock in recent years, and
Speaker 7: we've got evidence here of what i'll call a mix.
Speaker 7: How do you decide if teariff price passed through is
Speaker 7: ending when you have some of these other second round
Speaker 7: effects from energy prices. So we think ultimately yes, they
Speaker 7: will be able to look through it. But I'll say
Speaker 7: look through it with a long lag, like I think
Speaker 7: we think the Feds on the sideline for the rest
Speaker 7: of this year.
Speaker 3: What does it say that companies are pretty easily able
Speaker 3: to pass along the price increases that they're experiencing to consumers.
Speaker 3: We've seen that in profit margins, we've seen that in earnings,
Speaker 3: and frankly, we're seeing that in how quickly some of
Speaker 3: these price increases are transmitted through things like airline tickets.
Speaker 7: Yeah, it's not a surprise that energy prices get passed
Speaker 7: through quickly. That has been the historical record in the US.
Speaker 7: So seeing airline fares up as much as they wear,
Speaker 7: we actually thought they'd be higher this month, I'd say
Speaker 7: that is pretty standard from a historical perspective. The tariff
Speaker 7: passed through has taken longer. It's taken almost a year.
Speaker 7: That said, when we look at some of the granular data,
Speaker 7: non labor costs reflect those higher tariffs, but firms were
Speaker 7: able to pass along a greater increase in prices and
Speaker 7: build in more margin. I think that speaks to price
Speaker 7: and power still strong underlying demand, but kind of an
Speaker 7: oligopolistic corporate framework. Right, We've got some very large kind
Speaker 7: of quasi monopoly type firms and industries. Typically they have
Speaker 7: better pricing power if you.
Speaker 2: Want just joining us, Welcome to the program Slight upside
Speaker 2: surprise on inflation day to that dropped about eight minutes ago.
Speaker 2: Equally features recovering just a touch, we're off the lines.
Speaker 2: We're still down by thirty one percent. Bondyards off the highs.
Speaker 2: Might be keys standing by with a little bit more detail, Mike,
Speaker 2: when you have a second and third look at the details,
Speaker 2: does it bring just a little bit more comfort or not?
Speaker 8: It doesn't really bring a lot of comfort. We do
Speaker 8: see some decline in things that had been tariffed, some
Speaker 8: of the things that had gone up in price because
Speaker 8: of tariffs. And we don't know whether it's because the
Speaker 8: tariffs were thrown out or whether we've just been past
Speaker 8: the peak here, but appliances are down by four tenths
Speaker 8: of eight percent, household furnishings down by half a percent. However, tomatoes,
Speaker 8: which is one of the things that was tariff by
Speaker 8: the President coming from Mexico for the winter, up fifteen percent.
Speaker 8: Coffee prices were up two percent, So we are seeing
Speaker 8: some impacts still from tariffs in the overall numbers. But
Speaker 8: right now the important thing probably and I'll throw this
Speaker 8: over to Michael as well, as we had a half
Speaker 8: percent rise in services, and that's the area where people
Speaker 8: have been looking for a little bit of a break.
Speaker 8: Give it all a pressure on goods prices and so
Speaker 8: services coming in a little stronger than anticipated.
Speaker 2: Michael Gangkin of Morgan Stanley still with us. Mike, is
Speaker 2: there some stickiness to all of this?
Speaker 7: There is, But I take some positive sign from what
Speaker 7: Mike just said. I think an order of operations here,
Speaker 7: the tariff passed through to goods prices should come first,
Speaker 7: So having some hints of that I think is positive.
Speaker 7: So if you want to if you want to look
Speaker 7: forward with some like a positive checklist, you need to
Speaker 7: see that happen. Core goods prices need to settle down
Speaker 7: in the next couple of months. Then the headline passed
Speaker 7: through from gasoline prices and energy should start to fade
Speaker 7: after that. The longer story here will be is Mike
Speaker 7: noted what happens with services, that's where the stickiness has been.
Speaker 7: Maybe that starts behaving and then twenty twenty seven looks better.
Speaker 7: There's a lot of ifs mites or butts in that statement,
Speaker 7: but they all have to hold up in order to
Speaker 7: get a more favorable inflation outlook.
Speaker 3: Given that we're seeing these kinds of numbers. Is there
Speaker 3: any universe where it makes sense for the Federal Reserve
Speaker 3: to still have an easy bias.
Speaker 7: Probably not. I think they told you in April they
Speaker 7: very easily could have changed that language. It wasn't discrepancy
Speaker 7: about doing it. It is more about timing. So I do
Speaker 7: think all of the inflation data and the solid activity
Speaker 7: data point to an adjustment in the language in June.
Speaker 2: I got some pushback to that a little bit earlier.
Speaker 2: I'm sure Drew Matis might won't mind me sharing that
Speaker 2: he was the one who was pushing back against that.
Speaker 2: There's just one line, in fact, just a couple of
Speaker 2: words doing a lot of heavy lifting in that statement.
Speaker 9: There is, but that's do we move beyond that world?
Speaker 9: With Kevin Walsh, ultimately, I think he would like to yes.
Speaker 9: I mean he's obviously said the FED footprint is too large,
Speaker 9: and that footprint includes communit medication and the FED that
Speaker 9: he thinks is hyper talkative. So yes, if you're thinking, oh,
Speaker 9: there's interest rate policy and there's balance sheet policy. But
Speaker 9: then there's also the forward guidance. That's a tool.
Speaker 7: So yes, this is a tool that you can use.
Speaker 7: So there's only a couple of words in the statement,
Speaker 7: but it has large.
Speaker 3: Implications, some serious power, well does it though, And this
Speaker 3: is actually my pushback to that. The market's right now
Speaker 3: pricing in a rate hike, so it might be doing
Speaker 3: some heavy lifting, but not really because the market's saying
Speaker 3: we don't believe you, We don't think that you'll be
Speaker 3: able to hold on based on inflation numbers like this.
Speaker 3: So at what point does the Fed have to confirm
Speaker 3: what the market is saying in order to keep prices
Speaker 3: actually somewhat subdued versus the otherwise would.
Speaker 2: Be I'd suggests the descent to the language in the
Speaker 2: statement was such widespread, and it was following the meeting
Speaker 2: as well, that it did a lot of the work
Speaker 2: for cham and power with that, and may even really
Speaker 2: needed to change a word in that statement.
Speaker 3: It opened the door to the potential for a change
Speaker 3: in the bias. I mean, we're talking around the margins here, not.
Speaker 4: Esssarily it's the actual rate hike.
Speaker 3: It's mar ridiculous actually putting in pricing in some chance
Speaker 3: of a rate hike, and does it have to in
Speaker 3: order to keep inflation at least not flying away at
Speaker 3: twenty twenty two level.
Speaker 2: You talked about all the GIFs and buts that need
Speaker 2: to take place over the next twelve months to get
Speaker 2: your cut in twenty seven. I find it so hard
Speaker 2: to talk about twenty.
Speaker 7: Twenty seve No. I know it's way out there, it's.
Speaker 2: Crazy, but let's just play that game. Thus for a
Speaker 2: couple of minutes, what would it take to get a
Speaker 2: hike from this fed?
Speaker 7: So you need this number here on Core? As you
Speaker 7: were mentioning, Headline is approaching four, but there's an energy
Speaker 7: story there. Core is at least a more reasonably acceptable
Speaker 7: two point eight that needs to firm the expectation to
Speaker 7: be that that is moving above three and maybe even
Speaker 7: towards three and a half on a spot and forecast basis.
Speaker 7: If you get that for whatever reason, a long persistent
Speaker 7: oil price, premium, inflation expectations moving higher, animal spirits on
Speaker 7: the demand side, then the narrative changes. If there's this
Speaker 7: wide gap between Headline and Core, and Core is kind
Speaker 7: of hanging around three or less than maybe nudging lower,
Speaker 7: it's a totally different story.
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