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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays

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Speaker 2: at seven am Eastern on applecar Player or Android Auto

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Speaker 2: with the Bloomberg Business App. Listen on demand wherever you

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Speaker 2: get your podcasts, or watch us live on YouTube.

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Speaker 3: Carol Masser along with Barry Redholts, we are in for

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Speaker 3: Tom and Paul here on Bloomberg Surveillance on this Wednesday edition.

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Speaker 3: We want to get into it and talk about some

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Speaker 3: of the big trends that are out there. We've got

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Speaker 3: a great guest to do that, Ifan Devitt. She is

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Speaker 3: chief Global strategist over at Minetta. It is a one

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Speaker 3: hundred percent partner owned registered investment advisor, and she joins

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Speaker 3: us on this Wednesday if in good to have you

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Speaker 3: here with Barry and myself. There's a lot to kind

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Speaker 3: of tackle that is coming out investors right now. Some

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Speaker 3: would say between the elections, geopolitics, concerns, maybe about earnings.

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Speaker 3: It's early on the season that meet. We just kind

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Speaker 3: of park a bunch of stuff in cash at this

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Speaker 3: point and kind of write it out.

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Speaker 1: What do you say?

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Speaker 4: Probably not what we're going to advise though, Whereas having

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Speaker 4: stuff and cash worked well when interest rates were high. Unfortunately,

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Speaker 4: our clients aren't really in a position to tactically move

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Speaker 4: things around. So what we're really trying to get them

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Speaker 4: to do is stay the course, not be too reactive,

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Speaker 4: and wait and see and have a bit of a

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Speaker 4: strong stomach at this point, because we do think that

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Speaker 4: the next twenty plus days are going to be a

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Speaker 4: bit of a wild ride. We can see some expectations exceeded,

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Speaker 4: some dashed, and a political backdrop, as you just noted,

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Speaker 4: that is really unprecedented.

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Speaker 5: So so I'm glad you mentioned not trying to be tactical.

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Speaker 5: But at the same time, lots of investors have been

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Speaker 5: thrilled getting five percent in money market funds at least

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Speaker 5: for the past year or so. What are you guys

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Speaker 5: doing with just spare cash that's looking for yield now

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Speaker 5: that we're starting to see money market yield kind of

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Speaker 5: slide below five.

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Speaker 4: That's a great question. I mean, it's sliding slowly below five.

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Speaker 4: So we're still in a much better place than we

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Speaker 4: were when cash used to be a drag on portfolios,

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Speaker 4: but we are starting to look at the margin back

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Speaker 4: into the fifth income complex, see where opportunities.

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Speaker 6: Are interesting there.

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Speaker 4: Spreads are pretty tight, but still you're still getting a

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Speaker 4: yield that's higher than you would have got a few

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Speaker 4: years ago. And we've always had a pretty core exposure

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Speaker 4: to equities, and that wasn't particularly thematic, so it wasn't

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Speaker 4: writing with the volatility of tech stock.

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Speaker 6: So that's looking quite good.

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Speaker 4: And we've always been open at least to some of

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Speaker 4: the alternatives and some of the areas like private credit

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Speaker 4: that have really stayed the course have been a very

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Speaker 4: steady source of income, and we haven't been as open

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Speaker 4: to some more speculative asset classes. But we've always been

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Speaker 4: in education mode around that.

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Speaker 6: Huh.

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Speaker 5: Really interesting. In your most recent note, you mentioned oil

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Speaker 5: is down about four percent, and that kind of implies

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Speaker 5: the market is not really worried about geopolitics. Kind of

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Speaker 5: shocking considered how much stuff is going on not just

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Speaker 5: Russian and Ukraine, but the Middle East, and not just

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Speaker 5: Gaza but now spreading out to other parts of that

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Speaker 5: conflict and the threat of a broader war. How are

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Speaker 5: you looking at what's taking place geopolitically.

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Speaker 4: It remains a modern wonder of our age that markets

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Speaker 4: are continuing to be so resilient despite the political mails

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Speaker 4: from on the domestic front, and despite what Ian Bremer

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Speaker 4: describes as a geopolitical recession. We never had our actual

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Speaker 4: economic recession, but we have had geopolitical recession in terms

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Speaker 4: of just this coincidence of massive numbers of shocks and

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Speaker 4: surprises on the geopolitical front. These do have the potential

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Speaker 4: to disrupt supply chains and disrupt the price of these

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Speaker 4: raw goods, but it's not happening, and we can see

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Speaker 4: that perhaps there has been a lot more near shoring.

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Speaker 4: The pandemic certainly really tested these supply chain networks, and

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Speaker 4: you can see that they've come out the other side

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Speaker 4: more resilient, that they've perhaps been stronger where the cracks were.

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Speaker 4: And now we can see that markets are so sailing

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Speaker 4: through breezely without paying much attention to it. So it

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Speaker 4: remains a wonder. I don't quite understand it, because I

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Speaker 4: think there is some more concern, but you know, it's

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Speaker 4: a nice problem to have in that the portfolio remains resilient.

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Speaker 6: Portfolios of our clients remain resilient.

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Speaker 5: Well.

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Speaker 3: I do wonder even in terms of the commodity market,

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Speaker 3: specifically when you talk about oil, energy that there's a

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Speaker 3: lot of supply out there, and I feel like the

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Speaker 3: metrics have changed dramatically, So I do wonder about that

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Speaker 3: as an indicator. Having said that, I also do wonder

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Speaker 3: about the last twenty years or so, certainly the last

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Speaker 3: decade of just money being so cheap and things distorted,

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Speaker 3: and are we yet through that cycle here today?

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Speaker 4: I would say, no, we're not through the cycle of

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Speaker 4: cheap money and searching for yield. We can see that

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Speaker 4: immediately there's a dip in the market, there's a flood

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Speaker 4: of money in out of money market funds into equity funds.

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Speaker 4: So there's still a sense that you are not going

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Speaker 4: to make money investing in cash or investing in bonds,

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Speaker 4: especially if you have FOMO when you look at those

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Speaker 4: double digit record number and equity markets, so there is

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Speaker 4: still that sense that we would need to get risk

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Speaker 4: on on of a very strong drive to do that.

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Speaker 6: I'd say overall, we can see that.

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Speaker 4: And when it comes to the geopolitics and the focus

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Speaker 4: on energy, yes, we are in a place now where

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Speaker 4: energy security is clearly of prime importance, but we've done

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Speaker 4: much better job around supply. The exception to that is

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Speaker 4: Europe coming into the winter. Now there's going to be

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Speaker 4: a question mark around what Europe potentially will have when

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Speaker 4: it comes to their energy supply. Inflation's very low here,

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Speaker 4: it won't upset the apple cart, but that is a

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Speaker 4: bit of a question mark around energy here.

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Speaker 5: You mentioned inflation low. UK inflation coming in at one

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Speaker 5: point seven percent.

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Speaker 3: I feel I'm pretty happy this morning, right, And.

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Speaker 5: You know, I'm still perplexed by people who are fighting

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Speaker 5: the last war and are arguing about sticking inflation. It's

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Speaker 5: clearly not happening in Europe or in Asia at two

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Speaker 5: two and a half percent. Can we declare the inflation

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Speaker 5: battle one? Now here in the US we.

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Speaker 4: Can the people who are not celebrating a course, as

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Speaker 4: anybody who has their assets in Sterling, which has taken

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Speaker 4: another dive against the dollar today based on the expectation

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Speaker 4: that the next rate cup is a whopper one, a

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Speaker 4: fifty basis point jumbo cut here in London the Bank

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Speaker 4: of England. So clearly the there is are rough and

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Speaker 4: the smooth with those inflation numbers. But yes, your point,

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Speaker 4: I think we have now moved on. I've seen the

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Speaker 4: language used around a hinge economy. Has the economy now

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Speaker 4: kind of turned a page. Inflation is not a concern.

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Speaker 4: We're back to worrying about growth where we get it

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Speaker 4: from employment. We're not worried about overheating, and in the

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Speaker 4: nice position that the central banks have a significant amount

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Speaker 4: of arsenal with which to stimulate the economy when they

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Speaker 4: need to. So is it over Well, certainly we don't

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Speaker 4: know whether all supply chain problems are fixed, but certainly

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Speaker 4: it's not over as an election issue though, as you

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Speaker 4: well know, because this is still front of the center

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Speaker 4: of the voters' minds.

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Speaker 3: Yea, and I would say that stronger inflation reading for

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Speaker 3: September in the US made everybody kind of reset in

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Speaker 3: terms of their expectations for the fed efan we got

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Speaker 3: to run Ifan Devitt, chief Global market strategist over at Manetta,

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Speaker 3: joining us on this Wednesday.

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Speaker 2: You're listening to the Bloomberg Surveillance Podcast. Catch us live

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Speaker 2: weekday afternoons from seven to ten am Easter Listen on

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Speaker 2: Apple car Play and and brought Auto with a Bloomberg

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Speaker 2: Business app, or watch US live on YouTube.

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Speaker 3: Let's see what Anna Moletti has to say. She's head

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Speaker 3: of equity over at Allspring Global Investments, joining us on

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Speaker 3: this Wednesday. Hey, and great to be checking in with

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Speaker 3: you again. Let's start with the election. You guys, you

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Speaker 3: looked into it, wrote a paper on it. How are

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Speaker 3: you thinking about what investors should or shouldn't be doing

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Speaker 3: when it comes to the US presidential election.

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Speaker 1: Well, I think you summarized it really well, Carol. You know, look, investors,

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Speaker 1: we're all human means, and we get fearful of change,

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Speaker 1: and especially when it's in our face every day. I

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Speaker 1: live in a swing state in Wisconsin. There's polarization happening

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Speaker 1: around what each of the policies for you know, the

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Speaker 1: Republican candidate or the Republican candidate, the Democrat or the

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Speaker 1: Republican candidate could could produce. But the reality is history

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Speaker 1: does suggest equities can continue to do well through either administration.

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Speaker 1: And likely it's also because it's not just the president

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Speaker 1: who determines right these things. It's also because the Senate

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Speaker 1: in the House. Do you make a big difference.

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Speaker 3: Right, And we keep talking about that what happens in

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Speaker 3: those down ballot races, particularly what happens in Congress, is

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Speaker 3: important to what a president get done. Having said that,

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Speaker 3: we are spending so much time and talking about John Micklethwaite,

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Speaker 3: editor in chief of Bloomberg News, sitting down with Donald Trump.

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Speaker 3: Donald Trump talked a lot about tariffs. We've done some

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Speaker 3: of the research about now what tariffs across the board,

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Speaker 3: whether it's China or even other some of our allies,

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Speaker 3: as Trump has talked about what it would mean in

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Speaker 3: terms of the impact on the US economy. If that

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Speaker 3: happens and we have a second term by a Trump

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Speaker 3: White House, would that change your thinking about what that

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Speaker 3: might mean for some companies here in the US and

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Speaker 3: how some equities trade.

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Speaker 1: Look, you know, either administration could have an impact on

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Speaker 1: individual companies, but we know that they will adjust. I

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Speaker 1: think this tariff issue is an interesting one because two

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Speaker 1: things could be true. Tariffs could increase inflation and make

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Speaker 1: and have increased some challenges for some companies, but you know,

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Speaker 1: maybe if you do get growth alongside of it, you

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Speaker 1: don't feel that. And I think that's one of the

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Speaker 1: most important things that I've learned in my career in

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Speaker 1: the equity markets is that you can't look at things

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Speaker 1: in isolation. And even when we're looking at economic data,

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Speaker 1: there's no one set of data that really will kind

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Speaker 1: of rule the forward path it's a collective sets of data,

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Speaker 1: and so we tend to look at these things in silos,

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Speaker 1: like what would happen with the tariffs? I think it's

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Speaker 1: what would happen with tariffs? What would happen with the

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Speaker 1: growth rate? What would happen with all of these things?

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Speaker 6: And what is the.

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Speaker 1: Impact ultimately on companies that are trying to manage through it?

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Speaker 1: And I think the reality is that companies typically do

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Speaker 1: adjust and find ways of adjusting to a new set

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Speaker 1: of rules. Sometimes it takes a little bit of time,

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Speaker 1: but they typically do adjust, which again leads to the

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Speaker 1: performance that Barry also talked about at the initial outset.

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Speaker 5: So, Anne, I want to throw out a contrarian idea

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Speaker 5: and get your response to it. People have been talking

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Speaker 5: about this election like it's a big change election, but

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Speaker 5: can't we say either we're going to get a second

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Speaker 5: Trump term which isn't going to look very different than

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Speaker 5: the first Trump term, or a first Harris term where

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Speaker 5: there isn't going to be a whole lot of daylight

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Speaker 5: between her and Biden. I know she's trying to cut

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Speaker 5: her own course, but isn't this just choosing between one

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Speaker 5: former incumbent or the other? How big of a change

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Speaker 5: election can this be?

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Speaker 1: You know, I actually think that's a really interesting point.

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Speaker 1: A couple of months ago, when I was on the show,

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Speaker 1: I had talked about this to Berry. I think these

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Speaker 1: are kind of two known entities in terms of what

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Speaker 1: is what the potential outcome could be. It is very

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Speaker 1: likely that Trump two point zero will be similar with

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Speaker 1: his policies and what we saw with his first term.

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Speaker 1: It also is very likely that although Harris would like

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Speaker 1: to cut her own path, you will see some of

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Speaker 1: the same policies that we've seen over the last four years.

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Speaker 1: So despite all of the drama out there and uncertainty,

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Speaker 1: these are known entities, and we haven't had an election

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Speaker 1: where both sides are so well known.

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Speaker 5: So let's stay with this theme and look forward if

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Speaker 5: we kind of get a sense of what we're going

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Speaker 5: to get with either candidate. I want to focus your

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Speaker 5: discussion on quality and moving down the market cap size

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Speaker 5: into mid and small cap. Does that matter who gets

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Speaker 5: elected or is that just broad allocation regardless of the

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Speaker 5: twenty twenty four presidential election outcome.

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Speaker 1: I actually think it's regardless of the election outcome. Again,

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Speaker 1: I don't want to look at anything in a vacuum.

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Speaker 6: So there's always some.

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Speaker 1: Relation to bigger picture issues. But one of the things

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Speaker 1: that we've seen over the past several years is this

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Speaker 1: increased concentration into the large cap space. Now, as you know,

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Speaker 1: fundamentals have driven that earning's growth. Revenue growth has been higher,

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Speaker 1: substantially higher in some of those large cap companies. But

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Speaker 1: now index investors, passive index investors in particular, are taking

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Speaker 1: very concentrated bets when they're investing in a straight SMP

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Speaker 1: five hundred index, for example, and it becomes not only

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Speaker 1: more difficult for those large cap companies to grow, but

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Speaker 1: there's also more scrutiny for those large cap companies. I mean,

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Speaker 1: today we see forty three percent of the SMP five

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Speaker 1: hundred is under anti trust investigation, which is interesting and

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Speaker 1: may not be the whole hunt.

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Speaker 3: I'm sure they feel that there's a different word rather

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Speaker 3: than interesting.

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Speaker 2: Right, there's on the.

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Speaker 1: Radar, that's right, and it may not mean a lot

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Speaker 1: in your term. We all know these things get caught

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Speaker 1: up in court and other things. But it also likely

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Speaker 1: hampers the management's ability to be as flexible as they'd

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Speaker 1: like to be.

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Speaker 3: And I will say Donald Trump was asked about Google,

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Speaker 3: and the cases are the government case against Google, so

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Speaker 3: something that we know will continue into probably whatever administration,

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Speaker 3: or maybe not, maybe it'll calm down a little bit

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Speaker 3: and great stuff. As always, Am Maletti be while head

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Speaker 3: of Equity over at all Spring Global Investments.

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Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 2: starting at seven am Eastern on applecar Play and Android

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Speaker 2: Auto with the Bloomberg Business App. You can also listen

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Speaker 2: live on Amazon Alexa from our flagship New York station

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Speaker 2: just say Alexa playing Bloomberg eleven thirty.

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Speaker 3: Let's see what Lachman Achuthon's has to say. A founder of,

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Speaker 3: of course, the Economic Cycle Research Institute based here in

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Speaker 3: New York City. Ecri Key is right now though in

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Speaker 3: our Bloomberg Interactive Broker Studio, and his.

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Speaker 5: Leading economic indicators is one of my favorite economic data.

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Speaker 3: Well, that's what I was going to say. He knows

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Speaker 3: data really well, lots of data, and it's accurate in

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Speaker 3: terms of you think of where you were of the

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Speaker 3: summer and what's played out, how are you.

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Speaker 7: Well, It's so good to see you guys, and I

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Speaker 7: think that I think the points that you're making are

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Speaker 7: spot on.

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Speaker 2: Right.

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Speaker 7: It's surprising I think people when they saw that that

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Speaker 7: employment report, and Barry, your point is exactly spot on,

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Speaker 7: as it often is.

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Speaker 3: I learned, all right, we're good, we're done.

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Speaker 8: We're done.

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Speaker 7: So the whole thing we're doing is monitoring cycles, economic cycles,

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Speaker 7: cycles and growth cycles and employment cycles and inflation, and

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Speaker 7: no one data point is good. They're all they're all

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Speaker 7: really faulty. So we use indexes. We we spent a

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Speaker 7: lot of time, decades, dare I say, three generations, putting

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Speaker 7: together groups of indicators that give us a little bit

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Speaker 7: of a heads up if there's a directional change. And so, Barry,

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Speaker 7: I remember you and I were talking last April, we

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Speaker 7: were doing your master's in business, and I was saying, Hey,

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Speaker 7: the window of vulnerability, the cyclical window of vulnerability is closing.

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Speaker 7: There's a whole bunch of reasons. We can tell the

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Speaker 7: story in the data, but the risk of a hard

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Speaker 7: landing isn't really there. And you know, in the summer,

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Speaker 7: people got really excited, Hey is there a recession? All

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Speaker 7: this stuff, and lo and behold, we're hanging in there.

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Speaker 7: We're slowing down, but we're not crashing. And you know,

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Speaker 7: It's kind of a little goldilocks at the moment. Not

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Speaker 7: too hot, not too cold.

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Speaker 3: Do we have to have a landing of some sort

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Speaker 3: at some point? They are cycles, they have highs.

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Speaker 7: They have close You do, you absolutely do. The question

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Speaker 7: is is it hard or soft? And right now it

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Speaker 7: looks decidedly soft as far as we can see. We

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Speaker 7: can't see that far. I don't want to say we

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Speaker 7: know what's going to happen down the line, but for

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Speaker 7: everything that we're monitoring and managing cycle risk, now is

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Speaker 7: not the time to play super duper defense.

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Speaker 2: Right.

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Speaker 5: You said something that has stayed with.

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Speaker 7: Me for a long time.

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Speaker 5: I want to say twenty thirteen, twenty fourteen, we were

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Speaker 5: talking about we were still suffering a little PTSD post crisis,

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Speaker 5: and a lot of people then were forecasting recessions. And

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Speaker 5: one of the things that has always stayed with me

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Speaker 5: is the economy. Think of someone walking down the street

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Speaker 5: and you get bumped or jostled. A steady, healthy person

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Speaker 5: a running back is going to keep their feet for

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Speaker 5: one of these surprises, one of these shocks to cause recession.

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Speaker 5: You need a weekened economy that's very vulnerable. Talk a

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Speaker 5: little bit about how strong a weak the overall state

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Speaker 5: of the economy is right.

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Speaker 7: So that's your cyclical vulnerability. I've said over the years

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Speaker 7: people who have listened to us, we talk about a

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Speaker 7: window of vulnerability a week in immune system in a

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Speaker 7: free market oriented economy, and we've studied them all over

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Speaker 7: the place for a very long time. There are cycles,

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Speaker 7: ebbs and flows. There's times when your immune system is

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Speaker 7: strong and times when it's weaker, when you're off kilter.

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Speaker 7: When you're off kilter, almost any shock can be a

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Speaker 7: recessionary shock. When you're standing firm, you can take a

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Speaker 7: hit and keep on going. Remember Katrina, we're talking. We're

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Speaker 7: in a hurricane season. And when Katrina hit, a lot

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Speaker 7: of people say, oh, that's recessionary. A quarter of the

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Speaker 7: economy shut down for a minute, and lo and behold,

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Speaker 7: there was no sicklical vulnerability, and we walked through it.

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Speaker 7: Here we've got some hurricanes. What's going on. We're going

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Speaker 7: to get jumpiness in the data. I guarantee you it's

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Speaker 7: going to happen. Maybe someone will run with it and

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Speaker 7: say it means this, and it means that when you

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Speaker 7: look at the composite indexes, that tells you a little

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Speaker 7: bit clearer picture. And right now, even though we're likely

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Speaker 7: to get some ups and downs here, it's steady as

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Speaker 7: she goes and all the activity that gets hit during

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Speaker 7: the hurricanes. On the other side, you're going to have rebuilding.

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Speaker 7: And I got to tell you one of the sectors

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Speaker 7: that's been a bulwark here has been the construction sector,

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Speaker 7: non residential can struction. Now I bet residential construction comes back.

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Speaker 5: In So so the one question I keep asking people

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Speaker 5: and not getting a satisfactory answer, is why do you

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Speaker 5: now press that? But you're the right person to answer

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Speaker 5: ask this, Given that window of vulnerability, why did so

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Speaker 5: many economists so expect a recession that never showed up?

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Speaker 3: Remember how many interest rate cuts they were thinking at

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Speaker 3: the end of.

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Speaker 5: Last year, last year, the year before.

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Speaker 3: Yeah, okasion they've been talking about forever a couple less,

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Speaker 3: all right.

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Speaker 7: I think that I think the fundamental reason is labor hoarding.

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Speaker 7: Now we're talking post COVID stuff, right, right, So we're

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Speaker 7: coming off we got rate hikes going like crazy, and

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Speaker 7: we've got a big slow down, and everything cyclical, anything

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Speaker 7: discretionary was slowing down. Even employment was coming down. The

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Speaker 7: growth in the cyclical discretionary parts of the economy was

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Speaker 7: slowing really, really hard. However, the non discretionary think teachers,

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Speaker 7: I think doctors and nurses. Okay, that employment component, which

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Speaker 7: is a lot of people, was running near three decade highs,

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Speaker 7: and it's growth rate it was solid, and it was

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Speaker 7: it was so structurally difficult to get recessionary declines and

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Speaker 7: employment even with the big cyclical slow down. I think

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Speaker 7: that labor hoarding continues today. The only reason we're having

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Speaker 7: some slow down in jobs growth right now is because

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Speaker 7: that non discretionary component of the jobs market is slowing.

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Speaker 7: It's coming off of crazy three decade highs, and the

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Speaker 7: cyclical component, the discretionary component, I think it's actually tropic.

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Speaker 3: So lax, Do you get upset or nervous if we

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Speaker 3: stop to see we don't see that labor hoarding anymore.

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Speaker 3: If we start to see layoffs we haven't seen.

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Speaker 6: If we start to see that.

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Speaker 7: Sure layoffs, I think layoffs I would take as seriously

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Speaker 7: as someone who got layoff. Okay, those are serious things.

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Speaker 7: We don't see them here. Jobless claims are a great

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Speaker 7: thing to look at.

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Speaker 3: We have a so the Boeing or the of us

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Speaker 3: that we talked about this morning, that's want to see.

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Speaker 7: These are companies specific I don't see. There's so you

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Speaker 7: use ps PTSD before. There's so much PTSD about that,

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Speaker 7: that difficulty in hiring post COVID, and there's no hard

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Speaker 7: I'm still stung.

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Speaker 3: Companies are still stung from that.

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Speaker 7: Look, it's very expensive to let someone go and then

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Speaker 7: hire them back again.

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Speaker 5: And there's a shortage of workers out there.

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Speaker 7: And so we have a whole you know, there's there's

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Speaker 7: demographic things going on. We can get into that, but

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Speaker 7: the long and short of it is to your point, Carol,

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Speaker 7: I don't see the recessionary level job losses in front

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Speaker 7: of us. Look that could change. I don't know what's

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Speaker 7: happening in a couple of quarters. I do want to

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Speaker 7: make one last point quick. Going into twenty sixteen election

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Speaker 7: and twenty twenty election, leading indicators were firming as they

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Speaker 7: are now.

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Speaker 3: Really cool stuff, so much fun to reconnect lachmon achthon

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Speaker 3: of course of ECRI.

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Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 2: starting at seven am Eastern on applecar Play and Android

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Speaker 2: Auto with the Bloomberg Business app. You can also watch

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Speaker 2: us live every weekday on YouTube and always on the

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Speaker 2: Bloomberg terminal.

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Speaker 3: We're also keeping the election and the race on our

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Speaker 3: radar as well. On that, Donald Trump defending his plans

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Speaker 3: to overhaul the US economy through dramatic tariff increases and

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Speaker 3: more direct consultation with the Fed. He caught up with

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Speaker 3: John Mickelthade, our Bloomberg News editor in chief, in an

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Speaker 3: interview at the Economic Club of Chicago. Talked about something

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Speaker 3: so important to the Bloomberger audience. We're talking about tariffs.

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Speaker 9: Because we're about growth. She's got no growth whatsoever, and

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Speaker 9: we're all about growth. We're going to bring companies back

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Speaker 9: to our country. You look at even today as I

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Speaker 9: was driving over, I see these empty, old, beautiful like

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Speaker 9: steel mills and factories that are empty and falling down.

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Speaker 9: Some have been converted to senior centers and homes. But

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Speaker 9: that's not going to do the trick. And we're going

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Speaker 9: to bring the companies back. We're going to lower taxes

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Speaker 9: still further for companies that are going to make their

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Speaker 9: product in the USA. We're going to protect those companies

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Speaker 9: with strong tariffs. Because I'm a believer in tariffs, I'm

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Speaker 9: not sure that you are. I don't think you are,

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Speaker 9: But I congratulate you in your career. But to me,

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Speaker 9: the most beautiful word in the dictionary is tariff, and

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Speaker 9: it's my favorite word. It needs a public relations firm

439
00:23:33,000 --> 00:23:34,000
Speaker 9: to help it, but it's.

440
00:23:33,840 --> 00:23:36,479
Speaker 8: To miss the most beautiful word in the tariff, tariffs.

441
00:23:36,480 --> 00:23:38,280
Speaker 8: Do you think that will bring in the revenues to

442
00:23:38,359 --> 00:23:41,440
Speaker 8: use another bipartisan group, Yeah, Peace and Institute. They said,

443
00:23:41,440 --> 00:23:43,760
Speaker 8: I only bring in two hundred billion dollars that is

444
00:23:44,280 --> 00:23:46,920
Speaker 8: only that's barely the cost of two of your promises.

445
00:23:47,119 --> 00:23:50,800
Speaker 9: Yeah, but that's like for what company you're talking about. Okay, look,

446
00:23:50,840 --> 00:23:53,439
Speaker 9: I've I've brought in with tariffs, and I was just

447
00:23:53,480 --> 00:23:56,920
Speaker 9: getting started. Then COVID came and we had a which

448
00:23:57,040 --> 00:23:58,600
Speaker 9: you know, because I tell you what, I did a

449
00:23:58,680 --> 00:24:00,600
Speaker 9: very good job in COVID. Nobody knew what the hell

450
00:24:00,640 --> 00:24:02,480
Speaker 9: it was. I call it the China virus because I

451
00:24:02,600 --> 00:24:05,800
Speaker 9: like being a little more accurate. But when that came,

452
00:24:05,840 --> 00:24:09,880
Speaker 9: but we got hundreds of billions of dollars just from

453
00:24:10,000 --> 00:24:13,480
Speaker 9: China alone, and I hadn't even started yet. But tariff's

454
00:24:13,480 --> 00:24:16,960
Speaker 9: are two two things if you look at it. Number

455
00:24:16,960 --> 00:24:19,280
Speaker 9: one is for protection of the companies that we have

456
00:24:19,840 --> 00:24:22,200
Speaker 9: here and the new companies that we'll move in because

457
00:24:22,200 --> 00:24:25,560
Speaker 9: we're going to have thousands of companies coming into this country.

458
00:24:25,560 --> 00:24:28,000
Speaker 9: We're going to grow it like it's never grown before,

459
00:24:28,480 --> 00:24:30,360
Speaker 9: and we're going to protect them when they come in,

460
00:24:30,440 --> 00:24:32,760
Speaker 9: because we're not going to have somebody undercut them.

461
00:24:33,359 --> 00:24:36,520
Speaker 3: All right, of course, that is Donald Trump form president

462
00:24:36,520 --> 00:24:39,760
Speaker 3: Donald Trump Trump, Republican presidential candidate, as you all know,

463
00:24:39,880 --> 00:24:43,000
Speaker 3: speaking with our Bloomberg News editor in chief John mickl Thraite.

464
00:24:43,000 --> 00:24:45,960
Speaker 3: That was yesterday at an interview in the Economic Club

465
00:24:46,000 --> 00:24:48,120
Speaker 3: of Chicago. They talked Terrris, but they covered a lot

466
00:24:48,119 --> 00:24:50,560
Speaker 3: of ground. Let's get to it with Kelly Lines. She's

467
00:24:50,600 --> 00:24:53,440
Speaker 3: host co host of Bloomberg's Balance of Power on Bloomberg

468
00:24:53,520 --> 00:24:57,280
Speaker 3: Radio and Bloomberg Television. Kelly, I'm not quite sure where

469
00:24:57,359 --> 00:25:00,480
Speaker 3: to begin. It was a long conversation. It took while

470
00:25:00,560 --> 00:25:03,840
Speaker 3: for it to begin. What stood out for you the

471
00:25:03,880 --> 00:25:06,800
Speaker 3: same that we've gotten from mister Trump on the campaign

472
00:25:06,840 --> 00:25:08,159
Speaker 3: trail or anything different.

473
00:25:09,359 --> 00:25:11,919
Speaker 10: There wasn't much new news in this interview, Carol. We

474
00:25:11,960 --> 00:25:14,280
Speaker 10: have heard a lot of this language and these policy

475
00:25:14,280 --> 00:25:17,640
Speaker 10: proposals already from Donald Trump over the course of his campaign,

476
00:25:17,640 --> 00:25:21,840
Speaker 10: including his proclivity toward tariffs, his favorite word in the dictionary.

477
00:25:21,960 --> 00:25:25,280
Speaker 10: As he said, he really pushed back against any idea

478
00:25:25,320 --> 00:25:27,639
Speaker 10: that his tax policy would add to the deficit or

479
00:25:27,720 --> 00:25:30,080
Speaker 10: that tariffs could add to inflation, which is what most

480
00:25:30,080 --> 00:25:34,280
Speaker 10: economists would tell you will happen if these policies become reality.

481
00:25:34,320 --> 00:25:36,320
Speaker 10: But he essentially said, we can grow our way out

482
00:25:36,320 --> 00:25:39,040
Speaker 10: of tax cuts. Tariff income can help offset some of

483
00:25:39,040 --> 00:25:42,800
Speaker 10: the lost revenue from lower taxes, and again most economists

484
00:25:42,840 --> 00:25:44,960
Speaker 10: do push back on that. But it raises the question

485
00:25:45,000 --> 00:25:48,240
Speaker 10: of the audience Donald Trump was really speaking to yesterday.

486
00:25:48,280 --> 00:25:50,640
Speaker 10: There was obviously many people gathered in that room in Chicago,

487
00:25:50,960 --> 00:25:54,439
Speaker 10: many of whom were clapping at his ideas. Who like

488
00:25:54,520 --> 00:25:57,280
Speaker 10: what he is saying. While some on Wall Street and

489
00:25:57,320 --> 00:26:00,160
Speaker 10: financial markets may not like the idea of blink, get

490
00:26:00,160 --> 00:26:01,840
Speaker 10: tariffs put on China and what that could do to

491
00:26:01,880 --> 00:26:04,600
Speaker 10: the US China trade relationship. For an American worker, a

492
00:26:04,680 --> 00:26:08,680
Speaker 10: manufacturing worker in the rust belt states like Michigan, Wisconsin,

493
00:26:08,720 --> 00:26:10,879
Speaker 10: and Pennsylvania, which could help decide the election, it may

494
00:26:10,920 --> 00:26:13,120
Speaker 10: be a message that is a bit more well received

495
00:26:13,160 --> 00:26:13,920
Speaker 10: in those areas.

496
00:26:14,359 --> 00:26:16,760
Speaker 5: So, Kaylie, you hit on exactly the question I was

497
00:26:16,800 --> 00:26:21,879
Speaker 5: going to ask. Given the near universal consensus that tariffs

498
00:26:21,920 --> 00:26:25,920
Speaker 5: are a tax hike on consumers and are inflationary. Who

499
00:26:26,040 --> 00:26:30,400
Speaker 5: is in that audience applauding tariffs. I can imagine it's

500
00:26:30,440 --> 00:26:34,880
Speaker 5: the usual members of the economic club of Chicago, or

501
00:26:35,000 --> 00:26:39,920
Speaker 5: am I completely misunderstanding their economic outlook.

502
00:26:41,000 --> 00:26:43,840
Speaker 10: Well, there were members of Chicago's business community that were there.

503
00:26:43,880 --> 00:26:46,720
Speaker 10: There were also many people that are part of Trump's

504
00:26:46,760 --> 00:26:49,119
Speaker 10: staff and campaign who were there. While we didn't get

505
00:26:49,200 --> 00:26:50,920
Speaker 10: to see, you know, an aerial shot of the room

506
00:26:50,960 --> 00:26:54,040
Speaker 10: every single time the applause was going on to see

507
00:26:54,040 --> 00:26:56,080
Speaker 10: how many people in the room were clapping. Clearly there

508
00:26:56,080 --> 00:26:59,440
Speaker 10: were people in there who are supportive of these ideas. Chicago,

509
00:26:59,480 --> 00:27:03,720
Speaker 10: of course, is midwestern state manufacturing, and bringing back American

510
00:27:03,880 --> 00:27:08,359
Speaker 10: manufacturing specifically maybe a more popular idea in some of

511
00:27:08,400 --> 00:27:10,160
Speaker 10: these areas. And I would point out that is really

512
00:27:10,160 --> 00:27:12,879
Speaker 10: what we heard Donald Trump say quite a few times,

513
00:27:12,920 --> 00:27:15,520
Speaker 10: is that this is about bringing manufacturing back to the

514
00:27:15,640 --> 00:27:17,399
Speaker 10: US that he would like to put into place what

515
00:27:17,520 --> 00:27:20,520
Speaker 10: he described as tariff so obnoxious that they'll all come

516
00:27:21,119 --> 00:27:25,240
Speaker 10: rushing in. Obviously, supply chains take much longer than immediately

517
00:27:25,440 --> 00:27:29,760
Speaker 10: immediacy to actually reroute themselves. Factories can take a long

518
00:27:29,840 --> 00:27:32,000
Speaker 10: time to build, but that's kind of the premise here

519
00:27:32,280 --> 00:27:34,199
Speaker 10: making more in the US, and that is something that

520
00:27:34,240 --> 00:27:37,320
Speaker 10: at least to blue collar voters might sound pretty good.

521
00:27:37,400 --> 00:27:41,080
Speaker 5: So I know Chicago is in the Midwest, but when

522
00:27:41,119 --> 00:27:45,240
Speaker 5: he presented his case to the Economic Club of New York,

523
00:27:45,720 --> 00:27:50,680
Speaker 5: you heard very similar applause to lines that you typically

524
00:27:50,720 --> 00:27:54,680
Speaker 5: think as very counter to economic consensus. So I'm just

525
00:27:54,800 --> 00:27:57,000
Speaker 5: kind of fascinated. Who's in the room, who's in the

526
00:27:57,040 --> 00:28:02,680
Speaker 5: audience is this I know that he did a town

527
00:28:02,760 --> 00:28:06,000
Speaker 5: hall recently and was a very friendly audience. Who's in

528
00:28:06,040 --> 00:28:07,400
Speaker 5: the Economic Club audience?

529
00:28:09,080 --> 00:28:12,359
Speaker 10: Well, they can bring people into the room so that

530
00:28:12,400 --> 00:28:14,639
Speaker 10: are more friendly to Donald Trump, are well known or

531
00:28:14,680 --> 00:28:17,800
Speaker 10: affiliated with his campaign. As you reference his appearance at

532
00:28:17,840 --> 00:28:20,240
Speaker 10: the New York Economic Club, there were people who actually

533
00:28:20,280 --> 00:28:22,440
Speaker 10: were able to ask him questions on that stage, who

534
00:28:22,440 --> 00:28:28,080
Speaker 10: have been very supportive of his economic ideas. And so

535
00:28:28,359 --> 00:28:30,119
Speaker 10: I think there is the question of the kind of

536
00:28:30,119 --> 00:28:32,880
Speaker 10: people Donald Trump is asking to be in that room.

537
00:28:32,920 --> 00:28:36,479
Speaker 10: Who is getting credentialed for these places, knowing that he

538
00:28:36,520 --> 00:28:39,000
Speaker 10: does like to play to an audience that is in

539
00:28:39,080 --> 00:28:40,760
Speaker 10: his favor. You saw a lot of that in that

540
00:28:40,840 --> 00:28:44,240
Speaker 10: interview yesterday where he was talking to the audience and

541
00:28:44,560 --> 00:28:47,120
Speaker 10: kind of you know, making jokes, trying to create these

542
00:28:47,320 --> 00:28:50,480
Speaker 10: these laugh lines, a lot of personality around it as

543
00:28:50,480 --> 00:28:52,160
Speaker 10: he went through all of these various topics.

544
00:28:52,280 --> 00:28:55,120
Speaker 3: Yeah, well, certainly interesting everything that we're seeing on the

545
00:28:55,120 --> 00:28:58,320
Speaker 3: campaign trail on both sides. Kelly Lines, thank you so much,

546
00:28:58,360 --> 00:29:01,200
Speaker 3: host of Bloomberg's Balance of Power, of course on the

547
00:29:01,240 --> 00:29:02,719
Speaker 3: twenty twenty four presidential race.

548
00:29:02,960 --> 00:29:07,280
Speaker 2: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,

549
00:29:07,480 --> 00:29:11,600
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550
00:29:11,720 --> 00:29:14,800
Speaker 2: seven to ten am Eastern on Bloomberg dot com, the

551
00:29:14,880 --> 00:29:18,680
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552
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553
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