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

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: or anywhere else you listen, and always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App and inflation

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Speaker 2: Report coming to you right now from across America. I'm

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Speaker 2: waiting for the data, particularly on that critical three tenths

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Speaker 2: of a percent data, and it comes in a little

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Speaker 2: elevated away from the free lunch people were talking about.

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Speaker 2: Instead of zero point three, it's zero point four year

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Speaker 2: over year, not three point four. It's a lofty three

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Speaker 2: point five. And the big one, the wildser to meet

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Speaker 2: Paul Sweeney, is three point seven. Core year over year

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Speaker 2: comes out at three point eight with a spirited real

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Speaker 2: average hourly earnings, The markets react.

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Speaker 3: S and p five hundred just ticks down pretty solidy

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Speaker 3: down seven tens to one percent. The nastac off about

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Speaker 3: nine tens a one percent rate on this data. Go

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Speaker 3: to the yield space, Tom. The two year treasury, the

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Speaker 3: one that's really tied to short term rates, up eleven

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Speaker 3: basis points, just in a couple of ticks. Here, the

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Speaker 3: ten years up nine basis points four point four in.

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Speaker 2: The real yield explodes out ten basis points a higher

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Speaker 2: inflation adjusting yield two point zero nine percent. I'm taking

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Speaker 2: some time here, folks, so I reckon digest this market

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Speaker 2: moving data curve spread a little bit of disinversion, but

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Speaker 2: the real dynamic is just simply in level. I'm not

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Speaker 2: going to mince words. I said this on Monday. I

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Speaker 2: was just guessing. Now I'm not guessing. We are on

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Speaker 2: the five percent watch for the US full faith and

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Speaker 2: credit two year yield four point eighty seven percent rounded

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Speaker 2: up twelve full bas points of movement a ten year

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Speaker 2: four point four to six. There's prosaic ideas, like what

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Speaker 2: does this do to a thirty year mortgage? Is one idea?

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Speaker 2: What does this do to money market funds? Paul? What

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Speaker 2: do we start doing? Is it another half a trillion

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Speaker 2: dollars this week and the money mark.

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Speaker 4: It's interesting time.

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Speaker 3: I'm just looking at the top live on the reporting

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Speaker 3: on the Bloomberg terminal, Chris Ancy, senior editor for Bloomberg,

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Speaker 3: who says, this is going to really question the feasibility

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Speaker 3: of a June FED great cut, that's the bottom line.

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Speaker 2: He's had time to look at his studios in Princeton

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Speaker 2: with Bloomberg Intelligence Ira Jersey and will have Neil Dudda

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Speaker 2: with us in moments as they both digest the data.

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Speaker 2: I right, I guess I got to go to the

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Speaker 2: FED chit chat. This is about as no June cut

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Speaker 2: as we've ever seen.

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Speaker 5: Uh, no June cutting. We're gonna start pricing out July

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Speaker 5: in a hurry as well here Tom, So you know

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Speaker 5: it very likely when you keep on this was not

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Speaker 5: the worst data obviously that we could seen right off.

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Speaker 5: Zero point five would have been worse, for sure. But

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Speaker 5: it just shows you that the the disinflationary environment is

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Speaker 5: is is lagging now. So the you know, the the

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Speaker 5: idea that we were going to continue to have a

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Speaker 5: slow decline of inflation just hasn't happened. And now we're

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Speaker 5: we're starting to see a leveling off, and because of that,

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Speaker 5: it's going to be harder and harder for the Fed

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Speaker 5: Reserve to start cutting interest rates, like even make the

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Speaker 5: case that they need to start start cutting interest rates

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Speaker 5: and and calibrate their uh, calibrate what they're doing. So

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Speaker 5: so it wouldn't surprise me at this point if if

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Speaker 5: the majority of the market started the price for the

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Speaker 5: first full cut to be in November at some point

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Speaker 5: in the next couple of next couple of days, because

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Speaker 5: you know, if they don't cut in July, then then

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Speaker 5: I think that they would just prefer to wait instead of,

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Speaker 5: you know, making a first cut in September. They'll say

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Speaker 5: that they would. Every meeting's live. Yeah, quite frankly, they've

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Speaker 5: never actually cut within a month of the election, so

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Speaker 5: I suspect that they'll they'll skip in September and then

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Speaker 5: go to November.

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Speaker 2: It's like saying Arsenal list and Villa is a snooze fest.

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Speaker 2: It's it's live. The Vicks fifteen point seven zero of

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Speaker 2: point seven to two down futures negative three hundred SMP

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Speaker 2: futures negative forty six. Paul, let me lay out the

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Speaker 2: FED meetings May one June twelve July thirty one, and

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Speaker 2: the one I've been watching, which is September eighteenth. Forget

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Speaker 2: about the politics, forget about the election. They're going to

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Speaker 2: have a lot more data into the Q three.

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Speaker 3: Season YEP end of current from a Bloomberg economy saying

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Speaker 3: no surprises here. Shelter and gas prices are fingered by

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Speaker 3: the BLS as the main culprits here in the higher

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Speaker 3: inflation print here. So I mean, IRA is the Fed

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Speaker 3: just saying again, we're data dependent. We're seeing a little

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Speaker 3: bit of stickiness here, a little bit of a resurgence

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Speaker 3: here in core inflation.

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Speaker 4: So it's okay.

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Speaker 3: Wait, is that kind of how you think they're going

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Speaker 3: to message it?

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Speaker 5: Yeah, I think they almost have to mention it that way.

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Speaker 5: And you know, we get the minutes today and you're

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Speaker 5: not going to revise the minutes because of this number.

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Speaker 5: But I think as we get into and you hear

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Speaker 5: some of the Fed speak going into the quiet period

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Speaker 5: before that that may meeting that Tom just mentioned, you know,

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Speaker 5: one of the things that you're going to look at

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Speaker 5: is the shorter term. Right. You've heard Governor Waller and

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Speaker 5: as well as other members of the Federal Reserve talk

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Speaker 5: about the kind of the shorter term momentum of inflation.

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Speaker 5: And when you look at the three month annualized core

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Speaker 5: inflation rate right now, it's at four point five percent.

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Speaker 5: It was at four percent back in January, So that's accelerating, right,

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Speaker 5: So that's a that's not a good sign.

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Speaker 2: Now.

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Speaker 5: Granted, seasonally this tends to be a time when inflation's

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Speaker 5: a little bit higher anyway, so you have to get

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Speaker 5: with a little bit of a grain of salt. But

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Speaker 5: it's still moving in the wrong direction, right, And I

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Speaker 5: think that that's one of the keys that you can

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Speaker 5: take away from this report is that yes, people will

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Speaker 5: nuance this and say, oh, well, it's housing lagging. There's

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Speaker 5: all these other indicators. Prices obviously, you know, feed into

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Speaker 5: at least some of this report today. But nonetheless, like

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Speaker 5: in aggregate, you're still looking at an economy that doesn't

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Speaker 5: have stable inflation quite yet.

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Speaker 2: We're we're gonna rep up the script here. We're with

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Speaker 2: Ira Jersey. He will continue with us, and Neil Dutta

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Speaker 2: will join us in a moment commercial free to you

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Speaker 2: across America until the nine zero zero hour with the

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Speaker 2: support of Commonwealth. We thank them for their work with

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Speaker 2: our Economics Commonwealth, supporting more than two thousand independent financial

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Speaker 2: Commonwealth go where you grow. Visit Commonwealth dot com to

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Speaker 2: learn more. We're thrilled. Also tell you schedule Tracy Alloway

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Speaker 2: and Joe Wisenthal will rip up the script there as

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Speaker 2: well and talk to mister Wisenthal and miss Alloway about

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Speaker 2: this important inflation report. Down negative three point fifty SPX

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Speaker 2: futures at negative fifty five to VIX out at fifteen

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Speaker 2: point eighty seven. As Paul mentioned, the two year yield

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Speaker 2: four point eight nine percent now a fifteen basis point

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Speaker 2: higher yield, lower price on the two year yield. Ivery Jersey,

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Speaker 2: please please stay with us if you can. Neil Dudda

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Speaker 2: joins now from Renaissance Macro. Neil. This goes right to

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Speaker 2: the ambiguity, which you think is constructive. If we have

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Speaker 2: a little inflation, I guess we're gonna get a little

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Speaker 2: bit of nominal GDP. Does inflation adjusted GDP get crushed?

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Speaker 2: Are you in like some two percent doom and gloom

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Speaker 2: crew with real GDP?

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Speaker 6: Well, well I'm not dooming gloom on on real growth.

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Speaker 6: But you know, I think I agree with Ira that

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Speaker 6: you know, today's inflation number does push out the timing,

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Speaker 6: and I think you know, what's important for I think

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Speaker 6: investors to kind of think about here is just how

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Speaker 6: path dependent is that first cut. I mean, you know,

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Speaker 6: if it's not July, then are they are they not

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Speaker 6: going to ease right before the election? I mean, how

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Speaker 6: much of that to enter their thinking. It's something to

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Speaker 6: think about. The one thing I would say is that

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Speaker 6: you know, much of the upside surprise and in the

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Speaker 6: core CPI number this morning was driven by medical care

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Speaker 6: services inflation, and it's important to keep in mind that,

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Speaker 6: you know, there are differences of scope between the CPI

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Speaker 6: data and the pc data, and the CPI data is running,

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Speaker 6: you know, over a full percentage point higher than PCEE.

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Speaker 6: That's about twice almost three times what's normal, and so

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Speaker 6: you know, in some respects, I do think the margin

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Speaker 6: might be for stating how important CPI is for the

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Speaker 6: FEDS reaction function. But you know, it's a bad number

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Speaker 6: and at the margin that pushes the timing out.

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Speaker 2: Pausing to jump in here, Marcus to tier eight negative

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Speaker 2: seventy on SPX futures down features negative four fifty.

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Speaker 3: And Tom just on the currency front, dollar yen breaches

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Speaker 3: one fifty two, you're yeah, one six four spot three seven,

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Speaker 3: So a little bit of weakness there. So, Neil, where's

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Speaker 3: inflation coming from?

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Speaker 4: I mean, I don't know.

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Speaker 3: I guess we always thought that this, you know, last

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Speaker 3: hundred basis points or so of reducing inflation would probably

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Speaker 3: be the toughest.

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Speaker 4: Where are we seeing inflation these days?

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Speaker 6: Well, you're seeing it. I mean you're seeing it in

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Speaker 6: motor vehicle insurance. That was a big driver for inflation

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Speaker 6: last month. You also saw it in apparel, so a

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Speaker 6: parallel prices rose quite sharply. You know. Keep in mind, though,

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Speaker 6: I mean what I would just say is that you

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Speaker 6: look at apparel prices, they rose I think seven tenths

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Speaker 6: of one percent in March, and that's following a big

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Speaker 6: increase in February. But taking a step back, people are

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Speaker 6: already making a trade off, right, So if you look

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Speaker 6: at real consumption of clothing, it's already declining. So in

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Speaker 6: some respects, that is not the kind of inflation that

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Speaker 6: should be worried about. I mean, that's not demander of

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Speaker 6: an inflation. If people are cutting back in the areas

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Speaker 6: that are going up in prices. That suggests that people

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Speaker 6: are making a trade off already and there's somewhat resistance

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Speaker 6: to higher prices, which then raises the question about how

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Speaker 6: long those price increases can stick. You know, motor vehicle insurance,

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Speaker 6: you know, it was going in the right direction. It

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Speaker 6: was still very elevated, but it was going in the

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Speaker 6: right direction for the last few months, and now it's

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Speaker 6: right reversing, you know, but we did see things like

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Speaker 6: car prices come down, so I'm not really sure what

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Speaker 6: to make that. And ultimately, if the underlying value of

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Speaker 6: the asset itself, which is cars, right's going under price,

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Speaker 6: you'd expect, you know, the insurance cars.

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Speaker 2: Okay, I want to go to Ira right now, and

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Speaker 2: then Neil Dudda with the same question. We're going to

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Speaker 2: go Mafi here because Duda won't come on unless we

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Speaker 2: go mathe Ira. It's real simple. The ten year reel

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Speaker 2: yield is now out over two standard deviations up to

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Speaker 2: two point zero nine percent. It did it in February

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Speaker 2: Valentine's Day when we all had to buy Lisa chocolate

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Speaker 2: killed us. And then from December it's been a lift

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Speaker 2: from one point seven zero up to two point zero

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Speaker 2: nine Ira Jersey Are we had a critic a point

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Speaker 2: for the real yield.

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Speaker 5: I don't think so. You know, the real yield is

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Speaker 5: so to the way that we look at the real

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Speaker 5: yield that basically two components describe most of why we're

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Speaker 5: pricing where we are two percentage for ten year really yields.

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Speaker 5: So first is just volatility in the market, right, so

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Speaker 5: you're going to do when when the market volatility is high,

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Speaker 5: you're going to demand a higher really yield and number one.

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Speaker 5: And then secondly, and I think that this is important

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Speaker 5: and one of the reasons you're seeing the big sell

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Speaker 5: off today there, and that's monetary policy. So so you know,

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Speaker 5: if if if the difference between the Fed Fund rate

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Speaker 5: and uh and and CPI or PC whatever inflation measure

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Speaker 5: you have you want to use, is relatively high, and then certainly,

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Speaker 5: you know tips yields, you have to price that in

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Speaker 5: as well. So so so those two factors tend to

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Speaker 5: tend to drive this. And the fact that now that

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Speaker 5: the market's starting to price out some of the early

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Speaker 5: cuts and starting to price out some you know, that

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Speaker 5: terminal floor that we were talking about earlier now the

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Speaker 5: terminal rate floor is moving up as well. You'd expect

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Speaker 5: this see somewhat higher real yield, and you're seeing that now.

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Speaker 6: No, it's not.

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Speaker 5: I mean, it's not unattractive quite frankly, Tom, you know,

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Speaker 5: two percent plus inflation is an interesting I think is

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Speaker 5: our interesting levels to think about for for tips versus

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Speaker 5: versus nominal treasury done.

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Speaker 2: I look at the five year inflation adjusted yield and

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Speaker 2: we're back to a November almost pre Thanksgiving pricing here

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Speaker 2: four point five three percent. What does a four point

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Speaker 2: five to three percent five year real yield due to

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Speaker 2: American business?

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Speaker 6: I mean, I think at the margin it you know,

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Speaker 6: I mean, obviously it raises the cost of financing. I

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Speaker 6: think what it does, I think it you know, frankly,

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Speaker 6: what it makes look more ridiculous is the FEDS longer

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Speaker 6: run expectations for where neutral rates are. I mean, clearly,

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Speaker 6: you know this is an economy that can still work

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Speaker 6: at high rates at these rates. I mean I think

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Speaker 6: that much is clear. But you know, I think what

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Speaker 6: it does suggests is that you know, the FEDS expectations

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Speaker 6: for where neutral well be is just frankly too low.

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Speaker 6: And I think, you know, every month that goes by

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Speaker 6: where you get a combination of strong jobs growth and

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Speaker 6: higher inflation. I mean, I think that that kind of

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Speaker 6: basically cements that case.

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Speaker 3: Boy, I'm looking at just a couple of categories here, Tom.

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Speaker 3: Car insurance was up twenty two from a year ago.

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Speaker 4: That's so much.

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Speaker 2: Show you what's going on the show right now. I mean,

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Speaker 2: I'm sorry, this is a fixed cost? Can I say that?

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Speaker 4: I think?

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Speaker 1: So?

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Speaker 4: Yeah, I got to pay it every every month. I mean,

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Speaker 4: I know, you know, you know, you've got the Bentley

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Speaker 4: and everything. But for those of us, I mean you.

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Speaker 2: Say car insurance, except that's like breathing air. You have

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Speaker 2: to pay car insurance, right, you have.

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Speaker 6: To pay it. I mean, but as I say, I mean,

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Speaker 6: it's it's it's interesting because it's it's interesting because it

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Speaker 6: hasn't moderated yet when you look. I mean, ultimately, these

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Speaker 6: things should follow the underlying value. I mean, what are

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Speaker 6: you ensuring? Right, you're insuring a car? What do we

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Speaker 6: know about the price of cars? The price of cars

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Speaker 6: is actually going down. That's why poor commandit a CPI

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Speaker 6: in this number was you know on the software side,

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Speaker 6: so you know there is you know, there is some

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Speaker 6: of that going on. I mean, could just be timing,

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Speaker 6: but you know, you have to take these numbers as

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Speaker 6: they come to you. Given the uncertainty that Fed's been

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Speaker 6: talking about, and I think, you know, at the margin

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Speaker 6: that kind of it should push them to err on

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Speaker 6: the side of waiting.

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Speaker 3: Hey, Ira, you know, looking at the ten year treasury here,

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Speaker 3: we're almost fourteen basis points pushing up four point five zero.

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Speaker 3: You know, I have I know nothing about the bond market,

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Speaker 3: and I say that proudly four to four and a

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Speaker 3: half percent was kind of my range for the ten year.

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Speaker 4: Do I have to rethink that.

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Speaker 5: Well, four fifty one is a very important technical level

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Speaker 5: on the charts. We've been highlighting that level now for

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Speaker 5: about ten days. You break there and we can certainly

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Speaker 5: get back toward four point seven percent pretty quickly. I

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Speaker 5: would like to say something that you just comment on,

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Speaker 5: something that Neil just said, and that's that higher terminal,

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Speaker 5: the terminal floor. Right, So the idea that you know

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Speaker 5: two and a half percent is no longer or the

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Speaker 5: kind of the base case. I think there's there's a

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Speaker 5: recency bias that a lot of investors have, and certainly

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Speaker 5: members of the Federal Reserve and the FED staff have

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Speaker 5: and that's that you know, we we've come down and

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Speaker 5: that the that terminal rates, that that the that our

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Speaker 5: star is basically much lower than it was, say in

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Speaker 5: the nineteen nineties or nineteen eighties or seventies. You know,

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Speaker 5: I don't think we're going back to the nineteen seventies

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Speaker 5: or eighties, but certainly, you know, our star the real

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Speaker 5: funds rates, so the real neutral rate has to be

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Speaker 5: higher than it was, you know, prior to prior to

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Speaker 5: to COVID, because because there's a lot of there's a

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Speaker 5: lot of structural issues that have shifted pretty significantly since COVID.

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Speaker 5: We've talked about all of them, right, whether it's immigration,

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Speaker 5: work from home, like, there's a whole bunch of things

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Speaker 5: to think about that way. But the idea that that

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Speaker 5: our star and that the real rate is higher, I

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Speaker 5: think is something that's that's underappreciated by a lot of

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Speaker 5: policy makers, and I think that that that's going to

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Speaker 5: take some time for them to get it into their psychology.

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Speaker 5: That yes, you know, maybe three percent is the new

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Speaker 5: two percent.

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Speaker 2: One final question, you guys, you've got to go to

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Speaker 2: our other esteem guests here. Neil dot As simple as

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Speaker 2: I can, is America oppressed by inflation? Now?

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Speaker 6: I wouldn't say that America is oppressed by inflation. I

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Speaker 6: mean if you ask, if you ask consumers about their

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Speaker 6: short run inflation expectations, they've actually been going down, even

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Speaker 6: though we've been seeing these upside surprises on inflation. And

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Speaker 6: you know, I mean so I think that to me,

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Speaker 6: that disconnect, frankly, is quite interesting. The fact that inflation

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Speaker 6: expectations have been moderating. I mean, we just saw that

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Speaker 6: this week with the New York Fred Right consumer expectations data.

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Speaker 6: I think that, to me is one reason why I'm

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Speaker 6: a little bit skeptical that what we're seeing so far

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Speaker 6: this year is kind of the underlying trend for where

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Speaker 6: inflation is. But the data are with the data are

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Speaker 6: as I mentioned. But you always have to kind of

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Speaker 6: go back to first principles, Tom, I mean, ultimately, unit

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Speaker 6: labor costs are are are we? I mean, where's the

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Speaker 6: inflation really, you know, coming from? You have to start

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Speaker 6: worrying about it. You know, at some point soon if

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Speaker 6: inflation continues to surprise in this fashion, you have to

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Speaker 6: worry a little bit about, you know, declines in real

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Speaker 6: wage growth weighing on consumer spending at some point later.

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Speaker 6: So I do think that that's something that should begin

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Speaker 6: to enter the conversation if this continues.

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Speaker 2: Somebody just sent it in a lovech YouTube. What am

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Speaker 2: I going to be looking at? I'm going to look

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Speaker 2: at Jason Firman up at Harvard who does a wonderful

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Speaker 2: annualized inflation series. I'm sure I'll get that out on

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Speaker 2: Twitter here in a moment. Future is negative sixty four

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Speaker 2: down features at negative four hundred. Thank you Ira Jersey

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Speaker 2: of Bloomberg Intelligence. Thank you Neil Dudda of Renaissance Macro

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Speaker 2: with a real market moving that report today. We are

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Speaker 2: fortunate and that we're going to talk about their show

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Speaker 2: Oddlines is just genormous Apple podcasts where you see it,

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Speaker 2: you know, you look, you got a charitable you know,

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Speaker 2: and there's a Joe and Tracy the Tracy and Joe Show.

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Speaker 4: And yeah, all that.

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Speaker 2: We'll talk about Oddlets, but we're going to open up

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Speaker 2: the conversation with Tracy Alloway and Joseph Weisenthal here just

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Speaker 2: about inflation. Tracy, where are you seeing inflation? We've been

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Speaker 2: making jokes about it, except it's not funny.

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Speaker 1: Well, my personal basket of inflation is all mayonnaise, so

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Speaker 1: that's how I measure it. I haven't looked at up

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Speaker 1: the component change in the in the Mayo index just

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Speaker 1: yet this morning, but I plan to right after this interview. Look,

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Speaker 1: I think most of the unexpected rise seems to have

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Speaker 1: come out of shelter costs and gasoline, or at least

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Speaker 1: that's what the BLS said. I think the really interesting

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Speaker 1: thing here is, and Neil and Ira, we're kind of

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Speaker 1: touching on this. You know, we can talk about the

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Speaker 1: neutral rate, our star, the natural rate of interest all

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Speaker 1: we want, but the inflation data doesn't seem to be

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Speaker 1: bearing out that entire thesis. And in fact, I thought

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Speaker 1: it was really interesting last week it kind of flew

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Speaker 1: under the radar, but the Bank for International Settlements published

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Speaker 1: a paper where they basically said, like, our star is

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Speaker 1: kind of useless and we should probably just be looking

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Speaker 1: at observed inflation instead of trying to observe this unknowable

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Speaker 1: neutral world that's.

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Speaker 2: Called the gospel. According to Tom King, Joe, what's your

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Speaker 2: insight here right now? Inflation's oppressive. I just quoted Argentina

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Speaker 2: with two hundred and seventy six percent annual inflation that's oppressive,

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Speaker 2: that's oppressed crust.

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Speaker 7: Well, we still have real wage growth, as Neil was

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Speaker 7: talking about. As Neil mentioned, even consumer's own expectations for

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Speaker 7: inflations via various surveys have come down. So I think

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Speaker 7: there's an argument that we're not being pressed oppressed by inflation.

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Speaker 4: It's still bad.

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Speaker 2: You know.

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Speaker 7: There's two things that I'm thinking about, which is that

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Speaker 7: there is this view among many, the sort of Powell

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Speaker 7: Waller Bullard camp I would say that policy is tight

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Speaker 7: right now and on some level you and this goes

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Speaker 7: to tree point about the unknowability of neutral. It's like,

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Speaker 7: if inflation keeps surprising to the upside and maybe accelerating

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Speaker 7: a little bit since the last year, what are these

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Speaker 7: words tight even mean in the context of the observed

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Speaker 7: reality that inflation is drifting up. The other thing I

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Speaker 7: keep thinking about, you know, we have futures down today currently,

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Speaker 7: S and P futures down one point two percent. The story,

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Speaker 7: the story of twenty twenty four has been hotter than expect,

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Speaker 7: inflation prints and a red hot stock market. Nonetheless, so

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Speaker 7: in the short term, yes, this is certainly a bump.

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Speaker 7: But it has been interesting that those that first cut

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Speaker 7: keeps getting priced out further and further into the future.

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Speaker 7: Now just fifty cuts, fifty bases points priced in, and

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Speaker 7: by and large, the stock market, by any outside of today,

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Speaker 7: still doing phenomenally well.

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Speaker 3: Exactly, And Tracy, I'm just looking, you know, for context,

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Speaker 3: seeing Bloomberg reporting here sheltering gas combined contributed over half

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Speaker 3: of the overall monthly increase.

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Speaker 4: That's kind of what.

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Speaker 3: People feel month to month, day to day. This is

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Speaker 3: a you know, I was I put in our internal chat,

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Speaker 3: this is a problem for President Joe Biden.

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Speaker 4: I mean inflation. You don't want to see that thing

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Speaker 4: coming back.

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Speaker 1: Well, I guess there's two there things we're kind of

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Speaker 1: learning here, which is one, a lot more people seem

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Speaker 1: to care about how much things cost than the actual

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Speaker 1: employment rate, right, Like, the number of people buying stuff

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Speaker 1: is just always going to be bigger than the number

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Speaker 1: of people who are actually unemployed. So I think, you know,

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Speaker 1: it's great that the Fed can go out and say, well,

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Speaker 1: the labor you know, the unemployment rate is at decades low,

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Speaker 1: But the thing people see the most in their day

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Speaker 1: to day lives is the grocery price or the price

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Speaker 1: of gas or whatever. So that's one thing, and then

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Speaker 1: the other thing I would say is, you know, I

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Speaker 1: think Biden has been tackling this issue in some new

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Speaker 1: and slightly innovative ways, including talking about price gouging, talking

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Speaker 1: about profit margins, and again, the rate of inflation on

435
00:21:50,119 --> 00:21:53,040
Speaker 1: the stuff that is a daily need for people is

436
00:21:53,040 --> 00:21:57,280
Speaker 1: where we see the most impact. Right, So people have

437
00:21:57,359 --> 00:21:59,720
Speaker 1: to buy food, they have to gas up their cars, whatever.

438
00:22:00,040 --> 00:22:02,560
Speaker 1: They don't have a lot of, like Drew, competition in

439
00:22:02,560 --> 00:22:03,080
Speaker 1: that market.

440
00:22:03,160 --> 00:22:05,159
Speaker 2: Paul and I don't have a real life. We don't travel.

441
00:22:05,240 --> 00:22:08,359
Speaker 2: You guys are like jetting around, you know, the golf

442
00:22:08,359 --> 00:22:11,720
Speaker 2: stream and usual. The rest of the country. Are they

443
00:22:11,760 --> 00:22:16,160
Speaker 2: in I guess Arkansas or Texas? Are they in disinflation

444
00:22:16,640 --> 00:22:18,640
Speaker 2: while we're oppressed here in New York.

445
00:22:18,680 --> 00:22:19,840
Speaker 4: I mean I don't think so.

446
00:22:20,040 --> 00:22:21,560
Speaker 2: I mean I don't think so at all.

447
00:22:21,720 --> 00:22:23,440
Speaker 1: You can see the regional CPI number.

448
00:22:23,600 --> 00:22:26,119
Speaker 7: Yeah, And I don't think there is some pocket of

449
00:22:26,160 --> 00:22:27,439
Speaker 7: the country that's escaping it.

450
00:22:27,520 --> 00:22:28,600
Speaker 2: And in fact, I think.

451
00:22:28,520 --> 00:22:31,639
Speaker 7: In a lot of these markets you see hotter than

452
00:22:31,720 --> 00:22:34,960
Speaker 7: expected inflation in part because there's just been so much

453
00:22:35,040 --> 00:22:38,680
Speaker 7: rapid growth and so much strain on the local resources

454
00:22:38,880 --> 00:22:41,800
Speaker 7: due to the influx of population, which kind of maybe

455
00:22:41,840 --> 00:22:42,719
Speaker 7: negates other advantage.

456
00:22:42,760 --> 00:22:44,240
Speaker 2: Yeah, I'm got to talk about out lots or when

457
00:22:44,240 --> 00:22:46,080
Speaker 2: we put put in the time out here, they're handlers,

458
00:22:46,119 --> 00:22:49,320
Speaker 2: they get upset. Yeah, a writer, you go off, go

459
00:22:49,359 --> 00:22:51,760
Speaker 2: off the thing. I mean, if you're in Calverton, New York,

460
00:22:51,800 --> 00:22:54,919
Speaker 2: out by the Hamptons on a given weekend and you

461
00:22:55,080 --> 00:22:58,840
Speaker 2: gotta figure out what to do with acreagew you weigh

462
00:22:58,920 --> 00:23:02,560
Speaker 2: in with attractors, apply cup cadet fifty four inch, twenty

463
00:23:02,560 --> 00:23:07,800
Speaker 2: four horse power riding lawnmower. That's what you Tracy as too.

464
00:23:08,560 --> 00:23:11,600
Speaker 2: You guys talk to Well, she's got the man's mode

465
00:23:11,600 --> 00:23:13,560
Speaker 2: out for the dog. I mean the dog. The dog

466
00:23:13,640 --> 00:23:16,119
Speaker 2: needs exercise. But what did you learn? I mean this

467
00:23:16,240 --> 00:23:20,240
Speaker 2: is like classic odd lots. Yeah, you're talking to tractors supply.

468
00:23:20,400 --> 00:23:20,920
Speaker 2: What you learn?

469
00:23:21,080 --> 00:23:23,679
Speaker 7: So we had the CEO out tomorrow. It comes out

470
00:23:23,720 --> 00:23:26,840
Speaker 7: tomorrow and we're gonna learn why Tracy keeps having to

471
00:23:26,840 --> 00:23:28,520
Speaker 7: spend more and more money.

472
00:23:28,400 --> 00:23:30,760
Speaker 1: I on the modal tractor supply customer.

473
00:23:31,160 --> 00:23:34,440
Speaker 7: But the other interesting, the really interesting thing economically with them,

474
00:23:34,480 --> 00:23:36,360
Speaker 7: and it even speaks to what you were talking about

475
00:23:36,400 --> 00:23:38,919
Speaker 7: with Texas and Arkansas. All that is that there are

476
00:23:38,920 --> 00:23:42,000
Speaker 7: some COVID booms that happened in un reversed peloton Zoom,

477
00:23:42,000 --> 00:23:43,639
Speaker 7: et cetera, and then we sort of went back to normal.

478
00:23:44,000 --> 00:23:48,200
Speaker 7: This move out of the cities has not really negated,

479
00:23:48,320 --> 00:23:51,040
Speaker 7: and people are moving further and further and further apart.

480
00:23:51,240 --> 00:23:53,320
Speaker 7: This was not just a one off shot, and so

481
00:23:53,400 --> 00:23:56,000
Speaker 7: it benefits their sort of strategy which they sort of

482
00:23:56,040 --> 00:23:59,159
Speaker 7: proudly say, we don't have anything near New York, but

483
00:23:59,200 --> 00:24:01,720
Speaker 7: we have three stores Neurodeska Texas.

484
00:24:02,560 --> 00:24:05,080
Speaker 2: Paul, you're living this and Joe and Tracy I don't

485
00:24:05,080 --> 00:24:08,320
Speaker 2: have a life. But the bottom line is Joe is

486
00:24:08,320 --> 00:24:12,600
Speaker 2: one hund I saw you just today with the eclipse

487
00:24:12,960 --> 00:24:17,200
Speaker 2: Monday Tuesday into this Wednesday. I'm sorry, they're out in

488
00:24:17,240 --> 00:24:20,439
Speaker 2: Calverton interrupt I know. I mean, that's all there is

489
00:24:20,480 --> 00:24:21,200
Speaker 2: to it. You guys.

490
00:24:21,240 --> 00:24:25,640
Speaker 3: Also had a recent interview with about US Mexico Freight.

491
00:24:25,720 --> 00:24:28,920
Speaker 3: I got to think that is a great growth story.

492
00:24:28,960 --> 00:24:31,399
Speaker 3: I think about the with the Canadian Pacific bought that

493
00:24:31,480 --> 00:24:33,560
Speaker 3: railroad dow thing from Canada all the way down to Mexico.

494
00:24:33,960 --> 00:24:36,680
Speaker 1: Yeah. So we spoke with Matt Silver, who's the co

495
00:24:36,760 --> 00:24:40,600
Speaker 1: founder of this new company which is building technology basically

496
00:24:40,640 --> 00:24:43,960
Speaker 1: to facilitate cross border trade between the US and Mexico,

497
00:24:44,320 --> 00:24:46,240
Speaker 1: and he's been talking about how it's booming. You know,

498
00:24:46,280 --> 00:24:50,360
Speaker 1: there was always auto production manufacturing in Mexico, so that's

499
00:24:50,400 --> 00:24:53,600
Speaker 1: really picked up. And the one the point that he made,

500
00:24:53,720 --> 00:24:56,280
Speaker 1: which seems kind of obvious, but I guess I hadn't

501
00:24:56,359 --> 00:25:00,000
Speaker 1: internalized it, was the idea of Mexico having a competitive

502
00:25:00,119 --> 00:25:04,000
Speaker 1: advantage just because of its geographic location next to the

503
00:25:04,080 --> 00:25:06,240
Speaker 1: US and the fact that it's in the same time zone.

504
00:25:06,320 --> 00:25:08,960
Speaker 1: You can go down to Mexico, drink tequila with a

505
00:25:08,960 --> 00:25:12,399
Speaker 1: potential business partner, and fly back to the US in

506
00:25:12,480 --> 00:25:17,040
Speaker 1: a day. Right, try to yeah that too. You need

507
00:25:17,119 --> 00:25:18,120
Speaker 1: recovery built in.

508
00:25:19,320 --> 00:25:22,680
Speaker 2: Guys, Thank you, thank you. Alots out on Apple podcasts.

509
00:25:22,720 --> 00:25:25,640
Speaker 2: I'm spending a lot of time looking at the podcasts

510
00:25:25,680 --> 00:25:29,719
Speaker 2: and odd lots leading away from Bloomberg with some intelligent conversation,

511
00:25:30,000 --> 00:25:34,000
Speaker 2: really interested in tractor supply. As Tracy looks at the

512
00:25:34,800 --> 00:25:36,239
Speaker 2: cub cadet.

513
00:25:35,680 --> 00:25:37,680
Speaker 1: You got to go, Tom. They have the baby chickens

514
00:25:37,720 --> 00:25:38,919
Speaker 1: right now. They're very cute.

515
00:25:39,000 --> 00:25:42,440
Speaker 2: Oh good, that would be good. The baby chickens with

516
00:25:42,480 --> 00:25:49,439
Speaker 2: that little kennel feet, that would just be I can't imagine.

517
00:25:51,560 --> 00:25:55,000
Speaker 2: Stephen Rashudo We're like, yeah, rashudo econ, we're econned out.

518
00:25:55,160 --> 00:25:59,040
Speaker 2: Except wow, what a report with miszoo. Good morning, sir.

519
00:25:59,080 --> 00:25:59,760
Speaker 2: Did you expect this.

520
00:26:00,280 --> 00:26:02,760
Speaker 8: We're not as bad as these numbers, that's for sure.

521
00:26:03,600 --> 00:26:06,080
Speaker 8: The reality is, though we have been in the camp

522
00:26:06,119 --> 00:26:08,639
Speaker 8: that basically the data was going to keep the Federal

523
00:26:08,640 --> 00:26:11,560
Speaker 8: Reserve from doing what the Fed wants to do, which

524
00:26:11,600 --> 00:26:14,240
Speaker 8: is cut interest rates, and that the economy fundamentally is

525
00:26:14,280 --> 00:26:17,600
Speaker 8: healthier than a lot of people anticipate, not surprised by

526
00:26:17,600 --> 00:26:19,719
Speaker 8: it in that regard, but surprised on the month over

527
00:26:19,800 --> 00:26:20,359
Speaker 8: month changes.

528
00:26:20,440 --> 00:26:24,280
Speaker 2: What about fixed inflation costs? At the ECHOS building when

529
00:26:24,280 --> 00:26:26,840
Speaker 2: they sit around the table, are they going to talk

530
00:26:26,880 --> 00:26:31,199
Speaker 2: about we have to eat, we have to pay car insurance,

531
00:26:31,680 --> 00:26:35,080
Speaker 2: we have to pay rent or a mortgage averaging out

532
00:26:35,119 --> 00:26:37,040
Speaker 2: now at whatever it is, five to six percent up

533
00:26:37,080 --> 00:26:40,040
Speaker 2: to the seven point three percent. Do they talk about

534
00:26:40,400 --> 00:26:44,760
Speaker 2: required inflation costs versus luxury inflation?

535
00:26:45,200 --> 00:26:47,360
Speaker 8: Well, they really should, because at the end of the day,

536
00:26:47,359 --> 00:26:50,919
Speaker 8: they're trying to maximize social welfare, and their concept behind

537
00:26:51,119 --> 00:26:53,199
Speaker 8: keeping the labor market as tight as it is is

538
00:26:53,240 --> 00:26:56,119
Speaker 8: to try to drive up wages. The problem is by

539
00:26:56,200 --> 00:26:58,800
Speaker 8: keeping the labor market tight in an environment where all

540
00:26:58,800 --> 00:27:01,480
Speaker 8: the excess capacity is used up in the system is

541
00:27:01,520 --> 00:27:04,320
Speaker 8: it creates inflation. And that's when you get into the situation,

542
00:27:04,400 --> 00:27:06,760
Speaker 8: as you indicated a few seconds ago, in terms.

543
00:27:06,480 --> 00:27:07,840
Speaker 4: Of negative real wages.

544
00:27:08,280 --> 00:27:11,639
Speaker 8: So your attempt to try to maximize social welfare by

545
00:27:11,680 --> 00:27:14,640
Speaker 8: keeping a labor market tight could go against you if

546
00:27:14,680 --> 00:27:17,680
Speaker 8: CEOs and companies feel they have pricing power. And after

547
00:27:17,680 --> 00:27:21,000
Speaker 8: seeing this kind of improvement in the data, you're starting

548
00:27:21,000 --> 00:27:23,520
Speaker 8: to see that that's a broad based improvement in the

549
00:27:23,560 --> 00:27:26,679
Speaker 8: inflation numbers. Arise in the inflation numbers is telling you

550
00:27:26,720 --> 00:27:28,520
Speaker 8: that more and more people feel they do have some

551
00:27:28,600 --> 00:27:31,720
Speaker 8: pricing power left, and that's why it's working at the

552
00:27:31,760 --> 00:27:35,520
Speaker 8: detriment of their desire to maximize social welfare.

553
00:27:35,880 --> 00:27:38,560
Speaker 3: So, Steve, I think the initial round of inflation that

554
00:27:38,600 --> 00:27:40,480
Speaker 3: we saw from a pandemic, a lot of folks saying, hey,

555
00:27:40,520 --> 00:27:44,040
Speaker 3: this is supply side driven, it'll play out.

556
00:27:45,119 --> 00:27:46,119
Speaker 4: Is that still the case?

557
00:27:46,400 --> 00:27:49,160
Speaker 8: Well, it did play out, and the reason why fear

558
00:27:49,200 --> 00:27:51,760
Speaker 8: people all the time. AH, inflation was up at nine percent,

559
00:27:51,880 --> 00:27:53,760
Speaker 8: now it's at three. All this is happening because of

560
00:27:53,800 --> 00:27:55,679
Speaker 8: the FED. It's not happening before the FED. It was

561
00:27:55,680 --> 00:27:57,760
Speaker 8: happened as a result of the supply side and the

562
00:27:57,800 --> 00:28:00,639
Speaker 8: fact that even though monetary fiscal policy he's still very

563
00:28:00,680 --> 00:28:03,760
Speaker 8: very accommodative, it's not as accommodative as it was. So

564
00:28:03,840 --> 00:28:06,399
Speaker 8: between those two factors, you've taken inflation down to the

565
00:28:06,440 --> 00:28:09,040
Speaker 8: three plus percentage points. Getting it from three to two

566
00:28:09,119 --> 00:28:11,320
Speaker 8: is a very different story. This is where the FED

567
00:28:11,400 --> 00:28:13,400
Speaker 8: has to get involved, and the FED has been telling

568
00:28:13,440 --> 00:28:15,480
Speaker 8: you over and over again, we want to cut rates,

569
00:28:15,520 --> 00:28:19,000
Speaker 8: and it's been damaging their ability to create a better

570
00:28:19,040 --> 00:28:20,080
Speaker 8: inflationary environment.

571
00:28:20,160 --> 00:28:23,040
Speaker 3: When you see inflation at maybe just the last three

572
00:28:23,040 --> 00:28:25,160
Speaker 3: months ticking up a little bit, does that change your

573
00:28:25,680 --> 00:28:28,679
Speaker 3: economic outlook as it relates to the consumer and the

574
00:28:28,720 --> 00:28:30,760
Speaker 3: retail sales and all these types of things that probably

575
00:28:30,800 --> 00:28:32,040
Speaker 3: go into your GDP model.

576
00:28:32,400 --> 00:28:35,440
Speaker 8: Well, I mean it reflects more what we've been saying.

577
00:28:35,480 --> 00:28:38,000
Speaker 8: We've been in the camp that the labor market is

578
00:28:38,040 --> 00:28:40,520
Speaker 8: tied and the Fed's not going to achieve its inflation target.

579
00:28:40,800 --> 00:28:42,880
Speaker 8: So at some point, you know, the FED either just

580
00:28:42,880 --> 00:28:45,800
Speaker 8: walks away from its inflation target, which is a risk,

581
00:28:45,880 --> 00:28:49,720
Speaker 8: but then that implies higher long term interest rates, and

582
00:28:49,760 --> 00:28:53,160
Speaker 8: that goes against the desire of the same people who

583
00:28:53,200 --> 00:28:55,640
Speaker 8: want to cut rates because they want to see lower

584
00:28:55,680 --> 00:28:57,520
Speaker 8: mortgage rates. They want to see people be able to

585
00:28:57,560 --> 00:29:00,360
Speaker 8: afford to buy homes, and therefore they get the cells

586
00:29:00,400 --> 00:29:02,960
Speaker 8: into this catch twenty two and they haven't been able

587
00:29:03,000 --> 00:29:04,800
Speaker 8: to get themselves out of it because the economy is

588
00:29:04,800 --> 00:29:05,640
Speaker 8: fundamentally healthy.

589
00:29:05,880 --> 00:29:08,560
Speaker 3: And now they are just looking at the WRP function

590
00:29:09,200 --> 00:29:12,520
Speaker 3: pushing out maybe only fifty fifty basis points for the

591
00:29:12,640 --> 00:29:15,719
Speaker 3: entire year this year and a big contrast to how

592
00:29:15,720 --> 00:29:19,400
Speaker 3: we started the year with a lot more cuts pract

593
00:29:19,440 --> 00:29:24,160
Speaker 3: factored into the market. Does the Fed wait till September?

594
00:29:24,200 --> 00:29:24,640
Speaker 4: I don't know.

595
00:29:25,080 --> 00:29:27,880
Speaker 8: Well, they certainly have another opportunity in June when they

596
00:29:27,920 --> 00:29:30,440
Speaker 8: redo the dots again. I mean, my personal preference would

597
00:29:30,440 --> 00:29:32,560
Speaker 8: be that next year when they do the review of

598
00:29:32,600 --> 00:29:34,440
Speaker 8: monetary policy, they eliminate the dots.

599
00:29:34,440 --> 00:29:35,280
Speaker 2: I think the dot's cool.

600
00:29:35,320 --> 00:29:37,640
Speaker 4: We have a function on the Bloomberg terminal, dots go yes.

601
00:29:37,720 --> 00:29:41,120
Speaker 2: I think that can go I would say, I would say,

602
00:29:41,160 --> 00:29:44,680
Speaker 2: with great respect to mister Bloomberg, can the dots go

603
00:29:44,680 --> 00:29:46,720
Speaker 2: go away? Yes? Please go away?

604
00:29:47,040 --> 00:29:50,760
Speaker 8: Thanks, And I think that would be a positive step

605
00:29:50,800 --> 00:29:53,480
Speaker 8: in the right direction for them. But you know, until

606
00:29:53,480 --> 00:29:55,760
Speaker 8: we get that, I think you're probably waiting to June.

607
00:29:55,760 --> 00:29:58,280
Speaker 8: I don't think you'll get any real messaging coming out

608
00:29:58,600 --> 00:29:59,960
Speaker 8: from the May FMC meeting.

609
00:30:00,200 --> 00:30:02,320
Speaker 2: I want to go political here, which is not you know,

610
00:30:02,480 --> 00:30:04,840
Speaker 2: it's not that you're not comfortable with that, Steve. You're

611
00:30:04,880 --> 00:30:08,920
Speaker 2: so able that you can answer this beautifully. I'm sorry,

612
00:30:08,920 --> 00:30:11,400
Speaker 2: but inflation is the halves and they have nots. The

613
00:30:11,440 --> 00:30:15,240
Speaker 2: President's got to address this. This is now one two,

614
00:30:15,280 --> 00:30:18,400
Speaker 2: three months of persistent inflation. But to me, there's a

615
00:30:18,440 --> 00:30:22,160
Speaker 2: great separation in America. For example, Paul and I'm thinking

616
00:30:22,160 --> 00:30:26,560
Speaker 2: of the great Barry Hinckley from the iconic Hinkley ship family.

617
00:30:26,920 --> 00:30:32,920
Speaker 2: He's trotting out Martha Stewart Skyland's too Hinkley pictic boat.

618
00:30:33,200 --> 00:30:37,320
Speaker 2: And because he's helping Martha slide into a Hinckley picnic boat.

619
00:30:37,360 --> 00:30:40,120
Speaker 2: And this is popping like one point seven to two million.

620
00:30:40,560 --> 00:30:44,000
Speaker 2: This is a this is like gorgeous. This is you know,

621
00:30:44,200 --> 00:30:46,520
Speaker 2: Purcelli takes us down the Hudson River to go over

622
00:30:46,560 --> 00:30:49,880
Speaker 2: to Pigum. Okay, you know, Steve shutdo, I'm sorry, there's

623
00:30:49,880 --> 00:30:54,800
Speaker 2: a halves and have nots to inflation. The fancy people

624
00:30:55,000 --> 00:30:58,960
Speaker 2: that have Hinkley picnic boats, they're not worried about this report,

625
00:30:59,080 --> 00:30:59,560
Speaker 2: are they?

626
00:30:59,720 --> 00:30:59,840
Speaker 6: No?

627
00:31:00,760 --> 00:31:01,320
Speaker 2: But You're right.

628
00:31:01,400 --> 00:31:03,560
Speaker 8: There is a real difference, and this comes down to

629
00:31:03,600 --> 00:31:07,000
Speaker 8: the maximized social welfare. The people that they supposedly say

630
00:31:07,000 --> 00:31:09,880
Speaker 8: they want to help, they're not helping with the policies

631
00:31:09,880 --> 00:31:14,360
Speaker 8: they're creating. And that's the underlying problem for this administration.

632
00:31:14,680 --> 00:31:17,480
Speaker 8: They have loaded the Federal Reserve with a bunch of doves,

633
00:31:17,800 --> 00:31:20,320
Speaker 8: and those doves really want to cut interest rates in

634
00:31:20,360 --> 00:31:23,400
Speaker 8: an environment where the economy is telling them you shouldn't

635
00:31:23,400 --> 00:31:27,320
Speaker 8: be cutting interest rates. And then there's this academic environment

636
00:31:27,360 --> 00:31:29,240
Speaker 8: that you get from a lot of Wall Street economists,

637
00:31:29,240 --> 00:31:31,560
Speaker 8: which way, well rach are just naturally too high. I

638
00:31:31,560 --> 00:31:34,280
Speaker 8: wish they would just come down and normalize. People don't

639
00:31:34,320 --> 00:31:35,320
Speaker 8: know what normal is.

640
00:31:35,400 --> 00:31:38,400
Speaker 2: Yeah, but it's Steve that those academic economists in the

641
00:31:38,440 --> 00:31:42,520
Speaker 2: market economists are people that either have want or aspire

642
00:31:42,880 --> 00:31:46,760
Speaker 2: to a Hinkley Picnics. They do. They're not our listeners

643
00:31:46,800 --> 00:31:47,840
Speaker 2: out there living this.

644
00:31:48,240 --> 00:31:50,440
Speaker 8: You're one hundred percent correct, and this is why the

645
00:31:50,480 --> 00:31:54,320
Speaker 8: mistakes the Fed are making is basically allowing this economy

646
00:31:54,360 --> 00:31:57,480
Speaker 8: to stay too height, that high, too tight, or too hot,

647
00:31:57,560 --> 00:32:00,960
Speaker 8: that you are actually creating pricing power for corporate America,

648
00:32:01,080 --> 00:32:04,800
Speaker 8: which then wants to create double digit returns, and that

649
00:32:04,880 --> 00:32:07,600
Speaker 8: double digit returns is what then drives at equity price.

650
00:32:07,640 --> 00:32:09,680
Speaker 8: And now equities are having a hitting year. But let's

651
00:32:09,720 --> 00:32:11,280
Speaker 8: be honest, they had a hell of a great run

652
00:32:11,320 --> 00:32:11,960
Speaker 8: in the first quarter.

653
00:32:12,080 --> 00:32:15,360
Speaker 2: You know, Martha Stewart's picnic boat is Skyland's too. Do

654
00:32:15,360 --> 00:32:19,680
Speaker 2: you know what mine would be? Drama me drama on

655
00:32:19,800 --> 00:32:22,480
Speaker 2: the beg Steven Rashudo, thank you so much, Barry Hickley

656
00:32:22,480 --> 00:32:24,840
Speaker 2: and Martha Stewart, thank you so much as well for

657
00:32:24,880 --> 00:32:40,680
Speaker 2: giving us inflation perspective. Lisa Matero Report Bonds, Lisa Maateo,

658
00:32:40,960 --> 00:32:42,960
Speaker 2: there was almost too many choices this morning.

659
00:32:43,000 --> 00:32:44,840
Speaker 9: Here, there's a lot, There's a lot going on. There

660
00:32:44,880 --> 00:32:47,040
Speaker 9: were some good stories this one. I have to ask you.

661
00:32:47,520 --> 00:32:49,120
Speaker 9: If you're traveling on a plane, have you ever been

662
00:32:49,160 --> 00:32:50,240
Speaker 9: asked to change your seat?

663
00:32:50,360 --> 00:32:52,480
Speaker 3: Sure you have, Yeah, And this is the way I

664
00:32:52,520 --> 00:32:55,480
Speaker 3: think about it. When I having four kids traveling back

665
00:32:55,480 --> 00:32:58,000
Speaker 3: and forth to San Francisco for twenty five years, many

666
00:32:58,080 --> 00:33:00,320
Speaker 3: times we ask people to kind of help out and

667
00:33:00,320 --> 00:33:02,720
Speaker 3: switch seats so it could be together. So now I'm

668
00:33:02,760 --> 00:33:04,880
Speaker 3: on the flip side of that, and I try to

669
00:33:04,880 --> 00:33:07,520
Speaker 3: be as accommodating as I can. But if somebody asked

670
00:33:07,520 --> 00:33:09,480
Speaker 3: me to move from my aisle seat, which is my preference.

671
00:33:09,480 --> 00:33:12,400
Speaker 3: It's like a middle seat. I don't care even if

672
00:33:12,400 --> 00:33:15,320
Speaker 3: there are kids who want Somebody an.

673
00:33:15,240 --> 00:33:18,680
Speaker 2: Economy who has an aisle seat often is paying extra

674
00:33:18,840 --> 00:33:19,240
Speaker 2: for it.

675
00:33:19,320 --> 00:33:20,440
Speaker 4: And that's the new one.

676
00:33:20,840 --> 00:33:24,080
Speaker 9: This is the problems because people are paying extra for

677
00:33:24,200 --> 00:33:27,160
Speaker 9: seats now right Passengers are paying more for seats, and

678
00:33:27,240 --> 00:33:29,520
Speaker 9: then they don't want to pay more, so they just

679
00:33:29,600 --> 00:33:31,520
Speaker 9: use the option to just go wherever. But then when

680
00:33:31,520 --> 00:33:33,600
Speaker 9: they get on the plane in the cabin, they're starting

681
00:33:33,600 --> 00:33:36,160
Speaker 9: to ask other people. You know what, I just switch

682
00:33:36,240 --> 00:33:36,480
Speaker 9: with you.

683
00:33:36,640 --> 00:33:41,360
Speaker 2: I just sent afterthought to Edinburgh. Okay, it was outrageous.

684
00:33:41,400 --> 00:33:43,080
Speaker 2: It was like I thought it'd be seven hundred bucks

685
00:33:43,120 --> 00:33:45,200
Speaker 2: and it was twelve thirteen hundred bucks. And one of

686
00:33:45,240 --> 00:33:47,960
Speaker 2: the overlays was aisle seat or window seat, and the

687
00:33:48,000 --> 00:33:50,000
Speaker 2: second overlay was oxygen.

688
00:33:49,520 --> 00:33:51,200
Speaker 4: And I said, we'll pay.

689
00:33:51,120 --> 00:33:54,600
Speaker 2: Up for oxygen yep as well. But is the answer

690
00:33:54,640 --> 00:33:56,200
Speaker 2: that people are being rooted down and nuts?

691
00:33:56,280 --> 00:33:58,680
Speaker 9: It's the answered is that it's causing a lot of

692
00:33:58,720 --> 00:34:00,640
Speaker 9: tension in the cabin, and there's so much tension and

693
00:34:00,680 --> 00:34:02,720
Speaker 9: travel to begin with. So the Wall Street Journal has

694
00:34:02,720 --> 00:34:04,960
Speaker 9: a really good look into this because you have the

695
00:34:04,960 --> 00:34:07,560
Speaker 9: passenger who was asking and they're like looked at as

696
00:34:07,600 --> 00:34:09,279
Speaker 9: like a cheap scape. Then you have the person sitting

697
00:34:09,320 --> 00:34:11,200
Speaker 9: in the seat who looked at like a jerk if

698
00:34:11,239 --> 00:34:13,040
Speaker 9: they don't change the seed. And then you have the

699
00:34:13,080 --> 00:34:16,440
Speaker 9: airline stewardesses who were called the middle and they just

700
00:34:16,440 --> 00:34:19,040
Speaker 9: want to sit there and say, not my problem. Yeah,

701
00:34:19,120 --> 00:34:21,719
Speaker 9: it's up to you guys. You bottle it out, all right.

702
00:34:22,160 --> 00:34:26,040
Speaker 9: Theater owners they're saying that blockbusters are not enough to

703
00:34:26,160 --> 00:34:28,920
Speaker 9: help them survive. They like the Barbinheimer, you know, that

704
00:34:29,000 --> 00:34:31,239
Speaker 9: whole trend of it, but they need more than two

705
00:34:31,719 --> 00:34:33,080
Speaker 9: movies to survive.

706
00:34:33,200 --> 00:34:36,120
Speaker 2: Paul start there. You had a one off, was Barbonheimer,

707
00:34:36,239 --> 00:34:37,520
Speaker 2: like just one lovely summer?

708
00:34:38,120 --> 00:34:39,840
Speaker 4: No, I mean there's a lot of stuff.

709
00:34:39,880 --> 00:34:41,920
Speaker 3: Twenty four is gonna be the summer of twenty four

710
00:34:41,960 --> 00:34:44,000
Speaker 3: is gonna be okay, twenty five and twenty six are

711
00:34:44,040 --> 00:34:45,000
Speaker 3: gonna be continue.

712
00:34:45,360 --> 00:34:45,560
Speaker 2: Yeah.

713
00:34:45,600 --> 00:34:47,400
Speaker 9: No, And it's a probably because you've had like, you know,

714
00:34:47,440 --> 00:34:49,480
Speaker 9: big hits like barbon Higher, but then you had the

715
00:34:49,480 --> 00:34:51,600
Speaker 9: sleeper hits. You had the Five Nights and Freddy's. You've

716
00:34:51,600 --> 00:34:52,520
Speaker 9: had that one.

717
00:34:52,360 --> 00:34:53,560
Speaker 2: Five I love it.

718
00:34:53,640 --> 00:34:57,200
Speaker 9: You didn't see the Five Nights Freddy I saw that one,

719
00:34:57,600 --> 00:34:59,960
Speaker 9: but it made so much money it was a sleeper.

720
00:35:00,239 --> 00:35:03,080
Speaker 9: Then you have the Taylor Swift, the Beyonce concert films

721
00:35:03,080 --> 00:35:05,000
Speaker 9: trying to pump in money. But then you have the

722
00:35:05,040 --> 00:35:08,160
Speaker 9: Hollywood strikes also that hurt. You have a competition from streaming,

723
00:35:08,200 --> 00:35:10,200
Speaker 9: and that's another issue that the theaters are dealing with.

724
00:35:10,239 --> 00:35:11,239
Speaker 9: So we'll see where it goes.

725
00:35:11,280 --> 00:35:13,799
Speaker 2: But do we still have movies that do like one

726
00:35:13,880 --> 00:35:17,640
Speaker 2: hundred million? Yes, yes, there's still blockbusters.

727
00:35:17,680 --> 00:35:20,279
Speaker 3: Sure, a blockbuster today really has to be like a

728
00:35:20,320 --> 00:35:23,080
Speaker 3: billion global, global, global, And it's not.

729
00:35:23,080 --> 00:35:25,640
Speaker 9: The superhero ones, not as not as much of a

730
00:35:25,680 --> 00:35:26,799
Speaker 9: money maker as they used to be.

731
00:35:26,840 --> 00:35:29,920
Speaker 2: Interesting, I've been to the theater since time began. Oh no,

732
00:35:30,880 --> 00:35:31,320
Speaker 2: I mean.

733
00:35:31,760 --> 00:35:36,160
Speaker 4: It's support and that's some great, big old theaters.

734
00:35:36,000 --> 00:35:38,319
Speaker 2: What I remember. I know we got to continue here,

735
00:35:38,360 --> 00:35:40,800
Speaker 2: but I remember when the kids went all the time,

736
00:35:41,560 --> 00:35:43,680
Speaker 2: and then one day they just stopped and it was

737
00:35:43,719 --> 00:35:46,479
Speaker 2: because of streaming and Netflix. Yep, they just stopped going.

738
00:35:46,719 --> 00:35:48,360
Speaker 4: If that's my convenient.

739
00:35:48,080 --> 00:35:50,600
Speaker 9: Max, What do you track and field? This one is

740
00:35:50,680 --> 00:35:52,400
Speaker 9: interesting from the associated.

741
00:35:51,880 --> 00:35:54,680
Speaker 2: For med field.

742
00:35:54,960 --> 00:35:57,880
Speaker 9: It's going to become the first sport to introduce prize

743
00:35:58,040 --> 00:36:01,640
Speaker 9: money at the Olympics. The World Athletics. They're the governing

744
00:36:01,680 --> 00:36:04,360
Speaker 9: body of the of Athletics. They say they're going to

745
00:36:04,400 --> 00:36:09,319
Speaker 9: pay fifty thousand dollars to gold medalists in Paris. It

746
00:36:09,360 --> 00:36:11,880
Speaker 9: comes from this big pot of two point four million

747
00:36:11,960 --> 00:36:14,560
Speaker 9: dollars they're setting aside to pay them. There's forty eight

748
00:36:14,560 --> 00:36:16,319
Speaker 9: events in track and field, so that's how it's going

749
00:36:16,360 --> 00:36:18,319
Speaker 9: to break down. If you're on a relay team, you

750
00:36:18,400 --> 00:36:21,279
Speaker 9: have to break up the fifty thousand dollars. But it's

751
00:36:21,320 --> 00:36:24,440
Speaker 9: the start of something new. Paying these athletes to win

752
00:36:24,480 --> 00:36:24,880
Speaker 9: the time.

753
00:36:24,920 --> 00:36:27,480
Speaker 4: They were amateur. Doesn't that break the whole amateur thing?

754
00:36:27,680 --> 00:36:30,520
Speaker 9: Correct? But neilil cashish, you know, to go along with

755
00:36:30,560 --> 00:36:33,480
Speaker 9: it all right, and there's more to come. They're actually

756
00:36:33,480 --> 00:36:36,279
Speaker 9: thinking of payments for silver and bronze medalists. They're planned

757
00:36:36,320 --> 00:36:39,400
Speaker 9: to start from the twenty twenty eight Olympics in Los Angeles.

758
00:36:39,640 --> 00:36:42,120
Speaker 2: I mean to me, I've been wading lamand English. I

759
00:36:42,200 --> 00:36:45,520
Speaker 2: really recommended folks to the Laman, the great French newspaper, and

760
00:36:45,520 --> 00:36:48,520
Speaker 2: they have a very inexpensive all English site which I

761
00:36:48,600 --> 00:36:51,680
Speaker 2: find fascinating. And of course there's no other debate. Are

762
00:36:51,680 --> 00:36:53,880
Speaker 2: they going to get in the river and swim so

763
00:36:53,960 --> 00:36:55,359
Speaker 2: what do you do. You got to pay somebody ten

764
00:36:55,400 --> 00:36:58,000
Speaker 2: thousand bucks to get in the river. Exist it's not

765
00:36:58,160 --> 00:37:01,759
Speaker 2: it's not pretty. I mean it's not. You know, at

766
00:37:01,800 --> 00:37:03,480
Speaker 2: some point, if we get closer.

767
00:37:03,440 --> 00:37:05,840
Speaker 4: You've got his suite all set up in Paris for

768
00:37:05,840 --> 00:37:06,360
Speaker 4: the Olympics.

769
00:37:06,360 --> 00:37:08,280
Speaker 2: We do. You know, we're on the back side, away

770
00:37:08,280 --> 00:37:10,279
Speaker 2: from the street, and you know we're looking out and

771
00:37:10,400 --> 00:37:18,719
Speaker 2: they get the cigar you know, garden sure v r

772
00:37:19,000 --> 00:37:21,200
Speaker 2: X or whatever cigar bar.

773
00:37:21,320 --> 00:37:23,239
Speaker 4: All right, but you know we're all set up for

774
00:37:23,239 --> 00:37:23,560
Speaker 4: the summer.

775
00:37:23,920 --> 00:37:25,279
Speaker 2: I felt is going to be out with Gus in

776
00:37:25,320 --> 00:37:28,719
Speaker 2: the horses. Yep, just taking Gus the horse and they're

777
00:37:28,760 --> 00:37:30,440
Speaker 2: hanging out. I think it's out by Versailles.

778
00:37:30,560 --> 00:37:31,520
Speaker 4: Okay, very exciting.

779
00:37:31,880 --> 00:37:34,200
Speaker 9: Next, finally, if this we don't want to hear this

780
00:37:34,320 --> 00:37:36,120
Speaker 9: on the early morning shift when we come in, but

781
00:37:36,719 --> 00:37:40,440
Speaker 9: declf becoming the hottest thing in coffee right now. You know,

782
00:37:40,719 --> 00:37:44,319
Speaker 9: you have alcohol free cocktails, you have meat free hamburgers.

783
00:37:44,320 --> 00:37:46,640
Speaker 9: So now d calf is becoming the new thing.

784
00:37:47,280 --> 00:37:47,520
Speaker 4: Uh.

785
00:37:47,600 --> 00:37:50,920
Speaker 9: The reason why is become new techniques and caffeine removal.

786
00:37:51,440 --> 00:37:54,399
Speaker 9: They've started without using chemicals, so it's becoming a little

787
00:37:54,400 --> 00:37:56,320
Speaker 9: bit healthier, I guess.

788
00:37:57,719 --> 00:38:01,720
Speaker 3: People drink right cafe a coffee versus DCAF.

789
00:38:01,719 --> 00:38:03,280
Speaker 4: I don't know the percentage there, it's.

790
00:38:03,160 --> 00:38:06,400
Speaker 9: Not, but it's becoming this high thing because there's different competitions,

791
00:38:06,440 --> 00:38:10,160
Speaker 9: like these high class competitions and DCAF was actually won

792
00:38:10,239 --> 00:38:12,640
Speaker 9: a top prize for the first time in like this

793
00:38:12,719 --> 00:38:17,080
Speaker 9: competition's twenty year history. So it's starting to pick up

794
00:38:17,120 --> 00:38:17,600
Speaker 9: a little bit.

795
00:38:18,400 --> 00:38:20,680
Speaker 2: The tang here, and folks, I've been using tang zero.

796
00:38:21,320 --> 00:38:23,759
Speaker 2: You know, the sugar became a problem and tang zero's great,

797
00:38:24,239 --> 00:38:27,920
Speaker 2: but you guys deserve to walk by the DCAF excellence

798
00:38:28,880 --> 00:38:39,560
Speaker 2: of Senkall Senka was too. Yeah, I assume Senka is

799
00:38:39,600 --> 00:38:43,640
Speaker 2: still around. Lisa, thanks so much. That is Lisa Matteo

800
00:38:44,360 --> 00:38:48,800
Speaker 2: with the newspapers. This is a Bloomberg Surveillance podcast, bringing

801
00:38:48,840 --> 00:38:53,279
Speaker 2: you the best in economics, finance, investment, and international relations.

802
00:38:53,520 --> 00:38:56,880
Speaker 2: You can also watch the show live on YouTube. Visit

803
00:38:56,920 --> 00:39:01,000
Speaker 2: the Bloomberg Podcast channel on YouTube to see the show

804
00:39:01,280 --> 00:39:04,359
Speaker 2: weekday mornings from seven to ten am Eastern from our

805
00:39:04,400 --> 00:39:08,120
Speaker 2: global headquarters in New York City. Subscribe to the podcast

806
00:39:08,200 --> 00:39:12,240
Speaker 2: on Apple, Spotify, or anywhere else you listen, and always

807
00:39:12,400 --> 00:39:16,760
Speaker 2: on Bloomberg Radio. The Bloomberg Terminal and the Bloomberg Business app,