1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,640 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,520 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amrie Hordernt. Join us each day 4 00:00:18,760 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,440 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,960 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,319 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:36,839 Speaker 2: Terminal and the Bloomberg Business app. The Ark and Vest 10 00:00:36,880 --> 00:00:40,080 Speaker 2: CEO Kathy would one of Tesla's biggest spores, the ev maker, 11 00:00:40,200 --> 00:00:43,720 Speaker 2: the top holding in her flagship Arc Innovation ETF, has 12 00:00:43,760 --> 00:00:46,159 Speaker 2: this to say, I do not understand why investors are 13 00:00:46,200 --> 00:00:48,840 Speaker 2: voting against Elon's pay package when they and their clients 14 00:00:48,880 --> 00:00:52,360 Speaker 2: would benefit enormously if he and his incredible team meet 15 00:00:52,400 --> 00:00:54,680 Speaker 2: such high goals. Kathy joined us now for more. Kathy, 16 00:00:54,680 --> 00:00:56,240 Speaker 2: thanks for making some time for us this morning. Good 17 00:00:56,280 --> 00:00:58,920 Speaker 2: morning to you all. Do you think, Kathy, the incentives 18 00:00:59,000 --> 00:00:59,960 Speaker 2: are well alive? 19 00:01:01,440 --> 00:01:02,040 Speaker 3: Yes, we do. 20 00:01:03,480 --> 00:01:07,640 Speaker 4: I do not believe any company anywhere near this size 21 00:01:08,560 --> 00:01:14,640 Speaker 4: has ever delivered a compound annual rate of growth for 22 00:01:14,959 --> 00:01:18,640 Speaker 4: ebit dot, which is a bottom line number of forty 23 00:01:18,680 --> 00:01:22,080 Speaker 4: one percent over ten years. No company has done that, 24 00:01:22,280 --> 00:01:26,160 Speaker 4: so yes, indeed the incentives are aligned. If he and 25 00:01:26,200 --> 00:01:30,760 Speaker 4: his team are able to deliver on that number, the 26 00:01:31,000 --> 00:01:33,640 Speaker 4: stock is going to outperform enormously. 27 00:01:34,240 --> 00:01:38,640 Speaker 5: Kathy, if by chance this proposal is rejected, would you 28 00:01:38,680 --> 00:01:40,520 Speaker 5: consider shedding some of your Tesla position. 29 00:01:42,360 --> 00:01:46,720 Speaker 4: So I'm happy that the prediction markets are at ninety 30 00:01:46,840 --> 00:01:49,760 Speaker 4: to ninety five percent in terms of this is going through, 31 00:01:49,800 --> 00:01:53,520 Speaker 4: so we don't have to think about that clearly. If 32 00:01:53,560 --> 00:01:57,520 Speaker 4: Elon left, we think about it in two ways. One 33 00:01:57,600 --> 00:02:02,760 Speaker 4: we think robotaxis. He has them at the starting gate 34 00:02:02,800 --> 00:02:06,480 Speaker 4: as of June and now they're rolling out, and that 35 00:02:06,680 --> 00:02:09,880 Speaker 4: AI project is well underway. 36 00:02:10,240 --> 00:02:13,200 Speaker 3: If he had left five years ago, three years ago, 37 00:02:13,560 --> 00:02:14,720 Speaker 3: it probably. 38 00:02:14,320 --> 00:02:18,000 Speaker 4: Wouldn't be anywhere near where it is. What we now 39 00:02:18,200 --> 00:02:22,720 Speaker 4: think though, is in order to capitalize on humanoid robots, 40 00:02:22,760 --> 00:02:28,600 Speaker 4: which that's a much more difficult project. That yes, Elon's 41 00:02:28,840 --> 00:02:33,840 Speaker 4: brilliance and the team he has attracted around him are 42 00:02:33,919 --> 00:02:37,000 Speaker 4: going to be necessary to pull that off. Our price 43 00:02:37,040 --> 00:02:42,000 Speaker 4: target twenty six hundred dollars in twenty thirty is ninety 44 00:02:42,040 --> 00:02:45,840 Speaker 4: percent of that valuation is robotaxi, we have very little 45 00:02:46,720 --> 00:02:53,000 Speaker 4: for humanoid robots. If humanoid robots evolve as quickly as 46 00:02:53,240 --> 00:02:56,880 Speaker 4: Elon things, now remember that's Elon time. But he already 47 00:02:56,880 --> 00:03:03,119 Speaker 4: has a running start because robotaxis are robots, they're electric, 48 00:03:03,480 --> 00:03:06,960 Speaker 4: they're powered by AI. Those are the three innovation platforms 49 00:03:07,040 --> 00:03:10,480 Speaker 4: that will power humanoid robots as well. So he's ahead 50 00:03:10,520 --> 00:03:12,160 Speaker 4: of the game on that one as well. But I 51 00:03:12,240 --> 00:03:15,680 Speaker 4: do believe he's the right leader to bring that part 52 00:03:15,760 --> 00:03:17,119 Speaker 4: of the story to life as well. 53 00:03:17,200 --> 00:03:17,440 Speaker 6: Kathy. 54 00:03:17,480 --> 00:03:18,840 Speaker 2: I've got to answer you this though, to follow up 55 00:03:18,840 --> 00:03:22,080 Speaker 2: on Lisa's question. If you wouldn't sell, if he wasn't CEO, 56 00:03:22,960 --> 00:03:24,880 Speaker 2: then why should we pay him that much to be 57 00:03:24,960 --> 00:03:25,440 Speaker 2: the CEO. 58 00:03:26,720 --> 00:03:32,679 Speaker 4: What I'm saying is we would feel comfortable with robotaxi 59 00:03:32,880 --> 00:03:35,840 Speaker 4: part of the model, but we would not be able 60 00:03:35,880 --> 00:03:40,800 Speaker 4: to build with confidence the humanoid robot part of the model. 61 00:03:41,400 --> 00:03:46,120 Speaker 4: So over time, of course, as the story would depend 62 00:03:46,240 --> 00:03:48,720 Speaker 4: more and more on that leg of the story, we 63 00:03:48,760 --> 00:03:50,280 Speaker 4: would be taking our position down. 64 00:03:50,560 --> 00:03:53,640 Speaker 5: You talked earlier, Kathy, in the past couple of days 65 00:03:53,800 --> 00:03:56,720 Speaker 5: about this reality check that's going on in the tech sector, 66 00:03:57,240 --> 00:03:59,880 Speaker 5: and I understand that Tesla is sort of in its 67 00:04:00,240 --> 00:04:02,680 Speaker 5: place that you do hold them for the long term. 68 00:04:03,160 --> 00:04:05,760 Speaker 5: How do you understand the reality check that's currently going 69 00:04:05,840 --> 00:04:08,760 Speaker 5: on within a lot of the biggest tech stocks and 70 00:04:08,840 --> 00:04:11,280 Speaker 5: the sense of skepticism about whether they can keep growing 71 00:04:11,280 --> 00:04:14,720 Speaker 5: at that rate versus the long term bullish bet. 72 00:04:15,880 --> 00:04:18,800 Speaker 4: You know, I'm really happy that there is so much 73 00:04:18,839 --> 00:04:22,080 Speaker 4: skepticism out there. Anyone who went through the late nineties 74 00:04:23,000 --> 00:04:27,040 Speaker 4: will remember there was no skepticism, and we had valuations 75 00:04:27,480 --> 00:04:31,359 Speaker 4: based on the number of eyeballs on a website maybe 76 00:04:31,440 --> 00:04:36,479 Speaker 4: ten years from then. We're not seeing that right now, 77 00:04:36,480 --> 00:04:39,880 Speaker 4: we are seeing Wait a minute, they're spending a lot 78 00:04:39,920 --> 00:04:44,239 Speaker 4: of money on these data centers. This is a little 79 00:04:44,240 --> 00:04:47,600 Speaker 4: bit of a different story than I was investing in, 80 00:04:47,720 --> 00:04:50,560 Speaker 4: certainly in terms of when I say I the average 81 00:04:50,560 --> 00:04:54,680 Speaker 4: investor was investing in with the mag six, those were 82 00:04:54,760 --> 00:05:02,200 Speaker 4: just cash cows and had huge cash positions. Something's changing here. 83 00:05:02,320 --> 00:05:08,880 Speaker 4: It's making the typical investor a little more i'll say, skeptical. 84 00:05:09,640 --> 00:05:13,040 Speaker 4: This is not just the cash register ringing anymore. This 85 00:05:13,160 --> 00:05:16,200 Speaker 4: is wait, a big bet on the future. So I'm 86 00:05:16,240 --> 00:05:17,480 Speaker 4: happy there's skepticism. 87 00:05:17,520 --> 00:05:18,360 Speaker 3: I think it's a good thing. 88 00:05:18,640 --> 00:05:20,760 Speaker 5: Are you buying right now? Are you seeing the skepticism 89 00:05:20,839 --> 00:05:23,280 Speaker 5: as a chance to build some of your portfolio. 90 00:05:23,880 --> 00:05:29,279 Speaker 4: Oh sure, you know, And probably the most undervalued part 91 00:05:29,480 --> 00:05:33,520 Speaker 4: of our portfolios is in life sciences healthcare, because we 92 00:05:33,600 --> 00:05:37,919 Speaker 4: think that is going to present the most profound application 93 00:05:38,560 --> 00:05:43,480 Speaker 4: of AI out there, and yet it is highly underappreciated 94 00:05:43,600 --> 00:05:47,080 Speaker 4: because you know, healthcare analysts aren't comfortable with tech, and 95 00:05:47,160 --> 00:05:50,600 Speaker 4: tech analysts aren't comfortable with healthcare. And you know, we've 96 00:05:50,640 --> 00:05:53,279 Speaker 4: got a very siloed ecosystem in terms of the way 97 00:05:53,360 --> 00:05:57,120 Speaker 4: research is done at ARC. We're very focused on the 98 00:05:57,240 --> 00:06:00,679 Speaker 4: technologies first and how they're going to scale a sectors. 99 00:06:00,720 --> 00:06:04,440 Speaker 4: So our analysts are organized by technology and we think 100 00:06:04,440 --> 00:06:06,000 Speaker 4: there's a huge inefficiency there. 101 00:06:07,279 --> 00:06:10,760 Speaker 2: Stay with us. More Bloomberg surveillance coming up after this 102 00:06:20,680 --> 00:06:23,320 Speaker 2: of principle asset management writing where there are threats to 103 00:06:23,360 --> 00:06:27,640 Speaker 2: the risk on stands, particularly amidst lofty valuations. Fundamentals continue 104 00:06:27,760 --> 00:06:30,480 Speaker 2: to underpin markets. Seema joint us Now for more Seema, 105 00:06:30,480 --> 00:06:33,839 Speaker 2: welcome to the program. Meta last week, Palan, AMD and 106 00:06:33,880 --> 00:06:37,520 Speaker 2: now quoll Com all reporting fairly decent numbers for most 107 00:06:37,560 --> 00:06:40,200 Speaker 2: of them, and this equity market has pushed back. What's 108 00:06:40,240 --> 00:06:41,240 Speaker 2: the signal you take from that? 109 00:06:42,240 --> 00:06:43,360 Speaker 3: Hi, John, Thanks having on. 110 00:06:44,040 --> 00:06:46,520 Speaker 7: Yeah, it's been really interesting this earning season to see 111 00:06:46,520 --> 00:06:50,400 Speaker 7: how the market is punching companies even as they're continuing 112 00:06:50,400 --> 00:06:52,960 Speaker 7: to deliver, And I think that speaks to a lot 113 00:06:53,000 --> 00:06:56,279 Speaker 7: of skepticism within the market, which is certainly started to 114 00:06:56,279 --> 00:06:58,719 Speaker 7: really gain momentum I think within the last few weeks 115 00:06:58,720 --> 00:07:01,560 Speaker 7: as well, probably around the size, you know, the kind 116 00:07:01,560 --> 00:07:03,920 Speaker 7: of the size of numbers that we're seeing with regards 117 00:07:03,920 --> 00:07:06,920 Speaker 7: to the A cavax, the hope that these companies are 118 00:07:06,920 --> 00:07:09,880 Speaker 7: really going to continue to promise on some of the 119 00:07:09,880 --> 00:07:11,160 Speaker 7: productivity gains that they. 120 00:07:11,040 --> 00:07:14,640 Speaker 3: Have, so I think the jury is out. 121 00:07:14,680 --> 00:07:16,440 Speaker 7: What we're trying to do is look through some of 122 00:07:16,440 --> 00:07:18,720 Speaker 7: the noise, some of the fears that may be around 123 00:07:19,240 --> 00:07:21,040 Speaker 7: and thinking, want to look look at the earning story, 124 00:07:21,080 --> 00:07:22,240 Speaker 7: look at the macro backdrop. 125 00:07:22,360 --> 00:07:25,680 Speaker 3: There are concerns, absolutely, but in terms. 126 00:07:25,400 --> 00:07:27,760 Speaker 7: Of the data that we're getting through from companies, we 127 00:07:27,800 --> 00:07:31,360 Speaker 7: still have some confidence that this economy can continue to 128 00:07:31,360 --> 00:07:34,840 Speaker 7: perform and companies accroad a broad spectrum can also continue 129 00:07:34,840 --> 00:07:35,400 Speaker 7: to perform too. 130 00:07:35,600 --> 00:07:36,960 Speaker 2: Or say, well, let's talk about some of the good 131 00:07:36,960 --> 00:07:39,560 Speaker 2: news in the last day or so, I some services 132 00:07:39,600 --> 00:07:41,520 Speaker 2: a nice ubside surprise. Do you think that's a sign 133 00:07:41,560 --> 00:07:43,120 Speaker 2: of things to come in our future. 134 00:07:44,320 --> 00:07:47,040 Speaker 7: I'm not sure it's necessarily a sign of things to come. 135 00:07:47,040 --> 00:07:48,840 Speaker 7: And when we're we're taking a step back and we're 136 00:07:48,840 --> 00:07:51,240 Speaker 7: looking at the economy, putting all the data as much 137 00:07:51,520 --> 00:07:54,120 Speaker 7: of it as we have, what we see as an 138 00:07:54,120 --> 00:07:56,960 Speaker 7: economy which is likely to slow down from its current pace, 139 00:07:57,320 --> 00:07:59,720 Speaker 7: is probably going to come down sometime during twenty twenty 140 00:07:59,760 --> 00:08:02,840 Speaker 7: six closer to a trend level. Now that is okay, 141 00:08:02,920 --> 00:08:05,400 Speaker 7: it's not wonderful, but it is still an economy that 142 00:08:05,480 --> 00:08:09,520 Speaker 7: is growing, and so earnings can continue to do well. 143 00:08:09,720 --> 00:08:11,560 Speaker 7: The more concerning pitch, of course, which we have to 144 00:08:11,600 --> 00:08:13,320 Speaker 7: take more notice of, and of course the Fed is 145 00:08:13,360 --> 00:08:15,600 Speaker 7: going to be debating, so much is really around that 146 00:08:15,680 --> 00:08:18,240 Speaker 7: labor market picture. So when we're talking about our forecast, 147 00:08:18,560 --> 00:08:20,520 Speaker 7: we are building in the assumption that the Fed is 148 00:08:20,560 --> 00:08:23,280 Speaker 7: going to continue to deliver some rate cards in order 149 00:08:23,360 --> 00:08:25,920 Speaker 7: to make sure that whatever weaknesses there is in the 150 00:08:26,000 --> 00:08:28,600 Speaker 7: labor market aren't allowed to accelerate. So a lot of 151 00:08:28,600 --> 00:08:31,280 Speaker 7: it is actually resting on this assumption that there continues 152 00:08:31,320 --> 00:08:33,679 Speaker 7: to be some support coming in from policymakers. 153 00:08:34,400 --> 00:08:36,679 Speaker 5: This really goes to the contradiction of the moment where 154 00:08:36,760 --> 00:08:39,360 Speaker 5: you're talking about maybe a slowing in the economy. Some 155 00:08:39,400 --> 00:08:42,760 Speaker 5: people are talking about a reacceleration in the economy, but 156 00:08:42,840 --> 00:08:45,839 Speaker 5: not necessarily in the labor picture. In other words, reacceleration 157 00:08:45,880 --> 00:08:48,160 Speaker 5: of profits from companies that are getting nimble with using 158 00:08:48,200 --> 00:08:51,280 Speaker 5: AI and other efficiencies of scale, while people are not 159 00:08:51,559 --> 00:08:54,520 Speaker 5: finding jobs as easily and wages are not keeping pace. 160 00:08:54,920 --> 00:08:57,480 Speaker 5: As an investor, does that make you more reluctant to 161 00:08:57,559 --> 00:08:59,840 Speaker 5: invest in the United States, or frankly, does it give 162 00:08:59,880 --> 00:09:03,000 Speaker 5: you confidence in the corporate dynamism story of the United States, 163 00:09:03,040 --> 00:09:06,200 Speaker 5: regardless of what happens to the underlying jobs economy. 164 00:09:07,040 --> 00:09:08,880 Speaker 7: It is such an important question, Lisa, and I think 165 00:09:08,880 --> 00:09:12,319 Speaker 7: that question is coming about sooner than people have been anticipating. 166 00:09:12,600 --> 00:09:15,400 Speaker 7: I mean, ultimately, we're in this environment where the structural 167 00:09:16,000 --> 00:09:19,880 Speaker 7: impact of AI both on labor, on wages and then 168 00:09:19,960 --> 00:09:22,960 Speaker 7: general growth and essentially the kind of the bifurcation between 169 00:09:23,000 --> 00:09:25,360 Speaker 7: what's happening in the labor market and earnings growth, and 170 00:09:25,400 --> 00:09:28,800 Speaker 7: it's making it really difficult to try to decipher what 171 00:09:28,840 --> 00:09:30,600 Speaker 7: the new structure of the economy is, what the impact 172 00:09:30,640 --> 00:09:32,720 Speaker 7: is is, and also how the FED is going to 173 00:09:32,720 --> 00:09:36,560 Speaker 7: be responding. In this backdrop, we have to go with, 174 00:09:36,720 --> 00:09:40,240 Speaker 7: I think, clearly diversification, but still this focus on the 175 00:09:40,320 --> 00:09:44,640 Speaker 7: US because it continues to be the most robust, you know, 176 00:09:44,920 --> 00:09:47,640 Speaker 7: the companies with the strongest balance shees continue to play 177 00:09:47,640 --> 00:09:48,440 Speaker 7: out in the US. 178 00:09:48,880 --> 00:09:49,719 Speaker 3: But also at the. 179 00:09:49,640 --> 00:09:52,680 Speaker 7: Same time thinking about where else can we deploy to 180 00:09:52,840 --> 00:09:57,000 Speaker 7: ensure that we are maintaining some kind of diversification against 181 00:09:57,040 --> 00:09:58,960 Speaker 7: the risk that things do start to turn a little 182 00:09:59,000 --> 00:10:01,560 Speaker 7: bit more negative, both from a cyclical side and of 183 00:10:01,559 --> 00:10:02,840 Speaker 7: course on a structural side too. 184 00:10:03,040 --> 00:10:05,240 Speaker 5: So in other words, to sell America trade is over. 185 00:10:05,600 --> 00:10:08,560 Speaker 5: It might be diversify around the edges, but the US 186 00:10:08,640 --> 00:10:10,959 Speaker 5: still is the place that is supposed to be the 187 00:10:11,000 --> 00:10:12,280 Speaker 5: growth engine for the world. 188 00:10:12,440 --> 00:10:16,040 Speaker 3: Is that correct? That is exactly right, So we continue. 189 00:10:16,080 --> 00:10:18,880 Speaker 7: Look, we have skepticism, some concerns I think healthy skepticism 190 00:10:18,920 --> 00:10:21,800 Speaker 7: around the AI story and how these companies are ultimately 191 00:10:21,800 --> 00:10:23,760 Speaker 7: going to deliver, But we do believe in the narrative. 192 00:10:24,400 --> 00:10:26,480 Speaker 3: If you believe in that, then really you should still 193 00:10:26,520 --> 00:10:27,840 Speaker 3: be focused on the US. 194 00:10:28,400 --> 00:10:31,480 Speaker 7: Other countries around the world, specifically Europe for example, just 195 00:10:31,559 --> 00:10:33,920 Speaker 7: doesn't have the same kind of prowess now. At the 196 00:10:33,960 --> 00:10:36,800 Speaker 7: same time, because of those concerns are on AI having 197 00:10:36,880 --> 00:10:40,520 Speaker 7: some diversification in companies across Europe once it maybe can 198 00:10:40,640 --> 00:10:43,679 Speaker 7: leverage on some of the structural benefits that could come 199 00:10:43,679 --> 00:10:45,800 Speaker 7: out from AI. Still, but the other parts of the 200 00:10:45,840 --> 00:10:49,240 Speaker 7: cyclical story is important. And then of course across asset classes. 201 00:10:49,520 --> 00:10:52,640 Speaker 7: So it's not just about regions, but it's about asset classes, equity, 202 00:10:52,679 --> 00:10:55,760 Speaker 7: fixed income, infrastructure, some areas that you can feel some 203 00:10:55,800 --> 00:10:57,560 Speaker 7: safety in this kind of environment. 204 00:10:57,679 --> 00:10:59,760 Speaker 2: See and can we finish on trade? Some key fliers 205 00:10:59,800 --> 00:11:02,960 Speaker 2: on a Supreme Court sounding deeply skeptical of the president's 206 00:11:03,000 --> 00:11:05,839 Speaker 2: broad sweeping trade effort. It remains now I think the 207 00:11:05,920 --> 00:11:09,560 Speaker 2: consensus for you coming into Thursday that these tariffs won't last, 208 00:11:09,559 --> 00:11:11,600 Speaker 2: they'll be struck down by the Supreme Court. How well 209 00:11:11,640 --> 00:11:14,000 Speaker 2: priced is that story, How well understood is it. 210 00:11:14,840 --> 00:11:16,960 Speaker 7: I'm not sure it's necessarily very well understood, But I 211 00:11:16,960 --> 00:11:19,520 Speaker 7: think what the market is assuming here is that even 212 00:11:19,520 --> 00:11:23,360 Speaker 7: if they're struck down, the Trump administration will find alternative avenues. 213 00:11:23,720 --> 00:11:26,600 Speaker 7: So we do, for example, think that trade tariffs are 214 00:11:26,600 --> 00:11:28,080 Speaker 7: old when you're going to rise a little bit further 215 00:11:28,120 --> 00:11:30,160 Speaker 7: from here, even in the event that they're struck off. 216 00:11:30,840 --> 00:11:32,760 Speaker 7: I think the bigger question mark is something you've been 217 00:11:33,200 --> 00:11:35,839 Speaker 7: alluding to just earlier, which is what is a near 218 00:11:35,880 --> 00:11:39,080 Speaker 7: to mimpat in terms of revenues from the fiscal story, 219 00:11:39,160 --> 00:11:40,920 Speaker 7: and what is the impact on the bond market going 220 00:11:40,960 --> 00:11:42,440 Speaker 7: to be. I think that's going to be really the 221 00:11:42,440 --> 00:11:45,440 Speaker 7: focus for the market over the coming months with regards 222 00:11:45,480 --> 00:11:46,280 Speaker 7: to that trade story. 223 00:11:46,760 --> 00:11:50,280 Speaker 2: Stay with us more Bloomberg surveillance coming up after this. 224 00:11:58,920 --> 00:12:01,480 Speaker 2: Let's turn to the Federalist of recent dissents highlighting the 225 00:12:01,559 --> 00:12:04,400 Speaker 2: lack of consensus of that institution as the Central Bank 226 00:12:04,440 --> 00:12:07,360 Speaker 2: struggles with a data drought. The former Kansas City FED 227 00:12:07,360 --> 00:12:09,400 Speaker 2: president as the George joins us now for more. As 228 00:12:09,440 --> 00:12:11,240 Speaker 2: the way, we're just tracking that story with Mike McKay. 229 00:12:11,280 --> 00:12:13,120 Speaker 2: I'm sure you were following along. Do you think's fed 230 00:12:13,120 --> 00:12:16,160 Speaker 2: a reserve is attempting to address a structural problem with 231 00:12:16,280 --> 00:12:16,880 Speaker 2: interest rates? 232 00:12:18,000 --> 00:12:18,240 Speaker 6: Yes? 233 00:12:18,280 --> 00:12:20,680 Speaker 1: I do, Jonathan, and I think that's what makes this 234 00:12:20,840 --> 00:12:23,000 Speaker 1: so challenging for the committee. 235 00:12:23,200 --> 00:12:24,760 Speaker 3: You can't ignore the. 236 00:12:24,640 --> 00:12:27,520 Speaker 1: Story you just heard, which is there's something going on 237 00:12:27,600 --> 00:12:31,000 Speaker 1: in the labor market. Things are moving in a way, 238 00:12:31,280 --> 00:12:34,920 Speaker 1: and yet you can't really put your finger on is 239 00:12:34,960 --> 00:12:38,160 Speaker 1: this change happening in real time? Is this going to 240 00:12:38,240 --> 00:12:42,320 Speaker 1: settle out to a more stable view of what's going 241 00:12:42,400 --> 00:12:46,120 Speaker 1: on with that labor market, particularly when you are looking 242 00:12:46,160 --> 00:12:49,360 Speaker 1: at what I would characterize as easy financial conditions and 243 00:12:49,440 --> 00:12:52,600 Speaker 1: many of the other traditional signs that would go along 244 00:12:52,840 --> 00:12:57,560 Speaker 1: with this labor market data would lead you to think 245 00:12:57,600 --> 00:13:01,480 Speaker 1: something different. So it is a challenging time and those 246 00:13:01,520 --> 00:13:04,640 Speaker 1: cross currents of information and data are making it a 247 00:13:04,679 --> 00:13:06,920 Speaker 1: tough job for the FMC, and it's an. 248 00:13:06,880 --> 00:13:10,480 Speaker 5: Even tougher job for investors to understand how the FOMC 249 00:13:10,520 --> 00:13:12,640 Speaker 5: is going to respond to that data because the reaction 250 00:13:12,760 --> 00:13:15,280 Speaker 5: function doesn't seem clear. You have a lot of descent, 251 00:13:15,360 --> 00:13:17,880 Speaker 5: and you've got a lot of fissures on the committee, 252 00:13:17,920 --> 00:13:21,240 Speaker 5: but you also have, frankly, a question of how much 253 00:13:21,280 --> 00:13:23,920 Speaker 5: they're looking at the unemployment rate versus the actual total 254 00:13:24,000 --> 00:13:26,960 Speaker 5: number of jobs, and how much that's taking priority over inflation. 255 00:13:27,120 --> 00:13:29,560 Speaker 5: Do you have a greater sense of what that reaction 256 00:13:29,679 --> 00:13:30,280 Speaker 5: function is? 257 00:13:31,880 --> 00:13:34,960 Speaker 1: Well, I do not, Lisa, and I think you see 258 00:13:35,000 --> 00:13:38,000 Speaker 1: that in the discussion at the committee level, which is 259 00:13:38,040 --> 00:13:42,440 Speaker 1: to say where are we putting our weight. In September, 260 00:13:42,679 --> 00:13:45,440 Speaker 1: the Committee came out very clearly and said we're putting 261 00:13:45,440 --> 00:13:48,119 Speaker 1: our weight on the labor market. When we see this softening, 262 00:13:48,679 --> 00:13:52,200 Speaker 1: we're inclined to bring our policy rate back to something 263 00:13:52,280 --> 00:13:56,440 Speaker 1: that we are guessing is more normal than where it 264 00:13:56,480 --> 00:13:59,920 Speaker 1: currently sits, and that narrative is held through to two meeting, 265 00:14:00,679 --> 00:14:04,280 Speaker 1: and this meeting, of course we got the question mark, 266 00:14:04,320 --> 00:14:08,040 Speaker 1: I think of whether that narrative would continue. So the 267 00:14:08,840 --> 00:14:11,600 Speaker 1: information coming in and the fact that you don't have 268 00:14:11,800 --> 00:14:15,000 Speaker 1: official data to back up some of those views, it's 269 00:14:15,040 --> 00:14:18,720 Speaker 1: going to make this I think difficult for individual members 270 00:14:18,760 --> 00:14:23,800 Speaker 1: to really reconcile their views and come to terms with that. 271 00:14:24,400 --> 00:14:26,800 Speaker 5: Is this a FED that has a dual mandate still 272 00:14:27,000 --> 00:14:29,360 Speaker 5: or does it have more mandates than that? And I 273 00:14:29,400 --> 00:14:33,200 Speaker 5: wonder if it's also keeping interest rates within a reasonable level, 274 00:14:33,320 --> 00:14:35,920 Speaker 5: especially with the deficit where it is, if that's an 275 00:14:36,000 --> 00:14:40,360 Speaker 5: increasing factor, even if not verbalized in the back of 276 00:14:40,400 --> 00:14:41,400 Speaker 5: people's heads. 277 00:14:42,480 --> 00:14:45,280 Speaker 1: Well, it is the idea that the FED needs to 278 00:14:45,320 --> 00:14:48,640 Speaker 1: keep rates low to assist the federal government's debt position 279 00:14:48,840 --> 00:14:53,000 Speaker 1: is certainly not one of its mandates. Notwithstanding the pressure 280 00:14:53,040 --> 00:14:55,640 Speaker 1: that you see coming from various corners to try to 281 00:14:56,000 --> 00:14:59,040 Speaker 1: accommodate that, it is going to become, I think an 282 00:14:59,040 --> 00:15:04,560 Speaker 1: increasingly difficult issue that will intersect with monetary policy because 283 00:15:05,160 --> 00:15:09,120 Speaker 1: we know that these higher debt levels without some plan 284 00:15:09,240 --> 00:15:13,840 Speaker 1: in place, to bring those deficit spendings down are going 285 00:15:13,880 --> 00:15:15,880 Speaker 1: to put pressure on the Fed. It will put higher 286 00:15:15,920 --> 00:15:19,360 Speaker 1: interest rates in front of them. Inflation issues will begin 287 00:15:19,440 --> 00:15:23,920 Speaker 1: to become more dominant, I think. And so that intersection 288 00:15:24,400 --> 00:15:28,040 Speaker 1: is a very difficult one for a monetary policy group 289 00:15:28,120 --> 00:15:33,440 Speaker 1: that is assigned to judge labor markets and price stability 290 00:15:33,920 --> 00:15:34,720 Speaker 1: in their mandate. 291 00:15:35,080 --> 00:15:37,320 Speaker 2: Aster we do you think will be on December tenth? 292 00:15:37,520 --> 00:15:39,200 Speaker 2: I've got no idea how much dates it will have. 293 00:15:39,240 --> 00:15:41,120 Speaker 2: Do you think we could settle any of these debates 294 00:15:41,240 --> 00:15:43,720 Speaker 2: by the time we get to the middle of next month. 295 00:15:44,680 --> 00:15:47,200 Speaker 1: Well, it doesn't seem likely. And Jonathan, what you hope 296 00:15:47,280 --> 00:15:49,920 Speaker 1: is whenever you're in a period of uncertainty and trying 297 00:15:49,960 --> 00:15:54,040 Speaker 1: to weigh the risk that you don't get an unexpected 298 00:15:54,080 --> 00:15:57,480 Speaker 1: shock to the economy. And again, I don't see anything 299 00:15:57,520 --> 00:16:01,880 Speaker 1: out there that says we resolve this uncertain But I 300 00:16:01,880 --> 00:16:04,000 Speaker 1: think that's why it makes it a difficult time for 301 00:16:04,080 --> 00:16:08,880 Speaker 1: this committee to reconcile views, is because that uncertainty looks 302 00:16:08,960 --> 00:16:11,000 Speaker 1: like it is going to persist for some time. 303 00:16:11,160 --> 00:16:13,600 Speaker 2: So is that another way of saying that race might 304 00:16:13,720 --> 00:16:16,400 Speaker 2: remain on hold for some time, at least until say, 305 00:16:16,400 --> 00:16:17,280 Speaker 2: spring of next year. 306 00:16:18,760 --> 00:16:20,760 Speaker 1: Well, they could, and you're going to have people argue 307 00:16:20,800 --> 00:16:24,240 Speaker 1: for that for sure. But I also think the committee 308 00:16:24,280 --> 00:16:27,320 Speaker 1: will have to wrestle with the narrative of the labor 309 00:16:27,400 --> 00:16:31,960 Speaker 1: market signs of weakening, and that was the beginning of 310 00:16:32,000 --> 00:16:34,360 Speaker 1: their rate cut, So the Chairman's put the markets on 311 00:16:34,480 --> 00:16:38,240 Speaker 1: notice not to presume that that cut is coming. On 312 00:16:38,280 --> 00:16:42,320 Speaker 1: the other hand, if the data, however informal, however pieced 313 00:16:42,360 --> 00:16:45,800 Speaker 1: together it might be, does not change that narrative, they 314 00:16:45,840 --> 00:16:48,120 Speaker 1: could be inclined to continue that cutting cycle. 315 00:16:48,320 --> 00:16:51,200 Speaker 5: As tu. If the Supreme Court overturns the president's use 316 00:16:51,200 --> 00:16:54,080 Speaker 5: of IEPA for tariffs, and you don't have that revenue 317 00:16:54,080 --> 00:16:57,360 Speaker 5: coming in, and that isn't necessarily any kind of discussion 318 00:16:57,360 --> 00:17:00,360 Speaker 5: on the inflationary pressure. If that money gets refunded, do 319 00:17:00,400 --> 00:17:04,120 Speaker 5: you think that gives the incentive to the frenteral reserves 320 00:17:04,119 --> 00:17:06,399 Speaker 5: the FOMC to cut rates more aggressively. 321 00:17:08,320 --> 00:17:09,720 Speaker 3: Well, not necessarily, Lison. 322 00:17:09,800 --> 00:17:12,159 Speaker 1: The reason I think that is because I think this 323 00:17:12,359 --> 00:17:17,359 Speaker 1: throws another log of uncertainty onto the fire. If the 324 00:17:17,400 --> 00:17:22,320 Speaker 1: federal government has to do something different with those tariffs, 325 00:17:22,920 --> 00:17:26,560 Speaker 1: that then raised the prospect of where do we find 326 00:17:26,800 --> 00:17:28,040 Speaker 1: that happening? 327 00:17:28,400 --> 00:17:29,680 Speaker 3: Will it be sectorial. 328 00:17:29,920 --> 00:17:33,880 Speaker 1: Is it going to be in terms of lowering revenues 329 00:17:34,119 --> 00:17:38,040 Speaker 1: immediately or in the long term. It is another, I 330 00:17:38,080 --> 00:17:44,320 Speaker 1: think reminder of why it is so important for policy makers, 331 00:17:44,840 --> 00:17:47,760 Speaker 1: not at the FED, but policymakers that are thinking about 332 00:17:47,760 --> 00:17:52,040 Speaker 1: our fiscal situation to really begin to be more forward 333 00:17:52,119 --> 00:17:55,360 Speaker 1: looking about what we face as a way to lay 334 00:17:55,680 --> 00:18:00,240 Speaker 1: a foundation for future economic growth, because right now we're 335 00:18:00,240 --> 00:18:02,720 Speaker 1: in a bit of a soup that isn't isn't providing 336 00:18:02,800 --> 00:18:05,480 Speaker 1: the kind of foundation that I think we need. 337 00:18:06,040 --> 00:18:09,560 Speaker 2: Stay with us more Bloomberg surveillance coming up after this 338 00:18:18,240 --> 00:18:20,800 Speaker 2: track in the White House, and the President Lisa doesn't 339 00:18:20,800 --> 00:18:22,920 Speaker 2: appear that this is on top of the priority list 340 00:18:22,920 --> 00:18:25,040 Speaker 2: for them this week. The major one in the last 341 00:18:25,080 --> 00:18:26,520 Speaker 2: week has been the last twenty four hours at the 342 00:18:26,560 --> 00:18:27,280 Speaker 2: Supreme Court. 343 00:18:27,400 --> 00:18:29,920 Speaker 5: There's been more commentary about that. Yes, we are hearing 344 00:18:29,960 --> 00:18:31,840 Speaker 5: about ratcheting up the pressure and I'm looking and if 345 00:18:31,840 --> 00:18:34,480 Speaker 5: you're leaving any major airport anywhere around the country, you 346 00:18:34,520 --> 00:18:36,240 Speaker 5: will get to laid at some point. That's basically the 347 00:18:36,440 --> 00:18:39,760 Speaker 5: takeaway here. Nonetheless, the focus really is will the primary 348 00:18:39,880 --> 00:18:43,000 Speaker 5: trade objective get overturned by the top court in the 349 00:18:43,080 --> 00:18:44,760 Speaker 5: United States, and what are the consequences of that. 350 00:18:44,920 --> 00:18:46,600 Speaker 2: This at the moment just background noise. Of course, that 351 00:18:46,600 --> 00:18:48,480 Speaker 2: could change, but certainly at the moment, just kind of 352 00:18:48,480 --> 00:18:50,720 Speaker 2: background noise. John Lieber, if you're RAIS a group is 353 00:18:50,720 --> 00:18:52,280 Speaker 2: in a studio here in New York for more, johnk 354 00:18:52,280 --> 00:18:55,520 Speaker 2: and Mornich, let's start with trade. How instructive was yesterday's 355 00:18:55,520 --> 00:18:56,440 Speaker 2: hearing for you and the team? 356 00:18:56,480 --> 00:18:56,960 Speaker 6: I thought it was. 357 00:18:57,520 --> 00:19:00,000 Speaker 8: I mean, the justices were clearly skeptical of the government's argument. 358 00:19:00,240 --> 00:19:02,840 Speaker 8: So if I'm the Trump administration, I'm not feeling great 359 00:19:02,880 --> 00:19:04,960 Speaker 8: about the ability the fact that the court is going 360 00:19:05,000 --> 00:19:08,880 Speaker 8: to uphold my signature project right now, and if that happens, 361 00:19:09,119 --> 00:19:11,640 Speaker 8: there's a lot of uncertainty in questions that generates, such 362 00:19:11,680 --> 00:19:15,600 Speaker 8: as will there be refunds generated for people who paid 363 00:19:15,600 --> 00:19:18,320 Speaker 8: the tariffs already? And what's the fiscal path going forward? 364 00:19:18,320 --> 00:19:20,520 Speaker 8: Because this is for trillion dollars in revenue over the 365 00:19:20,600 --> 00:19:23,160 Speaker 8: next four years. They'll be able to recreate that wall 366 00:19:23,200 --> 00:19:25,719 Speaker 8: through other methods over time, but there's going to be 367 00:19:25,960 --> 00:19:28,400 Speaker 8: This introduces a big dose of uncertainty into twenty twenty 368 00:19:28,480 --> 00:19:31,520 Speaker 8: six on who's getting tariffs, what does it mean for 369 00:19:31,560 --> 00:19:33,720 Speaker 8: the status of the deals that have been struck with Japan, 370 00:19:33,800 --> 00:19:36,720 Speaker 8: with Korea, with China, with the UK, and I think 371 00:19:36,720 --> 00:19:39,280 Speaker 8: the administration doesn't isn't offering answers to that right now. 372 00:19:39,320 --> 00:19:41,719 Speaker 8: They're hoping the court sides with them. But there's at 373 00:19:41,800 --> 00:19:45,480 Speaker 8: least three conservative justices that looked very skeptical of their 374 00:19:45,560 --> 00:19:49,359 Speaker 8: arguments yesterday, and it does look more today more like 375 00:19:49,359 --> 00:19:51,399 Speaker 8: those tariffs will be struck down than it did two 376 00:19:51,480 --> 00:19:51,880 Speaker 8: days ago. 377 00:19:51,960 --> 00:19:54,879 Speaker 5: How surprised were you that there was such definitive tone 378 00:19:55,000 --> 00:19:57,320 Speaker 5: out of the Supreme Court justices, including those in the 379 00:19:57,320 --> 00:20:01,200 Speaker 5: conservative block of the court give and that pretty much 380 00:20:01,280 --> 00:20:03,879 Speaker 5: most people were expecting that they would okay this, they 381 00:20:03,880 --> 00:20:06,120 Speaker 5: would essentially sign off on it, as they have other 382 00:20:06,119 --> 00:20:07,280 Speaker 5: initiatives by the president. 383 00:20:07,320 --> 00:20:09,200 Speaker 8: Well, if you look at the lower court arguments, they're 384 00:20:09,240 --> 00:20:12,240 Speaker 8: pretty solid. I mean, this is the terroiffs have raised 385 00:20:12,240 --> 00:20:14,879 Speaker 8: a number of questions as the presidential authority. You know, 386 00:20:14,880 --> 00:20:17,280 Speaker 8: there's questions about whether or not the power to regulate 387 00:20:17,359 --> 00:20:20,200 Speaker 8: trade includes the power of attacks. That's something that Neil 388 00:20:20,240 --> 00:20:23,000 Speaker 8: Gorsich was focused on. And then some of these tariffs 389 00:20:23,040 --> 00:20:25,760 Speaker 8: I think are just clearly not related to national security 390 00:20:25,800 --> 00:20:28,280 Speaker 8: at all. You can't put tariffs on Brazil because you 391 00:20:28,280 --> 00:20:30,639 Speaker 8: don't like the way they're treating your political ally and 392 00:20:30,680 --> 00:20:34,159 Speaker 8: then claim that's an economic national security emergency. I think 393 00:20:34,200 --> 00:20:36,679 Speaker 8: there's obviously some tariffs here that are weaker, and there 394 00:20:36,680 --> 00:20:39,400 Speaker 8: are some that are potentially stronger, like the fentanyl tariffs, 395 00:20:39,520 --> 00:20:41,480 Speaker 8: which you could claim is an emergency. 396 00:20:41,720 --> 00:20:44,240 Speaker 5: Is President Trump losing his clutch over the narrative? And 397 00:20:44,280 --> 00:20:47,040 Speaker 5: I say this given that he really dominated the Republican Party, 398 00:20:47,240 --> 00:20:51,120 Speaker 5: But now you have conservative leading justices talking about tariff's attacks, 399 00:20:51,400 --> 00:20:54,320 Speaker 5: which is exactly what he is pushing back against, and 400 00:20:54,560 --> 00:20:57,199 Speaker 5: talking about things that Democrats have been talking about for 401 00:20:57,200 --> 00:20:59,879 Speaker 5: a while. Do you think that this is significant regarding 402 00:21:00,240 --> 00:21:03,280 Speaker 5: a broader shift that you're seeing in the political mindset. 403 00:21:03,359 --> 00:21:05,240 Speaker 8: I think it was only a matter of time before 404 00:21:05,240 --> 00:21:07,600 Speaker 8: we started to see some of the institutions that govern 405 00:21:07,680 --> 00:21:10,040 Speaker 8: the US come back and bite. An executive who's been 406 00:21:10,119 --> 00:21:13,280 Speaker 8: very active and aggressive in his first ten months in office. 407 00:21:13,400 --> 00:21:14,440 Speaker 6: This is his second term. 408 00:21:14,520 --> 00:21:16,280 Speaker 8: He came in with the plan, he came in with 409 00:21:16,320 --> 00:21:18,720 Speaker 8: the people in order to execute on that plan, and 410 00:21:18,760 --> 00:21:21,600 Speaker 8: he's accomplished a lot. He's particularly accomplished a lot in 411 00:21:21,680 --> 00:21:24,399 Speaker 8: foreign policy. But he's going to run into the limits 412 00:21:24,400 --> 00:21:26,479 Speaker 8: of his power at some point. And it's the Supreme 413 00:21:26,480 --> 00:21:28,520 Speaker 8: Court that's the one that's going to be raining him 414 00:21:28,560 --> 00:21:30,639 Speaker 8: back in and I think we saw some evidence of 415 00:21:30,680 --> 00:21:33,639 Speaker 8: that yesterday. I think for investors this is actually an 416 00:21:33,680 --> 00:21:37,480 Speaker 8: important signal because what's this narrative of the US this 417 00:21:37,560 --> 00:21:39,639 Speaker 8: year has been is one of the big questions has 418 00:21:39,680 --> 00:21:41,600 Speaker 8: been is this the US that we know and love? 419 00:21:41,880 --> 00:21:44,680 Speaker 8: Or is something different now? And I think the institutional 420 00:21:44,760 --> 00:21:48,120 Speaker 8: constraints on President Trump is a positive sign for the 421 00:21:48,200 --> 00:21:51,320 Speaker 8: investment community that he can be restrained, that executive power 422 00:21:51,400 --> 00:21:53,680 Speaker 8: is not unlimited, and that the Court still does his job. 423 00:21:53,800 --> 00:21:56,600 Speaker 2: Let's extend this conversation the Supreme Court job. How far 424 00:21:56,600 --> 00:21:57,960 Speaker 2: are they going to take this? Are they going to 425 00:21:58,000 --> 00:22:00,720 Speaker 2: prescribe a refund process? Just how fun will they tyke this? 426 00:22:01,000 --> 00:22:02,320 Speaker 2: The refund process is tough. 427 00:22:02,359 --> 00:22:04,119 Speaker 8: I mean, the court doesn't want to be The Supreme 428 00:22:04,119 --> 00:22:06,720 Speaker 8: Court in particular doesn't want to be the administrator of 429 00:22:06,800 --> 00:22:09,600 Speaker 8: a refund process. There's lots of different ways that this 430 00:22:09,640 --> 00:22:12,359 Speaker 8: could go. They could say everybody who paid a tariff 431 00:22:12,359 --> 00:22:14,439 Speaker 8: so far this year gets a refund and then they 432 00:22:14,440 --> 00:22:16,639 Speaker 8: all get the money back. That seems unlikely, though. What 433 00:22:16,720 --> 00:22:19,320 Speaker 8: looks more likely is that the lower courts are going 434 00:22:19,359 --> 00:22:22,920 Speaker 8: to be charged with administering some kind of refund process. 435 00:22:23,160 --> 00:22:24,879 Speaker 8: We don't know what that looks like. It could be 436 00:22:24,920 --> 00:22:27,920 Speaker 8: the case that individual companies have to sue and say, hey, 437 00:22:27,960 --> 00:22:31,119 Speaker 8: you know there's this law, it's unconstitutional, it's illegal, we 438 00:22:31,200 --> 00:22:33,040 Speaker 8: paid the tariffs, we want our money back, and then 439 00:22:33,080 --> 00:22:35,440 Speaker 8: that works its way through the courts. So that's uncertainty 440 00:22:35,480 --> 00:22:38,000 Speaker 8: that could go for six to twelve months or longer 441 00:22:38,320 --> 00:22:40,800 Speaker 8: next year for those individual companies, even though we know 442 00:22:40,840 --> 00:22:42,720 Speaker 8: at a high level that these tariffs are illegal. 443 00:22:42,800 --> 00:22:44,840 Speaker 2: If this's a guy knife Scott down in Washington day 444 00:22:44,880 --> 00:22:46,159 Speaker 2: say this is going to have to figure out some 445 00:22:46,240 --> 00:22:47,760 Speaker 2: new revenue, why is it going to come from? 446 00:22:47,800 --> 00:22:48,000 Speaker 6: I think? 447 00:22:48,080 --> 00:22:50,520 Speaker 8: I mean, they got plenty of other tools for raising tariffs. 448 00:22:50,520 --> 00:22:52,879 Speaker 8: They're Section one twenty two, which allows I'm sure your 449 00:22:52,920 --> 00:22:54,640 Speaker 8: viewers have all heard these codes by now. It's sectionally 450 00:22:54,680 --> 00:22:57,040 Speaker 8: one twenty two, which allows one hundred and fifty days 451 00:22:57,080 --> 00:22:59,840 Speaker 8: of fifteen percent tariffs. And then there's all these individual 452 00:23:00,080 --> 00:23:02,200 Speaker 8: entry tariffs called the three oh ones. It's how they're 453 00:23:02,240 --> 00:23:04,560 Speaker 8: raising revenue on China. And of course let's not forget 454 00:23:04,600 --> 00:23:07,520 Speaker 8: that some of the most powerful tools that Trump has 455 00:23:07,600 --> 00:23:10,239 Speaker 8: are the sectoral National security tariffs, which are the two 456 00:23:10,320 --> 00:23:12,520 Speaker 8: thirty two. So there's plenty of other tools they have, 457 00:23:12,760 --> 00:23:14,720 Speaker 8: they just have to go through the process of getting there, 458 00:23:14,800 --> 00:23:15,920 Speaker 8: and they haven't yet AIPA. 459 00:23:15,960 --> 00:23:17,600 Speaker 6: It was quick they allowed to give. 460 00:23:17,480 --> 00:23:19,240 Speaker 8: The president a lot of power and allows them to 461 00:23:19,320 --> 00:23:22,080 Speaker 8: change his mind quickly. But these other tools allow a 462 00:23:22,080 --> 00:23:24,640 Speaker 8: little more process and a little more time to put 463 00:23:24,640 --> 00:23:25,119 Speaker 8: into place. 464 00:23:25,400 --> 00:23:27,240 Speaker 5: So it's really good to see you in person. And 465 00:23:27,280 --> 00:23:29,000 Speaker 5: I'm just wondering, when you go back to DC, are 466 00:23:29,040 --> 00:23:29,800 Speaker 5: you going to fly there. 467 00:23:30,000 --> 00:23:31,880 Speaker 6: I'm taking a train. I'm not getting on a plane 468 00:23:31,920 --> 00:23:32,199 Speaker 6: right now. 469 00:23:32,480 --> 00:23:35,440 Speaker 5: I'm just wondering. I'm looking at this and I'm seeing, 470 00:23:35,480 --> 00:23:39,040 Speaker 5: you know, Ronald Reagan, Washington National and seeing LaGuardia and 471 00:23:39,119 --> 00:23:43,639 Speaker 5: seeing pretty much every airport in every major metropolitan area. 472 00:23:43,760 --> 00:23:46,520 Speaker 5: Is this a warning shot from the government essentially saying 473 00:23:46,600 --> 00:23:48,000 Speaker 5: we're going to raise the ante, We're going to make 474 00:23:48,040 --> 00:23:49,399 Speaker 5: you feel this to try to push people to the 475 00:23:49,400 --> 00:23:50,480 Speaker 5: negotiating table sooner. 476 00:23:50,560 --> 00:23:52,920 Speaker 8: Absolutely, And I think the real deadline here it's not today, 477 00:23:52,960 --> 00:23:53,639 Speaker 8: it's not this weekend. 478 00:23:53,720 --> 00:23:54,480 Speaker 6: It's Thanksgiving. 479 00:23:54,520 --> 00:23:57,359 Speaker 8: And you've got millions of American families that are, including mine, 480 00:23:57,400 --> 00:24:00,080 Speaker 8: that's looking forward to traveling on Thanksgiving on a plane, 481 00:24:00,160 --> 00:24:02,120 Speaker 8: and those planes better be flying, and so that means 482 00:24:02,160 --> 00:24:04,760 Speaker 8: the government has to be open by that point. Otherwise 483 00:24:04,760 --> 00:24:07,200 Speaker 8: they're going to have a lot of angry Americans out there. 484 00:24:07,200 --> 00:24:09,080 Speaker 8: So I think that puts a backstop on how long 485 00:24:09,200 --> 00:24:10,160 Speaker 8: this shutdown can end. 486 00:24:10,320 --> 00:24:11,240 Speaker 6: That's two weeks away. 487 00:24:11,440 --> 00:24:13,640 Speaker 8: Still got some time here to negotiate, but they better 488 00:24:13,640 --> 00:24:15,199 Speaker 8: solve this problem by then, or else I'm going to 489 00:24:15,240 --> 00:24:17,000 Speaker 8: be down to the Capitol buility protesting. 490 00:24:17,119 --> 00:24:19,000 Speaker 2: I like that you went to the Washington airports first, 491 00:24:19,040 --> 00:24:22,600 Speaker 2: because this is about inconvencing the polititizens themselves right about 492 00:24:22,600 --> 00:24:23,240 Speaker 2: the rest of the account. 493 00:24:23,640 --> 00:24:24,720 Speaker 6: I mean both to be fair. 494 00:24:24,760 --> 00:24:26,960 Speaker 5: I mean, it's absolutely confise everyone, but they're trying to 495 00:24:27,040 --> 00:24:27,760 Speaker 5: raise the pressure. 496 00:24:28,040 --> 00:24:28,800 Speaker 6: Is this going to work? 497 00:24:28,840 --> 00:24:30,399 Speaker 5: I guess that's my question. Is this going to work 498 00:24:30,440 --> 00:24:33,520 Speaker 5: on the Republicans end? Given the fact that Democrats haven't 499 00:24:33,560 --> 00:24:35,280 Speaker 5: borne the brunt of it so far in the polls? 500 00:24:35,520 --> 00:24:38,479 Speaker 2: Joldn Can we talk about data? What's just data collection? 501 00:24:38,560 --> 00:24:40,800 Speaker 2: Look like, let's say it ends before Thanksgiving because no 502 00:24:40,800 --> 00:24:42,520 Speaker 2: one wants to go through that. I can go with that. 503 00:24:42,600 --> 00:24:45,000 Speaker 2: Let's go with that. I hope that's the case. What 504 00:24:45,080 --> 00:24:46,320 Speaker 2: happens with the dates are after that? 505 00:24:46,680 --> 00:24:48,399 Speaker 6: So you know, in the past. What they've done is 506 00:24:48,400 --> 00:24:50,960 Speaker 6: they've doubled up on data releases when they have the data. 507 00:24:51,000 --> 00:24:53,880 Speaker 8: So they collected the September payroll data, for example, they 508 00:24:53,880 --> 00:24:57,280 Speaker 8: just didn't release it. They haven't collected the October or 509 00:24:57,400 --> 00:24:59,400 Speaker 8: and if the shutdown goes in the next week, they'll 510 00:24:59,400 --> 00:25:03,359 Speaker 8: probably miss the November household survey as well, and so 511 00:25:03,400 --> 00:25:04,960 Speaker 8: if they don't have that data, they can't release it. 512 00:25:05,000 --> 00:25:06,160 Speaker 6: If they haven't done the surveys. 513 00:25:06,240 --> 00:25:09,640 Speaker 8: It's possible they could do the employment survey because that's electronics. 514 00:25:09,640 --> 00:25:11,920 Speaker 8: So the employers fill it out, and they fill it out. 515 00:25:11,840 --> 00:25:12,960 Speaker 6: Over a long period of time. 516 00:25:13,080 --> 00:25:15,240 Speaker 8: It's one of the reasons we have such big revisions 517 00:25:15,440 --> 00:25:16,919 Speaker 8: because it takes a long time to get all the 518 00:25:16,920 --> 00:25:19,680 Speaker 8: employers to fill it out. But you know, there's precedent 519 00:25:19,720 --> 00:25:21,800 Speaker 8: here where they've skipped data releases and then they just 520 00:25:21,960 --> 00:25:23,560 Speaker 8: kind of catch up over time. 521 00:25:23,720 --> 00:25:25,040 Speaker 6: But that is one of the big questions. 522 00:25:25,080 --> 00:25:26,760 Speaker 8: And you've got a whole bunch of other data as well, 523 00:25:26,920 --> 00:25:29,920 Speaker 8: CPI and other crucial data sets that are going to 524 00:25:29,920 --> 00:25:31,760 Speaker 8: be skipped because no one's doing the work right now. 525 00:25:31,760 --> 00:25:33,640 Speaker 2: The question mark about the quality of that data once 526 00:25:33,640 --> 00:25:34,280 Speaker 2: it is collected. 527 00:25:34,920 --> 00:25:37,000 Speaker 6: That's pre existing right. We don't know. I think the 528 00:25:37,000 --> 00:25:38,760 Speaker 6: faith in that data was starting to descride anyway. 529 00:25:38,960 --> 00:25:39,120 Speaker 1: Right. 530 00:25:40,160 --> 00:25:43,720 Speaker 2: This is the Bloomberg Survenments podcast, bringing you the best 531 00:25:43,720 --> 00:25:47,040 Speaker 2: in markets, economics, antient politics. You can watch the show 532 00:25:47,080 --> 00:25:50,040 Speaker 2: live on Bloomberg TV weekday mornings from six am to 533 00:25:50,160 --> 00:25:53,880 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify 534 00:25:54,080 --> 00:25:56,320 Speaker 2: or anywhere else you listen, and as always, on the 535 00:25:56,320 --> 00:25:58,760 Speaker 2: Bloomberg Terminal and the Bloomberg Business app.