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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast

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Speaker 1: called Apple Podcast or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Folks, this is going

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Speaker 1: to be an interesting week for You're supposed to say

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Speaker 1: good stuff when John Tucker has done. You're supposed to

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Speaker 1: always say good stuff, Good stuff, John Tucker, good stuff,

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Speaker 1: Justina does it? Oh my gosh, okay um. Moving on

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Speaker 1: from John Tucker, also good stuff. On the Techer Innings front,

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Speaker 1: We're gonna get Netflix later this week. We're gonna get

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Speaker 1: a lot of MidCap names as well. And who better

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Speaker 1: to dive into what to expect and all the jazz

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Speaker 1: around these tech companies right now than our very own

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Speaker 1: Bloomberg Technology senior analysts on Grana and man Deep sing

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Speaker 1: A lot to digest here ONAG. I want to start

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Speaker 1: with you on the big tech names here, because to

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Speaker 1: have a ainable equity market rally, you have to have

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Speaker 1: your Apples, your Microsoft's, on your side. Why aren't they

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Speaker 1: right now? So the big question is what's going to

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Speaker 1: be guidance for the rest of the year. Um, we

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Speaker 1: all know that things are slowing down in enterprise to expending.

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Speaker 1: Cloud is going to slow down. PC sales are bad.

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Speaker 1: We even expect enterprise you know course software to start decelerating.

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Speaker 1: But the question is, you know how much of that

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Speaker 1: is already baked into the stock price. So I think

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Speaker 1: guidance is going to be extremely critical when we go

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Speaker 1: onto the next owning season from all these vendors, hang

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Speaker 1: on when are they coming out with earnings? Microsoft's next week,

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Speaker 1: Apples the week after that, and Apple is going to

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Speaker 1: be very different as well because of supply chain you

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Speaker 1: know issues we have seen that they may miss on

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Speaker 1: the iPhone side. So the question really is how's the

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Speaker 1: buy side going to treat that, because you know, in

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Speaker 1: our view, whatever we lose in this quarter, we're gonna

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Speaker 1: gain back in the next quarter. Mandeep, what are you

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Speaker 1: looking for in the companies you I can never sort

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Speaker 1: out which companies You guys cover what you do social

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Speaker 1: media and like the internet stuff? More consumer tech, say

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Speaker 1: more enterprise tech. So consumer tech is very different enterprise tech.

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Speaker 1: Is a code word for what's enterprise tech actually means

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Speaker 1: just business to business stuff. Got it. Okay, so you

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Speaker 1: have Alphabet, you have Meta, Uh, Uber, Airbnb? Are they

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Speaker 1: all coming out next week or in the next two weeks?

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Speaker 1: And uh, Look, I think when I say it, and

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Speaker 1: I mentioned this before on your show, that there was

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Speaker 1: a massive pull forward when it comes to a lot

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Speaker 1: of consumer tech companies during COVID times. We had a

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Speaker 1: period where they are resetting the comps. Next year, the

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Speaker 1: comps are going to be easier. The problem for a

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Speaker 1: company like Alphabet is they're operating profit grew hud so

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Speaker 1: they went from forty billion inter operating profit to eight billion.

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Speaker 1: Now that is the sort of comp I mean, it

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Speaker 1: will take them probably two years to reset that. So

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Speaker 1: they pull forward two years of operating profit growth in

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Speaker 1: one year during that COVID time, and I think that

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Speaker 1: is a challenge for someone like Alphabet to an extent

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Speaker 1: Meta as well. But when you say pull forward, that

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Speaker 1: means they took it from two and three and put

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Speaker 1: it in one. Is it really the case? I mean,

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Speaker 1: are the the revenue they get from ads? Right? For

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Speaker 1: the most part ad spending. It's not like companies that

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Speaker 1: we're spending a lot in are gonna not spend in three.

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Speaker 1: So you have a confluence of negative factors right now.

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Speaker 1: Notably the Apple I d f A changes. That was

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Speaker 1: a ten billion dollar drag on Meta's revenue for two

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Speaker 1: same thing. It's not going to dissipate anytime soon. Then

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Speaker 1: AD pricing in general is coming down because we are

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Speaker 1: headed for slower growth or probably a recession. So during

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Speaker 1: times like this, ad pricing compresses. It will bounce back,

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Speaker 1: but it's very cyclical. And then businesses in general, small businesses,

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Speaker 1: which is the bulk of Meta's ads spent, they are

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Speaker 1: pulling back again a slow growth times. And that's what

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Speaker 1: I mean by pull forward because during the COVID phase,

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Speaker 1: Meadows revenue grew almost average. The reason why that happened

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Speaker 1: is small businesses did very well. It was all online.

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Speaker 1: They were spending a lot of money on ads to

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Speaker 1: acquire customers. Well, you're running into tough comps. Plus, businesses

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Speaker 1: are pulling back because ad spending is the easiest thing

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Speaker 1: to pull back on when times are tough. So UM

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Speaker 1: HONORAG we were talking earlier. There's a story in the

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Speaker 1: Bloomberg about UM executives at Davos. Their expectations are for

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Speaker 1: horrendous and awful recession. But that's because the survey was

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Speaker 1: done in October and November. Right in December and January,

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Speaker 1: we've turned a lot more positive. Um is that the

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Speaker 1: case for these companies as well. So typically what happens is,

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Speaker 1: you know, take spending is sometimes driven by the sentiment

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Speaker 1: that we see in the NASTAC how the NASTAC performs.

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Speaker 1: Now I did this correlation many many years ago, but

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Speaker 1: if you look at it just on the spending side

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Speaker 1: of it, last five years have been phenomenal for software spending.

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Speaker 1: You know, the top twenty software companies grew at an

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Speaker 1: average in that time frame. So it's going to be

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Speaker 1: very difficult to come up with that level of performance

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Speaker 1: again this year. Now, our big thesis is that whatever

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Speaker 1: we lose this year, you know, we will recover it

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Speaker 1: the next year or the year after, depending on how

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Speaker 1: long this slowdown is. And and partially the reason why

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Speaker 1: we think is, you know, we think there are still

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Speaker 1: a lot of very old systems out there that need

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Speaker 1: to be upgraded. I mean point in time, you know, Southwest,

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Speaker 1: the f a A, all those things, I mean legacy,

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Speaker 1: it T spending dominates total I T spending. So all

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Speaker 1: those companies slowly and slowly need to upgrade their systems,

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Speaker 1: which is a bull case for software, but perhaps not

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Speaker 1: in three Well, that's exactly where I want to go.

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Speaker 1: I think we had me and Deep on Bloomberous Valance

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Speaker 1: radio months ago. I remember you coming up with a

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Speaker 1: stat uh and it was something like in the next

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Speaker 1: ten years. I think it's like, I can't remember, was

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Speaker 1: billions or trillions? It was like four or five billion

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Speaker 1: or trillion, I can't remember. I know those are different

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Speaker 1: numbers UM spending on cloud infrastructure. So I'm wondering. And

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Speaker 1: that's something you're hearing from these bank earnings as well.

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Speaker 1: That sure, some of these compensation expenses are coming down,

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Speaker 1: but the tech expenses are coming up. How long does

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Speaker 1: that bowl case or that tail when A was just

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Speaker 1: talking about take to actually play out. Well, I would

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Speaker 1: say there are certain things that are secular in nature

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Speaker 1: in this market. Cloud spending is one of them, and

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Speaker 1: that when when these secular trends play out, they play

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Speaker 1: out ten twenty years, It's gonna take years before we

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Speaker 1: are fully migrated to cloud. And plus there is a

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Speaker 1: lot of new innovation going on a lot of AI.

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Speaker 1: You know, machine learning is being done on cloud. These

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Speaker 1: are I mean very expensive workloades to run Chat GPT's

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Speaker 1: waiting to see would bring that up a one month

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Speaker 1: bill of jack chief. It would be way above then

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Speaker 1: how much a traditional it costs to run. So that's

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Speaker 1: where I think cloud infrastructure is a real secular tail wind.

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Speaker 1: And look, there are certain structural headwinds for a lot

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Speaker 1: of these companies. And that's where you're gonna pick winners

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Speaker 1: and losers is which ones are exposed to the circular

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Speaker 1: trends and which ones aren't. So let's go near term

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Speaker 1: the man deep in the next few weeks when we

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Speaker 1: get some of these earnings roll out, who's gonna get

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Speaker 1: it right, who's gonna get it wrong? I think you've

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Speaker 1: seen a lot of negative revisions already. So a name

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Speaker 1: like Snapchat has seen top line come down, estimates come

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Speaker 1: down by about consensus numbers are down a lot, same

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Speaker 1: thing for a lot of other small caps like Roudblocks

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Speaker 1: now with large caps, Google estimates are down ten percent.

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Speaker 1: That doesn't mean they're gonna crush it or the you know,

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Speaker 1: the sentiment will be positive after the report, So that's

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Speaker 1: where you have to really match how far the expectations

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Speaker 1: have come down. They haven't come down, and uh like

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Speaker 1: for a name like Airbnb. Now, I do think there

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Speaker 1: was a pope forward even with airbnbs growth because of reopening,

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Speaker 1: it lasted two years. Guess what there will be a

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Speaker 1: slowdown period after that, and I think that's where they're exposed.

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Speaker 1: We've been waiting to hear about this a lot in

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Speaker 1: the last six months as while we started this an

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Speaker 1: Apple and Microsoft as well at this slowdown is already here.

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Speaker 1: To what extent are we going to see more pain

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Speaker 1: in the first quarter or is this is so the

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Speaker 1: way we look at it right now, the estimates look fair.

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Speaker 1: We don't see a bigger downdraft on that, which is

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Speaker 1: why I said guidance going into the next quarter or

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Speaker 1: next this earning is going to be very critical. If

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Speaker 1: the count these companies are income, they come report and

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Speaker 1: able to match the expectations of the buy side on

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Speaker 1: the south side, and then you could see them rivers

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Speaker 1: you know, the trend of the stock prices going downwards. However,

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Speaker 1: if they come back and say, you know, things are

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Speaker 1: really getting even worse, then you have another leg down.

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Speaker 1: But one of the big things that I've said is,

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Speaker 1: you know, for us, the big you know, I'm not

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Speaker 1: truly concerned about the length of the cloud cycle or

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Speaker 1: the funding behind it that I'm very happy or very

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Speaker 1: comfortable about it. But but I do not know that

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Speaker 1: where the ten year is going to be by the

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Speaker 1: end of the year. If the ten year is around

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Speaker 1: where it is, then tech stocks should be fine. But

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Speaker 1: if it starts to go up inflation creeps back again,

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Speaker 1: then tech is going to have a horrendous second half.

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Speaker 1: So it's there is a lot that's tied up with

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Speaker 1: the interest rates rather than just the earning side operating business.

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Speaker 1: What are the typical valuations that you see on the

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Speaker 1: enterprise side, So it depends on who you're looking at,

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Speaker 1: and you know, you look at somebody like a Microsoft

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Speaker 1: eighteen nineteen times. You know, a couple of years ago

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Speaker 1: it was thirty times earnings. But that all the all

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Speaker 1: the you could say, the squeeze and the valuation has

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Speaker 1: to do with the with the ten year climbing up

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Speaker 1: quite a bit. You could say the same thing about

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Speaker 1: Apple apples. Now in eighteen nineteen times it used to

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Speaker 1: be over thirty times for for a while. So if

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Speaker 1: ten year keeps on going up, that number keeps on

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Speaker 1: coming down. I mean that's really where we are at

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Speaker 1: this point. Sorry, men Deep, you what kind of valuations

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Speaker 1: do you see or does it matter? And the companies

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Speaker 1: you cover because they don't necessarily make profits, well yes

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Speaker 1: that is a factor. But for a name like Alphabet,

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Speaker 1: you know you have to ask yourself when will they

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Speaker 1: grow operating profit? Because that is going to determine the

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Speaker 1: floor in terms of valuation. Right now, the market isn't clear.

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Speaker 1: They aren't believing the consensus numbers that they can grow

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Speaker 1: operating profit even low singles did. If they prove that,

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Speaker 1: I think that may be very well. All right, Man

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Speaker 1: Deep Sing Senior Analysts Technology at Bloomberg Intelligence. Honoragu Raga,

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Speaker 1: also at Tech Analysts, Bloomberg Intelligence, Thanks very much, always

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Speaker 1: great your round table. Speaking of four twenty, we are

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Speaker 1: going to talk about weed right now. Chris Violas, the

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Speaker 1: CEO of Blaze, joins us to talk about technology platform

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Speaker 1: that they that they operate um or or at least

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Speaker 1: get to businesses to operate in order to sell uh

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Speaker 1: marijuana products. And I think it's such a fascinating story.

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Speaker 1: We cover this a lot in this program because it's

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Speaker 1: like we're watching the beginning of an industry, you know,

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Speaker 1: the end of prohibition, and we can see the kind

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Speaker 1: of revenue that this generates, not just for the businesses,

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Speaker 1: but also for states. We recently covered this right the

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Speaker 1: very well, the first the first one in New York.

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Speaker 1: UM and I believe they use Blaze technology. Chris, let's

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Speaker 1: get over Chris right now, Chris Viola's CEO Blaze. Tell

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Speaker 1: us about your product, what what what do you offer

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Speaker 1: that's helping this budding industry. Man. Well, thank you, Creety,

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Speaker 1: thanks for having me on. I'm really excited to be here.

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Speaker 1: But to get to the point, Blaze is a retail

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Speaker 1: point of soap platform really empowering about sixteen percent of

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Speaker 1: North America dispensaries today. So anything from inventory control to

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Speaker 1: checking out and actually facilitating that transaction to the compliance

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Speaker 1: that goes on behind it, that's all Blaze powering these

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Speaker 1: beautiful retailers that are doing such work, including Housing Works. Yeah.

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Speaker 1: Housing Works is of course the charity that opened the

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Speaker 1: first marijuana dispensary, recreational dispensary in New York, and there

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Speaker 1: are I think twenty three other states where marijuana is legal, um,

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Speaker 1: but it's not federally and that presents a problem for

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Speaker 1: these retailers in terms of taking credit cards, in terms

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Speaker 1: of you know, the payment point systems, how does how

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Speaker 1: does that work? How do you kind of get around

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Speaker 1: the federal law. Yeah, it's obviously there's a conflict there.

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Speaker 1: So when it comes to these payment types, really there's

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Speaker 1: only a few options we have. UM. As with anything

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Speaker 1: we do, we want to be as open and transparent

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Speaker 1: and complying as possible. So credit cards are off the table.

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Speaker 1: We don't touch that except for in Canada where it

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Speaker 1: is federally legal. But when we're talking about the US,

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Speaker 1: we really only have two options at this point. Obviously

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Speaker 1: we can take cash. I guess three options. That's one.

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Speaker 1: The second would be a c H So you know,

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Speaker 1: this is really likened too when you go on to

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Speaker 1: then though, when you connect your bank account um and

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Speaker 1: start to send money either directly to a person or

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Speaker 1: directly to another business. We can certainly facilitate that today.

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Speaker 1: That's a direct to direct type of transaction. And then

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Speaker 1: the second is our Blaze pay program, which is the

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Speaker 1: pin debit based solution where the user, the consumer go

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Speaker 1: ahead and insert their card with a chip, entering their

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Speaker 1: pin number, and then from there we can directly transact

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Speaker 1: against that specific bank account. So how does that work?

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Speaker 1: More specifically, I noticed that at Empire, at the Empire

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Speaker 1: Cannabis Club, if you ring up a hundred thirty five dollars, right,

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Speaker 1: they'll debit you for one forty and then actually give

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Speaker 1: you the five dollars and change. I don't know what's

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Speaker 1: going on there, So that's a that's a different solution

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Speaker 1: than what we like to to use here at Blaze.

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Speaker 1: That is called cashless a t M. And essentially what

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Speaker 1: they're doing with that specific solution is are actually turning

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Speaker 1: that debit terminal into what we call an a a

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Speaker 1: t M. And there's your round up, right, each time

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Speaker 1: you withdraw from an ATM machine, it's got to be

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Speaker 1: specific denominations. In this case, you know by by five,

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Speaker 1: so by one forty you'll get five dollars back on

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Speaker 1: that transaction. That being said, um, why that solution is functional,

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Speaker 1: it's not our what we consider to be the most

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Speaker 1: optimal solution requires that to spend. Sure, you carry more

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Speaker 1: cash on hand to facilitate the cash back. UM, but

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Speaker 1: it is relatively straightforward the same concept of a direct

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Speaker 1: withdrawal from that bank, So it is an option there.

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Speaker 1: So then when you're looking at the long term for

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Speaker 1: you for your own company, what kind of timeline are

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Speaker 1: you looking at where you don't have to have these

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Speaker 1: workarounds when it comes to payments. A pretty great question.

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Speaker 1: I wish I had that magic ball, m But at

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Speaker 1: the end of the day, we feel that with such

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Speaker 1: explosive growth in this industry, we're all trying to be compliant,

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Speaker 1: both the operators and the service providers that that obviously

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Speaker 1: service them. So my hope is in the next you know,

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Speaker 1: three or four years, UM, we we see some movement.

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Speaker 1: Obviously there's a talks from the Safe Banking Act obviously

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Speaker 1: not going through this last quarter, but in general we

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Speaker 1: are hopeful. Um. We really feel like Canada's also, you know,

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Speaker 1: set the stage in terms of normalizing that the payment systems.

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Speaker 1: So we're hopeful. Um. That being said, we still have

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Speaker 1: a long way to go, and I wouldn't say we

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Speaker 1: have a direct line of site just yet. But does

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Speaker 1: it annoy you that we haven't gotten safe banking or

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Speaker 1: is it actually better for your business? Because hear me

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Speaker 1: out well, or maybe you know this is clear to you.

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Speaker 1: The longer it doesn't pass, the more these dispensaries need

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Speaker 1: you and you get to kind of dig your heels

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Speaker 1: in in terms of market share. Yeah, look, it's a

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Speaker 1: great question. Obviously we're balancing both the business ablaze as

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Speaker 1: well supporting our retailers. At the end of the day,

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Speaker 1: though this business was started by myself and then a

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Speaker 1: few other founders were formal operators, so you know, our

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Speaker 1: ethos series really to enable those retailers and make sure

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Speaker 1: that as successful as possible. So I do hope you

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Speaker 1: can reduce the cash I do hope we can uh

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Speaker 1: reduce some of the work around. So yes, while that

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Speaker 1: may not might not help our margins directly, I think

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Speaker 1: it's the right thing for the industry and the right

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Speaker 1: thing to really move this forward. Um you see anywhere

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Speaker 1: outside of cannabis, folks being able to use Apple Pay

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Speaker 1: and some of these really cool techniques to transact and

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Speaker 1: obviously reduce that friction at checkout. That is really our

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Speaker 1: main goal here is to help enable retailers to sell

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Speaker 1: more and part of that's reducing the friction wherever the

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Speaker 1: consumer wants to check out and whatever they want to

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Speaker 1: check out with. So what kind of opposition are are

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Speaker 1: you facing right now? I mean on your day to

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Speaker 1: day how much pushback are you really getting UM with

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Speaker 1: regards to the payment solutions or just competit the payments socritions. Yeah,

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Speaker 1: not not much. I mean, look, these operators understand that

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Speaker 1: they're in a difficult situation. It's really about finding that

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Speaker 1: local banking provider that first off, go ahead and have

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Speaker 1: a depository account with you and be able to to

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Speaker 1: just facilitating well day to day banking needs, but at

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Speaker 1: the same time UM being able to supply not just

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Speaker 1: the payment side, but we also Ablaze Capital, which is

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Speaker 1: an aventory finance and solutions. So we understand there's a

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Speaker 1: lot of barriers for these for these retailers. So wherever

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Speaker 1: we can use our economies of scale and you know,

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Speaker 1: our FI plus dispensaries to help benefit and bring a

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Speaker 1: solution forward, we obviously want to do that. So I

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Speaker 1: would say between us and the and the retailers is

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Speaker 1: not much friction. UM. They're looking for help and so

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Speaker 1: whatever we can do to provide them with some assistance,

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Speaker 1: I mean, they're usually pretty open to it. Any plans

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Speaker 1: for an IPO what's the capital structure look like. Yeah,

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Speaker 1: I know we're private today. UM have raised this in

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Speaker 1: or nineteen million across the board, all through um VC

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Speaker 1: type of funding. UM. But you know, as with everybody

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Speaker 1: in this economy, we're really focused on profitability, and so

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Speaker 1: we do a blinding site this year to profitability and

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Speaker 1: we want to control our future. And so when the

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Speaker 1: markets do turn, UM, do you turn around and look

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Speaker 1: upward for and I on the positive, you know, it's

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Speaker 1: definitely something that we're not going to rule out. But

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Speaker 1: at this point, you know, I'd say it's been a

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Speaker 1: benefit for us to stay private. Thank you to you

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Speaker 1: next to you on our plan? All right, Chris, thanks

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Speaker 1: so much for joining us. Fascinating stuff. Chris violis there,

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Speaker 1: CEO of Blaze. They help cannabis dispensaries sell more WED

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Speaker 1: Let's bring in our guests right now to talk about

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Speaker 1: what's going on in these markets, a lot of it

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Speaker 1: dictated by bank earnings. We've just seen the final of

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Speaker 1: the Big six UM report. Brent Shooty joins US chief

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Speaker 1: investment strategists from Northwestern Mutual UH chief investment officer, sorry

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Speaker 1: from Northwestern Mutual, as well as Alice and Williams, Senior

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Speaker 1: Global Banks and Asset Managers analysts from Bloomberg Intelligence. Brent,

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Speaker 1: let me first ask you your take on the bank

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Speaker 1: earnings UM Goldman Sachs falling by the most since well

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Speaker 1: in a year, I guess today after missing UM revenue estimates.

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Speaker 1: How do you see this batch of bank earnings changing

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Speaker 1: your strategy or informing your strategy. Yeah, I don't think

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Speaker 1: it's changing it too much. I mean, to me, the

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Speaker 1: macro so what's happening in the global economy matters much

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Speaker 1: much more than earnings, not to say that they're not important.

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Speaker 1: They do kind of represent who's gonna win and who's

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Speaker 1: going to lose from a relative perspective, But overall, the

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Speaker 1: most important thing right now is where is the economy headed?

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Speaker 1: In three where's inflation headed? And what is the FED

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Speaker 1: going to do? And I think that the better tone

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Speaker 1: that you've had to the start of the year is

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Speaker 1: because you are seeing inflation come down and certainly expectations

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Speaker 1: of FED future tightening is coming down against the backdrop

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Speaker 1: of an economy that hasn't yet fallen into recession. I

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Speaker 1: think that's where you're seeing optimism. Alison hop On in

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Speaker 1: here because as Matt pointed out, the what feels like

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Speaker 1: the driving story at least for the TAO is going

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Speaker 1: to be those bank earnings. How much of what we've

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Speaker 1: gotten from them is a sector specific story as opposed

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Speaker 1: to a macroeconomic store and both. I mean they're going

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Speaker 1: in completely different directions, right, Morgan Stanley is up seven. Yeah,

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Speaker 1: I think the news today is a little bit more

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Speaker 1: company specific UM. And to your point, Matt, it is

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Speaker 1: interesting the economy and performance, and that is because Goldman

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Speaker 1: Sachs reporting a comprey show which is UH the highest

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Speaker 1: in several years. UH. Solomon had warned that the coast

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Speaker 1: to compete was not coming in UM as much as

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Speaker 1: would be expected UM, but perhaps the results were even

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Speaker 1: more dramatic than we expected in terms of the increase

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Speaker 1: in comp comp was down for the year, but only

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Speaker 1: something like while revenue is down, and so I think

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Speaker 1: comp and head count that's that's really the story of Goldman.

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Speaker 1: Provision for credit costs, which is a broad MACO macro

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Speaker 1: economic indicator, was a bit worse. I'll come back to

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Speaker 1: that in one second. For Morgan Stanley, it was really

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Speaker 1: the wealth business, which is the crown jewel for that

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Speaker 1: company out performing if you will, um and and sort

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Speaker 1: of negative expectations coming into the quarter. Net interest income

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Speaker 1: for which we heard about last week. I don't know

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Speaker 1: if I would call that macro. I mean, it is

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Speaker 1: tied to monetary policy, but not interesting come coming in

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Speaker 1: softer for most of the biggest lenders, and that's really

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Speaker 1: just due to the costs of their deposits rising. Think

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Speaker 1: of that, as their costs of good sold rates are

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Speaker 1: going up. They've gotten the benefit. Now they have to

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Speaker 1: start passing some of that onto customers. Morgan Stanley's not

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Speaker 1: interest income did hold up a little bit better. That

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Speaker 1: feels pretty macro. I mean the broader theme we've been

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Speaker 1: talking about with banks CEOs for years. I was stationed

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Speaker 1: in Germany for the past six years, and they really

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Speaker 1: complained about the lack of net interest income and low rates.

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Speaker 1: I mean, zerp or Nerve was really problematic for these banks. Sprent.

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

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Speaker 1: We can get kind of back to business as usual

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Speaker 1: now that we get away from extraordinary monetary policy. Does

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Speaker 1: that mean something to you? Absolutely? I mean, I mean

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Speaker 1: to me, I still think we're going to have a recession.

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Speaker 1: This year, and so you know, I do think that

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Speaker 1: the fet is you know, intently focused on the labor

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Speaker 1: market and not going to stop until they actually see

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Speaker 1: the labor market crack, which I guess, I don't know

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Speaker 1: if it's good or bad. I think it's probably closer

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Speaker 1: than further away. But certainly, the the large rate hikes

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Speaker 1: are a thing of the past, and I think they're

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Speaker 1: gonna start coming down. Uh. And if you think about

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Speaker 1: the last couple of years, I mean, we had maximum

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Speaker 1: policy to the upside, and then I think last year

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Speaker 1: was maximum policy to the downside. I think this is

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Speaker 1: a bit of a transition year where we slow the

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Speaker 1: hikes and hopefully stop the hikes when that labor market

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Speaker 1: does crack. Um. But certainly I think I think from

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Speaker 1: a volatility standpoint, that will bring down volatility, especially towards

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Speaker 1: the end of the year, when we finally see that, yes,

430
00:22:37,240 --> 00:22:39,360
Speaker 1: we are likely to have a recession, but it will

431
00:22:39,400 --> 00:22:42,160
Speaker 1: be short, mild, and uneven. So you mentioned macro back

432
00:22:42,160 --> 00:22:45,840
Speaker 1: and forth. Some sectors will win, some sectors will lose. Uh.

433
00:22:46,040 --> 00:22:47,840
Speaker 1: And I think the other side of this is better

434
00:22:47,920 --> 00:22:50,240
Speaker 1: days ahead. But certainly, until we get to that point,

435
00:22:50,720 --> 00:22:53,200
Speaker 1: I think you're gonna see a back and forth volatility perspective,

436
00:22:53,359 --> 00:22:55,600
Speaker 1: but not as much as it was last year when

437
00:22:55,640 --> 00:22:58,199
Speaker 1: the FED was at certainly on the elevator up on

438
00:22:58,359 --> 00:23:01,840
Speaker 1: the rate hike cycle. Provisions. Alison, you said, you get

439
00:23:01,840 --> 00:23:03,880
Speaker 1: back to I think this is well for me. I'm

440
00:23:03,920 --> 00:23:08,320
Speaker 1: watching very closely to see how barish these banks are

441
00:23:08,359 --> 00:23:11,640
Speaker 1: in terms of their recession forecast. Can you read that?

442
00:23:12,000 --> 00:23:15,160
Speaker 1: Can you read that into big low and lost provisions? Generally,

443
00:23:15,640 --> 00:23:18,760
Speaker 1: the provisions that we've seen a lot of the grow,

444
00:23:18,840 --> 00:23:20,600
Speaker 1: A lot of the provisions has been due to loan

445
00:23:20,680 --> 00:23:24,960
Speaker 1: growth because card is the seasonally strongest in the fourth quarter,

446
00:23:25,040 --> 00:23:27,920
Speaker 1: we saw balances. It's also the highest charge of rates,

447
00:23:27,960 --> 00:23:32,200
Speaker 1: so that generally portends to have somewhat higher provisions we

448
00:23:32,280 --> 00:23:35,240
Speaker 1: have seen. I would say that the banks in general

449
00:23:35,440 --> 00:23:40,200
Speaker 1: have signaled some weakening of an economic outlook, but nothing dramatic.

450
00:23:40,960 --> 00:23:44,000
Speaker 1: City Group saying on Friday that they were reserving to

451
00:23:44,280 --> 00:23:48,360
Speaker 1: sort of a five to five point one percent unemployment rate,

452
00:23:48,440 --> 00:23:52,280
Speaker 1: so um some positioning there in terms of UH and

453
00:23:52,280 --> 00:23:56,439
Speaker 1: giving you some detail around around their outlook. Imagine a

454
00:23:56,480 --> 00:23:58,800
Speaker 1: five and a half percent unemployment rate, well five to

455
00:23:58,840 --> 00:24:04,640
Speaker 1: five point one percent, five but still um and Uh,

456
00:24:04,760 --> 00:24:08,160
Speaker 1: so I think that, and and JP Morgan has said,

457
00:24:08,440 --> 00:24:10,919
Speaker 1: you know that five to six percent unemployment would be

458
00:24:10,920 --> 00:24:13,960
Speaker 1: five to six billion of reserve building for them. They

459
00:24:14,000 --> 00:24:17,240
Speaker 1: did reserve build reserves by about one point four billion

460
00:24:17,880 --> 00:24:20,159
Speaker 1: this quarter. About one billion was that was consumer. That

461
00:24:20,200 --> 00:24:22,760
Speaker 1: relates to some of the growth that I mentioned. Um,

462
00:24:22,840 --> 00:24:24,919
Speaker 1: but they said that part of the other part of

463
00:24:24,920 --> 00:24:29,359
Speaker 1: that is marking to market towards those you know, other expectations,

464
00:24:29,400 --> 00:24:31,760
Speaker 1: just as we're seeing some weakening. So not calling for

465
00:24:31,800 --> 00:24:34,920
Speaker 1: that yet, but just reserving towards that. So let's let's

466
00:24:34,920 --> 00:24:37,160
Speaker 1: fold in what what Brent was just talking about when

467
00:24:37,160 --> 00:24:38,960
Speaker 1: it comes to what the sector as a whole is

468
00:24:39,040 --> 00:24:41,480
Speaker 1: trading off of. Is it really taking its que I

469
00:24:41,480 --> 00:24:43,359
Speaker 1: mean naturally from the brown market, but is it taking

470
00:24:43,359 --> 00:24:46,879
Speaker 1: its que from something like uh the two stents bread

471
00:24:46,960 --> 00:24:49,600
Speaker 1: for example, and then compressed margins in that direction, or

472
00:24:49,760 --> 00:24:53,000
Speaker 1: is it taking its cue from say cap yields as

473
00:24:53,040 --> 00:24:55,720
Speaker 1: a result of FED cuts priced into the market. What

474
00:24:55,720 --> 00:24:58,560
Speaker 1: what does the stock trade off of the stocks tend

475
00:24:58,760 --> 00:25:01,040
Speaker 1: to trade off of tues tends that's not really the

476
00:25:01,080 --> 00:25:04,359
Speaker 1: yield curve that impacts that's that most meaningful to their earnings,

477
00:25:04,359 --> 00:25:08,119
Speaker 1: but that tends to be the biggest UM indicator for

478
00:25:08,280 --> 00:25:12,080
Speaker 1: the stocks. I think in general, when they've been reacting

479
00:25:12,119 --> 00:25:15,440
Speaker 1: to earnings, it has been the initial reaction has been

480
00:25:15,440 --> 00:25:17,320
Speaker 1: to the net interest income. We talked a little bit

481
00:25:17,320 --> 00:25:20,920
Speaker 1: about some of the reactions UM today. I do think

482
00:25:21,000 --> 00:25:24,120
Speaker 1: that in the months ahead, really the focus is on

483
00:25:24,840 --> 00:25:29,919
Speaker 1: unemployment and credit costs. Even though these banks will argue

484
00:25:30,040 --> 00:25:32,080
Speaker 1: and part of the reason why they talk about how

485
00:25:32,080 --> 00:25:35,720
Speaker 1: their reserves is just show look we have, like are

486
00:25:35,800 --> 00:25:38,920
Speaker 1: the pre tax pre provision profits so profit before these

487
00:25:38,960 --> 00:25:43,720
Speaker 1: losses is so strong, it's well covered. UM capital is

488
00:25:44,080 --> 00:25:47,920
Speaker 1: very strong. They've built that up. UM, it's still uncertain,

489
00:25:47,960 --> 00:25:50,800
Speaker 1: and it's hard for bank stocks to outperform as you're

490
00:25:50,800 --> 00:25:53,280
Speaker 1: sort of going into things. They need to sort of

491
00:25:53,280 --> 00:25:56,200
Speaker 1: see the other side or see things getting better. Brent,

492
00:25:56,280 --> 00:25:59,960
Speaker 1: how does the China reopening or the better than expect

493
00:26:00,000 --> 00:26:04,360
Speaker 1: to numbers out of Europe influence your your position? I mean,

494
00:26:04,600 --> 00:26:07,280
Speaker 1: have you gotten less bearish in the last few months

495
00:26:07,640 --> 00:26:12,159
Speaker 1: because it seems like others have have shifted. Yeah. I

496
00:26:12,200 --> 00:26:14,600
Speaker 1: mean I've been optimistic because inflation is coming down a

497
00:26:14,680 --> 00:26:17,359
Speaker 1: certainly trying to reopening to put up our pressure on commodities.

498
00:26:17,920 --> 00:26:19,840
Speaker 1: But I think in general the US, you are seeing

499
00:26:19,880 --> 00:26:22,159
Speaker 1: inflation pull back, and I don't know if people have

500
00:26:22,240 --> 00:26:23,880
Speaker 1: made enough of this, but if you look at all

501
00:26:23,880 --> 00:26:27,720
Speaker 1: in CP I uh less shelter, So the part that's

502
00:26:27,760 --> 00:26:30,920
Speaker 1: lagging the it's actually negative over the last six months,

503
00:26:31,320 --> 00:26:33,880
Speaker 1: and so you're starting to see that inflation come down,

504
00:26:33,880 --> 00:26:35,960
Speaker 1: which to me is still the most important variable that's

505
00:26:35,960 --> 00:26:38,840
Speaker 1: out there. I think it accelerates, but as I mentioned before,

506
00:26:38,920 --> 00:26:40,760
Speaker 1: I do think you're going to kind of shift to

507
00:26:40,840 --> 00:26:43,000
Speaker 1: recession worries because I do think you're going to start

508
00:26:43,040 --> 00:26:45,919
Speaker 1: seeing the labor market crack just a bit. But tying

509
00:26:45,920 --> 00:26:48,160
Speaker 1: it into what was just said, I think the other

510
00:26:48,200 --> 00:26:50,520
Speaker 1: side of this is nearer rather than further away, because

511
00:26:50,520 --> 00:26:52,880
Speaker 1: I think inflation will fall quite a bit, which will

512
00:26:52,880 --> 00:26:55,960
Speaker 1: allow the Federal Reserve to potentially pivot if they need to,

513
00:26:55,960 --> 00:26:59,440
Speaker 1: to keep any such recession short and mild, which I

514
00:26:59,440 --> 00:27:02,280
Speaker 1: think is the most important variable for anybody's outlook. How

515
00:27:02,320 --> 00:27:04,240
Speaker 1: How deep do you think the recession is, how long

516
00:27:04,280 --> 00:27:06,320
Speaker 1: do you think it lasts? And I don't stilln't think

517
00:27:06,320 --> 00:27:08,800
Speaker 1: it's either deep or long, which informs kind of a

518
00:27:08,800 --> 00:27:11,920
Speaker 1: positive outlook towards the back half of the year, which

519
00:27:11,960 --> 00:27:15,120
Speaker 1: unfortunately I think is consensus, but certainly I think still

520
00:27:15,600 --> 00:27:18,760
Speaker 1: likely given that I think inflation is starting to create her.

521
00:27:18,920 --> 00:27:21,080
Speaker 1: But to be cleared, you don't expect the FED to

522
00:27:21,160 --> 00:27:24,880
Speaker 1: cut rates this year, do you. This is where I'm

523
00:27:24,880 --> 00:27:26,360
Speaker 1: not I'm not for sure. I mean this is where

524
00:27:26,359 --> 00:27:27,760
Speaker 1: I think it's more important that I think they'll be

525
00:27:27,800 --> 00:27:30,560
Speaker 1: able to pause and then if they need to to

526
00:27:30,640 --> 00:27:33,640
Speaker 1: keep any recessions from being deeper, they will be able

527
00:27:33,680 --> 00:27:36,720
Speaker 1: to cut rates because inflation expectations are actually right where

528
00:27:36,720 --> 00:27:39,720
Speaker 1: they want them. I find it ironic that we came

529
00:27:39,720 --> 00:27:41,720
Speaker 1: into this time pere. I think people forget that the

530
00:27:41,800 --> 00:27:44,920
Speaker 1: FED was trying to get inflation expectations up and the

531
00:27:44,960 --> 00:27:47,040
Speaker 1: five to ten year universe missions at three percent, that

532
00:27:47,119 --> 00:27:49,480
Speaker 1: is exactly where it was when times are more normal,

533
00:27:49,560 --> 00:27:52,080
Speaker 1: not the past five or six years. We're worried about deflation.

534
00:27:52,359 --> 00:27:53,800
Speaker 1: So this is where I think that that needs to

535
00:27:53,840 --> 00:27:57,119
Speaker 1: cut our stop. All right, Brent Shooty from Northwestern Mutual.

536
00:27:57,160 --> 00:27:59,439
Speaker 1: Alice Williams from Blue Word Intelligence, thanks very much for

537
00:27:59,560 --> 00:28:06,199
Speaker 1: joining us. This is Bloomberg. Let's bring in Ira Jersey

538
00:28:06,320 --> 00:28:11,600
Speaker 1: right now, Bloomberg Chief rates correspondent for Bloomberg Intelligence. Ira, Uh,

539
00:28:12,240 --> 00:28:16,080
Speaker 1: what do you make of the change in. UM, I

540
00:28:16,080 --> 00:28:20,199
Speaker 1: guess perception we've gone from we just heard Dennis Gartman

541
00:28:20,280 --> 00:28:24,960
Speaker 1: say bearish to at least mildly bullish, and we've changed

542
00:28:24,960 --> 00:28:27,120
Speaker 1: our expectations a bit for the FED as well. We've

543
00:28:27,119 --> 00:28:28,879
Speaker 1: even had FED speakers come out and say, you know what,

544
00:28:28,960 --> 00:28:33,400
Speaker 1: twenty is cool in February. Yeah, we've I was expecting

545
00:28:33,400 --> 00:28:36,679
Speaker 1: a downshift in after the December meeting. Actually, you know,

546
00:28:36,720 --> 00:28:40,640
Speaker 1: the FED and FED speakers have been talking about the

547
00:28:40,680 --> 00:28:44,560
Speaker 1: fact that they need to kind of calibrate where ultimately

548
00:28:44,640 --> 00:28:47,000
Speaker 1: the FED FUNDRAI is going to end up. And I

549
00:28:47,000 --> 00:28:49,440
Speaker 1: think we are nearing that point. You know, then markets

550
00:28:49,440 --> 00:28:52,720
Speaker 1: certainly pricing for you know, two maybe three more um,

551
00:28:53,120 --> 00:28:56,040
Speaker 1: three more hikes of twenty five bases points. So so

552
00:28:56,040 --> 00:28:57,640
Speaker 1: so it's not a big surprise. I think that they're

553
00:28:57,640 --> 00:29:01,680
Speaker 1: going to go twenty five in at the February meeting. UM.

554
00:29:02,160 --> 00:29:04,800
Speaker 1: You know, today's price action is interesting in and of

555
00:29:04,840 --> 00:29:10,040
Speaker 1: itself because initially we were, um, we were initially bear stepening,

556
00:29:10,040 --> 00:29:12,480
Speaker 1: and now we're bull stepening. So so two year yields,

557
00:29:13,000 --> 00:29:16,080
Speaker 1: you know, have rallied quite a lot in in over

558
00:29:16,120 --> 00:29:19,280
Speaker 1: the last couple of hours, and UH, in particular after

559
00:29:19,320 --> 00:29:22,160
Speaker 1: that Empire survey. It's like the lack of news is

560
00:29:22,600 --> 00:29:26,040
Speaker 1: just pushing the market around quite a lot. That's exactly

561
00:29:26,080 --> 00:29:28,000
Speaker 1: what I want to ask you about that Empire survey.

562
00:29:28,120 --> 00:29:31,400
Speaker 1: It was like the worst since May, the worst data

563
00:29:31,480 --> 00:29:34,640
Speaker 1: going back to I think the global financial crisis as well,

564
00:29:34,720 --> 00:29:37,360
Speaker 1: that coming from a camera Cris on our Markets Live

565
00:29:37,400 --> 00:29:40,200
Speaker 1: blog as well. But do we really need to take

566
00:29:40,280 --> 00:29:44,360
Speaker 1: stock in that data set? Yeah, I'm I'm not sure.

567
00:29:44,400 --> 00:29:46,920
Speaker 1: I think that a lot of the volatility we're seeing

568
00:29:46,920 --> 00:29:49,920
Speaker 1: as position based, and you just have people who don't

569
00:29:49,960 --> 00:29:51,800
Speaker 1: want to take big positions one way or the other,

570
00:29:51,920 --> 00:29:54,880
Speaker 1: so you wind up seeing outside moves even when you

571
00:29:54,880 --> 00:29:57,920
Speaker 1: get you know, data that is kind of second tier.

572
00:29:57,960 --> 00:30:01,240
Speaker 1: I mean, i'd say that the Empire Survey typically doesn't

573
00:30:01,240 --> 00:30:04,120
Speaker 1: move the treasury market more than a basis point or

574
00:30:04,120 --> 00:30:07,520
Speaker 1: two um after its release. But but I do think, yes,

575
00:30:07,560 --> 00:30:10,360
Speaker 1: it was very weak. You saw the inflation components, so

576
00:30:10,440 --> 00:30:13,240
Speaker 1: the price is paid and the prices receives component um

577
00:30:13,400 --> 00:30:17,480
Speaker 1: falls significantly. But but as someone noted to me earlier today, um,

578
00:30:17,680 --> 00:30:21,000
Speaker 1: we had this this head fake in uh the Empire

579
00:30:21,040 --> 00:30:23,880
Speaker 1: Survey last September as well, and and things just bounced

580
00:30:23,960 --> 00:30:25,800
Speaker 1: right back. So so I don't know if we can

581
00:30:25,800 --> 00:30:27,840
Speaker 1: take a lot out of this one number, but that

582
00:30:27,920 --> 00:30:29,920
Speaker 1: seems to be one of the big drivers of the

583
00:30:29,960 --> 00:30:34,000
Speaker 1: market at least today, so Irah. Matt Miller, in addition

584
00:30:34,040 --> 00:30:36,200
Speaker 1: to buying one ticket for himself and one ticket for

585
00:30:36,280 --> 00:30:39,760
Speaker 1: his motorcycle in Europe, also says, you know, look, the

586
00:30:39,760 --> 00:30:43,600
Speaker 1: Federal Reserve is going to be the bigger meeting um

587
00:30:43,880 --> 00:30:46,160
Speaker 1: next to the e c B in about two weeks time.

588
00:30:46,440 --> 00:30:48,479
Speaker 1: But Ira, can I take the flip side on that?

589
00:30:48,680 --> 00:30:51,800
Speaker 1: Is it fair to say that maybe the e c

590
00:30:51,960 --> 00:30:56,120
Speaker 1: B is kind of the bigger spotlight right now? Well,

591
00:30:56,160 --> 00:30:58,600
Speaker 1: I think I think they're almost equally as important, and

592
00:30:58,640 --> 00:31:01,360
Speaker 1: certainly from a market follow hilogy standpoint, I think that

593
00:31:01,440 --> 00:31:06,720
Speaker 1: the pick you can't pick your favorite child. Come on, well,

594
00:31:06,760 --> 00:31:09,360
Speaker 1: I mean, the Fed's my favorite child. I mean us

595
00:31:09,480 --> 00:31:12,440
Speaker 1: right strategists. But um, but but I think the ECB

596
00:31:12,880 --> 00:31:15,440
Speaker 1: is is a little bit more doubtful. I think at

597
00:31:15,480 --> 00:31:19,200
Speaker 1: this point, Um, it's mostly baked in the cards that

598
00:31:19,200 --> 00:31:21,800
Speaker 1: that the Fed's gonna go five. And you look at

599
00:31:21,800 --> 00:31:24,080
Speaker 1: the market pricing right now and it's it's more or

600
00:31:24,160 --> 00:31:27,280
Speaker 1: less twenty five with a small chance of fifty um.

601
00:31:27,360 --> 00:31:30,479
Speaker 1: Whereas the e c b people just aren't sure not

602
00:31:30,600 --> 00:31:32,720
Speaker 1: only you know, how quickly they're going to go, but

603
00:31:32,800 --> 00:31:35,840
Speaker 1: how high they're actually going to ultimately hike. And and

604
00:31:35,880 --> 00:31:39,600
Speaker 1: I think the um there's a lot of uncertainty around

605
00:31:40,400 --> 00:31:42,800
Speaker 1: around Europe because their economy is much weaker than the

606
00:31:42,880 --> 00:31:46,760
Speaker 1: US economy, but their inflation continues to run much higher

607
00:31:46,800 --> 00:31:49,320
Speaker 1: than the U S and than U S inflation. So

608
00:31:49,320 --> 00:31:51,720
Speaker 1: so I think there's just a lot more doubt around

609
00:31:51,760 --> 00:31:54,440
Speaker 1: what's going on in Europe, and that's going to generate

610
00:31:54,480 --> 00:31:57,880
Speaker 1: more volatility, um you know, not only in things like

611
00:31:57,920 --> 00:32:02,000
Speaker 1: German bombs and the periphery, but also in also in

612
00:32:02,080 --> 00:32:05,800
Speaker 1: global developed market rates. So here and even Japan and

613
00:32:05,960 --> 00:32:11,040
Speaker 1: Japan is an interesting interesting well, I mean they got

614
00:32:11,040 --> 00:32:14,000
Speaker 1: to be the most interesting, um you know, if not

615
00:32:14,160 --> 00:32:20,640
Speaker 1: the most biggest mover. Yeah, so huge, huge mover relative right, Matt.

616
00:32:20,720 --> 00:32:25,040
Speaker 1: Because one of the things that remember that the job

617
00:32:25,160 --> 00:32:27,480
Speaker 1: the Bank of Japan had been doing is buying ten

618
00:32:27,560 --> 00:32:32,000
Speaker 1: year Japanese government bonds at ten basis points, right, So,

619
00:32:32,000 --> 00:32:34,320
Speaker 1: so they didn't let it float, and then they let

620
00:32:34,320 --> 00:32:36,600
Speaker 1: it float a little bit more up to basis points.

621
00:32:36,640 --> 00:32:39,440
Speaker 1: Now it's fifty basis points and right now, as of

622
00:32:39,600 --> 00:32:43,800
Speaker 1: overnight um ten year Japanese government bonds actually are trading

623
00:32:43,840 --> 00:32:48,000
Speaker 1: above half percent, above fifty basis points, and that means

624
00:32:48,000 --> 00:32:49,320
Speaker 1: that that the Bank of Japan is going to have

625
00:32:49,360 --> 00:32:51,640
Speaker 1: to intervene and come in and buy more bonds. But

626
00:32:51,720 --> 00:32:53,200
Speaker 1: there's a lot of talk they're going to get rid

627
00:32:53,240 --> 00:32:55,880
Speaker 1: of that buying program altogether, and that could even generate

628
00:32:55,920 --> 00:32:59,239
Speaker 1: even more about what happens then, I because you know,

629
00:32:59,280 --> 00:33:01,920
Speaker 1: the rate spen above fifty basis points for three of

630
00:33:01,920 --> 00:33:05,760
Speaker 1: the last four trading sessions, not including today, and so

631
00:33:05,800 --> 00:33:08,360
Speaker 1: I guess four out of five now, and they've bought

632
00:33:08,400 --> 00:33:11,680
Speaker 1: more than a hundred billion dollars worth of jgbs in

633
00:33:11,720 --> 00:33:15,600
Speaker 1: the last four sessions. So what happens if they just

634
00:33:15,720 --> 00:33:19,280
Speaker 1: let go? Yeah? So I think that you wind up seeing,

635
00:33:19,680 --> 00:33:22,440
Speaker 1: you know, maybe something not that similar to what happened

636
00:33:22,560 --> 00:33:26,080
Speaker 1: in UH in the guilt market UH last year, where

637
00:33:26,080 --> 00:33:28,200
Speaker 1: you wind up seeing maybe a fourty or fifty basis

638
00:33:28,200 --> 00:33:31,320
Speaker 1: points sell off in a hurry in ten year tenure

639
00:33:31,400 --> 00:33:34,400
Speaker 1: Japanese notes. But but interestingly, I think, and and look,

640
00:33:34,440 --> 00:33:36,840
Speaker 1: I'm not an expert on the Japanese government bond market,

641
00:33:36,880 --> 00:33:39,920
Speaker 1: but what I what I do know and what I

642
00:33:39,960 --> 00:33:43,760
Speaker 1: have seen, is that thirty year Japanese government bond yields

643
00:33:43,760 --> 00:33:46,960
Speaker 1: have gone up significantly because that's not what the Bank

644
00:33:47,000 --> 00:33:49,320
Speaker 1: of Japan was targeting, and they haven't been buying that sector.

645
00:33:49,400 --> 00:33:51,840
Speaker 1: So anyone who needed to hedge long term interest rate

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00:33:51,920 --> 00:33:54,360
Speaker 1: risk was selling thirty years. So I think you could

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00:33:54,360 --> 00:33:58,040
Speaker 1: have this weird dynamic where thirty year Japanese yields might

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00:33:58,080 --> 00:34:00,680
Speaker 1: actually rally a little bit as people start selling more

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00:34:00,720 --> 00:34:03,160
Speaker 1: ten years, and you can actually see the ten year

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Speaker 1: thirty year curve actually actually flattened quite a lot, with

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Speaker 1: the ten year sector really underperforming on that curve, and

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Speaker 1: and that will generate volatility globally. Now I think ultimately

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Speaker 1: in the US it might be worth ten or fifteen

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00:34:16,880 --> 00:34:19,880
Speaker 1: basis points in the tenure. But we'll but but but

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Speaker 1: that will stabilize and we'll focus on domestic issues here.

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Speaker 1: Ira Jersey, our chief US rate Strategies for Bluebery Intelligence.

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Speaker 1: Thanks very much for joining us. Thanks for listening to

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Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to

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Speaker 1: interviews with Apple Podcasts or whatever podcast platform you prefer.

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Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller. Yet

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Speaker 1: on Fall Sweeney, I'm on Twitter at pt Sweeney. Before

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Speaker 1: the podcast, you can always catch us worldwide at Bloomberg

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Speaker 1: Radio