WEBVTT - Surveillance: Red Hot Inflation (Podcast)

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<v Speaker 1>Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

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<v Speaker 1>with Jonathan Ferrell and Lisa A. Brawnwitz. Daily we bring

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<v Speaker 1>you insight from the best and economics, finance, investment, and

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<v Speaker 1>international relations. Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg

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<v Speaker 1>dot Com, and of course, on the Bloomberg terminal. Lindsay

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<v Speaker 1>Pegs that joins us right now chief economist as Stephile.

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<v Speaker 1>Here she digests what Mike McKee was talking about out

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<v Speaker 1>in Victor, Idaho. Lindsay, your immediate reaction to this stunning report, Well,

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<v Speaker 1>it certainly reinforces the upward, relentless upward trend that we've

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<v Speaker 1>seen in prices, undermining optimism that we would see some

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<v Speaker 1>sort of near term relief now. To be fair, as

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<v Speaker 1>you discussed earlier, the vast majority of the price pressures

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<v Speaker 1>do seem to be centered in food and energy, and

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<v Speaker 1>we did see some brief at least on the annual

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<v Speaker 1>basis of the core. But for the average American household,

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<v Speaker 1>food and energy are two of the key categories of

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<v Speaker 1>non discretionary spending, and so when we see slightly less

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<v Speaker 1>pressure in terms of airline fares, that offers very little

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<v Speaker 1>reprieve for the average household struggling to fill up their

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<v Speaker 1>car or put groceries on the table. So this is

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<v Speaker 1>going to amp up pressure on policy makers, both in

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<v Speaker 1>the White House and monetary policy makers to make a

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<v Speaker 1>stronger move to provide near term relief. And lindsay this

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<v Speaker 1>goes to a point that was highlighted in a Wall

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<v Speaker 1>Street Journal article today talking about how that headline number,

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<v Speaker 1>that headline CPI figure of now nine point one is

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<v Speaker 1>going to matter a lot more than the core number

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<v Speaker 1>just because of inflation expectations and what the consumer is feeling,

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<v Speaker 1>and that the FETE is expressed much more concern about this.

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<v Speaker 1>So what are you gaming out based on this number?

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<v Speaker 1>How that could change the sequence the sequence of rate

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<v Speaker 1>heights not necessarily a seventy five basis points this month,

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<v Speaker 1>but the follow ones September and thereafter well, absolutely Typically

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<v Speaker 1>we exclude food and energy because they tend to be

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<v Speaker 1>the most volatile components. So from a monetary policy standpoint,

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<v Speaker 1>we often see the FED focused on the core, but

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<v Speaker 1>you're right, the average American is focused on the headline

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<v Speaker 1>number because we pay for food and energy. So how

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<v Speaker 1>does this translate into the pathway for FED policy. The

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<v Speaker 1>Fed already has that seventy five basis points on the table,

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<v Speaker 1>and this morning's report seems to solidify that seventy basis

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<v Speaker 1>points in just less than two weeks time. But going forward,

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<v Speaker 1>if we continue to see these elevated levels of prices,

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<v Speaker 1>given the Fed has told us that the prerequisite for

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<v Speaker 1>a more benign pathway is a market decline in headline inflation,

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<v Speaker 1>it's hard to imagine that they take a softer stance

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<v Speaker 1>or begin to back away from additional seventy five basis

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<v Speaker 1>point increases as we move closer to the fourth quarterer.

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<v Speaker 1>See let's go through the estimates for this FED for

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<v Speaker 1>year end. They've got kill p c A of four

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<v Speaker 1>point two. Can you just run me through how far

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<v Speaker 1>off the mark you think that estimate already is. That's

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<v Speaker 1>that's pretty optimistic. But to be fair, historically, the Fed

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<v Speaker 1>does appear to be overly optimistic in terms of its

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<v Speaker 1>growth and inflation forecast sending a more positive signal to

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<v Speaker 1>the market and market expectations. But when we talk about

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<v Speaker 1>the PC, it's six percent right now, getting down to

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<v Speaker 1>four percent, which is five months and the year left,

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<v Speaker 1>it's going to require markedly different conditions in the international market.

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<v Speaker 1>We're going to have to see balance restored to global

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<v Speaker 1>marketplaces and or resolution reached overseas, neither of which the

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<v Speaker 1>FED has control over. The FED can only raise rates

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<v Speaker 1>and tap down the demand side in terms of price pressures,

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<v Speaker 1>but it cannot control the supply side. And I fear

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<v Speaker 1>that in order to get that optimistic level of four

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<v Speaker 1>percent by the end of the year, or nearer two percent,

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<v Speaker 1>as the FED projects by the end of next year,

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<v Speaker 1>we will have to see vast improvement in international factors.

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<v Speaker 1>Lindsay domestically, I just want to understand how father Fed's

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<v Speaker 1>going to push it. They can't say everything you've just said,

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<v Speaker 1>because then they rise a credibility issue, and you know

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<v Speaker 1>if they said that, what would happen with this market?

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<v Speaker 1>It's the FED back in a way equities with rallied

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<v Speaker 1>credit spreads with titan, that dollar might weaken. How far

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<v Speaker 1>do you think this feed is going to push this? Well,

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<v Speaker 1>according to Federal Reserve Chairman Jerome Powell, he is willing

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<v Speaker 1>to push this as far as needed, even if that

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<v Speaker 1>means a market decline in domestic activity in order to

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<v Speaker 1>get inflation under control. Right now. They are hyper focused,

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<v Speaker 1>solely focused on inflation and that is their key objective,

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<v Speaker 1>getting that price stability. So if they need another seventy

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<v Speaker 1>in July and three more seventy five rate hikes by

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<v Speaker 1>the end of the year, I think they'd be willing

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<v Speaker 1>to do it. Do I think that's the appropriate pathway?

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<v Speaker 1>Absolutely not, But I think in order to maintain credibility

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<v Speaker 1>and try at least and get some sort of of

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<v Speaker 1>relief from prices, that their hands are tied. That's all

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<v Speaker 1>they have, just the mice and thank you scp X

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<v Speaker 1>of the st Michael O'Rourke, chief market strategist at Jones

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<v Speaker 1>Trading Today, Michael, how does your world change with the

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<v Speaker 1>nine point one print? Well, I mean it's very consistent

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<v Speaker 1>with where we've been. Obviously, we've seen this inflation rising

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<v Speaker 1>for over a year now. Markets have been concerned about

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<v Speaker 1>it and the main concern is that the Fed's been

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<v Speaker 1>behind the curve and that was proven true once again today.

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<v Speaker 1>So I expect investors to continue to be defensive and

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<v Speaker 1>I think it's gonna be a rough road the second

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<v Speaker 1>half of twenty two. Does this inflation read Michael, change

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<v Speaker 1>anything in your view? In your trading strategy today. Uh,

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<v Speaker 1>it doesn't. Obviously, there was a lot of hype around

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<v Speaker 1>this number, a lot of high expectations that the number

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<v Speaker 1>would be um hotter than expected, and it was. I

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<v Speaker 1>will say the one I guess the bright spot in

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<v Speaker 1>there is the fact that the course cp I continued

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<v Speaker 1>it's slight down trend, and that you know that peak

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<v Speaker 1>was still at six six point five, your your growth

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<v Speaker 1>back in March um and then when you look at

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<v Speaker 1>w TY crew being around a hundred dollars and starting

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<v Speaker 1>to come back in, if energy continues to come back in,

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<v Speaker 1>that would be a hopeful sign. But the problem is

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<v Speaker 1>is we're still looking at asset valuations that are still

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<v Speaker 1>pretty expensive relative to where the economy is, and the

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<v Speaker 1>fact that we have significant rate rate hikes ahead of us.

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<v Speaker 1>How much does core CPI matter going forward? And how

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<v Speaker 1>much is this purely going to be a headline figure

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<v Speaker 1>for a FED trained on consumer expectations. Well, you know,

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<v Speaker 1>as you noted, the FED is focused on the headline

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<v Speaker 1>right now. But as long as the crew keeps coming down,

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<v Speaker 1>as long as energy prices come down, or at least

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<v Speaker 1>they've put their peak into for this cycle or this move,

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<v Speaker 1>then core becomes a more meaningful number, and you can

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<v Speaker 1>see expectations shift towards the focus on core. Obviously, if

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<v Speaker 1>if we continue to have an energy crisis, that if

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<v Speaker 1>there's another flare up or we see w T, I

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<v Speaker 1>make a run back towards the headline number becomes the

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<v Speaker 1>focus again. But I think in the seecond half of

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<v Speaker 1>the year, I think um people will start to shift

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<v Speaker 1>a focus towards cores. Again, it's still not a pretty situation,

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<v Speaker 1>but obviously it's not as terrible as as a nine

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<v Speaker 1>point one percent year of the year growth reading looks.

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<v Speaker 1>C IBC reporting in from Toronto, Catherine Judge, as we

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<v Speaker 1>noted earlier, she says Shelter a major contributor in Katherine

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<v Speaker 1>Judge really quite importantly on the deceleration of Michael Rourke

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<v Speaker 1>just discussed really saying this is so much base effects,

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<v Speaker 1>which is some mumbo jumble for looking back twelve months

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<v Speaker 1>if you will. We won't go into that right now, Michael.

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<v Speaker 1>The thing that devolves down to is the earning season

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<v Speaker 1>which begins, I believe Lisa it's tomorrow as well. How

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<v Speaker 1>does inflation devolved down to the revenue view forward for corporations. Well,

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<v Speaker 1>it's tricky here, right. I agree. Here you're seeing these

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<v Speaker 1>these good revenue numbers because people have been raising prices.

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<v Speaker 1>But Delta Airlines might be a great example today. Obviously

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<v Speaker 1>they're they're talking about how strong businesses, how much demand

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<v Speaker 1>there is, right, but they missed on the bottom line.

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<v Speaker 1>And you know, if you look at their earnings, I

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<v Speaker 1>think X energy there, their costs were up versus H versus.

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<v Speaker 1>So I think that that's that's the squeeze. See. I

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<v Speaker 1>don't think you can trust the revenue number. I guess

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<v Speaker 1>per se, and you really have to watch and see

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<v Speaker 1>where the margins are being squeezed for profits. Michael Rourke,

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<v Speaker 1>thank you so much. With Jones trity that they right now.

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<v Speaker 1>This is something we rarely do but because a water

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<v Speaker 1>hazard on Bluemberg radio. But when you can get someone

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<v Speaker 1>standing in the South Fork of the Snake River in

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<v Speaker 1>a drift boat U fishing away and speak to them

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<v Speaker 1>at radio, it's always constructive joining us. The fisher person

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<v Speaker 1>David Kotak joins us this morning with Cumberland Advisers. David,

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<v Speaker 1>of course you're out in Idaho talking economics, but is

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<v Speaker 1>there a little bit of fishing going on for the

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<v Speaker 1>acclaimed Yellowstone cutthroat trout. Absolutely, Tom, thank you so much

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<v Speaker 1>for having me. And it's nice to be with you

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<v Speaker 1>and pretty and pretty and you can come fishing with

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<v Speaker 1>me anytime. I can't find waiters long enough to fit. Tom.

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<v Speaker 1>You got that right. I've turned this down for years.

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<v Speaker 1>I don't you know. I'd have to have Critty put

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<v Speaker 1>the worm on the hook for me right now, David,

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<v Speaker 1>you and I are the only two in the planet

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<v Speaker 1>that remember inflation like this. But you and I also

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<v Speaker 1>know this is different out of pandemic and massive fiscal stimulus.

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<v Speaker 1>Explain to our audience coast to coast, shell shocked at

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<v Speaker 1>nine point, why this is a different inflation. Yeah, this

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<v Speaker 1>is a different inflation. And and thank you Tom. The

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<v Speaker 1>you have to back the way. This is not a

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<v Speaker 1>business cycle. So we have a shooting war widening in Europe,

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<v Speaker 1>we have a worldwide financial sanctions payments war. We still

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<v Speaker 1>have a pandemic, and still have COVID shocks. One of

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<v Speaker 1>the pannels that I'm doing and tomorrow in the Victor

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<v Speaker 1>Idaho is on long COVID. Millions of people with disability

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<v Speaker 1>and the labor force, and we have massive political turmoil,

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<v Speaker 1>including a country which is having a war between the states.

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<v Speaker 1>This is not a normal shock, it's huge, and so

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<v Speaker 1>shock response is what financial markets are dealing with. You've

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<v Speaker 1>been talking about it this morning, and I really appreciate

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<v Speaker 1>a forty year old the story you told about Detroit.

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<v Speaker 1>It makes those of us who have a perspective of

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<v Speaker 1>history enable us to respect the history. Thank you for that. Well,

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<v Speaker 1>I have to let's talk about the history. Tom has

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<v Speaker 1>reminds me over and over and over again this morning

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<v Speaker 1>that a negative sixteen yield curve in version that we're

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<v Speaker 1>seeing on the two tens curve will put that into

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<v Speaker 1>perspective of the vulgar area. And you saw an inversion

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<v Speaker 1>of negative two hundred, right, so this is something that

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<v Speaker 1>you actually haven't seen going back to two thousand. Can

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<v Speaker 1>you occurrent versions way rarer cretty than you think? Well,

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<v Speaker 1>it's funny because I feel like it's all we've been

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<v Speaker 1>talking about for the last couple of months, David, how

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<v Speaker 1>much faith? How much stock should we put in this

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<v Speaker 1>curve and version that keeps getting more and more negative? Well,

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<v Speaker 1>I just I just published and not long ago, a

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<v Speaker 1>pencil and eighty pages of data. But it compared two

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<v Speaker 1>metrics and Neil Kers the took ten which everybody's talking

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<v Speaker 1>about looking at, and the old Bobbler rent comparison of

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<v Speaker 1>the very short term rate and the long term saying

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<v Speaker 1>treasury bills is this thirty year treasury bond? You must,

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<v Speaker 1>in my opinion, look at both curves. When all of

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<v Speaker 1>them are flat, we really encounter trouble. And right now

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<v Speaker 1>the long short curve is not inverted. The middle is inverted.

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<v Speaker 1>And so that's a mixed message. So I'm not all

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<v Speaker 1>up in arms over to ten if the short rate,

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<v Speaker 1>which it looks like it's coming, because I agree with

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<v Speaker 1>ira and and your conversation earlier, We're gonna get seventy five.

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<v Speaker 1>We're gonna get seventy five again. We're going to take

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<v Speaker 1>a Fed funds rate somewhere between three and four ten

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<v Speaker 1>year treasury where's it go maybe close to four um.

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<v Speaker 1>That's an expectation, and that will cramp down the US

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<v Speaker 1>economy hard. We're already seen some of that in the

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<v Speaker 1>data flow today. David, are you seeing this in Florida?

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<v Speaker 1>Come on, Florida is a massive book critty, Who do

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<v Speaker 1>we know that's not moving to Florida? Florida or Austin, Texas. Right, yeah,

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<v Speaker 1>I mean, what what is the state in your Florida

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<v Speaker 1>David Kotak, Well, if Florida have two things going on.

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<v Speaker 1>When we have a public health policy which is ignoring

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<v Speaker 1>public health that isn't causing outward movement in some businesses

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<v Speaker 1>and service sectors and events, and we have an influx

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<v Speaker 1>of people, and the influx of people look at no

0:13:26.720 --> 0:13:29.839
<v Speaker 1>taxes and they want to move from someplace else. So

0:13:29.960 --> 0:13:34.920
<v Speaker 1>it's a mixed picture in Florida. I am not so

0:13:34.960 --> 0:13:38.040
<v Speaker 1>sanguine about Florida. Now we need a good hurricane. Watch

0:13:38.040 --> 0:13:41.040
<v Speaker 1>what the shock will be. You talked about heat in Texas.

0:13:41.679 --> 0:13:45.160
<v Speaker 1>Come to Florida. It's ninety degrees and ninety humidity all

0:13:45.160 --> 0:13:48.120
<v Speaker 1>the time. David, we got to talk about investment because

0:13:48.160 --> 0:13:51.440
<v Speaker 1>you've always been a Cumberland adviser is very clear about

0:13:51.480 --> 0:13:55.080
<v Speaker 1>your investment exposure. Now what are you exposed to? And

0:13:55.120 --> 0:13:59.199
<v Speaker 1>may I guess it's municipal bonds? Well, Muni's on the

0:13:59.400 --> 0:14:01.840
<v Speaker 1>on the eyeside. We have been very heavy on the

0:14:01.880 --> 0:14:05.920
<v Speaker 1>by side, long muties above four, high grade tax free.

0:14:06.520 --> 0:14:10.080
<v Speaker 1>So that's one side. On the stock market, US stock market, right,

0:14:10.280 --> 0:14:17.600
<v Speaker 1>U S C tf strategy portfolio is in cash, it

0:14:17.679 --> 0:14:21.120
<v Speaker 1>is in the quantitative work, and the other remaining fifty

0:14:22.040 --> 0:14:27.200
<v Speaker 1>is in defense, health care, and some selected smaller sectors.

0:14:27.240 --> 0:14:30.960
<v Speaker 1>We are very negative on the outlook near term for

0:14:31.000 --> 0:14:35.200
<v Speaker 1>the stock mark. When can you buy big tech? Joe

0:14:35.240 --> 0:14:38.800
<v Speaker 1>Feldman marked down Amazon today, left it outperformed, but took

0:14:38.800 --> 0:14:40.720
<v Speaker 1>it down just on any but dot tweak? What do

0:14:40.760 --> 0:14:43.840
<v Speaker 1>you do with big tuch? I'm underweight, Tom, and I

0:14:43.880 --> 0:14:47.440
<v Speaker 1>don't think this blood bleading is over. David, Thank you

0:14:47.480 --> 0:14:49.640
<v Speaker 1>so much. Get back to fishing on the south fork

0:14:50.520 --> 0:14:53.600
<v Speaker 1>of the Snake River. Critty, I just live vicariously through

0:14:53.640 --> 0:14:57.080
<v Speaker 1>these guys. There's a lot of nature involved. Clearly, it's

0:14:57.120 --> 0:15:00.520
<v Speaker 1>just you know McKees either, you know buying based at

0:15:00.520 --> 0:15:03.880
<v Speaker 1>the Red Sox at Fenway. Parker is off some trout

0:15:03.920 --> 0:15:07.040
<v Speaker 1>fishing farm with Ellen Zentner, and they're not They're like

0:15:07.120 --> 0:15:10.280
<v Speaker 1>real trout. You know, these are like wild I think,

0:15:11.200 --> 0:15:13.480
<v Speaker 1>like wild trout? Can I make it even worse? They

0:15:13.520 --> 0:15:16.080
<v Speaker 1>get paid to do that? How exciting is that? It's

0:15:16.160 --> 0:15:22.960
<v Speaker 1>very cool? Right now? We wanted to do this, which

0:15:23.000 --> 0:15:25.960
<v Speaker 1>is get a snapshot of the German people and how

0:15:26.000 --> 0:15:28.800
<v Speaker 1>they will react to the tumult that is on the

0:15:28.800 --> 0:15:32.200
<v Speaker 1>Bloomberg screen. Leanna Fix is expert at this to say,

0:15:32.240 --> 0:15:34.640
<v Speaker 1>she's programmed director where the work at London School of

0:15:34.680 --> 0:15:38.200
<v Speaker 1>Economic She's at the Corporate Foundation UH in Germany and

0:15:38.360 --> 0:15:43.720
<v Speaker 1>truly an expert on what the German people do. Leanna,

0:15:43.800 --> 0:15:47.400
<v Speaker 1>thank you so much for joining us in Hamburg. In

0:15:47.520 --> 0:15:52.120
<v Speaker 1>January the lowest thirty one degrees fahrenheit. In February thirty

0:15:52.120 --> 0:15:57.160
<v Speaker 1>two degrees fahrenheit, in March thirty six degrees fahrenheit. What

0:15:57.240 --> 0:16:03.600
<v Speaker 1>will the people of Hamburg do this coming cold winter? Well,

0:16:03.640 --> 0:16:05.800
<v Speaker 1>I think you're very well to say that there's a

0:16:05.800 --> 0:16:09.480
<v Speaker 1>lot of uncertainty and a lot of fear among the

0:16:09.480 --> 0:16:12.720
<v Speaker 1>German public, not only about the prices, about the energy

0:16:12.800 --> 0:16:17.040
<v Speaker 1>prices that will um that are rising, about payments that

0:16:17.080 --> 0:16:18.960
<v Speaker 1>they will have to make at the end of the

0:16:19.080 --> 0:16:22.480
<v Speaker 1>year that might be twofold, threefold, fourfold as much as

0:16:22.560 --> 0:16:25.560
<v Speaker 1>they've paid in the past. But there's also a concern

0:16:25.920 --> 0:16:29.480
<v Speaker 1>whether there will actually be parts of the population that

0:16:29.560 --> 0:16:32.440
<v Speaker 1>will not be able to warm the households. Especially the

0:16:32.520 --> 0:16:36.040
<v Speaker 1>news that some communities are preparing centers where you can

0:16:36.080 --> 0:16:40.080
<v Speaker 1>need to keep yourself warm has sent some quite some

0:16:40.120 --> 0:16:45.320
<v Speaker 1>shock waves through Germany. So it's something which is observed

0:16:45.400 --> 0:16:48.560
<v Speaker 1>very closely for Moscow obviously, and we see how Moscow

0:16:48.680 --> 0:16:51.440
<v Speaker 1>tries to play this game and to create even more

0:16:51.600 --> 0:16:54.400
<v Speaker 1>fear among the German but also among some of the

0:16:54.440 --> 0:16:58.200
<v Speaker 1>European publicists. In your research note you say that Mr

0:16:58.320 --> 0:17:03.720
<v Speaker 1>Putin works from fear? Can he bluff here? I mean,

0:17:03.800 --> 0:17:06.040
<v Speaker 1>what is the level of bluff? What is the level

0:17:06.680 --> 0:17:12.160
<v Speaker 1>of the input of fear that Mr Putin will do well?

0:17:12.200 --> 0:17:15.199
<v Speaker 1>He has a short term advantage because the increase in

0:17:15.320 --> 0:17:20.440
<v Speaker 1>gas poises leads to the surprising effect that Russia gets

0:17:20.560 --> 0:17:23.479
<v Speaker 1>as it gets revenues from gas as much as it

0:17:23.560 --> 0:17:26.880
<v Speaker 1>needs and even more than before. Although we do have

0:17:27.080 --> 0:17:30.480
<v Speaker 1>an oil oil sanctions from the europe Union that will

0:17:30.800 --> 0:17:33.439
<v Speaker 1>kick in at the end of the year, but at

0:17:33.480 --> 0:17:38.159
<v Speaker 1>the moment, Russia can afford to reduce the supplies for

0:17:38.280 --> 0:17:40.960
<v Speaker 1>Europe and at the same time it gets enough we

0:17:41.080 --> 0:17:45.080
<v Speaker 1>venues to sustain its own state budget. Um. This will

0:17:45.200 --> 0:17:47.800
<v Speaker 1>change in the medium to long term, but at the

0:17:47.840 --> 0:17:52.080
<v Speaker 1>moment this really gives Russia the opportunity to put pressure

0:17:52.280 --> 0:17:56.119
<v Speaker 1>on Germany and on Europe, and we will probably see

0:17:56.160 --> 0:18:00.280
<v Speaker 1>that the nod Stream one pipeline will not on to

0:18:00.480 --> 0:18:05.520
<v Speaker 1>its previous supplies and capacities, but will probably be slowly

0:18:06.080 --> 0:18:08.760
<v Speaker 1>would use by by Moscow. You know, one of the

0:18:08.760 --> 0:18:10.600
<v Speaker 1>parlor games right now on Wall Street is trying to

0:18:10.640 --> 0:18:13.360
<v Speaker 1>figure out what the implications would be should the pipeline

0:18:13.400 --> 0:18:17.119
<v Speaker 1>get shut off an entirety versus fifty percent capacity resumed, etcetera.

0:18:17.359 --> 0:18:20.480
<v Speaker 1>And all of these potential outcomes from your perspective, how

0:18:20.560 --> 0:18:24.600
<v Speaker 1>quickly is Germany moving to really replace those gas supplies?

0:18:24.600 --> 0:18:28.159
<v Speaker 1>How quickly could they be independent of Russia gas in

0:18:28.200 --> 0:18:31.000
<v Speaker 1>the face of some of these huge economic concerns that

0:18:31.040 --> 0:18:34.760
<v Speaker 1>people are projecting in We've seen that Germany has moved

0:18:34.840 --> 0:18:38.159
<v Speaker 1>quite quickly when it came to Washington oil, surprisingly to everyone,

0:18:38.640 --> 0:18:42.199
<v Speaker 1>Germany agreed to oil sanctions that will come at the

0:18:42.280 --> 0:18:44.360
<v Speaker 1>end of the year. But gas it is more difficult.

0:18:44.400 --> 0:18:46.920
<v Speaker 1>So there are a lot of attempts to get allergy

0:18:47.040 --> 0:18:51.160
<v Speaker 1>gas to construct allergy terminals because Germany didn't have any

0:18:51.280 --> 0:18:55.240
<v Speaker 1>before it was so dependent on cheap washing gask coming

0:18:55.240 --> 0:18:58.040
<v Speaker 1>through the pipelines their travels to cut time and to

0:18:58.200 --> 0:19:01.280
<v Speaker 1>other countries. But this will not be enough. So in

0:19:01.359 --> 0:19:04.600
<v Speaker 1>case the nord Stream one pipeline will be shut down entirely,

0:19:05.040 --> 0:19:09.879
<v Speaker 1>which is probably not as likely as a slow decrease

0:19:10.000 --> 0:19:12.440
<v Speaker 1>from the Washington side, because then they will still get

0:19:12.480 --> 0:19:16.520
<v Speaker 1>wevenues from the nord Stream one pipeline. But if that continuous,

0:19:17.040 --> 0:19:20.800
<v Speaker 1>Germany will have to reduce its DAS consumption quite significantly,

0:19:21.160 --> 0:19:25.320
<v Speaker 1>the estimates of between twenty and thirty of reductions, and

0:19:25.359 --> 0:19:27.560
<v Speaker 1>this will obviously be a challenge, and it needs to

0:19:27.560 --> 0:19:30.320
<v Speaker 1>start now in the summer, not in the winter, because

0:19:30.440 --> 0:19:32.800
<v Speaker 1>we need already now in the sum of those efforts

0:19:32.800 --> 0:19:34.520
<v Speaker 1>to fill the storage. And we've heard that a lot

0:19:34.520 --> 0:19:36.040
<v Speaker 1>over the last few weeks, and I was grit to

0:19:36.040 --> 0:19:38.960
<v Speaker 1>catch Emily unaffixed that and they call the foundation. This

0:19:39.000 --> 0:19:42.800
<v Speaker 1>is the Bloomberg Surveillance Podcast. Thanks for listening. Join us

0:19:42.880 --> 0:19:46.639
<v Speaker 1>live weekdays from seven to ten am Eastern on Bloomberg

0:19:46.720 --> 0:19:50.520
<v Speaker 1>Radio and on Bloomberg Television each day from six to

0:19:50.680 --> 0:19:55.320
<v Speaker 1>nine am for insight from the best in economics, finance, investment,

0:19:55.480 --> 0:20:00.480
<v Speaker 1>and international relations. And subscribe to the Surveillance podcast on

0:20:00.600 --> 0:20:04.399
<v Speaker 1>Apple podcast, SoundCloud, Bloomberg dot com, and of course on

0:20:04.520 --> 0:20:15.920
<v Speaker 1>the terminal. I'm Tom keene In. This is Bloomberg m