Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Let's take a look
Speaker 1: at those meme stocks. I mean again, I think about
Speaker 1: the beginning of the meme stock mania, if you will.
Speaker 1: It was a lot of smaller cab mid cap stocks,
Speaker 1: high short interest, uh and easy for these Reddit traders
Speaker 1: to kind of force a short squeeze, if you will.
Speaker 1: And it was really exacerbated by social media. But it
Speaker 1: seems still broadened out a little bit from that limited
Speaker 1: kind of scope. Barry Billy Lipscholtz, equities reporter for Bloomberg News,
Speaker 1: joins us on the phone here. Bailey, thanks so much
Speaker 1: for joining us here. The meme stock craze, it was there,
Speaker 1: it kind of went away. I'm thinking game stop and
Speaker 1: things like that, but it's come back. What's what's going
Speaker 1: on these days? Well, the biggest difference we're seeing now
Speaker 1: compared to where it was back in early January or
Speaker 1: into late January. Really has been kind of this incessant
Speaker 1: desire to find the next hot stock, and we're seeing
Speaker 1: that with hedge funds dipping their toe into it. Obviously,
Speaker 1: people on Reddit or stock twits or especially Twitter these
Speaker 1: days UM are pumping up their newest bets um. It's
Speaker 1: it's been really interesting just because it's we're seeing one
Speaker 1: stock really pop off for a day or a week,
Speaker 1: and then very quickly the scope tends to shift, which
Speaker 1: is obviously, again very different than what we saw in
Speaker 1: late January, where game stop AMC costs express. We're all
Speaker 1: kind of mimicking each other. By the way, is that
Speaker 1: the order now is Twitter um the king of locations
Speaker 1: for the meme stock mafia, and then stock twits and
Speaker 1: then read it. I mean, how should we follow this best?
Speaker 1: I think it's still probably goes Reddit Twitter than stock twits. Twitter,
Speaker 1: though Death really has become more and more popular simply
Speaker 1: because of the way the platforms laid out in the
Speaker 1: ability to follow um individual accounts that may have more
Speaker 1: insider perceived insight than others. Read it still kind of
Speaker 1: is a wild wild West where there's a mega thread
Speaker 1: and a lot of game stop being pushed um and
Speaker 1: then I would say stock to it's probably his third
Speaker 1: in line. But we're definitely seeing more of a more
Speaker 1: of a focus on Twitter um over the last you know,
Speaker 1: month or so, just because again, I think that the
Speaker 1: layout kind of amends itself more toward a average gambler
Speaker 1: or an average investor excuse me, or average gambler attention.
Speaker 1: I think the average gambler is fine. Yeah, that's fine.
Speaker 1: I think even the apes would defined with that Billy
Speaker 1: talk to us about like, I'm starting to see some
Speaker 1: more reporting that it's not just the retail investors or
Speaker 1: you know, the Dave portnoise of the world from Barstool Sports,
Speaker 1: who's got a big social media following, but it might
Speaker 1: actually be some professional investors, hedge funds getting in it.
Speaker 1: Do we have evidence, said, Golden Sound algorithm? What's that
Speaker 1: Goldman's got an album? An algorithm? Right? So, I mean,
Speaker 1: what's the role of the professional investor in here, Bailey?
Speaker 1: I think they're kind of picking off where they can
Speaker 1: make money. Obviously, if you just look at Alane, some
Speaker 1: of the trading volume in these stocks, it's kind of
Speaker 1: hard to sit back and argue that a retail crowd
Speaker 1: is able, you know, to have trade hundreds of millions
Speaker 1: of shares of AMC while also investing in Wendy's and
Speaker 1: other parts of the market. So I do think, and
Speaker 1: we have been hearing more and more that hedge funds
Speaker 1: have to be playing some part in this, especially when
Speaker 1: you look at kind of some of the call option
Speaker 1: trading and the underlying stock trades. It can't really be
Speaker 1: in the consensus that I've been hearing more and more
Speaker 1: um from my sources is that it can't really be
Speaker 1: just a coordinated retail attack. It has to be folks
Speaker 1: on Wall Street, your professional traders who are kind of
Speaker 1: jumping in on these trades, and whether they're getting in
Speaker 1: earlier or later continuing to help ride some of the momentum,
Speaker 1: are definitely playing apart. I'm waiting for a hedge fund
Speaker 1: to embed people on Wall Street beats, you know. I
Speaker 1: saw the other day somebody posted a screenshot of his
Speaker 1: td A Meritorie account with a one million dollar investment
Speaker 1: in a meme stock, and I thought, this has got
Speaker 1: to be a hedge fund dude who just wants to
Speaker 1: to pretend he's among the masses and try and speak
Speaker 1: as insensitively as he can to to stir up some
Speaker 1: drama around his stock. Also, they don't want to call
Speaker 1: it a meme stock. A lot. I know a lot
Speaker 1: of people on Wall Street Best Now are saying, hey,
Speaker 1: of course there's not a meme stock. That's not fair.
Speaker 1: Do you hear that a lot too? Yeah? No, I
Speaker 1: think you're seeing a divide. I remember I wrote something
Speaker 1: we mentioned Bill the Bear in the meme stock basket
Speaker 1: back in January. The amount of people who emailed me
Speaker 1: saying Bill the Bear is not a meme stock and
Speaker 1: has a solid core business and we're fundamentally long it.
Speaker 1: I think the term memes stock gets thrown around a bit,
Speaker 1: and depending on who's investing in the company or what
Speaker 1: the company is, definitely does trigger push back um because
Speaker 1: they don't want to group you know, some of these
Speaker 1: other companies with the likes of you know, an AMC
Speaker 1: creating at the market capital is at now or something
Speaker 1: like Express. It is definitely fascinating. Bailey, thanks so much
Speaker 1: for joining us. Bailey lip Schultz, equities reporter for Bloomberg News.
Speaker 1: I tell you can lose time. I went on Wall
Speaker 1: Street Bets the other day and I looked up and
Speaker 1: all of a sudden hour had passed. It was like
Speaker 1: I was playing Red Dead, Redemption two or something. When
Speaker 1: Chairman pal does speak this afternoon in two thirty Wall
Speaker 1: Street time, which Bloomberg will bring to you live, investors
Speaker 1: will be focusing uh many topics, but clearly inflation is
Speaker 1: top of the list, as the Fed chairman continue to
Speaker 1: believe that the inflation we are seeing in this economy
Speaker 1: is transitory or is it perhaps something more that will
Speaker 1: certainly be key. Let's check in with Marcus Schomer. He's
Speaker 1: a chief economist for pine Bridge Investments. Marcus, I'll love
Speaker 1: to get your thoughts here on inflation, um, and how
Speaker 1: you're viewing it and maybe what we might hear from
Speaker 1: Chairman Powell on this issue. Well, I it's not to
Speaker 1: be back on the show, um, And you know those
Speaker 1: are the themes that I talked a lot of our
Speaker 1: clients about as well. UM. I don't think we're going
Speaker 1: to hear much from from the feeding from Power today.
Speaker 1: I think they they still have enough time to hide
Speaker 1: behind the transitory sense that they've built around this issue. UM.
Speaker 1: I've sort of been quite critical of this because we're
Speaker 1: seeing inflation everywhere, right, and we shouldn't forget what the
Speaker 1: Fed is doing is they're choosing the smallest, narrowest and
Speaker 1: slowest inflation measure that we have where everywhere else outside
Speaker 1: of the PC to fate that which they prefer as
Speaker 1: the inflation measure in CPI and PPI, in financial markets
Speaker 1: and the housing market everywhere else, inflation is wanting much
Speaker 1: much higher than what they measure. Um but we kind
Speaker 1: of know that they're hiding behind this this CPS, this
Speaker 1: PC into a corner, Marcus. I mean a lot of
Speaker 1: people are starting to say, you know, they can't get
Speaker 1: out now without royally markets. I don't think it's a
Speaker 1: corner that they don't see it that way. They want
Speaker 1: to be there. I mean, I think what they're telling
Speaker 1: us is actually honest. They think running the economy hot
Speaker 1: is a good idea, Whereas if you look at the economy,
Speaker 1: I'm not so sure that it is such a good
Speaker 1: idea because I start to see more and more science
Speaker 1: that rising inflation, rising prices are now slowing growth. Because
Speaker 1: that's also the answer to this question, is inflation transitory,
Speaker 1: And in my view, inflation is always transitory if it
Speaker 1: doesn't also translate into higher wages, because if prices go up,
Speaker 1: purchase and tall goes down, and consumption will slow. And
Speaker 1: I think that's what start, that's what starting to see.
Speaker 1: I'm getting more nervous about the growth outlook in the
Speaker 1: US in the second half because of the surgeon prices
Speaker 1: that you've seen and the lack of follow up in wages.
Speaker 1: So Marcus, but as you were suggesting here, wage inflation,
Speaker 1: we haven't generally seen it. And even before the pandemic,
Speaker 1: when we're running in you know, effectively, you know, full employment,
Speaker 1: wage inflation was only you know, three and a half percent.
Speaker 1: I mean that that didn't seem too terrible. Do you
Speaker 1: think wage inflation is a material risk for this U
Speaker 1: S economy? Um? No, I think it's it's the opposite, right.
Speaker 1: If we were to get wage inflation, then this growth
Speaker 1: story can continue. We would have a different narrative. Then
Speaker 1: we would have we we have to talk about too
Speaker 1: much inflation and too much growth potentially, and that would
Speaker 1: be a problem for the FED. But I think what
Speaker 1: we're seeing right now is prices are going up because
Speaker 1: we have supplied issues and we have to stimulants fuel
Speaker 1: demand surge. At the same time, but wages are not
Speaker 1: keeping up to consumer purchasing powers going down. Real incomes
Speaker 1: are declining, and that would slow growth in the second half,
Speaker 1: and that I think feeds very well into that position
Speaker 1: to FED is in they don't care about the inflation.
Speaker 1: They want interest rate to stay low. And if the
Speaker 1: economy actually slows a little bit in the second half,
Speaker 1: that plays perfectly into their narrative. And they're going to
Speaker 1: be sitting there doing nothing, nothing for the rest of
Speaker 1: the year. So Muhammad Arian writes a piece for US today.
Speaker 1: He basically says what the FED should be doing is
Speaker 1: start now reducing exposure to a more risky posture by
Speaker 1: moving forward with a partial pivot I'm quoting directly from
Speaker 1: his op ed in light of the change circumstances, thereby
Speaker 1: keeping their options open and better balancing risk um and
Speaker 1: and but that's not what they're going to do, and
Speaker 1: he says that really they risk both an economic recession
Speaker 1: and financial market instability, especially the latter. Marcus, the concern
Speaker 1: that financial market instability is one of the big risks
Speaker 1: is something we're hearing echoed across global Wall Street, because
Speaker 1: you know, with rates this low, everybody gets such cheap money.
Speaker 1: You know, junk bonds are trading at their tightest spreads
Speaker 1: in all time, and um, it just seems like, you know, uh,
Speaker 1: ratings agencies are coming out upgrading everybody because they don't
Speaker 1: have to pay very much the service this debt. But
Speaker 1: meanwhile leverage is growing and growing and growing. Isn't it
Speaker 1: a worry? I think it should be a worry on
Speaker 1: the Fat's radio screen. That's true, But I think, well,
Speaker 1: hammaga Aaron still looking at the old world. Right, Remember
Speaker 1: a couple of years ago when when Jannet Yellen was
Speaker 1: raising raids, the argument was, well, we need to raise
Speaker 1: rights so we can custom again, right, we need to
Speaker 1: refill the arsenal so we can do something in the
Speaker 1: next crisis. The Power Fat doesn't think that way at all.
Speaker 1: They think, right now, we're fine. We're only going to
Speaker 1: do something if there really is a problem on the rise,
Speaker 1: and then we will change. So where we are today
Speaker 1: is normal, is neutral. This is where we're gonna stay
Speaker 1: until something changes. There's no idea that, oh, if things
Speaker 1: are not so bad anymore, we need to go back
Speaker 1: to something as neutral. That's not the way power the
Speaker 1: power FET looks at it. So I think we will
Speaker 1: get nothing from the feed for the foreseeable future marks
Speaker 1: just real quick thirty seconds here, Um do you is?
Speaker 1: I mean, how do you view GDP for the remainder
Speaker 1: this year and next year? What's your forecast? Well? I
Speaker 1: actually think we're we're gonna That's why I was seeing earlier.
Speaker 1: I think there's a bit of a downside risk emerging
Speaker 1: here for g d p UM. But you know, the
Speaker 1: numbers are so high, so much above what what's normal.
Speaker 1: What we all think is sort of the underlying potential
Speaker 1: growth with whether it's gonna be five percent or six
Speaker 1: percent or seven that's of the range of all the forecasts.
Speaker 1: Our number is five point nine, but I don't have
Speaker 1: a lot of confidence in that number. Next year's number
Speaker 1: will also be significantly about potential. I think that's all
Speaker 1: that matters, all right, Marcus, thanks very much for joining us.
Speaker 1: Marcus Schomer, their chief economist at pine Bridge Investments, talking
Speaker 1: to us about the FED. We're all going to be
Speaker 1: watching the special coverage starting today at one thirty pm
Speaker 1: Wall Street Time with Tom Keene and Lisa Obramo. It's
Speaker 1: this is Bloomberg. I want to bring in Daniel d
Speaker 1: Martino Booth. We've been waiting to hear from her all days.
Speaker 1: Cee On, director of intelligence at Quill Intelligence, a former
Speaker 1: advisor of the Dallas Fed, also a Bloomberg Opinion contributor,
Speaker 1: and she's got a lot to say about what we
Speaker 1: should expect today. Danielle Um. There has been a brewing
Speaker 1: I guess, uh brewing opinion um anti to the Fed,
Speaker 1: to the Fed's outcome based framework, coming from Peter Hooper
Speaker 1: at Deutsche Bank, Andy hal Dane at the Bank of England,
Speaker 1: now from Muhammad al Arian as well, that he's been
Speaker 1: writing about this for a while, saying that they're they're
Speaker 1: really taking a huge risk and really getting into danger
Speaker 1: by sticking to um this policy of of watching and
Speaker 1: waiting for inflation transitory. So they say to to to
Speaker 1: go back away. What do you think, well, Um, I
Speaker 1: think you have to look at the fact that the
Speaker 1: Fed is taking comfort from certain silos, if you will,
Speaker 1: of inflation. If you look at the c RBND, for example,
Speaker 1: it's down on the week, and we've we've seen the
Speaker 1: number of commodities that are rising come down appreciably, So
Speaker 1: the Fed's going to take comfort in that pocket. On
Speaker 1: the other hand, we're seeing the kind of inflayation that
Speaker 1: becomes sticky, becomes very problematic. Zillo reported that rents are
Speaker 1: up two plus percent uh in in May over April
Speaker 1: in the in the largest cities largest the top eight
Speaker 1: cities of the in the United States that were fift
Speaker 1: So if this starts to percolate through, it's the largest
Speaker 1: input to inflation, that Fed's gonna have a serious problem
Speaker 1: on its hand, especially because it's playing chicken with the
Speaker 1: millions of people who are slowly flowing back into the
Speaker 1: labor pool. That that process won't end, if you will,
Speaker 1: until after schools is fully reopened and the supplemental unemployment
Speaker 1: benefits have fully expired nationwide. So Danielle, before I ask
Speaker 1: this next question, I have to prefaces by saying you
Speaker 1: are the author of a book entitled fed Up and
Speaker 1: Insiders take on why the Federal Reserve is bad for America.
Speaker 1: So my question is has to FED. I mean, are
Speaker 1: they basically done? Should they just step away here and say, Okay,
Speaker 1: we did our job here. Now we're gonna let this
Speaker 1: economy kind of go on its own. I think that
Speaker 1: if the FED was to do a full rip off
Speaker 1: the band Aid approach that the harm that would be
Speaker 1: created given stocks remain of the nine percentile historically would
Speaker 1: be would would would do more damage than they're acknowledging
Speaker 1: that inflation has become problematic. They have a very elegant solution, however,
Speaker 1: and that is that they can pull back from their
Speaker 1: mortgage backed security. Uh, I'm very damning optically the housing market.
Speaker 1: Nobody doubts that housing has run off the rails, and
Speaker 1: they could say, you know what, we and and in fact,
Speaker 1: yesterday the New York Fed released a statement saying that
Speaker 1: they were gonna be test driving. They're gonna be testing
Speaker 1: out selling, outright selling mortgage backed securities starting next week. Um,
Speaker 1: will that do anything to help the housing market? Well,
Speaker 1: if the housing market has overheated, right, too much stimulus
Speaker 1: or too little stimulus can break housing. And that's what
Speaker 1: we've learned in the current episode, that too much stimulus
Speaker 1: can actually break housing. So it's the objective is to
Speaker 1: take some of the heat out of the market. You
Speaker 1: would certainly do that by reducing the mortgage back securities
Speaker 1: market and getting the FED out of the mortgage market. Danielle,
Speaker 1: how do you view the labor market here? You know,
Speaker 1: we're the jobs that have been edit have been over
Speaker 1: the last couple of months have been less than expected,
Speaker 1: and uh, you know, I presumably that gives the FED
Speaker 1: some more leeway to kind of stay on the sidelines here.
Speaker 1: The risk of wage inflation, presumably is is is not
Speaker 1: necessarily front and center. How do you view the labor market?
Speaker 1: So again, I think that it is a wait and see.
Speaker 1: We are seeing, uh, the unemployment rate in these states
Speaker 1: that are pulling out for four states last Saturday, eight
Speaker 1: states is coming Saturday total between now and in July nineteen.
Speaker 1: We are seeing activity and movement move up in these
Speaker 1: states in the as these labor pools are replenished. We're
Speaker 1: also seeing teenagers poor into the labor market at the
Speaker 1: fastest pace. Since I think you have an eight I mean,
Speaker 1: it's a magnificent number, and that's great for teams. You're
Speaker 1: gonna make a ton of money this summer making My
Speaker 1: seventeen year old was offered eighteen dollars an hour just
Speaker 1: yesterday hopefully doing nothing. Um So, because it's it's the
Speaker 1: low skilled work that needs to be fulfilled, and people
Speaker 1: aren't factoring in the fact that it's not just people
Speaker 1: going from state an average of six d and thirty
Speaker 1: to three d and thirty a week in unemployment benefits
Speaker 1: if they're on extended state. The gig workers, the contractors.
Speaker 1: If these states are pulled in the plug earlier they
Speaker 1: they run, their safety net goes away completely. And you
Speaker 1: have rental eviction moratoriums that are expiring also at the
Speaker 1: end of June. So you know, I think the FEDS
Speaker 1: wait and see on wage inflation is appropriate for a
Speaker 1: little while longer until we know what the labor pool really,
Speaker 1: what the population of the labor pool truly is here
Speaker 1: in the coming twelve weeks. I think you're underestimating the
Speaker 1: skills of your seventeen year old. I just want to
Speaker 1: quickly ask you if you can fly a plane, Oh,
Speaker 1: that's all right, airlines need pilots. Uh, then he should
Speaker 1: be getting paid more. I just want to quickly ask you,
Speaker 1: we only got about thirty seconds here, but I've been
Speaker 1: watching the reverse repo facility with wide eyes. Is it
Speaker 1: really that big of a deal or on what's happening there?
Speaker 1: So you know it would be that big of a
Speaker 1: deal had we not had yesterday dot dot dot and
Speaker 1: one data point does not make for a trend. But
Speaker 1: the fact that we came down from five four to
Speaker 1: five oh nine as the Treasury is checking account, that
Speaker 1: tells us the FED, if you will, is depleted as
Speaker 1: we as we head into the end of July when
Speaker 1: they want to get that balance down to five billion dollars.
Speaker 1: I think that as long as we see these numbers
Speaker 1: continue to come down, they might pop back up by
Speaker 1: the way going into quarter, and they always do window
Speaker 1: dressing purposes. But as long as we see that it's
Speaker 1: been coming back down, then the Fed can claim it's
Speaker 1: purely mechanical in nature. If it keeps going up, that
Speaker 1: starts to flash credit risk. All right, daniel thank you
Speaker 1: so much for joining us to really appreciate getting your
Speaker 1: thoughts on this FED day. Danielle di Martino bou the
Speaker 1: CEO and director of Intelligence at Quill Intelligence and a
Speaker 1: former advisor at the Federal Reserve of Dallas and a
Speaker 1: Bloomberg opinion contributor. Well more coming up this is Bloomberg.
Speaker 1: Well the metrics as it relates to vaccines, they remained positive.
Speaker 1: Here in the US. The reopening is continues to accelerate.
Speaker 1: We saw the state of California fully reopened new York
Speaker 1: yesterday fully reopened, joining a number of other states. So
Speaker 1: the question is how do you play that in the
Speaker 1: stock market. Scott Rent, Senior global market strategist for the
Speaker 1: Wells Fargo Investment Institute Joints is Scott, thanks so much
Speaker 1: for joining us here. You know, love to get your
Speaker 1: thoughts on kind of your positioning in the equity markets. Here.
Speaker 1: We've you know, had this rotation trade into uh let's
Speaker 1: call it, some cyclical names, some smaller cap names, some
Speaker 1: names that might benefit from, you know, a reopening economy.
Speaker 1: They performed so well and perhaps even out warmed, you know,
Speaker 1: some of the tried and true growth stocks, the Amazon's
Speaker 1: Apples of the world, that have been such good performers
Speaker 1: really since the financial crisis of twelve years ago. How
Speaker 1: do you kind of think about, you know, your portfolio
Speaker 1: construction talking to your clients, Well, Paul, I think you
Speaker 1: have to you have to say to yourself, is this
Speaker 1: recovery in the early stages, which we think it is.
Speaker 1: Do we think it's going to be a global recovery?
Speaker 1: We do, um, So we've been leaning toward these more
Speaker 1: cyclical areas, these more cyclical sectors like you know, financials, industrials, materials.
Speaker 1: As a matter of fact, just about a month ago
Speaker 1: or so, we downgraded UH tech, we downgraded consumer discretionary,
Speaker 1: and we had been overweight those two sectors for a
Speaker 1: long long time. So we want, you know, growth is
Speaker 1: going to have to participate here if the market is
Speaker 1: going to do what we think it's going to do
Speaker 1: over the next six months or eighteen months. So we
Speaker 1: have a full allocation to tech, which is about of
Speaker 1: the market cavity s P. Five hundred, But we have
Speaker 1: been been basically leaning towards those sectors energies included in
Speaker 1: that communication services, UM materials that we think are going
Speaker 1: to to participate. So that's what we've been talking to
Speaker 1: our clients about. Is that in the US, Scott or
Speaker 1: is that are you talking about globally because we've run
Speaker 1: up there, Yeah, right, you know when we have and
Speaker 1: we've we've stuck with them, and I think we're going
Speaker 1: to and we're gonna have some back and forth here,
Speaker 1: especially whether it's around a FED meeting or are we
Speaker 1: going to have a lot of inflation or not, which
Speaker 1: is is obviously a quick key question. But you know,
Speaker 1: we like emerging markets as well as an asset class.
Speaker 1: And if you look at China, South Korea, Taiwan, you
Speaker 1: know they're going to make up whatever e M index
Speaker 1: you're looking at. They're making up the bulk of the
Speaker 1: market cap. And you know, if those if those countries
Speaker 1: are doing well, which we think they are, dollars a
Speaker 1: little lower, commodity prices are up, we think emerging markets
Speaker 1: is a good place to be. Scott, what do you
Speaker 1: expect to hear from FED Chairman Pal today? Well, I
Speaker 1: think it's going to be largely status quo. And what
Speaker 1: what I believe that means is that acknowledging that you know,
Speaker 1: growth has really come back quickly, that we're seeing some
Speaker 1: higher inflation, that the FED believes it's transitory, and we
Speaker 1: certainly believe that inflation is going to decelerate in um.
Speaker 1: I think it's key. You know, the market is going
Speaker 1: to be hanging on is the FED talking about potential tapering?
Speaker 1: And I believe it was a Bloomberg interview I saw
Speaker 1: with the Loretta Mester and she said, you know, we've
Speaker 1: been talking about the exit strategy since we had the
Speaker 1: plan together, So you know, I think it's naive to
Speaker 1: think that the FED is not talking about what you know,
Speaker 1: what the end plan is to to remove some of
Speaker 1: this accommodation. But you know, for us, we think it's
Speaker 1: likely not today. We think it could be at Jackson Hole,
Speaker 1: or it could be in September something like that. But
Speaker 1: I think for now, you know, the FED was all
Speaker 1: in on these easy policies, you know, just really the
Speaker 1: last meeting. So I don't think they're gonna, you know,
Speaker 1: make a big turn here in just one one meeting,
Speaker 1: and it's likely to start to be an easy turn
Speaker 1: probably a couple of meetings from now. So what do
Speaker 1: you think about rates? Does it make sense to you
Speaker 1: to see the tenure at one nine? Um? Since you know,
Speaker 1: if the FED steps out of line at all, it
Speaker 1: has to be to the hawkish side. It's not like
Speaker 1: they can get any more devish. And if they do that, um,
Speaker 1: don't you see a sell off in treasuries? Well, I'll
Speaker 1: tell you, Matt. You know, as an old foreign exchange
Speaker 1: guy and as an equity strategy guy, it's it's you know,
Speaker 1: when I think about the growth we expect seven this
Speaker 1: year in the US, five next year, is it hard
Speaker 1: for me to rationalize a sub one tenure? It absolutely
Speaker 1: is now we know there's a lot of demand out
Speaker 1: there for yield um negative and that's part of it. Yeah, yeah,
Speaker 1: well yeah, and and the negative real yield actually obviously
Speaker 1: as you said, but it is a bit of a mystery.
Speaker 1: We think it's going to back up a bit, maybe
Speaker 1: two and a quarter by the end of this year,
Speaker 1: two and a half by the end of twenty two,
Speaker 1: so we you know, we certainly do expect rates to
Speaker 1: better reflect the type of economic environment that we think
Speaker 1: we're in and headed toward. Totally good to get some
Speaker 1: time with you, Scott. Always love getting insight from you.
Speaker 1: Scott Ran, Senior Global market strategist at Wells Fargo Investment Institute.
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
Speaker 1: subscribe and listen to interviews with Apple Podcasts or whatever
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 1: at Matt Miller three, pt on Fall Sweeney I'm on
Speaker 1: Twitter at pt Sweeney. Before the podcast, you can always
Speaker 1: catch us worldwide at Bloomberg Radio.