WEBVTT - Single Best Idea with Tom Keene: Wei Li & Richard Clarida

0:00:02.400 --> 0:00:14.520
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, the single best idea.

0:00:14.600 --> 0:00:17.119
<v Speaker 1>It has been an extraordinary day. I want to start

0:00:17.800 --> 0:00:20.120
<v Speaker 1>with something I have never seen. I've been doing this

0:00:20.160 --> 0:00:22.880
<v Speaker 1>for four or five six years, and I've never ever

0:00:22.960 --> 0:00:26.000
<v Speaker 1>seen what we saw today. And as we tape this

0:00:26.120 --> 0:00:29.200
<v Speaker 1>single best idea at our world headquarters, I want to

0:00:29.280 --> 0:00:34.440
<v Speaker 1>make clear that there is speculation and rumor and uncertainty,

0:00:34.760 --> 0:00:36.720
<v Speaker 1>but I do think I can paint for those of

0:00:36.760 --> 0:00:40.000
<v Speaker 1>you across the nation and quite frankly, at worldwide, as

0:00:40.040 --> 0:00:43.440
<v Speaker 1>we see Russia in a prisoner swap reported by our

0:00:43.520 --> 0:00:49.199
<v Speaker 1>Jennifer Jacobs with allies including the United States. I've seen numbers,

0:00:49.240 --> 0:00:51.519
<v Speaker 1>thank you Moscow Times at twenty to thirty people to

0:00:51.600 --> 0:00:55.000
<v Speaker 1>telegraph as that statistic. I believe Jennifer Jacob has it

0:00:55.040 --> 0:01:00.640
<v Speaker 1>as well. The partition that occurred this morning between TV

0:01:01.640 --> 0:01:07.039
<v Speaker 1>and Frankly us to an extent reporting the rumors, the speculation,

0:01:07.480 --> 0:01:10.840
<v Speaker 1>the minimal facts that Jennifer Jacobs had in front of her,

0:01:11.760 --> 0:01:17.000
<v Speaker 1>and the newspapers in America which had a thundering silence.

0:01:17.560 --> 0:01:21.560
<v Speaker 1>And this was this nuance here of released or to

0:01:21.720 --> 0:01:26.319
<v Speaker 1>be released. And it really goes down to the nuance

0:01:27.000 --> 0:01:31.200
<v Speaker 1>the fears in the tension that you see within a

0:01:31.200 --> 0:01:34.160
<v Speaker 1>prisoner swap. I've never seen it like I saw it

0:01:34.200 --> 0:01:38.959
<v Speaker 1>on this Thursday in Russia and across Europe and America

0:01:39.560 --> 0:01:42.680
<v Speaker 1>as well. We had wonderful guests. I can't say enough

0:01:42.720 --> 0:01:46.600
<v Speaker 1>about it. What a generous conversation with Waylee on China

0:01:47.319 --> 0:01:50.400
<v Speaker 1>her stunning statistic that she looks for a three percent

0:01:50.480 --> 0:01:53.800
<v Speaker 1>handle she and Blackrock, I should say, look for a

0:01:53.840 --> 0:01:57.600
<v Speaker 1>three percent handle of economic growth at some point. That's

0:01:57.640 --> 0:02:01.560
<v Speaker 1>game changing for the Pacific rims say the least, but

0:02:01.680 --> 0:02:07.400
<v Speaker 1>also with price up and yield down between long maturity

0:02:07.600 --> 0:02:11.480
<v Speaker 1>and short maturity. Wayly of black Rock, well, if.

0:02:11.320 --> 0:02:16.560
<v Speaker 2>You look at the hedge fund positioning, absolutely a lot

0:02:16.600 --> 0:02:21.800
<v Speaker 2>of the speculative positions went from short bombs to long bonds.

0:02:21.800 --> 0:02:24.560
<v Speaker 2>But I would observe that from the end of the

0:02:24.600 --> 0:02:28.160
<v Speaker 2>curve has done better than the back end of the curve,

0:02:28.280 --> 0:02:31.880
<v Speaker 2>so mainly in response to kind of markets pricing in

0:02:32.320 --> 0:02:35.400
<v Speaker 2>more cuts. But our concern for the back end of

0:02:35.440 --> 0:02:40.240
<v Speaker 2>the curve, especially over a longer temp horizon, still stays,

0:02:40.280 --> 0:02:44.359
<v Speaker 2>which is a higher fiscal trajectory, higher term premier which

0:02:44.480 --> 0:02:46.720
<v Speaker 2>currently is still in the negative territory.

0:02:46.880 --> 0:02:49.120
<v Speaker 1>And literally as I take this wayly of black rock

0:02:49.200 --> 0:02:51.600
<v Speaker 1>there with a four point zero two four point zero

0:02:51.639 --> 0:02:54.959
<v Speaker 1>three ten year yield. Literally we take this, folks. For

0:02:55.000 --> 0:02:56.880
<v Speaker 1>those of you that know in New York City, they

0:02:56.880 --> 0:03:00.840
<v Speaker 1>have a special bunker below home Depot where we tape

0:03:01.560 --> 0:03:04.560
<v Speaker 1>all of my work. Also the surveillance caskets down there

0:03:04.720 --> 0:03:08.080
<v Speaker 1>as well. Someday we'll be needing that. But the answer is,

0:03:08.360 --> 0:03:12.040
<v Speaker 1>moments ago we saw three point nine nine percent on

0:03:12.120 --> 0:03:16.400
<v Speaker 1>the ten year yield. That is remarkable. A single best

0:03:16.440 --> 0:03:18.760
<v Speaker 1>idea of shout out to Bob Michael of JP Morgan

0:03:19.080 --> 0:03:22.000
<v Speaker 1>and his team that have had that tendency. Others as well,

0:03:22.080 --> 0:03:25.640
<v Speaker 1>David Rosenberg up in Toronto, but a special shout out

0:03:25.960 --> 0:03:29.120
<v Speaker 1>to Ian Lincoln of BEMO Capital Markets who's just been

0:03:29.760 --> 0:03:34.920
<v Speaker 1>absolutely brilliant on the movement of yield lower the ten

0:03:34.960 --> 0:03:38.160
<v Speaker 1>year yield moments ago. Here Thursday, let me get the

0:03:38.160 --> 0:03:43.040
<v Speaker 1>surveillance watch out you see, it's got Charlie Brown on it.

0:03:43.240 --> 0:03:46.720
<v Speaker 1>Ten oh two am is where we see the three

0:03:46.800 --> 0:03:48.720
<v Speaker 1>point nine nine percent yield. What's it going to do

0:03:48.760 --> 0:03:52.200
<v Speaker 1>to your mortgage rate? The mortgage rate is something that

0:03:52.240 --> 0:03:55.839
<v Speaker 1>FED looks at a lot of criticism. Cam Harvey at

0:03:56.400 --> 0:04:00.520
<v Speaker 1>Duke University was really something that they heated and hisism

0:04:00.560 --> 0:04:03.320
<v Speaker 1>of the FED. We've had generous time with a former

0:04:03.400 --> 0:04:06.640
<v Speaker 1>vice chairman of the Federal Reserve System at Richard CLARIEDA. He,

0:04:06.720 --> 0:04:12.160
<v Speaker 1>of course, of Columbia University and excuse me advising at PIMCO,

0:04:13.040 --> 0:04:15.000
<v Speaker 1>and well, there's a lot to talk about. And what

0:04:15.040 --> 0:04:17.200
<v Speaker 1>we talked about in the fedicides and what we talked

0:04:17.200 --> 0:04:22.000
<v Speaker 1>about this morning was the difference everybody's happy in an

0:04:22.000 --> 0:04:25.320
<v Speaker 1>agreement at the American Federal Reserve System, where at the

0:04:25.360 --> 0:04:29.159
<v Speaker 1>Bank of England they argue five to four decision today,

0:04:29.720 --> 0:04:33.920
<v Speaker 1>Richard CLARIEDA, on the descent of the Bank of England.

0:04:33.600 --> 0:04:35.600
<v Speaker 3>Well, I will say that the Bank of England is

0:04:35.640 --> 0:04:39.000
<v Speaker 3>certainly beginning with my good friend and mentor Mervin King

0:04:39.240 --> 0:04:42.400
<v Speaker 3>thirty plus years ago. It was a point of pride

0:04:42.400 --> 0:04:45.560
<v Speaker 3>that their culture did not discourage dissense. And indeed, I

0:04:45.560 --> 0:04:47.320
<v Speaker 3>think there was one or two meetings when Mervin was

0:04:47.360 --> 0:04:50.240
<v Speaker 3>out voted. In this case it was five to four.

0:04:50.279 --> 0:04:54.599
<v Speaker 3>But when the chief economist votes it definitely it gets

0:04:54.640 --> 0:04:58.480
<v Speaker 3>the headline. Sure, there are descents at the FED during

0:04:58.520 --> 0:05:01.640
<v Speaker 3>my time, we had several meeting where there were three descents,

0:05:02.120 --> 0:05:04.360
<v Speaker 3>but it is the case that in the post green

0:05:04.440 --> 0:05:08.120
<v Speaker 3>spanning and era that you refer to or green span

0:05:08.200 --> 0:05:11.360
<v Speaker 3>and then post green span descents among governors have been

0:05:11.400 --> 0:05:15.760
<v Speaker 3>pretty rare on monetary policy. And that's an entire another

0:05:15.960 --> 0:05:18.040
<v Speaker 3>show we could. I won't spend time talking about why

0:05:18.120 --> 0:05:18.440
<v Speaker 3>that is.

0:05:18.480 --> 0:05:22.400
<v Speaker 1>You may come back tomorrow, Okay, well, okay, Richard Clarita,

0:05:22.440 --> 0:05:24.120
<v Speaker 1>maybe we'll get him for day three and do a

0:05:24.160 --> 0:05:28.520
<v Speaker 1>hat trick of great economic perspective. Can't say enough about

0:05:28.560 --> 0:05:33.360
<v Speaker 1>some of the distinguishing features of former Federal Reserve officials.

0:05:33.920 --> 0:05:36.760
<v Speaker 1>Major shout out to Bill Dudley, who graced us with

0:05:36.800 --> 0:05:39.240
<v Speaker 1>his presence for the FED Decides. Bill Dudley with that

0:05:39.480 --> 0:05:44.279
<v Speaker 1>essay ten days ago and Bloomberg Opinion heated the FED

0:05:44.640 --> 0:05:48.640
<v Speaker 1>should act. Now we hope you act. By subscribing to

0:05:49.120 --> 0:05:52.960
<v Speaker 1>YouTube Bloomberg Podcasts is the best way to get all

0:05:53.000 --> 0:05:56.159
<v Speaker 1>of our good conversation on Apple car Play and on

0:05:56.279 --> 0:05:59.880
<v Speaker 1>Android Auto as well, and on Ample podcasts. It's single

0:06:00.080 --> 0:06:02.320
<v Speaker 1>last idea