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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day

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Speaker 2: Terminal and the Bloomberg Business app. Let's get back to

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Speaker 2: our top story. President Trump said to speak with leaders

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Speaker 2: of Canada and Mexico today ahead of tariffs going into

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Speaker 2: effect tomorrow, as he ramps up threats against another key ally,

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Speaker 2: the European Union. Jason Furman at the Harvard Kennedy School writing,

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Speaker 2: it's hard to decide if tariff's the worst economic policy

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Speaker 2: or foreign policy. We'll see if Trump caves to the market.

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Speaker 2: Jason joins us now for more. Jason, Welcome to the

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Speaker 2: program sir, thanks for making time for us. Let's just

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Speaker 2: start here. How different these actions are compared to what

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Speaker 2: we saw in Trump's first term?

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Speaker 3: Oh yeah, look, I thought there were too many tariffs,

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Speaker 3: and Frump's first term, I thought they were too poorly designed.

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Speaker 3: But this is just at a massive scale relative to those,

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Speaker 3: and these are against close allies, and this is less

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Speaker 3: than you know. This is basically two weeks in to

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Speaker 3: the administration, and he's promised us he's just getting started.

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Speaker 1: Jason, it seems like on Wall Street people believe that

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Speaker 1: the US economy is strong enough to withstand the hit,

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Speaker 1: the growth hit from these tariffs.

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Speaker 4: Do agree.

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Speaker 3: First of all, it doesn't look to me like Wall

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Speaker 3: Street has priced in these tariffs going into effect on

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Speaker 3: a sustained basis.

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Speaker 5: And by the way, I hope Wall Street's right about that.

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Speaker 3: Some things are crazy enough that you touch the hot

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Speaker 3: stove and you pull your hand away, and I think

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Speaker 3: that's what Wall Street things would happen. So you can't

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Speaker 3: look at the market right now to infer what would

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Speaker 3: happen if over the next year, we keep these tariffs on,

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Speaker 3: escalate them in response to their responses, add tariffs to

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Speaker 3: the European Union at a universal tariff. All of that,

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Speaker 3: I have no doubt, would would be quite a big hit.

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Speaker 4: To growth, Jason.

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Speaker 6: As you know, though, of course, USMCA is up for

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Speaker 6: renegotiation next year. How much are these tariffs a part

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Speaker 6: of that Caroenen stick approach for that renegotiation with Canada

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Speaker 6: and Mexico.

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Speaker 3: You know, USMCA was President Trump's trade agreement, and look,

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Speaker 3: it's sort of ironic. In twenty sixteen, he campaigned on

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Speaker 3: tearing up NAFTA and he ended up doing a renegotiation

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Speaker 3: of it that was pretty good, and that got everyone

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Speaker 3: on board. This time around, he actually did not campaign

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Speaker 3: against NAFTA or USMCA, did not really campaign against Mexico

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Speaker 3: and Canada, and he's straight out of the gate with

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Speaker 3: tariffs on them. I don't really see this as part

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Speaker 3: of a ploy to have a better USMCA and goes

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Speaker 3: I don't quite know what we're looking for in the

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Speaker 3: USMCA negotiating well.

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Speaker 6: He did campaign though, on making sure that he put

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Speaker 6: a halt to illegal immigration and stopping the fetanyl flow.

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Speaker 6: If you look at our own drug enforcement data, twenty

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Speaker 6: one thousand pounds with seas at the southern border of fetanyl,

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Speaker 6: forty three pounds of fetanyl from Canada. Two milligrams of

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Speaker 6: fetanyl is lethal. There's more than four hundred and fifty

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Speaker 6: milligrams in a pound. If that is the direction that

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Speaker 6: Trump is taking and it comes to national security, do

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Speaker 6: you see this administration using tariffs? Say prior administrations might

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Speaker 6: use things like sanctions.

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Speaker 3: He First of all, you just said the number for

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Speaker 3: Canada was tiny compared to the number for Mexico. And

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Speaker 3: by the way, fentanyl goes from the US porter to

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Speaker 3: the Canadian border as well, do you think they should

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Speaker 3: be putting tariffs on us to stop that flow of fentanyl? Absolutely,

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Speaker 3: we need to put pressure on Mexico. But it's not

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Speaker 3: like they have a switch that they could choose whether

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Speaker 3: or not to push.

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Speaker 5: This has been a big issue for them.

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Speaker 3: It's undermined a lot of their country the drug trade

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Speaker 3: as well. And by the way, destabilizing the Mexican economy

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Speaker 3: is going to increase.

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Speaker 5: The amount of immigration to the United States, not reduce it.

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Speaker 1: Jason, there's a larger theory here that the US needs

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Speaker 1: to produce more of its goods at home, both for

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Speaker 1: national security reasons and also to give jobs to people

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Speaker 1: in areas that got beaten up during a lot of

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Speaker 1: the globalization shifts that we saw in the economy. What

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Speaker 1: do you think it would take to bring production back.

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Speaker 1: Do you think that's a feasible goal and how long

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Speaker 1: would it take?

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Speaker 4: Yeah?

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Speaker 3: I think what would take to bring production back is

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Speaker 3: to have an integrated market in North America where inputs

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Speaker 3: for American manufacturers can come in tax free, where auto

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Speaker 3: parts can go back and forth across the border multiple times.

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Speaker 3: That's the way you have an American auto industry. You

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Speaker 3: don't make every single piece that goes into the car.

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Speaker 3: You have, you know a lot of the you added

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Speaker 3: a lot of the key stages of the process, but

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Speaker 3: spread production out around the world. That's what makes the

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Speaker 3: American economy so incredibly successful. Look at US productivity growth

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Speaker 3: compared to any other events economy, It's been much higher.

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Speaker 5: Globalization has been a key part of that.

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Speaker 3: This is going to destroy American manufacturing if it continues

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Speaker 3: and escalates.

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Speaker 2: Jason, can you make the argument that globalization destroyed American manufacturing.

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Speaker 3: Productivity growth has been the biggest factor in reducing American manufacturing.

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Speaker 3: Manufacturing jobs have fallen in China, they've fallen in Germany,

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Speaker 3: they fall in the United States because you can make things.

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Speaker 5: With fewer people.

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Speaker 3: And by the way, even if you want more manufacturing jobs,

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Speaker 3: you don't raise input prices for manufacturing. You don't strengthen

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Speaker 3: the dollar to hurt exporters. You don't weaken the economies

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Speaker 3: of our trading partners. You don't encourage them to put

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Speaker 3: terrorfs on manufact Every single aspect of this is bad

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Speaker 3: for American manufacturing.

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Speaker 2: Jason, just to find a word at the one minute

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Speaker 2: we have left with you, just on prices. By definition,

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Speaker 2: the importer pays the tariff. So let's just put that

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Speaker 2: all to one side. What's your base case on how

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Speaker 2: the cost will be distributed? How do you see this

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Speaker 2: playing gap? Will it all get passed through to the consumer?

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Speaker 2: Will it be eaten elsewhere?

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Speaker 3: He'll be a little bit of it eaten by the

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Speaker 3: Canadians and Mexicans in terms of the appreciation of the dollar,

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Speaker 3: some of it eaten by margins. So I see something

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Speaker 3: like an extra half point on inflation, and if you

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Speaker 3: go from you know, two point five to three percent inflation,

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Speaker 3: and that's a big difference for the.

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Speaker 2: Fat, big change. Jason, appreciate your input and your insight.

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Speaker 2: Thank you, sir, Jason Furman there at the Harvard Kennedy School.

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Speaker 2: I'm ready sent of energy aspects joined us now to

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Speaker 2: extend the conversation and RITA, what does a tempt per

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Speaker 2: tariff on four million pounds of crew today? Due to

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Speaker 2: this energy market?

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Speaker 7: I think you look, the ten percent tariff in itself

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Speaker 7: doesn't break us refining, but for sure it adds to

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Speaker 7: the cost. US refining margins are not great to begin with.

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Speaker 7: We've calculated even if Canadian heavies takes seventy percent off

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Speaker 7: the tariff, you still lose about a dollar from Midwest margins.

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Speaker 7: And I think the critical thing it also is to

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Speaker 7: watch for is the Canadian dollar that's weakened a lot,

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Speaker 7: so that also helps absorb some of the tariffs. But ultimately, yes,

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Speaker 7: you are going to get a hit on US Midwest margins,

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Speaker 7: also West coast margins. We're going to see more of

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Speaker 7: the Canadian flow on the TMX pipeline to Asia instead,

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Speaker 7: and US will have to pay up four alternatives, if

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Speaker 7: I may say, I think more than the Canadian one.

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Speaker 7: It's a twenty five percent on Mexico that's going to

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Speaker 7: be the much bigger problem given the Gulf Coast in

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Speaker 7: sports about four hundred thousand barots but of Mexican heavies

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Speaker 7: and another two hundred thousand of feet stop what we

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Speaker 7: would call fuel oil. That's going to be very hard

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Speaker 7: for them to replace. And it's a higher tariff as well,

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Speaker 7: given its twenty five percent.

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Speaker 1: I'm reading you mentioned something in there that I want

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Speaker 1: to pick up and exporting more to Asia. How easy

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Speaker 1: is it for Canada and Mexico to shift its export

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Speaker 1: lines to direct more of it to China in the

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Speaker 1: Southeast asiancy rather than the United States.

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Speaker 7: Well, because Canada now has the TMX pipeline. In the past,

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Speaker 7: they wouldn't have been able to do so would have

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Speaker 7: been a lot harder, but now with TMX, it actually

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Speaker 7: gives them a lot more optionality. And if I may

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Speaker 7: say so, I think these tariffs have essentially handed a

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Speaker 7: boon to Asian refiners. And it's obviously bullish for pad

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Speaker 7: One margins because pad One is losing product exports from Canada,

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Speaker 7: but it's also boosting European refining margins. It's a win

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Speaker 7: for a lot of the rest of the world, just

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Speaker 7: a massive loss for you s refining, which you know,

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Speaker 7: given that it's meant to be America first, I'm not

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Speaker 7: one hundred percent sure that was the intended consequence, but

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Speaker 7: that's absolutely how this is going to play out.

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Speaker 1: How long before the United States could produce the kind

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Speaker 1: of crude that would be good for refining. How long

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Speaker 1: before the US can compensate? And I've set that with

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Speaker 1: the energy that Donald Trump was talking about.

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Speaker 7: They can't. I mean, the reserves are light shale. It's

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Speaker 7: a geology problem. We can, you know, scream and shout

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Speaker 7: out as much as we want about the volume of

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Speaker 7: oil produced. But every refiner on the Gulf Coast and

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Speaker 7: a lot of them in the Midwest are complex refiners.

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Speaker 7: They need the heavier crude and that's why they were designed,

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Speaker 7: because they had availability of Canadian and Mexican heavies. Gulf

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Speaker 7: of Mexico producers some medium sour crudes, but it's not

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Speaker 7: the heavy material that these refiners need. So it's a

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Speaker 7: geology problem. It's nothing to do with you know, regulation

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Speaker 7: or anything else. US of course has all the oil

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Speaker 7: the refiners require, it's just the wrong type of oil.

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Speaker 6: So I'm rida, where can they import this type of crud?

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Speaker 6: Not going to be from Mexico or Canada.

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Speaker 7: So I think the Canadian imports will still continue because again,

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Speaker 7: like I said, the ten percent tariff, again, we'll get

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Speaker 7: it split between refiners and Canada, but I think those

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Speaker 7: will continue. I think the challenge is going to be

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Speaker 7: on the Gulf coast. We do see more Middle Eastern

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Speaker 7: barrels arriving potentially from Iraq. Even some Saudi Arabia and

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Speaker 7: other Latin American countries can swing, but it's going to

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Speaker 7: be a tough ask. And by the way, we don't

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Speaker 7: even know if Mexico is going to retaliate. If it

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Speaker 7: does on oil products, which is not our base case,

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Speaker 7: but US Golf Coast refiners send eight hundred and fifty

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Speaker 7: thousand barrels play of products to Mexico. They will not

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Speaker 7: find a home and they will have to cut runs.

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Speaker 7: That's the one to watch out for Amrita with an

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Speaker 7: uptick in prices right now.

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Speaker 4: We also have OPEC plus.

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Speaker 6: Members meeting today. Is this a moment for them to

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Speaker 6: want to add barrels to the market.

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Speaker 7: Today's a GMMC meeting rather than no OPEK ministerial meeting.

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Speaker 7: The GMMC simply, you know, just take stock of where

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Speaker 7: fundamentals are. We've maintained our view that they will appselutely

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Speaker 7: have to see outright supply disruption, not just trade floor ships,

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Speaker 7: which is what's happening right now before they change course.

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Speaker 7: So we maintain the view that you know, the earliest

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Speaker 7: you're going to start seeing or back plus unwined is April.

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Speaker 2: I'm rich, I appreciate your time. As always, I'm ready

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Speaker 2: to send there of energy aspects. Steven Stanley as Santander,

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Speaker 2: saying tariffs are likely to be negative for growth, especially

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Speaker 2: if there is retaliation. Steve joined us now for more.

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Speaker 4: Steven, good to see it, good to be here.

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Speaker 2: Chair and Pound in the news conference said he'd wait

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Speaker 2: to see policy articulated. And we've said this morning a

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Speaker 2: few times that it has been what does he do now?

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Speaker 4: I think you have to wait. I mean, I think

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Speaker 4: this is a day to day thing.

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Speaker 8: President Trump is speaking with the leaders of Canada, Mexico.

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Speaker 8: There's a I mean, there's at least a non trivial

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Speaker 8: chance that we'd never see these, these twenty five percent

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Speaker 8: tariffs on.

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Speaker 1: The margins, though given that a lot of companies aren't

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Speaker 1: sure what to do with us Jim Bullard for our

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Speaker 1: Saint Louis fed President was earlier on in saying he

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Speaker 1: sees this as more of a growth shock than an

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Speaker 1: inflationary shock. Based on everything that you've read and seen.

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Speaker 4: So far, would you agree totally agree with that? Totally agree.

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Speaker 8: So the inflation story's been the one that's gotten the

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Speaker 8: most run in terms of tariffs.

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Speaker 4: But the problem with that story is that tariffs are a.

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Speaker 8: One time change in the price level, right, It's not

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Speaker 8: a persistent change in the rate of change of prices,

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Speaker 8: which is inflation.

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Speaker 4: And so in theory, the FED is supposed to look

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Speaker 4: through that.

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Speaker 8: I realize easier said than done. But if you go

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Speaker 8: back to twenty eighteen, I know very different economic landscape,

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Speaker 8: but the main issue back then was growth, not inflation,

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Speaker 8: and it definitely had a significant impact on growth.

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Speaker 1: The argument that people make against this is that the

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Speaker 1: US economy is so strong and this is such a

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Speaker 1: minor hit that the US will power through it and

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Speaker 1: it will barely show up.

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Speaker 4: Why do you disagree, Well, we may very well get

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Speaker 4: through it.

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Speaker 8: I don't think this would necessarily be inflationary, given that

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Speaker 8: the economy does have a lot of momentum, but I

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Speaker 8: do think that the growth hit would be significant.

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Speaker 4: We would notice it for sure.

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Speaker 8: And I think again, if you go back to twenty

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Speaker 8: eighteen twenty nineteen, it seems to me that the biggest

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Speaker 8: takeaway from that experience, at least for me, was it

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Speaker 8: wasn't so much the tariffs themselves. It was the uncertainty

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Speaker 8: in the environment that it engendered. And I think a

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Speaker 8: lot of businesses were, you know, taking a step back

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Speaker 8: until they had a better idea of what was coming

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Speaker 8: at that time. And now I think businesses are already

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Speaker 8: in that mode. They're waiting for tax changes regulatory.

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Speaker 4: In addition to tariffs.

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Speaker 8: And I mean, if I'm a business person, I'm not

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Speaker 8: making any you know, smart, I'm not making any big

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Speaker 8: decisions anytime soon.

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Speaker 6: The other side of that growth, though, is what if

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Speaker 6: there is a fifteen percent corporate tax, right if you

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Speaker 6: produce in the United States? Right, isn't it the cart

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Speaker 6: and stick approached?

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Speaker 8: Well, this is yeah, this is what the president is

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Speaker 8: aiming for. Is he wants to bring production and home.

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Speaker 8: I mean, I think that's realistic, perhaps for some industries

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Speaker 8: and not so much for others.

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Speaker 4: But yeah, I mean it is a mix.

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Speaker 8: I think that if you look at the administration's proposed

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Speaker 8: policy policies in a totality, the tax piece and the

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Speaker 8: regulatory piece are likely to be very positive for growth

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Speaker 8: and then on the other side, you've got tariffs and

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Speaker 8: maybe to some degree immigration, And you know, he's leading

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Speaker 8: with tariffs, which it seems to me maybe not the

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Speaker 8: right way to go because that's the one that has

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Speaker 8: the potential to be negative for growth.

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Speaker 4: But you know, we'll see how that plays out.

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Speaker 8: I mean, I think it's you know, I'm not a

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Speaker 8: political annalys but my sense is.

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Speaker 4: That for him, this is all in negotiation. The point

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Speaker 4: of this isn't to slap tariffs and slow the economy down.

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Speaker 8: It's to get what he wants from Canada, Mexico, China

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Speaker 8: and others.

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Speaker 6: And he's flirting now the European Union. Last night he

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Speaker 6: said we'll definitely happen with the European Union.

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Speaker 4: So in that sense, how do you model.

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Speaker 6: All of this if it's basically just going to be

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Speaker 6: paralysis businesses waiting on the sidelines because they could be

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Speaker 6: waiting for months or years.

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Speaker 8: Yeah, it's definitely moving target. I mean, you think about

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Speaker 8: are the arffs going to happen?

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Speaker 4: Are they not going to happen?

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Speaker 8: Then if they are, next question, are they going to

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Speaker 8: be exemptions? Are certain industries going to get which that

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Speaker 8: happened a lot there are a lot of exemptions in

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Speaker 8: Trump's first term on the tariffs that we're in posed.

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Speaker 8: How do our trading partners respond, are they retaliatory?

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Speaker 4: Do they want to deal? How does how does the

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Speaker 4: broader economy respond to?

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Speaker 8: Do producers and retailers pass everything through? Do they eat

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Speaker 8: some of the of the margin? You know, there's so

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Speaker 8: many questions that I think it's impossible to have a

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Speaker 8: precise estimate. I mean, I think, you know, we know

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Speaker 8: the direction, but I don't think that the magnitudes are

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Speaker 8: very difficult. You can, you know, you can kind of

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Speaker 8: throw numbers out there, but it's all very tentative at

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Speaker 8: this point.

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Speaker 2: Can we throw some numbers at that few? Let's got

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Speaker 2: back to twenty eighteen and talk about the experience from

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Speaker 2: twenty eighteen. We know a whole different range of things

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Speaker 2: can happen. Exporters can drop prices, we can eat it

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Speaker 2: on the margin. It doesn't all have to get passed

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Speaker 2: through to the consumer. You would be the first to

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Speaker 2: say that's very dependent on what goods and what sectors,

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Speaker 2: And I would agree with you. What do we learned

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Speaker 2: from eighteen about what corporations did then?

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Speaker 4: What happened?

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Speaker 2: Then?

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Speaker 8: Yeah, I think the difficulty is that the environment is

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Speaker 8: very different now than it was then. I think back then,

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Speaker 8: inflation expectations were incredibly low. Firms had very little pricing power,

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Speaker 8: and I think in many cases they were forced to

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Speaker 8: eat at least some of the cost increases. This time around,

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Speaker 8: firms have a lot of muscle memory raising prices when

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Speaker 8: their costs go.

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Speaker 2: Do they have pricing power right now?

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Speaker 4: We'll see, We'll see.

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Speaker 8: I think that consumers are probably, you know, the anecdotal

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Speaker 8: evidence is that consumers have started to fight back a

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Speaker 8: little bit. But at the same time, again, consumers also

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Speaker 8: have muscle memory and paying higher prices. And you know,

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Speaker 8: if if it feels like tariff's is a good reason,

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Speaker 8: then maybe they're more inclined to accept it now than

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Speaker 8: they would have been in eighteen.

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Speaker 2: If we still have these tariffs by Friday, what am

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Speaker 2: I looking at the payrolls report for? Is it of

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Speaker 2: any use at all?

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Speaker 4: I don't think it's irrelevant.

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Speaker 8: But I think it's definitely going to be the case

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Speaker 8: that the markets are going to pay a lot less

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Speaker 8: attention to the normal data flow than they would have otherwise.

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Speaker 2: That's for sure. Stephen Stanley of Santanta's Stephen. Thank you, sir,

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Speaker 2: I appreciate it. Let's cross over to Earl Davis of BEIMO,

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Speaker 2: who has more Welcome to the program, Sir, I've asked

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Speaker 2: this question a few times already today. Is this bullish

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Speaker 2: or bearish for treasuries? Which one ol?

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Speaker 9: It's bullish for tips, not treasuries, and tips will all

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Speaker 9: perform both on a rally as we're seeing today in

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Speaker 9: the tenure sector.

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Speaker 10: And they will outperform on any sell off.

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Speaker 9: The reason why it's hard to answer that question ultimately,

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Speaker 9: other than tips, is that the market only has the

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Speaker 9: ability to focus on one narrative at the time at

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Speaker 9: a time, and there's four possible narratives that could have

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Speaker 9: happen now. One is inflation, two is growth, three is

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Speaker 9: risk off.

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Speaker 10: And four is fiscal.

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Speaker 9: Two of those, inflation and fiscal are negative on bond yields,

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Speaker 9: and two are bullish. That's risk off and growth. The

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Speaker 9: risk off is what we're seeing now combined with inflationary fears.

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Speaker 2: Do you think on the tax on the fiscal, Earl,

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Speaker 2: the actions like this make it more likely than not

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Speaker 2: we'll get bigger tax cats than some people expect.

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Speaker 10: Yeah, I could go both ways. There's so many unknowns.

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Speaker 9: That's why we said our approaches, you know what, we

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Speaker 9: expect nothing, but we plan for everything and so that

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Speaker 9: we could take advantage of it now. So it's possible,

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Speaker 9: but there's so many unknowns, right are the what is

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Speaker 9: the revenue actually used for?

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Speaker 10: How long does it?

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Speaker 9: Does this last a little bit's a short lived tariff war,

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Speaker 9: then we can expect to be more see more pressure

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Speaker 9: on fiscal but if it's longer lived than yes, it

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Speaker 9: does help to fund tax cuts.

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Speaker 10: Another spending choices.

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Speaker 6: Oh, do you have a base case going into this

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Speaker 6: evening because after midnight they're coming on in less as

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Speaker 6: an eleventh hour deal.

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Speaker 9: Yeah, you know, it's one of those things where you know,

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Speaker 9: you hope for the best, prepare for the worst. So

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Speaker 9: our base case basically is we don't have a base case,

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Speaker 9: but it's to react to the market, to acknowledge when

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Speaker 9: a narrative has run out. And I named the four

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Speaker 9: things that we're looking at as possible narratives if you were.

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Speaker 10: To ask me right now.

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Speaker 9: The way I think, the way I believe I see

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Speaker 9: this going is first you have your risk off trade.

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Speaker 9: You're seeing that through credit spreads wide and you're seeing

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Speaker 9: that through a rally inenominals and tips, even though tips

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Speaker 9: are rallying more than treasuries, so we'll have this risk

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Speaker 9: off verse. Then if the tarers are implemented and grow,

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Speaker 9: there will be inflation fares. And the reason why I

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Speaker 9: feel there'll be inflation fears COVID has conditioned consumers to

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Speaker 9: accept price hikes faster, so I believe there'll be a

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Speaker 9: rapid flow through of any price increases of taris into

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Speaker 9: prices here, so you'll have that inflationary aspect. But as

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Speaker 9: your previous guest seen, this is more of a growth

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Speaker 9: shock as it stands right now than an inflation shock.

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Speaker 9: So I think the second half of the year you

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Speaker 9: start getting that tremendous.

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Speaker 10: Rally in bonds.

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Speaker 9: So it's very interesting the possible sequencing of this. One

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Speaker 9: thing I do want to highlight, there's one thing where

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Speaker 9: it changes this to an inflation shock from a gross shock.

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Speaker 10: I do believe it is a gross shock on the

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Speaker 10: real economy.

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Speaker 9: But what changes it to an inflation shock is if

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Speaker 9: you get money printing, if you get to QI again,

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Speaker 9: because that's putting more cash into the system, which will

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Speaker 9: fuel the inflation and fuel growth so it's one thing

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Speaker 9: to watch out for where it could pivot from a

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Speaker 9: gross shock to an inflation shop.

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Speaker 6: Oh do you think it could be more inflationary as

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Speaker 6: well if we get more terrorists.

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Speaker 4: Trump last night is talking.

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Speaker 6: About the fact that they're going to be coming as

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Speaker 6: well when it comes to the European Union.

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Speaker 9: Yeah, you know what, it's a very interesting thing. This

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Speaker 9: is why I brought up QE. So if you think

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Speaker 9: of the economy US economy as a pie, the pie

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Speaker 9: is not changing shape without any QE or q T.

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Speaker 10: It's one solid size. Now you bring in.

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Speaker 9: Tariffs, people have to spend more, so the bigger piece

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Speaker 9: of the pie is now going for tariffs. That for

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Speaker 9: inflation and to pay prices. That means there's less that

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Speaker 9: goes into investment. That's why without QE you do get

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Speaker 9: a gross shock ultimately, but there is a very large potential.

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Speaker 9: I think the trigger for a QE or something more

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Speaker 9: stimulative is the risk off. You start getting a big

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Speaker 9: sell off in risk assets. I do think the FED

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Speaker 9: put is in play and that is adding stimulus to

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Speaker 9: the market. So there's so many dynamics here you have

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Speaker 9: to uh, but there's opportunity as well. As long as

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Speaker 9: you map it out and look and wait for the

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Speaker 9: opportunity and write time to strike. That's what we're doing.

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Speaker 9: And I gave you the process of how we're kind

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Speaker 9: of looking at it.

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Speaker 2: Oh just briefly though, do you think the thread just

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Speaker 2: the mere possibility of inflation picking up again just constrain

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Speaker 2: the FED put the FED spias to wieze.

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Speaker 9: No, not all FED puts in play. And the reason

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Speaker 9: why is because we're still we're not the peak of inflation.

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Speaker 9: You know, we're not where we were in twenty twenty two,

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Speaker 9: so they still have room. And the reason why it's

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Speaker 9: in play is because of that potential growth shock.

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Speaker 10: So they could look through.

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Speaker 9: They could say, we're looking through this supply shark because

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Speaker 9: we do see the press demand, and we're going to

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Speaker 9: the press demand because we believe inflation will ultimately end

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Speaker 9: up in the range that we want that one to

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Speaker 9: three percent.

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Speaker 2: You one of the best, really thoughtful stuff. Appreciate your time.

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Speaker 2: Thank you, Oh Davis there of BMO. This is the

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Speaker 2: the Bloomberg Business out mm hmm