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Speaker 2: our top story. President Trump said to speak with leaders
Speaker 2: of Canada and Mexico today ahead of tariffs going into
Speaker 2: effect tomorrow, as he ramps up threats against another key ally,
Speaker 2: the European Union. Jason Furman at the Harvard Kennedy School writing,
Speaker 2: it's hard to decide if tariff's the worst economic policy
Speaker 2: or foreign policy. We'll see if Trump caves to the market.
Speaker 2: Jason joins us now for more. Jason, Welcome to the
Speaker 2: program sir, thanks for making time for us. Let's just
Speaker 2: start here. How different these actions are compared to what
Speaker 2: we saw in Trump's first term?
Speaker 3: Oh yeah, look, I thought there were too many tariffs,
Speaker 3: and Frump's first term, I thought they were too poorly designed.
Speaker 3: But this is just at a massive scale relative to those,
Speaker 3: and these are against close allies, and this is less
Speaker 3: than you know. This is basically two weeks in to
Speaker 3: the administration, and he's promised us he's just getting started.
Speaker 1: Jason, it seems like on Wall Street people believe that
Speaker 1: the US economy is strong enough to withstand the hit,
Speaker 1: the growth hit from these tariffs.
Speaker 4: Do agree.
Speaker 3: First of all, it doesn't look to me like Wall
Speaker 3: Street has priced in these tariffs going into effect on
Speaker 3: a sustained basis.
Speaker 5: And by the way, I hope Wall Street's right about that.
Speaker 3: Some things are crazy enough that you touch the hot
Speaker 3: stove and you pull your hand away, and I think
Speaker 3: that's what Wall Street things would happen. So you can't
Speaker 3: look at the market right now to infer what would
Speaker 3: happen if over the next year, we keep these tariffs on,
Speaker 3: escalate them in response to their responses, add tariffs to
Speaker 3: the European Union at a universal tariff. All of that,
Speaker 3: I have no doubt, would would be quite a big hit.
Speaker 4: To growth, Jason.
Speaker 6: As you know, though, of course, USMCA is up for
Speaker 6: renegotiation next year. How much are these tariffs a part
Speaker 6: of that Caroenen stick approach for that renegotiation with Canada
Speaker 6: and Mexico.
Speaker 3: You know, USMCA was President Trump's trade agreement, and look,
Speaker 3: it's sort of ironic. In twenty sixteen, he campaigned on
Speaker 3: tearing up NAFTA and he ended up doing a renegotiation
Speaker 3: of it that was pretty good, and that got everyone
Speaker 3: on board. This time around, he actually did not campaign
Speaker 3: against NAFTA or USMCA, did not really campaign against Mexico
Speaker 3: and Canada, and he's straight out of the gate with
Speaker 3: tariffs on them. I don't really see this as part
Speaker 3: of a ploy to have a better USMCA and goes
Speaker 3: I don't quite know what we're looking for in the
Speaker 3: USMCA negotiating well.
Speaker 6: He did campaign though, on making sure that he put
Speaker 6: a halt to illegal immigration and stopping the fetanyl flow.
Speaker 6: If you look at our own drug enforcement data, twenty
Speaker 6: one thousand pounds with seas at the southern border of fetanyl,
Speaker 6: forty three pounds of fetanyl from Canada. Two milligrams of
Speaker 6: fetanyl is lethal. There's more than four hundred and fifty
Speaker 6: milligrams in a pound. If that is the direction that
Speaker 6: Trump is taking and it comes to national security, do
Speaker 6: you see this administration using tariffs? Say prior administrations might
Speaker 6: use things like sanctions.
Speaker 3: He First of all, you just said the number for
Speaker 3: Canada was tiny compared to the number for Mexico. And
Speaker 3: by the way, fentanyl goes from the US porter to
Speaker 3: the Canadian border as well, do you think they should
Speaker 3: be putting tariffs on us to stop that flow of fentanyl? Absolutely,
Speaker 3: we need to put pressure on Mexico. But it's not
Speaker 3: like they have a switch that they could choose whether
Speaker 3: or not to push.
Speaker 5: This has been a big issue for them.
Speaker 3: It's undermined a lot of their country the drug trade
Speaker 3: as well. And by the way, destabilizing the Mexican economy
Speaker 3: is going to increase.
Speaker 5: The amount of immigration to the United States, not reduce it.
Speaker 1: Jason, there's a larger theory here that the US needs
Speaker 1: to produce more of its goods at home, both for
Speaker 1: national security reasons and also to give jobs to people
Speaker 1: in areas that got beaten up during a lot of
Speaker 1: the globalization shifts that we saw in the economy. What
Speaker 1: do you think it would take to bring production back.
Speaker 1: Do you think that's a feasible goal and how long
Speaker 1: would it take?
Speaker 4: Yeah?
Speaker 3: I think what would take to bring production back is
Speaker 3: to have an integrated market in North America where inputs
Speaker 3: for American manufacturers can come in tax free, where auto
Speaker 3: parts can go back and forth across the border multiple times.
Speaker 3: That's the way you have an American auto industry. You
Speaker 3: don't make every single piece that goes into the car.
Speaker 3: You have, you know a lot of the you added
Speaker 3: a lot of the key stages of the process, but
Speaker 3: spread production out around the world. That's what makes the
Speaker 3: American economy so incredibly successful. Look at US productivity growth
Speaker 3: compared to any other events economy, It's been much higher.
Speaker 5: Globalization has been a key part of that.
Speaker 3: This is going to destroy American manufacturing if it continues
Speaker 3: and escalates.
Speaker 2: Jason, can you make the argument that globalization destroyed American manufacturing.
Speaker 3: Productivity growth has been the biggest factor in reducing American manufacturing.
Speaker 3: Manufacturing jobs have fallen in China, they've fallen in Germany,
Speaker 3: they fall in the United States because you can make things.
Speaker 5: With fewer people.
Speaker 3: And by the way, even if you want more manufacturing jobs,
Speaker 3: you don't raise input prices for manufacturing. You don't strengthen
Speaker 3: the dollar to hurt exporters. You don't weaken the economies
Speaker 3: of our trading partners. You don't encourage them to put
Speaker 3: terrorfs on manufact Every single aspect of this is bad
Speaker 3: for American manufacturing.
Speaker 2: Jason, just to find a word at the one minute
Speaker 2: we have left with you, just on prices. By definition,
Speaker 2: the importer pays the tariff. So let's just put that
Speaker 2: all to one side. What's your base case on how
Speaker 2: the cost will be distributed? How do you see this
Speaker 2: playing gap? Will it all get passed through to the consumer?
Speaker 2: Will it be eaten elsewhere?
Speaker 3: He'll be a little bit of it eaten by the
Speaker 3: Canadians and Mexicans in terms of the appreciation of the dollar,
Speaker 3: some of it eaten by margins. So I see something
Speaker 3: like an extra half point on inflation, and if you
Speaker 3: go from you know, two point five to three percent inflation,
Speaker 3: and that's a big difference for the.
Speaker 2: Fat, big change. Jason, appreciate your input and your insight.
Speaker 2: Thank you, sir, Jason Furman there at the Harvard Kennedy School.
Speaker 2: I'm ready sent of energy aspects joined us now to
Speaker 2: extend the conversation and RITA, what does a tempt per
Speaker 2: tariff on four million pounds of crew today? Due to
Speaker 2: this energy market?
Speaker 7: I think you look, the ten percent tariff in itself
Speaker 7: doesn't break us refining, but for sure it adds to
Speaker 7: the cost. US refining margins are not great to begin with.
Speaker 7: We've calculated even if Canadian heavies takes seventy percent off
Speaker 7: the tariff, you still lose about a dollar from Midwest margins.
Speaker 7: And I think the critical thing it also is to
Speaker 7: watch for is the Canadian dollar that's weakened a lot,
Speaker 7: so that also helps absorb some of the tariffs. But ultimately, yes,
Speaker 7: you are going to get a hit on US Midwest margins,
Speaker 7: also West coast margins. We're going to see more of
Speaker 7: the Canadian flow on the TMX pipeline to Asia instead,
Speaker 7: and US will have to pay up four alternatives, if
Speaker 7: I may say, I think more than the Canadian one.
Speaker 7: It's a twenty five percent on Mexico that's going to
Speaker 7: be the much bigger problem given the Gulf Coast in
Speaker 7: sports about four hundred thousand barots but of Mexican heavies
Speaker 7: and another two hundred thousand of feet stop what we
Speaker 7: would call fuel oil. That's going to be very hard
Speaker 7: for them to replace. And it's a higher tariff as well,
Speaker 7: given its twenty five percent.
Speaker 1: I'm reading you mentioned something in there that I want
Speaker 1: to pick up and exporting more to Asia. How easy
Speaker 1: is it for Canada and Mexico to shift its export
Speaker 1: lines to direct more of it to China in the
Speaker 1: Southeast asiancy rather than the United States.
Speaker 7: Well, because Canada now has the TMX pipeline. In the past,
Speaker 7: they wouldn't have been able to do so would have
Speaker 7: been a lot harder, but now with TMX, it actually
Speaker 7: gives them a lot more optionality. And if I may
Speaker 7: say so, I think these tariffs have essentially handed a
Speaker 7: boon to Asian refiners. And it's obviously bullish for pad
Speaker 7: One margins because pad One is losing product exports from Canada,
Speaker 7: but it's also boosting European refining margins. It's a win
Speaker 7: for a lot of the rest of the world, just
Speaker 7: a massive loss for you s refining, which you know,
Speaker 7: given that it's meant to be America first, I'm not
Speaker 7: one hundred percent sure that was the intended consequence, but
Speaker 7: that's absolutely how this is going to play out.
Speaker 1: How long before the United States could produce the kind
Speaker 1: of crude that would be good for refining. How long
Speaker 1: before the US can compensate? And I've set that with
Speaker 1: the energy that Donald Trump was talking about.
Speaker 7: They can't. I mean, the reserves are light shale. It's
Speaker 7: a geology problem. We can, you know, scream and shout
Speaker 7: out as much as we want about the volume of
Speaker 7: oil produced. But every refiner on the Gulf Coast and
Speaker 7: a lot of them in the Midwest are complex refiners.
Speaker 7: They need the heavier crude and that's why they were designed,
Speaker 7: because they had availability of Canadian and Mexican heavies. Gulf
Speaker 7: of Mexico producers some medium sour crudes, but it's not
Speaker 7: the heavy material that these refiners need. So it's a
Speaker 7: geology problem. It's nothing to do with you know, regulation
Speaker 7: or anything else. US of course has all the oil
Speaker 7: the refiners require, it's just the wrong type of oil.
Speaker 6: So I'm rida, where can they import this type of crud?
Speaker 6: Not going to be from Mexico or Canada.
Speaker 7: So I think the Canadian imports will still continue because again,
Speaker 7: like I said, the ten percent tariff, again, we'll get
Speaker 7: it split between refiners and Canada, but I think those
Speaker 7: will continue. I think the challenge is going to be
Speaker 7: on the Gulf coast. We do see more Middle Eastern
Speaker 7: barrels arriving potentially from Iraq. Even some Saudi Arabia and
Speaker 7: other Latin American countries can swing, but it's going to
Speaker 7: be a tough ask. And by the way, we don't
Speaker 7: even know if Mexico is going to retaliate. If it
Speaker 7: does on oil products, which is not our base case,
Speaker 7: but US Golf Coast refiners send eight hundred and fifty
Speaker 7: thousand barrels play of products to Mexico. They will not
Speaker 7: find a home and they will have to cut runs.
Speaker 7: That's the one to watch out for Amrita with an
Speaker 7: uptick in prices right now.
Speaker 4: We also have OPEC plus.
Speaker 6: Members meeting today. Is this a moment for them to
Speaker 6: want to add barrels to the market.
Speaker 7: Today's a GMMC meeting rather than no OPEK ministerial meeting.
Speaker 7: The GMMC simply, you know, just take stock of where
Speaker 7: fundamentals are. We've maintained our view that they will appselutely
Speaker 7: have to see outright supply disruption, not just trade floor ships,
Speaker 7: which is what's happening right now before they change course.
Speaker 7: So we maintain the view that you know, the earliest
Speaker 7: you're going to start seeing or back plus unwined is April.
Speaker 2: I'm rich, I appreciate your time. As always, I'm ready
Speaker 2: to send there of energy aspects. Steven Stanley as Santander,
Speaker 2: saying tariffs are likely to be negative for growth, especially
Speaker 2: if there is retaliation. Steve joined us now for more.
Speaker 4: Steven, good to see it, good to be here.
Speaker 2: Chair and Pound in the news conference said he'd wait
Speaker 2: to see policy articulated. And we've said this morning a
Speaker 2: few times that it has been what does he do now?
Speaker 4: I think you have to wait. I mean, I think
Speaker 4: this is a day to day thing.
Speaker 8: President Trump is speaking with the leaders of Canada, Mexico.
Speaker 8: There's a I mean, there's at least a non trivial
Speaker 8: chance that we'd never see these, these twenty five percent
Speaker 8: tariffs on.
Speaker 1: The margins, though given that a lot of companies aren't
Speaker 1: sure what to do with us Jim Bullard for our
Speaker 1: Saint Louis fed President was earlier on in saying he
Speaker 1: sees this as more of a growth shock than an
Speaker 1: inflationary shock. Based on everything that you've read and seen.
Speaker 4: So far, would you agree totally agree with that? Totally agree.
Speaker 8: So the inflation story's been the one that's gotten the
Speaker 8: most run in terms of tariffs.
Speaker 4: But the problem with that story is that tariffs are a.
Speaker 8: One time change in the price level, right, It's not
Speaker 8: a persistent change in the rate of change of prices,
Speaker 8: which is inflation.
Speaker 4: And so in theory, the FED is supposed to look
Speaker 4: through that.
Speaker 8: I realize easier said than done. But if you go
Speaker 8: back to twenty eighteen, I know very different economic landscape,
Speaker 8: but the main issue back then was growth, not inflation,
Speaker 8: and it definitely had a significant impact on growth.
Speaker 1: The argument that people make against this is that the
Speaker 1: US economy is so strong and this is such a
Speaker 1: minor hit that the US will power through it and
Speaker 1: it will barely show up.
Speaker 4: Why do you disagree, Well, we may very well get
Speaker 4: through it.
Speaker 8: I don't think this would necessarily be inflationary, given that
Speaker 8: the economy does have a lot of momentum, but I
Speaker 8: do think that the growth hit would be significant.
Speaker 4: We would notice it for sure.
Speaker 8: And I think again, if you go back to twenty
Speaker 8: eighteen twenty nineteen, it seems to me that the biggest
Speaker 8: takeaway from that experience, at least for me, was it
Speaker 8: wasn't so much the tariffs themselves. It was the uncertainty
Speaker 8: in the environment that it engendered. And I think a
Speaker 8: lot of businesses were, you know, taking a step back
Speaker 8: until they had a better idea of what was coming
Speaker 8: at that time. And now I think businesses are already
Speaker 8: in that mode. They're waiting for tax changes regulatory.
Speaker 4: In addition to tariffs.
Speaker 8: And I mean, if I'm a business person, I'm not
Speaker 8: making any you know, smart, I'm not making any big
Speaker 8: decisions anytime soon.
Speaker 6: The other side of that growth, though, is what if
Speaker 6: there is a fifteen percent corporate tax, right if you
Speaker 6: produce in the United States? Right, isn't it the cart
Speaker 6: and stick approached?
Speaker 8: Well, this is yeah, this is what the president is
Speaker 8: aiming for. Is he wants to bring production and home.
Speaker 8: I mean, I think that's realistic, perhaps for some industries
Speaker 8: and not so much for others.
Speaker 4: But yeah, I mean it is a mix.
Speaker 8: I think that if you look at the administration's proposed
Speaker 8: policy policies in a totality, the tax piece and the
Speaker 8: regulatory piece are likely to be very positive for growth
Speaker 8: and then on the other side, you've got tariffs and
Speaker 8: maybe to some degree immigration, And you know, he's leading
Speaker 8: with tariffs, which it seems to me maybe not the
Speaker 8: right way to go because that's the one that has
Speaker 8: the potential to be negative for growth.
Speaker 4: But you know, we'll see how that plays out.
Speaker 8: I mean, I think it's you know, I'm not a
Speaker 8: political annalys but my sense is.
Speaker 4: That for him, this is all in negotiation. The point
Speaker 4: of this isn't to slap tariffs and slow the economy down.
Speaker 8: It's to get what he wants from Canada, Mexico, China
Speaker 8: and others.
Speaker 6: And he's flirting now the European Union. Last night he
Speaker 6: said we'll definitely happen with the European Union.
Speaker 4: So in that sense, how do you model.
Speaker 6: All of this if it's basically just going to be
Speaker 6: paralysis businesses waiting on the sidelines because they could be
Speaker 6: waiting for months or years.
Speaker 8: Yeah, it's definitely moving target. I mean, you think about
Speaker 8: are the arffs going to happen?
Speaker 4: Are they not going to happen?
Speaker 8: Then if they are, next question, are they going to
Speaker 8: be exemptions? Are certain industries going to get which that
Speaker 8: happened a lot there are a lot of exemptions in
Speaker 8: Trump's first term on the tariffs that we're in posed.
Speaker 8: How do our trading partners respond, are they retaliatory?
Speaker 4: Do they want to deal? How does how does the
Speaker 4: broader economy respond to?
Speaker 8: Do producers and retailers pass everything through? Do they eat
Speaker 8: some of the of the margin? You know, there's so
Speaker 8: many questions that I think it's impossible to have a
Speaker 8: precise estimate. I mean, I think, you know, we know
Speaker 8: the direction, but I don't think that the magnitudes are
Speaker 8: very difficult. You can, you know, you can kind of
Speaker 8: throw numbers out there, but it's all very tentative at
Speaker 8: this point.
Speaker 2: Can we throw some numbers at that few? Let's got
Speaker 2: back to twenty eighteen and talk about the experience from
Speaker 2: twenty eighteen. We know a whole different range of things
Speaker 2: can happen. Exporters can drop prices, we can eat it
Speaker 2: on the margin. It doesn't all have to get passed
Speaker 2: through to the consumer. You would be the first to
Speaker 2: say that's very dependent on what goods and what sectors,
Speaker 2: And I would agree with you. What do we learned
Speaker 2: from eighteen about what corporations did then?
Speaker 4: What happened?
Speaker 2: Then?
Speaker 8: Yeah, I think the difficulty is that the environment is
Speaker 8: very different now than it was then. I think back then,
Speaker 8: inflation expectations were incredibly low. Firms had very little pricing power,
Speaker 8: and I think in many cases they were forced to
Speaker 8: eat at least some of the cost increases. This time around,
Speaker 8: firms have a lot of muscle memory raising prices when
Speaker 8: their costs go.
Speaker 2: Do they have pricing power right now?
Speaker 4: We'll see, We'll see.
Speaker 8: I think that consumers are probably, you know, the anecdotal
Speaker 8: evidence is that consumers have started to fight back a
Speaker 8: little bit. But at the same time, again, consumers also
Speaker 8: have muscle memory and paying higher prices. And you know,
Speaker 8: if if it feels like tariff's is a good reason,
Speaker 8: then maybe they're more inclined to accept it now than
Speaker 8: they would have been in eighteen.
Speaker 2: If we still have these tariffs by Friday, what am
Speaker 2: I looking at the payrolls report for? Is it of
Speaker 2: any use at all?
Speaker 4: I don't think it's irrelevant.
Speaker 8: But I think it's definitely going to be the case
Speaker 8: that the markets are going to pay a lot less
Speaker 8: attention to the normal data flow than they would have otherwise.
Speaker 2: That's for sure. Stephen Stanley of Santanta's Stephen. Thank you, sir,
Speaker 2: I appreciate it. Let's cross over to Earl Davis of BEIMO,
Speaker 2: who has more Welcome to the program, Sir, I've asked
Speaker 2: this question a few times already today. Is this bullish
Speaker 2: or bearish for treasuries? Which one ol?
Speaker 9: It's bullish for tips, not treasuries, and tips will all
Speaker 9: perform both on a rally as we're seeing today in
Speaker 9: the tenure sector.
Speaker 10: And they will outperform on any sell off.
Speaker 9: The reason why it's hard to answer that question ultimately,
Speaker 9: other than tips, is that the market only has the
Speaker 9: ability to focus on one narrative at the time at
Speaker 9: a time, and there's four possible narratives that could have
Speaker 9: happen now. One is inflation, two is growth, three is
Speaker 9: risk off.
Speaker 10: And four is fiscal.
Speaker 9: Two of those, inflation and fiscal are negative on bond yields,
Speaker 9: and two are bullish. That's risk off and growth. The
Speaker 9: risk off is what we're seeing now combined with inflationary fears.
Speaker 2: Do you think on the tax on the fiscal, Earl,
Speaker 2: the actions like this make it more likely than not
Speaker 2: we'll get bigger tax cats than some people expect.
Speaker 10: Yeah, I could go both ways. There's so many unknowns.
Speaker 9: That's why we said our approaches, you know what, we
Speaker 9: expect nothing, but we plan for everything and so that
Speaker 9: we could take advantage of it now. So it's possible,
Speaker 9: but there's so many unknowns, right are the what is
Speaker 9: the revenue actually used for?
Speaker 10: How long does it?
Speaker 9: Does this last a little bit's a short lived tariff war,
Speaker 9: then we can expect to be more see more pressure
Speaker 9: on fiscal but if it's longer lived than yes, it
Speaker 9: does help to fund tax cuts.
Speaker 10: Another spending choices.
Speaker 6: Oh, do you have a base case going into this
Speaker 6: evening because after midnight they're coming on in less as
Speaker 6: an eleventh hour deal.
Speaker 9: Yeah, you know, it's one of those things where you know,
Speaker 9: you hope for the best, prepare for the worst. So
Speaker 9: our base case basically is we don't have a base case,
Speaker 9: but it's to react to the market, to acknowledge when
Speaker 9: a narrative has run out. And I named the four
Speaker 9: things that we're looking at as possible narratives if you were.
Speaker 10: To ask me right now.
Speaker 9: The way I think, the way I believe I see
Speaker 9: this going is first you have your risk off trade.
Speaker 9: You're seeing that through credit spreads wide and you're seeing
Speaker 9: that through a rally inenominals and tips, even though tips
Speaker 9: are rallying more than treasuries, so we'll have this risk
Speaker 9: off verse. Then if the tarers are implemented and grow,
Speaker 9: there will be inflation fares. And the reason why I
Speaker 9: feel there'll be inflation fears COVID has conditioned consumers to
Speaker 9: accept price hikes faster, so I believe there'll be a
Speaker 9: rapid flow through of any price increases of taris into
Speaker 9: prices here, so you'll have that inflationary aspect. But as
Speaker 9: your previous guest seen, this is more of a growth
Speaker 9: shock as it stands right now than an inflation shock.
Speaker 9: So I think the second half of the year you
Speaker 9: start getting that tremendous.
Speaker 10: Rally in bonds.
Speaker 9: So it's very interesting the possible sequencing of this. One
Speaker 9: thing I do want to highlight, there's one thing where
Speaker 9: it changes this to an inflation shock from a gross shock.
Speaker 10: I do believe it is a gross shock on the
Speaker 10: real economy.
Speaker 9: But what changes it to an inflation shock is if
Speaker 9: you get money printing, if you get to QI again,
Speaker 9: because that's putting more cash into the system, which will
Speaker 9: fuel the inflation and fuel growth so it's one thing
Speaker 9: to watch out for where it could pivot from a
Speaker 9: gross shock to an inflation shop.
Speaker 6: Oh do you think it could be more inflationary as
Speaker 6: well if we get more terrorists.
Speaker 4: Trump last night is talking.
Speaker 6: About the fact that they're going to be coming as
Speaker 6: well when it comes to the European Union.
Speaker 9: Yeah, you know what, it's a very interesting thing. This
Speaker 9: is why I brought up QE. So if you think
Speaker 9: of the economy US economy as a pie, the pie
Speaker 9: is not changing shape without any QE or q T.
Speaker 10: It's one solid size. Now you bring in.
Speaker 9: Tariffs, people have to spend more, so the bigger piece
Speaker 9: of the pie is now going for tariffs. That for
Speaker 9: inflation and to pay prices. That means there's less that
Speaker 9: goes into investment. That's why without QE you do get
Speaker 9: a gross shock ultimately, but there is a very large potential.
Speaker 9: I think the trigger for a QE or something more
Speaker 9: stimulative is the risk off. You start getting a big
Speaker 9: sell off in risk assets. I do think the FED
Speaker 9: put is in play and that is adding stimulus to
Speaker 9: the market. So there's so many dynamics here you have
Speaker 9: to uh, but there's opportunity as well. As long as
Speaker 9: you map it out and look and wait for the
Speaker 9: opportunity and write time to strike. That's what we're doing.
Speaker 9: And I gave you the process of how we're kind
Speaker 9: of looking at it.
Speaker 2: Oh just briefly though, do you think the thread just
Speaker 2: the mere possibility of inflation picking up again just constrain
Speaker 2: the FED put the FED spias to wieze.
Speaker 9: No, not all FED puts in play. And the reason
Speaker 9: why is because we're still we're not the peak of inflation.
Speaker 9: You know, we're not where we were in twenty twenty two,
Speaker 9: so they still have room. And the reason why it's
Speaker 9: in play is because of that potential growth shock.
Speaker 10: So they could look through.
Speaker 9: They could say, we're looking through this supply shark because
Speaker 9: we do see the press demand, and we're going to
Speaker 9: the press demand because we believe inflation will ultimately end
Speaker 9: up in the range that we want that one to
Speaker 9: three percent.
Speaker 2: You one of the best, really thoughtful stuff. Appreciate your time.
Speaker 2: Thank you, Oh Davis there of BMO. This is the
Speaker 2: Bloomberg Sevenants podcast, bringing you the best in markets, economics,
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