WEBVTT - GDP and US Economic Outlook 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.880 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.240 --> 0:00:30.240 And the Eastern Mediterranean. Ethan Browner, iconic at the New 0:00:30.320 --> 0:00:34.000 York Times and our Israeli Bureau chief and studio with 0:00:34.200 --> 0:00:39.760 US today. Admiral Bullen, thirteenth Joint chiefs of Staff, was 0:00:40.080 --> 0:00:46.120 piercing yesterday with us. He was just brutal about moving 0:00:46.159 --> 0:00:50.960 away from the Pentagon Dance and saying America is prepared 0:00:51.640 --> 0:00:55.279 in your Tel Aviv and in the greater levant up 0:00:55.280 --> 0:00:59.400 to Airdawan and Donda Lcci. Is there a perception of 0:00:59.440 --> 0:01:02.920 an America military that is failed or diminished. 0:01:03.800 --> 0:01:05.119 It's a great question. Tom. 0:01:05.160 --> 0:01:07.360 It's nice to see both you and Paul in person. 0:01:10.040 --> 0:01:11.400 I would say there is. 0:01:11.080 --> 0:01:15.440 There is definitely a sense that. 0:01:14.480 --> 0:01:16.800 Also that they feel that they can't rely on the 0:01:16.880 --> 0:01:17.600 United States. 0:01:17.640 --> 0:01:20.080 Now, you know, there's plenty to talk about about who 0:01:20.080 --> 0:01:23.399 can rely on whom and who we'd like to rely on. 0:01:23.480 --> 0:01:28.319 But the sense in the region is that a Israel 0:01:28.400 --> 0:01:31.760 has become unchained and out of control, and that the 0:01:31.920 --> 0:01:36.880 US is behind it and not doing its job to 0:01:36.920 --> 0:01:40.800 force it to stop attacking and to force a greater 0:01:40.959 --> 0:01:42.160 sense of peace regionally. 0:01:42.200 --> 0:01:43.880 That is, certainly the people of. 0:01:43.880 --> 0:01:47.280 Israel want to be forced. I think of Robert Caplan's work, 0:01:47.520 --> 0:01:49.000 my Book of the Year a couple of years ago, 0:01:49.040 --> 0:01:52.800 the Loom of time from Morocco over to Persia. Does 0:01:52.880 --> 0:01:55.520 Israel want to be forced south the America? 0:01:55.720 --> 0:01:58.200 So my first answer had to do with, actually, everyone 0:01:58.240 --> 0:02:00.920 except Israel, and now for we're talk talking about Israel, 0:02:01.040 --> 0:02:05.520 it's split. The government and those who support it absolutely 0:02:05.520 --> 0:02:08.600 do not want to be forced. And those who oppose 0:02:08.680 --> 0:02:11.959 the government's policies and who'd like it to stop its 0:02:12.000 --> 0:02:14.960 attack in Gaza and to reach out to the Saudis 0:02:15.040 --> 0:02:18.720 and so on, are praying that this government in the 0:02:18.840 --> 0:02:20.960 United States will force its hand. 0:02:21.080 --> 0:02:24.040 Yes, it seems like not just in the Middle East, 0:02:24.080 --> 0:02:25.800 in other parts of the world. President Trump is at 0:02:25.840 --> 0:02:27.560 a point now where he's kind of washing his hands 0:02:27.560 --> 0:02:31.320 and saying, you guys, maybe Europe, for Ukraine, maybe just 0:02:31.360 --> 0:02:33.080 the reason you guys take care of it. 0:02:33.080 --> 0:02:34.640 We're kind of done here. 0:02:35.600 --> 0:02:39.240 Is that a feeling that's in the Middle East as well. 0:02:39.360 --> 0:02:41.880 I mean, I think that it does seem that way. 0:02:41.919 --> 0:02:45.280 It feels from that President Trump is someone who likes 0:02:45.280 --> 0:02:48.119 to make big pronouncements and expect that the words will 0:02:48.120 --> 0:02:51.560 create reality, and when they don't, he acts as if 0:02:51.600 --> 0:02:52.040 they do. 0:02:53.200 --> 0:02:54.880 We'll have to see what's going on right now. 0:02:54.880 --> 0:02:57.040 I mean, we're here him saying, well, we're about to 0:02:57.120 --> 0:02:59.640 end this war in Gaza any minute. We've got all 0:02:59.720 --> 0:03:02.520 kinds of plans for peace, and the hostages must come 0:03:02.520 --> 0:03:03.919 home or they'll be hell to pay. 0:03:04.360 --> 0:03:06.000 And nothing's changed so far. 0:03:06.919 --> 0:03:12.760 I mean, is there a Hammas with which Israel could 0:03:12.840 --> 0:03:16.720 really negotiate something meaningful? Is there Hamas left in terms 0:03:16.760 --> 0:03:18.000 of real leadership? 0:03:18.200 --> 0:03:20.560 So there is a Hammas leadership, But that's not the 0:03:20.600 --> 0:03:23.680 same thing as saying that it's an organization that you 0:03:23.720 --> 0:03:26.760 could negotiate with on terms that mean anything to Israel. 0:03:27.639 --> 0:03:32.040 The two sides of irreconcilable views of one another. The 0:03:32.160 --> 0:03:35.720 Hamas argument is will give you back your hostages if 0:03:35.760 --> 0:03:39.320 you get out of Gaza entirely and leave us in power, 0:03:39.760 --> 0:03:42.800 and Israel is saying, the only thing that matters to 0:03:42.920 --> 0:03:46.840 us is to get you out of power, so nothing 0:03:47.360 --> 0:03:50.240 will be worth the price of leaving you in power 0:03:50.360 --> 0:03:53.520 so that those hostages who remain are on. 0:03:53.440 --> 0:03:54.760 The table to some extent. 0:03:54.920 --> 0:03:55.840 And I think. 0:03:55.640 --> 0:03:58.600 That this government is something conclusion, that is Honyau government 0:03:58.640 --> 0:04:01.400 that it can only get out. 0:04:01.280 --> 0:04:03.840 So many of these hostages and now it needs to 0:04:03.880 --> 0:04:04.400 go to war. 0:04:04.800 --> 0:04:08.800 Ethan Bronner with this driving our Levon coverage of course 0:04:09.320 --> 0:04:13.440 out of Israel. He's Israel bureau chief for Bloomberg. We 0:04:13.440 --> 0:04:17.000 welcome all of you across the nation. I'm embarrassed to 0:04:17.000 --> 0:04:20.280 say I literally got a wave off the Jacob Frenkel 0:04:20.360 --> 0:04:24.359 at Jackson Hall, the former governor at the Bank of Israel. 0:04:24.760 --> 0:04:28.360 He's a giant in American economics, the stewardship for JP 0:04:28.520 --> 0:04:33.240 Morgan International, for mister Diamond. So right now, Jacob Frenkel, 0:04:33.640 --> 0:04:38.320 who is my Israeli Loadstone, you and him are having 0:04:38.360 --> 0:04:40.839 a beverage of your choice at the Colony Hotel in 0:04:40.880 --> 0:04:44.280 the courtyard. This goes back to like before Churchill. It's 0:04:44.320 --> 0:04:46.800 like wicked famous. It's like I've never done this. I 0:04:46.839 --> 0:04:50.640 want to be Keithan Bronner, Jacob Frenkel in the courtyard. 0:04:51.160 --> 0:04:53.839 Is this Israel? The Israel? The former governor of the 0:04:53.839 --> 0:04:59.720 Bank Israel knows does Jacob Frenkel understand the Yahoo Experiment. 0:05:00.000 --> 0:05:02.360 I mean, it is a very different country. 0:05:03.040 --> 0:05:06.719 Israel has grown much more religious, much more nationalistic, much 0:05:06.960 --> 0:05:10.120 less generous in its attitude toward its neighbors. And of 0:05:10.120 --> 0:05:13.520 course that's partly to do with the exceptional trauma that 0:05:13.600 --> 0:05:17.120 October seventh and twenty three caused the Israeli so Frankel, 0:05:17.160 --> 0:05:19.280 who I've also known but I can't I don't want 0:05:19.320 --> 0:05:22.480 to speak in his name, understands that trauma. But he 0:05:22.560 --> 0:05:25.200 also believes it's time to do something about it in 0:05:25.240 --> 0:05:28.560 a way that will bring the region behind Israel. And 0:05:28.600 --> 0:05:31.200 this government believes that the only way forward is to 0:05:31.240 --> 0:05:34.720 show military strength and others will eventually come around. 0:05:34.760 --> 0:05:38.760 My hallmark with Israeli diplomacy is a million years ago. 0:05:38.839 --> 0:05:42.240 Lisa I threw a snowball at Golden my ear's car 0:05:42.960 --> 0:05:45.120 when I was like eight years old or something. She 0:05:45.200 --> 0:05:49.120 was a junior officer of the Israeli Experiment then, and 0:05:49.360 --> 0:05:52.320 you know, it was a privilege to grow up in Rochester, 0:05:52.480 --> 0:05:57.200 New York with a huge Jewish contingent. Great from where 0:05:57.240 --> 0:06:01.839 you are, how does Israel perceive the legislative branch of 0:06:01.880 --> 0:06:06.599 the United States of America? Is it traditional Senate House 0:06:06.839 --> 0:06:10.520 politics in Washington with Israel or is it shattered? 0:06:11.400 --> 0:06:14.920 It's shattering, and there is a concern, especially. 0:06:14.560 --> 0:06:18.679 The Democratic side, that it has lost its support for Israel. 0:06:19.240 --> 0:06:21.640 It has only the republic ends and the Democrats that 0:06:21.680 --> 0:06:24.800 I forget which what number, but a surprising number of 0:06:24.839 --> 0:06:29.280 them voted to pose an impose an arms embargo for 0:06:30.400 --> 0:06:34.200 offensive arms toward Gaza, and that's they're quite worried about that. 0:06:34.240 --> 0:06:36.160 I got to get this question in Paul's two important 0:06:36.279 --> 0:06:39.880 side from Long Island emails in would President Harris do 0:06:39.960 --> 0:06:40.760 anything different? 0:06:41.040 --> 0:06:41.200 Oh? 0:06:41.240 --> 0:06:44.040 I think she would have done many things differently. I 0:06:44.040 --> 0:06:46.800 don't think she would have unleashed Israel. Now, I think 0:06:46.839 --> 0:06:49.240 the more interesting question is what Israel have done what 0:06:49.320 --> 0:06:51.680 it wanted to do anyway, And I think it's a 0:06:51.720 --> 0:06:56.400 decent possibility that it would have been nearly as militarily 0:06:56.440 --> 0:06:58.760 aggressive as it has been because it came to the 0:06:58.800 --> 0:07:00.680 conclusion that it had no choice. 0:07:00.720 --> 0:07:03.160 Whether or not you agree with that, but. 0:07:03.160 --> 0:07:06.520 I'm certain that president a President Kamala Harris would have 0:07:06.560 --> 0:07:08.719 acted very differently towards this government. 0:07:08.800 --> 0:07:14.600 Yes, how secure is mister Netanyahu in his position here today? 0:07:14.640 --> 0:07:19.600 It seems like the tide continues to turn against Israel broadly. 0:07:19.640 --> 0:07:21.840 I mean, I was just traveling on holiday through Italy 0:07:21.880 --> 0:07:25.040 and I saw so many Palestinian flags hanging from windows 0:07:25.480 --> 0:07:29.760 across the country. I didn't expect that. How secure is 0:07:29.800 --> 0:07:30.520 he in his position? 0:07:32.640 --> 0:07:36.200 I mean, the two aren't necessarily contradictory, although eventually they 0:07:36.240 --> 0:07:42.120 could become. The world has decided that Israel is out 0:07:42.120 --> 0:07:47.840 of control, and that's it needs to be sanctioned and 0:07:47.880 --> 0:07:52.320 it needs to accept a Palestinian state. The Prime Minister 0:07:52.440 --> 0:07:55.760 in Israel has a majority of the population on his 0:07:55.920 --> 0:08:01.120 side opposed to a Palestinian state, and generally in what 0:08:01.200 --> 0:08:05.440 he's doing in terms of Hamas. It's close. But I 0:08:05.480 --> 0:08:08.480 would say he's in no way in danger for the 0:08:08.520 --> 0:08:10.600 next year when there has to be an election, and 0:08:10.640 --> 0:08:13.600 he could win again in the next election. 0:08:14.520 --> 0:08:17.679 So democracy is still in place and he could win again. 0:08:17.760 --> 0:08:19.600 Just that's correct, That's correct. 0:08:19.680 --> 0:08:21.840 I mean a lot of people are fed up with him, 0:08:21.840 --> 0:08:24.640 but they also have this sense that they need someone 0:08:24.800 --> 0:08:27.840 like him, that they who is and he, after all, 0:08:27.920 --> 0:08:31.559 had an enormous number of victories last year militarily against 0:08:31.600 --> 0:08:33.559 Iran and against his belog and this week. 0:08:33.400 --> 0:08:37.120 Of Jewish celebration in America, the simplistic analysis we have. 0:08:37.200 --> 0:08:40.640 And I'm as guilty as this as anyone is Reform 0:08:40.960 --> 0:08:45.520 conservative Orthodox. I know it's way more sophisticated ethan Browner. 0:08:45.600 --> 0:08:49.160 In your Israel, who do you study within the religion 0:08:49.360 --> 0:08:53.160 of Israel? Is the tip point to netnya democracy? 0:08:54.040 --> 0:08:57.199 The tip point meaning with that will cause to end. 0:08:57.240 --> 0:08:59.160 I'll let it go there, cause it to end, or 0:08:59.200 --> 0:08:59.640 cause it. 0:08:59.600 --> 0:09:01.040 To I see. 0:09:01.160 --> 0:09:03.600 I mean the Orthodoxy is on the rise in Israel. 0:09:03.720 --> 0:09:08.240 The number of kids in first grade in Israel in 0:09:08.320 --> 0:09:11.839 religious schools now outnumber those in secular for the first 0:09:11.880 --> 0:09:14.760 time ever in the seventy seven years of the country's history. 0:09:14.880 --> 0:09:17.320 So they have six or seven children. 0:09:17.000 --> 0:09:20.000 Each, the ultra Orthodox and then the national Religious have four, 0:09:20.520 --> 0:09:23.280 and they are on the way to essentially running the 0:09:23.280 --> 0:09:24.439 country in the next twenty years. 0:09:24.440 --> 0:09:27.840 Would it Zak have been recognize this modern Israel? 0:09:27.880 --> 0:09:29.440 He would, he would weep. 0:09:30.880 --> 0:09:36.000 So I probably speak for most Americans my age, like 0:09:36.240 --> 0:09:37.560 we've been living this our whole life. 0:09:37.559 --> 0:09:38.720 We've been observing it a whole. 0:09:38.600 --> 0:09:40.720 Life, and I think I speak for a lot of people. 0:09:41.040 --> 0:09:44.480 I have no idea how a solution even comes about. 0:09:45.600 --> 0:09:47.480 I share your sense of wonder. 0:09:47.520 --> 0:09:49.040 I mean, it's almost. 0:09:48.640 --> 0:09:51.240 Like we there's nothing we can do. 0:09:51.320 --> 0:09:52.040 Really, it's true. 0:09:52.040 --> 0:09:53.880 I mean part of it is as Americans, we have 0:09:54.000 --> 0:09:56.360 this roller verse leaves notion that you know, a solution 0:09:56.559 --> 0:09:57.840 is there and we're going to find. 0:09:57.720 --> 0:09:58.959 It and we're going to put it into place. 0:09:59.040 --> 0:10:03.559 And actually, bad stuff and unpleasant stuff and complicated stuff 0:10:03.640 --> 0:10:07.040 goes on for generations. And I think that's what we're facing. 0:10:07.360 --> 0:10:09.840 And I also think that we in our age group 0:10:09.920 --> 0:10:12.480 grew up at a time of a sense of international 0:10:12.600 --> 0:10:15.280 order which started to fall apart in the last twenty years, 0:10:15.320 --> 0:10:18.120 and the world has returned to its normal. 0:10:17.840 --> 0:10:19.640 Arc of history, which is chaos. 0:10:19.920 --> 0:10:22.680 One question, then, who in the continent of Europe when 0:10:22.679 --> 0:10:25.560 the leaders speak, does Ethan Browner listened to went Crow 0:10:26.040 --> 0:10:28.520 with all the Dreyfusts and all the heritage of the 0:10:28.559 --> 0:10:32.040 French in Syria and Arabia? Is it a different country? 0:10:32.080 --> 0:10:33.720 Who are you studying right now? 0:10:33.840 --> 0:10:34.680 I'm sorry, in Europe? 0:10:34.760 --> 0:10:35.200 In Europe? 0:10:35.280 --> 0:10:39.160 Yes, I mean I think that Europe is also at 0:10:39.200 --> 0:10:41.600 wits end about what to do about itself. I mean, 0:10:41.760 --> 0:10:46.040 none of these countries is well off economically, and I 0:10:46.080 --> 0:10:50.200 think that Macron is trying through this to return France 0:10:50.240 --> 0:10:52.680 to an important position diplomatically and globally. 0:10:52.760 --> 0:10:54.320 And I don't think it's going to work. 0:10:54.760 --> 0:10:57.840 This has been a treat. Come more off, try ethan 0:10:57.880 --> 0:11:00.560 broader with this. Usually we speak from his thr illness 0:11:00.600 --> 0:11:02.960 that rushed five or six minutes. This has been a 0:11:03.000 --> 0:11:08.040 wonderful treat. Stay with us. More from Bloomberg Surveillance coming 0:11:08.120 --> 0:11:09.160 up after this. 0:11:16.360 --> 0:11:19.960 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:11:20.040 --> 0:11:23.160 weekday afternoons from seven to ten am Eastern Listen on 0:11:23.280 --> 0:11:26.920 Applecarplay and Android Otto with the Bloomberg Business app, or 0:11:27.080 --> 0:11:28.520 watch us live on YouTube. 0:11:28.760 --> 0:11:31.040 We have win thin with us today. Chief conn is 0:11:31.080 --> 0:11:33.560 a bank of NASA. He didn't know this was happening. 0:11:33.800 --> 0:11:37.400 But with his Columbia cred and all his other academics, 0:11:37.440 --> 0:11:40.800 I can't think of anyone. T Taylor Rule John Taylor 0:11:41.000 --> 0:11:44.960 Stanford t a wild on the Bloomberg I've got a 0:11:45.000 --> 0:11:48.320 complete layout of the tailor rule plus the adjustment for 0:11:48.440 --> 0:11:53.960 policy inertia. That's like the Toronto Blue Jays have policy 0:11:54.000 --> 0:11:57.679 inertia right now. I got seven plug ins on the 0:11:57.720 --> 0:12:01.800 tailor rule. I got another plug getting on the policy inertia. 0:12:01.960 --> 0:12:07.319 How squishy is a tailor rule that Stephen Myron's talking about. 0:12:07.760 --> 0:12:09.520 Yeah, well, first of all, thanks, thanks so much for 0:12:09.559 --> 0:12:11.440 having me. It's always a pleasure. I think I got 0:12:11.440 --> 0:12:13.600 a somewhat backhand compliment. 0:12:13.640 --> 0:12:13.880 I am. 0:12:13.920 --> 0:12:15.640 I haven't accused of being a jargon free nerd in 0:12:15.679 --> 0:12:17.520 the past. I'm very proud of that, and. 0:12:17.480 --> 0:12:19.240 We're going to try to do that. I mean, there's 0:12:19.280 --> 0:12:22.360 a lot of mathematics going on here, but a plug 0:12:22.360 --> 0:12:26.199 in is a variable equation where there's a lot of mystery. 0:12:26.800 --> 0:12:28.640 So so I think Paul Samerson had one of the 0:12:28.679 --> 0:12:30.160 best posts and economics. 0:12:30.160 --> 0:12:31.360 It's it's not exact science. 0:12:31.360 --> 0:12:33.679 There's more art to it than one would one expect 0:12:33.920 --> 0:12:34.679 than one would expect. 0:12:34.720 --> 0:12:38.000 Discovernor Myron know that. I think every economist knows that. 0:12:38.120 --> 0:12:41.280 Any economics who does not meant that is simply lying 0:12:41.320 --> 0:12:45.720 because we know that things are uncertain. You know, neoclassical 0:12:45.720 --> 0:12:49.679 economists it assumed perfect rationally rational markets. 0:12:49.679 --> 0:12:50.480 We know that's not true. 0:12:50.520 --> 0:12:53.640 We know behavior economics, irrational markets, those are all really 0:12:53.640 --> 0:12:57.120 what's what's driving to me a modern economic thought of 0:12:57.160 --> 0:13:01.719 this century. And so there's so much art into it, 0:13:01.760 --> 0:13:04.400 which is you know to me, you know you want 0:13:04.400 --> 0:13:06.000 to bet the house on something that's you know, such 0:13:06.000 --> 0:13:08.360 a so subjective. 0:13:08.000 --> 0:13:11.040 Within thin with this in ten minutes Myrone with John Ferrell, 0:13:11.160 --> 0:13:13.800 looking forward to that conversation. Okay, I'm going to go 0:13:13.800 --> 0:13:17.319 to the output gap. I resurrected out of conservative Richmond 0:13:18.080 --> 0:13:22.520 Hrzel paper from years ago, vamping Anthony or Finet's who 0:13:22.800 --> 0:13:26.560 was Wonderful, and it basically said, would everybody get a 0:13:26.600 --> 0:13:31.160 dose of humility? Do you detect here a certitude on 0:13:31.200 --> 0:13:34.080 the part of Trump economics? It's way out of. 0:13:34.120 --> 0:13:36.960 Line, yes, And I think we've seen that time and 0:13:37.000 --> 0:13:39.599 time again. And he's certain that tariffs are great for 0:13:39.679 --> 0:13:43.640 the nation. He's certain that mainful conscious solve everything. So 0:13:43.840 --> 0:13:45.960 you know, to me, as the biggest thing about being 0:13:45.960 --> 0:13:47.840 in a commoss is really to be humble and realize 0:13:47.840 --> 0:13:50.120 that the world is very complicated. You know, many of 0:13:50.160 --> 0:13:52.920 these observations that Princess Myron and I was making, it's 0:13:52.920 --> 0:13:55.440 in to me a very partial like living world. Say okay, 0:13:55.440 --> 0:13:58.480 we're nikas policy, it's gonna fix this. What I believe 0:13:58.520 --> 0:14:00.280 that they don't take in care into a count of 0:14:00.360 --> 0:14:03.079 was the really general equilibrium portion of it, What other 0:14:03.480 --> 0:14:07.200 secondary and tertiary impact of these policies and within the 0:14:07.240 --> 0:14:09.640 general equilibrium framework. And that is what I think is 0:14:09.679 --> 0:14:12.840 missing in a lot of the policy makers in this administration. 0:14:12.920 --> 0:14:13.840 Again, it's very humbling. 0:14:13.960 --> 0:14:18.000 So what is your view of this US economy here? 0:14:18.679 --> 0:14:20.240 I mean a lot of folks say, hey, we're still 0:14:20.240 --> 0:14:22.760 in good shape, don't worry about it. Other people say, boy, 0:14:22.800 --> 0:14:24.840 if you look underneath, whether it's a labor economy, see 0:14:24.880 --> 0:14:25.680 some areas of weakness. 0:14:25.880 --> 0:14:26.480 What's your view? 0:14:26.600 --> 0:14:28.840 Yeah, So, Paul, that's there literally a million dollar question 0:14:28.960 --> 0:14:31.040 right now is how what is what's really going on 0:14:31.040 --> 0:14:32.760 with US economy? Because out of that you can draw, well, 0:14:32.760 --> 0:14:35.400 what's the FED going to do? So facing we started 0:14:35.400 --> 0:14:38.240 this year and very strong. We came in almost three 0:14:38.280 --> 0:14:40.320 percent last year, mentum strong. All of a sudden we 0:14:40.320 --> 0:14:43.920 got hit with uh deflationary sort of impulses. I remember 0:14:43.920 --> 0:14:46.280 this is the difference between Trump one oh and chuoh. Back 0:14:46.320 --> 0:14:48.640 in Trump one he put in the inflationary sort of 0:14:48.640 --> 0:14:53.000 steamless first, tax cuts, the regulation and immigration next, and 0:14:53.040 --> 0:14:55.080 we got hit with those are the sort of deflationary 0:14:55.080 --> 0:14:57.920 stuff right after bad. So we are losing momentum. There's 0:14:57.920 --> 0:14:59.760 no doubt the job market, the lot of labor market 0:14:59.760 --> 0:15:03.040 is cra I think it's it's it's I think it's 0:15:03.080 --> 0:15:05.440 going to hit us more than we've seen in the 0:15:05.480 --> 0:15:07.120 next few months. You know, we've had delay, you know 0:15:07.240 --> 0:15:09.400 because of the sort of all the delays the tariffs, 0:15:10.640 --> 0:15:12.720 then the companies didn't pass on the tariffs where the 0:15:12.840 --> 0:15:14.960 companies didn't make adjustments, and now we're going to see 0:15:14.960 --> 0:15:16.920 that I think coming in forced the next couple of months. 0:15:16.840 --> 0:15:20.240 Commercial free for Global Wall Street, win Thin, the Bank 0:15:20.280 --> 0:15:23.920 of Nanessa into Governor Myron Jonathan Farrell speaking of Stephen 0:15:24.000 --> 0:15:27.400 Myron here in about eight minutes Paul Sweeney. 0:15:27.200 --> 0:15:31.040 So when terrorists that was for the first six months 0:15:31.040 --> 0:15:33.840 of the year. That's all we talked about. That's Taylor rule. 0:15:34.600 --> 0:15:37.400 That is not stay a little. It's kind of going 0:15:37.440 --> 0:15:38.000 to the back burner. 0:15:38.040 --> 0:15:38.160 Here. 0:15:38.160 --> 0:15:40.920 We've got equity markets setting new all time highs every day. Yes, 0:15:40.960 --> 0:15:44.800 the dollar's still low, it has not recovered. But where 0:15:44.800 --> 0:15:46.800 where are we terriffs? Is it in fact a drag 0:15:46.840 --> 0:15:48.640 on this economy? Is it in fact inflationary? 0:15:48.680 --> 0:15:51.320 We Yeah, So I mentioned this before that the delay 0:15:51.360 --> 0:15:52.160 is what I think it's key. 0:15:52.200 --> 0:15:54.680 Remember, I think we saw some some of the earnings reports, 0:15:54.680 --> 0:15:56.400 a lot of the companies were eating the terrifs because say, 0:15:56.440 --> 0:15:59.000 we don't where they end up going. We got certainty 0:15:59.040 --> 0:16:00.760 in August, and I think all of a sudden, you're 0:16:00.760 --> 0:16:03.240 getting this pass to And this is what Chair Powell 0:16:03.280 --> 0:16:04.800 and some of the other sort of hawks are afraid 0:16:04.840 --> 0:16:07.440 those is that, Okay, we've got some tariff certainty. Now 0:16:07.520 --> 0:16:09.600 we're going to start seeing a lot more pass to. 0:16:09.640 --> 0:16:12.080 I mean, listen, that's that's what companies do. They were 0:16:12.120 --> 0:16:14.320 sort of on pause while the uncertain was going on. 0:16:14.440 --> 0:16:17.280 So we should see the risk. We see high inflation 0:16:17.320 --> 0:16:20.400 that's going to hit real incomes. We're seeing labor market crack. 0:16:21.760 --> 0:16:23.600 So again I think, to me, the downs I agree 0:16:23.640 --> 0:16:26.000 with with Chair Powell at the downside we start, I think, 0:16:26.040 --> 0:16:26.640 are sort of the. 0:16:26.640 --> 0:16:29.320 Predominant right now, and that is focusing on within Thinn 0:16:29.320 --> 0:16:31.680 with this this morning. Was that great yesterday talking to 0:16:31.680 --> 0:16:36.160 one of the founders of Oracle Sudrey. Yeah, Larry Ellison, Yep, yep, yep. 0:16:36.680 --> 0:16:39.240 That was really really good, good conversation at the Plaza 0:16:39.560 --> 0:16:42.320 Hotel Bloomberg surveying us today and we thank them for 0:16:42.400 --> 0:16:46.200 their support for a bunch of by Oracle attention growing businesses. 0:16:46.440 --> 0:16:49.600 Oracle is offering to cut your current cloud bill in 0:16:49.720 --> 0:16:53.040 half if you moved to Oracle Cloud infrastructure for new 0:16:53.120 --> 0:16:58.480 US customers with minimum financial commitments. See if your company qualifies. 0:16:58.840 --> 0:17:02.720 Do that at Oracle dot com slash Bloomberg, Oracle dot 0:17:02.760 --> 0:17:07.200 com slash Bloomberg. Okay, I'm gonna get mathy. The output 0:17:07.280 --> 0:17:11.399 gap was within the Taylor rule. Herzel was mental about 0:17:11.440 --> 0:17:14.640 it twenty five years ago. I'm mental about it today. 0:17:15.200 --> 0:17:19.159 The output gap is the actual GDP, and then you 0:17:19.280 --> 0:17:24.120 take away some win thing calculation, a potential GDP which 0:17:24.160 --> 0:17:28.320 is made up with crystals and pyramids, an incense. Okay, great, 0:17:28.760 --> 0:17:31.439 somebody on the show yesterday said we're popping five or 0:17:31.480 --> 0:17:35.359 six percent nomenal GDP. We're doing two and a half 0:17:35.440 --> 0:17:40.480 three percent whatever GDP. Potential GDP is some grim number 0:17:40.520 --> 0:17:43.479 that you guys come up with. The output gap is 0:17:43.640 --> 0:17:47.520 nowhere near a Myron rate regime, is. 0:17:47.440 --> 0:17:52.320 It, No, I would say unquickly, we are not. Again, 0:17:52.359 --> 0:17:54.800 we were coming off several years of two three percent growth. 0:17:55.160 --> 0:17:58.760 I mean, Richard Claren is aged over this. I'm kidding. 0:18:00.080 --> 0:18:01.920 So look again, I'll circle back. 0:18:02.119 --> 0:18:03.960 You know, I think the really one of the issues 0:18:03.960 --> 0:18:06.800 I have with with sort of academic you know, constructs. 0:18:06.800 --> 0:18:09.159 The economist, it's whatever assumption you make. You can make 0:18:09.160 --> 0:18:10.720 whatever sumption you want to get the results you want. 0:18:10.760 --> 0:18:12.280 I think that was to me the sort of disheartening 0:18:12.840 --> 0:18:15.080 thing I found out in writing my thesis and talking 0:18:15.119 --> 0:18:16.320 to my colleagues is that. 0:18:16.680 --> 0:18:18.720 You build a model, and you make you building. 0:18:18.480 --> 0:18:20.080 Allso these sorts of assumptions, and if you don't get 0:18:20.080 --> 0:18:21.600 the results you want, then well you kind of tweak 0:18:21.640 --> 0:18:23.440 some assumptions you kind of get what you want. And 0:18:23.800 --> 0:18:27.239 it sounds very cynical, but that's sort of I think 0:18:27.280 --> 0:18:28.959 the way the world works, and that works with policy 0:18:28.960 --> 0:18:29.359 makers too. 0:18:29.400 --> 0:18:32.240 They're they're seeing what they want to see, you know. 0:18:32.280 --> 0:18:35.200 To me, look the output gap, the tailor rule, the 0:18:35.280 --> 0:18:38.439 naturate of unemployment. These are all sorts of constructs, academic 0:18:38.480 --> 0:18:41.040 constructs that we posso makers want to sort of use 0:18:41.080 --> 0:18:44.080 as guideposts. But there's no no sure answer. To me, 0:18:44.200 --> 0:18:46.480 there's sort of clues to what's going on in the cold, 0:18:46.520 --> 0:18:48.160 but there's no one thing you can look at and say, hey, 0:18:48.160 --> 0:18:50.080 this is what we need to do. So, you know, 0:18:50.119 --> 0:18:52.440 Governor Myron is to me speaking to an audience one 0:18:52.680 --> 0:18:53.680 who wants lower rates. 0:18:54.880 --> 0:18:58.520 Chair Powell is tracket. Nobody agrees with him, is that 0:18:58.560 --> 0:18:59.200 what you're saying? 0:18:59.600 --> 0:19:02.200 Well, I think that many people within his administration agree 0:19:02.200 --> 0:19:02.840 with him, Paula. 0:19:02.920 --> 0:19:05.080 I just took the tailor rule, yep, and I just 0:19:05.160 --> 0:19:08.000 plugged in as a complete hack and amateur two or 0:19:08.040 --> 0:19:10.040 three jakes. I'm not even gonna bore our audience, so 0:19:10.240 --> 0:19:13.120 people drive off the road in the Garden State Parkway. 0:19:13.480 --> 0:19:16.720 And I modeled a tailor rule that is Steve myron 0:19:16.840 --> 0:19:21.880 ish okay by making assumptions forward, which I'm sorry. It's 0:19:21.920 --> 0:19:24.480 like Stevie. It's like a Stevie Nick song. They just 0:19:24.760 --> 0:19:28.320 they just remastered Buckingham Nix. It's like Crystal, you know, 0:19:28.359 --> 0:19:31.280 Crystal Pyramids and all that they were singing about thirty 0:19:31.359 --> 0:19:33.040 years ago. Go So what's the magic number? Tom? 0:19:33.040 --> 0:19:35.919 I'm curious, what's the magic When you get out of that, 0:19:36.040 --> 0:19:36.879 I came up. 0:19:36.920 --> 0:19:39.359 I lowered the neutral real rate. Listen to him, what 0:19:39.440 --> 0:19:42.119 is this to do? It was a pop quiz with 0:19:42.320 --> 0:19:45.320 doctor Thin. I lowered the neutral rate. I lowered the 0:19:45.359 --> 0:19:50.159 inflation target, and critically, I know I lowered Neyhrew Lisa 0:19:50.240 --> 0:19:52.920 Nehru's not the jacket you're buying for your daughter for 0:19:53.440 --> 0:19:58.000 the fall prem I lowered Neyrow. Okay, I came up 0:19:58.040 --> 0:19:59.919 with a I don't know, doctor thinn I came up 0:20:00.080 --> 0:20:02.159 the number that's like four rate cuts. 0:20:02.800 --> 0:20:03.280 There you go. 0:20:03.440 --> 0:20:05.320