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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Single best idea? Which

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Speaker 1: way to turn here? After what we saw yesterday with

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Speaker 1: the FED derby, I guess we could do the Federal Reserve.

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Speaker 1: We had Glenn Hubbard on, you know, Frankly, he's on

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Speaker 1: my short list to be the next chairman. We talked

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Speaker 1: to him about the Fed. But with where tariffs are

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Speaker 1: and where the numbers are working out, it's really a

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Speaker 1: lot of math going on among tariff experts. We're going

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Speaker 1: from three percent up to somewhere ten percent no higher,

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Speaker 1: fifteen percent no higher. It's a shocking move. Glenn Hubbard

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Speaker 1: of Columbia Business School on our new tariffs.

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Speaker 2: Tariffs are attacks. They're not really inflationary. There one time

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Speaker 2: changes in the price level. I wouldn't recommend them, but

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Speaker 2: I don't think inflation is the biggest reason. I think

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Speaker 2: the reason is you're taxing and distorting supply chains. You know,

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Speaker 2: people forget two basic things. One, a tax on imports

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Speaker 2: is actually a tax on exports, and the reason for

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Speaker 2: that is two one movements in the dollar and second,

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Speaker 2: the fact that American imports are largely intermediate goods. You

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Speaker 2: hurt manufacturing by doing it. The second point is it's

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Speaker 2: not the current account, it's the capital account. All the

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Speaker 2: current account is the mirror of the capital account. You

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Speaker 2: can put all the tariffs you want on, You're not

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Speaker 2: going to change the current account until you change the

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Speaker 2: capitol account.

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Speaker 1: Bottle it. What you just heard was an absolute perfect

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Speaker 1: dissertation from one of our leading students of the supply side.

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Speaker 1: I can't say enough. Go back and listen to that

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Speaker 1: two or three times. Glenn Hubbard on the linkage of

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Speaker 1: imports to exports, and he absolutely crushes the Trump certitude

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Speaker 1: of the current account deficit. Just gold there from Glenn Hubbard.

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Speaker 1: I'll the auditorialize always on my short list of qualified

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Speaker 1: Federal Reserve candidates. Francis Donald is with RBC, the Royal

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Speaker 1: Bank of Canada. Francis Donald here again on tariffs.

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Speaker 3: The full impact, the full story, the full study of tariffs.

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Speaker 3: I don't think we're going to feel comfortable saying how

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Speaker 3: meaningful this was on the US economy until late into

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Speaker 3: twenty twenty six. Why, Because there's a significant process in

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Speaker 3: play here. There was massive front loading into the economy.

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Speaker 3: Inventories are very very high. Those inventories need to be

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Speaker 3: depleted before we start seeing imports at those higher tariff levels,

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Speaker 3: then you have to make an assumption of who's going

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Speaker 3: to end up paying for that. Is it going to

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Speaker 3: be producers or the importers themselves? How much of that

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Speaker 3: cost is going to get passed on to the consumer

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Speaker 3: at the end of the story. So there are two

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Speaker 3: most important macro questions in play right now for an

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Speaker 3: economist is how long does it take for inventories to

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Speaker 3: be depleted? We think about five months? Mary greatly which

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Speaker 3: sector you're in? And how much is going to get

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Speaker 3: passed on to the consumer? And if I am a tom,

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Speaker 3: let me push back, I hear a lot. I don't

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Speaker 3: think consumers are going to take the brunt of this

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Speaker 3: of producers or businesses are going to absorb the entirety

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Speaker 3: of it. Is that really bullish? Do we really like

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Speaker 3: the story that businesses are going to see all of

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Speaker 3: the tariff impact that they won't pass it on to

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Speaker 3: the consumer, Because if businesses are taking on that tariff impact,

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Speaker 3: that means margin compression for them and they're going to

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Speaker 3: have to cut costs an other way.

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Speaker 1: Francis Donald in market economics, what a great juxtaposition there.

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Speaker 1: You have the academic economics of Glenn Albard, and they're

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Speaker 1: the market economics of Francis Donald of RBC. I love

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Speaker 1: how she goes to the X axis. She's taking the

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Speaker 1: tariff impact way out from OMG, what happens in July

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Speaker 1: out into late this year or even into next year.

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Speaker 1: Very few are talking up that angle on podcasts nationwide

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Speaker 1: on Apple, on Spotify, indeed worldwide on Spotify. Thank you

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Speaker 1: so much for that, particular in the Philippines, in the

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Speaker 1: Pacific RIM, and on YouTube podcasts. It's single best idea.

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Speaker 2: M m m hm