WEBVTT - State Attorneys General Challenge Musk and DOGE’s Authority 0:00:02.520 --> 0:00:08.039 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:12.680 This is Bloomberg Business Week Insight from the reporters and 0:00:12.800 --> 0:00:16.800 editors that bring you America's most trusted business magazine, plus 0:00:17.000 --> 0:00:20.799 global business, finance and tech news. The Bloomberg Business Week 0:00:20.840 --> 0:00:25.800 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:26.600 --> 0:00:26.800 Well. 0:00:26.840 --> 0:00:29.120 Of the more than ninety lawsuits filed against the Trump 0:00:29.120 --> 0:00:33.000 administration in the first month, more than twenty directly involved DOGE, 0:00:33.040 --> 0:00:36.479 of course, the Department of Government efficiency. These cases challenge 0:00:36.520 --> 0:00:40.559 Elon Musk's position, DOJ's structure and who is getting access 0:00:40.600 --> 0:00:43.880 to internal agency systems, some of which include the personal 0:00:43.880 --> 0:00:47.160 information sensitive payments data of US citizens. You might recall 0:00:47.240 --> 0:00:50.240 just last week a group of nineteen mostly Democratic controlled 0:00:50.280 --> 0:00:54.640 states suing the Trump administration over doje's access to sensitive data. 0:00:54.920 --> 0:00:58.200 When their first motion are one emotion, I should say 0:00:58.240 --> 0:01:02.040 for a preliminary injunction to extend and existing restraining order 0:01:02.440 --> 0:01:04.959 on the team. So let's talk about this in all 0:01:04.959 --> 0:01:08.040 the activity that's going on among. 0:01:07.760 --> 0:01:09.039 Those involved in those suits. 0:01:09.120 --> 0:01:11.520 Is our next guest we welcome in studio, Connecticut State 0:01:11.560 --> 0:01:14.399 Attorney General William Tongue. General tong great to have you 0:01:14.480 --> 0:01:17.880 here in studio. There's a lot going on in terms 0:01:17.920 --> 0:01:23.559 of lawsuits by democratic controlled states, given all of them 0:01:23.720 --> 0:01:28.160 that are challenging activities of desks, modes, Team, Dose, Team, 0:01:28.280 --> 0:01:30.240 what do you think is the most important for Americans 0:01:30.280 --> 0:01:30.680 and why? 0:01:31.200 --> 0:01:34.520 So? Thanks Carol and Tim for having me here. What's 0:01:34.560 --> 0:01:39.200 most important is that democratic state attorneys general are taking 0:01:39.200 --> 0:01:42.120 action to protect our states. You know, no matter who 0:01:42.160 --> 0:01:45.759 the president is, it's my job to protect Connecticut families. 0:01:45.840 --> 0:01:47.840 And right now they're exposed. 0:01:48.160 --> 0:01:51.280 You know, all about money that essentially should come to 0:01:51.280 --> 0:01:53.640 the states or what in particular. 0:01:53.200 --> 0:01:58.920 Money are social security numbers, banking information, important private information 0:01:59.160 --> 0:02:01.840 that's not just in the US Treasury that may be 0:02:01.920 --> 0:02:04.200 at the Department of Education, that may be at the irs. 0:02:04.880 --> 0:02:09.240 Right an unelected billionaire and his army of hackers and 0:02:09.320 --> 0:02:12.760 want to be stormtroopers are now tearing up the federal government. 0:02:13.160 --> 0:02:17.960 Nobody elected them. There's no authority or statutory basis to 0:02:18.040 --> 0:02:19.880 give them this power to go in and tear up 0:02:19.880 --> 0:02:22.120 the federal government. It's as if I said to you, Carol, 0:02:22.360 --> 0:02:25.680 you know what is Donald Trump came down here and said, Carol, 0:02:25.720 --> 0:02:28.440 you're great. I'm going to put you in the most 0:02:28.440 --> 0:02:32.359 secure and nuclear weapons facility in the US Armed Forces. 0:02:32.520 --> 0:02:34.760 I'm going to give you the password. Just log in 0:02:34.800 --> 0:02:37.240 and have at it. Would anybody have a problem with that? 0:02:37.480 --> 0:02:40.280 Is it what's being done, who's doing it, or that 0:02:40.320 --> 0:02:42.720 there is no transparency to it. 0:02:42.480 --> 0:02:45.560 It's all of that, and it's the damage right now. 0:02:45.639 --> 0:02:51.320 You know, when he gained access to Treasury's central payment system, 0:02:51.360 --> 0:02:54.880 the Bureau of Fiscal Services, he had control one guy 0:02:55.080 --> 0:02:57.839 and again his army of hackers to cut off Social 0:02:57.840 --> 0:03:03.079 Security payments, veterans benefit. Right They're already canceling contracts at 0:03:03.080 --> 0:03:07.480 the Department of Education. It's real world impact right now. 0:03:07.600 --> 0:03:12.080 Money is not flowing to states. The Medicaid portal was closed, 0:03:12.080 --> 0:03:17.240 the head Start portal was closed. Important grants and federal 0:03:17.280 --> 0:03:23.120 funding for transportation products, electric vehicles, climate related investments, all 0:03:23.160 --> 0:03:25.880 of those depending on the day and depending on the hour, 0:03:25.960 --> 0:03:27.160 they're open or they're closed. 0:03:28.360 --> 0:03:31.120 General Elon Musk did speak during a cabinet meeting or 0:03:31.120 --> 0:03:34.080 ahead of a cabinet meeting. We took those comments live. 0:03:34.200 --> 0:03:38.120 He said that DOS is helping fix government computer systems. Overall, 0:03:38.160 --> 0:03:40.720 DOGE goal is to address the deficit. What would you 0:03:40.720 --> 0:03:42.680 say to the folks out there listening or watching right now, 0:03:42.680 --> 0:03:46.520 who said this is what Americans voted for. They voted 0:03:46.560 --> 0:03:51.840 for more efficiency, They voted for spending government spending to 0:03:52.240 --> 0:03:55.880 go to be reduced, and as the President says, a 0:03:55.960 --> 0:03:58.880 reduction and again his words, waste, fraud, and abuse. 0:03:58.960 --> 0:04:02.520 Yeah, they didn't vote for mass unemployment. They didn't vote 0:04:02.560 --> 0:04:07.320 for mass layoffs. They didn't vote for an unelected billionaire 0:04:07.480 --> 0:04:11.000 to wreck families in Connecticut and across this country. And 0:04:11.040 --> 0:04:13.720 if you know, it's not just a federal employee in 0:04:13.720 --> 0:04:17.320 Alexandria or Virginia. And by the way, that's important too. 0:04:18.000 --> 0:04:22.080 If mom or dad gets fired tomorrow, many families, even 0:04:22.120 --> 0:04:24.960 families that do well and listen to this show, you know, 0:04:25.160 --> 0:04:28.360 they live thirty days out or check to check, and 0:04:28.960 --> 0:04:32.200 that family may have relatives in Connecticut. They are federal 0:04:32.200 --> 0:04:35.600 workers in Connecticut. There are nonprofits in Connecticut that are 0:04:35.680 --> 0:04:40.800 laying people off right now because they rely on anticipate 0:04:40.880 --> 0:04:43.279 federal funding that is not flowing and they have to 0:04:43.320 --> 0:04:48.680 make decisions amidst all of this uncertainty. And so families, 0:04:49.960 --> 0:04:54.800 children are being hurt right now. And it's my job, 0:04:55.160 --> 0:04:56.920 as Connecticut's turning general to protect them. 0:04:56.920 --> 0:04:59.200 Do you have specific examples of how many workers have 0:04:59.200 --> 0:05:01.520 been affected in can etiquette, how families have been hurt 0:05:01.560 --> 0:05:03.800 in Connecticut. What can you point to as sort of 0:05:03.800 --> 0:05:04.600 real world effects. 0:05:04.600 --> 0:05:08.240 So, for example, there are highway programs right now that 0:05:08.680 --> 0:05:12.479 aren't proceeding, that aren't going forward because funding from the 0:05:12.520 --> 0:05:16.719 Department of Transportation is not flowing. Remember, government isn't just 0:05:16.760 --> 0:05:18.960 a big employer. It's one of the biggest employers. It's 0:05:18.960 --> 0:05:23.200 also one of the biggest investors, spenders, and customers. And 0:05:23.240 --> 0:05:26.760 if the federal government is not there to buy, invest 0:05:27.560 --> 0:05:30.400 to be a customer, then projects don't happen. And that 0:05:30.480 --> 0:05:33.640 impacts not just state government, not just the federal government, 0:05:33.800 --> 0:05:37.040 but all of the businesses, small businesses run by people 0:05:37.080 --> 0:05:41.560 in Connecticut, small business people who rely on that part 0:05:41.600 --> 0:05:42.320 of the economy. 0:05:42.520 --> 0:05:44.919 Some would argue, though, just because it's the biggest doesn't 0:05:44.960 --> 0:05:47.360 mean it's the best or being run the most efficiently. 0:05:47.560 --> 0:05:48.640 So what do you say to that. 0:05:48.800 --> 0:05:52.320 Yeah, so everybody, not just at the federal level, but 0:05:52.360 --> 0:05:55.400 at the state level, should be working on making government 0:05:55.839 --> 0:05:58.640 more efficient. And I don't disagree with that. I don't 0:05:58.640 --> 0:06:01.440 think anybody does. But number one, you got to do 0:06:01.480 --> 0:06:03.840 it in compliance with the law. You have to do 0:06:03.880 --> 0:06:07.239 it in a way that's safe, that maintains the safety, 0:06:07.240 --> 0:06:10.440 for example, of our personal information. Just because you want 0:06:10.480 --> 0:06:13.520 to make treasury more efficient doesn't mean you can affect 0:06:13.560 --> 0:06:17.080 the largest data breach in American history and expose all 0:06:17.120 --> 0:06:20.080 of our social security numbers and god knows what happens 0:06:20.080 --> 0:06:22.120 to that. Does that end up on the dark web, 0:06:22.480 --> 0:06:24.440 and then we all become victims of scams? And by 0:06:24.440 --> 0:06:25.919 the way, that all comes back to me as the 0:06:25.920 --> 0:06:29.120 state attorney general when my phone starts ringing off the hook. 0:06:29.640 --> 0:06:33.240 So I guess the question is if there is if 0:06:33.279 --> 0:06:36.080 the government is indeed the federal government, if there are 0:06:36.120 --> 0:06:40.920 inefficiencies there, spending does need to be cut, what would 0:06:40.960 --> 0:06:42.279 you propose is the right way to do it? 0:06:42.320 --> 0:06:45.920 That Congress exercises its power to do that. The Constitution 0:06:46.080 --> 0:06:49.320 is very clear, under the spending Clause of the US Constitution, 0:06:49.600 --> 0:06:55.760 it's Congress's prerogative to decide how the nation's resources get spent. Okay, 0:06:55.839 --> 0:06:59.640 And so Congress needs to do its job. 0:06:59.720 --> 0:07:02.040 And if Congress not doing its job right now, and 0:07:02.440 --> 0:07:05.560 are do you feel like it's certainly not along party lines. 0:07:06.120 --> 0:07:10.240 Congress in many respects feels broken. But you know, one 0:07:10.280 --> 0:07:12.800 good example of how broken it is is that Congress, 0:07:13.160 --> 0:07:16.480 it seems, in this budget proposal, proposes to cut Medicare 0:07:16.840 --> 0:07:19.800 for the states. Are you kidding You're going to go 0:07:19.880 --> 0:07:23.600 after Medicare health care children? You know? I said when 0:07:23.640 --> 0:07:27.280 the federal funding freeze was announced that this is a 0:07:27.320 --> 0:07:29.680 war on the American people, And maybe that felt a 0:07:29.680 --> 0:07:32.760 little dramatic at the time, but what's clear now four 0:07:32.800 --> 0:07:35.680 weeks in is that it's a war on America's children, 0:07:36.040 --> 0:07:42.200 right Medicaid, healthcare, head start education funding, the Department of 0:07:42.280 --> 0:07:45.160 Education saying they're going to cut education funding not just 0:07:45.200 --> 0:07:49.239 for colleges and universities, but for all levels of education 0:07:49.360 --> 0:07:52.720 if you can't meet their standards on what's acceptable not 0:07:52.760 --> 0:07:55.880 acceptable in terms of your curriculum and your programs. This 0:07:56.080 --> 0:07:59.920 attacks kids, children, families. What is the point of that. 0:08:00.720 --> 0:08:03.120 You've been in this position since twenty nineteen, that was 0:08:03.120 --> 0:08:05.800 a few years into the first Trump administration. You were 0:08:05.840 --> 0:08:09.040 active in big legal suits against the Trump administration during 0:08:09.040 --> 0:08:11.520 that time as well. We've talked a little bit about 0:08:11.520 --> 0:08:14.720 over the last few months how this administration feels a 0:08:14.760 --> 0:08:18.280 little different because of the people they've brought in. How 0:08:18.320 --> 0:08:22.680 would you say the legal aspect of this has been different. 0:08:22.960 --> 0:08:25.280 Do you think the Trump administration was much more prepared 0:08:25.320 --> 0:08:25.960 this time around. 0:08:26.040 --> 0:08:29.560 No, it's more lawless and more unconstitutional. And yes, it 0:08:29.720 --> 0:08:33.120 feels like they were more prepared to do the wrong thing. 0:08:33.280 --> 0:08:35.319 They were more prepared to break the law. They were 0:08:35.320 --> 0:08:37.120 more ready to break the law. You look at what 0:08:37.120 --> 0:08:41.880 are breaking law and Dan bonjiorno, Oh, well, first of all, 0:08:41.920 --> 0:08:44.240 the very first thing they didn't we sued on, which 0:08:44.280 --> 0:08:50.080 is to abrogate birthright citizenship and to eliminate birthright citizenship. 0:08:50.280 --> 0:08:54.360 That is utterly unlawful and constitutional, unconstitutional. Look at the 0:08:54.360 --> 0:08:57.720 fourtheth Amendment and what the words the fourth Amendment say. 0:08:57.840 --> 0:09:00.679 They're very clear. If you're born on a mayor American soil, 0:09:00.920 --> 0:09:05.280 you're an American citizen period. If not for the fourteenth Amendment, Tim, 0:09:05.320 --> 0:09:08.360 I'm not sitting here. I'm an American citizen by right 0:09:08.400 --> 0:09:10.880 of my birth. And it's as if Carol as if 0:09:10.920 --> 0:09:14.680 a democratic president, let's say some future presidents said okay, 0:09:14.720 --> 0:09:20.720 you know what, no Americans should carry firearms. It's that unconstitutional. 0:09:20.760 --> 0:09:23.640 People would lose their minds if some politicians said that, 0:09:23.880 --> 0:09:26.440 and Donald Trump is doing that with birthright citizens. 0:09:26.120 --> 0:09:28.480 General, Town what do you think will happen to Trump's 0:09:28.520 --> 0:09:31.520 birthright Citizenship executive order and his plan to also ban 0:09:31.679 --> 0:09:33.319 transgender people from the military. 0:09:34.000 --> 0:09:36.040 I think his effort will fail, and I think the 0:09:36.080 --> 0:09:38.960 Supreme Court will do the right thing and that it 0:09:39.000 --> 0:09:42.240 will read the Fourteenth Amendment to say and mean what 0:09:42.280 --> 0:09:44.360 it says, which is that if you're born in America, 0:09:44.440 --> 0:09:45.160 you're an American. 0:09:46.040 --> 0:09:49.440 Is that the ultimate test of the president's policies? Do 0:09:49.720 --> 0:09:52.760 we continue to see legal challenges to the extent that 0:09:52.920 --> 0:09:54.920 pretty much everything just goes to the Supreme Court. 0:09:55.600 --> 0:10:00.200 Look, we every middle schooler in America knows that we 0:10:00.240 --> 0:10:03.440 have a system of checks and balances. Without checks and balances, 0:10:03.520 --> 0:10:08.520 there's no America right there. If the president has unchecked power, 0:10:08.880 --> 0:10:13.960 then Congress becomes optional, our rights become optional, States become optional, 0:10:14.440 --> 0:10:17.560 and so checks and balances. These lawsuits are about checks 0:10:17.600 --> 0:10:21.240 and balances. Congress right now isn't a very effective check, 0:10:21.600 --> 0:10:25.280 and so states state attorneys general we are a check 0:10:25.520 --> 0:10:28.840 through the courts, through the judiciary, through the federal courts 0:10:28.880 --> 0:10:32.080 on a president who doesn't respect and follow the law. 0:10:33.760 --> 0:10:36.599 You know, it's interesting. There definitely have been some protests 0:10:36.640 --> 0:10:41.080 at you know, community meetings with members of Congress. But 0:10:41.200 --> 0:10:44.000 going back to that, as you say, Congress is there 0:10:44.040 --> 0:10:47.440 to enact the law right and help make decisions. But 0:10:47.559 --> 0:10:53.160 people in general, the president is still popular. People agree 0:10:53.160 --> 0:10:55.959 with what he's doing. So I go back to kind 0:10:56.000 --> 0:11:00.959 of Tim's question. If you look at Americans, put president and. 0:11:00.920 --> 0:11:01.960 He won the popular vote. 0:11:02.000 --> 0:11:03.560 This time, he won the popular vote. 0:11:03.600 --> 0:11:06.600 He won it all, and so there are a lot 0:11:06.600 --> 0:11:08.839 of Americans who think this is the right direction for 0:11:09.840 --> 0:11:10.320 the country. 0:11:10.360 --> 0:11:12.160 I guess I don't want to quibble with you know, 0:11:13.440 --> 0:11:17.400 whether he's popular or not. I think he's underwater according 0:11:17.400 --> 0:11:20.280 to most polls, meaning less than fifty percent. I think 0:11:20.320 --> 0:11:22.960 it's pretty clear that this country has split pretty evenly, 0:11:23.880 --> 0:11:27.439 fifty to fifty. It was a very close presidential election. 0:11:28.000 --> 0:11:32.319 I don't think most Americans who voted for Donald Trump 0:11:32.360 --> 0:11:36.040 I think. I don't think most Americans expect him to 0:11:36.080 --> 0:11:39.240 break the law and to take the Constitution and set 0:11:39.280 --> 0:11:42.400 fire to it. I don't think anybody. And this is 0:11:42.440 --> 0:11:45.680 why I think Elon Musk and again his army of 0:11:46.200 --> 0:11:50.600 hackers are very unpopular because nobody said, turn the keys 0:11:50.679 --> 0:11:53.760 over to somebody that we didn't vote for, give them 0:11:53.760 --> 0:11:56.840 the password, give them the codes, and have at it. 0:11:56.920 --> 0:12:00.800 Do whatever you want and hurt states and people directly 0:12:01.160 --> 0:12:04.960 right now. The damage is being done right now. If 0:12:05.679 --> 0:12:09.520 the state of Connecticut is working on its state budget 0:12:10.120 --> 0:12:12.520 for the next two years right now, we'll finish that 0:12:12.600 --> 0:12:16.360 work in early June. If they blow a huge hole 0:12:16.520 --> 0:12:19.640 in federal funding, we're in big trouble. And many states 0:12:19.679 --> 0:12:21.480 on the same position. And I would say something, by 0:12:21.520 --> 0:12:22.640 the way, really correctly. 0:12:22.880 --> 0:12:23.080 Two. 0:12:23.160 --> 0:12:26.400 Yeah, red states are much bigger takers of federal funding. 0:12:26.480 --> 0:12:28.040 No, it's a really good point we got to leave 0:12:28.040 --> 0:12:30.280 with there. General Tom, thank you so much. This is 0:12:30.320 --> 0:12:31.360 Bloomberg Business Week. 0:12:32.120 --> 0:12:35.719 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:35.760 --> 0:12:39.240 live weekday afternoons from two to five pm Eastern. Listen 0:12:39.240 --> 0:12:42.800 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:12:42.960 --> 0:12:45.120 or watch us live on YouTube. 0:12:45.679 --> 0:12:48.080 Inbusters in US government bonds, starting to bet that the 0:12:48.120 --> 0:12:50.960 FED will soon need to pivot from worrying about sticky 0:12:51.000 --> 0:12:54.920 inflation to freting about slowing US economic growth. That sentiment 0:12:54.960 --> 0:12:57.360 helped drive treasure yields to their lowest levels of the year. 0:12:57.360 --> 0:13:00.880 We saw the tenure dipping to four point two seven percent. 0:13:00.920 --> 0:13:02.200 I was going to pull it up just to see 0:13:02.200 --> 0:13:05.400 where we are right now. We're at four twenty five, 0:13:05.480 --> 0:13:07.800 so we're even below that, so we continue to see 0:13:08.200 --> 0:13:11.160 yields dipping lower. Strategists over at Morgan Stanley say the 0:13:11.200 --> 0:13:13.679 tenure has scope to fall back below four percent, a 0:13:13.760 --> 0:13:17.440 key level if the prevailing view on the FED shifts somewhat. 0:13:17.559 --> 0:13:19.200 So we wanted to talk a little bit more tim 0:13:19.520 --> 0:13:20.679 right about fixed income. 0:13:20.920 --> 0:13:22.640 Yeah, So from more on fixed income, we head out 0:13:22.640 --> 0:13:24.679 to San Francisco, and that's where we find Karen vera 0:13:24.760 --> 0:13:27.080 Perry head if I shares fixed income strategy over at 0:13:27.120 --> 0:13:29.560 a Blackrock. Karen, good to have you on with us, 0:13:29.640 --> 0:13:32.079 especially on a day when really everyone's obsessed about the 0:13:32.160 --> 0:13:34.960 US equity market, about the results of Nvidia coming at 0:13:35.040 --> 0:13:37.920 yes four twenty Wall Street time. What do you focus 0:13:37.960 --> 0:13:39.160 on on a day such as this. 0:13:40.840 --> 0:13:43.960 We like to look across the markets and see where 0:13:44.280 --> 0:13:47.079 what's happening in fixed income. So, as you pointed out, 0:13:47.080 --> 0:13:50.320 we're seeing the tenure at the lows for the entire year. 0:13:50.679 --> 0:13:53.520 If you recall back in September, tenure yields were at 0:13:53.559 --> 0:13:56.640 three sixty five, and they rose pretty quickly with the 0:13:56.679 --> 0:13:58.520 assumption that we're going to get a little bit higher 0:13:58.559 --> 0:14:01.360 inflation levels and more growth, and then this week that 0:14:01.400 --> 0:14:05.360 thesis has moved back down. So concerns about growth inflation 0:14:05.440 --> 0:14:09.080 has been really sticky here. So we're just watching what's 0:14:09.080 --> 0:14:12.120 going on across the yield curve as well as in 0:14:12.640 --> 0:14:15.280 the corporate bond market. We've really seen IG spreads holding 0:14:15.400 --> 0:14:17.920 tight around eighty two basis points, but we have seen 0:14:18.120 --> 0:14:20.200 high yield this week come off a little bit in 0:14:20.200 --> 0:14:21.200 the two seventy range. 0:14:21.240 --> 0:14:23.360 So does something like an Nvidia in terms of what 0:14:23.400 --> 0:14:25.920 we get. I mean, there's obviously been so much on 0:14:25.960 --> 0:14:29.000 the equity side of thing, the things the AIU four 0:14:29.040 --> 0:14:30.760 here that we've talked about over the last two years, 0:14:30.800 --> 0:14:34.160 although Nvidia kind of unchanged a little bit lower on 0:14:34.200 --> 0:14:35.960 the year here in twenty twenty five. But is there 0:14:36.000 --> 0:14:38.520 anything that you look for and clues in terms of 0:14:38.520 --> 0:14:41.160 what the company might say that might impact your world. 0:14:42.640 --> 0:14:45.120 I think the biggest thing is the market really wants 0:14:45.160 --> 0:14:48.240 the earnings to be very strong, and I think the 0:14:48.560 --> 0:14:50.720 main point that people should think when they're investing in 0:14:50.760 --> 0:14:53.400 sectors like this is they want to remain diverse. 0:14:53.440 --> 0:14:53.600 Five. 0:14:53.640 --> 0:14:55.320 You don't want to just have all your eggs in 0:14:55.320 --> 0:14:57.960 one basket. If tech it some of the other themes 0:14:58.880 --> 0:15:00.600 don't hold up, and I think think this is where 0:15:00.640 --> 0:15:02.640 we are seeing really strong flows coming back in a 0:15:02.720 --> 0:15:06.120 fixed income specifically in fixed income ETFs. We've had seventy 0:15:06.200 --> 0:15:08.760 billion dollars of inflows this year, which is the strongest 0:15:08.760 --> 0:15:11.440 start we've had for many years. And I think investors 0:15:11.480 --> 0:15:14.320 are looking to diversify portfolios away from some of the 0:15:14.320 --> 0:15:16.880 equity markets and make sure that they have some hedges 0:15:16.880 --> 0:15:17.520 built in there. 0:15:18.280 --> 0:15:21.520 Okay, well, well, speaking of hedges, I'm curious about what 0:15:21.560 --> 0:15:24.240 you see as sort of the mix for ann an 0:15:24.240 --> 0:15:26.840 investor diversified and one of your friends right now, when 0:15:26.880 --> 0:15:29.880 you think about corporates, when you think about government paper, 0:15:30.560 --> 0:15:34.080 when you think about what's happening with corporates, like, what's 0:15:34.120 --> 0:15:34.720 the mix for you? 0:15:36.160 --> 0:15:39.760 I think we're recommending people remain a little bit underweight duration. 0:15:40.040 --> 0:15:43.720 So if you think about it, over the last few decades, 0:15:43.760 --> 0:15:47.400 we've seen slowly the overall duration in the market increasing 0:15:47.480 --> 0:15:50.240 just with more and more long bond issuance. So we're 0:15:50.240 --> 0:15:52.920 seeing that sweets sweet spots still see the belly of 0:15:52.920 --> 0:15:54.880 the curve that three to call it, three to seven 0:15:54.960 --> 0:15:57.520 year point on the curve. So as people are building 0:15:57.520 --> 0:16:00.560 in portfolios are also building in more income. So we've 0:16:00.560 --> 0:16:04.440 seen about sixteen of the top twenty five flows into 0:16:04.560 --> 0:16:07.640 ETFs this year are coming into sectors that aren't in 0:16:07.720 --> 0:16:11.280 the Bloomberg Barkley's aggregate, So they're coming into sectors like 0:16:11.400 --> 0:16:15.080 floating rate, like cash like so people are keeping things 0:16:15.120 --> 0:16:18.400 really short. Tips have been popular this year, and even 0:16:18.520 --> 0:16:21.800 funds that have more incumbents to them. So as you're 0:16:21.840 --> 0:16:25.040 constructing portfolio, is thinking about having some of those those 0:16:25.080 --> 0:16:26.640 asset classes that are going to hold up a little 0:16:26.640 --> 0:16:28.920 bit better if we do see a lot of interest, right, 0:16:28.960 --> 0:16:29.880 volatility on the long. 0:16:29.800 --> 0:16:32.640 End sounds kind of conservative to me. What's your read 0:16:32.680 --> 0:16:33.720 on it? This is your world? 0:16:33.960 --> 0:16:36.360 Would you say those flows into those types of funds, 0:16:36.400 --> 0:16:39.600 whether it's tips, concerns about inflation, or whether it's more 0:16:39.640 --> 0:16:43.480 cash short term duration that it's investors saying had a 0:16:43.520 --> 0:16:45.880 good strong two years, certainly just on the equity side 0:16:45.880 --> 0:16:48.800 of things, if you look at that as a benchmark 0:16:48.800 --> 0:16:50.880 that maybe I just need to play it safe for 0:16:50.880 --> 0:16:52.760 a while and let the dust settle. 0:16:53.760 --> 0:16:56.360 Yeah, Carol, that's really interesting. We've seen about a trillion 0:16:56.440 --> 0:17:00.000 dollars coming into money market funds over the past twelve months. 0:17:00.200 --> 0:17:03.040 So we see about almost billion dollars in money market funds, 0:17:03.320 --> 0:17:05.520 so I think people are having a portion of it 0:17:05.880 --> 0:17:09.080 keeping that really conservative and really safe. We actually just 0:17:09.160 --> 0:17:13.920 launched two different money market fund ETFs that enable investors 0:17:13.960 --> 0:17:17.760 to access those money market two A seven style funds 0:17:17.800 --> 0:17:20.320 but in an ETF ropper, and I think we are 0:17:20.359 --> 0:17:22.359 going to see people who are really sitting in the 0:17:22.400 --> 0:17:24.200 front end of the curve and being really conservative of 0:17:24.200 --> 0:17:24.959 those allocations. 0:17:24.960 --> 0:17:28.040 Okay, so you launched two new funds because the demand 0:17:28.119 --> 0:17:28.920 was they are correct. 0:17:29.800 --> 0:17:32.200 Absolutely, We've seen a lot of people who are unhappy 0:17:32.240 --> 0:17:34.359 with some of their sweep options and they just want 0:17:34.400 --> 0:17:36.320 more choice when it comes to their money market funds. 0:17:36.400 --> 0:17:38.760 Hey, so, Karen, where's money going out of in the 0:17:38.760 --> 0:17:42.960 fixed income world, at least within your I shares universe universe. 0:17:43.160 --> 0:17:45.680 We're really we're still seeing kind of a barbell take 0:17:45.720 --> 0:17:47.720 place where we're seeing some front end and some long 0:17:47.800 --> 0:17:51.560 end people are moving to that belly of the curve, 0:17:51.640 --> 0:17:55.400 albeit very slowly. Our merging markets is actually an area 0:17:55.400 --> 0:17:58.240 that we've seen outflows this year. I think, just with 0:17:58.480 --> 0:18:01.320 you some of the concerns with what's happening with tariffs 0:18:01.320 --> 0:18:04.360 and overseas and growth rates. We've really seen people stick 0:18:04.359 --> 0:18:06.160 close to home, with a lot of flows into treasuries 0:18:06.200 --> 0:18:06.560 as well. 0:18:06.760 --> 0:18:09.520 Do you think that changes if these tariffs are put 0:18:09.560 --> 0:18:12.200 into effect or not put into effect, Like what moves 0:18:12.240 --> 0:18:14.520 will we see depending on Trump policy from Washington. 0:18:15.600 --> 0:18:17.880 I think we'll see people stay really conservative. I think 0:18:17.880 --> 0:18:19.440 people aren't going to aren't going to be hesitant to 0:18:19.480 --> 0:18:21.720 taking a lot of risks, whether it's with credit or 0:18:22.560 --> 0:18:24.560 with adding too much duration, So they're gonna they're going 0:18:24.600 --> 0:18:27.480 to keep it, keep it on the very short duration 0:18:27.640 --> 0:18:31.240 side of it. But I do think having at least 0:18:31.240 --> 0:18:34.840 some fixed income in your portfolio to offer that ballast. Look, 0:18:34.880 --> 0:18:36.800 what's just happened this week. We've had, you know, multiple 0:18:36.880 --> 0:18:40.040 days when the equity markets are down, and because bonnyields 0:18:40.080 --> 0:18:43.159 have have also the prices come up and that and 0:18:43.160 --> 0:18:45.600 that provides kind of a more balance experience. 0:18:45.200 --> 0:18:46.679 You know. In the introduction to you and right I 0:18:46.720 --> 0:18:48.880 am looking at a tenure right now at four twenty four, 0:18:49.520 --> 0:18:52.800 we have Morgan Stanley saying, uh, the ten year has 0:18:52.880 --> 0:18:54.919 go to fall below four percent if the prevailing view 0:18:54.960 --> 0:18:56.320 on the FED shifts somewhat. 0:18:57.960 --> 0:18:59.480 Do you think that's likely? 0:19:01.920 --> 0:19:04.960 I think it could come to pass, So let's just 0:19:05.000 --> 0:19:07.440 see how some of the data looks. What I'm looking 0:19:07.440 --> 0:19:10.600 forward to is the Summary of Economic Projections, so that's 0:19:10.840 --> 0:19:12.840 out at the next FED meeting on March nineteenth, so 0:19:12.840 --> 0:19:16.280 we'll see how they scope out their views on inflation 0:19:16.480 --> 0:19:20.200 as well as the employment situation. Right now, the FED 0:19:20.240 --> 0:19:23.240 Fund's futures market is pricing in that overnight rate getting 0:19:23.240 --> 0:19:25.200 down to three seventy five by the end of the year, 0:19:25.600 --> 0:19:28.359 and I think how quickly they do that is the question. 0:19:28.800 --> 0:19:30.159 And at this point it looks like they're going to 0:19:30.160 --> 0:19:32.320 be on pause till later in the year. 0:19:32.440 --> 0:19:34.359 Karen, is it safe to say, I am curious what 0:19:34.400 --> 0:19:37.359 your view is In terms of last FED meeting, it 0:19:37.760 --> 0:19:41.000 was more still concerned about inflation, but you more are 0:19:41.040 --> 0:19:43.920 starting to become more concerned about US growth slowing down 0:19:44.359 --> 0:19:46.199 versus inflation being sticky. 0:19:47.480 --> 0:19:49.679 I think that's really the wild card. We're trying to 0:19:49.720 --> 0:19:52.240 look out for how much some of the changes in 0:19:52.280 --> 0:19:54.480 the policies are going to come through and start to 0:19:54.520 --> 0:19:57.520 impact growth. I think it's it's been really difficult to tell. 0:19:57.560 --> 0:20:01.000 So everyone will be watching the data a hawk. We'll 0:20:01.080 --> 0:20:03.360 especially be looking at some of the jobs numbers later 0:20:03.400 --> 0:20:06.159 this week and next week, and more inflation data to 0:20:06.240 --> 0:20:07.919 kind of get a better and fuller picture on that. 0:20:08.119 --> 0:20:11.639 Do you do you see the government cuts, the Department 0:20:11.680 --> 0:20:14.320 of Government Efficiency, the layoffs just thirty seconds left. You 0:20:14.359 --> 0:20:17.000 see that having a major effect on the economic data. 0:20:18.160 --> 0:20:20.760 It might take a few months to really show up 0:20:20.800 --> 0:20:23.439 in the jobs numbers. So I think there's you know, 0:20:23.480 --> 0:20:26.160 there's a lot of uncertainty around that, but I definitely 0:20:26.240 --> 0:20:28.919 think that the federal beyond pause longer if we do 0:20:29.040 --> 0:20:32.359 start to see to see some of those numbers come through, 0:20:32.440 --> 0:20:34.159 and then they're you know, they're going to be really 0:20:34.200 --> 0:20:36.280 worried about inflation as well. So we kind of have 0:20:36.320 --> 0:20:37.600