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Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

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Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com and of course on the Bloomberg. Let's

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Speaker 1: bringing Lisa Shallott shall We Morgan Stanley Wealth Management, Chief

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Speaker 1: investment Officer. Great to see Elsa at this valuation at

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Speaker 1: a round eight billion. I believe this tops out the

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Speaker 1: last funding round for Uber and the funding rounds in

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Speaker 1: private markets for many of these companies have been absolutely

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Speaker 1: fantastic for the companies and it's where a lot of

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Speaker 1: the growth has been as well. Just how much has

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Speaker 1: changed in the last couple of decades. Oh, look, I

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Speaker 1: think everything has changed and and a lot of it

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Speaker 1: has to do with how much dry powder sits in

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Speaker 1: the private markets, um, and the allure of going public

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Speaker 1: is not what it used to be. And so you know,

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Speaker 1: once upon a time in in the in the early

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Speaker 1: nineties leading up to you had companies that you know,

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Speaker 1: wanted to access capital through the public markets, you know,

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Speaker 1: literally a year or two years into their existence. Now

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Speaker 1: we're looking at companies you know that are waiting at

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Speaker 1: least a decade uh to go public, and there's many

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Speaker 1: other ways for them to fund uh those early rounds.

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Speaker 1: And it's a sheer uh function of of how developed

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Speaker 1: private uh fundraising is. So at least it was that

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Speaker 1: a good thing. Is that a healthy prospect for public markets?

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Speaker 1: The fact we've got a little bit more history that

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Speaker 1: these companies on as young and so look, that's a

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Speaker 1: fantastic positioning. On the one hand, you know, certainly we

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Speaker 1: have a lot more historical financial data to look at

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Speaker 1: in these s ones in many cases. But look, I

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Speaker 1: think it it has hurt um in many cases some

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Speaker 1: of these companies because the the public markets are very, very,

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Speaker 1: very disciplining, uh and uh it's going to be interesting

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Speaker 1: to see how this new round of unicorns actually discipline

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Speaker 1: lack of discipline tem perhaps a story of UBA over

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Speaker 1: the last several years under previous management. Yeah. I mean,

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Speaker 1: there's a PayPal announcement, the stub deal with PayPal, which

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Speaker 1: is interesting in itself, But Lisa, let's talk about a

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Speaker 1: broader thing. You said something earlier that is profound that

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Speaker 1: with the caution of Morgan Stanley, you have a caution

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Speaker 1: on technology that bears discussion color that for us when

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Speaker 1: you speak with Michael Wilson and the rest of your team. Yeah. So, look,

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Speaker 1: as we start to look at the valuations, UM, there

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Speaker 1: are a set of things that we're looking at. We're

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Speaker 1: looking at, uh, you know, the sector relative to all

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Speaker 1: other sectors. Were looking at the dispersion between growth stocks

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Speaker 1: and value style stocks. That looks very to us. We're

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Speaker 1: looking at how concentrated Uh. You know, some of the

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Speaker 1: gains are starting to be uh in these um you know,

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Speaker 1: uh supposedly unassailable business models, but as we know, uh,

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Speaker 1: no business models in a in a capital of the

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Speaker 1: world are ever unassailable. I mean, John, that's a key phrase.

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Speaker 1: Uber is unassailable business model, which is how you get

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Speaker 1: to the valuation you're talking about. Did you see the

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Speaker 1: front page of the Economists last week? It was fantastic,

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Speaker 1: It was It was a group of ponies, call them

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Speaker 1: donkeys with plastic horns attached to their heads, referring to

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Speaker 1: some of these unicorns that were coming to market. How

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Speaker 1: many of them are just donkeys dressed up as unicorns, Lisa,

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Speaker 1: because they're really not as rare anymore, This concept of

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Speaker 1: unicorn with a market cap of a billion. I mean

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Speaker 1: that is nothing these days, is it? That's correct? It

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Speaker 1: is nothing. And again that's another one of these things

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Speaker 1: that begins to smack of where everyone you know, uh

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Speaker 1: tries to put a label on themselves when uh, you know,

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Speaker 1: they're not very special and we all know they're likely

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Speaker 1: not going to be here. Um, you know ten twenty

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Speaker 1: years from now, can I make a non technical statement

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Speaker 1: that thirty nine days in lift is yet to find

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Speaker 1: a bid. It's sitting on support college. You know, it's

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Speaker 1: an editorialization with a fifty six point three four. I

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Speaker 1: don't it's been it's so at least let's talk about that.

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Speaker 1: You can have a big name come to market looks

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Speaker 1: like they're trying to get in first. Is that to

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Speaker 1: the advantage or disadvantage of the person that comes next

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Speaker 1: if that company isn't performing well in public markets in

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Speaker 1: the first couple of weeks. Yeah, look so certainly. Uh

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Speaker 1: you know, the way we've seen the performance of some

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Speaker 1: of these stocks, uh, you know presents challenges, right because

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Speaker 1: it raises questions for prospective investors. Um, they're wondering, Um,

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Speaker 1: you know, hey, is this the last bid? Am I

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Speaker 1: the last guy in. Um, So there's all these kinds

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Speaker 1: of questions that always get asked. But look, you know,

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Speaker 1: these things settle out, and I'm sure the right sharing

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Speaker 1: once will too. Leasa. One thing I've heard a lot

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Speaker 1: over the last couple of years, it's just secular growth stories.

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Speaker 1: We want exposure to the secular growth stories. The truth

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Speaker 1: is that some of these companies haven't been around long

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Speaker 1: enough to really understand the cyclicality of them as well.

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Speaker 1: Do you worry about that argument to buy a stock

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Speaker 1: as a secular growth story when it's never really had

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Speaker 1: a cyclical test. Absolutely, and I would go further. Um.

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Speaker 1: You know, one of the things that has made us

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Speaker 1: cautious is that the last decade has been a magical,

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Speaker 1: magical time for companies who want to be growth orient

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Speaker 1: and want to raise capital on That is because the

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Speaker 1: cost of capital has been so low. Uh. And the

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Speaker 1: FED has basically had everybody's back for a decade. UH.

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Speaker 1: And you know what we always say is, look, at

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Speaker 1: the end of the day, return on capital does matter. Um,

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Speaker 1: are you really going to be profitable in a world

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Speaker 1: where the cost of capital looks more like four or

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Speaker 1: five six than two? And now, for Global Wall Street,

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Speaker 1: your clinic of the day on the income's statement. And

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Speaker 1: this goes with the gentle lady from Brown University who

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Speaker 1: did better than go to dynamics and mathematics and economics.

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Speaker 1: The conflation of variable and fixed costs. To me, literally

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Speaker 1: I could write a book on it. It's that important.

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Speaker 1: In the mistakes I've made over the years. Discuss in

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Speaker 1: technology in the Unicorn is MS, John's talking about how

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Speaker 1: variable costs all of a sudden become fixed costs. Yeah, so, Tom,

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Speaker 1: you know, I think that this is the conundrum for

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Speaker 1: most analysts in the current environment. UH. The question is

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Speaker 1: if you have sat you or you believe that you've

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Speaker 1: got a concept that has a unique platform, if you

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Speaker 1: will very nice um. Uh, you know, the the key

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Speaker 1: question is, UM, what is really the cost of acquiring

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Speaker 1: a new subscriber, a new user, a new UH participant,

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Speaker 1: a new view or whatever you want to call them.

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Speaker 1: What is the marginal cost of that UM and at

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Speaker 1: what point do you actually make money. I think one

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Speaker 1: of the things that we've seen is for a lot

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Speaker 1: of these UH platforms, the cost to continue to grow

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Speaker 1: the platform and the cost of acquisition of a new user, subscriber, whatever,

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Speaker 1: UM is still actually not quote unquote scaling. So what

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Speaker 1: you really want to understand is what are the true

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Speaker 1: fixed cost and what is that inflection point at which

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Speaker 1: you start to scale and actually drop incremental profit to

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Speaker 1: So she put the dreaded s word in their scale

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Speaker 1: as well. She can leave that, Lisa Shell, thank you,

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Speaker 1: thank you, thank you, thank you so much. With Morgan

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Speaker 1: Stanley Wealth Manager, we've got George boy with us who

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Speaker 1: can advance discussion right now in the nominal and the

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Speaker 1: really hate you in just from wild Falca, the head

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Speaker 1: of fixed income reseays, George, good morning to you morning.

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Speaker 1: It has been such an interesting way where we've had

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Speaker 1: both dollar strength and yet we've also simultaneously had a

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Speaker 1: two year treasury that has rallied a yield that has

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Speaker 1: gone lower. So I'm trying to understand the dynamic that

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Speaker 1: takes the two year yield lower one and then to

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Speaker 1: how we end up with a wake of Donna in

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Speaker 1: that environment. Now there's a real there's a real conundrum

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Speaker 1: in the bond market, and you know it's it's a

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Speaker 1: strang it's a it's a challenge. It's because kind of

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Speaker 1: perfectly square it all up. I mean, I think there's

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Speaker 1: some diverging trends here that are that are really important,

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Speaker 1: and you know, the sort of the front end of

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Speaker 1: the curve, you know, first off, at the very front

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Speaker 1: end has has a rate cut still priced into it,

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Speaker 1: and I think the two year it kind of gets

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Speaker 1: pulled down by those expectations, which the market is not

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Speaker 1: willing to kind of give up on UM. But at

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Speaker 1: the same time, uh, you know, sort of the data

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Speaker 1: is starting to look look reasonably um, you know, look

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Speaker 1: looking reasonably healthy. Today's UM you know GDP report is

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Speaker 1: expected to be roughly at around a little under two

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Speaker 1: and a half percent, I think is we're the two

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Speaker 1: point three yea and and so you know, and you

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Speaker 1: have you know, inflation at just under two So there's

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Speaker 1: a very big difference when you have you know, kind

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Speaker 1: of nominal growth in the let's call it, you know,

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Speaker 1: just over four percent, uh, and you have nominal yields

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Speaker 1: at two point five percent. That's there's a big divergence there,

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Speaker 1: and I think the bond market, you know, kind of

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Speaker 1: needs to reconcile it. The main anchor, like what keeps

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Speaker 1: us there is simply the Fed. You know, the Fed

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Speaker 1: not only when devish but also talked about reducing or

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Speaker 1: or terminating or completing I should say, uh, their bond

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Speaker 1: you know, sort of the shrinkage of the balance sheet.

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Speaker 1: And and and on top of that, you know, other

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Speaker 1: governments around the world are very actively involved in managing

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Speaker 1: their own bond market and bond supply. So there's a

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Speaker 1: there's a lot of tension in the technicals, which which

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Speaker 1: really weighs on the market. What we're talking about the

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Speaker 1: nominal yield, Let's talk about the real yield the price

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Speaker 1: of inflation. So inflation running in and around percent in America,

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Speaker 1: we have real yields in America. So I just wanted

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Speaker 1: to what degree the far of money now looks at

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Speaker 1: the American situation, the adjustment and normal yields, and says,

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Speaker 1: you know what, on a hedge basis, I'm not getting

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Speaker 1: the bank for my buck that I used to. I

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Speaker 1: need to come in nake it. So now we get

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Speaker 1: this move in treasuries where you get yields law but

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Speaker 1: also get a stronger dollar because of the flow dynamic.

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Speaker 1: Is that a story here? That is a that is

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Speaker 1: a very significant story. I think the search for real

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Speaker 1: yield is a global story. And you know, we look

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Speaker 1: at our own flows. We see our own data, both

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Speaker 1: you know, kind of the proprietary data as well as

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Speaker 1: kind of the data you can measure within the market.

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Speaker 1: And and it shows that that non US investors are

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Speaker 1: flooding into the US the reach for yield. It's a

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Speaker 1: global phenomena, and and that puts powerful downward pressure on

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Speaker 1: on U s shields, and it pushes the dollar up.

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Speaker 1: And we see we see you know, sort of your

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Speaker 1: average investor in Europe or are in Asia, maybe Japan

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Speaker 1: or buying dollars on an unhedged basis. That's a major

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Speaker 1: shift in behavior over the last six months. So let's

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Speaker 1: squeeze in here the X axis as well. With part

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Speaker 1: of this enthusiasm, are we by Nick, you're going to

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Speaker 1: increase duration and maturity? Is our time vision of those

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Speaker 1: yields gonna get longer and longer. I think there are

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Speaker 1: different buyers in the market. For the overseas buyer who's

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Speaker 1: coming into the US just trying to grab yield, I

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Speaker 1: think there's a desire to stay as short on the

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Speaker 1: yield curve as you possibly can. So those investors are

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Speaker 1: not natural buyers of thirty year or long duration bonds.

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Speaker 1: And so maybe that front end rally in the two years,

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Speaker 1: just simply Overseas money coming into the US reaching out

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Speaker 1: to the two year point of the curve and being

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Speaker 1: happy to kind of sit there, whereas a domestic US

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Speaker 1: investor has to really think about kind of the duration profile,

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Speaker 1: how that matches up against their liabilities, and what is

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Speaker 1: the total nominal yield combined with the liabilities they're actually

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Speaker 1: investing against. You know that all these things kind of

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Speaker 1: converge and and it's it's about the relative change or

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Speaker 1: the relative difference in demand between each of these buyers.

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Speaker 1: The most decent uptick are the foreign buyers coming back

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Speaker 1: into the US. They've been largely made where mistakes amite

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Speaker 1: when you try and take signal from the Treasury curve.

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Speaker 1: But actually the dynamic that is driving the signal is

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Speaker 1: is not what you think. It looks like a bull

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Speaker 1: state now. It looks like it is a story of

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Speaker 1: right cuts around the count of the something else that George,

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Speaker 1: I'm a big believer in the signal. The drivers of

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Speaker 1: the signal can do very much be debated, But when

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Speaker 1: a curve steepens, it changes investor behavior. The knock on

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Speaker 1: consequence of a steep curve or a flat curve is

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Speaker 1: very material when when yield curve steeping, that encourages risk

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Speaker 1: seeking for the most part, and when they're flattening it,

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Speaker 1: it inhibits that because a typical bond investor, you know,

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Speaker 1: wants as much kind of carry and roll down typical

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Speaker 1: drivers of return. I'm getting off piece here a little,

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Speaker 1: but those are the main drivers for a fixed in convestor. George,

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Speaker 1: We've got a wonderful guest here to really give serious

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Speaker 1: perspective on technology in the two thousand nineteen. But first, John,

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Speaker 1: you know the male uber, No Amazon, no, the two

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Speaker 1: year yield, no AJAX, the mail, the mails happy, Okay,

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Speaker 1: you clean your sink. I know that's why Bank for

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Speaker 1: America writes in on Twitter. Ajax. Now I've heard it

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Speaker 1: all from Tom Kane. It's i AX. The football team

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Speaker 1: of Amsterdam can. Yeah, but it's Bay or Buyer. That's

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Speaker 1: not one of those things. It's not one of those

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Speaker 1: things that just it's not one of those things. Thank

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Speaker 1: you for listening to mato tomato situation. Okay, I'll give

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Speaker 1: you a tomato. Thank you over at Bank of America

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Speaker 1: and at five other places for your brutal your brutality

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Speaker 1: this morning. Alan Burbage is is really interesting and twisted

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Speaker 1: within the study of technology because she's not only looking

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Speaker 1: at a more tactical plan of a given company, but

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Speaker 1: also the underlying strategies within the process of technology and

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Speaker 1: also the financial of technology. She joins us down from

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Speaker 1: London and Passion Capital. Eileen, if you were to write

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Speaker 1: an essay right now on the new technology of all

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Speaker 1: these I p o s, what would be your single message? Wow,

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Speaker 1: you're always asking me great questions if you're not talking

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Speaker 1: about sports or cricket Tama. If I was going to write,

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Speaker 1: I think there's two inks to look at it. Firstly,

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Speaker 1: I would talk about some of these i os they're

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Speaker 1: coming out as we know, and direct MiSTings, right so

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Speaker 1: SAC has filed a direct listing at opposed to a

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Speaker 1: traditional I p O. But then I guess your other question,

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Speaker 1: or the real quest. Your question is what technology trends

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Speaker 1: are driving these companies in their growth? And I would

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Speaker 1: say the big essay answer on that one is cloud

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Speaker 1: based services. Yeah, well we saw that with the Amazon.

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Speaker 1: I mean there's an applic cation a cloud and a

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Speaker 1: victory for Microsoft. I believe a victory for Amazon Goldman, Sachs, Piper.

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Speaker 1: They raise their targets today, Morgan Stanley reduces their Amazon

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Speaker 1: target for Actually, but you're right about the cloud. Can

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Speaker 1: the cloud be extrapolated over to smaller players or is

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Speaker 1: the cloud the venue of the big people? I think

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Speaker 1: right now it's going to be the venue and the

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Speaker 1: theater for all the big players. So as you point

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Speaker 1: out Amazon, Microsoft, Google, Apple, they've all got big cloud beds.

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Speaker 1: But I think that you'll see with smaller players as

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Speaker 1: they can do sort of edge technologies or edge offerings

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Speaker 1: for the cloud, whether it's gonna be securely related, related,

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Speaker 1: identity managing, all other things. Eilan, You're always so prepared.

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Speaker 1: So I'm gonna throw your curveball on a Friday. Who

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Speaker 1: buys Twitter? And why do they buy Twitter? So anyone

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Speaker 1: who buy Twitter is going to be wanting to bet

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Speaker 1: on their ability to control abusive behavior, negative messaging to

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Speaker 1: appeal to advertisers, um and thinking that that company is

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Speaker 1: going to be able to increase its revenue over time. Uh,

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Speaker 1: that's a pretty long bet. It a pretty bag bet.

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Speaker 1: But as long as you have people like the President

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Speaker 1: of the United States continuing to do messaging on the platform,

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Speaker 1: maybe it's not so outlined. We've got some phone. It's

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Speaker 1: just we're gonna leave it there. Ailen Berberge, thank you

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Speaker 1: as always. I really look forward to speaking to you

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Speaker 1: again at Queen Victoria's. Didn't even get to SPA and

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Speaker 1: oh I'm sorry. Do you want to know what the

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Speaker 1: cheat guard is with Eilan? You don't ask about cricket,

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Speaker 1: you ask about arsenal? Oh really, right now we're gonna

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Speaker 1: get some expertise here. Megan Green with Manual Life is

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Speaker 1: with us right now. Megan, I don't want you to

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Speaker 1: go into the minutia of it. It's just grossly unfair.

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Speaker 1: It's a big, big number. But is it a one

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Speaker 1: off number? Yeah? So, um, I se the headlines great,

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Speaker 1: but if you look under the hood and tires a

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Speaker 1: little bit, this isn't such a positive story. And the

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Speaker 1: fact that inventories in trade boosted growth to most so

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Speaker 1: just that's not going to continue. So imports, um, we're

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Speaker 1: pulled forward last year to get ahead of the tariffs

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Speaker 1: on China, and so we expected them to be weaker

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Speaker 1: and they should continue to be weaker in a year

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Speaker 1: in your basis um throughout this year, so that'll keep

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Speaker 1: growth up a little bit, and then inventories. I think

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Speaker 1: we're a big contributor to this report, but of course

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Speaker 1: that just pulls demand forward as well. So as these

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Speaker 1: companies are stockpiling now over the rest of this year,

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Speaker 1: they're going to have to be stock and that will

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Speaker 1: be a drag on growth. You get some clarity on

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Speaker 1: what's going on in terms of investment because the durables

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Speaker 1: orders data X Defense next Air were terrible in January

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Speaker 1: and February, that then jumped in March, so there was

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Speaker 1: a question about what the real story was, and from

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Speaker 1: this report that actually was pretty weak. John there's multiple

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Speaker 1: columns here, but as uh Dr Green mentioned, exports and imports,

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Speaker 1: you've got nicely big export numbers and shockingly drop off

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Speaker 1: import numbers, which means big positive number minus a big

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Speaker 1: big minus number gives you a real wallet there. So

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Speaker 1: potentially someone off factors driving the number. And look at

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Speaker 1: how the market digests the story. So the headline number

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Speaker 1: gives you that knee jerk reaction Treasury, you will start

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Speaker 1: to move a little bit higher, that dollar strengthens. Then

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Speaker 1: you lift the lid of the GDP figure and you

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Speaker 1: see these potentially one off dynamic support and growth that

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Speaker 1: could fade as the quarters progress in the year grows

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Speaker 1: older and the market starts to remove just a little

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Speaker 1: bit of that optimism as the minutes passed by. But Megan,

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Speaker 1: we should reflect on the fact that this was a

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Speaker 1: quarter that some people thought would be the beginning of

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Speaker 1: a recession in the United States not too long ago.

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Speaker 1: It is better than was it what was expected only

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Speaker 1: several months ago, isn't it? Definitely? I mean January looks

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Speaker 1: pretty ugly, not just for the US, but offer for

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Speaker 1: China in Europe, and so there was a lot of

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Speaker 1: concern and that this would be the year that we

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Speaker 1: might go into recession. Since then, though, the data for

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Speaker 1: the US has improved, as has it for for China.

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Speaker 1: In particular, retail sales in the US started looking better

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Speaker 1: as a durable orders started looking better, which are a

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Speaker 1: good metric for UM for investment and so UM. Looking

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Speaker 1: at the Bloomberg consensus forecast, I've never seen such a

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Speaker 1: wide range as for this quarter, UM, but it does

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Speaker 1: seem like it. You know, this is really outperformed, and

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Speaker 1: I thought a recession was always pretty unlikely for this year. Megan,

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Speaker 1: I look at domestic final sales in the mix there,

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Speaker 1: there's four or five numbers there, folks, not to have

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Speaker 1: people drive off the road and they're you know, they're

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Speaker 1: just they're sort of tepid. And the nominal GDP comes

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Speaker 1: in from four point well, excuse me, from seven point

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Speaker 1: six to four point nine to four point one and

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Speaker 1: now a nominal GDP at three point eight that really

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Speaker 1: doesn't get things going. Can have FED raised rates into

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Speaker 1: a sub four percent nominal gdp? UM? Well, that's a

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Speaker 1: good question. I think real you know, real final sales

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Speaker 1: are a great UH indicator what's really going on in

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Speaker 1: terms of consumer demands tripping out inventories and trades, so

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Speaker 1: you're looking at the right thing. Nominal GDP is pretty weak.

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Speaker 1: Should the FED hike into that? Um? No, not right now?

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Speaker 1: UM and that and that's why they're on pause. But

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Speaker 1: could they hike into that going in later this year

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Speaker 1: if the data starts to improve, Yes, they could. And

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Speaker 1: unfortunately I think the FED has taken any rate hike

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Speaker 1: but completely off the table. They've painted themselves in a corner.

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Speaker 1: And I thought that was a communications disaster because as

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Speaker 1: China re accelerates, the global growth starts looking better. UH.

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Speaker 1: Data in the US could look better, and you know

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Speaker 1: the chance of a rate hike are higher than the

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Speaker 1: chance of a rate cut at this point, and it's

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Speaker 1: just going to be so difficult for the Fed to

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Speaker 1: do it because the pockets, of course will respond and

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Speaker 1: financial conditions will tighten, and it'll make it much harder

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Speaker 1: foot if to do it. It's going to be morning

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Speaker 1: in America. Megan, and the Red Sox will always play

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Speaker 1: the Detroit Tigers and beat them eleven to four, Megan

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Speaker 1: Megan when annuallye folks, of course, Megan Green working with

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Speaker 1: the John Hancock Company up in Boston as well, Megan,

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Speaker 1: if I look at the optimism that's out there, and

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Speaker 1: it has been an optimistic week, our Carl Ricka Donna

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Speaker 1: really re emphasizing, Okay, they're gonna raise rates at some point.

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Speaker 1: I get that. But there's a moment where somebody steps

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Speaker 1: up on stage and moves away from stability. What is

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Speaker 1: your experience of how the market reacts when a set

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Speaker 1: of commercial bankers paint themselves into a quarter. It's going

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Speaker 1: to be a brutal adjustment, right, Yeah, that's right. So

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Speaker 1: because the FEDS painted itself into your corner, I'm not

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Speaker 1: sure it can get back on the table, even if

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Speaker 1: if it should so, even if the data supports it.

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Speaker 1: So if that were to happen, if they were to try,

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Speaker 1: the markets would respond in a pretty violent way, I think,

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Speaker 1: And so we could expect a lot of volatility and

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Speaker 1: financial conditions with tighten massively. And that's one of the

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Speaker 1: fed's input. So it might it might make it impossible

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Speaker 1: for them to go ahead and try. Don't say impossible.

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Speaker 1: Come on, at some point, you know this is folks,

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Speaker 1: trees grow to the sky. I mean right now, in

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Speaker 1: this week and the effervescence, even with some gloomy earnings reports, Megan,

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Speaker 1: there's been a whole trees grow to the sky feeling

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Speaker 1: to this. Do they have a responsibility to come out

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Speaker 1: and move with the punch bowl off the table or

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Speaker 1: do they just wait and wait and wait, as you

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Speaker 1: allude to, I think they're gonna end up waiting for

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Speaker 1: a while. Um but I think that they should remove

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Speaker 1: some of the punch bowl. Um But, like I said,

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Speaker 1: they've set themselves up for really difficult communications challenge and

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Speaker 1: that wasn't necessary, but that's where they are. So I'm

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Speaker 1: not sure how they're going to manage to put types

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Speaker 1: back on the table without the markets um tightening financial

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Speaker 1: conditions again, Neil Data renaissance, uh macro, Neil data, private

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Speaker 1: domestic demands sluggish and Q one rising at a smaller rate,

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Speaker 1: and that was a weaker rate going back six years.

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Speaker 1: But you know, his theme is an optimist and Mr

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Speaker 1: dott It has been an optimist, is that consumer spending

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Speaker 1: is likely to rebound. Meggan Green, do you agree with

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Speaker 1: that the consumer spending will rebound? No, I don't. I

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Speaker 1: think actually consumer spending will remain fairly subdued, and that

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Speaker 1: of course is of USDKE. But that doesn't mean we're

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Speaker 1: going into a recession. In fact, I think we'll still

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Speaker 1: continue to grow above potential, which is around one percent

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Speaker 1: five percent, So I think we get exten expect growth

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Speaker 1: of two percent for the year. That's not fantastic, but

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Speaker 1: it's still about potential and you don't need the consumer

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Speaker 1: to knocket out of the park for that. Very good Maggan,

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Speaker 1: thank you so much, really really appreciate time from your

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Speaker 1: manual life clients. Thanks for listening to the Bloomberg Surveillance podcast.

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Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or

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Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom

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Speaker 1: Keane before the podcast. You can always catch us worldwide.

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Speaker 1: I'm Bloomberg Radio, a