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

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Speaker 1: David Gura. Daily we bring you insight from the best

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Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance

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Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,

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Speaker 1: on the Bloomberg Five Things That Need to Know. We're

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Speaker 1: gonna a guest fight things and talk about just two

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Speaker 1: things here with Alan Krueger. It's Professor Krueger Princeton. Let's

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Speaker 1: just do two things here within the time we've got

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Speaker 1: how's the minimum wage experiment going in Seattle? I think

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Speaker 1: the evidence is quite mixed for Seattle. The way I

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Speaker 1: read it, it looks like experience with the minimum wage

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Speaker 1: elsewhere has not had an adverse effect on um minimum

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Speaker 1: wage employers. You know, if you look at the Seattle

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Speaker 1: labor market, it's booming, and I think that makes it

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Speaker 1: a little bit harder to tease out effects of the

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Speaker 1: minimum wage. But uh, certainly in the aggregate, there's no

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Speaker 1: sign that Seattle's high minimum wage has had a negative effect.

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Speaker 1: Within this is the crushing reality that wait, if you

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Speaker 1: raise the minimum wage, the wages go up above it,

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Speaker 1: not way above it. But there's a sequential, almost bucket

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Speaker 1: brigade effect. Is that still true? There's a spillover effect

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Speaker 1: of the minimum wage there, there's no question about that.

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Speaker 1: And that's one of the challenges for one of the studies,

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Speaker 1: which cuts off. You know, if people got a raised

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Speaker 1: and got promoted and that was a result of the

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Speaker 1: minimum wage, it makes it look like it was job loss.

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Speaker 1: So I think that's a problem with one of the

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Speaker 1: studies that's gotten a lot of attention. The other two

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Speaker 1: things we need to know Freenzy and I'm gonna bring

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Speaker 1: this in, but jump into your fancy please. I love it.

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Speaker 1: Seventy thousand dollars a year, going up to eighty thousand

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Speaker 1: next year. Prinston, Hi, dad, what are you doing? Oh?

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Speaker 1: I'm taking the economics of rock music? Are you kid me?

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Speaker 1: Have you got any hate notes from parents about the

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Speaker 1: economics rock music? This is uh the UH. I have

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Speaker 1: to say, the best class I've ever taught. The students

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Speaker 1: are learning so much, they're so engaged. What better way

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Speaker 1: of teaching supply and demand uh than talking about iPods

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Speaker 1: and streaming and um, it's a great way of teaching economics.

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Speaker 1: I have to say, Yeah, And actually This is a

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Speaker 1: serious point. It wasn't Jay Z the first one to

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Speaker 1: kind of cut the middleman and going straight to Apple music, right?

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Speaker 1: I think it was on surveillance it's Z. Does this

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Speaker 1: help explain inflation dynamics? That's actually question? You know what

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Speaker 1: are the questions I got from the students is what's

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Speaker 1: going on with inflation? Um? And Uh. It's it's a

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Speaker 1: freshman course, Tom and um. It a mussel lot of writing,

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Speaker 1: which was the goal of the course. And I have

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Speaker 1: been talking about disruption and technological change of productivity growth,

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Speaker 1: and I think you know, what's going on with being

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Speaker 1: able to buy products on the internet had put some

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Speaker 1: doward pressure on inflation. I was in a meeting yesterday

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Speaker 1: with General worst Span and she turned to me and said, well,

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Speaker 1: so what do you think Krueger and Davos? And I said,

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Speaker 1: you have to go to Davos precisely because of this.

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Speaker 1: The answer is technology is an overlay is evident large

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Speaker 1: and it's a mystery, isn't it? It is? And there's

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Speaker 1: really no better place to study it than the music industry.

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Speaker 1: Think of all the technology that was, including the medium

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Speaker 1: what we're using right now, radio and the role radio

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Speaker 1: played in music. But go back to uh the gramophone

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Speaker 1: and um, Francy can't do that. You and I can

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Speaker 1: do that. I only listen well the students. The students

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Speaker 1: didn't know what I meant when I said eight track.

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Speaker 1: So in the economics world, in Francine's world across the Atlantic,

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Speaker 1: their short term, medium term, long term. In American economics,

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Speaker 1: with maybe a historic simplicity, there's cheke out, medium term,

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Speaker 1: there's a short term, and long term. In Chicago is

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Speaker 1: just do more microeconomics, and in Princeton it's like do

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Speaker 1: more history. Okay, I get all that. What does transitory mean?

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Speaker 1: Transitory isn't in any of the textbooks I would suggest

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Speaker 1: Transitory is in Chicago, transitory is in uh Princeton. When

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Speaker 1: Cherry Yellen says transitory inflation, what does that mean? Well,

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Speaker 1: the way I interpret it is that we're not on

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Speaker 1: the path that we think we're on, that the transitory detour,

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Speaker 1: but we're gonna get back to the path that we

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Speaker 1: think we're on. Is the X axis normal? Is it?

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Speaker 1: Is it? Is she thinking short term? Is she's thinking

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Speaker 1: long term? Or is it a new invention on the

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Speaker 1: X axis. I think it's a short term you know, Uh,

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Speaker 1: my interpretation to transitory, which uh the term I probably

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Speaker 1: used in some of my papers, is that we have

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Speaker 1: shocks which we think are going to fade, and because

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Speaker 1: we think the short term shocks, we can consider it

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Speaker 1: as transitory. In Francy, that would be the two back

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Speaker 1: to back press conferences mentioning wireless cell phone right, and

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Speaker 1: I understand that it's transitory unless it isn't anymore, professor.

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Speaker 1: In the UK, we had a shock, and of course

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Speaker 1: it's pound so you can argue that we have transitory

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Speaker 1: inflation here. But in the US, how do we know

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Speaker 1: that these phone bills will actually won't stay at the

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Speaker 1: same level. I mean, it's it's kind of it could

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Speaker 1: be more structural. Well, it could stay at the same level,

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Speaker 1: but what's important is the rate of change. So we

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Speaker 1: kind of absorbed the transitory shock from from prices dropping

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Speaker 1: that that that's I think the argument that one could

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Speaker 1: quite plausibly make. Also, you know, the U S economy

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Speaker 1: is pretty diverse, and as much as the Phillips curve

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Speaker 1: gets criticized, it is the cases the economy gets tighter.

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Speaker 1: Traditionally we see wage growth and we see inflation that's

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Speaker 1: been more sluggish in this recovery, but I think the

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Speaker 1: underlying dynamics are probably there. I think they've probably been

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Speaker 1: blunted by changes in the labor market, by weakness of

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Speaker 1: labor unions in the US, for example. UM But to

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Speaker 1: my mind, that looks like we're seeing some signs of

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Speaker 1: that dynamics still still operating. If we see the tax

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Speaker 1: overhaul that's been promised to come into something concrete. So

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Speaker 1: I don't know whether we see the details, But what

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Speaker 1: would that actually change. Does it change dynamics and GDP

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Speaker 1: significantly or would that also be transitory. It's a good question. Um.

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Speaker 1: I think it could have lasting impacts. Um. Of course,

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Speaker 1: it depends upon the shape of the tax changes what's

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Speaker 1: been proposed. You know, if the state local tax deduction

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Speaker 1: is eliminated, that's going to dramatically affects state local investment

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Speaker 1: in infrastructure, hiring of of UM first responders, things like that.

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Speaker 1: Other sectors which we'll get tax cut could potentially expand.

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Speaker 1: Uh So I think the tax proposal and the broad

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Speaker 1: outlines could have substantial effects on the US economy. Also,

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Speaker 1: I think we need to take into account in the

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Speaker 1: long run, the impact than the deficit. If The proposal

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Speaker 1: from the Trump administration adds two and a half trillion

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Speaker 1: dollars to US debt over over the next decade. I

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Speaker 1: think that's going to affect our borrowing costs. I think

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Speaker 1: it's going to crowd out private sector investment. When we

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Speaker 1: get to Jobs Day today, obviously it's hurricane adjusted, hurricane

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Speaker 1: aberration and the answers smooth out the moving averages? Do

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Speaker 1: you do that? Do you take three months and divided

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Speaker 1: by three? I believe it's a little too much math

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Speaker 1: for me this morning. How do you adjust to a

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Speaker 1: one off of hurricane data change? How do you How

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Speaker 1: does it pro do that? Well, first of all, I

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Speaker 1: think the first thing to look for is going to

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Speaker 1: be signs of the hurricane. Um Hurricane Katrina had a

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Speaker 1: major impact on employment. Uh, the tropical storm Sandy did

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Speaker 1: not have much of an impact unemployment. Surprisingly, So I

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Speaker 1: think you look at certain industries that are more weather affected,

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Speaker 1: and you look at regions in the country. But on

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Speaker 1: a Matthew basis, Professor Krueger that I think the trip

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Speaker 1: of the media is to take three months at averaging together.

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Speaker 1: And I'm going to suggest a pro like uses no

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Speaker 1: wait and get more data and then regress it out

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Speaker 1: to see where we are. So a guy like you

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Speaker 1: can't go out one or two months, you gotta go

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Speaker 1: out six months or twelve months of data and then

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Speaker 1: see where the trend is. A. I right on that. Well,

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Speaker 1: thanks for giving my answer that that's absolutely right, and

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Speaker 1: I think that was an A. That's amazing. I went

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Speaker 1: from a C minus up to a quality C plus.

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Speaker 1: But you know what, I what I would say is,

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Speaker 1: rather than averaging it, I would look for an ad

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Speaker 1: factor and say, for this month, what is it that

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Speaker 1: we think we need to add to exactly? Yeah, And

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Speaker 1: I guess if if you're in the markets, right, which

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Speaker 1: is the difference between the markets and maybe the pros

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Speaker 1: is that you need to take a shorter term bet

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Speaker 1: because otherwise you're gonna lose money, right, professor, Whereas if

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Speaker 1: you're an academic you can you can take the longer view.

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Speaker 1: Do you believe that the way the markets are working

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Speaker 1: are are kind of distorting our economic views? Well, I

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Speaker 1: think that's true to some extent, But the markets are

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Speaker 1: also trying to figure out how the fetes going to

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Speaker 1: interpret the job's report. And I think you know, many

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Speaker 1: investors recognized that the fed is going to take a

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Speaker 1: longer run view and try to see through the effects

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Speaker 1: of the hurricanes. I have done this before with you,

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Speaker 1: and I don't like doing it. Professor. Ku're going to

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Speaker 1: rip up the script and go to an exceptionally important

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Speaker 1: monograph you put out years ago called What Makes a Terrorist?

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Speaker 1: I read every word of it, every footnote. I was

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Speaker 1: thunderstruck at the time of how you wrote about the

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Speaker 1: people that do these terrible things. Can you take your

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Speaker 1: historic work who becomes a terrorist? Where does terror emerge?

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Speaker 1: What does terrorism accomplish? Can you take that monograph and

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Speaker 1: bring it over to domestic terrorism like what we saw

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Speaker 1: in Las Vegas? Uh? Well, thank for bringing up the book,

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Speaker 1: and you have good timing because the tenth anniversary edition

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Speaker 1: is going to come out by the end of the year,

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Speaker 1: and I wrote a new quite long introduction asking exactly

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Speaker 1: the question you asked me. How the results hold up

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Speaker 1: over the last ten years. Does this apply to domestic terrorism?

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Speaker 1: I would be hesitant to describe Las Vegas in the

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Speaker 1: same language as we talk about other acts of terrorism,

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Speaker 1: since we don't know the motives yet of this individual

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Speaker 1: and this disturbed individual. Um looking at other incidents of

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Speaker 1: domestic terrorism, both in the US and abroad. The domestic

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Speaker 1: terrorists look like they're more drawn from the middle rather

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Speaker 1: than the elites. They're not the most impoverished, the least educated.

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Speaker 1: They look like people who were on a path towards

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Speaker 1: middle class, towards college education in many cases, and then

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Speaker 1: they fell off that path and became radicalized. UM. So

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Speaker 1: it's more pushed to the middle when it comes to

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Speaker 1: domestic terrorism. Professor, how has social media changed terrorism in

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Speaker 1: the lost enderts? Uh, it has had a profound effect.

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Speaker 1: It's made it much easier for terrorist organizations to outsourced terrorism,

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Speaker 1: to recruit, uh, to basically franchise terrorism U. UM. I

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Speaker 1: think that's changed the nature of terrorist attacks. H. They're

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Speaker 1: less catastrophic in their scale um, and they're a little

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Speaker 1: bit more sporadic. So I think it's had I think

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Speaker 1: it has had a major impact. All right, how will

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Speaker 1: it change in the next ten years? Is it actually

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Speaker 1: impossible to study this, as you know, with hard data

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Speaker 1: like economics, because it has more to do with emotions

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Speaker 1: and allegiances. Well, that's a good question. It also has

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Speaker 1: to do with counter terrorism activities. UM. You know, I

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Speaker 1: think fundamentally terrorist organizations are trying to pursue some type

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Speaker 1: of a goal, and they're using the means that they

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Speaker 1: think are going to be most effective for them in

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Speaker 1: pursuing that goal. I don't think that will change, but

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Speaker 1: I think the means that they have at their disposal

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Speaker 1: could change as technology changes going forward. This has been wonderful.

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Speaker 1: It's so nice to see you. Not after you sat

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Speaker 1: having coffee. Coffee in Venice, which was the last time

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Speaker 1: You're finally back teaching. I was at a conference. Okay, well,

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Speaker 1: we're never gonna forget coffee with Alan Krueger in Venice

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Speaker 1: while we're in the sweaty confines of Manhattan. Allen Krueger,

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Speaker 1: thank you on this job. Stay always in particularly important

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Speaker 1: perspective on the American labor economy. He is with Princeton

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Speaker 1: University and look for the new UH addition. I guess

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Speaker 1: I should say what makes a terrorist? Now? In Bloomberg

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Speaker 1: Radio Bloomberg Television Worldwide, William Gross joins us. He is

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Speaker 1: with Janice Henderson as we look at markets on the move.

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Speaker 1: I know that on television, John Fare on the team

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Speaker 1: have been doing the market movement today, but yields higher dollar,

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Speaker 1: stronger Bill gross just simply is at morning in America,

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Speaker 1: well at the early morning, the beginning to be morning

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Speaker 1: here in Newport Age. I think to the extent that

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Speaker 1: your question implies wages are moving higher and that you know,

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Speaker 1: the average wage journal will make more and spend more. Um,

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Speaker 1: I think that's probably a positive. I note that the

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Speaker 1: wages tom were revised higher in terms of the last month,

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Speaker 1: as though we have a two point seven percent y

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Speaker 1: o Y and perhaps had it higher. So I think

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Speaker 1: that's good for American workers. Within this is a pretty

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Speaker 1: good revisions. I mean we revised up I guess pre

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Speaker 1: hurricane and that how does Janice Henderson and adapt and

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Speaker 1: adjust to the hurricane distraction? Well, you basically try and

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Speaker 1: throw it out for a month in terms of the

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Speaker 1: employment numbers. You know, we're negative asion mentioned in terms

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Speaker 1: of the the job growth. So you throw that out.

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Speaker 1: You look at the wages and you wonder whether or

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Speaker 1: not that to some extent was affected by distortions. Probably

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Speaker 1: not as much. And and so uh, this is definitely

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Speaker 1: a situation here at Janice with analysis of the Fed.

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Speaker 1: Looking at the FED rate hike in December. You know,

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Speaker 1: as long as financial markets ring firm, they certainly are

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Speaker 1: as long as wages begin to rise towards uh you know,

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Speaker 1: three percent, they certainly are. And I think the Fed

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Speaker 1: is slam dunk in terms of raising rates in December.

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Speaker 1: You know, John H. David Weston has given me great

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Speaker 1: charts on Bloomberg Daybreak on television. Folks of weaker Japanese. Yeah,

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Speaker 1: you've really got a jump condition to a weaker Japanese

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Speaker 1: uh yen. And the idea here of a regime change

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Speaker 1: bill gross not. You know what you're gonna do on

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Speaker 1: this Friday morning in Newport Beach, But is there going

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Speaker 1: to be a regime change within your janus unconstrained fund

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Speaker 1: because you're starting to get a little more lift and

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Speaker 1: you're starting to get a little more wage growth. Yeah,

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Speaker 1: I think, you know, unconstrained basically means that you're not

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Speaker 1: constrained in terms of duration. You can do other things

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Speaker 1: things as well. Um, you know the beauty of the

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Speaker 1: unconstrained fundness that can go negative in terms of duration.

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Speaker 1: That is basically looking for higher rates and making money

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Speaker 1: off of higher rates as opposed to vice versa. And

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Speaker 1: that's what you know we've done over the past few weeks.

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Speaker 1: Certainly in Germany, UM and now in the US. You

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Speaker 1: know we're approaching critical levels. I think Tom on that

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Speaker 1: tenure for instance, now probably at two forty, I haven't

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Speaker 1: seen it in the last minute, but now at to forty,

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Speaker 1: that we're at a two forty critical level, a long

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Speaker 1: term down trend line. Uh since the early nineteen eighties

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Speaker 1: were interest rates have formed by twenty basis points on

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Speaker 1: average per year, and we're there at two point four percent.

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Speaker 1: It basically means to me that, you know, if the

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Speaker 1: economy is strong, if wages are intern up moved, then

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Speaker 1: you know, perhaps we can break that trend line and

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Speaker 1: move above to forty. But for the moment to me,

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Speaker 1: technically that's where we stop, at least for this day.

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Speaker 1: And this is so critical, folks. The idea of Bill

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Speaker 1: Grows previously telling is two point even major of HSBC

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Speaker 1: on this morning looking for Yeah, rates could go up,

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Speaker 1: but then a damper. Let's take the word transitory. Bill

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Speaker 1: grows over from yelling and inflation over to William Gross

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Speaker 1: and you gotta run a bond portfolio. Will these higher

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Speaker 1: yields be transitory? And is it lower for longer? Whatever?

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Speaker 1: That wherever that band maybe? Well, I think we are

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Speaker 1: lower for longer. There's no doubt about that, and that

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Speaker 1: is what the Fed another Central Banks described as the

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Speaker 1: neutral real The FED funds rate supposedly now around zero

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Speaker 1: with inflation, you know, somewhere around one point five or

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Speaker 1: so um. But but I think it won't be transitory.

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Speaker 1: I think if in fact, we move above to forty

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Speaker 1: instead of to six. They remember I said that interest

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Speaker 1: rates are following by twenty basis points a year, and

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Speaker 1: at to sixty was about a year ago. But if

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Speaker 1: if we move above two point four, oh, then I

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Speaker 1: think there is a chance that this law term bull

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Speaker 1: market in bonds is broken and that the bond investors

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Speaker 1: should be on the defensive as opposed to the offensive.

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Speaker 1: That's an exceptionally important statement you've heard there from Mr

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Speaker 1: Gross in the over decade that we've spoken to us.

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Speaker 1: Let's dive into that deeper now, where I'm gonna quote

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Speaker 1: the four digits two point three eight bill with that

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Speaker 1: important statement of a regime change with a two forty print,

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Speaker 1: how do we adapt and adjust? Let's start with the

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Speaker 1: equity market correlated into bonds. Is the stock market linked

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Speaker 1: into your two point four zero percent yield world we'll share.

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Speaker 1: They're all linked. And you know, typical questions and responses, um.

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Speaker 1: You know, to those types of questions will say, well,

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Speaker 1: we're okay on the stock market until we get to

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Speaker 1: three percent on the tenure or four percent on the tenure.

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Speaker 1: I think we're inexorably linked on a much shorter term basis. Um.

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Speaker 1: You know, it's not to say that five basis points

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Speaker 1: on the tenure will mean a hundred negative points on

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Speaker 1: the Dow. But those things are connected. It's all connected. Um.

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Speaker 1: You know, a recent last night article from The Economist

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Speaker 1: in terms of the overvaluation of all assets. You know,

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Speaker 1: to my way of thinking is true. You know, the

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Speaker 1: low interest rates everywhere, and they're negative in many parts

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Speaker 1: of the world, still basically have distorted prices in terms

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Speaker 1: of equity, in terms of commercial real estate, in terms

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Speaker 1: of spreads on high yield bonds, etcetera, etcetera. And so yes,

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Speaker 1: this is critically important on the tenure to define other

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Speaker 1: asset prices. And if we move significantly higher to forty

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Speaker 1: to fifty to sixty, investors have got to understand that

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Speaker 1: the connection is a negative influence on their asset holdings.

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Speaker 1: Bill Then then one final question. You're when I want

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Speaker 1: to come back and really address this important statement for

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Speaker 1: Mr Gross folks on the idea of a regime, a

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Speaker 1: regime change at two point four zero percent. When we

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Speaker 1: do that, will we do it with light paths of

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Speaker 1: stability or will it be a lot more volatility in

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Speaker 1: those old jump conditions it made you gray years ago.

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Speaker 1: Which is it going to be? Bill? I think stability,

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Speaker 1: because not many people will believe me in terms of

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Speaker 1: the long term downtrend. They look at other things. They'll

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Speaker 1: look at the Bollinger band, and they'll look at the

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Speaker 1: you know, the near term STA tests, stochastics and so um,

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Speaker 1: and the FED will come in and try and talk

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Speaker 1: markets down. So you know, I think it will be

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Speaker 1: a gradual up move. But to my way of thinking,

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Speaker 1: if to forty to forty five, don't let me hedge

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Speaker 1: it here. But if five is broken, to me, that's

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Speaker 1: a significant sign that the long term bull market is over.

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Speaker 1: We're gonna come back with Bill Gross. You just heard

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Speaker 1: one of the most important statements I've heard from Mr Growth,

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Speaker 1: Mr Gross and well over ten years, the idea of

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Speaker 1: a regime change and the great moderation if we go

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Speaker 1: above a two forty. I'm a ten year you know,

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Speaker 1: give some wiggle room there. I don't want to nail

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Speaker 1: him right down to that. But two point three eight

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Speaker 1: up three basis points the tenure right now with the

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Speaker 1: two year yield up again another three basis points as well.

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Speaker 1: This is absolutely critical the idea of a regime change

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Speaker 1: off of a twenty year great moderation. We will do

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Speaker 1: that with Bill Gross from New York from London this morning.

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Speaker 1: This is Bloomberg with us William Gross of Janice Henderson. Bill,

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Speaker 1: what you said in our last section is so important

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Speaker 1: over this crisis and even before the crisis, it would

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Speaker 1: be irresponsible if I didn't have you recapitulated. Let me

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Speaker 1: be clear here, Bill. You go from a two sixty

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Speaker 1: and if we get to sustain to forty yield, you

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Speaker 1: would suggest that breaks the Great moderation. Yeah, above two

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Speaker 1: forty time. And let me explain that because it seems

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Speaker 1: like a lot of hocus focus. Um. You know that

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Speaker 1: the tenures started out at its peak and early eighties

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Speaker 1: with the Vulcar around, And the fact is we can

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Speaker 1: analyze this, look at it that has come down by

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Speaker 1: twenty basis points a year to this point. It got

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Speaker 1: a little bit lower a few years ago, of course,

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Speaker 1: but that was below trend line. But the trend line

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Speaker 1: was moving down at twenty basis points a year. And

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Speaker 1: why is that important. It's important because it allowed for

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Speaker 1: refinancing of mortgages, allowed for uh more attractive purchases of homes,

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Speaker 1: that allowed for corporate interest expense to go lower and

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Speaker 1: profits to go higher. It was what the economy needed

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Speaker 1: to sustain a four to five percent nominal GDP rate,

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Speaker 1: which is really what the FEDS targeting. So that was

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Speaker 1: the magic number per year. The FED didn't mandate twenty

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Speaker 1: basis points per year, but that um, you know, based

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Speaker 1: upon their their FED fund decreases and their quantitative easy purchases,

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Speaker 1: you know, is what it produced. Now they were down

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Speaker 1: to two point four percent and two point three It

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Speaker 1: seems to me that the question is can the economy

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Speaker 1: sustain itself without lower and lower interest rates? And that

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Speaker 1: will be the question if it breaks two, for investors

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Speaker 1: will be at the assumption that perhaps the economy can

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Speaker 1: survive on its own with without lower and lower interest ry.

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Speaker 1: I know Francine Lakwen London wants to get and really

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Speaker 1: take this globally. He wants to get into your bill.

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Speaker 1: But one more question for me, and then an ample

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Speaker 1: time for miss Laka. This is profoundly important what you're

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Speaker 1: saying for the FED. And all I can think of,

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Speaker 1: Bill is what you study to do in years and

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Speaker 1: years and years, be careful what you wish for. If

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Speaker 1: Janet Yellen gets a higher yield structure in a little

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Speaker 1: bit higher inflation, what's the outcome that could mess up

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Speaker 1: the central bank cart Well, the outcome is that they

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Speaker 1: go too far in terms of FED funds. And this

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Speaker 1: is where I joined with the Neil kush carry. It's

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Speaker 1: probably not the next FED chairman, but he has been

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Speaker 1: cautioning for a long time that there's a yeah, there's

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Speaker 1: a limit in terms of what the FED can do

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Speaker 1: uh and and the economy can survive because on the

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Speaker 1: other side of this argument, um into strates can't go

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Speaker 1: too high because it's highly levered and highly levered economy

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Speaker 1: UH with higher and higher interest rates, you know, runs

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Speaker 1: into problems in terms of destruction and infrast rate cover

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Speaker 1: and the like and the like, and so um you know,

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Speaker 1: a central bank can't go too high right now. Just

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Speaker 1: to add one additional point on other central banks, are

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Speaker 1: not of the same persuasion. They don't have the same

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Speaker 1: stance in terms of raising interest rates, um like the

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Speaker 1: FED will do in my opinion in December. So you

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Speaker 1: have this this cushioning effect by the e c B

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Speaker 1: and by the BOJ where they're putting in a trillion

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Speaker 1: dollars worth of money every year. And so that's why

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Speaker 1: I say that the increase will probably be gradual as

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Speaker 1: opposed to dramatic going forward. Good morning from London, Mr

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Speaker 1: Bill Gross. Will the next FED chair actually be central

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Speaker 1: bank or to the world or only to the U S? Well, Um,

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Speaker 1: I would hope to the world the U S dollars

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Speaker 1: still the global currency. And as long as it is,

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Speaker 1: you know, there's no doubt in my mind that the

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Speaker 1: interest rates in the US is set by the Fed.

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Speaker 1: On the short term side, you know, our important consideration

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Speaker 1: going forward depends on the chairperson. Of course, I think

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Speaker 1: Yellen has treated uh, you know, the fit as the

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Speaker 1: global central banker, although she won't acknowledge that. But perhaps

429
00:24:23,800 --> 00:24:28,000
Speaker 1: we'll get a different persuasion of someone like Cohen or um.

430
00:24:28,040 --> 00:24:32,480
Speaker 1: I suppose even Powell, although I'm not a Powell advocate

431
00:24:32,520 --> 00:24:35,280
Speaker 1: going forward, but they seem to be the choices that

432
00:24:35,320 --> 00:24:39,920
Speaker 1: the market is talking about. You deeput in charge? Well,

433
00:24:40,040 --> 00:24:45,119
Speaker 1: I I uh, strangely enough, I joined Jeffrey Gunlock and

434
00:24:45,520 --> 00:24:47,520
Speaker 1: this one it's not going to happen. I don't think

435
00:24:47,560 --> 00:24:51,240
Speaker 1: I won't predict it. But Neil Caskari has got great

436
00:24:51,280 --> 00:24:55,080
Speaker 1: experience in terms of the Layman crisis. We know that

437
00:24:55,160 --> 00:24:57,760
Speaker 1: he's had experience at Goldmen, he's had experience at PEMCO.

438
00:24:57,840 --> 00:25:00,480
Speaker 1: I know him for three years. He's a brilliant man. Uh,

439
00:25:00,480 --> 00:25:02,800
Speaker 1: And he's got ideas that are a little bit different

440
00:25:02,840 --> 00:25:05,879
Speaker 1: than other central bankers. He looks at the market a

441
00:25:05,920 --> 00:25:08,760
Speaker 1: little bit different from a structural standpoint as opposed to

442
00:25:09,200 --> 00:25:14,320
Speaker 1: simply a statistical Taylor model type of rule. And so yeah,

443
00:25:14,359 --> 00:25:16,960
Speaker 1: he's young, he's only been there for a year or two.

444
00:25:17,520 --> 00:25:19,159
Speaker 1: He'd be my choice, but he's not. He's not going

445
00:25:19,200 --> 00:25:22,159
Speaker 1: to read a choice, Franzy, And I'm confused, Bill, who's

446
00:25:22,160 --> 00:25:29,359
Speaker 1: a brilliant man, Jeff Gunlock or Neil cush Carry. Oh

447
00:25:29,400 --> 00:25:31,919
Speaker 1: excuse me, I wasn't quite sure that. Okay, we've got

448
00:25:32,000 --> 00:25:35,439
Speaker 1: Jeff Gunlock, and we've got Jeff Gunlock and Bill Gross

449
00:25:35,440 --> 00:25:38,119
Speaker 1: in the same page, which is always good Benny would

450
00:25:38,119 --> 00:25:41,399
Speaker 1: suggest Mr gross Sir, that you're talking your book, not

451
00:25:41,520 --> 00:25:44,720
Speaker 1: that Mr Gunlock has ever been a challenge with the

452
00:25:44,720 --> 00:25:48,400
Speaker 1: idea of talking his book. What kind of economy would

453
00:25:48,480 --> 00:25:52,119
Speaker 1: Neil cush Cary give us, say, versus a rules based

454
00:25:52,240 --> 00:25:58,639
Speaker 1: John Taylor of Stanford University. Well, that's interesting too, because

455
00:25:58,640 --> 00:26:00,800
Speaker 1: Taylor is a potential choice, and I was looking up

456
00:26:00,800 --> 00:26:05,480
Speaker 1: on your Bloomberg system. There's a model there Taylor t

457
00:26:05,920 --> 00:26:07,280
Speaker 1: Y L O R and you can put in your

458
00:26:07,320 --> 00:26:11,159
Speaker 1: own inputs. It depends on what. It depends on what

459
00:26:11,200 --> 00:26:14,199
Speaker 1: Taylor thinks is the natural rate of unemployment. And it

460
00:26:14,240 --> 00:26:17,199
Speaker 1: makes a huge difference. If the natural rate of unemployment

461
00:26:17,280 --> 00:26:20,000
Speaker 1: is five and a quarter versus four in a quarter,

462
00:26:20,080 --> 00:26:22,760
Speaker 1: which it seems to be at the moment, then FED funds,

463
00:26:23,000 --> 00:26:25,479
Speaker 1: you know, should be a hundred basis points different. In

464
00:26:25,480 --> 00:26:28,760
Speaker 1: other words, at UH at four in a quarter uh

465
00:26:28,880 --> 00:26:30,920
Speaker 1: in terms of a nehru as we call it, and

466
00:26:31,440 --> 00:26:34,879
Speaker 1: the tailor rule with some modifications in your system, you know,

467
00:26:34,960 --> 00:26:37,760
Speaker 1: basically suggests that we're there. And in terms of where

468
00:26:37,800 --> 00:26:40,720
Speaker 1: FED funds should be. So what would Taylor do? Uh,

469
00:26:40,920 --> 00:26:43,879
Speaker 1: he'd probably follow the tailor rule and UH, you know,

470
00:26:43,920 --> 00:26:48,200
Speaker 1: at the moment absent modifications, he'd probably raise interest rates

471
00:26:48,240 --> 00:26:52,760
Speaker 1: a little bit. Cash carry I don't think would Mr Chris.

472
00:26:52,760 --> 00:26:55,840
Speaker 1: I'm looking at dollar yen so it seems to be

473
00:26:55,880 --> 00:26:59,440
Speaker 1: retesting hundred and thirteen. A lot of technical less saying

474
00:26:59,440 --> 00:27:02,080
Speaker 1: if it close is above, it looks like on fourteen

475
00:27:02,080 --> 00:27:05,640
Speaker 1: it's next big level. Actually, if the Fed hikes UM

476
00:27:05,880 --> 00:27:08,679
Speaker 1: in December, what's the hues the central bank that's going

477
00:27:08,720 --> 00:27:13,640
Speaker 1: to have the toughest time. Well, it depends on if

478
00:27:13,680 --> 00:27:17,080
Speaker 1: they're fixated on their currency, and I wouldn't deny that

479
00:27:17,119 --> 00:27:20,240
Speaker 1: they are, although they don't speak to it. UM. I

480
00:27:20,240 --> 00:27:22,840
Speaker 1: don't think the b o J is moving. The b

481
00:27:22,960 --> 00:27:25,000
Speaker 1: o J is the last central bank to move off

482
00:27:25,040 --> 00:27:27,679
Speaker 1: of their stance. The stance at the moment is a

483
00:27:27,720 --> 00:27:30,440
Speaker 1: cap on the tenure of ten basis points and basically

484
00:27:30,520 --> 00:27:33,880
Speaker 1: flat for short term interest rates. They they'll stay there

485
00:27:33,960 --> 00:27:38,200
Speaker 1: until inflation. Uh, you know sees the whites of two

486
00:27:37,720 --> 00:27:41,040
Speaker 1: percent or or hiring. That may not happen. Uh. The

487
00:27:41,119 --> 00:27:43,880
Speaker 1: e c B is changing, as we know, probably will

488
00:27:44,119 --> 00:27:48,840
Speaker 1: reduce quantitative easing. UM. So I I'd say the biggest challenge,

489
00:27:49,400 --> 00:27:52,680
Speaker 1: as your question points out, is uh, just in terms

490
00:27:52,720 --> 00:27:56,760
Speaker 1: of the b o J, the end will gradually weaken

491
00:27:57,000 --> 00:28:01,480
Speaker 1: if they seem firm on the stance, and they, to

492
00:28:01,520 --> 00:28:04,240
Speaker 1: my way of thinking, they will be Bill. One more question,

493
00:28:04,280 --> 00:28:05,920
Speaker 1: if we could, you have been very generous with your

494
00:28:05,920 --> 00:28:09,160
Speaker 1: time this morning. If we get the sea change view

495
00:28:09,400 --> 00:28:12,800
Speaker 1: of Bill gross above a two point four zero, with

496
00:28:12,920 --> 00:28:16,200
Speaker 1: the idea of the great moderation being over, can you

497
00:28:16,320 --> 00:28:21,399
Speaker 1: link that to your historic claim that financial repression will continue?

498
00:28:21,720 --> 00:28:25,000
Speaker 1: Can you now say we may see an end two

499
00:28:25,200 --> 00:28:30,280
Speaker 1: retirees financial repression? No, I don't think so. You know,

500
00:28:30,560 --> 00:28:32,640
Speaker 1: what would it take on the tenure? Would it take

501
00:28:32,680 --> 00:28:35,679
Speaker 1: three percent four percent? Uh, in order to begin to

502
00:28:35,720 --> 00:28:40,280
Speaker 1: compensate savers and not to repress them? You probably, Tom,

503
00:28:40,400 --> 00:28:43,520
Speaker 1: And you know it's it's a it's a shaky definition

504
00:28:43,560 --> 00:28:47,800
Speaker 1: in terms of repression. But you know, financial repression existed

505
00:28:47,840 --> 00:28:50,440
Speaker 1: for thirty or four years after World War Two until

506
00:28:50,480 --> 00:28:53,200
Speaker 1: the Volker era, and I assume that it's going to

507
00:28:53,240 --> 00:28:56,360
Speaker 1: continue for ten twenty thirty years here as well. And

508
00:28:56,400 --> 00:29:00,440
Speaker 1: that means that interest rates aren't going to keep going down,

509
00:29:00,600 --> 00:29:03,160
Speaker 1: That's what I'm talking about, but they may not go up,

510
00:29:03,640 --> 00:29:07,680
Speaker 1: uh significantly. We will continue to be repressed. Savers will

511
00:29:07,720 --> 00:29:10,320
Speaker 1: continue to get the short end of the stick. Bill,

512
00:29:10,360 --> 00:29:12,480
Speaker 1: You've been most generous to your time and over the

513
00:29:12,960 --> 00:29:15,280
Speaker 1: over decade that you and I have worked together. Thank

514
00:29:15,280 --> 00:29:18,600
Speaker 1: you so much for this perspective this morning, Bill Gross,

515
00:29:18,600 --> 00:29:21,560
Speaker 1: of Janice Henderson, there really without what I'm going to

516
00:29:21,840 --> 00:29:25,400
Speaker 1: editorialize as a regime change and what if if we

517
00:29:25,480 --> 00:29:29,200
Speaker 1: get out over sustained higher rates. That was exceptionally interesting.

518
00:29:29,200 --> 00:29:33,600
Speaker 1: Francying just a completely different tone given where we are,

519
00:29:33,600 --> 00:29:36,640
Speaker 1: and as you mentioned, francing equity futures trade down. Is

520
00:29:36,800 --> 00:29:41,040
Speaker 1: Mr Gross suggested that's that correlation. Yeah, it certainly is

521
00:29:41,080 --> 00:29:43,400
Speaker 1: if you look at you know, some of the dynamics

522
00:29:43,520 --> 00:29:47,880
Speaker 1: is currencies seem to be moving one way and actually futures,

523
00:29:47,960 --> 00:29:50,120
Speaker 1: you know, don't not liking the job reports, So I

524
00:29:50,120 --> 00:30:05,280
Speaker 1: wonder whether there's a little bit of dichotomy their tom.

525
00:30:05,280 --> 00:30:08,880
Speaker 1: It is always a well timed conversation, and today a

526
00:30:08,920 --> 00:30:13,360
Speaker 1: more nuanced conversation with our National Economic Director Mr Khne.

527
00:30:13,440 --> 00:30:17,560
Speaker 1: Of course, formerly with Goldman Sachs. Gary Cone has been

528
00:30:17,600 --> 00:30:21,560
Speaker 1: I think, very transparent about the politics. Right now, here's

529
00:30:21,600 --> 00:30:24,760
Speaker 1: David Weston with Home where we're joined by Gary Khne,

530
00:30:25,000 --> 00:30:27,880
Speaker 1: director of the President's Council of Economic Advisers. Welcome back,

531
00:30:27,880 --> 00:30:29,840
Speaker 1: to the program. Very very good for you to join us.

532
00:30:30,240 --> 00:30:32,719
Speaker 1: So we've been reporting extensively on these numbers since they

533
00:30:32,720 --> 00:30:35,720
Speaker 1: came out an hour ago. And we've got the problems

534
00:30:35,760 --> 00:30:37,920
Speaker 1: with the hurricane and affected the overall number of jobs,

535
00:30:37,960 --> 00:30:41,480
Speaker 1: but you've got really strong numbers on unemployment sixteen year

536
00:30:41,560 --> 00:30:44,720
Speaker 1: low and also on wage growth at two point nine

537
00:30:44,760 --> 00:30:48,760
Speaker 1: percent annualized. Let's put these in the larger perspective for us.

538
00:30:49,640 --> 00:30:52,040
Speaker 1: Has there ever been the case in history that we've

539
00:30:52,040 --> 00:30:55,440
Speaker 1: had a massive tax cut with this employment situation, that

540
00:30:55,600 --> 00:30:58,000
Speaker 1: particularly that will involve deficit spending at least in the

541
00:30:58,000 --> 00:30:59,880
Speaker 1: short term. Have we ever done that in this country?

542
00:31:00,720 --> 00:31:02,640
Speaker 1: So so, David, thanks thanks for having me, and I

543
00:31:02,720 --> 00:31:05,480
Speaker 1: appreciate the opportunity to be here. Look, we at the

544
00:31:05,480 --> 00:31:08,000
Speaker 1: White House are very excited about the numbers. You're right,

545
00:31:08,040 --> 00:31:10,440
Speaker 1: there is some some noise in the number because of

546
00:31:10,440 --> 00:31:14,000
Speaker 1: the hurricane, and uh, as you said, you discount that

547
00:31:14,080 --> 00:31:16,080
Speaker 1: noise out and you're looking through the numbers and you're

548
00:31:16,120 --> 00:31:18,320
Speaker 1: looking at the wage growth and you're looking at the

549
00:31:18,360 --> 00:31:21,200
Speaker 1: unemployment number, which is the real bright news here. Look,

550
00:31:21,280 --> 00:31:23,000
Speaker 1: I think what that the numbers are showing you, And

551
00:31:23,040 --> 00:31:25,680
Speaker 1: the question you're asking me is you're asking about President

552
00:31:25,680 --> 00:31:29,080
Speaker 1: and Trump's economic agenda and what he's committed to and

553
00:31:29,120 --> 00:31:31,480
Speaker 1: what we're committed to here in the White House. We

554
00:31:31,520 --> 00:31:34,400
Speaker 1: believe that the tax cut is essential to continue the

555
00:31:34,440 --> 00:31:37,160
Speaker 1: economic growth that we've started. Yes, we've started some real

556
00:31:37,200 --> 00:31:40,280
Speaker 1: economic growth. We've been rolling back regulations, but we need

557
00:31:40,280 --> 00:31:43,080
Speaker 1: to continue the economic growth we can need to continue

558
00:31:43,080 --> 00:31:45,920
Speaker 1: the wage growth here in America. So do you have

559
00:31:45,960 --> 00:31:48,280
Speaker 1: a reason to believe it will not continue? And and

560
00:31:48,320 --> 00:31:52,920
Speaker 1: perhaps more pointedly, in history, we've always had deficit spending

561
00:31:52,960 --> 00:31:56,280
Speaker 1: and tax cuts in in really fallow times, not in

562
00:31:56,320 --> 00:31:58,960
Speaker 1: the robust times. Right now, we have a pretty robust time.

563
00:31:58,960 --> 00:32:00,959
Speaker 1: Why doesn't the President say things are going great. We

564
00:32:01,000 --> 00:32:04,320
Speaker 1: don't need to really intervene, David. We've had a couple

565
00:32:04,360 --> 00:32:07,360
Speaker 1: of good quarters of g d P, but we're still

566
00:32:07,440 --> 00:32:10,520
Speaker 1: not on a sustainable level of growth that we should

567
00:32:10,600 --> 00:32:13,000
Speaker 1: be and want to be here in the United States.

568
00:32:13,320 --> 00:32:16,440
Speaker 1: We've been averaging about two percent growth. The President is

569
00:32:16,520 --> 00:32:19,160
Speaker 1: not happy with two percent growth. He ran on a

570
00:32:19,200 --> 00:32:22,240
Speaker 1: pro growth platform and he wants to deliver a pro

571
00:32:22,400 --> 00:32:26,960
Speaker 1: growth economic agenda. We believe the tax reform is necessary.

572
00:32:27,080 --> 00:32:30,680
Speaker 1: We need to allow American companies to compete on a

573
00:32:30,800 --> 00:32:34,880
Speaker 1: level playing field. Our taxes do not allow American companies,

574
00:32:34,920 --> 00:32:37,760
Speaker 1: American business to compete around the world on a level

575
00:32:37,800 --> 00:32:41,000
Speaker 1: playing field. Our corporate tax structure and our business tax

576
00:32:41,000 --> 00:32:44,520
Speaker 1: structure is just too high today. Hey, Gary, No, when

577
00:32:44,560 --> 00:32:46,600
Speaker 1: we talked to believes you're going to see sustainable two

578
00:32:46,600 --> 00:32:50,280
Speaker 1: point nine percent growth. Okay, that that you're arguing for

579
00:32:50,320 --> 00:32:52,920
Speaker 1: our tax cut. What what what I'm saying with the tax

580
00:32:52,920 --> 00:32:55,200
Speaker 1: cum saying with the tax cut, No one thinks we're

581
00:32:55,200 --> 00:32:57,720
Speaker 1: gonna get sustained that either way. What do you say

582
00:32:57,760 --> 00:33:01,160
Speaker 1: to that? We We completely disagree with that. We completely

583
00:33:01,160 --> 00:33:04,760
Speaker 1: disagree with that. We obviously think and and and if

584
00:33:04,800 --> 00:33:07,000
Speaker 1: you listen to what Kevin Hassett came out yesterday, our

585
00:33:07,040 --> 00:33:09,600
Speaker 1: ce A director, He came out and talked about the

586
00:33:09,640 --> 00:33:13,480
Speaker 1: economic growth that we believe, we strongly believe we will

587
00:33:13,560 --> 00:33:18,000
Speaker 1: have by cutting business taxes and attracting business back to America,

588
00:33:18,280 --> 00:33:22,560
Speaker 1: attracting capital back to America, growing opportunities here for employees

589
00:33:22,600 --> 00:33:26,080
Speaker 1: to be employed, creating wage more wage growth in the

590
00:33:26,120 --> 00:33:29,560
Speaker 1: United States, and keep the sustainable system that we're that

591
00:33:29,600 --> 00:33:32,080
Speaker 1: we're at right now. We believe we can have a

592
00:33:32,240 --> 00:33:36,120
Speaker 1: three plus percent growth with taxes and the regulation that

593
00:33:36,160 --> 00:33:38,680
Speaker 1: we're in the reform that we're aft there. Now, Hey, Gary,

594
00:33:38,720 --> 00:33:40,760
Speaker 1: I want to get your take on a Trump tweet.

595
00:33:40,800 --> 00:33:42,960
Speaker 1: It was about the stock market. He says, the stock

596
00:33:43,000 --> 00:33:45,440
Speaker 1: market hit and all time high. This is President Trump

597
00:33:45,440 --> 00:33:49,640
Speaker 1: tweeting yesterday. Unemployment lois in sixteen years, business and manufacturing

598
00:33:49,760 --> 00:33:54,160
Speaker 1: enthusiasm at the highest level in decades. Do you really

599
00:33:54,480 --> 00:33:57,040
Speaker 1: want a White House that's associated with record highs when

600
00:33:57,080 --> 00:33:59,680
Speaker 1: you know hypercarious that can actually be And we've had

601
00:33:59,720 --> 00:34:01,080
Speaker 1: like are the six of them for the S and

602
00:34:01,120 --> 00:34:05,520
Speaker 1: P so far this year? Look, presidents committed to economic growth.

603
00:34:05,600 --> 00:34:09,400
Speaker 1: He's committed to a pro growth, pro job agenda. The

604
00:34:09,480 --> 00:34:13,560
Speaker 1: stock market is representative of what his agenda is and

605
00:34:13,600 --> 00:34:18,880
Speaker 1: the fact that we're having real impact in tying your success,

606
00:34:19,120 --> 00:34:21,439
Speaker 1: your tying your success to what the stock market does.

607
00:34:21,600 --> 00:34:26,240
Speaker 1: Come on, we're tying our success to jobs, job creation,

608
00:34:26,960 --> 00:34:30,640
Speaker 1: better opportunities for American citizens. The stock market just happens

609
00:34:30,680 --> 00:34:33,879
Speaker 1: to represent that you. You and I both know how

610
00:34:33,880 --> 00:34:36,600
Speaker 1: the stock market is priced. The stock markets price on

611
00:34:36,719 --> 00:34:40,800
Speaker 1: expectations of future earnings of businesses, and those future earnings

612
00:34:40,800 --> 00:34:43,840
Speaker 1: are basically representative of what they think businesses are going

613
00:34:43,880 --> 00:34:46,920
Speaker 1: to be able to accomplish in the future. Gary, I

614
00:34:47,000 --> 00:34:49,080
Speaker 1: just wonder if it is about the market, how this

615
00:34:49,160 --> 00:34:52,640
Speaker 1: bleeds ultimately into the decision making out sweb the next

616
00:34:52,640 --> 00:34:56,480
Speaker 1: FED chair. For instance, as an administration, you're sensitive to

617
00:34:56,520 --> 00:34:59,759
Speaker 1: the way markets would take the next fix FED chair.

618
00:34:59,800 --> 00:35:04,040
Speaker 1: And it might be Look, we as administration are sensitive

619
00:35:04,040 --> 00:35:06,960
Speaker 1: to everything. We're sensitive to all the policies. The President

620
00:35:07,239 --> 00:35:10,440
Speaker 1: thinks about economic growth, and he thinks about middle class

621
00:35:10,440 --> 00:35:13,360
Speaker 1: Americans every day, and middle income Americans every day, and

622
00:35:13,400 --> 00:35:16,560
Speaker 1: hard working Americans every day, and how he can put

623
00:35:16,600 --> 00:35:19,719
Speaker 1: them in a better position economically, how it can help

624
00:35:19,760 --> 00:35:22,720
Speaker 1: improve their life. That's what the President thinks about every day. Gary,

625
00:35:22,719 --> 00:35:24,439
Speaker 1: I want to know what you think about it most

626
00:35:24,440 --> 00:35:28,279
Speaker 1: specifically for the next FED chair. Are you sensitive to

627
00:35:28,400 --> 00:35:31,680
Speaker 1: how the markets may interpret that individual in their policies.

628
00:35:32,920 --> 00:35:36,759
Speaker 1: Like I said, we think holistically about everything. We're not

629
00:35:36,920 --> 00:35:39,640
Speaker 1: myopic on any topic. We in the White House and

630
00:35:39,680 --> 00:35:41,879
Speaker 1: we're along with the President, have to think about all

631
00:35:41,920 --> 00:35:44,239
Speaker 1: of the topics together. That's our job is to think

632
00:35:44,280 --> 00:35:47,480
Speaker 1: holistically about everything. Well, let's think holistically about this, Um,

633
00:35:47,600 --> 00:35:51,360
Speaker 1: did you think the next FED chair requires a PhD

634
00:35:51,360 --> 00:35:53,959
Speaker 1: in economics to really got into the respect of those

635
00:35:54,000 --> 00:35:56,920
Speaker 1: on the f MC. Gary. You know, I'm not going

636
00:35:56,960 --> 00:35:59,200
Speaker 1: to talk about the specifics of a search that's going

637
00:35:59,200 --> 00:36:02,440
Speaker 1: on right now. I don't think that's appropriate. So so

638
00:36:02,600 --> 00:36:04,400
Speaker 1: very cold. I come back to your tax plan for

639
00:36:04,440 --> 00:36:07,319
Speaker 1: a moment um. You say you're gonna get to three

640
00:36:07,320 --> 00:36:11,279
Speaker 1: percent sustained growth. Could you just explain to us exactly

641
00:36:11,400 --> 00:36:13,640
Speaker 1: what the next tax plan will generate that? As you

642
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Speaker 1: know well, economists say growth like that comes from two sources,

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Speaker 1: and that is more people working, demographics, uh, and productivity.

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Speaker 1: What will those taxes if you get your plan the

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Speaker 1: way you want it, how will it either generate more

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Speaker 1: people working or increase productivity? David, we couldn't agree with

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Speaker 1: you more so. When you lower the business tax rate,

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Speaker 1: on the paths through nities, on the corporate rates, we

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Speaker 1: make ourselves more competitive. We make it that businesses want

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Speaker 1: to locate in the United States. When they locate in

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00:36:45,160 --> 00:36:47,799
Speaker 1: the United States, they have to hire labor. They go

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00:36:47,840 --> 00:36:51,200
Speaker 1: out and compete for labor, they hire people. We see

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00:36:51,239 --> 00:36:54,040
Speaker 1: wages increase because we hire people. We're also going to

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00:36:54,080 --> 00:36:57,520
Speaker 1: see enormous amount of productivity in these numbers. Because as

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Speaker 1: we build new new factories and we build new manufacturing

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00:37:00,920 --> 00:37:03,760
Speaker 1: a lot of it's gonna be technologically driven, So the

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Speaker 1: productivity numbers are really gonna grow by the by leaps

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00:37:07,920 --> 00:37:11,520
Speaker 1: and bounds because we are a technologicy driven economy here,

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00:37:11,680 --> 00:37:15,239
Speaker 1: and we think that we can increase productivity dramatically by

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00:37:15,320 --> 00:37:18,640
Speaker 1: creating a tax code that allows businesses to compete here

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00:37:18,640 --> 00:37:21,600
Speaker 1: in the United States with their with other countries around

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Speaker 1: the world. Of the White House, the National Economic Director,

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00:37:25,960 --> 00:37:30,000
Speaker 1: they're talking about policy and prescription and also, of course

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Speaker 1: always the politics of Washington. Our policy and prescription is

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Speaker 1: to give you a data check. Dollars stronger yen one

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00:37:38,440 --> 00:37:42,720
Speaker 1: eight year old well under one seventeen one, sixteen ninety

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00:37:42,880 --> 00:37:47,319
Speaker 1: on the euro sterling one gold. I'm watching carefully now

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00:37:47,360 --> 00:37:50,839
Speaker 1: down eight dollars, make it nine dollars this morning. That's

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00:37:50,920 --> 00:37:52,799
Speaker 1: really something to watch or I don't have to chart

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00:37:52,840 --> 00:37:54,680
Speaker 1: in front of me. I worked it up and try

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Speaker 1: to give it out to radio first out on social

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Speaker 1: tenure yield now rounded up to point forward zero percent.

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Speaker 1: We have had a weaker tenure higher tenure yield, I

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Speaker 1: should say over the last thirty minutes off the analysis

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Speaker 1: of this important jobs report. Francine and Kuen London. I'm

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Speaker 1: Tom keenan New York on Jobs Day. This is Bloomberg.

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Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and

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Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast

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00:38:36,120 --> 00:38:39,640
Speaker 1: platform you prefer. I'm on Twitter at Tom Keene. David

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00:38:39,680 --> 00:38:43,839
Speaker 1: Gura is at David Gura. Before the podcast, you can

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Speaker 1: always catch us worldwide. I'm Bloomberg Radio