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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. And what
Speaker 2: we see now with so much of inflation as it
Speaker 2: comes in decidedly in a disinflationary mode, You're going to
Speaker 2: see a huge move I would predict in the market
Speaker 2: equities lift. Here, I'm looking at the ten year real
Speaker 2: yield Claudia. Some would want me to do it. It
Speaker 2: plunges out of the recent range and moves from one
Speaker 2: point nine to nine down to a stunning one point
Speaker 2: nine zero, a full time basis point move. Paul, go
Speaker 2: through the list of the inflation You do it better.
Speaker 4: Than me, CPI Tom just right off the headline is
Speaker 4: there's a negative symbol. There's a negative symb let's call
Speaker 4: that out zero point one percent. Tom. The consensus was
Speaker 4: a positive zero point one percent, So it's lower than
Speaker 4: the consensus. It's lower than the last month. That gets
Speaker 4: your attention. X Food and Energy zero point one percent
Speaker 4: versus the consensus of zero point two percent. So you
Speaker 4: put that all in for the annualized number, Tom, CPI
Speaker 4: X Food and Energy year on year came into three
Speaker 4: point three percent to consensus was three point four percent,
Speaker 4: and that was what it was last month. So a
Speaker 4: slower inflationary environment is what we're seeing here, Tom.
Speaker 2: Average wages pretty much level as well, maybe a little
Speaker 2: bit of an improvement in weekly earnings.
Speaker 3: And I would finally state the claims.
Speaker 2: Reversed from the recent trend to a this is this
Speaker 2: is Claudia is going to be really impressive, worser claims.
Speaker 3: How about that.
Speaker 2: It's a better claims statistic, But it's just one data
Speaker 2: point on this market moving CPI report futures up eight
Speaker 2: NASTAC up two tenths of a percent, a ten year
Speaker 2: real yield craters from a one ninety nine to one
Speaker 2: point nine one percent.
Speaker 3: We went with claudia, some claudia.
Speaker 2: There's a negative sign on CPI month over month, what
Speaker 2: does that signal?
Speaker 5: It's good?
Speaker 1: I mean, this is the what's so important about getting
Speaker 1: these kind of numbers at this point is it goes back.
Speaker 1: It tells us what we saw the second half of
Speaker 1: last year, what wasn't supposed to happen, the disinflation without
Speaker 1: the pain that was real. And it also tells us
Speaker 1: a lot of that where we got stuck up at
Speaker 1: the beginning of this year, that was that was not
Speaker 1: the right signal. Right, So this is you know, we
Speaker 1: get one more month of data, but it actually helped
Speaker 1: to sort out the different conflicting stories that we've had
Speaker 1: before that you know, we we are on this disinflation
Speaker 1: path and we have been, and this is this is
Speaker 1: very good news. It is one data point and you
Speaker 1: don't you know, it's nice to see a negative ahead
Speaker 1: of that number. We shouldn't get to, you.
Speaker 6: Know, wound up about it.
Speaker 1: But this is the disinflation story. It's here and it
Speaker 1: has been here. We've just it's been under the hood
Speaker 1: and been hidden.
Speaker 4: So how do you think the FED is going to
Speaker 4: interpret interpret this data? Claudy, Are they going to look
Speaker 4: at it on a month basis or kind of a
Speaker 4: maybe three months six month trailing basis. How do they
Speaker 4: look at some of this CPI data.
Speaker 1: We we now have three months that are good months,
Speaker 1: right and frankly, this is is another very good month
Speaker 1: as with last month. So again they're not going to
Speaker 1: want to, you know, overreact to one month, but we're
Speaker 1: getting in their three month moving average range. Of these
Speaker 1: are good numbers. We need to keep them going. We
Speaker 1: had a full string of disinflation the second half of
Speaker 1: last year. The composition we're all talking about top line
Speaker 1: numbers going on under the food is important and you know,
Speaker 1: good news is good news here and it is a story.
Speaker 1: It re enforces the dissemplation story, which is what we
Speaker 1: need to get back to normal.
Speaker 2: The market moves, Futures explode up sixteen down, futures up
Speaker 2: seventy eight, nasdack up three tens an percent, small caps
Speaker 2: almost up two percent, the vics a much more attractive
Speaker 2: number twelve point three three. Bloomberg surveillance across the nation
Speaker 2: with a stunning inflation report, and we are strong with
Speaker 2: claudiasm of course of Michigan for years and affiliated with
Speaker 2: the University of Chicago Boos School. The former governor of
Speaker 2: the Federal Reserve System, Randall Krasner, joins us now the
Speaker 2: market economist Randy Krausner. Neil Dudda of Renaissance Macro puts
Speaker 2: out a blistering single sentence, The doves have what they need,
Speaker 2: It is time to cut. What will the PhDs that
Speaker 2: the ECCOS building advise Chairman Powell?
Speaker 6: I will say that we have the foundation for a cut,
Speaker 6: but they're not going to be ready to go yet.
Speaker 6: So I think they're As Jay has said over and
Speaker 6: over again, he needs more data to feel confident that
Speaker 6: inflation is coming down in a sustained and sustainable way.
Speaker 6: This is certainly consistent with that, and you could see
Speaker 6: from the testimony that he gave over the last couple
Speaker 6: of days he was talking more about the risks to
Speaker 6: the downside, that is that the FED those rates too
Speaker 6: long and the economy, in particularly the labor markets lows
Speaker 6: too much. This is not enough to get them to
Speaker 6: move at the end of this month. I don't really
Speaker 6: think that's going to happen, but I do think it
Speaker 6: sets the foundation for a move in September.
Speaker 2: Tough question Randy, I'm going to ask it with your brilliance,
Speaker 2: and particularly in financial economics, people will say the elites
Speaker 2: are benefited by our FED policy because they are asset heavy.
Speaker 2: Price up, yield down assets do better when you're around
Speaker 2: the table the Echos building July thirty one or into September,
Speaker 2: is there any discussion of the partition of America where
Speaker 2: so many Americans need that rate cut now?
Speaker 6: Well, certainly, the FED has been very much focused on
Speaker 6: the labor market. I mean think back to a few
Speaker 6: years ago when Jay Powell and the rest of the
Speaker 6: FED launched the average inflation targeting where they said, well,
Speaker 6: we could run the economy too hot for a little
Speaker 6: while and that would be okay. So they are very
Speaker 6: sensitive to that. That is I think why Jay is
Speaker 6: starting to speak so much more about that. The unemployment
Speaker 6: rate has been four percent or below for a very
Speaker 6: long time. Now, that's a very strong labor market, and
Speaker 6: there has been a lot of generation of jobs, not
Speaker 6: just at the high end, but really throughout the entirety
Speaker 6: of the income income distribution. But they're sensitive to that,
Speaker 6: and I think that will lead them to cut by September,
Speaker 6: but not this month.
Speaker 4: So Randy whinn the FED does begin to cut rates.
Speaker 4: Do they do it? Did they do it, you know,
Speaker 4: four or five six meetings in a row? Did they alternate?
Speaker 4: How does that work?
Speaker 3: And Paul, your question is the absolute heart of the matter.
Speaker 6: Sure, for sure, And so I don't think they know
Speaker 6: yet how they want to do it.
Speaker 5: I don't think they remember.
Speaker 6: There's that old phrase that the Island green Span had
Speaker 6: that you moved a pace that was likely to be measured,
Speaker 6: so twenty five basis points every meeting for like two years.
Speaker 6: I don't think they want to do something like that.
Speaker 2: See, Randy, you're busting my chop. So as Paul asked
Speaker 2: the money questionnaire. But Randy, we are wedded to a green.
Speaker 3: Spanny in mathematics on this.
Speaker 2: Are we wrong to do that? I mean, should we
Speaker 2: be more creative about it? Back to McChesney, Martin or
Speaker 2: Arthur Burns. Should we have a new formula forward beside
Speaker 2: a measured green span.
Speaker 5: Yeah. I don't think they're going to do the measured pace.
Speaker 6: I think there was pretty clear consensus even when I
Speaker 6: was there, which is now a while ago, that measured
Speaker 6: pace was not the best way to do things.
Speaker 5: And so I think that they will move.
Speaker 6: And you can see when they moved inflation interest rates
Speaker 6: up that was not at a measured pace, that was
Speaker 6: pretty rapid.
Speaker 5: So I think they're gonna they'll bring interest rates down.
Speaker 5: I think they'll bring.
Speaker 6: Them down somewhat gradually at first, but if they see
Speaker 6: the libor market really weakening, they'll start to move quickly.
Speaker 6: That'll be too late to prevent the labor market from
Speaker 6: softening substantially. But they have to weigh the risks of
Speaker 6: calling all clear too early, getting back into what happened
Speaker 6: in the late seventies early eighties, where they did that
Speaker 6: and then inflation reignited and they had to raise rates
Speaker 6: really high at a really bad recession. They'd rather wait
Speaker 6: a little bit, you know, perhaps a little bit too long,
Speaker 6: to buy some insurance against that upside inflation scenario. But
Speaker 6: then they can cut and just have a slow down,
Speaker 6: maybe a mild recession, but something that'll be much less
Speaker 6: worse than what they had in the early eighties.
Speaker 4: All right, Rannie, So today's inflation, David, you know, certainly
Speaker 4: showing some slowing inflation. We heard from FED Chairman J
Speaker 4: Powell over the last two days speaking in front of
Speaker 4: Congress focusing. I think a lot of investors said, boy,
Speaker 4: he's really kind of focused on the labor market, the
Speaker 4: employment market, and citing some slow downs, there are just
Speaker 4: some softness there. How do you think about the labor market.
Speaker 4: How do you think that Federal Reserve thinks about the
Speaker 4: labor market.
Speaker 6: So I think they see that, I think is really
Speaker 6: the key on both the demand side as well as
Speaker 6: on the supply side. So on the supply side, they
Speaker 6: look a lot of wage growth, and wage growth has
Speaker 6: been coming down a bit. It's still now three point
Speaker 6: nine percent rather than four point one percent, substantially above
Speaker 6: their inflation target. And given how important wages are in
Speaker 6: the cost structure of both both certainly services firms, but
Speaker 6: even manufacturing firms, unless productivity really spikes up, that's going
Speaker 6: to have to come down a little bit, a little
Speaker 6: bit more. On the demand side, obviously, when there's good
Speaker 6: real wage growth as there has been, that is that
Speaker 6: wages have been growing fast and nominal wages have been
Speaker 6: growing faster than inflation. That's a that's a big plug
Speaker 6: or households continuing demand, and they want to keep that
Speaker 6: balance just right.
Speaker 2: Professor Krausser, stay with us, don't go away at the
Speaker 2: Blue School Chicago, with his great work at opening BOS
Speaker 2: School in London. Here a number of years ago, Randall Krasser,
Speaker 2: the former governor of.
Speaker 3: The FED, Randy, we're learning so much.
Speaker 2: And what I learned was from David Rosenberg at Marylynch
Speaker 2: a million years ago that the financial media focuses on
Speaker 2: one statistic, or maybe we get sophisticated and we look
Speaker 2: at three statistics. Pros like you and Kate Moore for
Speaker 2: that matter, look at forty seven or fifty five inflation statistics,
Speaker 2: which is the one you're looking at right now. What
Speaker 2: is the subset of data that matters to Randall Krasner.
Speaker 6: And it's not really the CPI, it's the Personal Assumption
Speaker 6: Expensure Index the PCE that comes out with the with
Speaker 6: the GDP report.
Speaker 5: That's what the FED has said that they really focused on.
Speaker 6: I think that's reasonable because if you look at the
Speaker 6: waitings in the CPI, a very large fraction of it
Speaker 6: is around rents, and so you know some of the
Speaker 6: oddities that we get with rents, whether it's you know,
Speaker 6: last month, there's a big spike up in New York
Speaker 6: City rents, there's a big lag in the way that
Speaker 6: rents are come into, right, its owner occupied housing, but
Speaker 6: it's really rental numbers that come in that sort of
Speaker 6: lag things because as you know, people sent you usually
Speaker 6: signed one year contracts for rents, and so we're finding
Speaker 6: out a lot about what happened last year rather than
Speaker 6: what's happening happening currently. Less of a weight on that
Speaker 6: in the in the PCE index, and so the FED
Speaker 6: really focuses more on that, and I think that's reasonable
Speaker 6: to do.
Speaker 2: Okay, Randy, this is really important, And I mean, you know,
Speaker 2: Brown University economics pop. It's a little different than Harvard
Speaker 2: Undergraduate economics. The gentleman at Harvard Jason firm, and I
Speaker 2: think you know who he is, Randall Cross. Oh, yes,
Speaker 2: Jason Ferman of X ten Fame launches a tweet out
Speaker 2: moments ago amazing inflation data for June. What's exclamation points?
Speaker 2: They do that at Harvard Brown University? Poole said, no
Speaker 2: exclamation points ever. Come on, Randy, the Fed's got to
Speaker 2: adjust to this report. Explain how they adjusts. They staggered
Speaker 2: to July thirty first.
Speaker 5: So certainly they will take this on board.
Speaker 6: And I think, as you can see from the minutes,
Speaker 6: that I think are reflected in some of Jay's recent testimony.
Speaker 6: There's a lot more concerned about the potential downsides and
Speaker 6: the risks of keeping interest rates high for too long.
Speaker 6: They will take that on board, and I think what
Speaker 6: they will do is I don't think they're going to move,
Speaker 6: but I think what they're going to do lay the
Speaker 6: foundation for move in September, because in some sense Jay
Speaker 6: laid the foundation for changing the wording and changing the
Speaker 6: changing the press conference UH feeling in July, and because
Speaker 6: the move the FED in its communication moves at a
Speaker 6: pace that is likely to be gradual, and so they
Speaker 6: lay the foundation for changing the wording in July to
Speaker 6: be able to lay the foundation for actually making a
Speaker 6: change in September.
Speaker 5: So I think that's what your most likely to hear.
Speaker 3: Randy, thank you so much.
Speaker 2: And just for the record, Professor Krausner, I would kill
Speaker 2: to get Professor Krasner and Professor fermanon.
Speaker 3: At the same time.
Speaker 2: That's a giant in financial economics, in a giant in
Speaker 2: policy economics.
Speaker 3: Randy Krasner, the Moose.
Speaker 4: School, Kate Moore, She's had a thematic strategy and global
Speaker 4: allocation at a little firm called black rock. So, Kate,
Speaker 4: I'd love to get your thoughts here on this inflation
Speaker 4: print we Saul this morning. What is mean for you?
Speaker 7: Look, I think this is the latest and a string
Speaker 7: of good news for the equity market. You know, one
Speaker 7: of the things I was really considering as we finished
Speaker 7: off the second quarter was that, you know, most people
Speaker 7: were skeptical about the sustainability of the equity market going
Speaker 7: into the second half of the year. There are a
Speaker 7: little anxious that we can't repeat returns. I think this message.
Speaker 8: That we're getting now that the FED is going to
Speaker 8: be in.
Speaker 7: A place where they can continue to or they can
Speaker 7: start to ease policy and continue to guide us, and
Speaker 7: that is the path into the beginning of twenty twenty
Speaker 7: five is going to be quite supportive for equity markets.
Speaker 7: But it's not the whole story, right, I Mean, lower
Speaker 7: rates are certainly a support, but that's not what's really
Speaker 7: driving the equity markets in twenty twenty four. It's really
Speaker 7: been in earnings and a fundamental story.
Speaker 8: So now us equity.
Speaker 7: Investors, we have to turn our attention to earnings, which
Speaker 7: are kicking off any moment.
Speaker 4: So what do you expect to see here? We had
Speaker 4: some of the numbers today. Delta a little bit weaker
Speaker 4: than expected on some costs, PEPSI, a little bit weaker
Speaker 4: on some top line there. What are your expectations here
Speaker 4: for earnings cycle?
Speaker 8: Yeah, so okay, let's get out this.
Speaker 7: To begin with, the baseline consensus is looking for a
Speaker 7: seven and a half to eight percent EPs growth for
Speaker 7: the second quarter.
Speaker 8: That's obviously a little bit of an acceleration from the
Speaker 8: first quarter.
Speaker 7: So this is what I'm talking about, between the price
Speaker 7: moves and where consensus is from bottom up basis. You know,
Speaker 7: we're kind of at a hot place. But I will
Speaker 7: say as much as people are anxious about a pullback
Speaker 7: and you know, get worried that multiples have expanded, there
Speaker 7: are a couple of reasons I think this earning season
Speaker 7: could meet these high expectations. So first, I'm going to
Speaker 7: make this point around pre announcements, because I watched this
Speaker 7: really closely. When you're going into earning season, people may
Speaker 7: put out all the bad news if they need to early,
Speaker 7: and there have been very few negative pre announcements this quarter,
Speaker 7: especially relative to what we got in the first quarter
Speaker 7: of twenty four, which was.
Speaker 8: Still a good earnings quarter.
Speaker 7: So no one is coming out trying to front run
Speaker 7: the market here and get the bad news out before earnings,
Speaker 7: which I think is actually a very positive signal.
Speaker 8: Kay.
Speaker 2: And then the second thing, Oh, please go on, don't continue, Kate,
Speaker 2: Kate Moore, you deserve a second thing, Give us a
Speaker 2: second thing.
Speaker 7: The second thing I was going to say is that
Speaker 7: earnings revision ratios. This is like the ratio of upgrades
Speaker 7: to downgrades from the bottom up analysts. And over the
Speaker 7: last one month, the earnings revision ratios for the US
Speaker 7: and particularly for the biggest parts that matter, like tech,
Speaker 7: have been very positive or have in Tech, we've had
Speaker 7: more than two upgrades for every one down grade. And
Speaker 7: you know that's not a sign going into earning season
Speaker 7: that people aren't seeing any signs of weakness.
Speaker 2: Ira Jersey is going to be with us in a bit.
Speaker 2: We're still with Kate Moore, Blackrock and mister Jersey and
Speaker 2: his team. I mean, Kate, it's not like you or
Speaker 2: you're you know, you're alone and you're understaffed. Jersey's got
Speaker 2: like seven people right now writing and working on the moment,
Speaker 2: and Iris of course talking about key rain just here
Speaker 2: in the fixed income market, I want you to bring
Speaker 2: that over to the equity market. Irad Jersey says, four
Speaker 2: point one eight percent on a ten year yield is
Speaker 2: a big deal. Right now, the tenure yield is four
Speaker 2: point two zero percent. How do equities react if yields
Speaker 2: go price up, yield down outside the recent range.
Speaker 7: Price up, yield down, I think would be really supportive
Speaker 7: for big parts of the market. You may actually see
Speaker 7: a little bit of action in the small and mid caps,
Speaker 7: which have been, as we know, huge laggards.
Speaker 3: Up one point eight percent right now.
Speaker 8: Yeah, and here's what I'll say.
Speaker 7: Fundamentally, that segment of the market is not as strong
Speaker 7: as what we see in the large cap indices and
Speaker 7: the megacap company that said this is the news that
Speaker 7: we need for smaller segments of the of the business
Speaker 7: community that rates are on the path down.
Speaker 8: Because they know that has been a headwind for operations.
Speaker 2: I got one more question, Kate Moore, when then we
Speaker 2: got to go over to Jersey to tell us what
Speaker 2: to do? You you don't remember the analogs that we remember.
Speaker 2: The nifty sixty I was, you know, nifty fifty rather
Speaker 2: in the sixties and all that, even ninety nine, two
Speaker 2: thousand does Kate More have an equity market analog you're
Speaker 2: working off of or is this a whole new world
Speaker 2: after all?
Speaker 8: Yeah, Tom, I do remember ninety nineteen thousand. Don't worry.
Speaker 8: I'm not that young.
Speaker 7: But what I will say is I don't see a
Speaker 7: perfect analog right here. And I know everyone wants to
Speaker 7: pick a period in history and say it looks just
Speaker 7: like this, and it's a comfort, you know, people like
Speaker 7: that comfort. But we are in the midst of, I
Speaker 7: think a massive technological change here with the advent of AI,
Speaker 7: and as companies try and figure out how to adopt
Speaker 7: AI and figure out the use cases and what the
Speaker 7: best way to work with this technology is, and I
Speaker 7: think that's going to lead to the incredible, you know,
Speaker 7: bifurcation in the market. Companies that have access to the
Speaker 7: technology have access to amazing data sets and are using
Speaker 7: it appropriately and those that don't. You're starting to see
Speaker 7: that separation in earnings already. And I just don't know
Speaker 7: that we, or at least in the lifetime I've been
Speaker 7: in almost five decades, that we've seen this significant of
Speaker 7: a technological change.
Speaker 2: Kate Moore, thank you so much, Blackrock. She's got to
Speaker 2: talk to her steam. Colleagues at Blackrock right now greatly
Speaker 2: greatly appreciate that.
Speaker 3: Ira Jersey joins us.
Speaker 2: Now with Bloomberg Intelligence, and he is a surveillance soccer expert.
Speaker 3: Paul, why don't you get us on the straight.
Speaker 4: And narrow exactly? All right, Ira, we had this inflation print,
Speaker 4: came in a little bit softer than expected. What's your market?
Speaker 4: What's the treasury market telling you about what we saw
Speaker 4: in the inflation print?
Speaker 9: Yeah, so the treasury market liked it, and the treasury
Speaker 9: market has rallied.
Speaker 5: We've seen some we call bull steepening.
Speaker 9: So you have the front end yield, so yields on
Speaker 9: the two year note are are lower more than yields
Speaker 9: on the long end of the yield curve. So that's
Speaker 9: what we call bull steepening of the curve. And that's
Speaker 9: not a huge surprise because you know what this data does.
Speaker 9: It gives more confidence to the market that not only
Speaker 9: might the Fed cut in September, but once they do
Speaker 9: start to cut, assuming that we continue to have reasonably
Speaker 9: decent inflation prints and slowing economy, that the Fed will
Speaker 9: probably go more regularly. And that's one of the reasons
Speaker 9: why you see the shorter end of the yield curve
Speaker 9: at two year note and five year note do a
Speaker 9: little bit better than the long end because that tends
Speaker 9: to be far more sensitive to interest rate cuts by
Speaker 9: the Fed. So it's not a huge surprise. And at tom,
Speaker 9: as you noted, you know, four point one eight percent
Speaker 9: on the ten yuere is actually a pretty important technical
Speaker 9: level because below that we're going to test four percent again.
Speaker 9: And I think you know four percent is more of
Speaker 9: a psychological level than anything you know, economically important. But
Speaker 9: nonetheless you can wind up seeing a pretty big move.
Speaker 2: We printed under four point one eight, but to pros
Speaker 2: like you, Ira, you need to close under four point
Speaker 2: one eight, am.
Speaker 3: I right, Yeah, that's correct.
Speaker 9: Yeah, so we do need to see it convince I
Speaker 9: call it a convincing break. So what often happens is
Speaker 9: you can make all these lines on charts and ultimately
Speaker 9: what usually you use those for things like putting stop
Speaker 9: losses or or stop reverses in so you you if
Speaker 9: you're if you're short the market, for example, you you
Speaker 9: hope that interest rates will go up, right, so yields
Speaker 9: will go up. And if you know so, if you say, okay,
Speaker 9: four point one eight percents a.
Speaker 5: Is a key technical level.
Speaker 9: You'll put you a stop in at four seventeen or
Speaker 9: four sixteen, So you need a more convincing break than
Speaker 9: just like half a basis point.
Speaker 4: AI, Raight, I'm looking at the WORP function world indust
Speaker 4: rate probability if I'm reading this correctly, Marcus, looking maybe
Speaker 4: like an eighty five percent chance of a rate cut
Speaker 4: in September.
Speaker 3: Oh, listen to you, you're doing it wrap?
Speaker 2: I am?
Speaker 4: I am? Can I pencil that in?
Speaker 8: IRA?
Speaker 4: Can I put it in with ink? What do we
Speaker 4: do here?
Speaker 9: Well, the market certainly is coming around to that thought.
Speaker 9: You know, I'd been very skeptical that the FED would
Speaker 9: have enough good data to go in September, but you know,
Speaker 9: today's data was certainly good. We remember, we still have
Speaker 9: a bunch of prints before then, so we still have
Speaker 9: two more inflation data. Plus we have all the PC
Speaker 9: numbers as well as the spending and payrolls, right, so
Speaker 9: we have all of the important data that we're going
Speaker 9: to get over the next couple of months. And you know,
Speaker 9: if that turns around and this happens to be the
Speaker 9: weakest inflation print over the over that three month period,
Speaker 9: then maybe September is off the table, but the market
Speaker 9: certainly is pricing for a September cut. I think what's
Speaker 9: what's what's important, though, is that we were also priced
Speaker 9: in now for another cut after that in September November.
Speaker 9: Excuse me, so, so basically the market is starting to
Speaker 9: price for a string of cuts as opposed to just
Speaker 9: one and then a pause for a little while.
Speaker 2: I got one minute, that's I'm so sorry. How does
Speaker 2: our world change if we get a close of three
Speaker 2: point ninety nine percent on the ten year yield?
Speaker 3: I don't think anybody's ready for that.
Speaker 9: Yeah, well, it doesn't change a ton of ton, but
Speaker 9: it what the tenuere going down that low? You would
Speaker 9: see lower mortgage rates, right, So you would see, certainly,
Speaker 9: I think some corporates start to come in and maybe
Speaker 9: pre refinance some higher coupon debt that they issued, say
Speaker 9: two or three years ago. So you can end up
Speaker 9: having a situation where ironically lower rates leads to easier
Speaker 9: financial conditions, and that actually might work against what the
Speaker 9: FED wants to do, or do the Fed's work for them.
Speaker 9: So certainly, certainly, though, you're only going to get there
Speaker 9: if the market is more convinced that the Fed's going
Speaker 9: to cut pretty aggressively our Jersey.
Speaker 2: Thank you so much, greatly appreciate it. This is the
Speaker 2: Bloomberg Saveillance Podcast, bringing you the best in economics, finance, investment,
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