WEBVTT - Bloomberg Surveillance TV: July 30, 2024 0:00:00.120 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.240 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:36.879 Terminal and the Bloomberg Business app. We begin with our 0:00:36.880 --> 0:00:40.280 top story, the Groat rotation taking a breather going into 0:00:40.320 --> 0:00:43.400 Microsoft earnings after the closing bow. Bob Dollar Crossmark writing 0:00:43.479 --> 0:00:47.000 this small cats typically outperform in the early stages of 0:00:47.120 --> 0:00:51.080 economic expansions. We caution against chasing these gains at such 0:00:51.080 --> 0:00:54.280 a late stage of the cycle, even though cheap valuations 0:00:54.320 --> 0:00:57.720 may offer some cushion. Bob joined us now for more Bob, 0:00:57.720 --> 0:00:59.360 what ift to catch up with you, buddy. As always, 0:00:59.400 --> 0:01:02.360 let's look ahead of the earnings later. Microsoft kicks it 0:01:02.400 --> 0:01:05.280 all off for the Max seven numbers that report this week. 0:01:05.319 --> 0:01:07.400 What are you looking for and how do you gauge 0:01:07.440 --> 0:01:10.200 what investors are woulding to reward and what they seem 0:01:10.319 --> 0:01:12.639 like they want to punish over the last few weeks. 0:01:13.440 --> 0:01:16.560 I think the bar is high for these companies, Jonathan, 0:01:17.040 --> 0:01:19.840 and they're going to have to make those numbers more 0:01:19.920 --> 0:01:22.800 likely exceed them for the stocks to be okay. 0:01:23.440 --> 0:01:25.160 People are looking for excuses to. 0:01:25.120 --> 0:01:28.840 Trim these names and oh they just reported, Yeah, I 0:01:28.840 --> 0:01:30.199 own some of them, let. 0:01:30.120 --> 0:01:30.640 Me trim it. 0:01:30.720 --> 0:01:35.120 I think that's the general trend in these names expectations. 0:01:35.160 --> 0:01:39.000 I Danives of Wetbush with even bigger expectations, is looking 0:01:39.000 --> 0:01:41.360 for an even bigger rally in big tech. We believe 0:01:41.440 --> 0:01:44.039 this week and the rest of two Q earnings will 0:01:44.080 --> 0:01:46.679 be a major positive catalyst for the tech sector. We 0:01:46.760 --> 0:01:49.360 expect tech stocks to be up another fifteen to twenty 0:01:49.360 --> 0:01:52.040 percent for the year, adding to the robust tech gains 0:01:52.280 --> 0:01:54.840 in the first half of twenty four Bob, what would 0:01:54.840 --> 0:01:59.560 deliver fifteen to twenty percent upside for tech stocks? Where's 0:01:59.560 --> 0:02:00.480 that going to come from? 0:02:00.920 --> 0:02:03.880 There in lies the debate that we're going to have 0:02:04.000 --> 0:02:08.120 to have a further leg in AI. We're going to 0:02:08.200 --> 0:02:13.639 have to have exceeding earnings expectations. Earning estimates moving up 0:02:14.040 --> 0:02:16.320 in my view, to get another fifteen to twenty percent. 0:02:16.360 --> 0:02:17.800 People own these stocks. 0:02:18.040 --> 0:02:21.600 It's not like they're undiscovered, so to buy more of them, 0:02:21.919 --> 0:02:24.480 we're going to need better news that it's hard for 0:02:24.480 --> 0:02:25.440 you and media anticipate. 0:02:25.520 --> 0:02:27.359 We should talk about the flip side of that, which 0:02:27.440 --> 0:02:29.680 is how much more downside could there potentially be in 0:02:29.720 --> 0:02:32.520 the tech sector. John was talking about Bank of America research, 0:02:32.800 --> 0:02:36.239 saying time to show monetization. Since the first quarter, there 0:02:36.360 --> 0:02:41.160 is nine dollars spended in capex revision for every one 0:02:41.240 --> 0:02:44.280 dollar in additional sales of hyperscalers. In other words, we're 0:02:44.280 --> 0:02:47.440 not seeing it translate into profits. So directly, are you 0:02:47.520 --> 0:02:49.639 seeing that as a reason to sell some of these 0:02:49.639 --> 0:02:52.119 stocks in an ongoing basis or do you think that's 0:02:52.160 --> 0:02:55.079 been basically what's behind the declines that we've seen so far. 0:02:56.040 --> 0:02:58.560 I think that's what's behind the decline. That doesn't mean 0:02:58.600 --> 0:02:59.760 there isn't more of that to. 0:03:01.440 --> 0:03:01.840 Repeat. 0:03:02.080 --> 0:03:05.000 The people have big profits in these stocks and they 0:03:05.080 --> 0:03:07.720 see other stocks beginning to move and sort of trim 0:03:07.760 --> 0:03:09.120 these to buy some of the others. 0:03:09.480 --> 0:03:11.400 I'm not convinced that rotation. 0:03:11.160 --> 0:03:14.040 Is over, which generally means for a sloppy market as 0:03:14.080 --> 0:03:17.200 we've seen this rotation here in the months of July. 0:03:17.360 --> 0:03:20.400 The market's kind of move sidewise as people are trying 0:03:20.400 --> 0:03:22.880 to figure all out. As you used the word earlier, 0:03:23.240 --> 0:03:24.040 it's confusing. 0:03:24.520 --> 0:03:26.880 Yes, that's the story of the entire year. In the 0:03:26.919 --> 0:03:29.239 past couple of years, there is this issue. You said 0:03:29.240 --> 0:03:32.520 that you're not convinced that the rotation is over. The 0:03:32.639 --> 0:03:35.520 rotation has been curious because it's been marked by the 0:03:35.560 --> 0:03:39.120 companies that are most leveraged to the economic cycle at 0:03:39.120 --> 0:03:42.280 a time when we're talking about weakening, we're talking about cooling, 0:03:42.480 --> 0:03:45.800 we're talking about companies disappointing, and talking about consumers that 0:03:45.840 --> 0:03:47.120 are very pre sensitive. 0:03:47.440 --> 0:03:48.440 How does that make sense? 0:03:49.400 --> 0:03:51.160 It doesn't in my view. 0:03:51.200 --> 0:03:54.360 I agree with your set of statements and trying to 0:03:54.360 --> 0:03:58.240 square the circle. Look, people have gotten very complacent. In 0:03:58.320 --> 0:04:01.640 my view, the economy is just fine. Earnings will be 0:04:01.760 --> 0:04:05.600 good to Fed'll get inflation down to two. I'll hold 0:04:05.640 --> 0:04:08.720 my nose and buy stocks at twenty two times forward 0:04:08.760 --> 0:04:11.960 twenty six times trailing earnings. 0:04:11.720 --> 0:04:14.040 That's our hard road for me to ride, I. 0:04:14.080 --> 0:04:16.360 Have to say, Bob, I think everyone once said both ways. 0:04:16.400 --> 0:04:18.480 When inflation was up and rates for climbing, we were 0:04:18.520 --> 0:04:21.880 talking about wider margins, better margins because they had pricing power. 0:04:22.200 --> 0:04:25.040 Doesn't the opposite apply here, Bob, that when you start 0:04:25.080 --> 0:04:29.159 to see disinflation, even more disinflation in our future, it 0:04:29.279 --> 0:04:31.680 just means a loss of pricing power, which goes back 0:04:31.720 --> 0:04:33.640 to the point you're trying to make, which ultimately is 0:04:34.040 --> 0:04:37.560 why by cyclicals here. Isn't that the biggest headwind to that? 0:04:37.600 --> 0:04:37.920 Bet? 0:04:38.520 --> 0:04:39.360 I think that's right. 0:04:39.440 --> 0:04:41.400 And the companies are waking up to the fact that 0:04:41.440 --> 0:04:44.800 they've moved prices up and they're starting to get resistance, 0:04:46.240 --> 0:04:50.120 particularly in the mead income consumers, and that's new over 0:04:50.120 --> 0:04:51.600 the last bunch of weeks. 0:04:51.800 --> 0:04:54.360 And that can't be sustained without more weakening. So what 0:04:54.360 --> 0:04:54.880 do they do. 0:04:55.200 --> 0:04:57.840 They say, we got to cut costs somewhere, and maybe 0:04:57.880 --> 0:04:59.840 we won't hire a worker or two, maybe we'll let 0:04:59.839 --> 0:05:02.200 it or two go. And that's why you're starting to 0:05:02.240 --> 0:05:04.200 get some sloppiness and the employment data. 0:05:04.279 --> 0:05:06.400 So we've got a decent idea of what you don't like, 0:05:06.640 --> 0:05:08.400 what you want to stay away from. Give us an 0:05:08.440 --> 0:05:11.640 idea of what you do like, but you gravitating towards I. 0:05:11.760 --> 0:05:17.359 Come back to the common factors of earnings, persistence, earnings predictability, 0:05:17.480 --> 0:05:21.239 and strong free cash flow. That's my defense, if you will, 0:05:21.680 --> 0:05:23.479 against the kinds of things we're. 0:05:23.279 --> 0:05:26.279 Talking about here. Those stocks have done fine as the 0:05:26.320 --> 0:05:27.280 market has moved up. 0:05:27.320 --> 0:05:29.320 I think they'll show their stuff even more if we 0:05:29.360 --> 0:05:32.000 get into a selling squall or some sort of sloppy 0:05:32.040 --> 0:05:32.800 sidewise action. 0:05:33.160 --> 0:05:35.839 Is there a reason why you just are focusing on stocks? 0:05:35.880 --> 0:05:37.680 Is that just because that was the conversation? Are you 0:05:37.720 --> 0:05:40.040 just trying to avoid bonds that stocks are both the 0:05:40.160 --> 0:05:43.360 risk factor as well as the havens factor depending on. 0:05:43.240 --> 0:05:47.159 Where you go, only because that's the conversation. I would 0:05:47.200 --> 0:05:51.880 own some bonds here. Look, the economy is slowing. While 0:05:52.160 --> 0:05:55.080 second quarter earnings have been just fine, third and fourth 0:05:55.200 --> 0:05:58.880 quarter earnings estimate revisions have been to the downside, So 0:05:59.000 --> 0:06:01.400 the sloppiness is kicking in. And when that happens, you 0:06:01.520 --> 0:06:03.280 probably won't want to own a bond or two. 0:06:04.040 --> 0:06:06.280 Which kind is this something that you're worried about in 0:06:06.360 --> 0:06:09.360 terms of longer term or a medium term is sort 0:06:09.400 --> 0:06:11.440 of the sweet spot? Or do you think that right 0:06:11.480 --> 0:06:13.240 now it's time to lock things in. 0:06:14.360 --> 0:06:18.400 I would own quality, meaning more treasuries than corporates and 0:06:18.440 --> 0:06:19.000 high yields. 0:06:19.040 --> 0:06:21.480 Look corporate highield spreads are pretty tight. 0:06:21.240 --> 0:06:24.719 As you know, and if and as the economy weekends, 0:06:24.800 --> 0:06:28.560 the questions about how long will that weakness last probably 0:06:28.600 --> 0:06:32.080 causes these very tight spreads to widen some and therefore 0:06:32.080 --> 0:06:33.520 the Gouvey's probably outperformed. 0:06:33.640 --> 0:06:36.000 Interesting boff. Thank you, sir. I appreciate the updates. It's 0:06:36.000 --> 0:06:38.480 going to say across smock you as well, sir. Think 0:06:38.520 --> 0:06:51.840 weake ahead. It's time to the election. With fewer than 0:06:51.839 --> 0:06:54.640 one hundred days until voters head to the polls. If 0:06:54.640 --> 0:06:57.640 re elected former President Donald Trump is why they expected 0:06:57.720 --> 0:07:00.520 to a point, a so called Capitol Hill cabinet full 0:07:00.680 --> 0:07:04.800 of congressman A potential shortlist includes Republican Senator Bill Haggerty, 0:07:05.080 --> 0:07:07.919 who is being floated as a pick for Treasury Secretary. 0:07:07.920 --> 0:07:10.560 The senator joins us right now, Senator, it's great to 0:07:10.560 --> 0:07:12.440 catch up me, sir. We tried to do this last week, 0:07:12.480 --> 0:07:14.640 so this is our second attempt. I think this one's 0:07:14.640 --> 0:07:15.120 going to work. 0:07:15.280 --> 0:07:17.160 Good to be back with you, Jonathan Lisa, thank you. 0:07:17.280 --> 0:07:19.360 Let's start with foreign exchange if we can, Sir. We 0:07:19.400 --> 0:07:21.280 caught up with the former president here at Bloomberg just 0:07:21.320 --> 0:07:24.119 a number of weeks ago, and in Bloomberg Business Week. 0:07:24.200 --> 0:07:26.320 He told us that he believes we have a bit 0:07:26.360 --> 0:07:29.360 of a currency problem in the United States for America. Senator, 0:07:29.400 --> 0:07:31.720 I would love your perspective on that, whether you agree 0:07:31.840 --> 0:07:33.960 with a former president on that issue, and what kind 0:07:33.960 --> 0:07:36.240 of policy tools do you think the government has to 0:07:36.320 --> 0:07:36.880 address it. 0:07:37.880 --> 0:07:39.480 We have a number of problems with the economy. I 0:07:39.480 --> 0:07:41.840 think the biggest one, however, and it's related is inflation, 0:07:42.520 --> 0:07:45.240 and inflation is driving higher interest rates. Of course, that 0:07:45.280 --> 0:07:47.960 has a direct impact on our currency. But President Trump's 0:07:47.960 --> 0:07:51.040 policies will have an immediate impact to bring inflation down 0:07:51.080 --> 0:07:54.320 because he's going to end this administration's war on fossil fuels, 0:07:54.520 --> 0:07:57.880 bring energy costs down, go back to a deregulatory construct 0:07:57.880 --> 0:08:00.720 as he did in the prior administration, taking the regulatory 0:08:00.720 --> 0:08:03.600 and compliance barriers. All of these will have a lowering 0:08:03.640 --> 0:08:05.680 impact on cost here in America. It will have a 0:08:05.720 --> 0:08:09.040 lower impact on inflation. Those will be directly beneficiary, and 0:08:09.040 --> 0:08:11.760 it basically help make the case then to bring rates 0:08:11.760 --> 0:08:14.920 down and therefore bring our currency into a different position. 0:08:15.040 --> 0:08:17.080 The Senator, there are two other proposals as well, which 0:08:17.080 --> 0:08:19.920 I'm sure you're familiar with. Much higher tariffs are much 0:08:19.960 --> 0:08:22.880 tougher stance on immigration. I'm not going to sit here 0:08:22.880 --> 0:08:24.680 and say whether that's the right or wrong thing to do. 0:08:24.760 --> 0:08:27.680 I just want to talk about outcomes and consequences. Deutsche Bank, 0:08:27.840 --> 0:08:30.680 like others on Wall Street, Senators you know, have pointed 0:08:30.680 --> 0:08:33.280 out the tariffs and their associated stronger implications for the 0:08:33.360 --> 0:08:36.079 dollar are significantly more likely to be the dominant market 0:08:36.120 --> 0:08:39.959 outcome than policies to pursue a week of dollar. Senator, 0:08:40.000 --> 0:08:43.199 my question to you would be, why wouldn't higher tariffs 0:08:43.240 --> 0:08:46.920 and a toughest stance and immigration ultimately just lead to stagflation. 0:08:48.120 --> 0:08:50.880 Look, I'm fully aware of the concerns surrounding tariffs. Will 0:08:50.920 --> 0:08:53.520 let me make this point. The United States of America 0:08:53.600 --> 0:08:56.000 has the lowest tariff barriers of any major economy in 0:08:56.040 --> 0:08:58.560 the world. The converse of that statement is that our 0:08:58.600 --> 0:09:02.080 major trading partners do not have the similar terroists. They 0:09:02.080 --> 0:09:04.240 have much higher tariffs. Therefore, we have a real lack 0:09:04.280 --> 0:09:06.959 of reciprocity. That's not fair. That's something that needs to 0:09:06.960 --> 0:09:08.920 be addressed. Many of these issues date back all the 0:09:08.920 --> 0:09:11.560 way to World War Two. But there's come a time 0:09:11.600 --> 0:09:13.720 and a place to step up an address than President 0:09:13.760 --> 0:09:15.800 Trump wants to see them addressed. We want to see 0:09:15.880 --> 0:09:18.679 more reciprocal and fair trading terms. The time has come 0:09:18.720 --> 0:09:20.720 to get that accomplished, Senator. 0:09:20.880 --> 0:09:23.440 From a market perspective, people are struggling with these two 0:09:23.480 --> 0:09:26.600 goals sort of national security fairness on one hand, and 0:09:26.640 --> 0:09:29.920 on the other hand, the idea of the advantage of 0:09:29.960 --> 0:09:34.640 a weaker currency for trade purposes, which takes permanence pre eminence. 0:09:36.000 --> 0:09:38.720 Well, I think it's something that always has to be balanced, Lisa, 0:09:38.720 --> 0:09:41.319 and I think you'll see any administration do their best 0:09:41.360 --> 0:09:43.040 to do it. I think President Trump did an excellent 0:09:43.120 --> 0:09:46.079 job of that during his first administration. The playbook is 0:09:46.160 --> 0:09:48.920 laid out there. We were strong, we were tough with China. 0:09:49.080 --> 0:09:51.480 At the same time, we brought economic growth that was 0:09:51.480 --> 0:09:53.320 twice the rate of any of the major economy at 0:09:53.360 --> 0:09:55.800 the same time here in America. So we can do both. 0:09:55.840 --> 0:09:57.400 We can walk and shoo them at the same time. 0:09:57.440 --> 0:09:59.559 I think that's the challenge. The most important thing, though, 0:09:59.600 --> 0:10:01.720 is that and Trump will come in and in these 0:10:01.720 --> 0:10:05.480 reckless policies domestically that have created inflation that has caused 0:10:05.480 --> 0:10:08.160 so many knog on effects. Again, back to energy independence, 0:10:08.280 --> 0:10:10.080 we need to get there. Not only will it be 0:10:10.080 --> 0:10:12.599 important for lowering inflation here, but it'll be an important 0:10:12.679 --> 0:10:15.920 geostrategic tool as we become much stronger allies who were 0:10:15.920 --> 0:10:19.640 able to export our energy to places like Europe and Asia. 0:10:19.679 --> 0:10:20.559 All right, let's go there. 0:10:20.600 --> 0:10:22.520 You've mentioned it a couple of times, this idea of 0:10:22.880 --> 0:10:25.800 war on fossil fuels, as well as the idea of 0:10:26.160 --> 0:10:29.280 not really achieving the goal of energy and dependence. We're 0:10:29.320 --> 0:10:31.719 pumping more oil in the United States. We're producing more 0:10:31.760 --> 0:10:35.280 oil than ever before, more than thirteen million barrels a day. 0:10:35.559 --> 0:10:39.440 This is something unseen before in terms of production from 0:10:39.520 --> 0:10:41.920 any other nation. How can you say that it's a 0:10:41.920 --> 0:10:43.800 war on fossil fuels at a time where it is. 0:10:43.760 --> 0:10:45.679 Record production at LISTA. 0:10:45.720 --> 0:10:47.520 It clearly is a war on fossil fuels. Because Joe 0:10:47.520 --> 0:10:49.559 Biden came in and took federal lands off the map 0:10:49.760 --> 0:10:52.720 immediately upon taking office. That's a quarter of our capacity 0:10:52.840 --> 0:10:55.640 right there. What you're not saying is that there was 0:10:55.679 --> 0:10:58.520 a trajectory that was much more rapid, much higher. We 0:10:58.559 --> 0:11:01.160 took ourselves off of that growth through and we flattened it. 0:11:01.360 --> 0:11:03.560 We continue to produce, but demand is outstripping it. Think 0:11:03.600 --> 0:11:05.720 about the demand for electricity here in America. If you 0:11:05.720 --> 0:11:08.240 think about what we're going to need for artificial intelligence, 0:11:08.360 --> 0:11:10.800 the electrification of the grid, We've got to get back 0:11:10.840 --> 0:11:13.199 into the energy production business full blast. We have the 0:11:13.240 --> 0:11:15.960 technology to do it. This administration has done everything they 0:11:15.960 --> 0:11:17.640 can to slow that down. We need to get back 0:11:17.640 --> 0:11:19.719 on a rapid growth path that'll put us on a 0:11:19.800 --> 0:11:23.120 trajectory to be not only stronger here domestically in lower inflation, 0:11:23.160 --> 0:11:25.439 but also stronger partners with our allies. 0:11:25.440 --> 0:11:28.160 So, Senator, right now, we're producing thirteen point three million 0:11:28.240 --> 0:11:31.800 powers of crude every single day, as Lisa points it out, 0:11:31.840 --> 0:11:34.079 that's a record. It's more than anyone on the planet. 0:11:34.400 --> 0:11:36.480 How much crude do you think America should be and 0:11:36.520 --> 0:11:37.760 can be produc sick? 0:11:38.760 --> 0:11:40.520 We should be producing more than anybody else in the 0:11:40.559 --> 0:11:42.280 world as we are. We need to produce more LNG 0:11:42.800 --> 0:11:45.080 and we need to become the strongest energy partner there is. 0:11:45.200 --> 0:11:47.640 You think about pipeline capacity and the difficulty of getting 0:11:47.640 --> 0:11:50.920 permits of this administration. You think about the difficulty beginning 0:11:50.960 --> 0:11:53.520 or refinery started here in America. All of these log 0:11:53.600 --> 0:11:56.840 jms and difficulties make it less possible for us, make 0:11:56.880 --> 0:11:58.720 it more difficult for us to be the best possible 0:11:58.720 --> 0:11:59.560 ally that we could. 0:11:59.640 --> 0:12:00.560 We need to expand it. 0:12:00.600 --> 0:12:02.480 We need to realize that this is a true source 0:12:02.520 --> 0:12:04.839 of competitive advantage for the United States of America. 0:12:05.200 --> 0:12:06.000 Let's exploit it. 0:12:06.160 --> 0:12:08.160 Let's talk about who is an ally and who isn't 0:12:08.200 --> 0:12:10.480 an ally. There's lots of conversations about what's going to 0:12:10.480 --> 0:12:13.760 happen we trade policy and China. I think we've sort 0:12:13.760 --> 0:12:16.880 of exhausted that conversation many times after the last few weeks, Senator, 0:12:16.920 --> 0:12:19.120 I want to talk about Mexico. I want your view 0:12:19.160 --> 0:12:22.480 on Mexico. We saw from Elon Musk of Tesla that 0:12:22.559 --> 0:12:25.480 he's holding back investment decisions in the country because he 0:12:25.559 --> 0:12:27.520 thinks there might be a change in the next year 0:12:27.760 --> 0:12:31.160 that makes it difficult to produce automobiles over in Mexico. 0:12:31.200 --> 0:12:35.520 We've heard similar thoughts from aller manufacturers elsewhere worldwide. What 0:12:35.600 --> 0:12:38.480 is happening in Mexico and what kind of changes would 0:12:38.480 --> 0:12:39.360 you like to see? 0:12:40.080 --> 0:12:43.079 Well, in twenty twenty six, the USMCA is up for renegotiation. 0:12:43.160 --> 0:12:45.520 I think one of the greatest concerns is the fact 0:12:45.559 --> 0:12:48.280 that Chinese ev makers are looking to in run the 0:12:48.320 --> 0:12:51.840 Usmcit in run tariffs and use the USMCA in Mexico 0:12:51.880 --> 0:12:54.040 market in particular, as it means to get into the 0:12:54.120 --> 0:12:58.079 US market and they're using their subsidized product destroy the 0:12:58.120 --> 0:13:00.199 US market. That's going to have to take a very 0:13:00.200 --> 0:13:02.800 solid look. I think also with respect to Mexico itself, 0:13:03.160 --> 0:13:06.960 we've seen some very concerning behavior there the prior administration 0:13:07.040 --> 0:13:10.520 there under Amlow actually nationalizing American company's assets. 0:13:10.640 --> 0:13:11.679 We've got to address that. 0:13:11.760 --> 0:13:14.000 I intend to speak with the new administration there very 0:13:14.000 --> 0:13:15.960 soon about what we can do to make certain we 0:13:16.040 --> 0:13:19.600 have much better and much stronger relationship there with Mexico 0:13:19.640 --> 0:13:20.400 in fairer terms. 0:13:20.640 --> 0:13:21.000 Senator. 0:13:21.000 --> 0:13:22.560 The last time we tried to talk, you were at 0:13:22.559 --> 0:13:25.720 a bitcoin conference, and this was our cryptocurrency conference, and 0:13:25.760 --> 0:13:29.400 that was where the former President Trump was speaking and fundraising. 0:13:29.480 --> 0:13:31.560 And we've been asking this question on the show. 0:13:32.200 --> 0:13:32.960 Why bitcoin? 0:13:33.200 --> 0:13:33.760 Why now? 0:13:33.880 --> 0:13:38.199 Why crypto assets? What's sort of the motivation to really 0:13:38.320 --> 0:13:41.439 embrace a network of crypto assets and become the preeminent 0:13:41.960 --> 0:13:45.520 network on the planet from a republican sort of stance. 0:13:45.960 --> 0:13:50.480 Is this something that is concrete and why, Lisa? 0:13:50.640 --> 0:13:52.880 I think this is something that has evolved over time. 0:13:52.960 --> 0:13:56.480 I first began looking into crypto in the previous administration 0:13:56.559 --> 0:13:59.120 in twenty eighteen. That was my first engagement. I initially 0:13:59.320 --> 0:14:01.560 started at a p of skepticism, as I think many of 0:14:01.559 --> 0:14:04.120 my colleagues do. But when I begin to understand the 0:14:04.160 --> 0:14:07.880 underlying technology and realizing the potential for dramatic productivity gains, 0:14:08.280 --> 0:14:09.800 what I thought to myself is, we need to make 0:14:09.840 --> 0:14:11.760 certain that it happens here in America. The last thing 0:14:11.760 --> 0:14:13.959 we want is to see what happened with the semiconductor 0:14:13.960 --> 0:14:16.440 industry where it got pushed off shore and weakened us 0:14:16.440 --> 0:14:19.240 from a geopolitical standpoint. We need to see this innovation 0:14:19.320 --> 0:14:22.400 happening here. I've been in many conversations with President Trump. 0:14:22.560 --> 0:14:25.520 His thinking is likewise involved, and he's embracing the fact 0:14:25.560 --> 0:14:27.680 that this has tremendous potential for America. 0:14:27.720 --> 0:14:28.800 We want it to evolve here. 0:14:28.840 --> 0:14:31.360 We want to create the ecosystem for it to thrive here, 0:14:31.520 --> 0:14:32.960 and the last thing we need to do is push 0:14:33.000 --> 0:14:36.400 it off shore. However, the current administration has done everything 0:14:36.480 --> 0:14:40.160 they can to attack this industry, to push it offshore again, 0:14:40.240 --> 0:14:44.360 to use the SEC, the CFTC, every tool at their 0:14:44.400 --> 0:14:47.080 disposal to come in and attack this industry and refuse 0:14:47.160 --> 0:14:49.440 to provide it with any time for a regulatory framework. 0:14:49.720 --> 0:14:52.280 President Trump made the statement at the Bitcoin conference that 0:14:52.320 --> 0:14:54.640 one of the first things he'll do is change out 0:14:54.560 --> 0:14:57.920 that the administration's leadership, Gary Ginzlury said will be fired. 0:14:58.000 --> 0:14:59.280 That brought people to. 0:14:59.200 --> 0:15:02.400 Their feet in al He's going to end Operation Chokepoint 0:15:02.480 --> 0:15:04.880 that's been taking place in the crypto industry here in America, 0:15:05.040 --> 0:15:06.720 and he's going to try to create the environment here 0:15:06.760 --> 0:15:08.720 where the industry can thrive, and we'll see the next 0:15:08.760 --> 0:15:11.360 wave of innovation happening right here in America. 0:15:11.560 --> 0:15:13.680 Senator, We've got to dance around the issue about your future. 0:15:13.720 --> 0:15:15.200 So this is how a frame mat. I've got twenty 0:15:15.200 --> 0:15:17.360 seconds left on the clock. Your favorite city to live 0:15:17.400 --> 0:15:20.640 in Nashville, Tokyo or Washington, d C. 0:15:21.120 --> 0:15:23.880 Which one, No, it has to be Nashville, Tennessee. And 0:15:23.880 --> 0:15:25.480 if you've been there at the crypto conference, you've ever 0:15:25.520 --> 0:15:28.560 seen the energy there. It is absolutely wonderful. What's happening 0:15:28.560 --> 0:15:30.640 broadly across my state. That's why so many people are 0:15:30.680 --> 0:15:31.120 moving there. 0:15:31.240 --> 0:15:45.720 Senator, thank you, sir. Beyond big tech investors also awaiting 0:15:45.800 --> 0:15:48.360 the FED decision. The fmc's two day meeting kicking off 0:15:48.360 --> 0:15:51.720 today fetcha jpower widely expected to give a soft signal 0:15:51.960 --> 0:15:55.440 for a September rate cut, to discuss Tiffany wildingger Pimco 0:15:55.600 --> 0:15:58.560 joint is alongside Stevehshutto of mis zero. To both of you, 0:15:58.560 --> 0:16:00.360 thanks for being miters. Tiffany, I want across to you 0:16:00.480 --> 0:16:02.920 first and get your thoughts on what we can't expect 0:16:02.960 --> 0:16:05.760 tomorrow afternoon. What kind of changes you're looking for in 0:16:05.800 --> 0:16:08.240 the statement of what you expect the Channel will emphasize 0:16:08.560 --> 0:16:09.480 in the news conference. 0:16:11.320 --> 0:16:13.080 Well, I think he's going to say that they are 0:16:13.080 --> 0:16:17.280 more confident that inflation is starting to move back towards 0:16:17.360 --> 0:16:21.040 their goal after progress had stalled in the first half 0:16:21.040 --> 0:16:23.840 of this year. Of course, the fact that shelter inflation 0:16:24.760 --> 0:16:28.000 has shown more progress and the last few inflation prints 0:16:28.000 --> 0:16:29.920 is going to help in that, you know. But I 0:16:29.960 --> 0:16:32.160 don't think that they're going to you know, I don't 0:16:32.160 --> 0:16:33.520 think they're going to be in a huge rush. We 0:16:33.560 --> 0:16:36.760 think they are going to signal a September cut. But 0:16:36.800 --> 0:16:40.600 the economy appears to be doing okay here, so you know, 0:16:40.640 --> 0:16:43.040 I think, you know, in terms of market pricing, you know, 0:16:43.080 --> 0:16:46.120 they're the FED is very focused on I think cutting 0:16:46.160 --> 0:16:48.480 maybe at a once a quarter pace, you know, taking 0:16:48.480 --> 0:16:50.640 it slow. At least at first, unless the economy appears 0:16:50.680 --> 0:16:53.080 to be rolling over more heavily, and I mean it doesn't, so, 0:16:53.400 --> 0:16:55.120 you know, I think he could actually come across as 0:16:55.120 --> 0:16:57.760 being a bit more balanced. Although we do think they 0:16:57.760 --> 0:16:59.640 are going to cut in September relative to what markets 0:16:59.640 --> 0:16:59.960 are priced. 0:17:00.400 --> 0:17:03.120 We don't get an update to their assumptions their forecasts 0:17:03.240 --> 0:17:06.479 this time around. We'll get them in September, I believe, Tiffany. 0:17:06.520 --> 0:17:09.480 I'm looking at their current forecast for unemployment. They've got 0:17:09.480 --> 0:17:12.120 that for twenty twenty four four percent. That's below where 0:17:12.119 --> 0:17:14.840 we are right now. You mentioned maybe them going in 0:17:14.920 --> 0:17:18.480 September and cunning once every quarter. What would your assumptions 0:17:18.520 --> 0:17:21.359 be in the labor market for unemployment, given that's your 0:17:21.400 --> 0:17:22.440 call for interest rights. 0:17:24.119 --> 0:17:27.440 Yeah, I mean so we think unemployment probably ends around 0:17:27.520 --> 0:17:30.479 where it is now, you know, for too, maybe a 0:17:30.480 --> 0:17:31.240 little bit higher. 0:17:31.280 --> 0:17:34.120 You know, the labor markets are are normalizing, you know. 0:17:34.040 --> 0:17:37.080 But we think the important fact here is that you 0:17:37.240 --> 0:17:40.679 haven't seen a lot of you know, actual layoffs. If 0:17:40.720 --> 0:17:44.439 you just look at the level of employment, employment you know, 0:17:44.720 --> 0:17:48.040 has not really declined. Those are usually the hallmarks of recession. So, 0:17:48.160 --> 0:17:49.920 you know, we think we're seeing a labor market here, 0:17:49.960 --> 0:17:52.760 which is easing. Certainly, we've had a lot of supply, 0:17:52.960 --> 0:17:56.320 more supply coming into labor market as a result of immigration, you. 0:17:56.359 --> 0:17:58.280 Know, and that appears to be the story to us. 0:17:58.320 --> 0:18:00.560 And I think that still allows them, you know, to 0:18:00.680 --> 0:18:04.040 kind of you cut and do it at a pace 0:18:04.600 --> 0:18:06.640 that isn't hurried like we see in a recession. 0:18:06.920 --> 0:18:09.040 Steve Should, I know that you're sympathetic to the view 0:18:09.040 --> 0:18:11.080 that they don't have to rush. You've been talking about 0:18:11.119 --> 0:18:13.800 the potential for no cuts being actually okay for twenty 0:18:13.840 --> 0:18:16.520 twenty four, given the fact that there's plenty of momentum 0:18:16.600 --> 0:18:20.360 under the hood. Do you still feel that way that, frankly, 0:18:20.440 --> 0:18:24.480 all this talk about even cutting rates tomorrow is premature, 0:18:24.680 --> 0:18:26.320 and that you think they should really hold off and 0:18:26.359 --> 0:18:27.920 be more patient than many people think. 0:18:28.880 --> 0:18:31.399 I mean to answer you a question real specifically, they're winning. 0:18:32.160 --> 0:18:34.520