1
00:00:00,120 --> 00:00:06,800
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

2
00:00:11,640 --> 00:00:15,440
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

3
00:00:15,480 --> 00:00:18,680
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day

4
00:00:18,720 --> 00:00:22,280
Speaker 2: for insight from the best in markets, economics, and geopolitics

5
00:00:22,400 --> 00:00:24,920
Speaker 2: from our global headquarters in New York City. We are

6
00:00:24,920 --> 00:00:27,680
Speaker 2: live on Bloomberg Television weekday mornings from six to nine

7
00:00:27,720 --> 00:00:31,240
Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or

8
00:00:31,320 --> 00:00:33,960
Speaker 2: anywhere else you listen, and as always on the Bloomberg

9
00:00:34,040 --> 00:00:37,440
Speaker 2: Terminal and the Bloomberg Business app. David Rosenberg, President of

10
00:00:37,520 --> 00:00:40,720
Speaker 2: Rosenberg Research, writing quote, there is nothing in the CPI

11
00:00:40,800 --> 00:00:43,239
Speaker 2: report to get the FED in a position to be

12
00:00:43,280 --> 00:00:46,640
Speaker 2: cutting raids anytime soon. I'm pleased to say that David

13
00:00:46,720 --> 00:00:48,720
Speaker 2: joined us now for more. David, great to catch up

14
00:00:48,720 --> 00:00:50,159
Speaker 2: with you, sir, It's been too long. I just think

15
00:00:50,200 --> 00:00:52,839
Speaker 2: you're perfectly positioned to run through this for us in detail,

16
00:00:53,159 --> 00:00:55,840
Speaker 2: the pieces of this that will spill over to PCEE,

17
00:00:55,960 --> 00:00:58,560
Speaker 2: the bits that matter to the FED, and ultimately the

18
00:00:58,600 --> 00:01:00,680
Speaker 2: parts that won't right.

19
00:01:01,200 --> 00:01:05,119
Speaker 3: Well. Look, I think that the bottom line is that

20
00:01:05,120 --> 00:01:08,160
Speaker 3: the FED does not target the CPI or the core CPI.

21
00:01:08,920 --> 00:01:12,360
Speaker 3: It targets the PC to flavor and the core PC

22
00:01:12,560 --> 00:01:16,840
Speaker 3: to flavor, and I think that one of the I

23
00:01:16,880 --> 00:01:21,880
Speaker 3: think more welcoming elements in yesterday's CPI data was the

24
00:01:21,880 --> 00:01:25,600
Speaker 3: fact that medical care goods and services were flat as

25
00:01:25,600 --> 00:01:29,520
Speaker 3: a pancake, and that features much larger in the PC

26
00:01:29,680 --> 00:01:33,640
Speaker 3: to flavor, And I wouldn't be surprised when you rewate

27
00:01:33,760 --> 00:01:37,399
Speaker 3: the components of the CPI to the PC to flavor

28
00:01:38,000 --> 00:01:40,800
Speaker 3: that the core ends up coming in closer to point

29
00:01:40,840 --> 00:01:42,880
Speaker 3: three or point two than the point four we saw

30
00:01:42,880 --> 00:01:46,920
Speaker 3: on the core CPI. So my view was that yesterday's

31
00:01:46,920 --> 00:01:51,000
Speaker 3: consumer Price report is going to be a distant memory

32
00:01:51,720 --> 00:01:54,680
Speaker 3: within the next three to four weeks, So I'm not

33
00:01:54,960 --> 00:01:57,160
Speaker 3: as fussed about it as a lot of the other

34
00:01:57,200 --> 00:01:58,680
Speaker 3: commentators you had on your show.

35
00:01:59,240 --> 00:02:01,720
Speaker 4: It seems like, David, that the markets agree with you.

36
00:02:01,840 --> 00:02:04,960
Speaker 4: Are the markets responding appropriately to report that you think

37
00:02:05,480 --> 00:02:07,120
Speaker 4: is maybe a bit misleading?

38
00:02:07,880 --> 00:02:11,000
Speaker 3: Well, look, the stock market is really operating on a

39
00:02:11,520 --> 00:02:18,600
Speaker 3: set of momentum and technical factors and not really I

40
00:02:18,600 --> 00:02:21,880
Speaker 3: don't think paying attention much to what's happening in the economy.

41
00:02:21,919 --> 00:02:23,840
Speaker 3: I mean, you have a stock market up thirty percent

42
00:02:23,880 --> 00:02:26,680
Speaker 3: in the past year thereabouts and earnings are up four percent,

43
00:02:27,919 --> 00:02:30,359
Speaker 3: so it's really been a multiple driven market. The bottom

44
00:02:30,360 --> 00:02:33,320
Speaker 3: market sold off moderately, as you would have expected on

45
00:02:33,360 --> 00:02:38,920
Speaker 3: a higher and expected especially core CPI print. But in

46
00:02:38,960 --> 00:02:41,400
Speaker 3: the overall scheme of things, I mean, you have people

47
00:02:41,400 --> 00:02:43,960
Speaker 3: on your show saying that, you know, inflation is taking

48
00:02:44,000 --> 00:02:48,760
Speaker 3: its time coming down, and inflation usually does that. It's

49
00:02:48,800 --> 00:02:51,360
Speaker 3: like a race between watching grass grow and pain dry.

50
00:02:51,440 --> 00:02:55,480
Speaker 3: It's not you know, Inflation isn't bitcoin or the CRB

51
00:02:55,639 --> 00:02:59,640
Speaker 3: index or Nvidia stock. It usually is glacial.

52
00:03:00,360 --> 00:03:01,520
Speaker 1: But the bigger picture is this.

53
00:03:01,680 --> 00:03:03,760
Speaker 3: You know, when we strip out the shelter components of

54
00:03:03,800 --> 00:03:06,919
Speaker 3: the CPI, which we all know are flawed in their

55
00:03:06,960 --> 00:03:11,720
Speaker 3: treatment that and their legged headline, inflation x shelter is

56
00:03:11,800 --> 00:03:15,000
Speaker 3: running at one point eight percent year of year. It's

57
00:03:15,040 --> 00:03:18,520
Speaker 3: already below target. This time last year it was running

58
00:03:18,520 --> 00:03:21,840
Speaker 3: at five percent. So I would just suggest let's move

59
00:03:21,880 --> 00:03:24,959
Speaker 3: away from focusing exclusively on the monthly wiggles on the

60
00:03:25,040 --> 00:03:28,080
Speaker 3: data and look at the bigger picture, because the broader

61
00:03:28,120 --> 00:03:31,680
Speaker 3: trends at inflation and core are moving down, and I

62
00:03:31,720 --> 00:03:35,080
Speaker 3: think moving down in a rather impressive fashion, notwithstanding yesterday's

63
00:03:35,160 --> 00:03:35,640
Speaker 3: data point.

64
00:03:35,840 --> 00:03:37,720
Speaker 4: I guess what strikes me David, it seems like the

65
00:03:37,760 --> 00:03:41,240
Speaker 4: balance of risks is perhaps a little bit more skewed

66
00:03:41,400 --> 00:03:44,840
Speaker 4: to higher inflation after this report, especially because it doesn't

67
00:03:44,840 --> 00:03:48,120
Speaker 4: seem like rates where they are now are particularly restrictive

68
00:03:48,120 --> 00:03:50,280
Speaker 4: when it comes to capital markets and when it comes

69
00:03:50,320 --> 00:03:54,200
Speaker 4: to risk asset valuations. So why should the Fed go

70
00:03:54,280 --> 00:03:56,280
Speaker 4: ahead with cutting rates at a time where it doesn't

71
00:03:56,320 --> 00:03:59,280
Speaker 4: seem like their higher rates are really affecting the economy

72
00:03:59,360 --> 00:04:02,520
Speaker 4: or markets And it seems like there still our questions

73
00:04:02,520 --> 00:04:03,280
Speaker 4: around inflation.

74
00:04:05,080 --> 00:04:10,000
Speaker 3: Well, there's no doubt that financial conditions have eased rather

75
00:04:10,080 --> 00:04:13,120
Speaker 3: dramatically in the course of the past few months, but

76
00:04:13,200 --> 00:04:16,520
Speaker 3: I don't think that's why the economy did as well

77
00:04:16,800 --> 00:04:19,640
Speaker 3: as it did last year and then of the fourth quarter.

78
00:04:19,720 --> 00:04:22,960
Speaker 3: It was really a lot of fiscal juice. It wasn't

79
00:04:23,000 --> 00:04:27,760
Speaker 3: really about financial conditions. You got a rapid decline in

80
00:04:27,800 --> 00:04:30,760
Speaker 3: the equity cost of capital, high yield spreads are super tight.

81
00:04:30,800 --> 00:04:32,840
Speaker 3: But where's the cap X boom coming out of that?

82
00:04:33,680 --> 00:04:36,160
Speaker 3: We're not really seeing it last year's story. I mean,

83
00:04:36,200 --> 00:04:38,680
Speaker 3: two thirds of the growth in the economy last year

84
00:04:39,200 --> 00:04:43,839
Speaker 3: came from the direct and indirect impact of fiscal stimulus, which,

85
00:04:43,839 --> 00:04:46,039
Speaker 3: frankly I wasn't expecting. I don't know if you were

86
00:04:46,080 --> 00:04:48,360
Speaker 3: expecting it. I wasn't expecting that the deficit was going

87
00:04:48,440 --> 00:04:51,680
Speaker 3: to expand twenty five percent last year the context of

88
00:04:51,720 --> 00:04:54,800
Speaker 3: a sub four percent on employment rate that's never happened before. Sides,

89
00:04:55,320 --> 00:04:57,919
Speaker 3: so a lot of the growth was really fiscal financial

90
00:04:57,920 --> 00:05:01,120
Speaker 3: conditions have eased, but I'm not really seeing dramatic impulse

91
00:05:02,200 --> 00:05:05,240
Speaker 3: on economic activity from the easy and financial conditions. And

92
00:05:05,279 --> 00:05:07,279
Speaker 3: the one thing I'm going to point out is, you know,

93
00:05:07,320 --> 00:05:10,160
Speaker 3: the FED is telling us increasingly that it is, you know,

94
00:05:10,200 --> 00:05:13,000
Speaker 3: shifting its focus from the month to month gyrations and

95
00:05:13,080 --> 00:05:15,880
Speaker 3: the data of course that grab the headlines until the

96
00:05:15,920 --> 00:05:18,440
Speaker 3: next month's data come out, and they're focused on what

97
00:05:18,480 --> 00:05:22,640
Speaker 3: business contacts are telling them. And quite frankly, when you

98
00:05:22,680 --> 00:05:25,800
Speaker 3: look at the swathe of comments coming out of the

99
00:05:25,839 --> 00:05:28,919
Speaker 3: base book, the latest facebook out of the FED, what

100
00:05:28,960 --> 00:05:32,200
Speaker 3: did it say? It said that businesses found it harder

101
00:05:32,560 --> 00:05:36,839
Speaker 3: to pass through higher cost to their consumers, who became

102
00:05:36,920 --> 00:05:40,760
Speaker 3: increasingly sensitive to price changes. So that's what's happening in

103
00:05:40,760 --> 00:05:43,440
Speaker 3: the real world and in the CPI world. We have

104
00:05:43,520 --> 00:05:46,720
Speaker 3: over forty percent of the items in that index are

105
00:05:46,839 --> 00:05:51,880
Speaker 3: imputed guesswork by bls statisticians as the proteins to services.

106
00:05:52,440 --> 00:05:54,000
Speaker 3: So when you look at the real world, what did

107
00:05:54,040 --> 00:05:57,280
Speaker 3: the Walmart CFO tell us a couple of weeks ago

108
00:05:57,440 --> 00:06:01,600
Speaker 3: about pricing trends at Walmart, the world's largest retailer, is

109
00:06:01,640 --> 00:06:05,719
Speaker 3: that their pricing momentum is actually dissipating. So I'm not

110
00:06:05,760 --> 00:06:09,400
Speaker 3: getting too fussed by one monthly CPI number, that's for sure.

111
00:06:09,600 --> 00:06:11,400
Speaker 2: Devi Loo got about forty five seconds left with you

112
00:06:11,400 --> 00:06:13,039
Speaker 2: when it's to squeeze this in. There's a phrase I

113
00:06:13,040 --> 00:06:16,320
Speaker 2: see a lot from research at the moment, and it's

114
00:06:16,400 --> 00:06:20,000
Speaker 2: not nineteen ninety nine. And I just wonder, from your perspective,

115
00:06:20,040 --> 00:06:22,560
Speaker 2: what is the value of benchmarking to such an extreme

116
00:06:22,640 --> 00:06:24,200
Speaker 2: time in the equity market?

117
00:06:24,240 --> 00:06:25,760
Speaker 5: Is there any value in that at all.

118
00:06:27,200 --> 00:06:32,360
Speaker 3: I don't think that it's useful to compare it to today's world,

119
00:06:32,400 --> 00:06:35,560
Speaker 3: to any other world, anymore than inn seven people comparing

120
00:06:35,600 --> 00:06:40,200
Speaker 3: it to previous cycles. Every cycle has its unique characteristics,

121
00:06:40,400 --> 00:06:43,880
Speaker 3: Every cycle has its similar patterns. No, I'm not saying

122
00:06:43,880 --> 00:06:47,560
Speaker 3: this is like nineteen ninety nine or the dot com bubble,

123
00:06:47,600 --> 00:06:50,200
Speaker 3: because most of those companies didn't have a business model

124
00:06:50,279 --> 00:06:54,960
Speaker 3: and didn't have earnings. However, However, we do have a

125
00:06:55,000 --> 00:06:58,440
Speaker 3: situation where the forward multiple now in the SMP is

126
00:06:58,480 --> 00:07:01,920
Speaker 3: twenty one, and it is in the top ten percent

127
00:07:01,960 --> 00:07:04,719
Speaker 3: to the top death style evaluations in history. So it

128
00:07:04,760 --> 00:07:06,880
Speaker 3: doesn't detract I mean people like to say it's not

129
00:07:06,960 --> 00:07:10,160
Speaker 3: nineteen ninety nine. We'll go go knock yourself out on

130
00:07:10,200 --> 00:07:13,640
Speaker 3: that comparison. But whether you're taking a look at corporate credit,

131
00:07:14,120 --> 00:07:17,360
Speaker 3: you're taking a look at the equity market, it's a

132
00:07:17,400 --> 00:07:21,280
Speaker 3: noseblee territory in terms of valuations, and so that's where

133
00:07:21,280 --> 00:07:23,160
Speaker 3: I come out of it. That is still a very

134
00:07:23,200 --> 00:07:28,000
Speaker 3: expensive set of circumstances in across most awnset classes.

135
00:07:28,000 --> 00:07:30,280
Speaker 5: It's David, We're going to continue this conversations.

136
00:07:30,440 --> 00:07:31,680
Speaker 3: Wasn't ninety nine, but it's.

137
00:07:31,680 --> 00:07:32,440
Speaker 5: It's a little time.

138
00:07:33,000 --> 00:07:45,119
Speaker 2: David Rosenberg of Rosenberg Research, David appreciate it set. Former

139
00:07:45,160 --> 00:07:47,520
Speaker 2: New York Fed President Bill Dudley warning the next goal

140
00:07:47,840 --> 00:07:51,640
Speaker 2: is reducing QT writing this in Bloomberg Opinion, a final

141
00:07:51,680 --> 00:07:53,600
Speaker 2: plan should be in place by the middle of the year.

142
00:07:53,640 --> 00:07:56,720
Speaker 2: Whatever happens, the destination matches a lot more than the

143
00:07:56,760 --> 00:07:59,520
Speaker 2: speed and places say that Bill Dudley joined us. Now

144
00:07:59,520 --> 00:08:01,440
Speaker 2: for more, Bill, let's talk about this. What kind of

145
00:08:01,480 --> 00:08:04,640
Speaker 2: considerations go into making a decision like this one.

146
00:08:04,760 --> 00:08:06,560
Speaker 6: They want to behave in a way that does not

147
00:08:06,920 --> 00:08:10,560
Speaker 6: risk causing turbulence and financial markets. So the reason to

148
00:08:10,600 --> 00:08:12,400
Speaker 6: do the taper is you're not really sure what the

149
00:08:12,440 --> 00:08:15,360
Speaker 6: desired level or reserves is in the banking system, so

150
00:08:15,400 --> 00:08:19,040
Speaker 6: you want to approach the runway very very shallowly, steeply,

151
00:08:19,280 --> 00:08:21,720
Speaker 6: especially when you don't know where that runway exactly is.

152
00:08:22,160 --> 00:08:24,920
Speaker 6: So I think the taper is proven course of action.

153
00:08:25,400 --> 00:08:27,320
Speaker 6: It doesn't really matter if you get to the desired

154
00:08:27,400 --> 00:08:30,120
Speaker 6: level reserves in two years versus one year. It's just

155
00:08:30,200 --> 00:08:32,080
Speaker 6: the fact that you get there. So I think that

156
00:08:32,600 --> 00:08:34,360
Speaker 6: they're going to discuss it at the March meeting. That

157
00:08:34,520 --> 00:08:37,440
Speaker 6: was made clear by Paul's press conflext press conference, and

158
00:08:37,440 --> 00:08:39,840
Speaker 6: then the fem C minutes, and then they'll talk about

159
00:08:39,840 --> 00:08:42,319
Speaker 6: the staffs proposal, and I think we'll see a final

160
00:08:42,320 --> 00:08:44,360
Speaker 6: plan by midyear.

161
00:08:44,800 --> 00:08:47,160
Speaker 2: Bill, you've said the Central Bank needs to strengthen the

162
00:08:47,200 --> 00:08:50,520
Speaker 2: balance sheet enough to rebuild the stimulus arsenal. I just

163
00:08:50,520 --> 00:08:52,320
Speaker 2: want to get into that a little bit more. I've

164
00:08:52,320 --> 00:08:53,880
Speaker 2: said this to you before. I feel like this is

165
00:08:53,920 --> 00:08:55,760
Speaker 2: some kind of Jedi mind trick at the Federal reserve.

166
00:08:55,760 --> 00:08:58,240
Speaker 2: They want you to simultaneously believe that QE stimulates and

167
00:08:58,320 --> 00:08:59,240
Speaker 2: QT does nothing.

168
00:09:00,000 --> 00:09:01,200
Speaker 5: What does QT actually do?

169
00:09:02,720 --> 00:09:07,200
Speaker 7: QT does withdraw restraint that they've put into the system previously.

170
00:09:07,720 --> 00:09:11,720
Speaker 7: But economics economist who have looked at QE versus QT

171
00:09:11,880 --> 00:09:15,000
Speaker 7: find big effects when there's QE announcements, very little effects

172
00:09:15,000 --> 00:09:16,400
Speaker 7: when there's QT announcements.

173
00:09:16,520 --> 00:09:19,160
Speaker 6: And the reason is sort of obvious. You don't ever

174
00:09:19,240 --> 00:09:21,440
Speaker 6: know when q E u Q program is going to

175
00:09:21,440 --> 00:09:24,480
Speaker 6: be implemented. Kanye has to really really falling apart.

176
00:09:24,600 --> 00:09:25,720
Speaker 8: Interest rates have to be at the.

177
00:09:25,760 --> 00:09:29,720
Speaker 6: Zero lore bound, So QE is usually a surprise QT

178
00:09:29,880 --> 00:09:32,080
Speaker 6: that once you've done QE, you know QT is going

179
00:09:32,120 --> 00:09:34,120
Speaker 6: to fall at some point that the FED is going

180
00:09:34,160 --> 00:09:36,600
Speaker 6: to ultimately unwind the Q that they did earlier. So

181
00:09:36,840 --> 00:09:39,120
Speaker 6: when QT happens, it's really a question of timing and

182
00:09:39,240 --> 00:09:41,600
Speaker 6: magnitude duration, not whether it's going to happen or not,

183
00:09:41,760 --> 00:09:43,840
Speaker 6: So it has pretty much more milder effects.

184
00:09:44,080 --> 00:09:46,360
Speaker 4: There's also a Jedi mind trick going on Bill when

185
00:09:46,360 --> 00:09:49,760
Speaker 4: it comes to financial just in general conditions. The fact

186
00:09:49,760 --> 00:09:52,760
Speaker 4: that we've seen dramatic easing in financial conditions and that

187
00:09:52,800 --> 00:09:54,800
Speaker 4: doesn't seem to be weighing on the FED in terms

188
00:09:54,840 --> 00:09:57,600
Speaker 4: of how that affects their ability to get to two percent.

189
00:09:57,880 --> 00:10:00,480
Speaker 4: But when you saw a sell off that was and

190
00:10:00,520 --> 00:10:03,200
Speaker 4: some sort of restriction, does that concern you that the

191
00:10:03,200 --> 00:10:05,559
Speaker 4: easing and financial conditions doesn't seem to be anywhere on

192
00:10:05,600 --> 00:10:07,080
Speaker 4: the radar of FED officials.

193
00:10:09,040 --> 00:10:10,720
Speaker 6: Well, I think it's in the radar in the sense

194
00:10:10,760 --> 00:10:13,720
Speaker 6: that the reason why financial conditions have eased is because

195
00:10:13,720 --> 00:10:16,679
Speaker 6: people expect the FED to cut rates this year, but

196
00:10:16,720 --> 00:10:18,880
Speaker 6: the Fed actually actually has to cut those rates to

197
00:10:18,920 --> 00:10:20,800
Speaker 6: keep financial conditions where they are today.

198
00:10:21,679 --> 00:10:23,720
Speaker 1: I think at this point we know that March is

199
00:10:23,720 --> 00:10:25,800
Speaker 1: off the table. May is probably off the table too.

200
00:10:26,280 --> 00:10:28,520
Speaker 6: We're really talking about what you know, FED cutting rates

201
00:10:28,520 --> 00:10:29,760
Speaker 6: probably sometimes this summer.

202
00:10:30,040 --> 00:10:31,800
Speaker 8: The focus at the meeting, as I said, is going

203
00:10:31,840 --> 00:10:32,920
Speaker 8: to be Paul's.

204
00:10:32,600 --> 00:10:34,760
Speaker 6: Gonna get a lot of questions about the QT taper,

205
00:10:34,840 --> 00:10:37,040
Speaker 6: since that people know that's on the table.

206
00:10:37,120 --> 00:10:38,120
Speaker 1: But the other thing that's going to.

207
00:10:38,040 --> 00:10:40,000
Speaker 6: Get a lot of attention is the summary of economic

208
00:10:40,000 --> 00:10:43,720
Speaker 6: rejections and how many rate cuts do FIT officials pencil

209
00:10:43,760 --> 00:10:45,280
Speaker 6: in in their forecast.

210
00:10:45,360 --> 00:10:47,920
Speaker 8: Last time, the medium was three. I would guess the

211
00:10:47,960 --> 00:10:50,640
Speaker 8: medium will be three again this time, but there's some

212
00:10:50,960 --> 00:10:53,960
Speaker 8: possibility given the firmness and the inflation data that maybe

213
00:10:54,360 --> 00:10:55,920
Speaker 8: maybe those are only the meet The meeting is going

214
00:10:55,960 --> 00:10:58,199
Speaker 8: to shrink to two, but I bet they keep where

215
00:10:58,240 --> 00:10:59,080
Speaker 8: they were last time.

216
00:10:59,160 --> 00:11:01,000
Speaker 7: There's still plenty of time and still plenty.

217
00:11:00,840 --> 00:11:02,600
Speaker 6: Of meetings this year to cut rays three times.

218
00:11:02,679 --> 00:11:04,160
Speaker 4: But this goes back to the question that we've been

219
00:11:04,200 --> 00:11:07,760
Speaker 4: asking all morning. Has the balance of risks, arguably on

220
00:11:07,840 --> 00:11:10,920
Speaker 4: a minor way, shifted just a bit after the CPI

221
00:11:11,040 --> 00:11:13,680
Speaker 4: print to the fact that maybe it makes sense for

222
00:11:13,720 --> 00:11:16,200
Speaker 4: them to hold rates higher for a bit longer because

223
00:11:16,200 --> 00:11:18,680
Speaker 4: it doesn't seem like it's dampening some of the economic

224
00:11:18,720 --> 00:11:21,319
Speaker 4: activity are materially harming the US economy.

225
00:11:22,520 --> 00:11:24,319
Speaker 6: I think it has, but I think that's that's been

226
00:11:24,320 --> 00:11:26,280
Speaker 6: their strategy how long. I think the market got way

227
00:11:26,320 --> 00:11:28,160
Speaker 6: ahead of the Fed earlier this year, when the market

228
00:11:28,200 --> 00:11:30,360
Speaker 6: is pricing in six to seven rate cuts this year,

229
00:11:30,360 --> 00:11:31,640
Speaker 6: and the Fed was saying, no, we're going to do

230
00:11:31,720 --> 00:11:33,959
Speaker 6: quite a bit less than that, for the very reason

231
00:11:34,000 --> 00:11:35,839
Speaker 6: that you said that the FED wants to be sure

232
00:11:35,840 --> 00:11:38,360
Speaker 6: that they're actually be successful in getting inflation all the

233
00:11:38,360 --> 00:11:40,920
Speaker 6: way down to two percent, and you know, the not

234
00:11:41,000 --> 00:11:44,720
Speaker 6: so good inflation prints that we saw recently just reinforce that.

235
00:11:45,200 --> 00:11:48,319
Speaker 6: So I think the world is started going the way

236
00:11:48,360 --> 00:11:50,640
Speaker 6: the Fed Reserve was expecting rather than the way markets

237
00:11:50,679 --> 00:11:52,720
Speaker 6: were expecting. And I think that, you know, I think

238
00:11:52,720 --> 00:11:54,679
Speaker 6: there's plenty of time to see how the balance between

239
00:11:54,720 --> 00:11:57,800
Speaker 6: growth and inflation plays out. As you know, these are

240
00:11:57,840 --> 00:12:00,240
Speaker 6: balancing acts. Now the Fed is focused on both sides.

241
00:12:00,280 --> 00:12:02,839
Speaker 6: That it's still mandate not just inflation, but also what's

242
00:12:02,840 --> 00:12:05,320
Speaker 6: happening to the economy. While the Knoye is held up

243
00:12:05,360 --> 00:12:07,720
Speaker 6: quite well, there are signs that it is slowing, and

244
00:12:07,800 --> 00:12:10,720
Speaker 6: so the FET is trying to get balance right between

245
00:12:10,720 --> 00:12:11,440
Speaker 6: these two risks.

246
00:12:11,520 --> 00:12:11,760
Speaker 5: Bill.

247
00:12:11,760 --> 00:12:13,760
Speaker 2: This is the total opposite of the conversation we had

248
00:12:13,760 --> 00:12:15,679
Speaker 2: post GFC. I was talking about this a little bit

249
00:12:15,679 --> 00:12:17,200
Speaker 2: earlier in the program. I want to do it again

250
00:12:17,240 --> 00:12:19,200
Speaker 2: with you. I think it's important coming out of the

251
00:12:19,320 --> 00:12:23,040
Speaker 2: Great Financial Crisis I seven and eaight nine, we always

252
00:12:23,120 --> 00:12:25,360
Speaker 2: had these charts that came out and it was basically

253
00:12:25,400 --> 00:12:27,840
Speaker 2: Wall Street looking for lift offf at the federal serve

254
00:12:27,880 --> 00:12:30,440
Speaker 2: and then you had Fed funds just doing nothing for years,

255
00:12:30,520 --> 00:12:32,760
Speaker 2: and every single year was lift off liftoffs coming. It

256
00:12:32,840 --> 00:12:35,520
Speaker 2: was full storm, full storm, full storm, and were looking

257
00:12:35,559 --> 00:12:37,959
Speaker 2: at a situation that could be the total reverse of that,

258
00:12:38,400 --> 00:12:40,880
Speaker 2: where we have again and again just to full storm

259
00:12:40,960 --> 00:12:43,440
Speaker 2: looking for cuts that never come because the suspancsion just

260
00:12:43,480 --> 00:12:45,200
Speaker 2: looks so much better than people thought it would be.

261
00:12:46,480 --> 00:12:49,160
Speaker 6: Well, that really depends on how tape monitor policy is,

262
00:12:49,240 --> 00:12:51,280
Speaker 6: and that's one thing we don't really know. Every time

263
00:12:51,400 --> 00:12:54,000
Speaker 6: the economy turns out to be stronger than expected, people

264
00:12:54,040 --> 00:12:56,400
Speaker 6: start to talk about, well, maybe monitor posse is not

265
00:12:56,480 --> 00:12:59,080
Speaker 6: as restricted as we thought. This is coming back to

266
00:12:59,120 --> 00:13:03,280
Speaker 6: the discussion of our star the neutral federal fund rate.

267
00:13:04,280 --> 00:13:05,960
Speaker 6: Other thing that's going to be interesting in the upcoming

268
00:13:05,960 --> 00:13:09,560
Speaker 6: meeting is whether FED officials raise their estimate of what

269
00:13:09,600 --> 00:13:11,920
Speaker 6: a neutral maitre policy looks like. If you look at

270
00:13:11,960 --> 00:13:14,720
Speaker 6: the current projections, they think that at two percent inflation,

271
00:13:14,800 --> 00:13:17,080
Speaker 6: the federal fund rate to be neutral should be two

272
00:13:17,120 --> 00:13:19,400
Speaker 6: and a half percent. And it's very possible, given the

273
00:13:19,400 --> 00:13:21,280
Speaker 6: strength of the economy that we've seen over the last year,

274
00:13:21,320 --> 00:13:23,400
Speaker 6: that they're going to start to push up those estimates.

275
00:13:23,600 --> 00:13:24,760
Speaker 5: Well, that's exactly where I wanted to go.

276
00:13:24,880 --> 00:13:27,160
Speaker 4: Kati Kamiski earlier was saying, there's a real signal from

277
00:13:27,160 --> 00:13:30,040
Speaker 4: the fact the financial conditions have eased so much in

278
00:13:30,080 --> 00:13:33,120
Speaker 4: the face of rates that have remained so high. Do

279
00:13:33,200 --> 00:13:34,880
Speaker 4: you take that signal? Do you think that the Fed

280
00:13:35,000 --> 00:13:39,680
Speaker 4: should be lifting there are star rate their neutral rate expectations, Yes,

281
00:13:39,800 --> 00:13:40,120
Speaker 4: I do.

282
00:13:40,240 --> 00:13:42,440
Speaker 6: I think there's lots of reason to think that our

283
00:13:42,480 --> 00:13:44,520
Speaker 6: star is higher than it was in the path. In

284
00:13:44,559 --> 00:13:48,920
Speaker 6: the recent past, fiscal policy has been very expansive. The

285
00:13:48,960 --> 00:13:52,199
Speaker 6: government has put in place a number of new investment

286
00:13:52,280 --> 00:13:56,600
Speaker 6: programs Chips Act, infrastructure spending, climate finance. So all those

287
00:13:56,640 --> 00:14:00,040
Speaker 6: things are increasing investment relative to a diminished say, I

288
00:14:00,040 --> 00:14:01,800
Speaker 6: think it's bull that we should raise our star over

289
00:14:01,840 --> 00:14:04,360
Speaker 6: the longer run. I also think that financial conditions are

290
00:14:04,400 --> 00:14:06,600
Speaker 6: the right way to think about major policy, and so

291
00:14:06,679 --> 00:14:08,920
Speaker 6: to your point, if financial conditions are easier, then there's

292
00:14:09,000 --> 00:14:10,160
Speaker 6: less easy for the.

293
00:14:10,120 --> 00:14:12,200
Speaker 5: FED to do bill. Just a final question from me.

294
00:14:12,280 --> 00:14:14,280
Speaker 2: You've alluded to this, but just to speak a little

295
00:14:14,280 --> 00:14:16,960
Speaker 2: bit more clearly on the topic, how uncomfortable should they be?

296
00:14:17,080 --> 00:14:19,160
Speaker 2: Will they be with yesterday CPI print?

297
00:14:20,840 --> 00:14:22,640
Speaker 6: I don't think the FED takes a lot of signal

298
00:14:22,720 --> 00:14:25,800
Speaker 6: from one or two inflation prints after a series of

299
00:14:25,920 --> 00:14:28,080
Speaker 6: very good inflation prints. But I think you know the

300
00:14:28,120 --> 00:14:31,280
Speaker 6: fact that it's now too rather than one is getting

301
00:14:32,040 --> 00:14:33,200
Speaker 6: it's now on their raiders.

302
00:14:33,000 --> 00:14:36,800
Speaker 2: Screen Bill Dudley if Bloomberg opinion, Bill appreciate it. Thank you, sir,

303
00:14:46,120 --> 00:14:48,720
Speaker 2: FCC Commission of Brendon Katjo and just now for more, Commissioner,

304
00:14:48,840 --> 00:14:51,240
Speaker 2: been looking forward to this conversation. I've got your comments

305
00:14:51,280 --> 00:14:53,200
Speaker 2: in front of me on TikTok. You've called it before

306
00:14:53,240 --> 00:14:56,080
Speaker 2: a clear and present danger to national security. I'm sure

307
00:14:56,120 --> 00:14:59,240
Speaker 2: TikTok would disagree with that characterization as well. Can you

308
00:14:59,280 --> 00:15:02,240
Speaker 2: give some concrete examples of why you think that's the case.

309
00:15:03,400 --> 00:15:07,320
Speaker 9: Yeah, the track record with TikTok's malign conduct is very

310
00:15:07,320 --> 00:15:10,000
Speaker 9: clear at this point. For years they told us lawmakers,

311
00:15:10,000 --> 00:15:14,480
Speaker 9: don't worry us. User data isn't even existing inside China,

312
00:15:14,520 --> 00:15:16,920
Speaker 9: and then a blockbuster report came out in twenty twenty

313
00:15:16,960 --> 00:15:20,280
Speaker 9: two that showed no, in fact, quote, everything is seen.

314
00:15:20,200 --> 00:15:22,400
Speaker 1: Inside of China based on leak materials.

315
00:15:22,400 --> 00:15:27,480
Speaker 9: That's key struck patterns, biometrics, search and browsing history location. Then,

316
00:15:27,560 --> 00:15:30,720
Speaker 9: second of all, what the CCP are doing with that

317
00:15:30,880 --> 00:15:34,240
Speaker 9: data is very nefarious. They use access that did data

318
00:15:34,400 --> 00:15:38,440
Speaker 9: personnel in Beijing did to surveil the locations of specific

319
00:15:38,520 --> 00:15:43,200
Speaker 9: Americans journalists that were writing negative stories about TikTok. Third,

320
00:15:43,600 --> 00:15:46,200
Speaker 9: TikTok said, Okay, you caught us red handed. We're going

321
00:15:46,280 --> 00:15:49,760
Speaker 9: to wall off US user data. But lo and behold,

322
00:15:49,760 --> 00:15:51,840
Speaker 9: the Wall Street Journal report came out and found that

323
00:15:52,080 --> 00:15:55,800
Speaker 9: personnel in Beijing are still getting access to that data

324
00:15:55,960 --> 00:16:00,240
Speaker 9: sensitive US user data after agreeing to walllet off. And

325
00:16:00,520 --> 00:16:03,360
Speaker 9: the record goes on from there, including TikTok's parent Bike

326
00:16:03,440 --> 00:16:07,480
Speaker 9: Dance having a CCP sell embedded in its leadership. So

327
00:16:07,520 --> 00:16:10,880
Speaker 9: this is about the malign conduct that an entity that

328
00:16:10,920 --> 00:16:14,000
Speaker 9: it is beholden to the CCP has been engaged in.

329
00:16:14,120 --> 00:16:16,120
Speaker 10: When you talk about walling off that data, you're talking

330
00:16:16,120 --> 00:16:19,400
Speaker 10: about Project Texas. Has it not worked at all?

331
00:16:20,720 --> 00:16:21,400
Speaker 1: No, not at all.

332
00:16:21,440 --> 00:16:23,960
Speaker 9: So one of the leak materials had TikTok Trust and

333
00:16:24,000 --> 00:16:27,640
Speaker 9: safety officials themselves saying that it remains to be seen

334
00:16:28,040 --> 00:16:32,240
Speaker 9: whether product and engineering meaning Beijing can still get access

335
00:16:32,280 --> 00:16:35,880
Speaker 9: to US user data after mitigations like Project Texas are

336
00:16:35,960 --> 00:16:38,840
Speaker 9: put in place. Second of all, that walling off of

337
00:16:38,920 --> 00:16:41,480
Speaker 9: data that we just talked about was part of Project Texas,

338
00:16:41,520 --> 00:16:44,040
Speaker 9: and again Beijing still got access to it. And even

339
00:16:44,040 --> 00:16:47,680
Speaker 9: TikTok's CEO has said, Project Texas will keep data from

340
00:16:47,720 --> 00:16:50,520
Speaker 9: going to Beijing except when we allow it pursued to

341
00:16:50,600 --> 00:16:53,480
Speaker 9: what they claim are new control. So Project Texas is

342
00:16:53,480 --> 00:16:55,080
Speaker 9: about as secure as a SIEV at the end of

343
00:16:55,120 --> 00:16:55,440
Speaker 9: the day.

344
00:16:55,720 --> 00:16:59,320
Speaker 10: In a day of interesting and odd political bedfellows that

345
00:16:59,360 --> 00:17:01,680
Speaker 10: we saw yesterday in Kapa Hill's a lot of individuals

346
00:17:01,680 --> 00:17:03,920
Speaker 10: come out and talk about free speech on the progressive

347
00:17:04,000 --> 00:17:06,320
Speaker 10: left and the right, Ron Paul saying he's going to

348
00:17:06,359 --> 00:17:08,760
Speaker 10: block anything that's contrary to the Constitution.

349
00:17:09,760 --> 00:17:10,640
Speaker 5: Do you agree?

350
00:17:10,840 --> 00:17:13,040
Speaker 10: Is there a free speech issue at play here?

351
00:17:14,400 --> 00:17:14,720
Speaker 1: Yok?

352
00:17:14,720 --> 00:17:18,359
Speaker 9: Grandpa's been great on these liberty issues. This particular bill

353
00:17:18,400 --> 00:17:21,800
Speaker 9: does not trigger a First Amendment concern for one main reason.

354
00:17:22,119 --> 00:17:24,879
Speaker 9: The Supreme Court has drawing a clear line between regulations

355
00:17:24,920 --> 00:17:27,920
Speaker 9: based on content of speech on the one hand, and

356
00:17:28,040 --> 00:17:30,680
Speaker 9: regulation of conduct on the other. And this plainly is

357
00:17:30,720 --> 00:17:35,080
Speaker 9: a conduct law, meaning we're acting because of the demonstrated

358
00:17:35,200 --> 00:17:38,600
Speaker 9: malign national security threat of TikTok, not because of the

359
00:17:38,640 --> 00:17:41,920
Speaker 9: content of anybody's speech. And the bill is narrowly tailored,

360
00:17:41,960 --> 00:17:44,760
Speaker 9: which is key for First Amendment analysis, because it simply

361
00:17:44,760 --> 00:17:48,480
Speaker 9: requires divestment, meaning the millions of Americans that love TikTok,

362
00:17:48,600 --> 00:17:50,719
Speaker 9: I'm not one of them, but they can continue to

363
00:17:50,920 --> 00:17:54,200
Speaker 9: use the application, but just in a more secure way.

364
00:17:54,280 --> 00:17:57,680
Speaker 9: So because of the conduct at issue here, the Constitution

365
00:17:57,800 --> 00:18:00,840
Speaker 9: does not compel us to require a national security threat

366
00:18:00,880 --> 00:18:02,040
Speaker 9: to continue to persist.

367
00:18:02,359 --> 00:18:05,639
Speaker 10: Well, there's one politician in DCU certainly likes TikTok, and

368
00:18:05,640 --> 00:18:08,360
Speaker 10: that's President Biden. The sense of his campaign, they feel

369
00:18:08,400 --> 00:18:11,320
Speaker 10: like they're able to reach the youth by using TikTok.

370
00:18:11,640 --> 00:18:15,439
Speaker 10: So if TikTok is divested, there's a sale, would that

371
00:18:15,520 --> 00:18:16,760
Speaker 10: mean that the Biden campaign can.

372
00:18:16,680 --> 00:18:18,800
Speaker 5: Continue using it? But do you think it'll be safer?

373
00:18:20,119 --> 00:18:20,720
Speaker 1: Yeah, that's right.

374
00:18:20,720 --> 00:18:21,960
Speaker 9: You know a lot of people will raise that concern

375
00:18:22,000 --> 00:18:25,440
Speaker 9: about the Biden administration being on TikTok, but Biden adminstration

376
00:18:25,560 --> 00:18:28,400
Speaker 9: officials have been very clear that there's a national security

377
00:18:28,400 --> 00:18:31,040
Speaker 9: threat here. That's why passed this bill actually squares the

378
00:18:31,080 --> 00:18:34,320
Speaker 9: circle because then the campaign or anybody's campaign could continue

379
00:18:34,440 --> 00:18:37,600
Speaker 9: or start to be on TikTok, but without that serious

380
00:18:37,680 --> 00:18:39,439
Speaker 9: national security risk that's present today.

381
00:18:39,720 --> 00:18:43,119
Speaker 4: Commissioner, given the fact that we've heard that from President Biden,

382
00:18:43,160 --> 00:18:46,280
Speaker 4: I'm curious about your comments from the former President Trump,

383
00:18:46,320 --> 00:18:48,919
Speaker 4: who seems to be, I don't know less clear about

384
00:18:48,920 --> 00:18:51,720
Speaker 4: what he thinks of this bill, saying you know that.

385
00:18:51,640 --> 00:18:53,119
Speaker 5: There's a lot of good there's a lot.

386
00:18:52,960 --> 00:18:55,960
Speaker 4: Of bad with TikTok, talking about how it increases the

387
00:18:56,240 --> 00:18:59,120
Speaker 4: prevalence of meta. What do you make of his comments?

388
00:19:00,359 --> 00:19:02,400
Speaker 9: I think, first of all, President Trump, you know, fundamentally

389
00:19:02,680 --> 00:19:07,119
Speaker 9: reshaped washing DC to understand the serious threat posed by

390
00:19:07,280 --> 00:19:07,960
Speaker 9: the CCP.

391
00:19:08,320 --> 00:19:09,960
Speaker 1: He's also raised concerns.

392
00:19:09,520 --> 00:19:12,359
Speaker 9: As I have, with the conduct of big tech companies

393
00:19:12,400 --> 00:19:14,919
Speaker 9: that are based right here in Silicon Valley, and those

394
00:19:14,960 --> 00:19:17,800
Speaker 9: are real concerns. He pushed for Section two thirty reform,

395
00:19:18,000 --> 00:19:20,160
Speaker 9: which I supported and had hope we would have gotten

396
00:19:20,160 --> 00:19:20,560
Speaker 9: across the.

397
00:19:20,480 --> 00:19:23,159
Speaker 1: Finish line at the SEC by now, and we had it.

398
00:19:23,400 --> 00:19:26,040
Speaker 9: But TikTok presents obviously sort of a threat that's fundamentally

399
00:19:26,040 --> 00:19:28,800
Speaker 9: different than US big tech companies. For all of my

400
00:19:28,840 --> 00:19:32,000
Speaker 9: concerns with their conduct, and I have many, once we

401
00:19:32,119 --> 00:19:35,520
Speaker 9: deal with the national security threat from TikTok, once you break.

402
00:19:35,600 --> 00:19:37,920
Speaker 1: That tie back to the CCP, then.

403
00:19:38,080 --> 00:19:40,840
Speaker 9: We should move very quickly, as President Trump has outlined

404
00:19:40,880 --> 00:19:43,680
Speaker 9: on Section two thirty reform and in my view, a

405
00:19:43,800 --> 00:19:47,040
Speaker 9: firmative anti discrimination obligation that would apply across the board.

406
00:19:47,200 --> 00:19:50,240
Speaker 9: But until you break that link to the CCP, a

407
00:19:50,280 --> 00:19:52,240
Speaker 9: lot of other reforms just aren't going to work out.

408
00:19:52,640 --> 00:19:54,760
Speaker 10: But it does feel like he flip flopped on this

409
00:19:54,840 --> 00:19:57,000
Speaker 10: in a sense that he wanted to band it under

410
00:19:57,080 --> 00:20:00,959
Speaker 10: Hinds administration. It then got held up in court, and

411
00:20:01,000 --> 00:20:03,400
Speaker 10: now he's saying he's really not so sure about it.

412
00:20:03,600 --> 00:20:05,879
Speaker 10: Do you think we could see a different if he

413
00:20:06,000 --> 00:20:08,520
Speaker 10: was to become president of the United States, a different

414
00:20:08,640 --> 00:20:11,600
Speaker 10: view on TikTok because of his concerns of how big

415
00:20:11,680 --> 00:20:12,199
Speaker 10: Meta is.

416
00:20:13,800 --> 00:20:15,560
Speaker 9: Well again, I think the reason why this bill is

417
00:20:15,560 --> 00:20:18,760
Speaker 9: such a smart approach is because it's not a ban bill.

418
00:20:18,800 --> 00:20:21,600
Speaker 9: It's a divestment and so you would have TikTok go

419
00:20:21,680 --> 00:20:23,919
Speaker 9: to a different doesn't he need to be a US company,

420
00:20:23,960 --> 00:20:27,040
Speaker 9: can be any company that's not tied to China, Russia

421
00:20:27,040 --> 00:20:29,520
Speaker 9: and North Korea or Iran. So you can continue to

422
00:20:29,560 --> 00:20:32,680
Speaker 9: have TikTok in the marketplace as a counterweight to Facebook,

423
00:20:32,720 --> 00:20:35,120
Speaker 9: as a counterweight to others, but it can be there

424
00:20:35,200 --> 00:20:37,400
Speaker 9: in a way that doesn't present the national security threats

425
00:20:37,440 --> 00:20:38,520
Speaker 9: what keeps that competition?

426
00:20:38,680 --> 00:20:41,480
Speaker 2: High Commissioner, we seem to be ill equipped to deal

427
00:20:41,520 --> 00:20:44,360
Speaker 2: with these issues. It's been four years, about four years

428
00:20:44,400 --> 00:20:46,760
Speaker 2: since we've been talking about this and Harby. Anything has happened,

429
00:20:46,920 --> 00:20:49,520
Speaker 2: just in terms of actually passing proper policy, So do

430
00:20:49,600 --> 00:20:53,280
Speaker 2: something about these national security concerns. I think back to China.

431
00:20:53,480 --> 00:20:56,000
Speaker 2: It's easy, it's straightforward. She comes out and says no,

432
00:20:56,320 --> 00:20:58,399
Speaker 2: and then that's it. It's banned. It's old, banned twits

433
00:20:58,400 --> 00:21:02,359
Speaker 2: of Facebook, YouTube access. Why are we so ill equipped

434
00:21:02,720 --> 00:21:04,360
Speaker 2: in the West to deal with these threats?

435
00:21:04,480 --> 00:21:05,919
Speaker 5: And how do we goot change in that?

436
00:21:07,160 --> 00:21:09,600
Speaker 9: Yeah, we certainly have a very different system obviously than

437
00:21:09,600 --> 00:21:12,280
Speaker 9: they do in China. And some people raise concerns about

438
00:21:12,320 --> 00:21:15,000
Speaker 9: will China engage in some sort of reciprocal action based

439
00:21:15,000 --> 00:21:18,359
Speaker 9: on that our mind people, Facebook and other US technology.

440
00:21:17,840 --> 00:21:20,040
Speaker 1: Comans are already banned in China.

441
00:21:20,119 --> 00:21:21,960
Speaker 9: So yes, we move more slowly, we move in a

442
00:21:22,000 --> 00:21:24,680
Speaker 9: much more considered way. And obviously don't underestimate the fact

443
00:21:24,680 --> 00:21:27,439
Speaker 9: that you know, Byke Dance has put every single amount

444
00:21:27,440 --> 00:21:30,720
Speaker 9: of lobbyist dollar possible to slow roll this. And people

445
00:21:30,720 --> 00:21:32,720
Speaker 9: look at the one hundred and eighteenth Congress and they say,

446
00:21:33,000 --> 00:21:34,680
Speaker 9: you know, they have a hard time getting things done

447
00:21:34,720 --> 00:21:36,879
Speaker 9: as a general matter, but this is one where the

448
00:21:36,880 --> 00:21:39,119
Speaker 9: one hundred and eighteen and Speaker Johnson can land a

449
00:21:39,160 --> 00:21:42,560
Speaker 9: significant legislative win, not just on a tough issue, but

450
00:21:42,640 --> 00:21:45,560
Speaker 9: as you know, on a technology issue where it's sometimes

451
00:21:45,640 --> 00:21:48,800
Speaker 9: difficult for Congress to act, and that's why the Commerce Committee,

452
00:21:48,800 --> 00:21:52,200
Speaker 9: with Chair Rogers holding that blockbuster hearing last March.

453
00:21:52,440 --> 00:21:54,000
Speaker 1: I think that really stepped things in motion.

454
00:21:54,359 --> 00:21:57,200
Speaker 9: Do people wish it would have gone faster, sure, undoubtedly,

455
00:21:58,080 --> 00:22:00,159
Speaker 9: But arriving here today where there's a vote in the

456
00:22:00,200 --> 00:22:02,479
Speaker 9: House is a significant moment.

457
00:22:02,760 --> 00:22:04,919
Speaker 10: Significant moment in the House, but what happens next in

458
00:22:04,920 --> 00:22:05,320
Speaker 10: the Senate?

459
00:22:05,359 --> 00:22:07,880
Speaker 5: Commissioner, Yeah, I feel.

460
00:22:07,640 --> 00:22:09,480
Speaker 9: Pretty good about the odds in the Senate as well.

461
00:22:09,480 --> 00:22:12,040
Speaker 9: If you look back, Actually people sort of forgotten this,

462
00:22:12,119 --> 00:22:15,280
Speaker 9: but Senator Schumer joined in a letter with Senator Cotton

463
00:22:15,320 --> 00:22:19,920
Speaker 9: back in twenty nineteen raising serious concerns about TikTok's national

464
00:22:19,960 --> 00:22:22,080
Speaker 9: security threat. So this is an issue that is a

465
00:22:22,160 --> 00:22:25,520
Speaker 9: long standing issue for Senator Schumer over there in many

466
00:22:25,560 --> 00:22:28,320
Speaker 9: many Republicans as well, So a lot of the focus

467
00:22:28,359 --> 00:22:30,080
Speaker 9: that's been in the House obviously up to now they

468
00:22:30,080 --> 00:22:32,080
Speaker 9: will now shift to the Senate. I think the odds

469
00:22:32,080 --> 00:22:33,720
Speaker 9: are very good there as well, and I'm looking forward

470
00:22:33,720 --> 00:22:35,919
Speaker 9: hopefully to the bill passing today in the House and

471
00:22:35,920 --> 00:22:36,959
Speaker 9: then things moving over there.

472
00:22:37,040 --> 00:22:39,159
Speaker 2: Commis Sir, I want to finish on conduct versus content.

473
00:22:39,200 --> 00:22:41,240
Speaker 2: You talked about this being a conduct issue, Do you

474
00:22:41,320 --> 00:22:43,480
Speaker 2: believe there is a content issue in any way, shape

475
00:22:43,560 --> 00:22:44,200
Speaker 2: or form as well?

476
00:22:45,640 --> 00:22:46,280
Speaker 1: No, not at all.

477
00:22:46,320 --> 00:22:48,520
Speaker 9: I mean, look, sometimes we focus on the way the

478
00:22:48,560 --> 00:22:51,520
Speaker 9: algorithm with TikTok performs, and people have focused on that.

479
00:22:51,560 --> 00:22:54,560
Speaker 9: How it just shows content that is drastically different than

480
00:22:54,600 --> 00:22:57,679
Speaker 9: any other social media content that happens to align with

481
00:22:57,760 --> 00:22:58,360
Speaker 9: the CCP.

482
00:22:58,760 --> 00:23:00,879
Speaker 1: Again, it's not that content the concern for me.

483
00:23:00,920 --> 00:23:04,760
Speaker 9: It's that that content shows there's such a drastically different

484
00:23:04,840 --> 00:23:08,760
Speaker 9: operation of the algorithm that it goes fundamentally to conduct

485
00:23:09,040 --> 00:23:11,840
Speaker 9: into CCP controls. When we talk about that again, it's

486
00:23:11,880 --> 00:23:14,760
Speaker 9: just further evidence of CCP control. It's not about the

487
00:23:14,800 --> 00:23:17,119
Speaker 9: government acting based on content. Again, I'll give you one

488
00:23:17,160 --> 00:23:19,359
Speaker 9: last analogy. Someone can take a pen and they can

489
00:23:19,359 --> 00:23:21,840
Speaker 9: write the most salacious anti American propaganda.

490
00:23:21,880 --> 00:23:24,439
Speaker 1: They won there's nothing rightfully the government can do.

491
00:23:24,520 --> 00:23:26,320
Speaker 9: But if you take that pen and you use it

492
00:23:26,359 --> 00:23:28,400
Speaker 9: to pick a lock and break into a building, well

493
00:23:28,440 --> 00:23:31,040
Speaker 9: that's illegal conduct. We can take the pen, and it's

494
00:23:31,080 --> 00:23:32,520
Speaker 9: no defense for you to say that you are using

495
00:23:32,560 --> 00:23:33,160
Speaker 9: it to write.

496
00:23:33,440 --> 00:23:34,760
Speaker 1: Previously, Commissioner A.

497
00:23:34,800 --> 00:23:36,879
Speaker 2: Fraschiut, you'll here this morning, thank you for joining us.

498
00:23:36,880 --> 00:23:39,479
Speaker 2: We'll catch up soon, SAC Commissioner.

499
00:23:39,080 --> 00:23:39,720
Speaker 5: Friend and Carr.

500
00:23:40,320 --> 00:23:43,879
Speaker 2: This is the Bloomberg Sevenants podcast, bringing you the best

501
00:23:43,880 --> 00:23:47,200
Speaker 2: in markets, economics, an giopolitics. You can watch the show

502
00:23:47,280 --> 00:23:50,199
Speaker 2: live on Bloomberg TV weekday mornings from six am to

503
00:23:50,359 --> 00:23:54,119
Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify,

504
00:23:54,240 --> 00:23:56,480
Speaker 2: or anywhere else you listen, and as always, on the

505
00:23:56,480 --> 00:23:58,880
Speaker 2: Bloomberg Terminal and the Bloomberg basedess app