1 00:00:01,040 --> 00:00:04,400 Speaker 1: Now that the dust is clearing from America's mid term elections, 2 00:00:04,600 --> 00:00:06,680 Speaker 1: it's time to take a sober look at how the 3 00:00:06,720 --> 00:00:10,440 Speaker 1: global economy is doing. By many measures, such as growth 4 00:00:10,440 --> 00:00:13,760 Speaker 1: and unemployment, things are going quite well, and yet there 5 00:00:13,800 --> 00:00:18,320 Speaker 1: are plenty of clouds hanging over the outlook. A trade war, brexit, 6 00:00:18,720 --> 00:00:22,640 Speaker 1: emerging market turmoil, and federal reserve tightening, just to name 7 00:00:22,680 --> 00:00:25,320 Speaker 1: a few. On this week's episode, one of the world's 8 00:00:25,400 --> 00:00:28,760 Speaker 1: leading economists tells us what's going to be okay and 9 00:00:28,840 --> 00:00:40,760 Speaker 1: what we should be worried about. Welcome to Benchmark. I'm 10 00:00:40,760 --> 00:00:44,200 Speaker 1: Scott landman and economics editor with Bloomberg News in Washington. 11 00:00:44,680 --> 00:00:48,040 Speaker 1: Joining me as guest co host is my colleague Peter Koy, 12 00:00:48,360 --> 00:00:51,919 Speaker 1: who is the economics editor at Bloomberg Business Week magazine 13 00:00:51,960 --> 00:00:54,400 Speaker 1: in New York. Peter, glad to have you on. Thanks 14 00:00:54,400 --> 00:00:57,040 Speaker 1: for having me. Now this is a good time to 15 00:00:57,200 --> 00:01:00,000 Speaker 1: take a break from politics and look at the global economy. 16 00:01:00,400 --> 00:01:03,800 Speaker 1: We're fortunate to have someone with deep experience doing just that. 17 00:01:04,360 --> 00:01:08,160 Speaker 1: Katherine Man, chief Global Economist for City Group, position she's 18 00:01:08,200 --> 00:01:12,080 Speaker 1: held since February. Before that, she was chief economist at 19 00:01:12,120 --> 00:01:16,000 Speaker 1: the Organization for Economic Cooperation and Development. She has also 20 00:01:16,040 --> 00:01:20,000 Speaker 1: held positions at the Federal Reserve Board, Council of Economic Advisors, 21 00:01:20,280 --> 00:01:24,160 Speaker 1: World Bank, and Peterson Institute for International Economics here in DC. 22 00:01:24,840 --> 00:01:28,160 Speaker 1: She's in our New York studio with Peter right now. Catherine, 23 00:01:28,160 --> 00:01:30,479 Speaker 1: thanks so much for joining us on Benchmark. I'm really 24 00:01:30,480 --> 00:01:33,839 Speaker 1: pleased to be here with you, Scott and Peter. All right, well, 25 00:01:33,920 --> 00:01:36,640 Speaker 1: let's start with the US now, just to get this 26 00:01:36,680 --> 00:01:39,120 Speaker 1: out of the way. Did you make any adjustment to 27 00:01:39,120 --> 00:01:42,959 Speaker 1: your outlook after the mid term elections? We haven't done 28 00:01:43,000 --> 00:01:46,920 Speaker 1: that yet. Um. The schedule for our outlook actually goes 29 00:01:46,959 --> 00:01:50,440 Speaker 1: into a twenty nineteen review, and there are a number 30 00:01:50,440 --> 00:01:53,240 Speaker 1: of issues that need to be addressed that actually aren't 31 00:01:53,240 --> 00:01:57,040 Speaker 1: related to the outcome of the mid terms. In particular, 32 00:01:57,120 --> 00:02:01,240 Speaker 1: there is this question about the so called fiscal cliff 33 00:02:01,840 --> 00:02:07,000 Speaker 1: that is actually in the data, but it becomes an 34 00:02:07,040 --> 00:02:12,720 Speaker 1: issue in So what that's all about is that because 35 00:02:12,800 --> 00:02:16,680 Speaker 1: of the budget rules, when the budget was originally passed 36 00:02:16,760 --> 00:02:19,919 Speaker 1: in the early part of this year, there were some 37 00:02:20,040 --> 00:02:22,920 Speaker 1: rules that with a certain number of votes that were cast, 38 00:02:23,600 --> 00:02:27,560 Speaker 1: there had to be caps put on spending and those 39 00:02:27,600 --> 00:02:32,919 Speaker 1: caps bind in. Now, what that means is that, according 40 00:02:32,960 --> 00:02:36,480 Speaker 1: to our current projections, the US growth would be two 41 00:02:36,560 --> 00:02:41,480 Speaker 1: point eight percent in and then would drop to one 42 00:02:41,919 --> 00:02:45,920 Speaker 1: eight percent. That's why we call it a fiscal cliff. 43 00:02:46,639 --> 00:02:51,680 Speaker 1: Now that's predicated on these caps binding. Now, one of 44 00:02:51,680 --> 00:02:55,120 Speaker 1: the things that we've learned is is that on a 45 00:02:55,160 --> 00:03:00,880 Speaker 1: bipartisan basis, when caps like this bind, both parties agree 46 00:03:01,240 --> 00:03:03,000 Speaker 1: they don't think it's a good idea for them to 47 00:03:03,080 --> 00:03:07,520 Speaker 1: bind in a presidential election year. So we are currently 48 00:03:07,760 --> 00:03:12,880 Speaker 1: reevaluating the trajectory for US growth that goes for the 49 00:03:12,919 --> 00:03:17,720 Speaker 1: rest of this year, of course, but also into and 50 00:03:18,000 --> 00:03:21,360 Speaker 1: the trajectory could be different depending on whether or not 51 00:03:21,440 --> 00:03:25,480 Speaker 1: we see the fiscal cliff binding, or whether we think 52 00:03:25,520 --> 00:03:29,920 Speaker 1: the fiscal can will be kicked down the road related question, 53 00:03:30,280 --> 00:03:32,960 Speaker 1: would you then think that the US is likely to 54 00:03:33,000 --> 00:03:35,640 Speaker 1: be an engine of growth for the world economy in 55 00:03:36,640 --> 00:03:41,320 Speaker 1: and and what about Well, the thing that in we 56 00:03:41,400 --> 00:03:45,040 Speaker 1: of course still have quite a bit of the fiscal stimulus, 57 00:03:45,080 --> 00:03:49,000 Speaker 1: both the tax cuts and the spending those are still 58 00:03:49,080 --> 00:03:53,000 Speaker 1: playing a very important role in the driving US growth 59 00:03:53,120 --> 00:03:58,200 Speaker 1: in and whether or not that becomes an engine for 60 00:03:58,320 --> 00:04:02,360 Speaker 1: global growth depends a little bit on the configuration of 61 00:04:02,400 --> 00:04:06,520 Speaker 1: trade policy. It also depends a little bit on what 62 00:04:06,600 --> 00:04:11,440 Speaker 1: might be happening with financial markets and potential turbulence and 63 00:04:11,480 --> 00:04:16,799 Speaker 1: financial markets coming from normalization of monetary policy. In other words, 64 00:04:16,800 --> 00:04:19,000 Speaker 1: what the FED decides to do well. Then let me 65 00:04:19,040 --> 00:04:21,280 Speaker 1: jump right to a FED question. Do you think the 66 00:04:21,279 --> 00:04:25,440 Speaker 1: Fed will be able to keep the expansion going by 67 00:04:25,440 --> 00:04:29,800 Speaker 1: preventing overheating without accidentally causing a recession. So there's a 68 00:04:29,839 --> 00:04:33,120 Speaker 1: lot of fiscal stimulus in in the U. S. Economy 69 00:04:33,560 --> 00:04:36,280 Speaker 1: next year, as I as I said, and so the 70 00:04:36,400 --> 00:04:40,279 Speaker 1: risk of overheating is a little bit more than the 71 00:04:40,360 --> 00:04:43,919 Speaker 1: risk of recession. And even if the Federal Reserve keeps 72 00:04:43,960 --> 00:04:46,320 Speaker 1: on the path that we think that they're going to do, 73 00:04:47,040 --> 00:04:50,520 Speaker 1: there's still plenty of momentum in the U. S. Economy. 74 00:04:50,600 --> 00:04:52,960 Speaker 1: I think one of the things that's most important when 75 00:04:52,960 --> 00:04:56,760 Speaker 1: thinking about the challenges that the Fed faces is that, 76 00:04:56,839 --> 00:05:00,400 Speaker 1: on the one hand, UH, they need to move on 77 00:05:00,440 --> 00:05:03,280 Speaker 1: the path of moving the policy rate, that's the so 78 00:05:03,360 --> 00:05:05,800 Speaker 1: called Fed funds rate. It's uh, that's the thing that 79 00:05:05,839 --> 00:05:08,360 Speaker 1: they more or less control. It's the thing that they 80 00:05:08,400 --> 00:05:11,920 Speaker 1: talk about at each one of their meetings, and they 81 00:05:11,960 --> 00:05:18,360 Speaker 1: need to increase that rate sufficiently to ensure that risk 82 00:05:19,080 --> 00:05:24,160 Speaker 1: is properly priced in financial markets. Right now, when we 83 00:05:24,200 --> 00:05:27,640 Speaker 1: look at the financial markets, we can see, for example, 84 00:05:28,320 --> 00:05:33,440 Speaker 1: very risky investments UH that are that don't carry extra return. 85 00:05:33,880 --> 00:05:35,520 Speaker 1: The way it's supposed to work is that if you're 86 00:05:35,520 --> 00:05:37,719 Speaker 1: it's a risky investment, you get a little more return 87 00:05:37,839 --> 00:05:40,400 Speaker 1: for it. And right now we just don't see that 88 00:05:40,480 --> 00:05:43,680 Speaker 1: happening UM. And so the financial markets have not yet 89 00:05:43,720 --> 00:05:48,320 Speaker 1: priced in UH the full range of policy moves that 90 00:05:48,400 --> 00:05:52,200 Speaker 1: the Fevrual Reserve says that they're going to do in UH. 91 00:05:52,240 --> 00:05:57,040 Speaker 1: There may be turbulence associated with the repricing of risk. 92 00:05:57,760 --> 00:06:00,520 Speaker 1: That's also it could be in the equity markets, it 93 00:06:00,560 --> 00:06:03,320 Speaker 1: could be in the high old bond markets, it could 94 00:06:03,320 --> 00:06:05,520 Speaker 1: be in exchange rates. There are a number of different 95 00:06:05,560 --> 00:06:09,200 Speaker 1: places where we might see a repricing of risk. But 96 00:06:09,200 --> 00:06:13,360 Speaker 1: but that could cause financial turbulence. And what matters is 97 00:06:14,120 --> 00:06:16,080 Speaker 1: from the standpoint of what the FED has to worry 98 00:06:16,120 --> 00:06:21,880 Speaker 1: about is does that financial turbulence feedback into the real 99 00:06:22,080 --> 00:06:25,240 Speaker 1: side of the economy. So so we've already seen some 100 00:06:25,279 --> 00:06:27,400 Speaker 1: of that in the last few weeks. Is that do 101 00:06:27,440 --> 00:06:30,320 Speaker 1: you do you think that's actually going to happen or 102 00:06:30,480 --> 00:06:32,240 Speaker 1: do you see how much of a risk is it? 103 00:06:32,560 --> 00:06:36,200 Speaker 1: So we've we've certainly seen some financial turbulence. That's absolutely true. 104 00:06:36,680 --> 00:06:38,640 Speaker 1: And one of the things that that we look at 105 00:06:38,720 --> 00:06:42,320 Speaker 1: very carefully is will that financial turbulence feedback into the 106 00:06:42,400 --> 00:06:45,919 Speaker 1: decisions on the part of businesses to continue on their 107 00:06:45,960 --> 00:06:50,800 Speaker 1: path of investment, and will consumers look at financial turbulence 108 00:06:50,839 --> 00:06:52,880 Speaker 1: and say, Wow, I'm not sure I want to open 109 00:06:52,920 --> 00:06:57,440 Speaker 1: my pocketbook for Christmas. So this, this response of real 110 00:06:57,640 --> 00:07:02,159 Speaker 1: side business investment and consumer to decisions to financial turbulence, 111 00:07:02,279 --> 00:07:05,520 Speaker 1: is a key element of something that the FED pays 112 00:07:05,560 --> 00:07:08,720 Speaker 1: attention to. It's something that we're looking at, Now, what 113 00:07:08,760 --> 00:07:11,160 Speaker 1: do we do and what have we seen? So what 114 00:07:11,200 --> 00:07:16,280 Speaker 1: we've seen by looking at the data is that consumers 115 00:07:17,160 --> 00:07:21,240 Speaker 1: by and large are ignoring what's happening on Wall Street. 116 00:07:21,920 --> 00:07:26,240 Speaker 1: They don't most of us don't have large wealth portfolios, 117 00:07:26,360 --> 00:07:28,800 Speaker 1: and so when you know, the stock market goes up, 118 00:07:28,840 --> 00:07:31,280 Speaker 1: they don't feel richer. When the stock market falls, they 119 00:07:31,280 --> 00:07:35,160 Speaker 1: don't feel poorer. So what they care about mostly is 120 00:07:35,200 --> 00:07:38,200 Speaker 1: do they have a job. Are they getting a good wage? 121 00:07:38,280 --> 00:07:40,440 Speaker 1: And of course we can argue about whether or not 122 00:07:40,480 --> 00:07:43,720 Speaker 1: the wages are high enough, but certainly employment conditions are 123 00:07:43,800 --> 00:07:47,360 Speaker 1: very good, and so consumers buy and large are feeling 124 00:07:48,080 --> 00:07:52,800 Speaker 1: pretty good. Sentiment is pretty good, and they are spending 125 00:07:53,800 --> 00:07:58,000 Speaker 1: business investment. We can also make some distinctions between firms 126 00:07:58,040 --> 00:08:02,800 Speaker 1: that are domestically oriented and basically don't care about Wall 127 00:08:02,840 --> 00:08:05,840 Speaker 1: Street because maybe they borrow from a bank, but that's 128 00:08:05,880 --> 00:08:10,280 Speaker 1: about it. And those businesses are feeling better now than 129 00:08:10,320 --> 00:08:13,360 Speaker 1: they have for a decade. UH. They see the demand 130 00:08:13,480 --> 00:08:17,920 Speaker 1: around them, they see that they're having trouble hiring workers, 131 00:08:18,160 --> 00:08:22,240 Speaker 1: so they're they're investing. They're investing in capital that either 132 00:08:22,600 --> 00:08:26,520 Speaker 1: complements the workers that they hire or substitutes for the 133 00:08:26,600 --> 00:08:29,600 Speaker 1: people that they can't hire. So that group of business 134 00:08:29,680 --> 00:08:34,600 Speaker 1: is continuing to invest. The wild card, UH is the 135 00:08:34,640 --> 00:08:38,800 Speaker 1: businesses that are globally engaged and so they're very worried 136 00:08:38,840 --> 00:08:42,640 Speaker 1: about trade, and they're also financially market engaged, and so 137 00:08:42,679 --> 00:08:46,480 Speaker 1: they're very worried about turbulence. And so watching that set 138 00:08:46,480 --> 00:08:51,439 Speaker 1: of firms really carefully about do they pause their investment 139 00:08:51,480 --> 00:08:55,600 Speaker 1: decisions or do they power through what is a turbulent 140 00:08:55,679 --> 00:08:58,920 Speaker 1: external and financial environment. That's really the key for the 141 00:08:59,000 --> 00:09:02,400 Speaker 1: prospects for the US economy going forward. Catherine, let's turn 142 00:09:02,480 --> 00:09:05,640 Speaker 1: to the trade war. You mentioned it briefly. What's it 143 00:09:05,840 --> 00:09:08,000 Speaker 1: doing to the U s economy and what's it doing 144 00:09:08,000 --> 00:09:11,760 Speaker 1: to the Chinese economy. Let's talk about China first, because 145 00:09:12,520 --> 00:09:15,679 Speaker 1: what we've observed is that the Chinese economy was slowing 146 00:09:16,240 --> 00:09:19,960 Speaker 1: before the trade war started to heat up. Uh. Now, 147 00:09:20,440 --> 00:09:23,000 Speaker 1: part of the slowing and the Chinese economy was expected. 148 00:09:23,440 --> 00:09:27,880 Speaker 1: The policy makers there were undertaking a strategy of trying 149 00:09:27,920 --> 00:09:32,600 Speaker 1: to clean up the financial system and to consolidate the 150 00:09:32,720 --> 00:09:36,000 Speaker 1: state owed enterprises that consolidate them at least a little bit, 151 00:09:36,600 --> 00:09:41,480 Speaker 1: and so we expected and they expected that h fixed 152 00:09:41,520 --> 00:09:46,080 Speaker 1: investment would start to decelerate. What they had hoped was 153 00:09:46,200 --> 00:09:50,000 Speaker 1: that the consumer would boy up the economy, So investment 154 00:09:50,040 --> 00:09:55,160 Speaker 1: we decelerate, consumers would accelerate, and that that would rebalance 155 00:09:55,200 --> 00:09:59,520 Speaker 1: the economy towards a more consumer oriented um economic growth rate, 156 00:09:59,559 --> 00:10:01,800 Speaker 1: which is thing that they've been intending to do and 157 00:10:01,840 --> 00:10:06,040 Speaker 1: wanting to do for a while. Unfortunately, what happened was 158 00:10:06,440 --> 00:10:11,280 Speaker 1: that consumers started to look at their wealth portfolio, looking 159 00:10:11,320 --> 00:10:14,200 Speaker 1: at real estate in particular, and they saw that real 160 00:10:14,280 --> 00:10:17,240 Speaker 1: estate prices were coming down, so they said, I have 161 00:10:17,280 --> 00:10:22,640 Speaker 1: a wealth shock. Secondly, the constraints in the monetary trying 162 00:10:22,679 --> 00:10:26,520 Speaker 1: to control the monetary side of the economy was hurting 163 00:10:26,600 --> 00:10:30,680 Speaker 1: small businesses relatively more than the state owned enterprises, and 164 00:10:30,679 --> 00:10:34,240 Speaker 1: those small businesses were starting to shed workers, were starting 165 00:10:34,240 --> 00:10:37,360 Speaker 1: to fire workers, and so consumers, rather than boiling up 166 00:10:37,400 --> 00:10:41,600 Speaker 1: the economy, were concerned about employment, and they were concerned 167 00:10:41,600 --> 00:10:46,319 Speaker 1: about their wealth, and so they decided to decelerate consumption. 168 00:10:46,720 --> 00:10:50,040 Speaker 1: So instead of consumers buoiling up the economy, they also 169 00:10:50,080 --> 00:10:53,800 Speaker 1: were decelerating. So you layer on top of a decelerating 170 00:10:54,000 --> 00:10:58,520 Speaker 1: investment climate a decelerating consumer climate, you will are on 171 00:10:58,600 --> 00:11:01,760 Speaker 1: top of that a trade war. And so Chinese economy 172 00:11:01,760 --> 00:11:07,280 Speaker 1: has got problems. Now they have implemented a wide range 173 00:11:07,640 --> 00:11:12,160 Speaker 1: of policies to address both the investment side as well 174 00:11:12,200 --> 00:11:16,439 Speaker 1: as the consumer side, and some special policies to try 175 00:11:16,440 --> 00:11:20,280 Speaker 1: to deal with the trade side as well. But it 176 00:11:20,440 --> 00:11:23,360 Speaker 1: is the case that the economy is slowing and they 177 00:11:23,360 --> 00:11:27,720 Speaker 1: are working hard to uh to change their trajectory to 178 00:11:27,800 --> 00:11:31,400 Speaker 1: resume growth. And what about the U. S. Economy on 179 00:11:31,440 --> 00:11:33,360 Speaker 1: the and the trade war? Right so on the on 180 00:11:33,400 --> 00:11:35,640 Speaker 1: the trade war for the U. S. Economy, what we've 181 00:11:35,679 --> 00:11:39,920 Speaker 1: seen is is that the impact on the growth rate 182 00:11:40,000 --> 00:11:43,400 Speaker 1: in the U. S economy is not is really almost irrelevant. 183 00:11:43,679 --> 00:11:47,960 Speaker 1: On the one hand, the there is some substitution. In 184 00:11:47,960 --> 00:11:49,880 Speaker 1: other words, instead of buying an import, you buy a 185 00:11:49,880 --> 00:11:52,360 Speaker 1: little bit more of on the domestic production. But on 186 00:11:52,400 --> 00:11:54,920 Speaker 1: the other hand, you know, there has been trade retaliation 187 00:11:55,000 --> 00:11:57,880 Speaker 1: as well, and so what that has done is has 188 00:11:57,880 --> 00:12:02,640 Speaker 1: tended to unwind any benefits that might come from the 189 00:12:03,440 --> 00:12:06,360 Speaker 1: from the trade war. It's also the case that frankly, 190 00:12:06,400 --> 00:12:08,520 Speaker 1: the U S economy is much more of a closed 191 00:12:08,520 --> 00:12:13,959 Speaker 1: economy buying and selling internally, and is much more services oriented, 192 00:12:14,240 --> 00:12:18,240 Speaker 1: which primarily is locally produced. So on the sort of 193 00:12:18,240 --> 00:12:21,920 Speaker 1: the GDP side of things, there's not a lot of 194 00:12:22,320 --> 00:12:25,360 Speaker 1: evidence that the trade war has had much of impact. 195 00:12:25,960 --> 00:12:30,200 Speaker 1: Now on the other hand, on the inflation side of things, 196 00:12:30,720 --> 00:12:36,080 Speaker 1: we are seeing an impact of the tariffs coming through UH, 197 00:12:36,200 --> 00:12:40,080 Speaker 1: particularly the intermediates. Remember there's a lot of tariff put 198 00:12:40,080 --> 00:12:43,079 Speaker 1: on steel and on aluminum. We are starting to see 199 00:12:43,120 --> 00:12:45,440 Speaker 1: some of the impact of some of the other tariffs 200 00:12:45,480 --> 00:12:48,240 Speaker 1: that it were more recently put on the ten percent tariffs. 201 00:12:48,840 --> 00:12:52,000 Speaker 1: With the prospects for the tariffs to be put on 202 00:12:52,040 --> 00:12:55,280 Speaker 1: the two fifty billion dollars worth of Chinese imports, we 203 00:12:55,360 --> 00:13:00,880 Speaker 1: are starting to see um some pressure coming up on inflation. 204 00:13:01,440 --> 00:13:07,240 Speaker 1: And the question going into is how much of that 205 00:13:07,440 --> 00:13:11,480 Speaker 1: bubbling up of inflation that we see coming up through 206 00:13:11,520 --> 00:13:15,240 Speaker 1: the costs of production. When will that start to emerge 207 00:13:15,480 --> 00:13:19,280 Speaker 1: on the top line in core inflation and headline inflation. 208 00:13:19,720 --> 00:13:23,120 Speaker 1: And we think that coming into the first of the 209 00:13:23,200 --> 00:13:28,520 Speaker 1: year that one of the important changes from eighteen to 210 00:13:28,679 --> 00:13:35,760 Speaker 1: nineteen is that in companies had a tax windfall. They 211 00:13:35,840 --> 00:13:39,800 Speaker 1: got this big tax cut and it wasn't expected, and 212 00:13:39,840 --> 00:13:43,680 Speaker 1: they're able to use that tax windfall to protect their 213 00:13:43,760 --> 00:13:49,080 Speaker 1: margins this year. Next year they'll have a lower tax rate, 214 00:13:49,480 --> 00:13:52,080 Speaker 1: but they won't have a tax windfall, and so they'll 215 00:13:52,120 --> 00:13:55,360 Speaker 1: have to start making a decision do I pass through 216 00:13:56,080 --> 00:14:00,160 Speaker 1: these tariff increases, this tightness in the labor markets? Why 217 00:14:00,280 --> 00:14:03,560 Speaker 1: passed that through? And they certainly have been talking about 218 00:14:03,559 --> 00:14:06,880 Speaker 1: it a lot. You can read the Beige Book, earnings calls, 219 00:14:07,400 --> 00:14:11,760 Speaker 1: UH surveys, there's a lot of talk that firms are 220 00:14:12,160 --> 00:14:16,080 Speaker 1: testing the waters for do I have pricing power? Really 221 00:14:16,120 --> 00:14:19,960 Speaker 1: tight market situation that they're facing. UH, that's one that 222 00:14:20,080 --> 00:14:24,400 Speaker 1: is conducive to having pricing power. Katherine China. Going back 223 00:14:24,440 --> 00:14:28,240 Speaker 1: to China, its currency keeps falling. Can China afford to 224 00:14:28,320 --> 00:14:31,400 Speaker 1: let you want to appreciate you above seven to the dollar? 225 00:14:31,480 --> 00:14:34,960 Speaker 1: In well, there are a couple of different ways of 226 00:14:35,000 --> 00:14:37,480 Speaker 1: thinking about this that that I think is important. One 227 00:14:37,600 --> 00:14:43,960 Speaker 1: is that a lot of the Chinese products are invoiced 228 00:14:44,000 --> 00:14:46,680 Speaker 1: in dollars, the trade products there and the imports and 229 00:14:46,680 --> 00:14:50,880 Speaker 1: the exports are both invoiced in dollars, So the red 230 00:14:50,920 --> 00:14:55,440 Speaker 1: men B doesn't really affect that, okay, And the red 231 00:14:55,480 --> 00:14:58,560 Speaker 1: men B two dollar is not the only exchange rate 232 00:14:59,160 --> 00:15:02,120 Speaker 1: that the China should care about, because of course a 233 00:15:02,280 --> 00:15:07,560 Speaker 1: major customer is the Euro area, and so when the 234 00:15:07,720 --> 00:15:12,440 Speaker 1: r and B depreciates against the dollar appreciates against the euro. 235 00:15:12,600 --> 00:15:14,840 Speaker 1: So there's a little bit of a of a wash there. 236 00:15:15,200 --> 00:15:21,680 Speaker 1: And as they said that the invoicing also essentially offsets 237 00:15:22,040 --> 00:15:26,520 Speaker 1: some of the exchange rate effect. The other thing to consider, though, 238 00:15:26,880 --> 00:15:30,640 Speaker 1: uh and it's certainly irrelevant and probably more relevant question 239 00:15:31,520 --> 00:15:34,920 Speaker 1: is how does the R and B dollar affect the 240 00:15:34,960 --> 00:15:40,600 Speaker 1: financial side of the economy. The Chinese enterprises have borrowed 241 00:15:40,640 --> 00:15:45,320 Speaker 1: a lot in dollars, and so when the RMB dollar changes, 242 00:15:45,480 --> 00:15:49,160 Speaker 1: that is a direct hit on the financial side of 243 00:15:49,200 --> 00:15:52,120 Speaker 1: the economy. And so if we think about the balance 244 00:15:52,320 --> 00:15:57,400 Speaker 1: of risks to the Chinese economy, the risk coming from 245 00:15:57,600 --> 00:16:02,960 Speaker 1: the financial side and the much more costly servicing of 246 00:16:03,200 --> 00:16:06,720 Speaker 1: dollar debt in the face of a depreciation of the 247 00:16:06,840 --> 00:16:12,120 Speaker 1: R and B that financial risk offsets whatever they might 248 00:16:12,200 --> 00:16:15,120 Speaker 1: get on the trade side. So a lot of people 249 00:16:15,240 --> 00:16:18,320 Speaker 1: think that seven you want to the dollar is sort 250 00:16:18,320 --> 00:16:22,200 Speaker 1: of a red line? Is that so that that sort 251 00:16:22,240 --> 00:16:25,880 Speaker 1: of has been put out there as an important watershed 252 00:16:26,240 --> 00:16:32,960 Speaker 1: for many people the view of the our our folks 253 00:16:33,080 --> 00:16:36,480 Speaker 1: in in in who are closest to the situation there 254 00:16:36,640 --> 00:16:40,000 Speaker 1: is that, uh that not that shouldn't be thought of 255 00:16:40,480 --> 00:16:43,640 Speaker 1: in so strong as terms. Yeah, all right, And then 256 00:16:43,720 --> 00:16:47,440 Speaker 1: one other question again on China. You talked about how 257 00:16:47,480 --> 00:16:50,440 Speaker 1: it's slowing down, but how much will it slow down? 258 00:16:50,440 --> 00:16:55,080 Speaker 1: Will China's Chinese leaders put de leveraging on hold next 259 00:16:55,160 --> 00:16:58,320 Speaker 1: year to keep growth from falling below six Well, they've 260 00:16:58,360 --> 00:17:03,600 Speaker 1: already started to sort of dial back some of the 261 00:17:03,600 --> 00:17:07,760 Speaker 1: things that they were doing directly associated with trying to 262 00:17:08,600 --> 00:17:12,120 Speaker 1: clean up the financial sector. So that has already um 263 00:17:12,200 --> 00:17:16,040 Speaker 1: kind of the trans lsstination on that one. So and 264 00:17:16,040 --> 00:17:20,880 Speaker 1: they're and they're definitely trying to focus credit allocation more 265 00:17:21,000 --> 00:17:24,520 Speaker 1: to the private owned enterprises, the ones that have been 266 00:17:25,080 --> 00:17:28,639 Speaker 1: constrained the most by the policies that they had in 267 00:17:28,760 --> 00:17:31,600 Speaker 1: place to try to again, the objective was to clean 268 00:17:31,680 --> 00:17:34,120 Speaker 1: up the financial sector, so there's a little bit, there's 269 00:17:34,119 --> 00:17:36,560 Speaker 1: definitely a dial back on that. And as I say, 270 00:17:36,560 --> 00:17:40,560 Speaker 1: there's also a wide range of what ends up being 271 00:17:40,600 --> 00:17:46,240 Speaker 1: fiscal policy. U tax cuts to promote consumption, and consumption 272 00:17:46,720 --> 00:17:50,400 Speaker 1: support through various other types of taxes, and then some 273 00:17:50,720 --> 00:17:55,040 Speaker 1: relaxation of constraints on bond issuance by local government. So 274 00:17:55,080 --> 00:17:57,200 Speaker 1: these are all fiscal policy measures that are also being 275 00:17:57,200 --> 00:18:00,800 Speaker 1: put into place. The view is is that these are 276 00:18:00,840 --> 00:18:06,080 Speaker 1: going to be sufficient to offset the deceleration that's coming 277 00:18:06,119 --> 00:18:11,440 Speaker 1: from investment and consumption. And we shall see, we shall see. 278 00:18:11,880 --> 00:18:14,000 Speaker 1: They have a range of policies that they've been able 279 00:18:14,040 --> 00:18:16,560 Speaker 1: to implement in the past. I think, I think we 280 00:18:16,640 --> 00:18:22,240 Speaker 1: all I'll appreciate that the effectiveness of those policies tend 281 00:18:22,320 --> 00:18:25,720 Speaker 1: to be less effective, as you know, as you use 282 00:18:25,800 --> 00:18:28,760 Speaker 1: them over and over again, and so there is some 283 00:18:28,960 --> 00:18:32,680 Speaker 1: concern about the effectiveness of the policies going forward. Would 284 00:18:32,680 --> 00:18:35,560 Speaker 1: your estimate be that China will maintain growth of six 285 00:18:35,640 --> 00:18:38,800 Speaker 1: percent or better in twenty nineteen, at least reported that's 286 00:18:38,840 --> 00:18:41,600 Speaker 1: that's we certainly have, um, we certainly have better than 287 00:18:41,640 --> 00:19:03,080 Speaker 1: six percent. Okay, Katherine, The US and China obviously the 288 00:19:03,080 --> 00:19:05,360 Speaker 1: two biggest parts of the world economy, but I did 289 00:19:05,359 --> 00:19:08,560 Speaker 1: want to try to hit a few other places before 290 00:19:08,640 --> 00:19:12,240 Speaker 1: we wrap up on our podcast today. Quickly on Japan. 291 00:19:12,640 --> 00:19:15,479 Speaker 1: It still is the third largest economy. Are they on 292 00:19:15,520 --> 00:19:17,639 Speaker 1: the road to revival or are they going to be 293 00:19:17,680 --> 00:19:21,040 Speaker 1: stuck in low growth, low inflation for the foreseeable future. 294 00:19:21,680 --> 00:19:25,080 Speaker 1: So the economy has been doing better, they have achieved 295 00:19:25,320 --> 00:19:30,199 Speaker 1: more positive rates of growth, they've achieved some positive inflation 296 00:19:30,640 --> 00:19:34,520 Speaker 1: um sort of gotten out of the deflation slump. One 297 00:19:34,520 --> 00:19:37,639 Speaker 1: of the important ingredients to getting to them at to 298 00:19:37,680 --> 00:19:41,639 Speaker 1: getting to that point is the Olympics. The Olympics have 299 00:19:41,720 --> 00:19:46,280 Speaker 1: been an important driver of business investment. Now we are 300 00:19:46,320 --> 00:19:49,760 Speaker 1: hoping and and they are having in place the policies 301 00:19:49,800 --> 00:19:52,920 Speaker 1: to make that catalytic, in other words, not just one 302 00:19:52,920 --> 00:19:55,720 Speaker 1: off shot to to do investment for the Olympics, but 303 00:19:56,000 --> 00:20:00,560 Speaker 1: to catalyze more generally positive rates of growth. Of course, 304 00:20:00,760 --> 00:20:05,080 Speaker 1: face a big challenge associated with their desire to put 305 00:20:05,160 --> 00:20:09,919 Speaker 1: their fiscal accounts on a sustainable trajectory. Of course, a 306 00:20:10,080 --> 00:20:15,160 Speaker 1: component of that is the value added attacks increase. And 307 00:20:15,280 --> 00:20:17,840 Speaker 1: now the plan is to put into place a variety 308 00:20:17,880 --> 00:20:22,119 Speaker 1: of mechanisms and other fiscal policies that would um offset 309 00:20:22,240 --> 00:20:25,360 Speaker 1: to some degree the consequences of the value added tax cut. 310 00:20:25,640 --> 00:20:28,359 Speaker 1: But of course if you do that, then the sustainability 311 00:20:28,400 --> 00:20:31,760 Speaker 1: of the fiscal trajectory is also put at risk or 312 00:20:31,920 --> 00:20:35,439 Speaker 1: or not improved so much so they definitely face some 313 00:20:35,480 --> 00:20:40,159 Speaker 1: problems going forward to achieve um a path out of 314 00:20:40,200 --> 00:20:44,159 Speaker 1: their current fiscal situation. Staying in Asia, what do you 315 00:20:44,240 --> 00:20:49,000 Speaker 1: make of the clash between Prime Minister Modi of India 316 00:20:49,119 --> 00:20:53,000 Speaker 1: and the nation's central bank. The Indian Central Bank has 317 00:20:53,440 --> 00:20:57,719 Speaker 1: really achieved quite a bit of independence over the years 318 00:20:57,840 --> 00:21:01,760 Speaker 1: and that's been an important and are to support the 319 00:21:02,040 --> 00:21:07,960 Speaker 1: growth in India. And the lessons that we've learned from 320 00:21:08,000 --> 00:21:11,480 Speaker 1: a number of different episodes over the years is is 321 00:21:11,560 --> 00:21:16,200 Speaker 1: that it's important to have a good relationship between the 322 00:21:16,240 --> 00:21:21,000 Speaker 1: government and the central bank, one that respects each other's 323 00:21:21,359 --> 00:21:25,199 Speaker 1: sets of policies, and that the independence of the central 324 00:21:25,200 --> 00:21:29,119 Speaker 1: bank is it is an underpinning of a stable macroeconomic 325 00:21:29,560 --> 00:21:33,280 Speaker 1: growth trajectory going forward. So you know, it's it's one 326 00:21:33,280 --> 00:21:37,399 Speaker 1: thing for politicians to kind of comment on on central 327 00:21:37,400 --> 00:21:40,680 Speaker 1: bank independence and central bank what the central bank is 328 00:21:40,720 --> 00:21:43,320 Speaker 1: doing there? Should you know, communication is always reasonable, But 329 00:21:44,000 --> 00:21:47,080 Speaker 1: but you don't want to undermine the independence of the 330 00:21:47,080 --> 00:21:50,160 Speaker 1: central Bank. All right, Let's go from one hot spot 331 00:21:50,200 --> 00:21:54,919 Speaker 1: to another, over to Europe. A couple of issues weighing 332 00:21:54,960 --> 00:22:00,240 Speaker 1: on the European economy, Brexit and Italy. What you see 333 00:22:00,359 --> 00:22:06,600 Speaker 1: as the percent chance of a Brexit that produces no deal? Uh, 334 00:22:06,680 --> 00:22:08,800 Speaker 1: you know what's going on right now and what what 335 00:22:08,920 --> 00:22:11,720 Speaker 1: kind of result do you see happening um for both 336 00:22:11,760 --> 00:22:15,119 Speaker 1: the UK and the broader European economies. From day to 337 00:22:15,200 --> 00:22:18,800 Speaker 1: day we get different pieces of information about what the 338 00:22:18,840 --> 00:22:21,680 Speaker 1: prospects are for for bregsit. It's it's a little bit 339 00:22:21,720 --> 00:22:24,880 Speaker 1: like watching glasgrow. So it might have even changed while 340 00:22:24,880 --> 00:22:28,440 Speaker 1: we're while we're talking right now, Yeah, exactly. It's when 341 00:22:28,440 --> 00:22:32,800 Speaker 1: I described the shape of the distribution of uncertainty about Brexit, 342 00:22:32,880 --> 00:22:35,480 Speaker 1: it's a flat distribution. In other words, it's how do 343 00:22:35,520 --> 00:22:38,520 Speaker 1: you make a bet because you have no idea exactly 344 00:22:38,560 --> 00:22:42,080 Speaker 1: how it's going to end up. So it's a slow burn. 345 00:22:42,480 --> 00:22:45,560 Speaker 1: It's a slow burn, and then there will be an outcome. Now, 346 00:22:45,600 --> 00:22:48,679 Speaker 1: of course, the outcome might be we stop the clock 347 00:22:48,920 --> 00:22:54,399 Speaker 1: at eleven fifty nine and allow for further consideration. And 348 00:22:54,440 --> 00:22:58,560 Speaker 1: I think that there is definitely that possibility because nobody, 349 00:22:58,640 --> 00:23:01,520 Speaker 1: I don't think anybody Frank really wants a hard Brexit 350 00:23:02,040 --> 00:23:05,359 Speaker 1: and they want to have some resolution of what what 351 00:23:05,480 --> 00:23:09,280 Speaker 1: a new relationship might look like, and that puts the 352 00:23:10,040 --> 00:23:15,800 Speaker 1: higher probability on Italy. Italy and the European Commission are 353 00:23:15,840 --> 00:23:20,280 Speaker 1: butting heads over Italy's budget deficit. Will there's two sides 354 00:23:20,320 --> 00:23:23,920 Speaker 1: find a safe face saving way out of their conflict. Well, 355 00:23:23,920 --> 00:23:27,280 Speaker 1: I think the the the avenue that provides the best 356 00:23:27,320 --> 00:23:31,360 Speaker 1: opportunity for both saving face but also, of course, much 357 00:23:31,359 --> 00:23:35,959 Speaker 1: more importantly, having Italy returned to some to return to growth, 358 00:23:36,359 --> 00:23:38,880 Speaker 1: which of course is critical for them to achieve any 359 00:23:38,960 --> 00:23:41,359 Speaker 1: kind of debt reduction. Is you have to have growth. 360 00:23:41,359 --> 00:23:44,160 Speaker 1: It's the denominator and all the ratios that everybody cares 361 00:23:44,200 --> 00:23:47,919 Speaker 1: about debt to GDP, deficit to GDP, So you have 362 00:23:48,000 --> 00:23:51,200 Speaker 1: to have growth. So the way you get to both growth, 363 00:23:51,240 --> 00:23:53,680 Speaker 1: which is the most important thing, but also saving face 364 00:23:54,400 --> 00:23:58,159 Speaker 1: is to have a discussion about what's below the top line. 365 00:23:58,640 --> 00:24:01,240 Speaker 1: In other words, the fight is about the top line, 366 00:24:01,440 --> 00:24:06,639 Speaker 1: meaning the deficit to GDP ratio and um that number 367 00:24:06,880 --> 00:24:10,280 Speaker 1: is not nearly as important as what are the policies 368 00:24:10,280 --> 00:24:12,800 Speaker 1: that are below the top line, because some policies are 369 00:24:12,800 --> 00:24:16,160 Speaker 1: going to be more effective in helping the economy grow 370 00:24:16,600 --> 00:24:21,840 Speaker 1: than others, and I would like to see more discussion 371 00:24:21,960 --> 00:24:26,040 Speaker 1: about those set of policies, the ones that will satisfy 372 00:24:26,160 --> 00:24:30,120 Speaker 1: both some of the political issues but also will ultimately 373 00:24:30,480 --> 00:24:32,960 Speaker 1: get the economy to grow, because no politicians going to 374 00:24:33,040 --> 00:24:37,160 Speaker 1: win on an economy in recession. Catherine, let's go back 375 00:24:37,240 --> 00:24:42,639 Speaker 1: across the Atlantic to Latin America. Two key economies in 376 00:24:42,720 --> 00:24:47,800 Speaker 1: this hemisphere, Brazil and Mexico. They've both just elected new 377 00:24:47,880 --> 00:24:51,560 Speaker 1: leaders in recent months. Mexico's is on the left, Brazil's 378 00:24:51,640 --> 00:24:55,119 Speaker 1: is more on the right. What does that mean for 379 00:24:55,560 --> 00:24:59,000 Speaker 1: the economic outlook in those countries. Well, I think we're 380 00:24:59,000 --> 00:25:03,200 Speaker 1: still seeing how things are developing UH in terms of 381 00:25:03,760 --> 00:25:07,840 Speaker 1: the approaches that these new leaders are taking in their economies. 382 00:25:08,400 --> 00:25:13,800 Speaker 1: There is um somewhat of a the Mexico side of things, 383 00:25:14,560 --> 00:25:17,399 Speaker 1: somewhat of positive in the in the sense that you know, 384 00:25:17,640 --> 00:25:19,800 Speaker 1: next door to the United States, the United States doing 385 00:25:19,800 --> 00:25:24,160 Speaker 1: relatively well, but there is some concern about the most 386 00:25:24,240 --> 00:25:28,719 Speaker 1: recent initiatives to to roll back the construction of the 387 00:25:28,760 --> 00:25:31,560 Speaker 1: airport UH and whether or not that might be viewed 388 00:25:31,560 --> 00:25:34,240 Speaker 1: as a bell weather for some of the other policies 389 00:25:34,280 --> 00:25:36,480 Speaker 1: that might be put into place there. So so there 390 00:25:36,560 --> 00:25:40,600 Speaker 1: is more concern about about what might be the pathway 391 00:25:40,680 --> 00:25:45,679 Speaker 1: for for growth for Mexico and in particularly how the 392 00:25:45,680 --> 00:25:49,080 Speaker 1: financial markets might react to that and therefore that feedback 393 00:25:49,080 --> 00:25:52,840 Speaker 1: into the domestic economy or GDP in the economy. UM. 394 00:25:53,000 --> 00:25:57,040 Speaker 1: For Brazil, even less information really just you know, the 395 00:25:57,080 --> 00:25:59,880 Speaker 1: government really just starting to be formed. Of course there's 396 00:26:00,960 --> 00:26:05,359 Speaker 1: the honeymoon period. Um. Definitely some talk about making some 397 00:26:05,359 --> 00:26:08,679 Speaker 1: some of the fundamental changes on the fiscal side that 398 00:26:08,680 --> 00:26:12,840 Speaker 1: are necessary to have the fiscal side of the things 399 00:26:13,080 --> 00:26:16,080 Speaker 1: being stable. I'm talking about the pension reforms or mini 400 00:26:16,119 --> 00:26:20,240 Speaker 1: pension reform that have been well known across very even 401 00:26:20,280 --> 00:26:23,600 Speaker 1: before the election that this was that was crucial for Brazil. 402 00:26:24,000 --> 00:26:26,560 Speaker 1: So we're getting you know, we're getting some some initial 403 00:26:26,560 --> 00:26:29,960 Speaker 1: thoughts about that coming from the administration, but it will 404 00:26:30,000 --> 00:26:33,560 Speaker 1: depend on how things work out. I think with Latin 405 00:26:33,640 --> 00:26:36,320 Speaker 1: America in general, not just those two countries, but also 406 00:26:36,520 --> 00:26:41,080 Speaker 1: more broadly, different parts of the of the region are 407 00:26:41,560 --> 00:26:45,680 Speaker 1: more associated with the United States, Others are more associated 408 00:26:45,680 --> 00:26:48,680 Speaker 1: with the dynamics in China, and because there's so much 409 00:26:48,680 --> 00:26:52,080 Speaker 1: of a divergence between what's happening on the top line 410 00:26:52,119 --> 00:26:55,600 Speaker 1: GDP range of things for the US versus China. That 411 00:26:55,600 --> 00:26:58,159 Speaker 1: that's going to create a divergence of growth rates in 412 00:26:58,240 --> 00:27:01,800 Speaker 1: Latin America as well. At something to watch emerging markets. 413 00:27:01,840 --> 00:27:06,960 Speaker 1: So we see falling currencies, surging interest rates, what is 414 00:27:07,000 --> 00:27:10,160 Speaker 1: the outlook for the next twelve months for the emerging markets. 415 00:27:10,920 --> 00:27:14,240 Speaker 1: I'm not a believer in aggregates. I think that's I 416 00:27:14,359 --> 00:27:16,960 Speaker 1: sort of talk about the top top line versus what's 417 00:27:17,000 --> 00:27:20,119 Speaker 1: underneath for the Italian budget. You know, divergence within the 418 00:27:20,160 --> 00:27:23,760 Speaker 1: Latin America. And so the emerging markets are exactly the same. 419 00:27:23,800 --> 00:27:27,520 Speaker 1: They cannot be bulked up into one unit. And and 420 00:27:27,560 --> 00:27:30,320 Speaker 1: the problem is that they have. There's the ms C 421 00:27:30,480 --> 00:27:33,800 Speaker 1: I M and so you know, somebody says, I want 422 00:27:33,800 --> 00:27:36,879 Speaker 1: to take exposure to the emerging markets in my portfolio, 423 00:27:36,960 --> 00:27:40,200 Speaker 1: and so they buy into the ms C I M 424 00:27:40,240 --> 00:27:42,840 Speaker 1: and so that means all the money goes in and 425 00:27:42,880 --> 00:27:45,800 Speaker 1: then all the money comes out. And what want is it? 426 00:27:45,920 --> 00:27:48,719 Speaker 1: Just to be very specific in terms of thinking about 427 00:27:49,040 --> 00:27:54,400 Speaker 1: how might the trade shock affect different countries in Asia, Well, 428 00:27:54,840 --> 00:27:58,840 Speaker 1: it affects the different countries very differentially depending on how 429 00:27:58,880 --> 00:28:02,560 Speaker 1: they are linked. Step to China through the global value chain. 430 00:28:02,880 --> 00:28:05,000 Speaker 1: That's sort of the first way of looking at it. 431 00:28:05,240 --> 00:28:10,320 Speaker 1: But then secondly, which countries might be a source of 432 00:28:10,440 --> 00:28:15,920 Speaker 1: supply if buyers can't buy from China anymore. So that's 433 00:28:15,960 --> 00:28:18,840 Speaker 1: a second round. And then a third is, of course, 434 00:28:18,840 --> 00:28:23,000 Speaker 1: who's most exposed to dollar appreciation? Uh, it's a financial 435 00:28:23,040 --> 00:28:26,679 Speaker 1: side of things. So so the emerging markets are really 436 00:28:26,720 --> 00:28:31,760 Speaker 1: a heterogeneous group based on trade relationships, based on their 437 00:28:31,760 --> 00:28:38,320 Speaker 1: exposure to principally dollars in terms of their obligations, and 438 00:28:38,400 --> 00:28:42,640 Speaker 1: so it really warrants a much more, much more disaggregated 439 00:28:42,720 --> 00:28:46,960 Speaker 1: view of countries in order to decide who's going to 440 00:28:47,080 --> 00:28:50,520 Speaker 1: do relatively better than others. Katherine, we've covered a lot 441 00:28:50,600 --> 00:28:55,120 Speaker 1: of ground here. What's the bottom line? Will be a 442 00:28:55,200 --> 00:28:58,200 Speaker 1: good year or a bad year for the global economy? 443 00:28:58,240 --> 00:29:00,280 Speaker 1: I think I know what your answer is going to be. Well, 444 00:29:00,280 --> 00:29:04,280 Speaker 1: I've recently wrote a piece um that was titled some 445 00:29:04,320 --> 00:29:10,480 Speaker 1: basis for optimism question mark. Yes, but the financial turbulence 446 00:29:10,840 --> 00:29:15,280 Speaker 1: and the external accounts through trade remain the dominant narrative, 447 00:29:15,880 --> 00:29:19,920 Speaker 1: and we do see sources of domestic resilience, particularly in 448 00:29:19,920 --> 00:29:24,680 Speaker 1: the United States, sources of domestic demand. Those internally oriented firms, 449 00:29:24,720 --> 00:29:28,120 Speaker 1: the ones that are really powered by a strong consumer, 450 00:29:28,200 --> 00:29:32,240 Speaker 1: that's low unemployment rates, rising wages. That source of domestic 451 00:29:32,280 --> 00:29:35,360 Speaker 1: demand we actually see replicated in a number of countries, 452 00:29:35,760 --> 00:29:39,520 Speaker 1: uh In in Europe and and even and even in Japan. 453 00:29:40,080 --> 00:29:42,680 Speaker 1: But you know what really matters, You know that that's 454 00:29:42,680 --> 00:29:47,080 Speaker 1: if that's extremely important. Those are sources of optimism. But 455 00:29:47,320 --> 00:29:50,840 Speaker 1: the trade turbulence and the financial turbulence do remain the 456 00:29:50,880 --> 00:29:56,200 Speaker 1: dominant narrative into and so the prospects are um not 457 00:29:56,360 --> 00:30:00,200 Speaker 1: as not as hopeful as as we might think. All right, 458 00:30:00,360 --> 00:30:03,280 Speaker 1: Katherine Mann, chief Global economist at City Group, Thanks so 459 00:30:03,360 --> 00:30:05,440 Speaker 1: much for being with us. It was a pleasure. Thanks 460 00:30:05,520 --> 00:30:12,560 Speaker 1: very much. Benchmark will be back next week. Until then, 461 00:30:12,600 --> 00:30:15,560 Speaker 1: you can find us on the Bloomberg terminal, Bloomberg dot com, 462 00:30:15,560 --> 00:30:18,680 Speaker 1: our Bloomberg app, as well as podcast destinations such as 463 00:30:18,720 --> 00:30:22,520 Speaker 1: Apple Podcasts, Spotify or wherever you listen. We'd love it 464 00:30:22,560 --> 00:30:24,520 Speaker 1: if you took the time to rate and review the 465 00:30:24,560 --> 00:30:27,479 Speaker 1: show so more listeners can find us. And you can 466 00:30:27,520 --> 00:30:31,280 Speaker 1: find us on Twitter, follow me at Scott Landman, Peter 467 00:30:31,520 --> 00:30:35,080 Speaker 1: You're at at Peter Coy, and our guest Katherine Man 468 00:30:35,240 --> 00:30:39,080 Speaker 1: is at c l M a n n eCOM benchmark 469 00:30:39,200 --> 00:30:42,360 Speaker 1: is produced by Toford Forehead. Francesca Levy is the pet 470 00:30:42,360 --> 00:30:45,680 Speaker 1: of Bloomberg Podcasts. Thanks for listening, See you next time.