WEBVTT - Fed's Lays Out Path Forward amid Uncertain Trump Policies 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.760 us live on YouTube right now. 0:00:27.880 --> 0:00:30.200 Joining us on the equity market bracket is someone with 0:00:30.280 --> 0:00:35.080 a definitive memo working with heymen at evercore is, says 0:00:35.159 --> 0:00:39.320 Julian Emmanuel, where Sally Good brief ust this morning. How 0:00:39.360 --> 0:00:44.520 does the Hymen Emmanuel world look with a one point 0:00:44.680 --> 0:00:47.959 seven percent growth rate? It's gotta change. 0:00:49.040 --> 0:00:50.200 It definitely does change. 0:00:50.240 --> 0:00:52.440 And there's no question about the fact that when you 0:00:52.479 --> 0:00:56.080 think about what's gone on the last four to six weeks, 0:00:56.440 --> 0:00:59.920 you're at one of these points where if you go 0:01:00.160 --> 0:01:04.679 back before the pandemic, we saw the soft data lead 0:01:04.720 --> 0:01:08.720 the hard data consistently for the decade before the pandemic. 0:01:08.959 --> 0:01:13.400 That has not been the case since twenty twenty consistently. 0:01:13.840 --> 0:01:16.640 But the questions are now open as to whether it is. 0:01:17.000 --> 0:01:21.280 And so you know, whether it's one point seven, one 0:01:21.319 --> 0:01:22.319 point five or. 0:01:22.280 --> 0:01:24.680 Maybe even two if if things. 0:01:24.440 --> 0:01:28.880 Stabilize, the risks are clearly to the downside and you 0:01:29.000 --> 0:01:31.000 have to account that for that in different ways. 0:01:32.120 --> 0:01:35.800 ISI I are the kings of hard data. What's the 0:01:35.840 --> 0:01:37.160 hard data, you guys see? 0:01:37.319 --> 0:01:40.320 So the hard to the hard data is very mixed. 0:01:40.440 --> 0:01:45.440 Our team, the survey's team, led by my esteem colleague 0:01:45.840 --> 0:01:51.000 Oscar Slaughterback, basically, it's it's very mixed. There's seen, and 0:01:51.680 --> 0:01:55.480 it's even more complicated by the fact that, you know, 0:01:55.520 --> 0:01:59.840 we've had a very poor weather winter and actually this 0:02:00.000 --> 0:02:02.960 this has been a very poor cold and flu season, 0:02:03.480 --> 0:02:06.160 so there's also that going on. And then of course 0:02:06.200 --> 0:02:08.960 when you think about the stress and the jobs market, 0:02:09.360 --> 0:02:13.720 it's primarily concentrated in that area in and around sixteen 0:02:13.800 --> 0:02:18.280 hundred Pennsylvania Avenue, So very very conflicting signals. 0:02:18.680 --> 0:02:20.600 How did FED Chairman j pal do yesterday? 0:02:20.919 --> 0:02:21.440 Amazing? 0:02:21.760 --> 0:02:23.800 Why knocking the cover off the ball? 0:02:24.080 --> 0:02:25.960 Because basically, what what. 0:02:26.080 --> 0:02:30.040 He needed to do was project a sense of calm 0:02:30.639 --> 0:02:34.520 in an environment that is anything but calm, and he did, 0:02:34.600 --> 0:02:37.880 and he made the point. You know, you can argue 0:02:37.880 --> 0:02:41.440 whether the word transitory was appropriate for the situation or not, 0:02:41.960 --> 0:02:44.760 but he went out of his way to make sure 0:02:44.800 --> 0:02:46.959 that that got across. And if you look at the 0:02:47.040 --> 0:02:50.640 last trade war in twenty eighteen and twenty nineteen inflation 0:02:51.120 --> 0:02:52.840 was in fact transitory. 0:02:53.480 --> 0:02:56.760 So where do we go from here? If you're an investor, 0:02:56.840 --> 0:02:58.480 I mean you're stepping back. You're saying, hey, I've had 0:02:59.120 --> 0:03:00.800 at the peak to try off at a ten percent 0:03:00.840 --> 0:03:03.040 pullback in the marketplace. If I'm in the if I'm 0:03:03.080 --> 0:03:06.560 in a nastac maybe twelve thirteen percent. Is that a 0:03:06.639 --> 0:03:10.160 healthy pullback in an otherwise okay market or do we 0:03:10.280 --> 0:03:12.800 have something really else to worry about here? 0:03:13.240 --> 0:03:16.200 Well, in our view, this is a pullback, okay, okay, 0:03:16.720 --> 0:03:19.440 But look, this is one of these times where the 0:03:19.800 --> 0:03:24.560 path of policy really is going to set the narrative 0:03:25.560 --> 0:03:28.120 in terms of whether the pullback has more to go, 0:03:29.040 --> 0:03:32.079 or whether we think you're actually starting a bottoming process, 0:03:32.520 --> 0:03:35.800 you know, let alone the fact of something more sinister. 0:03:36.240 --> 0:03:39.720 The market, to be clear, is pricing stagflation right now. 0:03:40.160 --> 0:03:43.240 Julian Emmanuel with a seventh corps ISSI A lengthy conversation 0:03:43.360 --> 0:03:45.800 to get us started this morning. Wendy Schiller on the 0:03:45.920 --> 0:03:48.760 Department of Education will be with us from run University, 0:03:49.120 --> 0:03:52.840 and then on foreign exchange, which was really sophisticated this morning. 0:03:53.280 --> 0:03:56.920 Audrey Child Freeman a strong hour here on YouTube. Subscribe 0:03:57.280 --> 0:04:01.160 to Bloomberg podcasts out on YouTube. Okay, Julian, so, I 0:04:01.200 --> 0:04:04.160 did a nominal GDP math which I learned from ed Heim, 0:04:04.240 --> 0:04:08.120 and while they fed, you know, guidance came out. Mohammad 0:04:08.120 --> 0:04:10.480 Alarian nailed it in a note later in the day 0:04:10.520 --> 0:04:13.240 out of Cambridge where he said, okay, you got a 0:04:13.440 --> 0:04:17.279 growth dynamic, you got an inflation dynamic, and nominal GDP 0:04:17.560 --> 0:04:20.760 came in as a sum total a little bit but 0:04:20.920 --> 0:04:25.200 pretty much level nominal GDP. Do you guys model out it, 0:04:25.279 --> 0:04:29.800 we'll see a reduction and nominal GDP. And if we do, 0:04:30.000 --> 0:04:33.000 does that fold over into reduced revenues at the top line. 0:04:33.240 --> 0:04:38.160 Well, in theory it could. But from our point of view, 0:04:38.160 --> 0:04:43.679 when you think about, you know, the trajectory of both 0:04:43.839 --> 0:04:48.640 sales and earnings in corporate America right now, it's actually 0:04:48.760 --> 0:04:51.800 reasonably strong and it goes back to the psychology of 0:04:51.800 --> 0:04:55.360 the last couple of years. So, in essence, corporate America 0:04:55.720 --> 0:04:59.760 has actually been preparing itself for the conditions we see now. 0:05:00.120 --> 0:05:03.560 Brilliant Let me jump forward. Then, can they cut costs 0:05:03.920 --> 0:05:08.640 fast enough? Can they adapt to maintain margins? 0:05:09.839 --> 0:05:14.240 They have shown it so and there kids don't see 0:05:14.279 --> 0:05:18.320 that and you bet against corporate America at your peril. 0:05:19.080 --> 0:05:20.160 You absolutely do. 0:05:20.839 --> 0:05:20.919 Uh. 0:05:21.080 --> 0:05:23.880 And from from our point of view, the last couple 0:05:23.920 --> 0:05:27.719 of years is the reason that the markets were able 0:05:27.920 --> 0:05:31.280 to survive the shock of you know, the interest rate 0:05:31.400 --> 0:05:35.520 medicine that we got is because we were so prepared. 0:05:36.000 --> 0:05:39.080 And then there's this wonderful little tool that's going to 0:05:39.160 --> 0:05:41.880 backstop productivity. I know we're tired of talking about it, 0:05:42.200 --> 0:05:43.919 but AI is is is. 0:05:44.640 --> 0:05:46.680 They let AI and ed Hymenshow? 0:05:46.839 --> 0:05:47.600 Yeah, I can't believe it? 0:05:47.640 --> 0:05:48.120 Can't help it? 0:05:48.520 --> 0:05:50.920 How do you do AI with a black sharpie? 0:05:52.560 --> 0:05:52.839 All right? 0:05:52.880 --> 0:05:56.960 So, Julian, if the inflation impact from Taryston mayor be 0:05:57.120 --> 0:05:59.840 transitory to some degree, how about the hit the one 0:06:00.200 --> 0:06:04.160 just overall economic growth? Is that a serious issue? That 0:06:04.320 --> 0:06:06.520 economic growth forecast need to be tempered a little bit? 0:06:06.760 --> 0:06:12.040 Well, and and you're seeing it. But again, what's important 0:06:12.440 --> 0:06:18.640 is the psychology around the jobs markets. It is literally 0:06:18.880 --> 0:06:22.159 all about jobs. And we like to say that on balance, 0:06:22.520 --> 0:06:27.000 if you're the retail investing public, you don't necessarily have 0:06:27.240 --> 0:06:30.160 to sell your stocks while you've still got a job. 0:06:30.480 --> 0:06:33.320 And so from our point of view, the way the 0:06:33.520 --> 0:06:35.560 jobs market unfolds is. 0:06:35.800 --> 0:06:39.040 Very very important here. And you know, we're just going 0:06:39.120 --> 0:06:39.320 to have. 0:06:39.440 --> 0:06:43.560 To see what the echo of the DOSEE layoffs is 0:06:43.760 --> 0:06:44.840 in the private sector. 0:06:45.360 --> 0:06:47.040 So what are we doing with US stocks here? 0:06:47.880 --> 0:06:50.320 I had late last year, earlier this year, I had 0:06:50.839 --> 0:06:54.040 everybody outside the US rushing into the US stock market. 0:06:54.080 --> 0:06:57.040 I'm hearing now some of the international buyers are leaving 0:06:57.120 --> 0:06:57.760 the stock market. 0:06:57.839 --> 0:06:58.560 What are we doing with this? 0:06:59.080 --> 0:07:04.960 So and no question, that's probably the biggest question we're getting, 0:07:05.040 --> 0:07:09.880 you know, with international investors selling US stocks. You know, 0:07:10.280 --> 0:07:13.160 our view is that even if you get a prolonged 0:07:13.240 --> 0:07:16.920 period of rest of world outperformance, this is not a 0:07:17.080 --> 0:07:20.120 zero sum game. You look at the last period that happened. 0:07:20.160 --> 0:07:23.160 It's been so long ago we can barely remember it. 0:07:23.800 --> 0:07:28.040 But in the OOS all the boats floated. And frankly, again, 0:07:28.160 --> 0:07:31.400 this is why policy is so important. There could be 0:07:31.600 --> 0:07:36.560 a world where there is you know, very positive outcomes 0:07:36.640 --> 0:07:39.720 globally for policy. There may also be a world where 0:07:39.760 --> 0:07:42.160 that's not the case, which is why the markets and 0:07:42.320 --> 0:07:45.400 the economy and sentiment is on such an edge right now. 0:07:45.480 --> 0:07:48.000 Tell us about the last paragraph of your claim. Note 0:07:48.120 --> 0:07:50.760 you go in and you know, I know it's a 0:07:50.840 --> 0:07:53.880 look back, but you sum up the revenue dynamics, revenue 0:07:53.960 --> 0:07:58.680 misses down the income statement, earnings dynamics, earnings misses. Do 0:07:58.760 --> 0:08:01.280 you believe I don't know when is Jay? Let me. 0:08:01.440 --> 0:08:03.640 I can go to the Bloomberg terminal, folks and look 0:08:03.720 --> 0:08:06.680 up the statistic because Paul Sweeney taught me how to 0:08:06.760 --> 0:08:10.800 do it. There we go, JP Morgan. April eleven is 0:08:10.840 --> 0:08:12.040 when we get JP Morgan? 0:08:12.120 --> 0:08:12.400 What is that? 0:08:12.560 --> 0:08:15.720 That's nine days after the world ends on April second? 0:08:16.280 --> 0:08:20.760 Do you have any certainty about the uncertainty of your 0:08:20.840 --> 0:08:24.520 acclaimed last paragraph looking into the next earning season? 0:08:24.720 --> 0:08:27.800 Well, so this is going to be a season where 0:08:29.120 --> 0:08:33.559 what you're going to want and half starts, as you 0:08:33.640 --> 0:08:38.400 pointed out, nine days after you know, quote unquote liberation 0:08:38.640 --> 0:08:43.480 day for tariffs and so so, how is corporate America 0:08:44.000 --> 0:08:48.200 going to react to those nine days and talk about 0:08:48.240 --> 0:08:49.120 the path forward? 0:08:49.440 --> 0:08:49.480 That? 0:08:49.720 --> 0:08:53.160 The issue here is will we be able to chart 0:08:53.760 --> 0:08:58.120 a somewhat clearer path forward? In terms of the commentary, 0:08:58.400 --> 0:09:01.520 It's less about what this quote looks like, particularly for 0:09:01.600 --> 0:09:04.440 the financial companies, which you know you're gonna have mixed messages, 0:09:04.720 --> 0:09:10.199 great trading, slower banking, But it really is about the 0:09:10.320 --> 0:09:14.040 path forward and what the view is whether this uncertainty 0:09:14.480 --> 0:09:16.400 will in fact begin to dissipate. 0:09:17.320 --> 0:09:20.040 All right, So given that uncertainty, what are we doing 0:09:20.440 --> 0:09:23.600 right now? Am I buying stocks? Am I buying bonds? 0:09:23.640 --> 0:09:28.720 Am I buying alternatives? What are we doing here? I'm 0:09:28.920 --> 0:09:30.640 mind buying protection? Maybe I don't know. 0:09:30.880 --> 0:09:37.560 No, we're not buying protection that that we're that may 0:09:37.720 --> 0:09:40.719 change in front of April. Second, if the market were 0:09:40.800 --> 0:09:43.760 to stabilize and get a little bit complacent here. 0:09:44.160 --> 0:09:46.600 But I think when you look at this morning, you know. 0:09:47.440 --> 0:09:51.040 This is really a process as opposed to and off 0:09:51.120 --> 0:09:54.080 to the races type of environment or where you typically 0:09:54.160 --> 0:09:59.439 see volatility come in. We are gently accumulating. We're rebalancing 0:10:00.040 --> 0:10:03.280 based on the draw down, with the knowledge that the 0:10:03.360 --> 0:10:08.000 preconditions that end bull markets, with the biggest challenge of 0:10:08.080 --> 0:10:10.880 those being an impending recession. 0:10:11.240 --> 0:10:14.840 And we have to have faith and there is you know, as. 0:10:14.720 --> 0:10:17.880 An investor, you've got to have faith, period, but having 0:10:18.040 --> 0:10:21.439 faith that the course of policy and the resilience of 0:10:21.480 --> 0:10:25.240 the economy is enough for twenty twenty five not to 0:10:25.360 --> 0:10:28.240 be a recessionary or which we believe it to be quickly. 0:10:28.320 --> 0:10:32.280 Here evercore Isi, how do you go through the process 0:10:32.520 --> 0:10:33.400 of the recession. 0:10:33.559 --> 0:10:40.679 Call right now, jobs jobs, jobs, Okay? 0:10:40.800 --> 0:10:43.520 I agree? Four point four percent unemployment, right. 0:10:43.800 --> 0:10:48.080 And so the question is when the unemployment report comes 0:10:48.160 --> 0:10:51.920 out the first week in April, you know, our investors, 0:10:52.520 --> 0:10:57.600 is the psychology around that report going to be such 0:10:57.720 --> 0:11:02.520 that we can take that's below one hundred thousand but 0:11:02.720 --> 0:11:07.400 still positive, okay? And what's the reverberation around that? And 0:11:07.840 --> 0:11:10.360 from our point of view, we think there will be 0:11:10.480 --> 0:11:12.960 a resilience built in at that point. 0:11:13.160 --> 0:11:16.360 Julian Emmanuel, thank you so much. Terrific summation brief there 0:11:16.400 --> 0:11:20.480 and economics of evercore Isi and his equity market at 0:11:20.559 --> 0:11:22.080 work as well. 0:11:27.600 --> 0:11:31.120 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:11:31.240 --> 0:11:34.360 weekday afternoons from seven to ten am Eastern. Listen on 0:11:34.480 --> 0:11:38.079 Applecarplay and Android Auto with the Bloomberg Business app, or 0:11:38.280 --> 0:11:39.760 watch us live on YouTube. 0:11:40.200 --> 0:11:44.600 Now. On Gold hugely anticipated with the Gabelli Goldfund, Chris 0:11:44.920 --> 0:11:48.800 Mancini with us, the portfolio manager for Gabelli Gold. Where 0:11:48.840 --> 0:11:50.760 do you model gold out? I mean, Chris, if you 0:11:50.840 --> 0:11:53.920 take a vector, you take the price of gold logarithmic 0:11:54.120 --> 0:11:57.959 y access, and you extrapolate out where we are. How 0:11:58.040 --> 0:12:00.680 brave are you to extrapolate out the price of gold. 0:12:03.280 --> 0:12:07.600 That's a great question, you know. I'm I'm not that brave. 0:12:08.200 --> 0:12:11.640 I think that's the answer. After years in this industry, 0:12:12.120 --> 0:12:14.679 it's like it's very you know what, what is it? 0:12:14.880 --> 0:12:17.920 The you know, fortune favors the bold. But I'm not 0:12:18.040 --> 0:12:20.480 so sure it makes sense to be too bold. I mean, 0:12:20.920 --> 0:12:23.240 I think but but I but I do think that 0:12:24.960 --> 0:12:28.959 that it's not so brave to say that I think 0:12:29.000 --> 0:12:30.800 the gold is at least going to stay at this 0:12:31.000 --> 0:12:33.960 price here, It'll be at least where it is now 0:12:34.080 --> 0:12:36.640 by the end of the year. And I think that 0:12:36.880 --> 0:12:38.880 so that, you know, maybe that is being bold because 0:12:38.920 --> 0:12:41.240 I think that that that buy and large. There are 0:12:41.240 --> 0:12:44.160 a lot of people, you know, on the cell side 0:12:44.200 --> 0:12:46.440 who are saying that it's going to be lower by 0:12:46.480 --> 0:12:47.079 the end of the year. 0:12:48.200 --> 0:12:51.000 I love as Our squared. I think they have his 0:12:51.200 --> 0:12:54.080 first of all, as are squared is lower than Mario Gabelli's. 0:12:54.600 --> 0:12:56.800 But I think nobody in the world as an R 0:12:56.880 --> 0:13:00.320 squared is removed from the performance of the S five 0:13:01.160 --> 0:13:01.640 like Chris. 0:13:02.840 --> 0:13:06.079 Yes, hey, Chris, you know skill on my screen. 0:13:06.120 --> 0:13:07.760 What I've got is the price of gold, and I 0:13:07.800 --> 0:13:09.199 look at it every day, and I quote it every 0:13:09.240 --> 0:13:11.679 day for our listeners and viewers here. 0:13:12.000 --> 0:13:15.000 How about the gold mining companies, how do you think 0:13:15.040 --> 0:13:17.720 about them? How do they how did they typically perform 0:13:17.880 --> 0:13:19.200 visa VI the price of gold? 0:13:20.080 --> 0:13:22.480 Yeah, well that's that's the key I think is because 0:13:24.160 --> 0:13:26.360 is because what's happened is that over the past five years, 0:13:26.440 --> 0:13:29.599 what typically happens is that there's a leverage involved in 0:13:30.400 --> 0:13:32.959 the gold miner's relative to the price of gold. And 0:13:33.000 --> 0:13:37.400 that's because there's there's operating leverage. Right, So it costs, say, 0:13:37.600 --> 0:13:41.080 right now, fifteen hundred dollars an ounce to get an 0:13:41.160 --> 0:13:43.040 ounce of gold out of the ground, and when the 0:13:43.080 --> 0:13:45.880 price of gold, yeah, it's right, So it's pretty. 0:13:46.120 --> 0:13:47.520 How has that changed over the years. 0:13:48.400 --> 0:13:48.960 It's changed. 0:13:49.000 --> 0:13:52.800 Yeah, it's changed pretty significantly. So before COVID in twenty nineteen, 0:13:53.120 --> 0:13:55.679 it was around one thousand dollars an ounce. Now it's 0:13:55.720 --> 0:13:59.600 around fifteen hundred dollars an ounce, and that's primarily because 0:13:59.679 --> 0:14:04.280 during COVID it was extremely extremely difficult to mine, Like 0:14:04.360 --> 0:14:08.000 obviously you can't mine from home, and there were right 0:14:08.120 --> 0:14:10.640 there were, so there were lots of restrictions in place 0:14:10.760 --> 0:14:14.280 and things like that are social distancing, quarantine, someone got sick, 0:14:14.320 --> 0:14:16.920 they had to quarantine everybody around them. The state of 0:14:16.960 --> 0:14:20.640 Western Australia essentially had a lockdown of the entire state, 0:14:20.840 --> 0:14:23.280 so you couldn't get people in and out of the state. 0:14:23.360 --> 0:14:25.680 And there is a lot of labor that works in 0:14:25.680 --> 0:14:28.080 the Western Australian as it came from Eastern Australia, stuff 0:14:28.080 --> 0:14:30.440 like that, So the wages in Western Australia went up 0:14:30.440 --> 0:14:32.920 a lot, and all these little idiosyncratic things that happened 0:14:32.920 --> 0:14:35.880 all over. It really caused the price of gold, sorry, 0:14:36.000 --> 0:14:38.720 the cost to mine gold to go up so much, 0:14:39.040 --> 0:14:42.160 and then the cost of kind of stayed there, so 0:14:43.000 --> 0:14:45.920 we're still at this level where like So what happened 0:14:46.040 --> 0:14:49.200 was that the price of gold was too was fifteen hundred, 0:14:49.520 --> 0:14:52.440 the cost was a thousand. The price of gold went 0:14:52.520 --> 0:14:55.320 to two thousand during COVID, the cost of mind went 0:14:55.400 --> 0:14:57.960 up to fifteen hundred, So the miners didn't really do 0:14:58.120 --> 0:15:03.160 that well whereas they normally should. And what's happened now though, 0:15:03.240 --> 0:15:05.960 is that the price of minus fifteen hundred, but the 0:15:06.080 --> 0:15:08.680 cost went from two thousand to three thousand. So we're 0:15:08.720 --> 0:15:11.520 seeing that the leverage now, but it hasn't been reflected 0:15:11.560 --> 0:15:12.080 in the minors. 0:15:12.760 --> 0:15:16.000 Help me with am like one of your major holdings, Agneco. 0:15:16.120 --> 0:15:19.040 I guess it is a Canadian company, Venerable, it's been 0:15:19.080 --> 0:15:21.880 around sixty years. I don't think, I mean, Paul, it's 0:15:22.000 --> 0:15:25.800 not Apple computer return. But I'm sorry you look at 0:15:25.880 --> 0:15:30.640 it versus a major US bank or a major consumer goods. 0:15:31.000 --> 0:15:33.760 I mean, basically, Chris, they're minning money, right, I mean 0:15:33.800 --> 0:15:35.320 the total return is substanting. 0:15:35.360 --> 0:15:38.080 That's very true. No, no, no, that's very true. I 0:15:38.160 --> 0:15:41.280 mean so that's why I said, I mean, it's we 0:15:41.520 --> 0:15:43.480 don't need to be that bold to predict that goal 0:15:43.600 --> 0:15:46.440 is going to stay at three thousand. But that prediction 0:15:46.520 --> 0:15:49.280 would mean that for Agnico Ego, for example, at three 0:15:49.360 --> 0:15:52.280 thousand dollars an ounce, they'd degenerating around an eight percent 0:15:52.400 --> 0:15:57.040 free cash flow yield. So they're generating and you know, 0:15:57.160 --> 0:15:59.680 with some growth, so that free cash flow yield should 0:15:59.720 --> 0:16:03.120 grow over the next couple of years, and so like, yeah, 0:16:03.160 --> 0:16:05.600 these companies compared to bans, compared to tech companies, are 0:16:05.640 --> 0:16:09.320 generating you know, substantial free cash flow, so you know, you. 0:16:09.360 --> 0:16:14.320 Know, and folks off the twenty twenty two bottom Agnico whatever. However, 0:16:14.480 --> 0:16:17.880 Agnago Eagles only up one hundred and eighty seven fifty 0:16:17.960 --> 0:16:21.480 one percent per year, Chris Vancini fifty nine percent of 0:16:21.520 --> 0:16:27.040 your portfolios. Canadian tariffs discussion. I mean, you know, how 0:16:27.120 --> 0:16:29.760 do tariffs play in to move in a bar of 0:16:29.840 --> 0:16:32.000 gold over the Lisa Mateos. 0:16:31.480 --> 0:16:36.080 Account in America. Well, that's a good question. No tariffs 0:16:36.160 --> 0:16:38.800 on gold yet. I mean, but the good thing about 0:16:38.920 --> 0:16:43.120 gold really is that it's, you know, such a large 0:16:43.120 --> 0:16:45.640 amount of value. Isn't such a small amount of space 0:16:46.120 --> 0:16:49.160 because it is so dense, right, and it's so meaning 0:16:49.240 --> 0:16:52.960 that like theoretically, if there were tariffs on Canadian gold 0:16:53.920 --> 0:16:56.760 to come into the United States, the Canadians could send 0:16:56.800 --> 0:17:01.200 their gold to Switzerland on a you know, one planeload. 0:17:01.200 --> 0:17:03.160 Wouldn't be that big of a deal to send it 0:17:03.240 --> 0:17:05.639 to Switzerland, and then the Swiss could do what, you know, 0:17:05.720 --> 0:17:08.399 could sell it in Germany or they or in you know, 0:17:08.880 --> 0:17:11.399 somewhere in Arabia or something like that. So it's not 0:17:11.840 --> 0:17:14.120 it really shouldn't affect the miners too much, thankfully. 0:17:14.359 --> 0:17:19.520 Twenty seconds Is White Fang your favorite movie The Klondike 0:17:19.560 --> 0:17:20.119 Gold Rush? 0:17:20.800 --> 0:17:23.800 Yeah, well, you know, it's it's up there. I do, like, 0:17:23.880 --> 0:17:28.159 what's what's the other one Klondike Strike, the Alaskan gold right, 0:17:28.280 --> 0:17:30.399 So they're all really good. 0:17:30.680 --> 0:17:32.840 Don't be a stranger, Christmas Seon, Thank you so much. 0:17:33.200 --> 0:17:37.040 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:17:37.080 --> 0:17:40.399 starting at seven am Eastern on Applecarplay and Android Auto 0:17:40.520 --> 0:17:43.480 with the Bloomberg Business app. You can also listen live 0:17:43.560 --> 0:17:47.119 on Amazon Alexa from our flagship New York station. Just 0:17:47.200 --> 0:17:49.680 say Alexa Play Bloomberg eleven thirty. 0:17:50.000 --> 0:17:53.520 Morgan Stanley. She has the worst job she is to 0:17:53.640 --> 0:17:57.840 tie in US policy. Good luck the cacophony of Washington 0:17:57.960 --> 0:18:01.359 right now, whatever your politics into trying to hang on 0:18:01.520 --> 0:18:04.280 to your capital and maybe put it to work to 0:18:04.359 --> 0:18:09.800 make some form of return. Monica Gerre is incredibly experienced 0:18:10.200 --> 0:18:13.320 with legit budget duties for the City of New York 0:18:13.840 --> 0:18:17.480 and also a lot of good work in the House 0:18:17.560 --> 0:18:21.760 of Representatives. You know, the halls of the House. You 0:18:21.920 --> 0:18:25.800 must be on the phone. What are the Republicans and separately, 0:18:25.880 --> 0:18:29.480 what are the Democrats of the House telling you about 0:18:29.520 --> 0:18:30.639 the madness down there. 0:18:31.920 --> 0:18:35.440 I think that everyone is just trying to get through 0:18:35.560 --> 0:18:38.520 this as quickly and smoothly as possible, at least from 0:18:38.520 --> 0:18:42.440 the budget perspective. You know, they're essentially trying to take 0:18:43.440 --> 0:18:47.440 Doge and Elon Musk recommendations and bake them into this 0:18:47.600 --> 0:18:49.720 new budget bill. One of the things that I try 0:18:49.800 --> 0:18:51.879 to remind folks is that while there's all of this 0:18:52.000 --> 0:18:58.200 market uncertainty around tariffs, cutting and just general geopolitics, that 0:18:58.320 --> 0:19:00.640 by the end of the year, so if you're looking 0:19:01.320 --> 0:19:04.840 August to September, if for thinking about federal fiscal years 0:19:04.880 --> 0:19:07.800 what I'm talking about, there's likely to be some resolution 0:19:08.200 --> 0:19:11.680 and for the political sort of rhetoric to die down 0:19:11.800 --> 0:19:15.200 for a moment, because those tariff piece and the cuts 0:19:15.240 --> 0:19:16.720 are all going to have to be baked in, right, 0:19:16.760 --> 0:19:19.080 They're going to have to actually finalize them to vote 0:19:19.119 --> 0:19:19.560 on that bill. 0:19:19.800 --> 0:19:22.720 I mean, the power of you and Michael Jesus Morgan 0:19:22.800 --> 0:19:25.840 staling together is really a lot of academics. Do you 0:19:26.040 --> 0:19:30.760 see tariffs in any way moving the needle on revenue 0:19:30.920 --> 0:19:33.000 generation for the budget? 0:19:33.560 --> 0:19:36.720 The very high end estimates is that they think they 0:19:36.760 --> 0:19:39.800 can get a trillion. Around a trillion one point three 0:19:40.000 --> 0:19:44.560 was the highest estimate I've seen. Realistically, it's seeing closer 0:19:44.640 --> 0:19:47.359 to maybe seven hundred eight hundred billion, But you have 0:19:47.480 --> 0:19:49.119 to take into account that they're also going to be 0:19:50.520 --> 0:19:53.600 tabulating existing tariff revenue, in that they're going to essentially 0:19:53.680 --> 0:19:56.920 be taking all tariff revenue getting it through these external 0:19:57.040 --> 0:20:00.800 Revenue Service, a new sort of quasi a agency that's 0:20:00.840 --> 0:20:03.520 going to funnel the money through the federal government to 0:20:03.720 --> 0:20:06.199 the treasury versus just going straight to the treasury. 0:20:06.280 --> 0:20:06.399 Right. 0:20:06.440 --> 0:20:08.720 It creates a dynamic where now they can count it. 0:20:08.720 --> 0:20:09.280 To the budget. 0:20:09.440 --> 0:20:12.000 So it's already existing revenues that the US Treasury is 0:20:12.000 --> 0:20:15.199 already receiving, plus new So we have to see exactly 0:20:15.280 --> 0:20:17.480 what that's going to be in total. So do the 0:20:17.600 --> 0:20:19.480 new tariffs actually move the needle that much? 0:20:19.680 --> 0:20:20.080 Not much? 0:20:20.160 --> 0:20:23.720 Does the ship with a phrase shell game come to mind? 0:20:23.960 --> 0:20:25.440 Just the federal government in my mind. 0:20:25.320 --> 0:20:28.480 She just lost me their completely, But she knows what 0:20:28.600 --> 0:20:32.400 she's Monica, talk to us about kind of the budget, 0:20:32.680 --> 0:20:35.160 keeping the government running the budget. 0:20:35.720 --> 0:20:37.920 I'm told it. Just give us the timeline. 0:20:37.960 --> 0:20:40.119 What should be aware of here as investors. 0:20:40.680 --> 0:20:42.920 They're going to have to have a final sort of 0:20:43.600 --> 0:20:47.919 blueprint by May. That's what we're expecting May. Now, ok, 0:20:48.119 --> 0:20:49.919 right now we're March. That you'll have you'll have an 0:20:50.000 --> 0:20:52.600 understanding of what are the top priorities. It doesn't mean 0:20:52.640 --> 0:20:54.359 that they're not going to change. They can change, as 0:20:54.400 --> 0:20:56.960 we all know, right until midnight before the bill is passed, 0:20:57.480 --> 0:20:59.920 So you have we're likely to get those final priorities 0:21:00.080 --> 0:21:02.280 in May, and then the Senate is really going to 0:21:02.359 --> 0:21:05.280 have to hammer out what they want this tax bill 0:21:05.359 --> 0:21:08.440 to look like for us. When we're thinking through the cuts, 0:21:08.520 --> 0:21:11.000 the biggest risk to the economy is do they go 0:21:11.119 --> 0:21:13.520 too far, especially on the labor piece. And we're already 0:21:13.560 --> 0:21:17.160 seeing some softening with the you know, the the jobs 0:21:17.280 --> 0:21:20.600 numbers and you know with consumer data, and so how 0:21:20.680 --> 0:21:22.840 far does the federal government go? How does that impact 0:21:22.920 --> 0:21:25.240 not just federal labor, because federal labor only counts for 0:21:25.280 --> 0:21:27.760 one point nine percent of the labor force. It's how 0:21:27.840 --> 0:21:31.960 to the second derivative, the contractors, right get impact. 0:21:33.960 --> 0:21:34.680 Contractors. 0:21:35.200 --> 0:21:37.920 I'm not sure exactly that because if you're thinking about 0:21:38.320 --> 0:21:45.080 the it's not just contractors, it's also your grant recipients, nonprofits, universities, 0:21:45.160 --> 0:21:48.040 so it's a broader ecosystem. And so I don't have 0:21:48.160 --> 0:21:51.000 a direct estimate on that today, but when we're thinking 0:21:51.200 --> 0:21:54.520 through this, it's how how deep do they go? And 0:21:54.680 --> 0:21:57.880 then do they actually you know, I guess make good 0:21:57.920 --> 0:22:00.800 on the bet that then they can you know, spur 0:22:01.000 --> 0:22:03.760 growth in the second half of this Congress, meaning twenty 0:22:03.840 --> 0:22:07.000 twenty six, because Trump really has these two years to 0:22:07.080 --> 0:22:07.560 do business. 0:22:07.720 --> 0:22:10.680 But at the Northern Illinois University, you were hunkered down 0:22:10.720 --> 0:22:13.800