WEBVTT - Bloomberg Surveillance TV: September 29th, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordernt. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.880 Terminal and the Bloomberg Business app. 0:00:36.479 --> 0:00:37.320 Let's stick with tech. 0:00:37.560 --> 0:00:41.440 McKinsey estimating that data centers will require six point seven 0:00:41.520 --> 0:00:44.760 trillion dollars to meet demand for computing power globally by 0:00:44.800 --> 0:00:47.400 twenty thirty. Private credit firms are allaying the groundwork to 0:00:47.400 --> 0:00:50.159 help provide the capital. Meta is said to have selected 0:00:50.200 --> 0:00:53.040 Pimco to help lead a twenty nine billion dollar financing 0:00:53.280 --> 0:00:56.000 for its data center expansion. I'm happy to say the 0:00:56.000 --> 0:00:58.200 Pimco CEO, Manay Roman, joins us now for more. 0:00:58.200 --> 0:01:00.520 Mannic, good morning, Good morning, Johnathan, to see you. 0:01:00.600 --> 0:01:02.480 It's good to see you, sir. How does a man 0:01:02.600 --> 0:01:04.480 like you deal with a three am alarm? Clock on 0:01:04.520 --> 0:01:06.600 the West coast. How does that work? You've got I make. 0:01:06.760 --> 0:01:09.760 I make the best expresso known to mankind, you know, 0:01:09.800 --> 0:01:12.560 and you'll be hyppy triple espresso, triple expresso, and it 0:01:12.600 --> 0:01:14.840 feels good every day and happy to be at work. 0:01:14.920 --> 0:01:16.479 Well, I'm happy to have you with us this morning. 0:01:16.560 --> 0:01:18.280 Let's get into some of these deals. I know, the 0:01:18.319 --> 0:01:20.440 certain deals you can talk about can't talk about. Want 0:01:20.440 --> 0:01:22.760 to talk in broad terms about the appetite here for 0:01:22.840 --> 0:01:25.639 the capital that we need to provide to this particular force, 0:01:25.680 --> 0:01:28.920 this growing force AI data centers. Where it's going to 0:01:28.959 --> 0:01:31.200 come from and where you and a team are going 0:01:31.240 --> 0:01:31.680 to fit in. 0:01:32.000 --> 0:01:34.200 So I think it's I mean it's it's a huge 0:01:34.240 --> 0:01:38.160 super secular opportunity. There is an enormous need for funding 0:01:38.200 --> 0:01:42.839 and equity in data center we I don't know whether 0:01:42.840 --> 0:01:46.560 the six point seven trillion dollars from McKinsey is remotely right, 0:01:47.080 --> 0:01:50.040 but it's very, very big, and there'll be plenty of 0:01:50.120 --> 0:01:53.080 financing deals to be done, and there'll be plenty of 0:01:53.120 --> 0:01:55.920 construction to be done. And it's true in the US, 0:01:55.920 --> 0:01:57.000 but it's true in other. 0:01:56.840 --> 0:01:57.480 Part of the world. 0:01:57.720 --> 0:02:02.360 And the need also to have the infrastructure and the 0:02:02.440 --> 0:02:04.560 energy will come after that. So you know, we all 0:02:04.560 --> 0:02:06.920 talk about data center, but there's going to be a 0:02:06.960 --> 0:02:10.280 real rush for energy in terms of providing the right 0:02:10.320 --> 0:02:13.560 set up for this data center. And you know, that's 0:02:13.560 --> 0:02:16.000 one of the reason to be very bullish on natural gas. 0:02:16.160 --> 0:02:19.079 We've reflected on one particular statement from one particular tax 0:02:19.120 --> 0:02:21.480 CEO over the last twelve months that I think was 0:02:21.639 --> 0:02:22.480 really quite important. 0:02:22.480 --> 0:02:23.239 It was last summer. 0:02:23.440 --> 0:02:26.280 It was the Alphabet CEO when essentially he said that 0:02:26.320 --> 0:02:29.760 the greatest risk here was under investing and not overinvesting. 0:02:29.840 --> 0:02:31.480 And I wonder how you think about that from the 0:02:31.480 --> 0:02:33.800 perspective as an asset manager. When you've got a group 0:02:33.800 --> 0:02:36.560 of companies that are willing to run the risk of overinvesting, 0:02:36.960 --> 0:02:38.600 how do you think about the risk around. 0:02:38.280 --> 0:02:41.359 It in terms of I think what we will do 0:02:41.800 --> 0:02:43.800 is we will look at every single deal and we 0:02:43.840 --> 0:02:45.799 will say this makes sense for us, and this may 0:02:45.840 --> 0:02:48.400 make less sense, and I think I think we I 0:02:48.440 --> 0:02:50.600 think one of the one of the strength we have 0:02:50.800 --> 0:02:54.920 is to be to be pretty pretty focused on relative 0:02:55.000 --> 0:02:58.640 value and sort of think that you know, there may 0:02:58.680 --> 0:03:00.480 be a fantastic deal to be done which would be 0:03:00.600 --> 0:03:03.040 very very good for our investors and then we look 0:03:03.040 --> 0:03:05.200 at the next one in the full light of day 0:03:05.240 --> 0:03:07.240 and decide whether it fits our portfolio and whether this 0:03:07.320 --> 0:03:08.200 is something we want to do. 0:03:08.320 --> 0:03:10.359 I think it's important to build on this that Mark 0:03:10.440 --> 0:03:13.800 Rowan said recently. We are what we originate. When it 0:03:13.800 --> 0:03:16.040 comes to private markets, you are what you originate. It's 0:03:16.120 --> 0:03:18.000 quite labor intensive. It takes a lot of work when 0:03:18.040 --> 0:03:21.080 you think about scaling this and building this is an opportunity, 0:03:21.320 --> 0:03:22.919 How difficult is it in practice? 0:03:24.160 --> 0:03:27.200 I think we have built it differently from ourk We 0:03:27.240 --> 0:03:30.440 have built it based on or experiencing fixed income or 0:03:30.480 --> 0:03:33.240 experiencing relative value. In a history of fifty four years 0:03:33.280 --> 0:03:36.040 in looking at all sorts of credit, we have fifty 0:03:36.040 --> 0:03:38.640 five credit analysts who looks at every single segment of 0:03:38.640 --> 0:03:41.120 the market. And I think we look at it from 0:03:41.160 --> 0:03:43.280 a value standpoint. Does it make sense? Is it's something 0:03:43.280 --> 0:03:45.320 we want to do. We shouldn't be originating for the 0:03:45.360 --> 0:03:48.120 sake of originating. And there's a lot of money. There's 0:03:48.160 --> 0:03:50.080 a lot of money coming to this market. You know, 0:03:50.200 --> 0:03:52.640 some sectors would be very attractive and some will be 0:03:52.720 --> 0:03:55.440 less so. And I think you want to be very 0:03:55.520 --> 0:03:57.200 much on top of this and say I want to 0:03:57.200 --> 0:03:58.520 do this, and I want to do less of this. 0:03:58.960 --> 0:04:02.760 There's a concern actually, as CEO say it's more important 0:04:02.760 --> 0:04:05.600 to be throwing enough money at this rather than being 0:04:05.680 --> 0:04:08.240 under invested. And then you have people like David Heinhorn 0:04:08.360 --> 0:04:10.280 of Green Light coming out and saying the numbers that 0:04:10.320 --> 0:04:13.000 are being thrown around are so extreme that it's really 0:04:13.200 --> 0:04:16.960 really hard to understand them. How difficult is it to 0:04:17.080 --> 0:04:20.440 invest in a market where people are throwing spaghetti at 0:04:20.440 --> 0:04:22.799 the wall to try to understand what's going to stick. 0:04:23.360 --> 0:04:26.800 And there is a feeling of excess that continues to 0:04:26.800 --> 0:04:27.640 bubble up around that. 0:04:27.760 --> 0:04:32.479 So my friend, my friend, Richard Thayler, who is an 0:04:32.520 --> 0:04:36.120 economic number price and consult for US, has this say. 0:04:36.120 --> 0:04:38.120 He says, you know, when you make long term product prediction, 0:04:38.640 --> 0:04:41.200 the degree of humidity and the standard deviation around the 0:04:41.279 --> 0:04:43.920 estimate should be very, very big. So when I hear 0:04:43.960 --> 0:04:46.240 an estimate like six months seven trillion dollars, I don't 0:04:46.240 --> 0:04:48.040 know what to make of it. David may be very 0:04:48.040 --> 0:04:50.400 well be right, but we'll take it one step at 0:04:50.400 --> 0:04:53.440 the time. I think six months horizon is about all 0:04:53.640 --> 0:04:55.440 we can do in terms of the demand. And then 0:04:55.680 --> 0:04:57.920 you know, the environment may change dramatically you know, they 0:04:57.920 --> 0:05:00.960 are business cycles. Sometimes things are cheap, they expensive. If 0:05:00.960 --> 0:05:03.520 there's a recession, all of a sudden spreads world widen 0:05:03.640 --> 0:05:06.600 company may revisit what they're trying to do, and so 0:05:06.680 --> 0:05:08.480 on and so forth. So this is a difficulty. 0:05:08.640 --> 0:05:10.360 How do you have a six month horizon when a 0:05:10.400 --> 0:05:13.120 lot of these investments are ten year buildouts, when there 0:05:13.120 --> 0:05:16.720 are ten year usage, when they are labor intensive and 0:05:17.040 --> 0:05:20.320 infrastructure projects by nature are a lot longer than six months. 0:05:20.520 --> 0:05:23.520 So in terms of committing capital and in terms of 0:05:23.560 --> 0:05:25.480 finding the right opportunity with the right length of time, 0:05:25.520 --> 0:05:28.120 we totally find to have a very long term horizon. 0:05:28.320 --> 0:05:31.080 What I'm saying is I'm saying making long term prediction 0:05:31.200 --> 0:05:32.880 in terms of how big the market will be, it's 0:05:33.000 --> 0:05:35.640 very hard. I think you have some visibility over the 0:05:35.680 --> 0:05:37.560 next six months in terms of what the demand is, 0:05:37.760 --> 0:05:40.560 what the real demand is, and whether that slows down 0:05:40.600 --> 0:05:43.440 or whether that accelerate. You just don't know. And I 0:05:43.839 --> 0:05:45.520 think you've got to have I think you have to 0:05:45.560 --> 0:05:47.280 be very humble about the six and just say, look, 0:05:47.320 --> 0:05:48.800 we will take it one step at the time and 0:05:48.839 --> 0:05:51.159 see what the market gives us. And by the way, 0:05:51.200 --> 0:05:54.120 there may be other opportunity which are more attractive. You know, 0:05:54.360 --> 0:05:57.679 you look, for example, in an asset backed finance business 0:05:57.960 --> 0:06:02.000 aircraft leasing. Aircraft leasing is incredibly interesting and then nothing 0:06:02.040 --> 0:06:04.679 happens for five years, and then it becomes very interesting again. 0:06:05.000 --> 0:06:08.359 And you got to constantly set to yourself, are there 0:06:08.480 --> 0:06:12.560 better opportunity for me to deploy money? And what do 0:06:12.600 --> 0:06:14.720 I want to do? How do I think about the risk? 0:06:15.000 --> 0:06:18.000 How will I get out what's the right risk return profile? 0:06:19.320 --> 0:06:21.680 You may have headline recently wanted to ask you about it. 0:06:21.760 --> 0:06:24.360 Private markets haven't been tested? Can you build that out 0:06:24.360 --> 0:06:25.600 a little bit more? What did you mean when you 0:06:25.680 --> 0:06:27.880 said that the private markets haven't been tested? 0:06:28.240 --> 0:06:33.480 Well, my partner Dana versin and or cio of coursemit 0:06:33.520 --> 0:06:35.400 I have the chart and we will check the number 0:06:35.400 --> 0:06:37.480 of about twenty times because we kind of didn't believe it. 0:06:37.680 --> 0:06:41.800 But it shows the return on week single B which 0:06:42.120 --> 0:06:48.200 is a reasonably good proxy for direct lending. And what 0:06:48.279 --> 0:06:53.120 you see is you make money because the yield is higher, 0:06:54.080 --> 0:06:58.800 and then there's a recession and then you lose it all. 0:06:58.880 --> 0:07:02.040 And so I'm old enough to to remember nineteen ninety one, 0:07:02.040 --> 0:07:04.440 I saw that, you know, there's a recession which came 0:07:04.480 --> 0:07:08.240 out of nowhere from you know, essentially SNL having too 0:07:08.279 --> 0:07:11.840 much high YELD nineteen ninety seven. The world is absolutely 0:07:11.920 --> 0:07:13.880 fine until there's an Asian crisis, and then you have 0:07:13.920 --> 0:07:16.120 ailit to CEM. Then things become very cheap. And so 0:07:16.160 --> 0:07:19.240 you've got to remember these things. And we have been 0:07:19.280 --> 0:07:22.640 in a period since two thousand and nine of exceptionalism 0:07:22.720 --> 0:07:25.600 where you have had very strong equity return and very 0:07:25.640 --> 0:07:28.160 strong higher return. If you believe this is going to 0:07:28.600 --> 0:07:31.520 this is going to continue for the next fifteen years, 0:07:31.760 --> 0:07:33.560 then I think you should have the same position. But 0:07:33.600 --> 0:07:35.040 it may not be the case. And I think I 0:07:35.040 --> 0:07:37.160 think we bring that and say the data's a the data. 0:07:37.320 --> 0:07:40.000 Do you see parallels between now and those periods. 0:07:40.480 --> 0:07:43.360 Well, I think the initial condition where we are right 0:07:43.440 --> 0:07:47.200 now as search that equity markets are expensive by any measure. 0:07:47.240 --> 0:07:50.080 They may go higher because momentum is strong and credit 0:07:50.120 --> 0:07:52.160 market are tight in some part of the of the 0:07:52.360 --> 0:07:54.960 of the spectrum. And I think that's that's the reality. 0:07:55.160 --> 0:07:58.040 And look, we've been in period where things things are 0:07:58.040 --> 0:08:00.200 expensive for a long time two thousand and five, two 0:08:00.200 --> 0:08:03.480 thousand and six, where such period where things remain expensive 0:08:03.480 --> 0:08:06.280 and become more expensive, and then something breaks and then 0:08:07.120 --> 0:08:10.520 all of a sudden you have you have a lot 0:08:10.520 --> 0:08:11.760 of work to be done manage. 0:08:11.800 --> 0:08:14.600 Let's continue the conversation. We were having equity markets very 0:08:14.600 --> 0:08:17.440 close to all time highs, credit spreads near multi decade 0:08:17.480 --> 0:08:19.720 ties on investment, great high ye spreads near the ties 0:08:19.760 --> 0:08:22.040 of the year, and yet we've got a FED official 0:08:22.080 --> 0:08:25.680 sign that we're excessively restrictive year across a. 0:08:25.760 --> 0:08:26.600 Range of funds. 0:08:26.720 --> 0:08:28.920 You look across markets all the time and the economy 0:08:28.920 --> 0:08:30.520 with the team, do you see any signs that are 0:08:30.520 --> 0:08:31.640 excessively restrictive? 0:08:31.800 --> 0:08:34.120 Well, I think rates are very high across across the 0:08:34.200 --> 0:08:35.880 globe right and I think I think you know, part 0:08:35.920 --> 0:08:37.599 of the reason why I get up so early and 0:08:37.920 --> 0:08:39.880 happy to go to work is because you know, the 0:08:39.920 --> 0:08:42.120 opportunity has never been better. And you know, we talk 0:08:42.160 --> 0:08:44.199 here about the US, but look at the UK UK 0:08:44.520 --> 0:08:46.320 where you're from is you know, ten year rates are 0:08:46.320 --> 0:08:49.560 four and three quarter. Australia looks really, really attractive. So 0:08:49.600 --> 0:08:51.920 when we think about the opportunity in a way, yes, 0:08:51.960 --> 0:08:54.360 we do expect the FED to cut. How much they're 0:08:54.360 --> 0:08:56.400 going to cut next year, we meant to be to 0:08:56.480 --> 0:08:58.559 be proven. No one knows what's going to happen to 0:08:58.600 --> 0:09:01.800 the labor market. But the reality is the opportunity in 0:09:01.880 --> 0:09:04.000 terms of global fixed income is very, very big, and 0:09:04.000 --> 0:09:08.439 the opportunity to add alpha is quite high. I'll tell 0:09:08.440 --> 0:09:10.200 you a funny story. We have a pontner in Tokyo 0:09:11.400 --> 0:09:13.800 called Tomoya Messano, and you know, for the longest time, 0:09:13.840 --> 0:09:15.760 there's not much happening in Tokyo. So you sort of 0:09:15.800 --> 0:09:17.440 call him and you have much out with him, and 0:09:17.760 --> 0:09:19.440 not much is happening, and then all of a sudden, 0:09:19.440 --> 0:09:23.120 the Japanese fixed income market becomes super exciting, and then 0:09:23.120 --> 0:09:25.360 there's a lot to do, and there's a whole generation 0:09:25.440 --> 0:09:27.600 of people who have disappear because they don't do it anymore. 0:09:28.080 --> 0:09:30.280 And so you have a lib market which hasn't supply 0:09:30.880 --> 0:09:32.960 fixed income investor because there was nothing to do for 0:09:33.000 --> 0:09:36.280 the longest time. And so what I think is interesting 0:09:36.400 --> 0:09:39.640 is the difference of you, the difference of opinion, is 0:09:39.960 --> 0:09:42.800 also a source of incredible alpha. And you know, if 0:09:42.800 --> 0:09:45.199 you want to think about white performance has been quite good, 0:09:45.200 --> 0:09:47.440 it's partially because the alpha that has been given by 0:09:47.440 --> 0:09:48.400 the market is quite good. 0:09:48.559 --> 0:09:50.320 I think it's interesting that John was talking about the 0:09:50.320 --> 0:09:52.560 FED and you talk about the international sphere, and I 0:09:52.600 --> 0:09:56.640 think that that's really telling about what people are looking 0:09:56.679 --> 0:10:00.920 to for that alpha, for that incremental extra year. Are 0:10:00.920 --> 0:10:03.560 those Japanese investors staying in Japan right now and not 0:10:03.600 --> 0:10:05.640 coming to the US for treasures even if the FED 0:10:05.679 --> 0:10:06.200 cuts No. 0:10:06.320 --> 0:10:09.319 I think they're very big investors in US asset. And remember, 0:10:09.920 --> 0:10:12.760 one of the opportunity everyone has is to buy foreign 0:10:12.800 --> 0:10:15.040 assets and swap them back into dollars or swap them 0:10:15.080 --> 0:10:16.600 back into yen and so on and so forth, and 0:10:16.640 --> 0:10:20.520 so you can actually buy synthetic credit. You can buy 0:10:20.520 --> 0:10:26.000 synthetic dollar exposure by for US investors buying, for example, 0:10:26.080 --> 0:10:30.360 JGB and setting forward the yen into dollars and having 0:10:30.840 --> 0:10:33.280 a different credit risk with JGB than you have with 0:10:33.400 --> 0:10:35.200 US dollar. And so there's a lot to do. 0:10:35.520 --> 0:10:35.760 Now. 0:10:36.080 --> 0:10:38.040 We do that a lot in short term and longer 0:10:38.120 --> 0:10:40.320 term in terms of adding alpha, But all the time, 0:10:40.400 --> 0:10:42.440 you can do this sort of transaction and sort of 0:10:43.400 --> 0:10:46.199 mitigate your exposure or increase your exposure, or have different 0:10:46.280 --> 0:10:48.400 risk profile. That's a much smarter way of looking at it. 0:10:48.480 --> 0:10:50.520 I'm looking at this sort of a blood instrument. So 0:10:50.679 --> 0:10:52.920 dumb do you like international more than the United ct 0:10:54.000 --> 0:10:55.840 That's really a wonderful nuance. 0:10:56.160 --> 0:10:58.240 It has an enormous amount of money to put to work, 0:10:58.280 --> 0:11:02.040 and has is a nation of savers, and so there's 0:11:02.080 --> 0:11:05.680 a you know the reason. The thing that I always 0:11:05.679 --> 0:11:08.400 say is you need to put your money somewhere, and 0:11:08.520 --> 0:11:10.680 the reality is the US is the only place where 0:11:10.720 --> 0:11:14.600 you can actually put scale and when you want a thing. 0:11:14.679 --> 0:11:17.760 For example, of the Australian problem, there was a whole 0:11:17.800 --> 0:11:21.720 delegation last week from the UN from Australia. They need 0:11:21.760 --> 0:11:24.080 to move capital all the way from Australia because they 0:11:24.120 --> 0:11:26.440 are a nation of savers and the Australian market is 0:11:26.440 --> 0:11:27.920 not big enough for them, and so they need to 0:11:27.920 --> 0:11:28.360 pivot too. 0:11:28.480 --> 0:11:30.120 For a long time, Japan had to do the same thing. 0:11:30.240 --> 0:11:32.559 They didn't have to yield. To your point, the stories change. 0:11:32.640 --> 0:11:35.239 One thing we're trying to track is whether the Japanese 0:11:35.360 --> 0:11:38.280 bring the money home, Whether we see this great repatriation 0:11:38.720 --> 0:11:41.280 where it could leave markets vulnerable, what typically they deploy 0:11:41.360 --> 0:11:43.680 that capital, and thinking of certain European markets the US 0:11:43.679 --> 0:11:46.480 as well. You seeing any of that flow story start 0:11:46.520 --> 0:11:48.960 to turn, No, not so far. Would you expect it 0:11:48.960 --> 0:11:51.400 to change, honestly. 0:11:51.040 --> 0:11:54.439 Not really. These things are very very slow to move 0:11:55.160 --> 0:11:58.760 and The reality is people keep on saving in Japan, 0:11:58.920 --> 0:12:01.280 and so it made you speed that the marginal dollar 0:12:01.360 --> 0:12:05.000 goes into JGB. But the credit markets are very underdeveloped, 0:12:05.280 --> 0:12:07.720 and if you want to buy, for example, cigole exposure, 0:12:08.480 --> 0:12:10.160 you much better off going to the US. 0:12:10.360 --> 0:12:13.240 The conversation we had back in April was maybe the 0:12:13.280 --> 0:12:16.280 decline of US exceptionalism. The money was going to leave, 0:12:16.360 --> 0:12:19.120 it was going to go outsewhere. I want to understand 0:12:19.120 --> 0:12:21.719 where you are now six months later. What did you 0:12:21.760 --> 0:12:24.199 see at the time in April? Did we start to 0:12:24.200 --> 0:12:27.880 see that decay click into US exceptionalism? And I went 0:12:27.920 --> 0:12:29.400 back to where we were at the start of the 0:12:29.480 --> 0:12:31.119 year just six months later. 0:12:31.040 --> 0:12:35.000 So I think we were dollar underweighted. We literally just 0:12:35.040 --> 0:12:38.760 square our for position. We're still very much like emerging 0:12:38.840 --> 0:12:43.160 market currency. We do like Australian dollars. There's plenty to do. 0:12:43.360 --> 0:12:46.319 But you know there was there was a short dollar 0:12:46.360 --> 0:12:50.200 position to be had, and you know it moved ten percent, 0:12:50.200 --> 0:12:51.840 and I think we decided to square our position. 0:12:52.320 --> 0:12:55.680 You're talking a lot about rates and the era of income. 0:12:55.800 --> 0:12:56.480 We've been talking a. 0:12:56.480 --> 0:12:58.040 Lot about that, just based in the fact that yield 0:12:58.080 --> 0:13:01.040 has been higher, talking about private investiness through infrastructure. You're 0:13:01.040 --> 0:13:03.280 not mentioning equities, and this is a time where people 0:13:03.320 --> 0:13:05.840 are trying to fixed. I'm a fixing companion, no, I know, 0:13:06.200 --> 0:13:08.800 and you have sympathy with us, But I'm wondering how 0:13:08.880 --> 0:13:13.200 much a higher rate regime limits future equity returns. 0:13:13.200 --> 0:13:14.400 We used to talk about that. 0:13:14.400 --> 0:13:17.240 That was before our three years consecutive twenty plus percent returns. 0:13:17.280 --> 0:13:18.920 I mean, at what point. 0:13:18.600 --> 0:13:22.160 Will constrain the equity side of the portfolio. Even though 0:13:22.200 --> 0:13:24.839 some people are wondering what kind of buffer. 0:13:24.840 --> 0:13:25.920 Bonds really provide? 0:13:26.000 --> 0:13:28.240 Well, the Pinker view is that equity return in the 0:13:28.320 --> 0:13:29.920 US is going to be six percent for the next 0:13:29.920 --> 0:13:32.440 three years or something like this. I mean, we you know, 0:13:32.480 --> 0:13:36.160 we look at cape valuation. You know it's treading at 0:13:36.200 --> 0:13:39.480 twenty eight times earnings. It looks really, really high to us. 0:13:39.559 --> 0:13:43.920 We understand the excitement about the hyperscalo, but if you 0:13:43.960 --> 0:13:48.560 look outside of the hyperscalo, life in industrial America isn't great. 0:13:48.600 --> 0:13:51.760 I mean, top line is not is not growing. And 0:13:52.040 --> 0:13:55.000 one of the question that we don't know is the 0:13:55.000 --> 0:13:58.440 impact of tariff and what will happen in corporate America 0:13:58.640 --> 0:14:02.280 in terms of how they're going to deal with either 0:14:02.720 --> 0:14:06.160 passing on prices or diminishing margin and so on and 0:14:06.200 --> 0:14:08.520 so forth, and we don't know that, and so there's 0:14:08.559 --> 0:14:11.040 a whole leg of the of the of the equation 0:14:11.120 --> 0:14:12.080 that we haven't really seen. 0:14:12.200 --> 0:14:14.880 Stock investors have been trying to outpull each other this morning, 0:14:15.000 --> 0:14:18.040 and Max Katner was on earlier of HSBC and he 0:14:18.200 --> 0:14:20.920 was saying, look, he thinks that the FED is making 0:14:20.920 --> 0:14:24.120 a policy error by cutting more significantly, but they're along 0:14:24.160 --> 0:14:26.400 for the ride because it's just going to inflate the 0:14:26.400 --> 0:14:28.280 prices of assets significantly. 0:14:28.400 --> 0:14:29.520 They want to gain from that. 0:14:29.800 --> 0:14:34.200 Do you agree with that assessment? Well, I haven't. I 0:14:34.240 --> 0:14:38.400 haven't listened. I haven't listened to him, so I would not. 0:14:38.440 --> 0:14:40.520 Be good initial punt. 0:14:42.040 --> 0:14:44.360 I don't. I don't, I don't know. I have. We 0:14:44.720 --> 0:14:47.000 have a lot of trust in in the FED in 0:14:47.080 --> 0:14:50.720 terms of them doing the right thing, and I think 0:14:50.760 --> 0:14:53.680 that the FED usually doesn't know much more than we 0:14:53.720 --> 0:14:56.320 all do. They look at the same data, and so 0:14:56.560 --> 0:14:59.720 the decision is a very well thought out decision where 0:14:59.720 --> 0:15:03.080 they will decide what to do with the condition that 0:15:03.080 --> 0:15:06.160 they are being given. And if, for example, we were 0:15:06.240 --> 0:15:09.040 to see a very bad inflation print, it would be 0:15:09.120 --> 0:15:12.200 very difficult for them to cut Now. They may argue 0:15:12.240 --> 0:15:14.920 that they have to look through inflation and so and 0:15:14.920 --> 0:15:18.120 so forth, But the FED is a very rational actor 0:15:18.160 --> 0:15:19.880 in the market and I don't think anything is going 0:15:19.920 --> 0:15:23.400 to change. And the same goes for the Central Bank 0:15:23.440 --> 0:15:25.840 in the UK and the ECB and so and so forth. 0:15:25.880 --> 0:15:27.640 And I think I think once you're in a job, 0:15:28.200 --> 0:15:31.360 you behavior changes also in terms of how you think 0:15:31.360 --> 0:15:32.920 about what the right thing. 0:15:32.840 --> 0:15:35.520 To do is you are lindening to the new FET 0:15:35.640 --> 0:15:36.400 chair next to. 0:15:36.280 --> 0:15:41.200 No, I'm just saying, it's like being a Supreme Court justice. 0:15:41.240 --> 0:15:43.120 You know, it's a very important job and I think 0:15:43.120 --> 0:15:44.560 people take their job very seriously. 0:15:45.040 --> 0:15:45.880 It's a good change. 0:15:46.000 --> 0:15:48.080 Next year there's going to be a new FEED chair. 0:15:48.160 --> 0:15:50.360 Do you expect to be to see any daylight between 0:15:50.440 --> 0:15:53.080 a FED chair selected by appointed by this White House 0:15:53.120 --> 0:15:56.080 and Chairman J Powell and this current leadership. 0:15:56.720 --> 0:15:57.000 Do you know? 0:15:57.160 --> 0:16:00.000 I was reflecting on this and what we're talking about is, 0:16:00.080 --> 0:16:03.640 I mean, every single fair share has been to some 0:16:03.800 --> 0:16:08.440 degree of political appointee. And you know, there's been a 0:16:08.480 --> 0:16:13.320 history of very good FED chair since the Burns and 0:16:13.400 --> 0:16:16.920 the Nixon presidency, and I see no reason why that would. 0:16:16.800 --> 0:16:18.920 Change the list of candidates we've seen so far. We've 0:16:18.920 --> 0:16:22.080 said repeatedly, very credible names on that list from this 0:16:22.120 --> 0:16:24.280 White House on a treasury and it is, it is. 0:16:24.160 --> 0:16:24.520 It is. 0:16:24.600 --> 0:16:28.600 It is important to remember that it's in everyone's incentive 0:16:28.680 --> 0:16:31.920 to have a very credible feed share, because the market 0:16:31.960 --> 0:16:34.600 will not like a non credible feat share. 0:16:36.080 --> 0:16:39.560 Stay with us more Bloomberg surveillance coming up after this 0:16:48.320 --> 0:16:51.160 to congressional leaders on both sides. We'll be meeting with 0:16:51.240 --> 0:16:53.280 President Donald Trump at the White House that discussed a 0:16:53.320 --> 0:16:55.960 short term spending bill in an effort to avoid a 0:16:56.040 --> 0:16:58.520 government shutdown. With the latest and with a special guest 0:16:58.520 --> 0:17:02.440 that Marie joins us now for more. Hamary, Hey, hey. 0:17:02.320 --> 0:17:03.120 John, good morning. 0:17:03.160 --> 0:17:06.000 We are looking like we are headed towards a government shutdown, 0:17:06.000 --> 0:17:08.320 even though the President United States will be sitting down 0:17:08.600 --> 0:17:11.800 in a bybartisan fashion with the top leaders from the 0:17:11.840 --> 0:17:14.240 House and the Senate. An individual who has been part 0:17:14.280 --> 0:17:16.520 of these conversations in the past, because we have been 0:17:16.520 --> 0:17:20.159 here before, is Patrick McHenry, former chair of the House 0:17:20.200 --> 0:17:23.880 Financial Services Committee chairman, former chairman. Thank you so much 0:17:23.880 --> 0:17:26.160 for joining us this morning, just going into this meeting 0:17:26.240 --> 0:17:29.080 this afternoon at the White House. Do you think there 0:17:29.160 --> 0:17:31.919 is a chance of a breakthrough and this Congress can 0:17:31.960 --> 0:17:32.800 avoid a shutdown. 0:17:33.960 --> 0:17:35.919 No, I don't have high hopes for this. 0:17:36.240 --> 0:17:40.680 I think it's unrealistic to think that the incentives will 0:17:40.760 --> 0:17:43.960 change by simply sitting down with the President Trump. The 0:17:44.000 --> 0:17:47.080 incentive here right now is for congressional Democrats to find 0:17:47.080 --> 0:17:50.280 a way to fight. That is purely this is a 0:17:50.320 --> 0:17:53.440 mechanism for them to say that we are relevant. They're 0:17:53.520 --> 0:17:56.399 only relevant because they have the fill of us from 0:17:56.480 --> 0:18:00.280 the Senate and Republicans do not have a veto sorry 0:18:00.320 --> 0:18:02.359 philibus reproof majority in the Senate. 0:18:03.320 --> 0:18:05.360 The Continent Resolution, which. 0:18:05.200 --> 0:18:07.000 Is merely to keep the lights on in government for 0:18:07.000 --> 0:18:10.840 the next six weeks past the House now sits in 0:18:10.880 --> 0:18:14.040 the Senate and the minority party in the Senate, the 0:18:14.119 --> 0:18:17.399 Democrats have to say on whether or not the bill 0:18:17.440 --> 0:18:19.440 could be brought up, and they have blocked it last week. 0:18:19.560 --> 0:18:22.040 They are likely to block it this week. They need 0:18:22.080 --> 0:18:24.359 to show their base that they're fighting and this is 0:18:24.680 --> 0:18:25.760 their way of doing it. 0:18:27.359 --> 0:18:30.080 Can this have any pushback when it comes to the 0:18:30.119 --> 0:18:33.280 midterms on Republicans given recent polling shows that when it 0:18:33.280 --> 0:18:35.639