Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane along
Speaker 1: with Jonathan Farwell and Lisa Brownwitz Jay Lee. We bring
Speaker 1: you insight from the best and economics, finance, investment, and
Speaker 1: international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg
Speaker 1: dot Com, and of course, on the Bloomberg Terminal. Kathy
Speaker 1: boss gen Stake joins us now head US financial market
Speaker 1: economist at Oxford Economics. Kathy, You've had a few minutes
Speaker 1: to go over this one. Your reaction place. Yeah, John, Well,
Speaker 1: it did come in a touch higher than expect it
Speaker 1: and does it change things materially? I think it just
Speaker 1: keeps um pressure on the Federal Reserve UM. This is
Speaker 1: a very difficult spot for them where seeing if play
Speaker 1: should run far above you know, what they expected in
Speaker 1: the target UM. And yes, there's some signs that maybe
Speaker 1: we'll get easy in the head line number right going
Speaker 1: forward in energy prices, but still the core number, when
Speaker 1: I'm looking at a half a percent almost five percent
Speaker 1: year and year before that is is definitely gonna keep
Speaker 1: the heat on the FED. How much can it rise
Speaker 1: and how much do you need it to fall for
Speaker 1: the Fed to feel like things are under control. Well,
Speaker 1: our view is that, um, it's going to continue to
Speaker 1: stay hot and sticky through the first quarter. UM, and
Speaker 1: you're not going to really get some reprieve until you
Speaker 1: know the second quarter. But even then it's going to
Speaker 1: remain elevated. UM. I think if you see moderation, if
Speaker 1: you do see the year and year rate, let's say,
Speaker 1: gap down a full percentage point or so, it looks
Speaker 1: that way into two, then the Fed can take a
Speaker 1: little comfort there and maybe wait a bit. But it's
Speaker 1: certainly gonna be difficult because we're seeing more and more
Speaker 1: the FED members becoming a bit more worried right about
Speaker 1: inflation and less so about the labor market. What do
Speaker 1: you think is appropriate then? If it does remain hot
Speaker 1: and sticky, as you've been saying through the first quarter,
Speaker 1: what's appropriate in terms of Fed action, Well, we think
Speaker 1: they should be patient. It's gonna be difficult, but we
Speaker 1: do think they're gonna be need to be patient because
Speaker 1: the mix of things you're seeing growth likely to decelerate
Speaker 1: now fourth quarter nearly eight percent, so very hot economy
Speaker 1: as well, but we think it's gonna slow in Q one,
Speaker 1: and don't forget that we have this upsurge in COVID
Speaker 1: which is going to hurt the economy. Um, and we
Speaker 1: have to see how that affects inflation. But if we're
Speaker 1: right and inflation comes down, should give the Fed a
Speaker 1: little bit of patients. But we still see them you know,
Speaker 1: raising rates. You know, later than September this year, are
Speaker 1: we going to start seeing more material wage inflation to
Speaker 1: keep up with the actual inflation that we're seeing. Well,
Speaker 1: that that is the critical point to focus on. Frankly, Um,
Speaker 1: if you start to see wages rise because workers say,
Speaker 1: we're paying a lot more for items of goods and
Speaker 1: services and we need higher wages. And if companies accommodate that,
Speaker 1: then we get into that par ice wage spiral that
Speaker 1: we've you know, watching and everyone's um concerned about. But
Speaker 1: right now we're not quite at that point. Um. We
Speaker 1: have to wait and see. Unfortunately, see the data, um
Speaker 1: indications are right now for us is that the labor
Speaker 1: force participation rates rising. Right, people are being pulled back
Speaker 1: into the labor force. If supply comes on, that helps
Speaker 1: temper some of the wage games. Well, And a lot
Speaker 1: of the reason when I've spoken to other economists that
Speaker 1: I say, how can consumption still be hanging in there
Speaker 1: when consumers are being faced with this kind of inflation,
Speaker 1: when you're not getting the commensurate wage increases. Is that
Speaker 1: there is a ton of savings that have been built
Speaker 1: up over the course of the pandemic. Those are starting
Speaker 1: to be drawn down. Now. Is there a risk that
Speaker 1: the inflation persists beyond where those savings are going to
Speaker 1: last and we start to see a serious hit to consumption?
Speaker 1: That's right, um, you know, and and most of the
Speaker 1: the you know, over two trillion of savings is really
Speaker 1: excused Tom, high income household. So, um, we're gonna wear
Speaker 1: down the bill, the propensity for consumers to suspend, and
Speaker 1: that should be you know, helped put the brakes on inflation, absolutely, Kathy,
Speaker 1: just quickly, then let's round this one out. Are you
Speaker 1: confident this morning, confident enough to say that this is
Speaker 1: as high as it gets, This is as bad as
Speaker 1: it gets. We think it gets a little worse. Unfortunately,
Speaker 1: the year and year rate, we don't really see that peaking,
Speaker 1: especially the core until maybe February, so we've had a
Speaker 1: little bit more upward thrust there and especially on the
Speaker 1: service side. Right, and again I look at the numbers
Speaker 1: core commodities, core goods nine point four percent year and
Speaker 1: year Core services though, are three point four that's also
Speaker 1: putting up with pressure. Kathy, just wonderful, Kathy Bostick that
Speaker 1: of Oxford Economics, after getting the fastest reading the CPI print.
Speaker 1: Going back to two and we've been talking all morning
Speaker 1: with people who are saying inflation is a scary thing.
Speaker 1: It is a scary thing for asset valuations. It is
Speaker 1: a scary thing for the Federal Reserve, it is a
Speaker 1: scary thing for politicians hoping to get reelected. And Stephen
Speaker 1: Dover has a message for that, maybe it's a good thing.
Speaker 1: He is Franklin Templeton Chief market strategist and head of
Speaker 1: Franklin Templeton Investment Institute. Please explain, Steven, how we can
Speaker 1: take a look at this consumer consumer price increase and
Speaker 1: really see what equities are seeing, which is brighter skies. Well,
Speaker 1: when we look at it, I'm not really arguing that
Speaker 1: inflation is a good thing. I'm arguing that inflation is
Speaker 1: a signal um and that inflation is a plural, and
Speaker 1: that there's a lot of different ways we can look
Speaker 1: at inflation. So what can we learn from these inflation numbers,
Speaker 1: and how does that help us when we're making our
Speaker 1: investment decisions, And this inflation is very is going We
Speaker 1: are in an economy right now that is being reshaped,
Speaker 1: and we're not going to go back to where we
Speaker 1: were in two thousand and nineteen. It's going to look
Speaker 1: different as we go forward. And part of the signaling
Speaker 1: that's going to change our economy and help us reconfigure
Speaker 1: it going forward are these inflation numbers. So what's coming
Speaker 1: out of these inflation numbers is that we clearly need
Speaker 1: more workers, we need to increase our productivity, that we're
Speaker 1: having a shift in where our economy is hot or not.
Speaker 1: If we look under the hood on these numbers, we'll
Speaker 1: see that inflation is much higher, for example, in the
Speaker 1: Midwest in places where people are moving um as they
Speaker 1: work from home. As as our economy changes, um that
Speaker 1: we're going to need more capex, which looks like it's
Speaker 1: going to happen to increase productivity, companies are going to
Speaker 1: have to look If we're looking at increases in labor
Speaker 1: costs going forward, which we almost certainly are, companies are
Speaker 1: going to have to look at ways to increase productivity.
Speaker 1: Cap X is likely to increase. So all that thaying
Speaker 1: that UM, yes, UM, we've had a miss in terms
Speaker 1: of inflation has been higher than it is. But let's
Speaker 1: look at it from what it signals a perspective and
Speaker 1: where we have opportunities. And so, like you said, if
Speaker 1: you know companies are going to face labor cost rushers,
Speaker 1: they certainly already have. You know, if they're going to
Speaker 1: need to increase cap X, how do you translate that
Speaker 1: into a portfolio? I mean, does that lend itself to
Speaker 1: large caps or how do you view that? You have
Speaker 1: to look at companies that are able to transition their
Speaker 1: pricing through UM ultimately to the customer and so keep
Speaker 1: their profit margins up. I think that we're in a
Speaker 1: very interesting place for the equities market right now in
Speaker 1: that UM companies seem to be able to pass through
Speaker 1: their prices because interest rates, despite this inflation number, haven't risen.
Speaker 1: So it's a little bit of a goldilocks UM place
Speaker 1: for stocks right now. We have earnings growth that earnings
Speaker 1: growth in other inflationary periods, and we look back, you
Speaker 1: know where inflation was this high before forty years ago,
Speaker 1: rates were also very high, and that offset UM that
Speaker 1: offset the earnings because companies had to pay higher rates,
Speaker 1: but that's not happening right now. Have low rates, they're
Speaker 1: not they're not hurt even by a modestly rising bond market.
Speaker 1: So that's generally positive for equities, particularly those equities that
Speaker 1: are going to the opening train, the stocks that are
Speaker 1: going to do better as the economy starts to open up. So, Stephen,
Speaker 1: we've talked a lot about equities and how they probably
Speaker 1: are going to continue to perform. Well, what does this
Speaker 1: mean for the sixty forty shift, given that we do
Speaker 1: expect growth to lead to a hiking FED and possibly
Speaker 1: a longer term positive look, Well, I think we have
Speaker 1: to really look at that sixty split. So right now
Speaker 1: our view would be probably to be overweight equities, which
Speaker 1: we've been for for a period of time now UM
Speaker 1: and underweight fixed income, but not moving away from fixed income.
Speaker 1: I think on that of fixed income, you want to
Speaker 1: probably focus on yield or the yield advantage spread products
Speaker 1: if you will. Within that area, you might want to
Speaker 1: look at corporate debt, particularly focusing on sectors that could
Speaker 1: be upgraded or arguing that there is going to continue
Speaker 1: to be growth and so UM, you can get fairly
Speaker 1: significant growth with upgrades. To look at bank loans, emerging
Speaker 1: markets look um, look like there's some good opportunities there,
Speaker 1: and we're also positive on some municipal again looking for upgrades.
Speaker 1: My point being, you can invest in fixed income that
Speaker 1: isn't quite so dependent on changes within interest rates, don't
Speaker 1: just focus on duration. And then also we're more positive
Speaker 1: on alternative investments, particularly private credit, which has had amazing growth,
Speaker 1: has a good yield advantage, and real estate, particularly private
Speaker 1: real estate. A lot of opportunities right now in the
Speaker 1: industrial space, as as we have to have warehouses and
Speaker 1: that type of thing for electronic or online shopping um,
Speaker 1: and we have a gargantuan underweight or or we have
Speaker 1: organs to in shortage in housing right now, we need
Speaker 1: in the United States about one million units a year
Speaker 1: and it's going to take a while to catch up
Speaker 1: with that. Not only that, there's a terrible dislocation as
Speaker 1: people move away from the big urban centers and to
Speaker 1: other places as they work from home. So a lot
Speaker 1: of opportunities there as well. Stephen, does dees crypto count
Speaker 1: as an alternative asset or not yet? I think that
Speaker 1: it's it's very interesting that I think the mainline UM
Speaker 1: investment managers investment allocators haven't got to the point where
Speaker 1: they put that in as a crypto asset. But clearly
Speaker 1: it doesn't have UM the same correlation to other assets,
Speaker 1: and that by definition does yes make it an alternative asset.
Speaker 1: How far do you have to stretch how much out
Speaker 1: of your comfort zone in order to get returns that
Speaker 1: people are looking for to survive after they retire, Well,
Speaker 1: we want to be careful with that. UM. We want
Speaker 1: to be careful to not be in a crowded trade,
Speaker 1: meaning when everybody starts to go in a direction, even
Speaker 1: if they're right, it gets overpriced. And that's where I
Speaker 1: would be cautious about the rush to to investor protect
Speaker 1: for inflation. UM. The University of Michigan outlook for inflation
Speaker 1: still is over the next twelve months about five In
Speaker 1: the next five to ten years, three percent. That seems reasonable.
Speaker 1: That seems like what UM what the reserve banks have
Speaker 1: been trying to do for a very long period of time.
Speaker 1: So I don't I think that, especially those who are
Speaker 1: towards a retirement age, need to be quite careful about
Speaker 1: going out too far with risk. I think they need
Speaker 1: to look at their portfolios and really balance at risk.
Speaker 1: That's why um and not not go too far into
Speaker 1: the inflation camp or not go too far away from
Speaker 1: the inflation tent um. So kind of a modest portfolio
Speaker 1: rather than stretching too much. And Steven, I'd love to
Speaker 1: get your thoughts on junk bonds because the Bloomberg Terminal
Speaker 1: had a great story out this week exciting data from
Speaker 1: Fitch Ratings. Just ten US high yield issuers have defaulted
Speaker 1: this year on a total of about six point nine
Speaker 1: billion dollars worth of debt, and there was also a
Speaker 1: one hundred and three day stretch with zero defaults, which
Speaker 1: is an all time long stretch, which is pretty amazing curious.
Speaker 1: You know, when you're examining the fixed income landscape and
Speaker 1: thinking about risk, where do high yield US bonds fall?
Speaker 1: So we definitely look at high yield, but also bonds
Speaker 1: and aren't high yield you are? That was a great
Speaker 1: article and yes, default rates are way down. What a
Speaker 1: little bit more focused on where there might be upgrades
Speaker 1: because if you see an upgrade, you can have a
Speaker 1: significant increase in valuation. The other point I would just
Speaker 1: make about high yield is that you need to look
Speaker 1: at your entire portfolio because high yield is much more
Speaker 1: correlated with the equity markets, certainly than sovereign debt or treasuries,
Speaker 1: and so you want to make sure that you're aware
Speaker 1: of what risks you have in your portfolio. So if
Speaker 1: your overweight equity and overweight high yield, you know you
Speaker 1: have a lot of equity risk in your portfolio, which
Speaker 1: if that's what you want, fine, but you need to
Speaker 1: be aware of it. Stephen Dover, thank you so much
Speaker 1: for being with us. I really appreciate your insights. Stephen Dover,
Speaker 1: Franklin Templeton, Chief market strategist and head of the Franklin
Speaker 1: Templetood Investment Institute. We have been looking at a market
Speaker 1: that very much has priced in six point eight percent
Speaker 1: consumer inflation. Annie Pecos, professor and virologist at the Johns
Speaker 1: Hopkins Bloomberg School of Public Health, and he don't worry.
Speaker 1: I'm not going to ask you a question on this
Speaker 1: this pandemic. I want to talk about this a macron variant,
Speaker 1: and I think this is a really important conversation in
Speaker 1: if it turns out to be much much Milda, but
Speaker 1: far more contagious how do we treat that from a
Speaker 1: policy perspective, from your standpoints set, how do we make
Speaker 1: that change? It all comes down to hospitalization rates and
Speaker 1: severease disease rates. UM. There's preliminary data now suggesting that
Speaker 1: a boost will probably give you a really good immune
Speaker 1: response that protects against a macron. And therefore, if that
Speaker 1: holds true, then the current strategy of getting people boosted
Speaker 1: UH should be able to limit our severe disease cases
Speaker 1: and allow us to keep going without any major changes
Speaker 1: in what's go in our public health intervention policies. But
Speaker 1: you know, we're far away from that because we're certainly
Speaker 1: dealing right now with a delta surge that's really approaching
Speaker 1: UH peak levels that we've ever seen here in the US,
Speaker 1: and so we're really in a bit of a pickle
Speaker 1: here in terms of trying to figure out how to
Speaker 1: deal with the current delta as well as prepare for
Speaker 1: a potential OH macron. There are a lot of issues
Speaker 1: embedded in there. I want to tease out one idea
Speaker 1: of quarantining if you're exposed, because that's been highly disruptive,
Speaker 1: especially for kids who've gone back to school or people
Speaker 1: going to the workplace. And this is one big, a
Speaker 1: big reason why people are worried about bringing people back
Speaker 1: to the offices. How transmissible is somebody who has been
Speaker 1: inoculated three times, who let's say gets a breakthrough infection
Speaker 1: or even twice, Are they as infectious as an unvaccinated individual.
Speaker 1: Data suggests that you still will be more likely to
Speaker 1: not transmit the virus. There are certainly some cases out
Speaker 1: in the literature right now where if someone who's been
Speaker 1: vaccinated gets a strong infection and has a lot of virus,
Speaker 1: they can transmit. But in the for the for most people,
Speaker 1: vaccination will reduce the transmission of the of both delta
Speaker 1: and we assume now for O. Macron um um to
Speaker 1: other individuals. So vaccination still is the route to sort
Speaker 1: of turn the curve here. I think the thing we
Speaker 1: really have to think about right now, particul when it
Speaker 1: comes to a macron is we've seen data that's mostly
Speaker 1: focused on vaccinated people and individuals who are relatively healthy.
Speaker 1: We haven't seen cases of all macron in vulnerable populations,
Speaker 1: the elderly, IMMUNO compromise, people on on cancer therapies. It's
Speaker 1: what O macron does in those populations that don't have
Speaker 1: the protection induced by the vaccine, that it's going to
Speaker 1: be really important to to judge because if those vulnerable
Speaker 1: parts of the population are even more sensitive to severe
Speaker 1: disease with a macron, then we really have to rethink
Speaker 1: some of our public health approaches. But Andy from a
Speaker 1: public health perspective, just going back to vaccinated individuals, if
Speaker 1: they are not that contagious, they don't spread the virus,
Speaker 1: why are they being tested five, six, seven times to
Speaker 1: travel in any way, shape or form. Why is there
Speaker 1: still the surveillance and possible quarantining of them if they
Speaker 1: get exposed and if they get a breakthrough infection. It
Speaker 1: goes down to the layered approach to limit transmission and
Speaker 1: limits spread of the virus. So we never want to
Speaker 1: rely on one thing, and oftentimes the testing combined with
Speaker 1: vaccination status is used as at least two ways to
Speaker 1: make sure that we're catching nine plus percent of people
Speaker 1: who are potentially infectious. And so that's really the point
Speaker 1: here when it comes to that strategy. I will say though,
Speaker 1: that there are better strategies to do the testing rather
Speaker 1: than our our nasal swab PCRs um an EAGINE testing
Speaker 1: at home testing. These are things that we in the
Speaker 1: US in particular haven't taken advantage of that could make
Speaker 1: this whole process of testing and being certain that you
Speaker 1: can go back to work, back to traveling much more easier. Well. Obviously,
Speaker 1: in the US we do have the advantage that we
Speaker 1: can get access to that testing if we if we
Speaker 1: try hard enough. We also have ample access to vaccinations
Speaker 1: and booster shots, whereas a lot of the world doesn't
Speaker 1: even have a large portion of their population given their
Speaker 1: initial doses yet and the who is saying, hold the
Speaker 1: conversation on boosters, we need to focus on getting more
Speaker 1: of the world vaccinated before we have that conversation. Do
Speaker 1: you think we're misaligning our priorities. It's important to note
Speaker 1: that a global pandemic requires a global response, and certainly
Speaker 1: getting more vaccine to other countries has to be a
Speaker 1: high priority. I realized that there are always interests in
Speaker 1: terms of protecting our own population to the to the
Speaker 1: greatest degree possible. But at the end of the day,
Speaker 1: O Macron is showing us yet again what we can
Speaker 1: expect from stars Covie too. If we don't get even
Speaker 1: better at vaccinating the world, the doses that have been
Speaker 1: given so far to Africa are a great first step,
Speaker 1: but if you think about the population of Africa and
Speaker 1: the doses that have been promised, we're still nowhere close
Speaker 1: to being able to move on that one continent to
Speaker 1: a level of protection in the population that would help
Speaker 1: us really reduce the amount of variants that are emerging.
Speaker 1: And the thank you sir as always into other weekend
Speaker 1: re pecost of Jones, Helpkins jointing us on d c
Speaker 1: andy block ahead of US government offense at Investko. And
Speaker 1: you said it would be the nightmare before Christmas. We
Speaker 1: all want to avoid that. Are we avoiding that? And
Speaker 1: date John, I think we're under the path to do
Speaker 1: that a month ago. If you talk to me, I
Speaker 1: would just say it wasn't gonna be the nightmareber for Christmas.
Speaker 1: You had to get government funding done, you had to
Speaker 1: increase the debt limit, you had to get the bipartisan
Speaker 1: infrastructure bill, and then still at the same time trying
Speaker 1: to get the Build Back Better bill. Well, we've gotten
Speaker 1: by partisan infrastructure bill that's in place. We've agreed to
Speaker 1: fund the government at least till next February, and now
Speaker 1: we've got a deal on the debt limit, which is
Speaker 1: probably the most important things with respect to the markets. So, um,
Speaker 1: we're in a good path and now we're gonna see
Speaker 1: when and how we're gonna get build back better done.
Speaker 1: If we don't get built back better by the end
Speaker 1: of the year, will we ever get it done? Absolutely,
Speaker 1: I think there's a big chance. I mean right now
Speaker 1: we're like a chance we it had done this year. Um,
Speaker 1: but we're probably seventy chance it gets done. I think
Speaker 1: there's a there's a good sense that Democrats want to
Speaker 1: come together and get that done. It's just no matter
Speaker 1: what it looks like right now. And the question is
Speaker 1: when will progressives understand that Center Mansion is only going
Speaker 1: to go so far and cut the deal. That's what
Speaker 1: this is about at this time. Right now, we're going
Speaker 1: through the bird bath this week on the technical things
Speaker 1: to see which of these provisions can survive that, whether
Speaker 1: it's immigration, per crictive prescription drug pricing, or the ev
Speaker 1: tax credit. And then from there we have to go
Speaker 1: into the substance of things that Center Mansion has an
Speaker 1: issue with, including pay family leave, some of the climate
Speaker 1: related issues, and also the extension of the Enhanced Child
Speaker 1: Tax Credit. The reason why I ask Andy is because
Speaker 1: it seems like the more we talk about inflation and
Speaker 1: where we get pushed back to further stimulus as being
Speaker 1: an inflationary at a time and we don't need that.
Speaker 1: In fact, we need some curbs to what we're seeing
Speaker 1: in terms of how much prices are rising. How does
Speaker 1: that color the conversation in terms of policy going forward
Speaker 1: at a time when we hear increasingly protectionist rhetorics the
Speaker 1: likes of Janet Yellen and Gena Raimundo. No, I look,
Speaker 1: I think you're onto something right there. So first, with
Speaker 1: respect to inflation, you can expect Center Mansion to um
Speaker 1: capitalize on the announcement today which we expect the high
Speaker 1: inflation number to say, hey, let's slow down. He's been
Speaker 1: saying that for some time, so that's gonna interject itself
Speaker 1: into the build back better debate. But also with respect
Speaker 1: to what you're talking about about the protectionist angle with trade,
Speaker 1: I think, yes, this is this is an issue that's
Speaker 1: out there. Well, let's talk more about inflation, because we've
Speaker 1: seen the President at least try to be seen attempting
Speaker 1: to do something about it, tapping the Strategic Petroleum Reserve,
Speaker 1: trying to do something about supply chains and and fixing
Speaker 1: ship ship shortage issues. None of that has really helped
Speaker 1: to this point, at least American. The American populace doesn't
Speaker 1: feel that yet. Is Biden's approval reading going to continue
Speaker 1: to be tied to price pressures? So, Kelly, I think
Speaker 1: you're on something really important here. Um. When we look
Speaker 1: at lation, we think from a political standpoint, and we
Speaker 1: look at it from a market standford. From a market standpoint,
Speaker 1: we're looking at the fundamentals. We're looking at housing crisis, wages,
Speaker 1: those things that are sticky going for long term. But
Speaker 1: politically it's really and you've talked about this on the program.
Speaker 1: Already gets gas and groceries, that's what people feel UM
Speaker 1: in their pocketbooks. Now. The good thing for Biden is
Speaker 1: that recently, UM, some of the gas prices have started
Speaker 1: to tip down. He's going to try to take credit
Speaker 1: for it with the Strategic Control Reserve. That's gonna be
Speaker 1: a temporary hit if if anything. But really about the
Speaker 1: new UM, it's about omicron and fears on that and
Speaker 1: also some of the productions increased. So it's a lot
Speaker 1: of these things when we're talking about inflation. Unfortunately, out
Speaker 1: of the presence control, but he has to make it
Speaker 1: look like he's working on and he's doing and he's
Speaker 1: doing everything he can and um, but ultimately we understand
Speaker 1: that the economy is so large and and the macro
Speaker 1: moves are so big that the federal government really can't
Speaker 1: drive that. And what you might get the current strategy
Speaker 1: this people saying you know what we feel this, it
Speaker 1: doesn't feel good to me. And then you've got the
Speaker 1: administration saying, but it is good. Not tell you what
Speaker 1: it's good, A base, A d A and people what
Speaker 1: you might give. Just that tension between how people feel
Speaker 1: and how the administration is turning around and saying, now,
Speaker 1: this is how you should feel because actually it's really good.
Speaker 1: And it's the media who's not covering the data properly.
Speaker 1: So that's the that's the we ultimate disconnect that we
Speaker 1: found in politics is that you you have the numbers,
Speaker 1: you have the economists saying hey, on a macro level,
Speaker 1: GDPs up this or that, but really it's about what
Speaker 1: people feel every day and so um as there's an
Speaker 1: old saying, UM, I think my angels said. People don't. Um,
Speaker 1: they don't. They won't remember what you said. They won't't
Speaker 1: even remember what you did, but they remember how you
Speaker 1: made them feel. And so whether that's and how you
Speaker 1: speak to people or what's actually people are feeling each day,
Speaker 1: that's what's gonna drive the decision making, that's gonna drive
Speaker 1: their mood, and it's gonna drive the calls. The biggest
Speaker 1: challenge at the moment for this administration, without a doubt. Andy,
Speaker 1: Thank you, sir, at least domestically, Andy Blocker Investco. This
Speaker 1: is the Bloomberg Surveillance Podcast. Thanks for listening. Join us
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Speaker 1: Tom keene In. This is Bloomberg