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Speaker 2: Terminal and the Bloomberg Business app Under Savannahs this morning,
Speaker 2: the President's nuclear red line.
Speaker 3: The only thing that matters when I'm talking about Iran.
Speaker 3: They can't have a new blue weapon. I don't think
Speaker 3: about americans financial situation, I don't think about anybody. I
Speaker 3: think about one thing. We cannot let Iran have a
Speaker 3: new blue weapon.
Speaker 4: There's all.
Speaker 2: So here's the lass this morning, President Trump issuing a
Speaker 2: warning to Iran, saying the quote clock is tick for
Speaker 2: Tehran to make a deal to build on this. Terry
Speaker 2: Haynes of Pangaea Policy, Terry, welcome back to the program.
Speaker 5: Let's set the stage.
Speaker 2: You're a Republican in a tight race facing down a
Speaker 2: midterm election. What are you thinking about the messaging coming
Speaker 2: from the president.
Speaker 6: I think the I think the quote's unfortunate, of course,
Speaker 6: but the context can be built on if I'm if
Speaker 6: I'm that person. You know. The President's ultimate point here
Speaker 6: is that kind of tightly bound around the quote in question,
Speaker 6: is that you can't have you can't let around have
Speaker 6: a nuclear weapon. Republicans are forcewhare behind the president in that,
Speaker 6: and so I think you can make that case and
Speaker 6: and and push with voters number one, number two, there's
Speaker 6: only you know a handful of races a dozen or
Speaker 6: that are that are genuinely competitive. So the vast majority
Speaker 6: of those Republicans may see this as an irritant, but
Speaker 6: not as some sort of an existential setback, and they're
Speaker 6: for their own political futures.
Speaker 4: Terry, though, are potentially at risk of making the same
Speaker 4: mistakes that Biden administration made.
Speaker 6: Oh sure, always, I think it's much less likely that
Speaker 6: they make that sort of they make those sorts of
Speaker 6: errors principally because they understand better than the Biden people
Speaker 6: did that they're going to that they're going to go
Speaker 6: need to make the economic case. Number one and it's
Speaker 6: linked to geopolitics. And number two that people by and
Speaker 6: large aren't convinced. The Biden people kind of like to
Speaker 6: concuone themselves and talk about how, you know, as other
Speaker 6: administrations did too in the past, that if only you know,
Speaker 6: people understood a little bit better, and sure they will
Speaker 6: and all the rest, and kind of relying on faith.
Speaker 6: These folks aren't going to rely on faith. I think
Speaker 6: that's a bit of a difference.
Speaker 4: Terry, how are they doing geopolitically? The Treasury secretaries at
Speaker 4: the G seven Finance ministers meeting, and he came out
Speaker 4: and he said that they call upon G seven and
Speaker 4: all their allies and the rest of the world to
Speaker 4: follow sanctioned regimes. At the same time, when the President
Speaker 4: left Beijing, he said he was going to consider lifting
Speaker 4: sanctions on Chinese firms that are buying a running crude.
Speaker 5: Which is it?
Speaker 6: You know, I'm a big believer in Emerson's consistency is
Speaker 6: the hobgoblin of little minds when it comes to politics,
Speaker 6: And in this case, I think it might be a
Speaker 6: little bit of both. Of Course, what the President's doing
Speaker 6: is carrot and stick, whereas what Besson is doing is
Speaker 6: a little bit more stick to try to get the
Speaker 6: allies to stick together.
Speaker 1: How important is it that the US clarifies it stands
Speaker 1: on Taiwan after the President said that he might think
Speaker 1: about delaying some of the sales that the US has
Speaker 1: promised to the nation the region.
Speaker 6: You know, I think I think Taiwan's right to be nervous.
Speaker 6: But I think Taiwan's right to be nervous at least
Speaker 6: since Biden pulled the United States out of Afghanistan, frankly,
Speaker 6: because that led to perceptions of a power vacuum in
Speaker 6: the Asia Pacific region that are still with US today.
Speaker 6: So I'm not blaming Biden, like I'm not what about here.
Speaker 6: I'm just saying this goes back years. This isn't a
Speaker 6: situation the president is creating. So I think Taiwan's entirely
Speaker 6: right to be nervous. At the same time, I think
Speaker 6: the president of the President's a little bit less, a
Speaker 6: little bit more ambiguous, frankly, rather than less, because you've
Speaker 6: got a situation here where there's no there's no change
Speaker 6: to the bottom line. And number one number two that
Speaker 6: what the President's doing is saying what people already knew
Speaker 6: to be true, that he's considering a particular arm sales.
Speaker 6: So we'll see where this goes. But I point out
Speaker 6: that there's a linkage here between what goes on in
Speaker 6: the straight of horn moves China's ability to tell its
Speaker 6: client state Iran, look, you better cool it and open
Speaker 6: the straight and you know exactly how things proceed, whether
Speaker 6: it be on Taiwan or trade and tech for that matter.
Speaker 1: Do per sense who within the cabinet of President Trump
Speaker 1: is the guiding light right now in all of this
Speaker 1: or is it really President Trump? I mean, does anyone
Speaker 1: have an edge and what the overall goal is or
Speaker 1: the overall strategy.
Speaker 6: Look, I looked the best at economically, I looked to
Speaker 6: Rubio as as far as the diplomacy goes. But you know,
Speaker 6: but this is very much, very much the president, you know,
Speaker 6: with those particular whispers on board and kind of helping.
Speaker 5: To guide Terry.
Speaker 4: What did we get out of the China summit? I
Speaker 4: spoke to Ambassador Career there. He said he gives China
Speaker 4: a passing grade when it comes to rare Earth's but
Speaker 4: still admitted to what I said we hear from companies,
Speaker 4: which is that China continues to drag its feet, What
Speaker 4: did the United States actually walk away with?
Speaker 6: You know, I think what they want, but I think
Speaker 6: we don't know yet. And because and that's why I
Speaker 6: say that markets need to watch the Strait really because
Speaker 6: for for trade and tech as much as for oil.
Speaker 6: China has made much in the past three to four
Speaker 6: weeks about saying that they think the Strait should be
Speaker 6: open iron it's client state. You can't put too fine
Speaker 6: a point on that. And as a result, what you
Speaker 6: end up with is a situation where either China could
Speaker 6: tell around that it needs to come to some sort
Speaker 6: of an understanding or not, and that's going to be
Speaker 6: a directional signal for the entire China United States competitive relationship,
Speaker 6: whether it be geopolitically or frankly in terms of whether
Speaker 6: the summit result is some sort of a continuation of
Speaker 6: a colder truce that's existed for more than a year,
Speaker 6: or whether we're going to get to something that's that's
Speaker 6: a little more directionally positive.
Speaker 2: Terry, you suggesting that might be an agreement here that's
Speaker 2: just not been talked about publicly yet.
Speaker 6: Oh sure, yeah, yeah, I'm suggesting saying that absolutely out loud.
Speaker 6: You know, you get a lot of people on your air,
Speaker 6: other air, you know from past administrations, kind of you know, John,
Speaker 6: I'll speak English English for a minute, kind of boffins
Speaker 6: who you know work work in trade or somewhere saying, well,
Speaker 6: you know, it's not like the old days where there
Speaker 6: used to be agreements and whatever else before the the
Speaker 6: leaders met. Well that's true, but uh, but what's happening here,
Speaker 6: I think is a world where the lack of agreements,
Speaker 6: the lack of progress over periods of years over trade deals,
Speaker 6: for example, led to the kind of difficulties geopolitically and
Speaker 6: geoeconomically that we see today. Leaders of all stripes want
Speaker 6: to speed that up. And because they've speed that up,
Speaker 6: you know, it's kind of a situation where you know,
Speaker 6: their their behavior at the summits and agreements at the
Speaker 6: summits dictate future performance in the markets rather than the
Speaker 6: other way around.
Speaker 2: Stay with us mult Bloomberg Surveillance. Coming up after this,
Speaker 2: Let's talk about Ryan Ashares rising after posting a record
Speaker 2: full year profit, the budget carrier warning of rising costs
Speaker 2: this year from guess what higher fuel prices joining us
Speaker 2: now legend of the industry, The run Boss, Michael Leary,
Speaker 2: Michael good morning and see come with you friends very well.
Speaker 5: You're a part of the industry. How would you describe yourself?
Speaker 5: Fat old fart? I think, yeah, I think it's fasting dinosaur.
Speaker 2: You've seen it, o, sat have you seen something like
Speaker 2: this before? The situation from five.
Speaker 7: Years ago the Russians invaded Ukraine twenty years ago, the
Speaker 7: second goal Forard the first golf War nine to eleven.
Speaker 5: This happens regularly within our industry.
Speaker 7: That's why in Ryan here we typically hedge eighty percent
Speaker 7: of our fuel. We're eighty percent heged out to March
Speaker 7: twenty seven, sixty seven bucks a barrow. We're in great shape,
Speaker 7: apart from the find our share prices tanked in the
Speaker 7: last two weeks because they were.
Speaker 5: Oh they're their line. Got the hell?
Speaker 7: We're just reported record full your results, two hundred eight
Speaker 7: million passengers, two point two six billion euros profit after attacks,
Speaker 7: spitting off cash to shareholders, share buybacks and with a
Speaker 7: bit of look if this continues, although you know, we
Speaker 7: can all have a debate how long we think this
Speaker 7: will continue in the Middle East over the straight's foremost,
Speaker 7: some of the flaky competitors in Europe will get taken
Speaker 7: out in carrier baskets by about September October because they're
Speaker 7: not edged on oil and they're borrowed up to the ryeballs.
Speaker 5: In net debt.
Speaker 2: Are you ready to buy?
Speaker 7: We are certainly rated by cheap aircraft. If anyone got
Speaker 7: any cheap aircraft. I'm really excited. We are about to
Speaker 7: get the first ten of our Max ten aircraft fifth
Speaker 7: verse fifteen of our Max ten aircraft from Boeing in
Speaker 7: the spring of twenty twenty seven. Twenty percent more seats
Speaker 7: per plane, burns twenty percent less oil. Like, the technological
Speaker 7: efficiency of the new engines is remarkable, and we will.
Speaker 5: Take we're ordered. We've ordered three hundred of those from Boeing.
Speaker 7: We priced them during COVID, so we've basically stolen them,
Speaker 7: and they will transform even our operating economics in Europe
Speaker 7: for the next decade.
Speaker 1: So are you interested, though, in buying a carrier in
Speaker 1: its entirety, aside from just their aircraft.
Speaker 5: There is nothing in Europe you would want to buy.
Speaker 7: It's all crap. You know, it will go bust, you
Speaker 7: know in the not too distant future. Europe is inexorably
Speaker 7: you know, moving the same direction US did twenty years
Speaker 7: ago three large connecting carriers BA loffans at Air France KLM.
Speaker 7: They are making out like bandits at the moment because
Speaker 7: all the long haul connecting traffic has switched off the
Speaker 7: golf carriers and is going on those legacy guys shorthold.
Speaker 7: Ryanair will continue to dominate the short hold space in
Speaker 7: Europe because we have much lower fares and much lower costs.
Speaker 7: We're the only really low fare, low cost carry in Europe.
Speaker 7: There's a few other low fare not so low cost
Speaker 7: carriers in Europe, but they're all good to They're all
Speaker 7: going to go the same way as spiriting from Tire
Speaker 7: in the States.
Speaker 5: That's what I wanted to ask.
Speaker 1: It seems like the model in the US is really struggling.
Speaker 5: We had Spirrigo bankrupt.
Speaker 1: There's talk of mass consolidation among some of the other
Speaker 1: low cost carriers and this idea that every consumer is
Speaker 1: expecting higher quality and that that is what's generating a
Speaker 1: lot of the revenues. How does Ryanair succeed in that environment,
Speaker 1: in that demand backdrop.
Speaker 7: I mean, the problem for the last twenty years in
Speaker 7: the States is there's really been no low cost carriers anymore.
Speaker 7: I mean, we copied out this formula originally from Southwest
Speaker 7: back in the late nineteen eighties when herb Keller her
Speaker 7: within each pomp, you know, Southwestern charging ten dollars fares.
Speaker 7: Now Southwest average fair last year one hundred and forty bucks.
Speaker 7: It's not a low fair carrier anymore. If you had
Speaker 7: a real low fair carrier here in the States, as
Speaker 7: Ryan Air is in the US, our average fair last
Speaker 7: year was forty bucks, they would still be very strong
Speaker 7: demand because the main airlines here, I mean, they've had
Speaker 7: control of the amount of supplying the market for the
Speaker 7: last twenty years, and they've been pricing up. The cost
Speaker 7: of air travel in the States is incredibly high, particularly
Speaker 7: given that you don't pay for ATC.
Speaker 5: Could you expand into the US, No, absolutely not.
Speaker 7: We're too busy expanding in Europe and then those countries
Speaker 7: around Europe.
Speaker 5: There is so much growth available to US in Europe.
Speaker 5: You look at it.
Speaker 7: Last year we grew four percent with the biggest airline
Speaker 7: in Europe, we grew four percent to two hundred eight
Speaker 7: million pastors. This year I grow another four percent two
Speaker 7: hundred and sixteen million pastors. And in the next decade
Speaker 7: with these max ten aircraft. I'm going to go to
Speaker 7: three hundred million passengers all in Europe. I mean, Europe
Speaker 7: is the best playground for low cost around that you
Speaker 7: could possibly imagine a couple of big, useless legacy airlines
Speaker 7: charging more, charging annual salaries for their long haul travel,
Speaker 7: but nobody able to do the low cost stuff. We
Speaker 7: do the low cost stuff. Well, we're cheap irish guys,
Speaker 7: you know, and so we do it well with the
Speaker 7: with a with an order for three hundred really fantastic aircraft.
Speaker 2: Used to be sig Maine back in the night, which
Speaker 2: used to be sim Maine, it was Brudesald.
Speaker 5: Remember that we were never brutal. The were cheap and less.
Speaker 5: We were cheap and mean.
Speaker 7: Now we're just cheap and cheerful new aircraft on time
Speaker 7: flights huge com Last year, our customer were record customer
Speaker 7: service metrics. Customer service satisfaction were done for eighty six
Speaker 7: to eighty nine percent. I never thought I'd see the
Speaker 7: day when I got more than fifty percent customer satisfaction,
Speaker 7: but hey, who knew?
Speaker 4: Can I ask you where are Europeans traveling to this
Speaker 4: summer for vacation?
Speaker 5: Do they want to come to America? Anymore. No, No,
Speaker 5: I mean that's not truly.
Speaker 7: Yes, they do, but the problem is that the cost
Speaker 7: of long hold travels got very expensive, so you you know,
Speaker 7: there isn't much competition across the Atlantic between the European
Speaker 7: legacies and the US majors. The Gulf carriers were the
Speaker 7: real disruptors for the last twenty years, and they have
Speaker 7: you know, their capacity has been halved in recent months,
Speaker 7: so a huge amount of Europeans who will holiday at
Speaker 7: home in Europe this year, in Portugal and Spain and
Speaker 7: Italy and Greece. A lot of Americans are still coming
Speaker 7: to Europe for the quality, for the sunshine, the culture
Speaker 7: and the alcohol, and along with they continue to travel.
Speaker 7: But I think there's a real seed change this year
Speaker 7: of people who would historically have gone to the Middle
Speaker 7: East or using the Middle East carriers to connect to
Speaker 7: long haul probably going to stay at home in Europe
Speaker 7: this summer.
Speaker 4: When we'll e're up run out of fuel jet fuel
Speaker 4: in won't.
Speaker 7: There was a real concern. I think back in April,
Speaker 7: you know, there was real worries over supply jet supply.
Speaker 7: The jet supply has now we met with all of
Speaker 7: our fueld suppliers in Paris last week. There's no issues
Speaker 7: over jet fuel supply right now through to the end
Speaker 7: of September.
Speaker 5: There's one issue in the UK.
Speaker 7: Q eight, which is the subsidiary of the state of Qaight,
Speaker 7: have about thirty percent market share some of the airports
Speaker 7: in the UK even they now are resourcing that supply.
Speaker 7: Most of Europe's Jeta one supply comes from West Africa,
Speaker 7: the America is Norway, and the lifting of Russian sanctions
Speaker 7: has also easy to supply Jet one into Eastern European countries.
Speaker 4: So you don't seem concerned with what's going on right
Speaker 4: now with the conflict in Iran.
Speaker 7: I'm very concerned about the price of oil, but I
Speaker 7: don't believe the conflict in Iran will have any disruption
Speaker 7: on European jet supplies.
Speaker 5: I do.
Speaker 7: The question for US is how long will the straightsuform
Speaker 7: moves remain closed.
Speaker 5: I mean, you know, we gave guidance this morning.
Speaker 7: If it remains closed till March twenty twenty seven, our
Speaker 7: unit because of our on head twenty percent, our unit
Speaker 7: costs might rise, you know, mid single diges this year.
Speaker 2: Nobody believes what are you gonna stand too? You can
Speaker 2: you just explain your current hedge and strategy where you've.
Speaker 5: Had that fuel.
Speaker 7: We have bought eighty percent of our jet fuel requirements
Speaker 7: John out to March twenty twenty seven at sixty seven
Speaker 7: dollars a barrow. So we're sitting you know, we're in
Speaker 7: great quite position, great position. But nobody really believes that
Speaker 7: the Straightsform moves are going to stay closed until March
Speaker 7: of next year. It's just we don't know when they're
Speaker 7: going to reopen. Iran is going to starve if they
Speaker 7: don't get it ready. The Straightsform moves reopened to the
Speaker 7: next couple of months. The midterm election season kicks off
Speaker 7: in Memorial Day at the end of May. You know,
Speaker 7: Trump is going to lose the House and the Senate
Speaker 7: if he doesn't get this result and reopened. But the
Speaker 7: timing is none of us know when the timing will be.
Speaker 7: But you know, I hope it's sooner rather than later.
Speaker 7: But if it stays, if it becomes later, say it's
Speaker 7: stay out for something happens to None of us expect
Speaker 7: the straight stay closed to September, October November. Then we
Speaker 7: are looking at our unit cost will be up about
Speaker 7: five percent. But you'll be looking at kind of airlines
Speaker 7: failing all over Europe on the way. Well, I can't
Speaker 7: really name them, but you know some of our low
Speaker 7: fare but not so low cost competitors, wiz.
Speaker 5: I don't think easy yet will fail.
Speaker 7: I mean, I don't make any money this year with him,
Speaker 7: could well be a candidate for failure. Air Baltic, which
Speaker 7: was recently built out by the Latvian government gave it
Speaker 7: a thirty million loan to get them from June through
Speaker 7: to August, but they have to repay the loan in August.
Speaker 7: I mean, good luck with the Latvians trying to get
Speaker 7: that repaid at the end of August.
Speaker 5: So I think there will be asualties.
Speaker 7: But again a lot depends on how I mean, you
Speaker 7: know more about this than how long the streets film
Speaker 7: remains remain closed. When can Trump declear a victory and
Speaker 7: you know, kick off the midterms, And I suspect it's
Speaker 7: probably going to be the end of.
Speaker 5: May, maybe early June.
Speaker 7: But but I mean, if I was any if if
Speaker 7: my prediction is really good, I wouldn't be working in
Speaker 7: the airline business. In a proper functioning business like Bloomberg,
Speaker 7: I'll get it right with star salary.
Speaker 2: I'll get it right this time. Stay with us. More
Speaker 2: Bloomberg surveillance coming up after this. Can this fat cut
Speaker 2: rights not once, not twice, but maybe three times this year?
Speaker 2: Veronica Clark of City thinks so gradual wakening in demand
Speaker 2: will lead to a rising unemployment right in the summer months.
Speaker 2: For Anica joins us now for more Veronica, good morning,
Speaker 2: good morning. Each passing day. This sounds more and more contrarian,
Speaker 2: just laying out your argument.
Speaker 8: For no, it definitely, you know, to get seventy five
Speaker 8: bays points about. To get any cuts at all, it
Speaker 8: does have to start with the labor market data, right
Speaker 8: and right now. Yeah, nothing really looks like it's breaking
Speaker 8: in the labor market. We even had a stronger jobs
Speaker 8: report last month. I would take the payroll numbers with
Speaker 8: a bit of caution. They are very volatile now, and
Speaker 8: I'm not really encouraged by what we see in the
Speaker 8: unemployment rate. We've had this big slowing and labor supply,
Speaker 8: labor force participation rate has come down, and the unemployment
Speaker 8: rate is still stuck at four point three four point
Speaker 8: four percent. That means that demand got worse, and that's
Speaker 8: ahead of the summer months when you usually hire a
Speaker 8: lot of people, when you get students entering the labor force,
Speaker 8: new graduates. And it's been the summer when we've seen
Speaker 8: the unemployment rate rise the last couple of years. Is
Speaker 8: the reason that is cut in September. For the last
Speaker 8: two years, it's when we see the summer data.
Speaker 2: You've got unemployment coming up, then yeah, why have you
Speaker 2: got inflation?
Speaker 5: It needs to look better?
Speaker 1: Right?
Speaker 8: So the inflation focused right now, it's still uncomfortable. Right,
Speaker 8: So even the May data I think will look uncomfortably strong.
Speaker 8: But I think if we see monthly inflation readings for June, July,
Speaker 8: August data that we'll have before that September meeting, if
Speaker 8: those monthly reports look better, annual inflation will still be high.
Speaker 8: But you do need inflation, at least on a monthly
Speaker 8: basis slowing for the Fed to be comfortable.
Speaker 1: Cutting What would you have to say to change your view.
Speaker 8: Stickier inflation for longer? Not seeing the seasonality in the
Speaker 8: labor market data. Really within the next couple weeks, that
Speaker 8: seasonality starts to first play out in initial jobless claims.
Speaker 8: Once you get around the start of the summer Memorial
Speaker 8: Day holiday mid May. Certainly by June you do see
Speaker 8: claims starting to trend higher. So that's the first thing
Speaker 8: I'm watching for. If that doesn't happen within the next
Speaker 8: month or two, then okay, maybe the labor market has
Speaker 8: durably gotten better.
Speaker 1: Isn't there a bit of a stress on this entire
Speaker 1: equation because it might not be as hinged to the
Speaker 1: labor market as it has been in the past, That
Speaker 1: inflation could be stickier even without the participation of the
Speaker 1: labor economity, just based on all the spending coming from hyperscalers.
Speaker 8: Yeah, I mean, I'm certainly worried about that AI related inflation.
Speaker 8: That actually does get a big part, a big weight
Speaker 8: in core pcees and with computer software really components. So yeah,
Speaker 8: we are getting inflation there. But you know, the demand driven,
Speaker 8: tight labor market kind of inflation the FED would be
Speaker 8: most reactive to. That's what we really don't see. And
Speaker 8: I do wonder if having the dual mandate kind of
Speaker 8: forces them into caring about that kind of inflation.
Speaker 5: Even last week we.
Speaker 8: Got an update for the Atlanta Fed wage tracker that's
Speaker 8: like the monthly proxy for an ECI Fed's preferred wage measure,
Speaker 8: it's very low. Again, it fell a lot, so you
Speaker 8: definitely don't see that labor market tightness kind of inflation.
Speaker 1: Do you think that this Fed is going to have
Speaker 1: to tacitly accept three percent inflation in order to continue
Speaker 1: on the path that you see?
Speaker 8: Yeah, I mean on an annual basis, core pc is
Speaker 8: going to look more like three for most of this year,
Speaker 8: right I think the most officials will be really cautious
Speaker 8: on that for now. But it was interesting to hear,
Speaker 8: you know, new incoming Chair Warsh talk about other measures
Speaker 8: of inflation. Right the trimmed mean PCE, even CPI is
Speaker 8: running softer than core PCE right now, maybe they can,
Speaker 8: you know, adjust a little bit in what they're they're
Speaker 8: caring about.
Speaker 4: The President thinks, potentially you need to wait until there's
Speaker 4: the proper figures look at them after the war is over,
Speaker 4: almost signaling that he will give Kevin Morrismith Moore a
Speaker 4: breathing space. So when would these three cuts actually happen.
Speaker 8: Yeah, well, it would happen later in the year after
Speaker 8: if we see if we see the weaker labor market data.
Speaker 8: But yeah, for right now, I don't expect that he
Speaker 8: can be particularly duvish going into that June meeting, especially
Speaker 8: if markets perceive that we're not taking inflation seriously, then
Speaker 8: it's you know, we get yeld higher.
Speaker 4: John has brought up a lot that this is the
Speaker 4: man who said in his Senate hearing inflation is a choice.
Speaker 4: So how hawkish do you think verbally he's going to be?
Speaker 5: Yeah, I don't know.
Speaker 8: It's really tricky, and you know, he's definitely been more
Speaker 8: hawkish when it comes to things like the balance sheet
Speaker 8: and trying to offset that with sounding more.
Speaker 5: Dubvish on policy rates.
Speaker 8: But it is really hard to know what his views
Speaker 8: are going to be coming and he is more traditionally hawkish.
Speaker 8: You know, is there going to be you know, one
Speaker 8: to eighty? I don't.
Speaker 5: I don't think so we'll have.
Speaker 8: To see it.
Speaker 2: Initially, inflation is a choice, sanded hawkish, and then in
Speaker 2: the actual hearing it's started to sound increasingly davish because
Speaker 2: you get to choose your index.
Speaker 8: Yeah, exactly, Yeah, Yeah, we don't really know where this
Speaker 8: is going to go. Yeah, we have not heard the.
Speaker 2: Op dicks aren't great, are they? They've missed their target
Speaker 2: for five years and they're talking about changing their preferred index.
Speaker 5: I don't think they will.
Speaker 2: Time is not good.
Speaker 8: Yeah, I don't think other FED officials are going to
Speaker 8: be comfortable with that, But I mean it is an
Speaker 8: interesting signal that you know, what you were supposed to
Speaker 8: care about is the strongest of the core inflation measurer.
Speaker 2: I was reading some research from BMP POWAPA, and they've
Speaker 2: got a different view on things for the power Ahead.
Speaker 2: Everyone's entitled to their own forecast, of course, they think
Speaker 2: on the hike, and the way you discuss the potential
Speaker 2: for one is to start reflecting on the insurance cuts
Speaker 2: you took a year ago and the year before and
Speaker 2: emphasize that they were just insurance cuts and talk about
Speaker 2: taking them back. Yeah, what would you think of that
Speaker 2: kind of move?
Speaker 8: I mean, the market's already done that a little bit, right,
Speaker 8: And I think most FED officials will still see that
Speaker 8: rates are on the restrictive.
Speaker 5: Side of a neutral range.
Speaker 8: So if you do start to see any wobbles in
Speaker 8: the labor market, then suddenly you don't need roots even
Speaker 8: more restrictive, of course, right, And I would kind of
Speaker 8: agree with that restrictive assessment just because of what we
Speaker 8: see in all the wage growth, slowing home prices that
Speaker 8: are pretty weak.
Speaker 3: Yeah.
Speaker 2: How mess is the SEP going to be next month?
Speaker 8: I yeah, pretty much. Maybe at some point we even
Speaker 8: get some changes to it, right. You know, worsh was
Speaker 8: talking about scaling back some communications potentially. Maybe that's an
Speaker 8: easy out right, you just say very little In June.
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