1 00:00:02,480 --> 00:00:07,000 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,720 --> 00:00:09,559 Speaker 2: I'm pleased to say that joining us now following the 3 00:00:09,640 --> 00:00:13,600 Speaker 2: jobs report is the National Economic Council Director Kevin Hasset. Kevin, 4 00:00:13,600 --> 00:00:15,120 Speaker 2: you're a good man. Thanks for making time for us 5 00:00:15,160 --> 00:00:17,400 Speaker 2: this morning. It's an obvious down side surprise on the 6 00:00:17,480 --> 00:00:20,000 Speaker 2: job's report. The three month AVERHICH has dropped to six k. 7 00:00:20,360 --> 00:00:22,639 Speaker 2: I think some people looking at this report at the 8 00:00:22,640 --> 00:00:25,560 Speaker 2: headline level might be a bit nervous about what's inside it. 9 00:00:25,720 --> 00:00:27,960 Speaker 2: Are of some one off's here that make this look 10 00:00:28,120 --> 00:00:29,280 Speaker 2: worse than maybe it is. 11 00:00:30,080 --> 00:00:32,640 Speaker 1: Yeah, there are a few. The first of all, we 12 00:00:32,720 --> 00:00:35,559 Speaker 1: had the crazy weather in February. The worst of it 13 00:00:35,600 --> 00:00:37,839 Speaker 1: was actually outside of the survey week, but there was 14 00:00:37,880 --> 00:00:40,960 Speaker 1: a lot of lingering junk, as you might recall, with 15 00:00:41,040 --> 00:00:43,879 Speaker 1: the ice that was everywhere. We had some strikes on 16 00:00:43,880 --> 00:00:46,080 Speaker 1: the West coast that knocked off between thirty and forty 17 00:00:46,120 --> 00:00:48,600 Speaker 1: thousand jobs. And so I think that on net it's 18 00:00:48,680 --> 00:00:52,199 Speaker 1: almost like a wash number. And the final thing is 19 00:00:52,240 --> 00:00:56,040 Speaker 1: that there's a new procedure birth death model at the BLS, 20 00:00:56,480 --> 00:00:59,120 Speaker 1: which we believe is going to make the number more volatile. 21 00:00:59,520 --> 00:01:01,160 Speaker 1: So I think more and more we're going to have 22 00:01:01,240 --> 00:01:03,880 Speaker 1: to average through the months. And remember we had a 23 00:01:03,880 --> 00:01:07,800 Speaker 1: really surprisingly positive number last month, and I think if 24 00:01:07,840 --> 00:01:11,000 Speaker 1: you average the two then it's about at the rate 25 00:01:11,040 --> 00:01:13,479 Speaker 1: of job growth. It's consistent with the three or four 26 00:01:13,520 --> 00:01:14,839 Speaker 1: percent GDP growth, Kevin. 27 00:01:14,840 --> 00:01:17,440 Speaker 2: It comes against the grain as well. IM data earlier 28 00:01:17,480 --> 00:01:20,000 Speaker 2: this week was really pretty decent. Claims were stable too. 29 00:01:20,280 --> 00:01:22,480 Speaker 2: Next time we speak next month, do you expect to 30 00:01:22,480 --> 00:01:24,759 Speaker 2: have a better story to tell? 31 00:01:24,920 --> 00:01:26,840 Speaker 3: Yeah, yeah, I think that right now. 32 00:01:27,560 --> 00:01:33,240 Speaker 1: What's going to happen right is that the variability in 33 00:01:33,560 --> 00:01:36,320 Speaker 1: the data will be apparent to folks. And so what's 34 00:01:36,360 --> 00:01:38,080 Speaker 1: going to happen, I think is that there'll be some 35 00:01:38,200 --> 00:01:41,160 Speaker 1: anxiety that another number like this, or two or three 36 00:01:41,240 --> 00:01:44,200 Speaker 1: numbers like this is ahead for us. But we really 37 00:01:44,240 --> 00:01:46,880 Speaker 1: don't believe that because, as you and I have discussed, 38 00:01:46,920 --> 00:01:50,200 Speaker 1: like every other indicator is consistent with very strong GDP 39 00:01:50,320 --> 00:01:53,160 Speaker 1: growth right now, and so this really is an outlier number. 40 00:01:53,360 --> 00:01:55,680 Speaker 2: Tax refunds are a big part of the ballcase for 41 00:01:55,760 --> 00:01:58,440 Speaker 2: the US economy. I've got the bloomberg lighting up in 42 00:01:58,440 --> 00:02:01,560 Speaker 2: front of me right now with energy prices surging, how 43 00:02:01,600 --> 00:02:04,320 Speaker 2: those refunds are going to be spent is key, Kevin. 44 00:02:04,360 --> 00:02:06,120 Speaker 3: With energy bill is still climate. 45 00:02:06,480 --> 00:02:09,120 Speaker 2: What's your assessment of the disruption we're seeing to supply 46 00:02:09,720 --> 00:02:10,440 Speaker 2: in the Middle East. 47 00:02:11,360 --> 00:02:13,360 Speaker 1: Well, our expectation is that we've got our eyes on 48 00:02:13,400 --> 00:02:17,480 Speaker 1: the horizon that we know that sometime soon we're going 49 00:02:17,520 --> 00:02:20,560 Speaker 1: to have a much more stable Venezuela with high stable 50 00:02:20,800 --> 00:02:23,760 Speaker 1: energy output, a much more stable Iran with high end 51 00:02:23,760 --> 00:02:26,320 Speaker 1: stable energy output, which is going to be very good 52 00:02:26,440 --> 00:02:29,600 Speaker 1: not only for energy markets, but for risk premia around 53 00:02:29,639 --> 00:02:33,440 Speaker 1: the world. Don't forget that this move against Iran is 54 00:02:33,480 --> 00:02:36,760 Speaker 1: happening because they've promised to destroy us all like, if 55 00:02:36,800 --> 00:02:38,880 Speaker 1: that's not something that affects risk premia, I don't know 56 00:02:38,919 --> 00:02:41,200 Speaker 1: what is. And so I think with an eyon horizon, 57 00:02:41,600 --> 00:02:44,000 Speaker 1: then you can see that this is a huge positive 58 00:02:44,080 --> 00:02:47,360 Speaker 1: for global the global economy and global markets. The question is, 59 00:02:47,880 --> 00:02:51,160 Speaker 1: you know, when will the current near term disruption end, 60 00:02:51,520 --> 00:02:53,880 Speaker 1: And that's something that will be decided by the military 61 00:02:54,520 --> 00:02:57,119 Speaker 1: and they'll, of course, we'll be some uncertainty about when 62 00:02:57,160 --> 00:03:00,000 Speaker 1: they decide to move in part because the uncertainty protects 63 00:03:00,080 --> 00:03:03,160 Speaker 1: the lives of American soldiers. Kevin the mean, But we 64 00:03:03,200 --> 00:03:06,079 Speaker 1: expect that it'll be resolved, you know, quite soon. 65 00:03:06,280 --> 00:03:08,239 Speaker 2: As you see we're starting to see a hit to 66 00:03:08,280 --> 00:03:12,160 Speaker 2: production because we can't move the oil. We're breaching storage 67 00:03:12,160 --> 00:03:14,680 Speaker 2: capacity and select producers right now. You saw some of 68 00:03:14,680 --> 00:03:16,960 Speaker 2: that with a rock early this week, the Journal reporting 69 00:03:17,000 --> 00:03:19,240 Speaker 2: moments ago. We're seeing the same thing in Qait and 70 00:03:19,360 --> 00:03:23,200 Speaker 2: UAE and Saudi Arabia, my follow that's obviously a bigger, 71 00:03:23,320 --> 00:03:25,920 Speaker 2: more acute issue for the ancient refiners right now, which 72 00:03:25,960 --> 00:03:28,360 Speaker 2: is why the Treasury Secretary came out and issued a 73 00:03:28,400 --> 00:03:31,799 Speaker 2: waiver for the Indians to buy from Russia. The Russian 74 00:03:31,840 --> 00:03:35,120 Speaker 2: crew that's offshore in tankers right now. But Kevin, I 75 00:03:35,160 --> 00:03:37,000 Speaker 2: wonder what else the White House has gone in store, 76 00:03:37,640 --> 00:03:39,400 Speaker 2: Not just to tell people to wait because in the 77 00:03:39,400 --> 00:03:41,440 Speaker 2: future will be better, but what are the remedies that 78 00:03:41,480 --> 00:03:42,600 Speaker 2: you can produce right now? 79 00:03:42,760 --> 00:03:47,560 Speaker 1: Oh? Sure, you know, the sanction waiver the Secretary Vestment 80 00:03:47,640 --> 00:03:50,280 Speaker 1: came out with is just one of many, many tools 81 00:03:50,640 --> 00:03:54,120 Speaker 1: that we have ready. We've got a whole flowchart of 82 00:03:54,520 --> 00:03:57,120 Speaker 1: tools to use the petting on this or that, and 83 00:03:57,760 --> 00:04:01,080 Speaker 1: we're ready to move them as food as we have to. 84 00:04:01,640 --> 00:04:03,800 Speaker 1: But we're also very optimistic that we're going to be 85 00:04:03,800 --> 00:04:06,920 Speaker 1: able to get this near term problem resolved relatively quickly. 86 00:04:07,240 --> 00:04:09,840 Speaker 2: The Button administration, as you know, burned through the SPR 87 00:04:09,960 --> 00:04:12,800 Speaker 2: took it down quite dramatically. Is there space left in 88 00:04:12,840 --> 00:04:15,320 Speaker 2: the SPR to deploy some of that to bring down 89 00:04:15,360 --> 00:04:16,880 Speaker 2: prices just a bit for consumers? 90 00:04:17,880 --> 00:04:22,400 Speaker 1: You know, there is no conversation right now to dip 91 00:04:22,440 --> 00:04:25,680 Speaker 1: into that, but we've got something like four hundred million 92 00:04:25,800 --> 00:04:30,200 Speaker 1: barrels ready to go if needed, but there is I 93 00:04:30,440 --> 00:04:32,920 Speaker 1: re emphasize the that there has not been a conversation 94 00:04:33,040 --> 00:04:36,400 Speaker 1: to dip into that yet, because our expectation is that 95 00:04:36,440 --> 00:04:40,800 Speaker 1: this effort in Iran is way ahead of schedule, and 96 00:04:41,120 --> 00:04:44,039 Speaker 1: we understand that they're near term market fluctuations, but we 97 00:04:44,080 --> 00:04:45,680 Speaker 1: have our eyes on the horizon and we think that's 98 00:04:45,680 --> 00:04:47,000 Speaker 1: where people should be looking. 99 00:04:46,800 --> 00:04:48,920 Speaker 3: To can can you say head a schedule? Is there 100 00:04:48,920 --> 00:04:49,480 Speaker 3: a schedule? 101 00:04:51,160 --> 00:04:53,560 Speaker 1: Yes, but obviously we're not going to go through the 102 00:04:53,560 --> 00:04:54,280 Speaker 1: schedule on DV. 103 00:04:54,880 --> 00:04:57,120 Speaker 2: The timing of this is so important to people, though. 104 00:04:57,200 --> 00:04:59,760 Speaker 2: They need to understand the duration to understand how acute 105 00:05:00,120 --> 00:05:03,080 Speaker 2: the problem will be. It feels very open ended. It 106 00:05:03,080 --> 00:05:05,840 Speaker 2: feels different to what we saw in Caracas. Tehran is 107 00:05:05,839 --> 00:05:09,080 Speaker 2: not corracas so run as you know, it's not Venezuela. 108 00:05:09,200 --> 00:05:11,840 Speaker 2: Can you assure people this won't be something that goes 109 00:05:11,880 --> 00:05:13,920 Speaker 2: on for months? This is something that will go on 110 00:05:14,160 --> 00:05:14,680 Speaker 2: for weeks. 111 00:05:15,760 --> 00:05:18,880 Speaker 1: There's nobody that expects that we're going to have a 112 00:05:18,920 --> 00:05:24,719 Speaker 1: disruption that people is anything like what the bears right now, Kevin. 113 00:05:24,720 --> 00:05:27,039 Speaker 2: The President's also said there'll be naval escorts as well 114 00:05:27,080 --> 00:05:29,880 Speaker 2: to help tankers get through the straight offormers. As we 115 00:05:30,000 --> 00:05:32,640 Speaker 2: understand tracking the traffic here at Bloomberg, that's grinded to 116 00:05:32,680 --> 00:05:36,120 Speaker 2: an effective whole as of this morning. What can we 117 00:05:36,200 --> 00:05:38,279 Speaker 2: do to help those tankers get through that straight and 118 00:05:38,320 --> 00:05:39,400 Speaker 2: how quickly can we do it? 119 00:05:40,880 --> 00:05:43,760 Speaker 1: This is a matter that is being studied very closely 120 00:05:43,800 --> 00:05:47,680 Speaker 1: by the military and discussed constantly, and I expect a 121 00:05:47,680 --> 00:05:49,760 Speaker 1: heck of a lot of progress was made in coming 122 00:05:49,839 --> 00:05:51,320 Speaker 1: up with a plan that can do exactly what the 123 00:05:51,320 --> 00:05:52,360 Speaker 1: President has suggested. 124 00:05:52,480 --> 00:05:54,600 Speaker 2: There were two dimensions that the President suggested, and one 125 00:05:54,640 --> 00:05:57,479 Speaker 2: with the naval escorts, and the second piece was insurance. 126 00:05:57,520 --> 00:05:58,760 Speaker 2: How long do you think it would take to put 127 00:05:58,800 --> 00:06:01,919 Speaker 2: together something more comprehensive to give people the certainty that 128 00:06:02,000 --> 00:06:03,240 Speaker 2: these things are ensurable. 129 00:06:04,160 --> 00:06:08,359 Speaker 1: Well, I think it's really the insurance and the naval 130 00:06:08,400 --> 00:06:13,400 Speaker 1: effort and the destruction of the Iranian assault capability. Those 131 00:06:13,400 --> 00:06:16,200 Speaker 1: things are all on the table, and I think the 132 00:06:16,240 --> 00:06:20,320 Speaker 1: markets will move forward quickly once it's clear that the 133 00:06:20,360 --> 00:06:22,480 Speaker 1: military US military has resolved those matters. 134 00:06:22,640 --> 00:06:25,160 Speaker 2: Kevin, there's another aspect to the price sanction that's making 135 00:06:25,160 --> 00:06:27,520 Speaker 2: some people nervous. I'd love your thoughts on it. It's 136 00:06:27,560 --> 00:06:29,520 Speaker 2: not just the disruption that we're seeing in the Middle 137 00:06:29,520 --> 00:06:32,839 Speaker 2: East and the disruptions to energy supply. There's also issues 138 00:06:32,880 --> 00:06:35,799 Speaker 2: in private credit. Every day there is a headline about 139 00:06:35,839 --> 00:06:40,400 Speaker 2: redemptions and certain firms trying to meet redemptions in different ways. 140 00:06:40,839 --> 00:06:44,000 Speaker 2: We've talked a lot about financial conditions, but if financial 141 00:06:44,000 --> 00:06:46,480 Speaker 2: conditions tightening in a way that we can't see in 142 00:06:46,520 --> 00:06:48,400 Speaker 2: private markets, and how are you tracking things? 143 00:06:49,279 --> 00:06:52,480 Speaker 1: Well, we're tracking it very closely. We're keeping an eye 144 00:06:52,520 --> 00:06:55,440 Speaker 1: on things that are liquid, things that are ill liquid, 145 00:06:55,520 --> 00:06:58,599 Speaker 1: and so on. And right now we see a very 146 00:06:58,640 --> 00:07:02,719 Speaker 1: well functioning market that's under a tiny little bit of stress. 147 00:07:02,839 --> 00:07:06,200 Speaker 1: But for the most part, you know, outside of the 148 00:07:06,279 --> 00:07:10,200 Speaker 1: one firm that had the significant issue, it looks like 149 00:07:10,240 --> 00:07:13,720 Speaker 1: everybody's in good shape. But we're following it very close toly. 150 00:07:13,760 --> 00:07:15,160 Speaker 3: Kevin, how do you trust those things? 151 00:07:15,240 --> 00:07:17,840 Speaker 2: You in touch with the big firms right now about 152 00:07:17,840 --> 00:07:20,480 Speaker 2: what they're doing. Are there certain blow ups that are 153 00:07:20,480 --> 00:07:22,160 Speaker 2: making you more concerned than other things. 154 00:07:22,320 --> 00:07:24,840 Speaker 1: How do you track these other behaviors the air behaviors 155 00:07:24,880 --> 00:07:27,920 Speaker 1: that make you concerned, Like when you see a radical 156 00:07:27,920 --> 00:07:31,320 Speaker 1: amount of shorting of assets of firms that are starting 157 00:07:31,360 --> 00:07:33,640 Speaker 1: to feel some distress and so on. And we're seeing 158 00:07:33,720 --> 00:07:35,800 Speaker 1: and that's something that we really haven't seen since the 159 00:07:35,800 --> 00:07:38,880 Speaker 1: financial crisis in two thousand and eight, and we're seeing 160 00:07:38,960 --> 00:07:40,400 Speaker 1: nothing like that kind of activity. 161 00:07:40,640 --> 00:07:43,440 Speaker 2: Kevin loud Blank finds someone we both respect study sees 162 00:07:43,480 --> 00:07:46,880 Speaker 2: echoes of what happened in the financial crisis. Jamie Diamond 163 00:07:46,880 --> 00:07:48,720 Speaker 2: at JP Mooregan has said some people have done some 164 00:07:48,800 --> 00:07:52,400 Speaker 2: dumb things. Mark run Off Apollo has said something similar. 165 00:07:52,440 --> 00:07:54,720 Speaker 2: Do you think people have done some dumb things that 166 00:07:54,760 --> 00:07:55,880 Speaker 2: are going to come to the surface. 167 00:07:57,200 --> 00:07:59,600 Speaker 1: People have made some bets that didn't pay off. But 168 00:07:59,640 --> 00:08:02,000 Speaker 1: that's kind of what happens in financial markets, right, So, 169 00:08:02,800 --> 00:08:04,840 Speaker 1: whether it's dumb or not, x X. 170 00:08:04,800 --> 00:08:06,680 Speaker 3: Post it looks dumb. Does it pose a risk to 171 00:08:06,720 --> 00:08:09,640 Speaker 3: all of us? Excuse me? Does it pose a risk 172 00:08:09,640 --> 00:08:11,200 Speaker 3: to all of us? Is the right systemic hast? 173 00:08:11,280 --> 00:08:15,160 Speaker 1: So I believe that that there's so much security in 174 00:08:15,200 --> 00:08:18,120 Speaker 1: that space that they can handle the stress that we're 175 00:08:18,120 --> 00:08:18,960 Speaker 1: observing right now. 176 00:08:19,120 --> 00:08:21,120 Speaker 2: Kevin Hasset, thanks for the update. We appreciate it so 177 00:08:21,240 --> 00:08:24,000 Speaker 2: thank you, thank you very much. The National Economic Council Director, 178 00:08:24,320 --> 00:08:25,040 Speaker 2: Kevin Hassett. 179 00:08:25,040 --> 00:08:25,240 Speaker 3: There