1 00:00:02,440 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,920 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,240 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:36,960 Speaker 2: Terminal and the Bloomberg Business app. The beginning, our top 10 00:00:37,000 --> 00:00:40,200 Speaker 2: story investors mapping out growing guards of a second drum term. 11 00:00:40,360 --> 00:00:43,080 Speaker 2: Joe Quinlan and Maryland Bank for America Private Bank writing this. 12 00:00:43,320 --> 00:00:46,440 Speaker 2: The key variable to watch is the US dollar. Will 13 00:00:46,520 --> 00:00:49,440 Speaker 2: foreigners vote with their wallet per the US election? Owning 14 00:00:49,520 --> 00:00:53,400 Speaker 2: twenty eight percent of marketable treasuries, thirty two percent of 15 00:00:53,479 --> 00:00:57,200 Speaker 2: the corporate bond market, and twenty percent of US secreits. 16 00:00:57,320 --> 00:00:59,560 Speaker 2: Joe joins us. Now for more, Joe, let's talk about this. 17 00:00:59,600 --> 00:01:02,160 Speaker 2: You'll rection to what happened on Thursday night and what 18 00:01:02,280 --> 00:01:04,000 Speaker 2: you think it means for this market. 19 00:01:05,480 --> 00:01:08,839 Speaker 3: Well, John, Post Thursday night, I was watching a dollar 20 00:01:08,959 --> 00:01:11,240 Speaker 3: very carefully over in Asia and Europe, and really no 21 00:01:11,440 --> 00:01:15,000 Speaker 3: sell off here related to any political unrest here in 22 00:01:15,000 --> 00:01:17,920 Speaker 3: the United States or uncertainty. You know, you're just talking 23 00:01:17,920 --> 00:01:21,200 Speaker 3: your lease about the dollar. It's what the dollar has strength. 24 00:01:21,200 --> 00:01:24,039 Speaker 3: I'm surprised it's not stronger because what's behind the dollar 25 00:01:24,160 --> 00:01:26,720 Speaker 3: is the great US economy, the private sector, the most 26 00:01:26,720 --> 00:01:30,520 Speaker 3: productive economy out there. And when I talk to foreign wealth, 27 00:01:30,640 --> 00:01:33,959 Speaker 3: sovereign wealth funds or family offices around the world, they 28 00:01:34,000 --> 00:01:36,720 Speaker 3: want to own US assets, and there's a preference in 29 00:01:36,760 --> 00:01:39,760 Speaker 3: a premium on owning US securities. I don't think that's 30 00:01:39,760 --> 00:01:42,280 Speaker 3: going to change between now and the election. Some uncertainty, 31 00:01:42,360 --> 00:01:43,320 Speaker 3: but no big change. 32 00:01:43,440 --> 00:01:45,680 Speaker 2: John. Let's talk about what would happen on a Trump win. 33 00:01:45,840 --> 00:01:47,440 Speaker 2: I've got to go through a couple of steps here, 34 00:01:47,440 --> 00:01:49,720 Speaker 2: but for the sake of scenario analysis, let's say he 35 00:01:49,760 --> 00:01:52,000 Speaker 2: gets a win. Let's even go one step further. Let's 36 00:01:52,000 --> 00:01:54,080 Speaker 2: say we get that red waves. I'm thinking back to 37 00:01:54,120 --> 00:01:56,320 Speaker 2: twenty sixteen. A lot of people are thinking about the 38 00:01:56,320 --> 00:01:59,320 Speaker 2: Trump playbook at that time, and this bond market was 39 00:01:59,400 --> 00:02:04,160 Speaker 2: demanded bond issuance. In fact, the economic backdrop demanded fiscal stimulus. 40 00:02:04,200 --> 00:02:06,640 Speaker 2: That's not where we're at in twenty twenty four and 41 00:02:06,680 --> 00:02:08,919 Speaker 2: if you think about the trades that works back then, Yes, 42 00:02:09,000 --> 00:02:12,000 Speaker 2: yields climbed, Yes, the dollar rallied, but small caps that 43 00:02:12,120 --> 00:02:16,720 Speaker 2: month in November twenty sixteen, rallied by eleven percent. Joe, 44 00:02:16,720 --> 00:02:18,720 Speaker 2: I'm just wondering, give that's the trade this time around, 45 00:02:18,720 --> 00:02:20,440 Speaker 2: because that's not what I say in small camps in 46 00:02:20,480 --> 00:02:21,480 Speaker 2: the last twenty four hours. 47 00:02:22,680 --> 00:02:25,760 Speaker 4: I mean, the small caps are still in purgatory here. Good. 48 00:02:25,880 --> 00:02:28,079 Speaker 3: You could be right in the sense that if you've 49 00:02:28,080 --> 00:02:30,880 Speaker 3: got to, if you've got an administration that's bent on 50 00:02:31,320 --> 00:02:34,960 Speaker 3: doing things here in the United States terrors, anti immigration, 51 00:02:35,480 --> 00:02:36,760 Speaker 3: we're going to have to raise the bar. 52 00:02:36,919 --> 00:02:37,560 Speaker 4: We're going to have. 53 00:02:37,560 --> 00:02:40,440 Speaker 3: To increase our production across the board, not just large 54 00:02:40,480 --> 00:02:43,520 Speaker 3: gap small caps. So it could spread, but you know, 55 00:02:43,600 --> 00:02:47,440 Speaker 3: to me, for all the wrong reasons, you know, nationalism, protectionism. 56 00:02:47,520 --> 00:02:50,120 Speaker 3: So I think that trade is it could come back, 57 00:02:50,200 --> 00:02:52,240 Speaker 3: but to me, it doesn't. It doesn't give me any 58 00:02:52,240 --> 00:02:55,079 Speaker 3: comfort because I think we're small casts can come back 59 00:02:55,120 --> 00:02:55,720 Speaker 3: on their own. 60 00:02:55,800 --> 00:02:56,920 Speaker 4: But if we suit. 61 00:02:56,840 --> 00:02:59,600 Speaker 3: Policy protectionism, that's a different animal. 62 00:02:59,720 --> 00:03:00,000 Speaker 4: Together. 63 00:03:00,080 --> 00:03:02,720 Speaker 3: I understand exactly where you're going in small caps will 64 00:03:02,720 --> 00:03:07,160 Speaker 3: have their day. I think under a Republican suite. 65 00:03:06,760 --> 00:03:09,079 Speaker 1: Jo, I'm wondering how far out you can actually make 66 00:03:09,120 --> 00:03:11,920 Speaker 1: some sort of prediction. We were talking earlier, John raised 67 00:03:12,080 --> 00:03:14,440 Speaker 1: Lori Calvacina and talking about how there's just this no 68 00:03:14,560 --> 00:03:17,560 Speaker 1: visibility around twenty twenty five. Do you feel the same way. 69 00:03:18,800 --> 00:03:21,919 Speaker 3: No, Actually I don't so I think twenty twenty five, yes, 70 00:03:22,040 --> 00:03:24,480 Speaker 3: the policy backdrop becomes uncertain. 71 00:03:24,720 --> 00:03:27,040 Speaker 4: But when you step back, look at the AI. 72 00:03:26,840 --> 00:03:31,880 Speaker 3: Revolution, the productivity that's coming, look at the US economy 73 00:03:31,960 --> 00:03:34,079 Speaker 3: in general relative to the rest of the world, look 74 00:03:34,080 --> 00:03:37,200 Speaker 3: at the geopolitics, and there are places put money to work. 75 00:03:37,240 --> 00:03:41,520 Speaker 3: There's a premium out of resources, the infrastructures build, it's 76 00:03:41,560 --> 00:03:44,880 Speaker 3: going to continue. So there's policy fog, but I think 77 00:03:44,920 --> 00:03:49,240 Speaker 3: there's opportunities put money to work in certain sectors that irregardless, 78 00:03:49,600 --> 00:03:53,120 Speaker 3: it doesn't matter what's happening with politics, it's going to 79 00:03:53,160 --> 00:03:55,840 Speaker 3: continue into the second half of this decade. 80 00:03:56,000 --> 00:03:58,640 Speaker 1: A lot of people were worried about valuations, particularly in 81 00:03:58,840 --> 00:04:01,400 Speaker 1: the areas that you mentioned, AI in particular, looking at 82 00:04:01,560 --> 00:04:04,040 Speaker 1: videos some kind of one hundred and forty percent gains 83 00:04:04,040 --> 00:04:06,280 Speaker 1: so far this year, you're seeing it kind of trade 84 00:04:06,400 --> 00:04:09,080 Speaker 1: range bound over the past few trading sessions do you 85 00:04:09,120 --> 00:04:12,480 Speaker 1: agree that it is concerning where valuations are that there 86 00:04:12,480 --> 00:04:15,000 Speaker 1: should be some sort of retlacement before you feel comfortable 87 00:04:15,800 --> 00:04:18,400 Speaker 1: really doubling down on those names. 88 00:04:19,080 --> 00:04:19,719 Speaker 4: I think to it. 89 00:04:19,760 --> 00:04:22,320 Speaker 3: Agree, So, yes, we're getting well, you know, there's a 90 00:04:22,360 --> 00:04:25,600 Speaker 3: lot of bullet sentiments in the market, so we're careful 91 00:04:25,600 --> 00:04:28,159 Speaker 3: about that putting new money to work. But these companies 92 00:04:28,160 --> 00:04:31,800 Speaker 3: are backing up these valuation with earnings growth and we 93 00:04:31,800 --> 00:04:32,600 Speaker 3: see that continuing. 94 00:04:32,640 --> 00:04:34,640 Speaker 4: Is that going to continue in the twenty twenty five? 95 00:04:34,880 --> 00:04:35,440 Speaker 4: Probably not. 96 00:04:35,560 --> 00:04:37,960 Speaker 3: Your your comps are going to come down, But we're 97 00:04:38,080 --> 00:04:41,560 Speaker 3: still comfortable owning this market broadening out. 98 00:04:41,880 --> 00:04:42,960 Speaker 4: We like the cyclicals. 99 00:04:43,200 --> 00:04:46,839 Speaker 3: We still like energy, I like commodities, anything related to 100 00:04:46,880 --> 00:04:50,359 Speaker 3: transportation and distribution, transmission. 101 00:04:49,760 --> 00:04:52,839 Speaker 4: We like that space as well. So we're very bullsh 102 00:04:52,880 --> 00:04:56,279 Speaker 4: on defense spending, giving where we are. So, yes, there's 103 00:04:56,320 --> 00:04:59,560 Speaker 4: parts of the market that could be allegedly overvalued. 104 00:05:00,160 --> 00:05:02,840 Speaker 3: This is backed up by a strong economy, good earnings, 105 00:05:02,880 --> 00:05:05,160 Speaker 3: good consumption, and foreign demand. 106 00:05:05,320 --> 00:05:07,720 Speaker 4: Coming back to you for US securities. 107 00:05:07,320 --> 00:05:11,320 Speaker 2: Joe build on that energy defense. Is there some connection 108 00:05:11,360 --> 00:05:12,320 Speaker 2: there between the two. 109 00:05:13,520 --> 00:05:16,040 Speaker 4: Absolutely, John, because what's the premium? 110 00:05:16,279 --> 00:05:20,960 Speaker 3: United States is energy independent relatively speaking, but certainly relative 111 00:05:21,000 --> 00:05:21,560 Speaker 3: to Europe. 112 00:05:21,920 --> 00:05:23,200 Speaker 4: And Asia. 113 00:05:23,279 --> 00:05:26,839 Speaker 3: So you've got all the demand for AI the data centers. 114 00:05:27,000 --> 00:05:30,600 Speaker 3: There's only one country really that can feed this beast, right, 115 00:05:30,640 --> 00:05:34,680 Speaker 3: this AI beast in a relative way, and that's the 116 00:05:34,760 --> 00:05:37,960 Speaker 3: United States. Because we're energy independent. People haven't made the connection. 117 00:05:38,040 --> 00:05:41,880 Speaker 3: If you want to drive data, drive AI, you need energy. 118 00:05:41,920 --> 00:05:42,719 Speaker 4: Who has the energy? 119 00:05:42,760 --> 00:05:45,600 Speaker 3: The United States We're going to pull ahead because of 120 00:05:45,600 --> 00:05:48,360 Speaker 3: our energy independence driving AI. 121 00:05:48,720 --> 00:05:51,400 Speaker 4: Artificial intelligence, We're going to pull ahead of the rest 122 00:05:51,400 --> 00:05:51,919 Speaker 4: of the world. 123 00:05:51,920 --> 00:05:54,080 Speaker 3: And that's what the bet people are making when they 124 00:05:54,120 --> 00:05:56,000 Speaker 3: buy the US relative to the rest of the world. 125 00:05:56,200 --> 00:05:58,120 Speaker 2: John Le's got one step. What am I buying then 126 00:05:58,200 --> 00:06:03,120 Speaker 2: you say it's energy, Is that the oil produces energy services? 127 00:06:03,120 --> 00:06:03,880 Speaker 2: Where am I going for that? 128 00:06:04,080 --> 00:06:04,240 Speaker 5: Right? 129 00:06:05,040 --> 00:06:08,080 Speaker 3: Our equity ailst like the whole spectrum, John, but also 130 00:06:08,240 --> 00:06:13,839 Speaker 3: transmission distribution utilities and really across the spectrum. We like 131 00:06:13,880 --> 00:06:17,520 Speaker 3: renewables as well. In this space the interconnection queue. People 132 00:06:17,560 --> 00:06:19,599 Speaker 3: don't talk about that. We've got to get that better. 133 00:06:19,800 --> 00:06:22,000 Speaker 3: We've got to be able to take all this renewable 134 00:06:22,160 --> 00:06:25,880 Speaker 3: capacity and plug it in. It's that simple, and we're 135 00:06:25,920 --> 00:06:28,440 Speaker 3: missing it. So I think that's coming down the pipeline. 136 00:06:28,480 --> 00:06:34,400 Speaker 3: More infrastructure on just basic transmission wires, distribution getting this out, 137 00:06:34,480 --> 00:06:37,680 Speaker 3: and I think that's a whole new ballgame for US competitiveness. 138 00:06:37,880 --> 00:06:39,800 Speaker 1: I want to be at the Independence Day celebration at 139 00:06:39,800 --> 00:06:41,719 Speaker 1: your house, Joe. It seems like it's going to be exciting. 140 00:06:41,800 --> 00:06:44,000 Speaker 1: I do think that there is a question when you 141 00:06:44,040 --> 00:06:46,240 Speaker 1: talk about energy, particularly on a day like today where 142 00:06:46,279 --> 00:06:48,559 Speaker 1: you do see oil prices climbing to the highest levels 143 00:06:48,600 --> 00:06:51,479 Speaker 1: going back to April. And this is on the heels 144 00:06:51,520 --> 00:06:54,880 Speaker 1: of both the hurricane barrel that's going the first one 145 00:06:55,240 --> 00:06:57,840 Speaker 1: on records going back to the eighteen hundreds that really 146 00:06:57,880 --> 00:07:01,160 Speaker 1: has reached that category five level. Well, how concerned are 147 00:07:01,200 --> 00:07:04,279 Speaker 1: you about a potential spike in prices over the summer 148 00:07:04,360 --> 00:07:07,120 Speaker 1: if there is some sort of hurricane season that is 149 00:07:07,160 --> 00:07:08,919 Speaker 1: as violent as some people are worried about. 150 00:07:10,080 --> 00:07:11,680 Speaker 3: Well, listen, I would say to be short term the 151 00:07:11,760 --> 00:07:15,000 Speaker 3: spike up in prices, because there's plenty of oil out 152 00:07:15,040 --> 00:07:17,240 Speaker 3: there globally, not just stay here in the United States 153 00:07:17,280 --> 00:07:17,680 Speaker 3: as well. 154 00:07:17,720 --> 00:07:21,120 Speaker 4: So yes, that's a concern. It could to me. 155 00:07:21,360 --> 00:07:24,480 Speaker 3: Longer term is everything we just talked about. It's the 156 00:07:24,520 --> 00:07:28,760 Speaker 3: demand for electricity, EVS data centers. So we're watching the 157 00:07:28,840 --> 00:07:32,400 Speaker 3: hurricane season in particularly when it comes to insurance companies. 158 00:07:32,400 --> 00:07:35,320 Speaker 3: What does it mean to get insurance in for housing 159 00:07:35,360 --> 00:07:37,360 Speaker 3: and these other businesses that we've been talking about. 160 00:07:37,400 --> 00:07:38,840 Speaker 4: That's a big issue buyers. 161 00:07:38,840 --> 00:07:42,280 Speaker 3: You know, the climate change, the climate mitigation is becoming 162 00:07:42,360 --> 00:07:45,400 Speaker 3: broadening out for insurance companies. It's broadening out. It's going 163 00:07:45,440 --> 00:07:47,280 Speaker 3: to affect more consumers. I think that's going to be 164 00:07:47,320 --> 00:07:49,280 Speaker 3: a big issue in the second half of this decade. 165 00:07:49,280 --> 00:07:50,160 Speaker 4: They're going to be talking. 166 00:07:50,000 --> 00:07:52,840 Speaker 2: About Brent back in the high eighties, eighty seven, Joe, 167 00:07:52,920 --> 00:07:55,160 Speaker 2: it's going to hear from your Joe quinnin of Mariland 168 00:07:55,160 --> 00:07:58,680 Speaker 2: Banks for America Private Bank, Keith theme for Joe, preference 169 00:07:58,680 --> 00:08:03,600 Speaker 2: for hard power, defend herd assets, commodities, hard hats, infrastructure, 170 00:08:13,000 --> 00:08:15,960 Speaker 2: President Biden slamming a Supreme Court ruling that could allow 171 00:08:16,080 --> 00:08:18,680 Speaker 2: Donald Trump to escape prosecution for his role in the 172 00:08:18,760 --> 00:08:21,840 Speaker 2: January sixth right on Capitol Hill. Bannon's comments coming as 173 00:08:21,840 --> 00:08:24,640 Speaker 2: his campaign looks to move the narrative away from last 174 00:08:24,640 --> 00:08:27,880 Speaker 2: week's debate tobacco, which saw a growing number of Americans 175 00:08:27,960 --> 00:08:30,600 Speaker 2: question the president's ability to serve. Joining US now is 176 00:08:30,640 --> 00:08:34,000 Speaker 2: Jeanette loves Fatigua's a bad company. Jeanette, I've got to say, 177 00:08:34,120 --> 00:08:36,440 Speaker 2: you're on the money when it comes to what you're 178 00:08:36,480 --> 00:08:39,400 Speaker 2: focused on, and that's the tight senate races that we 179 00:08:39,440 --> 00:08:41,880 Speaker 2: should all be watching. And if those start to shift, 180 00:08:41,920 --> 00:08:45,480 Speaker 2: maybe this president's in even more trouble than he already is. Jene, 181 00:08:45,520 --> 00:08:47,080 Speaker 2: what are you seeing in those type races now? 182 00:08:48,120 --> 00:08:50,040 Speaker 6: Yeah, good mornings. I mean, it's a great point. 183 00:08:50,080 --> 00:08:50,280 Speaker 4: One. 184 00:08:50,440 --> 00:08:52,720 Speaker 7: The big thing that we're seeing coming out of Thursday 185 00:08:52,760 --> 00:08:55,760 Speaker 7: is that everyone's worried about Trump I mean sorry, Biden 186 00:08:55,840 --> 00:08:58,280 Speaker 7: being at the top of the ticket and now potentially 187 00:08:58,760 --> 00:09:02,240 Speaker 7: having that debate perform Mormans. That really did not change 188 00:09:02,280 --> 00:09:04,719 Speaker 7: the election trajectory the way he wanted it to do. 189 00:09:05,120 --> 00:09:07,440 Speaker 7: The bigger impact is what's going to happen in these 190 00:09:07,440 --> 00:09:10,320 Speaker 7: down ballot races. And so one thing that's really important 191 00:09:10,360 --> 00:09:13,960 Speaker 7: is that you are seeing Democratic senators who are in 192 00:09:14,000 --> 00:09:17,400 Speaker 7: general it is more difficult to actually unseat an incumbent senator. 193 00:09:17,640 --> 00:09:21,280 Speaker 7: View Democratic senators in states like Pennsylvania and Wisconsin, in 194 00:09:21,320 --> 00:09:25,120 Speaker 7: Arizona who are actually currently out running Biden in the polls, 195 00:09:25,400 --> 00:09:27,320 Speaker 7: and so I think that if you start to see 196 00:09:27,600 --> 00:09:30,640 Speaker 7: those numbers really change direction over the course the next 197 00:09:30,640 --> 00:09:33,320 Speaker 7: few weeks. Right now, the Democratic Party is kind of 198 00:09:33,400 --> 00:09:36,160 Speaker 7: rallying around Biden saying that they're going to have him 199 00:09:36,240 --> 00:09:36,839 Speaker 7: remain at. 200 00:09:36,800 --> 00:09:37,600 Speaker 6: The top of the ticket. 201 00:09:37,840 --> 00:09:40,200 Speaker 7: But if you really start to see deterioration in the polls, 202 00:09:40,280 --> 00:09:43,719 Speaker 7: deterioration and fundraising and deterioration and the polling for these 203 00:09:43,760 --> 00:09:45,920 Speaker 7: down ballot states, that's going to pose a lot more 204 00:09:46,000 --> 00:09:48,000 Speaker 7: trouble for the Democratic Party come November. 205 00:09:48,120 --> 00:09:51,760 Speaker 2: You mentioned three things there, polling, fundraising, down ballot Senate races. 206 00:09:51,800 --> 00:09:54,560 Speaker 2: Can we talk about fund raising some of the numbers 207 00:09:54,559 --> 00:09:57,319 Speaker 2: that I've been seeing Jeanette say, there's no problem here whatsoever. 208 00:09:57,440 --> 00:09:59,640 Speaker 2: What the numbers that you're looking at. 209 00:10:00,000 --> 00:10:01,520 Speaker 6: But right now there is no problem. 210 00:10:01,600 --> 00:10:03,720 Speaker 7: So they have pretty good numbers over the weekend for 211 00:10:03,760 --> 00:10:06,679 Speaker 7: the Democratic side, We'll have to see. I think right 212 00:10:06,720 --> 00:10:12,000 Speaker 7: now they're definitely concerned that the Republicans are having really 213 00:10:12,040 --> 00:10:15,040 Speaker 7: good fundraising and kind of eating into the fundraising advantage 214 00:10:15,040 --> 00:10:18,080 Speaker 7: that Biden did have earlier this year. But right now 215 00:10:18,120 --> 00:10:20,920 Speaker 7: there is kind of this rallying right around him. You 216 00:10:21,040 --> 00:10:23,280 Speaker 7: had the President come out and speak last night about 217 00:10:23,280 --> 00:10:26,400 Speaker 7: the Supreme Court decision. This is really him trying to reframe, 218 00:10:26,720 --> 00:10:28,880 Speaker 7: maybe try to get some of those images of Thursday 219 00:10:28,960 --> 00:10:31,240 Speaker 7: night out of the public view and put some new 220 00:10:31,520 --> 00:10:35,040 Speaker 7: images out there. So him taking that stand last night 221 00:10:35,080 --> 00:10:37,640 Speaker 7: to make a statement was important for the campaign to 222 00:10:37,679 --> 00:10:40,320 Speaker 7: try to reset and to try to change the narrative 223 00:10:40,360 --> 00:10:42,640 Speaker 7: a little bit away from that debate performance and be 224 00:10:42,679 --> 00:10:43,920 Speaker 7: a little bit more presidential. 225 00:10:44,600 --> 00:10:47,000 Speaker 6: So I think that we're going to be watching those numbers. 226 00:10:47,080 --> 00:10:49,920 Speaker 7: Right now, everything does seem to be okay, but I 227 00:10:49,920 --> 00:10:51,520 Speaker 7: think the next couple of weeks are going to be 228 00:10:51,559 --> 00:10:52,760 Speaker 7: really critical for this race. 229 00:10:53,120 --> 00:10:56,920 Speaker 1: There's some discussion of the DNCA Bloomberg reporting with Democratic 230 00:10:57,040 --> 00:11:00,640 Speaker 1: National Convention is thinking committee is thinking of actually pulling 231 00:11:00,679 --> 00:11:03,720 Speaker 1: forward the nomination of Joe Biden to try to throw 232 00:11:04,240 --> 00:11:07,200 Speaker 1: a sense of support behind him. Is this the right 233 00:11:07,240 --> 00:11:10,240 Speaker 1: idea given the facts that anger is still out there? 234 00:11:10,360 --> 00:11:12,640 Speaker 1: Very much so. And there's a question of why the 235 00:11:12,679 --> 00:11:18,000 Speaker 1: internal circle around Biden isn't necessarily being more transparent about 236 00:11:18,040 --> 00:11:20,480 Speaker 1: this process, right. 237 00:11:20,320 --> 00:11:22,600 Speaker 7: And this is something that was actually kind of planned 238 00:11:22,640 --> 00:11:25,440 Speaker 7: a little bit earlier. They were thinking about doing it 239 00:11:25,480 --> 00:11:28,760 Speaker 7: before August seventh, just because there had been issues with 240 00:11:28,800 --> 00:11:31,480 Speaker 7: the Ohio ballot, and so the party wanted to have 241 00:11:31,679 --> 00:11:35,240 Speaker 7: him basically nominated early just so that there couldn't be 242 00:11:35,320 --> 00:11:39,040 Speaker 7: any turmoil at the convention in August. If you have 243 00:11:39,080 --> 00:11:41,880 Speaker 7: a contentious convention that generally doesn't vode very well for 244 00:11:41,960 --> 00:11:44,600 Speaker 7: the party ahead of the actual election, and so that 245 00:11:44,720 --> 00:11:47,440 Speaker 7: was something that they were actually trying to avoid. But 246 00:11:47,480 --> 00:11:49,199 Speaker 7: one of the things that they're trying to do now 247 00:11:49,280 --> 00:11:51,960 Speaker 7: is thinking about, Okay, well we can actually move this 248 00:11:52,120 --> 00:11:55,480 Speaker 7: forward that would kind of solidify Biden as the nominee. 249 00:11:55,520 --> 00:11:57,680 Speaker 7: You can't have people coming up with the convention trying 250 00:11:57,679 --> 00:11:59,680 Speaker 7: to throw another candidate's name into the hat. 251 00:12:00,120 --> 00:12:02,880 Speaker 6: But this is ultimately going to be for better or 252 00:12:02,920 --> 00:12:03,280 Speaker 6: for worse. 253 00:12:03,320 --> 00:12:05,880 Speaker 7: This is down to Biden making the decision whether he 254 00:12:05,920 --> 00:12:07,719 Speaker 7: wants to stay at the top of the ticket or 255 00:12:07,760 --> 00:12:09,080 Speaker 7: if he wants to step down. 256 00:12:09,320 --> 00:12:11,000 Speaker 6: He can do that before the convention. 257 00:12:11,440 --> 00:12:15,720 Speaker 7: That could be very messy having a multiple delegates having 258 00:12:15,800 --> 00:12:18,040 Speaker 7: votes to figure out who should be the next nominee. 259 00:12:18,360 --> 00:12:21,480 Speaker 7: The committee can also do it after the convention as well, 260 00:12:21,760 --> 00:12:23,960 Speaker 7: or we could see Biden's stay in the entire time. 261 00:12:24,000 --> 00:12:27,160 Speaker 7: But I think this move to potentially have the nomination 262 00:12:27,320 --> 00:12:30,480 Speaker 7: done in July is a way to try to squash 263 00:12:30,559 --> 00:12:33,640 Speaker 7: any dissent. If Biden can keep his numbers up over 264 00:12:33,640 --> 00:12:36,199 Speaker 7: the next couple of weeks, we don't see the great 265 00:12:36,200 --> 00:12:39,400 Speaker 7: deterioration in polling. If we can see him making more 266 00:12:39,440 --> 00:12:42,560 Speaker 7: statements like last night than last Thursday, I think that 267 00:12:42,600 --> 00:12:44,920 Speaker 7: would be something that would allow him to stay at 268 00:12:44,960 --> 00:12:45,400 Speaker 7: the ticket. 269 00:12:45,800 --> 00:12:47,959 Speaker 6: But this is something definitely to be watching tonight. 270 00:12:48,040 --> 00:12:50,679 Speaker 1: Yesterday we had a series of guests talking about how 271 00:12:50,720 --> 00:12:53,120 Speaker 1: Thursday night was a game changer for them in the market, 272 00:12:53,360 --> 00:12:56,400 Speaker 1: that essentially they were looking at the higher likelihood, much 273 00:12:56,440 --> 00:12:59,440 Speaker 1: higher likelihood of a Republican sweep, exactly going to your 274 00:12:59,440 --> 00:13:01,600 Speaker 1: first point, which is essentially you need to watch down 275 00:13:01,640 --> 00:13:04,959 Speaker 1: ballot and see how many people basically stay home, are 276 00:13:04,960 --> 00:13:07,360 Speaker 1: not excited about the top of the ticket, don't feel 277 00:13:07,440 --> 00:13:11,320 Speaker 1: like they're being heard by the Democratic Party. How much 278 00:13:11,559 --> 00:13:13,679 Speaker 1: is that something that you're seeing is a much greater 279 00:13:13,880 --> 00:13:16,160 Speaker 1: likelihood today than say, Thursday morning. 280 00:13:17,200 --> 00:13:17,920 Speaker 6: So I will agree. 281 00:13:17,920 --> 00:13:20,000 Speaker 7: I think the consensus is is that there is definitely 282 00:13:20,040 --> 00:13:22,240 Speaker 7: a greater chance that we're going to have a Republicans 283 00:13:22,240 --> 00:13:24,480 Speaker 7: sweep in this election. But I do think it is 284 00:13:24,520 --> 00:13:27,640 Speaker 7: important to not assume that would be the case. Again, 285 00:13:27,679 --> 00:13:30,080 Speaker 7: these down ballot races are quite important. What we have 286 00:13:30,200 --> 00:13:32,400 Speaker 7: kind of seen is that it seems that there's much 287 00:13:32,400 --> 00:13:35,280 Speaker 7: bigger problem with Biden and Harris at the top of 288 00:13:35,320 --> 00:13:38,600 Speaker 7: the ticket. Rather than an overall problem with the Democratic brand. 289 00:13:38,880 --> 00:13:42,080 Speaker 7: So you do see House races that have done quite well. 290 00:13:42,200 --> 00:13:44,120 Speaker 7: You do also see these Senate races again where the 291 00:13:44,120 --> 00:13:48,760 Speaker 7: Democratic candidates are outperforming Biden in key swing states. The 292 00:13:48,800 --> 00:13:50,640 Speaker 7: other thing I think that what it's important to watch 293 00:13:50,679 --> 00:13:52,400 Speaker 7: is we don't want to just watch just what the 294 00:13:52,440 --> 00:13:53,040 Speaker 7: polls say. 295 00:13:53,240 --> 00:13:55,280 Speaker 6: We want to see actual results. So we've been. 296 00:13:55,160 --> 00:13:58,880 Speaker 7: Watching the special elections that have occurred since January, and 297 00:13:58,960 --> 00:14:03,320 Speaker 7: Democrats have been out performing by eleven percentage points versus 298 00:14:03,320 --> 00:14:06,240 Speaker 7: what happened in those districts in the last election. So 299 00:14:06,320 --> 00:14:08,560 Speaker 7: that does seem to indicate that there could be some 300 00:14:08,600 --> 00:14:11,760 Speaker 7: tickets splitting this year. It could be that voters might 301 00:14:11,800 --> 00:14:14,040 Speaker 7: think that they could vote for maybe Trump at the 302 00:14:14,040 --> 00:14:16,280 Speaker 7: top of the ticket, but then Democrats and either in 303 00:14:16,280 --> 00:14:18,840 Speaker 7: the House or the Senate races. The important thing to 304 00:14:18,880 --> 00:14:22,160 Speaker 7: remember is that currently Congress has very tight majorities in 305 00:14:22,200 --> 00:14:24,480 Speaker 7: both the House and the Senate. It will not take 306 00:14:24,520 --> 00:14:26,480 Speaker 7: a lot of seats one way or the other to 307 00:14:26,560 --> 00:14:29,240 Speaker 7: really move that. But there is still the possibility that 308 00:14:29,320 --> 00:14:31,920 Speaker 7: maybe we don't see a Republican sweep, maybe we actually 309 00:14:31,960 --> 00:14:33,480 Speaker 7: see a divide in Congress next year. 310 00:14:33,640 --> 00:14:35,680 Speaker 2: Jane, you get the distinct sense right now that a 311 00:14:35,680 --> 00:14:37,680 Speaker 2: lot of people in this country feel like they're being 312 00:14:37,840 --> 00:14:41,479 Speaker 2: like to, like there's a division emerging between the campaign 313 00:14:41,840 --> 00:14:44,120 Speaker 2: and the rest of this country. And I don't know 314 00:14:44,160 --> 00:14:46,240 Speaker 2: what this campaign does about that. If I think about 315 00:14:46,240 --> 00:14:48,560 Speaker 2: some of the stories over the weekend, we saw even 316 00:14:48,640 --> 00:14:51,880 Speaker 2: CNN getting blamed for the makeup they used on Joe Biden, 317 00:14:51,920 --> 00:14:54,880 Speaker 2: as if that was the problem on Thursday Night. What 318 00:14:55,000 --> 00:14:56,680 Speaker 2: do you think they're going to do over the next 319 00:14:56,720 --> 00:15:00,120 Speaker 2: four months to try and write course what we've been saying, 320 00:15:00,280 --> 00:15:05,040 Speaker 2: not just on Thursday Night, but for the last twelve months, right, And. 321 00:15:05,040 --> 00:15:07,600 Speaker 7: So I mean, I think that this is Thursday's debate 322 00:15:07,680 --> 00:15:11,800 Speaker 7: definitely reinforced voters concerns about Biden's age, about his fitness 323 00:15:11,880 --> 00:15:15,640 Speaker 7: to continue to serve as a president, and the president 324 00:15:15,760 --> 00:15:18,400 Speaker 7: really needs to try to change this race. It is 325 00:15:18,440 --> 00:15:21,520 Speaker 7: currently a referendum on his first term in office. His 326 00:15:21,600 --> 00:15:25,000 Speaker 7: approval rating is hovering around forty percent. That is not 327 00:15:25,040 --> 00:15:26,840 Speaker 7: good if you're looking to get re elected. 328 00:15:27,160 --> 00:15:29,360 Speaker 6: So he really does need to change this into a choice. 329 00:15:29,520 --> 00:15:32,000 Speaker 7: There are some key factors to look for in the 330 00:15:32,040 --> 00:15:35,360 Speaker 7: coming days. Obviously, with the Supreme Court decision yesterday, you 331 00:15:35,400 --> 00:15:37,840 Speaker 7: saw Biden's statement to try to change this just try 332 00:15:37,840 --> 00:15:40,200 Speaker 7: to say, Okay, that was the decision, but I'm going 333 00:15:40,240 --> 00:15:42,320 Speaker 7: to try to frame this as more of a choice. 334 00:15:42,040 --> 00:15:44,400 Speaker 6: Between me and former President Trump. 335 00:15:44,800 --> 00:15:48,040 Speaker 7: You also have Trump's sentencing coming up next week, so 336 00:15:48,120 --> 00:15:50,520 Speaker 7: that's going to be a important point. Things I'll stove 337 00:15:50,560 --> 00:15:52,720 Speaker 7: to watch for us. Who is the vice presidential pick 338 00:15:52,720 --> 00:15:56,680 Speaker 7: on the Republican ticket. So there are options for the 339 00:15:56,800 --> 00:16:00,360 Speaker 7: Democratic Party to try to reframe the race to make 340 00:16:00,400 --> 00:16:02,640 Speaker 7: it just more of a choice between Trump and Biden, 341 00:16:02,960 --> 00:16:05,800 Speaker 7: But there already is kind of this baked in feeling 342 00:16:05,960 --> 00:16:09,720 Speaker 7: that voters have been concerned about Biden's age that wasn't 343 00:16:09,720 --> 00:16:11,760 Speaker 7: alleviated over the course of the last week. 344 00:16:11,600 --> 00:16:13,000 Speaker 6: And that's something that we're going to have to figure 345 00:16:13,000 --> 00:16:13,320 Speaker 6: out how. 346 00:16:13,280 --> 00:16:13,640 Speaker 1: To deal with. 347 00:16:13,800 --> 00:16:16,360 Speaker 2: Jeanette, this was great. Janette low As Fatigas, thank you. 348 00:16:27,000 --> 00:16:29,120 Speaker 2: Let's continue this conversation and gets to the panel. Joining 349 00:16:29,160 --> 00:16:32,720 Speaker 2: us now is Point seventy two's Dean Macki alongside Femos 350 00:16:33,040 --> 00:16:34,880 Speaker 2: in Linga. Gents, it's great to catch up with you both, 351 00:16:34,960 --> 00:16:36,560 Speaker 2: and I'm going to come to you first. What is 352 00:16:36,600 --> 00:16:39,160 Speaker 2: more important to this bond market right now? The economic 353 00:16:39,240 --> 00:16:41,360 Speaker 2: data that we get this week or the debate that 354 00:16:41,400 --> 00:16:43,000 Speaker 2: took place Thursday evening. 355 00:16:44,400 --> 00:16:47,200 Speaker 5: Well over the course of the last two training sessions, 356 00:16:47,280 --> 00:16:51,600 Speaker 5: it has undoubtedly been the political tides in Washington and 357 00:16:51,680 --> 00:16:54,880 Speaker 5: what it means for November. That being said, we have 358 00:16:55,000 --> 00:16:58,400 Speaker 5: payrolls on Friday, but perhaps more importantly, next week, we 359 00:16:58,480 --> 00:17:01,680 Speaker 5: get CPI again, and that will give the market some 360 00:17:01,800 --> 00:17:03,880 Speaker 5: very good context for whether or not we'll see that 361 00:17:04,000 --> 00:17:07,000 Speaker 5: September rate cut. That's the active debate that matters at 362 00:17:07,040 --> 00:17:07,399 Speaker 5: the moment. 363 00:17:07,600 --> 00:17:09,879 Speaker 2: And there's still some banks out there suggesting that maybe 364 00:17:10,000 --> 00:17:12,800 Speaker 2: payrolls this Friday is more important than CPI next week. 365 00:17:13,119 --> 00:17:14,520 Speaker 2: Would you take the other side of that? 366 00:17:16,200 --> 00:17:18,159 Speaker 5: I would take the other side of it in a 367 00:17:18,240 --> 00:17:21,280 Speaker 5: consensus print. But if there's a surprise, if you hit 368 00:17:21,320 --> 00:17:26,000 Speaker 5: a four point two unemployment rate or a some one 369 00:17:26,080 --> 00:17:29,119 Speaker 5: hundred thousand break four headline payrolls, and then all of 370 00:17:29,160 --> 00:17:34,120 Speaker 5: a sudden, the dual mandate employment aspect becomes a lot 371 00:17:34,200 --> 00:17:35,880 Speaker 5: more relevant than CPI. 372 00:17:36,280 --> 00:17:38,080 Speaker 2: Dean, how are you thinking about that trade off? If 373 00:17:38,160 --> 00:17:41,480 Speaker 2: unemployment continues to creep hire this Friday, does it take 374 00:17:41,520 --> 00:17:44,440 Speaker 2: some way away from the importance of CPI next Thursday. 375 00:17:45,800 --> 00:17:48,080 Speaker 8: I think at this point the fad really is focused 376 00:17:48,080 --> 00:17:53,920 Speaker 8: on inflation. The FED needs to see inflation headed back 377 00:17:54,000 --> 00:17:56,800 Speaker 8: toward the two percent target, and if that's the case, 378 00:17:56,880 --> 00:17:59,280 Speaker 8: then we can have a strong payroll report and the 379 00:17:59,280 --> 00:18:03,280 Speaker 8: FED will still about cutting. So I think the Fed's 380 00:18:03,359 --> 00:18:05,840 Speaker 8: focus really is on the CPI next week. 381 00:18:06,320 --> 00:18:09,280 Speaker 1: Dean, how do you understand what some of the data 382 00:18:09,320 --> 00:18:12,800 Speaker 1: has been saying in terms of slowing but not slow? 383 00:18:13,080 --> 00:18:15,280 Speaker 1: There is this feeling right now, especially as you look 384 00:18:15,320 --> 00:18:17,680 Speaker 1: more to the inflation print than you do the labor market. 385 00:18:18,320 --> 00:18:21,160 Speaker 1: There has been this feeling that we're on the precipice 386 00:18:21,400 --> 00:18:25,600 Speaker 1: of something that could be more punitive for the US economy. 387 00:18:26,080 --> 00:18:30,160 Speaker 6: Do you agree? And if not, why not? I don't agree. 388 00:18:30,400 --> 00:18:33,560 Speaker 8: I think there's been some mixshifts within the data that 389 00:18:33,680 --> 00:18:36,719 Speaker 8: make some of the data look weaker than it really is. So, 390 00:18:36,760 --> 00:18:40,360 Speaker 8: for example, consumers are shifting away from spending on goods 391 00:18:40,400 --> 00:18:44,040 Speaker 8: and food services and towards other categories, but those other 392 00:18:44,119 --> 00:18:47,119 Speaker 8: categories are not included in retail sales, So retail sales 393 00:18:47,119 --> 00:18:50,359 Speaker 8: looks weaker than overall consumers spending, but markets tend to 394 00:18:50,359 --> 00:18:52,199 Speaker 8: focus only on the retail sales report. 395 00:18:52,720 --> 00:18:54,240 Speaker 6: So that's part of what's. 396 00:18:54,040 --> 00:18:57,680 Speaker 8: Happening, is that consumers are shifting toward pre COVID norms, 397 00:18:57,960 --> 00:18:59,760 Speaker 8: and that's not showing up in some of the data 398 00:18:59,800 --> 00:19:00,879 Speaker 8: that people are focused on. 399 00:19:01,480 --> 00:19:02,760 Speaker 1: Do you agree in ian. 400 00:19:04,200 --> 00:19:07,600 Speaker 5: So, I would say that generally speaking on the consumption side, 401 00:19:07,680 --> 00:19:10,720 Speaker 5: I agree, but I am a bit more concerned as 402 00:19:10,760 --> 00:19:13,600 Speaker 5: it pertains to what's going on in the employment landscape. 403 00:19:13,640 --> 00:19:16,640 Speaker 5: We do have higher claims. We have the Joel's quit 404 00:19:16,760 --> 00:19:19,800 Speaker 5: rate at two point two percent, and there are signs 405 00:19:19,880 --> 00:19:25,240 Speaker 5: that the FED has been effective in reintroducing balance to 406 00:19:25,280 --> 00:19:28,000 Speaker 5: the labor market. But my concern is whether or not 407 00:19:28,359 --> 00:19:31,760 Speaker 5: the pendulum swings too far in the side or towards 408 00:19:31,760 --> 00:19:34,560 Speaker 5: the side of cooling, and then that starts to perpetuate 409 00:19:34,600 --> 00:19:37,920 Speaker 5: on itself and it's difficult for the FED to address 410 00:19:37,960 --> 00:19:40,040 Speaker 5: that without some type of policy response. 411 00:19:40,320 --> 00:19:42,200 Speaker 2: This is the worry that Claudia sam has as well. 412 00:19:42,240 --> 00:19:43,920 Speaker 2: We had her on the program with us a little 413 00:19:43,920 --> 00:19:45,960 Speaker 2: bit earlier this morning. We quoted her before we went 414 00:19:46,000 --> 00:19:48,040 Speaker 2: into some of her work. I just want to share 415 00:19:48,040 --> 00:19:50,399 Speaker 2: this quote with you, jentlemen. A good labor market is 416 00:19:50,440 --> 00:19:53,000 Speaker 2: not a reason to wait. The reasons is that inflation 417 00:19:53,080 --> 00:19:55,800 Speaker 2: is down considerably. A good labor market is what it's 418 00:19:55,840 --> 00:19:58,879 Speaker 2: at risk. If the FED doesn't move, Dean, how do 419 00:19:58,960 --> 00:20:02,359 Speaker 2: you think about that frame going into the July meeting 420 00:20:02,359 --> 00:20:04,439 Speaker 2: at the end of this month and ultimately when Shairman 421 00:20:04,480 --> 00:20:06,240 Speaker 2: Powe speaks in about forty five minutes. 422 00:20:07,560 --> 00:20:09,680 Speaker 8: I guess I'm a little less worried about the labor 423 00:20:09,680 --> 00:20:12,320 Speaker 8: market at this point than some people are. And one 424 00:20:12,359 --> 00:20:16,720 Speaker 8: reason is that corporate profits corporate profit margins are close 425 00:20:16,760 --> 00:20:19,959 Speaker 8: to the highest level since the nineteen sixties, and corporations 426 00:20:20,000 --> 00:20:24,000 Speaker 8: are not inclined to do massive layoffs with profitability that strong. 427 00:20:24,440 --> 00:20:26,480 Speaker 8: You know, payroll growth over the last three months is 428 00:20:26,480 --> 00:20:29,359 Speaker 8: two hundred and fifty thousand per month. Childless claims are 429 00:20:29,359 --> 00:20:31,600 Speaker 8: in the two thirties. This still looks like a pretty 430 00:20:31,640 --> 00:20:32,359 Speaker 8: good labor market. 431 00:20:32,359 --> 00:20:32,560 Speaker 5: To me. 432 00:20:32,760 --> 00:20:34,879 Speaker 8: What I think has happened is the labor market has 433 00:20:35,000 --> 00:20:37,800 Speaker 8: normalized rather than weak and sharply. 434 00:20:37,960 --> 00:20:40,639 Speaker 2: In This has big implications, consequences for the shape of 435 00:20:40,640 --> 00:20:43,280 Speaker 2: a yield curve. We came into twenty twenty four. We 436 00:20:43,280 --> 00:20:45,080 Speaker 2: were looking for steepness, but we thought it would be 437 00:20:45,160 --> 00:20:47,480 Speaker 2: driven by a rat kin of cycle fueling a rally 438 00:20:47,480 --> 00:20:49,080 Speaker 2: at the front end of the curve. Can you just 439 00:20:49,080 --> 00:20:51,439 Speaker 2: put some meat on the bones of this best? Thepener 440 00:20:51,680 --> 00:20:53,879 Speaker 2: of the last couple of days, and how sustainable you 441 00:20:53,920 --> 00:20:57,760 Speaker 2: think this move actually is a disinverting yield curve driven 442 00:20:58,119 --> 00:20:58,919 Speaker 2: by the long end. 443 00:21:00,440 --> 00:21:02,679 Speaker 5: So I think that we all know the story. It 444 00:21:02,720 --> 00:21:05,640 Speaker 5: has to do with the potential Trump regaining the White 445 00:21:05,680 --> 00:21:09,200 Speaker 5: House and some of the forward inflationary implications of that 446 00:21:09,200 --> 00:21:13,160 Speaker 5: that steepened out the curve. Deficit spending implies greater issuance, 447 00:21:13,440 --> 00:21:15,240 Speaker 5: So that's why we had a bear steep there. 448 00:21:15,320 --> 00:21:15,520 Speaker 4: Now. 449 00:21:15,560 --> 00:21:20,240 Speaker 5: Transitioning this to a bull steeper I think will require 450 00:21:20,600 --> 00:21:25,480 Speaker 5: at least an initial bear flattening impulse as the economic 451 00:21:25,600 --> 00:21:29,399 Speaker 5: data starts to deteriorate. But eventually what we'll see is 452 00:21:29,440 --> 00:21:32,480 Speaker 5: when it becomes abundantly clear that the Fed is about 453 00:21:32,520 --> 00:21:36,000 Speaker 5: to start normalizing yields or olicy rates lower, two year 454 00:21:36,080 --> 00:21:40,640 Speaker 5: yields will drop and they'll price in an extended cycle 455 00:21:40,880 --> 00:21:43,720 Speaker 5: back to some version of neutrol. And so we could 456 00:21:43,760 --> 00:21:47,399 Speaker 5: easily see a fifty to sixty basis point rally in 457 00:21:47,440 --> 00:21:49,919 Speaker 5: the two year sector once the process starts, and that 458 00:21:49,960 --> 00:21:52,760 Speaker 5: should re steep in the yield curve and put the 459 00:21:52,800 --> 00:21:55,400 Speaker 5: benchmark two his tens curve back in a positive territory. 460 00:21:55,760 --> 00:21:58,679 Speaker 1: So Yan, do you kind of agree with John stolsis 461 00:21:58,800 --> 00:22:01,440 Speaker 1: that this is essentially the market looking for attention from 462 00:22:01,440 --> 00:22:01,800 Speaker 1: the Fed. 463 00:22:03,880 --> 00:22:07,359 Speaker 5: To a large extent, the bond market is I mean 464 00:22:07,480 --> 00:22:10,080 Speaker 5: for the FED at a moment where the Fed is 465 00:22:10,200 --> 00:22:13,239 Speaker 5: considering dialing it back. So I do think that to 466 00:22:13,280 --> 00:22:16,920 Speaker 5: some extent, this is a reminder that loads and supplying 467 00:22:16,960 --> 00:22:20,639 Speaker 5: demand do matter in the treasure market, but only within 468 00:22:20,760 --> 00:22:23,520 Speaker 5: the context of the prevailing range. Keep in mind, ten 469 00:22:23,600 --> 00:22:26,879 Speaker 5: year yields are still below four fifty, and it's in 470 00:22:26,920 --> 00:22:30,520 Speaker 5: an environment where the real economy still appears to be 471 00:22:30,600 --> 00:22:32,600 Speaker 5: on strong pooty, at least for the time being. 472 00:22:32,920 --> 00:22:35,840 Speaker 1: Dan, you've been in the market for decades trying to 473 00:22:35,840 --> 00:22:38,640 Speaker 1: analyze the economics of the moment. I would love your 474 00:22:38,680 --> 00:22:42,320 Speaker 1: insight into how realistic we can be about some of 475 00:22:42,359 --> 00:22:45,880 Speaker 1: the potential scenarios that are being priced into the bond market, 476 00:22:46,080 --> 00:22:48,879 Speaker 1: with really Thursday night being thought of as a watershed moment, 477 00:22:49,320 --> 00:22:52,639 Speaker 1: really looking for the potential for a Republican sweep and 478 00:22:52,720 --> 00:22:55,040 Speaker 1: the idea of some of the fiscal policies as well 479 00:22:55,080 --> 00:22:57,960 Speaker 1: as tariffs ETCA put into place. Is that something that 480 00:22:58,000 --> 00:23:01,119 Speaker 1: you are gaming out actively and think is a beedible 481 00:23:01,359 --> 00:23:02,560 Speaker 1: type of option. 482 00:23:04,119 --> 00:23:05,760 Speaker 8: I think we always want to be thinking about all 483 00:23:06,000 --> 00:23:08,760 Speaker 8: of the various scenarios, and markets will try to price 484 00:23:08,840 --> 00:23:13,480 Speaker 8: in what might happen. But ultimately, from my experience, markets 485 00:23:13,520 --> 00:23:17,920 Speaker 8: don't really fully prace things in until the market is 486 00:23:17,960 --> 00:23:20,440 Speaker 8: pretty sure it's going to happen, So we might see 487 00:23:20,440 --> 00:23:23,639 Speaker 8: the scenario shift back and forth, back and forth multiple 488 00:23:23,720 --> 00:23:26,840 Speaker 8: times in the next several months before it finally settles 489 00:23:26,840 --> 00:23:28,360 Speaker 8: on what truly is. 490 00:23:28,320 --> 00:23:28,879 Speaker 4: Going to happen. 491 00:23:29,040 --> 00:23:31,480 Speaker 2: Hey, Gens, this was great. Dean mackiew points seventy two 492 00:23:31,600 --> 00:23:35,959 Speaker 2: Iligan to bemo. This is the Bloomberg Savenants podcast, bringing 493 00:23:36,040 --> 00:23:39,920 Speaker 2: you the best in markets, economics, angiopolitics. You can watch 494 00:23:39,920 --> 00:23:42,680 Speaker 2: the show live on Bloomberg TV weekday mornings from six 495 00:23:42,760 --> 00:23:46,320 Speaker 2: am to nine am Eastern. Subscribe to the podcast on Apple, 496 00:23:46,600 --> 00:23:49,439 Speaker 2: Spotify or anywhere else you listen, and as always, on 497 00:23:49,440 --> 00:23:51,920 Speaker 2: the Bloomberg Terminal and the Bloomberg Business app.