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Instant Reaction: Jay Powell on Fed Policy · Bloomberg Intelligence

0:02
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
0:13
Speaker 2: An absolutely fascinating news conference with Chairman Powell.
0:17
Speaker 3: Where do we start? Where do we end?
0:19
Speaker 2: A twenty five basis point reduction for the Federal Reserve
0:21
Speaker 2: as anticipated, but some drama over the last forty five
0:25
Speaker 2: minutes or so.
0:26
Speaker 3: Let's start with the equity market.
0:28
Speaker 2: On the S and P five hundred, we look a
0:29
Speaker 2: little something like this at all time highs up eight
0:31
Speaker 2: tenths of one percent. On the NASDAG we're up by
0:34
Speaker 2: one point six at the moment.
0:36
Speaker 3: Looking at the.
0:37
Speaker 2: Russell, we're up, down by about a tenth of one percent.
0:40
Speaker 2: Let's switch it up and get to the bond market
0:42
Speaker 2: and we'll go through these yields. Let's look at yields
0:44
Speaker 2: at the moment, down six basis points on twoes and
0:46
Speaker 2: down about eleven on tens. On a thirty year, we're
0:49
Speaker 2: down about eight basis points of the moment. On policy,
0:52
Speaker 2: this was really really subtle. Did they drop their easing bias?
0:56
Speaker 2: Not quite? Did they find a way to find some
0:59
Speaker 2: optionality without a doubt, effectively endorsing a view that we've
1:03
Speaker 2: had around this table over the last few hours. As
1:05
Speaker 2: times goes by, these decisions get a whole lot harder
1:09
Speaker 2: reluctance to endorse the September forecast, acknowledgment that downside risks
1:13
Speaker 2: have diminished. Awareness the White House policy could redefine the
1:17
Speaker 2: outlook as anticipated. A lot of questions on one thing,
1:20
Speaker 2: this week's election. Take a listen.
1:23
Speaker 4: In the near term, the election will have no effects
1:26
Speaker 4: on our policy decisions. Here, we don't know what the
1:29
Speaker 4: timing and substance of any policy changes will be. We
1:33
Speaker 4: therefore don't know what the effects on the economy would be, specifically,
1:36
Speaker 4: whether and to what extent those policies would matter for
1:39
Speaker 4: the achievement of our goal variables maximum employment and price stability.
1:44
Speaker 4: We don't guess, we don't speculate, and we don't assume.
1:47
Speaker 3: That's the take awaund the election.
1:49
Speaker 2: The obvious follow up to that question, are the September
1:52
Speaker 2: forecasts still valid?
1:54
Speaker 3: Take a listen.
1:55
Speaker 4: I think you take away a sense of some of
1:59
Speaker 4: the downside risks to economic activity having having been diminished
2:04
Speaker 4: with the Nipper revisions in particular, and so overall feeling
2:09
Speaker 4: good about economic activity. I think really the question is December,
2:13
Speaker 4: and you know by December we'll have we'll have more data.
2:16
Speaker 4: I guess one more employment report, two more inflation reports,
2:20
Speaker 4: and lots of other data. And you know we'll make
2:21
Speaker 4: a decision as we get to December.
2:24
Speaker 2: So obviously that decision in December will be totally data dependent.
2:27
Speaker 2: But that sounds you heard just the door slowly opening
2:30
Speaker 2: to a pause if they need to. Now that's policy.
2:33
Speaker 2: Let's talk about leadership. You want some tension in this
2:35
Speaker 2: news conference. Take a listen to this exchange from about
2:39
Speaker 2: twenty minutes ago.
2:41
Speaker 4: Some of the president's alex advisors have suggested that you
2:44
Speaker 4: should resign.
2:45
Speaker 1: If he asked you to leave, would you go? No?
2:50
Speaker 4: Can you follow up on do you think that legally
2:54
Speaker 4: you're not required to leave? No?
2:57
Speaker 2: No, and then no again, and a follow up question
3:00
Speaker 2: a little bit later in the news conference. The answer
3:02
Speaker 2: to that follow up Lisa, not permitted under the law.
3:05
Speaker 5: Even demotion is not necessarily permitted under law. The interesting
3:09
Speaker 5: aspect of this Number one, he was very definitive. Number two,
3:12
Speaker 5: he had a clear answer. It was clear that he
3:14
Speaker 5: had looked at that law ahead of this meeting and
3:16
Speaker 5: that it was fresh on his mind. It seems like
3:19
Speaker 5: this is going to be a very interesting transcript that
3:21
Speaker 5: we get in five years.
3:23
Speaker 6: There's two press conferences today, genis smiled at Colby Smiths
3:25
Speaker 6: de Lisman and all asking adult questions about the economics.
3:29
Speaker 6: I went to Craig Trres after his question, our great
3:32
Speaker 6: historian and economics, and I said, Craig finally, and with
3:35
Speaker 6: Craig Trus launching off John, we got into the emotion
3:39
Speaker 6: of this election and fed independence into twenty twenty five.
3:43
Speaker 2: We've got to separate these two issues, haven't we policy
3:45
Speaker 2: for December, which seems highly dependent on recent data and
3:49
Speaker 2: incoming data between now and then. Then the projections around
3:53
Speaker 2: policy which still feels some way off at the moment.
3:56
Speaker 2: There's nothing to model. I think it's basically what Sham
3:58
Speaker 2: and Pause said in that news conference. So let's park
4:01
Speaker 2: the politics just for a while. Just park the policy
4:03
Speaker 2: based on the data we've had since that September meeting
4:07
Speaker 2: and basically depending on the data we get when we.
4:09
Speaker 3: Go into December. That sounds like a feder reserve.
4:12
Speaker 2: That's t and us up for something that the former
4:14
Speaker 2: vice chair Richard Clara talked about in this program before
4:16
Speaker 2: that news conference started, that we could see Chair and
4:19
Speaker 2: Powell look to find some optionality going into December.
4:22
Speaker 5: That is what the market was looking at, and what
4:24
Speaker 5: I was looking at was a FED fund's futures, which actually,
4:27
Speaker 5: after pricing in a ninety ninety five percent chance of
4:30
Speaker 5: a FED rate cut in December as recently as the
4:33
Speaker 5: end of October, was pricing in a sixty percent chance
4:37
Speaker 5: as recently as a.
4:38
Speaker 1: Few minutes ago, as j. Powell was talking.
4:40
Speaker 5: Key question is how much does this turn up the
4:42
Speaker 5: volume on CPI that we get next Wednesday, especially given
4:45
Speaker 5: that he pinpointed just some stickiness in the latest inflation.
4:49
Speaker 2: This is something you said when the news conference is on.
4:51
Speaker 2: Lisa and I were talking about this, and you said,
4:53
Speaker 2: this is a Federal Reserve that prepared for this moment.
4:56
Speaker 2: The very fact that he responded in this fashion, that
4:58
Speaker 2: he responded to the questions in such direct way coming
5:01
Speaker 2: into next year, it sets up some real tension for
5:03
Speaker 2: twenty twenty five and perhaps even beyond.
5:06
Speaker 5: Because this is not a FED that is just being
5:08
Speaker 5: passive and hoping people don't ask the questions. This is
5:10
Speaker 5: a FED that's very prepared. They were prepared in how
5:12
Speaker 5: they were going to answer it. They were prepared even
5:14
Speaker 5: for the yield move question, saying that we only take
5:16
Speaker 5: it into consideration when it has been that way for
5:18
Speaker 5: a prolonged period of time. Again, this is setting up
5:21
Speaker 5: tests for the market to take a consideration into consideration
5:24
Speaker 5: at a time when they are saying they're opening the
5:27
Speaker 5: door to responding by not necessarily cutting.
5:29
Speaker 3: Intocember equity markets.
5:30
Speaker 2: Right now, session highs, record highs on the S and
5:32
Speaker 2: P five hundred up by nine tens of one percent yesterday,
5:35
Speaker 2: a big sell off and fixed income TK this afternoon.
5:38
Speaker 2: We're seeing a bit of a rally Yield Stowa across the.
5:41
Speaker 6: Camp, a bit of a rally. John, Do you have
5:42
Speaker 6: your six thousand banner ready? I mean you don't have
5:45
Speaker 6: an SBX six thousand bannerred.
5:47
Speaker 3: Now TK seventeen points away. Yeah, we're far away.
5:50
Speaker 6: We can't do Dow forty four thousand banner, but we
5:52
Speaker 6: can do SBX six thousand.
5:54
Speaker 3: I'm sure they get that.
5:55
Speaker 2: The present elect will be very interested in doing now.
5:57
Speaker 2: He wouldn't have one thousand.
5:59
Speaker 3: He will be through next time year.
6:00
Speaker 2: I said earlier on in the program this morning, it's
6:02
Speaker 2: funny you mentioned this. Stewart Kaiser City was sitting right
6:05
Speaker 2: there this morning and he said, you know, TK likes
6:07
Speaker 2: to down, and I said, I'm trying to change that,
6:09
Speaker 2: and going into next year, I'm trying to change President
6:12
Speaker 2: elect as well, to make sure that maybe he shifts
6:14
Speaker 2: away from that to the S and P five hundred.
6:16
Speaker 1: I think that you have an equal chance at both.
6:20
Speaker 3: Exactly.
6:22
Speaker 6: Here's my response.
6:23
Speaker 3: No, but what about him?
6:26
Speaker 2: No, And I'm sure the President elect would say the
6:30
Speaker 2: same thing. Rick Reader joined us now from black Rot,
6:32
Speaker 2: one of the very best in global fixed income and
6:34
Speaker 2: cross asset in markets worldwide. Rick, welcome to the program.
6:37
Speaker 2: You followed that news conference. Let's just start with your
6:39
Speaker 2: first takeaway, Rick, what's your big one?
6:43
Speaker 7: So, first of all, say, there's some drama there, and
6:45
Speaker 7: I thought that was interesting.
6:46
Speaker 8: Listen.
6:47
Speaker 7: I think I agree with that comments that they have
6:50
Speaker 7: to introduce some balance. I think in December, listen, I
6:53
Speaker 7: think the takeaway is they still think readers restrictive. I
6:57
Speaker 7: still think you got to get that fronds rate down
6:59
Speaker 7: four or ish. I think that you got it. You're
7:02
Speaker 7: going to go in December. I think you got to
7:04
Speaker 7: get the you know, you gotta be really careful about
7:06
Speaker 7: the mortgage rate in this country. We could talk about,
7:08
Speaker 7: but I think they're going to go in December. I
7:10
Speaker 7: think he's got that that that's part of the plan.
7:12
Speaker 7: But then as you get into next year, listen, I mean,
7:15
Speaker 7: you got it. You've got what could be a pretty
7:17
Speaker 7: significant policy change setup policy changes, and I think the
7:21
Speaker 7: dots when you go back to the September forecast, I
7:24
Speaker 7: think you gotta, you know, really think about that and evaluate.
7:26
Speaker 7: I think that's going to be one of the most
7:27
Speaker 7: fascinating things going forward is how do they adjust terminal
7:31
Speaker 7: rate from here? How do they adjust where they project
7:34
Speaker 7: growth to be when you're going to go through it
7:36
Speaker 7: could be some pretty significant evolution from here.
7:38
Speaker 2: So, Rick, because I go through the cannon drove the
7:40
Speaker 2: FEDERASERF there's two dates with some asterisks over the next
7:43
Speaker 2: six months or so, and those little stars in the
7:45
Speaker 2: corner of those dates mean you get some projections at
7:47
Speaker 2: those meetings. So the next one is December eighteenth, and
7:50
Speaker 2: then as we work forward into the following year, we're
7:53
Speaker 2: going to get a decision from the federaserv in twenty
7:56
Speaker 2: twenty five in the spring a March nineteenth, a March
7:59
Speaker 2: nineth teenth, Rick, we'll have a new president who may
8:02
Speaker 2: be already coming forward with some policies and some big tariffs. Rick,
8:07
Speaker 2: do you think it's still too early on March nineteenth
8:10
Speaker 2: to expect this veneras f to bank in some policy
8:13
Speaker 2: from DJT the former president and President elect Donald Trump.
8:17
Speaker 7: Can I can I also say that we'll wait and see.
8:21
Speaker 8: Listen.
8:22
Speaker 7: I think that. I think that.
8:25
Speaker 1: Listen.
8:25
Speaker 7: I think you're going to have to evaluate that policy.
8:28
Speaker 7: I mean, we're going to get more data on tariffs,
8:30
Speaker 7: We're going to get more data on how we deal
8:32
Speaker 7: with spending deficits. Listen. I think there are some extremes
8:36
Speaker 7: that gets said in a when you go through an
8:39
Speaker 7: election campaign like this, how aggressive will be on tariffs,
8:42
Speaker 7: how aggressive will be uncutting spending? And then I think
8:45
Speaker 7: you're going to start to see some clarity. You're going
8:47
Speaker 7: to see by the way, and you're going to see
8:49
Speaker 7: what a cabinet looks like. You're going to see who
8:51
Speaker 7: the people are. You're going to have a sense for
8:53
Speaker 7: those personalities and they you know what their disposition is
8:57
Speaker 7: with regard to policy. So yes, I think in March
8:59
Speaker 7: then you are going to have you're going to have
9:01
Speaker 7: to evaluate that and nine and have to evaluate what
9:04
Speaker 7: it means for the forward growth forecast that's Edrica.
9:07
Speaker 5: One thing really stood out to me in the press conference,
9:09
Speaker 5: and yes, it was the no and the preparation for
9:12
Speaker 5: that question, but also this focus on inflation being a
9:15
Speaker 5: little bit stickier than in prior readings, and to me
9:19
Speaker 5: that was notable because it seemed like they had left
9:21
Speaker 5: inflation for dead.
9:22
Speaker 1: That wasn't even part of the mandate.
9:24
Speaker 5: It was, you know, sort of autopilot cutting until you
9:27
Speaker 5: sort of get to a certain place and then you
9:29
Speaker 5: wait and see how much does this turn the volume
9:31
Speaker 5: up on CPI that comes out on Wednesday?
9:35
Speaker 1: It does.
9:35
Speaker 7: I mean, it's gonna listen, I think one man's opinion
9:39
Speaker 7: or more our team's forecast. Listen, we think most of
9:42
Speaker 7: the descent and inflation has happened. You know, we think
9:45
Speaker 7: you've got tremendous goods deflation. Now you've got base effects
9:48
Speaker 7: that aren't a tailwind going forward. What does service inflation
9:52
Speaker 7: do from here? I mentioned it earlier. I think shelters
9:55
Speaker 7: a really big deal and part of why I think
9:57
Speaker 7: you got to get that rate down. You know, you
9:59
Speaker 7: have you see you know what you've seen over the
10:01
Speaker 7: last month. You look at housing affordability still a problem.
10:03
Speaker 7: Housing starts are low, building permits are low, existing home
10:06
Speaker 7: sales are low. You have a problem today, chilters. You're
10:09
Speaker 7: not getting enough home building. You look at all the
10:11
Speaker 7: home builder earnings, you know, pretty rough because they're subsidizing
10:15
Speaker 7: mortgages or subsidizing houses through through their bottom line. Listen,
10:20
Speaker 7: I think you're going to get the rate down. You
10:22
Speaker 7: got to get housing moving more efficiently, and that, by
10:25
Speaker 7: the way, that'll bring shelter inflation down. But that's been
10:27
Speaker 7: the thing that's sticky. But yeah, I think we're going
10:30
Speaker 7: to focus on what these in particularly I focus on
10:32
Speaker 7: service inflation. Where are we going to be over the
10:35
Speaker 7: next couple of months, And I think it's going to
10:36
Speaker 7: be pretty important. I think most of the benefit you've
10:38
Speaker 7: seen it play out already.
10:40
Speaker 6: Rick, it's away from your rema. I was talking with
10:42
Speaker 6: Derek Belchunis are et face BlackRock's got an interesting bitcoin
10:47
Speaker 6: moments from printing seventy seven thousand, equities are moving, bonds
10:52
Speaker 6: are moving in the way we've discussed what does bitcoin
10:56
Speaker 6: at seventy seven thousand signal to fixed income into equities
11:01
Speaker 6: and for that matter, to the dollar.
11:04
Speaker 7: These are good questions, hard questions.
11:06
Speaker 8: Listen.
11:07
Speaker 7: I will say one thing. I mean, obviously, what bitcoing
11:10
Speaker 7: is reflecting is a change, potential change in policy and
11:14
Speaker 7: a more favorable disposition towards crypto. I think that's point
11:17
Speaker 7: one and that's clearly the big driver. Second one that
11:20
Speaker 7: I'll throw out there that I think is robust. Listen,
11:24
Speaker 7: we got to deal with debt and deficits and what
11:27
Speaker 7: does it mean for currency going forward? And listen, I
11:30
Speaker 7: mean it's a scarce asset. It's becoming more scarce. And
11:32
Speaker 7: I think, and I will tell you from doing a
11:34
Speaker 7: lot of client meetings, people more and more thinking about
11:37
Speaker 7: real assets. People are thinking about, gosh in a different world.
11:41
Speaker 7: You know, what does it mean? You know, we got
11:43
Speaker 7: to get our spending down because our debt is too large.
11:45
Speaker 7: Do I own some scarce assets, some harp some real assets?
11:49
Speaker 7: And I think that's playing through obviously, alongside the bigger
11:52
Speaker 7: one being a more favorable disposition from policy in terms
11:56
Speaker 7: of where that is. But Gosh, I hear more and
11:59
Speaker 7: more about real assets. It's not just crypto, but in
12:01
Speaker 7: other places.
12:02
Speaker 3: Rick, I've got to follow on that.
12:03
Speaker 2: I really want to understand from your perspective, whether you
12:05
Speaker 2: see signs at the moment of people pushing back because
12:07
Speaker 2: of the deficits. So let's take yesterday's price action as
12:10
Speaker 2: just a snapshot of where things are out. So we
12:13
Speaker 2: saw a big self and fixed income. And typically if
12:16
Speaker 2: this was EMSA and we saw moves like that and
12:19
Speaker 2: I was worried about the fiscal position of that country,
12:22
Speaker 2: we'd see the currency weakness too.
12:24
Speaker 3: But you didn't see that yesterday. You saw a lot
12:26
Speaker 3: of dollar strength.
12:26
Speaker 2: So I'm wondering, from your perspective outside of that, whether
12:29
Speaker 2: you are already seeing signs of pushback and whether you'd
12:32
Speaker 2: expect to see it pop up in the US dollar
12:33
Speaker 2: anytime soon.
12:34
Speaker 3: If it's all.
12:37
Speaker 7: So, I think the first thing people react to is
12:39
Speaker 7: you got a change in policy, tariffs, stronger dollar generally,
12:43
Speaker 7: and I think that's a market tends to knee jerk market.
12:45
Speaker 7: You usually can only focus on one thing at a time,
12:47
Speaker 7: and I think it was focused on that. I don't
12:50
Speaker 7: do a client meeting today. We're not The first or
12:52
Speaker 7: second question is about the debt. It isn't about the
12:54
Speaker 7: debt of the country. The deficits were running. I think
12:58
Speaker 7: this administration is going to have to this Congress is
13:00
Speaker 7: going to have to address there's too much debt coming do.
13:03
Speaker 7: If you said to me next year, like Lisa said,
13:05
Speaker 7: We're going to be laser focused on inflation. We're also
13:08
Speaker 7: going to be laser focused on auctions because we're issuing
13:12
Speaker 7: so much debt every single week. Every client wants to
13:16
Speaker 7: know and I think gets to that question of why
13:18
Speaker 7: people are buying real assets. How the thing about, by
13:19
Speaker 7: the way, equities are an operating leverage machine on GDP
13:24
Speaker 7: and car fank you think about what does well in
13:27
Speaker 7: this environment. Equities still do well. But I gosh, every
13:31
Speaker 7: client meeting I go to, people want to talk about
13:33
Speaker 7: the debt. And I think it is definitely going to
13:35
Speaker 7: become much much more of the regular dialogue in everything
13:40
Speaker 7: we do. Investor, by the way, not just financial investors,
13:43
Speaker 7: corporate CEOs, CFOs, how they think about cap x, R
13:47
Speaker 7: and D. I think it's going to be a big
13:48
Speaker 7: deal going forward.
13:49
Speaker 5: Can you just elaborate on that in terms of when
13:52
Speaker 5: we'll actually see it in a more dramatic fashion, because
13:55
Speaker 5: you can make a lot of arguments for why yilts
13:57
Speaker 5: have gone up, and frankly J.
13:58
Speaker 1: Powell said, I'm not going to parse out.
14:00
Speaker 5: What's what, but some of it could be deficits, some
14:02
Speaker 5: of it could be the political regime, some of it
14:04
Speaker 5: could be better than expected growth. I don't even know.
14:06
Speaker 5: I don't care it's going to stop anyway. At what
14:08
Speaker 5: point do you say this is real and this is
14:11
Speaker 5: actually a risk premium that's being put on for the
14:13
Speaker 5: first time.
14:14
Speaker 1: In a long time.
14:16
Speaker 7: Yeah, you know, we'd say a couple of things that,
14:19
Speaker 7: you know, Listen, it's hard to parse any individual movement
14:22
Speaker 7: that takes place in markets. But I think more and more,
14:25
Speaker 7: you know, by the way you look at what's happened
14:27
Speaker 7: to the credit markets. Spreads keep tightening, spreads keep tightening.
14:30
Speaker 7: You know, I've said this before. If you go through
14:33
Speaker 7: some of the companies today, high free cash flow, don't
14:35
Speaker 7: borrow on the front end of the curve, don't have
14:38
Speaker 7: any financing, don't have a maturity wall. I then think
14:40
Speaker 7: about the US government. We threaten a default every couple
14:43
Speaker 7: of years. We borrow at the front end. And the
14:45
Speaker 7: immense size of bill COUPONSI bill auctions we do every week,
14:50
Speaker 7: coupon auctions we do every week. Listen, I think it
14:53
Speaker 7: is you know, it's part of why every auction you
14:56
Speaker 7: got to watch, you know, is the particularly in the
14:58
Speaker 7: back end of the curve. Listen, I think there's going
15:00
Speaker 7: to continue to be a strong bid to you know.
15:03
Speaker 7: And by the way, part of why I like portfolios
15:05
Speaker 7: clip a lot of yield in the front end. Just
15:07
Speaker 7: keep clipping that yield, clipping that yield, you know, the
15:10
Speaker 7: back end. I think it's going to be a big
15:11
Speaker 7: focus going forward. Like you said, you know, we've never
15:14
Speaker 7: had I would argue in the US, it's not just
15:17
Speaker 7: the amount of debt, it's the debt service. We're talking
15:19
Speaker 7: about interest rates. We used to print treasury bills at
15:23
Speaker 7: zero percent, one percent, you know. Now we're printing huge
15:26
Speaker 7: size treasury bills every week at high level. So it's
15:28
Speaker 7: going to be it's going to be a big focus.
15:31
Speaker 7: And you know, is there one event listen, I think
15:33
Speaker 7: auctions are going to be are going to be worth watching,
15:35
Speaker 7: and I listen to the shape of the curve, you
15:37
Speaker 7: know what. I would say one last thing, and I
15:39
Speaker 7: think JPO was very clear and right. In this markets
15:42
Speaker 7: can be wrong a lot. You know, we had we
15:44
Speaker 7: priced two hard landings already this year. Markets can get
15:47
Speaker 7: crazy extreme one way or the other. But I think
15:49
Speaker 7: you've got to watch over time the premium we're paying
15:52
Speaker 7: in this country for the amount of debt that we're
15:54
Speaker 7: going to issue, what it means for the currency, and
15:56
Speaker 7: what it means, you know, for how much how much
15:58
Speaker 7: will people absorb, not justically but internationally.
16:01
Speaker 2: Rick, I've had a couple of whispers, and I'd love
16:03
Speaker 2: your response to this. From a couple of banks, they're
16:06
Speaker 2: anticipated that maybe credit trades through treasuries, investment grade US
16:10
Speaker 2: corporate credit trading through treasuries. I'd love your view on that.
16:15
Speaker 2: Is that possible because for some companies, we're not that
16:18
Speaker 2: far away. Do you think we could see that in
16:20
Speaker 2: the next twelve months.
16:23
Speaker 7: Sir Jonathan, I never thought if you go back a
16:25
Speaker 7: few years ago, I never thought. We've talked about it
16:27
Speaker 7: years ago. Remember we were funding companies a negative yield,
16:29
Speaker 7: Like I never thought that would happen. Do you remember that
16:31
Speaker 7: in Europe? Like we're lending company and I remember it
16:33
Speaker 7: explaining to my kids, like I'm lending money to the
16:35
Speaker 7: companies that negative I'm paying them to take my money.
16:37
Speaker 7: But then, you know, explaining why bons where they are
16:39
Speaker 7: starting to hard to explain anyway. So is it possible.
16:42
Speaker 7: It's definitely possible. You know, the supply demand dynamics are
16:45
Speaker 7: quite different, and it's definitely possible. I mean the spread
16:48
Speaker 7: tightening you're seeing across the board is pretty powerful. Listen,
16:53
Speaker 7: one thing, ultimately, taxing authority is a really big deal.
16:56
Speaker 7: And there's one thing that I think is usually important
16:58
Speaker 7: for the next couple of years. There's been a massive
17:02
Speaker 7: transfer of money from the public sector of the private Chector.
17:04
Speaker 7: The private sector has got I think the numbers two
17:06
Speaker 7: hundred and twenty trillion of net worth. The asset coverage
17:10
Speaker 7: in the United States is pretty darn good. How do
17:12
Speaker 7: you get at that asset coverage? How do you get
17:14
Speaker 7: at that net worth to send some of that money
17:16
Speaker 7: back to the government versus what they've transferred to the
17:19
Speaker 7: private sector. And that's going to be the evolution that
17:21
Speaker 7: I think this administration is going to have to navigate.
17:23
Speaker 6: John, your insight there is critical. At least thirty five
17:27
Speaker 6: years ago, I had the privilege of hearing John Templeton
17:30
Speaker 6: say the same idea the credit would trade through full
17:34
Speaker 6: faith and credit. Then it was unbelievable. Now it's unbelievable,
17:38
Speaker 6: but it's a critical insight.
17:40
Speaker 2: Yeah, but you heard what Rick said there, and it's
17:41
Speaker 2: really important. Through the pandemic, there was a massive transfer
17:45
Speaker 2: of money top and it was from the self righn
17:48
Speaker 2: to corporate America to individuals, the households, Which is why
17:51
Speaker 2: what we've seen ultimately because of policy coming out of
17:54
Speaker 2: the pandemic is the balance sheets the corporates are better.
17:57
Speaker 2: Balance sheets from households were rock solid. And what got weaker?
18:00
Speaker 2: Where is the leverage the sovereign? Now, Rick, you followed
18:03
Speaker 2: that up and said that ultimately that's going to have
18:06
Speaker 2: to be a source of revenue.
18:07
Speaker 3: But that's not the policy proposal.
18:09
Speaker 2: The policy proposal, as you know, is to drop corporate
18:11
Speaker 2: tax rates from twenty one to fifteen with conditions, which
18:14
Speaker 2: is domestic manufacturing. I get all of that, Rick, Are
18:17
Speaker 2: you basically saying that at some point we need to
18:19
Speaker 2: understand that that's what we need to do, even if
18:21
Speaker 2: it's not what we want to do. And Rick, for
18:23
Speaker 2: that to happen, you need guardrails, You need constraining forces,
18:25
Speaker 2: and I don't see any sign of that from many
18:27
Speaker 2: policy makers in Washington. And ultimately, it means it needs
18:30
Speaker 2: to come from the market. And the question is, Rick,
18:32
Speaker 2: it's the question we've asked for a decade plus. Will
18:34
Speaker 2: the market actually provide those forces? Will they constrain the
18:38
Speaker 2: hopes of fiscal policy? Makers the tax cut hopes from campaigning.
18:43
Speaker 2: Do you think the market will be a constraining factor
18:45
Speaker 2: or not?
18:48
Speaker 7: The answer is yes. Listen, I think policy generally doesn't react.
18:52
Speaker 7: You know, hopefully I'm wrong in this case, but generally
18:54
Speaker 7: policy doesn't react to the sharks right next to the boat.
18:57
Speaker 8: Yeah.
18:57
Speaker 7: And I think you know, the markets will usually and
19:00
Speaker 7: to anticipate things, and by the way, I often anticipate
19:02
Speaker 7: them too early or wrong. But I think the markets
19:06
Speaker 7: are going to be a great barometer for what policy
19:10
Speaker 7: needs to adjust to. So you know, I'm hoping it's
19:12
Speaker 7: not egregious in terms of how that manifests itself. And
19:15
Speaker 7: I will say one thing and we get debate tax policy,
19:17
Speaker 7: marginal tax rates. Listen, I think the US economy, there's
19:21
Speaker 7: only one way that you bring the debt down. You
19:23
Speaker 7: got to outrun it and nominal GDP. We have to grow.
19:26
Speaker 7: Economy's got to grow. There's a series of initiatives you
19:29
Speaker 7: can have. You can have fiscal spend as long as
19:31
Speaker 7: it's got velocity to it and that the economy is growing.
19:34
Speaker 7: And then the cost of the debt has to come down,
19:36
Speaker 7: and the shear size of the debt has to come down.
19:38
Speaker 7: And then we slowly bring the debt problem down in
19:41
Speaker 7: this country. But I think it has to be a
19:43
Speaker 7: whole series of initiatives and quite frankly, policy needs to
19:47
Speaker 7: create confidence of investors of the general populace that they're
19:52
Speaker 7: moving the boat in that direction. And by the way,
19:54
Speaker 7: confidence is hugely powerful. You can do a tremendous amount.
19:58
Speaker 7: Your comment or it's comment about emerging markets the one
20:01
Speaker 7: thing US has, and you look at the faith in
20:03
Speaker 7: the fat and the faith in the in the confidence
20:05
Speaker 7: that will ultimately do the right thing. But I think
20:08
Speaker 7: you think that's going to be really critical going forward.
20:10
Speaker 2: Rick, you're a money manager. Can we finish there on
20:13
Speaker 2: what you've been doing? Were selling bonds yesterday?
20:17
Speaker 7: No? The uh no, not yesterday. But you listen to me,
20:21
Speaker 7: you know, I would just say, if you know, listen
20:25
Speaker 7: there without getting specific in terms of things we're doing.
20:27
Speaker 7: You know, I think there was regulatory change, or I
20:29
Speaker 7: think there's potential regulatory change. The financials are interesting. I
20:33
Speaker 7: think fixed income products like mortgages are interesting. When you
20:37
Speaker 7: change the regulatory dynamic around banks and their ability to
20:40
Speaker 7: buy different things, so you know, those assets have become
20:43
Speaker 7: more interesting. Listen, I think equities are rightly moving in
20:47
Speaker 7: the direction they should move with with a series of
20:49
Speaker 7: initiatives that could stimulate growth here going forward. So you know,
20:54
Speaker 7: I like, I like parts of the equity market, and
20:57
Speaker 7: that's so that's been And then you know the other
20:59
Speaker 7: side of it is that you know something that I'm
21:00
Speaker 7: just going to keep persisting on the front to the
21:03
Speaker 7: belly of the curve, yielding assets, credit, securitized assets Europe
21:09
Speaker 7: where you buy credit, et cetera. Like, if you just
21:12
Speaker 7: keep clipping this yield it is I mean, even if
21:15
Speaker 7: rates move up somewhat, you're still able to build portfolios.
21:17
Speaker 7: We have the CTF bink you're still able to create
21:20
Speaker 7: this portfolio six and a half percent yield. That's pretty spectacular.
21:24
Speaker 7: With inflation running at two you can be two point
21:27
Speaker 7: three percent. So that's my key is like, just let's
21:30
Speaker 7: keep buying this yield and hold this yield in the
21:32
Speaker 7: front of the belly and then let people take the
21:34
Speaker 7: risk further out the yield curve.
21:36
Speaker 3: Rick, this was awesome.
21:37
Speaker 2: It's going to catch have this appreciate it, Rick Rater
21:39
Speaker 2: with black Rock, when do you begin with that conversation?
21:42
Speaker 3: So let's at chew over.
21:43
Speaker 5: Yeah, Well, First of all, he was talking about inflation
21:45
Speaker 5: possibly being sticky even before what it transpired in Washington, DC.
21:50
Speaker 5: I love his response to you about were you selling bonds?
21:55
Speaker 3: We like Morgatis well on banks.
21:57
Speaker 1: We like banks, we like stocks.
21:58
Speaker 5: But this to me is really the key to pay,
22:00
Speaker 5: which is how much can you buy the front end
22:03
Speaker 5: clip the coupon? Is this making cash great again essentially
22:06
Speaker 5: for people who want to sort of get some income
22:09
Speaker 5: on their margins but then go into asset classes that
22:11
Speaker 5: are going to be less vulnerable to a potential inflationary shops.
22:14
Speaker 2: Just a guess, and I haven't hunt directly. I'm not
22:16
Speaker 2: sure if the Trump administration is looking to make cash
22:18
Speaker 2: great again, but we'll see.
22:20
Speaker 3: I guess maybe that is a go.
22:21
Speaker 5: Well, maybe it's make crypto gritty, And actually I think
22:23
Speaker 5: that it's make dollar less great so that it's weaker,
22:26
Speaker 5: although it seems like that's somewhat contradictor.
22:28
Speaker 3: Let's get to Mima kay.
22:29
Speaker 2: My mckaby was in that room in that news conference,
22:31
Speaker 2: and Mike McKay at some point there was some tension
22:33
Speaker 2: with Sham and Pow.
22:34
Speaker 9: Were you surprised, No, I don't think anybody was surprised
22:38
Speaker 9: we got about as much out of him as we
22:40
Speaker 9: thought we would get. On the issue of Donald Trump
22:43
Speaker 9: and the elections, he just answered with one word and
22:46
Speaker 9: then one sentence. No, he's not going to resign if asked,
22:50
Speaker 9: and it's not permitted by law for the president to
22:55
Speaker 9: demote anybody on the FED. And there wasn't as many
22:59
Speaker 9: questions along those lines as maybe we thought there would
23:01
Speaker 9: be because he was so definitive on those two answers.
23:05
Speaker 9: I think what you got today was two different news
23:09
Speaker 9: conference messages. One was to the people inside the beltwigh
23:12
Speaker 9: here in Washington about his relationship with Donald Trump, and
23:16
Speaker 9: the other is to the markets. And that Rick picked
23:18
Speaker 9: up on this very well. The FED does not know
23:21
Speaker 9: what it's going to do. There are a lot of
23:23
Speaker 9: cross currents coming in twenty twenty five.
23:25
Speaker 3: So if you think that the FED.
23:28
Speaker 9: Is on some sort of path because of the last
23:30
Speaker 9: sep in the last dot plot, you're going to probably
23:33
Speaker 9: be wrong. The FED has a lot to keep an
23:35
Speaker 9: eye on, not just with the president, but with everything
23:38
Speaker 9: else going on in the world.
23:39
Speaker 5: With respect to the message to the market, he was
23:42
Speaker 5: asked about the fact that the Federal moved the reference
23:44
Speaker 5: to gaining confidence on inflation, and he basically said, there's
23:47
Speaker 5: nothing to see here. It was just a semantic issue
23:50
Speaker 5: that we already said that and we're not going to
23:52
Speaker 5: repeat it.
23:52
Speaker 1: Do you buy that?
23:54
Speaker 3: I do?
23:55
Speaker 9: And that was the conclusion that not only I came
23:57
Speaker 9: to when I read this statement in the lock up,
23:59
Speaker 9: but all the other reporters basically came to as well,
24:02
Speaker 9: We've seen this before. When they start changing policy, they
24:06
Speaker 9: give a rationale for that, we're moving in the direction
24:09
Speaker 9: or we're getting close to where we need to be,
24:11
Speaker 9: and then after that they're already there, so they don't
24:13
Speaker 9: need to keep repeating that. They just took it out,
24:16
Speaker 9: as he said, for clarity.
24:18
Speaker 2: Mike McKay, I'm the latest in that news conference. Might
24:21
Speaker 2: we'll have a longer conversation tomorrow when you get back
24:23
Speaker 2: to New York City. What a news conference with chem
24:26
Speaker 2: and Pound, Tom Constant with us now of Miszoo.
24:29
Speaker 3: Tom, welcome to the program.
24:30
Speaker 2: We'll just give you the opportunity to share your initial
24:32
Speaker 2: takes from that news conference and then we'll get into it.
24:33
Speaker 3: What's that for you?
24:36
Speaker 10: It was pretty much as expected in the sense that
24:39
Speaker 10: he's still committing to the easing cycle. I think this
24:42
Speaker 10: sort of new news might be, where might they pause
24:46
Speaker 10: in the context of the new policy regime that we'll
24:49
Speaker 10: be getting with a change in the administration.
24:51
Speaker 8: But the idea is, I think.
24:52
Speaker 10: There are you know, are subjects of the data really shocking.
24:55
Speaker 10: They're kind of on an auto pilot to get rates
24:57
Speaker 10: down to around four percent and the early part of
24:59
Speaker 10: that next year, and then we take it from there.
25:01
Speaker 10: If they have to respond to policies that adjust the
25:04
Speaker 10: balance of risks, for example, then you know they'll.
25:07
Speaker 8: They'll they'll figure that out then.
25:09
Speaker 10: But the election itself isn't really affecting what we thought
25:12
Speaker 10: any way they were going to do.
25:13
Speaker 6: Donickive's the theme of a Trump administration has growth at
25:17
Speaker 6: any cost, pushing against all this is going to be
25:20
Speaker 6: a nominal GDP left When you sum things together with
25:24
Speaker 6: Steve Rashudo, do you just assume a run rate five
25:28
Speaker 6: percent nominal GDP or can I even look for an
25:31
Speaker 6: animal spirit towards six percent?
25:35
Speaker 10: Well, I definitely think there's a there's an animal spirit
25:37
Speaker 10: sing out there. That's pretty interesting. I Mean, the the
25:40
Speaker 10: only caveat is when we went through tarifs before, you know,
25:44
Speaker 10: when they started to sort of hit it wasn't clear
25:46
Speaker 10: in twenty nineteen that the animal spirits were exactly kicking in,
25:49
Speaker 10: and the fact had to get into extra easing mode
25:52
Speaker 10: by then. So I think there is certainly some definitely
25:54
Speaker 10: uncertainty around the whole thing right now. Though you know
25:57
Speaker 10: the issue is a lad market. You know it's not great.
26:00
Speaker 10: I mean, employment growth is sort of stagnating. I would
26:03
Speaker 10: say the economy has been bifurcated. You've had some very
26:07
Speaker 10: strong sectors, some weak sectors, and you know, if it
26:10
Speaker 10: wasn't for the latest, you know that the election, we'd
26:13
Speaker 10: still be in the mode whereby the FED would be
26:15
Speaker 10: preemptively trying to cut rates quite quickly to stop unemployment
26:19
Speaker 10: going up. So we can't forget that, and we're going
26:22
Speaker 10: to have a few more months whereby, if animal spirits
26:24
Speaker 10: don't kick up, you might still well see unemployment rising
26:29
Speaker 10: above where the FED expects it to be. And therefore,
26:32
Speaker 10: you know, some disappointment. I mean, growth itself is a
26:34
Speaker 10: bit of a lagging indicator, and it really reflects the
26:37
Speaker 10: average of the economy, doesn't reflect the underlying weaknesses and
26:40
Speaker 10: some of the sectors.
26:41
Speaker 6: If we expect the unexpected is a year go through
26:44
Speaker 6: parody or dare I say one on three maybe and
26:46
Speaker 6: you answer one sixty will signal a new resilient and
26:50
Speaker 6: stronger dollar.
26:52
Speaker 8: Well, I mean it really should do.
26:53
Speaker 10: I mean, you know, if, especially if you're going to
26:55
Speaker 10: start pricing for the tariff. So again, what we don't
26:58
Speaker 10: know is whether the tariff threat it's just a threat,
27:00
Speaker 10: whether it's going to be enacted. If you are going
27:02
Speaker 10: to enact taris, then you know there is obviously the
27:04
Speaker 10: risk the dollar is going to basically go up, and
27:07
Speaker 10: that's a big part of that. And then you get
27:10
Speaker 10: into the you know, the instance of the tariff is
27:12
Speaker 10: obviously falling onto the exporters. The consumer is going to
27:16
Speaker 10: be somewhat protected. You know, that's where we might end
27:18
Speaker 10: up getting. But you know, Trump is Trump, and so
27:21
Speaker 10: you know it could well be just a big bargaining
27:23
Speaker 10: chip and we might not get the full force of
27:25
Speaker 10: the tariffs. I would say one thing about tarast so
27:27
Speaker 10: is we do actually need them if he's genuine about
27:29
Speaker 10: his tax cuts and the modification to the tax law,
27:34
Speaker 10: and next year, you do need the tariffs to actually
27:36
Speaker 10: pay for that. So you know, I'm guessing we're going
27:38
Speaker 10: to get the tariffs in the.
27:39
Speaker 5: End, I'm just putting the policy aside. And there have
27:42
Speaker 5: been other changes that have happened in the past three
27:44
Speaker 5: four weeks that also were addressed here. Yields have gone
27:48
Speaker 5: up because of economic surprises to the upside, Inflation on
27:51
Speaker 5: the margins has been slightly stickier. There have been questions
27:54
Speaker 5: about why long term yals are so high, and frankly,
27:57
Speaker 5: my risk assets don't care because there are basically treating
28:00
Speaker 5: it like it's for the right reason. At what point
28:04
Speaker 5: do these yields force the FED to take notice in
28:06
Speaker 5: a way that they don't have to now they can
28:08
Speaker 5: just dismiss it as a blit.
28:10
Speaker 1: Potentially, well, I.
28:12
Speaker 10: Do think a lot of the moving yields is obviously
28:15
Speaker 10: being driven by term premium, what we call term premium,
28:18
Speaker 10: and they're good reasons for why term premium is rising.
28:21
Speaker 10: One of them is taris, but another one is obviously
28:24
Speaker 10: the fiscal supply, So that means you kind of get
28:26
Speaker 10: this sort of steepening pressure through the yield market, and
28:30
Speaker 10: it's obviously consistent with the deficit concerns that are being
28:35
Speaker 10: coming out of the new policy regime forthcoming. In terms
28:40
Speaker 10: of how that affects risk ass is really a balancing act.
28:43
Speaker 10: If you have term premium going up normally, all else equal,
28:47
Speaker 10: risk ass would suffer. However, if on the other side
28:50
Speaker 10: of that, you're getting a sort of higher level of growth,
28:52
Speaker 10: let's say because of the fiscal stimulus coming through, then
28:56
Speaker 10: that really does kind of easily overwhelm the impact of
28:59
Speaker 10: term premium. So premium has been very low, so to
29:02
Speaker 10: expect it to sort of go up is not unreasonable.
29:04
Speaker 10: It's almost if you like normalizing by some models we
29:07
Speaker 10: look at, and if you can take a quid pro
29:10
Speaker 10: quo and say, well, look, we're going to have higher
29:12
Speaker 10: growth coming out of all of this, then there's no
29:15
Speaker 10: reason for risk asses to perform badly. And I think
29:18
Speaker 10: that's kind of where we are. So we're in the
29:19
Speaker 10: sort of, you know, best of all possible worlds in
29:22
Speaker 10: the sense where risk acids are okay.
29:24
Speaker 8: And yes, long term yields are.
29:26
Speaker 10: Rising, but they're not rising so much that they're going
29:29
Speaker 10: to unravel the story for riskases. And bear in mind
29:32
Speaker 10: the FED is in restrictive mode, so by the fact
29:36
Speaker 10: that they can reduce their short term rates, it will
29:38
Speaker 10: help anchor the curve lower. So you may well have
29:41
Speaker 10: higher term premium, but if short rates are still falling
29:43
Speaker 10: at the other end, then the whole curve is somewhat
29:45
Speaker 10: getting anchored, which is actually quite good news, and it
29:49
Speaker 10: does avoid one.
29:49
Speaker 8: Of the problems we had last year.
29:51
Speaker 10: If you recall, I used to I call it the
29:53
Speaker 10: Liz Trust moment, where when if the FED threatens higher
29:56
Speaker 10: yields at the front end and you have a term
29:58
Speaker 10: premium a rising in terms of hurting the long end,
30:01
Speaker 10: that's really bad news for risk assets because that kind
30:04
Speaker 10: of unravels, you know, both sides of the equation, so
30:07
Speaker 10: to speak.
30:08
Speaker 5: You said a number of things there, or one aspect
30:10
Speaker 5: as you said that the FED is clearly in restrictive
30:13
Speaker 5: territory at this point and it will be easing J.
30:17
Speaker 10: Tup.
30:17
Speaker 5: Powell actually maybe casts a little bit of question around
30:21
Speaker 5: just how restrictive they were, saying that they're trying to
30:24
Speaker 5: get down to a place and then adjust that they
30:25
Speaker 5: can figure out what that neutral rate is. Do you
30:28
Speaker 5: think that he was opening the door to pausing in
30:31
Speaker 5: December to not necessarily cutting more for the rest of
30:34
Speaker 5: this year.
30:35
Speaker 10: I for a feel that they're pretty much an auto
30:38
Speaker 10: pilot for a December cut. I definitely think he's opening
30:40
Speaker 10: the door to a pause, let's say within the next
30:43
Speaker 10: six months. So they're not going to sort of run
30:45
Speaker 10: all the way down to three percent, which is where
30:47
Speaker 10: they have that neutral rate, but they could definitely pause
30:50
Speaker 10: around four percent. Pausing around four and a half is
30:52
Speaker 10: a little premature, particularly since they haven't even seen wouldn't
30:55
Speaker 10: have seen the new administration come in, So you know,
30:58
Speaker 10: to my mind, you know, not yes is the pause,
31:01
Speaker 10: and therefore they can sort of plow through, you know,
31:03
Speaker 10: into a Q one easing and then pause, pause. Then
31:06
Speaker 10: in terms of neutral and where it is, obviously no
31:08
Speaker 10: one really knows where it is, but you know, we've
31:11
Speaker 10: done some interesting work to suggest that if interest rates
31:14
Speaker 10: don't come down, employment in certain sectors will continue to
31:17
Speaker 10: slow and go negative. And that's this kind of preemptive
31:21
Speaker 10: aspect of why they want to bring down rates, and
31:24
Speaker 10: that's kind of where, you know, why I feel that
31:26
Speaker 10: neutral is not here. It's probably not a four percent
31:29
Speaker 10: and it's probably close to three percent, but we'll see
31:31
Speaker 10: in the end.
31:32
Speaker 8: So what a.
31:32
Speaker 6: Constant and Rashido say about a run rate of non
31:35
Speaker 6: firm payrolls? I mean, can you get non firm payrolls
31:38
Speaker 6: permanent under one hundred thousand, or can you even go
31:41
Speaker 6: to a negative statistic?
31:43
Speaker 10: Well, I think, I mean clearly you can, and I
31:46
Speaker 10: think that's that's the problem. I mean, Powell himself said,
31:48
Speaker 10: the lad market has eased enough, you can't. You don't
31:51
Speaker 10: really want to have payrolls running one hundred thousand or so.
31:54
Speaker 10: And the reason or less the reason is because layoffs
31:58
Speaker 10: are still very low. The layoff rate is still running
32:01
Speaker 10: below one point two percent of the employed workforce, the idea.
32:05
Speaker 10: Before COVID, the layoff rate was in a range of
32:07
Speaker 10: one point two to one point four percent. So adjusting
32:10
Speaker 10: layoffs higher, which will be reflected, for example, in the
32:13
Speaker 10: claims data going higher and normalizing if you like, with
32:16
Speaker 10: employment growth down in around one hundred thousand or so,
32:20
Speaker 10: you will see unemployment rate rising well above the FED forecast.
32:24
Speaker 10: So you have to have basically pay rolls accelerating or
32:28
Speaker 10: somehow cross your fingers and hope layoffs never actually go up.
32:32
Speaker 8: And we're in a new world where companies just won't
32:34
Speaker 8: fire people.
32:35
Speaker 10: And in a way, that comes back to the animal spirits,
32:38
Speaker 10: animal spirits to either not lay off or animal spirits
32:41
Speaker 10: to hire more people and get pay rolls accelerating. Just
32:45
Speaker 10: keep the unemployment rates where it is in line with
32:48
Speaker 10: where the FED would like to see it in the
32:50
Speaker 10: medium term.
32:50
Speaker 2: Heydan, this was great. It's going to hear from you, sir.
32:52
Speaker 2: It's been too long. Don constant there of miszoo on
32:55
Speaker 2: a federal reserve. We'll do this all over again in December.
32:58
Speaker 2: But the key one, I think circle it on the
32:59
Speaker 2: calendar for twenty twenty five March nineteenth March nineteenth, Spring
33:03
Speaker 2: of twenty twenty five when they have to produce some
33:05
Speaker 2: new forecasts with some new policies in mind.
33:08
Speaker 5: Maybe especially as the third finishes out the first one
33:11
Speaker 5: hundred DS. It raises this real question how many of
33:13
Speaker 5: the policy implementations have really affected the trajectory of the economy.
33:18
Speaker 5: And they can't use this as a punt. We'll see
33:20
Speaker 5: what we see, they'll have seen, and they'll have to react.
33:22
Speaker 2: The Fed is reactionary, The market is anticipatory. The Fed
33:26
Speaker 2: is reacting to the data. This market is anticipating changes
33:29
Speaker 2: to policy, and a lot of that right now hinges
33:32
Speaker 2: on what happens with the House and whether we get
33:34
Speaker 2: this GOP suite from New York City that does it
33:36
Speaker 2: for us. Thank you very much, reducing Bloomberg TV and
33:39
Speaker 2: radio