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Jay Powell, Pride, And Public Companies (Podcast) · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
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Speaker 1: my co host Matt Miller. Every business day, we bring
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
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Speaker 1: on Apple podcast or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast. Let's check in with
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Speaker 1: Jennifer Lee, senior economist and Managing director of BEMO Capital Markets.
0:25
Speaker 1: Good friend of the show. Uh, Jennifer, what did you
0:28
Speaker 1: hear or did you hear anything different from FED Chairman
0:32
Speaker 1: j Pale as he uh testified yesterday in front the
0:35
Speaker 1: Senate and today in front of the House. Yesterday people
0:38
Speaker 1: were saying maybe he wasn't as hawkish as we expected.
0:40
Speaker 1: And this morning the big headline was is going to
0:43
Speaker 1: be very challenging to hit a soft landing. Yeah, that
0:45
Speaker 1: was the headline. So, Jennifer, what did you take away?
0:48
Speaker 1: Good morning everyone. So I thought he was again I
0:51
Speaker 1: think said his last few game He's been very clear
0:54
Speaker 1: and I'm giving him an a for his communications recently.
0:57
Speaker 1: But I thought the big takeaway was the fact that
0:59
Speaker 1: he did not dismiss the possibility of a hundred basis
1:02
Speaker 1: point right, like, um, you know, he said, and this
1:04
Speaker 1: is a smart thing to do, like I will never
1:06
Speaker 1: take anything off the table for any and all purposes.
1:09
Speaker 1: And that's a wise thing to say, because you can't
1:11
Speaker 1: dismiss anything. So I don't lessons learned by the way
1:14
Speaker 1: Jennifer right, because remember a couple of meetings ago he said, oh,
1:17
Speaker 1: seventy now we're not going to do that. Yes, exactly exactly.
1:21
Speaker 1: That was like, yeah, it was one of the first
1:22
Speaker 1: thing cause I thought about when the market rallied, um,
1:25
Speaker 1: you know last week when he said that, they said, oh,
1:27
Speaker 1: you don't he's uh, he's dismissing or he's saying that
1:29
Speaker 1: the semi five basis points is not comm and I
1:31
Speaker 1: can't remember exact words, but I was thinking a hold it.
1:33
Speaker 1: Back in May he also sort of dismissed the semi
1:36
Speaker 1: five peoper in markets rally. Then look what happened. So
1:38
Speaker 1: I don't think anything can be taken off the table,
1:40
Speaker 1: as he said, And you know, I'm I don't think
1:42
Speaker 1: the hunter basis points it's going to be a thing.
1:45
Speaker 1: It's going to become a thing. But the fact that
1:47
Speaker 1: he's just or that the entire committee is not putting
1:50
Speaker 1: anything off the table, is seeks volumes to their commitment, um,
1:54
Speaker 1: you know, to bring insulation back. It's great that they
1:57
Speaker 1: had that commitment. Obviously, inflation is the bay of our existence,
2:01
Speaker 1: as um UH President Biden said on one of the
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Speaker 1: evening talk shows. But can he really do that much
2:08
Speaker 1: about it, Jennifer, I mean, um, you know, in all
2:13
Speaker 1: of your economics training, Um, what does monetary policy do
2:18
Speaker 1: to supply chain problems, supply side problems? Absolutely nothing? Um, Um.
2:26
Speaker 1: You know, it's a it's a blunt monetary it's a
2:29
Speaker 1: blunt instrument, and it's you know, I'm sarting to hammer
2:32
Speaker 1: down on demand and we're already seeing the effects of that.
2:34
Speaker 1: But you know, as he has said, you know, um
2:36
Speaker 1: very very often that they cannot do anything to make
2:39
Speaker 1: those you know, widgets come off of the um, off
2:42
Speaker 1: of the conveyor belt even faster. Um. You know, there
2:45
Speaker 1: are all these other supply issues that are contributing to
2:48
Speaker 1: UM to the inflation, and that part they cannot um control.
2:53
Speaker 1: But if they control the amount of demand that it's
2:55
Speaker 1: out there, that's you know, that's pushing on the supply chains.
2:58
Speaker 1: You know, then they will have I have done their job,
3:01
Speaker 1: which is again cooling demanded, and it's starting. We're starting
3:04
Speaker 1: to see that already. All right, Jennifer, I get asked you, Hannah,
3:06
Speaker 1: what's your recession outlook? Do you have a consent or
3:11
Speaker 1: a feel for whether this economy will roll into a recession?
3:15
Speaker 1: And if so, how deep, how shallow all that kind
3:17
Speaker 1: of stuff. I don't know if you heard me, Jennifer,
3:19
Speaker 1: but this morning we heard from George Buckley over Numura.
3:21
Speaker 1: He thinks we're going to have five quarters of back
3:24
Speaker 1: to back in traction starting in Q four. I heard you. Holy,
3:29
Speaker 1: that's that's quite That's an outlier, right, he's an out Yeah,
3:32
Speaker 1: it's it's quite headline catching. You know, we've thought we've
3:35
Speaker 1: actually been trimming our our growth O. Look, we've got
3:38
Speaker 1: we chopped next year down to one percent. We originally
3:40
Speaker 1: had one and a half percent of the last move
3:42
Speaker 1: But we do not have your traditional you know, back
3:45
Speaker 1: to back GDP negative GDP readings. But we do have
3:48
Speaker 1: growth grinding slower in the second half of the year.
3:50
Speaker 1: The first half is you know, pretty decent, notwithstanding that
3:53
Speaker 1: one and a half percent dropping. That's because of again,
3:55
Speaker 1: um sort of in the Q one that was because
3:57
Speaker 1: of importance and in inventories. But this and half we
4:00
Speaker 1: have slowly grinding um slower into into the turn of
4:04
Speaker 1: next year, so you know, almost like barely zero percent
4:07
Speaker 1: growth in Q four and Q one for example, So
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Speaker 1: not an official you know, again negative back to back
4:12
Speaker 1: reading for GDP, but enough to have growth grind down
4:16
Speaker 1: to about one percent next year. Jennifer, what's your view
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Speaker 1: of the consumer? And Matt and I were just talking
4:20
Speaker 1: about a story on the Bloomberg terminal. Dard And Restaurants
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Speaker 1: reported some better than expected results, their same store sales
4:25
Speaker 1: at their restaurants up almost in the quarter ending in May.
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Speaker 1: That kind of surprised me given some of the inflationary pressures.
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Speaker 1: How do you what do you how do you think
4:33
Speaker 1: about the consumer here? I think you know I I
4:37
Speaker 1: we say this all the time. You know, you can
4:39
Speaker 1: never ever underestimate the US consumer. Obviously, they're under pressure
4:43
Speaker 1: from these higher prices, from record gas prices at the
4:46
Speaker 1: pump um At the same time, the fact that the
4:48
Speaker 1: jawn market remains very tight, the fact that people are
4:51
Speaker 1: still getting a regular paycheck, which I think speaks volumes
4:54
Speaker 1: for all of this, and then they still have, you know,
4:56
Speaker 1: a little nice tidy pile of savings that they can
4:59
Speaker 1: fall back on. Um, hopefully they're just going to keep
5:01
Speaker 1: it there, I think, just to you know, just to
5:03
Speaker 1: make sure everything is okay. But you know, consumers are
5:05
Speaker 1: still dining out. You know, you're talking earlier about Old
5:07
Speaker 1: Garden for example. You know the fact that they are
5:09
Speaker 1: still dining out. You're still um buying sporting goods for examples. UM.
5:13
Speaker 1: I think in the last retail sales report, I think
5:15
Speaker 1: speaks volumes that you know, the consumer, you can you
5:17
Speaker 1: cannot write them off just yet. What about obviously there's
5:20
Speaker 1: gonna be What about the job situation. I mean people
5:23
Speaker 1: who were looking for jobs and they were being picky,
5:26
Speaker 1: is it time for them to uh, you know settle, settle?
5:30
Speaker 1: Or people who wanted to sell a house but they
5:33
Speaker 1: were kind of on the fence do it now? I
5:36
Speaker 1: would say, in terms of the job for the for
5:38
Speaker 1: the job market, I mean some you're already seeing you know,
5:41
Speaker 1: initial claims picking up already on a four week moving
5:43
Speaker 1: average basis, So the job market will not be as
5:47
Speaker 1: tight as a that's is already starting to ease up
5:49
Speaker 1: a bit. And you know I've been using this example.
5:52
Speaker 1: If you are a company that has been looking for
5:54
Speaker 1: let's just say you know ten told people and you've
5:56
Speaker 1: been looking for a long long time and you still
5:58
Speaker 1: can't find anyone. At some point you're gonna think, maybe
6:00
Speaker 1: we don't need all those people. Maybe we can just
6:02
Speaker 1: do with what we have, Especially with demanding starting to
6:05
Speaker 1: ease up a bit, we don't we don't need to
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Speaker 1: hire as many. So if you do have several offers
6:09
Speaker 1: out there, I would say, take all right, Jennifer. Maybe
6:12
Speaker 1: some of our listeners don't know that BEMO stands for
6:15
Speaker 1: a Bank of Montreal. Give us a sense of how
6:18
Speaker 1: are things up? Is it Ontario? Bank of Montreal Ontario? No,
6:23
Speaker 1: that's back of Montreal. Yeah, the MO is just for Montreal. Yes,
6:29
Speaker 1: because Montreal is not in Ontario. That's correct. Quebec very
6:33
Speaker 1: good talk to us about. Just give us a sense
6:35
Speaker 1: how are things in Canada the days? How's the economy,
6:37
Speaker 1: how's the COVID, how are how's the consumer? How are
6:40
Speaker 1: things to our good friends up north? So we are
6:44
Speaker 1: we're similar to what's happening in the US, but our
6:47
Speaker 1: our our lockdowns lasted longer, and we're definitely more prevasive,
6:51
Speaker 1: pervasive than they were in the US. So because we
6:53
Speaker 1: opened up a lot later, well, we had a stronger
6:56
Speaker 1: start to the year UM and we're still seeing some
6:59
Speaker 1: some pretty decent numbers up until like up until the
7:02
Speaker 1: second quarter, but we also see things UM cooling down
7:06
Speaker 1: in the second half of the year UM into early
7:08
Speaker 1: next year as the banker Canda starts to raise rates UM.
7:12
Speaker 1: You know, we almost a lockstep with with with the US.
7:14
Speaker 1: I mean, after the semi five basis point right high
7:17
Speaker 1: for the Fed last week and then at the strong
7:18
Speaker 1: signal that they're going to do it again in July,
7:21
Speaker 1: we also raised our our call for the bank to
7:23
Speaker 1: go seventy five basis points in July. So, you know,
7:25
Speaker 1: the same thing high prices. You know, we just got
7:28
Speaker 1: a very strong inflation report UM yesterday at seven points
7:31
Speaker 1: seven percent UM. Again there is it's a similar story
7:35
Speaker 1: around the world where inflation is that decade highs UM
7:38
Speaker 1: or multi decade highs I guess I should say, and
7:40
Speaker 1: central banks that are continuing to um to titan and
7:44
Speaker 1: tighten sharply. And Jennifer, one of the things I think
7:47
Speaker 1: I understand about the Canadian economy, the Canadian consumers, the
7:50
Speaker 1: housing home is a bigger part of the personal asset.
7:54
Speaker 1: Give us a sense of kind of how the housing
7:56
Speaker 1: market is there and how people think about that. So
8:00
Speaker 1: the housing market was one of the biggest drivers of
8:02
Speaker 1: our of our strong growth, just given years and years
8:06
Speaker 1: of super low interest rates and sometimes this this concept
8:10
Speaker 1: that you know that housing has nowhere to go up,
8:13
Speaker 1: and that's you know, clearly not true. Um. So you
8:16
Speaker 1: know now that we've got central banks of the Bank
8:18
Speaker 1: Accunta tightening rates, warning that there's that they're going to
8:21
Speaker 1: be a lot higher, and you know, there is fear
8:23
Speaker 1: that the in that the housing market is going to
8:27
Speaker 1: to be in pain because of that, and it's already
8:29
Speaker 1: starting to drop considerably. And of course the pandemic didn't
8:33
Speaker 1: help with everyone sort of moving moving out of the
8:35
Speaker 1: downtown core. I'm just speaking about Toronto right now, moving
8:37
Speaker 1: out to the bourbs and you know, getting more house
8:40
Speaker 1: for your money, and uh, you know, so that also
8:42
Speaker 1: added to the strong demand for housing. But that's starting
8:45
Speaker 1: to cool significantly already. All right, Jennifer Lee, thank you
8:50
Speaker 1: so much for joining is always appreciate getting your thoughts
8:53
Speaker 1: about the global economy and the Canadian economy. As well.
8:56
Speaker 1: Jennifer Leasing, economist managing director for PIMO Capital, Mark gets
9:04
Speaker 1: the Supreme Court has struck down, as we just reported,
9:07
Speaker 1: the New York gun carrying restrictions. New York is famously
9:11
Speaker 1: or infamously depending on how you look at it, strict
9:14
Speaker 1: about concealed carry licenses and handing them out. You can,
9:17
Speaker 1: of course get a license for a handgun, but you
9:21
Speaker 1: would normally have to keep it in your home, certainly
9:23
Speaker 1: in New York City, certainly in Westchester County, and it's
9:27
Speaker 1: very difficult to carry it outside your home. But the
9:29
Speaker 1: Supreme Court has avoided that and established your right to
9:34
Speaker 1: bear arms any place other than just in your house.
9:38
Speaker 1: Just Justice Thomas wrote the majority opinion and the ruling
9:43
Speaker 1: was six to three. So um Briar so to Mayor
9:48
Speaker 1: and Kagan dissented in the case. There the three and
9:52
Speaker 1: this is one of the big cases that we've been
9:54
Speaker 1: waiting for. Um. June Grasso is here in the studio
9:58
Speaker 1: with us to to give the background on this case
10:01
Speaker 1: and tell us what it means. So June, well, you've
10:04
Speaker 1: done pretty well so far. Matt uh Well, the background
10:07
Speaker 1: on this cases we were we've been expecting this case
10:10
Speaker 1: to be decided in this way since the oral arguments,
10:14
Speaker 1: because it was pretty clear that the conservative justices and
10:17
Speaker 1: you mentioned it's six to three down audiological lines, the
10:20
Speaker 1: conservative justices saying that there is this right to carry
10:24
Speaker 1: and that New York is it's it's law, which is
10:28
Speaker 1: very restrictive, as you mentioned, is unconstitutional. The three justices
10:33
Speaker 1: in dissent where the liberal justices. So the question is,
10:37
Speaker 1: and I haven't had a chance to read through this yet,
10:40
Speaker 1: but the question is just how far the court went
10:43
Speaker 1: in this, whether they say that all laws like New
10:46
Speaker 1: York's law are or whether or whether or whether there's
10:50
Speaker 1: there are certain restrictions for examples, you know, special areas
10:53
Speaker 1: where you can't carry guns. Um, it's Justice Thomas has
10:58
Speaker 1: been a Second amend an advocate and not that's putting
11:02
Speaker 1: it mildly for years and the favor of the Constitution right, well,
11:06
Speaker 1: they all say that the that the Second Amendment allows
11:10
Speaker 1: you to turn differently, right exactly. I mean up until
11:13
Speaker 1: this point. This is the first gun law gun decision
11:17
Speaker 1: in a decade. So up until this point in a
11:20
Speaker 1: decision written by Justice Scalia, very conservative. Um, you could carry,
11:26
Speaker 1: you could have a gun in the home, but this
11:28
Speaker 1: takes it another step, a big step, by the way.
11:31
Speaker 1: Not to be silly, June, but are there justices on
11:34
Speaker 1: the Supreme Court who believe the Second Amendment should be repealed?
11:38
Speaker 1: Are there any of those dissenters you think who don't
11:41
Speaker 1: believe Americans should have the right to bear arms? Well,
11:44
Speaker 1: you know, I think they all. First of all, you
11:46
Speaker 1: can't repeal this. To take a constitutional amendment away would
11:50
Speaker 1: be it's never been done, my dad, it could be done, um,
11:54
Speaker 1: because you need to do so many things. But so
11:57
Speaker 1: but I think they all accept the fact in their
12:01
Speaker 1: heart of hearts, whether they believe that. I mean, there
12:03
Speaker 1: are many many scholars who don't believe that the Second
12:06
Speaker 1: Amendment goes in the direction that Heller has put it,
12:10
Speaker 1: that it means that everyone can has a right to
12:13
Speaker 1: carry a gun or to have a gun in their home.
12:15
Speaker 1: I mean, there are many many scholars who look at
12:17
Speaker 1: the Second Amendment and say that's not what this amendment meant,
12:21
Speaker 1: and that the justices have read into it over the years.
12:24
Speaker 1: But I think that everyone at this point accepts the
12:27
Speaker 1: fact that the Second Amendment allows you to have a
12:30
Speaker 1: gun in the house. Well, and certainly at the time
12:32
Speaker 1: it was written everyone had a gun in the house. Well,
12:36
Speaker 1: but it was. We don't want to get into a
12:38
Speaker 1: historical argument about it. But no, there are I mean,
12:41
Speaker 1: there are many many scholars of the Second Amendment who
12:43
Speaker 1: don't believe that it was meant to be as it
12:46
Speaker 1: is today. And there's a lot of difference between you know,
12:49
Speaker 1: the militia and having a gun for of course, protect
12:51
Speaker 1: your And of course there are many, uh, scholars and
12:56
Speaker 1: justices who see the Constitution as a living document field
13:00
Speaker 1: that it should change with the times. And then there
13:02
Speaker 1: are the originalists who or what do you call them?
13:04
Speaker 1: The fundamentalists? Who? Who? Originalists? Sexualists exactly? Who? Who? Who
13:09
Speaker 1: want to really stick to the words on the paper? Um,
13:12
Speaker 1: in terms of what New York can do about this,
13:14
Speaker 1: because I know that at least at the state level,
13:16
Speaker 1: and I think I've heard Mayor Adams say on the
13:18
Speaker 1: city level as well, UM, legislators were preparing for this
13:23
Speaker 1: eventuality and trying to figure out ways that they could
13:28
Speaker 1: still limit, um, the amount of uh, you know, guns
13:33
Speaker 1: in circulation here while adhering to the decision. Right, this
13:36
Speaker 1: is why you talk about I think what they call
13:38
Speaker 1: sensitive areas, right exactly, So It all depends on what
13:43
Speaker 1: this opinion says exactly, whether it's says completely no laws
13:51
Speaker 1: allowed that restrict the use of carrying guns in public.
13:55
Speaker 1: I mean, it's hard to believe that that that this
13:57
Speaker 1: says that, but as I said, I have to really
14:00
Speaker 1: carefully to see what it says. We know that New
14:04
Speaker 1: York's law was very, very restrictive. As you mentioned, it
14:07
Speaker 1: required very many restrictions. So we'll have to see how
14:11
Speaker 1: did we can copy a celebrity or super rich basically
14:16
Speaker 1: one of those. Alright, thank you so much. During Grasso,
14:19
Speaker 1: legal reporter for Bloomberg News. All right, let's check in.
14:25
Speaker 1: We've got Fed Chirman j. Pal He's still in Washington,
14:28
Speaker 1: d C. Still in front of Congress today it's the
14:31
Speaker 1: Senate Um and along chief was economist for Bloomberg Economics
14:35
Speaker 1: and joins us. And uh, you know, I'm not sure
14:38
Speaker 1: what to take away from this. It seems like it's
14:40
Speaker 1: more political theater than than anything. But as you as
14:43
Speaker 1: you think about the communication we've we've heard from Fed
14:45
Speaker 1: Sherman Powell over the last couple of days and you know,
14:48
Speaker 1: over the last week and so on, how do you
14:50
Speaker 1: think he's approaching this inflation slash recession Balancing Act. Yeah,
14:56
Speaker 1: I think he is trying to um not sound too
15:00
Speaker 1: alarming about recessions, but he also wants to acknowledge that
15:05
Speaker 1: it is uh that that the FED officials are realizing
15:10
Speaker 1: that that there is a trade off in bringing inflation
15:13
Speaker 1: down and unemployment. Right, well, well right, you know, as
15:17
Speaker 1: a policy maker, they could control the narratives recessions. So
15:22
Speaker 1: even if they internally think that a recession is a
15:25
Speaker 1: short thing, they will not come out and say it's
15:28
Speaker 1: a short thing. So so whatever he says about would
15:31
Speaker 1: be the day right when the FED chair says we're
15:33
Speaker 1: definitely headed into a recession next quarter, or a president
15:36
Speaker 1: the president can't really say it either. Yeah, exactly. It
15:39
Speaker 1: would be like being in a you know that the
15:41
Speaker 1: analogy of it being in a movie theater and somebody
15:45
Speaker 1: screaming fire, everybody's running out. He did say, though, it
15:49
Speaker 1: would be very challenging to stick a soft landing. So
15:52
Speaker 1: he's getting closer and closer to making that admission, especially
15:56
Speaker 1: as um politicians question him about the efficacy of monetary
16:00
Speaker 1: policy when it comes to dealing with supply side inflation.
16:04
Speaker 1: It's just not that useful, and the only way you
16:07
Speaker 1: can do it is to buy damping down demand. Right. Well,
16:11
Speaker 1: you know he says that, right, but when you look
16:14
Speaker 1: at what's happening now, it doesn't seem that way. After
16:18
Speaker 1: the FED raises rates by sony fight it, you see
16:22
Speaker 1: that everybody is darting to talk about recession spears and
16:25
Speaker 1: suddenly oil price plunged by what like almost like sixteen
16:29
Speaker 1: dollars for barrow already within a week. So through this,
16:34
Speaker 1: through influencing people's expectations and sentiment, suddenly he has an
16:40
Speaker 1: effect on supply. Yeah. Absolutely, we we We saw oil
16:44
Speaker 1: trading for basically a hundred four dollars a barrel last Tuesday,
16:50
Speaker 1: and this morning we came down to one oh two
16:53
Speaker 1: thirty two. So yeah, we were actually down twenty bucks
16:58
Speaker 1: in a week and a half, not even a week
17:01
Speaker 1: and a half. Is that going to be enough? And uh,
17:04
Speaker 1: I mean, um is the jaw owning and a few
17:09
Speaker 1: seventy basis point how it is going to do it? Well?
17:13
Speaker 1: I think that even before last week there there were
17:16
Speaker 1: some disinflationary signs happening in the economy, but just not
17:21
Speaker 1: food and energy prices. Um I I spoke to you
17:25
Speaker 1: guys previously telling you that I think headline inflation would
17:30
Speaker 1: get to nine percent before the end of the summer.
17:33
Speaker 1: I still think that that is likely going to happen,
17:36
Speaker 1: precisely because you know, food prices going to ride, gasoline prices,
17:41
Speaker 1: um um. There's some seasonality with it and and it
17:45
Speaker 1: has to fall sharply in order to see the situation
17:50
Speaker 1: and improved um. So I still see like nine percent
17:55
Speaker 1: being attainable in a couple of months and in terms
17:58
Speaker 1: of inflation year over year in lation. But at the
18:01
Speaker 1: same time, if you look at core measures, those are
18:04
Speaker 1: coming down in a more sure footed way. And I
18:07
Speaker 1: think that after I if the FED does one more
18:11
Speaker 1: seventy five and a couple more fifty bits, I think
18:15
Speaker 1: they could uh downshift bits by the end of the
18:19
Speaker 1: year and and get to four percent next year and
18:23
Speaker 1: we will be well. I think that will be an
18:26
Speaker 1: optimistic cap for our bringing inflation back to two percent.
18:29
Speaker 1: And one of our good friends of Bloomberg Economics, are
18:31
Speaker 1: you calling for a recession at any time? Officially yes,
18:35
Speaker 1: we have a officially adopted a recession um as our baseline,
18:41
Speaker 1: and we think it will be happening in the second half.
18:46
Speaker 1: We estimated that a recession before the end of next year.
18:51
Speaker 1: It could happen with seventy two percent probability. Pretty distinct number.
18:56
Speaker 1: There is it gonna be a shallow one, a deep one.
18:58
Speaker 1: I mean Matt was quoting says five quarters in a
19:03
Speaker 1: row of traction. Oh wow, Okay, we are seeing it
19:08
Speaker 1: more of a short and shallow one because typically you
19:12
Speaker 1: need uh financial distress and some banging sector um instability
19:19
Speaker 1: and uh you know uh to to get the deep
19:23
Speaker 1: recession the type that you see in two thousand and eight.
19:27
Speaker 1: And right now I'm just seeing very healthy household balance sheet. Um,
19:32
Speaker 1: you know, mortgage services as a share of income is
19:37
Speaker 1: that historical lows. So even though the housing market the debt,
19:42
Speaker 1: you know, with the urge and mortgage trade, people will
19:46
Speaker 1: pay more, it's still historically kind of low as a
19:49
Speaker 1: share of their income. And and so I just don't
19:52
Speaker 1: see those kind of financial frictions that generate that could
19:55
Speaker 1: generate is huge and deep recession. I want to talk
19:58
Speaker 1: about school for a second, and because I note, um,
20:02
Speaker 1: you got your bachelors in economics at Berkeley UM, which
20:07
Speaker 1: I think of as you know, a school where you
20:11
Speaker 1: come at things from a Marxist perspective. And then you
20:14
Speaker 1: when got your PhD at the University of Chicago, which
20:17
Speaker 1: is much more of an Austrian school. Right, how do you, um,
20:22
Speaker 1: how do you compare and contrast those two experiences. Yeah,
20:27
Speaker 1: I think you Chicago might like to accept Berkeley a
20:30
Speaker 1: lump just try to convert them for fun. But uh,
20:35
Speaker 1: but yeah, I think Berkeley definitely. It's one gets an
20:39
Speaker 1: education Berkeley. You attend to think that government stimulus, um
20:44
Speaker 1: you knows Ukansian economics works and bringing an economy out
20:51
Speaker 1: of recession because you think that prices are sticky. Then
20:55
Speaker 1: the uh you think about externality there. That's why there's
20:59
Speaker 1: a paste for why government stimulus can I can you know,
21:03
Speaker 1: get an economy out of you know, liquidity Trafford, you
21:07
Speaker 1: know some story situations, whereas the Chicago school is more
21:11
Speaker 1: of more places, more focused on um rationality, like you know,
21:17
Speaker 1: they look at a situation like today, they would be
21:20
Speaker 1: like poor sentiment in response to inflation, like the a
21:24
Speaker 1: little irrational because nominal money illusions people. People's nominal wages
21:30
Speaker 1: are rising in para all right, and a good good stuff.
21:35
Speaker 1: They appreciate it as always are very well educated. Anna
21:39
Speaker 1: Wong chief US economist for Bloomberg Economics, bringing us some
21:43
Speaker 1: thoughts here as fat Cherman j pal Uh. You know
21:46
Speaker 1: day two of his testimony in Front of Commerce explaining inflation,
21:50
Speaker 1: explaining monetary policy and the Balancing Act. June is Ride
22:00
Speaker 1: month and a month when we're focusing on equality issues
22:03
Speaker 1: here at Bloomberg. Today we bring in Edward Moreno, labor
22:06
Speaker 1: and Employment reporter for Bloomberg Law. He joins us to
22:09
Speaker 1: discuss the pressure companies face and advocating for inclusion during
22:14
Speaker 1: Pride Month. Edward, thanks for what you're joining is here.
22:17
Speaker 1: What did you find? What are companies doing? Are they
22:20
Speaker 1: paying lip service to this whole inclusion diversity equality thing?
22:23
Speaker 1: Are they really making inroads? Yeah? Thank you for having me. Um.
22:29
Speaker 1: You know what I learned was that UM, when companies
22:32
Speaker 1: do take stand on lgbt Q issues, it's almost always
22:36
Speaker 1: because they are facing or have at some point face
22:39
Speaker 1: pressure from employees to do so. UM. And this is
22:44
Speaker 1: generally in the past this has always been the case,
22:46
Speaker 1: but in the past year this has come up more
22:48
Speaker 1: often as a lot of state legislator lachers have been
22:51
Speaker 1: proposing anti lgbt Q bills, such as Florida's don't take
22:55
Speaker 1: a bill uh. You know, bathroom bills across the nation
22:58
Speaker 1: targeting transfuse UM and things of that nature. UM. One
23:02
Speaker 1: example of this was, you know, in Disney, we all
23:04
Speaker 1: saw you know, employees stats to walk out UH and
23:07
Speaker 1: basically pressured their CEO to take a stand against Florida's
23:11
Speaker 1: don't take a bill UM. In Texas, dozens of companies
23:15
Speaker 1: spoke out about a director from the governor UH directing
23:19
Speaker 1: the state to investigate parents who are seeking gender affirming
23:24
Speaker 1: care for transgender children. UM. And you know, one of
23:28
Speaker 1: the pitfalls that employees are still asking for is, you know,
23:32
Speaker 1: sometimes a company may take a stand on a particular
23:35
Speaker 1: bill but still support financially politicians who propose those those
23:40
Speaker 1: So that's an area where employees are certainly still pushing
23:44
Speaker 1: for companies to do more. So wait have we? So
23:47
Speaker 1: there are two issues right there is inclusive and diverse
23:50
Speaker 1: hiring UM and then the issue of what a company
23:55
Speaker 1: does in terms of support for political candidates or statements
23:58
Speaker 1: that it makes if a company does that. Right, not
24:00
Speaker 1: all companies have to get involved in politics. Some of
24:02
Speaker 1: them probably just want to stick to business. UM. In
24:05
Speaker 1: terms of the first issue, how are we doing Edward,
24:08
Speaker 1: because that's probably um, you know, I don't really think
24:13
Speaker 1: that Disney or Craft need to get involved too much
24:17
Speaker 1: in any political issues, but I do want them to
24:20
Speaker 1: be uh not to be discriminating against employee candidates and
24:24
Speaker 1: and hiring, especially if I'm a shareholder, as broader range
24:28
Speaker 1: of people as possible so that I can get the
24:30
Speaker 1: best of the best. Right. So, UM, you know, actually
24:34
Speaker 1: what I learned, UM, was that corporate America is generally,
24:38
Speaker 1: at least from the folks I talked to, UM, generally
24:40
Speaker 1: pretty ahead when it comes to internal inclusivity and you know,
24:45
Speaker 1: having lgbt Q friendly policies for their employees. UM. But
24:50
Speaker 1: you know what tends to be the motive for employees
24:52
Speaker 1: to push companies to get into those political discussions is
24:56
Speaker 1: you know a lot of times those bills affect employees.
24:59
Speaker 1: They may b trends themselves or have um, transgender children.
25:04
Speaker 1: So you know, it's not always There's only so much
25:06
Speaker 1: a company can control that impacts their their employees. And
25:11
Speaker 1: from their standpoint, you know, they probably they have a
25:14
Speaker 1: business interest in making sure that employees are happy and
25:17
Speaker 1: not being targeted by lawmakers because of their identity. And
25:21
Speaker 1: Edward gives a sense of how much you know, not
25:25
Speaker 1: just above the c suite, talk about the board. Is
25:27
Speaker 1: there board support for a lot of these things? I mean,
25:29
Speaker 1: I know there's pressure for E s G investors, Uh,
25:33
Speaker 1: there's a board. You get a sense at the board
25:35
Speaker 1: level in this country that there's is really support for
25:38
Speaker 1: all of this. No, I think it may be getting
25:41
Speaker 1: closer to that right now. UM. You know that was
25:45
Speaker 1: definitely on the lower end of what companies have reported
25:47
Speaker 1: as like, um, you know, impacting there how they approach
25:52
Speaker 1: these issues. UM. One thing that has uh you know
25:55
Speaker 1: kind of ramped that up is an effects new more
25:57
Speaker 1: diversity rule, so more we now know that more boards
26:00
Speaker 1: are disclosing um if they have lgbt Q members in them. Um,
26:06
Speaker 1: that kind of puts the spotlight on them to you know,
26:08
Speaker 1: just like with any diverse member of a board, uh,
26:11
Speaker 1: to you know, take ownership of those issues. And you
26:13
Speaker 1: know that might be something that we see in the future,
26:15
Speaker 1: but right now it's definitely being driven more so by
26:18
Speaker 1: employees and boards or even shareholders or yeah, yeah, exactly
26:22
Speaker 1: by by profits. Right. You want to hire the smartest
26:26
Speaker 1: and most capable employees that you can UM, and you
26:29
Speaker 1: want them to feel as comfortable as they can at
26:33
Speaker 1: work so that they can perform well. And of course
26:35
Speaker 1: you want your leadership to be diverse as well, so
26:39
Speaker 1: that you can make the right decisions to generate the
26:42
Speaker 1: most revenue. I mean, I think of this all from
26:44
Speaker 1: an economic perspective, but I guess not everyone does. Edward
26:48
Speaker 1: m Yeah. Um. And actually, you know, even among the
26:51
Speaker 1: employees that UM tend to be making those pushes. UM,
26:55
Speaker 1: from what I heard from the folks I talked to UM,
26:58
Speaker 1: A lot of times that comes from you know, the
27:00
Speaker 1: executive leadership as well. You know, it's it's on the
27:03
Speaker 1: lower ranks. It's a lot of times managers, higher ups.
27:06
Speaker 1: So yeah, I think that's certainly correct. All right, good stuff.
27:09
Speaker 1: Edward Moreno Labor, an employment reporter for Bloomberg Law. Thanks
27:14
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
27:18
Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast
27:22
Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
27:25
Speaker 1: Matt Miller three. Pet On Ball Sweeney I'm on Twitter
27:29
Speaker 1: at pt Sweeney. Before the podcast, you can always catch
27:32
Speaker 1: us worldwide at Bloomberg Radio.