Latest / Trumponomics / Trump Isn’t the Only Reason the Price of Money Is Rising

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Trump Isn’t the Only Reason the Price of Money Is Rising · Trumponomics

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
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  Speaker 2: I'm Stephanie Flanders, head of Government and Economics at Bloomberg,
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  Speaker 2: and this is trump Anomics, the podcast that looks at
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  Speaker 2: the economic world of Donald Trump, how he's already shaped
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  Speaker 2: the global economy, what on earth is going to happen next?
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  Speaker 2: And this week we're talking about the price of money,
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  Speaker 2: why it's going up, and why that matters to all
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  Speaker 2: of us, and especially to governments with big debts like France,
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  Speaker 2: where it's part of why the government just collapsed. Who
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  Speaker 2: also want to explain why this big shift in the
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  Speaker 2: most important price in the global economy is not entirely
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  Speaker 2: caused by Donald Trump, though he might be speeding the
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  Speaker 2: process up. Now, when I say the price of money,
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  Speaker 2: I mean the interest rate. So just like anything you
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  Speaker 2: buy phones, fruit, money also has a price, but instead
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  Speaker 2: of paying for money with other goods, we pay for
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  Speaker 2: it with interest. And that price of money, that interest
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  Speaker 2: rate matters because it touches everything. What you pay for
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  Speaker 2: a home, how much companies invest, where the prices rise
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  Speaker 2: too fast, even how strong a country's currency is, Who
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  Speaker 2: or what sets the price of money? Well, short term, yes,
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  Speaker 2: central banks play their part. We all write a lot
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  Speaker 2: about that piece, but long term, that price is set
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  Speaker 2: by a wide range of structural factors that we're going
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  Speaker 2: to get into in this show, and I thought we
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  Speaker 2: should talk about it this week. Well, for a few reasons. First,
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  Speaker 2: it's a reminder that this would have been a challenging
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  Speaker 2: time for governments anyway, even without Donald Trump turning the
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  Speaker 2: world upside down. The second reason is we're seeing the
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  Speaker 2: consequences of a higher cost of borrowing play out in
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  Speaker 2: real time this month, as bond yields the government interest
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  Speaker 2: rates go up in many countries. France I've already mentioned,
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  Speaker 2: now pays more than Italy to borrow from the market.
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  Speaker 2: It's also arguably rising bond year that is the one
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  Speaker 2: factor more than any other, putting serious financial pressure on
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  Speaker 2: the labor government in the UK. But yes, I'll admit
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  Speaker 2: the final reason is because we at Bloomberg Economics have
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  Speaker 2: written a book that explains it all, The Price of Money,
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  Speaker 2: A Guide to the past, present and Future of the
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  Speaker 2: natural Rate of Interest. It's published a few weeks ago
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  Speaker 2: by Oxford University Press, and it is available I'm told
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  Speaker 2: at all fine bookstores, and my two lead co authors
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  Speaker 2: who face it did most of the work pulling that
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  Speaker 2: book together. Are here with me now. Jamie Rush, the
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  Speaker 2: director of Global Economics at Bloomberg, who's here in London
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  Speaker 2: and joining again from the Washington studio, Tom Orlick, who's
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  Speaker 2: chief economist for Bloomberg Economics. Jamie, Tom, thanks very much
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  Speaker 2: for being here to hawk card book. We don't usually
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  Speaker 2: get to say that.
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  Speaker 1: Thank you for having me.
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  Speaker 3: Great to be here, Stephanie.
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  Speaker 2: Tom, let me start with you. You know, I've said a
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  Speaker 2: little bit about it, but why is it important now
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  Speaker 2: to think about the long term cost of money? Because
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  Speaker 2: for many people that will seem pretty abstract.
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  Speaker 3: So I think there's a few factors at work, Stephanie.
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  Speaker 3: So the first is, this is a moment for the
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  Speaker 3: global markets. This is a moment where across Europe, across Japan,
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  Speaker 3: in the United States, long term interest rates are high,
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  Speaker 3: and in many of those places they're rising, with far
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  Speaker 3: reaching consequences for governments, for businesses, for households, for investors.
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  Speaker 3: I think the second reason is, well, there are some
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  Speaker 3: really long term factors that drive the rate of interest,
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  Speaker 3: things like demographics, for example, but there's also some important
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  Speaker 3: factors that are playing out right now. So think about
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  Speaker 3: Donald Trump and the end of the Pax Americana, the
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  Speaker 3: US security guarantee. That's forcing everyone from European NATO allies
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  Speaker 3: to Japan and Korea and Taiwan to significantly increase their
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  Speaker 3: defense spending. And when they do that, when governments borrow
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  Speaker 3: to increase defense spending, that puts upward pressure on interest rates.
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  Speaker 3: So it's a market moment, but it's also a kind
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  Speaker 3: of paradigm shift moment for the global economy, and I
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  Speaker 3: think that's one reason that makes this new book timely.
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  Speaker 2: You can see how many book references the book we
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  Speaker 2: can get in now, Jamie, looking at quite a lot
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  Speaker 2: of examples now where this is playing out. Tell us,
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  Speaker 2: just as example of France, how some of these forces
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  Speaker 2: are pushing up the cost of borrow and indeed helping
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  Speaker 2: to cause you know, yet another government to collapse this week.
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  Speaker 1: Well, there are certainly a handful of economies globally which
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  Speaker 1: are sort of in the cross hairs of markets, and
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  Speaker 1: they've seen interest rates go up by the most. So
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  Speaker 1: you mentioned France. Largely that's because the parliament is very
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  Speaker 1: fractured and it's going to be very very difficult for
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  Speaker 1: them to pass any legislation which gets the budget under control.
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  Speaker 1: We saw in Japan the interest rates at the long
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  Speaker 1: end of the curve moved up. Why because the central
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  Speaker 1: bankers ditched your curve control. And if you ditch your
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  Speaker 1: co control, you no longer have control of your curve.
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  Speaker 1: And in the UK, where there's a significant amount of
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  Speaker 1: gloom and pessimism about the government's ability to rain in debt,
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  Speaker 1: all of these things are serving to push up interest rates.
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  Speaker 1: But actually these idiosyncratic things are not the main source
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  Speaker 1: of the movement up in interest rates. If you look
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  Speaker 1: at which part is local and which part is global,
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  Speaker 1: you see that there's a huge global element to rising
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  Speaker 1: borrowing costs around the world, and it's that part that
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  Speaker 1: we were trying to think about when we did our analysis.
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  Speaker 2: I guess this is partly just the supply of money
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  Speaker 2: and the demand for money. We think of the demand
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  Speaker 2: for money being things that you need to invest in
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  Speaker 2: or governments might be wanting to borrow. And the supply
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  Speaker 2: of money is the savings and other sources of cash
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  Speaker 2: that are sitting around the economy. Over the previous decade,
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  Speaker 2: people whused to talk about the savings glut. There was
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  Speaker 2: a lot of money sloshing around and potentially fewer places
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  Speaker 2: for it to go. So governments were able to borrow
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  Speaker 2: very cheaply because there was a lot of money. But
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  Speaker 2: now that shift is churning. Talk us through that sort
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  Speaker 2: of demand and supply forces, because obviously it relates to
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  Speaker 2: what you just said.
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  Speaker 3: Yes, exactly it.
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  Speaker 1: So it's the balance of saving an investment in the
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  Speaker 1: global economy that matters for global interest rates, and they're
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  Speaker 1: all determined with that global factory in mind. And for
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  Speaker 1: many years, the global cost of borrowing was falling, and
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  Speaker 1: the reason for that was because investment was getting cheaper.
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  Speaker 1: We had all this these cheap goods coming from China.
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  Speaker 1: Much cheaper to upgrade your technology, for example, you don't
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  Speaker 1: have to spend so much on investment. That was one
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  Speaker 1: of the by products of globalization. On the saving side,
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  Speaker 1: you have the baby boomers socking away their paychecks into
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  Speaker 1: their savings accounts, preparing for retirement. That also helped push
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  Speaker 1: down the cost money and defense spending. For example, well
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  Speaker 1: after the Cold War, we thought the world seemed relatively safe,
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  Speaker 1: and so governments saved. They didn't They reduce their military
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  Speaker 1: budgets and they save the money all of these things
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  Speaker 1: are now starting to spin into reverse. So globalization, which
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  Speaker 1: helped keep investment goods cheap and actually inflation down, well
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  Speaker 1: that's not going to be proceeding at the same pace
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  Speaker 1: as it was. Defense spending where we don't live in
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  Speaker 1: a safe world. It's becoming much more dangerous. We need
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  Speaker 1: to ramp up defense spending like Tom was describing. And
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  Speaker 1: the demographics side of things, well, yes, the baby boomers
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  Speaker 1: are now retiring, and so they're going to be drawing
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  Speaker 1: down their savings rather than pushing money into them, and
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  Speaker 1: so all of these factors are shifting that fundamental balance
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  Speaker 1: between saving and investment in the global economy, and that
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  Speaker 1: is going to help push interest rates up.
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  Speaker 2: Tom, we've said it's not all down to Donald Trump,
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  Speaker 2: and you could just hear from that list it's clearly
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  Speaker 2: not all down to Donald Trump, much though he might
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  Speaker 2: like to make the political and economic weather while he's
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  Speaker 2: in office. But you can also hear in that list
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  Speaker 2: number of things which are at least are being given
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  Speaker 2: the kind of extra impetus by his policies. And I
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  Speaker 2: guess we also have the possibility for sort of supply
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  Speaker 2: chain issues or reversing globalization, which you would think, given
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  Speaker 2: that it was contributing to falling prices in previous decades,
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  Speaker 2: if that's contributing to rising prices and potentially come of
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  Speaker 2: more variability in prices, more kind of shocks for central
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  Speaker 2: banks to manage, well, that too might be a way
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  Speaker 2: in which he's contributing to higher rates overall. Is that right? Yeah?
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  Speaker 3: I think there's a multiple dimensions on which the Trump
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  Speaker 3: administration is driving interest rates higher, Stephanie. Perhaps the first
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  Speaker 3: of them, as you mentioned, is the shock to the
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  Speaker 3: global system. It was the integration of a billion low
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  Speaker 3: cost Chinese workers into the global trade system, which helped
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  Speaker 3: keep a lid on inflation in the US through the
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  Speaker 3: Great Moderation. I think many people expected the addition of
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  Speaker 3: a billion Indian local cost workers to extend that trend
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  Speaker 3: in the decades ahead. Donald Trump, with his tariffs is
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  Speaker 3: signaling well, that's just not going to happen. Borrowing in
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  Speaker 3: the United States is really high. Trump's Big Beautiful Bill
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  Speaker 3: adds very significantly to the fiscal deficit over the next decade.
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  Speaker 3: Some three trillion added to US debt according to the
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  Speaker 3: Congressional Budget Office, And when the US Treasury is issuing
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  Speaker 3: more debt well, they're going to have to pay more
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  Speaker 3: to borrow, and that means interest rates go up as well. Lastly,
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  Speaker 3: of course, there are the attacks on FED independence. Now,
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  Speaker 3: the impact on interest rates there is a little bit complicated.
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  Speaker 3: If Trump gets his way and gets a more pliant
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  Speaker 3: FED chair and a more pliant FED board, well he
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  Speaker 3: could get short term interest rates down, and the impact
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  Speaker 3: of that ripples through the yield curve, so it also
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  Speaker 3: has an impact on long term rates as well. The
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  Speaker 3: bigger impact, though, would likely be a blow to the
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  Speaker 3: Fed's credibility as an inflation fighter, and that would mean
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  Speaker 3: that investors would demand a premium to lend to the
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  Speaker 3: US government, to the US Treasury, and that too is
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  Speaker 3: a force pushing up longer term borrowing costs.
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  Speaker 2: We've mentioned the UK, We've mentioned France, and we know
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  Speaker 2: from previous episodes that the borrowing in the US has
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  Speaker 2: been continued to be very high. And then the government
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  Speaker 2: deficit is very high for a country that is actually
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  Speaker 2: not in the middle of a recession. It's been running
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  Speaker 2: this kind of four or five six percent of GDP
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  Speaker 2: budget deficits. And we've just had that big beautiful bill,
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  Speaker 2: as he called it, pasted in Congress, which added enormously
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  Speaker 2: to future debt. And yet I was amazed to see
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  Speaker 2: the other day that of one of the few developed
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  Speaker 2: countries that has seen its sort of ten year borrowing
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  Speaker 2: rate go down slightly since the beginning of the year
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  Speaker 2: is actually the US. So, Tom, how is the US
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  Speaker 2: getting away with that? I mean, yields are obviously higher,
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  Speaker 2: and they're higher than when Donald Trump took office or
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  Speaker 2: when he was elected, but not as much high. We
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  Speaker 2: haven't seen the kind of impact that you might have expected.
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  Speaker 3: Yeah, So a few thoughts on that. The first one
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  Speaker 3: is if we sort of extend the span of history
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  Speaker 3: a little bit longer, the big picture is very much,
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  Speaker 3: very low ten year borrowing costs before the COVID shock,
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  Speaker 3: very low ten yure borrowing costs at the end of
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  Speaker 3: the twenty tens, and significantly higher borrowing costs today. So yes, absolutely,
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  Speaker 3: the US has been one of the countries that has
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  Speaker 3: had that ten year rate nudge down since the start
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  Speaker 3: of the year. But if we pull the historical frame
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  Speaker 3: back a bit, the US is still very much in
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  Speaker 3: the group of countries which had very low borrowing costs
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  Speaker 3: a few years ago, a much higher borrowing costs today. Now,
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  Speaker 3: why haven't US borrowing costs gone up so far this year?
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  Speaker 3: Maybe it's useful to think about kind of three different
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  Speaker 3: groups of countries. You've got your fragile emerging markets that
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  Speaker 3: are very dependent on portfolio capital flows, and there's big
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  Speaker 3: questions about the quality of their institutions, places like Turkey
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  Speaker 3: or Argentina. If they make a policy error, all the
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  Speaker 3: money flows out straight away, interest rates spike higher, currencies
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  Speaker 3: plunge lower, and the impact are very real and very rapid.
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  Speaker 3: Then you've got advanced economies where the quality of institutions
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  Speaker 3: is stronger and investors have a higher degree of confidence.
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  Speaker 3: But they're still small relative to the size of the
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  Speaker 3: global economy, and so when they make policy missteps they
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  Speaker 3: face some pretty rapid and severe consequences as well. Think
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  Speaker 3: about the UK under the Trust administration. The US perhaps
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  Speaker 3: is in a category of its own right, the world's
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  Speaker 3: biggest economy, the world's deepest financial markets, the world's most
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  Speaker 3: powerful military, a history of good governance, even if there
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  Speaker 3: are growing concerns about erosion of institutions right now, and
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  Speaker 3: for a country like the United States, the issue of
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  Speaker 3: the world's reserve currency. I think what you have is
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  Speaker 3: just much more capacity to play fast and loose with
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  Speaker 3: the rules before facing the real consequences. Perhaps this is
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  Speaker 3: an opportunity for me to surface my favorite quote from
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  Speaker 3: The Great Gatsby, how did you go bankrupt? First slowly,
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  Speaker 3: then all at once?
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  Speaker 2: Well, we've been pointing to some ways in which that
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  Speaker 2: might happen on this show, Jamie, I want to take
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  Speaker 2: off a couple of things, because we've gone through a
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  Speaker 2: lot of factors. But there'll be some people listening who
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  Speaker 2: will think of other ways in which the world's changing
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  Speaker 2: and will be interested to know how this affects the
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  Speaker 2: cost of money. One thing we do talk about in
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  Speaker 2: the book is inequality, and one thing that seems destined
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  Speaker 2: to continue, although individual countries have had different experiences, but
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  Speaker 2: the sort of emergence of the sort of super wealthy
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  Speaker 2: and apparently much more unequal division of wealth. You wealth
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  Speaker 2: obviously plays a big part in savings and investment. How
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  Speaker 2: is that going to affect to the cost of money.
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  Speaker 1: The mechanism at play here is that people at the
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  Speaker 1: top end of the income distribution saved more, their earnings
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  Speaker 1: have gone up faster than their capacity to buy cpots,
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  Speaker 1: and then so they're putting that in their bank accounts,
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  Speaker 1: and so over the past few decades or so, as
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  Speaker 1: income inequality has moved upwards, perhaps contributed more to savings
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  Speaker 1: and it helped to contain borrowing costs or push them down.
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  Speaker 1: Looking ahead, our view is that income inequality is not
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  Speaker 1: likely to rise by as much as it has over
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  Speaker 1: the previous few decades, largely because it has risen so
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  Speaker 1: much already and it would require significant policy change. But
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  Speaker 1: clearly with the direction of travel in US, policy is
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  Speaker 1: likely to climb a little further, and again that will
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  Speaker 1: continue to exert some downward pressure on interest rates going ahead.
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  Speaker 2: And if we move more slowly or faster towards a
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  Speaker 2: net zero goal when it comes to the carbon transition,
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  Speaker 2: how does that affect things, Because that's obviously one of
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  Speaker 2: those areas where we've had in the book, we've had
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  Speaker 2: to have a pretty big range of uncertainty.
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  Speaker 1: Yeah, So I think that the impacts of climate change
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  Speaker 1: on rates, or at least the research into it, still
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  Speaker 1: in its infancy, So you have so many unknown It's
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  Speaker 1: not just about economics, but the impact of global heating
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  Speaker 1: on the economy, and so I think you need to
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  Speaker 1: think about it through two lenses. One is what are
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  Speaker 1: the physical damages that climate change does the global economy,
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  Speaker 1: Because the more damage it does, the slower growth will be,
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  Speaker 1: the lower the inherent rate of return in the economy
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  Speaker 1: will be, and that will push down on interest rates.
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  Speaker 1: But going in the opposite direction, if the world gets
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  Speaker 1: serious about tackling climate change, it's going to take huge
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  Speaker 1: investments in energy infrastructure to green the economy. And if
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  Speaker 1: you look at what new economy finance being there for
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  Speaker 1: saying at Bloomberg, we're talking about trillion dollar investments here,
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  Speaker 1: and so that extra spending that's required, that extra investment
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  Speaker 1: would push interest rates up, and we think that if
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  Speaker 1: there is a significant push, then the net effect is
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  Speaker 1: more likely to be upwards on borrowing costs than downwards.
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  Speaker 2: That rais is interesting point, and that actually it was
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  Speaker 2: one of the things I think a bit about in
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  Speaker 2: the final chapter of the book, when you sort of
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  Speaker 2: think about what are the implications of this change for governments,
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  Speaker 2: for businesses and others. I mean, we've tended to describe
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  Speaker 2: the cost of money going up as like a negative thing,
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  Speaker 2: a challenge, a headwind, and it certainly is for governments.
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  Speaker 2: If you have a lot of debt. It could also happen,
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  Speaker 2: as we describe, for reasons that we could be quite
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  Speaker 2: happy about. It could be a world of higher interest rates,
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  Speaker 2: could be a world in which we all might prefer
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  Speaker 2: to live in. I mean, we obviously savers it's better
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  Speaker 2: for them if they have higher interest rates. We've already
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  Speaker 2: seen in a kind of small way, companies find it
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  Speaker 2: all be easier to cover their pension obligations because that
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  Speaker 2: higher interest rate means that future money that their promise
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  Speaker 2: to pensioners is worth a bit less in today's money
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  Speaker 2: than it was in the period where rates were extremely
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  Speaker 2: low and we had all those big holes in pension funds.
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  Speaker 2: But what else could be better about a higher rate world?
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  Speaker 1: Think about AI as an example here specifically, So what
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  Speaker 1: will AI due to the natural rate? Well, to realize
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  Speaker 1: that the promise of this technology, you have to pile
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  Speaker 1: a huge amount of money into it, and that will
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  Speaker 1: tend to push interest rates up. But at the same time,
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  Speaker 1: the benefits could be huge and growth could be faster.
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  Speaker 1: Income growth could be faster, people could be better off.
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  Speaker 1: So it's in spite of the higher interest rate environment,
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  Speaker 1: people will be on the whole quite significantly better off.
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  Speaker 1: So I think that's kind of a good example of
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  Speaker 1: how interest rates can move for good reasons, they can
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  Speaker 1: move for bad reasons, and it's not always clear which
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  Speaker 1: is which.
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  Speaker 2: I guess. If there's lots of demand for money, that
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  Speaker 2: could be, as you say, people desperately wanting to use
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  Speaker 2: it to build green energy and to have a much faster,
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  Speaker 2: more dramatic approach to prevent climate change. It could be
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  Speaker 2: that they want to use it for all these exciting investments,
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  Speaker 2: and this is what we seem to be seeing. If
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  Speaker 2: it's for governments to desperately cover their rising bills from
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  Speaker 2: aging populations and creaking health services, then that's less of
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  Speaker 2: a positive.
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  Speaker 1: Yeah, And I think that's the big risk, isn't it.
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  Speaker 1: So if you look at aging populations, you should expect
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  Speaker 1: probably that the tax to GDP ratio and move in
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  Speaker 1: line with the dependency ratio. Such the older population more
• 18:06
  Speaker 1: outlays higher taxes. But if you look at how divided
• 18:10
  Speaker 1: parliaments are across advanced economies, the actual ability of governance
• 18:14
  Speaker 1: to raise taxes in line with those liabilities is extremely low.
• 18:17
  Speaker 1: So if they can't. If they can't do that, then
• 18:20
  Speaker 1: you're just going to borrow more interest rates will therefore
• 18:23
  Speaker 1: rise and you end up in this bad equilibrium.
• 18:26
  Speaker 2: And that's what sounds a little bit similar to what
• 18:29
  Speaker 2: the finances of the Chancellor in the UK is grappling
• 18:32
  Speaker 2: with as we head towards this budget, which as always
• 18:35
  Speaker 2: is being billed as sort of a make or break budget.
• 18:37
  Speaker 2: But the fundamental thing she's trying to avoid really is
• 18:41
  Speaker 2: people noticing that the tax rate, tax share of GDP's
• 18:44
  Speaker 2: gone up, but it seems almost inevitable that it will.
• 18:47
  Speaker 2: Tom Jamie's already said individual countries can't change the global
• 18:52
  Speaker 2: supply and demand for money, and maybe even the US
• 18:55
  Speaker 2: is going to to some extent be a taker of
• 18:58
  Speaker 2: these forces, not a maker, although Donald Trump's doing his
• 19:00
  Speaker 2: best to change that. What do you think about, just
• 19:04
  Speaker 2: as a final thought about how to prepare, you know,
• 19:07
  Speaker 2: or do better or worse in this world where money
• 19:11
  Speaker 2: becomes more expensive, I guess I'm thinking a little bit
• 19:14
  Speaker 2: as household but also as a government.
• 19:16
  Speaker 3: So, first of all, Stephanie, for any of the rich
• 19:19
  Speaker 3: people out there who heard Jamie's comments about inadequate demand
• 19:24
  Speaker 3: as a kind of blight on the broader economy and
• 19:26
  Speaker 3: wants to do their bits to address the problem, they
• 19:28
  Speaker 3: could buy copy of our book. It won't fundamentally solve
• 19:32
  Speaker 3: the problem, but every little bit helps. So coming back
• 19:35
  Speaker 3: to your question, one of the things which I find
• 19:38
  Speaker 3: really fun about working on this book with the Bloomberg
• 19:40
  Speaker 3: Economics team is that it just touches such a rich
• 19:43
  Speaker 3: variety of subjects. Right, So, what drives the natural rate
• 19:48
  Speaker 3: of interest? Well, it's about climate change, it's about artificial intelligence,
• 19:53
  Speaker 3: it's about demographics, it's about deglobalization. And one of the
• 19:57
  Speaker 3: interesting things about writing the book was the we had
• 20:00
  Speaker 3: to get to grips with all of these subjects, but
• 20:02
  Speaker 3: we had to get to grips with them in a
• 20:04
  Speaker 3: very specific way, right, with a very specific angle. It's
• 20:08
  Speaker 3: not what does climate change mean for everybody's life in
• 20:12
  Speaker 3: the future of the planet, It's what does climate change
• 20:15
  Speaker 3: mean for the balance between saving an investment? Right. So,
• 20:19
  Speaker 3: in a sense, if some of the predictions which we
• 20:22
  Speaker 3: have in the book play out, people are going to
• 20:24
  Speaker 3: have other stuff to worry about. Right. They're going to
• 20:27
  Speaker 3: be living in a much hotter planet, or they're going
• 20:30
  Speaker 3: to be living in a world where robots are thinking
• 20:32
  Speaker 3: for themselves, or they're going to be thinking of living
• 20:35
  Speaker 3: in a world where there's much more, much more conflict,
• 20:37
  Speaker 3: and much more defense spending. But in terms of the
• 20:39
  Speaker 3: focus of the book on interest rates, from the early
• 20:42
  Speaker 3: nineteen eighties to the mid twenty tens, we were living
• 20:44
  Speaker 3: in a world a US, a Europe where interest rates
• 20:47
  Speaker 3: were on a structural declining trend. Right, it was getting
• 20:50
  Speaker 3: cheaper and cheaper to borrow, and that had far reaching
• 20:53
  Speaker 3: consequences for everybody. If you're an investor in equity markets
• 20:57
  Speaker 3: or property, you made a lot of money because were
• 21:00
  Speaker 3: coming down and money was piling into those markets. If
• 21:03
  Speaker 3: you were a minister of finance, you could borrow more
• 21:07
  Speaker 3: cheaply and not really face a bill for piling on debt. Now,
• 21:13
  Speaker 3: with rates rising, all of those trends swinging into reverse, right,
• 21:17
  Speaker 3: and so we don't have low interest rates as a
• 21:20
  Speaker 3: upward driver of equity and property markets. We have rising
• 21:23
  Speaker 3: interest rates as a drag on equity and property markets.
• 21:27
  Speaker 3: We don't have low interest rates giving ministers of finance
• 21:30
  Speaker 3: a free lunch. We've got higher interest rates, which means
• 21:34
  Speaker 3: the bill is about to arrive.
• 21:36
  Speaker 2: But typically upbeat economists answer, well, I guess money doesn't
• 21:40
  Speaker 2: make the world go around, but maybe it does make
• 21:42
  Speaker 2: economics more interesting for all of us. And I guess
• 21:46
  Speaker 2: the moral of what you just said, Thomas. If the
• 21:47
  Speaker 2: price is money is going up, it's going to be
• 21:49
  Speaker 2: even more important to spend it and borrow it wisely.
• 21:53
  Speaker 2: Tom Warlick, Jamie Rush, thank you so much.
• 21:56
  Speaker 3: Thank you. Thanks definitely great to be here.
• 22:01
  Speaker 2: Thanks for listening to Trumponomics from Bloomberg. It was hosted
• 22:04
  Speaker 2: by me Stephanie Flanders. I was joined by Bloomberg's Tom
• 22:07
  Speaker 2: Orlick and Jamie Rush. Trumponomics was produced by Samasadi and
• 22:10
  Speaker 2: Moses Dam with help from a Keen and special thanks
• 22:14
  Speaker 2: this week to Rachel Lewis Kriskey. Sound design is by
• 22:19
  Speaker 2: Blake Maples and Kelly Gary and Sage Bowman is Bloomberg's
• 22:23
  Speaker 2: head of podcast And please help others find this show
• 22:26
  Speaker 2: and enjoy it by rating and reviewing it highly wherever
• 22:30
  Speaker 2: you listen