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Microsoft and Chevron Sign 20-Year Power Deal For Texas Data Center · Bloomberg Intelligence

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  Speaker 2: Pretty interesting deal out there in a world of energies
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  Speaker 2: as we think about AI, that's been one of the
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  Speaker 2: gating issues we've all come to learn that, Okay, you
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  Speaker 2: can build all these data centers, but you've got to
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  Speaker 2: figure out how to power them.
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  Speaker 3: You can't.
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  Speaker 2: You know, you're going to have to need new and
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  Speaker 2: flexible energy sources. So here's a piece of news today,
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  Speaker 2: Chevron signed a twenty year deal with Microsoft to provide
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  Speaker 2: natural gas fired power for a proposed West Texas data center.
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  Speaker 2: So that's pretty cool there. Let's get talked to the
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  Speaker 2: reporter from Bloomberg News on that story. Kevin Crowley, a
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  Speaker 2: Bloomberg News, a big oil reporter, talk to us about
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  Speaker 2: this deal here, Kevin, it seems like.
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  Speaker 3: We've seen what I need to see more and more.
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  Speaker 2: Of these, and is this kind of the blueprint for
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  Speaker 2: the future.
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  Speaker 4: It could be, Yeah, Chevron. Chevron, according this a platform
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  Speaker 4: for the future. I mean really, it's a new business
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  Speaker 4: for for them. I mean, as you know, they're a
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  Speaker 4: big oil and gas company. They're not in the power
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  Speaker 4: industry until until now. And it's it's it's really to
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  Speaker 4: take advantage of the very, very cheap and abundant natural
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  Speaker 4: gas that exists in West Texas. This h this data
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  Speaker 4: center is being built right in the heart of the
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  Speaker 4: Permian Basin, which which probably know, is the biggest oil
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  Speaker 4: field in the country. But with that oil comes a
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  Speaker 4: lot of natural gas as a as a byproduct, and
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  Speaker 4: there's actually so much natural gas out there at the
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  Speaker 4: moment that it it can't be taken away, overwhelms the
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  Speaker 4: pipeline capacity and and so it's it's it's either burned
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  Speaker 4: off as waste or it's or companies have to actually
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  Speaker 4: pay people to to take it away.
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  Speaker 5: So so Chevron and.
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  Speaker 4: Microsoft I think we'll well, this is a good competitive
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  Speaker 4: advantage here. We can use this gas to to build
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  Speaker 4: a big power plant that will then they will then
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  Speaker 4: power a data center. The I mean the disadvantage is
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  Speaker 4: the location here is very very remote. It's about four
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  Speaker 4: hundred miles west of the Dallas for Fort Worth area.
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  Speaker 4: But the cheap power is definitely a competitive advantage of
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  Speaker 4: this project.
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  Speaker 6: Okay, so it sounds like, you know, it's getting some
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  Speaker 6: value out of something that would be disposed of any way.
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  Speaker 3: That sounds great.
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  Speaker 6: Does that mean that there's no risk, no concern about
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  Speaker 6: locals to the extent that there are any locals living
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  Speaker 6: near the premium basin or any nearby communities facing higher
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  Speaker 6: utility bills.
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  Speaker 4: No, So Chevron say this is one hundred percent behind
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  Speaker 4: the meter. So this is the There is no utility
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  Speaker 4: even connected with this project, So this is this is
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  Speaker 4: this is purely Chevron building the taking their gas, building
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  Speaker 4: the power station, and then using that power to to
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  Speaker 4: for the data center. I mean, it's a very it's
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  Speaker 4: a very remote, sparsely populated area anyway. But they insist
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  Speaker 4: that there's absolutely no impact on the on the on
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  Speaker 4: the local on the local rate payers at all, which
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  Speaker 4: which I think makes this they stay claim anyway, makes
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  Speaker 4: this makes this project unique. It's rare for data center
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  Speaker 4: of this scale to be to not utilize grid power
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  Speaker 4: or have the involvement of a utility.
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  Speaker 6: If that's the case, how come we didn't get something
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  Speaker 6: like this sooner? Why did it take so long.
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  Speaker 4: These are big projects, they cost they cost a lot
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  Speaker 4: of money. And and it's and it's new. I mean,
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  Speaker 4: Chevron is not is not a utility, is not a
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  Speaker 4: is not a power producer. The other thing I think
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  Speaker 4: is is so far big tech companies have preferred to
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  Speaker 4: build data centers near to two larger population centers. And
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  Speaker 4: the other thing is as well, is early on you know,
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  Speaker 4: these companies did did prefer to to use to use
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  Speaker 4: renewables uh and to to lower the emissions of those
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  Speaker 4: data centers. But now there does seem to be a
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  Speaker 4: movement towards an actual gas given the given the scale
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  Speaker 4: that we now see ahead of us.
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  Speaker 2: Kevin, you got thirty seconds left. Tell us why this
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  Speaker 2: is a new business for Chevron.
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  Speaker 4: Chevron's in the oil and gas business. They're not they're
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  Speaker 4: not in the power business really until now. But they
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  Speaker 4: think this can, this can diversify their revenue streams, provides
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  Speaker 4: a bit more, a bit more of a reliable it's
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  Speaker 4: it's not as it won't be a cyclical as the
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  Speaker 4: as the oil and gas business, but also takes advantage
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  Speaker 4: of some of some of their some of their key
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  Speaker 4: competitive advantages. Chevron's already in the permium. They know how
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  Speaker 4: to how to build build big projects, and they they
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  Speaker 4: have the gas, so so I think it's within their
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  Speaker 4: skill set, you know, unlike some other companies like BP
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  Speaker 4: and Shell, which which got into power about five or
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  Speaker 4: six years ago.
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  Speaker 5: Unsuccessfully.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 2: It is Monday, which means it's oftentimes merger Monday, and
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  Speaker 2: it often involves the healthcare industry, and that is exactly
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  Speaker 2: what happened today. ABBYV agreed to buy appigy Therapeutics for
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  Speaker 2: ten point nine billion dollars in cash, by the way,
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  Speaker 2: to bolster its anti inflammatory drug portfolio. If you can't
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  Speaker 2: make it in the lab, go buy it. That's what
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  Speaker 2: I know about the form of business. Sam Fazzelli joins
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  Speaker 2: us here give us a little bit more detail. His
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  Speaker 2: Director Research for Global Industries. I don't think that title
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  Speaker 2: exists anymore. We have to update that. Senior Pharmaceuticals analyst
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  Speaker 2: over there at Bloomberg Intelligence. What's that TV doing here?
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  Speaker 2: Sam talked to us about this deal.
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  Speaker 7: Sure, title wise, make a couple of you like, you know,
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  Speaker 7: I'm how easy with titles.
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  Speaker 3: Yeah, drug drug.
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  Speaker 5: Bars, there you go, drug boss. Yes.
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  Speaker 7: What they're doing here is that they're already the probably
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  Speaker 7: the biggest player in the space of immunology and inflammation
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  Speaker 7: through their first day started with him Ira, became the
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  Speaker 7: biggest drug, and now they've got sky Rizzy and and
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  Speaker 7: ri in Voke, which are both for either psoriasis or
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  Speaker 7: authritis pretty much similar kind of related or diseases. Now
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  Speaker 7: this is you know, we keep talking about obesity one
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  Speaker 7: hundred billion, blah blah blah. If you add up the
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  Speaker 7: numbers that app is going to have these two drugs,
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  Speaker 7: we're approaching well over fifty billion dollars. So you don't
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  Speaker 7: need to be an obesity to make these kind of
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  Speaker 7: revenues because there's so many people to suffer on these things. Here,
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  Speaker 7: they're buying another drug that adds to the portfolio, that
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  Speaker 7: gives them access to the exema market otherwise known as
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  Speaker 7: atopic dermatitis, and it's a pretty good fit. Lots of
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  Speaker 7: questions as opposed to whether it's the right drug to
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  Speaker 7: have had. Is there another better competitor? But AV has
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  Speaker 7: spoken they're putting up their cash.
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  Speaker 6: I mean, Paul might have answered my question here, But
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  Speaker 6: the fact that it's all cash, does this mean that
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  Speaker 6: AVI is making this acquisition from a position of strength.
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  Speaker 6: It's on the offensive in the same way that we
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  Speaker 6: talk about Eli Lilly making acquisitions from a position of strength.
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  Speaker 7: Yeah, I mean, scot most farmer companies right now, if
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  Speaker 7: I look through the list, I can't pick one that
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  Speaker 7: is having trouble generating cash, even Pfiser, I mean I don't.
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  Speaker 5: I don't.
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  Speaker 7: I'm not having a go at Pfizer specifically, but even Pfizer,
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  Speaker 7: where the share price is halved, is the peaks.
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  Speaker 5: Of the pandemic.
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  Speaker 7: We are e ending up with a company that's still
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  Speaker 7: generating a lot of cash and their leverages are relatively low,
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  Speaker 7: so they can go and do these things without too
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  Speaker 7: much trouble. That these guys have thirty zero percent operating margins,
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  Speaker 7: So these are very cash rich companies and the cash
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  Speaker 7: speaks volumes.
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  Speaker 2: So what's what's the next new thing in your world
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  Speaker 2: send that we need to be focusing on. I mean
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  Speaker 2: do we still have room to grow in the obesity front?
• 8:18
  Speaker 2: Is there breakthroughs in cancer? I know you go to
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  Speaker 2: all these conferences. What's the next thing that you think
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  Speaker 2: global wall sheets should be looking at in your space?
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  Speaker 8: Yeah?
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  Speaker 7: I mean, Paul, I keep talking about biology is evolving
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  Speaker 7: at a breakneck speed and it's not just a cliche
• 8:34
  Speaker 7: thing to say. At the end of the day, science
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  Speaker 7: is really really cracking into some of the minuci of
• 8:41
  Speaker 7: how these diseases are slightly different from each other. So
• 8:44
  Speaker 7: the next big thing is are all of these patients
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  Speaker 7: suffering from the same reason or biology that's making them movies?
• 8:52
  Speaker 7: Is there some subgroups that need to be treated differently?
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  Speaker 7: So that's one area. Neuroscience is one. Can I plug
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  Speaker 7: a podcast that we have on bio Vaneguards of Healthcare
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  Speaker 7: Vandguards of Healthcare a couple. I think it's this week
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  Speaker 7: or now it was last week that the conversation with
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  Speaker 7: the head of development at Bristol Myers where we talked
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  Speaker 7: about this and neuroscience is a big one because the
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  Speaker 7: brain has been a black box until I mean, it
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  Speaker 7: still is a bit of a black box compared to immunology,
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  Speaker 7: for instance, But there's a lot more science and biology
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  Speaker 7: that's being understood, and therefore that's a frontier that I
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  Speaker 7: think we're going to see quite a lot of evolution
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  Speaker 7: and new drugs and ideas coming up in see.
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  Speaker 6: And one area that I'm really interested in is women's health.
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  Speaker 6: And we've seen menopause become a very big industry now
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  Speaker 6: that the FDA has removed the black box warning on
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  Speaker 6: hormone replacement therapy in the US, we've seen demand for
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  Speaker 6: these estrogen products, estrogen patches, creams, Gells, skyrocket.
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  Speaker 3: That's in the US. What does it look like elsewhere
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  Speaker 3: in Europe, for instance, or in Asia.
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  Speaker 7: I think x US hasn't been as much of a
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  Speaker 7: contentious issue here.
• 10:03
  Speaker 5: It's to your replacement therapy.
• 10:04
  Speaker 7: Of course, everybody worries about taking a hormone for life
• 10:07
  Speaker 7: or for an extended period of time. And these are
• 10:10
  Speaker 7: active agents, right, so they're not just passive. So you
• 10:15
  Speaker 7: do need to be careful with using them and making
• 10:19
  Speaker 7: sure you have enough information that suggests that the benefit
• 10:22
  Speaker 7: out bays there is kind of thing in this case,
• 10:23
  Speaker 7: in HRG case, in the majority of cases it does.
• 10:26
  Speaker 7: So Europe has been less problematic for this, and certainly
• 10:32
  Speaker 7: instead of taking supplements. People should be taking well tested
• 10:35
  Speaker 7: and tried pharmaceuticals. So and I think, but Scarlett, to
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  Speaker 7: your point, women's health has been one area where I
• 10:42
  Speaker 7: don't think there's been enough attention paid to it. Some
• 10:45
  Speaker 7: people blame the fact that majority of pharma executives are mailed,
• 10:49
  Speaker 7: therefore they don't think about it.
• 10:51
  Speaker 5: I don't think you should think like that.
• 10:52
  Speaker 7: I think the removal of a black box warning here
• 10:55
  Speaker 7: does enable to start thinking, oh, well, maybe we can
• 10:58
  Speaker 7: do something more. Now, stay with us.
• 11:02
  Speaker 3: More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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• 11:22
  Speaker 3: M and A Monday.
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  Speaker 2: We had a big deal in the construction business, the
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  Speaker 2: building material business. So we're gonna get right to that.
• 11:30
  Speaker 2: James Wilcock, Bloomberg UK Politics Reporter. See our h to
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  Speaker 2: buy rival Arkosa in a building material firm's biggest deal ever.
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  Speaker 2: So big deal. Spencer, talk to us about this transaction.
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  Speaker 2: I don't think many people know of these two companies
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  Speaker 2: talk to us about these companies and what they're trying
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  Speaker 2: to do with this deal.
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  Speaker 5: Yeah, yeah, thank you for having me on.
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  Speaker 9: So c r H one of the largest global materials producers,
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  Speaker 9: may make aggregates, cemant concrete staff, your presence here in
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  Speaker 9: the US as well as in Europe.
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  Speaker 5: We're listed in London.
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  Speaker 9: Have moved to a US primary listing only increasing their
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  Speaker 9: US exposure. Like you said, Arcosa a US competitor, large
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  Speaker 9: in the aggregates business. And then while on the structural
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  Speaker 9: solution side, so making a variety of infrastructure items, light poles,
• 12:19
  Speaker 9: traffic signs, large equipment that goes kind of over highways, roads, bridges,
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  Speaker 9: things like that, as well as wind turbines. So very
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  Speaker 9: large combination here this morning. We'll really kind of deep in.
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  Speaker 9: CICHS is tied to the US as well as our
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  Speaker 9: aggate's portfolios. So now the largest US aggregates producer about
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  Speaker 9: two hundred and sixty five million tons per year. A
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  Speaker 9: very large deal here, the largest in their history. Very inquisitive,
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  Speaker 9: about thirty eight acquisitions last year alone, but mainly Bolton's
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  Speaker 9: that was about four billion total. So we're not used
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  Speaker 9: of seeing these large deals by cich but it's not
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  Speaker 9: too surprising given that they like to kind of build
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  Speaker 9: their portfolio through acquisitions and they're not scared of kind
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  Speaker 9: of dipping their toes into different alleys.
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  Speaker 5: Very large, wide variety of a portfolio they have.
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  Speaker 6: So given all this, Spencer, how does this fit in
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  Speaker 6: with the outlook that you and your team have published
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  Speaker 6: on global building materials for the second half of this year.
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  Speaker 3: How does this bigger SEERH fit into it.
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  Speaker 9: Yeah, so Syrix the largest obviously producer, but really the
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  Speaker 9: aggregates is kind of where we see the most strength.
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  Speaker 9: Agrates are very durable material, really used in highways, roads, bridges,
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  Speaker 9: and then construction because of their the primary ingredient for concrete.
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  Speaker 5: So this bolster is their portfolio.
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  Speaker 9: We've seen a lot of competitors move to the US,
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  Speaker 9: move into the US, a lot of competition on the
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  Speaker 9: aggregate side, and you see Vulcan and Martin Marietta really
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  Speaker 9: change their portfolios to be very aggregates focused. You have
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  Speaker 9: competitors in Mexico like Semex, even Cementos Argos talking about,
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  Speaker 9: you know, getting their foot in the door with aggregates
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  Speaker 9: in the US. So acquisitions are becoming very competitive and
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  Speaker 9: this is CICH.
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  Speaker 5: Kind of leaning into that. We have a good outlook
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  Speaker 5: for the agregates as well.
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  Speaker 9: Allow of this to be infrastructure givens the US obviously
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  Speaker 9: spending on roads, bridges, and highways near record highs from
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  Speaker 9: the infrastructure build in twenty twenty one. There's of a
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  Speaker 9: new built right now coming through that could pass here
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  Speaker 9: for even more funding, so CH really leaning into that.
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  Speaker 9: And then you have kind of the solutions side, the
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  Speaker 9: structural side, which is infrastructure, so you've like the data
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  Speaker 9: center build out, things like that, and the energy infrastructure
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  Speaker 9: around that. CH is now a player in that as well,
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  Speaker 9: so they've said before they're working on over one hundred
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  Speaker 9: data center projects currently. That's the smaller part of the
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  Speaker 9: portfolio still, but that's growing and that's got to high
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  Speaker 9: demand and those are quick turns, so those projects turned
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  Speaker 9: into shovels in the ground, as you would say, very quickly.
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  Speaker 5: So it's a good growth avenue for them. But leaning
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  Speaker 5: into aggregates.
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  Speaker 9: Not surprising, but given the size of an acquisition historically
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  Speaker 9: bolt on acquisitions, this is a very large one for them.
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  Speaker 2: US construction services business here, as you mentioned, there's a
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  Speaker 2: lot going on out there. Is it a fragmented industry
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  Speaker 2: is a consolidated industry. What are we going to see
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  Speaker 2: more deals like this?
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  Speaker 6: Do you think?
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  Speaker 5: Yeah?
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  Speaker 9: The construction services very fragments it, and CH is a
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  Speaker 9: large player in that. Most like I've mentioned earlier, most
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  Speaker 9: of the other players are really on the material side.
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  Speaker 9: Ch is accepted that they want to be the vertically
• 14:56
  Speaker 9: integrated player, the largest in the space. So you can
• 14:59
  Speaker 9: can you know, kind of contract them for your asphalt paving.
• 15:03
  Speaker 9: They will provide the asphalt for that as well the equipment.
• 15:05
  Speaker 9: So they want to be the one stop shop for
• 15:08
  Speaker 9: their customers. Other producers have moved away from that model.
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  Speaker 9: You know, they've sold off those businesses, they've moved away
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  Speaker 9: from the concrete. They really want to focus on aggregates,
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  Speaker 9: and that's where we see some of the strongest pricing power,
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  Speaker 9: strongest demand trends, very durable even in down cycles. Aggregates
• 15:22
  Speaker 9: can still get pricing growth while you know, concrete, cement,
• 15:25
  Speaker 9: asphalt can see pricing declines or flat pricing for years.
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  Speaker 9: So leaning into that and then what the service is offering,
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  Speaker 9: kind of their vertically vertical integration really separates them. Still
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  Speaker 9: traded a discount of their peers on a multiple basis.
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  Speaker 9: When you look at some of the pure play aggregates
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  Speaker 9: names just because the demand and the pricing is there,
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  Speaker 9: and then series do that have that, but they are
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  Speaker 9: now the largest producer of agates in the US, and
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  Speaker 9: then they're bolstering their portfolio and they'll continue to acquire.
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  Speaker 5: It looks like.
• 15:52
  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: Listening to the Bloomberg Intelligence podcast. Catch us live weekdays
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  Speaker 2: Alan Greenspan, the former Federal Reserve chairman, has died at
• 16:16
  Speaker 2: the age of one hundred. He served for eighteen years
• 16:20
  Speaker 2: as FED chairman. We've been using the morning here to
• 16:23
  Speaker 2: chat with members of Global Wall Street to get their
• 16:25
  Speaker 2: thoughts on mister green Span and his legacy and his
• 16:28
  Speaker 2: term in office. Dennis Lockhart Joints is here, a former
• 16:31
  Speaker 2: Atlanta Fed president on Zoom from Atlanta. Dennis, thanks so
• 16:35
  Speaker 2: much for joining us here. We'd love to get your
• 16:37
  Speaker 2: thoughts on your perception of Chairman Greenspan and his legacy.
• 16:43
  Speaker 8: Oh I didn't work with him directly, but I certainly
• 16:46
  Speaker 8: heard a lot about him and his style of managing
• 16:49
  Speaker 8: the Federal Open Market Committee when when I was there
• 16:53
  Speaker 8: at the FED, certainly a great chair eighteen and a
• 16:58
  Speaker 8: half years, I would say for fifteen of those eighteen
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  Speaker 8: and a half years he presided over the great moderation
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  Speaker 8: and his overall approach to policy was very successful, as
• 17:13
  Speaker 8: so often happens, sometimes long periods of success, So the
• 17:19
  Speaker 8: seeds of trouble. That's the insight that Hyman Minsky had,
• 17:25
  Speaker 8: and I agree with it, and I think in the
• 17:28
  Speaker 8: last three years of Alan Greenspan's tenure he may have
• 17:34
  Speaker 8: not seen the signs of the coming real estate crisis
• 17:38
  Speaker 8: and perhaps relied too heavily on his basic belief in
• 17:46
  Speaker 8: the market system and his light touch in terms of regulation.
• 17:51
  Speaker 6: Ira Jersey, or chief Interest rate Strategist, was just saying
• 17:54
  Speaker 6: that Greenspan understood the markets in a way that more
• 17:56
  Speaker 6: recent federal Federal Reserve chairs haven't.
• 18:00
  Speaker 3: Do you think that played a role in his, perhaps.
• 18:04
  Speaker 6: His tenure, especially in the last three years, laying the
• 18:06
  Speaker 6: groundwork for some of the things that happened starting in
• 18:09
  Speaker 6: two thousand and seven.
• 18:12
  Speaker 8: Yes, I do, and he not only understood the markets.
• 18:15
  Speaker 8: I think he understood the economy at a detailed level
• 18:19
  Speaker 8: when I was there. As part of his legend was
• 18:22
  Speaker 8: that he could recite very arcane data from particular sectors
• 18:28
  Speaker 8: a fucking sector or the housing sector. He knew quite
• 18:35
  Speaker 8: literally hundreds of data streams or data series intimately and
• 18:44
  Speaker 8: really understood the economy. So I think that can sometimes
• 18:49
  Speaker 8: breed confidence as things are turning in a way. That's
• 18:54
  Speaker 8: what happened, Dennis.
• 18:56
  Speaker 2: We now how they knew. Chairman of the Federal Reserve
• 18:58
  Speaker 2: Kevin Walsh. The market heard from mister Walsh for the
• 19:01
  Speaker 2: first time last week with this statement and with the
• 19:04
  Speaker 2: press conference. What was your takeaway?
• 19:08
  Speaker 8: I thought he made a strong start to his incumbency
• 19:11
  Speaker 8: in the chair's job. I went into the meeting thinking
• 19:16
  Speaker 8: he might have to choose between being a change agent
• 19:20
  Speaker 8: or being a kind of institutionalist who respected the collaboration
• 19:27
  Speaker 8: and the collegiality of the FAED. He managed to, I think,
• 19:33
  Speaker 8: serve both of those masters. In his first meeting, he
• 19:37
  Speaker 8: was forceful and reaffirming the commitment to bringing inflation down.
• 19:42
  Speaker 8: He launched his five task forces. I thought it was
• 19:47
  Speaker 8: it got to be almost humorous when he said we
• 19:50
  Speaker 8: have a task force for that in the press conference,
• 19:54
  Speaker 8: but you know, he showed that he is going to
• 19:57
  Speaker 8: try to reform and improve things about the way the
• 20:02
  Speaker 8: institution works, but do it in a collaborative way. And
• 20:08
  Speaker 8: I thought that was impressive how he was able to
• 20:13
  Speaker 8: pull that balancing act off.
• 20:15
  Speaker 6: Yeah, in some circles people were saying that there's a
• 20:17
  Speaker 6: task for the task force for that was kind of
• 20:20
  Speaker 6: a drinking game, or could be a drinking game, albeit
• 20:23
  Speaker 6: at about two thirty in the afternoon. When it comes
• 20:26
  Speaker 6: to the hawkish hold that we got on Wednesday, there
• 20:30
  Speaker 6: are a lot of questions heading into that FED meeting,
• 20:32
  Speaker 6: Dennis about whether Kevin Worsh spoke for the committee. He
• 20:36
  Speaker 6: definitely spoke for the committee. Did he speak for himself
• 20:38
  Speaker 6: you think in being that hawkish.
• 20:42
  Speaker 8: Well, one of the things I was watching for as
• 20:45
  Speaker 8: we went into the press conference is whether he would
• 20:48
  Speaker 8: be clear when he was speaking for the committee and
• 20:51
  Speaker 8: clear when he was speaking for himself. And there was
• 20:54
  Speaker 8: only one or two incidents where he had to make
• 20:56
  Speaker 8: that point clearly, and I think he did it. I
• 21:02
  Speaker 8: think that maybe we have to read between the lines
• 21:05
  Speaker 8: his choice of not submitting a forecast and a dot
• 21:10
  Speaker 8: was speaking for himself. At the same time, he characterized
• 21:15
  Speaker 8: the way the committee came out as reflected in the SEP.
• 21:20
  Speaker 8: It turned out in this press conference the SEP is
• 21:24
  Speaker 8: the only thing we really had that gives you a
• 21:26
  Speaker 8: sense of the mind of the committee looking forward, and
• 21:29
  Speaker 8: that to me was very clearly hawkish.
• 21:33
  Speaker 2: Dennis, we have oil continuing to come down, and a
• 21:36
  Speaker 2: lot of folks would say, all right, inflation problems fixing itself.
• 21:39
  Speaker 2: Others saying, whoa, whoa, whoa, We've got more. It's more
• 21:41
  Speaker 2: than energy out there in terms of inflationary pressures. How
• 21:44
  Speaker 2: do you think the FED should look at inflation these days?
• 21:48
  Speaker 8: Well, certainly the FED you look at inflation broadly, using
• 21:53
  Speaker 8: you know, an approach that's I don't know, more like
• 21:59
  Speaker 8: a wide array of inflation data, as opposed to focusing
• 22:05
  Speaker 8: on a single data point like PCE core PCE headline.
• 22:13
  Speaker 8: My own view is that we should be cautious about
• 22:15
  Speaker 8: assuming that oil prices snap back to the pre war levels.
• 22:22
  Speaker 8: I think there are a lot of reasons to just
• 22:24
  Speaker 8: be concerned and worried that the price pressures will persist
• 22:29
  Speaker 8: and conceivably the improvement we've seen in the last few days,
• 22:34
  Speaker 8: depending on how the negotiations go, could reverse. So you know,
• 22:39
  Speaker 8: I'm being very cautious about predicting that oil prices are
• 22:43
  Speaker 8: going to come down and the world is going to
• 22:44
  Speaker 8: revert to pre work conditions.
• 22:49
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