Latest / Bloomberg Intelligence / Consumer Sentiment Data, Trump Tariffs

Transcript

Consumer Sentiment Data, Trump Tariffs · Bloomberg Intelligence

• 0:02
  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
• 0:10
  Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
• 0:14
  Speaker 1: Eastern on Applecarplay and Android Auto with the Bloomberg Business app.
• 0:18
  Speaker 1: Listen on demand wherever you get your podcasts, or watch
• 0:21
  Speaker 1: us live on YouTube.
• 0:24
  Speaker 2: The University of Michigan sentiment data came out today weaker
• 0:26
  Speaker 2: than expected. Sixty four point seven was a headline number.
• 0:29
  Speaker 2: The consensus was sixty seven point eight last month sixty
• 0:32
  Speaker 2: seven point It's a little bit weaker there. Let's break
• 0:34
  Speaker 2: it down. Johanne Schue joins US Surveys of Consumers Director
• 0:38
  Speaker 2: at the University of Michigan. Joanne, what did the number
• 0:41
  Speaker 2: numbers tell you today?
• 0:44
  Speaker 3: Essentially, consumers are feeling less optimistic about the future inflation. Sorry,
• 0:49
  Speaker 3: consumer sentiment declined over the course of the month of February,
• 0:53
  Speaker 3: and consumers do see that things the outlook is looking
• 0:56
  Speaker 3: a bit weaker than it was about a month ago.
• 0:59
  Speaker 3: The main reason for this is that they're becoming much
• 1:01
  Speaker 3: more concerned that inflation is going to come surging back
• 1:04
  Speaker 3: in the future. Inflation expectations really got quite a bit worse,
• 1:09
  Speaker 3: both in the short term as long as the long
• 1:10
  Speaker 3: as well as the long term.
• 1:12
  Speaker 4: So all five components of the index deteriorated, including a
• 1:16
  Speaker 4: decline in buying conditions for big ticket items. How do
• 1:20
  Speaker 4: you interpret, You know, what kind of macro signal you
• 1:23
  Speaker 4: get out of something like that.
• 1:25
  Speaker 3: Consumers are seeing signs of weakening throughout the economy. We
• 1:29
  Speaker 3: see it again in terms of buying conditions for durables.
• 1:33
  Speaker 3: So that's mainly because people are really worried that it
• 1:35
  Speaker 3: might be too late to avoid tariff related price hikes
• 1:38
  Speaker 3: in the very near future. But consumers are also expecting
• 1:41
  Speaker 3: unemployment rates to get worse over the next year, so
• 1:45
  Speaker 3: they're seeing weaknesses, potential weaknesses and business conditions in their
• 1:49
  Speaker 3: personal finances as well as in inflation and big buying
• 1:54
  Speaker 3: conditions for big ticket items.
• 1:56
  Speaker 2: Our moves of this magnitude again sixty four point seven
• 2:00
  Speaker 2: and was the actual sixty seven point eight was kind
• 2:02
  Speaker 2: of last month. It was also the consensus for this month.
• 2:05
  Speaker 2: Our misses of this magnitude are they common in your
• 2:07
  Speaker 2: survey work.
• 2:09
  Speaker 3: What's a little bit unusual is that we're seeing declines
• 2:12
  Speaker 3: across the board usually the five index components. Some are
• 2:15
  Speaker 3: moving up, some might go sideways, and some might move down,
• 2:20
  Speaker 3: but this time we're seeing all five index components all
• 2:23
  Speaker 3: moving down at the same time, both inflation expectations figures
• 2:27
  Speaker 3: moving getting worse at the same time, as well as
• 2:30
  Speaker 3: unemployment expectations. This not necessarily saying people think things are
• 2:34
  Speaker 3: getting a lot worse, but they're seeing concerning signs across
• 2:38
  Speaker 3: the economy.
• 2:38
  Speaker 2: Interesting and again, the Universe emission five to ten year
• 2:41
  Speaker 2: inflation a look. The consensus was three point three percent
• 2:45
  Speaker 2: was the outlook. It came into three point five percent,
• 2:47
  Speaker 2: So Joan was mentioning a little bit higher there.
• 2:49
  Speaker 5: A little bit.
• 2:50
  Speaker 2: Concerning joeyan Shoe Surveys of Consumers, Director at the University
• 2:53
  Speaker 2: of Michigan. They don't just make good football players and
• 2:55
  Speaker 2: make some pretty good economists out there in Michigan.
• 3:00
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 3:04
  Speaker 1: weekdays at ten am Eastern on Apple, Colarcklay and Android
• 3:07
  Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
• 3:10
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 3:14
  Speaker 2: Looking for some trends in the marketplace today, you know,
• 3:17
  Speaker 2: just kind of a risk off kind of day. The
• 3:19
  Speaker 2: United Healthcare News weighing on the DAL certainly, but people
• 3:22
  Speaker 2: trying to get a sense of economic data and earnings
• 3:25
  Speaker 2: growth and all that good stuff. Looks like the Fed's
• 3:27
  Speaker 2: going to be more less on the sidelines for most
• 3:30
  Speaker 2: of this year. Katiekiminski joins us. She's a chief research
• 3:32
  Speaker 2: strategist Alpha Simplex Group up there in Boston, Mass Area.
• 3:38
  Speaker 2: Lots of MIT stuff going on in her resume. I
• 3:40
  Speaker 2: don't know what's going on there. It's a lot of math,
• 3:42
  Speaker 2: I think, Katie, thanks so much for joining us here.
• 3:44
  Speaker 2: How are you guys thinking about these markets today? Where
• 3:48
  Speaker 2: are you guys seeing interest, opportunity value?
• 3:53
  Speaker 6: Well, to be honest, it's been a little bit of
• 3:55
  Speaker 6: a reversal the last two days. We've generally been following
• 3:59
  Speaker 6: that US exceptionalism theme across multiple asset classes, and you know,
• 4:04
  Speaker 6: it seems to be stumbling a little bit, and you know,
• 4:07
  Speaker 6: the market is definitely a little concerned.
• 4:10
  Speaker 7: Today really doesn't seem to be any different from that.
• 4:13
  Speaker 6: So we'll have to see what that means, I guess
• 4:15
  Speaker 6: in the next few weeks.
• 4:17
  Speaker 4: How are you thinking about correlations between stocks and bonds
• 4:21
  Speaker 4: right now? I know we said it was a risk
• 4:22
  Speaker 4: off day, but I mean today we're seeing I guess
• 4:26
  Speaker 4: people piling into treasuries exiting stocks. I guess that could
• 4:30
  Speaker 4: make sense with the risk theme, but we haven't seen
• 4:32
  Speaker 4: that correlation kind of play out every single day over
• 4:35
  Speaker 4: the last few months.
• 4:36
  Speaker 6: That's that's a really good point because we actually have
• 4:39
  Speaker 6: seen on aggregate positive stock bond correlation often more recently.
• 4:45
  Speaker 6: And what that means is that the market is trying
• 4:48
  Speaker 6: to figure out how much is inflation important, because that's
• 4:52
  Speaker 6: what we've anytime the market's concerned about inflation, the correlation
• 4:56
  Speaker 6: being stocks and bonds changes quite a bit. But today
• 4:59
  Speaker 6: just seems to be a classic risk off type of
• 5:02
  Speaker 6: day where you know, people are nervous, consumer confidences down,
• 5:08
  Speaker 6: long term inflation expectations are up.
• 5:10
  Speaker 7: So I think people are just a little nervous about
• 5:12
  Speaker 7: what all this.
• 5:13
  Speaker 5: Means, Katie.
• 5:15
  Speaker 2: One of the trades that's been pretty solid for a
• 5:17
  Speaker 2: lot of people for a long time has been just
• 5:19
  Speaker 2: buy the dollar. It was certainly part of, you know,
• 5:22
  Speaker 2: quote unquote the Trump trade. We've had a little bit
• 5:25
  Speaker 2: of a pullback in the dollar here. How do you
• 5:27
  Speaker 2: think about that long dollar trade here?
• 5:31
  Speaker 6: Well, the long dollar trade, you know, just had everything
• 5:34
  Speaker 6: going for it earlier this year, you know, you really
• 5:37
  Speaker 6: saw given the FED being on the sidelines, that means
• 5:40
  Speaker 6: that there's less pressure on the dollar. Uh, the idea
• 5:43
  Speaker 6: that the US was looking strong and that was making
• 5:46
  Speaker 6: the dollars strong as well. But as some of those
• 5:49
  Speaker 6: narratives have petered out a little bit or perhaps extended
• 5:52
  Speaker 6: quite a bit.
• 5:53
  Speaker 7: We've started to see some reversion in that theme.
• 5:56
  Speaker 6: This month, and so I think a lot of people
• 5:58
  Speaker 6: are starting to wonder, you know, could this theme come
• 6:01
  Speaker 6: back or is there just a lot of noise around
• 6:04
  Speaker 6: a lot of the geopolitical and also the changes in
• 6:07
  Speaker 6: the US administration that could sort of shift dynamics.
• 6:11
  Speaker 4: Actually have a colleague on the FX team you asked
• 6:15
  Speaker 4: me today, have you seen anyone turning bearish on the dollar?
• 6:20
  Speaker 4: So maybe I'll throw the question to Katie. Is it
• 6:23
  Speaker 4: time to turn bearish on the US dollar?
• 6:27
  Speaker 7: That is actually a good question.
• 6:28
  Speaker 6: I think people are asking that question, especially versus things
• 6:32
  Speaker 6: like the yen where there's a more clear narrative, you know,
• 6:36
  Speaker 6: where you know boj is doing something different. But I
• 6:39
  Speaker 6: think the question is just is this just a reversion
• 6:43
  Speaker 6: from the consistent theme or you know, have we kind
• 6:47
  Speaker 6: of shifted course?
• 6:49
  Speaker 7: And so far it doesn't look like it yet, but there.
• 6:51
  Speaker 6: Has been some indication that the dollar is backed up,
• 6:54
  Speaker 6: particularly this month.
• 6:56
  Speaker 2: Another trend that's been pretty pervasive has been gold here
• 7:01
  Speaker 2: and I you know, the Bloomberg Intelligence commodity strategist Michael
• 7:04
  Speaker 2: mcglohan is said, for years and years and years in
• 7:06
  Speaker 2: terms of commodities by gold and short everything else.
• 7:10
  Speaker 5: What's that.
• 7:11
  Speaker 2: I guess the fundamentals for gold look really solid.
• 7:15
  Speaker 6: Yeah, I mean, gold has been one of the tried
• 7:18
  Speaker 6: and true trades for trend in the last few months.
• 7:21
  Speaker 6: I mean, of course it reverted a little bit this week,
• 7:24
  Speaker 6: but there just seems to be a lot of structural
• 7:27
  Speaker 6: reasons why people want to hold gold. There's a lack
• 7:31
  Speaker 6: of supply of gold, people don't want to loan out gold,
• 7:33
  Speaker 6: so it just seems to be sort of that safe
• 7:36
  Speaker 6: haven that it, you know, especially in.
• 7:38
  Speaker 7: A world where there's you know, more of supply chain
• 7:41
  Speaker 7: and other you.
• 7:42
  Speaker 6: Know it issues globally across central banks. So I think,
• 7:46
  Speaker 6: you know, gold seems to be your sort of safe
• 7:48
  Speaker 6: haven asset and that doesn't seem to be stopping yet.
• 7:53
  Speaker 4: I have to ask a question about managed futures because
• 7:59
  Speaker 4: Katie wrote a book about managed futures And without getting
• 8:03
  Speaker 4: too technical here, I do write about ETFs and we
• 8:06
  Speaker 4: have seen this year Blackrock Invesco, and I also believe
• 8:11
  Speaker 4: Fidelity file for Managed Futures ETF.
• 8:16
  Speaker 7: What do you make of this?
• 8:18
  Speaker 4: Is this like a really a vehicle that should be
• 8:22
  Speaker 4: in the ETF wrapper and you know, something that retail
• 8:26
  Speaker 4: should be looking into.
• 8:29
  Speaker 6: I would say absolutely yes, it's a very exciting and
• 8:33
  Speaker 6: you know, we wrote this really exciting paper recently about
• 8:36
  Speaker 6: this new fields or the managed futures ETF, the rise
• 8:40
  Speaker 6: of it. And what's exciting is since there were changes
• 8:44
  Speaker 6: in US transparency in the regulations for active ETFs, now
• 8:49
  Speaker 6: there's a lot more uh, you know, ability to incorporate
• 8:53
  Speaker 6: dynamic and active strategies in an ETF rapper, which allows
• 8:57
  Speaker 6: people to you know, invest in such strategies on an
• 9:02
  Speaker 6: inter day basis as opposed to sort of a typical
• 9:04
  Speaker 6: mutual fund structure. So I think you're going to see
• 9:07
  Speaker 6: a lot of opportunities for beta like products that give
• 9:13
  Speaker 6: investors access to a dynamic range of asset classes over time.
• 9:18
  Speaker 6: So it's an exciting field and something I'm super excited about.
• 9:22
  Speaker 7: So thanks for asking.
• 9:22
  Speaker 2: That's awesome. Who needs I mean ETFs for everything. Katie
• 9:26
  Speaker 2: Comminski ch you Research Strategists, Alpha Simplex group up there
• 9:30
  Speaker 2: in Cambridge.
• 9:30
  Speaker 1: Mess You're listening to the Bloomberg Intelligence Podcast. Catch us
• 9:36
  Speaker 1: live weekdays at ten am Eastern on Apple clock Play
• 9:39
  Speaker 1: and Android Auto with the Bloomberg Business App. Listen on
• 9:42
  Speaker 1: demand wherever you get your podcasts, or watch us live
• 9:45
  Speaker 1: on YouTube.
• 9:47
  Speaker 2: Stock story of today, United Healthcare off about nine percent.
• 9:50
  Speaker 8: Here.
• 9:50
  Speaker 2: We've got some oversight potentially some people probing, some regulators
• 9:54
  Speaker 2: probing United Health. We want to get some of the
• 9:57
  Speaker 2: details there. We go to Glen Mooseef, Bloomberg Intelligence senior
• 10:00
  Speaker 2: Ecroyannel's covering some of these healthcare names here. Uh, Glenn
• 10:04
  Speaker 2: talks about you and h What's what is the news today?
• 10:06
  Speaker 2: Moving the stock?
• 10:08
  Speaker 5: So the news good morning. First of all, good afternoon.
• 10:11
  Speaker 5: The news basically that the Wolsetet Journal broke the story
• 10:14
  Speaker 5: that there is a Department of Justice investigation into Medicare
• 10:20
  Speaker 5: advantage up quoting from United Health group. Upcoting means that
• 10:27
  Speaker 5: doctors usually upcode the diagnosis, make diagnosis more acute, so
• 10:33
  Speaker 5: companies likedic like United for example, or any other Medicare
• 10:36
  Speaker 5: advantage plan get much higher payments from the government, and
• 10:41
  Speaker 5: that's the issue.
• 10:42
  Speaker 4: How do you anticipate United is going to respond to this?
• 10:47
  Speaker 5: So United issued a very short statement saying that Wolf
• 10:52
  Speaker 5: Street Journal has been sort of pursuing, you know, putting
• 10:59
  Speaker 5: in that gative spin on what United Health Group is
• 11:03
  Speaker 5: doing and completely unite the accusations. That being said, Department
• 11:09
  Speaker 5: of Justice is investigating and you'll see what common is
• 11:15
  Speaker 5: it for?
• 11:17
  Speaker 2: I mean, this goes to the heart of what an
• 11:19
  Speaker 2: insurance company does. Diagnosis, you know, submit, get payment. I
• 11:24
  Speaker 2: mean that's what they do. How common or uncommon is
• 11:26
  Speaker 2: it for the government to look into.
• 11:28
  Speaker 5: These type of investigations are very common? Common or relatively okay,
• 11:33
  Speaker 5: this is nothing new usually, so investigations key. The other
• 11:38
  Speaker 5: thing is investigations can take up to a few years.
• 11:42
  Speaker 5: Usually they have resolved in the settlement. Government is looking
• 11:46
  Speaker 5: to make some money and company just wants to put
• 11:51
  Speaker 5: it behind them.
• 11:52
  Speaker 2: And they said, what is the reputation of United Health
• 11:55
  Speaker 2: that they's such a monster company? What's the reputation industry
• 11:58
  Speaker 2: for this kind of stuff?
• 12:00
  Speaker 5: Well, it's very difficult to say. Especially over the last
• 12:04
  Speaker 5: six plus month, you know, the company has been heavily
• 12:08
  Speaker 5: scrutinized after the murder of one of the executives. That
• 12:14
  Speaker 5: being said, you know, every company, as I always said,
• 12:17
  Speaker 5: is there to make Every business is there to make money.
• 12:21
  Speaker 5: So you know, unless they're doing something illegal, which I
• 12:25
  Speaker 5: you know, very difficult to prove. You know, I don't
• 12:28
  Speaker 5: think there is anything.
• 12:30
  Speaker 8: What do you make at the share price reaction?
• 12:33
  Speaker 4: Is is it an overreaction to this news Because the
• 12:37
  Speaker 4: company's medicare advantage division it is kind of small compared
• 12:40
  Speaker 4: to the overall business, right.
• 12:43
  Speaker 5: Right, so, so relative to overall business, it's pretty small,
• 12:48
  Speaker 5: but United is the largest Medicare advantage plan in the
• 12:52
  Speaker 5: United States. That's one thing. Another thing is a lot
• 12:56
  Speaker 5: of revenue comes from Medicare advantage for United It and
• 13:01
  Speaker 5: the other thing that I think the reaction of the
• 13:03
  Speaker 5: stock where it is, even though I do think that
• 13:06
  Speaker 5: it's probably an overreaction, which sort of you know, today's
• 13:11
  Speaker 5: use adds to what happened over the last six months
• 13:14
  Speaker 5: with the company, you know, all the negative sentiment. But
• 13:18
  Speaker 5: I also think that investors are thinking that today's announcement
• 13:23
  Speaker 5: is sort of the Pambindi introducing herself and also partly
• 13:31
  Speaker 5: you know, the Trump administrations showing that federal agency are
• 13:36
  Speaker 5: not the only target of you know, waste for the
• 13:40
  Speaker 5: abuse those agenda.
• 13:42
  Speaker 2: So you think there is a political aspect to this pot.
• 13:46
  Speaker 5: I mean, I can't say for sure, but you know,
• 13:49
  Speaker 5: what's what's.
• 13:50
  Speaker 2: The feeling about the managed care business in general? See
• 13:52
  Speaker 2: the stocks haven't been great performers. Has the market feel
• 13:54
  Speaker 2: about the managing care business?
• 13:56
  Speaker 5: So, you know, first of all, United sets the tone
• 13:59
  Speaker 5: for the whole industry, right, It's the biggest company and
• 14:02
  Speaker 5: sort of manage care companies usually trade in tandem with
• 14:06
  Speaker 5: United sort of setting the tone and everyone else follows
• 14:11
  Speaker 5: as United sort of has these issues that they sort
• 14:15
  Speaker 5: of try to navigate. You know, the whole industry is
• 14:20
  Speaker 5: sort of under pressure right because of it. So I
• 14:25
  Speaker 5: think over the last couple of years medical costs were
• 14:29
  Speaker 5: going up. Everyone is expecting medical costs to continue to
• 14:33
  Speaker 5: go up. My thesis that it's gonna they're gonna start
• 14:37
  Speaker 5: to ease because three years after the post pandemic recovery began,
• 14:43
  Speaker 5: I think there are less people that will sort of
• 14:46
  Speaker 5: seek here at the levels that they did after differing
• 14:49
  Speaker 5: seeing a doctor during the pandemic. So that could sort
• 14:55
  Speaker 5: of provide a tailviinon for United. Earnings from Hunt as
• 15:00
  Speaker 5: well as the only Indus ship. But we'll see how
• 15:02
  Speaker 5: it plays out, all.
• 15:03
  Speaker 2: Right, Glenn, thanks so much for journey. US really appreciate it.
• 15:05
  Speaker 2: Glenn Losev. He's a senior equianols Bloomberg Intelligence, following US
• 15:09
  Speaker 2: managed care companies, United Healthcare the big mover in the market.
• 15:14
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch US live
• 15:17
  Speaker 1: weekdays at ten am Eastern on Applecarcklay and Android Auto
• 15:21
  Speaker 1: with the Bloomberg Business App. Listen on demand wherever you
• 15:24
  Speaker 1: get your podcasts, or watch US live on YouTube.
• 15:28
  Speaker 2: Speaking of tariffs, let's get the latest here, because it
• 15:30
  Speaker 2: is a fluid situation. We know that tariffs are an
• 15:33
  Speaker 2: economic policy that President Trump likes to employ in various ways.
• 15:37
  Speaker 2: And the current joins us Bloomberg Global Economy Reporter and
• 15:41
  Speaker 2: to kind of where are we here on the tariffs?
• 15:45
  Speaker 2: I mean, I think people are trying to get a
• 15:46
  Speaker 2: sense of what tariff discussion is real, what tariff discussion
• 15:51
  Speaker 2: is maybe just a negotiating point with other countries. How's
• 15:56
  Speaker 2: the thinking around tariff's.
• 15:58
  Speaker 8: Evolving well and moving fast. If you consider the action
• 16:02
  Speaker 8: so far, there has been a ten percent tariff put
• 16:05
  Speaker 8: on all goods from China. That's actually happening. It's real,
• 16:08
  Speaker 8: and it's it's new because it's covering all of the
• 16:10
  Speaker 8: goods from China, not just targeted. Then, of course, we
• 16:13
  Speaker 8: have various executive orders that have been signed asking the
• 16:18
  Speaker 8: Trade Represents, the Office and Cumberence Apartment, excuse me to
• 16:20
  Speaker 8: go out and analyze how the US to doing business
• 16:23
  Speaker 8: with the rest of the world. They're going to come
• 16:25
  Speaker 8: back with a lot of reports by April one, and
• 16:28
  Speaker 8: this in the meantime, we will see new tariffs going
• 16:31
  Speaker 8: steel around the middle of March. I think it is so. Yes,
• 16:34
  Speaker 8: there is obviously some rehetoric and a lot of headlines,
• 16:37
  Speaker 8: but at the same time, there is also concrete action
• 16:39
  Speaker 8: that's happening, and we're seeing companies respond, we're seeing consumers respond.
• 16:44
  Speaker 8: You just had joined talking there about the impact and
• 16:46
  Speaker 8: consumer sentiment, and we're speaking to companies who make similar
• 16:49
  Speaker 8: points as well, and.
• 16:50
  Speaker 4: That you have a wonderful piece of reporting out on
• 16:54
  Speaker 4: the terminal today all about small businesses and how they're
• 16:58
  Speaker 4: reacting to the prospect of tariffs and the tariffs that
• 17:02
  Speaker 4: are already in place.
• 17:03
  Speaker 7: Tell us about what you're reporting.
• 17:05
  Speaker 8: Showed, sure, well, So the thinking when it comes to
• 17:08
  Speaker 8: tariff is that big multinational companies are better resourced, they
• 17:12
  Speaker 8: can shift supply chains, they can adapt, they can maybe
• 17:15
  Speaker 8: absorb somebody hit into their margins. But the real pain
• 17:19
  Speaker 8: comes to those small business operators, those small manufacturing in
• 17:23
  Speaker 8: US who rely on saying import the components from China
• 17:26
  Speaker 8: and the rest of the world. And we found out
• 17:28
  Speaker 8: we spoke to a lot of these people. They make
• 17:29
  Speaker 8: all kinds of products, whether from lighting to fasteners, two
• 17:34
  Speaker 8: tonke toys, and all of them made the same point
• 17:37
  Speaker 8: that if tariffs on the goods they're bringing in at
• 17:41
  Speaker 8: port go up, then their margins are at a point
• 17:44
  Speaker 8: or squeeze, the point where they can't absorb that and
• 17:47
  Speaker 8: they're going to have to pass those costs on their consumers.
• 17:49
  Speaker 8: So it's a small business people warning about the hit
• 17:52
  Speaker 8: to their companies, hit their investment plans, and the fact
• 17:54
  Speaker 8: that they have the pac these costs along.
• 17:56
  Speaker 2: What's the feeling and about reciprocal tariffs if if in
• 18:00
  Speaker 2: fact the US does move forward on tariffs against certain countries,
• 18:04
  Speaker 2: is he just the expectation that almost a knee jerk
• 18:08
  Speaker 2: reaction to those countries will react and put tariffs on
• 18:11
  Speaker 2: our goods as well.
• 18:13
  Speaker 8: I think that's the reaction function for training partners. We've
• 18:15
  Speaker 8: already had China respond. China's put tariffs on US agricultural
• 18:19
  Speaker 8: equipment going to China, for example, and have put some
• 18:23
  Speaker 8: many trust investigations on US companies. The EU Trade Commissioner
• 18:27
  Speaker 8: was in DC this week and I went along to
• 18:28
  Speaker 8: his events, and he was making the point that he
• 18:30
  Speaker 8: came here to talk deals. They're happy to buy alng
• 18:33
  Speaker 8: buyside beans, ready to bring down tariffs on US cars.
• 18:37
  Speaker 8: But he also made it clear of that isn't enough,
• 18:40
  Speaker 8: and tariffs go ahead on European goods, well, you're will
• 18:43
  Speaker 8: respond to. They have their list, he said, and their
• 18:46
  Speaker 8: lists agrievances, and they're ready to go. So this is
• 18:49
  Speaker 8: a big danger that people make the point about. Yes,
• 18:52
  Speaker 8: headlines are on tariffs. Maybe its leverage, maybe reaches some
• 18:55
  Speaker 8: kind of a deal, but if tariff's go in and
• 18:56
  Speaker 8: you get this tit for that spiral of a trade war,
• 18:59
  Speaker 8: then ultimately it will weigh on business confidence and sentiment.
• 19:02
  Speaker 4: What are you seeing so far about just the extent
• 19:05
  Speaker 4: of all of the talk of tariffs actually affecting inflation
• 19:11
  Speaker 4: Because you see headlines every day that you know, analysts
• 19:14
  Speaker 4: are saying that the tariffs are going to increase inflation,
• 19:16
  Speaker 4: And what is your reporting showing about just how business
• 19:20
  Speaker 4: is preparing for the prospect of tariffs. How does that
• 19:23
  Speaker 4: actually affect inflation.
• 19:26
  Speaker 8: Well, we're still early, right, the inflation story is still
• 19:29
  Speaker 8: very much kind of about stubborn services inflation, I think,
• 19:32
  Speaker 8: more so than goods prices. But we're rather delicate point
• 19:34
  Speaker 8: in the inflation story when hang on a second, wasn't
• 19:36
  Speaker 8: it meant to be all about this inflation and it
• 19:38
  Speaker 8: looks like that might be a little bit rocky. Now
• 19:40
  Speaker 8: throw on top of that the point that maybe there
• 19:41
  Speaker 8: will be these tariffs going on, typical consumer goods coming
• 19:45
  Speaker 8: to the country. Well, then the thinking among economists and businesses.
• 19:48
  Speaker 8: As I saying, business are warning you'll have to pass on.
• 19:51
  Speaker 8: Economists say price.
• 19:52
  Speaker 2: So we'll go up.
• 19:53
  Speaker 8: We'll have to go up near term. That's where it
• 19:55
  Speaker 8: becomes more pointy. I mean, okay, near term prices go up.
• 19:58
  Speaker 8: But what's the second round effect. Is is it one
• 20:00
  Speaker 8: off inflation impact that kind of policemakers owners look through,
• 20:04
  Speaker 8: or does it set and chain longer term higher inflation expectations?
• 20:08
  Speaker 8: Maybe that's the hint coming out of the Michigan survey today,
• 20:10
  Speaker 8: for example, that's where the big economic crunch does come.
• 20:13
  Speaker 8: But right here, right now, of course, companies and consumers warning.
• 20:17
  Speaker 8: What it means for prices, what it means for inflation
• 20:19
  Speaker 8: a longer term, what it means for confidence.
• 20:22
  Speaker 2: Very good, Endercurrent, Thank you so much for joining us
• 20:25
  Speaker 2: at an acurrent global economy reporter Bloomberg News. Joining us
• 20:28
  Speaker 2: from Washington, DC via.
• 20:30
  Speaker 1: Zoom This is the Bloomberg Intelligence podcast, available on Apple, Spotify,
• 20:36
  Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
• 20:40
  Speaker 1: ten am to noon Eastern on Bloomberg dot com, the
• 20:43
  Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You
• 20:47
  Speaker 1: can also watch us live every weekday on YouTube and
• 20:51
  Speaker 1: always on the Bloomberg terminal