June 26, 2025 • 39 mins
- Jim Zelter, President at Apollo Global Management
- Mike Schumacher, Head: Rates & Macro Strategy at Wells Fargo
- Lauren Goodwin, Chief Market Strategist at New York Life Investment
- Mary Daly, President of the San Francisco Federal Reserve
Jim Zelter, President at Apollo Global Management, offers his outlook for the markets and US economy amid geopolitical and inflation uncertainty. Mike Schumacher, Head: Rates & Macro Strategy at Wells Fargo, joins to talk about the rate path in the US. Nela Richardson, Chief Economist at ADP, joins to react to jobless claims and a slew of economic data today. Mary Daly, President of the San Francisco Federal Reserve, joins Lisa Abramowicz for a conversation on the US economy and interest rates.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
with Lisa Bromwitz and a Marie Hordern. Join us each
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(00:33):
Bloomberg Terminal and the Bloomberg Business app. Joining us now
for a long discussion. Jim's out to the president of
Apollo Global Management. Jim, good morning, Good morning driving, and
happy birthday. Sarah's good time very much.
Speaker 3 (00:44):
I appreciate it.
Speaker 2 (00:44):
We spend too much time on the Federal Reserve. But
I do want your reaction to this journal piece overnight.
Speaker 3 (00:50):
Well, I think I think that the President's already won.
It's a great distraction of headlines. I personally don't think
he's going to name anybody too early because right now
he's in the catbird seat of blaming without accountability, which
is classic Trump playbook. So I think the fact that
we're talking about. It is interesting. It's a great diversion
(01:11):
from the reality I think he does. There's no doubt
he wants rates lower. That's what's part of his plan
for many, many years, and that's how he doesn't like
to pay debt and he likes to pay low coupons
on it. But the fact that you know, I just
don't think that if you're Trump right now and you
take his playbook, he'll make this a conversation. But I
don't suspect he's going to do anything premature because he's
(01:33):
able to put blame on the current resident of the Fed,
and he likes to be in that position.
Speaker 2 (01:39):
Your word's blaming with accountability without accountability. Is this something
you think he should be accountable for.
Speaker 3 (01:44):
Well, certainly, I think if you think about what's going
on in the last three or four months, the issues
of tariffs, it feels like that's a little bit on
the sidelines right now. I know we haven't resolved, but
the marketplace has absorbed the idea of a ten percent
plus or minus tariff, maybe a little bit higher, but
to Trump's benefit, in the administration's benefit, the market has
(02:05):
absorbed that, moved on the issues about the Middle East
and all the challenges of foreign policy. There was a
lot of action last ten days ago and a week
and a half ago, and now that has been sort
of absorbed in the marketplace. The big elephant in the
room is still our deficit issue. You guys have talked
about it quite a bit. It's obviously the topic of
(02:26):
appropriate conversation, and so I think that is an important
topic that still remains. But we talked earlier in this
year about the decline of US exceptionalism. I think Mark
Twain was right that the PREMI that my death is
a bit premature, and certainly the market has moved on.
So I think the tariffs are a little bit off
(02:48):
on the side, the foreign policy issues are a little
bit off the side. Right now. The deficit issue is
a real issue. We can talk a little bit about
what's going on with the dollar. I personally think what's
going on with the dollar. I think there was a
lot of investors around the globe that invested in US
assets and they made money both ways on the currency
and on the underlying assets for almost ten years. And
(03:09):
they turned around and they found themselves really unhedged. And
I think you're going to see some pretty good numbers
out of the big banks this quarter because investors around
the globe have been rushing to hedge their dollar exposure.
But I think it's a ten year catchup that people
just didn't hedge their portfolios in massive scale. So I
(03:29):
don't look at this dollar decline is I look at
it as more of a technical factor than a long
long run impact on the health of the US economy.
Speaker 1 (03:38):
There's a lot to impact there, including the breakout of
the hedging profits at some of the big banks, which
we'll all be now looking for. To build on what
John is asking about is the FED on the brink.
I don't want to say I have a policy error,
but it being too late kind of to build on
what President Trump is accusing him, because you are seeing
the weakening and the dollar accompanied by the biggest negativity,
(03:58):
the biggest in in downside economic surprises that we've seen
in a year.
Speaker 3 (04:04):
If you look at the Bloomberg page on rates of
the G seven economies other than the UK, where the
outlier in terms of where our ten year yields are
and our yield curve is. You know, I sit in
my seat and I see a variety of inputs that.
Some tell me the economy is slowing down a little
bit with consumers. Some tell me inflation is still a
(04:28):
little bit more represented in the economy. I see, we
see inflation around three percent, three three and a half percent.
And I don't think it's obvious that the FED should
be cutting right now. I think it is a very
legitimate question to be asking what's the trajectory of the
FED activity? And so I don't think it's a slam
(04:48):
dunk decision. I know the market that the futures would
tell you three cuts in the next the rest of
the year, three three and f cuts, you know, Tors
and I are a bit skeptical on that. We see
what's going on, and I think there's maybe one cut.
Your basic question, is the FED conversation a really important
one right now? It is. I have a view that
(05:09):
rates are going to be a little bit stickier and
higher in the US than people think. We've had that
view for quite some time. But so it is a
good question for the administration to have right now. But
I'm not sure that's the primary question for the market.
Speaker 1 (05:22):
One of the reasons why people keep asking this question
is would the FED be considering cutting for.
Speaker 4 (05:27):
The right reasons for the wrong reasons.
Speaker 1 (05:28):
The right reasons being disinflation, which you reject, but the
wrong reasons being because we are seeing a weakening in
the labor market as we see as an increase in
jobless claims. What's your sense of that based on what
you've seen with portfolio companies, what you've seen with your investments,
is that valid?
Speaker 3 (05:42):
Yes, I think long term you can't argue with the
long term deflationary impact of technology and AI that is
out there now, whether that's six twelve, eighteen, twenty four months,
there's a massive deflationary impact from that activity. I just
don't think it's on the center of the plate right
(06:04):
now in the markets. It's out there, and I think
that you're fighting with short term still supply interruptions, hiring interruptions,
and some short term challenges that are inflationary versus a
long term backdrop of deflationary trends because of AI around
the globe. I think that's sort of the center converge.
(06:25):
When I'm back here in twenty twenty six and twenty
twenty seven, I think rates will probably be a bit
lower because of the technology impact. But I think in
the next six to nine months. I don't think rates
are going to be dramatically lower.
Speaker 2 (06:40):
If you'd taken six months OFLF and came back to
work and look where the market was, I don't think
you'd have a clue when I think it happened here.
Equity's close to all time highs, credit spreads are very tight.
It's not a market is screaming count for rate cuts.
From your standpoint at Apollo, when you look at valuation, underwriting,
any red flags getting your attention, that's all at the moment.
Speaker 3 (06:58):
You know, the me is amazingly resilient in the US.
When I was here three or four months ago, there
was concern, handeringing about the trajectory of the economy. There
was handeringing about non US investors, global investors investing in
the US. I've been all around the world the last
twelve weeks. American exceptionalism is front and center. Back you
(07:19):
talk about where valuations are and levels of equities and raids,
they're back. Global investors want to invest in the US.
They made a lot of noise. They thought they were
going to diversify themselves away, and they realized that breadth
and depth and the strength of the US economy and
the scale of what they need to invest, and the
(07:40):
US is the primary place to invest. It still is,
so you know, it's sharing as I was in Europe
a few weeks ago as well, your folks, I want
to talk about that. Amazingly is going on in Germany
right now. The reality is public markets are the narrative,
but private capital drives the economy and we're seeing it.
We've been amazingly active. Edm F last week a louto
(08:01):
matica what's going on in a variety of financing. So
it's been a very very busy time, but I'm not
seeing any red flags going off, and I really I
want to make sure we talk today about this concern
about the private capital private credit bubble versus just an
economic cycle. We're due for a credit cycle, but that
(08:21):
does not mean it's a bubble and private capital is
playing a bigger and bigger role. Look what we did
last week for ED and F in the UK and
Germany four and a f billion dollars strowing private capital
financing long duration debt to finish out their nuclear power
plant build. Really really important that we're playing that role.
Speaker 2 (08:39):
Well, sit in Europe, let's just stay there. Off the
back of your travel. So you mentioned AD and F
big staling transaction. Also big target from you and the
team to invest was it one hundred billion in Germany
over the next ch title set.
Speaker 3 (08:48):
If you're a leadership of journey right now, your goal
is to get a four trillion economy to a six
trillion economy, and you are I was with the administration.
You can talk to Murz. You know, they really are
the role of private capital along with government spending over
the next five or ten years.
Speaker 2 (09:05):
They've been so dependent on the banking system in Europe
for such a long time. Can they get away from that?
Because I feel like I've been talking about this for
more than a decade.
Speaker 3 (09:13):
Well, I think the evidence is hereto if you look
at the last twenty four months and what's going on
with the leading Italian banks. Look what's going on with HSBC,
what's going on with Barkley's and Deutsche Bank. They're operating
in a much different capital regime, with a focus on
shareholder value, with a focus on roe and they're really,
you know, not taking all the policy lending on their
(09:35):
balance sheet like they had in the past. So they're
actually operating the right way. What you didn't really see before.
Is the government really embracing in Germany, in France, in
the UK they want private capital to be part of
the solution because they know the government balance sheets cannot
do all that's needed in terms of the massive cappex
(09:57):
of transmission, line of transportation, of AI, of data centers.
They know they're behind. So if anything, this administration in
the US, the memo they sent out about what's going
on in the US and Europe stepping forward, European leadership
has taken notice. Let there be no doubt. I go
to Europe three four times a year. I've never been
(10:20):
so embraced as we were three weeks ago in Germany
and France about the role of private capital in this
build out.
Speaker 4 (10:26):
How much is that driven by this US administration?
Speaker 3 (10:29):
A lot? I mean, it's clear that they know that.
The European leadership has even if you look this morning
about how they're stepping up on defense spending with NATO.
So I think, you know, when I think about the
globe right now, again, taros are a little bit off
on the sidelines. They're part of the conversation. It's a
(10:49):
question of how much, not if or when. And I
do think they feel like there's a responsibility that they
have for their citizens, because when you look at the
last fifteen years and where the US has grown versus
europe growth, it's startling. You know, when I got out
a college a few decades ago, it was all about Japan.
Japan was going to take over the world. It was
all about Germany industrial taking over the world. That did
(11:12):
not come to play. And I know they have a
lot of catching up to do, and I just think
it's a very very power now. You know, if you watch,
if you listen, if you read the Draggy letter and
what he put forth eighteen months ago, Now if they
followed that all one hundred and fifty six pages in
great detail, it would be a watershed economic opportunity. And
(11:33):
I think parts of that will to come forth. But
they're already making moves on securitization other activities. And to
Jonathan's point, the European banks are a bit behind the
US in terms of the fundamental focus on roe and
shareholder return and capital efficiency, but I think they're I
don't want to say they're catching up, but they're getting
(11:54):
in line. Clearly.
Speaker 2 (11:55):
You've talked about macro paralysis in the past. I don't
see any sign of paralysis when I urt site high
yield issuance, when I look at activity, do you see
paralysis at all?
Speaker 3 (12:05):
I don't. And back to this last topic. I mean,
as you point out, at least a pointing out, the
two big topics that they need to really deal with
right now is the tariff on July ninth and the
big beautiful bill. But we're not talking about that this point.
We're talking about a FED chairman in nine months. And
I look at everything through. What this president has been
in the past is a real estate developer. It's all
(12:27):
about location, location, location. The FED pick will be about loyalty, loyalty, loyalty.
Let's not get confused. There isn't paralysis in the market.
As I mentioned before, you know the public markets in
the narrative, the private capital is really the driver of
the economy. A lot of activity going on in the
US on refinancing, in Europe, on the global industrial renaissance.
(12:50):
So we are on pace to have our busiest quarter
in origination we've had in a number of years, a
tremendous amount of activity across our equity platform, our infrastructure platform,
our credit platform. So I do think there was a
lot of handeringing, as I said six six or three
four months ago, and I think that's now on the sidelines,
(13:11):
maybe not on the narrative, but certainly on activity.
Speaker 1 (13:13):
Is that activity in lieu of some of the deals
activity that we were expecting. Was it sort of expected
to be the deals and the IPOs and the big
boom for the banks, and instead it's a Powell coming
in and doing a lot of financing deals in the.
Speaker 3 (13:24):
Back Well, I think too. I think the beginning of
the year, people projected that the busiest folks on Wall
Street would have been the ECM equity capital markets teams
and the M and A teams, And while they've both
been busy, the busiest folks have been their rate hedging
and derivative teams because of what's going on in the
dollar and concern about tariffs and such. But it's an
(13:46):
interesting back up. Even listening to your program this morning,
the fundamental economy is doing fine. It's doing well, maybe
not to the growth expectations that people had earlier this year,
and will come out somewhere around a two percent growth
with about three percent inflation. But whether it was Nvidia,
whether it was Micron. You know, a lot of cappec
still going, a lot of companies in the AI space
(14:08):
raising tremendous amounts of capital at high valuations with long
list of investors coming in, and the activity. As I
said earlier, what's going on in Europe right now about
that industrial renaissance. It's still going on. So again, I
think there's the headlines and then there's the reality of
the underlying economy and the role of private capital, which
(14:29):
is a much much bigger, longer term story.
Speaker 5 (14:31):
How do you think you're going to decipher the reality
versus the headlines? When it comes to New York City.
You have a huge company here in New York and
a lot of people are concerned about a democratic socialist
becoming the mayor of the city.
Speaker 3 (14:41):
You know, it's probably one of the most complicated jobs
in the world on the political stage in terms of
bringing a variety of the five boroughs together, the business,
the community, the unions, all the folks that make New
York the special place it is. As I've mentioned before,
three out of every hundred college graduates a year come
to New York. In the US, it's still the magnet
(15:04):
of talent and ambition. Uh So when you see somebody
that on the surface does not appear to have a
long resume of leadership and making tough decisions, really concerning.
And I think that we'll see now just winning the primary.
While in the past it might have been the litmus
test for being the mayor, I think there's still a
(15:25):
long time coming until November.
Speaker 6 (15:27):
Build down the office in Florida. You're hearing.
Speaker 4 (15:30):
There was a diplomatic response.
Speaker 3 (15:33):
We are resid we we are, we are, we are
a New York company, got we we are. We are
determined to be here. I'm determined to be here. Our
leadership is determined to be here. We have people in
the office five days a week, is running. You know.
Speaker 6 (15:47):
It's uh, Jim, It's good to see you. Happy birthday,
Jim Jelpless.
Speaker 2 (16:02):
Claims initial claims lower that expected, continuing claims higher than expected,
and creeping higher over the past few months. From your
advantage point, President Dadi, how much weight would you put
on one versus the other and what's the labor market
picture look like in your point of view your opinion, Well.
Speaker 7 (16:18):
The labor market shaping up to be solid, and the
data today confirmed that now continuing claims are going up
because it takes a little longer to find a job.
That's consistent with the hiring numbers just being slower as
the economy comes to a more sustainable pace. But when
I look at the labor market, there are really no
warning signs that it's weakening.
Speaker 6 (16:37):
Will continue to.
Speaker 7 (16:38):
Watch that, but right now it's progressing solidly, although more
slowly than before.
Speaker 1 (16:43):
President Daily A lot of people have said that it
is a data dependent federal reserve, and yet we haven't
seen enough data to really understand or whether inflation is
the primary objective or whether it really is some of
the weakening that we've seen the labor market, albeit from
a strong place. When will you have enough data to
really make that determination.
Speaker 7 (17:03):
Well, one of the challenges of central banking that you
just have to accept is that we never have perfect data,
So you're always making judgments, and you want sufficient data
to make a judgment that is really going to be
best for the American people. So right now we have
incoming information on the labor market which does not signal
real weakness, It just signals slowing.
Speaker 4 (17:22):
So we'll continue to watch that, and.
Speaker 7 (17:24):
Then on inflation, the data have been good so far
coming in If we were only backward looking, we would say, oh,
it's time to adjust the interest rate. But we have
to be forward looking, and then you have to make
judgments about how you think inflation will shape up going forward.
And they always really see three scenarios, and I'm leaning
towards one, and I'll tell you more and more. But
the one scenario, of course, is that it's just delayed.
(17:46):
The tariffs are going to have some impact on inflation.
It is after all, increasing costs, and that will be
a more persistent effect. The second opportunity or possibility is
that it's delayed but it will be a one off.
And a third, of course, which I think is increasingly possible.
It's not my modal, but it's increasingly possible, is that
this just doesn't amount to as much as the models
(18:09):
in history would tell us, because businesses find ways to
absorb the costs and they split it down the production
chain and ultimately consumers pay less of that. So I
think those last two scenarios, it's delayed, but it's a
one off, or it doesn't materialize to the extent that
the models would suggest. Those are where you know, I'm
putting increasing probabilities it will just have to collect some
(18:30):
more information to make a decision. But you know, ultimately
we can't wait for perfect information or we'll be behind
and we can't do that to the American people.
Speaker 1 (18:39):
It sounds like President Dailier leaning toward a sooner rate
cut if it is confirmed that this tariff impulse isn't
as inflationary as people expected.
Speaker 4 (18:47):
Is that correct?
Speaker 6 (18:48):
Well, sooner than what?
Speaker 7 (18:49):
I mean, my modal outlook has been for some time
that we would you begin to be able to adjust
the rates in the fall, and I haven't really changed
that view. It does seem like that. Of course, if
the tariffs are one off, you can look through them,
and if they're just not going to materialize, and you
have to watch both sides of the mandate. And I
think that's really important. It's not one or the other.
(19:11):
It's both sides of our mandate that have really come
into frame since we brought inflation down from the really
high levels to something that's closer to our target. Ultimately,
we have to watch both sides, and that's what I'm doing.
And then the fall looks promising for a rate cut,
I don't know for sure. I mean, we have to
be open about what we don't know. Humble is I
think the word that comes out of the inflation run
(19:32):
up and so, but we will. You know, there's a
lot of differences of views on the committee. I see
that as real positive right now because people bring their
perspectives and the data will guide us to what is
the one that ultimately looks like reality.
Speaker 1 (19:45):
President Daily John was talking about the Palace intrigue, and
I do wonder about how the increasingly political overlay to
the FED has complicated your messaging, given that there is
this debate about the dual mandate, etc.
Speaker 4 (19:57):
How much has it affected the way that you communicate?
Speaker 6 (20:01):
You know, not really.
Speaker 7 (20:02):
One of the things that I recognize on a regular
basis is if I go out and talk to the
people who live in the twelve Federal Reserve District, so
that's nine states, very diverse states in the West, they
don't actually bring this up at all. What they bring
up is what do you think is going to happen
to inflation? Will you be able to restore inflation to
two percent? Will you be able to restore price stability?
(20:23):
Do you think the labor market is going to be
preserved during it? Because ultimately, I really want both jobs
and lower inflation. I want to be able to get ahead,
and so far, the people in my district are cautiously
optimistic overall, thinking that the economy is weathering some of
the worst concerns and the uncertainties, but continuing to move along.
(20:43):
So cautiously optimistic is where where they are, and I
think that reflects what's top of their mind, less about
what's happening in Washington, and more about what's happening in
their lived experience in their communities.
Speaker 1 (20:55):
So, President Daily, would you dismissed some of the discussions
around shadow fed and all of that is simply palace
intrigue and not necessarily affecting what would happen on the
feder You're concerned about.
Speaker 3 (21:04):
That, you know.
Speaker 7 (21:06):
Ultimately, what I'm concerned about is the two mandates Congress
gave us full employment, price stability. There's work to do there.
That's where all of my focus is. And the Federal
Reserve is an institution, it weather's a variety of different
points in time. Ultimately, because we only think of one thing,
how our work and further the American people in their
(21:26):
lives and livelihoods, and how we do that through our
congressionally mandated goals, So that's what we think about. We've
had a durable history since nineteen thirteen, and I would
consider that to be continuing to do our job well.
Speaker 6 (21:38):
President Addy.
Speaker 2 (21:39):
One argument we've heard to reduce interest rates sooner than
maybe say the fall, as you indicated, is that basically
the labor market right now is no longer a source
for inflation, and with that in mind, there is space
to reduce interest rates because the Fed beliefs that the
policy rate is still restrictive. Does that not convince you
enough right now?
Speaker 7 (21:57):
Not completely, because remember, inflation has been above our target
for some time, well above our target during periods of time,
and there's a sense where people really want us to
get that down. Inflation is a tax on people, and
every time we let people continue paying that tax, it
erodes their well being. So I'm very focused on getting
inflation down to two percent us. Being sure that we're
(22:20):
on that sustainable path as long as the labor market
doesn't show signs of weakening is really important. So you
have to make a view. You have to have a
view about what you think tariffs will do to inflation. Now,
my own view is that they will potentially raise inflation
that's my modal outlook, but they should dissipate over the period.
(22:41):
It's not going to be something that builds into inflation expectations,
and thus we really have to lean against it. But
we can't just be assuming we know just because that's
our modal outlook. We have to really collect the information
and understand. Remember, data dependence isn't a backward looking activity,
it's a forward looking activity. Right now, we're looking forward
by talking to our contacts, and they still feel uncertain
(23:04):
about what they will do. They're going to try to
pass some along, but they, as a number of people
you've had on your show have mentioned, firms don't have
all those abilities, whether they're managing their brand or just
they have exhausted consumers who can't take anymore. That's what
we're waiting to find out. But I don't think we're behind.
Speaker 3 (23:21):
In our waiting.
Speaker 4 (23:22):
Policy in a good place.
Speaker 7 (23:23):
The economy is in a good place, and that's what
we'll continue to monitor President daily.
Speaker 1 (23:28):
How much of a lesson was it last year when
the FED cut by one hundred basis points only to
see long term yields rise significantly in the face of
growth and inflation expectations. Is that something that you worry
about could happen now?
Speaker 7 (23:41):
You know, really, financial markets are an input to our
to my decisions, not an output that I'm worrying about.
And ultimately, you know, we want to see financial conditions
align with what we're trying to do for the economy
and we'll adjust as need it. But you know, we
make policy. There's many things that affect yields. We make
policy that we believe will be with the lags of
(24:02):
monetary policy, supportive of both of our goals. And so
I haven't I don't spend a lot of time wondering
what the bond market will do, especially given there's so
many things going on in the bond market right now.
Speaker 4 (24:12):
It's been quite volatile.
Speaker 7 (24:13):
So really it's about what did financial conditions overall do
and what does that do to growth and activity and inflation?
Does it restrain it or or support it? And that's
that's where my focus is on input just present.
Speaker 2 (24:26):
Just want to squeeze this in. What would life be
like with a permanent role in Washington, d C. Compared
to say, San Francisco?
Speaker 6 (24:33):
How would that feel hotter?
Speaker 7 (24:37):
But seriously, you know, one of the things that I've
my experience with the Federal Reserve is you have to
contribute from wherever you sit. And that's what we all
do when we get around that table. There's nineteen of us,
and we don't think about who is in what role.
Speaker 3 (24:52):
It's really how do.
Speaker 7 (24:53):
We debate, discuss, bring our best thinking and our best
disagreement to bear so we can make right decision at
the right moment for the people we serve.
Speaker 6 (25:03):
President dealily, appreciate your time. Very diplomatic.
Speaker 2 (25:15):
Let's turn to NATO member countries agreeing to a defense
spending target of five percent of GDP. Mike Schumacher of
Wells Fargo writing, just say no to thirty year bonds.
Rising defense spending means heavier issuance, meaning pressure on the
long end.
Speaker 6 (25:28):
Mike joins us now for more might Welcome.
Speaker 2 (25:30):
To the program Sir, provocative piece, and I think a
lot of people will agree with you and Mike. The
interesting thought that you and the team have god, is
this is not just the United States. This seems to
be a global story.
Speaker 3 (25:42):
It is, joannal. We think it's got legs.
Speaker 8 (25:44):
See you think about a secular shift in defense spending.
We're talking probably five ten years something like that. It's
going to have a long time to go, and I
get it. There's a lot of skepticism. People say, well,
NATO's target's been two percent for a long time, how
many countries have actually hit that? Not many would they
go to a three point five percent or five percent,
Maybe they don't get there, But really the point is
(26:05):
they go up in terms of spending, and I think
most countries probably ratchet. They're spending up in the next
couple of years. So if your runway is two or
three years, you say, well, if your average NATO country
boosts defense spending by zero point five percent of GDP
through the math, that's a lot of bonds. We think,
a lot of long term debt, and I doubt that
it's fully priced.
Speaker 1 (26:23):
A lot of people have pushed back on the argument
that issuance matters, and I know that this is sort
of the popular idea, and yet in the US it
hasn't because we've increased our debt dramatically in periods where
we saw rates at near zero.
Speaker 4 (26:33):
So I'm just wondering at what point, what.
Speaker 1 (26:35):
Sort of the tipping point where people become bond vigilantes
and pay attention to issuance rather than just inflation.
Speaker 8 (26:43):
Yeah, it's interesting. I think issuance does matter. So think
about not just nominal rates, but real rates. I agree
inflation is high, that's why you've got high break evans.
But think about your nominal interest rate. Decompose that break
even inflation real rate. I'll give you a couple numbers. So,
in the decade prior to COVID, the average real rate
on a ten year Treasury was forty basis points four zero.
(27:04):
Today it's about two percent. That's a massive premium. Issuance
does matter. So the market's saying, look, we've got the US,
which is profligate. It's got six percent something budget deficit,
a lot of bonds to come out, we have to
charge a relatively high penalty. So I think the market's
been opposing that for a while.
Speaker 5 (27:20):
Germany is considering this fifty year bond. Mike, who's best
position to tap their debt markets when it comes to
this defense spending.
Speaker 3 (27:29):
Ooh, fifty years tough.
Speaker 8 (27:31):
I remember when the US talked about a fifty year
back in the first Trump administration. I personally hold probably
forty or fifty clients. How many buyers do we find?
Speaker 3 (27:39):
Zero?
Speaker 8 (27:40):
So perhaps the Germans have more luck today, But I
think when you look at really long term debt it's tough.
But I would say in general, whether it's a fifty
year or a thirty year, the countries that are best
positioned are the ones that are starting with a relatively
low budget deficit and low issues. Germany is the obvious example.
When you think about the outstanding volume of boons, it's
less than two trillion dollars. Just to put that in
(28:01):
contact treasuries, you've got twenty four trillion Germany as a
pristine credit rating. Germany will find buyers for long term
debt relative to other countries, but probably has to focus
more on twenty and thirty or less on fifty.
Speaker 1 (28:13):
In my opinion, what is the idea of higher rates
for longer What does that do to valuations over a
longer time. We've already seen what that's done to the
housing market and sort of the stasis that sits there.
But do you expect equity returns globally to be substantially
lower over the next five years, ten years because of
rates that are permanently sort of pegged at a higher level.
Speaker 8 (28:37):
It probably makes people think about that trade off a
bit more carefully and It's interesting. We used to do
a lot of comparisons between the equity risk premium and
bond yields. The problem is that model has shown the
equity market, whether it's the US or elsewhere, to be
rich for a long time. But I do think that
if bond yields are persistently high. So let's say that
the quote average rate on a US tenure for the
(28:57):
next five or ten years is three and a half
four percent instead of two something, does that impact the
equity market?
Speaker 3 (29:03):
Probably?
Speaker 8 (29:04):
Is it something people can trade today, I don't think so,
But when you consider longer term allocations, it probably does
play a role and probably eventually makes bonds more attractive.
Speaker 7 (29:13):
Mike.
Speaker 5 (29:13):
Some of the naysayers that NATO, though, we're saying that
this defense spending, this five percent target of GDP is
only because Trump is there, he has a four year term.
How much of this analysis you have on only because
Trump's president and then potentially in four years they're not
going to reach even close to that spending.
Speaker 8 (29:31):
That's a great point. That's why we focus really just
on the next few years. So for US, we'd say, look,
Trump is going to harangue NATO members to spend more
on defense. That's pretty clear. He's done it already. He's
been successful. Look at Canada, it's going to spend two
percent of GDP on defense in the upcoming fiscal year
after being one three or one five something like that.
So he's already getting that done. So for US, it's
(29:52):
not so much about what happens in twenty thirty or
twenty thirty five when who knows as the US president.
But if you think about the path for the next
two to three years, when Trump will be very visible,
very loud, I think it's reasonable to say that most
countries in NATO will ratch up there spending quite a bit.
So for US, that's the big impact on the markets.
It's much less about what happens in the out years.
Speaker 2 (30:12):
My quick final question a question I think we'll ask
a few times this morning. If the next FED share
is a White House puppet, do we have to introduce
some kind of em premium to the long.
Speaker 6 (30:21):
End of the curve?
Speaker 8 (30:24):
Yeah, I'm skeptical about that, John, And here's why. When
you think about the nominee, it's pretty clear if people
want to act a bit dubbish to try to get
that job, to get the interview to.
Speaker 3 (30:35):
Get the nomination.
Speaker 8 (30:36):
But once the FED share is in place, how much
control does the president actually have?
Speaker 3 (30:41):
Not much?
Speaker 8 (30:42):
It was a great point. Powell's a Trump nominee, trump appointee.
Can Trump really control what he does? No, So, if
it's Kevin Hassett or if it's Waller, who gets the job.
Once that person's in the seat, once that person's been confirmed,
I think he or she is going to take his
own direction. So I'm not super concerned about that right now,
but I think the markets might overreact between now and
(31:02):
September October, whenever that nomination comes out.
Speaker 2 (31:05):
I appreciate the input. My thank you, Sir, Mike Sheen macroflasfanco.
Speaker 6 (31:18):
Joining us NAS.
Speaker 2 (31:19):
Nita Richardson of ADP NATI, Good morning, Ernie. You and
others have talked about this so called loachha and dynamic
in this labor market. Is it getting harder to get
a job?
Speaker 9 (31:28):
It is, and it is especially for new graduates. We've
seen that be in a predominant story. So what companies
are doing is they're taking a pause on welcoming.
Speaker 4 (31:39):
Younger workers into the workforce.
Speaker 9 (31:41):
They're taking a pause on hiring, maybe even hiring senior roles.
They're still in that weight and see mode a slowdown
in the hiring the momentum that we saw at the
beginning of the year.
Speaker 4 (31:51):
Can there be this.
Speaker 1 (31:52):
Low turn type of dynamic for a really prolonged period
of time without there being some at least perceived weakness
in the labor market. That becomes reality.
Speaker 9 (32:02):
You know what, it's interesting how concentrated hiring has become.
If you look at that last government report, what you
see is ninety six percent of the hiring has come
from healthcare and leisure and hospitality.
Speaker 4 (32:16):
Two thirds came from healthcare.
Speaker 9 (32:17):
There's a lot of company can do other than let
go of a worker. One thing they can do is
cut hours. Fifty five percent of workers in the United
States are hourly. So we may not be seeing the
slowdown in the initial job list claims numbers, but they
are showing up in hours worked and I think that's
a number to watch, continuing claims as a number to watch.
(32:39):
And then the concentration of the employment that's coming mostly
in a very non cyclical sector, a structural sector like healthcare,
that's an indication that everybody else.
Speaker 1 (32:50):
Is in wait and see most You know, this is
such a difficult market to get a hand around, because
is it weakening or is it week? Is this normalizing
or is this really problematic? And does it highlight potential
crack to come. What's your take on that? What's the
sort of tell.
Speaker 9 (33:03):
There's nothing normal about the economy that's not dynamic, especially
a US economy.
Speaker 4 (33:09):
It feeds on dynamism.
Speaker 9 (33:10):
So I would read the labor market is as in
a stasis. There's no movement, and that doesn't plan. You
asked me if how long does this happen until we
call it a weak market?
Speaker 4 (33:22):
Well, it shows up in productivity.
Speaker 9 (33:23):
If you have a labor market that's not dynamic, that
is not you know, ingesting new talent, it is not
moving and workers are going to higher paying jobs and
being promoted. That feeds into the productivity numbers. And we
saw that the last read on productivity was quite weak
one point four percent. The power of exceptionalism comes from
(33:44):
not just workers, but output per worker, and that's what's slowing.
Speaker 4 (33:48):
That's where you're going to see the weakness.
Speaker 5 (33:49):
First, Neil, you say it's harder to get a job,
but is it easier to get fired?
Speaker 4 (33:53):
Right now? Are they the same?
Speaker 9 (33:57):
You know it can be are quite easy to get
fired depending on what you do.
Speaker 5 (34:01):
I might take out some of like personal issues. Are
people are companies laying people off?
Speaker 9 (34:06):
It doesn't look like that. It looks like people are
holding on to their workers. And in fact we've seen
at ADP and the data and the payroll data, not
only are they holding on to existing workers, they're actually
re hiring workers that have left and come back. And
I think, I mean to your question, hiring has become
more cautious. They change the composition. Employers are less likely
(34:29):
to take a new bet.
Speaker 4 (34:30):
On a worker they don't know.
Speaker 9 (34:31):
They'd rather hire someone they do know who can onboard quickly,
who is very efficient, or not hire at all. That's
what we're seeing in the data, and that again feeds
back into the lack of dynamism that we might be experiencing.
Speaker 5 (34:43):
I'm going to ask the question Jonathan always asks, if
you're hired right now you have a job, are you
going in and asking for pay rises?
Speaker 9 (34:50):
You're probably going in and asking for a pay raise, yes,
and not getting it. So yeah, the ask is there,
but the action is not. And you can see that
in how our initial job switcher data is looking. Yes,
you get a bump from switching jobs, but it's not
(35:10):
the same bump that you would have gotten two years ago,
and it's not the premium of getting that bump versus
what your pay growth would have been if you stayed
at your previous employer isn't really there. So yeah, you
can ask, be careful how much you.
Speaker 2 (35:24):
Asked for Kate Poskin, Kate Paskin. I always say that,
Kate Paskin. The companies don't want you to ask. Stay well,
and they want to have that leverage. Get comfortable, not
end enough.
Speaker 1 (35:34):
Yeah, keep asking because the firing rate isn't that high,
So you know, go for it.
Speaker 6 (35:37):
Keep pushing.
Speaker 2 (35:38):
Mi McKay's going to keep pushing my mcas more tax
for us. Mike, you wanted to focus on the trite numbers, right.
Speaker 10 (35:43):
Well, trade numbers and durable goods. There's a couple of
interesting things here. The exports for the United States fell
five point two percent. That is the most since the
largest drop, shall we say, since twenty twenty. It isn't
clear why that would be because for US goods have
been dropping as the dollar drops. So this is in
(36:04):
the trade business pretty much a story about exports not
living up.
Speaker 5 (36:09):
Now on the.
Speaker 10 (36:09):
Durable goods side, we saw a rise of sixteen percent,
which is the largest since two thy fourteen, an increase
of sixteen point four percent, But it's almost all Boeing
one hundred and fifty eight percent rise in Boeing non
defense aircraft sales or orders during the month, and some
(36:29):
mixed news underneath because factories, the stuff we normally think about,
like machines and primary metals, fabricated products those rows, but computers,
communications equipment, electrical equipment, and appliances all fell orders for
those during the month, so it isn't clear exactly how
strong durables are even though the headline number is pretty strong.
Speaker 6 (36:53):
My McKay appreciate the update. My thank you. Nada still
with us.
Speaker 2 (36:55):
NATA wanted to tenci on the feder itself, just briefly,
not as any of Deutsche Bank set. This is no uncertainty,
he says. You can see in the forecast a lot
of division. Do you hear and see a lot of division?
Speaker 9 (37:07):
Yeah, I think that's to be expected. When things are
really bad are really good, you should see a lot
of consensus. The gray areas or where it's hard to
drive that consensus, and it really depends on whether you
want as a policy maker to make a preentive move
because you may think that the economy is weakening and
rates are too restrictive, or you're still in wait and
(37:28):
see mode and you can see that various actors are
playing or responding to different parts of the economy. It's
like we all are looking at a puzzle with missing pieces,
and you're trying to figure out what's in the center
of that puzzle, and you don't have the pieces at
the ready, and those pieces probably won't materialize for months
and in.
Speaker 4 (37:46):
Some cases years.
Speaker 9 (37:47):
If you're talking about long term capital investments, so you're guessing,
you're guessing what the center of the economy is. You're
guessing about policy over the next six months, over the
next even six years. Because many companies that are manufacturers
are making tenure investments, not three month investments.
Speaker 2 (38:04):
Do they have sufficient information to sit there and say,
we're forced to make a guess right now, and we've
got to make a call.
Speaker 6 (38:10):
Is that as soon as July?
Speaker 2 (38:11):
Or can they keep on waiting because the chairman keeps
saying we can wait the economy solid? Is the economy solid?
Speaker 9 (38:17):
If you're looking at the unemployment rate, you can go
with a solid message. It has not budged in a
couple of months and it's still quite low if you
look at it historically. So there is a reason to wait.
If you're looking at an economy where if you look
at all the typical median projections, they are expecting slower growth,
higher inflation, higher unemployment. If that is your forecast, you
(38:39):
may want to make a preemptive move, and that's what
some of the committee is doing.
Speaker 4 (38:44):
But overall the consensus looks.
Speaker 9 (38:46):
Like to wait and see, and they have the data
support to do so.
Speaker 2 (38:49):
Nita, it's going to see. As always, Thank you nither
Rich of them, there of ADP. This is the Bloomberg
Sevenans podcast, bringing you the best in markets, economics, angiopology.
You can watch the show live on Bloomberg TV weekday
mornings from six am to nine am Eastern. Subscribe to
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(39:09):
and as always on the Bloomberg Terminal and the Bloomberg
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Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
with Lisa Bromwitz and a Marie Hordern. Join us each
day for insight from the best in markets, economics, and
geopolitics from our global headquarters in New York City. We
are live on Bloomberg Television weekday mornings from six to
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or anywhere else you listen, and as always on the
(00:33):
Bloomberg Terminal and the Bloomberg Business app. Joining us now
for a long discussion. Jim's out to the president of
Apollo Global Management. Jim, good morning, Good morning driving, and
happy birthday. Sarah's good time very much.
Speaker 3 (00:44):
I appreciate it.
Speaker 2 (00:44):
We spend too much time on the Federal Reserve. But
I do want your reaction to this journal piece overnight.
Speaker 3 (00:50):
Well, I think I think that the President's already won.
It's a great distraction of headlines. I personally don't think
he's going to name anybody too early because right now
he's in the catbird seat of blaming without accountability, which
is classic Trump playbook. So I think the fact that
we're talking about. It is interesting. It's a great diversion
(01:11):
from the reality I think he does. There's no doubt
he wants rates lower. That's what's part of his plan
for many, many years, and that's how he doesn't like
to pay debt and he likes to pay low coupons
on it. But the fact that you know, I just
don't think that if you're Trump right now and you
take his playbook, he'll make this a conversation. But I
don't suspect he's going to do anything premature because he's
(01:33):
able to put blame on the current resident of the Fed,
and he likes to be in that position.
Speaker 2 (01:39):
Your word's blaming with accountability without accountability. Is this something
you think he should be accountable for.
Speaker 3 (01:44):
Well, certainly, I think if you think about what's going
on in the last three or four months, the issues
of tariffs, it feels like that's a little bit on
the sidelines right now. I know we haven't resolved, but
the marketplace has absorbed the idea of a ten percent
plus or minus tariff, maybe a little bit higher, but
to Trump's benefit, in the administration's benefit, the market has
(02:05):
absorbed that, moved on the issues about the Middle East
and all the challenges of foreign policy. There was a
lot of action last ten days ago and a week
and a half ago, and now that has been sort
of absorbed in the marketplace. The big elephant in the
room is still our deficit issue. You guys have talked
about it quite a bit. It's obviously the topic of
(02:26):
appropriate conversation, and so I think that is an important
topic that still remains. But we talked earlier in this
year about the decline of US exceptionalism. I think Mark
Twain was right that the PREMI that my death is
a bit premature, and certainly the market has moved on.
So I think the tariffs are a little bit off
(02:48):
on the side, the foreign policy issues are a little
bit off the side. Right now. The deficit issue is
a real issue. We can talk a little bit about
what's going on with the dollar. I personally think what's
going on with the dollar. I think there was a
lot of investors around the globe that invested in US
assets and they made money both ways on the currency
and on the underlying assets for almost ten years. And
(03:09):
they turned around and they found themselves really unhedged. And
I think you're going to see some pretty good numbers
out of the big banks this quarter because investors around
the globe have been rushing to hedge their dollar exposure.
But I think it's a ten year catchup that people
just didn't hedge their portfolios in massive scale. So I
(03:29):
don't look at this dollar decline is I look at
it as more of a technical factor than a long
long run impact on the health of the US economy.
Speaker 1 (03:38):
There's a lot to impact there, including the breakout of
the hedging profits at some of the big banks, which
we'll all be now looking for. To build on what
John is asking about is the FED on the brink.
I don't want to say I have a policy error,
but it being too late kind of to build on
what President Trump is accusing him, because you are seeing
the weakening and the dollar accompanied by the biggest negativity,
(03:58):
the biggest in in downside economic surprises that we've seen
in a year.
Speaker 3 (04:04):
If you look at the Bloomberg page on rates of
the G seven economies other than the UK, where the
outlier in terms of where our ten year yields are
and our yield curve is. You know, I sit in
my seat and I see a variety of inputs that.
Some tell me the economy is slowing down a little
bit with consumers. Some tell me inflation is still a
(04:28):
little bit more represented in the economy. I see, we
see inflation around three percent, three three and a half percent.
And I don't think it's obvious that the FED should
be cutting right now. I think it is a very
legitimate question to be asking what's the trajectory of the
FED activity? And so I don't think it's a slam
(04:48):
dunk decision. I know the market that the futures would
tell you three cuts in the next the rest of
the year, three three and f cuts, you know, Tors
and I are a bit skeptical on that. We see
what's going on, and I think there's maybe one cut.
Your basic question, is the FED conversation a really important
one right now? It is. I have a view that
(05:09):
rates are going to be a little bit stickier and
higher in the US than people think. We've had that
view for quite some time. But so it is a
good question for the administration to have right now. But
I'm not sure that's the primary question for the market.
Speaker 1 (05:22):
One of the reasons why people keep asking this question
is would the FED be considering cutting for.
Speaker 4 (05:27):
The right reasons for the wrong reasons.
Speaker 1 (05:28):
The right reasons being disinflation, which you reject, but the
wrong reasons being because we are seeing a weakening in
the labor market as we see as an increase in
jobless claims. What's your sense of that based on what
you've seen with portfolio companies, what you've seen with your investments,
is that valid?
Speaker 3 (05:42):
Yes, I think long term you can't argue with the
long term deflationary impact of technology and AI that is
out there now, whether that's six twelve, eighteen, twenty four months,
there's a massive deflationary impact from that activity. I just
don't think it's on the center of the plate right
(06:04):
now in the markets. It's out there, and I think
that you're fighting with short term still supply interruptions, hiring interruptions,
and some short term challenges that are inflationary versus a
long term backdrop of deflationary trends because of AI around
the globe. I think that's sort of the center converge.
(06:25):
When I'm back here in twenty twenty six and twenty
twenty seven, I think rates will probably be a bit
lower because of the technology impact. But I think in
the next six to nine months. I don't think rates
are going to be dramatically lower.
Speaker 2 (06:40):
If you'd taken six months OFLF and came back to
work and look where the market was, I don't think
you'd have a clue when I think it happened here.
Equity's close to all time highs, credit spreads are very tight.
It's not a market is screaming count for rate cuts.
From your standpoint at Apollo, when you look at valuation, underwriting,
any red flags getting your attention, that's all at the moment.
Speaker 3 (06:58):
You know, the me is amazingly resilient in the US.
When I was here three or four months ago, there
was concern, handeringing about the trajectory of the economy. There
was handeringing about non US investors, global investors investing in
the US. I've been all around the world the last
twelve weeks. American exceptionalism is front and center. Back you
(07:19):
talk about where valuations are and levels of equities and raids,
they're back. Global investors want to invest in the US.
They made a lot of noise. They thought they were
going to diversify themselves away, and they realized that breadth
and depth and the strength of the US economy and
the scale of what they need to invest, and the
(07:40):
US is the primary place to invest. It still is,
so you know, it's sharing as I was in Europe
a few weeks ago as well, your folks, I want
to talk about that. Amazingly is going on in Germany
right now. The reality is public markets are the narrative,
but private capital drives the economy and we're seeing it.
We've been amazingly active. Edm F last week a louto
(08:01):
matica what's going on in a variety of financing. So
it's been a very very busy time, but I'm not
seeing any red flags going off, and I really I
want to make sure we talk today about this concern
about the private capital private credit bubble versus just an
economic cycle. We're due for a credit cycle, but that
(08:21):
does not mean it's a bubble and private capital is
playing a bigger and bigger role. Look what we did
last week for ED and F in the UK and
Germany four and a f billion dollars strowing private capital
financing long duration debt to finish out their nuclear power
plant build. Really really important that we're playing that role.
Speaker 2 (08:39):
Well, sit in Europe, let's just stay there. Off the
back of your travel. So you mentioned AD and F
big staling transaction. Also big target from you and the
team to invest was it one hundred billion in Germany
over the next ch title set.
Speaker 3 (08:48):
If you're a leadership of journey right now, your goal
is to get a four trillion economy to a six
trillion economy, and you are I was with the administration.
You can talk to Murz. You know, they really are
the role of private capital along with government spending over
the next five or ten years.
Speaker 2 (09:05):
They've been so dependent on the banking system in Europe
for such a long time. Can they get away from that?
Because I feel like I've been talking about this for
more than a decade.
Speaker 3 (09:13):
Well, I think the evidence is hereto if you look
at the last twenty four months and what's going on
with the leading Italian banks. Look what's going on with HSBC,
what's going on with Barkley's and Deutsche Bank. They're operating
in a much different capital regime, with a focus on
shareholder value, with a focus on roe and they're really,
you know, not taking all the policy lending on their
(09:35):
balance sheet like they had in the past. So they're
actually operating the right way. What you didn't really see before.
Is the government really embracing in Germany, in France, in
the UK they want private capital to be part of
the solution because they know the government balance sheets cannot
do all that's needed in terms of the massive cappex
(09:57):
of transmission, line of transportation, of AI, of data centers.
They know they're behind. So if anything, this administration in
the US, the memo they sent out about what's going
on in the US and Europe stepping forward, European leadership
has taken notice. Let there be no doubt. I go
to Europe three four times a year. I've never been
(10:20):
so embraced as we were three weeks ago in Germany
and France about the role of private capital in this
build out.
Speaker 4 (10:26):
How much is that driven by this US administration?
Speaker 3 (10:29):
A lot? I mean, it's clear that they know that.
The European leadership has even if you look this morning
about how they're stepping up on defense spending with NATO.
So I think, you know, when I think about the
globe right now, again, taros are a little bit off
on the sidelines. They're part of the conversation. It's a
(10:49):
question of how much, not if or when. And I
do think they feel like there's a responsibility that they
have for their citizens, because when you look at the
last fifteen years and where the US has grown versus
europe growth, it's startling. You know, when I got out
a college a few decades ago, it was all about Japan.
Japan was going to take over the world. It was
all about Germany industrial taking over the world. That did
(11:12):
not come to play. And I know they have a
lot of catching up to do, and I just think
it's a very very power now. You know, if you watch,
if you listen, if you read the Draggy letter and
what he put forth eighteen months ago, Now if they
followed that all one hundred and fifty six pages in
great detail, it would be a watershed economic opportunity. And
(11:33):
I think parts of that will to come forth. But
they're already making moves on securitization other activities. And to
Jonathan's point, the European banks are a bit behind the
US in terms of the fundamental focus on roe and
shareholder return and capital efficiency, but I think they're I
don't want to say they're catching up, but they're getting
(11:54):
in line. Clearly.
Speaker 2 (11:55):
You've talked about macro paralysis in the past. I don't
see any sign of paralysis when I urt site high
yield issuance, when I look at activity, do you see
paralysis at all?
Speaker 3 (12:05):
I don't. And back to this last topic. I mean,
as you point out, at least a pointing out, the
two big topics that they need to really deal with
right now is the tariff on July ninth and the
big beautiful bill. But we're not talking about that this point.
We're talking about a FED chairman in nine months. And
I look at everything through. What this president has been
in the past is a real estate developer. It's all
(12:27):
about location, location, location. The FED pick will be about loyalty, loyalty, loyalty.
Let's not get confused. There isn't paralysis in the market.
As I mentioned before, you know the public markets in
the narrative, the private capital is really the driver of
the economy. A lot of activity going on in the
US on refinancing, in Europe, on the global industrial renaissance.
(12:50):
So we are on pace to have our busiest quarter
in origination we've had in a number of years, a
tremendous amount of activity across our equity platform, our infrastructure platform,
our credit platform. So I do think there was a
lot of handeringing, as I said six six or three
four months ago, and I think that's now on the sidelines,
(13:11):
maybe not on the narrative, but certainly on activity.
Speaker 1 (13:13):
Is that activity in lieu of some of the deals
activity that we were expecting. Was it sort of expected
to be the deals and the IPOs and the big
boom for the banks, and instead it's a Powell coming
in and doing a lot of financing deals in the.
Speaker 3 (13:24):
Back Well, I think too. I think the beginning of
the year, people projected that the busiest folks on Wall
Street would have been the ECM equity capital markets teams
and the M and A teams, And while they've both
been busy, the busiest folks have been their rate hedging
and derivative teams because of what's going on in the
dollar and concern about tariffs and such. But it's an
(13:46):
interesting back up. Even listening to your program this morning,
the fundamental economy is doing fine. It's doing well, maybe
not to the growth expectations that people had earlier this year,
and will come out somewhere around a two percent growth
with about three percent inflation. But whether it was Nvidia,
whether it was Micron. You know, a lot of cappec
still going, a lot of companies in the AI space
(14:08):
raising tremendous amounts of capital at high valuations with long
list of investors coming in, and the activity. As I
said earlier, what's going on in Europe right now about
that industrial renaissance. It's still going on. So again, I
think there's the headlines and then there's the reality of
the underlying economy and the role of private capital, which
(14:29):
is a much much bigger, longer term story.
Speaker 5 (14:31):
How do you think you're going to decipher the reality
versus the headlines? When it comes to New York City.
You have a huge company here in New York and
a lot of people are concerned about a democratic socialist
becoming the mayor of the city.
Speaker 3 (14:41):
You know, it's probably one of the most complicated jobs
in the world on the political stage in terms of
bringing a variety of the five boroughs together, the business,
the community, the unions, all the folks that make New
York the special place it is. As I've mentioned before,
three out of every hundred college graduates a year come
to New York. In the US, it's still the magnet
(15:04):
of talent and ambition. Uh So when you see somebody
that on the surface does not appear to have a
long resume of leadership and making tough decisions, really concerning.
And I think that we'll see now just winning the primary.
While in the past it might have been the litmus
test for being the mayor, I think there's still a
(15:25):
long time coming until November.
Speaker 6 (15:27):
Build down the office in Florida. You're hearing.
Speaker 4 (15:30):
There was a diplomatic response.
Speaker 3 (15:33):
We are resid we we are, we are, we are
a New York company, got we we are. We are
determined to be here. I'm determined to be here. Our
leadership is determined to be here. We have people in
the office five days a week, is running. You know.
Speaker 6 (15:47):
It's uh, Jim, It's good to see you. Happy birthday,
Jim Jelpless.
Speaker 2 (16:02):
Claims initial claims lower that expected, continuing claims higher than expected,
and creeping higher over the past few months. From your
advantage point, President Dadi, how much weight would you put
on one versus the other and what's the labor market
picture look like in your point of view your opinion, Well.
Speaker 7 (16:18):
The labor market shaping up to be solid, and the
data today confirmed that now continuing claims are going up
because it takes a little longer to find a job.
That's consistent with the hiring numbers just being slower as
the economy comes to a more sustainable pace. But when
I look at the labor market, there are really no
warning signs that it's weakening.
Speaker 6 (16:37):
Will continue to.
Speaker 7 (16:38):
Watch that, but right now it's progressing solidly, although more
slowly than before.
Speaker 1 (16:43):
President Daily A lot of people have said that it
is a data dependent federal reserve, and yet we haven't
seen enough data to really understand or whether inflation is
the primary objective or whether it really is some of
the weakening that we've seen the labor market, albeit from
a strong place. When will you have enough data to
really make that determination.
Speaker 7 (17:03):
Well, one of the challenges of central banking that you
just have to accept is that we never have perfect data,
So you're always making judgments, and you want sufficient data
to make a judgment that is really going to be
best for the American people. So right now we have
incoming information on the labor market which does not signal
real weakness, It just signals slowing.
Speaker 4 (17:22):
So we'll continue to watch that, and.
Speaker 7 (17:24):
Then on inflation, the data have been good so far
coming in If we were only backward looking, we would say, oh,
it's time to adjust the interest rate. But we have
to be forward looking, and then you have to make
judgments about how you think inflation will shape up going forward.
And they always really see three scenarios, and I'm leaning
towards one, and I'll tell you more and more. But
the one scenario, of course, is that it's just delayed.
(17:46):
The tariffs are going to have some impact on inflation.
It is after all, increasing costs, and that will be
a more persistent effect. The second opportunity or possibility is
that it's delayed but it will be a one off.
And a third, of course, which I think is increasingly possible.
It's not my modal, but it's increasingly possible, is that
this just doesn't amount to as much as the models
(18:09):
in history would tell us, because businesses find ways to
absorb the costs and they split it down the production
chain and ultimately consumers pay less of that. So I
think those last two scenarios, it's delayed, but it's a
one off, or it doesn't materialize to the extent that
the models would suggest. Those are where you know, I'm
putting increasing probabilities it will just have to collect some
(18:30):
more information to make a decision. But you know, ultimately
we can't wait for perfect information or we'll be behind
and we can't do that to the American people.
Speaker 1 (18:39):
It sounds like President Dailier leaning toward a sooner rate
cut if it is confirmed that this tariff impulse isn't
as inflationary as people expected.
Speaker 4 (18:47):
Is that correct?
Speaker 6 (18:48):
Well, sooner than what?
Speaker 7 (18:49):
I mean, my modal outlook has been for some time
that we would you begin to be able to adjust
the rates in the fall, and I haven't really changed
that view. It does seem like that. Of course, if
the tariffs are one off, you can look through them,
and if they're just not going to materialize, and you
have to watch both sides of the mandate. And I
think that's really important. It's not one or the other.
(19:11):
It's both sides of our mandate that have really come
into frame since we brought inflation down from the really
high levels to something that's closer to our target. Ultimately,
we have to watch both sides, and that's what I'm doing.
And then the fall looks promising for a rate cut,
I don't know for sure. I mean, we have to
be open about what we don't know. Humble is I
think the word that comes out of the inflation run
(19:32):
up and so, but we will. You know, there's a
lot of differences of views on the committee. I see
that as real positive right now because people bring their
perspectives and the data will guide us to what is
the one that ultimately looks like reality.
Speaker 1 (19:45):
President Daily John was talking about the Palace intrigue, and
I do wonder about how the increasingly political overlay to
the FED has complicated your messaging, given that there is
this debate about the dual mandate, etc.
Speaker 4 (19:57):
How much has it affected the way that you communicate?
Speaker 6 (20:01):
You know, not really.
Speaker 7 (20:02):
One of the things that I recognize on a regular
basis is if I go out and talk to the
people who live in the twelve Federal Reserve District, so
that's nine states, very diverse states in the West, they
don't actually bring this up at all. What they bring
up is what do you think is going to happen
to inflation? Will you be able to restore inflation to
two percent? Will you be able to restore price stability?
(20:23):
Do you think the labor market is going to be
preserved during it? Because ultimately, I really want both jobs
and lower inflation. I want to be able to get ahead,
and so far, the people in my district are cautiously
optimistic overall, thinking that the economy is weathering some of
the worst concerns and the uncertainties, but continuing to move along.
(20:43):
So cautiously optimistic is where where they are, and I
think that reflects what's top of their mind, less about
what's happening in Washington, and more about what's happening in
their lived experience in their communities.
Speaker 1 (20:55):
So, President Daily, would you dismissed some of the discussions
around shadow fed and all of that is simply palace
intrigue and not necessarily affecting what would happen on the
feder You're concerned about.
Speaker 3 (21:04):
That, you know.
Speaker 7 (21:06):
Ultimately, what I'm concerned about is the two mandates Congress
gave us full employment, price stability. There's work to do there.
That's where all of my focus is. And the Federal
Reserve is an institution, it weather's a variety of different
points in time. Ultimately, because we only think of one thing,
how our work and further the American people in their
(21:26):
lives and livelihoods, and how we do that through our
congressionally mandated goals, So that's what we think about. We've
had a durable history since nineteen thirteen, and I would
consider that to be continuing to do our job well.
Speaker 6 (21:38):
President Addy.
Speaker 2 (21:39):
One argument we've heard to reduce interest rates sooner than
maybe say the fall, as you indicated, is that basically
the labor market right now is no longer a source
for inflation, and with that in mind, there is space
to reduce interest rates because the Fed beliefs that the
policy rate is still restrictive. Does that not convince you
enough right now?
Speaker 7 (21:57):
Not completely, because remember, inflation has been above our target
for some time, well above our target during periods of time,
and there's a sense where people really want us to
get that down. Inflation is a tax on people, and
every time we let people continue paying that tax, it
erodes their well being. So I'm very focused on getting
inflation down to two percent us. Being sure that we're
(22:20):
on that sustainable path as long as the labor market
doesn't show signs of weakening is really important. So you
have to make a view. You have to have a
view about what you think tariffs will do to inflation. Now,
my own view is that they will potentially raise inflation
that's my modal outlook, but they should dissipate over the period.
(22:41):
It's not going to be something that builds into inflation expectations,
and thus we really have to lean against it. But
we can't just be assuming we know just because that's
our modal outlook. We have to really collect the information
and understand. Remember, data dependence isn't a backward looking activity,
it's a forward looking activity. Right now, we're looking forward
by talking to our contacts, and they still feel uncertain
(23:04):
about what they will do. They're going to try to
pass some along, but they, as a number of people
you've had on your show have mentioned, firms don't have
all those abilities, whether they're managing their brand or just
they have exhausted consumers who can't take anymore. That's what
we're waiting to find out. But I don't think we're behind.
Speaker 3 (23:21):
In our waiting.
Speaker 4 (23:22):
Policy in a good place.
Speaker 7 (23:23):
The economy is in a good place, and that's what
we'll continue to monitor President daily.
Speaker 1 (23:28):
How much of a lesson was it last year when
the FED cut by one hundred basis points only to
see long term yields rise significantly in the face of
growth and inflation expectations. Is that something that you worry
about could happen now?
Speaker 7 (23:41):
You know, really, financial markets are an input to our
to my decisions, not an output that I'm worrying about.
And ultimately, you know, we want to see financial conditions
align with what we're trying to do for the economy
and we'll adjust as need it. But you know, we
make policy. There's many things that affect yields. We make
policy that we believe will be with the lags of
(24:02):
monetary policy, supportive of both of our goals. And so
I haven't I don't spend a lot of time wondering
what the bond market will do, especially given there's so
many things going on in the bond market right now.
Speaker 4 (24:12):
It's been quite volatile.
Speaker 7 (24:13):
So really it's about what did financial conditions overall do
and what does that do to growth and activity and inflation?
Does it restrain it or or support it? And that's
that's where my focus is on input just present.
Speaker 2 (24:26):
Just want to squeeze this in. What would life be
like with a permanent role in Washington, d C. Compared
to say, San Francisco?
Speaker 6 (24:33):
How would that feel hotter?
Speaker 7 (24:37):
But seriously, you know, one of the things that I've
my experience with the Federal Reserve is you have to
contribute from wherever you sit. And that's what we all
do when we get around that table. There's nineteen of us,
and we don't think about who is in what role.
Speaker 3 (24:52):
It's really how do.
Speaker 7 (24:53):
We debate, discuss, bring our best thinking and our best
disagreement to bear so we can make right decision at
the right moment for the people we serve.
Speaker 6 (25:03):
President dealily, appreciate your time. Very diplomatic.
Speaker 2 (25:15):
Let's turn to NATO member countries agreeing to a defense
spending target of five percent of GDP. Mike Schumacher of
Wells Fargo writing, just say no to thirty year bonds.
Rising defense spending means heavier issuance, meaning pressure on the
long end.
Speaker 6 (25:28):
Mike joins us now for more might Welcome.
Speaker 2 (25:30):
To the program Sir, provocative piece, and I think a
lot of people will agree with you and Mike. The
interesting thought that you and the team have god, is
this is not just the United States. This seems to
be a global story.
Speaker 3 (25:42):
It is, joannal. We think it's got legs.
Speaker 8 (25:44):
See you think about a secular shift in defense spending.
We're talking probably five ten years something like that. It's
going to have a long time to go, and I
get it. There's a lot of skepticism. People say, well,
NATO's target's been two percent for a long time, how
many countries have actually hit that? Not many would they
go to a three point five percent or five percent,
Maybe they don't get there, But really the point is
(26:05):
they go up in terms of spending, and I think
most countries probably ratchet. They're spending up in the next
couple of years. So if your runway is two or
three years, you say, well, if your average NATO country
boosts defense spending by zero point five percent of GDP
through the math, that's a lot of bonds. We think,
a lot of long term debt, and I doubt that
it's fully priced.
Speaker 1 (26:23):
A lot of people have pushed back on the argument
that issuance matters, and I know that this is sort
of the popular idea, and yet in the US it
hasn't because we've increased our debt dramatically in periods where
we saw rates at near zero.
Speaker 4 (26:33):
So I'm just wondering at what point, what.
Speaker 1 (26:35):
Sort of the tipping point where people become bond vigilantes
and pay attention to issuance rather than just inflation.
Speaker 8 (26:43):
Yeah, it's interesting. I think issuance does matter. So think
about not just nominal rates, but real rates. I agree
inflation is high, that's why you've got high break evans.
But think about your nominal interest rate. Decompose that break
even inflation real rate. I'll give you a couple numbers. So,
in the decade prior to COVID, the average real rate
on a ten year Treasury was forty basis points four zero.
(27:04):
Today it's about two percent. That's a massive premium. Issuance
does matter. So the market's saying, look, we've got the US,
which is profligate. It's got six percent something budget deficit,
a lot of bonds to come out, we have to
charge a relatively high penalty. So I think the market's
been opposing that for a while.
Speaker 5 (27:20):
Germany is considering this fifty year bond. Mike, who's best
position to tap their debt markets when it comes to
this defense spending.
Speaker 3 (27:29):
Ooh, fifty years tough.
Speaker 8 (27:31):
I remember when the US talked about a fifty year
back in the first Trump administration. I personally hold probably
forty or fifty clients. How many buyers do we find?
Speaker 3 (27:39):
Zero?
Speaker 8 (27:40):
So perhaps the Germans have more luck today, But I
think when you look at really long term debt it's tough.
But I would say in general, whether it's a fifty
year or a thirty year, the countries that are best
positioned are the ones that are starting with a relatively
low budget deficit and low issues. Germany is the obvious example.
When you think about the outstanding volume of boons, it's
less than two trillion dollars. Just to put that in
(28:01):
contact treasuries, you've got twenty four trillion Germany as a
pristine credit rating. Germany will find buyers for long term
debt relative to other countries, but probably has to focus
more on twenty and thirty or less on fifty.
Speaker 1 (28:13):
In my opinion, what is the idea of higher rates
for longer What does that do to valuations over a
longer time. We've already seen what that's done to the
housing market and sort of the stasis that sits there.
But do you expect equity returns globally to be substantially
lower over the next five years, ten years because of
rates that are permanently sort of pegged at a higher level.
Speaker 8 (28:37):
It probably makes people think about that trade off a
bit more carefully and It's interesting. We used to do
a lot of comparisons between the equity risk premium and
bond yields. The problem is that model has shown the
equity market, whether it's the US or elsewhere, to be
rich for a long time. But I do think that
if bond yields are persistently high. So let's say that
the quote average rate on a US tenure for the
(28:57):
next five or ten years is three and a half
four percent instead of two something, does that impact the
equity market?
Speaker 3 (29:03):
Probably?
Speaker 8 (29:04):
Is it something people can trade today, I don't think so,
But when you consider longer term allocations, it probably does
play a role and probably eventually makes bonds more attractive.
Speaker 7 (29:13):
Mike.
Speaker 5 (29:13):
Some of the naysayers that NATO, though, we're saying that
this defense spending, this five percent target of GDP is
only because Trump is there, he has a four year term.
How much of this analysis you have on only because
Trump's president and then potentially in four years they're not
going to reach even close to that spending.
Speaker 8 (29:31):
That's a great point. That's why we focus really just
on the next few years. So for US, we'd say, look,
Trump is going to harangue NATO members to spend more
on defense. That's pretty clear. He's done it already. He's
been successful. Look at Canada, it's going to spend two
percent of GDP on defense in the upcoming fiscal year
after being one three or one five something like that.
So he's already getting that done. So for US, it's
(29:52):
not so much about what happens in twenty thirty or
twenty thirty five when who knows as the US president.
But if you think about the path for the next
two to three years, when Trump will be very visible,
very loud, I think it's reasonable to say that most
countries in NATO will ratch up there spending quite a bit.
So for US, that's the big impact on the markets.
It's much less about what happens in the out years.
Speaker 2 (30:12):
My quick final question a question I think we'll ask
a few times this morning. If the next FED share
is a White House puppet, do we have to introduce
some kind of em premium to the long.
Speaker 6 (30:21):
End of the curve?
Speaker 8 (30:24):
Yeah, I'm skeptical about that, John, And here's why. When
you think about the nominee, it's pretty clear if people
want to act a bit dubbish to try to get
that job, to get the interview to.
Speaker 3 (30:35):
Get the nomination.
Speaker 8 (30:36):
But once the FED share is in place, how much
control does the president actually have?
Speaker 3 (30:41):
Not much?
Speaker 8 (30:42):
It was a great point. Powell's a Trump nominee, trump appointee.
Can Trump really control what he does? No, So, if
it's Kevin Hassett or if it's Waller, who gets the job.
Once that person's in the seat, once that person's been confirmed,
I think he or she is going to take his
own direction. So I'm not super concerned about that right now,
but I think the markets might overreact between now and
(31:02):
September October, whenever that nomination comes out.
Speaker 2 (31:05):
I appreciate the input. My thank you, Sir, Mike Sheen macroflasfanco.
Speaker 6 (31:18):
Joining us NAS.
Speaker 2 (31:19):
Nita Richardson of ADP NATI, Good morning, Ernie. You and
others have talked about this so called loachha and dynamic
in this labor market. Is it getting harder to get
a job?
Speaker 9 (31:28):
It is, and it is especially for new graduates. We've
seen that be in a predominant story. So what companies
are doing is they're taking a pause on welcoming.
Speaker 4 (31:39):
Younger workers into the workforce.
Speaker 9 (31:41):
They're taking a pause on hiring, maybe even hiring senior roles.
They're still in that weight and see mode a slowdown
in the hiring the momentum that we saw at the
beginning of the year.
Speaker 4 (31:51):
Can there be this.
Speaker 1 (31:52):
Low turn type of dynamic for a really prolonged period
of time without there being some at least perceived weakness
in the labor market. That becomes reality.
Speaker 9 (32:02):
You know what, it's interesting how concentrated hiring has become.
If you look at that last government report, what you
see is ninety six percent of the hiring has come
from healthcare and leisure and hospitality.
Speaker 4 (32:16):
Two thirds came from healthcare.
Speaker 9 (32:17):
There's a lot of company can do other than let
go of a worker. One thing they can do is
cut hours. Fifty five percent of workers in the United
States are hourly. So we may not be seeing the
slowdown in the initial job list claims numbers, but they
are showing up in hours worked and I think that's
a number to watch, continuing claims as a number to watch.
(32:39):
And then the concentration of the employment that's coming mostly
in a very non cyclical sector, a structural sector like healthcare,
that's an indication that everybody else.
Speaker 1 (32:50):
Is in wait and see most You know, this is
such a difficult market to get a hand around, because
is it weakening or is it week? Is this normalizing
or is this really problematic? And does it highlight potential
crack to come. What's your take on that? What's the
sort of tell.
Speaker 9 (33:03):
There's nothing normal about the economy that's not dynamic, especially
a US economy.
Speaker 4 (33:09):
It feeds on dynamism.
Speaker 9 (33:10):
So I would read the labor market is as in
a stasis. There's no movement, and that doesn't plan. You
asked me if how long does this happen until we
call it a weak market?
Speaker 4 (33:22):
Well, it shows up in productivity.
Speaker 9 (33:23):
If you have a labor market that's not dynamic, that
is not you know, ingesting new talent, it is not
moving and workers are going to higher paying jobs and
being promoted. That feeds into the productivity numbers. And we
saw that the last read on productivity was quite weak
one point four percent. The power of exceptionalism comes from
(33:44):
not just workers, but output per worker, and that's what's slowing.
Speaker 4 (33:48):
That's where you're going to see the weakness.
Speaker 5 (33:49):
First, Neil, you say it's harder to get a job,
but is it easier to get fired?
Speaker 4 (33:53):
Right now? Are they the same?
Speaker 9 (33:57):
You know it can be are quite easy to get
fired depending on what you do.
Speaker 5 (34:01):
I might take out some of like personal issues. Are
people are companies laying people off?
Speaker 9 (34:06):
It doesn't look like that. It looks like people are
holding on to their workers. And in fact we've seen
at ADP and the data and the payroll data, not
only are they holding on to existing workers, they're actually
re hiring workers that have left and come back. And
I think, I mean to your question, hiring has become
more cautious. They change the composition. Employers are less likely
(34:29):
to take a new bet.
Speaker 4 (34:30):
On a worker they don't know.
Speaker 9 (34:31):
They'd rather hire someone they do know who can onboard quickly,
who is very efficient, or not hire at all. That's
what we're seeing in the data, and that again feeds
back into the lack of dynamism that we might be experiencing.
Speaker 5 (34:43):
I'm going to ask the question Jonathan always asks, if
you're hired right now you have a job, are you
going in and asking for pay rises?
Speaker 9 (34:50):
You're probably going in and asking for a pay raise, yes,
and not getting it. So yeah, the ask is there,
but the action is not. And you can see that
in how our initial job switcher data is looking. Yes,
you get a bump from switching jobs, but it's not
(35:10):
the same bump that you would have gotten two years ago,
and it's not the premium of getting that bump versus
what your pay growth would have been if you stayed
at your previous employer isn't really there. So yeah, you
can ask, be careful how much you.
Speaker 2 (35:24):
Asked for Kate Poskin, Kate Paskin. I always say that,
Kate Paskin. The companies don't want you to ask. Stay well,
and they want to have that leverage. Get comfortable, not
end enough.
Speaker 1 (35:34):
Yeah, keep asking because the firing rate isn't that high,
So you know, go for it.
Speaker 6 (35:37):
Keep pushing.
Speaker 2 (35:38):
Mi McKay's going to keep pushing my mcas more tax
for us. Mike, you wanted to focus on the trite numbers, right.
Speaker 10 (35:43):
Well, trade numbers and durable goods. There's a couple of
interesting things here. The exports for the United States fell
five point two percent. That is the most since the
largest drop, shall we say, since twenty twenty. It isn't
clear why that would be because for US goods have
been dropping as the dollar drops. So this is in
(36:04):
the trade business pretty much a story about exports not
living up.
Speaker 5 (36:09):
Now on the.
Speaker 10 (36:09):
Durable goods side, we saw a rise of sixteen percent,
which is the largest since two thy fourteen, an increase
of sixteen point four percent, But it's almost all Boeing
one hundred and fifty eight percent rise in Boeing non
defense aircraft sales or orders during the month, and some
(36:29):
mixed news underneath because factories, the stuff we normally think about,
like machines and primary metals, fabricated products those rows, but computers,
communications equipment, electrical equipment, and appliances all fell orders for
those during the month, so it isn't clear exactly how
strong durables are even though the headline number is pretty strong.
Speaker 6 (36:53):
My McKay appreciate the update. My thank you. Nada still
with us.
Speaker 2 (36:55):
NATA wanted to tenci on the feder itself, just briefly,
not as any of Deutsche Bank set. This is no uncertainty,
he says. You can see in the forecast a lot
of division. Do you hear and see a lot of division?
Speaker 9 (37:07):
Yeah, I think that's to be expected. When things are
really bad are really good, you should see a lot
of consensus. The gray areas or where it's hard to
drive that consensus, and it really depends on whether you
want as a policy maker to make a preentive move
because you may think that the economy is weakening and
rates are too restrictive, or you're still in wait and
(37:28):
see mode and you can see that various actors are
playing or responding to different parts of the economy. It's
like we all are looking at a puzzle with missing pieces,
and you're trying to figure out what's in the center
of that puzzle, and you don't have the pieces at
the ready, and those pieces probably won't materialize for months
and in.
Speaker 4 (37:46):
Some cases years.
Speaker 9 (37:47):
If you're talking about long term capital investments, so you're guessing,
you're guessing what the center of the economy is. You're
guessing about policy over the next six months, over the
next even six years. Because many companies that are manufacturers
are making tenure investments, not three month investments.
Speaker 2 (38:04):
Do they have sufficient information to sit there and say,
we're forced to make a guess right now, and we've
got to make a call.
Speaker 6 (38:10):
Is that as soon as July?
Speaker 2 (38:11):
Or can they keep on waiting because the chairman keeps
saying we can wait the economy solid? Is the economy solid?
Speaker 9 (38:17):
If you're looking at the unemployment rate, you can go
with a solid message. It has not budged in a
couple of months and it's still quite low if you
look at it historically. So there is a reason to wait.
If you're looking at an economy where if you look
at all the typical median projections, they are expecting slower growth,
higher inflation, higher unemployment. If that is your forecast, you
(38:39):
may want to make a preemptive move, and that's what
some of the committee is doing.
Speaker 4 (38:44):
But overall the consensus looks.
Speaker 9 (38:46):
Like to wait and see, and they have the data
support to do so.
Speaker 2 (38:49):
Nita, it's going to see. As always, Thank you nither
Rich of them, there of ADP. This is the Bloomberg
Sevenans podcast, bringing you the best in markets, economics, angiopology.
You can watch the show live on Bloomberg TV weekday
mornings from six am to nine am Eastern. Subscribe to
the podcast on Apple, Spotify or anywhere else you listen,
(39:09):
and as always on the Bloomberg Terminal and the Bloomberg
Business opp
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