December 11, 2025 • 28 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul Sweeney
Thursday, December 11th, 2025
Featuring:
1) Robert Kaplan, Vice Chairman at Goldman Sachs, on the Federal Reserve's policy path into 2026 following Wednesday's rate cut.
2) Alexis Crow, Partner & Chief Economist at PwC US, discusses how the American economy has shifted from a K-shape to a "Pac-Man" pattern.
3) Iain Stealey, International CIO for Fixed Income at JPMorgan Asset Management, explains why strong demand for high quality fixed income supports owning duration.
4) Lisa Mateo joins with the latest headlines in newspapers across the US, including Wall Street Journal reporting on LinkedIn research regarding jobs that didn't exist 25 years ago, and a story on all-inclusive adventure resorts.
See omnystudio.com/listener for privacy information.
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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. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple CarPlay or Android Auto with the Bloomberg Business app.
Listen on demand wherever you get your podcasts, or watch
(00:25):
us live on YouTube.
Speaker 2 (00:27):
Robert Kaplin with us right now is affiliated with Gold
and Sex and of course his public service at the
Dallas Fed.
Speaker 3 (00:33):
This is great.
Speaker 2 (00:34):
I thought Austin Golesby's descent yesterday was really something with
his technology bent his workout at MIT at Chicago.
Speaker 3 (00:44):
Now, I just, you know, my.
Speaker 2 (00:45):
Own individual opinion is Goolsby something really worth watching here.
Mark Winn is out of Ireland Rochester has a shingle
out at the Dallas Fed. And of course Mark Winn,
under your student guidance years ago, has a spectacle killer
essay out on AI. In the summary of Mark Win's
work is we just don't know, do we?
Speaker 4 (01:08):
Well.
Speaker 5 (01:09):
I think we're in the early stages of AI adoption.
Most of the talk about AI right now is about
the infrastructure build, but that's different than the downstream adoption.
We're in the first or second inning. I think my
own view and I think the view of My firm
is when we talk five years from now, we'll see
a half a percentage point gain in productivity growth for
(01:30):
GDP and it will help business.
Speaker 4 (01:33):
But which use cases work and which don't.
Speaker 5 (01:36):
We're going to spend the next three years trying to
figure that out.
Speaker 6 (01:41):
Net is it positive for the economy and how material
because a lot of folks are hanging their hat on
AI is really being a productivity enhancered to really impact
the economy.
Speaker 5 (01:52):
If you got a half a percentage point jump in
productivity growth, that's a huge deal. So we have sluggish
workforce growth in the United States.
Speaker 4 (02:03):
We don't have much immigration at the moment.
Speaker 5 (02:05):
Bulk of our GDP growths got to come from productivity growth.
So AI is very important to the world and to
the US. And yeah, half a percentage point would be
a big deal.
Speaker 6 (02:15):
Would you take away yesterday from the FED meeting?
Speaker 4 (02:17):
Here? Pretty straightforward?
Speaker 5 (02:22):
I think that I think in the room there was
a lot more disagreement than it may have looked like,
only a couple.
Speaker 4 (02:29):
Of descents, but we're at or near neutral.
Speaker 5 (02:35):
I think Jpell even said that it shows confirms that
I think the neutral rate nominal is about three and
a half three and three quarters, and some of the
folks say, with inflation at two and three quarters and
the job market likely to firm in the.
Speaker 4 (02:49):
Next year, we shouldn't be at neutral.
Speaker 5 (02:51):
And I think overall they bought insurance in case the
labor market's weaker than they thought. But from here it
will be a conventional FED, meaning something's got changed to
move the rate, either unemployment needs to worsen or inflation
needs to improve.
Speaker 2 (03:06):
Accrastination Robert Kaplan with US of Gold and Sachs's former
services the Dallas Fed. So say, we say good morning
to Texas as well. So I look at yesterday's meeting,
and I look at all the what IFFs that are
out there, and the bottom line is a dual mandate.
And I kept carrying them back and forth on the
dual mandate. What's the history that you've studied of whether
(03:28):
they focused on inflation or jobs, And don't tell me both,
because it's really hard to do that well.
Speaker 5 (03:34):
For a lot of the last ten or fifteen years,
the Fed had the luxury exact free COVID of not
having an inflation problem, so it could focus heavily on
what was going on employment.
Speaker 4 (03:48):
And I thought employment was.
Speaker 5 (03:49):
Weakening, it could move post COVID, and I would argue,
with this boom in government spending we had in twenty
twenty one, twenty two, twenty three, which probably costs supply
chain dynamics to create an excess demand issue, they got
(04:09):
to deal with both, and it's harder to deal with both,
and so then they have to make trade off decisions
and that's hard to do. And having said that, I
think they've done a reasonable balancing job. But that's the
reason for the division in the group. It's not that
they prioritize one over the other. I think the fact
(04:30):
is we've had three headwinds. One in the short run,
tariffs are slowing growth, the immigration policy is slowed growth.
And the shutdown, as you would expect to slow growth,
but the shutdown is reversing. And going into twenty six,
we're in a f tax incentives, We've got this AI
boom continuing, and I think the economy is likely to firm,
and you saw that in the dot plot. And people
(04:52):
are saying, you know, the labor weakness is going to
a firm, let's do nothing, And that's the reason for
the debate.
Speaker 6 (04:58):
Interesting, when you talk to your clients at Goldman Sachs,
what is their view for twenty twenty six we're seeing
I kind of look at M and A as a
barometer of how confident the C suite is and the
board is, and we're seeing a big M and A
trade going crazy out there with Warner Brothers Discovery. When
you talk to your corporate clients, are think confident about
their ability in twenty twenty six to maybe grow?
Speaker 5 (05:19):
I think most companies believe, as we do that twenty
six you'll see firming GDP growth because of tax and
centers and other reasons.
Speaker 4 (05:27):
However, I've never.
Speaker 5 (05:30):
Seen a period in my business career where there wasn't
a bigger concern about the need for size and scale
to afford the technology investment that's driving a lot of
merger activity.
Speaker 2 (05:42):
We can cover this a number of times this week
as well. So then do we head towards a monopsimistic America?
Do we have a capitalism that is essentially a big
roll up to get the CAPEX scale?
Speaker 5 (05:52):
I think you're going to have lots of still small
emerging businesses powered by AI that can grow and will
be very attractive, and they'll get to a point where
they kind of stabilize. You'll have lots of very big,
huge scale companies that are dominant, and you're going to
have a lot in between. And I guess i'd say
it in between has gotten a lot bigger. And the
(06:15):
last companies that used to think they were big and
dominant and still aren't less dominant.
Speaker 2 (06:20):
I looked at Procter and Gamble carefully, so iind of
want you to comment on individual security.
Speaker 3 (06:24):
But what does old industry do in their in between?
Speaker 5 (06:28):
This build size and scale and make more investment in efficiency, productivity,
technology and so all that costs money and in the
short run reduce as margins. And that's why you also
see a lot of bell tightening right now right now
to offset some of the margin impact.
Speaker 6 (06:50):
One of the newer developments capital markets wise, there the
last fifteen years have been private credit.
Speaker 7 (06:54):
What's your view there.
Speaker 5 (06:57):
I mean, we tend to view it as a continued credit.
I'd say has has been a good addition. It's been
a good addition to bank lending. The only comment I
would make, on the other hand is investment grade credit
spreads are very tight, but it's investment grade. I think
(07:18):
the watchout is the lesson investment great side of private credit.
We haven't had a credit cycle in many years. We're
not going to have one. I don't think in twenty six.
We'll have one eventually, and so there's a lot of
money flowing in to lesson investment, great private credit.
Speaker 4 (07:33):
I'd be careful about that.
Speaker 2 (07:35):
Robert Caplin, thank you so much, greatly, greatly appreciated, of course,
the former president of Dallas FED and with Goldman sachs
Now and of course an affiliation Hardard over the years.
Speaker 3 (07:46):
Stay with us.
Speaker 2 (07:47):
More from Bloomberg Surveillance coming up after this.
Speaker 1 (07:57):
You're listening to the Bloomberg Surveillance podcast. Catch us Live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch us Live on YouTube.
Speaker 2 (08:10):
We talked to a number of people I think at
Hugh von steina Is over at Oliver Wyman who have
like legit academic they've worked at it. They just don't
go get a piece of parch bin, they work at it.
Alexis Crow's out of Saint Andrews and a London School
of Economics with all sorts of ability tooling teaching. I
should say at LLC as well. She rounded out of
(08:32):
pw C Price Waterhouse Coopers. I'm sorry, I'm going to
call it that. It's Ernst and Winnie and it's Deloitte,
Haskin and Sells. But Alexis Crow joins U s a
partner Chief Economist pw C.
Speaker 3 (08:45):
When you see a headline Disney to make one billion
equity investment, is it a time? Is it a frenzy
right now? Is it an unthinking frenzy where we're just
like do this.
Speaker 8 (08:57):
It's one hundred percent, Tom, thank you, It's one hundred
percent a US focus game. This is very exclusively. If
you're in capital markets and you're INAI, it's US. If
you're in government spending, it's China, and Europe is still
sort of looking askance at the whole thing. So I
think there's a fomo element here as well with companies
(09:17):
and they need to communicate to their shareholders that they're
investing in next generation technology, which today is AI.
Speaker 2 (09:23):
You're at sixty thousand feet, what do you hear from
PwC clients. I'm fascinated by the PwC does is kickoff
at Davos. If you're a young global leader, you know
they do the first meeting in a basement of the
belvedere and it's your outlook in your nailsis give us
a heads up on that.
Speaker 8 (09:40):
I mean, I think one thing that's striking Tom is
that over time the availability of key skills has been
a key pressure point and a key concern for CEOs,
regardless of jurisdiction, regardless of sector. And so I think
AI is meant to be this panacea that's going to
solve the.
Speaker 7 (09:56):
World of all of its ills.
Speaker 8 (09:58):
If we're thinking about a shortage of skills, if we're
thinking about an uplift in productivity, if we're thinking about
investment to support capital markets and returns and consumer firepower,
and so that continues to be the buzzword. The interesting
thing is can you separate AI a little bit out
from other investments in technology? And when you strip that away,
you might get a little different reading.
Speaker 6 (10:19):
So one of the questions I have when of the
folks come in here and they throw about these monster numbers,
how much is really incremental spending versus just shifting spending
from it? And I'm not sure I'm getting a great
answer there. One of the things we also talk about
from economics perspective is that Cay shaped economy. You guys
have a little bit different view on it, talking about
a pac Man economy.
Speaker 7 (10:37):
Talk to us about that.
Speaker 3 (10:38):
That's right, Paul.
Speaker 8 (10:39):
Exclusively, in the United States, we have a situation where
the K, the top part of the K, continues to appreciate, right,
the top parts of the income distribution, spending, income, wealth,
purchasing power all appreciating significantly. But rather than a K,
the bottom part of the income distribution, the bottom fifteenth
percentile has flatlined. It's not continued to tumble. Okay, net
(11:01):
worth held by the bottom fiftieth percentile in the United
States has more than doubled over the last five years
four point two trillion dollars. Really, I didn't, Okay, we
had a Genie coefficient, which is, you know, technical technical
way of looking at inequality actually tumbled by the single
greatest amount on record twenty nineteen to twenty twenty one.
(11:22):
So we had, of course a tight labor market, creative
destruction in the labor market, and all of this contributed
to real incomes appreciating by twenty percent.
Speaker 6 (11:30):
Is that all the stimulus coming in from the pandemic.
Speaker 8 (11:32):
Stimulus, tight labor market wages appreciated significantly. We had job
creation and new sectors such as logistics right and immediate delivery.
And that's in contrast to Europe, where again you just
also do not have that wealth appreciation and significant purchasing
power coming from that.
Speaker 3 (11:51):
Genie coefficient, Folks, is really really important.
Speaker 2 (11:54):
It's a good way to get a quality See on
an exam at Saint Andrews years ago, the gloom up
there is the model you studied in the United Kingdom
of Victorian England, where it's the rich, the aristocracy and
that almost pre gilded age, and there's the havenots crushed.
Speaker 3 (12:11):
You just really pushed against that.
Speaker 2 (12:14):
How do we show that the bottom half is doing
better even though there's those primal anks.
Speaker 3 (12:22):
Witness the President's polling numbers this morning, Thank you Tom.
Speaker 8 (12:26):
This is a fragile moment, right that bottom fiftieth percentile.
The economic fortunes of this group have flatlined, but we're
hovering in this flatline. We've had a teppet housing market
right over twenty twenty five in the US, rent declines
down five consecutive months, Schiller down. We've had oil in
the tank, right, absolutely bear market and oil. So that's
(12:49):
also supported some of the basic needs of this group,
so that's also supported, and otherwise that might be and
not a benign inflation share divinument.
Speaker 2 (12:58):
Society right now does not support all boats rising. If
the haves do well, they'll pull up the have nuts.
That's not in the zeitgeist right now.
Speaker 8 (13:07):
What we need to think about is how can policy
makers be seating investments in things that enhance productivity and
quality of life for ordinary citizens.
Speaker 7 (13:18):
One of those is affordable housing.
Speaker 3 (13:20):
Right now, the price.
Speaker 8 (13:21):
On housing has been coming down, but ultimately we have
a chronic shortage of supply and affordable housing. That's how
you think about economic dignity and the means to live
a dignified life. It's one thing Tom that also crucially
Republicans and Democrats agree upon, and we see that, which
is one positive outlook in our fractured environment.
Speaker 6 (13:40):
So twenty twenty six, what's just kind of your economic
outlook here? The Fed probably feels okay about the economy. Here,
we might get one or two breakouts.
Speaker 9 (13:50):
What's your view?
Speaker 8 (13:50):
Yeah, interesting summary. Your economic projections came out yesterday slightly
rosier on GDP growth. I think that everyone is focused
to the start of our conversation. Every one is focused
on a productivity uplift that will come from AI. My
verdict is it will take longer to play out. But
I think consumption in the US is still supporting growth
and that's seventy percent of our GDP.
Speaker 2 (14:11):
Can I go British and not talk to Todts losing Sun?
I mean, yeah, Totnam is crushing Alexis Crow just as
simple as I can. Is Farage a Trump equivalent?
Speaker 7 (14:23):
I think Tom.
Speaker 8 (14:23):
The one thing that we're considering is what happens to
the fate of institutions under a Farage government?
Speaker 4 (14:29):
Right?
Speaker 8 (14:30):
Will there be the same degree and rigor of institutional
change that we've witnessed over the last year in the
United States, which, let's face it, hasn't shown up in
equity markets, hasn't really shown up in the bond market,
but has shown up in DXY and current fascinating.
Speaker 2 (14:46):
What's your basic take on the not the likelihood of it,
but is there a Trump analog over to the London
and the United Kingdom?
Speaker 8 (14:56):
The UK has a highly individualistic society, just as we
do in the US, and I think that lends itself
toward sharper polarization in contrast with what we see in Germany,
from Spain, Portugal, Italy. So yes, I think they're primed
for a degree of that.
Speaker 3 (15:13):
We'll have to see.
Speaker 2 (15:13):
Alexis Crow. Thank you so much. You've got to keep
it short today. The news flow is crushing this woman.
Have you been to the North Point Cafe at Saint Andrews?
Where will you met young Kate Middleton?
Speaker 4 (15:26):
Oh?
Speaker 3 (15:26):
Yeah, I got a photo after thought it was there.
Send me a photo. OMG, it's true. Nice Alexis Crow.
Thank you. So are you going to Davas? Will you
be there for the PwC kickoff?
Speaker 8 (15:37):
Sadly I will not be there.
Speaker 3 (15:38):
I will not be there either. Will you be in
London after that?
Speaker 2 (15:42):
See Lisa as the golf stream that week. I'll have
to see, Alexis.
Speaker 3 (15:47):
Thank you so much. Alexis Crow. This is pw SEE
stay with us.
Speaker 2 (15:51):
More from Bloomberg Surveillance coming up after this.
Speaker 1 (16:01):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Otto
with the Bloomberg Business app. You can also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa play Bloomberg eleven thirty in Steely.
Speaker 2 (16:19):
He's with JP Morgan Asset Management CIO Fixed Income International
in from London as well.
Speaker 3 (16:26):
I want to go wide and broad here.
Speaker 2 (16:27):
What's the biggest misconception Americans have about all the worries
about the United Kingdom and the politics and the royal
family and Son is no longer with Tottenham.
Speaker 3 (16:40):
What's the biggest myth that drives you.
Speaker 2 (16:43):
Nuts about the way America perceives your United Kingdom.
Speaker 9 (16:47):
That's interesting because both my boys are Tottenham fans, so
they're devastated that Son is.
Speaker 7 (16:51):
No longer with them either.
Speaker 9 (16:53):
I think from a fixed income standpoint, actually what you're
looking at is you're looking at a UK bond market,
which actually US offer a lot of values.
Speaker 3 (17:01):
There's an opportunity here in others chaos.
Speaker 9 (17:03):
There is because if you think about the central banks
that haven't eased as much as maybe others, the Bank
of England stands up as the front runner. And that's
partly because the inflation pressure has been more sticky than
anywhere else in the world. We do think that is
coming down over the course of course of the next year.
And actually, when I look at what the Bank of
(17:24):
England is pricing. I think they could be doing more
so that for us, when we look globally at bond markets,
we would probably put the UK up there is one
of the better opportunities.
Speaker 6 (17:32):
Okay, So I mean, I'm just looking at the igo
function on the Bloomberg terminal, looking at the fixed income returns.
Speaker 7 (17:38):
This year twenty twenty five.
Speaker 6 (17:39):
Is a really good year, high single digit returns across
a lot of fixed income markets. Where's the twenty twenty
six setup for you guys.
Speaker 7 (17:46):
So I think it's going to be a similar environment.
Speaker 9 (17:48):
And I think what we heard we heard obviously from
from Power yesterday, they still got that easing bias in.
I think, what are the kind of really interesting comments
that he's kind of almost slammed the door shut. No
one was really predicting hikes as the next the next move.
That said, obviously, yields have come down a long way,
so it's really, in my mind more of a carry environment.
But that's still reasonably attractive carry, and then you get
(18:10):
the opportunity that things do go wrong. The diversification of
bonds I think is back, which means there's a lot
of capital gains if this labor market continues to deteriorate
further and faster than the market expects and probably we expect.
But I think that's the two things that I always
think of it as the bond dream team, income diversification,
both of them I think are in play for next year.
Speaker 6 (18:31):
How much credit risks do you want to take in
twenty twenty six year, because I'm looking at that again,
some of the returns in twenty twenty five leverage loans,
US high yields, some really good returns there. Have that
credit risk in twenty six.
Speaker 9 (18:42):
It's a really good point because spreads are tight. But
corporate fundamentals in our minds and from our analyst.
Speaker 7 (18:50):
View, look really healthy.
Speaker 9 (18:52):
And if you think what's been happening just over the
last few months, obviously sort of the tariff fears have
kind of faded into the background a bit. Let's see
what happens there. Inflation hasn't been as elevated over here.
Speaker 7 (19:01):
As was expected.
Speaker 9 (19:03):
We've had the FED cut race three times now, one
big beautiful bill act. We should be getting some fiscal
sport in the first half of next year. All of
that combines that actually corporates, from a good starting point
should be beneficiaries of that. So although again spreads are tight,
doesn't feel like we're going to be much tighter. But
you're getting that incremental carry and it's that compounding interest.
Speaker 7 (19:23):
But you need to have fixed income.
Speaker 9 (19:24):
If you don't take it, and spreads don't go anywhere,
you're missing out.
Speaker 2 (19:28):
A briefing for me and Steely of JP Morgan this
morning to get us start a dense scully on deck
with a Morgan Stanley.
Speaker 3 (19:35):
Okay, So if spreads are.
Speaker 2 (19:36):
Tight, it's comparing a like bond with a different like
bond versus full faith incredit treasury. Right during the FED
meeting yesterday, I'm looking at the difference in yield between
the vanilla two year ten year, the pistachio three month
ten year, or across the entire curve of three month
out to thirty year. It's getting steeper. I mean, the
(19:58):
fact is three months you versus thirty year us, the
difference in yield is getting ever larger.
Speaker 3 (20:05):
Discuss it on.
Speaker 2 (20:06):
An international basis. If we see curves steepening because of eggs,
what's that mean for our listeners and viewers?
Speaker 9 (20:14):
I think I think you make a good point there,
because it's the viewers should be aware that this isn't
just a US phenomenon. Curves are steepening around Japan rageally,
but even if you look at the UK, if you
look at Germany and the Eurozone, curves are steepening. And
that's partly because we're getting closer to the end of
the the easing cycle. Again, let's see what happens with
(20:37):
the data on that. But also there's a huge amount
of government debt being issued globally. And again, yes, you
spend a lot of time talking about the deficit that
you have over here in the US, but actually fiscal
support is coming globally, so there's going to be a
lot of bond issuance out of governments. And ultimately, what
you're seeing is that because of quantitative tightening, the sort
(20:57):
of indiscriminate buyer central banks they've faded, so it's now
with the private sector and their price setters, and they're.
Speaker 7 (21:05):
Demanding a little bit more, a little bit more yield,
So we're seeing term premiums move higher.
Speaker 9 (21:09):
And actually, to be honest, for US as fixed income investors,
it's good because what we hated a year and eighteen
months ago was inverted yield curves. Cash rates being higher
than bond yields meant actually why would you step out
of cash? Now you get steep curves, you get very
attractive role and carry. Actually it's a really good time
I think, to be looking at investing into the fixed
income markets.
Speaker 6 (21:30):
For some of our listeners and viewers that may be
interested in Europe, where are the values there in Europe
broadly defined?
Speaker 9 (21:36):
So I think actually what you're seeing is some of
the peripheral countries which obviously people didn't want to go
anywhere near a decade or so ago, they are really improving.
We're seeing upgrades from the rating agencies for places like Italy. Again,
the spreads, the difference between an Italian bond and a
Spanish bond and versus Germany, which is how we think
about it in Europe, those have come in. But again
(21:58):
it's a similar story to the Creditsit suation that although
the spreads do look tight, you're getting extra yield. And
if those spreads don't, why didn't you want to be
taken that extra yield?
Speaker 3 (22:08):
Yeah, I mean it's like Mary Poppins, they're a twenty
five bunk.
Speaker 2 (22:11):
Yeah, they're bunks reet sure, and the wharf you're going
to build.
Speaker 3 (22:14):
A new palace.
Speaker 2 (22:15):
Do you perceive it to be as big as the
Park Avenue palace or is that like sink into the river.
Speaker 9 (22:22):
There's gonna be some serious foundations there. It's it's pretty exciting.
Speaker 2 (22:26):
Obviously, there's a place was dead for a while, great
financial crisis and there but between the boys tail cigar
bar and I mean, it's a long way to Shakeshack
from where you're located. Can you walk from where you
are to Shakeshack or do you have to take the
JP Morgan helicopter.
Speaker 7 (22:40):
Can I can walk to the nearer Shakeshack?
Speaker 2 (22:42):
Okay, very good?
Speaker 7 (22:43):
I tell you it.
Speaker 6 (22:44):
When I first went out to Canary Wharf twenty five
years ago, when Solomon City was out there, nobody, no
one was there, nobody. Now it is a world onto itself.
Speaker 2 (22:54):
Do people prefer to be on the wharf discreet or
do they want to be in the city near Queen
Victoria Street.
Speaker 9 (22:59):
And I think it depends depends what you're doing for
us as an asset management where we're in the city
and we like it at.
Speaker 6 (23:06):
Okay, the city, you know, it's still the DLR makes
it so much better.
Speaker 3 (23:11):
But this is really cool, this building program and mister
Diamond is really something. You know, everybody's gonna follow them. Sure,
absolutely got it. Where's mister Griffin? Where's the Citadel place?
Speaker 4 (23:21):
Exactly in Miami Beach.
Speaker 10 (23:23):
Oh, look, there's watches of Switzerland. They get a little
business this year, they don't. I wonderful to see if
bring about Michael next time. Ian seely with us here
with JP Morgan Asset Management and from London, stay with us.
Speaker 2 (23:36):
More from Bloomberg Surveillance coming up after this.
Speaker 1 (23:46):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Auto
with the Bloomberg Business app. You can also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa, play Bloomberg eleven thirty and now.
Speaker 3 (24:04):
The newspapers for the day. Here's protein pancake. You got it?
Speaker 4 (24:08):
Okay.
Speaker 11 (24:09):
When you're speaking with people in the industry, whether they
come in in the studio, oho, you're at an event,
do you notice that some of them have job titles
that you're just like, well, yeah, partly.
Speaker 7 (24:19):
From some of the big investment banks.
Speaker 3 (24:20):
Oh, come in here, so it is true.
Speaker 11 (24:22):
So LinkedIn estimates that one in five Americans has a
job that didn't exist back in two thousand, things like
knowledge architects, oh, conversation designers and orchestration engineers. Okay, and
these are all things that are actually type tied to
work with AI models. So now that AI is becoming
more prevalent in the industry, that you're having these these
(24:44):
different titles come out.
Speaker 3 (24:45):
Application.
Speaker 6 (24:46):
I put down petroleum distribution engineer, Phillips sixty six Corporation.
Speaker 7 (24:50):
A punk gasn exactly distribution how much?
Speaker 3 (24:57):
Oh, it's like less than a dollar again? First time?
I forty four cents in jelly.
Speaker 4 (25:02):
Yeah.
Speaker 6 (25:03):
The great thing was there's a brand new golf station
and a brand new excellent across the street.
Speaker 7 (25:06):
That's where everybody went because it was brightly lit.
Speaker 3 (25:09):
Nobody came to our gan station.
Speaker 7 (25:10):
So I read like three books a week. I love it.
Speaker 11 (25:15):
But the reason this is big is because you know,
you have holiday parties and these things coming up, and
so now all these people are saying, well, now I
have to explain what I do. You know, they say,
what do you do? And they have to explain it.
Speaker 3 (25:24):
So that's the whole all of the toilets. We got
to move on yes, the phrase I hate the most
thought leader just it just makes me cringe. Next cringe story. Okay,
cringe story.
Speaker 11 (25:37):
Okay, we know all inclusive resorts, right, Paul, I love them.
Speaker 3 (25:40):
Yes, I know, I know you're a big fan. Yes,
but more travelers.
Speaker 11 (25:44):
Want adventure, they want outdoor adventure. So now there are
all inclusive adventure resorts. Okay, So for the one whole price,
you get activities like fly fishing and horseback running. It's
snorkeling and rafting and all those things that you would
have to pay separate for all in one hey, in
between the meals and a happy hour, so you get
all that together. How much is it going to cost?
(26:06):
So you have the luxury ones that can cost about
twenty three hundred a night. Then you have others that
charge maybe like five hundred and fifty dollars a night.
So that's kind of the range of price. But they
say the pandemic, you know, push people to want these
outdoor adventures. So now people want it, and so the
resort industry has answered their request.
Speaker 3 (26:25):
It's helped me here.
Speaker 2 (26:26):
Then if we're on this, maybe it's an adventure. I'm
doing c IFA Society Phoenix in March. We're really looking
forward to it. A great event if the omni Scott
still Montelucia.
Speaker 3 (26:39):
Sure is that like the outdoor activity?
Speaker 6 (26:41):
Oh yeah, there's no snakes right and all the plenty
of snakes, plenty of hiking, horse piping.
Speaker 3 (26:48):
For to go all in.
Speaker 2 (26:49):
Yeah, bow tie and a hand there you.
Speaker 11 (26:54):
Gor This last one, real quick came out yesterday, but
it was after a show, so we didn't get to
try about it. The fears competition for pay TV customers
YouTube subscribers. They have more options now. So what YouTube
is doing, they're doing a little bit more customization, so
they have lower price channel bundles. Okay, it's starting early
next year.
Speaker 6 (27:13):
Yeah, there's slice. They have so much content at YouTube
that sometimes it's hard to find. And you know, so
you're doing what everybody else does. You just segment the market.
Speaker 2 (27:22):
But is it a battle for chun because I know,
I hate spending that big monthly fee because.
Speaker 6 (27:31):
Yeah, so there again, I just think it's like any
other business and the other consumer product. You're segmenting the market,
you know, and maximize your revenue SOLI, so it plays out,
But I mean YouTube, how much time do people spend
on YouTube?
Speaker 7 (27:43):
It's crazy these days.
Speaker 3 (27:44):
That's where they's going in the charts. Here.
Speaker 2 (27:47):
Thank you Robert Fisherman and Moffatson for being with this yesterday.
That was really informative. Lisa Matteo, thank you so much. Now,
do you break now and we'll get the third breakfast.
Speaker 11 (27:57):
No, that's likely in about two hours.
Speaker 3 (27:59):
Yes, this is a third breakfast thing the newspapers.
Speaker 1 (28:03):
This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(28:23):
always on the Bloomberg terminal
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple CarPlay or Android Auto with the Bloomberg Business app.
Listen on demand wherever you get your podcasts, or watch
(00:25):
us live on YouTube.
Speaker 2 (00:27):
Robert Kaplin with us right now is affiliated with Gold
and Sex and of course his public service at the
Dallas Fed.
Speaker 3 (00:33):
This is great.
Speaker 2 (00:34):
I thought Austin Golesby's descent yesterday was really something with
his technology bent his workout at MIT at Chicago.
Speaker 3 (00:44):
Now, I just, you know, my.
Speaker 2 (00:45):
Own individual opinion is Goolsby something really worth watching here.
Mark Winn is out of Ireland Rochester has a shingle
out at the Dallas Fed. And of course Mark Winn,
under your student guidance years ago, has a spectacle killer
essay out on AI. In the summary of Mark Win's
work is we just don't know, do we?
Speaker 4 (01:08):
Well.
Speaker 5 (01:09):
I think we're in the early stages of AI adoption.
Most of the talk about AI right now is about
the infrastructure build, but that's different than the downstream adoption.
We're in the first or second inning. I think my
own view and I think the view of My firm
is when we talk five years from now, we'll see
a half a percentage point gain in productivity growth for
(01:30):
GDP and it will help business.
Speaker 4 (01:33):
But which use cases work and which don't.
Speaker 5 (01:36):
We're going to spend the next three years trying to
figure that out.
Speaker 6 (01:41):
Net is it positive for the economy and how material
because a lot of folks are hanging their hat on
AI is really being a productivity enhancered to really impact
the economy.
Speaker 5 (01:52):
If you got a half a percentage point jump in
productivity growth, that's a huge deal. So we have sluggish
workforce growth in the United States.
Speaker 4 (02:03):
We don't have much immigration at the moment.
Speaker 5 (02:05):
Bulk of our GDP growths got to come from productivity growth.
So AI is very important to the world and to
the US. And yeah, half a percentage point would be
a big deal.
Speaker 6 (02:15):
Would you take away yesterday from the FED meeting?
Speaker 4 (02:17):
Here? Pretty straightforward?
Speaker 5 (02:22):
I think that I think in the room there was
a lot more disagreement than it may have looked like,
only a couple.
Speaker 4 (02:29):
Of descents, but we're at or near neutral.
Speaker 5 (02:35):
I think Jpell even said that it shows confirms that
I think the neutral rate nominal is about three and
a half three and three quarters, and some of the
folks say, with inflation at two and three quarters and
the job market likely to firm in the.
Speaker 4 (02:49):
Next year, we shouldn't be at neutral.
Speaker 5 (02:51):
And I think overall they bought insurance in case the
labor market's weaker than they thought. But from here it
will be a conventional FED, meaning something's got changed to
move the rate, either unemployment needs to worsen or inflation
needs to improve.
Speaker 2 (03:06):
Accrastination Robert Kaplan with US of Gold and Sachs's former
services the Dallas Fed. So say, we say good morning
to Texas as well. So I look at yesterday's meeting,
and I look at all the what IFFs that are
out there, and the bottom line is a dual mandate.
And I kept carrying them back and forth on the
dual mandate. What's the history that you've studied of whether
(03:28):
they focused on inflation or jobs, And don't tell me both,
because it's really hard to do that well.
Speaker 5 (03:34):
For a lot of the last ten or fifteen years,
the Fed had the luxury exact free COVID of not
having an inflation problem, so it could focus heavily on
what was going on employment.
Speaker 4 (03:48):
And I thought employment was.
Speaker 5 (03:49):
Weakening, it could move post COVID, and I would argue,
with this boom in government spending we had in twenty
twenty one, twenty two, twenty three, which probably costs supply
chain dynamics to create an excess demand issue, they got
(04:09):
to deal with both, and it's harder to deal with both,
and so then they have to make trade off decisions
and that's hard to do. And having said that, I
think they've done a reasonable balancing job. But that's the
reason for the division in the group. It's not that
they prioritize one over the other. I think the fact
(04:30):
is we've had three headwinds. One in the short run,
tariffs are slowing growth, the immigration policy is slowed growth.
And the shutdown, as you would expect to slow growth,
but the shutdown is reversing. And going into twenty six,
we're in a f tax incentives, We've got this AI
boom continuing, and I think the economy is likely to firm,
and you saw that in the dot plot. And people
(04:52):
are saying, you know, the labor weakness is going to
a firm, let's do nothing, And that's the reason for
the debate.
Speaker 6 (04:58):
Interesting, when you talk to your clients at Goldman Sachs,
what is their view for twenty twenty six we're seeing
I kind of look at M and A as a
barometer of how confident the C suite is and the
board is, and we're seeing a big M and A
trade going crazy out there with Warner Brothers Discovery. When
you talk to your corporate clients, are think confident about
their ability in twenty twenty six to maybe grow?
Speaker 5 (05:19):
I think most companies believe, as we do that twenty
six you'll see firming GDP growth because of tax and
centers and other reasons.
Speaker 4 (05:27):
However, I've never.
Speaker 5 (05:30):
Seen a period in my business career where there wasn't
a bigger concern about the need for size and scale
to afford the technology investment that's driving a lot of
merger activity.
Speaker 2 (05:42):
We can cover this a number of times this week
as well. So then do we head towards a monopsimistic America?
Do we have a capitalism that is essentially a big
roll up to get the CAPEX scale?
Speaker 5 (05:52):
I think you're going to have lots of still small
emerging businesses powered by AI that can grow and will
be very attractive, and they'll get to a point where
they kind of stabilize. You'll have lots of very big,
huge scale companies that are dominant, and you're going to
have a lot in between. And I guess i'd say
it in between has gotten a lot bigger. And the
(06:15):
last companies that used to think they were big and
dominant and still aren't less dominant.
Speaker 2 (06:20):
I looked at Procter and Gamble carefully, so iind of
want you to comment on individual security.
Speaker 3 (06:24):
But what does old industry do in their in between?
Speaker 5 (06:28):
This build size and scale and make more investment in efficiency, productivity,
technology and so all that costs money and in the
short run reduce as margins. And that's why you also
see a lot of bell tightening right now right now
to offset some of the margin impact.
Speaker 6 (06:50):
One of the newer developments capital markets wise, there the
last fifteen years have been private credit.
Speaker 7 (06:54):
What's your view there.
Speaker 5 (06:57):
I mean, we tend to view it as a continued credit.
I'd say has has been a good addition. It's been
a good addition to bank lending. The only comment I
would make, on the other hand is investment grade credit
spreads are very tight, but it's investment grade. I think
(07:18):
the watchout is the lesson investment great side of private credit.
We haven't had a credit cycle in many years. We're
not going to have one. I don't think in twenty six.
We'll have one eventually, and so there's a lot of
money flowing in to lesson investment, great private credit.
Speaker 4 (07:33):
I'd be careful about that.
Speaker 2 (07:35):
Robert Caplin, thank you so much, greatly, greatly appreciated, of course,
the former president of Dallas FED and with Goldman sachs
Now and of course an affiliation Hardard over the years.
Speaker 3 (07:46):
Stay with us.
Speaker 2 (07:47):
More from Bloomberg Surveillance coming up after this.
Speaker 1 (07:57):
You're listening to the Bloomberg Surveillance podcast. Catch us Live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch us Live on YouTube.
Speaker 2 (08:10):
We talked to a number of people I think at
Hugh von steina Is over at Oliver Wyman who have
like legit academic they've worked at it. They just don't
go get a piece of parch bin, they work at it.
Alexis Crow's out of Saint Andrews and a London School
of Economics with all sorts of ability tooling teaching. I
should say at LLC as well. She rounded out of
(08:32):
pw C Price Waterhouse Coopers. I'm sorry, I'm going to
call it that. It's Ernst and Winnie and it's Deloitte,
Haskin and Sells. But Alexis Crow joins U s a
partner Chief Economist pw C.
Speaker 3 (08:45):
When you see a headline Disney to make one billion
equity investment, is it a time? Is it a frenzy
right now? Is it an unthinking frenzy where we're just
like do this.
Speaker 8 (08:57):
It's one hundred percent, Tom, thank you, It's one hundred
percent a US focus game. This is very exclusively. If
you're in capital markets and you're INAI, it's US. If
you're in government spending, it's China, and Europe is still
sort of looking askance at the whole thing. So I
think there's a fomo element here as well with companies
(09:17):
and they need to communicate to their shareholders that they're
investing in next generation technology, which today is AI.
Speaker 2 (09:23):
You're at sixty thousand feet, what do you hear from
PwC clients. I'm fascinated by the PwC does is kickoff
at Davos. If you're a young global leader, you know
they do the first meeting in a basement of the
belvedere and it's your outlook in your nailsis give us
a heads up on that.
Speaker 8 (09:40):
I mean, I think one thing that's striking Tom is
that over time the availability of key skills has been
a key pressure point and a key concern for CEOs,
regardless of jurisdiction, regardless of sector. And so I think
AI is meant to be this panacea that's going to
solve the.
Speaker 7 (09:56):
World of all of its ills.
Speaker 8 (09:58):
If we're thinking about a shortage of skills, if we're
thinking about an uplift in productivity, if we're thinking about
investment to support capital markets and returns and consumer firepower,
and so that continues to be the buzzword. The interesting
thing is can you separate AI a little bit out
from other investments in technology? And when you strip that away,
you might get a little different reading.
Speaker 6 (10:19):
So one of the questions I have when of the
folks come in here and they throw about these monster numbers,
how much is really incremental spending versus just shifting spending
from it? And I'm not sure I'm getting a great
answer there. One of the things we also talk about
from economics perspective is that Cay shaped economy. You guys
have a little bit different view on it, talking about
a pac Man economy.
Speaker 7 (10:37):
Talk to us about that.
Speaker 3 (10:38):
That's right, Paul.
Speaker 8 (10:39):
Exclusively, in the United States, we have a situation where
the K, the top part of the K, continues to appreciate, right,
the top parts of the income distribution, spending, income, wealth,
purchasing power all appreciating significantly. But rather than a K,
the bottom part of the income distribution, the bottom fifteenth
percentile has flatlined. It's not continued to tumble. Okay, net
(11:01):
worth held by the bottom fiftieth percentile in the United
States has more than doubled over the last five years
four point two trillion dollars. Really, I didn't, Okay, we
had a Genie coefficient, which is, you know, technical technical
way of looking at inequality actually tumbled by the single
greatest amount on record twenty nineteen to twenty twenty one.
(11:22):
So we had, of course a tight labor market, creative
destruction in the labor market, and all of this contributed
to real incomes appreciating by twenty percent.
Speaker 6 (11:30):
Is that all the stimulus coming in from the pandemic.
Speaker 8 (11:32):
Stimulus, tight labor market wages appreciated significantly. We had job
creation and new sectors such as logistics right and immediate delivery.
And that's in contrast to Europe, where again you just
also do not have that wealth appreciation and significant purchasing
power coming from that.
Speaker 3 (11:51):
Genie coefficient, Folks, is really really important.
Speaker 2 (11:54):
It's a good way to get a quality See on
an exam at Saint Andrews years ago, the gloom up
there is the model you studied in the United Kingdom
of Victorian England, where it's the rich, the aristocracy and
that almost pre gilded age, and there's the havenots crushed.
Speaker 3 (12:11):
You just really pushed against that.
Speaker 2 (12:14):
How do we show that the bottom half is doing
better even though there's those primal anks.
Speaker 3 (12:22):
Witness the President's polling numbers this morning, Thank you Tom.
Speaker 8 (12:26):
This is a fragile moment, right that bottom fiftieth percentile.
The economic fortunes of this group have flatlined, but we're
hovering in this flatline. We've had a teppet housing market
right over twenty twenty five in the US, rent declines
down five consecutive months, Schiller down. We've had oil in
the tank, right, absolutely bear market and oil. So that's
(12:49):
also supported some of the basic needs of this group,
so that's also supported, and otherwise that might be and
not a benign inflation share divinument.
Speaker 2 (12:58):
Society right now does not support all boats rising. If
the haves do well, they'll pull up the have nuts.
That's not in the zeitgeist right now.
Speaker 8 (13:07):
What we need to think about is how can policy
makers be seating investments in things that enhance productivity and
quality of life for ordinary citizens.
Speaker 7 (13:18):
One of those is affordable housing.
Speaker 3 (13:20):
Right now, the price.
Speaker 8 (13:21):
On housing has been coming down, but ultimately we have
a chronic shortage of supply and affordable housing. That's how
you think about economic dignity and the means to live
a dignified life. It's one thing Tom that also crucially
Republicans and Democrats agree upon, and we see that, which
is one positive outlook in our fractured environment.
Speaker 6 (13:40):
So twenty twenty six, what's just kind of your economic
outlook here? The Fed probably feels okay about the economy. Here,
we might get one or two breakouts.
Speaker 9 (13:50):
What's your view?
Speaker 8 (13:50):
Yeah, interesting summary. Your economic projections came out yesterday slightly
rosier on GDP growth. I think that everyone is focused
to the start of our conversation. Every one is focused
on a productivity uplift that will come from AI. My
verdict is it will take longer to play out. But
I think consumption in the US is still supporting growth
and that's seventy percent of our GDP.
Speaker 2 (14:11):
Can I go British and not talk to Todts losing Sun?
I mean, yeah, Totnam is crushing Alexis Crow just as
simple as I can. Is Farage a Trump equivalent?
Speaker 7 (14:23):
I think Tom.
Speaker 8 (14:23):
The one thing that we're considering is what happens to
the fate of institutions under a Farage government?
Speaker 4 (14:29):
Right?
Speaker 8 (14:30):
Will there be the same degree and rigor of institutional
change that we've witnessed over the last year in the
United States, which, let's face it, hasn't shown up in
equity markets, hasn't really shown up in the bond market,
but has shown up in DXY and current fascinating.
Speaker 2 (14:46):
What's your basic take on the not the likelihood of it,
but is there a Trump analog over to the London
and the United Kingdom?
Speaker 8 (14:56):
The UK has a highly individualistic society, just as we
do in the US, and I think that lends itself
toward sharper polarization in contrast with what we see in Germany,
from Spain, Portugal, Italy. So yes, I think they're primed
for a degree of that.
Speaker 3 (15:13):
We'll have to see.
Speaker 2 (15:13):
Alexis Crow. Thank you so much. You've got to keep
it short today. The news flow is crushing this woman.
Have you been to the North Point Cafe at Saint Andrews?
Where will you met young Kate Middleton?
Speaker 4 (15:26):
Oh?
Speaker 3 (15:26):
Yeah, I got a photo after thought it was there.
Send me a photo. OMG, it's true. Nice Alexis Crow.
Thank you. So are you going to Davas? Will you
be there for the PwC kickoff?
Speaker 8 (15:37):
Sadly I will not be there.
Speaker 3 (15:38):
I will not be there either. Will you be in
London after that?
Speaker 2 (15:42):
See Lisa as the golf stream that week. I'll have
to see, Alexis.
Speaker 3 (15:47):
Thank you so much. Alexis Crow. This is pw SEE
stay with us.
Speaker 2 (15:51):
More from Bloomberg Surveillance coming up after this.
Speaker 1 (16:01):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Otto
with the Bloomberg Business app. You can also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa play Bloomberg eleven thirty in Steely.
Speaker 2 (16:19):
He's with JP Morgan Asset Management CIO Fixed Income International
in from London as well.
Speaker 3 (16:26):
I want to go wide and broad here.
Speaker 2 (16:27):
What's the biggest misconception Americans have about all the worries
about the United Kingdom and the politics and the royal
family and Son is no longer with Tottenham.
Speaker 3 (16:40):
What's the biggest myth that drives you.
Speaker 2 (16:43):
Nuts about the way America perceives your United Kingdom.
Speaker 9 (16:47):
That's interesting because both my boys are Tottenham fans, so
they're devastated that Son is.
Speaker 7 (16:51):
No longer with them either.
Speaker 9 (16:53):
I think from a fixed income standpoint, actually what you're
looking at is you're looking at a UK bond market,
which actually US offer a lot of values.
Speaker 3 (17:01):
There's an opportunity here in others chaos.
Speaker 9 (17:03):
There is because if you think about the central banks
that haven't eased as much as maybe others, the Bank
of England stands up as the front runner. And that's
partly because the inflation pressure has been more sticky than
anywhere else in the world. We do think that is
coming down over the course of course of the next year.
And actually, when I look at what the Bank of
(17:24):
England is pricing. I think they could be doing more
so that for us, when we look globally at bond markets,
we would probably put the UK up there is one
of the better opportunities.
Speaker 6 (17:32):
Okay, So I mean, I'm just looking at the igo
function on the Bloomberg terminal, looking at the fixed income returns.
Speaker 7 (17:38):
This year twenty twenty five.
Speaker 6 (17:39):
Is a really good year, high single digit returns across
a lot of fixed income markets. Where's the twenty twenty
six setup for you guys.
Speaker 7 (17:46):
So I think it's going to be a similar environment.
Speaker 9 (17:48):
And I think what we heard we heard obviously from
from Power yesterday, they still got that easing bias in.
I think, what are the kind of really interesting comments
that he's kind of almost slammed the door shut. No
one was really predicting hikes as the next the next move.
That said, obviously, yields have come down a long way,
so it's really, in my mind more of a carry environment.
But that's still reasonably attractive carry, and then you get
(18:10):
the opportunity that things do go wrong. The diversification of
bonds I think is back, which means there's a lot
of capital gains if this labor market continues to deteriorate
further and faster than the market expects and probably we expect.
But I think that's the two things that I always
think of it as the bond dream team, income diversification,
both of them I think are in play for next year.
Speaker 6 (18:31):
How much credit risks do you want to take in
twenty twenty six year, because I'm looking at that again,
some of the returns in twenty twenty five leverage loans,
US high yields, some really good returns there. Have that
credit risk in twenty six.
Speaker 9 (18:42):
It's a really good point because spreads are tight. But
corporate fundamentals in our minds and from our analyst.
Speaker 7 (18:50):
View, look really healthy.
Speaker 9 (18:52):
And if you think what's been happening just over the
last few months, obviously sort of the tariff fears have
kind of faded into the background a bit. Let's see
what happens there. Inflation hasn't been as elevated over here.
Speaker 7 (19:01):
As was expected.
Speaker 9 (19:03):
We've had the FED cut race three times now, one
big beautiful bill act. We should be getting some fiscal
sport in the first half of next year. All of
that combines that actually corporates, from a good starting point
should be beneficiaries of that. So although again spreads are tight,
doesn't feel like we're going to be much tighter. But
you're getting that incremental carry and it's that compounding interest.
Speaker 7 (19:23):
But you need to have fixed income.
Speaker 9 (19:24):
If you don't take it, and spreads don't go anywhere,
you're missing out.
Speaker 2 (19:28):
A briefing for me and Steely of JP Morgan this
morning to get us start a dense scully on deck
with a Morgan Stanley.
Speaker 3 (19:35):
Okay, So if spreads are.
Speaker 2 (19:36):
Tight, it's comparing a like bond with a different like
bond versus full faith incredit treasury. Right during the FED
meeting yesterday, I'm looking at the difference in yield between
the vanilla two year ten year, the pistachio three month
ten year, or across the entire curve of three month
out to thirty year. It's getting steeper. I mean, the
(19:58):
fact is three months you versus thirty year us, the
difference in yield is getting ever larger.
Speaker 3 (20:05):
Discuss it on.
Speaker 2 (20:06):
An international basis. If we see curves steepening because of eggs,
what's that mean for our listeners and viewers?
Speaker 9 (20:14):
I think I think you make a good point there,
because it's the viewers should be aware that this isn't
just a US phenomenon. Curves are steepening around Japan rageally,
but even if you look at the UK, if you
look at Germany and the Eurozone, curves are steepening. And
that's partly because we're getting closer to the end of
the the easing cycle. Again, let's see what happens with
(20:37):
the data on that. But also there's a huge amount
of government debt being issued globally. And again, yes, you
spend a lot of time talking about the deficit that
you have over here in the US, but actually fiscal
support is coming globally, so there's going to be a
lot of bond issuance out of governments. And ultimately, what
you're seeing is that because of quantitative tightening, the sort
(20:57):
of indiscriminate buyer central banks they've faded, so it's now
with the private sector and their price setters, and they're.
Speaker 7 (21:05):
Demanding a little bit more, a little bit more yield,
So we're seeing term premiums move higher.
Speaker 9 (21:09):
And actually, to be honest, for US as fixed income investors,
it's good because what we hated a year and eighteen
months ago was inverted yield curves. Cash rates being higher
than bond yields meant actually why would you step out
of cash? Now you get steep curves, you get very
attractive role and carry. Actually it's a really good time
I think, to be looking at investing into the fixed
income markets.
Speaker 6 (21:30):
For some of our listeners and viewers that may be
interested in Europe, where are the values there in Europe
broadly defined?
Speaker 9 (21:36):
So I think actually what you're seeing is some of
the peripheral countries which obviously people didn't want to go
anywhere near a decade or so ago, they are really improving.
We're seeing upgrades from the rating agencies for places like Italy. Again,
the spreads, the difference between an Italian bond and a
Spanish bond and versus Germany, which is how we think
about it in Europe, those have come in. But again
(21:58):
it's a similar story to the Creditsit suation that although
the spreads do look tight, you're getting extra yield. And
if those spreads don't, why didn't you want to be
taken that extra yield?
Speaker 3 (22:08):
Yeah, I mean it's like Mary Poppins, they're a twenty
five bunk.
Speaker 2 (22:11):
Yeah, they're bunks reet sure, and the wharf you're going
to build.
Speaker 3 (22:14):
A new palace.
Speaker 2 (22:15):
Do you perceive it to be as big as the
Park Avenue palace or is that like sink into the river.
Speaker 9 (22:22):
There's gonna be some serious foundations there. It's it's pretty exciting.
Speaker 2 (22:26):
Obviously, there's a place was dead for a while, great
financial crisis and there but between the boys tail cigar
bar and I mean, it's a long way to Shakeshack
from where you're located. Can you walk from where you
are to Shakeshack or do you have to take the
JP Morgan helicopter.
Speaker 7 (22:40):
Can I can walk to the nearer Shakeshack?
Speaker 2 (22:42):
Okay, very good?
Speaker 7 (22:43):
I tell you it.
Speaker 6 (22:44):
When I first went out to Canary Wharf twenty five
years ago, when Solomon City was out there, nobody, no
one was there, nobody. Now it is a world onto itself.
Speaker 2 (22:54):
Do people prefer to be on the wharf discreet or
do they want to be in the city near Queen
Victoria Street.
Speaker 9 (22:59):
And I think it depends depends what you're doing for
us as an asset management where we're in the city
and we like it at.
Speaker 6 (23:06):
Okay, the city, you know, it's still the DLR makes
it so much better.
Speaker 3 (23:11):
But this is really cool, this building program and mister
Diamond is really something. You know, everybody's gonna follow them. Sure,
absolutely got it. Where's mister Griffin? Where's the Citadel place?
Speaker 4 (23:21):
Exactly in Miami Beach.
Speaker 10 (23:23):
Oh, look, there's watches of Switzerland. They get a little
business this year, they don't. I wonderful to see if
bring about Michael next time. Ian seely with us here
with JP Morgan Asset Management and from London, stay with us.
Speaker 2 (23:36):
More from Bloomberg Surveillance coming up after this.
Speaker 1 (23:46):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Auto
with the Bloomberg Business app. You can also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa, play Bloomberg eleven thirty and now.
Speaker 3 (24:04):
The newspapers for the day. Here's protein pancake. You got it?
Speaker 4 (24:08):
Okay.
Speaker 11 (24:09):
When you're speaking with people in the industry, whether they
come in in the studio, oho, you're at an event,
do you notice that some of them have job titles
that you're just like, well, yeah, partly.
Speaker 7 (24:19):
From some of the big investment banks.
Speaker 3 (24:20):
Oh, come in here, so it is true.
Speaker 11 (24:22):
So LinkedIn estimates that one in five Americans has a
job that didn't exist back in two thousand, things like
knowledge architects, oh, conversation designers and orchestration engineers. Okay, and
these are all things that are actually type tied to
work with AI models. So now that AI is becoming
more prevalent in the industry, that you're having these these
(24:44):
different titles come out.
Speaker 3 (24:45):
Application.
Speaker 6 (24:46):
I put down petroleum distribution engineer, Phillips sixty six Corporation.
Speaker 7 (24:50):
A punk gasn exactly distribution how much?
Speaker 3 (24:57):
Oh, it's like less than a dollar again? First time?
I forty four cents in jelly.
Speaker 4 (25:02):
Yeah.
Speaker 6 (25:03):
The great thing was there's a brand new golf station
and a brand new excellent across the street.
Speaker 7 (25:06):
That's where everybody went because it was brightly lit.
Speaker 3 (25:09):
Nobody came to our gan station.
Speaker 7 (25:10):
So I read like three books a week. I love it.
Speaker 11 (25:15):
But the reason this is big is because you know,
you have holiday parties and these things coming up, and
so now all these people are saying, well, now I
have to explain what I do. You know, they say,
what do you do? And they have to explain it.
Speaker 3 (25:24):
So that's the whole all of the toilets. We got
to move on yes, the phrase I hate the most
thought leader just it just makes me cringe. Next cringe story. Okay,
cringe story.
Speaker 11 (25:37):
Okay, we know all inclusive resorts, right, Paul, I love them.
Speaker 3 (25:40):
Yes, I know, I know you're a big fan. Yes,
but more travelers.
Speaker 11 (25:44):
Want adventure, they want outdoor adventure. So now there are
all inclusive adventure resorts. Okay, So for the one whole price,
you get activities like fly fishing and horseback running. It's
snorkeling and rafting and all those things that you would
have to pay separate for all in one hey, in
between the meals and a happy hour, so you get
all that together. How much is it going to cost?
(26:06):
So you have the luxury ones that can cost about
twenty three hundred a night. Then you have others that
charge maybe like five hundred and fifty dollars a night.
So that's kind of the range of price. But they
say the pandemic, you know, push people to want these
outdoor adventures. So now people want it, and so the
resort industry has answered their request.
Speaker 3 (26:25):
It's helped me here.
Speaker 2 (26:26):
Then if we're on this, maybe it's an adventure. I'm
doing c IFA Society Phoenix in March. We're really looking
forward to it. A great event if the omni Scott
still Montelucia.
Speaker 3 (26:39):
Sure is that like the outdoor activity?
Speaker 6 (26:41):
Oh yeah, there's no snakes right and all the plenty
of snakes, plenty of hiking, horse piping.
Speaker 3 (26:48):
For to go all in.
Speaker 2 (26:49):
Yeah, bow tie and a hand there you.
Speaker 11 (26:54):
Gor This last one, real quick came out yesterday, but
it was after a show, so we didn't get to
try about it. The fears competition for pay TV customers
YouTube subscribers. They have more options now. So what YouTube
is doing, they're doing a little bit more customization, so
they have lower price channel bundles. Okay, it's starting early
next year.
Speaker 6 (27:13):
Yeah, there's slice. They have so much content at YouTube
that sometimes it's hard to find. And you know, so
you're doing what everybody else does. You just segment the market.
Speaker 2 (27:22):
But is it a battle for chun because I know,
I hate spending that big monthly fee because.
Speaker 6 (27:31):
Yeah, so there again, I just think it's like any
other business and the other consumer product. You're segmenting the market,
you know, and maximize your revenue SOLI, so it plays out,
But I mean YouTube, how much time do people spend
on YouTube?
Speaker 7 (27:43):
It's crazy these days.
Speaker 3 (27:44):
That's where they's going in the charts. Here.
Speaker 2 (27:47):
Thank you Robert Fisherman and Moffatson for being with this yesterday.
That was really informative. Lisa Matteo, thank you so much. Now,
do you break now and we'll get the third breakfast.
Speaker 11 (27:57):
No, that's likely in about two hours.
Speaker 3 (27:59):
Yes, this is a third breakfast thing the newspapers.
Speaker 1 (28:03):
This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(28:23):
always on the Bloomberg terminal
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