February 28, 2025 • 43 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyFebruary 28th, 2025
Featuring:
- Neil Dutta, Head of US Economic Research at Renaissance Macro Research, Ian Lyngen, Head of US Rates Strategy at BMO Capital Markets, Frances Donald, Chief Economist at RBC, react to PCE and discuss the outlook for US economic growth
- Jordan Rochester, Head of FICC Strategy at Mizuho EMEA, on USD strength and his note on the Japan cyclical story
- Mick Mulroy, co-founder at the Lobo Institute, on Ukrainian President Volodymyr Zelenskiy visiting President Trump at the White House
- Lisa Mateo on newspapers
Eric Mollo
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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):
Victoria Fernandez, Jordan Rochester, Michael McKee, Francis Donald, and Lincoln.
We go into this inflation reports strong with Neil Dutta
of Renaissance Macro. Neil, you're more cautious now on real GDP,
on the growth of the nation, all the inflation numbers
pretty much on the survey, but I really want to
focus out on real personal spending decline way off survey
(00:51):
in personal income with a nice lift as well. I've
got retail inventories which I don't understand. We're going to
skip that. I got a little bit of an equity lift.
I went right to the ten year real yield came
in a little bit, but it comes right back. Neil Dunta,
am I right that this was a nothing burger?
Speaker 3 (01:09):
I mean, real personal consumption fell quite a bit to
start the quarter. That's that's probably gonna put downward pressure
on tracking estimates of first quarter GDP and will probably
prompt some marketing to market of forecasts among among the consensus.
(01:29):
So you know, I don't right, is it a nothing burger?
I mean, I think the inflation numbers came in in
line with expectations, but real GDP is probably getting worse.
Speaker 2 (01:38):
Not This is critical folks with real spending. I mean,
what we see on the eco screen of the the Bloomberg,
real personal spending came in light personal spending itself came
in like a little bit of a constructive revision. But
you know, Neil, Neil, it's unfair to ask this, but
why it's onfair Friday? I mean, do you go, can
you model out subtwo JDP looking at two quarters of
(02:03):
data to the fourth of July.
Speaker 3 (02:07):
Yes, I think that's possible. I mean, look, most of
the upside surprise in GDP growth last year was in
two areas, consumption and government spending an investment. That's what
drove most of the growth. So if you think those
two areas are going to slow, it doesn't really take much.
At the same time, you lay around the fact that
residential construction is likely to get worse, not better. And
(02:30):
you know, I mean export activity was a driver for
growth last year. I mean, if this trade stuff keeps up,
I mean there may be some risk to exports as well.
So I don't think it's that much of a stretch.
I mean you're talking about a zero point five percent
monthly contraction and real consumer spending. I mean these tracking
estimates might be at one percent for the quarter after today.
Speaker 4 (02:50):
Yeah, that's kind of where I wanted to go, Neil,
because I am to this amateur economist here. That's the
number that kind of jumps out. I mean, I'll just
highlight it for the audience, real personal spending. The consensus
was for decline of zero point one percent, came in
a decline of zero point five percent, So missed there
any Compare it to last period where it was revised
higher to positive zero point five percent, So a big
(03:11):
delta there. I do know that, you know, you economists
tell me that the consumers seventy percent of the economy.
So that really does get your attention? Does that? Is
that a number that moves around a lot?
Speaker 3 (03:24):
Real? Well, I mean consumer spending tends to be you know,
more more stable. I mean a lot of acyclical areas
of consumption, right, I mean, so that you know, people
have to go out and kind of spend, but ultimately,
you know, generally speaking, consumption follows u income growth, and
(03:45):
you know, I mean what what what you can basically
say is that you know, in January, I mean there
was a there was an increase in in precautionary saving maybe,
I mean that that's basically what it's income. But again
that goes to totally against what people are sort of
worried about right now, which is inflation expectations. Right I mean,
(04:06):
that's allegedly the reason why the FED is holding off
everyone's planning to you mish. Now, guys, think about what
inflation expectations should mean. It should mean number one, people
are going to bid up their wages because we know
that wage growth is set with short run inflation expectations
in mind. I mean, I don't know, good luck to
any worker that's going to try that right now. I
mean you're in for a root awaken. Importantly, it's you
(04:28):
try to spend more to beat the higher prices later,
there's no evidence that that's happening. You're seeing precautionary saving,
not precautionary spending. So this notion that inflation expectations arising,
and this is why the Fed needs to hold off.
Speaker 2 (04:42):
Is all right, Neil, I want to get one more
question in here. I think it's so important, Ian Lingoln's
being patient to wait for Neil Dudda. Is there a
wealth effect of the fancy people in the personal income,
personal spending? Do you see the stock market? Do you
see the way Paul Sweeney made money on Nvidia? Is
that in those statistics this morning?
Speaker 3 (05:04):
Well, I mean there was a great article from the
Welfare Journal about a week ago, I believe, about just
talking about how consumption is being driven increasingly by the
high end, and so you know, obviously it's affected by
what's going on with asset prices. But what I know
about asset prices is that you know, stocks are not
making new highs. They haven't been number two. You know
a lot of these sort of alternative assets like crypto
(05:27):
have come under pressure. And more importantly for everyone else,
home prices are moderating because inventories are jumping. So you know,
to the extent that the wealth effect was an important
driver of consumer spending, that's looking a little bit shaky
now as well, Neil.
Speaker 2 (05:44):
Thank you so much, Neil. Data Adren Mac just brilliant
there as we looked at PC and as Paul Sweeney
you mentioned real consumer spending, real personal spending with a shock,
a little bit negative maybe new GDP markdowns. So we'll
get to the bond market in a moment. Here with
Ian Linga our economic indicators, what we do each and
every day, but particularly on these important key days. It's
(06:06):
brought to you by IBKR. Will the year over year
change in the US business inflation us PPI? Will it
exceed three percent in February of twenty twenty five At
IBKR Forecast Trader, the yes was recently at thirty nine percent.
What's your take? Trade your prediction at ibkr dot com
(06:26):
slash Forecast. We welcome all of you on YouTube nationwide again,
go to YouTube Bloomberg Podcasts. Subscribe there, growing each and everyday,
seven days a week, grows on a week as well.
Joining us now with BEMO Capital Markets, Ian lingas Ian,
I'm looking at lower yields. Neil Dudd has given me
(06:47):
lower GDP. Do we finally have in place the vaunted
Lincoln vector where we get shockingly lower trends in yield?
Speaker 5 (06:59):
Well, I do think that we're overdue for a continued
drift lower in rates. I wouldn't be very surprised to
see the current move get ten year yields a lot
closer to four percent.
Speaker 2 (07:12):
So that gets your.
Speaker 4 (07:14):
That gets your attention. So how do you think the
Fed ian is going to look at some of this
data today as they try to get a gauge on
their balance between the labor market and prices.
Speaker 5 (07:25):
Well, I think the core PCE was in line with expectations.
I think that to a large extent, the inflation profile
is known. What's unknown is what's going on in Washington.
How does that lead through to sentiment in the employment market?
And that jobless claims figures from yesterday we're a bit troubling.
We're at two forty two. It's the highest since early December.
Speaker 4 (07:46):
So again, that kind of suggests that it feels like
the federal reserves, just like the rest of us, they're
just kind of looking down to Washington, DC, trying to say,
on top of all the newsflow coming out here, how
long can they sit on the sidelines, do you think, Ian?
Speaker 5 (08:03):
Well, I think that the Fed can avoid cutting rates
again at least through the first two quarters. I think
it's very reasonable to assume that they skip the next
few meetings. The first rate cut maybe comes in September,
but there's a lot of uncertainty between now and then.
The only way that things are going to shift dramatically
is if we see a for the correction the equity
(08:26):
market that titans financial conditions, or an increase in the
unemployment rate, both of which are possible.
Speaker 2 (08:31):
We have to do an audible here. We're going to
come back to interest rates of the ling and Ian.
Canada just reported a whole series of economic datas and
I'm sorry it's positive including I think I see here
third quarter GDP revised from a gloomy one percent up
to two point two percent. Is as well. You've got
(08:52):
the Bank of Montreal combine working for you. How do
you filter in the response of Ontario, Quebec, Alberta. How
do you when you see their response to propose tariffs
from sixteen hundred Pennsylvania Avenue, What does that do to America?
(09:12):
What does that do to our GDP? And then on
to your four percent four point zero percent ten year yield?
Speaker 5 (09:21):
Well, we do know that the Canadian economy is a
lot more rate sensitive, and the Bank of Canada has
been quite a bit more aggressive on the ray cutting side.
So seeing the Canadian economy respond positively, isn't that surprising?
What I worry about, and I think that most Canadian
banks do, is what happens with this looming twenty five
(09:41):
percent on the fourth of March. Does that really derail
growth in Canada? The short answer would be it probably
takes a We probably see a material hit which should
translate through to lower rates, and the US probably gets
a bit of downdraft as well. So I think that
there's a lot of cross currents brewing in favor of
(10:04):
lower yields in the near term.
Speaker 2 (10:06):
So what does Bank of Montreal say about Doug Ford
of Ontario and what he's going to do in windsor
Canada to put x tens of thousands of Americans out
of work? How does Bank of Montreal see that sequence?
If we get it.
Speaker 5 (10:22):
Well, I think that the short answer is we're all
in the position where there are a lot of political uncertainties,
and the back and forth between leaders, whether it's coming
from Trump, whether it's coming out of China, whether it's
coming from Canada or Mexico, will continue to fuel this uncertainty.
Speaker 4 (10:42):
So how do you think this, I guess. Coming back
to the US here we had some the real personal
spending came in materially weaker than expected.
Speaker 2 (10:50):
There.
Speaker 4 (10:51):
How does the FED look at that kind of data.
Speaker 5 (10:55):
Well, I think the first thing that FED would say
is the consumer remains on str footing. Take a look
at the longer term trends and there's no real reason
to start worrying about the consumer. Yet it's one data point.
I'm looking at that and I'm saying, Okay, this is
not going in the right direction. If Q one ends
up ad with a one percent annualized growth rate, that
(11:19):
will matter to the FED because that is the type
of economic slowing in an environment where we might see
higher inflation in the medium term or near to medium term,
and that's a recipe for stagflation, and that's got to
be a concern for the fact.
Speaker 2 (11:32):
And your commute across the nation. Good morning to those
of you in Canada waking ump as well from the
Maritimes out to British Columbia, we say, good morning. It's
Bloomberg surveillance. With all of our digital efforts on radio,
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How well that's doing for us? Good morning on YouTube.
Subscribe to Bloomberg Podcast. Humbled by the audience today, Thank
(11:55):
you so much for tuning in, Ian Linn with US
Now Capital Markets.
Speaker 4 (12:01):
Ian, we're looking at a ten year US treasury written
around four and a quarter percent right here, and I
guess you could say it's still kind of within a
range we've seen for a while here. But where do
you think we end up the year on the US
ten year treasury?
Speaker 5 (12:16):
Well, when the FED is on hold, like we expect
them to be for the next couple of quarters, that
tends to translate into a range of about one hundred
and ten basis points for tins, and so I think
that by the end of this year we'll be back
towards the bottom of that range, which puts US at
four percent ten year yields. I think the bigger drama
is going to play out in a two year sector,
(12:37):
and we see two year yields at three point fifty
by the end of the year.
Speaker 2 (12:40):
I mean, this is where Michael Purvis was a tall back.
And I think he's scheduled next week. Okay, he's fly
fishing somewhere. Good for him right now. But you know,
to the point the short term paper, the Sweeney yield,
I mean, did he just say three fifty? Did? Is
that what I heard? Lah?
Speaker 3 (12:54):
Four?
Speaker 2 (12:55):
Four points? The two year are yeah? Points are right
now yep. Equity markets churning here up eighteen right now.
The VIX comes in a little bit of better tape
twenty point eight zero on the VIX.
Speaker 4 (13:07):
Palla and a lot of folks out there, both academics
and practitioners say, this Federal Reserve historically is used kind
of not bad data, but certainly historically dated data, backward
looking data, and if you look at the real time stuff,
you could make the call that inflation's already whipped, and
you know, maybe they should be maybe even cutting rates here.
(13:29):
How do you think about that.
Speaker 5 (13:32):
I'm very open to the idea that it's difficult for
monetary policy makers to use hard data because there is
the lag in data collection, there's the lag in reporting. However,
I don't think that the idea that if we look
at the real time data, for example, oil prices for
some of the more obvious markets, that the FED should
(13:53):
be basing their monetary policy decisions.
Speaker 2 (13:56):
Off of that.
Speaker 5 (13:57):
Instead, it is those forward looking indicators, look at break evens,
look at the survey based measures, and that's what the
FED is worried about. And I think that that's why
the Fed's going to be reluctant to start cutting again.
Speaker 2 (14:09):
So on a yield basis, if we get a lined
four point zero, just you know, you're sitting around and
having a little bats. I mean, Ian, just cut to
the chase. What does it mean for the housing market?
Is it like boom recovery or is the ambiguity that
wages are slow as Neil Datta talked about, where we
don't get a housing recovery.
Speaker 5 (14:31):
I think that the housing market is going to struggle.
Part of the reason is that the mortgage rate to
treasury spread is still relatively wide for a variety of reasons.
And as long as mortgages are high, then translating this
through to a stronger housing market is going to be difficult,
especially if we see an increase in the unemployment market
(14:53):
or the unemployment rate. That's where I start to get
really worried about housing.
Speaker 2 (14:56):
Great summary, Ian Lannon, thank you so much. With female
capital market's working in fixed income there, we're going to
come back to economics. Francis Donald with us here really
off the shock as Paul mentioned of consumption of personal spending.
Speaker 4 (15:10):
My attention there everybody writing.
Speaker 2 (15:12):
This weekend, Paul I wonted do we start to see
sub two percent statistics? Yeah, there's a lot going on here, folks.
It's always important to talk to Francis Donald with RBC,
the Royal Bank of Canada on inflation and growth. But
based on conversation one, two three of this hour and
following on to McKeon the Fed, Francis Donald, all of
(15:36):
a sudden, maybe the conversation of the day. Are you
going to write for Monday, Francis Donald of sub two
percent real GDP.
Speaker 6 (15:47):
I don't think we're there yet, Tom, So our forecast
for twenty twenty five was two percent, and that's a
bit of an annoying forecast because two percent is sort
of the break even point for a lot of equity models.
So a lot of are hoping you're going to go
sub two percent or above two percent, But one point
nine isn't going to make or break the US economy.
And you know what, Tom, I know there's a lot
(16:08):
of January data that just landed, but the path of
the US economy, there are so many potential outcomes based
off of the sequence and size of Washington policy that
even if you see downgrades from two percent to one
point eight, that's probably not changing your outlook on what's ahead.
It's just marginally changing your starting place. So I am
(16:31):
more focused on headlines related to tariffs today, a little
bit of the upside surprises we've been seeing in Europe
and Canada. Maybe changing the starting place for the two.
Wouldn't get too hung up on a GDP forecast, said
from an economy.
Speaker 2 (16:44):
Rist, I listened to ed Yard Danny, who's been, of
course talking of the roaring twenties here, and he was
heated that yes, there's a lot of noise now and
a lot of worry in that we're pulled back four
percent off this grateful market. Francis Donald, what's your vision
for the end of the year. Do we once again
get a growth recovery as we have the last two years?
Speaker 6 (17:09):
Well, Tom, were big believer that there's two economies at
play in the United States. There's the wealthy who are
benefiting from non income gains that is stock markets, house prices,
their net savers, or they're doing great with those high
interest rates. That part of the economy is incredibly resilient
and that part of the economy is absolutely experiencing the
(17:29):
roaring twenties and are likely to continue to do so
absent some sort of wealth shock. And then there's an
entire segment of America, in fact, the other ninety percent,
that are struggling under the weight of high interest rates,
and you're going to see that start to creep into
some of this data. They're still responsible for fifty percent
of the economy. This is so critical to twenty twenty
(17:50):
five because it's muddying our ability to read so much
of the soft data versus the hard data. High income
Americans are going to lift aggregate data probably through to
your end unless they see a wealth shock, of course,
and other pockets of the economy are going to look
very much like they're in recession. So we are looking
at things like consumer credit data. We've actually seeing credit
(18:11):
card usage as a share of retail sales popping higher.
That's higher rates coming into play. And if we don't
get rate relief big segments of the United States, then
big parts of the United States will see absolutely sub
two percent growth. So for markets, the aggregate matters. For
corporations who are thinking about their operating environment. When we
talk to our clients. We're saying to them, who is
(18:31):
your client group? Because I can't give you one headline
number in the United States anymore to explain the entire
path of the US economy. We just got to get deeper.
Speaker 2 (18:39):
So we got to get Francis Donald on twice. Yep,
we can have it on now about the booming economy,
and you and Alice can have around at eleven am
about the gloom exact. That's the way we roll.
Speaker 4 (18:50):
So Francis, can we still kind of refer to the
US economy as you know one of exceptionalism. Is that
still a storyline.
Speaker 6 (19:00):
And you're still going to see US resilience in play,
probably for several months at least, based on the path
that we're seeing now. No, is that exceptionalism as high
as maybe those who had expected it six months ago. No,
there are some downside the prizes. One of them is
that the Trump administration, a lot of the enthusiasm economically
was that we'd see those corporate tax cuts in that deregulation.
(19:23):
But I remember a few months ago talking to the
two of you in New York that it's going to
matter what the sequence of policies are and we're not
getting a sequence that's really market friendly right now. We're
hearing about tariffs and maybe fiscal pullback before we get
some of that juicy reflationary type of content. So this
is going to be really important heading into twenty twenty five.
Speaker 2 (19:44):
You got an entire combine. I remember the day Royal
Bank Canada took out Minnesota, Piper Jeffrey. I believe it was.
And you know you've done such a great job with
a cross border view at RBC. Francis Donald, what is
your summation of the power of Canada with a tariff response?
(20:05):
Dare I say tariff retaliation to a quoted twenty five
percent statistic? Can Canada get surgical about that to put
Americans out of a job? To shift the president of
the United States.
Speaker 6 (20:24):
Well, just a reminder, I'll give you a list, Tom,
Canada provides sixty percent of oil imports to the United States,
ninety percent of electricity imports, ninety nine percent of natural gas,
eighty five percent of potash, ninety eight percent of canola,
thirty four percent of your meat, and let's not forget
critical minerals, which is nineteen percent of US imports, twenty
(20:45):
seven percent of your uranium imports come from Canada. Canada
helps to heat the United States, it helps to feed
the United States, and this is not twenty eighteen anymore.
The US is struggling under an electrical grid and have
substantial energy needs that Canada can help to rectify. So
I think the focus should be on how much can
(21:06):
Canada support US exceptionalism going forward, and what is the
upside of actual increased collaboration between the two countries. That's
the story that I think will resonate because President Trump
has huge ambition for what the US economy can be common.
There is a lot of upside for the US as well.
Canada upside equals US upside.
Speaker 4 (21:25):
We spent a lot of.
Speaker 6 (21:26):
Time thinking that Canada benefits from the United States. The
reverse is also true, and we got to push that narrative,
not just for Canadians but for Americans as well.
Speaker 4 (21:34):
She running for office, awesomes. That was wonderful, proud Canadian
right there. So he Francis, I think I first became
sensitive to this K shaped economy and what it really
means and how pronounced it is maybe in the twenty
sixteen election cycle, and now here we are, you know, gosh,
almost ten years later, it still seems like it's still
(21:56):
a thing. Is this a permanent part of the US
economy going forward?
Speaker 7 (21:59):
Do you think?
Speaker 2 (22:01):
Oh?
Speaker 3 (22:01):
Yes?
Speaker 6 (22:01):
And actually in twenty sixteen and through to twenty twenty,
we would talk about the K shape and the concept
that there was actually like halves and have not so
and that was a structural situation. The problem that we're
encountering now, especially in the past two years, is that
in the past, the haves and the have nots actually
moved more or less the same throughout. So good times
were good times for everybody. Bad times were the reverse.
(22:23):
The reason there's so much focused from economists like myself
and from RBC on the K shape is that not
only do we have this huge inequality, but their economic
situations are not moving together. They're moving separately. So in
the past you could look at one group and know
more or less how the other ones were moving. That's
just not the case anymore. It's broken our models, and
it changes how we have to talk to clients about
(22:45):
who their end customers are.
Speaker 2 (22:47):
Francis got to leave it there, Thank you so much.
Francis Donald with RBC.
Speaker 1 (22:57):
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Speaker 2 (23:09):
Why don't you drag in here? Jordan Rochester? Who's you know?
I mean? He's rewriting his rewrite from exactly usearch.
Speaker 4 (23:16):
You're at zoo, absolutely, Tom Jordan Rochester fit macro strategy
for our friends over there at Zuo. Jordan, what's your
feeling here about? You know, this flooding the zone approach
from this White House and maybe some of the policy
uncertainty that creates in the marketplace When you talk to
your clients, how do you kind of suggest they deal
(23:39):
with that?
Speaker 8 (23:40):
Well, from a politics perspective, it's getting things done, which
is pretty painful for us in markets keeping a track
of it all. Flooding the zone means you split and
divide your opposition. They're not sure which agenda to oppose
in that day's media round. But for us in markets,
each one has a different investable theme. You've got tariffs
hanging over Europe, Mexico, Canada, China like a Damocles sword,
(24:03):
with the risk of near term dollar appreciation. But to
be honest, this market is trying to call the bluff
of this president and doubting whether these tarots will go
ahead with the numbers he's put forward or at the
pace that they've been announced. So this weekend could be
a big one. The market still has quite a few
people out there thinking it won't happen in the way
that he said, such as the twenty five percent. Then
(24:24):
you've got the DOGE labor cuts, and that's going to
really weigh on NFP prints in the months ahead. If
you were to listen to the pr campaign from Elon Musk,
the actual numbers so far are quite small, a lot
smaller than what he would be suggesting. But we are
aware that in the next couple of months, if things
accelerate from Doge, it could be tricky for the Fed.
(24:45):
This market will still probably try to price him rate cuts,
not rate hikes, even though we think the Fed's on
hold for the rest of the year. And then you've
got a deregulation agenda. Surely this is an administration that's
good for business, but the tariff policy is kind of
conflicting with so, and ask your question, he's studying the
zone many different policies. Each one has a very big
(25:05):
impact on markets. Some of them conflict with each other,
and it kind of leaves us all scratching our heads.
Speaker 4 (25:10):
So I guess from the currency perspective, Jordan, do I
just kind of buy the US dollar and just go
sit on the sit in a corner there and wait.
Speaker 8 (25:20):
If it wasn't for tariffs, I'd be telling clients to
sell the dollar, because there's a great sort of make
Europe great again mega not megafeme in Europe. However, the
tariffs are a big deal for everyone's terms of trade
if they are to happen in the numbers that we
expecting them to see. Imagine if Europe gets a ten
percent tariff for example, across the board, reciprocal or not,
(25:43):
that would mean a lot for Euro valuations. So what
we're saving to clients right now is, yes, by the dollar,
we think euro could go down to one or two
even parity if the number of tariffs is higher than
what we expect, and then actually that would be a
great opportunity at some stage to take the other side
is a down in euro and then up in the
second half of this year, because I think the EU
(26:04):
will get their act together and respond to this American
threat by doing reform, more issuance of fiscal issuance, and
we'll see a better investment outlook for Eurozone in the
second quarter, you know.
Speaker 2 (26:15):
Jordan, I I look at the ability to try for
all of our listeners and viewers to get a single
point terminal view. Let's call it December of this year.
Dare I say into twenty twenty six, you have the
luxury of constant Rizzuto in Rochester at Missuo. Do you
(26:36):
guys have a combined view that gets us in the
next year or are all bets off.
Speaker 8 (26:44):
Well, it's hard to predict what the weather will be
tomorrow time. Let them know what's going to happen next year.
But I imagine what's going to probably happen is we
have a lot of the events in politics in the
first half of this year and the second half of
this year more about the implications for the economy. What
do I mean by that? We've got tariffs in the
next one month or two. I think a reconciliation bill
(27:05):
will probably pass through Congress in the second quarter. It
might even be April. Joe Biden got his done in
March twenty twenty one. So it's very possible that all
the politics happens in the first half, the second half
will be about the implication of it, and I think
that we'll see European growth start to outperform us this market.
Tom is trying to bring forward that theme. I just
(27:27):
think we're not there yet. We need the tariffs to
go through first before I can jump on it.
Speaker 4 (27:33):
Pound Sterling here, Jordan, what's the call here?
Speaker 8 (27:37):
I think Sterling lower. We're looking for something like one
twenty two during the stage of the next few months,
and that's on the back of the tariffs. I also
think that there's a domestic weakness story that's creeping up.
Last year, the best strategy I had was to tell
clients to hold back from doing Dubvish calls on the
Bank of England because we had very sticky inflation. The
(28:00):
budget has changed things dramatically. There's been a tax height
for employers and what we've seen is a collapse in
the employment intentions of firms After that tax hike. It
costs everybody across the United Kingdom one point seven percent
more to employ staff per year from April onwards. So
I think what we'll see is in the April numbers
(28:21):
that we get in May quite a substantial weakness in
the labor market feeding through to growth, and then by
the June meeting the banking and cuts. That's something that's
a bit of a non consensus view because everyone thinks
the banking cuts every quarter. I think they accelerate it
when they get to June's data round and that should
push Stirling lower.
Speaker 2 (28:39):
Jordan right here. A final question is you away tariffs?
And I get that. I have great respect for the idea,
wait for the facts. Is there a tradable big figure
move in any of the major currencies right now?
Speaker 8 (28:53):
I think there is, and it's on a Japanese bank,
and I think Japan is the one. There's a structural
change taking place in Japan that's decorrelated it from the
rest of the cycle. Now dolly ed of course follows
US interest rates just like everything else. But if you
look at Japanese rates, structurally higher yields is the story, Tom,
and I think that's a sharp ratio that's going to
(29:15):
be pretty high.
Speaker 2 (29:16):
This is really critical. Then do you suggest that the
reflation theories plural of Japan have succeeded.
Speaker 8 (29:27):
I think they're in their infancy, but they're going to succeed.
If you look at the labor market, we are seeing
some of the largest wage hikes Tom since the nineteen nineties.
You've got part time workers getting six to seven percent.
You've got the overall economy at five You've got full
time salaried workers at three percent.
Speaker 2 (29:45):
These are all.
Speaker 8 (29:45):
Numbers above two. And we've got the upcoming shunt to negotiations.
Tom will get somewhat wind as to what we're going
to get out of those numbers. But I think the
numbers going to be another strong five percent like it
was last year or higher. You might have seen the
Bloomberg story early in the week about steel workers asking
for fourteen percent numbers we've just not heard of before
in Japan. So if the chinto goes well, I think
(30:08):
that we're going to see this wage story become self
fulfilling and Japanese core inflation will be stronger than what
the bank pack expects.
Speaker 2 (30:15):
I would respectfully suggest, folks, I haven't heard that conversation
that we just had with Jordan Rochester good thirty thirty years.
Speaker 4 (30:24):
Yeah, I think you're right.
Speaker 2 (30:24):
I think I think you're right to go like that
was Fabulous, Jordan Rochester and the Zoo.
Speaker 1 (30:28):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay 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.
Speaker 2 (30:45):
There is a wall. There's any number of walls in Washington,
to say the least, there is a CIA Memorial Wall,
of which there are one hundred and forty entries. There
are a one hundred and six named, and there are
thirty four names on the CIA Memorial Wall not named.
(31:07):
Some do others talk. We now speak to one of
the great doers of the American military, Mick mulroy. He
is godfather to four of the kids of those people
on the CIA Memorial Wall. Mick, I'm going to cut
to the chase. We just saw the Chairman of the
Joint Chiefs of Staff shown the door. Can our listeners,
(31:30):
can our viewers know that our military is at work
in an organized, productive manner on this Friday morning.
Speaker 7 (31:40):
So good to be with you all again, I'd say,
of course, the president does get to choose who he's
going to have as his key advisors to include the military.
But I'd also say, and we'll disclosure. I know General
Brown that he was an example of meritocracy at work.
He was exceptional throughout his career. The facts speak for them.
Elves fighter pilot, squadron commander, Wing Commander, Deputy at Central Command,
(32:05):
in charge of all the Air Force in the Indo
Pacific and then of course Chief of Staff for the
Air Force appointed in the first Trump administration, so highly qualified.
If there was issues with DEI, that's a policy issue.
Just so everybody knows, the US military, even the highest
ranking don't do policy. They essentially advise and they carry
(32:26):
out orders by the civilian leadership of the Pentagon, including
you know, obviously the Secretary of Defense at his staff.
So if that was an issue, then then that could
have been addressed without the need, of course to remove
c Q.
Speaker 2 (32:40):
Brown early.
Speaker 7 (32:41):
He had many much time left on his post normally
that is not something that changes.
Speaker 2 (32:46):
How to be quick here because Paul wants to get
in here. MC moulroy as simple as I can. And
the first term we had Kelly, we had McMaster. You
said at the table with General Madis. We don't have
those people now, do we. This is a new approach
to Trump too, isn't it.
Speaker 7 (33:04):
Yes, I mean, certainly, I think the three you mentioned
are three of the best leaders of our generation, at
least from my perspective, especially Secretary of Matis. But this
is obviously a different cabinet. It seems to be. You know,
you can pick on experience and accomplishment, you can pick
on loyalty to the president and political ideology, and I
(33:26):
think I think the latter is really came through in
this And that's again, a president gets to choose that,
but every president gets to choose that. So it's kind
of as an argument that you can make. But essentially
so did President by right. So I would say he
picked these individuals primarily for their loyalty to him and
their political ideology, and that's his choice. But that is
(33:48):
a difference, I think than the first cabinet, which was
picked primarily for accomplishment and a long level of experience
in the job that they were going into.
Speaker 4 (33:58):
Nick, President Zelensky Ukraine, coming to the White House today,
can you give us the latest sense of how you
think this situation in Ukraine could play out in the
coming days, weeks and maybe even months.
Speaker 7 (34:12):
Sure, this was a big week. We had the French
president and the uk Prime minister, and now we have
President Zelenski coming today and maybe I think likely or
he wouldn't be here signing this rare earth mineral agreement.
So starting with that, it's essentially ended up being that
American companies will get access whatever that means to fifty
(34:34):
percent of the minerals in Ukraine, which is substantial. I mean,
I've seen reports from reputable groups that it's trillions. Half
of it or more than half of it's under the
part of Ukraine that's currently occupied by Russia. So from
the Ukrainian perspective, if the US wants access to that,
they need to help Ukraine gain their territory back. What's
(34:54):
not in here and what Ukraine really wanted, of course,
were security guarantees. That is the biggest thing they need,
and ultimately there probably won't be a ceasefire agreement unless
there's some security guarantees because Russia has violated, specifically when
it comes to Ukraine, the agreement not to attack them
multiple times, starting in nineteen ninety four when they give
up clear nuclear weapons. In twenty fourteen after they already
(35:19):
you know, annexed CRIMEA. They agreed not to do it again,
they did in twenty twenty two, So there should be
zero trust on whether they will carry this out unless
there's a security guarantee by NATO or European partners or
the United States are all the above. If there's not,
then it's hard to see how Ukraine would accept a
(35:39):
ceasefire that would simply allow Russia to prepare to then
attack them again. But we all should hope that's the case.
We all should hope that, of course, President Trump and
his administration are successful in getting us to a ceasefire
that's lasting to stop this and this war that Russia started.
Speaker 4 (35:56):
Mick, is there any scenario that you can think of
where President Putin and President Trump could come up with
some type of peace record that does not include Ukraine
at the negotiating table.
Speaker 7 (36:09):
No, because ultimately Ukraine has to decide and not to fight.
I mean, they would be hard pressed to continue to fight,
particularly by June when all of the ammunition we've already
provided to start running out without the US support. But
they can, especially if Europe really steps up, and they've
already proven that they beat the odds, right, Most analysts,
(36:29):
like myself we predicting three weeks and it would have
been over an hour over three years, So don't count
them out. But the US needs to continue to support.
It's not just altruistic, it is in our own interests.
They are depleting the Russian military so substantially that within
the last two years they lost more soldiers than we
lost during the entirety of a war in Iraq. It
(36:50):
is really taxing on them and it's difficult for them
to maintain this, but it will be difficult for Ukraine
to keep up that level without the US full support.
Speaker 2 (37:00):
Nick, what is the signal to our allies of what
we witnessed at the United Nations this week back to
nineteen forty five, we went with Team Russia.
Speaker 7 (37:11):
So certainly scared the Bejesus out of them, quite frankly.
And there's two parts of that, right. So they are
very used to their allies being what it has been,
you know for decades, which is the United States in NATO,
the most significant military alliance in history. Where I can
say that they have fallen short they be in our
European allies. If they have essentially left a lot of
(37:32):
their security over to the United States. They had the
biggest brother on the block, so they were fine with
spending their money on things other than their own national defense.
They've woken up to that they are all increasing their
expenditures on their own national security beyond what the NATO
calls for, which is two percent, some going as three up,
potentially even a five percent. That's a good thing for them,
(37:54):
it's a good thing for NATO, and many presidents, to
include President Trump, have been pushing rightfully for them to
do that. So that's a good thing. But the problem
is they might get to a point where they just
don't trust the United States when it comes to our
allegiance to NATO. I know Secretary Ribo have said that's
not the case, so as national security fighter Waltz, I
believe that's the case. But that has scared them so
(38:17):
much that they are now concerned and potentially even starting
an alternative to NATO.
Speaker 2 (38:22):
Mick, we got to leave it there. We can talk
for hours with the Lobo Institute, McLaury with his service
to the nation, with the Marines, and with the CIA.
Speaker 1 (38:35):
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 watch us
live every weekday on YouTube and always on the Bloomberg terminal.
Speaker 2 (38:50):
You look at the front pages of Lisa Matteo Report,
you're not mentioned in Taylor and Travis, are you?
Speaker 9 (38:55):
No, we're not. Okay, definitely to stay it away from that.
What we are talking about is, of course AI. We
always talk about it, but people are finding new ways
to use it. That includes cheating on job interviews. So
the way they're doing it, they're using these generative AI
tools like coding assistance, teleprompter apps that feed them live
answers when they're doing video interviews. So Business Insider are saying,
(39:19):
Amazon they want to put a stop to it because
they're seeing more of it, so they change their guidelines
and their job applications so you can be disqualified if
you use any of these things. The question is, how
do you know if someone's using it? Yeah, So Amazon
actually put out some guidelines. So for example, those watching
on YouTube, if I'm doing the job interview here, I'm
usually looking and if you ask me a question, I'll
(39:39):
be typing, you know, because you're typing in the question,
you know, so what AI will response. So if you
see someone typing, that's a red flag. And then if
you see someone you know answering your question but they're
kind of like looking like they're reading like this. If
you're on YouTube, that's another red flag. So what they're
doing is they're trying to like cut back on this
because more and more people and it's not just Amazon
is saying it. Other these are saying that people are
(40:00):
doing this, They're cheating on these resumes.
Speaker 4 (40:03):
There's there's a certainly be a story on bloomber guest today.
There's certain keywords that people are facing on. Then you know,
you see it on somebody's resume. You can tell the
resume was created by Yeah.
Speaker 2 (40:15):
I'm getting the buzz that for college applications is definite.
They can tell a heartbeat college. I don't know other
than good luck with that.
Speaker 9 (40:26):
Okay, this was interesting.
Speaker 2 (40:28):
Screaming from the screen. We could tell you this is interesting.
Speaker 9 (40:32):
The erosion that's eating away at those homes in Nantucket.
So it gets like into a deeper look into it.
Some of the pictures are amazing. If you look at
this article, but they say emergency crews. They're scrambling. They
basically use these steel beams. They put them under the homes,
they jack them up, and they roll them back about
a huge you know, a few hundred feet back. But
it's happening more often since twenty twenty three. Houses on
(40:53):
the street is called Cheap Pond Road. They've been condemned, demolish.
Some are moving back and some are They just have
to sell for pennies on the dollar, so they're losing out.
But here's what the residents are saying. And Paul, this
goes to you in the Jersey Shore because Nantucket doesn't
have those jetties and those sand like replenishment projects like
the Jersey Shore. I mean, I remember sitting on the
beach and the Jersey Store and seeing those ships come
in and I was.
Speaker 4 (41:13):
Like, what are they doing right right now as we speak.
Speaker 9 (41:15):
Yeah, and that's what they're doing. But they're saying Nantucket
doesn't have that.
Speaker 2 (41:18):
They're out in the middle of nowhere where the erosion
has been there for years. And I don't pretend to
be an expert on it, but you know, I'm looking
at it right here now on Chester Street in Nantucket.
You know, Lee real Estate has it, and it's a
nice little small bungalow on the street, distant from the water.
It's like you could shoot a movie in front of it.
Are you ready? Three point eight million dollars and it's
(41:42):
I mean it's it's three bedroomish. Yeah, you know.
Speaker 9 (41:47):
Well the problem a lot of these people bought during
the Yeah, their their values going down because they're going
to be falling into the water. Positive three million. Crazy.
Speaker 4 (41:56):
If you're going to buy a home on Nantucket or
kit caud my personal je, you have to also be
able to have a fractional ownership in a plane. If
you can't do that, then don't buy it, because if
you're not flying up there easily, you can't drive. Yeah,
it's a disaster.
Speaker 2 (42:10):
Okay, what else?
Speaker 9 (42:11):
Last one, this big mistake by City Group. It's actually
coming to light now. The Financial Times has it. They
credited client's account with eighty one trillion dollars. It was
meant to send only two hundred.
Speaker 2 (42:23):
And eighty dollars.
Speaker 9 (42:25):
It has been last April never reported because it was
like a near miss, but the Financial Times looked into
it. It said it was missed by a payments employee, missed
by a second official a third banker finally found it.
The payment was reversed several hours later, so that is
good news. No funds left the bank, but it just
shows that you know they're going after that.
Speaker 4 (42:44):
As a former bank teller, it happens. If I had
a three thousand dollars miss at the end of the day,
I could find that in five minutes. If I had
a twenty three dollars eighty seven dollars miss, could never
find it, and they take it out of your paycheck.
Speaker 9 (42:56):
Eighty one trillion, I know the round numbers.
Speaker 2 (42:59):
They can find easy, and they took it out of
the paycheck. My sister went through this exactly. Thank you
the newspapers withou. Lisa Matail greatly appreciate that.
Speaker 1 (43:08):
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
(43:29):
and 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):
Victoria Fernandez, Jordan Rochester, Michael McKee, Francis Donald, and Lincoln.
We go into this inflation reports strong with Neil Dutta
of Renaissance Macro. Neil, you're more cautious now on real GDP,
on the growth of the nation, all the inflation numbers
pretty much on the survey, but I really want to
focus out on real personal spending decline way off survey
(00:51):
in personal income with a nice lift as well. I've
got retail inventories which I don't understand. We're going to
skip that. I got a little bit of an equity lift.
I went right to the ten year real yield came
in a little bit, but it comes right back. Neil Dunta,
am I right that this was a nothing burger?
Speaker 3 (01:09):
I mean, real personal consumption fell quite a bit to
start the quarter. That's that's probably gonna put downward pressure
on tracking estimates of first quarter GDP and will probably
prompt some marketing to market of forecasts among among the consensus.
(01:29):
So you know, I don't right, is it a nothing burger?
I mean, I think the inflation numbers came in in
line with expectations, but real GDP is probably getting worse.
Speaker 2 (01:38):
Not This is critical folks with real spending. I mean,
what we see on the eco screen of the the Bloomberg,
real personal spending came in light personal spending itself came
in like a little bit of a constructive revision. But
you know, Neil, Neil, it's unfair to ask this, but
why it's onfair Friday? I mean, do you go, can
you model out subtwo JDP looking at two quarters of
(02:03):
data to the fourth of July.
Speaker 3 (02:07):
Yes, I think that's possible. I mean, look, most of
the upside surprise in GDP growth last year was in
two areas, consumption and government spending an investment. That's what
drove most of the growth. So if you think those
two areas are going to slow, it doesn't really take much.
At the same time, you lay around the fact that
residential construction is likely to get worse, not better. And
(02:30):
you know, I mean export activity was a driver for
growth last year. I mean, if this trade stuff keeps up,
I mean there may be some risk to exports as well.
So I don't think it's that much of a stretch.
I mean you're talking about a zero point five percent
monthly contraction and real consumer spending. I mean these tracking
estimates might be at one percent for the quarter after today.
Speaker 4 (02:50):
Yeah, that's kind of where I wanted to go, Neil,
because I am to this amateur economist here. That's the
number that kind of jumps out. I mean, I'll just
highlight it for the audience, real personal spending. The consensus
was for decline of zero point one percent, came in
a decline of zero point five percent, So missed there
any Compare it to last period where it was revised
higher to positive zero point five percent, So a big
(03:11):
delta there. I do know that, you know, you economists
tell me that the consumers seventy percent of the economy.
So that really does get your attention? Does that? Is
that a number that moves around a lot?
Speaker 3 (03:24):
Real? Well, I mean consumer spending tends to be you know,
more more stable. I mean a lot of acyclical areas
of consumption, right, I mean, so that you know, people
have to go out and kind of spend, but ultimately,
you know, generally speaking, consumption follows u income growth, and
(03:45):
you know, I mean what what what you can basically
say is that you know, in January, I mean there
was a there was an increase in in precautionary saving maybe,
I mean that that's basically what it's income. But again
that goes to totally against what people are sort of
worried about right now, which is inflation expectations. Right I mean,
(04:06):
that's allegedly the reason why the FED is holding off
everyone's planning to you mish. Now, guys, think about what
inflation expectations should mean. It should mean number one, people
are going to bid up their wages because we know
that wage growth is set with short run inflation expectations
in mind. I mean, I don't know, good luck to
any worker that's going to try that right now. I
mean you're in for a root awaken. Importantly, it's you
(04:28):
try to spend more to beat the higher prices later,
there's no evidence that that's happening. You're seeing precautionary saving,
not precautionary spending. So this notion that inflation expectations arising,
and this is why the Fed needs to hold off.
Speaker 2 (04:42):
Is all right, Neil, I want to get one more
question in here. I think it's so important, Ian Lingoln's
being patient to wait for Neil Dudda. Is there a
wealth effect of the fancy people in the personal income,
personal spending? Do you see the stock market? Do you
see the way Paul Sweeney made money on Nvidia? Is
that in those statistics this morning?
Speaker 3 (05:04):
Well, I mean there was a great article from the
Welfare Journal about a week ago, I believe, about just
talking about how consumption is being driven increasingly by the
high end, and so you know, obviously it's affected by
what's going on with asset prices. But what I know
about asset prices is that you know, stocks are not
making new highs. They haven't been number two. You know
a lot of these sort of alternative assets like crypto
(05:27):
have come under pressure. And more importantly for everyone else,
home prices are moderating because inventories are jumping. So you know,
to the extent that the wealth effect was an important
driver of consumer spending, that's looking a little bit shaky
now as well, Neil.
Speaker 2 (05:44):
Thank you so much, Neil. Data Adren Mac just brilliant
there as we looked at PC and as Paul Sweeney
you mentioned real consumer spending, real personal spending with a shock,
a little bit negative maybe new GDP markdowns. So we'll
get to the bond market in a moment. Here with
Ian Linga our economic indicators, what we do each and
every day, but particularly on these important key days. It's
(06:06):
brought to you by IBKR. Will the year over year
change in the US business inflation us PPI? Will it
exceed three percent in February of twenty twenty five At
IBKR Forecast Trader, the yes was recently at thirty nine percent.
What's your take? Trade your prediction at ibkr dot com
(06:26):
slash Forecast. We welcome all of you on YouTube nationwide again,
go to YouTube Bloomberg Podcasts. Subscribe there, growing each and everyday,
seven days a week, grows on a week as well.
Joining us now with BEMO Capital Markets, Ian lingas Ian,
I'm looking at lower yields. Neil Dudd has given me
(06:47):
lower GDP. Do we finally have in place the vaunted
Lincoln vector where we get shockingly lower trends in yield?
Speaker 5 (06:59):
Well, I do think that we're overdue for a continued
drift lower in rates. I wouldn't be very surprised to
see the current move get ten year yields a lot
closer to four percent.
Speaker 2 (07:12):
So that gets your.
Speaker 4 (07:14):
That gets your attention. So how do you think the
Fed ian is going to look at some of this
data today as they try to get a gauge on
their balance between the labor market and prices.
Speaker 5 (07:25):
Well, I think the core PCE was in line with expectations.
I think that to a large extent, the inflation profile
is known. What's unknown is what's going on in Washington.
How does that lead through to sentiment in the employment market?
And that jobless claims figures from yesterday we're a bit troubling.
We're at two forty two. It's the highest since early December.
Speaker 4 (07:46):
So again, that kind of suggests that it feels like
the federal reserves, just like the rest of us, they're
just kind of looking down to Washington, DC, trying to say,
on top of all the newsflow coming out here, how
long can they sit on the sidelines, do you think, Ian?
Speaker 5 (08:03):
Well, I think that the Fed can avoid cutting rates
again at least through the first two quarters. I think
it's very reasonable to assume that they skip the next
few meetings. The first rate cut maybe comes in September,
but there's a lot of uncertainty between now and then.
The only way that things are going to shift dramatically
is if we see a for the correction the equity
(08:26):
market that titans financial conditions, or an increase in the
unemployment rate, both of which are possible.
Speaker 2 (08:31):
We have to do an audible here. We're going to
come back to interest rates of the ling and Ian.
Canada just reported a whole series of economic datas and
I'm sorry it's positive including I think I see here
third quarter GDP revised from a gloomy one percent up
to two point two percent. Is as well. You've got
(08:52):
the Bank of Montreal combine working for you. How do
you filter in the response of Ontario, Quebec, Alberta. How
do you when you see their response to propose tariffs
from sixteen hundred Pennsylvania Avenue, What does that do to America?
(09:12):
What does that do to our GDP? And then on
to your four percent four point zero percent ten year yield?
Speaker 5 (09:21):
Well, we do know that the Canadian economy is a
lot more rate sensitive, and the Bank of Canada has
been quite a bit more aggressive on the ray cutting side.
So seeing the Canadian economy respond positively, isn't that surprising?
What I worry about, and I think that most Canadian
banks do, is what happens with this looming twenty five
(09:41):
percent on the fourth of March. Does that really derail
growth in Canada? The short answer would be it probably
takes a We probably see a material hit which should
translate through to lower rates, and the US probably gets
a bit of downdraft as well. So I think that
there's a lot of cross currents brewing in favor of
(10:04):
lower yields in the near term.
Speaker 2 (10:06):
So what does Bank of Montreal say about Doug Ford
of Ontario and what he's going to do in windsor
Canada to put x tens of thousands of Americans out
of work? How does Bank of Montreal see that sequence?
If we get it.
Speaker 5 (10:22):
Well, I think that the short answer is we're all
in the position where there are a lot of political uncertainties,
and the back and forth between leaders, whether it's coming
from Trump, whether it's coming out of China, whether it's
coming from Canada or Mexico, will continue to fuel this uncertainty.
Speaker 4 (10:42):
So how do you think this, I guess. Coming back
to the US here we had some the real personal
spending came in materially weaker than expected.
Speaker 2 (10:50):
There.
Speaker 4 (10:51):
How does the FED look at that kind of data.
Speaker 5 (10:55):
Well, I think the first thing that FED would say
is the consumer remains on str footing. Take a look
at the longer term trends and there's no real reason
to start worrying about the consumer. Yet it's one data point.
I'm looking at that and I'm saying, Okay, this is
not going in the right direction. If Q one ends
up ad with a one percent annualized growth rate, that
(11:19):
will matter to the FED because that is the type
of economic slowing in an environment where we might see
higher inflation in the medium term or near to medium term,
and that's a recipe for stagflation, and that's got to
be a concern for the fact.
Speaker 2 (11:32):
And your commute across the nation. Good morning to those
of you in Canada waking ump as well from the
Maritimes out to British Columbia, we say, good morning. It's
Bloomberg surveillance. With all of our digital efforts on radio,
including Apple CarPlay, Android audio, and the shock is serious.
How well that's doing for us? Good morning on YouTube.
Subscribe to Bloomberg Podcast. Humbled by the audience today, Thank
(11:55):
you so much for tuning in, Ian Linn with US
Now Capital Markets.
Speaker 4 (12:01):
Ian, we're looking at a ten year US treasury written
around four and a quarter percent right here, and I
guess you could say it's still kind of within a
range we've seen for a while here. But where do
you think we end up the year on the US
ten year treasury?
Speaker 5 (12:16):
Well, when the FED is on hold, like we expect
them to be for the next couple of quarters, that
tends to translate into a range of about one hundred
and ten basis points for tins, and so I think
that by the end of this year we'll be back
towards the bottom of that range, which puts US at
four percent ten year yields. I think the bigger drama
is going to play out in a two year sector,
(12:37):
and we see two year yields at three point fifty
by the end of the year.
Speaker 2 (12:40):
I mean, this is where Michael Purvis was a tall back.
And I think he's scheduled next week. Okay, he's fly
fishing somewhere. Good for him right now. But you know,
to the point the short term paper, the Sweeney yield,
I mean, did he just say three fifty? Did? Is
that what I heard? Lah?
Speaker 3 (12:54):
Four?
Speaker 2 (12:55):
Four points? The two year are yeah? Points are right
now yep. Equity markets churning here up eighteen right now.
The VIX comes in a little bit of better tape
twenty point eight zero on the VIX.
Speaker 4 (13:07):
Palla and a lot of folks out there, both academics
and practitioners say, this Federal Reserve historically is used kind
of not bad data, but certainly historically dated data, backward
looking data, and if you look at the real time stuff,
you could make the call that inflation's already whipped, and
you know, maybe they should be maybe even cutting rates here.
(13:29):
How do you think about that.
Speaker 5 (13:32):
I'm very open to the idea that it's difficult for
monetary policy makers to use hard data because there is
the lag in data collection, there's the lag in reporting. However,
I don't think that the idea that if we look
at the real time data, for example, oil prices for
some of the more obvious markets, that the FED should
(13:53):
be basing their monetary policy decisions.
Speaker 2 (13:56):
Off of that.
Speaker 5 (13:57):
Instead, it is those forward looking indicators, look at break evens,
look at the survey based measures, and that's what the
FED is worried about. And I think that that's why
the Fed's going to be reluctant to start cutting again.
Speaker 2 (14:09):
So on a yield basis, if we get a lined
four point zero, just you know, you're sitting around and
having a little bats. I mean, Ian, just cut to
the chase. What does it mean for the housing market?
Is it like boom recovery or is the ambiguity that
wages are slow as Neil Datta talked about, where we
don't get a housing recovery.
Speaker 5 (14:31):
I think that the housing market is going to struggle.
Part of the reason is that the mortgage rate to
treasury spread is still relatively wide for a variety of reasons.
And as long as mortgages are high, then translating this
through to a stronger housing market is going to be difficult,
especially if we see an increase in the unemployment market
(14:53):
or the unemployment rate. That's where I start to get
really worried about housing.
Speaker 2 (14:56):
Great summary, Ian Lannon, thank you so much. With female
capital market's working in fixed income there, we're going to
come back to economics. Francis Donald with us here really
off the shock as Paul mentioned of consumption of personal spending.
Speaker 4 (15:10):
My attention there everybody writing.
Speaker 2 (15:12):
This weekend, Paul I wonted do we start to see
sub two percent statistics? Yeah, there's a lot going on here, folks.
It's always important to talk to Francis Donald with RBC,
the Royal Bank of Canada on inflation and growth. But
based on conversation one, two three of this hour and
following on to McKeon the Fed, Francis Donald, all of
(15:36):
a sudden, maybe the conversation of the day. Are you
going to write for Monday, Francis Donald of sub two
percent real GDP.
Speaker 6 (15:47):
I don't think we're there yet, Tom, So our forecast
for twenty twenty five was two percent, and that's a
bit of an annoying forecast because two percent is sort
of the break even point for a lot of equity models.
So a lot of are hoping you're going to go
sub two percent or above two percent, But one point
nine isn't going to make or break the US economy.
And you know what, Tom, I know there's a lot
(16:08):
of January data that just landed, but the path of
the US economy, there are so many potential outcomes based
off of the sequence and size of Washington policy that
even if you see downgrades from two percent to one
point eight, that's probably not changing your outlook on what's ahead.
It's just marginally changing your starting place. So I am
(16:31):
more focused on headlines related to tariffs today, a little
bit of the upside surprises we've been seeing in Europe
and Canada. Maybe changing the starting place for the two.
Wouldn't get too hung up on a GDP forecast, said
from an economy.
Speaker 2 (16:44):
Rist, I listened to ed Yard Danny, who's been, of
course talking of the roaring twenties here, and he was
heated that yes, there's a lot of noise now and
a lot of worry in that we're pulled back four
percent off this grateful market. Francis Donald, what's your vision
for the end of the year. Do we once again
get a growth recovery as we have the last two years?
Speaker 6 (17:09):
Well, Tom, were big believer that there's two economies at
play in the United States. There's the wealthy who are
benefiting from non income gains that is stock markets, house prices,
their net savers, or they're doing great with those high
interest rates. That part of the economy is incredibly resilient
and that part of the economy is absolutely experiencing the
(17:29):
roaring twenties and are likely to continue to do so
absent some sort of wealth shock. And then there's an
entire segment of America, in fact, the other ninety percent,
that are struggling under the weight of high interest rates,
and you're going to see that start to creep into
some of this data. They're still responsible for fifty percent
of the economy. This is so critical to twenty twenty
(17:50):
five because it's muddying our ability to read so much
of the soft data versus the hard data. High income
Americans are going to lift aggregate data probably through to
your end unless they see a wealth shock, of course,
and other pockets of the economy are going to look
very much like they're in recession. So we are looking
at things like consumer credit data. We've actually seeing credit
(18:11):
card usage as a share of retail sales popping higher.
That's higher rates coming into play. And if we don't
get rate relief big segments of the United States, then
big parts of the United States will see absolutely sub
two percent growth. So for markets, the aggregate matters. For
corporations who are thinking about their operating environment. When we
talk to our clients. We're saying to them, who is
(18:31):
your client group? Because I can't give you one headline
number in the United States anymore to explain the entire
path of the US economy. We just got to get deeper.
Speaker 2 (18:39):
So we got to get Francis Donald on twice. Yep,
we can have it on now about the booming economy,
and you and Alice can have around at eleven am
about the gloom exact. That's the way we roll.
Speaker 4 (18:50):
So Francis, can we still kind of refer to the
US economy as you know one of exceptionalism. Is that
still a storyline.
Speaker 6 (19:00):
And you're still going to see US resilience in play,
probably for several months at least, based on the path
that we're seeing now. No, is that exceptionalism as high
as maybe those who had expected it six months ago. No,
there are some downside the prizes. One of them is
that the Trump administration, a lot of the enthusiasm economically
was that we'd see those corporate tax cuts in that deregulation.
(19:23):
But I remember a few months ago talking to the
two of you in New York that it's going to
matter what the sequence of policies are and we're not
getting a sequence that's really market friendly right now. We're
hearing about tariffs and maybe fiscal pullback before we get
some of that juicy reflationary type of content. So this
is going to be really important heading into twenty twenty five.
Speaker 2 (19:44):
You got an entire combine. I remember the day Royal
Bank Canada took out Minnesota, Piper Jeffrey. I believe it was.
And you know you've done such a great job with
a cross border view at RBC. Francis Donald, what is
your summation of the power of Canada with a tariff response?
(20:05):
Dare I say tariff retaliation to a quoted twenty five
percent statistic? Can Canada get surgical about that to put
Americans out of a job? To shift the president of
the United States.
Speaker 6 (20:24):
Well, just a reminder, I'll give you a list, Tom,
Canada provides sixty percent of oil imports to the United States,
ninety percent of electricity imports, ninety nine percent of natural gas,
eighty five percent of potash, ninety eight percent of canola,
thirty four percent of your meat, and let's not forget
critical minerals, which is nineteen percent of US imports, twenty
(20:45):
seven percent of your uranium imports come from Canada. Canada
helps to heat the United States, it helps to feed
the United States, and this is not twenty eighteen anymore.
The US is struggling under an electrical grid and have
substantial energy needs that Canada can help to rectify. So
I think the focus should be on how much can
(21:06):
Canada support US exceptionalism going forward, and what is the
upside of actual increased collaboration between the two countries. That's
the story that I think will resonate because President Trump
has huge ambition for what the US economy can be common.
There is a lot of upside for the US as well.
Canada upside equals US upside.
Speaker 4 (21:25):
We spent a lot of.
Speaker 6 (21:26):
Time thinking that Canada benefits from the United States. The
reverse is also true, and we got to push that narrative,
not just for Canadians but for Americans as well.
Speaker 4 (21:34):
She running for office, awesomes. That was wonderful, proud Canadian
right there. So he Francis, I think I first became
sensitive to this K shaped economy and what it really
means and how pronounced it is maybe in the twenty
sixteen election cycle, and now here we are, you know, gosh,
almost ten years later, it still seems like it's still
(21:56):
a thing. Is this a permanent part of the US
economy going forward?
Speaker 7 (21:59):
Do you think?
Speaker 2 (22:01):
Oh?
Speaker 3 (22:01):
Yes?
Speaker 6 (22:01):
And actually in twenty sixteen and through to twenty twenty,
we would talk about the K shape and the concept
that there was actually like halves and have not so
and that was a structural situation. The problem that we're
encountering now, especially in the past two years, is that
in the past, the haves and the have nots actually
moved more or less the same throughout. So good times
were good times for everybody. Bad times were the reverse.
(22:23):
The reason there's so much focused from economists like myself
and from RBC on the K shape is that not
only do we have this huge inequality, but their economic
situations are not moving together. They're moving separately. So in
the past you could look at one group and know
more or less how the other ones were moving. That's
just not the case anymore. It's broken our models, and
it changes how we have to talk to clients about
(22:45):
who their end customers are.
Speaker 2 (22:47):
Francis got to leave it there, Thank you so much.
Francis Donald with RBC.
Speaker 1 (22:57):
You're listening to the Bloomberg surveillance podcast. Catch US Live
weekday afternoons from seven to ten am He's durn Listen
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Speaker 2 (23:09):
Why don't you drag in here? Jordan Rochester? Who's you know?
I mean? He's rewriting his rewrite from exactly usearch.
Speaker 4 (23:16):
You're at zoo, absolutely, Tom Jordan Rochester fit macro strategy
for our friends over there at Zuo. Jordan, what's your
feeling here about? You know, this flooding the zone approach
from this White House and maybe some of the policy
uncertainty that creates in the marketplace When you talk to
your clients, how do you kind of suggest they deal
(23:39):
with that?
Speaker 8 (23:40):
Well, from a politics perspective, it's getting things done, which
is pretty painful for us in markets keeping a track
of it all. Flooding the zone means you split and
divide your opposition. They're not sure which agenda to oppose
in that day's media round. But for us in markets,
each one has a different investable theme. You've got tariffs
hanging over Europe, Mexico, Canada, China like a Damocles sword,
(24:03):
with the risk of near term dollar appreciation. But to
be honest, this market is trying to call the bluff
of this president and doubting whether these tarots will go
ahead with the numbers he's put forward or at the
pace that they've been announced. So this weekend could be
a big one. The market still has quite a few
people out there thinking it won't happen in the way
that he said, such as the twenty five percent. Then
(24:24):
you've got the DOGE labor cuts, and that's going to
really weigh on NFP prints in the months ahead. If
you were to listen to the pr campaign from Elon Musk,
the actual numbers so far are quite small, a lot
smaller than what he would be suggesting. But we are
aware that in the next couple of months, if things
accelerate from Doge, it could be tricky for the Fed.
(24:45):
This market will still probably try to price him rate cuts,
not rate hikes, even though we think the Fed's on
hold for the rest of the year. And then you've
got a deregulation agenda. Surely this is an administration that's
good for business, but the tariff policy is kind of
conflicting with so, and ask your question, he's studying the
zone many different policies. Each one has a very big
(25:05):
impact on markets. Some of them conflict with each other,
and it kind of leaves us all scratching our heads.
Speaker 4 (25:10):
So I guess from the currency perspective, Jordan, do I
just kind of buy the US dollar and just go
sit on the sit in a corner there and wait.
Speaker 8 (25:20):
If it wasn't for tariffs, I'd be telling clients to
sell the dollar, because there's a great sort of make
Europe great again mega not megafeme in Europe. However, the
tariffs are a big deal for everyone's terms of trade
if they are to happen in the numbers that we
expecting them to see. Imagine if Europe gets a ten
percent tariff for example, across the board, reciprocal or not,
(25:43):
that would mean a lot for Euro valuations. So what
we're saving to clients right now is, yes, by the dollar,
we think euro could go down to one or two
even parity if the number of tariffs is higher than
what we expect, and then actually that would be a
great opportunity at some stage to take the other side
is a down in euro and then up in the
second half of this year, because I think the EU
(26:04):
will get their act together and respond to this American
threat by doing reform, more issuance of fiscal issuance, and
we'll see a better investment outlook for Eurozone in the
second quarter, you know.
Speaker 2 (26:15):
Jordan, I I look at the ability to try for
all of our listeners and viewers to get a single
point terminal view. Let's call it December of this year.
Dare I say into twenty twenty six, you have the
luxury of constant Rizzuto in Rochester at Missuo. Do you
(26:36):
guys have a combined view that gets us in the
next year or are all bets off.
Speaker 8 (26:44):
Well, it's hard to predict what the weather will be
tomorrow time. Let them know what's going to happen next year.
But I imagine what's going to probably happen is we
have a lot of the events in politics in the
first half of this year and the second half of
this year more about the implications for the economy. What
do I mean by that? We've got tariffs in the
next one month or two. I think a reconciliation bill
(27:05):
will probably pass through Congress in the second quarter. It
might even be April. Joe Biden got his done in
March twenty twenty one. So it's very possible that all
the politics happens in the first half, the second half
will be about the implication of it, and I think
that we'll see European growth start to outperform us this market.
Tom is trying to bring forward that theme. I just
(27:27):
think we're not there yet. We need the tariffs to
go through first before I can jump on it.
Speaker 4 (27:33):
Pound Sterling here, Jordan, what's the call here?
Speaker 8 (27:37):
I think Sterling lower. We're looking for something like one
twenty two during the stage of the next few months,
and that's on the back of the tariffs. I also
think that there's a domestic weakness story that's creeping up.
Last year, the best strategy I had was to tell
clients to hold back from doing Dubvish calls on the
Bank of England because we had very sticky inflation. The
(28:00):
budget has changed things dramatically. There's been a tax height
for employers and what we've seen is a collapse in
the employment intentions of firms After that tax hike. It
costs everybody across the United Kingdom one point seven percent
more to employ staff per year from April onwards. So
I think what we'll see is in the April numbers
(28:21):
that we get in May quite a substantial weakness in
the labor market feeding through to growth, and then by
the June meeting the banking and cuts. That's something that's
a bit of a non consensus view because everyone thinks
the banking cuts every quarter. I think they accelerate it
when they get to June's data round and that should
push Stirling lower.
Speaker 2 (28:39):
Jordan right here. A final question is you away tariffs?
And I get that. I have great respect for the idea,
wait for the facts. Is there a tradable big figure
move in any of the major currencies right now?
Speaker 8 (28:53):
I think there is, and it's on a Japanese bank,
and I think Japan is the one. There's a structural
change taking place in Japan that's decorrelated it from the
rest of the cycle. Now dolly ed of course follows
US interest rates just like everything else. But if you
look at Japanese rates, structurally higher yields is the story, Tom,
and I think that's a sharp ratio that's going to
(29:15):
be pretty high.
Speaker 2 (29:16):
This is really critical. Then do you suggest that the
reflation theories plural of Japan have succeeded.
Speaker 8 (29:27):
I think they're in their infancy, but they're going to succeed.
If you look at the labor market, we are seeing
some of the largest wage hikes Tom since the nineteen nineties.
You've got part time workers getting six to seven percent.
You've got the overall economy at five You've got full
time salaried workers at three percent.
Speaker 2 (29:45):
These are all.
Speaker 8 (29:45):
Numbers above two. And we've got the upcoming shunt to negotiations.
Tom will get somewhat wind as to what we're going
to get out of those numbers. But I think the
numbers going to be another strong five percent like it
was last year or higher. You might have seen the
Bloomberg story early in the week about steel workers asking
for fourteen percent numbers we've just not heard of before
in Japan. So if the chinto goes well, I think
(30:08):
that we're going to see this wage story become self
fulfilling and Japanese core inflation will be stronger than what
the bank pack expects.
Speaker 2 (30:15):
I would respectfully suggest, folks, I haven't heard that conversation
that we just had with Jordan Rochester good thirty thirty years.
Speaker 4 (30:24):
Yeah, I think you're right.
Speaker 2 (30:24):
I think I think you're right to go like that
was Fabulous, Jordan Rochester and the Zoo.
Speaker 1 (30:28):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay 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.
Speaker 2 (30:45):
There is a wall. There's any number of walls in Washington,
to say the least, there is a CIA Memorial Wall,
of which there are one hundred and forty entries. There
are a one hundred and six named, and there are
thirty four names on the CIA Memorial Wall not named.
(31:07):
Some do others talk. We now speak to one of
the great doers of the American military, Mick mulroy. He
is godfather to four of the kids of those people
on the CIA Memorial Wall. Mick, I'm going to cut
to the chase. We just saw the Chairman of the
Joint Chiefs of Staff shown the door. Can our listeners,
(31:30):
can our viewers know that our military is at work
in an organized, productive manner on this Friday morning.
Speaker 7 (31:40):
So good to be with you all again, I'd say,
of course, the president does get to choose who he's
going to have as his key advisors to include the military.
But I'd also say, and we'll disclosure. I know General
Brown that he was an example of meritocracy at work.
He was exceptional throughout his career. The facts speak for them.
Elves fighter pilot, squadron commander, Wing Commander, Deputy at Central Command,
(32:05):
in charge of all the Air Force in the Indo
Pacific and then of course Chief of Staff for the
Air Force appointed in the first Trump administration, so highly qualified.
If there was issues with DEI, that's a policy issue.
Just so everybody knows, the US military, even the highest
ranking don't do policy. They essentially advise and they carry
(32:26):
out orders by the civilian leadership of the Pentagon, including
you know, obviously the Secretary of Defense at his staff.
So if that was an issue, then then that could
have been addressed without the need, of course to remove
c Q.
Speaker 2 (32:40):
Brown early.
Speaker 7 (32:41):
He had many much time left on his post normally
that is not something that changes.
Speaker 2 (32:46):
How to be quick here because Paul wants to get
in here. MC moulroy as simple as I can. And
the first term we had Kelly, we had McMaster. You
said at the table with General Madis. We don't have
those people now, do we. This is a new approach
to Trump too, isn't it.
Speaker 7 (33:04):
Yes, I mean, certainly, I think the three you mentioned
are three of the best leaders of our generation, at
least from my perspective, especially Secretary of Matis. But this
is obviously a different cabinet. It seems to be. You know,
you can pick on experience and accomplishment, you can pick
on loyalty to the president and political ideology, and I
(33:26):
think I think the latter is really came through in
this And that's again, a president gets to choose that,
but every president gets to choose that. So it's kind
of as an argument that you can make. But essentially
so did President by right. So I would say he
picked these individuals primarily for their loyalty to him and
their political ideology, and that's his choice. But that is
(33:48):
a difference, I think than the first cabinet, which was
picked primarily for accomplishment and a long level of experience
in the job that they were going into.
Speaker 4 (33:58):
Nick, President Zelensky Ukraine, coming to the White House today,
can you give us the latest sense of how you
think this situation in Ukraine could play out in the
coming days, weeks and maybe even months.
Speaker 7 (34:12):
Sure, this was a big week. We had the French
president and the uk Prime minister, and now we have
President Zelenski coming today and maybe I think likely or
he wouldn't be here signing this rare earth mineral agreement.
So starting with that, it's essentially ended up being that
American companies will get access whatever that means to fifty
(34:34):
percent of the minerals in Ukraine, which is substantial. I mean,
I've seen reports from reputable groups that it's trillions. Half
of it or more than half of it's under the
part of Ukraine that's currently occupied by Russia. So from
the Ukrainian perspective, if the US wants access to that,
they need to help Ukraine gain their territory back. What's
(34:54):
not in here and what Ukraine really wanted, of course,
were security guarantees. That is the biggest thing they need,
and ultimately there probably won't be a ceasefire agreement unless
there's some security guarantees because Russia has violated, specifically when
it comes to Ukraine, the agreement not to attack them
multiple times, starting in nineteen ninety four when they give
up clear nuclear weapons. In twenty fourteen after they already
(35:19):
you know, annexed CRIMEA. They agreed not to do it again,
they did in twenty twenty two, So there should be
zero trust on whether they will carry this out unless
there's a security guarantee by NATO or European partners or
the United States are all the above. If there's not,
then it's hard to see how Ukraine would accept a
(35:39):
ceasefire that would simply allow Russia to prepare to then
attack them again. But we all should hope that's the case.
We all should hope that, of course, President Trump and
his administration are successful in getting us to a ceasefire
that's lasting to stop this and this war that Russia started.
Speaker 4 (35:56):
Mick, is there any scenario that you can think of
where President Putin and President Trump could come up with
some type of peace record that does not include Ukraine
at the negotiating table.
Speaker 7 (36:09):
No, because ultimately Ukraine has to decide and not to fight.
I mean, they would be hard pressed to continue to fight,
particularly by June when all of the ammunition we've already
provided to start running out without the US support. But
they can, especially if Europe really steps up, and they've
already proven that they beat the odds, right, Most analysts,
(36:29):
like myself we predicting three weeks and it would have
been over an hour over three years, So don't count
them out. But the US needs to continue to support.
It's not just altruistic, it is in our own interests.
They are depleting the Russian military so substantially that within
the last two years they lost more soldiers than we
lost during the entirety of a war in Iraq. It
(36:50):
is really taxing on them and it's difficult for them
to maintain this, but it will be difficult for Ukraine
to keep up that level without the US full support.
Speaker 2 (37:00):
Nick, what is the signal to our allies of what
we witnessed at the United Nations this week back to
nineteen forty five, we went with Team Russia.
Speaker 7 (37:11):
So certainly scared the Bejesus out of them, quite frankly.
And there's two parts of that, right. So they are
very used to their allies being what it has been,
you know for decades, which is the United States in NATO,
the most significant military alliance in history. Where I can
say that they have fallen short they be in our
European allies. If they have essentially left a lot of
(37:32):
their security over to the United States. They had the
biggest brother on the block, so they were fine with
spending their money on things other than their own national defense.
They've woken up to that they are all increasing their
expenditures on their own national security beyond what the NATO
calls for, which is two percent, some going as three up,
potentially even a five percent. That's a good thing for them,
(37:54):
it's a good thing for NATO, and many presidents, to
include President Trump, have been pushing rightfully for them to
do that. So that's a good thing. But the problem
is they might get to a point where they just
don't trust the United States when it comes to our
allegiance to NATO. I know Secretary Ribo have said that's
not the case, so as national security fighter Waltz, I
believe that's the case. But that has scared them so
(38:17):
much that they are now concerned and potentially even starting
an alternative to NATO.
Speaker 2 (38:22):
Mick, we got to leave it there. We can talk
for hours with the Lobo Institute, McLaury with his service
to the nation, with the Marines, and with the CIA.
Speaker 1 (38:35):
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 watch us
live every weekday on YouTube and always on the Bloomberg terminal.
Speaker 2 (38:50):
You look at the front pages of Lisa Matteo Report,
you're not mentioned in Taylor and Travis, are you?
Speaker 9 (38:55):
No, we're not. Okay, definitely to stay it away from that.
What we are talking about is, of course AI. We
always talk about it, but people are finding new ways
to use it. That includes cheating on job interviews. So
the way they're doing it, they're using these generative AI
tools like coding assistance, teleprompter apps that feed them live
answers when they're doing video interviews. So Business Insider are saying,
(39:19):
Amazon they want to put a stop to it because
they're seeing more of it, so they change their guidelines
and their job applications so you can be disqualified if
you use any of these things. The question is, how
do you know if someone's using it? Yeah, So Amazon
actually put out some guidelines. So for example, those watching
on YouTube, if I'm doing the job interview here, I'm
usually looking and if you ask me a question, I'll
(39:39):
be typing, you know, because you're typing in the question,
you know, so what AI will response. So if you
see someone typing, that's a red flag. And then if
you see someone you know answering your question but they're
kind of like looking like they're reading like this. If
you're on YouTube, that's another red flag. So what they're
doing is they're trying to like cut back on this
because more and more people and it's not just Amazon
is saying it. Other these are saying that people are
(40:00):
doing this, They're cheating on these resumes.
Speaker 4 (40:03):
There's there's a certainly be a story on bloomber guest today.
There's certain keywords that people are facing on. Then you know,
you see it on somebody's resume. You can tell the
resume was created by Yeah.
Speaker 2 (40:15):
I'm getting the buzz that for college applications is definite.
They can tell a heartbeat college. I don't know other
than good luck with that.
Speaker 9 (40:26):
Okay, this was interesting.
Speaker 2 (40:28):
Screaming from the screen. We could tell you this is interesting.
Speaker 9 (40:32):
The erosion that's eating away at those homes in Nantucket.
So it gets like into a deeper look into it.
Some of the pictures are amazing. If you look at
this article, but they say emergency crews. They're scrambling. They
basically use these steel beams. They put them under the homes,
they jack them up, and they roll them back about
a huge you know, a few hundred feet back. But
it's happening more often since twenty twenty three. Houses on
(40:53):
the street is called Cheap Pond Road. They've been condemned, demolish.
Some are moving back and some are They just have
to sell for pennies on the dollar, so they're losing out.
But here's what the residents are saying. And Paul, this
goes to you in the Jersey Shore because Nantucket doesn't
have those jetties and those sand like replenishment projects like
the Jersey Shore. I mean, I remember sitting on the
beach and the Jersey Store and seeing those ships come
in and I was.
Speaker 4 (41:13):
Like, what are they doing right right now as we speak.
Speaker 9 (41:15):
Yeah, and that's what they're doing. But they're saying Nantucket
doesn't have that.
Speaker 2 (41:18):
They're out in the middle of nowhere where the erosion
has been there for years. And I don't pretend to
be an expert on it, but you know, I'm looking
at it right here now on Chester Street in Nantucket.
You know, Lee real Estate has it, and it's a
nice little small bungalow on the street, distant from the water.
It's like you could shoot a movie in front of it.
Are you ready? Three point eight million dollars and it's
(41:42):
I mean it's it's three bedroomish. Yeah, you know.
Speaker 9 (41:47):
Well the problem a lot of these people bought during
the Yeah, their their values going down because they're going
to be falling into the water. Positive three million. Crazy.
Speaker 4 (41:56):
If you're going to buy a home on Nantucket or
kit caud my personal je, you have to also be
able to have a fractional ownership in a plane. If
you can't do that, then don't buy it, because if
you're not flying up there easily, you can't drive. Yeah,
it's a disaster.
Speaker 2 (42:10):
Okay, what else?
Speaker 9 (42:11):
Last one, this big mistake by City Group. It's actually
coming to light now. The Financial Times has it. They
credited client's account with eighty one trillion dollars. It was
meant to send only two hundred.
Speaker 2 (42:23):
And eighty dollars.
Speaker 9 (42:25):
It has been last April never reported because it was
like a near miss, but the Financial Times looked into
it. It said it was missed by a payments employee, missed
by a second official a third banker finally found it.
The payment was reversed several hours later, so that is
good news. No funds left the bank, but it just
shows that you know they're going after that.
Speaker 4 (42:44):
As a former bank teller, it happens. If I had
a three thousand dollars miss at the end of the day,
I could find that in five minutes. If I had
a twenty three dollars eighty seven dollars miss, could never
find it, and they take it out of your paycheck.
Speaker 9 (42:56):
Eighty one trillion, I know the round numbers.
Speaker 2 (42:59):
They can find easy, and they took it out of
the paycheck. My sister went through this exactly. Thank you
the newspapers withou. Lisa Matail greatly appreciate that.
Speaker 1 (43:08):
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
(43:29):
and always on the Bloomberg terminal
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