Single Best Idea with Tom Keene: Stephanie Roth & Michael Darda

Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio.

In this episode, we feature conversations with Stephanie Roth & Michael Darda.

Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:15):
Single best idea and the single best idea is in
doing this for decades plural. This has been one of
the most extraordinary weeks. And what you do, it's a blur, folks.
I mean, just to give you a little vignette here,
Cy Benson's in my ears constantly with my headphones on,
literally telling me what the next thing is, tick by

(00:35):
tick by tick, because Paul and I are looking at
eight things going on in real time and we can't
keep track of like what's next, or what's out three
things or that. And with the quality of the conversations
that we had this week, given this amazing news flow
culminating in all the terrif announcements today and then this

(00:56):
jobs report, it's just the privilege of these conversation. And
you remember one single sentence out there, here's the sentence
of the week, and it's from Lyle Brainer, the vice
chairman of the Fed, thrilled that she could join us
from Harvard, and doctor Brainer said simply, they want to

(01:16):
bring in revenue, and that was the same. I'm not
saying I agree that that's a public policy with tariffs,
but at half a trillion or four hundred billion, whatever
the number is, it's a big number and that's what
this is about. As all America faces the combination of
this job's economy and the tariff discussion, and then it

(01:39):
redounds back to the market with as we fill this
right now the doubt negative seven hundred, we'll see where
we end up out in the far distance of four PM.
Single best idea, Stephanie Roth nailed it with Wolf Research.
We had her in quickly for a victory lap. It's
rare that an economist can come in at eightousand, and

(02:00):
when the shock number was seventy three thousand, Stephanie Roth
goes to the Mexican border.

Speaker 1 (02:06):
I think the main thing that we took away from
this print is that immigration is having a big impact
on the labor market. And this is not just because
depressing the July print, but also the reasons for the
big revisions that are and should be making headlines today.
They are because this is a labor market where headline
job gains. The break even steady state pace of job
growth has slowed down substantially, and that will be the

(02:28):
case for quite some time given the immigration policy. Yet
it tightens the labor market keeps the unemployment rate largely steady.
It puts up a pressure on inflation on top of
the tariff inflation.

Speaker 2 (02:38):
In the budget, laby El modeling out a lift in
the unemployment rate out of eighteen months. And who knows
what that migration will be. But I hear four point seven,
four point eight eighty different flavors, different analysis. All I
know is four point nine is distant from five point zero.
Michael Darta knows that as well. Roth Michael Darta bringing

(03:02):
in the markets into our discussion of the American economy.

Speaker 3 (03:06):
So the markets have priced in ninety one basis points
over the next twelve months. So does the FMC guide
markets for more than that or less than that?

Speaker 2 (03:17):
You know?

Speaker 1 (03:17):
Right now?

Speaker 3 (03:18):
I mean, I think you've got quite a bit of
division on the committee. We did get two descents. That's
the first time too. Fed Governor's descent to.

Speaker 2 (03:25):
This way genius is this morning.

Speaker 3 (03:27):
Since nineteen ninety three, right, But I think the focus
has to be on price stability. I mean, obviously the
FED wants to preserve the business site, but inflation is
still above target. And if the FED is going to
be harangued and cajoled into cutting rates when it's perhaps
inappropriately inappropriate to do so. If inflation expectations go up,

(03:51):
then long term interest rates go up, not down. So
if the president's concerned about debt financing costs, let the
Fed do its job. You know, let's return Plation two.
Target and price stability is the number one way that
you're going to have moderate market interest rates. The other
way is get the fiscal house in order in Washington,

(04:12):
DC has good luck for that fate planted in that regard.

Speaker 2 (04:16):
Michael Darter, with wisdom there from Roth Capital, I would
suggest we are deep into August, and all that means
is we're getting towards an election in twenty twenty six.
Some would say it's begun now, but let's be charitable
and saying four or five months. I don't think the
politicians and all of our House of Representatives is going

(04:37):
to be worrying about the inflation dynamic here. They're going
to be looking at that labor market and we're committed
to covering it here in the coming months. The Shock
revision today, thank you again with the leadership of Anahong
of Bloomberg Economics, she was brilliant. Today we're on podcasts
it's a new rage. They keep telling me Apple, thank

(04:59):
you so much if I thank you, and on YouTube
podcasts it's the single best idea