July 22, 2025 • 39 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyJuly 22nd, 2025
Featuring:
1) Adam Posen, President of the Peterson Institute for International Economics, joins for an extended discussion on trade, the dollar, and Fed independence. Stocks slipped Tuesday while investors braced for news from companies on how tariffs are filtering through to their earnings. JPMorgan Asset Management Global Market Strategist Hugh Gimber told Bloomberg TV that strong second-quarter earnings won't tell us a huge amount about where we are going forward, and that's where we are spending our energy on this earnings season, trying to gauge where the hit from tariffs will come through.
2) Libby Cantrill, Managing Director: Public Policy at PIMCO, talks about why she thinks Jay Powell will not be fired and why the release of Fannie and Freddie from conservatorship is unlikely. Treasury Secretary Scott Bessent said there should be a review of the decision to renovate parts of the Federal Reserve headquarters in Washington. Bessent said the Fed's independence "is a cornerstone of continued US economic growth and stability", and that its conduct of monetary policy "is a jewel box" that should be preserved.
3) Ian Wyatt, Chief Economist at Huntington Bank, on the broader US economy, US consumer, and why the Southeast is outperforming northern states and has room to run. A record-breaking stock rally has powered on in the face of growing uncertainty over trade negotiations ahead of the Aug. 1 tariff deadline.
4) Ayesha Kiani, NYU Professor and COO at MNNC Group, on the crypto and Bitcoin surge and what the passing of Stablecoin legislation means for the industry, as well as fraud potential. It comes as Bitcoin's price has surged to over $120,000, with its value coming from its finite supply and perceived role as a macro hedge.
5) Lisa Mateo joins with the latest headlines in newspapers across the US, including an NYT story on how the affordability crisis in New York City is expanding to a new area of urban life -- animal shelters, as well as a Business Insider story on TikTok's message to managers: Don't 'be nice' during performance reviews.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple CarPlay or Android Auto with the Bloomberg Business app.
Listen on demand wherever you get your podcasts, or watch
(00:25):
us live on YouTube.
Speaker 2 (00:27):
We know the Secretary is listening to Secretary best in
after his interview on the movie.
Speaker 3 (00:30):
He's probably you know, tuning.
Speaker 2 (00:32):
In here, and he's tuning in for Adam Posen with
the Peterson Institute for International Economics, truly one of our
great economists, noticing that Philadelphia won last night.
Speaker 3 (00:43):
Okay, basis loaded, I's all that.
Speaker 2 (00:45):
Temphending, catchers interference. It's like, you know, it's like terrible
Adam posing with us this morning. Adam, my book of
the Summer's ken Roll, goffs our Dolly, your problem. I
read the footnotes on that much of a Nerd, and
back in the foot it's they mentioned Alwin Young of LS.
Adam Posen is mentioned as well, and sandwichs in there, Adam,
(01:08):
as you know, is Paul Krugman's nineteen ninety four jewel
on the myth of the Asian Miracle. If you're speaking
with Secretary of Treasury Bessett. Now is he meets with
the Chinese Monday in Stockholm, what is the myth of
China that he needs to know about?
Speaker 4 (01:27):
Thanks for having me, Tom, and of course I follow you.
So I saw you made Ken's book the Book of
the Summer good call. I think the myth that Alan
Young and Paul Krugman and others put out which was right,
which is, you don't get self perpetuating growth. You don't
get trend productivity, growth improvements with just through throwing more
(01:51):
capital that you have to actually innovate. And so this
has been an issue for China, not because they don't innovate,
the private sector does clearly, but that they keep deciding
to throw huge amounts of money into the state owned
enterprise sector, into industries of yesterday. It doesn't solve Secretary
(02:16):
Pscent in the US's issue with China because again there
is a fundamental competitiveness of a lot of the Chinese economy,
and then disputes about their treatment of intellectual property rights,
their treatment of dumping of subsidies. But the fundamental point
which my colleague Nic Clardy also in China, yeah, is
(02:41):
that there is still a huge divide between the public
sector and the private sector use of capital in China.
Speaker 2 (02:47):
Adam posen I was going to mention Nick Lardy, with
real authoritative decades of perspective on China, do we want
those jobs back?
Speaker 3 (02:54):
Does a Peterson Institute see.
Speaker 2 (02:56):
Any evidence that we want the quote unquote manufacturing jobs
of China back in America?
Speaker 4 (03:05):
Depends which ones you know talk about Krugman and Laura Tyson.
We're debating thirty five years ago, industrial policy right and
trade strategic so called strategic trade policy, and long through
the years. What's come out is you want to be
realistic about what jobs you can get, and you want
jobs that are relatively well paid for the level of
(03:29):
development your economies at and as people rightly made fun
of Secretary Lutnik talking about, we don't want us people
screwing little screws into the backs of iPhones. That's not
what the US should be doing. We don't really want
us people doing things that can easily be substituted for
by robots and mechanization. There are some manufacturing jobs that
(03:51):
would be nice to have, But as another colleague of mine,
Robert Lawrence, who you know well, has argued, there's a
real limit, given technology, given international markets, given declining demand
for in money terms, for manufactured goods, how many of
these manufacturing jobs you can create? And so that ultimately
(04:12):
is the crazy thing about all this. If you go
through turning the whole US economy upside down, you're going
to change the labor force by one one and a
half percent at most, which is a lot in human terms,
but is a very small amount in the economy. That
doesn't say we shouldn't worry about concentration risk and national
(04:34):
security risk. On the manufacturing side, that's a different argument.
But the jobs idea, there's just fundamental limits. You're not
going to create enough good jobs as they're called through
this kind of policy.
Speaker 5 (04:48):
Adam, what do you make of the US dollar here?
It's still down nine ten percent versus it's high from
earlier this year when most risk assets, whether you look
at the S and P five hundred, they bounce back
in are setting new heis what's going on with the
US dollar?
Speaker 4 (05:01):
In your opinion, you're right to point out the divergence,
but I think there's a reasonably clear explanation. So as
I know you wore ware Paul, the TIC data, the
Treasury International or whatever it's called. Data shows that there's
been big inflows into the US. What seems to be
happening is a lot of long money managers, including sovereign
(05:25):
wealth funds, including certain bank and government reserve managers, but
also pench of funds. Insurance companies are smartly repricing risk
on the US, both because the US is providing less
credible insurance than it used to in various ways, and
because the fiscal path is now noticeably worse, and so
(05:47):
they're hedging. They're paying for hedges on the dollar in
a way that they rarely have for the last twenty
thirty years, and that's more easily expressed through the currency
markets than through through equities or bonds. And so to me,
we're seeing a genuine move against the dollar on fundamentals,
(06:10):
and we're seeing that in as many people have documented,
including my Colleymoriozeld, including Ellen Ray at London Business School,
that we got this and you've spoken about we've got
this now kind of em dynamic. When bad news hits
in the US, intra day, intraweek, interest rates go up
and dollar goes down, as opposed to usually for the
(06:32):
last twenty thirty years, when bad news hits, interest rates
go up and dollar goes up because there's flight to
the US. So there isn't a contradiction. There is an
expression of non zero risk on US assets that has
to be hedged, and that's showing up in dollars in currency.
Speaker 5 (06:53):
Excuse me, Is there a risk that the dollar loses
this position as reserve currency in the global Me?
Speaker 4 (07:01):
No, but I think dollar loses its centrality. So let
me parse the words carefully. Reserve currency status doesn't have
to be only one. The historian Berry eichen Green has
documented this. Mark Vantro and others have documented this. It
basically the attribute of reserve currency is that you can
issue your public debt in your own currency, and secondarily
(07:24):
that at least some of the time when there's a panic,
people come to it. That latter part, as I just said,
is we can take some But US is going to
continue to be able to issue debt in its own
currency at higher interest rates. But it will be able
to But I and Maury and Marcus Brennermeier and or
given a bunch of US are talking about decentering of
(07:44):
the dollar, that the dollar is being massively overweight, and
reserve portfolios in transactions, in payment systems, in currency pegs.
All of that I think is potentially starting to be unwhound.
I don't think it's it's all gonna go away by
any means, but I do think there is a meaningful
shift with.
Speaker 2 (08:04):
It's Adam Posen of the Peterson Institute in Washington, and
we welcome all of you on your commute across the
nation this morning. Good Morning ninety nine one FM in Washington,
Nathan Hager Radio ninety two nine in Boston and Brookline,
and of course Bloomberg eleventh three to zero here in
New York on YouTube. It is a digital experiment growing
(08:24):
each and every day. The best way is to subscribe
to Bloomberg podcast. Anticipated is September nineteenth of this autumn,
where there will be a wonderful, I guess, virtual moment
for Adam Posen at the Peterson Institute with Jason Furman
and Kenneth Rogueoff. And what's so important about this It's
(08:46):
an honor of Richard and Cooper who was at Harvard
for years and synthesized our economics together. Adam Posen get
out front of the September nineteenth date. How do we
synthesize the American turboil now into twenty twenty six.
Speaker 4 (09:05):
Thank you for mentioning our third annual Richard and Cooper
Memorial Lecture, which his family has paid for at the Institute,
and we're very proud to have Ken Rogoff being this
year's lecture in Jason Furman, his Harvard colleague chair to
synthesize it, Tom, I have an article forthcoming at Foreign Affairs,
which I know you read, talking about the fact that
(09:28):
the change in the regime from the Trump administration is
very real in the sense building what I was just
saying with the dollar, in the sense that the Trump
administration is not just renegotiating the pricing of the public
goods that it provides the rest of the world. It
(09:50):
is fundamentally altering the credibility of the promises, the reliability,
the nature of the relationship that the US has economically
with other countries. And as a result, as we just
spoke about repricing of risk on dollar assets, including treasuries,
(10:13):
I think that a bunch of countries, a bunch of companies,
a bunch of investors are reallocating. And you mentioned Dick
Cooper and the book that I first knew about from
Dick Cooper was his nineteen sixty eight book The Economics
of Interdependence that ahead of everybody else, He said, Look,
(10:33):
the US has to reckon with the fact that other
economies are interdependent with us. They're dependent on us, We're
dependent on them, and we have to figure out how
to balance that and work that. And the Trump administration,
as far as I can tell from all their policies
(10:55):
since retaking office, is basically saying, wherever we're dominant in
an immediate sense, where we're less dependent than they are,
we will try to extract as much as possible.
Speaker 2 (11:09):
Time And because of time, this is so important what
we're talking about here, folks beyond Trump and I go
to Speaker Secretary Lutnik talking yesterday the certitude of a
unilateral power of America. Do you think we get back
to traditional American interdependency after Trump or is this a
(11:31):
one off and permanent change for generations.
Speaker 4 (11:36):
I think it's somewhere in between. I think, just as
with the alliance relationships in Europe, as Koreyshaki has spoken about,
that there are some fundamental changes tearing up of trust
that will take a generation rebuild. But I also think
that this set of policies is going to blow up,
unfortunately for the US, over the next few years. Whether
(11:59):
it's two years or six years, I unfortunately can't say,
but it's going to blow up. And presumably at that point,
just as after Herbert Hoover and Andrew Mellon in the thirties,
there was a reckoning. I hate the combination of foreign
and economic policies that are being pursued. I use the
(12:21):
term hate because I think it combines bad policy making
bad impact with bad values. And I am hopeful, just
as the US found its way in the forties and
fifties to a more constructive engagement with the rest of
the world, a more realistic in its own self interest frankly,
(12:41):
that the US will do so again. But I'm also
advocating and hoping and engaging that the rest of the
world can create and maintain things that without the US
and China real quickly.
Speaker 5 (12:57):
So Adam, just to put a bow and that is international,
at least for the near term. Globalization is that over.
Speaker 4 (13:05):
No, Paul, I think it's corroded. I think the US
aspects of globalization are definitely in retreat, but you can
see osion and CPTPP, the various arrangements in Asia deepening
and expanding. You can see the EU stepping up, not
as much as perhaps the moment calls for, but much
(13:25):
more than in the past, and integrating slightly more. You
can see Brazil and India and Turkey the major emerging markets,
and Indonesia pursuing again a mix of good and bad policies,
but still fundamentally pro globalization. The world goes on, but
it is a more rugged world after the seismic shock
(13:48):
from Trump. It is a world where the roads are
less good and some of it has to be rebuilt.
Speaker 2 (13:53):
Adam Post and thank you so much, greatly, greatly, I
appreciate it, anticipating his effort for four and airs coming
out in the coming weeks.
Speaker 1 (14:08):
You're listening to the Bloomberg Surveillance Podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
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watch US live on YouTube.
Speaker 3 (14:20):
Lebby Cantrell is.
Speaker 2 (14:22):
With PIMCO and it's looking at Washington policy.
Speaker 3 (14:26):
Le mey uh. There's a point.
Speaker 2 (14:28):
I remember a book of the summer ten years ago
was a one volume on John Hay it was absolutely
superb and before air conditioning, it was how Washington came
to a complete total halt in July.
Speaker 3 (14:43):
Is there a summerness to your Washington d C.
Speaker 6 (14:47):
I mean there typically is. I think we all gotta
wait with baited breath for usually for the August recess.
You know, Tom, though, I think that this president has
proved that, regardless of Congress is in session or not,
there are still many headlines and subsequent market reactions to
to those headlines in Washington, regardless of Congress is in
(15:09):
So I'm not sure it will make that much of
a difference this year, But usually it is a time
where people do go on vacation and and enjoy the
restpite before what usually is a busy fall in Congress, Can.
Speaker 5 (15:20):
Fed Chairman J. Palace, You're going to be able to
enjoy the rest of this summer into the fall here.
How do you view that whole process, that issue?
Speaker 6 (15:27):
Yeah, I mean it's you know, I think you know.
Our view, I think, very much like Stephanie, is that
that that Fed chair Palell is going to stay the course.
We do not think that it is likely that he
either resigns or that President Trump actually fires him for
a variety of reasons, most of which it is self
defeating for the president. We do not think it's the
lower interest rates. We think it all can make it
(15:48):
much harder for him to confirm basically anybody that he wants,
particularly more dubbish, a dubbish person. So I think that he,
you know, J. Powell, probably will will not be resty
as much as he would want to in August. But
again I think we agree with him with Stephanie is
not that he's not going anywhere and he will stay
the course.
Speaker 2 (16:08):
Libby synthesize your work on political economics and the politics
at Washington into.
Speaker 3 (16:13):
The world of PIMCOH.
Speaker 2 (16:15):
We're hearing in the zeitgeist a more constructive tone, as
we just heard from his Roth of Wolf research, a
more constructive summer, a more constructive Q three, OMG, we're
going to survive tariffs. Fold that into the bond market
in what yield would do? Does that get us back
on a disinflationary vector of low yields or do we
(16:39):
have stimulus that gives us stable yields or higher yields?
Speaker 6 (16:45):
Yeah?
Speaker 3 (16:46):
We think.
Speaker 6 (16:46):
I mean, we've been saying now for about a year
that our view has been that you'll most likely get
a steeper curve, whether that is sort of a bear
steepening or a bull steepening, you can basically get both
right where you have more term pre at the long
end of the curve, as investors like pim Go require
more yield to invest in longer term paper, but at
(17:08):
the same time you also expect the FED to likely
cut and that is our view. We do think that
you may get more term premium at the end as
folks do get increasingly concerned about the deficit situation about
potentially the independence of the FED. But at the same
time that the economy is accelerating and you know, you
may see a little bit of stimulus from the tax bill.
(17:30):
I'm not sure that's really been sufficiently reported, just in
terms of some of the retroactive tax provisions that were
retroactive to the beginning of twenty twenty five. That means
just the bottom line here is that consumers will actually
be getting some nice tax refunds in the beginning of
next year, but also businesses will be able to take
advantage as some of these new business tax provisions starting
(17:51):
kind of you know, in the fall. Most likely, so
you could see some you know, marginal physical stimulus. We're
penciling in about half a point over the next twelve
months from the tax bill. But that said that the
tariffs are still in place, and we continue to believe,
and maybe we're in the minority here, that the President
is not you know, tacoing if he will on tariffs.
(18:13):
He really believes this. He believes this is an opportunity
to really remake the global trading order, and I think
it would be sort of foolish, honestly to not take
him seriously that higher tariffs are likely coming. Regardless though, Tom,
this is important is that the tarifrad is already high.
You know, we're we're assuming that the tariff rate is
about thirteen fourteen percent, and again we'll likely go high
(18:37):
even if you don't see these reciprocal tariffs going on
August first. I, Paul.
Speaker 3 (18:40):
I can't get my head around that. I'm still frank.
I've heard thirteen, I've heard fifteen, give me seven other numbers.
I know we are so far from three.
Speaker 5 (18:51):
So far from three. And the question obviously is how
much will corporate take it in their margin versus passing
along to consumers.
Speaker 7 (18:58):
So Libby.
Speaker 5 (18:58):
I also want to look a small page forward here
to September. When our esteemed Congress returns in September. They
got to pass some legislation to keep the government open,
don't they Yes.
Speaker 6 (19:12):
As a reminder, in the tax bill, which I think
we all welcomed in the bond market, they did address
the debt ceiling. So the debt ceiling is usually that
that is a you know, because they're a big crisis,
or at least momentarily crisis for the bond market. We're
not going to see that the debt ceiling has now
been increased, likely to be on twenty twenty eight, if
not even, or twenty twenty seven if not further. But
(19:34):
but we do still need Congress to fund the government
to avert a shutdown deadline to September thirtieth. They haven't
made a lot of progress. We could see a government shutdown.
I'm not sure if it's a real market event, but
clearly if the market is already feeling kind of if
they're already on edge, or if they will be on
edge in September, this could sort of exascerbate that one.
Speaker 2 (19:54):
If I got a note here, not a hate you know,
I do get the hate man Michael Bargets all the
love notes, but Lebbie Cantrell is the basic tone of
the American zeitgeist that we're prospering in a prosperous America
and that with all this legislation, all of the administration's work,
(20:15):
all of our work, we're leaving behind a huge part
of America. Is that the backstory of this twenty twenty five.
Speaker 6 (20:25):
I'm not exactly sure what you mean by but we're.
Speaker 3 (20:28):
We're leaving behind.
Speaker 2 (20:30):
I'm getting notes from people saying, all your fancy people,
all your fancy guests, are talking about in America that's employed,
prosperous in the stock market, whatever, in the bond market
with Pimco funds. The fact is we're leaving a whole
hunk of America behind, right.
Speaker 6 (20:49):
You know, I think that's absolutely right, And I mean,
this is part of the reason why I think the
majority of Americans elected President Trump is that they did
feel like the sort of the establishment that the elites,
the Bloomberg elites, if you will, Tom, we're, you know,
we're leaving the kind of the working person behind. I'm
not sure if those folks feel like this that Trump
(21:11):
administration elites yet yet have addressed some of those concerns,
particularly around cost of living. I mean these are all,
you know, kitchen table issues. These are still are the
most important for voters. And I'm not that that doesn't
seem to have gone away if you just look at
least it's for the pulling. Take that with a great
self n I see.
Speaker 2 (21:28):
Butt Lebby, Thank you so much. Lett me cantrill with
pimcom with this Morning.
Speaker 1 (21:32):
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Speaker 3 (21:49):
It is a single sentence. At the end of his report,
Ian White is with Huntington Bank.
Speaker 2 (21:54):
With a perspective difference in three zip codes in Manhattan,
the Southeast is out performing northern states for total spending growth,
partly reflecting a growing younger population.
Speaker 3 (22:09):
Give us a Huntington Bank anecdote. How the ute from
the northeast are going south?
Speaker 8 (22:17):
I mean, look at Charlotte, I'm based there. You can
see tons of New York bankers ending up there having kids.
It's huge banking center right now. And we're seeing across
the Southeast and Texas, of course, just remarkable growth. That's
part of why you know, we made an acquisition in
Veritex and Dallas. Leaning into the demographic trends, Dallas blows
(22:39):
my mind numbers wise. If you look at the census
data from the estimates for population since twenty twenty through
twenty four, Dallas added about six hundred and seventy thousand
people the number so Texas added the most people, Florida
the second most. North Carolina was third in terms of
population growth. North Carolina only added five hundred and ninety
thousand people, So Dallas added Washington, d C.
Speaker 3 (23:01):
That's great. I love that Dallas head in Washington, d C.
It's too good to be true. What's the worry? What's
the constraint on this great migration?
Speaker 8 (23:11):
Definitely, cost is becoming more of an issue. You look
at housing costs in a lot of these cities that
were pretty affordable, you've seen that really go up. Now
in recent months, we've seen a bit of a pullback
and home prices there, especially in desirable areas in near
core you have run up where the affordability gap isn't
quite as strong as it once was, so we are
(23:31):
a bit concerned about that. For somewhere like the Carolinas,
where we're growing organically. We've at Hudntington, we've recently started
opening branches and we open commercial commercial offices in all
six major metro areas across both Carolinas each What's interesting
there is every metro almost has a different economic model,
and so you have probably six distinct economic models you
(23:53):
can look across the six big metro areas there, so
each one has a different thing driving its growth, but
it is generally, you know, business friendly climate. People want
to live there. And the reality is companies right now,
in an environment where labor force isn't growing, the twenty
five to fifty four year old population is basically flat
in the United States, especially with lower immigration, companies are
(24:14):
going to follow workers and they're following where they want
to live, and Texas continues to attract them and just
unbelievable numbers, and the Carolinas are also doing very well
as well.
Speaker 5 (24:25):
All right, let's step back, what's your view overall of
just kind of this US coonvy. I don't know if
you lead with the labor market, lead with the consumer.
I mean, we know everything's great then in the Carolinas,
in Texas, we get that It's been that way actually
my entire career, quite frankly, broader speaking, how are you
guys thinking about things? What are you hearing from your clients?
Speaker 8 (24:44):
We see it as clients still see a somewhat conservative
consumer who's not making huge purchases. They're a little hesitant
on debt finance purchases. If you talk about you know,
we have a large business in RV plan lending, boats, marine, jetskis,
all those things.
Speaker 7 (25:03):
Yeah, we do Vesta scooters. Yeah, so you know se
do or something like that.
Speaker 8 (25:09):
We'll do a lot of a lot of their dealers
We have relationships there where we do a lot of
the dealerships. And you still see that consumer whose debt
financed is a little hesitant. They're that lower end product.
The higher end product, the consumer who's you know, selling
equity near retirement. They may have had that conversation, you know,
back in December with their advisor where they have that
annual review and they say, you know, how much money
(25:29):
do you want to do?
Speaker 7 (25:29):
You want to die with you know, have some fun
with it, enjoy it.
Speaker 8 (25:32):
You're doing pretty well, and so we still see that
that consumer I think is the base of the US
economy right now and really what's driving growth. You know,
they're the ones who refinanced in twenty one. They're the
ones who inflation hasn't affected them very much.
Speaker 3 (25:46):
So if Michael Barr finances his spark tricks se do
ye at nine ninety nine dollars, you can get financing
from you.
Speaker 8 (25:57):
It's more we've probably financed his dealer is where now
we can do the financing on this too.
Speaker 7 (26:03):
But his dealer's floor plan, his floor plan facility.
Speaker 8 (26:06):
Yeah, we probably We have a relationship with Bombardier recreation products.
Speaker 5 (26:10):
You what are you hearing from your clients in the
Midwest where hunting started. What are they telling.
Speaker 6 (26:18):
You these days?
Speaker 5 (26:19):
Again, we know the Southeast is kind of booming, but
you're you guys are hunting at Columbus, Ohio, big Midwest
presence historically.
Speaker 7 (26:25):
What are they telling you, I'd say a couple a
couple of things.
Speaker 8 (26:28):
One definitely, trying to pull back the supply chain to
the United States is a real thing that's happening, and
It really depends on the industry whether they think it's
going to happen. You know, I talked to a company
and building products and they just said, look, the entire
supply chain for our entire industry, soup to knots is
in one province in China, and we just don't know
if we can move it at all. So we're going
to have to deal with the tariffs and figure out
(26:50):
ways just to manage.
Speaker 2 (26:50):
It'll be quickly here. So timeline do you have where
we rationalize one province in China?
Speaker 7 (26:59):
I don't know.
Speaker 8 (27:00):
I think it really depends product to product.
Speaker 7 (27:01):
Autos it's definitely coming back.
Speaker 8 (27:03):
There's definitely moves to get more parts made here, more
things made here. We're hearing that. In terms of the Midwest,
I also think there's a little bit of a growth
split where we're seeing better data for say, anything.
Speaker 7 (27:16):
South of the Great Lakes. So in Indianapolis.
Speaker 8 (27:18):
Indianapolis, if you look at their job growth data, it's
basically been a sat Sun belt market since twenty twenty.
Columbus is doing a bit better, Cincinnati's doing a bit better.
So you kind of have that strength in the southern
half of our footprint that you're a little stronger overall, though.
I also, you know, we probably have seen a little
stronger consumer spending growth in the Southeast and the South
(27:42):
when you look at the real time spending data.
Speaker 3 (27:44):
In one thank you so much. With huntingson bank there
a view to the southeast.
Speaker 1 (27:54):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Karplay 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 (28:09):
In honor of this bitcoin discussion, I went back to
where the trend happened in bitcoin twenty fifteen.
Speaker 3 (28:16):
And Paul I did a log linear extrapolation of bitdog
and I can assure you in the late summer of
twenty twenty eight, bitcoin will be worth one million dollars. Okay,
pretty bell coin. So there you go, with the velocity
of the lift in.
Speaker 5 (28:30):
Bitcoin, Bitcoin sitting right here at one hundred and nineteen
thousand dollars even just an extraordinary run. Here, Aysha Kiani joins,
and she's a COO of M and C group. Also
over there at a professor at NYU Little College downtown
Manhattan are issha. What is the theme around crypto these days?
(28:52):
Is it the fact that we have an administration now
that seems to be embracing crypto broadly defined? Is that
kind of the main narration?
Speaker 9 (29:00):
I think the main narrative is that there's no stopping
us anymore. Right, So I know where we have basically
been unleashed, and so number one driving forces obviously the
ETFs inflows, right, three point one in bitcoin three point
four or five in ethereum billion, just in like last week.
Speaker 6 (29:21):
Right.
Speaker 9 (29:21):
The other thing is that the pro Legislative Action on
Genius Bill, which is the stable Coin Act, Right, So.
Speaker 5 (29:30):
What does that act say? What does it do?
Speaker 9 (29:32):
The Act sss that if you're a bank or if
you're a company, you are authorized to create your own
stable coin backed by the US dollar. Okay, so if
you're going to create ten stable coins, you have to
have ten dollars in your bank.
Speaker 5 (29:48):
That seems like something that even a Jamie Diamond could
get behind.
Speaker 9 (29:53):
And he has been getting behind. City Bank has been
getting behind. We are seeing a lot of action on
the banking side where every bank is either sorry.
Speaker 3 (30:06):
No, no, I don't mean to grow up.
Speaker 9 (30:07):
I'm listening so basically every bank is very much interested
in coming up with their own stable coin.
Speaker 2 (30:15):
What's the Is the underlying changed on bitcoin from when
it was forty thousand or four thousand. Is it a
new bitcoin or is it the same old bitcoin it
was seven years ago?
Speaker 9 (30:26):
It's the same old bitcoin at the same old cold
It's the same old mining process that the same miners
us has just grown in concentration in mining that bitcoin
from seven years.
Speaker 3 (30:37):
Can you state that Gary Gensler allowed for the lift
in bitcoin by opening it up to people like Blackrock.
Speaker 9 (30:43):
Ah, yes, he did right, He opened up a different market.
But I think more than him, it's the current administration
because with you know, previous administration, especially with Gary Gensler
and SEC, we struggled in defining digital assets. But we're
finally have that point where the conversations have become very
easy to say that, look, this is a digital asset,
(31:06):
this is a digital security. This is just a coin
that just needs to exist to prove the blockchain. And
SEC and CFTC have come forward very welcome in in
understanding on all of these terminologies.
Speaker 2 (31:20):
When you lectured NYU, can you suggest that it's being
used less for criminal activity worldwide.
Speaker 9 (31:27):
Sure, so we have companies like TRM, Chain Analysis, Elliptic
that basically monitored these transactions, right number one. Number two
thing is when we're working with companies like canter or
you know, gold min Sex or Google of the world,
they would want funds like us to have such monitoring
infrastructure in place, which these companies provide. And yes, so
(31:50):
it is very much loose used very less for illicit
activity now because all of it is very traceable. And
I teach my students this. So I was like, guys, look,
if tomorrow you think you can hide one bitcoin to
you know, for an illicit purposes, this is how I'm
going to find you.
Speaker 5 (32:08):
So on the Bloomberg terminal for those folks on the
Bloomberg terminal, Bloomberg Intelligence covers a crypto space across the
board BI space c r yp crypto will get you
all the research and all the data you need there.
So I issue, what's the talk now in the crypto
space for people like Tom and I, it's kind of
bitcoin and we quote bitcoin h and.
Speaker 3 (32:30):
That's about it.
Speaker 5 (32:32):
How is this? How is the crypto space evolving? Where's
the next one to two to three years for crypto
broadly to find.
Speaker 9 (32:38):
So when you're covering bitcoin, right, you're basically covering the
entire representation of dital assets because bitcoin is our real representation.
Some people may disagree with that. But where three to
four ears, we're headed as stable coins. Right, you're standing
at Starbucks, you're transacting in your stable. You don't have
(32:59):
to do it with your credit card. We're seeing also
MasterCard working with their own crypto infra rail to basically
provide solutions. So there's no buybacks, right. One thing that
crypto provides is absolute finality in their transaction. There's not
going to be any buybacks from or there's not going
to be any cancelations.
Speaker 3 (33:18):
On credit cards.
Speaker 9 (33:19):
Right, So in star in Starbucks, right, you're like, hey,
here's five USDC or five US MasterCard, see you tomorrow.
That's where we're that's where we're headed.
Speaker 2 (33:31):
Don't be a strange. I got eighteen more questions, thank you.
So I used to carry with us with NYU where
she teaches on bitcoin, a whole resume of accomplish roots.
Speaker 1 (33:41):
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 3 (33:58):
Good morning everyone, pauls. I'm here getting through a July week.
Speaker 2 (34:03):
Lots of interesting cross currents here, and of course the
diversion of the newspapers up all night and at three
am to give us some choice marsels, Lisa Matella.
Speaker 3 (34:14):
What do you have?
Speaker 4 (34:14):
All Right?
Speaker 10 (34:15):
We've been talking a lot about the affordability crisis in
New York City, right, but now it's expanding to a
new area. And The New York Times points out animal
shelters because they say that a lot of New Yorkers
have been turning in their pets because they can't afford
to keep them. Right, they either lost their housing, or
maybe they have to move to a new place that
doesn't allow pets, or maybe they just can't afford to
feed them because you guys know, it's expensive, right to
(34:37):
have a pet. So what they're saying is that the
shelters don't have rooms, so a lot of them are
being turned away, a lot of the animals. There are
two new animal shelters under construction, The Bronx and Brooklyn,
but they're not opening until next year. But they're saying
this is just a growing problem. They have some pets
that are like in one cage together and they're just
running out of space. So that's the issue.
Speaker 3 (34:58):
Here is for COVID. Everybody a pet during COVIDS.
Speaker 10 (35:01):
Sense of course, I was this close to getting a
pet during COVID.
Speaker 3 (35:05):
Paul, would you like to talk about up all night
with pets?
Speaker 5 (35:08):
Yeah, up all night with a Seamus?
Speaker 3 (35:10):
Yeah, if we enjoyed the first vet Bill.
Speaker 5 (35:12):
Oh yeah, of course, of course. Yeahtrition exactly, exactly.
Speaker 10 (35:18):
Next, Okay, this is something that we were actually just
talking about in the last segment. For bitcoin, a new
sign that the biggest banks are endorsing this move to
digital assets into the mainstream, so sources are telling the
Financial Times JP Morgan Chase is exploring lending against clients
cryptocurrency holdings. And it's a big shift because Jamie Diamond
(35:39):
a few years ago he said bitcoin was a fraud.
So they say they could start lending directly against crypto
assets like bitcoin ethereum as soon as next year.
Speaker 6 (35:50):
Plans could change.
Speaker 10 (35:51):
JP Morgan didn't want to comment on this, but it's
out there and they're saying, you know Diamond's earlier comments
about bitcoin. The problem was is that it alienated some
possible clients who either made money through crypto or maybe
you know of different legislation because you talked about stable coins,
you know, in the last segment as well, So that
was another point of it. But it's already taken some steps.
(36:12):
Remember we talked about plans to begin lending against holdings
in crypto ETFs for JP Morgan, So this is just
another step in that. But we'll see, you know, what happens.
Speaker 9 (36:22):
Well.
Speaker 5 (36:22):
To me, the creation of the ETFs for crypto was
really a validating event for me, at least in just
in terms of global Wall Street, and it's embrasive crypto
because it just made it more accessible to individual investors.
So here's JP Morgan chase again. You mentioned Jamie Diamond,
arguably the highest profile I guess I'm not gonna say critic,
(36:44):
maybe a doubter. I don't know. It seems to be
changing his tone there.
Speaker 10 (36:48):
Oh, there's the you're welcome.
Speaker 3 (36:54):
Oh, Meredith thinks that's funny. In the control room, it
could just see one out of five awake in the
control thank you for.
Speaker 10 (37:03):
Cork is always on hand. Okay, I want to pull
an audible here and I'm going to that independent article
from earlier about cane sugar coke. Okay, so this is debate, right,
cane sugar versus corn syrup, because Coke is now saying
it wants to launch this new coke made with cane.
Speaker 7 (37:18):
Sugar this fall.
Speaker 10 (37:20):
So coke in the US, here's a difference. It's made
with high fruitoase corn syrup, right, which is made from cornstarch.
Like I was talking earlier, corn has been cheaper than
cane sugar. So that was the reason. Cane sugar is
made from sugar cane, you know, the long long you know, stiffs.
Speaker 1 (37:36):
The bamboo things.
Speaker 10 (37:37):
It's used as a sweetener and coke in most other countries.
So that's a difference between US and other countries.
Speaker 4 (37:42):
Which one is healthier. That's the debate.
Speaker 10 (37:45):
I mean, experts are saying corn syrup has a little
bit more fruit tooase than table sugar, but cane sugar
not necessarily healthier. I mean it's it's not the main
difference is like a molecular structure. Molecular structure, I'm.
Speaker 5 (37:57):
Not missed that different, but rasby Mexico. Isn't Mexican coke? Differently,
you go to like a Chipotle and they.
Speaker 10 (38:04):
Have like, well, they have the highproctose corns here. But
I don't know if it's a recipe.
Speaker 7 (38:08):
Okay, I'm learning, what do I know?
Speaker 10 (38:12):
But the main thing is that added sugar right, soda
has more than a daily recommended added sugar. If I'm
looking at a label, I'm always go to the added
sugars first to see how much extra is in there.
Speaker 7 (38:22):
So they're saying, so.
Speaker 5 (38:25):
I do I do?
Speaker 2 (38:26):
Floritative view of Lisa Matteo. Lisa Mateo in the newspapers,
Thank you so much.
Speaker 1 (38:32):
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 Easter and on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(38:53):
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):
We know the Secretary is listening to Secretary best in
after his interview on the movie.
Speaker 3 (00:30):
He's probably you know, tuning.
Speaker 2 (00:32):
In here, and he's tuning in for Adam Posen with
the Peterson Institute for International Economics, truly one of our
great economists, noticing that Philadelphia won last night.
Speaker 3 (00:43):
Okay, basis loaded, I's all that.
Speaker 2 (00:45):
Temphending, catchers interference. It's like, you know, it's like terrible
Adam posing with us this morning. Adam, my book of
the Summer's ken Roll, goffs our Dolly, your problem. I
read the footnotes on that much of a Nerd, and
back in the foot it's they mentioned Alwin Young of LS.
Adam Posen is mentioned as well, and sandwichs in there, Adam,
(01:08):
as you know, is Paul Krugman's nineteen ninety four jewel
on the myth of the Asian Miracle. If you're speaking
with Secretary of Treasury Bessett. Now is he meets with
the Chinese Monday in Stockholm, what is the myth of
China that he needs to know about?
Speaker 4 (01:27):
Thanks for having me, Tom, and of course I follow you.
So I saw you made Ken's book the Book of
the Summer good call. I think the myth that Alan
Young and Paul Krugman and others put out which was right,
which is, you don't get self perpetuating growth. You don't
get trend productivity, growth improvements with just through throwing more
(01:51):
capital that you have to actually innovate. And so this
has been an issue for China, not because they don't innovate,
the private sector does clearly, but that they keep deciding
to throw huge amounts of money into the state owned
enterprise sector, into industries of yesterday. It doesn't solve Secretary
(02:16):
Pscent in the US's issue with China because again there
is a fundamental competitiveness of a lot of the Chinese economy,
and then disputes about their treatment of intellectual property rights,
their treatment of dumping of subsidies. But the fundamental point
which my colleague Nic Clardy also in China, yeah, is
(02:41):
that there is still a huge divide between the public
sector and the private sector use of capital in China.
Speaker 2 (02:47):
Adam posen I was going to mention Nick Lardy, with
real authoritative decades of perspective on China, do we want
those jobs back?
Speaker 3 (02:54):
Does a Peterson Institute see.
Speaker 2 (02:56):
Any evidence that we want the quote unquote manufacturing jobs
of China back in America?
Speaker 4 (03:05):
Depends which ones you know talk about Krugman and Laura Tyson.
We're debating thirty five years ago, industrial policy right and
trade strategic so called strategic trade policy, and long through
the years. What's come out is you want to be
realistic about what jobs you can get, and you want
jobs that are relatively well paid for the level of
(03:29):
development your economies at and as people rightly made fun
of Secretary Lutnik talking about, we don't want us people
screwing little screws into the backs of iPhones. That's not
what the US should be doing. We don't really want
us people doing things that can easily be substituted for
by robots and mechanization. There are some manufacturing jobs that
(03:51):
would be nice to have, But as another colleague of mine,
Robert Lawrence, who you know well, has argued, there's a
real limit, given technology, given international markets, given declining demand
for in money terms, for manufactured goods, how many of
these manufacturing jobs you can create? And so that ultimately
(04:12):
is the crazy thing about all this. If you go
through turning the whole US economy upside down, you're going
to change the labor force by one one and a
half percent at most, which is a lot in human terms,
but is a very small amount in the economy. That
doesn't say we shouldn't worry about concentration risk and national
(04:34):
security risk. On the manufacturing side, that's a different argument.
But the jobs idea, there's just fundamental limits. You're not
going to create enough good jobs as they're called through
this kind of policy.
Speaker 5 (04:48):
Adam, what do you make of the US dollar here?
It's still down nine ten percent versus it's high from
earlier this year when most risk assets, whether you look
at the S and P five hundred, they bounce back
in are setting new heis what's going on with the
US dollar?
Speaker 4 (05:01):
In your opinion, you're right to point out the divergence,
but I think there's a reasonably clear explanation. So as
I know you wore ware Paul, the TIC data, the
Treasury International or whatever it's called. Data shows that there's
been big inflows into the US. What seems to be
happening is a lot of long money managers, including sovereign
(05:25):
wealth funds, including certain bank and government reserve managers, but
also pench of funds. Insurance companies are smartly repricing risk
on the US, both because the US is providing less
credible insurance than it used to in various ways, and
because the fiscal path is now noticeably worse, and so
(05:47):
they're hedging. They're paying for hedges on the dollar in
a way that they rarely have for the last twenty
thirty years, and that's more easily expressed through the currency
markets than through through equities or bonds. And so to me,
we're seeing a genuine move against the dollar on fundamentals,
(06:10):
and we're seeing that in as many people have documented,
including my Colleymoriozeld, including Ellen Ray at London Business School,
that we got this and you've spoken about we've got
this now kind of em dynamic. When bad news hits
in the US, intra day, intraweek, interest rates go up
and dollar goes down, as opposed to usually for the
(06:32):
last twenty thirty years, when bad news hits, interest rates
go up and dollar goes up because there's flight to
the US. So there isn't a contradiction. There is an
expression of non zero risk on US assets that has
to be hedged, and that's showing up in dollars in currency.
Speaker 5 (06:53):
Excuse me, Is there a risk that the dollar loses
this position as reserve currency in the global Me?
Speaker 4 (07:01):
No, but I think dollar loses its centrality. So let
me parse the words carefully. Reserve currency status doesn't have
to be only one. The historian Berry eichen Green has
documented this. Mark Vantro and others have documented this. It
basically the attribute of reserve currency is that you can
issue your public debt in your own currency, and secondarily
(07:24):
that at least some of the time when there's a panic,
people come to it. That latter part, as I just said,
is we can take some But US is going to
continue to be able to issue debt in its own
currency at higher interest rates. But it will be able
to But I and Maury and Marcus Brennermeier and or
given a bunch of US are talking about decentering of
(07:44):
the dollar, that the dollar is being massively overweight, and
reserve portfolios in transactions, in payment systems, in currency pegs.
All of that I think is potentially starting to be unwhound.
I don't think it's it's all gonna go away by
any means, but I do think there is a meaningful
shift with.
Speaker 2 (08:04):
It's Adam Posen of the Peterson Institute in Washington, and
we welcome all of you on your commute across the
nation this morning. Good Morning ninety nine one FM in Washington,
Nathan Hager Radio ninety two nine in Boston and Brookline,
and of course Bloomberg eleventh three to zero here in
New York on YouTube. It is a digital experiment growing
(08:24):
each and every day. The best way is to subscribe
to Bloomberg podcast. Anticipated is September nineteenth of this autumn,
where there will be a wonderful, I guess, virtual moment
for Adam Posen at the Peterson Institute with Jason Furman
and Kenneth Rogueoff. And what's so important about this It's
(08:46):
an honor of Richard and Cooper who was at Harvard
for years and synthesized our economics together. Adam Posen get
out front of the September nineteenth date. How do we
synthesize the American turboil now into twenty twenty six.
Speaker 4 (09:05):
Thank you for mentioning our third annual Richard and Cooper
Memorial Lecture, which his family has paid for at the Institute,
and we're very proud to have Ken Rogoff being this
year's lecture in Jason Furman, his Harvard colleague chair to
synthesize it, Tom, I have an article forthcoming at Foreign Affairs,
which I know you read, talking about the fact that
(09:28):
the change in the regime from the Trump administration is
very real in the sense building what I was just
saying with the dollar, in the sense that the Trump
administration is not just renegotiating the pricing of the public
goods that it provides the rest of the world. It
(09:50):
is fundamentally altering the credibility of the promises, the reliability,
the nature of the relationship that the US has economically
with other countries. And as a result, as we just
spoke about repricing of risk on dollar assets, including treasuries,
(10:13):
I think that a bunch of countries, a bunch of companies,
a bunch of investors are reallocating. And you mentioned Dick
Cooper and the book that I first knew about from
Dick Cooper was his nineteen sixty eight book The Economics
of Interdependence that ahead of everybody else, He said, Look,
(10:33):
the US has to reckon with the fact that other
economies are interdependent with us. They're dependent on us, We're
dependent on them, and we have to figure out how
to balance that and work that. And the Trump administration,
as far as I can tell from all their policies
(10:55):
since retaking office, is basically saying, wherever we're dominant in
an immediate sense, where we're less dependent than they are,
we will try to extract as much as possible.
Speaker 2 (11:09):
Time And because of time, this is so important what
we're talking about here, folks beyond Trump and I go
to Speaker Secretary Lutnik talking yesterday the certitude of a
unilateral power of America. Do you think we get back
to traditional American interdependency after Trump or is this a
(11:31):
one off and permanent change for generations.
Speaker 4 (11:36):
I think it's somewhere in between. I think, just as
with the alliance relationships in Europe, as Koreyshaki has spoken about,
that there are some fundamental changes tearing up of trust
that will take a generation rebuild. But I also think
that this set of policies is going to blow up,
unfortunately for the US, over the next few years. Whether
(11:59):
it's two years or six years, I unfortunately can't say,
but it's going to blow up. And presumably at that point,
just as after Herbert Hoover and Andrew Mellon in the thirties,
there was a reckoning. I hate the combination of foreign
and economic policies that are being pursued. I use the
(12:21):
term hate because I think it combines bad policy making
bad impact with bad values. And I am hopeful, just
as the US found its way in the forties and
fifties to a more constructive engagement with the rest of
the world, a more realistic in its own self interest frankly,
(12:41):
that the US will do so again. But I'm also
advocating and hoping and engaging that the rest of the
world can create and maintain things that without the US
and China real quickly.
Speaker 5 (12:57):
So Adam, just to put a bow and that is international,
at least for the near term. Globalization is that over.
Speaker 4 (13:05):
No, Paul, I think it's corroded. I think the US
aspects of globalization are definitely in retreat, but you can
see osion and CPTPP, the various arrangements in Asia deepening
and expanding. You can see the EU stepping up, not
as much as perhaps the moment calls for, but much
(13:25):
more than in the past, and integrating slightly more. You
can see Brazil and India and Turkey the major emerging markets,
and Indonesia pursuing again a mix of good and bad policies,
but still fundamentally pro globalization. The world goes on, but
it is a more rugged world after the seismic shock
(13:48):
from Trump. It is a world where the roads are
less good and some of it has to be rebuilt.
Speaker 2 (13:53):
Adam Post and thank you so much, greatly, greatly, I
appreciate it, anticipating his effort for four and airs coming
out in the coming weeks.
Speaker 1 (14:08):
You're listening to the Bloomberg Surveillance Podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch US live on YouTube.
Speaker 3 (14:20):
Lebby Cantrell is.
Speaker 2 (14:22):
With PIMCO and it's looking at Washington policy.
Speaker 3 (14:26):
Le mey uh. There's a point.
Speaker 2 (14:28):
I remember a book of the summer ten years ago
was a one volume on John Hay it was absolutely
superb and before air conditioning, it was how Washington came
to a complete total halt in July.
Speaker 3 (14:43):
Is there a summerness to your Washington d C.
Speaker 6 (14:47):
I mean there typically is. I think we all gotta
wait with baited breath for usually for the August recess.
You know, Tom, though, I think that this president has
proved that, regardless of Congress is in session or not,
there are still many headlines and subsequent market reactions to
to those headlines in Washington, regardless of Congress is in
(15:09):
So I'm not sure it will make that much of
a difference this year, But usually it is a time
where people do go on vacation and and enjoy the
restpite before what usually is a busy fall in Congress, Can.
Speaker 5 (15:20):
Fed Chairman J. Palace, You're going to be able to
enjoy the rest of this summer into the fall here.
How do you view that whole process, that issue?
Speaker 6 (15:27):
Yeah, I mean it's you know, I think you know.
Our view, I think, very much like Stephanie, is that
that that Fed chair Palell is going to stay the course.
We do not think that it is likely that he
either resigns or that President Trump actually fires him for
a variety of reasons, most of which it is self
defeating for the president. We do not think it's the
lower interest rates. We think it all can make it
(15:48):
much harder for him to confirm basically anybody that he wants,
particularly more dubbish, a dubbish person. So I think that he,
you know, J. Powell, probably will will not be resty
as much as he would want to in August. But
again I think we agree with him with Stephanie is
not that he's not going anywhere and he will stay
the course.
Speaker 2 (16:08):
Libby synthesize your work on political economics and the politics
at Washington into.
Speaker 3 (16:13):
The world of PIMCOH.
Speaker 2 (16:15):
We're hearing in the zeitgeist a more constructive tone, as
we just heard from his Roth of Wolf research, a
more constructive summer, a more constructive Q three, OMG, we're
going to survive tariffs. Fold that into the bond market
in what yield would do? Does that get us back
on a disinflationary vector of low yields or do we
(16:39):
have stimulus that gives us stable yields or higher yields?
Speaker 6 (16:45):
Yeah?
Speaker 3 (16:46):
We think.
Speaker 6 (16:46):
I mean, we've been saying now for about a year
that our view has been that you'll most likely get
a steeper curve, whether that is sort of a bear
steepening or a bull steepening, you can basically get both
right where you have more term pre at the long
end of the curve, as investors like pim Go require
more yield to invest in longer term paper, but at
(17:08):
the same time you also expect the FED to likely
cut and that is our view. We do think that
you may get more term premium at the end as
folks do get increasingly concerned about the deficit situation about
potentially the independence of the FED. But at the same
time that the economy is accelerating and you know, you
may see a little bit of stimulus from the tax bill.
(17:30):
I'm not sure that's really been sufficiently reported, just in
terms of some of the retroactive tax provisions that were
retroactive to the beginning of twenty twenty five. That means
just the bottom line here is that consumers will actually
be getting some nice tax refunds in the beginning of
next year, but also businesses will be able to take
advantage as some of these new business tax provisions starting
(17:51):
kind of you know, in the fall. Most likely, so
you could see some you know, marginal physical stimulus. We're
penciling in about half a point over the next twelve
months from the tax bill. But that said that the
tariffs are still in place, and we continue to believe,
and maybe we're in the minority here, that the President
is not you know, tacoing if he will on tariffs.
(18:13):
He really believes this. He believes this is an opportunity
to really remake the global trading order, and I think
it would be sort of foolish, honestly to not take
him seriously that higher tariffs are likely coming. Regardless though, Tom,
this is important is that the tarifrad is already high.
You know, we're we're assuming that the tariff rate is
about thirteen fourteen percent, and again we'll likely go high
(18:37):
even if you don't see these reciprocal tariffs going on
August first. I, Paul.
Speaker 3 (18:40):
I can't get my head around that. I'm still frank.
I've heard thirteen, I've heard fifteen, give me seven other numbers.
I know we are so far from three.
Speaker 5 (18:51):
So far from three. And the question obviously is how
much will corporate take it in their margin versus passing
along to consumers.
Speaker 7 (18:58):
So Libby.
Speaker 5 (18:58):
I also want to look a small page forward here
to September. When our esteemed Congress returns in September. They
got to pass some legislation to keep the government open,
don't they Yes.
Speaker 6 (19:12):
As a reminder, in the tax bill, which I think
we all welcomed in the bond market, they did address
the debt ceiling. So the debt ceiling is usually that
that is a you know, because they're a big crisis,
or at least momentarily crisis for the bond market. We're
not going to see that the debt ceiling has now
been increased, likely to be on twenty twenty eight, if
not even, or twenty twenty seven if not further. But
(19:34):
but we do still need Congress to fund the government
to avert a shutdown deadline to September thirtieth. They haven't
made a lot of progress. We could see a government shutdown.
I'm not sure if it's a real market event, but
clearly if the market is already feeling kind of if
they're already on edge, or if they will be on
edge in September, this could sort of exascerbate that one.
Speaker 2 (19:54):
If I got a note here, not a hate you know,
I do get the hate man Michael Bargets all the
love notes, but Lebbie Cantrell is the basic tone of
the American zeitgeist that we're prospering in a prosperous America
and that with all this legislation, all of the administration's work,
(20:15):
all of our work, we're leaving behind a huge part
of America. Is that the backstory of this twenty twenty five.
Speaker 6 (20:25):
I'm not exactly sure what you mean by but we're.
Speaker 3 (20:28):
We're leaving behind.
Speaker 2 (20:30):
I'm getting notes from people saying, all your fancy people,
all your fancy guests, are talking about in America that's employed,
prosperous in the stock market, whatever, in the bond market
with Pimco funds. The fact is we're leaving a whole
hunk of America behind, right.
Speaker 6 (20:49):
You know, I think that's absolutely right, And I mean,
this is part of the reason why I think the
majority of Americans elected President Trump is that they did
feel like the sort of the establishment that the elites,
the Bloomberg elites, if you will, Tom, we're, you know,
we're leaving the kind of the working person behind. I'm
not sure if those folks feel like this that Trump
(21:11):
administration elites yet yet have addressed some of those concerns,
particularly around cost of living. I mean these are all,
you know, kitchen table issues. These are still are the
most important for voters. And I'm not that that doesn't
seem to have gone away if you just look at
least it's for the pulling. Take that with a great
self n I see.
Speaker 2 (21:28):
Butt Lebby, Thank you so much. Lett me cantrill with
pimcom with this Morning.
Speaker 1 (21:32):
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 Up. You can also listen
live on Amazon Alexa from our flagship New York station.
Just say Alexa play Bloomberg eleven thirty.
Speaker 3 (21:49):
It is a single sentence. At the end of his report,
Ian White is with Huntington Bank.
Speaker 2 (21:54):
With a perspective difference in three zip codes in Manhattan,
the Southeast is out performing northern states for total spending growth,
partly reflecting a growing younger population.
Speaker 3 (22:09):
Give us a Huntington Bank anecdote. How the ute from
the northeast are going south?
Speaker 8 (22:17):
I mean, look at Charlotte, I'm based there. You can
see tons of New York bankers ending up there having kids.
It's huge banking center right now. And we're seeing across
the Southeast and Texas, of course, just remarkable growth. That's
part of why you know, we made an acquisition in
Veritex and Dallas. Leaning into the demographic trends, Dallas blows
(22:39):
my mind numbers wise. If you look at the census
data from the estimates for population since twenty twenty through
twenty four, Dallas added about six hundred and seventy thousand
people the number so Texas added the most people, Florida
the second most. North Carolina was third in terms of
population growth. North Carolina only added five hundred and ninety
thousand people, So Dallas added Washington, d C.
Speaker 3 (23:01):
That's great. I love that Dallas head in Washington, d C.
It's too good to be true. What's the worry? What's
the constraint on this great migration?
Speaker 8 (23:11):
Definitely, cost is becoming more of an issue. You look
at housing costs in a lot of these cities that
were pretty affordable, you've seen that really go up. Now
in recent months, we've seen a bit of a pullback
and home prices there, especially in desirable areas in near
core you have run up where the affordability gap isn't
quite as strong as it once was, so we are
(23:31):
a bit concerned about that. For somewhere like the Carolinas,
where we're growing organically. We've at Hudntington, we've recently started
opening branches and we open commercial commercial offices in all
six major metro areas across both Carolinas each What's interesting
there is every metro almost has a different economic model,
and so you have probably six distinct economic models you
(23:53):
can look across the six big metro areas there, so
each one has a different thing driving its growth, but
it is generally, you know, business friendly climate. People want
to live there. And the reality is companies right now,
in an environment where labor force isn't growing, the twenty
five to fifty four year old population is basically flat
in the United States, especially with lower immigration, companies are
(24:14):
going to follow workers and they're following where they want
to live, and Texas continues to attract them and just
unbelievable numbers, and the Carolinas are also doing very well
as well.
Speaker 5 (24:25):
All right, let's step back, what's your view overall of
just kind of this US coonvy. I don't know if
you lead with the labor market, lead with the consumer.
I mean, we know everything's great then in the Carolinas,
in Texas, we get that It's been that way actually
my entire career, quite frankly, broader speaking, how are you
guys thinking about things? What are you hearing from your clients?
Speaker 8 (24:44):
We see it as clients still see a somewhat conservative
consumer who's not making huge purchases. They're a little hesitant
on debt finance purchases. If you talk about you know,
we have a large business in RV plan lending, boats, marine, jetskis,
all those things.
Speaker 7 (25:03):
Yeah, we do Vesta scooters. Yeah, so you know se
do or something like that.
Speaker 8 (25:09):
We'll do a lot of a lot of their dealers
We have relationships there where we do a lot of
the dealerships. And you still see that consumer whose debt
financed is a little hesitant. They're that lower end product.
The higher end product, the consumer who's you know, selling
equity near retirement. They may have had that conversation, you know,
back in December with their advisor where they have that
annual review and they say, you know, how much money
(25:29):
do you want to do?
Speaker 7 (25:29):
You want to die with you know, have some fun
with it, enjoy it.
Speaker 8 (25:32):
You're doing pretty well, and so we still see that
that consumer I think is the base of the US
economy right now and really what's driving growth. You know,
they're the ones who refinanced in twenty one. They're the
ones who inflation hasn't affected them very much.
Speaker 3 (25:46):
So if Michael Barr finances his spark tricks se do
ye at nine ninety nine dollars, you can get financing
from you.
Speaker 8 (25:57):
It's more we've probably financed his dealer is where now
we can do the financing on this too.
Speaker 7 (26:03):
But his dealer's floor plan, his floor plan facility.
Speaker 8 (26:06):
Yeah, we probably We have a relationship with Bombardier recreation products.
Speaker 5 (26:10):
You what are you hearing from your clients in the
Midwest where hunting started. What are they telling.
Speaker 6 (26:18):
You these days?
Speaker 5 (26:19):
Again, we know the Southeast is kind of booming, but
you're you guys are hunting at Columbus, Ohio, big Midwest
presence historically.
Speaker 7 (26:25):
What are they telling you, I'd say a couple a
couple of things.
Speaker 8 (26:28):
One definitely, trying to pull back the supply chain to
the United States is a real thing that's happening, and
It really depends on the industry whether they think it's
going to happen. You know, I talked to a company
and building products and they just said, look, the entire
supply chain for our entire industry, soup to knots is
in one province in China, and we just don't know
if we can move it at all. So we're going
to have to deal with the tariffs and figure out
(26:50):
ways just to manage.
Speaker 2 (26:50):
It'll be quickly here. So timeline do you have where
we rationalize one province in China?
Speaker 7 (26:59):
I don't know.
Speaker 8 (27:00):
I think it really depends product to product.
Speaker 7 (27:01):
Autos it's definitely coming back.
Speaker 8 (27:03):
There's definitely moves to get more parts made here, more
things made here. We're hearing that. In terms of the Midwest,
I also think there's a little bit of a growth
split where we're seeing better data for say, anything.
Speaker 7 (27:16):
South of the Great Lakes. So in Indianapolis.
Speaker 8 (27:18):
Indianapolis, if you look at their job growth data, it's
basically been a sat Sun belt market since twenty twenty.
Columbus is doing a bit better, Cincinnati's doing a bit better.
So you kind of have that strength in the southern
half of our footprint that you're a little stronger overall, though.
I also, you know, we probably have seen a little
stronger consumer spending growth in the Southeast and the South
(27:42):
when you look at the real time spending data.
Speaker 3 (27:44):
In one thank you so much. With huntingson bank there
a view to the southeast.
Speaker 1 (27:54):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Karplay 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 (28:09):
In honor of this bitcoin discussion, I went back to
where the trend happened in bitcoin twenty fifteen.
Speaker 3 (28:16):
And Paul I did a log linear extrapolation of bitdog
and I can assure you in the late summer of
twenty twenty eight, bitcoin will be worth one million dollars. Okay,
pretty bell coin. So there you go, with the velocity
of the lift in.
Speaker 5 (28:30):
Bitcoin, Bitcoin sitting right here at one hundred and nineteen
thousand dollars even just an extraordinary run. Here, Aysha Kiani joins,
and she's a COO of M and C group. Also
over there at a professor at NYU Little College downtown
Manhattan are issha. What is the theme around crypto these days?
(28:52):
Is it the fact that we have an administration now
that seems to be embracing crypto broadly defined? Is that
kind of the main narration?
Speaker 9 (29:00):
I think the main narrative is that there's no stopping
us anymore. Right, So I know where we have basically
been unleashed, and so number one driving forces obviously the
ETFs inflows, right, three point one in bitcoin three point
four or five in ethereum billion, just in like last week.
Speaker 6 (29:21):
Right.
Speaker 9 (29:21):
The other thing is that the pro Legislative Action on
Genius Bill, which is the stable Coin Act, Right, So.
Speaker 5 (29:30):
What does that act say? What does it do?
Speaker 9 (29:32):
The Act sss that if you're a bank or if
you're a company, you are authorized to create your own
stable coin backed by the US dollar. Okay, so if
you're going to create ten stable coins, you have to
have ten dollars in your bank.
Speaker 5 (29:48):
That seems like something that even a Jamie Diamond could
get behind.
Speaker 9 (29:53):
And he has been getting behind. City Bank has been
getting behind. We are seeing a lot of action on
the banking side where every bank is either sorry.
Speaker 3 (30:06):
No, no, I don't mean to grow up.
Speaker 9 (30:07):
I'm listening so basically every bank is very much interested
in coming up with their own stable coin.
Speaker 2 (30:15):
What's the Is the underlying changed on bitcoin from when
it was forty thousand or four thousand. Is it a
new bitcoin or is it the same old bitcoin it
was seven years ago?
Speaker 9 (30:26):
It's the same old bitcoin at the same old cold
It's the same old mining process that the same miners
us has just grown in concentration in mining that bitcoin
from seven years.
Speaker 3 (30:37):
Can you state that Gary Gensler allowed for the lift
in bitcoin by opening it up to people like Blackrock.
Speaker 9 (30:43):
Ah, yes, he did right, He opened up a different market.
But I think more than him, it's the current administration
because with you know, previous administration, especially with Gary Gensler
and SEC, we struggled in defining digital assets. But we're
finally have that point where the conversations have become very
easy to say that, look, this is a digital asset,
(31:06):
this is a digital security. This is just a coin
that just needs to exist to prove the blockchain. And
SEC and CFTC have come forward very welcome in in
understanding on all of these terminologies.
Speaker 2 (31:20):
When you lectured NYU, can you suggest that it's being
used less for criminal activity worldwide.
Speaker 9 (31:27):
Sure, so we have companies like TRM, Chain Analysis, Elliptic
that basically monitored these transactions, right number one. Number two
thing is when we're working with companies like canter or
you know, gold min Sex or Google of the world,
they would want funds like us to have such monitoring
infrastructure in place, which these companies provide. And yes, so
(31:50):
it is very much loose used very less for illicit
activity now because all of it is very traceable. And
I teach my students this. So I was like, guys, look,
if tomorrow you think you can hide one bitcoin to
you know, for an illicit purposes, this is how I'm
going to find you.
Speaker 5 (32:08):
So on the Bloomberg terminal for those folks on the
Bloomberg terminal, Bloomberg Intelligence covers a crypto space across the
board BI space c r yp crypto will get you
all the research and all the data you need there.
So I issue, what's the talk now in the crypto
space for people like Tom and I, it's kind of
bitcoin and we quote bitcoin h and.
Speaker 3 (32:30):
That's about it.
Speaker 5 (32:32):
How is this? How is the crypto space evolving? Where's
the next one to two to three years for crypto
broadly to find.
Speaker 9 (32:38):
So when you're covering bitcoin, right, you're basically covering the
entire representation of dital assets because bitcoin is our real representation.
Some people may disagree with that. But where three to
four ears, we're headed as stable coins. Right, you're standing
at Starbucks, you're transacting in your stable. You don't have
(32:59):
to do it with your credit card. We're seeing also
MasterCard working with their own crypto infra rail to basically
provide solutions. So there's no buybacks, right. One thing that
crypto provides is absolute finality in their transaction. There's not
going to be any buybacks from or there's not going
to be any cancelations.
Speaker 3 (33:18):
On credit cards.
Speaker 9 (33:19):
Right, So in star in Starbucks, right, you're like, hey,
here's five USDC or five US MasterCard, see you tomorrow.
That's where we're that's where we're headed.
Speaker 2 (33:31):
Don't be a strange. I got eighteen more questions, thank you.
So I used to carry with us with NYU where
she teaches on bitcoin, a whole resume of accomplish roots.
Speaker 1 (33:41):
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 3 (33:58):
Good morning everyone, pauls. I'm here getting through a July week.
Speaker 2 (34:03):
Lots of interesting cross currents here, and of course the
diversion of the newspapers up all night and at three
am to give us some choice marsels, Lisa Matella.
Speaker 3 (34:14):
What do you have?
Speaker 4 (34:14):
All Right?
Speaker 10 (34:15):
We've been talking a lot about the affordability crisis in
New York City, right, but now it's expanding to a
new area. And The New York Times points out animal
shelters because they say that a lot of New Yorkers
have been turning in their pets because they can't afford
to keep them. Right, they either lost their housing, or
maybe they have to move to a new place that
doesn't allow pets, or maybe they just can't afford to
feed them because you guys know, it's expensive, right to
(34:37):
have a pet. So what they're saying is that the
shelters don't have rooms, so a lot of them are
being turned away, a lot of the animals. There are
two new animal shelters under construction, The Bronx and Brooklyn,
but they're not opening until next year. But they're saying
this is just a growing problem. They have some pets
that are like in one cage together and they're just
running out of space. So that's the issue.
Speaker 3 (34:58):
Here is for COVID. Everybody a pet during COVIDS.
Speaker 10 (35:01):
Sense of course, I was this close to getting a
pet during COVID.
Speaker 3 (35:05):
Paul, would you like to talk about up all night
with pets?
Speaker 5 (35:08):
Yeah, up all night with a Seamus?
Speaker 3 (35:10):
Yeah, if we enjoyed the first vet Bill.
Speaker 5 (35:12):
Oh yeah, of course, of course. Yeahtrition exactly, exactly.
Speaker 10 (35:18):
Next, Okay, this is something that we were actually just
talking about in the last segment. For bitcoin, a new
sign that the biggest banks are endorsing this move to
digital assets into the mainstream, so sources are telling the
Financial Times JP Morgan Chase is exploring lending against clients
cryptocurrency holdings. And it's a big shift because Jamie Diamond
(35:39):
a few years ago he said bitcoin was a fraud.
So they say they could start lending directly against crypto
assets like bitcoin ethereum as soon as next year.
Speaker 6 (35:50):
Plans could change.
Speaker 10 (35:51):
JP Morgan didn't want to comment on this, but it's
out there and they're saying, you know Diamond's earlier comments
about bitcoin. The problem was is that it alienated some
possible clients who either made money through crypto or maybe
you know of different legislation because you talked about stable coins,
you know, in the last segment as well, So that
was another point of it. But it's already taken some steps.
(36:12):
Remember we talked about plans to begin lending against holdings
in crypto ETFs for JP Morgan, So this is just
another step in that. But we'll see, you know, what happens.
Speaker 9 (36:22):
Well.
Speaker 5 (36:22):
To me, the creation of the ETFs for crypto was
really a validating event for me, at least in just
in terms of global Wall Street, and it's embrasive crypto
because it just made it more accessible to individual investors.
So here's JP Morgan chase again. You mentioned Jamie Diamond,
arguably the highest profile I guess I'm not gonna say critic,
(36:44):
maybe a doubter. I don't know. It seems to be
changing his tone there.
Speaker 10 (36:48):
Oh, there's the you're welcome.
Speaker 3 (36:54):
Oh, Meredith thinks that's funny. In the control room, it
could just see one out of five awake in the
control thank you for.
Speaker 10 (37:03):
Cork is always on hand. Okay, I want to pull
an audible here and I'm going to that independent article
from earlier about cane sugar coke. Okay, so this is debate, right,
cane sugar versus corn syrup, because Coke is now saying
it wants to launch this new coke made with cane.
Speaker 7 (37:18):
Sugar this fall.
Speaker 10 (37:20):
So coke in the US, here's a difference. It's made
with high fruitoase corn syrup, right, which is made from cornstarch.
Like I was talking earlier, corn has been cheaper than
cane sugar. So that was the reason. Cane sugar is
made from sugar cane, you know, the long long you know, stiffs.
Speaker 1 (37:36):
The bamboo things.
Speaker 10 (37:37):
It's used as a sweetener and coke in most other countries.
So that's a difference between US and other countries.
Speaker 4 (37:42):
Which one is healthier. That's the debate.
Speaker 10 (37:45):
I mean, experts are saying corn syrup has a little
bit more fruit tooase than table sugar, but cane sugar
not necessarily healthier. I mean it's it's not the main
difference is like a molecular structure. Molecular structure, I'm.
Speaker 5 (37:57):
Not missed that different, but rasby Mexico. Isn't Mexican coke? Differently,
you go to like a Chipotle and they.
Speaker 10 (38:04):
Have like, well, they have the highproctose corns here. But
I don't know if it's a recipe.
Speaker 7 (38:08):
Okay, I'm learning, what do I know?
Speaker 10 (38:12):
But the main thing is that added sugar right, soda
has more than a daily recommended added sugar. If I'm
looking at a label, I'm always go to the added
sugars first to see how much extra is in there.
Speaker 7 (38:22):
So they're saying, so.
Speaker 5 (38:25):
I do I do?
Speaker 2 (38:26):
Floritative view of Lisa Matteo. Lisa Mateo in the newspapers,
Thank you so much.
Speaker 1 (38:32):
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 Easter and on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(38:53):
and always on the Bloomberg terminal
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