April 11, 2025 • 38 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul Sweeney April 11th, 2025
Featuring:
1) Jordan Rochester, Head: FICC Macro Strategy EMEA at Mizuho, on rapid de-dollarization as the trade war with China heats up. China is raising tariffs on all US goods from 84% to 125% starting April 12, in response to the US's latest tariffs. The escalating trade war has led to a decline in global financial markets, with S&P 500 futures and European stocks falling, and the dollar extending its decline.
2) Kathy Jones, Chief Fixed Income Strategist at Charles Schwab, joins to discuss the bond market's pushback this week and what it's signaling and President Trump pushes ahead with his trade war with China. Investors are flocking to bunds as a safe-haven asset after the US Treasuries' historically bad week, leaving German yields largely unchanged, while the rate on the US 10-year debt has surged more than 40 basis points.
3) Savita Subramanian, Head: US Equity & Quant Strategy at Bank of America, brings us into PPI and discusses the outlook for inflation and equities in the US amid a growing China trade war. The inflation slowdown reflected is yesterday's CPI showed a decline in energy costs, used vehicles, hotel stays, and airfares, with the cost of motor vehicle insurance also retreating. Some experts still warn that higher inflation may be coming due to tariffs, with the impact expected to be felt in the May CPI report.
4) Jennifer Lee, Senior Economist at BMO Capital Markets, joins to discuss why the Fed's breathing easier today, but why the market volatility isn't over yet. US-China trade tensions escalated, causing a slide in futures, the dollar, and oil, with investors rushing to assess the impact on companies and growth.
5) Erica Groshen, former Commissioner of the United States Bureau of Labor Statistics, on disruption in federal statistics, modernizing federal statistics, and preserving data integrity. A Labor Department report released in December showed the US Bureau of Labor Statistics needs to revamp its culture and improve how it disseminates key economic data.
See omnystudio.com/listener for privacy information.
Mark as Played
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):
Right now, joining us, Jordan Rochester with a wonderful set
of overnight notes.
Speaker 3 (00:32):
He's with FIC macro strategy, you know, with Miszuo. Jordan.
Speaker 2 (00:36):
Let's go a little walk as year right now as
Cam Dawston was talking about this trust series, so for
ten year, I'm looking at it out three standard deviations.
Speaker 3 (00:47):
It's been worse over the last four days.
Speaker 2 (00:50):
Where's the trip point for these liquidity trust series for you?
Speaker 3 (00:55):
Where we get to market chaos?
Speaker 4 (00:58):
I think that's the biggest question to it.
Speaker 5 (01:01):
Was one of my big key concerns earlier this week
was about dollar funding because the whole world was facing
such higher.
Speaker 4 (01:07):
Tariff rates for the US.
Speaker 5 (01:09):
What you're going to see is that exporters to the
US were no longer going to receive their dollar receipts,
and then dollar funding would become an issue. The only
good news that I can give you is that you
just had a record Q one imports in America and
so a lot of these exporters around the world will
be sitting on a dollar cash pile. That's a little
bit more healthier than usual. Now we've had this ninety
(01:31):
day reprieve at ten percent tariff rates. I do see
the flows of commerce still taking place between Europe and
the rest. But the problem is with China with these
extreme tariffs that we have. We've got one hundred and
forty five percent tariff rate on China. It's the largest,
one of the largest trading partners in the world with
the US, and so you're going to see a dollar
a quizy issue at some point unless we have are
(01:52):
climbed out.
Speaker 3 (01:53):
Jordan Rochester with this Missouri.
Speaker 2 (01:55):
We welcome all of you on your commute this morning
across the nation this Friday of Bloomberg's Veillance. Very much
market focus. We'll do a little bit of Washington and
certainly those announcements out of the White House will be
Key John Tucker with us for Lisa Matteo in this hour.
Damien sasaur In for Paul Sweeney with this wonderful emerging
(02:15):
market focus at Bloomberg Intelligence.
Speaker 3 (02:18):
Damien a question to mister Rochester.
Speaker 6 (02:20):
Yes, mister Rochester formerly fic Macro at Nomor and out
in the zoo. So really in a great place to
talk about China here. And look, everybody's blaming the thirty
year move on the basis on leverage, selling or buying
or whatever it is. But you know, I just got
to ask you. I'm getting a lot of questions about
China and what role it pad in these treasury swings.
I know you're well, not your colleagues, but your peers
over at SNBC are basically saying that China was involved
(02:41):
in that, and now City Group's getting, you know, getting
on board.
Speaker 3 (02:44):
What are your thoughts there?
Speaker 5 (02:46):
I could never say whether China is involved not. We
just don't have the data yet until at next the
end of the month for next month. That's the irritating
thing about data.
Speaker 4 (02:54):
It's slow.
Speaker 5 (02:54):
But what we can say is that if you're a
central bank and you're facing extreme currency pressures, it makes
sense to selling US treasuries to defend your currency. It's
been very smooth in dollar ramimbi and so that's kind
of possibly been behind it, I would add.
Speaker 6 (03:08):
So let me ask you this now that you know
the dollars declining in the face of all this very unusual.
Do you think Asian central banks have more scope to
cut rates here?
Speaker 4 (03:16):
I think the whole world does.
Speaker 5 (03:17):
This is going to be a huge growth shock to
the US, but a big growth shop to the rest
of the world. And what's going to happen is the
Chinese exports are no longer going to go to the
US at the same rate. We'll be looking for the
next consumer. Europe stands out to me, but parts of
Asia too. We'll see excess supply of Chinese goods hit
their markets and that's going to load the selling price.
Speaker 2 (03:40):
Jordan, Rochester within all the research capabilities of your shop,
do you people just look at the various supply chains
and almost frankly the demand chains.
Speaker 3 (03:50):
Where China belieguered by the White House, runs their products
through Vietnam, runs their product through Indonesia, runs their next
to Kazakhstan.
Speaker 4 (04:02):
Long term, that's probably what's going to happen. Short term.
Speaker 5 (04:05):
How quickly they can do it is difficult. For example,
Chinese exporters were discussing in an FT article just over
over the past few days they had set up in Jordan,
which has an FTA Jordan, the country not me an
FTA with the US, but Jordan as a result has
a twenty percent tariff rate. Now under these the sort
of expected levels of reciprocal and so even countries with
(04:27):
FDAs where China exporters had sort of hedged themselves by
moving into countries to do the final production part there
and sell on to the US that the plans scuffered.
If everybody has a ten percent taraf rate, it's really
hard to do the rerouting. But for Chinese exports at
one hundred and forty five percent, sure they will take
ten percent by rerouting, but it it takes time and
(04:47):
it's not going to happen in the next few weeks.
Speaker 2 (04:49):
I mean, Danian, we got to focus this down here
because we have Danian Sasar with us.
Speaker 3 (04:53):
The bottom line is Fuscheng is making.
Speaker 2 (04:56):
A lot of the golf heads for callaway, ping and tidiness.
Going to have to run that through Vietnam, Damien SASA
or hey to help improve your lousy game.
Speaker 6 (05:04):
I pay an awful lot for my probi one excess.
But here's what I have to ask Jordan. I mean, look,
we know that the China dumping is on the rest
of the world is going to happen where we know
transhipments are going to happen. We know Europe's the clear winner.
But here's my question. How will bilateral trade negotiations with
the US evolve? And here's what I'm thinking here. You
have active discussions going on right now with India, Japan,
South Korea. Are non tara variables going to play a
(05:25):
role here? I mean, are they going to start talking
about currency manipulation and start holding some of these Asian
economies you know to bear for that? I mean, how
do you how do you even begin to talk about
that and regulate that.
Speaker 5 (05:37):
I don't know about your experience with government officials, but
it never goes quickly, does it. Whenever your life involves
dealing with the government, it's quite difficult to get things
via email chains over the line. So I am skeptical
about how quickly you can get complete free trade agreements
in the next ninety days.
Speaker 4 (05:54):
What I can think that.
Speaker 5 (05:55):
A lot of these countries can do is buy themselves
more time extensions. Way, there's more time to deliberate. The
EUS offering zero for zero tariff rates, for example, but
the US is claiming that non tariff barriers are their issue.
Non tariff barriers requires regulation, changes, requires votes in parts,
it's a bit more difficult to do than just simple
(06:15):
tariff manipulation stories. And on the FX side, I do
agree Lessons made it clear several times informally and formally
about Japan, for example, having two weeks of an exchange
rate and the Bank Japan perhaps needing to hike rates
more so these will be a factor in the talks.
Speaker 2 (06:32):
I got John Tucker's thinking, long yen here to be
stronger again? Can you model out as you did the
other day, Jordan Rochester one for five yen down to
one thirty five? Dare I say, short term, given dollar malignancy,
that we get yen to a strong one thirty per dollar.
Speaker 4 (06:49):
Yeah.
Speaker 5 (06:50):
What's quite clear is we're having a d dollarization theme
play out in the market. The theme's gone from slow
to rapid in the past forty eight hours.
Speaker 4 (06:57):
A lot of that has.
Speaker 5 (06:58):
Been corporate demands as well that the market's been seeing,
pushing up the likes of euro dollar and dollien and
the yen stronger for the Japanese yen. I think that
we could have another five percent devaluation in the.
Speaker 4 (07:10):
Dollar from here.
Speaker 5 (07:10):
If we are truly pricing in the US, exceeptionism come
to an end. Once you have a ten percent trade
weighted fall in the dollar, typically that's when it bottoms
out and rebounds. So we're using the twenty eighteen the
COVID nineteen playbooks, and we've won another five percent at
least to go here. That gets dolly En quite close
to one thirty five and lower. That's the sort of
(07:30):
view I have for where we get to over.
Speaker 4 (07:32):
The next few months.
Speaker 5 (07:33):
And it was something I thought would happen next year.
So it's all happening very quickly.
Speaker 3 (07:37):
Jordan, Thank you so much. Jordan Rochester with us with Missoul.
Speaker 1 (07:41):
You're listening to the Bloomberg Surveillance Podcast. Catch us live
weekday afternoons from seven to ten am Eastern. Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch us live on YouTube.
Speaker 2 (07:54):
What does Kathy say at Schwab joining us now Kathy
Jones to straighten out our fixed income portfolio?
Speaker 3 (08:01):
Do people buy the dip in bonds?
Speaker 7 (08:06):
Yeah, I think you have to be careful, but I
think that is probably a very good idea. The question is,
are we at the yield level that's really attractive in
some parts of the market. I think we are. I
think in municipal bonds you're looking at, you know, tax
equivalent yields or a high earner in the eight nine
percent area, the high st equality. I think that that's
(08:29):
the place you start to nimble.
Speaker 2 (08:31):
Okay, But on the commercial break, John Tucker's over here
with robinhood Day trading in Nvidia. He's buying the dip.
When you buy the Kathy Jones dip? Are you buying duration?
Are you, like saying, extending out your maturity? Are you
what's the what's the math of buying the fixed income dip?
Speaker 7 (08:49):
Yeah, so right now we're still at benchmark, which is
consistent with the Bloomberg egg, and that's around six years
and we've been kind of hugging the benchmark for a
long time because of all the uncertainty. We feel like
you're still clipping a pretty good coupon of four and
a half upwards to five percent in high quality bonds.
That's a good base. We're not extending duration yet. We
(09:10):
have to wait and see how things play out, but
I think that will be a move that we make
probably some time later this year, but you know, high
credit quality. For We're we're really just focused on high
credit quality and making sure we have enough liquidity, not
going into instruments that they're ill liquid at this stage
of the game, trying to play it safe. But I
(09:32):
think the opportunities are starting to emerge.
Speaker 3 (09:34):
Jamien, is a dollar an a liquid instrument?
Speaker 6 (09:38):
Well, you know, Kathy, I have to agree with you.
Muni's mortgages as well. You know, I think you know
high quality mortgages. But you know what really stands out
in this move. Guess what acid class woke up within
fixed income credit and we saw spreads blow And now
I'm looking at IG and high yield, you know, down
two and a half three percent, you know, just since
the second of April. What are your thoughts on credit
markets going forward?
Speaker 7 (09:56):
Yeah, we're so a little bit cautious, although again we're
getting tempted. We have been and kind of on the
sidelines and credit for a while, just staying up in
credit quality because the spreads were so tight. It didn't
get paid for taking risk. But now you know, we're
starting to get paid for taking risk. The problem is,
I think the mix of policies we have right now
is so difficult to interpret or even come up with
(10:17):
an investment thesis that you can carry through the end
of the year, because it could change in the heartbeat.
That's where we're that's where we're having trouble. But I
do think as we get if those spreads blow out
some more, you know, we will start looking at more credit.
Speaker 6 (10:32):
We've also seen a massive steepening dare I say, in
US yield curve, not just the US, really global yield curves,
you know, And so you know when it talks, when
Tom asks about positioning along the yield curve, I'm just curious,
you know, I'm hearing a lot of people saying they
still want to be, you know, along the short end
of the curve, you know, as opposed to the long end.
I'm just curious to hear thoughts there.
Speaker 2 (10:48):
Yeah.
Speaker 7 (10:49):
No, I think that thesis makes sense because we are
anticipating rate cuts down the road, and if this continues,
I don't see how the FED holds off because you
see higher unemployment on the horizon. But I don't want
to just hug the short end and miss out on
grasping some of these yields for the long run, because
I do think we're going to get a slower economy.
I do think the FED will at some point have
(11:10):
to lower rate, and I want to capture some of that, right.
Speaker 2 (11:13):
I want to report, Damien Damiens stay there right now
the market moving futures are up like forty and they're
now at eleven.
Speaker 3 (11:20):
We actually had read in the screen for a bit
the Secretary.
Speaker 2 (11:23):
Of treasurer with Maria right now, maybe he can have
the same effect as James Diamond a few days ago.
Speaker 6 (11:28):
Damien Kathy US Treasury demanded this, you know, kind of
downtick really took a bit of a knock, and you know,
I'm just curious. You know, we know we've been transitioning
away from the FED, from US banks and foreigners, and
you know, what does this mean in your opinion to
term premium over time? I mean, are you thinking that
this steepening of the curve is structural, that it's going
to last for a long period.
Speaker 3 (11:46):
That's a really good pa.
Speaker 7 (11:47):
I do think it's going to last. Okay, term premium.
We actually came into this year calling at the year
of the term premium because we have to. We have
to incorporate now these risks that are out there, and
I do think we'll continue to see the term premium
move up, not just here but globally, but especially here
because this is the source of uncertainty.
Speaker 2 (12:08):
I got twenty more questions. We don't have time, Kathy Jones,
your trooper to come in today. I can't imagine what
the Kathy Jones calendar looks like at Charles Schwab today
Chief Fixed Income Strategists, and ye'll curve watcher at Charles Schwab.
Speaker 1 (12:22):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. You can also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa play Bloomberg eleven thirty.
Speaker 2 (12:38):
Within the span of this week, this historic week, it
is a good time to speak to Sevita Supermanian. She
is with the Bank of America, but far more than that,
delivers Berkeley mathematics, philosophy and massive dead head knowledge and.
Speaker 3 (12:54):
Joins us this morning here. She was definitive in making
esg adult for.
Speaker 2 (12:59):
All all of you that were screaming, stop the peace,
love and dope, just give me the math. Savina Supermanian
led the charge to a constructive ESG debate more than
a few years ago, where through she could joined us
at studio.
Speaker 3 (13:14):
Wonderful to have you here.
Speaker 2 (13:16):
I love what you do in your Bank of America report, which,
unlike most ego driven strategists, you actually listen to your
securities research. You actually pay attention to what's going on
in the trenches. Lorraine Hutchinson has a worst job at
Bank of America.
Speaker 3 (13:34):
She's got to figure out what Walmart's going to do
with China.
Speaker 2 (13:37):
I know, what does China do to the consumer and
that how does that fold into your world?
Speaker 8 (13:42):
Well, I mean, you know, Lorraine has been spot on
in calling out that a lot of these companies with
exposure to China actually started shifting sourcing out of China
into other regions of Asia as well as Mexico, you know,
other parts of globe as early as you know, twenty fifteen,
(14:02):
even before any of the tariff talk began.
Speaker 9 (14:05):
So, you know, I think that the idea that these.
Speaker 8 (14:08):
Companies are vulnerable to China alone is nice, is not
necessarily the case anymore. But closet China via you know, Vietnam, Mexico,
That's what worried us about the initial April second announcement.
Speaker 2 (14:24):
A few years ago, you were in high school. I
got a phone call in Singapore. Go over to Bank
of America.
Speaker 3 (14:30):
So I walk in.
Speaker 2 (14:30):
It's me and Ken Lewis having a conversation about Bank
of America and Asia. You guys have a heritage there,
you have a history there really like no one else.
So what's China do here? Damien's going to say they dedollarize.
Do you just assume China solves the problem without unilateral
negotiations with the White House bilateral?
Speaker 9 (14:52):
I should say, you know, that's TBD.
Speaker 8 (14:54):
I think that where we are now is where corporates
have to really think about how they're going to plan.
And that's the problem is that it's hard to plan
when you just don't know what the playing field looks like.
Speaker 4 (15:06):
You know.
Speaker 8 (15:06):
What I think is interesting, though, is that there's been
this knee jerk reaction to buy treasury bonds instead of
stocks as a safe haven. And I think that's exactly
wrong because if you look back on what happened in
prior periods of protectionism, prior periods of stagflation, whatever we're
heading into value stocks outperformed treasury bonds by a massive margin.
(15:30):
The last thing you want to be stuck in during
a stagflationary environment is long duration bonds. They have no options,
whereas stocks, to me, are the best place to be.
In an environment where you need those options, companies can
extend or shorten their duration. We saw this with Meta
and Google in twenty twenty three. They both initiated dividends
(15:54):
and transition from being just pure.
Speaker 9 (15:56):
Growth to value.
Speaker 8 (15:57):
I think this is a really interesting time to think
about value equities. Companies that are returning capital, like utilities,
even metals and mining, even you know, energy companies that
where the dividends are sacro SYNCD. I think those are
areas that you really want to think about.
Speaker 6 (16:12):
Sabina, I'd love to ask you whether you prefer Tarpent
station or American beauty, but we're not going to ask that.
An earning season, it's a great time to be alive.
And you know, I don't think it's going to be
you know, the earnings at all that moves markets. It's
going to be the words, the forward guidance around it.
What are you expecting here?
Speaker 9 (16:28):
Absolutely?
Speaker 8 (16:29):
And I think what's a little bit worrisome is that
we have a lot of companies shutting down guidance and
going dark, and that's never really good because the worst
you know, I think one of the reasons that we
were a bullish on US stocks is that they're the
most transparent, you know, equity market in the world. All
of these companies issue guidance, and now if they stop,
that's that's one you know, one more nick in the
(16:51):
America you know exceptionalism story. I think, you know, what
do we do with that that information vacuum? I mean,
what I think is interesting is that companies are already
thinking about how to navigate this period. And it could
be something like recasting your costs as IP or you know,
(17:12):
thinking about how to shift sourcing more creatively, how to price,
how to pass that price along to consumers, and a
lot of companies have the option to increase prices as
long as wages remain relatively healthy.
Speaker 2 (17:26):
With the Bank of America, Savita Supermanian with us, we
welcome all over your commute across Bank of America's nation
and of course on YouTube and particularly good evening in
the Pacific RIM YouTube subscribe to Bloomberg Podcast as CPI. Yesterday,
I got negative statistics for that business inflation PPI. I'm
not going to go into it other than to say
(17:47):
it does show a disinflationary tendency. Pretty much everything said,
futures go from up twenty to up twenty six. The
VIX comes in actually forty one point four or five.
Speaker 3 (17:59):
Let me say that.
Speaker 2 (18:00):
Blomberg surveillance and all of our economics. It's brought to
you by Commonwealth. Join over two thousand independent financial advisors.
They are taking control of their growth with advisor centric
support and future ready technologies.
Speaker 3 (18:14):
Grow on your.
Speaker 2 (18:15):
Own terms with a partner dedicated to your success. Go
to Commonwealth dot com to learn how.
Speaker 6 (18:21):
Damian Savida put on your options hat for me. With
all the uncertainty that's out there, implied boles have been
all over the map, surfaces or inverting skis or stapening.
What are your thoughts on buying and or underwriting equity
protection here?
Speaker 8 (18:33):
Yeah, I mean I think that protections already probably pretty
well uh sought after. Yeah, you know, I think there
is actually potentially more upside than downside risk to the
S and P five hundred And I know I sound
a little bit, you.
Speaker 9 (18:47):
Know, out of sync with everybody else.
Speaker 8 (18:50):
Here, but you know, again, I see this as a
market environment where you want to follow the money. The
money is not going into US Treasury bonds. There's a
buyers strike on US treasure rebonds. Where is the money
going to go? I think it's going to go into
inflation protected income. Think about retirees. Retirees right now own
this barbell I have to.
Speaker 9 (19:11):
Well, let's think about what we all own. We own
a barbelle of cash and tim stocks, right.
Speaker 8 (19:20):
I mean, if you look at Merrill lynch Our, you
know advisor data, four out of five of the top
ten holdings of retirees are tech companies. Their yield is
lower than the yield of the S and P five hundred.
This is the first time in history that we've seen
retirees not owning dividends.
Speaker 2 (19:36):
Quickly on this then, is apple of value stock as
you mentioned value before, Well, I mean.
Speaker 8 (19:41):
It's certainly a lot more value now than it was
a few months ago.
Speaker 3 (19:44):
Peas Templeton would say, shares are on sale.
Speaker 8 (19:47):
Yeah, I think that there is an idea there is
this notion that the dividends are relatively protected, payout ratios
are low for a lot of these companies. That's what
I would look at is, what's the payout ratio, what's
their dividend growth profile?
Speaker 9 (20:00):
What's management's focus on dividends?
Speaker 2 (20:02):
Handlers didn't want you to do this interview because they
know I'm going to get you in trouble.
Speaker 3 (20:06):
Okay, folks, here's the drill.
Speaker 2 (20:08):
Savida is so good at the spread market in math
that she's one of the few equity people out there.
And what do we do with our four oh one
k that could go into the office this afternoon with
Brian moynihan, And you're going to explain to Brian for
the larger Bank of America World the collapse two point
(20:30):
eight standard deviations off the log trend back to twenty
twenty three autumn of so for ten year yield. And
the answer is the underlining machinery of mister moynihan, a
guy building a building on Park Evan and a few
other people. The liquidity issue out there is really sport.
(20:51):
How do you explain to bank management the tension going
into this weekend?
Speaker 4 (20:57):
Oh?
Speaker 8 (20:57):
I think bank management is well aware and on top
of this, But I mean I would say that you know,
in environments like this, the trick is getting to the
other side.
Speaker 9 (21:08):
And who knows this.
Speaker 2 (21:09):
Is that how many heads a short term trust market?
Speaker 8 (21:13):
Well, I mean I think that you look for areas
that are short duration. Short duration is key in a
liquidity crisis, and that means you go for cash, short
duration bonds, stocks with high dividends. You know, some credit,
but not all credit. Credit markets might be healthier than
they have been in prior crises. I mean, you tell me, Tom,
but I think this crisis is so different from two
(21:35):
thousand and eight or nineteen ninety eight or ninety eight
or even the seventies, in that US companies have completely
de levered in terms of the larger ones. Right if
you think about banks, energy companies, all the old economy
companies that were hit in two thousand and eight have
become healthier, have really been preparing for this type of crisis.
(21:58):
So I think that's the good news is that within
the equity market, you've got a lot of companies with
solid balance sheets and you know, the ability to maintain dividends.
Speaker 6 (22:07):
Seviea. We're talking about retirees and we're talking about retirement
benefits here, and we're talking about equitable institute losses. Between
the four trading days between April third, and April eighth,
the twenty five top state local US pensions lost almost
two hundred billion dollars. Well, yeah, I mean they're calling you,
what do you say?
Speaker 9 (22:23):
You know why that that's happening.
Speaker 8 (22:26):
I think part of the reason is that everybody loaded
up on private equity, private credit and long bonds, interesting,
which are hardest hit during any sort of cost of
capital crisis. Think about all of these areas, They're going
to be whacked by higher interest rates. And I think
that's the problem, is that pension funds have supplanted all
of their active public equity exposure, yeah, with passive or
(22:50):
private equity. Interesting, and that's why the S and P
index itself is at risk. This is the most crowded
ticker in the world. Nobody owns stocks anymore, they own
the index.
Speaker 6 (22:59):
But let me ask you that. I mean, aren't private
credit funds allowed to mark their books like four times
a year, call it once a year when they get
the audit, right, So I mean, it's not really showing
up in it, you know what I mean? So that
four dat decline of two hundred billion, that might not
even be including the marks you're getting from private credit yet,
So it could be much more, is what you're saying exactly.
Speaker 9 (23:16):
That's why I like equities Again.
Speaker 8 (23:18):
They're marked to reality every millisecond of the day, and
I think that's a very valuable characteristic as well, beautifully.
Speaker 3 (23:25):
Explained by you and Damien better than I could do.
Speaker 2 (23:28):
Then where is the opportunity if passive is taken over?
I mean, as we get this from Eric Bell Chunas,
But Savita Supermanian, give me an opportunity looking out past
labor day?
Speaker 8 (23:41):
Yeah, by the average stock in the S and P,
by the equal weighted SMP put by large cat value,
by anything but the cap weighted index. Because that's the
area that I think has become bloated and potentially risky.
Speaker 3 (23:54):
Can you buy Europe?
Speaker 2 (23:55):
I mean if if i'm I mean, I mean, let's
be honest here, Damien, I mean, you know if I
got you one thirteen, Savina Romamian over Lewis Viewton, They're
on fifty seventh Street and fifth. They han't a loading up.
I mean, is europe an opportunity?
Speaker 9 (24:09):
I think Europe's an opportunity. I mean, i'm i'm.
Speaker 8 (24:11):
I was more optimistic on Europe when before the tariff
wars began because I think there's an opportunity for a
lot of really interesting cross border m and a where
US companies can buy cheaper growth in Europe than they
can in the US. So, you know, I think those
are areas that could catalyze Europe. I think Europe also
right now certainly looks a lot more attractive on a.
Speaker 9 (24:33):
Policy risk perspective.
Speaker 8 (24:35):
At least we know a little bit more about what's
going to happen there. But I still think Europe's dependence
on the US and the interdependence between all of these
regions is a risk that that may not be factored in.
Speaker 2 (24:47):
Call me if you talk to Brian moyne, Anne, we'd
love to know what you know, what you're talking about.
Savina Supermanian, thank you so much for.
Speaker 1 (25:00):
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 (25:15):
Jennifer Lee joins US Now Senior economist Jennifer to what
we heard from Damien sas our overwhelming law.
Speaker 3 (25:22):
Is a presumption of a growth slowdown. Where will real
GDP head?
Speaker 10 (25:28):
Good morning, and thank you very much for having me on. Yes, well,
right now, it looks like GDP is headed lower in
terms of growth. You know, we're not looking for a
recession in the US, but the risk of this continues
to run. It's just given obviously this escalating higher and
a higher terra form losing the track of all the
percentages right now, but it looks like, you know, we
(25:49):
are maxed out at one hundred and forty five percent
on one side, one hundred and twenty five percent on
the other side. So we'll see how this plays out.
But this is you know, obviously not going to use
for US consumers. You're going to be paying higher prices,
even though you know, we brought all the other countries
down to a baseline of ten percent tariff, but you know,
prices are heading higher and.
Speaker 11 (26:07):
This is what's going to hit the US consumer and
this is what's going to.
Speaker 2 (26:11):
Are you going to a negative statistic on real GDP
for this present quarter?
Speaker 11 (26:16):
No, we are not, no, not.
Speaker 10 (26:17):
We're still looking for growth, but slower, much slower growth.
And it's not just the consumer, by the way, it's
also business investment. And you know, even though a lot
of these uh you know, this this invitation we can
we say, to bring more investment into the US is helping,
we're stealing, you know, lots of money coming in now
in terms from different companies promising to build and to hire.
(26:40):
At the same time. You know, it's just very hard
to make any real strong with conviction investment decisions in
this sort of uncertain environment. So I think that's also
going to offset a lot of this incoming.
Speaker 11 (26:52):
Investment, Jennifer.
Speaker 6 (26:53):
As you know, overnight, Beijing raised their tariff on the
US to one twenty five percent, But the company statements
stood out for me. They said, we're not going to
raise anymore. You know why, because it doesn't matter. We're
not trading with them anymore. I mean, so in your models,
are you modeling zero trade between China and the US
on a four basis?
Speaker 10 (27:09):
Well, you know it, certainly it looks like we are
heading in that direction, but I can't see, you know,
I just can't see how that is going to happen,
just given how much reliance they are, there is on
both both countries on each other for all this trade.
So there's just going to have to be you know,
sometimes they're going to have to start talking at some point,
but right now, I'm just I'm very curious to see,
number one, what the reaction from White House is going
(27:30):
to be, and number two, what other tools are going
to be coming out of the toolbox to borrow with
the language from monetary policy makers about what else can
be used? If we are hitting that max of one
hundred and forty five one hundred and fine five percent,
what's next? So we're going to start talking about expert
restrictions on rare minerals for example, on you know, perhaps
treasury on the treasury holdings. I don't know what's next,
(27:52):
but you know, but if we're done with terrorists, there's well,
there's probably a lot of other things that they.
Speaker 6 (27:55):
Can use, Jennifer. Many are referring to the ninety day
window by Trump as him having blinked, right, I mean,
he saw the devil and he basically blinked. And I'm
just curious. You know, if you're sitting there, you're in Beijing,
you have to enter into negotiations, or for that matter,
any sense, any.
Speaker 12 (28:08):
Country entering after why do they have to negotiate as well?
Speaker 6 (28:12):
I mean, only if they want to keep creating with
the US, or you're right, maybe they just sit tight,
sit on their hands, and then them blink back again.
I mean, that's my question, Jennifer. You know, how do
you negotiate with the US now that Trump has just
put this ninety day window and it does seem like
he did blink.
Speaker 11 (28:28):
It is it.
Speaker 10 (28:29):
Looks like he saw the cliff. He goes, oh, there
is the after of the cliff. I'm going the other way.
You know, there are a lot of different interpretations of
what happened, but you know, from one, I think all
of us are very relieved that he did that he
that he did put in that ninety day pause, and
I think that should be very much welcomed. And that
was definitely a big step back from the brink, and
I think that's what everyone should sort of focus on,
and the fact that that.
Speaker 11 (28:49):
Is good news.
Speaker 10 (28:51):
Now, what's going to happen next Again, that's anyone's guest.
But I would really really hope that both sides are
going to start saying, okay, let's talk this out. Let's
let's plan a summit of some port of some sort
of in Beijing or in Washington, DC, or a somewhere
in neutral wherever that's going to be now and start
hammering out.
Speaker 11 (29:06):
What are we going to do to make all of this,
to make it both sides.
Speaker 10 (29:09):
Happy, because the global economy is really at stake here,
you know.
Speaker 2 (29:12):
Jennifer, what's so important here is is this oddity on
a Friday of While the American economy is great, Morgan
Stanley out now has a return on average common equity
of seventeen point four percent jp Morgan even better than that,
we're moving from a three percent real GDP economy into
(29:35):
some great mystery. Can the banks call Secretary Besson and
just say stop this because of the liquidity issues, the
bond issues, the dollar issue. Are you confident into the
weekend that the big banks have the power to sway
the secretary?
Speaker 11 (29:56):
I would like to think that would be the case. However,
I think there are the administration has.
Speaker 10 (30:01):
Bigger, bigger issues or bigger picture that they're that they're
focusing on. I mean, I believe President Trump did say
that there's good that we're going to be entering this,
you know, this volatile period right now, Camemis exact words,
but you know it's going to be some choppiness in
terms of economy, in terms of prices, so we have
to what they're trying to do is look through this
and ultimately make this you know, right, this wrong?
Speaker 11 (30:21):
You know what they are they are seeing in terms
of global trade.
Speaker 2 (30:24):
Jennifer, I got gold up fifty six dollars three two
three four. I've got so for ten year, folks, which
is sort of the heartbeat of the trust market out
two point nine standard deviations off the trend ACKed to
the fall of last year. Aren't we at a point
where the big banks, Diamond, Mooyne and the others can
(30:46):
call them up and just say stop it.
Speaker 11 (30:51):
Again?
Speaker 4 (30:51):
They can?
Speaker 11 (30:52):
But does he want to show that he is bending
to you know, to corporate America.
Speaker 10 (30:57):
That's you know, they're sort of like beet chair Powell
right when when he want, you know, people are going
to be questioning is he doing it because of local
pressure or is he doing it because he's trying to
support the US economy. There's there's gonna be a lot
of questions about this, and tough questions, of course, and
you know they will be posed.
Speaker 3 (31:12):
Jen We've got to run here, Damien. I got to run,
but this is too important.
Speaker 2 (31:16):
I got Looney one forty one to a strong Canadian
dollar one thirty nine. Can the next Prime Minister of Canada,
whomever it is, can they stand a strong Canadian dollar.
Speaker 11 (31:28):
I don't know. I would call it right now very strong.
Speaker 10 (31:31):
I mean, it's certainly better than, you know, than what
we had before. But I'm going to be curious to me.
Our election is at April twenty eighth. Whoever the new
Prime minister is going to be, whether or not there's
going to be a majority government or not, what measures are.
Speaker 11 (31:42):
They going to do to strengthen the Canadian economy? And
that will be you know, that's the next focus.
Speaker 2 (31:47):
Thank you so much for being this today, Jenniferly huge
value at BEMO Capital Market.
Speaker 1 (31:51):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay and Android
Otto 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 2 (32:08):
Erica Groschen came out of Harvard and out of University
of Wisconsin, Madison and did the thing that's wonderful in research.
She wrote up research. I believe it was the new
York fed years ago and Damiena jumped out of the page,
jumped out.
Speaker 3 (32:24):
Of the screen. It was like, who is this person?
Speaker 2 (32:26):
And I interviewed Eric Groschen. I don't think she was
so young. I don't think she could drive. She's joining
us now after a stellar career of public service as
commissioner of the United States Bureau of Labor Statistics. When
you see dose, say we're going to move him out
the door. No one has been in the crosshairs like
(32:49):
doctor Groschen. Erica, thank you so much for joining us.
It could be a four hour conversation, but we're going
to be quick, quick, quick today.
Speaker 3 (32:57):
Erica.
Speaker 2 (32:57):
What is the damage to the people that you our
economic data build in nineteen forty seven, best in the world.
How does the labor statistics, How does CEA and the others?
Speaker 3 (33:09):
How do they move forward?
Speaker 13 (33:12):
Wow, that's a that is a big question. Let me
start off by saying, I think up to this point,
most of the damage has been collateral. Damage hasn't been
aimed at BLS or most of the other statistical agencies,
with some exceptions in particular, but it's profound. It's lack.
(33:38):
Right now, we're worried about very worried about the loss
of expertise and at BLS in particular, that's going to
be exasperated in the next couple of weeks when the
Department of Labor announces the reductions force that it's intending
to do. Will and then.
Speaker 12 (33:55):
There's will we be a little Will we be able
doctor Groschen to execut cute the two jobs reports in
the first week of the month, or is that going
to become a challenge to actually understand the American labor economy.
Speaker 13 (34:11):
In the short run, probably not too much disruption, but
the damage will grow over time. And we have also
what we're doing is getting rid of the necessary sort
of option value that BLS has always built into its
operations so that when there's a weather event or some
(34:31):
other problem, the agency can still put out the jobs
report on time. That's going to be harder. And then finally,
we are absolutely the devastating the agency's ability to modernize
in the way.
Speaker 11 (34:47):
That it should.
Speaker 6 (34:48):
Doctor Groshen Larry think of Blackrock on the tape right
now saying that sweeping US TWERF announcements went way beyond
anything I could have ever imagined in my forty nine
years in Finance. You had Jamie I'm in on earlier
saying pretty much the same thing. What does this mean
for the labor markets here in the US? Can we
expect layoffs ahead?
Speaker 11 (35:09):
Wow?
Speaker 13 (35:11):
So one of the things that's characteristic of most recessions
is that actually companies stop hiring before they start laying off,
and so the place to look for the most immediate
damage is just freezing and hiring. And we're already starting.
(35:34):
We've already begun to see that in the fact that
temporary help services employment has been falling. Erica, Well, that's
often companies will stop hiring temp or fire their tempts
before they Yeah, Erica.
Speaker 3 (35:54):
Get one more question in here. We've got breaking news.
You're going to have to run. But let me let
me get this in folks.
Speaker 2 (35:58):
The headline, which will get to in a moment, the
United States has told China to request a g Trump
call that according to CNN, and that moved the markets.
Speaker 3 (36:08):
We are read on the screen and.
Speaker 2 (36:10):
Now we're up twenty three on the Dow fractionally up,
I would say, but again, this is the headline by
headline sequence, we're seeing a reason to stay with Bloomberg
all through this fractures Friday. I can't imagine where we're
going to be at three pm this afternoon, Erica. They
said you were coming on today, and I said, great.
Finally I can ask someone qualified, Erica Groschen, if we
(36:32):
get to a five percent unemployment rate somewhere out there
is a five percent unemployment rate in America now, the
same as a five percent unemployment rate in nineteen eighty
five or nineteen sixty five.
Speaker 3 (36:52):
Wow.
Speaker 13 (36:56):
The simple answer is yes, that's part of what we
expect from our federals to tiss except it's collected in
the same way, it's asking the same questions, and so
it is comparable. That said, the economy has changed, right,
So when we look overall at at who's who's who's unemployed,
(37:19):
and who's not unemployed, and who's counted as working and
things like that, there are changes over time. So right now,
one of the things I would say is that we've
just come off a period of historically low unemployment rates.
So five percent wouldn't have seemed that bad, you know,
you know, two or three decades ago, but now it's
(37:40):
a significant increase in the amount of unemployment.
Speaker 2 (37:43):
Erica, for all of us at Bloomberg with great respect
led by our Michael McKee. Thank you to you and
our public servants in our economic data collection. Can't say
that how we rely on you.
Speaker 3 (37:55):
Each and every day.
Speaker 2 (37:57):
She is at Carnell University, the arecclaimed Industrial and Labor
Program Erica Grossen always the Bureau of Labor Statistics.
Speaker 1 (38:06):
This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(38:26):
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):
Right now, joining us, Jordan Rochester with a wonderful set
of overnight notes.
Speaker 3 (00:32):
He's with FIC macro strategy, you know, with Miszuo. Jordan.
Speaker 2 (00:36):
Let's go a little walk as year right now as
Cam Dawston was talking about this trust series, so for
ten year, I'm looking at it out three standard deviations.
Speaker 3 (00:47):
It's been worse over the last four days.
Speaker 2 (00:50):
Where's the trip point for these liquidity trust series for you?
Speaker 3 (00:55):
Where we get to market chaos?
Speaker 4 (00:58):
I think that's the biggest question to it.
Speaker 5 (01:01):
Was one of my big key concerns earlier this week
was about dollar funding because the whole world was facing
such higher.
Speaker 4 (01:07):
Tariff rates for the US.
Speaker 5 (01:09):
What you're going to see is that exporters to the
US were no longer going to receive their dollar receipts,
and then dollar funding would become an issue. The only
good news that I can give you is that you
just had a record Q one imports in America and
so a lot of these exporters around the world will
be sitting on a dollar cash pile. That's a little
bit more healthier than usual. Now we've had this ninety
(01:31):
day reprieve at ten percent tariff rates. I do see
the flows of commerce still taking place between Europe and
the rest. But the problem is with China with these
extreme tariffs that we have. We've got one hundred and
forty five percent tariff rate on China. It's the largest,
one of the largest trading partners in the world with
the US, and so you're going to see a dollar
a quizy issue at some point unless we have are
(01:52):
climbed out.
Speaker 3 (01:53):
Jordan Rochester with this Missouri.
Speaker 2 (01:55):
We welcome all of you on your commute this morning
across the nation this Friday of Bloomberg's Veillance. Very much
market focus. We'll do a little bit of Washington and
certainly those announcements out of the White House will be
Key John Tucker with us for Lisa Matteo in this hour.
Damien sasaur In for Paul Sweeney with this wonderful emerging
(02:15):
market focus at Bloomberg Intelligence.
Speaker 3 (02:18):
Damien a question to mister Rochester.
Speaker 6 (02:20):
Yes, mister Rochester formerly fic Macro at Nomor and out
in the zoo. So really in a great place to
talk about China here. And look, everybody's blaming the thirty
year move on the basis on leverage, selling or buying
or whatever it is. But you know, I just got
to ask you. I'm getting a lot of questions about
China and what role it pad in these treasury swings.
I know you're well, not your colleagues, but your peers
over at SNBC are basically saying that China was involved
(02:41):
in that, and now City Group's getting, you know, getting
on board.
Speaker 3 (02:44):
What are your thoughts there?
Speaker 5 (02:46):
I could never say whether China is involved not. We
just don't have the data yet until at next the
end of the month for next month. That's the irritating
thing about data.
Speaker 4 (02:54):
It's slow.
Speaker 5 (02:54):
But what we can say is that if you're a
central bank and you're facing extreme currency pressures, it makes
sense to selling US treasuries to defend your currency. It's
been very smooth in dollar ramimbi and so that's kind
of possibly been behind it, I would add.
Speaker 6 (03:08):
So let me ask you this now that you know
the dollars declining in the face of all this very unusual.
Do you think Asian central banks have more scope to
cut rates here?
Speaker 4 (03:16):
I think the whole world does.
Speaker 5 (03:17):
This is going to be a huge growth shock to
the US, but a big growth shop to the rest
of the world. And what's going to happen is the
Chinese exports are no longer going to go to the
US at the same rate. We'll be looking for the
next consumer. Europe stands out to me, but parts of
Asia too. We'll see excess supply of Chinese goods hit
their markets and that's going to load the selling price.
Speaker 2 (03:40):
Jordan, Rochester within all the research capabilities of your shop,
do you people just look at the various supply chains
and almost frankly the demand chains.
Speaker 3 (03:50):
Where China belieguered by the White House, runs their products
through Vietnam, runs their product through Indonesia, runs their next
to Kazakhstan.
Speaker 4 (04:02):
Long term, that's probably what's going to happen. Short term.
Speaker 5 (04:05):
How quickly they can do it is difficult. For example,
Chinese exporters were discussing in an FT article just over
over the past few days they had set up in Jordan,
which has an FTA Jordan, the country not me an
FTA with the US, but Jordan as a result has
a twenty percent tariff rate. Now under these the sort
of expected levels of reciprocal and so even countries with
(04:27):
FDAs where China exporters had sort of hedged themselves by
moving into countries to do the final production part there
and sell on to the US that the plans scuffered.
If everybody has a ten percent taraf rate, it's really
hard to do the rerouting. But for Chinese exports at
one hundred and forty five percent, sure they will take
ten percent by rerouting, but it it takes time and
(04:47):
it's not going to happen in the next few weeks.
Speaker 2 (04:49):
I mean, Danian, we got to focus this down here
because we have Danian Sasar with us.
Speaker 3 (04:53):
The bottom line is Fuscheng is making.
Speaker 2 (04:56):
A lot of the golf heads for callaway, ping and tidiness.
Going to have to run that through Vietnam, Damien SASA
or hey to help improve your lousy game.
Speaker 6 (05:04):
I pay an awful lot for my probi one excess.
But here's what I have to ask Jordan. I mean, look,
we know that the China dumping is on the rest
of the world is going to happen where we know
transhipments are going to happen. We know Europe's the clear winner.
But here's my question. How will bilateral trade negotiations with
the US evolve? And here's what I'm thinking here. You
have active discussions going on right now with India, Japan,
South Korea. Are non tara variables going to play a
(05:25):
role here? I mean, are they going to start talking
about currency manipulation and start holding some of these Asian
economies you know to bear for that? I mean, how
do you how do you even begin to talk about
that and regulate that.
Speaker 5 (05:37):
I don't know about your experience with government officials, but
it never goes quickly, does it. Whenever your life involves
dealing with the government, it's quite difficult to get things
via email chains over the line. So I am skeptical
about how quickly you can get complete free trade agreements
in the next ninety days.
Speaker 4 (05:54):
What I can think that.
Speaker 5 (05:55):
A lot of these countries can do is buy themselves
more time extensions. Way, there's more time to deliberate. The
EUS offering zero for zero tariff rates, for example, but
the US is claiming that non tariff barriers are their issue.
Non tariff barriers requires regulation, changes, requires votes in parts,
it's a bit more difficult to do than just simple
(06:15):
tariff manipulation stories. And on the FX side, I do
agree Lessons made it clear several times informally and formally
about Japan, for example, having two weeks of an exchange
rate and the Bank Japan perhaps needing to hike rates
more so these will be a factor in the talks.
Speaker 2 (06:32):
I got John Tucker's thinking, long yen here to be
stronger again? Can you model out as you did the
other day, Jordan Rochester one for five yen down to
one thirty five? Dare I say, short term, given dollar malignancy,
that we get yen to a strong one thirty per dollar.
Speaker 4 (06:49):
Yeah.
Speaker 5 (06:50):
What's quite clear is we're having a d dollarization theme
play out in the market. The theme's gone from slow
to rapid in the past forty eight hours.
Speaker 4 (06:57):
A lot of that has.
Speaker 5 (06:58):
Been corporate demands as well that the market's been seeing,
pushing up the likes of euro dollar and dollien and
the yen stronger for the Japanese yen. I think that
we could have another five percent devaluation in the.
Speaker 4 (07:10):
Dollar from here.
Speaker 5 (07:10):
If we are truly pricing in the US, exceeptionism come
to an end. Once you have a ten percent trade
weighted fall in the dollar, typically that's when it bottoms
out and rebounds. So we're using the twenty eighteen the
COVID nineteen playbooks, and we've won another five percent at
least to go here. That gets dolly En quite close
to one thirty five and lower. That's the sort of
(07:30):
view I have for where we get to over.
Speaker 4 (07:32):
The next few months.
Speaker 5 (07:33):
And it was something I thought would happen next year.
So it's all happening very quickly.
Speaker 3 (07:37):
Jordan, Thank you so much. Jordan Rochester with us with Missoul.
Speaker 1 (07:41):
You're listening to the Bloomberg Surveillance Podcast. Catch us live
weekday afternoons from seven to ten am Eastern. Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch us live on YouTube.
Speaker 2 (07:54):
What does Kathy say at Schwab joining us now Kathy
Jones to straighten out our fixed income portfolio?
Speaker 3 (08:01):
Do people buy the dip in bonds?
Speaker 7 (08:06):
Yeah, I think you have to be careful, but I
think that is probably a very good idea. The question is,
are we at the yield level that's really attractive in
some parts of the market. I think we are. I
think in municipal bonds you're looking at, you know, tax
equivalent yields or a high earner in the eight nine
percent area, the high st equality. I think that that's
(08:29):
the place you start to nimble.
Speaker 2 (08:31):
Okay, But on the commercial break, John Tucker's over here
with robinhood Day trading in Nvidia. He's buying the dip.
When you buy the Kathy Jones dip? Are you buying duration?
Are you, like saying, extending out your maturity? Are you
what's the what's the math of buying the fixed income dip?
Speaker 7 (08:49):
Yeah, so right now we're still at benchmark, which is
consistent with the Bloomberg egg, and that's around six years
and we've been kind of hugging the benchmark for a
long time because of all the uncertainty. We feel like
you're still clipping a pretty good coupon of four and
a half upwards to five percent in high quality bonds.
That's a good base. We're not extending duration yet. We
(09:10):
have to wait and see how things play out, but
I think that will be a move that we make
probably some time later this year, but you know, high
credit quality. For We're we're really just focused on high
credit quality and making sure we have enough liquidity, not
going into instruments that they're ill liquid at this stage
of the game, trying to play it safe. But I
(09:32):
think the opportunities are starting to emerge.
Speaker 3 (09:34):
Jamien, is a dollar an a liquid instrument?
Speaker 6 (09:38):
Well, you know, Kathy, I have to agree with you.
Muni's mortgages as well. You know, I think you know
high quality mortgages. But you know what really stands out
in this move. Guess what acid class woke up within
fixed income credit and we saw spreads blow And now
I'm looking at IG and high yield, you know, down
two and a half three percent, you know, just since
the second of April. What are your thoughts on credit
markets going forward?
Speaker 7 (09:56):
Yeah, we're so a little bit cautious, although again we're
getting tempted. We have been and kind of on the
sidelines and credit for a while, just staying up in
credit quality because the spreads were so tight. It didn't
get paid for taking risk. But now you know, we're
starting to get paid for taking risk. The problem is,
I think the mix of policies we have right now
is so difficult to interpret or even come up with
(10:17):
an investment thesis that you can carry through the end
of the year, because it could change in the heartbeat.
That's where we're that's where we're having trouble. But I
do think as we get if those spreads blow out
some more, you know, we will start looking at more credit.
Speaker 6 (10:32):
We've also seen a massive steepening dare I say, in
US yield curve, not just the US, really global yield curves,
you know, And so you know when it talks, when
Tom asks about positioning along the yield curve, I'm just curious,
you know, I'm hearing a lot of people saying they
still want to be, you know, along the short end
of the curve, you know, as opposed to the long end.
I'm just curious to hear thoughts there.
Speaker 2 (10:48):
Yeah.
Speaker 7 (10:49):
No, I think that thesis makes sense because we are
anticipating rate cuts down the road, and if this continues,
I don't see how the FED holds off because you
see higher unemployment on the horizon. But I don't want
to just hug the short end and miss out on
grasping some of these yields for the long run, because
I do think we're going to get a slower economy.
I do think the FED will at some point have
(11:10):
to lower rate, and I want to capture some of that, right.
Speaker 2 (11:13):
I want to report, Damien Damiens stay there right now
the market moving futures are up like forty and they're
now at eleven.
Speaker 3 (11:20):
We actually had read in the screen for a bit
the Secretary.
Speaker 2 (11:23):
Of treasurer with Maria right now, maybe he can have
the same effect as James Diamond a few days ago.
Speaker 6 (11:28):
Damien Kathy US Treasury demanded this, you know, kind of
downtick really took a bit of a knock, and you know,
I'm just curious. You know, we know we've been transitioning
away from the FED, from US banks and foreigners, and
you know, what does this mean in your opinion to
term premium over time? I mean, are you thinking that
this steepening of the curve is structural, that it's going
to last for a long period.
Speaker 3 (11:46):
That's a really good pa.
Speaker 7 (11:47):
I do think it's going to last. Okay, term premium.
We actually came into this year calling at the year
of the term premium because we have to. We have
to incorporate now these risks that are out there, and
I do think we'll continue to see the term premium
move up, not just here but globally, but especially here
because this is the source of uncertainty.
Speaker 2 (12:08):
I got twenty more questions. We don't have time, Kathy Jones,
your trooper to come in today. I can't imagine what
the Kathy Jones calendar looks like at Charles Schwab today
Chief Fixed Income Strategists, and ye'll curve watcher at Charles Schwab.
Speaker 1 (12:22):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. You can also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa play Bloomberg eleven thirty.
Speaker 2 (12:38):
Within the span of this week, this historic week, it
is a good time to speak to Sevita Supermanian. She
is with the Bank of America, but far more than that,
delivers Berkeley mathematics, philosophy and massive dead head knowledge and.
Speaker 3 (12:54):
Joins us this morning here. She was definitive in making
esg adult for.
Speaker 2 (12:59):
All all of you that were screaming, stop the peace,
love and dope, just give me the math. Savina Supermanian
led the charge to a constructive ESG debate more than
a few years ago, where through she could joined us
at studio.
Speaker 3 (13:14):
Wonderful to have you here.
Speaker 2 (13:16):
I love what you do in your Bank of America report, which,
unlike most ego driven strategists, you actually listen to your
securities research. You actually pay attention to what's going on
in the trenches. Lorraine Hutchinson has a worst job at
Bank of America.
Speaker 3 (13:34):
She's got to figure out what Walmart's going to do
with China.
Speaker 2 (13:37):
I know, what does China do to the consumer and
that how does that fold into your world?
Speaker 8 (13:42):
Well, I mean, you know, Lorraine has been spot on
in calling out that a lot of these companies with
exposure to China actually started shifting sourcing out of China
into other regions of Asia as well as Mexico, you know,
other parts of globe as early as you know, twenty fifteen,
(14:02):
even before any of the tariff talk began.
Speaker 9 (14:05):
So, you know, I think that the idea that these.
Speaker 8 (14:08):
Companies are vulnerable to China alone is nice, is not
necessarily the case anymore. But closet China via you know, Vietnam, Mexico,
That's what worried us about the initial April second announcement.
Speaker 2 (14:24):
A few years ago, you were in high school. I
got a phone call in Singapore. Go over to Bank
of America.
Speaker 3 (14:30):
So I walk in.
Speaker 2 (14:30):
It's me and Ken Lewis having a conversation about Bank
of America and Asia. You guys have a heritage there,
you have a history there really like no one else.
So what's China do here? Damien's going to say they dedollarize.
Do you just assume China solves the problem without unilateral
negotiations with the White House bilateral?
Speaker 9 (14:52):
I should say, you know, that's TBD.
Speaker 8 (14:54):
I think that where we are now is where corporates
have to really think about how they're going to plan.
And that's the problem is that it's hard to plan
when you just don't know what the playing field looks like.
Speaker 4 (15:06):
You know.
Speaker 8 (15:06):
What I think is interesting, though, is that there's been
this knee jerk reaction to buy treasury bonds instead of
stocks as a safe haven. And I think that's exactly
wrong because if you look back on what happened in
prior periods of protectionism, prior periods of stagflation, whatever we're
heading into value stocks outperformed treasury bonds by a massive margin.
(15:30):
The last thing you want to be stuck in during
a stagflationary environment is long duration bonds. They have no options,
whereas stocks, to me, are the best place to be.
In an environment where you need those options, companies can
extend or shorten their duration. We saw this with Meta
and Google in twenty twenty three. They both initiated dividends
(15:54):
and transition from being just pure.
Speaker 9 (15:56):
Growth to value.
Speaker 8 (15:57):
I think this is a really interesting time to think
about value equities. Companies that are returning capital, like utilities,
even metals and mining, even you know, energy companies that
where the dividends are sacro SYNCD. I think those are
areas that you really want to think about.
Speaker 6 (16:12):
Sabina, I'd love to ask you whether you prefer Tarpent
station or American beauty, but we're not going to ask that.
An earning season, it's a great time to be alive.
And you know, I don't think it's going to be
you know, the earnings at all that moves markets. It's
going to be the words, the forward guidance around it.
What are you expecting here?
Speaker 9 (16:28):
Absolutely?
Speaker 8 (16:29):
And I think what's a little bit worrisome is that
we have a lot of companies shutting down guidance and
going dark, and that's never really good because the worst
you know, I think one of the reasons that we
were a bullish on US stocks is that they're the
most transparent, you know, equity market in the world. All
of these companies issue guidance, and now if they stop,
that's that's one you know, one more nick in the
(16:51):
America you know exceptionalism story. I think, you know, what
do we do with that that information vacuum? I mean,
what I think is interesting is that companies are already
thinking about how to navigate this period. And it could
be something like recasting your costs as IP or you know,
(17:12):
thinking about how to shift sourcing more creatively, how to price,
how to pass that price along to consumers, and a
lot of companies have the option to increase prices as
long as wages remain relatively healthy.
Speaker 2 (17:26):
With the Bank of America, Savita Supermanian with us, we
welcome all over your commute across Bank of America's nation
and of course on YouTube and particularly good evening in
the Pacific RIM YouTube subscribe to Bloomberg Podcast as CPI. Yesterday,
I got negative statistics for that business inflation PPI. I'm
not going to go into it other than to say
(17:47):
it does show a disinflationary tendency. Pretty much everything said,
futures go from up twenty to up twenty six. The
VIX comes in actually forty one point four or five.
Speaker 3 (17:59):
Let me say that.
Speaker 2 (18:00):
Blomberg surveillance and all of our economics. It's brought to
you by Commonwealth. Join over two thousand independent financial advisors.
They are taking control of their growth with advisor centric
support and future ready technologies.
Speaker 3 (18:14):
Grow on your.
Speaker 2 (18:15):
Own terms with a partner dedicated to your success. Go
to Commonwealth dot com to learn how.
Speaker 6 (18:21):
Damian Savida put on your options hat for me. With
all the uncertainty that's out there, implied boles have been
all over the map, surfaces or inverting skis or stapening.
What are your thoughts on buying and or underwriting equity
protection here?
Speaker 8 (18:33):
Yeah, I mean I think that protections already probably pretty
well uh sought after. Yeah, you know, I think there
is actually potentially more upside than downside risk to the
S and P five hundred And I know I sound
a little bit, you.
Speaker 9 (18:47):
Know, out of sync with everybody else.
Speaker 8 (18:50):
Here, but you know, again, I see this as a
market environment where you want to follow the money. The
money is not going into US Treasury bonds. There's a
buyers strike on US treasure rebonds. Where is the money
going to go? I think it's going to go into
inflation protected income. Think about retirees. Retirees right now own
this barbell I have to.
Speaker 9 (19:11):
Well, let's think about what we all own. We own
a barbelle of cash and tim stocks, right.
Speaker 8 (19:20):
I mean, if you look at Merrill lynch Our, you
know advisor data, four out of five of the top
ten holdings of retirees are tech companies. Their yield is
lower than the yield of the S and P five hundred.
This is the first time in history that we've seen
retirees not owning dividends.
Speaker 2 (19:36):
Quickly on this then, is apple of value stock as
you mentioned value before, Well, I mean.
Speaker 8 (19:41):
It's certainly a lot more value now than it was
a few months ago.
Speaker 3 (19:44):
Peas Templeton would say, shares are on sale.
Speaker 8 (19:47):
Yeah, I think that there is an idea there is
this notion that the dividends are relatively protected, payout ratios
are low for a lot of these companies. That's what
I would look at is, what's the payout ratio, what's
their dividend growth profile?
Speaker 9 (20:00):
What's management's focus on dividends?
Speaker 2 (20:02):
Handlers didn't want you to do this interview because they
know I'm going to get you in trouble.
Speaker 3 (20:06):
Okay, folks, here's the drill.
Speaker 2 (20:08):
Savida is so good at the spread market in math
that she's one of the few equity people out there.
And what do we do with our four oh one
k that could go into the office this afternoon with
Brian moynihan, And you're going to explain to Brian for
the larger Bank of America World the collapse two point
(20:30):
eight standard deviations off the log trend back to twenty
twenty three autumn of so for ten year yield. And
the answer is the underlining machinery of mister moynihan, a
guy building a building on Park Evan and a few
other people. The liquidity issue out there is really sport.
(20:51):
How do you explain to bank management the tension going
into this weekend?
Speaker 4 (20:57):
Oh?
Speaker 8 (20:57):
I think bank management is well aware and on top
of this, But I mean I would say that you know,
in environments like this, the trick is getting to the
other side.
Speaker 9 (21:08):
And who knows this.
Speaker 2 (21:09):
Is that how many heads a short term trust market?
Speaker 8 (21:13):
Well, I mean I think that you look for areas
that are short duration. Short duration is key in a
liquidity crisis, and that means you go for cash, short
duration bonds, stocks with high dividends. You know, some credit,
but not all credit. Credit markets might be healthier than
they have been in prior crises. I mean, you tell me, Tom,
but I think this crisis is so different from two
(21:35):
thousand and eight or nineteen ninety eight or ninety eight
or even the seventies, in that US companies have completely
de levered in terms of the larger ones. Right if
you think about banks, energy companies, all the old economy
companies that were hit in two thousand and eight have
become healthier, have really been preparing for this type of crisis.
(21:58):
So I think that's the good news is that within
the equity market, you've got a lot of companies with
solid balance sheets and you know, the ability to maintain dividends.
Speaker 6 (22:07):
Seviea. We're talking about retirees and we're talking about retirement
benefits here, and we're talking about equitable institute losses. Between
the four trading days between April third, and April eighth,
the twenty five top state local US pensions lost almost
two hundred billion dollars. Well, yeah, I mean they're calling you,
what do you say?
Speaker 9 (22:23):
You know why that that's happening.
Speaker 8 (22:26):
I think part of the reason is that everybody loaded
up on private equity, private credit and long bonds, interesting,
which are hardest hit during any sort of cost of
capital crisis. Think about all of these areas, They're going
to be whacked by higher interest rates. And I think
that's the problem, is that pension funds have supplanted all
of their active public equity exposure, yeah, with passive or
(22:50):
private equity. Interesting, and that's why the S and P
index itself is at risk. This is the most crowded
ticker in the world. Nobody owns stocks anymore, they own
the index.
Speaker 6 (22:59):
But let me ask you that. I mean, aren't private
credit funds allowed to mark their books like four times
a year, call it once a year when they get
the audit, right, So I mean, it's not really showing
up in it, you know what I mean? So that
four dat decline of two hundred billion, that might not
even be including the marks you're getting from private credit yet,
So it could be much more, is what you're saying exactly.
Speaker 9 (23:16):
That's why I like equities Again.
Speaker 8 (23:18):
They're marked to reality every millisecond of the day, and
I think that's a very valuable characteristic as well, beautifully.
Speaker 3 (23:25):
Explained by you and Damien better than I could do.
Speaker 2 (23:28):
Then where is the opportunity if passive is taken over?
I mean, as we get this from Eric Bell Chunas,
But Savita Supermanian, give me an opportunity looking out past
labor day?
Speaker 8 (23:41):
Yeah, by the average stock in the S and P,
by the equal weighted SMP put by large cat value,
by anything but the cap weighted index. Because that's the
area that I think has become bloated and potentially risky.
Speaker 3 (23:54):
Can you buy Europe?
Speaker 2 (23:55):
I mean if if i'm I mean, I mean, let's
be honest here, Damien, I mean, you know if I
got you one thirteen, Savina Romamian over Lewis Viewton, They're
on fifty seventh Street and fifth. They han't a loading up.
I mean, is europe an opportunity?
Speaker 9 (24:09):
I think Europe's an opportunity. I mean, i'm i'm.
Speaker 8 (24:11):
I was more optimistic on Europe when before the tariff
wars began because I think there's an opportunity for a
lot of really interesting cross border m and a where
US companies can buy cheaper growth in Europe than they
can in the US. So, you know, I think those
are areas that could catalyze Europe. I think Europe also
right now certainly looks a lot more attractive on a.
Speaker 9 (24:33):
Policy risk perspective.
Speaker 8 (24:35):
At least we know a little bit more about what's
going to happen there. But I still think Europe's dependence
on the US and the interdependence between all of these
regions is a risk that that may not be factored in.
Speaker 2 (24:47):
Call me if you talk to Brian moyne, Anne, we'd
love to know what you know, what you're talking about.
Savina Supermanian, thank you so much for.
Speaker 1 (25:00):
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 (25:15):
Jennifer Lee joins US Now Senior economist Jennifer to what
we heard from Damien sas our overwhelming law.
Speaker 3 (25:22):
Is a presumption of a growth slowdown. Where will real
GDP head?
Speaker 10 (25:28):
Good morning, and thank you very much for having me on. Yes, well,
right now, it looks like GDP is headed lower in
terms of growth. You know, we're not looking for a
recession in the US, but the risk of this continues
to run. It's just given obviously this escalating higher and
a higher terra form losing the track of all the
percentages right now, but it looks like, you know, we
(25:49):
are maxed out at one hundred and forty five percent
on one side, one hundred and twenty five percent on
the other side. So we'll see how this plays out.
But this is you know, obviously not going to use
for US consumers. You're going to be paying higher prices,
even though you know, we brought all the other countries
down to a baseline of ten percent tariff, but you know,
prices are heading higher and.
Speaker 11 (26:07):
This is what's going to hit the US consumer and
this is what's going to.
Speaker 2 (26:11):
Are you going to a negative statistic on real GDP
for this present quarter?
Speaker 11 (26:16):
No, we are not, no, not.
Speaker 10 (26:17):
We're still looking for growth, but slower, much slower growth.
And it's not just the consumer, by the way, it's
also business investment. And you know, even though a lot
of these uh you know, this this invitation we can
we say, to bring more investment into the US is helping,
we're stealing, you know, lots of money coming in now
in terms from different companies promising to build and to hire.
(26:40):
At the same time. You know, it's just very hard
to make any real strong with conviction investment decisions in
this sort of uncertain environment. So I think that's also
going to offset a lot of this incoming.
Speaker 11 (26:52):
Investment, Jennifer.
Speaker 6 (26:53):
As you know, overnight, Beijing raised their tariff on the
US to one twenty five percent, But the company statements
stood out for me. They said, we're not going to
raise anymore. You know why, because it doesn't matter. We're
not trading with them anymore. I mean, so in your models,
are you modeling zero trade between China and the US
on a four basis?
Speaker 10 (27:09):
Well, you know it, certainly it looks like we are
heading in that direction, but I can't see, you know,
I just can't see how that is going to happen,
just given how much reliance they are, there is on
both both countries on each other for all this trade.
So there's just going to have to be you know,
sometimes they're going to have to start talking at some point,
but right now, I'm just I'm very curious to see,
number one, what the reaction from White House is going
(27:30):
to be, and number two, what other tools are going
to be coming out of the toolbox to borrow with
the language from monetary policy makers about what else can
be used? If we are hitting that max of one
hundred and forty five one hundred and fine five percent,
what's next? So we're going to start talking about expert
restrictions on rare minerals for example, on you know, perhaps
treasury on the treasury holdings. I don't know what's next,
(27:52):
but you know, but if we're done with terrorists, there's well,
there's probably a lot of other things that they.
Speaker 6 (27:55):
Can use, Jennifer. Many are referring to the ninety day
window by Trump as him having blinked, right, I mean,
he saw the devil and he basically blinked. And I'm
just curious. You know, if you're sitting there, you're in Beijing,
you have to enter into negotiations, or for that matter,
any sense, any.
Speaker 12 (28:08):
Country entering after why do they have to negotiate as well?
Speaker 6 (28:12):
I mean, only if they want to keep creating with
the US, or you're right, maybe they just sit tight,
sit on their hands, and then them blink back again.
I mean, that's my question, Jennifer. You know, how do
you negotiate with the US now that Trump has just
put this ninety day window and it does seem like
he did blink.
Speaker 11 (28:28):
It is it.
Speaker 10 (28:29):
Looks like he saw the cliff. He goes, oh, there
is the after of the cliff. I'm going the other way.
You know, there are a lot of different interpretations of
what happened, but you know, from one, I think all
of us are very relieved that he did that he
that he did put in that ninety day pause, and
I think that should be very much welcomed. And that
was definitely a big step back from the brink, and
I think that's what everyone should sort of focus on,
and the fact that that.
Speaker 11 (28:49):
Is good news.
Speaker 10 (28:51):
Now, what's going to happen next Again, that's anyone's guest.
But I would really really hope that both sides are
going to start saying, okay, let's talk this out. Let's
let's plan a summit of some port of some sort
of in Beijing or in Washington, DC, or a somewhere
in neutral wherever that's going to be now and start
hammering out.
Speaker 11 (29:06):
What are we going to do to make all of this,
to make it both sides.
Speaker 10 (29:09):
Happy, because the global economy is really at stake here,
you know.
Speaker 2 (29:12):
Jennifer, what's so important here is is this oddity on
a Friday of While the American economy is great, Morgan
Stanley out now has a return on average common equity
of seventeen point four percent jp Morgan even better than that,
we're moving from a three percent real GDP economy into
(29:35):
some great mystery. Can the banks call Secretary Besson and
just say stop this because of the liquidity issues, the
bond issues, the dollar issue. Are you confident into the
weekend that the big banks have the power to sway
the secretary?
Speaker 11 (29:56):
I would like to think that would be the case. However,
I think there are the administration has.
Speaker 10 (30:01):
Bigger, bigger issues or bigger picture that they're that they're
focusing on. I mean, I believe President Trump did say
that there's good that we're going to be entering this,
you know, this volatile period right now, Camemis exact words,
but you know it's going to be some choppiness in
terms of economy, in terms of prices, so we have
to what they're trying to do is look through this
and ultimately make this you know, right, this wrong?
Speaker 11 (30:21):
You know what they are they are seeing in terms
of global trade.
Speaker 2 (30:24):
Jennifer, I got gold up fifty six dollars three two
three four. I've got so for ten year, folks, which
is sort of the heartbeat of the trust market out
two point nine standard deviations off the trend ACKed to
the fall of last year. Aren't we at a point
where the big banks, Diamond, Mooyne and the others can
(30:46):
call them up and just say stop it.
Speaker 11 (30:51):
Again?
Speaker 4 (30:51):
They can?
Speaker 11 (30:52):
But does he want to show that he is bending
to you know, to corporate America.
Speaker 10 (30:57):
That's you know, they're sort of like beet chair Powell
right when when he want, you know, people are going
to be questioning is he doing it because of local
pressure or is he doing it because he's trying to
support the US economy. There's there's gonna be a lot
of questions about this, and tough questions, of course, and
you know they will be posed.
Speaker 3 (31:12):
Jen We've got to run here, Damien. I got to run,
but this is too important.
Speaker 2 (31:16):
I got Looney one forty one to a strong Canadian
dollar one thirty nine. Can the next Prime Minister of Canada,
whomever it is, can they stand a strong Canadian dollar.
Speaker 11 (31:28):
I don't know. I would call it right now very strong.
Speaker 10 (31:31):
I mean, it's certainly better than, you know, than what
we had before. But I'm going to be curious to me.
Our election is at April twenty eighth. Whoever the new
Prime minister is going to be, whether or not there's
going to be a majority government or not, what measures are.
Speaker 11 (31:42):
They going to do to strengthen the Canadian economy? And
that will be you know, that's the next focus.
Speaker 2 (31:47):
Thank you so much for being this today, Jenniferly huge
value at BEMO Capital Market.
Speaker 1 (31:51):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay and Android
Otto 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 2 (32:08):
Erica Groschen came out of Harvard and out of University
of Wisconsin, Madison and did the thing that's wonderful in research.
She wrote up research. I believe it was the new
York fed years ago and Damiena jumped out of the page,
jumped out.
Speaker 3 (32:24):
Of the screen. It was like, who is this person?
Speaker 2 (32:26):
And I interviewed Eric Groschen. I don't think she was
so young. I don't think she could drive. She's joining
us now after a stellar career of public service as
commissioner of the United States Bureau of Labor Statistics. When
you see dose, say we're going to move him out
the door. No one has been in the crosshairs like
(32:49):
doctor Groschen. Erica, thank you so much for joining us.
It could be a four hour conversation, but we're going
to be quick, quick, quick today.
Speaker 3 (32:57):
Erica.
Speaker 2 (32:57):
What is the damage to the people that you our
economic data build in nineteen forty seven, best in the world.
How does the labor statistics, How does CEA and the others?
Speaker 3 (33:09):
How do they move forward?
Speaker 13 (33:12):
Wow, that's a that is a big question. Let me
start off by saying, I think up to this point,
most of the damage has been collateral. Damage hasn't been
aimed at BLS or most of the other statistical agencies,
with some exceptions in particular, but it's profound. It's lack.
(33:38):
Right now, we're worried about very worried about the loss
of expertise and at BLS in particular, that's going to
be exasperated in the next couple of weeks when the
Department of Labor announces the reductions force that it's intending
to do. Will and then.
Speaker 12 (33:55):
There's will we be a little Will we be able
doctor Groschen to execut cute the two jobs reports in
the first week of the month, or is that going
to become a challenge to actually understand the American labor economy.
Speaker 13 (34:11):
In the short run, probably not too much disruption, but
the damage will grow over time. And we have also
what we're doing is getting rid of the necessary sort
of option value that BLS has always built into its
operations so that when there's a weather event or some
(34:31):
other problem, the agency can still put out the jobs
report on time. That's going to be harder. And then finally,
we are absolutely the devastating the agency's ability to modernize
in the way.
Speaker 11 (34:47):
That it should.
Speaker 6 (34:48):
Doctor Groshen Larry think of Blackrock on the tape right
now saying that sweeping US TWERF announcements went way beyond
anything I could have ever imagined in my forty nine
years in Finance. You had Jamie I'm in on earlier
saying pretty much the same thing. What does this mean
for the labor markets here in the US? Can we
expect layoffs ahead?
Speaker 11 (35:09):
Wow?
Speaker 13 (35:11):
So one of the things that's characteristic of most recessions
is that actually companies stop hiring before they start laying off,
and so the place to look for the most immediate
damage is just freezing and hiring. And we're already starting.
(35:34):
We've already begun to see that in the fact that
temporary help services employment has been falling. Erica, Well, that's
often companies will stop hiring temp or fire their tempts
before they Yeah, Erica.
Speaker 3 (35:54):
Get one more question in here. We've got breaking news.
You're going to have to run. But let me let
me get this in folks.
Speaker 2 (35:58):
The headline, which will get to in a moment, the
United States has told China to request a g Trump
call that according to CNN, and that moved the markets.
Speaker 3 (36:08):
We are read on the screen and.
Speaker 2 (36:10):
Now we're up twenty three on the Dow fractionally up,
I would say, but again, this is the headline by
headline sequence, we're seeing a reason to stay with Bloomberg
all through this fractures Friday. I can't imagine where we're
going to be at three pm this afternoon, Erica. They
said you were coming on today, and I said, great.
Finally I can ask someone qualified, Erica Groschen, if we
(36:32):
get to a five percent unemployment rate somewhere out there
is a five percent unemployment rate in America now, the
same as a five percent unemployment rate in nineteen eighty
five or nineteen sixty five.
Speaker 3 (36:52):
Wow.
Speaker 13 (36:56):
The simple answer is yes, that's part of what we
expect from our federals to tiss except it's collected in
the same way, it's asking the same questions, and so
it is comparable. That said, the economy has changed, right,
So when we look overall at at who's who's who's unemployed,
(37:19):
and who's not unemployed, and who's counted as working and
things like that, there are changes over time. So right now,
one of the things I would say is that we've
just come off a period of historically low unemployment rates.
So five percent wouldn't have seemed that bad, you know,
you know, two or three decades ago, but now it's
(37:40):
a significant increase in the amount of unemployment.
Speaker 2 (37:43):
Erica, for all of us at Bloomberg with great respect
led by our Michael McKee. Thank you to you and
our public servants in our economic data collection. Can't say
that how we rely on you.
Speaker 3 (37:55):
Each and every day.
Speaker 2 (37:57):
She is at Carnell University, the arecclaimed Industrial and Labor
Program Erica Grossen always the Bureau of Labor Statistics.
Speaker 1 (38:06):
This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(38:26):
always on the Bloomberg terminal
Popular Podcasts
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy And Charlamagne Tha God!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Decisions, Decisions
Welcome to "Decisions, Decisions," the podcast where boundaries are pushed, and conversations get candid! Join your favorite hosts, Mandii B and WeezyWTF, as they dive deep into the world of non-traditional relationships and explore the often-taboo topics surrounding dating, sex, and love. Every Monday, Mandii and Weezy invite you to unlearn the outdated narratives dictated by traditional patriarchal norms. With a blend of humor, vulnerability, and authenticity, they share their personal journeys navigating their 30s, tackling the complexities of modern relationships, and engaging in thought-provoking discussions that challenge societal expectations. From groundbreaking interviews with diverse guests to relatable stories that resonate with your experiences, "Decisions, Decisions" is your go-to source for open dialogue about what it truly means to love and connect in today's world. Get ready to reshape your understanding of relationships and embrace the freedom of authentic connections—tune in and join the conversation!