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This is the Bloomberg Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join us each day for insight from the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And always I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App. Richard Clarita comes back for more this morning. Thank you so much for joining Bloomberg this morning.

This is the Bloomberg Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join us each day for insight from the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And always I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App. Richard Clarita comes back for more this morning. Thank you so much for joining Bloomberg this morning.

As always, thanks for having me.

As always, thanks for having me.

What changed yesterday? The fact that I understand there's some geopolitical yield going on there is well, but we had fixed income up yield down equities to the moon. What was the FED signaling that gave markets confidence?

What changed yesterday? The fact that I understand there's some geopolitical yield going on there is well, but we had fixed income up yield down equities to the moon. What was the FED signaling that gave markets confidence?

I think a couple things.

I think a couple things.

First of all, one could argue that, if anything, the FMC statement itself maybe was a little bit less dubbish than folks might have thought. But yet again, the press conference, I think a fair reading of the press conference was that it skewed a bit dubbish. Now, again, the moving prices was quite small. The September cut was fully priced in before the meeting, it's fully priced in after the meeting. But this is a committee that cares about both sides.

First of all, one could argue that, if anything, the FMC statement itself maybe was a little bit less dubbish than folks might have thought. But yet again, the press conference, I think a fair reading of the press conference was that it skewed a bit dubbish. Now, again, the moving prices was quite small. The September cut was fully priced in before the meeting, it's fully priced in after the meeting. But this is a committee that cares about both sides.

Of the dual mandate.

Of the dual mandate.

They've made that clear now in the statement, and they also made clear they're getting increasing confidence that inflation's on a path to two. And finally that they actually discussed at the meeting yesterday cutting rates at the meeting yesterday. So all in, I think that's what the markets were reacting to.

They've made that clear now in the statement, and they also made clear they're getting increasing confidence that inflation's on a path to two. And finally that they actually discussed at the meeting yesterday cutting rates at the meeting yesterday. So all in, I think that's what the markets were reacting to.

Tom Richard, there are folks in academia and in practice in the marketplace that feel like the FED is already behind the curve, that the real time data suggests that the economy really is slowing, and by the time they get cutting rates it may be too late. How do you respond to that?

Tom Richard, there are folks in academia and in practice in the marketplace that feel like the FED is already behind the curve, that the real time data suggests that the economy really is slowing, and by the time they get cutting rates it may be too late. How do you respond to that?

Well, good question, because I think that is a risk they have been willing to take for a couple of years. Indeed, Chirpal made that very clear of Jackson Hole in twenty twenty two. As inflation has moved towards target from above, they've increasingly and yesterday in the statement indicated that they now are looking at both sides of the dual mandate.

Well, good question, because I think that is a risk they have been willing to take for a couple of years. Indeed, Chirpal made that very clear of Jackson Hole in twenty twenty two. As inflation has moved towards target from above, they've increasingly and yesterday in the statement indicated that they now are looking at both sides of the dual mandate.

That said, I agree with them.

That said, I agree with them.

I think the data coming in are certainly consistent with an economy operating at or perhaps a bit above trend. So I don't think they're in a danger zone here of falling behind the curve. Moreover, they've made very clear that if they do see any softening in the labor market, looks like they won't hesitate to start cutting. So there's risk management here. Agree, But I think I think think they're in a good place.

I think the data coming in are certainly consistent with an economy operating at or perhaps a bit above trend. So I don't think they're in a danger zone here of falling behind the curve. Moreover, they've made very clear that if they do see any softening in the labor market, looks like they won't hesitate to start cutting. So there's risk management here. Agree, But I think I think think they're in a good place.

You under sell this, you know, you got to get some pr Richard. Basically, Richard Clarita made modern Columbia economics. He took the heritage of a guy named Stiglitz, a heritage of a guy named Phelps. There was some guy doing fancy math at Princeton. He said, come on up to Columbia, and what's amazing about this? Did you even teach microeconomics at Colombia? Is still like Pierre Andre Chapori, I mean, you got Mike, Well, how does microeconomics fit in it Columbia? Unlike the madness at Chicago.

You under sell this, you know, you got to get some pr Richard. Basically, Richard Clarita made modern Columbia economics. He took the heritage of a guy named Stiglitz, a heritage of a guy named Phelps. There was some guy doing fancy math at Princeton. He said, come on up to Columbia, and what's amazing about this? Did you even teach microeconomics at Colombia? Is still like Pierre Andre Chapori, I mean, you got Mike, Well, how does microeconomics fit in it Columbia? Unlike the madness at Chicago.

Well, I work in some micro in my classes. I think it's best for all concern that I stick to the stick to the macri. He also mentioned Bob Mundell, who passed away not too long ago, a dear friend and colleague. So at one point I think we had four Nobel Laureates on the faculties.

Well, I work in some micro in my classes. I think it's best for all concern that I stick to the stick to the macri. He also mentioned Bob Mundell, who passed away not too long ago, a dear friend and colleague. So at one point I think we had four Nobel Laureates on the faculties.

So yeah, let's bring in our Nobel lawyate. Animong with a question for the former vice chairman, Anamog of Chicago in Bloomberg Economics.

So yeah, let's bring in our Nobel lawyate. Animong with a question for the former vice chairman, Anamog of Chicago in Bloomberg Economics.

Yeah, Richie mentioned that this committee is one that's very focused on both sides of the mandate. And do you think that going forward, you know, suppose that we do have the Trump number two administration with what's happening with the potentially higher tariffs, would that factor in into the committee's September meeting deliberations or even November deliberations. Should they turn preemptive?

Yeah, Richie mentioned that this committee is one that's very focused on both sides of the mandate. And do you think that going forward, you know, suppose that we do have the Trump number two administration with what's happening with the potentially higher tariffs, would that factor in into the committee's September meeting deliberations or even November deliberations. Should they turn preemptive?

Should we just leave the studio right exactly? That was a totally unfair question. Rich Well.

Should we just leave the studio right exactly? That was a totally unfair question. Rich Well.

First of all, An, as you know, I'm a big, big fan of your work, So keep up the good work. I think Jay Powell made it very clear yesterday he got a couple of questions and he said, look, we're going to base policy on achieving our mandate. I think he mentioned he'd been at the FED for now four presidential election cycles, so I don't think it will be a factor. And I'm actually glad they clarify that because there had been some meme in the markets that the pal Fed might hold off doing anything to see how the election turned out and that, and I think clearly he set that aside.

First of all, An, as you know, I'm a big, big fan of your work, So keep up the good work. I think Jay Powell made it very clear yesterday he got a couple of questions and he said, look, we're going to base policy on achieving our mandate. I think he mentioned he'd been at the FED for now four presidential election cycles, so I don't think it will be a factor. And I'm actually glad they clarify that because there had been some meme in the markets that the pal Fed might hold off doing anything to see how the election turned out and that, and I think clearly he set that aside.

And this was really something his voice changed. I'm sorry this happens like man Q when he was at the White House. Up you get upset, and all of a sudden he go into Harvard lecture form when he got upset. Bernanke used to do the same thing, And I asked another question to make us look puny.

And this was really something his voice changed. I'm sorry this happens like man Q when he was at the White House. Up you get upset, and all of a sudden he go into Harvard lecture form when he got upset. Bernanke used to do the same thing, And I asked another question to make us look puny.

Yes, I want to push on that a little bit.

Yes, I want to push on that a little bit.

Rich.

Rich.

You were there during the Trump first Trade War as it was. I you understand you were brieved about the inflationary impact of the first Trade War, and you probably remember that the briefing was tilting toward saying that the terrorists were inflationary, which didn't turn out to be. And right now, the mainstream economy is Wall Street economis are uniformally saying that it will be very inflationary. Again, what's your thought on that, Well, there are.

You were there during the Trump first Trade War as it was. I you understand you were brieved about the inflationary impact of the first Trade War, and you probably remember that the briefing was tilting toward saying that the terrorists were inflationary, which didn't turn out to be. And right now, the mainstream economy is Wall Street economis are uniformally saying that it will be very inflationary. Again, what's your thought on that, Well, there are.

A couple of things.

A couple of things.

First, if anything, during my time at the FED before the pandemic, inflation is running a little bit low. The main thing that emerged at that point in twenty nineteen was that the trade war. Concerns about the trade war were very negative on economic activity and sentiment. I do think the details will be important. I think that in particular, there'd be an inclination depending on how there were structured, if there were tariffs, to try to distinguish between if it's moving up the price level like a value added tax, whereas its inflationary. But I think the key thing for your listeners to bear in mind is that's a decision the Paler FED does not have to make now. They made it very clear twenty twenty four rate decisions are based on twenty twenty four data and outlook, they'll have plenty of time to reassess and think about this as they go into twenty twenty five. So good question, but I don't think it will be a factor now.

First, if anything, during my time at the FED before the pandemic, inflation is running a little bit low. The main thing that emerged at that point in twenty nineteen was that the trade war. Concerns about the trade war were very negative on economic activity and sentiment. I do think the details will be important. I think that in particular, there'd be an inclination depending on how there were structured, if there were tariffs, to try to distinguish between if it's moving up the price level like a value added tax, whereas its inflationary. But I think the key thing for your listeners to bear in mind is that's a decision the Paler FED does not have to make now. They made it very clear twenty twenty four rate decisions are based on twenty twenty four data and outlook, they'll have plenty of time to reassess and think about this as they go into twenty twenty five. So good question, but I don't think it will be a factor now.

You defended William McChesney. Martin Paul. One more question in this section with rich clarity.

You defended William McChesney. Martin Paul. One more question in this section with rich clarity.

All right, let's assume the FED starts cutting in September. Then what how do they prosecute this policy to get rates down? Is that every other meeting?

All right, let's assume the FED starts cutting in September. Then what how do they prosecute this policy to get rates down? Is that every other meeting?

Does that work well?

Does that work well?

The TRIAD answers, it's data dependent, but I think they've acknowledged that if they cut once, they will be thinking there's more than one cut. We'll get good information on that in the projections. We'll get another set of projections in December. Here's what I think. I think they're basically a couple scenarios. One is a very very soft landing, you know, in the spirit of the Olympics, sticking the soft landing. In that case, the econmomyist chugs along trend, unemployment doesn't go up, inflation moves gradually down to two, and then they can gradually cut rates as inflation falls.

The TRIAD answers, it's data dependent, but I think they've acknowledged that if they cut once, they will be thinking there's more than one cut. We'll get good information on that in the projections. We'll get another set of projections in December. Here's what I think. I think they're basically a couple scenarios. One is a very very soft landing, you know, in the spirit of the Olympics, sticking the soft landing. In that case, the econmomyist chugs along trend, unemployment doesn't go up, inflation moves gradually down to two, and then they can gradually cut rates as inflation falls.

You know.

You know.

Another scenarios the economy slows more sharply, and then I think they can cut more rapidly. I do think the bar right now is pretty high to hike rates, and so I think if the economy gets stuck at inflation at current levels, they they may not cut very many times and keep rates at an elevated level. But importantly, it could depend on the outcome of the election. But again, that won't We won't know how that plays out until twenty twenty five.

Another scenarios the economy slows more sharply, and then I think they can cut more rapidly. I do think the bar right now is pretty high to hike rates, and so I think if the economy gets stuck at inflation at current levels, they they may not cut very many times and keep rates at an elevated level. But importantly, it could depend on the outcome of the election. But again, that won't We won't know how that plays out until twenty twenty five.

So Richard Clarin stay with us. You got so much to talk about it. I'm going to look it up right now. You can do this on the Bloomberg Professional Service, the FOMC meetings. Paul there, it is January twenty ninth, after the inauguration.

So Richard Clarin stay with us. You got so much to talk about it. I'm going to look it up right now. You can do this on the Bloomberg Professional Service, the FOMC meetings. Paul there, it is January twenty ninth, after the inauguration.

That'll be the meeting.

That'll be the meeting.

Put it on your calendar, Doctor Clarida, we're going to have you back there January at twenty nine. Annawong, thank you so much for joining us with Bloomberg Economics. Important questions, tough questions on politics. She can answer them. You know, we can't answer Wed questions. That's what I want. Yeah, it's different. It's there's a different oxygen out there. What a joint of Ana Wong with us from Chicago and Bloomberg Economics. And we continue with the former vice Chairman of the Federal Reserve System Richard Clarida. This morning, Richard, you and I could turn this into a three hour love fest. We don't have the time to do that, so I'm just going to cut to the chase. I was busting Annawan's chops about Frank Knight nineteen twenty one, one hundred and thirty four pages. It's right of passage, and it's where we really began to think in the modern era of the unknown unknowns, the idea of what's the mystery that's out there. We have a pandemic overlay we're coming out of.

Put it on your calendar, Doctor Clarida, we're going to have you back there January at twenty nine. Annawong, thank you so much for joining us with Bloomberg Economics. Important questions, tough questions on politics. She can answer them. You know, we can't answer Wed questions. That's what I want. Yeah, it's different. It's there's a different oxygen out there. What a joint of Ana Wong with us from Chicago and Bloomberg Economics. And we continue with the former vice Chairman of the Federal Reserve System Richard Clarida. This morning, Richard, you and I could turn this into a three hour love fest. We don't have the time to do that, so I'm just going to cut to the chase. I was busting Annawan's chops about Frank Knight nineteen twenty one, one hundred and thirty four pages. It's right of passage, and it's where we really began to think in the modern era of the unknown unknowns, the idea of what's the mystery that's out there. We have a pandemic overlay we're coming out of.

We have an.

We have an.

Immigration dynamic we don't understand on the edge of Angus Deeton. There's too many mysteries out of productivity. Yeah, there is a mystery we have. What is Richard Claared isnwn unknown If you were to sit down with the chairman this.

Immigration dynamic we don't understand on the edge of Angus Deeton. There's too many mysteries out of productivity. Yeah, there is a mystery we have. What is Richard Claared isnwn unknown If you were to sit down with the chairman this.

Morning, well that those three would certainly be on Those three would certainly be on the list. I think that an additional known unknown is the global fiscal outlook is terrible. You know, twenty years ago, debt to GDP ratio was forty percent.

Morning, well that those three would certainly be on Those three would certainly be on the list. I think that an additional known unknown is the global fiscal outlook is terrible. You know, twenty years ago, debt to GDP ratio was forty percent.

It's north of one hundred now.

It's north of one hundred now.

Debt service cost to exceed the defense budget in the US, and so everyone acknowledges that global fiscal paths are unsustainable, but there's no political will. So I think I think that the known unknown is when and what brings about the ultimate adjustment in fiscal policy, because it will happen eventually. I don't know if it's next year, in ten years, but I think, to me, that's the known unknown.

Debt service cost to exceed the defense budget in the US, and so everyone acknowledges that global fiscal paths are unsustainable, but there's no political will. So I think I think that the known unknown is when and what brings about the ultimate adjustment in fiscal policy, because it will happen eventually. I don't know if it's next year, in ten years, but I think, to me, that's the known unknown.

And you know, I'm of a certain vintage. I've heard that my entire life. Yeah, we've had this little sharp down in Lower Manhattan that ticks up the debt. I remember that as a kid driving the piece, you know, the east side, And when where will we see that? The concerns about global debt.

And you know, I'm of a certain vintage. I've heard that my entire life. Yeah, we've had this little sharp down in Lower Manhattan that ticks up the debt. I remember that as a kid driving the piece, you know, the east side, And when where will we see that? The concerns about global debt.

So excellent point because why has it fallen? Why have the bond market vigilant has been in hibernation. Some would say they're extinct. And the simplest answer is because global interest rates have fallen by more than debt has gone up. So until recently it seemed like a free lunch to politicians borrow. But your debt service costs go down because interest.

So excellent point because why has it fallen? Why have the bond market vigilant has been in hibernation. Some would say they're extinct. And the simplest answer is because global interest rates have fallen by more than debt has gone up. So until recently it seemed like a free lunch to politicians borrow. But your debt service costs go down because interest.

Rates are falling.

Rates are falling.

And so the point is, going forward, interest rates are not going to be as low as they were in the prior twenty years, and so the cast of that debt service will be more evident, and so at some point that will drive a political outcome.

And so the point is, going forward, interest rates are not going to be as low as they were in the prior twenty years, and so the cast of that debt service will be more evident, and so at some point that will drive a political outcome.

But I do agree with you.

But I do agree with you.

The can has been kicked down the road for a long time and it may be a while.

The can has been kicked down the road for a long time and it may be a while.

But to me that's a non unknown.

But to me that's a non unknown.

And what is the fix?

And what is the fix?

Ultimately from an economic.

Ultimately from an economic.

Physics, it depends on the country. But the usual if your deficits are too large and your debt service costs are too high, there's going to be some combination of adjustments on revenues and adjustments on alays.

Physics, it depends on the country. But the usual if your deficits are too large and your debt service costs are too high, there's going to be some combination of adjustments on revenues and adjustments on alays.

But neither party is running on.

But neither party is running on.

A platform to address that, and so I think it will not be It will not really be an issue in the campaign way.

A platform to address that, and so I think it will not be It will not really be an issue in the campaign way.

Lee was with this last hour stunning us with a potential three handle on China GDP growth. I want to go to a guy named Stiglitz who way back at Stanford started to think about the little G of the growth rate. Olivia, Blanchard and Stiglets have really focused on the fact the global little G growth rate is better than good to sustain our fiscal policy. Do you suggest that we could see a diminished global growth rate that finally upsets the apple cart?

Lee was with this last hour stunning us with a potential three handle on China GDP growth. I want to go to a guy named Stiglitz who way back at Stanford started to think about the little G of the growth rate. Olivia, Blanchard and Stiglets have really focused on the fact the global little G growth rate is better than good to sustain our fiscal policy. Do you suggest that we could see a diminished global growth rate that finally upsets the apple cart?

It could be growth, or it could happen through the interest rate channel. Remember Olivier's famous equation is it's about R minus G, and so if G.

It could be growth, or it could happen through the interest rate channel. Remember Olivier's famous equation is it's about R minus G, and so if G.

Falls or R goes up.

Falls or R goes up.

Can you figure Can you call Stockholm after the show and say, can we get a shingle out for Blenchard on our minus G.

Can you figure Can you call Stockholm after the show and say, can we get a shingle out for Blenchard on our minus G.

Give it to Williams as well.

Give it to Williams as well.

Okay, exactly, So what do we do when we have two small G on our minus well exactly. And so if you have too small a G, then it brings forward the day of reckoning on fiscal adjustment.

Okay, exactly, So what do we do when we have two small G on our minus well exactly. And so if you have too small a G, then it brings forward the day of reckoning on fiscal adjustment.

I'll just leave it at that.

I'll just leave it at that.

Okay, being careful, but this is real because Italy there was a you know, with their demographics, it was like overdone. Small g's done, and with the revolution of their politics, they've got actually very good G. Because you're spending money in that little quarter in Venice, buying.

Okay, being careful, but this is real because Italy there was a you know, with their demographics, it was like overdone. Small g's done, and with the revolution of their politics, they've got actually very good G. Because you're spending money in that little quarter in Venice, buying.

Lots of stuff.

Lots of stuff.

Little G matters in Italy.

Little G matters in Italy.

How about in China though, I yeah, how big of a concern is that for the global economy? Because I'll look at too, something like their population. I mean, it's just aging, and it's aging at a much higher rate than a lot of other Yeah, populations. I don't see that changing. So what does that mean for global growth?

How about in China though, I yeah, how big of a concern is that for the global economy? Because I'll look at too, something like their population. I mean, it's just aging, and it's aging at a much higher rate than a lot of other Yeah, populations. I don't see that changing. So what does that mean for global growth?

Well, obviously China's global growth has been slowing.

Well, obviously China's global growth has been slowing.

We all remember when the number.

We all remember when the number.

Was seven or eight, then it was five or six, and now it's four or five. So now it's very big economy. So four and a half percent growth in China is still a big part of the global outlook. I think the real difference, though, compared to the past twenty years, is the way in which the Chinese economy interacts with the rest of the global economy. Commodity prizes activity, you know. I think everyone agrees the big era of global hyper globalization is over, and so the way in which Chinese growth drives the rest of the economy I think is changing. And it's actually something we're looking at closely at PIMCO.

Was seven or eight, then it was five or six, and now it's four or five. So now it's very big economy. So four and a half percent growth in China is still a big part of the global outlook. I think the real difference, though, compared to the past twenty years, is the way in which the Chinese economy interacts with the rest of the global economy. Commodity prizes activity, you know. I think everyone agrees the big era of global hyper globalization is over, and so the way in which Chinese growth drives the rest of the economy I think is changing. And it's actually something we're looking at closely at PIMCO.

We mentioned this yesterday. I busted your chops as Lawrence Meyer PAULI wrote.

We mentioned this yesterday. I busted your chops as Lawrence Meyer PAULI wrote.

A little small book about the green Span fed where it was Alan green Span and everybody follow I'm sorry, q Pill, Jonathan.

A little small book about the green Span fed where it was Alan green Span and everybody follow I'm sorry, q Pill, Jonathan.

Began Green And there's that troublemaker.

Began Green And there's that troublemaker.

Catherine Mann descent.

Catherine Mann descent.

To you, Pill is the chief economists.

To you, Pill is the chief economists.

He's went against a governor. Why can't you fed?

He's went against a governor. Why can't you fed?

He as normal in Cuman as Catherine Mann's Bank of England.

He as normal in Cuman as Catherine Mann's Bank of England.

Well, I will say that the Bank of England is certainly beginning with my good friend and mentor Mervyn King thirty plus years ago.

Well, I will say that the Bank of England is certainly beginning with my good friend and mentor Mervyn King thirty plus years ago.

It was a point of.

It was a point of.

Pride that their culture did not discourage dissense. And indeed, I think it was one or two meetings when Mervyn was outvoted.

Pride that their culture did not discourage dissense. And indeed, I think it was one or two meetings when Mervyn was outvoted.

In this case it was five to four.

In this case it was five to four.

But when the chief economist votes, it definitely gets the it gets the headline. Sure, there are descents at the FED during my time, we had several meetings where there were three descents. But it is the case that in the post green spanning and era that you refer to, or green span and then post green Span, descents among governors have been pretty rare on monetary policy. And that that's an entire another show we could.

But when the chief economist votes, it definitely gets the it gets the headline. Sure, there are descents at the FED during my time, we had several meetings where there were three descents. But it is the case that in the post green spanning and era that you refer to, or green span and then post green Span, descents among governors have been pretty rare on monetary policy. And that that's an entire another show we could.

I won't spend time.

I won't spend time.

Talking about why that is. You may come back tomorrow, Okay, Well, okay, Rich.

Talking about why that is. You may come back tomorrow, Okay, Well, okay, Rich.

Clarida, thank you so much for John Fair, Lisa brown Winson, myself yesterday that decides, for Paul Sweeney and all. This has just been very generous of you at this key time for our monetary policy.

Clarida, thank you so much for John Fair, Lisa brown Winson, myself yesterday that decides, for Paul Sweeney and all. This has just been very generous of you at this key time for our monetary policy.

What are they going to do at the next meeting.

What are they going to do at the next meeting.

They're gonna they're gonna cut raids.

They're gonna they're gonna cut raids.

There you go, that's all we know. We'll leave it there. Eric, be sure that gets a single best idea.

There you go, that's all we know. We'll leave it there. Eric, be sure that gets a single best idea.

Rich Clarida of Pimcal of Columbia an extended conversation with WAYE.

Rich Clarida of Pimcal of Columbia an extended conversation with WAYE.

Lee of Black Right.

Lee of Black Right.

Well, let's just start with the why why do we see price up, yield down.

Well, let's just start with the why why do we see price up, yield down.

Well?

Well?

From the FED meeting yesterday. I think September is pretty much a down deal. The bar for not cutting is very high, so I think that's what markets got excited. But importantly, the way that JPAW framed the reasons for September cut is also why markets are happy with yesterday's meeting. He characterized what's happening in labor market as normalization rather than labor market weakening. And what is going to lead to a September cut that is looking very likely. It's more around better behaving inflation rather than weaker labor markets. So I think that's a good combination for risk asses and.

From the FED meeting yesterday. I think September is pretty much a down deal. The bar for not cutting is very high, so I think that's what markets got excited. But importantly, the way that JPAW framed the reasons for September cut is also why markets are happy with yesterday's meeting. He characterized what's happening in labor market as normalization rather than labor market weakening. And what is going to lead to a September cut that is looking very likely. It's more around better behaving inflation rather than weaker labor markets. So I think that's a good combination for risk asses and.

A y access. It's lord rhythmic. You end up looking in a curve is convexity? Is there literally a short cover in bonds now? Is there literally an equity like short cover where everybody goes OMG, yields are going lower?

A y access. It's lord rhythmic. You end up looking in a curve is convexity? Is there literally a short cover in bonds now? Is there literally an equity like short cover where everybody goes OMG, yields are going lower?

Well, if you look at the hedge fund positioning, absolutely a lot of the speculative positions went from short bonds to long bounds. But I would observe that front end of the curve has done better than the back end of the curve, so mainly in response to kind of markets pricing in more cuts. But our concern for the back end of the curve, especially over a longer tem horizon, still stays, which is a higher fiscal trajectory, higher m premier which currently is still in the negative territory.

Well, if you look at the hedge fund positioning, absolutely a lot of the speculative positions went from short bonds to long bounds. But I would observe that front end of the curve has done better than the back end of the curve, so mainly in response to kind of markets pricing in more cuts. But our concern for the back end of the curve, especially over a longer tem horizon, still stays, which is a higher fiscal trajectory, higher m premier which currently is still in the negative territory.

You know, you've got a great note out here, your weekly note, Wayley, and I'm looking at your assets and review.

You know, you've got a great note out here, your weekly note, Wayley, and I'm looking at your assets and review.

You know, one of the best.

You know, one of the best.

Performers is gold here.

Performers is gold here.

What do you make of that?

What do you make of that?

Well, I think if you look at what's been working so far this year as a diversifier, is not your go to good old duration in a portfolio, but rather some of the other assets such as such as gold. And on top of that, the negative correlation between gold and real rate has helped there as well. Now having said that, it's really hard to kind of think about gold in the context of a longer term portfolio construction simply because there's no cash flow to discount futer cash flow. With now having said that, there is a case to be made to allocate to gold in portfolio because of the characteristics that it has exhibited as you observed as well.

Well, I think if you look at what's been working so far this year as a diversifier, is not your go to good old duration in a portfolio, but rather some of the other assets such as such as gold. And on top of that, the negative correlation between gold and real rate has helped there as well. Now having said that, it's really hard to kind of think about gold in the context of a longer term portfolio construction simply because there's no cash flow to discount futer cash flow. With now having said that, there is a case to be made to allocate to gold in portfolio because of the characteristics that it has exhibited as you observed as well.

So you know the central banks are certainly in focus yesterday with the Fed today with the Bank of England cutting interest rates. Traders believe that there'll be another rate cut in November. What do you make of the Bank of England?

So you know the central banks are certainly in focus yesterday with the Fed today with the Bank of England cutting interest rates. Traders believe that there'll be another rate cut in November. What do you make of the Bank of England?

Well, Bank of England is very interesting, right, so hasline inflation is already at targets, but col inflation service inflation is still somewhat sticky. You can talk about some of the tailor swift effect and labor market a wage as well, but broadly we see better behaving inflation and I think that's what gave the Bank of England comfort to cut rates. We think that there is more room for them to cut than the fat because of a structurally weaker growth outlook, which is why we prefer guilts over treasuries.

Well, Bank of England is very interesting, right, so hasline inflation is already at targets, but col inflation service inflation is still somewhat sticky. You can talk about some of the tailor swift effect and labor market a wage as well, but broadly we see better behaving inflation and I think that's what gave the Bank of England comfort to cut rates. We think that there is more room for them to cut than the fat because of a structurally weaker growth outlook, which is why we prefer guilts over treasuries.

Right, welly, we want you to come back for the next segment. I really want to focus on Asia and China with your immense skill and heritage there.

Right, welly, we want you to come back for the next segment. I really want to focus on Asia and China with your immense skill and heritage there.

But I got to asked the question.

But I got to asked the question.

You stumbled into it, and I hope that your badge works at black Rock.

You stumbled into it, and I hope that your badge works at black Rock.

This morning you mentioned gold without cash flows. That reminds me of bitcoin.

This morning you mentioned gold without cash flows. That reminds me of bitcoin.

Is bitcoin developing as a gold equivalent.

Is bitcoin developing as a gold equivalent.

Well, what we have seen is that it has the ability to demonstrate a huge price appreciation but also depreciation, right, so basically a lot of volatility. So I think a case can be made, A tactical case can be made for bitcoin from a speculative kind of perspective, not unlike venture cap capital type of investment. But again, it's really hard to think about kind of the longer term allocation because there's no future cash flowing.

Well, what we have seen is that it has the ability to demonstrate a huge price appreciation but also depreciation, right, so basically a lot of volatility. So I think a case can be made, A tactical case can be made for bitcoin from a speculative kind of perspective, not unlike venture cap capital type of investment. But again, it's really hard to think about kind of the longer term allocation because there's no future cash flowing.

There's no future care.

There's no future care.

I don't know how she gets launched Blackrock with because they're likely first in the easiest I bust in your chaps, Wally, I'm sorry, welly, what's the character of this ballmarket we have? The rebound in video is gone from a one oh four to a one twenty three.

I don't know how she gets launched Blackrock with because they're likely first in the easiest I bust in your chaps, Wally, I'm sorry, welly, what's the character of this ballmarket we have? The rebound in video is gone from a one oh four to a one twenty three.

Is this an AI celebration.

Is this an AI celebration.

Well, let's not forget the AI nervousness that characterized the fuel trading days before Yesterday. Is meaningful rebound. So I think what we're experiencing right now is the code feet that we're now used to before PEG companies reporting earnings. This is the sixth quarter of chat GPT error and every quarter they come in, they beat, and markets kind of get reassured. Similar to April, market's got nervous, and then the earnings were okay, and then we continue to go from strength to strength. I think this is what we're seeing right now. In Vidia is not reporting until end of August, so I think there is still a lot of anxiety, but excitement as well.

Well, let's not forget the AI nervousness that characterized the fuel trading days before Yesterday. Is meaningful rebound. So I think what we're experiencing right now is the code feet that we're now used to before PEG companies reporting earnings. This is the sixth quarter of chat GPT error and every quarter they come in, they beat, and markets kind of get reassured. Similar to April, market's got nervous, and then the earnings were okay, and then we continue to go from strength to strength. I think this is what we're seeing right now. In Vidia is not reporting until end of August, so I think there is still a lot of anxiety, but excitement as well.

Can the tenure yield go under four percent? And how does our world change with a three ninety eight ten year yield?

Can the tenure yield go under four percent? And how does our world change with a three ninety eight ten year yield?

Well, I think four percent three ninety eight these are psychologically important levels. But we're talking about not far from where we are right So given how volatile rates have been, I think it's possible that you can break four percent, especially given the pricing momentum. But I think the big picture here is important, which is number one, rates have been very volatile. Markets have been swinging from one narrative to the other narrative in very quick succession. So I think expect volosildia number two. Once we look through that VOLATILIZI still're talking about higher than three pandemic rate levels because of structurally inflationary forces. Let's not forget that.

Well, I think four percent three ninety eight these are psychologically important levels. But we're talking about not far from where we are right So given how volatile rates have been, I think it's possible that you can break four percent, especially given the pricing momentum. But I think the big picture here is important, which is number one, rates have been very volatile. Markets have been swinging from one narrative to the other narrative in very quick succession. So I think expect volosildia number two. Once we look through that VOLATILIZI still're talking about higher than three pandemic rate levels because of structurally inflationary forces. Let's not forget that.

With this Waley of black Rock, and of course with all of her heritage from China, her ability to win their most prestigious mathematics event two years in a row. Extraordinary, thrilled she could join us.

With this Waley of black Rock, and of course with all of her heritage from China, her ability to win their most prestigious mathematics event two years in a row. Extraordinary, thrilled she could join us.

Today, Wally.

Today, Wally.

In twenty fifteen, I walked down the stairs at the Metropolitan Museum of Art and they're in a phenomenal a show. China through the looking Glass was one of the few extent nineteen sixties Chinese military uniforms. I guess they're extremely rare, and it was from a China from another time and place. There's talk that President g wants to take elements of the malpast and drag it forward. Do you see that in any way that after the Planum, China wants to revert to a sixties or dare I say a fifties model?

In twenty fifteen, I walked down the stairs at the Metropolitan Museum of Art and they're in a phenomenal a show. China through the looking Glass was one of the few extent nineteen sixties Chinese military uniforms. I guess they're extremely rare, and it was from a China from another time and place. There's talk that President g wants to take elements of the malpast and drag it forward. Do you see that in any way that after the Planum, China wants to revert to a sixties or dare I say a fifties model?

Tom.

Tom.

It doesn't take a math olympiads to see that growth in China is slowing down, right, You look at the latest Taichien PMI print that decreased versus the previous print following disappointing Q two growth number. To your point, Plannont came and went, State Council came and went, and Politburo came and went, and they all paint a similar picture, which is that they would support growth in a kind of bite size fashion, including surprise Raycots, but we're not talking about big Badjuka. So yes, we're looking at maybe around five percent growth for this year, which is their targets. But there is a huge amount of focus around median term reform and that is a tradeoff median term progress versus the near term, near term growth, which is why we have a neutral allocation despite the appealing valuation opportunities in China.

It doesn't take a math olympiads to see that growth in China is slowing down, right, You look at the latest Taichien PMI print that decreased versus the previous print following disappointing Q two growth number. To your point, Plannont came and went, State Council came and went, and Politburo came and went, and they all paint a similar picture, which is that they would support growth in a kind of bite size fashion, including surprise Raycots, but we're not talking about big Badjuka. So yes, we're looking at maybe around five percent growth for this year, which is their targets. But there is a huge amount of focus around median term reform and that is a tradeoff median term progress versus the near term, near term growth, which is why we have a neutral allocation despite the appealing valuation opportunities in China.

From where you said and the experts of Blackrock, I just don't want to put this on you, but do you see them going back to the standard formula of state enterprises, is being the solution manufacturing industrial production or can they actually jump start and make permanent a consumer revolution.

From where you said and the experts of Blackrock, I just don't want to put this on you, but do you see them going back to the standard formula of state enterprises, is being the solution manufacturing industrial production or can they actually jump start and make permanent a consumer revolution.

Well, consumer savings rate is one of the reasons why they need to support Nearton growth because coming out of the pandemic, consumers have not really boosted growth the way that US consumers have and European consumers have. And this is really in the context of high youth employment rate, in the context of aging population, in the context of still lingering deflationary fears, So consumers are not really kind of picking up the battle, so to speak. And we have seen manufacturing inside of things having to do more heavy lifting. So indeed, I think we need to really kind of think about how far consumers can support the economy. And this is also why over the longer term, we're looking at Chinese growth with a three handle by the end of the decade because of the structural Stile is talking about.

Well, consumer savings rate is one of the reasons why they need to support Nearton growth because coming out of the pandemic, consumers have not really boosted growth the way that US consumers have and European consumers have. And this is really in the context of high youth employment rate, in the context of aging population, in the context of still lingering deflationary fears, So consumers are not really kind of picking up the battle, so to speak. And we have seen manufacturing inside of things having to do more heavy lifting. So indeed, I think we need to really kind of think about how far consumers can support the economy. And this is also why over the longer term, we're looking at Chinese growth with a three handle by the end of the decade because of the structural Stile is talking about.

So, you know, it seems like their policy here of isolating themselves, whether it's from a technology perspective or just an overall economic perspective, whether it be in the context of US tariffs, European tariffs, I just don't see how the Chinese government feels like that is a viable long term strategy. It would seem like they would want to integrate with the global economy, not isolate themselves. Is that part of your neutral call?

So, you know, it seems like their policy here of isolating themselves, whether it's from a technology perspective or just an overall economic perspective, whether it be in the context of US tariffs, European tariffs, I just don't see how the Chinese government feels like that is a viable long term strategy. It would seem like they would want to integrate with the global economy, not isolate themselves. Is that part of your neutral call?

This is actually one of our mega forces that black Rock has identified. Geopolitical fragmentation. Isolationist policies are possible, not just in China, but you look at what's happening globally, you look at what could happen in the US as well, And this is why we're looking at an environment where spheres of influences are moving further apart. The fragmentation of supply chains creating inflationary pressure. This is also why, even though we have had the last quarter of inflation better behaving downside surprises, we think inflation is likely going to actually settle at a higher level compared to before because of frictions coming from isolationism, coming from the fragmentation of supply chain, duplication of supply chain. So really, inflation protecting portfolios is what we're thinking about for strategic as allocation.

This is actually one of our mega forces that black Rock has identified. Geopolitical fragmentation. Isolationist policies are possible, not just in China, but you look at what's happening globally, you look at what could happen in the US as well, And this is why we're looking at an environment where spheres of influences are moving further apart. The fragmentation of supply chains creating inflationary pressure. This is also why, even though we have had the last quarter of inflation better behaving downside surprises, we think inflation is likely going to actually settle at a higher level compared to before because of frictions coming from isolationism, coming from the fragmentation of supply chain, duplication of supply chain. So really, inflation protecting portfolios is what we're thinking about for strategic as allocation.

Again, really, and not depend just on you, but the greatest thinkers at Blackrock globally, and I know you've got a huge Asian presence. You just set a three handle on a run rate of China growth. I believe what does that do to Vietnam? Frankly, what does that do to Japan? That's an entirely new Asian regime, isn't it.

Again, really, and not depend just on you, but the greatest thinkers at Blackrock globally, and I know you've got a huge Asian presence. You just set a three handle on a run rate of China growth. I believe what does that do to Vietnam? Frankly, what does that do to Japan? That's an entirely new Asian regime, isn't it.

Well, what we have seen is whilst the experts from exports from China to the US has decreased, the export from Mexico, for example, to the US have overtaken that from China. So I think there is a restructuring of supply chain and trade relationships. Day is happening. It takes time, but it is happening. So likes of Vnam you talked about, but India and also Middle East and Mexico for them matter are likely going to benefits as we think about this fragmentation of the geopolitical relationships and a fragmentation of supply chains, but elevating on a higher level, So that's one of the mega forces. Other mega forces like aging population also benefits these countries that I just talked about. So really think about international diversification as we think about portfolio construction in the context of everything that we distached.

Well, what we have seen is whilst the experts from exports from China to the US has decreased, the export from Mexico, for example, to the US have overtaken that from China. So I think there is a restructuring of supply chain and trade relationships. Day is happening. It takes time, but it is happening. So likes of Vnam you talked about, but India and also Middle East and Mexico for them matter are likely going to benefits as we think about this fragmentation of the geopolitical relationships and a fragmentation of supply chains, but elevating on a higher level, So that's one of the mega forces. Other mega forces like aging population also benefits these countries that I just talked about. So really think about international diversification as we think about portfolio construction in the context of everything that we distached.

Willie, I seen you in the Blackrock research. You guys are overweight Japan, and that's something I have heard in a long time.

Willie, I seen you in the Blackrock research. You guys are overweight Japan, and that's something I have heard in a long time.

Yes, we have been overweighted Japan for quite a long time now. We prefer Japanese equities over JGB Japanese government bondes. What we have seen this week is Bank of Japan indicating that they are likely going to move faster on the path of normalzation. And this is important because the destination hasn't changed. Is the speed off normalization that seems to be faster. But my most important takeaway from the BOJ this week is that the backstop is still in place. If data does not give them comfort to move fast, they would slow down. So as important as we think about the Japan call, but certainly risks have increased because of the faster pace of normalization. I would know though US dollar Japanese applees is just one percent lower compared to the peak, So we like Japan on a currency hatched basis for that reason.

Yes, we have been overweighted Japan for quite a long time now. We prefer Japanese equities over JGB Japanese government bondes. What we have seen this week is Bank of Japan indicating that they are likely going to move faster on the path of normalzation. And this is important because the destination hasn't changed. Is the speed off normalization that seems to be faster. But my most important takeaway from the BOJ this week is that the backstop is still in place. If data does not give them comfort to move fast, they would slow down. So as important as we think about the Japan call, but certainly risks have increased because of the faster pace of normalization. I would know though US dollar Japanese applees is just one percent lower compared to the peak, So we like Japan on a currency hatched basis for that reason.

This has been wonderful Wayley, thank you so much, particularly in the comments on China. Jumana Bratacci. We are thrilled that she's in Dubai driving all of our Middle Eastern coverage with the leadership of Horizon in her program there, but far more the spirit of speaking to people across the Middle East, and we speak now with Juma about her Lebanon and about what we see in Israel and such. Jumana, first of all, to your many many contexts in Lebanon, the tension north of Israel right now, the tension in Lebanon, give us a description of that.

This has been wonderful Wayley, thank you so much, particularly in the comments on China. Jumana Bratacci. We are thrilled that she's in Dubai driving all of our Middle Eastern coverage with the leadership of Horizon in her program there, but far more the spirit of speaking to people across the Middle East, and we speak now with Juma about her Lebanon and about what we see in Israel and such. Jumana, first of all, to your many many contexts in Lebanon, the tension north of Israel right now, the tension in Lebanon, give us a description of that.

It's difficult to describe. I guess my size speaks for itself, but overall, tension is possibly the highest it has been in the last couple of decades. This is an extremely fraud moment for the Middle East, given the events over the last couple of days and the various fronts that are opening up, not just within Gaza, but of course now you have a new potential active front in Lebanon after the Beirut strike that took out the right hand man of the Hesbalaalider a couple of days ago. You have a potentially new front opening up in Iran after the air strike in Tehran the same night as the Beirut air strike. And then of course you have the ongoing Houthy attacks on the vessels. It's not for about those as well. So you've got multi dimensional hotspots opening up around the region, and there is serious concern that there is a potential slippage. One miscalculation could have this thing really blow up and end up in a scenario where all sides ends up regretting.

It's difficult to describe. I guess my size speaks for itself, but overall, tension is possibly the highest it has been in the last couple of decades. This is an extremely fraud moment for the Middle East, given the events over the last couple of days and the various fronts that are opening up, not just within Gaza, but of course now you have a new potential active front in Lebanon after the Beirut strike that took out the right hand man of the Hesbalaalider a couple of days ago. You have a potentially new front opening up in Iran after the air strike in Tehran the same night as the Beirut air strike. And then of course you have the ongoing Houthy attacks on the vessels. It's not for about those as well. So you've got multi dimensional hotspots opening up around the region, and there is serious concern that there is a potential slippage. One miscalculation could have this thing really blow up and end up in a scenario where all sides ends up regretting.

And you're reporting on horizon as you speak to Emarati leadership and for that matter, Arab leadership of the Levant, who are they supporting, who are they focused on here among the various parties.

And you're reporting on horizon as you speak to Emarati leadership and for that matter, Arab leadership of the Levant, who are they supporting, who are they focused on here among the various parties.

Interesting you raise that, tom because it's very nuanced depending on which country you speak to in the region. Now, don't forget that many of the Gulf countries actually did sign and Abraham accords in a normalization agreement with Israel back in twenty twenty that includes the UE, that includes Bahana, also includes Morocco as well, So they've been treading very carefully on the subject of the war in Gaza. Of course, Saudi Arabia as well, I've been playing a very fine line diplomatically because, as we've been reporting over the last few months, they have been working very closely on a normalization deal that would coincide with the defense deal with the US as well, So they don't want to give up on that. But what the Saudi has told us is that essentially they can't push forward with the normalization deal while there are still boots on the ground in Gaza. Other countries, you look at the likes of Egypt and Kuttar, while their role throughout all of this has been to play the role of the mediator to push forward the cs FAR discussions, and I thought it was really telling yesterday that the Prime Minister of Kutar, who also serves as their foreign minister, put out a tweet right after the killing of Ismayhanie saying that it is very difficult to push forward with these negotiations if one of the sides of the negotiators has been assassinated. So I think there's a lot of pessimism now about the future of these cs FAR.

Interesting you raise that, tom because it's very nuanced depending on which country you speak to in the region. Now, don't forget that many of the Gulf countries actually did sign and Abraham accords in a normalization agreement with Israel back in twenty twenty that includes the UE, that includes Bahana, also includes Morocco as well, So they've been treading very carefully on the subject of the war in Gaza. Of course, Saudi Arabia as well, I've been playing a very fine line diplomatically because, as we've been reporting over the last few months, they have been working very closely on a normalization deal that would coincide with the defense deal with the US as well, So they don't want to give up on that. But what the Saudi has told us is that essentially they can't push forward with the normalization deal while there are still boots on the ground in Gaza. Other countries, you look at the likes of Egypt and Kuttar, while their role throughout all of this has been to play the role of the mediator to push forward the cs FAR discussions, and I thought it was really telling yesterday that the Prime Minister of Kutar, who also serves as their foreign minister, put out a tweet right after the killing of Ismayhanie saying that it is very difficult to push forward with these negotiations if one of the sides of the negotiators has been assassinated. So I think there's a lot of pessimism now about the future of these cs FAR.

Talks and Dremono. You mentioned, you know, some of the countries Asa Kutar that are trying to act as mediators, but it appears at this point the Israel has had no interest in pursuing peace or at this moment even you know, thinking about their relations with the US. Is that a concern in your part of the.

Talks and Dremono. You mentioned, you know, some of the countries Asa Kutar that are trying to act as mediators, but it appears at this point the Israel has had no interest in pursuing peace or at this moment even you know, thinking about their relations with the US. Is that a concern in your part of the.

World, It's definitely a concern. I think there are many analysts out there who are questioning the full faith of the Israeli government to actually engage in these cease fire discussions. We know that there have been several many diplomatic attempts to push forward to the discussions. Even Sector of State Anthony Blincoln has been in Asia this past week, and he gave some comments in Malaysia overnight saying the path that the region is on is towards more conflict. It has to make the right choices in the day ahead, because those choices are the difference between staying on this path of violence, of insecurity of suffering, or moving on to something very different and much better. So the US are still trying very hard to push forward to these discussions. France, Germany or other countries looking to get involved as well. And the feedback from the qataris even though they're pessimistic, they still want to push on. But the question, the other question is who is going to be representing Hamas because two of the most senior figures have been eliminated in the last two days.

World, It's definitely a concern. I think there are many analysts out there who are questioning the full faith of the Israeli government to actually engage in these cease fire discussions. We know that there have been several many diplomatic attempts to push forward to the discussions. Even Sector of State Anthony Blincoln has been in Asia this past week, and he gave some comments in Malaysia overnight saying the path that the region is on is towards more conflict. It has to make the right choices in the day ahead, because those choices are the difference between staying on this path of violence, of insecurity of suffering, or moving on to something very different and much better. So the US are still trying very hard to push forward to these discussions. France, Germany or other countries looking to get involved as well. And the feedback from the qataris even though they're pessimistic, they still want to push on. But the question, the other question is who is going to be representing Hamas because two of the most senior figures have been eliminated in the last two days.

Jermin I got one minute left and I just want to take advantage of your encyclopedic knowledge of Lebanon. I get out a map like an ugly American, and I'm shocked that Haifa is sixty seventy miles from Bayrout. The distance, folks, are so short. How far do you perceive that Israel would move north across the Lebanese border? Is it one or two miles like Syria and Turkey or do they move into the suburbs.

Jermin I got one minute left and I just want to take advantage of your encyclopedic knowledge of Lebanon. I get out a map like an ugly American, and I'm shocked that Haifa is sixty seventy miles from Bayrout. The distance, folks, are so short. How far do you perceive that Israel would move north across the Lebanese border? Is it one or two miles like Syria and Turkey or do they move into the suburbs.

Of Bay Route.

Of Bay Route.

So the short answer is there was a war in two thousand and six eleven. In two thousand and six, a July war, and on the back of that it was very costly war for both sides. A resolution was put in place called Resolution seventeen on one, which dictated that Hesbola has to move about thirty kilometers away from the southern border north of the Litani River and give up its arms. Obviously, the resolution hasn't been iplemented, but the analyst within the community will say, Israel, I'm not going to stop until seventeen oh one is implemented. And even the prime minister, the Lebanese Prime Minister, is saying it's time for seventeen oh one to be implemented. So they just want to push back.

So the short answer is there was a war in two thousand and six eleven. In two thousand and six, a July war, and on the back of that it was very costly war for both sides. A resolution was put in place called Resolution seventeen on one, which dictated that Hesbola has to move about thirty kilometers away from the southern border north of the Litani River and give up its arms. Obviously, the resolution hasn't been iplemented, but the analyst within the community will say, Israel, I'm not going to stop until seventeen oh one is implemented. And even the prime minister, the Lebanese Prime Minister, is saying it's time for seventeen oh one to be implemented. So they just want to push back.

Hazballah, do you say that Jumana does that she stays in kilometers.

Hazballah, do you say that Jumana does that she stays in kilometers.

We're nationwide in America.

We're nationwide in America.

I think my math is the American ac is eighteen miles is what we were translating.

I think my math is the American ac is eighteen miles is what we were translating.

They are lost in translations.

They are lost in translations.

Jumana Bitteci, thank you as so much, particularly for those comments on your levin and she, of course delivers Horizon each and every day in Dubai. Joining us now Wendy Schiller with the history of this of course at Brown University in the tub and Center. Wendy, I think I said to you an hour or two ago. I can't remember you know what Tom Hanks. Tom Hanks moved in a prisoner's swap. But as I see the names leaking out, speculation of who these names are, what is the difference between the prisoners America and the Allies are getting versus the prisoners that Russia is getting.

Jumana Bitteci, thank you as so much, particularly for those comments on your levin and she, of course delivers Horizon each and every day in Dubai. Joining us now Wendy Schiller with the history of this of course at Brown University in the tub and Center. Wendy, I think I said to you an hour or two ago. I can't remember you know what Tom Hanks. Tom Hanks moved in a prisoner's swap. But as I see the names leaking out, speculation of who these names are, what is the difference between the prisoners America and the Allies are getting versus the prisoners that Russia is getting.

Well, the only thing we can interpret right now with the knowledge we have, is that Putent values the release of these prisoners.

Well, the only thing we can interpret right now with the knowledge we have, is that Putent values the release of these prisoners.

Either for domestic reasons.

Either for domestic reasons.

It could be internal politics within his own government. He wants to show a that he can still be a partner with other nations in reasonable negotiations in his mind, and you can say that people were unduly detained in Russia, the American hostages in particular. But nonetheless he is portraying the image of somebody that people can work with. And I don't think the timing is accidental. I think it's an adjustment to what's going on in the American political scene right now at the presidential level. And also, you know, I think it reflects a little bit of the stalemate in Ukraine.

It could be internal politics within his own government. He wants to show a that he can still be a partner with other nations in reasonable negotiations in his mind, and you can say that people were unduly detained in Russia, the American hostages in particular. But nonetheless he is portraying the image of somebody that people can work with. And I don't think the timing is accidental. I think it's an adjustment to what's going on in the American political scene right now at the presidential level. And also, you know, I think it reflects a little bit of the stalemate in Ukraine.

Okay, I'm going to go there, because you went there, Professor Schiller. Are you suggesting that this was sped up because of the advent of Vice President Harris into our presidential race.

Okay, I'm going to go there, because you went there, Professor Schiller. Are you suggesting that this was sped up because of the advent of Vice President Harris into our presidential race.

I think that Putin recognizes he wants to be in the mix with whoever wins the selection, and he doesn't really gain from being demonized by the Democrats.

I think that Putin recognizes he wants to be in the mix with whoever wins the selection, and he doesn't really gain from being demonized by the Democrats.

Biden, certainly, being what we call old school in terms of.

Biden, certainly, being what we call old school in terms of.

Sort of a Cold War and a product of the Cold War, was doing quite a bit of that. I don't think Harris will focus as much on that, and certainly Trump doesn't do it at all.

Sort of a Cold War and a product of the Cold War, was doing quite a bit of that. I don't think Harris will focus as much on that, and certainly Trump doesn't do it at all.

So Poten wants to end up somewhere in.

So Poten wants to end up somewhere in.

The middle of that of that intellectual framing on what kind of partner he can be and what really plays in the world.

The middle of that of that intellectual framing on what kind of partner he can be and what really plays in the world.

Tommy, have a read headline across the Bloomberg terminal correct Wall Street Journal reporter to be really by Russia in prisoner swap. So again, as you highlighted, tom this is a fluid situation.

Tommy, have a read headline across the Bloomberg terminal correct Wall Street Journal reporter to be really by Russia in prisoner swap. So again, as you highlighted, tom this is a fluid situation.

It's a fluid situation. I really want to emphasize this.

It's a fluid situation. I really want to emphasize this.

We believe in Bloomberg we don't do rumor, we don't do speculation, but we're going to aggregate in legitimate news sources, and we're doing that right now with the leadership of our Jennifer Jacobs at Bloomberg News.

We believe in Bloomberg we don't do rumor, we don't do speculation, but we're going to aggregate in legitimate news sources, and we're doing that right now with the leadership of our Jennifer Jacobs at Bloomberg News.

Incredibly fluid situation.

Incredibly fluid situation.

All right, let's move on Wendy, we're right smack in the middle of this very contentious presidential election race. The next issue I guess for VP Harris is to pick a vice presidential candidate. What's the latest on that.

All right, let's move on Wendy, we're right smack in the middle of this very contentious presidential election race. The next issue I guess for VP Harris is to pick a vice presidential candidate. What's the latest on that.

Well, we've heard that the governor of Pennsylvania, Joshapiro, I believe, is meeting or talking.

Well, we've heard that the governor of Pennsylvania, Joshapiro, I believe, is meeting or talking.

You reported that onto her team.

You reported that onto her team.

If I had to guess, it's it's down to Mark Kelly and Josh Shapiro.

If I had to guess, it's it's down to Mark Kelly and Josh Shapiro.

It's easier to take a senator out of a state. Arizona has a law that says the governor has to replace.

It's easier to take a senator out of a state. Arizona has a law that says the governor has to replace.

A senator with the same party person, so the Democrats don't lose a seat and a special election or general election and won't be helpful two more years for that seat. So the Democrats actually are okay if Kelly leaves Arizona. But Pennsylvania is I think a little trickier to estimate.

A senator with the same party person, so the Democrats don't lose a seat and a special election or general election and won't be helpful two more years for that seat. So the Democrats actually are okay if Kelly leaves Arizona. But Pennsylvania is I think a little trickier to estimate.

Is Josh Bureau stronger for Kamala.

Is Josh Bureau stronger for Kamala.

Harris in Pennsylvania as governor with the machine that he's built to win the governorship two years ago, or is he better on a ticket to bring Pennsylvania but also other states like Pennsylvania, And I think he's also an observant Jewish person.

Harris in Pennsylvania as governor with the machine that he's built to win the governorship two years ago, or is he better on a ticket to bring Pennsylvania but also other states like Pennsylvania, And I think he's also an observant Jewish person.

He has made that part of his persona.

He has made that part of his persona.

It is resonated not only with Jewish munny, but also with religious people have different religious backgrounds.

It is resonated not only with Jewish munny, but also with religious people have different religious backgrounds.

He talks about his faith a lot. So whether that's good for Harris or not, We're not sure.

He talks about his faith a lot. So whether that's good for Harris or not, We're not sure.

I have never written a song about this, but I'm going to go there, Professor Schuler. In nineteen sixty, my mother took me out to see Richard Nixon with a three day beard will Republicans cigars, and there were a beautiful spring morning with jfk in a lovely blue silk suit and Missus Kennedy next to him. And guess what. The entire uproar where I lived was.

I have never written a song about this, but I'm going to go there, Professor Schuler. In nineteen sixty, my mother took me out to see Richard Nixon with a three day beard will Republicans cigars, and there were a beautiful spring morning with jfk in a lovely blue silk suit and Missus Kennedy next to him. And guess what. The entire uproar where I lived was.

Omg, he's Catholic.

Omg, he's Catholic.

And to speak to you in Providence and Brown University, folks, I hate to say that was a huge deal. Then, with great respect, Wendy Schiller, are we going to have a huge deal if it's a Harris Shapiro ticket?

And to speak to you in Providence and Brown University, folks, I hate to say that was a huge deal. Then, with great respect, Wendy Schiller, are we going to have a huge deal if it's a Harris Shapiro ticket?

Yeah, I mean I think that's a factor.

Yeah, I mean I think that's a factor.

I mean, nobody should put their head in the sand and say, you know someone who's a woman of color and a Jewish candidate.

I mean, nobody should put their head in the sand and say, you know someone who's a woman of color and a Jewish candidate.

Now Lieberman was Jewish ram.

Now Lieberman was Jewish ram.

With Gore Goodtories, thank you.

With Gore Goodtories, thank you.

Right, you know, so we've had that before, and you are not only time, you're right about nineteen sixty, but certainly the primaries, the very few primaries that they had the Democrats before that, Hubert Humphrey made an issue of JFK's Catholicism, So you know, it wasn't just an issue in America, was an issue in the Democratic Party at that time.

Right, you know, so we've had that before, and you are not only time, you're right about nineteen sixty, but certainly the primaries, the very few primaries that they had the Democrats before that, Hubert Humphrey made an issue of JFK's Catholicism, So you know, it wasn't just an issue in America, was an issue in the Democratic Party at that time.

So yes, I think.

So yes, I think.

And also let's not forget Israel, Gaza and the disaffected younger voters and also people in Michigan of Palstinian and arascent. You know, how will that play. Josh Burou is a strong about sport of Israel. You know, if you have to weigh who's going to bring you votes, who's going to lose your votes? You know, if you have to think about neutrality, I think Mark Kelly is a more neutral choice than Joshapiro.

And also let's not forget Israel, Gaza and the disaffected younger voters and also people in Michigan of Palstinian and arascent. You know, how will that play. Josh Burou is a strong about sport of Israel. You know, if you have to weigh who's going to bring you votes, who's going to lose your votes? You know, if you have to think about neutrality, I think Mark Kelly is a more neutral choice than Joshapiro.

And Joshapiro himself may be thinking of running in twenty eight Can he win through election in twenty six? So very complicated calculating.