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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. We begin our coverage now of what's going on in Washington. David gerrodrig VILLI A to B with us. Later we start strowing from Brown University, the Taubmann Center. Wendy Schiller, who, whatever your political persuasion, has really given us historical perspective. Wendy, I read every word of the Wall Street Journal TikTok this morning, and I'm assume they interviewed forty people. Blah blah blah. This goes on forever about the ageless battle of hiding a fragile president's health. Can you compare this to Woodrow Wilson. Can you compare it to other moments in history or is this original territory for our listeners and viewers With President.

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. We begin our coverage now of what's going on in Washington. David gerrodrig VILLI A to B with us. Later we start strowing from Brown University, the Taubmann Center. Wendy Schiller, who, whatever your political persuasion, has really given us historical perspective. Wendy, I read every word of the Wall Street Journal TikTok this morning, and I'm assume they interviewed forty people. Blah blah blah. This goes on forever about the ageless battle of hiding a fragile president's health. Can you compare this to Woodrow Wilson. Can you compare it to other moments in history or is this original territory for our listeners and viewers With President.

Biden, good morning time, Good morning, Paul.

Biden, good morning time, Good morning, Paul.

I think you might compare it to Ronald Reagan more than Woodrow Wilson, simply because of the media access and of course, you know, you start to have much more talk radio, you have the nascent c Span cable, but you have sort of media full force and objective theoretically, as you know, when Drow Wilson was president in the early part of the twentieth century, the media was not quote unquote objective.

I think you might compare it to Ronald Reagan more than Woodrow Wilson, simply because of the media access and of course, you know, you start to have much more talk radio, you have the nascent c Span cable, but you have sort of media full force and objective theoretically, as you know, when Drow Wilson was president in the early part of the twentieth century, the media was not quote unquote objective.

It was fairly part isn't slanted. So now you're.

It was fairly part isn't slanted. So now you're.

Looking at Ronald Reagan and starting in eighty forty five, he runs again. Obviously in eighty forty wins quite handily, but you can see more handling going on. You know, me may not have seen it now, you know, with Biden in the same exact way, because Reagan could pull it off. But we know that he was compromised. We know that he was in the beginning stages of Alzheimer's, and we.

Looking at Ronald Reagan and starting in eighty forty five, he runs again. Obviously in eighty forty wins quite handily, but you can see more handling going on. You know, me may not have seen it now, you know, with Biden in the same exact way, because Reagan could pull it off. But we know that he was compromised. We know that he was in the beginning stages of Alzheimer's, and we.

Know that his staff covered it up.

Know that his staff covered it up.

So we know all that now and so it just makes I think the media far more suspicious of the Biden administration. Anybody who sort of experienced the Reagan administration understanding how much can be quote unquote covered up with a president that may not be one hundred percent on his game.

So we know all that now and so it just makes I think the media far more suspicious of the Biden administration. Anybody who sort of experienced the Reagan administration understanding how much can be quote unquote covered up with a president that may not be one hundred percent on his game.

What are you watching? I mean, it's a blur. Paul's watching certain things. I'm watching certain things. We're all our heads are spinning over this. What is Professor Schiller watching? Tick by tick? What is the thing that focuses.

What are you watching? I mean, it's a blur. Paul's watching certain things. I'm watching certain things. We're all our heads are spinning over this. What is Professor Schiller watching? Tick by tick? What is the thing that focuses.

I'm looking at the difference between our daily lives and the functioning of the federal government and all this obsession with Biden's capacity understand it's a reasonable question to ask Bernie eighty one year old president who had a disastrous debate and shows signs of aging.

I'm looking at the difference between our daily lives and the functioning of the federal government and all this obsession with Biden's capacity understand it's a reasonable question to ask Bernie eighty one year old president who had a disastrous debate and shows signs of aging.

There's no question it's fair game.

There's no question it's fair game.

But most Americans want to know is the government working or is the government not working? And you know, you're talking about inflation. We sort of get a sense it might be easy. Things are slowing, but the economy is still pretty vibrant. The question is does consumer sentiment shift in time to reward Biden for handling inflation or not?

But most Americans want to know is the government working or is the government not working? And you know, you're talking about inflation. We sort of get a sense it might be easy. Things are slowing, but the economy is still pretty vibrant. The question is does consumer sentiment shift in time to reward Biden for handling inflation or not?

And I think that's really the big determinant.

And I think that's really the big determinant.

You know, age is a big deal in the media right now, But you know, is the federal government functioning?

You know, age is a big deal in the media right now, But you know, is the federal government functioning?

Yes it is? Is it shut down? No? It isn't Is it the meeting with our NATO allies?

Yes it is? Is it shut down? No? It isn't Is it the meeting with our NATO allies?

Are we sending weapons where we need to spend weapons in the interest of the United States according to him, Yes, So that's the big disconnect is the media focus on this issue, whereas the rest of the country kind of experience is the federal government and says, right now, except for inflation, it's working decently well.

Are we sending weapons where we need to spend weapons in the interest of the United States according to him, Yes, So that's the big disconnect is the media focus on this issue, whereas the rest of the country kind of experience is the federal government and says, right now, except for inflation, it's working decently well.

Wendy, I think if you talk to again most Democrats, they would say, we'll back any candidate that is best equipped to beat former President Trump. Is there any consensus who that is today or are we still trying to figure out whether it's President Biden or someone else?

Wendy, I think if you talk to again most Democrats, they would say, we'll back any candidate that is best equipped to beat former President Trump. Is there any consensus who that is today or are we still trying to figure out whether it's President Biden or someone else?

Well, that's exactly the right question I think to ask between now and November, if Biden doesn't drop out, a who runs the Democrat Party? You know, I've said before the president is the you know, digular leader of the Democratic Party, being a Democrat and being in the White House.

Well, that's exactly the right question I think to ask between now and November, if Biden doesn't drop out, a who runs the Democrat Party? You know, I've said before the president is the you know, digular leader of the Democratic Party, being a Democrat and being in the White House.

But basically we don't have any big power brokers that can really seal this deal.

But basically we don't have any big power brokers that can really seal this deal.

And second is chaos on the Democratic side if he steps down, something that's going to counter chaos on the Trump side.

And second is chaos on the Democratic side if he steps down, something that's going to counter chaos on the Trump side.

Because right now Trump doesn't look chaotic. The Republicans look unified.

Because right now Trump doesn't look chaotic. The Republicans look unified.

In fact, they're modifying their abortion stance in their platform.

In fact, they're modifying their abortion stance in their platform.

Their convention is next week.

Their convention is next week.

If it's disciplined and Trump stays on message and doesn't go off the rails, the Republicans look orderly. The Republicans look like they have acted together, and the Democrats look like they're a mess. So this is really the big problem for the Democrats. You say he will lose to Trump, But if you create more chaos around the nominee, I think you magnify or you know, expand the chances that you will lose to the Republicans because they will look, for the first time in a long time, more orderly than the Democrats.

If it's disciplined and Trump stays on message and doesn't go off the rails, the Republicans look orderly. The Republicans look like they have acted together, and the Democrats look like they're a mess. So this is really the big problem for the Democrats. You say he will lose to Trump, But if you create more chaos around the nominee, I think you magnify or you know, expand the chances that you will lose to the Republicans because they will look, for the first time in a long time, more orderly than the Democrats.

Preview for us, what you think that Democratic convention will look like, because boy, there are some crazy scenarios out there.

Preview for us, what you think that Democratic convention will look like, because boy, there are some crazy scenarios out there.

Let should send us, Yes, they should the Democratic.

Let should send us, Yes, they should the Democratic.

I mention right now, the rules of the convention and reinforced by state laws, are that the delegates pledged to Biden.

I mention right now, the rules of the convention and reinforced by state laws, are that the delegates pledged to Biden.

Have to vote for Biden on the first ballot.

Have to vote for Biden on the first ballot.

They can risk, you know, sort of being penalized or possibly criminalized if they don't.

They can risk, you know, sort of being penalized or possibly criminalized if they don't.

But that's the deal that we have now.

But that's the deal that we have now.

Could Biden strategically announce, let's say nine o'clock next Thursday night or something, maybe right when Trump is making his acceptance speech that he is not running and that he's giving his delegates to Kamala Harris. He could do that, or he could wait till the following Monday, and that becomes the news story, and that becomes a brillion Yeah, I wish.

Could Biden strategically announce, let's say nine o'clock next Thursday night or something, maybe right when Trump is making his acceptance speech that he is not running and that he's giving his delegates to Kamala Harris. He could do that, or he could wait till the following Monday, and that becomes the news story, and that becomes a brillion Yeah, I wish.

You could go on for an hour, Paul asked a smart question. It's a brilliant answer.

You could go on for an hour, Paul asked a smart question. It's a brilliant answer.

If we get that the former presidents in this Milwaukee moment, the Democrats come out and say, blah blah blah, whatever the Harris. What will be the response of mainline Democrats. What will be the response southwest of Pittsburgh.

If we get that the former presidents in this Milwaukee moment, the Democrats come out and say, blah blah blah, whatever the Harris. What will be the response of mainline Democrats. What will be the response southwest of Pittsburgh.

What will be the response in West Virginia? What will be the response in Las Vegas of moderate, normal Democrats, not the elites.

What will be the response in West Virginia? What will be the response in Las Vegas of moderate, normal Democrats, not the elites.

I think it might be some trepidation, but a sigh of relief that you won't have chaos, you won't have protests in Chicago, you won't have you know, Bernie Sanders was Warren running around sort of.

I think it might be some trepidation, but a sigh of relief that you won't have chaos, you won't have protests in Chicago, you won't have you know, Bernie Sanders was Warren running around sort of.

Figuring out who they want.

Figuring out who they want.

You won't have the appearance of dysfunction, You'll have orderly succession.

You won't have the appearance of dysfunction, You'll have orderly succession.

She's the vice president of the United States. Now.

She's the vice president of the United States. Now.

We asked me what they'll think in Detroit, in Pittsburgh, as you mentioned, in Philadelphia, in Georgia, which is not in play right now. But if Kamla Ris is at the top of the ticket for the Democrats, it's back in play in.

We asked me what they'll think in Detroit, in Pittsburgh, as you mentioned, in Philadelphia, in Georgia, which is not in play right now. But if Kamla Ris is at the top of the ticket for the Democrats, it's back in play in.

North Carolina more than a million black voters, you know.

North Carolina more than a million black voters, you know.

Ask me about those states if Kamla Ris is the head of the ticket and what Democrats can figure out about voter mobilization, which they're not doing successfully now, but they could theoretically she's at the top of the ticket.

Ask me about those states if Kamla Ris is the head of the ticket and what Democrats can figure out about voter mobilization, which they're not doing successfully now, but they could theoretically she's at the top of the ticket.

Wendy YouTube live chat lights up like a candle when you're on. Thank you so much, Wendy Schiller of the Topman Center joining us. So, Sarah Hunt, she's an Alpine sexon Wood's important investment management and I gotta believe I think a Lael brainer with economics at Wesleyan as well. It really prepared you to study artificial intelligence. I mean, you're a mere mortal. You're running a portfolio, are you doing well, like you got a first six six six months statistic.

Wendy YouTube live chat lights up like a candle when you're on. Thank you so much, Wendy Schiller of the Topman Center joining us. So, Sarah Hunt, she's an Alpine sexon Wood's important investment management and I gotta believe I think a Lael brainer with economics at Wesleyan as well. It really prepared you to study artificial intelligence. I mean, you're a mere mortal. You're running a portfolio, are you doing well, like you got a first six six six months statistic.

It's been it's been a good it's been a good year. We have several different strategies. We are ahead of the S and P and a couple and about about tracking it with in the game. It's a good year.

It's been it's been a good it's been a good year. We have several different strategies. We are ahead of the S and P and a couple and about about tracking it with in the game. It's a good year.

Yet, how does a mere mortal, including all of our listeners study the future of AI? Where one report is it's all fiction, gold and sex with a note it's all fiction, We're all gonna die, and another one saying say that, who's the guy that dresses fancy in the colors?

Yet, how does a mere mortal, including all of our listeners study the future of AI? Where one report is it's all fiction, gold and sex with a note it's all fiction, We're all gonna die, and another one saying say that, who's the guy that dresses fancy in the colors?

Oh?

Oh?

Dan Dan, I's Dan eyes goes to the moon? How do you synthesize that? If you're a mere mortal with partsmen from Wesleyan University, I think you.

Dan Dan, I's Dan eyes goes to the moon? How do you synthesize that? If you're a mere mortal with partsmen from Wesleyan University, I think you.

Know a lot of what you have to do is look at what is going on right now. Right now, there's a huge spend to get the infrastructure in place to be able to utilize AI. The big question is what happens once you get that infrastructure into place? And I think to your point, that's the golden note this morning, which is questioning what is the outcome of all of this? I think in a lot of cases, what is the use cases will be are not necessarily what we're looking at now, but there may be a pause between a huge spend on the infrastructure and how those use cases play out. I think that's where the market would be more vulnerable. Right now, you have a big spend on the infrastructure, and right now that's where people are putting all their time and energy looking at things like Nvidia and the companies the data centers that will absolutely be helped by this.

Know a lot of what you have to do is look at what is going on right now. Right now, there's a huge spend to get the infrastructure in place to be able to utilize AI. The big question is what happens once you get that infrastructure into place? And I think to your point, that's the golden note this morning, which is questioning what is the outcome of all of this? I think in a lot of cases, what is the use cases will be are not necessarily what we're looking at now, but there may be a pause between a huge spend on the infrastructure and how those use cases play out. I think that's where the market would be more vulnerable. Right now, you have a big spend on the infrastructure, and right now that's where people are putting all their time and energy looking at things like Nvidia and the companies the data centers that will absolutely be helped by this.

Well that I mean, the discussion of AI brings us to maybe one of the biggest concerns for market watchers, which is the concentration of performance in this market. And then a handful of names SPX up almost seventeen percent, SPY.

Well that I mean, the discussion of AI brings us to maybe one of the biggest concerns for market watchers, which is the concentration of performance in this market. And then a handful of names SPX up almost seventeen percent, SPY.

The equal weight it up four percent. That's not good.

The equal weight it up four percent. That's not good.

Well, it's not.

Well, it's not.

It just is right.

It just is right.

It's hard to evaluate whether that's a good thing or a bad thing. Sometimes in our markets and badly sometimes they don't. I think right now, what you're seeing is the enthusiasm for a certain sector. But what that's also showing is that the balance of the market hasn't run that fast, and so the expense, how expensive that is on a bee basis, makes the rest of the market not look so expensive, which is what people.

It's hard to evaluate whether that's a good thing or a bad thing. Sometimes in our markets and badly sometimes they don't. I think right now, what you're seeing is the enthusiasm for a certain sector. But what that's also showing is that the balance of the market hasn't run that fast, and so the expense, how expensive that is on a bee basis, makes the rest of the market not look so expensive, which is what people.

Are worried about.

Are worried about.

Those tech juggernauts are not cheap, and they remain not cheap because that's what people are chasing. But the balance of the market is not insanely expensive.

Those tech juggernauts are not cheap, and they remain not cheap because that's what people are chasing. But the balance of the market is not insanely expensive.

Do you see theirs CFOs at these tech juggernauts as you call them, adjusting and taking use of cash if there's a stumble, if it's not as rosy it is expected to be. Don't They have a huge amount of AMMO and use of cash to support their share price.

Do you see theirs CFOs at these tech juggernauts as you call them, adjusting and taking use of cash if there's a stumble, if it's not as rosy it is expected to be. Don't They have a huge amount of AMMO and use of cash to support their share price.

Well, and this is also where they have a huge amount of cash to support the spend right now on that AI infrastructure. And that's why that's less of a concern because you've got so many people who have so much money to spend that. And yes, they absolutely have so much cash that should this turn into something where they don't start to see a return or they start to worry about those returns, they've got room.

Well, and this is also where they have a huge amount of cash to support the spend right now on that AI infrastructure. And that's why that's less of a concern because you've got so many people who have so much money to spend that. And yes, they absolutely have so much cash that should this turn into something where they don't start to see a return or they start to worry about those returns, they've got room.

I mean, Paul, this is really important. There's a startup company out in Washington State called Microsoft Heart of Them. They got one hundred and ten billion in cash from operations. Their capex is more than doubled to forty billion, one hundred and ten take Away forty is a seventy billion dollars free cash flow. So Cappax, as Sarah Hunt says, is ballooned. But their cash from operations is like a moot shop.

I mean, Paul, this is really important. There's a startup company out in Washington State called Microsoft Heart of Them. They got one hundred and ten billion in cash from operations. Their capex is more than doubled to forty billion, one hundred and ten take Away forty is a seventy billion dollars free cash flow. So Cappax, as Sarah Hunt says, is ballooned. But their cash from operations is like a moot shop.

Yep.

Yep.

And the question is for a lot of these big tech names is what do they do with their cash? So, Sarah, let's say, I mean Tom's all and Lisa, they're all in the big seven stocks. I unfortunately have missed that trade.

And the question is for a lot of these big tech names is what do they do with their cash? So, Sarah, let's say, I mean Tom's all and Lisa, they're all in the big seven stocks. I unfortunately have missed that trade.

Where do I go now?

Where do I go now?

I mean, do I look for other sectors? Do I try to find some value out there in the marketplace?

I mean, do I look for other sectors? Do I try to find some value out there in the marketplace?

Where do we go?

Where do we go?

Well?

Well?

I think that, like I said earlier, the rest of the market is not overly expensive. And I think that to the extent that you've had some correction in Nvidia, and you see these names do correct periodically. Is to keep an eye on that. But it is all about the cash and about the cash generation, as Tom just said, and that is I think the biggest thing. The companies that can generate cash are the ones that people gravitate to ye because they understand that that means that whatever happens, they have the wherewithal to continue to move through whatever's going on.

I think that, like I said earlier, the rest of the market is not overly expensive. And I think that to the extent that you've had some correction in Nvidia, and you see these names do correct periodically. Is to keep an eye on that. But it is all about the cash and about the cash generation, as Tom just said, and that is I think the biggest thing. The companies that can generate cash are the ones that people gravitate to ye because they understand that that means that whatever happens, they have the wherewithal to continue to move through whatever's going on.

Economically, all right, we're about to kick in.

Economically, all right, we're about to kick in.

I guess kind of Thursday into earnings mode once again. Got some airlines coming out Theresday. We've got obviously the big banks Jamie Diamond coming out of Friday. What do we look for in this earning cycle?

I guess kind of Thursday into earnings mode once again. Got some airlines coming out Theresday. We've got obviously the big banks Jamie Diamond coming out of Friday. What do we look for in this earning cycle?

I think what we're looking for, I mean Q one, the bar was people were concerned that a lot of the spending was not going to continue and there were going to be issues in Q one. Q one was fine the continuation. I think for the financials, you want to see stability and you want to make sure that things are okay there, even though you don't you do have the yield curve not necessarily helping the banks out right now, but you just want to see progression, that there's nothing going wrong in any of those places, that you're not seeing deterioration in financials and credit credit quality and credit conditions, and that people can handle what's going on on the financial front. I think you want to see progress and all of that. I think you don't want to see anybody warning big.

I think what we're looking for, I mean Q one, the bar was people were concerned that a lot of the spending was not going to continue and there were going to be issues in Q one. Q one was fine the continuation. I think for the financials, you want to see stability and you want to make sure that things are okay there, even though you don't you do have the yield curve not necessarily helping the banks out right now, but you just want to see progression, that there's nothing going wrong in any of those places, that you're not seeing deterioration in financials and credit credit quality and credit conditions, and that people can handle what's going on on the financial front. I think you want to see progress and all of that. I think you don't want to see anybody warning big.

Tell me about healthcare. If I look at United Healthcare as the ginormous entity, it's flatlined for eighteen months. Do you assume it gets back on multi decade trajectory or is there a new nude healthcare?

Tell me about healthcare. If I look at United Healthcare as the ginormous entity, it's flatlined for eighteen months. Do you assume it gets back on multi decade trajectory or is there a new nude healthcare?

Well, I think that the pandemic completely upended a lot of the healthcare spend, and I think that there was a rush into a lot of those stocks because a lot of people didn't actually spend that much on healthcare. So for something like United Health specifically, that was really great post pandemic. There's a question of, Okay, those valuations went very high, are they worth it here? And do we need to look at what's going to happen going forward. I think it's still a question of how healthcare gets utilized, and I still think that we're not in what we would call a normalized environment post the pandemic.

Well, I think that the pandemic completely upended a lot of the healthcare spend, and I think that there was a rush into a lot of those stocks because a lot of people didn't actually spend that much on healthcare. So for something like United Health specifically, that was really great post pandemic. There's a question of, Okay, those valuations went very high, are they worth it here? And do we need to look at what's going to happen going forward. I think it's still a question of how healthcare gets utilized, and I still think that we're not in what we would call a normalized environment post the pandemic.

I mean, I'm looking at the cash from operations, Paul, You're ready for this. I set one hundred and ten billion on Microsoft United Healthcare. I never would have guessed this is one ninth the size fourteen billion. Wow, one ten versus fourteen yep, And yet I would have equated it to say, half of Microsoft or something like that. Extordin every time sarahunt walks in, I learned some learn something. It's like great, make it a daily thing. Sarah On Alpine, Alpine.

I mean, I'm looking at the cash from operations, Paul, You're ready for this. I set one hundred and ten billion on Microsoft United Healthcare. I never would have guessed this is one ninth the size fourteen billion. Wow, one ten versus fourteen yep, And yet I would have equated it to say, half of Microsoft or something like that. Extordin every time sarahunt walks in, I learned some learn something. It's like great, make it a daily thing. Sarah On Alpine, Alpine.

Woods, Alpine Saxon Wood.

Woods, Alpine Saxon Wood.

Excuse me, I got it. Well, there's a type you know, maybe it's my hyghes. This is a joy if you're Jan Hatzias with all the heritage of Golden Sacks economics, going back to Ed McKelvey and a guy named Dudley now or was it the New York Fed, I should say, and Jim O'Neil in London and all it's about hiring people. And one of them is David Miracle joins us right now with Goldman Sachs, with prodigious economics and critically the dynamics of statistics at a small school up in Boston by the name of Harvard. David, thank you so much for joining us this morning. I want to combine in the dynamics of statistics into the economic guests of Goldman Sachs. The shadows that are out there right now, the uncertainties. Is elarian would say, the unknown unknowns. Are they quantifiable now or are you guessing into the future. I think you know.

Excuse me, I got it. Well, there's a type you know, maybe it's my hyghes. This is a joy if you're Jan Hatzias with all the heritage of Golden Sacks economics, going back to Ed McKelvey and a guy named Dudley now or was it the New York Fed, I should say, and Jim O'Neil in London and all it's about hiring people. And one of them is David Miracle joins us right now with Goldman Sachs, with prodigious economics and critically the dynamics of statistics at a small school up in Boston by the name of Harvard. David, thank you so much for joining us this morning. I want to combine in the dynamics of statistics into the economic guests of Goldman Sachs. The shadows that are out there right now, the uncertainties. Is elarian would say, the unknown unknowns. Are they quantifiable now or are you guessing into the future. I think you know.

Obviously, from month to month there ups and downs in the data. In the inflation data this year, notably, there were some firmer prints at the start of the year that I think exaggerated things a little bit. Last month we had much better news that maybe exaggerated things in the other direction a little bit. But you know, broadly, I think if you kind of step back, the labor markets rebalancing, inflation's coming down, the Feds getting ready to cut rates, and so, you know, while not every print kind of makes sense month to month, big picture, I think things are evolving in a way that's kind of reasonably in line with what you would expect based on economic principles and kind of what we're looking for for the year. Further, if not definitive progress on inflation and the beginning of a rate poup cycle in September.

Obviously, from month to month there ups and downs in the data. In the inflation data this year, notably, there were some firmer prints at the start of the year that I think exaggerated things a little bit. Last month we had much better news that maybe exaggerated things in the other direction a little bit. But you know, broadly, I think if you kind of step back, the labor markets rebalancing, inflation's coming down, the Feds getting ready to cut rates, and so, you know, while not every print kind of makes sense month to month, big picture, I think things are evolving in a way that's kind of reasonably in line with what you would expect based on economic principles and kind of what we're looking for for the year. Further, if not definitive progress on inflation and the beginning of a rate poup cycle in September.

To go to your statistics background, the financial media has to do not sing Tel one oh one and talk about the tails, the right tail, the left tail, the mystery, the uncertainty that's out there one two, three, four standard deviations out What is your left tail concern right now? Now? What's the worry when you're in meetings at Goldman Sex on this nation's economy.

To go to your statistics background, the financial media has to do not sing Tel one oh one and talk about the tails, the right tail, the left tail, the mystery, the uncertainty that's out there one two, three, four standard deviations out What is your left tail concern right now? Now? What's the worry when you're in meetings at Goldman Sex on this nation's economy.

I wouldn't say there's anything that looks like that big of a risk. But I think the most obvious thing to keep an eye on is that the unemployment rate has come up on a three month average basis. It's up half a percentage point. You know, as Chair Powell said last week, that leaves us in a place with unemployment just a hair above four. That is great by historical standards. But yeah, I would think you certainly don't want that to rise any further. Now. The reason I'm not that worried about it is that the Fed has a lot of room to cut interest rates if things do deteriorate further than they already have. You know, I think that would be quite unnecessary in order to solve the inflation problem, which at this point is just a matter of waiting for lagged effects to go away. I think the Fed shares that view, and so, you know, one pushback to this risk, and I think to many risks, is that if they do materialize in a more damaging way, the Fed is now at ready to cut.

I wouldn't say there's anything that looks like that big of a risk. But I think the most obvious thing to keep an eye on is that the unemployment rate has come up on a three month average basis. It's up half a percentage point. You know, as Chair Powell said last week, that leaves us in a place with unemployment just a hair above four. That is great by historical standards. But yeah, I would think you certainly don't want that to rise any further. Now. The reason I'm not that worried about it is that the Fed has a lot of room to cut interest rates if things do deteriorate further than they already have. You know, I think that would be quite unnecessary in order to solve the inflation problem, which at this point is just a matter of waiting for lagged effects to go away. I think the Fed shares that view, and so, you know, one pushback to this risk, and I think to many risks, is that if they do materialize in a more damaging way, the Fed is now at ready to cut.

So by that, I guess Russian Now, David, is it more likely in your opinion, for the Fed to wait here and maybe wait till I don't know, December or something like that.

So by that, I guess Russian Now, David, is it more likely in your opinion, for the Fed to wait here and maybe wait till I don't know, December or something like that.

You know, obviously in June we saw that Opinions were pretty mixed on the FMC, with eleven people looking for one cut or less which could mean December, and a minority eight but one that I would guess includes the leadership looking for two. My guess is that if the inflation numbers come in the way we're expecting this month, in the next couple of months, we're looking for twenty one basis points on core CPI this week. That the combination of better inflation news, an unemployment rate that's now risen half a point or so, and a chaer who last week signaled that he sounded like he was ready to cut and maybe was willing to push a little bit for that that that will add up to a cotton September.

You know, obviously in June we saw that Opinions were pretty mixed on the FMC, with eleven people looking for one cut or less which could mean December, and a minority eight but one that I would guess includes the leadership looking for two. My guess is that if the inflation numbers come in the way we're expecting this month, in the next couple of months, we're looking for twenty one basis points on core CPI this week. That the combination of better inflation news, an unemployment rate that's now risen half a point or so, and a chaer who last week signaled that he sounded like he was ready to cut and maybe was willing to push a little bit for that that that will add up to a cotton September.

David, how do you feel about the US consumer?

David, how do you feel about the US consumer?

Here?

Here?

There's a lot of concern out there that there's the haves and have nots, and maybe that divide has never been more pronounced than it is today, particularly in a world with higher inflation. How do you think about the consumer? How do you think they've felt a reserve things about the US consumer?

There's a lot of concern out there that there's the haves and have nots, and maybe that divide has never been more pronounced than it is today, particularly in a world with higher inflation. How do you think about the consumer? How do you think they've felt a reserve things about the US consumer?

Yeah, you know, look, from my perspective, a lot of the more pessimistic use have been over complicating things the last few years. We've had this year as last year, solid real income growth, we have record strong household balance sheets that to me looks like it was a pretty straightforward combination and recipe for solid consumption growth last year. It's not going to be as strong this year because job growth is slowing. Last year was exceptional. You know, we had people coming back into the labor force. We had a big immigration surge that now seems to be slowing. So I think we're basically seeing a watered down version of last year's story, where those strong fundamental drivers give us solid consumption growth. You know, I'm not that worried about some of these concerns that you raise. It's always the case that wealth, income, and consumer or distributed unequally. I don't think the current environment is that unique in that respect.

Yeah, you know, look, from my perspective, a lot of the more pessimistic use have been over complicating things the last few years. We've had this year as last year, solid real income growth, we have record strong household balance sheets that to me looks like it was a pretty straightforward combination and recipe for solid consumption growth last year. It's not going to be as strong this year because job growth is slowing. Last year was exceptional. You know, we had people coming back into the labor force. We had a big immigration surge that now seems to be slowing. So I think we're basically seeing a watered down version of last year's story, where those strong fundamental drivers give us solid consumption growth. You know, I'm not that worried about some of these concerns that you raise. It's always the case that wealth, income, and consumer or distributed unequally. I don't think the current environment is that unique in that respect.

David on a sleepy ninety degree day in Washington, where everyone's focused on the President of the United States, the NATO meetings, the Red Sox ascendant over the Yankees, David, is this a time for poll to drop a bombshell in this testimony, to really signal a shift in the vectors they see out there.

David on a sleepy ninety degree day in Washington, where everyone's focused on the President of the United States, the NATO meetings, the Red Sox ascendant over the Yankees, David, is this a time for poll to drop a bombshell in this testimony, to really signal a shift in the vectors they see out there.

I don't think so. I think it's a time for him to repeat what he said last week, which is that you know they are making progress on inflation, that they you know that he worries, as I worry, that any further deterioration in the labor market could raise unemployment more meaningfully, and that that would be a shame and unnecessary, and you know that as if you kind of read between the lines that as a result, as I interpret it, he sounds maybe a little bit more ready to cut then at least some people on the FMC. That's what he said last week. That's what I would look for this week. Nothing definitive because there's still a lot of data before.

I don't think so. I think it's a time for him to repeat what he said last week, which is that you know they are making progress on inflation, that they you know that he worries, as I worry, that any further deterioration in the labor market could raise unemployment more meaningfully, and that that would be a shame and unnecessary, and you know that as if you kind of read between the lines that as a result, as I interpret it, he sounds maybe a little bit more ready to cut then at least some people on the FMC. That's what he said last week. That's what I would look for this week. Nothing definitive because there's still a lot of data before.

That's temper met David Miracle, thank you so much. With gold and Sacks working for the young outzers. Dare you look at the front page is a Lisa Matteo our Lisa. What do you have today?

That's temper met David Miracle, thank you so much. With gold and Sacks working for the young outzers. Dare you look at the front page is a Lisa Matteo our Lisa. What do you have today?

All right?

All right?

We're talking about the Silicon Slopes.

We're talking about the Silicon Slopes.

This is in the Wall Street Journal because of the hot job market. There's a housing boom there now, and the Wall Street Journal is saying tech workers they're buying upon.

This is in the Wall Street Journal because of the hot job market. There's a housing boom there now, and the Wall Street Journal is saying tech workers they're buying upon.

This is draper Utah. Have you ever your skiing guy?

This is draper Utah. Have you ever your skiing guy?

Yes, this is out there like Park Park City, well, it's it's it's not park City, but it's that too far.

Yes, this is out there like Park Park City, well, it's it's it's not park City, but it's that too far.

Yeah, Wall satch Men's Okay.

Yeah, Wall satch Men's Okay.

So it has like a lot of open space, trails, park skiing, top schools, which is good for families, and it's not far from companies like Adobe, and it's really grown. But this also means that home prices are also exploding there. I mean, the priceiest listing about ten thousand square feet you can pay about seven point three three million dollars. But the insurance experts are saying, just be careful because of wildfires landslides that can be an issue, So just check where the house is insurance.

So it has like a lot of open space, trails, park skiing, top schools, which is good for families, and it's not far from companies like Adobe, and it's really grown. But this also means that home prices are also exploding there. I mean, the priceiest listing about ten thousand square feet you can pay about seven point three three million dollars. But the insurance experts are saying, just be careful because of wildfires landslides that can be an issue, So just check where the house is insurance.

Yeah.

Yeah.

Yeah, Now, Golden Sacks put a big, big, big facility out there, I'm gonna say ten years ago, and they have a lot of their tech people out there. So and that's I know some young folks recently that I know that recently took jobs out But isn't the.

Yeah, Now, Golden Sacks put a big, big, big facility out there, I'm gonna say ten years ago, and they have a lot of their tech people out there. So and that's I know some young folks recently that I know that recently took jobs out But isn't the.

Heart of this debate that now it's just the elites buying everything's all cash?

Heart of this debate that now it's just the elites buying everything's all cash?

Right? Well, I don't know.

Right? Well, I don't know.

I mean, I think there's there's a lot of job creation out there, so I think a lot of workers are going out there, But where are they coming from?

I mean, I think there's there's a lot of job creation out there, so I think a lot of workers are going out there, But where are they coming from?

A lot of from California, right right, and then relocated next.

A lot of from California, right right, and then relocated next.

Okay, a US city has made the top ten list of the world's best airports for twenty twenty four.

Okay, a US city has made the top ten list of the world's best airports for twenty twenty four.

All right, this is from air Help.

All right, this is from air Help.

They looked at like on time performance, customer feedback, quality of food shopping, coming in number one, Hamad International Airport and Cutter number two, Cape Town International Airport, South Africa.

They looked at like on time performance, customer feedback, quality of food shopping, coming in number one, Hamad International Airport and Cutter number two, Cape Town International Airport, South Africa.

Number three Chubu CenTra.

Number three Chubu CenTra.

Air International Airport in Japan. But the real surprise was that the US actually made that top ten list. We're talking about Utah, right, So this is Salt Lake City International Airport.

Air International Airport in Japan. But the real surprise was that the US actually made that top ten list. We're talking about Utah, right, So this is Salt Lake City International Airport.

You've been there.

You've been there.

I mean, it came into the eighth.

I mean, it came into the eighth.

Worldwide, first in the US, and so it's been making these different kind of upgrades. It's last phase completed this fall. But it just goes to show that US airport's starting to get some attention.

Worldwide, first in the US, and so it's been making these different kind of upgrades. It's last phase completed this fall. But it just goes to show that US airport's starting to get some attention.

It's a bit, it's a big, a big deal. Like Kansas City built a new airport that they feel is vital for their growth, and I believe Kansas City is basically booming. And then we see it here.

It's a bit, it's a big, a big deal. Like Kansas City built a new airport that they feel is vital for their growth, and I believe Kansas City is basically booming. And then we see it here.

I mean, you've talked about Terminal A at Newark and.

I mean, you've talked about Terminal A at Newark and.

And LaGuardia can I say it's been transformed, I'd say it's almost transformed.

And LaGuardia can I say it's been transformed, I'd say it's almost transformed.

It's like, yeah, it's a huge up grade for the.

It's like, yeah, it's a huge up grade for the.

Huge up grade, and it's gone. Why can't we do this with trains? That's what I don't get White.

Huge up grade, and it's gone. Why can't we do this with trains? That's what I don't get White.

They're trying, they're trying it.

They're trying, they're trying it.

I'm going to train in Switzerland and I'm going I don't get it.

I'm going to train in Switzerland and I'm going I don't get it.

You want to see that. You want to see Switzerland, Go to Hobok in New Jersey.

You want to see that. You want to see Switzerland, Go to Hobok in New Jersey.

That train station is very reminiscent of some of these European open air train stations. You can it's just it's really cool. Again, if anybody's in that part of the world, good ship the Hoboken train station.

That train station is very reminiscent of some of these European open air train stations. You can it's just it's really cool. Again, if anybody's in that part of the world, good ship the Hoboken train station.

Next.

Next.

All right, this one actually stood out to me.

All right, this one actually stood out to me.

So this from Bloomberg Bloomberg Law. The rich they want to make their wealth immortal, so as state attorneys, they're creating trusts that are aimed at extending the wealth until people. This is because they're getting cryologically pervert preserved so they.

So this from Bloomberg Bloomberg Law. The rich they want to make their wealth immortal, so as state attorneys, they're creating trusts that are aimed at extending the wealth until people. This is because they're getting cryologically pervert preserved so they.

Can be revived even if it's hundreds of years later. So it's revival trusts. This is the new thing. It's an emerging area of law. There have to deal.

Can be revived even if it's hundreds of years later. So it's revival trusts. This is the new thing. It's an emerging area of law. There have to deal.

They're starting to deal with it, because cryogenic preservation is a big.

They're starting to deal with it, because cryogenic preservation is a big.

Freezing yourself.

Freezing yourself.

You're freezing your stock portfolio or yourself.

You're freezing your stock portfolio or yourself.

You're freezing yourself.

You're freezing yourself.

But they're wondering what happens to that, you know, stock portfolio after you're revived and come back.

But they're wondering what happens to that, you know, stock portfolio after you're revived and come back.

So when I come back and like a one hundred years, I want to have my cash there with me exactly.

So when I come back and like a one hundred years, I want to have my cash there with me exactly.

But there's a lot of questions behind it, like can the money live in definitely? Are you dead if you're by is cryologically preserved?

But there's a lot of questions behind it, like can the money live in definitely? Are you dead if you're by is cryologically preserved?

Are you considered revived if you only might have like your brain?

Are you considered revived if you only might have like your brain?

Is the proof they can do that? And the answer is no.

Is the proof they can do that? And the answer is no.

It's it's it's tough, and there's only there's a place in Arizona. I'm going through this here that has about about one hundred people frozen right now.

It's it's it's tough, and there's only there's a place in Arizona. I'm going through this here that has about about one hundred people frozen right now.

It was just yeah, I'm have very strong opinions about that and my hero and I don't I don't know what the details are. That was twelve years ago.

It was just yeah, I'm have very strong opinions about that and my hero and I don't I don't know what the details are. That was twelve years ago.

Yes, yeah, but it's what happens to your money.

Yes, yeah, but it's what happens to your money.

So it's not going to my kids, which I don't.

So it's not going to my kids, which I don't.

I mean, it's not a perpetuite.

I mean, it's not a perpetuite.

This is just besides, this is what the world is listening.

This is just besides, this is what the world is listening.

To it's just like what happens when Lisa is a ninety degree heat.

To it's just like what happens when Lisa is a ninety degree heat.

Next and finally, this might come as a shocker, but McDonald's customers, they're not looking for the healthier options.

Next and finally, this might come as a shocker, but McDonald's customers, they're not looking for the healthier options.

Okay, it was a recent conference.

Okay, it was a recent conference.

They said that they're meatless burgers. You know, the mcclant burger didn't do well salads.

They said that they're meatless burgers. You know, the mcclant burger didn't do well salads.

They might bring them back. I didn't even realize they were going.

They might bring them back. I didn't even realize they were going.

I guess I haven't been to McDonald's in.

I guess I haven't been to McDonald's in.

A while, but they dissed them in twenty twenty, so they might come back.

A while, but they dissed them in twenty twenty, so they might come back.

Most of the last time you ate.

Most of the last time you ate.

A couple of months ago we did this. You said you've actually had a salad at McDonald's.

A couple of months ago we did this. You said you've actually had a salad at McDonald's.

I did, and that was the only thing I used to.

I did, and that was the only thing I used to.

Get You had a burger at McDonald's or anything like or Burger King or any of the others.

Get You had a burger at McDonald's or anything like or Burger King or any of the others.

I don't know, Monday or is it Sunday?

I don't know, Monday or is it Sunday?

Yeah, exactly.

Yeah, exactly.

But their chicken is more popular. Actually, it's just as popular as their beef. So the chicken and their coffee, those are like the two.

But their chicken is more popular. Actually, it's just as popular as their beef. So the chicken and their coffee, those are like the two.

I know. You bring up a good point. Here, let me do it, and folks, I'm doing this math quickly. Here you can do that in the Bloomberg Professional Service in the last ten years. I'm enjoying McDonald's, even with a recent pullback thirteen point four percent per year, which is better than nice.

I know. You bring up a good point. Here, let me do it, and folks, I'm doing this math quickly. Here you can do that in the Bloomberg Professional Service in the last ten years. I'm enjoying McDonald's, even with a recent pullback thirteen point four percent per year, which is better than nice.

Better than nice?

Better than nice?

Is it Apple?

Is it Apple?

No?

No?

Is it magnificent seven? No? But guess what, it's pretty much a straight line. Yeah.

Is it magnificent seven? No? But guess what, it's pretty much a straight line. Yeah.

I mean, I mean, we're a business going. It's not the anywhere they're doing fine. I mean, even with.

I mean, I mean, we're a business going. It's not the anywhere they're doing fine. I mean, even with.

The weight loss drugs, that was the call that people aren't going to, you know, go to fast food, eat packaged foods. I don't know if that's the thing. I mean, I'm looking at the FA function for McDonald's. The streets got got a mid single digit revenue growth as far as I can see for this company.

The weight loss drugs, that was the call that people aren't going to, you know, go to fast food, eat packaged foods. I don't know if that's the thing. I mean, I'm looking at the FA function for McDonald's. The streets got got a mid single digit revenue growth as far as I can see for this company.

You know, I just got an email from Sparta. They're talking. The senior manager was in a meeting. Of course, they get the radio line while they're in the meeting. Of course they're having a debate on whether they should freeze me exactly.

You know, I just got an email from Sparta. They're talking. The senior manager was in a meeting. Of course, they get the radio line while they're in the meeting. Of course they're having a debate on whether they should freeze me exactly.

Well, I think they got to pay you wire frozen.

Well, I think they got to pay you wire frozen.

That's what That's what missus Kean said when thank you, I guess thank you. That is the newspapers with Lisa Mattel This is the Bloomberg Surveillance Podcast, bringing you 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 on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.

That's what That's what missus Kean said when thank you, I guess thank you. That is the newspapers with Lisa Mattel This is the Bloomberg Surveillance Podcast, bringing you 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 on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.