This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App.

This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App.

This to me is the question how much do we see shares absolutely pummeled? If anything is disappointed.

This to me is the question how much do we see shares absolutely pummeled? If anything is disappointed.

There's only one person to answer the question, Walgreen's analyst Stuart Geiser, US equity trading strategy head. It's any group, Stewart. I know you don't talk about individual stocks, but this is just a microcosm of the earnings battle over the next six weeks.

There's only one person to answer the question, Walgreen's analyst Stuart Geiser, US equity trading strategy head. It's any group, Stewart. I know you don't talk about individual stocks, but this is just a microcosm of the earnings battle over the next six weeks.

Yeah, yeah, I think look at earnings have been obviously a very pleasant surprise or a very painful surprise. If you've been bearish on a your date basis, you know I would agree with you. The bar is pretty high going into earnings this quarter, particularly in the tech space, so that's going to be I think a very very strong test. We have seen investors kind of gravitating towards stocks that have strong EPs momentum. This kind of happened to head a last earning season as well, so you know, when the bar is high, you try to go with the stocks I think you feel like you can rely on from an earnings perspective, what are.

Yeah, yeah, I think look at earnings have been obviously a very pleasant surprise or a very painful surprise. If you've been bearish on a your date basis, you know I would agree with you. The bar is pretty high going into earnings this quarter, particularly in the tech space, so that's going to be I think a very very strong test. We have seen investors kind of gravitating towards stocks that have strong EPs momentum. This kind of happened to head a last earning season as well, so you know, when the bar is high, you try to go with the stocks I think you feel like you can rely on from an earnings perspective, what are.

Your securities analysts say? It's City Group, They've got this. I get all the feed from City Group for some reason. And you know, Jane Frazier's she's long on you know, IBM, I hear about it first. But the bottom line is what do the troops say about this pending season?

Your securities analysts say? It's City Group, They've got this. I get all the feed from City Group for some reason. And you know, Jane Frazier's she's long on you know, IBM, I hear about it first. But the bottom line is what do the troops say about this pending season?

Look, I think it's I think it's going to be a mixed bag. And the question is, you know where do you put the most focus? You know, to me a lot of you know, to continue the Walgridge conversation, it's it's the services side of the economy, and it's the labor market and consumer spending that that are the things I think you need to pay most most close attention to going to the second half of the year.

Look, I think it's I think it's going to be a mixed bag. And the question is, you know where do you put the most focus? You know, to me a lot of you know, to continue the Walgridge conversation, it's it's the services side of the economy, and it's the labor market and consumer spending that that are the things I think you need to pay most most close attention to going to the second half of the year.

I'm looking right now. Walgreen shares down seven point four percent in pre market trading on the heels of this disappointment. It wasn't a severe disappointment, but it was appointment. What does that say about the potential sell off if there is any crack in any of the big tech names, given where valuations are, given where expectations are, and given how lofty some of these stock prices really are right now.

I'm looking right now. Walgreen shares down seven point four percent in pre market trading on the heels of this disappointment. It wasn't a severe disappointment, but it was appointment. What does that say about the potential sell off if there is any crack in any of the big tech names, given where valuations are, given where expectations are, and given how lofty some of these stock prices really are right now.

Yeah, it's going to be a minefield, I think, you know, for tech earnings. And the tough part too is you look at that week between July twenty fourth and July thirty. First you get the FMC and that's when you get you know, large cap earning. So you know that last week in July I think is going to be very busy for you all and obviously very busy for us. And yeah, to your point, I think that the bar is very high here for a lot of those stocks, particularly if you look back to last quarter, you know, stocklike Microsoft, A stocklike and Video, which were considered consensus longs, still managed to rise considerably on earnings, and I think they've now face the challenge of backing that.

Yeah, it's going to be a minefield, I think, you know, for tech earnings. And the tough part too is you look at that week between July twenty fourth and July thirty. First you get the FMC and that's when you get you know, large cap earning. So you know that last week in July I think is going to be very busy for you all and obviously very busy for us. And yeah, to your point, I think that the bar is very high here for a lot of those stocks, particularly if you look back to last quarter, you know, stocklike Microsoft, A stocklike and Video, which were considered consensus longs, still managed to rise considerably on earnings, and I think they've now face the challenge of backing that.

Up headline out right now. Delta Airlines thanks the Abramowitz fan for profit making travel in July.

Up headline out right now. Delta Airlines thanks the Abramowitz fan for profit making travel in July.

Thank you. Yeah, are you just basically just.

Thank you. Yeah, are you just basically just.

Continue to Walgreen's tank as we go and delta out with a complete reado. Lisa, why don't you visit it? Your free cash flow was greater than two billion. They popped FCF up to three billion dollars. I believe that's a fifty percent lift on free cash.

Continue to Walgreen's tank as we go and delta out with a complete reado. Lisa, why don't you visit it? Your free cash flow was greater than two billion. They popped FCF up to three billion dollars. I believe that's a fifty percent lift on free cash.

Well, this has been the perennial story, right, that people keep traveling, that the distortions post pandemic have continued. Given some of these post pandemic distortions, And we were talking before we went on about how people do keep on spending and maybe they were conditioned by remaining cooped up and feeling like they have to seize life at the horns or whatever kind of psychological rationale you want to put on it. But Stuart, how does that color your view of whether you're more optimistic or more pessimistic once we get the reality of these earnings.

Well, this has been the perennial story, right, that people keep traveling, that the distortions post pandemic have continued. Given some of these post pandemic distortions, And we were talking before we went on about how people do keep on spending and maybe they were conditioned by remaining cooped up and feeling like they have to seize life at the horns or whatever kind of psychological rationale you want to put on it. But Stuart, how does that color your view of whether you're more optimistic or more pessimistic once we get the reality of these earnings.

Look, I think.

Look, I think.

It's earnings and to your point, is consumer spending employment. And you know, if we're going to have a recession in the second half of the year, it's going to have to come from the consumer side of the market, right, So that's why there's so much focus on the labor market I think going into earnings. Yet there's a high bar for tech, mostly because tech has been leadership of the market, and I think there's a higher, you know, a high bar. A lot of focus on consumer companies just to see if the spending is following through. Are they continuing to be able to pass through inflation or are they starting to have to discount, you know, to get to get people in the door. So I think, you know, those are the two areas will probably focused on the most f earnings coming up is can tech hit the bar? And what signal are we getting on consumer spend?

It's earnings and to your point, is consumer spending employment. And you know, if we're going to have a recession in the second half of the year, it's going to have to come from the consumer side of the market, right, So that's why there's so much focus on the labor market I think going into earnings. Yet there's a high bar for tech, mostly because tech has been leadership of the market, and I think there's a higher, you know, a high bar. A lot of focus on consumer companies just to see if the spending is following through. Are they continuing to be able to pass through inflation or are they starting to have to discount, you know, to get to get people in the door. So I think, you know, those are the two areas will probably focused on the most f earnings coming up is can tech hit the bar? And what signal are we getting on consumer spend?

What does it mean that tech is that tech earnings is a minefield, that that whole period is a minefield at a time when you've been pretty optimistic about where the market's heading.

What does it mean that tech is that tech earnings is a minefield, that that whole period is a minefield at a time when you've been pretty optimistic about where the market's heading.

Yeah, look, the tech the tech trade is obviously not as we say, as clean as it was you know at the beginning of the year. You know, I think the bottom line here is if you look at sales revisions, if you look at EBITDA revisions, they've been you know, higher for tech and even higher in the AI space. So that kind of sets your bar, you know a little bit higher for expectations, and you know what we've seen the last I would say one to two months is is long only investors in particular starting to have some fatigue in terms of tech buying. We're starting to see some outflows from the space. So you put those two things together, you have a high bar and what looks like some fatigue on the institutional side, and that just to your point, sets it up that you need to need to deliver results here to kind of justify your performance out of your today basis.

Yeah, look, the tech the tech trade is obviously not as we say, as clean as it was you know at the beginning of the year. You know, I think the bottom line here is if you look at sales revisions, if you look at EBITDA revisions, they've been you know, higher for tech and even higher in the AI space. So that kind of sets your bar, you know a little bit higher for expectations, and you know what we've seen the last I would say one to two months is is long only investors in particular starting to have some fatigue in terms of tech buying. We're starting to see some outflows from the space. So you put those two things together, you have a high bar and what looks like some fatigue on the institutional side, and that just to your point, sets it up that you need to need to deliver results here to kind of justify your performance out of your today basis.

I want you to talk to market timers right now. You have been brilliant bailing the rest at City Group about saying you got to be in the game to win. Talk about market timing right now, the efficacy of being hyper cautious versus the optimism I hear from City Group.

I want you to talk to market timers right now. You have been brilliant bailing the rest at City Group about saying you got to be in the game to win. Talk about market timing right now, the efficacy of being hyper cautious versus the optimism I hear from City Group.

Yeah, look, I think even our optimism is starting to get a little bit tired, you know, to be completely honest with you, you know, partly its price action and partly it's one of the reasons we were kind of more bullish coming into the year was so much stock had been sold last year, and we thought that that those positions kind of needed to be rebuilt. And just the data we're seeing on flows suggests that those positions have largely been rebuilt, call it your seventy five percent of the way you know, along that path. So from our perspective, it does kind of impact risk reward a little bit. So look, you know, we are still relatively positive, you know, gun to our head, we'd say up up rather than down at this point. But the risk reward is definitely.

Yeah, look, I think even our optimism is starting to get a little bit tired, you know, to be completely honest with you, you know, partly its price action and partly it's one of the reasons we were kind of more bullish coming into the year was so much stock had been sold last year, and we thought that that those positions kind of needed to be rebuilt. And just the data we're seeing on flows suggests that those positions have largely been rebuilt, call it your seventy five percent of the way you know, along that path. So from our perspective, it does kind of impact risk reward a little bit. So look, you know, we are still relatively positive, you know, gun to our head, we'd say up up rather than down at this point. But the risk reward is definitely.

The nature of a bull market. I mean, I mean, I'm sorry, we're not in the first leg off the Matt Bramo was wicked gloomy the third week of October last year, and guess what, we all got off the mat and went, it's not supposed to be like that now, right, No, it's not.

The nature of a bull market. I mean, I mean, I'm sorry, we're not in the first leg off the Matt Bramo was wicked gloomy the third week of October last year, and guess what, we all got off the mat and went, it's not supposed to be like that now, right, No, it's not.

I mean for a number of reasons. One is, you've had a tremendously positive economic data surprise to start the year. That's flowed through to earnings expectations as well. I think that's that's helped lift the market. Look, you get above forty four hundred, you know, and it looks like institutional investors at least have started to you know, just sort of call pause a little bit in terms of their inflows into the market. So that that means one of two things. Either, I think you need to take recession risk out of the system, which would be your next leg higher or you're going to need, you know, retail to continue to sponsor this market to the upside.

I mean for a number of reasons. One is, you've had a tremendously positive economic data surprise to start the year. That's flowed through to earnings expectations as well. I think that's that's helped lift the market. Look, you get above forty four hundred, you know, and it looks like institutional investors at least have started to you know, just sort of call pause a little bit in terms of their inflows into the market. So that that means one of two things. Either, I think you need to take recession risk out of the system, which would be your next leg higher or you're going to need, you know, retail to continue to sponsor this market to the upside.

Are you one of those people who says if there is a sell off in tech, it's a biable dip. That's what I keep hearing from everyone.

Are you one of those people who says if there is a sell off in tech, it's a biable dip. That's what I keep hearing from everyone.

Look, I think if there's a cello in tech, I think that means markets are down in general. You're not going to get tech down with markets off, right, So every dip is a Bible tip, I guess. But you know, from our perspective, I think if you get a pull back here, I agree with you. I think there are a lot of people waiting to get into the market, you know, a bit lower, which probably mean like right now we're in the pain trade. To the upside, you know, people didn't want to chase it. I think what you'll probably have is people buy a little too quickly on the way down and then and then kind of have to average themselves in the floor is clearly higher than it was to start the year. Again, Yeah, I agree with you. I do think you'll see so I don't want to call it value picking, but you'll definitely see some people who'd be happy to buy the market call it five to ten percent lower here, which, as you know, lives the downside.

Look, I think if there's a cello in tech, I think that means markets are down in general. You're not going to get tech down with markets off, right, So every dip is a Bible tip, I guess. But you know, from our perspective, I think if you get a pull back here, I agree with you. I think there are a lot of people waiting to get into the market, you know, a bit lower, which probably mean like right now we're in the pain trade. To the upside, you know, people didn't want to chase it. I think what you'll probably have is people buy a little too quickly on the way down and then and then kind of have to average themselves in the floor is clearly higher than it was to start the year. Again, Yeah, I agree with you. I do think you'll see so I don't want to call it value picking, but you'll definitely see some people who'd be happy to buy the market call it five to ten percent lower here, which, as you know, lives the downside.

I don't know if you knew this. This is brilliant Stewart, thank you so much. But Bramo's got the east Bay forty four from grand Banks on delivery later this summer. Gorgeous with a light blue and she's named Bible Dip. This is great. It's a picnic boat for Bramo to have a picnic. It's like the Hinkley one. But actually I think it has more character than the Hinkley picnic boat.

I don't know if you knew this. This is brilliant Stewart, thank you so much. But Bramo's got the east Bay forty four from grand Banks on delivery later this summer. Gorgeous with a light blue and she's named Bible Dip. This is great. It's a picnic boat for Bramo to have a picnic. It's like the Hinkley one. But actually I think it has more character than the Hinkley picnic boat.

I think I got lost in me paddle to blow up paddle board instead.

I think I got lost in me paddle to blow up paddle board instead.

That sort of my speed.

That sort of my speed.

But here out it was great. I love the site Thrusters, but I'm sorry the East Space betteran you know you might this.

But here out it was great. I love the site Thrusters, but I'm sorry the East Space betteran you know you might this.

Was the last time you were on a boat.

Was the last time you were on a boat.

I mean, come on, it was boat was called the USS Drama.

I mean, come on, it was boat was called the USS Drama.

Yeah exactly, that sounds more like it.

Yeah exactly, that sounds more like it.

Yeah, Stuart Kaiser, just bringing in come back, bring Jeff you with you from b and ymel every day. Kaiser in you it is with our question the Hallmark Research analysis of the year. You could hear the silence in Washington is the International Monetary Fund, led by the economics of gidigopin F looked out to twenty twenty eight and saw a growth trajectory that took us back decades to nineteen ninety. It was an extraordinary call on tepid economic growth. We need an update. We go to Portugal and CenTra the meetings of the European Central Bank. Francine Lacroix of the Pulse in conversation with doctor Gopineth Francine, good morning, Good morning Tom.

Yeah, Stuart Kaiser, just bringing in come back, bring Jeff you with you from b and ymel every day. Kaiser in you it is with our question the Hallmark Research analysis of the year. You could hear the silence in Washington is the International Monetary Fund, led by the economics of gidigopin F looked out to twenty twenty eight and saw a growth trajectory that took us back decades to nineteen ninety. It was an extraordinary call on tepid economic growth. We need an update. We go to Portugal and CenTra the meetings of the European Central Bank. Francine Lacroix of the Pulse in conversation with doctor Gopineth Francine, good morning, Good morning Tom.

I am delighted to be joined by Gita Goopinoff, of course of the IMF, who yesterday also really opened the forum here in Syndrome with a very powerful speech linking fiscal policy and montary policy and really reminding everyone that they had to work in tantem So, Gita, thank you so much for joining us. When you look at the fight against inflation, there's now a lot of talk about recession. You know the fact that core inflation is still high, but headline inflation is coming down. What does a policy mistake from central banks now look like?

I am delighted to be joined by Gita Goopinoff, of course of the IMF, who yesterday also really opened the forum here in Syndrome with a very powerful speech linking fiscal policy and montary policy and really reminding everyone that they had to work in tantem So, Gita, thank you so much for joining us. When you look at the fight against inflation, there's now a lot of talk about recession. You know the fact that core inflation is still high, but headline inflation is coming down. What does a policy mistake from central banks now look like?

First of all, it's the pressure to join your friends scene. What are you experiencing is that inflation is taking a long time to get back to its target. And yes, headline is coming down significantly, but core inflation, what it has eased, is still persistently high. So in this environment, our advice is a central bank will need to stay the course.

First of all, it's the pressure to join your friends scene. What are you experiencing is that inflation is taking a long time to get back to its target. And yes, headline is coming down significantly, but core inflation, what it has eased, is still persistently high. So in this environment, our advice is a central bank will need to stay the course.

In the case of the ECB, that will mean that some.

In the case of the ECB, that will mean that some.

More continued tightening and then to stay on hold to make sure that you're confident that inflation is coming back durably down and that that could come along with more weakness in liberal markets that we've seen so far and more weakness in the economy in general, but that's what is needed to bring inflation down.

More continued tightening and then to stay on hold to make sure that you're confident that inflation is coming back durably down and that that could come along with more weakness in liberal markets that we've seen so far and more weakness in the economy in general, but that's what is needed to bring inflation down.

Do you worry about the markets?

Do you worry about the markets?

And I know you don't look at the market send day out, but there seems to be a bias in the markets that are actually inflation is coming down and that central banks will be ready to not hike as much as maybe they will. So is there a danger that the market is mispricing something that will then create an event.

And I know you don't look at the market send day out, but there seems to be a bias in the markets that are actually inflation is coming down and that central banks will be ready to not hike as much as maybe they will. So is there a danger that the market is mispricing something that will then create an event.

When the markets have been off since the start of this year. I mean, if you look at their expectations of the policy rate part in some countries, especially the US, they were expecting three rate cuts this year for US FED policy, and they have adjusted, they've come back now to recognizing that no, we are there here for longer than was expected. So I think markets have been very optimistic, and I suspect there's still somewhat optimistic about the path for interest rates.

When the markets have been off since the start of this year. I mean, if you look at their expectations of the policy rate part in some countries, especially the US, they were expecting three rate cuts this year for US FED policy, and they have adjusted, they've come back now to recognizing that no, we are there here for longer than was expected. So I think markets have been very optimistic, and I suspect there's still somewhat optimistic about the path for interest rates.

What do they most misunderstand is that the fact that interest rates have to remain higher for longer, which Christine Laguard actually laid out beautifully in her speech, or that they have to rise higher than expected.

What do they most misunderstand is that the fact that interest rates have to remain higher for longer, which Christine Laguard actually laid out beautifully in her speech, or that they have to rise higher than expected.

I think it's how long they're going to stay at that.

I think it's how long they're going to stay at that.

I think that's the part where there is a disconnect between the markets and what central banks are signaling, and so far it's the markets that have had to correct to the central bank paths as opposed to other way around. So I still think that they're off a bit on the duration.

I think that's the part where there is a disconnect between the markets and what central banks are signaling, and so far it's the markets that have had to correct to the central bank paths as opposed to other way around. So I still think that they're off a bit on the duration.

For which they have to keep rates high.

For which they have to keep rates high.

What's the path forward for growth should we worry about? Once we get inflation in control.

What's the path forward for growth should we worry about? Once we get inflation in control.

We are seeing growth weakening, We are seeing slowing activity. At this point, we need to bring inflation down to have sustainable growth, which is why it's super important to do this this time around, since it's not just a demand phenomenon. Had supply disruptions correct themselves. We've had energy prices come down. I think both those factors are helping bring inflation down without needing too much of a hit to the economy.

We are seeing growth weakening, We are seeing slowing activity. At this point, we need to bring inflation down to have sustainable growth, which is why it's super important to do this this time around, since it's not just a demand phenomenon. Had supply disruptions correct themselves. We've had energy prices come down. I think both those factors are helping bring inflation down without needing too much of a hit to the economy.

But I think we have to wait and see.

But I think we have to wait and see.

We're only just seeing the effects of market policy work through the system now, and we can see much more slowing.

We're only just seeing the effects of market policy work through the system now, and we can see much more slowing.

But is that why, I mean, why is correntflation so stubbornly high. No one can quite figure it out, which is why it keeps on surprising us to the upside.

But is that why, I mean, why is correntflation so stubbornly high. No one can quite figure it out, which is why it keeps on surprising us to the upside.

It's a big part of the conversation we're having at CenTra, which is is it the fact that market policy transmission is now wicked than it used to be, or is it the fact that you haven't raised interest rates by an app I think these are questions that are coming up.

It's a big part of the conversation we're having at CenTra, which is is it the fact that market policy transmission is now wicked than it used to be, or is it the fact that you haven't raised interest rates by an app I think these are questions that are coming up.

We have a.

We have a.

Situation where it has been the case that household balance sheets corporate balance sheets have been strong, which has helped hold up resilience.

Situation where it has been the case that household balance sheets corporate balance sheets have been strong, which has helped hold up resilience.

Labor markets are ties.

Labor markets are ties.

People believe that they will have a job, they can keep a job, Wages are going up, and services pending tends to be much less intrasensitive than when it comes to durable goods, which consumers piled up on already during the peak up the pandemic. So I think all these factors could be muting the effect of Montre policy transmission. But now as those effects decline, we could start seeing more of a slowing inactivity.

People believe that they will have a job, they can keep a job, Wages are going up, and services pending tends to be much less intrasensitive than when it comes to durable goods, which consumers piled up on already during the peak up the pandemic. So I think all these factors could be muting the effect of Montre policy transmission. But now as those effects decline, we could start seeing more of a slowing inactivity.

I mean, to put it simply, a night mercenario would be some kind of spiral. So you have wages going up, prices go up, and then you lose control.

I mean, to put it simply, a night mercenario would be some kind of spiral. So you have wages going up, prices go up, and then you lose control.

Are we there yet? I don't think so. Don't We're not seeing that in like in the US or in the Euro Area. We certainly are seeing wage cash up and that has happened, That's happened.

Are we there yet? I don't think so. Don't We're not seeing that in like in the US or in the Euro Area. We certainly are seeing wage cash up and that has happened, That's happened.

In previous cycles too.

In previous cycles too.

We should expect to see that, But we're not seeing wages pushing up prices. The concern, of course, is that if it takes so long to bring inflation down, then you might unhinge inflation expectations and then trigger a wage price file. This is why President god spends a lot of time talking about, you know, the persistence of inflation and the reason to stay high for long.

We should expect to see that, But we're not seeing wages pushing up prices. The concern, of course, is that if it takes so long to bring inflation down, then you might unhinge inflation expectations and then trigger a wage price file. This is why President god spends a lot of time talking about, you know, the persistence of inflation and the reason to stay high for long.

So is that why interest rates you think have to stay higher for longer?

So is that why interest rates you think have to stay higher for longer?

Is it really?

Is it really?

I mean, it's to get inflation two percent, but really it's to try to break through that spiral. That could be impossible actually almost to get out.

I mean, it's to get inflation two percent, but really it's to try to break through that spiral. That could be impossible actually almost to get out.

If you look at projections for when inflation gets back to targets in the Euro Area, that's the middle of twenty twenty five.

If you look at projections for when inflation gets back to targets in the Euro Area, that's the middle of twenty twenty five.

That's two years from now.

That's two years from now.

This is a long time and that's why it is critical that you can't have any further risks to de anchoring of inflation, because it's two years is a long time to bring inflation back down to target. To make sure it happens, you have to stay the course and keep interest ras high and until you see durable signs that core inflation is coming down, then of course you have to be data dependent.

This is a long time and that's why it is critical that you can't have any further risks to de anchoring of inflation, because it's two years is a long time to bring inflation back down to target. To make sure it happens, you have to stay the course and keep interest ras high and until you see durable signs that core inflation is coming down, then of course you have to be data dependent.

I mean, all the world central bankers are here. It was quite exciting for me to see j Powell also walk in and the sneakers. I don't often see him actually in sneakers or face to face. Is a gravitational pull of what the FED does. Too heavy to hand for the UCB, but also the Bank of England, the Bank of Japan.

I mean, all the world central bankers are here. It was quite exciting for me to see j Powell also walk in and the sneakers. I don't often see him actually in sneakers or face to face. Is a gravitational pull of what the FED does. Too heavy to hand for the UCB, but also the Bank of England, the Bank of Japan.

What the FED does matters for the whole world, including for other major central banks. But I think this is a time when central bankers are coming together also to understand inflation dynamics better.

What the FED does matters for the whole world, including for other major central banks. But I think this is a time when central bankers are coming together also to understand inflation dynamics better.

There are still several questions.

There are still several questions.

There's a lot of uncertainty on the outlook, and centralize a good learning experience for all central bankers.

There's a lot of uncertainty on the outlook, and centralize a good learning experience for all central bankers.

How hard is it for a monetary policy to counter fiscal policy? And again, because we're seeing inflationarized.

How hard is it for a monetary policy to counter fiscal policy? And again, because we're seeing inflationarized.

That means the cost of living goes up.

That means the cost of living goes up.

So it's understandable that politicians want.

So it's understandable that politicians want.

To be there for their citizens.

To be there for their citizens.

I think it's perfectly good for governments to want to be there for their vulnerable citizens and to provide targeted support. What is not really good at this point would be to have broad based support that generates very large fiscal deficits, especially increases in fiscal deficits, and then feeds into inflation.

I think it's perfectly good for governments to want to be there for their vulnerable citizens and to provide targeted support. What is not really good at this point would be to have broad based support that generates very large fiscal deficits, especially increases in fiscal deficits, and then feeds into inflation.

That is a problem.

That is a problem.

I mean, all the indicators, the fact that we have high inflation now, the fact that debt is high and we need to build buffers because they're going to be future shocks. All of that point towards fiscal tightening, and that's what we're recommending.

I mean, all the indicators, the fact that we have high inflation now, the fact that debt is high and we need to build buffers because they're going to be future shocks. All of that point towards fiscal tightening, and that's what we're recommending.

When you look at central the big center bankers around the world, and of course you know, dealing with inflation and growth, who do you think has the toughest job bank of England?

When you look at central the big center bankers around the world, and of course you know, dealing with inflation and growth, who do you think has the toughest job bank of England?

I think at this point among the major ones. If I put the US, the Euro Area on the Bank of England, I think in the UK the inflation problem looks more difficult than in the other parts because they have a self supply shock problem that came from the energy prices, and they also have the demand side, which is very tight labor markets and if you look at wages in fact, in England, this is where you see the most amount of wage pressures coming in.

I think at this point among the major ones. If I put the US, the Euro Area on the Bank of England, I think in the UK the inflation problem looks more difficult than in the other parts because they have a self supply shock problem that came from the energy prices, and they also have the demand side, which is very tight labor markets and if you look at wages in fact, in England, this is where you see the most amount of wage pressures coming in.

So how do they get out of it?

So how do they get out of it?

Again, there's also huge reliability on mortgages, so it's not as easy as you just keep on hiking because the housing market is so sensitive to that.

Again, there's also huge reliability on mortgages, so it's not as easy as you just keep on hiking because the housing market is so sensitive to that.

Well.

Well.

I think personally the fact that the Bank of England raised rates by fifty basis points recently in the most recent meeting, I.

I think personally the fact that the Bank of England raised rates by fifty basis points recently in the most recent meeting, I.

Think that's a welcome step.

Think that's a welcome step.

That's a clear signal that they are in the fight to bring inflation down. One of the reasons they've been somewhat cautious is exactly what can happen to mortgages and the housing market. But you know, there's been an increase in the duration of fixed rate mortgages in the UK, so you have some attenuation of that effect, and household balance sheets are much stronger than they were in the.

That's a clear signal that they are in the fight to bring inflation down. One of the reasons they've been somewhat cautious is exactly what can happen to mortgages and the housing market. But you know, there's been an increase in the duration of fixed rate mortgages in the UK, so you have some attenuation of that effect, and household balance sheets are much stronger than they were in the.

Past, so that should also help.

Past, so that should also help.

Tom Keen was also talking about, of course your at look and what we saw just a couple of weeks ago by the IMF. Are you more optimistic now about the world economy in twenty twenty four than new were six months ago?

Tom Keen was also talking about, of course your at look and what we saw just a couple of weeks ago by the IMF. Are you more optimistic now about the world economy in twenty twenty four than new were six months ago?

We had a projection for the world economy to grow as around two point eight percent this year, which was you know, coming down from three point four percent last year and then going up to around three percent. Our new numbers will be out in July. We don't have it ready at this point. We're getting different data from different countries at this point, but I think the overall story of an economy that's.

We had a projection for the world economy to grow as around two point eight percent this year, which was you know, coming down from three point four percent last year and then going up to around three percent. Our new numbers will be out in July. We don't have it ready at this point. We're getting different data from different countries at this point, but I think the overall story of an economy that's.

Slower this year than it was last year will remain.

Slower this year than it was last year will remain.

So how much of the conversation here is also trying to understand and some of these forecasts going forward, and how central banks actually can do a better job in understanding the impact that monetary policy has on future inflation.

So how much of the conversation here is also trying to understand and some of these forecasts going forward, and how central banks actually can do a better job in understanding the impact that monetary policy has on future inflation.

I think everybody's trying to understand how economic activity is being impacted by the rate increases that have happened so far, because they've been sizable. The expectation was that we would have seen more slowing down already than we've seen so far. So the surprise is on the resilience of economic activity. Now, of course, we don't want to extrapolate and just assume that this resilience is going to continue.

I think everybody's trying to understand how economic activity is being impacted by the rate increases that have happened so far, because they've been sizable. The expectation was that we would have seen more slowing down already than we've seen so far. So the surprise is on the resilience of economic activity. Now, of course, we don't want to extrapolate and just assume that this resilience is going to continue.

So it's a difficult.

So it's a difficult.

Job for central bank because at this point they have to wash the data very carefully, but at the same time they have to show real commitment to bringing inflation down.

Job for central bank because at this point they have to wash the data very carefully, but at the same time they have to show real commitment to bringing inflation down.

Gita, thank you so much for joining us. Kikita governor there of course of the IMF. I also spotted Tom the new central bank governor of the Bank of Japan. I have to say, it's like a rock concert for nerds. We were quite excited because the first time I think he's been traveling for an event since he was made governor outside of Japan.

Gita, thank you so much for joining us. Kikita governor there of course of the IMF. I also spotted Tom the new central bank governor of the Bank of Japan. I have to say, it's like a rock concert for nerds. We were quite excited because the first time I think he's been traveling for an event since he was made governor outside of Japan.

Yeah, the invite got lost in the mail. Lisa was looking forward through our meal today. All I can say, Francine is you and doctor Gopineth. I can just see you having the Travis Sieriro at Casa Pequida in CenTra Lisa, this is very important. It's a sweet eggy almond cream dusted with cast or sugar on top.

Yeah, the invite got lost in the mail. Lisa was looking forward through our meal today. All I can say, Francine is you and doctor Gopineth. I can just see you having the Travis Sieriro at Casa Pequida in CenTra Lisa, this is very important. It's a sweet eggy almond cream dusted with cast or sugar on top.

I'm sure it'll be enjoyable. Francine, thank you so.

I'm sure it'll be enjoyable. Francine, thank you so.

M joining us now, someone who's been of immense value to us over the years. Kitchuk is with a Derivative Society General, their chief foreign exchange strategist. Is there a clear vision to the jukes memo? Kit? I mean, it's the death of summer. You're going to spend all of July and August and some shock in Spain on the beach, and I just want to know, is there a Juke's vision of where we're going or you, like everybody else, waiting to see what happens.

M joining us now, someone who's been of immense value to us over the years. Kitchuk is with a Derivative Society General, their chief foreign exchange strategist. Is there a clear vision to the jukes memo? Kit? I mean, it's the death of summer. You're going to spend all of July and August and some shock in Spain on the beach, and I just want to know, is there a Juke's vision of where we're going or you, like everybody else, waiting to see what happens.

There's a vision, but there's uncertainty about time. I mean, this is an extraordinary cycle. But the one thing that I was listening to really gobin At, you know, sort of getting gobin A was sort of saying, you know, we're uncertain about the lags. The lags are long and variable, and everybody's impatient for the lag to play out. It'll play out in its own time, because the single most unique feature of this cycle is that we ended up with really easy monetary policy, really easy fiscal policy, and really really tight labor markets because of a pandemic, and then from there tightening and getting that out is taking longer than we thought. Well gosh, But so I sit there and thinking, in one of the next twenty six thursdays, I'm going to come in one day and I'm going to see a weekly jobless claims number that makes my mouth sort of hang open, and I think, Wow, here we are. I mean, this cycle is going to end. This plane is going to land. But we're completely at a loss to try to figure out how long those lags are. And we're nervous that when it does land, will it land as soft as we hope, and so on and so forth. But I think that vision's super clear. What is terribly difficult is to guess how long it takes to.

There's a vision, but there's uncertainty about time. I mean, this is an extraordinary cycle. But the one thing that I was listening to really gobin At, you know, sort of getting gobin A was sort of saying, you know, we're uncertain about the lags. The lags are long and variable, and everybody's impatient for the lag to play out. It'll play out in its own time, because the single most unique feature of this cycle is that we ended up with really easy monetary policy, really easy fiscal policy, and really really tight labor markets because of a pandemic, and then from there tightening and getting that out is taking longer than we thought. Well gosh, But so I sit there and thinking, in one of the next twenty six thursdays, I'm going to come in one day and I'm going to see a weekly jobless claims number that makes my mouth sort of hang open, and I think, Wow, here we are. I mean, this cycle is going to end. This plane is going to land. But we're completely at a loss to try to figure out how long those lags are. And we're nervous that when it does land, will it land as soft as we hope, and so on and so forth. But I think that vision's super clear. What is terribly difficult is to guess how long it takes to.

Play out one definitive thing that get a Gopinas said, or is it she thinks that the UK Your UK is in the worst spot of all of the central banks in terms of combating inflation. Is this supportive of the pound or negative for the pound because it means higher rates and slower growth?

Play out one definitive thing that get a Gopinas said, or is it she thinks that the UK Your UK is in the worst spot of all of the central banks in terms of combating inflation. Is this supportive of the pound or negative for the pound because it means higher rates and slower growth?

Well, right now markets are more myopically focused on short term interest rate differentials than I can remember them in the foreign exchange market, So right now the plan's doing well. In the long run, though, if you've got a really lousy growth inflating trade off, which is what we've got. You know, you have to get raids up a lot, and then you get a worse economic slowdown, and then you'll get more rate cuts. So we are supposed to be taking our pans and as strong as we can get them, we're supposed to be turning them into something useful like Swedish kronas, so that this time next June, when the sun's shining in Sweden, I'm on a boat. So I'd stuck them with my feet up on a glass of beer in my hand, having loads of fun at today's exchange, right, because it'll be completely different by then, and each week I just kind of sell a few more pounds.

Well, right now markets are more myopically focused on short term interest rate differentials than I can remember them in the foreign exchange market, So right now the plan's doing well. In the long run, though, if you've got a really lousy growth inflating trade off, which is what we've got. You know, you have to get raids up a lot, and then you get a worse economic slowdown, and then you'll get more rate cuts. So we are supposed to be taking our pans and as strong as we can get them, we're supposed to be turning them into something useful like Swedish kronas, so that this time next June, when the sun's shining in Sweden, I'm on a boat. So I'd stuck them with my feet up on a glass of beer in my hand, having loads of fun at today's exchange, right, because it'll be completely different by then, and each week I just kind of sell a few more pounds.

Lisa, you and I got to get our heads examined. Do you see how Jukes talks there about vacation like Pharaoh does.

Lisa, you and I got to get our heads examined. Do you see how Jukes talks there about vacation like Pharaoh does.

Well, it's like a.

Well, it's like a.

God given right. It's like the king descended and said, Lord Jukes, Lord Pharaoh, take augustars well.

God given right. It's like the king descended and said, Lord Jukes, Lord Pharaoh, take augustars well.

And I will say, Lord Jukes, Lord Pharaoh, come do that in the US. I'm curious from your vanda. You're right as we look for no, I am supported wholeheartedly I'm.

And I will say, Lord Jukes, Lord Pharaoh, come do that in the US. I'm curious from your vanda. You're right as we look for no, I am supported wholeheartedly I'm.

Going you can the Americas boat.

Going you can the Americas boat.

Yet I need to go to Spain for one day. Where do I fly?

Yet I need to go to Spain for one day. Where do I fly?

My goodness? No, absolutely, kid, Well, we talk about our travel plans. Let's talk about the dollars. Since we're going to go there. How strong is the dollar going to be? This is all these currencies to plan our one day vacations. And this has sort of been one of the surprising features is are we entering a reversal period of the dollar weakness of the first half of the year, or does what we've heard from the ECB, or we've heard from the Bank of England, or we've heard just generally around the world really challenge that and indicate more weakness ahead.

My goodness? No, absolutely, kid, Well, we talk about our travel plans. Let's talk about the dollars. Since we're going to go there. How strong is the dollar going to be? This is all these currencies to plan our one day vacations. And this has sort of been one of the surprising features is are we entering a reversal period of the dollar weakness of the first half of the year, or does what we've heard from the ECB, or we've heard from the Bank of England, or we've heard just generally around the world really challenge that and indicate more weakness ahead.

I think you're going to get more weakness ahead for the dollar over time from here. I mean, it's still very strong and it would be it would be amazing if you didn't actually weaken at some point. You know, we have seen I think Jeff, you've put it very well. You know, we've seen buying of dollars from people who are trading US exceptionalism in AIS dogs for example, who are trading The US economy is not slowing down yet as a theme, and the market's pricing in, you know, the idea that the FED hasn't peaked yet in terms of rates, and it's pushing a little bit more in there. And there will be some people who will turn around and say that there will never be another US recession because the US economy is so wonderful as those people get themselves fully priced in, which I don't think is terribly far from here. That's as good as the dollar can get from here with the rest of the world recovering. So you're a bit like me, you know, you have a strongarrency today. It's not going to be strong forever on that basis.

I think you're going to get more weakness ahead for the dollar over time from here. I mean, it's still very strong and it would be it would be amazing if you didn't actually weaken at some point. You know, we have seen I think Jeff, you've put it very well. You know, we've seen buying of dollars from people who are trading US exceptionalism in AIS dogs for example, who are trading The US economy is not slowing down yet as a theme, and the market's pricing in, you know, the idea that the FED hasn't peaked yet in terms of rates, and it's pushing a little bit more in there. And there will be some people who will turn around and say that there will never be another US recession because the US economy is so wonderful as those people get themselves fully priced in, which I don't think is terribly far from here. That's as good as the dollar can get from here with the rest of the world recovering. So you're a bit like me, you know, you have a strongarrency today. It's not going to be strong forever on that basis.

To frame out the opportunity on the Pacific Rim, and particularly with the shaku and awe of y Wan, I mean it is a devaluation of the Chinese you want, I'll let you decide where that tip point is. But seven all eyes on seven point fifteen. We blow through that to a seven twenty three. Right now, my eyes are failing. He's seven point two to two. And yu Wan frame out the opportunity on the Pacific Rim.

To frame out the opportunity on the Pacific Rim, and particularly with the shaku and awe of y Wan, I mean it is a devaluation of the Chinese you want, I'll let you decide where that tip point is. But seven all eyes on seven point fifteen. We blow through that to a seven twenty three. Right now, my eyes are failing. He's seven point two to two. And yu Wan frame out the opportunity on the Pacific Rim.

Well, that the Chinese opportunity is that the Chinese, the Chinese have a problem reviving their economy they don't have much inflation. I mean, these are not big moves in percentage terms compared to what we see in lots of other places, so they could go further. There's certainly nothing to help it now. I worry that China, if it tries for a viov It's economy, it can't easily go back to the old kind of boost the real estate market yet again, you know that they'll probably have to make manufactured goods and sell them to the rest of us, and they'll welcome a weak current to help them do that. The real so they may get some pain in China, the pain will then spread to the other people who rely on them. It's you know, I wouldn't want to be terribly along the Australian dollar to day if they're trying to sell iron ore to a Chinese economy that's struggling, you know. So, I think as you can see this year, one of the features of this year, the strongest currencies have been Central Eastern European ones that fought inflation hard and Latin American ones that ford inflation hard. There are no strong Asian currencies this year. None of the top two currents are I think that's what tells you that the market is kind of getting this to some degree. I quite like selling the other Asian currencies against the yen because the end is going to frustrate me, and so it starts going up when they make some voicity changes. Mister Wader could could do the world a big favor by getting on board ebody else today, but that's not going to happen.

Well, that the Chinese opportunity is that the Chinese, the Chinese have a problem reviving their economy they don't have much inflation. I mean, these are not big moves in percentage terms compared to what we see in lots of other places, so they could go further. There's certainly nothing to help it now. I worry that China, if it tries for a viov It's economy, it can't easily go back to the old kind of boost the real estate market yet again, you know that they'll probably have to make manufactured goods and sell them to the rest of us, and they'll welcome a weak current to help them do that. The real so they may get some pain in China, the pain will then spread to the other people who rely on them. It's you know, I wouldn't want to be terribly along the Australian dollar to day if they're trying to sell iron ore to a Chinese economy that's struggling, you know. So, I think as you can see this year, one of the features of this year, the strongest currencies have been Central Eastern European ones that fought inflation hard and Latin American ones that ford inflation hard. There are no strong Asian currencies this year. None of the top two currents are I think that's what tells you that the market is kind of getting this to some degree. I quite like selling the other Asian currencies against the yen because the end is going to frustrate me, and so it starts going up when they make some voicity changes. Mister Wader could could do the world a big favor by getting on board ebody else today, but that's not going to happen.

I need to extend this conversation, but we don't have the time to do it. I really want to talk to Kit Jukes folks on the coming days from Spain.

I need to extend this conversation, but we don't have the time to do it. I really want to talk to Kit Jukes folks on the coming days from Spain.

The question around the earning surprise and whether this is going to be something that becomes a pattern is really the main theme. I keep hearing fro people joining us now to discuss. Cameron Dawson, I'm so pleased to say, Chief investment officer at New Edge Wealth, Cameron, how much is that on your radar that earnings may be the catalysts the downturn to the caution that so many people have been warning about.

The question around the earning surprise and whether this is going to be something that becomes a pattern is really the main theme. I keep hearing fro people joining us now to discuss. Cameron Dawson, I'm so pleased to say, Chief investment officer at New Edge Wealth, Cameron, how much is that on your radar that earnings may be the catalysts the downturn to the caution that so many people have been warning about.

Yeah, I think it is the important factor because even though we still see a lot of dire economic forecasts, effectively economists have us starting a recession in just a few days in the third quarter. You don't see that in the earnings forecast. You see a big recovery in the back half of the year and then an even bigger recovery into twenty twenty four and twenty twenty five, driven by resilient economy and big margin expansion. So that would be the key source of downside surprise if we don't see those earnings materialize. We're watching the margins really closely because inflation has been actually very good for margins. It's why we think we got to record margins in twenty one and early twenty twenty two. So as inflation continues to moderate, pricing power moderates that could put downward pressure on those margins.

Yeah, I think it is the important factor because even though we still see a lot of dire economic forecasts, effectively economists have us starting a recession in just a few days in the third quarter. You don't see that in the earnings forecast. You see a big recovery in the back half of the year and then an even bigger recovery into twenty twenty four and twenty twenty five, driven by resilient economy and big margin expansion. So that would be the key source of downside surprise if we don't see those earnings materialize. We're watching the margins really closely because inflation has been actually very good for margins. It's why we think we got to record margins in twenty one and early twenty twenty two. So as inflation continues to moderate, pricing power moderates that could put downward pressure on those margins.

You've been cautious for quite a while. Are you getting more cautious or less cautious?

You've been cautious for quite a while. Are you getting more cautious or less cautious?

So we've been cautious in expressing it by remaining invested but staying in quality and saying that we don't want to be taking big risks on very cyclical economic sensitive parts of the market. At the same time, is not wanting to take risks with things that are more speculative that really require the boost that you get from central banks easing policy to see their stock prices do really well. What's interesting is that we have seen those stocks lead this year, and that's been one of our biggest surprises is that you have seen the Fed continue to remain very hawkish, but at the same time you've been seeing liquidity sensitive parts of the market lead the charge higher because there has been a huge vergence of yields and valuations at.

So we've been cautious in expressing it by remaining invested but staying in quality and saying that we don't want to be taking big risks on very cyclical economic sensitive parts of the market. At the same time, is not wanting to take risks with things that are more speculative that really require the boost that you get from central banks easing policy to see their stock prices do really well. What's interesting is that we have seen those stocks lead this year, and that's been one of our biggest surprises is that you have seen the Fed continue to remain very hawkish, but at the same time you've been seeing liquidity sensitive parts of the market lead the charge higher because there has been a huge vergence of yields and valuations at.

Knew Edge Wealth. How do you respond to people that say, I'm scared stiff, I don't want to participate any equity market.

Knew Edge Wealth. How do you respond to people that say, I'm scared stiff, I don't want to participate any equity market.

Have a long term perspective, and have a plan, because at the end of the day, we have two things that we need to avoid as financial advisors. We need to keep people from selling at the bottom and buying at the top.

Have a long term perspective, and have a plan, because at the end of the day, we have two things that we need to avoid as financial advisors. We need to keep people from selling at the bottom and buying at the top.

She used to drive Peril and he would lecture on the giant at Fidelity. He actually went in one day. He was so angry. They actually went into Magellan. This is folks in the heyday of Fidelity Magellan, and he ordered a survey of who bought at the top and at the bottom sold at the bottom, and it was stunning. The percentages were just stunning. On your observation, and one of.

She used to drive Peril and he would lecture on the giant at Fidelity. He actually went in one day. He was so angry. They actually went into Magellan. This is folks in the heyday of Fidelity Magellan, and he ordered a survey of who bought at the top and at the bottom sold at the bottom, and it was stunning. The percentages were just stunning. On your observation, and one of.

The things how we navigate this is by focusing on quality through cycles, those companies that go down less than they went up in the prior up cycle. And what that leads us to do is not necessarily chase big, huge rallies like we've seen in certain pockets of the market this year and take kind of a tortoise versus the hair approach. We'll probably get to the same place at the end of the day.

The things how we navigate this is by focusing on quality through cycles, those companies that go down less than they went up in the prior up cycle. And what that leads us to do is not necessarily chase big, huge rallies like we've seen in certain pockets of the market this year and take kind of a tortoise versus the hair approach. We'll probably get to the same place at the end of the day.

Thank you, Thank you, Tom, I appreciate it.

Thank you, Thank you, Tom, I appreciate it.

Carry on, We'll probably get to the same place without having the big wild swings of volatility as you chase to the upside and then see.

Carry on, We'll probably get to the same place without having the big wild swings of volatility as you chase to the upside and then see.

Big reversals to the downside.

Big reversals to the downside.

So here's I think the existential question of the year. People are saying it's a recession delayed, not necessarily deterred completely. You're talking about some of the sectors that did really well this year, even in the face of the rate hikes that will play out just later. When do you say the models are broken and that this is something new, something different at a time when this economy, in these markets seem much more resilient to rate hikes than ever before.

So here's I think the existential question of the year. People are saying it's a recession delayed, not necessarily deterred completely. You're talking about some of the sectors that did really well this year, even in the face of the rate hikes that will play out just later. When do you say the models are broken and that this is something new, something different at a time when this economy, in these markets seem much more resilient to rate hikes than ever before.

That's the key point, and I think that this is a function of ten plus years of quantitative easing, that kept long interest rates down, It allowed people to term out their debt and effectively dulled the power of monetary policy going forward, because one of the things that you've seen this year is that you're not seeing the impact from higher rates of impact consumers or corporation simply because they were able to turn out debt and have very long maturities. And so now as you see rates rise, people kind of shrug simply because there is not that same impact.

That's the key point, and I think that this is a function of ten plus years of quantitative easing, that kept long interest rates down, It allowed people to term out their debt and effectively dulled the power of monetary policy going forward, because one of the things that you've seen this year is that you're not seeing the impact from higher rates of impact consumers or corporation simply because they were able to turn out debt and have very long maturities. And so now as you see rates rise, people kind of shrug simply because there is not that same impact.

Cameron, I'd love your thoughts on this, because this is something we were talking about yesterday that markets basically shrug this off because it was a number of tail risks that you couldn't really price in. Do you have a renewed thought on that?

Cameron, I'd love your thoughts on this, because this is something we were talking about yesterday that markets basically shrug this off because it was a number of tail risks that you couldn't really price in. Do you have a renewed thought on that?

Our thinking is that unless there's something that keeps Russia from continuing to be able to flood markets with heavily discounted oil, that markets probably will look in the other direction because one of the key things that has been bullish for markets is the moderation and oil prices. Part of that is a function of Russia selling so much oil at discounted prices. So if we start to see something that could impact Russia's oil production or their ability to be able to continue to sell. That would be the key upward impact on inflation, and that's downward impact on markets.

Our thinking is that unless there's something that keeps Russia from continuing to be able to flood markets with heavily discounted oil, that markets probably will look in the other direction because one of the key things that has been bullish for markets is the moderation and oil prices. Part of that is a function of Russia selling so much oil at discounted prices. So if we start to see something that could impact Russia's oil production or their ability to be able to continue to sell. That would be the key upward impact on inflation, and that's downward impact on markets.

One more question, were you on a sixty forty reallocation here it's midyear, I got to reallocate even sixty forty.

One more question, were you on a sixty forty reallocation here it's midyear, I got to reallocate even sixty forty.

We believe in sixty forty plus alternatives because there are still fantastic opportunities outside of traditional asset classes where we see dislocations because of all the turmoil of the past couple of years, where we are starting to allocate two things like venture very selectively in private credit. It's a popular place to be, but we are finding great opportunities outside of your traditional assets.

We believe in sixty forty plus alternatives because there are still fantastic opportunities outside of traditional asset classes where we see dislocations because of all the turmoil of the past couple of years, where we are starting to allocate two things like venture very selectively in private credit. It's a popular place to be, but we are finding great opportunities outside of your traditional assets.

Karen Dawson, thank you so much, greatly appreciated. The right person at the right time. That must mean it's a conversation with David Rubinstein. And if Sana besch Loss is one of my favorite people in the world, she is prodigious in knowledge of international hydrocarbons. This is exceptionally well timed from Rock Creek. Sanna besh Loss with David Rubstein, looked for that tonight at nine pm. An important conversation and in hindsight, even more important given the uproar that we see in Russia, Belarus in Ukraine. He is with the Carlisle Group. David Rubinstein joins us this morning. David, I little got goosebump. She is just the perfect person to talk to. Tell us what Missus Beslav brings to the table.

Karen Dawson, thank you so much, greatly appreciated. The right person at the right time. That must mean it's a conversation with David Rubinstein. And if Sana besch Loss is one of my favorite people in the world, she is prodigious in knowledge of international hydrocarbons. This is exceptionally well timed from Rock Creek. Sanna besh Loss with David Rubstein, looked for that tonight at nine pm. An important conversation and in hindsight, even more important given the uproar that we see in Russia, Belarus in Ukraine. He is with the Carlisle Group. David Rubinstein joins us this morning. David, I little got goosebump. She is just the perfect person to talk to. Tell us what Missus Beslav brings to the table.

For those who don't know, Asana Beschloss is an immigrant from Iran. She was educated at Oxford. She was the treasurer and Chief Investment Officer of the World Bank and subsequently started her own firm called Rock Creek, which is now probably the largest woman owned investment firm in the United States, certainly the largest woman owned firm by a woman who's an immigrant, managing about seventeen billion dollars Afsana is involved in a lot of philanthropic activities as well, on the board of the Council and Formulations Rockefeller Foundation, Chairman of the PBS Board, and so forth PBS Foundation Board, and she's really very insightful about where the economy is going. But she's investing this seventeen billion dollars on a daily basis. She's really actively involved in the markets. And he has a very good knowledge as well about the energy world because that was what she first studied when she was at Oxford.

For those who don't know, Asana Beschloss is an immigrant from Iran. She was educated at Oxford. She was the treasurer and Chief Investment Officer of the World Bank and subsequently started her own firm called Rock Creek, which is now probably the largest woman owned investment firm in the United States, certainly the largest woman owned firm by a woman who's an immigrant, managing about seventeen billion dollars Afsana is involved in a lot of philanthropic activities as well, on the board of the Council and Formulations Rockefeller Foundation, Chairman of the PBS Board, and so forth PBS Foundation Board, and she's really very insightful about where the economy is going. But she's investing this seventeen billion dollars on a daily basis. She's really actively involved in the markets. And he has a very good knowledge as well about the energy world because that was what she first studied when she was at Oxford.

I'll say she's really quite good at it in conversation after conversation over the years. David Rubinstein. Just in the last twenty four hours we've seen Lawrence Fink, I believe, over in China with a World Economic Forum, not backtracking but finessing the new ESG message. To me, Doctor Beschlof is hugely focused on the realities of hydrocarbon. What were her thoughts on climate change and on this recalibration of ESG.

I'll say she's really quite good at it in conversation after conversation over the years. David Rubinstein. Just in the last twenty four hours we've seen Lawrence Fink, I believe, over in China with a World Economic Forum, not backtracking but finessing the new ESG message. To me, Doctor Beschlof is hugely focused on the realities of hydrocarbon. What were her thoughts on climate change and on this recalibration of ESG.

Well, her view is that the energy transition is underway. Obviously it's not going to be happening overnight. Well in ESG, she's been a big believer in ESG and is very focused on it. Clearly this pushback now, but in the end, I think it's trying to put your finger in a dyke, trying to stop ESG from coming forward. Many people around the world are not as worried about the politics of ESG as many people in the United States might be, and as a result, you're seeing in Europe and other parts of the world a real concern about ESG and the need to be more sensitive to environmental concerns. And Avsana reflects that because she's really a global citizen in many ways. She's lived in many different places and invest all over the world.

Well, her view is that the energy transition is underway. Obviously it's not going to be happening overnight. Well in ESG, she's been a big believer in ESG and is very focused on it. Clearly this pushback now, but in the end, I think it's trying to put your finger in a dyke, trying to stop ESG from coming forward. Many people around the world are not as worried about the politics of ESG as many people in the United States might be, and as a result, you're seeing in Europe and other parts of the world a real concern about ESG and the need to be more sensitive to environmental concerns. And Avsana reflects that because she's really a global citizen in many ways. She's lived in many different places and invest all over the world.

She's in Washington, as are you. It's a cutthroat job environment. What is the distinction of Rock Creek and their shop is they try to keep, find and retain outstanding women employees and managers.

She's in Washington, as are you. It's a cutthroat job environment. What is the distinction of Rock Creek and their shop is they try to keep, find and retain outstanding women employees and managers.

The firm has about fifty percent of its investment professionals and employees are are women. There aren't that many investment firms with that higher percentage of that size. It's a very large firm at this point, managing, as I mentioned, seventeen billion dollars. So it's been a bit of a struggle, I would say, to be an immigrant and to be a woman trying to build a firm like that. I've known her for a while and briefly she worked at Carlisle, I should say, and before she started her own independent firm. And I would say that she's known to many people around the world for being very smart, very articulate, and very conscious about the importance of ESJ. I should also note, for those people that recognize the last name, her husband is Michael Beschloss, who's a distinguished presidential historian.

The firm has about fifty percent of its investment professionals and employees are are women. There aren't that many investment firms with that higher percentage of that size. It's a very large firm at this point, managing, as I mentioned, seventeen billion dollars. So it's been a bit of a struggle, I would say, to be an immigrant and to be a woman trying to build a firm like that. I've known her for a while and briefly she worked at Carlisle, I should say, and before she started her own independent firm. And I would say that she's known to many people around the world for being very smart, very articulate, and very conscious about the importance of ESJ. I should also note, for those people that recognize the last name, her husband is Michael Beschloss, who's a distinguished presidential historian.

Well he's not only a distinguished presidential historian. But David, let's be clear, her husband has kept Twitter saying here in all the uproar, he's a national institution with informing the public of presidential history out on at Twitter. I look, David, at where we are right now, and I want to speak to you with your public service to the nation and the Carter administration. But almost a nation starving off the recent NBC poll for some form of middle ground or moderate politics from both parties. Do how does do you perceive that the moderate voice maybe what agnew would call the silent America? How do they find their voice in this crazy presidential campaign to come both Republican and Democrat.

Well he's not only a distinguished presidential historian. But David, let's be clear, her husband has kept Twitter saying here in all the uproar, he's a national institution with informing the public of presidential history out on at Twitter. I look, David, at where we are right now, and I want to speak to you with your public service to the nation and the Carter administration. But almost a nation starving off the recent NBC poll for some form of middle ground or moderate politics from both parties. Do how does do you perceive that the moderate voice maybe what agnew would call the silent America? How do they find their voice in this crazy presidential campaign to come both Republican and Democrat.

Well, that's a very fair and very difficult question answer. Politicians typically raise their money from the far left and the far right. It's very difficult to raise money saying I'm going to be right down the middle, I'm going to balance the left and the right. I'm going to come up with a good compromise that everybody should be pleased with. That doesn't raise a lot of money. And as we know in politics, money is very important. People are spending all their time raising money in Washington, d C. So the moderate voice is very difficult to prevail. Hopefully we'll have more moderate voices. Last night, for example, I interviewed somebody that some may not say it's moderate, but at the ninety second Street Why in New York, I interviewed Lis Cheney. Now, clearly people on the right side of the spectrum would say she's not moderate. People on the left side would say, well, she was very conservative. Now she's doing good public service kinds of things. But whatever you think of Liz Cheney, finding people down the middle that people on the left and the right can agree on is very, very difficult. And I would say it's the biggest challenge that we have in our presidential campaign is how do you get your head above water and get some attention unless you get something done on the far right or the far left, which gets the attention, coming down the middle doesn't get much attention.