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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. Now joining us Neil Renaissance Macro for too short a visit Neil. Do you still keep a constructive view on the American economic experiment?

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. Now joining us Neil Renaissance Macro for too short a visit Neil. Do you still keep a constructive view on the American economic experiment?

Well, that's a great question, Tom. I do think the tradeoffs are getting a little bit more challenging here for the Fed. You know, my view is that inflation is likely to moderate over the next several quarters. Okay, and if the Fed is skittish about recalibrating policy given the coming slowing in inflation, then that would make me a little bit more concerned around the economic Olbum. So that's kind of where I'm at. I think the trade offs are not as obvious as they were a year ago. We look at the labor markets, Tom, if you look at average hourly earnings, I mean people talk about stubborn or sticky prices. Well, wages are a very sticky price in their own right, and wages have been slowing quite meaningfully. You know, over the last several months. If you look at the three month rate of change in average hourly earning, it's running below three percent at an annual rate.

Well, that's a great question, Tom. I do think the tradeoffs are getting a little bit more challenging here for the Fed. You know, my view is that inflation is likely to moderate over the next several quarters. Okay, and if the Fed is skittish about recalibrating policy given the coming slowing in inflation, then that would make me a little bit more concerned around the economic Olbum. So that's kind of where I'm at. I think the trade offs are not as obvious as they were a year ago. We look at the labor markets, Tom, if you look at average hourly earnings, I mean people talk about stubborn or sticky prices. Well, wages are a very sticky price in their own right, and wages have been slowing quite meaningfully. You know, over the last several months. If you look at the three month rate of change in average hourly earning, it's running below three percent at an annual rate.

Uh Paul moments ago, Ian Lingen Bmo Capitol. Real question is real spending.

Uh Paul moments ago, Ian Lingen Bmo Capitol. Real question is real spending.

Real spending that goes to that spend my spending Israel.

Real spending that goes to that spend my spending Israel.

I can tell you that Neil talk to us about this two percent inflation data point that the feder Reserve talks about is a target?

I can tell you that Neil talk to us about this two percent inflation data point that the feder Reserve talks about is a target?

How hard of a target is that? Should it be?

How hard of a target is that? Should it be?

Why can't the world live with I don't know, two and a half percent inflation? Two and three quarters percent?

Why can't the world live with I don't know, two and a half percent inflation? Two and three quarters percent?

How do you think about that?

How do you think about that?

Well?

Well?

I think the Fed can live with that. I mean, they've signaled that they're willing to cut with inflation rates above that, So you know, I do think that the two percent number, you know, that's a A not necessarily a right here right now target. It's just you know, kind of a point in time. You know, we want to be moving towards that, you know, in that direction sort of thing. You know that we've litigated whether that's the right number or not. It is what it is. I think for the SAD it just needs to be moving in that direction in order for them to feel comfortable with easing.

I think the Fed can live with that. I mean, they've signaled that they're willing to cut with inflation rates above that, So you know, I do think that the two percent number, you know, that's a A not necessarily a right here right now target. It's just you know, kind of a point in time. You know, we want to be moving towards that, you know, in that direction sort of thing. You know that we've litigated whether that's the right number or not. It is what it is. I think for the SAD it just needs to be moving in that direction in order for them to feel comfortable with easing.

Why is this eight thir dy PCE deflator important just except for the you know, the Fed cares. Why is this inflation series more important than fourteen others?

Why is this eight thir dy PCE deflator important just except for the you know, the Fed cares. Why is this inflation series more important than fourteen others?

Neil Dotta, Well, remember Tom and we have you know, in economics, you have often different ways of measuring the same kind of concept. You have cp and GDI, you have PC and CPI and the PCE number it just covers them. It has a much wider scope, right. That's why unlike CPI, forty percent is not shelter, right, I mean, because they have it has a much wider scope. But also it looks at things covering payments made on behalf of an individual. I mean CPI only looks at out of pocket expenses. So I think one way I'm thinking about it is CPI kind of reflects what people think they spend their money on, and the PC data reflects what people aggravate their money on. And I think that's one of the reasons why that looking at PCEE.

Neil Dotta, Well, remember Tom and we have you know, in economics, you have often different ways of measuring the same kind of concept. You have cp and GDI, you have PC and CPI and the PCE number it just covers them. It has a much wider scope, right. That's why unlike CPI, forty percent is not shelter, right, I mean, because they have it has a much wider scope. But also it looks at things covering payments made on behalf of an individual. I mean CPI only looks at out of pocket expenses. So I think one way I'm thinking about it is CPI kind of reflects what people think they spend their money on, and the PC data reflects what people aggravate their money on. And I think that's one of the reasons why that looking at PCEE.

Neil Dutta does a negative statistic for inflation adjusted personal spending. Is that a precursor for inflation adjusted negative wages out into the rest of twenty twenty four.

Neil Dutta does a negative statistic for inflation adjusted personal spending. Is that a precursor for inflation adjusted negative wages out into the rest of twenty twenty four.

Well, I mean, it just it just I mean to me, the data on real consumption is a reminder that growth is not getting away from the Fed. You know, going into the year Tom, I mean, there was a lot of enthusiasm for economic strength. I think the consensus has largely adjusted to that, right, I mean, we went into the year very downbeat on growth as a consensus, and now people have adjusted, I think, to where they should be, and you're going to likely see a mix, a more mixed data flow now because people are in the generally speaking, I have adjusted. I mean, growth was never going to be as weak as it was people thought it would be at the end of last year. Now we're kind of more in the two to two and a half percent camp, so you should expect to see a more mixed kind of data flow. Relative to consensus now. But yeah, I mean, it just demonstrates that growth isn't getting away from the FED. And when you think about consumption, and you know, remember that in recent months we had seen a bit I think before the revisions, I mean, we did see a meaningful decline in the savings rate. So there's a limit to how much you can draw down savings to finance consumption. So you know, you'd expect to see consumer spending follow the growth in incomes more so. And you know, as I mentioned, you know, wage growth has been moderating, so it's not all that surprising to see consumption, you know, slonging a little bit.

Well, I mean, it just it just I mean to me, the data on real consumption is a reminder that growth is not getting away from the Fed. You know, going into the year Tom, I mean, there was a lot of enthusiasm for economic strength. I think the consensus has largely adjusted to that, right, I mean, we went into the year very downbeat on growth as a consensus, and now people have adjusted, I think, to where they should be, and you're going to likely see a mix, a more mixed data flow now because people are in the generally speaking, I have adjusted. I mean, growth was never going to be as weak as it was people thought it would be at the end of last year. Now we're kind of more in the two to two and a half percent camp, so you should expect to see a more mixed kind of data flow. Relative to consensus now. But yeah, I mean, it just demonstrates that growth isn't getting away from the FED. And when you think about consumption, and you know, remember that in recent months we had seen a bit I think before the revisions, I mean, we did see a meaningful decline in the savings rate. So there's a limit to how much you can draw down savings to finance consumption. So you know, you'd expect to see consumer spending follow the growth in incomes more so. And you know, as I mentioned, you know, wage growth has been moderating, so it's not all that surprising to see consumption, you know, slonging a little bit.

Here key economic data. We're commercial for you for this hour, Paul, Why don't you continue with mister Duddo.

Here key economic data. We're commercial for you for this hour, Paul, Why don't you continue with mister Duddo.

So, Neil, I guess if you look at this data, I mean, there's certainly a camp out there that I think would look at this data and kind of what we've seen over the last several months and say, my federal reserve can stay right where they are. They don't need to do anything here. Let's let these higher rates for longer do their job and pulling inflation down. How do you think about that?

So, Neil, I guess if you look at this data, I mean, there's certainly a camp out there that I think would look at this data and kind of what we've seen over the last several months and say, my federal reserve can stay right where they are. They don't need to do anything here. Let's let these higher rates for longer do their job and pulling inflation down. How do you think about that?

I mean, I think you want to put that argument on as short of valicio as possible.

I mean, I think you want to put that argument on as short of valicio as possible.

Okay.

Okay.

I think frankly, you never have as much time as you think. The risks with the economy are always nonlinear in nature. I'll just leave it at that. I think it's me it's frankly dangerous. You know, I mean, as a policymaker, your job, I mean, you're not a business economist. My job is to try to position clients for upside. Their job is to try to protect things from the downside. It's a risk management job. Okay. And what we know, I mean core inflation came in on the nose point two. I think it was point twenty five if you round it out to the two decimal points. And you know, I remember Waller in a recent speech talking about, you know, I look forward to the day when I don't have to, you know, look at it like out to three decimal places, that that that might actually happen soon.

I think frankly, you never have as much time as you think. The risks with the economy are always nonlinear in nature. I'll just leave it at that. I think it's me it's frankly dangerous. You know, I mean, as a policymaker, your job, I mean, you're not a business economist. My job is to try to position clients for upside. Their job is to try to protect things from the downside. It's a risk management job. Okay. And what we know, I mean core inflation came in on the nose point two. I think it was point twenty five if you round it out to the two decimal points. And you know, I remember Waller in a recent speech talking about, you know, I look forward to the day when I don't have to, you know, look at it like out to three decimal places, that that that might actually happen soon.

Okay, But it's a final question, Neil Dota, this is really really important. As you say, we've gotten out to three decimal points. I'm as guilty as this. The only one I know doesn't go to three decimal points is Lisa Mateo.

Okay, But it's a final question, Neil Dota, this is really really important. As you say, we've gotten out to three decimal points. I'm as guilty as this. The only one I know doesn't go to three decimal points is Lisa Mateo.

Right, she's the only one I know.

Right, she's the only one I know.

Neil data is just simply the great, great call. All here of my economist of twenty twenty three is you said, I'm sorry, productivity is the are animal spirits there and we will clear markets to continue to prosper. Have you changed your tune at all?

Neil data is just simply the great, great call. All here of my economist of twenty twenty three is you said, I'm sorry, productivity is the are animal spirits there and we will clear markets to continue to prosper. Have you changed your tune at all?

Well, the only thing I have a real bone to pick with is on inflation. I think there's not as much upside to growth estimates. There's plenty of downside to inflation estimates relative to the consensus. So the consensus has come closer to me on the economy, but I think move further away on inflation. And so for me, I think the momentum under inflation is lower. I think core inflation will. I mean, you can't rule out a point one a couple of times here and there between now and meeting, you can't rule that out. And once that starts to happen, look for the bond markets to rally. So I think if I had to pick, I mean, as a market economist, stocks or bonds, I would pick bonds because either growth is steady and inflation slows, in which case bond markets rally or growth start slowing and inflation will continue to slow, in which case bond's rally alt. So there's an asymmetry here in the market I think in favor of fixing.

Well, the only thing I have a real bone to pick with is on inflation. I think there's not as much upside to growth estimates. There's plenty of downside to inflation estimates relative to the consensus. So the consensus has come closer to me on the economy, but I think move further away on inflation. And so for me, I think the momentum under inflation is lower. I think core inflation will. I mean, you can't rule out a point one a couple of times here and there between now and meeting, you can't rule that out. And once that starts to happen, look for the bond markets to rally. So I think if I had to pick, I mean, as a market economist, stocks or bonds, I would pick bonds because either growth is steady and inflation slows, in which case bond markets rally or growth start slowing and inflation will continue to slow, in which case bond's rally alt. So there's an asymmetry here in the market I think in favor of fixing.

Neil Dotta, thank you so much. Really treasure the view here at eight thirty on Fair of course with Renaissance Macro look for mister data and Jeff to Graf's good literature. You'll see that on Twitter and LinkedIn as well. Francis Donald joins us out for Manual Life Investment Management. Just wondering. We did a great panel in Toronto. It was out real fire. Nice Francis Donald from that panel in Toronto when I went and saw the new Jersey Devils play the Toronto maple LEAs. Thank you Redo keeper of the MX for that. Francis from that panel you and I did with David Rosenberg two months ago. How has your view changed?

Neil Dotta, thank you so much. Really treasure the view here at eight thirty on Fair of course with Renaissance Macro look for mister data and Jeff to Graf's good literature. You'll see that on Twitter and LinkedIn as well. Francis Donald joins us out for Manual Life Investment Management. Just wondering. We did a great panel in Toronto. It was out real fire. Nice Francis Donald from that panel in Toronto when I went and saw the new Jersey Devils play the Toronto maple LEAs. Thank you Redo keeper of the MX for that. Francis from that panel you and I did with David Rosenberg two months ago. How has your view changed?

It hasn't. Actually, I just looked up on chat GPT give me examples of words for periods without any action that is temporary, because I was trying to come up with a clever way to say we're in a holding pattern, tom, especially in the United States, we are waiting for more information. Was Q one inflation temporary. Where will jobs go? The balance of risks is that jobs deteriorate from this moment forward. But we got to get that June July, August data. The FED is not going to be cutting before September, but we need more information, and so week to week it's bits and bobs on the US economy. Now that's true for the US, it's not true elsewhere. We had big PCE number this morning in the US. We're not talking about that on our team over at Many Life, we're talking about intervention in Japan. Might seem small, huge downward revision on Canadian GDP. Canada escaped a recession by this decibel point in Q three Q four. We have the ECB cutting next week, the BOC cutting next week. There's a lot of movement in the world, but not so much in the US. I think that's the more interesting macro picture right now.

It hasn't. Actually, I just looked up on chat GPT give me examples of words for periods without any action that is temporary, because I was trying to come up with a clever way to say we're in a holding pattern, tom, especially in the United States, we are waiting for more information. Was Q one inflation temporary. Where will jobs go? The balance of risks is that jobs deteriorate from this moment forward. But we got to get that June July, August data. The FED is not going to be cutting before September, but we need more information, and so week to week it's bits and bobs on the US economy. Now that's true for the US, it's not true elsewhere. We had big PCE number this morning in the US. We're not talking about that on our team over at Many Life, we're talking about intervention in Japan. Might seem small, huge downward revision on Canadian GDP. Canada escaped a recession by this decibel point in Q three Q four. We have the ECB cutting next week, the BOC cutting next week. There's a lot of movement in the world, but not so much in the US. I think that's the more interesting macro picture right now.

I'm getting on to a late jobs report June seven. The survey is still one hundred and eighty thousand. I'm sorry, France, there's one hundred and eighty thousand. Non farm payrolls is still not maybe not robust. But I'm gonna borrow from Bob sinch A solid American economy.

I'm getting on to a late jobs report June seven. The survey is still one hundred and eighty thousand. I'm sorry, France, there's one hundred and eighty thousand. Non farm payrolls is still not maybe not robust. But I'm gonna borrow from Bob sinch A solid American economy.

Yeah, it's not a problem. It's not a problem. And this is the big issue facing the FED is that the balance of risks is tilting towards an acceleration of weakness in the US, but inflation is still above target and the job market had not deteriorated. We like to say in our team, when the FED starts cutting rates, you won't be asking why, right the FED cut weight in the next two months, we'd all be shaking our heads saying why. So they just don't have the data now. That said, when we forecast what's ahead, we think they will have enough data by September. But they don't have it now, which is why they can't cut in June July, and they have to wait.

Yeah, it's not a problem. It's not a problem. And this is the big issue facing the FED is that the balance of risks is tilting towards an acceleration of weakness in the US, but inflation is still above target and the job market had not deteriorated. We like to say in our team, when the FED starts cutting rates, you won't be asking why, right the FED cut weight in the next two months, we'd all be shaking our heads saying why. So they just don't have the data now. That said, when we forecast what's ahead, we think they will have enough data by September. But they don't have it now, which is why they can't cut in June July, and they have to wait.

Thank god, we're commercial free this hour with key economic data and the Marcus lifting off at SPA accept seventeen points now first green in days in days. The live chat on YouTube is lit up there that I can't Paul, this is too much, Brent, Thank you so much. Alcohol free Corona is sprite. There you go, Brent, thank you for that wisdom.

Thank god, we're commercial free this hour with key economic data and the Marcus lifting off at SPA accept seventeen points now first green in days in days. The live chat on YouTube is lit up there that I can't Paul, this is too much, Brent, Thank you so much. Alcohol free Corona is sprite. There you go, Brent, thank you for that wisdom.

So Francis here you talked about the bav cutting rates. The European Central bank cutting rates soon. I mean a lot of folks out there Francis would say, my Federal Reserve is behind the curve here, they should be cutting.

So Francis here you talked about the bav cutting rates. The European Central bank cutting rates soon. I mean a lot of folks out there Francis would say, my Federal Reserve is behind the curve here, they should be cutting.

Now. What do you say to those.

Now. What do you say to those.

Folks, Well, I say this is actually very atypical, and I think that's what's causing problems. Historically, the FED goes first, everybody else follows. EM's go last. The cycle has been so fundamentally different. Ems are almost done their cutting cycle. We have several developed markets who are cutting ahead of the FED. I think this is actually creating some problems. And I was talking to my team today. We're so used to saying the FED only cares about what's happening domestically, and the FED is the ruler of all others central banks. But the FED is also going to care about some of the global disruptions that is coming from them being last or near last. We've got the RBA and the BOJ of course, that are still on or still on the hawkish glance. And so the number one question that I get is what are we doing with currency risk and countries that need to cut rates because their economy is weakening but can't diverge to substantially from the FED. So I think we might see some subtle or I'd like to see some subtle references from the FED of some of the chaos that's being created by the FED going later the end of the day. Though these central banks have their own domestic bandates, the FED doesn't have justification to be cut. These other central banks that are cutting absolutely have to get on the ball or else they're going to risk bigger recessions and potentially larger rate divert.

Folks, Well, I say this is actually very atypical, and I think that's what's causing problems. Historically, the FED goes first, everybody else follows. EM's go last. The cycle has been so fundamentally different. Ems are almost done their cutting cycle. We have several developed markets who are cutting ahead of the FED. I think this is actually creating some problems. And I was talking to my team today. We're so used to saying the FED only cares about what's happening domestically, and the FED is the ruler of all others central banks. But the FED is also going to care about some of the global disruptions that is coming from them being last or near last. We've got the RBA and the BOJ of course, that are still on or still on the hawkish glance. And so the number one question that I get is what are we doing with currency risk and countries that need to cut rates because their economy is weakening but can't diverge to substantially from the FED. So I think we might see some subtle or I'd like to see some subtle references from the FED of some of the chaos that's being created by the FED going later the end of the day. Though these central banks have their own domestic bandates, the FED doesn't have justification to be cut. These other central banks that are cutting absolutely have to get on the ball or else they're going to risk bigger recessions and potentially larger rate divert.

Well, that's kind of where I want to go. For instance.

Well, that's kind of where I want to go. For instance.

I mean, there are a lot of folks out there that are saying, boy, the more this FED r weights here in terms of cutting rates, the more we raised the risk of a I don't know, an accident happening.

I mean, there are a lot of folks out there that are saying, boy, the more this FED r weights here in terms of cutting rates, the more we raised the risk of a I don't know, an accident happening.

In the marketplace or something worse. What's that risk to you? Yeah, I'm post with Dell an accident, oh those guys. Yeah, you know.

In the marketplace or something worse. What's that risk to you? Yeah, I'm post with Dell an accident, oh those guys. Yeah, you know.

There are a lot of things that are different in this post COVID economy. But I am still a traditionalist in the sense that I think basic economic relationships hold higher rates exist to bring down demand, and we have seen already a few small accidents that occur. But I think we bury the lead a little bit when we hear economists talk about, oh, it's going to be a soft landing and the Fed's only going to cut three times. Well A, the question is if they don't cut pretty significantly, what does the next recession look like. Maybe it's not a twenty twenty four, maybe it's not even a twenty twenty five, but that recession is likely to be much worse.

There are a lot of things that are different in this post COVID economy. But I am still a traditionalist in the sense that I think basic economic relationships hold higher rates exist to bring down demand, and we have seen already a few small accidents that occur. But I think we bury the lead a little bit when we hear economists talk about, oh, it's going to be a soft landing and the Fed's only going to cut three times. Well A, the question is if they don't cut pretty significantly, what does the next recession look like. Maybe it's not a twenty twenty four, maybe it's not even a twenty twenty five, but that recession is likely to be much worse.

Thank you, Francis Don. What's great? I mean our bookers, they have it nailed. So I say it on my cell phone in shock over these announcements. The speed of the verdict for me as an amateur, all thirty four counts for me as an amateur. And I turned to the team. You know, we're texting back and forth like everybody does today, and there's only one person I wanted to talk to, simply put, is a ute out of amherst UMass Amherst in Harvard. He worked with Leon Jowarski. That's all you have to know. Nick Ackerman joins US now with decades of experience in the American judicial system. Nick, my first question is simple, how will this moment? How will this verdict effect the other matters of litigation that Donald Trump faces?

Thank you, Francis Don. What's great? I mean our bookers, they have it nailed. So I say it on my cell phone in shock over these announcements. The speed of the verdict for me as an amateur, all thirty four counts for me as an amateur. And I turned to the team. You know, we're texting back and forth like everybody does today, and there's only one person I wanted to talk to, simply put, is a ute out of amherst UMass Amherst in Harvard. He worked with Leon Jowarski. That's all you have to know. Nick Ackerman joins US now with decades of experience in the American judicial system. Nick, my first question is simple, how will this moment? How will this verdict effect the other matters of litigation that Donald Trump faces?

I don't know as if it will affect it directly. It really right now, those other matters I've been delayed for various reasons. The big item is in Washington, D C. And Atlanta, where they're waiting to see what the Supreme Court does with the immunity argument that Trump's set forth. So I think that that one really hinges on the immunity. But I think it does cast a whole different pail on these other cases, which most people have said are probably more serious in some ways, although I would agree with that, but it certainly puts the pressure to get those cases moving and get them into court and tried.

I don't know as if it will affect it directly. It really right now, those other matters I've been delayed for various reasons. The big item is in Washington, D C. And Atlanta, where they're waiting to see what the Supreme Court does with the immunity argument that Trump's set forth. So I think that that one really hinges on the immunity. But I think it does cast a whole different pail on these other cases, which most people have said are probably more serious in some ways, although I would agree with that, but it certainly puts the pressure to get those cases moving and get them into court and tried.

What does an appeal court look like? I think we even if we didn't have TV cameras there, we had the great art of sketches, and I think we know what Nick, Paul Drake, Perry Mason, I got it done cold. But Nick, what does an appeal court actually look like?

What does an appeal court look like? I think we even if we didn't have TV cameras there, we had the great art of sketches, and I think we know what Nick, Paul Drake, Perry Mason, I got it done cold. But Nick, what does an appeal court actually look like?

Well, you're saying in appeals court to appeal this conviction, Yes.

Well, you're saying in appeals court to appeal this conviction, Yes.

What does the actual physical What do you do with an appeals court?

What does the actual physical What do you do with an appeals court?

Well, what you do is you go up to there's two podiums, one for the person who's appealing and the other for the person who's opposing the appeal. In this case, it'll be on the prosecution opposing the appeal, and it'll be Trump making the appeal. And you've got in this case in the first department, there'll be five judges that will hear that appeal, And so the only argument they really have is to try and somehow dredge out arguments based on the law to appeal this conviction, because essentially, once you have a jury verdict and they've decided on the credibility of the witnesses and the facts, there's not much to appeal after that. And I don't think there's much to appeal either on the legal portion of this. So I don't think this appeal is going to go very far for Donald Trump.

Well, what you do is you go up to there's two podiums, one for the person who's appealing and the other for the person who's opposing the appeal. In this case, it'll be on the prosecution opposing the appeal, and it'll be Trump making the appeal. And you've got in this case in the first department, there'll be five judges that will hear that appeal, And so the only argument they really have is to try and somehow dredge out arguments based on the law to appeal this conviction, because essentially, once you have a jury verdict and they've decided on the credibility of the witnesses and the facts, there's not much to appeal after that. And I don't think there's much to appeal either on the legal portion of this. So I don't think this appeal is going to go very far for Donald Trump.

All right, Nick, then let's turn to the sentencing aspect of this case. July eleventh. What are the scenarios? What are the most likely sentencing scenarios?

All right, Nick, then let's turn to the sentencing aspect of this case. July eleventh. What are the scenarios? What are the most likely sentencing scenarios?

Nick, Well, before January eleventh, there's going to be a couple of reports that you're going to see. I guess we won't see him until the time of sentencing, but probation does a report that's provided to the court. Both sides provide sentencing memoranda to the court. The question, of course, is what they're not the DA's office asked for jail time, and if they do, whether or not the judge Merchant will provide jail time. My opinion is that, based on at least the fact that Michael Cohen served three years for these violations, and that Alan Weiselberg, the CFO of Trump Org, who is instrumental in setting up the phony corporate records on this and the payments that went out to reimburse Michael Cohen, He's already served three months in Rikers Island for you know, unrelated matters, and now he's serving three months, another three months in Rikers Island for line and it's pretty clear that he is not cooperated against Donald Trump. And I think the judge is going to have to consider that here are two people that were instrumental in this crime that did serve jail time, and I find it hard to believe that he is not going to feel compelled to give Donald Trump at least some jail time.

Nick, Well, before January eleventh, there's going to be a couple of reports that you're going to see. I guess we won't see him until the time of sentencing, but probation does a report that's provided to the court. Both sides provide sentencing memoranda to the court. The question, of course, is what they're not the DA's office asked for jail time, and if they do, whether or not the judge Merchant will provide jail time. My opinion is that, based on at least the fact that Michael Cohen served three years for these violations, and that Alan Weiselberg, the CFO of Trump Org, who is instrumental in setting up the phony corporate records on this and the payments that went out to reimburse Michael Cohen, He's already served three months in Rikers Island for you know, unrelated matters, and now he's serving three months, another three months in Rikers Island for line and it's pretty clear that he is not cooperated against Donald Trump. And I think the judge is going to have to consider that here are two people that were instrumental in this crime that did serve jail time, and I find it hard to believe that he is not going to feel compelled to give Donald Trump at least some jail time.

Wow, in what way?

Wow, in what way?

I mean?

I mean?

You know, I wish I could stop the clock here in the show, Nick Akerman, I can't. I mean, what is it? Weekend jail time. I mean, is it something creative and different or is it Are you telling me the former president of the United States could enjoy a month at Rikers Island? Yeah?

You know, I wish I could stop the clock here in the show, Nick Akerman, I can't. I mean, what is it? Weekend jail time. I mean, is it something creative and different or is it Are you telling me the former president of the United States could enjoy a month at Rikers Island? Yeah?

Absolutely, I mean I think what they'd have to do is create a presidential suite at Rikers Island because the Secret Service has to be there with him, obviously, But I think there is a very strong likelihood that he is going to be sentenced to in prison.

Absolutely, I mean I think what they'd have to do is create a presidential suite at Rikers Island because the Secret Service has to be there with him, obviously, But I think there is a very strong likelihood that he is going to be sentenced to in prison.

Will he be protected from other prisoners? I'll just be as direct about it as I can. Absolutely.

Will he be protected from other prisoners? I'll just be as direct about it as I can. Absolutely.

I don't see how in any way he can be put into the general population.

I don't see how in any way he can be put into the general population.

I just don't see that happened. What does he need to say at eleven am, Nick Akerman, we got it. We're running out of time. Unfortunately. What does the former president of the United States have to say at eleven am to keep himself on a Rikers Island, a Rikers prison.

I just don't see that happened. What does he need to say at eleven am, Nick Akerman, we got it. We're running out of time. Unfortunately. What does the former president of the United States have to say at eleven am to keep himself on a Rikers Island, a Rikers prison.

At eleven am. I don't think there's anything he can say that's going to help him on that score. This is all going to be decided in the courts. Just like the jury decided guilt or innocence. The judge is going to decide the punishment, and it's totally apart from anything that Donald Trump says at eleven am. Nick captains something that violates that gag order, he could wind up in jail a lot quicker because now that he's been convicted by a jury of his peers, I think Judge Merchant is going to feel a lot more comfortable enforcing that gag order through imprisonment.

At eleven am. I don't think there's anything he can say that's going to help him on that score. This is all going to be decided in the courts. Just like the jury decided guilt or innocence. The judge is going to decide the punishment, and it's totally apart from anything that Donald Trump says at eleven am. Nick captains something that violates that gag order, he could wind up in jail a lot quicker because now that he's been convicted by a jury of his peers, I think Judge Merchant is going to feel a lot more comfortable enforcing that gag order through imprisonment.

Now, thank you for your service to Bloomberg with Bloomberg Law, with June Grasso in Balance of Power is well. Nick Ackerman working with Leon Jowarski a few years ago as well, Betsy Stevenson and Justin Wolfers out in ann Arbor have a textbook out which melds public policy into economics like nobody about fifteen to fifteen years ago, Rick Michigan over at Columbia did the same thing. Living that reality is Jason Furman of Harvard University. And all I can say, folks, you sit there and go jeez. I wish I had a briefing like they have at the White House, or I wish I could just for ten minutes sit in the back row of X ten. I won't ask any questions, but I just want to know what's going on. No one is out on Twitter conveying information about this post pandemic time. Like Professor Furman. He joins us now from X ten and Harvard at University. Jason, first of all, congratulations on your Twitter feed. Are you doing this or is this a host of young freshmen at Harvard.

Now, thank you for your service to Bloomberg with Bloomberg Law, with June Grasso in Balance of Power is well. Nick Ackerman working with Leon Jowarski a few years ago as well, Betsy Stevenson and Justin Wolfers out in ann Arbor have a textbook out which melds public policy into economics like nobody about fifteen to fifteen years ago, Rick Michigan over at Columbia did the same thing. Living that reality is Jason Furman of Harvard University. And all I can say, folks, you sit there and go jeez. I wish I had a briefing like they have at the White House, or I wish I could just for ten minutes sit in the back row of X ten. I won't ask any questions, but I just want to know what's going on. No one is out on Twitter conveying information about this post pandemic time. Like Professor Furman. He joins us now from X ten and Harvard at University. Jason, first of all, congratulations on your Twitter feed. Are you doing this or is this a host of young freshmen at Harvard.

I'm doing it. I have somebody that helps me with the charts.

I'm doing it. I have somebody that helps me with the charts.

There we go. It's like liz Ane Saunders at SWOP. Yeah, I mean the kid from Pepperdine's doing it. I mean, not Lizan. Someone helps you with the charts. What's the most important chart right now? I'm going to go course services X something. What's your most important chart? Jason?

There we go. It's like liz Ane Saunders at SWOP. Yeah, I mean the kid from Pepperdine's doing it. I mean, not Lizan. Someone helps you with the charts. What's the most important chart right now? I'm going to go course services X something. What's your most important chart? Jason?

I think probably core PCE market based. I haven't liked the imputed stuff being in there for a while. Back in twenty twenty two, it was lowering inflation because the stock market was falling. Now it's raising inflation because the stock market is rising. So I think more of a focus on market based inflation is a good thing.

I think probably core PCE market based. I haven't liked the imputed stuff being in there for a while. Back in twenty twenty two, it was lowering inflation because the stock market was falling. Now it's raising inflation because the stock market is rising. So I think more of a focus on market based inflation is a good thing.

How do you describe I mean you're gonna be you know, you're at Harvard now, but if you were down at sixteen hundred Pennsylvania Avenue, you're sitting on the couch with President Biden, and you're going, look, people are getting buried by home insurance. Forget about this rent Oeer stuff. The fact is there's selected levels way above twenty nineteen. What would you advise President Biden?

How do you describe I mean you're gonna be you know, you're at Harvard now, but if you were down at sixteen hundred Pennsylvania Avenue, you're sitting on the couch with President Biden, and you're going, look, people are getting buried by home insurance. Forget about this rent Oeer stuff. The fact is there's selected levels way above twenty nineteen. What would you advise President Biden?

Look, it's tough, I mean inflation. He doesn't have a whole lot of control over for him. There's the fiscal side, most of that's with Congress. There are things like student loans that may end up costing a trillion dollars which are going the wrong way in all of this. But the most important thing he needs to think about over the next five months is he doesn't have a whole lot of control over this. The economy in some respects is really really good, but people aren't wrong to be frustrated about the pace of real wage growth the growth of prices.

Look, it's tough, I mean inflation. He doesn't have a whole lot of control over for him. There's the fiscal side, most of that's with Congress. There are things like student loans that may end up costing a trillion dollars which are going the wrong way in all of this. But the most important thing he needs to think about over the next five months is he doesn't have a whole lot of control over this. The economy in some respects is really really good, but people aren't wrong to be frustrated about the pace of real wage growth the growth of prices.

All right, Jason, let's take a look at the consumer here.

All right, Jason, let's take a look at the consumer here.

We had personal income come in and zero point three percent positive today, right in line with expectations. Personal spending smidge light zero point two percent. But how do you see the consumer out there? A lot of folks are talking about a couple different consumers out there.

We had personal income come in and zero point three percent positive today, right in line with expectations. Personal spending smidge light zero point two percent. But how do you see the consumer out there? A lot of folks are talking about a couple different consumers out there.

Actually, yeah, we're starting to see a little bit of slowing on a real basis. Consumer spending fell in April. It had been really strong in February and March. If you look at the year as a whole, it's up at about a one percent pace so far. Consumers what kept us out of recession last year. As the Fed raised rates over and over and over again, they're relaxing a little bit. The saving rate is around three and a half percent. It's that could stay that way for some time. I don't think it can stay that way forever.

Actually, yeah, we're starting to see a little bit of slowing on a real basis. Consumer spending fell in April. It had been really strong in February and March. If you look at the year as a whole, it's up at about a one percent pace so far. Consumers what kept us out of recession last year. As the Fed raised rates over and over and over again, they're relaxing a little bit. The saving rate is around three and a half percent. It's that could stay that way for some time. I don't think it can stay that way forever.

All right, So we got some more inflation data today and Jason presumably this feder reserva, but we also looking at the employment environment that seems pretty solid as well. We'll get some more data next week, but the labor market seems pretty solid as well.

All right, So we got some more inflation data today and Jason presumably this feder reserva, but we also looking at the employment environment that seems pretty solid as well. We'll get some more data next week, but the labor market seems pretty solid as well.

Yeah.

Yeah.

I mean that's the thing. That's part of what's going on with rate cuts right now, is there's not much reason to cut them. It's economy's growing well, job growth is well. We're more nervous about inflation than we are to bat inflation, so why move? And I think it's going to take a while for the Fed to be reassured. Back in December, they were looking at six month core se at a one point nine percent annual rate. Now it's a three point two percent annual rate. This worm can turn very quickly. I think it's going to take a while before they can feel reassured enough.

I mean that's the thing. That's part of what's going on with rate cuts right now, is there's not much reason to cut them. It's economy's growing well, job growth is well. We're more nervous about inflation than we are to bat inflation, so why move? And I think it's going to take a while for the Fed to be reassured. Back in December, they were looking at six month core se at a one point nine percent annual rate. Now it's a three point two percent annual rate. This worm can turn very quickly. I think it's going to take a while before they can feel reassured enough.

I'm not rate, Jason. I want to conflate two questions here, which is unfair to you, but no one can handle it like you. You have led the charge with comparing one year, six months, three month annualized, et cetera, et cetera, parsing out the timeline that we should choose to study inflation. In addition with this is the raging battle over this series or that series, or this trimmed or that Cleveland CPI firm and CPI whatever. Conflate those two ideas together. What's your best picture about a measure inflation?

I'm not rate, Jason. I want to conflate two questions here, which is unfair to you, but no one can handle it like you. You have led the charge with comparing one year, six months, three month annualized, et cetera, et cetera, parsing out the timeline that we should choose to study inflation. In addition with this is the raging battle over this series or that series, or this trimmed or that Cleveland CPI firm and CPI whatever. Conflate those two ideas together. What's your best picture about a measure inflation?

Look, I've been having fun with something I call that ecumenicalunderlying inflation measure, and I take you eight different ways to measure inflation. I look at it over three different time horizons. That's twenty four different numbers, and then I just take the median of all twenty four of those, and you know, statistically it actually works pretty well. It gives you a pretty good sense of what underlying inflation is. All that said, if I had to pick a conventional number, you know, looking at six month core inflation is not a bad way to understand.

Look, I've been having fun with something I call that ecumenicalunderlying inflation measure, and I take you eight different ways to measure inflation. I look at it over three different time horizons. That's twenty four different numbers, and then I just take the median of all twenty four of those, and you know, statistically it actually works pretty well. It gives you a pretty good sense of what underlying inflation is. All that said, if I had to pick a conventional number, you know, looking at six month core inflation is not a bad way to understand.

We don't want any gossip here. Does does MANQ believe in the gospel of Furman ecumenical inflation.

We don't want any gossip here. Does does MANQ believe in the gospel of Furman ecumenical inflation.

He's on the record saying he thinks inflation's coming down this year. He's optimistic about shelter growth slowing. He said that before in public. I'm less sure that there's that much more slowing from where we are now. And I think there's some other shoes to drop, like goods prices aren't going to keep falling the way they have over the last six months.

He's on the record saying he thinks inflation's coming down this year. He's optimistic about shelter growth slowing. He said that before in public. I'm less sure that there's that much more slowing from where we are now. And I think there's some other shoes to drop, like goods prices aren't going to keep falling the way they have over the last six months.

I'm sorry. It's like Jeremy ben you know, his heads are bronzed in some museum and in England somewhere. I mean, we're back to unitarian inflation here with the next.

I'm sorry. It's like Jeremy ben you know, his heads are bronzed in some museum and in England somewhere. I mean, we're back to unitarian inflation here with the next.

Exactly approach, Professor, there are a lot of folks out there in academia and in practice in the markets that say, you know, forget about the first few months of twenty twenty four inflations. Kind of it's already whipped. We're in good shape. The FED should be cutting now. The risk of not cutting is too great. What do you say to those folks, I.

Exactly approach, Professor, there are a lot of folks out there in academia and in practice in the markets that say, you know, forget about the first few months of twenty twenty four inflations. Kind of it's already whipped. We're in good shape. The FED should be cutting now. The risk of not cutting is too great. What do you say to those folks, I.

Say that the inflation risk is quite asymmetric. They might be right, there might even be like a forty percent chance they're right, But there's a thirty percent chance that inflation is going to be well above three percent, at which point we're in a really unacceptable place in terms of the Fed's credibility. So you do that type of risk analysis and it says, don't cut. In general, the best forecast for the economists that it's going to keep doing what it's done, and growth has been strong. Job growth has been strong. That's my best guests going forward. On the other hand, inflation has been elevated, and that probably should be your best guests going forward. So we're at an asymmetric place on the dual mandate right now.

Say that the inflation risk is quite asymmetric. They might be right, there might even be like a forty percent chance they're right, But there's a thirty percent chance that inflation is going to be well above three percent, at which point we're in a really unacceptable place in terms of the Fed's credibility. So you do that type of risk analysis and it says, don't cut. In general, the best forecast for the economists that it's going to keep doing what it's done, and growth has been strong. Job growth has been strong. That's my best guests going forward. On the other hand, inflation has been elevated, and that probably should be your best guests going forward. So we're at an asymmetric place on the dual mandate right now.

I mean, professor Furman, you're such a hitter like I. Did you do a speech at the University College of London and did they show you the taxidermied head of Jeremy Bentham? Is that where we came up with ecumenical inflation.

I mean, professor Furman, you're such a hitter like I. Did you do a speech at the University College of London and did they show you the taxidermied head of Jeremy Bentham? Is that where we came up with ecumenical inflation.

I have not met Jeremy Bentham alive.

I have not met Jeremy Bentham alive.

We're dead. There's news you could use from Bloomberg News today. Jason Furman, thank you so much. And I can't say enough folks about his and his team's effort out on Twitter. Seriously, it is the best graphical presentation of where we are. This is a 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.

We're dead. There's news you could use from Bloomberg News today. Jason Furman, thank you so much. And I can't say enough folks about his and his team's effort out on Twitter. Seriously, it is the best graphical presentation of where we are. This is a 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.