Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at seven am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at seven am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Claudia Sam, yesterday in front of sixteen hundred people at the Marriott Marquis, we had a fantastic panel and they mentioned Claudia Sam. She is definitive on rational analysis of the American labor market out of Michigan Chief Economists, News Centery Advisors joining us.

Claudia Sam, yesterday in front of sixteen hundred people at the Marriott Marquis, we had a fantastic panel and they mentioned Claudia Sam. She is definitive on rational analysis of the American labor market out of Michigan Chief Economists, News Centery Advisors joining us.

Now, Claudia, you write that the.

Now, Claudia, you write that the.

Some rule triggers at four and a half percent. How distant are we from a four and a half percent unemployment rate?

Some rule triggers at four and a half percent. How distant are we from a four and a half percent unemployment rate?

So I think we're unths away from seeing that unemployment rate. It tends to take time for it to build. Unfortunately. I think that is where we're headed here, so we could see something like that in the second half of the year.

So I think we're unths away from seeing that unemployment rate. It tends to take time for it to build. Unfortunately. I think that is where we're headed here, so we could see something like that in the second half of the year.

Claudia, the question I think for a lot of folks here when we look at this data here today on the jobs, and it's not going to give as much of a hint to the way employers are thinking about the job market today post tariff discussion, But what will you be looking at it?

Claudia, the question I think for a lot of folks here when we look at this data here today on the jobs, and it's not going to give as much of a hint to the way employers are thinking about the job market today post tariff discussion, But what will you be looking at it?

Today's data, right, So you know today's data matters. This employment report matters not because it tells us what's going to be the effect of all the administration's policies, particularly with the teriff policies that we learned about this week, But it is a policy happens in a macroeconomic context. We need this labor market to be as resilient and strong as possible to help workers and households whether this storm is coming. That was absolutely crucial. We in twenty twenty two or twenty twenty three, we're economous. Many were saying session is coming, recession is coming. We had some big policy changes fed raising interest rates, Inflation was high. We did not have a recession, and a key to that was we had a very strong labor market that buffered it. So it's really important this context going in even if the policy effects aren't there today.

Today's data, right, So you know today's data matters. This employment report matters not because it tells us what's going to be the effect of all the administration's policies, particularly with the teriff policies that we learned about this week, But it is a policy happens in a macroeconomic context. We need this labor market to be as resilient and strong as possible to help workers and households whether this storm is coming. That was absolutely crucial. We in twenty twenty two or twenty twenty three, we're economous. Many were saying session is coming, recession is coming. We had some big policy changes fed raising interest rates, Inflation was high. We did not have a recession, and a key to that was we had a very strong labor market that buffered it. So it's really important this context going in even if the policy effects aren't there today.

Clauda Danny blanche Flower up at Dartmouth's just mentioned your name in awe over the Michigan approach to listening to non experts to the Michigan conference numbers.

Clauda Danny blanche Flower up at Dartmouth's just mentioned your name in awe over the Michigan approach to listening to non experts to the Michigan conference numbers.

In all that his.

In all that his.

President Trump broken the labor and investment confidence of America.

President Trump broken the labor and investment confidence of America.

Well, and I will say Danny's done excellent work using those expectations surveys, but Michigan survey the conference board to really get a sense of is a recession coming? So the song rule was a lot about is one here? But he's done a lot of work on what is one coming? And take those the sentiment surveys very seriously, and it's ugly right now. We had an ugly period a few years ago too where people were very downbeats. But again we're back in place where people are telling us and business is too. The outlook is pretty grim. And that's even before I mean that's last month surveys, right, that's not even this week's survey. So it's you. It can be hard to interpret those data. Sometimes they can lead us astray, and yet like there are real policy tatas happening. And one thing with this little book Salt Data, is you can look into the future and give us that cuit.

Well, and I will say Danny's done excellent work using those expectations surveys, but Michigan survey the conference board to really get a sense of is a recession coming? So the song rule was a lot about is one here? But he's done a lot of work on what is one coming? And take those the sentiment surveys very seriously, and it's ugly right now. We had an ugly period a few years ago too where people were very downbeats. But again we're back in place where people are telling us and business is too. The outlook is pretty grim. And that's even before I mean that's last month surveys, right, that's not even this week's survey. So it's you. It can be hard to interpret those data. Sometimes they can lead us astray, and yet like there are real policy tatas happening. And one thing with this little book Salt Data, is you can look into the future and give us that cuit.

You can.

You can.

Claudia, stay with us, please, We're going to go to doctor Sam here after the data. Neil Dutta waiting on deck, who's been brilliant again. Duta talking with Krugman. Professor Krugman will join us next week at some point, Claudia, completely unfair for you to go granually here on the jobs report.

Claudia, stay with us, please, We're going to go to doctor Sam here after the data. Neil Dutta waiting on deck, who's been brilliant again. Duta talking with Krugman. Professor Krugman will join us next week at some point, Claudia, completely unfair for you to go granually here on the jobs report.

We'll let Neil Dutta do that. But do you take us three?

We'll let Neil Dutta do that. But do you take us three?

I mean, Jason Furman's go an ecumenical, honest with seven moving averages.

I mean, Jason Furman's go an ecumenical, honest with seven moving averages.

What does Claudia Sam do?

What does Claudia Sam do?

Do you look at the two months, the three months with revisions, the six month moving average, which matters to you on non farm payrolls.

Do you look at the two months, the three months with revisions, the six month moving average, which matters to you on non farm payrolls.

Right, well, you definitely don't want to focus on just one month of data. Three month moving average is a good place to start. I will say, though, I'm the employment report in general, you just want to breathe it all in, right, like, you need to look at this. You know, the payrolls, this is good. That was a solid, solid red even with the revision unemployment rate. We don't like to see it taking up on utilization. So I'd say this is kind of a mixed bag. That the wage pressures aren't there, so at least we're not, you know, pulling in another inflationary impulse here. So I think, you know, generally this this looks a lot like what we've been seeing from this labor market, which is it's in a good place, but it's not it's not the like firing on all cylinders that we would need to, you know, go up against some of these shoes.

Right, well, you definitely don't want to focus on just one month of data. Three month moving average is a good place to start. I will say, though, I'm the employment report in general, you just want to breathe it all in, right, like, you need to look at this. You know, the payrolls, this is good. That was a solid, solid red even with the revision unemployment rate. We don't like to see it taking up on utilization. So I'd say this is kind of a mixed bag. That the wage pressures aren't there, so at least we're not, you know, pulling in another inflationary impulse here. So I think, you know, generally this this looks a lot like what we've been seeing from this labor market, which is it's in a good place, but it's not it's not the like firing on all cylinders that we would need to, you know, go up against some of these shoes.

And Paul, you're going back and forth with jer own Powell. I mean, this doesn't move the needle for the fat doesn't.

And Paul, you're going back and forth with jer own Powell. I mean, this doesn't move the needle for the fat doesn't.

I'm not sure we'll see soon though. But Claudia here, how do you think, maybe let's just say, how do you think the labor market's going to evolve for the remainder of the year, giving some of this uncertainty that that's number brought into the accon outlook with all these tariffs.

I'm not sure we'll see soon though. But Claudia here, how do you think, maybe let's just say, how do you think the labor market's going to evolve for the remainder of the year, giving some of this uncertainty that that's number brought into the accon outlook with all these tariffs.

Well, so I think the labor market is going to get on a slowing trajectory. The thing is, it's one of the it's one of the last places where this shows up. We're going to see prices start to move up pretty rapidly, and then you see consumers pull back, and then you see you know, employers go from not hiring as much to not as many hours, and then they start laying off and then you know, it takes time for this to move for a shock like this like these tariffs, to move their way through the economy, and if if you wait until it shows up in the higher unemployment rate to do something, they like to said, you waited until we're passed. So I think that's you don't want to look here first the labor market, but the trajectory is not encouraging the policy.

Well, so I think the labor market is going to get on a slowing trajectory. The thing is, it's one of the it's one of the last places where this shows up. We're going to see prices start to move up pretty rapidly, and then you see consumers pull back, and then you see you know, employers go from not hiring as much to not as many hours, and then they start laying off and then you know, it takes time for this to move for a shock like this like these tariffs, to move their way through the economy, and if if you wait until it shows up in the higher unemployment rate to do something, they like to said, you waited until we're passed. So I think that's you don't want to look here first the labor market, but the trajectory is not encouraging the policy.

Changes, Claudia, to the silliness of the sum rule. And you've been very good about you know, the people speaking with sorted to trying to crystal ball or recession. Nobody knows, Claudia, where we are may second the April report June sixth, the main report, where would you guess the labor economy?

Changes, Claudia, to the silliness of the sum rule. And you've been very good about you know, the people speaking with sorted to trying to crystal ball or recession. Nobody knows, Claudia, where we are may second the April report June sixth, the main report, where would you guess the labor economy?

Is the fourth of July?

Is the fourth of July?

Oh goodness, you know the answer to that question is going to change so much on what the administration says the next few weeks. Right, it really can't be underscore how like the duration of the tariffs, the bread like do we have retaliation. I mean, again, the outlook is not good, but it's like that that is going to be so important, and that is that's such a wild card. So I'll put a direction of imp unemployment rate will be higher.

Oh goodness, you know the answer to that question is going to change so much on what the administration says the next few weeks. Right, it really can't be underscore how like the duration of the tariffs, the bread like do we have retaliation. I mean, again, the outlook is not good, but it's like that that is going to be so important, and that is that's such a wild card. So I'll put a direction of imp unemployment rate will be higher.

I don't know that we're four and a half at that point, but I think that's that's the direction we're headed unless there is a real pivot on the policy coming out of the administration.

I don't know that we're four and a half at that point, but I think that's that's the direction we're headed unless there is a real pivot on the policy coming out of the administration.

Doctor Sam, thank you so much. Claudia Sam.

Doctor Sam, thank you so much. Claudia Sam.

We are honored to have you on each and every labor David New Century Advisors, of course, definitive at Michigan and the Federal Reserve. Neil Dunda with us number of days ago. Generous of him to come back on this job's day. He's with Renaissance Macro. Neil, let's start with how you dovetail your work with Jeff de Graf on the markets over at Renaissance Macro. Is the Neil Dutta world such a mess that the graph freezes, goes to cash, takes a hyper defensive position.

We are honored to have you on each and every labor David New Century Advisors, of course, definitive at Michigan and the Federal Reserve. Neil Dunda with us number of days ago. Generous of him to come back on this job's day. He's with Renaissance Macro. Neil, let's start with how you dovetail your work with Jeff de Graf on the markets over at Renaissance Macro. Is the Neil Dutta world such a mess that the graph freezes, goes to cash, takes a hyper defensive position.

I mean, I think, you know, Jeff is always looking for opportunities and you know, trying to look under the hood to see what other people aren't seeing. And I think he continues to do that, so you know, I think it's times like this he's looking for, you know, tentative evidence of a bottom the.

I mean, I think, you know, Jeff is always looking for opportunities and you know, trying to look under the hood to see what other people aren't seeing. And I think he continues to do that, so you know, I think it's times like this he's looking for, you know, tentative evidence of a bottom the.

Job's day four point two percent. I guess a vector's in place. Claudia Sam speaks of an important four point five percent. I asked us yesterday at the game for him, Neil Dott I would have asked it of you, do you frame out a five percent unemployment rate given the festivity in the rose garden.

Job's day four point two percent. I guess a vector's in place. Claudia Sam speaks of an important four point five percent. I asked us yesterday at the game for him, Neil Dott I would have asked it of you, do you frame out a five percent unemployment rate given the festivity in the rose garden.

I don't know about five percent. But we're going up, I think, you know, I think we've been going up for a while. Obviously, given the shock to financial conditions that we've seen in recent days, that view is just amplified. But consumers have been telling us that things are getting worse for a while. So I had been largely expecting a fairly linear increase in the unemployment rate. I mean you basically have you know, ongoing layoffs. I mean they've been coming up modestly. The hiring rate has been very very sluggish, and rates of job finding are low, and so when you that combination, it you know has gotten us a fairly linear increase in the unemployment rate. The risk now, I think is a more nonlinear increase in the unemployment rate because of what's going on. That to me is the risk that we need to be concerned about. You know, hiring rates are probably be going to weaken, and you know, at the margin, I would say layoffs are getting worse because you know, I mean just tariffs, I mean it's like it's like anything else with trade. I mean, the you know, the benefits are widespread with trade, the costs are very localized, and tariffs it's the opposite. So the costs are spread out, the benefits are localized. So you know, my sense is that it's hard to argue that the shock to financial conditions won't you know, have some spill over into the into the real economy. And so you know, I think it makes sense to a pencil in a higher unemployment rate forecast.

I don't know about five percent. But we're going up, I think, you know, I think we've been going up for a while. Obviously, given the shock to financial conditions that we've seen in recent days, that view is just amplified. But consumers have been telling us that things are getting worse for a while. So I had been largely expecting a fairly linear increase in the unemployment rate. I mean you basically have you know, ongoing layoffs. I mean they've been coming up modestly. The hiring rate has been very very sluggish, and rates of job finding are low, and so when you that combination, it you know has gotten us a fairly linear increase in the unemployment rate. The risk now, I think is a more nonlinear increase in the unemployment rate because of what's going on. That to me is the risk that we need to be concerned about. You know, hiring rates are probably be going to weaken, and you know, at the margin, I would say layoffs are getting worse because you know, I mean just tariffs, I mean it's like it's like anything else with trade. I mean, the you know, the benefits are widespread with trade, the costs are very localized, and tariffs it's the opposite. So the costs are spread out, the benefits are localized. So you know, my sense is that it's hard to argue that the shock to financial conditions won't you know, have some spill over into the into the real economy. And so you know, I think it makes sense to a pencil in a higher unemployment rate forecast.

Right going forward.

Right going forward.

So Neil, I know the administration labeled their tariff day Liberation Day, but I see in your note happy obliteration a day here. So walk us through the math here. Given the numbers that we do, know, what do you kind of run through your model that could be a hit?

So Neil, I know the administration labeled their tariff day Liberation Day, but I see in your note happy obliteration a day here. So walk us through the math here. Given the numbers that we do, know, what do you kind of run through your model that could be a hit?

Do GDP as we give a wope?

Do GDP as we give a wope?

You know, well a lot of these models, I mean if you game out like I mean, wherever the effective tariff rate was before and what these new tariffs imply. I mean you're talking about an effective tech tariff rate. Basically that's like customs duties revenues as a share of our custom you know, as a share of imports. I mean you're basically talking about, you know, something close to twenty five percent based I mean by our calculations, you know, that represents you know, a little over I think a one percentage point shock to GDP. So I think that's kind of where, you know, how most of these calculations are coming about. I would argue, though, that these calculations understate conditions, you know, the hit to some extent, because you're just looking at a direct cost. You're not You're not sort of including like what is their ramification to corporate confidence, household up confidence, you know, and sort of the l over and not on effects. And I think, you know, that's why I think it could be even worse. But you know, I mean if these stay on, I mean, this is basically a recession like outcome for the US economy.

You know, well a lot of these models, I mean if you game out like I mean, wherever the effective tariff rate was before and what these new tariffs imply. I mean you're talking about an effective tech tariff rate. Basically that's like customs duties revenues as a share of our custom you know, as a share of imports. I mean you're basically talking about, you know, something close to twenty five percent based I mean by our calculations, you know, that represents you know, a little over I think a one percentage point shock to GDP. So I think that's kind of where, you know, how most of these calculations are coming about. I would argue, though, that these calculations understate conditions, you know, the hit to some extent, because you're just looking at a direct cost. You're not You're not sort of including like what is their ramification to corporate confidence, household up confidence, you know, and sort of the l over and not on effects. And I think, you know, that's why I think it could be even worse. But you know, I mean if these stay on, I mean, this is basically a recession like outcome for the US economy.

Neil dan Ives was in earlier.

Neil dan Ives was in earlier.

He suggests Big Tech will pull all guidance forward in their conference calls. How in God's name do you take an Excel spreadsheet and get the Dutta crystal ball out past the vicinity of April fifteenth?

He suggests Big Tech will pull all guidance forward in their conference calls. How in God's name do you take an Excel spreadsheet and get the Dutta crystal ball out past the vicinity of April fifteenth?

I don't, I mean, you know, to me, we're all just guessing at this point. Maybe you should have a game theorist, come on with you, Tom, that would probably be the best, the best person to interview. I mean, we sort of see these things on our international trade courses, looking at, you know, the the.

I don't, I mean, you know, to me, we're all just guessing at this point. Maybe you should have a game theorist, come on with you, Tom, that would probably be the best, the best person to interview. I mean, we sort of see these things on our international trade courses, looking at, you know, the the.

Dynamics of a trade war. Right.

Dynamics of a trade war. Right.

This is sort of like the classic prisoner's dilemma, and we're kind of going through it, right. I mean, we're seeing the part where you know, you see both sides retaliate and you're at the worst outcome, and that seems to be what we're getting. And you know, I do think it's interesting. I mean, this is sort of going a little bit beyond my wheelhouse, admittedly, but I found it interesting that the administration said it was wise for other countries not to retaliate because this would be some sort of cap And yet what do we see this morning. China retaliating and I think Europe is probably next. And if that's the case, you know, I think you have to really cross your fingers and hope that the White the White House won't also retaliate. But you know, I'm not really holding my breath best.

This is sort of like the classic prisoner's dilemma, and we're kind of going through it, right. I mean, we're seeing the part where you know, you see both sides retaliate and you're at the worst outcome, and that seems to be what we're getting. And you know, I do think it's interesting. I mean, this is sort of going a little bit beyond my wheelhouse, admittedly, but I found it interesting that the administration said it was wise for other countries not to retaliate because this would be some sort of cap And yet what do we see this morning. China retaliating and I think Europe is probably next. And if that's the case, you know, I think you have to really cross your fingers and hope that the White the White House won't also retaliate. But you know, I'm not really holding my breath best.

This is great in man Q, macroeconomics is one one of your pages. Alan Blinder, fifteenth edition, fifteenth edition, Chapter fourteenth, Paul is cross your fingers.

This is great in man Q, macroeconomics is one one of your pages. Alan Blinder, fifteenth edition, fifteenth edition, Chapter fourteenth, Paul is cross your fingers.

So, Neil, one of the things that's I guess concerning me in addition to you know, kind of the math you ran through about a what a terrafrate of twenty five percent? What that would mean for GDP. It's just the it seems like noticeable, noticeable decline in confidence, both consumer confident and corporate confidence. How do you factor that into kind of economic growth and maybe inflation expectations.

So, Neil, one of the things that's I guess concerning me in addition to you know, kind of the math you ran through about a what a terrafrate of twenty five percent? What that would mean for GDP. It's just the it seems like noticeable, noticeable decline in confidence, both consumer confident and corporate confidence. How do you factor that into kind of economic growth and maybe inflation expectations.

Well, I mean it's it's it's the it's for consumer confidence. It's the speed of the decline, right that, That to me is the big concern. I mean, consumer confidence has been quite sluggish for a while. You know.

Well, I mean it's it's it's the it's for consumer confidence. It's the speed of the decline, right that, That to me is the big concern. I mean, consumer confidence has been quite sluggish for a while. You know.

Look, I mean.

Look, I mean.

This is a this is a shock to the economy, right like, So it's basically growth will slow down and reset at a much lower level. I think, what this what what you're going to see is basically, uh, the high end consumer, which has been the core source of support for consumer spending over the last year, they are going to jack up their savings rate.

This is a this is a shock to the economy, right like, So it's basically growth will slow down and reset at a much lower level. I think, what this what what you're going to see is basically, uh, the high end consumer, which has been the core source of support for consumer spending over the last year, they are going to jack up their savings rate.

As a result of this.

As a result of this.

I mean, you're you're in a situation now where stock prices are going down, right. The elevated level of stock prices is one reason why net worth was rising relative to income last year, which is why consumer spending was so strong because people drew down their savings as a result. You have the opposite situation now, So what do you think is gonna happen with the savings rate?

I mean, you're you're in a situation now where stock prices are going down, right. The elevated level of stock prices is one reason why net worth was rising relative to income last year, which is why consumer spending was so strong because people drew down their savings as a result. You have the opposite situation now, So what do you think is gonna happen with the savings rate?

It's gonna go up As.

It's gonna go up As.

A baseline, consumer spending wasn't gonna be really much stronger than one and a half percent right now, because that's where real income growth has kind of been tracking net of transfer. So we've already seen quite sluggish income.

A baseline, consumer spending wasn't gonna be really much stronger than one and a half percent right now, because that's where real income growth has kind of been tracking net of transfer. So we've already seen quite sluggish income.

So even a.

So even a.

Stable savings rate gets you that if the savings rates going up, you're gonna have something weaker than that. So you can see already how it's very challenging to get to a anything better than really the best I can come up with is like a below potential growth environment.

Stable savings rate gets you that if the savings rates going up, you're gonna have something weaker than that. So you can see already how it's very challenging to get to a anything better than really the best I can come up with is like a below potential growth environment.

Still, so maybe this job's day wasn't what's to come in May and June and on forward. In some of the gloom again, a four point two percent unemployment rate, But Neil dudda on April ten, when the red sacks are in first place on April ten, I'm looking at as CPI report, is.

Still, so maybe this job's day wasn't what's to come in May and June and on forward. In some of the gloom again, a four point two percent unemployment rate, But Neil dudda on April ten, when the red sacks are in first place on April ten, I'm looking at as CPI report, is.

That move is lagged?

That move is lagged?

Is the unemployment rate. Are we going to see stagflation CPI here in six days?

Is the unemployment rate. Are we going to see stagflation CPI here in six days?

I mean, I think there's I mean, there may be some possibility that the inflation number surprises to the downside, in my opinion. I mean, you do have some you know, some improvement in some of these areas like eggs and so forth. I mean, you probably haven't yet seen the upward movement in car prices just yet. Write what we know about auction prices suggest that maybe car prices come in a little bit, so, you know, March might be an okay month for inflation, and normally I think that would probably give the Fed, you know, some rope to cut or think about it. But it's all about the outlook now, and you know so so the data doesn't really take on that much.

I mean, I think there's I mean, there may be some possibility that the inflation number surprises to the downside, in my opinion. I mean, you do have some you know, some improvement in some of these areas like eggs and so forth. I mean, you probably haven't yet seen the upward movement in car prices just yet. Write what we know about auction prices suggest that maybe car prices come in a little bit, so, you know, March might be an okay month for inflation, and normally I think that would probably give the Fed, you know, some rope to cut or think about it. But it's all about the outlook now, and you know so so the data doesn't really take on that much.

What are you going to write about this weekend?

What are you going to write about this weekend?

Paul Krugman just email being says, ask Donna what he's going to write about.

Paul Krugman just email being says, ask Donna what he's going to write about.

What are you going to write about this weekend?

What are you going to write about this weekend?

Neil, I'm going to write about how I think the economy was slowing, you know, going into all this trade war stuff, and that means that the administration doesn't have as much buffer as they thought they might have earlier. I mean, you know, we talk about two twenty eight on non farm perils today. I mean the revisions, I think are what's important, right, That's where you have the most confidence. Right. So the fact that the revisions were down fifty thousand tells me that they didn't get as strong of a hand as they thought they were dealt. And you know, arguably, you know, this March number was just a payback from weather right in January and February.

Neil, I'm going to write about how I think the economy was slowing, you know, going into all this trade war stuff, and that means that the administration doesn't have as much buffer as they thought they might have earlier. I mean, you know, we talk about two twenty eight on non farm perils today. I mean the revisions, I think are what's important, right, That's where you have the most confidence. Right. So the fact that the revisions were down fifty thousand tells me that they didn't get as strong of a hand as they thought they were dealt. And you know, arguably, you know, this March number was just a payback from weather right in January and February.

So the underlying trend is actually somewhat weaker.

So the underlying trend is actually somewhat weaker.

So if they if they are, even Paul's been brilliant, and as Jerry Morian Senator Mariana Kansas was just out on CNN, people are basically saying, where are the Republicans?

So if they if they are, even Paul's been brilliant, and as Jerry Morian Senator Mariana Kansas was just out on CNN, people are basically saying, where are the Republicans?

Paul? You mentioned this this morning, Neil Dadda.

Paul? You mentioned this this morning, Neil Dadda.

If this goes away, do you sense that our trust, our confidence in our American exceptionalism is damaged?

If this goes away, do you sense that our trust, our confidence in our American exceptionalism is damaged?

If what goes away?

If what goes away?

I mean yeah, if the tariffs go away.

I mean yeah, if the tariffs go away.

If Trump tariffs go away, that means that I mean that basically means that the president isn't as politically, I mean that basically it's a it's a political nightmare for him, right. I mean, if you're if you're betting on on that. I mean, I don't know, Tom. I mean, I think to me, I wrote about this quickly this morning. I think he believes he was spared an assassin's bullet to do what he's doing. So why does anybody think he's going to be backing off anytime soon?

If Trump tariffs go away, that means that I mean that basically means that the president isn't as politically, I mean that basically it's a it's a political nightmare for him, right. I mean, if you're if you're betting on on that. I mean, I don't know, Tom. I mean, I think to me, I wrote about this quickly this morning. I think he believes he was spared an assassin's bullet to do what he's doing. So why does anybody think he's going to be backing off anytime soon?

This is what he believes.

This is what he believes.

It's a part.

It's a part.

Of his political identity if he if he backs off now, that's an uncontal surrender, which makes him basically impotent politically going forward. I mean, it's too soon for that to happen in my opinion.

Of his political identity if he if he backs off now, that's an uncontal surrender, which makes him basically impotent politically going forward. I mean, it's too soon for that to happen in my opinion.

Neil, thank you so much, and as thank you President Trump for listening to surveillance this morning.

Neil, thank you so much, and as thank you President Trump for listening to surveillance this morning.

Paul and I got to take a break. Paul's going to bring her in.

Paul and I got to take a break. Paul's going to bring her in.

Jamie Patton is out of TCW and Los Angeles. Every time she speaks, I learned something, of course, maybe in this crisis will learn something.

Jamie Patton is out of TCW and Los Angeles. Every time she speaks, I learned something, of course, maybe in this crisis will learn something.

I want to learn what her when.

I want to learn what her when.

Do the Dodgers lose exactly?

Do the Dodgers lose exactly?

I want to learn what her favorite sandwich was at Hogie Haven in for instance, she spent some time there. Jamie Patten, co head of Global Rates at TCW, joins us, Jamie, what do you make of kind of what we're seeing out there in your market, the treasury.

I want to learn what her favorite sandwich was at Hogie Haven in for instance, she spent some time there. Jamie Patten, co head of Global Rates at TCW, joins us, Jamie, what do you make of kind of what we're seeing out there in your market, the treasury.

Bond market, it's been busy. I think obviously risk markets are very disappointed by all the tariffs, but treasuries are great again, so.

Bond market, it's been busy. I think obviously risk markets are very disappointed by all the tariffs, but treasuries are great again, so.

We love this move. We were much.

We love this move. We were much.

More confused by the initial reaction to a Trump presidency and tariffs and anti immigration and all of that. That's there's nothing surprising about this. Tariffs are bad for growth, they're bad for the consumer, they're bad for the economy.

More confused by the initial reaction to a Trump presidency and tariffs and anti immigration and all of that. That's there's nothing surprising about this. Tariffs are bad for growth, they're bad for the consumer, they're bad for the economy.

They're bad.

They're bad.

So this is the right market reaction. I'm a little confused why it took so long. It's like the market didn't believe what Trump was saying until not even Tuesday. Even when he said it Tuesday, it was really like Wednesday that market participants for like, oh this is serious, this is bad. But his whole campaign and all up until now, he's been telling us what he's going to do. So I think, unfortunately we need to believe him, which is great for bonds and great for TCW. You know, we've been long duration in the front end.

So this is the right market reaction. I'm a little confused why it took so long. It's like the market didn't believe what Trump was saying until not even Tuesday. Even when he said it Tuesday, it was really like Wednesday that market participants for like, oh this is serious, this is bad. But his whole campaign and all up until now, he's been telling us what he's going to do. So I think, unfortunately we need to believe him, which is great for bonds and great for TCW. You know, we've been long duration in the front end.

What should mom and pop do here? Would their fixed income take us away from geniosity? Jamie Patten and Princeton and derivatives and mathewness.

What should mom and pop do here? Would their fixed income take us away from geniosity? Jamie Patten and Princeton and derivatives and mathewness.

And all that.

And all that.

What do mom and pop do in fixed income over the weekend?

What do mom and pop do in fixed income over the weekend?

I'll tell you what I tell my parents to do, because please get Allocating into fixed income is a great idea right now, but you have to be really careful. So how we're positioned at TCW, we're long duration. We love that we're lightening up just because we don't call tops and bottoms and we dollar cost average in and out just to be prudent risk managers. But we're also still very underweak credit. So you can be long fixed income but also in an extra defensive position, but you don't want to bleed out on carry. So at the same time, you can be underweight credit, long duration and treasuries, and then we're also long. We like agency mortgages. They're basically government guaranteed. They should do well regardless of risk on risk off. Maybe you have a little bit of pain in the beginning of a risk off, but overall their money good. So we like allocations to fixed income, but you have to be careful. Don't just go all into credit to pick up a few extra basis points. This is not the environment to just pick up carry.

I'll tell you what I tell my parents to do, because please get Allocating into fixed income is a great idea right now, but you have to be really careful. So how we're positioned at TCW, we're long duration. We love that we're lightening up just because we don't call tops and bottoms and we dollar cost average in and out just to be prudent risk managers. But we're also still very underweak credit. So you can be long fixed income but also in an extra defensive position, but you don't want to bleed out on carry. So at the same time, you can be underweight credit, long duration and treasuries, and then we're also long. We like agency mortgages. They're basically government guaranteed. They should do well regardless of risk on risk off. Maybe you have a little bit of pain in the beginning of a risk off, but overall their money good. So we like allocations to fixed income, but you have to be careful. Don't just go all into credit to pick up a few extra basis points. This is not the environment to just pick up carry.

So in terms of just kind of the market here, talk to us about where you think. I'm looking at the tenure here three point nine to two percent. Where do we go here?

So in terms of just kind of the market here, talk to us about where you think. I'm looking at the tenure here three point nine to two percent. Where do we go here?

I think we still go a little bit lower. The ten yere is a good question because we still have this dynamic of nothing has been done to improve the deficit. We still have increasing term premiums and a lot of treasury issuing, so the curve could easily go a lot steeper. So if you're choosing your long duration position, we still like concentrating that more towards the belly and the front end. And what I mean better is choose and fives. But overall, this is a bad situation. The Fed's in a terrible situation. They have high inflation, but not the good inflation, not the demand driven inflation, and they need to cool economy, and then they have a terrible growth situation. They should be a neutral, They should have been a neutral a while ago. So we're watching a policy mistake happen. But they're too scared to lower rates when they see scary inflation numbers.

I think we still go a little bit lower. The ten yere is a good question because we still have this dynamic of nothing has been done to improve the deficit. We still have increasing term premiums and a lot of treasury issuing, so the curve could easily go a lot steeper. So if you're choosing your long duration position, we still like concentrating that more towards the belly and the front end. And what I mean better is choose and fives. But overall, this is a bad situation. The Fed's in a terrible situation. They have high inflation, but not the good inflation, not the demand driven inflation, and they need to cool economy, and then they have a terrible growth situation. They should be a neutral, They should have been a neutral a while ago. So we're watching a policy mistake happen. But they're too scared to lower rates when they see scary inflation numbers.

As partly, it's off your remit, but I know you're done at Michael's and Santa Monica doing this. I mean at TCW, are you modeling in an aggressive FED of three and four rate cuts this year? I mean, I know it's not your game, but con you're talking about it, Jamie, are you doing that?

As partly, it's off your remit, but I know you're done at Michael's and Santa Monica doing this. I mean at TCW, are you modeling in an aggressive FED of three and four rate cuts this year? I mean, I know it's not your game, but con you're talking about it, Jamie, are you doing that?

It is my game. I love telling people what to do, whether it's my job or not.

It is my game. I love telling people what to do, whether it's my job or not.

So I'm shocked me.

So I'm shocked me.

So we think these FED cuts it makes sense that they're priced or they're pushed out the curve, but we don't. They'll be priced out. So as the FED cuts get pushed a little bit further away, they're going to have to cut more and faster. So if they had been a little bit more conservative and kind of gotten back to neutral when we think they probably should have, which was over the past few months, then they wouldn't have had to cut as much. But they're going to wait. They're going to be too high for too long, and then it's going to be a larger than expected problem and they'll have to cut more. That's why we keep a little bit of our long even though we are lightning up.

So we think these FED cuts it makes sense that they're priced or they're pushed out the curve, but we don't. They'll be priced out. So as the FED cuts get pushed a little bit further away, they're going to have to cut more and faster. So if they had been a little bit more conservative and kind of gotten back to neutral when we think they probably should have, which was over the past few months, then they wouldn't have had to cut as much. But they're going to wait. They're going to be too high for too long, and then it's going to be a larger than expected problem and they'll have to cut more. That's why we keep a little bit of our long even though we are lightning up.

Jamie Patton, TCW, thank you so much from the West Coast early in our morning.

Jamie Patton, TCW, thank you so much from the West Coast early in our morning.

Really really appreciate that.

Really really appreciate that.

You're listening to the Bloomberg surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Otto with the Bloomberg Business Up, or watch us live on YouTube.

You're listening to the Bloomberg surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Otto with the Bloomberg Business Up, or watch us live on YouTube.

We're thrilled that Dan Ives could be with us today.

We're thrilled that Dan Ives could be with us today.

Is not on a plane, not in a hotel room somewhere, not watching Penn State in the Frozen four. He's here everyone, Dan, I'm gonna cut to the chase. You and I have been here before. Is the opportunity still there in mag seven for the brave to acquire shares this morning?

Is not on a plane, not in a hotel room somewhere, not watching Penn State in the Frozen four. He's here everyone, Dan, I'm gonna cut to the chase. You and I have been here before. Is the opportunity still there in mag seven for the brave to acquire shares this morning?

Look, I'd say yes and no. I mean, like tom My view is like twenty five years doing this, and we've told about this for decades. Here these are his opportunities. In my long term view of tech, Trump tariff is an economic armageddon if it stays in its current form. In my view, it changes the whole tech paradigm from a supply chain and from a growth perspective. And I think that right now is the scary thing for the long term. Of course, I continue to be bullish in terms of these, but look, this is a black swan event what he single handedly has done on a self inflicted way.

Look, I'd say yes and no. I mean, like tom My view is like twenty five years doing this, and we've told about this for decades. Here these are his opportunities. In my long term view of tech, Trump tariff is an economic armageddon if it stays in its current form. In my view, it changes the whole tech paradigm from a supply chain and from a growth perspective. And I think that right now is the scary thing for the long term. Of course, I continue to be bullish in terms of these, but look, this is a black swan event what he single handedly has done on a self inflicted way.

Dan, I mean, what do you hear from the folks in Silicon Valley these days, because I mean made more of a pilgrimage to support this president than Silicon Valley going against you know, decades of history. They're not getting much payback, are they?

Dan, I mean, what do you hear from the folks in Silicon Valley these days, because I mean made more of a pilgrimage to support this president than Silicon Valley going against you know, decades of history. They're not getting much payback, are they?

And I think that's to me like talking to tech executives the last four to eight hours, that's just got me more concerned because when you talk to them, if there's some sort of broader plan and instead like they're asking you what you think and they look, I come. I don't think companies are gonna I don't think Apple's gonna give guidance on it his call. I don't think a lot of these techicoms are going to give guidance because it is that uncertain, because the reality is, like god, fifty four percent increase that would destruct ten percent of demand.

And I think that's to me like talking to tech executives the last four to eight hours, that's just got me more concerned because when you talk to them, if there's some sort of broader plan and instead like they're asking you what you think and they look, I come. I don't think companies are gonna I don't think Apple's gonna give guidance on it his call. I don't think a lot of these techicoms are going to give guidance because it is that uncertain, because the reality is, like god, fifty four percent increase that would destruct ten percent of demand.

Stillantis is out there with layoffs and windsor Ontario. I think two three days ago, I got Microsoft at two hundred and twenty eight thousand employees. Are you looking where Nadella and his team? Look, these are the cards this president delld us We're laying off six percent of our people, thirteen thousand people.

Stillantis is out there with layoffs and windsor Ontario. I think two three days ago, I got Microsoft at two hundred and twenty eight thousand employees. Are you looking where Nadella and his team? Look, these are the cards this president delld us We're laying off six percent of our people, thirteen thousand people.

You have to assume and the assumption is it. It starts with this is some form of negotiation.

You have to assume and the assumption is it. It starts with this is some form of negotiation.

Okay, conversation.

Okay, conversation.

Again, if you if you take these tariff at there, the way that they're laid out in that chart that is really viewed as a comedy show, then it's an economic arm Again. If the tariff's staining, it's coming forward, and to some extent, I you're essentially including Silicon Valley based on from a from a cost and supply chain perspective. The reason layoffs won't happen is these tech companies gonna Okay, let's see the next few months. Let's ultimately see how the games played if this actually holds. And then but if we're if we have these tariffs in place by the summer, it's all bets off.

Again, if you if you take these tariff at there, the way that they're laid out in that chart that is really viewed as a comedy show, then it's an economic arm Again. If the tariff's staining, it's coming forward, and to some extent, I you're essentially including Silicon Valley based on from a from a cost and supply chain perspective. The reason layoffs won't happen is these tech companies gonna Okay, let's see the next few months. Let's ultimately see how the games played if this actually holds. And then but if we're if we have these tariffs in place by the summer, it's all bets off.

So I think about some of these tech investments, says A big ticket items, long term investments. I guess one of the concerns is, boy, if I'm just an executive in general and I'm thinking about making a multi million dollars one hundred million dollar investment in some tech hardware software, I'm going to sit back here.

So I think about some of these tech investments, says A big ticket items, long term investments. I guess one of the concerns is, boy, if I'm just an executive in general and I'm thinking about making a multi million dollars one hundred million dollar investment in some tech hardware software, I'm going to sit back here.

The stuff, the stuffhob ibo is delayed.

The stuff, the stuffhob ibo is delayed.

Yeah, I mean, just as one, I'm just gonna step back and self fulfilling profits.

Yeah, I mean, just as one, I'm just gonna step back and self fulfilling profits.

Yeah, and that and that's the word. And Tom I would say, for every month that these tariffs are in place, you take off another ten percent of demand in the year. So right now you already have ten percent in terms of what's already gonna be baked in. Ten percent number cuts across the board.

Yeah, and that and that's the word. And Tom I would say, for every month that these tariffs are in place, you take off another ten percent of demand in the year. So right now you already have ten percent in terms of what's already gonna be baked in. Ten percent number cuts across the board.

Mark from Los Angeles femails and Susstan ives about Apple. We'll do that, Mark German right now. Okay, let's double barrel it. They they're addicted to share buybacks. They cleared out with this plunge. They come out, they release a new announcement of share buybacks and they got as I mentioned to Kathy Jones, they have to come out and issue that now.

Mark from Los Angeles femails and Susstan ives about Apple. We'll do that, Mark German right now. Okay, let's double barrel it. They they're addicted to share buybacks. They cleared out with this plunge. They come out, they release a new announcement of share buybacks and they got as I mentioned to Kathy Jones, they have to come out and issue that now.

Well, I.

Well, I.

Do agree on that front that they'll they'll definitely go down that route. My thing is that it would take them three years to take ten percent of the supply chain move it to the U and now it costs sort happen. So the point is it's it's right now about the supply chain and what this is ultimately doing. But that's why for Apple, if you're a long term shareholder and a long term investor, you own it if you're a trader right now, it's a cleer to go low.

Do agree on that front that they'll they'll definitely go down that route. My thing is that it would take them three years to take ten percent of the supply chain move it to the U and now it costs sort happen. So the point is it's it's right now about the supply chain and what this is ultimately doing. But that's why for Apple, if you're a long term shareholder and a long term investor, you own it if you're a trader right now, it's a cleer to go low.

Paul and I are expert analyzing Chinese supply chain dynamics from where the Barrett michaels, So I think that's where we do it. You actually go to China. What will Tim Cook do in the tip for tap between US and China? Does he increase labor in China?

Paul and I are expert analyzing Chinese supply chain dynamics from where the Barrett michaels, So I think that's where we do it. You actually go to China. What will Tim Cook do in the tip for tap between US and China? Does he increase labor in China?

Does he pull away? Do they push Apple out?

Does he pull away? Do they push Apple out?

So first, a pushing Apple out is basically impossible. Remember Apple at peak's second biggest employer in China when it comes to iPhone demand. Look, the reality is that for Cook and ironqicly the everything they moved to Vietnam, it's actually hired tariff than China. So clearly this is where that ten percent politician Cooke, nine percent CEO maybe goes to fifty percent politics fifty percent. You know what types of ultimately exemptions do they get in terms of what they did in the US From an investment perspective. Munusian talked about that as well. Do they get some sort of breaks? And I think for Apple it just comes down that they are not. Cook is not gonna change the long term structural footprint of Apple because of these head scratching tariffs the way they were laid out, and ultimately to see how they play out.

So first, a pushing Apple out is basically impossible. Remember Apple at peak's second biggest employer in China when it comes to iPhone demand. Look, the reality is that for Cook and ironqicly the everything they moved to Vietnam, it's actually hired tariff than China. So clearly this is where that ten percent politician Cooke, nine percent CEO maybe goes to fifty percent politics fifty percent. You know what types of ultimately exemptions do they get in terms of what they did in the US From an investment perspective. Munusian talked about that as well. Do they get some sort of breaks? And I think for Apple it just comes down that they are not. Cook is not gonna change the long term structural footprint of Apple because of these head scratching tariffs the way they were laid out, and ultimately to see how they play out.

Dan Ies with Wedbush Kathy Jones.

Dan Ies with Wedbush Kathy Jones.

Earlier from Charles shap we welcome all of you on your community across the nation, particular, good morning to ninety nine and one FM and Washington heads spinning down there. So sender Grassley of Iowa really fired up yesterday over what are we gonna.

Earlier from Charles shap we welcome all of you on your community across the nation, particular, good morning to ninety nine and one FM and Washington heads spinning down there. So sender Grassley of Iowa really fired up yesterday over what are we gonna.

Do about this? What we're gonna do is bring you the conversation on this job day.

Do about this? What we're gonna do is bring you the conversation on this job day.

Claudia Samnil Dutta with this later Kate Moore in the nine o'clock hour, Paul swhen he continues with ives of webbush.

Claudia Samnil Dutta with this later Kate Moore in the nine o'clock hour, Paul swhen he continues with ives of webbush.

Dan it realistically, when you talk to the folks in Silicon Valley, what if any can production and the tech supply chain can be brought back to the US in reality.

Dan it realistically, when you talk to the folks in Silicon Valley, what if any can production and the tech supply chain can be brought back to the US in reality.

In the next two to three years basically two percent. Now I'm saying what you talk right, It would take four to five years to build a factory from a cost structure. iPhones if you built them in the US would cost thirty five hundred dollars.

In the next two to three years basically two percent. Now I'm saying what you talk right, It would take four to five years to build a factory from a cost structure. iPhones if you built them in the US would cost thirty five hundred dollars.

Okay, you know what I'm saying.

Okay, you know what I'm saying.

So the point is like every time, Like you know, investors are when I'm in DC a few weeks so that we get we need to buy them here, I'm like, well, look, the reality is is that that basically burnt, like that would basically be imploding Silicon Valley the way that it's built to the core of the last forty years.

So the point is like every time, Like you know, investors are when I'm in DC a few weeks so that we get we need to buy them here, I'm like, well, look, the reality is is that that basically burnt, like that would basically be imploding Silicon Valley the way that it's built to the core of the last forty years.

Okay, over the weekend, they're gonna ca then the market right now, future soaks down one thousand, make the Dow futures down two thousand points.

Okay, over the weekend, they're gonna ca then the market right now, future soaks down one thousand, make the Dow futures down two thousand points.

We're under forty thousand.

We're under forty thousand.

Wow on Dow futures, the vics thirty nine point one seven, the ten year yield we mentioned with Kathy comes in. Where are we My eyes are failing me on a Friday. It's Friday, right, yeah, three point eight seven, said Dan, And I swear this this is going to get.

Wow on Dow futures, the vics thirty nine point one seven, the ten year yield we mentioned with Kathy comes in. Where are we My eyes are failing me on a Friday. It's Friday, right, yeah, three point eight seven, said Dan, And I swear this this is going to get.

Fixed over the weekend.

Fixed over the weekend.

Where is the ives' greatest conviction single stock? Where are you buying an odlock for DNA eight thousand?

Where is the ives' greatest conviction single stock? Where are you buying an odlock for DNA eight thousand?

It's it's Apple and the media. I mean the two needs, Like if you have a horizon over three to six months, Apple and the media. Because the view is here is that what's being baked into these stocks is already a recession. And already ten to fifteen percent numbers cuts. So if you get any deal, those are the names right here.

It's it's Apple and the media. I mean the two needs, Like if you have a horizon over three to six months, Apple and the media. Because the view is here is that what's being baked into these stocks is already a recession. And already ten to fifteen percent numbers cuts. So if you get any deal, those are the names right here.

What's the elasticity or revenue for Apple? I mean it's been single digit. The Apple haters, the people that you know, there's people that hate Dana ives can't imagine.

What's the elasticity or revenue for Apple? I mean it's been single digit. The Apple haters, the people that you know, there's people that hate Dana ives can't imagine.

It's uncas, there's complete Twitter's wardrobe.

It's uncas, there's complete Twitter's wardrobe.

I'm a net camm, it's.

I'm a net camm, it's.

You know, I gotta get this in before we get to Penn State hockey. Okay, damn, this is critical. They don't have revenue growth. That's almost to their advantage now that they're managing for cash flow.

You know, I gotta get this in before we get to Penn State hockey. Okay, damn, this is critical. They don't have revenue growth. That's almost to their advantage now that they're managing for cash flow.

And then more and more everything you've is talked about. Now more of that cash flow, because remember that's gonna dramatically change now that valuation that that gives it a beast case in what I believe, Afloor. I mean, I think where Apple's trading here, we start to be begging in almost a massive number cut relative to where the stock's gonna open.

And then more and more everything you've is talked about. Now more of that cash flow, because remember that's gonna dramatically change now that valuation that that gives it a beast case in what I believe, Afloor. I mean, I think where Apple's trading here, we start to be begging in almost a massive number cut relative to where the stock's gonna open.

Apple done five percent, Video down four percent. I don't care, Dan, I is the only reason you're here. Penn State hockey frozen four How they get there so quickly?

Apple done five percent, Video down four percent. I don't care, Dan, I is the only reason you're here. Penn State hockey frozen four How they get there so quickly?

I mean, look, guy Gadowski and that team you know, Aiden Fink. I mean, if you look at it, I mean, Penn State hockey, if I've been one of the best stories, not just now Canadian. I mean there's a lot of Canadian but but but but you do have a lot of us as well. And I think I think they're gonna They're gonna make some noise.

I mean, look, guy Gadowski and that team you know, Aiden Fink. I mean, if you look at it, I mean, Penn State hockey, if I've been one of the best stories, not just now Canadian. I mean there's a lot of Canadian but but but but you do have a lot of us as well. And I think I think they're gonna They're gonna make some noise.

And the wrestling team won yet again.

And the wrestling team won yet again.

It's an epic.

It's an epic.

Look, it's an epic year for Penn's across the board when it comes to sports.

Look, it's an epic year for Penn's across the board when it comes to sports.

But the football, the basketball they killed win the Big Game, just Frozen four at the same disease.

But the football, the basketball they killed win the Big Game, just Frozen four at the same disease.

But it's the start of ultimately, first I think I think, I think we're gonna coming back. We know, I think we ultimately, I think we can win this Frozen four. And I think Keen when we talked, Once the tariffs get lifted, and then we're gonna be talking about Penzi twenty twenty five national champ.

But it's the start of ultimately, first I think I think, I think we're gonna coming back. We know, I think we ultimately, I think we can win this Frozen four. And I think Keen when we talked, Once the tariffs get lifted, and then we're gonna be talking about Penzi twenty twenty five national champ.

Can you imagine the elasticity if there's somehow this tariff madness is listed.

Can you imagine the elasticity if there's somehow this tariff madness is listed.

I mean, but if we've never seen.

I mean, but if we've never seen.

This, it will be I mean historical, but you know, right now continues to be a science experiment.

This, it will be I mean historical, but you know, right now continues to be a science experiment.

Did you see when the market craters.

Did you see when the market craters.

He tones down the color exactly so real quick you say this tech party. This ends at four am. It feels like the parents came in and broke up the party.

He tones down the color exactly so real quick you say this tech party. This ends at four am. It feels like the parents came in and broke up the party.

Year look, Trump basically came broke up the party. Cops came and Louise for now, the party is off because Trump broke it up.

Year look, Trump basically came broke up the party. Cops came and Louise for now, the party is off because Trump broke it up.

Dan, I thank you so much for coming in dinnis Web.

Dan, I thank you so much for coming in dinnis Web.

But this is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple Corplay and Android Otto with the Bloomberg Business Up. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, Play Bloomberg eleven thirty.

But this is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple Corplay and Android Otto with the Bloomberg Business Up. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, Play Bloomberg eleven thirty.

Many talk, some do.

Many talk, some do.

David Blanchflower changed Atlantic economics out of England decades ago with a thin book out of Mit Press called The Wage Curve. Everybody had to stop and read it. And it was about the dynamics of labor, the dynamics of our wage, our inflation adjusted wage. The thing about Blancheflower that's great is up in the sunny climbs of Hanover. He could have retired like fifteen years ago. Instead we're inflicted with Blancheflower. Bryson, which is him continuing his granular research forward on the American labor economy. Professor Blanchflower, thank you for joining us as we get out to the jobs report with Claudia sam and Neil Dada.

David Blanchflower changed Atlantic economics out of England decades ago with a thin book out of Mit Press called The Wage Curve. Everybody had to stop and read it. And it was about the dynamics of labor, the dynamics of our wage, our inflation adjusted wage. The thing about Blancheflower that's great is up in the sunny climbs of Hanover. He could have retired like fifteen years ago. Instead we're inflicted with Blancheflower. Bryson, which is him continuing his granular research forward on the American labor economy. Professor Blanchflower, thank you for joining us as we get out to the jobs report with Claudia sam and Neil Dada.

David Blanchflower, how bad is it?

David Blanchflower, how bad is it?

Well, it's pretty bad. Take my role as well as the central banker. I think that the central bankers will be sitting there with unbelievable amounts of uncertainty thinking, you know, this is catching a falling knife. It does look like chaos, and it's unclear where this is going. Certainly we're going to see some stuff in the labor market, and I suspect this will be the you.

Well, it's pretty bad. Take my role as well as the central banker. I think that the central bankers will be sitting there with unbelievable amounts of uncertainty thinking, you know, this is catching a falling knife. It does look like chaos, and it's unclear where this is going. Certainly we're going to see some stuff in the labor market, and I suspect this will be the you.

Know, the tip at the top of the cliff.

Know, the tip at the top of the cliff.

Probably, I think, you know, think about if you were a central banker. On the one hand, you're worried about inflation coming, so you think, oh, with that, I have to raise rates. You're also sitting there seeing the probability of a global recession coming and you think, well, if that's the case, I have to cut rates. So we're really sitting here sitting waiting, watching seeing how far this goes, and the and the and the stop for as you were just talking about don't look good. So I think this is chaos. I think it's there's no sense in which this makes any sense, and why you would want to impose an enormous taxing.

Probably, I think, you know, think about if you were a central banker. On the one hand, you're worried about inflation coming, so you think, oh, with that, I have to raise rates. You're also sitting there seeing the probability of a global recession coming and you think, well, if that's the case, I have to cut rates. So we're really sitting here sitting waiting, watching seeing how far this goes, and the and the and the stop for as you were just talking about don't look good. So I think this is chaos. I think it's there's no sense in which this makes any sense, and why you would want to impose an enormous taxing.

He's on the American public. I don't know.

He's on the American public. I don't know.

What's so important here, folks. And again this formula is trotting out thanks to Steve Ratner over with Joe and Mika, who had did a really nice explanation of the absolute idiocy of this formula. The one who figured out that idiocy was James Siriricki of The New Yorker magazine and now at the Atlantic.

What's so important here, folks. And again this formula is trotting out thanks to Steve Ratner over with Joe and Mika, who had did a really nice explanation of the absolute idiocy of this formula. The one who figured out that idiocy was James Siriricki of The New Yorker magazine and now at the Atlantic.

Here's what Siri Ricky says about David blanche Flower.

Here's what Siri Ricky says about David blanche Flower.

This is akin to the quote the wisdom of crowds, whereby the aggregate predictions of non experts often produce more accurate assessments.

This is akin to the quote the wisdom of crowds, whereby the aggregate predictions of non experts often produce more accurate assessments.

David blanche Flower, what.

David blanche Flower, what.

Did the plain and simple non economist Americans say right now?

Did the plain and simple non economist Americans say right now?

Well, if you so, I've spent on Claudias, I'm gonna have on in a while.

Well, if you so, I've spent on Claudias, I'm gonna have on in a while.

She's been really good at this stuff too.

She's been really good at this stuff too.

But if you try and think about predicting downturns, and for the technically minded, I look at what did the NBR business Cycle Dating Committee, CORP recession. So the question is, at the moment you're sitting at, what is the predictor?

But if you try and think about predicting downturns, and for the technically minded, I look at what did the NBR business Cycle Dating Committee, CORP recession. So the question is, at the moment you're sitting at, what is the predictor?

And we'll go with two. The best predictors actually.

And we'll go with two. The best predictors actually.

Are the essentially consumer expectations in disease.

Are the essentially consumer expectations in disease.

Are they below eighty?

Are they below eighty?

And the answer is both the Conference Board and Michigan surveys are looking.

And the answer is both the Conference Board and Michigan surveys are looking.

In horrendous space. Seven of the eighth states.

In horrendous space. Seven of the eighth states.

That they report for a forecast in recession, and if you look back to twenty this was exactly what you would see. But the second one, actually Tom that I'm really looking at, is are there success two successive months of employment declines either on the household account or on the establishment account. So we saw a positive last month on the establishment account, but we saw minus five eight eight on the household account, So are be watching that very hard? Does that come in today negative? If it does, that's a big predictor of recession. So I think the likelihood is probably that the NBR will perhaps date a starting recession in April twenty twenty five, perhaps may, but I think we'll see that now if the data comes into day anything like that, the consumer confidence dat has collapsed.

That they report for a forecast in recession, and if you look back to twenty this was exactly what you would see. But the second one, actually Tom that I'm really looking at, is are there success two successive months of employment declines either on the household account or on the establishment account. So we saw a positive last month on the establishment account, but we saw minus five eight eight on the household account, So are be watching that very hard? Does that come in today negative? If it does, that's a big predictor of recession. So I think the likelihood is probably that the NBR will perhaps date a starting recession in April twenty twenty five, perhaps may, but I think we'll see that now if the data comes into day anything like that, the consumer confidence dat has collapsed.

I mean, that's where we are I think.

I mean, that's where we are I think.

And we'll have that for you in twenty one minutes. Paul Professor.

And we'll have that for you in twenty one minutes. Paul Professor.

I know when we spoke to you last in November, we're talking about tariffs. You said, the big questions are what do other countries? What are they going to do? It appears that people aren't going to take this lying down. There's gonna be some retaliatory tariffs here of substance. What does that mean?

I know when we spoke to you last in November, we're talking about tariffs. You said, the big questions are what do other countries? What are they going to do? It appears that people aren't going to take this lying down. There's gonna be some retaliatory tariffs here of substance. What does that mean?

Right?

Right?

Well, that's yeah, that's right. Obviously we've just seen China responding. And actually I had a conversation with a guest you had on yesterday. We chatted last night, which is my colleague Doug Owin, and his view was actually that two weeks ago, his view was that everywhere would have actually responded like for like, and his view is this is also chaotic.

Well, that's yeah, that's right. Obviously we've just seen China responding. And actually I had a conversation with a guest you had on yesterday. We chatted last night, which is my colleague Doug Owin, and his view was actually that two weeks ago, his view was that everywhere would have actually responded like for like, and his view is this is also chaotic.

That maybe what you'll see.

That maybe what you'll see.

I mean, obviously China's responded, but maybe some countries will actually sit.

I mean, obviously China's responded, but maybe some countries will actually sit.

And wait and watch look rather than.

And wait and watch look rather than.

Immediately respond, perhaps because Trump will step back. Perhaps we'll see more evidence coming. So I think the answer is potentially you'll see many more places responding, but maybe for now all the sensible thing. You go back to our conversation a minute ago, abouts you know what's coming. Where are we? It might be that other place. I think the UK's example, Japan's an example. They're going to sit and take a breath and think in the sense that, Okay, if you did it, you don't have to do it this week. China's done it, and that's a really big deal. But you know, this is really huge amounts of uncertainty, and think about what the consequences of that are. Firms aren't going to invest us top building plans in the United States because of the chaos. Central banks don't know what to do because there's great uncertainty. So I think we'll see a little bit of let's sit back and wait and decide what's the most appropriate. But that's Doug Owen's view, and I think it's mine.