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You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Affo, cardplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Affo, cardplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

The real data was the June number for PCE. This is what the FED looks at, personal income up two tenths of one percent, spending up three tenths of one percent, holding up. You also had a core PCE on a month on month coming in just two tenths of one percent and two point six percent year on year.

The real data was the June number for PCE. This is what the FED looks at, personal income up two tenths of one percent, spending up three tenths of one percent, holding up. You also had a core PCE on a month on month coming in just two tenths of one percent and two point six percent year on year.

So they say this is status quo.

So they say this is status quo.

John Tucker, how goldly lockxy?

John Tucker, how goldly lockxy?

Is this I mean?

Is this I mean?

Or is it just a case of confirmation bias? Like you see what you want to see? Yeah, let's have someone who might have an opinion on that one. Lauren Saylor Baker is economists and senior consulting speaker at ITR Economics on the data. Is this data like a see what you want to see? Or is this a goldilocks for real.

Or is it just a case of confirmation bias? Like you see what you want to see? Yeah, let's have someone who might have an opinion on that one. Lauren Saylor Baker is economists and senior consulting speaker at ITR Economics on the data. Is this data like a see what you want to see? Or is this a goldilocks for real.

Result to be?

Result to be?

This is not confirmation bias, as we got the GDP numbers yesterday. The economy is still holding up, very resilient, inflation finally coming down. It was a little more persistent, a little stickier than the FED wanted to see at the start of the year. But all of the most recent months of data giving them what they need to start. Cuts in September.

This is not confirmation bias, as we got the GDP numbers yesterday. The economy is still holding up, very resilient, inflation finally coming down. It was a little more persistent, a little stickier than the FED wanted to see at the start of the year. But all of the most recent months of data giving them what they need to start. Cuts in September.

All right, cuts in September. What about July thirty? First we heard from Bill Dudley, even Mohammad al Arian Bloomberg columnists saying that they should get it done with and get it done soon.

All right, cuts in September. What about July thirty? First we heard from Bill Dudley, even Mohammad al Arian Bloomberg columnists saying that they should get it done with and get it done soon.

I think that's the wishful thinking in the room. I do not expect the FED to be moving in their meeting next week. If we could accuse the FED of one thing, it would probably not be cutting rights too soon in this cycle.

I think that's the wishful thinking in the room. I do not expect the FED to be moving in their meeting next week. If we could accuse the FED of one thing, it would probably not be cutting rights too soon in this cycle.

What do you think that the well, what are we gonna learn? Though, Like, Okay, they don't want to cut too soon. But to John Tucker's point, I get next week might be pushing a little bit. What else are we going to learn from next week until September that will really cement anything. It's just going to be the same trajectory, right.

What do you think that the well, what are we gonna learn? Though, Like, Okay, they don't want to cut too soon. But to John Tucker's point, I get next week might be pushing a little bit. What else are we going to learn from next week until September that will really cement anything. It's just going to be the same trajectory, right.

Well, that's their hope.

Well, that's their hope.

So the FED really does want The word they're using is confidence, and to them that just means more months of data, additional data points coming in, so they don't want to move too quickly. I mentioned very strong GDP numbers that came out yesterday that will very likely be revised in future releases. So they just want to see that the inflation, as I mentioned, has been more persistent, has been stick here, that it isn't starting to creep back up by the end of the summer. Again, I think it's moving in the right direction finally, But because it took so long for us to get here. We had been on a nice smooth disinflationary track and then we hit that three three and a half percent range and things went much more sideways. So the Fed just wants to be sure this isn't a blip. We've had a couple of months of good data. They want to see a couple more.

So the FED really does want The word they're using is confidence, and to them that just means more months of data, additional data points coming in, so they don't want to move too quickly. I mentioned very strong GDP numbers that came out yesterday that will very likely be revised in future releases. So they just want to see that the inflation, as I mentioned, has been more persistent, has been stick here, that it isn't starting to creep back up by the end of the summer. Again, I think it's moving in the right direction finally, But because it took so long for us to get here. We had been on a nice smooth disinflationary track and then we hit that three three and a half percent range and things went much more sideways. So the Fed just wants to be sure this isn't a blip. We've had a couple of months of good data. They want to see a couple more.

Well, there's another sign to their policy mandate. Isn't there and what's happening on that it has been there?

Well, there's another sign to their policy mandate. Isn't there and what's happening on that it has been there?

There is?

There is?

Yeah, Yes, the labor market is actually something they had wanted to see. Wage inflation cool. If we separate goods inflation out from service inflation, that good side of things is well under control. It has been for some time. Now it's the service side that's been held up by a very very tight labor market, so they're watching again. Cooling labor has really been expected. Our labor market was just on fire for the past couple of years. I expect long term we have a floor under labor market activity. We're starting to see the tide shift back in flavor of, you know, a slightly looser market at the moment. I don't think we're going to go too far that way though. It's just a demographic issue. We have baby boomers, that huge generation finally retiring. We don't have a huge glot of workers waiting on the sidelines or aging into the workforce at this point, so the numbers aren't going to materially rebalance this little bit of loosening in twenty twenty four. But I think that's a temporary trend.

Yeah, Yes, the labor market is actually something they had wanted to see. Wage inflation cool. If we separate goods inflation out from service inflation, that good side of things is well under control. It has been for some time. Now it's the service side that's been held up by a very very tight labor market, so they're watching again. Cooling labor has really been expected. Our labor market was just on fire for the past couple of years. I expect long term we have a floor under labor market activity. We're starting to see the tide shift back in flavor of, you know, a slightly looser market at the moment. I don't think we're going to go too far that way though. It's just a demographic issue. We have baby boomers, that huge generation finally retiring. We don't have a huge glot of workers waiting on the sidelines or aging into the workforce at this point, so the numbers aren't going to materially rebalance this little bit of loosening in twenty twenty four. But I think that's a temporary trend.

Well what happens, What's what happens more quickly, when labor starts to cool. Does that really really start to cool? Because it also affects personal spending as well.

Well what happens, What's what happens more quickly, when labor starts to cool. Does that really really start to cool? Because it also affects personal spending as well.

Sure, again, I don't think it really really starts to cool. Labor has been supporting that personal spending component, which again about two thirds of GDP driven by consumer spending, so that is the floor under economic activity this time around. We do see some echo effects from the pandemic still playing out in the labor market. Because things got so tight in that twenty one twenty two time frame, it drew a lot of folks into the labor market. So as we look at things like labor force participation rates for primeage workers, those are at twenty plus year highs right now. Again, we've brought more of those workers back to the workforce. The risk now is if we start to see layoffs or even if we just see more folks entering again. I don't think there are too many of them left on the sidelines, but that could pull down some of that, say unemployment rate. I don't think the fundamental drivers are there, and I think the ones that we're seeing are again a very temporary shoe focused on twenty twenty four, twenty five and beyond. Looks like that tightness will just be grinding tighter.

Sure, again, I don't think it really really starts to cool. Labor has been supporting that personal spending component, which again about two thirds of GDP driven by consumer spending, so that is the floor under economic activity this time around. We do see some echo effects from the pandemic still playing out in the labor market. Because things got so tight in that twenty one twenty two time frame, it drew a lot of folks into the labor market. So as we look at things like labor force participation rates for primeage workers, those are at twenty plus year highs right now. Again, we've brought more of those workers back to the workforce. The risk now is if we start to see layoffs or even if we just see more folks entering again. I don't think there are too many of them left on the sidelines, but that could pull down some of that, say unemployment rate. I don't think the fundamental drivers are there, and I think the ones that we're seeing are again a very temporary shoe focused on twenty twenty four, twenty five and beyond. Looks like that tightness will just be grinding tighter.

Still, going back to the inflation point for a moment, we have seen freight rates kind of start to move a lot higher. We heard from Chipotle that their costs are really starting to increase, Like they singled out the price of avocado. And I can appreciate that some of these are idiosyncratic, but is there a danger that certain type of inflation that we felt was done will start coming back.

Still, going back to the inflation point for a moment, we have seen freight rates kind of start to move a lot higher. We heard from Chipotle that their costs are really starting to increase, Like they singled out the price of avocado. And I can appreciate that some of these are idiosyncratic, but is there a danger that certain type of inflation that we felt was done will start coming back.

We will always see pockets of inflation, I mean avocado specifically. If you look at those trade routes, we get these odd kind of one off events. So weather events. There's been a drought in the Panama Canal that is keeping ships from getting through. That's really increasing the time and the cost of that journey. So I from an economic fundamental point of view, I wouldn't say that's the trend, but yes, weather events, these kind of black swan events. Obviously, geopolitics that is the big one right now. I would not want to make any predictions on that front. That's not my ex for tease. But generally, if we look at major industrial commodity prices right raw material cost most of those are still below the year ago level. They're trending much more sideways than outright rise or decline. So I hope that's a breath of relief after a few years of very strong volatility. But we'll always be able to cherry pick those examples.

We will always see pockets of inflation, I mean avocado specifically. If you look at those trade routes, we get these odd kind of one off events. So weather events. There's been a drought in the Panama Canal that is keeping ships from getting through. That's really increasing the time and the cost of that journey. So I from an economic fundamental point of view, I wouldn't say that's the trend, but yes, weather events, these kind of black swan events. Obviously, geopolitics that is the big one right now. I would not want to make any predictions on that front. That's not my ex for tease. But generally, if we look at major industrial commodity prices right raw material cost most of those are still below the year ago level. They're trending much more sideways than outright rise or decline. So I hope that's a breath of relief after a few years of very strong volatility. But we'll always be able to cherry pick those examples.

You know what, I haven't looked at a long time and just look at the yield curve, the inversion between twos and tens. It's less invertity. What yeah, what does that tell you?

You know what, I haven't looked at a long time and just look at the yield curve, the inversion between twos and tens. It's less invertity. What yeah, what does that tell you?

So the yield curve, it's a great rule of thumb that yield curb inversions tend to precede a recession. This time around, clearly that has not been the case. We've been inverted for what two years now, are going on two years now, it's.

So the yield curve, it's a great rule of thumb that yield curb inversions tend to precede a recession. This time around, clearly that has not been the case. We've been inverted for what two years now, are going on two years now, it's.

Just eighteen basis points separation.

Just eighteen basis points separation.

Well, we like to see that come under control. Looks like it might normalize sooner than later, but that was never a guarantee. We've had several historical cases, so a lot of precedent for an inverted yield curve with no following recession.

Well, we like to see that come under control. Looks like it might normalize sooner than later, but that was never a guarantee. We've had several historical cases, so a lot of precedent for an inverted yield curve with no following recession.

So I think.

So I think.

That's a funroll of thumb. It certainly gives us a great look into, you know, where the market is expecting things to trend, but not an iron cloud guarantee. And again, I think the outlier this time around, what really kept us out of that GDP recession was the labor side of things. That tight labor market supporting the consumer.

That's a funroll of thumb. It certainly gives us a great look into, you know, where the market is expecting things to trend, but not an iron cloud guarantee. And again, I think the outlier this time around, what really kept us out of that GDP recession was the labor side of things. That tight labor market supporting the consumer.

All right, Lauren, thanks a lot, We really appreciate it.

All right, Lauren, thanks a lot, We really appreciate it.

Lauren Zadelbaker is economists and senior consulting speaker at ITR Economics.

Lauren Zadelbaker is economists and senior consulting speaker at ITR Economics.

Thank you very much.

Thank you very much.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business at You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business at You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

There was another story that is starting that was reading high that was a surprise to many, and that is the se SEE suing Andrew Left of committing fraud through stock trades, social media posts, and research reports. This is SEC's biggest move yet in a year's long crackdown against traders who tout these bearish bets. Joining us now is Tom Schoenberg, a Bloomberg senior reporter.

There was another story that is starting that was reading high that was a surprise to many, and that is the se SEE suing Andrew Left of committing fraud through stock trades, social media posts, and research reports. This is SEC's biggest move yet in a year's long crackdown against traders who tout these bearish bets. Joining us now is Tom Schoenberg, a Bloomberg senior reporter.

Tom. Can you walk us through what we know about the suit?

Tom. Can you walk us through what we know about the suit?

Well, first of who is mister Left?

Well, first of who is mister Left?

Oh, sorry, who's mister Left?

Oh, sorry, who's mister Left?

Andrew Left is a famed short seller. He has a you know, website, Citron Research, and he's been making sort of bearish bets for years of kind of a real, real, sort of well known voice in stock trade.

Andrew Left is a famed short seller. He has a you know, website, Citron Research, and he's been making sort of bearish bets for years of kind of a real, real, sort of well known voice in stock trade.

So what was the problem because I mean short sellers, long long guys come on, they.

So what was the problem because I mean short sellers, long long guys come on, they.

Talk about the stocks they like.

Talk about the stocks they like.

Short sellers come on, they talk about what they don't like about the stock, and they have positions on that benefit if the stock goes down. But we know all of this, So what was the specific problem with an your Left?

Short sellers come on, they talk about what they don't like about the stock, and they have positions on that benefit if the stock goes down. But we know all of this, So what was the specific problem with an your Left?

So so what's happening here is both we've had both the SEC and the d o J. Now the criminal case alleging that Andrew Left was essentially not trading on the way he was telling the public he was going to be traded, he would essentially profit from going out either releasing a report or tweets or other social media interviews saying company stock, what should be valued at x and as everyone as as the market moved to that, he was immediately getting out and sort of making a profit on those sort of you know, short term stock movements.

So so what's happening here is both we've had both the SEC and the d o J. Now the criminal case alleging that Andrew Left was essentially not trading on the way he was telling the public he was going to be traded, he would essentially profit from going out either releasing a report or tweets or other social media interviews saying company stock, what should be valued at x and as everyone as as the market moved to that, he was immediately getting out and sort of making a profit on those sort of you know, short term stock movements.

So saying one thing and doing another, basically.

So saying one thing and doing another, basically.

That's correct, that's according to the government.

That's correct, that's according to the government.

Yet this is something that's been kind of plaguing this industry for a while, isn't it.

Yet this is something that's been kind of plaguing this industry for a while, isn't it.

Well, this is obviously you know, uh, you know, the mean stock frenzy from the about three years ago, you know, caused sort of a longer, deeper look into this, both by you know, Congress and that as we're seeing here the Justice Department in the SEC, and you know, it looks like they're looking at conduct, you know, conduct in both of these cases go as far back as twenty eighteen, and with the Justice Department saying as recent is October twenty twenty three.

Well, this is obviously you know, uh, you know, the mean stock frenzy from the about three years ago, you know, caused sort of a longer, deeper look into this, both by you know, Congress and that as we're seeing here the Justice Department in the SEC, and you know, it looks like they're looking at conduct, you know, conduct in both of these cases go as far back as twenty eighteen, and with the Justice Department saying as recent is October twenty twenty three.

So this, this conversation happens at home like every six months. My husband says, I don't understand short selling. Why do we allow it?

So this, this conversation happens at home like every six months. My husband says, I don't understand short selling. Why do we allow it?

And my response is like, oh, because it helps keep markets in our CEOs in check because they have someone being more critical the short I'm just explaining. But you know what if we look at it, like why do we allow short selling?

And my response is like, oh, because it helps keep markets in our CEOs in check because they have someone being more critical the short I'm just explaining. But you know what if we look at it, like why do we allow short selling?

Right? Well, what you see with you know, Andrew Left essentially became sort of a well known short seller in part because of a number of the reports that he released, you know, we wound up leading to actual charges against the company or you know, SEC violations and so on. So he established a you know, having a good reputation in the space. And what the government is saying here is that you know, once he had that reputation, had that audience, he sort of misused that to sort of you know, essentially fool people into moving to a certain position that he himself wasn't maintaining, even though he gave the illusion that that's where he was.

Right? Well, what you see with you know, Andrew Left essentially became sort of a well known short seller in part because of a number of the reports that he released, you know, we wound up leading to actual charges against the company or you know, SEC violations and so on. So he established a you know, having a good reputation in the space. And what the government is saying here is that you know, once he had that reputation, had that audience, he sort of misused that to sort of you know, essentially fool people into moving to a certain position that he himself wasn't maintaining, even though he gave the illusion that that's where he was.

What what are the companies involved?

What what are the companies involved?

Do?

Do?

What?

What?

Do we know? The names?

Do we know? The names?

Well, we got everything from Tesla, Roku, Navidia, there's you know about you know, I think two dozen or more in here.

Well, we got everything from Tesla, Roku, Navidia, there's you know about you know, I think two dozen or more in here.

And how much did he how much did he make as a result of this? Do we know what? The SEC?

And how much did he how much did he make as a result of this? Do we know what? The SEC?

Yeah, SEC is saying that he profited as.

Yeah, SEC is saying that he profited as.

Just twenty million dollars.

Just twenty million dollars.

Which also involved you know, one of the one of the criminal charges against Andrew is for lying to federal agents claiming that he also wasn't didn't receive a conversational hedge funds. They're saying, you see more than a million dollars from two edge funds.

Which also involved you know, one of the one of the criminal charges against Andrew is for lying to federal agents claiming that he also wasn't didn't receive a conversational hedge funds. They're saying, you see more than a million dollars from two edge funds.

Real quick? Have we heard from mister Left.

Real quick? Have we heard from mister Left.

At the moment, he has, he's not commenting. You know, if that changes, obviously we will we will report that.

At the moment, he has, he's not commenting. You know, if that changes, obviously we will we will report that.

All right, We appreciate it, Thank you very much.

All right, We appreciate it, Thank you very much.

Tom. Tom Schomberg, Bloomberg senior reporter, joining us on that game.

Tom. Tom Schomberg, Bloomberg senior reporter, joining us on that game.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Let's get back to the market. Lisa was talking about what's happening in the bond market. You're seen buying pretty much all across the curve. It's been quite a week and we've seen a steepener of the last few days.

Let's get back to the market. Lisa was talking about what's happening in the bond market. You're seen buying pretty much all across the curve. It's been quite a week and we've seen a steepener of the last few days.

That has been quite a week.

That has been quite a week.

So we want to get some great insight here with Steve Major. He's a global head of fixed income research at HSBC. I keep saying he lives in Asia. It was Hong Kong and now he's in Dubai.

So we want to get some great insight here with Steve Major. He's a global head of fixed income research at HSBC. I keep saying he lives in Asia. It was Hong Kong and now he's in Dubai.

But the point is Shanghai Bank of Commerce, right, so.

But the point is Shanghai Bank of Commerce, right, so.

Banking corporation, Okay, But the point is he's never here, so you have to be on the early, early, early show, or he has to stay up late late late for you in order to get him on TV and radio. But he's here in studio and this is very exciting. He's a prolific voice when it comes to the fixed income market.

Banking corporation, Okay, But the point is he's never here, so you have to be on the early, early, early show, or he has to stay up late late late for you in order to get him on TV and radio. But he's here in studio and this is very exciting. He's a prolific voice when it comes to the fixed income market.

Steve, thanks for being here. It's great to see you.

Steve, thanks for being here. It's great to see you.

Thank you for having me.

Thank you for having me.

So just broad Stokes, What are your calls right now on the US bond market.

So just broad Stokes, What are your calls right now on the US bond market.

Well, it's lower yields. We've tended to have a lower as you know. And it's not just for the sake of it. We're not just doing it. We're not doing it to attract attention. It's because we incorporate a more structural and secular approach to the to the forecasting. If you just do it based on the cyclicuse, you'd always have a higher yield. And that might explain why other people think yields should be five. And so to me, if yields are bearing down on four for the ten year right now, and you ask me where we're being a year or so, it's time, I would say nearer to three than five.

Well, it's lower yields. We've tended to have a lower as you know. And it's not just for the sake of it. We're not just doing it. We're not doing it to attract attention. It's because we incorporate a more structural and secular approach to the to the forecasting. If you just do it based on the cyclicuse, you'd always have a higher yield. And that might explain why other people think yields should be five. And so to me, if yields are bearing down on four for the ten year right now, and you ask me where we're being a year or so, it's time, I would say nearer to three than five.

So you're looking at the stuff that's not necessarily short termy, but the more long term.

So you're looking at the stuff that's not necessarily short termy, but the more long term.

Stand exactly structural and secular. Structural tends to be more things like regulation. Perhaps secular would be more demographic, so the impact of aging populations, things.

Stand exactly structural and secular. Structural tends to be more things like regulation. Perhaps secular would be more demographic, so the impact of aging populations, things.

That's really long term.

That's really long term.

Yeah, well yes, but then you need to because you have to have a view on the equilibrium to have a view on the tenure. Now, this is where many people switch off they'll say, well, I can't observe this our star or this equilibrium rate, so I'm not going to use it. Well, everyone who buys or sells a ten year security is implicitly taking a view on that number, because the tenure yield is not defined by today's policy rate, is defined by the path of that policy rate and where it ends up in the longer run. So if you think that the longer un equilibrium policy rate is four, for example, and then you think that the yield probably won't go down much more from here, and you would also think that the FED isn't particularly restrictive. Okay, that's an interesting point.

Yeah, well yes, but then you need to because you have to have a view on the equilibrium to have a view on the tenure. Now, this is where many people switch off they'll say, well, I can't observe this our star or this equilibrium rate, so I'm not going to use it. Well, everyone who buys or sells a ten year security is implicitly taking a view on that number, because the tenure yield is not defined by today's policy rate, is defined by the path of that policy rate and where it ends up in the longer run. So if you think that the longer un equilibrium policy rate is four, for example, and then you think that the yield probably won't go down much more from here, and you would also think that the FED isn't particularly restrictive. Okay, that's an interesting point.

Yeah, it's the FED restrictive because I can't figure out and then also when you answer that question for me, what goes into making that determination whether or not they are restrictive.

Yeah, it's the FED restrictive because I can't figure out and then also when you answer that question for me, what goes into making that determination whether or not they are restrictive.

Yeah, so you know, our assumption is that the fed's longer run equilibrium is about where the FED thinks it is, which is two and a half percent, and it's two point seven to be precise, and it's pretty much unchanged from before the pandemic. Now, I would look at this as scientifically as possible. It's difficult to be a scientist in bonds really, but the point is what has changed? And it's very easy to say the market indicates something has changed, therefore the world has changed. That's not good enough. All there is is a risk premium around the possibility that the world has changed. It is very different. So I think that the policy is restrictive because today's rate is more than double what the longer run equilibrium is.

Yeah, so you know, our assumption is that the fed's longer run equilibrium is about where the FED thinks it is, which is two and a half percent, and it's two point seven to be precise, and it's pretty much unchanged from before the pandemic. Now, I would look at this as scientifically as possible. It's difficult to be a scientist in bonds really, but the point is what has changed? And it's very easy to say the market indicates something has changed, therefore the world has changed. That's not good enough. All there is is a risk premium around the possibility that the world has changed. It is very different. So I think that the policy is restrictive because today's rate is more than double what the longer run equilibrium is.

How do you look at something like fiscal stimulus And I appreciate that you're going to say that that's cyclical, but when we're looking at something globally from the energy transition where companies, private equity, and governments are going to be spending boltloads of money in the next thirty years, Yeah, how does that fit into your model?

How do you look at something like fiscal stimulus And I appreciate that you're going to say that that's cyclical, but when we're looking at something globally from the energy transition where companies, private equity, and governments are going to be spending boltloads of money in the next thirty years, Yeah, how does that fit into your model?

Yeah, so there's a debt, there's a debt and a deficit, there's a stock and a flow effect. I think that when you're talking about deficits that are going up and therefore more bonds, you can see how that can feed into the risk premium. But then the debt stock is a drag on longer run growth because it has to be rolled over and finance, and it takes cash flow away from investment and consumption. My point is that it's just it can be a little bit too easy and somewhat lazy to say there's a lot of supply, therefore the yield has to go up because you really do need to know what's on the other side. Now, when it comes to bonds, the substitution effect, if you like, it depends on the value. What a bonds look like compared to stocks, what a bonds look like compared to money, what do government bonds look like compared to credit, etc. Etc. It strikes me that the valuation argument for bonds is looking pretty good.

Yeah, so there's a debt, there's a debt and a deficit, there's a stock and a flow effect. I think that when you're talking about deficits that are going up and therefore more bonds, you can see how that can feed into the risk premium. But then the debt stock is a drag on longer run growth because it has to be rolled over and finance, and it takes cash flow away from investment and consumption. My point is that it's just it can be a little bit too easy and somewhat lazy to say there's a lot of supply, therefore the yield has to go up because you really do need to know what's on the other side. Now, when it comes to bonds, the substitution effect, if you like, it depends on the value. What a bonds look like compared to stocks, what a bonds look like compared to money, what do government bonds look like compared to credit, etc. Etc. It strikes me that the valuation argument for bonds is looking pretty good.

All right, So what am I supposed to buy right now?

All right, So what am I supposed to buy right now?

Well, most real money investors that's different to a hedge fund or a trader, are sitting in what we call the belly in the middle majorities in credit. That way, they mitigate the negative carry because the market's implying the cuts. So your good quality You can buy indices of good quality credit and you're going to get a yield more than on the S and P five hundred forward earnings. And to me, you could have said that at any point in the last year. But ultimately it's a safe investment to be buying good quality US corporates.

Well, most real money investors that's different to a hedge fund or a trader, are sitting in what we call the belly in the middle majorities in credit. That way, they mitigate the negative carry because the market's implying the cuts. So your good quality You can buy indices of good quality credit and you're going to get a yield more than on the S and P five hundred forward earnings. And to me, you could have said that at any point in the last year. But ultimately it's a safe investment to be buying good quality US corporates.

What about in the treasury curve. Where do you think we're going to see the most action, Alex.

What about in the treasury curve. Where do you think we're going to see the most action, Alex.

You mentioned the steepener that's been playing out. Do you know that the movement in let's look at twos tens right, the two tens has moved about as much as it did in the one month after the twenty sixteen election, which says that if there is a trade around this, it just played out. It just happened. Now it's all about the probabilities around the election result, and we've just seen a huge swing in that in the last few weeks. So the idea that it was all one way traffic and there was only gonna be one winner and one outcome with one set of policies, that's no longer clear today. So if the steepener was predicated on that, then I think people will start to think again. So it's, you know, to put a steepener on at this point today, given how much it just moved, I think would be dangerous.

You mentioned the steepener that's been playing out. Do you know that the movement in let's look at twos tens right, the two tens has moved about as much as it did in the one month after the twenty sixteen election, which says that if there is a trade around this, it just played out. It just happened. Now it's all about the probabilities around the election result, and we've just seen a huge swing in that in the last few weeks. So the idea that it was all one way traffic and there was only gonna be one winner and one outcome with one set of policies, that's no longer clear today. So if the steepener was predicated on that, then I think people will start to think again. So it's, you know, to put a steepener on at this point today, given how much it just moved, I think would be dangerous.

But what if it wasn't about the election? What if it was about pricing in the cuts?

But what if it wasn't about the election? What if it was about pricing in the cuts?

And that's I think you're spot on, because in fact it's been the it's been the recent inflation prints and the calling real economy that has dominated the scenario analysis and the fiscal views and the election views, and so that's explained the steepening. That's explained why two's are pushing to the low yield for the last year. But the problem is, if you enter today, you buy a two year that is so far through the money market rate that if the Fed isn't cutting and cutting by more than is priced in on the WRP screen, you're not going to make any money. And so that's why I think that the steepener may have played out.

And that's I think you're spot on, because in fact it's been the it's been the recent inflation prints and the calling real economy that has dominated the scenario analysis and the fiscal views and the election views, and so that's explained the steepening. That's explained why two's are pushing to the low yield for the last year. But the problem is, if you enter today, you buy a two year that is so far through the money market rate that if the Fed isn't cutting and cutting by more than is priced in on the WRP screen, you're not going to make any money. And so that's why I think that the steepener may have played out.

Okay, so the obligatory question we'll finish up with this September, how and what's the path forward beyond September.

Okay, so the obligatory question we'll finish up with this September, how and what's the path forward beyond September.

The baseline is they do twenty five. The interesting thing is that the scenarios around that, whether it could be more to me to value a bond today, you need to think about not just the next couple of meetings, it's the it's through next year as well. They're in anmazing path and I think that they will deliver at least what's in the in the forwards, which makes it difficult to buy the front end, but makes you want to be a bit higher up.

The baseline is they do twenty five. The interesting thing is that the scenarios around that, whether it could be more to me to value a bond today, you need to think about not just the next couple of meetings, it's the it's through next year as well. They're in anmazing path and I think that they will deliver at least what's in the in the forwards, which makes it difficult to buy the front end, but makes you want to be a bit higher up.

On the curve.

On the curve.

Steve, It's so good to see you.

Steve, It's so good to see you.

Steven Major, Global head of Fixed Income Research at HSBC. So helpful to understand all those different dynamics. I was taking notes.

Steven Major, Global head of Fixed Income Research at HSBC. So helpful to understand all those different dynamics. I was taking notes.

Did you see me here from his underground layer?

Did you see me here from his underground layer?

It doesn't look oh, he was just somewhere else.

It doesn't look oh, he was just somewhere else.

It just means all right, come back next time. Okay, Well we'll just go with it.

It just means all right, come back next time. Okay, Well we'll just go with it.

Steve Major, the man of mystery, Thank you very much for joining us.

Steve Major, the man of mystery, Thank you very much for joining us.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Otto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Otto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

All right, two politics we go.

All right, two politics we go.

So the latest was that former President Barack Obama and Michelle Obama has a have a officially endorsed vice president now presidential candidate.

So the latest was that former President Barack Obama and Michelle Obama has a have a officially endorsed vice president now presidential candidate.

Can I say that now?

Can I say that now?

Kamala Harrish presumptive.

Kamala Harrish presumptive.

Presumptive presumptive nominee Kamala Harris. Nathan Dean Bloomberg Intelligence and your Policy analyst, joins us. Now, Nathan, the last sort of you know, lever falls into place for Kamala Harris.

Presumptive presumptive nominee Kamala Harris. Nathan Dean Bloomberg Intelligence and your Policy analyst, joins us. Now, Nathan, the last sort of you know, lever falls into place for Kamala Harris.

What can we expect over the weekend.

What can we expect over the weekend.

So I'm actually hoping that we don't expect all that much.

So I'm actually hoping that we don't expect all that much.

I mean, after two weekends you know of having really big news. But you know the next thing for us really is to try and figure out who Kamala Harris is going to pick as their vice presidential candidate. You know, the the betting markets, which you can find in the terminal at WSL election are really suggesting it's coming down to Senator Mark Kelly of Arizona and Senator Josh Shapiro out of Pennsylvania, you know, Senator Cooper and Senator Bashara out of North Carolina and Kentucky being the others. But you know, just remember that Kamala Harris has a lot of time. The Chicago election isn't until August twenty second, and that's when she actually has to pick that vice president nominee.

I mean, after two weekends you know of having really big news. But you know the next thing for us really is to try and figure out who Kamala Harris is going to pick as their vice presidential candidate. You know, the the betting markets, which you can find in the terminal at WSL election are really suggesting it's coming down to Senator Mark Kelly of Arizona and Senator Josh Shapiro out of Pennsylvania, you know, Senator Cooper and Senator Bashara out of North Carolina and Kentucky being the others. But you know, just remember that Kamala Harris has a lot of time. The Chicago election isn't until August twenty second, and that's when she actually has to pick that vice president nominee.

So you know, I'm thinking that they may take some time. I'm on this.

So you know, I'm thinking that they may take some time. I'm on this.

The news cycle is worth them right now. You know, maybe they're going to play that up again. So I'm thinking for the next week or so, it could be just more back to originally what we originally thought.

The news cycle is worth them right now. You know, maybe they're going to play that up again. So I'm thinking for the next week or so, it could be just more back to originally what we originally thought.

Just a campaign for the presidency.

Just a campaign for the presidency.

What it's a history teaches. I mean, Pennsylvania, Shapiro, what is it nineteen delegates there?

What it's a history teaches. I mean, Pennsylvania, Shapiro, what is it nineteen delegates there?

Yeah, so I don't remember the number off the top of my heads. But you know, for the Democrats, you know, the really it's this idea of the Russbelt, Pennsylvania, Michigan, in Wisconsin, you know, the other tuples.

Yeah, so I don't remember the number off the top of my heads. But you know, for the Democrats, you know, the really it's this idea of the Russbelt, Pennsylvania, Michigan, in Wisconsin, you know, the other tuples.

Let me just I just want to might I should have follow up with my actual question picking a vice presidential candidate, does that really move the needle for the person who's on the top of the ticket.

Let me just I just want to might I should have follow up with my actual question picking a vice presidential candidate, does that really move the needle for the person who's on the top of the ticket.

Does it matter?

Does it matter?

You know, yeah, you know, I think it would matter at a specific state level. So if you go with Josh Shapiro, you know, obviously I think you're gonna get a boost because he's really popular in the state of Pennsylvania. But just to remember that we're also talking about the vice presidential picks here when it comes to policy and the one debate that's between the vice president. You know, historic it's usually people don't go to the polls to vote for the vice president. They go to the polls and they go to the ballots to vote for the president. So you know, there's a lot of focus on the VP candidates, and then certainly we cover at BI in terms of how they can ultimately influence policy and so forth like that. But you know, at the end of the day, when people go to November, they're going to be voting for either President Trump or Vice President Kamala Harris.

You know, yeah, you know, I think it would matter at a specific state level. So if you go with Josh Shapiro, you know, obviously I think you're gonna get a boost because he's really popular in the state of Pennsylvania. But just to remember that we're also talking about the vice presidential picks here when it comes to policy and the one debate that's between the vice president. You know, historic it's usually people don't go to the polls to vote for the vice president. They go to the polls and they go to the ballots to vote for the president. So you know, there's a lot of focus on the VP candidates, and then certainly we cover at BI in terms of how they can ultimately influence policy and so forth like that. But you know, at the end of the day, when people go to November, they're going to be voting for either President Trump or Vice President Kamala Harris.

When do we think.

When do we think.

We're going to get real policy initiatives from Kamala Harris? I appreciate that in her first sort of campaign speech, she's not going to do that, Like her goal is to get everyone jazzed up and excited. When do you think we're going to start to hear more specifics?

We're going to get real policy initiatives from Kamala Harris? I appreciate that in her first sort of campaign speech, she's not going to do that, Like her goal is to get everyone jazzed up and excited. When do you think we're going to start to hear more specifics?

I actually don't think it's going to come all that too soon.

I actually don't think it's going to come all that too soon.

I mean, when we went back to look at some of their policy statements, we had to go all the way back to our time as attorney general as California, and I think August they're just going to focus more so on this idea of you know, the vice presidential pick, and I think you'll see a little bit more on border and a little bit more on immigration. But when it comes to like her economic policy, you know, foreign relations and so forth like that, I think we aren't going to see the specifics until we get to September, which is the debate season, and so after Labor Day, after the August recess, I think Americans will really be paying attention to the race then, and at that point, Kamala Harris is going to have to explain those policy positions. I think the next two weeks or so, they're just going to try and figure it out, just because remember that her campaign is only what four days old, five days old at this point, so I think there's still a lot of baby steps that campaign has to do, and then we'll see more and more of the policy statements, I think towards Labor Day and maybe even to September.

I mean, when we went back to look at some of their policy statements, we had to go all the way back to our time as attorney general as California, and I think August they're just going to focus more so on this idea of you know, the vice presidential pick, and I think you'll see a little bit more on border and a little bit more on immigration. But when it comes to like her economic policy, you know, foreign relations and so forth like that, I think we aren't going to see the specifics until we get to September, which is the debate season, and so after Labor Day, after the August recess, I think Americans will really be paying attention to the race then, and at that point, Kamala Harris is going to have to explain those policy positions. I think the next two weeks or so, they're just going to try and figure it out, just because remember that her campaign is only what four days old, five days old at this point, so I think there's still a lot of baby steps that campaign has to do, and then we'll see more and more of the policy statements, I think towards Labor Day and maybe even to September.

At that point, do you know how long we have to wait before we get really good polling data?

At that point, do you know how long we have to wait before we get really good polling data?

You know?

You know?

I think it's the first We've already started to see the first polls that have come out post the Biden decision, but it's early, and it's at a national level. I think some more of the state polling data that was more important to us in terms of like Pennsylvania, Arizona and so forth like that, that's being conducted this week, and so I think, you know, and please don't hold me to this, it'll probably be the tail end of next week when we start to see that do.

I think it's the first We've already started to see the first polls that have come out post the Biden decision, but it's early, and it's at a national level. I think some more of the state polling data that was more important to us in terms of like Pennsylvania, Arizona and so forth like that, that's being conducted this week, and so I think, you know, and please don't hold me to this, it'll probably be the tail end of next week when we start to see that do.

We trust polls now, John Tucker? Is that something that we do.

We trust polls now, John Tucker? Is that something that we do.

A Dewey defeated Truman, didn't he?

A Dewey defeated Truman, didn't he?

Oh, okay, it was a little bit ago though. So when it comes to the campaign, is the campaign and infrastructure for President Biden, is that infrastructure set up for Kamala Harris right now to do what she needs to do and travel a lot and do a lot of rallies and get her name out there.

Oh, okay, it was a little bit ago though. So when it comes to the campaign, is the campaign and infrastructure for President Biden, is that infrastructure set up for Kamala Harris right now to do what she needs to do and travel a lot and do a lot of rallies and get her name out there.

According to them, yes, but I would say just you know, it's also you know, you have the ground staff, but you also have the leadership staff, and I think the lead leadership staff is going to obviously change, if not in direct positions, but in terms of influence.

According to them, yes, but I would say just you know, it's also you know, you have the ground staff, but you also have the leadership staff, and I think the lead leadership staff is going to obviously change, if not in direct positions, but in terms of influence.

I mean, look, you know.

I mean, look, you know.

Vice President Harris had a campaign back in twenty twenty didn't go so well for us. She was one of the first people to drop out of the Democratic nomination process. However, you know, the Democratic Party is fairly aligned at this point, and so I think that there are other people out there who are certainly interested, if not serving in the campaign, but at least be able to whisper into that campaign.

Vice President Harris had a campaign back in twenty twenty didn't go so well for us. She was one of the first people to drop out of the Democratic nomination process. However, you know, the Democratic Party is fairly aligned at this point, and so I think that there are other people out there who are certainly interested, if not serving in the campaign, but at least be able to whisper into that campaign.

So I think what's.

So I think what's.

Happening right now is that you know, obviously they're going through this growth. They didn't really have much of a plan up until Sunday or maybe a few days beforehand.

Happening right now is that you know, obviously they're going through this growth. They didn't really have much of a plan up until Sunday or maybe a few days beforehand.

So I think they'll have another week or two.

So I think they'll have another week or two.

But then, you know, come August, early August, mid August, I think they'll be fine.

But then, you know, come August, early August, mid August, I think they'll be fine.

In terms of moving forward.

In terms of moving forward.

Is there going to be a debate? Is that a sure thing?

Is there going to be a debate? Is that a sure thing?

Well, you know, I certainly think so.

Well, you know, I certainly think so.

I mean, look, if President Trump, you know it would were to back out with one of the dates, the September tenth date, if I recall correctly, is still moving forward. And I think they've invited both candidates for a September seventeenth debate.

I mean, look, if President Trump, you know it would were to back out with one of the dates, the September tenth date, if I recall correctly, is still moving forward. And I think they've invited both candidates for a September seventeenth debate.

And look, if one of the one of the.

And look, if one of the one of the.

Candidates at this point decides to drop out, I think that's a serious, uh mistake on their part.

Candidates at this point decides to drop out, I think that's a serious, uh mistake on their part.

But you know, it's Washington politics. Anything can happen.

But you know, it's Washington politics. Anything can happen.

But I think at this point, certainly they'll entertain and I think ultimately they'll have one, if not two debates going forward.

But I think at this point, certainly they'll entertain and I think ultimately they'll have one, if not two debates going forward.

Oh boy, we're definitely watching that.

Oh boy, we're definitely watching that.

Well.

Well.

I'm worrieds just like the forum, that it's going to take.

I'm worrieds just like the forum, that it's going to take.

Yeah, all right, Nathan, we thank you. We really do hope you have a weekend for the first time in quite a while. Nathan Dean, Bloomberg Intelligence Senior policy analyst, don't scare the guy.

Yeah, all right, Nathan, we thank you. We really do hope you have a weekend for the first time in quite a while. Nathan Dean, Bloomberg Intelligence Senior policy analyst, don't scare the guy.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.

Focus on Unis is brought to you by Build America Mutual ensures of US municipal bond that finance essential American infrastructure and provides guaranteed income to improve any portfolio. Be part of Building America. Invest in BAM insured bonds.

Focus on Unis is brought to you by Build America Mutual ensures of US municipal bond that finance essential American infrastructure and provides guaranteed income to improve any portfolio. Be part of Building America. Invest in BAM insured bonds.

How'd I do?

How'd I do?

Amanda come out? You can chime in there, go bam bam.

Amanda come out? You can chime in there, go bam bam.

Oh.

Oh.

She sounded like me and I first started doing the show.

She sounded like me and I first started doing the show.

Yeah, sure, where we're going to get you just gotta really own it and like jump in there. Amanda Albright is a municipal finance reporter and she joins us from Bloomberg News.

Yeah, sure, where we're going to get you just gotta really own it and like jump in there. Amanda Albright is a municipal finance reporter and she joins us from Bloomberg News.

Okay, a man the.

Okay, a man the.

Mantle, I should say from Joe Mysek, you have some pretty big shoes to fill there, Amanda.

Mantle, I should say from Joe Mysek, you have some pretty big shoes to fill there, Amanda.

Yes, very big shoes to Bill Pressure.

Yes, very big shoes to Bill Pressure.

We support you, We miss him, and we support you.

We support you, We miss him, and we support you.

There are a couple of stories that caught my eye this week because I'm I'm very I have lack of confidence when it comes to my ability to discuss muni's, so I want to make sure that I can handle this segment.

There are a couple of stories that caught my eye this week because I'm I'm very I have lack of confidence when it comes to my ability to discuss muni's, so I want to make sure that I can handle this segment.

Goldman Sachs makes a bet.

Goldman Sachs makes a bet.

On a muni et F market one hundred and nine billion dollar meuni ETF market.

On a muni et F market one hundred and nine billion dollar meuni ETF market.

What have they done this week?

What have they done this week?

Yeah, so Goldman has joined the rush of firms that we've seen that have started offering muni bond ETF's. Goldman sax Asset Management already had immuniti ETF, but they are kind of getting deeper involved in the space with four new funds. So one of the funds appeals to folks in New York that are worried about their taxes that it's been a common theme lately. There's another fund that kind of mimics like a cash like fund, except it's tax exempt. So I'm like money market funds that are paying you know, upwards of five percent. You can kind of shield your tax is if you invest in their ultra short MUNI fund. So we've seen a bunch of companies get further involved in the ETF space just because it seems like that's kind of that and separately managed accounts are becoming a little bit more popular compared to traditional mutual funds.

Yeah, so Goldman has joined the rush of firms that we've seen that have started offering muni bond ETF's. Goldman sax Asset Management already had immuniti ETF, but they are kind of getting deeper involved in the space with four new funds. So one of the funds appeals to folks in New York that are worried about their taxes that it's been a common theme lately. There's another fund that kind of mimics like a cash like fund, except it's tax exempt. So I'm like money market funds that are paying you know, upwards of five percent. You can kind of shield your tax is if you invest in their ultra short MUNI fund. So we've seen a bunch of companies get further involved in the ETF space just because it seems like that's kind of that and separately managed accounts are becoming a little bit more popular compared to traditional mutual funds.

And these are actively managed funds, right, and you said ultra short, so that sort of sets them apart from others.

And these are actively managed funds, right, and you said ultra short, so that sort of sets them apart from others.

Yeah, And interestingly enough, it seems like actively managed is where other companies kind of see more of an opportunity to make an impact. The passive space within muny ETFs is very dominated by Vanguard and black Rock. They have two extremely large funds that are both passive passively managed, and so I think it's a little bit harder for other companies to kind of gain market share in that segment. So we're seeing most of the launches within actively managed.

Yeah, And interestingly enough, it seems like actively managed is where other companies kind of see more of an opportunity to make an impact. The passive space within muny ETFs is very dominated by Vanguard and black Rock. They have two extremely large funds that are both passive passively managed, and so I think it's a little bit harder for other companies to kind of gain market share in that segment. So we're seeing most of the launches within actively managed.

And are they popular.

And are they popular.

I was going to ask that, Oh he stole it.

I was going to ask that, Oh he stole it.

See it's a mind she held between the two of us.

See it's a mind she held between the two of us.

Actively managed.

Actively managed.

It is definitely making it's growing, but I still think it's really hard to compete with to passively managed funds that are I think when I ran the numbers, it was close to seventy billion between the two of them. So I still think passively managed, being you know, so cheap and so easy for investors to get involved in, is still like we shouldn't we shouldn't write that off. But I think a lot of the money managers are betting that active will eventually gain more adoption.

It is definitely making it's growing, but I still think it's really hard to compete with to passively managed funds that are I think when I ran the numbers, it was close to seventy billion between the two of them. So I still think passively managed, being you know, so cheap and so easy for investors to get involved in, is still like we shouldn't we shouldn't write that off. But I think a lot of the money managers are betting that active will eventually gain more adoption.

And I'm guessing that these are for people who live in high tech states.

And I'm guessing that these are for people who live in high tech states.

Right exactly.

Right exactly.

So it's just offered where like New York, California, New Jersey.

So it's just offered where like New York, California, New Jersey.

So there's a California fund and then a New York fund. So when we spoke to the folks at Goldman, you know, they just mentioned that they're still hearing concerns about perennially perannial concern about high taxes in both of those states, and that's you know, kind of been We're seeing a lot of demand for unis generally this year, and definitely taxes are part of that, especially given folks not knowing what's going to happen next year with tax rates. Taxes are front and center.

So there's a California fund and then a New York fund. So when we spoke to the folks at Goldman, you know, they just mentioned that they're still hearing concerns about perennially perannial concern about high taxes in both of those states, and that's you know, kind of been We're seeing a lot of demand for unis generally this year, and definitely taxes are part of that, especially given folks not knowing what's going to happen next year with tax rates. Taxes are front and center.

Let's move to another great story.

Let's move to another great story.

It was a big take this week you and a couple of your colleagues wrote about it, and the title is Harvard's four hundred and sixty five million dollars in tax benefits draw some new scrutiny. Can you tell us about this big take What was your takeaway and would you learn?

It was a big take this week you and a couple of your colleagues wrote about it, and the title is Harvard's four hundred and sixty five million dollars in tax benefits draw some new scrutiny. Can you tell us about this big take What was your takeaway and would you learn?

Yeah, so we have a story just kind of examining different tax benefits that Harvard has just given the very intense focus on Harvard for the past I guess year they we focused a lot on the property side because there's a very rich and kind of long standing debate over tax exempt property in college towns across the US, not just in Boston and Cambridge, but we found that within Boston and Cambridge there is kind of a growing push to have Harvard pay more in what's known as payments in lieu of taxes or pilots, and that's basically an annual payment that Harvard makes every year to account for the fact that it's property is tax exempt. Which this is a debate that could be could be had at any college town with any university pretty much because city leaders are always going to want more from their universities. But I think just the growing wealth at Harvard and you know, sky high tuition has just kind of reinvigorated this debate and it's a really interesting topic and also very relevant to many elite institutions, the debate that's taking place both in city halls but also in Congress because the Ivy League has become a major target lately.

Yeah, so we have a story just kind of examining different tax benefits that Harvard has just given the very intense focus on Harvard for the past I guess year they we focused a lot on the property side because there's a very rich and kind of long standing debate over tax exempt property in college towns across the US, not just in Boston and Cambridge, but we found that within Boston and Cambridge there is kind of a growing push to have Harvard pay more in what's known as payments in lieu of taxes or pilots, and that's basically an annual payment that Harvard makes every year to account for the fact that it's property is tax exempt. Which this is a debate that could be could be had at any college town with any university pretty much because city leaders are always going to want more from their universities. But I think just the growing wealth at Harvard and you know, sky high tuition has just kind of reinvigorated this debate and it's a really interesting topic and also very relevant to many elite institutions, the debate that's taking place both in city halls but also in Congress because the Ivy League has become a major target lately.

Okay, apolitic the intersection of politics and munichs Hey in the MEUNI space, if we can back up for what is issuance like and what are some of the more interesting issues that you see out there.

Okay, apolitic the intersection of politics and munichs Hey in the MEUNI space, if we can back up for what is issuance like and what are some of the more interesting issues that you see out there.

Yeah, issuance has been pretty surprising this year. I think it's up thirty eight percent, a record first half of the year. That was something that Joe loved covering when he was with US.

Yeah, issuance has been pretty surprising this year. I think it's up thirty eight percent, a record first half of the year. That was something that Joe loved covering when he was with US.

Oh, he retired. We sound like he's died. He's retired, retired, he's on a beach somewhere.

Oh, he retired. We sound like he's died. He's retired, retired, he's on a beach somewhere.

He's Yes, he's still rooting us on and reading our coverage. But there's just been so many for just kind of a preview for terminal readers. In a little bit, we should have a story about how a lot of these deals are getting totally gobbled up. There's like kind of you know, the food fight for for MUNI deals. Some investors are kind of frustrated by this because they can't get enough bonds that they put in order for and we're really seeing this across the board for you know, even very vanilla bond structures.

He's Yes, he's still rooting us on and reading our coverage. But there's just been so many for just kind of a preview for terminal readers. In a little bit, we should have a story about how a lot of these deals are getting totally gobbled up. There's like kind of you know, the food fight for for MUNI deals. Some investors are kind of frustrated by this because they can't get enough bonds that they put in order for and we're really seeing this across the board for you know, even very vanilla bond structures.

And then you know, it's actually surprised me.

And then you know, it's actually surprised me.

There's not been a ton of deals that I've been really like, oh, this is so interesting that they're doing this. It's just kind of a typical infrastructure that we're seeing getting funded, and not a ton of like you know, high yield issuances, but just kind of across the board general obligation bonds, triple A, double A, and but yet there's.

There's not been a ton of deals that I've been really like, oh, this is so interesting that they're doing this. It's just kind of a typical infrastructure that we're seeing getting funded, and not a ton of like you know, high yield issuances, but just kind of across the board general obligation bonds, triple A, double A, and but yet there's.

So much demand for them.

So much demand for them.

And I think part of that is people are worried that this is a rush before the election, trying to get ahead of any volatility, and people are worried that, you know, after November, these sales are going to go away, so you kind of have to get in the market now while you while you can.

And I think part of that is people are worried that this is a rush before the election, trying to get ahead of any volatility, and people are worried that, you know, after November, these sales are going to go away, so you kind of have to get in the market now while you while you can.

So this is exciting. Is anybody on shaky ground?

So this is exciting. Is anybody on shaky ground?

No, I'm so surprised that everything is just anytime. The US economy is doing well, COMMUNI issuers are they do well? States do well. I just saw Virginia. I think they had a billion more in tax revenue than anticipated for the most recent fiscal year. Like it's really surprising just how well state and local finances have been holding up. It's pretty remarkable, but that just speaks to the broader economy.

No, I'm so surprised that everything is just anytime. The US economy is doing well, COMMUNI issuers are they do well? States do well. I just saw Virginia. I think they had a billion more in tax revenue than anticipated for the most recent fiscal year. Like it's really surprising just how well state and local finances have been holding up. It's pretty remarkable, but that just speaks to the broader economy.

Yeah, I was going to say, like it is really surprising, particularly as the whole narrative of the COVID funding it is running out. They're going to have huge budgets shortfalls, and I feel like I have yet to hear that.

Yeah, I was going to say, like it is really surprising, particularly as the whole narrative of the COVID funding it is running out. They're going to have huge budgets shortfalls, and I feel like I have yet to hear that.

Yeah, we definitely haven't. Where I see stress is more higher ed private colleges. Those aren't kind of typical classic munique credits or you know, they're not funded necessarily by tax revenues. But where we're seeing stress is not necessarily states and cities. It's more like a private college that's sold muny bonds. And I was talking with a colleague today about how schools that have been relying on pandemic really funding. Those are the areas that, now that the funding is running out, schools are kind of where the stress is being seen rather than like the city, though of course there's probably exceptions out there.

Yeah, we definitely haven't. Where I see stress is more higher ed private colleges. Those aren't kind of typical classic munique credits or you know, they're not funded necessarily by tax revenues. But where we're seeing stress is not necessarily states and cities. It's more like a private college that's sold muny bonds. And I was talking with a colleague today about how schools that have been relying on pandemic really funding. Those are the areas that, now that the funding is running out, schools are kind of where the stress is being seen rather than like the city, though of course there's probably exceptions out there.

All right, Amanda, thank you so much.

All right, Amanda, thank you so much.

We really appreciate Amanda Albright Municipal Bonds report. Does Joe Myisick like really email you about your stories of course.

We really appreciate Amanda Albright Municipal Bonds report. Does Joe Myisick like really email you about your stories of course.

Oh my god.

Oh my god.

I love that he's retired, but he's not he's reading, he's listening. Yes, please tell him that we say hi, I learned la a lot.

I love that he's retired, but he's not he's reading, he's listening. Yes, please tell him that we say hi, I learned la a lot.

That was really interesting and you are so like.

That was really interesting and you are so like.

Not so scared. Every Friday, nieds, I definitely get nervous.

Not so scared. Every Friday, nieds, I definitely get nervous.

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