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My colleague Kaylee Lines, is back for a second day now, having heard briefings from authorities. Let's get the latest right now on this recovery mission. It's a rainy day in Baltimore, Kaylee, what can.
You tell us.
Rainy indeed, which is complicating the recovery efforts that are underway. That together with the wind, the choppiness of the water, the low visibility, and of course the massive amounts of debris that workers are dealing with and trying to recover the six individuals construction workers who are on the bridge when it collapsed to our presumed dead at this time. Now, as you say, we have a number of press gatherings happening here over the course of the last day and
a half. We heard earlier today from the Maryland Governor Wes Moore, who was talking about how recovery is his number one priority and when asked questions about the investigation, said, right now, it's still is simply too early to know
many things. He also, though, did point that he will be working together with officials here in the state of Maryland, as well as the Congressional delegation in Washington and federal authorities to make sure funding is secured, not just for the rebuilding of the bridge, which of course President Biden
said will be paid for federally. Yesterday, he promised that although Congress will need to sign on, but also locally, the Maryland State Legislature does have efforts underway as of today for income replacement for the thousands of individuals who will be affected by the closure of the Port of Baltimore, which of course cannot operate as normal at this time and won't be able to do so until all the debris and the Dolly, the vessel itself has actually cleared the waterway.
We don't have a sense of when they can get that boat out of the way. Dewey Kyley, I know there are twins two other ships stranded blocked essentially inside the port. I presume they can't leave until the Dolly does.
They can't leave, no one else can get in it really is frozen until all of the waterway can be declared safe for vessels to transit once again. And as for time, Joe, all officials we have spoken with us far have been very reluctant to put a firm time estimate on the reopening of the port, or, of course, the reconstruction of the bridge for that matter, which is
likely to be a much longer term project. I know you'll be speaking with Secretary Buddha Judge later on today, and I'm sure he will reiterate some of what we heard from him yesterday about how this is not going to be quick, it's not going to be easy. He also said it's not going to be inexpensive. We are talking months, if not years, in terms of reconstruction, and it could potentially be months until the Port of Baltimore is flowing and importing and exporting is happening out of
here once again. At this point, it's just really difficult to know for certain.
Do you see boats out toward the Dolly Kaylee that the NTSB managed to board the ship last night they got the equivalent of the black box from the Dolly. Are they out there now or was that kind of a one time mission.
No, they will continue to work aboard the vessel. I actually did speak with an official from the NTSB earlier this morning who said they do plan to board today.
There is a twenty four person team who will be part of this investigation, and it's not just about getting the data recorders, which of course, as you say, they have obtained one, but also about conducting interviews on those of board, really trying to get an understanding of what exactly was happening on the vessel in the moments up to it losing power, losing propulsion and ultimately colliding with
the bridge. Working with counterparts in Singapore as well, considering this was a Singapore flagged vessel and the owners and operators have to be considered here as well. So that's an investigation that likely too, is going to play out over the course of some period of time. As for what is actually happening on the water, we do know that there are sonar operations underw The Coast Guard is working actively with the Maryland State Police, The FBI is
here as well. The Army Corps of Engineers will be involved in this. Really, you are talking about a cross agency kind of cooperation that is happening at the state and federal level here Joe and all of these workers that have been working essentially since six am this morning when I got here, that is when this recovery effort officially started today.
Well, you're really bringing that to life for us, Kayleie, thank you so much for the reporting. Get yourself back to Washington safely. Kaylee Lines, who would normally be in the share next to me here on this broadcast, with a lot of really important information there. And I'll add the fact that this still being a recovery effort, divers expected back in the water today. We still have six people missing and presumed dead, which is something that we
still need to remember. Even as we talk about the logistics behind this massive project and the economic impact of this bridge collapse. We talked about the funding mechanism and whether the federal government will be able to handle this. In a conversation Kaylee had yesterday with Senator Chris van Holland, the Democrat from Maryland, have this to say.
There are some funds in what's called the Emergency Relief Fund. This is a fund within the Federal Highway Administration that is there specifically for this kind of emergency so once the state makes it submission, which I think they're going to do very shortly, some of those funds can beginning to be drawn down now for the larger, longer term costs. Yes, we're going to call upon our colleagues in Congress.
Chris van Holland speaking yesterday, his colleague in the House, Glen Ivy, joins us now. The Democrat from Maryland's fourth districts with us live on Bloomberg TV and Radio.
Congressman, it's great.
To have you your thoughts today on a funding debate that's about to begin. Can the federal government get this done.
Well?
First, I just want to extend my condolences to the families. You know, the hearts are with them, and you know the prayers continue to go out for the six who are they're still seeking to recover. With respect to the funding issues, Center, van Holland's absolutely right, and he was very aggressive and quick to get an outreach going to the Department of Transportation for the emergency funds, and we appreciate Secretary buddhaj Edge making some.
Of those available.
We'll see how much I think in the very near future, and certainly President Biden's commitment to get federal funding for the rebuilding of the bridge.
The congressional debate.
You know, we're in recess right now, so it hasn't really started back yet, but I think there's already outreach efforts going on. As you know, we've had challenges in the House, in particular with respect to just passing basic legislation, but we've been able to get some things done when necessary. The last week had just pass the build one point
trillion dollar funding bill for keeping the government open. And I'm hoping that this will be the type of tragedy that brings people together instead of pushing, you know, people into partisan corners. And I'm hoping we can get something done here relatively quickly.
Well, we keep hearing it's different than it was Congressman in two thousand and seven following the bridge collapse in Minnesota, And I think I understand what people mean by that, But do you believe it in this case or can people come together on this?
Well?
I hope so.
I mean I think, you know, there was some instances in the past where we've had politicians who've you know, made political stands on these kinds of issues. But as my mother used to say, what goes around, comes around, and I remember one or two of them having to come back hat in hand when they were you know, disasters in their states and they needed help, and President Biden stepped up to help them, even though they were Republicans in red states. So I think we can find
a way to do it. And you know, certainly there's an economic need that's beneficial to the entire country.
I mean, you're talking fifteen million dollars a day, fifteen thousand and jobs.
This is the port that had been I think a quarter of coal exports for the country had been going in and going out of this port. So I think it's important for us, you know, regionally and nationally to get this thing done well.
So Congressman, what does this mean in the interim for your state of Maryland, for your district? Even if this money was approved tonight, we are told this is not a month's but years long project you just talked about. We're the potential six week outage for coal. At least we understand the number of autos that come through the Baltimore Harbor. The port could be redistributed to a lot of places. So I know there's a long term concern
about permanent displacement. But what do you do if this is two or three years the number of jobs that are relying on this.
Yeah, I think that's the question of the hour.
I mean, I think we've got the short, medium, and long term issues that we have to address. In the short term, it's clear in the harbor, getting the packages and the containers off the ship that's stuck there so we can move that and the ships that are also stuck in the harbor can move out. I think we want to try and get shipping back up as soon as possible. I think in the interim, I think we've got to figure out, you know, what it's actually going
to take to rebuild the bridge. I don't know if it's going to be a new bridge it's next to it, or if they're going to try and repair the one that's there. I don't know if those decisions have been made yet. And I think the long term piece, you know, it took five years to build that bridge, as I understand it, and you know that's almost fifty years ago, and you know, there may have been some technological advances, but it's still going to take a long time to
get it done. So I think we have to figure out how to work around that. We've got commuters who travel in and out of there are work every day in and out of Baltimore. We've got people who truckers in particular, have been using that route. They're going to have to find new ways to move their products. And we've got just you know, people traveling up and down the Eastern Seaboard.
So all of that's going to be challenged.
I think we're gonna have to look at some sort of intermediate impact assistance to try and help especially businesses and employees.
Who are getting hammered by this in the near future.
And you know, we'll see what we can do on that front, but I think it's going to be important to see what we can do well.
I wonder if that might be included in an emergency relief package. Congressman, is there anything the Delegation can do to make permanent the business that exists now in the port of Baltimore. If these cars go to Newark or New York, or they go down south, what says they come back?
Yeah, I think that's an interesting question. We're gonna have to play it by ear a little bit. I think in the short term, you know, we might be able to provide some sort of subsidies to help these businesses deal with an immediate economic impact, but I think that a reality of this is that they're going to have to try and you know, relocate their businesses to some extent, at least for the period while the port's being restored.
Hopefully we can get that done relatively quickly, though, so there won't.
Have to be any long term changes. I think the bridge is a different question.
Businesses that rely on using that bridge for shipping and transporting. That's going to be tougher because that's going to take you, I would think at least several years to make that a reality. So but the hope is we can get the port back up and running quickly enough so businesses don't have to take any long term, you know, steps to revamp or relocate their businesses.
We're spending time with Congressman Glenn Ivy of Maryland this day after the bridge collapse. I know this is a big deal locally, Congressman. We're talking about regional and national impact here, but for a lot of folks who live in Baltimore, it was not only a landmark, not only.
A way to get to work.
It was just part of their day to day life here, supporting businesses that we have been describing. There are six people still unaccounted for. Can you talk to us about the emotional impact that this is having on Maryland?
Yeah, yeah, I think it's really been devastating. I think there's a people have really been per you know, it's cut to the heart I think on this, and you know, people who feel for the families who are grieving, people who feel for the community which relies so extensively on the economic impact that's going to be had by this because they work in or around the ports. And I think, as you mentioned, the sort of the symbolism of the bridge, just to see it down in the water like that,
I think is you know, it's heartbreaking for sure. So there's a symbolic piece of this that's going to be challenging. I think Governor Moore has done an outstanding job of being the healer in charge and taking a strong leadership role and trying to help us recover certainly economically but also psychologically and emotionally to the loss that we've sustained here.
You want to see Joe Biden pay a personal visit. I know Pete Boodagic has already been there, but would a presidential visit be in order.
You know, we'd love to have the president come, But frankly, I mean, the most important piece of this so far, everything that's happened since the bridge collapsed, was the President's commitment to make sure that we get the bridge back up and the Fed's going to take the lead and restoring it and making sure that the funding is taken care of. The Other thing you said that I liked was we're not going to wait for, you know, litigation
to sort all of this stuff out. You know, if there's restitution down the road, that's great, but we want to take the lead and getting the bridge up immediately and not have to wait for the courts to work work out who may or may not be liable. And I really appreciate at the President's position on that and
also has message to the people of the community. I thought, I really appreciated what he's done and since already, and you know, we look forward to working with him to make sure that Congress can get its piece of this done as well.
Glad you could be with us this day after the collapse.
Congressman, Thank you Glenn Ivy, Democrat from Maryland, with us on Balance of Power. As we carry on with our panel, next, Rick Davis and Jeanie Shanzano are on the way on the fastest show in politics, This is Bloomberg.
You're listening to the Bloomberg Balance of Power podcast ken just live weekdays at noon Eastern on Applecarplay and enron Oto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play Bloomberg eleven thirty.
It's a similar panel to spend some time on this Wednesday with Rick Davis and Jeanie Shanzano Bloomberg Politics contributors. With this debate underway, now, you've already got Genie Pete booda judge out on TV today making the case for federal funding. This White House knows that it probably won't go the way it did in.
Two thousand and seven.
We keep hearing about this the Bridge of Minneapolis, followed quickly by a unanimous approval of funding.
We're told it's different. Now do you believe that?
Yeah?
I mean, I hope not, but all signs are that is it is different. But I applaud the President, obviously, the Governor of Maryland who Killey was just talking about, and of course Pete Boudha Judge so for getting out there so quickly, and the President for making the case that the United States the Congress needs to move quickly to rebuild this really important bridge and waterway, which obviously is critical to shipping in our nation's capital and on the East Coast and around the world.
What's going to happen, Rick Davis, when Joe Biden drops a supplemental emergency funding request for this bridge. He's already got one hanging out there for Ukraine, Israel in Taiwan that has been very controversial on Capitol Hill. Will it feel different when it's put on paper?
Will it feel different?
Yeah, it'll feel.
Heavier and more likely to sink to the bottom of the bay, just like this bridge has. Look, I mean, there's nothing's going to pass this House of Representatives between now and election day other than potentially the Ukraine supplemental it. And that's only because the gravity of it all. With all due respect to the people of Baltimore, it's going to be a while before they even know what the costs are going to be to reconstruct this bridge, and I think, frankly, Joe Biden would be much better off
making this. A part of why he needs to be re elected is because he's got a track record on infrastructure, He's been successful in getting a trillion dollars dedicated to US infrastructure, and that he can get this job done for the people of Baltimore if he's real. And so, I can't imagine a scenario where you're going to see between now and November of this year a substantial funding package of billions of dollars go through for this specific project.
Well, that's a reality check, Jeanie. Does this bridge become a campaign issue?
Yeah? I think it is going to be a campaign issue. You know, it is Republicans who have been talking about the fact that they don't want to invest abroad, they want to make America great, they want to invest at home. Well, here's your opportunity, and Joe Biden will say that, and you know, there is a scenario in which we get a vote on this. Although I agree with Rick it
may not come to pass. But how about if the Democrats do a deal with Mike Johnson to keep his seat in return for votes on these supplementals, It would be really important to see which Republicans are going to vote against fixing this critically important bill, particular literally, given their mantra has been help the United States spend money at home. Well, here's a chance to do it.
Here's a chance to do it. But it just doesn't always come that easily. Rick, I know you are more optimistic about Ukraine, and i'd like to ask you about that. With the idea of this no interest loan that a lot of people scoffed at a couple of weeks ago when Lindsey Graham brought it forth. Donald Trump has mentioned it, but I keep hearing about it. Is there going to be legislative language at some point that reflects it.
Well, there's only one person more important than the Speaker of the House for determining what goes in this bill, and that's Donald Trump. And he's already made the view that maybe it ought to be alone. And so that's one of the reasons why you're hearing so much of it. I mean, he is the mouthpiece of the Republican Party, the Congressional Republican Party, the gubernatorial Republican Party, you name it. So you're going to hear that more and more because
Donald Trump wants that to be the talking point. That's why lindsays making a point of doing it.
He went to.
Keev recently and told them that he would support funding for them if it came in form of alone. My guess is, the folks fight in the war on the front line don't care if it's a loan or cash on hand. They don't care how they get it. They just want it because they need the equipment to be able to fight Russians. And so my guess is it'll
be part of the conversation. But that means that we're making progress by actually having a vote in the House, and all that could get ironed out in a conference with the Senate because obviously the Senate bill wouldn't have that loan provision in it.
We'll have a chance to talk more about the campaign next hour, Genie. But Joe Biden's got a lot of water to carry right now. We're talking about funding a bridge. He's trying to make the case for Ukraine. Last evening made quite a bit of news talking about abortion in North Carolina. He's got to deal with the economy, dealing with inflation at some point, do all of these messages just drown each other out.
No, I don't think so, you know, I think the President can make all of these important statements on the
campaign trail. Last night was critically important in North Carolina, the first real joint appearance between Harris and Biden in a long time on the campaign trail, even though it was a White House event technically, And it just shows you how much import they're putting into this issue of healthcare, particularly reproductive rights, which is so much on the minds of so many of us given what's happening around the country.
And of course they see North Carolina as a state where they can go on the offensive as opposed to the defense they're playing in so many of these battleground states. So North Carolina critically important, as is this issue of health care for women and people across the country and our ability as Americans to make our choices about what we do with our bodies, ourselves and with our doctors and not have the heavy hand of the state involved
in that. And of course you are seeing Donald Trump grapple with this as he thinks about potentially finally saying okay, we get fifteen or sixteen weeks on abortion, So you know, he knows that the writing is on the wall for this reproductive issue. It is not a winning campaign strategy for Republicans, as we saw in Alabama with this special election.
I look forward to talking with you both about that because it is important. Although to see the nation obsess over a state rep in Alabama is pretty remarkable and tells us a lot about where we are. What's Donald Trump's message going to be on Ukraine if not the same one we've been hearing Rick, that I can solve this in the first twenty four hours if I'm re elected.
Oh, I don't think he ever gets into any more detail, because there is no more detail than that, Right, it's just the power of his personalities somehow going to part the season and settle the conflict that's now been going on into his third year. And some would say since two thousand fourteen. It's not just it's just irrational that anybody can snap their fingers and repair that bridge. But look,
he's not going to back off of that consideration. He will be even handed because he loves Putin and so whatever is good for Putin's good for Donald Trump. And so I think we've already heard from Zelenski that he would be very nervous about any kind of deal that Donald Trump would do because it would likely leave the Russians in control of large Swasa territory in Ukraine, which the Ukraine people would find completely unacceptable.
Rick Davis and Genie Shanzeno are Signature Panel back together today.
You're listening to the Bloomberg Balance of Power podcast. Catch Just Live weekdays at noon Eastern on Appo, CarPlay and then roud Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
The number of vessels sailing through the Southern Red Sea is down still seventy percent compared with the start of December. Container shipping has dropped ninety percent. Gas tankers have also all but ceased transit. Peter, it's great to see you. I really appreciate your coming in. What an adventure you had to see all of this up close. These numbers are stark that would suggest that we haven't made a dent in this problem.
You know, the Huthis have a lot of material which the US says is supplied by Iran. They have missiles which continue to come in on these small boats across the Red Sea, across routes supplied by land, and so they're able to keep going for quite some time.
It's kind of amazing that we haven't, based on some of the reporting we've heard from the Pentagon, made a bigger difference.
We've expended quite a bit of.
Firepower going after targets, in some cases mobile targets. Preemptive strikes were told in Yemen. Have we at least slowed down the attack?
So Pentagon officials do say that they've seen the pace of the attacks slow, and they've also seen a shift in the kind of tactics that the houthis are using. So for example, early on they were flying drones high up than using them for surveillance and reconnaissance. Now they're flying drones straight at targets in the Red Sea on one way missions to disrupt and the Pentagon sees that kind of adaptation as a sign that maybe they're running low on some of the missile stocks.
They're still just as aggressive in posture, though, what are they getting at, by the way, or what's the aim is it the sinkership? Is it to get us out of the region. Obviously, that's not going to happen.
So the houthies say that their aim is to act as the voice of the people of Gaza, and they say that their attacks will stop once the war between Israel and Hamas stops. The truth is, I think though, that they have a lot to gain politically from this. If you look back to before the October seventh attacks, there were anti hoathy protests and and that the parts of the country they can control were not being especially well run, certainly not doing well economically. But these you know,
October seventh kind of gave them a cause. It gave them a chance to step up and say they were the voice of the Arab street. And that's worked out pretty well.
This is a big pr campaign.
In the end, they don't care about sinking a ship just as long as they're in the headlines.
Well if they exactly if they can get headlines by sinking shit, sure and score some points against the US two, all for the good for them.
How has our strategy evolved? If at all you were on board an aircraft carrier and so you're seeing a number of different platforms. They can shoot cruise missiles from ships, from destroyers. They can obviously launch fighter jets like you saw with air to ground attacks. Does it remain all of the above, because the criticism has been, you know, we're lobbing million dollar missiles at these very cheap drones that at some point is going to be a problem for the Navy.
Is very expensive. The price tag goes up every day. I did ask on board the ship about whether cost is ever a consideration, and they said no, They're focused on mission. Until Washington tells them to spend less money by using cheaper systems, They're going to focus on what accomplishes the mission best. And you know, US officials say that freedom of navigation, freedom of commerce is a core US interest and they're going to keep fighting to defend that even though the price tag is pretty high.
Does that battle group stay in the region until the Houthi problem is solved, until the Gaza problem is solved.
Or both.
I think it's all of the ABUVE.
The first went there because of October seventh, right.
That's right.
They I mean they they left Virginia thinking that they were going to do a bunch of Mediterranean port goals, which has not worked out the way that they the way that they hoped and they're going to need to stay there until the huthis either run out of missiles, change their mind about what they want to do, or there's peace in the Middle East. And anyone who has watched the region for a long time, those they could be waiting for a while.
Having spent a minute on an aircraft carrier, it's a remarkable experience to be in this floating city. Right We've got five thousand people living on that ship, Peter.
What was morale like?
I would say morale was pretty good. People are tired, a lot of people working twelve hour shifts day in, day out. They have a leadership team on board which is very dedicated to improving morale, stressing the mission that they're going after, stressing why it's important, why it matters. So it seems to be holding up for now, but I do think that they know it can't be held.
Up forever at this pace, and they have no sense of when they're.
Not just yet the no fail mission as you call it in your great reporting, Peter, thank you for coming to talk to us, and welcome back home, Peter Martin in a great piece that I encourage you to check out on the terminal or at Bloomberg dot Com. It's not just great reporting, but also loaded with images from Peter's visit to the US Eisenhower, which is just a remarkable thing to witness. All of this, of course, comes down again to shipping. It's not just the conflicts in Gaza,
it's the flow of shipping. It's trade, and it comes down to prices because as they continue to steer around the Red Sea, and we've got a lot of them here. As I mentioned, container shipping has dropped ninety percent. Gas tankers have ceased transit. They've got to go somewhere. It adds time and money, and it ends up being inflationary.
As we've discussed before with Molly Smith, it's just yet another problem for the Biden administration when they think about unwinding supply chains and something like this happens at a bridge collapse in Baltimore, and we can keep talking.
About this now.
I mentioned this in part because Molly Smith is in Washington typically covering the indicators and the data from New York. She's with us here in the Bloomberg DC Bureau and it's wonderful to see you.
Well, what a tree. It's a balance of power on the desk. Well, yes, here at the desk, great to see you.
We're talking about inflation with kind of a reference to every possible story, whether it's geopolitics, whether it's supply chains, whether it's supply and demand, or a FED conversation. And you've been helping with some reporting here that people are going to read about that. Disinflation is the word of the quarter. In retail. They actually so they say they've seen some goods prices come down, they're keeping their retail
prices even so. Fatter margins for retailers bad news for Joe Biden because when you go to the store, you don't see a difference.
Well, that's exactly the issue that Biden and many Democrats have been arguing really for years now, this concept called greedflationed inflation. Yes, well, they actually were arguing at more when prices were going up, that companies would then charge even more so than needed to offset those rising cost
pressures and taking advantage of inflation that way. Now it's moving in the reverse that even though prices are easing for some of these key input costs, they're still keeping the prices charged to consumers high, so keeping the margins margins elevated in that way. So economists will kind of go back and forth as to like whether this argument is valid as to whether is this a really main driver of the overall inflation we're experiencing. Probably not, But is it contributing at the margins?
Yeah? Maybe so.
Yeah, it's kind of like what we experience at the gas station, right, The prices tend to go up real quick and take a long time to come back down. The problem is, folks like you who look into the future here a little bit and study the data don't see that as a continuing trend necessarily. That's why we've got interest rates higher for longer.
Right, exactly, right.
So if you look at the disinflation that we've seen in the last almost two years, it's pretty much entirely come from goods, like you know, things that you buy, like stuff like furniture, like clothing, things that you can actually pick up and touch, like this keyboard, et cetera versus. And so it's a good side and one and energy on the other. But those two things aren't really falling as much anymore the way that they had.
Been for the last eighteen or so months.
So that's the concern now looking forward, and FED officials, including Chair Powell, have flagged this as well that they're wondering how much more room there is to run on this goods disinflation story.
Right, So, you know, you hear a lot about last mile. Do you roll your eyes at that? Is that like an easy cliche? How come the last mile is so hard?
No?
I think that's really valid, And that's what we've been talking about, really, this whole disinflationary journey, getting from you know, nine percent up in June twenty twenty two down to hopefully what will be two percent.
In the next year.
But that's it's really hard to cut it in half and then in half again. So coming down from you know that area and eight to nine percent down to four that was what was called the easy part. That was what we saw with a lot of the supply chains healing, helping out, doing a lot of the work for the FED on the energy side as well, with those prices coming down. The harder part now is the sickier parts of flat like services with all of us
still wanting to travel and go out. I was just at the Miami Open last weekend to support it, watching a tennis event.
Lots of people there spending on entertainment. Yeah, people still want to live their lives.
So what is that part?
You can't get a table at a restaurant, and at least in a place like Washington or New York, you know where the elitists experiencing. I guess the benefits of this economy that won't seem to quit. But it's not just here, Like you said, book a ticket on an airplane?
Is that still COVID savings? Is it just the fact that the job market's doing well?
I mean, I think it's a bit of both.
Granted, the COVID savings are certainly waning, you think, so, oh yeah, yeah, that's.
Certainly been a big there.
I mean, I feel like you can talk to five different economists on where where excess savings at and they'll give you ten different answers.
That's true.
We've heard some ring the bell to say, you know what we spent at all, there's none left, and then years later you hear that it's still in fact driving some behavior. But we've also seen wages go up quite a bit too, so I wonder how that plays into it. The fact is that this revenge travel thing think is real, Whether we have the money to.
Do it or not.
People are still i think, responding to that pandemic in some ways. When they have the opportunity to do something, they take it.
Yeah, a lot of these plans were you know, that we put off during COVID, were longer term things that still could be playing out now, like you know, two or three years later, you know, like booking a trip to go away for a long weekend or longer than that.
You know, people still catching.
Up on weddings that didn't happen then, on other kinds of you know, big life events, buying homes, so a lot of this is still probably playing catch up to some degree, and as well that people are moving on. I mean this whole concept of like, you know, maybe the economy we're not having a hard landing. It seems like there's really no sign of a recession. Maybe we're not having a soft landing either. It's more this concept of a no landing where the economy just reaccelerates and
moves on. And I think that's a lot of people more are conjuring around that idea.
Now reaccelerates makes me think that second half of the year be a different world for the Fed. Then if this is what we're looking at, maybe interest rate cuts are just further away than anyone believes.
Probably more that could be one idea. I mean, certainly the Fed wants you to believe that they don't want the market to get ahead of itself. But there's also a big difference between the economy reaccelerating and inflation reaccelerating. So it is possible, and this is what the Fed is hoping for, that growth can be sustained without a pickup in inflation, and a lot of that comes from the supply side being back in order to support the demand that's obviously still here.
I know there's a term for it, but Joe Biden's made a big deal about the smaller portion sizes. You know, you buy a traculation shrinkflation thank you, So I knew you would say, got it. He's made that part of his stump speech, he talked about it at the State of the Union. He had a video on social media with a bag of potato chips. Is does that get worse as retailers are pressured to follow prices lower.
I mean, I'm not a retailer, but they don't want that. Arguments market no of course not.
I mean there's also like the idea as well that you kind of to see this in housing a little bit too, that I think we've seen data that average new homes are actually being built with less square footage.
So yeah, it kind of like can go in multiple ways.
That drink inflation not gonna be a square footage with shrink, which is a whole other problem that retailers are facing. I love the jargon. I have to ask you about PCE is on Friday. Yes, that's actually a pretty big deal for the Fed.
Yes, so some of us will not have Friday off, a lot of them we will be working. Yes, we will give you all the news straw.
Yeah, but you know, hey, when it comes to big inflation report, that's kind of our series.
What are we looking at, what's the what's the expectations, you know, off the top of your head.
Yeah, I mean it's gonna be like it's going to be a reading that probably will make the Fed a little uncomfortable. But I'm they are obviously well aware of a lot of the inputs that go into PCE. We've already seen so far, so a lot of economists have really already firmed up their forecast and have a good idea of what's coming. So we've already seen a lot of the other data point to strong price pressures in
February that will probably still continue. This report is for February, which seems like ages ago now, yes, right, but I think they will probably be prepared to look through that and just you be more prepared for once to come.
You'll hear about it here of course, on Bloomberg we will actually have live special coverage PCA data eight thirty am. Wall Street Time again at eleven thirty with remarks from j Powell, So join Nathan Hager and Michael McKee here for that.
Big thanks to Molly Smith. Get home safely. It's great to see you in Washington. Thanks for listening to the Balance of Power podcast.
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