Younger Generations Rethinking Work

Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show at two pm Eastern Time on the Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Well, the earliest studies in amicron are giving cause for cautious optimism. We've certainly seen that play out in the financial market trade, the equity trade in particular. Well, vaccines may be less powerful against

the new variant. Protection can be fortified with boosters, and that's certainly something we're hearing from the company's fist in BioNTech, saying initial lab studies showed a third dose of their COVID nineteen vaccine neutralizes amicron, results that will accelerate global booster drives in the U S. I've certainly seen it as you try to sign up that it's now you've got to wait a couple of weeks to get that boostered. It's it's really step a lot of momentum. I've heard

that from colleagues. I got mine on Monday. Um, but I know, talk about a catalyst to get you know, thoughts over to shots. People are noticing it in a big way. Well back with us to talk about the latest day's headlines when it comes to the pandemic. Dr Anthony Harris work Care's Chief Innovation Officer and associated or an associate medical director of the onside clinical operations for the company. Work here. If you're not familiar, there are

a physician directed occupational health services company. Dr Harris also leads the company's COVID nineteam clinical response team. He is back with us UH from Chicago where they're based. Dr Harris, nice to have you back with Tim and myself. How are you How are things in Chicago when it comes to the pandemic. Well, thank you Carol, thank you Tim for having me back. And things are Things are okay. When I say okay, you know people aren't running around

with their hair on fire here. Um, but certainly we're seeing the effects of this amicron scare, you know, recently, and so we're seeing more masks compliance potentially, and certainly we're talking about going to shows and whatnot. We're seeing more requirements that you have to be vaccinated to get in. How much does that actually help people? Like, what is the thing that actually prompts people to get shots the

people who are sitting on the sidelines right now? Is it something like what Carol was talking about with people going to get boosters because the amicron? What's me at somebody get the first shot? Sure? Yeah, yeah. We saw early on right the early movers, kind of the third of the population roughly that had been fully vaccinated go

ahead and sign up to get their boosters. And if you look at the statistics now in the US we're looking at I'm just thirty percent though as of two weeks ago received their booth boosters, and we saw an acceleration of that just last week with the scare of armoricrons. I mean, we had one of the highest boostered days on record. I believe it was two point seven million boosters administered in one twenty four hour periods, which again

points back towards what motivates people to get boosters. Certainly fear is one of them, right, It's like a logically Unfortunately, we know fear only last roughly about two weeks as a motivating factor. So um, the other factors, I believe to a minor extent are gaining access to different venues. So we'll see how it continues to play out. I think mandates, right, we've seen put in place, uh increase booster participation, but I think we've already kind of topped

out the effectiveness of that approach at this point. Okay, I am curious since the pandemic has started, and I think we're about you know, twenty months or so in since the pandemic took hold in the US, depending on how you count it, but roughly, so, how is your thinking and strategy evolved in terms of managing pandemic up

and managing the pandemic? Dr Harris? Sure it really is, you know, going with classic um public health approaches right and by far in the way, the biggest approach is education, right, and educating the public in today's time dreft stically different than educating the public back in smallpox time. Right, Um, where And I'm just speaking anecdotally as a physician. Uh

here in the US. You know, when when I started my career a decade ago, um, you know, I would approach my patients and begin to educate, and I would have some good dialogue around what the best approaches. But certainly today it's more of hey, doc, here's what I've researched on my own, guide me towards and navigate me towards the data so that I can make my best informed decision, whereas days of antiquity was more so Hey doc,

you're the expert. I'm gonna do what you recommend. So I think that dynamically see playing out from a public health education standpoint, not a bad thing, right. We want people to be accountable for their own health and wellness. Um. But with today's information and the prevalence of misinformation, it is perhaps becoming more difficult to do. Hey, Dr Harris, help us understand what expectations should be as far as booster shots go. Uh, as we do, you know, get

to the other side. I use the term get to the other side of this pandemic. But it just seems like every few months there's a new variant that's not getting us to the other side. So wondering is there is it realistic for us to think that we're gonna have to get a booster every six months or so? Unfortunately, Uh, the estimate is yes, right, we see wane of the booster after about six months even now, right, I know anecdotally again position partners of mine that are planning to

get their fourth shop. Right, so they've been fully vacid to receive a booster, and they're already planning to get their next booster come early next year to keep their immunity level high. And the science behind that is straightforward. You have a building of immune UH, antibodies and immune cells. These are called plasma cells that remember what the virus is, what it looks like, right Uh, And those we know diminish over time both antibodies and B sales B cells

to a lesser extent um. But when we're talking about new variants, even if you have a decent level of antibodies against one type of virus, doesn't necessarily mean it's going to bind well to the new virus. I e. Amicron that has thirty mutations over thirty mutations in the binding site for our antibody. So the the basic sciences. The more antibodies you have in your system, the better off you are are going to be in terms of

varying against historic variants as well as new variants. Unfortunately, we know clearly antibody levels diminished over time. Dr Harris, twenty seconds left. How are you advising your team in terms of maybe where we will be in a year's time? Just quickly, please, I always say, plain and simple, you know, follow the finances and the pharmacy. We are very estimating to ramp up their production, both Feiser and mcdania murth uh in all through tween twenty two. So in a

year's time we're gonna still be in listica phones. All right, good to know, I guess. Dr Anthony Harris, chief Innovation Officer at work Care, on the phone from Chicago. You're listening to Bloomberg Business Week. You're listening to Bloomberg Business Week with Carol mat Sir and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. It's Bloomberg Big Take. It's among our most read on the Bloomberg Today. It's all spelled out in the upcoming new issue of Bloomberg Business Week.

Got tomorrow on newsstands at business Week Dot comment on the Bloomberg the story one of the great rethings. I think it's safe to say of this time, the great resignation. Why are workers saying but by two jobs? Tens of millions of people around the number alone just kind of blue with their jobs. Twenty four million between April and September this year. That's the US. That's US. That's crazy. That is an absolutely wild number. Hey, let's talk about

this with Joel Webber, editor at Bloomberg business Week. He's with us in the Bloomberg Interactive Broker Studio. Also joining us is the economics editor of Bloomberg Business Week, Christina Lynn Blad. Hey, Joel, Um, we're talking about this. We talked about this a lot from the U. S. Perspective, But what is so great about this story as it brings together a really really global perspective by talking about what's happening in the U S. And China and even

other places as well. Yeah, So, I think the Great Resignation here in the US. We can throw around that twenty four million number if we want. It's been a thing. But what's interesting about this is that there's like other forces and other things that aren't called the great resignation in the life flat being really uh, the embodiment of this. So it has created this sort of global thing that's

happening of people basically just opting out of work. And for those for those of us who haven't done that, it's like a great mystery about like what what're you doing here? And like how are you? Um? But yet there are massive implications for this, not only from um economics, but um also just like what a labor force starts to look like when you lose this many workers. But Christina, what's what's behind it all? What's happening? And what is if you haven't heard of life flat yet, what where

did it all come from? Life Flat in China came from a social media post in which um, this young guy I admitted that it was almost kind of embarrassed the beginning. It's like I haven't worked for a couple of years. He used to be a factory worker and and basically he said, this is like a philosophical choice

that I'm making. Um, and uh, it became it went viral and uh and and to to just get a feeling for how big it was, she Shaane Ping and other members of China's leadership responded to that language directly saying you should not lie flat. And you know, I think the thread that runs through all these countries is that people are responding to the feeling that they're working really hard, but they don't feel like they're getting ahead.

And one of the reasons is if they're living in big cities, all these other prices are going up faster than their than their wages, their salaries, right, so they feel like their incomes are actually stagnant. And I think I thought that was a really interesting thing that made it different from behind, you know, other sort of burnout moments that like we've captured in culture. I do think about what you all said to like the great implications.

We were just talking about, um a Goldman Sack story that's saying young U S workers are plotting early retirements, and I'm like, well, how the heck are they going to do it? Because probably a lot of folks are not like my dad who got pensions, right, and so those were young people in that survey. I now tend to think that we need personal finance courses in school miscalculation. I think about the economic implications, like so if people

are not going back to work, they're not having babies. Like, how like, what does this mean globally? Well, and we have there are some case studies out there, like Japan comes up in the story because there's a statory generation, right Christina, Like, there's other places that we can kind of look to how this has played out before happening. Well, I mean it definitely in Japan. It's almost like the statory generation emerged after the country was already in decline.

It was almost a response to this the the economic things that have already happened. I mean in China, what there, what leadership is concerned is that if enough people sort of change their thinking that way, because you know, in order to live that way, you really have to pare down your lifestyle, which can be found this one guy it's like four shirts for shirts, eight long sleeve. I was like, oh man, that's like four four T shirts. Yeah. I was like post working from home, you know, that's

exactly sweatpants money. But right, no, it I mean, if if it really took off worldwide, it would definitely have economic implications, you know, or as President gian to something in terms of this whole idea, we all talk about this wealth gap and if workers get to feel like they're making more money, able to live in cities more easily, get to share in the wealth, could that put an end to some of this or is it more than that? Well,

I mean I think that it could. You know, the pandemic lies on top of all of this is sort of this extra kind of anxiety that people are feeling. I think that maybe like what China is doing or what employers on their own can do, can sap some of the energy from this these movements by addressing these concerns.

But one of the issues though, is that um, young people haven't truly verbalized their demands about what they want, you know, from from It's not like they're saying to their bosses, do this for me and I will stay, you know. They're just kind of like saying no, I can't. Yeah.

I mean, I guess I have so much to This brought up so much plus the Goldman Sack story that we saw earlier today, and it just had me thinking about where we are as a society globally and how much this has to do with the pandemic versus how much it has to do with the idea that you know, maybe for the last thirty or forty years in China and the idea of worked and they don't need that anymore because China has grown so quickly, and you know,

the rise of leisure here in the United States. It's really some product of the twentieth century and the idea of the five day work week, like the idea of pulling back or we at that point in history where productivity is has gotten to a place where we can we can step back a little bit. Well, and another thing we haven't talked about here is just the role of techness of being able to maybe have a gig job where you just work a little bit when you

want to. And you know, there's a quote in the story of like I play three days and then I work one day, you know, and and that idea, you know, we just in the hit when you think about how the week is structured, you work five days, you take two days off. That was also that we could basically like make factories work suddenly when you throw in variables, like we're beginning to see and compensate people differently, incentivize

them differently. Maybe that looks like a radically new world, and that's sort of what this starts to glimp what this starts to glimpse? Right, And I think about some of the like I just remember doing a story and Pixar like years ago, and they just if people wanted to work in the morning, they wanted to work a lot, like a full day, and they maybe take some time off. Nobody cared as long as things got done. And I do wonder are we are we getting closer that we

just got about thirty sex. I think that um for creative types, especially this kind of flexible arrangements, you know may work, but you know, like you're staying business week to bed with that work. We're on the clock right now, no lying flat of business. It's a big story. We have David Rubinstein coming up of the Carlisle Group, and it's something we want to talk about with him and how he's how he's thinking about that as well. I want to know too. Yeah, right, did he get it?

I don't know, is he is? He? Like no, he's working all the time. Incredible story, incredible reporting. Christina Linblad, thank you so much, Economics editor, Bloomberg business Week. It's in the upcoming issue of the magazine. Chill Weber editor of Bloomberg Business Week. Um, no lying flat for us, not yet. You're listening to Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes.

Tim Stinovik on Bloomber Radio. So in his latest episode of the upcoming Peer to Peer Conversations on Bloomberg the Carlisle Group co founder and co chairman David Rubinstein catching up the presidency of Hilton Worldwide, Christmas said, a David, of course, the author of a series How to Lead on Leadership, The American Story, those conversations he's had with so many of his storians, and his third in that series about the arc of the U. S as a

young country as it invented and really reinvented itself. That book, The American Experiment, Dialogues on a Dream. David Rubinstein back with us on the phone in New York City. David, how are you all right? How are you doing okay? Doing okay? Um? Christmas Satti loved talking with him. You had a really deep dive of a conversation with him. Um, what stands out from you in that conversation and how

the hotel industry Hilton specifically is doing. The hotel industry suffered probably as much as any industry, perhaps with the sole exception of the cruise industry, which pretty much shut down completely. The hotel industry dramatically UH saw occupancy go down. However, occupy and see is now coming back mostly from travel and leisure, not as much from business, though business is coming back a bit. They stocks though of the travel lodging companies are done quite well. I mean right now

Hilton is an all time high. I think Marriott US near an all time high as well. So the market is anticipating future growth and the real challenge that they the hotel companies have, in Christens said, I talked about this is where do you get employees? UM, A lot of employees went away and now they got to hire them back and probably higher wages, and as a result, you're probably going to have some increases in in UH in the cost of rooms. In addition, should you provide

all the services that you were providing before? People are used to having daily towel service and daily makeup service and their beds. Do you have to do that? Do you have to get free breakfasts every morning to some of your patrons to some of these things are going to be looked at by companies like Hilton and others.

So what do you think, David about the potential permanent shifts that we see on the other side of the pandemic when we when we do get to the other side of the pandemic when it comes to travel, leisure, in hospitality. Well, I know from the business community, from my point of view, if I had to fly across the country for one hour meeting, I used to do it. Now I'm happy to do a Zoom, So I'm not traveling quite as much as I used to. I suspect

it will come back at some point. But in the in the know, pre pandemic, I would go to the Middle East or go to the Far East UH for a day or two and now come back. And now I just I'm a little more reluctant do because you can do so many things on on zoom. Obviously you can't do everything on zoom, and you have to have personal contact at some point. But I do think that business and business travel will will slower, be much more

slow to come back, much slower to come back. Hey, David, did Christ say anything about well, you know, because we talk a lot more about more automation coming in robotics. There's a lot more things we can do online with a hotel industry that we couldn't before. Does he say that they're making investments or helping you know, at some of their team members by really introducing automation that maybe sticks with us going forward, Well, sure they are doing

that right now. For example, rarely do people uh you know, need to check in anymore. You can just get your ticket online more or less work. Now they're going to use face identification to some extent to check in. So I think technology is going to dramatically change the industry. And and clearly the industry, uh you know, is a global industry. I mean, Hilton is all over the world and they have thousands of hotels and and they have in different categories. That's a big change in the last

twenty or thirty years. Used to be there was Hilton, there was Marriott. Now Hilton has about fifteen different brands. Mary has probably something similar. So you can have something for every different price point that you want. Hey, one thing we were dying to ask you, David Rubinstein, and it has to do the couple of stories that are among the most red on the Bloomberg. One has to do with Goldman talking about young U S workers are

plotting early retirements. They're, you know, thinking about getting out a lot earlier. And then we've got another one on the Bloomberg Big Tickets about the great resignation, about how we've had more than twenty four million from Aple to September here in the US alone witting their jobs. We're seeing it. There was a global phenomenon, and in some countries we've already seen it happening, even pre pandemic. What's going on? Why is everybody quitting? Why are younger folks

saying I've had it? Are we missing something? What do you make of this trend? Well, my generation basically you after college or graduate school, you went to work, and you worked until you're sixty or seventy, and maybe some cases even longer than that. Younger people are saying, well, I can work out of my home a bit, Why do I need to work in the traditional way? And secondly,

maybe I don't need to work quite as long. I can make a fair amount of money if I do well and retire at fifty five or sixty or even fifty. So the world is changing. The world always changes. I'm not surprised the pandemic has really changed the way people

look at the world. I know my own generation has looked at the world much differently because we're worried more about getting the COVID and getting UM to the point where we can survive this because of the age group, and more and more people who are older than me, even uh there are in my early seventies are saying they don't want to work anymore either because they just want to retire and and recognize that life might be easier if they just retired. Are there concerns though about productivity?

If we see this, well, productivity it generally increases because of technology. So technology tends to make productivity get much better, some countries better than others. Yeah, product productivity is always a challenge, but as a general rule of thumb, productivity does increase even when you have fewer employees. Well, what about them an economic or market rethink? David, Like I do, wonder if you're tiring early or maybe you're saying, you know what, I don't need so much in my wardrobe,

even if you've done well, like you just pair back? Um, are there implications that we need to be thinking about. Well, sure, I mean, people probably don't need to buy I used to buy a lot of business suits, probably don't need as many of them. I don't used to buy a lot of ties. Probably don't need a lot of them. Um, and people probably are going to just change their life a bit. You know. It's interesting that the Industrial revolution changed the way we live or work over about a

hundred year period of time. The Internet maybe over twenty five year period of time, the smartphone or for seven years or so, and now over just one and a half years, we're changing the way we live and work because of a pandemic that was never anticipated. And whether that's a good thing or not, it's clearly here and it's a reality. And people are much different in the way they look at work. They don't view it as an obligation so much. If they don't enjoy it, they're

not going to do it. I wonder if technological innovation, though, has kept up with the worker attitudes. We're not we're not seeing uh, we're having a hard time in the United States finding long haul truckers, but we're not seeing self driving trucks at this point on roads Um, not yet. Not yet. It's a challenge for Amazon to keep employees incredibly high turnover, but you know they're not being replaced

by robots at this point. So isn't there some concern we're trepidation about the idea that that productivity hasn't in technology hasn't caught up to worker attitudes. Well, workers are higher ambitions of what they want to do, and then the kind of jobs you might get by working in a warehouse and and fulfilling orders for Amazon may not be as intellectually challenging. Is what some people really wanted to do when they went to college or or some

kind of vocational training. Uh. Clearly things are going to have to adjust, But in the end, I think the American workforces is pretty resilient. I think we'll come back. We can't compete with the workforce in terms of costs in China or Asia, but we can, uh, I think do a pretty good job in making productivity better than it has been. Clearly, technological leaders UH usually come from

the United States. Hey, David, you know your series of books, your trilogy you know on leadership historians really looking at uh, the growth of this nation and how it's evolved and really talking with leaders as we constantly, as you say, these invention innovative cycles seem to be happening in less time here. Um, how do you see, you know, in terms of the next trends or the people that you think we really have got to keep an eye on that that really are going to be determining maybe the

future trajectory. And it can be politically as well as on a business and market front. Well, in the business world, chain is usually made, as it is in the political world, by people who are younger. Revolutions are not usually led by seven to year old people, and as a general rule of thumb, business change is usually led by demand from people who in their twenties or thirties. So how many people have now caught on with the kind of social media devices that really the young people really focused

on and really helped generate. Same with computers, and the same with other kinds of services that we now rely on. Many of these came from younger people. So I think it's a very good thing if boards of directors and companies would get younger people on them. I think it's a good idea for boards of trustees as well. Nonprofits have more and more people on them who are younger. I rarely see on the words that I serve people under the age of forty. But really that's where the

change is coming from. And probably it's not a bad idea to have younger people on these boards or in senior positions, advising boards of directors or trustees. So why do they resist? What happens? Like if you bring that up and you're on a board and you say, hey, guys, I love you all, but we need to ascue younger. We've certainly see the implication since the benefits of having

diversity on boards. But but what's the response. Well, sometimes people are always willing to nod and say yes, let's take that up, or we should think about it, and then if you're not persistent, you won't get very far. So persistence is a real hallmark of leadership, as I've

said in my book. So you've got to be persistent, and I probably should be more persistent in pushing the idea of having younger people advise boards of directors and boards of trustees or being more senior positions, because the consumers in the world, the people are changing things, are

really younger people. Hey, David let's talk markets here, because you've seen lots of market cycles throughout your career, help us understand and put into context the one that we're seeing right now with the s and just continuing to to grind higher, and you know, the COVID variants still making their way around the world, and concerns about growth.

If the markets have got anything wrong. Initially when COVID came about, it was that the markets we're going to be more resilient than they turned out than the then, than than people thought. In other words, when we went through COVID, people thought, Okay, the economy is going to collapse, and all of a sudden, the market will collapse. But if it turns out maybe because of federal intervention for sure, but because of federal support and other factors, the stock

market actually has gone up. And in the private equity world that I operate in, markets have never been better. People are making staggering sums of money compared to what they did before. So it's very difficult to predict right now. I would say that the federal government is probably going to increase interest rates next year. That should have a somewhat impact on the market of probably reducing prices a bit, and I suspect inflation won't go away, so that might

impede the market a bit. But I don't see any collapse in the near term. I don't see any kind of UH correction of any consequence. Who might have a one day to day blip because of something that happens, but a ten or fifteen percent market correction, I don't see that for an enduring period of time in the next year or so. David, what is the productive conversation? I mean, you know, I here at Bloomberg we talk a lot about the FED, We talk about inflation. You

guys were just touching on it. But I mean, what is the productive conversation to have about that right now? I think people should recognize that inflation um was artificially low. Historically, throughout most of the twentieth century, inflation was three or four percent, but for the last twenty years or so, it was the two percent or less that was abnormally low. Uh. For a number of reasons, inflation got to the double digit arrange when I was in the White House in

the President Carter. We're not likely to see that again. For a number of reasons that our economy is much more global than it used to be. We don't have a percentage of the of the workforce being unionized as before. And and the Federal Reserve is I think more sensitive to interest rates increases than they might have been many years ago. So I don't really think we're going to

have that problem again in terms of high inflation. But I do think we'll have inflation probably above two percent and maybe for a while, maybe somewhere between three and three and a half percent. That might happen for the year or so, But it's not a calamity. Yeah, No, that's a good thing to kind of remind everybody on that.

He last question, David I mentioned to three books How to Lead the American Story, The American Experiment, American Experiments, some just great conversations about our country and as it changed and evolved. Uh, if you look for infspiration, is there one particular interview that you might suggest to our audience at this point? Well, disappointing one to me was

the interview with Ken Burns. I lived through the Vietnam War, not as a combatant, but as a as a civilian, as a student, and and and he said that actually it's clear from the documentary evidence that the presidents of the United States who lived for the Vietnam War knew we could never win that war militarily. They knew it. It was just a question of the politics of it. They didn't want to admit that they were going to

withdraw and be seen as a loser. So we fought a war when shifty eight thousand Americans died and hundreds of thousands of Vietnamese died, really for a political reason and not for a military reason. All right, we're gonna leave it on that note, David, Thank you so much. As always, David Rubinstein, Happy holidays, b Well b Safe, founder and co executive chairman of the Carlisle Group and host of The David Rubinstein Show, Peer to peer Conversations.

As mentioned his latest book out, The American Experiment, Dialogues and a Dream. It's a great holiday gift. I'm just gonna put it out there. It is. It's just a great versations. Yeah. Features conversation with Metel and Albright ken Burns. He mentioned John Mitcham, Walter Isaacson. Uh, the list goes on. I'm roam, Yeah, I bet you let me drive. Oh no, no, no, no, this is not a toy. All right, please, I'll go. I want to drive. It's a good question. This is

the drive to the closed on Bluebird Radio. All right, just about ten minutes to the closing bell on Wall Street on this Wednesday. And you know what we've been talking about. It does feel like we're taking a little bit of a breather here, but a little bit of an uptick here in the last few minutes. So we are now green on the screen when it comes to the SMP down and the NASDAC, but just a little bit higher on the SMP five hundreds to call it a fractional game there as well. Let's get to it

with Lisa Erickson. She senior vice president co had at Public Markets Group at US Bank. Lisa, thanks so much for joining us on the phone from Minneapolis, Minnesota. How do you make sense of the volatility that we've seen over the last week, really since sun i'd say Black Friday, UM and the trading day that we saw there the first one the markets had a chance to digest the news about Omicron and really the rip higher that we've seen since then, the recovery. Yeah, well, first of all,

him and Carol, thanks so much for having me. But to your point, it really has been very volatile over the last week or so, and I think what you see is that we've had really a very good fundamental picture with an uptick strongly across all of our major

US equity indices. And so when you get some new news like what has happened with the development of the Omnikron variant, um markets really have to price into that uncertainty, and then as additional news flow comes, there is going to be a positive rally as people perceive that risk softening. You know, from our vantage point, it really remains to

be seen where this settles out. You know, it's probably going to take another week or two really to get more sense fully of the severity and the transmissibility of this variant. But in the meantime, it is somewhat encouraging that we've gotten some you know, early news of perhaps

a milder variant than was initially expected. All right, so help me at Justina Lee Bloomberg wrote this out in our Five Things to Watch earlier this morning, and she said, just last week everyone was worried, um Lisa about the impact of faster FED tightening on risky assets with high valuations. That make them more susceptible to rising rates. Now, concerns over the variant being a dragon the economic recovery have faded, but it's less clear whether the FED story has changed.

So it's interesting that we've eased concerns about Amkron. But are we comfortable then if the FED, you know, ends up moving faster than we all anticipated, because that was our big worry last week. Absolutely, Carol, that's a great point, and FED really is another big near term as well is longer term in blunt on what's going on with the markets, And to your point, really some of the concerns were magnified initially by the fact that chair Pal

really mentioned the possibility of a faster tapering. Um, we do think that's really a key development going forward. I think the market expectation in our base cases that that will happen next week when the FED meats. But certainly a lot of the language around that announcement is going to be key and seeing whether some of the balance of risk are both to the upside and downside on inflation are mentioned, or if it really is more of a hawkish tone repeat that, what do you think is

going to happen next week. What are you looking for? Well, our base case again is that the Fed is incented and has spoken to really continuing to move forward the tapering pace, possibly to thirty billion a month from fifteen

billion a month. But again, I think the devil's really going to be in the details and are main concern right now is again a more hawkish tone around that pronouncement, really just focusing on the upside risk UH to inflation and what that means is the possibility of too hot monetary policy, especially when we look into next year and we see that the comparisons for inflation are going to get tougher, so they could actually be pivoting into an

upswing just right when some of those numbers come down exactly and you know, we've definitely seen that with a flattening of the yield curve, you know, or some of the conversations we've had over the last week about you know, whether you know, treasury investors are warning us Lisa that hey, folks, you know, as we get into the next year, we're going to see maybe growth slow down, and there's some concerns and could the Fed be making a misstep perhaps, I hate to say, you know, could we head into

a recession. It's hard to even get your head around that at this point, but you do wonder, especially since FED policy takes a while to actually have its impact. You know, the timing of all of this is just so key. Absolutely to your point. Again, the the based comparisons for growth next year are tough too, so you know, just at the start growth is likely to come down

to some extent going into the next year. So the FED really is in a tough position because we have had some elevated inflation and it is not completely clear how long that will continue to laugh And yet on the other hand, we know there's a possibility that it could come down a little bit as well as you know, there's going to be some pressure on the growth number. So they're in a tough spot. And that's why, really what we're hoping for is that there's some more balanced

language around you know, the possibility of faster tapering. But again it remains to be seen how they come out next week. Least. The narrative has been throughout the pandemic from the FED, you know, maximizing making sure that they're maximizing the ability for people to get back to work, and I wonder what you think now is more of a focus for FED share Powell is it? Is it

price stability or maximum employment. Well, as he set out really earlier UM several months ago, in terms of what it would take to begin the reduction of all of the stimulus that's been in place, it really was around both. It was around price pressures as well as well as maximum employment. And so I think what you're seeing is

now both are more sharply coming into focus. On the employment side, we have gotten some recent strong prince even just today with some of the indicators on UM labor force. You know, again, I think those are strengthening the case that we're approaching that full employment picture. But again, since those are both key, we expect the FED to continue to look at both of those as they move forward. Hey, Lisa, so the SMP is this year you've got the nastack.

You still guys like large caps. That's where you you say investors should focus, and that includes include large cap tech. It certainly does, and we're really seeing a balanced opportunity among large cat stocks in terms of both interest in secular growth types of industries like technology as well as piplicals. And really the reason behind that is we've got, despite some of the potential risks we're talking about right now,

a pretty nice economy. If you look at the macro indicators, they're really primarily on solid footing, and so that gives with the reopening activity, both the opportunity for some of those secular growth trends to continue as well as some of the reopening companies to do well. So that's really the focus on large cap. It really gives you a nice balanced, diversified exposure across both types of sectors. All right, good to get your thoughts, Lisa. Thank you so much.

Lisa Ericson. She's senior vice president and co head of the Public Markets Group over at US Bank, on the phone from Minneapolis. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on you you to search Bloomberg Global News m