Zelenskiy Makes Historic Visit to Washington

or Bloomberg dot com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or stream us live on YouTube and Bloomberg dot Com. Alright, let's get back to the news of the day. We're going to talk about again Presidents Vladimir's Lensky's visit to the White House. We're going to do that now with Angela Stent. She is senior fellow at the Brookings Institute. Joining us now and Angela, it's great to have you

with us. As we've walked through a few different times, this is President Zelinski's first trip outside of Ukraine in three hundred days since the invasion. Walk us through, I guess sort of the signal they put it into context how important this trip is. Well, this is indeed a historic trip. He hasn't left the country. He didn't go to the G twenty. He's gone to know how he's done everything by zoom. But I think he realizes it is very important to come to the United States. This

is a crucial period in this ongoing war. The Russians aren't doing well on the battlefield that Ukrainians are doing much better, but they're also being pummeled every day by Russian attacks and losing your electricity and border and heat and things like that. So he's coming to the United States to thank the United States for everything that's done. Without our weapons and our financial support, Ukraine probably wouldn't

be where it is now. UM too, I think make sure when he talks to the Congress certainly that um they understand that Ukraine still needs their help because there is doubt about what's going to happen when the Republicans take over the House. And I'm sure he also wants to talk to the President. President Biden wants to talk to him about how does this go from here? What what does he envisage, UM is going to happen in

this war? UM, so a lot to talk about and symbolically very important, you know, and I'm thinking about Vladimir Putin in Moscow where wherever he is right now watching this meeting on TV. Obviously I would have to assume this doesn't play well in Moscow. Does this risk sort of a more aggressive retaliation type of thing from from Vladimir Putin to to watch this meeting take place? Well, certainly.

His press secretary this morning said, you know, the more assistance of the US gives, you know, the more the risk of escalation there is. You know, we've been so worried about escalation, and what we've seen the Russians do clearly is with this indiscriminate bombing of civilian targets, but short of using a tactical nuclear weapon, which I think the likelihood of that is not very great. Um, the Russians want us to believe that they're going to escalate.

They want to intimidate the Ukrainians and the West into not doing more. But I'm not sure that this really does risk very much more because as I said, the Russians are not doing well on the battlefield. That yes, they can continue to bomb these civilian targets, but they've been doing that for the past few weeks. Anyway, Well, Ahula, talk to us about that a little bit more. Sort of the Russian perspective, specifically, the Putin expects expectation when

he started this invasion three hundred days ago. Did he have any idea or I don't know. Did he Do you think that he thought we would be talking about this three hundred days later? Certainly not. He thought that right that they be able to take key of in three days and conquer the whole country. So I'm sure he had, in his wildest dreams, didn't think that the war would be going on. Because they totally underestimated the Ukrainians ability and will to fight back, and they have

underestimated Western solidarity. They didn't think the US, we're back and it's European. Our eyes were back Ukraine the way it has so I think from their perspective, um this this was unexpected. The Russians now portrayed this war as a proxy war between Russia and the West. They see this as a war between them and primarily the United States. That's not how we see it. It's a war between

Russia and Ukraine, and we're helping support the Ukrainians. But this is really feeding in through the narrative that Foodin is telling the Russian public that this is really the USS is guilty here, you know, Angela, I know, uh, President Zelinski is in DC's mainly to get more weapons

in the fight against Russia. But boy, as I think of that cold winter approaching and really already here in Ukraine, we talk to us a little bit about what that winter is going to look like for Ukraine this year and is there anything uh, the US can do to to help them on out front. Well, I mean, it's going to be a very cold, dark winter, whatever the temperatures are. I mean, they're people who have already been existing without heat, without electricity, and without running water in

cities and in rural areas too. But all the more that the Russians bomb them, the more that that strengthens the will of the Ukrainian people to resist Russia. But it's obviously very, very difficult to live under those circumstances. So what the US can do is I think we've given them some assistance in trying to repair their electricity grid and things like that, but by providing them with weapons, and we now have announced that we will give them

the Patriot missile. This is a defensive system to shoot back the Russian missiles. The more that we can provide them with the weapon we to deflect Russian attacks, then the less they will in fact lose their electricity uh, and the less their infrastructure will be damaged by the Russians. So it takes a few weeks to train people to use these systems, but hopefully in a few weeks time that will help. Well, that's you hit on what I've

been wondering. So we're we're providing support in the form of weapons, but as you mentioned, that requires training as well. I mean, is the US providing that training? Yes, it is, will be training the Ukrainians I think probably at our airport base in Germany, um and uh, and that's where they'll receive the training. Edgella. How do you see this all ending? I mean, is there any world in which Vladimir Putin just concedes defeat and walks out of Ukraine?

I assume not. But how does this resolve itself? Well, it's really unclear. This is a war that could go on for a long time. The Russians are digging their heels and Putin's view is the longer uh, this war goes on, the more likely it is that either the Ukrainian people will say, we've had enough of this weekend, live like this anymore, let's sit down at the table

and make concessions UM. And the same with the Europeans who are also suffering from high gasoline prices and and and problems also with the supply of electricity and things like that, UM as a result of the sanctions by the way that we've imposted on Russia. And so they're hoping that he's hoping that the Europeans will say, maybe we have to rethink what we're doing, and the same in the United States. That's why President Zelinski is going

to the Congress. You know, you have a lot of skeptics among the Republican Party who are questioning why the U should continue supporting Ukraine like that, So that that part of Prutin's game plan is to wait for the Western resolved to collapse UM and then force the Ukrainians to make these concessions. It doesn't look likely at the

moment that the Ukrainians are going to do this. Blutin will never accept defeat, but in theory he could certainly um UH present this as some kind of a game for Russia if Russia's taking taken the little bit more territory, but he doesn't prepared to do that at the moment. And Angela, you hit on an important point this this Republican opposition when you're you're looking at, uh, what's happening

on on US shores. And of course President Zelinski is set to address Congress later today, and we've been having this conversation. You think about Matt Gates, you think about Marjorie Taylor Green, their their opposition to the fact that the US is providing any aid at all to Ukraine. Is there anything in your view that that the President of Ukraine could say tonight in front of Congress that would shift sentiment. Well, I'm sure that he's not going to be able to change the mind of people like

Marjorie Kayla Green. UM. But I think apparently he is going to meet them after the speech separately with Republican and Democratic leadership. UM. And I think what he's trying to do probably is to shore up people like uh, Mitch mcconnells and image will common people like that, who in fact is still very much in favor of supporting Ukraine. We shouldn't forget that until now, Ukraine has been one of the few issues on which there's been bipars In

agreement UM in Congress to support it. So I think those people will be his targets. Um. I I read somewhere that he might be meeting with some of the Round Paul. Now, Round Paul is an extreme skeptic on this, so I have no idea whether that would change his mind. Actela, Just so our listeners have a sense of of why you know so much about this top topic, talk to us about your book about Vladimir Putin for a little bit, right, So,

I've published a book called Putin's World, um. And in that book I look at Russia's relations both and the subtitles Russia against the West and with the Rest um. And in that book, I certainly look at why Russia's relations with the West have deteriorated so much, um in the last few years under Putin. But why the rest of the world, much of the US of the World, China, India, the other Bricks countries, much as the Middle East, Africa

and Latin America. All of those countries right have not condemned Russia for its invasion of Ukraine, have not imposed sanctions on it because Putin is very carefully cultivated relations with these non Western countries, um and that's really paying off for him. And that's why, you know, when we look at this, President Biden said at the beginning of the wars will be a Pooria. It's a Polia in the West, but it's not a prior in the rest

of the world. Angela really appreciate your time. That is Angela stant She is senior fellow at the Brookings Institution, and as she said, she's the author of Putin's World, Russia's Russia against the West end with the rest. Really appreciate your time. As we watch President Vladimir Zelinsky's trip to the US, this is Bloomberg Business Week. These sees Bloomberg Business Week with Carol Masser and Tim stinebec on Bloomberg Radio. We were just talking about President Biden's meeting

with President Zelinski. Later today, Attorney General Merrick Garland will join a meeting with the two. According to Bloomberg reporting, that's because the d J has played a key role in enforcing some of the sanctions against Russia, which leads nicely to one of the stories on the terminal today it's in the business Week magazine, the headline of which is Russia and Iran are building a trade route that

defies those sanctions. Let's talk about it with Bloomberg business Week editor Joel Weber and business Week Global Economics editor Christina Lynde Blad. They joined us both now, and Joel, it's a big important story again as we watch what's happening in Washington, d C. With the Ukrainian president here

on us. Doyle, Yeah, it seems like a pretty well time story and very much adjacent to sort of the bigger geopolitical tensions and and what this story um digs into was honestly like just it's a you gotta read this thing either on your phone or or in the magazine or online so that you can see what this

this this trade corridor is starting to look like. And really what Russia and Iran are trying to do here is find a synergistic um relationship that can actually be behind the lines, UH so that things like ports that and that rely on other other UH partners can't be affected by sanctions. And so they've really come up with, UH, there's an existing infrastructure, but then they have very ambitious plans to expand. What that looks like, Christina, how ambitious

and what do they need to accomplish? Well, they are planning to invest about twenty five billion dollars and that is in widening and upgrading some part, like you said, some parts of existing infrastructure, like the Sea of Azov, which is the distinction of being the shallowest in the world that needs to be dredged in parts. Uh, there's a canal linking the Don and the Volga rivers um also very narrow in parts and has sort of traffic jams there. We're seeing Iranian ships um beginning to move

through these waterways. So what they're creating basically is this internal I'm inland corridor rather which UM where it's more difficult to scrutinize what kind of cargo is going through and where where does the trade currently begin and where's the ideal endpoint currently And then also in their in their plans right so right now this the CEO as of which is right north of the Black Sea. Most people don't even I think you know, probably didn't do

it in geography and high school. UM. And then the terminus would be on the Indian Ocean because India is a key part of also what while not making huge investments compared to other partners, it is that it is part of this um of this corridor because already we're seeing UM. For example, Russia was a shipment of Russian grain that transited through Iran on its way to India this year, and how busy is it currently. UM. We

analyzed I'm sorry about the noise. We analyzed UM some data on ship movements and we saw we were able to track a couple of dozen ships from Iran and and Russia that are already using the waterway. Some of those vessels are sanctioned, but there is in complete data. So but that's what we were able to establish. You know, Christina, when I think of both Iran and Russia and their trade with the rest of the world, all I can

think about is is oil and energy. So I'm curious, what will these two nations be trading back and forth. I assume it's not a big oil relationship. What are some of the items that will be going pores? Well, you're right, great on oil products was the foundation of the existing trade. But they've signed a bunch of deals this year and they're trying to expand you know two

into like polymers, medical supply, auto parts. So we saw for example already that trade in the first eight months of the year doubled between Russia and Iran, and there are forecasts from Russian sources saying it could go to as high as forty billion dollars a year if the two countries wrap up a free trade agreement. And so Christina, if the aim here is or one of the aims is to build sort of a sanctioned proof trade route, what has the response been from around the world. What

is the US, for example, how to say about this. Well, the US UM envoys, um U s officials rather are already very concerned that some of the trade going through right now is arms from Iran traveling to Russia, and they're basically putting the world on notice that you know that um they want to crack down on that kind of commerce, and also that other countries that that sort of aid in this effort, in this larger effort, you know,

will also be sanctioned. So that could be a concern for countries like India if they want to participate in this corridor. Okay, So that that speaks to you know, how the US and and uh its allies could actually try and pinch this. What what options do they have to exert influence and try and uh you know, dial down what's possible here to exert influence with the other with others, like with allies, to make sure that the corridor is you know, trafficked, not as much as the

Uranians and Russians would like. Well, I mean, like I said, if they I mean, if they could they could say, if they would say action for example Indian buyers of Russian wheat that was going through the corridor, that's I mean, they haven't spoken exactly with that kind of detail, but they basically said, you know, you know, if we find that countries are trading with these nations, we will they

will be targets of sanctions to I mean. The difficulty is that it's much harder to track, um, you know, cargoes going through this inland corridor than it would be in the open sea. Um. For one thing, the vessels are generally smaller because you know, these waters aren't as deep, so there's going to be more, you know, more traffic

to get the same amount of goods across. I mean, I'm gonna ask that about Christina about the ships involved in this um you know, presumably these are just Iranian and Russian ships there are they sort of cutting out the global shipping industry more or less. That's I mean, from what we've been able to gather. Yet that's mostly what they are because you know, ships need. For example, Russia has been working uh and you know, to give Iranian ships, you know, right of passage through its rivers

and canals. So so you know, Russia control some of these waterways, so not any country can go through and talk about India role here. Sorry to cut you off, Shoal, but when we think about this route that's being built between Russia and Iran, how does India factor in? Well, India has made an investment in an Iranian port um, but it pre dates it's been you know, the work there has been lagging for many years, so um, it

wasn't done. I don't think with any kind of larger vision of what was going to happen in terms of how these two countries were going to try to you know, turn so much towards you know, rushing around towards each other and try to accelerate plans for building this route. But generally there has been an effort underway for at least a decade to sort of together countries in Eurasia closer together, and so India was going to be part

of that in some form. I wonder actually the evolution of the brick relationships to write like if you if you can reach uh Asia a little bit here, maybe even South Africa through this these terminus, you start to actually see that this could be I mean this this is kind of the US nightmare. I think actually, like if they can actually stitch together a trade corridor that's sort of behind the namy lines, like you really you might not be able to touch it that effectively, right,

That's right, that's right. I mean it also shows I mean, I think one of the things we've been tracking all years, it's just to to look at how supply lines, you know, I mean, rather supply chains are changing as a result of geopolitics. You know. So we've seen a bit through

you know, near shoring and so called French shoring. But this, this to me actually was a story that I hadn't heard that much about, so I was very did all right, it's a great story from Bloomberg Business Week, that is Russia and Iran are building a trade route that defies sanctions. Those nations investing upwards of twenty billion dollars to ease the passage of goods along those waterways and those railways.

A very timely conversation again as our Ukrainian President Vlodomir Zelinsky visits US soil for the first time, first trip outside the country since that war started over three hundred days ago. Thank you to Bloomberg business Week editor Joel Weber and Business Week Global Economics Editor Christina Lynn Blad. You're listening to Bloomberg Business Week with Carol Messier and

Tim Stenebeck on Bloomberg Radio. Well. One of the defining features of the economy in two, other than super hot inflation, it's been a super strong labor market. The unemployment rate came in at three point seven percent in November. Let's talk about what the next year holds with Julia Poll Actually is cheap economist over at ZIP recruiter. She joins us now on zoom from Los Angeles. Julia, It's great to get some time with you as we wrap up two.

Let's talk about the labor market. In three. Do we get above four percent inflation or are we gonna stay resilient here. Unemployment, I mean unemployment. It's been a long year. The FED is predicting four points six unemployment in four but it's somewhat hard to see how that will happen given the strength of the US consumer right now. We're still seeing consumers with with plenty of runway left, with very low debt service payments as a share of disposal income,

and with very low delinquencies. And here's the most important thing that's going to happen in the next year. Workers are going to see a real wage increase, and that's because inflation is coming down more quickly than wage growth, and so actually their purchasing power could expand, and I think that will fuel strong, UH sustained, robust employment growth despite some of the predictions. Well, Julia, clearly I have inflation on my mind. So let's talk about that a

little bit. Sort of the link between inflation and what we're seeing in the labor market wrapped those two together, are there is what does that relationship look like in this moment? Does one depend on the other. So the imbalances in the labor market are a key contributing factor to inflation, and they are a reason that we have seen UH inflation spread across the goods in the CPI basket, UH move out of energy and and food and areas like that where supply chain issues were to blame initially

UH and into core services now. But what we know is that that the FEDS actions are taking effect. We can see inflation coming down now UH and UM real time sort of market rents, for example, real time private sector data suggests that there's more cooling ahead. We also know that when inflation comes down, it doesn't mean that wage growth comes down right away either. They have actually been pretty long periods in history of real wage growth because wages are much stickier than than than prices of

goods and services. And so what we could see this year is that after seeing their purchasing power erode in two, workers could now actually finally get a real wage increase as they have been doing over the past five months. Actually, I'm wondering how you think we got to this situation we're in now, with the imbalances you're you're talking about.

You know, the Jolts Job Survey job opening survey still shows something like ten million job openings in the US, you know, way off the charts compared to pre COVID. Why is the job market still so hot in your opinion, Well, initially it was because employers rushed back into the market and demand returned much more quickly than labor supply. Many of the people who left the labor market initially, who were displaced to our older workers, just felt it wasn't

worth the effort to reskill and and come back. And so we we've seen many more people retire than would have been the case without the pandemic. Um. We also are kind of returning to the pre pandemic downward, trimmed in labor force participation that that's driven by an aging population and retiring a set of boomers now um. And

then finally, you know, immigration fell off a cliff. UH. Embassies and consulates were closed around the world and UH, and immigration had been falling even before the pandemic due to the Trump administration's policies. And so the shortfall is anywhere between at one point five and two million immigrants who would otherwise have been we're working in the United

States now. UM. So the long term prospects of the US lab market UH and its size are not that great right now unless we start making more babies or or alloting more immigrants and those boomers back to work. It's always the boomer's fault. Katie ever noticed that it's a nice change from just blaming the millennial. Yeah, I

don't know, let's go back to flaving the millennials. I'm closer to the boomer and than the millennial and making me uncomfortable with all those even even among working age people, even among the millennials, we have this this very worrying trend of working age men leaving the labor force, the

decline in labor force precipation among prime age men. I think it is perhaps even more concerning, and that's tied to things like this, you know, dramatic increase in in drug use and drug overdoses and and opioids and fentonmyl and these very very dangerous things. So hopefully this is a year of where policymakers study the reasons underlying relatively sluggish low participation in the labor force and come up with and serious solutions. Yeah. No, that's definitely been one

of the mysteries just tracking that participation rate. But sort of to Mike's previous question, why has the labor market been so resilient. That question becomes even more pressing when you think about some of the headlines that we've been getting over the past couple of months. When you watch what's happening in the crypto industry, which it's told idiosyncratic story,

but you've seen a lot of jobs lost there. Then you think about the tech sector and some of these big tech giants either freezing hiring or laying people off. You haven't seen it work its way into the data. And is that because there's certain sectors of the economy, of the jobs market that are still hiring and then some or how does that sort of wash out? So when we talk about tech layoffs, we're talking about tens

of thousands of workers. But in a normal month, two million workers in the US economy are laid off or fired typically, and since the pandemic, that has been way down to about one point three one point four million. Uh and so we have far fewer layoffs and terminations happening in the economy right now overall in the aggregate, and that's why those tech layoffs are hardly even showing up. Also, when tech workers are laid off, their reemployment prospects are

are pretty strong. I mean, this is the cream of the crop. These are the most in demand workers in the economy, and so many of them are finding reemployment remarkably quickly. Uh They're getting calls from recruiters before they even you know, sign that severance stackage. So that's why we're just not seeing unemployment take up that much as a result of these layoffs. I was going to ask you, actually, like what is the matchup between the job openings and

these layoffs in the tech sector. You know, it's it's I would worry that you'd get laid off, as say a programmer at Twitter and have to you know, your your best option is to go work as a barista at Starbucks or something. But I guess it's not. It's not that dire right now that there is still a lot of openings in the tech sector for these layoffs that we're hearing about. Anecdotally, about three and four laid off tech workers appear to be getting new jobs in

tech based on our surveys. So, um, you know, there there are still tech opportunities. There are companies that are profitable who are seeing their share prices rise. I mean it's you know, it's a small set of tech companies, but there are solid, healthy tech companies with with strong

growth prospects um. And then even within tech companies, you know, many of them are laying off workers in their least profitable UH teams or functions or sections, but still hiring pretty rapidly in other parts of the business that are very profitable and strong UH. And so you know, sometimes we needs to look at these layoffs as a share of employment in the entire company, and often they're they're

not really changing head count very much overall. And then in the broader economy, there's still huge demand for tech workers, both within tech and beyond tech every other industry. Every company is becoming a tech company in America, within a website, an app, and increasing amounts of data that they collect an analyze. So what does it all mean for wage growth, Julia?

You know, is are we going to see sort of that wage price spiral that people talk about where company you know, workers are demanding higher pay and so companies raise their prices to to pay for that. Is that a risk do you think going in So? I don't think so. I don't think we're seeing a wage price spiral because we are actually seeing prices come down. We're seeing goods prices come down and uh, and we're seeing uh, you know, wage growth appear to sort of slow or

or level off. UM. So I don't think that is too much of a concern. I think we've now given time for supply chains to sort of repair and improve, and so as workers now start receiving real wage increases again, uh, that will uh you know, sustain demand for goods and services, um,

but without putting too much pressure on their prices. So I think the you know, there's a there's something called the beverage curve and labor economics, which is a curve showing job openings versus the unemployment rate, and what the Fed really wants to do reduce job openings, reduce that gap between the number of people seeking jobs in the number of jobs available without pushing unemployment up too much.

So far, they're actually managing to move down that beverage curve, pushing job openings down ever so gradually without really increasing unemployment. It would be a sort of a miracle if they if they managed to do that. That's not usually the direction that this curve is, but it seems to be working all right. Julie We've got to leave it there. That is Julia poll actually is chief economist over as ZIP recruiter. N all yeah, but you let me drive?

No no, no no, all right, please, I'll do the right gravels. I want to drive. It's a good question. Drive is the drive to the globe? Tim Well down on Bloomberg Radio, All right, we are about eighteen minutes away from the close of trading on December twenty one. Let's get some insight from Lisa Ericson. She is head of the Public Markets group over at US Bank Wealth Management. She joins

US now on Zoom from Minneapolis. Lisa, we're looking at a big broad rally today, but when you look across the Wall Street forecasts for there is a lot of doom and gloom when it comes to the stock market. Where do you fall when you look at the balance of risks. We're really more cautious on the US equity market going into the new year. And the reason why is that, as you pointed out, when you look both at the macro outlook and the micro look, we continue

to have some headwinds. Chief among them is the fact that we still have inflation while declining at relative relatively elevated levels, and as long as that remains the case, we're going to have the FED continue to be more restrictive in their policy, again maybe at a slower pace,

but nonetheless really trying to tighten. So you can bind those two factors with the fact that consumers and companies now have been having to deal with this tougher environment for some time, and it becomes a question again of how long the consumer can continue to hold out and those corporate profit margins continue to hold out in terms of maintaining relatively resilient levels, but not with without some

slowing slely. So what does it look like in practice to be cautious on the equity market at this point? Do you avoid it completely, just go all in the fixed income or do you try to find those stocks that that actually do benefit from higher rates and pricing power. How do you sort of put cautiousness into practice in

the market. We're advising our clients to be underweight US equities relative to their long term strategic allocations, so we think again caution is warranted and how they're positioning themselves across asset classes because of those factors that we just talked about, where we would put that money in term is relatively more sort to our fixed income, higher quality fixed income as well as global infrastructure listed stocks, which would contain sectors such as utilities UH, it would contain

midstream energy, UH, transports, all of those kinds of infrastructure items that again tend to offer like high quality fixed income, higher levels of interest or dividends, and so that higher level of incoming cash flow helps to buffer the portfolio in more difficult environments, and so high quality fixed income that makes me think of treasuries, and treasuries are interesting. When you think about the news that we got from the Bank of Japan yesterday that they're lifting the cap

on yield curve control. That spurred some fears that maybe if you think about Japanese bond buyers, there's such a consistent force in US government bond markets that maybe they'll stay home if fields are a little bit higher over there. When you're looking long term at the fixed income market, do you factor that in or do you think those fears are overblown? To your point, there are forces that

continue to pull up yields across the globe. Obviously, here in the US, the FED itself is tightening, and we have central banks globally, the most recent of which being the Bank of Japan, really having to raise their targets or their bands. Nonetheless, we still think that having that higher income cushion that can come from higher quality fixed

income makes sense. And right now, all other things being equal, we would also lean slightly shorter immaturity, keeping closer to the benchmark because of those actors, but we do want to continue to keep an outlook. We do see that yields overall are are quite attractive, so at some point in the future we might actually look at potentially extending out that maturity profile of a fixing portfolio, But right now we're still on the relatively short side again because

of the factors that you mentioned. At least I know at US Bank Wealth Management you have a proprietary health check you call it of macro indicators. Can you talk to us a little bit about what some of the inputs are and what is that health check showing for

the US and some other parts of the world. We do have a global proprietary health check that looks across the countries, whether in the developed markets or emerging markets, at how activity is going on in general sectors of the economy, whether it's consumer housing, and for each of those sectors, what it does is it bottom up puts

together a number of key indicators in each area. What we've really and seeing here over the course of the last year, whether it's in the US, whether it's in developed international markets or emerging markets, is we definitely have seen slowing in the trend of where those indicators are pushing. In addition to that, the absolute level of the indicators

have come down quite a bit. So all of those are really just pointing to the fact that the macro environment has been impacted by again, uh, the tougher market monetary environment, in addition to just some of the natural deceleration that comes from the fact that one was a big reopening year and it's just hard to keep growth at that same level. And so these a you're cautious on the equity market, do you see any opportunities to go on offense when you look at equities or you

mostly playing defense here? One of the areas within equities that we do think again is interesting right now are more dividend oriented equities. So in line with the theme that we had on the fixed in comic global infrastructure side of again pulling some of that cash flow upfront in what could be again a more volatile market. We see within equities again some of those dividend paying stocks, particularly those with good ongoing dividend growth, really makes sense,

you know, at least I've heard. I've talked to a few people fund managers and strategists who have said, well, is going to start out rough. It's basically going to be a lot like two was volatility, Inflation still too high, rates still elevilate, elevated. But then they expect sort of an inflection point in the year where it's clear that inflation has come under control and the Fed might actually start signaling that they'll they're gonna ease eventually. How do

you think about the year coming up? Is it possible to sort of break it into sort of a good bad first half and a and a better second half. Is that a possibility? Do you think? Well, it certainly is a possibility that hopefully over three things improve, and of course, for all of us, we do hope that's the case. When we look at the year overall, however,

we just see a lot of uncertainty. We haven't been in a period like this where again the level of forecast and certainty is high, and I think that stems from a couple of things. So one is just the fact that we've never been through a period like we've had where we had a sudden event like a global pandemic,

you know, shut down the economy. Then we've had extraordinary monetary and fiscal stimulus leading to reopening and then unfortunately elevated inflation because not only of demand, but because of the supply chain constraints. So again, how that exactly works out and the pace at which again supply comes back online, including in the labor force, just really remains to be seen. So with all of that, there is high uncertainty I think about the trajectory, so we again believe the best

place to start is a more cautious uh stance. But we'll look at it as it continues to move forward, allright. Lisa Erickson, she is head of the Public Markets group over at US Bank Wealth Management. Joining us on zoom from Minneapolis. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio or stream US live on YouTube and Bloomberg dot com.