Rates, Markets, and the Economy (Podcast)

talk to Ira Jersey. As much as we want to try to avoid talking about the Fed, the Fed is moving continues to move this market. So, Ira, what's some of the latest work you and your team have been doing about kind of what's going on in the treasury market. Again, we got a two year four point seven percent to ten year three point nine I'm sorry three point nine

three percent? Wow, what are you guys looking at? Yeah, so that three point nine percent on the ten year was a pretty important technical level, and you know, even though a longer term I'm a bit constructive on the long end of the market, there's clearly clearly the market is very offered right now and we're likely to see UM a break now above four percent and a ten year in the near term, so that the next important technical level is actually around four and a quarter percent

on the ten year. And I think there's two things driving this number. One is just the idea that inflation is going to continue to be a problem. You have UM some of the services numbers, like some of the manufacturing data PMI data that just came out looking pretty strong. You know, the Philadelphia Services Index come out this morning and positive territory after being in negative territory, and that that tends to follow um excuse me, the services inflation

tends to follow what some of these services indexes are doing. UM. So, so the fact that you have positive Philly fed UM Services index going up is you know, suggesting that you're not going to get a decline in inflation. And I think that's one of the reasons why you're seeing inflation expectation today up by five basis points. By the way, do we have uh, hey, ken fella, you do we have Philadelphia terrestrial radio station? No? No, all right, who

cares about Philadelphia? Ira Love? Why why does it matter? Philly? By the way, I've I've actually listened to eleven three zero in Philadelphia. Okay, we love Philadelphia. We love you Philadelphians. How important is this? I mean Philadelphia Fed survey versus Atlanta versus New York. Are these very regional surveys or do they all do national work? Now, those are all

regional surveys, um. And then they they then they do have a national survey for UH for the PMI, and obviously the different Fed districts kind of get together and create something called the Beige Book. And these are these monthly survey data are part of that larger narrative as

to what's going on in the different Federal Reserve Bank regions. UM. But but Philadelphia is is big enough and has enough you know, both services and manufacturing that that you know, it has over the course of many decades, been at least a little bit of a leading indicator, you know, sometimes better than others. So you have to take the full mosaic and look at all of these data. And certainly there's going to be some regions that are doing better than others and some that are obviously going to

be doing worse. UM. You know, we had a significant period of time in the intermeding period over the last decade in between the two crises, where you know, the South and southeast were doing very well, so you had like the president of the you know, Dallas FED would be very hawkish, whereas everyone else was like, things aren't so rosy because California was still doing bad. New York

and Northeast were doing bad. So you know, Boston, New York, Philadelphia, Um, you know, feder reserve presidents were saying, well, we're not

as optimistic as you are, maybe down in Texas. So so again, like the federal Federal Reserve obviously is looking at the whole country, but there are certainly regional differences and that's and quite frankly, that is one of the benefits of having the Federal Reserve system be similar to how it is with all of these regions doing their own work and trying to determine what's going on within their their you know, one of their twelve districts, all right, Ira,

So what's the market telling us now in terms of what this FED is going to do over the remainder of this year? Is it? Because I think at one point we're seeing twenty five bases points maybe a second twenty five bases point than a pause and maybe even cutting rates later in the year. Is where are we now? Yeah, so now we're still three twenty five bases point hikes now is more or less what's priced, Um, some small chance of a fifty basis point in there for the

for the March meeting. I think that they're going to be in in doing twenty fives. Now the question is how many more twenty five bases point hikes and do they get you know, towards six percent. I don't think that they'll get there, but then again, you know, some of this data is just is as surprisingly strong, so

you can't completely discount the possibility. So the market is thinking now five and a half percent on the upper bound for the Fed funds rate and then still some pretty high chance of a cut before the end of the year. And I still think that that's what the market's mispricing. It's not necessarily mispricing five and a quarter or five and a half. It's more that you know, we're we're pricing for for cuts before year end, which

which I think is very unlikely. I just heard um somebody may not be buying Liverpool and we're still we still care about Manu. In fact, Paul, did you know MANU Manchester United the soccer team. It's US listed and traded. Yes, it sounds like for a reindeer, like an Inuit name. But anyway, man you why uh? Oh, Well they have an American owner, um so, and they went and they went public. They're actually for sale according to a lot of reporting being done actually on by Bloomberg in the sports,

like a six billion dollars sale. Yeah. So it's it's a reasonably big company, right, it's a global brand, um and they're playing in a cup final this coming week. So before Paul asked me what I'm watching this weekend, it is Manchester United versus Newcastle a currently middle e cloud versus a likely to be cloud going to be playing in a cup final and in English and English. Yeah, exact stuff all right, Ira, great stuff as always, Ira Jersey.

He's our chief US interest rate strategist for Bloomberg Intelligence. Also a avid soccer fan. Deepot reported some numbers forecast a little disappointing stocks off about let's call it five percent here, three hundred dollars a share. This is a company with a three hundred billion dollars market cap. Let's break it down with Drew Reading. He covers the stock for Bloomberg Intelligence. He's research annalists over there. Hey, Drew, talk to us about HD. I mean what I was

in an HD store a couple of weeks ago. Packed. Um, I don't know. Seems like people are still buying wood and nails and hammers and stuff, doing that do it yourself thing. What's going on? Yeah, I mean home Depot has been really resilient. If you look over the last couple of years, they've grown sales over forty percent. They've added about fifty billion dollars in sales over the last three years. But we're in a little bit of a different environment now where we're starting to see some more

stress on the consumer. And I think that's what their guidance really hint at. It's that there's going to be some spending pullback among consumers who've got a weaker housing market, You've got some anxiety over where home prices are heading. And then at the same time, if you put on top of that, they're going to have some margin contraction because of investments they're making to their hourly employees. So that's what's weighing on the stock today. And they've underperformed

this year as well. You know, while the rest of us have been rallying, home Depot is little changed with today's dropped their down five percent year to date. Do investors not like the home depost story as is it not kind of techy enough? Did it not do as badly last year as the other winners this year? Yes, so they're actually up about twenty five percent since September,

so they've had a nice rally. But I think what we're seeing now, and you know, this is kind of how I'm thinking about the guide is they haven't really de risked twenty twenty three fully, and I think that's something investors are concerned about. When we were thinking about the market next year home improvement broadly, we were looking at the market being down about mid single digits, home

Depot outperforming, maybe down two to three percent. Their guidance suggest that the broader market for home improvement will be down about only one to two percent call it, and they'll be about flat. So I think there's still some concern out there in the market that there is room for four things to deteriorate a little bit more than what they're indicating. They also called out some compensation issues.

They're going to pay people more, you know, the smart people that help you out in the aisles and tell you where to find stuff, because they're going to pay them more. Right, Yeah, that's what the investment is in. It's really in that customer service aspect, something Home Depot has been well known for. So they're going to invest in additional one billion dollars in their hourly employees over the next year. That's going to contribute to about a

sixty base this point contraction in operating margin. And you know, it was a little surprising just because they've made so many investments over the last years with their employees through COVID. But I think it really just highlights, you know, the tight labor market that's out there and how difficult it is to attract employees and also to retain the ones that they already have. So I put up the comp screen. I always like to look at just a five year

shot of any company. Home Depot is over the last five years up total return eighty five percent, so not bad. That's better than the S ANDP total return sixty three percent, and it's they're both better than Lows, which is only up twenty five percent over the past five years. Why is Lows such a big underperformer as Home Depot just

kicking it or is Lows dropping the ball? So when I think, I think when you're talking about the comparison between two, it probably makes sense to look a little bit more near term because Lows has been and some of a turnaround story over the last several years. They brought in new management, they're re emphasizing the professional customer somewhere that they've been underpenetrated, and that's really been one of the sources of out performance from a home depot

versus the Lows. As home depots forty five percent exposure to professional customers versus Lows at about twenty five percent. At the same time, Lows is starting to reinvest in their online business, which is something they've neglected over the last several years. So Los is more of a turnaround story. They've made some good strides, they're improving their profitability, and they've also narrowed that comp gap with Home Depot that has been you know, pretty wide over the last several

years and drew. In addition to home depot, I know you cover the housing industry overall. Here we got existing home sales came in with a seven percent decline month over a month. Consensus was for a two percent increase, So rule under performance. There are people not buying homes? Are they not listing homes? What's going on in the housing market. So the fact that people aren't listing homes

is is definitely one of the issues. You know, ninety two percent of outstanding mortgages have a rate below five and a half percent, so there's a lot of distancented for people to move, so they're not putting their homes on the market. At the same time, unlike what we saw in the last downturn, you don't have those forced sellers, and that's because people are locked into fixed rate mortgages

and they don't have the adjustable mortgages. So a big part of it is certainly inventory, but let's not ignore the fact that affordability is, you know, near the worst that it's ever been. We heard some commentary from some of the builders recently that as we got into January and rates pulled back to just under six percent from as highest seven percent in November, that buyers started to come back out into the market. So demand was pretty

strong in January and early February. But at the same time, over the last couple of weeks, rates are back up eighty basis points, so you know, we're approaching seven percent again. So we think just as quickly as demands kind of bounced back, you know, we could see things kind of fall off in the other direction. Are there any that you like better than the rest when you look at

k Lnar Poult at all the home builders? So I think there, you know, there's a couple of different criteria that we look at when we think about how we look at the builders on a relative thence, in a slowing economic environment, we like those with scale because they can, you know, leverage the trades more, they could spread their costs out, they could push back against their suppliers, So those names would be a Dr. Hort and Lenar. And then from a product perspective, we like builders who are

focused more on affordability. We don't care so much what they call their segments, whether it's entry level, move up, but we want builders who are competing by price with the resale market. So some of the names that come to mind there again Dr Horton, a KB home LGI. Over the longer terms, so Drew just real quickly here.

I mean, when we think about the new home market in that affordability segment, that's been a role on the industry that they just haven't built enough affordable and lower end or you know, kind of first time buyer units. Is that changing in the industry. So it has started to change over the last several years. When we were, you know, in the early days of the cycle, all the emphasis was placed on the move up market because that's where the demand was, that's where the margins were.

But over the last couple of years, we have seen a shift towards the lower end of the market because from a demographic perspective, that's where the demand is going to come from. You know, we think that will continue to be the case once we kind of get through the down part of this cycle. We do think that the lower end of the market will show relative strength. All Right, Drew great stuff appreciated as always Drew Reading.

He's a research channels to Bloomberg Intelligence. He follows the housing market and all the industries around that, including the do it yourself retailers like home Depot and Lows and Home Depot Forecasting lower earnings in part due to some concerns about the top line intercessionary environment, but also because their wage costs are increasing. It again, home depot was half a million people, so yeah, you got to pay

those folks that are in the aisles. Also joining us here in our Bloomberg interactive brooks sho shine, shold shine. Let me just let me just give you a definition. Shol Schein debt. This is, according to Bloomberg News, is a German promissory note syndicated like both loans and bonds that can have both fixed and floating rates. It's turning into a niche German instrument to increasingly popular funding option

for big European companies. I learned something new, and I say she will know because Amanda Robello just walked in the studio. She has head of passive sales US on shore but for DWS GROW. So Amanda, talk to us about how you're viewing the markets here. We've had a kind of a it feels like a little bit of a sea change over the past few weeks, maybe in response to some economic data that came in maybe a little bit hotter than expected and CPI PPI retail sales.

However you want to look, we at some PMI data today, it seems like the Fed maybe has a little bit more support for hire for longers that how you guys are reading it. Yeah, we think that it's not all doom and gloom, but we think it's still worthwhile thinking about potential volatility in the market's going forward. I think, you know Biden and the trip that everyone's been speaking about, He's really thrown the cash among the pigeons. So volatility is going to be here for the rest of the year.

There are some biopportunities though, and we think it makes sense to think about burdenhand theory, locking in dividends, having less focus on price appreciation of stocks. Really so we've actually heard from somebody night you but this was a several weeks ago, and it's just stuck with me because I simple catchphrases stick with me, Like the decade of

the dividend. I mean, I don't know, do I go out just buy some of these big three, four or five percent yielding stocks and then maybe put the rest of it a two year treasury, build a four point seven percent or you can buy a dividen focus ets Okay, to tell me about that? Definitely, So We've got two on our side which had been quite interesting in the past couple of weeks and months. So the first one SMPD. We've spoken in the past with you guys about our ESG SMP five hundred fun this is now an ESG

SMP Dividend Aristocrats fund. The one on there, it's an ETF with dividend paying stacks that are also good at ESG companies exactly as you get everything in there. And the reason why the ESG part here is interesting is because ESG is also a very good way to think about intangible off balance sheets risks, so that's kind of helping with the volatility component. Also, the dividend Aristocrats methodology,

I think a lot of investors are familiar with. This is about quality, sustainable dividends, so not just names which are going to pay out four five percent, but then not investing CAPEX, for example, So that's an interesting side

from that perspective. And the fund is yielding about five fifty basis points sorry, more than just SMP alone, but international equities as well also quite interesting as well, So these typically yield more than US equities, so thinking about more diversification in the portfolio and now you can be yielding as much as five point two five percent. Are we in an age where I mean you say ESG and it makes me think of you know, climate change,

global warming. We're against that sort of thing, right, But this dividend holds x on Mobile. Yeah, this dividend holds Coca Cola. Yeah. Um, can you just put anything you want in an EESG ETF as long as you call it ESG, it's a better seller because those things are not good for like humanity or the environment. You're equating

Coca Cola with big energy. Well, no Coca I mean, I would say even executives there would have to acknowledge a huge part of giving people diabetes globally, right, and x on Mobile I don't even have to explain that one. We all know that doesn't sound like an ESG name. So um, sad but true that you know, maybe Coca Cola is added to the obest crisis an xomobile. Maybe

it's a good thing. But going on this rabbit hole, it's the The thing is, though, it's about which of the companies which also have most scope for CAPEX in diversifying. So Coca Cola, for example, is included because there isn't a great deal of capex, which is in like diversifying their revenue streams to things like water and health drinks and so forth, health products as well. Then on the health drinks are for the most part packed with sugar

and a spossible consumption is just fine. Yeah, And do you think a large part of Americans are responsibly? So all right, So, Amanda, give us another sense of where you're seeing flows right now. I mean, I kind of feel like ESG has peaked in terms of interest level. I don't know if that's right or wrong. Maybe that's just here in the US. I know it's still probably a little bit more popular in Europe. Give us a

sense of where you're seeing flows right now. So we've been seeing a lot of flows going into China, especially ahead or when we saw the reopening of society, seeing higher consumer spending again just because people are out and about at the end of the day. Offend Asher has been quite popular because it's tracking the local index, so the equivalent of the SMP five hundred for China, which

is the CSI three hundred. And we've also seen as well a lot of interest in this international dividend plan that I spoke about before HDF that's been driven very much by just thinking about the hurdle rate that investors need to overcome versus the risk free rate at the moment, and international dividend focus strategies are definitely providing an opportunity there. What are just ETF funds in general? What have the

flow has been like? Last year was such a bad year for investors equity Fixingcome, there's no place to hide in your sixty forty portfolio. Kind of great year for ETF launches though, great year for ETF launcher. So tell us about how the ETF market kind of behaved or evolved in last year going into this year. Yeah, so last year and we already start to see the trend

as well this year. I think on the ETF side that continues to be a lot of innovation, much easier to bring funds to market then on the mutual funds side, and just because you don't have investors looking for the three year track record, they can kind of buy them typically straight away. Then we've seen flows going into some of those new products. So we do still see a lot of ESG products. But I think you're absolutely right that maybe there's been more focus on risk management and

things that we're more familiar with. So what's been interesting is you've actually seen some value come back as well, So we've seen a lot of the value ETF to start to attract assets. Also short duration as well, so just in light of the uncertainty, cash plus kind of products as well, they're doing very well too, short duration treasury focus funds. And then on the flip side of that, we've seen high yield, but high yield that's very considered.

So just thinking about the boost that you get in the yield, investors advisors being paid for adding risk the portfolios.

High yield is actually not as terrible as historically. The corporate default rate is actually pretty low at the moment versus historically, so high yield is providing opportunities to But in general, do you see inflows continuing, do you see more or you know, mutual fund conversions, more launches, just the ETF industry growing further in twenty twenty three, definitely, and I think that uncertainty in the market the ETF

is definitely adding a lot of value. On the active side, the transparency that suffered is really invaluable to investors at the moment. They just need to know what's going on. I think everyone understands that transparency and low costs, right, and that's huge. Exactly ten basis points makes a huge difference over a decade when you're suffering a loss. Right, Yes, what is the fidelity do of the world? The big mutual fund companies are they are they getting into the

ETF game. So I don't tend to comment to competitors, but yeah, they have launched a number of funds, and we've also seen a number of other typically active houses starting to enter in the ETF space. Let's say. Yeah,

in general, other companies are getting big into it. Like your head hunter is calling you more and more often, like Amanda, I've got a lot of job offers for you, and you're like, no, I love DWS because it's such a great company, right, because I get too about exactly all right, So, I mean I just can't what is this ETF business goal? Do you think? I mean, maybe just give us a sense of the I don't know the third party managed money out there, how much is

ets versus mutual funds and kind of how's that changing? Yeah, we're actually expecting the next year the amount of assets and ets versus mutual funds is going to take over. So at the moment, mutual funds are still slightly ahead, but ETFs will take over next year. One of the key I think it's really about this cost component and also about the transparency as well, but also operationally as well. If you think about it, with a mutual fund, you

don't need to sign up to a transfer agent. If you've got access to the exchange, you can just buy it that way. It's very easy dealing costs also very very cheap as well. When you think about the pricing mechanics too, you don't have the swing pricing component where existing investors are penalized by new flows or outflows from existing investors. So there's also kind of a more fairness, so to speak. But I think what clients are looking for at the moment in these tough markets is just

more niche exposures. All right, man, what a story this has been over the last Just for me, I've been aware of the last ten or fifteen years, but boy, the ETF growth has just been extraordinary. If I'm Abigail Johnson up at Fidelity, I'm like, oh my good, where's my growth coming from? Amanda Rebello, head of Passive Sales US on Shore at DWS Group, joining us to give us the latest on the ETF space continues to attract assets. This is the conversation of the morning. Let's get right

to it. Chevin Yelticin, dean at the University of Rochester Business School, joins us here in our Bloomberg Interactive Brokers studio. What a resume. Undergraduate from Wellesley, PhD from Stanford, former assistant professor at economics at Cullout School, those good folks out in Chicago, president, former professor of economics at Carnegie Mellon and now at University of Rochester. So great, great stuff.

And she is also Turkish, and she has been kind enough to share maybe a quick view of kind of what's going on in Turkey right now. It's so many difficult, difficult times over there with all of the earthquakes. Another earthquake just a couple of days ago. Chevin, thanks so much for joining us here in studio. I know you're gonna be going back to Turkey you mentioned next week. Kind of give us an overview of what you're hearing from friends and family about. Yes, it's a it's thank

you for having me. And it's a complete devastation. Really, two major earthquakes hit about two weeks ago. As everybody knows. What I'm hearing is that the situation on the ground is actually much worse than even what the news can depict. There's just not very much organized help going to various regions. It's spent ten cities. So that's another reason why getting

kind of that scale of help. You know, we're now almost nearing fifty thousand lives lost and a lot more to come because not everybody has been identified or rescued, and another kid just yesterday in the same region. So there's a lot of anxiety, a lot of sadness. Just there's a lot of anxiety over whether there's going to be more earthquakes on the northern fourth line, and it's really the Cold country is in a state of mourning.

And before we get to you know, any anything else, is the economic situation there making it so much more difficult. I know, Turkey has had huge inflation problems, they've got incredibly high interest rates, and hopefully the international community steps in as much as possible, but it's got to be more difficult. Yes, absolutely, the economic situation had not been great. You know, the Turkish era had deteriorated against the dollar and major currency. We talked about the Turkish a lot exactly.

So the other thing is that the Turkish growth in the last sort of fifteen to twenty years has been growth by construction, and that's what we're seeing the repercussions of because some of these buildings that are relatively brand new should not have collapsed, being that we live in

an earthquake region. And that's because this sort of the economic stimulus through construction has led to this overblown investment that's not always up to code, that's not always well done, lots of amnesties right before elections to be able to get the votes. And so it's it's now pressure on the government building, do you think, or it's the government is just sort of giving a lot of you know, basically signing off on a lot of development in areas that would be really not a good idea if you

ask the engineers and everybody else. So let's talk about sort of this the fiscal stimulus issue from our point of view here in the US and how it's affecting the US count I mean, we're obviously We're going to continue to cover that disaster, the tragedy there, and hope

that everyone can help out as much as possible. Here in the US, we also had a ton of economic stimulus, I mean trillions of dollars obviously from the government, and then the FED blew up its balance sheet to like nine trillion, and now we're, I guess, dealing with the repercussions of that. It looked like a guaranteed recession as the FED started to fight inflation and more people now are talking optimistically about a soft landing or no landing.

What's your view. I have been, actually, I've been only optimistic part for a long time now because the labor market has been very, very strong as we see it, and also just businesses finances and liquidity and household finances have not been in bad It's that's why I think there's just so much been resilience in certain pockets of the economy that I was never one of those that

said that the recession is very likely. The problem though, is, you know, obviously the labor market is strong and the economy was growing, but if the FED comes in and raises raises rates by four hundred and fifty basis points in the year and says they're on a path to keep going. That's the concern, right, The concern is that, you know, when we see mortgages, for example, going up to seven percent in the market where houses are already not affordable, that just makes it more difficult for the

economy to keep humming along. Yes, I mean, we're definitely seeing that correction in the in the housing market. And I think there's a distribution issue as well. You know, who's it really affecting it. It's not affecting necessarily kind of you know, the better of companies that have some liquidity base. It's not really affecting sort of higher income folks.

But credit has tightened for a lot of small and medium businesses and they've already hurting because of the wage bill has been going up with that kind of unemployment figure, and costs have been going up. Inflation is there. So for them, it's less about the recession. It's about the cost of doing business, whether it's being able to borrow and or being able to kind of pay the wage bill.

And that's what I worry about. It's really that and that feels inflation too, because as small and medium sized businesses struggle, they don't present as much competition to bigger businesses, and we end up seeing a lot more market power concentrated, which means ability to just do a larger markups and

fuel inflation. Are you concerned that this federal Reserve may overdo it maybe too hawks year, because I think even as recently as maybe a couple of weeks ago, this market was thinking about, Hey, they're going to pause and then they're gonna start cutting rates in the back half of the year. I'm not sure we think that today. But are you concerned that maybe they'll overdo it overtighten. I'm not terribly concerned. I think they're going to sort of maybe slow down a little bit in the way

that they raise rates. I mean, the GDP figure came on strong. Inflation is down, but it's still relatively high, so I don't think they're going to want to take their foot off the break. Whether or not they're going to really push it too far, I'm not quite sure. I think they're really hoping that this time around they can souf land the economy. I mean, this seems like such an exciting time to study business, you know, or to be in your job as the dean of a

business school. What incredible experiments you have to evaluate, from you know, initially quantitative easing to a zero interest rate policy to you know, fiscal stimulus that amounts to you know, double digit percentages of a GDP in one of the largest nations in the world. How exciting is this for you and for your students right now? It's extremely exciting.

There's no shortage. If this is the one time that I think, well, I'm not teaching this this year because of my dean duties, I wish I was, because I really get excited being able to bring all of the news into There's no shortage of topics, everything including with the COVID and the labor market and supply chain and now you know the dead Sea lying obviously the geopolitics. It is both a uncertain but from sort of a research and business study and economic study time of a

very exciting phase. What are the students, what are their interests right now? Like when I was in business school thirty some odd years ago, it was consulting and investment banking. Now there's so many other companies recruiting on campus. There's so many technology is such a big draft what are the interests of these kids today? Do you have altruistic students? Because when Paul was in business school, it was about money, money and money, that's right, So we do we do.

There has been a shift and that's been going on, I would say for about a decade if not a little bit longer, about students wanting to go to kind of sustainable, more sort of socially responsible companies. You know, they want to take classes in ESG. They want to understand sort of what the social and environmental impact and as and also sort of you know, what are the diversity measures that the companies are employing. So it's not

all about money. Consulting is still big investment, banking less. So I would say the tech industry, especially for schools where I've been I've worked at, Yes, we're very tech heavy where a STEM, NBA and and you know, and so our students are going to the tech industry quite a bit with different kinds of roles. You know, they're

everywhere from marketing analysts to sort of product managers. But that happens to be the biggest during the pandemic when we had those supply chain issues for you know, a couple of years. I said, boy, I shouldn't have skipped all those supply chain manager classes. The Duke and or played golf and decided not to go, because those folks are the ones that were really, you know, the lynchpin

in this economy. Yes, absolutely, And now I mean whether you know, even if we're out of hopefully the acute phase of COVID, we're still still seeing the geopolitics play in incredible roles. Is there demand or what is the demand from international students to come study at the schools you've been at, so um the biggest group that comes so the United States as a single country tends to be China. We've been seeing, at least in graduate education

a decline and applications across the board. In business schools at least, there's also some provisions about what kind of research they can be involved in because of sort of IP concerns, and so we've seen a decline. We're seeing some replacement by India, a little bit from Africa, a little bit from places like Indonesia and Vietnam. But you know the scale of China is so big, it's all yes, impossible. Well, and what amazes me is I think it's great that

you have that kind of diversity. It's helpful to the other students, it's helpful for academia, and you know, the quest for more knowledge. What to me is insane is that we give these international students the best education on earth and then send them back to their countries and don't give them visas to work here. It's like if we had, you know, Chinese carpenters coming over and we say, here, we'll give you the very best tools we can possive, money can possibly buy, and but you can't use them

in this country. Yes, I I you're you're you're speaking to the choiet here. If I could, you know, with one hand, sort of change one policy, it would be about getting visas for educated folks in the United States because it is it is very fraught, um, it is a very difficult causes a lot of anxiety, It causes a lot of uncertainty, and there's just not you know, it's all tied to the job. If they change jobs,

then they have to go through the process again. It's I do not understand, given that we don't have a we have an aging population, why we're not giving more visas to qualified folks that we have a lot that we educate, right, that we educate, but we have invest a tremendous amount of resources. Exactly exactly it should come with. I feel like the acceptance letter from the University of Rochester Business School should also come with like a five

year working right, because you're prepared. It's only beneficial to the US economy if you let them work here. Yes, I mean we have stem Stamp programs which gives them three years of visa, but I'd like to be able to stay pule a green card to their diplomaslutely all right, Chevin,

thanks so much for joining us. Chevin Yelkin, Dean at the University of Rochester Business School, returning to your homeland of Turkey next week for a business so hopefully that will be positive experience as those folks continue to deal with very, very tough conditions. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews of Apple Podcasts or whatever podcast platform you prefer. I'm

Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three, and I Fall Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always Catch us worldwide at Bloomberg Radio.