Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside my co host Matt Miller.
Every business day, we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moving news.
Find the Bloomberg Markets Podcast on Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. Now, Matt, we're gonna get some some smart conversation about Treasury refunding, Federal Reserve, all that kind of stuff.
We can do that with Campbell Harvey.
He's a professor of finance at the Fucal School of Business at Duke University, my former professor, and I can vouch that I did pass his Futures and Options class. I can't say I did more than pass, but pass is good enough back in the day, Hey, Cam, thanks so much for joining us here. Matt really wants to get smart on this Treasury refunding today.
What are your takeaways from what they announced?
So I think we need to look kind of beyond the refunding that was announced and just in general. So right now, the amount of debt service is about six hundred and thirty billion dollars a year, and the average interest rate on that is two point eight percent. Okay, so we know that rates are like four point eight percent or are up into the fives with the short term. So it's reasonable to assume that, given the needs and given the two trillion dollar deficet, that the debt service
will explode. Indeed, it will in twenty twenty four be the second largest spending category. Right now, again, it's two hundred and thirty billion dollars a year, and that will will definitely go up to probably nine hundred over the next year. Just the deficit of.
Nine hundred billion dollars that's going to be the interest costs.
Yeah, so right now it's six hundred and thirty trillion.
Dollars a year in interest costs.
That is insane.
I mean, we talk about big numbers, professor all the time here, but that's just bonkers. I mean, didn't like Treasury understand what was happening when we were at zero. Why didn't they just put out one hundred year bonds like the Austrians.
Well, you know, I advocated that take advantage of the super low rates, and obviously when you do that the rates go up. But still it's not normal to have one percent rate on a ten year treasury given what inflation.
Was we hit on a thirty year in twenty twenty.
Yeah, so again you could argue you should take advantage of that, but look, the problem is a structural problem. So when we have reasonably good growth and to a trillion dollar deficit, you know that that's a big problem. And again that.
So the the six hundred and thirty is carefully calculated, So for example, we need to be careful with the Fed balance sheet and stuff like that, which is kind of left pocket the right pocket for the government.
But if you carefully calculate that, it's about six hundred and thirty billion dollars and that's at two point eight percent, it's reasonable to expect that rate will go up. And when it goes up, it'll be the second largest spending category just paying interest. That that is not a good situation, and especially if we have slower growth. So we had a great print, and this is kind of consumers running down their savings and if you look at kind of the leading data, you can see that those savings are
pretty well depleted. The consumer is not going to bail out the economy in twenty twenty four like it did in twenty twenty three.
Hey, Cam, when we hear from the FED Chairman J.
Palace Effternoon, he's probably going to come out with the language that, as it relates to inflation, we have.
A long way to go to defeat inflation. Do you buy that?
No?
And we've talked about this before. So if you calculate the inflation rate with kind of real time prices for housing and rents, the inflation rate is below two percent. Really, the only reason it's above three is we've got that lagged effect from rental and housing inflation that happened last year, so in real time we're below two percent. I have no idea what they're talking about and making policy based upon data from last year, that doesn't make any sense.
You make policy based upon data today and what you anticipate will happen in the future.
Isn't it frustrating to watch this happen? I mean, if you advocated for you know, longer term debt when we were at zero inustrate policy, I can't imagine who would push back against that. Why would the Treasury Secretary not do that? And then if you think the FED is using you know, clearly bad data in order to drive policy. That should I imagine annoy you too, like is it difficult to move around in this world?
Yeah? I think annoying us the right word. This is not rocket science. Just look at the data. It's very clear of what's happening, especially with the housing inflation. So the housing inflation, if you believe the CPI is running at a rate over seven percent year over year, and that just doesn't squear with the data. It doesn't where with a year over year rents, it doesn't square with year over year housing prices. It's because it's reflecting what
happened last year. So I think that there is a problem. We need to use data that is real time data. Housing inflation is not over seven percent, and that is the reason most of the print that we get, the prints that have been over three percent, is being driven by stale data on housing and that just doesn't seem right. And also we've seen the long rates increase pretty dramatically, and this is kind of flattening the yell curve, but
in a very bad way. So usually what happens before kind of recessions that you've got a yield curve inversion where the long rates are below the short rates, but then it becomes normal. And usually what happens is that the short rates decrease to cause the normal yokur, that's not what we're seeing. We're seeing the long rates go up. That's very bad. That increases the cost of capital, and that serves to slow the economy. So this is not
a good situation in any dimension. And don't be fooled by that GDP print?
Yep?
So does is the risk here, professor?
That the Fed is overdoing it and will in fact push us into recession?
GDP will fall off a cliff. Plus, our interest payments are ballooning at a level that's going to make it hard to invest in things like solving diseases and funding the military.
That's not not bueno. So is that the recession risk?
Yeah?
So the Fed should have stood down in January of this year. So I agree that they've made things worse.
And it's especially bad given what we've seen happened to the long term rate that ripples through and just think of, you know, the these firms with commercial real estate loans and things like that, where that market is already cretered, and what's going to happen so we saw kind of a mini banking crisis in March and then as hush hush, Well, I'd like to see what's going to happen in the next few months, because we're not going to have four
plus GDP growth. That consumer spending has been depleted, savings have been drawn down, and on the investment side, we've already seen that decrease in twenty twenty three. So I do believe that the FED has overdone it, unnecessarily shot themselves in the foot and the economy at the same time.
All right, Cam, thanks so much for joining us. A bunch of us class at ninety one. We're coming down to Fuqua next weekend, so watch out. Cam Harvey, Professor Finance, a Fucal School of Business at Duke University that can vouch he has no basketball game, but he's a genius on the world of finance and economics and all that kind of stuff.
You're listening to the team. Can's our live program, Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
Jen Reed joins us here. George Ferguson joins us via the Princeton office. The camera there.
Why we have.
Jenery and George Ferguson here together. They're from Bloomberg Intelligence because we want to talk about Spirit and Jet Blue.
Those airlines are trying to merge or one by the other. Matt doesn't believe in mergers. One is buying the other.
Obviously Jet Blue is trying to buy Spirit, but.
The Department of Justice is saying, whoa whoa, whoa whoa whoa.
Wo Yeah, George. He follows the airlines for Bloomberg Intelligence. Jen follows all the anti trustuff for Bloomberg Intelligence. Jen, let's start with you, sir, why can't we these two little ittybity airlines get together? I mean, it's not United in Delta here.
You know, it is exactly the way you look at it. So this is what Jeff Blue says. We're two little, itty bitty airlines right Nationally, we're tiny, maybe eight percent combined share. But from an anti trust perspective, that isn't how you look at it. When you look at the way antitrust might impact a consumer, you look at it from a consumer's viewpoint. So when you're looking at it. You don't look at airlines nationally. You look at them
city to city. You look at routes that consumers buy to travel, right, and if you reduce the options in a route from let's say New York to Los Angeles, a consumer can't choose some different route because the prices went up. So you're looking route to route much more narrowly and in route to route. This is a different kind of merger than the way you'd look at it nationally.
Hey, George, how important is this merger for either of these companies if it doesn't happen?
I don't know, right. I guess we'll see, right because right now both these up. But he's are losing money, so clearly, I think the fares that gen is concerned about,
they aren't enough to support even profitability. And I think that the Jet Blue CEO is going to have to figure out soon how bad he really wants to spirit airlines, because he's gonna have to raise three and a half four billion dollars to buy it at interest rates that are probably going to be above eight percent, and again in a marketplace that looks like it has too much capacity and fares can't support profitability.
Hang on, I assumed that Jet Blue had that money stashed aside already, aren't they No, I.
Don't see it's I don't see it's dashing.
Okay.
The other thing I find it they may not need it, George.
The other thing I wonder about is, you know Jet Blue yesterday George said there's basically a dearth of travelers, or said differently, in the airline industry, there are way too many empty seats in the domestic US. But then somebody tweeted at me the TSA checkpoint travel numbers and
looks pretty pretty healthy to me. I mean, we're last week we had two point three million, the week before that two point five million, much better than we had in twenty twenty two or twenty twenty one or twenty twenty. It's it's basically up there with twenty nineteen.
So I would say, you can't always judge airline health by numbers.
Right.
So in the new world of airline revenue management, you know load factors, we're seeing eighty five ninety percent, right, These are really high load factors. Those revenue managers, they don't let an airplane go down the runway without it being almost full The secret, though, is you got to get people to pay the price that's going to cover
the cost of the airline. And what we're seeing right now in the marketplace is that the low end is that you know, that consumer that may not be as well healed, they they're seeing softness and their fares are going down. We saw yield at Jeff Blue fall a thirteen percent since the year prior, right, So that's not I mean, that's not a healthy environment.
So Jen, when does his trial start? You're going to go to this trial. You're going to attend this trial. Where is it, When is it and what do you expect.
So it's in Boston. It started yesterday. I reviewed that transcript from yesterday, which was mostly opening statements. I'm heading out today. I'll be there the rest of this week and next week it will go to December fifth, non consecutive days. I think we'll probably get a decision in January. The judge said he may try to do something by the end of December, but that was when the trial was supposed to start in early October, so I think January is more likely. And I just have to one
comment about what George said. I mean, this judge is concerned actually about the health of the airlines, which is unusual in an anti trust case. He has asked not about Jeff Blue, but actually about Spirit and Spirit survive if this merger doesn't go through. And you know, we're just getting in, but we'll see what the documents look like with back to Spirits growth plans.
Well, it was just looking I mean at George's common I went to the FA function for both.
Spirit Airlines and Jet Blue.
Neither company is making money. What extent historically do the courts think about that kind of stuff?
Well, you know, there's a history here. So we've had a lot of consolidation in the airlines and there's a lot of concern about that from the DOJ, and they're going to be using that to their benefit and trial. But we've also had a lot of bankruptcies, right, and bankruptcies aren't good for consumers either, and the judge is going to be looking at that and thinking about that.
But the bottom line is the most difficult part about this trial for Spirit and Jet Blue is that they themselves, They Spirit have argued that this is an anti competitive deal when they preferred Frontier as a buyer and there was a fight. So these documents have already been admitted by the judge against the objections of the lawyers, and they're going to have to explain those away.
Hey, George, if the judge put you on the stand as an expert witness of you know, Wall Street analysts, would you testify that if these guys don't merge, neither of them is going to make it, or one of them is not going to make it, what would your forecast be?
I guess I would testify that the market clearly appears to be overcapacitized, if that's a word, and that it needs some rationalization, and putting these two together could rationalize that and would improve their potential to create profits. So that's I would argue that.
And I will say that the DJ opened an investigation of the airlines just for saying exactly that, because rationalization in the anti tryst world is a bad thing. It means let's reduce demand to increase prices, and antitrust don't doesn't want that.
Right, So can't they just say, all right, on a couple of these routes where we're going to overlap or we'd have too much pricing power, We'll just divest these routes.
Can't we do that?
That's exactly what they're trying to do. And you know what, the judge might accept that. You know, it's it's this is just the beginning of trial. It's not a done deal. The judge might say, these divestriss are good enough. You go ahead, merge, that's the healthier option. The issue is that DJ is also concerned about routes where they do not overlap, because they believe that blues fares are higher than spirits fares in those routes and it'll take out that lower cost option.
I mean, none of this is low cost compared to what I experienced living in Germany for the past six years.
You can point for.
Ninety dollars, yes, and somehow that just keeps going. You know, that's been happening for at least a decade, right, low cost airlines in Europe. I don't know states that the that the industry would be good for the industry to have that here? Probably not. But can we get that?
So you're asking me that, yes, George, I mean, look, I think you can. You know, I think that when when you know, we look at a lot of analysis of these ultra low cost carriers and the low cost carriers, and even the full service carriers. When you take all that ancillary cost that they unbundle and try to put back on top of you when you get to the airport and check your bags, blah blah blah, the fares
aren't a lot different than full service carriers. And so I think the whole thing is, you know, it's sometimes it seems a little bit bait and switches, right, because you sign up for like a fifty or seventy dollars fare, and next thing you know, there's all these added costs. And so I think that we can have the industry because they are getting fares that again are probably as
good as some of the big full service carriers. What I will say, though, there's an extraordinary challenge I think in the US, and that is that we just gave away some really large pay increases to the pilots. And what you didn't see under that pilot headline was that everyone else got paying increases to the flight attendants are looking for theirs, but line maintenance, all those folks have gotten increases. That's going to drive up the average cost
of fares, right. And when you drive up the price of something less needs to be consumed, right because because you just can't offer as much. So that's one of the major challenges in the US market right now.
All right, George, thanks so much for joining us. George Ferguson covers the airlines for Bloomberg Intelligence and generally senior legal analysts covering an android trust for Bloomberg Intelligence.
You're listening to the tape Can's our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg eleven thirty.
The story of the day, and that is interest rates, the Federal Reserve, the US Treasury refunding that balance you all that good stuff. Tim Dewey joins is chief US Economists from SGH Macro Advisors. Tim, thanks so much for taking the time here to join us here. What do you expect to hear from our Federal Reserve this afternoon?
I think the Fed's going to sound very much like we've seen in recent comments, particularly in Sairman Paul's speech. Basically they think that they might have to raise rates again, but they're more and more confident they're near the top peak of the cycle.
So I'll ask you the same question I was just asking Tim Fiori. Do you see some kind of cliff here that we're about to fall off? As there some way that we go into recession? You know in Q four, Q one, Q two from five percent Q three.
You know, I would be I would be surprised. Really is the economy and the GDP almost certainly has to slow from the third quarter pace. I mean, it was probably it doesn't really represent the true underlying pace to the economy. However, there's not really a lot of signs out there that the economy is about to roll over hard,
that we're about to walk off the cliff. And so I'm you know, I'm still skeptical we're going to see that sort of in the fourth quarter, because we're already in it, but you know, before the first the second half of the next year. So trying to try to pin down the exact time of a recession is really a very very difficult.
Well, but there seemed to be look drunken. Miller was on stage with Paul Tudor Jones last week. That's an All Star conference already, right, he says, he's he says he started to get really nervous. He says he has massive bullish positions in two year notes leveraged. So he says there's too much risk in the world. And Bill Ackman's saying this similar thing. Bill Gross was saying something similar to these big albeit old names are worried about something.
What is it?
Well, I honestly don't know why. The way the enhancedphere, I mean, there's a good reason to think that you're near you know, you're near peak heels, so, you know, putting aside any worry about you know, the broader economy. You know, we are at a point where the FED is close to being done hiking. The more it looks like that's that's going to happen. Traditionally, long yield eventually
fall after that point. So from from from a strategic perspective, thinking about this as a peage is certainly not not crazy at all. As far as the warning signs. You know, remember a year ago in October, everyone thought the chance of recession in the US economy over the next year was one hundred percent, and that obviously did not work out that way. So the world has changed, the world is different. It is in some sense risk here. Is it any risk yer than it was, you know, during
the Cuban missile crisis? I don't know about that.
So it's interesting, Tim.
We just had Cam Harvey on financial professor at the Fucal School of Business at Duke.
He was really bear.
He thinks the FED has gone way, way too far, and he thinks inflation, if you really look at current data, not historical data, inflation is already below two percent. How do you respond to that?
Well, so I didn't did see the interview. If you if you look at the the recent core PC numbers, it's not below two percent. Yeah, so I think, you know, depending you know what you use as your inflation metric, you probably can find one that's below two percent.
He was taking out housing, he was taking out rent and home ownership. I think so.
Yeah, so you can strip it down and get to something that slow. And you know that this is a feature of the policy, right, is that the Fed intended to raise interest rates until we got interest rates above inflation. They're above inflation. They're waiting for evidence to slow. The economy is slow. You know, they are seeing that evidence, which is why we've been paused since you know, July. Here, I would like you remain paused. Yeah, has the Fed
reached its peak? Have they gone too far? I don't know because one of the one of the counteracting issues here is we've had plenty of fiscal policy to help counteract some of the momentary tightening.
So I guess.
I guess.
The question is if it's higher for longer, how much longer do you think?
So funny thing you usually people will say, you know the Fed is going to cut, you know, roughly six months after the first rate the last rate hike. You know, the last rate hike could have been in July, which means by the time in the December meeting, if they don't hike in December, they'll have got five months without right hike. So you know, the sort of traditional metrics would put you in January in sense, I don't think that that's likely. I don't think they're ready to cut
in July. I think the economy will show enough strength that they don't. I do think that they are. They are determined to be very confident that inflation is on track to two percent before they cut. Really, what we need to see is a little bit more weakness in in in the real economy data.
What are you watching for? Where are you going to see that weakness?
So that's a great question. If you started to see job growth really running below one hundred thousand every month, I think that would be a key, key signal.
I think that which we're not expecting, by the way, on Friday. I mean I'm just looking at expecting them on Friday.
Yet it's just not it's it's not in the cars if you look at so look at say the Jolts report this morning. We're hiring's basically at pre pandemic levels, right, and quits ray was basically pre pandemic levels. Openings was still arguably a little elevated, but not that much different than trend and the fence looking at the saying this is this is a labor market that's more in balance. Right.
You need to see something really trip up investments, spending, trimp mob hire and those are the things that generally are precursors to recession. And you need to get firms much much more pessimistic on the outlook than we're seeing, right, now, so again, where i'd see that is is in the jobs numbers, in the initial claims data. I'd expect to see it more in durable goods orders than we've seen somelf aren't.
Are you surprised by this labor marketing, Tim? I sure am.
I you know, it's just we have such a shock to the system, and people are concerned about the economy, even though again that good three three q GD print that Matt was mentioned, But it just seems like this market is just incredibly strong.
I'm not really sure why.
You know, It's a bunch of factors. I think people estimated just the the you know, the the underlying strength that or the momentum that the economy received from the fiscal stimulus and the low monitory leasing monetary policy. I think that just had bigger lays during the from the from the pandemic era policy. Then people anticipated just too
longer and work some of that through the economy. I think the other thing that's out there is that nobody really expected fiscal policy to be such a driving force this late in the cycle, and we've seen doctors expand uh and and I think that's been a real factor that people discounted last year and is really starting to show up this year. And also, I think fundamentally people
underestimate the resilience of the US economy. You know, we talk a lot more about recessions than we actually have recessions.
All right, Tim, thanks so much for joining us. As always, appreciate getting your thoughts. Tim Dewey, Chief US Economists for s g H Macro Advisors.
You're listening to the tape Can's our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just Hey Alexa, playing Bloomberg eleven.
I'm going to talk to Chris Whalen. He's a shairing of Whaling Global Advisors.
Hey, Chris, I'd love to get your thoughts on what you think the FED should do and why.
Well. I think they should stop hiking FED funds rate before we break something. We're pretty close to that point now, and I think they need to try and articulate to the public and the policy makers what we can expect
going forward. There was a fascinating letter from the mortgage bankers and the home builders and the filters a couple of weeks ago that said, can you give us some guidance because the guidance of feed gave us before about transitory inflation was clearly wrong and a lot of companies use that guidance and planning your business. So I think the FED has to be very careful what they say in the future about inflation and other benchmarks because people sometimes take them at its value.
Well, but they've been saying for a couple of years that they're going to hike rates like we've never seen it before to try and quash inflation. I mean, they've been telling everyone in the market hasn't believed them, you know, for two years.
Well, they've caused a lot of inflation. Though, look at housing. We're not going to take that back easily. We're going to deflate housing percent. No, we're not going to do that because they know that there's a deflationary aspect out there still, and it's called bad debt. You know, when
debts go bad, that's when you get deflation. So I think the FED is you know, as Craig Torreus was saying this morning, they're in risk management mode now because I think they know they can't go any higher without really seriously causing something to break.
In the world of credit, where do you think, by the way, we're going to see debt go bad. We've been talking all morning with people about high yield and no one is concerned. Spread are relatively tight. And the answer they tell us is that all these companies, you know, we're so much smarter than Janet Yellen. They got all their financing under control when rates were zero, and they're in a great situation now.
But it seems hard to believe they're getting the financing done, not necessarily on advantageous terms. They're doing a lot of discount issues, for example, to keep the coupon down. But you issue the bonds at eight now, when the bonds get redeemed, that's gonna hurt. So I think there's a lot of ways people are adjusting to this. But you know, to be honest, you see the carnage now in commercial,
commercial real estate. You know, I think every day you see a headline across in the screen in commercial and what you don't see is the other five events. They're private, and you won't see them until they hit the courts. So believe me, there's a lot of destruction going on right now on the commercial side. And it's it's the opposite of two thousand and eight. It's the way I put it, this is not consumer and you're not seeing it yet in consumer facing vehicles like fintech and that
sort of thing. Yeah, so you know, is this three prices? You'll see more? Yeah?
I want to you know that kind of goes. So you think we'll see it in I guess one of the areas you think we'll see a break will be in commercial real estate.
Is that?
Do I understand that right yet?
Yeah, it's happening now. Okay, look at it this way. Most banks have fifty cents worth of equity in commercial loans, Okay, So that means I'll wipe out the quote unquote owner and then they'll end up boning the asset of fifty cents on the dollar. Now, even then, though they may not be able to sell it, because you know, in a rising great environment, it's hard to sell assets, and it's hard to sell dead banks. Usually when the FDIIC is taking care of dead banks, the Fed's already dropped
interest rate. So there's a kind of a synchronization problem right now. The FED is trying to address inflation, but we still don't have a recession. I mean, whole prices in New York State are still going up. For Christ's sake, were the weakest state in the US before COVID pricing.
So do you expect some big financial names to come under pressure. They're already sitting on hold of maturity portfolios that you know are worth far less than they'd like us to know. And commercial real estate we thought was the next shoe to drop, Now it looks like it's following.
Who's going to get hurt?
It's an earnings problem, Matthew, more than a a you know, systemic problem. I don't think the FED will let it get that far. But the inflationary implications of say another bank failure are huge, because if I can't find another bank to buy the dead bank, I have to liquefy the whole fan, which is why the FED had to lend the FDIC two in a billion dollars. So, you know, I think that if we see another problem in the credit markets of sized, it's going to have to retriat
almost immediately. I think that'd be good for a point on FED funds, because you can't deal with problems of credit unless rates. Aublorady essentially concede. You know what I mean? If people think rates are going up, how do I sell those assets? Even at a discount. FDIIC you will normally give you a thirty percent discount to create new equity under the asset, but even then you might have
a hard time getting buyers in this environment. So the funny part is to your point is there's people creating the buying assets today at really crazy prices because there's cash on the sidelines. There's a huge amount of cash on the sidelines. What they're waiting for is a signal that we're done, a real signal.
Yeah, we're done raising rates, And it seems like the market feels that way right now. The question is what happens with the economy, you know, in Q four in twenty twenty four, and then does the Fed have to cut rates and not by fifty basis points but maybe more.
I think they're going to try and keep rates more or less where they are because they realize that voluntility has not been helpful for a lot of businesses and I think they also realize that housing particularly is going to get absolutely crunched in the next twelve months. We're going to take another third capacity out of the residential mortgage level, and you're also going to see capacity coming
out of commercial too, because there's not much volumes. I sit with the loan production team calling in New York. They're not busy right now. And the reason is is that the buyside investors, who typically are the cash fires for commercial loans hotel loans, I kind of think they're on the sidelines tope. They're trying to figure out where price and where value is today. And most of them have already filled up their allocations for this year, so they're happy to go into the you know, the end
of the year flat. That's not helpful to people who need to do deals. You know what I mean, Well, what is.
It happened, Chris to those markets?
I mean.
Volume.
No one's going to want to sell. No one's going to want to sell a commercial building if they don't have to at a sixty percent haircut. Nobody wants to sell a residential home right because you don't you're not going to remortgage to get someplace else. At eight percent when you're in at three sous.
These different though. You remember commercial for the last seventy five years, the assumption has been that the asset would go up in price and we could just do interest only, and that was very much the style in the commercial real estate business. Now you can't because when the lender comes to you, if the rent roll is down the building, it's worthless. They want equity. You've got to put more cash in to roll the mortgage. That's the difference in
the dynamic today. And as the treasury deficit goes up, guess what the Fed has to hold more cash? And what do they do with that cash? Matthew, they collateralize the treasury box for price sake. It makes no sense.
So it makes sense, he would get that sounds like something ftx S.
Would have done. Well, Listen, they race at rates already, and we're going to make collateral more deal at a time when we're producing nothing on the mortgage side. By the way, we'll do a trillion and a half this year in new coupons, and treasury issuance will be big. But still, you know, and they're going to be buying back low coupon bonds too while we're doing all the rest of this stuff. That's going to be interesting, all.
Right, Chris as always a really interesting the discussion Chris Well and Chairman breaking the whale in Silence, Breaking the whaleen silence, which I've heard Tom say that a million times. I still not one hundred percent.
Sure what it is, but that's a Tom keenism, all right.
Chris Well and Chairman Whale and Global Advisor, Thanks so much for joining us there.
Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three.
And I'm Faull Sweeney.
I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at bloom or Radio. Yeah,