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the Bloomberg Terminal, and the Bloomberg Business app. This is well timed. We are really going to digress from debate chat economics, finance, and you know what, folks were just going to concentrate on yen and on intervention this week. And Derren Meyer is hugely qualified with the Hong Kong and Shanghai Banking Corporation. He's just be seeing and joins us in the studio. Is there a convenient time to
do a unilateral intervention like this? Sunday our time, six seven pm work Monday morning, Japan time.
It's certainly on the list of possibilities. I suspect Friday afternoon is a good one in New York time, as.
We Friday in New York time.
Yeah, it's dinner liquidity, bigger bank falls.
On the sea streak, yep on the deck in Atlanta Highlands. Lise is going to costco let's intervene. Is that how it works?
I think that'll be exactly what Japan's MOF has in mind. They'll be thinking about Costco the look it's ten liquidity and an acchi. I guess. Look, the way we have to think about it is the other way around. Under what conditions might the spot market be racing higher? That will give the MOF cover to come in because at the moment what we have hire is dolly En grinding higher. That isn't a trigger. That isn't a trigger.
You went to one of the toughest schools out there, U see Dublin, Okay, and they taught you intervention. Where in your literature does it say unilateral intervention works. I've never found it.
I've never found it. And I was told by tough Catholic priests, so you know there was harsh lessons there. I would say, I would say it's working. So I'm going to push back on that, I would say it's working because what we have to think about is a counterfactual. Had there not been all this chatter about possible intervention, the actual intervention, where would dollar en be trading right now? I mean, I think it's safe to say a whole lot higher. So you know, it depends how you define success.
And you know, this has been a market where it's very hard to find people who will kind of play the downside dollary en trade. They might talk about it, we do in our forecast three months, six months, and we all end up snow plowing it further into the future as dolly n just keeps grinding higher. And I think that's what the MF and you know and the boj on their behalf are are going to have to step in potentially to try and reintroduce meaningful two way risk.
There is there a barecase for the US dollar anywhere.
It's a narrow path to a weaker dollar. You kind of need that global Goldilock scenario of falling inflation and growth recovering, and you know, you get patches of it, and we've had them a couple of months ago in Europe, and then you get another soft patch in Europe as we've had over the last couple of weeks, and at the end of the day, the US economy, I know this morning, you know, we've had a small revision, but final domestic demands still strong. Atlanta fed GDP now punching
along at three percent for the second quarter. It's the US exceptions that the joke I make as Goldilocks as an American accent, you know, and I think that's true, and so long as that remains true, it's hard to be I think a pervasive seller of the dollar.
All right, we've got some political issues in France in the UK, how does that impact the ural the pounds to it?
Certainly impacted euro I mean you can see that in terms of the relationship with the euro and the French spreads over German buns. That's that's been quite evident. I think we've reached kind of holding point ahead of the first round of the elections in France. The Marks want to see how that plays out, how many of Macron's candidates make it through the second round. So I think
we're kind of in a holding pattern there. UK, do you know, I think I don't think Sterling cares I really don't think Sterling cares, which is my sales team back in the trading for a now, we will be wincing because you know, I've kind of killed a whole trade for the least call clients. But yeah, I think that's the reality.
At the moment, I'm looking at the cacophony of like nineteen ninety two out to nineteen ninety eight as well. Something totally obscure is sing dollars Singapore dollar well versus the Japanese yen soap opera off the pandemic. I have roughly sixty percent appreciation of the Japanese yen versus a vibrant Singapore, And even if I go center tendency back three decades, I'm still talking a massive depreciation. How many toyotas are they buying in Singapore?
Well, apparently not that many Japanese exports are not exactly surging at the moment. Well, I don't know. I can give you one reason. I lived in Singapore in the in the mid nineties, and they add a lot of They add a lot of money to what I cost to import a car into Singapore, So maybe there's different things going on there. It's a weird thing. It's you are seeing the compression of import demand in Japan, which
is to be expected. You are seeing tourists visiting Japan because it is a super place in relative terms.
To me official in a rescue I said, yesterday's Chinese are going to Japan to.
Shut Yeah, and you can see why. The difficulty is you are still trying to export into a weak global economy. So it's fine saying we're price competitive and we're cheaper now than we wear back in the nineties or even six months ago. But if demand isn't there in the quantum you need, then perhaps you can't kill The.
Large question which goes to Hspecies Wheelhouse with huge heritage here is their inflation, their overt inflation experiment. A is it done? And B it does it fail? Is they go back to disinflation and painful deflation.
It doesn't feel that way. It feels as though they have kind of broken the cycle of inflation deflation expectations within Japan, and that's the key. And also I think what's happening on the wages front in Japan will give the boj some degree of comfort that they might have begun to create a virtuous circle between wages and sustaining those inflation expectations. So look, I think we've moved a long way from a really persistent deflation mindset in Japan.
But you know, at the end of the day, it's been helped a lot by this week currency. It adds to Japanese prices, that adds the perception of inflation for everything that you're importing. So the job's not done. But look, it's amazing that we're talking about Japan raising rates when the rest of g Tennis cutting rates. I mean, how many times have we had that conversation, So it's really weird.
Dermier, thank you so much. He's with HSBC. Dana Peterson. Yeah, the last time she was on, she was just lights out on the American consumer. Dana, it's unfair with the data coming out, But what is your model of Q two GDP right now? We had someone on earlier modeling a sprightly two point three percent. Do you agree?
Well, we actually have GDP growth probably between zero and one percent annualized in the second quarter. Now we could revise that up a little bit. It really depends on what we see tomorrow with the personal income and spending data. But consumers are pulling back, and it's a reflection of the fact that excess savings are gone, real incomes are below real spending, and people are levering up and paying a lot of interest on their debt.
Yeah, this is what surveillance is about. We like the difference of opinions. We don't have an opinion, but we're going to listen to those more optimistic and those like Dana Peterson sub one percent exactly.
So Dana, talk to us about the consumer out there. I mean, essentially, the consumer wants a job. He or she has a job, Wages are increasing. How do you see the consumer here today?
It's really mixed. Consumers are saying, yes, I'm working, I like that, my finances are okay. The present situation is fine, but they're still complaining about elevated prices, you know, eggs or eight bucks, bread ten you know. And they're also concerned more concerned about the future, their expectations for the labor Marketer story, you wrote a bit. They're concerned about their incomes. They're also very concerned about business conditions going forward,
and we're seeing this tug of war. It looks like expectations that are weakening or starting to take over a little bit in the numbers.
So where are we going to see that? We are we going to see that in? Where were we going to see weakness in this economy? If it does in fact accelerate to some degree, will it be in the labor market? What we see unemployment kind of inching above four percent?
Oh, we think the unemployment rate could take up to maybe four point two percent, but that's really low, and that's still a pretty good labor market. I think the thing is that consumers if the FED season, consumers are still working, but they pull back on spending and that helps cool inflation. That's a perfect scenario. It's when people start losing jobs. I think that's when the FED gets really worried and might accelerate interest rate cuts.
So do you expect this Fed to sit pat here in the upcoming meetings and maybe wait until maybe even December or maybe even later.
Yes, we think the Fed's going to stay put. Certainly inflation is their biggest issue and it's still sticky. So tomorrow's number again will be really important to see if the easing that we saw in CPI shows up in PCE. We have the FED cutting in November and December, I.
Stand corrected, had egsit ten dollars? No boy, and I said, you gotta be kidding me. Dana Peterson, of course, nailing it. On the research side, the basic hole paycheck eggs are four dollars nineteen cents, and then you work yourself up six, seven, eight dollars. I don't know. The ones I buy are seven dollars twenty nine cents, and there is a dozen eggs for nine dollars ninety nine cents.
Dana Peterson nailed it, nails it cares about exactly, Dana.
Are we substituting? Am I looking at nine dollars ninety nine cent eggs and saying, oh, no, I'm not going to do it. I'm gonna buy the seven dollars twenty nine cent eggs.
Yes, people are definitely trading down. They're buying the store brands, and so we're seeing that with goods and big ticket items they're not purchasing like cars that they are buying a car, they're buying a used one, not a new one. But also with services, they're saying I'm not going to go to the movies, I will stay at home and stream and if I do payper services. It's going to be my health insurance and it's also going to be my car insurance.
So the expectations for inflation, I know that's important for the Federal Reserve. What does your data show about consumers expectations for inflation?
Well, the good news is that our one year inflation expectations gauge continues to take downward. It was very elevated a couple of years ago. It's much better now. Even though consumers are complaining now, they're saying, well, we hope things will be better in the future, and that our wallets will be happy about that.
All right. So at the end of the day here, I mean this Federal Reserve probably going to ease. Is that gonna be enough for this US economy? Does this US economy need more rate cuts faster? Or do you think this economy can kind of hang in there and that soft landing can continue.
I think the economy can hang in there. Again, the key is people working. Long as people have some income coming in and they can still pay for the basics, then that's a good economy. People may not feel that way because people like to have excess and they like to be able to spend but from the Fed's point of point of view, a healthy labor market is important. But more importantly, they need to get inflation down because everyone feels inflation.
At least I'm to tell you. Can you get eggsit Costcote's.
Only place you want to get them?
Okay, Really, what's what's a dozen.
Outsc No, you don't get a dozen, You get the tune dozen, like the double whammy pack.
Yes, so, so, Dana Peterson, is a double wham consumption in America because people are totally strapped. I mean we are.
Yes, that's definitely what we're seeing in the data and what we're hearing from the writings from consumers. But again, the economy probably was a little bit overheated last year, and the thing is that we're seeing this cooling and
that's necessar for inflation to get lower. But again, their key elements of inflation that the FED is kind of losing the war on, certainly when it comes to insurance costs and even wages, and that's a reflection of tightness in the labor market and labor shorages, and that's feeding through to inflation.
Dana, you got to talk to Lisa Mattel, you know, as you do your wonderful research for the conference board. Joining us now. The only person I want to talk to on this day, Wendy Schiller, is definitive, whatever your politics at Brown University, on all that we're observing here, Wendy, I'm just going to frame the ages for you. Nixon and JFK were something like forty two, forty three, and
forty seven. At the nineteen sixty debate. I went back and I looked, and Woodrow Wilson with a deceased wife in the White House would have been something like sixty three sixty four, it had debate if it had happened in nine teen sixteen, And tonight we have a seventy eight year old and an eighty one year old debating this is just flat out historic. How do you frame the age issue around what we will see tonight at nine pm?
Well, I mean, I think it's an interesting thing for all of americ to watch. I mean, on the one hand, you can feel pretty happy about life expectancy in America and functionality.
I mean, forty years ago, Ronald.
Reagan was you know, pretty old by most standards when he assumed the presidency.
So it's not as if we haven't seen this before.
And if you think, well, we're in better shape than we were forty years ago, you know, why not somebody in their mid seventies. But we're not even in the mid seventies. We're at, you know, seventy eight and eighty one. So I think, you know it's up there, and I'm curious at nine o'clock.
At night for ninety minutes. You know, who could function well.
Under those circumstances, either in your forties or or your seventies.
That's going to be interesting thing.
But we know these candidate and we know their frailties and their flaws, and we know their strengths. You know, you've got to figure Trump will look more energetic and more vibrant because that's just the way he rolls. And Biden's going to have to do everything he can, I think, to keep up with that kind of energy.
Wendy, who do you think has more to lose tonight?
Paul, I definitely think Biden.
President Biden has more to lose tonight. You know, we have seen these polls tightened. You know, let's go back to January December. Even in swing states. Now Trump's ahead, but by less and you know the national polls. There's three major national polls this week. They all have them within the Cisco margin of error. They're all tied, essentially, So the person who has the most to lose is the incommon president who's been catching up slowly but surely
to Donald Trump. And sort of people are saying, well, maybe Biden won't be that bad, maybe he's in better shape than we think. But if he stumbles badly tonight, I think that's going to bring those levels of concern about his age back into the mix, and I think it could cost him.
Wendy, what do you think about the debate parameters here tonight in terms of no audience, muting the other candidates, Mike, what's that all about?
Actually, both to my previous point, I think muting the mic helps Biden more than it helps Trump because Trump's off.
The cup remarks.
Really, you know that his audience loves that. In other words, you know, his base loves that. You know, most Democrats cringe when Biden goes off off remarks, you know, off script. So those sort of miked comments I think by Biden could get him in more trouble than Trump. So this is a good thing for Biden. The studio audience, I think is a shame. I mean, it's America.
We have elections regularly.
Scheduled, constitutionally mandated elections, and part of that process is audience input voter input. So it's unfortunate that the audience won't be allowed to be in the studio with the candidate.
What is your guest, Professor Schiller, of the topic that will cause both candidates to pause?
Well, I think Biden is going to really I mean, the strategy has got to be make Trump lose it, you know, in a way that you know Trump can lose it, but really lose it and really scare those independents who have stayed away from Trump and Trump backed candidates. We've even seen that this week in Republican primaries. Trump candidates did not do so well in their house races. So really scare people about the prospect of Donald Trump. And Trump has to get Biden to stumble, stumble stumble.
The border border border, I think it's really going even things are better at the border since the executive order a couple of weeks ago, but still, you know, Trump's gotta get under Biden's skin and vice versa.
My guess is a complete amateur. I defer to David gerge Oman thep caia lines, the wull border thing. Is that going to be what's a tinder box?
Yeah? Absolutely, yes, Wendy, Why are we having this debate so early in the campaign cycle season.
I think it was a moment of opportunity for each candidate to before the conventions, to go into the summer with some momentum. Right, as we just said, they're tied, right, Biden has slow momentum catching up to Trump, but they're.
Tied, so this could be breakout.
Right, Trump seems more reasonable, let's say tonight and independence come back to him.
Biden seems stronger, more vibrant than people thought.
Then he gets some momentum swaying going before the conventions, not after, and I think that is a big thing for both candidates.
And now we Segiwy for one final question with Wendy Schiller. We can do this, folks, Lisa Matteo, Wendy featured a Wall Street Journal article on the rise of Hispanic America. What will be the impact of Hispanic America on November fifth.
Well, Lisa, that's a great thing to look at.
We have this conversation every four years at least for the last decade, how the Latino vote Hispanic vote will make the difference. Forty eight percent turnout of registered Hispanic votes stays pretty much the same in the last three presidential cycles. I'm not thinking that's changing much, except if Trump, let's say, picks Mark or Rubio who's of Cuban descent.
Latinos are not monolithic.
Doesn't mean every Latino vote for and Rubio, but it certainly is a very significant sign by the Republican Party. They're going after Latino votes in a much stronger way than ever before. So maybe we see a difference, but we have not seen the condo of surgeon turn out in the last three presidential.
Life sort of go yeah, Wenny, the age of the Hispanic population, they also skew younger. How is that going to be in relation to how they react to it. Are they looking for that younger voter?
Yeah, Lisa, that's a really good point because, especially in the last ten to fifteen years, those younger voters now can vote right. So we've always had a young Dish population, but now we've got younger voters, and the question is things like abortion, reproductive services, Latinos tend to be more Catholic, tend to be.
More conservative on abortion and other social issues.
However, younger Latinos in some segments of the Latino population are strong supporters of the right to abortion. So that's going to be a big issue. And that's where Biden can get Trump. Can he get Trump to commit to not enforcing a ban, in other words, not deny contraception.
Can he get them on.
The record, and can you go after a portion in the Republicans. That's going to be a big thing for even young Latino voters.
Wendy Schiller thrilled. Will being honored to have you on tomorrow if we can figure out your schedule. Wendy Schiller at Brown University. Her Civics textbooks are Her Civics textbooks are definitive. The Lisa Matteo's show, the front page is Lisa, what do you have?
Okay? The latest Census Bureau stats came out, so I want to point out something the growing number of Hispanics. This is what stood out to the Wall Street Journal. They have this great breakdown of it US. Hispanic population grew by one point one to six million to more than sixty five million in the recently estimated year, so that accounts for about seventy percent of overall population growth in that period. Now, about one third of that gain it was due to migrants entering the US. The rest
came from Hispanic birth's out numbering deaths. But what stands out is that that growth help offset the shrinking non Hispanic population, especially places like Philadelphia. Milwaukee was another one sawt Lake City, Louisville, Kentucky, parts several counties in Florida, and the breakdown. The biggest part of that was Mexicans and then the Venezuelan population is growing the fastest.
Yeah, that was a terrific article and it really harkens the changes I remember pushing twenty years ago. Somebody said two thy forty five is a tip point demographically for America. I think it's pulled in and you're going to hear it in tonight's debate.
I'll tell you what about thirty years ago. I was part of a group that took Univision Television public here in the United States. The demographics you just mentioned were the exact same demographics we talked about thirty years ago, exactly.
Okay, it's just trends in place and it's all it's a really really thorough article that was by the journal.
Was yes, by the Wall Street Journals.
Seventeen percent of the US population is Hispanic eighteen percent something like that.
Yeah, and it goes right to too nice to debate.
Next exactly most definitely, congestion pricing have to talk about.
They're going to talk about that.
They will. But now the MTA is saying, because of halting it, you know, the congestion pricing plan, they're saying, it's going to have to cut capital. It's capital plan sixteen point five billion dollars in subway upgrades, that's what they're pointing to. How that breaks down. They plan to make subway stations more accessible, to write it with disabilities. Now they can't do that. Repairs to infrastructure that's like
a century old. You have the expansion of the Second Avenue subway line could be affected, and also other projects as well. So they're saying, because this was paused, now you have where are we going to get the money to do all these things?
Has anybody's seen a body count of how many a jobs are lost or how many jobs won't be formed because of this decision? To me, it's a big number. I don't know what the number is.
Yeah, well yesterday we did that story with that one group saying that about I was hundred thousand jobs. Yeah, yeah, out of lot.
Knowre's where those numbers come from. I mean, yeah, if you're for the MTA, they've they've got to figure out a way here to a balance the budget and b find some capital to continue to put up the maintenance capexcept nothing else.
I don't know. I have no pearls of wisdom. I don't know no other than folks. When you go up the roads here, you know, when I leave the building, like at five point thirty, you know there's those big cameras that John Tucker talks about.
Who's span for those?
They're dark?
Yep, there's no other way to put it. Next.
All right, we talked about Amazon the two trillion dollar market valuation, right, but some new data is showing that more people are watching Amazon Prime Video. Okay, this is an evercore is SI study. It did it of Amazon users. So Amazon's Prime video engagement eighty percent, fifty percent polled said they're watching more than before. Sports is helping a big thing, they said. Fifty eight percent of Prime members
watch at least part of that. You know, they had the NFL Thursday Night Football, But they said why it's important is because it's helping keep people paying the one hundred and thirty nine dollars a year for Amazon Prime.
Is that how much Amazon price it is?
It is?
It asked me, I would have said ninety nine dollars.
No, it's like forty higher than that. It's crazy. And so because they get the people who want the Prime, they get more people to to buy on Amazon because they're getting competition from places like Timu and and all that other kind of stuff. But it also shows that Amazon has this big opportunity which Paul was talking about in advertising. So it shows the potentially.
This brilliant yesterday for folks. One of the reasons to be part of Bloomberg Podcasts is you get to see everything on Bloomberg Radio, including extensive comments from mister Weezer about this. My amateur take is Prime Video's got a new spirit, It's got a new energy because they're not apologizing about ads. They show ads all the rest are tiptowing around, as Brian alluded to it.
And they have the original movies. I mean, they have a lot of movies that I watched just for Amazon. I mean, after I watch it, I'm like, why did I watch that? But they do offer the original and they really.
Sad and quite frankly, if they ever really wanted to get into this market, I either the entertainment market, they could get in a huge way. I mean, I think Amazon Prime is good, it's fine, and you know, it's a great it's a good streaming church. But if they ever wanted to really get into it, they could.
Next all right, we're talking about pebbling and if you do this with your children, it's a new trend if you think about it. This was in Parents magazine.
It's great because pebbling is used to do what is pebbling.
Pebbling is kind of used to describe a courding, like in a relationship, when you're kind of courting someone. It came actually from penguins and edit article, because they present rocks to each other when they want to court one another. This is the origin of it. But now parents are doing it with their kids. They're courting them with communication.
So how they're doing it. If you're having a tough time talking with your kids, they're texting them funny memes like they're sending them a link to a song that reminds me.
Call those dad jokes.
You can send them dad jokes. Okay, you can put up little post it notes on the mirror your conspiration. Here's the reason.
Do you do this at the matos? Can you see her? Can you see her Saturday morning on the way to Costco. She's in the kitchen screaming in the west wing. If you don't empty the dishwasher, kill you.
They get those text messages too, Yes, please empty the dishwasher. But it's also about sending you know, like if they have a game, you know, like good luck, you're gonna do great. Love you like sending those positive little things to your kids because it actually experts say it sends off this little signal to your brain releases dopamines. Okay, so there's some some signs.
This new contract. We have to do this garbage? Is that what the sensit of? Lisa?
I love it because tough Lisa. No junk food in my household.
That's the like, that's.
The one too. But nowadays parents have a tough time talking to their kids so because of technology, So this is one way for them to kind of break the ice so that you become cool again.
Maybe do you put post it notes on their mirrors?
I did like twice.
Maybe can I just say I can't get to afterthoughts mirrors because there's so much Sephora investment. That is true, that is true. Do we get this five days a week from you? Yes?
You are have the pleasure of getting this.
Is sponsored coming on, I'm going to get this sponsored.
This I'm telling you.
I bet people are talking on the chat about pebbling if they do it with their kids.
I'm telling you it's going to be a thing.
I guess. Lisa Matello, thank you so much for the newspapers. This is a Bloomberg Surveillance podcast, bringing you the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in
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