Bloomberg Audio Studios, Podcasts, radio news.
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and am Marie Hordern. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business App.
Jason Thomas of Carlisle writing the job displacement, productivity gains, and agentic economy expected to up end our world have yet to materialize. The current AI related capex already accounts for more than one third of the second quarter twenty twenty five US economic growth. Jason joins us Now, Jason, always wonderful to speak with you. Thank you for being with us, And to me, this is the big question that so many people have estimated for twenty twenty five.
How much are we actually seeing that AI tailwind come into practical effect versus still remain a promise?
Well, I think it's again it's It's interesting because when you think of AI, when you discuss AI, it's almost exclusively about the future and what it means, and then I think distracts from the present. Just how important all this spending is stacks, servers, GPUs, physical construction, and of course electricity related energy needs related applications. And this year have four companies now that are intending to spend over three hundred billion dollars. This year about six are spending
over four hundred billion. This is went from something that is market significant, stock market significant, to something that is now GDP significant and also I think underappreciated. It's also increasingly significant for bond markets because you know, if we look at decade ago, these large companies, they were largely virtual companies. Prior to the pandemic, this class of businesses only about twenty percent of their book value was property,
plant and equipment. Most of it was really just cash security holdings. Now property plant equipment ACCUNTS for over seventy percent of their book value. There's an industrial feel to some of these businesses as they ramp up their capital spending and that huge surpluses that they used to generate the providing liquidity to the rest of the economy is now being rolled in capital spending Ai.
So Jason, just to sort of bleed through into the market. What you're saying the industrial revolution that so many people say is taking place, are you saying that is a physical world sucking capital out of financial markets, in particularly the bond market, leading to higher yields.
Exactly.
Again, what's so interesting, I think is that these companies have really exercised an option to change strategy. In the past, it was typical to generate one hundred billion dollars of cash from operations, reinvest maybe twelve to fifteen billion, and then that free cash flow would of course lead to a massive war chest on the balance sheet, or it
would fund huge share repurchase programs or special dividends. Today that revenue is being diverted to capex, and so this raises really interesting questions such as the cash generation potential. We saw in Alphabet's earnings a big divergence between net income and free cash flow. It also raises industrial error questions about capacityilization, and also what is the economic rate
at which this new capital depreciates? You know, is there functional obsolescence where you're investing at the frontier of new technology, how quickly does it arrive? So these are again very interesting questions. But from the bond market perspective, when you look at the cumulative cash flow surplus of the corporate sector this cycle, it's down seventy five percent from where it was a decade ago. So the last cycle, there's a question, very large deficits. Why was it so easy
for the FED to fund itself? Well, of course QE is a simple answer, but I think behind that you also had again this enormous corporate savings glut. Some of that was cyclical, the scars from the GFC, but a lot of it was that most of the growth in earnings and revenues were attributed to again these virtual businesses, businesses that could grow revenue without incremental hiring, incremental investment, and they've changed strategy.
So Jason, it's some serious tailwinds and changes we're talking about, But as you underscored, it's only a handful of companies, it's only for maybe six companies hyper scalers that are leading this charge. Is there a concentration risk in this that these trends are being driven by a small cohort that for now are being rewarded by markets for spending. What happens if that changes. Yes, of course there's concentration risks.
There's concentration risk in the stock market, there's concentration risk in the economy again, as capital spending and GDP become more dependent on these continued outlays.
And I think that that.
People talk about the mag seven of course, and it's the share I think, you know, fifteen percent of global stock market capitalization, almost a third of the S and P five hundred market capitalization. But I think that what's more concerning to me, at least, is that these are not a diversified set of businesses operating in you know, completely different sectors with completely different strategies. They're all basically
pursuing the same end goal at the moment. There's some variation, of course, but in general, it's a concentrated bet on the same AI future, and you know, everyone has to hope that ultimately it pays off, because again it's not just of significance for the stock market or investors in these companies, but again it has very significant spillovers on the rest of the economy today as well.
Well.
Some of those spillovers Jason, which has been widely talked about, is what it does to this labor market, and there it's unclear what's really showing up. You see it in some of the Earnings Service now, the management platform tool, the CEO they're saying yesterday, we're slowing down the hiring and jobs that are quite frankly soul crushing, which I think is maybe a nice way to describe replacing people's jobs with Ai Jason. Is it showing up anywhere?
I think that most of the change in the labor market that we observed in twenty twenty five was related to tariffs, just just the shock, the uncertainty, and I think what was so interesting about that was CEOs really not panicking after April second. I think there was this intention to project a sense of normalcy, to look at competitors and see if there are any missteps, if they could take market share, And part of that had been, yes,
perhaps slowing the pace of hiring. But it was just interesting when we look through our portfolio that they're really not much for reduction in open but unfilled positions. There really wasn't the pullback that I think many people expected. So so the labor market is held up reasonably well, and of course on the other side of that, you
have inflation that continues. You know, if you look at core PCE over the last twelve months, still probably two and a half two point six percent, So you know, it is this interesting moment where I think that inflation's a bit stickier. I mean, of course, some people look at the last eight to ten weeks and tell me
inflation is only up by one percent annualized rate. But you know, of course there's not that many prices in our economy that reset that regularly, you know, whether they're fixed or contractual term or you know, just other frictions. So you know, it's a twelve month inflation benchmark and this it's still elevated. So you know, next week, I think is a time when when the FED is very reasonably going to take rate study.
Jason, you're making an argument for why stocks can outperform and bonds cannot, the idea that the promise of the future and all of this investment and the profitability is much more attractive than credit markets. That people say, or I would say, government bond markets credit markets might be slightly different.
Is that accurate?
Is that kind of the way you think of the world right now.
There is of course the convex upside of earnings, of the potential of AI, and that is what equity markets are ultimately betting on. Whether that materializes or not is a separate question, but there is that upside there, and I think also just the potential for inflation. When you have businesses that can increase prices proportional to the overall increase in the price level, that also provides an inflation hedge when you're investing in businesses, you know, the fixed
income markets. That's a different story right now. If you look at the size of the US fiscal deficit, it's consuming about forty percent of the savings of the private sector, that is, the savings of the household sector plus the free cash flow of the corporate sector. This is up about fifty percent from where it was in the past cycle two thousand and nine to twenty nineteen. So this is just enormous funding needs, and I think that people
have to be concerned about the potential to be inflated away. Eventually, the Treasury may try to turn out more of its dead issuance. And what is the market clearing price when the share of federal funding actually moves in the direction of ten year notes thirty year bonds. So I think certainly a lot of questions there, and I think the other big concern bonds historically have hedged equity market risk.
That was the experience really since two thousand. What we've seen since the FED started hiking rates in two thousand and two is that stock and bond returns have been positively correlated. Those treasury holdings that you thought were protecting you that would rise predictably when stocks sell off, are actually selling off at the same time. And we saw that, of course in April, which many people attribute to the decision to suspend the initial Liberation Day tariff schedule.
Jason Thomas of Carlisle, thank you so much. Francisco Blanche of Bank of America. Writing this, we project Brent and WTI to average sixty seven and sixty four dollars a barill, respectively in twenty twenty five. Francisco joins US now, and I guess that you could ask why our price is not lower considering all of the supply that we see coming out of the Middle East and this push for drill baby drill in the United States.
Thanks for having Melissa once again.
Yeah, you know it's funny, right, So you know, weaker little are we're getting slightly littlewer oil, potentially lower rates the whole point.
Right.
That's so it's all going according to pine. I do think one of the issues that has been supporting oil has been the seasonal strength of the summer months. But as we go into the second half of the year, we are going to likely see lower prices, and that's because inventories are most likely to build outside the China. I remember in the second quarter we had a surplus, but ninety percent of those barrels were stored in Chinese
strategic reserves. And can you blame them after all the volativity we've seen in the Middle.
East, Russia, Ukraine.
So the Chinese are acutely aware of the geopolitics and the fact that they're the biggest oil important in the world, so twelve million barrels a day, so they have a huge exposure. Whether it's the Strait of.
Hormones or Malacca.
They're still really heavily on oil despite all the electric vehicles that they keep pushing into their market. So I think that's that's been part of the story. My sense, they'll they'll keep building inventories, but they're almost they almost have forty percent of all oil stocks globally at.
This point, crude oil stocks, that is right.
So I do think second half of the year, the surple is going to be close to two hundred million barrels, and eventually we're going to spill out from Chinese inventories into the Atlantic Basin, into into the US and Europe, and that's what's going to allow prices to come off. How much are we going to come off will depend on how much Open Plus keeps pushing barrels out, because we've seen the recount in the US is already coming down.
It's down fifteen percent.
So my sensus that we'll see lower prices, but not necessarily prices crashing given.
The geopolitics and given this supply demand dynamics that we're just talking about. How divorced is the price of oil from an economic cycle that seems to hinge on a new industrial revolution that ten years ago would have included a huge use of oil.
Yeah, this is a very very good point. And when you think about the energy demand we're seeing today, it's in some places in the US it's astronomical. I mean Texan powery Man is up five point five percent year and year. I mean, you can barely find an emerging market that's going at that's pace, right, And it's just
this is like insane. So I think if you if you look at the next the next few months, the majority of the demand and probably next two three years, the majority of nine for energy is going to be still renewals. Also natural gas, which is what makes us relatively constructive on Henry Hub and even into the summer on TTF European gas. But for oil, it's not going to touch it immediately. It's gonna take a little longer.
I'm not even sure, you know. Oil is the transportation fuel for the most parts, so it's kind of left by the wayside in this in this AI revolution for more energy at this stage.
Maybe later on it may not, but for now it.
Is talk about that later on point what could it eventually look like?
Well, I mean, I think if you look five years out, the demand growth threies we're saying for energy, they're going to be pretty hard to meet.
And remember how we've evolved.
Two years ago, the big tech companies were looking for clean sources of power. They're like, oh, we just want to use super clean power, and then you know, renewals and this net and then they said, well maybe renewals and nuclear and now it's like renewals nuclear gas, like, oh, just give me any power you can find, because we really need a lot of power we need. So there's talks about building ten fifteen gigs of power in Pennsylvania. There's you know, you have the easterner Boarder is going
to need a lot of power. Texas already growing beyond belief, and even older parts of the US where you have this data center's Pacific Northwest, you're gonna have a lot of world So and then eventually Europe as well, and the US has a capacity problem. The US needs to build those power plants Europe because it's destroyed the energy consumption in the last couple of years a result of
Russia Ukraine. Actually it does have the capacity. So there's going to be an interesting balancing act in the next two three years for power too, which is on.
That point we finally have a ban on Russian imports coming into effect for Europe, and Totel Energy is one of the biggest energy players in Europe, was saying, look, we have a tightening diesel market because of this how played out is this is there going to be more stress and tension in the market and tightening of supplies as the band really starts to come into force.
There could be, certainly, and you also have to ask yourself, Okay, so there's this ban on that secondary resell issues. Of course, Europe doesn't want to buy diesel that has come from originally Russian crude oil, which as we know, is going mostly into India but also into China. Right So Europe's been buying oil from refiners that actually do purchase Russian
crude and that's been one of the issues. But Europe still purchases fifteen percent of its gas directly from Russia, right so, and that's that goes from Belgium and France and Spain and Italy and does it make its way into Germany too. So Europe is trying to really cut its dependency on Russia. But it's a tough thing to do because again, only three years ago or a half years ago, fifty percent of European energy, oil, gas and
coal came from Russia. So they're trying to do it progressively and in the process is not being helping European industry. But that's kind of I guess part of the price that Europe is ready to pay.
Francisco.
Before I let you go, I'd love a comment on oil and gold. Excuse me, the solid gold, the solid oil that we've seen in terms of just how people are treating it. We've seen prices double since twenty twenty two to more than three thousand dollars in allens, and I just wonder how much higher you see it going as you hear an increasing amount of people point this out as the haven asset as the real questions around via currency.
Right, So we have to be clear.
Just like we are bearish on oil and we're constructive on gas because of the power story we are, we are bullish on gold as well. We think gold is eventually going to get around four thousand or the next Prounce over the next twelve months. Having said that gold
needs more investor demand. The story has been mainly a central bank story, and of course you know there was a nice tour estera of the FED building that we saw that, right, So the pressure is on for the Fed to cut rates, and obviously people are going to question independence and one of the beneficiaries of that questioning is going to be the goal market, right, So to what extent this you know, this pressure builds on the FED political pressure. I think that's what will ultimately trigger
a higher price for gold. But remember jewelry demands for gold is down twenty percent year on year. So so the real beneficiaries a year to date of the gold upside pressure have been the other metals, the other precious metals like silver and platinum and palladium. So so gold this is doing well. It's still picking up a mentune, but it's already a twenty plus trillion dollar market. Right, there's twenty plus trillion dollars worth of gold out there.
I remember, US treasure isn't handled public twenty trillion or so, right in the US public. Now you have the foreigners, which on another nine nine trillion. But Goal's gotten very big, and to get another leg up you need lower rates when this happens, and pretty much those lower rates come on the back of political pressure, I think will get another another light wind.
All I can say is we saw a tour of the FED. I would have loved to see a tour of Fort Knox.
That's all I can say.
That's where they should meet next time and Trump at four.
I would like to see that tour Francisco lunch. Thank you, Gregor, thank you so much.
I'm great to see you as always.
Great dayco of Ey writing this economic activity is decelerating even as inflationary pressures are re emerging. This tension is likely to persist through the summer. Greg joins us now and Greg, we just had a lineup of people all saying that the economy is going strong. People are just deciding which fast casual restaurant to go to, and there definitely does not seem to be the same kind of inflationary pressure that many people thought would be the case.
Why are you maintaining this idea of a stagflationary push that just hasn't shown up in the data yet.
Well, I think it hasn't shown up in the superficial data.
But if you lift the hood, you're.
Going to see the signs of this diflationary move. If you look at the recent developments in terms of inflation, we estimate that about a third to a fourth of the push in inflation in the month of June was actually coming from tariff induced price pressure. So it's there
it's slowly starting to emerge. And I've written in the past about the fact that it's not that we're not seeing the tariff pressures, it's that they're taking some time to filter through because businesses have been managing inventories, because they've been using bonded warehouses and foreign trade zones, because the effective teriff frate is not quite yet at the average teriff frate, and there is a gap between those two.
All these measures are delaying the inflation pass through. But make no mistake, it is materializing, and it will affect us with more and more pressure over the course of the summer, which will feed into how consumers spend.
And we're seeing these signs.
Of pressures on the consumer already. If you look at retail sales, the categories that were most affected by the tariffs are the ones that are suffering the most.
So what happens then if we feel the real effects later this year and early next year, at the same time we're starting to get fed cuts and you're starting to see the one big beautiful bill some the stimulus through from that, well, I.
Think it's important to distinguish all of the different details that are affecting the economy. There are a lot of cross currents which make for this very confusing economic picture, but the reality is that the economy is decelerating. If you look at the labor market momentum, it is actually decelerating, Slower job growth, more concentration of job growth in a few sectors. We are seeing continuing claims for unemployment that are rising, even though after the hump we saw initial
claims come back down. We're seeing the hiring rate at a ten year low. All of these factors are factors.
That drive income growth.
The key pillar to consumer spending activity, and that is way to the downside. So that's going to be a constraint for consumer spending as we navigate through the second half of the year at the same time as inflation pressures are ramping up. And about that biscal bill that is not going to provide a lot of stimulus in terms of the US economy. The major thing the One Big Beautiful does is prevent the expiry of a number of tax provisions from the Tax Cuts and Jobs Act.
That prevents a drag on the economy of one percent, but the actual net boost to the economy we calculate will be around zero point two zero point three percentage points of GDP, not a big benefit for the cost of that pill.
Well, the other factor to put into this too is also what we might see in terms of a supply shock to a supply shock in the labor market, going from something like four million people coming into the USA year, a lot of them working age men, going to something like just a few hundred thousand per year. Have we started to see the effects and what will the effects be going forward.
I think that's a much underdiscussed topic, the immigration topic, because we are in an environment where increasingly.
Economic activity is driven by supply side factors.
Whereas before COVID it was all about demand side factors, now it's increasingly about supply side factors.
It's the supply of labor, it's the.
Supply of capital, it's a supply of energy, it's trade in logistics. And when it comes to immigration, you're absolutely right. It's been a key driver of economic activity. If we start to see less immigration, that is going to do a couple of things. One will weigh directly on spending because people there are fewer people that are spending less in part because they're fearful. And two, it drives lower supply, lower labor supply, which weighs on employment growth, which weighs on your economy's.
Potential to grow.
Combined, all of these representative drag of about zero point three zero point four percentage points over the next year. That's more than the one big beautiful bill that we were just discussing.
It's one reason why people are looking at this miss on capital goods orders that include non defense aircraft as being particularly notable. Stay close Greg for one second, Mike McKee, you've got some more details on what exactly was behind that.
It is sometimes fairly easy to figure out durable goods orders. When you have these big swings, it's usually Boeing. They reported a decline of fifty one point eight percent in new orders for the month of June Boeing and some of the smaller little private plane makers, and that compares with a two hundred and thirty one percent arise in the month before in May.
So you can see why we get these big swings.
Unless you're Danny Berger, you're not buying a new Boeing jet every month. We also saw a decline in manufacturing orders of twelve point eight percent. That's something that FED will keep an eye on along with computers and communications equipment. They both were down on the month, and this may signal that business is sitting on its hands. One last note, capal good shipments were up four tenths after a five tenths rise the month before, and that was double what
was anticipated. So maybe we have a little more strength in the second quarter the rebound from all those imports, etc.
That we saw in the first quarter.
Those numbers will feed into better than expected perhaps second quarter GDP, which we get on Wednesday when the FED is making its decision.
Thank you so much, Michael McKee and Danny Berger is here to tell us all about your selection of Boeing Jetsike you have put on yeah radar.
Apparently every month I'm buying a new Boeing jet. You all are welcome to join. I guess I don't know where we're going with an entire jet, but.
Yeah, but you know, what Michael was talking about is actually really important. And this idea that we've heard about so much this morning, which is that it used to be just investment in assets and liquidity heavy kinds of corporate investment. Now we're talking about real physical investment in
this whole industrial revolution. At what point do you see that really offering a boost to both productivity as well as growth that hasn't been accounted for in so many of the more pessimistic outlooks for the US economy.
Well, I've been an optimistic on the productivity front, despite the fact that I'm quite reserved in terms of the short term cyclical outlook. I've been very optimistic about the exceptionalism that we were seeing going into twenty twenty five because it was driven by strong productivity growth that was coming from the bottom up. It wasn't yet the AI lift that we're all talking about. It was actually businesses being more efficient with a talent on hand that costs
more in today's environment, ensuring longer tenure. Better trained employees are better able to contribute to economic activity. And it was this focus on investing in the infrastructure that will support AI that is often undercounted. And then on top of that, you have a desire to push more industrial policy and focus on driving more manufacturing investment.
It won't bring back the jobs, but it will bring.
Back more economic activity and more potential supply that is right now undercounted, but it is still one of the key pillars of economic activity driving that stronger productivity momentum.
Does that mean, for all the fears of growth slowing and inflation picking up, that it's not quite stagflation because you have some of these forces, it would moderate the worst case scenario.
Well, I think economic activity is a flow notion, right, and so we are still benefiting from a very robust economy. As I was saying, up until the start of twenty twenty five, we had an economy that had been growing at a three percent pace with disinflation. Inflation was moving lower, so we had the best of both worlds. We had essentially strong productivity growth supporting a very strong economy and
disinflationary currents. We're gradually moving to the opposite of that, a stagflationary environment where economic activity is lowing and inflation is accelerating, and that becomes a headache for policy makers around the world, but including the FED, which has to balance these divergence pressures in terms of the employment mandate and the inflation mandate.
Considering the pressure from the White House. Inevitably, especially next year when we have a FED chair appointed by President Trump, does this just turn into a FED that puts more weight on the growth side of the mandate even if inflation is still picking up.
No, I think the Fed will have to pay attention to both sides of the mandate.
That is what it's supposed to do.
But it has to determine whether the pressures from tariffs are one off pressures, which is the argument that Governor
Waller has been making. It's the argument that I've been making for a while now that essentially this tariff induced inflation is going to be a temporary one, that we are still seeing significant this inflationary currens, in particular from the shelter side of the economy, that inflation expectations are still well anchored, and that we're not necessarily going to see and round effects because the labor market is softening and you're not going to see the types of pressure
that we saw during COVID. With wage inflation accelerating, in my opinion, that opens the window for the Fed to neutralize monetary policy from a slightly restrictive stance to a more neutral stance with some easing over the course of the next few months.
Greg Daco of EU, I thank you so much. Vishall Conduja of Morgan Stanley writing this, given the tariff revenue collections, we believe that the next two inflation prints will be reflective of the tariff contribution. We shall joins us now and I am curious about whether this is going to be a one time price shock or whether this is going to have longer legs, and how much we've really gotten clarity versus just people's expectation that this will be just a one time adjustment.
Budding Liza, Definitely, in principle it should be a one time adjustment. Again tariffs. There are only three spots that we can see the effects. Either the exporters seated up, either companies through their profit margins. We heard a couple of those in the earnings more on the order side and the OEM side showing up with one time charges there, or it trickles through PPI and CPI.
Here in economic data.
We saw a little bit of all of that, less of exporters, more of profit margins, and CPI show us a little bit. I think as you track the revenue from the tariffs, and as average rates start to go through the economy, I think the next two prints are going to get a little steamy and a little bit more contribution from there, but we still think it's going to be a one time bump rather than a lingering effect that we had seen in the prior years.
On to your point, Vishal, the tariff revenue has been real. We have seen a bump in what the US is taking in. What does that tell you about how sticky these tariffs are for the foreseeable future? That this isn't a story of the next four years, but this is a tariff story that will continue on beyond present trumps.
I think if you just remove all the politics, mid terms, four year term etc. Out Of the pitture and just mathematically extend the clock out. Yes, this is going to be a consumption tax which is going to be five times more. But then companies are resilient, resilient and adjust. I think they will take some profit margin hits slightly more profit margin.
Sectors with high profit.
Margins will take a little bit more less on the consumer side, and then consumptions, consumption will adjust or consumers will adjust as well. I know we are still squinting to see the weakness in consumption and consumer and labor market, but still there is that sort of underlying weakness that is showing up, and we do think that consumption patterns will adjust nominal GDP should adjust down for that matter as well.
What will it take to finally see that show, Vishal, because it has been sometimes since we've seen any of that weakness, despite the constant calls for it.
Yeah, No, I think it will take time, and that's where it makes the FEDS job difficult from our perspective. I think why it is difficult to see this and why it's taking time because balance sheets, both consumer and corporate balance sheets coming into this twenty twenty five uncertain environment from both physical and monetary policy, have been extremely strong. I think you're sitting on a consumer who is a homeowner,
is sitting on three percent thirty or fixed rate. Even the best hedge funds in the world don't get that type of type of leverage and their equities up twenty five percent at least on their houses, and you're running a four decade low unemployment rate. So that balance sheet of that consumer extremely strong to take on some of the uncertainties that you're seeing, and that's why I think it's taking time for it to see through the economy.
Vijuel, you said something in your notes that I thought was fascinating when you bleed this into the market. You said US assets and US dollar are two separate trades, and this is something increasing numbers of investors are coming around to. Is that something that you expect to be persistent Bullish US assets bearish US dollar.
I think that's how our portfolios are adjusted today as well. Over the last like seven months, we've adjusted and steered our portfolios in that direction. We're still trying to eke out that positive fundamentals from consumer and corporate balance sheets here.
Not saying that there are not some of the idiosynthetic, eediosyncratic, strong fundamental balance sheets in Europe and other parts of the emerging market world as well, but I think that dollar weakness, I think is coming primarily from that, you know, the urge from the administration. We've heard it time and again from speakers and another FED speak, but more from DC on that part. And then where the exceptionalism story
is landing us. It is much weaker dollar from here rather than what we had seen probably the last decade. And I have so strong fundamentals from consumer and corporate balance sheets, weak fundamentals from the government balance sheets, and deficits, which flows into your currency. And that's how portfolio of position at the moment.
Just about twenty seconds fee show. You said much weaker dollar, how much further does it have to depreciate?
I think in the next probably two years. We think that probably around that ten to fifteen percent in a basket of currencies. We are not picking one currency to go against in a basket of DM and EM currencies. That's how we've reflected in our portfolios. We do think that there is a double digit depreciation along the way. Again, the point being that it is not about US treasury. Foreign buyers of US treasury as a percentage of GDP
has actually not changed. It is the foreign buyers of US equities that are up probably ten to fifteen percent since the financial crisis that needs to adjust.
That's where some of the hedging.
Will come through. And that's why we think that that ten to fifteen percent is how we are thinking about it.
Visha Konduja of Morgan Stanley, thank you so much for being with us. Have a wonderful, wonderful weekend.
This is the Bloomberg Sevenans podcast bringing you the best in markets, economics, an gio politics. You can Watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else, and as always on the Bloomberg Terminal and The Bloomberg Business out
Mm hmm