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Rich, thanks so much for joining us here in studio.

Here ch Good to see you.

Yeah, what is your Federal Reserve going to do? And when are they going to do it?

I've been doing other things for two years, so it's not my FED anymore. I think they think they're done. I think they think the next move is a cut, and certainly in the recent press conference that the chair did not really try to push away the idea that they would start this summer. And so I think WORP is more or less where I would be right now as well. Three cuts, But I do think and hope that they are data dependent, because the inflation data has

Been talking about this all morning.

Rich.

Great to see you, by the way, in terms of the Baltimore Bridge collapse, and I understand overall you can just go to a different port eventually, but in the short term there could be an impact on disinflation for autos, and I'm wondering if we see disinflation stop for durable goods and goods stuff, does that change the data and does it change or push back a cut?

Great question I think on that the crisp answer would be no, for the simple reason that it's potentially a big shock to auto prices, although I think other folks think it could be attenuated, but I think the FED would tend to and that would be good approach to look through that. So it shouldn't change the Fed's one or three year inflation picture materially about this tragedy in Baltimore, and I think they would they would look through that

Which a lot of folks we talked to, whether they're academics or practitioners, they say inflation is already whipped if you look at the real time data, it's done. We're done. Why isn't the Federal Reserve not moving now? And perhaps because the Federal Reserve looks at data that's.

In the rear view mirror. How do you think about that argument? How do you kind of come back to that?

Well, I think that if the Fed we're targeting the CPI inflation index, which is probably more well understood than the PCE. The CPI is running a point hotter now, it's somewhere in the high threes maybe low force, So we really wouldn't be talking about FED rates cut if the Fed we're targeting a different index. Also, I think the FED will tend to look at the drivers of inflation, if you will, the trend in inflation, and a big

Why did the FED miss the boat on inflation a few years ago? And when they missed the boat, now.

Well I was I was there of course then, and O one and Charter member of team Transitory, so you.

Were team transitory. Oh yeah, and everyone hated it, that was the word. But yet that was true. Well it was.

It was in the FMC statement which I signed off on, So I guess I didn't hate it at the time. Up look, initially in the spring of spring and summer of twenty twenty one, headline inflation was high, but it was not really broad based. In fact, I remember at one point saying to one of my colleagues, you know, I'm not prepared to raise rates because used car prices are up forty percent. But by the second half of twenty twenty one, it didn't matter. Every inflation index was

And do you feel like the economy is in such a position now that, again, we had some inflation data over the last month or so that kind of suggested to some people that.

Maybe inflation's not beaten down here.

So does it suggest that the Fed can in fact way here and just kind of let the long and variable lags play out.

I think that's I think that is certainly an option, and I think that is a message the Chair was conveying at the press conference at the last meeting. They they think their policy is restrictive. So one option if you think policy is restrictive, is just to delay the cuts. And the longer you keep policy restrictive, the more the lags will tend to will tend to kick in. But they're also very cognizant of the fact that they're getting

That, rich What would be a word that you would use to describe inflation now, like if it was because you know, to some extent, transitory wasn't wrong, like for goods prices, it was transitory, just the time frame of transitory was challenging.

What's the word you would use?

I don't know if I have a word, I'd say we're on the right path, but there is a rick that the progress could stall. Maybe and the next time I come, I can come condense that to one word.

Okay, Yeah, I'm gonna thinking about that too. Risky, risky, nerve.

Raggings, sticky, and stubborn is a possibility.

Yeah, all right, Richie, you got your some advanced degrees. It's someplace in Cambridge, Massachusetts. But the bottom line is your University of Illinois, sweet sixteen and proud of it. How do you feel about your Sweet sixteen?

A line?

Well, you know, I looked it up. It's been a long time since my line I made the Sweet sixteen. In fact, it was twenty years ago, which in itself is pretty sad. Yeah, you got a root form. I think when they did make it to the final four, they played in North Carolina team that was better. So yeah, Hope Springs Eternal. I graduated in nineteen seventy nine, so it's been a long time since the line I have been the center of attention in basketball.

You'll be rooting the on against Iowa State this time, right, Oh yeah, all right, good stuff, all right, Richard Claiter, I thank you so much for joining us.

Richer Clarter, a former vice shared in the Federal Reserve.

Let's go to market Ptelgi as the senior portfolio manager Offspring Global Investments.

Margie, thanks so much for joining us here.

You know, I've got a market that on the S and P five hundred's up, you know, kind of ten.

Percent this year.

We had this big, big move off of the October lows of last year.

What do I do here?

Do I jump into this market? Do I just stick with my two year treasury at four point six percent?

What do I do here?

Well? I think the main thing is to say, the economies in great shape, and it looks as if it's actually on the verge of slightly reaccelerating. A number of other countries in the world also look as if they're modestly accelerating. So that says you have to really stick with equities and you know, look for the best sectors and the best companies and not this garried off by another recession scare.

So if the scenario that you just set up, Marguie means that the FED maybe won't cut, does that then weirdly disrupt the bullet scenario it just laid out well.

I think when you've looked at the economy, you've looked at corporate profits now forever two years, and there are very few companies that actually been sensitive to the changes in the Federal reserve. Profit margins weren't squeezed when the FED raise short rates by five percent points. And I think if they cut by a quarter or don't cut by a quarter or half, whatever, I think the I wouldn't say the economy is impervious to it, but I think the whole economy is much less sensitive to changes

All right, So, given that backdrob Margie, are there certain sectors that you think are attractive here. I mean, of course, you know alex Steel has been long the Magnix's Magnificent seven all along, so Jesus, Clip and Coupont here. But how about the rest of us, So maybe are still looking for some opportunities.

Well, I think if you look at what companies have sustainable growth, and that's still is technology. That still is some of the very largest tech firms, I think they still have their momentum place and they'll continue to be winners. I think that we see a number of companies in the industrial space that are benefiting from higher capital expenditures

I love that you brought up the industrial story and all the public money kind of flowing in. The getting private capital in has been increasingly difficult and sort of squaring that squaring that gap, I don't know sure filling that hole, it can be very tricky. Plus, companies that seem to have order books, they're not booking the revenue like it's not as fast as we think it is. How do you play something like that. You're in like a structural shift, but it's still in a cyclical sector.

Yes, well, that's right, because I think companies aren't just madly spending money on hope they'll get a return. I think they're being very prudent in where they make capital expenditures. And it's not the whole economy. It's particularly those sectors that we all put together a good return again, such as technology. Certain parts of the power market looks as if suddenly people realize that the whole economy is rather short on power to run the economy. And also in

And Paul to your to this point, do you know what the third best performing stock in the S and P is this quarter? No Constellation Energy, and it's a power company behind super Micro and in Nvidia. I like that fifty eight percent.

You're all over this theme. That is for sure. Hey, marg we've had the stock market rally twenty five percent off of those late October lows.

Here do I have to start making I to start calling in the question valuation in this market?

Well, you know, it's hard to say how do you value something. Typically people look at say the price earnings ratio compared to say the ten year treasuries or something like that for whether something's overvalued or undervalued.

But I think two things.

I think that there's really no connection of the stock price and its price earnings ratio. It really comes down doing the expectations of future earnings. And secondly, if you look at say the average price earnings ratio or digit in yield to treasuries, I think you may be taking a little off course because I think that with so much treasure to supply, we're likely to see treasure yields be somewhat higher than we might have thought. For where

Mark you before I let you go. We need to channel Tom Keene because you probably been in love with this anyway, dollar yen one fifty one, spot oh nine. What is the trade here?

Well, we all have our biases. I think US is best. I continue to see US based companies that have tremendous growth opportunities that really are greater than what I see in other parts of the world. So I really couldn't comment on Japan. I'm glad to see their creeping into positive interest rate territory. I think it's a great country, a very terrific economy, But I think US has just as many opportunities.

Saw stick with us, all right, Margie, thank you so much for joining us.

As always, margare Vittel senior portfolio manager Offspring Global Investments.

I appreciate that.

Joining us here in our Bloomberg Interactive Broker studios. Marvin Low, he's a senior strategist Global Macro for this little shop up in Baltimore known as State Street, which was a go to meeting for me when I was a Seales sign anles had to go to the good folks Larry Haveerty at State Street and all the good folks there, Marvin, I guess the Fitter Reserve over the last week or so and other central banks have kind of said, yeah, we're mindful of inflation out there, but we still think

Is that kind of your view here as we look forward?

Yeah, yeah, for sure. I mean the signaling couldn't have been stronger. Everyone's lining up to begin in June, and you know that's a fairly aggressive Dubvish impulse for the market to absorb.

So I mentioned this in the last hour, but Boomberg Economics talked about the bridge and the FED and inflation, and their hypothesis is that not that necessarily if the bridge is closed for a while, it will affect inflation. But then in terms of auto disinflation that will slow and that that could actually push back the timing of a beed cut. I guess the question is do you agree? And doesn't matter?

You know what. It ultimately doesn't matter because it will be temporary, but it does make data at a very important part of the process a little bit harder to analyze. Goods disinflation has been so important for this inflation story over. You know, let's say the last four months where the end of last year drove a lot of the optimism and then all of a sudden when we get when we got less goods disinflation in January and February, all

So given that background, again we have inflation is still there, although it's come down significantly from its peaks. We all know that what do we do in a fixed income space here?

I mean, I don't know.

I can just go buy a tow year treasury four point six percent and go kick back and maybe go skiing here. Forget some spring skiing in here. What do I do here in a fixed income space?

Yeah, for sure. I mean I continue to like the shorter end of the curve exactly based on the reason that that you mentioned. You could lock in those yields if that's within that's within your time horizon. We want to go skiing for a lot more than two years, though, so we got to figure out. So we got to figure out what to do a little bit further out the curve. You know, kind of locking in some of the yields, particularly in the corporate space, has been a

So that's a yield plate, not a price appreciation play or anything like that. It is.

It definitely is more of a total return type of environment. If you're a fund manager and you're managing to benchmarks and you're trying to look for spread compression, that becomes a bit harder.

So for me, I think we've talked about this, that I had money sitting in a money market fund. I'm the kind of gallon at a mattress. I'm the kind of gall that would have like gold and soup cans under her bed. Just deffice it to say, I'm very risk averse, and I'm wondering, like what I do with that money market fund and that money under the bed, Like do I just keep it there? But does that belong to somewhere else? And I sort of feel like we don't know yet. We thought it was a stock thing.

You know, it depends on how much money you've got on the mattress. For sure. It shouldn't all be there, all of it. You know, I still like the short end of the curve. You know, I haven't extended that much because higher for longer means that we're probably going to be able to collect, you know, a decent money market rate, you know, potentially to the end of this year, which is what a lot of experts did not expect.

You know, we look at the fixed income space in twenty twenty three, that kind of surprised me that the best performing fixed income.

Market was a high yield.

Double digit gains in the highield market last year, and with all the talk of recession, I was surprised that hyield did so well. What do you think about taking some of that type of credit.

Risk these days?

You know what highield is expensive for sure. It is a credit market. So you know, if you're comfortable picking those credits within the double B space, you know, the default rates around that type of environment are not overly penal, but you have to pick those credits overall. If you're kind of buying the broader index, you know, be aware that there's still is risk that lurks with this inverted yield curve and a higher for longer kind of fed as we go into next year.

Okay, So if I take some of that money out of the money market fund, and I don't want to put it in the two year but I want to put it in the equity market. Am I putting it in a video? Or am I putting in energy? Or am I putting it in utilities. When do you need it?

That's that that's the first question I do like, I.

Don't know, forty fifty years when I retire.

Then then you're continuing to buy the US equity markets. And I've always liked growth. I've always felt that US investors, the demand for growth globally is something that puts US investors in a in a good position.

All Right, Marvin, thank you so much for joining us.

Marvin Low, He's a senior strategist Global Macro for State Street. All Right, your daily look at the front pages around the world at Leasta Matteo the newspapers.

What do you have for us today?

Well, we've been talking about the collision at the Baltimore Bridge. I want to start here because apparently there's been some troubled history with that particular ship. So this is according to vessel Finder. It was built in twenty fifteen, right, but it hit a stone wall berth at the port of Antwerp in Belgium in twenty sixteen, so it suffered some damage there, but it still remained afloat.

It was repaired.

The Washington Post says that that ship it was sold to Singamore based Grace ocean after the accident, but there's been different questions about mechanical, you know, questions concerning it. Last June, it did a safety inspection have found issues that were related to some of the gauges that related to the ship's propulsion, which we know that was a factor in the crash as well. But it's still not clear what exactly.

Those issues were.

But it's still you know, because we're having all these questions about what actually caused you know, the collision at the bridge. So these are just some things that came up as far as the history of the ship. So some questions behind it.

Yeah, I wonder if some you know, I'm not a big seafarer person here, but there I wonder if people are saying, like, are certain ships kind of cursed. I don't know if that's a thing if you're a mariner here, but.

If you're superstitious, you know, So there's that. But I also feel like, not only there's certain ships, but I think you could pick apart anything. You go to any ship, and you could find some stuff that could be improved. Right. You can also ask the question why did the bridge crumble so fast? Like I read a report that maybe the supports needed to be updated. They weren't as thick as they could be. So I think it's gonna be one of those things.

And I did hear just on a radio yesterday report the gentleman who designed the bridge saying the ship actually hit the at the weakest point. Right, So there's but that it did come down very very quickly. So again, Katie Lines for Bloomberg Television. She is in Baltimore.

Wolf continued coverage from Kaylee throughout the morning.

All right, so the next one we have from The Wall Street Journal. NBC Universal's Peacack streaming service is going to be the exclusive platform for the NFL's opening week. It's a Friday game in Brazil featuring the Philadelphia Eagles. Now, this is the first game in South America. But the NFL also said that Amazon's Prime video streaming service they landed the rights for an exclusive streaming playoff game during

So all this together it brings up two things.

It shows, yes, it shows at least yeah, at least at least so it shows that the league leaning towards streaming to get that younger audience. So that's one round, and then the other route is that you have the Brazil game on Friday, you have the Christmas Day which is actually on a Wednesday. So is the NFL moving away from the traditional Sunday game which you know everybody is always you know, used to, you know, Sunday night football.

Guys, guys, is this really the NBC Story of the morning or is it? Roni McDaniel's right, that was a fast hire. She's that was a fast four day thing. I mean, that's great sports. They stream, they do stuff whatever. But Roni McDaniels, I know, I also appreciate it, and I hope everyone's listening. Rich This is for you. Is the New York Times led with it shows the power of talent. Talent, we like this idea.

Yeah, the talent came out against her, and.

Then the rhetoric at least sometimes was like, hey, it just shows the power of the talent if you choose to see it. So you know, we choose to see it.

The Venture Travel I didn't like that.

Oh yes, Adventure Travel. Okay, so that's the next definitely not.

I know, you like to sit on the beach with the cocktail.

Adventure travel not just for the young, apparently a lot more older folks. It's the ages have risen over the past few years. They're going on bike tours. We're talking about fifty six hundred miles. Okay, we're talking hiking the Appalachian Trails.

Surfing.

You might like that one policy, But the reason for this is because they're saying there's better gear, there's more accommodations. Right the fifty five plus crowd, they've traveled more than their parents and grandparents have, so they've done the Rome, Paris. Now they want to go more extreme, you know, and they have the time and the money.

So those are the thing we're doing.

What our new plan is in like September of every year, we're gonna do it international trips. Of the first one is this September, going to Ireland. But it's a tour and we're kind of doing.

The biking kind of hiking biking.

I mean, I mean, you know, hiking to the pub in each to go to is probably it. My son is on a surfing trip up and down the California coast for his spring break with the Outdoors Club.

At his university.

So he's surfing all the big breaks in California and hopefully it'll survive.

I'm not adventure travel, Polase, here's.

My adventure travel on the New York City subway twice a day. That's my that's my adventure travel.

That's not at all inaccurate.

That's exactly right. So I mean, you know, you're right. People are living longer.

Yes, and we got the fuck let's travel now all we can.

Well, you did the ski trip. That was a little bit stress everything.

I've been with skiing since since every but we decided, you know, kind of we're going to each September, we're going.

To do something.

But we're not going to be like you know, we're not an adventure No, it's is not sitting on the beach thing. It's just something different.

Right, But there gotta be a four seasons of off somewhere along the line.

It's so true. I think my next big trouble be is so far. Sorry but that that that's just with my kid because she loves animals so much. But I think it's to be a little bit older. But that will be what we're working for.

I love that.

Yeah, and I'll kick your hair.

Say, where did Lisa get the story?

The new posts?

I love the stories.

Mike ties and we all know he's been selling edibles, right, but this one is going to be shaped like a chewed ear. So it's a callback, you know, to Iron Mike's heavyweight showdown with Evander Holyfield.

You can get him in New York.

Apparently they're selling at certain places. They've already had strained stars over in Farmingdale Housing Works, in Granite's Village, Grow Together in Brooklyn. Those are some of the places that already have them.

But they're selling like hotcakes. People are ready for it.

They're hyped up.

You know, he has that comeback fight against Jake Paul in July.

So why do we not like this market?

Really?

You got to respect the marketing, even if you're not going to go eat an ear. They don't look that bad. I mean they look they look like one of those like like what I'm making, like a circular thing or like it's like a rope. It's like a gummy rope or some gummy rope.

Okay, like a lasso, yeah exactly, Okay, well yeah, but no, it's a great marketing pro Yeah.

Mike Texan stays on the front pages all the time. Repect that he is always kind of in play there, either it's movies or doing all kinds of crazy.

Until that Jake Paul fight. Will get back when that again July.

And who's Jake Paul?

Big YouTuber, big big YouTuber.

But he's young, right, But he's.

Young, he's like almost half his age.

And this is streaming on Netflix. Am I totally making that up?

No?

I think you're right. I think you're right.

And this goes back, Yeah, streaming, Yes, the Netflix Sports streaming, Yes.

Yeah they do. Yeah, so we'll have to see all right.

So and it kind of goes back to your first story about you know, the NBC Universal peaks streaming in the NFL and everything's going streaming, kids, so you better get ready for that.

All right. That was Lisa Matteo with the newspaper wrap up.

This is the Bloomberg Surveillance Podcast, bringing you the best economics, geopolitics, finance, and investment. You can also watch the live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten Eastern from our global headquarters in New York City.

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