Bloomberg Audio Studios, podcasts, radio news, single best idea out on YouTube, podcasts, on Apple podcasts, forty seven other places I can't remember as well. We say to you, thank you. I know you're listening to podcasts like The Big Take. David Gura recently really strong in our politics as conversation with different politicians. Janet Yellen I thought was the Secretary of Treasury was just really prescient. But you know The
Big Take twenty minute podcast. We try to slip it in with a five or six minute jewel for you of conversation. Steve Eisman darkening the door today. You knew him in The Big Short. Actually quoted a thing on The Big Short on the banks. Iiceman said, the banks, Well, it's better, but that's not where he is. He's focused on broad themes of artificial intelligence, technology, an infrastructure. That's
where Steve Eisman is right now. We were focused on the FED yesterday, thanks for the huge response to the Fed decides really really extraordinary with no market reaction, and then this morning boom up we go with a bid to the market. To say the least. Jim Karen joined from Morgan Stanley talk to him about all sorts of things, including the boade and observatory. Here Jim caern On, Debt, and Powell.
My view is is that if we are in an inflationary environment, and I still believe that we are in one, is inflation stable for now, then that means that the FED does not have a free shot at just cutting
interest rates as aggressively without inflation picking up. And so my suspicion here again, this is a suspicion one of the things that triggered the FED to move as aggressively as they did is that they may may think that the employment situation is worse than what the data is actually telling us, and that they do need to move quickly today. So this goes back to the thought that if they go fifty, what are they telling the markets? Should we be nervous. I'm a little concerned here, and
I want to be very clear about that. I want to admit that that I think the unemployment rate is probably really higher than what is actually being forecasted in the data.
Boy, do we have fun with this. Jim Caron is prodigious in legitimate physics, mathematics, and astronomy out of Boden and Caltech and I'm not going to take a lot of time here, but we took it over to the geometric space. And you remember a Cartesian chart you made in school of a y axis and the x axis. Well, think about an axis coming out of the page that's a z axis, and that gets you into a thing
called spherical geometry. And if you have three ideas, as mister Karen talks about there, the one he's looking at is the mystery is the labor economy. And of all our conversations today, that's sent it around to the October labor report. Week of November, Anna Wong was brilliant on that. To continue Jim Caron here again is he looks forward in the FED.
This is positive for risky assets and credit spreads. Just broadly speaking, Powell is basically saying that he is going to stand behind and support this market. If we look at default rates, default rates have been coming down, specifically, Tom default rates have been coming down even in the triple C space, So even in the part of the credit market that people are worried about the most, so the lower credit echelons, triple c's, those spreads have actually
started to come in as as well. Now, if that starts to happen. Then what you're going to see is a decline in the overall yield for high yield, and it makes it a very positive setup for these assets. And let's not just talk about high yield. We can also talk about private credit, private assets, all of these other things all are competing with each other for returns. So as these bond yields and these credit spreads start to come in, money is going to start to follow it.
And I think this becomes positive not just for bonds, but also frequities.
Jim Caeren generous half hore with us today. He is with Morgan Stanley. One of the things we've done right from the beginning. And I don't I can honestly say, folks, I don't know where this started. I think it just started out of my curiosity. That's a curiosity is an important word from Matt Winkler, who is the founder of Bloomberg News, founding anitor in chief and now at chief Emeritis. But the curiosity of who are these people and what
were there like. We talked to Anna Wong today about her first moment at Berkeley with a giant Barry Keen Green of International Economics, well we talked to you know, Joe Davis shows up from Vanguard, always interesting looking at really twisted things for the giant of index funds. And you know what you got to ask Joe Davis is simple, how scared were you? Were you sitting in the chair with John Bogel The.
First question he asked me first day on the job, because Joe, you need to help me help investors have a coj and framework for where we're long term earnings growth, pe, dividends and what drives interest rates? Right, and so he you know, and Tom as you well know, we are very large active fixed income managers. So our cyclical assessment of risky economy matter a lot. But I think it's really that long term. How do I think about debt,
how do I think about AI? What if any what that means for corporate earnings in the portfolios we have to assemble for clients. So that's that's why I've been there for twenty years. And you know economists sometimes don't always last that long, but that's really been the big reason. And our group has grown and we have a seventy five person research organization of Anger.
Joe Davis at Vanguard is sidecar right now, is he's really really studying how much of artificial intelligence will be benefit, will have impact on society looking at five and ten years. Just an extraordinary day here after the FED need to say thank you, to tell you and all of our the FED decides meeting and also of course what we're driving in the conversation each in every morning. I'm Bloomberg Surveillance again. Out on YouTube record audience yesterday. Thank you
for that. Humbled by the numbers. Subscribe to Bloomberg podcast. Tell your dog to subscribe to Bloomberg podcast. That's the only reason we exist. Out on YouTube, Android, Auto, Apple car play serious X. I got yelled at because I didn't mention serious X. I'm really a seminal distribution for us. Good morning across the corridor from Washington to New York to ninety two nine FM in Boston. On YouTube podcasts, on Apple podcasts, Single Best Idea w