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Single best idea. Holidays shortens single best idea. Usually we keep it six minutes. We're going to try to do this in five minutes so you can get on with your Fourth of July weekend, and all of you worldwide, particularly in France and the United Kingdom, you just must be exhausted by the political debate. I can't imagine, of course, everything that we had in Washington today. Thank you to Joe Matthew Balance of Power with Robert Costa of CBS.
It was great to have Robert Costa and Joe Matthew together on all going on in Washington and many many other good guests today. When we invented surveillance in Bloomberg on the economy just a few years ago, don't look at me like that, Eric, just a few years ago. The basic idea was to engender a constructive debate where really smart people agree to disagree. We had that in Spade yesterday in a strong thirty minutes with Lindsay Pegs
of Stifel and Neil Dutta of Renaissance Macro. Lindsay Pegs of believes inflation is more persistent if declining a bit. She suggests the FED will take its time even into twenty twenty five.
I think the FEDS on the sideline through the end of the year. I think there's no motivation for the FED to rush, given the fact that we saw an extreme amount of head bakes at the start of the year, with three months of acceleration, and even when we strip out a lot of that noise and we look at core services excluding housing, so a measure the FED calls the supercore. We're talking double that two percent intended target.
So a number of key metrics are still saying there's not enough indications that we're on a sustainable path two percent. So we need that ongoing message of patients reinforced by FED officials so we don't see them get ahead of themselves as they did at the start of the year.
I'm going to editorialized Lindsay pigs as Stifel. That's a lonely outpost. I'm sure there's people that agree with They're out there and I don't have them in front of me right now, but boy, is that against a consensus call. Consensus call has been some form of vector of disinflation. Allen Zettner and her team published an hour ago at Morgan Stanley and say disinflation is in place, and there'll
be many other people. I think you're going to see a ton of publications over this fourth of July weekend with all that's going on in Washington and of course the French results. I should say look to Alan Katz and our Paris Newsboro, Carolyn Conan and others for very, very good coverage of the French election. We will do
that on Bloomberg on Sunday. But within the turmoil and all this, there is this sense and it is consensus that we're getting there and maybe, as the cliche as the last mile, it may be hard to get to two point zero percent. Neil Dutta has been an optimist, but when the facts change, Neil Doutta changes. And it's not that he's calling for disinflation. He said, there's just been a shift out there where the Fed has to get out in front of the data. Here's Neil Dutta, Renaissance Macro.
The story for the year is that the trade offs are shifting. You know, last year it was all about inflationary boom like dynamics. There's just simply no way the FED should or could even think about cutting in that environment. But this year things have changed. You know, ultimately the economy is growing, you know, maybe two percent for the first half of the year. If you look at total hours worked over the last six months, it rose about
one percent. So if you assume around one percent productivity growth you're talking about, you're looking at about a two percent economy. And I think what's important is that the unemployment rate is rising. So even though we've been growing two percent, it hasn't been enough to keep the unemployment rate from going up. And you're basically growing below potential. And at the same time, the momentum for inflation is lower, right, I mean, we're seeing that come out in the data.
It's really about it's about balance of risk. Tell me what is the right tail for GDP growth. It's really hard to come up with. The unemployment has already been rising. That means the risk is that it keeps right right.
Going back to economic growth, I really can't say this enough. Most economists looking at inflation adjusted growth the US calculates it in a different way than they do in Europe. It gets very confusing. But this whole debate about two percent real GDP growth being below that, which is sort of where everybody is now, including Atlanta. GDP is a guestimate or does it surprise once again to a more robust economic growth is maybe part of the debate in
the Q three of this year. It is an extraordinary weekend, looked our Washington News Bureau Balance of Power, Joe Matthew and Kaylee Lines and others, a vast team here looking at all that's going on with the Biden administration. Mister Trump is a presumptive Republican candidate, and others in Washington. Again in London the pageantry. Thank you to Tom McKenzie for being outside ten Downing Street today as we minted a new prime minister, his greeting with the King of England.
And I don't think I've said this yet Prime Minister Starmer. I've got to get used to that. But that's where we are. And then we go to the French elections this weekend to try to stagger into a holiday normal work week next week. We are on YouTube. Search and find Bloomberg podcasts on YouTube. You go YouTube Bloomberg Podcasts. It's out there on Google, Apple, car Play with twenty nations.
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