Surveillance: Banking Tremor with El-Erian

the Bloomberg Terminal, and the Bloomberg Business App. I'm pleased to say that alongside us here at the global headquarters of the International Monetary Fund in Washington, DC, Mohammed al Arion, Bloomberg opinion columnist and Queen's College Cambridge president Mohammed Mnick, Good morning. Can we stopped calling it a banking crisis? This was not a banking question. Tell me why this wasn't a banking crisis. A banking crisis is a crisis

of the banking system. This was a banking tremor. A few banks that were caught offside and badly supervised went down. The big banks are just fine, and we're seeing that. In fact, the big banks are benefiting from this because they've got two things. Not only are they viewed as safe, but they've got diversified business models, and you saw what happened to fake you, so that suddenly it is the narrow bank that are riskies and it's the universal banks

that are resilient. If it wasn't a crisis, why do you think the officials needed to use the systemic risk exception. I think it crept up on them and they just went a little bit too far. I understand why they did it. I suspect I would have done it too, but they post systemic risk. I think the deposit run and the speed of the deposit run at First Republic scared them a lot. But this was a failure of supervision. We have to understand that this was a failure of supervision.

We have enough evidence now to show the extent to which the FED failed in the supervision of First Republic. So let's say absolutely, this is not a banking crisis. This didn't rise to some kind of two thousand and eight or even you know, potentially that's the nineteen eighties type scenario. But is it credit crunch that we're going to see evolve. Yeah, So we we're going through a major transition which has made some business models incredibly stressed,

incredibly stressed and we're going to see that. We are now focusing on the banks. You just wait to see all the levet finance that has to refinance itself. We talked a little bit about commercial real estate, but it goes well beyond this. When you change to interest rate paradigm as quickly as we did, you will catch people offside, and some people will be able to get back on side. Other people have business models that doesn't allow to get back on side. Ground. Why am I saying this because

the some of the smaller banks have that issue. They have higher funding costs, that deposits have become more flighty, and they're going to have to contract their loan books and they are making loans that the big banks will not make. So yes, we are going to have a reduction in credit contraction. We've got to talk about a Federal Reserve. Raga Raja and a good friend of yours. I know it was fantastic yesterday and I wish we

were alongside him. He was talking about some of the blame lining at the fee of the Federal Reserve and the unwitningness of this institution that we're sitting in this morning to call out monetary policy officials for their role in some of the instability. What would you stand on that now, Mohammad, So, I think it's very important to keep our central banks accountable. They are very important. As you know. I'm a huge fan of central banks, and when I criticize the FED, it really hurts me. But

it's important to have some accountability in the system. Why because that is the basis of political independence, and no one wants to erode the political independence of central banks. But central banks have to own their mistakes and have to learn from their mistakes to continue to enjoy something that is very precious and very important for the system as a whole, which is the ability to make policy

without having to go to Congress. One FED official this week, in the last week at least, said the move from zero to close to five percent in about twelve months wasn't the problem with the banking system. You've talked about a failure of bank management. Do you think that has anything to do with it? A decade of zero interest rates and then going from zero to five like that. So we've had three stages of this tragedy. Stage one was too loose for too long. Remember in March when

the inflation print was seven and a half percent. The FED was still injecting liquid it into the economy. That's much of last year. We should have started tightening policy significantly a year ago. The second problem is that after this whole long period, the FED mischaracterized inflation, so we lost nine months of possible policy adjustments. When you start late, you end up going higher and staying there for longer. That is the logic. That is why timely policy responses

are so important. So, of course this interest rate cycle has been mishandled. Of course it has had an impact on what we are seeing in terms of not only financial turbulence, but all so what we're going to see in terms of economic turbulence. Your cambridge there is a spectacular stained glass window of a ven diagram. It is just a remarkable stained glass window. There are forty two circles here at the IMF, and they're trying to find a ven diagram of politics economics debate. That gets to

a common theme. I can't find the common theme this time around? What is it? So I was surprised when in the six o'clock hour you said, there's all these issues and there's no common theme. That's absolutely a common theme, and the common theme is a world of deficient aggregate supply. We have gone from a world of deficient aggregate demand that was a story out there the global financial crisis

to a world of deficient aggregate supply. You get inflation, you get interstate hikes, you get more inequality both nationally and globally. And I could go down the list, and if you under response, if you're underreact to that shift, then you start digging all sorts of issues. Brilliant, But the heart of the matter is Ambrose Evans Priture absolutely nails this with the Neo Viccellian essay today in the Telegraph. The bottom line is there's too much money out there

and not enough investable opportunities on a global basis. We've been this way for a while. Is it a generational issue where we're never going to escape this trap of just too much money chasing not enough constructive ideas. So we certainly have too much money. What I would love to discuss with him, is it notion that we don't have enough investment opportunities. We are going through major transition,

the energy transition is a major investment opportunity. Let's talk about the market failures that mean that we haven't been able to take advantage of this important window in terms of investments. And we can have a long discussion about what the US has done, and I know it upsets the EU appearance, but they're white. They're trying to address market failures in order to have more private public partnerships

to invest in an area that is critically underinvested. A brilliant idea, can he run the port authority look funnel? Mohammed is raised in a really really important issue. This is not with the benefit of hindsight. We set it at the time. Germany and the European countries, who had the luxury of incredibly acceptionally low interest rates didn't make the move to invest in a way that they should have done well the way I would in Davos. It's simple.

There's all these fancy plagards and marketing ideas of infrastructure and you know McKinsey like eighty page documents and development and it just hasn't He don't remember when Wolfgang Schober left the German finance ministry and they all stood outside and did that black zero as if it was something to celebrate. It was a total failure. Of policy over the last ten years. Well, this is this word austerity and economic policy as well. Are we going to see

austerity in Britain again? I mean within the sharks that we see now there's Britain is so comfortable with austerity, aren't there? No, Unfortunately, Britain has become comfortable with low growth. That's a problem. You know. We have three issues and with my friends people you know very well, Michael Spence and Gordon Brown, we've been working on this for a while. We have three issues. One is we have inadequate growth models. Growth models we have to we think how we grow.

Two we have inadequate domestic policy implementation, and three we have inadequate global policy coordination. Those are the three big areas. Now there are solutions to all three. That's a good news, but we've got to focus the discussion. How it to have said and thanks for being so generous with your time. Thank you, fantastic has always Thank you, Sir Mohammad our Arian. Joining us now is ken Ley On, the director of Equity Research at cf R. Ken You've had about ten

twenty minutes to go through some of these numbers. What stands out for you? These banks are not only resilient, but they're making money. So we did see in particularly in the consumer areas strengthen, the private in the wealth management credit card with flat capital markets are strong. And I think maybe the conversation has been missing this is that we're going to see these banks do better ahead we hit the trough. So I would say the worries

about the large banks is over. They're resilient. And even if this is the first time too deposits are down but loans are up, that's really the first time that metric changed, and maybe six quarters, perhaps that's a good thing. And quietly JP Morgan is offering you John a five percent one year CD rate, So either if the deposits go out, they're quietly taking money from smaller banksy Ken, you've been following this for decades in the chone changes.

You can go back and look from annual report letters from fifteen years ago that are embarrassing in their vogue. Is the vogue now for these banks to talk down their scope and scale. I look at the revenue pop and JP Morgan and I would suggest as government affairs people are telling mister Diamond, don't let anyone know. Are

they almost too successful. You're spot on, and the issue here is really the messaging and that it's not that we have too much capital and we're restricted because there's going to be regulatory costs and more regulation as relates to holding capitalised, especially exiting Basle three end game. So the story here really is making sure investors are comfortable that they can get dividend growth and buybacks at levels

commensurate with the last two or three years. And that's going to be really the debate they have behind closed doors with Michael Barr and the bank super advisors on the stress test, not this year but next year. So that's the important thing for investors is knowing that these banks are not only resilient and profitable, but they can get a total return on their investment. Ken I want to build him what Thomas saying, because he's absolutely right.

We're talking about credit crises and the potential for some sort of fragility, and we're talking about JP Morgan expecting to bring an eighty one billion dollars of net interest income this year, which is far above what people were expecting. They are minting money. At what point are we expecting Some of the discussion from the C suite to be gloomier than perhaps it really is, to perhaps divert a little bit of attention from what's going on in the

bottom line. The bottom line speaks for itself, and that's

what moves markets. Gerard was correct that we may have hit peak net interest margins, but looking back over the last five years of the large banks, only JP Morgan was able to grow net interest income from twenty seventeen, mostly because they expanded their loan activity and their book But overall the picture is good, and that was our point in the middle of March, is that obviously there was tremendous concerns about financial stability, but it was a

great time as some of the large banks have sold off and we took advantage. And I think the capital markets still can give you a strong punch in the second half of the year because right now we're at the trough in terms of underwriting and also mergers and acquisitions. You know, Ken Leon's dead on and Lisa, I think this is so important. Max Abelson tearing this apart for Top Live right now, this is a surreal conversation. And

mister Leon and Cassidy touch upon this. Their return on equity is eighteen percent they are minting money don't look okay. So how much is this a JP Morgan story and how much is this a BROADERCT banking story and can that really will ultimately be the question through the rest of this year as perhaps people parse the differential between the JP Morgans of the world and all of the I don't want to say Silicon Valleys of the world, but perhaps the first republic banks of the world. There's

two iterations here. The first one is if you're diversified and you have large capital markets businesses, you're going to outperform. The second part of this is really related as you look at not only the superregionals, but smaller banks, they have a narrower tell asset mix, a higher percentage of commercial real estate loans and commercial loans, and the consumer will probably slow down a bit in the second half

of the year. We saw that in the JP Morgan results on credit card revenue Ken this was wonderful, wonderful to half of mc kenny on that FCFI. Right what we're gonna do here is moved to the bank and earnings. But right now stay in a very delicate discussion. This is a byelat that's what we call it down there. We're going to have a bilatto right now, that sort of two parties that really don't want to talk to

each other talk to each other. We're going to do that with Waldst Nembrowski, European Commission Executive Vice President, the former Prime Minister of his Latvia, the bilot you go into now across the Atlantic Ocean with select American officials. Is the tension normal back to your prime ministership with Latvia in the heart of the GFC, or is there something new this time about trans atlantic bilat tension? Good morning. Well, first of all, I would highlights that there is a

very strong transatlantic cooperation. We are strategic allies, and especially in times like Zis where we aren't confronted by Russia's aggression against Ukraine by war on European soil, we need to work together with US and with the entire democratic world. And I would say that this corporation, both in terms of supporting Ukraine and putting sanctions against Russia is is very strong and very good. On a trade side, obviously,

we are also having very extensive agendas. This was a subject of some of my meetings also yesterday and there we're still working, for example, on some of the discrimintary aspects of the US Inflation Reduction Act. But once again we are constructedly engaged with authorities and hope to the extent possible solciose issues from Latvia up to Estonia over to Finland in your world, in all of our worlds have changed here with Finland joining NATO. To me, it

was just a lifetime shock to see that. How did the political dialogues you're in everyday change given a shock of this war in Finland simply joining moving from its independence in Europe? Well, I think as regards Finland, it obviously was a logical choice. If you live next to the aggressive empire, you need to seek a stronger protection, and that's what Finland did always joining NATO, and hopefully Sweden will be able to join soon as well, and

it definitely strengthens the security in entire Baltic Sea Region. Commissioner, you're always diplomatic. I always suggest that you've had to spend a week putting up fires, fires started from by someone else. I would like to understand how the Europeans would respond if the US administration turned around and said that they don't want to get caught up in crises

that aren't ours. What would you say back to that? Well, as I was saying at the beginning of interview, when we are confronted with major challenges, we are better off if we work together as EU US, that we strengthen our transatlantic alliance. If it's of the French president there, well, clearly is a position of the EU is very clear on this. As I said, EU and US are strategic allies and we especially in current confrontation or geopolitical situation,

we need to work together. I get the feeling, and this is my assessment, and you can correct me. By all means that you're all underplaying the tension between the European Union and the US right now publicly. Whenever I speak to someone from the US administration or the European Union, I get the same story. We all need to work together. What I actually see as an observer is a race for subsidies in the United States, the European Union racing to get its act together to do the same thing.

It's a real tension starting to emerge. How are you going to resolve that? How do you actually truly work together? When the US is spending a lot of time saying, let's build an America, make America, and then buy America. How are you going to resolve that? Well? On ZIS and if we are to discuss specifically US Inflation Induction Act, who has been very clear since the very beginning. So we definitely welcome the climate ambition of the Inflation Induction

Act and is also working on these goals. But at the same time, we have serious concerns about discriminatory aspects in Inflation Induction Act. We have set up the dedicated EU US Task Force to work on those issues, and indeed we are raising these issues also bilaterally with US administration and trying to solve them. The previous administration is heavily criticized for its approach to trade. Everybody would come on TV publicly they had no problem saying getting criticized

in the Trump administration. Is there any difference any daylight whatsoever between this administration and the last one on trade? Can you identify one specific piece of daylight difference between what this administration is doing and what the last one did. Well, First of all, with this administration, we were able to park several long standing disputes like RBS Boing dispute, like dispute related to steel and aluminium tariffs. Right now we

are working on the global steel and aluminiumsranges of that Commissioner. Well, just yesterday I was discussing this with US trade representative Ambassador Thai and there is a very intensive, very constructive engagement and we are working with a deadline of October this year. In mind, we talk a lot about the relationship between the US and Europe, both when it comes to trade, but also when it comes to military. We've been talking about these leagues that are very sensitive from

the national security of the United States. Does that change your relationship at all with sharing information or doing business with the US? Well, once again I must emphasize that in a situation where we see aggressive policy of rush, I would say increased ambitions of alter attended regimes, it's important that democratic world works together. So yes, our problems are difficulties, but we need to be able to to discuss overcomes them and find a joint solutions as a

response to current job political situation. But as you're very kind to give us so much your time, thank you for paying with this commission, we appreciate it. Bariston Browskiste of the European Commission, this is always a joy joining us now Loop and ram and with PIMCO, head of the EM of course, your service to the International Monetary Fund for years, and far more importantly a student of the ramifications of the central banker to the world, Jerome

Powell in EM sovereign debt. How big of an influence is mister Powell? Right now, I'm Bolivia, I'm Ghana in the news today and frankly on other larger, more successful EM economies. Well, the FED cycle is extremely important for major emerging markets, particularly those in the investment grade portion of the asset class. But you correctly point out that for the frontier markets that are really facing credit stresses, relatively, you know, the impact of the FED is relatively a

lot smaller than you would expect. It's smaller than you'd expect. But the fact is there's a multidimensional crisis in EM. Now in your study of history at LLC of how is this distress, this tension different than what we've seen back to nineteen ninety two and frankly back before that, Well, I take a slightly different view. I actually think the

crisis is more in developed markets than emerging markets. For the first time in a long time in EM, you have inflation coming down, you have growth essentially, Companion Emerging career got out front with radio increases, absolutely Career, Brazil, Chile, the list is endless, and not only that they've avoided deep recessions, whereas we have the kind of soft landing

versus hard landing debate in in developed markets. I think that you know, when we're thinking about crises in EM, it really is a select number of frontier markets that don't form the aggregate part of emerging markets that we actually invest in. And it's important to bear that in mind.

For countries like Mexico, like Brazil, like South Africa, like Indonesia, we're extremely constructive this UH, this new phase within their economies, particularly as they're trying to come out of this tightening cycle, is going to be very constructive for EM investors. Lupin, you said, this is one of the most exciting IMF

meetings you've ever been at. Why, Well, this is the first time we really have a lot of discussions on debt restructurings and importantly the role of the multi development banks and the and China in debt restructurings, and so this time around, you know, we're seeing a lot of

debate and discussion some pushback from China. It's the first time we're really seeing negotiations related to the MDB's senior status in debt restructurings, and the recent global workshop that the IMF held last week essentially highlighted that the MDBs will be committing more grant financing for some of these

debt restructuring countries. How much is what you were first talking about connected to this very deeply that right now the crisis is not in the developing world as much when it comes to the rates picture, it's much more in the developed world and frankly, US, which is the biggest market for a lot of these debt instruments. How much is that coloring the conversation and the willingness to sort of allow things to sort of just go on and losses to gather at a time that's somewhat fraught

for the developed world. So I think that, you know, the impact that high inflation in the developed economies has on these discuss is important, but it really isn't the front and center when it comes to the debt negotiations. The debt restructuring issues are long term. It really strikes at the heart of how the Paris Club, China, India, the GCC Saudi Arabia are going to work together in

future debt restructuring. So these are longer term issues that I think all parties recognize the importance of really putting front and center. Are you impressed with how the IMF has handled some of these discussions. Yes, I think the IMF has played its part in terms of being the negotiator between all of these actors. There are elements that the IMF needs to focus on in terms of it's

lending into arrears and lending assurances criteria. It's really important for countries like Sri Lanka, like Ghana who went through balance of payments crises but need financing from the IMF immediately and in a very short period of time for the IMF to really iron out some of these creases when it comes to their lending into arrears and assurances practices.

On a market desk with your three Bloomberg terminals in front of you, loop and what do you want from China to signal from China that they will do Western restructuring. What's the next step the FD Robin Wigglesworth has done a great job on there's our end of current I think has been strong on this as well. There has to be a China process of restructuring. What's it look like? So we're getting a lot more clarity on what China's

and key issues are in these debt restructurings. And essentially the first is the seniority of the multilateral development banks, and to some extent the recent announcement on grants has overcome that. The second is domestic debt restructuring. And this is a very valid concern from the Chinese. Many countries that are coming for debt restructurings have very high levels

of domestic debt which need to be addressed. But essentially governments find it extremely difficult to impose haircuts on their population and as well look after the stability of their banking sector. This is an issue that needs to have a lot more work behind it to really get a handle on it. We don't have the time for this. Where you go a hand for three hour? Can you do a panel with me today? What are you doing

at eleven thirty this morning? The heart of it to me, is Russia Sherman mentioned the other day, is the rescue culture? Is the rescue culture where everybody has to be pain free? Is it's seeked over to your world of sovereign debt workout? Do we want everybody to be painless in working towards haircuts or extended duration? I think that the em world is no stranger to haircuts and actually very painful restructurings. We've got a long history of very low recoveries in

some countries and very high recoveries in others. I think that you know, where we're going to is a shift from the focus on private bondholders to the official sector in terms of how the official sector should behave and coordinate themselves in resolving debt restructuring. So really, with the collective action clauses reforms that we saw over the last decade and a half, the private sector really is doing its part and the issues are much more in the

official and the official bilateral sector. Always been the case. The official sector doesn't like take in lost this time. You know that, look at what happened in Europe. I just think I wantedly same thing. Is the tension with China going to impinge best practices on a new twenty first century IMF, and this has been a big concern. Also, what are the rules of the road. I mean, can China say all right, we didn't get paid back, so we're going to take your port you know what I mean,

We're going to take your shipping line. This is we're not the big issue. The jargon for this is they go, well, we're into meetings and technicalities. I don't know what I am. F technicalities are Lupin's expert at that tannicality. So you're just hearing about that careers fascinating stuff. It is fascinating. I actually like some of these meetings are really fraught and everyone talks about it's like, oh, yeah, we're coming

to an agreement. Then you talk to them behind the scenes and they're like, oh yeah, they make it toublically, they make it a bit of a snooze. Yeah, exactly. For me, it's been pretty sleepy. But you're not behind the scenes. Big time significant loop and this is great. Thank you, Thank you, PIMCO. On the latest from the International Monetary Fund of the World Banks Spring meetings, we have the h is John and I try to do it Davos or at Jackson Hole to finish strong with

a qualified individual. Eric Nielsen carried the optimism of europe UNI credit in the darkest days of a number of years ago. He joins us today with the perspective of his public service at the IMF on the Turkey and Russia watch as well. You were in the trenches year ago, years ago of IMF duties. Is the I AMF focused right now on fixing these debt crises or are they completely distracted by the therapy that Lisa was talking about moments ago they feel distracted. I share the sentiment you said.

It's that I have been to probably fifty of these meetings over the years, and I have I cannot recall such a division between what you the IMF writes about, but they talk about what the official sector talk about.

And then you go out of this building and meet in the private rooms with private investors and other private sector people, and they all talk about Russia, China, and then to Europe right sorry, US, China and the war and then Europe here and here we talk about we need to do some fiscal to transman, we need some monitor tightening in facial a little bit too high and then we go lucky lucky, we had a financial mini crisis, so we can talk about financi stability, but it's not

really a problem, as we can have heard, and I agree, but that's what they talk about. They don't talk about the elephant in the room that fundamentally economic policy of thirty years is out the window. We are not no longer having free trade, We no longer have believes in free capital movements. We don't We now have to talk about industrial policies, sanctions. But they're not leading the discussion here. And this institution was meant to be the very embodiment

of that push. That's right, So what's gone wrong? That's a good question to Let's first recognize that they're in a difficult spot. They have shareholders on both sides of the debate, right, but and they don't have a history of having criticized the US and China. You can't find it in the back back, right, that doesn't happen. And these are the two big issues, right, and they don't really talk about it. Right, This is a so they need to be brave. They should have been brave. They

were not here. I think they missed their opportunity to repainting. For the way Tommy brought it up so many time since in China, just how the absence of Chinese here and the you know, long ago and far away. The Managing director told me on our trip they at least began to engage discussion. And the word they use, which

you have lived, Nielsen, is technicalities. Is this going to be a process for it of technicalities or is it going to be real leadership by Secretary Yellen, the Managing Director, by the Chance of the Exchequer, and indeed by the leadership in Beijing. This is I don't know the answer what how they would do, but they're not there now right. It is it's they have two good chapters from the IMF on sort of geo politics, right, there's one in the Wheel and one in the Finances de bed A report.

They op out the effect on foreign direct investment this could have and estimate what it is. There's no policy conclusions, there's no sort of economic effects conclusions of it, So it's technicalities economic sort of analysis. Interesting, great Stock totally agree with this. So is this basically is this basically a crisis of leadership? Yeah? I mean ultimately yeah, I mean maybe, but but it's possible that the deck of

carts handed here is unplayable because it's America and China. Right, But I mean, yeah, but what's the consequence then, I mean, honestly, what is the relevance then of the IMAT if you have a situation where they're not taking a policy stance, they're not calling people out, they're not creating at, they're calling out the UK. Yeah, all right, Okay, that's what you know. And a lot of people in the UK,

for obvious reasons, are very upset by it. Now, I think, Eric, we can sit here and agree that some of the policy issues of the UK quite rarely needed to be criticized over the last ten years, and we can find some common ground there. But why are they so comfortable going after the United Kingdom? And then when she power walks around here, it's like, think, you know, it's fine, there was no favor that you know, we can't talk about that. What is that about? It's a bit power, right,

and and who you want to please? Right? It's a and and And they haven't the East at this stage been willing to stay a bob back in the end, in the death in the Latin American debt crisis. Delor Shia today, still in his high nineties, will tell you stories about how he walked down the street to the Treasury and going to him at least worked with him

and make things happen. You don't see this now, I think, So what's the consequence, Well, the the easier consequence is that this institution and the World Bank will be on the back seat and not in the driver's seat, if they even would be in the car. Right, this is the issue, right, this is the world has moved on

in a very traumatic way. I think the thirty years of globalization believe where monitor or sybe economic policy were set by sort of the ideas the we economy is believe in a free trade and these sort of things. That's not there anymore. It's the security apparato or agencies who have taken over. And maybe that's real life and that's just what it is. But the result of that is that economic policy is not in the driver's seat anymore.

This is there not talking about it. Let me dove tell gave a week ago with a stunning five year view with some of the zeitgeist this morning, and that would be a study of nominal GDP. You are the optimists, But can you frame out a reduced real GDP along with a reduced inflation? Yeah, you can. I mean this is sort of an economy's argument that is based on

the base case. And when I talk to a staffer here and he defended what they've done is that in the in the publication is that you have fundamentally to articulately a base case. The problem is that there are so many risks around it that one of them is bound to happen. But I think the probably is bigger still because I think the whole narrative of economic policy making and who runs the show today has changed, is changing, It's always changed now and this is not so then

we can yeah, we can talk about that growth. Maybe global growth going to be two point eight or two point seven percent, and maybe either the neutral rate. Yeah, it's going to come down a little bit. And the central bankers don't like it right now. They can't think going to take the monster policy. That's a sideshow. It's a sideshow. It's not the real story in the real world. The clients we talked to European corporates, other corporates are

like this, is not what they talk about. This is inflation is coming down, and yes we can discuss, well, there's twenty five basis points one or twice or whatever. Yeah, that's not the real story. As the most important question of the morning, what was better the eight dollars strata teller in Washington, DC or the three euro strat to tell her back in back in Milan? Which one it was? It was very good at the one I had yesterday, I have to say, but most of it landed on

the sidewalk. He said. There's great things from the RNF spring meetings in DC. Eight dollars for a strata tell her ice scream, which is almost as good as the one you get in Milan. What went wrong? Did the FED allow us inflation to run away? I'm raising questions about you, Eric. This is great. Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern.

I'm Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can watch us live. I'm Bloomberg Television and always I'm the Bloomberg terminal. Thanks for listening. I'm Tom Keane and this is Bloomberg