Surveillance: Bullard Says Faster Is Better

perfect conversation. Now, Mike McKee, as always one of the best in the world, the best at following this fat sitting down with the St. Louis Fed President Jim blad My good morning to you, Buddy, Good morning to you John, and good morning to you Jim Bullard. Thank you for joining us on Bloomberg Radio on TV. Thank you thanks for coming out to our new museum here. Yeah, this is the Money Museum. It's fascinating and if you're in St. Louis,

you should come visit it. We're sitting right next to the sign that talks about hyper inflation, so it's it's it's sort of a perfect spot for us here this morning. A week ago, you were the lonely dissenter looking for a fifty basis point rate increase. Now the chair has all but promised a fifty basis point increase at least that's the way the markets are taking it at the

main meeting. What happened in the last week, I think, I mean, those that are interested can read my dissent statement which is out last Friday and is on our web page. Uh. I think the FED needs to move aggressively to keep inflation under control. Our policy as we sit here today is still a very large balance sheet and very very low policy rate. We need to get to neutral at least so that we're not putting upward pressure on inflation during this period when we have uh

much higher inflation than we're used to in the US economy. Well, when you say we have to get to neutral, how quickly you have been arguing for more than two d basis points. Yeah, I think faster is better. And I think the nineteen tightening cycle or removal of accommodation cycle is probably the best analogy here. That one was quite successful. The FED moved three basis points in a single year

and then made some adjustments afterwards. In the result was that we hit our two percent inflation target over the next ten years. The economy boomed in the second half of the nineties, So I think this is a situation. It's like that we came out of the pandemic, we got surprised by inflation. But now what you have to do is move the policy rate up discreetly a fair amount, not to be too disruptive, but I think fifty basis

point moves would definitely be in the mix. And UH and then get to a level that we can be neutral, and then from there we can decide if we want to be restrictive in put further downward pressure on inflation. But right now we're putting upward pressure on inflation. It's a wrong place to be given where inflation is well. As I noted, the markets, whether you look at swaps or futures, are now pricing in fifty for May fourth. The Fed doesn't like to surprise the markets. Should we

assume that that's what you're gonna do? Well, I you know I can't. I'm just one person on the committee. I don't know where the rest of the committee will be, and the chair has to manage that process. Um. I thought that was good speech yesterday that laid out the situation, and we'll see where we are when we get to May fourth. Now, the economic data have been closely watched.

But from what you're saying, it doesn't sound like it really matters between now and May that we're too low in terms of the Fed funds rate and inflation is too high and those are the only two considerations. Well, that's a big picture, and I think that's right that we don't really need a lot of more data here. But you never know in this world and in this business, you can always get surprised. Obviously, we've got geopolitical risk

out there. I guess my feeling on that is that, UM, you know, we can't wait for that to get resolved. This could go on for a very long time. UH, and certainly geopolitical tensions, even if the war ended tomorrow, the tensions would last for a long time. So I think the best contribution we can make is to get our house in order and make sure that the US economy is doing as well as we can uh achieve. And UH that will be the best that we can do to contribute to the global situation without going all

our star on everybody. Uh. The idea of neutral is a moving target. Different people think of different levels. UM. One analyst summed up your policy right now as the feed is going to keep hiking until something breaks. Is that the best way to think about it? Now, that's not a good way to think about We're gonna go to neutral, which is the place where we're not putting

upward pressure on inflation. You don't want to put upward pressure on inflation where you've got headline cp I, you know, close to eight percent here and probably more to come in the in the inflation reports ahead. So we want to get to neutral so that we're not putting upward pressure and probably get to a restrictive policy. So we're

putting some downward pressure. History tells us that the faster we move to that situation, the better chance we'll have of moving inflation back to target and getting a boom in the U. S economy too. What's neutral to you on the funds rate? I've got two percent. That's because my our star is lower than others. I'm willing to go with a zero our star. So that's lower than

other estimates that are out there. So I'd be uh two hundred basis points on the funds rate, but I want to go to three hundred this year's to get mildly restrictive, uh, and then that will help us turn inflation around, and hopefully we'll also get some moderation inflation from other sources. What you worry about is inflation psychology getting embedded in the economy. What are people in your district CEO is telling you about shortages, supply chain problems,

and about what they're able to charge pricing power. Well, most disturbingly, they're telling me of the pricing power is not a problem, that they're able to raise prices and pass on the higher costs to their customers. So that's the exactly the kind of situation that you don't want. You want them to be more worried about losing market share when they raise prices, and so for that dynamic has been worrisome to me, and that's something I think

we need to get under control. I think discrete adjustment to the policy rate would help break the inflation psychology and help keep inflation under control in that sense. Uh, they're also saying a great deal about supply chain issues and how those are going to continue, and they will probably not get solved anytime soon. We may have to wait out into three That's way too long for this policy process. So I don't think we can just wait

for that to happen. What about the balance sheet, which your best guess is the best course for reducing the balance sheet and what effect would it have on interest rates? Yeah, I said in mind a sent statement that I'd be happy to just get started on the balance sheet runoff. Now I think we overstated our welcome on purchases. You know. Uh, it's always hard to make these judgments. But in retrospect, looks like we allowed the balance sheet expansion to go

on too long. So I'm be happy with uh. Sooner is better. Uh. I would have been happy to do it at this meeting, this previous meeting last week. I see no reason to just not to just get going on that process. We've got a long ways to go on that dimension as well. The balance sheet approaching nine trillion, you know, pre pandemic it was four trillions, So you've got a lot of uh, a lot of balance sheet reduction that can go on. It would be passive runoff

before we let you go. How would you advise people to look at the Summary of Economic projections and make sense of it given that it says interest rates are gonna rise to be restrictive and inflation is going to just drop off over the next three years, but unemployment is not going to move at all. Well, the real economy is doing very well. The US economies, even with geopolitical risk, is expected to grow at above trend pace this year, next year, even the year after that, and

a lot of forecasts. So UM, that's going to continue to put downward pressure on the unemployment rate and continue to have UM an even stronger labor market. Um. If you look at the Kansas City FEDS Labor Market Conditions Index, it's almost at an all time high here. Uh, it probably is going to go to an all time high. So one of the best labor markets in a generation. So I just think that that, you know, the real side of that kind of with continued reopening, uh following

as the pandemic continues to fade. Here, I think there's a lot of reasons to think that we'll have a robust economy going forward, and that suggests robust labor markets going forward. So what we have to do is adjust the policy rate and discreetly get to the right level. Then we can make adjustments from there and you can get a soft landing. And I think so, Jim, but we did, We're gonna do it again. Jim Bullard, President of the St. Louis FET, thank you very much for

joining us this morning. T k is missing out today. Can we say that you agree some Kings missing out in a major way. When this invasion started a month ago, Tom wanted one person on the show, and it's our next guest, and Tom's not here, And if Tom was here, the introduction front next guest would be about thirty minutes long.

For good reason. Angela Stent joins us now, the nonresident Senior Fellow at the Brookings Institution and the author of Putin's World, Russia against the West and with the rest Angela, let's start here. There is this Western centric conversation that there is some instability building in the Russian government, that we could have regime change, that Putin could fall. Can you give me your line of thinking, God, what's happening within Russia? Yes, I think many of us are clutching

straws and there's wishful thinking here. I mean, what do we know? There are some rumors that some high level intelligence people have either been arrested or fired and blamed for obviously the failure of intelligence at the beginning of that war, but these are just snippets. We know that there have been demonstrations against the war, that thousands of people I think at least ten thousand people have been arrested. They can face up to fifteen years in prison for

their protests. We know that to render thousand Russians approximately have left since the beginning of the war, and they've gone to Europe other parts of the former Soviet Union. But we really don't have any proof that in Putin's inner circle there is any plot afoot, and it really would have to be his inner circle. He's very much in a bubble. He doesn't see very many people. Yes, some of the oligarchs have obviously complained about what's happened

to them, uh and uh. They they've lost their yachts and their homes. We know that. And we heard rumors that the head of the Central Bank, Albero Mabiullina, wanted to resign, but she's still in her post. So I think we have to be very cautious about assuming that a palace coup is underway. At the moment, Putin appears to be firmly in the saddle. He's obviously isolated. He's

lashing out verbally as we saw. But when we saw this big rally last Friday that he had in the stadium they're celebrating the anniversary of the annexation of Premier uh, he seemed to be very much in Church Angelo. When it comes to lashing out. How much are we going to see an escalation in the types of weapons used in some of the methodologies that Putin opts for in light of just what you talk about, the fact that he has cornered and isolated. Well, we're seeing obviously the

bombardment of cities. We're seeing a humanitarian catastrophe there is you know, our government is warning that the Russians may use chemical weapons. They've been warning that for at least I think a week, and of course Putin has made veiled hints about the potential use of nuclear weapons or a tactical nuclear weapons. So I think we do have

to watch out. If you go back to the Syrian playbook, the way that the Russians behaved there with the indiscriminate bombing, the raising to the ground of the city of Aleppo, and the use of some chemical weapons, we just we do have to watch out for that, and that of course is a major concern going forward Angela. It has been suggested by the Biden administration as well as others, that putin his ultimate ambition does not end with Ukraine. What he would really like to see is a return

to the Soviet Union in some sense. If that is true, what does that mean about the likelihood of a lasting peace agreement or at the very least an agreement at all. So you might get an agreement to end this war eventually. Um, we know, you know what clearly involved Ukrainian neutrality. The question is what about Premia and the and the don Bass, the southeastern uklaying region. Uh, that's a possibility. We're not nearly there yet. But beyond that, if the Russians managed

somehow to prevail, Yes, Putin's ambitions go beyond Ukraine. He's talked about a new Slavic Union state comprised of Russia, Jelous and Ukraine. That's a possibility. Um. But he's also hinted that Russia has its sides even further west, that it wants to re establish a sphere of influence not only in the post Soviet space, but maybe in central and Eastern Europe too. So I think the likelihood of

a lasting peace agreement. This is really quite far off, and we really then we would have to have all the party sitting down, as Mr Popnisker said, and and rethinking euro Atlantic security going forward. And that's a major test. And at that title of your book, Putin's World, Russia against the West with the rest? Can we talk about the rest when we think about the rest? Now increasingly we just think about China, And I wonder if the rest wants to be with Putin for much longer here?

Do you think a that China will back away from its relationship with Russia because of developments on the ground and be do you actually believe that Vladimir Putin would listen to Jijing Ping if president she trying to intervene. I don't think China is going to back away from its relationship with Russia. I think China is in a difficult position because obviously Putin wouldn't have gone ahead and done this had he not thought that he had Chinese support.

But Pain has cultivated this relationship with Bondema Putin. I mean it's a mutual cultivation and they see each other as authoritarian leaders determined to push back against a world order that was imposed by the United States and its allies. So I think I think we should not expect China to back away from back in Russia. But of course Chinese major banks now are apparently complying with some of

the sanctions. It'll it'll be tricky for the Chinese to avoid having a major economic problem with the West because of the sanctions. But I think they will remain back as of Russia, even though they repeat that they believe in the territorial integrity and sovereignty of Ukraine. India is another country to watch. The Indians have not criticized the Russians. They're not going along with the sanctions. They have their own issues with China. They have a huge arms relationship

with Russia. And then you have African country South Africa, you have compus in the Middle East, in Latin America. So we have to remember that the West is united in its condemnation of Russia and its horror up this war, but much of the rest of the world isn't because it also has a much more skeptical view of the United States. And you know, we are so lucky to catch up with you today. Come back soon, please, And to the stand there of the Brookings institution, and of

course later one an author. Let's get to Francisco Blanche they had a global commodities and derivative research and be a very global research and Francisco. Let me throw this one out there, the animey. How much credibility is the anime lost in the last few weeks, Hey, John, Well, it's it's been a messive process, that's for sure, UM. But one of the advantages of having multiple exchanges around the world is that we've continued to see a live

prize for Nickel in Shanghai. So even though we've we've had some disruptions in trading for several days, I think at least there's been a reference out there that people could track and that's been a positive I think compared to private prior prior crisis Francisco, how much more do we have to see of these clearinghouses getting disrupted or even the consequence of them increasing their marginal requirements in order to avoid some sort of disruption like that leading

to lower liquidity. Well as as you know, since the financial crisis, we've been concentrating a lot of the risks on on exchanges UM and UM and obviously that's that's I think partly creating some of the problems, but also remembers as volativity in commodity markets goes up to unprecedented levels, UH, it really is hard to avoid bringing up those margin calls or or bringing up those margins in in in the commorities that people trade, because the risk is just

simply a lot higher. And we've seen that with Nickel,

with that other commority markets and UM. I even think that some of the weakness we saw in oil UH in the last week and a half or so was related to the liquidation of of long positions linked to increase margin calls and and of course, as you probably know, open interests has actually fallen in oil despite the incredible risks that we are running here with the war in in in the Ukraine still unfolding and still at you know, a crucial point, I would say, I'm reading side of

energy aspects actually pointed to that phenomenon is a reason why oil prices are so low, not so high, and she actually thinks that Brent could get up to one fifty. I think you agree with her that by June we could see Brent get up to one fifty, but then quickly fall back down. Do you still believe that it will quickly fall back down based on the fact that a lot of people expect a prolonged conflict and prolonged

consequences in the commodity markets. Well so, so our our scenario since October of last year was a spike to a barrel by the summer, and we we had that view based on a post COVID demand recovery on limits to how much open can previews, on limits to how much shale is likely to respond, and of course inventories which which are still very low. I think what the Ukraine crisis has done is probably the entire expectation by

at least barrel. So we we actually do have a one fifty or target for the summer in our baseline scenario, and an average of one then for a year um. It could still get worse, right, I mean, I don't want to sugarcoat this. It's a very bad situation. And uh Europe could still opt to restrict Russian oil purchases,

in which case we would see meaningfully higher prices. That's what we call our ugly scenario is where where Russian supplies not only get disrupted by a million or a million a half barrels a day, but up to four million barrels a day in the market of course of a hundred million barrels, where Russia actually supplies about eight two to the global to to to to dive global markets. So um, so things are not great and could still

get a lot worse. Um and uh. And actually, if you look at the petroleum product markets, we've seen diesel prices already surpassing the high points or that we saw back in thus and and uh it's also an eight, so it's not just cruel it itself. It's also of petroleum products. And again, diesel is the basis of the economy, is the basis of everything we from from harvesting to industry, and diesels connected to the JEFF fuel which is obviously

flying but also trucking. So so really the backbone of the economy is being very impacted by these exceptionally high fuel prices. It's it's it's the new fangs, you know, it's it's fuel, agriculture, airspace. Um it's also nuclear and renewals and of course gold and critical medals. Um. So, so it's all of that that's kind of come back into four with um with the crisis, So Francisco, you mentioned they're an ugly scenario. In the ugly scenario, what does that equate to in terms of a dollar figure

on a barrel of crude? How is that different from your base case of a hundred and fifty by summer? Our our right with scenario is two hundred dollars of barrel plus and uh and and the way we get there again is pretty simple, right, I mean, if you think about every million barrels a day of disruptions from Russia equates to twenty to twenty five a barrel on

the price. So if we get to you know, we go from a million plus to uh to to four million or so, we have to add sixty to seventy lords of barrel to to our our our our baseline spike scenario. Um and um And as I said, I mean, I think that's been it's been so difficult to impose restrictions on Russian exports because at the end of the day, when you when you sanction a commodity of a very large producer, you're ultimately gonna end up paying a higher

price as a large importer. And of course, the European Union is one of the world's largest importers together with China, so so restricting the supplies of energy from your largest supplier, which again Russia supplies a third of europe soil and your gas essentially with just significantly elevate energy prices which are already at record levels. So that's why I think there's been a lot of um political debate there. Well, Francisco,

let's talk about other sources that supply that. What assumptions are you making about potentially more capacity come online from OPEC plus or from the shail patch, well from from OPIC plus it obviously I think that the big I think the big potential supply editions could come from Saudi Arabia or from from the Emirates United Are Emirates. We've we've also seen some progress being made on the run

nuclear Deal, which could all surprise some relief. If you put together all of those, there could be up to let's say, up to three million barrels day of incremental supply. I'm talking about Iran, Saudi Arabia and Emirates trying to max out production. The issue is, of course, with the very low inventory levels that we have, if we max

out production then there's really no room for error. We are kind of keeping our fingers crossed that uh no missiles from them and end up impacting Saudi export facilities or or or the situation and Livia us on worsen or the God forbid, we see another uh string of supply disruptions elsewhere around the world, So so that that's where the channel. Just remember, energy security has taken the

really pretty much the headlines here. And I think, um, when you think when you look at E. S G versus energy security, we've seen much much bigger focusing on energy security because security is like oxygen, right, energy securious oxygen to the economy in the same way that that that security and national security is oxygen to to all of us because you don't think about it much. But once you don't have it, that you start to lose it.

That's the only thing you're gonna think about. And and and that's really the I think that at the heart of all the debates we're saying in the political sphere and um, and I think all the warnings that have come from from people like like like me, you know, the analysts saying, well, you know there's there's pros and cons if if you end up pushing too harden on on the restriction side, you could also end up with with a very bad economic outcome for Francis and I

think that they're kind of balance. So just finally, because the policy change, we could say from this energy transition, there was almost a disregard for fossil fuels and the see years, particularly the beginning of this administration. Do you think it will change things on the policy front over the next several years, not just this year. Look, I've been making the case that the US would go from from energy independence to energy dominance and and energy independence.

We made the case ten years ago when shale started to to emerge as a new and feasible technology. We saw an enormous amount of supply growth and we thought that you was gonna become independent. Now we think it's gonna become dominant and regardless of policy. Remember, markets in in the US are are very very powerful forces, and UH with this kind of prices, we're gonna see a lot more liquid natural gas exports out of the US. Even even um UH Secretary carry UH former Secretary care

has actually agree. I agree that natural gas is now critical to the energy transition. So we're gonna see more of that. We're gonn see more petroleum product exports. We're gonna see more chemicals exports, more fertilized or exports. Just the US is gonna it's gonna really grow dreamand adically its energy production base as the rest of the world

is facing the shortages. Remember the US, the US natur gas price still five dollars and mbt US under five doors and with you so um, that's about thirty doors barrel of foil equivalent. So America has not only the cheapest energy on the planet, but also the safest, John Jonathan and and I think I think that that's These are two very good reasons to UH to up investments in the in the energy space in the US. And

I think we'll see that. Even I think President Biden mentioned himself that that UH that there's a lot of leases out there that that can still be drilled, and I think they will. I think we'll see a turn as as a previarious situation between the between Russia and the Ukraine becomes more entrenched and and and presumably U S sanctions, UK sanctions potentially sanctions could be there for years,

potentially degrading as well. The the profile of of commority production for Russia, which which as you all know, is usual the world's number one commority producer on many fronts. In a big way. We've learned that the harder this time around. Francisco gotta leave it there, Sir Francisco Blanche their Bank America. Joining us now is Joe and Phebey, partner and portfolio manager and advises capital management. Want to start here with you, Joeann, and just go to the

price section of yesterday Yields up, banks down? Can we start there, jo Anne? Why? Yeah? Sure? More and Jonathan and team um. You know, clearly the market is adjusting their expectations for bank earnings based on a flatter yield curve. But people have to remember that a lot of the sorts of loanable funds for banks does come from checking

accounts demand deposits on which they pay no interest. So any increase in interest rates is going to be a positive for net interest margins obviously be better with the steper yield curve. Um And then I think the second thing is the concern over the growing risk of recession, which could impact the amount of loans that they make, so lower loan allems would also tend to reduce their earnings. But I think overall banks have a pretty positive outlook here.

Given what the FETE is saying, It's still looks like we're gonna have growing production, growing loans. We're still in a reopening recovery, even if it's a bit slower than we originally expected. Given what's going on with commodities because of the Russia War in Ukraine, buns are meanwhile joy and pricing in a bit of recession risk. Are we seeing the same sort of pricing in an equity markets

if you look below the surface, you know. I think what we're seeing in the equity markets reflects the change and interget expectations that began last programmer when the Fence signal that it was going to start raising rights. We saw these multiples come down really dramatically, and we saw this big reallocation among large institutional money managers, utall investors, etcetera, away from tech and high multiple stocks towards more cyclical stocks,

more consumer staples as well. And I think that reallocation. I think we're seeing action in the market that suggests that reallocation might be over and if investors want to get some exposure to growth, give it a slowing aggregate economy. I think they're gonna have to come back to those strong secular growth companies, you know, whether it's company exposed to the server market, data centers, etcetera. So I think that is really what we've seen in the equity markets

has been a big reallocation. Plus you know the expectation that growth overall is going to slow down. Joanna, do you lean into that or do you think they're equities right now are not listening to the message being sent by bonds. Yeah, I think you know, it's always the case that bond market is gonna look a little bit more closely at the recession risk. But you know, one thing to be aware of is where else are investor is gonna go? Equities is really the only game in

town in terms of building some source of appreciation. And if you're a long term investors, as our clients are, I think you can ride out this volatility, but be you know, let's make no mistake, it's going to be volatile for a while given these geo political risk But the equity market I think still holds now lots of opportunity for investors with a long term view to get some exposure to secular growth even if the economy slows down, even in a recession, there are ways to build in

some insurance against some of these risks that we're seeing now, whether it's defense, named cybersecurity, energy, there are a lot of ways to build insurance into portfolios in this kind of environment. So, Joanne, what you're saying kind of echoes what our colleague John Author's wrote in his Bloomberg opinion piece today. That is, essentially, yes, higher yields and theory

can threaten equities, especially those that command higher multiples. But at the end of the day, a more aggressive FED is going to be worse for bonds than it is for stocks. Is that essentially the thesis you subscribe to. Yeah, I think that's a fair statement, and I think we have to put the injury strates into perspective. Um First of all, inter strates, at two and a half three percent, it's still incredibly low. Historically, it's still a relatively cheap

source of funds. And remember, corporations tend to borrow longer term, so they're looking more at the tenure in the thirty year, and those seem to be anchored by FED credibility. Con Clearly, the market does expect inflation to come down, and that's why we're not seeing such a build up in rates at the longer end of the herb. And also we have so much demand for the tenure globally because it's the safe harbor, because you know, pension funds have to

be there, Central banks are going to be there. So I think that helps to anchor the long term cost for corporations, which does suggest more investments, more expansion. Job openings are still record highs, and so I think we're still going to see expansion on the production side of the economy, even while we see some constraints on consumers. Then Joan Pheeney always fantastic to catch out with you of Advisors Capital Management, David Rumasty, we are so lucky

is here with us. As markets grapple with the conflict in Ukraine, a big question has been why things have been so sanguine if incredibly volatile. What was Ken's response to adjust this incredible willingness to look past some of

the conflict and continue to buy well. Ken has built one of the greatest hedge funds in our countries, just and also now has built a great trading operations Citadel Securities, And in those kind of situations, you have to know what the geopolitical forces are going to be and what they're likely to do in terms of their impact on the markets. So he has a team of people that are looking at this situation, but nobody really knows right

now exactly what's going to happen. But he's obviously worried about it because it will impact markets and affect his trading, and it also affect his Citadel Securities business. Kenn has had more impact than almost any major financial person on the markets in the last number of years because Citadel Security has become one of the biggest market makers in the countries. And also his hedge fund is done spectacularly well, probably the most the second most profitable hedge fund in

our country's history. And this has called a lot of people's attention, especially as he consolidates a lot of equity trading volumes within the Citadel Securities unit. How much do you talk about the need to keep a wall between these businesses, to keep them separate in both perception and actuality. Well, he does keep them separate because they're obviously potential Inflix, but he's obviously had it walled off and he has separate teams of people. Uh. They are owned by about

fifty people. His hedge fund is owned by about fifty people including himself, and his Citadel Securities owned about fifty people including himself. He's obviously the largest shareholder in each.

But he also recently sold for Citel Securities. He sold um a piece of it five percent to Sequoia Securities or to Sequoia I should say, uh venture fund, and also to a Paradigm which is a crypto company, and he kind of hinted in the interview that now they'll probably begin in the not too distant future to make markets on crypto currencies, which he hadn't done before. He's been a skeptic of cryptic crypto, and now he says

he's less skeptical. Well, David, what caused that change of heart? Well, when markets move a certain way and your force of the markets, you recognize the markets are saying something that you didn't recognize was the case earlier. So he's now been a skeptic of crypto since his beginning, but now he's kind of said the markets has two trillion dollars

of value in crypto currency. So if you're going to be a player in the in making markets for people, you can't afford to not be in that crypto market. So what opportunities is that create for him and prosided Almore broadly, well, crypto now has a gigantic following among people, and I think it's going to get bigger. And this is one of the reasons. What we've learned recently is

that the governments can take away your assets pretty quickly. Now, everybody's not a Russian oligarch, but these Russian oligarchs thought they had all their money hidden in various places where they can get anytime, anytime they wanted, and so did the Russian government. Russian government thought they could get its assets anytime. Now we can see the governments can freeze

and confiscate your assets. So many people are looking at this around the world and saying, wait a second, maybe I need to have some assets that the government can't get to, or they're hidden, or they're anonymous, And I suspect you'll see a lot of people in China and other places where they want to hide wealth buying more and more cryptocurrency. So I think it's going to be a big growth business. It's one of the really important points that will be discussed. It is at nine pm tonight.

I look for to looking at the full interview, David, but before we let you go, I do want to shift gears a little bit. We've been hearing from FED officials. We heard from FED Chair J Powell yesterday, today, this morning, just moments ago, Jim Bullard of the St. Louis Fed coming out saying that he does think that we can achieve a soft landing, even as the FED moves to a more restrictive policy, based on the on the ground experience that you have with the firms you're investing in.

Do you think that it is achievable? Well, nobody really knows, but I think the Fed is done a reasonably good job of recognizing now that interest rates probably need to go up. And the question is how much and how how frequently? And I think the markets are now assuming about a six uh six different times this year, we'll probably have rate increases, probably of twenty five basis points each time, but it's not impossible there could be a fifty basis point increase at some point, depending on what

the inflation numbers are. I do think the FED has probably said, uh, it may have missed the market a little bit, and maybe it could have been a little bit earlier and maybe a little bit stronger in fighting inflation. I think the word transitory is one that's now probably not going to be used again. Well, and of course they stuck to that for quite some time. How much credibility do you think the FED has lost or still has? Here? The FED has enormous credibility around the world because of

what the FED is. But the FED, you know, it's not perfect, and maybe they would say in hindsight or when the memoirs are written by people, they will say, well, maybe they could have acted a little bit sooner. But I don't think it's a gigantic problem. And then now we're on the right path, so I think it's okay. That's at nine pm, David Rubinstein. We all look forward to watching every week. Thank you so much for being with us. This is the Bloomberg Surveillance Podcast. Thanks for listening.

Join us live weekdays from seven to ten am Eastern on Bloomberg Radio and on Bloomberg Television each day from six to nine am for insight from the best in economics, finance, investment, and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and of course, on the terminal. I'm Tom Keene, and this is bloom