Surveillance: Critical Year For Climate, Says Carney

of you on Bloomberg Radio, on Bloomberg Television worldwide. To the very unretired Mark Karney of Canada and the United Kingdom, the former governor of the Bank of England went right back to work after that tenure with the U n Special Envoy for Climate Action and of course his work in other areas of finance. Governor Karney, thank you so much for joining us today. The Paris Accord unraveled, t p P unraveled. We now have she meeting with Biden

resum or whatever, uh and they're gonna talk climate. What kind of agreement can we get from Biden g on climate? Well, first, Tom, thanks for having me on. Biden g Uh, Suga, Trudeau, Johnson, uh, forty world leaders coming to this summit that the presidents called for the next few days. I think we're gonna see we are going to see some big announcements from some of the G seven economies. I'll let them unveil

those as they come. That's the first point. In the second m it is encouraging that the President g is part of this summit. It's also encouraging that the private sector is leading the way. And Uh. Part of what's coming out on the eve of the summit, as you know, is is a big, big announcement from the core of the financial sector. Governor Curney, I'm gonna make it real simple. You were born in the north northwest of the Northwest Territories. I'm suggest none of our authorities have ever been as

far to the Arctic Circle as you. The Arctic Circle is melting and arcticle as gladi is moving. What is the urgency to a northern guy like you to get this done? Well, there's an urgent. Yeah, absolutely. Uh. We did drag the G seven up to a Callawood. You might remember Tom about eight years ago, so that they got close um and they started to see some of the impacts. Look, there is an urgency to this. Um. We're tracking as a world. You said Paris didn't succeed

it succeeded in the objective a goot people in. But the policies are still consistent with the world. It's north of three degrees warming north to three degrees. So this is a critical year for action. There's tremendous momentum. Now we need to reinforce that momentum. And again, having seventy trillion of private capital coming behind that zero, which is what's been announced today, is the type of momentum the world needs. Let me ask a rude question, how do

you convince the United States Senate? You can? Well, you first, it's in the United States interests directly in terms of the impacts of climate chain. It's also fundamentally, and I'll refer to the comments of Secretary Blincoln a couple of days ago, this is fundamentally an issue becoming an issue of competitiveness, of economic competitiveness. The world is moving in

this direction. UH. The firms that that are innovating, that are lower carbon, that are part of the solution UH, and the financial institutions that are getting behind those solutions are doing very well. They will do much much better. This is where the world's headed. The question is pace the US, as in many things, should be the leader, can be the leader, and those countries that are the leader will reap reap the rewards as they should. I love that Tom still referring to you as governor County.

Mark should continue doing that. Do you want me to keep that up? That's an American thing. I haven't done that. I haven't done that for CREWD Like you lads from Britain, we always do that. We had to put up with a lot of that in the news conferences on threaten

NATO Street. I'll go with it, Governor Khanty. I remember a news conference at the back end you were fresh and your tenure the Bank of England, and everybody was worried about bubbles our swhere and why we needed higher interest rates, and I remember a line from you, we don't set a monetary policy for inside the circle line. Now, if you live in London or appreciate the underground system in London, you'll remember that quote and you'll know what

it means. So Mark, I wanted you to help us understand the moment we're in right now as well, the financial instability, stability concerns that go with very low and exceptionally low interest rates for a long long time two things, John, thanks for remembering that we do set financial stability policy for inside the circle line or the equivalent in the

US and Canada around the world. UM. So it is very important that authorities are focused on pockets of excess, making sure that they don't spread more broadly within the financial system UM and undermine the recovery, which well strong out of the gate. UH, particularly the United States is really just getting going UH and needs to be followed through. The word transitory keeps coming up again and again. You've been in a scene where you've seen above target inflation,

not the three percent, think of turn a mark. How different is this moment? Do you think you face downside risk of growth at that time as well? Now we face upside risk to growth. How different is this moment? Uh? It is different. I mean we're in a unique situation given the nature of the pandemic. I won't list all the reasons why it's different, but in essence, it's a

supply shock. It's hopefully a temporary supply shock. UM. Part of getting out of this whole is big fiscal much bigger than we saw two thousand eight nine, UM, and also a monetary policy that is explicitly targeting some degree of overshooting responsible overshoot of inflation. So it is quite different. But the combination of that mix is maximizing the prospects that we will get out of this. To loop back to the Biden summit, if I may, uh, it's important

where the hand what are we handing off too? Though we'll get this initial pop in the economy, we need an investment driven recovery in order to really have traction, really have high paying jobs, and that investment driven recovery is going to be oriented. Part of it surround sustainability,

a much more efficient economy. We need a financial sector that's there, and that's why having twenty eight trillion of balance sheet of banks led by you know, Morgan Stanley, Bank of America, City, HSBC and others announced today that's the kind of capital we're going to need in the US and globally to have a sustained recovery. So what are the negative consequences mark of the incredible amount of fiscal and monetary stimulus that have impumped into the economy

over the past thirteen months. Is this just without harm? Well, no, I mean all these everything, I wouldn't say everything in moderation, Lisa, But everything needs to be calibrated. Uh. You know, the FED and other central banks will have to make as they always do, um, timely decisions on the tapering of stimulus tapering first and then uh in the fullest of time with the recovery that we want and deserve, withdrawal

of some of that stimulus. Fiscal stimulus, UM in all jurisdictions needs to move more towards the type of support for private investment as opposed to sustaining individual consumption. I mean, I'm saying that after the measures that have been passed in the in the United States and elsewhere. So there is a pivot on both policies coming. But where policy stances today needs to needs to be seen through. But absolutely li So, Um, you know there are some tough

decisions ahead. Go to Karney if it is an inflation. When going back to your issue. As a special envoy for the United Nations, Secretary Treasury Janet Yellen said that climate change was the biggest threat to markets. That was the biggest threat, frankly, existential threat the way that we operate, and we've seen the FED taking more active role. Can you dovetail how monetary policy fits in with climate policy well.

First and foremost defense actions are related to financial stability risk what John was talking about earlier, um so making sure that as we're in this transition that lending investing is consistent with the industries of the future and not those of the past, and we don't build up large losses in the in the core of the system, monetary policy is going to have to uh largely, I think largely.

Certainly in the United States. It's largely a question of the classics supply demand shifts in in the economy, so more traditional monetary policy, I will say, in the UK and in Europe. Uh. The way monetary policy has operated, the type of collateral that's used, the type of assets that are purchased, will be influenced by climate policy, and as a consequence, that will be yet another influence on

the pricing of securities. Governor Karney, Christopher Friedland is making really quite a splash in your Canada, and I want to take it globally certainly G seven and G eight, but actually globally do we see in Canada as we come out of this pandemic a new interpretation of what government will do? Christoph Friedland has made worldwide news with a more liberal approach. Is out a tone of the future. Uh,

it's uh. It's recognition aspects of the Canadian budget or recognition of uh, the inequalities that still exists in this economy and very important. I think the centerpiece element in that budget was is around childcare and universal childcare. And and you know, to speak as an economist, I mean we're moments from you talking about ranger causality and the time series analysis as speakers an economists. One of the things, of course, what that's doing, it's issue of social justice.

It also is an issue of supply capacity of the economy. You know, more women can work, UH, border participation in the economy. That's that's good and is right and its just. But it also supports uh supports growth UM. But in Canada, as in the United States, what I was saying earlier, the shift from some board needs to come from immediate support to households during the course of the pandemic, which

is still raging here. Unfortunately, the moment to that type of longer term growth UM and and a responsible fiscal policy that is consistent with longer term ARO. What's so great about this folks in these conversations that John, Lisa and I have as you get little windows for a split second, and how competent these people are. As Mark Kearney picks up on Granger causality and brings it right over to the political theory of his Canada, Mark Arney, I think John Farrow would agree with me that you

are more qualified than any global thought leader. And I hate that phrase, Mark, to talk about what you learned in the United Kingdom. John Pharaoh is beat the table throughout this entire pandemic that there is a social contract in Europe and indeed in Boris Johnson's United Kingdom that is different than America. Out of this pandemic, are we shifting to a new social contract where we budget for

they have not? I think we are. And the starting place is different, and I think you summarize a well, Tom. The starting place is different in Europe, it's different in Canada, different in the US, but the direction of travel is similar. We've learned through this pandemic that we don't have as

resilient economies and societies. I mean, individuals have proven themselves to be resilient, to their great credit, but we haven't had the support, we haven't had the protections we need UH and and I can extend that analogy not just from financial stability to health and pandemics, but over to cyber UH and other issues where government needs to play a role. UM also playing a role in the adjustment of the economy. Now in the end, and we the economy needs to move to the future UM and the future,

to grossly simplify, is sustainable and digital UM. So whereas we have the support, we also need UM, the dynamism and the openness in order to move forward, or else we're supporting livelihoods of the past, not not not of the future. We could save these questions for the end of the interview with that right now, So let's do it. Do you miss central banking? Do you miss the world? A central bankake? I'm gonna get to the Brexit question at a second. Don't worry, Tom, that's not a central banking.

Do you miss it? Mam? You already feeling Mark? You know, John, Tom, at least I've been in this room for six months. Yes, I miss Mark. Are the are the maple leaves gonna finally break the whole the curse? If you will back in nineteen sixty seven. They haven't one cent your you. Conor McDavid and the oilers, they're going to spoil it for him. You heard it here. I'm going there at the oilers, Tom, Tom, I've I've silenced you. I can't believe it. He has silence. That's unbelievable. I've never seen

that before. Just to ask a Brexit question. You want me to ask a Brexit question. I don't think Mark wants to answer a Brexit question. Mark Conney. Before you go, let's finish on the story in the UK. Things have changed so much the relationship with Europe. Has this ended up where you expected it to end up? Uh, it's I mean, we're more or less at this stage, but we're still in the in the early innings, to use

the US expression um of the of the post. Obviously, the post Brexit relationship will take take a while to re establish some of those relationships, including in the financial sector. I think the interests are still very much aligned, and I would hope that over time the degree of openness cooperation will will increase from this base, which is which is lower than it should be. Uh, in the interests

of both Europe and the UK. Governor County. This is the world of central banking, and I'm sure you don't miss those news conferences though, Mark County, you went Special Envoy for Climate Action FANCI, former banking and the Governor. We will reach the time at which we will taper asset purchases when we've made substantial further progress toward our goals from last December when we announced that guidance, and that would that would in all likelihood be before well

before at the time we consider raising interest rates. We haven't you know, voted on that order, but that is the sense of the guidance, is that it would work in that way. The Chairman of the Feller Reserve System Jerome Powell, and that is a different Jerome Powell than when he was speaking early in his tenure. He has really grown into the conversation and the guidance forward. He

gives guidance of David Rubinstein peer to peer conversations. This is a piercing interview off of the Economic Club of Washington. Look for tonight at nine pm and Mr Rubenstein joins us right now. David, what did you learn from Chairman Powell? He speaks a lot, he messages a lot. What was new. In your conversation, I think he made it very clear that interest rates are unlikely to go up until after.

But the standard really is whether inflation gets to two percent or above and be can sustained at that level, and secondly, whether the unemployment rate goes down to what's called full employment. So if you get full employment, let's say four percent or four and a half percent, inflation is at two percent and appears to be going above two percent, then I think he would look at an interest rate increase, but he does not anticipate that happening

before is over. David Rubinstein, the arc of your career from working for Carter Mondale years ago and and also the development with Carlyle of the allocation of capital. In your conversation, did you speak about the distortions to our capital incentives by negative real yields? Well, we didn't really talk about negative real yields because it just hasn't been something that they have really focused on. The offender reserves view is that negative yields is not a really good

thing to do. Now we in effect have negative yields to some extent, But he's more focused on making certain the economy comes back to a full employment situation. That's his main focus. And I would say he's very confident in his position now, he's obviously been doing it for a while. I think he's got the confidence of the of the Federal Reserve Board, and I think he's got the confidence of the Secretary of Treasury, and I would say the President United States as well. I think he's

done a very good job. And as we talked about, he doesn't talk in what I called FED speak. He's not an economist, and therefore he talks like a normal human being, and that's a good thing. So this is a hugely important deal. I really agree with David on that. And as I've said your own, Powell's really grown into

being comfortable not doing FED speak. There is a question of whether also highlights how the Federal Reserve has transformed from controlling the monetary system or sort of setting rates to a much more popular body, basically trying to speak to a broader mandate. And I think about the meaning behind full ployment was that the message, David, that you got from share Powell. He is not in an ivory tower.

He's not an economist. He spends a lot more time up on Capitol hill talking to members or talking with them on telephone than the normal FED chairman does. He regards that as part of his job. His mandate is not to worry about climate change or to worry about minority unemployment, but they do consider those factors, I think in an oblique way, and so I think he's much more sensitive to these issues than maybe some of his predecessors.

In fact, he talked about in a prior interview and in this interview the fact that when he goes the FED every day and he often bikes in um, he drives past a kind of a homeless shelter or a home set of homeless tense, and it affects him and he obviously talks about it because he recognizes the impact of the economy has not been very good on many people in the lower part of the economic strata, and he does worry about that, even though it's not technically

in his mandate. He also waited on cryptocurrencies, and this comes as a coin base went public and he talked them. He talked about them being a speculative asset. What's your sense of his view, I mean, do you think that that is the correct view right now? Or is this a future, not the future, but a future of an entire investing class. I would be surprised if it disappears. It seems to serve a purpose for some people, and I do think that, uh, it's likely to be around

for a while. He did say that people aren't using it to pay bills and so forth, but actually, in some places now I think you can actually use cryptocurrency to pay for certain things. It's a small part of the economy, but I think they're watching it. They're monitoring it. His main job is to make certain that the economy comes back in a reasonable way without a lot of inflation, and I think he's very, very attentive to it. He did work at my firm for a number of years.

I got to know him before he was in government, and I would say he's an incredibly hard working, very articulate person. I think I think that the fact that he has a close relationship with Janet Yellen is a plus. David, I must digress in that you were familiar with the entrepreneurial spirit of the Glazer family of Rochester, New York, the acuity and financial wisdom of Johnny Henry of the

Fenway Group. All these people dabbled in English football. We have seen a complete debacle of people with a lot of money trying to impute a business plan on a culture in society. What is your observation of the collapse of this soccer league across Europe? What is your observation

of how fancy guys got this so wrong? Well, a lot of American entrepreneurs did make a fair amount of money investing in European soccer, typically uh British British soccer teams, and a lot of people were surprised when the Glazier family originally bought Manchester United. It turned out to be a very good deal, and I think John Henry's investment

turned out to be good too. Whether the new effort will work or not, it's too early to say, but it is interesting how so many wealthy people today want to invest in sports franchises, not so much because they love the sport, because they think it's a good investment. You know, a hundred years ago, or maybe seventy five years ago, people often bought sports teams because they really loved the sport. And while I wouldn't say these people

dislike the sport, it's basically an investment kind of process. Now, David's a slow day. I gotta make some news quick here. How much do you love the Baltimore Orioles right now? My goodness, Well, I did grow up in Baltimore, and I am a big fan of the Baltimore Orioles and I am hopeful that they can live up to their glory days when I was a young person. And I'm sorry so how he stepped around that, Lisa, Yeah, the headlines, David. I just think the entrepreneurial spirit you would bring to

the Orioles into an American league, it would be wonderful. Well, right now, I'm focused on this interview and the J Pal which is being broadcast tonight on Bloomberg TV. I spent an hour with him down well, and I wouldn't say that the producer on the show. The producer on the show is done a wonderful job of edding it down. And I should say, Kelly, I want to congratulate her and just getting engaged this weekend, So thank you for there for that and for all the good job you're

doing and edding this interview down. I think it's look if you want to see j Pal and kind of up close and personally a good way to do it, because he really does open up. He's fairly frank, and I would say I have a good relationship with him,

and I think he was fairly open about it. David, thank you so much for mentioning that, and of course, with Kelly's been doing for you and all these interviews from Jeff Bezos and on his well, David Rubinstein with Jerome Paul and as Mr Rubinstein mentions, it is a piercing and different interview than the usual that you hear from Jerom Poe. Abraham rock Berry joined this Now City Global head of FX Analysis. Now, Abrahim, the conversation that the debate is pretty simple. Has we just paused or

are we set to reverse? What do you think it is?

Abraham greater to me back on the show, Our view is that we're only pausing and that we are very much in what you called this exhaustion phase where a number of I think the more challenging trade that trends have exhausted just as much as maybe the stabilizing forces that we've seen over the last two weeks or so, with you know, rates probably finding just about a bottom, but also actually some of the more positive sentiment about maybe peak pessimism about the third COVID wave in Europe

or maybe in a place like Brazil, even also already being reflected to some degree in market prices. So we think this is probably no more than a period of consolidation, but that that cyclical trade still has further to run in the coming months. Every within your very sophisticated notes, there's a lot of mathematics and correlations on the linkages of asset classes. How LinkedIn smooth are the dynamics working right now or is it all this steph, is it

all dis greed and separate? Well, they have been somewhat unstable for for for for quite a while, and that's in line with I think these uh if you like,

the most fundamental market trends changing. But I do think there's one correlation that is both unstable but equally ultimately very stabilizing for broader mark borod markets, and that's between rates and risk acids, and the fact that we've seen probably the volatility of US rates top out here that we are probably in the arrange for the US ten year rate of between one fifty one seventy five for the time being. I think that puts US back into a world where equity prices and risk acids can resume

their ascent. So it is not quite maybe a negative correlation that is re established there, but there is hope for the so called risk charity trade now that US rates have have probably peaked in the short term. Ebra him. I've seen a lot of analysts talk about the reflation trade as a monolith, basically this idea that it has been consistent throughout the past few months. It has not. The nature has changed significantly over this period of time

in terms of what's getting reflated. The US was the dominant reflated trade based on the economic prowess of the nation. Why is that not going to continue as the reflation trade gains traction as you say it will. Yes, I mean I would highlight two I think changing developments over

the last couple of months that are notable. One was, as you said, US exceptionalism, and there our view is we've probably peaked out in the exceptional nature of that, and the rest of the world does have hope of maybe catching up somewhat, not converging, but catching up somewhat. But the other is that even in the US, what's happened over the last month or so is investors have decided that they are not extrapolating that exceptionalism too much

further out. So if you look at the US rates, US inflation expectations, if you go a couple of years out, when investors are telling you we're getting a big impulse to growth and inflation in the very short term, but further out we might well be going back to where we were. And again, that was very important for where US rates are, and it's very important for whether US it's relative to the rest of the world. Our view is we're still in a more or less synchronous global

recovery environment. A few months from now. Give us a conviction of the dynamics of the euro. We've got eight nine, ten houses for the most part, all looking for stronger euro. But it is a path of one three even after one thirty. I need to make some news here this morning. Give us a City group conviction on that path. Well, well, we have been on the on the higher side for euro dollar for the year. We came into the thinking

he could go high as one thirty. Now we think it's probably in the one to one twenty seven fifty range. As a as a target. I will note that's reinforced by the more recent trends, reinforced by people moving back into dollar funding, which boosts the value of the euro, so cutting short positions in the Europe as a result. But I will also tell you where our optimistic case on the euro will end, because we've already started to hear a few murmurs and noises around the French election.

So later in the year, sometime in the second half of the I think that will start to become a market theme that will be a prime candidate to top out of the euro. Dollar is in Abraham, always good to catch up with you, sir, Thanks for faming with us. Abraham ra Barery, the City clubal head of ex analysis. Oh Berto Gallo with us, John, I want you to

go to Mr Gallo with with your wisdom here. But John, I first want to talk about in the Super League blow up, we've been making jokes about leads, but this is not funny. I mean, leads has succeeded over the last number of months and the toughest thing in Italy like leads is Gallows, Naples or Napoli. I believe it's called I mean the fact is there's a real parallel here,

isn't there. And Napoli has been one of the clubs in Italy that has actually managed to challenge you've into dominance over the last decade, coming close to winning the title a couple of times. And they are a great example tom of a club that would have been frozen out of this European football league with little chance of joining it, and the leads of this world, the Napolies of this world that have had in times at times some kind of European heritage, wouldn't be able to get

back in and conquer those names. And I think that's the beauty of sport that even if you're a small club, that somehow you can climb up the ranks and get it done. At some point, give us a give our American audience a window winter this. We've got a guest qualified to speak, Alberta Gallop, Algebras investment portfolio manager, was hoping you'd talk about the credit markets and it's two and a half percent game year today in its credit fund. So we've got to start with Napoli first. You'll take

on the events of this week, Albert. So it was a Napoli fan that would have been frozen out of all of this. What did you think? Well, I think this is the time for markets to an also society to fight inequalities or we don't want it at the social level. We also don't want it at the sports level. Or you know, even though they're a few teams that are wealthier, people want to have a game with despair and where also, you know, the less wealthy teams can compete.

Same with society right where we're definitely we don't want to go in that direction to encourage in equality. He fights in zero right as a port filio manager is well not better? How are you getting on? This is a much tougher year because we have seen that at the with the extreme crisis that we got last year. You know, we've had central banks, emphisis of policy all pushing down the accelerator. The result is governments have more dead and central banks have had to do more. They

continue to do more. What we see today is real yields are negative everywhere and there is sixty percent of the bond market yielding below one percent. So before and over the last Mareny years was very easy to make money bonds. Now it's much tougher, and that's where alpha also surprises more and it's more needed by investors compared to where we were before. Uh, it's much topper, but we still find a few opportunities. However, I would say the second half of the year we think would be

a lot more volatile than the first half. We got some bigger risks on the horizon, and markets are very complacent now, Alberto, where do you see a boom economy outcome to see price up and yield down? I just I'm fascinated where you are in your head Q three, Q four, even the first quarter of next year. How do you get there? So you know. In the first half of the year, especially Q one, the big news

was the US fiscal stimus, the new administration. The point this firepower not just to combat the virus, but also to create new growth. This news is gone now. We have, yes, our government spending like Europe, but it's much slower and ahead of us. We have three big risks. The first one in central banks might withdraw the paunch bowl. At some point there's gonna be a discussion of tapering from the Fed, and it could in Q three Q four.

Already the second risk is geopolitics. Russia and China are teaming up against the US in Ukraine and in Taiwan. There's also a shortage of semiconductors that's gonna affect you know, they're testing the Biden administration. This risk is not really priced in by markets. And then the third risk is that the vaccines are still going pretty slow in Europe and in a lot of emerging markets. You know, the economy is the non US, non UK economies are going

to take a lot longer to reopen. So it's it's a really key shaped recovery, and markets are have been pricing a B shaped recovery, so we're going to see more volatility in our view in Q three and Q four today where the record low levels for credit spreads, in high yield in investment grade, we have the one hundred year low wipe out buffer the lowest yield level on US investment grade, so we're really really thin levels. Markets are priced for perfection. It's time to take a

step back and focus on hedges and protection. So hedges in protection, can you elaborate on what protection means at a time when there's fear of rising rates of premier of early withdrawal of volnetary stimulus as you were talking about, as well as are we priced to perfection on the risk your credit side, we're almost prised to perfection. One of the protection that you want to have if you're fixed income investors exactly prevent a declining price from a

rise in rates from a rising inflation. And you know, so far treasuries were leading the widening. We have seen also European bonds, you know, boons and and BTPs have been widening more. And you know, the bar is much lower for Europe because everyone has been verished. So for boons to go to zero, for example, between and your end, you just need a little bit of positive US, a bit of spending, and some agreements on the EU Recovery Fund.

So that's gonna drive boons a little bit higher. You could wipe out all your carry if you have a very high duration in credit. Similarly, we have a lot of firms that have not restructured and are pretty levered trading at really low spreads. You know, US sill spreads are close to two and eighty basis points. There is very little chance of um you know, making money during a cycle if you invest at that low level. At some point you're gonna have a You're gonna have a problem.

So it's just a matter of when. So the question there is how to engineer strategies that had your portfolio or to have enough liquidity to buy when other people are selling. That's that's exactly what we're doing. You have to be a bit patient, but you know, chasing the market now is um is foolish in in fixing, you know, bonds are very negatively convex for investors, but it doesn't mean you can't make money. You can make money when

volatility comes back. Here's the conundrum that, yes, this makes perfect sense based on historical investing principles, and yet every time that we see a sell off in rates, if it gets a commensurate sell off in credit, you get a flight to safety. That flight to safety is bonds. The yield goes lower, and we get a reset of where we were before. Put on repeat, play it again. That is what we have seen. Why are we going into a new regime where that perhaps is not the

cycle that we're going into. There's two options for policymakers. One is to make the bond market reprice quickly. That would also entail higher funding costs for different treasuries around the world. Policy makers cannot afford that, So that's the second option is to impose on investors and negative real return.

So having inflation at two and a half or three percent in the US by interest rates of one and a half to two and that's probably what's going to happen, so essentially bond investors, but that means also insurance companies and pension funds will lose money slowly instead of losing money quickly. It's a second best option, but it's still a very bad option. So as an active manager, as ventially, what we have to do is to trade these cycles, these policy cycles of widening in rates which will not

go back to a positive level against inflation. You've also got you You've got a trade Alberta as well off of what ECP does. I guess there's a La guard message. Are you more interested in what she says? Are you more interested in what she does not say? We're more interested in what she doesn't say. At the moment, there's not a lot of things the ECB can do. They're basically running on all cylinders. But the question is when will the discussion about the end of the emergency purchase

programs start, so tapering and UM. And also there's other long term discussions about the strategic review of the CP, about average inflation targeting, which are going in play, you know, during the summer. And finally, there's another more important factor here, which is central bank digital currency. A lot of central banks have walked about this, and ultimately this UM is something that could unleash a lot more livers for Montreal policy.

For example, interest rates could become a lot more negative, or central banks could inject money to firms directly. So that's the ultimate frontier. It's not for today, it's not for this meeting, but it's a lot more interesting to hear what they don't say now, Bets. So we've gotta leave it there. It's gonna hear from you said on football, of course, and a little bit on credit, the markets and the CP coming up tomorrow, Bets. I've got to

catch up Bets again the Avoultebrisk Investments Portfilio Manager. This is the Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays from seven to ten am Eastern and Bloomberg Radio and 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 In. This is Bloomer