Surveillance: Fed's George Drops Hints at Jackson Hole

She sat down with Bloomberg's Mike McKee and Kathleen Hayes. If you think about how tight the labor market is, we are operating with an unemployment rate that is below I think what most people would consider to be a normal or natural rate of unemployment. So that suggests to me that to get loosening in that labor market, to see some of this tightness come out of the economy, that you may well see more unemployment meant in the process of this tightening cycle. Well, you got two camps.

One that says you need to keep going no matter what, and another that says you need to be careful because these are real people who lose jobs. So how much unemployment is too much well, I think anytime someone is unemployed that doesn't want to be Uh, you care about that? I think in the long run, which is where I'm focused, you have to have a sustainable economy and the best path to full employment is going to be conditions of

price stability. And so I think for the long run, that's where we have to be focused to bring inflation down so that we can have those conditions. So what are you looking at when you see the housing market? We saw penning home sales with the weakest again since the beginning of before the pandemic. Even mortgage rates have shot up. We know all kinds of people who backed out of wanting to buy a home because they're expecting prices to fall more So, is that a welcome tightening

and financial conditions? Is it a little bit more than the thet is bargained for? Well, I think it's been one of the first places we've seen it. So you saw that initial tightening and mortgage rates very quickly early in the tightening cycle, and that of course does affect the economics of someone being able to afford a mortgage,

make that payment they need to pay. So in some sense this isn't surprising to see these numbers come off, to see sales come down, whether the actual prices the housing valuation comes down consistent with that, I think we will still have to see, and I suspect that could be to come. You know, you just mentioned that the funds rate could have to go above four percent to get to the point where you're slowing down the economy and and really slowing down demand. Uh. John Taylor, author

the Taylor Rule more. You know, well, just a couple of days ago on Bloomberg Television told me that he thinks the Fed should be aiming for five percent or even more if inflation does not start coming down more rapidly. Well, I think certainly if we don't see a response in bringing this imbalance between demand and supply to bear on inflation, um, we will again have to consider where that short term interest rate is going to have to be. You wouldn't

roll out something that high. Well, I wouldn't rule it out. I'm not suggesting that's where we're going. But the other thing, Kathleen, that I think we don't talk enough about is the sizeable balance sheet that the Federal Reserve has and that we will be doing runoff of that balance sheet, and again understanding how these two things work together. Um, I think it's going to be important to see how that

runoff works as we go through the year. And that's the other part of this rate increase environment that is important to watch. I think, what's the danger of a session that you see and what would you see it in in terms of indications that we are slipping into contraction. So you know, again, when I go around my region, I don't hear many signs of that, uh from our contacts. What I hear is tight labor market, price pressures, supply

constraints going on here. I will tell you when I look at global growth though, so we've seen the i m F cut its for cast for global growth. We see the issues in China, we see Europe, and we know that that reduction and demand will affect our own growth here simultaneous with the tightening cycle that the bed is underway. So how it how it comes out and

balance over time is hard to know. But I think again the focus on watching these in violence has resolved themselves, We're going to have multiple factors that will come to bear on the President. Biden has now introduced a student loan forgiveness program ten dollars or twenty depending on the program you were in per person, which is going to cost billions of dollars that a lot of economists are worried this is going to be inflationary? Do you see

it working against your goals? So I haven't looked at this particular decision that came out, but I think always fiscal policy is something we will take in to understand. Is it an impact in the short term? Does that happen over a period of time that makes its particularly impact of the economy there? So I don't have a

sense of the particular impact here. Again, given the size relative to our economy and what we're looking at in consumption, UM, I'd be hard pressed to say what I think it's impact is right now speaking of your district, speaking of the world economy and what's driving at right now. Drought is big. It's across much of the Western United States in Europe. Now, Um, where is it the point yet where it enters into a factor in policy and is something like drought and what it could do to production,

our cultural production, all kinds of things. Is it potentially a drag on the economy which tilts you toward recession potentially is it's something that boost inflation because a lot of prices are going to get even higher, particularly for food. So issues that affect our real economy or things that

I think we have long taken into account. You think about a region like mind where agriculture UM is prominent, the idea that weather events, the idea that commodity prices all come to bear on how the economy does what it contributes to GDP where the constraints are UM in that sector. I think these events just our continuation of some of that and the magnitude of them may change.

But I will tell you, for example, in the Kansas City Fed District, drought in the western part of our region does have an impact on the yields that are coming off these crops. Now, it will matter over time. Uh. Farmers are used to dealing with that in many respects. Banks that lend to them are used to dealing with that, and I think in that sense, UM, it will have the same impact on our policy that we see across

many sectors in the economy. A very near term decision and every Fed Bank president, every FED official gets as this all the time, UM, and especially you, because you did dissent against the first seventy five basis point rate hike, and you just recently said you're going to continue debate the needed size fifth year seventy five with your FED colleagues. So again, when you see how well the economy is holding up and how little inflation has come down this far, um,

what is your baseline? Is your baseline fifty and you're gonna be talked into seventy five? What's going to tilt the balance for you? I mean I supported seventy five at the July meeting, and I find it an interesting time when we debate fifty or seventy five because who would have thought fifty would have a more dubbish view,

uh than seventy five. I think for me, coming into this September meeting, we're going to be looking again at an inflation report, We're going to be looking at a labor market report, and I think trying to draw some sense of whether we see continuation of things that we've seen over the summer, whether progress looks like it's meaningful in some way. I do look forward to getting back to a sustainable rate path. That was my issue at

the June meeting. Again, No, no, disagreement about the direction we are headed, but I think just being mindful of the destination and how quickly we get there at a time when we're reducing the balance sheet. You've been doing that for a long time. The old adage was don't fight the fit. Why do you think the markets are fighting the Fed now and not listening to what you've been saying about how serious you are about taking on inflation. I don't know what drives in the markets, Mike. I

probably would not be a well positioned to say that. Certainly, it is important for our communications to be clear because we want financial conditions to tighten along with the direction we are moving around policy. So I think it puts a premium on being clear in our communication of having resolved toward the end game here and again, the end game is to bring inflation back to our two percent target, and um that's challenging and the environment ran we're coming

off an unprecedented period. The economy, I think, in some respects is still sorting itself out. We have global factors to take into that, so there's a lot to think about. I'm sure markets are thinking about that even as we proceed with this interest rate increase. You're retiring at the end of the year. This is your last economic symposium. How do you think economics and the economy and the FED have changed during your tenure. Well, a lot has

been done. When you think about the Great Financial Crisis where the introduction of quantitative easing came about zero interest rate policy. Um, has been an extraordinary time for the economy, for policy to think about how it responds to the economy. Also coming into a time when we have demographic changes, really broader changes around the world. So the world continues to evolve in ways that sometimes look clear to us,

sometimes don't. But um, Well, in this vein of of here, you are about to end your wonderful tenure at the Kansas City FED. This last part, I would think is one of them one of the very most difficult parts seeing inflation get out of control the way it has. What's the biggest lesson learned for you? Uh, for the Federal Reserve after having gotten into this situation and now

needing to get out of it. So, Kathleen, really I'm going to answer that question by saying, this is one of the things I'm looking forward to with the conference that we have this year. Is really reassessing how we understood constraints over the last couple of decades, finding ourselves again in a place of high inflation which we hadn't seen for some forty years, and really being reminded what

are those factors that are important to price stability? We know as our mandate that that hasn't changed for a long time, even as the economy is evolved, even as the tool kit may have evolved. But getting back to really thinking about how price stability is achieved even as the world changes, I think is going to be an important part of this discussion here at Jackson Hall Symposium that was the Kansas City Fed President as the George

sitting down with Michael McKay and Kathleen Hayes. Yea, let's get to the theme at the moment at Jackson Hawaiian in case the title reassessing constraints on the Economy and Policy. Let's have that conversation now with Glenn Hoover, the Professor of Finance and Economics of the Columbia Business gool going, great to have you with us. Can you frame how challenging this moment is for this fet chair. Well, I

think it's it's very challenging for two reasons. One, it's momentuous time in the economy with both significant uncertainty about inflation and recession too. It's important for him and in communication.

I actually have a hold whip inflation now button here from a Ford administration, and I think Chair Powell needs to do a bit better in expressing warsome candor about the past, not necessarily be a culpole, but for what happened and about the future what it's going to take, as well as talking about the difficult path of get inflation all the way back down to two percent, getting it down to four maybe straightforward, getting into too much

heart Glenn Hubert. The arc of Republican economics, represented by so many here at Jackson Hole is that the system will solve itself. Is a general statement. Is the religion of supply side economics or the religion that the American economy can heal itself? Has that failed? I don't think so. I mean the economy is a lot of self equilebrating mechanisms. A question is over what time period in the presence

of such a large shocks. I think policy still has a role to play and had a role to play in the COVID pandemic, and the FED just can't wait to let inflation work itself out. So Dean Hubbard, Glenn, what's your view on our debate that we were just having about whether this FED chair will speak to markets, what he will say about their enthusiasm about some sort

of pivot or some sort of pause in federate hikes. Well, I think the message he could give, going back to the point I said about candor about where we have to go, is what it would take to reduce inflation. I don't think he's literally going to lecture the markets and say the stock markets too high or something like that.

But I think he can outline a path that says we have work to do, getting that work done requires tighter financial conditions, and speaking in general terms, I think that would be wise to make that kind of communication to the public and to the markets. There was an

article in the Wall Street Journal. I keep mentioning this because it really caught my attention about whether we have seen the end of the low rate policies, is what PIMCO is put out there, and the possibility of inflation remaining high for a longer period of time due to a de globalization due to structurally higher commodity prices due to a lack of investment over the past few years. Do you buy into this theory and if the FED does, what does that mean in terms of how high rates

have to stay and for how long? I think there's certainly something to the fact that we have demographic changes, structural changes, globalization changes. Be hesitant to draw straight lines and say that's just going to be permanent, but I think it's definitely something to watch. To my mind, the concern for the third eye, there's probably two worlds, one in which we keep inflation expectations anchored around two, the

other in which they go off kilter. I think that's the challenge the chair faces, and you'll have to quote do what it takes to make that happen. Like Glenn, thank you, sir, it's going to hear from you as always. From Columbia Business School. We're really happy to say that John to gets Mohammed area in a flimp bug opinion and Colleen's College, Cambridge. A man who unlike this FED chairman, called this, called this inflation spiral. Mohammed, let's go straight there.

The challenge for this FED chair and this annual FED gets together. How big is it? It's huge, John, and good morning. It's huge because he's speaking to multiple audiences, as you pointed out. But it's also huge because he's got to deal with issues with respect to the past, the present, and a few He's got to figure out how he's going to address his speech last year that proves so off the mark. He's got to figure out

what to signal about current monetary policy. And let's not forget that we have a framework that is not fit for purpose. We have a policy framework fit for world of deficient aggregate demand, and we are in the world for deficient aggregate supply. So put all this together, the challenge is very big, John Mohammed, you're focused on a new word, stickiness, and you've been focused on that for a number of months now. From the incoming information, How

sticky do you think that inflation dynamic is? And how much does that tell me about how much work this chairman still has to do. So I worried that core inflation is going to prove more sticky than the FED anticipates. Right now, we have wages are starting to be a driver of higher cost and eventually higher prices. So while headline inflation is going to continue to go down for the next two months, core may prove quite sticky. And

that's what a problem, Folter. For those of you have Bloomberg Radio and Bloomberg Television, you just saw a little bit of light going out. That was one of the grizzly bears standing up and getting in the way of the light. Here they're watching here this morning as well. Dr Larry, and people forget why you are, doctor Hilarion, and it has to do with the acuity and concision of your game theory. You codified in a modern day

the phrase T decision. Let's distill that down to the T decision that Chairman Powell has to make between now and a data busy September. And it's an important one, Tom because right now the FETE is so late that it's looking at two challenges. It's looking at putting the inflation genie back into the bottle, and it's looking at not creating too much damaged to the economic growth and inequality, something that you have been speaking to all morning. Look,

I don't think he has any choice. He's got to put the inflation genie back into the bottle. You know, that and all saying that Maco stability isn't everything, but without it you have nothing. So they've got to put that inflation genie back into the bottle and do it in a determined and sustainable fashion. Okay, but this is the politics of it, Dr Larry. And if you have a partial differentiation from eight percent US inflation, the halves

are benefited. When you get to six percent or five, the have nots, the great middle class are still flat on their back. What is your timeline where all of America finally gets inflation back into the bottle. So it's gonna take some time because the FED has been asleep at the wheel and that's unfortunate. Tom. What you raise is much bigger. It is speaks to the FED being necessary but not sufficient to address our policy issues. Um,

you've got to deal with the inequality aspect. You've got to protect the most vulnerable segments of the population with focus um fiscal policy, and you've got a lot to do a lot more on productivity and equal opportunity. So it's a long list, but the FED has to focus on inflation and has to do it in a more committed fashion. That has done it so far, So it's

been trying to sound Mohammed committed, right. I mean, if it's basically been saying inflation is or number one issue that they're facing, why is the market not hearing it? Two reasonsly, so, One is the FED itself. Let's not forget that. Chappal hinted not hinted, stated that we were at the neutral rate. The minute the market heard that, it moved, and it moved in a significant fashion and

all the talk about pivot started being amplified. So that's one reason that the communication hasn't been consistent and that's been a problem for the last year. And the second issue is that the market is looking at the impact on growth, is looking at this at the potential impact on markets. And as John said earlier today, we remembers fourth quarter of remembers the FED blinking, so it believes on push comes to shove, the feed is going to

blink again, that we're gonna have a flip flopping fed. Ammmed. What I hear from you is that you don't think this FED blinks anytime soon. I don't know, John. I know what they should do, which is they should not blink um. But it's been very difficult to call this fed. This fed has unfortunately failed at analysis, failed that forecast, failed that communication. So it's very difficult to say what

this feed is going to do. It's easier to say what it should do, but it's much it's much harder to say what it should what it's going to do. And that's why you get this disconnect that you've been talking about between the markets and the fat. Easy to find out what you think. So let's go there and wrap up this segment with you on what you think. Larry sum has called that neutral comment analytically indefensible. You said on neutral, and I think you're a little bit

more diplomatic at it. When we last spoke, you said the zip code for neutral was hard. And where we are right now, Mohammed, what is the zip code for neutral? And how on earth do we know with inflation where it is and where race where they are right now? So I don't know specifically where it is, and I've been warning against spurious precision. There are so many structural

changes going on. We are changing liquidity regimes. I said earlier, We're going from a world of deficient aggregate amount to world of deficient aggregate supply. That's the world we live in now. No one knows for show where neutral is, so you've got to try to figure out as you go along the way. And you mustn't attempt this purisk precision because if you do, the market is gonna jump immediately to conclusions and then you're gonna have to undo it.

You know, the Fed itself federal officials have walked back that comment. It didn't take many days for other federal officials to come out and say we're not at neutral darker Laura and I want to go to the international tone here central banker of the world. And the singular feature I have is the focus is on Plaza chord like partners. When there is e M forget about idiosyncratic turkey out over eighteen Lira. What will be the shock of Powell action to a more fragile emerging market of

and third world economies. It's a high risk situation, Tom. You have higher rates, so more uncertain market conditions, you have global economic growth slowing much faster than most people expected, and you have a stronger dollar. Historically that has not been a favorable mix for for imaging economies. So right now, how much does this bleed back to the U S economy. How do you bleed through the pain that you're seeing in Europe, in China into slowing US growth and entering

a recession? You know? He said, The quick and easy is to say that everybody has an inflation problem, everybody has a growth problem, and that's true, but go further, have massive dispersion um growth. The US is in a much better place than most other countries central bank policy. If we think that the FED faces tough challenges, look at the ECB. Not only do I have high inflation, they have a much more fragile economy and they have

the risk of fragmentation. So I think the theme going forward is going to have a strong element of dispersion come into it, and that makes markets have to spend a lot more time thinking about relative values and not just the overall beta if you like. When you take a look at the framework, policymakers are starting to think more about a structural inflation that will last a much longer time due to deglobalization and due to the sort

of structurally higher commodity costs. The market is not buying it. They are still betting on some sort of return to what we've experienced of the past few decades. We know that, Mohammad, you air on the structural side, say, that's probably where we're going. What will it take for the markets to wake up to that reality and how violent is that pivot?

It's gonna take time. Um, you know, I'm a buyer of the notion that we are changing macro regimes, as I said earlier, from deficient aggregate demand the deficient aggregate supply. You pointed out to the Wall Street Journal article earlier that listed three reasons why supply is going to be a challenge in the next few years. Globalization, deglobalizations, et cetera. So we are in a different regime. I think the economists recognize this. I think the federal official semi recognize this.

Markets are still in a cyclical mindset and it's the mindset that has served them well. So it's going to take some time, and it's going to take persistence on the part of central banks to try and convince markets that they have to think structurally and not just clicarly. So, Mohammed, with that in mind, what are the characteristics of this

new market right? What do you think the defining characteristics and will be I think resilience are gonna be the key issue, John, I think you've got to have resilient names in your portfolios, whether it's in credit, whether it's inequities, UM and resilience means balantreat means management teams. Resilience is going to be the most important element to help you navigate this world. Can we talk about the resilience of

Europe and finish there. We touched on that at the start of this segment when you talked about the difficult to the a c B. European gas prices are up by six and a half percent against a Mohammed, I still don't think we fully realize how tough things could be in Europe later this year. Do you sense the same thing from the people you speak to? And can you frame how bad do you think this is going to be later this year? It's gonna be hard. Um,

It's gonna be a cost of living crisis. You see it already in the UK, and you see the reaction in the UK much earlier than you're seeing it in continental Europe. And on top of that, there's going to be a massive demand destruction going on. So Europe is looking at a tough six or nine months. I, like some others that have been on your show, don't see how Europe escaped recession. I hate saying that, but the outlook is one of a recessionary economy, and let's hope

it's shallow and short. Uh Mohammed Augustin Carstens of Mexico, now General Manager the Bank of International Settlements is published today in the F two with Chris Kyle's It's an extremely important piece about our behavior, our individual gain theory with higher inflation. What is the when where we begin to embed high inflation behavior? Are we there now or does it wait for next year? So it depends who we are. UM. If you are the striking UM ports

workers in the UK or underground workers, you're there. You're ready there. Your inflationary expectations have changed. You want to attect your standard of living. It's only a matter of time until they seek not only to protect against past erosion and purchasing power, but also future erosion in purchasing power. So you're there in the US. You're not there yet, but slowly you're gonna get there. And what we're gonna find, Tom and I know you know that in terms of

game theory is that initial conditions very tremendously. Some workers and some companies are going to be able to protect their margins, to protect their purchasing powers. Others will not. Mohammed, wonderful to catch up with you. You're getting comfortable in some seat over there, I am. I love the microphone. It's a bit cold, though, I must say it's colder here than it is where you are. There. You go, Mohammad at New York today. Mohammed, thank you just absolutely

brilliant as you always are. Thanks for Artica Servesa Supermanium joins us now Servesa, fantastic to have you with us. I wanted to start with a note that you actually put out a number of weeks ago, and the title was something like, why are we so happy with eight point five cp I? So why was this market so happy without point five cp I? Look, I think that part of it was the idea that we're off peak. But our point was sometimes the second derivative doesn't matter.

Sometimes it's the first derivative you want to pay attention to. An eight and a half percent c p I is really far away from two or three percent, which is what we believe the market is pricing in um, I think that you know, when I hear the bullish arguments for you know, kind of justification for the rally that we've seen from July or you know from June, I guess, um, it's it's two things. It's one, we've moved past peak inflation, but wages are still strong, so the consumer is still

going to be okay, therefore soft landing. That's one bullish argument that I disagree with. And the second bullish argument that I do agree with is that we've seen earnings better than feared, we've seen results better than feared, and everybody points to really strong top line and um, you know, sales growth for the SMP. The problem with that is that most of the work for sales was coming from energy Energy group sales by eight percent. Everything else was

fairly lackluster. And then when you adjust for inflation, when you take that nine percent print of inflation out of two Q sales, the sales for the SMP five hundred x energy were essentially flat. More companies in the SMP five undershot inflation in sales couldn't grow sales faster than pricing, which is really, you know, kind of a weird set up versus the other half that managed to beat beat CPI.

So I think that what we're point what we're all looking for our reasons to get more bullish, But the reasons are pretty thin. If you ask me um on peak cp I and strong still strong job costs, I mean I see that as a still strong labor I see that as overwhelmingly negative because what that means is pricing power for the average corporation is starting to wane. Demand is starting to wane, but wages, which are the biggest depressant on corporate margins for the SMP five hundreds,

are sticky and high. I mean, why are we celebrating about this? I just don't get it. And that was the essence of your notes surveated. We caught up with Mike Wilson and Morgan Standy yesterday, who's very much on the same page as you at the moment on some of these issues. Take you listen to what you have to say. The old fire and ice narrative is coming

back into plates. We're in a downtrend, and until the market can get back above that downtrend, I think to be making some you know, grandiose call about new highs is is quite frankly, it's irresponsible. Given what's going on with the FED and QT coming is bob laid out, It's going to be a lot worse than people have experienced so far. Price is wrong and Darnings are wrong again, which means the attractiveness of risk reward today could be

almost as bad as it was back in January. Sevenda, you're back at thirty six hundred on the SMP five hundred, that's your forecast. What's the fetes role in that move? Love, whether you're looking for Look, I don't think the short end of the curve and what the FED is doing at the short end matter as much as the long end.

And I think that what's bizarre to me is that, you know, I think this laser focus on you know, sort of inflation prints and on a monthly basis and real time reads on inflation, and what is the FED going to do? Are they going to hide fifty basis points or twenty five? You know, are they going to start cutting? I think all of that is second to what happens at the long end of the curb. And you know, I like that that that that phrase complexity of the moment because I think this is a very

complex moment for equities. And the reason I say that is the duration of the SMP five hundred is still above thirty years. We're looking at as earty year zero coupon bond. So what that means is that a mere fifty basis point change in the cost of equity capital, which is more influenced by the long end, could drive the market either really high or really low from here. And I think that's what makes up the complexity of the moment for equities. Sevina Brian moynahan takes immense pride

in studying the granularity of American business. It is the franchise of your Bank of America. What are you in the cell side at Bank of America, the research analysts, what are they saying about how corporations are adapting and adjusting to these complexities? Well, you know, you're right, So corporations are adapting and adjusting, and it's really marvelous to watch.

But I think that what that requires is a fair amount of capital spending from the big multinationals that are in the process of, you know, rejiggering supply change with supply change, which is a complicated and long long process that costs a lot of money. Um. They're also in the process of automating labor, which has gotten that much more expensive. So this is all really good for long

term productivity of corporations. We haven't seen a real capex cycle in a long time because earnings have been void by low rates, buy backs, all sorts of imaginations that aren't real economic growth. But I think what we're seeing now is the beginnings of a real, you know, a real growth cycle driven by companies getting more productive, and

that is very bullish for the SMP five hundred. Unfortunately, I think it takes a little while to get there, and it also costs a lot in terms of capital spending. So what we like within the market are the more domestic plays that could benefit from that capex cycle. And still hall our Smith strategist has been talking about this, um, you know, on your show quite a bit, so I think that's a great area to start to deploy capital.

But multinasmist for the time being up, Yeah, I mean I think multi from Savida, well, hold on a second, Savina, this is actually exactly where I wanted to go because basically everyone's calling me a baron dressing me up this one on internet. But I am wondering from your perspective, Well, there is which is Okay, I I accepted, I embrace it. I'm not scared of that. Um. Yeah, we'll just say that there is the sort of bullish tilt. There is

no I ambrase it. But if you know what is the after hundred right, this is at the distinction between the long term bowls and the long term bears right thirty six hundred, is that the new low that is Catharsis that then leads to adjusting and adapting of Tom Keane or is this a more protracted loss in the momentum and frankly the valuation of US equities. Look, I think this is all happening at a warp speed. So at the beginning of the year, our long term model

was pointing to negative returns for the next ten years. Today, the good news is that after this massive drop in the market and lower not low, but lower multiples, that model is spitting out, you know, mid single digit returns for the SMP five hundred for the next ten years. That's a much better set up, a much better entry point. I do think that point in point in time targets are fraught with all sorts of problems. But I will

tell you this. I think that the fact that just a mere fifty basis point change and the cost of equity capital either long rates or the risk premium could drive us to our target of makes me worried about the downside risk to me. And I've got a key question is for all of global Wall Street. They know you on the high ground on E S G investing. Essentially you invented it is E S G investing dead? Where is it in a year? I'm serious? Where is

it in a year? You know? I think what the problem right now is that investors are throwing the baby out with the bath butter. And we've done a lot of great work on you know, and we've talked about our work on your show. E S G Investing is nuanced. It's not one size fits all. Different sectors have different factors that are more important for driving, uh you know, social factors are more important for labor intensive innovators. Environmental

factors are more important for energy and materials. So it's not just some kind of you know, one size fits all. Apply this rating to your entire portfolio and you're done. But we do think that there are a lot of E s G considerations that are being ignored in this uh you know, kind of refusal to even think about E s G in an environment where it's drawing a

lot of fire. Um. So I think it's a it's a complex, nuanced topic, but I still think that there are lots of ways to make money and this is a huge deal And was in Davos some years ago. Was that three or four years ago something she and Brian moynann said, we're going to actually do the math of the E s G And that's where they provided leaders would have thought we'd be talking about cold exactly.

This is the Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays from seven to ten a m. 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 Bloomberg