Surveillance: Fed Tightening May Be Back In 2019, Dudley Says

He opens Open Arms June seven of two thousand nineteen Into the future, Indian sources report a border incident on the line of control. In cash Mirror, Mr Cable joins us today. Vince first of all can graduations and getting out in front of the news is I have never ever seen in fiction? How did you do that? Well, it's it's it's a political thriller and a love story, and it's set in the UK. But I have a longstanding association with India and I first first went there

over half a century ago. I have Indian in laws. I love the country and I'm aware of how important it is, but also of the dangers of conflict. And you have these two nuclear powers, you have a big division based on religion, and of course those divisions are reflected in British society because we have a large form Pakistan former India population. And I set my drama around

an arms contract between Britain and India. At your post Brexit, Britain's trying to push arms exports and we we find ourselves in the middle of that historic conflict, which remarkably has remained subdued for for many years, and give them the potential for damage. What do we misunderstand? So this is a thriller. Yesterday we you know, we saw the tensions unfold actually in real time, and we've covered it extensively here on Bloombridge surveillance between Indian Pakistan. But what

do we misunderstand about the shift in geopolitics around the world. Well, I think probably we're underestimating the risk. I mean, these are two nuclear powers. There is an unresolved dispute of a territory which is also reflected in populist politics. I mean, both these are democratic countries. They both rely heavily on the Indian governments on kind of Hindu nationalism, the Pakistan government on Muslim radicals. Um, you know, temperate temper, temper

as easily rise. I mean, we've been fortunate that they've had some very rational statesmanlike leaders on both sides who steered and clear of conflict. But the potential for disaster is I'm afraid also real. But is this the retrenchment of you know, the the superpower that is the US is from playing a bigger role in the region. Well, it's certainly part of it. I mean, actually, at the moment, I think probably China has more influence in the region

because of its very big investment in Pakistan. But the United Nation, the Artied States traditional they played a role in both sides. They valued India because of its economic importance and its democracy. Once upon a time, you may remember J. K. Gab Braith was sent as now as a symbol um. And of course on the Pakistan side, the United States supported them for geopolitical reasons. The United

States has largely walked away. Uh. And then that's one of the factors that I think adding to the installability Dr Cable, as you mentioned John Kenneth Gilbert through working with John F. Kennedy a few years ago and all that symbolism. You attended the meetings of Endurer Gandhi and Margaret Thatcher of another time and place, give us an update. What is the special relationship right now of the United

Kingdom with India. Probably not as big as a lot of British people would like to believe, of course it is was probably part of the British Empire. We left a big legacy, much of it good, some of it bad, including the partition of India. Um. But the real role that Britain plays is the fact that we now have a substantial minority in the UK of migrants who came here from the subcontinents some of them from Passion, from Pakistan, many of them from Kashmir, and many Indians who came

here as well. And so in a way, but the good and the bad of the Indian subcontinents has been transplanted into British society. That's that is the main link we now have. How all the world's economy and I guess linked to that geopolitics change in the next ten years. Well, because India is becoming a superpower and this is it will I mean in population terms, it will overcome overtake China.

Its economy is extremely dynamic egg um and it's it's a peculiar case I think it's a very state controlled economy, but with a very dynamic private sector. There's this saying that they in India the government goes to sleep at night and the economy starts to function um and it is growing at you know, six seven eight percent a year. It is rapidly overtaking China. It's got a long time lag. Within a few years time it will have probably have the third biggest economy in the world. And I think

smart people are beginning to appreciate it's important. So Pakistan too is is a major economic part potentially, So you know, the Western world is underestimating. I think that the shift in the center of gravity of the world economy, of which India is a critical part. Vince Cable, thank you so much for joining as of course he is the leader of the UK Liberal Democratic Party, joining us today.

So our top story a gloomy report from the O E c D telling you, ever think you already knew the global economy suffering from trade tensions and political uncertainty, clouding prospects for the future. The organization cutting the outlook again to three point three percent for global growth from three point five and warning there may be worse ahead. Joining us here in New York is Alan Ruskin, Deutsche Bank Global co head of f X Strategy. Good morning

to Allen. Morning John. How useful is a forecast from the O E C D and let's trub in the I M F for that matter too. Yeah. Look, these are very big organizations that have certain advantages like big economic models, but they're obviously not the most number in a sense, so they can't change their forecasts and the dime, I would argue in this particularly instance, they are really following probably a set of market expectations and following the

data rather than necessary leading it. Well, let's talk about the data we have had. We had a really really hot print on the I s M in America yesterday. Non manufacturing is SAM recovering dramatically. We're getting back to that early story of just strength in America and weakness our swear. Well, it does still seem to be some sense of American exceptionism, because, however, much of the US

may be slowing, and that's obviously a question mark. However much it is slowing, it's probably slowing less than most other places. Um. Now, the I s M data, as you mentioned, is truly exceptional. At the same time, you're probably going to get some oddly week GDP data, albeit distorted for quarter one data that could be say sub one percent even Um. So it's gonna be interesting. It's gonna be quite hard to read the tea leaves as

far as the data is concern. When people were reading the Federal Reserve tea leaves and looking for the pivot from Chairman Pal they pushed that view of patients through the equity market is done very well. They pushed it through credit, it's done very well. They try to push it through foreign exchange by assuming we would get a week a dollar we haven't had one. What's coming on, Alan, Yes, I think that's very much a story of relativism. So there you have to compare what's going on in in

the US versus places like the EU and and particularly Japan. Um. What you've seen is the thought process of, well, look, if the US is slowing and the FEDS actually not going to be doing anything, then the ECB is not going to be doing much either, and the ECB is going to get locked into negative interest rates at the peak of its interest rate cycle, which is widely seen as diabolical. So UM it's that that's hamstringing the euro

in particular. We talked about this at length yesterday. Yesterday was fascinating folks, between Liz Economy and a set of interviews on China, and also what Mr Ruskin speaks of your which is the X axis of negative interest rates. We're pushing five years of negative German two year. That's not in my textbooks, is it. No, we're we're well out of the realms of textbooks unless you've been reading the one that has been written in Japanese really for the last twenty ideas go out in the last twenty

four US say that's what Europe faces. Perhaps Japanification. Absolutely, it looks very very similar. Indeed, actually that there's this sort of sense that you get locked into extremely low interest rates. The loudest drag in Europe not Japanify. Well, I think the first step would be to look to fiscal policy, because oddly enough, Europe has been following relatively austere fiscal policies, particularly in Germany, where they've been running

a surplus. So why are you running a surplus in this particularly environment because the currency is an artificial construct, Yes, but no, there's there's but there's politics behind it as well. I mean, just fell off their chairs in Frankfort at Deutsche Bank. Um, where should where should Europe be? For Germany and you know, grab your bed, you'll be okay, just take a guess. One fifty we can say, we

can say for the problem Europe has allen. And you know this, there is zero consensus for countercyclical fiscal policy in Europe. The Europeans, the South might want it, the Italians, the Spanish for that matter too, maybe the Greeks, but they've been forced by the North and the core of Europe to go down a different path. Um, that's right, and in some ways you I think John making the

argument that well, forget Japanification. In fact, Europe's in a worse situation than Japan because it doesn't really have its leavers, you know, can't pull the levers and policy, no policy response whatsoever, which is why the o E c D report is backward looking as it is. It's slightly concerning because it raises the concern that many people have it's a slow down in Europe, the lack of a policy response.

As we go through to the ECB meeting tomorrow, what options do they actually have Allan Well, I think their main option is really to roll over l t R O two and the like, really keep the liquidity flowing there. It that's not an exit story, really, and they have thought they were going to be in an exit situation at this point in time, so I think they do have their hands tied unfortunately, and if we do see a growth slowdown, it's inopportune and they might have missed

the boat in terms of normalize. So the thing we're gonna hear more and more over the next coming weeks, I assume, is the carry trade and by the US dollar. Is that the story for you, Allen, Well, it's it's certainly a story that we've been telling for a while, and particularly on the carry side of things, a little bit less so on the sort of by US dollar.

And there's been a very active debate, not only in terms of what you want to be long in terms of carry and let's say you just want to be long the whole gamut of em high heeled for the time being, at least whilst the U S stock market is hanging in and the power put looks to be in play, so you want the whole gamut of E M longs, and you probably want to be financing it with a little bit of yen, a little bit of euros, and perhaps some dollars, but the dollar is not necessary

pewing up its hand as the obvious funding current. Can you in focus? This is a little bit of pro jury gonna here, but we'll go there on a on a cold day in New York? Can you finance the carry trade with negative interest rates? Yes? You love it? What do you do? How do you do it? And the forward points are even more in your favor? The microphones over there falling off my still getting excited. I know, how do you finance with negative interest? Can I do that?

With college tuition? You can? You can? How do you do? The forward points are exactly reflective really of interest rates spreads, and the forward points, whether the rates are zero or negative, will be they're adjusted, uh, you know, and appropriate for what that interest rate. So I go forward and like nine years, swissy grab a negative interest rate? Yeah, and and you know, and and historically you will find that currentries which have these very low interest rates are expected

to appreciate over time. And if you think they're not going to appreciate, then you can take bet in the other direction of that. If you're driving off the road right now, don't worry. I'm driving off the road in the studio. So Alan Ruskin was some of the complexities

that carried there. He is with Deutsche Bank. It is now a great pleasure to bring to you the tenth President of the Federal Reserve Bank of New York, William Dudley, out of Williston, out of Berkeley, where he took his PhD in New College of Florida a few years back. Bill Dudley has been an original economist. He wrote a chapter for me with a wonderful at mcelvy years ago in my book, and in that he said, there is

not a moment to lose Bill Dudley. Wonderful to have you with us today on the FED A few other topics as well. What is there not a moment to lose for the markets to hook back with that policy. The distance of the dots is substantial, isn't it. Well, there's a quite a bit of distance between the last summer economic projections and what the market currently thinks. I think the key question is when the Fed says their patients, does that mean they're done? And I think the answer

is not necessarily. I think what's gonna happen is we're gonna have a pretty weak first quarter and that's going to probably reinforce the idea that the SET is done. But I think the economy is going to pick up steam after that. Some of the issues that we're holding the economy back, like the tightening of financial conditions that we saw in the fourth quarter, the questions about Chinese growth,

uncertainties about trade policy. I think those things are going to be resolved, mainly positively in the first half of the year, So I think fit tightening maybe back on the table in the second half of two thousand. So Bill. Over the last couple of months, the Federal Reserve has come under some criticism about the way it's communicated. It's changed towards a position of patients. How does the Federal Reserve refinance communication in the coming months to adjust and

guide the market towards the reality you to described? Well, I think the SET is trying to get the market to focus less on what it says about its own projections and more about the economic outlook. The economic outlook is what's going to drive the SET, and what what changed in the fourth quarter was we had a lot of new developments, financial conditions tightened growth abroad, sload, there are uncertainties about trade policy, and inflation was very cuiescent.

The unemployer rates stopp declining even though perial growth was strong. So there's a whole bunch of factors that pushed the FED in the direction of being patient. Whether those factors persist or not will determine whether in fact patients means

done well. Bill has been quite co recently to get an understanding of the FATS reaction function, because there's been a lot of discussion about allowing for an overshoot on the inflation target of in and around two In your mind, is this the fect that's willing to tolerate a bit of an overshoot, And how does that complicate things if you say to the market with data dependent, but the

market doesn't know how you depended on the data. Well, I think the discussion about inflation is really a longer term issue about do they want to move away from their current policy, which is a bygonese policy. In other words, if they miss inflation below two percent for a long period time, their next move is to try to get back to two percent, not above two percent. That's the

current policy. They're now having discussions about whether that's not maybe that's not the right policy because that might lead inflation expectations to decline over time. So they're thinking about refining their their inflation objectives. But that's different. That's not going to happen right in the very near term. They're going on a big project over the next six to twelve months to evaluate whether their inflation targeting regime is

the proper one. Taking the near term, it's really gonna be about growth pressure on resources and whether that shows up in any inflation pressure. And I think the feed is going to be tolerant of inflation slightly above two percent. But if they think they commun has a lot of momentum, if they think inflation is going to keep climbing, then they're going to start to tighten again. You're just joining

us William Dudley, a Bloomberg opinion piece. Don't assume that the FET is done at raising rates that according to Bill Dudley. Dr Dudley on paragraph seven, you do what you do best, which is hide your mathematics. You talk about threshold effects, and you also talk about inertial force. The physics of monetary policy. Where is the inertial force right now in our monetary policy? Well, it takes you know, it takes a bit of information for the FED to

sort of change his mind. So we had a lot of evidence in the fourth colore that pushed the FED off the off the notion of continuing to tighten in the near tray. Now it's going to take that evidence reversing, quite a bit of reversal before the FED starts to decide to tighten again. Uh So, you know, if you look at the FED monrey policy through history, the FED doesn't move erratically, don't They don't go up and then down, up and then down. They tend to move in in

st cycles. And that's start shows you that there's thresholds effects to get them to move in one direction or the other. And once they start moving, it takes quite a bit of information to get them to stop. And once they've stopped, it takes quite a bit of information to get them to move again. But can we just take the opportunity to lift the lid on the decision making process at the f O m C. Whenever we have guests come into radio with Tom and I to

see how the sausage is made. They're always surprised by how messy it really is, and largely because of what Tom and I are doing behind the scenes. It's very messy. Tom, I'm just wondering how messy it is at the f O m C because the market is literally gripping on every hanging on every single word you guys put out. How to come How do you decide on the word everyone's going to go out there and talk about patients.

Patiences are what you guys sing kumbay are patients? I mean patients means what it says that it means I'm going to be now to do anything. It doesn't mean I'm done. But do you sit around the table bill and decide that that's the words You're all going to go out and trot around for the next month or so. Talk me through the decision making process. How do you guys come up with the words? These words are not

chosen lately. I mean, if you see something that's in a speech or in a chair's press conference, those words are very close, carefully osen. If someone is speaking extemporaneously, then you can discount those words a little bit because people obviously can't be point as precise when they're speaking, when they're writing. So the words are very important, picking those words with care and deliver and after careful deliberation. And it's also words that are picked that you know

their socialized across the committee. I mean typically what happen typically the the chair wants the committee to be together, right, and so there's you know, there's gonna be some discussion about are these kind of words the words that are appropriate or not? Bill, I want you to weigh in here on the raging debate and the scope of the time that we've got left with you this morning. Modern

monetary theory. Lawrence Summer's writing in The Post on it yesterday, Ken Rogoff writing in Project Syndicate, Paul Krugman coming out forcefully against a theory advocated by Stephanie Kelton of Stony Brook, and she's written this up in Bloomberg Opinion as well.

I don't want to go into a great dissertation right now in MMT, but part of it is a belief that the legislative branch can make a decision making or can execute decision making on fiscal slash monetary policy in a more efficacious way than they fed a reserve system. Do you see any evidence of that that there can be a better process of execution of our fiscal policy other than from the Fed. Look, I did not subscribe

to monitor Monterey theory at all. I mean, the fact that you issued debt in your own currency means you can't default, that's true, But that doesn't mean you can't have a huge hyperinflation problem. And this was tried in that we were a republic of tried in Zimbabwe and we had a little episode of this in the in the nineteen sixties and nineteen seventies. This is a really a correct pot theory in my opinion that said, could there be better coordination of Monterrey policy and fiscal policy?

Absolutely so, if the if the FED were trapped at the zul or bound for interest rates, it would be great. If we had a fiscal policy at that time that was strongly procyclical, that was actually prod support to the economy. One thing I'd like to see is the fiscal stabilizers, automatic fiscal stabilizer strengthened so if there is an economic downturn, people know that the government's gonna cut fiscal you know, east fiscal policy and that's going to stimulate the that

would help the FED do his job. So better coordination between the fiscal side and the entrey policy side would help the economy bill. This is so important. You and Ed mkelvey were so far out front on concerned and the ramifications of a growing debt or deficit. Where we are now, according to CBO, is so much worse than McKelvey and Dudley ever thought about. How do you reframe There's not a moment to lose on our fiscal policy

in two thousand twenty or two thousand. Well, I think the problem is that the markets right now are just not worried about it. Uh. You know, even though the deficit past is not good, that debt service costs are going to climb very very sharply over the coming years, the baby generations and retire and time and spending costs are gonna go up. Markets are just not worried about it.

And so I think the problem is until markets start to become more concerned about it, there's not gonna be any parissure on the policy making side to do to do anything meaningful about it. Can I get one quote from you from Vice Chairman Clarity, He calls it a solid American economy. Do you agree with that assessment. Yeah, I think that I think it is. I mean, I think the thing that strikes me is that the household

sector in particular is in very good shape. You've had strong employment growth, you have rising wages, you have very little increase in household debt burden, debt service costs are the lowest they've been going back several several decades. Uh. So, I think the household sector, which is you know, the commy, is in really good shape. I think there's some questions about other areas like investment, but that's probably being driven

by uncertainties about trade policy. Resolve the uncertainties about trade policy. I think investment will bounce back. So I think the US economy isn't quite good shape. I don't see much prospect for a recession in the near term. Bill Dudley, thank you so much, President of the s Bank of New York and now with University's Center for Economic Want Line Opinion, we have now Sarah House John I US now West Farga Security senior economists. Great to have you

with Sarah. So we caught up with the former New York Fed President William Dudley Bill said, don't assume the fattest done rising rights. Do you agree with that, Sarah, I do agree with that. So we currently expect the Fed to go ahead and move again in the third quarter for many of the reasons that that Dudley laid out. So, UM, we look at the overall reason for the FEDS pause. So, of course we've seen global growth slow down. UM, we've

seen a lot of concerns about the trade war. I think the shutdown uncertainty had some had some play in this too, and of course the tightening in financial conditions. Well, we're still seeing some concerns about about the global slowdown, so I don't think that's likely to go away that soon. But UM, it looks like we'll get some sort of resolution on on the trade war. UM. Shutdown has been resolved, We've already seen some indicators like consumer confidence back bounce back,

and of course financial conditions have have reversed. In fact, if you look at the Bloomberg Financial Conditions Index, they're actually the easiest they've been since last October. So UM, we think that that growth will bounce back UM in the second quarter, and that will give the FED the green light to go ahead and move. In Q three, Sarah, let me ask you this a question I asked Mr Dudley.

The Federals says they are data dependent. Do you have a clear, a really strong understanding of how they are dependent on the data. So I think you know they're they're looking at a mix. Obviously, it's not just just one one or two indicators. Um, you know they're they're giving I think a lot of weight or um at least we think they'll be giving weight towards the employment and inflation measures. So we expect inflation to pick up

a little bit from from where it is here. So not not at a point where we'd really have to see the said ratchet up the pace of tightening, but we think inflation is going to hold firm a core inflation roughly two percent, maybe even a couple of tents over that by by the end of the year. And you know, the employment data continues continues to look strong, and so um, just considering the continued solid momentum that

we see there. Um, given that those are are the primary focal points of the said, we think that that's going going to give them again that that green light to go ahead and move, but clearly they've been watching more um more more areas than than they have in the past and incorporating those those moves and financial conditions well, Sarah, Seemingly it seems to be financial conditions that is becoming increasingly important because we just had one of the strongest

prints for this cycle of the non manufacturing is m just yesterday. The US economy, going by the data, still looks pretty strong, Sarah. Yet the only thing that's really changed radically of the last six months was the price section in markets, So let's talk about that. Increasingly, financial markets and financial conditions seem to be a much much bigger isshic for this Federal Reserve than just the economic day to an isolation, Why is that, Sarah, Well, I

think it's it's where we are in the cycle. So it's it's the fact that you know, we're we're getting to a point where policy is roughly neutral, so we would expect to see what the Fed is doing have a bigger impact on on financial market. Um. The issue is that you know, there's there's a little bit of a little bit of a push poll, so financial conditions tighten, the FED gets easier, financial conditions ease, well, then the FED can be um, perhaps a little bit more more aggressive.

So I think that implies that we would get perhaps more volatility is as we see kind of that back and forth between FED language and the market reactions. So what as well as Fargo's see, is the state of the consumer in the United States. I mean, what's the granularity you're crunching through every day? Yeah, so the consumer is really the strong point. I mean, look at Coles yesterday.

I mean this is completely separate served from you. But who would have thought that a midline departments or would have done as well as calls did? They did really well, right, And that's what's really underpinning our our forecast for another year of above potential growth and is the strength of

the consumer. So we're seeing pretty strong income growth, so especially when you look at at the labor income UM, so the fact that we have seen such strong job growth rising wages, and that's really filtering through, I think towards more of those middle and lower income consumers. So UM, the wage growth has actually been the strongest at the lowest end, and I think that is supporting UM. So you know some of these you know, maybe more more

middle middle tier companies. So, Sarah, how long before the hawks at the f m C stop making some noising and listen to you? There you go creating a trend. I I think, I think there's still sometimes so even as we see a core inflation picking up to about two point two percent by by the end of the year, that's really not a threat to to the FED, and especially I think as they are coming around to the fact that they can let an inflation drift a little

bit above above two percent. So of course the target is still formerly two as as Bill Dudley was was just talking about with with you guys. But I think the FEDS getting increasingly comfortable with a little bit of an overshoot. So I think I think the hawks will will be pretty quiet. Senta House, great to catch up with you whilst FAGA security as we count you down to pay rolls Friday. I don't know if you're worried about your portfolio. You've got company that would be the

President of the United States. He likes stocks up. Slam Molson is with Bloomberg in Washington, where she looks at Treasury affairs and White House affairs, and the distance from Treasure to White house. How long is it like a football fieldsy it is maybe twenty steps, like if Minutia wants to go over and see the presidency go underground kind of things, not underground, but it's it's fifteen twenty steps the way. That's the way it's always been with

the Gallatin statue out front. And so you and Jennifer Jacobs written up a linkage here of a trade discussion with the stock market. Now to back up, we didn't have a hannoy North Korea discussion with the stock market, did we? No, we didn't. But since the fourth quarter of last year, investors have really taken note that these

tariffs are actually happening. I think they realize that the threats are real, that the tariffs are real, the tip for tat port side of this trade war is real, and so investors are reacting to a number of things, including having this concern around the uncertainty of the trade war.

So stock markets are down. One research study show that stock markets are twelve percent lower than they would have been without the tip for tat tariffs between cane that study, that's really interesting, not off the top of my head, but that's good. That's a surveillance tradition. I really don't know where I read that, but I read it somewhere. It's okay, we do that. We don't do that in Washington,

we do that in New York, New York. Thank you. Um. When you look at the president's believe the stock market, which I think has been widely chronicled, how's he tied into agriculture terroffts? I mean, am I right? The reporting is agriculture America is flat on its back? Is that?

I mean bankruptcies in the in Middle America, in the Red States, you know, Wisconsin, Illinois, Indiana, bankruptcies amongst farmers are the highest or higher than who When the cabinet cares about that, I know the President cares about that. I'm just going to guess there and say, yes, does the Secretary Commerce care about that? Does the Secretary of Treasury care about that? I hope they do because that feeds into the economic agenda that they themselves are helping

Trump achieve under this administration. Is there any discussion of a lessoning of tariffs or an elimination of them and start all over. There is definitely a talk of a lessoning of tariffs. A d escalation is what markets want. A de escalation it was, is what China wants. Uh, there is talk of that tariff so far seen the most obvious enforcement mechanism for any kind of a deal, but it remains to be seen. I mean, the delay, the ones from this past Friday that we're supposed to

go into effect for delayed. So we already have a little bit of a de escalation. But but that bar that's down the street from our office in Washington, I've seen you in there a couple of times. Save face. It's a great bar. Everybody in Washington has to save face. Right, How do we save face if we de escalate tariffs? It depends on what China offers. I think a lot

of it is just going to be optics. How President the standing next to China's and mar Lago where two years ago they stood and had their first honyone meeting. It's the optics they want. President Trump wants a meeting at mar Lago assigning agreement. Question why Lago? That is the White House of the South. Okay, but can't China say no, we wanted to ampan Canada. Jackson also likes the photo op I mean, remember the sn e d the whole The highlight for China during this Hank Paulson

created dialogue between the US and China was the photo op. Okay, we did like four or five interviews yesterday in China and they were fascinating. Elizabeth Economy at the consolet Foreign Relations really talked about the saving face going on in domestic China. From where you sit in Washington, Uh, Sleigh a motion with us right now out of our Washington News Beer on her story on Trump stock market and trade. Is this discussion changing because of the way the US

perceives the fragile dynamics president she has in China. Trump has repeatedly commented on the strong position that the US is in considering how China's economy is slowing and what is going on in China like internal domestic politics. But if he wants a deal, he's also getting pressured. I mean it is a bi part, isn't concern now? Chuck Schumer says the best thing Trump has ever done is go tough on China. Trump doesn't want to lose face before Chuck Schumer either. On the one thing, we're back

to save face. That's all anybody from Washington safe, but but silly, We're gonna go to Mara Lago. I mean, think about Hannoy. I was in here at two am. I listened to the press conference the reversal in Hannoi in I'll say, fourteen hours plus the minus a couple of hours. Are we going to get the same thing in your world of China and trade? It is absolutely possible. This is what happens when there's one to one diplomacy.

That's what we saw with North Korea. It all comes Trump has said, and his aids have said over and over to me, uh behind closed doors. They've said it to the world on camera and in press conferences that it all depends on what Trump and President and China's g decide when they are So you're telling this is critical now, you're telling me when you're reporting just we saw in that White House meeting X number of days ago. Were you in the Oval office during the Lightheiser meeting?

The light Okay, maybe Kevin was there, I can't remember the Lightheiser dressed down. I'm going to call it. You know, is that still in effect where the president's ad hocking absolutely ad hoc administration. Now there is a always a chance. Pompeo said this last week in an interview earlier this week, I can't keep your secretary state. Yeah, Secretary of State, Pompeo said, it is possible that Trump walks away like you did with North Korea, he walks away with China.

But the difference is that Trump really wants to an equities rally from a China deal. He has noticed that every time he tweets, every time Minutian or someone goes out there and talks positively about China investors. Yes, and so when someone walks into the Oval Office, when top White House people walk into the Oval Office, they know you better know how the stock markets are doing right now because President the President is gonna ask if trade falls apart, even if we save face, this is the

safe face interview. Can sheriffs go down? Where we go? We really made no decision. We're going to kick the trade can down the road. But to our listeners in the Midwest, do they cut tariffs as they wait for the can to move down the road. Yeah, it's absolutely almost like a two part Yeah, anything is possible. There's

a giant gray area. This is what I've been up here in New York, trying to explain to investors that I've been talking to that you know, in markets have made a very binary choice of either it's gonna be a good deal or a bad deal. But there is a vast gray area tick that the president could that China could exploit here. But within this discussion there has to be a timeline. Do you do your secretary minution have a timeline if he has when he hasn't told me.

All we know is that there's a hundred fifty pages document. But a hundred and fifty page document, that's a that would be fabulous. No, it's something sort of a deal making the m o U s and we're not going to call them. It's according to minutia. The last time we heard about some big document, there was nothing. This is critical. The summary of your reporting is, we don't know exactly, and it's been so much fun to report that. This is brilliant. Come back to New York more often.

Salmon with us is well writing in Bloomberg Today with Jennifer Jacobs. It's a really interesting story, an immediate story about the President and said to push for China deal with market gains. In my we of course speak to Slea in uh Washington a FM, and her studios at her news bureau in Washington. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at

Tom Keane before the podcast. You can always catch us worldwide. I'm Bloomberg Radio