Surveillance: Hawkish Fed Policy With Bullard

He's from St. Louis, James Bullard back to two thousand eight, who set the economic community on its ear a number of years ago, talking about regime change, the idea of how a central bank should act. The PhD from Indiana joins us this morning, and our questions, of course, always led at the beginning, unlike at the press conference by our Michael McKee. Michael, Well, good morning, Jim. I'm not sure what the real beast means, but we are happy to have you with us on Bloomberg Radio and television

this morning. Uh, there's a lot going on. Happy to be here obviously to talk about, but there is an elephant in the room or at least it will be imminently in the room. So let me start with that. Sharon Brown, chair of the Senate Banking Committee, told us last night, as far as he knows, it is down to Lele Brainerd or j Pale for the next FED chair. You've worked with both. What would be the policy differences between the two? How would the FED change if at all? Uh?

I think no matter how this comes out, there will be a lot of continuity in FED policy. Both of these players have uh, you know, long track records at the FED, so certainly it's a big committee. Also, I think people have to keep that in mind. Uh. And and there's a lot of experience on the committee, so I think we'd see uh conton nudity. Would you anticipate

any change in the timeline for tightening policy? And I'm going to use that broadly to mean tapering and raising rates and forward guidance, anything that you might do between one or the other. You know, it's a committee decision, and and it's as I just mentioned, it's a it's a big committee and lots of opinions around the table, great staffs around the Federal Reserve and at the Board of Governors. So it's a collective process and we have

to react to the data and and make decisions. So the chair's job is really to guide that process, I would say, uh, and and get to a good compromise in the center of the committee. Well, certainly you've got opinions that you've expressed them on what the Fed should be doing, the possibility of a faster move to tighten policy, but you've also, as you just said, what that on the data. The data are showing very strong inflation, and it shows up in the retail sales report this morning.

Are you ready to say we should move more quickly? I actually didn't see the report. Here is getting ready for the interview, but um uh, the inflation rate is quite high. The core pc inflation rate, the committee's favorite measures about three point six percent. That's the highest it has been in thirty years, well above our two percent target,

and that number already throws out food and energy. So uh, you know, you're you're taming the data a little bit when you look at that kind of measure, but it's quite high. It does not have the reputation of moving down very easily. So I think it who's the committee to tack in a more hawk hawk's direction, uh, in the next couple of meetings, so that we're managing the risk of inflation appropriately. Uh. In inflation just happens to go away, We're in great shape for that. We're set

up for that. But if inflation doesn't go away as quickly as many aren't currently anticipating, then it's going to be up to the Committee to keep inflation under control going forward. Well, when you say tack in a more hawkish direction, are you talking about speeding up the taper even with the risk of a taper tantrum? Are you

talking about changing forward guidance? How would you tack? I think we've gotten past the taper tantrum issue because we went ahead and went ahead with the with the taper here, but we could move faster. We kept optionality on this that we could speed up the taper if it's appropriate. We have a hot CPI report here, as you know, I've advocated a faster pace pace that's twenty per month less on treasury purchases and ten less on mortgage backed

security purchases. The reason I proposed that is that we would be done tapering at the end of the first quarter next year, and that would give us a little bit earlier moment that we could assess where the data is and decide what to do on on rate policy. UM so I think that's something to consider. I mean some might say, well, that's you know, that's faster than they like. I don't know, but we did retain the optionality on this. Jim Bullard, thank you so much for

joining us this morning. It would be great to get your sense of Bill Dudley's comments about the end value, the end terminal rate that we are expecting for policy. Given how high inflation has gone, a lot of people think it's not going to get beyond two percent, he said, three to four percent. Do you think that that is a realistic end policy rate. Yeah, that's not my base case right now. I've got uh, you know, rates only

rising to where they were pre pandemic. And I think it's good to keep in mind here that the pre pandemic economy was not a zero interest rate economy. So whenever you think we're back to the pre pandemic levels of output, which we already are, and the and the pre pandemic level of labor uh labor market performance, uh, then that should be the moment that you're back at the at the pre pandemic level of interest rates. We don't really have that kind of plan in place right now,

but maybe that's something that to think about. I think, you know, these this rate policy and and tacking hawkishly now could pay great dividends for the committee in the year ahead or the eighteen months I had, because it means that we would have to do less later on, and you'd smooth this whole process out some. I think the scenario that U. Bill Dudley was describing was one where we get behind the data too far and then

we have to move more aggressively later. And that was a stop go type policy that didn't work very well in the nineteen seventies. So I think it makes sense to try to move a little bit more hawkishly here and try to manage the inflation risk again. If it all, if it all dissipates next year, uh, we'll We'll be fine in that situation. Then we can push out rate increases out into the future. But how high can rates

go given the where the economy is, and how quickly? Right, I mean, the idea of front loading rate hikes makes sense to avoid a sort of gloom and doom scenario that Bill Dudley was laying out four rates, perhaps setting the economy into recession. But how high could we currently handle given the trillions of dollars of debt that we've incurred. Well, I mean, I think the good news is you probably don't have to go to that high of a level

to get a normal sense of interest rates. I mean, nineteen, you know, one and a half to two percent was kind of a common level, and that seemed to work pretty well for that pre pandemic economy. There were some adjustments, some trade issues going on then and and other other things, but I kind of take it as good news that we wouldn't have to go to that high of a level to remove the accommodation and remove the upward pressure

that we're putting on inflation with our current policy. Jim Bowler, Tom Keen, Good morning to you, sir, Christopher Waller, who got an upgrade from your shop a few years ago, now governor of the FED in Washington. You and Chris Waller did a retrospective off your regime paper of two thousand. I believe it was sixteen, I can't quite remember. I want you to discuss now for the economic community if

we're in a regime change where the theories aren't working. Here, we are coming out of a natural disaster, we have a China like boom economy of real and nomenal GDP, and then we've got the idea that we have to somehow unwind this to the terminal value scope out given a regime change, the win of a terminal value you're looking out to are you looking out six months? Are you looking out too a Cardinals World series? Or can

you responsibly look out five or six years? I think this might be a moment where there, uh, there is potential for regime switching to a higher productivity growth regime. Not really ready to commit to that right now, but if you look at the data has become very volatile, it's not so clear that we're in the low productivity growth world that I was talking about in twix. Uh,

we might push out of this. You know. The pandemic is the kind of event that really forces businesses to hustle and to think about how they can use technology to their advantage. They've got a very tight labor market that they're facing. Uh, they're probably dusting off plans that they had around for a long time to use technology in a better way. So, uh, that's very promising. I think that we could move to a period of higher productivity growth. That would be great for the economy. Uh,

and it would put upward pressure on interest rates. So if we see that this is a critical theme for Bloomberg surveillance this year. Jibbola the idea of the technology overlay being underestimated as we come out of the war shock,

the pandemic shock as well. If we get a technology overlay in an upgrade in our statistics, can we get to where instead of a two percent inflation target that we could migrate to something is at impose and suggests of a three percent inflation target simply because we have better productivity. No, I think you know, No, I don't think so you should. You should take the productivity on board. The economy would grow faster, and that would be a

sensational thing. The last time we really had this was the late nineteen nineties, and at that point we were talking about paying off the entire national debt. It didn't happen, but we were talking about it at one point, And Uh, that just shows you what a big impact this kind of thing can have. On macroeconomic performance. So I would not mess around with the inflation target itself. That's become

an international standard. And if the leading economy in the world decided to mess around with the inflation target, you'd get all this chain reaction all around the world. I think that would be chaotic and sounds like the seventies to me. So I would not try to go in that direction. But nevertheless, I think we may get the better the higher productivity growth that uh is kind of promising coming out of this pandemic, just because everyone has

been experimenting with new technology. Mike, did you see how he treated me there like you get treated by Chairman Paul in the press conference. I mean, he just laughed right in my face over the face. Well, that was a long term look at what might happen. Let's talk what the traders all want to know, Jim, And that's the very short term. If you're thinking we should attack in a more hawkish direction, would that speed up the

rate of rate increases? Uh, there's right now in the markets to rate increases for two and almost a third. Do you think that's realistic? You know, I'm agreeing with the markets right now because I've got two hikes penciled in for two uh that's dependent on the data. Could evolve going forward, depending on how the data come in. UH. So I think there are other ways we could uh

tack in a Hawker's direction. I think we could uh play up the idea that maybe we don't have to wait all the way to the end of the taper in order to raise the policy rate. I mean, historically, when we've done this before, we have not wanted to

be raising the policy rate while we're still tapering. But you could argue that the tapers all priced in, and what's going to happen over the next eight months is just follow through on something that's already priced in, and so that that would sort of relieve any constraint that the committee might feel about when the appropriate time was

to commence with liftoff. Another consideration, I think that put on the table and have put on the tables, that we could allow runoff of the balance sheet at the end of the taper instead of waiting on that decision for uh for a while. So I think that that would be a way to um, uh you know, have a somewhat more Hawker's policy than otherwise, you know, We can debate how big an impact that would have, but you could allow the balance sheet to be running down, uh,

sooner than is currently priced into the market. One last question is, and we'll keep it in the sailing category. When you tack, you run the risk of the wind coming on too hard and you've moved the sail too much and you can capsize. And I'm wondering what your view of the US economy is right now. Since policy works with a lag, do you risk cutting off the recovery by raising rates too soon if inflation is transitory? Yeah,

well I love this. I meanyway, if you're gonna be in sailing, you've got to be good at what you do. And I think the same is true the committee. We have to react to data in the appropriate way and and manage the risk appropriately. I liked the chair's emphasis on risk management at the recent press conference. I think that's exactly what's going on here. Uh. You have two scenarios, one where inflation dissipates as the economy continues to reopen,

and another one where it doesn't. And you've got to be ready for the second one. Um, if the first one comes, we're in great position for that already, so it's really the second one that we have to uh, we have to get ready for here, and I hope we've got the gusts of wind. We're playing that just

right here. Jim Bullard, thank you so much. James Bullard is, of course the president of the St. Louis Fed, and of course I thanks to Michael McKee as well, not only on retail sales in his boom American economy, but on the delicacies I should say of the Fed forward. This is the conversation of the day, with great respect for James Bullard of the St. Louis Fed. For Global Wall Street, the TV Securities call is simply stunning. It's Mark McCormick and his resilient dollar with some nuances for

next year, but lead in the charge. There's pria misra ahead of global rate strategy and a call that goes out into the far future. Prea. On the cover of your stunning report, you have the most important chart I've seen in fixed income in twenty years, Dominic constant, a credit suite showing the FED funds rate and the o I s view out the feathers coming off the rate of everyone's guest myths that we've gotten wrong, wrong, wrong.

You say, once again, we've got it wrong. So you know this, this sort of tells you that great strategies all the market doesn't always call the Fed right. But you know, our thought right now is the market has been really torn with high inflation, you know we and and how long it will persist, and so the markets pricing in the first rate h literally right after wind wind t bring in. Now our view is that there are a huge COVID impacts on inflation that's going to

start to decelerate. I also think the markets under estimating the extent of fiscal drag that's that we're going to face next year, and so growth is gonna slow, inflation has speak. It's not obvious to us that the FED has to turn around and start hiking aggressively. And so we actually have the first rate hype much later than that than when the markets pricing in steeper curve, you know,

the front and sting a lot more anchored. But it's ultimately a view on the economy and the outlook of the economy as we recover into the post COVID world. It's also a view on the FED and believing prayer that they won't blink, they won't change their mind, that they won't get uncomfortable, they won't change their view, and then maybe that the FED chair won't change either. How do you get a read on that at this point?

Prayer as you look out not to the end of three but just the next six months, right, And I think that's a big so that we always struggled with the economic outlook of the FED reaction function, and I think the committee is as split as the market is, you know. And I think that December dot plot will show again that there are those who believe inflation strangitory and those I think that we should be hiking. But I think the FED has taken a pretty big step there.

They've tapered sooner than what anyone was looking for. They're taping much faster than the last time, or or than analysts estimates. So they're responding to the risk. They're they're in this risk management approach. They're already responding to the risk of high inflation. By the middle of next year, that's when it's going to get really tricky, because you know, do they start to hide. That's when I think that

growth outlook is going to matter. I think the reaction function doesn't need to change between now and then or the talk around faster form of tapering, you know, using the balance sheet to type financial conditions. We saw how difficult that was in two thousand thirteen with the taper tantrum. I don't think the Fed wants to risk it, so we think the threshold for them to change that tapering time frame is actually very large. So we left time to figure out that reaction function based on how how

the data comes out over the next six months. Where do you think that the labor market is weaker than most analysts expect. Yes, we do things so particularly because of the slack. I guess our big assumption is that some people who have left labor force have done so because of COVID, whether it's childcare, whether you're just concerned about getting sick um, and they will come back. Now

the savings high savings has buffered some people. They've been able to wait it out for the right kind of job or the higher wages of higher wages, but ultimately that brings them in and so there's a lot more slack in the labor market. We also think the service recovery will pick up and that will create demand for those jobs. So it's not it's it's not a weak labor market, it's just the slack. I think where people are really divided is how much slack is there in

the labor market. We think, actually there's a lot of hidden slack, and that will become more evident in the first half of that There's an important distinction here. Some people have been saying this is going to be a shorter and harder cycle. Is your call that that's not true, that this is going to be a long and arduous

cycle and that the feder will be patient. Or is it that the Fed already missed its window to titan and that at this point it cannot raise rates materially higher than where they are now, given how much death there is and given the economic momentum that will decelerate meaningfully next year. Right, great questions. I think if we compare it to the post financial crisis cycle, I think

it's going to be shorter than that. We had significant fiscal tightening, we didn't have as much cheasing, So I would say this cycle is shorter compared to the O eight cycle because we just had a lot more policy support um, both fiscal anotry. But will it be that short? Are we overheating where the Fed will need to really tighten financial versions there we do disagree. I think it's going to be longer than the two year cycle, than

the markets pricing in. I mean, what shocking is for those who believe that the labor market slack is gone, and they believe the FED starts hiking mid next year. Why is the endpoint of the hiking cycle only one and a half. That's a really pessimistic outcret for the productivity of the economy. So we think they'll start later, but they'll be able to hide to two two and a half or more. Normal Normal is neutral rate in the combat battle. I'm not gonna I'll make it clear

as I can. Your call is a career maker or breaker. There's no ender for butts about that. And when John mentioned two thousand twenty three, I immediately thought of Mario drag at the e c B. What does your call and the failure of those guestimates, what does it mean for the e c B and LA Guard? It hugely

advantages her if she gets a misera call. Well, I think all central banks and we called it the year of living dangerously because they're all trying to adjust policy in an evolving economic outlook where you know, what are the structural impacts of COVID. Is COVID transitory or is it going to have significant impacts on the labor market or a or an inflation dynamics that all center banks

need to adjust it. So it's a big question for the e c B, it's a big question for the r b A. But our thought is this is going to be the year of divergence, so cross market trades will make sense. You've got the e c B and the FED on one side that have run below the inflation target for so long that they can afford to be patient. And then you've got the RB at the Bank of England, the Bank of Canada smaller open economies that we think we'll be forced in to start that

process of normalization. So you see more divergences, some fascinating fex traits that could come off the back of that. We love a comment from you on what built down to the formerly York Fed person and said on this program in the last twenty four hours he said the FEN funds rate wouldn't hop out around one's seventy five, where many people in this market think it will it

could top out somewhere three to four. Granted he believes that this is crystal ball type stuff, and the merketar crystal ball gets the further you go out, you've got any thoughts on that at the moment, prayer as you think about standing this journey later. Right, So I really respect Bill, and I would say I hope so that's not our care. We have the endpoint of the hiking

cycle closer to two and a half. I hope Bill is right that the economy, maybe because of COVID or all the technology that's been put in, that productivity does move higher. And if that's what's happening, then I'm more for higher rates. If it's you know, if economy can handle higher interest rates because productivity is higher, or maybe population labor force growth, those then then I think the

economy can handle it. Our fear is that the productivity doesn't really materially move higher, and we've had a lot more debt in the system, So I think if the FED actually raises rates up to three, the economy won't be able to handle it. Financial conditions or the intersensitive sectors which is the entire economy is more leveled. So I think it's the knock on effects that we struggle with.

But we'll be watching productivity and maybe you know there has been that silver lining that we we can just take labor force productivity that much higher. Super sharp love the outlet we've had a rate of it in the last thirty minutes. Is going to spend this afternoon reading it to thank you very much for jo wanting to us this morning. Pretty sure that TV security. Let's get right to it. We continue this year ahead of view

with Andrew Sheets. He's chief Cross that strategist at Morgan Stanley. Andrew, I've never seen it like it is right now, let's start with the why is the reason there's such a variants of opinion across global Wall Street simply because of this natural disaster and the boom American economy. Right now, we don't know how that's gonna unfold, do we. Well, Look, I think there are a lot of uncertainties across different

acts of the market debate. We are dealing with two where a lot of extraordinary policy is not going to be there for for markets in the same way that the training wheels are off so to speak. And I think there's a lot of uncertainty around how much does that affect market multiples and evaluations and performance. And then I think we're also dealing with an inflationary dynamic that

we haven't seen in some time. If you look at break even inflation expectations there near the highest and thirty years, our economists think that inflation is going to moderate as two goes on, but they're obviously different opinions around that. So I think investors are uniquely facing some really big, very interesting questions as we look at your head and when I look at your year ahead, it's of the research you put out of the weekend. I enjoyed reading it.

Oh what stead that for me? Though? Is you put out an index coal of fully four hundred, But when I read through the research itself, you almost the emphasized the index code. It doesn't seem that relevance to what you think in as whack? Can you just build on that? For Sandrew? Sure? So, So like I think there's some interesting factors about how we're how we're thinking about the year ahead. I think, first as if we think about you know, the equity market narrowly, especially the US equity market,

the world's largest equity market. We are cautious on the year ahead. We do think the market ends two lower, but we think that there could be a wide range around that. We think the market could trade both higher and lower over the course of next year before ending a little bit lower. And we think single stock dispersion

is going to remain really high. And so I think in these mid cycle environments like we're in today, you get less of the action at the high level of the market, more of the alpha, more of the importance is that stock selection underneath the market. And we think that's a really important theme for US East next year. I know's just the other way in Europe and in Japan versus the underwent in the US two does the

same story apply a little bit less. So actually, I think Europe and Japan will be a little bit straightforward data markets where look at Europe and Japan are are very unique for satisfying two really important conditions. We think they usually outperform these or assets that usually outperform at this stage of the economic cycle. And they are cheaper than they usually are at this stage of the economic cycle. And and very few assets take both of those boxes.

At the moment, the Europe and Japan do. So we think those are both markets that can deliver about a ten percent return next year, and they'll be some of the better places we think investors can hide out, and we think that performance would be relatively broad based. How much do you think that the Fed holding off on raising rates as quickly as people expect will lead to a steepening in a yield curve and overweight in financial

sort of sort of tailwind to some of these cyclical trades. Yeah, I'm really glad you asked about that, because I think there are two really kind of interesting factors about how we see this playing out. The first is the market might not believe our view immediately. There's there's no reason for it too write. There's I think very little incentive for the Federal Reserve to come out in January or February and say we're not going to hike rates in the second half of the year. Why why would they?

So that is a reason why we actually think the dollar can start off the year stronger, why we can get really yields rising the first part of the year. I think the market could act with a little bit more of a hawkish attint to it, and that's the way our interest rate strategists are thinking about things now. I also think that as you move into as you move throughout the year, our view is that the hikes that the Fed is not going to do in two

simply get shifted back into four. That the market starts to think, look, starting a little bit later is going to mean that the Fed is ultimately going to be able to hike more, and so the curve will steep in. There will curvel steep in between the two year point, if your point, and again that's that's a really key part of how our interest rate strategy is is thinking about your head. So if the dollar is going to strengthen, does that mean that going into the beating of the

year you want to be overweight stocks? In other words, that this nuanced call calls for a frontloading of all gains and then perhaps a pretty steep sell off mid two later in the year. Well, you know, the stronger dollar will tighten financial conditions. I think that's a reason why we are we are waiting to turn bullish on on emerging market assets. E m sts have have really underperformed in one They are in many cases cheap but we would like to get that dollar strength out of

the way first. And if I think about the other markets, look, the weaker euro the weaker again we think can connect as near term tail winds to to Europe and in Japan. While you know for the U S it's it's going to increasingly become I think a question around how much is this dollar strength starting to impact earning? So we do think the earning story is pretty good in the US equity market, or our caution is almost entirely around the multiple, not around the earning side. But it's another factor.

It's another tightening and financial conditions that we have to be mindful of. And to just final question when you sit down with the team and you do this work with n Inzana, with Mike Wilson, with everybody else, Matt wholemac over and Morgan Stanny too. This FED coal, how FED chair dependent? Is this cool? Well? You know, I as we think about it, we we were not sure that it is as dependent as it might otherwise be. We think that the FED is going to be facing

moderating core cp core PCE throughout next year. Core PC rate that's gonna be well below the cp I rate well below the headline inflation rate that others might be focused on, and so that there's going to be I think a strong argument for some patients, whether it is Share Powell or whether it is somebody else. So that's not the main determinant of our call for patients. UM are are determinators around the inflation path and how we think the FED responds to that. And we love catching

up with your great work. Send out by stem while you Andrew shakes that of Morgan Stanley on the outlook for two. Right now, Dana Curtis Peterson is going to join excuse me, Dana Peterson uh to join us right now chief Economists at the conference where Dana, the heritage of the conference board is so much about a reading of the American consumer. What is the distinction you see

now in your research? Well, our last reading consumer confidence was in October, so I know there have been other readings out there for November, but that last reading showed that people were still pretty optimistic. They were still looking forward to buying things, uh, cars, appliances, big ticket items, and even going on vacation. And also our Holiday Outlook survey indicated that even though people anticipated that things would

cost more. They were still looking to buy and spend about the same amount of money this year that they spent last year, Dana, How much is this potentially people bringing forward their purchases ahead of the holidays to get ahead of the crunch with supply chains, like, for example, people buying Christmas trees in November the middle of November from home depot. I think there's definitely that's definitely happening. When we look at sporting goods, toys and the hobby

UH sales for October, they were pretty strong. And even I went out and on all my Christmas toys ahead of time in October, So we do think that some people are probably buying in advance of expectation of store shelves being understocked. And certainly inventories are big issues. Are we going to see an increase in inventories in the fourth quarter to help us see a real bounce back

in GDP growth after the soft reading in the third quarter. Well, it also is a question of whether the strength in the retail sales can continue into December or whether we've kind of frontloaded the data. That's a great question that's really not going be born out until we see November and December data UM. But again very strong intentions among people, especially folks looking to buy clothing UM and also high

tech goods. And I'm very optimistic and certainly encouraged to see the auto sales pop up because indeed we know that there's been this semiconductor crunch and certainly there's more demand for cars out there and probably will help bolster sales for the balance of this year. And how uncomfortable do you think the FET is right now with this

incoming dates rather the past countle of weeks. Well, I think what the data telling us is that after the delta variants setback, the economy getting back on track UM. Even though the UH the restaurant and bar sales were flat UM and probably in real terms they might have been a little bit negative. It's we're seeing mobility data pick up. People are getting back out there, and certainly UH growth is strong. Inflation is really powerful at this

point UM. Inflation expectations at least in the short term. The delta is pretty steep UM. And also labor markets are healing, so I would imagine that we're getting to the point where the FED can feel, hey, you know what we have reached full employment. We're well beyond our our expectations for inflation. Uh, let's go ahead and start

thinking about normalizing policy next year. And when you say we're getting to the point of full employment, what are you looking at to guide you and how close are we? Actually just put some numbers on that. Sure, well, we know that there are four point two million persons that are still absent from the payrolls report. However, we also know that tons of people retired, about three million potentially, and not all of them are necessarily going to come back.

So when you look at the participation rate, it's probably telling a story that is, um, you know, a little underrepresentative of what's going on the labor market. If we continue to see a roughly half million jobs at it over the next few months, and also anticipating that folks aren't coming back from retirement, we're probably pretty close to full employment. And certainly once we reach that, I think

the FED will feel comfortable with starting to normalize. What what inflation rate is the inflation rate that makes wage growth impossible? In your head, is it three inflation or is there some statistic higher? Um, I'm not sure what that rate is, but I would imagine even though uh, the FED signal or indicated that they're not seeing a wage price spiral right now, it's hard to imagine that some of these increases and wages aren't filtering down to consumers.

I mean, certainly that's what we're hearing at the conference port from our members. So um, I would imagine that as we see wages increase in the BLS reports EMPLOYT reports, that the FED will become less comfortable and potentially become more concerned that there will be this spiral and that they need to do something to address it. Danna, thank you for beam with us this morning to write this down. Danna pities in that of the conference board. This is

the Bloomberg Surveillance Podcast. Thanks for listening. Join us live we days from seven to ten am Eastern on Bloomberg Radio and on Bloomberg Television each day from six to nine am for insight from the best in economics, finance, investment, and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and of course on the terminal. I'm Tom keene In. This is Bloomberg