Surveillance: Inflation Trades with Golub (Podcast)

John Gollob and Credit Sweets had the courage to come out with a Barbell strategy which was blah blah blah blah blah and don't give up on a big text. He was a genius. The genius joins us this morning. John Gollob is head of US equity Strategy and quantitative research for Credit at Sweets. Now, what John, you know, if I if I have Amazon, Apple, what ever, and I'm gonna hold them, what is the prescription to recover? You know, Tom, we actually think that in a high

inflation environment that tech just doesn't do as well. So it's interesting we we've been table pounding on tech throughout the last couple of years, but as we rolled into this year, we didn't say short that we said basically good of neutral, because as long as the cycle continues to be inflationary, they just struggle a little bit more.

And what we actually see, and we've done a whole bunch of qualt work around this, is that when inflation is high and stubbornly high, you actually want to be in stuff that's more cyclical beneficiaries of this, so energy stocks, material stocks and the like. Not because these are the best stocks forever, but they're the best stocks for the moment.

Will those tech stocks continue to have revenue growth? Um? Yeah, But if you take a look like in the last let's say the most recent earnings sea season, tech names, um, you know grew about seven percent, but those cyclical groups grew something like thirty or forty because they just they just did better. They have more operating leverage, more physical infrastructure, in in in the kind of old economy cyclicals, and

therefore they have more upset. And if you look at this earning season, those tech companies were, you know, the well, the megacap tech companies were pretty lack luster. So it's not just a sentiment issue. They're they're having a harder time. But but also they went into the year very expensive. That run that we were predicting in Tech played out beautifully and sometimes you have to know when it's time to take your foot off the battle, which is what

we did on Tech earlier this year. How do retail earnings fit into your thesis? Well, you know, um, Lisa, the I think that everybody, starting really last Friday, thought that the worst was behind us. And then with you know, Walmart and Target News, people felt like they got kicked in the stomach that maybe the consumers rolling over and

companies are gonna have margin problems. And then if you actually look, you know, we had a lot of companies like you know, t J Max and Home Depo and Lows and they did fine that they had beats in the high single digits. It was really a couple of these prominent names like Home Depot Lows at hard time, and a lot of those were really what I would call is a mix issue. People were buying groceries, but they didn't want to buy furniture and TV sets and

and in many cases these were really merchandising problems. They were kind of the wrong products as people are rotating towards um experiences and restaurants and hotels and getting back out. So I'm not sure that we should be over extrapolating some of the bad news from those retails, but I will tell you it surely shook the market in the middle part of this week. So that's the glass half full view of these retail earnings that basically it is

a mixed issue, not a consumer health issue. And some people would agree with you, Jonathan, But doesn't that give you a sense that the FED is going to raise rates all the more so to try to stave off some of the inflationary pressure because the consumer still has momentum and that presents a valuation problem for stocks. As we were hearing from Sevita Supermannia in a Bank of America earlier this morning. Yeah, I'm not sure that the FED responds to the retail earnings that but but I

mean generally, but the trend. But listen, wage inflation is really high. When when when a year ago, when we when we had three percent inflation, people were saying, is oh that speaking, there's no way to get to four percent? And now we're we're over eight. So the Fed, I don't want to say there at autopilot for a little while, but they're gonna have to push rates, you know, at least a three percent, which is what the markets discounting.

And my view is by the end of next year we maybe closing to four percent on on FED funds if if they need to, you know, really hold on a second, Jonathan, in all honesty, then how canst keep rallying? How can you get to near five thousand and by the end of the year on the SMP if you get three or four percent fund funds rate? Well, I mean, the most important thing is corporate profits are holding up really well on and so take a look at this

this earning season. Revenues are running on the SMP four percent. This quarter, earnings are up twelve, so the margin pressure is tiny. But we had this really weird thing going on with the banks with reserve releases, and if you took that out, the revenues were and the EPs was twenty. So the earnings are super powerful and stocks are cheap at this boy, John, John, John, that is the most

intelligent thing I've heard this week on equity optimism. That differential equation is linked at the hip with nominal g d P and the decline. Are you suggesting within all the credit suites work that the great miss here is at nominal GDP will sustain longer, which will allow companies to adapt into the gloom Lisa just mentioned Tom, I

think that is the only story. I mean, my favorite that The one screen that I look at the most of my Bloomberg terminal is e c f C. What where is the consensus view on what the economy is going to do over the next quarter and year and two years. And what it tells you is that nominal GDP this year should run nine percent. I mean normal is three and a half. For all of those folks who say, oh, we're going into recession, economists all over are basically saying this is a recoring economy. You know,

I'm gonna tear up here. John Golub, John Farrow. John Golub is really drunk the kool a did credit Suiteze Donaldson, Lufkin, Jenrette. He's on the edge of Tom Galvin here with a sales centric view. I'm gonna try and beat polite hair um a c FC Okay, John, has that ever been a leading indicator for anything? Well, I mean, you know, Jonathan, you have to use some framework to say directionally, where do we think that the economy is going. So if

you're looking at you know, where inflation is going. You can look at the tips market. If you're looking where GDP is, it's not there's no tradeable instrument on your Bloomberg. You have no choice but to use either your own house economists and and and our continentst guys are also pretty bullish. But but or you can just say where's where's the whole gang? Thinking that that that the the growth is gonna be and and that's what you find

on the terminal. And not only can you do it, but I can see it by firm, so I can say what are the biggest shops? What are the people at the FED think it's gonna be. They're all in the same direction, which is the underlying economic growth measurement in nominal dollars, that's including inflation is gonna be really strong this year and here's the most important thing, and

really strong next year as well. That's that's not you know, that's that's that's that Haro that it's just the FED full cost John, When did the FED a full cost of recession? It's just not well they do it with they do it about a year with a year delay. You know there there, they do it after the fact. But but listen, I get that, But you have to use some framework saying where do you think the world is going? And if you ask me what the most

important issue is on inflation and growth. We have an incredibly tight labor market, which is leaving the consumer really confident in their ability to find work, and that leads people to be willing to go out and over extend themselves on credit. And it also means that you have high wage inflation. You add those two things together, it's all about the labor market. And and that's my take. Independent of what you have on that, that forecasting is great.

Define both John is gonna catch up buddy as always, Johnathan of the Credit swas right now in an important conversation, and I will go to John Pharaoh here in a moment. But I want to slip in one question with the United Kingdoms Secretary of State for Business, Energy and Industrial Strategy, he John and the rest of the nation enjoying a nine percent inflation. Kasi Carton is with us. He's celebrating Liverpool's European dominance and more than anything understands the gridlock

of British politics. Author a decade ago of gridlock nation. What's the level of gridlock right now, Minister, in terms of dealing with nine percent inflation? Well, it's a huge challenge, Tom, and you will know that it's a global challenge. We had a pandemic, we had lockdowns right across the world, we had a huge surgeon demand when those lockdowns were eased, and now we've got this unprecedented situation in Ukraine, first time in seventy years, seventy five years that we're seeing

an actual war in Europe. So these are unprecedented times and the British government has very much decided to help consumers, help people in the UK. We had a good announcement from the Chancellor in February about the kind of help that he was willing to give, and he and the Prime Minister have said that they are looking to help people more. Let's talk about that and whether situation the consumer the people of the UK feeling that right now.

Because he wrote a letter recently two petrol retailers about the concerns that the Chancellor's five fuel duty cup wasn't being passed on in any visible or meaningful way. What's the response been, Well, we're looking at that still. I mean, I think it's very wrong of Petrol the four courts not to pass on the reduction um and I think, you know, we we're seeing that there's some behavior change, but they could There's a lot more they could do and I'm very keen that they actually help out. You're

against the windfall tax, why is there? I've been always against wind full tax. I think there arbitrary. I think they discourage investment. And when you look at the companies that invest in the North Sea, you know it's a very cyclical business. So when they make money, they tend to make a lot of money, and then when they lose, they make big losses and they're not they're not supported

when they do make those losses. You've talked about investment in the UK and you're worried that it would deter investment, but not learning of tre P said to The Times earlier this month. He was asked basically whether he change any spending plans because of a windfall tax, and he said, quote, there are none that we wouldn't do. Isn't that good news that you can do that? He won't change your spending plants. He's telling you, well, it's up to I mean,

you can speak to Bernard directly yourself. I'm not quite sure what he was referring to, but there's no doubt that other players in the industry say that any kind of wind full tax would deter future investment. I mean, that's pretty obvious, um, and they need fiscal certainty. They don't want rabbits out of the hat, so they just speach.

I just wanted to jump in with something the chancellors said to the Chancellor said what I want to see a significant investment back into the UK economy to support jobs, to support energy security, and I want to see that suit. If that doesn't happen, then no options are off the table now, as you know quality the printent response from any chance there is not to take things off the table ahead of a plan. But I want your view

on there. I want some goals. I want to understand what kind of investments do you want to see from these players and over what time frame, because if we're going to wait for these guys, they've got a ten year time of writing for their spending plans will be out a decade and then we'll say, oh, okay, maybe

we should have do a win full tax. Now what's the time frame how much spending you want to see over what time we want to see spending I'm not going to quantify, but we want to see actual, real spending. And there's evidence that they're doing that. I mean, if you look at our program for carbon capture blue hydrogen production, both SHELL and BP are directly involved in that in the northeast of our country of England, and they can see that there is a huge opportunity in terms of investment.

And that's exactly what the chance of, the kind of investment, the chance that wants to see. And as you say, the chance is quite right to say all options are on the table. Every chancellor I've known since i've been an MP has always said that there's no way that he's going to take options off the table ahead of the budget. Dr Quartine, you enjoy a PhD in economic history from a small shop the University of Cambridge. You know the history of this and the simple history as

windfall profit taxes do not work period. It's well documented. But as John alludes to, there is a generational trust that has been broken between corporate elites and the people. How do you guarantee, given the lack of trust, a process here that helps the people of the United Kingdom. So that's why the Chance that was very clear Tom that they have to invest in the UK. We want to see their ambitions realized by there. Do you need an investrating? Does is it so urgent that it needs

to be crtified to be in writing? I think I think the commitments are already there. I'm not sure that we need any kind of legal document or quasi legal document. But what what they understand is that these new technologies, the decarbonization, all of that stuff needs investment and it actually creates jobs. And you will also know that we're

very interested, are very focused on leveling up. That's actually giving opportunity to areas of our country in the UK which in the last few years few decades have been underinvested. And so BP and Shell and others know that our commitment to leveling up and our commitment also to decobinization mean that business investment needs to happen, and they're very

aware of that. And they also know, as the Chance that said, that if they don't step up to that plate, then they could well be subject to win full tax, because I think that's a reasonable conversation. Just to final question, sir, just on the final point, to understand what people are going through right now if they listen to this conversation. You've got a company BP engaged in buy backs. I'm

not here to say that's the wrong thing. They've referred to themselves as a cash machine when all prices are climate like they are. You've got the CEO who's saying he wouldn't change his spending plan if he faced the windfall tax, and we've got the government saying we don't want to do that. You're saying that, do you understand how deeply uncomfortable that might be for people who can't pay their energy bills this month. Look, it's really difficult,

but the investment actually helps people. People have pension plans, they have they want to have jobs, they want to have energy security. So I can't, as an energy minister say, please invest in our energy security of supply. But by the way, I'm going to give you a wind full tax. That doesn't make sense. In order to protect energy supply, we need investment, and in order to have investment, they

need we need a stable fiscal situation. We can't simply just threatened people with will have arbitrary wind full taxes. Having said all of that, as you know, the chance of the check is responsible for the budget. He's not taking any options off the table, and he wouldn't be the first chance that did to do it, as you know, because we could go back to the conservative chance of night one he did something similar. Quasi thank you, right to catch up. Thank you, sir Quasi kwat sing the

UK the Secretary of Energy and Business. It is a joy right now on this Friday, as we regroup again for meetings with someone who stopped us in Davos a couple of years ago. Sevina Supermannian was in Davous with her Bank of America holding court on E s G. She's had of US equity and quantitative strategy for the bank. Sevina, time has marched on E s G. Seems so yesterday's story given record call prices as well. How does the shock of these many global risks fold all over into

moving forward in the stock market? How do you regroup now to get ready for two thousand twenty three? Yeah, I mean I think that where we are now is Tom a tough time for E s G investors because the best performing areas of the market are hard to bold defense energy. These are two areas that are typically excluded from e SG funds. So I think that's been hurting these, uh, these types of investors from a market perspective,

I still think the worst is not behind us. UM. We published yesterday that it was sort of a realistic worst case floor for the S and P five hundred would be about three thousand, thirty two hundred UM. You know, here's the thing I think when I talk to clients now, folks are asking me, you know, give me any reason to be bullish right now? And I think the reasons to be bullish are the fact that clients are asking

that question. There's a pervasive, uh kind of fog of negative sentiments out there which would argue that at the bad news is priced in. I think what you want to buy at this point in the cycle is still very late cycle inflation beneficiary. So we're still overweight energy.

I think energy. You know, to your point about China reopening, energy could be Oil could be depressed right now, just given the fact that the second largest economy in the world is offline um, I think that materials look less interesting to US commodities and metals because we are seeing some slowing trends in China despite the fact that they are trying to you know, stimulate the economy. And we're also seeing a shift in demand from finished hard goods

and you know, big ticket items to services. So under that backdrop, it makes sense to continue to go along oil, but you know, maybe move off of the raw materials. So long agoing far away, a guy named Ken Lewis was pillorated Bank of American. I always thought that Ken us was brilliant on his Pacific RIM strategy. Bank of America didn't go into the Pacific rim or their head cut off. They were very measured about it and attempted

to be responsible. I want to know what you think about the bet on Pacific RIM equity is given a China reopening. Is it worth playing or do you stay in the US? I think you stay in the US. I mean, look, you know this this year, we've seen a very interesting rewriting of countries based on energy security. Countries that can don't need to import oil are probably

you know, kind of enjoying a unique advantage. And and I think that second of all, the US is further along in terms of trying to stimulate the economy, trying to push up interest rates. We have corporates and consumers that are better capitalized. They've you know, basically gotten all this money from the FED and the government. So I think that when I look at the US relative to rest of world, I still think this is a year or two where the US is going to continue to

outperform rest of world. So emerging markets, to me, it still looks a little bit uh uh, you know, potentially risky. Not to mention that if you look at our economists, they're advising down their growth forecasts outside of the US much more aggressively than within the US. So I think those are all reasons to stay local, stay US focused. Even small caps I think could do well in an environment where the US economy is potentially you know, going to see a little bit of a list of companies

start spending again. You know, Tom, I just want to say, the most surprising thing to me during this earning season is that even though all of these companies are guiding down and you know, very negative in terms of what they're expecting over the next couple of years, they're still guiding up on cap X. They're still telling us they're going to spend more than we think they're going to spend. Capex cycles are generally good for the economy, they're good

for small caps. Maybe they're negati for the companies that have to spend the money. But I think it's interesting to see that capex is still a theme that companies haven't dialed back. Serveta, this week's staples have been absolutely hammered. Retails already struggled. You've been on top of that story. I want to want to send from your perspective, whether we're confusing two things right now, the difference between how much the consumer is spending and how they're spending it.

There seemed to be a massive focus on just the weakness, the signal that you're getting from the retailers that there was some weakness out there. Do you think the biggest story this week was just a shift in how they're spending,

not how much they're spending. So I think the big shifts are how they're spending and also just you know, labor, there's a there's a sort of a really dramatic shift in terms of undersupplied to oversupplied that we're hearing from companies, and that could actually benefit some of the more labor intensive areas of the consumer sector, like supermarkets or you know, we haven't seen these companies perform well, but I think that where we're where we are seeing a little bit

of an alleviation is in terms of the the labor supply, so that's you know, potentially a positive for margins. We're overweight staples for the long haul because our idea is, as Ethan Harris, our global economists continues to warn of rising recession risks, we think that staples, healthcare, no matter what, you still have to take your drugs and you know, eat your food. So defensive sectors to us still make

a lot of sense. In a stipulationary backdrop. The best performing sectors are energy, consumer, staples, utilities, to a lesser extent, materials. You want to stay defensive and you want to overweight sectors that benefit from inflation. Civita, you sound actually somewhat pessimistic, and yet your outlook for the end of the year is incredibly optimistic. At a target yest might be the low case. Are you thinking of downgrading is the base case?

And if not how do we get there? Look, so, you know, our our target is made up of you know, a few for factors, one of which is our our house view on interest rates, and I think that is the swing factor. If you look at this here, most of the big moves that we've seen have been accompanied by a move higher in either real rates or the

equity risk premium. Our view is that real rates continue to move higher, but rates volatility kind of abates, and we start to see um, you know, pe multiples essentially stabilize as rates volatility stabilizes. If that's not the case, we would be more negative. And I think that's the key factor to watch. Every tiny move and interest rates has an outsized impact on the SMP five hundred in terms of you know, it's longer duration, and we've talked

about this on the program. The SMP five hundred is now a thirty five years euro coupon bond is super sensitive to the cost of capital. You're saying this is Ethan's fault or monks folt? Whose fault is it? Both? They're both excellent, but we incorporate she's gonna get out of us. We're watching keep going. Now we're done We're done. Thank you, Brian. Little friends over there an set. They

aren't some, they're all friends. I love that. Right now, John Riding joining us your chief economic advisor, bring capital. But on a Friday before the close are Premier League football. Lisa and I opened this up for full discussion with a gentleman of Preston North then and young Pharaoh as well, John Farrell. The only player I remember from my ute was Gerard. I don't understand why I loved him, but I loved him. And I want you, in writing to talk right now about Sunday in for America, why Steve

Gerard really matters. There's a great subplot to the story on Sunday. So on Sunday you've got Manchester City top of the league, of the Premier League. You've got Liverpool second, Manchester City win. It's all Loafer but Manchester City. John Riding of playing aston Villa and aston Villa are coached by Stevie g the former great captain of Liverpool. That is a nice little subplot going into Sunday's games. Yeah, and and add to the fact that two of the

key players for aston Villa are former Liverpool players. In Danny Ings and in Philip Continial who were arrested against Wolverhampton yesterday, gets right against Burnley yesterday, and you've got a your potential chance for those uh two if if, if they hold City, they'll deserve winners medals from Liverpool. That is a big, big game, Tom, not just for Manchester City and Liverpool, but for some of those people

and Aston Villa as well. So lining things up on Sunday, Tom, I've talked Eastern time, eleven Eastern, all the games all at once, the final games of the year played simultaneously. It is great to see Lisa's their soccer Barn Davos. I mean, is this what I'm you'll find one? I'm good, I'm good. I wanted to talk about John Riding's experiences and wanted to actually talk about I know, well fine, John, but I want to talk about the FED. So bear

with me. Let me just take a quick move over there and then you guys can all talk about football and I will let you go to the public together on it. I am curious though, especially after being at the Atlanta FED confab just recently, there seems to be a belief in markets that the FED is going to recognize the slowdown that we're seeing in some of the data, and respond by pausing by not raising rates as much. That seems to be opposite the rhetoric from FED officials.

What was the scuttle But when people were talking to you, when they were not on camera, when they were not on the podia, what did they say when it came to their frustration with markets and their belief in a FED put. Well, what's remarkable is they don't pay. FED officials don't pay anywhere near as much attention to the markets as we do on a day to day sadly

minute to minute basis um. And you have to think we're with the markets in the fourth quarter of last year, before the FED had made its pivot, they were seeing very little interest rate action from the FED this year, and then they overshot FED guidance this year to get into the point where it was almost half a point to every meeting, and now markets are pulling back a bit. I think the FEDS looking that they've they've they've laid

out the game plan. We want to get some rate hikes underneath our belt, and we're gonna get fifty basis points done in June fifty basis points done in July. That takes you to the September meeting, and that is really the key meeting for I think we're short term interest rates sore going because it's all about inflation persistence at that point, and if inflation has ebbed sufficiently, then they're going to look for an opportunity to dial back I think on the rate hikes and slow to quarter

point rate hikes. But the experience that people have had with the FED for the last twenty years or so will not particularly help them guide the FED because it's different because we've got nineteen late seventies early eighties style inflation.

We haven't had that in the last twenty thirty well obviously in the last forty years during the rethume take, and so market responses to the FED, equity market responses to the FED aren't We're not going to see the same kind of sensitivity of the FED to market moves

as we've had when inflation was not a problem. So, John, it actually is probably appropriate that you guys started the conversation talking about football, and that people would rather talk about football right now than this because it's basically been the same story for a number of weeks now, and basically, the Fed is going to do its thing. It's an autopilot. Let's reconvene in September and see what happens. It's a quiet day for data for data, excuse me going forward?

What's going to change this narrative? Is there a data point or a series of them that you're looking for to really guide into September. It's the persistence of inflation, Lisa, the Fed. My all my interactions, all my reading that the FED is serious about getting inflation back towards the two percent target, and the problem is they don't know

what it's going to take to get there. There's something of an odd narrative coming from FED officials where they talk about two and a half percent being neutral because that's the long run neutral rate when inflation is back at two percent target rate, and right now inflation is much much higher than that. An underlying inflation is probably

somewhere around four percent. So the first talking about we need to get back to neutral and then maybe we'll have to get a little bit restrictive, and throwing that two and a half percent number out there as the estimate of neutral wants inflations defeat and that's a little bit put in the cart before the horse when you're trying to defeat inflation. But they are insistent. I think they're going to get moved towards that two percent target, and so the opportunity to dial back is going to

depend how much inflation has fallen over the summer. And I think that the chances are the inflation doesn't ebb as much as the Fed is hoping at this point because the broad two things that the broad based nature of the price increases, and we calculate in the last CPR report, for example, there was the items within CPI that were rising at a six per center faster rate over the last year, So that that's that's very broad

based persistence. That's the first thing. A Secondly, it's inflation expectations by the public and they are holding in in

longer term expectations by their fingernails. And yesterday, um we had the Philadelphia Fed reporting that tenure inflation expectations by businesses had gone up from three to three and a half percent, and people have seen food pricing increases and very sadly and that the dis conflict in the Ukraine has such terrible humanitarian dimensions but the main economic dimension for the US may well be higher food prices because of the impact on grain exports, because of the impact

on fertilizers, And that feeds into people's expectations because that is repeat shopping every week when they see prices. Right, So that was a clinic. I want to go back to David mel Pass, John writing and Conrad de Quadros of ages and ages ago John, and the bottom line is maybe, for whatever reasons you're worry back then has happened. We are so far from any constructed Taylor rule right now, it's unthinkable. And as you correctly say, we're hanging onto

an inflation expectations by our fingernails. What the institutional leaders do to quell the fear of higher inflation expectations? What's the prescription to keep us hanging on by our fingernails? Well, I think what we really need is a new monetary policy framework strategy. I think one area targeting are you're

going to go on New Zealand down here? Well, the Fed has a two percent inflation talk and how to two per cent inflation target that they bemoaned missing it to the low end by a few tens of a percentage points. So they adopted a deliberate strategy to raise inflation and and raise it above two percent by a moderate amount for some time. And now careful what you wish for. We've got it substantially above two percent for

a prolonged period of time. And and now what is the what is the strategy They need to really reassure the public, and in various ways, not just in Fed states, that they are very serious in getting inflation down, because it turns out inflation is not the stimulus to economic activity that the FED hoped. At least moderate inflation, it's hard to hold it at two percent, and the public

hates inflation. Jonathan and I, for example, have talked about this a lot about what our mothers think about it, and neither of our mothers think that inflation is very good for them when they see what's happening to the utility bills. John, fail talk about there right now, you

and writing are living this in real time. The family chat yesterday was lighting up, Tom just in terms of petrol prices going up, up, up and away, and John, just to speak to what the moms are going through right now for you and I for personally, that the call I get all the time is about utility bill at the end of the month. For those listening in, don't worry. I pay it and I'm sure John does too. And John, things are getting really, really tough for people.

What we saw this week from the retailers was just to shift in where they're spending. I'm not sure if we saw a drop off in how much they're spending, though, John, because when I hear from the airlines, the airlines are talking up how robust things are, how resilient the consumer is that the price tolerance is still there. What's your

read on that, John, Well, I think that's right. I think the companies are having difficult team managing an inflation environment and an environment in which there are severe labor shortages. You know, we need more workers, and you know, this is a weekend fortunately across New York City where we're going to see those future workers appear as you see all the grad's graduates on the street. And that's great

and that's hopeful for the future. But right now we're an environment of labor market constraints, and those constraints are causing companies difficulty in managing um managing the businesses, and so I think the story of those retailers early in the week was really more of a margin story than it was a consumer spending story. After all, April retail sales looked fairly sprightly numbers, April industrial production looked quite strong. Even April housing starts were flat on the first quarter.

And that that's the most interest sensitive sector economy. Sorry, I think all these fears that this is really about demand shortages are misplaced. This tremendous scess demand almost two job openings per workers. I said, that's good news for those graduates in this weekend. Um, but you know, if we take some demand out of the economy, we're really taking excess demand out. And I'm my fears have recession

in the short run are are are very low. That the problem is the longer term if these inflation expectations become embedded. John fifteen seconds on the clock. Finish where we started. Results Sunday prediction uh Liverpool win and uh Aston Villa Holt City to withdraw on the quadruple. Still on there we go, John riding a bring capital. John. Thank you. This is the Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays from seven to ten a m. Eastern.

I'm Bloomberg Radio and I'm 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 app, a podcast, SoundCloud, Bloomberg dot com, and of course, on the terminal, I'm Tom keene In. This is Bloomberg, m