Surveillance: NYC Safety With Adams

New York City mayor. This is two other candidates did not go for a recount and conceded in the last oh twelve even eighteen hours. Joining me now for a conversation with the Democratic nominee is of course Romain Bostic and for Lisa brown Witz. And we're absolutely thrilled af Shelley Banjo, whether she has driven our coverage here at Bloomberg just started out as yeah, another race, and then it became something different. Eric Adams, thank you so much

for joining us this morning. I'm gonna let Shelley talk about ear piercings and all that that we've seen in the last twenty four hours. I want to talk about your first meeting as mayor with the New York Police Department. How do you envision that will go. Well, first, it started already and it's not with the department, it's with the union heads. I had a conversation with Pat Lynch, conversation with Ed Mullins Uh, conversation with the president of the d d A is about going behind closed doors

and say let's turn a new page. I said this over and over again, the prerequisite to prosperity in the city's public safety and reform, and they are eager to sit down with me and say how do we move policing into the twenty century deeper into the century. But we re established the relationship between police east in community because I'll see this will be controlled by the good guys. Are the bad guys right now all across America, the bad guys are winning. I'm going to stop that immediately.

Are you gonna do that with Dermott Mcha at the Helm Although I'm not. I've made it clear that my police commissioner is going to be a woman. We're going to finally bring of the entire city the largest police department in the country Uh, into the twenty century of women leadership and law enforcement. And look at three of the candidates that I've been communicated with. And I'm sure you know obviously being a veteran of that force, that's

not gonna come easy. Eric. We've seen the fraud relationship between the police, the rank and file, the unions. Uh, and of course the mayors of the past here you've also had a relatively complicated relationship despite being a veteran of that department here, how do you bridge that? Eric? How are you going to do that in a way where the police, which are a mighty force in this city. Eric, some would say even mightier than the mayor himself. Well, first of all, it is easy, and those who stay

it's not going to be easy. Uh, they don't know me. I had difficult challenges in my life, being be arrested by police officers, assaulted, went into the police department for for reform, moved up through the ranks of captain of aim and state senator, now bar president, reverse diabetes by changing my diet, and so difficult challenges. It's not something that I run away from. I run towards. What we must do is stop talking at each other around reform

and safety and start talking with each other. And you're going to see an approach year a complete change in the atmosphere of public safety and how police officers respond. We're gonna rend the bad cops, We're going to back our good cops, and we're going to re establish the relationships in our communities. And it's going to be done in year one. I promise you back the three women that you're currently in conversation with. Are they within the

New York Police Department? Are you looking outside? Um? What what I don't want to do is say is it bigger than the red box or smaller than the house? Because that limits a number of potential candidates, and many of them are working right now, and I don't want to any way jeopard dies what they're doing. I'll reveal those numbers immediately after I win the general election in in November. I revealed the individual I decided fair enough, fair enough. And another big force to be reckoned with

is obviously Governor Andrew Cuomo in albany Um. You have had, you know, a checkered past to speak with him, but you know, you guys have run in the same political circles for almost your entire adult lives. Did he call you to congratulate you? And what's the first thing You're going to try to work with him in albany On? And we don't have a check you pass um. Clearly we are both strong and what we believe, we know

how to sit down and communicate. We operated together when I was in Obany and I'm looking forward to having him as a partner as we do with number one public safety. I cannot really emphasize this enough. We're not going to deal with major parts of our economy tourism. If we have shootings in Times Square, no one's going to get on the subway system that we could the

violence there. And so we're going to first deal with making our city safe, and then we're going to use the dollars that are coming from the federal government to go after the theaters of crime and the featers that prevent people from finally leaving institutional poverty year after year. And I believe that having in Orbany, we could accomplish this task together. Eric Adams. They're gonna study your candidacy, the path of this UH mayoral race for you in

Brooklyn and Bronx. They're also gonna study it in Boston and also in Boise, Idaho. You're gonna have a national ramification for all Democrats. What is your victory say about the certitude of the left in the Democratic Party. Well, you know, if you are a d s A candidate or if you are a Republican candidate, Uh, you don't want to be posted to train or slash three. So I think that what you're going to see on the face of the Democratic Party. I keep saying this over

and over again. I want four burrows in the city of New York. The only borough I did not win is Manhattan. My message resonated with everyday working people, and it didn't matter with your ethnicity, your gender, and worship. And I think that you're going to see this message resident across this entire country. And it's an opportunity for us to understand that we don't have to talk at

each other. We are in this together, and I'm going to bring a closer together so that we can overcome not only the pandemic, but also the pandemic of unemployment, of violence, and inequality very quickly. Eric, we are in television, you know, we are on radio and a number of radio listeners have emailed in and said, what's the piercing look like? Where's the piercing this morning, Mayor Adams, Look

at this. It's a it's a gold aery of my son and I. We attended a meeting with a group of young people during the campaign and they said that we were both with you if you commit and promise to get your if you become a when the primary and a promise made is a promise cap and I didn't guess. I can assure you the hundred nights Mayor of New York did not go through this torture. Eric Adams, thank you so much. We look forward to speaking to

you again. Let's be cleared the Democratic nominee for New York City mayor is a calm time for our Secretary of Transportation, Mr Buddhajudge. Of course we all know from South Bend, Indiana sterling acade dmics including something that we all did as a kid. Could we write an essay off John F. Kennedy's profiles and courage and the Secretary delivered the goods as a young uh a kid. We want to talk about transportation, We want to talk about

international travel. But yes, right now in infrastructure. Mr Secretary, thank you so much for joining Bloomberg this morning. I lived the last infrastructure disaster, which as you drove out Indiana west and there was a point where I a d died and you had a two lane highway west. We're going back to that on the condition of our infrastructure, and we're doing it because we cannot figure out how to do a gas tax. Can't you do a gas tax that will pay for the roads, rebuild America and

also be politically acceptable for Democrats. Well, it turns out

you don't have to. And what's so great about the bipartisan infrastructure framework that the President led that a set of Democratic senators and Republican consenators have come together on, is that it will deliver the biggest investment in American infrastructure in more than a generation, the biggest investment in our roads and bridges since Eisenhower, the biggest investment in passenger rail since Amtrak, the biggest investment in public transit ever,

without having to ask Americans to pay any more in taxes any American who makes less than four hundred thousand dollars a year. This is a promise that the President made when he was running for president, he plans to keep that promise, and so he was very firm on that. But what's clear is that it is absolutely possible to make these kinds of investments by looking to other funding

sources that don't ask that of ordinary Americans. And we're thrilled that this critical mass of Republican and Democratic senators agree. We think it's one of the reasons why so many

Americans agree that this is the right thing to do. Now, we need Congress to move it forward, get it to the President's desk so that we can get those dollars working, whether it's on our highways and bridges, are our airports and ports, or on some of the things that are newer to the infrastructure picture, like our digital infrastructure and getting everybody online. You mentioned Dwight David Eisenhower. I remember going off the infrastructure road of Kansas onto the two

lane highway to his museum. All wonderful. Dwight Eisenhower. I had to fight his Republicans to get the vision of the interstate highway system done. How can you bring over Republicans to get a majority vote to rebuild America? You know, uh, I found that people don't agree on much here in Washington, across party lines, but they agree on the needs, as

you've been describing, and as every American sees. You know, when I'm talking to two householdce Senate members, Republican or Democrat, what what I noticed that they all have in commas. They're all from somewhere. They're all home right now, actually this week, during this July four recess, they're all home talking to constituents saying, when are we going to get this bridge fixed? Why is our airport looking the way

it's looking. How how are we this far behind on on on transit or whatever it is in their district? And so, yes, I do believe that that that we have finally reached this point of if not consensus, then overlap. And I think that's why you had this remarkable site of the President walking out of the West Wing a few days ago, flanked by Democratic and Republican senators saying we have a deal. Now we have a deal is

not the same thing as we have a bill. That's what's happening right now, turning it into legislative text, moving it through these processes, UH committees that have jurisdiction over this. There's a lot of machinery, especially this month of July that is going through its motions here in Washington. But

it's it's resulting. I believe in in the opportunity for something that that we have needed for really the better part of my lifetime as we've watched these uh, these investments degrade, as we've coasted off of decisions that were made generations ago. You know, last time I was in New York was to look at the Hudson River Tunnels, the finest infrastructure technology of nineteen ten, and we're still depending on. Look at the john Look at the shade

the Secretary gives to New York City. Missed the Secretary. There are some things that are easy to get down and haven't been done. Infrastructure, it's one of them, my guests. Another is international travel restrictions. We want to work out when we get an update from your administration, when it's not going to happen, so it unfortunately it can't be based on an arbitrary date. It has to be based

on conditions. But I can tell you as as a Transportation secretary, of course, I am as impatient as anybody uh to see us move as as quickly as we responsibly can toward more forms of reopening right now. What's going on is a set of working group processes, so we've can been working groups with our international partners. Is one for the UK, one for the EU, one for Canada, one for Mexico to determine the right pathway forward. A lot of this is based on what's going on with

progress on the vaccines. Obviously we see good news and bad news out there. In terms of the variants, one moment you're reading about a variant happening across the world. The next you know it's becoming the dominant strain here in the US, and it is, sir, and if you allow me to jump in, because we pushed for time, the data variant has become the dominant strain here in the United States for America recording to the CDC, and

very quickly so too. From my position personally, forgive me for saying this, but you didn't have to watch your father's funeral down the screen of an iPhone on Tuesday. I did because of your policies. Now, I expected you to bring up the science and I expected the quote that came from you to be used because you used it a month ago, two months ago, here in the

policies for our audience so they understand them. Currently, if you're a citizen of the United States for America, or if you have a Green Card, you can travel to the UK and you can fly directly back. If you have an H one B visa or an NOW one, you can fly to the UK. But to come back to America you need to go to Mexico City and spend two weeks there in a third country to get back to New York. Sir, forgive me, but I've spoken to scientists about this, and there is no scientific rationale

for that policy. So for me and thousands of others who haven't got to be with their loved ones through a critical time because of your policies, sir, there will be thousands more if you carry on repeating the same line and don't just look at this and change it. Why are you not changing the policy when we have scientists day after day say there's no scientific rationale for

maintaining it. Well, first of all, let me say I'm sorry to hear about your father, And let me also say that I am among those who are impatient to see loved ones who live across the Atlantic. Let me also say that the US is going to be conservative. For give me for jump again to jump against keep. You keep going back to this, and there is no scientific rationale to distraw a distinction between someone who has a green card and H one b vis or an

now one. You know that. I know that. Regardless of anything you say for the next couple of minutes, it's not going to justify it. What I need to understand from you as a policy maker is why thousands of people who live in this country legally and pay taxes cannot go home to see loved ones and return directly. And why you still repeat the same line again and again and again. It doesn't make it true. You do not have a scientific rational for this. You cannot back

it up with science. Why you're not going go away with policy makers and doing something so our tools are imperfect, right, we are dealing with a country based framework for assessing risk, when in a perfect world we would know all the information we needed to have for a traveler based framework. We can move in that direction somewhat. That's more refined and ultimately more accurate from a risk assessment perspective, but

we don't have the toolkit to do that. In a way that would be as smooth as as we would want. So we're going to continue to have a strategy led by public health authorities, guided by Homeland Security c d C, my department at the table to reopen travel as quickly as we responsibly can. I'm not talking about a broad based reopening. Forget me for jumping in. Just just allow

me to get this thought. And because it's important to what you're about to say, I need you to understand that I'm talking about working people in this country who are working here legally. With the stroke of a pen, you can enable thousands of people in this country who work illegally and pay taxes to return home to loved ones. And you can do that by making an equal treatment for people with an H one B and our one a green card at a resident of this country. You

know that's not difficult. That's not a large change. That's allowing people who work in this country to get back and see loved ones like they want to. And so I'm not going to lay on this this on any thicker than I already have. You didn't have to watch your mom stand by your father's casket in a few old two days ago because you won't do what I'm describing.

It's easy, and us together in this conversation, I hope you go away and make the changes so that thousands of other people don't have to go through when I've gone through in the last month. Can we make that happen, sir? So, these are exactly the kinds of things that we're reviewing on a daily basis. I'm the Transportation Secretary. My entire job is to do everything I can to safely get people to where they need to be and where they want to be, whether it's to be with loved ones,

whether it's to do business. But it's literally what I'm here in Washington to do. Nothing about this, respectfully, Nothing about this is easy. We're dealing with a phenomenon that has led to the debts of six hundred thousand Americans. We're dealing with imperfect information, complex policies, legacy policies. Nothing about this is easy. But what I will tell you is we're doing everything we can as quickly as we responsibly can to get back up and running. Mr Secretary,

Would you support a passport equivalent? I have a passport. I happen to study microbiology. A few years ago why can't I get a passport, a federal passport that says I've been vaccinated. Well, there are a lot of privacy and technology issues, but I do think it's worth noting. You know, you may have had this experience too. I had it when I was younger traveling internationally of carrying a yellow uh CDC passport that reflected the vaccinations UH, that that I needed to demonstrate that I had to

travel to parts of Southeast Asia and Africa. We we have forms of this that are frankly very low tech and out of take. How to balance that with the privacy issues is a challenge, and we've decided that it's not the federal government's job to establish these kinds of requirements, but it is important to make sure that there are ways for people who want to demonstrate that they are

vaccinated to to to prove it. And UH We've seen a lot out of third party and private sector ways to do this, and I think that's going to continue to develop and needs to have continued support at the policy level too. What's your biggest headache right now and getting this infrastructure plans through? I know you're managing a message every day and certainly We've seen that with President Biden. This is a big emotional piece of American legislation. How

do you get it through with a fractious Senate? I think the biggest thing is not to let the politics get in the way with people are impatient for this to happen. But it's been infrastructure Week for a good decade or so, and we need to demonstrate that it's actually going to get done this time. Look, the policy framework is clear, the pathway forward is clear. We need these roads and bridges, we need better airports. There's a there are listings of airports, were not one of the

top twenty five is actually in the United States. That's unacceptable to the president. I think it's unacceptable to most Americans. We want to get this done. UH. The biggest thing we have to do is actually move it through Congress and make sure that as this turns into the very specific mechanical legislative text, that we're tearing down any obstacles

to getting into the President's desk. But I feel an enormous amount of momentum for this on both sides of the aisle UH, and our job is to make sure that that moment momentum gets us all the way across the finish line. Mr Sextrae, I appreciate it's on this morning, and thank you very much for hearing questions and from responding to them to Puddh Judge, the U S Secretary of Transportation right now, and we've been just thrilled what our booking team has done to bring in equity voices.

Liz Ande Saunders with us at Yar Danny yesterday Abbey, Joseph Cohen, and now we continue with Jonathan Gollub of Credit Sweets. His calls early in the year were distinct and they were different. We get an update this morning, John Gallub, can you give me SMP five thousand this morning? I gotta make some news. I don't know if I can give SP five thousand. But the things that have made me optimistic about the more get are still in place, UM the and more than anything else, it's earnings. We're

gonna start to hear UM. I think it's next Tuesday. From JP Morgan in the Big Banks, the consensus view is that we'll have sixty one upside and earnings versus a year ago. Our read is that that number is gonna be sev and if we're wrong, We're too long. Okay, so this is really important, folks. We're gonna stop the show right now because this is critical. We're gonna get to that earnings call. We all know consensus is different

now that it's ever been. John gottub, can you make a shift to secular growth based off those earnings or you gotta hide in the hole because the world's gonna come to an end eighteen months later? No, I mean I I don't think that this story is has changed as much as the headlines are. I think there's two battles. The fundamentals are unbelievably strong. This is gonna be the strongest GDP corder we've seen. The economic data is generally very good and continues to improve. Value is cheaper than

growth cyclical old economy. Boring companies are delivering stronger growth. These are companies like mining companies, things like that. Now, if you look at what happens, however, when interest rates fall, the market favors growth stocks in a falling interest rate environment, this is all of the market is great. The question is, just as you guys have mentioned, where's the leadership what wins within the market, Because the market still wants to go up into the right John, Why can't I just

buy the market by the SMP. Why do I have to get into the detail. Why is it all about active management this year when quite clearly you're doing okay just holding the SMP five hundred, John, I don't think that that's a I don't think that's a terrible call. If if you are a hedge fund that's watching this show, you don't have that option. You have to you have to try to figure out how you're gonna outsmart the market.

And for them, I think the story is between now and the end of the year, value wins, cyclicals win, and that there will be a time for growth. But it's not right now. If you're a long term investor, whether you buy the broad market or whether you buy these tech themes that that you see, you know that you that Romaine Highland we're selling off a long term it's a growth story. Um. So if you're an individual, you could ride the wave that way. If you're a

hedge fund, you've gotta play this more tactively. Let's put a bell on it. Then let's make the big point. What's more important here the earnings, So where the tenure yield is because John, I've asked that question repeatedly in the last twenty four hours, and the latter not the former. I can sense that you think it's very much about the former. It's about where the earnings go. Listen, if you're if you're looking at the overall market, the whole

thing is an earning story. It's a matter of fact for all those that are talking about how expensive the market is, because you know, because stock prices are up, um, there's been no increase in valuations and PETE multiples in a year. The stock market is moving only with the earning story. If you're looking at this in terms of within the market growth versus value, tech versus financials, then it's about interest rate, but the market it's an earning

story full stop. But put into perspective here, Jonathan, how resilient the earnings picture has been. I mean, there's been obviously a lot of disruptions. There's been a lot of talk about supply chains, there's been a lot of talk about wage growth. H The idea here that all these sort of various factors would somehow up end the earnings picture for some of these companies and overall at least on an aggregate basis, it's held up pretty well. Yeah,

you know, Roman, you make a good point here. First of all, Um, the smartest question I I recently got was not what is this year's earnings versus last year? Because we know last year was a beaten up number. What does it look like compared to two years ago? Are we are we above prior peaks? Um? The expectations consensus is that will be about nine above where we were two years ago. Our estimate is that will be nine percent above. But it's all the reports are in

for this quarter, so um, that's really amazing. We still have all this disruption. We can't get the things that we want delivered at all. Um. The unemployment rate is high, and yet we're talking by the end of this quarter we'll probably have stronger earnings growth that we did before the pandemic started. I mean, Romaine Gollub talks about the

smart question he got four years ago. There No, the best question Gollub got, Romaine was John Ferrell's question a moment ago, are we supposed to be worried about earnings or the ten year yield? That's the money question? Yeah, I mean, that is the money question. And look, I mean, obviously, Jonathan, you know, people are gonna obsess over this. They're gonna obsess over or whatever we are now. They're gonna obsess over whether we're headed towards one percent or whether we're

headed back up towards two percent. Here, I mean, provide some sort of soothing advice here. What what do you tell people who are maybe staying up late at night staring at their screens away John and Tom do on

this tenure deal. Yeah, well, you know, first of all, if you take a look, I made this comment, um, I guess probably about eight weeks ago when we were about one fifty, which means that we were an equal chance that we would get one on the tenure, equal chance we would get to one percent or two percent. And I was really vocal that if you end the year closer to one, the market is gonna be weaker than if you end the year closer to two. The market likes higher rates, and people just don't want to

buy into that idea. Higher rates are an indication that demand for capital is rising. It's a sign that the economy is strong. The reason the market is selling off today is because people ask a question, what the heck is wrong that interest rates are falling when this economy is supposed to be so good, so you know we want higher interest rates. I would argue that if the interest rates to continue to move towards one, that my optimism, well, I still think the market will be higher. That I'll

be proven to be too optimistic. If interest rates back up towards one and a half one seven five, the market is on fire to we get to move down to one, and that forty six hundred priced target of yours is in question. I think that the likelihood of me hitting that number is lower. And on the other hand, if we get towards one, seven five or two percent, I may be too light of my number. You're you

are right. There's no question. The sentiment of the market right now is all tied to what's been going on with the with the tenure and if if last starting season is right, it's similar to this one. Um, the market is gonna care if infestrates continue to fall apart the market as there's a chance he just ignores the earnings. I don't think that would be the case, though, Jonathan Gollob credits Chief Ectuty strategist John did you give us

a five thousand target. He didn't. He didn't. He said that if you to a higher he might re evaluate higher. He said, if he came lower, he might move. There is no chance of hitting that forty hundred. I think I think you're being a little bit kind Tom about whether there was a move that we're thrilled that robbed Cornell will join us this morning. John, with your expertise in the e c B, why don't you bring in Mr Cornel? Rob, Let's start with that. The price mandate

over at the e CP. You know what it used to be still is, in fact it is below but close to two percent that's set to change the day reportedly to two percent with a tolerance for an overshoot. Does that change anything whatsoever for this central bank in Frankfurt, Rob, But what it does is get rid of something that I think most of us have hated for years. I mean, we never really knew what it meant below but close to was at one point nine, was at one point eight,

was one point seven? Close enough? So for a start, as it gets rid of that horrible you know, lack of certainty over what the actual mandate was. But you replace something which was close to to below with effectively too, and you can perhaps go over for a bit. And really what we're doing is we're doing what the Bank of Japan did many years ago when it moved from one to two. You take a target, you shift it, you've got no more tools, you going to miss it

by a bigger margin. So it's all about credibility. And I don't necessarily think this is going to change an

awful lot. We'll rob. Their own forecast captured the credibility issue over the e CB on CPI one point nine for this year, one point five for next, one point four for the year after, even with any interpretation of their mandate, even with that, even if it adapts, even if it changes in twenty five minutes time, whatever it is, rob, they're still forecasting deceleration through CPI at to one point

four and while below this target. So it's their policy starts wrong, or they just have zero credibility now to achieve it. Well, I think you have to wonder whether these these targets are actually sensible. Why too, why not one and a half? Why why have we chosen to We don't seem to be able to achieve it um this year? Of course, we have all the benefits of looking back at last year's terrible price level and a nice comparison. It just lifts everything. It makes it so

much easier. But that won't last. We all know that we've got a little bit of help from supply bottlenecks that's pushing things along as well a little bit. And we've had up until now a little bit of a us coming from OPEC class at least giving us the sense that possibly they might do something with with supply. But that's that's clearly not going to happen anymore. So oil is probably headed back down again. Um yeah, I mean,

credibility is a tough one. But you know why why your colors to a particular number, It doesn't make sense. Rob Cornel frame for us a German response to what we're going to hear from Madame le Guard today. The idea of moving from ArtMark is seeing to Axel Weber and and dividemin. Is this a different Germanic response or is it going to be the same old, same old. I think the German response has been mellowing over the years.

I mean they've been the very very much been Bunder's bank over the years, which has been very anti a lot of the stuff that the E is doing from quantity of easy into you know, pretty much anything at the moment, But that that has changed in Videnmin seems to be mellowing as well a little bit. I mean, he'll he'll retain a sort of Germanic hawkishness with throughout all of this, but I think they can see that there's some merits to pragmatism within this give that that

the previous policies just simply haven't worked. John Ferrell gives a set off into some Germanic carcassianess. We've noticed that is well, rab I'm going to steal from the good people over at rabble Bank this morning. They make fun of the acronyms. It's like the military rabble Bank on the E C B. Is it f I T? Is it f A T? Is it f l A T? Or is it f l O P? How big a

flapper is this going to be? Old wise one? Well, what they can always do is this, they can wrap this up in all sorts of other things as well. There's plenty of other stuff as well as the target that they'll be talking about. They'll be talking about whether or not they can bring in sort of more environmental targets. They can even talk about whether they should be thinking about a different type of inflation measure, you know, perhaps bringing in house prices into this, which they haven't done

particularly well. Um and talking about you know, do they need to think about headline rates as they've always done in the past. But we know that these are flipped around by all sorts of supply measures that they have absolutely no control over whatsoever. So you know, there are there are other things that they can do to try and minimize the focus on the fact that what doing is tinkering around the edges of something which is fairly marginal.

Rob What about the other components of this review, the employment component as well as this focus on climate change. How does that fold in to the inflation outlook as well. Yeah, that's a very interesting question, this whole employment theme, because I think one of the things we noted pre pandemic was that there was next to no relationship between the

unemployment rate and what was happening to wages growth. Now we are seeing something now, I mean, the US is giving us the rest of the world an interesting lesson in what's going on there that there can actually be a relationship again. But we still don't know whether this is you know, for keeps or whether this is simply a one off price level adjustment as we adjust to

the new norms of a post pandemic world. So it's entirely possible that in two years time we still have a point where the economy is running okay, unemployment rates rock bottom, and you still have no wages growth. Then what do you do? So I think, you know, complete change of viewing unemployment as a particularly causal factor could be helpful, But then what do you replace it with? There doesn't seem to be anything else to to bring

in to take its place. When you look at sort of the lessons that we can learn from the shift that Japan made, into a certain extent, the shift in tone that we saw out of the FED here, how does the EU, and more importantly, how does excuse me, that does the e c B And more importantly, how does this sort of collection of countries all that to a certain extent have different goals and to a certain

extent different economies. How does the reaction, How does the outcome of this, if at all, end up different than what we're seeing in Japan? And the US. Um, well, it might not. I think the one thing that we're doing at the moment as we just all focus a bit more on fiscal policy. I think if you accept a lot of monetary policy around the world has run out of pet that it's you know, pushing on a string.

It's been doing that for many years, then you have to look at something else, and fiscal policy it's the it's you know, it's the story we hear about from Washington in the US all the time. Um it's the story that we begun to hear about finally from from Europe as well. Japan's already run that race and sort of spend everything. Um So I think that's that's where we head back to. That's what can push things along.

But the money has to be spent, Sen sence. We can't just print it and chuck it around in a sort of really newly fashion. It has to be put to useful, productive uses. Rob. It's been way too long. It's going to catch up, Rob car now that I MG a specific head of research in chief economists Katarina Simonettias with us in private that well, there we rarely talk to people in the trenches and we do so today.

What's your biggest headache right now, Katerina, With people that say I need to make money like it's in the market, but I don't want to take risk, what do you tell them? Well, Tom, it's thank you for having me on the show. And uh, it is such a weird environment that we're in because on one side, our yomic

forecast remains to be positive. On the other side, for a while now, we have been calling for a correction of pullback of some sort, you know, anywhere from potentially maybe tend to to twent uh and we are saying this in the context of the ball market, but we're preparing our clients for the fact that this economic cycle seems to be happening a little bit too quickly in some type of a pullback. Here it just seems natural

and normal. And this is not the reason to exit the market, but certainly a good trigger to reposition the portfolios, to go to safety, to take some profits of the table cats in your colleagues, particularly the investment bank, the likes of Allen setting that, Chad and Ia, I'm thinking of Andrew Sheets as well. I'm thinking of Mike Wilson.

They've been focused on this cycle as well, and where we are in this cycle, and a lot of people are struggling with that as a framework, because the team at Morgan Standing believe are already experiencing a mid to like cycle dynamic, a mid cycle dynamic particularly, really to explain that to our audience why we're already there so quickly. Well, generally, you know, these things stayed time and boommarkets last for

a while. But because of so much stimulus and because of this whole you know, economic reopening that that we're going through, everything is happening quickly, and we seem to be going into this mid cycle area of the market owned four volatility, which is known for corrections and fee bags. So because everything is happening quickly and economy is so stimulated, and there's some developments and concerns that we're having right now dealing with inflation, with labor shortages, with higher cost

of materials. You on one side, we have this growth of recovery. On the other side, we have the volatility.

So we think that the pullback and the correction at this stage in the recovery, in this mid cycle transition that we believe that we find ourselves in it's only natural here, only natural, And this is a pretty broad based pullback, at least for today, I mean pretty much thing of significance higher here, at least in the pre market Kindarry, Now, I want to go back to, uh, the economic data that we've been getting, which has been mixed, and it's been mixed pretty much for the whole year,

despite the fact that most people have taken much more of a glass half full approach to it. There are a lot of surprises out of that data, a lot of upside surprises, and that seemed to fuel a big part of this bull run that we had over the

first few months of the year. Those surprises have sort of flattened out, and I'm wondering if you read into that any sense here that even if the economy continues to chug along and chug along higher, the idea here that will be pleasantly surprised in any meaningful way is past us remain I think that one of the key factors here is that there seems to be a bit of a disconect with the way Federal Reserve sees the inflation in the way that that investors and consumers see

the inflation in every single day of their life and naturally their concerns. And so what we tell investors to do is to focus on earnings, to focus on quality, to focus on fundamentals, because I do believe that we are going to speed the positive surprises, but we have to be very careful with our portfolio selection. We have

to be very careful with our security selection. When we look at quality, we look at earnings, We'll look at the long term opportunity, you know, for the stocks to make sure that the valuations that we're seeing are actually supported by earnings. Because we sow so much run up in some of the sectors of this economy, in some of the individual equity, that the question is is this sustainable? So if there is ever a time to go to quality to increase the overall quality of investment portfolios, this

is the time, Catarina, We've gotta leave it there. It's always got to catch up. Thanks for you, and it's kind of ready. Siminarity, the Morgan Stanley Private Wealth Management Sania Vice President. This is the Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays 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, and this is Bloomberg.