Surveillance: Stimulus Payments with Bernstein

catch up with Jared Bernstein of the Council of Economic Advisors. Jared, it's always good to catch up, sir, Thank you for being with us. Let's just start here with a question that I think a lot of people will be wandering. Really solid payrolls report. The outlook is brighter, the vaccine time table. You guys have accelerated it. Why on earth do we need a one point nine trillion dollar bill. First of all, it's great to see you too, Always

enjoy catching up. Look, I think we need to get under the hood of this job report in a second. We're always happy to see more people get more jobs, but let's take a breath here and look at the bigger picture. This job market is still down nine and a half million jobs from a year ago. That's actually eight hundred thousand jobs worse than the lowest point of the Great Recession. We learned today that the black unemployment rate is just below ten P nine point nine P

sixty nine thousand educator jobs down. That's a million over the past year. Our state local help from the American Rescue Plan directly targets that problem. So there is a lot of economic pain out there and that hasn't changed because of this one print, especially by the way, a print that was driven. Uh of those gains come from the very volatile leisure and hospitality sector, a sector that a couple of months ago shed half a million jobs.

So let's get under the hood, let's take a breath, and let's recognize that many, many Americans are still in the throes of this crisis and need to help delivered by the American Rescue Plans. So, charge, what do you think that that argument that you've just illustrates it quite

perfectly is not resonating with prominent democratic economists. Uh, In fact, that not only is it resonating with economists on both sides of the aisle, it's massively resonating with the American people, which I would argue are the most important group here, even if I argue, even if I'm neglecting my own profession of it. Here we're talking about approval rates for this plan that are north of se I just saw a number that was seventy five or seventy six, and

and and bipartisan. By the way, you know this word partisanship, it means something different in Washington than in the rest of the country. This is a plan that, whether you're a deed or an r you want to see the

schools open. That simply doesn't happen in a timely fashion that's acceptable to this president without the American Rescue Plan, distribution of the vaccine, getting shots and arms as I mentioned, schools providing checks, relief, unemployment an insurance by the way, unemployment benefits that expire in something like eleven or twelve days. Without the American Rescue Plan. The urgency of this plan is just as as big as it was yesterday, and

the American people know that. Jared, Let's pick up on that, because in many ways, yes, that is true, but also you are stating the obvious. If I was getting sent a four hundred dollar check by you, and I was surveyed, I'd be approving it as well. No wonder there is a high approval rate on the economist on the democratic economist Larry Summers, former Treasury secretary, raising questions about this,

Olivier Blanchard raising questions about this. And I have an economist after economist on this program with me, raising the very same questions. Did the matter? And then let me just finish the question, Jared, let me just fit Quinnis finish the question quickly. You've said the electorate matters, and of course they approved this. If you've lost the argument

in financial circles and in markets, does that matter at all? Well, first of all, the objection from Larry, for example, who is a good old friend of mine, to whom I try to catch up with as often as I can,

and we'd us agree on this heating point. If you read what Larry is saying at all carefully, he is absolutely agreeing of the need for relief, the need to finally hit this virus with the knockout punch that is here tofore alluded it, and finally get us to the other side of this crisis so we can launch a

robust reliable and racially inclusive recovery. So there is definitely arguments about this heating question, and that has a lot to do more with the size of the output gap and the speed of the spend out and whether people are gonna save or spend. And those are nuanced arguments that I'm happy to get into. But in fact, you know, there are very few economists who disagree with the need for this plan. There's argument around the edges. Now you

set a second ago, you know the people like it. Well, sometimes if the public you know, north of approve of a plan, that actually means it's a good plan. You don't have to hope forthink it, especially in a period where we're nine point five million jobs own from where we were a year ago. If you were telling me we were at full employment, we'd be having a much different discussion. The black unemployment it is almost ten percent.

So the urgency of this plan is recognized by the American and people in a way that we should pay attention to jam. There's a need for a relief. Everyone agrees with that. I don't disagree with you not had hit to advocate a separate argument. It's about the composition of this plan, And more importantly, for a lot of people, it's about the size and you know that, and the size is absolutely massive. Secondary Summers, who comes on bloom Bug,

has talked about this repeatedly as well. The worriors you know is this takes all the oxygen out of the room to secure an infrastructure plan down the road, to secure public investment. And you'll be overwhelmed if we do overheat. What gives you the confidence, what gives you the confidence that we won't overheat? That this isn't big enough? Great question, So I'm gonna get to that. Let me just first

slow address this targeting point. There are elements of this plan that reduced child poverty by fifty that would be a massive success at a time when low income families, many of whom are essential workers, are under trum mendous pressure. This plan targets state and local government, said, as I just told you, have shed one point four million jobs, one million of those jobs in education. Now heating versus overheating. Let me be very clear, nobody is saying that the

risks of economic heat are zero. In fact, we've already seen and you've reported on some of the heat that's generated by expectations. There's plan heat that I, by the way, would consider vitally important to an economy that's experienced much more deflation than than inflation in recent years. Why am I confidence against overheating? Well, for one, the output gap

is much larger than many economists assume it is. And if you if you look at some of the works safe from Goldman Sacks, you'll find an output gap that's twice as large as some of the sort of inflation Eastas are saying. Secondly, the spend out is considerably slower than some folks believe. That is, according to the Corressional Budget Office, this does not spend out in one year. It spends out in two years. And that's important both in terms of making sure the fiscal impulse is lasting,

and making and and and and putting down overheating risks. Now, to be very clear about this, people will start getting checks very quickly, people will get unemployment insurance benefits very quickly. But some of the longer term plan parts of the plan spend out more slowly. Finally, some folks are going to initially save some of these resources. That translates into

a lower multiplier and less inflation. Is that a problem. No, I think it's actually a feature, not a bug, because in times of great pandemic induced uncertainty, families who usually have negative or lower or zero savings rates need that kind of a cushion to help deal with the air pockets that they face over the terms of this crisis. That final point there is the difference between relief and stimulus.

What those checks get used for. And even I've spoken before and you've said it's relief and it's not stimulus. So help me understand this just a little bit better. How do you calibrate who those checks go to based on where the need is and what the money is used for? And why did you come up with a number at say seventy and yeah, so first of all, let's let I think listeners may sometimes reasonably be confused,

what do you mean relief? What do you mean stimulus? Well, so oftentimes stimulus is designed to get people back into the labor force as quickly as possible, to spend out UH and have higher multipliers on the kinds of of resources that we're providing, and definitely a lot of that will happen are anti eviction resources in the in the rescue plan get to people right away and help them cut down some of that debt that they've been accumulating

for from rent. But others we've found when we've when we've seen past examples of this, initially save these resources because they can't go out and spend them as quickly as they want, and then when they hit an air pocket in their personal economies, that's when they spend. So having this cushion, this relief cushion, is essential to them. In terms of the targeting of the checks. Congress recently ratcheted down the high end of the phase out of

those checks, so they phase out sooner. But there's no question if you actually look at the kinds of burdens that people face, if you look at some of the low aiming rights that they went into, that a single family with seventy k is facing hardship in this economy and they need those direct income income payments just as much as some of the well targeted That's just as much as some of the more directly targeted to the poor payments that I mentioned a minute ago, helping to

cut child poverty by fifty percent. Jared, I hear you're fighting for this, and I know you're passionate about it. What it don't here is the same passionate fight around a high minimum white. And many people might sit here and ask the question, why don't you're fighting hard enough for it? Why don't you fight hard and want you to go shedding? Wann't you willing to give something up to secure it? What's happening? Uh? You know now that

you've raised the minimum wage. Let me tell you that I have been fighting for that policy, uh, for my whole career, which last too many, too many decades for me to get into. And the President of the United States, far more importantly than me, has been fighting for this ever since the campaign. And I want to tell you right here on Bloomberg TV that he is not going to stop fighting for that. He is committed to fifteen dollar in our minimum wage, phasing in over a few years.

He's going to continue to fight for that. And the people who say that that's somehow unrelated to, uh, to what's going on in the country, I think are just missing the boat. You've got millions of low paid essential workers working away, toiling away at a minimum wage that said it's seven dollars and twenty five cents an hour. Now if anybody who can hear my voice thinks that's that that's an adequate wage for you've got an argument with myself and the President of the United States. Because

we believe that minimum wage should be raised. We need to figure out how to get from here to there. And trust me, that is going to be an ongoing focus of this. Why let's finish there on that road. Last time around there was a willingness to draw taxes own companies to face this in Can we do that again? You know this is neither the time nor place for that negotiation. But you are right that historically those kinds

of things have been paired. I think there are many variations that we're gonna have to work with Congress to get from here. To understand you, what with me? Are you willing to negotiate with them on that point? And are you I'm really here for the economic analysis. The negotiators are a different group of people. What I'm here to tell you is that this nation can get to fifteen dollars an hour UH in UH in a phase

out range and provide much needed relief to people. It's a simple plan that that has the intended consequences of raising the pay of low wage workers without having distortionary effects on the other side. So full speed ahead on the minimum wage. Let's catch up saying it's gonna see John Best the Council of Economic Advisors, thank you right now joining us. And this is the perfect guest to start on radio and TV. Sevida Supermannian is a Bank

of America. She has bulletproof skill sets out of Berkeley and mathematics and philosophy as well. Forget about the mathematics, Sevina, this is a nuts job's day. Give us the equity philosophy of Supermania in this morning philosophy. You know, I think it's simple. I think that we saw a very strong run up in the market last year anticipating and economic recovery and earnings recovery. And this year we're not going to get much more on the multiple expansion side,

but we are going to get the earnings. And that's where I think, well, that's what we need to watch this year is how strong earnings actually come in. I mean, we're penciling in something close to earnings growth, but if we see anything short of that, yeah, I mean it's a it's a blockbuster number for earnings, but I think what's fascinating is that the market multiple expanded even more than that last year. And you know, Tom, this is kind of typical. I mean, the market generally anticipates the

good news before it happens. And now what I worry about is that the bulk of news we're gonna get is going to be less good and it's more about you know, kind of uh inklings of inflationary pressure on margins. Do companies have the pricing power to pass this on

to consumers? That I think is to be determined. So so I think this is going to be really kind of a show me year in terms of earnings growth, um, you know, in terms of the fundamentals actually supporting a fairly lofty multiple on the SMP five hundred right now. So I just build on that. Why we're so challenged on the SMP five hundred at the index level. You have the year end price target I think thirty eight hundred thirty seven right now in future is why are

we sub challenged at the headline? Yeah, I think it's because of the constitution of the market, and we've talked about this a lot on your show. I think the SMP five hundred is not a proxy for the US economy. It's a proxy for low interest rates, disinflationary pressure, secular growth. It's much more defensively tilted than any other index you can look at. So I think the real risks this year are going to be in the SMP and even

more so than NASDACK. But small caps, you know, value stocks should still do okay as long as the economic recovery remains intact. I do worry as we approached the end of the year that the news is going to go from you know, kind of pretty good to to more negative. And I think what we start to hear about is how to fund this this big fiscal stimulus program.

Maybe we start to hear more rumblings around tats hikes, um, you know, I don't you know, in terms of the taper, I don't think if the Fed starts talking about tapering their their assets purchase program, I think that will be negative for risk assets. So those are the factors to watch as we as we progress forward in the year. But I think what we're watching now is just earnings. If inflationary pressure is enough to actually take a dent

out of earnings, that would be negative. But if companies actually get pricing power that I think is the big positive here. As you speak, I think about sort of a double way at me of risks. We've had a lot of investors come on this show and say that yields have not responded to the positive sentiment that we've seen in equities. Right, they haven't baked in that earnings growth of that you're talking about. Now, those yields are those are starting to They're creeping up at the same

gimatically that stocks have already priced those in. And our price to perfection and our subject to disappointment. How do you walk through those double whammys, the idea that yields could rise hitting the relative valuation of stocks at the same time that we're still getting disappointments with respect to earnings. Yeah. Absolutely, I think that's the way to think about investing this year is inflation protected yield and I think they're What you want to do is look for dividend growth stocks.

This is one of the reasons I like financials. Financials offers relatively inflation protected dividend yield and cash return. Financials participates in economic recoveries, has a low payout ratio, has room to raise dividends, UM other stocks like that in the consumer sectors and industrials. I think that's the way to play the year. Don't get too fancy, um, you know, look for cheap inflation protected dividend field because we've already seen a run up in a lot of the low

quality recovery place. Now, I think it gets a little bit more difficult in terms of how to how to position your portfolio. I do think go ahead, it's likely I'm gonna interrupt, Sevina. Tell me about revenue growth stocks. I mean, I get the yearnings growth stocks, I get the cash flow the dividend outed out of everybody's talking, including Ethan Harris and Michelle about you know, a bigger, bigger,

bigger economy. Am I right that I learned in my philosophy a Supermannian that means revenue growth matters well, revenue growth and free cash flow growth. Yeah. I think that's absolutely right. So we're moving from just a price to book driven you know, by the cheapest stocks on on anything, to an environment where, like you said, you want to see the revenue growers. And I think what's really interesting this year is that we are seeing a market change

in the sales acceleration stories. And it's it's an obvious point, but you know, last year was a very different market. We had tech as the real revenue growth the stable, stable revenue growth stories. This year we're seeing revenue growth expectations in very different pockets of the market, and consumer services sectors and industrials and cape s been a fish yaries.

So I think that's going to be the pivot is moving from a growth and a tech dominated market under this stay at home environment that we've been in to a reopening play where you know, some of these smaller, more beaten down cyclical companies really have that revenue acceleration that's going to drive drive their their stock prices further from here. And interestingly, Energy this way up thirty three

year today, how stretched do you think that story is? Look, I think energy is still a buy and the reason is that if you look at positioning and valuations, they still suggest that your long only institutional fund managers are not necessarily moving to even an equal weight position. The world is still very very underweight energy. And if the FED is willing to accommodate inflation for a longer period of time, and we're going to be in this late cycle type of market for a longer period of time

than is normal. Energy is one of the best ways to hedge against inflation. So I think the sector is still a buy until we get to a point where it looks a lot more expensive and the world has gotten there Sevida, we were just talking to pre amr Over at TV Securities. She predicts a two percent treasury yields if we get there. How much more downside is there on big tech stocks? Yeah, No, I know, pre

and I think two percent is achievable. Um, So you know, I think the downside to big tech is as potentially, um, you know, akin to what we've seen already. I think about it. We've seen a pretty dramatic move in rates. We've seen tech sel up. Expect kind of another leg down similar to what we've seen already. Um, you know, I think tech is ultimately longer term, uh, you know,

a long term growth story. It's a bye. But I do think that in the near term, as we see that cost of capital increase and some of these long duration stocks could get hit by just pricing in that new discount rate on a on a DCF basis. Sorry, I got to my math side of very good to appreciate has always the catchups of eight to supermanti bankf America Security's head of you I secuity, anti rit strategy. It is time I get less distracted and look at jobs today, and I hope you agree. Ellen Setner is

wonderful to do this with Morgan Stanley. Ellen, you have reaffirmed a stronger g dB statistic. Talk about the backdrop of jobs is it links into year six and even seven economic growth. So the backdrop of jobs is really important.

I mean, we're passing more fiscal stimulus UH this month, and that's going to continue to build the bridge hopefully to win jobs are really coming back hand over this because you need that bridge in order to have those government transfers help households, help workers that are still without jobs until we get those jobs back and we can replace that with labor income. So the income growth has to be there in order to drive consumption in GDP

as high as we've got it. We don't think today's report is going to be more than a trickle of jobs back, but I think in a couple of months we're going to see that that really barely Okay, well, this is really important as we go from a DP to claim. So the jobs report many people ellen above you at a hundred thousand, How would you perceive and how does Morgan Stanley perceive markets will react to a Zentner a hundred thousand. So I think the I'm glad

you asked how markets reacts. Of course, from economist standpoint, will borrow you to death. The different statistically between sixty thousand and a hundred eight thousand is pretty much nothing when you think of the wide standard deviations that are in this data. But the market right is looking for any positive data uh in order to continue to justify this march higher UH in the ten uere And so if the if the if we get something above consensus,

meaning so it goes beyond market expectations. So we get sort of the higher especially like the five hundred thousand, which is one of the top end estimates from from Bloomberg contributors. UH. You know, certainly that's something that is bound to send the tenure higher. Right, the market is looking for things to justify this move. Now, is a

higher tenure justified? Absolutely, We're going to be in a completely different spot with the outlook looking much better as as Governor Brayner has said earlier this week, the direction of travels perfectly fine. The markets should be pricing in a better outlook. It's just the volatility UH and speed at which we get there that tends to be uncomfortable for the Fed. Outside of the volatility of Thursday. Allen, what should the FET chat be uncomfortable with right now

that you think he's ignoring? Do you think he's being slightly tone deaf anywhere? That's all well, I don't think that he's being tone deaf, but I don't think he's sending the message forceful enough for markets. I think you did a good job of framing this earlier on the show, talking about basically they don't speak the same language. The FED can feel like send a strong message. I mean Pal's message when I read it as an economist yesterday

was things are good, things are getting better. There's there's even less downside risk to inflation. There's probably upside risk to inflation, and yes it's transported, but guess what, We're still not going to do anything that is risk on. If that's not a risk on message, I don't know what is. But it wasn't said forceful enough, so I don't think. I think it just sort of went over

people's heads that were that we're watching. So the FED needs to be much more forceibule in this communication and most likely he'll take advantage of that at the March seventeen meeting when he does a Q and A. But they're gonna be challenged on this all years. The data continues to roll in. It's just confirming a good outlook, but the market tends to take that and want to take it even further. And I think you've nowada and

some I touched on this earlier. This is going to be the debate, not for the next couple of weeks. This is the debate for the next several months when those base effects start to kick in and we start to get that tuggable and what I think would be really, really fascinating and we haven't seen it yet. The real test of the fed's credibility would come if we've got to break out at the front end of the yield curve, because people started to believe the FED would blink and

I don't see that yet. Pick your company's Amazon. We spoke to Exxon yesterday. I know, John, you love the Delta Airlines interview. How do those companies perform given a Zentner seven GDP if growth gets better? Good times Even if you would go higher, Ellen, And isn't that the story? If yours go higher because growth gets better, that's a

good story. I just wonder if we start to get that challenge at the front end as the months progress sellen, if we do start to get a real tug of wars, some real tension, and so believe the Fed could blink even though they've told us what they expect and they've told us what they'll do when it happens, which is nothing right. So that's why I think it is going

to be quite the communication challenge for them. In One way that they can keep the front end end is altering the timing or pushing out the timing of when the bed draws down its balance sheet. You know, even if the FED starts tapering in January two as we expect UH, and you taper at every meeting, which would be in line with the pace that they tapered at UH, you would be looking at the bulk of two that

it takes to finish paper in the balance sheet. They will not raise rates before they finished papering the balance sheet, so there's only you know, so far forward that rate hikes can come, and so the front end can be

addressed that way in through communication. We think at the March MC meeting, even though they revise up where their forecast for growth maybe show a little bit more inflation in the near term, uh, we still think that they're gonna fail to show a median UH placement on the dot plot of an expectation that they'll hype before the end of three. So that's going to continue to send

a strong message to markets. Ellen. Just to tie this all together, there's a bigger idea behind everything that we're talking about, which is, at what point does market turmoil or frankly a sell off and risk your assets affect the underlying economy. And this is really a key question as we take a look at froth that's getting blown

off the top, which might be healthy. So at what point should the Fed start to care about a sell off and say stocks, or a sell off in credit if we don't necessarily see companies having to borrow money because they've already excepted their maturities and there isn't that clear cut financing transmission mechanism. Yeah, so it's a great question, Lisa. So essentially they care when they look at underlying financial conditions and they've they've tightened in a way that threatens

the outlook. And this is why even though the tenure rising is fine, we should see a higher tenure. They don't like the speed or volatility UH in movements in the tenure because it creates uncertainty and the Fed likes to be certain about its outlook. So when you strip out the change in yields right now and you look at financial conditions elsewhere, they've just moved sideways. They've not

tightened at all. And that's why chair of PAL can sound comfortable about the increases in the tenure because there's not any sort of spill over effects with affect the economy. You mentioned the stock market and credit. Stock market low on their list of concerns. It doesn't have a strong transfer mechanism to the rest of the economy. Credit does,

so UH. You know, yes, high yield UH is still performing okay, right, but if spreads UH, even in high yield widened, funding levels are not as favorable, and that starts to affect other up the credit quality chain and starts to drag out I G spreads right that has an immediate upfront impact on the economy, especially the labor market. And with long tails, that's when the BED gets concerned, and that's what happened in late and that's when I think you get a very very different chairman, pal Ellen.

Great to catch up as always, good to see Allen Xeta, the wonderful Elenxetna of Morecin Stanley, the chief US Economy is looking for six and a half percent GDP in twenty one and five and twenty two. Compare that to the FED at five and three point seven. Let's bring in Prayer Misrael Teny Securities Global head of Right Strategy. Prayer, Let's just start at the top, a new forecast two on a ten year year end. What was it before and why the change? So we were looking for one

fifty or to be precise, before yesterday. Why we changed it was we heard from chap Owel that he wasn't worried about the moves that happened over the last couple of weeks, which I would argue only part of that moves was for healthy reasons. The other part was technical. Was supply fears, was fear that the FED might step away, and we have a ton of treasuries to take down. And we just heard from Chap Howel that it's not disorderly enough, that this is not tightening in financial conditions.

So the market is going to dann from some more. And you know, I think the market is looking ahead. I think every market is looking to the end of COVID. But at the end of COVID, we've got a certain post COVID normal. But we also have a lot of treasury so I didn't really move the front end as much. I think the FAT is going to be has a really high bar to hike, but to taper, they have us, you know, a shorter b bar to hike, and we

have a lot more supply. So it's really the long end that I think is going to sort of try and force the Fat's hand. But we're not there yet. So you know, I think rates are going to keep rising until we get that disorderly market functioning or we get that persistent tightening in financial conditions. Tell you we're not there yet. I think it's fair to say that

that seven year auction last week was somewhat disorderly. We've got thirty year bonds coming out next week billion dollars worth thirty eight billion dollars worth of ten year notes as well. So to bring you concerned about that extra supply coming in the next week, given what's been happening in this market over the last couple of weeks, I am very nervous. I mean, I think we were all looking for the fed chair. We didn't get that support. The market is going to set up, so I can't

say that the auction will be awful. I mean, we know that auction is coming up. I think you're going to get once perils is out of the way. We don't have a name of fat talk, they're on blackout. I think the market is going to set up for that auction, so expect to see higher rates into the auction. But you know what, there's another There's a twenty year right after, and then within a week we'll have two

five sevens again. So it's just the pace of supply here is so high that I think every auction is going to be a stress point for the market. Does it spill over into every other market? I think that's the question. Do you correlate really yield into your two percent call? You go from a negative zero point six four out. Let's say zero percent. Can you say that? I think zero to me is really hard to see. I think the you know, at that point it's going

to start to impact the real economy. But you know, we are expecting a little bit more on the inflation front. I think you get that reopening related. You know, catch up demand is going to help inflation expectations. But I do have higher real rates by the end of the year, still negative, but you know, negative twenty five, negative thirty. I think maybe financial conditions can just about handle that. I think much higher or positive is going to be

very hard. Pre we're waiting for your comments on the plumbing. We're looking out at the tenure duration and the measurement of the tenure duration and the overnight and the repurchase market is extraordinary. All would suggest absolutely historic. Is this a big deal of concern or does this gets solved? Is more issuance comes out? I think it gets so. I think specifically for the tenure report that's trading negative three percent historic um, I think that gets solved as

supply comes in. For the front end plumbing, there's a separate issue where we have a lot of reserves in the system hopefully the fatties is the SLR constrained. I think we need more for those very front end rates to rise. There's a big t G a balance, so I think very front end rates stay low. But the specific point you're raising, the specialness in the report contract for the TENNU, I think that will ease. Right. We

have a ton of supply. Listen, this is absolutely critical, and I want to point out that our true expert on as Irah Jersey, agrees with mis misra. Yeah, the idea that it will remedy itself. But it's sort of interesting if you look at the technic goes underpinning this. And I'm not going to get into it, but Japanese investors were selling a lot of those off the run treasuries, which raises a question not about the repo market pria, but in general, who's going to buy all of this

depth that's coming online. You said that every auction is going to be a stress point going forward. Real rates perhaps rising not because of inflation, expected expectations going up, not because of necessarily even growth, but just because sheer supply is outstripping demand. Where is the demand going to come to on the edges? If the FED is not coming in and picking up more. Right, So if we look at last year, US banks were very large bias their flush with reserves. They had the sl exemption, so

they actually had a capital exemption for buying treasuries. I hope that's extended. That that's supposed to run out of the end of March, so I think banks will step in at some point. Asset managers will step in. But this is why real rates will need to rise, because you have to attract people from other asset classes. I think the saddest thing about the treasury market is it's losing some of the head property. When equities fall, rates

don't fall. So if I'm looking for the best hedge, really it's hard for me to get too excited about the tenure at one fifty unless now you're at two percent and there's a lot more room for it to decline, which is one of the underpinnings for why we think rates will keep rising. The FED steps away. Really have to attract other buyers from other asset classes. Let's get everyone to turn the volume down. Libel just to found

a word on Liinebear, what's happen in prayer? Well, absolutely not not raise the Libel down because we just heard from the IBA a couple of hours ago that they are ending. So I think those of us, you know, in the five stages of grief, if you were in the denial stage, you've got to move out of that stage because we now have an end date, right, It's

like the death notice has been given. I mean, it's something some of us have been working on for years, but today was pretty monumental in the sense we know that Sterling Libel will end at the end of this year. En libelar ends at the end of this year. Dollar Libel will definitely end, but at the end of June. Emotional John, thank you mistress. It's a good library. Oh I s strategy Priam isra over cocktails can being a conversation to deadly silence with a conversation on live board.

She's right, it's a huge deal. She's right. 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.