Surveillance: Stimulus Talks With Kudlow

Larry Cudlow, National Economic Council Director. Larry, let's start right there downside surprise on the payrolls report. People we speak to in the last hour, the last ninety minutes will say the same thing. This makes it more likely to get a deal down in d C. Does it make it a difference to you, Larry? Well, look, I just want to say, I don't think this is such a bad jobs report. Okay, it may have come in a wee bid under expectations, but I don't know what that means.

Six point seven percent unemployment rate is big news. The CBO and others didn't expect single digits until early so we got the single digits the last couple of months. Six point seven and incidentally importantly to everybody, UH, if you look under the hood, the biggest drops in unemployment were in the minority groups African Americans, Hispanics, Asians, and let me adds not a minority group, it's a majority group.

Another big drop in unemployment came from women. That is not just people leaving the labor for us, I beg to differ. We also scored in the household survey. Private jobs were up nearly five hundred thousand. That's a strong number. And it's true we have ten million unemployed. I understand that there's still a lot of hardship left, no question. However, let's keep in mind that the peak of that number

is twenty three million. And when we look at the other statistics, and I'm sure you will want to know talk about that. Other statistics on retail sales and housing and capex UH are very strong. And Atlanta f GDP now is looking for Q four. That's their number, not ours. But I'm just saying I think the economy is very much in a V shape percovery. The P M I s were strong, the I S M s were strong. So let's put this in some perspective. The job numbers are not the only stat and six point seven cent

unemployment is awful good number. So Larry, you and I could debate the state of the economy. I think what matters is how you read the economy, how the administration sees the economy, and what it means, how it put together a policy package. So Larry, talk to me about it. Where are you on stimulus talks right now? Well, I think what we've got, um, senter McConnell's talking to House Speaker Pelosi. Our team is of course in touch part

clearly with Senator McConnell and UH Republican House Leader Kevin McCarthy. UM, people are glad to see that the other team has come down in its numbers. On the other hand, there are still policy differences that remain. Um. I think Mitch McConnell sounds to me I've known him quite some time, a little more optimistic. But I can't say one way or other what the outcome is going to be. I don't want to dare predict that. I will add this point from our standpoint, and I think Santor McConell agrees

with this. We have for many many months. You and I've talked about it. Here, she'll argue for targeted assistance. Targeted assistance in a few key areas. One is the small businesses to resurrect the p p P. Two is unemployment assistance, because we're going to continue, as you have noted, we still have a lot of hardship in the unemployment area. That's tough stuff. Uh. School COVID related spending is good. Um, maybe certain industries have to be helped out. And I

will add to that. In terms of the figures that are flowing around, you've got roughly four hundred and fifty billion dollars available from unspent treasury funds and a hundred and thirty five billion dollars available from unspent PPP funds. Now in round numbers, i'm gonna call that six hundred billion plus or minus. It would be good to use that money, which has already been appropriated once, use it

to redeploy it um and reappropriate it. And in a sense, uh, in a sense, the bookkeeping is okay, you're not really adding above what the legislators suggested way back last winter and a little bit this summer. There's this a good way to do that around six I'm not going to get into a numbers game. That's up the Center McConnell, Speaker Pelosi. I'm just saying, get into a numbers game

right now. I'm just saying, there's a key targeted areas that could be funded by redeployed appropriations hundred and sixty billion. That's the State eight in the bipartisan plan. This has been a story for the last several months. Let's just get right down to it. That has been the red line for Senate Republicans. State eight. Have we moved the

dial on that story, Larry, I don't know. Senator O'Connell has indicated that he's not happy with that part of the bipartisan group or the Speaker Pelosi, he's not happy with it. I'm going to leave that those are his decisions. Um, he's never been happy with a big bail out of states and localities. A lot of these blue states are poorly managed pension funds and so forth. COVID related funding is um very popular. That's different though, than a broad based,

so huge omnibus appropriation to states and localities. I will leave that to Center McConnell. But I'm just saying, um, that's always been a difficult hurdle to get through. Well, you representing the administration this morning without lucky to have you with the President sign a bill that has a hundred and sixty billion dollars of state aided it. I wouldn't be able to say that. You'll have to ask him. I was with him last evening talking about the job

numbers and related matters. Um, the President is in favor of a new assistance package. Okay, he is in favor of that, but the details, the targeting that I discussed earlier is absolutely crucial. And as you know, Jonathan, the President has always opposed a large scale appropriation for state and local governments that he President Trump believes have been

mismanaged for many years. This idea that these states have been mismanaged, Larry, is that what this all comes down to a political debate about what you guys see as the mismanagement of state finances at a time when we're in a pandemic. We're seeing more restrictions in California, New York and by the way, in Republican states as well. Is this what it's going to come down to, Larry. I don't know that. I don't want to declare that I want to go back to targeted assistance, particularly small

businesses unemployment assistance. These are temporary measures. UM and COVID relations dealing matters can be each other. Larry. That doesn't sound the deal. That doesn't sound like a compromise, Jonathan. I'm not going to make a deal with you. I hope you understand that. I don't expect to. I don't expect to negotiate with me. But the two plans for just planet five hundreds of sixty, Larry, don't do that. Come on, let's finish on a good note. We've had

We've done really well for three or four years. My position not taught to each other like that. I'll give you the time, Jeff, just laying out the question. We've got two plans and nine intered eight billion dollar proposal and a five billion dollar proposal in the biparlisan proposal is a hundred and sixty billion dollars of state eight Larry. That's what it's going to come down. So we can either make a deal in the middle or we can and it doesn't sound like we can. Can you convince

the audience otherwise? I can only give you the facts, Okay, as I've laid them out, and as I've said, the president's view, the majority leader's view, Mrs McConnell, my view is certainly Steve Minution's view over a treasury as we UH have targeted areas of assistance that we think would strengthen the economy, and those include most particularly um p PP for small businesses which are in need dealing with COVID spikes that we expect even more in the Christmas

holiday season, and some unemployment assistance which also we would like to have again to get us through UH the COVID UH spikes and recovery elsewhere is pretty strong. Now let me add this point. Help is on the way. The vaccines will be distributed. Early distribution in a week or two. Okay, I was at Vice President Pence's COVID

task Force a week or two. They are expecting, these are the experts UH at least twenty million by the end of December, and at least another twenty million to get the forty million by January, on their way to one hundred million in March. Now that becomes awfully important, not only for the health and safety of Americans, but also it will help keep businesses open, which is our view, we do not want businesses closed, and it will help keep schools open, which is our view as President Trump's you,

we do not want school uh closed. So that is going to be an enormous boost. And we have to kind of lean through this period of the spiking COVID. We get that, that's what our experts are telling us. But help is on the way. And um, we have this massive program, Operation Warp Speed, which is panning out and then it's gonna be great boon for America. Is

gonna be great boon for the American economy. So coming back to the stimulus package, I'm gonna say again we see important targeted areas, most particularly I'll narrow it down to a couple, frankly, most particularly small businesses. The p p P program, which probably saved fifty million jobs. In fact, the temporary lawyoups. Now roughly two thirds of them have

gone back to work, which is terrific. Um. Secondly, some unemployment assistance because as I've acknowledged, despite much better than expected jobs numbers for the last seven months, there are still hardships that we need to help out on that. I would say those are the two biggest and perhaps COVID related assistance UM to schools. We want to keep the schools open. We want to keep the business open. We've got a strong economy and retail sales and housing

and capital goods and durable good sales. One of my favorite best indicators I've seen. I get a lot of material from the Wall Street friends. Uh Ed Hyman, one of the top economists, has a Christmas Tree survey. Christmas. He's a wonderful guy as a brilliant guy. He has his Christmas Tree survey. It's up twenty nine percent year over year. That's a good holiday spirit number. That tells me we are in fact in the v shape recovery. Larry, I gave you three full minutes then, so you and

I can finish on good terms. One final question, sir. We've gone back and forth together for three or four years, sometimes with a little bit of rough and tumble. We've always got our points across. Let me give the opportunity to do one final thing for your success. What's advice? Full of them? I've never met him. Um, I'm not gonna give him policy advice because I fear we have some significant disagreements. But we're in a honeymoon period of sorts. Look,

anyc director is a fabulous job. It's a great honor for me to have had that. It's a great honor for me to serve our country as well as this president. NBC is a very powerful UH Council. It gets involved in nearly every aspect of economic, life, of trade, life of national security matters. As sits on the National Security Council, it is involved across the board almost every conceivable thing in the NBC. It's a great job. I wish him luck, I do. I pray for him. I do um he

better be ready to work hard hours. But I'm sure he knows that he has served in government before. It's a terrific job, and I am blessed to have held that job for nearly three years. As I say, it's a high point in my professional career. And I've always thanked President Trump on that, and I thank everybody else for the opportunity to do this. I just loved the job, and we thank you for your contribution to this program. Larry Cudlo, Thank you, sir. I have a good Christmas

and we don't catch up. Larry Cudlo. They're the National Economic Council directed from the market. You want to us now, pre A misraa TV Securities global head of Rates Strategy, Preyer, the number in about one hour and twenty five minutes. Does it matter to you? It doesn't matter. I think I've been watching the momentum. Clearly that December number is going to matter more because that's when the COVID restrictions

should show up in the data. But our economists do have a much weaker number, and I think this market that's forward looking, that's pricing in the end of the you know, the light at the end of the tunney, if the tunnel is long, and you know, scary because we're heading into a period of weaker economic growth. I think the market, that at least the rates market, is not pricing in much of that weakness. The tenure is almost at one percent, so I think the market is

really pricing in this vaccine fuel recovery stimulus. Well, we may have to deal with a lower growth environment and the FED doing more, so I think you actually do get a reaction in the rates market if it's anything less than four hundred, three hundred thousand, and our economists of two hundred thousand, So we're actually going into this number long treasurees. Prea, I gotta make some money here. The kids wanted a twenty Christmas tree, so you know,

I get broke the bank yesterday. What I want to know, Prea, is do I step in here and buy fixed income by bonds, notes and bills because we've had a nice move in yield and now is the opportunity to look for lower yields later. I think so yes. I don't know if it's going to get you your your Christmas tree, but I think you have to buy a lot more treasuries just because the the extent of rate move I'm

looking for is like twenty base points. You know, do we get to seventy eight basis points on the tenure? So so there is a floor. We're just very low, you know, close to zero. But I do think we've sold off in treasuries pricing in all the good news out there. There is a key FED meeting coming up, and our views that they're going to make Quei state contingent and they're going to extend the average maturity of

QUIE purchases. They just kind of have to do it, the markets forcing them to do it, and they've realized that they could be longer term scarring. We still have so much uncertainty about the vaccine, So I think rates have sort of priced in too much of that good news, and we haven't quite priced in that we have a long way to go before that COVID recovery is is upon us. Built a little bit on this idea that the market is forcing the FED to extend the duration

of its purchases. I'm looking right now at a tenure zero point nine two six percent, not exactly screaming we're running away with higher yield that could potentially threaten financial conditions. Why do you think that they are forcing the Fed's hand? And what does bond what do boundary able to do if they do not confirm the market's expectation. So I'm going to say the FED is the only marginal buyer of treasuries right right now, particularly in the long end.

You know, the front end is so anchored by the FED because of their faith policy, because of just inflation being low, that if investors want to be in treasuries, they want to be in that front end. Meanwhile, the U S treasuries is showing a lot of long dated paper and that's really only happened in the last few months that they've you know, they've increased long end coupon sizes significantly. So the market right now is expecting the Fed to do something in December, which is why we're

at one percent. If that meeting happens with nothing, I think we're breaking through that one. You know, do are we the brink of a taper tantrum? And I think the Fed knows that, which is why we expect them to come in and sort of tell us that they're going to keep conditions accommodative. It's a wife from your remit, but I'm going to go there. Are we back to two thousand five and two thousands six of the silly season of parsing out every hundreds of a basis point

of investment grade, high yield leverage loan yield? I mean, are we back to the silliness of reaching out for yield? Yeah? I don't know if you call it silliness, but we are in a very serious reach for yield environment. And the question is that sometimes people don't understand the risk they're taking, but they're forced into different alternative assets. Um, yes, I think we're you know, I would suggest people should do credit work because defaultress is miss priced in certain products.

But in the investment grade sector where you're not worried about default risk and you're not worried about interest rates going higher, I think like anything is fair game in terms of how do I get that extra yield. And we're seeing it in people selling volatility at historic laws. People are selling ball, They're taking spread risk, they're taking

effects risk. So I think if interest rates are not going to give you that return, you're going to have to go into other products to get that written on. And you know that's the intended consequence of QUI. That's what the portfolio balance channel is. You take duration risk out, the central bank takes duration risk out and force investors into the risk spectrum, and the hope is that that translates somewhere into an economic recovery and then everything makes sense.

I mean, there's a big hope in there that you don't see this disconnect between the economy and markets. We all hope it makes sense. In the end, we spent ten years debating whether it made sense. A decade ago prayer, Thank you, TV Securities. I'm gonna put it on a terminal at nine strength in Chinese Yuan, that just racing since June, and we see that across the Pacific rim folding. All this in has been chatting in all of Morgan

Stanley Economics. The leadership of Allen Zetner, their chief US economists, has been extraordinary to try to figure out the ebbs and flows of g d P and how it folds into appending jobs report early in January of next year. Msentner joins us this morning, Ellen, by great definition, today's discussion today's jobs report really is a look back. What is the data you see now for the January report? What does December look like? Yeah, So as we rolled forward,

I think we continue to see job growth slow here. Um. I think we do still hang on to some net job gains because the economy isn't shut down broadly as we did earlier this year. Um, but certainly the amount of folks coming back to the labor market and absolutely in that service side of the economy, Um, it just has to slow further. I mean, it's going to be a difficult winter. We know this, We're married to this idea. We're all disappointed in what the winter is going to

look like. But these peril reports are getting overshadowed by positive news on the vaccine front and the fiscal headlines. Are we going to see services dison, inflations stay where it is with a slowdown in the service sector, or do we get back to normal inflation dynamics between services and goods. Well, that's those. So those are the two

biggest drivers of our inflation forecast for next year. I mean goods inflation has been driving the numbers this year because the good side of the economy that has been growing and driving output, that consumer demand for durable goods. But next year, as we roll into next year and activity starts to pick up, as we move further through getting the vaccine rolled out and activity picking up, that services side does come back. And that is the lion's

share of consumer demand. It's the lion share and what drives the price indusease. So goods prices decelerating, but services prices pick up. Services prices representing the bulk of the price induseries means inflation will be higher next year. Ellen. Everyone is saying that the economy will come back in and certainly that is in census, and it's easy to

see how that could be. The case, but the post pandemic economy will look quite different in terms of consolidation of companies being stronger and bigger at the top and the smaller companies that have gone out of business. What does that mean longer term for the labor market. Yeah, so you know, the small businesses are the driver of of job growth UM and part of the loss of wage bargaining power over time has been the rise of

mega companies and company density uh. And so that is something that when you add that to the other inequities that have been exposed further exposed by COVID On the household side, I think it's a heavy lift that the Democratic Party is going to focus on in terms of that fiscal policy activism that overall tries to raise the labor share of of profits UM and that is has been part of our longer run thesis on wise inflation

over the long run would be structurally higher. I think that's going to be the focus going forward, not just household inequities, but inequities on the business side as well. And we spend a lot of time on programs like this beating up on the south side, I have to say,

let's just take a moment to really talk about. One of the calls coming out of this crisis, and that was from you and the team that this recovery would be quick, This recovery would be sharp, it would look like a v And that was something we heard from politicians down in Washington. But many people just did not believe. This has been so underappreciated in the same way the equity market record highs are hated. And what did everyone get wrong? What do we learn from the lesson and

how do we apply it for the months still to come. Well, I think you know, from for me, there's a there's a story that's missing in that that V shape recovery. Um. And to me, it's you know, when you open up from nothing to something, it's a very big jumping activity. Uh. And this was not a cyclical downturn. This is very structural downturn. So the way the virus would play out away, vaccine development would play out the way the economy and

opens up. That's what's dictating that V shape in the economy. Where I am still greatly disappointed and where I think there's still a lot of heavy lifting to do is exactly what share Pal and the feather looking at as well. I'm looking at women's labor force participation rates, I'm looking at the unemployment rate of minority communities, of the unemployment rate of those that are concentrated in low wage paying

service sectors. That you're going to see longer term damage from this, and so I do think that there is a great need and focus on further fiscal support so that these longer term unemployed folks don't leave the labor market all together. Because if that's the case, then it doesn't matter that we've got a V shape recovery. It's going to matter that longer run potential growth has been advantage.

So this is important, Adam. The big call from Marcin Stanley was this V shaped recovery at the headline level. The complication you're talking about is the disparency beneath. Have we already done sufficient damage that it could take years, maybe even a decade to recover from what we've experienced that or can we actually do something about it? No?

I think we can do something about it. I mean, the the biggest way that that you can UH affect help those underlying UH components of the labor market is by running a tight labor market, meaning a hot economy, very easy monetary policy, accommodation, targeted fiscal policies right up front,

more as clearly needed. Uh, and we expect more to come. Um. But those kinds of things can get you as kind of a labor market, so as low of an unemployment rate as possible, as quickly as possible, And we do think by the end of with that kind of focus, we can push the unemployment rate down back down to around four percent, so getting close to the Fed's goal

of maximum employment. But without that, you know, I think the literature, there's a there's a broad body of literature that shows that if you have a sluggish recovery after a deep downturn, that you do see permanent scarring to the economy. So I can't stress enough that we need to be doing all of this upfront now in order to push the unemployment right down as quickly as possible and get those folks back reattached to the labor market

and re employed. Ellen, given the high flying stocks, given the fact that equity markets are at new highs again and again, does that complicate the urgency to try to get something done? As you say, on the fiscal side, in other words, is the high the high valuation of equities actually hampering the fundamental recovery of the economy. Uh. Well, the hampering the fundamental recovery, uh No, but hampering what

typically are drivers of Congress to act quickly. Yes. Uh. And you know there's there's nothing like good old market volatility and sell off and really bad data coming in to get Congress to act quickly. Uh. And we've just not been forced by that. We're trying to before looking here and call for fiscal you know, further fiscal support before we see broad swass of the labor market gets sent back home if the the virus tightens its grip

over the winter, uh, and we see further shutdowns. Um. But certainly, you know, if we got that negative payroll's print today, which we're not expecting. Um. But as John pointed out, there's a big spread and there are some expectations for a negative number, certainly that would impress urgency upon Congress to do something. I think the bizarre thing out of today's payroll print print is if it is a bad print, folks might take that as a good thing because it might push Congress to act. Ellen. I

want you to help your colleague Mike's Mike Wilson. I know he listens, he hangs on your every word. But I want you to play equity strategist right now because it is part of economics. Nance deck went a hundred off. The financial crisis trend is out three standard deviations. It's an exceptionally elegant chart and it shows the monetary and fiscal of the nation, which is driven equities. There's no

question about that. Do you just assume a mean mean reversion of equities within a five or ten year view? Is that just part of your playbook that you got to tell Mike Wilson about. Yeah, I don't think I give him advice on where equities will be. And as you know, when economists put on a strategist had it

can be pretty dangerous. Um. But he's gonna target on SMP at the end of next year, and I think where I think people are going to be surprised at how much economic activity we pick back up over the course of the year as we're rolling out the vaccine. I can tell you from just a personal experience, as soon as the efficacy rates of the vaccine began getting reported that we're so positive. Um, you try to pick any summer travel place and have it with a with

a with a healthy cancelation policy. Uh. And the two of the top three places we wanted to go to more already booked. People were booking that quickly. So I think we will be surprised at how quickly activity comes back, and I think investors are looking forward to that. That's a very yesterday, Ellen, thank you, and thank you for phenomenal guidance through much of this year. Allen Setta of

Morgan Stanley, thank you very much. Were on policy is John Farrell mentions a key topic with Mr Caudlow, Henrietta tres joins us. Henrietta is the ink drying on a stimulus bill right now? Are you that certain it can get done? I've actually I felt pretty great about it. Honestly. I know that's crazy talk after the last six months of inaction, but um, I don't think there's a question of whether or not we're going to get a bill anymore. I think it's what is the size and scope going

to be. So I am optimistic. I would say low and six that we get a bill done in the next two weeks. Okay, I'm looking right now. The tenure Yield believes your message. Right now, Yields breaking out, as John was pointing out earlier, almost now up to basis points as people price in the greater likelihood of some sort of fiscal support package passed in Washington on the

heels of this labor market report. Do you believe that Henrietta, that this was a bad enough report to push any of the laggards on the Capitol Hill into passing something. I really do. I had an interesting conversation with a client yesterday who is still sort of looking at stimulus is unnecessary and saying, you know, the market clearly doesn't need stimulus. And I think that's an outdated way of

thinking about how DC considers economic policy. This is an anomaly under the Trump administration that anyone cared about the stock market in Washington, d C. It's about the fundamental data. It's about the jobs data, it's about the unemployment NUBER, it'spect GDP data. It's slow moving, but it's exactly that. It's kind of print that makes members in d C say, oh right, I mean us their stantial amount of unemployed,

were massive increase in COVID. We're going into the holidays, We're not going to be here for another month and a half something now. Package expect it will be somewhere in the six billion dollar range. That includes three hundred billion dollars roughly in money that has already been allocated in previous iterations of stimulus, whether the Care's Act or the p p P program or the E s F

programs at the Fed and Treasury level. But there's gonna be somewhere in the range of about three hundred billion dollars in new funding that goes out just to extend the pandemic unemployment assistance. Where does McConnell stand, just Henriette, I'm wondering the key sticking points we've been talking about all morning and frankly for a couple of months now

is the funding to state and local governments. What's sort of the tipping point for McConnell to get on board with this nine eight billion dollar bipartisan agreement or something that still includes some aid to state and local governments. State and local is absolutely the sticking point, because you still have this divide mentality amongst Midwestern senator in the

red blue state divide. But I think if you can drill down and stop discussing just state and local broadly, but get into schools need this aid, specifically buses, rail transit, um subways. These programs are going to lay off ten thousand workers. They're slashing um their provided provisions by in d C, in New York, in Chicago, they are making

a lot of noise at the transit level. So I think if you can start talking about transit funding and specific segment, come on, Henrietta, Henrietta, I take issue with this after talking to Patrick Foyd, Washington hates transportation because they're Democrats in big cities. Is that going to change in the next forty eight hours? I think I think there's enough of a push, honestly to get you a small basket of funding for those sectors include air lines. By the way, um, there's you know, a long way

to go there. But I do think that fundamental unders and there is something that has shifted in the last couple of months. Yes, and it's a bit of disruption on your line, but we'll stick with it because this conversation is important. How important are the things that we're discussing right now to the January five runoffs in Georgia. I think that's a really critical question. Obviously. Um, it's

important because you need to. It's enough funding to keep Democrats at home and not enough to alienate your Republican base. So that package that I just walked through, roughly six hundred billion dollars or so in spending, does just that. It's no bail out. There's no three D six hundred dollars a week unemployment insurance booster at the federal level, no direct payment to individuals, none of that, you know, democratic socialist minded stuff that will get the Republican senators

in trouble Senators per New and Laffler. But it is also enough to provide aid to the Democrats or the members of the Georgia community who needed the most, mostly in that unemployment insurance aid, to get them to potentially stay home. This is going to be the largest turnout runoff in the state of Georgia. Per the electoral officials expectations.

The margins are exceedingly tight. UM. The latest data shows that as Up is up fifty to produce forty eight, whereas Warnock is up fifty two too lawful forty five UM in the polls and Georgia polls. For what it's worth,

we're pretty accurate in November. So, um, there needs to be a concerted effort to turn out the Republican base, which means the stimulus needs to be relatively small, but there needs to be enough to keep the Democrats home as well, which creates some concern around whether President Trump should or should not go to Georgia. UM or whether or not they should or should not passed even a minimal stimulus bill this cycle. I so I think they will.

I think that's threading the needle from McConnell's perspective, and that's what they'll get. This is not part of the conversation on Wall Street, Henrietta. It barely comes up. The outlooks for one hardly even include January five. There is just an assumption that we have a divided government down in Washington, d C. Do you think that's a mistake. Well, if we do see the Democrats pick up the next two seats in Georgia, there will be the definition of

divided in the is not a function majority. Um, We're gonna need to watch the teams at risks for flipping sides. That would be maybe Lisa Murkowski or Joe Mansion, a Democrat out of West Virginia. Um, you're gonna look at a sixty vote threshold for any legislation, regardless of what happens in Georgia. In my opinion, Um, that is what

President of Like Biden is signaling. He will make in State of the Union address about his inaugural speech about and concentrate on exclusively the coronavirus, on the need for stimulus, and that will occupy all of the first quarter at least until they get it. And then if there is a fifty seat Democratic uh you know, quote unquote majority, they'll try to pursue things like reconciliation instructions and get more funding. But you're not gonna see any more legislation pass.

So I encourage our clients to focus on things that can change at the regulatory level. And then of course trade policy US China, relations to US EU, relations to US Japan. That's the focus for the future. It's a conversation for another time, Henriet said, we always enjoy catching up with you. Thank you and read traice that Vati Potus, the director of Economic Policy, Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple podcasts. SoundCloud,

or whichever podcast platform you prefer. I'm on Twitter at Tom Keane before the podcast. You can always catch us worldwide. I'm Bloomberg Radio