00:00I think it's no surprise what we're seeing in the market here, Tom and Paul, right?
00:04I mean, what we saw yesterday was a sign of desperation, a plea to please, please, please
00:14get yields down because midterm elections are coming very soon. And, you know, it's not going
00:20to work. It's not going to work any better than all the other gimmicks that this Treasury
00:24Department has marched out. We saw, you know, the adjustment to capital requirements with
00:30banks. We saw the the move on stable coins to try and bolster demand for our Treasury
00:37securities. We saw the symbolic help in the yen intervention previously. And each one
00:44of these things is what it buys you an afternoon. Like, let's be realistic. This is a 30 trillion
00:50dollar market. And former hedge fund manager Scott Bessent should know better. You're
00:57not going to you're not going to move this market in adorable, in adorable way with these
01:02little gimmicks. That's all there is to it. Jonathan, Secretary Bessent, I think we have
01:08to assume knows all this. Why do you think the Treasury came out and did this yesterday?
01:14I mean, he has to do something right. I don't want to venture too far in into the realm of
01:21imagination. But, you know, you can you can imagine a conversation between between the
01:27president and the Treasury secretary where where the former is saying, do something, Scott,
01:33do something. And and this is the sort of thing that that you get, because the fact of the matter
01:39is there really isn't anything that you can do, first and foremost, and we heard Mary
01:45Daly talking about this. This is a global phenomenon, right? We have a sea change going
01:50on over in Japan. You know, Japan is dealing with real inflation for the first first time
01:56in a quarter century. You know, look at what's look at the move on yields over over there.
02:02It's a lot more dramatic, actually, than what we've seen in U.S. 30 years recently.
02:07And then there are a list of things that this administration could be doing, like, you know,
02:11maybe something about our six percent deficits, but they don't seem too interested in that.
02:16So this is what you get. What is your study of how this clears on a high? Folks, this is
02:23a bit
02:24of Friedrich Hayek from LSE over to Chicago. Help me here, John Levin, with how we clear given
02:31this stress. Is it controlled, where people can still invest, or do you look more cataclysmic?
02:40No, I don't think it's cataclysmic, but I think all of the momentum, the tide is moving toward a
02:48slightly higher interest rate world. And again, it's global. You know, we see banks around the world
02:56moving past the Zerp era here, pulling back that support that central bank balance sheets have
03:05provided for really the past quarter century. And so something is changing meaningfully. And,
03:12you know, again, this is a politically sensitive time. Scott Besant wants to be seen doing something
03:19about it, but he can't change it unless he's willing to do something about these deficits.
03:25And by the way, maybe something about these inflation pressures, tariffs, and, you know,
03:31these geopolitical entanglements are definitely not helping.
03:36So, Jonathan, how do you think this action yesterday by the Treasury will impact Fed Chairman
03:44Warsh next week when he makes comments at Jackson Hole? Well, you know what? It's so interesting
03:49because one of the things that Chairman Warsh has said is that he wants to extract more signal from
03:55the markets. He wants to speak less so that he can see what the market really thinks about the
04:03situation and then take that information on board over at the FOMC. Okay, John, I got to go.
04:08I got to run, but to your observation and Paul's good question, did Secretary Besant give us forward
04:15guidance yesterday? Absolutely.
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