Supply Shocks Hit Your Wallet, Investor & Consumer Sentiments Diverge, Expensive Suburbs

0:00Anastasia Amoroso: Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools. Plus, access online resources designed to help your business thrive. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company.

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1:14Peter Orszag: This is the Bloomberg Money Podcast. I'm Tom Keen with Scarlet Fu. Join us each week for a smart look at the forces shaping your financial life on personal finance, on retirement, and wealth management. We will explore how people are earning, investing, and building wealth. We are live Fridays at noon Eastern on Bloomberg Television. Subscribe to the podcast wherever you listen, and as always, on the Bloomberg Terminal and the Bloomberg Business App.

1:56Peter Orszag: Good noon, everyone. Bloomberg Money, personal finance, retirement, wealth management, touch of politics, 25 days to the midterm elections. I'm Tom Keene. Of course, Scarlett Foo leading the challenge here. And the thing, everything is overwhelmed on personal finance, retirement, and wealth management by consumer sentiment. That 44 statistic this morning speaks volumes about the tension in America.

2:19Anastasia Amoroso: People feel very lousy because no one likes high oil prices. No one likes high mortgage rates. And now people can do something about it when they go to the polls.

2:27Peter Orszag: And would you agree that when we're doing this every day and we're doing this every Friday at 12 noon, we're trying to move away from the elite discussion that we do every day on Bloomberg? Because more than half of America with that statistic of 44 is flat on our back.

2:41Anastasia Amoroso: Yes, but then you look at GDP numbers, which is an aggregate number, and it looks like everything's just fine. Corporate earnings, which are going to begin in earnest next week. Also, just fine. Actually, more than fine.

2:50Peter Orszag: Well, the mix here in October and a beautiful October it is in New York City. Again, we welcome all of you with important conversation. Peter Orszag will join us today. Of Lazard, of course, but his definitive work on American retirement over the arc of his career. Thrilled to have Dr. Orszag with us.

3:09Anastasia Amoroso: And later on in the hour, Anastasia Amoroso, chief investment strategist for Partner Group's Private Wealth and Retirement Business Unit, will be sitting down with us. We'll get her view on how the great bond sell-off resets the table for valuations in stocks.

3:21Peter Orszag: And she has been wonderful about the courage to stay in the market as well. Right now, I've got to stay in the market. I went to wait. I was in all cash. I haven't bought a first share yet. Triple leverage all cash funds doing well this week. I don't care about stocks. Some do. What's important here is the bull market statistic for Anastasia. 14.92 on a VIX is a wow statistic.

3:43Anastasia Amoroso: Yeah, and we're looking at a fourth straight year of double-digit gains right now. and also gains for the week in equities. Let's flip it up and show you what's happening with yields. The 10-year yield moving up, that's been a familiar sight. It touched a new multi-decade high of 5.36 % on Wednesday. Dollar up slightly and oil prices for WTI just below$92 a barrel.

4:03Peter Orszag: A roundtable this morning to get us started with good conversation. The Zeitgeist of a Friday. It's already been scarred because Gura inflicted upon us children photographs of flag football. We'll survive. David Gurra is with us from Bloomberg this weekend and really on top of the midterm debate as well. With us, Jessica Carl, author of Bloomberg Opinion Today. It's a huge summation of all that we're doing with Tim O 'Brien's shop at Bloomberg Opinion. And Max Chaffin is with us with Everybody's Business podcast. And I know, Scarlett, you really wound up about a Mac story here.

4:37Anastasia Amoroso: Yeah, absolutely. He's written about what's something called AI surveillance pricing, which is like dynamic pricing, but personalized based on who you are and what you've done before. Is that right? Yeah. This is the idea that as pricing algorithms get more and more sophisticated, we already have this to some extent with social media advertising, where you have a pair of shoes that follows you around the internet. There are groups, many of them left-leaning, many of them trying to kind of get populist rage going, warning about the potential for these same kinds of technologies to apply to things like at grocery stores.

5:13Anastasia Amoroso: So the idea, and this again is mostly theoretical at this point, but that you're walking through a grocery store and the price of a good will change based on other stuff you have in your shopping cart. So for instance, and this came up in the story I just wrote, Walmart has a patent that suggests that they would change the price of mayonnaise if you already had tuna fish in their car. Now, I should say Walmart responded to this by saying we are not changing the price of mayonnaise yet. This is just a patent. We're not doing this. They're committed to the, you know, the slogan, which is everyday low prices.

5:48Anastasia Amoroso: But it does sort of show you that there are at least some people within these companies that are thinking about this stuff. And we are seeing this in maybe less high profile examples. So the technology is there, but it may not be implemented at the moment. It feels like this is something that politicians would jump on, especially those who are running for election in November. Well, I can imagine that they would. Yeah.

6:11Peter Orszag: Even Republicans got to look at this. I mean, is it in place now? If Jessica Carroll books an airplane ticket and she comes back six hours later, do they jack up the price because they know she was there six hours ago?

6:23Anastasia Amoroso: The airplane one is one where it is not, it's pretty muddy. So the airlines say, no, we don't do that. Anyone who's bought an airline ticket, though, will see that the prices change very often. There are these kind of like one-off cases. In fact, one came up during a hearing in Congress. You brought up Republicans. Josh Hawley has been kind of ringing the bell on this. I think the issue is that they have so many different fare classes, you know, potentially dozens, even hundreds, where it starts to get very close to personal.

6:54Peter Orszag: My summary is I'm getting taken to the cleaners every time. The reason Jessica Carroll's here, she actually is good at social media, unlike the rest of it. Give us an update, as we talk to Max about this, about the new digital impact on Americans that aren't hipsters and into social. I mean, it permeates our society, doesn't it?

7:12Anastasia Amoroso: I think you hear a story like that, and that story about tuna fish in the cart with the mayonnaise, that would go viral. And that's kind of what's feeding into the negative consumer sentiment that you're seeing, even if it's not actually happening. I think people on social media, there's these rage bait stories that really are pushing politicians to sort of address these issues in a different way on social media. I think, yeah. Speaking of politicians trying to address this in a different way, President Trump has renamed artificial intelligence, AI, into super intelligence. And this focus on semantics is super interesting.

7:45Anastasia Amoroso: I know you've been writing about it in your newsletter. Yes, yesterday. He wanted to label everyone who still says AI as the enemy. And I was joking. My name is not Jessica. It's the enemy now. But yeah, I think when consumers see like, oh, he's focusing on the name of AI, when there's so much anger and pessimism directed at this technology, people are worried it's price gouging them. It's going to eliminate their jobs. So there's a lot of fear around this. And that label sort of just seems silly in the grand scheme of things.

8:13Peter Orszag: I don't buy for a minute AI matters in the election. David Guerrero, Bloomberg this weekend. You're on top of this. You're talking to Republicans and Democrats. Let's assume AI doesn't matter. What then does matter the first Tuesday of November?

8:25Anastasia Amoroso: Well, I think that it does matter. And so you're seeing in a lot of states and local levels referenda surrounding AI and the construction of data centers. You look at the debate that took place in Michigan last night. Both of the candidates, Republican, Democrat, came out against building more data centers at this moment. So it's a very tangible totem of what I think the electorate is seeing as representative of data centers right now. But it's affordability, as we've talked about week after week after week. Democrats have wisely seized on that as an issue that they want to keep talking about.

8:51Anastasia Amoroso: Republicans are quite fearful of the fact that they really don't have a good answer to it.

8:54Peter Orszag: I make it up as I go. You actually read the literature, Cook Political Report out today with a redo on the House in a lot of seats. I get it.

9:01Anastasia Amoroso: No, they've moved their forecast, 18 Democratic seats now in their list of what they think is going to happen with the House. Look, Democrats have to get to 218. They had to gain three seats to do that. What the Cook Political Report nonpartisan outfit is predicting now is something more like 224 or above. So really a kind of sea change here in the House. And if you look at them and Eurasia Group and Morgan Stanley, I think that there's this expectation the Senate is still going to be difficult for Democrats. But Democrats are making inroads on that side as well. When you talked about the surveillance pricing, this is something that certain people have jumped on.

9:35Anastasia Amoroso: And these are people who worked with Elizabeth Warren, the senator. Is this now a Democratic issue? I mean, there are Republicans, as David is kind of hinting at, there are Republicans who are trying to claim the mantle on AI and on affordability. I think the reason why the Democratic groups that I talk to see this as a good issue is because it hits two buckets. It hits AI. I'm upset about AI. There's a lot of money going in. There's a sense that maybe regular people are not benefiting from this, whatever you call it. And then there's affordability. And the kind of the thing for them that's appealing about this is this combines both.

10:09Anastasia Amoroso: This is AI skepticism and affordability. AI is not just this thing that might take away your job at some point in theory. it's also maybe driving your prices up, which whether or not it's happening in grocery stores is certainly happening from an inflation perspective. AI is driving inflation. It speaks to this notion, too, that you don't really know what's happening. I think you feel like AI is developing and going somewhere, but you don't have a grasp on what it can do and what it is doing, what it will do. And I think this is just another example that kind of confuses or renders apparent to the electorate, I don't have a handle on where this technology, which is so radically changing our lives, is headed.

10:40Anastasia Amoroso: And this is a common theme in all the opinion pieces that our Bloomberg opinion contributors write about, and you have to kind of synthesize. Yes. Yeah, there's so much uncertainty just in general with the economy and the AI. Like skepticism feeds into that. And I think you see it in spending on, like, I mean, just discretionary spending is staying in line. But I think you see people kind of becoming hesitant to spend on bigger things.

11:01Peter Orszag: Can you get rid of all the AI garbage on Twitter?

11:04Anastasia Amoroso: I would love to. I think if I did, I wouldn't be working here anymore. It's unusable.

11:08Peter Orszag: It's another wave of unusability on Twitter, on X or whatever, because they've got all this fictional stuff.

11:16Anastasia Amoroso: Is the triple leveraged all cash fund now available as an ETF?

11:19Peter Orszag: It is. We've talked about it. It's in registration. Belchunas is on the board. Eric Belchunas, our ETF guru. But the roadshow, the merch, it's going to be bow ties. The merch is going to be unbelievable. It's going to be four-ple leverage. We'll see how that goes.

11:36Anastasia Amoroso: Yeah, well, you can't do triple leverage right now, according to the SEC, unless it's a problem. I know, that's a problem.

11:41Peter Orszag: I said, Gensler, why'd you leave? He would have let me do it.

11:44Anastasia Amoroso: Yeah, Gensler would have let you do it. All right, thank you to all of our panelists here. David Gura, he is co-anchor of Bloomberg This Weekend. Jessica Carl, author of the Bloomberg Opinion Today newsletter. And Max Chafkin, Bloomberg Businessweek columnist and co-host of the Everybody's Business Podcast. I know, we're excited. Coming up on Bloomberg Money, Peter Orszag, Lazard's CEO and chairman. and of course he's behind some of the ideas that are critical to the 401k. This is Bloomberg Money.

12:10Peter Orszag: You're listening to Bloomberg Money. Stay with us with more to come after this.

12:17Anastasia Amoroso: With ChatGPT, you can do more than get answers. You can get things done. When you're running a business and looking to expand, you need a clear view of the landscape before making any decisions. ChatGPT can help you prepare. Connect your Google Drive, point to relevant files and reports, and ask Chat to research competitors, industry forecasts, and market signals. It can turn the findings into a strategic deck in your team's template that you can review before presenting to your leadership team. Growing a business is ambitious, and ChatGPT can help you do it with confidence. Get started at ChatGPT.com.

12:54Anastasia Amoroso: Most meeting note takers get the easy words right, and the important ones wrong. The client's name, the acronym, Whisperflow Notetaker is built to get the hard words right. It takes notes on any meeting platform, Zoom, Google Meet, Teams, even WhatsApp calls, keeps every meeting searchable and connects to Claude or Chat GPT so you can ask, what did we agree to last Tuesday? Free to try on Mac and Windows at whisperflow.ai. That's W-I-S-P-R flow dot AI.

13:28Peter Orszag: On a perfect Friday from New York City, Bloomberg Money, Tom Keen and Scarlett. I thought that was a spirited conversation. The heart of the matter is 25 days to the midterm. It will be seismic, to say the least.

13:39Anastasia Amoroso: Yeah, AI dominating everyone's thoughts and also rising prices. Can't get away from rising gas prices, rising mortgage rates, rising food prices.

13:48Peter Orszag: And the food prices to me is the emotion. In fact, it's one of the brilliances of our guests. Peter Orszag is with his chairman and chief executive officer of Lazard. that barely describes his contribution to modern retirement in America. Coming out of LSE a number of years ago, he wandered in and got a job, and he said, you know what? When we take a new job, we should automatically be in the 401k of the company. You would say, well, that's no big deal. At the time, it was absolutely seismic. He also looks at his economics as well as running the shop at Lazard. Here is a seismic essay from January this year.

14:27Peter Orszag: The risk of higher U.S. inflation in 2026. Research demonstrates that consumer perception of inflation is based on, here's the grocery part, the frequency of purchase of, say, eggs. Inflation rising above 4 % by the end of 2026 is plausible in a most likely scenario. You and Adam Posen nailed it. Where do we go from here?

14:51Anastasia Amoroso: Well, I think the important thing about that is not necessarily the kind of victory lap, but instead, why did we say that? And the reason we said that is we are living in a new supply side era where if you want to understand inflation today, you need to look at the supply shocks that happened a year or two ago. And the thought, in fact, I just read a piece of research suggesting, don't worry, the next few months you'll see a tailing off of inflation because these one-time effects will erode. okay but our other point is they're going to be continual new supply shocks so we're living in this era supply side era 2.0 in which you're going to be hit by these things on an ongoing basis and so treating them each as a one-off thing is a mistake our bloomberg money audience is hit by

15:35Peter Orszag: it each and every moment and wrapped around personal finance and retirement and and wealth management without getting into the mathiness does there need to be a new set of a higher interest rate, what the fancy people call a higher actuarial assumption. Are we shifting in our interest rate now?

15:53Anastasia Amoroso: I definitely think that the interest rate environment is different today than it was three or four years ago. It's unfortunate, by the way, that we didn't take advantage of that moment when we had extended moment, when we had low rates, to extend the maturity of treasuries, which is something that Bob Rubin and Joe Stiglitz and I had called for. Instead, we have been shortening maturity. That's too bad. But I think we are in a new era in which, frankly, the bond vigilantes are coming back. Oh, we could digress. I know. If we start talking about the bond market, we can go in a different direction.

16:24Anastasia Amoroso: Getting back to that inflation story that you were just talking about, is AI inflationary? I mean, there's the buildout, then there's the implementation, and then there's the application. And we haven't totally gotten to the mass application yet. Yeah. I think on AI, the buildout is massive, maybe 3%, 3.5 % of GDP investment, which is larger than railroads, highways, electrification by a significant margin, that's also putting upward pressure on interest rates. My own view is I think we need to separate the technology and the business model here. I'm a huge believer in the technology. I probably have 70 or 80 agents running as we speak.

17:01Anastasia Amoroso: I'm astonished by how rapidly things are progressing. But because so much of the investment is debt financed, I do think the risk of financial distress in this ecosystem is higher than people appreciate because when it's debt finance, if the token spend, instead of doing this, just does that, you've got a problem. If it were equity finance, it's a different thing. But because so much of it is debt finance and that token spend, you know, going from this to that could come from open weight, which we've already talked a lot about, but also from local compute. I think that's the part that people are not appreciating is the ability to run the models on an air-gapped computer based on local computer.

17:40Anastasia Amoroso: You're not drawing in the cloud.

17:41Peter Orszag: Can you do a family shout-out? Please. My brother's dead on in this local weight. He says you're 100 % right on local computing.

17:48Anastasia Amoroso: So there's so much we don't know yet about how AI is going to work and how it's going to affect the economy. One thing we do know is what Tom referenced, which was your work on the research that led to automatic enrollment in 401ks. Your view on the Trump accounts, which have now made clear that those kids under 18 will now be automatically enrolled in these Trump accounts. Is it a good thing? I think that part is a good thing. And the power of inertia and the power of defaults is very, we all know it from our own lives. If something's even a little difficult, often you don't do it. And that was the point about automatic enrollment into retirement savings plans.

18:24Anastasia Amoroso: And also, if you're going to set up something for kids, it's better to auto enroll them.

18:28Peter Orszag: I've got to get this done. I think a lot of people don't know Lazard. Your stewardship of Lazard here, the way you're out on social. Everywhere he goes, you have to run five miles with Peter Orzek. I mean, every city, it's ridiculous. That's one way to weed people out. Jack Lew is on. And, you know, Social Security is going to fall apart here. If I had to pick, you know, Republican, Democrat, whatever, to be on Jack Lew, you'd be on the short, short list for that. How close are we to Social Security failing after the presidential election of 28?

18:57Anastasia Amoroso: Both Social Security and Medicare have looming problems associated with their financing. They will have to be addressed. This is part of an overall fiscal imbalance of 6 % to 7 % of GDP. And history shows we don't deal with these problems until they're crises. The last Social Security reform did not occur until checks were literally not about to go out the door. That's the part of the Greenspan Commission that people missed from 1983. You need that forcing event to really focus people's attention. We don't have that forcing event yet. Peter, I wanted to talk to you about junior bankers because I know this is something you think about a lot.

19:31Anastasia Amoroso: For years, private equity was aggressively poaching junior bankers from the investment bank. Citigroup recently cut its investment banking program, analyst program, to two years from three years so that these junior bankers can advance faster. What does the environment look like at Lazard now? Are you responding in a similar way? We really, I'm thrilled by the talent we're able to attract to Lazard. I think the most exciting thing for junior bankers today is the opportunity to change the way that we work so that you have leaner deal teams. We're hiring more managing directors, so there will be more deal teams.

20:05Anastasia Amoroso: But on each deal team, a leaner deal team. I remember early in my career, the most exciting thing was to be able to assume more responsibility as rapidly as you can. And when you have larger deal teams, it's just a little bit stultifying. The technology will enable us to make the deal teams leaner and to have that upward trajectory and also cultivate and train the characteristics that we think are going to be particularly valuable in our business in the future. The abilities in gender trust, the in-person. The soft skills. The softer skills. There's a great book out called Messy Jobs, which goes through the things that are going to be valued versus less valued as AI develops.

20:47Anastasia Amoroso: A senior banker's role is definitely a messy job, and we want to be training people and cultivating the skills for that. And it's really an exciting moment.

20:55Peter Orszag: I will suggest Peter Orszag dodge the bullet of silly exhaustion in investment banking. How do you deal with the stereotype of the young kids exhausted?

21:05Anastasia Amoroso: This is, I think, a crucial moment for us to weed out all of that inefficiency sitting around at 2 a.m. for no reason. Thank you. I have always believed in working really hard, but when you're working really hard on things that are meaningful and that you're not just kind of wasting time, it's a much different experience than, you know, literally something that seems totally inefficient. There's a lot of opportunity to improve the process. There's a lot of opportunity to improve the process, but sometimes you have to go through the process to be able to know what to do. Totally. Are we depriving young people of that?

21:39Anastasia Amoroso: Well, that comes back to the training. I think there are lots of ways of trying to train people, give them the at-bats. But honestly, the 176th time that you're moving the boxes around on a PowerPoint slide, you're not learning that much. And so the question becomes, how can we train people? I'll give you an analogy, which is we have gotten very good at training airplane pilots, including through simulators and not just real life experiences. I think the new technology is opening up all sorts of opportunities for us to be able to, again, cultivate the skill sets that we think are valuable. and then make sure there are enough at-bats to give you the experience that you need to spot.

22:18Anastasia Amoroso: That seems off. We've got to push back on the AI on that output. All right. Good stuff, Peter. Thank you so much for joining us today. Great to be with you. Peter Orczak, chairman and CEO of Lazard. And I didn't have to jog with Peter Orczak. No five miles for you. A success. All right. Coming up, high earners are bucking the trend and not necessarily maxing out their 401ks. We're going to learn why they're rejecting this classic money advice. Plus, Anastasia Amoroso joins us as well. This is Bloomberg Money.

22:49Peter Orszag: You're listening to Bloomberg Money. Stay with us with more to come after this.

22:55Anastasia Amoroso: With ChatGPT, you can do more than get answers. You can get things done. When you're running a business and looking to expand, you need a clear view of the landscape before making any decisions. ChatGPT can help you prepare. Connect your Google Drive, point to relevant files and reports, and ask chat to research competitors, industry forecasts, and market signals. It can turn the findings into a strategic deck in your team's template that you can review before presenting to your leadership team. Growing a business is ambitious, and ChatGPT can help you do it with confidence. Get started at chatgpt.com.

23:32Anastasia Amoroso: Most meeting note takers get the easy words right, and the important ones wrong. The client's name, the acronym, Whisperflow Notetaker is built to get the hard words right. It takes notes on any meeting platform, Zoom, Google Meet, Teams, even WhatsApp calls, keeps every meeting searchable, and connects to Claude or Chat GPT so you can ask, what did we agree to last Tuesday? Free to try on Mac and Windows at whisperflow.ai. That's W-I-S-P-R flow dot A-I.

24:12Anastasia Amoroso: Bloomberg Money is our destination for personal finance. And one of the stories that caught our audience's attention this week is whether to maximize your contributions to 401ks, because some high earners are now questioning that strategy. Bloomberg's Sarah Foster has been reporting on the story, and she joins us now to discuss. And you talked to a 40-year-old who decided to cut her contribution down to 5 % from 20 % so she can still capture her full employer match, but she no longer wants to put that other amount into her 401k. She's redirecting it elsewhere. It's been months, I think, of writing stories about maxers.

24:47Anastasia Amoroso: I guess it's time that we write a story about anti-maxers. I spoke with one of these savers who told me that she's still saving and investing for her future. She's just not putting it in the 401k. She's looking at the Roth IRA, brokerages. She wants access to the funds earlier, and she wants more control over her investments. And if she were to put it in her 401k, she would be penalized if she took her money out early. So this is for people who want to work hard, save hard and retire early. It's it's one of those stories where I think, you know, finance has to kind of fit around your personal goals.

25:17Anastasia Amoroso: And so if you're someone who maybe wants to take on a little more risk or maybe retire early before those typical rules with the traditional 401k, that's when it probably makes sense to max out or not to not max out. but I think the big question now is a lot of retirement planners are a little bit worried about it.

25:36Peter Orszag: Also, I'm worried about it. The thing that's changed from Peter Orszag and his landmark work at Brookings years ago is I believe we're all living longer. Is that part of this equation that some 39-year-old actually understands that if there's a couple, say, the actuarial ability to get to 90 is pretty tangible?

25:54Anastasia Amoroso: That's actually a big concern for a lot of the retirement experts I spoke with. You know, it's not just the fact that the 401k was so successful as a wealth building tool because it was a set it and forget it method, but it was also successful for saving for retirement because people were unable to access the money. You know, even if you were tempted to spend it, you couldn't. And now this is a concern here if it is something that you have more access to sooner. So this 39-year-old, she's redirecting her money to where? To a health savings account to a brokerage account? A brokerage account and a Roth IRA.

26:28Anastasia Amoroso: And actually, she maxed out the Roth IRA this year, but now she plans to not max out that next year and instead fund most of the investments to the brokerage account because she is one of those people who wants to retire.

26:38Peter Orszag: Is there an assumption within retirement that you still, that you go to a lower tax bracket? So many people I've talked to say it's a fiction. You know, you retire and it's like, yay, lower tax bracket. No, oops.

26:48Anastasia Amoroso: The tax consideration is part of it too. I think, Even with the advent of Roth 401ks, it's not really kind of helping people think about it, especially if you were. The original incentive of the 401k was to take the tax break, lower your taxable income, pay it in retirement when hopefully you're in a lower tax bracket then. But I think as we've seen that tax rates are historically low, there is a lot more room to go up than down. That's a really good point. All right, Sarah, thank you so much. Sarah Foster, she writes for our Bloomberg Money Report.

27:17Peter Orszag: Is she on every week?

27:18Anastasia Amoroso: I think we do have her on contract. It's good.

27:21Peter Orszag: That's because the reporting is so damn good. Sarah, thank you so much. Joining us now, and this is really important for all of you who've missed the bull market, Anastasia Amoroso, Chief Investment Strategist Partners Group. Her ability along the way to say find courage and stay in the market has been a landmark as well. Are you still a bull?

27:41Anastasia Amoroso: I'm still a bull. I'm still a bull, Tom. I do allow for the possibility that the market will go down at some point. I do allow for that, of course. But look, it's been a phenomenal ride to be in the equity markets. And I just sort of refresh the longer-term data set. And look, over the last 15 years, the S &P averaged something like 11%, 12%. So it's been a phenomenal time to accumulate that personal wealth.

28:03Peter Orszag: Let's look at the money market, the money MMR right now. Excuse me. This is Anastasia Amoroso. So this should continue. Standard and Poor's expected. Ginormous quarter. Look for that next week, starting with J.P. Morgan. Standard and Poor's, 493. The rest of them still expect to deliver 18 % growth. Edyard Denny this afternoon said 12 % growth. Earnings revisions consistently positive. And here's the money, Anastasia, line. This should continue. That's the hope and prayer. Come on, at some point, it ends.

28:36Anastasia Amoroso: Well, it ends if the Fed tides the policy so much that it does slow the economy. It ends if the technology hope that we now all have for some reason that bubble burst. But I don't see either one of those things on the horizon, Tom. And I think the reason why I certainly continue to be a bull in to your end is I do think a lot of the fears that we had for the market are in the process of being resolved. We're in the process of being absorbed, digested, and that we can move on to the next thing. And what I'm talking about is, let's say, the price of oil. And yes, we're still hovering around$100 a barrel.

29:06Anastasia Amoroso: But the fact of the matter is a big chunk of the Middle East production is actually making its way out of the Middle East because of the rerouting and just reshaping of that region. So that's the first point. The second point is, yes, yields have risen quite significantly, but it's against the backdrop of really solid economic growth. And also they have risen to the point where it's attractive for investors. You know, it's attractive for investors. You don't see end user demand step back at the U.S. Treasury auctions. You actually see it strengthen. So I think 5.25 on a 10-year will generate investor appetite, which in and by itself can cap the level of yields from here on out.

29:42Anastasia Amoroso: Okay, so this great bond sell-off has revived the case for bonds. What does it mean for the valuations of equities? Look, of course, on the margin is going to dent the valuations of equities. And I would say we've actually seen that to some extent. So first of all, if you looked at the S &P beginning of this year, you were looking at a 23 times multiple. Today, it's a 19 times multiple. And I think part of the reason is we had to absorb the geopolitical uncertainty and also the race uncertainty. So that has reset. We've also seen that reset play out in private markets as well. But if that is happening against the backdrop of strong economic growth, that earnings growth, Tom, that I discussed, that is accelerating.

30:20Anastasia Amoroso: So that allows companies the freedom, the room to absorb those higher.

30:24Peter Orszag: This is a great conversation for the Haas. On Bloomberg Money, I want you to talk about the personal finance. I look at you, Anastasia, you come to America from Eastern Europe, you come over here, you're in New Mexico, you're not in some fancy school in New York City or name the city, you're in New Mexico. There's a huge body of America that's not participating in the conversation we're having here about earnings and future earnings, PEs and fancy ratios. Consumer sentiment out hours ago. It's terrible. How do we dovetail our investor prosperity into an America that feels flat on their back? I don't understand how those two meet.

31:03Anastasia Amoroso: I mean, it's such a huge disconnect right now. And look, everywhere you look, consumers do feel depressed about their personal finances. And I can understand why. Because everywhere you go, the average selling price is moving higher. And what I've sort of realized just traveling this week and just this year is that we're in an environment where consumer demand is actually quite strong. We feel like we're breaking even as consumers, but we're still doing okay. So the demand side of the equation is fine. But what's happened also is that we are capacity constrained, whether it's the travel industry, whether it's the leisure hospitality, whether it's the industrials industry.

31:37Anastasia Amoroso: So as a result, corporations have pricing power. They're using that pricing power, which is why we're seeing those record earnings. So the bottom line, Tom, it is not a phenomenal time to be a consumer. It's sort of an okay or maybe a bad time to be a consumer. But it's actually a phenomenal time, a very solid time to be an investor, because if you can invest in the companies that are solving those capacity bottlenecks and they're delivering record earnings in the meantime, that's the way to, I think, even out the playing field and to have those consumers become investors. Anastasia, I'm Bloomberg Money.

32:10Anastasia Amoroso: We like to ask our guests how you are investing, how you've changed your approach to investing, given everything that's happening right now. What would surprise people about the way that you think about investing personally? Well, I don't know if that's surprising necessarily, but I do invest across all the various asset classes. You know, of course, you know, the core pillar of the portfolio still has to be that S &P exposure, the NASDAQ exposure, the AI trade that absolutely has to be a part of it. So you're in private assets too? Of course, yeah, private assets. But I think, I don't think that would be surprising given that I do work for a private markets company.

32:41Anastasia Amoroso: But I do extend the universe from public to private. And I think of it as a continuum. So if you're going to invest in equities, make it public equities, but also make it private. If you're going to invest in fixed income, look, bonds are great. High grade is great. You know, treasuries are becoming greater. But at the same time, I'm quite, you know, attracted to private credit. And the fact is that you have that substantial yield that you can earn there.

33:05Peter Orszag: I want to bring up this chart. It is my Bill Gross chart. I used it first with William Gross many, many years ago. It is a 10-year yield back before anybody in this room besides me was born. It's the great moderation from the Volcker years down, and you see the surge up here in inflation and in yield that's been extraordinary. What do you say to the crew addicted to price up and the low yields that we had for five, six, seven years?

33:30Anastasia Amoroso: Well, that's not the future. That's what I would say to that. And look, bygone is the era of those lower yields and the term premium that has been suppressed. You know, if you dissect the move higher in the 10-year Treasury yield, some of it has to do with sticky inflation. Some of it has to do with robust growth, which is great. And some of it has to do with the fact that the bond market has more uncertainty about the trajectory of the budget deficit and just growth globally. So I think we have to get used to the fact, Tom, that the term premium is going to revert to the historical norms. And that means that the 10-year treasury is not going to be at 2%.

34:04Anastasia Amoroso: It is likely to hover around 5%.

34:07Peter Orszag: This has been wonderful. Anastasia Amoroso, thank you. And congratulations on the quality of her bull market calls along the way. She's consistent, yeah. I'm afraid. I'm afraid. No. Hold tight. Hold tight. Next earnings. Revenues will be there. Earnings will be there. Thank you so much.

34:23Anastasia Amoroso: Thanks so much.

34:24Peter Orszag: For coming in today. This is going to be fascinating. I love what you're going to talk about here, Scott.

34:29Anastasia Amoroso: Right. Because coming up, this discount of leaving New York City for the suburbs like New Jersey, Connecticut. Well, it's not what it used to be. We've got the details on that because you might be surprised if you decamped for New Jersey what you're paying for now, especially when you're sending kids to sports and summer camps and all that. This is Bloomberg Money.

34:49Peter Orszag: You're listening to Bloomberg Money. Stay with us with more to come after this.

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36:30Anastasia Amoroso: out. And Paulina, what's happening in New Jersey where costs are rising so much faster than even New York City? Yeah. So I think like from 2020, since 2021, during the pandemic, we saw housing costs increase, right? People could suddenly work from anywhere. They wanted to move to the suburbs, have a little bit more space under COVID-19 lockdowns. And we saw housing prices just expand. Then obviously everyone came back. Bosses were calling workers back to the office and everyone started moving closer along the Hudson River so they could commute back into the city. And since then, overall inflation has risen.

37:06Anastasia Amoroso: New York City has gotten a lot more expensive and people that might not have moved to the suburbs started to, in large part, and now child care costs are what's driving up the cost of raising a family in New Jersey. It used to be housing was cheaper in the suburbs and you got more bang for your buck there, but now that's starting to equalize a little bit too. Yeah, especially with interest rates where they're at. If you could probably find a rental that's comparable to the cost of your mortgage in New Jersey and you might be getting more space, but the cost you might be saving, you're spending on commuting back into the city and in the higher cost of childcare as well.

37:43Anastasia Amoroso: This chart, which looks complicated, but all you need to know is that the New Jersey suburbs are seeing much faster growth in prices than other places. I mean, most of that is New Jersey, Monmouth County, Hudson County, Passaic County. You don't go there. I can't see it. You can't see it. But you've been in Manhattan diehard this whole time.

38:01Peter Orszag: I've been in Manhattan diehard the whole time, but I have the luxury. I think this is hugely emotional nationwide. I'm going to go to your time at the University of Southern California and the basic idea of is LA any different? I don't think so. I think this is nationwide.

38:16Anastasia Amoroso: Yeah, I think we're definitely seeing it on a national level. I think families always kind of move to the exurbs or the suburbs to get more space and save a little bit. But because there's so many people doing that, it's not cheaper anymore.

38:27Peter Orszag: The bargain was public schools. Are you saying that you're reporting that the public school bargain is broken?

38:33Anastasia Amoroso: I don't know if it's the public school bargain, but in major cities like New York City, we are expanding our universal child care program. That really helps with those early costs of child care. And actually, child care in New York City is about like$5 ,000 cheaper than it is in New Jersey.

38:48Peter Orszag: This is something I'm blind on. I am blind to the immense challenge today in personal finance of child care. It's been a long time. I had a gift.

38:58Anastasia Amoroso: It was way cheaper when I was doing it. Well, it's been a long, long time. And not to mention the immigration crackdown means that the options for child care have gone down, have slimmed down considerably, too.

39:10Peter Orszag: Yeah, it's a huge thing. And what else are you working on besides? I mean, this is a huge theme you've got going here. What's the next story? Get out in front of it.

39:17Anastasia Amoroso: The next story? I mean, I think it's just thinking about, like, where do people go if they want to raise a family? It seems like there's not really anywhere to hide. Yeah. There's no escape hatch.

39:27Peter Orszag: And I don't mean to interrupt because we've got to move on. But this is critical because I've seen two, three, four articles this week on the staggering decline in birth rate in children. I mean, we're becoming like Italy.

39:39Anastasia Amoroso: People have pets rather than kids. Yeah. Pets are cheaper.

39:42Peter Orszag: We make light of that. It's a joke. But come on, from a societal standpoint.

39:46Anastasia Amoroso: Yeah, it's interesting because from the parents that I talk to, a lot of people wanted to have like one or two kids, but because they're not able to afford having kids until later in their life and then they're just trying to get their kids. It gets all pushed out. It gets pushed out. And then by the time they're ready to have their second kid. What are you talking about in my life? Let's move on. All right, let's move on. We talked about living in the suburbs. To live in the suburbs is to be a sports parent. And among sports parents, hockey parents are legendarily a unique breed. You can chalk it up to 6 a.m.

40:15Anastasia Amoroso: games every Saturday, hauling the equipment back and forth from the rink, driving to weekend tournaments in Massachusetts, only to realize that you left the gloves at home. So my book of the week that I'm reading is Pee Wee's Confessions of a Hockey Parent by Rich Cohen. It's his memoir that follows the interminable season of competitive youth hockey in Connecticut, which starts in September, goes through March. Then you've got tryouts, which you have to pay separately for in April. Rich Cohen recounts how he lived vicariously through his kids on ice performance. He rode the high of every breakaway, suffered the indignity of every penalty.

40:48Peter Orszag: I want to do this right now. Just in the last hour, Bloomberg News has reported. Rich Cohen, we are fortunate because he wrote one of the definitive books on the Chicago Bears. Yes, he did. And we've lost a giant here. Mike Ditka, I believe at 86 years old. I don't have that in front of me. But he formed what tough was for an entire generation.

41:07Anastasia Amoroso: Someone was just remarking that he looked he always looked angry. But I think that's just kind of his persona. He was, you know, I'm serious about what I do.

41:15Peter Orszag: Right. You know, we just do this as a side on Bloomberg Money. So many people affected by Mike Ditka in a good and wonderful way.

41:21Anastasia Amoroso: And of course, you know, memorialized in SNL as Da Bears.

41:26Peter Orszag: Yeah, absolutely. You know, my book here today, if we can jump onto this, on the suburbs as well, is a suburb that is long and gone. It was about a glass of vermouth at 10 a.m., and no one wrote about it like John Cheever. For those younger, this is 1954, two lifetimes ago, and no one wrote about the angst. If you loved Mad Men, the ethos of Mad Men came 100 % from the magnificent work of John Cheever.

41:57Anastasia Amoroso: Depressed people, beautiful, depressed people living in their homes in the suburbs.

42:00Peter Orszag: Well, you're describing me. Be careful here. The answer is there was an element of that tension, and maybe it was depression, but it was mostly the post-World War II struggle in the IGY 1957.

42:12Anastasia Amoroso: I was looking this up, and John Cheever lived in Scarborough on Hudson, which is between Briarcliff Manor and Austin, and Austin was the home of the fictional Betty and Don Creeper in Mad Men. And at one point, he rented a house that was previously occupied by Richard Yates, who, of course, wrote Revolutionary Road, which itself was a big thing about soul-sucking suburbs that got turned into it.

42:32Peter Orszag: And what's magical about this is it folds right back to Bloomberg money and personal finance. we perceive now, and I would go with this, it just was easier then to be average or be above average. And now with the budgets and the bills. Yeah, it's crazy hard. It's way different than the time of John Cheever.

42:50Anastasia Amoroso: The competitiveness has just gone out the window. All right. Paulina, thank you so much for joining us. Paulina Cacero, Bloomberg Money Reporter. And for the latest reviews and recommendations from Bloomberg, subscribe to the On Books newsletter.

43:06Peter Orszag: Bloomberg money. I mean, it's as simple as this. I have a new iPhone. It's boring. It's got a boring case. Randall is rocking. That's like a Jalen Brunson look. I love it. I mean, it's just rocking the look.

43:19Anastasia Amoroso: This is the phone from last year, but I appreciate the compliment on my face. Randall always comes in and surprises us. We want to talk to you about Jalen Brunson and the Knicks. But before we get to that, flag football, because David Gura was saying his 13-year-old daughter plays flag football. And that is something that we've seen a lot of, this growth in flag football. that the NFL is very much behind. Yeah, the NFL has invested$192 million alongside a multitude of partners with the goal of creating a pro men and women's flag football league. And a lot of that has gone to the grassroots level as well.

43:50Anastasia Amoroso: And so it's no surprise that I think some younger women are choosing flag football over a sport like soccer or softball, even volleyball, because the gateway to entry is a lot lower. And it's cheaper too. I mean, think about it. In regular football, you need the pads, you need the helmet, You need everything. In flag football, you need flags. You need maybe gloves and cleats.

44:09Peter Orszag: Excuse me, you need a glass, of course, 3-2 beer in your left hand. At least that's what it was when we were doing it.

44:16Anastasia Amoroso: I mean, it's interesting the perception of flag football has changed. When I was playing, I'd be like, oh, we're not playing flag. It's for lesser men, I'd say. But now I think the NFL is leaning into it because if you think about the other leagues that exist, the NWSL, the WNBA, those sports are booming. The valuations are growing. And so what we're going to find out is can the NFL build an infrastructure, not necessarily with their own league, but at the grassroots level, high school, and eventually college for this to be a booming business. Okay. Let's talk about the NBA and Jalen Brunson. Mrs.

44:47Anastasia Amoroso: Keene calls him my Jalen. People are getting excited about the first game of the season where the Knicks will play the 76ers and Tom's been scanning the prices.

44:56Peter Orszag: $33 ,000 down close. What? Two tickets. So you said$32 ,000? $33 ,000 down close. $33 ,000. 76ers? It doesn't surprise me. This is nirvana. This opening Knicks 76. I mean, it's this experience thing in sports now. Jalen Brunson

45:10Anastasia Amoroso: versus LeBron James. And everyone else. But it doesn't surprise me. There was some drama behind the tickets a couple weeks ago with season ticket holders. And a lot of people were saying these prices are too high. The Knicks redid the process. $32 ,000 is a lot of money, so you might need to go a little higher. But generally speaking, this is Madison Square Garden we're talking about, and this is a world champion Knicks. James Dolan is not going to give you, myself, or Scar any sort of discount in that experience.

45:36Peter Orszag: I got eight other questions. We could go with him for a whole other hour.

45:39Anastasia Amoroso: I'm just grateful that I went to see the Knicks last year before they won, and I could actually buy the tickets back then.

45:44Peter Orszag: Are they distracted with their success? If you're doing SNL and all the rest of this stuff.

45:49Anastasia Amoroso: No, I actually don't think the players are, but I do think that James Dolan not paying some of these players is going to inevitably self-destruct the team if he's trying to make everyone take the Jalen Brunson pay cut. Ooh. I think that could happen. There's the tension for this year. Yeah, absolutely. I mean, the Knicks just put out a statement today that said they're calling off contract negotiations.

46:10Peter Orszag: Ten seconds. Cleveland or White Sox? Ooh, I'll go White Sox because I can't go outside of Chicago.

46:14Anastasia Amoroso: I stopped watching because the Yankees are out. Randall Williams, thank you so much, your senior business of sports reporter. That does it for Bloomberg Money this week. From Tom and me, have a great weekend.

46:31Peter Orszag: This is the Bloomberg Money Podcast, bringing you a smart look at the forces shaping your financial life. I'm Tom Keen with Scarlet Fu. You can watch the show live on Bloomberg TV every Friday at noon Wall Street time. Subscribe to the podcast on Apple, Spotify, or wherever you listen. and as always on the Bloomberg Terminal and the Bloomberg Business App.

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