JPMorgan Trading Desk Warns Fed Rate Cut Risks Tanking Stocks

Summary

Bloomberg Businessweek Podcast Summary

Episode: JPMorgan Trading Desk Warns Fed Rate Cut Risks Tanking Stocks
Date: September 8, 2025
Hosts: Carol Massar, Tim Stenovec
Location: Live from Future Proof, Huntington Beach

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Overview

This episode of Bloomberg Businessweek dives into the economic risks and opportunities confronting markets as the Federal Reserve weighs interest rate cuts. With insights from leading strategists, portfolio managers, and business leaders, the episode covers market sentiment, Fed policy debates, global investment themes, the evolution of wealth management, and the integration of private assets and new technology into the investment landscape.

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Key Discussion Points & Insights

1. The Federal Reserve Rate Cut Debate

Guests: Lauren Goodwin (New York Life Investments), Priya Misra (JPMorgan)

• Market Sentiment at Future Proof:

  • The investment community at Future Proof was described as “optimistic” regarding the possibility of a 25 basis point Fed rate cut.
  • There's debate on whether an “insurance cut” is warranted given labor market data and inflation tracks.

• Lauren Goodwin on the Path Forward:

  • Predicts a 25 basis point cut, “and to be honest, I think it’s the right call. There’s just enough evidence to the downside on the labor market.” (02:59)
  • Doubtful about a consistent, aggressive cutting cycle, emphasizing the need for data dependency:

    “It could be one and done for a while...we have to be data dependent on this” (05:10)

  • On Fed credibility and market confidence:

    “If the Fed moves too quickly we lose that confidence... I just really don’t see an aggressive cutting cycle when financial conditions are so easy.” (06:51)

• Priya Misra on Tariffs, Inflation & Neutral Rates:

  • Sees the current environment as consistent with a "soft landing" scenario. (23:54)
  • Tariff-induced inflation not as severe as feared—companies are absorbing some tariff costs, consumers remain price sensitive.
  • On the necessity of rate cuts despite not having a crisis:

    “The restrictive level of interest rates matter...interest sensitive sectors like housing are in a weak spot.” (27:21)

  • Labor market softness, especially for younger workers, is a concern:

    “It’s not pretty out there... there’s a demand aspect and so I think the Fed is looking at that and saying ‘well, let’s reduce some of that restrictiveness.’” (28:53)

• On Immigration and Structure:

  • Importance of immigration for both labor supply and demand; a crackdown could impact growth and neutral rates.

    “If immigration is heading low... then I would argue maybe that neutral rate is low.” (31:34)

Timestamps:

• Fed rate cut debate: 02:26–07:10, 23:20–33:51
• Inflation and tariffs: 25:06–26:49
• Labor market and data reliability: 27:11–30:31
• Immigration and macro implications: 30:39–32:51

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2. Trends in Wealth Management and Retirement Planning

Guest: Jamie Madira (BlackRock)

• Outsourcing and Partnerships:

  • Citi is outsourcing its wealth unit’s asset management to BlackRock—a trend Maddira says is just beginning:

    “There will be more firms coming who are going to come to BlackRock and ask for this type of partnership.” (14:37)

• Adviser and Investor Priorities:

  • Top issues for high-net-worth clients: tax management and access to private markets.

    “Taxes is the... top of mind for high net worth, ultra high net worth investors because... there’s actually a pretty significant implication on their portfolios” (16:10)

• Private Assets in Retirement Plans:

  • BlackRock working to integrate private assets into target date retirement funds—projecting up to 15% more assets for savers over 40 years if private assets are included (19:14–20:19)
  • Survey: 24% of retirement plans considering adding private assets in the next year. (18:24)

• Guaranteed Retirement Income:

  • Rising demand: 86% of workplace savers want guaranteed income; 100% of employers feel responsible for this (20:42)

    “Employers used to have pension plans… now we’re seeing the pensionization of defined contribution.” (21:09)

  • Only 27% of retirees confident they’ll have enough to last through retirement (22:11)
  • Societal implications if guaranteed income and retirement innovation lag.

Timestamps:

• Citi and BlackRock partnership: 13:25–14:57
• Private markets and innovation: 17:21–20:19
• Guaranteed income / Retirement survey: 20:42–22:44

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3. The Changing Global Investment Landscape

Guest: Lauren Goodwin

• A Redrawn Global Map:
  • A move away from US dominance towards multi-polar economic cycles; US investors may need to diversify more internationally (07:10–09:40)

    “We now have diverging economic cycles in addition to some of these geopolitical and trade related trends... you can access not just different currencies or regions, but different sectors in a way that I think is really interesting.”

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4. Industry Trends: Future Proof Conference & Industry Culture

Guest: Matt Middleton (Founder, CEO, Future Proof)

• Cultural Shift in Finance:

  • More diversity, breaking with traditional conformity, and embracing broader cultural relevance in the industry (37:11–38:15)
  • Family inclusion, experience-focused design, and a cap to ensure meaningful connections (~5,000 attendees).

• AI as a Transformative Theme:

  • AI is now on the radar as the industry prepares for changes in investment strategies, operational models, and client engagement.

    “AI being the biggest narrative in this... It’s a rewiring of our entire industry and it’s going to be a new operating model for wealth management.” (42:25)

Timestamps:

• Industry culture: 36:25–39:36
• Event strategy and sponsorships: 39:36–41:57
• AI and optimism: 42:25–43:25

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Notable Quotes & Memorable Moments

• “You would so much rather do 25 basis points and then not move for six or nine months.”
  — Lauren Goodwin on the case for an insurance rate cut (05:10)

• “None of us should want 150 basis points of cuts in this economy.”
  — Lauren Goodwin on excessive rate cutting and Fed credibility (06:10)

• “Passing on price increases entirely runs the risk of consumers stopping buying or reducing the amount they’re buying.”
  — Priya Misra on why tariffs haven’t resulted in runaway inflation (25:06)

• “For so long people have thought about the 60-40 portfolio... I think the new portfolio, the portfolio of the future, has to incorporate private assets.”
  — Jamie Madira, BlackRock (20:19)

• “Longer lives should be a blessing; they shouldn’t be a challenge. And that’s where guaranteed income comes in.”
  — Jamie Madira on supporting retirees (22:18)

• “It’s about time in the market, not timing the market, and that’s something that we believe very strongly.”
  — Jamie Madira on the long-term approach in uncertain environments (15:52)

• “It’s mostly about the experience here and people connecting... the industry is better when we all connect versus siloing out.”
  — Matt Middleton, on the purpose of Future Proof (37:51)

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Summary Table of Timestamps for Key Segments

| Segment | Start | End | |-----------------------------|---------|---------| | Fed policy & market views | 02:26 | 07:10 | | Global economic cycles | 07:10 | 09:40 | | Wealth management trends | 13:25 | 22:44 | | JPMorgan on rates/markets | 23:20 | 33:51 | | Industry/AI/Future Proof | 36:25 | 43:25 |

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Takeaways for Listeners

This episode offers a snapshot of high-level thinking among economists, strategists, and industry leaders as uncertainty persists around Fed rate cuts, the resilience of labor markets, inflationary risks, and the evolving landscape of wealth management. Innovations in retirement planning, wealth advising, and the marketplace’s broader cultural and technological evolution are also spotlighted, making this a valuable listen for anyone interested in the intersection of macroeconomics, investing strategy, and industry transformation.

Transcript

[Lauren Goodwin]

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[Bloomberg Businessweek Daily Host]

Bloomberg audio studios podcasts radio news this is bloomberg business week daily reporting from the magazine that helps global leaders stay ahead with insight on the people companies and trends shaping today's complex economy plus global business finance and tech news as it happens the bloomberg business week daily podcast podcast with carol massar and tim stanweck on bloomberg radio this.

Is bloomberg business week live at future proof in huntington beach today's show is sponsored by vaneck celebrating seventy years of helping investors stay ahead in a world that never stands still all right i.

[Lauren Goodwin]

Want to get to our guest because you love a guest who's bopping to the music our lead in music lauren goodwin is with us it's been a while she's economist and chief market strategist at new york life investments though very much well known to the bloomberg audience she's here with us at future proof.

How are you i am so energized being here i'll say one of the biggest questions we've been discussing on the desk lately is like you know you're a week away from a twenty five basis point fed cut and that's a minor reduction in the cost of capital but does it foster sort of the confidence that you would need to see to get the m and a market back moving etcetera and sitting in sunny california with a bunch of registered investment advisors and the answer would be yes yes yes it's an optimistic crowd twenty.

[Bloomberg Businessweek Daily Host]

Five basis points is that what you.

[Lauren Goodwin]

Think yeah that is what i think and to be honest i think i think it's the right call i think is what they'll do but i think it's the right call there's you know just enough evidence to the downside on the labor market that i think an insurance cut in every way is probably a good idea but fifty basis points i mean look i don't think that we would necessarily get the market expecting like oh that's the reason why then you have a blowout in inflation expectations or whatever the case may be but i'd be worried enough about that not to try and mess with it so.

[Bloomberg Businessweek Daily Host]

Then what's the path into the rest of the year and into early next.

[Lauren Goodwin]

Year so i don't know i don't know i do i would say where.

We are the honesty i was going.

To say thank you for saying yeah exactly i will say that like if we if our view is outside of consensus in any way it's that i am actually not convinced that will have a consistent cutting cycle from here i think it would be fantastic for the market for housing and for in some sense is the real economy for m and a etcetera but i look at yes the inflation risk and i think we might have a mod little bit of an upside surprise on thursday i don't think that'll derail the fed next week but really what i'm thinking a lot about lately is the the upside risk to wages so in the labor market part of the attention that the labor market's gotten lately is powell sort of saying hey we were actually quite focused on this in terms of our reaction function the sort of reduction in demand the cracks we're seeing but there's a reduction in labor market supply as well and so i think we might have several months maybe even a couple of quarters where there's just not a lot of job creation but wage growth stays exactly where it is maybe even moves higher and that's just a mix of risks where i think you know if financial conditions stay loose they're so loose right now equity valuations are high bond market valuations are high like there's not a lot of evidence that you need aggressive cutting yet well that's what.

I was going to say why do we need to cut rates.

I am a little i am i am just concerned enough about what we've seen from the jobs reports lately where again i think an insurance cut and i am really thinking about it as an insurance like i think you would so much rather do twenty five basis points and then not move for six or nine.

Months so it could be one and.

Done for a while it could it could and that's why i say and that's why i say like i honestly don't know it is so boring but absolutely true to say that we have to be data dependent on this i think the the there's people are so used to uncertainty after the last few months that they're saying like tariffs don't matter it's one off and the labor market you know i just don't think we anyone can actually feel confident about.

[Bloomberg Businessweek Daily Host]

Those things can people feel confident about the independence of the fed hmm for.

[Lauren Goodwin]

Now the market is telling us yes.

[Bloomberg Businessweek Daily Host]

And talk with barry ritholtz about this in a few minutes because i'm a little confused about why the market is.

[Lauren Goodwin]

So confident so as we know the fed's credibility in fighting inflation is probably its most important policy tool and i think what the market is seeing when it looks at this environment is interference in who the personnel on the fed might be but a trust that those people are serious that the people who are taking these seats though you know perhaps have a different political leaning or what have you like understand how fed policy impacts the markets enough to take it seriously that's the market's read and that is so important it's so important because i think what investors and it's it's so interesting to me because the most sophisticated institutional investor will look me in the eyes and tell me you know well when there's change in personnel and we have one hundred fifty basis points of cuts none of us should want that none of us should want that in this economy because you could very easily see an environment where the policy rate is moving lower and the and long rates are moving substantially higher in that circumstance if the market says wait a second that doesn't make sense i think we have just enough data right now to thread that needle to say okay look twenty five basis points that makes sense etcetera if the fed moves too quickly we lose that confidence and so it's another reason why i just really don't see an aggressive cutting cycle again when financial conditions are so.

Easy i think that's a really incredible point i also you know you are you've got a master's degree in international economics from johns hopkins and i was looking at some of the notes that you shared with our producer ari you know you are thinking about the future state trends and one of them is the redrawing of the global map how would you describe that global map today.

So a couple of things i think are really important about this the first is that when i talk about redrawing the global map i'm not really talking about trade although i think trade policy is a is an accelerant of the trend we have seen over the last at least ten years some build of policy change in the us and elsewhere such as competition over the technology supply chain but an acceleration of that because covid made us all realize that actually having access to vaccines and computer chips and a couple of other things is like really important right and so there's been this understanding that the us led sort of singular economy is changing the us will continue to be incredibly important in this new regime but that new regime includes more players and in a way that is getting a little bit trickier to access so if you think about you know one way that this idea manifests is like oh well does that mean you should add international equity and in the for a us investor they've been underweight international equity for fifteen years and with good reason but now it's not only like you know your day to day political risk trade that people think about that you would you would want to diversify but it's also you know the last six months is a perfect example europe has been much more consistent in their interest rate cutting cycle and they've been investing in defense and so we've seen financials industrials all of the sectors that have their ebbs and flows in the us just consistently outperforming like that's a type of diversification and sort of cycle adjust does that.

Continue and you think that continues i.

Think that i think that the pace of outperformance on the international trade for the next six months i think that that pace slows substantially relative to what we've seen but the reality is that at the last ten years you've had a global economic cycle that is dominated by the us and we now have diverging economic cycles in addition to some of these geopolitical and trade related trends that mean you can access not just different currencies or regions of the world but different sectors in a way that i think is is really interesting come.

Back we want to continue this conversation we'll find things for catch up in new york we hope lauren goodwin economist chief market strategist at new york life investments here at future probably going to.

[Bloomberg Businessweek Daily Host]

Stay here are we going back to.

[Lauren Goodwin]

New york oh we forgot to tell the team back in new york yeah we're not coming home no we're coming.

[Bloomberg Businessweek Daily Host]

Home stay with us more from bloomberg businessweek daily coming up after this.

[Lauren Goodwin]

Pinpointing the genetic changes that predispose us to disease identifying the roots of mental illness treating congenital anomalies even before birth at boston children's hospital we're investing in children's health today to ensure the well being of adults tomorrow as home to the world's largest pediatric research enterprise and more than two hundred sixty specialty programs boston children is where the world comes for answers learn more at bostonchildrens dot org.

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[Bloomberg Businessweek Daily Host]

You'Re listening to the bloomberg business week daily podcast catch us live weekday afternoons from two to five eastern listen on apple car play and android auto with the bloomberg business app or watch us live on youtube all right we want.

[Lauren Goodwin]

To get back to some of our guests here at future proof first of all i want to just kind of set up this because there's a big trend that's picking up some momentum and this is as big us banks are increasingly partnering with asset managers big asset managers just last week bloomberg reporting out that citi group is entrusting blackrock with tens of billions of dollars of clients investments in a move that will close the bank's only remaining in house asset manager really outsource more of its wealth units offerings in a new partnership blackrock will manage the assets of thousands of the bank's wealthiest clients who currently have accounts with citi investment management our next guest is involved with all of this and so much more and they have a new retirement survey out joining us is jamie madira she was named head of us wealth advisory in july her job includes heading up retirement at blackrocket is the world's largest asset manager they had a i think twelve point five trillion dollars record amount in assets that was according to the latest quarterly update.

[Jamie Madira]

How are you i'm great i mean we're at the future festival like it doesn't get better than this this is.

[Lauren Goodwin]

Beautiful it's pretty amazing right to talk about like kind of what's going on in the markets against this backdrop i want to ask you though about the news last week you were definitely quoted in one of the bloomberg stories it was exclusive you said this is a sector defining moment how come well you.

[Jamie Madira]

Know the thing that i find so interesting about the wealth market is that as firms are getting larger right as wealth management firms as banks they're getting larger and they're looking to really lean in on what they do best which is serving their clients expanding their relationships with their clients and as they do that they need to work with partners partners who can be their outsource provider who can take on the investment management who can build custom solutions for them and so this is just one example of a very large global bank asking blackrock selecting blackrock to be their outsourced provider but we're seeing this every single day from financial advisors all around the country they're looking to work with firms like blackrock so that we can customize solutions for them and take on the investment management so they can do what they do best serve their clients expand.

[Lauren Goodwin]

Their so this is just the beginning.

[Jamie Madira]

Of a lot of the beginning i.

[Bloomberg Businessweek Daily Host]

Was so much i was just going to ask should should we should investors expect more of these partnerships to be.

[Jamie Madira]

Announced absolutely absolutely and by the way today blackrock has over thirty thousand financial advisors just in the us who are already relying on us to be their outsourced provider then you enter a firm like citi a massive global bank there will be more for more firms coming who are going to come to blackrock and ask for this type of partnership.

[Lauren Goodwin]

So you guys see a lot how would you describe the investment environment we were reminded we just talked to matt middleton who puts on this event and said last year it was all about the upcoming us election they they've happened right we have a president who's very active on things that really impact the investment environment how would you describe the.

[Jamie Madira]

Environment today look i think a lot of people with reason of course have uncertainty around economics uncertainty around tariffs uncertainty around everything and what that means for their portfolio what i find most positive and exciting is the fact of all of these people who are thinking about what does this mean to my savings what does this mean to my ability to retire what does this mean to my ability to send my children to school well they're working with professionals like financial advisors like so many of the advisors that are here and the job of the advisor is to help them navigate that uncertainty and help them focus on the long term right it's about time in the market not timing the market and that's something that we believe.

[Bloomberg Businessweek Daily Host]

Very strongly what are the questions that they're asking right now especially the wealthier clients what what do they want to know what do they want to invest in what opportunities opportunities do they want.

[Jamie Madira]

You to provide yeah there's there's two massive things one is taxes help me better manage my taxes i can control for that i can't control markets help me better manage so funny that you.

[Lauren Goodwin]

Say that i feel like all of a sudden we've noticed too i think in conversations that it's yes about returns but it is about tax tax advantages yes exactly exactly tax alpha so go.

[Jamie Madira]

Go ahead but but but you're right that is the that is top of mind for high net worth ultra high net worth investors because one they can control it too there's actually a pretty significant implication on their portfolios when you think about taxes and so it's exactly why a few years ago blackrock acquired a company called appirio appreio was a direct indexing company a platform that had best in class capabilities to help end investors customize portfolios right single security portfolios maybe for their values their beliefs most importantly their taxes taxes and today that's one of our largest growing platforms a period direct indexing also spider rock where you can do custom overlay custom options overlay think about that apple executive that worked at apple for for years and years and years and has all of this apple stock that's emotional for them they want to hold on to that there's a lot of tax implications in that but at the same time they can hedge against that they can run options on top of that and that.

[Bloomberg Businessweek Daily Host]

Is top of mind okay so taxes is one thing what's the other one private markets yeah i knew you were.

[Jamie Madira]

Going to say of course you did private markets every headline what part of.

[Bloomberg Businessweek Daily Host]

That specifically when you when you think of alternatives when you think of private.

[Jamie Madira]

Markets where yes so let me take a step back and say one of the things we believe very very very strongly at blackrock is our job is to help make it easier for investors to access the full power of the capital markets now previously capital markets meant public markets we know the opportunities that exist beyond the public markets in the realm of private companies and so it's why last year we acquired prequen from a data perspective we inquired gipsy because we feel so strongly quinn being i.

[Lauren Goodwin]

Know for those of us in the journalism world i mean that's where we go in terms of data on the.

[Jamie Madira]

Private markets every slide every chart you see source preqine and it is really the only source of truth on private markets and so if we if we have that in addition to all of these capabilities that help us build products that allow people to more efficiently access the private markets then we can better serve our clients in the wealth market not just institutions any longer and also.

[Lauren Goodwin]

In retirement we're talking with jamie madeira managing director head of us wealth advisory and head of retirement at blackrock here at future proof in huntington beach we reported too that i think larry fink your ceo has talked about your cfo about offering target date retirement funds that include private assets next year i mean it meshes kind of with a survey that you guys put out today that talks about twenty four percent of retirement plans are considering adding all the assets over the next year private equity credit and other investments is that still on track give us can you give us.

[Jamie Madira]

An update yeah absolutely so yes it is still on track look i think there's been a lot of headlines from a lot of different firms about people coming to market with ideas of how to incorporate private markets safely right because.

[Lauren Goodwin]

We have to remind everybody they're not as liquid as a lot of investments that normally your retirement funds go into.

[Jamie Madira]

Yeah there are many considerations that plan sponsors and investors need to think about to make sure it's right for them our view is that if we can do this thoughtfully strategically integrating private markets private assets into a target date fund alongside of public markets and manage that glide path so it's appropriate for people at different stages of their life then we can actually deliver them fifteen percent more returns over a forty year or fifteen percent more retirement assets say over a forty year time horizon that's a long time and that's a lot more a lot more retirement savings and so we believe strongly in that we are on track we actually are already in market as well in the smaller and mid cent mid sized retirement space so we partnered with a company called great gray and we're powering their glide path so that they can incorporate public and private markets and into one target date.

[Bloomberg Businessweek Daily Host]

Solution when we think about target date solutions now what we know and what we've experienced is the asset allocation between equities and fixed income do we get to a point where that's not even a choice anymore it's like equities fixed income and privates it's interesting i think.

[Jamie Madira]

For so long people have thought about the sixty forty portfolio equities fixed income some people may bees bold we are to say fifty thirty twenty that twenty percent might be ten percent private equity ten percent private credit different diversified assets in there but absolutely i think the new portfolio the portfolio of the future to fund these longer lives has to incorporate private assets you know one of.

[Lauren Goodwin]

The things out of your survey that i thought was really interesting interesting was guaranteed income is now a top priority eighty six percent of workplace savers want it for the first time one hundred percent of employees employers say they feel responsible for helping participants generate income in retirement i keep thinking about my father who had a pension and va benefits and investments and not a lot of people are doing pensions right or anything anymore and so i am curious about how employers are thinking about this that.

[Jamie Madira]

Struck me yeah so it's so interesting because you raised such a good point so employers used to have pension plans right and then the conversion to defined contribution well we're now seeing pensionization of defined contribution think about private assets have been available in pensions for decades well now they'll be available in four hundred one k plans retirement plans same thing with guaranteed income that's what the benefit of a pension was but there's no flexibility around that so blackrock has created a solution it's a target date fund solution it's called life path paycheck and what it does is it actually delivers you the option the choice to have guaranteed guaranteed income you can choose to take that or not but it's giving savers and employers the option to have their employees have more security have more simplicity have more confidence in their retirement income one of the things i'll just add is that i found so interesting in our survey when you look at retirees twenty seven percent of retirees only twenty seven percent are confident in their ability to live through retirement on their.

[Lauren Goodwin]

Savings well that's discouraging discouraging well so.

[Bloomberg Businessweek Daily Host]

So what's the implication of that just in the last minute that we have with you because that has implications beyond our own portfolios that has real societal.

[Jamie Madira]

Implications it has societal implications in that there is going to be this whole group of americans who are trying to live through retirement maybe they do another job maybe they spend differently that shouldn't be the case longer lives should be a blessing they shouldn't be a challenge and that's where guaranteed income comes in that's where the modernization of four one uk plans to include private assets comes in and that's where more advice comes in which is why we are here at future proof festival advisors play a massive role in this all right you're.

[Lauren Goodwin]

Going to be part of a panel a bit later on today that's all about the state investment management where we're headed next there's a lot of things i know that you guys are going to roll into that jamie thank you so much thank you it was great being here it's great having you managing director head of us wealth advisory and head of retirement at blackrock joining us here at futureproof this is the bloomberg.

[Bloomberg Businessweek Daily Host]

Businessweek daily podcast listen live each weekday starting at two pm eastern on apple carplay and android auto with the bloomberg business app you can also listen live on amazon alexa from our flagship new york station just say alexa play bloomberg eleven thirty treasury is seeing some mild.

[Lauren Goodwin]

Gains today two year yields remaining at the lowest since twenty twenty to the us yield curve further to steepen should the fed unleash aggressive interest rate cuts that coming from double line capital's bill campbell there's a lot of conversation and narrative around what the fed's going to do and the impact let's see what priya misra has to say she's core plus bond etf portfolio manager over at jp morgan joining us here at future proof good to have you here just a little bit of stuff going on curious how you are looking at the path of rates of the us economy what's what you're thinking around this thanks.

[Priya Misra]

For having me you're right there's a lot going on if you think about everything thing we've had to deal with this year you know tariffs fed independence the deficit it's just and then you look at equities at the highs and now bonds doing well so what's going on so our view is everything's actually consistent with a soft landing what i actually think equity people call soft landing and bond people just lovely yeah the growth in the one to two percent range inflation's a problem it's not a two percent but it's not as high as people feared when we first heard tariffs so it's allowing the fed to start to cut rates and then you've had this slowdown in the labor market i think the hope is it stops right here there's low fire low higher we don't quite make it to the high fire world that the fed can cut just enough in terms of time as well as how much they cut to get the economy to stay in the soft landing mode i think that's.

[Bloomberg Businessweek Daily Host]

The hope why are you so confident that the tariff induced inflation that we've seen has not been as prominent as people initially thought it would be we just had barry rudolph on he said hey a lot of people did pull a lot of people pulled forward a lot of companies pulled forward so the tariffs hadn't hit him yet right and.

[Priya Misra]

So i think that is the risk scenario but i'll get to your question why have so it hasn't happened yet now again we're looking at the at the future and maybe it can happen because i was using inventory and now when i'm paying more as a company i can pass it on here's the issue companies are realizing that consumers are cost conscious and passing on price increases entirely runs the risk of consumers stopping buying or reducing the amount that they're buying so i think that's why companies might be taking some of the tariffs in their margins margins are high so they can afford to take some of the cost in the margin some of it the currencies work some of it may be the foreign producer is taking some of that hit so i think that through the value chain is being absorbed at different spots but the other part is look at the rest of inflation so maybe goods inflation does pick up because companies have to pass on at least some of it and governor waller thinks about half of it will be passed some people argue one third some part is going to be look at i mean the us consumer basket is really seventy five percent services so we're looking at service inflation wages rent inflation x rent core services that it's not coming down but it's not going back up in fact wages we're seeing signs that wages are starting to slow down so our thought is even if you get the goods related price increases services will likely offset it and that's why chair powell something he said in jackson hole which i thought was the first time i've heard it in a while that it was could be short lived meaning that they can look through any tariff related increases now it has to be tariff related so let's see we get a cpi report later this week our view is services is going to not be as troublesome goods might look troublesome but they can put it down as one off it sounds like.

[Lauren Goodwin]

If things aren't so bad in terms of inflationary pressures and if you as you kind of laid out in terms of the jobs report maybe it was just that one month you know that we're not going to continue to see losses why do we need to cut rates is it just i keep hearing i should say keep but the idea of an insurance cut just in case is that what this is all about.

[Priya Misra]

So i think the starting point is where i focus on the starting point we're in restrictive territory if we were at neutral level even though financial conditions.

[Lauren Goodwin]

Are really loose like you yeah but.

[Priya Misra]

Interest sensitive sectors look at housing look at consumer durable so sectors of the economy that are sort of levered to interest rates are in a weak spot so that's why that restrictive level of interest rates matter and if the fed's.

[Lauren Goodwin]

Not the fed mandate right like i think about when i think about interest rates to help the housing market all i can think about is the financial crisis and i realize there are a lot of things going on at that point priya but i do wonder is that what the fed needs to be.

[Priya Misra]

Concerned about so i think they've got other tools for for it whether it's regulation or making sure that you know banks are not lending to remember the ninja loans back then the knowing job right or assets that was what the a was right and people were getting loans so i think there's other ways to ensure that there's not excesses but when you look at the one tool that they have interest rates we're in restrictive territory inflation slowly heading down which is impressive given the extent of tariffs average effective tariff fifth is fifteen percent and yet inflation's not accelerating and the job market is slowing i think why chip powell was a little maybe hesitant in july was wasn't sure is it demand or supply and it's both factors that impacting the labour market but there's clear evidence i think that the demand side is there demand is slowing you're seeing it in college age you know the unemployment rate for young people you're seeing it in hiring that was that.

[Bloomberg Businessweek Daily Host]

Was pretty you talk on friday we talked about that the numbers that we got for young people i mean anybody can speak anecdotally about this who has young graduates from college or young people in their household it's not pretty out.

[Priya Misra]

There it's and that's why it's hard to put that on immigration there's absolutely an immigration impact on on the labor market but not when you look at the young people who are not getting jobs straight out of college so i think there's a demand aspect now is it ai is it tariffs is it uncertainty hard to disentangle what's driving it but there is a demand aspect and so i think the fed is looking at that and saying well let's reduce some of that restrictiveness i think talk of fifty basis points cut next week might that might be a little aggressive because i think that is in case you see signs that layoffs have really picked up we do have an initial claims report one report that really spikes i think we can talk back about fifty they don't have to get aggressive but to start that process and remain.

[Jamie Madira]

Data dependent what do you think the.

[Lauren Goodwin]

Revisions on the labor data tomorrow i mean we've been so focused on that what do you think that's going to.

[Priya Misra]

Show it's going to be between eight hundred thousand and a million so it's going to be a big number down.

[Jamie Madira]

I don't think it should be a.

[Priya Misra]

Big surprise the labor market was the outperformer when we looked at everything else so i think the fact that these revisions will actually bring the labor market in line with gdp in line with with consumer spending and so you know and is it i don't think it's political i think it's just data collection has been an issue really since the pandemic and globally you look at response rates globally it's something we should all think about how do we get more accurate data and i think this is maybe revisions is the way to do.

[Lauren Goodwin]

It well mike mckee was talking about this and he says you know people are responding they're just it's the responses are slower and so that the revisions finally take all that in to account so how do we get people to respond more quickly right so that the data is more relevant in a timely.

[Priya Misra]

Manner yeah maybe you're supposed to spend more money figure out some modern way of asking people technology maybe hey speaking.

[Bloomberg Businessweek Daily Host]

Of that i'm curious about the immigration side of things and the way you're looking at immigration from your perspective as somebody who invests in fixed income recommends fixed income and thinks about strategy because we're seeing a real crackdown obviously here in the us and that has implications for labor to market also has implications for demand augustus arrival who writes for our economy team had this really interesting piece out over the weekend about hispanic consumers hitting the brakes as us firms warn of a pullback so now we're starting to hear us firms talk about this segment of the population spending less as a result of an immigration crackdown how are you looking at that yeah.

[Priya Misra]

It was a great article i read it and it sort of hit a nerve because a lot has been talked about immigration and impact on the labor market what about immigration and growth it's a source of demand housing consumption in general and this idea that our star so i'm going to take it down to i'm a bond pm so i.

[Lauren Goodwin]

Live in the area we love this.

[Priya Misra]

But what is neutral interest rate and there's been this argument that actually neutral rate is maybe it's three and a half maybe it's four you know you didn't ask me but there are people who tell me we're at neutral stock markets high we're at neutral fed doesn't need to cut rates and then i say look at the interest sensitive sectors that are all kind of frozen slowing so so it's it is restrictive but what is that neutral rate i think immigration was a big part of why that neutral rate has gone up like in you know twenty ten to two thousand eight to twenty twenty we argued the neutral rate was two two and a half now people are saying maybe it's three three and a half how much of that is immigration and so if immigration is heading low and this is a structural trend then i would argue maybe that neutral rate is low and so where should the ten year be in equilibrium three and a half to four seems fine in a recession it's going well below three and a half but we're not pricing in a recession so i don't see a disconnect between bonds and stocks they're both or spreads for that matter they're all telling you and all okay economy fed cutting just enough and hopefully we just stay here but if things slow down more well then the fed's going to cut a lot more than that ten years getting much lower so i bring it to whether it's consumption or the labor market that immigration impacts that neutral rate.

[Lauren Goodwin]

Low priya just got about thirty forty seconds here so you add all this up there's your macro what does it mean for investors in the fixed income world where should they be allocating assets.

[Priya Misra]

So fixed income should give you income and diversification it's giving you both right now in income in real terms the ten years giving you two percent real rates thirty years giving you even more so i would say own fixed income for yield and then you have to go out the curve diversification is where that curve comes in you need a little bit of duration i don't know anybody who's long the tenure well i know myself we're long a little bit of the ten year a lot of people are nervous about the deficit the deficit is better today because of tariff revenues so i think it's priced in you're getting paid to extend take a little bit of credit risk on some duration the economy is okay so you can look at fixed income for that income and if you've got what role does fixed income play in a portfolio if you've got risk assets you want to hedge those risk assets own a little bit of five ten year duration don't have to go further out but that's where you'll get that diversification benefit.

[Lauren Goodwin]

All right great stuff and so tell me priya thank you so much always appreciate time with priya misra she's core plus bond etf portfolio manager over at jp morgan joining us here at future.

[Bloomberg Businessweek Daily Host]

Stay with us more from bloomberg businessweek daily coming up after this.

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[Bloomberg Businessweek Daily Host]

You'Re listening to the bloomberg businessweek daily podcast catch us live weekday afternoons from two to five eastern listen on apple carplay and android auto with the bloomberg business app or watch us live on youtube all right.

[Lauren Goodwin]

There'S so much going on behind us five stages six football fields worth of boardwalk five thousand plus attendees financial advisors wealth management execs limited partners about one hundred sessions featuring over two hundred speakers there's a lot going on and it represents about twenty trillion dollars in assets under management so this is why it's a great place to be behind it all the reason we are here the reason this exists is matt middleton he is with us founder and ceo at future proof joining us here on site i should point out former growth strategy director at informa co creator of the financial advisor conference well stack and recently along with a partner acquired a majority stake in etf dot com so you got a lot going on here yeah you are busy tell us about how you think about the financial space and what advisors today really need yeah so.

[Matt Middleton]

I think it's it's two parts right we all grew up my personal experience into the into the industry was conformity right it's you know talk this way walk this way dress like this act that way if you want to get in that room this is where you have to be and really what we're representing here is a shift right it's a it's a mindset shift it's a generational shift and what we're seeing is that people with real buying power real influence and assets want to actually break up of the status quo and this is a represent a representation of that new industry which is not just casual attire obviously we're here on i know.

[Lauren Goodwin]

We feel a little dressed up here.

[Bloomberg Businessweek Daily Host]

Said earlier i'm the only one here wearing a suit i know that's first timer that's why you can tell who.

[Matt Middleton]

The first timers are yeah but but it is it's mostly about the experience here and people connecting and the industry is better when we all connect versus siloing out and so our hope is here is not just to define it as wealth management not to find it as asset management or fintech it's to bring everyone together from all job levels across all functions and given the tools that they have to meet a network to see how to build a better.

[Bloomberg Businessweek Daily Host]

Business one thing that i noticed about this conference that i've never seen before is for a small fee you can bring your partner meaning your husband your wife your boyfriend your girlfriend your significant other i've never seen that before what's.

[Matt Middleton]

The thinking behind this well personally obviously i'm an entrepreneur and you know i always laugh when i have these conversations everyone's like what's the vision what do you do this you know how do you manage it you just acquired this business and at the same day it's like my co founder is my wife right at the end of the day it's who you have at home the people that are on that journey with you that kind of wear all of that and so part of that view was one we're in this beautiful setting right it should feel like a destination and a vacation to some sorts but also it's allowed to you get your spouses to experience what the industry is like meet your clients meet your partners and again i think if they are more exposed to it they'll understand it more and that's a representation of what we're trying to do here which is if we could get this event to a large enough scale and get national attention with the help of you all well maybe some people on the you know the general public will start to look at and say oh what is this right they'll scroll through instagram and it's like oh i see coachella and my friends and this is very it's a cultural movement and then the next scroll they're scrolling and they're seeing future proof like oh this is great what is a wealth management conference this is interesting what is wealth management and we could expose them to more of it and so it's a little bit of one we want to make it family oriented and the other side of it is we want to change the narrative and the optics of our industry but.

[Lauren Goodwin]

Do you also think about i thought i read somewhere too that you want to kind of cap how many people are are here because we've certainly been to lots of conferences where it just feels like thousands and thousands and thousands of people and tons and tons of booths and it's almost overwhelming i'm not quite sure what the takeaway is yeah.

[Matt Middleton]

So it's two parts right one is yes that is true when you get a large crowd the word that always comes out is boondoggle right and you have no mission people get lost you're drinking from a fire hose we use proprietary event technology so breakthrough what you see this big ten here to allow people to connect in meaningful ways and the goal there is you go into the event so three weeks before the event you basically are making connections and guaranteeing certain meetings so you have one to one meetings you have roundtable discussions you have all these different booth activities these are all pre scheduled so it's not serendipity happen so you could create a large scale experience multi thousand person experience and create a unique agenda and a unique networking plan for one specific role or person and that's the benefit of what we do the second side to that is we do want to cap this because there's a there's a magic size here and we believe that's around five thousand people one we're in four hotels in huntington beach we have ten hotels in newport beach people staying in irvine there's people staying forty minutes away so at some point even if we can't control it their experience is going to be different than everyone here and so we decided that you know there's there's a limit to what we.

[Bloomberg Businessweek Daily Host]

Want to do here i did see this idea of you know growth and bringing people i did notice that pretty much everything is branded there are sponsors everywhere from a from the perspective of this as a business in terms of revenue is your biggest revenue source still tickets or is it sponsorships now it's.

[Matt Middleton]

It'S always sponsorships so how much bigger is that than tickets it's probably seventy thirty ratio we also monetize all these different connection points so again using the technology a lot of these meetings that you see there some are peer to peer others are buyer seller and so there's different ways to monetize events that we've kind of broken one it's a different format right two it's the technology allows us to do things differently than most other events but yeah the idea here is like events should be about the community and shouldn't just treat the attendees as product which is unfortunately how it typically happens when you have these booths and everyone's trying to pitch and wheel and so you see people that you see a lot of the big brands you see at other events but they're showing up differently here and it's meaningful they get better roi and the attendees have better experiences so been doing.

[Lauren Goodwin]

This a few years post pandemic i remember last year matt that such a big theme was the us the upcoming us elections well they've come and gone we've got a president in the white house that definitely markets and investors are focusing on we are certainly because what he says and what he does certainly impacts the investment environment what is top of mind for the folks as you are moving around talking to folks and are people more optimistic this year than they were last year any any takeaway.

[Matt Middleton]

So far i think people are one i think people are optimistic but i also think people are not sure of what the future is and that's for a whole host of reasons like i being the biggest narrative in this this.

[Lauren Goodwin]

Year which is a big theme right.

[Matt Middleton]

Of course it's a big big event and you could look at it from all different sides right from an investment side right you have to understand what is going to be affected into the future right not just what it is today but what is ai going to do and not just to tech companies what is it going to do to various different sectors right the other side is the operational side the industry side right it's a rewiring of our entire industry and it's going to be a new operating model for wealth management specifically and most people here are trying to figure that out right most rias which are a large majority of the audience here they're small business operators right and so at the board level they're having these discussions right how how much do we need to invest in how do we understand how do we use it what's our you know our audience going to look like into the future are we going to serve clients directly right right there's so many different questions and the truth is even the experts today no one knows because it's changing so rapidly every six months it's a new.

[Lauren Goodwin]

Shift yeah and at the same time so much money is being invested to the infrastructure build out and just overall matt thank you so much absolutely thanks for inviting us for the really appreciate it matt middleton he's the founder and ceo of future proof joining us here in huntington beach this is the bloomberg.

[Bloomberg Businessweek Daily Host]

Business week daily podcast available on apple spotify and anywhere else you get your podcasts listen live weekday afternoons from two to five pm eastern on bloomberg dot com the iheartradio app tune in and the bloomberg business app you can also watch us live every weekday on youtube and always on the bloomberg terminal.

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