# Warsh's Jackson Hole Debut; Harvard's Rogoff Says US Needs 'Shock' To Fix Debt

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 29 Aug 2026, 43 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/1b0c2805-9805-43e6-9662-b4ab0110f413/923657b3-4bb8-4ed3-a8a5-b4b40137142b/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Bloomberg Money takes the pulse of your financial life, powered by the reporting of our global newsroom. Today's guests: Kenneth Rogoff, Harvard Professor of Economics, and Nela Richardson, ADP Chief Economist & ESG Officer. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios.
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[0:12] Speaker 4: This is the Bloomberg Money Podcast. I'm Tom Keen with
[0:16] Speaker 4: Scarlett Fu. Join us each week for a smart look
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[0:55] Speaker 1: Good noon, everyone.
[0:57] Speaker 5: It is Friday, which means this is Bloomberg Money. We
[0:59] Speaker 5: cover personal finance, retirement and wealth management. I'm Scarlett Fu.
[1:03] Speaker 5: Tom Keene is out in Jackson Hole, Wyoming, where Federal
[1:05] Speaker 5: Reserve Chair Kevin Warsh delivered his first speech as a U.S.
[1:09] Speaker 1: Central banker.
[1:10] Speaker 5: So let's head straight out to Tom out in Wyoming. Tom,
[1:14] Speaker 5: I know you've been out there sitting in the cold
[1:16] Speaker 5: for a while. Did Warsh silence the critics and provide clarity?
[1:23] Speaker 6: A little bit.
[1:23] Speaker 4: The clear tone here is a more restrictive Fed. We'll
[1:26] Speaker 4: talk to Enda Kern about that. I have to say
[1:29] Speaker 4: that in terms of Bloomberg money, this is the land
[1:32] Speaker 4: of Bloomberg money, Scarlett. It's about personal finance, retirement, wealth management.
[1:37] Speaker 4: I'm the youngest person in Jackson Hall. Everybody else is
[1:40] Speaker 4: 80 years old and retired. So it's perfect for Bloomberg
[1:44] Speaker 4: money this morning. Coming up, Scarlett, Kenneth Rogoff, Harvard University.
[1:48] Speaker 3: All right.
[1:48] Speaker 5: Looking forward to that conversation. Also, later in the hour,
[1:51] Speaker 5: Neil Richardson, chief economist at ADP, will be here with
[1:54] Speaker 5: us to talk about Bloomberg Money's dual mandate, how we
[1:57] Speaker 5: make money and how we save and spend money. So first,
[2:00] Speaker 5: let's get a check on where things stand in the
[2:02] Speaker 5: markets and how markets have responded to that speech from
[2:05] Speaker 5: Kevin Warsh. We saw the short end of the bond
[2:07] Speaker 5: market react immediately, price down, yield up, up eight basis
[2:11] Speaker 5: points right now. This is the tenor most sensitive to
[2:14] Speaker 5: Fed policy, traders pricing at higher odds of a rate
[2:17] Speaker 5: hike in September. We saw the 10-year yield make some
[2:20] Speaker 5: big moves, but right now not doing a whole lot.
[2:22] Speaker 5: The dollar moving higher with short-term rates and oil prices
[2:26] Speaker 5: down about three-quarters of 1%. But here's the big mover
[2:29] Speaker 5: of the morning. You could see the two-year yield shooting
[2:32] Speaker 5: up after the text of Warsh's speech was released at
[2:34] Speaker 5: 10 a.m. ET, That was a 10 basis point move
[2:37] Speaker 5: from trough to peak. Warsh making clear that recent CPI
[2:41] Speaker 5: and PPI data were not entirely encouraging.
[2:44] Speaker 1: All right, let's move on to equities here.
[2:46] Speaker 5: Stocks getting a little bit of a lift initially, but
[2:48] Speaker 5: have now settled down into mixed territory. What gets my
[2:52] Speaker 5: attention is the VIX, slightly elevated, but still high. in
[2:57] Speaker 5: the 14 and a half range below 15. All right,
[3:00] Speaker 5: let's go back to Tom and Jackson Cole. He is
[3:03] Speaker 5: with one of our reporters there in Wyoming, Enda Curran.
[3:06] Speaker 3: Tom.
[3:09] Speaker 4: Scarlett, thanks so much. I needed that data check, Scarlett,
[3:11] Speaker 4: because I spent the last 30 minutes in the Pioneer
[3:13] Speaker 4: Grill just getting breakfast done the way it can only
[3:17] Speaker 4: be done at Jackson Hole.
[3:19] Speaker 6: There's been a lot of feedback.
[3:20] Speaker 4: You see the two-year yield move higher here, and there
[3:23] Speaker 4: has been an international response. We are so fortunate at
[3:26] Speaker 4: Bloomberg to have driving all of our Federal Reserve coverage.
[3:29] Speaker 4: and to Curran, who spent the pandemic holed up in
[3:32] Speaker 4: Hong Kong. He knows international economics better than anyone here
[3:36] Speaker 4: at Bloomberg. How did the international community, how would you
[3:39] Speaker 4: guess they did or they will respond to the war speech?
[3:43] Speaker 7: I think the speech is being well received, Tom. It's
[3:46] Speaker 7: been seen as clear on some critical points. The chairman's
[3:49] Speaker 7: views on inflation, which is that he's obviously concerned. He
[3:51] Speaker 7: made that clear. The chairman made clear that if they
[3:54] Speaker 7: don't see prices going back to the target at speed,
[3:56] Speaker 7: then they have work to do. That's code for obviously
[3:58] Speaker 7: raising interest rates. And he made clear the tool, the
[4:01] Speaker 7: near-term tool they have to control inflation is short-term interest rates. So,
[4:04] Speaker 7: It was a hawkish message. Of course, it sets it
[4:07] Speaker 7: up for how he now delivers on that.
[4:08] Speaker 4: Just as an aside, when New Zealand raises rates, do
[4:12] Speaker 4: they raise rates to get out in front of a
[4:14] Speaker 4: raising rates.
[4:15] Speaker 6: Chairman, Warsh? Sometimes.
[4:16] Speaker 7: It depends on the cycle. Sometimes central banks try to
[4:19] Speaker 7: get ahead of the Fed. You could argue this time
[4:21] Speaker 7: around maybe the Fed has been accused of being behind
[4:23] Speaker 7: the curve because other central banks have hiked during the
[4:26] Speaker 7: past year since we've had the energy crisis, for example.
[4:28] Speaker 7: But the Fed, not there yet, but certainly nudging towards
[4:31] Speaker 7: that direction. You've got the cushy job here.
[4:33] Speaker 4: Chris Anstey is actually working for a living with our
[4:35] Speaker 4: Federal Reserve coverage, paragraph by paragraph.
[4:38] Speaker 6: Which paragraph caught your attention?
[4:40] Speaker 7: I think the most important one was where he said
[4:42] Speaker 7: if inflation doesn't slow down quickly enough to their liking
[4:45] Speaker 7: than they.
[4:45] Speaker 2: Have work to do. So he's making it clear.
[4:47] Speaker 6: He actually mentioned some calculus, a second derivative.
[4:50] Speaker 8: He did.
[4:50] Speaker 6: It was a long speech.
[4:51] Speaker 7: It's something of a roadmap, but I think it's probably
[4:53] Speaker 7: his most clearest explanation yet of how he's seeing the economy,
[4:56] Speaker 7: how he's thinking about monetary policy, how he's thinking about inflation.
[4:59] Speaker 7: But again, Tom, the point is, all of that's fine.
[5:01] Speaker 7: It undoes some of the fallout from his press conference
[5:04] Speaker 7: in July. The question now is, okay, Just what are
[5:06] Speaker 7: you going to do about it? How will you deliver
[5:08] Speaker 7: in the months ahead?
[5:09] Speaker 4: The way we built Bloomberg Economics and our Federal Reserve
[5:11] Speaker 4: coverage foundationally around Rich Martin and Craig Torres and others,
[5:15] Speaker 4: and now you take over the mantle as well. Do
[5:19] Speaker 4: we have a clue how the presidents and governors voting
[5:21] Speaker 4: and non-voting reacted to this speech?
[5:24] Speaker 6: What will be the character of dissent forward?
[5:27] Speaker 7: Well, I think the view certainly upstairs, Tom, after the
[5:29] Speaker 7: speech was broadly speaking, well-received. That's from officials and academics
[5:34] Speaker 7: and the like. The speech has gone down well because
[5:36] Speaker 7: it's kind of course-corrected after what happened in that July
[5:38] Speaker 7: press conference in the bottom-up reaction. But going forward, as
[5:41] Speaker 7: I say, that's now done. Now it's all about the
[5:44] Speaker 7: next set of inflation data for the month of August.
[5:46] Speaker 7: And let's just say if that comes in on the
[5:48] Speaker 7: hot side. How are policymakers going to respond? I think
[5:51] Speaker 7: it seems to be setting up September for, I think,
[5:53] Speaker 7: a very important meeting for the Fed.
[5:55] Speaker 4: Quickly, Bloomberg Money, personal finance, retirement, wealth management. Can retirees succeed.
[6:01] Speaker 7: With a higher interest rate? Well, obviously, higher interest rates
[6:04] Speaker 7: are good for savings. So if you're on that side
[6:05] Speaker 7: of the ledger, it's better. If you're trying to get
[6:08] Speaker 7: on the housing ladder, get a mortgage, it's tougher for you.
[6:10] Speaker 6: Enda Curran, thank you so much for leading our coverage
[6:12] Speaker 6: here today.
[6:13] Speaker 4: Scarlett, a rainy day here, but Enda's used to that because,
[6:17] Speaker 4: you know, the whole English-British thing, you know, rain is normal.
[6:20] Speaker 1: Rain is normal.
[6:21] Speaker 5: All right, Tom, we're going to check in with you
[6:23] Speaker 5: a little bit later on. Tom Keene in Jackson Hole
[6:25] Speaker 5: with our Enda Curran. Let's bring the conversation back here
[6:28] Speaker 5: to New York because joining us at the Bloomberg Money
[6:30] Speaker 5: Desk this afternoon is Nikki Waller, who heads up our
[6:33] Speaker 5: money coverage for Bloomberg News, and Stacey Vanek-Smith, host of
[6:37] Speaker 5: the Everybody's... business podcast.
[6:39] Speaker 1: That's a weekly podcast, right? It is, yes.
[6:41] Speaker 2: Okay.
[6:41] Speaker 1: And we look forward to it every Thursday? Well, we
[6:44] Speaker 1: record Thursday and it airs Friday. It airs Friday.
[6:47] Speaker 3: All right.
[6:47] Speaker 5: Nikki, I want to start where Tom and Enda left off,
[6:49] Speaker 5: which is the big theme of this week, this month, really,
[6:53] Speaker 5: is the drama in the U.S.
[6:54] Speaker 1: Bond market. It's late August.
[6:56] Speaker 5: Typically, this market doesn't move a whole lot at this
[6:58] Speaker 5: time of the year, but a lot of fallout from
[7:00] Speaker 5: Treasury Secretary Scott Besson's intervention in which is introducing volatility
[7:05] Speaker 5: to the rates market. Talk to us about how your
[7:07] Speaker 5: team is looking at what that means for your personal finance.
[7:09] Speaker 1: That's for sure about the volatility.
[7:12] Speaker 9: And there's a lot of skepticism as well about Besant's
[7:15] Speaker 9: moves to try to calm this market. I'll go back
[7:18] Speaker 9: to what Enda was talking about, mortgages. The single biggest
[7:22] Speaker 9: thing we look at here is the mortgage rate. And
[7:25] Speaker 9: we saw this week that it kind of held steady,
[7:27] Speaker 9: kind of surprisingly around 6.66, make of.
[7:31] Speaker 1: That what you will.
[7:32] Speaker 9: But we also saw data this week showing that these
[7:34] Speaker 9: mortgage rates that are now elevated over last year are
[7:37] Speaker 9: really having an effect on the housing market, which has
[7:40] Speaker 9: slowed to a crawl. I think July new home sales,
[7:43] Speaker 9: the slowest in six months.
[7:46] Speaker 10: Yeah.
[7:46] Speaker 5: So mortgage rates staying elevated is an affordability concern. Another
[7:49] Speaker 5: affordability concern, Stacey, is the fact that the trade war
[7:53] Speaker 5: is back on, at least with Canada.
[7:55] Speaker 6: The U.S.
[7:56] Speaker 5: Now slapping 50 percent tariffs on certain Canadian goods, Canada
[8:00] Speaker 5: retaliating as well. I keep joking that my hockey sticks
[8:02] Speaker 5: and maple syrup are going to get a lot more
[8:04] Speaker 5: expensive as a result.
[8:05] Speaker 11: They will actually probably get a lot more expensive. Yeah,
[8:08] Speaker 11: the trade war really escalated, I think, in a way
[8:10] Speaker 11: that nobody expected. And it will affect both sides of
[8:14] Speaker 11: the border, of course. Obviously, it's going to affect Canada's
[8:18] Speaker 11: economy a lot more. But for American consumers, they can
[8:21] Speaker 11: expect auto parts. This is really going to hit the
[8:23] Speaker 11: auto industry. Auto parts haven't been tariffed at all. Now
[8:26] Speaker 11: they're threatening to bring in 50% tariffs. So that's going
[8:30] Speaker 11: to be It's going to be more expensive to get
[8:31] Speaker 11: your car repaired, more expensive to get a car. And
[8:34] Speaker 11: also like other things that we get from Canada, lumber,
[8:37] Speaker 11: which is going to hit the housing industry along with
[8:39] Speaker 11: mortgages and things like paper also expected to get a
[8:43] Speaker 11: lot more expensive.
[8:44] Speaker 5: I mean, this just contributes to this souring sentiment that
[8:48] Speaker 5: everyone seems to feel.
[8:49] Speaker 1: People say they don't feel great. They're spending money.
[8:51] Speaker 5: But they're spending it in more selective ways. Nikki, how
[8:55] Speaker 5: are you thinking about, or what are people telling you
[8:57] Speaker 5: about how they're retiring? Tom mentioned retiring in Wyoming. Delaware
[9:01] Speaker 5: seems to be a new favorite place for people to retire.
[9:04] Speaker 3: Yes.
[9:05] Speaker 9: Move over Florida. God's waiting room has moved to Delaware.
[9:09] Speaker 9: That's sort of what we've been saying among the team
[9:11] Speaker 9: as we've been reporting.
[9:12] Speaker 1: Out this story.
[9:12] Speaker 9: We spotted that Delaware has seen, according to the IRS
[9:16] Speaker 9: migration data, this pretty big influx of retirees. I think
[9:20] Speaker 9: it's tens of thousands of retirees moving into Delaware in
[9:24] Speaker 9: the last few years, which is.
[9:25] Speaker 1: A huge number.
[9:26] Speaker 9: And it's happening at the same time that, as we've reported,
[9:29] Speaker 9: costs are going up in Florida. It's becoming less of
[9:32] Speaker 9: a haven for retirees. And then you have Delaware, which
[9:35] Speaker 9: has some of the last affordable for right now. beach
[9:39] Speaker 9: land on the East Coast. These are really cute towns
[9:42] Speaker 9: and people are moving in.
[9:43] Speaker 5: But of course, this has an effect on Delaware as
[9:46] Speaker 5: well because it's getting really congested there and they don't
[9:48] Speaker 5: necessarily have the infrastructure to support this influx of people.
[9:52] Speaker 9: Yes, the number one hobby right now in Delaware is
[9:54] Speaker 9: complaining about everybody who's moving to Delaware or the traffic
[9:58] Speaker 9: that's caused in Sirius, as we've seen, the health system
[10:02] Speaker 9: is also really strained. It's hard for these retirees to
[10:05] Speaker 9: get doctor's appointments, dentist appointments. We're also just seeing infrastructure
[10:10] Speaker 9: being strained in a lot of ways. On the other hand,
[10:13] Speaker 9: we may see an influx of younger people moving into
[10:16] Speaker 9: Delaware because the retirees are creating jobs.
[10:19] Speaker 5: Oh, but they have to find housing then. They have
[10:21] Speaker 5: to find affordable housing, and all the retirees are buying
[10:23] Speaker 5: up the best.
[10:25] Speaker 1: Spots in Delaware. And the cycle continues. And the cycle continues.
[10:28] Speaker 5: All right, speaking of infrastructure, I feel like this week
[10:30] Speaker 5: we really saw break out into the open the public
[10:33] Speaker 5: opposition to data centers, and it's kind of across blue
[10:36] Speaker 5: states and red states.
[10:38] Speaker 2: Oh, yeah.
[10:38] Speaker 11: I think this is clearly becoming one of the big,
[10:42] Speaker 11: it may be one of the few things that everybody
[10:44] Speaker 11: agrees on in the country right now.
[10:45] Speaker 1: Except President Trump.
[10:46] Speaker 11: Except President Trump, right? We really need data centers to
[10:49] Speaker 11: power this sort of future AI and our economy and
[10:53] Speaker 11: all the growth that we're excited about. At the same time,
[10:56] Speaker 11: people don't want them in their backyards. In Virginia, where
[10:58] Speaker 11: there's the biggest concentration of data centers, they call it
[11:01] Speaker 11: data center alley, right? Electricity costs have gone up by 267%
[11:06] Speaker 11: in the last five years. And just to give you
[11:10] Speaker 11: an example of how emotional things can get, there was
[11:12] Speaker 11: a couple in Kentucky, a farming couple, and they were
[11:15] Speaker 11: offered $ 26 million by a data center to buy their
[11:19] Speaker 11: 1,200 acre farm. And they responded with, kick rocks and
[11:23] Speaker 11: don't come back.
[11:24] Speaker 1: So that was a polite no. That was a yes.
[11:28] Speaker 11: But I mean, it just shows you turning down $ 26
[11:30] Speaker 11: million is, I mean, that is really powerful sentiment.
[11:33] Speaker 1: That is some kind of NIMBY, I can just say.
[11:36] Speaker 1: All right. Thank you so much, ladies.
[11:38] Speaker 5: Nikki Waller, of course, she heads up our money coverage
[11:40] Speaker 5: here at Bloomberg News. Stacey Vanek-Smith as well. She is host,
[11:43] Speaker 5: co-host of the Everybody's Business podcast, which comes out every Friday.
[11:47] Speaker 5: Coming up, we're back in Jackson Hole with Ken Rogoff,
[11:50] Speaker 5: Harvard professor of economics, the former chief economist at the IMF.
[11:54] Speaker 5: And later on, 72% of Americans say that they feel
[11:57] Speaker 5: guilty spending money on joy. We've got that and other
[12:01] Speaker 5: details from a new report. This is Bloomberg Money. Welcome
[12:12] Speaker 5: back to Bloomberg Money. I'm Scarlett Fu, my partner in crime,
[12:14] Speaker 5: Tom Keen, not here in New York, but in Jackson Hole, Wyoming,
[12:17] Speaker 5: where he's standing by with Ken Rogoff, Harvard professor of
[12:20] Speaker 5: economics and former chief economist over at the IMF.
[12:23] Speaker 1: Tom, I'll hand it over to you.
[12:27] Speaker 6: Thank you.
[12:27] Speaker 4: This is my conversation of this Jackson Hole without questions.
[12:31] Speaker 4: Professor Rogoff will be speaking to the assembled at lunch
[12:34] Speaker 4: here in about an hour. Of course, the book last
[12:38] Speaker 4: year is a required read. Brammo's son actually even read
[12:42] Speaker 4: the book, Moving Royalties Up, Our Dollar, Your Problem. And
[12:45] Speaker 4: the new edition of Our Dollar, Your Problem is there's
[12:48] Speaker 4: a Rogoff wedding coming up here as well. Is it
[12:51] Speaker 4: Our Dollar, Your Problem? How are you and Mrs. Rogoff
[12:54] Speaker 4: holding up?
[12:55] Speaker 12: We're holding up so far. It's just a week away.
[12:58] Speaker 12: Our daughter's getting married. But trying to control the budget,
[13:02] Speaker 12: just like the U.S.
[13:02] Speaker 3: Government.
[13:03] Speaker 4: Trying to control the budget. Let's do that right now
[13:06] Speaker 4: here at Jackson Hole. Ken, I think what's so important
[13:09] Speaker 4: here is there was another time and place. You have
[13:11] Speaker 4: an op-ed in the FT from a couple years ago.
[13:13] Speaker 4: Here's the photo, folks. Bill Clinton, Al Gore. There was
[13:17] Speaker 4: a time where this is a photo right from Ken
[13:20] Speaker 4: Rogoff's op-ed.
[13:21] Speaker 6: How did we screw this up? How did we get to.
[13:23] Speaker 2: The will to do this?
[13:24] Speaker 4: Of 1999 to the irresponsibility of 2026?
[13:28] Speaker 2: Super short answer.
[13:31] Speaker 12: We've had a couple of catastrophes, the global financial crisis
[13:35] Speaker 12: and the pandemic. But I think a larger issue, which
[13:39] Speaker 12: has been a big topic at this symposium for years
[13:43] Speaker 12: and years, was a near religious conviction among academic economists
[13:49] Speaker 12: in the journal's that interest rates were going to go
[13:51] Speaker 12: down and down and down. So who cares how much
[13:55] Speaker 12: debt you owe? You'll never have to pay interest on it.
[13:58] Speaker 12: And I think that's dominated the political landscape. The interest
[14:03] Speaker 12: rates have reversed, but Washington hasn't, and a lot of
[14:06] Speaker 12: academics hasn't.
[14:07] Speaker 4: The Besson angle, and in your Project Syndicate essay in
[14:10] Speaker 4: the last 72 hours, I'll say you go right after
[14:13] Speaker 4: Secretary Besson. Glenn Hubbard at Columbia has a respect for
[14:17] Speaker 4: the idea, you can do supply-side, but you may not
[14:20] Speaker 4: grow with it. There's a certitude that we will grow
[14:23] Speaker 4: our way out of this predicament with a pseudo-supply-side exercise.
[14:28] Speaker 6: Is there any evidence we can do that?
[14:31] Speaker 12: We might, but let's start with the fact we're infinitely
[14:35] Speaker 12: rich at the moment. Even if we grew really slowly,
[14:39] Speaker 12: we ought to be able to pay our bills. So
[14:42] Speaker 12: telling us we're going to get much richer in the future,
[14:44] Speaker 12: that will bring in some further tax revenues, but demands
[14:48] Speaker 12: on expenditures, old age expenditures. And then there are a
[14:52] Speaker 12: lot of technical issues around that. Interest rates will probably
[14:55] Speaker 12: go up if there's fast growth. Labor share is falling,
[14:59] Speaker 12: that's all over the place. Capital is harder to tax
[15:02] Speaker 12: than labor. So I think there are many other reasons
[15:06] Speaker 12: interest rates are going up. How about the war in Iran?
[15:09] Speaker 12: How about populism, not just in the US, all over
[15:12] Speaker 12: the world?
[15:13] Speaker 6: Have you been asked to be in a task force?
[15:15] Speaker 2: No, I wasn't. Nick, you got those short straws.
[15:19] Speaker 12: No, I think the world of Kevin Warsh, but I'm
[15:22] Speaker 12: just as grateful that I'm not on one of the
[15:24] Speaker 12: task forces.
[15:24] Speaker 6: Oh, that was so smooth, folks. Did you see how
[15:27] Speaker 6: Ken Rogoff did that? Ken, let's talk seriously.
[15:31] Speaker 4: We had Jack Lew on Bloomberg monies about retirement, Social Security,
[15:34] Speaker 4: and all that. And the former Treasury Secretary said day one,
[15:38] Speaker 4: After the presidential election, we need a panel. We need
[15:41] Speaker 4: to get something done about Social Security. You've got to
[15:45] Speaker 4: be a natural selection for that panel. What's the first
[15:48] Speaker 4: task to get our entitlement program straightened around?
[15:53] Speaker 12: Honestly, I think it's going to be very difficult to
[15:55] Speaker 12: do till we have a crisis that convinces voters something
[16:00] Speaker 12: has to happen.
[16:01] Speaker 2: They're not convinced.
[16:04] Speaker 12: Now, some economists are finally coming around to the view
[16:07] Speaker 12: that maybe it wasn't the free lunch they said it was,
[16:10] Speaker 12: that maybe someday we'll get inflation, financial repression, but it's
[16:14] Speaker 12: not the dominant political position. I think if you try
[16:18] Speaker 12: to run in 2028, on I'm going to fix Social
[16:21] Speaker 12: Security in any more than.
[16:23] Speaker 2: A passing phrase.
[16:24] Speaker 6: Silence in the rooms.
[16:25] Speaker 2: Yeah, people's eyes glaze over. I think it's going to take.
[16:28] Speaker 12: That's why my book, at the end of it, predicts
[16:33] Speaker 12: at some point this will end in a crisis of
[16:35] Speaker 12: some sort to catalyze the change, which will be painful.
[16:39] Speaker 4: God, the rain here is killing my glasses. I'm fogging
[16:42] Speaker 4: up like no tomorrow. We're going to fog up with
[16:45] Speaker 4: higher yields. You've nailed the vector towards higher yields. What
[16:49] Speaker 4: 10-year yield or even 30-year bond do you perceive to
[16:53] Speaker 4: be that point of crisis for the American public?
[16:57] Speaker 12: Well, I mean, it's the debt level, the level we're
[17:00] Speaker 12: at already is difficult. The crisis comes when a shock
[17:03] Speaker 12: happens and you're not resilient. The Iran war was a
[17:06] Speaker 12: mini shock, really, compared to what could happen. But over
[17:10] Speaker 12: the next five years, it could be a.
[17:13] Speaker 12: Cyber war, it could be some kind of artificial intelligence thing,
[17:18] Speaker 12: most likely China and Taiwan. But a war kind of shock,
[17:23] Speaker 12: that's the scenario that pushes up interest rates. And that
[17:27] Speaker 12: makes it hard to, the Fed can't just cut interest
[17:30] Speaker 12: rates if the market's pushing them up. The government can't
[17:33] Speaker 12: just print money if the market's pushing them up. And
[17:35] Speaker 12: I think in our environment, that's a big risk.
[17:38] Speaker 4: The charm of This Time is Different, Reinhart and Rogoff,
[17:41] Speaker 4: is you combine, you conflate together responsibly public and private investment.
[17:46] Speaker 4: So right now, if we conflate together $ 40 trillion plus
[17:50] Speaker 4: private this, private that, with Wall Street's new addiction, private
[17:53] Speaker 4: equity and private credit, are we doing a This Time
[17:56] Speaker 4: is Different path right now?
[17:59] Speaker 12: Well, look, I mean, of course there's going to be
[18:01] Speaker 12: some kind of spectacular collapse in AI at some point,
[18:05] Speaker 12: which doesn't mean you should take your money out of AI.
[18:08] Speaker 12: Schiller and Greenspan famously predicted the collapse of the stock
[18:13] Speaker 12: market when I was at around $ 4, 000.
[18:16] Speaker 2: Then it went to 8,000. And they were right. And
[18:18] Speaker 2: then it went to 6,000. It collapsed. But timing was terrible.
[18:22] Speaker 2: And I think that's difficult. But the U.S.
[18:24] Speaker 12: Government needs to take steps. They'll be much smaller and
[18:29] Speaker 12: easier steps if you do it sooner. I don't see
[18:32] Speaker 12: any signs of that happening.
[18:33] Speaker 6: You and I grew up under the shadow of Barbara B. Conable.
[18:35] Speaker 4: He's the one folks who told Nixon, here's the door,
[18:38] Speaker 4: what's your hurry? There used to be a normal process
[18:40] Speaker 4: here of, say, Barbara Conable, House Ways and Means. Where
[18:44] Speaker 4: does Congress fit in to the crisis that you see coming?
[18:49] Speaker 12: Well, you know, at the moment, they're kind of sidelined
[18:52] Speaker 12: and paralyzed. But there are many people in Congress on
[18:56] Speaker 12: both sides of the aisle who are.
[18:57] Speaker 2: Aware of this.
[18:59] Speaker 12: But again, you know, it's hard to catalyze action. By
[19:02] Speaker 12: the way, we're talking about the United States. We could
[19:04] Speaker 12: go to the UK. We could go to France. Look
[19:06] Speaker 12: what happened to Macron. when he tried to raise the
[19:09] Speaker 12: retirement age. And the French election is coming up right now.
[19:11] Speaker 12: It's going to get murdered. And so it's the same
[19:14] Speaker 12: thing all over the world.
[19:15] Speaker 4: Jason from Cambridge emails in and says, Tom, you trashed
[19:18] Speaker 4: me with Act 10. To Ken Rogoff, the question of
[19:22] Speaker 4: the afternoon here, Scarlett, is there great inflation at Harvard Economics?
[19:28] Speaker 12: Well, we have a new policy coming in place to
[19:30] Speaker 12: try to deal with it.
[19:32] Speaker 2: But, you know, absolutely there was.
[19:35] Speaker 12: I will say when I came to Harvard, I learned
[19:38] Speaker 12: from complaints from the dean that I was one of
[19:40] Speaker 12: the easiest graders.
[19:42] Speaker 2: I didn't change a thing.
[19:44] Speaker 12: And then over 20 years, I find out from some
[19:47] Speaker 12: of the kids, you're the hardest grader at Harvard.
[19:49] Speaker 2: So that tells you. I've been told you're brutal. You're ruthless.
[19:53] Speaker 12: I'm not trying to be. I'm trying to be fair and,
[19:56] Speaker 12: you know, reasonably generous.
[19:57] Speaker 4: Brutal and ruthless, Ken Rogoff. Thank you so much. My
[20:01] Speaker 4: high point here at Jackson Hole today. Scarlet Fu in
[20:04] Speaker 4: New York.
[20:05] Speaker 1: Thank you, Tom, for that conversation.
[20:06] Speaker 5: And by the way, if you listen carefully, you can
[20:08] Speaker 5: hear the raindrops falling, certainly as you were talking to Ken.
[20:11] Speaker 5: And we saw earlier that you were holding an umbrella
[20:14] Speaker 5: for Lisa Bromowitz, who you're hosting the surveillance special with.
[20:18] Speaker 5: Quite the gentleman there. Tom, as you wrap up your
[20:20] Speaker 5: time in Jackson Hole, what are your final thoughts?
[20:24] Speaker 4: My final thoughts are Ken Rogoff's not the most important
[20:27] Speaker 4: person here.
[20:28] Speaker 6: Neither is Chairman Warsh.
[20:30] Speaker 4: The most important people here are the media and the
[20:33] Speaker 4: current just on with us. The grind that Michael McKee
[20:36] Speaker 4: goes through each and every day. The simple distinction here
[20:40] Speaker 4: is the press's coverage of this huge public institution. It's
[20:45] Speaker 4: vital that the press keep the message going in this
[20:48] Speaker 4: time of distraction and tumult.
[20:51] Speaker 12: All right.
[20:51] Speaker 5: Well, you and Lisa and Michael McKee are doing your parts.
[20:54] Speaker 1: Thank you so much, Tom.
[20:55] Speaker 5: We're going to check in with you when you come
[20:56] Speaker 5: back to New York. Bloomberg Money is your destination for
[21:04] Speaker 5: personal finance. It's a cross-platform effort that goes beyond your
[21:07] Speaker 5: TV screens because it includes our new digital hub at
[21:09] Speaker 5: Bloomberg.com slash money.
[21:11] Speaker 1: And this story got my attention. More and more U.S.
[21:15] Speaker 5: Employers are opting out of group health insurance plans as
[21:17] Speaker 5: they brace for large price hikes.
[21:19] Speaker 1: Instead.
[21:20] Speaker 5: they're going to provide stipends for employees to buy health
[21:22] Speaker 5: insurance for themselves. Bloomberg's Taylor Nicole Rogers joins us now
[21:27] Speaker 5: with more on this. I didn't even know that this
[21:29] Speaker 5: was an option for employers.
[21:31] Speaker 1: It's a pretty new option.
[21:32] Speaker 13: It's only been around since 2020, but it's something that
[21:35] Speaker 13: people have been looking into because health insurance has just
[21:38] Speaker 13: gotten so expensive. Companies are spending almost $ 19, 000 per employee
[21:42] Speaker 13: these days.
[21:42] Speaker 3: Okay.
[21:44] Speaker 5: So can employees pocket the money or do they actually
[21:47] Speaker 5: have to go to a marketplace to buy.
[21:50] Speaker 1: Their own insurance? And is there even a thriving marketplace?
[21:52] Speaker 13: Well, there are the Affordable Care Act marketplaces.
[21:55] Speaker 1: I meant thriving, though.
[21:57] Speaker 13: Whether they're thriving or not is in the eye of
[21:58] Speaker 13: the beholder for sure. But employees are required to spend
[22:02] Speaker 13: the money on insurance. Depending on the plan, if they
[22:05] Speaker 13: have anything left over, they can use that for whatever
[22:07] Speaker 13: they want or just take that home.
[22:09] Speaker 5: Don't the economics of health insurance argue for big groups
[22:12] Speaker 5: to get insurance coverage so that the young and healthy
[22:14] Speaker 5: help subsidize the older and more fragile?
[22:17] Speaker 2: Exactly.
[22:18] Speaker 13: But another trend employers have been seeing is that those healthy,
[22:21] Speaker 13: more profitable workers have been jumping off of plans altogether.
[22:25] Speaker 13: So the economics are breaking to the point where some
[22:28] Speaker 13: employers are saying, you know what, I'd rather be out
[22:30] Speaker 13: of this business altogether.
[22:32] Speaker 5: I think clearly employers are doing this out of necessity.
[22:35] Speaker 5: What does your reporting show whether employees like this change?
[22:38] Speaker 13: Some employees do like it because it gives them more
[22:40] Speaker 13: control over the benefits they get. For example, if they
[22:44] Speaker 13: would like to be using a GLP-1, they can choose
[22:46] Speaker 13: a plan that uses that. But from the vast majority
[22:49] Speaker 13: I've heard from, they're annoyed that they have to go
[22:52] Speaker 13: through the administrative hassle of sorting through a marketplace. Marketplace
[22:55] Speaker 13: plans are more expensive sometimes. They have smaller networks of
[22:58] Speaker 13: doctors and hospitals. And they tend to have higher deductibles.
[23:02] Speaker 13: So it doesn't work out for everyone.
[23:04] Speaker 5: Yeah, you take on the risk. You take on the
[23:05] Speaker 5: responsibility of everything related to health care. It's kind of
[23:08] Speaker 5: the same way that we transition from traditional pensions to 401ks.
[23:12] Speaker 2: Exactly.
[23:12] Speaker 1: All right.
[23:13] Speaker 5: Taylor Nicole Rogers, thank you so much for bringing us
[23:15] Speaker 5: this story. It's a fantastic read. You should check it
[23:18] Speaker 5: out on Bloomberg.com slash money. Joining us now is Neela Richardson.
[23:22] Speaker 5: Neela is chief economist and ESG officer at ADP. She
[23:25] Speaker 5: is also a contributor to Bloomberg. Great to see you here.
[23:28] Speaker 5: Welcome to Bloomberg Money.
[23:29] Speaker 2: Hello.
[23:30] Speaker 14: It's great to be here with you, Scarlett.
[23:32] Speaker 1: We know ADP is a payrolls company.
[23:33] Speaker 5: That's kind of like what everyone knows it as, automatic
[23:36] Speaker 5: data processing. But you do also manage workplace benefits like
[23:40] Speaker 5: retirement accounts and health insurance.
[23:41] Speaker 1: Is that right?
[23:42] Speaker 2: We do.
[23:42] Speaker 1: We do.
[23:42] Speaker 14: We offer a lot of solutions for small businesses who
[23:45] Speaker 14: are looking to offset health care costs. And that is
[23:49] Speaker 14: where we are right now. This health care is climbing.
[23:52] Speaker 14: And whether you shift it to the work or you
[23:56] Speaker 14: assume it as a small business, it's they still.
[23:58] Speaker 1: Have to be dealt with.
[23:59] Speaker 14: And a lot of people work just for benefits.
[24:01] Speaker 1: It's not just about the paycheck.
[24:04] Speaker 14: And so we do offer a variety of solutions for
[24:06] Speaker 14: small businesses for just that reason.
[24:09] Speaker 5: Yeah, a lot of people go work at Trader Joe's
[24:10] Speaker 5: because they can get health insurance. When employers tell employees,
[24:14] Speaker 5: go figure out your own health insurance because costs are
[24:16] Speaker 5: rising too much for us, is that just exposing individual
[24:18] Speaker 5: households to inflation in a more direct way?
[24:21] Speaker 1: I think so. I think so.
[24:23] Speaker 14: I mean, there is something about combined care and having
[24:28] Speaker 14: a managed service. And I think there are solutions. ADP
[24:31] Speaker 14: has a variety of them, but there are others in
[24:34] Speaker 14: the marketplace that serve as an alternative. But no one
[24:39] Speaker 14: is really escaping the elephant in the market, which is
[24:42] Speaker 14: health care costs are climbing. And a lot of these drugs,
[24:46] Speaker 14: whether it's GLP-1s and obesity, or if it's even cancer
[24:50] Speaker 14: treatments that are really revolutionary, they.
[24:53] Speaker 1: All come with a price tag.
[24:55] Speaker 14: Pharmaceuticals have a seven to eight year span in which
[24:58] Speaker 14: they can recoup costs. And that is what employers and
[25:02] Speaker 14: employees are facing to take advantage of these next level care.
[25:05] Speaker 14: You really have to pay up. And that's what's really
[25:09] Speaker 14: challenging in this moment.
[25:10] Speaker 5: Also challenging is the overall affordability picture. Consumers say that
[25:15] Speaker 5: they're feeling lousy. We know that they're seeking value. Walmart,
[25:18] Speaker 5: McDonald's have certainly benefited from that. But there is new
[25:20] Speaker 5: data showing a rise in fast food restaurant bankruptcies, including
[25:24] Speaker 5: some Popeye and Subway franchisees.
[25:27] Speaker 14: How do you read into this kind of development? You know,
[25:30] Speaker 14: first of all, the restaurant industry is a hard industry.
[25:35] Speaker 14: And not every restaurant, even a franchise, is a successful franchise.
[25:40] Speaker 14: But when I talk to restaurant owners, it seems to
[25:42] Speaker 14: be that fast casual segment that's doing better. But one
[25:46] Speaker 14: of the things that surprised me when I talked to
[25:50] Speaker 14: these real restaurant conglomerates at the fast food level is
[25:53] Speaker 14: that they're really concerned about affordable housing. Now, you think
[25:56] Speaker 14: about where these restaurants are located. Location drives the consumer experience.
[26:01] Speaker 14: you know, consumer demand. If they're not well located, they're
[26:05] Speaker 14: not going to get the traffic. If you're not seeing
[26:07] Speaker 14: the Popeyes on the way home, you may not think
[26:09] Speaker 14: Popeyes on a Saturday evening. But so they need workers
[26:13] Speaker 14: to live where their customer base is. And if there
[26:15] Speaker 14: is a disconnect because it's too pricey in San Francisco
[26:18] Speaker 14: or Los Angeles or New York City, it's going to
[26:21] Speaker 14: be hard to get the workers inside that door.
[26:23] Speaker 5: I think that's a really important point because franchisees say
[26:26] Speaker 5: that they're seeing elevated costs for rent, for wages, for
[26:28] Speaker 5: food as well. The question I have for you is
[26:31] Speaker 5: that owning and operating these businesses has been one of
[26:34] Speaker 5: the tried and true ways for Americans to build wealth,
[26:37] Speaker 5: isn't it? I mean, when people say they're business owners,
[26:39] Speaker 5: small business owners, a lot of them own franchises.
[26:43] Speaker 14: You know, historically, there's only been two real ways to
[26:46] Speaker 14: create wealth in the United States. And incidentally, it's the
[26:50] Speaker 14: reason why millions and millions and millions of people come
[26:53] Speaker 14: to the United States. The first is through entrepreneurship. The
[26:57] Speaker 14: second is through housing. Most of us choose the housing
[27:00] Speaker 14: option that forced savings. And that used to be the
[27:03] Speaker 14: old school way of building wealth. Well, now look at
[27:06] Speaker 14: new business formations. They have not receded. They have stepped
[27:10] Speaker 14: up since the pandemic. They keep growing. AI has enabled
[27:14] Speaker 14: a lot of small businesses. I think the silver economy
[27:17] Speaker 14: and the aging workforce and now taking that talent and
[27:20] Speaker 14: opening a business.
[27:21] Speaker 1: Is part of it.
[27:22] Speaker 14: And so, yes, having that small business is a way
[27:25] Speaker 14: of wealth creation and we're seeing it becoming more popular,
[27:29] Speaker 14: maybe tapping into some of that home equity for boomers
[27:31] Speaker 14: who have it.
[27:32] Speaker 6: Absolutely.
[27:33] Speaker 5: For those who do get a paycheck and have to
[27:34] Speaker 5: get a W-2, inflation is proving to be pretty sticky
[27:37] Speaker 5: and a lot of people get wage increases, jump condition
[27:41] Speaker 5: wage increases by changing jobs. Does changing jobs still produce
[27:45] Speaker 5: a pay bump? What are you guys seeing in ADP
[27:47] Speaker 5: on that?
[27:48] Speaker 14: Yes, it does still produce a pay bump, but the premium.
[27:52] Speaker 14: for that pay bump has narrowed significantly.
[27:55] Speaker 3: How much?
[27:56] Speaker 14: We're looking at about 2% between switching and just changing
[27:59] Speaker 14: for the average worker. Now, it matters a lot what
[28:02] Speaker 14: kind of industry you're in. If you're a construction worker,
[28:05] Speaker 14: expect almost 14% increase from your old job to your
[28:09] Speaker 14: new job.
[28:09] Speaker 5: Really?
[28:10] Speaker 14: If you're in retail or leisure and hospitality, the restaurant
[28:13] Speaker 14: business that we were just talking about, you'll actually see
[28:16] Speaker 14: negative earnings for the typical worker, negative growth. from switching
[28:21] Speaker 14: jobs because that is an industry that rewards loyalty and
[28:24] Speaker 14: service over fast switching. So it really depends where you are.
[28:29] Speaker 14: Older workers don't switch jobs as much. And this is
[28:31] Speaker 14: really an important issue because if you look at the
[28:34] Speaker 14: cumulative inflation that we've seen over the last five years,
[28:37] Speaker 14: My colleagues at ADP Research and University of Chicago just
[28:41] Speaker 14: put out a paper.
[28:42] Speaker 1: On this last week.
[28:43] Speaker 14: 47% of Americans, according to our research, saw real wage
[28:48] Speaker 14: declines over the last four years because of inflation. So
[28:53] Speaker 14: this is why consumer sentiment is dismal. People's salaries are
[28:57] Speaker 14: just not... So you may have gotten that raise, that 3%
[29:00] Speaker 14: raise that most companies give, but it's not enough to
[29:03] Speaker 14: compete with 7% inflation, even as inflation... was lowered through
[29:08] Speaker 14: those subsequent years.
[29:09] Speaker 5: Those are people who work at companies and are on
[29:12] Speaker 5: the payroll.
[29:13] Speaker 1: What about independent contractors?
[29:15] Speaker 5: What can you tell us about the wage trends for
[29:17] Speaker 5: these folks?
[29:18] Speaker 1: Is that captured in the same way?
[29:20] Speaker 14: You know, yeah. Well, at ADP, we see everybody. And
[29:23] Speaker 14: we also see single-person proprietorships. And so what's happening with
[29:28] Speaker 14: the contractor, what the vendor said, is that they're building
[29:31] Speaker 14: in their contracts. So unlike workers, they can say, hey,
[29:34] Speaker 14: please put in a.
[29:35] Speaker 3: 3%, 6%.
[29:35] Speaker 14: I actually have seen a 7% in the heart of
[29:39] Speaker 14: our inflation peak, where contractors were asking for multi-year increases
[29:47] Speaker 14: based on inflation.
[29:48] Speaker 1: So contractors, the savvy ones, have been able to index.
[29:53] Speaker 14: Their wages to inflation in a way that no worker
[29:56] Speaker 14: would be able to do in a regular contract.
[29:57] Speaker 2: Okay.
[29:58] Speaker 5: So employees should be taking their cues from these contractors
[30:01] Speaker 5: and these construction workers who seem to see outsized wage gains.
[30:04] Speaker 14: We have to go back to our previous conversation. Those
[30:07] Speaker 14: jobs come without health benefits, by and large. So Before
[30:10] Speaker 14: we wrap up.
[30:11] Speaker 5: Our conversation, Nila, we always ask our guests here on
[30:14] Speaker 5: Bloomberg Money how you approach managing your personal finance. Are
[30:17] Speaker 5: you kind of a set it and forget it investor
[30:20] Speaker 5: or are you making adjustments on a regular basis, a
[30:23] Speaker 5: quarterly basis or annual basis?
[30:24] Speaker 1: How do you think about it? I do both.
[30:27] Speaker 14: I'm a big believer in dollar cost averaging. And this
[30:31] Speaker 14: is where the housing moment is important. The importance of
[30:35] Speaker 14: housing was not just the house and the appreciation, it
[30:37] Speaker 14: was the fixed savings, the discipline of putting the same
[30:41] Speaker 14: amount of money into equity eventually every single month. Well,
[30:46] Speaker 14: even if you don't have a house, you can have
[30:48] Speaker 14: that same discipline in the market. And that's called dollar
[30:51] Speaker 14: cost averaging, where you're putting in a fixed amount of
[30:54] Speaker 14: money into the market, whether it's an ETF or some
[30:57] Speaker 14: other broad-based equity and bond portfolio every single month. And
[31:03] Speaker 14: I'm going to speak an old book. It's not timing
[31:06] Speaker 14: the market. It's time in the market. So if you
[31:08] Speaker 14: can do that at a younger age, you can build
[31:09] Speaker 14: wealth over time.
[31:10] Speaker 1: But you know what?
[31:11] Speaker 14: I'm all about selective bets. And we've seen some startups
[31:15] Speaker 14: that are really appetizing in terms of an investor portfolio
[31:19] Speaker 14: especially if you're young enough to see it pay off.
[31:21] Speaker 3: All right.
[31:22] Speaker 5: So disciplined investing is Neela Richardson's approach here. Neela Richardson
[31:27] Speaker 5: of ADP. She's the chief economist there. She's also a
[31:29] Speaker 5: Bloomberg contributor. Thank you so much for stopping by. It's
[31:32] Speaker 5: great to be here, Scarlett.
[31:33] Speaker 1: You're listening to Bloomberg Money. Stay with us for more
[31:36] Speaker 1: to come after this.
[31:44] Speaker 8: All right.
[31:44] Speaker 5: Another story that caught my eye this week comes from.
[31:46] Speaker 1: Bloomberg's Sarah Foster.
[31:48] Speaker 5: Her article covers how after Congress tweaked the rules covering
[31:51] Speaker 5: 529 plans in 2022, people without kids are now able
[31:56] Speaker 5: to put money into those accounts after hitting the annual
[31:58] Speaker 5: limits for contributing to their retirement plans. So in a way,
[32:02] Speaker 5: they treat the 529 as a backdoor for funding a
[32:05] Speaker 5: Roth IRA. Sarah joins us along with Bloomberg's Zijia Song.
[32:08] Speaker 5: So Sarah, let's just back up a little bit. 529
[32:11] Speaker 5: accounts are for you to put money away for your
[32:14] Speaker 5: child or unborn child's college tuition. savings or maybe even
[32:17] Speaker 5: their high school savings if they're going to you know
[32:19] Speaker 5: go to a private school but if you're an avid
[32:21] Speaker 5: saver you could use it for something else as well
[32:24] Speaker 5: yeah I think what's really interesting about the 529 is
[32:27] Speaker 5: kind of this misconception that it's actually for your children
[32:30] Speaker 5: actually anybody can have their own 529 right now you
[32:34] Speaker 5: can open up one for yourself you can open up
[32:37] Speaker 5: one for your children as well you know open one
[32:39] Speaker 5: up for a niece or a nephew you And I
[32:42] Speaker 5: think a lot of people are really discovering here that
[32:44] Speaker 5: since Congress.
[32:45] Speaker 1: Tweaked the rules, there's a new way.
[32:47] Speaker 10: That they can kind of use it as like a
[32:49] Speaker 10: wealth building strategy. So we spoke with people who are
[32:53] Speaker 10: either opening these 529 accounts before they have children or
[32:56] Speaker 10: before they even know they want them because they're using
[32:59] Speaker 10: it as a way to maybe kind of put extra
[33:02] Speaker 10: funds into a Roth IRA if they go unused.
[33:04] Speaker 5: What are the limitations to using a 529 account to
[33:07] Speaker 5: fund retirement?
[33:08] Speaker 10: It's a very complicated process. And a lot of the
[33:10] Speaker 10: financial advisors that we spoke with say that it should
[33:12] Speaker 10: probably kind of come in at the end, you know,
[33:15] Speaker 10: after you've maxed out these other accounts. But you have
[33:18] Speaker 10: to have the funds in your 529 plan for five years.
[33:21] Speaker 10: You can only move up to.
[33:25] Speaker 1: $ 35, 000 over a lifetime.
[33:26] Speaker 10: And you also have to hit the Roth IRA annual
[33:29] Speaker 10: contribution limits, which this year at $ 7, 500. So you'd have
[33:32] Speaker 10: to do it in increments. All right.
[33:34] Speaker 5: So you have to keep a spreadsheet on this in
[33:35] Speaker 5: order to really take advantage of it. But again, for
[33:38] Speaker 5: people who are aggressive savers, and there are a lot
[33:40] Speaker 5: of them out there, this is one way of doing it.
[33:42] Speaker 2: All right.
[33:43] Speaker 5: Tzu-Jia, you've been writing a story about how there's still
[33:46] Speaker 5: a lot of consumer spending going on. I mean, this
[33:48] Speaker 5: is a nation of consumers, but people are starting to
[33:51] Speaker 5: feel bad. They're starting to feel guilty when they spend
[33:53] Speaker 5: money on things that are fun. What happened to treat yourself?
[33:56] Speaker 3: Yeah. So the new research by Allied Bank actually shows
[33:59] Speaker 3: that 72% of Americans feel guilty about spending money on joy,
[34:05] Speaker 3: things that bring them happiness, even when they can afford it.
[34:08] Speaker 3: I think that disconnect is really interesting because being able
[34:12] Speaker 3: to spend money on something doesn't mean that they have.
[34:14] Speaker 1: To feel comfortable about doing it.
[34:17] Speaker 3: And of course, there's this deeply ingrained money belief that
[34:21] Speaker 3: if you're saving, you're being responsible about your future. And
[34:25] Speaker 3: if you're spending, something needs to be really well justified.
[34:29] Speaker 3: But it's also happening at a time of when we
[34:32] Speaker 3: have a lot of anxiety about cost of living rising,
[34:36] Speaker 3: about unaffordable housing, and uncertainty about economics in the economic
[34:42] Speaker 3: future in America.
[34:43] Speaker 5: Yeah, it's certainly a sharp turn from the YOLO days
[34:46] Speaker 5: after the pandemic when everyone was going out and living
[34:48] Speaker 5: their best lives and traveling everywhere. How does it break
[34:52] Speaker 5: down in terms of demographics? Are young people more susceptible
[34:55] Speaker 5: to this than, say, the retirees, the boomers?
[34:58] Speaker 3: So older Americans, like baby boomers and older, they feel
[35:03] Speaker 3: slightly more comfortable about spending, but they're still very conscious
[35:07] Speaker 3: about spending. what they're spending money on. Especially right now,
[35:11] Speaker 3: I feel like a lot of people, even the older Americans,
[35:13] Speaker 3: they have anxiety about retiring with a regular paycheck, so
[35:19] Speaker 3: they are maybe just slightly more comfortable, and the younger
[35:23] Speaker 3: adults are definitely more conscious.
[35:26] Speaker 5: So people will spend money, but they just go through
[35:28] Speaker 5: a lot of internal debate and stress that goes along
[35:30] Speaker 5: with it.
[35:31] Speaker 1: Does travel get caught up in this?
[35:33] Speaker 5: Because for so long, people were saying they will bypass
[35:35] Speaker 5: the small treats, but they will put their.
[35:37] Speaker 1: Money into experiences like travel. Actually, yeah.
[35:41] Speaker 3: We talked to a few people in planning their travels,
[35:45] Speaker 3: planning their leisures, and they mentioned that traveling and having
[35:48] Speaker 3: that experience that they think is really worth it It's
[35:51] Speaker 3: probably better than maybe just spending money on a weekend out,
[35:55] Speaker 3: on a night out, having dinner. I think people, the
[36:00] Speaker 3: trick that they use is that they plan out a
[36:02] Speaker 3: budget each month so that they have a designated money
[36:06] Speaker 3: in their savings or in their portfolio that's for fun
[36:11] Speaker 3: specifically so that they feel a bit less guilty about it.
[36:14] Speaker 1: The fun bucket.
[36:15] Speaker 5: It just depends how much money you put in that
[36:17] Speaker 5: fun bucket. For some people, fun involves going to the
[36:19] Speaker 5: bookstore and buying books. I think Tom is in that category.
[36:22] Speaker 5: So we want to get to our book picks. And
[36:24] Speaker 5: because Tom's not here, I'm going to introduce his pick.
[36:27] Speaker 5: He's out in Jackson Hole, Wyoming. So he picked something
[36:29] Speaker 5: that was appropriate for that. It is, get this, back
[36:32] Speaker 5: of country bear basics. The Definitive Guide to Avoiding Unpleasant Encounters.
[36:37] Speaker 5: No word from him on whether he encountered any grizzly
[36:40] Speaker 5: and black bears, but nevertheless, that's Tom's book that he's
[36:43] Speaker 5: reading this week. My pick for this week is Prairie
[36:46] Speaker 5: Fires by Caroline Frazier. It's a biography of Laura Ingalls Wilder.
[36:50] Speaker 5: I don't know if you guys know her, the author
[36:52] Speaker 5: of the Little House.
[36:53] Speaker 1: On the Prairie books.
[36:54] Speaker 8: Anyone?
[36:54] Speaker 3: Anyone?
[36:54] Speaker 1: A little bit. A little bit.
[36:57] Speaker 3: Okay.
[36:58] Speaker 1: I was a big fan of the books.
[36:59] Speaker 5: I watched the TV show portrayed by Michael Landon, produced
[37:02] Speaker 5: by him. And so, of course, I watched the reboot
[37:03] Speaker 5: on Netflix where an Aussie actor portrays Pa. Basically, this
[37:07] Speaker 5: book tells the bigger story of what was happening in
[37:09] Speaker 5: the country as Laura and her family were traveling from
[37:13] Speaker 5: Wisconsin by wagon to Kansas, to Minnesota, and to the Dakotas.
[37:17] Speaker 5: And it turns out in real life, when you look
[37:19] Speaker 5: at the history behind it, which the author does, The Ingalls'
[37:22] Speaker 5: life on the prairie was painfully hard.
[37:24] Speaker 1: It was a constant struggle. The family was impoverished.
[37:26] Speaker 5: They were perpetually in debt, perpetually hungry, and not at
[37:29] Speaker 5: all like the books and the TV shows depicted. So
[37:32] Speaker 5: there's very little good vibes going on there on the prairie.
[37:34] Speaker 1: What was your book?
[37:37] Speaker 10: I promised I would bring a summer-themed book, and this
[37:41] Speaker 10: is going to be a little bit hard to make
[37:42] Speaker 10: the connection, but I will explain. It's fixed, why personal
[37:45] Speaker 10: finance is broken and how to fix it.
[37:47] Speaker 1: This is what you're reading in the summer, Sarah.
[37:49] Speaker 10: It's really, you know, I always feel kind of internal
[37:52] Speaker 10: guilt because I take a lot of vacations in the summer,
[37:55] Speaker 10: and I always use points and miles to pay for them.
[37:58] Speaker 10: I haven't paid for a vacation in four years just
[38:00] Speaker 10: because of my own spending on credit cards. I've got
[38:02] Speaker 10: to see your spreadsheet on this. But it also kind
[38:04] Speaker 10: of weighs on me because I know that a lot
[38:07] Speaker 10: of the points and miles that I'm rewarded with are
[38:10] Speaker 10: financed through the credit card companies from people who are
[38:13] Speaker 10: in debt. And it's just one of these ways that
[38:15] Speaker 10: I think a lot of disproportionately lower income households sometimes
[38:19] Speaker 10: don't reap the benefits of our personal finances.
[38:21] Speaker 5: Yeah, it's a good way to understand how that whole
[38:23] Speaker 5: ecosystem works.
[38:24] Speaker 1: Zijia, you also have a book that you brought with you?
[38:26] Speaker 3: Yes, I brought The Trolls of Wall Street. It's actually
[38:30] Speaker 3: by our own editor, Nathaniel Popper.
[38:32] Speaker 1: Shout out.
[38:33] Speaker 3: It's because I spend so much time nowadays on Reddit,
[38:36] Speaker 3: just sliding into people's DMs. And some of the most
[38:39] Speaker 3: colorful stories for my stories came from Reddit. And this
[38:42] Speaker 3: book is actually about the subreddit community, WallStreetBets, which kind
[38:47] Speaker 3: of made a splash in 2021 during the GameStop trading frenzy.
[38:52] Speaker 3: And it's been really interesting seeing kind of like the
[38:55] Speaker 3: history and culture of it and the personalities and characters
[38:58] Speaker 3: in this community. And also right now, as this community
[39:02] Speaker 3: has evolved, how they are really savvy in trading now,
[39:06] Speaker 3: they're using AI technology to inform their own trading. their
[39:10] Speaker 3: relationship with Wall Street has also changed as well. No
[39:13] Speaker 3: one's calling them the dumb money anymore. No.
[39:15] Speaker 1: I think it's pretty safe to say. Zijia, thank you
[39:17] Speaker 1: so much.
[39:18] Speaker 5: Zijia Song and Sarah Foster from the Bloomberg Money team
[39:21] Speaker 5: joining us with their book selections for the week as well.
[39:24] Speaker 5: For the latest reviews and recommendations from Bloomberg, be sure
[39:27] Speaker 5: to subscribe to the On Books newsletter. You can subscribe
[39:31] Speaker 5: at Bloomberg.com slash newsletters. We're going to look ahead now
[39:34] Speaker 5: to what you can spend your money on for the weekend.
[39:36] Speaker 5: And joining us right now is Bloomberg This Weekend's Christina Ruffini.
[39:39] Speaker 1: She works all weekend.
[39:41] Speaker 5: Before we get to any of what's happening, you're going
[39:43] Speaker 5: to show us what you.
[39:44] Speaker 1: Spend your money on because Because that's what this show
[39:45] Speaker 1: is about.
[39:46] Speaker 2: Right.
[39:46] Speaker 8: Your producing team was like, what do you spend money on?
[39:48] Speaker 8: I was like, I am so cheap. I spend money
[39:50] Speaker 8: on nothing. And then I was like, wait, this is
[39:52] Speaker 8: not true. I have an extremely ridiculously expensive.
[39:56] Speaker 1: Pair of cowboy boots.
[39:57] Speaker 8: So I told them I would... I actually put pants
[39:59] Speaker 8: on because I had a skirt on and we thought
[40:01] Speaker 8: that would get us all fired. But here are my...
[40:04] Speaker 8: Here are my Frye boots. I bought them 10 years ago.
[40:08] Speaker 8: I think they were like on sale for $ 350.
[40:11] Speaker 1: I Googled them before I came.
[40:13] Speaker 8: They're now $ 500 for these Frye harness boots. They still
[40:16] Speaker 8: make them, but they look the same as the day
[40:18] Speaker 8: I bought them. I will never need another pair. And,
[40:20] Speaker 8: you know, I've worn them to floods. I've worn them
[40:23] Speaker 8: to Haiti. I've worn them to bars.
[40:26] Speaker 1: You know, cowboy boots.
[40:28] Speaker 5: Would these be boots that you would wear to Burning Man?
[40:30] Speaker 5: Because Burning Man begins this weekend.
[40:32] Speaker 8: Okay, I personally cannot think of something I would less
[40:36] Speaker 8: rather do than go to like.
[40:37] Speaker 1: But don't you feel appropriate to that? I think I could... Here,
[40:40] Speaker 1: I'll put them up here like this. I think I
[40:41] Speaker 1: could burn in these booths. I mean, have you been
[40:44] Speaker 1: a Burning Man? No, I'm not a burner, which I
[40:46] Speaker 1: just learned was a term. You could be a burner.
[40:48] Speaker 8: I don't know if they're crazy enough, but they do
[40:51] Speaker 8: work well in a desert climate. But I'm always surprised
[40:53] Speaker 8: by the people who are like secretly.
[40:55] Speaker 2: Going to Burning Man.
[40:56] Speaker 1: And apparently.
[40:57] Speaker 8: There's a big crew of them. There are now a
[40:58] Speaker 8: lot of tech pros going to Burning Man.
[41:00] Speaker 2: There are. Well, you know.
[41:02] Speaker 5: The finance bros will be going to the US Open,
[41:04] Speaker 5: which officially kicks off this weekend. Are you guys going
[41:06] Speaker 5: to be doing anything with that on Bloomberg this weekend?
[41:08] Speaker 8: I think we're working on it. We actually had the
[41:10] Speaker 8: head of IBM, they've launched their new app. He was
[41:12] Speaker 8: on last week talking about the app is now crazy
[41:14] Speaker 8: for the US Open. You can like clock people's shots
[41:17] Speaker 8: and it breaks it down with all this data. And
[41:20] Speaker 8: so we also had a professional tennis player on who
[41:21] Speaker 8: was saying the tennis players themselves don't really have the
[41:24] Speaker 8: capacity to use it, but the coaches are using it
[41:27] Speaker 8: to help guide the players, the serves, and things like that.
[41:29] Speaker 1: And it helps audience engagement is what they're trying to drive.
[41:31] Speaker 5: And final item, Coyote versus Acme hits the theaters.
[41:35] Speaker 1: This sounds like a fun one.
[41:37] Speaker 8: I think the drama about this is that they're making
[41:40] Speaker 8: the executive of the studio the villain for this because
[41:43] Speaker 8: they were going to shelf this movie and take the loss.
[41:46] Speaker 8: And Will Forte has been giving interviews saying Zaslav is
[41:49] Speaker 8: like the enemy for this movie because they had to
[41:51] Speaker 8: fight to get it released. But it's getting good reviews
[41:54] Speaker 8: and hopefully it'll be worth the push.
[41:55] Speaker 2: All right.
[41:56] Speaker 5: Look for that in your local movie theater. But it's
[41:58] Speaker 5: not a big studio release.
[41:59] Speaker 1: Christina, thank you so much. And make sure to watch.
[42:01] Speaker 5: Bloomberg This Weekend, every Saturday and Sunday morning, starting at
[42:04] Speaker 5: 7 a.m. That does it for Bloomberg Money This Week.
[42:07] Speaker 1: Enjoy your weekend. This is Bloomberg.
[42:19] Speaker 5: This is the Bloomberg Money Podcast, bringing you a smart
[42:22] Speaker 5: look at the forces shaping your financial life. I'm Scarlett
[42:25] Speaker 5: Fu with Tom Keen. You can watch the show live
[42:27] Speaker 5: on Bloomberg Television every Friday at noon Wall Street time.
[42:31] Speaker 5: Subscribe to the podcast on Apple, Spotify, or anywhere you listen.
[42:34] Speaker 5: And as always, on the Bloomberg Terminal and the Bloomberg
[42:37] Speaker 5: Business app.

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