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This is the Bloomberg Surveillance Podcast. I'm Jonathan Farrow, along with Lisa Abramowitz and Anne-Marie Hordern. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9 a.m. Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App.
The U.S. and China agreeing to a 90-day cooling-off period. The U.S. reducing its levies on Chinese imports from 145% to 30, while China cuts duties on U.S. goods from 125% to 10. Joining us now to discuss the Treasury Secretary Scott Besson, a driving force behind trade talks in Geneva over the weekend. Mr. Secretary, welcome back to Bloomberg Surveillance, sir. It's good to see you.
Good afternoon from Geneva, Jonathan. Great to catch up as always, sir. Let's get into these talks over the weekend. One standout line for me and for many others was the line that the differences between the two sides weren't as large as we thought they would be. What were those differences, sir, and why were they smaller than you expected?
Well, I think, Jonathan, what's important to know is for the tariff program, we had a plan, we had a process, but we did not have a mechanism for engaging with the Chinese. So China was the only country who escalated their tariffs in response to our reciprocal tariff level. So that resulted in an unfortunate escalation. So we now have a
a mechanism to deal with that. Neither side wants a generalized decoupling. The U.S. is going to do a strategic decoupling in terms of the
Items that we discovered during COVID were of national security interest, whether it's semiconductors, medicine, steel. So we still have generalized tariffs on some of those. But both sides agreed we do not want a generalized decoupling.
These things take time, as you know, sir. We've got 90 days now to work with. Last time around, it took 18 months to reach an agreement on purchase agreements. I think you yourself have said in the past that it can take two to three years to have a full comprehensive trade agreement with the country between the U.S. and China. What do you think is achievable, sir, over the next 90 days?
Well, Jonathan, we're going to see. But what has to happen is it has to be fair for the American people. But in January 2020, President Trump produced a template. We had an excellent trade agreement.
agreement with China and the Biden administration chose not to enforce it. The Chinese delegation basically told us that once President Biden came into office, they just ignored their obligations. So we all already have a large framework. The other thing to remember here, Jonathan, is that this is a pause down to 10%.
The April 2nd level for China is 34%. So we will be working to see where their final reciprocal number ends up.
And the negotiations are a combination of tariffs, non-tariff trade barriers, currency manipulation and subsidies of labor and capital. Just to build on that, as I listen to you, do you consider the new levels as a ceiling or a floor? Well, it's obvious it's obviously a floor that is.
They are now with everyone else who did not retaliate. So the levels have come down to the pause level. And what I would say is 34, which is their assigned April 2nd level, would be a ceiling, which is what I went out and told people on April 2nd, which is why I was surprised market participants panicked because we had capped. We had capped.
the upside for every country and if they didn't retaliate. So this unfortunate turn of events happened because of retaliation, but now we have a process in place to avoid escalation like that again. Secretary Besson, just to build on that, are you saying that tariff rates will only go up from here if this really is a floor of 10% on the Chinese side and 30% on the U.S. side?
I'm not saying that they're going to go up, but it would be implausible that they would go below 10. One thing that you've been talking about is a generalized decoupling as something that's not necessarily in the interest of either side, neither side wants that. What about a strategic decoupling? What is the appropriate rate of tariffs that could potentially cause some sort of strategic decoupling in the sectors that you are talking about?
Well, look, bringing back our strategic, our important strategic industries can be a result of tariffs, but it's also a result of national will. So this administration is running full speed to make sure that what we saw during COVID never happens again.
So it's a combination of, it can be tariffs, but again, it is the administration moving as quickly as possible to make sure that we are self-sufficient in the strategic industries. I think that's completely understandable from the United States side. And I wonder, Mr. Secretary, whether the Chinese understood that. Did you get the sense they do understand that that will be the road forward for the United States?
Well, I think they understand that. And I think they understand that we are focused on fair trade, that this gigantic
deficit that we have with them that it didn't happen last year, it didn't happen the year before, it's happened over decades and that this has to be remedied. The China shock gutted our manufacturing sector and we want to bring that back. On the other side, Party Chair Xi has said that he would like to increase consumption but
To date, the Chinese have just increased manufacturing. So we would like to see them increase consumption. We would like to see them open their market to American products. So there are two ways to rebalance. One is fewer Chinese goods in the U.S. market.
The other is more American goods in the Chinese market. And my guess is that the answer is somewhere in between. Some of this, of course, takes us back to the purchase agreements of the first term of the president. Is it different this time around? Is it as simple as just revisiting those purchase agreements? Or do you see additional sectors being targeted? Jonathan, I think everything's on the table, but the
the phase one purchase agreements is a very good roadmap because I will point out that during 2020, China met their obligations under that agreement. It was only under President Biden where they neglected them. So we are getting
We are starting there and look, the world has changed, products have changed, product mix has changed. So I think everything's on the table. But the main thing here is we have to have a fair deal for the American people and
Keep in mind, too, that we also have 20% fentanyl tariffs on. So for 2025, we have put on 30% tariffs. They have put on 10%. And my economic observation is that businesses just need time to calibrate, that we saw approximately 20% tariffs from President Trump's first term,
Business is calibrated. Supply chains moved. We have seen 20% tariffs President Trump put on in February due to the fentanyl crisis. Calibration, very little disruption. And now a 10% additional tariff should mean very little disruption.
Mr. Secretary, a lot of people are wondering what caused the softening in tone, the reason for both sides to come together and be able to have this kind of negotiation and chart a path forward where there will be further negotiations in the near term. What's your interpretation of what caused both sides to come to the table?
Well, I think that the two levels on the reciprocal tariffs, when they both ratcheted up to 125, caused the equivalent of an embargo. And that wasn't good for either side.
We're the deficit country, so less bad for us. But I think there is the unintended consequence of this very fast ratchet. And so now both sides are at 10. We will be moving forward with a 90-day pause. And the important thing to remember is we can always go back to the April 2nd level. But my sense is we had very good discussions. My counterpart
was very firm but very engaged. And I think we have set the stage for meaningful discussions. Mr. Secretary, is there already a scheduled date for Xi Jinping and President Trump to meet in person at any point in the near term? Do you think that that is something in the cards as part of these negotiations?
I think that there would be a phone call before a meeting and there's nothing on the calendar, but I could imagine that that could happen in the coming weeks or months. Going into the meeting, as you know, the president put out a social media post. He referred to you as Scotty B. I won't go there. We'll keep using Mr. Secretary. And he said you could go as low as 80. Can you share with us how we went from, say, 80 down to 30? Where did that number come from, sir?
I think that in the president's mind, 80 was a number that did not cause an embargo. So we could still be at 80 and have trade flowing, but we were able to both move down by 115%,
And Jonathan, I think the other important thing here is I think this is the first time that the Chinese have addressed one of the president's real priorities, which is ending this fentanyl crisis in the United States. So they brought their trade team and they brought a vice minister for state security who met with our national security team. It was a separate meeting and they had a very robust and detailed discussion on what
ways to stop the transport of precursor drugs from China to North America that ends up in the hands of the cartels that is then killing several hundred thousand Americans a year. So I'm very optimistic that President Trump
We have solved part of the fentanyl crisis by securing the border, and I think this is the next step on that. So if over the coming months we were to see excellent engagement from the Chinese and solutions towards solving the fentanyl crisis, I think we could see some amount of the fentanyl tariffs perhaps come off, but that is going to take actions from them. What kind of action specifically, sir?
Well, we can see where these precursor drugs are coming from. At Treasury, our financial criminal enforcement network has very good visibility into international finance. We can see these Chinese companies that are selling the equipment for making the pills, that
transferring the precursor drugs to the cartels. U.S. Treasury has declared the Mexican cartels foreign terrorist organizations. So working with Chinese leadership to stop this would be a very tangible symbol. In China, the narcotics distribution is punishable by death.
And we're not pushing for that necessarily, but we are pushing for very, very strict enforcement similar to what they do at home. Mr. Secretary, I imagine you're incredibly tired and a lot of people were very excited to see you taking the lead in these discussions, certainly in the market. Are you going to be taking the lead going forward with other difficult negotiations around the world with different trading partners?
I've been involved in most of the Asian negotiations. We had a very good negotiation with or we've had two rounds of negotiations with Japan. I've been involved with Korea. I've met
with Vietnam and also Indonesia. So my focus has been on the Asia region thus far. And then the trade team had a great victory with the UK.
putting together the contours of the first trade deal. The other thing I want to say too is my partner here in Geneva, Ambassador Greer, was an incredible asset. He has years of experience, a broad
and deep knowledge of trade negotiation, of the numbers and the nuance. And we would not be here today without Ambassador Greer. Mr. Secretary, just before you go, you've promised us a lot of time. We've used up most of it already. Just a final question. What does victory look like for you in six months' time when we get to year-end? And I know it's frustrated you that we've only been talking about trade, that we haven't focused on the full policy platform. Where do you want to be by year-end?
Well, look, Jonathan, this administration is doing peace deal, trade deal, tax deal. I try to stay mostly, as you know, in my econ lane. So from that lane...
Victory, to me, looks like the three-legged stool that really are the three parts of our program really kicking in. So we will have most of the trade and tariffs settled.
The tax bill is moving along very well, better than I could have imagined. Speaker Johnson, Leader Thune are doing an incredible job with President Trump's leadership, so we will have tax done. And then the final piece that is longer lagged, but perhaps the most important, is deregulation.
And deregulation, we are deregulating across all industries every day. President Trump is committed to, for every new regulation, 10 comes off the books. And deregulation should start kicking in in the third and the fourth quarters. So tax...
trade and deregulation all coming together at the end of the year, I think it's going to be very powerful for President Trump's economic agenda. Mr. Treasury Secretary Scott Besson, we appreciate your time, sir. From Geneva, very generous with your time. Thanks for being with us right here.
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You'll love the presentations you can easily design with Canva. Your clients and coworkers will too. Love your work with Canva presentations at canva.com. Mira Pandit of J.P. Morgan writing, we do not want to be lured into a false sense of security. While the volatility we saw in April may have been the high watermark, that doesn't mean volatility is behind us altogether. Mira joins us now for more. Mira, good morning. Good morning. Have we put all the bad news behind us?
Not necessarily. What we have to be mindful of is volatility and the nature of it. It comes and goes. And while we have another recalibration moment, we had April 2nd announcement of tariffs. We had April 9th pause on tariffs. Now we have a big reduction for a period of time in the Chinese tariff rate.
But there are still risks ahead. We have to continue to follow the ebb and flow of trade optimism, trade disappointment. And there's also a distinction here between when the market stops caring, but the economy is still going to care. Think about Brexit. You know, we're 10 years on almost from Brexit, and it's undoubtedly
still an impact on the economy there, even though it's not showing up in markets on a day-to-day basis. So this is the squaring of the circle that we're going to have to go through over the next couple of years, because having a 2% average import goods tariff rate last year to something probably still in the double digits when all of the dust settles is going to have that longer-term pass-through to the economy. And that means where the economy and markets meet is around profitability. Before we get into the next couple of years, can we deal with the next couple of months?
How will you digest the incoming information? What will you ignore? What will you choose to put some weight on? What I want to choose to put weight on the most is how our price is impacted. Because as I mentioned, the link between markets and the economy in the long run is
is gonna be the profit picture here, and profits are really going to determine how well stocks can do. Because ultimately, we're already in an environment where valuations are still, compared to their long-term averages, 20% higher than they perhaps should be on an average basis. And so when we think about what underpins that, we have to see that profitability. Now, we have to recalibrate a little bit around
economic growth expectations. We were at a 50/50 recession probability coming into this, perhaps now that is skewed towards slower growth as opposed to definitive mild recession. So in that case, still slowing growth means slowing profit growth. How do we continue to see profits playing out this year? What are the risks from tariffs? Will you have potential revenue slowdown? How much?
you have potential pricing increases, how much gets passed on to an exhausted consumer versus how much get absorbed by historically very high margins. And then you think about even the structures within the S&P 500, could areas like the Mag 7 be a saving grace this year as some of those areas are more resilient and we see yet
another delay in terms of broadening out of profits. There are so many angles to this tariff and non-tariff as we reconsider what this pause means. I can feel a bit of frustration, if not for you, for me. I was reading your notes and you were talking about a 50-50 recession call. And I was going to ask you about that. You already brought it up and said probably it skewed more against recession than for recession. But how do you switch your views so quickly, right? I mean, we're going to see just
a complete downgrade of the potential for recession risk across Wall Street if these new rates of tariffs stick? You have to think about scenarios, and certainly in this environment, extreme scenarios. What if tariffs come off altogether? What if we go right back to where we were April 2nd? Where do we land in between? And clearly we're probably going to be somewhere in between, and that in between is so hard to figure out when we think, okay, look at what's going on
what's going on with yields, for example. You're seeing yields start to perk back up. If one of the factors that's been weighing on yields has been lower growth and all of a sudden that is potentially alleviated to some extent, then you have yields moving in a different direction here. I mean, everything in the market, whether it's equities or fixed income, has been so sentiment-driven this year, it's really hard to ground yourself.
It's trade fears versus trade optimism, and you're switching back and forth. So we are trying to figure out where to ground ourselves in the in-between state, which we're likely going to end up in. Where is that place? Is that gold? Well, not necessarily. I mean, when I think about portfolio positioning, in a way, that's what's changed the least because of some of the starting points that we're dealing with. I mean, there's still definitely two-sided risks to bond here when we think about maybe you don't see so much of a growth slowdown, so there's a lot
in terms of term premium that could potentially be pushed up when we think about uncertainty. On the other hand, when you think about the basic dynamics of if we were to see on the ag bond index a 1% rise in rates, certainly not what we expect, you'd be looking at a sell-off of about 1.5% over total return a year in your bond allocation. So you're still actually looking at somewhat of a contained impact there. And despite overall yields biased upwards, you've actually seen that most areas of the bond market have been positive.
On the other hand, a 1% fall in rates, not something we expect either, would give you about an 11% return given that income cushion. So being broadly diversified within fixed income has worked. I think it will continue to work. And on the equity side, you're still dealing with high starting valuations and growth. We want to make sure we're geared towards some of the areas that have been a bit more favorable, whether it's value outperforming growth about 6% this year or international outperforming 14% in dollar terms this year. None of that
really changes despite the 30%, 80%, 50% tariff rates. You're getting to something really important, something that John and I were discussing earlier this morning about how much structurally there has been a loss of dollar exceptionalism and a loss of haven status. The shift to Europe has been something more sustainable and not just a knee-jerk reaction that was a positioning squeeze. You're saying on one hand maybe a little, but not necessarily wholesale when it comes to the loss of treasuries as a haven status.
How do you sort of understand what has changed since April 2nd? I think what has changed is certainly that uncertainty level where when there is uncertainty, people want to go to treasuries. And more recently, when there is uncertainty, people don't because a lot of that uncertainty is emanating from the U.S. I think it's also just the compounding effect over time of having unsustainable debt and deficits and that really starting to feed into the bond market given higher rates and the cost of servicing debt overall. These things, putting that up
pressure on yields and I think that people are putting a microscope to some of those elements because it doesn't feel like we're in an environment where some of that direction of travel is going to be for a more grounded place. This comes to scarring. How much scarring will we see post April 2nd even if we do secure some major deals in the coming weeks?
There are some things you can't unsay. I think that's going to be the theme for the rest of the year, where even if you do come up with a number of trade deals or more likely frameworks for longer term deals, there's always that possibility that things can potentially come back around. And so there is that scarring there where if you're a business, you're seeing a lot of buybacks.
hey, what's the best use of my money right now? Let me just double down on my company while prices have gone down as opposed to put forth money for future investments. So maybe it's less about people changing their plans, but just putting their plans on hold. And in some ways, over time, that can be equally damaging. Murrah Pandit of J.P. Morgan Asset Management.
Seth Carpenter of Morgan Stanley joins us around the table. Seth, good morning to you, sir. Hey, Jonathan. How are you? Quick thought exercise. I'm okay. If the Federal Reserve knew what they knew this morning, would they have changed the statement in the way they did last Wednesday?
I don't think they would have. Look, where are we right now? We're going to get a CPI report tomorrow and it's going to be pre-tariff for the most part, maybe a little bit in autos, but essentially that's also going to be pre-tariff. And they're going to want to look at that to see, are they learning anything on inflation? And so what they said at the last meeting was there's uncertainty. There's uncertainty on the inflation side. There's uncertainty on the growth side. Does the news that we've got in the past 24 hours change that?
I'm not really convinced that it makes a massive difference because the announcement was that tariffs will come down from the peak, still be above where they were at the beginning of the year. And I think we have seen a few times in the past few weeks, times where one announcement gets made and then it's reversed 24 hours, 48 hours later. I'll believe this is real when I've seen it in place for a while and it actually starts to affect the trade flows. Your assessment of the risk, though, for inflation for growth?
Are they still tilted to the downside for growth and tilted to the upside for inflation? Unquestionably. So we do still, no matter how you slice it, have higher tariffs this year than we had coming into the year. And so that's got to push up inflation. Now, in 2017, 2018, 2019, I said, much like what you've heard from Powell, the inflation side of things from tariffs likely to be
temporary, might even use the word transitory if it hadn't become taboo. That's still very likely to be the case. However, now versus then, we have lived through years of higher inflation and it's not at all clear where businesses and households' minds are for how inflation dynamics get going. So I think there is still upside risk to inflation.
The downside, businesses that plan, businesses that are going to undertake investment spending, businesses that are going to make hiring plans would like to have some certainty and we have none of that. And again, just because there was a statement that there was a plan to make a plan to have a deal,
does not take away that uncertainty. So again, the risk to the downside and growth, I think, is real and present danger. A number of guests have come on the show this morning and said that at the very least, it does make recession look more like a remote possibility rather than a 50-50 type of possibility. Do you agree with that? So I think it probably has to lower the probability. Remote seems a little bit optimistic. Again, how much of an effect does the overall
uncertainty affect business spending? I think I know pretty clearly what the direction is. I don't think I have any conviction. I know exactly what the magnitude is. And so to be able to say it's going to slow things down a little bit, but not so much to tip us over, that's our baseline view. Don't get me wrong. I just don't know how you have conviction there to call it remote.
It sort of raises the point of the Fed's reaction function. It's something that's interesting when you look at Fed Funds futures this morning. You're only seeing two rate cuts getting priced into the market from four last week. It highlights this idea that without some sort of rapid deterioration akin to a recession, you're not going to see that rapid response from the Fed that could be 125 basis points of rate cuts like Citi's Andrew Hollenhorst has called for.
How much do you take signal versus noise from the market's reaction? Would you agree with the current assessment? I would not, in fact. We've been far, far, far out of alignment with the market pricing has been. We have said even when, even before this announcement about the possible de-escalation on tariffs, we had said the market calling for three or maybe four rate cuts this year was overdone. We don't have any cuts in our forecast for this year. The market's coming towards us, which is always a comfortable place to be. But the Fed's got a really tricky challenge.
Tariffs, even if it's at a lower level of tariffs, they will push up inflation and that probably happens faster than any hit to growth that we're going to see in the hard data, which is where the Fed is really living. And so what does that mean? They have to watch things come in and they can't take anything for granted.
We often cite you, you and Mike Gaipin, because you are at zero, zero cuts for 2025. And because we're both tall and good looking. Of course, that's it. That's why I do it. Andrew Honhorst at Citi, another tall and good looking gentleman, is at 125 basis points of cuts for 2025. And we've said repeatedly, you can drive a truck through those estimates. They believe the labor market weakens in the coming months. What gives you the confidence that it won't?
I think a few things. One, the U.S. economy tends not to shift quite so dramatically. We do have a big slowdown in our forecast for the next several months. So I think that in that regard it's likely to happen. But the first thing you need to see is businesses pull way back on the hiring and then you're likely to see businesses start the firing process. And you need both of those to happen first before the Fed can go into a full-fledged cutting cycle. Very difficult to see they get there to get that amount of cutting this year. Seth?
It's good to see you, sir. Thanks for dropping by. Thank you. The tall and good-looking Seth Carpenter there of Morgan Stanley.
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Russ Kostrick of BlackRock writing the following. The stabilization in equities and other risky assets makes sense based on A, some progress in trade negotiations and B, generally supportive economic data and earnings. Russ Kostrick of BlackRock joins us now for more. Russ, we've got this odd tug of war, this short-term reaction to the progress we're making in trade talks, real progress between the US and China, and then long-term, just realizing the tariffs are higher now than they were at the start of the year,
and that could be disruptive for growth in the future. How do you weight one versus the other? - Well, good morning, Jonathan. You know, it's funny, whatever you write two, three days ago probably is stale.
you know, given the pace at which headlines are coming out. But I think you're right. I think we are in a tug of war. Obviously, this morning, we got some very good news. It reduces the risk that we're going to see a serious economic contraction. It reduces some of the uncertainty. It reduces some of that left tail. Having said that, we still have to contend with a few things, one of which is there's still uncertainty. The second of which is how much did the previous disruption
hurt economic activity, whether it was at the consumer level or at the corporate level. And third, and again, valuations are not the best short-term timing tool, dealing with the fact that even with the pullback we had earlier in the year, S&P is back to trading at 21 times future earnings. That's a big number given all the other things going on. So I do think it's a tug of war. I think we're still in a range, although that range is probably higher on the upside and lower on the downside than it was on Friday.
Did we learn anything, Russ, that makes you materially change your allocation given some of the uncertainty that remains out there?
I don't think we would change our allocation. A lot of the themes we were thinking about on Friday are still in place. You know, one of the things that we were looking at that I do think is going to probably work in the back half of the year. We had that big rotation earlier in 2025. Everyone piled into defensive parts of the market, whether it was staples, utilities. I don't think that was right. And that really made sense only if you expected recessions.
The extent the odds of that are lower, we're probably going to muddle along with the economy. I do think some of the large mega cap tech names that struggled earlier in the year can actually do well in an environment in which growth is OK, rates are contained. And many of these big things that we're all talking about back in twenty twenty four.
They're still very much in place. So that's one area of the market I do think is a place to be in the back half of the year. It looks like a lot of people agree with you, Russ, because it looks like we're entering something of a bull market in big tech, possibly up 20 percent from the trough on April 8th. So you can see this kind of knee jerk reaction when you take a look at what's changed, what's not back to that pre-April 2nd relationship of markets. It's the dollar.
The dollar is still not completely back to where it was, and it raises a question, has anything materially changed since Liberation Day, given the fact that we are seeing a walking back of a lot of those tariffs? How much is the dollar fundamentally and structurally in a different place today than April 2nd, even with some of the ratcheting back of tensions?
Well, I think there's definitely more uncertainty. And you've got to ask the question, are we going to see some diversification out of dollar-based assets from international investors? And I think that's still very much an open question, given the fact that trade is going to look different going forward than it did, you know, two, three, five, ten years ago. Having said that, you know, it's interesting. There's been a lot of agonizing about the dollar. And I think that's right.
But having said that, the dollar's basically been in a range mostly between about 100 and 110 in the DXY. It was down at the lows around 11, 12%. We had seen similar pullbacks in the last five years, even without these generational or potentially generational shifts in trade. So I think the the
outcome on the dollar is still very much a question mark. We may not know that for a period of time as we start to see how international investors really are behaving. Russ, in some ways, it's part of the same question. How to manage your exposure to U.S. Treasuries? What have you and the team done? Has anything changed for you guys over the past few weeks? And would it flip back based on the discussions we heard over the weekend?
So, you know, Jonathan, it's really interesting. Our duration position has not changed much this year, despite all of the volatility. We've been slightly underweight our benchmark in duration. Most of that is on the long end of the curve. As we've spoken about in the past, we do like credit.
And I think that's still probably about right. We've seen that back up in yields this morning. So I think right now, as of now, that positioning seems to be about where we want to be. But it's worth keeping in mind, even before we started talking about the dollar and we started talking about whether or not international investors would abandon the dollar, there were those concerns about supply, that concern about the deficit, about whether or not that was going to have some negative impact on the long end of the curve through the term premium.
Those concerns are still there. So I do think while we are closer to benchmark, a little bit of an underweight on the long end probably still makes sense. Those concerns, Russ, as you know, are pretty durable. They're not going anywhere. The big question was whether international investors would be willing to finance that deficit or whether we would need one or the other or a combination of the two, which is a weaker dollar or higher bond yields. Do you think we've settled some of those issues or do they remain as well?
I think they remain. I think it's certainly too early to declare all clear. And I think a little bit of caution, particularly given the fact that we do have those structural deficits. You're exactly right. And the term premium is not so high that you're being generously compensated to go out on the curve and take that risk.
The other point is, do you really need to? Rick Reeder has spoken about this on many occasions. If you have an environment where credit spreads are maybe not great, but the absolute yield you can generate on a high-quality credit portfolio is 6% or 7%, do you really need to take a risk going out to 10-year on the U.S. Treasury? Maybe not. Hey, Russ, appreciate your time. As always, it's going to be another busy week. Russ Kostrick there of BlackRock. Russ, thank you.
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