Asks about concern over recent softening in US labor market numbers.
Westin
Steven Rattner
Acknowledges labor market softening over the past year, with lower job creation and rising unemployment, but notes strong GDP growth remains.
Asks if strong GDP growth with weak job creation signals a shift in productivity.
Westin
Steven Rattner
Confirms it means productivity increase, which is good for prosperity. Attributes disconnect to companies battening down hatches due to tariff uncertainty and post-COVID hiring overcorrection.
Asks if tariffs ironically help productivity but hurt jobs.
Westin
Steven Rattner
Agrees: tariffs force cost-cutting, including jobs.
Asks about implications of job growth being concentrated only in healthcare.
Westin
Steven Rattner
Notes manufacturing jobs are down. Healthcare jobs are good but don't produce goods; desires more balanced job creation across sectors.
Asks about immigration's impact on labor market.
Westin
Steven Rattner
Contrarian view: lack of immigration not the main issue; points to falling labor force participation, job openings, and rising unemployment as signs of a loose job market.
Asks if AI is a factor in job market.
Westin
Steven Rattner
AI not causing current manufacturing job losses but has an 'anticipatory effect' reducing hiring plans in engineering and financial services.
Asks how labor market affects his portfolio positioning.
Westin
Steven Rattner
Labor market itself not a direct issue. Worries about overall market if rising unemployment and inflation coincide (stagflation), which is bad for markets and the Fed. Software sector particularly perilous due to AI effect.
Asks what can be done to avoid stagflation risk.
Westin
Steven Rattner
Getting rid of tariffs would be a good start to reduce business costs and price pressures. Long-run solutions include deregulation and more competition.
Asks what this means for the Fed and how they address growth, softening labor, and inflation concerns.
Westin
Steven Rattner
It's tough for the Fed with its dual mandate. Anticipation of rate cuts has dropped due to war and oil price inflation. Highly unlikely they raise rates. Expected cuts may be reduced from two to one, or possibly none.
Asks about nervousness in private credit markets, especially related to AI investment.
Westin
Steven Rattner
Expects some pain, particularly in ARR loans to software companies, but doesn't worry too much as system is less leveraged than in 2007-08.
Asks about reliability of risk data for unmarked private investments and China data.
Westin
Steven Rattner
Acknowledges uncertainty but relies on quarterly marks, financial statements, and careful company monitoring.
Asks if war with Iran teaches anything about safe havens, noting Treasuries sold off while dollar rallied.
Westin
Steven Rattner
Dollar is a safe haven. Treasuries are more complicated because war creates inflation, which is bad for Treasuries. Notes oddity of strong gold/silver (indicators of fear) alongside stable stock market.