Treasury Secretary Janet Yellen, AI, shipping woes, & more: Best of Asking for a Trend

In this episode of the Best of Asking for a Trend, Yahoo Finance's Josh Lipton sat down with executives and experts in fields including freight shipping, artificial intelligence, politics, and autonomous trucking.

Guests include US Treasury Secretary Janet Yellen, FreightWaves founder and CEO Craig Fuller, Lightspeed (LSPD) CEO Dax Dasilva, Foundry founder and CEO Jared Quincy Davis, Veda Partners managing partner and director of economic policy Henrietta Treyz, and Waabi Founder and CEO Raquel Urtasun.

For more expert insight and the latest market action, click here.

This post was written by Mariela Rosales.

Video transcript

Welcome to Best of asking for a trend.

This show recaps and highlights today's trends that will shape tomorrow's market.

We understand that with so many trends influencing the market and so little time to grasp them all, it can be difficult to digest.

That's why we dive deep into the trends.

So you don't have to.

Here are the key trends.

You should keep an eye out for housing affordability has become a major issue for Americans in this country.

You're here today in Minneapolis, announcing new initiatives on housing affordability including a brand new treasury program that would allocate $100 billion over three years to help finance housing affordability.

How quickly can Americans expect relief from these programs?

Well, these are things that are in our power now with the tools we have that I think will be helpful, but I don't wanna say that there's a silver bullet.

Um I think we look to Congress to do much more.

Uh President Biden has proposed a program that would lead to the construction of 2 million um new housing units which um it would really make a sizable dent in the problem that we face.

But we wanna use every tool that we have.

And today we announced, as you said, $100 million from um returns on investments that we've making in community development, financial institutions over the next three years.

And that can make a noticeable difference.

We're also calling on the federal home loan banks which were chartered to uh deal with housing and promote affordable housing to up their uh contributions, their use of their income to 20% of their income.

Um To help with the affordable housing situation, we made a few additional announcements today, things we can do to lower burden in one of our key housing programs of the Magnet Fund and also um to help housing agencies, local housing agencies have access to um reasonable low quality low cost financing through the Federal Financing bank.

It's not just low income Americans though that are grappling with housing affordability.

It's the middle class.

So why not offer tax incentives to try to increase housing supply on the market whether for home builders or investors who bought up so many of the foreclosures following the financial crisis?

Well, we agree with that.

The most important tax incentive that we have.

It's the most important affordable housing program is the low income housing tax credit.

And there is a bipartisan bill that passed the house that we're supported of would love to see the Senate vote on it.

That would increase the supply of these um housing tax credits and boost affordable uh housing.

So uh President Biden has also proposed a tax rebate for first time home buyers.

And interestingly also um for sellers of homes, many of whom have seen such a big increase in mortgage rates, they took out their own mortgages when rates were much lower.

They have a reason to move.

But um having to re having to buy a new house at current mortgage rates would really boost their housing costs.

They're reluctant to move and not much um housing goes on the market these days.

And this would be a credit also that goes to sellers that would help unlock the housing market secretary Yellen.

Have you been to the grocery store lately?

I have every week.

It's sticker shock, isn't it?

Just when you look at shipping costs, those have come down, global food commodity prices have also come down, but food prices still remain high.

I know they're not rising at the rate that they were last year, but they're still up 20% from PRE COVID.

So, should the US invest in agriculture to boost the food supply in this country?

Well, I think largely reflects cost increases including labor cost increases that um firms um grocery firms have experienced although there may be some increases in margins.

Um uh earlier today, um I met with a group of CEO S including the CEO of Target and um they explained and they've announced that uh they understand that households are struggling with uh costs including food costs and they've um undertaken uh cuts in the price of bread, milk, uh diapers, other um core purchases that are necessities for households.

And I think that's to be applauded.

I think it's, that kind of thing is helpful.

Um But uh I'm would be reluctant to agree that we should be involved in subsidizing.

So interesting in agriculture, I want to ask you about your overall outlook for inflation looked like it was stalling in the first quarter.

We've gotten some better readings here in the second quarter, namely that uh cooler May CP I read and we've got another inflation reading coming on Friday.

Do you expect inflation will fall at a faster rate as we go through the summer months and the rest of the year or is it going to continue to be sort of a, a slower slog?

Well, I do expect inflation to come down and as we get into next year, I believe that inflation will uh go back to uh the Fed's 2% target.

But um there's month to month variation and um one of the pieces that has been keeping inflation above the Fed's target is housing costs.

Um The prices re rental prices for new apartments have stabilized and in many parts of the country come down.

But people who have existing contracts really only see changes in their rental prices when their contracts renew and there has been a considerable run up since before the pandemic.

So it takes a while before.

Uh people who have existing rental contracts see current costs fully priced in and that's been holding um housing cost increases above normal levels.

I'm I feel pretty confident that that is something that will come down over the next year and keep moving inflation down and labor markets while very strong nationally are a little bit less tight than they were uh right in the aftermath of the pandemic.

So given your outlook for inflation, you say you do expect we'll hit 2% by next year.

And the fact that Americans are grappling with high home costs, part of that is mortgage rates near 40 year highs.

When do you think Americans could see interest rates come down?

Well, I'm not going to speculate on what um the fed is gonna deem appropriate.

They set interest rates in order to make sure inflation comes down, but also to um keep the economy uh operating near full employment and their projections suggest that most members of the committee um envision that there will be some interest rate cuts later this year or next year.

But it's um really depends on how the data unfolds with respect to the economy.

If rates are held at current levels through December, do we risk sowing the seeds of recession?

Well, that's something that the fed will be looking at.

As I said, the fed wants inflation to come down and they've made clear that when they gain confidence that we're on a stable downward trend that they think it will be appropriate to cut rates, they certainly don't want to cause a recession when it's unnecessary.

And that's the balancing act and you don't think a recession is in sight right now.

I think we've got a good, strong economy growth is, you know, we grew very rapidly after the pandemic, unemployment was very high, rapid growth was needed and appropriate to get people back to work.

Um Once you have an economy with a, an unemployment rate that's 4% or below, which is what we've had for, you know, well, over uh a year, two years, I mean, this is a 50 year a record in terms of the strength of the labor market, you expect somewhat slower growth in the economy.

But um households consumer spending remains healthy.

Investment's been strong.

I don't see the basis really for a recession in the outlook.

I want to ask you about the congressional budget office, latest estimate for the deficit.

They now say it's going to rise by 400 billion more than thought to nearly two trill this year.

Given the cbo's latest estimate and the amount of treasuries that are needed to fund the deficit.

How much longer can the treasury maintain the strategy of financing using shorter term bills without changing the long end?

Is it a bit lopsided?

Well, so it isn't the treasury's strategy to finance increases in the deficit um or in debt issuance by using just short term uh bills, um long term issuance is increased.

And if deficit projections um continue to increase issuance at the long end will go up as well.

But the treasury follows an approach.

Uh It has for many years of making issuance of longer term debt regular and predictable.

And so it's not something that we want to suddenly change in a dramatic way.

So if there is a shock to the economy, for example, when um COVID hit the Cares Act and later, the A RP uh were passed, big increases in expenditure needed as a buffer.

What happens is the short short term debt, the market can absorb a lot of that and that's issued and then that debt is termed out over time and that's what we would, we would do.

But it's not a policy to just um finance by issuing at the short end.

Speaking of the CBO, they're projecting that debt will reach 100 and 22% of GDP by 2034.

Are we headed for a debt crisis?

That's if we don't have deficit reduction, but President Biden has already signed bills resulting in a trillion dollars of deficit reduction.

And his 2025 budget um proposes an additional $3 trillion of deficit reduction um over the next 10 years.

Um That's sufficient if you look at the budget projections to hold the debt to GDP ratio at more or less its current level, which is about 100% would prevent that big increase that you just mentioned.

So fiscal sustainability is important.

I think we need to get deficits down to stabilize the debt to GDP ratio.

Um I think the the most important metric in judging sustainability is the interest cost of the debt and the interest cost of the debt even with higher interest rates.

Is it normal historical levels?

It's, it's meant it's something that if it stays here, um if we engage in deficit reduction so that it stays at this level, I think we're on, we'll be on a fiscally sustainable course.

So, um you know, next year we're gonna see the expiration of many of the tax cuts that were built in to the tax cut and Jobs Act of 2017.

And we have to make sure that we address that exploration in a fiscally sustainable and responsible way.

President Biden wants to protect those earning under $400,000 let them keep the cuts, but he would raise um funds in order to find ways to cover that so that it's uh doesn't just bust the deficit to your point.

Secretary Ellen, what impact would Donald Trump have on our economy if he's elected?

Well, look, I'm governed by the Hatch Act and um I can't get into electoral politics.

Um I, I guess I could just make a couple of policy oriented comments, which is that the signature policy from the Trump years was the tax cut and Jobs Act and it promised an investment boom which really did not materialize.

It gave huge tax breaks to corporations and to wealthy individuals and it results in an enormous increase in the deficit and lowered tax revenues below historic norms.

And I think it's responsible um for many of the problems that we face now with the um our fiscal trajectory.

And so that would concern me to leave all of that in place.

I want to ask you about tariffs.

The administration levied new tariffs on $18 billion of Chinese imports back in May.

Does the administration think that tariffs could be a bigger tool in the toolbox when it comes to economic policy?

So we're trying to use them in a very targeted way.

Um We've made a conscious decision, not only the administration, but also Congress that there are industries that are strategic, that we think it's important to have a good base of activity in the United States.

And I'm thinking particularly of semiconductors and also clean energy related um items, whether it's electric vehicles, batteries, solar panels, um wind turbines at the moment, we are heavily, heavily dependent on China for most of these things.

And China is following a strategy in which they are heavily subsidizing their industry to build capacity and they've invested to the point of massive overcapacity.

So um China for example, has enough capacity to produce solar panels that it will exceeds entire global demand.

Um We have made, you know, we have incentives for domestic producers to um engage in this activity in the United States.

It's something we think is important for job creation and for our security supply chain resilience.

And so we wanna protect uh this aspect of um our industry from what really amounts to Chinese dumping.

So um that's an area where we think there's a clear justification for protecting our industry with tariffs.

And we're not the only country that feels that way.

Um Many European countries um and others, including developing countries are really suffering from this Chinese strategy of producing over capacity.

But President Biden is not proposing to put any broad based tariffs um in place.

Um doesn't see that as a strategy that's uh desirable.

And uh you know, with respect to China, he hasn't removed the tariffs that Trump put in place.

But aside from what I mentioned mentioned, these areas hasn't increased tariffs.

Secretary Yellen, we'll have to leave the conversation there, but thank you so much for your insight.

Hope to speak with you again soon.

My pleasure.

Thank you.

That's Secretary Janet Yellen of the Treasury.

I'll send it back to you in New York now, shipping rates just keep sailing higher shipping consultant, Drey's World Container Index rising 4% this week and is up more than 250% from a year ago since October escalating violence in the Red Sea has kept rates elevated and ships favor longer, less risky routes.

And joining me now to talk about all this is Craig Fuller founder and CEO of freight waves.

Craig, it is good to see you.

There.

There was an interesting article today.

Craig II.

I don't know if you saw it was in Barons just talking about this very topic and talk about how shipping rates have soared.

That according to the report, Craig sending goods around the world by ship is at least five times as expensive as it was last year.

Craig.

I mean that that stat just jumped out at me.

Help us explain that Craig, what, what is driving that?

Yeah, Josh, this is a a big topic in supply chain circles is what's happened in the ocean market really driven by two things.

One is import volumes are much higher than expected and continue uh to be incredibly robust.

It tells us that retailers are pretty confident about consumers in the second half as well as they are prepositioning products uh to prepare inventories, uh potential uh labor issues on the east coast, but also uh tariffs that may come with the new administration should, should we see a change in the election?

So that's one issue.

And the second issue is there is a little bit of, of, of because we've had geopolitical disruptions particularly with the Red Sea.

We've seen uh a risk premium put on it almost a war risk premium that the ocean shipping container lines are passing on to their customers.

So Craig just to dive into that age specifically.

So what you're suggesting is so because we have Houthis attacking these vessels, the vessels, Craig have to actually go around Africa.

They can't use that shorter red sea route.

And that, that's meaning increasing obviously time and costs.

Yeah, that, that takes capacity o off the market because if you think about it, the capacity constraint is how long it takes to ship from point A to point B.

And if having to add time, it just takes a lot of available days of capacity off the market.

And that's exactly what's happening.

But also I think the shipping container lines, I mean, they have a massive amount of market share.

The top 10 container lines had 90% of the market share uh share in containers.

And his historically have been bad at managing price and, and passing those uh some of their costs on to consumers and managing uh their ability to manage price.

Uh since COVID, they've gotten their act together and have been able to really uh uh have an enormous amount of pricing power over their customers.

And we're seeing that play out of the market right now.

Are there certain companies or certain sectors?

Craig that are gonna be more effective than others?

You know, is it car makers or apparel makers for example.

Yeah, most of what you see in containers is a consumer and retail centric.

So 75% of the imports that come in containers are actually consumer goods uh headed for retail.

So these are products that you would see at a big box retailer or potentially online ecommerce.

That's for the majority of products, containers.

The stuff that we typically think of as raw materials uh is not moving historically in containers, a lot of the raw materials move in bulk and that's like an entirely different market.

The good news about the fact that we're talking container specific is we're talking about one part of the economy which is consumer consumption uh and not really related to wholesale input costs.

So uh a lot of what you see in terms of the transportation cost and those retail goods, transportation is a relatively small piece of the actual cost of goods sold.

So consumers will not see an enormous impact in terms of, of inflation on what they actually buy or erosion of their pricing power uh versus what you would see uh if this was raw material input, input goods which tend to show up in all sorts of manufactured items.

Oh, interesting.

Uh and bottom line, you know, shipping rates.

Craig if I asked you to take out your, your crystal ball here, I mean, where do you see those headed?

Are we gonna stabilize here or do we keep moving higher?

Yeah, I think this is uh this is the time of the year of the next two months where we'll see peak activity, ocean shipping container, uh volumes drop precipitously in October.

So what you're seeing right now is really a preclude for what you'll see for the rest of the really rest of the shipping season.

Uh And so, um it is going to say pretty high, but like I said, I think consumers are not going to experience the level of uh price increases or inflation that they experienced back in COVID.

These rates are much lower even at $7000 a container.

It's much lower than it was during COVID when we were out to $20,000 a container.

So it won't be as significant.

And the most important thing that drove a lot of the inflation uh was really the lack of products that we saw during COVID and that's not happening right now.

There is no shortage of capacity to move transportation.

This is merely a pricing issue that uh retailers are having to contend with and their input costs.

But it's gonna be marginally impactful to consumers.

I want to get you out on this.

Craig.

It was just something you mentioned.

I want to come back to it in the US.

How there are apparently a strike by, by dock workers.

Craig could be coming, tell us about that and potential impacts.

Well, this, this happens every couple of years somewhere in the North America where we see the threat of strikes a couple of years ago, it was the, uh, west coast longshoremen.

Uh, that was a discussion.

They ended up not striking, they ended up having, uh, threatening to strike, but those issues were resolved.

Uh, we saw, uh, Vancouver and British Columbia, uh, dock workers, uh, did end up striking that, that did get resolved.

Uh, we're now seeing it play in the east coast.

So these things periodically uh pop up, we see shippers have become very accustomed to that.

These are companies that pay for shipping services have become very accustomed to these types of labor disruptions.

And so they will route products to different parts of the country.

So there is some good element of this is that this is the east coast and because it's the east coast and not the west coast is that most of the items we expect for retail tend to come through the west coast and less so on the east coast.

Uh So that uh shippers can plan accordingly and use other ports uh because they have the alternatives.

A west coast uh strikes would have been far more disruptive.

Craig, a big important topic.

Thanks for taking the time to walk us through it.

Appreciate it.

Thank you for having me.

Dining out is here to stay.

It's according to new research from Commerce Platform, light Speed, more than half of survey respondents said they plan to dine out at the same pace or more frequently over the next six months.

But value is now top of mind, light speeds.

CEO Dax de Silva joins me now, Dax, it is always good to see you.

Um So you guys did a, it was an interesting sounding survey.

You're trying to get a read here on dining trends.

So let's start there, Dax, what did you learn how dining trends been evolving?

So, Americans love dining out.

You know, our our restaurant software is installed in restaurants across Europe, Asia and North America and Americans are, are still dining out as you saw from that stat, 51% plan to increase their dining out in the next six months, but 81% are are dining out once a month or more right now and 39% once a week or more.

And so, uh you know, you just mentioned something about mcdonald's fast food has gotten more expensive.

Uh and so casual dining is becoming more popular because it's um it's competitive with uh with what fast food has become in terms of in terms of price.

So, uh there consumers are really looking for that value, uh you know, value for the dollar.

And how is this sort of, I was interested reading through the survey, Dax, how some of the knock on effects, for example, if people they still wanna eat out, but bottom line, they're looking to stretch that dollar, right?

Um How does it affect other things that might go on inside a restaurant?

For example, does that impact um how people think about tipping?

Oh, tipping, you know, I think consumers are reaching the tipping point a little bit on tipping.

There's a lot of pressure as you see, as you see from these stats here.

Um you know, there's a lot of pressure to tip.

58% are feeling that pressure, 44% say that um that inflation has affected their ability to tip.

But Americans are the most generous uh you know, across our survey compared to Europeans or, or um you know, folks in Asia uh Americans still tip uh close to 20% and a good percentage tip above 20%.

So even though Americans are feeling, you know, the pinch of, of inflation, uh the generosity is still there uh on the tipping side.

Now we, we've spoken another trend.

I wanna get your take on Dax.

You know, we have different restaurant CEO S come on Yahoo finance and often they'll talk about how enthusiastic they are about integrating technology into their restaurants in your survey.

What did you pick up there?

How do consumers actually feel about tech when they dine out?

Do they react positively to maybe this kind of innovation?

Well, of course, the one of the things that we surveyed uh was the QR code menu uh and that is not popular.

89% prefer a physical menu.

Uh, you could probably relate to that.

I, I per personally don't love it, but 34% a good third actually hate it.

Um So, you know, this was a COVID measure that kept us all safe during COVID.

But, uh, but folks prefer the physical menu when they go out.

Uh I think that, you know, restaurant tech is really helping the back end, uh, the back office of the restaurant, you know, be more efficient on food costs.

Uh helping also to facilitate, facilitate other things like delivery or pick up.

Uh So they consume can have the choice they want and how they get, how, how they receive their food.

Uh So, but the QR Code menu is uh is, is, is not the most popular.

II, I do get that.

I mean, believe me, Dax, when I go out, I, I do pre prefer that that kind of physical menu.

I am kinda curious though when sort of the reactions to the tech to the QR codes, did that, did that differ depending on the demographic?

Yeah, 8, 18 to 34 55% of 18 to 34 were affected.

Oh, sorry.

Yeah.

No, II I think definitely the older folks uh you know, um don't love the QR code menu.

Um those that are younger that are a little bit more adept to the tech are um OK with it.

Uh So I think it is a generational thing.

Uh I think everybody had to get used to it during the, during the pandemic.

But now that, that is subsided, you know, everyone is looking, uh, to enjoy the physical menu as a part of their, uh, uh, you know, restaurant, dining out experience.

And you got you all dax, you got, you got a ton of data over there.

I'm just curious, um, besides restaurants, any other big trends you're kind of picking up right now and in other sectors, other industries that you'd highlight.

Yeah, we're seeing in retail.

Um We're definitely seeing some of the outdoor uh verticals and retail start to pick up.

Uh you know, we, in our last quarter, we reported that, you know, home and garden, sporting goods, uh we're probably going to trend up uh and uh other, other um other verticals like clothing and so on would probably trend down uh as we approach summer.

So this is uh these are some of the things that we're seeing in retail verticals.

But when we report our export in August, we'll have more data on uh what we actually saw in the summer.

Uh We and how those verticals sort of fared uh as the weather and, and the the seasons have changed.

All right, Dax, it'll be a great time to get you right back on the show.

Thank you, sir.

Always good seeing you.

Good to see you.

Well, the boom in artificial intelligence setting off a race for compute NVIDIA alone, seeing data center revenue in the first quarter grow nearly 430% from last year.

With this comes the focus to demand expansion for graphics processing units.

And while supply has been a concern, our next guest points to other key factors to consider as well.

Foundry founder and Ceo Jared Quincy Davis joins us now with more Jared.

Good to see you.

Hey, great to see you, Josh.

So describing your company, Jar, I thought it was interesting.

I saw um I think it's actually one of your backers or investors kind of talk about like in this world of A I, they said um GP U is king, right?

And how they describe it is, is what you were all doing is sort of making technology to make that, that resource, that, that very scarce competing resource and more widely available.

Is that a good way to think about it?

Yeah, I think it's a phenomenal way to, to put it and part of the way we think about it is I think GP U is arguably one of the most important commodities in all of capitalism.

Now, everyone wants their hands on one, everyone wants their hands on one.

It's kind of one of the biggest areas of spend for basically every major company, you know, Google spends more on compute a compute specifically than they spend on people costs.

Now.

Um It's true for a lot of the major companies open.

I spends 4 to $5 very conservatively on compute.

For every dollar in people in typical start ups are spending 2 to $3 on compute now for every dollar in people.

So it's a major area of spend, you know, that being said, I think people still don't use the tips very, very well.

Um, there's actually a lot of things that you can do to map your workloads onto the chips a lot more efficiently and can get a lot.

So they're basically under utilized, right?

OK. Yeah, there's been a lot of talk of kind of GP U supply shortages and, but I'd argue that rather than an undersupply issue, we actually have more of an underutilization issue.

I mean, so part of what foundry does is we address that we manage our resources really well, we're kind of a scheduling company, so to speak what you're saying, sounds simple.

But I'm guessing actually the technology is pretty complex, I would think.

Yeah, it's a, it's a pretty interesting problem.

You can think of it, kind of like Tetris, you know, you have, so you have a bunch of workloads, they're kind of coming in, they're like blocks, they have a and you're basically trying to fit them really efficiently and minimize kind of gaps or waste.

Um And so it's kind of a variant of a bin packing problem or a scheduling problem, but with a few hacks that we've introduced, um that kind of allow us to do this really, really well.

And what's the, the service your, what's demand like right now for what you're offering and where's the demand coming from?

Yeah, demands, I think really tremendous.

I, I think people are still actually underestimating the extent of both the magnitude of the demand but also the extent of the growth and the demand for these A I chips and we can talk about it.

There's this interesting trend called compound A I systems.

I think it's feeling just a tremendous growth that hasn't been priced in yet.

But we're seeing kind of demand from all sectors from enterprises who are kind of, I think finding in many cases productive use cases for A I that they're putting in production now more and more but also from start ups, both application companies using A I for end applications, but also for kind of research and development companies building these better base models, these foundation models um that other people will use in their applications.

And how did you get the idea for this, Jared?

What's the origin story here?

Yeah, so me, you know, many, many members of our team have a bit of an interesting background.

We worked at the intersection of a few fields that are usually distinct, you know, one being deep learning research.

And so I was at deep mine previously on a team called the core deep learning team.

And deep minds have now the division of Google um that's leading a lot of Google's kind of frontier A I efforts.

I also me and many other members of our team did our phd S and systems, which is typically distinct from A I.

These are almost different tribes, they don't mix and we do our phd S in systems under a great P I named M Zaharia and who was also the CTO and founder of Data Bricks.

And so we've kind of been thinking about these esoteric questions around how to map workloads on to compute really well for a long time.

Um And then also a lot of us have a finance background.

So in between undergrad and my phd, I worked for example, at a private equity firm called KKR um and learned a lot about data centers, a lot about near price software.

And so I think we have a bit of a funny perspective at the intersection of finance systems NML that allowed us to think about how to use how the economics compute would evolve in a bit of a new way, Jared.

It's a great story and a big pal from mega trend.

We talk a lot about here.

Thank you for joining us today.

I appreciate it.

Thank you.

Thanks Josh.

The first time this year, President Biden is leading or tied with former president Trump.

So many, maybe some of this is starting to work in a lot of national polls.

We're seeing him come up and catch up the president might have improving economic sentiment.

Perhaps to thank compared to last June Americans are five points more likely to say they're getting ahead or holding steady financially.

Joining us.

Now is Henrietta Trace Veta, partners, managing partner and Director of Economic Policy Henrietta?

It's good to see you.

I would like to start with some of the announcements that Yellen made today on the affordable housing front.

Do you think this does move the needle?

And obviously, you know, housing affordability is an acute problem in this country right now.

It is.

And just to your last segment, it's exactly what the voters Biden needs are most concerned with.

If you look at the latest polling data, number one for youth voters under the age of 30 is getting access to housing and they feel like it's much harder for them now than it is for, you know, somebody who's generations older than them.

Um And you can see that in the data as well.

People, 60 years and up don't worry about housing nearly as much as the youth vote does.

So I think we saw the first themes of this in the budget roll out back in February in the state of the union address when he talked about providing a home buyer, tax credit secretary Yellen is going to continue that effort.

I expect you'll hear about that more and more as we get into the election cycle and you know, just on the polls real briefly, we still have nine points to go in the polls that are not correct right now.

Meaning the polls right now are nine points off from what we're ultimately going to get in November based on historical data.

And so there's a lot of time, a lot of movement that's still to come and most of that won't happen until hopefully after the debate or after Labor Day.

I'm just curious.

I mean, just bring out your crystal ball here.

Do you think what's being announced today?

You know, if you were to place your bet, do you think it has a meaningful political impact?

I mean, honestly, I'm a little surprised that they're doing it today because it's Abortion Week.

They need to get better at messaging as you guys were just discussing the difference between Biden and Trump, I think, is that the entire Republican machine is able to get on a single agenda item and talk about that for an extended period of time in co ordinated fashion.

Democrats are sort of all over the place.

So here we are on the week that Dobbs got overturned, we're going to have the debate.

We should be talking about that all day every day.

And now they're also rolling out housing components.

So it's sort of dilute the message.

And I think that's a communications problem that they're going to have to work on, but they're really trying to throw everything at the wall right now.

So Henriette, that's exactly what I wanted to ask you about.

Which is this laundry list approach that Biden takes?

I mean, his economic speeches are pretty consistent.

He just goes through all the bullet points.

Here's what's working as you pointing out there out this week trying to hit a million different things.

If you were to advise Biden and he were to take your advice, what would, what one or two things would he be out there talking about?

Well, the number one issue for um the people under the age of 30 independent voters after the economy and inflation is now abortion.

We talked last time I was on the uh program about how immigration has declined as an issue.

And that's been a real boon to a lot of Biden's recent gains in the polls.

It's just become less of an issue as immigration has declined 54% versus the ties in December as the third straight month running.

So they really need to pick a focus on it consistently.

Make this abortion week, make next week, housing week, you know, and really target it as much as you can.

But I do think that they are really struggling to break through to younger audiences in particular.

And I think that's a big reason they're having the debate this week in the first place.

They need to be in the same place.

Trump is to get the eyes that watch Trump to also watch Biden, that's just not happening for them and that's why the polls aren't moving.

Ok.

So let's talk a little bit more about young voters.

Uh, the Biden administration is also, uh, trying to, they are going to reclassify marijuana.

So the weed vote if you will, um, is, is, is this gonna get through because believe it or not from some of the 20 something.

I, uh, I, uh, I know, uh, whether in the family or not, I hear like, hey, wait, what is Biden doing here?

So it sounds like maybe he's, they're, they're paying a little bit of attention to that.

Yeah, absolutely.

And we were telling clients that that was coming back in November and it's been a really good performer for our investors.

Um But this is an area where you have, I think the data is something like 65% of Americans support legalization of marijuana to at least some degree.

It's a pretty momentous change.

It's not sort of your grandfather's Democratic or Republican Party anymore.

It's not a crazy situation for people to envision.

So I think it's very popular and it also resonates with older voters over the age of 65 as well.

And I think it's worth remembering that the reason Biden is winning old, older voters now for the first time in many generations is because it's not the silent generation.

It's not the greatest generation anymore.

These are, you know, folks who went to Woodstock and this resonates with them.

We, for everybody, probably some younger, probably some younger voters as well.

Although I guess people, you know, if it's locally, I don't know.

New York City is just a bastion of weed everywhere at this point.

But Henrietta, I also wanted to turn to the debate, um, coming on Thursday night, of course.

And, um, I, I'm curious, I'm always curious and Rick and I talk a lot about this, how much this sways people, these debates and, and what in the debate sways people.

And I'm curious to get your take on that.

Um I think the debate itself is going to be probably one of the lowest turnout debates in terms of viewership that we've seen in a while.

It is June 27th.

Everybody's on vacation.

People are, you know, flying out of the country schools out, you know, it, it's not going to be something that I anticipate is widely watched.

So that makes the framing around the debate all the more important.

And like I said, I'd sort of repeat my same refrain.

Make it a where should we, you know, make it one particular item and then have Biden Hammer that all day, every day at the debate so that your media clips and your news clips that can go viral the next day are about one singular issue or for Trump, make it about something very, very specific that, you know, you can go viral with afterwards because I don't think a lot of people are going to be tuning into the actual event.

It's all going to be about what, what comes from it, the lead up and the post.

So I think about the debate a little bit differently.

Henrietta.

Uh, to me it's Geezer Fest and uh one, everybody is gonna be holding their breath to see.

Does one of these guys do some kind of face.

You don't mean people watching?

You mean the guys on the stage, it doesn't matter who's watching live because it's, it's whether something happens that it's almost like you're saying, Rick, it's almost like the way you can't, you're passing an auto wreck and you can't, you have to pause and look, but you're gonna have remote, a remote instant replay, uh, for the next five months if, if there's something there.

So, I mean, I, so the question really is, uh, how important do you think, you know, the, the, the risks of a senior moment are, I think they're extremely important.

I've been on the road for the last two weeks with investors across New York and London.

This is the topic of conversation in every single meeting.

The predicted sort of markets and the polling data right now is telling you that about 20% of the street believes that Biden just won't be on the debate on the ballot in November and there is a 40% block of the population that doesn't know if Trump is going to go to jail or maybe he could go to jail.

People are confused.

They want to see what's going to happen.

And I think you're exactly right to say that the risks to both of them are very, very high that you have some sort of senior moment that you never come back from.

And that's part of why the Biden team decided to hold the first debate on June 27th in the middle of the summer.

Uh Because if something does happen, they have plenty of time to course correct.

But also they really need to get the polls moving and they need to put Trump in the same room with Biden so that people can contrast in real time and not rely on, you know, a deep fake or an A I situation that you're getting from certain media outlets.

And I think that's really the most important thing you're highlighting exactly what I hear from investors all the time.

Are both of these guys going to make it?

Are we really going to see these two men be on the ballot in November?

It's still a real question.

Henrietta Rick, really great conversation.

Thanks a lot.

Appreciate it.

It's been a bumpy road for many self driving vehicle start ups, but Wabi approaches the tech differently.

The autonomous vehicle start up is deploying generative A I in its quest to launch driverless trucks by 2025 and big tech is taking notice earlier this week, the company raised $200 million from investors including Uber, NVIDIA and Volvo's Venture Wing.

Joining me now the CEO of Wabi Raquel, Orta San uh Raquel.

Thank you so much for being here.

So, first of all, congratulations on the race.

Talk to us a little bit about uh what Wabi does and how you're differentiating from some of the other autonomous vehicle companies out there.

Yeah, thanks Julie for having me here.

Um Yes.

So if you look at the industry today, uh particularly that I've been tracking the industry has consolidated to a very hand in year approach, what we call it V one point?

Oh, that really has difficulty solving.

The problem is very capital intensive.

And what um what is doing is bringing the revolution of United A I to the physical world.

And uh that's what uh you know, give us a very significant advantage in terms of how quickly we can actually build and deploy this technology as well as uh you know, being super capitalistic compared to the rest of the competition.

And so how does the, the training um exactly work of the software uh that you're using to, to um get to autonomy?

Yeah.

So what has created a new generation of foundation models uh that uh are able to uh understand and interpret what they see, be able to create abstractions that are interpretable so that you can validate and verify the system and then uses those abstractions to reason something that for the first time, you know, foundational models could not do before.

Um And this gives uh you know, the system, the abilities to really generalize to the unknown, which is fundamental when you bring you gonna bring this type of technology to the physical world, so that it is very data efficient as well.

It's very efficient in terms of computation on the vehicle and it's provably safe.

Uh You can think of it as we solve the alignment problem uh that you see uh in traditional more transformer like architectures uh that you see on the last language model side of things.

Um And the way that we train the system is mostly on simulation where we create kind of next generation also genetic P I technology so that we can expose the system to all the 60 critical situations, including accidents, et cetera.

And when we put the system in the real world, it's already much more performed than anything that you see out there.

Uh We, we're just showing wy trucks on the road.

Do you guys?

But do you guys don't make the trucks?

Right?

You are making the software that goes into the trucks.

How does that sort of melding work?

Yeah.

So we integrate uh our sensors and computes.

So we don't build the sensors themselves, but we actually patch them in a way that is very uh uh you know, build so that it's very easy to integrate at the factory line with the OEM.

Uh So we partner with the O EMS and then uh you know, our technology can be very robustly uh deployed in the physical world.

And then the, you know, the biggest I will say kind of a differentiator is the software uh that drives the trucks is uh you know, for the first time is genetic P I uh that can really do uh you know, with an end to end system, as I mentioned, that is interpretable, right?

Something that is kind of like the next frontier uh for the industry uh that has uh you know, really give us this competitive advantage compared to anybody else.

Well, um we've been talking about autonomous for a while now, you know, we've heard people like Elon Musk promise it for a while.

And yes, as I mentioned, we're supposed to be getting this announcement later this summer.

We'll see exactly what that announcement entails.

Why is autonomous?

Why is it so hard to crack?

And are we really closer, not just at WABI, but at other entities?

Are we really getting closer to cracking it?

Yeah.

And as for context, I spend almost two decades now working in, in South driving, right?

And, and you know, the um you know, the problem has been really that uh you know, the approaches that the industry had utilized to solve South driving were, were very high engineered were actually not scalable uh that really had difficulty generalizing to the unknown.

And there are so many things that can happen in the physical world as you drive that uh you know, these systems were, you know, really uh you know, are having uh you know, more and more difficulties to make more, you know, to make progress towards the goal so that, you know, it's been a technology problem uh so far.

And you know, the reason I started the company three years ago is that being at the forefront of innovation and really saw that the industry needed a different approach that, that uh kind of uh approach that will be scalable, will come from an A I first approach.

Uh And really envision the full power of A I uh to build a single A I system that can actually really, so this task and what we see today is that, you know, three years in uh this technology is so powerful and you've seen the revolution I would say in the digital world with a GP T in November 22.

And uh you know, all the, you know, different things that we have seen from other companies afterwards.

Uh And you know, the same kind of, you know, the cas of a revolution in the physical world.

And this is not possible prior to this technology.

Uh So definitely what you're gonna see now is uh you know, why we deploying driverless next year uh our com product.

And the other thing that we uh we have also for the first time in public is that uh we're gonna do many more things just tracking.

Uh We're gonna do other, other robots with different form factors, whether it's robot access, whether it is warehouse robotics, uh whether it's humanoids uh will be things that, you know, we will be doing in this future and all thanks to this, you know, groundbreaking technology.

Well, we will keep in touch as you make all those developments for.

Thank you very much.