caroline: i'm caroline hyde. romaine: i am romaine bostick. taylor: and i'm taylor riggs. romaine: all it is about is price pressures. the higher cost for food,

shelter, driving prices higher. are these going to remain at elevated levels or stay transitory. today, we will discuss how wall street executives are approaching inflation and how it's affecting earnings, and where to watch value versus growth. first, hearing from goldman president john walton. it's not about the idea of whether it's transitory or whether it's permanent, but about how we are defining the word transitory. take a look. >> every ceo i talked to today is very concerned about supply chain, input, costs, whether they are materials, commodities, and increasingly labor. both availability and cost. they believe it's not transitory. caroline: john waldron saying inflation is worrying him. but jamie dimon did not seem so worried. let's look into the jp morgan numbers. what do you make of the call

from jamie dimon? he is not worried about any of these issues. >> he is focusing on the core fundamentals of his business, right? we focus a lot on loan growth and what that tells us about the consumer, but what i think jp morgan's numbers show us is a healthy u.s. economy. we have a very healthy consumer and healthy corporations, they just don't need to borrow to finance their activities, because they have all of this liquidity built up. he spoke about green shoots, with to refer to commercial real estate lending, but said that consumers are starting to work down those excess deposits, so we might get some borrowing and cards. he talked about commercial line utilization is picking up a little bit, which means the lines of credit have extended to their middle-market, commercial customers, they are putting a little bit to use.

some is not happening at the pace that some people would like. taylor: is it the credit quality and the lending that's going on that's moving up in quality? what would that give you a hint about the view on the economy? >> the one, bidens metric, if you will, that they updated, they said that credit for credit cards would be even better. all year, revenue expectations have come down because credit card balances aren't growing, but the other side of that is positive credit. it's really phenomenal, the credit quality we are seeing, especially in the credit card business. if you think about a year ago, that was one of the areas most people were uncertain about that has been a big surprise.

if accounting driven, people tend to the strip that out, but a huge bottom line for the banks this year. romaine: we talk about how this causes some concern among investors. when it comes to how they are spelling it out, it seems like the consumer and the economy are in a relatively healthy place. >> and we did see strong growth in terms of debit card and credit card spending, they are just paying their bills out of the bank accounts. that's very healthy. it's healthy that they don't have to borrow, it's just the banks are not going to be making money on that. taylor: we appreciate your thoughts, allison williams, global investment banks and asset managers senior analyst. let's continue this conversation with barclays managing director and senior equity analyst. jason, further that conversation

for us, if you will, about the views on the economy, the take away from jp morgan, what you are looking to when it comes to other banks as well. >> looking at overall results, trading and investment banking fees are down relatives to the prior quarter. they were better than expected and up from where we saw them two years ago. strong results in the markets. bassett banking pipelines remain elevated, particularly in m&a, despite this quarter being a record quarter for m&a fees. the loan growth that allison spoke to, muted in the quarter, you are seeing several green shoots, and several supply issues get resolved. we are expecting commercial lending to follow and expecting to see that in consumer borrowing. credit borrowing was up, and that will result in increasing credit card expenses in the

fourth quarter. the credit quality we talked about, the consumer is probably as healthy as it has ever been. i don't think 20 basis points is ever as low as it has been before, at least in my quarter of a century. it points to a healthy economy that should continue through the immediate term. caroline: and the performance of financials -- today they were the worst performing industry group. they have been on a tear as we shift from growth to value and look for a reopening play. what about the inflationary environment? does that bold well -- bode well? or are we more worried about what that does to banks? >> i'd not worry about what the inflation or the cpi print is, it's what the economy is doing. in the backdrop where the gdp is growing and interest rates are increasing, this group should do

well. since september 22, the fomc minutes, you saw the 10 year yield gap up and the yield curve steepening, but look on today's cpi print, the yield curve is a bit flat as the 10 year in as the group underperforms. i would look at what the group does on a near term bases on what the overall economy does. romaine: let's talk about some of the regional banks. jp morgan is jp morgan, and we will get citigroup, morgan stanley, more diversified companies that team to find a way to perform no matter the environment here. some of these regional banks that have a business model that is maybe more singular, how do they hold up in this environment? >> in the near term, you are seeing some margin pressure in a low term interest rate environment.

all regional bank that reported today was down about three basis points. we talk about loan growth being muted. jamie dimon talked about potential green shoots in commercial real estate. that is something that we will be mindful of to see if that trend is continuing, among others. i do not think they have, to your point, the same investment bank and trading operations that are benefiting from capital markets activity. taylor: pivoting a bit, yesterday we spoke with mike mayo at wells fargo. he has been hinting that banks need to pivot quickly to rival fintech's or become technology companies, if not consolidate some of the other fintech players if they can't compete, buy them. our banks pivoting fast enough to be able to take on fintech players? >> i think they have done a good

job in terms of technology and investments over the years. if you look -- everyone likes to talk about demos as an example. the banks had zelle, which was actually bigger. the banks have been leaders in some areas, partners in other aspects and acquirers in some segments. i think the banking industry has adapted and will continue to have to adapt to stay competitive, but $60 billion a year on technology, that something we think they will be able to benefit from. caroline: thank you, jason goldberg. an excellent conversation with barclays managing director and senior equity analyst. up next, we discussed where we stand in the growth versus value debate. that's next. this is bloomberg. ♪

taylor: we have been talking a lot about the theme of growth versus value, and who is winning now. both are on par for this year, although it does change up the story if you go back longer-term. caroline, really interesting if you think about where we are in the horserace of growth versus value. caroline: at one point it was value that led off the charts, as we started to see the economy returning. now growth is getting a bit of a bid. now we are in connect when we look at the russell 2000 value versus growth. let's see which will win out in the future.

a research affiliate partner with cio, of multi-asset strategies. you like all things value -- is reall -- now really the time to get into value, jim? jim: we will also tell you about the benefits of growth. as we think about value this year in the chart that you just showed, showed value off to the races in the first quarter and growth rebounding shortly thereafter, as we look at it, and we like to look at things over many years, if not decades, value is back to some of the cheapest metrics that it has been, if we look at some of the traditional fundamentals that we have seen in decades. we are still bullish value. romaine: but it's about how long you can ride that train here.

how long you can get the performance versus the outperformance stocks, versus sticking with some of the more growthier names out there. you look at the economy, where most people think it is going, look at whatever sustainable growth people might get to and look at inflation here. what's the case here to stick with value and ride that out? >> take a minute to step back and think about inflation, right? 5.4, and the transient camps, if you take out energy, food and shelter, all of a sudden inflation looks more palatable. that's great if i don't need to leave, drive, or -- anywhere. if i look at other things, as i do, and looking at cross asset

strategies, we are looking at commodities. commodities are giving us information on where the economy is going. everyone talks about energy and where oil prices are, but something like lumber is proving to be a little more persistent. we saw a spike early in may, up to 1800. a quick pull back to 800. commodity prices are proving more sticky then maybe we would have thought a few months ago. taylor: sticking with that cross asset theme, i'm curious about conflating correlation with causation and wondering if value can outperform, even if yields don't spike higher. indeed on days like today, yields fall on the long end. >> we think they can. at some point, the old quote in the short term, about the market being a voting machine and in

the long-term a weighing machine, i might have conflated it, but the point is at some point, fundamentals will way out. investors need to look at what they are buying, the price they are buying it, and ask the question, what do future earnings have to be to make the price i am buying it at make sense? in the short-term, we can talk about, as you pointed out, yields and the yield movements in the yield curve. but fundamentals way out as they have over the last 200 plus years. caroline: forgive me if we have crossed over the subject to a certain extent, but the fact that big tech suddenly outperforms on a day when we get inflation riding high because in some way, they are able to pass it on and have pricing power. what areas of value have a similar story for you? >> i think it's a good question,

but it goes back to the thought of where, how persistent is inflation going to be? from the idea with autos, we talked a few months ago about used car sales and where that was and how that was driving inflation, and the need to try to pass that on. we ran into supply chain issues, we ran into chip shortage issues -- excuse me -- and chips too, exactly. you are in california. our nice view of the ocean is littered with container ships waiting to be unpacked. look, as we think about value and companies that are cheap, that's really what we are talking about. within any sector, we have

growth stocks and value stocks. there are opportunities for those who are willing to be nimble in any environment to succeed. it goes the same way with value. romaine: there is also the idea of how you to find value in this day and age. even warren buffett adjusted his tune a little bit early. his investment managers did. looking for good company's overall and trying to find some fair, reasonable value rather than looking for what we would normally consider cheap. >> earlier on this year, many people talk about value versus momentum. earlier on this year, we saw the momentum indices were littered or were full of value stocks. this idea that value is just, you know, these old companies that are a little bit too rigid,

have high costs, arch nimble -- aren't nimble, aren't there as we look forward. there are always bad companies. we will not say there are not bad companies out there, zombie companies, to use that phrase, but you are right that the definition of value is changing and evolving. romaine: all right, jim, great to get your thoughts. partner at cio of multi-asset strategies and research affiliates. up next, jane fraser in her first year on the job, citigroup earnings are out tomorrow. we have a great story about how she is not only trying to reshape citigroup, but stick it to some of her competitors. that's up next. this is bloomberg. ♪

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caroline: if you are not signed up to bloomberg quicktake, you've got to. and cover of bloomberg businessweek as well, it breaks down jane fraser's big plans to remake citigroup. we have mike mayo on set, critical of citigroup and its executives, but said james fraser -- jane fraser is a changemaker. do you agree? >> she's got a lot of big plans here and citi is in desperate needs of a change. they lag their rivals, j.p. morgan and bank of america. i think she is trying to bring the breath of fresh air, and she is in it to win it. romaine: she has only been on the job for a few months. what are some of the many strategies she has communicated? with regards to what citi will

look like into her tenure? >> one of her big focuses is wealth management. citi has long punched under its weight in that area. they were forced to sell off to morgan stanley, a huge win for morgan stanley. they have turned that into this powerhouse. you see them wanting to get bigger in this business. romaine: but we have not seen the type of acquisitions then we have seen out of morgan stanley, for example, and even jp morgan to a certain extent. >> late last year they got saddled with two consent orders from regulators, and one thing that was actually said, if you want to do any acquisitions, you have to run it by us. i think a lot of her strategy and thinking is around organic roast, looking inward and finding the gems hidden in the

rough. taylor: and it's not lost on us that is the only female running the major bank, she is the most flexible when it comes to returns to assets and understanding the importance of flexibility. how much of that can be a satisfying tool for some of the employees? >> that some of the reasons we are excited about this profile. we kept hearing over and over again, it's jane and her commentary about her ideas, the way we work on wall street and the way we work every day. one of the interesting things she said in the interview, it's not just that we can work from home two days a week, but if it's 3:00 and you need to go pick up your kid from school or go to a soccer game, log on later and finish up then. she is rethinking not just the work from home, work from the office balance, but the flexibility that a lot of employees are wanting right now. caroline: is that what she wants

to do, be this change agent? what is it she is prioritizing first and foremost? >> she wants to get to the levels jp morgan and bank of america are at. along the way, i think she is saying, you don't have to be mutually exclusive. you can be a more inviting, warm, and human place to work. she uses this word a lot in a really genuine way. caroline: has it? >> yeah, people response to it. that's why you see all of these things happening her way. it will be interesting to see if it pays off if this works long term. that's the plan for now. caroline: jenny surane, a great story.

thank you so much. a deep dive with jane fraser. romaine: jamie dimon is empathetic, right? caroline: but he says it is the media's fault, right? about inflation, so not much empathy for our industry. romaine: he is a chicago man. caroline: they make them the best there. taylor: "bloomberg technology" is up next. romaine: have a great evening. this is bloomberg. ♪

♪ >> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ emily: i am emily chang. welcome to a special edition of bloomberg technology.