道富：现在不是加息时机，货币市场基金成持久资产类别

Yie-Hsin Hung, president and chief executive officer of State Street Investment Management. Yie-Hsin, thank you so much for being with us. Always a pleasure to speak with you. One of the reasons why I love speaking with you is because you can take a look at the flows and just how much people are rearranging ahead of some of this data and, frankly, in the wake of the performance that we've already seen. I'm just wondering how much you're seeing people withdraw cash following the momentum unwind or, frankly, taking cash that they had in money market funds and starting to deploy it in more significant ways.

You know, what we've seen all year is that money is moving into money market funds. It hasn't really shifted even though the market regime has changed. And I think in large part because expectations of yields remaining at more elevated levels than they've been is attractive, and it's an opportunity to leverage it for opportunistic moves into the market, but it is becoming what we see as a durable asset class. So it's a durable asset class at a time where people are expecting the Fed to likely remain on hold or potentially raise rates at some point.

I'm just wondering what it would take to unlock that $8,000,000,000,000 in money market funds or wherever it is right now to go into the financing of the data center build out that we see every single day with Intel necessarily raising another $15,000,000,000 in equity as they were just announcing? Well, you know, what we've seen is that investors are really wanting to barbell their portfolios. So they're leaning into a lot of the AI story where the growth is in the market, and second quarter earnings are a really good example of that.

Same time, lots of money are flowing into the fixed income market. We see asset classes like cash, gold, commodities, private markets as sort of like the anchor to a lot of portfolios. So I'm not sure we're necessarily gonna see that much of a shift. Private markets is the anchor for individual, like, wealth portfolios or institutions or both? Has that sort of shifted since earlier this morning? So earlier earlier this year, I meant.

Mostly from an institutional standpoint. You know, we've focused a lot on private credit. We continue to see institutions move in, in large part because private credit tends to have floating rate interest rates. So that's attractive in this environment. Where we've been focused as a firm is really on the investment grade sector, introducing modest exposures into three ETFs we launched with Apollo and introducing private equity, private credit, and real estate into our target date fund series.

Modest amounts, 10%, but it adds added diversification and an opportunity for individual investors to take the longest horizon investment that they have and benefit from the value creation we're seeing in the private markets. When you look at financial markets and this year alone, do you think it would matter if the Fed raised interest rates? Would that change your allocation? Not significantly. We are overweight, equities today.

US first primarily, emerging market market secondarily, and I think it's really on the backs back of tremendous corporate earnings strength. We think that the economy is in pretty good shape. Although from our perspective, we believe the Fed really should hold steady on rates, and that's what we're calling for for the balance of this year. But to the extent the Fed does move and it's already indicated, it has a more inclination to move faster but gradually.

We think the economy is robust still, but at the same time, where our worries are on the labor market. And so that's why we view interest rates being steady as a better price. Concerned about with the labor market? It's been kind of this no hire, no fire paralysis really for a while. Exactly. And, you know, I think with the Friday report, it showed the labor economy being a little bit weaker. It's not a really strong source of inflation.

And it's really that inflation picture that guides us to say, this is not a time to be raising rates. You know, there's a big discussion right now in the Federal Reserve and frankly in markets about artificial intelligence and how inflationary it's gonna be versus the productivity boom that a lot of people are talking about. We're seeing, for example, the idea that you are seeing growth continue to accelerate even with some of the inflationary components tied to labor, for example, come in.

What are you seeing at State Street in particular of how you're deploying some of the AI tools, the efficiency versus the cost? You know, I think it is still early days for a lot of companies. I mean, clearly, every single company is investing heavily as we are at State Street. Where we see tremendous opportunities is with, you know, a very significant processes, data intensive, sometimes very manual efforts, enormous efficiency gains.

But we also see revenue opportunities too as we think about streamlining our investment process post trade, if you will, and then also customizing to clients, being able to provide what we do for very, very large institutions all the way through to individual investors. We've seen already the financial industry contract a little bit on a headcount front. I just wonder from your vantage point, how you think about the growth of State Street as it surpasses $6,000,000,000,000 and its its footprint, its its headcount footprint in response to the greater efficiency that you can do?

Is it just grow the assets by keeping the footprint the same? Is it potentially, shrinking the the total size of the employee base versus the overall assets? You know, we see AI as just an enabler, enabling our people to be able to do more. And so we don't see this really as a headcount reduction play, but more so a benefit to being able to serve our clients even better on a global basis. When will you know that it's fully worked, all of your AI investments that you're putting into the firm?

Do you see it now? Do you actually see employees being more productive on a day to day basis? We're gradually seeing it, but as I said, I think it is early days. Once we really see meaningful moves in terms of whether it's margin or revenue acceleration, I think that'll be the time. I expect that'll be maybe a year or two, three years out. Given that you don't see it as a headcount reduction within State Street, do you see that in the broader labor market as well for other firms?

I think what's happening is that companies are slowing down their level of hiring as they are also undergoing this AI journey and determining ultimately what what other headcount needs and where is that headcount going to be really focused. Has this summer been quiet for you? Summer has not been quiet. Is it normally quiet? I would say a couple years back, it was quiet, but these last couple of years, it's been nonstop.

You know, the volatility of VIX has gone down, but are people feeling that way, or are people very engaged? Do they feel like they're trading on a continual basis? I think people are incredibly engaged. I mean, these are the kinds of conversations we're having with clients every day. What do we think about the concentration of returns? How do you diversify portfolios? What is the worry that's coming behind? What's happening today?

How do you protect against it? Yeah. This seems like it has been a summer that has gone by very quickly on one hand, but on the other hand, I don't know. It seems like every single day is a different story. It is. You see, obviously, what's going on with The Middle East. You see there's a massive debate, a change of the guard at the Federal Reserve, all happening at the same time this summer as we head into a really important election when it comes to the midterms.

How would you characterize, Yie-Jin, the overall temperament of investors right now? Are they optimistic? Are they bullish? Or are they more skittish of the potential ris