Tim Graf (TG): This is Street Signals, a weekly conversation about markets and macro brought to you by State Street Global Markets, the Markets and Financing division of State Street. I'm your host, Tim Graf, European Head of Macro Strategy.

Each week we bring you the latest insights and thought leadership from our award winning suite of research, as well as the current thinking from our strategists, our traders, our business leaders and a wide array of external experts in the markets. If you listen to us and like what you're hearing, please do subscribe, leave us a good review, get in touch with us at all, helps us improve what we hope to bring to you.

And with that, here's what's on our minds this week…

When the podcast first started in 2019, under a different name and published only to an audience of subscribers to our research, having the chance to present this week's episode and to have it heard by an audience of anyone who cared to listen was always in the back of my mind as a long-term goal. Well, this week we get the chance to cross it off the list.

I'm going to keep this introduction very short because what follows is a wide ranging discussion of the risks and opportunities in macroeconomics and financial markets and what they mean for State Street. And I'm thrilled to be able to say that joining me for it is Ron O'Hanley, chairman, president and CEO of State Street Corporation. I can't quite believe I'm about to say this, but Ron O'Hanley, welcome to Street Signals.

Ron O'Hanley (ROH): Good to be here, Tim. Thanks for having me.

TG: Yeah, thank you so much for stopping by our little podcast. It's great to get your time. There's a lot we want to talk about, but I want to start with sort of a 30,000 foot view about what you're thinking for the year ahead as far as the global economic outlook and what to expect in financial markets. We've already seen some volatility in markets to start the year. There's likely going to be a lot of uncertainty this year around politics, monetary policy, fiscal policy, trade policy. It all seems to be in play. But we had concerns last year and last year was a great year for markets and there were all sorts of challenges then too. But I'm wondering what you make of it. For this year, the consensus expectations are actually pretty high for equity markets and all of these concerns are still there.

How successful do you think markets can be in scaling these walls of worry for another year?

ROH: Well, I think you've adequately articulated the situation here, in that last year there was an expectation that the global economy would not perform the way it did because I don't think that there were anywhere near the kinds of expectations about the US – although I think we at State Street had a sense of it, because early on last year we were the ones saying that we did not expect to see the same kind of rate cuts that had been built in, if you recall, at the end of 23, going into 24.

I also think implied in your question, it's the kind of non-economic performance issues, call them geopolitics if you want, that are probably the ones that everybody's most uncertain about and in some ways are being discounted.

We'll see what actually comes out of the Trump administration. But everything that's being talked about suggests that that could have a negative implication for some elements of the economy. Tariffs we know are inflationary and any time you put in a comprehensive tariff, yeah, there's a little bit of protection that occurs, but there's an awful lot of inefficiency that occurs too as a result of that. New resources aren't allocated properly.

The whole issue of immigration and what happens there. The realities are that if you go back to the issues we were facing, particularly in labor markets coming out of the pandemic, much of that labor market repair was the result of immigration. And the idea that we're actually going to get rid of it all would be really detrimental to a lot of very important industries.

And then leave aside some of the things that are going on in Ukraine with Russia and what it means for our European allies and things like that. So I think markets have discounted that and maybe appropriately so because these things are often binary now, the advantage of the US economy performing well is does drag along a lot of other boats and the US economy has shown remarkable resilience.

Whether that can continue at the same pace, I'm personally skeptical. I think that there was so much kind of momentum built into the economy, including consumer spending and the fact that the usual transmission methodology for rates wasn't working, that is in housing, because there wasn't a lot of housing turnover. So we haven't seen the full impact of rates.

So I mean, I wouldn't be banking on another year like 24, but I also wouldn't be banking on a downturn. The US economy and many elements of it are quite important and are doing quite well. And as the US goes, it will help the rest of the global economy. The real wild card for me at this point is China.

TG: Okay, well that's an interesting one. Yeah. Because what you've said is a little off-consensus. I think there's an expectation that it'll be a good year for the US. And some of these challenges that you brought up may not impact growth as detrimentally.

ROH: I'm not necessarily disagreeing with that. The challenge is that, like I said, they're kind of binary.

TG: Yeah.

ROH: Tariffs may mean nothing because there may not be a lot of tariffs, or it could be Smoot-Hawley and you know, we're in for 10 years of a really bad situation that's all about, you know, a bunch of protectionism going up. I just don't think we know yet. You ask me what I believe, I actually think that we will not see the kind of tariff regimen that the administration is describing. I think they'll be used largely strategically to achieve other ends. And if that were to play out, I'm optimistic, too.

TG: Yeah, actually, that was a question I was going to ask you later and I wanted to think more about these risks. And we actually, we've talked so far about risks that are kind of known unknowns. There's a lot of uncertainty, but they are sort of well-articulated risks. At this point.

I wanted to see if there was anything you were thinking about that is maybe flying a little bit more under the radar. And this could be a risk or it could be kind of a positive, an opportunity, something that maybe isn't getting as much attention as far as the global economy or the US Economy for that matter, that you think should though.

ROH: I think that the Russia-Ukraine thing is not getting as much attention as it should. I actually don't think that there's a deal to be done the way that incoming President Trump is describing. As far as Russian leadership is concerned, they can't keep going at this forever, but they don't need to. They just need to keep going a month longer than Ukraine. And in the absence of a consensus around ongoing support, it's not clear to me how long that Ukraine can sustain itself.

And I think that a situation where Russia ends up being able to do, in effect, what it wants – and it will do what it wants unless it believes that there is going to be a continued supply of Ukraine – for as long as it takes. And that doesn't seem to be there then. So I worry about the implications of that, not just on Ukraine, but what it means for Europe, for Europe as an ally, what it means for what Europe would need to do to basically arm itself in the absence of the US umbrella, if you will. So I am worried about that.

TG: Europe, historically, when it came to economics would always kind of get around to doing the right thing after exhausting all the other alternatives. It was sort of like the comments that Churchill, I think made about Americans. They do the right thing after all other options have been exhausted. And Europe is similar when it comes to economics.

Do you think, ultimately, the same thing happens on defense and security policy? They get to what they probably need to do or to have already done.

ROH: If you look at their spending rates, the spending rates are already up. And I think certainly the mindset has changed in Europe, even with a closely aligned US there's a recognition that, the cost of defending themselves has simply gone up and that the risks that they're facing from the east are much greater than what they thought. I mean, listen, there's, there's power lines and pipelines being just dragged up and destroyed in the Baltic, I mean, who would have thought this would be going on?

So the challenge will be if the US is perceived as no longer there. That's in my mind going to have a detrimental knock on effect for the rest of our relationships with Europe. And you know, we'd like to say that it's all about the US but these are incredibly important trading partners to us. If you think about industries that where we're the dominant, financial services being one, technology being another, where is that marketplace? It's places like Europe.

I mean, whether or not you have tariffs. But on top of that it's, listen, if we can't rely on the US for what we've historically relied on and on which is an ally, then why are they such an important trading partner to us? So I would just hate to see this pullback.

TG: Yeah, it brings up the topic of de globalization. I've heard you on in the media talking about this and I know you've done some thinking on this and it's taken on renewed strength, especially after COVID.

How do you see deglobalization manifesting itself most clearly in the coming years? Is it that US-Europe relationship or are there others that you're thinking about?

ROH: Well, it's an important question. And the problem with deglobalization is that the opponents and the proponents of it are both right.

The proponents of globalization will say you have seen this massive uplift across the economy and you've seen literally hundreds of millions of people lifted out of poverty at a rate that they never would have been lifted out but for that.

The opponents of globalization will say it's created extraordinary wealth inequality and you still have large segments in both developed and developing countries that are going without. Both are true. I think that's the way the world from a policy perspective needs to think about it.

Now, there's elements of deglobalization that I don't think anybody would disagree with. We almost over optimized supply chains. And when we had a disruption like we did with COVID we saw what happened there. And that doesn't make sense for nations. It doesn't make sense for companies to do that. That will lead to inefficiency, but it will also lead to more instability in the case that you have something like that.

But to the extent to which you push it too far, the aggregate economy matters as much as the individual economy matters. I think we don't want to lose all the promise of globalization and the ability to actually, in a highly efficient way, improve growth in the aggregate. I think what nations have learned is there needs to be more thought around policy that understands what happens in the wake of it.

And in a small way, this is, I think, really what went on in the 2024 election. I think that the Democrats were looking at the numbers and said this is a wildly successful economy. And, by the way, we turned around what was could have been a train wreck coming out of COVID. Why aren't we feeling good about it?

Well, the reason we're not feeling good about it because it doesn't matter what the aggregate is if there's a segment of the population that feels I got left behind. And so I think from a policy perspective, if we want to continue on this, there needs to be more policy action taken on those that are left behind.

TG: Given you mentioned there are costs and benefits that come from de globalization, do you think the process is nearly balanced? Are we close to done or what else should we be looking for, as far as trends are concerned on this theme?

ROH: I think that adjustment is not done. I also think that there's some opportunities out of it. If you think about what's happened in Vietnam, for example, with the tensions and trade changes between the US And China, who's been the beneficiary there? Well, it's been Vietnam. In some cases, it's actually been Chinese entrepreneurs moving to Vietnam and setting up similar kinds of operations in Vietnam to export to the United States. So deglobalization could also mean an adjustment that would be opportunities for other economies.

But what we do, I think, have to be careful of is we got to reverse all this stuff and everybody's going to sit on their own bottom, make their own stuff and consume their own stuff. That's just unrealistic and it's not good for the global and aggregate economy. Listen, it's always better to trade goods than to trade bullets.

TG: Good way to sum it up. You mentioned China in your remarks a little bit ago and that's where I wanted to finish the global economy thought here because you were just getting started, I think, to say something about it. And I wanted to let you talk a little bit more about what you think about China because I think there is a view that things might get a little bit better. We've had a lot of stimulus announced but I think most analysts will still see them struggling to attain the previous levels of growth.

So I just wanted to get any further thoughts you had on whether you agree with that or if it's completely off base or even incomplete maybe.

ROH: Well, the fundamental problem for China, which was a problem we all knew was coming and China knew that it was coming, is around demography. Their success in the past of having an extraordinary amount of low-cost labor that could be deployed and used in a labor arbitrage kind of form to get its share of the global economy – that's reversing itself.

And you're now going to have a situation where irrespective of to what extent the social welfare system steps in in China, you're certainly not going to have that growth of productive labor, it's actually going to reverse itself.

You add on to that these geopolitical concerns and just the trade concerns and we talk a lot about that. This is a US-China problem, but there is as much concern in countries in Europe as there. It's really developed countries around the world.

We think of Switzerland as being truly neutral. I remember this time last year I was talking to one of our clients. He himself was on the board of a very large Swiss industrial company. And he said, we're done with China. We are absolutely done with putting manufacturing facilities in there and then finding out that XYZ state-owned enterprise is competing with us. It's something that looks suspiciously like exactly the way we do it, using processes that are internal and proprietary to us.

And there's this sense that there's been overreach on the Belt and Road Policy. So I think China's in a spot where a lot of things that were working before aren't working now. It is very hard and probably foolish to write off the potential of that economy. But it's not clear in the short to medium term what's going to be the growth driver.

And I'm not even talking about how you work out some of the excesses that are already there, some of the provincial debt and those kinds of things. So in the short term, there's things that need to be worked out and I think will make it hard for China to have the kind of economic and wealth generation that it's had in the past.

But I certainly wouldn't rule it out. And it's in China's interest, I think, to sort this out. You think about electric vehicles. I mean, China has some extraordinary electric vehicles, and they ought to think about, you know, what's the right way to plug themselves into the world economy, such that they're not dumping it on others, but they're taking advantage of what in some cases is actually superior technology and being able to do that. Right now, the US certainly is not going to import them largely. Europe is on a path to shut off those imports of EVs from China. So it's in the interest of the Chinese to think about policy ways to reach a happy medium here.

TG: So whether it's for EVs specifically or on the bilateral trade relationship between the US and China more generally, how interested do you think the parties involved, particularly the Trump administration, will be in finding that happy medium?

ROH: You know, EVs may be a difficult example because there's a lot of politics around EVs too.

But I think we've seen precedents where you could see a way through all this. But the challenge is it's tied up in fundamental struggle between two titans, the US and China. And what I would hope could happen out of some of the policies that the Trump administration is thinking about here is – I mean, it's obviously going to take a tough line, but a tough line to what end? I don't believe the Trump administration wants war. I really don't. And he's been quite consistent about that over time. He doesn't like war.

To the extent to which there's policymaking there to an end, where there's a more reasonable trade policy coming out of China. Right now, we're combating unreasonable trade policy with our own set of unreasonable trade policies, across the board, 100% tariffs and things like that. There's got to be something between those two polar ends.

And this is the guy who prides himself on deals. And to the extent to which this is a tactic towards a deal, something good can come out of this. And I know there's probably a bunch of skeptics that would be listening to us and saying, you're out of your mind, Ron. But remember, it took Richard Nixon the anti-communist from the day he was born, it took Richard Nixon to be the guy to open China. In some ways in American politics, that's what you need. You need that person who's so totally against something to actually be the one who becomes the one for something.

TG: I think we've covered off the trade topic pretty well. I wanted to shift to another issue that was big during the election. It's actually dominating market thinking really almost as we record in terms of deficits and debt levels. This is very much a topic in the news in the UK, it was a topic during the US campaign for sure. Given that almost no matter who the winner was, deficit and debt levels were going to be a potential future risk.

How concerned are you about debt levels in the US specifically?

ROH: The US as you know, is in an incredibly privileged position because we can run levels of debt and there's appetite to consume our debt. The dollar is the reserve currency of choice and the US is considered the safe haven. So nobody goes wrong investing in the US.

I mean, that lasts until it doesn't. And right now we're seeing certainly record deficit levels outside of a war. The thing that I worry about, which may actually be the precipitator of all this, is not that somebody's going to say, okay, at this percentage level, debt to GDP, I'm no longer going to buy. What I'm worried about is some kind of dysfunction occurring in the Treasury market and that could be caused simply by there's too much debt. More likely it's caused by there's too little liquidity.

You know, the Treasury market works until it doesn't. So I was actually disappointed in the election discussion in that the candidates were certainly not talking about it. It was not viewed as an issue other than okay, government spends too much. And we use examples that really don't matter, right? You could take all that away, take away the Department of Education, it's not going to matter [for deficits].

At very least we have to arrest the increase in deficit so we can let the economy catch up and then work it down, which is, by the way, a reasonable policy path forward. I mean, I don't think we need to actually reverse this as much as we need to arrest it. But I don't see the appetite for this yet. And because I don't see the appetite for this, you have to believe there could be something that would trigger a crisis here. And I believe that the first sign of a crisis will be some kind of a kerfuffle in the Treasury market.

TG: How vigilant do you think US policymakers still need to be on inflation, especially if these fiscal concerns don't go away?

ROH: I think they have to be very vigilant. And I think you're seeing evidence that, that as data became available, particularly towards the end of last year, it was widely assumed that there would be a rate cut in December. But I suspect, and you're seeing from some of the [Fed] minutes, that it wasn't quite the slam dunk that everybody thought it wasn't for good reason.

I mean, one, this is not an economy that needs stimulus. Two, there's still some inflationary pressures in the economy. It's being depleted, but there's still a reservoir of incremental spending generated by some of the stimulus out of the pandemic that's working its way off. Three, if you think about some of the things that are left to be spent on, if you assume that the Inflation Reduction Act money ultimately gets allocated and spent in the short term, those are for some good things and things that we would all agree need to get done, but in the short term, they're inflationary.

Policymakers such as the Fed are thinking about that immigration and what actually happens out of that. Because remember, there was a supply chain and kind of a goods inflation issue going on, but there was also an incredible distortion in the labor market, particularly in the US but not just the US and in some cases what happened is again, something we knew: the US labor market is aging.

You then take away some immigration from that and you wonder what does that mean for inflationary pressures? So I think that the pace of rate cuts will be slow. I think what the Fed certainly doesn't want to have to do is tap the brakes. By tapping the brakes, I mean, I think they're fine to delay reductions or even hold steady for a period of time. It would not be good if they had to raise rates, even raise it once. But I think that a much longer pace of rate cuts, maybe a pause or two put in there is a better base scenario than most have.

TG: Now we're getting towards the end of my long list of questions for you and I want to start talking about what a lot of these things mean for us at State Street.

But actually, the Fed was where I wanted to start and I wanted to see, especially for employees who might be listening to this, I wanted to see if you could give a sense to listeners about how Fed policies, whether it's on the regulatory front or on the monetary policy front, how they affect our day to day core business activity.

ROH: Well, I'll take that question at two levels. If you think about the businesses that we're in, right, we have an investment services business which provides operations and technology and infrastructure for global institutional investors. We have a global markets business that supports those very same clients in terms of transactions, whether it's foreign exchange or financing. And then third, we have an asset management business.

It's all about investing and it's actually broadly about the same client base, the global institutional investor. So we are very tied to investment markets. And the good news about that is that the way economies develop, they start as savings economies and from there they move to savings and protection economies. I'm going to save a little money and I want to protect what I save. So I buy some insurance and then they become investment economies, so I've got more to do. There's things that I can't do for myself. I can't educate my children, I can't build a house, I have to buy it. So I want to invest to be able to do that.

And we have been a tremendous, not just beneficiary of it, but we facilitated that. And the Fed plays a role in that because ultimately it's Fed policies and its dual mandate that enables the US to be able to participate in that. Like we talked about earlier, where the US goes, oftentimes the rest of the economy gets dragged along with it.

The other place where, say more broadly, financial regulatory policies affect us is right there in regulation and supervision. And the primary goal of regulators is to ensure a safe and sound system as well as one that protects the participants that are involved in it.

But the other goal in it is to ensure or should be to ensure that America remains competitive in those marketplaces. And I think there's a growing sense, certainly from the Congress, a thriving US capital markets industry, a broadly defined one, is good for US competitiveness, because, to the extent to which you lower that cost of capital or enable US firms to be able to compete, not just in the United States, but to compete in other countries and to facilitate that, that is good for US competitiveness.

So we're very much dependent on what regulators decide to do. The good news is that the last 15 years of, if you will, re-regulation coming out of the global financial crisis, I think regulators can declare victory to a very, very high degree. If you think about what the problems were back then, how those institutions have performed back then, the amount of capital that's in there, the amount of safety nets in there, and they've done that and have still been able to grow their competitive position relative to non US financial institutions. We've got a competitive industry.

And that competitive industry, to the extent to which it's supported by policy and regulation, as opposed to policy and regulation getting in the way of it, should be good for the industry and therefore should be good for us. Again, I go back to, investment economies are really important. Countries can grow in the short term through direct transfers from, if you will, government to industry, but that tends not to be a great allocator of capital. It might be a great way to get things going, but we've not seen really great examples of highly efficient industries and highly effective industries and lots of innovation coming out of state-owned enterprises. You need to have that investment economy develop so you can get efficient allocation of capital and capital that's allocated to the highest and best uses. And I think now for decades the US financial and investment economy has demonstrated them.

TG: Thinking about what you're looking forward to this coming year for State Street, the growth drivers that excite you the most, whether it's on a business unit side or a geography side. Actually, let's start there on regions or geographies. You talked about the sort of developmental economics of economies and how they transform themselves via investment.

For us as a firm, are there any regions that you think of as untapped opportunities where we can grow and thrive in?

ROH: There are. I mean, we have an extraordinary footprint. We have people in now 30 countries and we operate in close to 60 countries and that number should continue to go up. From a regional perspective, as you know, we've been in the Middle East for a long time, but we have doubled and tripled down our investment there because that region has moved from an exporter of capital where the role that we and others played was helping them allocate capital outside of the region to, now, they're trying to not just allocate that capital in the region, but to actually create their own investment economies to enable that kind of investment in the region.

If you're in a region that wants to develop, it’s a banking-based market and you want to develop an equity market, well, firstly you got to get some breadth to that market. You need some things like ETFs and those kinds of things to facilitate investment in it. You need some protections in there. And we play a role in all of that. So the Middle East has been attractive for a while and will continue to be attractive.

Latin America's gone through all sorts of its own stresses. The good thing about stresses are if you fix it right – and I would use it as example, a place that fixed it right is Brazil – you come out with a stronger system. So we see opportunity in Latin America now.

All these emerging markets are going to be challenged depending on what happens in terms of, for the short term, trade wars and things like that. But in terms of long-term fundamentals, we’re a 232 year old company, we do like to think in the long term we want to go where investment markets are developing.

The second area though I would describe and what I'm excited about is this idea of the continued democratization of investing. And I mean that's a fancy way of saying that we're able to provide sophisticated products and capabilities to an ultimate user that's smaller than it was in the past.

The best example of this is private equity. We were having this conversation 10 years ago, private equity was an interesting thing for pension funds. We're taking $50 million stakes in the latest Blackstone fund.

Today it's about $50,000 allocations that are sold to you through your advisor. That takes technology and infrastructure to be able to do that on both sides, for the distributor to be able to do it and for the provider to be able to provide it. So we see lots of opportunity there.

The other area that does excite me is around, believe it or not, the US Retirement system. Because as sophisticated and as large as our 401k system is – and 401k investors are the ultimate long term investors – there's very, very little that's allocated to illiquids and therefore there's been a denial of the illiquidity premium to what are really the most stable and long-term investors.

A lot of that has been because there's been a fixation on fees as opposed to after-fee return. And I suspect you'll see in this next administration as more balanced. Look at that and, listen, you don't want to put a bunch of retirement investors into bad products, but you do want to make available to them high-quality products that enable them to get the kind of returns that the rich and institutions can get. And I think there is a changing mindset in that.

TG: Yep. Clients of course sit at the heart of all of these initiatives.

For us, what would you say are the key priorities that we have to address in meeting their needs this year?

ROH: There's three things that we have to do for our clients. One, very high levels of service quality. Two is innovation. New products that are better than what our competitors are doing. And then three, in those areas where we're playing an investment function, which would be SSGA and also Global Markets, what is our investment performance?

And in all three of those areas we've now put together several years of a great track record, right? Terrific products are coming out, they're now getting take up from our clients. Service quality is at very high levels. You've seen the NPS scores, just an extraordinary increase in promoter scores from our client base. And investment performance is high. So we've got the fundamentals together and that should mean as those broad trends that I'm describing are out there, we should be able to disproportionately be rewarded for them.

TG: This may be a tangent, but you mentioned the democratization of finance and I thought it was interesting in that I had a question for you about digital assets. These have caught the market's attention again. Price going up tends to do that. It will depend on whether enthusiasm continues to last or not. But we have an administration that looks as though it's going to be very friendly to digital assets and development of blockchain technology.

And so I wanted to see where that fit into the strategy and if there's anything to come from us that you're excited about there.

ROH: Top level answer: I'm very excited. But I do want to distinguish between crypto assets and digital assets.

And crypto is an asset class. You have to make your own decisions on it. What are the long-term fundamentals there? Personally, I think that to the extent to which we're going to allow it, we ought to put the same kind of scaffolding around it that we've put around everything else. To me it makes no sense that you've got a regulatory environment that prevents somebody like us from being able to custody those assets. And we can't custody those assets because of the capital rules that have been imposed on banks.

So what's the net result here? Either you've got self-custody or you've got custody being done by non-bank custodians. And if you look at all the major financial crisis that we all write about, you know, going back to Ponzi and Madoff, or for that matter recently with Sam Bankman-Fried, what's the universal theme there? You didn't have a third-party custodian and so at very least we need to sort that out.

I'm really excited though about the digitalization of assets because at some level it does advance this democratization thesis. All of a sudden you can take better real estate like the one I'm sitting in here and be able to create digital tranches of it, enable free and easy trading of that such that it can be owned in fairly small portfolios, or even a diverse portfolio can be put together at a fairly small level. It should take a lot of inefficiency out of the system.

And this is both a threat and an opportunity for us. To the extent to which there's inefficiencies in worthy intermediaries, that's taking care of the inefficiency. If you take those out, then no point in having the intermediary. But that means that we just have to play a different role in it in terms of the digitalization.

But there's new risks that will come out of this. The challenge with digitizing assets is that it's not so much that you're custodying the bits and the bytes, but that you’re in custody of the keys around it and lose those keys, you're in a real issue. So it means we'll have to innovate, too.

But to the extent to which you can actually lower settlement periods, I mean, it's, it's crazy to me that, you know, we've just gone to T +1 and now there's noise around T +0. Yet we take, you know, 12, 13, 14 business days to settle a trade in a bank loan. Let's digitize that and get that down to a reasonable level. And it's that kind of that technology has that promise again.

The scaffolding needs to put around it, standards need to be put in place, the regulatory structure needs to change. And I think that you do have an administration, at least from its rhetoric, that's willing to look at this and support that business when it comes to things like crypto. We also have to recognize that a lot of the users of [crypto] are not good users, just like a lot of users of cash are not good users. So how do you think about the whole AML side of this? So, like any opportunity, there's issues around it, but I think it's something that we ought to have policies that promoted, as well as promoting safeguards and protections.

TG: Well, this is all about the future of finance. And I know you're about to head off to Davos for the World Economic Forum where all sorts of issues like this are discussed. And I know you've been there before, but for those of us who haven't, I always kind of wonder what happens there.

Can you talk a little bit about your experiences there and what you hope to achieve when you're there in the coming weeks?

ROH: I probably spend two thirds of my time with existing clients. So it's a way to, in a fairly efficient form, get caught up with clients, but it's also an opportunity to meet new people and not just from a prospecting for business. For example, last year I spent a lot of time with the AI people and really trying to understand not just the use cases for it, but how are those that are building all these technologies, how are they thinking about the things such as power consumption and those kinds of things. So it's a way to satisfy curiosity pretty quickly.

I think that Davos always tends to be dominated by whatever the topic du jour is. AI will be one of those topics, but I also think some of the policy and geopolitical concerns that we talked about at the beginning of the hour here will also be part of that. Lots of conversations on that too.

TG: Well, we wish you the very best on your travels, Ron. We will certainly be keeping an eye on what comes out of the forum. We'll keep an eye on the things you've talked about today, of course, and what they mean for State Street. In fact, a lot of the things we covered today will also appear in a 2025 Outlook piece that should be on our corporate website by the time this comes out. The website is statestreet.com the piece will be called Market Signals and Shifts. And our guest today again, unbelievably, was Ron O'Hanley. Ron, again, thanks so much, very much.

ROH: I enjoyed the conversation.

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