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Speaker 3: Let's just remind everybody, here's what happened FED officials. You
Speaker 3: heard it from Charlie leaving interest rates unchanged, continuing to
Speaker 3: pencil in two rate cuts in twenty twenty five, saying
Speaker 3: uncertainty over the economic outlook was still high but had diminished,
Speaker 3: and that effect can be kind of patient, it seems
Speaker 3: like as it awaits more information, here's fetchirt J.
Speaker 4: Powell.
Speaker 5: We feel like the right thing to do is to
Speaker 5: be where we are, where our policy stance is, and
Speaker 5: just learn more. In particular, we feel like we're going
Speaker 5: to learn a great deal more over the summer on tariffs.
Speaker 5: We hadn't expected them to show up much by now,
Speaker 5: and they haven't, and we will see whether the extent
Speaker 5: to which they do or overcoming months. And I think
Speaker 5: that's going to inform our thinking.
Speaker 3: All right, That of course was fedya Jay Powell earlier
Speaker 3: at the FOMC press conference.
Speaker 6: Let's get to it.
Speaker 3: Let's get more on the investment landscape, also the rate landscape,
Speaker 3: and how the FED decision and commentary may affect all
Speaker 3: of it.
Speaker 6: Are we all going to kind of just wait for
Speaker 6: the next FED meeting?
Speaker 3: Ross Mayfield is with us, these investment strategists at BAIRED
Speaker 3: Private Wealth Management from Louisville, Kentucky.
Speaker 7: Also with us.
Speaker 3: Bloomberg Intelligence chief US interest rates strategist Ira Jersey out
Speaker 3: there in New Jersey.
Speaker 6: Hey, Ira, I want to kick it off with you.
Speaker 6: Some went into this meeting truly.
Speaker 3: I was listening to Bloomberg Television's coverage, really TV and
Speaker 3: radios coverage of the FED decision. Some said it was
Speaker 3: going to be boring. Some expected not much to happen.
Speaker 3: Others said it's never.
Speaker 8: Bell, It's never boring for us, right.
Speaker 6: Well, sometimes it is.
Speaker 3: And then others said it was going to be historic
Speaker 3: because all that is coming at the FED right now.
Speaker 6: Why was there such a gap going into this meeting?
Speaker 4: Yeah, I think there's some people who think that, firstly,
Speaker 4: that the Federal Reserve does have to cut interest rates
Speaker 4: because they see cracks in certain parts of the economy.
Speaker 4: And then there's other people who are fearful of tariffs
Speaker 4: and think that, you know, inflation might increase. And you
Speaker 4: even heard that the last question, which was about how
Speaker 4: come no one was projecting rate increases even though there
Speaker 4: were a number of members who were thinking the Fed
Speaker 4: is going to be on hold for the entire year
Speaker 4: and then cut a bit next year.
Speaker 9: You know, I this was as I expected.
Speaker 4: And what's always interesting about this, you know, and we
Speaker 4: have to as market professionals kind of parse every single
Speaker 4: thing coming out of the FED Reserve.
Speaker 9: Is the reaction function? Right? What is the Fed's reaction function?
Speaker 4: So we heard a number of if van statements from
Speaker 4: Jare Powell, and you know, those ifan statements could mean,
Speaker 4: you know, give us at least a little bit of
Speaker 4: an indication under what circumstances, don't make any kind of
Speaker 4: policy adjustments.
Speaker 8: Hey, Ross, come on in here and just give us
Speaker 8: your general overview of how the meeting went, your expectations,
Speaker 8: Where they met, where they not met. What was your
Speaker 8: big takeaway?
Speaker 9: Yeah?
Speaker 8: I think they were largely met.
Speaker 10: I mean, I don't know anyone who expected much action
Speaker 10: at this meeting or a resolution of all the uncertainty
Speaker 10: that they've been discussing at this meeting. Given that we're
Speaker 10: still in this kind of tariff pause, you know, we
Speaker 10: have the potential for oil prices to swing and impact
Speaker 10: headline inflation.
Speaker 8: So I didn't expect much.
Speaker 10: I'm on the side of the camp that thinks the
Speaker 10: FED should be a little more aggressive and cutting. I
Speaker 10: think the cracks in the labor market are starting to
Speaker 10: really accumulate. And to hear Finch, our pals say that
Speaker 10: the labor market is I forget the exact language, but
Speaker 10: on solid footing.
Speaker 8: Yeah, he wouldn't agree with you. I think Ross that
Speaker 8: the cracks are starting to appear. What data are you
Speaker 8: paying attention to that he's not And.
Speaker 3: Perhaps that headline Microsoft planning thousands more job cuts you.
Speaker 6: Know that we saw.
Speaker 10: Certainly, yeah, certainly, the anecdotal evidence of layoff is rising.
Speaker 10: But if you look at something like warn notices or
Speaker 10: initial claims and continued claims, I mean we're sitting at
Speaker 10: multi year highs for a lot of those levels.
Speaker 9: If you look at some.
Speaker 10: Of the employment statistics about people fresh into the job
Speaker 10: for us out of college. You know that the unemployment
Speaker 10: rate there is at not record highs by any means,
Speaker 10: but is significantly higher than the overall on employment rate.
Speaker 10: So I think it's a labor market where we have
Speaker 10: tight supply, and especially in this you know, given the
Speaker 10: immigration policy, but it is not a robust labor market,
Speaker 10: and we are well north of a neutral policy. I
Speaker 10: think that getting to neutral should be more more of
Speaker 10: a goal for the Fed, who doesn't seem to want
Speaker 10: to get there until the end of twenty twenty six
Speaker 10: if you look at the CCP.
Speaker 6: All right, come on in airah, yeah.
Speaker 4: So I just want to want to say I think
Speaker 4: that's part of this debate, like where is neutral? And
Speaker 4: you know, there's you know, the Fed will say that
Speaker 4: they're still have restrictive policy, but a lot of the
Speaker 4: other information that that's some of us, me included, have
Speaker 4: looked at suggests that actually they're probably pretty close to neutral.
Speaker 4: So unless there's a deceleration of the economy, the Fed
Speaker 4: probably doesn't have to adjust interest rates.
Speaker 9: Now.
Speaker 4: The question is, and to Cross's point, like they can't
Speaker 4: wait until the economy is clearly really bad before.
Speaker 9: They cut interest rates.
Speaker 4: But I do suspect that because of this overhang of
Speaker 4: inflation and the recent past episode that we just had,
Speaker 4: that the Fed will try to wait until almost the
Speaker 4: last minute, and then once it cuts, it'll cut faster.
Speaker 9: And I go back to the statement that J.
Speaker 4: Powell made in May at at the press conference, where
Speaker 4: he said, like, look, we know how to deal with
Speaker 4: a weak economy. We could just cut more aggressively and
Speaker 4: get down below the neutral rate to stimulate the economy.
Speaker 4: We don't want to have to go the other way
Speaker 4: and have to hike interest rates rate if inflation were
Speaker 4: to remain relatively high.
Speaker 8: Hey, Ira, a couple more to you, and then we're
Speaker 8: going to bring ross back in here. But I'm wondering
Speaker 8: about a couple of things here. One specifically, is the
Speaker 8: question of AI and the labor force. The bed chair
Speaker 8: was asked about that, Carol, and I cannot stop talking
Speaker 8: about this. What did you make of the way that
Speaker 8: he answered this question about AI and the effect on
Speaker 8: the labor face feels like.
Speaker 3: There's a pig pile of all of a sudden, people
Speaker 3: are waking up and saying, Okay, there's going to be
Speaker 3: a lot of jobs lost because of AI.
Speaker 9: Well, there's always disruptions.
Speaker 4: Whenever you have new technologies, there's always disruptions and you
Speaker 4: wind up having you know, layoffs in some sectors, and
Speaker 4: then the new economy creates other jobs and new jobs.
Speaker 4: We've done that over centuries since, you know, even before
Speaker 4: the Industrial Revolution, you've always seen you know, things replacing
Speaker 4: other things. I mean, we did it thirty years ago.
Speaker 4: Right when you think about the Internet, and you know
Speaker 4: in nineteen ninety five, very few firms had websites. Yet
Speaker 4: today everyone does, right, and this is kind of an
Speaker 4: extension of that. So we created a whole new economy
Speaker 4: around the Internet that now is creating more jobs. Whereas
Speaker 4: robotics and other things like manufacturing, they're less people are
Speaker 4: needed to do the same amount of work in labor
Speaker 4: than was needed in nineteen seventies.
Speaker 6: H So true.
Speaker 3: Socho hey, Ross just got about twenty five seconds left here,
Speaker 3: Mike McKee saying, nobody on the committee has any conviction
Speaker 3: on these forecasts, so don't take us seriously on the
Speaker 3: rate cuts. Things will change. That was kind of the
Speaker 3: message that Mike took away, and he says that maybe
Speaker 3: kind of means for the Bloomberg audience, don't invest on
Speaker 3: this FED decision fifteen seconds.
Speaker 6: Do you agree?
Speaker 10: Yeah, I don't think you can take much away from
Speaker 10: this FED decision in terms of actionable investment items. I
Speaker 10: think you need to watch the long end of the curve,
Speaker 10: and for that you need to watch things like the
Speaker 10: budget deficit and service sector inflation. So that's what I'm watching,
Speaker 10: and I think you go long deration here.
Speaker 3: All right, great duo Ross Mayfield Investment strategis ad baired
Speaker 3: Private Wealth Management, our own IRA Jersey chiefos interest rate
Speaker 3: Strategies at Bloomberg Intelligence.
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Speaker 8: The Israeli Ron conflict, the more than three year old
Speaker 8: war between Russia and Ukraine, the US LED tariff for
Speaker 8: changing geopolitical relationships, Carol, These are all things that can
Speaker 8: and do affect global investment flows.
Speaker 3: Yeah, it's kind of interesting at a moment in time
Speaker 3: where where they're rethinking whether or not the US is
Speaker 3: uninvestable and also questioning the dominance of the US dollar.
Speaker 3: We should point out as Alex Steel mentioned in our
Speaker 3: TV simulcast, foreign treasury holdings holding your record high in
Speaker 3: the month of April.
Speaker 6: So foreign investors are.
Speaker 8: They're not selling well foreign investors.
Speaker 3: It sounds like, at least not when it comes to treasuries,
Speaker 3: which is what we kind of keep watching so closely.
Speaker 3: All of this tie it all up, and especially when
Speaker 3: it comes to foreign direct investment. It is the world
Speaker 3: of our next guest, and it's so great to have
Speaker 3: back with us in studio, Michael Lohan, CEO of IDA Ireland.
Speaker 3: It's the Foreign Direct Investment Agency of the Irish government.
Speaker 6: Hello, Hello, how are you?
Speaker 7: I'm good carel good to be back in tint.
Speaker 3: There's a lot coming at everyone, and I'm not even
Speaker 3: quite sure to begin. Just give us a good Macro
Speaker 3: overview as you think of the things that the G
Speaker 3: seven leaders we're facing this week are facing this week.
Speaker 3: The war is the conflict certainly top of mind, and
Speaker 3: you know we're having this interview in real time and
Speaker 3: things are going to continue to develop. But how do
Speaker 3: you see the environment right now? Is it continuing to
Speaker 3: be an uncertain one?
Speaker 1: I think that's the word that you'd have to you'd
Speaker 1: have to use is uncertainty, and you know when we
Speaker 1: last met actually just that in March of this year.
Speaker 1: I think we've gone through a lot in those in
Speaker 1: those intervening weeks, to be honest, probably as much as
Speaker 1: I've seen in my career in foreign direct investment. A
Speaker 1: lot has happened in a very short space of time.
Speaker 1: And when you think about from from the tariffs in
Speaker 1: terms of what tariffs means, where they're going to be pulled, composed,
Speaker 1: at what level and what time frame, A lot of
Speaker 1: those questions still remain unanswered as we sit today, and
Speaker 1: I think from a European perspective, we are very clear
Speaker 1: that you know, bringing negotiation, trying to get to a
Speaker 1: point of aspos consensus around what this looks like. It's
Speaker 1: so critically important for investment flows and indeed for the
Speaker 1: economic prosperity of the world, you know, whether it's the
Speaker 1: US or whether it's the Europe, or indeed whether it's
Speaker 1: the Asia. So that's a that's a real area of
Speaker 1: focus from from a European perspective and indeed the Irish
Speaker 1: government perspective, and of course you're correct, this is all
Speaker 1: against the backdrop then of some other conflicts across the world,
Speaker 1: and you know, we see that increasing, so you know,
Speaker 1: it's we're very mindful of that in the context of
Speaker 1: trade flows and trade investments as well, because that brings
Speaker 1: another level of uncertainty into the equation.
Speaker 8: Yeah, it's been pretty much exactly three months since we
Speaker 8: last saw you. You were here in New York, right
Speaker 8: before you went to Washington with the Prime Minister to
Speaker 8: visit the White House. That'so you met with the President,
Speaker 8: You met with his team. How did the meeting go?
Speaker 7: So, so you're correct the last time was here. I
Speaker 7: left them.
Speaker 1: I went to d C with on t shock or
Speaker 1: our Prime minister. The medium went very well actually, and
Speaker 1: I think actually it was was. In reflecting on it,
Speaker 1: you'd say that, you know, the President was actually very
Speaker 1: gracious in terms of his engagement. Yes, there was fourth
Speaker 1: Right discussions and you know he talked about the challenges
Speaker 1: in terms of trade, trade deficits in particular.
Speaker 8: This was before all the teriffs were announced.
Speaker 7: Yeah, this is before.
Speaker 1: But remember this was all very you know, it was
Speaker 1: all very live and active at that point because you
Speaker 1: were this we were talking about this is the fifteenth,
Speaker 1: sixteenth of March, so it was all becoming very transparent
Speaker 1: or apparent as to what was what was going to
Speaker 1: come down the tracks. So I would say that that
Speaker 1: that that meeting and engagement very much reflect this the
Speaker 1: relationship which is one hundred years between Ireland and the US,
Speaker 1: and I think in any relationship there can be pints
Speaker 1: of let's call this discussion, and that was the discussion
Speaker 1: that we had, but it would think it was very
Speaker 1: respectful on both on both sides.
Speaker 3: Michael, what changes have you guys seen in investment flowers?
Speaker 3: What are you seeing from your bead point?
Speaker 1: Yeah, so what we're seeing today, actually, Carol, it's interesting.
Speaker 1: So I can sit here today and actually in two
Speaker 1: weeks time I'll be sharing with her Minister Peter Burke
Speaker 1: are results for the first half of the year, and
Speaker 1: when I can't disclose them to you on air, what
Speaker 1: I could, yeah, but I won't. But what I can
Speaker 1: say is this is that we continue to see investment flows.
Speaker 1: In fact, it is a power with last year in
Speaker 1: terms of the first half of last year, which is
Speaker 1: maybe somewhat maybe surprising giving the level of uncertainty that
Speaker 1: you see across the globe. But the reasons where we
Speaker 1: see that is and we're seeing across a number of
Speaker 1: different areas. We're seeing reinvestment in research and innovation continuing
Speaker 1: and companies looking to double down on their investments in
Speaker 1: Ireland in innovation. We're also seeing a lot of investment
Speaker 1: as well in terms of new entrance into the Irish economy,
Speaker 1: which is really important. And that's because they're looking for
Speaker 1: global marketplace, stable locations where they who's just trusted and proven,
Speaker 1: I believe, and that's what they're seeing in Ireland. In
Speaker 1: terms of the future world.
Speaker 3: I know you can't reveal all, but I am curious
Speaker 3: so on that where there's new investments coming in. Are
Speaker 3: there conversations you're having with entities, global companies, US companies
Speaker 3: who say we want to do more stuff with you
Speaker 3: guys because we don't necessarily want to be in the
Speaker 3: US or other like give me an idea if there's
Speaker 3: anything that's a repercussion or you know, the result of
Speaker 3: an action by the White House.
Speaker 1: Yeah, So I don't think it's it's a scenario of
Speaker 1: we don't want to do it in location A, so
Speaker 1: we're doing location B. I actually think companies are looking
Speaker 1: to actually how can.
Speaker 7: We grow our business?
Speaker 1: Where can we grow that from what markets do we
Speaker 1: want to serve and where can we get the skills.
Speaker 7: Or are the policies that support that.
Speaker 1: That's really what we're seeing and what we do in
Speaker 1: Ireland is that, you know, we make sure we bring
Speaker 1: is stability and certainty to those areas of policy in
Speaker 1: terms of talent and talent availability, not just Irish talent,
Speaker 1: but international talent. These are the pieces that are setting
Speaker 1: I believe investors apart when they're looking at locations around
Speaker 1: the globe, because I said previously at the very core
Speaker 1: of the IE and of multinational companies, they look to
Speaker 1: international markets. They need international markets, they need international supply chains,
Speaker 1: they need international talent. That's what they need in order
Speaker 1: to be successful. And that success isn't just success in
Speaker 1: the country they're located in, It actually comes back to
Speaker 1: their entire supply chain.
Speaker 8: We're speaking to you on today where we heard from
Speaker 8: the FED chair and there are a lot of questions
Speaker 8: about what the labor market looked like. The takeaway that
Speaker 8: I got from him, Carol, and I think you'd agree
Speaker 8: with this is that he really likes where the labor
Speaker 8: market is right now. And then despite what anecdotes people
Speaker 8: hear and what people are saying, there are not cracks
Speaker 8: starting to appear. Things are looking pretty strong. Explain to
Speaker 8: us the labor market in Ireland right now in the
Speaker 8: context of these companies, especially tech companies battling it out
Speaker 8: for top tech talent for AI.
Speaker 1: Yeah, and I think you're just to use it the
Speaker 1: comment in terms of the Fed's comments this afternoon of
Speaker 1: the labor market, actually, Irish labor market is somewhat mirrors.
Speaker 1: I think what the FED has has mentioned today. It's
Speaker 1: robust where like you know, we're almost at full employment.
Speaker 1: So there is actually I think for economies that are
Speaker 1: performing and have a strong underlying fundamentals that is I
Speaker 1: think that's mirrored across many economies across the globe. And
Speaker 1: the key is in this context is you're correct, there
Speaker 1: is like talent availability and is probably this key differentiator
Speaker 1: for success for whatever business you're in or whatever sector
Speaker 1: you're in. And that's why I believe that multinational companies
Speaker 1: look they see talent as global.
Speaker 7: They don't see it as within a geography or within
Speaker 7: a region.
Speaker 1: They see it as global. And I think that's what
Speaker 1: we have to continue and we're very we're very as
Speaker 1: suppose attuned to the fact that not howlone do we
Speaker 1: have to generate our own talent, but we have to
Speaker 1: be able to track the best talent to Ireland, and
Speaker 1: we have to create the conditions in which they can prosper,
Speaker 1: which they can live, and which they can and enjoy
Speaker 1: life as well.
Speaker 11: Well.
Speaker 3: I'm also curious because there is a lot of pressure
Speaker 3: from this administration, the President specifically for US based companies,
Speaker 3: US based multinationals to do more in the United States.
Speaker 3: Having said that, I think about a company like Microsoft,
Speaker 3: who has been in Ireland in for four decades or so, correct,
Speaker 3: I'm just curious, you know, is any of that relationship
Speaker 3: that you folks have, and especially the investments that Microsoft
Speaker 3: has made and maybe continue to do, has any of
Speaker 3: that changed?
Speaker 1: To be honest, it hasn't. And if you think about
Speaker 1: your correct, Microsoft celebrated it's fiftieth birthday actually since we
Speaker 1: last spoke, and forty of those fifty years have been
Speaker 1: in Ireland. And when when when Actually, when we celebrated
Speaker 1: Microsoft's fortieth birthday in Ireland, they spoke about how important
Speaker 1: Ireland was to the Microsoft's success, not just Microsoft Ireland,
Speaker 1: but Microsoft the corporation because that's what it really is
Speaker 1: is embedded. And when we look at companies like Microsoft
Speaker 1: and the many more companies that we have in Ireland,
Speaker 1: there are there are multi decade investments, there are you know,
Speaker 1: trusted long term partnerships with IDA and with the Irish,
Speaker 1: with the Irish government, and that's what really brings that
Speaker 1: success back. And what we have to be conscious of
Speaker 1: as well is that we need to make sure that
Speaker 1: we actually have we're meeting the future needs of industry
Speaker 1: as well. So that means people, it means infrastructure, and
Speaker 1: it means policy, and that's very much what we're focused on,
Speaker 1: what Irish government or folks.
Speaker 8: We'll go back to my question about AI specifically. Carol
Speaker 8: mentioned there were some layoffs at Microsoft.
Speaker 9: Today.
Speaker 8: There are hundreds of thousands of people who work at
Speaker 8: Microsoft and we know thousands.
Speaker 3: Is that the latest report, Carol, Yeah, some more job
Speaker 3: cuts in salespeople, I think they were saying.
Speaker 8: And it's about making sure that you have the workforce
Speaker 8: that these tech companies need. J Powell was asked the
Speaker 8: same question, what is going to be effect of AI
Speaker 8: on the workforce? Yes, what is it in your view
Speaker 8: and how do you make sure that it doesn't decimate
Speaker 8: a workforce, like the CEO of Anthropic dom Dario Amidae
Speaker 8: said recently.
Speaker 7: So I think you're correct.
Speaker 1: We need to be conscious of the fact that AI
Speaker 1: is going to be a technology and is a technology
Speaker 1: that's going to revolutionize. In fact, we see it all
Speaker 1: in our day to day lives and their day to
Speaker 1: day work. What we're looking at from an idea perspective
Speaker 1: is we're trying. We have very much looked at where
Speaker 1: is the opportunity for AI to bring efficiency and bring
Speaker 1: productivity gains.
Speaker 7: But secondly, then how do we make.
Speaker 1: Sure that where there are risks, we are upskilling and
Speaker 1: reskilling that workforce for future and new new technologies. And
Speaker 1: that's our real focus is in our new strategy. Just
Speaker 1: to say this, for the first time, we have put
Speaker 1: a public target and upskilling and reskilling of the workforce,
Speaker 1: so forty thousand people we are committing to to upscale
Speaker 1: and rescale and that's actually not just to meet AI,
Speaker 1: but to meet all technological changes that's coming.
Speaker 6: Michael just got about thirty seconds.
Speaker 3: I'm just curious about what's Ireland's relationship with China and
Speaker 3: what do you think it is going forward?
Speaker 6: Just quickly Yeah.
Speaker 1: So with China, our relationship has been the same and
Speaker 1: the same with the European Union. I suppose it's d risk,
Speaker 1: but don't the couple We see opportunity, but we also
Speaker 1: understand that we need we need to do that balance
Speaker 1: between the risk and the coupling, and we will continue
Speaker 1: to do that.
Speaker 3: Is China being more aggressive though and reaching out to
Speaker 3: a country like.
Speaker 1: Your own, I can't say this. I think we have
Speaker 1: offices in China, We have offices all across Asia, so
Speaker 1: I think it's no different to dat than it was
Speaker 1: this time six months ago.
Speaker 3: Trying to just get an idea right as we look
Speaker 3: get geopolitics and new relationships being formed, whether or not
Speaker 3: you know John has certainly there's been reporting that as
Speaker 3: the US backs off, kind of looking to kind of
Speaker 3: step in, but not necessarily.
Speaker 7: Not evident of this juncture. Yeh.
Speaker 6: Be well, be well. We know you travel a lot,
Speaker 6: so stay safe.
Speaker 3: Michael Lowan, chief executive Officer of IDA Ireland, joining us
Speaker 3: here in our Bloomberg Interactive Broker Studio.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 8: As Kate Sullivan told us earlier this hour, Bloomberg News
Speaker 8: White House correspondent, the President's latest meeting to discuss the
Speaker 8: conflict in the Middle East is ongoing right now. Earlier,
Speaker 8: the President remained qui about whether the US plans to
Speaker 8: join Israel's offensive aim at destroying Uran's nuclear enrichment program.
Speaker 8: What exactly is that nuclear enrichment program? What exactly is
Speaker 8: Iroon's strategy. Is it for weapons or is it for energy?
Speaker 8: Is it even close to having a nuclear weapon? These
Speaker 8: are all questions that we talked about in preparation for
Speaker 8: this segment today. We've got a great voice on this.
Speaker 8: Heather Williams is the director of the Project on Nuclear
Speaker 8: Issues and a Senior Fellow in the Defense and Security
Speaker 8: Department at these Center for Strategic and International Studies. She's
Speaker 8: also an associate Fellow with the Project on Managing the
Speaker 8: Atom in the Belfer Center for Science and International Affairs
Speaker 8: at the Harvard Kennedy School. She joins us this afternoon
Speaker 8: from Boston. It's good to have you with us, Heather,
Speaker 8: thanks for taking the time. I think a place we
Speaker 8: want to start is just getting an understanding of exactly
Speaker 8: what the capabilities Iran has right now when it comes
Speaker 8: to nuclear energy and weapons. What do they have?
Speaker 11: Yeah, well, thanks so much Carolyn tim for inviting me on.
Speaker 11: So we before we talk about what they have right now,
Speaker 11: I want to just very quickly say what they had
Speaker 11: a week ago, because there's a big difference between then
Speaker 11: and now. A week ago, iron had a nuclear enterprise
Speaker 11: involving thirty different facilities spread out across the country. It
Speaker 11: was enriching to sixty percent its uranium, which is well
Speaker 11: above the amount that you need for civilian purposes.
Speaker 12: It also had some ballistic missile.
Speaker 11: Capabilities, and so this was a really concerning program. And
Speaker 11: the day before the Israeli strikes, the International Atomic Energy
Speaker 11: Agency actually found that Iran was in breach of its
Speaker 11: non proliferation obligations for the first time since two thousand
Speaker 11: and five. So there was this really expansive program. Where
Speaker 11: that program stands now is a very different picture.
Speaker 12: One of the.
Speaker 11: Biggest enrichment facilities, Naton's, has essentially been destroyed and that
Speaker 11: is partially because of the power being cut the targeting
Speaker 11: of the structure itself.
Speaker 12: But there's one big piece.
Speaker 11: Of Iran's nuclear program that remains, and that is the
Speaker 11: four Doah enrichment facility, which is buried really deep underneath
Speaker 11: the mountain, and Israel has had a few strikes on Fourdah.
Speaker 11: That facility still remains, but for the most part, a
Speaker 11: lot of Iran's other nuclear facilities and capabilities have been
Speaker 11: significantly impacted by the Israeli strikes.
Speaker 6: So how long does it take to kind of.
Speaker 3: Rebuild all of this if that is ultimately Iran's plan.
Speaker 12: Yeah, it's an unsatisfying answer.
Speaker 11: We don't know because it really depends on the extent
Speaker 11: of the damage.
Speaker 12: But it also really depends on.
Speaker 11: What President Trump is going to decide, probably in the
Speaker 11: next days or weeks, because that Florida facility is going
Speaker 11: to be really crucial if Iran does want to rebuild
Speaker 11: a race to having a nuclear weapon in the near future,
Speaker 11: because that's where a lot of the higher enrichment was happening.
Speaker 11: It's a place where iron stockpile could be transported to.
Speaker 11: And so if that facility endures and Iran continues to
Speaker 11: use it. In that case, some estimates had said that
Speaker 11: Iran was just weeks away from.
Speaker 12: Having a nuclear weapon.
Speaker 11: Now if that facility is destroyed, that will probably set
Speaker 11: Aron back by a significant amount of time. But the
Speaker 11: answer to that question, we just don't know. But we
Speaker 11: probably will know a lot more in the next few days,
Speaker 11: assuming that President Trump makes a decision.
Speaker 8: Do you think Florida can be destroyed without using the
Speaker 8: GBU fifty seven.
Speaker 12: It would be really, really difficult.
Speaker 11: It would require sustained Israeli strikes using their own bunker
Speaker 11: busting bombs, which are a lot smaller than the GBU
Speaker 11: fifty seven, and even then it's not clear that those
Speaker 11: sustained strikes would get the job done. Another option would
Speaker 11: be an Israeli sabotage mission such as cutting the power
Speaker 11: to four Do Doh, or some sort of commando mission
Speaker 11: on the ground, such as go and getting folks into
Speaker 11: Fourdoh to blow it up from inside. That might be
Speaker 11: one option for probably having the higher likelihood of success
Speaker 11: of just throwing Florida, But for air strikes, it's really
Speaker 11: hard for the Israelis to do this without US support.
Speaker 11: I do think it's important to point out, though, that
Speaker 11: the US strikes on Florida.
Speaker 12: If they do come to fruition, this might not be
Speaker 12: a one and done mission.
Speaker 11: It would be difficult, I think for the US to
Speaker 11: be able to take out all of Flouridah with one
Speaker 11: of these bombs.
Speaker 12: And the reason for that is Florida is buried so deep.
Speaker 11: Also, we don't know a lot about the extent of
Speaker 11: the Floidau facility.
Speaker 12: There could be additional tunnels even further underground.
Speaker 11: Some suspect that there are facilities buried up to half
Speaker 11: a mile into that mountain, and so the GBU fifty
Speaker 11: seven is probably the best bet for air strikes in
Speaker 11: taking out that facility, but it might require multiple strikes.
Speaker 6: How do you feel? Forgive me?
Speaker 3: And this is with all due respect, but there's been
Speaker 3: so much debate about does Iran have weapons?
Speaker 6: Do they not have weapons? I feel like it's gone
Speaker 6: back and forth.
Speaker 3: So how do we trust the intel or how do
Speaker 3: you determine that you can trust the intel that you've got.
Speaker 12: I love this question.
Speaker 11: It's such an important question because there is all this
Speaker 11: confusion about the intel right now. Right Chelsea Gabbert says
Speaker 11: one thing, the President says another thing, The CIA says
Speaker 11: one thing, central Command says another thing. And I actually
Speaker 11: think this confusion is really really understandable, and a big
Speaker 11: reason for that is how you define a nuclear weapon.
Speaker 11: And I promise I'm not going to get academic about this,
Speaker 11: but it is the difference between if Iron is pursuing
Speaker 11: weaponization technologies, so for example, triggering devices, if you want
Speaker 11: an implosion device, what do you do with all that
Speaker 11: highly enriched uranium.
Speaker 12: It's not just going to sit there. You have to
Speaker 12: figure out how to convert it into.
Speaker 11: A nuclear weapon, versus a nuclear weapons program which requires
Speaker 11: the highly enriched uranium a means of delivery along with
Speaker 11: that weaponization technology. And so if we're talking about that
Speaker 11: weaponization technology, I think those in the Intel community who
Speaker 11: said they don't see evidence of that, that seems to
Speaker 11: be pretty consistent. However, if you count a nuclear weapons
Speaker 11: program as enriching uranium well beyond billion purposes, having secretive
Speaker 11: nuclear facilities, talking about using wiping your neighbor off the
Speaker 11: face of the earth, then that also points towards the
Speaker 11: nuclear weapons program.
Speaker 12: And so I think that there's a lot less daylight.
Speaker 11: On the Intel then sometimes comes across it does just
Speaker 11: require this kind of wonky more nuanced understanding of what
Speaker 11: actually goes into making a nuclear weapon.
Speaker 3: Heather, I have no idea if this is in your purview,
Speaker 3: But I mean, do you think that there is a
Speaker 3: world where Ron says, Okay.
Speaker 6: I'm out, we don't need nuclear weapons just quickly?
Speaker 11: It's hard to envision that world under the current regime.
Speaker 11: They have staked a lot on this nuclear program. I
Speaker 11: don't see many face saving off ramps ahead for them,
Speaker 11: and they can make a pretty strong case and have
Speaker 11: international support for saying that they have the right to
Speaker 11: a civilian enrichment program. But at the same time, I
Speaker 11: don't know how the international community can ever trust them
Speaker 11: again not to pursue a nuclear weapon.
Speaker 3: So you do wonder, you know, does the US take
Speaker 3: the step of potentially using the GBU fifty seven, which
Speaker 3: would be seen as a pretty pretty strong move, and
Speaker 3: then in the long term around still continues to build
Speaker 3: up its nuclear facilities for weapons.
Speaker 8: Yeah, this is the massive bunker buster bomb that we've
Speaker 8: been referring to over the last couple of days that
Speaker 8: can only be delivered by the B two Spirit aircraft.
Speaker 6: So the USN does right.
Speaker 3: This is probably some of the conversations the president is
Speaker 3: currently having, perhaps Heather Williams.
Speaker 6: Thank you so much.
Speaker 3: This is what we were hoping to do for the
Speaker 3: Bloomberg audience, and you did it so well.
Speaker 6: Thank you. Thank you.
Speaker 3: Director of the Project on Nuclear Issues and Senior Fellow
Speaker 3: for Defense and Security at the Center for Strategic and
Speaker 3: International Studies there in Boston.
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Speaker 1: Mm hmm.