WEBVTT - Bloomberg Surveillance TV: March 6th, 2026 0:00:00.040 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.080 Terminal and the Bloomberg Business app. So here's the LASiS 0:00:37.159 --> 0:00:39.879 this morning, the President urging Garan to stand down as 0:00:39.920 --> 0:00:42.880 the Middle East conflict rages into a sixth day to round, 0:00:42.920 --> 0:00:45.800 claiming it's confident it could counter a ground invasion, and 0:00:45.840 --> 0:00:49.000 the US President Tellinggangxios he must be involved in selecting 0:00:49.000 --> 0:00:51.199 Garrant's next leader. Bank with us a good friend of 0:00:51.200 --> 0:00:53.680 this program over the years, the Republican Congressman French Hill 0:00:53.760 --> 0:00:56.400 joins us now for more. Congressman Hill, welcome back to 0:00:56.440 --> 0:00:59.480 the program. Are you satisfied with the rationale for this operation? 0:00:59.720 --> 0:01:04.080 In a well? Jonathan's good to be with you. Yes, 0:01:04.160 --> 0:01:07.120 I am. I mean this has been fifty years of 0:01:07.280 --> 0:01:13.280 counting American bodies the caused at the hands of the IRGC, 0:01:13.840 --> 0:01:19.679 the Kuds Force Iranian IEDs. This has been an on standing, 0:01:19.880 --> 0:01:25.200 long standing gray zone war between Iran and the West 0:01:25.680 --> 0:01:29.360 for all these years. And the President set out the 0:01:29.400 --> 0:01:32.080 goal of they will not obtain a nuclear weapon, and 0:01:32.120 --> 0:01:36.600 we have not been successful in four different presidential administrations 0:01:36.640 --> 0:01:41.199 of achieving that through negotiation. And the Israelis are concerned 0:01:41.280 --> 0:01:47.080 with the advancing ballistic missile development, technology, technology sharing by Iran, 0:01:47.200 --> 0:01:52.080 plus the continued dedication to producing a nuclear weapon, that 0:01:52.080 --> 0:01:55.520 that risk in the region had reached a breaking point. 0:01:55.920 --> 0:01:58.200 There is, as you know, Congressman, a domestic price to 0:01:58.240 --> 0:02:01.840 pay in more ways than one. Unfortunately, for this conversation 0:02:02.000 --> 0:02:03.840 we're going to focus on the market aspect. There are 0:02:03.920 --> 0:02:06.880 much more important issues that play as well, gas prices, 0:02:07.320 --> 0:02:10.760 a climate. What's your assessment of the disruptions to energy 0:02:10.800 --> 0:02:13.360 flows one and two. The kind of remedies that the 0:02:13.400 --> 0:02:14.840 US government can offer right now? 0:02:16.440 --> 0:02:18.160 Well, I think some of the remedies are You've heard 0:02:18.200 --> 0:02:22.760 Treasure's secutary investment talk about supporting the insurance markets. Of course, 0:02:22.760 --> 0:02:26.160 the United States Navy is going to do their part 0:02:26.240 --> 0:02:29.240 to support a transit of the strait of our moves, 0:02:29.280 --> 0:02:33.440 which benefits everyone in the markets. But as you pointed 0:02:33.480 --> 0:02:36.960 out in your reporting, you've just got a risk at 0:02:36.960 --> 0:02:40.320 the margin of Iran striking a production facility or a 0:02:40.360 --> 0:02:44.400 transit ship, and so that has really chilled the oil 0:02:44.440 --> 0:02:46.000 transit market in the Gulf. 0:02:46.560 --> 0:02:47.880 I think this is temporary. 0:02:48.040 --> 0:02:50.080 I think it's going to be handled over the next 0:02:50.320 --> 0:02:51.960 few weeks. I don't think it's going to have a 0:02:51.960 --> 0:02:56.160 permanent impact on the oil markets. If you think about 0:02:56.880 --> 0:03:01.400 Iran's contribution to oil production, eighty percent of it's been 0:03:01.440 --> 0:03:05.080 sold to China, and during the first Trump administration it 0:03:05.200 --> 0:03:08.680 was completely shut down in terms of production due to 0:03:08.960 --> 0:03:13.400 then maximum pressure sanction campaign that was undone by the 0:03:13.400 --> 0:03:16.800 Biden administration with biding letting them back into the oil 0:03:16.880 --> 0:03:20.000 markets and back into the financial markets and freeing up 0:03:20.040 --> 0:03:22.160 a bunch of frozen assets. 0:03:22.960 --> 0:03:24.840 So I think this I. 0:03:24.800 --> 0:03:28.760 Don't believe will have a lasting effect on markets, but 0:03:28.840 --> 0:03:31.440 certainly has an important short term effect as we're seeing 0:03:31.440 --> 0:03:34.360 in oil markets and in the insurance markets. 0:03:34.480 --> 0:03:38.080 Congressman, would you support measures like using and tapping the 0:03:38.200 --> 0:03:41.040 spr the strategic patroil and reserve to try to mitigate 0:03:41.040 --> 0:03:43.080 some of the price increases even in the short term 0:03:43.240 --> 0:03:45.360 that people are already feeling when they go fill up 0:03:45.360 --> 0:03:45.880 their cars. 0:03:47.560 --> 0:03:50.160 Well, I think that's a decision the Treasury Secretary and 0:03:50.280 --> 0:03:52.800 the Cabinet needs to make. If they think that's in 0:03:52.920 --> 0:03:57.520 the right reason, then I certainly would chourage them to 0:03:57.560 --> 0:04:01.400 consider it. We experienced that with Joe Biden during the 0:04:01.480 --> 0:04:05.800 Russian invasion of Ukraine, and it was microscopic. The actual 0:04:07.080 --> 0:04:11.160 hit I mean the sense per barrel from a strategic 0:04:11.160 --> 0:04:15.840 patroyum reserve release or not that measurable. So if the 0:04:15.920 --> 0:04:21.039 whole production and distribution of oil were disrupted, then that 0:04:21.160 --> 0:04:23.919 might make a bigger contribution. But we saw even in 0:04:23.960 --> 0:04:28.680 the Russian case that that was not worth, in my judgment, 0:04:28.800 --> 0:04:32.520 draining the strategic patroying reserve, which Joe Biden did. As 0:04:32.560 --> 0:04:36.800 you know, Europe pivoted and the Gulf pivoted, and the 0:04:36.839 --> 0:04:41.600 sources of both oil and gas quickly replumbed their distribution 0:04:41.800 --> 0:04:44.479 to benefit Europe after that invasion. So I think that 0:04:44.640 --> 0:04:46.800 was a premature decision by Joe Biden. 0:04:47.040 --> 0:04:51.120 Congressman, there also are some strategic questions the Congress has 0:04:51.160 --> 0:04:54.360 to face, including how to prepare the United States better 0:04:54.760 --> 0:04:58.039 and frankly restock some of the munitions that are being depleted. 0:04:58.120 --> 0:05:01.680 There's a fifty billion dollars bill current in your hands, 0:05:01.800 --> 0:05:04.799 in your house, and I'm just wondering, would you support 0:05:05.000 --> 0:05:08.919 an additional funding measure to try to help stockpile some 0:05:09.000 --> 0:05:12.440 additional supplies. Should this be a prolonged conflict, and if 0:05:12.440 --> 0:05:14.120 there are any additional conflicts in the future. 0:05:15.400 --> 0:05:18.280 Well, there was a significant work on that in the 0:05:18.320 --> 0:05:21.400 Big Beautiful Bill last summer. There was nine billion dollars 0:05:22.120 --> 0:05:26.719 allocated to the Pentagon to specifically work on the munitions 0:05:26.760 --> 0:05:31.240 supply chain. We've certainly seen that taken to action in 0:05:31.360 --> 0:05:34.920 Arkansas and Camden, Arkansas, where we've seen a significant increase 0:05:35.000 --> 0:05:40.159 in munitions in rocket engine production the cause of the 0:05:40.200 --> 0:05:44.240 Pentagon's focus on supply chain. Plus, yesterday we just marked 0:05:44.320 --> 0:05:48.240 up in the House Financial Services Committee the Reauthorization and 0:05:48.320 --> 0:05:53.760 Modernization of the Defense Production Act, which specifically focused on 0:05:53.839 --> 0:05:57.719 obviously DoD production, but also the medical supply chain and 0:05:57.720 --> 0:05:59.360 the critical mineral supply chain. 0:05:59.480 --> 0:06:00.440 We think that's good bill. 0:06:00.480 --> 0:06:02.960 It came out of Committee forty one to zero, so 0:06:02.960 --> 0:06:06.560 it's a strong bipartisan bill, and we're working with the 0:06:06.600 --> 0:06:10.840 administration on that, but both the Armed Services Committees and 0:06:10.960 --> 0:06:14.000 the Defense Production Act the Treasury are all working on 0:06:14.120 --> 0:06:17.920 that munition supply chain. But with all that said, and 0:06:17.960 --> 0:06:20.160 the money that we've already set aside in the Big 0:06:20.200 --> 0:06:25.040 Beautiful Bill, I think if military operations continue in the Gulf, 0:06:25.400 --> 0:06:28.000 I think the Congress will be confronted with a supplemental 0:06:28.040 --> 0:06:29.840 appropriation to support that effort. 0:06:30.200 --> 0:06:33.360 Congressman, you want the chair of the Highest Financial Services Committee. 0:06:33.360 --> 0:06:35.480 Of course, now would be a good time to hear 0:06:35.520 --> 0:06:37.880 from Chairman Powell. Are there any plans to have that 0:06:37.880 --> 0:06:39.520 semianual testimony anytime soon? 0:06:40.520 --> 0:06:43.080 You bet. We have invited him. We're trying to find 0:06:43.080 --> 0:06:45.159 a date and coordinate that date with the Senate Banking 0:06:45.200 --> 0:06:48.880 Committee because we typically do those hearings back to back. 0:06:48.880 --> 0:06:50.440 So I hope that that can happen soon. 0:06:51.240 --> 0:06:54.680 Stay with us. Mult Bloomberg surveyan's coming up after this 0:07:04.120 --> 0:07:07.400 rising crude adding to inflation feares potentially for the Federal Reserve, 0:07:07.520 --> 0:07:10.360 Retail gasoline prices in the United States reaching their highest 0:07:10.440 --> 0:07:13.400 levels in eighteen months, the search and energy costs coming 0:07:13.400 --> 0:07:15.720 ahead of fresh routs on the economy with payroll states 0:07:15.720 --> 0:07:18.600 that you are eight thirty Eastern time joining us around 0:07:18.600 --> 0:07:20.480 the table. I'm pleased to say here in New York 0:07:20.480 --> 0:07:22.680 the Fed Governor Chris Wallach, Governor Wan look good to 0:07:22.680 --> 0:07:23.080 see us, sir. 0:07:23.240 --> 0:07:24.440 It's good to see you all again. 0:07:24.760 --> 0:07:26.360 When we planned this, I thought you'd come in and 0:07:26.360 --> 0:07:29.080 talk about the labor market, but something else has taken over. 0:07:29.440 --> 0:07:31.560 What's your assessment of developments in the Middle East and 0:07:31.600 --> 0:07:33.960 ultimately what it means for you and the committee. 0:07:34.040 --> 0:07:36.120 Yeah, I mean, I guess that's exactly The thing is, 0:07:36.160 --> 0:07:37.600 what you're going to see is you're going to see 0:07:37.600 --> 0:07:40.640 a spike and gasoline prices after the American citizens are 0:07:40.640 --> 0:07:42.040 going to see when they go to the pump, and 0:07:42.080 --> 0:07:43.960 they're going to stare at it and be a little 0:07:43.960 --> 0:07:47.640 shocked in terms of how things go. But for us 0:07:47.720 --> 0:07:50.960 thinking about policy going forward, this is unlikely to cause 0:07:50.960 --> 0:07:53.920 sustained inflation. This one reason we don't look at energy 0:07:53.960 --> 0:07:57.280 prices where we look at core. Core is a better 0:07:57.320 --> 0:08:00.080 predictor of future inflation. You're going to see this, but 0:08:00.320 --> 0:08:03.800 once these kind of supply chain issues that you laid out, Lisa, 0:08:04.280 --> 0:08:06.640 once they unravel, this will start coming back down. So 0:08:07.080 --> 0:08:09.080 it's kind of a very odd to think about the 0:08:09.120 --> 0:08:13.120 FEDS maybe changing rates six months from now based on this, 0:08:13.840 --> 0:08:16.400 If it's unwound in a like as you said, Jonson, 0:08:16.400 --> 0:08:18.560 in a couple of weeks or even two months. 0:08:18.320 --> 0:08:20.160 It's not going to be a big factor down the road. 0:08:20.240 --> 0:08:22.880 So this is why we never look at energy prices. 0:08:22.880 --> 0:08:24.440 They bounce up, they come back down. 0:08:25.240 --> 0:08:28.240 It's not that it's something that we don't feel sympathy 0:08:28.280 --> 0:08:29.920 for people that that's what they have to pay when 0:08:29.920 --> 0:08:32.360 they put the gas in their cars. But for us 0:08:32.400 --> 0:08:34.640 thinking about the longer term in terms of policy, this 0:08:34.720 --> 0:08:36.120 is something we're just gonna have to kind. 0:08:36.000 --> 0:08:36.960 Of put off for now. 0:08:37.080 --> 0:08:39.000 When does it become something bigger if it's so. 0:08:39.080 --> 0:08:41.760 It becomes bigger, if it becomes more permanent, because then 0:08:41.800 --> 0:08:43.679 what's going to happen. You're going to see this jump 0:08:43.679 --> 0:08:46.920 in prices. Then it'll start bleeding through to other parts 0:08:46.960 --> 0:08:48.160 of the economy. 0:08:48.240 --> 0:08:49.000 Energy is a big part. 0:08:49.040 --> 0:08:52.120 It feeds into everything else, and then somehow those energy 0:08:52.160 --> 0:08:54.120 costs get passed along like everything else. 0:08:54.160 --> 0:08:55.600 Well, that's what you're more worried about. 0:08:55.679 --> 0:08:58.480 Economists on any given day, Lisa might myself and they'll 0:08:58.520 --> 0:09:00.320 talk about the experience of the seven so and coming 0:09:00.360 --> 0:09:03.000 out of the pandemic, and they'll say things like the 0:09:03.000 --> 0:09:05.880 officials of the fenders of a someone conditions good by 0:09:05.920 --> 0:09:07.880 some of that. It's not your experience of things. 0:09:08.000 --> 0:09:09.960 Well, in the seventies, remember we didn't just have one. 0:09:10.080 --> 0:09:13.040 We had massive oil shocks. If you take seventy three, 0:09:13.240 --> 0:09:16.680 the price of oil quadrupled overnight. It went from four 0:09:16.720 --> 0:09:19.400 dollars a barrel was at twelve dollars a barrow or three, 0:09:19.480 --> 0:09:21.760 or went from three or whatever the numbers were. But 0:09:21.920 --> 0:09:23.680 that was a shock, and it never came back down, 0:09:24.080 --> 0:09:26.120 and then there was another one. Every time you turned around, 0:09:26.160 --> 0:09:28.199 there was another oil shock. Then I ran oil and 0:09:28.280 --> 0:09:31.040 bargo in seventy nine. So that was kind of the 0:09:31.080 --> 0:09:33.000 problem with the oil shocks. They just kept coming and 0:09:33.040 --> 0:09:35.480 coming and coming. So it's not clear this will be 0:09:35.840 --> 0:09:37.880 one shock after another after another. 0:09:38.400 --> 0:09:39.680 So that's why I'm more willing to. 0:09:39.679 --> 0:09:41.959 Say this is, I hate to say, but more like 0:09:42.000 --> 0:09:44.000 a one off event than what we saw in the 0:09:44.040 --> 0:09:44.920 nineteen seventies. 0:09:45.600 --> 0:09:49.079 As roseenn Rosennadena used to say, it's always something because 0:09:49.080 --> 0:09:51.319 if it's not just it's not just the oil shocks, 0:09:51.360 --> 0:09:52.920 it's the whole idea. Now we're going to have a 0:09:52.920 --> 0:09:56.560 whole new round of tariffs coming through the economy, and 0:09:56.600 --> 0:10:00.360 we've got this low fire, low higher economy. How long 0:10:00.400 --> 0:10:03.840 do you think that continues? Does this just push out 0:10:04.160 --> 0:10:06.400 the time period for companies to sit on their hands 0:10:06.720 --> 0:10:09.080 not invest because they don't know what's going to happen. 0:10:09.840 --> 0:10:11.439 Yeah, I mean, this is one of the things I've 0:10:11.480 --> 0:10:13.599 been concerned about since last June, is how week the 0:10:13.679 --> 0:10:16.520 labor market has been. There were a lot of factors 0:10:16.600 --> 0:10:19.200 last summer that we're driving this kind of low higher, 0:10:19.240 --> 0:10:23.360 low fire. It looked like maybe in January we might 0:10:23.400 --> 0:10:26.040 be turning a corner. We'll find out today whether that was, 0:10:26.080 --> 0:10:29.960 as I said last week, signal or noise. But you know, 0:10:29.960 --> 0:10:32.160 when you're in this world in which the labor market, 0:10:32.200 --> 0:10:34.040 even with one hundred and thirty thousand jobs, it was 0:10:34.080 --> 0:10:37.040 really concentrating a couple of sectors eighty percent of the economy, 0:10:37.200 --> 0:10:39.000 the labor market wasn't doing anything. 0:10:39.440 --> 0:10:40.680 It was zero negative. 0:10:41.280 --> 0:10:44.520 So that kind of fragility wouldn't take much for some 0:10:44.520 --> 0:10:47.319 sort of a serious shock to sort of start pushing 0:10:47.400 --> 0:10:50.880 people in another direction. Whether this is that kind of 0:10:50.920 --> 0:10:52.960 shock or not, we'll start finding out. 0:10:53.360 --> 0:10:55.400 Yeah, it's early, because of course these are going to 0:10:55.440 --> 0:10:58.360 be January numbers. But you've been on record as saying 0:10:58.400 --> 0:11:00.840 you'd like to cut more because you still worried about 0:11:00.840 --> 0:11:03.920 where the labor market is. What would it take to 0:11:03.960 --> 0:11:08.679 get you to back off on that feeling, because if 0:11:08.720 --> 0:11:11.599 we get the same sort of numbers we had in December, 0:11:12.040 --> 0:11:16.200 it still shows very narrow breadth of hiring, and it 0:11:16.679 --> 0:11:19.760 still shows some reasonably good numbers for hiring. 0:11:20.200 --> 0:11:25.440 Yeah, the even with the January report, like I said, 0:11:25.440 --> 0:11:27.360 it was all concentrated in a couple of sectors, So. 0:11:27.480 --> 0:11:28.840 That was good. They were robust. 0:11:28.840 --> 0:11:31.160 We got a big number, well above everybody's estimate to 0:11:31.200 --> 0:11:35.000 break even, But the concentration didn't give me a lot 0:11:35.040 --> 0:11:37.600 of comfort that the economy as a whole was doing 0:11:37.920 --> 0:11:42.200 really well. So that's where my brain is telling me. 0:11:42.880 --> 0:11:45.080 The number was good and the economy looks okay. It 0:11:45.120 --> 0:11:47.200 was above break even, but my guts are telling me 0:11:47.640 --> 0:11:49.640 it may not be that good. And that's where I'm 0:11:50.160 --> 0:11:52.520 waiting to see what today's numbers. I'm almost certain it's 0:11:52.520 --> 0:11:55.160 going to get revised down because they have. This has 0:11:55.200 --> 0:11:57.200 been a pattern in January the last few years. 0:11:57.480 --> 0:11:59.560 A pair of these two ideas, the idea of the 0:11:59.559 --> 0:12:02.920 oil that's creating some concerns about inflation and then a 0:12:03.000 --> 0:12:04.920 labor market that kind of is in question, right, is 0:12:04.920 --> 0:12:08.480 it decelerating or is it reaccelerating. How much has your 0:12:08.520 --> 0:12:14.680 reaction changed potentially to Friday's today's report, given the fact 0:12:14.720 --> 0:12:16.839 that we do see energy prices pushing on inflation. In 0:12:16.880 --> 0:12:19.880 other words, would you be less inclined to cut rates 0:12:20.080 --> 0:12:23.440 if there is strength that's demonstrated in the labor market today. 0:12:23.720 --> 0:12:26.160 Yeah, that's kind of what I was hinting at last week, 0:12:26.200 --> 0:12:28.960 that if we get another solid job report then last month, 0:12:29.000 --> 0:12:32.839 this month looks like the labor market's turning around. A 0:12:32.880 --> 0:12:34.880 lot of the downside risk I've been worried about for 0:12:34.920 --> 0:12:37.720 six months is kind of going away. We got a 0:12:37.720 --> 0:12:40.120 hot We're going to get a hot PCE number given 0:12:40.160 --> 0:12:42.520 what we already have seen coming in, that's going to 0:12:42.520 --> 0:12:47.400 probably print from everything I've seen about a point four. Okay, 0:12:47.640 --> 0:12:50.360 usually that comes down again. We've had this January effect, 0:12:50.400 --> 0:12:54.440 we have some more passories of tariffs, but because that 0:12:54.600 --> 0:12:57.080 inflation's hot, it's going to look even worse now with 0:12:57.160 --> 0:13:00.200 the oil prices, at least on headline. And then if 0:13:00.240 --> 0:13:03.000 you get a sellid job, it does say you can 0:13:03.080 --> 0:13:04.119 sit there and wait. 0:13:04.520 --> 0:13:06.719 Let's say the counterfactual. Let's say we don't get a 0:13:06.720 --> 0:13:08.600 good print. Let's go we see the weakness that you 0:13:08.640 --> 0:13:10.280 see right now when you talk to people in your 0:13:10.280 --> 0:13:13.280 district and that you speak to in the different districts 0:13:13.320 --> 0:13:15.680 as well as beyond. How much do you think the 0:13:15.720 --> 0:13:18.520 FED should react to this because it's sort of the 0:13:18.559 --> 0:13:21.440 dual mandate is in conflict and absolutely the wrong way. 0:13:21.960 --> 0:13:23.720 Yeah, I mean, that's the tension we've had for the 0:13:23.760 --> 0:13:26.880 last years. I've been more worried about the labor market 0:13:27.000 --> 0:13:29.440 risk the inflation risk. I've always believed inflation was going 0:13:29.480 --> 0:13:31.760 to come back down once tear if effects passed through. 0:13:32.600 --> 0:13:34.960 My other colleagues on the committee are much more concerned 0:13:35.000 --> 0:13:35.720 about the inflation. 0:13:35.800 --> 0:13:37.280 It's been high for five years. 0:13:37.400 --> 0:13:40.079 They're not seeing it coming down, and they think the 0:13:40.160 --> 0:13:40.920 labor market is. 0:13:40.920 --> 0:13:42.720 All stabilized, it's all supply side. 0:13:42.800 --> 0:13:45.400 So these are the two different views that people have 0:13:45.480 --> 0:13:48.080 about thinking about policy. And I was more willing to 0:13:48.080 --> 0:13:50.240 cut rates because I was more worried about the labor market, 0:13:50.640 --> 0:13:54.320 not as worried about inflation coming down. But like I said, 0:13:54.400 --> 0:13:57.000 if the labor market continues to go weak, if this 0:13:57.040 --> 0:13:59.840 thing comes in, I mean ADP was promising the other day. 0:14:00.440 --> 0:14:04.520 So if the labor market is good, inflation's hotter, and 0:14:04.640 --> 0:14:06.920 we think it's fine to kind of wait another meeting 0:14:06.920 --> 0:14:09.000 and kind of see. But if we get a bad number, 0:14:09.080 --> 0:14:12.120 or January's revised down to some really low number like 0:14:12.160 --> 0:14:15.920 ADP got revised in half, laf Mark's just not that good. 0:14:16.000 --> 0:14:18.560 And so the question is why are you just sitting 0:14:18.559 --> 0:14:21.240 on your hands? So I could certainly see this meeting 0:14:21.240 --> 0:14:23.000 going on the way depending on the data this week 0:14:23.040 --> 0:14:24.960 and the CPI next week comes in. 0:14:25.080 --> 0:14:26.640 I hate to be the ones who asked this question, 0:14:26.680 --> 0:14:28.960 but what's a good report? Because at eight thirty East 0:14:28.960 --> 0:14:30.760 in time, but we'll be asking that question ab outselves. 0:14:30.880 --> 0:14:32.480 What's good to you? What does good look like? 0:14:33.240 --> 0:14:33.440 Well? 0:14:33.480 --> 0:14:35.440 I think good would be if you saw another number 0:14:35.520 --> 0:14:37.680 like January, that would be really good because you're well 0:14:37.720 --> 0:14:40.600 above everybody's break even estimates at that point, and that'd 0:14:40.640 --> 0:14:41.560 be two in a row. 0:14:42.000 --> 0:14:43.080 Looks like it's going through. 0:14:43.160 --> 0:14:46.080 We got very good numbers off the ISM, manufacturing and 0:14:46.240 --> 0:14:49.560 services this week. That's another indication that maybe things are 0:14:49.560 --> 0:14:52.360 turning around. So if that's the case, I'm starting to 0:14:52.360 --> 0:14:55.480 see less downside risk now on the tariff stuff. I 0:14:55.520 --> 0:14:58.840 still have a view that all the tariff risk is 0:14:58.880 --> 0:15:03.040 to the downside. I just don't see big increases in 0:15:03.120 --> 0:15:05.080 tariffs spread all over the place. 0:15:05.120 --> 0:15:06.480 If anything, they're going to come down. 0:15:06.600 --> 0:15:09.480 Estimates of this are coming down, deals are going to 0:15:09.520 --> 0:15:11.680 potentially get made. So I don't see a lot of 0:15:11.760 --> 0:15:13.880 tear for risk going even though there's more uncertain there's 0:15:13.880 --> 0:15:15.720 always the uncertain I don't see a lot of price 0:15:15.840 --> 0:15:18.680 pressures from what we think could happen going forward. So 0:15:18.760 --> 0:15:20.760 that's going to bring I think that's going to bring 0:15:20.760 --> 0:15:23.600 inflation down or take pressure off, and it'll take something, 0:15:23.600 --> 0:15:24.320 the uncertainty off. 0:15:24.360 --> 0:15:27.000 At some point, well, it becomes a question of what 0:15:27.160 --> 0:15:29.280 problem are you trying to solve and what tool are 0:15:29.280 --> 0:15:32.800 you using to do it. How would cutting rates by 0:15:32.880 --> 0:15:36.400 twenty five or fifty basis points help the labor market 0:15:36.560 --> 0:15:39.920 If companies are sitting on their hands because they're still 0:15:39.960 --> 0:15:42.800 waiting for tariff news and we've got a war going on. 0:15:43.120 --> 0:15:44.840 Yeah, I mean we can always say, ah, we can't 0:15:44.880 --> 0:15:46.080 do anything, just sit there. 0:15:46.800 --> 0:15:47.520 That's not my job. 0:15:47.600 --> 0:15:49.880 My job is trying to help the economy and achieve 0:15:49.920 --> 0:15:52.280 our dual mandate. And if the labor market's not looking good, 0:15:52.360 --> 0:15:53.720 then I have to make this trade off. 0:15:54.240 --> 0:15:57.320 But does it make a difference to the CEOs? 0:15:58.120 --> 0:15:58.880 Well, maybe not. 0:15:59.400 --> 0:16:01.400 I mean that's from saying we could argue about whether 0:16:01.440 --> 0:16:04.400 monetary policy has any effect in general on the labor market. 0:16:04.920 --> 0:16:08.280 There's you know, you go back in economics, back to 0:16:08.280 --> 0:16:10.440 the eighties and nineties, there's a whole camp of people 0:16:10.440 --> 0:16:14.080 that said Manitari policy is completely irrelevant for the economy. 0:16:14.280 --> 0:16:15.480 So quit wasting your time. 0:16:15.960 --> 0:16:18.200 You're opening up a very different conversation. Yeah, that's a 0:16:18.200 --> 0:16:20.120 whole bitt we can spend a long time on. I 0:16:20.120 --> 0:16:21.880 wanted to squeeze this in. I actually think it's one 0:16:21.880 --> 0:16:24.160 of the more important topics at the moment. We're not 0:16:24.200 --> 0:16:26.880 seeing a tightning of financial conditions a material one in 0:16:26.960 --> 0:16:29.520 public markets. I don't see that in stocks, I don't 0:16:29.520 --> 0:16:31.600 see that in bumb yields. I'm wondering what on earth 0:16:31.640 --> 0:16:34.720 you see in private markets, because every day there's another 0:16:34.760 --> 0:16:38.880 headline about another fund, another company struggling to meet redemptions. 0:16:39.120 --> 0:16:41.280 What is the Federal Reserve assessment of what is happening? 0:16:41.480 --> 0:16:44.160 Because that has powered this economy, some people might say, 0:16:44.400 --> 0:16:46.560 in a bigger way than the Federal Reserve, or for 0:16:46.600 --> 0:16:48.840 that matter, public markets have what is coming. 0:16:48.680 --> 0:16:50.000 On, Well, there's a couple things. 0:16:50.080 --> 0:16:52.480 I mean, in general, I'm not I don't see big, 0:16:52.880 --> 0:16:55.600 really big, widespread problems in the private credit market. What 0:16:55.680 --> 0:16:59.400 you're seeing is a couple of cases of certainly frauds 0:16:59.440 --> 0:17:03.640 that fraud widespread, I don't. You know, it's hard to 0:17:03.640 --> 0:17:06.040 believe that the entire correct private credit market is being 0:17:06.080 --> 0:17:09.760 driven by fraud or bubble posting of collateral. So these 0:17:09.760 --> 0:17:11.240 are kind of these one off things that get a 0:17:11.280 --> 0:17:14.000 lot of headlines, but it's not clear it's systemic. You 0:17:14.080 --> 0:17:15.679 have to kind of look at whether there are a 0:17:15.720 --> 0:17:19.639 lot of you know, there's different types of private credit. 0:17:19.640 --> 0:17:22.600 There's stuff that's in high yield, you know, risky junk 0:17:22.680 --> 0:17:24.960 bond stuff, and there's other stuff that's better quality in 0:17:25.040 --> 0:17:26.320 terms of what they're funding. 0:17:26.880 --> 0:17:28.400 So I don't think as a whole. 0:17:28.200 --> 0:17:32.080 The private credit market is in any serious trouble. But 0:17:32.119 --> 0:17:34.280 you're going to have these things popping up here and there, 0:17:34.440 --> 0:17:36.040 But I don't think there's enough of it that's going 0:17:36.080 --> 0:17:39.880 to somehow drive down the financial markets and create any 0:17:39.960 --> 0:17:42.040 kind of financial stability problems. 0:17:43.240 --> 0:17:46.679 Stay with us. Multiple impax Savanance coming up off to this. 0:17:56.000 --> 0:17:58.000 So here's the lisis this morning. The War in the 0:17:58.000 --> 0:18:00.639 Middle ag sending energy cast surging across the globe, the 0:18:00.640 --> 0:18:03.400 price of crude sitting at a multi year high, while 0:18:03.440 --> 0:18:05.600 European natural gas is set for its biggest weekly gain 0:18:05.680 --> 0:18:08.560 since the energy crisis of twenty twenty two. John guess 0:18:08.640 --> 0:18:12.040 Now is the European Energy Commissioner. Dani Jorkinson, Commissioner, Welcome 0:18:12.080 --> 0:18:14.880 to the program. So what's your assessment of the disruption 0:18:14.960 --> 0:18:17.840 to supply to Europe over the past few days. 0:18:18.520 --> 0:18:22.680 Well, first of all, it's important to say that it's 0:18:22.720 --> 0:18:25.960 not actually so much that it's disruption of supply that 0:18:26.200 --> 0:18:29.040 creates problems, because first of all, we don't get any 0:18:29.040 --> 0:18:31.600 oil or gas from our RNT directly, and we get 0:18:31.600 --> 0:18:36.119 some limited amounts of gas from the Gulf region overall. 0:18:36.200 --> 0:18:39.439 But that's not it's not nothing, but it's not the 0:18:39.480 --> 0:18:42.760 big problem. The big problem is the effects on the 0:18:42.800 --> 0:18:46.119 global markets, and of course those effects on the global 0:18:46.119 --> 0:18:52.080 markets also hits consumers in Europe, especially on oil and 0:18:52.400 --> 0:18:52.920 on LERG. 0:18:53.760 --> 0:18:56.440 So, Commissioner, do you see a reason to try to 0:18:56.480 --> 0:18:58.560 step in and stave off some of the increases in 0:18:58.600 --> 0:19:00.480 price or do you think that this will well right 0:19:00.520 --> 0:19:03.800 size itself because ultimately the EU isn't as dependent on 0:19:04.359 --> 0:19:07.240 around and sort of some of the regional supplies. 0:19:08.960 --> 0:19:12.720 So I saw earlier that you compared this crisis through 0:19:13.560 --> 0:19:17.240 the crisis in twenty two when Russia started as full 0:19:17.280 --> 0:19:21.159 scale invasion in Ukraine. And I understand why, because this 0:19:21.200 --> 0:19:23.200 is the worst crisis we've had since. But it's also 0:19:23.240 --> 0:19:27.520 important to say that we are we are not close 0:19:27.600 --> 0:19:30.360 to the level of crisis that we have in twenty two. 0:19:30.400 --> 0:19:32.880 The prices are higher, yes, but not close to as 0:19:32.920 --> 0:19:35.880 high as they were there, So that's number one. Number two. 0:19:36.000 --> 0:19:39.160 We are also much better situated to dealing with these 0:19:39.200 --> 0:19:43.439 price increases. We have a more diversified energy system, meaning that, 0:19:43.480 --> 0:19:46.240 for instance, on gas, we get the gas from more 0:19:46.240 --> 0:19:49.840 different sources. So our number one source is Norway. Number 0:19:49.880 --> 0:19:52.920