WEBVTT - Bloomberg Surveillance TV: May 20th, 2026 0:00:02.360 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.400 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordernt. 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 --> 0:00:36.880 Terminal and the Bloomberg Business app. We begin the sout 0:00:36.920 --> 0:00:40.000 with stocks, Agenkaiah on the Hills and videos, earnings report, 0:00:40.240 --> 0:00:43.080 Mark Leman of Citizens Commercial Bank, writing, it's not just 0:00:43.120 --> 0:00:45.960 a company print, it's a real time read on AI 0:00:46.040 --> 0:00:49.280 demand and the health of the entire ecosystem. Mark joins 0:00:49.360 --> 0:00:51.199 us now for more. Mark, welcome to the program. Let's 0:00:51.240 --> 0:00:53.239 get the health check. How is the health of the 0:00:53.400 --> 0:00:55.680 entire ecosystem? 0:00:56.120 --> 0:01:02.160 It's definitely healthy, Jonathan. It's headlines every single day. Obviously 0:01:02.240 --> 0:01:04.319 we have been We're three days from the Trial of 0:01:04.360 --> 0:01:07.039 the Century, I guess, and it came and went. But 0:01:07.080 --> 0:01:10.880 it's still the most important story in the marketplace outside. 0:01:10.520 --> 0:01:12.920 Of oil, and we're going to learn a lot. 0:01:12.760 --> 0:01:16.960 Today outside of markets. Mark, AI's got a big PR problem. 0:01:17.240 --> 0:01:19.280 You would have seen the booze over the weekend, the 0:01:19.280 --> 0:01:21.640 clumsy comments coming from a bank CEO that we've covered 0:01:21.680 --> 0:01:24.160 extensively in the last twenty four hours. You and I 0:01:24.160 --> 0:01:26.920 have had this conversation. Is that becoming a bigger and 0:01:26.959 --> 0:01:29.160 bigger issue? And how do they address this? 0:01:30.720 --> 0:01:32.440 You know, we did talk about it, and it does 0:01:32.480 --> 0:01:35.880 not seem to have abated at all. Like you said, 0:01:35.880 --> 0:01:38.560 it was the bank ceo, it was some graduation speeches. 0:01:39.440 --> 0:01:41.840 They do have a PR problem, and they've hired the 0:01:41.880 --> 0:01:45.600 best in the world, and that hasn't actually helped. I 0:01:45.600 --> 0:01:48.680 think unfortunately, as my kids would say, it is what 0:01:48.760 --> 0:01:51.600 it is in a way. I think there are some 0:01:51.640 --> 0:01:54.880 issues as it relates to messaging. There are some issues 0:01:54.880 --> 0:01:57.760 that relates to what's going on in corporate America. But 0:01:57.880 --> 0:02:00.480 this freight train is moving as fast as power and 0:02:00.600 --> 0:02:03.200 actually it's accelerating and it's not going to slow down. 0:02:03.280 --> 0:02:06.280 It's the policy story, though, Mark on the horizon, and 0:02:06.320 --> 0:02:09.000 maybe I'm thinking a little bit too further out a year, 0:02:09.040 --> 0:02:11.720 two years into twenty twenty eight and the next general 0:02:12.040 --> 0:02:15.040 if the public are booing and they're pushing back, and 0:02:15.080 --> 0:02:17.800 they can't get the message on track. I just wonder 0:02:18.040 --> 0:02:21.079 when the policy story starts to become a stock market problem. 0:02:22.360 --> 0:02:27.120 Well, I analogized it to what happened four and eight 0:02:27.200 --> 0:02:30.639 and ten years ago when we had Mark raise his 0:02:30.680 --> 0:02:32.840 hand in front of Congress and all the Internet people 0:02:32.880 --> 0:02:35.200 raise their hands in front of Congress and begged them 0:02:35.400 --> 0:02:38.400 to regulate them. And I remember watching Orange Hatch and 0:02:38.400 --> 0:02:41.040 other people talk about the Internet as if they didn't 0:02:41.120 --> 0:02:43.560 understand it. And unfortunately, I think we're going to see 0:02:43.600 --> 0:02:47.560 Dejabu all over again, and that we don't have Congress 0:02:47.600 --> 0:02:51.920 really understanding if what is actually going on every single 0:02:51.960 --> 0:02:55.120 day in corporate America. And you're right, the messaging in 0:02:55.360 --> 0:02:57.679 the general is going to be really. 0:02:57.440 --> 0:02:58.160 Really important. 0:02:58.560 --> 0:03:01.320 But think about that two years from now, two and 0:03:01.320 --> 0:03:03.400 a half years from now, in the big election in 0:03:03.400 --> 0:03:05.520 twenty twenty eight, we do have one obviously in the fall. 0:03:06.600 --> 0:03:07.880 What's going to happen in the next two and a 0:03:07.919 --> 0:03:09.520 half years is going to be We're going to look 0:03:09.560 --> 0:03:11.520 back and say, oh, my god, we knew this was coming, 0:03:11.520 --> 0:03:11.959 but it's. 0:03:11.840 --> 0:03:14.400 Actually more than we even thought then. Well, so that's 0:03:14.440 --> 0:03:15.120 what's going to happen. 0:03:15.360 --> 0:03:18.600 Forget regulation, what about just a massive tax on these companies. 0:03:18.880 --> 0:03:20.800 What's the impact of that on the stock market. 0:03:22.440 --> 0:03:23.160 I don't see it. 0:03:24.400 --> 0:03:28.359 I think there's going to be local jurisdictions that obviously 0:03:28.400 --> 0:03:30.320 make some big moves on that. 0:03:30.400 --> 0:03:31.800 We saw it overseas in Europe. 0:03:31.800 --> 0:03:33.919 If you remember what they did with Google and some 0:03:34.080 --> 0:03:36.640 other things. We saw that in the EU. I just 0:03:36.680 --> 0:03:39.400 don't see that here here in the States. I think 0:03:39.440 --> 0:03:42.080 it's a big messaging issue. I think it's a big 0:03:43.080 --> 0:03:46.200 issue as it relates to corporate America. But I just 0:03:46.280 --> 0:03:49.280 don't see the wherewithal for Congress in the federal government 0:03:49.320 --> 0:03:50.000 getting involved. 0:03:50.280 --> 0:03:54.040 John mentioned the standard Charter CEO very clumsy language talking 0:03:54.080 --> 0:03:57.920 about AI and displacement of employees and basically to just 0:03:58.000 --> 0:03:59.120 use AI instead. 0:03:59.400 --> 0:04:00.800 How do you talk about it. 0:04:02.880 --> 0:04:06.680 I don't see it as just wholesale displacement of employees. 0:04:06.680 --> 0:04:09.360 What we're seeing is the empowerment of employees, and we're 0:04:09.360 --> 0:04:12.440 seeing the ability for people to just do more with 0:04:12.520 --> 0:04:14.080 the kind of tools that we're creating. 0:04:14.280 --> 0:04:14.840 Citizens. 0:04:15.680 --> 0:04:18.640 We have this reimagine the bank here and we're showing 0:04:18.760 --> 0:04:21.479 use cases that are very very powerful for people. I 0:04:21.480 --> 0:04:24.440 think it does question how many people you're going to 0:04:24.520 --> 0:04:26.839 need to do that. But I remember when I started 0:04:26.839 --> 0:04:28.840 on Wall Street a long time ago, I was the 0:04:28.839 --> 0:04:31.240 first person to get a BlackBerry. I was the first 0:04:31.240 --> 0:04:34.240 person to get email broadly. And it sounds so archaic 0:04:34.400 --> 0:04:36.640 right now, but boy, I taught a lot of people 0:04:36.680 --> 0:04:38.680 back then what it was like and what power it was, 0:04:38.760 --> 0:04:41.080 and so to not be afraid of it. And I 0:04:41.120 --> 0:04:44.039 think we're seeing that here at Citizens So this, Oh 0:04:44.080 --> 0:04:47.000 my god, everyone's going to be home using AI for 0:04:47.080 --> 0:04:47.640 their career. 0:04:48.080 --> 0:04:49.080 I just don't see it. 0:04:49.160 --> 0:04:52.400 I see the empowerment more than I see the problems 0:04:52.760 --> 0:04:55.560 as it relates to total wholesale changes in employment. 0:04:55.640 --> 0:04:59.159 Well, Mark, that's the important distinction, empowerment or replacement. The 0:04:59.200 --> 0:05:02.240 blank Arry was to help you. It was to empower you. 0:05:02.320 --> 0:05:04.320 It wasn't to replace you. And when we talk about 0:05:04.320 --> 0:05:07.760 agent KI, typically we're talking about replacement and not empowerment. 0:05:07.760 --> 0:05:08.640 Are we getting it wrong? 0:05:10.120 --> 0:05:10.320 Well? 0:05:10.360 --> 0:05:13.440 I think, as I always say, always and never are 0:05:13.520 --> 0:05:14.159 rarely true. 0:05:14.240 --> 0:05:18.200 I think everybody being replaced because of AGENTIC I think 0:05:18.279 --> 0:05:21.120 is unlikely. I think that empowerment is really important. And 0:05:21.160 --> 0:05:25.360 you're right, Jonathan, the BlackBerry seems so archaic and novel, 0:05:25.400 --> 0:05:29.280 but back then it didn't. I will also say for 0:05:29.440 --> 0:05:32.760 the power of some of our early young staff members 0:05:32.760 --> 0:05:34.559 and some of the people who really understand the power 0:05:34.560 --> 0:05:38.200 of this to really make important strategy within our company 0:05:38.279 --> 0:05:40.680 and all companies around and show the power of it 0:05:40.760 --> 0:05:43.680 as opposed to the fear is really as important. 0:05:43.360 --> 0:05:45.240 As anything in old school. I wish we never had 0:05:45.240 --> 0:05:47.279 the day where we started taking our work home with us, 0:05:47.279 --> 0:05:50.120 but that's another problem. Let's talk about the opportunity in 0:05:50.200 --> 0:05:52.839 video reporting after the closing bow. I've mentioned this a 0:05:52.839 --> 0:05:54.560 few times in the last hour. This used to be 0:05:54.680 --> 0:05:58.159 the blockbuster earnings report. Still is to some extent largest 0:05:58.160 --> 0:06:00.920 company on the planet. Of course, as some of its glitter. 0:06:01.160 --> 0:06:03.160 I think over the last month or so, because within 0:06:03.200 --> 0:06:07.039 the rally in chips, the explosive moves have been elsewhere. Mark, 0:06:07.040 --> 0:06:07.920 what do you think is changing. 0:06:09.960 --> 0:06:11.800 I think it is still the most important company in 0:06:11.839 --> 0:06:14.240 the world. It shows because it really does power. It's 0:06:14.240 --> 0:06:17.039 the fuel for the AI and fuel for corporate America 0:06:17.120 --> 0:06:19.520 right now. I think part of it is just the 0:06:19.560 --> 0:06:21.880 bigger they are. A little bit is sort of the 0:06:21.960 --> 0:06:24.680 messaging here. You've talked a little bit about the broadening 0:06:24.680 --> 0:06:27.760 of the chip market and what Intel and AMD have done. 0:06:27.920 --> 0:06:31.480 As it relates to Intel, it made the stock may 0:06:31.480 --> 0:06:34.000 have doubled in the last few months, but it's still 0:06:34.080 --> 0:06:36.200 relative to that market cap. That's a one day move 0:06:36.520 --> 0:06:39.880 in in Nvidia, so I'm a little less worried that 0:06:39.880 --> 0:06:40.880 that move is. 0:06:41.920 --> 0:06:46.520 In Vidia underperforming. I do think it's the most important company. 0:06:46.800 --> 0:06:49.360 The bigger story, I think, Jonathan, is what's going on 0:06:49.800 --> 0:06:53.360 with the big AI companies and the share that's going on, 0:06:54.080 --> 0:06:57.280 the jockeying between Anthropic, open Ai and the others. There's 0:06:57.279 --> 0:06:59.440 plenty of market caap and there's plenty of investments still 0:06:59.440 --> 0:07:01.520 going on. That to me is still the biggest story 0:07:01.560 --> 0:07:03.000 in Nvidia is going to power all of. 0:07:02.920 --> 0:07:05.680 Them follow the talent. Mark I'm following the talent, and 0:07:05.680 --> 0:07:07.599 I seem to be going to one and not the other. 0:07:07.680 --> 0:07:11.600 What's gone wrong at open Ai, well. 0:07:11.800 --> 0:07:15.120 I think, like a lot of success stories, I think 0:07:16.720 --> 0:07:21.080 big management issues internally. Obviously, there's been some stories that 0:07:21.080 --> 0:07:24.080 we've all read about what's going on inside of open Ai. 0:07:24.840 --> 0:07:27.880 Anthropic has been really mighty in the last few months. 0:07:27.880 --> 0:07:30.360 They did, i think in terms of pr and in 0:07:30.480 --> 0:07:33.320 terms of their quality of their chips. I'm sorry their 0:07:33.360 --> 0:07:37.320 quality of their offering. They seem to have won. We 0:07:37.360 --> 0:07:39.320 saw that with the Iran and Warren some of the 0:07:39.400 --> 0:07:41.720 inner fighting that happened with the federal government. 0:07:41.960 --> 0:07:43.960 That news certainly has seemed to die down. 0:07:44.640 --> 0:07:48.320 And Therapic has done an incredible job obviously over the 0:07:48.400 --> 0:07:52.679 last year of their story, of their success, of their offering, 0:07:52.760 --> 0:07:55.640 it's second to none right now. I won't count open 0:07:55.680 --> 0:07:58.760 Ai out by any stretch. It's an enormous market. There's 0:07:58.840 --> 0:08:01.680 too many winners that we mentioned right here, but yes, 0:08:01.760 --> 0:08:05.760 things are Every single day we hear a different story, 0:08:05.920 --> 0:08:08.520 but Anthropic has definitely carried the last few months. 0:08:09.040 --> 0:08:12.560 Stay with us. More Bloomberg surveillance coming up after this. 0:08:21.880 --> 0:08:24.320 So here's the latest this morning. President Donald Trump want 0:08:24.320 --> 0:08:26.360 to get fresh strikes on Iran in the coming days, 0:08:26.360 --> 0:08:28.840 as the White House pushes Tehran to return to the 0:08:28.840 --> 0:08:32.160 negotiating table. Katherine Thompson at the Cato Institute writing, the 0:08:32.200 --> 0:08:34.600 US is teetering on a knife edge of not only 0:08:34.640 --> 0:08:39.040 resumption of hostilities with Iran, but long term entanglement in 0:08:39.080 --> 0:08:41.720 both this conflict and the regent. Catherine joins us now 0:08:41.760 --> 0:08:43.959 for more. Catherine, welcome to the program. Are we running 0:08:43.960 --> 0:08:45.640 out of options to maintain the status quo. 0:08:46.480 --> 0:08:47.959 You know, I think we are. I think we're reaching 0:08:47.960 --> 0:08:49.480 that point. I don't think we're anning closer to a 0:08:49.559 --> 0:08:52.720 deal than when the President was speaking about a week ago. 0:08:53.720 --> 0:08:56.959 And I think that you know, in that time, particularly 0:08:57.000 --> 0:09:00.640 the foreign powers that are involved in this conversation. You know, 0:09:00.800 --> 0:09:05.160 on our side of these bilateral engagements, the UAE in particular, 0:09:05.200 --> 0:09:09.560 has taken a more emboldened stance. This puts more foreign 0:09:09.559 --> 0:09:11.960 interest on our side of the table, where Iran is 0:09:12.000 --> 0:09:14.520 just contending with largely itself. And I think that this 0:09:14.559 --> 0:09:18.120 sets up a really dangerous dynamic going into conversations on 0:09:18.480 --> 0:09:20.680 a deal that now has a deadline of two to 0:09:20.720 --> 0:09:21.280 three days. 0:09:21.600 --> 0:09:23.280 Well, Catherine, when it comes to this deal, I mean, 0:09:23.320 --> 0:09:25.200 the Wall Street journals reporting with Base, we all know 0:09:25.280 --> 0:09:28.440 that Iran's position of negotiations hasn't changed at all. As 0:09:28.520 --> 0:09:31.040 much as the Vice President and the President say that 0:09:31.080 --> 0:09:33.959 they want to make a deal, if their positions haven't changed, 0:09:34.040 --> 0:09:36.040 is the United States willing to give up some major 0:09:36.080 --> 0:09:38.160 concessions at the negotiating table or do you think the 0:09:38.160 --> 0:09:40.440 President will actually take the strikes? 0:09:40.960 --> 0:09:42.640 I mean, I tend to think that given what we've 0:09:42.640 --> 0:09:45.560 seen from the President so far, the strikes are very 0:09:45.679 --> 0:09:49.319 very much the option that he's going to do as 0:09:49.440 --> 0:09:52.880 the best lover of pressure. The problem, as was pointed 0:09:52.920 --> 0:09:56.520 out in the previous segment, is the threat of Iranian retaliation. 0:09:56.679 --> 0:09:58.200 We know that that's the case, of course, we know 0:09:58.280 --> 0:10:01.400 that the Iranians would plan to retal if they're attacked again. 0:10:01.679 --> 0:10:03.840 But the problem with this poses for the United States, 0:10:03.840 --> 0:10:06.920 who's in the midst of ammunitions crisis, is that Iranian 0:10:06.960 --> 0:10:10.560 retaliation would likely come on US basis and personnel throughout 0:10:10.559 --> 0:10:12.800 the rest of the region. That's going to require more 0:10:12.840 --> 0:10:16.240 of our most exquisite and expensive air defense air defense 0:10:16.280 --> 0:10:20.959 platforms to support a defense of our own personnel should 0:10:20.960 --> 0:10:24.160 that retaliation come, and that's something that we can't afford 0:10:24.200 --> 0:10:27.439 to treat lightly on our side as a strategic consideration. 0:10:27.800 --> 0:10:28.840 That's the retaliation. 0:10:29.000 --> 0:10:30.880 But what do you think the president will target if 0:10:30.880 --> 0:10:32.240 he's going to resume attacks. 0:10:32.920 --> 0:10:36.200 That's hard to say, right. I mean, limited strikes, especially 0:10:36.520 --> 0:10:40.080 as was sort of outlined in the previous segment, could 0:10:40.160 --> 0:10:41.559 mean a lot of things. I mean, I don't know 0:10:41.559 --> 0:10:44.480 if that includes more energy infrastructure. I mean, I don't 0:10:44.480 --> 0:10:48.960 think it would include you know, leadership again or anything 0:10:49.000 --> 0:10:51.080 like that that we saw towards the beginning of the war. 0:10:51.960 --> 0:10:53.760 But so it's hard to tell, like what could be 0:10:53.800 --> 0:10:56.840 considered limited to sort of get the Iranians to the table, 0:10:57.200 --> 0:11:01.760 that wouldn't you know, trigger again large scale retaliation that 0:11:01.760 --> 0:11:04.199 that that hurts our bases and our personnel in the region. 0:11:04.360 --> 0:11:06.280 There seems to be two different negotiations going on in 0:11:06.360 --> 0:11:08.960 Jonathan spoke about this earlier this week. There's a negotiation 0:11:09.040 --> 0:11:10.480 to open up the strain of removes and then there's 0:11:10.520 --> 0:11:13.200 a real nuclear negotiation when it comes to opening up 0:11:13.240 --> 0:11:15.359 the strain of removes. Do you think that Trump administration 0:11:15.440 --> 0:11:17.679 has now convinced allies to come help? 0:11:18.240 --> 0:11:19.800 You know, I think that this is a tricky one. 0:11:19.800 --> 0:11:21.800 As you guys pointed out in the in the segment 0:11:22.000 --> 0:11:26.240 prior right, NATO requires consensus to come to the table 0:11:26.720 --> 0:11:29.520 and to provide any support for out of area operations. 0:11:29.760 --> 0:11:31.960 The other, you know, sticky point of this situation for 0:11:32.000 --> 0:11:35.120 the Trump administration is that basically the Trump administration spent 0:11:35.160 --> 0:11:38.600 the first year in office, you know, berating the Europeans 0:11:38.640 --> 0:11:41.959 about doing out of area operations. They want focus on convention. 0:11:42.040 --> 0:11:44.959 The Europeans focused on conventional defense and deterrence of the continent, 0:11:45.200 --> 0:11:48.080 which is absolutely something that that that is needed to 0:11:48.160 --> 0:11:50.800 keep you know, NATO sustainable for the future. But that's 0:11:50.800 --> 0:11:54.040 in direct conflict with this ask of now NATO putting 0:11:54.040 --> 0:11:56.360 together an out of area operation and out of area 0:11:56.440 --> 0:12:00.240 mission to go support the US efforts in Iran. That's 0:12:00.240 --> 0:12:02.720 going to be a really really heavy lift for consensus, 0:12:02.760 --> 0:12:03.400 and I think. 0:12:03.240 --> 0:12:03.760 That we are. 0:12:03.880 --> 0:12:05.960 I think we're quite far from it. I know we've 0:12:05.960 --> 0:12:09.440 got some time until the Angora Summit, but I think 0:12:09.440 --> 0:12:11.440 we're going to have a really hard time convincing some 0:12:11.520 --> 0:12:14.240 of those hold out NATO countries to come to our 0:12:14.280 --> 0:12:17.160 aid because politically it's very, very toxic for them. 0:12:17.400 --> 0:12:20.840 Stay with us. Mulblinderg. Savanna's coming up off to this 0:12:30.320 --> 0:12:33.800 AI facing a massive week of backlash. 0:12:33.920 --> 0:12:38.800 Today we stand on this edge of another technological transformation. 0:12:39.040 --> 0:12:43.480 It will touch every profession, every classroom, every hospital. 0:12:43.679 --> 0:12:46.200 I know what many of you are feeling about that. 0:12:46.400 --> 0:12:49.600 I can hear you. There is a fear. 0:12:52.600 --> 0:12:56.160 University graduates booming commencement speakers across the country when discussing 0:12:56.200 --> 0:12:59.839 the technology now the standard shout at c walking back 0:12:59.880 --> 0:13:04.840 commens after saying AI could replace quote lower value human capital. 0:13:05.200 --> 0:13:08.120 The Oxford Economics CEO in a s McFee pushing back 0:13:08.160 --> 0:13:11.000 on the negative AI narrative, writing, the speed of adoption 0:13:11.120 --> 0:13:13.520 is critical and it's assumed to be oddly enough for 0:13:13.600 --> 0:13:16.080 new jobs to be created to absorb those lost in 0:13:16.160 --> 0:13:17.920 ex choined us. Now for more and it's good morning, 0:13:17.920 --> 0:13:18.360 good to see you. 0:13:18.440 --> 0:13:18.880 Good morning. 0:13:19.040 --> 0:13:21.640 Let's get into the pushback, the backlash we've got right now. 0:13:21.640 --> 0:13:23.120 And what kind of labor market do you think we 0:13:23.120 --> 0:13:25.280 need to confront in the next several years. 0:13:26.000 --> 0:13:28.120 Well, I think the near term picture is not one 0:13:28.160 --> 0:13:33.280 of you know, mass unemployment and rising layoffs and things 0:13:33.280 --> 0:13:34.800 that gets a lot of attention. But I think it's 0:13:34.800 --> 0:13:37.120 also important to note that if you look at let's 0:13:37.120 --> 0:13:41.319 say the information sector, you're also seeing higher hiring. 0:13:41.080 --> 0:13:41.760 Rates as well. 0:13:41.840 --> 0:13:43.640 So what that tells me is there's a lot of 0:13:43.720 --> 0:13:45.640 churn in the in the job market at the moment, 0:13:45.679 --> 0:13:48.960 but not a big net loss of jobs. So you know, 0:13:49.000 --> 0:13:50.440 for a lot of people, it's going to be about 0:13:50.480 --> 0:13:54.720 what the skills that are needed to navigate this labor 0:13:54.760 --> 0:13:55.320 market over. 0:13:55.200 --> 0:13:57.040 What skills do you think will be needed? And do 0:13:57.040 --> 0:13:58.920 you think we face the same kind of thing that 0:13:58.960 --> 0:14:01.480 we had to face with globeation, except this time it's 0:14:01.600 --> 0:14:03.120 why color workers are not blue color. 0:14:03.880 --> 0:14:05.760 Well, I think when you look at AI adoption at 0:14:05.800 --> 0:14:08.199 the moment, what is actually being used at in the surveys, 0:14:08.640 --> 0:14:11.360 it is things like drafting, It's things like you know, 0:14:11.480 --> 0:14:14.760 automating relatively simple tasks. And really I think what will 0:14:14.840 --> 0:14:17.959 end up happening is that there's more emphasis on you know, 0:14:18.160 --> 0:14:21.360 kind of the more critical appraisal, the more insights those 0:14:21.400 --> 0:14:24.640 sorts of factors, and that will be what's really critical 0:14:24.680 --> 0:14:27.440 for people to be able to demonstrate because AI will 0:14:27.440 --> 0:14:29.600 be able to help with the sort of more day 0:14:29.640 --> 0:14:30.480 to day tasks. 0:14:30.640 --> 0:14:33.520 What about the political economy, this is one area where 0:14:33.520 --> 0:14:35.720 you see the very far right, the Steve Bannons, and 0:14:35.720 --> 0:14:39.520 the very far left like Senator Bernie Sanders, actually agree 0:14:39.720 --> 0:14:42.680 on what these companies should be doing because of the 0:14:42.680 --> 0:14:45.760 potential job losses they're going to mean for the economy. 0:14:46.120 --> 0:14:48.400 Yeah, well, I think you know this is there's no 0:14:48.440 --> 0:14:50.520 doubt this is a huge structural change for the economy 0:14:50.520 --> 0:14:53.440 of the next few years. We've not yet seen the 0:14:53.440 --> 0:14:56.160 big productivity gains, but we are like to see over 0:14:56.200 --> 0:14:57.560 the next couple of years. I think a bit of 0:14:57.640 --> 0:15:01.240 shift in that skills mix, and what we would expect 0:15:01.440 --> 0:15:03.120 is that you end up with as you lower the 0:15:03.120 --> 0:15:05.320 prices some of these tasks actually demand goes up. Is 0:15:05.320 --> 0:15:07.960 what's called Jevens paradox. You know, you start to see 0:15:08.000 --> 0:15:10.760 more demand coming through. But the phasing of these things. 0:15:11.160 --> 0:15:13.520 As ever, with economics, we talk a lot about long 0:15:13.560 --> 0:15:16.000 and variable lags and things like that. Well, actually, in 0:15:16.040 --> 0:15:18.400 this context that's going to be really important because you're 0:15:18.440 --> 0:15:20.440 talking about you know, potentially a couple of years in 0:15:20.480 --> 0:15:24.480 the labor market where we have to navigate those shifting plates. 0:15:24.520 --> 0:15:26.600 So I think policy does have to play a role there. 0:15:26.880 --> 0:15:28.000 That's political policy. 0:15:28.040 --> 0:15:31.680 But if we're seeing potentially shifting labor market and it's 0:15:31.720 --> 0:15:35.040 going to be bumpy if we have higher unemployment because 0:15:35.080 --> 0:15:38.640 of AI, could federal reserve ratecut or any central bank 0:15:38.720 --> 0:15:40.560 ratecut actually solve that problem. 0:15:41.320 --> 0:15:43.680 Well, I don't think it can solve the problem. As ever, 0:15:43.800 --> 0:15:45.520 Monetary policy is going to be one of those things 0:15:45.520 --> 0:15:48.400 that actually just tries to help mitigate some of the impacts, 0:15:48.520 --> 0:15:50.320 offset some of them. But I don't think that's what 0:15:50.320 --> 0:15:52.560 we're seeing at the moment. We're seeing some churn. We 0:15:52.680 --> 0:15:56.040 eventually will see, you know, AI adoption spread we'll see 0:15:56.080 --> 0:16:00.560 the types of tasks that AI can help with sort 0:16:00.600 --> 0:16:03.200 of move up a little bit the value chain, and 0:16:03.200 --> 0:16:06.240 that will ultimately, you know, maybe even mean a sort 0:16:06.240 --> 0:16:07.800 of disinflationary task. 0:16:07.920 --> 0:16:10.680 Do you think to help current workers or task to 0:16:10.760 --> 0:16:12.040 eliminate current workers? 0:16:12.040 --> 0:16:13.960 So I think it'll be very much labor augmenting. It'll 0:16:13.960 --> 0:16:16.240 help current workers. I think that's the sort of thing 0:16:16.280 --> 0:16:20.320 that over time you'll see real wage gains because productivity rises. 0:16:20.360 --> 0:16:22.560 You sound constructive, Yeah, you really do. 0:16:22.640 --> 0:16:22.840 Yeah. 0:16:22.840 --> 0:16:25.080 Do you get much pushback when you make this pitch? 0:16:26.320 --> 0:16:28.680 Well, it does get you know, some people agree with me, 0:16:28.840 --> 0:16:32.080 and then others violently disagree with me. You know, I 0:16:32.120 --> 0:16:34.600 think that if you go back a couple of a 0:16:34.600 --> 0:16:36.680 couple of months and we had this kind of AI 0:16:36.960 --> 0:16:40.640 dystopian narrative really take hold, and this kind of idea 0:16:40.640 --> 0:16:42.400 that we would end up with, you know, the labor 0:16:42.440 --> 0:16:45.280 share really falling, and the you know, we're ultimately going 0:16:45.280 --> 0:16:47.320 to see a fall in demand. But the thing that 0:16:47.360 --> 0:16:50.560 I say is name another technology where that has happened. 0:16:50.800 --> 0:16:53.280 You know, we have not seen historically a technology that 0:16:53.520 --> 0:16:56.200 has led to kind of lower demand. We obviously see 0:16:56.240 --> 0:16:58.720 resources moving around the economy, and that can be painful, 0:16:58.760 --> 0:17:00.320 and there'll be a role for policy in that. 0:17:00.560 --> 0:17:02.720 This is a big picture question. What do you think 0:17:02.720 --> 0:17:04.560 the Industrial revolution would have looked like if the age 0:17:04.600 --> 0:17:07.840 of social media looked like can you imagine what the 0:17:07.880 --> 0:17:08.879 pushbank would have been like to that? 0:17:09.040 --> 0:17:11.280 Yeah, well, I think that's one of the issues here, 0:17:11.320 --> 0:17:13.320 isn't it That you've got this narrative where you know, 0:17:13.359 --> 0:17:15.720 it's possible for really people to focus in on just 0:17:15.760 --> 0:17:17.600 one lens of bit and I think you know, what 0:17:17.640 --> 0:17:19.240 we try to do is step back and have a 0:17:19.280 --> 0:17:21.919 broader take on Yeah, some areas of the economy are 0:17:21.920 --> 0:17:25.600 going to face real disruption, others are going to pick 0:17:25.720 --> 0:17:26.919 up and move and with. 0:17:26.920 --> 0:17:29.000 You think ultimately, as you know, though, there's a sequencing 0:17:29.040 --> 0:17:31.720 problem at least up front. Always see is the higher 0:17:31.760 --> 0:17:34.959 costs and the risk of job loss associated with this technology. 0:17:35.040 --> 0:17:37.040 What happens next? I don't know. You're constructive, and I 0:17:37.040 --> 0:17:38.919 hope you're right, But in the near term we've got 0:17:38.920 --> 0:17:41.400 a bit of an inflation problem already. Does this big 0:17:41.440 --> 0:17:43.040 push contribute to it? 0:17:43.040 --> 0:17:45.160 It does, But I think in ways that probably people 0:17:45.240 --> 0:17:47.679 don't really understand people. A lot of people focus on 0:17:47.720 --> 0:17:50.240 the investment side and think Okay, that's pushing up demand. 0:17:50.480 --> 0:17:53.240 Remember there's a big import story that's associated, But that's 0:17:53.240 --> 0:17:55.919 the net impact on the economy now go good terms 0:17:56.119 --> 0:17:58.920 is only a few tenths from the big investment boom. 0:17:59.200 --> 0:18:01.879 Where I think it is having an impact, particularly on 0:18:01.920 --> 0:18:06.120 the consumer basket, is that the push towards higher memory, 0:18:06.640 --> 0:18:09.720 higher value add chips is actually sort of crowding out, 0:18:09.760 --> 0:18:12.720 particularly in an environment where we're seeing some supply constraints 0:18:12.800 --> 0:18:16.760 via the Middle East situation. That's where we're crowning out 0:18:16.800 --> 0:18:19.400 a little bit those lower endships, which are of course 0:18:19.440 --> 0:18:22.240 in lots of consumer goods, and we think that's probably 0:18:22.280 --> 0:18:25.040 going to add at peak something like three tenths to 0:18:25.480 --> 0:18:27.880 core PCE over the next couple of cours. 0:18:27.920 --> 0:18:30.000 Where's you've got inflamation peak in at one number. 0:18:30.359 --> 0:18:33.680 So we've got four percent for headline PC and sticking 0:18:33.680 --> 0:18:35.720 around three for a while in the core. 0:18:36.000 --> 0:18:39.240 Can you cut with core around three? If you're Kevin Wash, 0:18:39.280 --> 0:18:41.000 can you make that push well? 0:18:41.040 --> 0:18:42.600 I think one of the things that he's been very 0:18:42.640 --> 0:18:45.480 clear on is the forward look, which I think is 0:18:45.560 --> 0:18:48.119 right because remember, munty policy is not going to affect 0:18:48.200 --> 0:18:50.840 much today. It's going to affect things in two years time. 0:18:51.320 --> 0:18:54.680