WEBVTT - Navigating the Powell Pivot 0:00:01.360 --> 0:00:05.720 This is Bloomberg business Week Inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.440 gloom O Business Finance and tech News. The Bloomberg Business 0:00:13.440 --> 0:00:18.600 Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:27.600 --> 0:00:33.440 Very all right, Well, the great monetary pivot is near 0:00:33.640 --> 0:00:37.519 a central banker's engineer, a once unthinkable soft landing in 0:00:37.560 --> 0:00:40.600 the world's largest economy. I think to a lot of people, 0:00:40.680 --> 0:00:43.680 that's the big picture takeaway. After yesterday, the FED gave 0:00:43.760 --> 0:00:48.080 its clearest signal yet that its historic policy tightening campaign 0:00:48.159 --> 0:00:51.040 is over by projecting more aggressive interest rate cuts in 0:00:51.080 --> 0:00:53.080 twenty twenty four, in the process of igniting one of 0:00:53.120 --> 0:00:57.120 the biggest post meeting rallies in recent memory. We're going 0:00:57.160 --> 0:00:59.960 cross asset. We're talking stocks with Bloomberg News Markets reporter Abe. 0:01:00.040 --> 0:01:02.240 I'll do a little. We're talking bonds with Bloomberg News 0:01:02.360 --> 0:01:04.080 Rates reporter at Michael McKenzie. They're both here in the 0:01:04.080 --> 0:01:07.560 Bloomberg Interactive Brokers studio. Michael, I want to start with 0:01:07.600 --> 0:01:09.840 you with the rates moves. So is that it the 0:01:09.880 --> 0:01:13.440 Fed's just completely done and five percent was the top 0:01:13.440 --> 0:01:16.760 of the tenure that's it. That's it all right, interview over. 0:01:17.000 --> 0:01:17.959 Thank you for your answer. 0:01:20.040 --> 0:01:23.200 No, I think Waller laid out the game plan and 0:01:23.360 --> 0:01:26.640 clearly he's the intellectual force driving this FED reserve. And 0:01:26.720 --> 0:01:29.360 I think there are a couple of times yesterday when 0:01:29.440 --> 0:01:33.720 journalists were asking Chairman FORED Jerome Powell, whether you know, 0:01:33.800 --> 0:01:36.880 giving him an opportunity to walk back and sort of say, hey, 0:01:36.920 --> 0:01:39.520 you know, Marc has run too far. He just served 0:01:39.600 --> 0:01:42.319 up the sort of dubbish pivot on a silver platter. 0:01:42.440 --> 0:01:44.200 I mean, the mark is run and he's going to 0:01:44.240 --> 0:01:48.680 keep running now because frankly, the rate cuts starting as 0:01:48.680 --> 0:01:50.320 early as March. It's on the table. 0:01:50.920 --> 0:01:54.560 You've written multiple times this year, Mike, because I've read 0:01:54.560 --> 0:01:58.880 these stories about how traders have been burned by piling 0:01:58.920 --> 0:02:01.720 into bets that we're going to get cuts. Are we 0:02:01.800 --> 0:02:05.120 in the same situation now? It was something different this time, 0:02:05.160 --> 0:02:06.720 where you're not going to be writing that story in 0:02:06.720 --> 0:02:07.560 three months from now. 0:02:07.640 --> 0:02:10.200 Well, to be honest, that story changed once we got 0:02:10.200 --> 0:02:12.440 about five percent. Because the ri is reward of buying 0:02:12.480 --> 0:02:16.680 treasures at with a coupon of five percent, we're very compelling, 0:02:16.760 --> 0:02:19.520 and we wrote about that in October and when I 0:02:19.600 --> 0:02:21.720 went out to Los Angeles and southern California talked to 0:02:21.720 --> 0:02:25.280 bond managers in November. They were optimistic that they were 0:02:25.320 --> 0:02:28.080 on the right side of this trade. They were loading 0:02:28.160 --> 0:02:31.280 up on bombs above five percent that I guess at 0:02:31.280 --> 0:02:32.800 the time they didn't really think we're going to get 0:02:32.800 --> 0:02:36.359 this kind of pivot from the Fed. But it's here, 0:02:36.480 --> 0:02:39.919 and I think it's here now because the data is cooperating. 0:02:40.080 --> 0:02:43.160 We are slowing. True, the market has been ahead of this. 0:02:43.280 --> 0:02:46.480 I think Deutsche had the research saying his seventh time 0:02:46.520 --> 0:02:48.959 a charm something, and it does look like seventh time 0:02:49.040 --> 0:02:50.880 is going to be the charm. Because the FED is 0:02:50.919 --> 0:02:53.800 telling you that they want a soft landing, they will 0:02:53.800 --> 0:02:56.360 start easing. I thought one of my compelling lines from 0:02:56.400 --> 0:02:59.400 Power yesterday was when he said, we can't wait to 0:02:59.560 --> 0:03:02.799 cut rates. You know, we can't wait for inflation to 0:03:02.800 --> 0:03:04.959 get to two percent before we start cutting rates. He's 0:03:04.960 --> 0:03:07.840 telling them we're going to start cutting pretty soon if 0:03:07.880 --> 0:03:11.080 the direction of travel and inflation is down towards that 0:03:11.240 --> 0:03:13.520 sort of three percent two point nine to handle. So 0:03:14.280 --> 0:03:17.119 I think the bomb market here is in good shape. 0:03:17.400 --> 0:03:19.600 I think you're still going to have volatility because it 0:03:19.680 --> 0:03:22.520 all will take is another you know, sticky sign of 0:03:22.560 --> 0:03:25.320 inflation early next year, and suddenly that we are back up. 0:03:25.639 --> 0:03:27.639 But I think what's really compelling now for the bomb 0:03:27.880 --> 0:03:30.440 market here is that you've got six trillion dollars of 0:03:30.440 --> 0:03:33.320 money sitting in money market funds. They now have to 0:03:33.360 --> 0:03:36.520 make the move. They missed the boat back in November, 0:03:36.600 --> 0:03:38.440 when you yields are at five percent, you could have 0:03:38.440 --> 0:03:40.800 locked in a two year at five percent, five year 0:03:40.800 --> 0:03:41.520 at five percent. 0:03:41.760 --> 0:03:43.040 That's gone now. 0:03:43.080 --> 0:03:46.400 Then the highest yielding coupon on the treasury curve today 0:03:46.560 --> 0:03:49.560 is the two year at four forty. Pretty Much everything 0:03:49.560 --> 0:03:52.680 out apart from the thirty is below four percent. So 0:03:53.840 --> 0:03:57.160 any backup in yields from here is going to encourage 0:03:57.200 --> 0:03:59.920 people to start saying I've got to start shifting from cash. 0:04:00.200 --> 0:04:02.160 And that's a huge amount of money sitting there. 0:04:02.240 --> 0:04:04.840 Yeah, the question is where they actually shift that cash. 0:04:04.880 --> 0:04:06.920 I want to bring in Abigail do Little, market supporter 0:04:07.040 --> 0:04:10.800 for Bloomberg News. Abigail, I want to talk about the 0:04:10.840 --> 0:04:13.080 equity portion of this rally. You're to date, the S 0:04:13.120 --> 0:04:15.680 and B five hundred is up almost twenty three percent. 0:04:16.040 --> 0:04:18.279 As of this morning, we were talking about a new 0:04:18.560 --> 0:04:22.000 record high for the Nasdaq one hundred for the Dow. 0:04:22.440 --> 0:04:26.880 Since pulled back on these, but we're still in that area. 0:04:27.600 --> 0:04:29.480 This is the rally that caught a lot of people 0:04:29.680 --> 0:04:30.320 by surprise. 0:04:30.960 --> 0:04:34.360 It is indeed, I'm one of them, truthfully, and I've. 0:04:34.160 --> 0:04:35.400 Done you and me both friend. 0:04:35.960 --> 0:04:39.640 From a charting perspective, the markets had been charting tactically 0:04:40.800 --> 0:04:43.839 almost perfectly for nearly two years, just in terms of 0:04:43.880 --> 0:04:47.600 the various moves, and when the market started to rally 0:04:47.600 --> 0:04:50.440 at the beginning of November, the charts did reflect that. 0:04:50.560 --> 0:04:52.240 But for me, at least, it was really hard to 0:04:52.240 --> 0:04:55.400 believe it because FED chair J. Powell had been signaling 0:04:55.440 --> 0:04:58.240 that the FED was going to stay higher for longer, 0:04:58.279 --> 0:05:00.640 and even just less than two weeks, that was still 0:05:00.680 --> 0:05:02.919 his message. You could make the case that there's two Powals. Now. 0:05:02.960 --> 0:05:05.160 It's interesting what you're talking about, Tom, in terms of 0:05:05.279 --> 0:05:09.560 Whiller being the intellectual heft and Powell, you know, decided 0:05:09.600 --> 0:05:11.039 to go along with him, or maybe that was the 0:05:11.040 --> 0:05:14.320 plan all along. We just don't know what their I 0:05:14.360 --> 0:05:17.320 don't want to say trickery is, but their strategy is 0:05:17.360 --> 0:05:19.400 what I'll say. And so I think that a lot 0:05:19.400 --> 0:05:22.120 of folks had been caught off surprise by this market 0:05:22.440 --> 0:05:26.880 starting in early November, mid November, late November, and now 0:05:27.000 --> 0:05:30.560 certainly yesterday. Now what makes it very interesting is so 0:05:30.600 --> 0:05:33.520 the small cap index is still up two point six percent. 0:05:33.560 --> 0:05:35.760 You have the NAZAQ one hundred now down a quarter 0:05:35.800 --> 0:05:38.040 of a percent, and earlier today was almost down closer 0:05:38.040 --> 0:05:39.719 to one percent, So a little bit of a hangover 0:05:40.279 --> 0:05:43.640 from all of the moving to the upside. But what's 0:05:43.680 --> 0:05:45.960 really impressive is on the S and P five hundred, 0:05:46.120 --> 0:05:49.839 the volume today is almost seventy percent above the twenty 0:05:49.880 --> 0:05:52.760 day average. So that suggests that the market's all in 0:05:52.920 --> 0:05:55.479 on the idea that there is in fact a FED 0:05:55.720 --> 0:05:58.480 policy change and they want in. So the move up 0:05:58.520 --> 0:06:00.760 two tons of one percent really says nothing, but that 0:06:00.920 --> 0:06:04.320 volume suggests that folks are really repositioning. 0:06:04.400 --> 0:06:06.000 I want to go to you with this question. Abagail 0:06:06.040 --> 0:06:08.680 And asks the same question to Michael about that six 0:06:08.720 --> 0:06:10.960 trillion dollars in money market funds. Do you think what 0:06:11.000 --> 0:06:12.560 portion of that do you think we can expect to 0:06:12.600 --> 0:06:16.039 go to the equity market? And when and then where 0:06:16.040 --> 0:06:17.159 do you think it goes? If it's not in the 0:06:17.160 --> 0:06:18.839 equity market, does it go to the bond market? 0:06:19.000 --> 0:06:22.440 So from an equity market standpoint, each of the indexes 0:06:22.520 --> 0:06:25.960 right now is at a real crossroads. They're basically at resistance, 0:06:26.000 --> 0:06:28.200 so the selling pressure that has come in, So the 0:06:28.279 --> 0:06:30.840 NAZAC one hundred, it's record high, it's basically now going 0:06:30.960 --> 0:06:33.200 back down into the range. We've seen that sort of 0:06:33.279 --> 0:06:36.000 action a lot of times. It's going to be interesting 0:06:36.000 --> 0:06:38.440 to see whether or not that money does go into 0:06:38.520 --> 0:06:41.800 equities to push it higher or more. Interested in the 0:06:41.839 --> 0:06:43.760 FED if you can trade with the FED, I mean 0:06:43.800 --> 0:06:47.120 it's stocks too, but the bonds your trading in the 0:06:47.120 --> 0:06:50.160 safest asset class in the world. You know that you're 0:06:50.240 --> 0:06:53.120 backed by the biggest balance sheet in the world. Why 0:06:53.160 --> 0:06:56.000 not go there? Whereas stocks there's some risk. Right now 0:06:56.040 --> 0:06:58.960 one month correlations are higher, the vix is lower. That's 0:06:58.960 --> 0:07:02.320 a fancy way of saying that. The voltels suggest that 0:07:02.400 --> 0:07:05.000 in two to four weeks equities could be a little 0:07:05.000 --> 0:07:07.080 bit dicey because everybody's trying to move from the magnificent 0:07:07.120 --> 0:07:11.160 seven into other sectors. But the problem is that magnificent 0:07:11.200 --> 0:07:13.880 seven that's fifty percent of the Nasdaq one hundred, it's 0:07:14.000 --> 0:07:16.560 thirty percent of the S and P five hundred, So 0:07:16.600 --> 0:07:19.840 that only goes so far. So I don't know the 0:07:19.880 --> 0:07:22.200 answer to the question. If I had to speculate at 0:07:22.200 --> 0:07:26.080 this point, and also technically chart technicals on yields, there's 0:07:26.120 --> 0:07:27.920 air pockets. They're just going to keep going lower, So 0:07:27.960 --> 0:07:30.240 I would say probably more so bonds. 0:07:31.000 --> 0:07:35.480 Mike, what did you think of Powell's categorization of the 0:07:35.560 --> 0:07:39.240 loosening in financial conditions because he didn't put back on 0:07:39.320 --> 0:07:42.000 them at all, And I'm curious, like what you think 0:07:42.240 --> 0:07:44.840 he's thinking right now to look at the market action 0:07:45.000 --> 0:07:45.680 right now. 0:07:46.400 --> 0:07:49.920 I think he's and the other members of the effirmc 0:07:50.080 --> 0:07:52.920 have discovered that once you introduce financial conditions, is best 0:07:52.960 --> 0:07:55.120 just to stay quiet and move away from that. I 0:07:55.120 --> 0:07:56.520 think it was an error to do that in the 0:07:56.560 --> 0:08:00.960 last meeting. They've really set themselves in a trap. And 0:08:01.000 --> 0:08:02.800 a lot of people have talked about this. Even when 0:08:02.840 --> 0:08:06.640 they did introduce financial conditions as helping them restrict the 0:08:06.680 --> 0:08:09.000 economy back in November, there are plenty of people in 0:08:09.040 --> 0:08:11.560 the bomb market saying why are they doing this? And 0:08:11.640 --> 0:08:13.840 I think he just dodged the question. Yes, he just 0:08:14.040 --> 0:08:18.080 you know, it's I can understand why they did it 0:08:18.080 --> 0:08:21.560 at the time, but I think it's it's just too 0:08:21.680 --> 0:08:25.680 much information from the FED, and you can't really I 0:08:25.680 --> 0:08:29.400 mean financial conditions, I mean the classic financial conditioning. Tinly, 0:08:29.440 --> 0:08:31.800 we've already seen the mortgage market, but if you look 0:08:31.840 --> 0:08:35.839 at the NBA weekly data, people are still trying to 0:08:35.840 --> 0:08:38.199 get mortgages. At the end of the day, whether you 0:08:38.240 --> 0:08:40.800 pay seven eight percent, it's a thirty year rate, you 0:08:40.840 --> 0:08:42.160 know at some point you're going to be able to 0:08:42.160 --> 0:08:46.600 refinance much much lower. And people who buy houses are 0:08:46.600 --> 0:08:49.920 buying houses very much a long term perspective. 0:08:49.960 --> 0:08:51.440 Can you think about the economy. The number of people 0:08:51.440 --> 0:08:53.439 who are buying homes is relatively small, even though it 0:08:53.440 --> 0:08:55.280 has a big impact on the economy because then they 0:08:55.280 --> 0:08:57.600 go out and buy couches and they you know, redo 0:08:57.679 --> 0:09:00.480 the homes and stuff like that. But I think that's 0:09:00.600 --> 0:09:03.640 one of the reasons why we heard from j Powell 0:09:03.640 --> 0:09:05.520 over the last year that there have been a lot 0:09:05.559 --> 0:09:09.440 of Americans who are shielded from those higher mortgage rates 0:09:09.440 --> 0:09:13.280 because they've locked in those smaller mortgage rates. Abigail, I'm 0:09:13.320 --> 0:09:15.760 just in the last thirty seconds. What derails this rally? 0:09:17.080 --> 0:09:21.120 That's a great question. I think just maybe too far, 0:09:21.240 --> 0:09:24.320 too fast. And also there are a lot of people 0:09:24.400 --> 0:09:28.160 like me who are very surprised by FED chair J. 0:09:28.360 --> 0:09:31.400 Powell's sudden pivots. The best of my memory, it's the 0:09:31.440 --> 0:09:35.880 fastest since December January of twenty eighteen. I think that 0:09:35.920 --> 0:09:39.240 there's a sentiment out there that wants stocks to go down. 0:09:40.760 --> 0:09:42.520 Whether or not that works or not, I don't know, 0:09:42.559 --> 0:09:44.120 but I would say too far, too fast. I mean 0:09:44.120 --> 0:09:45.920 the NAZAC one hundred this year, in the first half 0:09:45.920 --> 0:09:47.839 it was up forty percent. It was the most ever. 0:09:48.760 --> 0:09:52.160 You know, buy through physics. Parabolic uptrends can't last. They 0:09:52.160 --> 0:09:53.400 have to at least consolidate. 0:09:53.679 --> 0:09:57.240 Yeah, it's pretty pretty remarkable moves both in the equity 0:09:57.280 --> 0:09:59.320 market hand and the bond market. A big thank you 0:09:59.440 --> 0:10:01.800 both of you for joining us for this roundtable. It's 0:10:01.800 --> 0:10:05.880 Blomberg News Markets reporter al Abigail Doolittle and Bloomberg News 0:10:06.040 --> 0:10:09.320 Rates reporter Michael mackenzie, both here in the Bloomberg Interactive 0:10:09.360 --> 0:10:12.400 Brokers studio. Emikrafao and I are just getting started on 0:10:12.559 --> 0:10:14.600 this Thursday afternoon. It's Bloomberg Business Week. 0:10:16.200 --> 0:10:19.760 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:19.800 --> 0:10:23.160 live weekday afternoons from three to six Eastern Listen on 0:10:23.200 --> 0:10:27.280 Bloomberg dot com. The iHeartRadio app and the Bloomberg Business app, 0:10:27.520 --> 0:10:30.000 or watch us live on YouTube. 0:10:30.360 --> 0:10:32.680 Okay, Emily, you've had some time to think about this. Okay, 0:10:32.880 --> 0:10:35.520 don't look at the notes. Pop quiz, where do you 0:10:35.520 --> 0:10:40.040 think the majority of US electricity comes from fossil fuels? 0:10:40.120 --> 0:10:40.280 Ah? 0:10:40.400 --> 0:10:42.360 Ding ding ding? You're right, Okay, you win. So about 0:10:42.400 --> 0:10:47.720 sixty point four percent comes from fossil fuels, so natural gas, coal, petroleum. 0:10:48.240 --> 0:10:50.760 You said solar before that it wasn't when you were 0:10:50.800 --> 0:10:54.439 right about that. Twenty one percent comes from renewables, so win, 0:10:54.559 --> 0:10:58.160 solar hydropower. So here we are more than eighty percent. 0:10:58.600 --> 0:11:00.800 The rest, well, that comes from nuclear energy, which has 0:11:00.800 --> 0:11:04.640 remained stagnant over the last decade at about nineteen percent. This, 0:11:04.720 --> 0:11:06.920 by the way, is all according to the US Energy 0:11:07.000 --> 0:11:10.800 Information Administration, But our next guest, along with many others, 0:11:10.880 --> 0:11:13.439 argue that in order to reach net zero goals, governments 0:11:13.480 --> 0:11:16.920 have to go nuclear. Maria Korusnik is CEO of the 0:11:17.000 --> 0:11:20.040 Nuclear Energy Institute. It's a nuclear industry trade association that 0:11:20.120 --> 0:11:23.920 advocates advocates for more nuclear power generation. She joins us 0:11:23.920 --> 0:11:26.000 on Zoom from Washington, d C. Maria, how are you. 0:11:26.920 --> 0:11:29.240 I'm doing great? Thanks good to hear you, good. 0:11:29.040 --> 0:11:30.760 To talk to you, and you're in luck because both 0:11:30.760 --> 0:11:34.120 Emily and I love talking on nuclear energy here. Why 0:11:34.160 --> 0:11:36.559 do you think, gosh, I want to go in so 0:11:36.600 --> 0:11:37.959 many different directions, but I want to talk to you 0:11:37.960 --> 0:11:40.960 about the challenges of nuclear energy. When people say they 0:11:41.040 --> 0:11:43.040 know it takes it's going to take nuclear energy for 0:11:43.120 --> 0:11:45.520 us to get to net zero, they also say, well, 0:11:45.559 --> 0:11:47.760 we also know that it takes so long and it's 0:11:47.840 --> 0:11:51.720 so expensive to build nuclear power plants here in the US. 0:11:51.760 --> 0:11:52.480 What would you say to that. 0:11:53.679 --> 0:11:55.280 It's say, you have to look at the value of 0:11:55.360 --> 0:11:58.840 nuclear quite frankly, right, It's that seven twenty four around 0:11:58.840 --> 0:12:02.520 the clock. Not only is a carbon free, it's highly reliable. 0:12:03.080 --> 0:12:05.960 And I think we don't talk as much about the 0:12:06.080 --> 0:12:09.680 value that you're getting. These power plants are built not 0:12:09.880 --> 0:12:13.400 for forty years, not for sixty years, you know, eighty years, 0:12:13.400 --> 0:12:16.640 one hundred years, and so you really have to look 0:12:17.080 --> 0:12:20.440 at the complete picture that you get when you build 0:12:20.520 --> 0:12:24.199 nuclear Yes, they're large projects, Yes they're going to cost 0:12:24.480 --> 0:12:27.800 in order to make that happen, but the value that 0:12:27.840 --> 0:12:33.120 they bring to the system is really incredible. And again, 0:12:33.120 --> 0:12:34.960 I think we just need to shift a little bit 0:12:34.960 --> 0:12:36.240 more to the value conversation. 0:12:36.880 --> 0:12:39.920 So you were at COP twenty eight, can you give 0:12:40.000 --> 0:12:43.319 us a sense of the narrative around nuclear energy? Was 0:12:43.360 --> 0:12:47.120 the consensus that this is green energy? Like, how were 0:12:47.160 --> 0:12:50.840 people actually talking about this form of energy? 0:12:52.080 --> 0:12:52.720 Absolutely? 0:12:52.800 --> 0:12:56.040 In fact, you know, some are coining this the nuclear 0:12:56.160 --> 0:12:58.600 cop you know, and I've been to the last few 0:12:58.760 --> 0:13:01.360 COPS and I would just describe nuclear as a little 0:13:01.400 --> 0:13:03.559 bit trying to get a seat at the table, trying 0:13:03.600 --> 0:13:06.600 to create some conversation this COP. 0:13:06.920 --> 0:13:10.800 You know, we're in the sort of official documents from COP. 0:13:10.840 --> 0:13:14.920 We're in what's called the stock take, you know, paragraphs 0:13:14.960 --> 0:13:20.760 about nuclear, about wind and solar together being what's required. 0:13:21.720 --> 0:13:25.280 The fact is that, you know, nuclear was never officially 0:13:25.400 --> 0:13:28.439 credited and mentioned in the way that it is here. 0:13:28.880 --> 0:13:33.920 Tripling nuclear was a pledge that was signed by twenty 0:13:33.960 --> 0:13:38.280 four plus countries. The IAEA had a pledge on just 0:13:38.440 --> 0:13:43.080 crediting nuclear for being part of the decarbonizing solution. Over 0:13:43.280 --> 0:13:47.160 forty countries signed that. So I would really say this 0:13:47.360 --> 0:13:52.320 COP was sort of a real, real recognition of the 0:13:52.400 --> 0:13:54.840 value that nuclear is going to bring. And quite frankly, 0:13:55.360 --> 0:13:58.400 we're not going to get anywhere close to the commitments 0:13:58.480 --> 0:14:01.160 if we don't include nuclear in the solution, we have 0:14:01.280 --> 0:14:01.720 to be there. 0:14:01.840 --> 0:14:04.240 I think people are still scared of nuclear. I have 0:14:04.320 --> 0:14:05.880 to tell you I grew up and people who've heard 0:14:05.920 --> 0:14:07.960 me talk about this before apologies, but I grew up 0:14:08.000 --> 0:14:10.000 near a nuclear power plant in California. It's actually the 0:14:10.080 --> 0:14:13.480 last online nuclear power plant right now, Diablo Canyon in 0:14:13.640 --> 0:14:17.640 San Luis, Obismo County. We would have siren drills once 0:14:17.679 --> 0:14:19.040 a year. I think it was the first weekend in 0:14:19.120 --> 0:14:22.040 September at noon when you know, the sirens would go 0:14:22.120 --> 0:14:24.840 off to to you know, warn people like, Okay, this 0:14:24.880 --> 0:14:26.360 is what would happen if there were some sort of 0:14:26.440 --> 0:14:32.440 nuclear meltdown. People had iodine pills at their disposal. Is that, 0:14:32.560 --> 0:14:34.200 you know. And they grew up, you know, thinking about 0:14:34.280 --> 0:14:39.320 Chernobyl three Mile Island. You know, get what's the safety 0:14:39.360 --> 0:14:41.200 around this stuff. For people who say, wait a second, 0:14:41.520 --> 0:14:43.240 I'm a little scared of nuclear. 0:14:44.840 --> 0:14:47.480 Yeah, honestly, it's incredibly safe. 0:14:47.560 --> 0:14:51.200 And you know, I also, I'll say, grew up around 0:14:51.240 --> 0:14:56.320 this nuclear I've operated plants. I've been a nuclear plant operator. 0:14:56.440 --> 0:14:58.960 I've been a site vice president in charge of one plant. 0:14:58.960 --> 0:15:02.640 I've been a chief nuclear officer in charge of five 0:15:02.720 --> 0:15:06.640 reactors at three locations. And I just say, I know 0:15:06.720 --> 0:15:09.760 nuclear from the inside, and I would live next to 0:15:09.760 --> 0:15:13.680 a nuclear plant any day they're in. They're incredibly safe, 0:15:13.720 --> 0:15:18.080 and especially as compared to other technologies that we need. 0:15:18.160 --> 0:15:21.760 And I would also say that, you know, nuclear uses 0:15:21.800 --> 0:15:26.640 the fewest critical minerals. Nuclear uses the lowest land space, 0:15:26.720 --> 0:15:29.920 if you will, for the volume of energy that it produces. 0:15:30.760 --> 0:15:34.720 From a life cycle perspective, it is in the lowest 0:15:34.840 --> 0:15:38.400 use of carbon for the whole life cycle of the plant. 0:15:38.960 --> 0:15:43.000 It's clean energy and uh, you know, in terms of 0:15:43.040 --> 0:15:47.560 carbon free and in terms of other emissions and and jobs. 0:15:47.640 --> 0:15:49.800 You get a lot of jobs with nuclear. There are 0:15:49.840 --> 0:15:52.479 little economic engines for the local community. 0:15:52.920 --> 0:15:55.520 I think to a lot of people it's almost perfect. 0:15:55.880 --> 0:15:57.600 But I think a lot of people would also say, 0:15:57.800 --> 0:16:01.560 what about the waste. We still haven't figured out what 0:16:01.760 --> 0:16:03.480 to do with nuclear waste. 0:16:04.440 --> 0:16:07.080 Yeah, you know, I look at that a little differently. 0:16:07.120 --> 0:16:10.880 I'm so proud of nuclear for being able to account 0:16:10.880 --> 0:16:12.080 for all of its waste. 0:16:12.240 --> 0:16:14.640 You know, oftentimes we look at nuclear and say, what 0:16:14.640 --> 0:16:15.160 are you going to do? 0:16:15.240 --> 0:16:16.680 And I say, well, you know what, we know where 0:16:16.680 --> 0:16:19.800 every piece of it is from all of the waste 0:16:20.040 --> 0:16:22.280 or all of the nuclear power that we've used since 0:16:22.280 --> 0:16:27.040 the nineteen sixties. We know where every piece of that is. 0:16:27.120 --> 0:16:29.760 And you're absolutely right. Some of the fuel that we 0:16:29.840 --> 0:16:32.760 have today, which we call waste, I would prefer to 0:16:32.800 --> 0:16:34.960 say it's used fuel. And why do I say that, 0:16:35.280 --> 0:16:39.240 because it can be used again in other types of reactors. 0:16:39.240 --> 0:16:41.520 And those other types of reactors. 0:16:41.200 --> 0:16:43.880 Are ones that we are trying to bring to the 0:16:43.920 --> 0:16:48.440 marketplace literally as we speak. And so I would say 0:16:48.440 --> 0:16:51.200 that used fuel you have today is a future resource 0:16:51.440 --> 0:16:52.640 and we should look at it like that. 0:16:53.760 --> 0:16:57.160 What's next for nuclear in the US? Are we trying 0:16:57.200 --> 0:16:59.760 to build more reactors actively in. 0:16:59.720 --> 0:17:04.400 This So we're building some down in Georgia right now. 0:17:04.480 --> 0:17:07.359 One went online this year and the second will go 0:17:07.440 --> 0:17:10.119 online next year. And what we're in the process of 0:17:10.160 --> 0:17:13.440 doing right now, if you could imagine an innovation pipeline, 0:17:13.600 --> 0:17:18.360 chocolate block full of different designs, and that is coming 0:17:18.440 --> 0:17:21.800 out over the next five, ten, fifteen years. And these 0:17:21.840 --> 0:17:26.200 are partnerships between our national labs and private companies and 0:17:26.800 --> 0:17:31.119 very much one a beautiful, quite frankly innovation here in 0:17:31.119 --> 0:17:33.600 the United States. And I'll tell you nuclear is not 0:17:33.680 --> 0:17:36.000 just being talked about in the United States. It's being 0:17:36.040 --> 0:17:38.399 talked about around the world. We just talked about cop 0:17:38.720 --> 0:17:42.320 but many other countries right now are looking to expand 0:17:42.440 --> 0:17:46.400 nuclear and they're looking at the United States to help them. 0:17:46.680 --> 0:17:48.359 So what we need to be doing here in the 0:17:48.440 --> 0:17:51.679 United States is bringing some of these innovations and getting 0:17:51.680 --> 0:17:54.240 them built so that these other countries can have a 0:17:54.320 --> 0:17:57.320 chance to see them and then choose which design they 0:17:57.359 --> 0:18:01.360 want built in their country. At cop Poland, for example, 0:18:01.440 --> 0:18:03.760 said we already have six sites. At each site, we 0:18:03.800 --> 0:18:08.080 want four small modular reactors. We're teaming with a US company. 0:18:07.920 --> 0:18:10.000 We want to put twenty four in place. 0:18:10.720 --> 0:18:13.840 Maria, I have to ask, what do you make of 0:18:13.880 --> 0:18:17.720 the price of uranium. It's up seventy five percent this year. 0:18:17.760 --> 0:18:20.879 I write about ETFs and commodities markets, and there's a 0:18:20.920 --> 0:18:26.480 lot of interest for buying into this nuclear energy uranium trade. 0:18:26.480 --> 0:18:28.680 But why is it up so much seventy five percent 0:18:28.720 --> 0:18:29.120 this year? 0:18:30.240 --> 0:18:31.200 Well, a couple of things. 0:18:31.880 --> 0:18:35.119 For one thing, we are I think that's an indication 0:18:35.480 --> 0:18:37.800 that people are bullish, if you will, as they look 0:18:37.840 --> 0:18:41.840 ahead for a nuclear and I think also we're looking 0:18:42.040 --> 0:18:46.439 very much at ensuring that we have a solid and 0:18:46.560 --> 0:18:49.320 stable fuel supply as we move forward. You've seen that 0:18:49.359 --> 0:18:53.000 we want to invest in the US fuel supply here 0:18:53.040 --> 0:18:56.080 so that we have not only the mining but also 0:18:56.200 --> 0:18:59.919 conversion and enrichment services available to this industry, so that 0:19:00.080 --> 0:19:04.199 we have a solid supply as we move forward. And 0:19:04.359 --> 0:19:06.200 so I think a lot of that has put attension 0:19:06.440 --> 0:19:08.080 on the front end of this fuel supply, and I 0:19:08.080 --> 0:19:10.000 think that's causing some of that price increase. 0:19:10.400 --> 0:19:14.359 Well, it's really interesting stuff. As I mentioned, Emily and 0:19:14.359 --> 0:19:16.719 I both love talking nuclear so we really appreciate you 0:19:16.760 --> 0:19:19.600 taking the time and joining us this afternoon. Maria kors 0:19:19.680 --> 0:19:22.720 Nik a CEO of the Nuclear Energy Institute. It is 0:19:22.800 --> 0:19:27.280 a nuclear industry trade association that advocates for more nuclear 0:19:27.280 --> 0:19:30.120 power generations. She joined us on Zoom from Washington, DC. 0:19:30.840 --> 0:19:33.560 The issue is just the timetable for these Emily, I 0:19:33.600 --> 0:19:37.520 just wonder, you know, politicians don't necessarily have long term 0:19:37.840 --> 0:19:41.439 horizons when it comes to their decision making because of 0:19:41.480 --> 0:19:43.880 reelection campaigns, and it's so hard to do these big 0:19:43.920 --> 0:19:46.639 infrastructure projects. So I just wonder, you know, what the 0:19:46.720 --> 0:19:49.040 appetite is for building more nuclear power in the US. 0:19:49.240 --> 0:19:51.400 And like you said, there's so many people that are 0:19:51.440 --> 0:19:53.800 so excited about this and then there's still some people 0:19:53.800 --> 0:19:55.840 that just can't shake that idea of Chernobyl. 0:19:56.000 --> 0:20:01.239 Yeah, you're listening to the Bloomberg Business Week. Catch us 0:20:01.280 --> 0:20:05.320 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:20:05.480 --> 0:20:08.760 the Bloomberg Business app, and YouTube. You can also listen 0:20:08.880 --> 0:20:12.000 live on Amazon Alexa from our flagship New York station, 0:20:12.440 --> 0:20:38.360 Just say Alexa Play Bloomberg eleven thirty. 0:20:27.720 --> 0:20:29.359 Out in the Cold. 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