WEBVTT - Iran and Israel Keep Up Attacks; President Trump Extends Deadline 0:00:00.040 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app, 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.560 --> 0:00:30.520 She has been a foundation for us in our coverage 0:00:30.880 --> 0:00:34.480 of this war. On a difficult Friday, into her afternoon 0:00:34.520 --> 0:00:38.000 and evening in Dubai, Jaban and Versati joins us now 0:00:38.240 --> 0:00:43.919 with Bloomberg Horizons. Jamana, I am thunderstruck by the message 0:00:43.960 --> 0:00:48.000 spinning in the American media and people covering mar Lago 0:00:48.080 --> 0:00:50.920 in the White House, and to look at the National 0:00:51.159 --> 0:00:56.440 in Dubai with every story being about attack and the 0:00:56.480 --> 0:01:00.240 results of those attacks, led by banner headlines about eight 0:01:00.880 --> 0:01:05.040 being hit by rockets? Is the Persian golf as a 0:01:05.040 --> 0:01:09.560 general statement aware of how surreal the war is across 0:01:09.600 --> 0:01:13.399 so much of America. 0:01:14.280 --> 0:01:16.400 Yeah, you know, when you use the word thunderstock, I 0:01:16.400 --> 0:01:18.360 thought for a moment you were talking about the storms, 0:01:18.400 --> 0:01:20.680 because that's also on the front page of the National 0:01:21.000 --> 0:01:24.759 Divine the UAE. I've been hit by really strong storms overnight. 0:01:25.400 --> 0:01:27.440 But I think to your point, there definitely is a 0:01:27.480 --> 0:01:31.160 disconnect between what we feel is happening on the ground 0:01:31.280 --> 0:01:34.880 and the skepticism about the possibility of a breakthrough versus 0:01:34.920 --> 0:01:37.480 what is being presented back home. That is for sure, 0:01:38.000 --> 0:01:41.559 with President Trump yesterday sort of reiterating that the talks 0:01:41.560 --> 0:01:45.360 are going well, but the rhetoric coming from Iran doesn't 0:01:45.400 --> 0:01:49.320 suggest So it doesn't really indicate that there are any 0:01:49.360 --> 0:01:53.200 direct negotiations going on or that they've agreed to an 0:01:53.200 --> 0:01:55.600 in person summit, which is what people were talking about 0:01:55.600 --> 0:01:57.480 earlier this week. There are no signs of that happening 0:01:57.520 --> 0:01:58.200 anytime soon. 0:01:58.840 --> 0:02:01.800 So Jamana, I guess one of the uncertainties I guess 0:02:01.880 --> 0:02:05.520 for market participants is we just don't know if any 0:02:05.560 --> 0:02:10.200 conversations are going between the two sides, if there's intermediaries. 0:02:10.520 --> 0:02:13.480 There doesn't seem to be any clear re reporting. What 0:02:13.520 --> 0:02:14.919 do you guys know in that part of the world. 0:02:17.320 --> 0:02:19.800 Okay, So one thing we do know for sure is 0:02:19.919 --> 0:02:23.359 Pakistan are emerging as key mediators here. The Gulf States 0:02:23.360 --> 0:02:26.920 themselves have ruled themselves out as mediators for obvious reasons. 0:02:26.960 --> 0:02:29.080 They're not going to be continued to be attacked and 0:02:29.120 --> 0:02:31.560 at the same time tried to mediate so Pakistan has 0:02:31.560 --> 0:02:35.600 stepped up alongside Egypt and Turkey, and actually the Iranian 0:02:35.639 --> 0:02:38.440 Forum Minister abbas I actually gave an interview yesterday to 0:02:38.560 --> 0:02:42.960 local state TV and he said, yes, the messages from 0:02:43.040 --> 0:02:46.240 the US are being delivered to US via Pakistan, but 0:02:46.400 --> 0:02:48.840 you should not read that as an indication that we're 0:02:48.840 --> 0:02:52.600 willing or wanting to end the war anytime soon. So 0:02:52.680 --> 0:02:55.720 that is coming through from one of the I would say, 0:02:55.760 --> 0:02:59.959 more official political voices in the Iranian regime right now. Again, 0:03:00.280 --> 0:03:03.520 no real signs that they're looking to capitulate, and if anything, 0:03:03.919 --> 0:03:06.680 they seem to be consolidating the control that they have 0:03:06.760 --> 0:03:09.280 of the strait of hormones in the last twenty four hours. 0:03:09.520 --> 0:03:09.920 Jumana. 0:03:10.000 --> 0:03:12.600 Not to be snide or curged, but just let me 0:03:12.639 --> 0:03:15.560 make it short and sweet. Is the United States of 0:03:15.600 --> 0:03:18.639 America in Israel fighting the same war. 0:03:22.320 --> 0:03:24.840 Well, they would say yes, They would say that they 0:03:24.880 --> 0:03:28.480 are militarily aligned, the objectives are aligned. But I think 0:03:28.880 --> 0:03:31.919 there's a key difference here, which is that the Israeli 0:03:31.919 --> 0:03:35.720 public is overwhelmingly behind this war. Our colleagues from the 0:03:35.760 --> 0:03:38.360 Tel Avi Boro Ethan Brunner, will say that around eighty 0:03:38.360 --> 0:03:40.760 percent of the Israeli public is behind it. That is 0:03:40.800 --> 0:03:43.440 not the case in the US. And for as long 0:03:43.640 --> 0:03:46.520 as you continue to see pushing, the push up of 0:03:46.680 --> 0:03:49.800 energy prices, the knock on effects to the US consumer 0:03:49.880 --> 0:03:53.560 potential inflation, you are going to continue to see impact 0:03:53.720 --> 0:03:57.640 on the president's pulling and also the public opinion really 0:03:57.720 --> 0:04:00.000 turning tower on the steal. And we haven't even told 0:04:00.000 --> 0:04:02.800 talked about the potential for ground troops. And there's been 0:04:02.800 --> 0:04:05.000 a lot of reporting that the US are obviously looking 0:04:05.000 --> 0:04:05.800 to deploy more. 0:04:06.560 --> 0:04:09.520 Can we do Bloomberg Horizons right now, Jumana? Can we 0:04:09.680 --> 0:04:12.440 like you know, you be the lead anchor, So, Jumana, 0:04:12.600 --> 0:04:16.520 you're in Dubai and you have the privilege of interviewing 0:04:16.600 --> 0:04:20.920 Anna Wong of Bloomberg Economics. Ladies and gentlemen from Dubai, 0:04:21.120 --> 0:04:24.200 Jumana burset you with doctor Wong here in our studios. 0:04:24.480 --> 0:04:26.080 Take it away, Jumana. 0:04:28.400 --> 0:04:30.880 She's fantastic. I don't know if you're being serious or not, 0:04:30.960 --> 0:04:32.680 but if she is, because I can't see the outpha, 0:04:32.760 --> 0:04:36.880 but she is. I think the big question that everybody 0:04:36.960 --> 0:04:40.280 is asking, Okay, the big question that everyone is asking 0:04:40.400 --> 0:04:43.320 is does the FED actually hike into this inflation shock 0:04:43.440 --> 0:04:44.280 or do they stand put. 0:04:44.600 --> 0:04:48.320 Yeah, we're actually I'm here because there was a huge conference, 0:04:48.760 --> 0:04:51.839 the ten year anniversary its ANTI conference yesterday, and I 0:04:51.920 --> 0:04:54.360 was on the panel Rich Clarita, and we were just 0:04:54.400 --> 0:05:00.160 debating this question. And so you know, typically the the 0:05:00.920 --> 0:05:03.840 FED should be seeing through an oil shock. So in 0:05:04.200 --> 0:05:07.160 the Furbus model that the FED used as a workhorse, 0:05:08.080 --> 0:05:13.359 it would say that a one hundred dollars additional increase 0:05:13.560 --> 0:05:16.720 in the oil price should actually result in a negative 0:05:17.000 --> 0:05:21.760 twelve BIPs of cuts, whereas today, I think the market 0:05:21.760 --> 0:05:25.359 has priced in about positive twelve BIPs of hikes. So 0:05:25.440 --> 0:05:29.800 I think and that's where that's a disconnect between market 0:05:29.880 --> 0:05:32.440 pricing and a model. But I think the market is 0:05:32.480 --> 0:05:35.840 also thinking about all these other shocks aside from oil shocks, 0:05:35.839 --> 0:05:40.279 such as fertilizer shocks, such as computer memory chips shock, 0:05:40.400 --> 0:05:42.560 which personally I'm more concerned about. 0:05:43.040 --> 0:05:46.280 Helped Youvana here, it's one hundred and eleven dollars a 0:05:46.360 --> 0:05:50.200 barrel oil? Is that a new tip point for anamog? 0:05:51.279 --> 0:05:54.159 Yesterday I actually modeled I showed the result of a 0:05:54.200 --> 0:05:57.640 two hundred dollars barrel oil because I think if you 0:05:57.880 --> 0:06:00.880 and and you know, you think about the worst case 0:06:01.200 --> 0:06:04.680 two hundred dollars oil will cause the headline CPI to 0:06:04.720 --> 0:06:09.160 go up to possibly six percent five point five six percent. 0:06:09.640 --> 0:06:13.200 But even if it stays at two hundred dollars, the 0:06:13.520 --> 0:06:17.240 important insight that the year of year will immediately fall 0:06:17.880 --> 0:06:20.239 in twenty twenty seven and by the end of twenty 0:06:20.279 --> 0:06:23.159 twenty seven early twenty twenty eight, it will fall back 0:06:23.200 --> 0:06:26.560 to pre aron. So that's the nature of a transitory shock. 0:06:26.800 --> 0:06:27.240 Jumana. 0:06:27.360 --> 0:06:29.800 Last question, if you didn't fall off your chair there, 0:06:30.120 --> 0:06:34.080 what does two hundred dollars a barrel oil do to 0:06:34.160 --> 0:06:35.760 the Arab world? 0:06:39.680 --> 0:06:43.160 Well, it depends on how long the disruptions around the 0:06:43.160 --> 0:06:45.719 Street of Humus last for. And I think the issue 0:06:45.760 --> 0:06:48.039 is that they're sitting on all of this oil that 0:06:48.080 --> 0:06:49.920 they would like to get out. But they can get 0:06:49.960 --> 0:06:53.120 it out. Obviously, in the case of Saudi Arabia and 0:06:53.160 --> 0:06:55.640 the UAE, they've managed to divert a good sum of it, 0:06:55.760 --> 0:06:58.360 you know, the the East West pipeline in Saudi Arabia. 0:06:58.760 --> 0:07:00.560 One thing I will leave you with though, we were 0:07:00.600 --> 0:07:03.520 looking at the local stock market industry's performance over the 0:07:03.560 --> 0:07:06.760 last month. Tadowell, which is the Saudi stock market is 0:07:06.800 --> 0:07:09.920 actually positive since this war started. It's up four percent 0:07:09.960 --> 0:07:12.520 to account for the fact that oil prices are high. Right, 0:07:12.720 --> 0:07:14.400 That is not the case for the rest of the region, 0:07:14.440 --> 0:07:17.320 which obviously a lot more vulnerable and exposed from a 0:07:17.360 --> 0:07:18.400 non oil perspective. 0:07:18.640 --> 0:07:20.640 Shamana, thank you so much on a Friday I for 0:07:20.680 --> 0:07:24.320 your leadership on all of this Bloomberg horizons in Dubai, 0:07:24.360 --> 0:07:27.760 and please have some sense of a RESTful weekend. Shell 0:07:27.800 --> 0:07:30.800 be out leading our coverage here in the coming days. 0:07:30.880 --> 0:07:33.680 Jaman E present you again in Dubai. We continue with 0:07:33.840 --> 0:07:37.960 Anna one of Bloomberg Economics. Okay, I don't need to 0:07:38.000 --> 0:07:40.640 know what you and Vice Jr. Mcclareda talked about. But 0:07:40.760 --> 0:07:46.000 at Chicago, you look at the Becker Freeman Institute define 0:07:46.080 --> 0:07:49.280 demand destruction right now for Anna Wong. And when I 0:07:49.280 --> 0:07:51.800 look at my Bloomberg launch pad, are we going to 0:07:52.000 --> 0:07:53.600 enjoy demand destruction? 0:07:54.160 --> 0:07:54.440 Yeah? 0:07:54.480 --> 0:07:57.320 So the one big beautiful bill is probably going to 0:07:57.440 --> 0:08:01.480 boost the average household in buying three hundred and fifty 0:08:01.560 --> 0:08:05.600 to eight hundred dollars. And I think about demand destruction 0:08:05.720 --> 0:08:09.040 by how much oil price has to rise in order 0:08:09.080 --> 0:08:12.880 to completely offset this boost that they're supposed to get. 0:08:13.160 --> 0:08:16.440 And my calculation is as long as oil price stays 0:08:16.480 --> 0:08:20.000 above eighty three dollars per barrel, you'll see there that 0:08:20.640 --> 0:08:23.120 And then if you look at the oil futures price, 0:08:23.400 --> 0:08:27.600 it has it's slightly at below eighty three dollars in 0:08:27.640 --> 0:08:30.120 the second half of this year into twenty twenty six. 0:08:30.440 --> 0:08:36.520 So I think that is telling you there's minor demand destruction. However, 0:08:36.840 --> 0:08:41.800 if oil price exceed the oil future curve, which I 0:08:41.800 --> 0:08:45.200 think there's a very good case to say it should be, 0:08:45.760 --> 0:08:49.679 then I think there would be a demand destruction. I 0:08:49.720 --> 0:08:52.920 think that will shave off from GDP a couple percentage 0:08:52.920 --> 0:08:53.520 point from. 0:08:53.360 --> 0:08:55.000 This year inflation. 0:08:56.480 --> 0:08:58.400 You know, we're seeing it at the pump right now, 0:08:58.440 --> 0:09:03.000 it's real, it's tangible, or everybody out there. When we 0:09:03.040 --> 0:09:06.600 see it in the numbers that maybe the FED will 0:09:06.640 --> 0:09:09.280 really start to see it. I know they sent it's 0:09:09.280 --> 0:09:10.280 out there, but they'll see it. 0:09:11.040 --> 0:09:15.319 Yes, they'll see it. And I mean in my simulation 0:09:15.600 --> 0:09:18.800 of a two hundred dollars per barrel oil, I see 0:09:18.880 --> 0:09:23.560 gasoline price going to eight dollars per gallon, and in 0:09:23.600 --> 0:09:26.120 that case, the headline CPI, as I said, we'll go 0:09:26.160 --> 0:09:28.840 to five point five to six percent. But I think 0:09:28.880 --> 0:09:33.559 the scarier thing is something that's more persistent because the 0:09:33.600 --> 0:09:38.640 oil shock will eventually go away. And as our reporter 0:09:38.760 --> 0:09:41.520 just said, there's all this oil stuck in the gulf. 0:09:41.600 --> 0:09:44.319 So what happens when the straight up horn mows is 0:09:44.600 --> 0:09:48.160 partially open? You suddenly see this flood of oil coming? 0:09:48.360 --> 0:09:51.319 Are you talking about a swing to I mean, I've 0:09:51.360 --> 0:09:55.120 heard this from a number of people. Were not there yet, 0:09:56.000 --> 0:10:00.040 but in your uncertainty one of your models is this 0:10:00.080 --> 0:10:03.280 inflation sudden disinflation? 0:10:03.480 --> 0:10:07.280 Right, Yes, it's a risk that you cannot discount certainly. 0:10:08.360 --> 0:10:10.840 What I've also heard is that this war will raise 0:10:10.920 --> 0:10:15.320 the premium, you know, for oil, maybe by twenty dollars 0:10:15.400 --> 0:10:18.280 extra dollar per barrel. So if the fair price before 0:10:19.200 --> 0:10:21.599 before the war sixty five dollars per barrel, then it 0:10:22.280 --> 0:10:24.959 permanently would be at eighty five dollars per barrel. But 0:10:25.440 --> 0:10:28.520 as I said, even if oil price stay elevated at 0:10:28.559 --> 0:10:32.880 that permanently higher level, is the delta that drives inflation, right, 0:10:33.240 --> 0:10:37.040 as long as inflation expectations are anchored, that delta would 0:10:37.040 --> 0:10:39.640 not keep pushing up and you will have a decline 0:10:39.640 --> 0:10:40.080 in your. 0:10:39.960 --> 0:10:42.439 Okay, Paul wants to jump in here, I'm being rude. 0:10:43.000 --> 0:10:45.840 Is the FED down over anchored? Are we like almost 0:10:45.880 --> 0:10:47.479 too fixated unanchored? 0:10:48.720 --> 0:10:51.400 I think the FED is not fixated u anchored, And 0:10:51.520 --> 0:10:54.880 it is because of that lack of confidence that it 0:10:54.960 --> 0:10:58.840 will be anchored. That they are talking about their job 0:10:58.880 --> 0:11:03.439 owning the finance market and they are kind of okay 0:11:03.559 --> 0:11:06.679 with the financial market pricing and twelve BIPs of hikes. 0:11:07.360 --> 0:11:10.520 You know, yesterday I was filling up my car paying 0:11:10.559 --> 0:11:13.000 more and the woman next to me in a pickup truck, 0:11:13.160 --> 0:11:15.160 she has a landscape business. She was filling up like 0:11:15.200 --> 0:11:17.800 six or seven gas cans and I was talking to 0:11:17.840 --> 0:11:20.080 her about it, and she says, this is my profit. 0:11:20.120 --> 0:11:21.359 I just lost my week's. 0:11:21.080 --> 0:11:23.280 Profit right there due to this hiery That was my 0:11:23.480 --> 0:11:26.040 profit for the week on the number of jobs I had. 0:11:26.360 --> 0:11:28.080 When are we going to which was tough to hear, 0:11:28.160 --> 0:11:28.959 But when are. 0:11:28.920 --> 0:11:30.280 You going to see? When will we see that? 0:11:30.320 --> 0:11:31.200 In consumer spending? 0:11:32.040 --> 0:11:35.880 Yeah, So suppose that the one big beautiful bill was 0:11:35.920 --> 0:11:40.000 supposed to give an average consumer an extra three hundred 0:11:40.000 --> 0:11:43.400 and fifty dollars to spend after this tax season, right, 0:11:43.880 --> 0:11:48.520 and the average households spent about two hundred dollars per 0:11:48.559 --> 0:11:53.200 month on gasoline. So if oil price has gasoline prices 0:11:53.240 --> 0:11:57.920 increased by thirty three percent, then you're basically you know, 0:11:58.280 --> 0:12:02.760 you you have to pay about sixty dollars more per month, 0:12:02.840 --> 0:12:05.319 and so three hundred and fifty dollars extra tax for 0:12:05.400 --> 0:12:09.120 fund defined by sixty is the runway. So in maybe 0:12:09.120 --> 0:12:10.319 five to six months. 0:12:10.280 --> 0:12:11.400 I got thirty seconds. 0:12:11.400 --> 0:12:13.080 We got to get you up here because Tucker insists 0:12:13.160 --> 0:12:15.679 on sitting in the chair of the news is so difficult. 0:12:15.520 --> 0:12:18.240 Anahom okay, two hundred dollars. We're all upset here. 0:12:18.320 --> 0:12:22.000 Paul's breaking out the Tito's maintain, what if we only 0:12:22.040 --> 0:12:25.440 go up another twenty dollars, I mean one twenty eight, 0:12:25.640 --> 0:12:28.559 one thirty two a Brent crude barrel. 0:12:29.120 --> 0:12:31.520 I'm sorry, that's not good, right. 0:12:31.720 --> 0:12:34.240 Well, it's still not good. Higher oil price is not good. 0:12:34.600 --> 0:12:36.679 That would be the same as the peak in the 0:12:36.720 --> 0:12:41.200 twenty twenty two peak of the energy crisis. Then, so 0:12:41.240 --> 0:12:44.360 that would be doubling the oil price. And I will 0:12:44.800 --> 0:12:47.160 I think a gasoline price will go up to five 0:12:47.240 --> 0:12:53.000 dollars and in that case, headline CPI will go up 0:12:53.559 --> 0:12:59.000 by one point eight percentage point, so two point four 0:12:59.080 --> 0:13:01.439 pre war plus one point eight. But she's at four 0:13:01.480 --> 0:13:01.840 point two. 0:13:01.880 --> 0:13:05.720 You can bring a bar conversation to Did I do okay? 0:13:05.800 --> 0:13:08.200 Picking Berry King Green as my book of the summer, 0:13:08.600 --> 0:13:09.480 Money and Borders. 0:13:09.600 --> 0:13:12.960 He was my former he was my undergraduate thesis advisor. 0:13:13.040 --> 0:13:15.360 He yeah, so I did okay? 0:13:15.559 --> 0:13:18.760 Yes, I mean people, it's a little it's a little 0:13:18.760 --> 0:13:20.920 more weighty than Rogoff's book last year. 0:13:21.360 --> 0:13:24.400 It's like Berry Iking Green. Serious. But if you're going 0:13:24.440 --> 0:13:26.439 to do the dollar, you go to King Green. Right, 0:13:26.640 --> 0:13:29.800 that's right. So I did okay. Okay, You're dismissed and 0:13:30.360 --> 0:13:34.679 thank you so much. Stay with us more. 0:13:34.600 --> 0:13:37.480 From Bloomberg Surveillance coming up after this. 0:13:44.760 --> 0:13:48.320 You're listening to the Bloomberg Surveillance podcast. Catch US Live 0:13:48.400 --> 0:13:51.560 weekday afternoons from seven to ten am Eastern Listen on 0:13:51.640 --> 0:13:55.040 Apple Karplay and Android Otto with the Bloomberg Business app, 0:13:55.200 --> 0:13:56.960 or watch US live on YouTube. 0:13:57.480 --> 0:13:58.920 S SHAW with us. 0:13:58.760 --> 0:14:03.520 Now Chief Clothes Strategy Principal Asset Management SIMA. What does 0:14:03.559 --> 0:14:08.160 the bond market tell equity stock market and participants? 0:14:09.920 --> 0:14:12.160 Yeah, Hi, Tom, it's good to be with you. 0:14:12.240 --> 0:14:12.480 Well. 0:14:12.640 --> 0:14:14.240 I think what we've been seeing in the last couple 0:14:14.280 --> 0:14:16.280 of weeks is that the bond market has been very, 0:14:16.400 --> 0:14:20.400 very concerned about the conflict the potential impact inflation pressures, 0:14:20.400 --> 0:14:23.520 how centromats are going to be responding, Whereas with the 0:14:23.520 --> 0:14:25.840 acuty market, there's ontainly been more of a reaction this week, 0:14:25.880 --> 0:14:27.960 but there has been I think a little bit of complacency. 0:14:28.000 --> 0:14:31.080 So there's something in between the bond market saying this 0:14:31.160 --> 0:14:34.600 is really severe, the actually market has been a little 0:14:34.600 --> 0:14:37.400 bit more muted. We think the reality is somewhere in between. 0:14:38.600 --> 0:14:42.120 So, Asima, how do you what are the conversations you're 0:14:42.120 --> 0:14:44.480 having with your clients these days? Are people pulling in 0:14:44.640 --> 0:14:47.080 risk waiting to see how this plays out, or are 0:14:47.080 --> 0:14:49.360 they trying to look to the other side, look through 0:14:49.400 --> 0:14:51.960 this and try to focus on the fundamentals here. What 0:14:52.040 --> 0:14:52.960 are those conversations. 0:14:53.720 --> 0:14:56.560 Yeah, it's been really interesting. I think generally investors want 0:14:56.640 --> 0:14:59.800 to see how this is going to pan out. You know, 0:15:00.000 --> 0:15:03.520 typically gyboltical crossis they don't have a very sustained significant 0:15:03.560 --> 0:15:05.560 impact on the market. But I think from early days 0:15:05.560 --> 0:15:08.720 investors were more worried about this one, more concerned that 0:15:08.800 --> 0:15:12.720 they could be a more protracted impact. And so certainly 0:15:12.720 --> 0:15:14.640 what we're seeing is that although they're trying to stay 0:15:14.720 --> 0:15:18.480 quite positive and looking at the constructive macro foundations that 0:15:18.520 --> 0:15:22.160 were already in play. There are concerns about trying to 0:15:22.520 --> 0:15:25.600 buy the dip and repositioning off the back of this. 0:15:25.760 --> 0:15:27.720 So I think that this is something of a bit 0:15:27.720 --> 0:15:31.360 of a parallel paralysis across investors, rather than looking at 0:15:31.400 --> 0:15:35.000 it as an opportunity to kind of buy some things 0:15:35.000 --> 0:15:36.520 which are on good offer at the. 0:15:36.520 --> 0:15:41.440 Moment, baseline outlook, how do you kind of frame out 0:15:41.560 --> 0:15:43.920 where this might check out it? I mean, a lot 0:15:43.920 --> 0:15:46.920 of folks are concerned that this oil may in fact 0:15:46.960 --> 0:15:49.680 be higher for longer, It may have an impact on 0:15:49.760 --> 0:15:52.520 economic growth that may have an impact on inflation. 0:15:52.600 --> 0:15:53.200 What's your view? 0:15:54.440 --> 0:15:59.800 Yeah, it's almost impossible to play out how this conflict 0:15:59.840 --> 0:16:01.680 is going to be going on. So I know a 0:16:01.680 --> 0:16:03.760 lot of people have been trying to utilize scenarios. We've 0:16:03.800 --> 0:16:05.680 done the same thing, But I think we are leaning 0:16:05.680 --> 0:16:07.440 towards the idea that, look, this is going to be 0:16:07.480 --> 0:16:11.040 more protracted. We think anti prices are going to stay 0:16:11.120 --> 0:16:13.680 more elevated than people were anticipating, and they're going to 0:16:13.720 --> 0:16:16.360 stay more elevated for a longer time period given the 0:16:16.360 --> 0:16:19.000 impact to in guinefrastructure. The other thing that we're doing 0:16:19.040 --> 0:16:20.680 is we're trying to put a little bit more emphasis 0:16:20.680 --> 0:16:22.520 on the fact that this isn't just about the direct 0:16:22.680 --> 0:16:25.360 energy and all prices, it's all the other goods which 0:16:25.400 --> 0:16:29.320 are going to be impacted by the conflict. So that's helium, words, 0:16:29.320 --> 0:16:33.720 that's sulfur, fertilizer, et cetera. So with that, we are 0:16:33.760 --> 0:16:38.480 downgrading forecasts almost around the world, the US the least, 0:16:38.480 --> 0:16:43.080 obviously because of energy exporter status, but we are seeing 0:16:43.080 --> 0:16:44.840 that now. The thing that we are probably feeling more 0:16:44.880 --> 0:16:47.920 confident about is around the Central Bank forecast and they're 0:16:48.000 --> 0:16:50.800 rather than the leaning on scenarios and that we have 0:16:51.000 --> 0:16:54.160 clearly stated that we're adjusting our forecasts, moving the sight 0:16:54.280 --> 0:16:56.680 to the more hawkish ground. But there is a symmetry 0:16:56.760 --> 0:16:58.400 across a global central bank space. 0:16:58.880 --> 0:17:05.040 What's the value looking at risk, uncertainty, ambiguity and our 0:17:05.040 --> 0:17:08.320 listeners and viewers Seemen can choose whichever of those they're 0:17:08.359 --> 0:17:13.880 looking at, of do nothing? What's the value to Seema 0:17:13.920 --> 0:17:18.560 Shah of do nothing on this Friday? 0:17:19.280 --> 0:17:21.040 Well, I think I mean the value is that there 0:17:21.080 --> 0:17:24.000 is so much noise, even the various posts that we're 0:17:24.000 --> 0:17:28.320 seeing from the President, the responses that we're getting from wrong, 0:17:28.440 --> 0:17:32.040 it's very difficult to understand how this exactly is playing out. 0:17:32.400 --> 0:17:35.159 So trying to make moves on something which is generally 0:17:35.160 --> 0:17:37.520 a lot of noise at the moment is I think 0:17:38.480 --> 0:17:40.919 very difficult. It's very uncertain exactly how this is going 0:17:40.960 --> 0:17:43.400 to play out, which is why we're seeing so many 0:17:43.400 --> 0:17:47.240 investors just sit still and really focusing on the fact 0:17:47.240 --> 0:17:49.280 that there has been macro strength and so once this 0:17:49.400 --> 0:17:52.159 conflict ends, some of the things that will already employ 0:17:52.359 --> 0:17:55.439 the various dynamics that were there will reassert themselves. But 0:17:55.480 --> 0:17:57.879 you know, this is a very very challenging environment for 0:17:57.920 --> 0:18:00.359 investors simply of not knowing how long this is going 0:18:00.359 --> 0:18:02.239 to go on, for how severe it's going to be. 0:18:03.000 --> 0:18:05.760 Past Screenian term Kein of Sema Shaw, we continue now 0:18:05.760 --> 0:18:10.280 with the chief Global strategist Principal Asset Management Sima. What 0:18:10.359 --> 0:18:14.760 will you write about Monday within the study of markets 0:18:14.800 --> 0:18:18.800 in linking them into a global strategy, What's going to 0:18:18.800 --> 0:18:20.760 be your theme to publish for Monday Morning? 0:18:22.520 --> 0:18:24.280 I mean, gosh, it could be anything, but I think 0:18:24.280 --> 0:18:26.600 at the moment it's really about trying to focus on 0:18:26.680 --> 0:18:28.800 whether or not which reagions are the most exposed. We 0:18:28.800 --> 0:18:31.080 already know that the US is looking the most resilient. 0:18:31.440 --> 0:18:34.359 But how long that can can that persist for? And 0:18:34.400 --> 0:18:36.680 what are the vulnerabilities that One of the interesting things 0:18:36.720 --> 0:18:39.159 I think is it coming into this year, there was 0:18:39.200 --> 0:18:43.240 an expectation that US consumers would be quite resilient, particularly 0:18:43.280 --> 0:18:45.320 because of this for stimulus coming through from the One 0:18:45.320 --> 0:18:47.920 Big Beautiful Bill. Now what we're seeing is that the 0:18:47.960 --> 0:18:52.200 gasoline prices increase that's coming through more than offsets some 0:18:52.280 --> 0:18:55.720 of that benefit from the One Big Beautiful Bill. So 0:18:55.800 --> 0:18:59.200 we're trying to understand exactly how vulnerable US consumers are 0:18:59.320 --> 0:19:02.240 this year relative to where we started the twenty twenty 0:19:02.280 --> 0:19:03.440 six SEEMA. 0:19:03.520 --> 0:19:07.280 We see the dollar resuming kind of a safe safe 0:19:07.359 --> 0:19:10.240 haven status, rising from a dxy, rising from a ninety 0:19:10.280 --> 0:19:14.280 six level to today around one hundred. Is that kind 0:19:14.320 --> 0:19:16.199 of does that make sense for you, because boy, that 0:19:16.280 --> 0:19:19.159 wasn't the case during the tariff situation last year when 0:19:19.160 --> 0:19:20.760 people kind of were shedding the dollar. 0:19:22.480 --> 0:19:23.880 I guess I think it has been a little bit 0:19:23.920 --> 0:19:27.720 surprising given them. I think the structural aspects which we're 0:19:27.720 --> 0:19:30.520 pushing DOLLI lower were very much in play, and particularly 0:19:30.560 --> 0:19:33.840 when you consider that this is from a central bank perspective, 0:19:33.840 --> 0:19:36.479 the FED is likely to be the most dubvish, So 0:19:36.680 --> 0:19:39.800 we are expecting that once it comfort ends whatever that is, 0:19:40.240 --> 0:19:43.040 that the dollar reasserts that down which trend that had 0:19:43.080 --> 0:19:43.840 already been in play. 0:19:44.480 --> 0:19:45.840 See we got to let you go. 0:19:45.880 --> 0:19:48.199 But the headline just comes out Paul Sweeney right in 0:19:48.200 --> 0:19:52.440 the headline for Bloomberg nasdeck one underdrops ten percent from 0:19:52.520 --> 0:19:55.440 October high set to enter correction. 0:19:56.119 --> 0:19:56.480 Is there a. 0:19:56.560 --> 0:19:59.520 Sema Shaw fear of missing out when the nasdeck pulls 0:19:59.560 --> 0:20:00.280 back ten. 0:20:01.520 --> 0:20:03.240 I know we don't have. Really, it's really important. You 0:20:03.240 --> 0:20:04.720 asked me before what I've been writing about, and this 0:20:04.760 --> 0:20:07.280 is actually a key thing is that technology has been 0:20:07.280 --> 0:20:09.520 a favorite for investors over the last couple of weeks, 0:20:09.560 --> 0:20:13.120 but there are vulnerabilities within that tech supply chain, which 0:20:13.160 --> 0:20:16.159 I think is starting to feed through to invest his 0:20:16.240 --> 0:20:18.119 perspectives about how to position. 0:20:18.160 --> 0:20:20.240 Seema, Thank you so much, Sema Shaw with us the 0:20:20.240 --> 0:20:23.800 principal asset management, greatly appreciate that. 0:20:25.600 --> 0:20:26.280 Stay with us. 0:20:26.560 --> 0:20:29.760 More from Bloomberg Surveillance coming up after this. 0:20:37.040 --> 0:20:40.639 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:20:40.680 --> 0:20:43.720 weekday afternoons from seven to ten am. E's durn Listen 0:20:43.760 --> 0:20:47.359 on Applecarplay and Android Otto with the Bloomberg Business app 0:20:47.520 --> 0:20:49.320 or watch us live on YouTube. 0:20:49.480 --> 0:20:52.120 We are skilled to bring you Bob Michael Global Ahead 0:20:52.119 --> 0:20:55.919 of fixed Income JP Morgan Asset Management the real yield 0:20:55.960 --> 0:20:57.600 out of two point one one percent. 0:20:57.840 --> 0:21:01.320 I haven't done a standard deviation study. When does a 0:21:01.880 --> 0:21:03.639 higher real yield. 0:21:03.880 --> 0:21:07.760 Impinge on the American economy and on industry in America? 0:21:08.840 --> 0:21:12.959 Well, I would argue right now it's already starting to 0:21:13.040 --> 0:21:16.600 have an impact, because it was only a week ago 0:21:16.800 --> 0:21:20.280 that we came out of the FMC meeting expecting a 0:21:20.320 --> 0:21:23.800 couple rate cuts, and you looked at the labor market 0:21:23.880 --> 0:21:27.040 that was their primary concern for good reason, it seemed 0:21:27.040 --> 0:21:29.840 a bit soft. Now you're paying a lot more to 0:21:29.960 --> 0:21:33.280