WEBVTT - Bloomberg Surveillance TV: January 12th, 2026 0:00:00.080 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.720 with Lisa Bromwitz and Amrie Hordert. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.920 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 --> 0:00:31.240 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.159 Terminal and the Bloomberg Business app. Turning back to the 0:00:37.200 --> 0:00:39.880 Federal Reserve sources telling us our colleagues here at Bloomberg 0:00:40.120 --> 0:00:43.519 that a driving force behind the DOJ's decision subpoena the 0:00:43.520 --> 0:00:47.600 Central Bank is the Federal Housing Finance Agency Director Bill Pulty. 0:00:47.840 --> 0:00:50.040 Director Porty has been busy over the last week, some 0:00:50.080 --> 0:00:52.960 purchases of MBS and Focus as well. Director Poruty. Welcome 0:00:52.960 --> 0:00:55.240 to the program sir. You are cited in our story 0:00:55.240 --> 0:00:57.640 this morning. Just wanted to give the opportunity to respond 0:00:57.640 --> 0:01:00.360 to it. But what was your role in the developside 0:01:00.320 --> 0:01:01.320 of a weekend. 0:01:02.240 --> 0:01:04.760 The DOJ's outside of my purview, This is out of 0:01:04.760 --> 0:01:06.840 my purview. I don't know anything about it, and I 0:01:06.840 --> 0:01:08.800 would refer you to the DOJ bill. 0:01:08.959 --> 0:01:10.760 You haven't been shy of sharing your thoughts on the 0:01:10.800 --> 0:01:13.640 Federal Reserve before, particularly over the last twelve months. You 0:01:13.840 --> 0:01:17.440 thought that the chairman would ultimately resign. He's standing firm. 0:01:17.520 --> 0:01:19.800 Do you think this push against the Federal Reserve is 0:01:19.840 --> 0:01:23.039 actually leading to unintended consequences and leading this fed to 0:01:23.120 --> 0:01:23.520 dig in. 0:01:24.600 --> 0:01:27.720 My main focus, John has been on reducing mortgage rates 0:01:27.720 --> 0:01:29.760 to the extent that we can do it and increasing 0:01:29.800 --> 0:01:33.520 housing affordability. President Trump announced a huge thing last week 0:01:33.680 --> 0:01:36.360 when he decided that he was going to ban institutions 0:01:36.520 --> 0:01:40.160 from buying homes. Basically, the concept is that people should 0:01:40.200 --> 0:01:42.720 be living in homes, not corporations. You know, we have 0:01:42.760 --> 0:01:45.520 a supply problem in this country, and obviously we're working 0:01:45.520 --> 0:01:48.000 on the demand side of things, because in some cases, 0:01:48.080 --> 0:01:50.880 affordability has gotten so tough that people don't even want 0:01:50.880 --> 0:01:52.800 to buy a home because of what Joe Biden did, 0:01:53.000 --> 0:01:55.640 and so we're reversing that. That's what we're focused on. 0:01:55.760 --> 0:01:57.600 We had a huge one to two punch last week. 0:01:57.640 --> 0:02:00.920 You saw mortgage rates moved twenty five base points lower 0:02:01.120 --> 0:02:03.320 on the news that Fanny and Freddie have started to 0:02:03.440 --> 0:02:07.720 undergo a two hundred billion dollar mortgage bond buy. And 0:02:08.160 --> 0:02:09.880 I think you're going to see some very exciting things 0:02:09.880 --> 0:02:12.640 come out of Davos. With regard to the President on housing, 0:02:12.840 --> 0:02:13.960 in a couple in a week. 0:02:13.960 --> 0:02:16.480 Director BOLDI, you were with the President this weekend, I believe, 0:02:16.560 --> 0:02:19.200 traveling with him on Air Force one from Washington to 0:02:19.280 --> 0:02:21.639 Palm Beach. Did you talk about the Federal Reserve with 0:02:21.720 --> 0:02:22.440 him this weekend? 0:02:23.320 --> 0:02:25.680 Obviously I would never talk about anything that the President 0:02:25.880 --> 0:02:27.920 and I talk about. I would say this that the 0:02:27.919 --> 0:02:32.720 President is laser focused on housing affordability and reversing what 0:02:32.800 --> 0:02:35.280 has happened these last four years. You look at the 0:02:35.320 --> 0:02:38.920 average mortgage payment under Joe Biden, it's skyrocketed compared to 0:02:38.960 --> 0:02:41.800 what it was under President Trump's first term. We are 0:02:41.840 --> 0:02:45.000 focused on bringing down not only the mortgage rates, but 0:02:45.080 --> 0:02:49.400 also the day to day cost in upkeeping homes, which 0:02:49.440 --> 0:02:51.520 has to do with you know, whether it be your 0:02:51.560 --> 0:02:55.880 ongoing expenses, mortgage insurance, etc. There are so many pieces 0:02:55.880 --> 0:02:59.040 to the cost puzzle that at the FHFA US Federal 0:02:59.080 --> 0:03:02.400 Housing we are working to reduce the costs bird and 0:03:02.440 --> 0:03:03.440 that Americans have. 0:03:03.800 --> 0:03:05.880 I know that you've seen the report from our colleagues. 0:03:05.919 --> 0:03:09.240 I've also got calls last night about the subpoena handed 0:03:09.280 --> 0:03:11.880 to the FED and was told that you were part 0:03:11.919 --> 0:03:14.200 of it, pulling together a report that then went to 0:03:14.240 --> 0:03:16.960 the DOJ. I just wanted to go since from you, 0:03:17.760 --> 0:03:20.919 did the President know this was coming? The Treasury Secretary 0:03:20.960 --> 0:03:22.799 know this was coming? Have you had any of these 0:03:22.840 --> 0:03:25.240 conversations again. 0:03:25.000 --> 0:03:27.600 On that matter, I'd refer you to the Department of Justice. 0:03:27.800 --> 0:03:29.919 Okay, well, we'll wait to hear from the Department of Justice. 0:03:30.080 --> 0:03:32.200 When it goes back to the mortgage backed securities that 0:03:32.240 --> 0:03:36.240 you have been talking about. You already been purchasing about 0:03:36.360 --> 0:03:38.800 north of two hundred and thirty billion dollars of them 0:03:38.920 --> 0:03:41.880 last year. There is a cap. Do you expect to 0:03:41.920 --> 0:03:43.280 reach that cap this year? 0:03:44.160 --> 0:03:46.280 I think all options are on the table. President Trump 0:03:46.320 --> 0:03:48.560 is a president who keeps all options on the table. 0:03:48.840 --> 0:03:52.000 We announced this historic two hundred billion dollar buyback of 0:03:52.120 --> 0:03:55.480 mortgage bonds. This is a huge deal, and you know 0:03:55.560 --> 0:03:57.520 we'll keep all options on the table. Look, we're doing 0:03:57.520 --> 0:03:59.880 our part of Fannie and Freddy. Most presidents didn't even 0:03:59.880 --> 0:04:03.080 know Fanny and Freddie existed. Obviously, your community in Bloomberg 0:04:03.160 --> 0:04:04.920 and all of us in the private sector. We know 0:04:05.000 --> 0:04:07.120 the importance of Fanny and Freddy, but for the average 0:04:07.200 --> 0:04:10.320 day American, they don't understand because the presidents haven't made 0:04:10.360 --> 0:04:14.640 it a priority. Average Americans haven't understood that presidents had 0:04:14.720 --> 0:04:17.960 this authority until President Trump found this authority, which is 0:04:18.000 --> 0:04:21.680 basically to utilize these companies to be companies. Imagine that 0:04:21.960 --> 0:04:23.800 get people to show up back to work. You know, 0:04:23.880 --> 0:04:26.520 we had sixteen thousand people. We have sixteen thousand people 0:04:26.720 --> 0:04:29.120 at the two companies. When I showed up on the 0:04:29.120 --> 0:04:31.280 scene and President Trump came into office, they were all 0:04:31.279 --> 0:04:34.480 working from home. We'd go to these big buildings, air conditioning, 0:04:34.520 --> 0:04:37.760 spewing everywhere, spending fifty million dollars a year on leases. 0:04:37.920 --> 0:04:40.320 Nobody was in these buildings. So we have turned around 0:04:40.360 --> 0:04:43.000 Fanny and Freddy. They tried to get President Trump to 0:04:43.040 --> 0:04:45.800 sell the companies, for the two companies together for one 0:04:45.839 --> 0:04:48.560 hundred billion dollars. I think the valuation of the companies 0:04:48.560 --> 0:04:51.760 is anywhere between five hundred billion and some say up 0:04:51.800 --> 0:04:52.800 to a trillion dollars. 0:04:53.279 --> 0:04:54.719 A lot of people are hoping that there is some 0:04:54.760 --> 0:04:57.520 sort of initial public offering O those companies are you 0:04:57.560 --> 0:04:59.840 preparing them for that at some point later this year 0:05:00.080 --> 0:05:00.520 next year. 0:05:01.320 --> 0:05:03.479 We are fully prepared to do whatever the President would 0:05:03.560 --> 0:05:04.640 like us to do on that matter. 0:05:05.200 --> 0:05:06.520 We have been getting prepared. 0:05:06.600 --> 0:05:09.279 We are prepared, just like we are with the institutional 0:05:09.320 --> 0:05:12.120 home buying ban, just like we are with home builders. 0:05:12.320 --> 0:05:14.560 We have a full set of things to do, and 0:05:14.640 --> 0:05:16.799 once the President decides what to do, we go about 0:05:16.839 --> 0:05:17.560 executing them. 0:05:17.680 --> 0:05:19.680 Director Pulty, A lot of people on Wall Street were 0:05:19.680 --> 0:05:23.000 pretty excited actually about your purchases of mbs of mortgage 0:05:23.000 --> 0:05:25.240 backed securities and saying that this should like it should 0:05:25.279 --> 0:05:28.360 be something that would bring down spreads. They were less 0:05:28.360 --> 0:05:30.880 excited about the idea of preventing institutions from buying single 0:05:30.880 --> 0:05:34.839 family homes, saying that it really do wasn't based in economics, 0:05:34.880 --> 0:05:38.279 considering that in certain regions in the country there's actually 0:05:38.279 --> 0:05:41.080 a glut of houses that this is not because of 0:05:41.200 --> 0:05:45.160 institutions that account for a relatively small portion of overall buyers. 0:05:45.560 --> 0:05:47.320 What do you say back about. 0:05:47.040 --> 0:05:50.280 The economic fundamentals behind this type of proposal and why 0:05:50.320 --> 0:05:53.720 it would bring down fordability and an increase the supply 0:05:53.800 --> 0:05:55.640 of houses, which is the ultimate issue that a lot 0:05:55.680 --> 0:05:56.280 of people. 0:05:56.040 --> 0:05:58.280 Say, Well, it just makes economic sense. 0:05:58.279 --> 0:05:59.920 You talk about supply, I mean, you kind of gave 0:06:00.240 --> 0:06:02.120 narrative there, but if you look at the economic supply 0:06:02.200 --> 0:06:04.520 of things, the fact is you have you know, big 0:06:04.560 --> 0:06:08.359 corporations buying using long term paper, using their balance sheets 0:06:08.600 --> 0:06:11.400 to scoop up homes in a supply shortage as we 0:06:11.480 --> 0:06:14.080 call it, and they're in some cases buying these homes 0:06:14.080 --> 0:06:18.280 for twenty thirty forty percent less than Americans are doing it. 0:06:18.400 --> 0:06:20.880 You know, President Trump was elected with a very very 0:06:20.920 --> 0:06:23.640 popular mandate. You know, sometimes people don't remember because it 0:06:23.640 --> 0:06:25.640 was a year ago, but it was a landslide victory, 0:06:25.880 --> 0:06:28.159 and he was given a mandate to reverse these last 0:06:28.160 --> 0:06:31.440 four years of crazy inflation that happened under Joe Biden. 0:06:31.760 --> 0:06:33.120 And so I think it's very. 0:06:33.040 --> 0:06:35.360 Appropriate that we're doing everything that we can to reduce 0:06:35.400 --> 0:06:37.560 housing costs, and we're going to keep doing it, whether 0:06:37.600 --> 0:06:40.880 it's the institutional ban on buying, looking at all of 0:06:40.920 --> 0:06:43.080 the things that go into a home and owning a home. 0:06:43.320 --> 0:06:46.000 Americans need to own homes in this country, and we're 0:06:46.000 --> 0:06:47.080 committed to restoring that. 0:06:47.400 --> 0:06:49.599 Director Bulty, did you study this in terms of this 0:06:49.640 --> 0:06:53.320 apply demand dynamic and whether it actually would reduce the 0:06:53.800 --> 0:06:57.200 cost of houses for individuals. Should there be a ban 0:06:57.440 --> 0:07:01.400 on single family housing, on instation's buying single family homeless 0:07:01.400 --> 0:07:03.400 because a lot of people in the markets who have 0:07:03.480 --> 0:07:06.560 supported President Trump's policies and thinking of Neildunna in particular, 0:07:06.600 --> 0:07:08.839 came out and said, this is faulty economics. 0:07:09.680 --> 0:07:11.520 Well, of course, I've studied it. I've studied it my 0:07:11.560 --> 0:07:13.600 whole life. I mean, I grew up in the housing business. 0:07:13.880 --> 0:07:15.360 I grew up in the building business. I was on 0:07:15.400 --> 0:07:17.800 the board of Pulti Homes for four years. I understand 0:07:17.840 --> 0:07:20.920 what institutional buying does. It's very powerful. I understand why 0:07:20.920 --> 0:07:23.040 Wall Street might not like it, but we serve the 0:07:23.040 --> 0:07:23.679 American people. 0:07:23.720 --> 0:07:24.720 We don't serve Wall Street. 0:07:24.880 --> 0:07:27.160 And President Trump is laser focused on doing the right 0:07:27.200 --> 0:07:30.360 thing no matter who it affects in terms of their pocketbooks. 0:07:30.520 --> 0:07:32.880 At the Wall Street level, he has focused, laser focused 0:07:33.200 --> 0:07:36.400 on action, not talk like so many of these Democrats, 0:07:36.440 --> 0:07:38.560 like Elizabeth Warren. You know, for years she would talk 0:07:38.560 --> 0:07:41.440 about all institutional buying. She didn't do anything. Joe Biden 0:07:41.480 --> 0:07:44.080 didn't do anything about it. President Trump is doing something 0:07:44.120 --> 0:07:44.520 about it. 0:07:44.880 --> 0:07:48.160 Elizabeth Warren wanted to see an effort like this. Do 0:07:48.200 --> 0:07:50.440 you think the president is taking cues from some of 0:07:50.480 --> 0:07:54.480 the more populist wings of the Democratic Party. 0:07:55.280 --> 0:07:57.040 No, I think Elizabeth Warren's going to have to take 0:07:57.080 --> 0:07:59.280 cues from us or she's going to continue to look 0:07:59.360 --> 0:08:01.480 like a fraud because she says all these things and 0:08:01.520 --> 0:08:03.720 then she does nothing about it. You know, President Trump, 0:08:03.880 --> 0:08:06.040 he gets things done. He said, look, we're going to 0:08:06.040 --> 0:08:08.960 ban institutional buying, and then we're going about both on 0:08:09.040 --> 0:08:12.200 an executive action front as well as codifying and a legislation. 0:08:12.440 --> 0:08:14.200 I mean, the amount of momentum that we've had at 0:08:14.240 --> 0:08:17.440 the legislative level from you know, different Congress people. I 0:08:17.520 --> 0:08:20.240 was at the Financial Services Committee the other night. People 0:08:20.320 --> 0:08:23.720 were ecstatic about this. I also talked with multiple US Senators, 0:08:24.000 --> 0:08:27.760 many who are vying to sponsor the legislation. So this 0:08:27.800 --> 0:08:29.840 is a very big deal, and I think it's going 0:08:29.880 --> 0:08:30.360 to happen. 0:08:30.640 --> 0:08:33.240 Is the President going to declare a housing emergency in 0:08:33.240 --> 0:08:34.120 the United States? 0:08:34.960 --> 0:08:37.320 That's entirely up to the president. I can tell you this. 0:08:37.400 --> 0:08:40.000 He is treating it with great urgency. He understands real 0:08:40.080 --> 0:08:42.800 estate very well. He understands the importance of keeping home 0:08:42.840 --> 0:08:45.600 prices up. He understands this issue very well. And we're 0:08:45.600 --> 0:08:49.600 working very well together, Secretary Turner, Secretary Best and Secretary Lutnik, 0:08:49.840 --> 0:08:53.240 the Vice President Susie Wiles. This is an all hands effort, 0:08:53.440 --> 0:08:55.040 James Blair in the White House. I mean, this is 0:08:55.080 --> 0:08:57.959 an all hands effort to reduce the cost of home 0:08:58.000 --> 0:09:01.840 ownership and get people, not corporations, back in homes. 0:09:02.240 --> 0:09:05.760 Stay with US, mul Bloomberg surveillance coming up after this, 0:09:15.120 --> 0:09:17.560 let's tent and at least a running officials saying they've 0:09:17.559 --> 0:09:20.679 secured full control over the country after mass protests lane 0:09:20.720 --> 0:09:23.600 to two weeks of upheoval and one hundreds reported killed. 0:09:23.760 --> 0:09:26.280 President Trump set for a key briefing on potential US 0:09:26.320 --> 0:09:29.240 involvement as soon as tomorrow. Joining us now is former 0:09:29.280 --> 0:09:32.320 City of US Intelligence official Nomen Rule. Now, I'm welcome 0:09:32.360 --> 0:09:35.040 to the program, sir. We've seen this in this country 0:09:35.320 --> 0:09:38.440 many times over the last ten years. This felt different 0:09:38.720 --> 0:09:41.720 over the last week. How different is it? 0:09:41.720 --> 0:09:43.839 It's quite different, and good morning. 0:09:43.880 --> 0:09:47.280 The current nationwide protest in Ron continue to have reached 0:09:47.320 --> 0:09:50.959 a scaleon intensity that is unprecedented in the history of 0:09:50.960 --> 0:09:54.760 the Islamic Republic. Virtually every major city in town is 0:09:54.800 --> 0:09:58.840 experiencing some form of political protests against the government calling 0:09:58.920 --> 0:10:03.640 for regime change, not just complaints against the specific economic policy. 0:10:03.960 --> 0:10:07.960 And what you have is the tactical government efforts to 0:10:08.000 --> 0:10:11.880 contain these protests through promises of economic reform have not 0:10:12.000 --> 0:10:17.079 satisfied the protesters, and increasingly coercive and violent responses by 0:10:17.080 --> 0:10:21.320 the government have not ended the protests thus far. And 0:10:21.480 --> 0:10:24.720 the result is that we've seen deaths. We've seen hundreds 0:10:24.760 --> 0:10:27.520 of protest or deaths. We've seen as many as forty 0:10:27.520 --> 0:10:31.240 to fifty to one hundred security force personnel be killed, 0:10:31.440 --> 0:10:34.720 and we've seen thousands of arrests. So we're watching a 0:10:34.840 --> 0:10:39.320 very intensive, turbulent situation in Iran. 0:10:40.040 --> 0:10:43.720 Nor absolutely horrific these images coming out of Iran. What 0:10:43.840 --> 0:10:47.800 makes this protest though, different than prior protests we saw. 0:10:48.920 --> 0:10:52.800 We're watching basically a very compressed situation. So in the 0:10:53.559 --> 0:10:57.080 twenty twenty two to twenty twenty three situation, for example, 0:10:57.480 --> 0:11:01.400 the number of the tragic number of deaths, for example, 0:11:01.480 --> 0:11:03.520 that took place where it took place over a much 0:11:03.559 --> 0:11:06.000 longer period of time. The number of arrests took place 0:11:06.040 --> 0:11:07.480 over a much longer period of time. 0:11:07.520 --> 0:11:09.520 So we're watching a compression of this. 0:11:09.600 --> 0:11:12.520 And this is happening because the inflation, the collapse of 0:11:12.559 --> 0:11:15.960 the currency, the dissolution with the government, the failed policy, 0:11:16.000 --> 0:11:19.840 the impression it's built upon itself since twenty seventeen. So 0:11:19.880 --> 0:11:24.000 you've got an extraordinarily unhappy population that fills the government 0:11:24.240 --> 0:11:28.720 correctly so, feeling that the government is just unable to deliver. 0:11:28.880 --> 0:11:30.640 And at the same time you have a government that 0:11:30.760 --> 0:11:34.480 is broken, it's trying to it's trying to satisfy a 0:11:34.520 --> 0:11:37.640 military that's taking a large portion of the budget, missiles, 0:11:38.160 --> 0:11:42.640 regional militias, a nuclear program that's brought it sanctions upon 0:11:42.640 --> 0:11:46.120 the government well at the same time trying to promise 0:11:46.880 --> 0:11:51.200 economic relief to a population and in the end it 0:11:51.280 --> 0:11:51.920 can't deliver. 0:11:52.280 --> 0:11:56.160 And just the currency problem alone is extraordinary. 0:11:56.240 --> 0:11:58.000 So when the time of the nuclear deal of the 0:11:58.000 --> 0:12:01.600 Iranian rio was twenty nine thousand, five hundred to the dollar. 0:12:02.280 --> 0:12:05.559 When the recently fired central Bank. 0:12:05.400 --> 0:12:09.200 Governor took office, it was about nine hundred and twenty thousand. 0:12:09.000 --> 0:12:09.640 To the dollar. 0:12:10.040 --> 0:12:13.000 In December, when the protests began, it was one point 0:12:13.120 --> 0:12:13.840 four to two. 0:12:13.760 --> 0:12:14.800 Million to the dollar. 0:12:15.080 --> 0:12:17.440 There's no reason to believe that this collapse will not 0:12:17.760 --> 0:12:20.920 continue further because the government is broken. 0:12:21.480 --> 0:12:25.800 Norman Overnight, the Ron's foreign Ministry said that there is 0:12:25.840 --> 0:12:29.200 a communication channel between their foreign minister and mister Wickoff 0:12:29.280 --> 0:12:32.839 now open. The President told reporters that the Iranian leaders 0:12:32.880 --> 0:12:35.920 have reached out. He also went on to say a 0:12:36.000 --> 0:12:38.720 meeting is being set up, but we may have to 0:12:38.800 --> 0:12:42.000 act because of what's happening before the meeting. How should 0:12:42.000 --> 0:12:45.000 we read the president's comments seriously? 0:12:45.480 --> 0:12:47.360 So let's take a look first of what is the 0:12:47.480 --> 0:12:50.800 likelihood that the president will conduct a military strike. If 0:12:50.840 --> 0:12:55.680 you look at us behavior and the President's actions, there 0:12:55.760 --> 0:12:58.560 is a high likelihood of a military strike. The President 0:12:58.559 --> 0:13:03.280 has conducted surge limited military action following a series of 0:13:03.800 --> 0:13:07.920 social media statements, a series of promises of action if 0:13:07.960 --> 0:13:12.920 specific behavior is not undertaken, diplomatic outreach, and military moves. 0:13:13.200 --> 0:13:15.880 A lot of this has happened thus far, and the 0:13:15.960 --> 0:13:19.079 social media and the intensity that President's social media statements 0:13:19.120 --> 0:13:22.079 have increased. We've seen a visit of the Omani foreign 0:13:22.160 --> 0:13:25.120 minister to Iran which looked like a message one way 0:13:25.200 --> 0:13:27.960 or the other. Now we have the Iranian outreach, so 0:13:28.080 --> 0:13:32.439 why is that happening? Well, that offers the Iranian several advantages. First, 0:13:32.520 --> 0:13:35.079 gives them a chance to tell their own population. Maybe 0:13:35.120 --> 0:13:40.079 sanctions are being lifted, so that might break the unrest unlikely, 0:13:40.320 --> 0:13:43.240 but it also might allow the United Tests, the United 0:13:43.280 --> 0:13:48.040 States of delay the United States attack. I don't think 0:13:48.080 --> 0:13:51.040 that's going to buy the much patience with the President 0:13:51.440 --> 0:13:51.959 normal What. 0:13:51.920 --> 0:13:54.439 Could the US do with respect to military strikes that 0:13:54.440 --> 0:13:56.840 would be effective? I mean, how risky is this at 0:13:56.840 --> 0:14:00.840 a time we're already there as an incredibly explosive feeling 0:14:01.000 --> 0:14:04.600 in the region, and previous incursions have led to mixed results. 0:14:06.920 --> 0:14:08.400 Frankly, I think it'd be unwise. 0:14:08.480 --> 0:14:11.160 Do you give a lot of detail because the Iranians 0:14:11.160 --> 0:14:13.440 are going to be interested in that question as well. 0:14:13.480 --> 0:14:17.520 But US military power is vast. The Iranians have no 0:14:17.679 --> 0:14:20.680 capability to really defend against it, as we've seen in June. 0:14:21.520 --> 0:14:25.760 The press reports have talked about aerial attacks, other tools 0:14:25.760 --> 0:14:29.040 are available, and the Iranians are very susceptible to this. 0:14:29.400 --> 0:14:34.160 The US has the means to deliver an extraordinary punishing 0:14:34.200 --> 0:14:37.880 blow against those units and personnel that would be involved 0:14:37.880 --> 0:14:40.560 in violence against protesters, and that's what the President has 0:14:40.600 --> 0:14:46.360 talked about, responding to those who have committed of violence 0:14:46.480 --> 0:14:51.880 and against peaceful protesters, deaths against peaceful protesters, and We've 0:14:51.920 --> 0:14:55.640 seen an extraordinary number of deaths in the last weekend. 0:14:55.880 --> 0:14:59.320 Norman, we already have Venezuela with questions around who's going 0:14:59.400 --> 0:15:01.320 to lead it if there is some sort of strike 0:15:01.400 --> 0:15:04.000 that does imperil the Iranian leadership, Do we have a 0:15:04.040 --> 0:15:05.720 sense of who is going to take over and how 0:15:05.760 --> 0:15:07.520 intimately involved the US will be with that. 0:15:08.920 --> 0:15:10.560 I've been working. 0:15:12.280 --> 0:15:15.840 The Middle East other issues too long to make predictions 0:15:15.880 --> 0:15:19.560 on who will lead governments in the future, predicting elections 0:15:19.600 --> 0:15:22.960 of the Iranian people will no doubt choose their own leadership. 0:15:23.080 --> 0:15:25.960 I would say that there is a deep. 0:15:28.000 --> 0:15:32.840 Revolutionary guard network within the country and corporations and all 0:15:32.880 --> 0:15:34.200 aspects of the leadership. 0:15:34.240 --> 0:15:35.680 If you were to draw upon the. 0:15:36.120 --> 0:15:41.040 Existing system of society of who might follow, if the 0:15:41.120 --> 0:15:44.320 existing system remains in place, it's probably going to be 0:15:44.400 --> 0:15:47.600 drawn from that DNA. And that's the sort of DNA 0:15:47.680 --> 0:15:51.680 that would likely be willing to engage with the West 0:15:51.760 --> 0:15:57.320 and with the region in a circuit manner protecting Iranian equities, 0:15:57.320 --> 0:16:00.560 but it would engage with the West with US. 0:16:00.720 --> 0:16:12.840 More Blindberg surveillance coming up after this. Towson Stock for 0:16:12.880 --> 0:16:15.440 Apollo writes the following the market reaction, this morning is 0:16:15.520 --> 0:16:18.000 very muted, which is talent investors that the key issue 0:16:18.080 --> 0:16:21.360 continues to be the incoming data. Tolson joins us now 0:16:21.440 --> 0:16:23.480 for more Torston, good morning, any nice tries is still 0:16:23.480 --> 0:16:25.560 going to ask you to have this tell me your 0:16:25.560 --> 0:16:28.000 thoughts this morning and your response response to what took 0:16:28.000 --> 0:16:28.800 place yesterday. 0:16:28.800 --> 0:16:31.600 Eve nick I do think the market reaction is absolutely critical, 0:16:31.720 --> 0:16:34.720 especially the market reaction in long rates, the dollar, and 0:16:34.800 --> 0:16:38.000 also inflation expectations, and on all three fronts we've had 0:16:38.000 --> 0:16:40.920 a relatively muted reaction. So one conclusion is that the 0:16:40.960 --> 0:16:43.560 market obviously is looking at this and the reaction has 0:16:43.600 --> 0:16:46.160 been as you would have expected. That rates up a bit, 0:16:46.200 --> 0:16:48.760 the dollar is down. We'll see inflation expectations if they 0:16:48.800 --> 0:16:50.800 go up a bit more throughout the day, but it's 0:16:50.800 --> 0:16:54.400 still relatively small compared to how much drama has been 0:16:54.440 --> 0:16:56.280 made of this over the last twenty four hours. 0:16:56.360 --> 0:16:58.600 Is that a huge by signal essentially that this is 0:16:58.640 --> 0:17:00.840 a market that really believes in the institution of the 0:17:00.840 --> 0:17:03.400 Federal Reserve in the United States checks and balances in 0:17:03.440 --> 0:17:06.680 a way that encourages you to invest in the United States. 0:17:06.920 --> 0:17:09.439 Because investors come to the US for two reasons. They 0:17:09.480 --> 0:17:12.080 come for AI, and they come for higher yield. And 0:17:12.119 --> 0:17:14.040 when they come for higher yield, of course it's because 0:17:14.080 --> 0:17:15.639 the rest of the world doesn't have great growth at 0:17:15.680 --> 0:17:17.680 the moment, and the level of uals for the FED 0:17:17.760 --> 0:17:19.240 is of course higher than what it is for the 0:17:19.240 --> 0:17:21.120 easy b and for a number of central banks around 0:17:21.160 --> 0:17:23.800 the world. So for that reason, foreigners come to clip 0:17:23.800 --> 0:17:26.520 a higher coupoon in bonds, and foreigners also come to 0:17:26.600 --> 0:17:29.919 get AI exposure. So for that reason, this is not 0:17:30.119 --> 0:17:32.480 directly linked as such to the AI story, But what 0:17:32.560 --> 0:17:34.919 this could be linked to is of course the yield story. 0:17:34.960 --> 0:17:37.320 If you begin to see the FED lower interest rates 0:17:37.359 --> 0:17:39.919 not for economic reasons, then the big question becomes with 0:17:39.960 --> 0:17:41.640 what would that mean for the steepness of yeal curve 0:17:41.920 --> 0:17:43.960 where is it foreign investors are investing, And if foreign 0:17:43.960 --> 0:17:46.280 investors are further out, then the risk is of course 0:17:46.320 --> 0:17:48.439 that the yeald curve preb be even steeper, and therefore 0:17:48.480 --> 0:17:50.920 foreigners would be getting an even higher level of yield 0:17:51.080 --> 0:17:52.960 further out the curve. So there's a lot of issues 0:17:53.000 --> 0:17:55.560 around this question of why is it allar not weaker, 0:17:55.920 --> 0:17:58.800 namely because foreigners actually still like the AI story and 0:17:58.840 --> 0:18:00.480 they still like the higher coupong that they get in 0:18:00.480 --> 0:18:00.879 the US. 0:18:00.920 --> 0:18:03.159 What would you have to see to suggest that the 0:18:03.200 --> 0:18:06.119 Cell America trade truly is starting to take off. The 0:18:06.160 --> 0:18:07.880 people are starting to take this seriously. 0:18:08.720 --> 0:18:11.920 The dollar going down, because that, of course is ultimately 0:18:11.960 --> 0:18:14.080 the risk that foreigners will begin to say, well, we 0:18:14.119 --> 0:18:16.679 have less appetite for buying US assets. But the key 0:18:16.760 --> 0:18:19.199 issue continues to be that the US growth outlook continues 0:18:19.240 --> 0:18:21.320 to be much better than the growth outlook in Europe, 0:18:21.440 --> 0:18:23.919 much better than the growth outlook in Canada, Australia, Japan, 0:18:24.240 --> 0:18:26.680 because we have the AI Data center boom and energy 0:18:26.720 --> 0:18:29.639 boom of course expanding everything over the next level quarters. 0:18:29.680 --> 0:18:31.280 We have the one big boot of a bill. We 0:18:31.320 --> 0:18:33.480 also have all prices lower. We also have the dollar 0:18:33.520 --> 0:18:37.119 now marginally lower. All those tailwinds continue to support GDP 0:18:37.200 --> 0:18:38.919 growth throughout this year. Let's not forget that the one 0:18:38.920 --> 0:18:40.960 big bit of a bill is going to add zero 0:18:41.000 --> 0:18:43.720 point nine percent to GDP growth according to the Congressional 0:18:43.720 --> 0:18:46.399 Budget Office in twenty twenty six. That's a very meaningful 0:18:46.480 --> 0:18:48.720 boost to GDP over the coming quarter. So that's why 0:18:48.760 --> 0:18:51.200 the CONTENTUS expects. If I look at ECF, you go 0:18:51.280 --> 0:18:53.840 on my Bloomberg that the unemployment rate will peak just 0:18:53.880 --> 0:18:56.080 about now, and the tourment rate is about to go 0:18:56.160 --> 0:18:58.760 down over the coming quarters. That's a very important point 0:18:58.880 --> 0:19:00.960 when you think about the background for this story about 0:19:01.080 --> 0:19:03.200 what's going on with the Federal Reserve mose days. 0:19:03.240 --> 0:19:05.720 When it comes to sell America, what about instead of 0:19:05.760 --> 0:19:08.760 the dollar depreciating, what about the fact that gold continues 0:19:08.800 --> 0:19:11.080 to hit a new record highs almost on a daily basis. 0:19:11.280 --> 0:19:13.280 I do think that this is also a reflection of 0:19:13.359 --> 0:19:15.720 a broader thing, namely that there's also the issue, of 0:19:15.760 --> 0:19:18.800 course that central banks that are imposed with sanctions are 0:19:18.840 --> 0:19:21.480 now shifting away from dollars towards gold. You also have 0:19:21.640 --> 0:19:24.359 that many Chinese investors have been buying gold. They've been 0:19:24.359 --> 0:19:27.040 buying ETFs in China in a very significant way over 0:19:27.040 --> 0:19:29.040 the last several quarters that we haven't seen before. So 0:19:29.160 --> 0:19:31.720 retail demand is very strong, and you also have because 0:19:31.720 --> 0:19:33.879