WEBVTT - Bloomberg Surveillance TV: June 22nd, 2026 0:00:00.040 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordert. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:36.879 Terminal and the Bloomberg Business app. We begin this out 0:00:36.880 --> 0:00:38.960 with stocks a little change following two weeks of games, 0:00:38.960 --> 0:00:42.000 heading into this week's inflation data. Lori Cavasina of RBC 0:00:42.120 --> 0:00:45.120 writing the sentiment story has been one of mixed emotions, 0:00:45.120 --> 0:00:48.080 with takeaways varying depending on which data set one is 0:00:48.120 --> 0:00:50.480 looking at. Lori joins us now for more. Louri, good morning, 0:00:50.640 --> 0:00:53.120 to see you, Good morning. Does the bullcase stand up 0:00:53.200 --> 0:00:54.520 to the rate high debate at the moment? 0:00:55.120 --> 0:00:57.600 I think so, as long as you have a moderate 0:00:57.640 --> 0:00:59.680 amount of rate hikes. We talked about this in our 0:00:59.680 --> 0:01:01.680 Weekly few weeks ago, that whether you're looking at it 0:01:01.760 --> 0:01:05.039 from the perspective of the FED taking rate, taking their 0:01:05.040 --> 0:01:07.640 interest right up, or ten year bond yields moving up. 0:01:07.880 --> 0:01:09.200 That when we go back and we look at the 0:01:09.280 --> 0:01:12.040 history both since twenty twenty two on the bond yield side, 0:01:12.160 --> 0:01:14.000 or if we look back to nineteen ninety and look 0:01:14.000 --> 0:01:16.080 at sort of FED moves over the context of twelve 0:01:16.120 --> 0:01:19.520 month moves in the market, everything in moderation seems like 0:01:19.640 --> 0:01:22.200 something the equity market can handle. If you go back 0:01:22.240 --> 0:01:24.600 to twenty twenty one, twenty twenty two, we priced an 0:01:24.760 --> 0:01:26.880 enormous amount of hikes, we had a massive move up 0:01:26.880 --> 0:01:27.920 in ten year bond yields. 0:01:28.000 --> 0:01:29.240 It was a real regime change. 0:01:29.240 --> 0:01:32.319 We've been sort of stuck in this bond yield environment 0:01:32.319 --> 0:01:34.200 on the ten year yield side between sort of three 0:01:34.240 --> 0:01:36.480 point three to five percent. If we stay contained in 0:01:36.560 --> 0:01:38.280 that range, I think that we could have some short 0:01:38.360 --> 0:01:41.679 term indigestion in markets, but still have a fairly good 0:01:41.720 --> 0:01:44.399 outlook over the next twelve months. Similarly, if you go 0:01:44.480 --> 0:01:47.199 back and you look at how stocks perform in different 0:01:47.280 --> 0:01:50.040 hiking and cutting cycles, your best environment is when the 0:01:50.040 --> 0:01:52.320 FED does absolutely nothing. So we can keep our fingers 0:01:52.360 --> 0:01:54.360 crossed for that scenario. But you tend to get like 0:01:54.400 --> 0:01:57.440 thirteen to fourteen percent returns on both the hiking side 0:01:57.480 --> 0:02:00.160 and the cutting side when you're seeing moves and the 0:02:00.240 --> 0:02:02.160 zero to one hundred basis point range. As long as 0:02:02.160 --> 0:02:05.760 we stay within say two ish hikes over the next 0:02:05.760 --> 0:02:08.000 twelve months of twenty five basis points, I think stocks 0:02:08.040 --> 0:02:09.079 will ultimately be okay. 0:02:09.360 --> 0:02:10.760 They may not like it in the short term. 0:02:10.800 --> 0:02:13.480 Lisa mentioned Deutsche Bank looking for a call right hikes 0:02:13.520 --> 0:02:15.480 lantor this year Bank of America doing the same. That 0:02:15.560 --> 0:02:18.440 note just drop earlier on this morning, this call, this 0:02:18.480 --> 0:02:21.640 conversation accelerated by this move and energy, but energy drop 0:02:21.680 --> 0:02:23.760 back to the seventies. When you speak to the team 0:02:23.880 --> 0:02:26.919 at RBC, how dependent is the outlook for interest rates 0:02:27.080 --> 0:02:28.600 on what's happening in the commodity mail kit? 0:02:28.680 --> 0:02:31.480 So Blake went on our US rates strategy team handles 0:02:31.520 --> 0:02:33.520 the FED call for us. He's not currently looking for 0:02:33.560 --> 0:02:35.680 any FED moves, though he has also written that his 0:02:35.760 --> 0:02:38.480 conviction and that has come down, and our econ team 0:02:38.480 --> 0:02:40.200 has talked about how the next move may be a 0:02:40.280 --> 0:02:42.000 hike rather than a cut. I think there's a lot 0:02:42.040 --> 0:02:44.640 of fluidity in the situation right now. One of the 0:02:44.639 --> 0:02:47.320 things that came out in my meetings with investors last week. 0:02:47.480 --> 0:02:49.919 Is just a lot of uncertainty is in the air, 0:02:49.960 --> 0:02:52.280 whether you're looking at the path of the FED going forward, 0:02:52.360 --> 0:02:55.080 how the FED is going to operate going forward, and frankly, 0:02:55.120 --> 0:02:57.040 also this situation in the Middle East in terms of 0:02:57.040 --> 0:02:59.520 what that means for oil prices, what should your assumption 0:02:59.680 --> 0:03:01.800 be over the next twelve months. I don't think a 0:03:01.800 --> 0:03:04.239 lot of people know that, but that does have reverberations 0:03:04.240 --> 0:03:07.480 and headline inflation. One thing that Blake has really emphasized 0:03:07.480 --> 0:03:10.360 to us internally is that he hasn't really viewed the 0:03:10.400 --> 0:03:13.640 FED policy rate as the appropriate path or the appropriate 0:03:13.680 --> 0:03:17.320 tool really to combat any get inflation emanating from oil prices. 0:03:17.360 --> 0:03:19.040 But we do know, of course that we have inflation 0:03:19.160 --> 0:03:20.960 emanating from other sources as well. 0:03:21.160 --> 0:03:24.160 What's more important for the equity market Core PCE coming 0:03:24.160 --> 0:03:25.760 out on Thursday, or Micron. 0:03:25.440 --> 0:03:26.760 Earning is coming out on Wednesday. 0:03:26.880 --> 0:03:29.200 I think that this is a situation in the equity 0:03:29.240 --> 0:03:32.760 market where we have very very strong earnings tailwinds that 0:03:32.800 --> 0:03:35.880 are running up against very stiff headwinds on the PE side, 0:03:36.040 --> 0:03:38.120 and you tend to get compression in the PE right 0:03:38.160 --> 0:03:40.960 when you have higher inflation, higher interest rates but so 0:03:41.080 --> 0:03:43.560 far in our modeling, it looks like the earning story 0:03:43.640 --> 0:03:47.000 is strong enough to offset those headwinds from compression. So 0:03:47.080 --> 0:03:50.000 I would say, right now, earnings matter more at this point. 0:03:50.040 --> 0:03:52.520 A lot of people keep talking about that, and yet 0:03:52.760 --> 0:03:54.240 you take a look at some of the earnings, they've 0:03:54.240 --> 0:03:56.760 been driven by names that have pricing power. 0:03:57.280 --> 0:03:59.000 There is a bit of pushback on. 0:03:58.960 --> 0:04:02.160 The pricing side in a significant way, from hyperscalers and 0:04:02.200 --> 0:04:05.040 from other companies that are realizing that there are some 0:04:05.200 --> 0:04:08.120 limits we might be bumping up against. At what point 0:04:08.240 --> 0:04:09.920 is that a tension that needs to get resolved that 0:04:09.960 --> 0:04:11.560 could potentially be a risk factor. 0:04:11.840 --> 0:04:13.880 So look, I think it is something that investors are 0:04:13.880 --> 0:04:16.479 already thinking about and digesting, which takes some of the 0:04:16.640 --> 0:04:19.040 edge off. Frankly, I think we just have to go 0:04:19.120 --> 0:04:22.120 through reporting season right and hear what the latest commentary 0:04:22.240 --> 0:04:23.080 is from companies. 0:04:23.720 --> 0:04:25.120 One of the things we've talked. 0:04:24.880 --> 0:04:27.360 About is the capex cycle, and we're doing a lot 0:04:27.400 --> 0:04:28.640 of questions on this last week. 0:04:28.680 --> 0:04:31.040 A lot of that is hyperscaler driven, is AI driven. 0:04:31.800 --> 0:04:34.080 If you look at rates of change on S and 0:04:34.120 --> 0:04:37.000 P five hundred capex, you're kind of hovering around peaklike 0:04:37.080 --> 0:04:39.360 type levels. But if you x out the top ten names, 0:04:39.400 --> 0:04:40.920 we're in the very early stages of. 0:04:40.839 --> 0:04:42.240 A capex recovery cycle. 0:04:42.560 --> 0:04:44.760 So can you elongate the cycle as you get more 0:04:44.800 --> 0:04:48.200 companies participating in the capex boom. That's something we have 0:04:48.240 --> 0:04:50.000 to think about given the tax bill that we saw 0:04:50.080 --> 0:04:52.279 last year, so we're still sorting through a lot of 0:04:52.279 --> 0:04:52.960 these issues. 0:04:53.080 --> 0:04:55.160 Our come more companies are going to be participating when 0:04:55.160 --> 0:04:57.640 it comes to doing better in the stock market, given 0:04:57.680 --> 0:05:01.039 they could put the Iron War behind them. Prices are 0:05:01.240 --> 0:05:02.200 moving much lower. 0:05:02.320 --> 0:05:04.360 So I'll tell you Marie, last week on the Business 0:05:04.440 --> 0:05:07.200 Roundtable put out the CEO confidence survey that they run, 0:05:07.240 --> 0:05:09.599 and we actually saw that tick up, and it was 0:05:09.640 --> 0:05:13.720 on the strength of capex expectations, sales expectations, hiring expectations 0:05:13.760 --> 0:05:15.960 were pretty neutral. But there's just really been a clear 0:05:16.080 --> 0:05:18.719 contrast between say, investor sentiment, which has been kind of 0:05:18.720 --> 0:05:21.560 weak or meh, it's gotten a little bit better recently, 0:05:21.640 --> 0:05:24.360 but hasn't been that fantastic. And then if you look 0:05:24.360 --> 0:05:26.640 at the corporate side, I wouldn't say they're off to 0:05:26.680 --> 0:05:29.120 the races, but are still generally optimistic. So I think 0:05:29.160 --> 0:05:31.200 we have to take some comfort from that, especially as 0:05:31.200 --> 0:05:32.719 we head into this next reporting season. 0:05:32.720 --> 0:05:35.680 Can I answer the question, Can I just say Micron? Yeah, right, Micron, 0:05:35.760 --> 0:05:38.839 probably because I think most economists understand where PCEA will 0:05:38.839 --> 0:05:42.200 probably come in after seeing CPI and PPM the last week. 0:05:42.279 --> 0:05:44.480 Yeah, and how high expectations are from Micron given the 0:05:44.520 --> 0:05:46.640 fact that it's rallied like some eight hundred percent scot 0:05:46.720 --> 0:05:47.080 last year. 0:05:47.080 --> 0:05:47.839 I mean, it's insane. 0:05:47.920 --> 0:05:50.440 You started wondering can they keep having this transfer of 0:05:50.440 --> 0:05:52.920 wealth coming from hyperscalers to them. There was a chart 0:05:52.920 --> 0:05:55.719 showed the divergency performance between the hyperscalers and the. 0:05:55.800 --> 0:05:57.400 Chip makers, and it's bonkers. 0:05:57.400 --> 0:05:59.479 I mean, it just shows what's going on right now, 0:05:59.520 --> 0:06:00.400 and it. 0:06:00.040 --> 0:06:02.839 Feels like maybe not totally sustainable in perpetuity. 0:06:02.920 --> 0:06:05.640 Sometimes you just can't please some people and they'll say 0:06:05.680 --> 0:06:07.479 things like this is as good as it gets, even 0:06:07.800 --> 0:06:10.039 it is so good, have we seen peak? 0:06:10.200 --> 0:06:11.119 As good as it gets? 0:06:11.240 --> 0:06:13.120 So if you look at the rate of upward revisions 0:06:13.120 --> 0:06:15.280 for either the semiconductor companies or the S and P 0:06:15.400 --> 0:06:17.800 five hundred in general, it does look like we've sort 0:06:17.800 --> 0:06:21.320 of hit those peak levels of earnings enthusiasm. If we 0:06:21.400 --> 0:06:23.640 looked at the SMP five hundred, the rate of upward revisions. 0:06:23.680 --> 0:06:25.719 I think it got to around eighty nine ninety percent 0:06:25.839 --> 0:06:28.120 recently at the high. The high tends to be kind 0:06:28.120 --> 0:06:29.960 of in that ninety to ninety four percent range, and 0:06:29.960 --> 0:06:32.360 in our latest update at tick down to eighty six percent. 0:06:32.400 --> 0:06:33.839 So these are all very good numbers. 0:06:33.920 --> 0:06:38.479 Right. You're still generally seeing upgrades, just slightly slightly slower pace. 0:06:38.800 --> 0:06:41.080 If you look at the semiconductors, we're still sort of 0:06:41.120 --> 0:06:44.040 sitting at peak levels of upward revisions. And so we've 0:06:44.040 --> 0:06:45.720 been talking a lot to clients about this because I've 0:06:45.720 --> 0:06:46.960 talked to a lot of people who have been in 0:06:46.960 --> 0:06:48.800 the semi's names, who have been in the AI theme. 0:06:49.560 --> 0:06:51.560 You know, a fair number of people doing well with that, 0:06:51.600 --> 0:06:53.440 but they're saying, maybe I should be looking around at 0:06:53.440 --> 0:06:56.280 other opportunities. So we look at that chart and I say, 0:06:56.320 --> 0:06:59.360 you know, this is a risk factor, but I can't 0:06:59.400 --> 0:07:01.280 just tell you to sit here and hold your nose 0:07:01.320 --> 0:07:03.400 and sell because if you go back and look in 0:07:03.440 --> 0:07:05.560 the past, sometimes you sit at these peak levels of 0:07:05.640 --> 0:07:07.480 upward revision for multiple years. 0:07:07.800 --> 0:07:09.200 So we have to watch how. 0:07:09.080 --> 0:07:10.480 They move in time. And I know that's not a 0:07:10.520 --> 0:07:12.960 satisfactory answer. We're all supposed to have crystal balls in 0:07:13.000 --> 0:07:14.920 this business and predict what's going to happen six months 0:07:14.960 --> 0:07:15.679 down the road. 0:07:15.600 --> 0:07:17.960 With certainty and conviction, righty, But I. 0:07:17.880 --> 0:07:20.040 Do think in this plus yeah, but I do think 0:07:20.080 --> 0:07:23.120 in this particular situation, we kind of have to take 0:07:23.120 --> 0:07:23.800 it day by day. 0:07:24.200 --> 0:07:24.840 Stay with us. 0:07:25.160 --> 0:07:37.640 More Bloomberg surveillance coming up after this. The UK Prime 0:07:37.640 --> 0:07:41.240 Minister Kase Tharmas stepping down after two years in the role. 0:07:41.520 --> 0:07:45.960 The question my party is asking now is whether I 0:07:46.000 --> 0:07:50.840 am best placed to lead us into the next general election. 0:07:51.120 --> 0:07:54.400 That is why I will resign as leader of the 0:07:54.480 --> 0:07:55.240 Labor Party. 0:07:55.520 --> 0:07:58.520 Sama's exit opening the door for Britain's fifth prime minister 0:07:58.640 --> 0:08:01.880 since twenty twenty two, the former Manchester mayor Andy Burnham, 0:08:01.920 --> 0:08:04.960 putting himself forward with a backing of former Health Secretary 0:08:05.080 --> 0:08:07.920 Where Streeting Jordan Rochester of MISSOUI right. In the following, 0:08:07.920 --> 0:08:11.120 Burnham wins either way according to polling. His policy positions 0:08:11.120 --> 0:08:13.440 are clearly to the left of Starmer, but lack detail 0:08:13.760 --> 0:08:16.480 on how they would be achieved. Jord and Rochester joined 0:08:16.560 --> 0:08:18.920 us now for more. Welcome to the program sir, As 0:08:18.960 --> 0:08:22.760 you know, the nervousness in UK markets was less about 0:08:22.880 --> 0:08:25.520 secure Starmer leaving. It was always about the worries about 0:08:25.520 --> 0:08:27.840 what would replace him, Jordan, what comes. 0:08:27.640 --> 0:08:30.880 Next well, as you said John earlier in your previous section, 0:08:31.000 --> 0:08:33.840 was about their chancellor choice too. I think Burnham's positions 0:08:33.920 --> 0:08:37.040 the market knows they're quite expensive, some of them, especially 0:08:37.080 --> 0:08:39.560 the full nationalization. But in terms of the next step, John, 0:08:39.960 --> 0:08:42.520 it's about how soon does this contest take place. We're 0:08:42.559 --> 0:08:44.120 kind of get in the details of that, and when 0:08:44.400 --> 0:08:46.480 will it finish, and how quickly could a new PM 0:08:46.520 --> 0:08:49.160 be in place, and if it is a coronation, essentially 0:08:49.200 --> 0:08:51.680 it's going to be around three to four weeks, similar 0:08:51.760 --> 0:08:55.400 timelines to when Theresa May took over from David Cameron. 0:08:55.679 --> 0:08:57.800 If there is a longer drawn out contest, then you're 0:08:57.840 --> 0:09:00.800 talking the sort of August period into September. And there's 0:09:00.800 --> 0:09:04.959 some commentary commentary this morning suggesting that Andy Burnham hasn't 0:09:05.000 --> 0:09:06.839 yet got all of his plans in place, so it 0:09:06.880 --> 0:09:09.839 doesn't really want to be a prime minister within three weeks. 0:09:09.840 --> 0:09:13.520 He'd rather be a little bit longer and perhaps even 0:09:13.720 --> 0:09:15.920 in fruit to September. So those are the timelines, but 0:09:16.000 --> 0:09:18.320 let's just imagine it's in three weeks. Then it's about 0:09:18.320 --> 0:09:20.840 who the cabinet choices are and we get that within 0:09:20.880 --> 0:09:23.760 a twenty four to forty our well wind of news 0:09:24.120 --> 0:09:27.840 And as add Marieves suggested earlier, if Streeting has put 0:09:27.880 --> 0:09:30.600 and he has he's put his name behind Andy Burnham, 0:09:30.880 --> 0:09:33.200 does that make him more Likelyp's chancellor. 0:09:33.240 --> 0:09:34.800 It could be a Vet Cooper as well. She about 0:09:34.920 --> 0:09:35.240 my mood. 0:09:35.240 --> 0:09:37.079 These are of the names that were being considered, as 0:09:37.080 --> 0:09:40.240 well as the sort of the dark horse, Ed Milliband, 0:09:40.280 --> 0:09:43.200 which is Edmndiband was once considered for prime minister. So 0:09:43.240 --> 0:09:45.840 he's not the end of the world for UK rates markets, 0:09:45.880 --> 0:09:48.320 but that's kind of how the commentary kind of frames it. 0:09:48.520 --> 0:09:50.040 But he is definitely to the left of most of 0:09:50.080 --> 0:09:51.880 those other candidates, so that is the one which leads 0:09:51.920 --> 0:09:54.640 to and that sort of outcome a guilt sell. 0:09:54.520 --> 0:09:55.920 Off Jordan, what's priced in? 0:09:56.000 --> 0:09:57.880 Because ultimately it seems like there's not a lot of 0:09:57.920 --> 0:10:01.199 action on the heels of some pretty signsificate headlines. 0:10:00.800 --> 0:10:04.480 This morning well indeed, so essentially the price action took 0:10:04.520 --> 0:10:07.080 place towards the end of last week. We had a 0:10:07.200 --> 0:10:09.439 UK rate started to sell off as it started to 0:10:09.480 --> 0:10:12.200 seem quite likely after the Make a Field result, which 0:10:12.240 --> 0:10:13.920 was a very strong result for Andy Burnham, it was 0:10:13.960 --> 0:10:16.800 supposed to be a tight contest between him and Reform 0:10:16.840 --> 0:10:19.680 and it was actually pretty gangbusters over twenty percent lead. 0:10:20.000 --> 0:10:22.640 That suggests that as a leader he could boost the 0:10:22.720 --> 0:10:25.120 Labor Party's fortunes, because that's what politics is all about, 0:10:25.120 --> 0:10:28.400 it about getting elected, and the party is going behind 0:10:28.400 --> 0:10:31.240 that sort of Burnham momentum that if you look back 0:10:31.320 --> 0:10:33.200 over the past few months, the writing has been on 0:10:33.240 --> 0:10:35.800 the wall for Keir Starmer. In the public opinion polls, 0:10:36.000 --> 0:10:38.559 he was deemed to be the most sort of unpopular 0:10:38.559 --> 0:10:41.920 prime minister in UK modern history. So the writing down 0:10:42.000 --> 0:10:43.920 the war should been a matter of time. And the 0:10:43.920 --> 0:10:46.040 main reason why Guilt's move last week was because of 0:10:46.080 --> 0:10:48.560 that lead that Andy Burnham had in the makefield. But 0:10:48.679 --> 0:10:52.040 apart from that, the bigger picture is Okay, that's the politics, 0:10:52.080 --> 0:10:53.000 but what about the data? 0:10:53.080 --> 0:10:54.040 What about the Bank of England? 0:10:54.080 --> 0:10:56.959 Where's oil price is going and helping rates a little bit? 0:10:57.000 --> 0:10:59.079 This morning? Is oil coming off the. 0:10:59.040 --> 0:11:02.160 Sort of recent level slightly thanks to progress being made 0:11:02.200 --> 0:11:03.160 in US around. 0:11:02.960 --> 0:11:05.480 Talks well Jordan To that point, how much is this 0:11:05.559 --> 0:11:09.880 story a very specific story for a political sort in 0:11:09.920 --> 0:11:14.360 the UK versus a broader macro story that suggests something 0:11:14.400 --> 0:11:16.679 bigger about bond and FX markets. 0:11:17.400 --> 0:11:20.120 Well, the specific part is for all these policy details 0:11:20.160 --> 0:11:22.800 and how much guilts can sell off versus treasuries versus buns. 0:11:22.800 --> 0:11:24.240 So I think going forward, if you want to take 0:11:24.240 --> 0:11:25.880 a burriage fee on the UK, you need to do 0:11:25.880 --> 0:11:27.920 it as a spread versus US or Europe, because the 0:11:27.960 --> 0:11:30.640 broader picture is that yields have come down thanks to 0:11:30.679 --> 0:11:32.040 the US around war ending. 0:11:32.360 --> 0:11:33.760 But the broader picture the. 0:11:33.800 --> 0:11:36.200 UK slots into actually something that's quite similar, which is 0:11:36.480 --> 0:11:39.559 fiscal spending is now potentially being entertained again. Even though 0:11:39.559 --> 0:11:41.840 the UK has been boxed in by these fiscal rules, 0:11:42.040 --> 0:11:44.920 could they be redefined And the policy agenda that Andy 0:11:44.920 --> 0:11:48.040 Burnham has probably needs the fiscal rules to be tweaked 0:11:48.080 --> 0:11:50.160 in a way, at least on capital expenditure. 0:11:50.360 --> 0:11:52.000 So that feeds in through to the bigger picture. 0:11:52.160 --> 0:11:54.560 US is spending on the one big beautiful bill, Japan's 0:11:54.559 --> 0:11:58.319 doing a consumption tax on food. Potentially you've got Germany's 0:11:58.320 --> 0:12:01.920 defense spending from just the pre this year, an infrastructure 0:12:02.120 --> 0:12:06.280 feeing through to the UK thinking about a public utility nationalization, 0:12:07.240 --> 0:12:11.120 better spending on NHS, healthcare, etc. So more physical spending. 0:12:11.440 --> 0:12:13.160 It definitely starts into a broader theme. 0:12:13.480 --> 0:12:15.719 The head of one of Britain's biggest trade unions had 0:12:15.760 --> 0:12:18.400 said that Ed Miliban would be a quote noose around 0:12:18.440 --> 0:12:21.600 the neck of job creation if he became the chancellor. 0:12:21.840 --> 0:12:23.559 Could we see some sort of market. 0:12:23.240 --> 0:12:26.079 Reaction to the downside in the United Kingdom if we 0:12:26.080 --> 0:12:28.280 were to see Miliban become chancellor. 0:12:29.240 --> 0:12:32.840 It's definitely the scenario that most analysts would say that 0:12:32.920 --> 0:12:34.840 leads to a guilt sell off, and it's because of 0:12:35.800 --> 0:12:39.600 a position on for more fiscal spending. But he has 0:12:39.640 --> 0:12:42.120 also outlined that he would respect the fiscal rules. So 0:12:42.160 --> 0:12:45.720 I think the sort of dramatic Liz Trust moves that 0:12:45.760 --> 0:12:47.760 you've got in twenty twenty two you're not really going 0:12:47.840 --> 0:12:50.400 to get as long as all the candidates on potential 0:12:50.760 --> 0:12:53.600 candidates for a chancellor say we'll respect the fiscal rules, 0:12:53.800 --> 0:12:56.320 so that kind of boxes them in. If they don't 0:12:56.440 --> 0:12:58.760 say that, then you do get the bigger moves. And 0:12:58.800 --> 0:13:01.720 I don't believe edmundband had so I think it's the 0:13:01.760 --> 0:13:04.920 scenarios leads to weaker performance of UK gilts. I'm not 0:13:04.960 --> 0:13:07.680 talking about twenty twenty two sell off, but the other 0:13:07.720 --> 0:13:09.679 points I'm guessing from the Union leader. 0:13:09.760 --> 0:13:11.280 I have to look at the quote exactly. 0:13:11.440 --> 0:13:13.800 It's because of the views of north sea drilling and 0:13:13.840 --> 0:13:15.240 this is why admit a band maybe is a little 0:13:15.240 --> 0:13:18.960 bit less likely because the reindustrialization plans that Andy Burnham 0:13:19.000 --> 0:13:20.920 has for the north of England kind of don't tie 0:13:20.920 --> 0:13:24.400 the net zero agenda, and of course the north sea drilling. 0:13:24.480 --> 0:13:25.160 Stay with us. 0:13:25.440 --> 0:13:38.160 More Bloomberg surveillance coming up after this. Negotiators for te 0:13:38.200 --> 0:13:41.160 Run and Washington continue building the roadmap for reaching a 0:13:41.200 --> 0:13:44.600 final deal. The president facing some pushback from his own party. 0:13:45.040 --> 0:13:49.640 History demonstrates that giving billions of dollars to theocratic lunatics 0:13:49.640 --> 0:13:52.520 who want to murder us is an exceptionally bad idea, 0:13:52.880 --> 0:13:57.560 and I think unfortunately the President is receiving some really 0:13:57.559 --> 0:13:58.680 bad advice on this deal. 0:13:58.800 --> 0:14:01.360 The Republican Senator Take comic joins us now for most 0:14:01.360 --> 0:14:02.719 and it's a good morning going to see us, say 0:14:03.200 --> 0:14:06.040 with sending the negoshiandam face. So it's difficult to judge 0:14:06.040 --> 0:14:08.520 a deal that we haven't gone yet. What are your thoughts, 0:14:08.559 --> 0:14:10.360 your assessment of the process and how does this coming 0:14:10.400 --> 0:14:11.360 Togainda Well, let. 0:14:11.240 --> 0:14:12.480 Me let me start by just a word on al 0:14:12.559 --> 0:14:15.319 Greenspan who I knew I know was wife Andrey Mitchell. 0:14:15.559 --> 0:14:18.480 So I really today we celebrate a great a great life. 0:14:18.679 --> 0:14:22.680 And I introduced Kevin Warsh at his hearing, and Kevin 0:14:22.720 --> 0:14:25.000 is a big admirer of Allen's as well, and he 0:14:25.080 --> 0:14:27.520 does it'll be a different challenge, but we have the 0:14:27.600 --> 0:14:30.400 right man for the job. He's he's he's going to 0:14:30.440 --> 0:14:32.120 help lead the FED. I think in a time of 0:14:32.520 --> 0:14:36.320 great change and uncertainty with regard to the release, I 0:14:36.360 --> 0:14:39.280 think you have to start with the beginning of this 0:14:39.440 --> 0:14:43.080 is that the President Trump took a series of actions 0:14:43.120 --> 0:14:45.520 which puts US in a position for a set of negotiations, 0:14:45.520 --> 0:14:50.800 so enormous progress, taking the nuclear program way back under, 0:14:51.520 --> 0:14:56.280 reducing their missile capability their launchers, so AARAN is in 0:14:56.440 --> 0:15:01.840 economic difficult straits and militarily has been and dramatically affected. 0:15:02.680 --> 0:15:06.560 Now as we think about this, MoU there's three things 0:15:06.600 --> 0:15:09.400 that have to be achieved through this sixty day negotiation, 0:15:10.280 --> 0:15:12.760 which I think a critical on the President has more 0:15:12.840 --> 0:15:14.280 or less said this. Number one, the strait has to 0:15:14.280 --> 0:15:17.600 be open with an unhindered by Iran, there can be 0:15:17.640 --> 0:15:20.720 no control. Second, they have to give up their enrich 0:15:20.800 --> 0:15:23.520 uranium and there has to be a path to no 0:15:23.640 --> 0:15:26.120 nuclear program. We may have a step forward on this 0:15:26.160 --> 0:15:28.040 with the new core inspectors. And the third thing is 0:15:28.080 --> 0:15:30.520 needs to be paid for performance. In other words, each 0:15:30.560 --> 0:15:33.240 step along the way in terms of sanctioned relief has 0:15:33.280 --> 0:15:37.200 to be only coming when there's actual movement on the 0:15:37.200 --> 0:15:39.040 part of the Iranians. I think it's too early to 0:15:39.080 --> 0:15:42.440 tell whether that's happening or not, and we'll see as 0:15:42.480 --> 0:15:45.320 these negotiations proceed. But the President's goals were clear from 0:15:45.320 --> 0:15:46.840 the beginning, and I think that's what we have to 0:15:46.840 --> 0:15:47.360 stay true to. 0:15:47.600 --> 0:15:49.880 But there are two of President's goals that are not 0:15:50.000 --> 0:15:53.040 being addressed in this MoU and as the blistic missile program, 0:15:53.120 --> 0:15:55.600 and that's the money to running proxies. Do you expect 0:15:55.600 --> 0:15:59.560 the president to somewhere address these red lines that he 0:15:59.640 --> 0:16:02.480 has had for years since going back to his first term. 0:16:02.760 --> 0:16:05.160 Well, the first one we've made a lot of progress on. 0:16:05.320 --> 0:16:09.520 So I mean the missile attacks that we've done on 0:16:09.680 --> 0:16:13.400 and the air attacks we've done on their missile program, 0:16:13.640 --> 0:16:16.680 on their drones, on their manufacturing capacity, on their launchers 0:16:16.920 --> 0:16:19.720 have been extraordinarily successful. So their capability is a fraction 0:16:19.760 --> 0:16:22.560 of what it was. How far along we are I 0:16:22.560 --> 0:16:26.080 think remains to be seen, but there's been big progress. 0:16:26.120 --> 0:16:33.280 This second issue is whether they're going to actually stop 0:16:33.320 --> 0:16:36.080 the funding for Hesbela and others. We've also made huge 0:16:36.120 --> 0:16:40.800 progress in taking down Hesbela and Hamas. If we move 0:16:40.840 --> 0:16:43.640 forward on this path, we'll see whether there can be 0:16:43.840 --> 0:16:47.800 a future commitment on financing of the terrorist groups. Right now, 0:16:47.840 --> 0:16:49.920 I think the focus on the nuclear program. 0:16:49.960 --> 0:16:50.680 What role do you. 0:16:50.600 --> 0:16:52.640 See Congress playing in all of this, especially when it 0:16:52.680 --> 0:16:55.840 comes to the sanctions relief that the MoU addresses for the. 0:16:55.800 --> 0:16:56.920 Regime, Well, it depends. 0:16:57.080 --> 0:16:59.520 It depends what the agreement turns out to be, but 0:16:59.720 --> 0:17:02.080 I expect Congress will have a role, and for this 0:17:02.160 --> 0:17:05.879 to be lasting and meaningful, Congresses need to be involved 0:17:06.080 --> 0:17:08.960 and hopefully have something that we can approve leading into 0:17:09.000 --> 0:17:10.920 the next administration. I think part of the reason the 0:17:11.119 --> 0:17:14.720 Obama deal was ineffectual was that it was never assigned 0:17:14.760 --> 0:17:16.800 deal and was never passed by Congress. 0:17:17.280 --> 0:17:19.320 I want to go back to Ellen Greenspan for a minute, 0:17:19.359 --> 0:17:21.560 because this is a really pivotal moment, given that we're 0:17:21.640 --> 0:17:23.960 ushering into Kevin Warsh era that potentially is going to 0:17:24.000 --> 0:17:27.240 be very different from what we've seen, Given where inflation 0:17:27.359 --> 0:17:30.000 is currently in Pennsylvania, given what you're seeing in markets, 0:17:30.320 --> 0:17:32.399 do you think it's appropriate to be hiking rates at 0:17:32.400 --> 0:17:34.240 this point? Do you think that this is something that 0:17:34.320 --> 0:17:35.560 even the president would welcome. 0:17:35.800 --> 0:17:38.479 Well, I think Kevin what was wise in the companies. 0:17:38.840 --> 0:17:42.480 You have two big forces coming out the economy at 0:17:42.480 --> 0:17:43.920 the same time. You have what's happening in Middle East. 0:17:44.000 --> 0:17:46.200 You have the oil shock and how that's affecting pricing, 0:17:46.520 --> 0:17:50.520 particularly in energy pricing, but it's affecting everything. We've seen 0:17:50.560 --> 0:17:52.240