WEBVTT - Trump Says Talks Are Iran’s ‘Last Chance’ After Threats 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:13.000 This is Bloomberg Business Week Daily reporting from the magazine 0:00:13.000 --> 0:00:17.599 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.640 --> 0:00:22.520 and trends shaping today's complex economy. Plus global business finance 0:00:22.560 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:25.960 --> 0:00:31.480 Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.280 --> 0:00:34.800 We have a great voice writ in studio with us 0:00:34.840 --> 0:00:38.000 to kind of get to all things the President and 0:00:38.120 --> 0:00:40.120 the White House with us is Bloomberg News White House 0:00:40.159 --> 0:00:43.040 and Washington correspondent Jeff Mason here in studio. In the meantime, 0:00:43.080 --> 0:00:46.360 we will monitor, of course, the President's comments and bring 0:00:46.360 --> 0:00:49.960 you anything of substance. Jeff, good to have you here 0:00:50.000 --> 0:00:52.519 with us. I do want to stay with you. I 0:00:52.520 --> 0:00:54.360 guess it's I think fair you've been listening to this 0:00:54.400 --> 0:00:56.600 press conference, anything of note here that you think we 0:00:56.600 --> 0:00:58.640 should bring attention to and. 0:00:58.800 --> 0:01:03.240 Full of thanks only. First on Iran, he is suggesting 0:01:03.280 --> 0:01:05.640 that talks are going on, even though Aron says talks 0:01:05.680 --> 0:01:09.000 are not going on, and that just becomes a situation 0:01:09.080 --> 0:01:11.280 of who do you believe? And it's hard to answer 0:01:11.280 --> 0:01:15.640 that question. But my understanding is there are at least 0:01:15.640 --> 0:01:18.200 some sort of context going on, but who that is 0:01:18.319 --> 0:01:20.880 or who it's with seems to be up in the air. 0:01:20.959 --> 0:01:23.720 It's also you know where they are, well, I'm not 0:01:23.760 --> 0:01:26.839 sure that they're physically like that everyone is in one place. 0:01:27.760 --> 0:01:30.160 There are a couple intermediaries who have been part of 0:01:30.200 --> 0:01:34.000 this process from the from the get go, Oman being 0:01:34.000 --> 0:01:37.280 one of them, and that Iran recognized or acknowledged that 0:01:37.319 --> 0:01:40.680 Oman was, that they were in touch with him Oman 0:01:40.760 --> 0:01:43.560 about this, But it's it's just hard. It's hard to 0:01:43.640 --> 0:01:48.960 know because the president says these things, and it's certainly 0:01:49.040 --> 0:01:52.960 very important to him to show that there's a pathway 0:01:53.000 --> 0:01:55.280 to peace because he doesn't want this to go on forever. 0:01:55.840 --> 0:01:58.360 But it's it's tricky. 0:01:58.480 --> 0:01:59.800 What is that pathway though? 0:02:00.600 --> 0:02:03.680 Yeah, it's it's unclear to me. I wish he were 0:02:03.720 --> 0:02:05.800 here so that we could we could ask him, I mean, 0:02:06.160 --> 0:02:07.600 and to go back to just some of the things 0:02:07.600 --> 0:02:09.440 that he said just now. He said that the Strait 0:02:09.560 --> 0:02:11.400 is going to open, the Straight of war moves is 0:02:11.440 --> 0:02:13.080 going to open tomorrow, and that there will and there 0:02:13.080 --> 0:02:15.200 will be no tolls or no fines. Well, that is 0:02:15.240 --> 0:02:18.080 the opposite of what Iran is saying, and it's also 0:02:18.120 --> 0:02:21.040 the opposite lesson, or it ignores the fact that Iran 0:02:21.080 --> 0:02:23.760 has learned the lesson over the last six months, that 0:02:23.840 --> 0:02:26.720 it has the control that it has. So it's it's 0:02:26.760 --> 0:02:30.079 pretty hard to imagine that they're just going to give 0:02:30.120 --> 0:02:32.640 that up, and the President is not acknowledging that at all. 0:02:32.960 --> 0:02:35.320 What about are they going to give up their access 0:02:35.480 --> 0:02:36.720 to have nuclear weapons? 0:02:37.720 --> 0:02:37.920 You know? 0:02:37.960 --> 0:02:41.960 Another piece of that is that the President will say 0:02:42.080 --> 0:02:45.200 and set over the weekend and and may have suggested 0:02:45.240 --> 0:02:47.200 it again today, that Iran is not going to have 0:02:47.240 --> 0:02:49.840 a nuclear weapon, and we can do this quickly. It 0:02:49.880 --> 0:02:52.399 took a year and a half for what was called 0:02:52.400 --> 0:02:56.320 the JCPOA, the Iranian Nuclear Agreement that was done during 0:02:56.320 --> 0:03:01.000 the Obama years, to be negotiated. They're nowhere near that 0:03:01.080 --> 0:03:03.320 kind of an agreement right now that I can say 0:03:03.360 --> 0:03:04.360 with full confidence. 0:03:04.520 --> 0:03:06.360 And the President did say that would be the second 0:03:06.400 --> 0:03:09.160 stage opening this straight would be the first phase. 0:03:08.919 --> 0:03:11.920 Right and because that first phase is probably more politically 0:03:11.919 --> 0:03:15.120 important to him to get that done, because that's the 0:03:15.120 --> 0:03:18.000 Pandora's box that was opened after the war started, the 0:03:18.040 --> 0:03:20.840 war started by Israel and the United States. That was 0:03:20.880 --> 0:03:23.320 not a problem before this war and is now for 0:03:23.400 --> 0:03:26.080 the world economy and certainly for the United States. 0:03:26.160 --> 0:03:29.919 Yeah, an important reminder, you know, as of February twenty 0:03:29.960 --> 0:03:33.359 seventh of this year, that the Strait was open. Yeah, 0:03:33.440 --> 0:03:35.640 so correct, it would be just going back to what 0:03:35.680 --> 0:03:36.680 it was before the war. 0:03:36.840 --> 0:03:40.320 Yeah, And it's just you know, certainly the president wants 0:03:40.360 --> 0:03:43.480 that status quo to be returned, but the Iranians have 0:03:43.520 --> 0:03:48.800 shown really no willingness to go back to the status quo. 0:03:49.240 --> 0:03:49.440 Jeff. 0:03:49.480 --> 0:03:52.040 There's been a lot of polling that has been done 0:03:52.160 --> 0:03:55.200 as of late in the last week or so, and people, 0:03:55.760 --> 0:03:58.920 the Americans, when it comes to the war, they say 0:03:59.160 --> 0:04:03.280 thirty one percent theyreon war is not worth it or 0:04:03.280 --> 0:04:06.520 worth it. Excuse me. Thirty one percent say it's worth it. 0:04:06.640 --> 0:04:09.200 Sixty six percent say it's not worth it. This is 0:04:09.240 --> 0:04:14.440 the Quiniapiac poll. In terms of job approval, thirty two 0:04:14.480 --> 0:04:19.040 percent approve of the president's job, fifty eight percent disapprove 0:04:19.200 --> 0:04:24.040 of it. Polls or polls post be wrong. I don't know, 0:04:24.200 --> 0:04:26.680 as someone who covers the White House and the President 0:04:26.720 --> 0:04:29.600 inside and out, does he look at these things, Does 0:04:29.640 --> 0:04:30.800 he care about these things? 0:04:31.120 --> 0:04:33.240 Yeah, for sure he does. And I think one reason 0:04:33.360 --> 0:04:36.560 or One example of how closely he's following it is 0:04:36.600 --> 0:04:40.520 he sent out some alternative polls today on his truth 0:04:40.560 --> 0:04:46.039 social account. So he wants people to think a that 0:04:46.080 --> 0:04:49.240 they're better than they are and b that he's not 0:04:49.279 --> 0:04:51.640 paying attention to these other public ones. He absolutely is. 0:04:52.040 --> 0:04:54.360 And I would say also as a longtime political reporter 0:04:54.839 --> 0:05:00.000 that speaking to people in all of these orbits, the democratics, 0:05:00.160 --> 0:05:02.440 the Republican side, regardless of who's in power in the 0:05:02.480 --> 0:05:05.640 White House, they keep a close eye on these polls 0:05:05.680 --> 0:05:11.240 because it translates into they've translated into votes, and if 0:05:11.279 --> 0:05:14.960 approval ratings are high, that would suggest that the midterms 0:05:15.000 --> 0:05:16.640 are going to go better for his party. The fact 0:05:16.680 --> 0:05:19.320 that his approval ratings are low is almost certainly going 0:05:19.360 --> 0:05:21.400 to hurt his party if it doesn't get a turnaround 0:05:21.440 --> 0:05:22.360 between now and November. 0:05:22.600 --> 0:05:26.120 I'm glad you brought up midterms because the President also 0:05:26.160 --> 0:05:28.799 made some comments about what he calls the Save America 0:05:28.839 --> 0:05:33.000 Act Yes, which is facing some challenges in Congress right now. 0:05:33.279 --> 0:05:38.200 If Congress doesn't vote on this before the midterms, is 0:05:38.240 --> 0:05:39.000 this bill dead? 0:05:40.360 --> 0:05:43.080 Probably, because I mean, they could start it up again 0:05:43.520 --> 0:05:46.320 next year, but a bill has to become has to 0:05:46.360 --> 0:05:48.960 be go through the legislative process within the two year 0:05:49.040 --> 0:05:52.200 legislative calendar, So that's going to reset in January. If 0:05:52.200 --> 0:05:55.320 they don't get it done now, and there's very little 0:05:55.320 --> 0:05:57.000 sign that it's going to get done now. They may 0:05:57.279 --> 0:05:59.120 or they are trying to bring in some of the 0:05:59.160 --> 0:06:02.560 aspects of the Same America Act into the budgetary process. 0:06:03.000 --> 0:06:05.839 But President Trump wants more and he just doesn't have 0:06:05.880 --> 0:06:08.960 the votes, certainly not from Democrats and also not from 0:06:09.080 --> 0:06:11.839 enough Republicans, and that's been a thorn in his side 0:06:12.160 --> 0:06:13.279 for weeks now. 0:06:14.400 --> 0:06:16.800 Maybe silly question, is he losing any of his power? 0:06:16.960 --> 0:06:19.520 Like it does feel like he still holds so much 0:06:19.560 --> 0:06:21.440 sway when it comes to what gets done or doesn't 0:06:21.440 --> 0:06:26.400 get done. Jeff, But I think about, you know, I 0:06:26.400 --> 0:06:29.720 don't know, is he losing some of, you know, his 0:06:29.880 --> 0:06:32.640 ability to really get certain things done. 0:06:32.760 --> 0:06:34.680 I don't think that's a silly question. I think that's 0:06:34.720 --> 0:06:39.240 something we're all watching. And some of the signs of 0:06:39.240 --> 0:06:41.680 that or some of the signs of whether maybe his 0:06:41.760 --> 0:06:45.440 power is eroding have come from the senators who are 0:06:46.279 --> 0:06:49.520 willing to stand up to him. Pretty important to note 0:06:49.600 --> 0:06:51.520 that those are senators who are on their way out 0:06:51.720 --> 0:06:55.720 and the President has emphasized that that they're lawmakers who 0:06:55.800 --> 0:06:59.080 he did not endorse, and therefore he thinks that they're 0:06:59.120 --> 0:07:00.720 upset with him for that and they're going to have 0:07:00.760 --> 0:07:04.279 to retire in January. But even so, they have Corn 0:07:04.440 --> 0:07:08.760 and Tillis, for example, have have pushed this this issue 0:07:08.800 --> 0:07:12.760 of the fund as a as a key negotiating tool 0:07:13.040 --> 0:07:17.040 over Todd Blanche and clearly also a thorn in the 0:07:17.040 --> 0:07:20.200 President's side because he said just now that he wasn't 0:07:20.240 --> 0:07:22.800 involved in whatever Todd Blanche agreed. 0:07:24.560 --> 0:07:28.640 How can I throw in pirol like her like backing off? 0:07:29.480 --> 0:07:31.480 It seems to he just said she made a mistake. 0:07:31.600 --> 0:07:34.120 She made a mistake, but she did it. No, And 0:07:34.160 --> 0:07:36.680 I feel like if you'd gone six seven months ago, 0:07:37.000 --> 0:07:38.080 I don't know if that would have happened. 0:07:38.080 --> 0:07:38.520 I don't know. 0:07:38.760 --> 0:07:42.080 Yeah, I mean, that's that's such a great minor, but 0:07:42.200 --> 0:07:44.960 it's just it's minor, but it's it's sort of like 0:07:45.440 --> 0:07:47.480 destroying part of the well all of the East Wing 0:07:47.520 --> 0:07:50.440 without giving permission and then talking about it later. It's 0:07:50.840 --> 0:07:54.080 it's a metaphor for how things are going for him 0:07:54.120 --> 0:07:56.760 right now. And it's certainly got to be fascinating in 0:07:56.840 --> 0:08:00.760 her office because there is a difference between saying something 0:08:00.800 --> 0:08:04.800 that's not true and pushing that story on truth social 0:08:05.000 --> 0:08:07.640 or in the oval office or wherever the president and 0:08:07.680 --> 0:08:10.360 some of his cabinet members are talking about the reflecting pool. 0:08:10.720 --> 0:08:15.440 There's an entirely different setting when you have to say 0:08:15.440 --> 0:08:15.800 it in. 0:08:15.720 --> 0:08:19.920 Court and you know the President's going to react. 0:08:19.880 --> 0:08:23.440 No doubt, and he has. But she couldn't prove it. 0:08:23.560 --> 0:08:26.520 And in fact, what she could show is that there 0:08:26.560 --> 0:08:29.560 were problems with the installation, and that's the opposite of 0:08:29.600 --> 0:08:32.400 what he wants to hear. But that certainly appears to 0:08:32.440 --> 0:08:34.600 be the honest truth. 0:08:35.200 --> 0:08:35.440 Jeff. 0:08:35.480 --> 0:08:38.120 One thing that is I think of interest to our 0:08:38.200 --> 0:08:41.559 audience is President's comments about oil companies. 0:08:42.200 --> 0:08:43.160 Just in the last few minutes. 0:08:43.160 --> 0:08:46.199 He said that oil firms better cut the retail price. 0:08:46.240 --> 0:08:49.199 He said that Exon and Chevron are making too much money. 0:08:49.200 --> 0:08:52.440 Both of those companies actually extended their declines after the 0:08:52.480 --> 0:08:55.079 President made those comments. X On Mobiles down about four 0:08:55.120 --> 0:08:58.439 tens of one percent, Chevron down about one point nine percent. 0:08:59.120 --> 0:09:01.880 Can you just explain sort of the tension between a 0:09:01.920 --> 0:09:03.959 traditional and I don't want to say you use the 0:09:03.960 --> 0:09:06.319 word traditional, but like the idea of a free market 0:09:06.640 --> 0:09:10.960 and the close relationship that historically many Republican presidents have 0:09:11.040 --> 0:09:13.560 had with oil companies. Sure, indeed, the close relationship that 0:09:13.559 --> 0:09:16.520 we've seen all those CEOs at the White House, especially. 0:09:16.160 --> 0:09:18.439 In the wake of what happened in Venezuela. 0:09:18.600 --> 0:09:21.000 But the President now making comments like this, and what 0:09:21.040 --> 0:09:22.320 the repercussions of that could be. 0:09:22.559 --> 0:09:24.800 Sure, So a couple of things. Number one, him saying 0:09:24.840 --> 0:09:29.760 that puts him in almost in democratic territory, because I 0:09:30.000 --> 0:09:33.280 could certainly imagine hearing a President Joe Biden or a 0:09:33.280 --> 0:09:38.760 President Barack Obama going out and criticizing oil companies over prices. 0:09:38.800 --> 0:09:41.559 So there's a populist aspect to that. I also think 0:09:41.600 --> 0:09:44.280 it's you know, it's instructive to remember that President Trump 0:09:44.400 --> 0:09:49.160 sees the world politically, business wise, diplomatically through a lens 0:09:49.320 --> 0:09:53.920 of his own making. That's related to him. And right 0:09:53.960 --> 0:09:57.319 now it's bad for him politically that gasoline prices are 0:09:57.320 --> 0:09:59.960 so high, so he would like to see those come down, 0:10:00.559 --> 0:10:04.559 surely to help Americans, but also to help his political 0:10:04.880 --> 0:10:08.760 prospects and the political prospects of his party. But it 0:10:08.840 --> 0:10:11.319 is certainly not in line, as many other things are 0:10:11.360 --> 0:10:15.880 not with traditional Republican orthodoxy in terms of business and 0:10:15.920 --> 0:10:17.080 the relationship with business. 0:10:17.400 --> 0:10:19.320 Again, as we like to say, it's a shame nothing's 0:10:19.360 --> 0:10:21.160 going on when it comes to you can go on. 0:10:21.400 --> 0:10:25.080 I just want to point out CNN reporting that the 0:10:25.080 --> 0:10:28.240 President is weighing removing Janine Piro over the reflecting pool. 0:10:28.280 --> 0:10:31.280 So this is just setting some sources on the present 0:10:31.360 --> 0:10:33.959 thinking about it. So there we go. 0:10:34.240 --> 0:10:35.440 Thank you so much, my pleasure. 0:10:35.440 --> 0:10:37.280 We were looking forward to this. So great to have 0:10:37.320 --> 0:10:39.240 you here. I gotcha, all right, talk to you too. 0:10:39.280 --> 0:10:42.040 Jeff Mason, Bloomberg News, White House and Washington Correspondent, joining 0:10:42.120 --> 0:10:43.720 us right here in studio. 0:10:44.559 --> 0:10:45.320 Stay with us. 0:10:45.320 --> 0:10:48.360 More from Bloomberg Business Week Daily coming up after this. 0:10:52.000 --> 0:10:55.960 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:10:56.080 --> 0:10:59.480 live weekday afternoons from two to five pm Eastern. Listen 0:10:59.520 --> 0:11:03.120 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:11:03.240 --> 0:11:05.640 or watch us live on YouTube. 0:11:06.320 --> 0:11:09.000 Our next guest now with some research. Always a must read. 0:11:09.200 --> 0:11:13.080 It's always on the Bloomberg Everybody talking about it on 0:11:13.120 --> 0:11:14.920 Wall Street. We talk about it a lot in the newsroom. 0:11:14.920 --> 0:11:17.280 Torsten slock is with US, chief economist and partner to 0:11:17.280 --> 0:11:21.439 Apollo Global Management here in studio. Good to have you 0:11:21.520 --> 0:11:23.640 here with us, so many different places to start, and 0:11:23.720 --> 0:11:26.400 I do want to talk about the sixty to forty portfolio. 0:11:27.360 --> 0:11:29.880 President Trump we watched and what he's doing with policies. 0:11:29.920 --> 0:11:31.480 We talk about AI a lot. We're going to get 0:11:31.520 --> 0:11:34.800 into that. You know, the FED. Do you just look 0:11:34.840 --> 0:11:36.800 at it all or like first thing in the morning, 0:11:36.840 --> 0:11:38.040 what do you want? Do you want to check what's 0:11:38.080 --> 0:11:41.080 going on in Asia? Like is it everything that is 0:11:41.360 --> 0:11:42.520 a priority right now? 0:11:42.760 --> 0:11:42.960 Yeah? 0:11:43.000 --> 0:11:45.400 No, absolutely, I mean the agenda is certainly first. Ve 0:11:45.440 --> 0:11:47.640 Ryan is very important. Ship's going to sail through the 0:11:47.640 --> 0:11:49.319 straight up AMusA, not to how much all that is 0:11:49.360 --> 0:11:50.960 going to get to live. But that continues to be 0:11:51.000 --> 0:11:53.880 a very important risk because if we do run dry 0:11:54.080 --> 0:11:57.280 in tanks, especially in Europe, then we may run out 0:11:57.400 --> 0:12:01.120 of marine fuel, of jet fuel, of fertilized of helium, 0:12:01.360 --> 0:12:04.640 and obviously this creates a jump risk in prices, especially 0:12:04.720 --> 0:12:06.120 for energy, and they're still. 0:12:05.960 --> 0:12:08.120 A risk even though that like back and forth, I 0:12:08.160 --> 0:12:09.560 know it's markets look through it. 0:12:09.559 --> 0:12:11.400 You're right, Carol, because this hasn't been an issue for 0:12:11.440 --> 0:12:13.160 a while because we've been so busy with the FIT 0:12:13.200 --> 0:12:16.320 and with AI. But in the background, this continues unfoltunately 0:12:16.320 --> 0:12:18.840 to still be very very important because the literally is 0:12:18.880 --> 0:12:20.800 the case that we could have some tanks catch to 0:12:20.840 --> 0:12:24.360 critical levels. Yes, there's still, of course fuel running in 0:12:24.400 --> 0:12:26.600 the pipes and the systems have to function, but we 0:12:26.640 --> 0:12:30.080 don't know what that level of critical level of inventory is. 0:12:30.440 --> 0:12:32.920 And the risk is when we don't have twenty percent 0:12:33.040 --> 0:12:35.280 of oil that's supposed to be delivered every day coming 0:12:35.280 --> 0:12:37.520 through the strait up a moose of Babel Mante. The 0:12:37.600 --> 0:12:39.880 consequence is that we still have this in the background 0:12:40.040 --> 0:12:42.559 as again jump risk and oil prices in particular and 0:12:42.640 --> 0:12:45.760 ultofi agricultural prices. So yes, this just adds to the 0:12:45.800 --> 0:12:48.679 other things about WASH's press conference and AI and all 0:12:48.679 --> 0:12:50.079 the other things we can talk about. 0:12:49.960 --> 0:12:52.160 But one more on one of oil and iron before 0:12:52.200 --> 0:12:53.960 we get there. It does seem like the oil market 0:12:54.080 --> 0:12:55.680 and we just heard from Jeff Mason who said, we 0:12:55.720 --> 0:12:58.199 have no idea what the talks are happening between the 0:12:58.600 --> 0:13:00.920 US and Iran right now, and this inflict oil prices 0:13:00.920 --> 0:13:03.040 there are down five percent of whether we're talking or 0:13:03.120 --> 0:13:05.719 brand or WTI. Is the oil market getting this right 0:13:05.800 --> 0:13:06.640 or is it getting it wrong? 0:13:06.679 --> 0:13:08.760 Well, this is quite remarkable that oil prices have been 0:13:08.800 --> 0:13:10.800 through this roller coaster of going up and down and 0:13:10.800 --> 0:13:13.199 seem to have a much stronger opinion about whether a 0:13:13.240 --> 0:13:15.880 deal is having or not, whereas people in raids and 0:13:15.960 --> 0:13:18.440 in the economics and in the region they have a 0:13:18.559 --> 0:13:21.120 much more nuanced view of Hey, if there is no 0:13:21.200 --> 0:13:22.880 sign of a deal, and if we have a deal, 0:13:22.920 --> 0:13:25.200 then there is a bigger risk that we could eventually 0:13:25.280 --> 0:13:27.840 run dry. So that's why the clock is truly ticking 0:13:27.960 --> 0:13:30.520 on oil inventories, and the more that ticks, the high 0:13:30.679 --> 0:13:32.880 is the risk. Remember there is now two months ago 0:13:33.040 --> 0:13:34.640 that the head of the EIA said that we were 0:13:34.720 --> 0:13:35.960 six weeks away. 0:13:35.960 --> 0:13:37.600 From Europe running out of jet fuel. 0:13:37.920 --> 0:13:41.199 Now we thankfully have not reached that point quite yet, 0:13:41.320 --> 0:13:43.760 but it's very clear that we literally have zero ships. 0:13:43.800 --> 0:13:46.280 If I look at my bloombergy screen e Ken Homos, 0:13:46.360 --> 0:13:48.800 zero ships coming through the strait up Homusa and Bubble Montep. 0:13:48.840 --> 0:13:51.400 At the moment, that is still a very significant risk 0:13:51.440 --> 0:13:53.959 in the background. It's difficult to quantify. Who knows if 0:13:53.960 --> 0:13:56.439 this is tomorrow, next week, or next month. But if 0:13:56.440 --> 0:13:59.440 the Iranians continue with this onto the midterm election, I 0:13:59.480 --> 0:14:01.800 feel very confident that then we will have the risk 0:14:02.000 --> 0:14:04.640 that we could see inventory and remember Nice Airport ran 0:14:04.640 --> 0:14:06.760 out of jet fuel three weeks ago, so this is 0:14:06.800 --> 0:14:09.640 also not just an academic exercise. This is something that's 0:14:09.640 --> 0:14:11.959 really truly happening, not only for jet fuel, also for 0:14:12.080 --> 0:14:14.199 marine fuel, other types of fuel, and of course also 0:14:14.400 --> 0:14:16.840 agricultural products such as fertilized on helium. 0:14:16.880 --> 0:14:20.360 Maybe this is why fed cheer Kevin Worsh was so 0:14:20.680 --> 0:14:23.360 general broad Macro and I want to play something for 0:14:23.400 --> 0:14:26.400 you because Double one Capito's Jeff Gunlock called out Michael 0:14:26.440 --> 0:14:29.040 McKee on X, noting that Mike's question out last week's 0:14:29.400 --> 0:14:32.360 FOMC press conference. He wrote, the greatest financial media moment 0:14:32.440 --> 0:14:35.120 year to date was Michael McKee teeing up and then 0:14:35.160 --> 0:14:38.840 delivering what are you waiting for? To fed cheer Worsh. 0:14:39.080 --> 0:14:41.240 Listen up, everybody. Here's what Mike had to say at 0:14:41.240 --> 0:14:43.000 the FOMC press conference last week. 0:14:43.600 --> 0:14:45.720 What vetting did you do of the people that you 0:14:45.760 --> 0:14:49.720 appointed to the task forces? In particular, given Mark Andresen's 0:14:49.720 --> 0:14:53.320 substantial political spending twenty five million dollars in just the 0:14:53.400 --> 0:14:57.960 past year to back candidates who oppose stricter IAI regulation, 0:14:58.480 --> 0:15:00.880 how can the public be confident that a committee he 0:15:00.960 --> 0:15:05.040 co chairs will provide an independent assessment of AI's economic 0:15:05.040 --> 0:15:07.760 effects rather than one aligned with the interests of the 0:15:07.800 --> 0:15:08.600 AI industry. 0:15:08.840 --> 0:15:16.760 Yeah, so I selected fifteen incredible subject market subject matter 0:15:16.840 --> 0:15:21.760 experts to tackle five of the most important questions that 0:15:21.840 --> 0:15:24.560 if we get the answers right, we're going to do 0:15:24.600 --> 0:15:26.520 a far better job in delivering. And if we get 0:15:26.520 --> 0:15:29.520 the answers wrong, we have a problem. The comfort that 0:15:29.560 --> 0:15:33.080 I can give you and your listeners is all right. 0:15:32.960 --> 0:15:34.600 We're going to get out of that. That was actually 0:15:34.600 --> 0:15:36.560 not the SoundBite we wanted to play, but that was 0:15:36.640 --> 0:15:39.760 Kevin Warsh with Michael McKee. But Mike was basically saying 0:15:39.800 --> 0:15:43.480 what are you waiting for? And Torsten, you obviously watched it. 0:15:43.600 --> 0:15:46.840 He just was so general, Macro, What did you take 0:15:46.880 --> 0:15:48.560 away from Kevin Walsh last week? 0:15:48.600 --> 0:15:51.000 Well, I think the market reaction speaks to Mike's question 0:15:51.080 --> 0:15:52.640 naming what are we waiting for? Why didn't you just 0:15:52.680 --> 0:15:55.160 hig rates the fact that they didn't do that. Yeah, 0:15:55.200 --> 0:15:57.520 and the market reaction with a very very steep curve. 0:15:57.640 --> 0:16:00.200 Of course you should have high rates at least. Now 0:16:00.200 --> 0:16:03.120 we're beginning to ask questions in markets about well, do 0:16:03.160 --> 0:16:05.640 you have the commitment to raise rates. Do you really 0:16:05.640 --> 0:16:07.640 think inflation will be two percent? And if you think so, 0:16:08.080 --> 0:16:10.760 what is the road to getting to two percent? Are 0:16:10.760 --> 0:16:12.360 you going to use the balance sheet? Are you going 0:16:12.360 --> 0:16:14.120 to use the fit funds rate? Are you going to 0:16:14.200 --> 0:16:16.960 use tiger financial conditions? He should be able to answer, 0:16:17.000 --> 0:16:19.800 shouldn't He did talk about tighter financial conditions, which may 0:16:19.840 --> 0:16:22.480 have added a bit to the confusion, because it becomes 0:16:22.600 --> 0:16:25.200 really really important for the yeal curve whether you pick 0:16:25.280 --> 0:16:27.680 to do this through a stronger balance sheet meaning lower 0:16:27.720 --> 0:16:30.240 balance sheet, whether you do this through higher rates, or 0:16:30.240 --> 0:16:32.320 whether you do this through tide of financial conditions, Because 0:16:32.360 --> 0:16:34.560 if you trade rates, you of course will have a 0:16:34.600 --> 0:16:36.600 strong view on how is it that the fate is 0:16:36.640 --> 0:16:38.640 going to achieve the two percent goal? And you could 0:16:38.720 --> 0:16:40.560 say in theory that we want to do this through 0:16:40.600 --> 0:16:43.160 a smaller balance sheet, but we didn't even get an 0:16:43.160 --> 0:16:45.040 answer to that. So that's why people are not beginning 0:16:45.120 --> 0:16:47.800 to wonder, Okay, there's more volatility in markets. We have 0:16:47.840 --> 0:16:50.560 a steeper curve, more questions being asked. So therefore, if 0:16:50.600 --> 0:16:53.080 they don't hike in September, of course, then the market 0:16:53.120 --> 0:16:55.200 will just ask given more questions about what what is now? 0:16:55.240 --> 0:16:57.840 The plan. Can you do it through a fewer meetings 0:16:57.840 --> 0:16:58.160 a year? 0:16:58.720 --> 0:17:01.040 Well, that's one way of doing it, but that doesn't 0:17:01.120 --> 0:17:01.960 change the facts that the. 0:17:01.920 --> 0:17:02.560 Market frame is. 0:17:02.600 --> 0:17:04.800 The New York Times reporting on Friday night that I 0:17:04.840 --> 0:17:06.680 saw that that the FED could have fewer meetings. 0:17:06.760 --> 0:17:06.920 Yeah. 0:17:06.920 --> 0:17:08.920 Absolutely, And I think that that, of course would change 0:17:08.960 --> 0:17:11.200 the game quite significantly if they were to go to 0:17:11.240 --> 0:17:14.000 the legally manded only four meetings a year. But it's 0:17:14.080 --> 0:17:16.280 very clear still that even that debate, the market will 0:17:16.320 --> 0:17:18.960 still try to price the FED at every single moment 0:17:18.960 --> 0:17:19.320 in time. 0:17:19.520 --> 0:17:20.640 And that basically means that. 0:17:20.600 --> 0:17:22.919 We have a situation where the market constantly needs to 0:17:22.920 --> 0:17:26.160 think about how might the FIT interpret the incoming data? Right? 0:17:26.240 --> 0:17:28.120 Got, Well, I guess what it does? 0:17:28.160 --> 0:17:30.719 It mean that we hear more from the FED speakers 0:17:30.840 --> 0:17:33.639 and their sort of job owning between meetings. I'm just 0:17:33.680 --> 0:17:37.119 trying to understand a world we live in with less communication. 0:17:37.200 --> 0:17:40.240 If you want the market to serve as sort of 0:17:40.240 --> 0:17:41.760 the benchmark for the. 0:17:43.359 --> 0:17:44.000 FED, I don't know. 0:17:44.119 --> 0:17:46.280 I think the toothpaste will come out one way or 0:17:46.280 --> 0:17:49.320 the other other. IFMC members will begin to have speeches 0:17:49.520 --> 0:17:52.639 where they say is what I think, and normally some 0:17:52.680 --> 0:17:54.640 of these I FMC members. They don't get a lot 0:17:54.640 --> 0:17:57.600 of weight as such from financial markets, but today they 0:17:57.600 --> 0:17:59.920 are given a lot of weight because if the chair 0:18:00.000 --> 0:18:02.399 I decided to say I'm not giving not even forward 0:18:02.400 --> 0:18:05.200 guidance but also not framework guidance, then of course others 0:18:05.240 --> 0:18:07.560 who are willing to talk about not even framework guidance 0:18:07.560 --> 0:18:09.240 and forward guidance, but just give a description of the 0:18:09.320 --> 0:18:11.879 data and talk about how do they think the data 0:18:11.920 --> 0:18:14.360 could be evolving? I think that is going to get 0:18:14.359 --> 0:18:16.840 a lot more weight. Which is why when Beth Hammer 0:18:16.920 --> 0:18:19.639 puts something on LinkedIn on a Sunday afternoon, this suddenly 0:18:19.640 --> 0:18:21.840 gets people sent this to me all Sunday evening and 0:18:21.880 --> 0:18:23.639 say what do you think? How should we think about this? 0:18:23.680 --> 0:18:26.520 And this suddenly becomes really really important because the market 0:18:26.560 --> 0:18:29.240 is constantly trying to figure out what is the trajectory 0:18:29.240 --> 0:18:30.240 of where rates are going? 0:18:30.440 --> 0:18:33.240 Right exactly, I want to get to the sixty forty 0:18:33.560 --> 0:18:38.159 portfolio that we've talked about forever right being broken? Why so? 0:18:38.320 --> 0:18:40.040 And you have an AI aspect. 0:18:39.640 --> 0:18:41.600 To this, Yeah, So the really important aspect of this 0:18:41.680 --> 0:18:44.520 discussion is the following. The sixty to forty portfolio was 0:18:44.640 --> 0:18:47.240