WEBVTT - Markets and Trump Uncertainty 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:26.960 us live on YouTube. 0:00:27.040 --> 0:00:29.920 Bremercam Patison here for a good conversation to start the 0:00:29.920 --> 0:00:32.479 morning off, and of course we devolve that to a 0:00:32.560 --> 0:00:35.680 dollar discussion. And on premiere she's focused on crypto. We'll 0:00:35.680 --> 0:00:38.239 get to that in a moment. Her effort at the 0:00:38.240 --> 0:00:41.880 Council on Foreign Relations is noticed. I can't say enough 0:00:41.880 --> 0:00:45.040 about the new edition of Foreign Affairs magazine. You'll see 0:00:45.040 --> 0:00:47.080 it in the next couple days or so. It's just 0:00:47.240 --> 0:00:51.040 absolutely extraordinary. I've got to go to dollar here right now. 0:00:51.640 --> 0:00:55.040 It's dollar had your money? Is it threatened by all 0:00:55.080 --> 0:00:56.440 that's going on in Washington? 0:00:57.720 --> 0:01:00.080 Longer term, yes, I think there is a threat to 0:01:00.160 --> 0:01:02.880 the dollar from some of these policies. You know, the 0:01:03.000 --> 0:01:07.959 US relies on demand for treasuries and the idea that 0:01:08.040 --> 0:01:10.800 the Treasury is going to be the biggest bond mark 0:01:10.880 --> 0:01:15.120 in the world. Liquid safe, always transactional, and if you're 0:01:15.160 --> 0:01:19.720 putting tariffs on allies, as well as adversaries. Over time, 0:01:19.760 --> 0:01:22.480 they may want to diversify away from those assets. Now, 0:01:22.520 --> 0:01:24.240 there aren't a lot of places for them to go, 0:01:24.319 --> 0:01:26.920 but one place we've seen clearly over the last couple 0:01:26.959 --> 0:01:30.479 of years is gold. And you are seeing data showing 0:01:30.600 --> 0:01:33.960 China reducing its treasury holdings. Obviously we know Russia did 0:01:34.000 --> 0:01:37.080 over the last several years. So the policies we're putting 0:01:37.080 --> 0:01:40.080 forward today, I think do create some risk. Now there's 0:01:40.440 --> 0:01:42.640 new sources of demand that we can talk about when 0:01:42.640 --> 0:01:45.280 we get to crypto, but when we think about foreign 0:01:45.319 --> 0:01:48.440 holdings of US bonds, I think that is a source 0:01:48.480 --> 0:01:51.720 of risk that could push yields higher and weigh on growth. 0:01:52.160 --> 0:01:53.560 You know, does it do you get a sense that 0:01:53.640 --> 0:01:55.680 this White House, this economic team at the White House, 0:01:55.720 --> 0:01:59.240 that they have a sense that, generally speaking, markets do 0:01:59.360 --> 0:02:03.720 not like uns certainty, whether it's uncertainty a policy, uncertainly, 0:02:03.920 --> 0:02:08.200 uncertainty of rhetoric. Is that something that has an audience, 0:02:08.320 --> 0:02:09.880 do you think down there in DC? Or is it 0:02:09.919 --> 0:02:12.079 just kind of overshadowed by this is a president that 0:02:12.120 --> 0:02:13.320 wants to do what he wants to do. 0:02:13.840 --> 0:02:16.800 President Trump has said in the last few weeks that 0:02:16.880 --> 0:02:19.120 he knows there might be some short term pain to 0:02:19.200 --> 0:02:22.240 get to these long term goals. I think there's probably 0:02:22.240 --> 0:02:24.880 a degree of pain reflected in the markets that would 0:02:24.919 --> 0:02:27.639 get his and his team's attention and maybe cause them 0:02:27.680 --> 0:02:32.040 to take a step back, at least temporarily. But I 0:02:32.960 --> 0:02:36.079 don't honestly know if today, looking at the sell off 0:02:36.080 --> 0:02:38.120 we saw in the stock market last week and the 0:02:38.160 --> 0:02:41.400 continued softness we're seeing this week registers. 0:02:41.760 --> 0:02:44.840 I look at the file through of all this, and 0:02:44.880 --> 0:02:46.560 I guess I go back, like a lot of people, 0:02:46.600 --> 0:02:50.680 to real GDP. The fact is Atlanta GDP now a 0:02:50.720 --> 0:02:53.760 snapshot of where we are right now, is coming in 0:02:53.800 --> 0:02:58.440 with a vengeance. Do you sense a momentum to to, 0:02:58.560 --> 0:03:01.160 you know, to make some news here on a What's today? Tuesday? 0:03:01.240 --> 0:03:04.520 Tuesday, Tuesday morning? Both? 0:03:05.000 --> 0:03:07.800 Yes, I'm worrying about both. I got the stitches out 0:03:07.840 --> 0:03:11.480 from where the damn dog bit me just as simple 0:03:11.520 --> 0:03:15.360 as I can. Are we heading towards two point five 0:03:15.400 --> 0:03:17.079 percent or lower real GDP? 0:03:17.520 --> 0:03:21.040 Well, here's what's so interesting, Tom. You know, last year 0:03:21.160 --> 0:03:24.080 GDP was much stronger than expected. We've gone into this 0:03:24.200 --> 0:03:27.200 year strong. We've seen that in the most recent earning season. 0:03:27.480 --> 0:03:30.760 But that's all backward looking. What drives the economy is 0:03:30.840 --> 0:03:34.040 confidence and incomes. So people still have incomes, the job 0:03:34.080 --> 0:03:37.640 markets still strong outside of certain DC agencies. I don't 0:03:37.680 --> 0:03:41.440 mean to be snarky about that, but confidence is where 0:03:41.440 --> 0:03:45.120 we're seeing some question marks. The other piece that's changing 0:03:45.480 --> 0:03:49.600 is economic surprises. A lot of economists revised up their 0:03:49.640 --> 0:03:52.840 expectations immediately after the election. What we've seen over the 0:03:52.920 --> 0:03:57.760 last several weeks now is data coming in below expectations, disappointing, 0:03:58.200 --> 0:03:59.839 and that indicator coming down. 0:04:00.160 --> 0:04:00.280 Now. 0:04:00.280 --> 0:04:02.960 I want to be careful on causation, but it's correlating 0:04:03.240 --> 0:04:06.480 beautifully with the ten year yield. So the market's pricing 0:04:06.520 --> 0:04:08.920 in two FED cuts again, the ten year yield is 0:04:08.920 --> 0:04:12.000 getting lower. All of that is coming hand in hand 0:04:12.080 --> 0:04:17.520 with both worries about the forward looking economic outlook and disappointments. 0:04:17.200 --> 0:04:19.800 To four digits. Paul Patterson's in the room, so we 0:04:19.880 --> 0:04:22.520 got to, you know, go to four decimal points absolutely 0:04:22.560 --> 0:04:26.839 one point eight nine four and the ten year real yield. 0:04:27.000 --> 0:04:29.320 That's an ian linga number top go. 0:04:29.480 --> 0:04:31.640 These are the top stories on the Bloomberg criminal Tom 0:04:31.640 --> 0:04:32.640 guess what's number one? 0:04:32.680 --> 0:04:32.880 Here? 0:04:33.000 --> 0:04:38.160 Your favorite bitcoin? Bitcoin slides below ninety thousand is crypto 0:04:38.240 --> 0:04:42.080 sell off gathers steam To me, I know you're recently 0:04:42.080 --> 0:04:46.080 at with a piece and CFR on the crypto. I 0:04:46.200 --> 0:04:48.600 kind of just view bitcoin is just a sense of 0:04:49.400 --> 0:04:53.479 risk appetite out there in the marketplace. That's it is. 0:04:53.520 --> 0:04:55.120 Are we saying risk off a little bit here? 0:04:55.240 --> 0:05:00.799 Yeah, I mean it's Bitcoin correlates very well tech stocks, 0:05:00.839 --> 0:05:02.760 which is not surprising. At the end of the day. 0:05:03.080 --> 0:05:07.960 Cryptocurrencies are a form of fintech. So when you see, 0:05:08.200 --> 0:05:10.960 you know, the mag seven come down, it's not shocking 0:05:11.000 --> 0:05:14.720 to me to see Bitcoin come down. If that sell off, 0:05:14.760 --> 0:05:18.279 if Navidia disappoints tomorrow, I think you see bitcoin going 0:05:18.320 --> 0:05:20.760 down further. But it gets me back to our Treasury 0:05:20.800 --> 0:05:24.719 point earlier. President Trump, in one of his executive orders, 0:05:25.080 --> 0:05:28.400 is very explicitly supporting the development of digital assets and 0:05:28.480 --> 0:05:32.479 crypto and specifically stable coin. And I want to highlight 0:05:32.520 --> 0:05:37.719 this because to the degree stable coins gather momentum, gather assets, 0:05:37.880 --> 0:05:40.960 they're backed by the dollar, ones are backed by treasuries 0:05:41.000 --> 0:05:43.640 and other cash like assets. This is a source of 0:05:43.680 --> 0:05:47.599 demand for treasuries that I think Treasury Secretary Bessent is 0:05:47.680 --> 0:05:50.520 keeping a close eye on tether. Just that one has 0:05:50.520 --> 0:05:53.279 something like one hundred and thirteen billion dollars worth of 0:05:53.440 --> 0:05:55.240 treasury and treasury like securities. 0:05:55.240 --> 0:05:58.560 Today Rebecca Patterson with this of course on your morning 0:05:58.640 --> 0:06:02.720 commute and also YouTube subscribe to Bloomberg podcast growing each 0:06:03.320 --> 0:06:05.800 and every day. Can't say enough about YouTube premium. I'm 0:06:05.839 --> 0:06:09.680 reading the book Mark Richard's book on YouTube and YouTube premium. Sure, 0:06:09.839 --> 0:06:11.719 I'm glad I did. It's sort of slick, you know, 0:06:12.440 --> 0:06:16.000 and all that. Let's go back to JP Morgan investmers trust. 0:06:16.400 --> 0:06:20.039 Is there an underlying to bitcoin? Please inform me where's 0:06:20.600 --> 0:06:25.440 where's the underlying to support a theory of bitcoin? 0:06:26.200 --> 0:06:30.560 I mean bitcoin itself to me anyway, remains a speculative asset. 0:06:30.839 --> 0:06:34.400 And I'm not saying that lightly. The Bank for International 0:06:34.440 --> 0:06:38.680 Settlements did a really detailed report about a year and 0:06:38.680 --> 0:06:42.599 a half ago, it's worth reading, talking about the development 0:06:42.600 --> 0:06:46.239 of crypto, and it highlights, based on a global survey, 0:06:46.279 --> 0:06:50.200 a very detailed global survey, that the bulk of owners 0:06:50.200 --> 0:06:53.880 of bitcoin today are young men under the age of 0:06:53.920 --> 0:06:57.960 thirty five, retail investors and it's a momentum trade. 0:06:58.279 --> 0:07:00.719 Yeah, I should say worldwide foe. So do you see 0:07:00.760 --> 0:07:04.320 me say this on social The leadership here is Raphael 0:07:04.440 --> 0:07:08.359 our au Er at the Bank of International Settlements. He 0:07:08.440 --> 0:07:11.560 has the best Whatever your belief on bitcoin, I mean, 0:07:11.600 --> 0:07:14.240 you know Matt Miller should read it. Yes, if you 0:07:14.280 --> 0:07:17.480 can find his past code to cash show is Rebecca. 0:07:17.600 --> 0:07:21.720 Is this administration? I mean I think President trumpets some point, 0:07:22.000 --> 0:07:26.520 whether it's campaign or where, describe yourself as a crypto president. 0:07:26.760 --> 0:07:29.440 It's just a crypto presidency. Is this something where the 0:07:29.480 --> 0:07:33.320 next four years we can see the US regulatory framework 0:07:33.960 --> 0:07:35.680 support crypto in this country. 0:07:35.760 --> 0:07:38.920 I one hundred percent. I think over the next six 0:07:39.080 --> 0:07:43.040 twelve months we will see regulatory clarity which is going 0:07:43.120 --> 0:07:48.360 to allow more integration between crypto assets and the traditional 0:07:48.360 --> 0:07:51.880 banking system. And I think it probably will get more 0:07:52.240 --> 0:07:55.200 broad adoption, so it won't just be the young men. 0:07:55.400 --> 0:07:58.000 It will be more types of investors. And that's good 0:07:58.040 --> 0:08:02.040 for crypto in that it'll reduce volatility by having more liquidity. 0:08:02.360 --> 0:08:04.680 The risk one needs to watch is that as it 0:08:04.680 --> 0:08:07.520 gets bigger and more integrated, it becomes a source of 0:08:07.560 --> 0:08:10.240 systemic risk. You know, if you have a hack like 0:08:10.280 --> 0:08:13.680 we did this past week in by bit right one 0:08:13.760 --> 0:08:16.720 hundred or sorry, one point five billion dollar hack of 0:08:16.760 --> 0:08:19.480 a cold wallet, which is supposed to be saved. Right, 0:08:19.680 --> 0:08:25.160 cold wallet is off fine, But that happened in the 0:08:25.280 --> 0:08:28.840 United States, we would have contagion and and that. You know, 0:08:28.920 --> 0:08:30.920 it's not just going to be Silicon Valley Bank, it 0:08:30.920 --> 0:08:33.319 would be broader. So that's the thing one needs to 0:08:33.360 --> 0:08:36.080 watch out for. You can have regulation to give them 0:08:36.120 --> 0:08:38.560 the ability to grow and innovate, you still have to 0:08:38.600 --> 0:08:40.320 have a few consumer guardrails there. 0:08:40.440 --> 0:08:42.280 Our listeners and viewers know where I am on this, 0:08:42.360 --> 0:08:44.920 and I think Ms Patterson knows where I am on this. 0:08:45.400 --> 0:08:47.360 So let's cut to the chase. First thing I did 0:08:47.360 --> 0:08:49.720 this morning is from peak to where we are now, 0:08:49.800 --> 0:08:53.120 bit dog is down twenty percent. That's not a currency. 0:08:53.920 --> 0:08:58.080 We've got all sorts of IRA E, TF, Eric Beltchunas, 0:08:58.200 --> 0:09:01.439 black Rock, this, that, and the other. They're doing it. 0:09:02.080 --> 0:09:05.120 What should we say to those people if we pop 0:09:05.200 --> 0:09:08.599 down another ten percent, I mean, horrific bear markets in 0:09:08.640 --> 0:09:11.880 the equity market are negative thirty five percent. If we 0:09:11.960 --> 0:09:17.920 get that in bitcoin and we're not letting everybody have bitcoin, 0:09:18.000 --> 0:09:19.400 what's going to be the outcome? 0:09:19.960 --> 0:09:24.400 Well, again my concern, I think to the degree digital 0:09:24.440 --> 0:09:29.040 assets encourage more financial innovation in the United States, that's great, right, 0:09:29.120 --> 0:09:32.840 Our financial system is creative and broad and deep, and 0:09:32.880 --> 0:09:35.360 that helps the US economy. What we need to be 0:09:35.440 --> 0:09:38.640 mindful of is that the pool of people today, not 0:09:38.679 --> 0:09:41.360 in the future, but today who are trading bitcoin and 0:09:41.400 --> 0:09:46.160 these currencies aren't necessarily aware of how to save for 0:09:46.400 --> 0:09:50.320 retirement in a safe, methodical way. This is not an 0:09:50.679 --> 0:09:55.200 easy path to retirement riches. And if they lose their money, 0:09:55.200 --> 0:09:58.199 they have less ability to buy a home to invest 0:09:58.240 --> 0:10:02.440 for the longer term understanding the volatility of what they're buying. 0:10:03.040 --> 0:10:03.280 You know. 0:10:03.440 --> 0:10:07.400 That's I hope that these cryptocurrent companies do a lot 0:10:07.440 --> 0:10:11.480 more education going forward to help these people invest in 0:10:11.520 --> 0:10:14.440 these assets wisely. Right now, I don't see a lot 0:10:14.480 --> 0:10:15.360 of evidence of that. 0:10:16.240 --> 0:10:18.880 Paul Out on YouTube live chat, Thank you. The live 0:10:18.960 --> 0:10:23.120 chat can be very smart. Subscribe to Bloomberg Podcasts. This 0:10:23.160 --> 0:10:24.920 guy one word tulips. 0:10:27.040 --> 0:10:30.320 One of the things that is the regulatory environment. Like 0:10:30.520 --> 0:10:33.480 in the last administration, the bad administration, Gary Ginster. I 0:10:33.559 --> 0:10:36.440 expected him, and I think a lot of people did that. 0:10:36.559 --> 0:10:39.240 A he understood crypto and B he was going to 0:10:39.240 --> 0:10:42.320 take a forceful hand and kind of pushing the regulatory 0:10:42.360 --> 0:10:46.240 framework forward, which most participants are asking for. Yes, Yes, 0:10:46.320 --> 0:10:49.600 he did not, really what do we know about this administration, 0:10:49.640 --> 0:10:51.000 the Trump administration. 0:10:50.559 --> 0:10:55.400 Well, there's In the last administration there was some debate, 0:10:55.520 --> 0:10:57.920 fight whatever word you want to use, between the different 0:10:57.960 --> 0:11:02.120 regulatory agencies on who would be the lead on digital assets. 0:11:02.480 --> 0:11:05.360 I think in this administration we're likely to see a 0:11:05.440 --> 0:11:09.880 lighter touch, probably led by the CFTC rather than the SEC. 0:11:10.960 --> 0:11:14.319 I think we'll get some legislation from Congress through probably 0:11:14.360 --> 0:11:17.640 in the next few months, which will also create a 0:11:17.720 --> 0:11:21.840 clear path. And these companies need it, They deserve it right. 0:11:22.000 --> 0:11:23.800 They need to know the rules of the road, and 0:11:23.840 --> 0:11:26.280 the banks and other asset managers need to know the 0:11:26.360 --> 0:11:29.040 rules of the road. So I do think this administration 0:11:29.120 --> 0:11:31.760 is going to be incredibly helpful on that front. Again, 0:11:32.200 --> 0:11:34.360 my hope and my ask if I could, if I 0:11:34.400 --> 0:11:36.480 could be there in the White House today, would be, 0:11:36.720 --> 0:11:40.440 please don't forget some consumer protection, some consumer guardrails. 0:11:40.600 --> 0:11:42.880 Do you have in your head a price of bitcoin 0:11:43.080 --> 0:11:47.880 south where everybody starts wringing their hands. I mean, we're 0:11:48.040 --> 0:11:51.439 eighty nine thousand, is it eighty? Is it fifty? I 0:11:51.480 --> 0:11:52.679 mean I have no idea. 0:11:52.760 --> 0:11:57.640 So my worst case scenario, a realistic worst case scenario, 0:11:57.720 --> 0:12:01.480 would be that we get some disappointment out of one 0:12:01.480 --> 0:12:04.040 of the big tech companies in the video, whoever it is, 0:12:04.080 --> 0:12:08.199 it doesn't matter, and we get more of a concerted 0:12:08.280 --> 0:12:12.560 sell off, maybe in response to tariffs China puts some 0:12:12.720 --> 0:12:16.480 holds on US tech companies acting in China. Those sorts 0:12:16.480 --> 0:12:19.240 of maneuvers, you get a bigger sell off in tech, 0:12:19.280 --> 0:12:23.400 which is not impossible given valuations, given ownership, and that 0:12:23.520 --> 0:12:27.720 contagion pulls down cryptocurrencies in a meaningful way because these 0:12:27.720 --> 0:12:30.800 investors own crypto and they own meme stocks, and they 0:12:30.800 --> 0:12:32.600 own a lot of tech, and so they get hit 0:12:32.640 --> 0:12:35.360 on both fronts. That could get some momentum and pull 0:12:35.400 --> 0:12:38.760 down the broader market. I don't know if anyone buys 0:12:38.800 --> 0:12:40.800 that dip, because they just need to be covering their 0:12:40.840 --> 0:12:41.800 losses at that point. 0:12:42.080 --> 0:12:45.120 Well again, and the retailization of this is where I 0:12:45.120 --> 0:12:48.080 have my radar. Rebecca. Thank you so much, Rebecca Patterson, 0:12:48.400 --> 0:12:50.360 way too early. Thank you so much for coming in. 0:12:51.120 --> 0:12:53.280 Were the consol and foreign relations and all of her 0:12:53.320 --> 0:12:56.280 work on Wall Street, particular comments and the dollar. I'll 0:12:56.280 --> 0:13:00.640 try to get out the Bank of International Settiment essays 0:13:00.679 --> 0:13:05.359 from Raphael Hour and Company. They're absolutely brilliant very sobering 0:13:05.760 --> 0:13:09.960 and is mss Patterson mentioned the depth of their research. 0:13:15.400 --> 0:13:19.000 You're listening to the Bloomberg Surveillance Podcast. Catch US Live 0:13:19.040 --> 0:13:22.240 weekday afternoons from seven to ten am Eastern Listen on 0:13:22.280 --> 0:13:25.960 Applecarplay and Android Otto with the Bloomberg Business app, or 0:13:26.120 --> 0:13:27.679 watch US live on YouTube. 0:13:27.800 --> 0:13:30.760 Joining us now here with the markets lifting a little bit? 0:13:31.440 --> 0:13:34.480 Is with our question our conversation of the day. There 0:13:34.520 --> 0:13:38.080 are mysteries out there, including mysteries of what is going 0:13:38.080 --> 0:13:40.640 on in the Kremlin. I have forever and ever been 0:13:40.720 --> 0:13:45.840 humbled by me getting the yeltsin call so wrong. Angela's 0:13:45.880 --> 0:13:49.520 stent is definitive on this senior fellow at Brookings and 0:13:49.559 --> 0:13:52.559 at Georgetown as well in her book Putin's World is 0:13:52.600 --> 0:13:55.800 my book of the year, A long three years ago, 0:13:56.360 --> 0:13:59.680 Angela Stent, with great respect for your decades of work. 0:13:59.720 --> 0:14:02.200 I saw the headline, I believe, in the Washington Post 0:14:02.960 --> 0:14:06.800 that said, basically, the United States sides with Russia within 0:14:06.840 --> 0:14:10.600 the United Nations. I'm making a generalization there, folks. What 0:14:10.679 --> 0:14:12.360 did you think when you saw that? What do you 0:14:12.400 --> 0:14:15.960 observe to your work? Marshall Goldman's work all the way 0:14:16.000 --> 0:14:20.120 back through the decades to see a headline America sides 0:14:20.320 --> 0:14:20.960 with Russia. 0:14:22.400 --> 0:14:25.600 Well, Tom, this was truly shocking. I mean, who did 0:14:25.640 --> 0:14:29.840 we veto the resolution condemning Russia with our good friends 0:14:30.200 --> 0:14:37.080 North Korea, Russia, Yelorus, Syria, the Central African Republic, Nicaragua. 0:14:37.200 --> 0:14:41.640 I won't go on. Even China and Iran abstained from 0:14:41.680 --> 0:14:45.480 that vote. So Ronald Reagan would be turning in his grave, 0:14:45.600 --> 0:14:50.560 as would many others. It's really quite remarkable. And if 0:14:50.600 --> 0:14:53.160 you think of what the US has stood for, you know, 0:14:53.200 --> 0:14:55.480 for the past eighty years, since the end of World 0:14:55.520 --> 0:15:00.000 War Two, through the Cold War, through the post Soviets 0:15:00.080 --> 0:15:05.200 Soviet era, it's quite remarkable that we veto a resolution 0:15:05.600 --> 0:15:07.840 that condemns the Russian invasion of Ukraine. 0:15:08.080 --> 0:15:09.760 What should Marco Rubio do? 0:15:12.200 --> 0:15:15.160 I think he's in a very difficult position. We know 0:15:15.400 --> 0:15:18.720 what he has said before he became Secretary of State 0:15:18.760 --> 0:15:22.280 about Russia, but right now all of the officials in 0:15:22.320 --> 0:15:27.040 the Trump administration are repeating the same line. It's complicated 0:15:27.120 --> 0:15:31.000 Russia was provoked, so you know, if he wants to 0:15:31.000 --> 0:15:36.000 sustain his job, he presumably has to repeat those lines too. 0:15:37.000 --> 0:15:40.760 Angelus, should you mentioned eighty years of precedent? US policy 0:15:40.840 --> 0:15:44.400 visa VI the former Soviet Union in Russia. Should we 0:15:44.480 --> 0:15:49.320 be surprised that this has changed literally on a dime, 0:15:49.960 --> 0:15:55.280 and we've had no real, I guess, opposition from anywhere 0:15:55.320 --> 0:15:58.360 in the US government to this policy. Should we be 0:15:58.400 --> 0:15:59.960 surprised that it changed so quick? 0:16:01.520 --> 0:16:04.600 I think we should be surprised by the rapidity. I mean, 0:16:04.640 --> 0:16:07.640 we knew from President Trump's first term that he admires 0:16:07.680 --> 0:16:10.520 Putin that he wanted to do a deal with Russia. 0:16:10.560 --> 0:16:13.040 But to have this happen so quickly, within a month 0:16:13.320 --> 0:16:16.360 of him coming to power and with everyone, the top 0:16:16.400 --> 0:16:20.920 officials and his administration repeating this line, we should be Now, 0:16:20.960 --> 0:16:25.640 there are Republicans in Congress who have pushed back against this, 0:16:25.960 --> 0:16:28.560 but they're not that many of them, and I think, 0:16:28.680 --> 0:16:31.240 you know, we have to wait and see whether there's 0:16:31.280 --> 0:16:34.080 going to be more position to this line. The Krumlin 0:16:34.160 --> 0:16:37.080 is delighted. I was just reading the remarks of the 0:16:37.080 --> 0:16:41.200 Press Secretary Dmitri Peskov. You know, finally the United States 0:16:41.600 --> 0:16:45.080 has seen since and has understood, you know, what the 0:16:45.120 --> 0:16:46.200 real situation is. 0:16:47.000 --> 0:16:50.080 I think of at dawn we slept the failure of 0:16:50.120 --> 0:16:55.000 our intelligence of Pearl Harbor in nineteen forty one, Angelus stent, 0:16:55.080 --> 0:16:58.040 we were sobered by the failure of our intelligence with 0:16:58.160 --> 0:17:01.680 the collapse of the Soviet Union. Would you suggest that 0:17:01.720 --> 0:17:05.120 we have any clue what's going on at the Kremlin 0:17:05.600 --> 0:17:07.280 or within mister Putin's orbit? 0:17:08.880 --> 0:17:11.919 I mean, I think we have some clue. We know 0:17:12.359 --> 0:17:16.040 that they are absolutely delighted about what's happened recently. They're 0:17:16.080 --> 0:17:20.120 even talking about that publicly. We have a pretty good 0:17:20.119 --> 0:17:24.719 idea that they're not interested in a peace settlement in Ukraine, 0:17:25.000 --> 0:17:28.480 but they're certainly interested in improved ties to the US. 0:17:28.680 --> 0:17:32.240 Let's restore relations, Let's have a summit. Let's have President 0:17:32.240 --> 0:17:36.520 Trump visit for Victory Day May nineteen eighty years since 0:17:36.520 --> 0:17:40.879 the end of World War Two, visit so that we know. 0:17:42.040 --> 0:17:44.760 Do we know what goes on in the very inner circles? 0:17:45.000 --> 0:17:48.200 Of course not, but we can get some things by 0:17:48.200 --> 0:17:48.880 what they've said. 0:17:49.200 --> 0:17:51.800 This. You know, this is why we love having doctor 0:17:51.840 --> 0:17:55.080 stenn On. Folks. Could you imagine the President of the 0:17:55.200 --> 0:18:00.720 United States in Moscow for those celebrations of Russian might 0:18:01.600 --> 0:18:05.760 in May? Yep, I've never once framed that that miss 0:18:05.880 --> 0:18:07.359 Angela's stun only can. 0:18:07.240 --> 0:18:09.080 Do angel what do you I can? 0:18:09.600 --> 0:18:09.800 Yep? 0:18:10.080 --> 0:18:13.040 I can Angel, What do you think the response will 0:18:13.080 --> 0:18:16.440 be should be from rest of the world. I'll just 0:18:16.520 --> 0:18:18.320 leave it there. Rest of the world as it relates 0:18:18.359 --> 0:18:21.240 to this changing US position visa Vive Russia. 0:18:22.240 --> 0:18:24.880 Well, we've just had President Macron here, we have Prime 0:18:24.880 --> 0:18:28.399 Minister Starma coming tomorrow. The Europeans are really trying to 0:18:28.400 --> 0:18:32.680 push back. President Macron did a good job, a valiant 0:18:32.720 --> 0:18:35.320 job of trying to persuade President Trump that you know, 0:18:35.400 --> 0:18:38.840 we have to work together and that you know, the 0:18:39.440 --> 0:18:43.840 US isn't getting stiffed by Ukraine. He in fact corrected 0:18:44.080 --> 0:18:48.080 Trump about loans versus money given to Ukraine. I mean, 0:18:48.119 --> 0:18:50.719 the Europeans are trying their best, and they've come to 0:18:50.760 --> 0:18:53.000 realize that they're going to be alone in this. If 0:18:53.000 --> 0:18:55.960 they want to support Ukraine going forward, they're going to 0:18:56.040 --> 0:18:58.880 have to do without the United States. Now, for those 0:18:58.920 --> 0:19:02.119 countries that have stayed, which is a large number yesterday 0:19:02.760 --> 0:19:05.159 in the General Assembly, you know they're just going to 0:19:05.200 --> 0:19:08.480 shrug and say this is a European conflict and it 0:19:08.520 --> 0:19:12.000 really doesn't touch us that much. But certainly the Europeans, 0:19:12.280 --> 0:19:15.800 and I would say our Asian allies are very concerned. 0:19:15.440 --> 0:19:20.359 To extend Angel extent the list of US in Russia, 0:19:20.520 --> 0:19:26.400 is well, Israel, Haiti, Hungary, Palau, Marshall Islands, Burkina, Fasso, 0:19:27.480 --> 0:19:32.359 African nations that can't pronounce Belarus, North Korea, Syria, Mali 0:19:32.600 --> 0:19:37.399 and Nicaragua. What is the ramification of our diplomacy? To 0:19:37.440 --> 0:19:41.960 Paul's good question moments ago, how do we diploma how 0:19:42.000 --> 0:19:46.520 do we do diploma Kissinger diplomacy around the world? Given 0:19:46.560 --> 0:19:47.520 that beauty. 0:19:47.200 --> 0:19:53.160 List, Well, I think that the Trump administration is still believing, 0:19:53.240 --> 0:19:56.399 for instance, that if we have this thro aproshmao with Russia, 0:19:56.760 --> 0:20:00.680 Russia will decide to distance itself from China and will 0:20:00.720 --> 0:20:04.320 reverse course. I think that's highly unlikely, but I think 0:20:04.359 --> 0:20:06.960 that's one thing that's going on here. And I think 0:20:06.960 --> 0:20:10.520 it's also the US trying to show to those countries 0:20:10.560 --> 0:20:13.360 that supported US, and I guess those who have stained 0:20:14.080 --> 0:20:17.159 that you know, we're not necessarily taking sides in this. 0:20:17.560 --> 0:20:20.360 We recognize that Russia is a great power and we're 0:20:20.400 --> 0:20:21.879 going to try and do something different. 0:20:22.400 --> 0:20:24.920 Yeah, my findest hope as a Secretary of State or 0:20:25.000 --> 0:20:29.080 rite Angelus stents Putin's world next, thank you so much 0:20:29.119 --> 0:20:32.760 for your commitment to Bloomberg surveillance. She is with the 0:20:32.800 --> 0:20:33.840 Brookings Institution. 0:20:34.320 --> 0:20:38.199 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:20:38.280 --> 0:20:41.560 starting at seven am Eastern on Applecarplay and Android Auto 0:20:41.720 --> 0:20:44.680 with the Bloomberg Business App. You can also listen live 0:20:44.720 --> 0:20:48.320 on Amazon Alexa from our flagship New York station. Just 0:20:48.359 --> 0:20:50.840 say Alexa play Bloomberg eleven thirty. 0:20:51.000 --> 0:20:53.600 Joining us now, and this is really important. Calvincy joins 0:20:53.640 --> 0:20:57.760 us right now with BMP PERI by the BNP PERI 0:20:57.840 --> 0:21:02.399 by Heritage is a carefully constructed, cautious view on the 0:21:02.440 --> 0:21:06.000 economy back to Juliet Cardnido, back at least fifteen years 0:21:06.080 --> 0:21:09.840 or so in the sum total of your work there, 0:21:10.160 --> 0:21:13.480 do you see a dampening of GDP off of all 0:21:13.480 --> 0:21:15.120 the events going on right now? 0:21:15.520 --> 0:21:17.159 Thanks so much for having me, Tom. This is the 0:21:17.240 --> 0:21:19.320 question that every client is asking us. We're getting so 0:21:19.400 --> 0:21:23.560 many different policies from President Trump. The aggregate of these policies, 0:21:23.600 --> 0:21:27.880 when we think about immigration policy, especially trade policy, should 0:21:27.920 --> 0:21:30.200 we think begin to slow growth down in the second 0:21:30.240 --> 0:21:32.640 half of the year. But even more importantly than that, 0:21:33.040 --> 0:21:35.240 where we're very out of consensus is that we think 0:21:35.240 --> 0:21:38.879 that these policies are going to be generating significant amounts 0:21:38.920 --> 0:21:41.640 of inflation. So despite that slower growth in the second 0:21:41.680 --> 0:21:43.680 half of the year, it may be a tough spot 0:21:43.720 --> 0:21:45.840 for the FED and the FED we think, so keep 0:21:45.920 --> 0:21:47.200 rates on holds for all of this year. 0:21:48.119 --> 0:21:50.359 Is we haven't done this recently? I mean, this is 0:21:50.400 --> 0:21:53.879 a whole new world after all. Is what you just 0:21:54.000 --> 0:21:56.480 laid out good for business? Is it good for Brian 0:21:56.560 --> 0:21:59.280 moynan at Bank of America. 0:21:59.440 --> 0:22:02.359 We think that this is a really interesting environment in 0:22:02.359 --> 0:22:05.800 that Trump one point zero differed from Trump two point 0:22:05.880 --> 0:22:08.920 zero in one really major way, and that is Trump 0:22:08.960 --> 0:22:11.280 one point zero was very combative with the FED, trying 0:22:11.320 --> 0:22:13.479 to get the Fed to lower rates at every single 0:22:13.880 --> 0:22:17.040 point that they could. This time, the administration is really 0:22:17.040 --> 0:22:19.119 focusing on trying to control the part of the yield 0:22:19.160 --> 0:22:22.000 curve that they can exert more control over the back 0:22:22.119 --> 0:22:24.439 end of the curve. And with that, we think that 0:22:24.480 --> 0:22:26.879 we should be seeing lower ten year yields relative to 0:22:26.920 --> 0:22:29.320 two yearields this year, which should be good for the 0:22:29.359 --> 0:22:31.560 everyday American. Is that's the part of the US yield 0:22:31.600 --> 0:22:33.560 curve or most people are borrowing at I'll. 0:22:33.440 --> 0:22:34.720