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Speaker 4: We did mention our big story at the sour President
Speaker 4: Trump and President Putin of Russia speaking today in a
Speaker 4: long phone call about ninety minutes on how to bring
Speaker 4: an end to the Russia Ukraine wall. President Putin committed
Speaker 4: to limit Russian attacks on Ukrainian energy assets, but did
Speaker 4: decline to agree to a broader thirty day ceasefire, as
Speaker 4: the United States had sought with more. Let's head to
Speaker 4: the White House into Bloomberg's Tyler Kendall. She's there on
Speaker 4: the lawn of the White House, Tyler, Is this a
Speaker 4: step forward to ending the war between Russia and Ukraine?
Speaker 5: White House would like to paint it as such, But
Speaker 5: importantly you mentioned they are Vladimir Putin falling short of
Speaker 5: backing a thirty day ceasefire fire proposal that the US
Speaker 5: had been hoping for. Importantly, that White House readout goes
Speaker 5: on to say that negotiations will start for a maritime
Speaker 5: ceasefire on the Black Sea, followed hopefully by talks for
Speaker 5: a full seaspire and then a more permanent piece. Importantly,
Speaker 5: I just want to point out that the last time
Speaker 5: Zelenski was here at the White House, that Oval Office
Speaker 5: meeting devolved. He then went to Europe and presented to
Speaker 5: our European allies a similar path that he wanted to
Speaker 5: see a ceasefire in the sea and the sky, as
Speaker 5: he called it. You know, Bloomberg News had been reporting
Speaker 5: that Russia might have been trying to slow roll these
Speaker 5: negotiations earlier this morning, breaking the headline that Vladimir Putin
Speaker 5: would like to see a halt of all weapon flows
Speaker 5: into Ukraine, or, at least, according to sources familiar, the
Speaker 5: halt of US weapon flows into Ukraine. It remains to
Speaker 5: be seen if that is something this White House would
Speaker 5: really get behind, considering just last week it did reverse
Speaker 5: its own halt on US military assistance and intelligence sharing
Speaker 5: in order to get Ukraine to sign on to this
Speaker 5: thirty day piece proposal. Carol just quickly still a big questions,
Speaker 5: particularly considering that this readout does say that both countries
Speaker 5: want a lasting piece. That is raising questions about what
Speaker 5: that really looks like. Considering that we know that our
Speaker 5: European allies and Ukraine have been asking this White House
Speaker 5: what sort of firmer security guarantees they're willing to provide.
Speaker 1: Hey, Tyler, just very belief briefly fifteen seconds. Do we
Speaker 1: know what Ukraine would be giving up in exchange for
Speaker 1: the ceasefire?
Speaker 5: Well, that really remains to be seen at this point.
Speaker 5: They have said that they are willing to negotiate, but
Speaker 5: they need Russia to also come to the table. Ukraine
Speaker 5: has asked the US to ramp up sanctions if they
Speaker 5: do not get this thirty day cease fire into effect
Speaker 5: as quickly as possible.
Speaker 6: All Right, We're going to.
Speaker 4: Leave it on that note, Hey, Tyler, thank you so much.
Speaker 4: Tyler Kendall, Bloomberg News reporter there on the lawn of
Speaker 4: the White House. All Right, let's stay with this story
Speaker 4: because back with us for someone to share her expertise
Speaker 4: on Russia. Its longtime leader is doctor Angela Stent. She's
Speaker 4: senior fellow at the Brookings Institution, a member of the
Speaker 4: Council on Formulation, a former National intelligence Officer for Russia
Speaker 4: and Eurasia at the National Intelligence Council. And she's also
Speaker 4: the author of Putin's World, Russia against the West and
Speaker 4: with the Rest, which I am guessing she is probably
Speaker 4: working on updating. She joins us from Washington, DC, Doctor Stent.
Speaker 4: Always good to have you with Tim and myself. First
Speaker 4: of all, I'm just curious about the optics of how
Speaker 4: we got to today and whether or not you see
Speaker 4: this this conversation and the headlines that we have seen
Speaker 4: out of this conversation between President Trump and President Putin?
Speaker 6: Is this progress? Is this a step forward?
Speaker 7: So the way we go, well, thank you for having
Speaker 7: me on again. The way we got here is right.
Speaker 7: The President Trump said during the campaign that he was
Speaker 7: going to end this war in twenty four hours. It
Speaker 7: would never have started had he been president at the time.
Speaker 7: It took a little more than twenty four hours to
Speaker 7: get this particular phone call with Putin, although we know
Speaker 7: that he had previous ones after his election, and so
Speaker 7: he got the Ukrainians by putting pressure on them to
Speaker 7: agree to a thirty day total cease fire, and that's
Speaker 7: what he said he wants from the Russians. I've just
Speaker 7: been reading the Russian readoubt the Kremlins readout of the talks.
Speaker 7: It's a little different from the one that we got
Speaker 7: from the US side, and it mentions that Trump asked
Speaker 7: Putin for a cease fire on hitting energy and infrastructure targets,
Speaker 7: and it said that, you know, Putin was favorably inclined
Speaker 7: to it, it didn't actually necessarily say that he agreed
Speaker 7: with it. And a lot of it had to do
Speaker 7: with the restoration of US Russian relations, and apparently they're
Speaker 7: going to organize hockey games between Russia and the United States.
Speaker 7: But the thing that's most notable in the Russian one,
Speaker 7: and I think your correspondent already alluded to it, is
Speaker 7: that Putin's saying that they have to get to the
Speaker 7: fundamental causes, the root causes of why this war broke out,
Speaker 7: and that's going to go right back to NATO, to
Speaker 7: Ukraine wanting to be part of the West, and to
Speaker 7: Putin essentially saying that can happen. So I will be
Speaker 7: curious to see how this works out. I'd also like
Speaker 7: to know how they're going to enforce this very limited
Speaker 7: but still important ceasefire. Don't forget Russia has destroyed seventy
Speaker 7: percent of Ukraine's electricity production during this war. How are
Speaker 7: they going to monitor this and then what comes after it?
Speaker 1: But Angela doesn't seem like to you that it is
Speaker 1: indeed the beginning of the end of this war.
Speaker 7: It may be, I think what it's certainly the beginning
Speaker 7: of the US and Russia established, re establishing relations, and
Speaker 7: we've heard that from President Trump is a big Is
Speaker 7: it the beginning of the end of this war? I'm
Speaker 7: still I think the jury's out on that. I think
Speaker 7: we have to see how long Putin drags out the
Speaker 7: negotiation before he agrees to a total cease fire. And again,
Speaker 7: he hasn't really shown that he's interested in ending this
Speaker 7: war anytime soon. He's much more interested in restoring these
Speaker 7: relations with the US and ending his isolation.
Speaker 6: That's interesting.
Speaker 4: The other thing I wonder, Angeline, something that we've talked
Speaker 4: about with you before. I mean, are there ever really
Speaker 4: any guarantees that President Pultant won't try to invade Ukraine
Speaker 4: or another country again? And how does the outcome of
Speaker 4: this negotiate negotiation for an end to the war kind
Speaker 4: of determine the likelihood of that happening again?
Speaker 7: So as President Zelensky, unfortunately for him, pointed out in
Speaker 7: the Oval Office when he then got the president, the
Speaker 7: vice president very angry with him, Russia has violated every
Speaker 7: cease fire it's signed with Ukraine, certainly since the annexation
Speaker 7: of Primere in twenty fourteen. And Russia has also violated
Speaker 7: every treaty it's signed with Ukraine since its independence. So
Speaker 7: I think one has to be very skeptical. And this
Speaker 7: is of course why President Zelenski, again unfortunately for him,
Speaker 7: in the Oval Office, wanted to talk about security guarantees,
Speaker 7: because without very robust security guarantees, there's absolutely no reason
Speaker 7: to believe that Russia wouldn't try and invade Ukraine again.
Speaker 7: The best security guarantee we know would be Ukraine joining NATO.
Speaker 7: That's been taken off the cards now by the Trump administration,
Speaker 7: but it needs these guarantees, and the Europeans, the French,
Speaker 7: the British, and other European countries have said they're willing
Speaker 7: to provide security guarantees, boots on the ground to be
Speaker 7: a stabilizing force stabilization force once the war ends, but
Speaker 7: they say they need American backup for this, and that's
Speaker 7: something which the Trump administration has not committed itself to Angela.
Speaker 1: Let's say this is the beginning of the end of
Speaker 1: the war, and it does. And what does Russia look
Speaker 1: like on the other side of this is is it
Speaker 1: stronger or weaker than it was? Is it more? Is
Speaker 1: Putin more emboldened than he was pre invasion?
Speaker 7: Yeah, So what it looks like is, I mean, the
Speaker 7: economy is not in good shape and it's going to
Speaker 7: get worse the longer this war goes on for Putin.
Speaker 7: So if the war ends, that would and obviously if
Speaker 7: the sanctions are removed, which they would be if the
Speaker 7: war ends at some point, then that would be very
Speaker 7: beneficial for Putin. But yes, he comes out of this
Speaker 7: looking stronger. He invaded another country and provoked and presumably,
Speaker 7: I mean, we have to see if Ukraine has to
Speaker 7: make territorial concessions to Russia. He will then you know,
Speaker 7: have taken twenty percent of Ukraine. And unless there are
Speaker 7: these very robust security guarantees, he could invade again. And
Speaker 7: now he'll be in you know, he'll be invited back
Speaker 7: to the United States. Maybe the Europeans won't want to
Speaker 7: deal with him for any time soon, but Russia's actually
Speaker 7: strengthened its international position in many ways while it's been
Speaker 7: fighting this rule.
Speaker 4: You know, I think about something Tim brought up, and
Speaker 4: it just reminded us. Was it a debate where Mitch
Speaker 4: Romney said, who was asked, you know, I guess or
Speaker 4: the candidates, was it two thousand and eight or before that,
Speaker 4: twenty twelve, and what was the biggest right, what was
Speaker 4: the biggest concern or national security concern for the United States?
Speaker 6: He said Russia and was kind of laughed off the stage.
Speaker 4: But is there some credibility Angela in President Trump trying
Speaker 4: to create some kind of economic cooperation or more economic
Speaker 4: cooperation between the US and Russia to create a different
Speaker 4: future and relationship with Russia going quote, and is there
Speaker 4: some good to that?
Speaker 7: Well, in the nineteen nineties, there were a lot of
Speaker 7: American firms that were very active in Russia. Energy companies,
Speaker 7: launch firms, small funds. They were making money and they
Speaker 7: were doing quite well, and yet the political relationship between
Speaker 7: the US and Russia was very difficult. There were a
Speaker 7: couple of high points after nine eleven when the US
Speaker 7: and Russia with Putin, you know, worked together in terms
Speaker 7: of the beginning of the US campaign in Afghanistan. Also,
Speaker 7: I should point out that there were thousands of American
Speaker 7: business people in Ukraine when Russia invaded. That didn't stop
Speaker 7: Russia from invading. So of course there are arguments to
Speaker 7: build up economic ties with Russia, but I think history
Speaker 7: shows us and even the experience of the last thirty years.
Speaker 7: Putin always likes to separate economics from politics, and you
Speaker 7: can have a good or a strong economic relationship with
Speaker 7: Russia and it doesn't seem to have that much impact
Speaker 7: on what Russia does politically or militarily, particularly under Putin.
Speaker 1: You know, I asked what Russia would look like after this,
Speaker 1: but what about Ukraine? Because this is the country that
Speaker 1: three years ago we were talking to you and so
Speaker 1: many other people thought this war would be over just
Speaker 1: in a matter of hours, a matter of days, a
Speaker 1: matter of weeks. But look what Ukraine has been able
Speaker 1: to do to defend itself. What does Ukraine look like
Speaker 1: on the other side.
Speaker 8: Well, you know, on.
Speaker 7: The good side, Ukraine now has the strongest and largest
Speaker 7: army in Europe. It's developed very sophisticated technical technological capabilities.
Speaker 7: It's been using electronic warfare, it's much more sophisticated than that.
Speaker 7: On the other hand, of course, its economy has suffered greatly,
Speaker 7: and you know, it's had cities and villages obliterated by
Speaker 7: the Russians, so it's going to need an enormous amount
Speaker 7: of economic assistance and investment if it is to recover.
Speaker 7: It's also lost a large number of soldiers. We don't
Speaker 7: quite know, but I think for both Ukraine and Russia
Speaker 7: it's in the hundreds of thousands. And it also has
Speaker 7: millions of Ukrainians are now living abroad because of the war.
Speaker 7: They need to come back and they need to help
Speaker 7: rebuild the country. So economically it's it's, you know, in
Speaker 7: very poor shape, even though other aspects militarily it's better off,
Speaker 7: but it will still be in a very fragile state
Speaker 7: at the end of the war.
Speaker 6: Angela.
Speaker 4: You know, I was thinking about this a lot, like
Speaker 4: what is the relationship between President Putin and President Trump?
Speaker 4: And I know we've talked with you about this before.
Speaker 6: And what is it? You know, is it is Russia
Speaker 6: great power?
Speaker 4: Is it a great economy? You already referenced that it wasn't.
Speaker 4: They're businesses, their alliances, their leadership.
Speaker 6: I mean, is.
Speaker 4: It an economic and political model to emulate. I'm asking
Speaker 4: a little bit facetiously, but I'm trying to understand, you
Speaker 4: know why there is this relationship.
Speaker 7: Well, it's not an economic model to emulate because it's
Speaker 7: essentially a hydrocon an exporter. It doesn't have a very
Speaker 7: modern economy. You know, I always when I teach my students,
Speaker 7: I say, tell me how many products in your home
Speaker 7: are from China? On how many from Russia. Well you
Speaker 7: know the answer to that, there many of them from China,
Speaker 7: they're on from Russia. So it earns a lot of
Speaker 7: money by selling hydrocarbons, but it doesn't have really a
Speaker 7: modern economy. It has a shrinking population. It has a
Speaker 7: major demographic problem, and it's had that ever since the
Speaker 7: fall of the Soviet Union and even before then. But
Speaker 7: militarily it is a superpower, and that's in history. Russia
Speaker 7: has always been a great power because of its military,
Speaker 7: not because of its economy. And so it is you know,
Speaker 7: I think the largest nuclear power, the US and Russia,
Speaker 7: the two nuclear superpowers. The Russians have more warheads than
Speaker 7: we do, and so in that sense it's a great power.
Speaker 7: And because of the hydrocarbons and of course it's location.
Speaker 7: It's the largest country in the world world sitting astride
Speaker 7: Europe in Asia, so it has many strong endowments, but
Speaker 7: economically it really does need to modernize.
Speaker 1: Hey, just thirty seconds left, doctor sten. It does raise
Speaker 1: the question, though, how the rest of the world keeps
Speaker 1: putin in check, given the strength of its military and
Speaker 1: given his ambitions, how does that happen? Well, we know that.
Speaker 7: He has ambitions that go beyond Ukraine, and that's why
Speaker 7: the Europeans are very worried about it. And now you
Speaker 7: see France offering you a nuclear umbrella to the rest
Speaker 7: of Europe. You see some European countries, even Poland, talking
Speaker 7: about should they acquire nuclear weapons. So this is one
Speaker 7: of the impacts of this brutal war is at least
Speaker 7: country countries in Europe reminding themselves that they're still vulnerable
Speaker 7: to a potential Russian invasion, and some of them are
Speaker 7: talking about the possibility of a war with Russia within
Speaker 7: the next five years.
Speaker 4: Bottom line ten seconds. This is a good this is
Speaker 4: a good move. This is some progress.
Speaker 7: On the call. Yes it is, I mean hopefully if
Speaker 7: they implement this for us ceas file. Of course it's
Speaker 7: a good move.
Speaker 4: All right, my guests, is we're going to be coming
Speaker 4: back to you a lot more still on this, and
Speaker 4: we so appreciate that we can.
Speaker 6: Angela, thank you so much.
Speaker 4: Doctor Angela Stent, Senior Fellow at the Brookings Institution, a
Speaker 4: member of the Council on Foreign Relations, and her book
Speaker 4: author of Putin's World.
Speaker 6: Be sure to check it out.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: Or watch US live on YouTube.
Speaker 4: One of the things we wanted to talk about is,
Speaker 4: of course, the upcoming FED decision tomorrow. We did see
Speaker 4: the Federal Reserve Bank of Atlanta's gpt GDP now index
Speaker 4: suggesting US gross domestic product will retract one point seven
Speaker 4: six percent, so a negative one point seven six percent
Speaker 4: the first quarter versus a negative two point zero six
Speaker 4: percent and its previous release on March seventeenth, So you've
Speaker 4: got that going on. Meantime, US Treasury Secretary Scott Bessett, well,
Speaker 4: he doesn't seem too worried about US growth.
Speaker 6: He spoke on Fox Business this morning.
Speaker 9: The underlying economy is healthy. There is no reason we
Speaker 9: have to have a recession. Can we have a pause
Speaker 9: as we go from this incredible level of government spending
Speaker 9: which is just unsustainable?
Speaker 4: That, of course is US Treasury Secretary Scott Besson earlier
Speaker 4: today on Fox Business. So let's get into it the
Speaker 4: US economy tomorrow's FED decision. Back with Tim and me
Speaker 4: is doctor Steven Skankee, chief economist advisor at the Wealth Advisor,
Speaker 4: I should say chief economist at the Wealth Advisor kill Point.
Speaker 4: He's also a former US Treasury and White House National
Speaker 4: Security Council staff member. He's out there in Washington, d C.
Speaker 4: And then right here in our New York studio is
Speaker 4: Bloomberg Economics US economist Stuart Paul. Hey, Stuart, I want
Speaker 4: to start with you. The FED is expected to hold
Speaker 4: rate steady this week. Tomorrow's decision really.
Speaker 6: All about the dot plot.
Speaker 10: Is mostly about the dot plot, and beyond what we
Speaker 10: actually get from the media and FOMC members expectations for
Speaker 10: the path of interest rates, we're also going to get
Speaker 10: a few clues about what they expect for the economy
Speaker 10: and what's going to be guiding their interest rate decision.
Speaker 10: So we're also probably going to see a downward revision
Speaker 10: of their expectations for twenty twenty five growth, and we're
Speaker 10: also probably going to see an upward revision of their
Speaker 10: estimates for core PCE inflation for the year ahead. And
Speaker 10: between the two of those, the question is what ends
Speaker 10: up dominating. Is it the cooler growth that will lead
Speaker 10: to more rate cuts? Is it the higher inflation that'll
Speaker 10: keep them on hold. We're expecting the median dot to
Speaker 10: still show two cuts in the year ahead, but if anything,
Speaker 10: the distribution of dots we think will be skewed to
Speaker 10: fewer cuts this year because of that uptick in inflation expectations.
Speaker 1: Steve, is that the focus for you too? The dot plot?
Speaker 1: Is that what you're focused on as well?
Speaker 11: Certainly it is because it gives us some better understanding
Speaker 11: of what they're thinking about. That's sort of first step
Speaker 11: and than what share Powl says and is press conference.
Speaker 11: They've had a lot of disparate information in the various
Speaker 11: Federal Reserve Bank branches and it'll be interesting to see
Speaker 11: how that gets reflected in the board member's expectations.
Speaker 6: Well, and I.
Speaker 4: Guess one of the interesting things too is and you know.
Speaker 4: Let me ask you, Steve, we just know the Treasury secretary.
Speaker 4: It's kind of interesting, you know, saying the underlying economy
Speaker 4: is healthy, no reason that we should have a recession,
Speaker 4: and yet nobody's really ruling it out right.
Speaker 6: Can you ever really rule out a recession?
Speaker 11: Certainly not, because while the economy came into this year
Speaker 11: very strong, and even today with you know, slower than
Speaker 11: trend growth in retail sales and all of the negative
Speaker 11: consumer sentiment that has been causing consumers to pull back
Speaker 11: in their spending, the economy is still robust, The labor
Speaker 11: market is strong, and and yes there's changes at the margin,
Speaker 11: but it would take a lot to tip the economy
Speaker 11: into recession. But at the same time, and I think
Speaker 11: this is what frightens markets the most, is that the President,
Speaker 11: his Treasury secretary, his Commerce secretary have all said that basically,
Speaker 11: they're okay if the market is down and if we
Speaker 11: tip into a recession, they're not worried about it because
Speaker 11: they're they're larger plan is to to reset, reboot, rebuild,
Speaker 11: recalibrate the economy, and they seem to be willing to
Speaker 11: accept that as as a necessary cost. If that should happen.
Speaker 6: I just get to I.
Speaker 4: Just got to say, as you're saying this about, I'm
Speaker 4: seeing Stewart kind of smile a little bit.
Speaker 6: Stuart, you're smiling.
Speaker 10: Why, Well, because I think that policymakers, even in the
Speaker 10: White House, they do about economic outcomes. Of course, they
Speaker 10: say that there's going to be a bit of an
Speaker 10: economic realignment. But if we think back to past presidents,
Speaker 10: we saw George W. Bush inheriting in the first term
Speaker 10: the bursting of the tech bubble. We saw Obama inheriting
Speaker 10: the global financial crisis. S and P five hundred in
Speaker 10: the first let's say one hundred days that they were
Speaker 10: in office was off at most, probably about fifteen percent.
Speaker 10: There's only so much that sort of self inflicted pain
Speaker 10: from policy decisions, policy announcements, tariff imposite, tariffs being imposed
Speaker 10: and then being walked back that the White House can
Speaker 10: really stomach before they feel some pain. The key difference,
Speaker 10: of course, would be that was Bush's first term Obama's
Speaker 10: first term that were running for reelection. If Trump is
Speaker 10: seeing this truly as his last term and not part
Speaker 10: of some broader magma movement, maybe Steve is right. Maybe
Speaker 10: he's a little bit insulated. I think that policymakers tend
Speaker 10: to be responsive to public sentiment. I think that they
Speaker 10: tend to be responsive to voters.
Speaker 12: And when you only have.
Speaker 10: Let's say, for example, three seats in the Senate that
Speaker 10: are going to be up in twenty twenty six, I
Speaker 10: think that Yeah, I think that it's probably a closer
Speaker 10: call than it might sound. They might be more responsive
Speaker 10: than you're suggesting.
Speaker 1: So what are you saying, Stort. Are you saying that
Speaker 1: policymakers will continue to be responsive or they have this
Speaker 1: insulation because the President is not up for reelection and
Speaker 1: there aren't that many Senate seats that are coming up either.
Speaker 10: I think that they're saying that they're going to be
Speaker 10: They're going to be less responsive than they have been historically.
Speaker 10: I think that there will come a point in time
Speaker 10: where we do get a little bit less rhetoric out
Speaker 10: of the White House and a little bit more of
Speaker 10: a reaction to both the printed data and financial market activity.
Speaker 10: Carol very wisely noted that the FED the Atlanta Fed's
Speaker 10: GDP now cast looks pretty dismal for the first quarter.
Speaker 10: We don't think that it's going to be quite that bad,
Speaker 10: but printing let's say an annualized pace of half of
Speaker 10: one percent in the president's first term. The president's first
Speaker 10: quarter of this term in office is not going to
Speaker 10: be something that's easy to brush off from a public
Speaker 10: sentiment perspective or from a markets perspective.
Speaker 1: Steve, you worked in government, your former US Treasury and
Speaker 1: White House National Security Council staff member, What do you
Speaker 1: make of what Stuart is saying with regard to the
Speaker 1: responsiveness of policymakers.
Speaker 11: Well, the story that they're telling right now, and that
Speaker 11: the President is telling and his cabinet just sort of
Speaker 11: marches in step with him, is that there is going
Speaker 11: to be pain, there is going to be adjustment, and
Speaker 11: he's willing to take that. I think what's different this time,
Speaker 11: and I don't disagree with Stuart that the White House
Speaker 11: and congressional policy making offices elected officials are sensitive and
Speaker 11: they don't want to get hoisted. But I think what's
Speaker 11: different is that this president sees this as his last
Speaker 11: opportunity to do some things that will, in his opinion,
Speaker 11: remake the economy into a better place for the future.
Speaker 11: And anytime you do that, that's going to cause disruption,
Speaker 11: and in fact, a lot of it now. The other
Speaker 11: thing that I think we have to be careful about
Speaker 11: is that they can do a lot of things that
Speaker 11: reduced confidence, lower industrial production, lower consumers spending, and by
Speaker 11: the time they decide they've maybe pushed too hard, they
Speaker 11: probably have already set in motion the process of the
Speaker 11: economy following into a recession.
Speaker 4: Well, and we know, we've heard, we've heard from the
Speaker 4: administration officials it's like, Okay, we're going to do this,
Speaker 4: and then we're going to get the tax cuts, and
Speaker 4: then you know, it's the reverse of the first time around.
Speaker 4: I mean, Stuart, he is said to be remaking the economy,
Speaker 4: but there is pain and if he gets it wrong,
Speaker 4: could we see something problematic and maybe a longer standing recession.
Speaker 6: Just got about thirty seconds.
Speaker 10: We're not expecting so much of a long standing recession.
Speaker 10: We're expecting about one and a half percent full year
Speaker 10: growth for twenty twenty five. That's still about half the
Speaker 10: pace that we saw printed in each of the last
Speaker 10: two years, a bit more than half of that. So
Speaker 10: not really a long standing recession. But it's not exactly
Speaker 10: something that's going to bolster your voting base, and it's
Speaker 10: not something that you can take into the midterms with
Speaker 10: a lot.
Speaker 6: Of confidence, not growth, at least for a little bit
Speaker 6: or less growth.
Speaker 4: Guys, thank you so much, Steve Skanky over at kill Point,
Speaker 4: and of course Bloomberg Economics US economist Stewart Paul.
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Speaker 1: Well, it is time for another edition of Bloomberg Plugged
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Speaker 13: I mean, of course we do electic vehicles, and thanks
Speaker 13: for having make good afternoon, but we do a little
Speaker 13: bit more than electic vehicles with tools and microgrids, and
Speaker 13: I think that's what we have discussed in maybe today
Speaker 13: and how we charge his elected vehicles.
Speaker 1: Okay, so you're watching closely the different types of EV
Speaker 1: charging systems, the different types of batteries. What do you
Speaker 1: make of this bid news? Because look here in the US,
Speaker 1: we're not going to be driving these vehicles anytime soon,
Speaker 1: I assume, unless the President decides to change the way
Speaker 1: that rules are structured around importing Chinese evs. But if
Speaker 1: this is indeed something that can be done, it's a
Speaker 1: game changer for evs.
Speaker 8: Now. No, it's very cool, and I also read it
Speaker 8: to data.
Speaker 13: It's very cool to add two hundred and fifty miles
Speaker 13: in five minutes.
Speaker 8: But it also creates a challenge for.
Speaker 13: The distribution system and the infrastructure because you have to
Speaker 13: provide that power. And if you think about that a
Speaker 13: lot of these cars are around, then it will be really
Speaker 13: a huge challenge for the utility system. And I think
Speaker 13: that's what the problem when a challenge starts with charging
Speaker 13: all these electric vehicles in that time.
Speaker 4: So, Michael, tell us how your system works, and I'm
Speaker 4: just curious kind of where you are in this process
Speaker 4: in terms of acquiring customers, putting it to work.
Speaker 6: Give us some kind of size and scope.
Speaker 13: Yeah, So we are software company, as you guys said,
Speaker 13: and engineering company, and we help our clients puilding the
Speaker 13: infrastructure place which is needed to provide this high power.
Speaker 13: I mean the utilities for example, I mean they have
Speaker 13: huge challenges to provide this power. I mean it can
Speaker 13: take seven to ten years to upgrade the distribution system
Speaker 13: to provide this power. Right, So this is why we
Speaker 13: help our clients to design, plan, install, and run so
Speaker 13: called micro grids, which is basically co generation at the
Speaker 13: place where you charge the electric vehicles.
Speaker 1: So who are your customers right now?
Speaker 8: Well, I mean we have a diverse portfolio here.
Speaker 13: I mean, of course the engineering company is installing this
Speaker 13: infrastructure to provide the power, but there's also of course
Speaker 13: fleet management says providers who really want to implement electric
Speaker 13: vehicle trucks and all this. We have multiple clients here,
Speaker 13: but mostly engineering companies installing micro infrastructure, micro rates, and
Speaker 13: eating infrastructures.
Speaker 1: How has business been given the challenge that we've seen
Speaker 1: over the last couple of years for American companies to
Speaker 1: sell evs, the idea that they've gotten a little too
Speaker 1: expensive for consumers, the demand that a lot of these
Speaker 1: American companies thought would be there. Look what happened with four,
Speaker 1: looking happen with the GM. Even Tesla is seeing a
Speaker 1: sales decline this year. What has your demand been like?
Speaker 1: Has it held steady or has it been affected by
Speaker 1: what customers are doing?
Speaker 13: Actually insteady, Yes, of course there's uncertain the current blended market.
Speaker 13: But I mean almost thirty percent of all the people
Speaker 13: shopping around from new cars are still considering elected vehicles
Speaker 13: because elected vehicles are fun to try to fear cheaper.
Speaker 13: I mean, I mean, I'm on my fourth electric vehicle
Speaker 13: and I would never go back to a gas car, right,
Speaker 13: So no of us. The market is stable and it's
Speaker 13: actually increasing.
Speaker 4: Hey, so give us a little idea. We are Bloomberg
Speaker 4: is we always like to throw out there. Give us
Speaker 4: an idea. I know we've been asking about customers. We
Speaker 4: are on your website, Walmart, bloom Energy, Generaic. You've got
Speaker 4: some academic universities as u US San Diego, Georgia Tech,
Speaker 4: but there's a lot of other companies. It sounds like
Speaker 4: you guys are doing a lot of research with folks.
Speaker 4: But give us a little bit more idea of where
Speaker 4: the businesses and and the growth that you are seeing,
Speaker 4: whether it's top line.
Speaker 6: I'm assuming you're not profitable.
Speaker 4: Yet or is that we are.
Speaker 13: But the thing is we are really rooted in research
Speaker 13: because what we are doing is a methodology which really
Speaker 13: helps you to install.
Speaker 8: Infrastructure, meaning.
Speaker 13: Generators, natural gas generators, bat or as renewables at the
Speaker 13: place where you'd charge your electic vehicle where you need
Speaker 13: the power for a micro If we call this migrant right,
Speaker 13: And that can be a technical challenging process and it
Speaker 13: needs to be standardized so that you can do this
Speaker 13: really quickly and at an efficient cost.
Speaker 5: Right.
Speaker 13: And this is why we still do a lot of
Speaker 13: research and we at the cutting edge of research also
Speaker 13: when it comes to new technologies. And this is why
Speaker 13: we're working with universities because we don't have only this
Speaker 13: power problem on the elactic vehicle side. I mean, if
Speaker 13: you think about data centers, right, you also want to
Speaker 13: get a lot of power now from the utility system
Speaker 13: and they're talking about small modular reactors these days. So
Speaker 13: we have to research all these technologies and bring them
Speaker 13: in our software platform to providers, to our clients to
Speaker 13: efficiently plan those microgrids.
Speaker 1: Hey, Michael, in terms of infrastructure here, what is this
Speaker 1: administration meant for your business? Certainly he's close with Elon Musk,
Speaker 1: but that hasn't really helped the EV industry. He wants
Speaker 1: to roll back these tax credits. Does that affect your business?
Speaker 8: So far?
Speaker 13: It hasn't affected us, because I think it's it's I
Speaker 13: mean we I mean, as I said, electric vehicles are
Speaker 13: for real and they're not going away, right, And and
Speaker 13: the project takes the projects that we're seeing to take
Speaker 13: a year or two years or whatever it is, so
Speaker 13: you're not just canceling them because of uncertainly that we're
Speaker 13: seeing right now. So so far we actually have a
Speaker 13: nice growth in the micro space, which is not only
Speaker 13: the elected vehicle space. Uh and and we actually grew
Speaker 13: in better than last year.
Speaker 1: Michael Stadler, you're gonna have to leave it there. Thanks
Speaker 1: for joining us. Do appreciate it. Cto and co founder
Speaker 1: of Zendy joining us from San Diego.
Speaker 14: Let me drive.
Speaker 1: Oh no, no, no no, this is not a twin.
Speaker 14: Honey, Please, I want to try it.
Speaker 1: It's a good question time.
Speaker 3: This is the drive to the clothes.
Speaker 12: Plums for music.
Speaker 8: Well driver held.
Speaker 3: Don on Bloomberg Radio.
Speaker 4: All right, TikTok, everybody, We've got just about eighteen minutes
Speaker 4: to go until we see the closing bell. Here are
Speaker 4: the closing bell on Wall Street. Busy little Tuesday. Charlie
Speaker 4: and Bel Maloney just breaking down the trade here. But
Speaker 4: we're off our loads of the session, but still down
Speaker 4: about one point six percent on the Nasdaq one hundred
Speaker 4: and down about one percent on the S and P.
Speaker 4: Tim One of the stories that was really interesting to
Speaker 4: me reading in is what investors are up to, slashing
Speaker 4: holdings of US equities by the most on record. That
Speaker 4: was according to BAA's latest survey, underscoring the massive rotation
Speaker 4: that's underway in global markets. So we saw fund managers
Speaker 4: reported being about twenty three percent underweight in ustocks and
Speaker 4: tim I think that was a plunge of about forty
Speaker 4: percentage points from the pre be A survey.
Speaker 1: Wow, it's a dramatic shift, and it shows just how
Speaker 1: quickly traders have ditched their optimism about American markets, with
Speaker 1: the S and B five hundred tumbling just about eight
Speaker 1: percent from an all time high back in February. Let's
Speaker 1: see what our drive to the Closed guests has to
Speaker 1: say about this. We've got Scott Ladner with us CIO
Speaker 1: at the RIA Horizon Investments. They've got about ten billion
Speaker 1: dollars in AUM joining us this afternoon. Hey Scott, good
Speaker 1: to have you on the program. I'm curious what you
Speaker 1: make of this Bank of America survey. Is this a
Speaker 1: sign that it could be kind of contrarian, that it's
Speaker 1: a time to buy, that so many investors have slashed
Speaker 1: their holdings.
Speaker 12: Well, yeah, I think actually that there is some truth
Speaker 12: in that. I mean, the.
Speaker 14: Slashing of the holdings in the US makes a little
Speaker 14: bit of.
Speaker 12: Sense, though.
Speaker 14: Look, Trump, if Trump has done one thing, he is
Speaker 14: basically bullied, slash scared both Europe and China into actions
Speaker 14: that they probably wouldn't otherwise have taken. So, you know,
Speaker 14: expect to Europe, you know, getting off the debt break
Speaker 14: and basically starting to end money from a fiscal standpoint
Speaker 14: for the first time since really twenty twelve. It can
Speaker 14: be game changing for the revenue for some of those companies.
Speaker 14: And then when you you know, you pivot out to
Speaker 14: China and you know they're clearly worried about what, you know,
Speaker 14: what Trump's terror policy, trade policy is going to do
Speaker 14: to their already somewhat weak economy. And you've seen she
Speaker 14: pivot off of common prosperity. And so you know, these
Speaker 14: these two moves, you know, which were really really you know,
Speaker 14: holding down the equity values in both China and Europe.
Speaker 14: You know, Trump is kind of bullied them into changing
Speaker 14: those things, and that's actually to the benefit of that,
Speaker 14: you know, the equity hold you know, equity market send
Speaker 14: those two geographies, which are almost uninvestable for much of
Speaker 14: the last decade. Yeah, I mean the S and P
Speaker 14: five hundred dollars performance of the rest of the world
Speaker 14: has just been remarkable. But what does that do to
Speaker 14: US investors that buy US companies here? If we're seeing
Speaker 14: out performance outside of the US, what I mean, is
Speaker 14: that going to continue? Given what we've heard from the
Speaker 14: White House and what we've heard from advisors that essentially
Speaker 14: they're not necessarily paying attention to them markets right now
Speaker 14: and that with time they will recover. So I think
Speaker 14: actually it makes the case for US equities more compelling,
Speaker 14: but not probably for another quarter or two. So you
Speaker 14: know that you know this is this is a time
Speaker 14: when you know, frankly, in the last five years, diversification
Speaker 14: has been nothing but punished. So you've done anything other
Speaker 14: than invest in the Max seven or the top of
Speaker 14: the US market, you and you're a benchmarket really anything,
Speaker 14: you've gotten creamed, and so Benet you know you've just
Speaker 14: been you've been punished by by diversifying the last few
Speaker 14: months and probably for the next couple of quarters.
Speaker 12: We think you're actually gonna benefited.
Speaker 14: By by from diversification, and so you know, this is
Speaker 14: a this is a time when we're going to see
Speaker 14: some pretty good buying opportunities for US stocks. I mean,
Speaker 14: we're getting some of these things at a bigger deal
Speaker 14: than we would have otherwise had because folks are rotating
Speaker 14: out of US and into these other markets. We think
Speaker 14: that's probably more of a trade. But maybe a trade
Speaker 14: this can go on for a quarter or two, not
Speaker 14: for a year or two.
Speaker 4: So you don't think, Okay, so you still think US
Speaker 4: will ultimately outperform by the end of the year versus
Speaker 4: European markets are not necessarily.
Speaker 14: Not necessarily for the end of twenty twenty five, right,
Speaker 14: I mean, Europe and China had pretty big leads right now,
Speaker 14: so like in terms of like making up those leads,
Speaker 14: don't know if we get there. But as we kind
Speaker 14: of entering into twenty twenty six, when some of the
Speaker 14: you know, some of these fairly challenging things that Trump's
Speaker 14: doing right now with respect to the you know, sort
Speaker 14: of the ideological shifts, you know, those might actually have
Speaker 14: a chance to pay start paying some dividends on the
Speaker 14: deregulatory front, or the taxes front, or some of these
Speaker 14: other things by the time we turn the calendar into
Speaker 14: next year. So you know, I think there probably are
Speaker 14: some opportunities, but I'm not sure US is going to
Speaker 14: catch them this year.
Speaker 6: Are you worried at all about a recession?
Speaker 4: And do you buy the argument that we get from
Speaker 4: the administration that all right, guys, it's going to be
Speaker 4: a little tough, we could get have some economic pain,
Speaker 4: maybe a recession, maybe not. Nobody seems to want to
Speaker 4: kind of throw their hat into that ring definitively, it seems.
Speaker 4: But do you buy that idea that tariffs now, tax
Speaker 4: cuts later and that and maybe regulatory moves and that.
Speaker 6: Will be an engine for economic growth?
Speaker 3: Yeah, I do.
Speaker 12: I do buy that.
Speaker 14: And now we are clearly experiencing somewhat of growth slow
Speaker 14: down because everybody's just you know, we're kind of entering
Speaker 14: out slow down.
Speaker 4: Like I'm seeing a lot of stories where companies are like, nope,
Speaker 4: you know it's it's we thought we'd be doing a
Speaker 4: lot of deals and we're not.
Speaker 14: Well, look, if you can't plan, you can't invest. If
Speaker 14: you can't plan, you can't act. Like nobody can plan
Speaker 14: in an environment in which we don't really understand what
Speaker 14: the operating principle is going to be for seministration, we
Speaker 14: have some clues, you have some direction. You know, we
Speaker 14: have know this sort of the direction of these things,
Speaker 14: but we know nobody knows anything about the specifics of how,
Speaker 14: you know, how we're going to prosecute some of these policies.
Speaker 14: And so that's until we get some of that detail
Speaker 14: and we and we will get it. I mean it's
Speaker 14: not we're never going to have it like, we will
Speaker 14: get it at some point, but until we get it,
Speaker 14: it's going to be it's just a really tough operating environment,
Speaker 14: whether you're a consumer, an investor, or a business owner.
Speaker 4: Well, okay, so what do you do then? In terms
Speaker 4: of for investors, is it do you put new money
Speaker 4: into equities? We've talked about equities, you know, being cut back.
Speaker 4: Would you put new money into US stocks to oversee stocks?
Speaker 6: Or would you play the fixed income world?
Speaker 12: I definitely not play the fixed income world.
Speaker 14: So you look, we think yields are probably about in
Speaker 14: the right right now, you do, yeah, and so you know,
Speaker 14: the yield drop It makes sense in the context of tariffs,
Speaker 14: which everybody thinks tariffs are inflationary, tarifts are deflationary.
Speaker 4: No, I would argue with you because if you are
Speaker 4: putting tariffs on products that come in that obviously raises
Speaker 4: their costs unless somebody eats them, but it also gives
Speaker 4: an opportunity for domestic producers to say, well, if those
Speaker 4: prices are higher, I can raise my prices. There is
Speaker 4: some of that argument there as well.
Speaker 12: There absolutely is.
Speaker 14: You're right, Carrol, But I would just argue that taxing terifs,
Speaker 14: at the end of the day, are still a tax,
Speaker 14: and taxes are growth retardant, and growth retardant things are
Speaker 14: tend to be deflationary over time, so that probably it's
Speaker 14: not again not a twenty twenty five deflation story, like
Speaker 14: that's not That's not what I'm trying to say. But
Speaker 14: as far as like going forward, if we're looking at
Speaker 14: a ten year yield, you ten year old's going to
Speaker 14: care a lot.
Speaker 12: More about it.
Speaker 6: You think tariffs are a good idea.
Speaker 14: I think if you can get so no, okay, simply no.
Speaker 12: But here.
Speaker 14: But there's a caveat to that though, which is important,
Speaker 14: And I don't think that people in the market are
Speaker 14: pricing this.
Speaker 12: It's the state of the world.
Speaker 14: So let me give you a state of the world
Speaker 14: which I think could exist, and.
Speaker 6: Just got about forty five.
Speaker 3: Yes.
Speaker 12: Second, so the state of the world that could exist.
Speaker 14: That would be interesting would be if the reciprocal idea
Speaker 14: kind of takes hold and other countries actually lower tariffs
Speaker 14: on the US, right, you might end up in a
Speaker 14: regime where you have lower global tariffs overall. Like that'll
Speaker 14: be a pretty big boost to global growth that I
Speaker 14: don't think is in the market right now. But I'm
Speaker 14: not saying that's necessarily a base case, but that is
Speaker 14: a state of the world that is possible if under
Speaker 14: the sort of reciprocal tariffs agreement where like, hey, we
Speaker 14: just want everybody to pay sort of the same rate,
Speaker 14: all right, We.
Speaker 4: Will certainly see mix for an interesting investing year, and
Speaker 4: no doubt about it. Got to leave it there, but
Speaker 4: thank you so much, really appreciate it. Scott Laudner's chief
Speaker 4: investment officer of Horizon Investments. As we mentioned, they've got
Speaker 4: about ten billion dollars in assets under management. Joining us
Speaker 4: right here in our Bloomberg Interactive Broker studio.
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