WEBVTT - Trump Weighs Imposing Copper Import Tariffs in Weeks, Not Months 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.920 --> 0:00:13.240 This is Bloomberg Business Week Daily reporting from the magazine 0:00:13.240 --> 0:00:17.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.880 --> 0:00:22.760 and trends shaping today's complex economy, plus global business finance 0:00:22.800 --> 0:00:26.120 and tech news as it happens. The Bloomberg Business Week 0:00:26.239 --> 0:00:31.720 Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.960 --> 0:00:36.159 President Donald Trump is getting ready to renounce some auto 0:00:36.200 --> 0:00:38.600 tariffs that is expected to come at four pm today. 0:00:38.640 --> 0:00:42.440 We heard that from the White House spokesperson. This would 0:00:42.479 --> 0:00:44.440 be a move that would certainly escalate his fight with 0:00:44.479 --> 0:00:48.040 global trading partners ahead of a broader tariff push next week. 0:00:48.159 --> 0:00:50.400 We're expecting comments from the White House at four o'clock. 0:00:50.479 --> 0:00:52.840 We will bring the President's comments to you live as 0:00:52.920 --> 0:00:55.240 we do get them. In the meantime, US tariffs on 0:00:55.280 --> 0:00:58.960 copper imports could be coming within several weeks, months earlier 0:00:58.960 --> 0:01:01.280 than the deadline for a decision. Also, according to people 0:01:01.280 --> 0:01:03.480 familiar with the matter, coppor trading in New York rose 0:01:03.480 --> 0:01:06.920 to a record as a result with a tariff round up. 0:01:06.959 --> 0:01:08.920 Back with US is Bloomberg News. Medals and Mining, heavy 0:01:09.000 --> 0:01:11.280 Machinery reporter Jodo who joins us here in the studio. 0:01:11.360 --> 0:01:14.240 Usually I have this little chart Joe that keeps me 0:01:14.319 --> 0:01:16.480 up to date with the tariffs, the who, the what, 0:01:16.640 --> 0:01:18.720 the where and the when. Yeah, but fortunately we got 0:01:18.720 --> 0:01:21.479 you in the studio today, and that's much better than 0:01:21.480 --> 0:01:22.400 my little cheat sheet. 0:01:22.560 --> 0:01:26.600 It's it's a lot, right, And it's like even like 0:01:26.600 --> 0:01:28.880 if you're on the weekends hanging out with like friends 0:01:28.880 --> 0:01:31.560 who don't care about markets, they're like, oh, tariffs, do 0:01:31.560 --> 0:01:33.759 you want to talk about the tariffs? I mean that's 0:01:33.800 --> 0:01:37.520 how it's just become like part of the conversation in 0:01:37.600 --> 0:01:41.319 the US right is like one thing everybody knows is happening, 0:01:41.560 --> 0:01:43.600 you know, beyond the signal story that happened the other 0:01:43.680 --> 0:01:44.560 day is terroriffs. 0:01:44.560 --> 0:01:46.520 Well to that point, we see it hit consumer sentiment. 0:01:46.720 --> 0:01:49.480 And when you see consumers cite this stuff as the 0:01:49.560 --> 0:01:52.000 reason that they're concerned, you know, it's reaching a level 0:01:52.000 --> 0:01:55.640 that typically financial news doesn't reach when it comes to 0:01:56.040 --> 0:01:56.760 everyday people. 0:01:57.640 --> 0:02:00.880 Yeah, and I think, listen, this is where or it's 0:02:00.880 --> 0:02:03.080 important for us when we're doing these stories to kind 0:02:03.080 --> 0:02:05.240 of keep in mind, like what is the consumer impact 0:02:05.320 --> 0:02:08.600 so Copper, for example, this this report that we had 0:02:08.720 --> 0:02:11.680 last night we've been working on now for a little bit. 0:02:11.720 --> 0:02:14.640 We had started hearing, Wow, actually, these these tariffs might 0:02:14.680 --> 0:02:17.280 be coming sooner than expected. Now to put that into 0:02:17.320 --> 0:02:19.959 context is a little wonky. When we got steel and 0:02:20.040 --> 0:02:22.519 aluminum terraffs in twenty eighteen, the President of the United 0:02:22.560 --> 0:02:25.840 States announced in twenty seventeen that he was doing the 0:02:25.960 --> 0:02:30.360 so called Section two thirty two investigations to put tariffs 0:02:30.440 --> 0:02:34.359 on steel and aluminum imports because they had feared that 0:02:34.560 --> 0:02:38.440 the import market was impacting national security. At the time, 0:02:38.560 --> 0:02:40.440 like nobody had heard of this. Like when we first 0:02:40.480 --> 0:02:42.640 talked about this, you guys might not remember it. 0:02:42.760 --> 0:02:43.040 I do. 0:02:43.200 --> 0:02:45.280 It was like, what is section two thirty two, and 0:02:45.320 --> 0:02:47.959 how can we claim this thing? Well, now it's very 0:02:47.960 --> 0:02:50.160 well known and the markets know it very well, and 0:02:50.240 --> 0:02:53.720 Donald Trump knows it very well. And what Donald Trump 0:02:53.760 --> 0:02:56.360 knows is that Section two thirty two is not only 0:02:56.400 --> 0:02:58.840 an executive power that he has, but one that he 0:02:58.919 --> 0:03:01.400 implemented and one that was tried by the courts, and 0:03:01.440 --> 0:03:03.560 the courts said last time around, Yeah, all of this 0:03:03.600 --> 0:03:05.679 is legal. This is exactly the power that he has. 0:03:06.320 --> 0:03:08.560 We talked about this when he re implemented the Section 0:03:08.600 --> 0:03:12.760 two thirty two aluminum and steal tarriffs just last month 0:03:12.800 --> 0:03:14.880 when he put the twenty five percent on or earlier 0:03:14.960 --> 0:03:18.200 this month, and that brings us to copper. Copper was 0:03:18.320 --> 0:03:21.280 not among any of the investigations in the first term. 0:03:21.720 --> 0:03:23.560 And when Trump brought up that he wanted to do 0:03:23.639 --> 0:03:27.000 copper taroffs, he said it. He said it when he 0:03:27.120 --> 0:03:29.680 was talking about the Canada Mexico stuff. I know we're 0:03:29.680 --> 0:03:31.640 getting into it, but he said it in his quote 0:03:31.680 --> 0:03:34.120 unquote State of the Union address where he said we're 0:03:34.120 --> 0:03:36.320 going to do copper as well. It was a weird 0:03:36.320 --> 0:03:40.080 one because he had just announced an investigation in Section 0:03:40.120 --> 0:03:43.480 two thirty two on copper, but he said in the conversation, well, 0:03:43.480 --> 0:03:44.840 we're going to do these terrorists. 0:03:45.040 --> 0:03:45.760 Look, oh, he did. 0:03:46.200 --> 0:03:47.960 He did right, which was a bit of a slip 0:03:48.000 --> 0:03:50.400 of the tongue because he still needs to wait for 0:03:50.480 --> 0:03:53.760 his Commerce department to do the investigation. The investigation goes 0:03:53.800 --> 0:03:56.400 two hundred and seventy days long. But we've learned from 0:03:56.440 --> 0:03:59.720 our sources that the market should expect this to come 0:03:59.800 --> 0:04:02.280 much sooner. In fact, what our sources were telling us 0:04:02.360 --> 0:04:05.120 was you're going to hear some sort of decision within weeks, 0:04:05.640 --> 0:04:11.760 not months the market was expecting months. What month exactly unclear, 0:04:11.880 --> 0:04:14.920 but Goldman Sachs had been saying we expect a twenty 0:04:14.920 --> 0:04:18.520 five percent tariff on copper sometime at the end of 0:04:18.560 --> 0:04:20.120 the year. Is kind of how they phrased it in 0:04:20.160 --> 0:04:22.839 notes to their clients earlier this week. 0:04:23.040 --> 0:04:24.320 Well, it's a lot earlier. 0:04:24.640 --> 0:04:27.000 It's going to be a lot earlier according to our sources. 0:04:27.080 --> 0:04:29.159 So what's the impact of that, And remind us, forgive us, 0:04:29.200 --> 0:04:31.400 because I know you're so good at like reminding everybody 0:04:31.800 --> 0:04:34.400 for this in this example, like what the copper market is, 0:04:34.440 --> 0:04:37.240 what's the US exposure to what we do? Remind us, 0:04:37.360 --> 0:04:39.440 so what it is and what impact it might so have. 0:04:39.640 --> 0:04:42.360 We consume one point eight million tons of copper per 0:04:42.440 --> 0:04:44.880 year in the United States. That copper is one of 0:04:44.920 --> 0:04:47.600 the most ubigulous metals. It's used in everything your iPhones, 0:04:47.920 --> 0:04:51.880 your laptops, these microphones, the wiring in your house, the 0:04:51.920 --> 0:04:54.560 wiring in your car. It's everywhere you touch copper at 0:04:54.560 --> 0:04:57.400 some point every day in your life. So in terms 0:04:57.480 --> 0:05:00.240 of tonnage, it's not the size of steel that it 0:05:00.320 --> 0:05:03.000 is quite important. So it's one point eight million tons. 0:05:03.040 --> 0:05:06.359 Half of that we import, so it's about nine hundred 0:05:06.360 --> 0:05:09.479 thousand tons we require to import. What really happened in 0:05:09.520 --> 0:05:12.320 the market is you need to remember demand across the 0:05:12.360 --> 0:05:15.600 economy is lackluster. So it's not like we're having this 0:05:15.680 --> 0:05:20.240 big explosion demand in the United States for appliances, for cars, like, 0:05:20.279 --> 0:05:22.839 everything's just kind of there. But we have seen a 0:05:22.880 --> 0:05:25.119 trade happening in the market. The rest of the world 0:05:25.200 --> 0:05:27.599 understands that there could be a twenty five percent tariff 0:05:27.640 --> 0:05:31.480 put on copper in the United States. Well, there's copper 0:05:31.480 --> 0:05:34.040 all over the world. So traders have been playing this 0:05:34.080 --> 0:05:36.040 by saying the copper price in the United States is 0:05:36.120 --> 0:05:40.320 about eleven five hundred dollars per ton. In London it's 0:05:40.360 --> 0:05:44.400 about ten thousand dollars per ton, So why wouldn't you 0:05:44.520 --> 0:05:46.839 just take that physical metal, ship it into the United 0:05:46.839 --> 0:05:49.720 States and catch the ARB window. And that has been 0:05:49.720 --> 0:05:55.719 the story now for weeks. Well now everybody's realizing that 0:05:55.760 --> 0:05:58.359 there might be an earlier end date for when you 0:05:58.480 --> 0:06:00.919 need to get in under the terrace. And that's what 0:06:01.000 --> 0:06:03.880 a lot of the bank analysts were reporting on today 0:06:04.080 --> 0:06:07.560 was listen, if there's a shorter timeline for when President 0:06:07.560 --> 0:06:10.760 Trump expects to announce the tariff, then that ARB should 0:06:10.800 --> 0:06:13.000 eventually close, right, Like if the ARB is at like 0:06:13.640 --> 0:06:17.320 nineteen percent spread, right, then eventually twenty five percent is 0:06:17.320 --> 0:06:19.719 what the spread would be, and then the ARB is done. 0:06:20.000 --> 0:06:22.240 Joe, you said, forgive me. You said, half of the 0:06:22.279 --> 0:06:25.200 copper that we use in the US we import, We 0:06:25.200 --> 0:06:26.479 get half of it from the US. 0:06:27.279 --> 0:06:31.240 Yeah, so about half of what we consume is produced 0:06:31.400 --> 0:06:34.360 US ethnic domestic exactly, and then the other half comes 0:06:34.360 --> 0:06:34.880 from abroad. 0:06:35.040 --> 0:06:37.960 So is there enough copper supply in the US. No, 0:06:38.600 --> 0:06:41.400 to satisfy it. Want to satisfy the needs absolutely. The 0:06:41.400 --> 0:06:43.919 reason I ask is because the whole idea with these tariffs, 0:06:44.400 --> 0:06:49.560 at least from the President's perspective, is to bring commerce 0:06:49.560 --> 0:06:51.839 into the United States back to the United States. In 0:06:51.880 --> 0:06:54.880 this case, it's not like you can start producing more 0:06:55.040 --> 0:06:59.520 or extracting more copper from the US to nicate the 0:06:59.560 --> 0:07:02.120 need port copper, right. It doesn't seem like it has 0:07:02.160 --> 0:07:06.240 the same mechanisms that some of the other tariffs that 0:07:06.279 --> 0:07:08.560 he's implemented or talked about implementing. 0:07:08.120 --> 0:07:09.960 Have Yeah, it's a bit of a weird one. And 0:07:10.160 --> 0:07:12.559 we asked this question too, is like why has Trump 0:07:12.560 --> 0:07:14.880 focused on copper and you know, One of the things 0:07:14.920 --> 0:07:18.200 is like copper is technically kind of the make America 0:07:18.240 --> 0:07:21.040 great again umbrella. Right, Like copper we were a great 0:07:21.320 --> 0:07:24.360 we have been, we still are a great copper producing country, 0:07:24.360 --> 0:07:29.040 but we used to be larger. The question becomes, can 0:07:29.080 --> 0:07:30.560 you get the minds up and running and can you 0:07:30.600 --> 0:07:34.880 get the processing facilities to a scale that you'd be 0:07:34.920 --> 0:07:37.440 talking about to offset it. Honestly, I don't think the 0:07:37.480 --> 0:07:43.040 discussion has been, oh well, let's just like completely, you know, 0:07:43.760 --> 0:07:46.160 change the way production is in the United States. The 0:07:46.160 --> 0:07:50.760 conversation has more just been let's do this because we should. 0:07:51.760 --> 0:07:56.200 And listen, you know, Freeport mcmaran, Rio Tinto, like, there 0:07:56.240 --> 0:07:58.680 are big names that operate in this inside this country, 0:07:58.760 --> 0:08:00.760 and sure they'd probably be more than happy to start 0:08:00.800 --> 0:08:05.040 doing a little more production, mine production, more processing production. 0:08:05.160 --> 0:08:09.480 But you know, like at the same time, they're also 0:08:09.560 --> 0:08:10.920 shipping into the United States. 0:08:11.920 --> 0:08:13.960 All Right, I know there's going to be more to come. 0:08:14.080 --> 0:08:15.640 We know we could probably talk an hour with you, 0:08:15.720 --> 0:08:17.200 but you're just going to have to hopefully come. 0:08:17.120 --> 0:08:18.440 Back tomorrow or something. 0:08:19.400 --> 0:08:21.440 Jojo, thank you, because it certainly is top of mind 0:08:21.440 --> 0:08:24.520 for us. On this Wednesday, Bloomberg News, Metals and Mining 0:08:24.520 --> 0:08:27.560 Heavy Machinery reporter Jojoe joining us here in studio. 0:08:28.120 --> 0:08:31.680 You're listening to the Bloomberg Business Week podcast. Catch us 0:08:31.720 --> 0:08:35.199 live weekday afternoons from two to five pm Eastern. Listen 0:08:35.200 --> 0:08:38.760 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:08:38.920 --> 0:08:40.720 or watch us live on YouTube. 0:08:41.760 --> 0:08:45.480 Borers are piling into the global bond market, and what 0:08:45.520 --> 0:08:47.319 they're looking to do is get some deals done ahead 0:08:47.360 --> 0:08:50.680 of US President Donald Trump's plans to impose global tariffs 0:08:50.720 --> 0:08:52.840 on April second. You know, tariffs have been top of 0:08:52.840 --> 0:08:56.600 mine once again today, so global bond investors really kind 0:08:56.600 --> 0:08:59.360 of looking to take advantage of this week's relative calm 0:09:00.040 --> 0:09:01.439 in the market for today. 0:09:01.520 --> 0:09:03.280 I was kind of like, I was thinking about this 0:09:03.320 --> 0:09:06.040 when a relative, Tom Carrol, I know exactly. It was 0:09:06.160 --> 0:09:07.280 kind of mellow for a while. 0:09:07.120 --> 0:09:08.439 But the bomb market's mellow today. 0:09:08.760 --> 0:09:11.200 Yeah, I guess I guess you could say I feel 0:09:11.200 --> 0:09:13.200 like tik tik tik. We're waiting to see what's next. 0:09:13.360 --> 0:09:15.880 We's with more. We got Rejief Sharma with us, managing 0:09:15.880 --> 0:09:18.400 director of fixed Income Investments over at Key Private Bank. 0:09:18.400 --> 0:09:21.440 It's a division of the publicly held eighteen billion dollar 0:09:21.480 --> 0:09:24.440 market cap bank Key Corp. Sixty billion dollars in assets 0:09:24.520 --> 0:09:26.840 under management for Key Private Bank. Ree chief joins us 0:09:26.840 --> 0:09:30.440 in the Bloomberg BusinessWeek studio. The fixed income market, we 0:09:30.480 --> 0:09:34.440 know lots of moving parts. The headlines though, the developments 0:09:34.440 --> 0:09:36.600 that you're following the most closely. What is it? 0:09:36.920 --> 0:09:38.840 You know, there's been so much uncertainty in the market. 0:09:38.880 --> 0:09:40.880 There's been this big push for you know, are we 0:09:40.920 --> 0:09:42.280 having a growth scare? Is there going to be a 0:09:42.320 --> 0:09:44.680 slow down in the economy? And what we're really looking 0:09:44.720 --> 0:09:46.600 at here is this is the opportunity right now for 0:09:46.679 --> 0:09:49.920 investors to look at asset allocation, how their portfolios look. 0:09:50.160 --> 0:09:52.440 And that's where fixed income comes into play. When you 0:09:52.440 --> 0:09:54.199 start seeing all this vola toady in the market, you 0:09:54.240 --> 0:09:56.520 see most of them the equity side. We haven't seen 0:09:56.559 --> 0:09:59.240 that level of voltodio on the fixed income side. So 0:09:59.240 --> 0:10:01.000 it gives us a good all right. 0:10:01.120 --> 0:10:04.280 So in terms of specific metrics though, that you keep 0:10:04.320 --> 0:10:06.400 an eye on, and I understand the low ball that 0:10:06.440 --> 0:10:08.360 you're saying, or the different volatility we're seeing in the 0:10:08.360 --> 0:10:11.760 fixed income market. Is it though, FED policy, is it 0:10:11.800 --> 0:10:13.680 tariff policy, Washington policy? 0:10:13.720 --> 0:10:14.160 What is it? 0:10:14.200 --> 0:10:14.280 Like? 0:10:14.320 --> 0:10:15.840 Top of mind? You get up in the morning and 0:10:15.840 --> 0:10:17.280 you're like, tell me what's going on. 0:10:17.440 --> 0:10:19.480 It truly is all of the ebove because what ends 0:10:19.559 --> 0:10:21.920 up happening is you get the tariff headline policy, which 0:10:21.960 --> 0:10:25.200 is almost on a daily basis, that does spoof the market. 0:10:25.280 --> 0:10:27.160 It causes a lot of uncertainty in the market. You 0:10:27.200 --> 0:10:31.240 start seeing the effects in equities. What's really been interesting 0:10:31.280 --> 0:10:33.440 is the credit markets. If you look at credit spreads, 0:10:33.480 --> 0:10:36.080 they have been very well behaved, right, so they're not 0:10:36.120 --> 0:10:38.880 screaming any signs of recession. They're not any sides of 0:10:38.920 --> 0:10:42.800 a slowdown. That has actually become a nice barometer for 0:10:42.920 --> 0:10:45.720 other investors' equity investors who look at as long as 0:10:45.760 --> 0:10:47.599 there's nothing wrong in the credit markets, we should be 0:10:47.679 --> 0:10:49.400 okay in the equity market. 0:10:49.600 --> 0:10:51.920 My instant Bloomberg is blowing up with people who want 0:10:51.920 --> 0:10:56.160 to ask questions about fixed income to you, first one coming, 0:10:57.360 --> 0:11:01.679 do you anticipate swelling from fixed income and that money 0:11:01.720 --> 0:11:03.000 then going into equities? 0:11:03.720 --> 0:11:05.360 I think right now, what we've seen in the past 0:11:05.400 --> 0:11:07.240 is the money market funds have done very well when 0:11:07.240 --> 0:11:10.160 they're getting good rates, and everybody expected that money to 0:11:10.200 --> 0:11:12.439 go to the equity market, right, that didn't happen. 0:11:12.559 --> 0:11:14.960 It's still money put that money still out there. It's 0:11:15.000 --> 0:11:16.840 still out there. Do you see more coming from the 0:11:16.920 --> 0:11:19.000 selling of fixed income or do you see it more 0:11:19.040 --> 0:11:21.680 as like that cash and money market accounts is going 0:11:21.679 --> 0:11:22.200 to move, So I. 0:11:22.160 --> 0:11:23.800 Think it would be the cash of money markets accounts. 0:11:23.800 --> 0:11:24.600 Where do you think it's going to go. 0:11:24.679 --> 0:11:28.400 It'll probably go lockstep into fixed income first because right 0:11:28.440 --> 0:11:30.920 now you're still getting corporate bonds that are very nice yields. 0:11:30.960 --> 0:11:33.400 Right now you're getting blue chip companies that are trading 0:11:33.400 --> 0:11:35.400 at very good income levels. So it makes a lot 0:11:35.400 --> 0:11:37.560 of sense really because you can sleep at night without 0:11:37.559 --> 0:11:39.520 worrying about it's just going to blow up my portfolio. 0:11:39.559 --> 0:11:41.680 So is it corporates that you think see the flows 0:11:41.679 --> 0:11:43.680 going into more so than sovereign or. 0:11:44.559 --> 0:11:47.480 A lot of investment grade corporate bonds do extremely well 0:11:47.720 --> 0:11:50.720 in this type of alto environment. What's really been happening? 0:11:50.800 --> 0:11:53.480 These are really big, liquid, blue chip companies that offer 0:11:53.520 --> 0:11:56.559 you quite a bit of income with their coupons. So 0:11:56.600 --> 0:11:59.400 you're not talking how ye, we're not talking hy yo, okay, 0:12:00.200 --> 0:12:02.720 talk high yield. I'd be very particular about what sectors 0:12:02.720 --> 0:12:04.720 I want to invest in high yield. It would have 0:12:04.800 --> 0:12:07.200 to align with the America first, agenda, So you would 0:12:07.200 --> 0:12:10.319 look at maybe manufacturing or energy being very advantageous in 0:12:10.360 --> 0:12:10.760 high yield. 0:12:10.840 --> 0:12:12.720 All right, but among the blue chips, where would you got. 0:12:12.760 --> 0:12:14.520 The blue chicks. You look blue chips, you look at 0:12:14.559 --> 0:12:18.640 consumer staples, you're looking at energy, you're looking industrials, You're 0:12:18.640 --> 0:12:22.679 looking at anything that promotes the initiatives of the Trump 0:12:22.760 --> 0:12:27.640 organ Trump administration about getting growth America first, trying to 0:12:27.640 --> 0:12:32.160 look at maybe deregulation, which will be very helpful for financials. 0:12:32.040 --> 0:12:33.920 In terms of what your clients care about. Are they 0:12:33.960 --> 0:12:36.920 more focused on yield or do they care about credit spreads? 0:12:37.559 --> 0:12:39.679 Our clients care a lot more about yield as long 0:12:39.720 --> 0:12:42.000 as you're getting yield. I think every investor has gotten 0:12:42.000 --> 0:12:44.280 really accustomed at being in an environment years ago when 0:12:44.280 --> 0:12:46.480 you weren't getting any yield and fixed income. Now you're 0:12:46.520 --> 0:12:48.320 getting yield again, and you want your client the clients 0:12:48.360 --> 0:12:51.480 really want that yield again. What's very interesting, however, is 0:12:51.520 --> 0:12:54.000 you can get that yield in very high quality securities now, 0:12:54.080 --> 0:12:55.600 so you don't really have to go down the credit 0:12:55.679 --> 0:12:57.560 rating spectrum to achieve that kind of yield. 0:12:57.760 --> 0:13:01.720 What's the risk goouls be President of the Chicago Fed 0:13:01.760 --> 0:13:04.000 telling the Financial Times in an interview, the FED is 0:13:04.040 --> 0:13:07.120 no longer on the golden path witnessed in twenty twenty 0:13:07.120 --> 0:13:10.079 three and twenty twenty four. Fedead now entered a different 0:13:10.160 --> 0:13:12.720 chapter where there's a lot of dust in the air, 0:13:12.760 --> 0:13:14.880 and he says he believes burn costs would be a 0:13:14.920 --> 0:13:17.640 fair bit lower in twelve to eighteen months from now, 0:13:17.679 --> 0:13:20.600 cautions it may take longer than anticipated for the next 0:13:20.600 --> 0:13:25.120 cut because of economic uncertainty. How does maybe it being 0:13:25.360 --> 0:13:27.360 a lot of dust in the air, like you said, 0:13:27.360 --> 0:13:29.120 there's a lot of things every morning, how does it 0:13:29.280 --> 0:13:32.520 complicate things and how do you ultimately figure out when 0:13:33.000 --> 0:13:35.720 to kind of, you know, push the button on an investment. 0:13:35.760 --> 0:13:36.679 Right now, the. 0:13:36.640 --> 0:13:39.600 Markets have been generally thinking about the mantra you don't 0:13:39.640 --> 0:13:41.880 fight the Fed, and right now the FED is in 0:13:41.960 --> 0:13:43.880 a wait and see approach. They're not looking to cut 0:13:43.920 --> 0:13:46.400 rates right now. They have the luxury of waiting, so 0:13:46.440 --> 0:13:48.400 they're deciding right now, we're going to wait for more data. 0:13:48.440 --> 0:13:50.240 We're going to find out what the fiscal policy is 0:13:50.240 --> 0:13:53.320 before we start cutting rates. The market, however, is once 0:13:53.360 --> 0:13:56.160 again trying to dictate terms. If the FED came out 0:13:56.240 --> 0:13:57.800 last week and said we'll have two rate cuts for 0:13:57.840 --> 0:14:01.040 twenty twenty five. The market is leaning towards three, so 0:14:01.080 --> 0:14:03.960 that dislocation is one of the worries, worry signals for 0:14:04.040 --> 0:14:06.520 us because that has to resolve itself, and that's going 0:14:06.559 --> 0:14:08.800 to resolve itself, but we go through vold Tody to 0:14:08.840 --> 0:14:09.200 get there. 0:14:10.000 --> 0:14:13.120 So what is your outlook on the rate path for 0:14:13.200 --> 0:14:14.480 the next twelve to eighteen months. 0:14:14.520 --> 0:14:16.760 I do think that we will have a continued rate 0:14:16.800 --> 0:14:18.680 cutting cycle, but I think it's going to be later 0:14:18.760 --> 0:14:21.360 in the later part of this year. We probably will 0:14:21.400 --> 0:14:23.880 get one rate cut this year, but what will have 0:14:23.960 --> 0:14:25.800 to line up will have to be a lot more 0:14:25.880 --> 0:14:28.560 clarity on tariffs. You'll have to see a lot more 0:14:28.720 --> 0:14:31.080 inflation data that kind of supports the trend towards a 0:14:31.120 --> 0:14:33.000 two percent goal, and you need to make sure the 0:14:33.080 --> 0:14:34.120 jobs market stay stable. 0:14:34.160 --> 0:14:36.280 Are you concerned that the tariffs are inflationary? 0:14:36.400 --> 0:14:39.960 Yes, I am. Tariffs are generally inflationary. It was interesting 0:14:40.040 --> 0:14:42.960 to see Fetcher Powell note that in his FMC meeting 0:14:43.200 --> 0:14:46.880 press conference. So everybody knows that tariffs could be inflation stoking, 0:14:47.160 --> 0:14:48.560 but he did come out and say that he thinks 0:14:48.560 --> 0:14:50.000 it's going to be a short lived inflation. 0:14:50.000 --> 0:14:51.680 I believe the term he used was transitory. 0:14:51.680 --> 0:14:54.520 I didn't want to use Okay, I know, don't say it. 0:14:54.600 --> 0:14:55.200 Don't say it. 0:14:55.800 --> 0:14:59.760 Do you buy that the president will ultimately get to 0:15:00.280 --> 0:15:04.520 growth later this year and the idea being tariffs first 0:15:05.000 --> 0:15:08.640 and then a cut in taxes an easying regulatory oversight 0:15:09.040 --> 0:15:11.080 later in the year. His Commerce secretor has talked about 0:15:11.120 --> 0:15:14.920 growth later this year, a dynamic perhaps economy maybe not 0:15:14.960 --> 0:15:18.080 his word, maybe my word, but just a stronger growth 0:15:18.120 --> 0:15:19.000 in the United States. 0:15:19.080 --> 0:15:20.880 Do you believe in that? 0:15:21.800 --> 0:15:24.200 It's a very good question. I think there's certain things 0:15:24.200 --> 0:15:26.960 that need to happen to get to the growth prerogative 0:15:27.000 --> 0:15:28.360 that he had set for himself that he ran on 0:15:28.400 --> 0:15:30.920 his campaign for. But I think that's kind of getting 0:15:30.960 --> 0:15:32.600 muddled right now. I think it's going to take more 0:15:32.800 --> 0:15:35.600 time to get there than it was earlier anticipated. 0:15:35.920 --> 0:15:37.640 Well, what do you think is the catalyst for that? 0:15:37.760 --> 0:15:40.400 Is it tax cuts? Is it manufacturing coming back to 0:15:40.400 --> 0:15:42.560 the US. What's the realistic part in your view? 0:15:42.600 --> 0:15:44.560 I really feel like the tax cuts need to happen. 0:15:44.640 --> 0:15:46.960 I think that was the number one priority when everybody 0:15:47.000 --> 0:15:48.680 thought that was a number one priority when he was running. 0:15:49.000 --> 0:15:51.200 That's now become almost a third priority. And with that 0:15:51.240 --> 0:15:53.120 I think growth gets his step back. 0:15:53.240 --> 0:15:56.120 Well, last question, it definitely relates to Trump policy. Maybe 0:15:56.240 --> 0:15:58.360 less federal money going to the states at this point. 0:15:58.400 --> 0:16:00.840 What does it mean for municipalities states in terms of 0:16:00.880 --> 0:16:02.119 their fiscal finances? 0:16:02.400 --> 0:16:04.280 Is it more issuance or is it more trouble. 0:16:04.480 --> 0:16:06.880 I really feel like municipal securities is a great area 0:16:06.880 --> 0:16:09.080 to invest in fixed income. I think there'll be more 0:16:09.080 --> 0:16:12.280 issuance if we have infrastructure spending. And these are those 0:16:12.360 --> 0:16:15.120 kinds of securities that do not get you rich, but 0:16:15.160 --> 0:16:15.840 they keep you rich. 0:16:15.960 --> 0:16:19.800 What about ending tax breaks for munis? Is that on 0:16:19.800 --> 0:16:20.240 your radar? 0:16:20.400 --> 0:16:23.120 It's on my radar. Those kind of conversations creep up 0:16:23.120 --> 0:16:25.360 every now and then, they don't really go anywhere. There's 0:16:25.360 --> 0:16:28.320 a big, strong lobby for munichs to not lose that, 0:16:28.440 --> 0:16:31.040 so I bet shocking they are writing for their conversation 0:16:31.080 --> 0:16:31.440 for radio. 0:16:31.520 --> 0:16:33.520 People love their tax remmunis. Just ask some of the 0:16:33.560 --> 0:16:36.000 folks around here. All right, we're going to leave it. 0:16:35.920 --> 0:16:37.200 There, Razeeve, thank you so much. 0:16:38.040 --> 0:16:40.680 Ajeeb Sharma, Managing director of Fixed Income Investments, are at 0:16:40.720 --> 0:16:43.360 Key Private Bank, joining us here in studio. 0:16:45.920 --> 0:16:49.680 This is the Bloomberg Business Week Podcast. Listen live each 0:16:49.720 --> 0:16:52.720 weekday starting at two pm Eastern on Apple car Play 0:16:52.800 --> 0:16:55.440 and the Android Auto with the Bloomberg Business app. You 0:16:55.480 --> 0:16:58.680 can also listen live on Amazon Alexa from our flagship 0:16:58.720 --> 0:17:04.040 New York station. Say Alexa played Bloomberg eleven thirty. This 0:17:04.080 --> 0:17:06.000 sounds like a big, big, big story. 0:17:06.119 --> 0:17:11.080 Yeah, Bailey lipschultzen'strem Gafari out with some details. When it 0:17:11.080 --> 0:17:13.560 comes to open AI's finances, the company expects to more 0:17:13.560 --> 0:17:16.600 than triple its revenue this year to twelve point seven 0:17:16.640 --> 0:17:17.320 billion dollars. 0:17:17.400 --> 0:17:17.840 Just a lot. 0:17:17.960 --> 0:17:19.439 I'm not paying for it, but I use it. 0:17:19.560 --> 0:17:21.840 No, I'm not either. But there is a paid version. 0:17:21.560 --> 0:17:23.640 Paid version twenty bucks a month. There's only two hundred both. 0:17:23.760 --> 0:17:26.240 But there's a lot of companies right that are talking. 0:17:26.320 --> 0:17:28.400 Yeah, yeah, this is corner A person familiar with the matter. 0:17:28.440 --> 0:17:31.600 The company generated three point seven billion dollars in annual 0:17:31.760 --> 0:17:35.160 revenue last year, and they expect revenue to continue growing 0:17:35.160 --> 0:17:36.919 out a fast club, more than doubling next year to 0:17:36.960 --> 0:17:41.359 twenty nine point four billion dollars. Curious what Ruth fox 0:17:41.480 --> 0:17:44.480 Blader has to say about all this. She's founder of 0:17:44.480 --> 0:17:47.280 managing partner at Fox Capital. It's an early stage VC firm. 0:17:47.280 --> 0:17:51.680 That she launched last year. She joins us from France. Ruth, 0:17:51.720 --> 0:17:55.639 good to have you with us. Have you invested in 0:17:55.680 --> 0:18:01.960 any of these LM companies like Athropic open AI. 0:18:03.840 --> 0:18:07.119 You know, I haven't, and that's partly because the fund 0:18:07.200 --> 0:18:10.520 that I run is not a multi billion dollar platform. 0:18:10.560 --> 0:18:13.280 I think that if you're getting involved with actually building 0:18:13.359 --> 0:18:16.679 large language models, you really need to be able and 0:18:16.720 --> 0:18:21.400 willing to deploy massive amounts of venture capital into these projects. 0:18:21.400 --> 0:18:24.480