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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Applecarclay and Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: With your data dependent And we got that you mission number,

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Speaker 2: that final rease.

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Speaker 3: So let's go to Jorana Shue, Surveys of Consumers, Director

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Speaker 3: for the University of Michigan. University of Michigan sentiment came

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Speaker 3: out seventy one point one. The consensus was seventy three

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Speaker 3: point two. Joanne, what does the data tell you here?

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Speaker 4: The consumers are really not sure about what's going to

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Speaker 4: be going on in the future, particularly with this administration change.

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Speaker 4: We're of course.

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Speaker 5: Seeing partisan differences.

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Speaker 4: Republicans are feeling pretty optimistic about the future, Democrats less so.

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Speaker 4: And this is really coming down to a difference in

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Speaker 4: opinion about what Trump's anticipated policies are going to result

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Speaker 4: in for the economy.

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Speaker 2: What about the inflation expectations? Like which kind of changes

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Speaker 2: do we see there? Because of course we're all waiting

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Speaker 2: to see if tariffs do come down, will they wind

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Speaker 2: up being inflationary.

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Speaker 4: So inflation expectations for the short run they surged quite

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Speaker 4: a bit between December and January, and they went up

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Speaker 4: as well for the long run three point zero in December,

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Speaker 4: three point two this month. Consumers are really quite concerned

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Speaker 4: about tariffs, and actually concerned in different ways.

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Speaker 5: Democrats.

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Speaker 4: People who believe that tariffs are better for the economy,

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Speaker 4: they think that inflation is going to plummet. People who

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Speaker 4: think that tariffs are bad for the economy, they think

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Speaker 4: that inflation is going to come surging back. So overall,

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Speaker 4: consumers have already incorporated expected tariffs into their economic attitudes.

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Speaker 6: All right, Joanne, thank you so much. We appreciate that.

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Speaker 3: Joan Shue Surveys of Consumers, Director for the University of

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Speaker 3: Michigan and University of Michigan headline number came out. Sentiment

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Speaker 3: number seventy one point one was the actual. The consensus

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Speaker 3: was seventy three point two, and was seventy three point

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Speaker 3: two in the prior period. So, as Joanne was saying,

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Speaker 3: some concerning out there, perhaps about some changes in economic policies,

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Speaker 3: at least initially.

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Speaker 1: live weekdays at ten am Eastern on Applecarplay and Android

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Speaker 1: Just say Alexa play Bloomberg eleven thirty.

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Speaker 3: Alex Deal Paul Sweeney live here in our Bloomberg Interactive

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Speaker 3: Broker Studio, streaming live on YouTube as well. The easiest

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Speaker 3: way to find it I found is just go to

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Speaker 3: Bloomberg YouTube dot com search Bloomberg Podcast Live.

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Speaker 6: And it comes right up. So how tough is that?

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Speaker 3: It is Friday, which means we talked to one be

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Speaker 3: Ridholt's barrier. Ridolts, he does this podcast thing. I think

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Speaker 3: it's kind of popular. The host of Masters and Business

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Speaker 3: on Bloomberg Radio is also the founder of Erdtholt's wealth

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Speaker 3: management Barry Make America great Again. One could look at

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Speaker 3: the economic data and say, country's doing pretty well.

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Speaker 6: How do you think about it?

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Speaker 7: Yeah, you know, this is the second time President Trump,

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Speaker 7: first in twenty seventeen, now in twenty twenty five, inherited

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Speaker 7: a really robust economy. So we'll just look at the

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Speaker 7: previous year and when you look at his first term,

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Speaker 7: the worst effects of the financial crisis had faded. Things

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Speaker 7: had been on the upswing, at least enough for President

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Speaker 7: Obama to get re elected in twenty twelve. By twenty sixteen,

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Speaker 7: you know, we were really flying. Market was at a

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Speaker 7: new all time high, and the economy is doing pretty well.

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Speaker 7: Here we are twenty twenty five, twenty twenty four, GDP

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Speaker 7: is going to be pretty close to three percent for

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Speaker 7: the year. Unemployment is at four point one percent, that's

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Speaker 7: close to full employment. Inflation is back under three percent

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Speaker 7: heading towards two. We can argue if two percent is

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Speaker 7: a credible inflation target in a fiscal stimulus environment, but

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Speaker 7: two point seven percent headline CPI wages are higher, markets

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Speaker 7: are at record highs, corporate profits are record highs. I

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Speaker 7: could make the case that America is already, at least

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Speaker 7: economically speaking, pretty great.

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Speaker 5: Right. So that makes me feel two things.

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Speaker 2: One either freaked out that there's only room to you

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Speaker 2: for downside or two, well, then you add on, say deregulation,

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Speaker 2: and you add on lower taxes, and we're going to

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Speaker 2: see some better times too.

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Speaker 7: So first, you know, it's very hard to say the

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Speaker 7: economy is doing really well, and like a person who's

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Speaker 7: enjoyed a great, healthy, long life lifespan. They don't just

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Speaker 7: suddenly roll over and die. The economies don't just trip

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Speaker 7: and face plants, at least not develop large ecout He's

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Speaker 7: like the US. So you know, I had to I

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Speaker 7: have coming up in a week or so Torsten Slock

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Speaker 7: from Apollo Global Management, and he puts the risk of

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Speaker 7: recession at zero percent. Listen, I don't put anything at

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Speaker 7: zero percent, but that get you know, we could a

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Speaker 7: meteor that killed the dinosaurs. There's more than a zero

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Speaker 7: percent chance that that happens this weekend. It's close to

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Speaker 7: zero percent. So I think what he's trying to say

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Speaker 7: is this economy is firing on all cylinders. Wherever you look,

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Speaker 7: there is strength. And if you look at how poorly

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Speaker 7: the rest of the economists world have done over the

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Speaker 7: past few years, consistently forecasting recession, slow down this, I

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Speaker 7: think they underestimate the strength of the US economy. The

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Speaker 7: if you look around we have are suffering from labor shortages,

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Speaker 7: is housing shortages, automobile shortages. That's a big driving factor

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Speaker 7: in preventing any sort of softness to happen, because anytime

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Speaker 7: you know, a new house gets built, it gets bought

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Speaker 7: up right away. Anytime there are qualified people in a

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Speaker 7: labor pool, they get hired right away. And so it's

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Speaker 7: to say nothing of all of the positive activity activity

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Speaker 7: we've seen over the past few years, not just AI,

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Speaker 7: but data centers and software and technology. Those things tend

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Speaker 7: to have momentum and they tend to persist. That's not

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Speaker 7: a week to week or month to month economic factor.

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Speaker 7: Those are drivers that can last years and years, almost

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Speaker 7: a decade. So we just have a lot of economic

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Speaker 7: tailwinds behind us, and people have just been way too negative.

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Speaker 7: That's before we get to the positives. And this administration

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Speaker 7: is potentially a mixed bag the risks and opportunities.

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Speaker 6: But from a market.

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Speaker 7: Perspective, there certainly are a lot of opportunities coming.

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Speaker 3: Barry, Are you concerned at all about potential headwinds coming

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Speaker 3: from either tariffs or material changes to immigration policy that

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Speaker 3: may be inflationary, that may harm the labor market, any

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Speaker 3: of those types of things.

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Speaker 7: Yeah, everything comes down to interest rates all the risk

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Speaker 7: So there are risky policies from the Trump administration, and

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Speaker 7: there are opportunistic policies from Trump two point zero. The

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Speaker 7: risky policies all come down to interest rates. The wildcard

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Speaker 7: factor of geopolitics. I have no idea what he's going

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Speaker 7: to do with China, Russia, in the Middle East. You know,

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Speaker 7: risk of let's not even talk about war, just disruption

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Speaker 7: is problematic. I don't know how else to describe tariffs

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Speaker 7: other than a price increase paid for by domestic consumers.

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Speaker 7: You know, the FED has talked about tariffs as inflationary

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Speaker 7: and potent preventing even more rate decreases. When Trump actually

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Speaker 7: made his presentation at Davos, he not only called on

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Speaker 7: lower oil prices from Opek, he called for lower rates

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Speaker 7: from all the central banks around the world. Well, we

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Speaker 7: import a ton of oil and petroleum products from Canada.

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Speaker 7: If you're going to slap a ten or a twenty

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Speaker 7: percent level rate on that, guess what That's going to

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Speaker 7: be inflationary. So I'm a little concerned about this. My

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Speaker 7: wishful thinking is, hey, this is a negotiating tactic, and

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Speaker 7: to be fair, much of the tariffs around the world

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Speaker 7: are not even handed. You cannot have a ten twenty

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Speaker 7: thirty percent tariff on US goods and it's less manufactured

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Speaker 7: goods than it is agricultural or all the energy we're

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Speaker 7: exporting liquefied natural gas as well as various forms of petroleum.

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Speaker 7: There needs to be some fairness and parody. So while

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Speaker 7: many of my friends on the left scream about, oh,

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Speaker 7: this is going to be terrible, Hey, there's a case

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Speaker 7: to be made. There's a reasonable negotiation to get some fairness.

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Speaker 7: It has to be a two way street. It can't

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Speaker 7: just be American consumers wealthy as though they are paying

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Speaker 7: most of the tariffs in the world. That doesn't seem

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Speaker 7: to be fair. Hopefully we can get some positive resolution

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Speaker 7: to the tariff question.

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Speaker 2: So and then it all brings back to sequencing, right,

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Speaker 2: Like tariffs will probably hit faster than maybe deregulation and

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Speaker 2: corporate taxes, but the sequencing may not matter if we

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Speaker 2: know that, say, deregulation and corporate taxes are coming.

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Speaker 5: Is that a fair assessment.

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Speaker 6: You know?

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Speaker 7: I that's a really interesting question because I have no

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Speaker 7: idea of what the sequencing sequencing is going to be. Like,

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Speaker 7: anything that's going to require Congress is going to take longer.

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Speaker 7: But a perfect example, the FTC on President Biden was

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Speaker 7: pretty aggressive in restraining.

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Speaker 6: M and A activity.

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Speaker 7: I mean, to be fair, the FTC has been asleep

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Speaker 7: at the switch for three decades and have allowed an

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Speaker 7: intense concentration of corporate power. Anyone who's bought a concert

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Speaker 7: ticket knows how ridiculous the Live Nation Ticketmaster merger was allowed,

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Speaker 7: and you could say the same thing about You could

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Speaker 7: say the same thing about a lot of other technology

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Speaker 7: mergers that have been allowed. There's far fewer healthcare companies,

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Speaker 7: far fewer energy companies. It's it's really become a little

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Speaker 7: bit of a corporatetocracy. But you know, a defanged FTC

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Speaker 7: is going to allow more m and a activity generally

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Speaker 7: that supportive of higher market prices. There'll be no scrutiny

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Speaker 7: on stock buy backs, so that tends to support higher prices.

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Speaker 7: You know, the IPO market's been pretty dead for a

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Speaker 7: few years. That's gonna start coming back to life, as

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Speaker 7: well as secondaries, to say nothing of the deregulation to

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Speaker 7: specific sectors. So think about healthcare and energy. I can't

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Speaker 7: it's hard to imagine. We've been producing record amounts of

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Speaker 7: oil in the United States the past few years. They're

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Speaker 7: going to open up even more areas.

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Speaker 8: Now.

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Speaker 7: The politics of that is a little bit divisive, but

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Speaker 7: just being cold blooded and looking at it from an

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Speaker 7: economic perspective. Hey, more energy means lower more petroleum means

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Speaker 7: lower oil prices, which is anti inflationary. Same with materials.

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Speaker 7: Energy and materials were two of the worst sectors last year.

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Speaker 7: Maybe they catch.

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Speaker 6: A bit Barry, real quick, what are you driving this

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Speaker 6: weekend in this weather?

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Speaker 7: The truck, I'm gonna be out in something with heated

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Speaker 7: seats and a heated steering wheel, and I don't really

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Speaker 7: care about hand or I'm looking out my home office window.

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Speaker 7: Everything is still snowed over, still iced over, and the

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Speaker 7: thermostat says we're still in the teens. Hopefully by Sunday. Well,

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Speaker 7: we'll get out of this deep freeze and I could

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Speaker 7: take something out like any of the fun cars. Their

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Speaker 7: tires are just terrible in twenty degree weather. They have

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Speaker 7: no grip.

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Speaker 4: Well.

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Speaker 5: Also, though teens is kind of a heat wave, so

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Speaker 5: at this point.

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Speaker 6: Yeah, look at that one. Get them to thirties on Sundays.

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Speaker 5: I mean that's like bathing suit weather. Barry. We appreciate you,

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Speaker 5: Thank you very much.

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Speaker 2: Barry Red Holts, founder and CEO of Holt's Wealth Management.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 3: Let's get it right to our next guest. Macunda, has

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Speaker 3: been kind enough to chat with us over the last

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Speaker 3: several months give us his thoughts on what's happening down

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Speaker 3: in Washington, DC. He's a professor at the Yale School

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Speaker 3: of Management. Qualtam, Thanks so much for joining us here.

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Speaker 3: You just know you listen to President Trump makes some

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Speaker 3: comments here. What are your initial thoughts here of these

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Speaker 3: first several days of President Trump's second administration.

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Speaker 6: Here, as he hits the ground seemingly for running, Yeah.

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Speaker 8: I mean it's a mixture. He's definitely hitting the ground

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Speaker 8: running in some ways. So there's some element of the

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Speaker 8: rhetorical gestures that don't kind of mean a lot and

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Speaker 8: are characteristically Trumpian. Right, He's renaming the Gulf of Mexico

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Speaker 8: and the Mount Mount Mount Denali and things like that.

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Speaker 9: Okay, fine, I mean whatever.

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Speaker 8: There are a bunch of executive orders, some of which

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Speaker 8: are pretty standard, some of which are not necessarily what

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Speaker 8: they seem. The one on tariffs, for examples, basically says

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Speaker 8: that the Secretary of Commerce will consult, which isn't.

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Speaker 9: The same thing as levying them massively.

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Speaker 8: So we'll see what happens on that next And then

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Speaker 8: there's a bunch of stuff that is going to do

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Speaker 8: a lot of long term damage, but the effects may

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Speaker 8: not be seen right away. The United States withdrawing from

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Speaker 8: the World Health Organization. I think we had a pretty

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Speaker 8: dramatic example quite recently about the importance of global public health.

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Speaker 8: So you know, we might worry about the effects of that,

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Speaker 8: the US pulling out of climate change agreements. Those things

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Speaker 8: are going to do a lot of harm, but it

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Speaker 8: may not be perceptible in the next year or two,

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Speaker 8: or even the next four or five years. That might

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Speaker 8: be a problem for the.

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Speaker 5: Successor exactly, which brought me to mind.

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Speaker 2: It brings me to my next question, and we were

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Speaker 2: talking about this earlier, is what is a sequencing because

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Speaker 2: that matters, right if you have deregulation and you have

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Speaker 2: tax cuts, that's obviously going to be positive. It feels

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Speaker 2: like the equity market's really focused on that versus say,

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Speaker 2: the tariff issue, which could come actually earlier maybe than

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Speaker 2: we think, but it has doesn't have a lot of

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Speaker 2: clarity what's your sequencing modeling.

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Speaker 8: So the sequencing a lot depends on the Republican Congress

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Speaker 8: and the Republican Caucus in the House, which at the

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Speaker 8: moment is sitting on a one seat margin. So the

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Speaker 8: you know, herting cats is easy compared to what they're

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Speaker 8: going to try to do here, and in particular, the

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Speaker 8: tax cussings like all that is also going to get

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Speaker 8: revolve around the debt ceiling increase, which will almost certainly

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Speaker 8: need democratic health. So there are going to be some

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Speaker 8: significant tax cuts that will be slanted towards corporations the wealthy.

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Speaker 8: There's going to be massive regulation deregulation in ways that

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Speaker 8: will be very, very favorable to corporate interest, like that

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Speaker 8: is an inevitability with Trump. But the sequencing is completely

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Speaker 8: got in the air and depends on you know, getting

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Speaker 8: every essentially every single Republican member of Congress degree on

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Speaker 8: a policy agenda.

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Speaker 9: Good luck.

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Speaker 8: I'd rather know if somebody offered me that job, I

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Speaker 8: wouldn't want to take it.

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Speaker 3: Well, I'm one of the I guess one of the

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Speaker 3: more near term issues that needs to be addressed by

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Speaker 3: the Trump administrations getting some of their cabinet nominees confirmed

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Speaker 3: They've made some major headway with Secretary Rubio, but still

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Speaker 3: some contentious ones to come with mister Hegseth, RFK Junior,

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Speaker 3: Tolca Gabbard to name three.

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Speaker 6: How do you expect this to play out?

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Speaker 8: Yeah, So Susan Collins and Lisa Murkowski have said that

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Speaker 8: they're not voting for Pete Haggseth, so we're basically down

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Speaker 8: to they'd have to lose two more Republican senators. The

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Speaker 8: most likely person to flip at this point is Mitch McConnell.

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Speaker 8: After that, I don't really see a fourth. So my

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Speaker 8: guess is he's going to get all of these people through.

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Speaker 9: And that I mean.

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Speaker 8: In particular you think about Hegseth governed to a lesser extent,

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Speaker 8: but Cash Battel of the FBI. These are people for

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Speaker 8: whom there is no argument that these are people who

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Speaker 8: should be running the use agencies right.

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Speaker 9: That there is no sense that they're qualified to do so.

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Speaker 8: There is nothing in their background that makes it seem

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Speaker 8: like they'll be stuff the idea that Pete Hegseth, who

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Speaker 8: was fired for mismanagement at two different tiny nonprofits, is

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Speaker 8: capable of running the largest bureaucracy on the face of

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Speaker 8: the planet. I mean, if you actually right, if you

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Speaker 8: said that you actually care about the qualifications, people that

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Speaker 8: start laughing, right, Like the idea, it's just absurd. And

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Speaker 8: so putting these people in seems a lot more about

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Speaker 8: being willing to use the organs of the felt government

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Speaker 8: to in, you know, for domestic political purposes, or even

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Speaker 8: to go after Trump's enemies than it is some sense

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Speaker 8: that like cash, fattel of all people on earth is

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Speaker 8: when you can make the FBI a lean, mean crime

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Speaker 8: fighting machine.

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Speaker 6: Well, I mean, yeah, the counter argument is new blood.

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Speaker 3: Maybe that's let's get some of the you know, get

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Speaker 3: some new blood downwashed in dc new ways of thinking.

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Speaker 9: So I really.

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Speaker 8: Appreciate you saying that, because that is what both my

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Speaker 8: first two books were about, right, the virtues of new

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Speaker 8: blood and the advantages of bringing people in. So you

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Speaker 8: will find no one on earth who's more positive about

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Speaker 8: the ideas that you can bring in new thinking and

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Speaker 8: make new changes than me.

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Speaker 9: I believe that. But right, not all changes are good.

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Speaker 8: There's a famous the famous thing soldiers and politicians logic,

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Speaker 8: you know, we must do something, this is something, therefore

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Speaker 8: we must do this right, And that's not right, there

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Speaker 8: are many, many more ways to break an institution than

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Speaker 8: to fix it. And if you look at the Pentagon,

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Speaker 8: no institution needs massive reform more than the Pentagon. And

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Speaker 8: if you need it to do that, you would ask, say,

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Speaker 8: you know, I'm someone who had deep expertise and running

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Speaker 8: a major procurement program or someone.

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Speaker 9: Who had really understood the federal bureaucracy.

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Speaker 8: You would not get someone who had, you know, essentially

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Speaker 8: was fired for mismanagement from their for last two joints. Right,

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Speaker 8: if you were running if Apple, if Apple said they

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Speaker 8: were going to replace Tim Cook with someone like that,

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Speaker 8: you might say, well, Apple could use some fresh thinking,

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Speaker 8: but I'm not sure that's where the fresh thinking.

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Speaker 9: Is likely to come from.

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Speaker 2: Okay, well fresh me decide. Doge is obviously front and

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Speaker 2: center too. We saw the Vekwamaswami leaving Doge to maybe

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Speaker 2: govern for governor, the lawyer apparently leaving dough She was

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Speaker 2: there for like what seventy two hours? What are you

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Speaker 2: making on all of these headlines?

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Speaker 8: So the real thing that it was that happened, and

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Speaker 8: you know, and it is a real distinction between the

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Speaker 8: first Trump administration the second Trump administration is the second

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Speaker 8: one seems to be a lot more bureaucratically competent. And

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Speaker 8: so what they essentially did was repurpose the Federal Digital Service,

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Speaker 8: which was created in response to the you know, the

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Speaker 8: Obama Care web page fiasco, to improve the technical capabilities

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Speaker 8: of the federal government. They repurpose that into DOGE, which

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Speaker 8: gives DOGE access to essentially all the non classified information

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Speaker 8: in the federal government, gives it in every It is

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Speaker 8: a brilliant bureaucratic move, and it suggests that DOGE may

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Speaker 8: actually have a lot more impact on the government than

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Speaker 8: we had originally thought it would when it first started

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Speaker 8: looking like kind of a you know, essentially a committee

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Speaker 8: that was an issue a report.

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Speaker 9: The problem there again is.

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Speaker 8: Going back is what we just saw, for example, is

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Speaker 8: a communications freeze. For example at NIH, so NIHS stopped

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Speaker 8: reviewing all grants, they've stopped working with all scientists. NIH

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Speaker 8: is the foundation for basically all biomedical research, not just

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Speaker 8: in the United States, but really in the entire world.

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Speaker 9: It spends forty seven and.

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Speaker 8: A half billion dollars a year, and biomedical research in

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Speaker 8: the world, things that we rely on to cure diseases

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Speaker 8: just doesn't happen without anih. That kind of a freeze

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Speaker 8: does real meaningful harm to scientific research for every day

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Speaker 8: that it goes on, and it seems to have an

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Speaker 8: is quite propriciously without even any sort of explanation as

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Speaker 8: to why we're doing this or how it makes sense.

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Speaker 8: So that kind of thing is where if those does

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Speaker 8: things like that, I'd be pretty concerned, as opposed to,

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Speaker 8: you know, optimistic where the massive federal government reforms will

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Speaker 8: all overview.

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Speaker 6: Yep, all right, wewtam, thank you so much. We appreciate it.

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Speaker 3: Gout Themconda, Professor at the Yale School of Management.

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