WEBVTT - Bloomberg Surveillance TV: April 27th, 2026 0:00:02.360 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordert. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.400 Terminal and the Bloomberg Business app. Also tracking the latest 0:00:37.400 --> 0:00:40.360 developments between Iran and the United States. The latest from 0:00:40.360 --> 0:00:42.279 axios This morning, A round gave the US a new 0:00:42.320 --> 0:00:45.240 proposal for reaching a deal on reopening the streadufor mers 0:00:45.280 --> 0:00:48.120 and ending the war, with nuclear negotiations postponed for a 0:00:48.200 --> 0:00:50.280 later stage. This is a view from Normal Rule of 0:00:50.320 --> 0:00:52.960 csis this morning. Right in the following, the most likely 0:00:53.080 --> 0:00:55.560 course over the coming week is continuation of the current 0:00:55.600 --> 0:01:00.960 blockade and indirect diplomacy and narrow maritime arrangement remains possible. 0:01:01.080 --> 0:01:03.240 Norm joined us now for more Normal One. Welcome to 0:01:03.240 --> 0:01:07.600 the program. That last line a narrow maritime arrangement remains possible. 0:01:07.640 --> 0:01:09.040 Normal what do you mean by that? And what kind 0:01:09.080 --> 0:01:10.480 of arrangement might we see? 0:01:11.760 --> 0:01:14.800 Good morning, And first, it's good to see Anne Marie 0:01:14.880 --> 0:01:17.360 here and I'm glad that she is safe, and obviously 0:01:17.400 --> 0:01:21.960 the President and the other attendees. It's possible that some 0:01:22.000 --> 0:01:24.959 sort of arrangement to allow a limited amount of humanitarian 0:01:25.000 --> 0:01:28.679 goods could go through, but that itself remains unlikely. And 0:01:28.760 --> 0:01:32.160 here's why. In essence, the United States and Iran each 0:01:32.200 --> 0:01:34.480 see the straight up horror moves is normally the focal 0:01:34.520 --> 0:01:37.880 point for this, but their main pressure point over the other. 0:01:38.240 --> 0:01:41.720 We're now on a three o'clock contest. The United States 0:01:41.760 --> 0:01:44.200 sees the control over the straight of horror moves is 0:01:44.200 --> 0:01:47.960 its sole opportunity to squeeze the Iranian economy, and that's 0:01:48.000 --> 0:01:52.480 a real pressure point. Inflation is rising in Iran and 0:01:53.280 --> 0:01:56.880 it's enduring. Real economic pain is it's oil industry shuts down. 0:01:57.200 --> 0:02:00.400 But the Iranians know the war power situation is coming 0:02:00.440 --> 0:02:04.880 to a head this Friday. It's only a political issue 0:02:04.880 --> 0:02:06.560 in the near term for the president, but it's a 0:02:06.600 --> 0:02:08.960 real one. And of course economic pressure in the world 0:02:09.080 --> 0:02:13.480 is coming forward. So you've got a situation where each 0:02:13.520 --> 0:02:17.720 side is in this viewpoint that the straight uphoor moves 0:02:17.800 --> 0:02:21.520 is the central pressure point for each other. But there's 0:02:21.600 --> 0:02:24.480 just a narrow, narrow deal that is out there. But 0:02:24.480 --> 0:02:28.120 we're in essence negotiating on whether we should be negotiating, 0:02:29.160 --> 0:02:32.120 and the Iranians see the straight uphom moves as their 0:02:32.200 --> 0:02:34.240 chance to get out of jail economically. 0:02:34.480 --> 0:02:36.160 No, I'm nice to see you too this morning. Could 0:02:36.200 --> 0:02:40.160 this maritime arrangement mean or is accepted by the United States? 0:02:40.440 --> 0:02:42.960 If Iran continues to have a toll and continue to 0:02:43.080 --> 0:02:45.640 control it, even if ships can pass through. 0:02:46.600 --> 0:02:49.640 That's unlikely. And let me explain why the United States 0:02:49.680 --> 0:02:52.080 sees that the only way that it's been able to 0:02:52.120 --> 0:02:55.880 bring Iran to the table is for meaningful talks has 0:02:55.960 --> 0:03:00.840 been through economic pressure and military pressure. If the straight 0:03:00.919 --> 0:03:03.560 up removes is open, well, the first thing that's going 0:03:03.600 --> 0:03:06.120 to happen is what is the purpose of the entire 0:03:06.280 --> 0:03:08.640 US military presence in the region. Are we going to 0:03:08.639 --> 0:03:11.280 maintain three aircraft carriers in the region if there was 0:03:11.360 --> 0:03:16.960 no blockade? That's unlikely. So if the military pressure is removed, 0:03:16.960 --> 0:03:19.720 if the economic pressure is removed, what do you think 0:03:19.760 --> 0:03:21.919 the chances are that the Iranians are going to come 0:03:21.960 --> 0:03:25.560 to the table with any serious negotiating position. Now, they'll 0:03:25.560 --> 0:03:27.480 come to the table, and they have done this for 0:03:27.760 --> 0:03:31.280 years with multiple administrations. But its history is shown with 0:03:31.320 --> 0:03:33.560 the Iranians. They come to the table to talk. That 0:03:33.600 --> 0:03:35.440 doesn't mean they come to the table to talk about 0:03:35.480 --> 0:03:39.320 anything seriously. And the Trump administration, in fairness, knows this 0:03:39.480 --> 0:03:40.440 history quite well. 0:03:40.560 --> 0:03:43.960 Mohammagolibov on Twitter was talking about supply cars that the 0:03:44.040 --> 0:03:47.240 regime could still use. The bab al Mundeb straight, he says, 0:03:47.280 --> 0:03:50.280 is unplayed as well as pipelines. Is this just a 0:03:50.360 --> 0:03:52.600 threat or do you think that we could see real escalation. 0:03:53.680 --> 0:03:56.800 Well, it's probably more accurate to say someone typing on 0:03:56.840 --> 0:04:01.360 Twitter and the name of or Colliboth is stating this. 0:04:01.440 --> 0:04:05.280 The Iranians do have the capability of resuming hostilities, but 0:04:05.600 --> 0:04:10.160 bellicost rhetoric has long been a mainstay of Iran's public diplomacy. 0:04:10.880 --> 0:04:13.200 It's a possibility, but at the same time, we have 0:04:13.320 --> 0:04:16.479 three aircraft carrier task forces in the region, which have 0:04:16.560 --> 0:04:22.640 an enormous military capacity to produce quite a significant amount 0:04:22.680 --> 0:04:26.120 of destruction against Iran's and civilian infrastructure. 0:04:26.960 --> 0:04:30.240 Normal I'm curious about the economic blockade that the US 0:04:30.320 --> 0:04:32.560 is engaging with, and how much leverage is giving the 0:04:32.680 --> 0:04:35.640 United States versus Iran given the fact that it is 0:04:35.680 --> 0:04:38.440 starving them of much needed dollars and there's discussion about 0:04:38.480 --> 0:04:40.839 descent among the ranks who aren't getting paid. Do you 0:04:40.839 --> 0:04:43.480 have a sense of how long Iran has to hold 0:04:43.480 --> 0:04:46.040 out versus the US and its allies. 0:04:47.080 --> 0:04:49.560 No, and that information is not going to be known 0:04:49.720 --> 0:04:54.039 outside of probably Iran and intelligence services. Now, Iran is 0:04:54.040 --> 0:04:56.719 going to hold that data very close. It doesn't want 0:04:56.720 --> 0:05:00.240 the world to see that the pain of that being 0:05:00.279 --> 0:05:04.359 imposed by the economic blockade, nor the military damage is 0:05:05.440 --> 0:05:09.400 how serious that is going is to actually being felt 0:05:09.600 --> 0:05:12.760 because it's going to want to appear to be robust, defiant. 0:05:13.279 --> 0:05:16.000 Not much is happening, but the pain is genuine, and 0:05:16.040 --> 0:05:18.960 it's likely that the administration has a good idea of 0:05:18.960 --> 0:05:23.599 this and for this reason is willing to hold off 0:05:23.640 --> 0:05:27.440 on negotiations. So you've got each side understanding the pain 0:05:27.480 --> 0:05:29.600 of the other. It's just that the Iranians can see 0:05:29.600 --> 0:05:32.520 the US political pain because our system is open for 0:05:32.600 --> 0:05:35.000 the United States, it's going to have to assess this 0:05:35.120 --> 0:05:37.560 through other means. 0:05:38.240 --> 0:05:41.680 Stay with US. Mul Bloomberg surveillance coming up after this. 0:05:51.080 --> 0:05:53.359 So here's the LAist this morning, Kevin Walsh clearing a 0:05:53.400 --> 0:05:55.800 major hurdle to become the next FED chair after the 0:05:55.920 --> 0:05:58.040 d O j drompt It's probe into the Central Bank 0:05:58.120 --> 0:06:01.680 the Senate Banking Committee Center on Wednesday, Sona Designed Franklin 0:06:01.720 --> 0:06:04.440 Templeton joins us now for more. So, good morning, good morning. 0:06:04.440 --> 0:06:05.920 We can get into the future of a Federal Reserve 0:06:05.960 --> 0:06:07.600 under Kevin Walsh in just the moment. I just want 0:06:07.640 --> 0:06:11.040 to get through the Federal Reserve current chair Chairman Powell 0:06:11.040 --> 0:06:12.720 and what's going to happen to him. So some key dates. 0:06:12.760 --> 0:06:15.760 So May twenty fifth is when his term finishes as 0:06:15.839 --> 0:06:17.840 FED chair. Twenty twenty eight you can stay on the 0:06:17.839 --> 0:06:20.240 board as a FED governor. Which date do you think 0:06:20.320 --> 0:06:21.000 is going to choose here? 0:06:21.720 --> 0:06:25.920 You know, number one, I don't know. It really depends 0:06:25.960 --> 0:06:27.839 on what he wants to do. But number two, I'm 0:06:27.880 --> 0:06:31.839 not sure it matters. It really doesn't matter. This notion 0:06:32.120 --> 0:06:35.960 that somehow the current Feed chair is the only thing 0:06:36.400 --> 0:06:39.880 standing behind complete loss of credibility of the FED and 0:06:40.560 --> 0:06:43.440 whatever else lies ahead, I think that's misguided. I think 0:06:43.600 --> 0:06:47.920 that the institution is relatively strong and enormously dubvish. So 0:06:48.040 --> 0:06:50.880 I don't think that it's just J Powell. 0:06:50.680 --> 0:06:53.960 Who stands between enormously duvish. Does that change with the 0:06:54.040 --> 0:06:55.280 change of one man then no? 0:06:55.640 --> 0:06:59.320 I actually, you know so again, this entire focus on 0:06:59.520 --> 0:07:03.240 loss of credibility for the FED seems to really focus 0:07:03.320 --> 0:07:05.800 on the idea that this is what is going to 0:07:05.880 --> 0:07:08.239 cause the FED to lose credibility. And I would argue 0:07:08.640 --> 0:07:10.920 the FED actually did it to itself, and it monetized 0:07:10.960 --> 0:07:13.440 fiscal deficits of close to twenty five percent of GDP 0:07:14.000 --> 0:07:16.560 over a two year period. I'll just repeat twenty twenty one, 0:07:16.680 --> 0:07:19.680 twenty twenty two. So everything since then is the FED 0:07:19.760 --> 0:07:22.800 trying to regain credibility. And I don't happen to think 0:07:23.200 --> 0:07:25.640 that Kevin Walsh is going to change that dynamic. 0:07:25.760 --> 0:07:27.720 Well, there is this question about whether he is going 0:07:27.800 --> 0:07:29.600 to be dubbish, whether he's going to cut rates even 0:07:29.640 --> 0:07:32.040 in the face of inflation that potentially is stickier for 0:07:32.120 --> 0:07:34.360 longer as a result of what's going on with oil prices. 0:07:34.960 --> 0:07:35.640 Do you agree with that? 0:07:35.720 --> 0:07:37.920 I mean, do you think that this is ultimately someone who, 0:07:38.160 --> 0:07:39.720 even though he has been hawkished for most of his 0:07:39.840 --> 0:07:42.880 career will skew dubbish in the face of political pressure. 0:07:43.400 --> 0:07:46.800 So I would say if he does q dubvish, I 0:07:46.800 --> 0:07:49.400 would be surprised because the biggest thing he's talked about 0:07:49.680 --> 0:07:55.360 is the idea of taking monetary policy back to its 0:07:55.480 --> 0:07:59.240 orthodox roots, which mean you don't buy long end treasury 0:08:00.160 --> 0:08:05.000 the US FEDS. If the Fed's overall balance sheet had 0:08:05.080 --> 0:08:08.400 expanded at the average base of nominal GDP, we would 0:08:08.400 --> 0:08:10.080 be looking at a balance sheet of around one and 0:08:10.120 --> 0:08:12.480 a half to one point six trillion today as opposed 0:08:12.480 --> 0:08:14.920 to close it to what is it, eight trillion, So 0:08:15.040 --> 0:08:17.120 we're looking at somebody who's taking the FED back to 0:08:17.200 --> 0:08:20.480 its roots, and I think that's on balance. 0:08:20.560 --> 0:08:21.440 What is more important? 0:08:21.600 --> 0:08:25.640 Will he cut rates? I think if the situation demands it. 0:08:25.840 --> 0:08:27.800 Right now, I'm not calling for more FED rate cuts 0:08:27.840 --> 0:08:29.440 this year based on fundamentals. 0:08:29.760 --> 0:08:31.640 So where does this leave you in terms of your 0:08:31.680 --> 0:08:35.240 market expectation, Because listening to that, I could make two ideas. One, 0:08:35.360 --> 0:08:37.760 if he really is going to be hawkish potentially based 0:08:37.800 --> 0:08:39.199 on what he's said in the past, or at least 0:08:39.200 --> 0:08:41.760 trying to reframe the FED around its old framework, well, 0:08:41.880 --> 0:08:44.840 then two percent inflation remains two percent inflation. I would 0:08:44.840 --> 0:08:47.079 buy long bonds because ultimately that would be very different 0:08:47.080 --> 0:08:47.679 scenario than. 0:08:47.640 --> 0:08:49.719 Say a Duvish FED. If this is someone who's not 0:08:49.760 --> 0:08:50.000 going to. 0:08:49.960 --> 0:08:52.319 Be buying long term bonds, on the other hand, that's 0:08:52.360 --> 0:08:54.160 potentially a pressure where do you line up on that? 0:08:54.440 --> 0:08:57.319 So right now I'm not buying long bonds here because 0:08:57.320 --> 0:09:00.199 I don't think long bonds are yet fully pricing what 0:09:00.360 --> 0:09:02.079 I think is going to happen, and you've got to 0:09:02.080 --> 0:09:03.080 look into a multi. 0:09:02.880 --> 0:09:05.120 Year period here, and I hear that. 0:09:05.240 --> 0:09:08.000 Where I disagree with Kevin Walsh is his idea that 0:09:08.920 --> 0:09:12.800 productivity stronger productivity growth is necessarily going to lead to 0:09:13.200 --> 0:09:16.520 a lower, call it a neutral nominal FED funds rate. 0:09:16.559 --> 0:09:17.640 I don't actually agree. 0:09:17.440 --> 0:09:20.720 Because that Fed funds rate is a combination of inflation 0:09:21.360 --> 0:09:25.720 and long term productivity. So the idea that the disinflation 0:09:25.840 --> 0:09:28.320 from productivity is going to be enough to make up 0:09:28.400 --> 0:09:32.319 for the increase in productivity, I'm not sure that works. 0:09:32.360 --> 0:09:34.920 I'm not sure that the round of productivity increases we 0:09:35.000 --> 0:09:37.719 are going to get this time will necessarily be disinflationary. 0:09:37.960 --> 0:09:40.560 So what I mean by this is two percent productivity growth, 0:09:40.600 --> 0:09:45.160 two percent inflation, four percent FED funds neutral rate. I'm 0:09:45.240 --> 0:09:47.400 not sure we're at two percent inflation, and I actually 0:09:47.440 --> 0:09:50.360 think we're going to get higher than two percent productivity growth. 0:09:50.480 --> 0:09:53.040 So if anything, I think neutral FED funds is higher. 0:09:53.200 --> 0:09:55.040 Right But this FED has shown it's willing to cut 0:09:55.120 --> 0:09:57.679 interest rates even without two percent. And Foy, oh, absolutely, 0:09:57.960 --> 0:09:59.800 And wouldn't he be able to make a case to 0:09:59.840 --> 0:10:01.480 the the FMCA. 0:10:02.400 --> 0:10:05.600 He could, but not when? Not right now? 0:10:05.760 --> 0:10:08.920 And I don't think not this year. Essentially, I don't 0:10:09.000 --> 0:10:11.240 see oil prices, and this is a headline issue. I 0:10:11.360 --> 0:10:14.280 totally get that headline issue. I don't see oil prices 0:10:14.360 --> 0:10:17.959 coming down. We estimate around twenty five thirty five basis 0:10:18.000 --> 0:10:20.760 points of inflation for each ten percent increase, and oil 0:10:20.800 --> 0:10:24.240 prices you easily comfortably get closer to four. 0:10:24.760 --> 0:10:24.880 Now. 0:10:24.920 --> 0:10:25.360 I get it. 0:10:25.640 --> 0:10:26.880 They're supposed to see through it. 0:10:27.080 --> 0:10:30.120 But after the period we just came through in twenty 0:10:30.200 --> 0:10:32.480 twenty two, twenty twenty one, I doubt. 0:10:32.360 --> 0:10:34.199 That this FED is going to be cutting into that. 0:10:34.440 --> 0:10:36.719 You said something that actually you could argue that the 0:10:36.760 --> 0:10:38.920 neutral or it's higher than where it is currently. Is 0:10:38.960 --> 0:10:40.920 this a federal reserve under Kevin A. Walsh that you 0:10:40.960 --> 0:10:43.120 could see hiking as its next move? 0:10:44.200 --> 0:10:47.480 Only if we thought inflation was significantly higher. I see 0:10:47.520 --> 0:10:52.040 this FED frozen next year, could we see our FED 0:10:52.120 --> 0:10:52.680 funds higher? 0:10:52.679 --> 0:10:53.360 It's possible. 0:10:53.480 --> 0:10:55.719 It's not my baseline right now, but I'm certainly not 0:10:55.840 --> 0:10:57.840 anticipating additional cuts from TE. 0:10:57.880 --> 0:11:01.640 So what would make your baseline? What is significantly higher inflation? 0:11:01.760 --> 0:11:03.960 What is that going from three to four, four to five? 0:11:04.080 --> 0:11:06.040 What is that? So to me, it's more four to five, 0:11:06.240 --> 0:11:09.000 three to four, I believe they probably look through you 0:11:09.080 --> 0:11:11.280 start going to four to five, you're looking at second round. 0:11:11.600 --> 0:11:13.520 Do you think this labor market is strong enough, tight 0:11:13.679 --> 0:11:15.520 enough to generate that kind of inflation? 0:11:16.200 --> 0:11:18.280 You know, the labor market is pretty balanced, and I 0:11:18.360 --> 0:11:22.720 think it's improving. It's not deteriorating. Here. The data which 0:11:22.720 --> 0:11:26.120 has come out is all hawkish. It's a very difficult 0:11:26.160 --> 0:11:28.680 situation for anybody to come in and start cutting. 0:11:29.240 --> 0:11:32.640 Stay with us more Bloomberg surveillance coming up after this. 0:11:42.000 --> 0:11:44.480 Let's talk about the ongoing closure of the stratoform most 0:11:44.520 --> 0:11:48.160 sending fuel prices higher and highlighting the need for reliable energy. 0:11:48.320 --> 0:11:51.840 Olivia Wassonov, Global head of the Apollo Infrastructure Group, writing, 0:11:51.920 --> 0:11:55.520 we see rising need for investment across midstream energy and 0:11:55.640 --> 0:12:00.200 power infrastructure areas where private capital is increasingly playing an 0:12:00.200 --> 0:12:02.120 important role. Olivia joins is now for more. 0:12:02.160 --> 0:12:04.440 Ol good to see you, good morning. Thanks for having 0:12:04.440 --> 0:12:04.760 me back. 0:12:04.920 --> 0:12:06.840 Is it fair to say, and I think it's important 0:12:06.840 --> 0:12:08.560 touch base with you on this issue that this shock 0:12:08.600 --> 0:12:11.840 in the Middle East is not upending investment, it's accelerateing 0:12:11.920 --> 0:12:12.880 geit it is. 0:12:13.040 --> 0:12:15.120 I mean, I think we're all looking at a few things. 0:12:15.200 --> 0:12:19.240 We're looking at redundancy, right, We're looking at the you know, 0:12:19.320 --> 0:12:21.839 the current infrastructure in the Middle East and maybe we're 0:12:21.880 --> 0:12:26.439 there gaps. Right, You're looking at things around existing pipelines. 0:12:27.080 --> 0:12:29.559 How do we max at existing pipelines. How do we 0:12:29.640 --> 0:12:32.160 think about where there's potential for new pipelines? Can you 0:12:32.240 --> 0:12:35.440 restart old pipelines? People are being need to talk about 0:12:35.440 --> 0:12:37.760 things like a rail again. So I do think in 0:12:37.800 --> 0:12:40.640 the Middle East there's this real focus on redundancy. In 0:12:40.720 --> 0:12:42.679 the rest of the world, we're looking at where can 0:12:42.679 --> 0:12:45.280 we commensate. We announced the deal last week for a 0:12:45.400 --> 0:12:50.360 large Canadian gas infrastructure platform. We believe Canada is a 0:12:50.440 --> 0:12:53.120 really attractive market right now, especially if you look at 0:12:53.120 --> 0:12:56.280 what's going on with Canada l G and access to Europe, 0:12:57.240 --> 0:13:00.280 access to Asia really sort of a big part of 0:13:00.320 --> 0:13:02.400 the broader sort of value chain there. So we are 0:13:02.600 --> 0:13:06.000 very actively investing in other parts of the energy infrastructure globally. 0:13:06.040 --> 0:13:07.719 Well, let's go through the Global bank drop on the 0:13:07.760 --> 0:13:10.320 deals right now. You mentioned Canada, we had ADF over 0:13:10.360 --> 0:13:13.360 in the UK. Are there we in Germany? Offshore wind 0:13:13.480 --> 0:13:15.480 or stead? I believe as well. I don't want you 0:13:15.520 --> 0:13:18.080 to pick a favorite baby, but right now it's there 0:13:18.120 --> 0:13:20.440 a theme that really gets your interest out of all 0:13:20.480 --> 0:13:22.280 of those right now, off those deals that you think 0:13:22.280 --> 0:13:23.240 are the ones to watch. 0:13:24.480 --> 0:13:26.360 We've really been investing heavily in Europe. 0:13:26.760 --> 0:13:29.960 We do see this theme around making sure we're giving 0:13:30.000 --> 0:13:34.920 again real redundancy and growth in European power infrastructure. So 0:13:35.080 --> 0:13:38.920 we started RWE around the grid, we looked at EDF 0:13:39.000 --> 0:13:42.480 around nuclear, and now we're really focused on offshore wind 0:13:42.960 --> 0:13:45.920 with the RSTED deal. I mean, this is a tremendous project. 0:13:45.960 --> 0:13:47.679 If you look at the number of homes it's going 0:13:47.720 --> 0:13:52.040 to power across the UK, it's really tremendous. And we're 0:13:52.040 --> 0:13:53.959 also thinking a little bit about you how do you 0:13:54.040 --> 0:13:58.560 give really reliable long term power to supply to areas 0:13:59.120 --> 0:14:02.000 that have previously been really dependent on oil from an 0:14:02.040 --> 0:14:03.960 oil and gas from places like Russia and. 0:14:03.920 --> 0:14:04.440 The Middle East. 0:14:04.720 --> 0:14:07.360 You have a great lens because in having these discussions 0:14:07.400 --> 0:14:09.600 and these investments you have to work with policymakers pretty 0:14:09.600 --> 0:14:13.280 closely to understand exactly what their appetite is and getting clearance, 0:14:13.280 --> 0:14:16.559 et cetera and permitting. Have you noticed it changed when 0:14:16.600 --> 0:14:18.679 it comes to Europe in particular as they try to 0:14:18.760 --> 0:14:23.160 accelerate some of their reliability given the supply shocks that 0:14:23.240 --> 0:14:24.840 have come to them from all angles over the past 0:14:24.880 --> 0:14:25.440 couple of years. 0:14:25.560 --> 0:14:26.040 Absolutely. 0:14:26.040 --> 0:14:27.760 I mean we saw sort of the first start of 0:14:27.840 --> 0:14:30.520 this in twenty twenty two around the Ukraine crisis, right, 0:14:30.960 --> 0:14:32.680 and that was the first time you saw sort of 0:14:32.720 --> 0:14:35.080 a pan European focus on, Okay, how do we make 0:14:35.160 --> 0:14:37.640 sure we're really more prepared longer term. 0:14:38.000 --> 0:14:39.400 Now with what's going on in Middle East. 0:14:39.480 --> 0:14:41.480 You had a big announcement out of Europe last week 0:14:41.520 --> 0:14:44.320 saying we've got to focus on two things, one short 0:14:44.440 --> 0:14:47.120 term around how do we really help the consumers, and 0:14:47.240 --> 0:14:50.800 then long term around how do we look at better permitting, 0:14:51.200 --> 0:14:54.360 faster permitting, how do we speed up electrification, how do 0:14:54.400 --> 0:14:56.320 we speed up things like batteries which are going to 0:14:56.360 --> 0:14:57.720 help smooth out intermittency. 0:14:58.160 --> 0:15:00.640 Right, So there's really such a big foot within. 0:15:00.560 --> 0:15:03.040 Europe on how do we make sure that we're taking 0:15:03.080 --> 0:15:05.280 this reliance away from other areas. 0:15:05.040 --> 0:15:05.400 Of the world. 0:15:05.760 --> 0:15:07.600 The fact that everybody wants to build at the same 0:15:07.720 --> 0:15:11.040 time makes things a bit complicated. How much are you 0:15:11.160 --> 0:15:14.920 experiencing shortages of things like turbines. 0:15:14.520 --> 0:15:18.000 And engines and the actual pipes. 0:15:17.680 --> 0:15:19.520 And things of that nature, given the fact that everyone 0:15:19.600 --> 0:15:21.680 is trying to do this at the same time at 0:15:21.680 --> 0:15:24.640 a time of potential supply chain constraints because of the 0:15:24.680 --> 0:15:26.000 straight removes being blocked. 0:15:26.240 --> 0:15:28.600 Absolutely, I mean, it's a real issue and it's something 0:15:28.640 --> 0:15:32.040 that we're all grappling with in the US. For example, 0:15:32.120 --> 0:15:36.200 if you do not have your sort of components around 0:15:36.520 --> 0:15:39.360 a new gas plant supplied, you're. 0:15:39.240 --> 0:15:40.440 Looking at five years, right. 0:15:40.600 --> 0:15:43.320 That's a long period of time to get to really 0:15:43.360 --> 0:15:44.520 get the new components in place. 0:15:44.880 --> 0:15:46.640 So this supply chain is just compounding. 0:15:47.000 --> 0:15:48.440 And when we look at what we're going to see 0:15:48.480 --> 0:15:50.960 around the rebuild in the Middle East whenever this conflict 0:15:51.080 --> 0:15:53.760 is over, that is only going to add to the 0:15:53.880 --> 0:15:55.320 need for some of these components. 0:15:55.520 --> 0:15:57.720 Every single Middle East country is coming out now basically 0:15:57.760 --> 0:15:59.520 saying we won't the Saudi's have. We want an East 0:15:59.600 --> 0:16:01.560 West pie, we want to be able to bypass the 0:16:01.600 --> 0:16:04.200 strait of Formos. Can you get the appetite for that 0:16:04.360 --> 0:16:07.280 kind of investment when Iran and the Iergy still remain 0:16:07.360 --> 0:16:07.720 a threat. 0:16:09.040 --> 0:16:11.200 I do think you're going to need to see some stability. 0:16:11.920 --> 0:16:13.440 But you saw it out of the eating last week 0:16:13.480 --> 0:16:16.040 saying hey, how can we help with investment in the 0:16:16.080 --> 0:16:18.960 region to really again help this redundancy piece. When you 0:16:19.040 --> 0:16:21.080 look at pipelines, that's helpful for crude, but when you 0:16:21.120 --> 0:16:24.400 look at things like refined products like jet fuel for example, 0:16:25.080 --> 0:16:27.680 and energy, these are things that are not going through pipelines, 0:16:27.720 --> 0:16:29.800 so we need to think of other ways to be 0:16:29.880 --> 0:16:33.160 able to transport these and really ensure that security. 0:16:33.480 --> 0:16:35.960 To get that confidence though it's not even just for 0:16:36.120 --> 0:16:38.080 oil and gas. There's all this money put to data 0:16:38.120 --> 0:16:40.040 centers and people now talking about them having. 0:16:39.880 --> 0:16:40.880 To go underground. 0:16:41.440 --> 0:16:44.080 Do you still see the optimism for people wanting to 0:16:44.160 --> 0:16:45.760 be invested heavily in this region. 0:16:46.320 --> 0:16:49.000 I do, And the offer on the data center side 0:16:49.120 --> 0:16:50.960 was very clear for a while, right. I mean, if 0:16:50.960 --> 0:16:52.520 you look at it, there was cheap power in the 0:16:52.560 --> 0:16:57.280 Middle East, there was abundancy of land, there was lots 0:16:57.320 --> 0:17:00.840 of local capital and for many years of real perceived 0:17:00.920 --> 0:17:01.840 political stability. 0:17:02.160 --> 0:17:04.160 You've sort of taken the last point of that off. 0:17:04.560 --> 0:17:06.880 I do think you still see the other components there, 0:17:07.240 --> 0:17:08.720 but there is going to be a little bit of 0:17:08.920 --> 0:17:11.880 confidence coming back to the region before you see people 0:17:11.960 --> 0:17:14.200 really wanting to reinvest in this AI phenomenon. 0:17:14.280 --> 0:17:16.120 You don't have to worry too much about the political 0:17:16.160 --> 0:17:17.879 cycle in certain parts in the Middle East. And that's 0:17:17.880 --> 0:17:20.879 a different conversation with Europe maybe you do and with 0:17:21.000 --> 0:17:23.560 the US as well. How relevant is the political cycle 0:17:23.920 --> 0:17:24.960 to some of these decisions. 0:17:26.080 --> 0:17:28.840 You see a lot around, for example, renewal energy, right, 0:17:29.280 --> 0:17:31.119 and we've certainly seen I mean I've been investing in 0:17:31.200 --> 0:17:32.640 renewal energy for twenty five years. 0:17:33.000 --> 0:17:34.600 You've seen real sort of booms and. 0:17:34.640 --> 0:17:39.159 Bus Over time, what I will say is it begins 0:17:39.200 --> 0:17:43.600 to be tied more into security than it ever has before. 0:17:43.600 --> 0:17:45.639 I mean, again, as we look at Europe, right, this 0:17:45.720 --> 0:17:47.720 sort of dependency, whether it's on Russia or on the 0:17:47.760 --> 0:17:49.680 Middle East, and all of a sudden looking in saying 0:17:50.040 --> 0:17:51.120 what can we do internally? 0:17:51.440 --> 0:17:52.440 What resources do we have? 0:17:52.560 --> 0:17:54.960 We have sun, we have wind, right, these are things 0:17:55.000 --> 0:17:57.400 that we continue to build up internally, we can look 0:17:57.400 --> 0:18:01.240 at electrification, so worre again less reliant on these commodities 0:18:01.320 --> 0:18:02.400 coming from other parts of the world. 0:18:02.480 --> 0:18:04.639 Do you think there is a bigger focus now on abundance. 0:18:04.760 --> 0:18:07.120 I just wondered to what extent the conversation really has changed. 0:18:07.160 --> 0:18:09.800 Lisa mentioned that it seems to me that everything's become 0:18:09.920 --> 0:18:13.760 very polarized. That for certain political groups, particularly in Europe, 0:18:13.800 --> 0:18:16.439 they believe everything that is fossil fuels or touches fossil 0:18:16.480 --> 0:18:19.480 fuels is bad and everything that's renewable is fantastic under 0:18:19.480 --> 0:18:23.080 any situation, in any circumstance, and for whatever reason, the 0:18:23.160 --> 0:18:25.480 other side sees it completely differently. Do you think we 0:18:25.600 --> 0:18:28.040 have got some kind of moment here where we can 0:18:28.160 --> 0:18:31.480 just accept we need something from both worlds, We need abundance. 0:18:31.800 --> 0:18:33.240 I think that's absolutely spot on. 0:18:33.960 --> 0:18:36.360 Right now, you're looking at a crisis, right, and everyone's 0:18:36.359 --> 0:18:38.200 trying to figure out how do we fix this? 0:18:38.359 --> 0:18:38.479 Right? 0:18:38.840 --> 0:18:41.200 If you look at Europe, Europe has spent about twenty 0:18:41.280 --> 0:18:44.560 five billion over the last few months since the war started, 0:18:44.640 --> 0:18:46.639 do you get the same amount of energy supply they 0:18:46.720 --> 0:18:49.280 had before? So they're looking at it saying, gosh, you 0:18:49.359 --> 0:18:52.360 know rather than making this highly politicized, Let's figure out 0:18:52.359 --> 0:18:55.520 again how we can have homegrown energy supplies so that 0:18:55.600 --> 0:18:57.960 we're not dealing with these massive pray shocks going forward. 0:18:58.760 --> 0:19:01.960 This is The Bloombergs, a Bayans podcast bringing you the 0:19:02.040 --> 0:19:05.399 best in markets, economics, angient politics. You can watch the 0:19:05.440 --> 0:19:08.400