WEBVTT - Bloomberg Surveillance TV: September 10th, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordern. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.320 Terminal and the Bloomberg Business App. Jim Zouder, the president 0:00:37.320 --> 0:00:40.040 of Apollo Global Management, out with a new report, asking 0:00:40.040 --> 0:00:42.680 the question, what if the world doesn't work the way 0:00:42.720 --> 0:00:45.040 you think it does? Zout from the team, going on 0:00:45.080 --> 0:00:47.600 to write the era of free money is over, ultra 0:00:47.640 --> 0:00:51.240 low interest rates. Our history inflation is structural, not transitory. 0:00:51.440 --> 0:00:55.200 It's redefining risk, return and the cost of capital. Jim 0:00:55.280 --> 0:00:56.760 joins us, now for more. Jim good Mornic. 0:00:56.840 --> 0:00:58.880 I got to hire you at Apollo as a marketing guy. 0:00:58.920 --> 0:00:59.800 You're doing a good job. 0:01:00.200 --> 0:01:01.120 Go one step further. 0:01:01.280 --> 0:01:01.600 Thank you. 0:01:01.720 --> 0:01:03.560 I woke up the other week, came into the office 0:01:03.600 --> 0:01:06.360 handwritten note from you, and it said, public markets power 0:01:06.400 --> 0:01:09.120 the narrative, private markets power the economy. 0:01:09.520 --> 0:01:10.240 Just start there. 0:01:10.440 --> 0:01:12.880 What is the question you're posing for clients at the moment, 0:01:13.000 --> 0:01:14.600 what you want to get them to think about. 0:01:15.560 --> 0:01:19.640 Well, it's a bigger conversation about market structure and the 0:01:19.760 --> 0:01:24.080 changing backdrops, about how investors think about investing from a 0:01:24.120 --> 0:01:27.880 sixty to forty portfolio historically, and the tools they have 0:01:28.080 --> 0:01:31.840 to create better outcomes with less volatility. 0:01:31.920 --> 0:01:32.880 The reality is. 0:01:32.959 --> 0:01:36.880 Alternatives have worked for forty years for institutions, and if 0:01:36.880 --> 0:01:40.320 we think thoughtfully about the growing need for retirees around 0:01:40.319 --> 0:01:43.240 the globe, how do we augment which worked well in 0:01:43.240 --> 0:01:46.160 the past but may not be the compass for the future. 0:01:46.640 --> 0:01:49.600 On the other side of the coin, it's for companies 0:01:50.120 --> 0:01:53.480 eight thousand companies down to four thousand, the role of 0:01:53.600 --> 0:01:58.400 private capital is changing. Companies like SpaceX and Spie and 0:01:58.560 --> 0:02:01.840 Stripe can become the state it for much longer, and 0:02:01.920 --> 0:02:04.120 so a little bit when I hear about your headlines 0:02:04.120 --> 0:02:07.720 this morning, I feel like many folks that come on 0:02:08.360 --> 0:02:10.160 talk a little bit about the world in the rear 0:02:10.280 --> 0:02:13.680 view mirror versus looking to the windshield. And the real 0:02:13.760 --> 0:02:17.400 AHA moment for us came two three years ago when 0:02:17.400 --> 0:02:19.400 we heard, when we saw what was going on with 0:02:19.560 --> 0:02:24.679 rates rising dramatically in this cycle, and universally we all 0:02:24.760 --> 0:02:28.840 thought that the economy would hit skids and they would 0:02:28.840 --> 0:02:31.280 be tightening financial conditions, and that. 0:02:31.240 --> 0:02:32.120 Really didn't happen. 0:02:32.240 --> 0:02:37.200 So that was a very practical situation where we really said, 0:02:37.200 --> 0:02:40.280 maybe our textbook that we've using all along is wrong. 0:02:40.320 --> 0:02:46.079 But changing market structure, how companies finance, how investors invest, 0:02:47.280 --> 0:02:48.440 it is a new playbook, a new. 0:02:48.320 --> 0:02:51.639 Paradigm redefining public and private markets. Our good friend Mark 0:02:51.720 --> 0:02:53.560 Round would often talk about this and say, often the 0:02:53.600 --> 0:02:56.280 distinction was risk high risk in private markets, and now 0:02:56.280 --> 0:02:57.799 the distinction I think you and a team want to 0:02:57.840 --> 0:02:59.120 make is liquidity. 0:03:00.240 --> 0:03:02.640 Yeah, I mean the old idea when we grew up 0:03:02.680 --> 0:03:04.639 in a marketplace. This is my fortieth year in the 0:03:04.680 --> 0:03:09.480 business where private was was risky and volatile and public 0:03:09.639 --> 0:03:13.239 was safe and liquid. And there's many examples right now. 0:03:13.280 --> 0:03:15.600 I come from the world of credit, you know, and 0:03:15.639 --> 0:03:17.880 I started out as a high yield slash junk bond 0:03:17.919 --> 0:03:21.079 trader back in the eighties, and there was it might 0:03:21.120 --> 0:03:22.960 have been it might have been a public security, but 0:03:23.000 --> 0:03:25.720 trust me, it was volatile and it was risky. And 0:03:26.000 --> 0:03:29.400 now over thirty years is now junk bonds have become 0:03:29.520 --> 0:03:32.600 high yield and asset class. There's still a lot of 0:03:32.600 --> 0:03:35.520 inherent volatility in that. And again we would say that 0:03:35.600 --> 0:03:38.480 across the whole risk reward spectrum. You know, I grew 0:03:38.560 --> 0:03:42.080 up in Rochester, New York. Coodeax Xerox, Bousel, MOAM, three 0:03:42.160 --> 0:03:45.520 great American icon companies. They didn't get the memo on disruption. 0:03:46.000 --> 0:03:49.880 They were safe in investment grade companies and Vohil they're 0:03:49.880 --> 0:03:50.920 not in existence anymore. 0:03:51.000 --> 0:03:52.480 Can we talk about how things have changed over the 0:03:52.520 --> 0:03:54.120 last forty years? So you and the team would often 0:03:54.120 --> 0:03:56.560 talk about you are what you originate, you are what 0:03:56.680 --> 0:03:59.800 you create. The capex needs of companies now seem to 0:03:59.840 --> 0:04:02.480 have changed. I was reading the transcript from your address 0:04:02.480 --> 0:04:04.840 at a financial markets conference earlier this week, and you 0:04:04.920 --> 0:04:07.600 talked about the capex needs twenty to thirty forty years 0:04:07.600 --> 0:04:10.920 ago relative to now and the change in quality, the 0:04:11.000 --> 0:04:14.200 changing character of things. How important is that given where 0:04:14.240 --> 0:04:14.600 we're at. 0:04:14.680 --> 0:04:17.520 Well, just just to reset that question. You know, in 0:04:17.560 --> 0:04:20.880 the last thirty years, the high ual market globally has 0:04:20.960 --> 0:04:24.159 finance companies that are going through either regulatory change or 0:04:24.160 --> 0:04:29.840 technology change. Think cable, think shale, think airlines, think telecommunications, 0:04:30.279 --> 0:04:32.800 and for the most part that massive capbax was on 0:04:32.880 --> 0:04:35.799 non investment grade companies. As we sit here in twenty 0:04:35.839 --> 0:04:39.680 twenty five. In the next ten years, massive capbacks boom 0:04:39.839 --> 0:04:46.120 between data, AI, sustainability, energy transition, transmission lines, the transaction 0:04:46.200 --> 0:04:48.960 we did for RWE this year, this week in Germany. 0:04:49.360 --> 0:04:52.440 And so I don't think people are still thinking that 0:04:52.600 --> 0:04:56.920 private credit and private capital is small, ill liquid, non 0:04:57.000 --> 0:05:01.200 investment grade companies. And the reality is eighty to ninety 0:05:01.240 --> 0:05:05.040 percent of the private credit market is really investment grade 0:05:05.040 --> 0:05:09.560 counter parties, investment grade debt. And again many, many companies 0:05:09.600 --> 0:05:13.040 now are afforded the opportunity to stay private much longer 0:05:13.480 --> 0:05:16.680 because of the breath and the breadth of the financing markets. 0:05:17.000 --> 0:05:19.520 To build on what John is talking about, does private 0:05:19.560 --> 0:05:21.240 debt have more of a role than private equity at 0:05:21.240 --> 0:05:21.599 this point? 0:05:22.600 --> 0:05:26.680 Well, the debt markets and the capital markets and the 0:05:26.720 --> 0:05:31.760 credit markets are, as the Congress learned in seven oh nine, 0:05:32.279 --> 0:05:35.040 it's the lifeblood of the economy. When ge could not 0:05:35.120 --> 0:05:38.119 roll over their commercial paper, it was the aha moment 0:05:38.200 --> 0:05:39.960 for the Congress to say, wait a second, we need 0:05:39.960 --> 0:05:42.960 to act here. And so when you think about the 0:05:43.000 --> 0:05:47.599 scope of private credit and scale, certainly the application with 0:05:47.720 --> 0:05:51.400 investment grade solutions, it's in the multi multi trillions, tend 0:05:51.440 --> 0:05:55.640 to forty trillion, and the PE industry is a seven 0:05:55.680 --> 0:05:57.720 to ten trillion, depending on how you think about the 0:05:57.800 --> 0:05:59.040 dry powder and the overhang. 0:05:59.160 --> 0:06:00.880 So I would argue over the. 0:06:00.839 --> 0:06:05.680 Next decade, the impact of private credit, investment grade and 0:06:05.720 --> 0:06:09.320 non investment grade will probably have as large an impact, 0:06:09.360 --> 0:06:12.000 if not larger, than private equity has had in the 0:06:12.080 --> 0:06:12.800 last decade. 0:06:12.880 --> 0:06:15.240 So the peak of private equities over well, I. 0:06:15.160 --> 0:06:15.920 Wouldn't say that. 0:06:16.000 --> 0:06:19.240 I mean I think that the private equity industry is 0:06:19.279 --> 0:06:22.640 going to go through an evolution, and it's going to 0:06:22.640 --> 0:06:27.040 be a Darwinian evolution, and I think that the challenges 0:06:27.120 --> 0:06:32.000 of monetization, the challenges of upfront capital commitments, there will 0:06:32.080 --> 0:06:35.400 be fewer and fewer firms that are able to go 0:06:35.480 --> 0:06:40.440 to investors and have that dialogue and have that relationship. 0:06:40.520 --> 0:06:42.359 We believe for one of them because of our investment 0:06:42.360 --> 0:06:45.279 track record, But the reality is I think that many 0:06:45.680 --> 0:06:48.920 PE firms that business model is going to change and 0:06:49.000 --> 0:06:50.120 how can they adapt. 0:06:50.520 --> 0:06:53.039 This is a really important conversation to be having, especially 0:06:53.040 --> 0:06:55.680 because on surveillance we keep talking about the divide between 0:06:55.760 --> 0:06:58.800 public markets and the underlying economy, and it seems like 0:06:59.120 --> 0:07:03.599 it's growing increasingly dramatic fashion, and we keep wondering whether 0:07:03.640 --> 0:07:06.480 the economy is really struggling right now, at least by 0:07:06.520 --> 0:07:08.680 virtue of some of these labor market pictures. The same 0:07:08.720 --> 0:07:10.360 time that you're seeing the oracles of the world do 0:07:10.560 --> 0:07:11.080 very well. 0:07:11.640 --> 0:07:12.400 Are you seeing that? 0:07:12.480 --> 0:07:14.040 Are you seeing the need for money to be a 0:07:14.080 --> 0:07:16.640 little more free right now in order to rejucee some 0:07:16.760 --> 0:07:17.520 of that activity? 0:07:18.120 --> 0:07:19.880 You know, we're not seeing yet. 0:07:19.880 --> 0:07:22.240 But I do think the question you're really asking is 0:07:22.480 --> 0:07:25.120 and it is the same question about you know, with 0:07:25.200 --> 0:07:28.760 the amount public markets used to be a great diversifier 0:07:28.800 --> 0:07:32.040 for portfolios, and it really was the bellweather how the 0:07:32.160 --> 0:07:34.880 US economy and the global economy was doing. But as 0:07:34.960 --> 0:07:39.360 more companies have stayed private and more companies are funding privately, 0:07:39.880 --> 0:07:42.320 you really are questioning that barometer and what is telling you. 0:07:43.240 --> 0:07:45.880 Torsen has a good piece out this morning talking about 0:07:45.920 --> 0:07:49.760 the concentration of the CAPEX cycle and how it's concentrated 0:07:49.800 --> 0:07:53.560 in a handful of companies in data, AI and technology. 0:07:54.040 --> 0:07:56.600 And while the CAPEX is a massive number and it's 0:07:56.680 --> 0:08:00.000 driving a north started growth. You're asking a provocative question, 0:08:00.240 --> 0:08:03.680 is it really hiding the underlying economy, which is driven 0:08:03.720 --> 0:08:06.880 by private companies? Ninety percent of the hiring in America 0:08:06.880 --> 0:08:09.920 is by private companies, and is at a different story today? 0:08:10.240 --> 0:08:12.720 It could be we're seeing if you look at the 0:08:12.960 --> 0:08:15.840 public numbers in terms of earnings over the second quarter, 0:08:16.280 --> 0:08:19.480 it beat consensus by seven hundred basis points eleven versus four. 0:08:19.920 --> 0:08:23.400 And for the most part, the credit portfolios that we oversee, 0:08:23.680 --> 0:08:28.040 the multi thousands of counterpartysusite to four thousand, it actually 0:08:28.080 --> 0:08:33.360 showed quality upgrades three to one versus downgrades in terms 0:08:33.360 --> 0:08:36.760 of performance. So in the breadth of our credit portfolios, 0:08:36.840 --> 0:08:39.520 we're not seeing a weakness. I will tell you we 0:08:39.600 --> 0:08:44.920 definitely see more lingering inflation. And I do believe that 0:08:45.000 --> 0:08:50.000 the while this administration is dead set on getting rates lower, 0:08:51.040 --> 0:08:54.960 I believe that there is a legacy inflation issues in 0:08:55.000 --> 0:08:56.880 the economy. When's the last time any one of us 0:08:56.880 --> 0:08:59.200 bought something in the last year and he said, wow, 0:08:59.240 --> 0:09:00.560 that was cheaper than a year ago. 0:09:01.000 --> 0:09:02.079 It has not happened. 0:09:02.720 --> 0:09:05.760 And that's just in the and I do believe that's 0:09:05.800 --> 0:09:09.000 going to be the scourge of this rate cycle because 0:09:09.040 --> 0:09:12.040 I do believe there's greater inflation and companies are having 0:09:12.080 --> 0:09:16.640 it a much more challenging time passing that along to consumers. 0:09:16.840 --> 0:09:18.200 This is that we're seeing it across the board. 0:09:18.200 --> 0:09:19.040 There's lots to impact that. 0:09:19.400 --> 0:09:20.720 One of the things I wanted to impact was the 0:09:20.720 --> 0:09:24.040 concentration risk and the AI financing that we've seen both 0:09:24.040 --> 0:09:27.160 in data centers and the energy transition. There's a quote 0:09:27.160 --> 0:09:28.920 in the last year that's just stuck with me for 0:09:28.960 --> 0:09:30.720 the last twelve months, and it came from the Alphabet 0:09:30.800 --> 0:09:33.840 CEO that the bigger risk is under investing and not 0:09:34.200 --> 0:09:37.880 over investing, and that just sounded like a commitment to 0:09:38.000 --> 0:09:41.199 over investing. Now, I'd want to understand how your industry 0:09:41.640 --> 0:09:45.720 avoids a massive misallocation of resources at a time when 0:09:45.760 --> 0:09:47.760 everyone is chasing the same story. 0:09:48.480 --> 0:09:51.559 Well, it feels like you have a bug in our 0:09:51.840 --> 0:09:54.760 investment committee rooms. I mean, I've been talking the last 0:09:54.800 --> 0:09:59.679 six months about the cycles of dark fiber and the 0:09:59.720 --> 0:10:03.840 late nineties, of shale on the early teens, ten to 0:10:04.160 --> 0:10:08.400 twelve to sixteen, and certainly enterprise software in the last 0:10:08.480 --> 0:10:11.160 five years, and you have to be concerned as an 0:10:11.200 --> 0:10:14.680 investor today, are you taking equity risk for a fixed 0:10:14.760 --> 0:10:17.480 rate of return. That's the ultimate sort of bubble, if 0:10:17.480 --> 0:10:21.840 you would, And I don't think that the true economics. 0:10:21.880 --> 0:10:27.240 Certainly consumers industry, the economy is going to benefit, but 0:10:27.559 --> 0:10:30.480 not all industries as they evolved. Was it a great 0:10:30.520 --> 0:10:34.920 investor to be an investor? The cell phone industry is 0:10:34.920 --> 0:10:36.800 a great example. Only in the last decade is it 0:10:36.880 --> 0:10:41.520 become a good investment for companies to invest. So I 0:10:41.520 --> 0:10:43.439 don't have the answer that once it's a question we're 0:10:43.440 --> 0:10:47.720 asking ourselves. Now we find ourselves both on the debt 0:10:47.840 --> 0:10:50.000 and the equity side of funding a lot of the 0:10:50.080 --> 0:10:55.520 data center activity. But there's a tremendous amount needed and 0:10:55.559 --> 0:10:59.120 there's a voracious appetite. But I certainly understand what the 0:10:59.120 --> 0:11:01.880 Alphabet executive was saying. 0:11:01.960 --> 0:11:03.640 Do you think there's a bit of a duration mismatch 0:11:03.679 --> 0:11:05.880 between how long it takes to build a data center 0:11:06.200 --> 0:11:08.479 and how long it takes to build the energy infrastructure 0:11:08.679 --> 0:11:09.400 to enable it? 0:11:09.520 --> 0:11:10.560 And could that be problematic? 0:11:11.320 --> 0:11:11.480 There? 0:11:11.520 --> 0:11:15.960 Certainly is we have spent more time. The energy supply 0:11:16.160 --> 0:11:20.400 issue could be a governor to growth, and that's a 0:11:20.520 --> 0:11:22.800 challenge that we've not seen yet. But if you pencil 0:11:22.840 --> 0:11:25.160 out the numbers, that could be a concern, but I 0:11:25.160 --> 0:11:28.040 think the bigger questions back The first one we asked 0:11:28.120 --> 0:11:34.360 is these are ten twenty thirty year infrastructure builds. Who 0:11:34.480 --> 0:11:40.040 really with our marketplace going towards indexes and ETFs and 0:11:41.280 --> 0:11:44.720 multipod shops that are all thinking about, you know, moment 0:11:44.760 --> 0:11:48.199 to moment liquidity. The era of the long investor is 0:11:48.240 --> 0:11:50.800 a question mark. Who is that long investor? And we 0:11:50.840 --> 0:11:54.520 would say it's the retirees of tomorrow. Every day twelve 0:11:54.520 --> 0:11:57.880 thousand folks in the US you hit sixty five, and 0:11:58.040 --> 0:12:00.960 the West broadly speaking, and other countries around the world 0:12:01.040 --> 0:12:03.440 have not done a great job with retirees, and so 0:12:04.200 --> 0:12:12.240 the ability to thoughtfully introduce long duration infrastructure inflation hedge 0:12:12.360 --> 0:12:15.600 assets into these portfolios. In the UK they call it 0:12:15.640 --> 0:12:20.000 matching adjustment for insurance assets. Those are really where the 0:12:20.040 --> 0:12:21.960 growth of our business is going to go, and that's 0:12:21.960 --> 0:12:23.079 going to benefit investors. 0:12:23.240 --> 0:12:25.800 This makes a lot of sense, particularly if you're investing 0:12:25.800 --> 0:12:28.720 for retirement. You don't need daily liquidity, that's just logical. 0:12:29.000 --> 0:12:31.040 I think where the criticism is coming from for your 0:12:31.040 --> 0:12:33.280 industry at the moment is that family offices are already 0:12:33.280 --> 0:12:34.360 doing a lot of this. I think you are the 0:12:34.400 --> 0:12:36.800 team we talked about that a ton high net worth 0:12:36.800 --> 0:12:39.840 individuals are doing the same. You're now going go after retail, 0:12:40.320 --> 0:12:42.479 and then people start to feel a little bit uncomfortable 0:12:42.480 --> 0:12:44.040 with that. Are you're looking for a new bank older? 0:12:44.280 --> 0:12:46.240 Are we looking for someone else to pick up the pieces? 0:12:46.400 --> 0:12:48.120 What's the response from you and the team to address 0:12:48.120 --> 0:12:48.520 that head on? 0:12:49.520 --> 0:12:54.400 I think it's all about doing it in a methodical, logical, 0:12:54.520 --> 0:12:59.080 diverse way. You know, this is all about the you know, 0:12:59.120 --> 0:13:03.199 the proper amount in the proper diversity. Certainly, we would 0:13:03.240 --> 0:13:07.559 never advocate for someone taking an outsized portfolio of their 0:13:07.559 --> 0:13:11.760 retirement and putting it all into alternatives. But clearly, over 0:13:11.800 --> 0:13:14.199 the last thirty to forty years, history has shown us 0:13:14.200 --> 0:13:17.480 that an allocation of alternatives ten to twenty percent of 0:13:17.480 --> 0:13:22.400 a portfolio increases returns and brings down volatility. And so 0:13:22.559 --> 0:13:25.760 from our perspective, there's a variety of areas in the 0:13:25.800 --> 0:13:29.040 world of credit, in particular the world of infrastructure, the 0:13:29.040 --> 0:13:35.120 world of secondaries that are more yield oriented, compounding type 0:13:35.160 --> 0:13:39.600 of vehicles. And certainly we have a view that private equity, 0:13:39.600 --> 0:13:44.440 while a very attractive asset class, even in returns over 0:13:44.440 --> 0:13:47.880 the next decade, mid to high teens that that should 0:13:47.920 --> 0:13:52.280 be done in appropriate doses. So it's all about diversity 0:13:52.760 --> 0:13:54.640 and proper portfolio allocation. 0:13:56.080 --> 0:13:58.760 Stay with us more Bloomberg surveillance coming up. 0:13:59.040 --> 0:13:59.520 Off to this. 0:14:08.840 --> 0:14:11.600 Congressman French Hill, chairman of the House Financial Committee on 0:14:11.600 --> 0:14:15.319 Financial Services, joined us now for more. Congressman Hill, welcome 0:14:15.320 --> 0:14:16.920 to the program. So I've got a lot to get through, 0:14:16.960 --> 0:14:18.599 and I just wanted to stop with the independence of 0:14:18.640 --> 0:14:21.120 the Federal serve and the role that your committee's got 0:14:21.160 --> 0:14:24.680 to play is this spat continues to build down at Washington. 0:14:25.920 --> 0:14:28.960 Blogan Morthon, Jonathan, great to be with you. As you know, 0:14:29.000 --> 0:14:32.400 I've spoken out many times about the importance of the 0:14:32.440 --> 0:14:36.320 independence of the FED, and so has my colleague across 0:14:36.360 --> 0:14:39.440 the capital, Tim Scott, the chairman of the Senate Banking Committee. 0:14:39.800 --> 0:14:42.720 But because we fully support FED independence doesn't mean the 0:14:42.760 --> 0:14:46.960 Fed's immune from criticism. And every president in my adult 0:14:47.040 --> 0:14:51.520 life has been very vocal about criticizing the FED at 0:14:51.520 --> 0:14:56.320 one time or another. So I don't think FED independence 0:14:56.360 --> 0:14:58.680 is in question when it comes. 0:14:58.480 --> 0:15:01.600 To what could actually happen in terms of financial stability. 0:15:01.920 --> 0:15:05.120 We have FED Governor Lisa Cook's lawyer saying that the 0:15:05.120 --> 0:15:08.840 President was a lawful and removing Governor Cook and said 0:15:08.840 --> 0:15:12.320 it's vague allegations would endanger the stability of our financial 0:15:12.360 --> 0:15:14.120 system and undermine the rule of law. 0:15:14.560 --> 0:15:16.320 Do you agree with that assessment? 0:15:18.000 --> 0:15:21.120 Well, I think there's some hyperbole in there. Lisa Cook 0:15:21.200 --> 0:15:25.960 has been accused of effectively mortgage fraud. Those are significant 0:15:25.960 --> 0:15:31.600 allocations for someone, allegations, for someone who is a financial regulator. 0:15:32.200 --> 0:15:34.600 But I think they need to be adjudicated. I mean, 0:15:34.640 --> 0:15:37.080 she needs her due process, her day in court to 0:15:37.800 --> 0:15:40.560 prove that in fact that's not the case, and I 0:15:40.560 --> 0:15:43.640 think that's underway right now. And that's again something I've 0:15:43.680 --> 0:15:45.480 said in recent days. 0:15:45.920 --> 0:15:47.840 Do you think the president should have waited for the 0:15:47.880 --> 0:15:50.200 courts to play out in terms of this investigation, for 0:15:50.760 --> 0:15:55.000 these allegations to actually become charges and a conviction to 0:15:55.200 --> 0:15:57.560 then take up this idea to fire her for cause. 0:15:58.800 --> 0:16:01.280 Look, the president's entitled to his own opinion. He has 0:16:01.320 --> 0:16:04.120 access to the facts that probably I don't, so he's 0:16:04.120 --> 0:16:07.840 made his decision about it. But by judgment is that's 0:16:07.880 --> 0:16:12.080 a serious allegation and if true, is certainly potentially a 0:16:12.120 --> 0:16:17.560 disqualifying allegation and charge for someone who's involved, very much 0:16:17.640 --> 0:16:20.000 intimately involved in the federal regulatory process. 0:16:20.160 --> 0:16:21.720 Taking a step back, though, do you agree with the 0:16:21.760 --> 0:16:24.720 Treasury Secretary on resetting the Fed's mission. 0:16:26.720 --> 0:16:28.680 Well, you know, I believe that for a long time, 0:16:28.680 --> 0:16:30.840 I believe the FED should have a single mandate, which 0:16:30.880 --> 0:16:34.720 is price stability. The biggest, most punishing tax on the 0:16:34.760 --> 0:16:39.360 American people, our citizens, is inflation, and inflation's caused by 0:16:39.400 --> 0:16:42.480 too much money chasing too few goods. And we've had 0:16:42.680 --> 0:16:46.520 a dramatic example of that FED policy during the pandemic 0:16:46.560 --> 0:16:50.720 and the Biden administration's fiscal policy in combination very punishing 0:16:50.800 --> 0:16:53.640 forty year highs in inflation. So I believe we need 0:16:53.640 --> 0:16:56.480 fewer mandates, and I think we need that monetary policy 0:16:56.520 --> 0:16:58.000 focused on price stability. 0:17:00.040 --> 0:17:00.320 Again. 0:17:00.600 --> 0:17:02.600 That's why I set up a task force in this 0:17:02.720 --> 0:17:05.919 Congress to review the Fed's monetary policy since two thousand 0:17:05.920 --> 0:17:10.120 and eight, review the Fed's role and a financial regulation 0:17:10.200 --> 0:17:12.920 and supervision, and to make sure that we're also taking 0:17:12.960 --> 0:17:15.919 steps to make sure our treasury security market is resilient. 0:17:16.359 --> 0:17:19.160 All this work is led by Frank Lucas of Oklahoma, 0:17:19.520 --> 0:17:22.280 and we're deep in that process. So I think taking 0:17:22.320 --> 0:17:25.280 a strong look at the Fed's monetary policy and their Governman, 0:17:25.560 --> 0:17:27.800 it's an important factor, and I agree with the Treasury 0:17:27.840 --> 0:17:28.399 Secretary on that. 0:17:28.600 --> 0:17:31.400 Well, inflation has not been below two percent for more 0:17:31.440 --> 0:17:33.720 than four years at this point, and we're still talking 0:17:33.760 --> 0:17:36.720 about fifty basis point rate cuts, maybe seventy five basis 0:17:36.720 --> 0:17:38.720 points of rate cuts this year. Do you think that 0:17:38.720 --> 0:17:41.679 that's premature, If this should be a single mandate federal 0:17:41.720 --> 0:17:45.879 Reserve that looks solely on inflation, Well, I. 0:17:45.920 --> 0:17:48.239 Think this is the tough decision they have coming up. 0:17:48.280 --> 0:17:51.080 And we've seen a softness in the economy during the 0:17:51.119 --> 0:17:55.560 whole year in terms of consumer's ability to purchase the 0:17:55.640 --> 0:17:59.160 jobs reports that we've gotten. This is why the FED chairman, 0:17:59.200 --> 0:18:01.440 I think consistent. We have said, let's look at the data, 0:18:01.880 --> 0:18:06.280 look at our data assessment and the forecast associated with it, 0:18:06.720 --> 0:18:09.359 and also make our own judgment about whether we're at 0:18:09.400 --> 0:18:12.399 the neutral rate for pricing, because we don't want to 0:18:12.400 --> 0:18:15.680 see the economy stall out and then go into stagflation, 0:18:16.320 --> 0:18:19.600 particularly when you're right about inflation getting close to two 0:18:19.640 --> 0:18:22.800 but not below too and not right at two. But 0:18:22.840 --> 0:18:25.600 when you look at inflation expectations, they seem to be 0:18:25.640 --> 0:18:27.920 more closely anchored it to and that should give the 0:18:27.960 --> 0:18:31.919 Fed some confidence as they entertain their decision in the 0:18:31.920 --> 0:18:32.720 next few days. 0:18:32.840 --> 0:18:33.240 Cheer Hill. 0:18:33.320 --> 0:18:35.720 I know you and your colleagues almost just recently got 0:18:35.760 --> 0:18:38.560 back from summer recess. But our Trumper first is fast 0:18:38.560 --> 0:18:41.679 approaching and the Trump administration is weighing and pushing for 0:18:41.720 --> 0:18:44.480 this idea for a stopgap funding measure to keep the 0:18:44.520 --> 0:18:47.960 government open through January thirty first, would you be on 0:18:48.040 --> 0:18:48.679 board with that? 0:18:50.320 --> 0:18:53.439 But we're talking about it among ourselves and obviously with 0:18:53.520 --> 0:18:58.600 our friends in the Senate. We've each passed three appropriations 0:18:58.640 --> 0:19:00.440 bills and the Senate in the House, I think it 0:19:00.440 --> 0:19:02.679 would be great to go to conference on those bills 0:19:03.359 --> 0:19:06.719 and then pursue get those enacted into law, and then 0:19:06.760 --> 0:19:10.840 pursue a CR that's a shorter term. CR would be 0:19:10.880 --> 0:19:14.960 my advice for consideration so that we can get this 0:19:15.040 --> 0:19:18.000 work done. We're very close. Both the House and Senate 0:19:18.040 --> 0:19:22.160 are processing these bills. We have the Republicans in charge 0:19:22.200 --> 0:19:23.680 of the House and the Senator in the White House. 0:19:23.680 --> 0:19:26.600 So we ought to get together, find our top line number, 0:19:26.640 --> 0:19:28.000 and get our work done this year. 0:19:28.440 --> 0:19:31.440 T Wisman, Before you got the important stuff Arkansas football 0:19:32.160 --> 0:19:33.600 razor Backs got to get done this year. 0:19:35.200 --> 0:19:40.480 I really enjoyed watching the quarterback come and have his 0:19:40.600 --> 0:19:44.160 great game against Arkansas State. This was the first time 0:19:44.200 --> 0:19:48.159 in Arkansas history that Arkansas State played the University of 0:19:48.240 --> 0:19:51.320 Arkansas in Little Rocket, the famous nineteen forty nine War 0:19:51.400 --> 0:19:54.840 Memorial Stadium. It was a fantastic day. He looks pretty good. 0:19:54.880 --> 0:19:57.239 We play Ole Miss this weekend, so that'll be the 0:19:57.280 --> 0:19:59.840 first SEC game and that's where the rubber hits the road. 0:20:01.080 --> 0:20:13.800 Stay with us, Mulplindex. Savanna's coming up after this. Let's 0:20:13.800 --> 0:20:16.280 get the bullush freew on things. Danas of Wetbush two 0:20:16.280 --> 0:20:19.520 seventy price target outperform writing on Chance of Apple. Dan 0:20:19.600 --> 0:20:21.080 John just now for more dank and monic. 0:20:21.240 --> 0:20:21.840 Great to be here. 0:20:21.840 --> 0:20:24.879 You've sat here so many times in September alongside us 0:20:24.880 --> 0:20:27.080 and talked about the upgrade super cycle. 0:20:27.400 --> 0:20:29.720 It hasn't happened. Is it has happened? With this? And 0:20:29.760 --> 0:20:30.240 why no? 0:20:30.359 --> 0:20:33.480 I mean, I look this in those supercycles we've talked about, 0:20:33.520 --> 0:20:35.840 I mean they definitely were disappointing, right, I mean the 0:20:35.920 --> 0:20:39.400 reality I think this is one where street expectations going 0:20:39.480 --> 0:20:42.600 in are I think pretty soft relative to the next year. 0:20:42.680 --> 0:20:45.240 So when you think about on scale one ten, this 0:20:45.320 --> 0:20:48.400 is probably eight point five. Well, do you have over 0:20:48.440 --> 0:20:51.480 three hundred million that haven't upgrade their iPhone? Is there 0:20:51.480 --> 0:20:53.359 going to be a huge catalyst here? Are they a 0:20:53.359 --> 0:20:55.800 wi just pin up to men, especially in China? 0:20:55.920 --> 0:20:57.200 But the reality. 0:20:56.840 --> 0:21:00.280 Is the elephant in the room, it's AI and I 0:21:00.320 --> 0:21:02.560 think that's when you talk about what's going to truly 0:21:02.800 --> 0:21:03.800 drive the stock. 0:21:04.359 --> 0:21:07.760 That's it. We've talked about it. That right now is 0:21:07.800 --> 0:21:08.159