WEBVTT - Bloomberg Surveillance TV: September 19th, 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 Hordert. 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 --> 0:00:36.880 Terminal and the Bloomberg Business app. Let's talk about the 0:00:36.920 --> 0:00:39.400 future of this Federal Reserve, the White House casting a 0:00:39.479 --> 0:00:42.000 wide net to replace fed share, Japower, the US Treasury 0:00:42.040 --> 0:00:44.920 Secretary Scille Best and praising a quote very good meeting 0:00:44.960 --> 0:00:47.640 with the former Saint Lewis FED President Jim Bullard during 0:00:47.640 --> 0:00:50.279 his search. Jim joined us in a studio for more. Jim, 0:00:50.320 --> 0:00:53.280 good morning, Good morning, thanks for being here. Not many 0:00:53.280 --> 0:00:56.240 people get to experience what you've just experienced, sitting down 0:00:56.240 --> 0:00:59.280 for a conversation to potentially become the fed Share. 0:00:59.480 --> 0:01:01.440 Can you walk history what that was like, what's the 0:01:01.480 --> 0:01:02.160 process like? 0:01:03.640 --> 0:01:06.000 Well, as you say, they have a lot of a 0:01:06.080 --> 0:01:09.000 lot of people on the list, and they're following through. 0:01:09.760 --> 0:01:12.400 It's a transparent process. I think that's good. I think 0:01:12.520 --> 0:01:15.280 all the I know virtually all the people on the list, 0:01:15.319 --> 0:01:19.720 I think they're all good. So I think this was 0:01:19.760 --> 0:01:23.319 a meeting just to talk in broad terms, but I 0:01:23.319 --> 0:01:26.000 can't really report out, you know, details of what was said. 0:01:26.200 --> 0:01:29.679 The Treasury Secretary incredibly downed into the economy on financial markets. 0:01:29.680 --> 0:01:31.960 I'm sure you experienced that in your conversation with him. 0:01:32.200 --> 0:01:33.640 I think you can share with us the kind of 0:01:33.720 --> 0:01:36.000 questions I am matched that he's asking you when I 0:01:36.000 --> 0:01:38.200 ask them to you, which essentially is how do you 0:01:38.319 --> 0:01:40.520 view things right now? How do you think about the 0:01:40.560 --> 0:01:41.199 labor market? 0:01:42.120 --> 0:01:47.480 I thought the FEDS decision was a good one. Looks 0:01:47.600 --> 0:01:50.120 like a sequence of three moves in a row through 0:01:50.160 --> 0:01:53.000 the end of the year. Of course, you want to 0:01:53.000 --> 0:01:56.080 be data dependent, and the chair stress that in the 0:01:56.080 --> 0:02:01.000 press conference. But I think the committee was worried about 0:02:01.120 --> 0:02:07.760 the non farm payrolls report that you know, revised the 0:02:07.840 --> 0:02:13.160 previous months down considerably. You know, non farm payrolls is 0:02:13.280 --> 0:02:16.400 kind of the key number for the Fed, so I 0:02:16.400 --> 0:02:18.840 think that made them a little bit nervous. There are 0:02:19.200 --> 0:02:21.920 stories that you can tell about why that's happening. But 0:02:22.800 --> 0:02:25.400 on the other hand, you know, it could be weakness 0:02:25.400 --> 0:02:28.480 and labor markets. So I think that tilted things toward 0:02:29.200 --> 0:02:32.120 a little bit more dubbish policy. So they brought October 0:02:32.840 --> 0:02:37.480 into the picture, and now you've got markets pricing probably 0:02:37.480 --> 0:02:39.160 seventy five by the end of the year. That would 0:02:39.160 --> 0:02:41.680 be a significant move by the end of the year. 0:02:41.680 --> 0:02:43.560 And they have a little bit of optionality if the 0:02:43.639 --> 0:02:45.639 data goes the other way. So it's a pretty good 0:02:45.639 --> 0:02:48.760 decision from the point of view of how this works. 0:02:48.919 --> 0:02:50.919 You said, they have optionality if the data goes the 0:02:50.960 --> 0:02:53.720 other way. How high is the bar for strengthen the 0:02:53.760 --> 0:02:56.480 economy to really prevent the FED at this point, given 0:02:56.600 --> 0:02:58.480 everything from going three times this year. 0:02:59.080 --> 0:03:02.120 Yeah, I think the committee is also spooked a little 0:03:02.120 --> 0:03:05.799 bit by last year because last year the data looked 0:03:05.840 --> 0:03:11.240 weak but then turned around abruptly, and so they'll be 0:03:11.280 --> 0:03:15.040 nervous about that. It's hard to say exactly how high 0:03:15.040 --> 0:03:17.280 the bars acid judgment call will have to be made 0:03:17.320 --> 0:03:18.800 by members of the committee. 0:03:18.919 --> 0:03:21.800 There's this other disagreement on the FED. Clearly there are 0:03:21.840 --> 0:03:24.080 a lot of them, and understandably because in Wall Street 0:03:24.080 --> 0:03:26.160 there are a lot of disagreements as well as to what. 0:03:26.080 --> 0:03:27.280 The economic backdrop is. 0:03:27.320 --> 0:03:29.840 But you could see a spread in terms of where 0:03:29.880 --> 0:03:32.519 the neutral rate was from say three percent in terms 0:03:32.560 --> 0:03:35.600 of the long term job for some of the Fed numbers, 0:03:35.920 --> 0:03:37.600 or four percent for some of the others. 0:03:37.840 --> 0:03:38.520 Where do you sit. 0:03:40.680 --> 0:03:44.280 I think it's still fairly low, So you know, you 0:03:44.360 --> 0:03:46.880 could argue maybe three in a quarter or something like that. 0:03:47.040 --> 0:03:50.800 So if you're still above four percent with the policy rate, 0:03:50.840 --> 0:03:55.080 you're still one hundred basis points above if that's your 0:03:55.320 --> 0:03:57.960 If that's your number. So that's why I've been saying 0:03:57.960 --> 0:04:00.120 they have room to maneuver. They have room to come 0:04:00.160 --> 0:04:03.600 down some on the policy rate and still put downward 0:04:03.640 --> 0:04:07.800 pressure on inflation. Inflation is still above target, and you 0:04:07.840 --> 0:04:11.080 know it has been debated at length over the last 0:04:11.360 --> 0:04:15.760 six months or so, but I think they're in pretty 0:04:15.800 --> 0:04:17.040 good position right now. 0:04:17.440 --> 0:04:19.880 How credible do you think it pursue two percent actually is? 0:04:21.960 --> 0:04:24.280 I think the Committee is very dedicated to the two 0:04:24.360 --> 0:04:29.160 percent target. I think it would be foolish to abandon 0:04:29.200 --> 0:04:34.760 that target. It has set an international standard across all 0:04:34.800 --> 0:04:38.520 the countries of the world. And if the lead economy says, oh, 0:04:38.839 --> 0:04:41.440 you know, we're going to back off that then all 0:04:41.440 --> 0:04:43.560 the other countries would back off, you'd be back into 0:04:43.600 --> 0:04:46.280 the seventies and you'd have a lot of cash. So 0:04:46.960 --> 0:04:49.400 that is not a good idea, and the committee will 0:04:49.440 --> 0:04:52.839 try to get back to two percent. However, I think 0:04:52.880 --> 0:04:56.000 you want to get back in a nice, smooth, asymptotic 0:04:56.120 --> 0:04:59.479 path to two percent, and the forecasts always show that, 0:04:59.560 --> 0:05:01.960 and that's all is the way the Fed thinks about it. 0:05:02.040 --> 0:05:03.200 The two year rolling view. 0:05:03.360 --> 0:05:06.640 Now, some people might say that's aspirational, magical forecasting. It's 0:05:06.680 --> 0:05:09.200 just we're always forecasting this two years out but never 0:05:09.240 --> 0:05:12.880 actually hits it based on history, which raises the credibility question. 0:05:13.160 --> 0:05:16.279 The federal reserves cunning interest rates with inflation closer to 0:05:16.320 --> 0:05:18.599 three than it is to two, with unemployment closer to 0:05:18.720 --> 0:05:20.560 four than it is to five, and but that could 0:05:20.560 --> 0:05:22.640 ease it all time highs. Is this the right time 0:05:22.680 --> 0:05:25.960 to back away from that restrictive monetary policy that's going 0:05:25.960 --> 0:05:27.920 to lead to that glidepath back towards two percent. 0:05:28.839 --> 0:05:32.200 It's restrictive, but even when they come down, it'll still 0:05:32.240 --> 0:05:34.920 be somewhat restrictive. I think one of the pieces of 0:05:35.000 --> 0:05:38.200 risk management you have to think about here is suppose 0:05:39.320 --> 0:05:43.440 the economy is tipping into a March slowdown, then the 0:05:43.640 --> 0:05:48.479 Committee would want to be accommodative in that circumstance, and 0:05:48.560 --> 0:05:50.880 you'd want to be below your neutral rate, so you'd 0:05:50.880 --> 0:05:52.640 have a long way to go. You'd have to really 0:05:52.680 --> 0:05:55.840 scramble if that happened. I'm not saying that's the base case, 0:05:55.880 --> 0:05:58.600 but that's a possibility, and so you probably want to 0:05:58.600 --> 0:06:00.640 be a little bit closer to neutral, so you didn't 0:06:00.680 --> 0:06:04.040 have to work so hard if you got into that scenario. 0:06:04.240 --> 0:06:06.160 One of the tests for a lot of people is 0:06:06.279 --> 0:06:08.760 if inflation does go up, maybe say at the end 0:06:08.760 --> 0:06:10.840 of this year early next year, which a lot of 0:06:10.839 --> 0:06:13.800 people are expecting that it will, what's the Fed's response. 0:06:13.960 --> 0:06:16.120 Do they keep cutting or do they look past it 0:06:16.160 --> 0:06:17.919 is simply a one time price adjustment. 0:06:18.960 --> 0:06:20.919 I think they made pretty clear that they're going to 0:06:20.960 --> 0:06:27.440 look through temporary tariff effects and then they expect inflation 0:06:27.560 --> 0:06:31.440 to resume its downward trend and the effects have been muted. 0:06:32.320 --> 0:06:35.440 US Trade Representative does not have an inflation target, so 0:06:35.640 --> 0:06:39.240 I think that you know, it's up to the FED 0:06:39.320 --> 0:06:42.719 to determine what the inflation rate is going to be, 0:06:43.200 --> 0:06:46.839 not trade policy, but so lots of things affect inflation, 0:06:47.720 --> 0:06:50.760 and then you know, you have to get on your 0:06:50.839 --> 0:06:53.039 sort of medium term path, and I think that's what 0:06:53.080 --> 0:06:53.960 they're doing. 0:06:54.120 --> 0:06:57.360 You mentioned earlier that there is a degree of fear 0:06:57.400 --> 0:06:59.440 of repeating what we saw last year where they FED 0:06:59.480 --> 0:07:01.440 cut by a undred basis points and we saw the 0:07:01.440 --> 0:07:03.360 long end of the yield curve rise by one hundred 0:07:03.400 --> 0:07:07.359 basis points and economic data pickback up. And I just 0:07:07.520 --> 0:07:10.520 wonder how much you think the FED is open or 0:07:10.560 --> 0:07:12.880 you would be open if you are on the FED now, 0:07:13.160 --> 0:07:18.360 to adjust some of the balance sheet composition in response 0:07:18.520 --> 0:07:20.960 to any move in the long end of the yield curve. 0:07:21.920 --> 0:07:24.840 I think the balance sheet policy has been in the background. 0:07:24.920 --> 0:07:28.440 I think that's appropriate. The Committee has been shrinking the 0:07:28.480 --> 0:07:32.480 size of the balance sheet a little bit slower pace recently, 0:07:32.680 --> 0:07:36.440 but I think they're pretty happy with that policy for now. 0:07:36.480 --> 0:07:41.200 They want to get to this ample reserves level. There's 0:07:41.320 --> 0:07:46.240 a good speech by my former colleague Chris Waller and Dallas, 0:07:46.520 --> 0:07:49.040 so if you want some bedtime reading, you can read that. 0:07:49.800 --> 0:07:52.720 But that was actually a very good back of the 0:07:52.800 --> 0:07:56.280 envelope calculation about the balance sheet and all the pieces 0:07:56.320 --> 0:07:58.760 of the balance sheet. So I think that's a good 0:07:58.760 --> 0:08:01.480 place to start for those that want to understand current 0:08:01.520 --> 0:08:04.960 balance sheet policy. The mortgage backed securities are going to 0:08:04.960 --> 0:08:06.760 take a long time to go off. I do think 0:08:06.840 --> 0:08:11.400 the Fed made a mistake in March April of twenty twenty. 0:08:12.440 --> 0:08:16.640 We went all in on mortgage back securities, thinking that 0:08:17.040 --> 0:08:20.400 the pandemic was going to harm the housing market, and 0:08:20.440 --> 0:08:22.560 we got ninety two, one hundred and twenty days in 0:08:22.680 --> 0:08:26.040 and boy it went the other way. Demand for housing 0:08:26.160 --> 0:08:30.320 was way up. So unfortunately we added a lot of 0:08:30.360 --> 0:08:34.600 mortgage backed securities over that two year period, but we're 0:08:34.600 --> 0:08:36.480 going to have to let that gradually go off. 0:08:36.600 --> 0:08:38.280 Would you AFFCD it for fifty this week? 0:08:40.200 --> 0:08:40.400 No? 0:08:40.520 --> 0:08:42.560 I don't think so. So I thought it was a 0:08:42.559 --> 0:08:46.240 good decision because the Hawks could say that, Okay, we 0:08:46.280 --> 0:08:48.960 only went twenty five, and we got optionality on the 0:08:48.960 --> 0:08:54.160 future moves. But the Doves got the twenty five and 0:08:54.640 --> 0:08:59.240 probably twenty five at October, and that's almost as good 0:08:59.280 --> 0:09:03.319 as getting fifty today. And you do get the optionality 0:09:03.320 --> 0:09:03.760 in their says. 0:09:04.000 --> 0:09:06.120 When people talk about the institution, you know, so wow, 0:09:06.160 --> 0:09:08.160 just based on what you've just said, do you think 0:09:08.200 --> 0:09:11.200 people underestimate just how persuasi if you need to be 0:09:11.240 --> 0:09:14.160 on the committee, the degree of negotiations that do take 0:09:14.200 --> 0:09:16.120 place about the kind of things you just described. 0:09:18.120 --> 0:09:21.120 It's a it's a you know, it's a big formal meeting, 0:09:21.160 --> 0:09:25.199 and people are, you know, very good at making their arguments, 0:09:25.320 --> 0:09:28.920 and they have the presidents have their own staffs. So 0:09:31.160 --> 0:09:33.000 I mean, I love it. I think it's a great 0:09:33.840 --> 0:09:36.080 it's it's a great place to make decisions. I think 0:09:36.120 --> 0:09:39.480 also people have to understand that you're not talking so 0:09:39.679 --> 0:09:41.680 much about what you're going to do on the day. 0:09:41.880 --> 0:09:45.240 You're talking about what should our future path be over 0:09:45.280 --> 0:09:47.720 the next six months and over the next two years, 0:09:47.720 --> 0:09:54.040 but especially over the next six months, because you know, 0:09:54.240 --> 0:09:56.959 you have to it's a big committee and you have 0:09:57.040 --> 0:09:59.880 to be basically on board with you know, what you 0:10:00.160 --> 0:10:01.400 to do. On that particular day. 0:10:01.600 --> 0:10:03.920 You were very vocal about how you felt about the 0:10:03.960 --> 0:10:05.280 dot plot back in the day. 0:10:06.040 --> 0:10:06.679 Didn't like it. 0:10:08.040 --> 0:10:08.680 Bring this up. 0:10:13.480 --> 0:10:17.400 So significant to see your dot always just there at zero? 0:10:18.400 --> 0:10:19.800 Are you going to get rid of it? Would you 0:10:19.840 --> 0:10:21.280 get rid of it? I mean, what use? 0:10:21.679 --> 0:10:24.360 I think we can do better than we have on 0:10:24.400 --> 0:10:27.760 the dot plot. And at one point I talked about, 0:10:27.920 --> 0:10:31.360 you know, dropping out completely. I did drop out of 0:10:31.400 --> 0:10:35.160 the long long run dot part. But I think we 0:10:35.200 --> 0:10:38.920 could do something like former chair Ben BERNANKEI outlined in 0:10:38.960 --> 0:10:42.280 the recent conference that the FED had about the framework review, 0:10:42.480 --> 0:10:48.520 and he mocked up a quarterly report that that could 0:10:48.520 --> 0:10:50.680 be put out, and that would put out a forecast. 0:10:50.800 --> 0:10:54.920 That's what other central banks do, and then members can 0:10:54.960 --> 0:10:57.480 talk relative to that forecast. They could say, well, no, 0:10:57.600 --> 0:11:00.760 I'm more optimistic about the economy, or i more pessimistic 0:11:00.840 --> 0:11:04.560 about inflaier whatever. I think that would be closer to 0:11:04.600 --> 0:11:07.800 an international standard. And that's probably the direction this should 0:11:07.840 --> 0:11:10.120 go because the dot plot has its problems. 0:11:11.440 --> 0:11:14.959 Stay with us more Bloomberg surveillance coming up after this. 0:11:23.960 --> 0:11:26.400 Marissa Adams, the Europe and America's regional head of Global 0:11:26.440 --> 0:11:29.319 Trade Solutions at HSBC, IT joins us now for more. 0:11:29.480 --> 0:11:30.240 Marissa, welcome back. 0:11:30.240 --> 0:11:31.920 We've got lots to talk about with you, including the 0:11:32.000 --> 0:11:34.319 latest developments in the UK. I just want to start 0:11:34.320 --> 0:11:36.760 with mitigation strategies. It's something you give us an update 0:11:36.800 --> 0:11:39.719 on every time we talk. What are the mitigation strategies 0:11:39.720 --> 0:11:42.480 now and how sustainable are they are? We reaching a 0:11:42.520 --> 0:11:45.120 point where corporations have got to make a decision either 0:11:45.160 --> 0:11:46.800 custom costs or pass this on. 0:11:48.520 --> 0:11:51.360 Thanks Jonathan, and good morning to you and Lisa. We 0:11:51.400 --> 0:11:53.679 are getting to a bit of an impasse now where 0:11:53.840 --> 0:11:56.760 there is only so long that companies can delay their investments, 0:11:56.800 --> 0:12:00.440 delay their decisions in terms of rejigging their supply chains, 0:12:00.440 --> 0:12:02.760 are looking for new demand markets and we've obviously seen 0:12:02.800 --> 0:12:05.600 a lot of first movers actually act quite quickly. But 0:12:05.640 --> 0:12:07.719 we are getting to a point now where the uncertainty, 0:12:08.040 --> 0:12:10.120 rather than the level of tariffs, is going to be 0:12:10.160 --> 0:12:10.959 a challenge. 0:12:11.200 --> 0:12:13.120 Well you say that, and that a lot of people 0:12:13.160 --> 0:12:15.959 come on this show say peak uncertainty is behind us, 0:12:16.240 --> 0:12:19.440 and actually there is enough stability in the trade picture. 0:12:19.760 --> 0:12:20.439 I've lost you. 0:12:20.520 --> 0:12:21.360 I can actually hear you. 0:12:22.040 --> 0:12:23.880 Let's try to reestablish that, can you hear me? Now, 0:12:24.800 --> 0:12:27.080 let's try to reestablish that? Which on that line, that's 0:12:27.080 --> 0:12:29.200 the question to me, though, is you know she was 0:12:29.200 --> 0:12:32.240 saying that the uncertainty will still remain an issue while 0:12:32.280 --> 0:12:34.240 so many people have come on the show and talked 0:12:34.280 --> 0:12:37.320 about how there is a greater degree of certainty now 0:12:37.520 --> 0:12:39.840 which gives companies the ability to make the decisions you 0:12:39.880 --> 0:12:40.480 were talking. 0:12:40.280 --> 0:12:43.600 About, Francis Donald, what does she tell us RBC? She said, 0:12:43.600 --> 0:12:46.000 we're getting to the point Rissa Adams was alluding to it. 0:12:46.000 --> 0:12:47.880 We're getting to the point where corporation's got to think 0:12:47.880 --> 0:12:50.800 about what to do here. Cut costs, lay off labor, 0:12:50.840 --> 0:12:53.600 pass it on price hikes. It's exactly what my Gabe 0:12:53.600 --> 0:12:56.160 and Morcanstani's thinking about too. A lot of people might 0:12:56.200 --> 0:12:58.400 be surprised by this and say, you just market to market, 0:12:58.440 --> 0:13:01.199 you're pushing this off. Many people said at the very beginning, 0:13:01.280 --> 0:13:03.240 you're not going to see this overnight. It will take time. 0:13:03.320 --> 0:13:05.360 This is a process. First, you had to get through 0:13:05.360 --> 0:13:08.480 the pre tariff inventry. There have been other mitigation strategies 0:13:08.480 --> 0:13:10.760 that were implemented. Now we're going to get further and 0:13:10.800 --> 0:13:13.320 further through the year into the start of twenty six. 0:13:13.679 --> 0:13:15.880 You get close to decision time. It's a decision they're 0:13:15.880 --> 0:13:16.439 going to have to make. 0:13:16.720 --> 0:13:18.720 This is the reason why the Christmas shopping season and 0:13:18.760 --> 0:13:21.040 we keep talking about it and I realize it's still September. 0:13:21.080 --> 0:13:22.640 It's a reason why it's going to be so important. 0:13:22.760 --> 0:13:25.959 How much are consumers willing to accept some of the 0:13:26.040 --> 0:13:28.600 higher prices and how much will some of these companies 0:13:28.600 --> 0:13:30.880 have to continue with the cost mitigation plans. And that 0:13:30.960 --> 0:13:32.560 I think is what a lot of people were thinking 0:13:32.559 --> 0:13:35.360 about MRIs. I think we've re established you Sorry about 0:13:35.360 --> 0:13:38.160 the technical glitch. I'm wondering, can you get a sense 0:13:38.360 --> 0:13:41.559 of how much is hinging on the Christmas shopping season 0:13:41.840 --> 0:13:44.920 and the idea of how much consumers are really willing 0:13:45.280 --> 0:13:47.040 to adjust to higher pricing. 0:13:48.440 --> 0:13:50.080 You know, we've seen two sides of this too. I 0:13:50.080 --> 0:13:53.280 think firstly, we also saw the supply come forward for 0:13:53.400 --> 0:13:55.600 that shopping season, which is obviously critical, and we saw 0:13:55.600 --> 0:13:57.840 a lot of front loading coming through earlier in the year. 0:13:58.720 --> 0:14:00.880 But whether those costs of actually been passed on at 0:14:00.880 --> 0:14:02.840 this stage, I think is yet to be determined. I 0:14:02.880 --> 0:14:04.760 was in a large big box store yesterday and obviously 0:14:04.760 --> 0:14:08.120 all of the Christmas attire is in and all of 0:14:08.160 --> 0:14:10.320 those goods are there already, so I think that might 0:14:10.320 --> 0:14:12.200 be a little bit earlier than before. But whether they've 0:14:12.200 --> 0:14:14.360 actually passed on costs at this stage is yet to 0:14:14.360 --> 0:14:16.640 be seen. I think what's kind of interesting, and you 0:14:16.679 --> 0:14:18.679 know we've been talking about you alluded to at the 0:14:18.720 --> 0:14:22.160 beginning of the US and UK trade discussions. Obviously the 0:14:22.200 --> 0:14:26.400 trade state visit here from the President really interesting that 0:14:26.720 --> 0:14:29.200 whilst we obviously have this huge focus on goods trade 0:14:29.200 --> 0:14:31.480 and I've spoken about it before with both of you. 0:14:31.960 --> 0:14:36.920 Services trades really remains something credibly critical and actually very 0:14:37.000 --> 0:14:39.400 much an area where if you look at the economies 0:14:39.400 --> 0:14:42.320 of the future where we're trying to grow something that 0:14:42.320 --> 0:14:46.160 they're putting an extra emphasis on. The economic trade agreement 0:14:46.200 --> 0:14:49.040 that was reached in the particular the tech agreement that 0:14:49.120 --> 0:14:51.720 was announced about two hundred million in investment here into 0:14:51.720 --> 0:14:55.360 the UK really critical and we're seeing that clearly there 0:14:55.360 --> 0:14:58.200 are delays in some of the tariffs they're coming through 0:14:58.200 --> 0:15:00.960 on goods, but that isn't stopping business where services are 0:15:01.000 --> 0:15:03.480 a key component to actually growing and moving forward. 0:15:03.640 --> 0:15:05.760 So it means that the services businesses can have that 0:15:05.800 --> 0:15:07.760 greater degree of certainty to make decisions. 0:15:07.840 --> 0:15:08.960 I just wonder you talk. 0:15:08.840 --> 0:15:11.600 About a greater degree of coalescing around some sort of 0:15:11.640 --> 0:15:14.280 agreement between the US and UK. I want to talk 0:15:14.280 --> 0:15:17.520 about China and this phone call between Jijinping and President 0:15:17.600 --> 0:15:20.320 Trump later this morning, and I just wonder how much 0:15:20.360 --> 0:15:23.280 companies that you work with that you advise have completely 0:15:23.360 --> 0:15:26.400 written off China trade or have tried to completely immunize 0:15:26.400 --> 0:15:29.360 themselves from that supply chain just because there doesn't seem 0:15:29.400 --> 0:15:31.440 to be a definitive end to the uncertainty that you 0:15:31.440 --> 0:15:32.440 say is so paralyzing. 0:15:33.840 --> 0:15:36.400 So I think one of the key challenges with China 0:15:36.440 --> 0:15:39.040 and the US is that China supply chain is very 0:15:39.160 --> 0:15:42.160 very well built up. There's a huge amount of alliance 0:15:42.200 --> 0:15:43.840 between the China and the US on that. So the 0:15:43.920 --> 0:15:47.400 idea of shifting completely away just isn't really possible for 0:15:47.480 --> 0:15:50.920 a lot of companies, whether that's in consumer retail, automotive, 0:15:51.160 --> 0:15:54.120 some of the advanced manufacturing, even in the pharmaceutical sector. 0:15:54.440 --> 0:15:57.560 So there are obviously elements that they can rejig and 0:15:57.560 --> 0:16:00.760 look at other areas, but this is a critical goods 0:16:00.920 --> 0:16:04.040 supply chain for the United States, and any sort of 0:16:04.080 --> 0:16:07.160 certainty as that comes through on where those teriffs land 0:16:07.200 --> 0:16:09.280 will be welcomed by the corporates that we work with, 0:16:11.280 --> 0:16:11.920 stay with us. 0:16:12.240 --> 0:16:14.800 More Bloomberg Surveillance coming up after this. 0:16:24.000 --> 0:16:26.520 Joining us Now to extend the conversation, Jeanette lo A 0:16:26.600 --> 0:16:28.160 Shatigas Janette, welcome to the show. 0:16:28.200 --> 0:16:29.080 You just heard from Tanna. 0:16:29.120 --> 0:16:31.160 They're talking about Chinese and the lack of buying of 0:16:31.280 --> 0:16:35.320 soy beans here in America, important to core Republican districts 0:16:35.320 --> 0:16:37.640 and states in this country. Janette do you think we're 0:16:37.680 --> 0:16:40.720 any closer to nailing down those purchase agreements that really 0:16:40.720 --> 0:16:44.120 dominated the conversations back in the president's first term. 0:16:44.720 --> 0:16:46.760 Yeah, it's a great point, and thanks for having me on. 0:16:47.200 --> 0:16:49.640 So there's a lot of talk about whether or not 0:16:49.680 --> 0:16:52.240 there's going to be this grand deal between Shrump and she, 0:16:52.720 --> 0:16:55.360 and I think I'm a little skeptical about that happening. 0:16:55.640 --> 0:16:58.200 What we've seen is what Tayler kind of mentioned, it's 0:16:58.200 --> 0:17:01.040 this de escalationion. It's kind of meaning the status quo 0:17:01.360 --> 0:17:04.200 while there is this decoupling of the two countries. 0:17:04.400 --> 0:17:06.439 And you're seeing that with the fights over. 0:17:06.400 --> 0:17:10.840 Navidia ships and critical minerals coming to the US and 0:17:10.920 --> 0:17:14.639 then US sending ships over to China, and then also 0:17:14.720 --> 0:17:18.240 this piece about the agricultural the soybean purchases. So I 0:17:18.280 --> 0:17:20.160 think what they're trying to do is they're showing their 0:17:20.200 --> 0:17:23.639 pressure points on various sides to get a particular deal. This, 0:17:23.840 --> 0:17:26.520 I mean, may all be about TikTok, but then also 0:17:26.560 --> 0:17:28.600 trying to get some of these other pieces in place, 0:17:28.840 --> 0:17:32.000 trying to get companies in China to actually buy Navidiot 0:17:32.040 --> 0:17:34.760 ships after Trump said that he would allow that, getting 0:17:34.760 --> 0:17:37.480 them to actually buy these soybean purchases, which obviously, as 0:17:37.480 --> 0:17:40.200 you said, would be really important for critical constituencies in 0:17:40.240 --> 0:17:43.480 the US for political reasons. And so then that's kind 0:17:43.520 --> 0:17:44.840 of I think where we're going. So it's going to 0:17:44.840 --> 0:17:46.719 probably be a smaller deal, and trying to figure out 0:17:46.760 --> 0:17:49.040 how do we maintain some sort of status quote, how 0:17:49.040 --> 0:17:51.800 do we maintain some sort of good trade relations while 0:17:51.800 --> 0:17:53.560 at the same time we know both sides are kind 0:17:53.600 --> 0:17:54.800 of decoupling from one another. 0:17:54.960 --> 0:17:56.359 This is the reason why jedet I think a lot 0:17:56.359 --> 0:17:59.840 of people are trying to understand how transactional this relationship 0:17:59.920 --> 0:18:02.399 is and how rooted it is in ideology on this 0:18:02.480 --> 0:18:07.719 idea of national security and trying to immunize the respective economies. 0:18:07.240 --> 0:18:07.919 From one another. 0:18:08.400 --> 0:18:10.840 Is there any signal in what we might hear about 0:18:10.840 --> 0:18:11.520 from TikTok? 0:18:13.000 --> 0:18:14.320 Yeah, I mean, I think the one thing that would 0:18:14.320 --> 0:18:17.000 obviously be important is what does happen with the algorithm? 0:18:17.000 --> 0:18:20.639 I mean, the Trump has been less focused on the 0:18:20.720 --> 0:18:24.080 national security concerns that members of Congress have been with 0:18:24.160 --> 0:18:26.840 regard to the TikTok deal, and if that algorithm is 0:18:26.880 --> 0:18:30.119 still a licensed from byteedance, I think that's kind of 0:18:30.119 --> 0:18:32.160 a sign that this is a little bit more transactional 0:18:32.359 --> 0:18:34.840 and less about national security. But to the other point, 0:18:34.920 --> 0:18:38.120 Trump is really focused on other key sectors where that's 0:18:38.160 --> 0:18:40.560 really much more the focus for him for national security. 0:18:40.720 --> 0:18:44.400 So he's much more focused on doing more domestic manufacturing 0:18:44.560 --> 0:18:49.119 of semiconductors, pharmaceuticals, defense components, things of that nature in 0:18:49.119 --> 0:18:51.680 the United States. Tech obviously is a big piece of that. 0:18:51.760 --> 0:18:53.960 The AI race is a very big piece of that. 0:18:54.240 --> 0:18:57.119 I think that's also what his broader picture is. So 0:18:57.160 --> 0:18:59.400 being able to help in Navidia, I think would be 0:18:59.480 --> 0:19:01.520 more in stative, almost more than TikTok. 0:19:02.119 --> 0:19:04.040 FedEx came out last night and said that it was 0:19:04.040 --> 0:19:06.199 going to take a billion dollar hit partly because of 0:19:06.640 --> 0:19:08.840 Chinese deliveries that are going to be taken off the 0:19:08.840 --> 0:19:10.800 table for them or limited as a result of some 0:19:10.840 --> 0:19:13.760 of the changes in roles. A lot of companies have 0:19:13.840 --> 0:19:16.280 just moved on, and so have investors from this story. 0:19:16.359 --> 0:19:18.399 Is there anything that can come out of today or 0:19:18.440 --> 0:19:21.119 the next couple of weeks with the negotiations that you 0:19:21.200 --> 0:19:24.240 think a lot of companies, corporate executives, investors should be 0:19:24.280 --> 0:19:27.800 paying attention to that could reintroduce a level of uncertainty 0:19:27.800 --> 0:19:28.960 that really will make a difference. 0:19:30.160 --> 0:19:32.480 Yeah, I mean, I think the bigger story is actually 0:19:32.560 --> 0:19:34.480 I mean, so the call will be important in figuring 0:19:34.480 --> 0:19:37.480 out what deliverables there may be and whether there is 0:19:37.520 --> 0:19:40.160 something broader than when I outlined a few minutes ago. 0:19:40.400 --> 0:19:43.080 But I think also obviously what happens with the court 0:19:43.119 --> 0:19:45.800 case before the Supreme Court as to whether or not 0:19:45.800 --> 0:19:49.280 not the tears that Trump imposed under the AIPA Trade Authority, 0:19:49.440 --> 0:19:52.119 whether those can remain in place, that could be quite disruptive, 0:19:52.400 --> 0:19:54.399