WEBVTT - Trump-Putin and Inflation Data 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.360 --> 0:00:31.200 Kate Moore, CIO City Wealth this morning. Kate does your 0:00:31.280 --> 0:00:34.560 team of security and analyst at City Group, but claimed 0:00:34.760 --> 0:00:38.199 we use them all the time, great, great benefit. Do 0:00:38.320 --> 0:00:42.720 they have any framework of what September thirty earnings look like? 0:00:44.360 --> 0:00:47.120 I think it's incredibly hard Tom right now to make 0:00:47.159 --> 0:00:50.120 a call on what third border earnings are going to 0:00:50.120 --> 0:00:52.199 look like, because, and this is a point I've been 0:00:52.200 --> 0:00:55.520 making as we were even getting reporting during for second 0:00:55.560 --> 0:00:59.160 quarterer season, is that there is a growing gap between 0:00:59.200 --> 0:01:02.520 the winners and users where it's around CERAs round Ai. 0:01:03.640 --> 0:01:05.920 Yeah, no, igain to continue. 0:01:06.000 --> 0:01:08.680 I think this is, folks, the absolute heart of the matter, 0:01:09.080 --> 0:01:13.119 growing direct This is political economics with Kate Moore from Chicago. 0:01:13.400 --> 0:01:16.560 The answer is, Kate Moore, it's a growing gap of America, 0:01:16.720 --> 0:01:20.000 a growing gap of society and a growing gap of investment. 0:01:20.160 --> 0:01:20.360 Right. 0:01:21.319 --> 0:01:23.200 Yeah, Remember Tom, We've talked a lot about in the 0:01:23.240 --> 0:01:26.440 past you know, K shaped economies, but I'm seeing a 0:01:26.560 --> 0:01:29.440 very K shaped market at this point in terms of 0:01:29.480 --> 0:01:33.039 the fundamentals, particularly even as we get these trading rallies, 0:01:33.080 --> 0:01:36.040 whether it's around small caps or home builders or some 0:01:36.120 --> 0:01:38.679 of the lower quality and more rate sensitive areas at 0:01:38.680 --> 0:01:39.240 the market. 0:01:39.440 --> 0:01:41.039 And what I mean by the K shape is. 0:01:40.959 --> 0:01:44.400 That you're increasingly seeing companies that have the ability to 0:01:44.480 --> 0:01:48.920 navigate policy changes and have the ability to navigate you know, 0:01:49.120 --> 0:01:52.360 sort of weaker end demand in general, because we had 0:01:52.360 --> 0:01:56.360 a slowing economic trend even before this policy introduction. And 0:01:56.440 --> 0:01:59.440 those that are adopting AI and becoming more efficient and 0:01:59.520 --> 0:02:02.840 really focusing on their productivity. And then those that are 0:02:02.920 --> 0:02:04.880 kind of left behind, maybe they didn't have the cash 0:02:04.920 --> 0:02:07.480 to make that investment, maybe they were you know, they 0:02:07.480 --> 0:02:09.160 don't have the right people in place to make those 0:02:09.200 --> 0:02:12.480 business decisions. But there is a real gap in each 0:02:12.520 --> 0:02:15.519 industry between the haves and have nots. In theory, this 0:02:15.560 --> 0:02:19.080 should be a great environment for alpha seeking and active investors. 0:02:20.240 --> 0:02:22.919 So Kate, it seems if you look at the stock 0:02:22.960 --> 0:02:27.040 markets making seemingly new highs every day, does that suggest 0:02:27.080 --> 0:02:29.880 too that the markets said tariff risk is in the 0:02:29.960 --> 0:02:31.840 rearview mirror. I mean, do you agree with that? 0:02:33.160 --> 0:02:34.680 Yeah, So here's my problem. 0:02:34.720 --> 0:02:36.920 I feel like the markets are overly complacent when it 0:02:36.919 --> 0:02:40.040 comes to terror risks, and then you see these, you know, 0:02:40.520 --> 0:02:44.560 knee jerk reactions to the PPI data yesterday and big 0:02:44.600 --> 0:02:46.760 reversals from what had been a very kind of risk 0:02:46.880 --> 0:02:50.240 on high beta move for the previous two weeks. I 0:02:50.440 --> 0:02:52.960 think that, you know, there's a lot of room for 0:02:53.040 --> 0:02:56.160 the market to quiet down. That's another way of saying 0:02:56.240 --> 0:02:59.400 getting to the bottom end of its trading range. You know, 0:02:59.520 --> 0:03:03.440 as some of this tariff data comes through, obviously we're 0:03:03.440 --> 0:03:05.119 going to be watching retail sales and a few quick 0:03:05.160 --> 0:03:08.000 seconds here to get a sense for how consumers spared 0:03:08.040 --> 0:03:09.720 over the course of July. I mean that that's going 0:03:09.800 --> 0:03:10.400 to be important. 0:03:10.840 --> 0:03:12.480 But more important than. 0:03:12.400 --> 0:03:14.760 That is really what the trend is in terms of 0:03:14.880 --> 0:03:18.760 prices and in margins, corporate margins over the next few quarters. 0:03:20.280 --> 0:03:23.920 How have earning has been so far, in your opinion, 0:03:24.080 --> 0:03:26.400 looks pretty darning good for the second quarter, came in 0:03:26.520 --> 0:03:29.440 better than expected it so it looks like Corporate America delivered. 0:03:30.600 --> 0:03:32.480 Yeah, I mean, I thought the earning has looked pretty good. 0:03:33.200 --> 0:03:34.920 The one thing I will say though, is some of 0:03:35.000 --> 0:03:37.600 these aggregate numbers, whether it's on the sector level or 0:03:37.680 --> 0:03:41.600 on the index level, do mask some of that discrepancy 0:03:41.680 --> 0:03:44.440 or that you know, sort of K shaped experience underneath 0:03:44.480 --> 0:03:47.320 the surface. But one thing I've always said is that 0:03:47.440 --> 0:03:50.480 you don't want to bet against the resiliency of corporate America. 0:03:50.960 --> 0:03:54.520 That the decision making to really kind of manage overall expenses, 0:03:54.880 --> 0:03:56.960 to focus on the business lines that have the greatest 0:03:57.200 --> 0:04:01.360 potential for growth, and to really kind of dial up 0:04:01.440 --> 0:04:05.560 and dial down spending when economic conditions necessitated, you know, 0:04:05.600 --> 0:04:09.960 should not be discounted. This flexibility from US companies, particularly 0:04:10.160 --> 0:04:13.280 US listed companies, is so much greater than the rest 0:04:13.320 --> 0:04:14.960 of the world, and it's a reason why I prefer 0:04:15.000 --> 0:04:16.760 the USK over other regions for the most part. 0:04:16.920 --> 0:04:19.200 Kate, up, we go in the equity market. We get 0:04:19.240 --> 0:04:21.120 it right back in one minute. What's it mean? 0:04:22.640 --> 0:04:24.360 Well, I mean, the one thing I'm sort of focused 0:04:24.400 --> 0:04:26.720 on as I'm looking at this data, it may have 0:04:26.760 --> 0:04:29.720 to remember that, like, while these were visions to June 0:04:29.800 --> 0:04:32.160 data are excellent, you know, it looks like there was 0:04:32.200 --> 0:04:35.599 a significant amount of retail activity, that the retail sales 0:04:35.680 --> 0:04:39.160 data are nominal, So there's a chance that that's capturing 0:04:39.880 --> 0:04:43.040 some of the increase in prices that we're starting to 0:04:43.080 --> 0:04:45.920 see in other bits of economic data. So this is 0:04:45.960 --> 0:04:48.920 not necessarily an indicative like a real acceleration in terms 0:04:48.920 --> 0:04:51.960 of overall retail spending. And that's what I want to 0:04:52.000 --> 0:04:54.000 dig into a little bit later this morning as we 0:04:54.080 --> 0:04:54.680 get off right. 0:04:54.880 --> 0:04:58.040 Yeah, the low point of your Sunday morning is you've 0:04:58.040 --> 0:05:02.000 got to read Andrew Hollandhorst for three hours. What is 0:05:02.080 --> 0:05:06.280 the city girl belief on the tariff pass through to 0:05:06.400 --> 0:05:07.080 the consumer? 0:05:08.640 --> 0:05:09.800 Well, the pass through. 0:05:10.000 --> 0:05:12.840 We were having a pretty robust debate across city on 0:05:13.520 --> 0:05:15.760 what the pass through might be. And I think, as 0:05:15.800 --> 0:05:17.400 we all know, they're the three buckets. You know, what 0:05:17.440 --> 0:05:20.000 does a supplier do, what is the importer do, and 0:05:20.480 --> 0:05:22.920 what you know kind of gets passed through to the consumer. 0:05:23.560 --> 0:05:26.600 And it feels like it's a moving target, depending not 0:05:26.800 --> 0:05:29.840 just on the industry and the commodity, but on the 0:05:29.920 --> 0:05:32.719 flexibility of that company and how sort. 0:05:32.520 --> 0:05:35.360 Of captive their consumer base is. 0:05:36.040 --> 0:05:38.840 I think we're going to see, you know, fewer companies 0:05:38.960 --> 0:05:42.840 absorbing the costs, both on the supplier side and on 0:05:43.040 --> 0:05:47.280 the importer side, and more costs passed through to the consumer. 0:05:48.000 --> 0:05:50.400 We'll have to see m Thank you so much for 0:05:50.560 --> 0:05:50.840 learting me. 0:05:51.240 --> 0:05:53.440 We'll let you get back to an incredibly busy morning 0:05:54.000 --> 0:05:57.359 at City Group Kate Moore driving all of Citygroup Wealth. 0:05:57.680 --> 0:06:02.040 Thrilled to have her with us this morning. Stay with us. 0:06:02.360 --> 0:06:05.480 More from Bloomberg Surveillance coming up after this. 0:06:12.839 --> 0:06:16.400 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:06:16.480 --> 0:06:19.600 weekday afternoons from seven to ten am Eastern Listen on 0:06:19.720 --> 0:06:23.080 Apple Karplay and Android Auto with the Bloomberg Business app, 0:06:23.320 --> 0:06:25.000 or watch us live on YouTube. 0:06:25.120 --> 0:06:27.520 We're to go sixty thousand feet right now. Peter's share 0:06:27.600 --> 0:06:29.360 with us here on a Friday in the summer as 0:06:29.440 --> 0:06:33.520 we reset for Q three. The end of Q three 0:06:33.640 --> 0:06:38.080 and into Q four is where Peter the technology juggernaut 0:06:38.120 --> 0:06:43.680 we're all living and experiencing. Do you assume that academy 0:06:43.760 --> 0:06:47.000 securities that we're just going to have the haves get 0:06:47.120 --> 0:06:50.080 heavier and the have nots get have not here I 0:06:50.200 --> 0:06:52.719 mean a greater divide within society. 0:06:53.400 --> 0:06:53.599 Yeah. 0:06:53.720 --> 0:06:55.760 Unfortunately, you know, we keep looking at and I really 0:06:55.839 --> 0:06:57.840 am from a market standpoint, I really want to buy 0:06:57.920 --> 0:07:00.719 the Russell two thousand right waiting for the opportunity where 0:07:00.720 --> 0:07:03.000 the small caps and midcaps can outperform. And yet you 0:07:03.120 --> 0:07:05.040 look at it, the story is really still is very 0:07:05.120 --> 0:07:08.720 AI driven. It's the spending on AI, it's the electricity 0:07:08.800 --> 0:07:11.000 generation that needs to be done so that entire industry 0:07:11.120 --> 0:07:12.800 is like doing extremely well. 0:07:12.880 --> 0:07:13.720 That's where the growth is. 0:07:14.040 --> 0:07:16.080 And away from that, I think the impact of tariffs 0:07:16.080 --> 0:07:18.320 are impacting small and mid sized companies. Just feel there's 0:07:18.360 --> 0:07:20.120 an overall weight on the economy from that. 0:07:20.360 --> 0:07:23.840 But somebody live in three towns outside Cincinnati right now 0:07:24.480 --> 0:07:26.040 and they're seeing, you know, the reds are going down 0:07:26.120 --> 0:07:26.640 at Flames. 0:07:26.680 --> 0:07:28.840 I mean, you know, this is not happening. What the 0:07:28.880 --> 0:07:29.600 poets are doing. 0:07:29.640 --> 0:07:32.080 Well, somebody out of a job or a his daughters 0:07:32.120 --> 0:07:34.160 out of a job outside Cincinnati. 0:07:34.880 --> 0:07:38.000 They don't give a damn about AI. And to me, 0:07:38.120 --> 0:07:39.920 it's just a further I mean, you're brilliant at this. 0:07:40.360 --> 0:07:42.640 It's a further severance of society. 0:07:43.120 --> 0:07:43.320 Yeah. 0:07:43.360 --> 0:07:45.240 And you know, I think part of the reason I'm 0:07:45.280 --> 0:07:47.520 slightly nervous, more maybe nervous than most guests about the 0:07:47.560 --> 0:07:50.280 economy is I'm worried about the job situation. I'm particularly 0:07:50.320 --> 0:07:53.360 worried about, you know, the recent college graduate situation right, 0:07:53.640 --> 0:07:55.760 the unemployment rate seems to be fairly high. They're not 0:07:55.800 --> 0:07:59.200 getting jobs. I look at law school applications, they're skyrocketing. 0:07:59.280 --> 0:08:01.640 That to me is another sign that jobs are very tough, 0:08:01.720 --> 0:08:04.200 especially for the college graduates. And those are the people 0:08:04.240 --> 0:08:06.640 I think who currently are being displaced by AI. Right. 0:08:06.720 --> 0:08:07.640 That's people are. 0:08:07.600 --> 0:08:09.960 Comfortable kind of giving those sorts of assignments to AI, 0:08:10.480 --> 0:08:12.520 and you know, they're not going to let big decisions 0:08:12.560 --> 0:08:14.360 being made, but they're letting some of that work be done. 0:08:14.680 --> 0:08:16.480 And I'm not sure what that does for that job 0:08:16.600 --> 0:08:18.600 market opportunity. I'm not sure what that does for a 0:08:18.680 --> 0:08:20.640 future where those people supposed to get those jobs that 0:08:20.760 --> 0:08:22.640 lead them into management and things like that over time. 0:08:22.960 --> 0:08:25.760 So some of this I think we're getting close probably 0:08:25.840 --> 0:08:27.480 you know, six months a year away. There's going to 0:08:27.520 --> 0:08:30.000 be a little bit of pushback on AI, the deployment 0:08:30.440 --> 0:08:31.960 and you know, you keep looking at the cost of 0:08:32.040 --> 0:08:33.680 electricity rising, that's going to be an issue. 0:08:34.559 --> 0:08:38.680 Inflation also an issue for these markets for this Futter reserve. 0:08:38.720 --> 0:08:42.760 It got's inflation data this week. Uh, the brucer pricing 0:08:42.840 --> 0:08:45.199 next is yesterday, I think really got people's attention. What 0:08:45.280 --> 0:08:47.720 did you make of that? And some of the cooler 0:08:47.800 --> 0:08:49.040 CPI with data we got earlier. 0:08:49.080 --> 0:08:51.240 You know, I always ignore a little bit PPI. 0:08:51.360 --> 0:08:53.480 To me, that's always been kind of a tertiary data point, 0:08:53.559 --> 0:08:55.560 and it's always hard to see that it actually ever 0:08:55.640 --> 0:08:58.600 follows through into true inflation. So it was a bit disturbing, 0:08:58.679 --> 0:09:00.920 but nothing you know, to alarm me. I still think 0:09:01.000 --> 0:09:02.880 goods inflation is going to be there a little bit 0:09:03.200 --> 0:09:04.599 away from that, though, I think, if I'm right, in 0:09:04.640 --> 0:09:07.600 the economy slowing, you've seen some pressure on services inflation, 0:09:07.880 --> 0:09:09.960 and to be honest, even in CPI, which was somewhat cool, 0:09:10.320 --> 0:09:12.559 I think it's even overstated there because we continue to 0:09:12.600 --> 0:09:13.960 use owner's equivalent. 0:09:13.600 --> 0:09:15.000 Rent as the metric. 0:09:15.160 --> 0:09:17.360 I'm not sure why we won't adopt Cleveland has a 0:09:17.480 --> 0:09:21.160 real time you know, rentric metric, you know Zillow. And 0:09:21.240 --> 0:09:23.079 to me, the one thing this comes to back to 0:09:23.160 --> 0:09:25.400 so much of our data. There is so much real time, 0:09:25.520 --> 0:09:28.000 reasonably accurate information out there, and we still tend to 0:09:28.040 --> 0:09:30.640 rely on surveys and these old methodologies. We have to 0:09:30.720 --> 0:09:32.839 revamp that. So I think CPI is overstated. So I 0:09:32.880 --> 0:09:34.839 think the FED will be in position to cut three 0:09:34.880 --> 0:09:37.440 times this year because jobs are going to weaken enough, 0:09:37.720 --> 0:09:39.240 and inflation is going to remain contained. 0:09:39.800 --> 0:09:44.920 Given that backdrop, can this market expand out the breadth 0:09:45.400 --> 0:09:48.439 of this market here, which has been so concentrated, Yeah. 0:09:48.320 --> 0:09:48.960 I think it can. 0:09:49.080 --> 0:09:51.400 And to me, I think the real growth is going 0:09:51.440 --> 0:09:53.079 to have to come from what we've been calling national 0:09:53.120 --> 0:09:55.559 production for national security. And I think last time I 0:09:55.640 --> 0:09:57.520 was on, we talked about the Department Defense made the 0:09:57.559 --> 0:10:01.640 investment in MP. Now we're hearing potentially the government's going 0:10:01.679 --> 0:10:04.880 to make an investment in Intel. And actually I've got 0:10:04.880 --> 0:10:07.240 admit I'm an owner of Intel, so that's a full disclosure. 0:10:07.480 --> 0:10:09.520 But on those things, I think, right this has to 0:10:09.600 --> 0:10:12.520 come national production for national security, and this administration is 0:10:12.520 --> 0:10:14.160 going to do it through investment. They're not just going 0:10:14.200 --> 0:10:16.440 to give subsidies. They're not because they want the American 0:10:16.520 --> 0:10:17.360 citizen to benefit. 0:10:17.520 --> 0:10:18.120 Can I ask a. 0:10:18.160 --> 0:10:21.880 Stupid question in our new capitalism, It's Friday stupid question, right? 0:10:22.640 --> 0:10:24.800 Why don't they make an investment in Microsoft? 0:10:25.400 --> 0:10:26.400 Why buy a dog? 0:10:27.080 --> 0:10:31.640 I mean, if the President Trump wants to attach himself 0:10:32.400 --> 0:10:35.520 to our technological superiority. 0:10:35.440 --> 0:10:38.160 By two percent of Microsoft, you know, And I think 0:10:38.360 --> 0:10:41.200 what we're really looking I'll come back to national production 0:10:41.280 --> 0:10:43.800 for national security. So I think someone in the administration 0:10:43.880 --> 0:10:46.280 is taking time. What do we need to be producing 0:10:46.360 --> 0:10:49.679 here to be safe. It's going to include pharma, biochemical 0:10:49.960 --> 0:10:53.800 or bio biotech, those sorts of industries. Look for investments 0:10:53.840 --> 0:10:55.480 there because those are things we want to be producing 0:10:55.800 --> 0:10:58.360 we need to do domestically. Chips is all over this, right, 0:10:58.400 --> 0:11:01.320 and Intel's kind of the cheapest way to get involved 0:11:01.360 --> 0:11:01.880 in it, like. 0:11:02.000 --> 0:11:02.920 Tiss is in Norway. 0:11:03.000 --> 0:11:06.240 I'll give you in Singapore the sovereign Wealth fun I mean, 0:11:06.240 --> 0:11:09.600 I had an office once in Boston near the Kuwait Authority. 0:11:09.679 --> 0:11:12.679 Whatever, I'd get a sovereign wealth fund. That's not what 0:11:12.840 --> 0:11:14.560 we're talking about, Peter, right. 0:11:14.559 --> 0:11:16.599 No, I think this is much more strategic, right. I 0:11:16.679 --> 0:11:20.160 think again, the deals we are looking for rarerst critical minerals, 0:11:20.200 --> 0:11:22.599 the processing, refining, and I think this is meant to 0:11:22.679 --> 0:11:23.480 boost things along. 0:11:23.800 --> 0:11:25.440 It also ties in very nicely for. 0:11:25.480 --> 0:11:28.080 These companies with the big beautiful bill where you get 0:11:28.120 --> 0:11:30.839 accelerated depreciation. So if you can get this influx of 0:11:30.960 --> 0:11:33.959 money and excitement because the US government's involved, presumably the 0:11:34.040 --> 0:11:36.480 US governments can be buying from the They've got that 0:11:36.600 --> 0:11:39.000 impetus to grow and build. And I think It's going 0:11:39.040 --> 0:11:41.360 to be targeted though, around the industries that we are 0:11:41.480 --> 0:11:43.880 behind and that we need to be doing domestically to 0:11:43.920 --> 0:11:45.359 compete with China economically. 0:11:46.120 --> 0:11:48.480 Should investors, should the market be paying attention to what 0:11:48.559 --> 0:11:50.040 happens today in Alaska? 0:11:50.960 --> 0:11:51.880 I think a little bit. 0:11:52.600 --> 0:11:55.040 In the end, I think all this probably leads to is, 0:11:55.080 --> 0:11:56.360 you know, I think your prior guest is, you know, 0:11:57.040 --> 0:11:59.839 miss Baker did a great job discussing that normally, you know, 0:12:00.040 --> 0:12:03.160 these presidents and leaders only meet when there's a deal 0:12:03.240 --> 0:12:03.959 already laid out. 0:12:04.640 --> 0:12:06.000 You know, this could go any which way. 0:12:06.440 --> 0:12:09.440 Our suspect at Academy security is what we suspect will 0:12:09.480 --> 0:12:11.120 come out of this is a little bit of pushback 0:12:11.160 --> 0:12:13.079 on Putin and finally a little bit more of this 0:12:13.160 --> 0:12:15.200 stick because if you think about in the last few weeks, 0:12:15.280 --> 0:12:17.520 the President has talked a lot more about going after 0:12:17.600 --> 0:12:20.120 the sanctions again, re upping them. They've pushed on India, 0:12:20.400 --> 0:12:23.080 and they've also now find a way to get weapons 0:12:23.120 --> 0:12:25.719 to Ukraine that's palatable to this administration. Right, we sell 0:12:25.760 --> 0:12:29.040 them to europeasses them Moudt Ukraine. This administration seems fine 0:12:29.080 --> 0:12:31.000 with that. Phuda needs to feel the stick, I think 0:12:31.000 --> 0:12:32.120 to really cave on anything. 0:12:32.240 --> 0:12:35.520 I haven't seeing the new barons for tomorrow, Pierce sheer barons. 0:12:35.800 --> 0:12:37.520 Let's pretend he's on page eleven. 0:12:37.960 --> 0:12:40.440 Can you buy that Meg's seven and barons tomorrow. 0:12:40.880 --> 0:12:43.600 I'm trying to not buy that. I'm trying to buy 0:12:43.640 --> 0:12:45.920 the other things. I'm looking for, these new growth stories. 0:12:45.960 --> 0:12:48.040 I think, you know electricity, and this is one of 0:12:48.120 --> 0:12:50.040 my key things. I'm still you know, Tom, you might 0:12:50.080 --> 0:12:52.520 be iilthy of this as yourself. Well, when I think energy, 0:12:52.600 --> 0:12:54.959 I used to think oil, right, energy and oil equated. 0:12:55.040 --> 0:12:57.160 You know, It's how it's always been, can he It's 0:12:57.280 --> 0:12:59.520 energy equals electricity. You look at things like China's doing 0:12:59.559 --> 0:13:02.600 in terms of their nuclear power plants in the Saudia's 0:13:02.640 --> 0:13:05.959 on solar. I think we have a huge opportunity in 0:13:06.040 --> 0:13:08.960 the electricity space and it's going to drive a lot 0:13:09.000 --> 0:13:11.520 of production, and it's so necessary to keep the AI 0:13:11.840 --> 0:13:12.440 game afloat. 0:13:13.000 --> 0:13:17.440 Peter, in this room, when we think energy, we think uncrustables. 0:13:18.600 --> 0:13:21.280 I did hear that the other day. It's better. Thank 0:13:21.280 --> 0:13:23.719 you for listening, Peter Share. We are thrilled to have 0:13:23.800 --> 0:13:26.199 Peter Share with us this morning. Thank you so much. 0:13:26.280 --> 0:13:31.640 With academy, I'm security, Stay with us. More from Bloomberg 0:13:31.760 --> 0:13:33.679 Surveillance coming up after this. 0:13:41.040 --> 0:13:44.600 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:13:44.720 --> 0:13:47.800 weekday afternoons from seven to ten am Eastern Listen on 0:13:47.960 --> 0:13:51.559 Applecarplay and Android Auto with the Bloomberg Business app, or 0:13:51.760 --> 0:13:53.199 watch us live on YouTube. 0:13:53.320 --> 0:13:56.480 Akindi Krabo Retiker a right to the console on Foreign 0:13:56.600 --> 0:14:00.400 Relations adjunct Senior fellow. We're thrilled she could catch up 0:14:00.440 --> 0:14:03.560 with us on Trump Putin as well. Hiding within your 0:14:03.760 --> 0:14:07.640 note and I think this is the embarrassing question. Does 0:14:07.800 --> 0:14:09.440 Putin want to cease fire? 0:14:11.600 --> 0:14:14.800 I think that he absolutely does not want to cease fire. 0:14:14.840 --> 0:14:17.199 And I would say, you know, I think it's a 0:14:17.280 --> 0:14:19.560 win for Putin to actually get this meeting in the 0:14:19.640 --> 0:14:24.120 first place with President Trump in Alaska of all places. 0:14:24.600 --> 0:14:27.320 But Putin thinks he's winning the war right now and 0:14:27.440 --> 0:14:29.920 that time is on his side. So I don't think 0:14:29.960 --> 0:14:32.200 he's altered any of his demands. I don't think he's 0:14:32.280 --> 0:14:36.840 negotiating in good faith. And why would he declare that 0:14:37.000 --> 0:14:40.880 he would have that he would support a ceasefire when 0:14:41.520 --> 0:14:45.040 the only way that he will actually agree to that 0:14:45.320 --> 0:14:49.480 is on terms that neither Ukraine nor Europeans would agree to. 0:14:50.400 --> 0:14:54.960 So what is a quote unquote win for President Trump 0:14:55.080 --> 0:14:56.600 here in this meeting in Alaska? 0:14:58.240 --> 0:15:01.320 So I think a win would be I think what 0:15:01.560 --> 0:15:04.400 President Trump is looking to do is to arrange that 0:15:04.680 --> 0:15:09.120 second meeting with with Putin and with Zelenski, so that 0:15:09.320 --> 0:15:12.880 trilateral meeting, which you know President Trump has said and 0:15:13.040 --> 0:15:16.000 dangled that it could be as early as this weekend 0:15:16.040 --> 0:15:16.840 and in Alaska. 0:15:17.200 --> 0:15:18.760 But I do not think that. 0:15:19.960 --> 0:15:23.880 I do not think that that the Ukrainians have high 0:15:23.960 --> 0:15:27.880 hopes in that President Putin will actually agree to meet Zelenski. 0:15:27.880 --> 0:15:29.200 He has not done so in the past. 0:15:29.760 --> 0:15:32.800 What do we what do we know about the I 0:15:32.840 --> 0:15:36.480 don't know the discussions that President Trump president Zelensky had 0:15:36.520 --> 0:15:39.640 with European Union leaders earlier this week. Do we know 0:15:39.720 --> 0:15:41.520 what was agreed upon there at all? 0:15:42.720 --> 0:15:45.720 Well, you know, I think that the Europeans made very 0:15:45.880 --> 0:15:49.080 clear what their you know, what their position is on 0:15:50.320 --> 0:15:53.720 on on Ukraine and what Ukraine's physician is. I think 0:15:54.160 --> 0:15:58.000 that they want the justin lasting peace, and they want 0:15:58.360 --> 0:16:02.640 respect for international law and the principles of independence and sovereignty. 0:16:03.320 --> 0:16:05.600 And this is one of the big sticking points a 0:16:05.720 --> 0:16:09.440 Ukraine that can defend itself effectively. And one of the 0:16:09.600 --> 0:16:13.240 key asks of President Putin is a demilitarized Ukraine. The 0:16:13.400 --> 0:16:15.880 Ukraine has in the meantime been building up some really 0:16:16.080 --> 0:16:19.960 both indigenous military capacity that is cutting edge. 0:16:20.800 --> 0:16:23.200 It was the one of the key. 0:16:25.400 --> 0:16:30.360 Pillars of the Soviet defense industrial economy, so they actually 0:16:30.480 --> 0:16:34.440 have the expertise the capability. Having a militarized Ukraine is 0:16:34.480 --> 0:16:37.560 really foundational for Ukraine to defend itself. 0:16:37.960 --> 0:16:43.760 Explain the economic reality of the map, Heidi, which you 0:16:43.840 --> 0:16:46.680 have memorized and Paul and I can't pronounce it, but 0:16:46.880 --> 0:16:50.480 basically eastern Ukraine from the north, down to the south 0:16:51.280 --> 0:16:53.800 and down to the Black Sea and of course down 0:16:53.880 --> 0:16:58.880 below that crimea of a decade ago. What's the economic 0:16:59.000 --> 0:17:02.640 advantage of mister Putin to own that territory. 0:17:04.119 --> 0:17:08.119 Well, I mean it's it's obviously resource rich, and I 0:17:08.960 --> 0:17:14.400 I believe not only not only is it a it's 0:17:14.400 --> 0:17:18.600 a forward it's a forward base for additional expansion. I 0:17:18.720 --> 0:17:22.680 don't think that that President Putin really has in the 0:17:22.840 --> 0:17:26.080 next you know, in between now and when he leaves 0:17:26.160 --> 0:17:28.840 the position as as President of Russia, that he is 0:17:28.960 --> 0:17:32.240 going to stop the imperi the sort of expansion of 0:17:32.359 --> 0:17:35.760 how he sees imperial Russia, and so I don't I 0:17:35.800 --> 0:17:36.399 don't believe that. 0:17:36.520 --> 0:17:37.439 I think it's it would be. 0:17:37.720 --> 0:17:38.320 A win. 0:17:39.840 --> 0:17:45.280 For many reasons that are economic, rare Earth's industrial capacity, 0:17:46.359 --> 0:17:48.840 a lot of the a lot of the access to 0:17:48.880 --> 0:17:52.960 the Black Sea that comes with with with the with 0:17:53.080 --> 0:17:57.040 the control of that territory. It's really, it really was 0:17:57.119 --> 0:17:59.280 a powerhouse for the economy. I think a lot of 0:17:59.320 --> 0:18:02.560 it's been destroyedoid over the past couple of years. But 0:18:03.480 --> 0:18:06.280 in terms of what Putin wants, I think it's both 0:18:06.359 --> 0:18:08.320 power as projection and it's economic. 0:18:09.000 --> 0:18:12.399 What leverage, if any does the does President Trump have 0:18:12.720 --> 0:18:15.439 at this negotiation today? How do you think that lays out? 0:18:16.640 --> 0:18:23.560 So I think that it's it's important for President Trump 0:18:23.720 --> 0:18:26.480 to make sure that he has the backing of the 0:18:26.520 --> 0:18:29.240 Europeans and the Ukrainians. I don't know the leverage that 0:18:29.320 --> 0:18:34.640 he has both carrots and sticks. The ability to actually 0:18:35.400 --> 0:18:39.760 impose greater pain through sanctioning. For example, for example, the 0:18:40.560 --> 0:18:44.520 dark shadow fleets of oil tankers that are that are 0:18:44.560 --> 0:18:49.600 prolific in actually exporting Russian oil right now would be meaningful. 0:18:50.080 --> 0:18:52.200 So I think that there are sticks, there are also 0:18:52.359 --> 0:18:54.040 carrots that he's looking to put on the table. 0:18:54.320 --> 0:18:55.360 I thank you for the brief. 0:18:55.440 --> 0:18:59.520 Heidi Kramer, writing writing for the Writing for Foreign Affairs 0:19:00.040 --> 0:19:04.000 should say in the Council on Foreign Relations. 0:19:05.080 --> 0:19:09.119 Stay with us. More from Bloomberg Surveillance coming up after this. 0:19:16.680 --> 0:19:20.560 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:19:20.600 --> 0:19:23.880 starting at seven am Eastern on Applecarplay and Android Auto 0:19:24.040 --> 0:19:26.840 with the Bloomberg Business app. You can also watch us 0:19:26.920 --> 0:19:30.679 live every weekday on YouTube and always on the Bloomberg terminal. 0:19:30.840 --> 0:19:34.440 Jennifer Lee one of the toughest jobs on Global Wall Street. 0:19:34.520 --> 0:19:36.240 She has to put up with Ian Lincoln and Brian 0:19:36.280 --> 0:19:39.840 Belski at the same point, and she has the single 0:19:40.400 --> 0:19:43.960 best sentence in a research report of the week. 0:19:44.200 --> 0:19:49.520 Here's Jennifer Lee. I quote what now, question Mark? We wait, 0:19:50.320 --> 0:19:54.520 We watch Jennifer poetry. It's like a haiku. It's so 0:19:54.880 --> 0:19:55.600 so true. 0:19:56.280 --> 0:20:00.359 We wait and we watch. What are you watching? To 0:20:00.600 --> 0:20:04.760 unfold the mystery of the back half of twenty twenty five? 0:20:06.280 --> 0:20:08.000 Well, good morning, and thank you very much for having 0:20:08.040 --> 0:20:10.239 me on. And just quickly about the airline breakfasts. It's 0:20:10.280 --> 0:20:11.919 kind of hard to screw up yogurt. I think that's 0:20:11.960 --> 0:20:12.879 basically what I get. 0:20:12.720 --> 0:20:15.200