WEBVTT - Risks Facing Markets and Retail in 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.920 --> 0:00:16.320 This is the Bloomberg Surveillance Podcast. Catch us live weekdays 0:00:16.360 --> 0:00:19.640 at seven am Eastern on Apple car Player, Android Auto 0:00:19.760 --> 0:00:23.080 with the Bloomberg Business App. Listen on demand wherever you 0:00:23.120 --> 0:00:26.200 get your podcasts, or watch us live on YouTube. 0:00:26.280 --> 0:00:28.040 I don't know fixed income market. I feel like I 0:00:28.040 --> 0:00:31.240 can just sit around in my two year US Government 0:00:31.600 --> 0:00:34.160 Treasury bond and get four point two percent. 0:00:34.200 --> 0:00:35.839 I don't need to be here and take credit risk. 0:00:35.920 --> 0:00:36.199 I don't know. 0:00:36.280 --> 0:00:38.560 I don't some people may want to take a little 0:00:38.560 --> 0:00:40.319 bit more risk. Kathy Jones maybe one of them. She's 0:00:40.400 --> 0:00:43.479 chief fixed income strategist for Charles Swabs. She jointsu here 0:00:43.520 --> 0:00:45.040 on our Bloomberg Interactive Brokers studio. 0:00:45.400 --> 0:00:47.000 So Kathy and we sit back here. 0:00:47.680 --> 0:00:49.760 Fixed gum actually has some green on the screen and 0:00:49.800 --> 0:00:53.840 total return in twenty twenty four. You guys actually made 0:00:53.880 --> 0:00:57.440 some money this year. And fixed income I mean twenty 0:00:57.480 --> 0:01:01.600 twenty two brutal. I mean, let's be honest, what do 0:01:01.640 --> 0:01:03.279 we do in twenty twenty five, because there's a lot 0:01:03.280 --> 0:01:04.160 of unknowns out there? 0:01:04.280 --> 0:01:05.280 Kathy, Yeah, I. 0:01:05.240 --> 0:01:07.480 Would say when we were putting together our outlook this 0:01:07.560 --> 0:01:10.839 time around, you know, we try to model out various factors, 0:01:10.880 --> 0:01:12.600 and this is probably one of the hardest years of 0:01:12.640 --> 0:01:15.520 my career to model out because there's so many policies 0:01:15.560 --> 0:01:18.120 that are up in the air that is really hard 0:01:18.120 --> 0:01:20.600 to predict how it's going to come out. But our 0:01:20.640 --> 0:01:24.400 status is really that the rates have very little room 0:01:24.560 --> 0:01:27.000 to go much lower at this stage of the game. 0:01:27.120 --> 0:01:29.480 We should get a couple of more fed rate cuts, 0:01:29.520 --> 0:01:32.880 but not nearly as much as we were expecting before. 0:01:33.440 --> 0:01:35.880 And long rates are kind of well priced right here. 0:01:35.880 --> 0:01:37.920 If you look at the ten year yield, it's probably 0:01:37.959 --> 0:01:40.520 pretty close to fair value. And then you have all 0:01:40.560 --> 0:01:43.480 these uncertainties, which is the word of the year, I 0:01:43.480 --> 0:01:50.160 think around trade, tariffs, immigration, taxes, all these policies. It 0:01:50.200 --> 0:01:53.600 could affect the growth and inflation outlook. That keeps us 0:01:53.680 --> 0:01:54.440 kind of cautious. 0:01:54.840 --> 0:01:56.920 Shawn don And and Nana Wong here at Bloomberg have a 0:01:56.920 --> 0:01:59.280 great piece how kind of tapping into that uncertainty and 0:01:59.320 --> 0:02:01.280 looking at sort of how this might play out when 0:02:01.280 --> 0:02:03.360 it comes to tariffs. When it comes to trade policy, 0:02:03.520 --> 0:02:06.560 they write that the drama has started immediately, tariffs may 0:02:06.600 --> 0:02:09.600 build more gradually. What is your sense of how this 0:02:09.720 --> 0:02:11.560 rolls out? And I know, there's a lot of speculation 0:02:11.600 --> 0:02:13.960 about how inherently inflationary. A lot of this might be, 0:02:14.040 --> 0:02:16.959 how are you thinking through a again, how the policies 0:02:17.120 --> 0:02:19.400 are rolled out, if in fact they are and be 0:02:19.440 --> 0:02:21.160 what that might mean for inflation in this country. 0:02:21.720 --> 0:02:24.240 Yeah, I think there's the one basic question is is 0:02:24.280 --> 0:02:27.920 this a negotiating strategy or is this for real? So 0:02:28.000 --> 0:02:30.280 far it sounds like it's for real. It sounds like 0:02:30.360 --> 0:02:34.520 something the president believes in, and so some sort of 0:02:34.720 --> 0:02:39.440 tariff is likely to be imposed on somebody early on. 0:02:39.560 --> 0:02:42.799 We're assuming China will be first up. We may get 0:02:42.800 --> 0:02:47.079 some negotiations on Mexico, Canada, et cetera. But some level 0:02:47.400 --> 0:02:51.919 of tariff seems likely to us. So we're looking at 0:02:51.919 --> 0:02:56.280 that as a one time shot on inflation. So it 0:02:56.320 --> 0:03:00.200 doesn't necessarily build inflation over time, but it definitely we 0:03:00.240 --> 0:03:04.040 will raise the price of those imported goods. At the 0:03:04.040 --> 0:03:07.680 same time, it tends to slow economic growth, so you 0:03:07.800 --> 0:03:12.000 have this kind of dueling force that comes from tariffs. 0:03:12.000 --> 0:03:16.760 But we are assuming some inflation impact at least in 0:03:16.800 --> 0:03:18.840 the early part of the year, middle part of the year. 0:03:19.440 --> 0:03:21.640 I mean, to me, it seems like from an inflation 0:03:22.000 --> 0:03:27.160 risk situation, the actual immigration policy might be the most impactful, 0:03:27.240 --> 0:03:29.720 it seems, because I just know a couple of restaurant 0:03:29.720 --> 0:03:32.320 owners that I know in town. They're saying, for the 0:03:32.360 --> 0:03:34.840 first time in several years, they're fully employed. Their kitchen, 0:03:34.840 --> 0:03:37.160 they got everybody they need in their kitchen, their dishwashers, 0:03:37.480 --> 0:03:38.320 the bus boys and. 0:03:38.240 --> 0:03:39.000 All that kind of thing. 0:03:39.160 --> 0:03:42.600 And I don't know, you take that away, and that 0:03:42.680 --> 0:03:46.320 could be problematic because I would think that's a relatively 0:03:46.520 --> 0:03:48.880 big part of the nation's labor force at this point. 0:03:49.440 --> 0:03:50.120 How does that work? 0:03:50.280 --> 0:03:53.480 Yeah, if the proposals that have been put on the 0:03:53.480 --> 0:03:57.840 table were implemented, we'd probably lose about eight percent, up 0:03:57.920 --> 0:03:58.920 to eight percent. 0:03:58.600 --> 0:03:59.280 Of the workforce. 0:04:00.160 --> 0:04:04.080 A lot in an aging workforce, with people my age 0:04:04.080 --> 0:04:08.640 and older retiring out. And that's not an announcement, but 0:04:09.560 --> 0:04:12.640 that's going to happen. It is happening of the baby boomers, 0:04:12.680 --> 0:04:16.000 and you need workers to replace them. So far in 0:04:16.040 --> 0:04:19.440 recent years it's been immigrants who have replaced them. So 0:04:19.720 --> 0:04:23.159 you end up with this hole in the labor force 0:04:23.200 --> 0:04:25.599 and you can't grow as quickly. So on the one hand, 0:04:25.880 --> 0:04:28.280 wages would probably have to rise to attract people who 0:04:28.360 --> 0:04:31.040 aren't in the labor force. On the other hand, you 0:04:31.040 --> 0:04:33.520 can't grow as fast because you don't have the workforce 0:04:33.880 --> 0:04:38.200 to produce goods and services to grow faster. So it is, 0:04:38.360 --> 0:04:41.400 I would agree. Longer term, it is a bigger issue, 0:04:41.440 --> 0:04:42.680 probably than tariffs. 0:04:43.000 --> 0:04:45.480 We're all dealing with this uncertainty. You're doing it in 0:04:45.520 --> 0:04:48.279 your outlook, and certainly Fed church Rown Powell is doing 0:04:48.279 --> 0:04:50.560 it too, even if he's so studiously shied away from 0:04:50.600 --> 0:04:52.680 talking about it at the last FED meeting. He's got 0:04:52.880 --> 0:04:56.400 another event this week, moderated sit down on Wednesday, and 0:04:56.440 --> 0:04:59.280 then we're looking ahead to the next FED meeting after that. 0:04:59.360 --> 0:05:01.479 Does he have to address this more? The way that 0:05:01.560 --> 0:05:05.520 he and his colleagues are thinking through all of the uncertainty. 0:05:05.800 --> 0:05:07.680 We're going to get that summary of economic projections at 0:05:07.680 --> 0:05:10.880 the next meeting, how do they factor in all that 0:05:10.960 --> 0:05:12.640 we don't know of what might happen here in the 0:05:12.680 --> 0:05:13.200 months ahead. 0:05:13.520 --> 0:05:16.520 Well, I do think the dot plot and the rest 0:05:16.520 --> 0:05:18.440 of the Summary of Economic protection is going to be 0:05:18.440 --> 0:05:22.279 really interesting this time around, and certainly will change because 0:05:22.360 --> 0:05:24.520 if you think back to September, it was an entirely 0:05:24.600 --> 0:05:30.240 different kind of economic outlook and political outlook, policy outlook. 0:05:30.320 --> 0:05:32.680 So I think it will change I think they're probably 0:05:32.720 --> 0:05:35.520 busily trying to model out some of these things themselves 0:05:35.600 --> 0:05:39.200 and figure out what that means. But I doubt that 0:05:39.279 --> 0:05:41.760 he will talk about that at this stage of the game. 0:05:41.800 --> 0:05:44.720 We'll find out about that later. But my assumption is 0:05:44.760 --> 0:05:47.159 they're going to be much more cautious about rate cuts 0:05:47.200 --> 0:05:49.840 than they had been before because A the economy has 0:05:49.880 --> 0:05:53.159 been more resilient than we thought in September, and B 0:05:53.560 --> 0:05:55.520 we have all these uncertainties on the horizon. 0:05:56.240 --> 0:05:58.839 You're to date twenty twenty four the best performance in 0:05:58.880 --> 0:06:02.719 your world fixed income, US corporate high yield, and US 0:06:02.800 --> 0:06:05.600 leverage loan index. That surprises me a little bit because 0:06:05.640 --> 0:06:08.080 I know there's concerns throughout the year of maybe recession, 0:06:08.720 --> 0:06:10.440 yet the risk your parts of the market were just 0:06:10.600 --> 0:06:11.320 really performing. 0:06:11.720 --> 0:06:14.520 Yeah, so well, we did have a more resilient economy, 0:06:14.600 --> 0:06:18.320 so that helped. And it's the power of the coupon. 0:06:18.880 --> 0:06:21.600 So if you have a coupon of six seven eight percent, 0:06:22.880 --> 0:06:25.920 and even if things sort of hold steady, you're going 0:06:25.960 --> 0:06:28.480 to perform pretty well. And I think this year, when 0:06:28.520 --> 0:06:31.360 you look at the total return of various asset classes, 0:06:31.360 --> 0:06:32.960 a lot of them are in line with the coupon 0:06:33.200 --> 0:06:35.359 the average coupon of the year, and that's kind of 0:06:35.360 --> 0:06:36.280 what we're looking at. 0:06:36.800 --> 0:06:39.279 Can I ask you lastly just about the strength of 0:06:39.279 --> 0:06:41.200 the dollar going forward and what you're thinking about when 0:06:41.200 --> 0:06:43.480 it comes to four x and currency. And we had 0:06:43.480 --> 0:06:46.680 this kind of another announcement over the weekend from the 0:06:46.720 --> 0:06:49.440 President elect about bricks countries trying to rival a dollar. 0:06:49.520 --> 0:06:50.960 Kind of wonder where that came from. I'm sure we'll 0:06:50.960 --> 0:06:53.400 talk about that more when Davian Sasa was here in 0:06:53.440 --> 0:06:55.880 a bit. But what's your sense of sort of what 0:06:56.000 --> 0:06:59.320 dollar strength looks like if these policies, if immigration and tariffs, 0:07:00.240 --> 0:07:01.720 if those policies are put in to effect, what does 0:07:01.760 --> 0:07:02.760 that mean for the US dollar. 0:07:03.160 --> 0:07:05.680 It means it stays strong and goes higher. It'd be 0:07:05.880 --> 0:07:08.760 very difficult for the dollar to push the dollar down 0:07:08.920 --> 0:07:10.640 at this stage of the game. If you have those 0:07:10.680 --> 0:07:13.520 sorts of policies in place and you know the dollar 0:07:13.680 --> 0:07:15.760 is near if you look, I would use the Bloomberg 0:07:16.160 --> 0:07:19.680 Dollar Index. I prefer to the DXY myself because it's 0:07:19.720 --> 0:07:23.400 more broad based. It's nearly out of fifteen year high. 0:07:23.400 --> 0:07:26.200 We're almost back to those spike highs in twenty twenty two, 0:07:27.080 --> 0:07:30.000 and that's driven largely by the outperformance of the economy 0:07:30.040 --> 0:07:31.920 and the wide interest rate differentials. 0:07:32.040 --> 0:07:33.200 I doubt those. 0:07:33.000 --> 0:07:37.200 Things will change in twenty twenty five, and actually tariffs 0:07:37.240 --> 0:07:39.680 will only give it another boost to the upside. 0:07:39.920 --> 0:07:41.680 Kathy, thank you so much for joining us, as always 0:07:41.680 --> 0:07:46.440 appreciated Kathy Jones. She's chief fixed income strategist for Charles Schwab. 0:07:46.800 --> 0:07:49.520 The fixed income folks actually making some money at this year. 0:07:49.680 --> 0:07:50.080 Love that. 0:07:57.240 --> 0:08:01.119 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:08:01.200 --> 0:08:04.520 weekday afternoons from seven to ten am. Easter Listen on 0:08:04.560 --> 0:08:07.520 Apple car Play and androyd Otto with a Bloomberg Business 0:08:07.520 --> 0:08:09.600 app or wants Us Live on YouTube. 0:08:10.080 --> 0:08:14.280 The appointments from President Electrump continue to come fast and furious. 0:08:14.520 --> 0:08:18.560 Cash Bettel FBI director appoint e is probably one of 0:08:18.560 --> 0:08:21.000 the latest show of the weekend. Henrietta Tres joined to 0:08:21.040 --> 0:08:24.480 She's a manager partner of Vada Partners. Henriette again kind 0:08:24.520 --> 0:08:28.760 of putting some of these appointments selections in context. What 0:08:28.880 --> 0:08:31.880 is President Electrump trying to do here with his cabinet? 0:08:31.880 --> 0:08:33.520 What is his strategy do you think at this point? 0:08:34.800 --> 0:08:36.800 I think it's definitely signaling that he wants to hit 0:08:36.840 --> 0:08:38.719 the ground running as soon as he gets sworn. 0:08:38.480 --> 0:08:40.000 Into office January twentieth. 0:08:40.480 --> 0:08:43.079 The most important things to me are the nomination of 0:08:43.160 --> 0:08:46.679 Kevin Hassett and Jameson Greer. Those are the names that 0:08:46.720 --> 0:08:49.400 were floaded last week for USTR, which is going to 0:08:49.400 --> 0:08:52.160 be most critical for putting the tarifs into place. We 0:08:52.200 --> 0:08:54.160 know we have the Treasury Secretary into play. Some of 0:08:54.160 --> 0:08:57.040 these other names, whether it's Rka Junior or Matt Gates, 0:08:57.040 --> 0:08:59.400 and those guys are sort of fallen by the wayside, 0:09:00.160 --> 0:09:02.480 will be contentious as they go through, as I imagine 0:09:02.520 --> 0:09:05.320 Cash Battel will be as well. But I would say 0:09:05.400 --> 0:09:07.800 keep our eyes on the prize, focus on USTR, and 0:09:08.200 --> 0:09:12.680 see also that they're potentially telegraphing to businesses to prepare 0:09:12.720 --> 0:09:15.480 for these tariffs in advance as opposed to waiting for 0:09:15.600 --> 0:09:19.000 January twentieth and an implementation date of additional tariffs. That's 0:09:19.160 --> 0:09:20.880 maybe the biggest thing for me right now, with the 0:09:20.920 --> 0:09:22.240 early naming of these nominees. 0:09:22.360 --> 0:09:23.960 Let's take each of those in kind. Let's start with 0:09:24.040 --> 0:09:26.680 Kevin Hassett. He was in the first Trump administration. He 0:09:26.720 --> 0:09:28.720 came up with this thing called the Hassett principle. When 0:09:28.720 --> 0:09:31.600 it came to tariffs, sort of focusing on where those 0:09:31.600 --> 0:09:33.880 tariffs might be applied, who might be exempt from them. 0:09:34.520 --> 0:09:37.400 How does his work change if he's now a part 0:09:37.400 --> 0:09:39.559 of this next administration. I mean, I look at just 0:09:39.640 --> 0:09:42.719 through the panoply of people that the President elect has 0:09:42.720 --> 0:09:44.680 picked to be on his economic team, and we've seen 0:09:44.760 --> 0:09:48.040 kind of the fighting or early on before they were 0:09:48.080 --> 0:09:50.040 even named, and one wonders if that's going to move 0:09:50.040 --> 0:09:52.679 over into the cabinet room as well. But sticking with 0:09:52.760 --> 0:09:55.880 Kevin Hassett, what role does he play in shaping the 0:09:55.920 --> 0:09:59.000 direction of Donald Trump's economic policy in this next term. 0:10:00.000 --> 0:10:01.760 Important thing to me right now is that he has 0:10:01.800 --> 0:10:05.680 a relationship with lawmakers on Capitol Hill that exceeds that 0:10:05.920 --> 0:10:09.200 of Scott Bessont or Howard Lutnick. And I think when 0:10:09.520 --> 0:10:12.240 I am worried about next year is obviously the tax 0:10:12.280 --> 0:10:14.960 bill and then the tariffs that are part of that. 0:10:15.760 --> 0:10:17.560 In that Donald Trump has said the tires will pay 0:10:17.600 --> 0:10:19.640 for the four point six trillion dollar extension of the 0:10:19.679 --> 0:10:20.760 existing tax rates. 0:10:20.840 --> 0:10:23.680 So when Bessett, excuse me, when. 0:10:23.559 --> 0:10:25.920 Hassett is up on the hill trying to talk with 0:10:26.320 --> 0:10:28.959 staff and get this tax bill written, one of the 0:10:29.000 --> 0:10:31.120 key components that he's going to be involved in is 0:10:31.160 --> 0:10:34.600 getting them to agree to include tariffs in the tax bill. 0:10:34.880 --> 0:10:36.920 That's a very big deal. That's the only way to 0:10:37.040 --> 0:10:40.800 score it, so that tax legislation can be physically offset 0:10:40.840 --> 0:10:43.400 in the same piece of legislation by the tariffs. 0:10:43.720 --> 0:10:45.360 So I think Hassett will pay. 0:10:45.480 --> 0:10:51.080 Play a really important role there as well as USTR Henrietta. 0:10:51.120 --> 0:10:54.400 What's the role of the United States Senate here in 0:10:54.480 --> 0:10:57.160 confirming some of these nominations, look at some of the 0:10:57.160 --> 0:11:00.440 more contentious ones that may become down. 0:11:01.320 --> 0:11:04.719 You know, they're pretty much already trying to compel the 0:11:04.760 --> 0:11:09.360 Trump administration to give them names that can get through 0:11:09.440 --> 0:11:12.120 and get through quickly. We know that historically you get 0:11:12.160 --> 0:11:15.200 through you know, the Secretary of State, Defense and Treasury 0:11:15.240 --> 0:11:17.640 pretty quickly, you know, just days after the president is 0:11:17.640 --> 0:11:21.440 sworn in. So they're trying to, you know, sort out 0:11:21.559 --> 0:11:23.880 the week from the chaff as early as possible so 0:11:23.920 --> 0:11:25.600 they can keep their eyes on the prize, get started 0:11:25.600 --> 0:11:28.959 on the president's agenda as soon as he gets sworn 0:11:28.960 --> 0:11:31.320 into office. So I think a lot of their back 0:11:31.440 --> 0:11:33.560 room discussion is trying to say, look, thank you for 0:11:33.600 --> 0:11:35.920 giving us these names. Some of these guys cannot get through. 0:11:36.120 --> 0:11:39.000 I think it's underappreciated how slim the Republican margin is 0:11:39.080 --> 0:11:41.360 going into next year. We have a number of Senators 0:11:41.360 --> 0:11:44.119 who are going to be up for reelection or potentially retiring, 0:11:44.520 --> 0:11:47.319 or have come in as freshmen who will be willing 0:11:47.360 --> 0:11:49.319 to challenge the president on these nominations. 0:11:49.320 --> 0:11:50.239 As we've already. 0:11:49.960 --> 0:11:52.400 Seen, we're back playing this game of trying to keep 0:11:52.440 --> 0:11:54.640 track of all of the social media posts from the 0:11:54.640 --> 0:11:56.680 President elect, and one of them from a few weeks 0:11:56.720 --> 0:12:00.520 back had to do with recess appointments and him urging 0:12:00.600 --> 0:12:03.800 senators to allow for them to happen, presumably because that 0:12:04.120 --> 0:12:05.839 would forestall have to go through a lot of the 0:12:05.880 --> 0:12:09.319 confirmation process where perhaps some controversial material might come out 0:12:09.360 --> 0:12:12.040 and things could get gummed up. Where does that stand? 0:12:12.080 --> 0:12:14.400 How resonant was that message from the President elect with 0:12:14.720 --> 0:12:16.160 Republican members of the US Senate. 0:12:16.920 --> 0:12:19.080 The United States senators do not like to be told 0:12:19.080 --> 0:12:21.439 what to do. I can tell you that firsthand, have 0:12:21.600 --> 0:12:24.600 you work there. I think a lot of the enthusiasm 0:12:24.640 --> 0:12:27.360 for the recess appointment idea came from House members who 0:12:27.360 --> 0:12:30.840 are much closely tethered to President Electrump. So you saw 0:12:30.840 --> 0:12:34.160 a lot of support for the idea from House Republicans 0:12:34.160 --> 0:12:38.360 in Trump's orbit, but major pushback from the Senate. They 0:12:38.360 --> 0:12:42.040 don't go on recess specifically for this reason, that and 0:12:42.120 --> 0:12:45.280 the Pocket veto. So I do not expect the Senate 0:12:45.280 --> 0:12:47.520 to voluntarily step aside. And I think even if the 0:12:47.520 --> 0:12:50.160 President tried to force the issue, which is allowable under 0:12:50.480 --> 0:12:53.400 obscure clauses of the Constitution, the House and Senate would 0:12:53.880 --> 0:12:55.679 collaborate to make sure that didn't occur. 0:12:56.320 --> 0:12:59.360 Henrietta, what's the concern, if any, in Washington about some. 0:12:59.320 --> 0:13:02.880 Of the the experience levels for some of these appointments. 0:13:02.920 --> 0:13:06.880 Some people are questioning whether they are appropriately experienced to 0:13:06.960 --> 0:13:10.080 run some of these larger institutions in Washington? 0:13:10.160 --> 0:13:12.800 What's that? Is there a feeling of developing in DC? 0:13:13.960 --> 0:13:17.400 You know, what I hear is a lot of adjucta 0:13:17.640 --> 0:13:21.160 from you know, the Defense departments for example, about some 0:13:21.240 --> 0:13:24.920 of these incoming appointees who have real access to GRIND 0:13:24.960 --> 0:13:27.600 and want to get rid of Navy admirals for example, 0:13:28.000 --> 0:13:31.480 or you know, get rid of major prosecutors at the FBI. 0:13:32.000 --> 0:13:36.199 That conversation, that narrative is obviously very real. I think 0:13:36.240 --> 0:13:39.960 you saw it with the President Biden's decision to pardon 0:13:40.080 --> 0:13:40.760 Hunter Biden. 0:13:40.840 --> 0:13:42.800 You know they're taking this very very seriously. 0:13:42.800 --> 0:13:45.160 The names that Trump is putting out there are the 0:13:45.240 --> 0:13:48.960 names of folks who have advocated mostly on Fox News 0:13:49.000 --> 0:13:52.200 for years now for really aggressive change at the admiral 0:13:52.280 --> 0:13:56.160 level in military ranks, you know, getting rid of any 0:13:56.200 --> 0:14:00.360 of these seasoned army generals who maybe we're too quote 0:14:00.440 --> 0:14:01.640 unquote woke for. 0:14:01.720 --> 0:14:04.040 The Trump administration and the people that they're about to announce. 0:14:04.080 --> 0:14:08.880 So there's a lot of consternation within those specific military groups. 0:14:09.040 --> 0:14:11.280 And I think that's probably the most noticeable thing I've 0:14:11.320 --> 0:14:13.440 picked up in the last couple of weeks. 0:14:13.920 --> 0:14:16.000 You mentioned a few minutes ago Jamison Greer, who was 0:14:16.200 --> 0:14:18.880 a Bob Litthheiser acolyte. He was the chief of staff 0:14:18.880 --> 0:14:21.120 to the US Trade Representative during the first Trump term. 0:14:21.160 --> 0:14:23.320 He's now being appointed or nominated to be the next 0:14:23.440 --> 0:14:27.720 US trade representative. It makes me want to ask you 0:14:27.760 --> 0:14:30.600 about Bob Leittheiser, somebody whose name has been bandied about 0:14:30.600 --> 0:14:32.800 a lot but does not yet have an appointment or 0:14:32.840 --> 0:14:36.120 a nomination in this administration. What do you make of that? 0:14:36.360 --> 0:14:37.960 And I know he was sort of seen as somebody 0:14:38.000 --> 0:14:40.600 who might be a Commerce secretary. Obviously, Howard Lutnik is 0:14:40.640 --> 0:14:43.160 the person who got the nod for that job. In 0:14:43.200 --> 0:14:46.040 this next term, where does he land and what does 0:14:46.080 --> 0:14:48.000 it say to you that he hasn't gotten the spot yet. 0:14:48.880 --> 0:14:51.200 Well, I think there's a lot of conflicting factors here 0:14:51.200 --> 0:14:52.640 and a lot of this is sort of palace injury. 0:14:52.640 --> 0:14:55.200 But Bob Liteheiser was the architect of the Section three 0:14:55.280 --> 0:14:58.200 oh one tariffs against China. He is the one who 0:14:58.760 --> 0:15:01.400 delivered the Phase one trade agreement in February of twenty 0:15:01.440 --> 0:15:04.760 twenty that got the US and China to sort of 0:15:04.760 --> 0:15:09.480 temporarily pause the escalation of the trade war, have China 0:15:09.560 --> 0:15:12.480 commit to buying eighty billion dollars a year over the 0:15:12.520 --> 0:15:16.000 next two years of additional agriculture purchases. And ultimately China 0:15:16.040 --> 0:15:18.000 did not deliver on that. And so one of the 0:15:18.000 --> 0:15:21.200 big differences, and we're seeing it picked up in reporting 0:15:21.280 --> 0:15:24.080 right now, is that Lightheiser was going to go buy 0:15:24.120 --> 0:15:27.120 the book and use the enforcement mechanism in the Phase 0:15:27.160 --> 0:15:30.040 one trade agreement, which would have put tarriffs on in 0:15:30.080 --> 0:15:33.600 the late April May June time horizon, giving businesses a 0:15:33.640 --> 0:15:38.200 period of time to pull forward their purchases, get products 0:15:38.240 --> 0:15:42.040 over from China and get them into the US system, 0:15:42.040 --> 0:15:44.520 and advance of these tariffs going into effect. The fact 0:15:44.560 --> 0:15:47.280 that Bob Lightheiser is not going to be there, in 0:15:47.320 --> 0:15:49.960 which I guess, is where we are right now. I'm 0:15:50.000 --> 0:15:52.520 still sort of quasi optimistic that there might be a 0:15:52.520 --> 0:15:54.800 trades our role, but the fact that he's not there 0:15:54.840 --> 0:15:59.520 suggests to me that maybe Trump thinks that between Lutnik 0:15:59.720 --> 0:16:03.800 and in Jameson Greer and Kevin Hassett, they can sort 0:16:03.800 --> 0:16:07.320 of disregard that Phase one trade agreement imporcement mechanism and 0:16:07.360 --> 0:16:09.880 go right into tariff's. I think that's probably our main 0:16:09.920 --> 0:16:12.400 takeaway this morning that I'll be talking about with clients. 0:16:12.440 --> 0:16:13.480 I don't know why there's. 0:16:13.560 --> 0:16:17.160 An expectation that these tariffs aren't serious, or to the 0:16:17.200 --> 0:16:20.280 alternative narrative that the market's responding to other factors right now, 0:16:20.320 --> 0:16:23.800 but in general, I'm concerned and growing increasingly concerned that 0:16:23.840 --> 0:16:26.160 we won't have somebody who's buy the books like Leithheiser. 0:16:26.280 --> 0:16:29.440 Next year. We'll have folks who are much more eager 0:16:29.520 --> 0:16:32.440 to even get more aggressive than he was in his 0:16:32.480 --> 0:16:34.680 first term, which will put tariffs on earlier. 0:16:36.480 --> 0:16:40.840 Henrietta, just briefly here, what's between now and inauguration day? 0:16:41.000 --> 0:16:42.560 What do we have to look forward to again coming 0:16:42.600 --> 0:16:47.479 out of this Trump administration and waiting The most. 0:16:47.200 --> 0:16:49.800 Important thing is what's happening in the Senate and House 0:16:49.840 --> 0:16:52.560 budget committees. We're going to get a big deficit number 0:16:52.640 --> 0:16:55.400 for their authorization and the reconciliation bill that will tell 0:16:55.480 --> 0:16:56.880 us how big the tax bill is going to be 0:16:56.960 --> 0:16:59.920 next year. That number could come out as early as 0:17:00.040 --> 0:17:03.920 the next couple weeks. The Trump administration is going to 0:17:03.920 --> 0:17:06.280 do its own thing on executive orders and immigration and 0:17:06.320 --> 0:17:08.760 tariffs and all that, But the real meat for the 0:17:08.800 --> 0:17:11.720 investment community is going to come out of the budget committees, 0:17:11.960 --> 0:17:14.480 which is lucky but true, and we should know that 0:17:14.520 --> 0:17:15.320 in the next couple weeks. 0:17:15.320 --> 0:17:17.080 That deficit number is really all I'm waiting for. 0:17:17.520 --> 0:17:19.640 Henrietta, Thank you so much for joining us. Always get 0:17:19.640 --> 0:17:21.159 a little bit smarter when chatting with you. 0:17:21.240 --> 0:17:24.520 Henrietta Triz, Managing partner at Veda Partners, Getting the latest 0:17:24.920 --> 0:17:26.840 coming out of Washington, DC room. 0:17:26.960 --> 0:17:31.200 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:17:31.320 --> 0:17:34.520 starting at seven am Eastern on applecar Play and Android 0:17:34.520 --> 0:17:37.399 Auto with the Bloomberg Business app. You can also listen 0:17:37.520 --> 0:17:40.600 live on Amazon Alexa from our flagship New York station. 0:17:41.000 --> 0:17:43.760 Just say Alexa play Bloomberg eleven thirty. 0:17:43.840 --> 0:17:49.480 Apparently influencers on the Internet have important impacts on what 0:17:49.560 --> 0:17:53.600 people bought. I didn't really know that it recent, Lisa. 0:17:53.760 --> 0:17:56.840 That's the thing out there, as opposed to a thirty 0:17:56.880 --> 0:17:59.400 second in on television or a billboard by the side 0:17:59.400 --> 0:18:01.760 of the road or add in your magazine. 0:18:01.880 --> 0:18:02.760 That's not how it's done. 0:18:02.760 --> 0:18:03.520 The future is here. 0:18:03.720 --> 0:18:04.520 The future is here. 0:18:04.560 --> 0:18:07.440 So that goes to the issue of what's quality information 0:18:07.520 --> 0:18:09.119 out there in the world on the web and what 0:18:09.200 --> 0:18:12.000 is disinformation. Our next guest thinks about this stuff. Lisa Kaplan, 0:18:12.400 --> 0:18:15.840 CEO of a Lithium, and she joins us here in 0:18:15.840 --> 0:18:18.800 a Bloomberg Interactive broker studio. Talk to us about Alithia. 0:18:18.800 --> 0:18:20.560 What do you guys do, who are your clients? 0:18:20.640 --> 0:18:22.199 What's the work that you guys do. 0:18:22.720 --> 0:18:25.600 Thanks so much for having me, Lisa Caplan, Founder and 0:18:25.640 --> 0:18:29.000 CEO of Alethia. We are a technology company that detects 0:18:29.000 --> 0:18:32.960 and mitigates instances of online risk stemming from everything from 0:18:33.000 --> 0:18:37.679 misinformation and disinformation. So thank foreign state adversaries to also 0:18:38.000 --> 0:18:40.840 looking at where are there risks of things like boycott, 0:18:40.960 --> 0:18:45.359 short seller attacks, other risks that can be developed online 0:18:45.600 --> 0:18:49.879 that pose serious business continuity challenges. We predominantly work with 0:18:49.880 --> 0:18:52.280 the Fortune one thousand to be able to help them 0:18:52.359 --> 0:18:55.320 understand how is it that they are being talked about, 0:18:55.400 --> 0:18:57.679 where are these risks emerging, and what is it they 0:18:57.680 --> 0:18:59.880 can actually do to get out in front of these 0:19:00.040 --> 0:19:01.520 different types of challenges. 0:19:02.040 --> 0:19:04.320 Talk a bit more about the kind of disinformation that 0:19:04.359 --> 0:19:05.919 we're seeing. We talk about it a lot in the 0:19:05.920 --> 0:19:08.679 context of the news and journalisms of what people are 0:19:08.680 --> 0:19:10.680 exposed to when it comes to current events. So here 0:19:10.680 --> 0:19:14.120 in this kind of corporate setting or with retail, who's 0:19:14.160 --> 0:19:17.080 perpetrating it, What does it look like? How widespread an 0:19:17.119 --> 0:19:18.840 issue is this for some of the companies with whom 0:19:18.880 --> 0:19:19.200 you work. 0:19:19.520 --> 0:19:21.960 When we talk about miss and disinformation, what we're really 0:19:22.000 --> 0:19:25.959