WEBVTT - Bloomberg Surveillance TV: October 13th, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordern. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.239 Terminal and the Bloomberg Business app. Stocks bouncing back as 0:00:37.240 --> 0:00:40.479 President Donald Trump temper's his trade stance on China. Seema 0:00:40.479 --> 0:00:43.240 Shah of Principal Asset Management Rights in the following Even 0:00:43.280 --> 0:00:45.600 after the strong performance of the past six months with 0:00:45.640 --> 0:00:48.479 the S and P five hundred thirty five percent from 0:00:48.520 --> 0:00:52.560 its liberation day trough, equity markets have further room to run. 0:00:52.800 --> 0:00:55.680 Seema joins us now for more. Sema, welcome to the program. 0:00:55.720 --> 0:00:58.240 Will you get a helping hand from earning season and 0:00:58.280 --> 0:00:59.880 from bank earnings this week? 0:01:01.360 --> 0:01:03.920 Hey John, Yeah, I think that that is definitely on 0:01:03.920 --> 0:01:05.480 the cards. You know, when we're looking across at the 0:01:05.520 --> 0:01:08.600 macro outlook, we're still feeling pretty positive. Of course, there 0:01:08.600 --> 0:01:10.720 are some signs that slow down within the labor market, 0:01:10.720 --> 0:01:14.200 but we're not talking about recessionary area, and typically in 0:01:14.200 --> 0:01:17.920 this kind of environment we can see continued performance from financials. 0:01:18.680 --> 0:01:21.280 So along with those tech stocks which continue to drive 0:01:21.280 --> 0:01:24.200 the market, we would think that financials can join in 0:01:24.200 --> 0:01:26.560 with that rally and help push the act market a 0:01:26.560 --> 0:01:27.160 little bit further. 0:01:27.319 --> 0:01:29.360 The same it's not just bank earnings on the calendar, 0:01:29.400 --> 0:01:32.240 also a meeting potentially between the two leaders from China 0:01:32.480 --> 0:01:36.440 from the US President Trump and leadership. How big a 0:01:36.520 --> 0:01:39.560 factor will there be in your routelook the trade negotiations, 0:01:39.560 --> 0:01:42.600 the friction, the tension between China and the United States. 0:01:43.959 --> 0:01:45.680 Yeah, it's a great question because you know, in the 0:01:45.720 --> 0:01:48.560 last couple of weeks, it's completely fadden out of the headlines. 0:01:48.560 --> 0:01:51.440 You know, nobody really talking about the risk associated with it. 0:01:51.480 --> 0:01:53.320 So the news on Friday, I think did come as 0:01:53.320 --> 0:01:55.120 a clearly did job the market. 0:01:56.080 --> 0:01:59.040 It has the potential to have very very serious. 0:01:59.400 --> 0:02:01.760 Impact on the economy, both from a growth side and 0:02:01.800 --> 0:02:04.120 from an inflation side, so we obviously have to keep 0:02:04.120 --> 0:02:06.760 a close eye on that at the moment. From our perspective, 0:02:06.920 --> 0:02:10.720 we're going to go along the assumption that things eventually 0:02:10.840 --> 0:02:13.880 kind of work themselves out simply because the risk is 0:02:13.919 --> 0:02:17.240 so big, but it does clearly have the potential and 0:02:17.280 --> 0:02:19.600 so investors and I think the key thing is that 0:02:19.600 --> 0:02:22.680 there has been so much complacency within the market about 0:02:22.680 --> 0:02:26.080 what could happen to have much further the equity market 0:02:26.080 --> 0:02:29.520 could run that this has been a good reminder that 0:02:29.520 --> 0:02:31.320 there are still risks on the horizon. 0:02:31.480 --> 0:02:34.239 Risks of re escalation between the US and China. 0:02:34.400 --> 0:02:36.840 How much does it also reiterate the risk. 0:02:36.760 --> 0:02:38.880 That this is now just a one time price shock, 0:02:39.160 --> 0:02:42.400 but it's an ongoing process of terroriffs that come on 0:02:42.560 --> 0:02:45.840 in different waves and price effects that happen over time, 0:02:45.919 --> 0:02:48.359 kind of like what we saw from Levi's last week. 0:02:49.760 --> 0:02:51.560 Yeah, and you know, at least I mean, I think 0:02:51.560 --> 0:02:53.520 this is one of the things that we've been considering 0:02:53.600 --> 0:02:57.000 is that from the tariff perspective, this is an ongoing story. 0:02:57.040 --> 0:02:59.080 We know that tariffs are going to be used continuously 0:02:59.120 --> 0:03:02.280 as a geopolitical time and for any other kind of 0:03:02.320 --> 0:03:05.120 negotiations that the US is looking to do. We're also 0:03:05.200 --> 0:03:09.200 expecting even before Friday that tariffs would continue to move 0:03:09.240 --> 0:03:12.520 a little bit higher. They change in focus sectors, more 0:03:12.600 --> 0:03:14.919 company focus. So I think this is still in built, 0:03:15.080 --> 0:03:16.880 but we have seen time and time again that from 0:03:16.880 --> 0:03:20.160 a market perspective, these kind of headlines, they do start 0:03:20.200 --> 0:03:23.240 to move back and back and back in people's mindsets, 0:03:23.360 --> 0:03:26.799 especially as companies do start to kind of navigate their 0:03:26.800 --> 0:03:27.320 way through. 0:03:27.639 --> 0:03:29.720 So it's not to say that there won't be any impact. 0:03:29.800 --> 0:03:30.320 There will be. 0:03:30.480 --> 0:03:33.520 It is contributing to an economic slowdown, but we're not 0:03:33.600 --> 0:03:38.040 looking at something which is recession, like provided the US 0:03:38.160 --> 0:03:40.480 China negotiations do move in the right direction over the 0:03:40.480 --> 0:03:41.040 coming weeks. 0:03:41.120 --> 0:03:43.040 So if there isn't really that gread of a chance 0:03:43.080 --> 0:03:45.400 of recession, which is what I'm hearing from you, do 0:03:45.480 --> 0:03:48.120 you buy any dip or was always have on Friday 0:03:48.440 --> 0:03:52.160 something that you want to welcome usher in and dive into. 0:03:54.040 --> 0:03:55.840 I do think, and I think any kind of noise, 0:03:55.920 --> 0:03:58.320 either with regards to their shutdown or even with the 0:03:58.840 --> 0:04:01.720 trade engines, these are opportunities because we're trying to look 0:04:01.760 --> 0:04:03.320 beyond the noise. And you know this has been a 0:04:03.320 --> 0:04:06.280 really good learning for this year is back in April 0:04:06.360 --> 0:04:09.520 when everyone was really worried about recession. They're worried about 0:04:09.520 --> 0:04:11.600 how there was going to be a very significant market correction. 0:04:11.960 --> 0:04:14.680 We are very very significantly from those moments and the 0:04:14.680 --> 0:04:17.560 market has matched to look through, so we would assume 0:04:17.640 --> 0:04:20.960 that this is going to be a continuation. Evaluations are 0:04:20.960 --> 0:04:24.760 that much higher. The economic BACKDOB is a little bit slower, 0:04:25.200 --> 0:04:27.000 so you know, we're not going to be expecting to 0:04:27.000 --> 0:04:29.640 see gains as significant as we've had in the last 0:04:29.680 --> 0:04:31.839 couple of months. But to our mind, this is still 0:04:31.839 --> 0:04:33.440 a positive setup for equities. 0:04:34.040 --> 0:04:36.160 The issue though, with what's going on with trade is 0:04:36.200 --> 0:04:39.400 that JD. Vance is talking about the fact that it's 0:04:39.600 --> 0:04:43.120 up to Beijing to choose the path of reason. Does 0:04:43.120 --> 0:04:45.520 it not feel different this time than it did in 0:04:45.560 --> 0:04:46.080 the spring? 0:04:47.760 --> 0:04:49.920 There are definitely differences, and I think the key thing 0:04:50.000 --> 0:04:52.120 is that, you know, China is showing that it has 0:04:52.320 --> 0:04:54.440 a lot of power in this. You know, it's got 0:04:54.440 --> 0:04:58.600 a very very strong negotiating tool. So it's very much 0:04:58.640 --> 0:05:00.960 sitting in I guess, in the area and you know, 0:05:00.960 --> 0:05:02.640 what is the US going to do to to kind 0:05:02.640 --> 0:05:05.120 of bring down the tensions. So there is a difference, 0:05:05.400 --> 0:05:06.800 But I think at the end of the day, because 0:05:06.839 --> 0:05:10.159 the impact could be so serious, it's almost that too 0:05:10.200 --> 0:05:13.880 big to fail situation, which we would assume is is 0:05:13.880 --> 0:05:17.840 going to push both sides to some kind of negotiation point. 0:05:17.960 --> 0:05:19.359 You know, it doesn't necessarily mean that we're going to 0:05:19.360 --> 0:05:21.159 be looking at lower tasks. We could be even looking 0:05:21.160 --> 0:05:23.440 at slightly higher tasks and where they are today, but 0:05:23.520 --> 0:05:25.720 we wouldn't expect there to be a move back to 0:05:25.760 --> 0:05:27.520 the one hundred, one hundred and thirty five percent tasks that 0:05:27.560 --> 0:05:28.640 we did see earlier this year. 0:05:28.760 --> 0:05:30.760 Do you think this just gets done by November first, 0:05:30.800 --> 0:05:33.120 where the President said that seems like an eternity for him, 0:05:33.279 --> 0:05:36.240 or is this a twenty twenty sixth story for the market. 0:05:37.240 --> 0:05:39.320 I think we can get somewhere by November the first, 0:05:39.360 --> 0:05:40.400 and I have to say, I think it's going to 0:05:40.400 --> 0:05:41.960 be very very rocky road with a lot. 0:05:41.800 --> 0:05:43.560 Of noise, a lot of back and forth. 0:05:44.360 --> 0:05:46.920 But certainly I think that the issues with China is 0:05:46.960 --> 0:05:49.159 not something which can be put to bed very quickly. 0:05:49.440 --> 0:05:50.960 I would assume that this is going to be a 0:05:51.000 --> 0:05:53.039 situation that we're going to be talking about through twenty 0:05:53.040 --> 0:05:56.320 twenty six through twenty twenty seven, and that rivalry between 0:05:56.360 --> 0:05:58.320 the two countries is going to be something which is 0:05:58.360 --> 0:06:02.000 a continued pain point which comes back to rock the market. 0:06:02.000 --> 0:06:04.280 Every now and then over the foreseeable future. 0:06:04.400 --> 0:06:06.560 What was interesting, and John pointed this out earlier, is 0:06:06.560 --> 0:06:09.000 that on Friday we saw rally and to US treasuries, 0:06:09.240 --> 0:06:11.480 and this was different than what we saw after the August, 0:06:11.720 --> 0:06:14.560 the April second Liberation Day, and it raises the question 0:06:15.000 --> 0:06:17.880 about whether the market is looking through any kind of 0:06:17.960 --> 0:06:21.640 price shocks as one time transitory, or whether it's complacent 0:06:21.760 --> 0:06:25.520 about the inflationary ramifications of this decoupling between the US 0:06:25.560 --> 0:06:27.400 and China over a longer period of time. 0:06:27.680 --> 0:06:28.400 How do you see that? 0:06:29.760 --> 0:06:31.440 Yeah, it's an interesting one because you know, in the 0:06:31.520 --> 0:06:32.000 last couple of. 0:06:32.000 --> 0:06:34.320 Months you haven't really seen the inflation impact that people 0:06:34.320 --> 0:06:37.080 are anticipating in April, and so I think that what 0:06:37.120 --> 0:06:39.800 we saw on Friday was just this assumption that this 0:06:39.880 --> 0:06:42.600 is the continuation. There will only be a one time shock, 0:06:42.640 --> 0:06:45.400 You'll be very modest. This is really really early day. 0:06:45.480 --> 0:06:47.480 So to our minds, one of the key risks that 0:06:47.520 --> 0:06:49.200 we do need to look out for in twenty twenty 0:06:49.240 --> 0:06:51.920 six is, you know, the inflation number is moving a 0:06:51.960 --> 0:06:55.040 little bit higher than anticipated. At the moment, we're expecting 0:06:55.120 --> 0:06:57.480 CPI to be hovering around the kind of the mid 0:06:57.760 --> 0:06:59.479 I actually said the three point two to three point 0:06:59.480 --> 0:07:02.240 three percent level. If we were to see it move 0:07:02.560 --> 0:07:05.440 above three and a half percent towards it four percent number, well, 0:07:05.440 --> 0:07:08.360 then I think the equations kind of change, and I 0:07:08.440 --> 0:07:10.120 think that that would be a real sticking point for 0:07:10.160 --> 0:07:12.040 the market. But it is really early days, and I 0:07:12.040 --> 0:07:14.560 think as we go into to earning season that to 0:07:14.680 --> 0:07:16.080 us is going to be the key thing that we're 0:07:16.120 --> 0:07:19.600 listening out for. What are CEOs telling us about the 0:07:19.640 --> 0:07:22.560 price impact, how much they're planning to be passing on. 0:07:22.680 --> 0:07:24.760 And I think that that picture won't be very clear 0:07:25.280 --> 0:07:27.600 until we're looking into Q one Q two of next year. 0:07:28.280 --> 0:07:31.800 Stay with us. More Bloomberg Surveillance coming up after this. 0:07:40.840 --> 0:07:43.200 Let's turn to the US dollar. The index down eight 0:07:43.240 --> 0:07:47.160 percent year today, facing ongoing volatility. Jean Balvan, head of 0:07:47.160 --> 0:07:50.200 the black Rock Investment Institute, rights, we see the US 0:07:50.280 --> 0:07:54.000 dollar slide tied to expected FED rate cuts and fiscal concerns, 0:07:54.080 --> 0:07:58.520 not evidence its reserve status is under threat. Jehan joins 0:07:58.600 --> 0:08:00.960 us now for more. Johnk and morning, Good morning. How 0:08:00.960 --> 0:08:03.720 difficult people finally get to draw a distinction between one 0:08:04.160 --> 0:08:04.640 and the other. 0:08:05.760 --> 0:08:08.200 Yeah, I think, you know, if you look at this 0:08:08.320 --> 0:08:10.520 year and the commentaries around the dollar and so on, 0:08:10.600 --> 0:08:14.680 and connect the dots between you know, uncertainty and pausing 0:08:14.720 --> 0:08:17.600 so on. It's easy to tell the story that investors 0:08:17.600 --> 0:08:20.080 are more skeittish about the dollar, and it's a specific 0:08:20.160 --> 0:08:23.440 dollar kind of risk premium that is being applied. But 0:08:23.960 --> 0:08:25.360 I mean when you look under the hood and the 0:08:25.560 --> 0:08:27.760 facts so far this year, I mean, there's no massive 0:08:27.800 --> 0:08:31.080 disconnect between the dollar weakness we've seen in historical fundamental 0:08:31.320 --> 0:08:35.000 behavior and so on the face of it. You know, 0:08:35.080 --> 0:08:37.680 there might be down the road question about the reserve 0:08:37.679 --> 0:08:39.959 currency status, but I don't think we have the evidence 0:08:39.960 --> 0:08:43.200 for it yet. I think moreover, when you look since 0:08:43.240 --> 0:08:46.120 the you know, all the discussion about central bank independence 0:08:46.120 --> 0:08:48.000 and so on, like eat it up over the summer 0:08:48.120 --> 0:08:51.280 and a bit before, the dollar didn't really weaken against 0:08:51.280 --> 0:08:54.280 other kind of G ten currencies, So we think it's 0:08:54.320 --> 0:08:56.920 more of a broader fiscal story. 0:08:57.120 --> 0:09:01.320 Globally, you see y'll curve steep uh. 0:09:01.040 --> 0:09:04.800 And that has some impact on gold versus currencies, But 0:09:04.800 --> 0:09:06.760 I don't think we see really a US dollar kind 0:09:06.760 --> 0:09:08.080 of reserve currency trade yet. 0:09:08.200 --> 0:09:10.480 I brought I'm glad that you brought up gold, because 0:09:10.600 --> 0:09:13.280 the dollar has to appreciated dramatically against gold, and you 0:09:13.280 --> 0:09:15.600 could argue that the only reason why you haven't seen 0:09:15.760 --> 0:09:17.920 a greater weakening than the dollar is because nobody else 0:09:17.960 --> 0:09:20.720 is much better. I mean, how much is this absolutely 0:09:20.760 --> 0:09:25.079 debasement but represented in gold, not necessarily anything specific about 0:09:25.080 --> 0:09:28.079 the dollar as reserve status, but is generally a change 0:09:28.080 --> 0:09:29.400 in the global financial system. 0:09:29.640 --> 0:09:31.600 Yeah, I think that's a that's the that's there's more 0:09:31.640 --> 0:09:35.080 to data think going on right now, which is how 0:09:35.080 --> 0:09:37.080 we will resolve these fiscal outlooks. 0:09:37.120 --> 0:09:37.560 Globally. 0:09:37.840 --> 0:09:41.120 We see what's happening in France, we see Japan and 0:09:41.200 --> 0:09:44.640 the US, so I think it's it's a common story. Uh, 0:09:44.800 --> 0:09:47.480 the dollar, sorry, the goal gold is attractive in that context. 0:09:47.559 --> 0:09:49.679 I'm not sure, uh you know, if it's going to 0:09:49.720 --> 0:09:52.240 be a long term trade, but clearly when the guard, 0:09:52.280 --> 0:09:54.480 when when the markets is a bit more anxious about 0:09:54.480 --> 0:09:57.679 these questions, we see a narrative that it's gold up. 0:09:57.679 --> 0:09:59.880 It's been playing up. It hasn't worked for a long time. 0:10:00.040 --> 0:10:01.280 It has been working this year, for sure. 0:10:01.320 --> 0:10:03.480 You talked about a yeld curve steepening, and the more 0:10:03.520 --> 0:10:05.679 we talk about this, the more I question why we're 0:10:05.679 --> 0:10:07.600 not seeing an even steper yield curve where we're not 0:10:07.640 --> 0:10:09.439 seeing even more of a sell off in long bonds 0:10:09.480 --> 0:10:12.080 globally and developed markets, given some of the fiscal concerns, 0:10:12.080 --> 0:10:15.760 and given frankly, this debasement that we've been talking about, 0:10:16.040 --> 0:10:17.200 does that strike you as odd? 0:10:18.200 --> 0:10:21.360 I think we're getting We might be getting lucky at this, 0:10:21.600 --> 0:10:27.120 at this juncture where the US economy might be weakening 0:10:27.440 --> 0:10:31.800 just enough so that this doesn't really come to head. 0:10:31.200 --> 0:10:32.040 Just right now. 0:10:32.400 --> 0:10:35.040 We were a bit more concerned coming into September that 0:10:35.080 --> 0:10:38.760 you would see, you know, inflation maybe not behaving. Last 0:10:38.760 --> 0:10:40.240 time I was here, I was talking about like the 0:10:40.559 --> 0:10:42.120 doubts we had about the ability of the FED to 0:10:42.120 --> 0:10:44.960 cut as much as the market was expecting. Now we 0:10:45.000 --> 0:10:46.920 are a bit more confident that the Fed can deliver. 0:10:48.080 --> 0:10:50.920 Macro is weakening enough, and that's going to help relieve 0:10:51.040 --> 0:10:53.920 some of the debt servicing cost tensions that were happening. 0:10:53.960 --> 0:10:56.559 So we might be for the next few months, or 0:10:56.559 --> 0:10:57.800 I don't know, for a long in a more of 0:10:57.840 --> 0:11:01.280 a lucky spot where these concerns are not really coming 0:11:01.280 --> 0:11:03.960 to head. But underneath that, I totally agree that there's 0:11:03.960 --> 0:11:05.679 a bit of a disconnect, and that's why we think 0:11:05.760 --> 0:11:08.640 longer term was I need to see long long term 0:11:08.720 --> 0:11:12.160 rates go up from here in a ten year closer 0:11:12.200 --> 0:11:14.680 to five makes more sense for US than four percent, 0:11:15.320 --> 0:11:16.520 you know, a few years down their road. 0:11:16.640 --> 0:11:18.920 John, When you say there's no evidence right now that 0:11:18.960 --> 0:11:22.200 the dollars reserve currency status is under threat, what would 0:11:22.280 --> 0:11:24.640 you see if it was, what would be happening? 0:11:25.080 --> 0:11:26.439 I think you would. 0:11:26.480 --> 0:11:29.679 So you look at this year, and fifty percent of 0:11:29.760 --> 0:11:32.559 the weakening that we've seen can be attributed to the 0:11:32.640 --> 0:11:35.360 increase easing expectation from the FAD. So just the interest 0:11:35.400 --> 0:11:37.800 rate differential story that we've seen this year playing out 0:11:38.080 --> 0:11:40.200 explains a bit, explains a big part of the move. 0:11:40.640 --> 0:11:45.400 And then you know the yield curve steepening investor asking 0:11:45.440 --> 0:11:47.839 more for a term premium for you know, holding that 0:11:48.720 --> 0:11:51.080 us that maybe that has played some role as well. 0:11:51.360 --> 0:11:53.000 But the point is that if you look at like 0:11:53.040 --> 0:11:55.840 how the dollars behave relative to like term premium the 0:11:55.960 --> 0:12:00.440 VIX or interest rate differential, historically that relation ship hasn't 0:12:00.480 --> 0:12:03.400 really broken. If we were seeing that relationship broke break 0:12:03.720 --> 0:12:06.640 and the dollar being much weaker than these fundamentals suggests, 0:12:07.000 --> 0:12:08.880 then I think that would start to be evidence that 0:12:08.920 --> 0:12:11.600 the investors are asking for more than just the fundamentals, 0:12:12.160 --> 0:12:13.560 and they're more worried about a dollar. 0:12:13.679 --> 0:12:15.760 What signal do you take from the relationship between gold 0:12:15.800 --> 0:12:18.640 and risk more generally the equity market move pad with 0:12:18.880 --> 0:12:19.920 the gold move this year. 0:12:20.400 --> 0:12:24.920 Yeah, I think there's a story around, you know, some 0:12:24.960 --> 0:12:28.000 concern of fiscal dominance maybe playing out down the road, 0:12:28.160 --> 0:12:30.320 not a reality, but markets are paying some. 0:12:32.400 --> 0:12:33.120 Credence to that. 0:12:33.200 --> 0:12:35.800 But at the same time, before you get there, you 0:12:35.840 --> 0:12:38.360 have an environment that's going to be pretty supportive for equity. 0:12:38.480 --> 0:12:39.920 So I don't think there's really a disconnect. 0:12:39.960 --> 0:12:44.760 It's an easy financial condition world maintained for longer bids, 0:12:45.080 --> 0:12:47.560 you know, equities, but you want to get some insurance 0:12:48.120 --> 0:12:48.640 with gold. 0:12:48.679 --> 0:12:51.040 Did you think we are on the path towards fiscal 0:12:51.080 --> 0:12:53.600 dominance in twenty six I think this. 0:12:53.520 --> 0:12:54.319 Is a huge call. 0:12:54.400 --> 0:12:56.559 And one things that I keep saying is it's very 0:12:56.800 --> 0:12:58.520 in twenty twenty five. One thing that we need to 0:12:58.559 --> 0:13:01.080 guard against is like extra apple laid from like what 0:13:01.200 --> 0:13:03.520 looks very dramatic and then your term to long term 0:13:03.520 --> 0:13:07.480 consequences and big change. Right, So on a day you 0:13:07.520 --> 0:13:10.599 see some headlines you can be tempted to see I 0:13:10.760 --> 0:13:12.920 never would have expected to see headline like this, so 0:13:13.040 --> 0:13:16.280 hence we're going to see physical dominance At the same time. 0:13:16.320 --> 0:13:18.400 I think these are big steps. There's going to be 0:13:18.400 --> 0:13:21.319 equalibrium forces playing out, So I think this is something 0:13:21.360 --> 0:13:23.000 you need to put more weight on than you would 0:13:23.040 --> 0:13:24.080 have had historically. 0:13:24.080 --> 0:13:25.720 But I don't think this is a default. 0:13:25.840 --> 0:13:27.600 So at least I talked a lot about this. You 0:13:27.640 --> 0:13:30.560 look at the TRAS rate that's aggressively shortened duration. The 0:13:30.559 --> 0:13:33.720 Federal Reserve under this leadership is putting a priority on 0:13:33.760 --> 0:13:35.760 cutting interest rates, so at least a bias to reduce 0:13:35.800 --> 0:13:38.640 interest rates even with inflation around three. Now, that might 0:13:38.679 --> 0:13:41.840 not be fiscal dominance per se, but maybe the symptoms 0:13:41.920 --> 0:13:45.200 of it. The consequence is a similar There's some crossover 0:13:45.240 --> 0:13:47.000 here which I think speaks to the gout trait doesn't 0:13:47.000 --> 0:13:48.520 it to some extent at least. 0:13:48.520 --> 0:13:51.520 Yeah, I think as long as long as the macro 0:13:51.600 --> 0:13:53.960 picture evolves in a way that I mean, it's sounds 0:13:54.000 --> 0:13:55.600 cynical to put it this way, but like there's a 0:13:55.640 --> 0:14:00.600 proper cover for cutting rates from a macro perspective. Markets 0:14:00.640 --> 0:14:03.320 might be concerned about, like what's really the motivation behind it, 0:14:03.360 --> 0:14:06.200 and whether it's like yeah, but as long as we 0:14:06.240 --> 0:14:07.880 have the proof of it, I think we're going to 0:14:08.000 --> 0:14:11.120 run with We're not in the fiscal dominance world just yet, 0:14:11.160 --> 0:14:13.800 but yeah, I think it's going to depend on if 0:14:13.800 --> 0:14:17.040 we reach the point where it's really very hard to 0:14:17.080 --> 0:14:20.440 explain cutting rates just on the business of the macro outlook, 0:14:20.480 --> 0:14:23.640 and and it looks like we're deviating, then I think 0:14:23.640 --> 0:14:24.760 it's going to be and I want to I don't 0:14:24.760 --> 0:14:26.200 think it's going to be continuous. I think there's going 0:14:26.240 --> 0:14:28.040 to be like a discontinuity at that point if we 0:14:28.120 --> 0:14:28.640 deal there. 0:14:29.400 --> 0:14:32.920 Stay with US mobile imperc surveillance. Coming up after this, 0:14:41.760 --> 0:14:44.840 building on this historic story Norman Rule, they form a 0:14:44.920 --> 0:14:48.040 senior US intelligence official rites in the following. The Middle 0:14:48.120 --> 0:14:51.200 Age continues to post many challenges, but the president's approach 0:14:51.480 --> 0:14:55.320 reshuffled the strategic deck, offering opportunities and leaving the US 0:14:55.600 --> 0:14:59.120 the undisputed major power in the region. No, I'm joined 0:14:59.160 --> 0:15:02.280 us now for more. Norm Wickoff Kushner, the President of 0:15:02.280 --> 0:15:04.720 the United States. No, what made a difference here? 0:15:06.680 --> 0:15:09.240 Well, we've got a form a president who has spent 0:15:09.600 --> 0:15:13.760 the first ten months of his administration developing a new 0:15:13.800 --> 0:15:17.000 policy for the Middle East, a policy that focused on 0:15:17.120 --> 0:15:23.600 constraining Iran, Iron's nuclear program, Iran's proxies, providing Israel with 0:15:25.080 --> 0:15:29.320 unalloyed support, but also building very strong relations with a 0:15:29.400 --> 0:15:33.920 variety of Arab partners, resetting relations with Saudi Arabia, the 0:15:34.000 --> 0:15:37.560 United Arab Emirates, but also maintaining strong relations with Qatar, 0:15:37.960 --> 0:15:42.320 and ensuring strong relations with Turkey and Egypt. And together 0:15:42.440 --> 0:15:46.000 this provided an architecture that enabled the Trump administration to 0:15:46.080 --> 0:15:49.800 speak with pretty much everyone that needed to be brought 0:15:49.800 --> 0:15:52.840 to the table, but also to provide pressure on all 0:15:52.880 --> 0:15:55.520 of those parties through those channels, and then he used 0:15:56.000 --> 0:16:01.120 unorthodox approaches mister Wikoff and mister kush and I have 0:16:01.600 --> 0:16:04.400 dealt with mister Kushner in the past, and he's a 0:16:04.520 --> 0:16:09.520 very sober and hard working individual and we've seen extraordinary results. 0:16:09.600 --> 0:16:13.440 We should not over be it, not understate the tectonic 0:16:13.560 --> 0:16:14.560 nature of this moment. 0:16:15.160 --> 0:16:17.840 Norm was it the strategy behind this Trump team that 0:16:17.880 --> 0:16:20.720 really changed it. We spoke to almost hawk Seen on Friday, 0:16:20.720 --> 0:16:22.840 who was an individual that worked under Biden and said 0:16:22.840 --> 0:16:25.560 this deal was on the table in January. What's changed 0:16:25.600 --> 0:16:26.440 in the nine months. 0:16:27.600 --> 0:16:31.520 Well, aspects of this deal are We're always going to 0:16:31.560 --> 0:16:33.680 be on the table. I mean the idea that there 0:16:33.720 --> 0:16:38.360 would be a prisoner exchange, of a release of Palestin prisoners, 0:16:38.400 --> 0:16:41.880 the release of hostages, that there would be some sort 0:16:41.920 --> 0:16:45.360 of a disarmament of Hamas. That was going to be 0:16:45.360 --> 0:16:47.920 true no matter what administration was going to be in power. 0:16:48.200 --> 0:16:50.960 But the idea that you would bring pressure upon the 0:16:51.040 --> 0:16:54.320 parties to. 0:16:53.040 --> 0:16:53.840 Make this happen. 0:16:54.200 --> 0:16:56.280 I don't think that was going to be achievable in 0:16:56.280 --> 0:16:59.320 the Biden administration because of the nature of their relationship 0:16:59.400 --> 0:17:02.840 with the player in the region. And the Trump administration 0:17:02.960 --> 0:17:06.240 had a very different approach, and that approach made this happen. 0:17:06.400 --> 0:17:09.720 So we should be clear the Biden administration's approach to 0:17:09.800 --> 0:17:13.119 the region was unlikely to achieve this result, and the 0:17:13.160 --> 0:17:15.720 Trump administration did this in ten months. 0:17:16.760 --> 0:17:17.440 Normal when it. 0:17:17.359 --> 0:17:19.080 Comes to what comes next, is going to be this 0:17:19.200 --> 0:17:23.040 unprecedented peace conference in Egypt. What do you expect that 0:17:23.119 --> 0:17:25.480 will come of that? Will we get more information on 0:17:25.520 --> 0:17:28.240 what Phase two looks like when it comes to Gaza. 0:17:28.920 --> 0:17:31.560 This is an extraordinary conference in and of itself. This 0:17:32.160 --> 0:17:32.760 is unusual. 0:17:32.880 --> 0:17:38.280 Twenty nations, the President of Indonesia is showing up. You've 0:17:38.320 --> 0:17:42.760 got twenty nations dealing with Mohammuda Bas, who has not 0:17:42.920 --> 0:17:43.360 been to. 0:17:45.280 --> 0:17:46.680 Israel in some time. 0:17:47.080 --> 0:17:49.480 You've got the Prime Minister of Egypt who has been 0:17:49.480 --> 0:17:52.199 invited and may show up nonetheless at the end of 0:17:52.240 --> 0:17:58.000 this important holiday seat holiday. If that happens, that would 0:17:58.000 --> 0:18:01.359 be the first time he has been in Egypt in 0:18:01.440 --> 0:18:04.680 quite a while. That the Israeli Prime Minister attends, that 0:18:04.720 --> 0:18:06.879 would be the first time he would be meeting with 0:18:06.920 --> 0:18:09.600 some of these countries that remember, there are countries attending 0:18:09.600 --> 0:18:11.480 this that do not have relations with. 0:18:13.200 --> 0:18:13.520 Israel. 0:18:14.000 --> 0:18:17.040 And this would be the Israeli Prime Minister attending with 0:18:17.440 --> 0:18:22.080 Prime President Mohamud A Bass, someone he has refused to recognize. 0:18:22.119 --> 0:18:25.320 So this would be an opportunity for Natanyahu and a 0:18:25.400 --> 0:18:29.800 Boss to in essence set the stage for that second effort, 0:18:29.800 --> 0:18:33.159 that second phase also for these countries to identify with 0:18:33.240 --> 0:18:35.960 support they're going to provide, and for the President to 0:18:36.000 --> 0:18:39.240 pull them together and start that process. And it is 0:18:39.320 --> 0:18:42.080 critical to this security that this AID be put in 0:18:42.119 --> 0:18:46.359 place to provide the Palestinian people with the humanitarian and 0:18:46.480 --> 0:18:50.560 security architecture they need to restore their lives. 0:18:50.840 --> 0:18:53.200 Norman, just to that point, you were talking about whether 0:18:53.200 --> 0:18:55.000 it be be Natanya who the Prime Minister of Israel 0:18:55.000 --> 0:18:57.840 will be going. His office said this morning, thanks to 0:18:57.920 --> 0:19:00.680 President Trump for the invitation, that he won't be able 0:19:00.720 --> 0:19:02.920 to attend to to the beginning of the Jewish holiday 0:19:03.080 --> 0:19:05.720 this evening. So we'll see whether he eventually makes it there. 0:19:05.760 --> 0:19:07.560