1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,520 --> 00:00:18,440 Speaker 2: with Lisa Bromwitz and a Marie Hortern. Join us each 4 00:00:18,520 --> 00:00:21,440 Speaker 2: day for insight from the best in markets, economics, and 5 00:00:21,480 --> 00:00:24,759 Speaker 2: geopolitics from our global headquarters in New York City. We 6 00:00:24,800 --> 00:00:27,479 Speaker 2: are live on Bloomberg Television weekday mornings from six to 7 00:00:27,560 --> 00:00:31,040 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify 8 00:00:31,240 --> 00:00:33,519 Speaker 2: or anywhere else you listen, and as always on the 9 00:00:33,520 --> 00:00:35,880 Speaker 2: Bloomberg Terminal and the Bloomberg Business App. 10 00:00:36,520 --> 00:00:39,600 Speaker 1: I am here in Atlanta, Georgia, with the CEO of 11 00:00:39,720 --> 00:00:42,839 Speaker 1: Delta ed Baston here alongside me. After that earning support 12 00:00:42,880 --> 00:00:45,520 Speaker 1: yesterday and that projection of twenty percent earnings per share 13 00:00:45,560 --> 00:00:48,640 Speaker 1: growth in twenty twenty six, Now that you've had a 14 00:00:48,720 --> 00:00:50,960 Speaker 1: day to say, jest, have you been surprised by the 15 00:00:51,000 --> 00:00:53,880 Speaker 1: market's reaction and frankly by the lines of inquiry that 16 00:00:53,880 --> 00:00:54,720 Speaker 1: you got yesterday? 17 00:00:55,120 --> 00:00:55,160 Speaker 3: No? 18 00:00:55,320 --> 00:00:57,160 Speaker 4: Really. First of all, thank you for coming down. It's 19 00:00:57,160 --> 00:00:59,040 Speaker 4: great to have you on our campus down here in Atlanta. 20 00:00:59,560 --> 00:01:02,240 Speaker 4: There were a lot of expectations. We have a lot 21 00:01:02,240 --> 00:01:05,240 Speaker 4: of momentum in our business and as we're going into 22 00:01:05,240 --> 00:01:07,039 Speaker 4: the year, we've seen the first part of the year 23 00:01:07,080 --> 00:01:09,839 Speaker 4: that momentum picked up yet again in the early early 24 00:01:09,920 --> 00:01:12,319 Speaker 4: days of January. And so as a result of that, 25 00:01:12,360 --> 00:01:15,800 Speaker 4: I think our investor base was curious as to whether 26 00:01:15,840 --> 00:01:19,039 Speaker 4: they see that momentum continuing to build, continue to the 27 00:01:19,080 --> 00:01:22,200 Speaker 4: flatline to bop around a little bit. And we just 28 00:01:22,240 --> 00:01:25,720 Speaker 4: finished a year where we saw some pretty significant challenges, 29 00:01:25,760 --> 00:01:28,800 Speaker 4: whether it was the Liberation Day impact on consumer sentiment, 30 00:01:29,480 --> 00:01:32,199 Speaker 4: shutdown of the government and the airspace and the latter 31 00:01:32,240 --> 00:01:34,280 Speaker 4: part of the year. So we wanted to make certain 32 00:01:34,280 --> 00:01:36,319 Speaker 4: we had a little bit of wiggle room, some caution 33 00:01:36,840 --> 00:01:39,800 Speaker 4: as to how we thought about projecting the year out. 34 00:01:39,840 --> 00:01:42,840 Speaker 4: And so I think there was more inquiries to just 35 00:01:42,920 --> 00:01:47,920 Speaker 4: how much caution is there and what couldat look like? Right, 36 00:01:48,000 --> 00:01:49,600 Speaker 4: And so I think that's more of what we saw. 37 00:01:49,760 --> 00:01:52,600 Speaker 1: So we'll get into what great could look like. Let's 38 00:01:52,600 --> 00:01:54,200 Speaker 1: get into the caution and some of the things that 39 00:01:54,240 --> 00:01:57,640 Speaker 1: are less foreseeable, including a proposed ten percent. 40 00:01:57,360 --> 00:01:59,200 Speaker 3: Cap on a credit card. 41 00:02:00,360 --> 00:02:03,360 Speaker 1: And it raises this question about the loyalty program at Delta, 42 00:02:03,400 --> 00:02:06,480 Speaker 1: considering the fact that American Express and the partnership there 43 00:02:06,720 --> 00:02:11,400 Speaker 1: contributed something like fourteen percent according to my calculations of 44 00:02:11,480 --> 00:02:13,880 Speaker 1: the revenue growth over the past year. I'm just wondering 45 00:02:14,040 --> 00:02:14,880 Speaker 1: how big of a hit is this. 46 00:02:14,919 --> 00:02:17,120 Speaker 3: Have you started to not that out at all? I 47 00:02:17,160 --> 00:02:17,840 Speaker 3: think it's early. 48 00:02:17,919 --> 00:02:20,920 Speaker 4: I think it's premature. This that's not our business as 49 00:02:20,919 --> 00:02:23,680 Speaker 4: the financial services world and the bank and climate. I 50 00:02:23,680 --> 00:02:25,520 Speaker 4: think the banks that have already come out and spoken 51 00:02:25,560 --> 00:02:29,280 Speaker 4: about it are expressing a tremendous amount of concern. So 52 00:02:29,840 --> 00:02:32,680 Speaker 4: I understand it would require legislation, is what I'm told, 53 00:02:33,200 --> 00:02:36,600 Speaker 4: and we know the challenges of getting anything through Congress 54 00:02:36,960 --> 00:02:40,560 Speaker 4: these days. I also think the knock on effects are 55 00:02:40,560 --> 00:02:44,480 Speaker 4: pretty significant. When you think about what seems to be 56 00:02:44,520 --> 00:02:47,480 Speaker 4: maybe a good idea to help the lower income strata, 57 00:02:47,680 --> 00:02:51,720 Speaker 4: give them some income tax or text some interest rate relief, 58 00:02:52,160 --> 00:02:55,560 Speaker 4: the reality is is going to eliminate their ability for credit, 59 00:02:55,880 --> 00:02:58,560 Speaker 4: and it's going to freeze up tremendous amount of credit 60 00:02:58,639 --> 00:03:00,280 Speaker 4: lines that the banks aren't can be able to forward 61 00:03:00,320 --> 00:03:04,920 Speaker 4: to provide. So I'm not it's not my business. Of course, 62 00:03:04,919 --> 00:03:06,880 Speaker 4: we're going to work closely with America Express. The second 63 00:03:06,919 --> 00:03:10,000 Speaker 4: factor is is that AMEX is a premium car provider, 64 00:03:10,440 --> 00:03:14,040 Speaker 4: so that's really not the income level that we focus 65 00:03:14,080 --> 00:03:15,200 Speaker 4: on in our business. 66 00:03:15,360 --> 00:03:17,720 Speaker 1: At the same time, there is a sense that's a 67 00:03:17,760 --> 00:03:20,120 Speaker 1: growing part of the revenues. We saw an eleven percent 68 00:03:20,200 --> 00:03:23,799 Speaker 1: increase in the contribution that this particular aspect made to 69 00:03:24,960 --> 00:03:28,160 Speaker 1: Delta's revenue. So I just wonder how much do you 70 00:03:28,240 --> 00:03:30,400 Speaker 1: expect that to grow? All things being. 71 00:03:30,280 --> 00:03:34,400 Speaker 4: Equal, we're expecting high single digit growth in the current year. 72 00:03:34,440 --> 00:03:36,760 Speaker 4: We've been seeing double digit growth for the last several years, 73 00:03:36,800 --> 00:03:39,800 Speaker 4: and it's a really important part of our business model. 74 00:03:39,800 --> 00:03:42,240 Speaker 4: But I don't think it's something that we look back 75 00:03:42,280 --> 00:03:46,080 Speaker 4: and start getting causert. I think this idea has a 76 00:03:46,080 --> 00:03:48,440 Speaker 4: lot of roadblocks and obstacles ahead of it. 77 00:03:48,760 --> 00:03:50,280 Speaker 1: One thing that you said in an interview with the 78 00:03:50,320 --> 00:03:52,880 Speaker 1: colleague talking about what could great look like is that 79 00:03:52,920 --> 00:03:54,880 Speaker 1: effectively all the growth that you've seen so far has 80 00:03:54,880 --> 00:03:57,640 Speaker 1: been from the premium cabin, not from the main cabin. 81 00:03:58,160 --> 00:03:59,440 Speaker 3: Why do you think that is. 82 00:03:59,440 --> 00:04:01,920 Speaker 1: Is it because just incredible strength at the premium end, 83 00:04:02,040 --> 00:04:04,440 Speaker 1: or is it because of weakness in the main cabin. 84 00:04:04,960 --> 00:04:06,880 Speaker 4: I think the main reason is the demand set for 85 00:04:06,960 --> 00:04:10,440 Speaker 4: the premium seats and the premium product that we offer 86 00:04:11,040 --> 00:04:12,680 Speaker 4: is a continues to be. 87 00:04:12,600 --> 00:04:14,040 Speaker 3: At a record high. 88 00:04:14,120 --> 00:04:16,760 Speaker 4: The more we look at the health of the consumer. 89 00:04:16,800 --> 00:04:17,880 Speaker 3: We talk about the K. 90 00:04:18,520 --> 00:04:20,320 Speaker 4: We're at the top end of that K in terms 91 00:04:20,320 --> 00:04:22,919 Speaker 4: of who our consumer is, and when you have a 92 00:04:23,000 --> 00:04:26,440 Speaker 4: high demand set, that's what drives pricing strength, and that's 93 00:04:26,480 --> 00:04:29,160 Speaker 4: what drives the growth that we've seen over the last 94 00:04:29,200 --> 00:04:32,080 Speaker 4: several years. That said, on the main cabinet, it's still 95 00:04:32,080 --> 00:04:34,080 Speaker 4: a big part of our business. It's what pays the 96 00:04:34,080 --> 00:04:37,440 Speaker 4: bills i'd like to think of. And as we see 97 00:04:37,920 --> 00:04:41,039 Speaker 4: some of the rationalization that's occurring because you have a 98 00:04:41,080 --> 00:04:45,360 Speaker 4: lot of lower end airlines with low end seats, too 99 00:04:45,440 --> 00:04:49,880 Speaker 4: many seats chasing still enough low end consumer demand, that 100 00:04:50,480 --> 00:04:53,120 Speaker 4: space is where a lot of the rationalization you see 101 00:04:53,120 --> 00:04:57,520 Speaker 4: it in the industry currently. As that backdrop continues to 102 00:04:57,560 --> 00:05:01,440 Speaker 4: get into a healthier environment because all those airlines have 103 00:05:01,520 --> 00:05:04,120 Speaker 4: to find a way to earn their cost of capital, 104 00:05:04,160 --> 00:05:06,039 Speaker 4: they're not going to be around and so as a 105 00:05:06,040 --> 00:05:09,840 Speaker 4: result of that, whatever happens there, we will benefit from 106 00:05:09,880 --> 00:05:13,000 Speaker 4: that and we'll keep that premium demand set growing. So well, 107 00:05:13,000 --> 00:05:15,120 Speaker 4: we're not growing in that space, but it will still 108 00:05:15,320 --> 00:05:17,640 Speaker 4: be a good one for us. In terms of improvement, you've. 109 00:05:17,520 --> 00:05:20,200 Speaker 1: Talked about consolidation in the lower end of the industry 110 00:05:20,279 --> 00:05:22,120 Speaker 1: and how you expect this to be a pretty big 111 00:05:22,160 --> 00:05:24,520 Speaker 1: year of that as people try to justify their existence 112 00:05:24,920 --> 00:05:27,280 Speaker 1: and survive. Would you play in that and anyway, would 113 00:05:27,279 --> 00:05:28,400 Speaker 1: you make any acquisitions. 114 00:05:28,720 --> 00:05:31,320 Speaker 4: We're not going to comment on that question, but when 115 00:05:31,400 --> 00:05:33,920 Speaker 4: you look at who Delta is, you can answer that 116 00:05:34,000 --> 00:05:34,799 Speaker 4: question for yourself. 117 00:05:35,160 --> 00:05:38,320 Speaker 1: Well, I guess the other question is how much is 118 00:05:38,360 --> 00:05:41,240 Speaker 1: the growth going to come from organic versus inorganic? Is 119 00:05:41,240 --> 00:05:43,200 Speaker 1: there sort of a plan, especially given how much you've 120 00:05:43,240 --> 00:05:47,960 Speaker 1: reduced leverage to really increase by acquisition some of your capacity. 121 00:05:48,440 --> 00:05:51,040 Speaker 4: Well, when we look at growth for US, international is 122 00:05:51,320 --> 00:05:54,040 Speaker 4: a big part of our growth strategy, and we announced 123 00:05:54,120 --> 00:05:57,360 Speaker 4: yesterday a big new order for the Boeing Dreamliner. We're 124 00:05:57,440 --> 00:06:01,320 Speaker 4: very happy about that, excited about that. Think about our industry. 125 00:06:01,400 --> 00:06:03,640 Speaker 4: They come to me, they say, where's the future for 126 00:06:03,839 --> 00:06:04,560 Speaker 4: travel going to come? 127 00:06:04,600 --> 00:06:04,720 Speaker 3: From? 128 00:06:04,760 --> 00:06:07,720 Speaker 4: One hundred years old? It is international. When you think 129 00:06:07,720 --> 00:06:09,800 Speaker 4: about only one in five people in the world have 130 00:06:09,920 --> 00:06:12,120 Speaker 4: ever stepped foot on an airplane. That means you have 131 00:06:12,160 --> 00:06:14,520 Speaker 4: to go new places, You have to find new opportunities 132 00:06:14,560 --> 00:06:16,560 Speaker 4: to grow and expand, and that's going to be the 133 00:06:16,960 --> 00:06:19,560 Speaker 4: statement of the second century of flight. I believe it's 134 00:06:19,560 --> 00:06:22,560 Speaker 4: about making the world a much more connected place than 135 00:06:22,560 --> 00:06:23,160 Speaker 4: it is today. 136 00:06:23,320 --> 00:06:25,960 Speaker 1: You know, this comes at a time the international travel 137 00:06:25,960 --> 00:06:30,280 Speaker 1: growth that the rhetoric between countries has been incredibly heated 138 00:06:30,440 --> 00:06:33,600 Speaker 1: and more about putting up walls. Are you concerned that 139 00:06:33,600 --> 00:06:36,600 Speaker 1: that could have consequences and put barriers When you talk 140 00:06:36,640 --> 00:06:39,320 Speaker 1: about the international travel and the growth that you're seeing 141 00:06:39,360 --> 00:06:40,520 Speaker 1: in that sector, there. 142 00:06:40,320 --> 00:06:43,599 Speaker 4: Have always been walls. There's always been in politics. Are 143 00:06:43,720 --> 00:06:46,760 Speaker 4: soilings what we look at the world today? We know 144 00:06:46,839 --> 00:06:50,120 Speaker 4: the one thing that really does unite the world is 145 00:06:50,160 --> 00:06:52,479 Speaker 4: when you can actually travel and see and experience and 146 00:06:52,560 --> 00:06:55,440 Speaker 4: get to know people, and you bring the countries physically 147 00:06:56,000 --> 00:06:59,120 Speaker 4: closer together. So yes, it's not going to be a 148 00:06:59,160 --> 00:07:01,919 Speaker 4: straight line up. You know, in this business, we know 149 00:07:02,000 --> 00:07:04,640 Speaker 4: there's a lot of terribulence in the sky, not just 150 00:07:04,720 --> 00:07:07,960 Speaker 4: in the business models sometimes, but when we actually do 151 00:07:08,080 --> 00:07:11,880 Speaker 4: physically get connected back together and the world start come 152 00:07:11,960 --> 00:07:14,160 Speaker 4: a closer place, that's where real opportunity. 153 00:07:14,240 --> 00:07:16,960 Speaker 1: Since you're talking about the demand so far this year, 154 00:07:16,960 --> 00:07:19,320 Speaker 1: and you've seen I believe, record demand so far in 155 00:07:19,360 --> 00:07:22,480 Speaker 1: the first week and a half of January, I'm just wondering, 156 00:07:23,040 --> 00:07:25,760 Speaker 1: is it mostly still coming from premium? Is it equal 157 00:07:25,840 --> 00:07:28,560 Speaker 1: across all tiers? Is it also an economy to the 158 00:07:28,600 --> 00:07:31,000 Speaker 1: same degree that you're seeing in terms of the robust 159 00:07:31,040 --> 00:07:32,080 Speaker 1: interest at the top end. 160 00:07:32,360 --> 00:07:34,280 Speaker 4: It continues to be. At the top end, it continues 161 00:07:34,240 --> 00:07:36,640 Speaker 4: to be in business. We're seeing double digit growth in 162 00:07:36,680 --> 00:07:39,120 Speaker 4: business at the start of the year. We had our 163 00:07:39,240 --> 00:07:43,160 Speaker 4: largest weekly sales in our history just last week, up 164 00:07:43,240 --> 00:07:45,840 Speaker 4: double digits over the same week a year ago. So 165 00:07:46,000 --> 00:07:48,320 Speaker 4: if this demand set continues, we're going to have a 166 00:07:48,320 --> 00:07:48,760 Speaker 4: great year. 167 00:07:49,200 --> 00:07:51,120 Speaker 1: So I have to end with this because my colleagues 168 00:07:51,120 --> 00:07:54,800 Speaker 1: asked me to do this. The lounges, the regular lounges, 169 00:07:54,800 --> 00:07:57,400 Speaker 1: not the Delta one. They're getting really crowded. How are 170 00:07:57,440 --> 00:07:59,040 Speaker 1: you going to manage that? Considering that a lot of 171 00:07:59,040 --> 00:08:01,120 Speaker 1: people have complaint about Well, we've. 172 00:08:01,000 --> 00:08:03,880 Speaker 4: Been experiencing that for the last handful of years, and 173 00:08:04,920 --> 00:08:07,000 Speaker 4: it's a problem. What no good deed goes unpunished. You know, 174 00:08:07,000 --> 00:08:09,000 Speaker 4: you build something great and everybody wants to be in there, 175 00:08:09,000 --> 00:08:12,360 Speaker 4: and it's not doesn't feel as exclusive any longer. We've 176 00:08:12,360 --> 00:08:14,200 Speaker 4: been working through that for the last several years. American 177 00:08:14,240 --> 00:08:17,760 Speaker 4: Express is our close partner on that expresses building lounges. 178 00:08:17,800 --> 00:08:19,760 Speaker 4: We're building new lounges where you've got the Delta one 179 00:08:19,800 --> 00:08:21,960 Speaker 4: lounges that are coming. We're going to continue to build 180 00:08:22,000 --> 00:08:24,600 Speaker 4: more supply, in more capacity to take care of all 181 00:08:24,640 --> 00:08:25,560 Speaker 4: of our great customers. 182 00:08:26,560 --> 00:08:27,200 Speaker 5: Stay with us. 183 00:08:27,520 --> 00:08:40,120 Speaker 2: More Bloomberg surveillance coming up after this. In another world, 184 00:08:40,160 --> 00:08:42,360 Speaker 2: i'd say the President's right. These bankers want hire rates 185 00:08:42,360 --> 00:08:44,360 Speaker 2: to make more money. Unfortunately, when it comes to these 186 00:08:44,400 --> 00:08:46,360 Speaker 2: policies that are being recommended at the moment by the 187 00:08:46,360 --> 00:08:48,480 Speaker 2: White House, the warning you're hearing in the last twenty 188 00:08:48,520 --> 00:08:50,160 Speaker 2: four hours, I think is agreed by a lot of 189 00:08:50,160 --> 00:08:53,559 Speaker 2: people on Wall Street. These kind of policy proposals could 190 00:08:53,640 --> 00:08:57,319 Speaker 2: lead to an otherwise unjustified timing of financial conditions, high rates, 191 00:08:57,320 --> 00:08:59,600 Speaker 2: a shilling of credit availability. They are the kind of 192 00:08:59,600 --> 00:09:01,960 Speaker 2: things that resident this White House does not want to say. 193 00:09:02,080 --> 00:09:03,959 Speaker 6: Right, you put a cap on something that means you're 194 00:09:03,960 --> 00:09:05,400 Speaker 6: going to have less of something, and it might be 195 00:09:05,480 --> 00:09:08,920 Speaker 6: actually harder, especially individuals and lower income to actually get 196 00:09:08,960 --> 00:09:12,480 Speaker 6: access to having the ability to use a credit card. 197 00:09:12,679 --> 00:09:14,840 Speaker 6: Which is why you're seeing a tremendous amount of pushback 198 00:09:14,840 --> 00:09:17,000 Speaker 6: from a lot of economists. You see a lot of 199 00:09:17,040 --> 00:09:19,199 Speaker 6: these bank CEOs not just trying to curry favorite the 200 00:09:19,240 --> 00:09:22,520 Speaker 6: President of the United States calling Treasury, but if they 201 00:09:22,559 --> 00:09:25,680 Speaker 6: have to to Tyler's point. They're thinking about potential credit 202 00:09:25,720 --> 00:09:27,440 Speaker 6: card that they could come out with that has a 203 00:09:27,480 --> 00:09:30,680 Speaker 6: lower rate maybe for certain individuals. But this is going 204 00:09:30,720 --> 00:09:32,880 Speaker 6: to be a year long story, especially since you have 205 00:09:32,920 --> 00:09:36,079 Speaker 6: two bills circulating right now in Congress. 206 00:09:35,280 --> 00:09:37,360 Speaker 2: And most of us now Raem and James ed welcome 207 00:09:37,360 --> 00:09:39,160 Speaker 2: to the program. So I always get to hear from you. 208 00:09:39,640 --> 00:09:42,120 Speaker 2: I've been telling this is just popular spark, there's no bite. 209 00:09:42,240 --> 00:09:43,640 Speaker 2: I think it could be a bite like so of 210 00:09:43,679 --> 00:09:44,160 Speaker 2: this year. 211 00:09:46,320 --> 00:09:46,840 Speaker 5: Possible. 212 00:09:47,400 --> 00:09:50,160 Speaker 7: John, I think that the bigger issue for a lot 213 00:09:50,200 --> 00:09:53,439 Speaker 7: of folks that I've talked to is that Interchange bill, 214 00:09:53,480 --> 00:09:57,040 Speaker 7: that credit Card Competition Act. There is not a sense 215 00:09:57,080 --> 00:09:59,240 Speaker 7: that we could see in Congress as a cap on 216 00:09:59,280 --> 00:10:00,600 Speaker 7: those credit card in rates. 217 00:10:00,880 --> 00:10:01,720 Speaker 5: We've examined this. 218 00:10:01,800 --> 00:10:06,760 Speaker 7: There's no executive authority, even using emergency authority that exists 219 00:10:07,120 --> 00:10:07,840 Speaker 7: to put this through. 220 00:10:07,920 --> 00:10:11,000 Speaker 5: But a lot of investors are nervous for a couple 221 00:10:11,040 --> 00:10:11,480 Speaker 5: of reasons. 222 00:10:11,520 --> 00:10:15,760 Speaker 7: One, when Donald Trump says something, oftentimes he goes out 223 00:10:15,800 --> 00:10:19,360 Speaker 7: with the most extreme position and then negotiates into something 224 00:10:19,400 --> 00:10:22,320 Speaker 7: that will be considered reasonable later. So a lot of questions, 225 00:10:22,400 --> 00:10:24,040 Speaker 7: is it going to be thirty six percent? Is there 226 00:10:24,080 --> 00:10:27,280 Speaker 7: something else out there? And then from an investor perspective. 227 00:10:27,520 --> 00:10:29,400 Speaker 7: One thing that we've talked a lot about at Raymond 228 00:10:29,480 --> 00:10:32,720 Speaker 7: James is oftentimes for financials, you need one hundred reasons 229 00:10:32,720 --> 00:10:35,560 Speaker 7: to own them one reason to sell them. Investors are 230 00:10:35,600 --> 00:10:38,200 Speaker 7: starting to warm up to financials again, and now all 231 00:10:38,200 --> 00:10:39,160 Speaker 7: of a sudden, out of. 232 00:10:39,080 --> 00:10:41,679 Speaker 5: The blue, we start get bombarded with some of. 233 00:10:41,640 --> 00:10:44,800 Speaker 7: These one offs that get a lot of people asking, 234 00:10:45,160 --> 00:10:47,719 Speaker 7: can you sustain a rally in this group if you're 235 00:10:47,720 --> 00:10:49,000 Speaker 7: going to have that policy risk. 236 00:10:49,480 --> 00:10:51,719 Speaker 6: Yeah, for the fourth quarter credit cards and the new 237 00:10:51,800 --> 00:10:55,560 Speaker 6: cockroaches when it comes to this legislation potentially in Congress. 238 00:10:55,760 --> 00:10:58,160 Speaker 6: So you think the competition bill has a lot more 239 00:10:58,200 --> 00:11:00,920 Speaker 6: legs than the actual cap on to card interest. 240 00:11:00,720 --> 00:11:02,320 Speaker 5: Rates, Yeah, Amory. 241 00:11:02,400 --> 00:11:04,760 Speaker 7: So back when I worked on Capitol Hill, one of 242 00:11:04,800 --> 00:11:06,920 Speaker 7: the signature bills that I worked on for a couple 243 00:11:06,960 --> 00:11:09,800 Speaker 7: of years was the Card Act hanging up here on 244 00:11:09,800 --> 00:11:14,400 Speaker 7: my wall, which implemented all the consumer protections around credit card. 245 00:11:14,440 --> 00:11:16,800 Speaker 7: So this is something I've worked on for more than 246 00:11:16,840 --> 00:11:20,320 Speaker 7: twenty years, and what I've seen is there's not a 247 00:11:20,320 --> 00:11:23,760 Speaker 7: lot of support for rate caps because there are concerns 248 00:11:23,760 --> 00:11:28,760 Speaker 7: about credit availability. However, on interchange it's just a completely 249 00:11:28,760 --> 00:11:29,320 Speaker 7: different fight. 250 00:11:29,400 --> 00:11:30,760 Speaker 5: You have two really well. 251 00:11:30,800 --> 00:11:35,640 Speaker 7: Heled lobbies, the retailers versus the banks. We've had Durbin 252 00:11:35,760 --> 00:11:38,600 Speaker 7: in the past, strike lightning in the bottle and changed 253 00:11:38,640 --> 00:11:43,680 Speaker 7: the interchange rates on debit card transactions. Marshall, a Republican 254 00:11:44,000 --> 00:11:47,560 Speaker 7: from Kansas, used the kind of push by Donald Trump 255 00:11:47,840 --> 00:11:50,800 Speaker 7: on rate caps to get him onto this bill on 256 00:11:50,840 --> 00:11:53,880 Speaker 7: credit card competition. And whenever there's a vote on something 257 00:11:53,920 --> 00:11:56,920 Speaker 7: emory that can be the whole ballgame. There's been a 258 00:11:57,040 --> 00:12:00,480 Speaker 7: concerted effort since the Durbin Amendment pass back in twenty 259 00:12:00,559 --> 00:12:04,079 Speaker 7: ten on credit card or debit card interchange to never 260 00:12:04,240 --> 00:12:07,000 Speaker 7: have another vote on this because when there's a vote, 261 00:12:07,080 --> 00:12:08,240 Speaker 7: it's unpredictable. 262 00:12:08,320 --> 00:12:10,000 Speaker 5: I still don't think it passes. 263 00:12:10,280 --> 00:12:13,400 Speaker 7: But the risk is higher on the interchange bill than 264 00:12:13,440 --> 00:12:15,000 Speaker 7: the cap on interest rates. 265 00:12:15,120 --> 00:12:17,839 Speaker 6: So do you think the banks are overreacting a little bit. 266 00:12:18,880 --> 00:12:20,880 Speaker 7: I think what the banks are doing is they're trying 267 00:12:20,920 --> 00:12:23,520 Speaker 7: to figure out what they can do to put a 268 00:12:23,559 --> 00:12:27,079 Speaker 7: cap on the risk. Is there something that they can do, 269 00:12:27,640 --> 00:12:30,360 Speaker 7: kind of from a business perspective, to get Donald Trump 270 00:12:30,440 --> 00:12:34,280 Speaker 7: to focus elsewhere. He is very focused on affordability. They 271 00:12:34,320 --> 00:12:37,079 Speaker 7: are having a huge list of other things that they 272 00:12:37,120 --> 00:12:41,000 Speaker 7: want to see happen in DC. The deregulatory agenda is 273 00:12:41,040 --> 00:12:44,439 Speaker 7: a big tailwind for the banks. So if they don't 274 00:12:44,440 --> 00:12:46,760 Speaker 7: do something on credit cards, does some of the other 275 00:12:46,880 --> 00:12:50,400 Speaker 7: parts of the deregulatory agenda get sidelined? Do they not 276 00:12:50,520 --> 00:12:53,640 Speaker 7: get the relief that they're expecting on tailoring or capital 277 00:12:53,679 --> 00:12:56,280 Speaker 7: return on stress tests. There's so many things that the 278 00:12:56,320 --> 00:12:59,840 Speaker 7: banks have going right now in DC. They don't want 279 00:12:59,840 --> 00:13:02,640 Speaker 7: this to be the thing that stops all the other 280 00:13:02,679 --> 00:13:04,760 Speaker 7: benefits that they're getting out of federal regulators. 281 00:13:04,800 --> 00:13:06,840 Speaker 2: That what's been your reaction to the communication with the 282 00:13:06,840 --> 00:13:09,680 Speaker 2: mayor of New York, your reaction to the communication with 283 00:13:09,720 --> 00:13:12,760 Speaker 2: the senator from Massachusetts. What's the strategy there for the 284 00:13:12,800 --> 00:13:13,319 Speaker 2: White House? 285 00:13:14,320 --> 00:13:16,400 Speaker 7: You know, part of the reason that Donald Trump was 286 00:13:16,400 --> 00:13:18,760 Speaker 7: able to get elected in twenty sixteen and again in 287 00:13:18,800 --> 00:13:22,880 Speaker 7: twenty twenty four was tapping into populism. There was a 288 00:13:23,040 --> 00:13:27,040 Speaker 7: crossover between Bernie Sanders voters and folks that have voted 289 00:13:27,040 --> 00:13:30,040 Speaker 7: for Donald Trump in the general election. It is not 290 00:13:30,080 --> 00:13:32,400 Speaker 7: a surprise to me that he has embraced some of 291 00:13:32,440 --> 00:13:36,240 Speaker 7: these conversations in the credit card ten percent cap that's 292 00:13:36,280 --> 00:13:40,199 Speaker 7: a Bernie Sanders bill. With Josh Holly, a Republican from Missouri, 293 00:13:40,640 --> 00:13:43,360 Speaker 7: but he is tapping into things that he knows are 294 00:13:43,440 --> 00:13:46,560 Speaker 7: popular with voters. He sees what Manami was able to 295 00:13:46,600 --> 00:13:49,280 Speaker 7: do in the primary, being able to win in New York, 296 00:13:49,640 --> 00:13:53,120 Speaker 7: tapping into an energy that he tapped into himself, and 297 00:13:53,160 --> 00:13:55,880 Speaker 7: seeing if he can get that for the midterm elections, 298 00:13:56,080 --> 00:13:59,520 Speaker 7: because he sees a midterm elections with increasing headwinds, and 299 00:13:59,559 --> 00:14:02,200 Speaker 7: when he sees these headwinds, he and he alone, thinks 300 00:14:02,240 --> 00:14:03,680 Speaker 7: that he can fix the problem. 301 00:14:03,840 --> 00:14:06,320 Speaker 2: And how big is that group of voters that aren't 302 00:14:06,360 --> 00:14:09,760 Speaker 2: married to a political party but tap into these very ideas, 303 00:14:10,600 --> 00:14:10,920 Speaker 2: you know. 304 00:14:10,840 --> 00:14:11,960 Speaker 5: It's at least ten percent. 305 00:14:12,120 --> 00:14:15,400 Speaker 7: I think that there is a good number of folks 306 00:14:15,400 --> 00:14:18,560 Speaker 7: who look at DC and don't think that they're on 307 00:14:18,640 --> 00:14:22,240 Speaker 7: their side. They think that things are unaffordable. And so 308 00:14:22,440 --> 00:14:25,840 Speaker 7: when we have affordability as his pitch, he thinks that 309 00:14:25,840 --> 00:14:28,680 Speaker 7: that's an opportunity to bring those voters or keep those 310 00:14:28,760 --> 00:14:30,920 Speaker 7: voters on his side. So we're going to have a 311 00:14:31,000 --> 00:14:33,520 Speaker 7: Davo speech that focuses on housing. We're going to focus 312 00:14:33,560 --> 00:14:35,880 Speaker 7: on energy, and that's going to brings in Venezuela. We're 313 00:14:35,920 --> 00:14:39,320 Speaker 7: focusing on the cost of credit. The fight with Jay Powell. 314 00:14:39,680 --> 00:14:41,960 Speaker 7: He's not going to say, it's a fight about kind 315 00:14:41,960 --> 00:14:44,440 Speaker 7: of independence. It's about a fight about how much it 316 00:14:44,560 --> 00:14:47,880 Speaker 7: costs you to run your life, and affordability is a 317 00:14:47,960 --> 00:14:50,760 Speaker 7: much better place to put your kind of center that 318 00:14:50,800 --> 00:14:54,760 Speaker 7: political fight versus a fight over independence, which most voters 319 00:14:55,040 --> 00:14:57,800 Speaker 7: don't really focus on fed independence. It's much more the 320 00:14:57,840 --> 00:15:00,640 Speaker 7: market that does. It's a hugely important thing, but it's 321 00:15:00,720 --> 00:15:02,280 Speaker 7: not something that sways the average voter. 322 00:15:02,360 --> 00:15:04,240 Speaker 5: John, stay with us. 323 00:15:04,560 --> 00:15:16,920 Speaker 2: More Bloomberg Surveillance coming up after this. There's a few 324 00:15:16,920 --> 00:15:19,360 Speaker 2: One Wall Street this morning. Alex Heltman of Barclay's writing, 325 00:15:19,360 --> 00:15:21,400 Speaker 2: for the time being, investors will have to navigate the 326 00:15:21,440 --> 00:15:24,040 Speaker 2: noise of coming Q four earnings and try to deploy 327 00:15:24,080 --> 00:15:28,200 Speaker 2: capital into themes that should be agnostic to the whipsawing headlines. Alex, 328 00:15:28,440 --> 00:15:30,840 Speaker 2: I'm excited for this. Tell me how to do that. 329 00:15:30,920 --> 00:15:32,000 Speaker 2: Good morning, Good morning. 330 00:15:32,920 --> 00:15:38,680 Speaker 8: So keep it really simple, as simple as possible thematically, 331 00:15:39,080 --> 00:15:40,640 Speaker 8: as far as we as a team of concerned. 332 00:15:40,680 --> 00:15:43,680 Speaker 3: There's one very obvious theme which. 333 00:15:43,480 --> 00:15:45,000 Speaker 8: You can deploy in a lot of different ways, and 334 00:15:45,040 --> 00:15:47,760 Speaker 8: that is the US China de coupling. It's that simple, 335 00:15:48,240 --> 00:15:50,440 Speaker 8: and that I think is going to be running and 336 00:15:50,520 --> 00:15:51,240 Speaker 8: humming in the. 337 00:15:51,160 --> 00:15:53,440 Speaker 3: Background and at the center of that for US. 338 00:15:53,520 --> 00:15:57,280 Speaker 8: Of course, you've got topics like defense, you've got topics 339 00:15:57,600 --> 00:16:02,560 Speaker 8: like commodity security, and just like US hegemony as well 340 00:16:02,600 --> 00:16:05,440 Speaker 8: and anything within that, we're particularly focused on the commodity angle. 341 00:16:05,480 --> 00:16:07,920 Speaker 8: We think this is like one of the most interesting 342 00:16:08,040 --> 00:16:09,440 Speaker 8: themes that I've personally seen. 343 00:16:09,480 --> 00:16:10,040 Speaker 3: Let's get into that. 344 00:16:10,080 --> 00:16:11,840 Speaker 2: We're saying it in metals this morning, and it's not 345 00:16:11,840 --> 00:16:15,360 Speaker 2: just precious metals gold, silver, you're seeing and camper in tin. 346 00:16:15,600 --> 00:16:16,960 Speaker 2: Does that speak to the kind of things you and 347 00:16:17,000 --> 00:16:18,080 Speaker 2: the team are thinking about. 348 00:16:17,920 --> 00:16:18,520 Speaker 3: Very much so. 349 00:16:18,520 --> 00:16:20,840 Speaker 8: So, look, we've seen a precious metal rally and that 350 00:16:21,000 --> 00:16:24,400 Speaker 8: is obviously to do with debasement and de dollarization, all 351 00:16:24,400 --> 00:16:26,680 Speaker 8: this kind of thing. Industrial metals is kind of something 352 00:16:26,680 --> 00:16:28,640 Speaker 8: which we pivot to quite hard in the fourth quarter 353 00:16:28,680 --> 00:16:31,520 Speaker 8: of last year, and the reason is because of that decoupling. 354 00:16:31,600 --> 00:16:33,800 Speaker 8: And just to keep you the exact summary in its 355 00:16:33,840 --> 00:16:36,720 Speaker 8: simplest form, US and China used to code depend on 356 00:16:36,720 --> 00:16:38,400 Speaker 8: one another, or still do codepend. 357 00:16:38,000 --> 00:16:39,120 Speaker 3: On a lot of resources. 358 00:16:39,280 --> 00:16:41,280 Speaker 8: If we're moving to a world of decoupling, and we're 359 00:16:41,280 --> 00:16:43,160 Speaker 8: in a sort of a detante right now up until 360 00:16:43,200 --> 00:16:44,680 Speaker 8: the time in these selection is the beginning of twenty 361 00:16:44,720 --> 00:16:48,920 Speaker 8: twenty eight, We've effectively got two years for these countries 362 00:16:48,960 --> 00:16:53,440 Speaker 8: to secure as much resource as possible, not just physical demand, 363 00:16:53,440 --> 00:16:55,640 Speaker 8: but also just the line of sight on future supply. 364 00:16:56,360 --> 00:16:58,640 Speaker 8: And what's really important about that is at the moment, 365 00:16:58,680 --> 00:17:01,600 Speaker 8: the US is relying on over fifty percent imports on 366 00:17:01,640 --> 00:17:04,399 Speaker 8: about forty seven critical metals and resources. It's not just 367 00:17:04,480 --> 00:17:10,479 Speaker 8: rare earths, it's everything, copper, lead, lithium, electrification systems, aluminium, everything. 368 00:17:10,880 --> 00:17:12,840 Speaker 6: If that is your base case, then can we see 369 00:17:12,880 --> 00:17:15,760 Speaker 6: more noise when it comes to geopolitics? The president a 370 00:17:15,800 --> 00:17:18,640 Speaker 6: week ago, a little more of a week ago, captured Maduro. 371 00:17:18,720 --> 00:17:21,080 Speaker 3: He's now talking about Greenland, and. 372 00:17:21,480 --> 00:17:25,120 Speaker 8: Let's not exclude Ukraine as well, massive on critical minerals 373 00:17:25,119 --> 00:17:27,200 Speaker 8: and resources as well. So yes, I think a lot 374 00:17:27,200 --> 00:17:29,640 Speaker 8: of the foreign policy decisions are being driven by those 375 00:17:29,640 --> 00:17:33,000 Speaker 8: two factors, by defense and commodity security. 376 00:17:33,200 --> 00:17:34,879 Speaker 6: Is this how to do with the AI trade in 377 00:17:34,920 --> 00:17:38,119 Speaker 6: building out data centers or is this to increase the 378 00:17:38,200 --> 00:17:41,600 Speaker 6: availability of these minerals and metals we need for our military. 379 00:17:41,880 --> 00:17:44,080 Speaker 8: Well, I think it's both of those, and on top, 380 00:17:44,160 --> 00:17:45,679 Speaker 8: if you just want to run an economy, if you 381 00:17:45,720 --> 00:17:47,640 Speaker 8: just want to build infrastructure, if you want to build 382 00:17:47,720 --> 00:17:51,119 Speaker 8: roads and bridges and electrification of grid and modernize your 383 00:17:51,280 --> 00:17:54,880 Speaker 8: entire economy. You need access to critical minerals and metals. 384 00:17:55,160 --> 00:17:57,160 Speaker 8: And of course people talk a lot about the AI 385 00:17:57,240 --> 00:18:00,800 Speaker 8: narrative when it's an important incremental demand for copper, but 386 00:18:00,840 --> 00:18:03,879 Speaker 8: we're talking about maybe five or six percent of global 387 00:18:03,880 --> 00:18:07,000 Speaker 8: demand is coming from AI data centers. China is accounting 388 00:18:07,040 --> 00:18:09,000 Speaker 8: for sixty percent of global copper demand. 389 00:18:09,320 --> 00:18:11,520 Speaker 2: Let's finish on the priceless story. So some of those 390 00:18:11,520 --> 00:18:15,520 Speaker 2: metals are already training all time highs. Silver copper in 391 00:18:15,560 --> 00:18:17,439 Speaker 2: a bank sector, we've seen some record highs in that 392 00:18:17,480 --> 00:18:20,280 Speaker 2: sector as well, and they've gone into earning season following 393 00:18:20,280 --> 00:18:24,080 Speaker 2: a massive rally. We've pushback from earning season. I just 394 00:18:24,119 --> 00:18:26,560 Speaker 2: wonder if you're taking any early indicators from the way 395 00:18:26,560 --> 00:18:28,760 Speaker 2: the stock has behaved in response to the earnings we've 396 00:18:28,760 --> 00:18:30,200 Speaker 2: seen in the last twenty four. 397 00:18:30,040 --> 00:18:33,359 Speaker 3: Hours, specifically in the financial financials. Yeah, I mean, I 398 00:18:33,440 --> 00:18:33,960 Speaker 3: think you've. 399 00:18:33,800 --> 00:18:36,160 Speaker 8: Obviously got this noise around the credit card data, which 400 00:18:36,240 --> 00:18:39,200 Speaker 8: which you guys have already covered against that. You've also 401 00:18:39,200 --> 00:18:41,240 Speaker 8: got to consider this still a question mark about what's 402 00:18:41,240 --> 00:18:44,000 Speaker 8: going to happen within the ECM world in twenty twenty six. 403 00:18:44,040 --> 00:18:45,640 Speaker 8: There's also going to be a question around the state 404 00:18:45,680 --> 00:18:47,560 Speaker 8: of the consumer in twenty twenty six as well. Most 405 00:18:47,600 --> 00:18:49,439 Speaker 8: people are of the view that it's going to be 406 00:18:49,440 --> 00:18:51,760 Speaker 8: a very robust backdrop still for the consumer. But let's 407 00:18:51,760 --> 00:18:53,840 Speaker 8: not forget we've talked about this a lot in the past. 408 00:18:53,960 --> 00:18:55,560 Speaker 3: We're still in the case shaped recovery. 409 00:18:55,720 --> 00:18:58,400 Speaker 8: There's a large number of consumers that aren't in good shape, 410 00:18:58,480 --> 00:19:00,440 Speaker 8: and we have to consider those as well talking about 411 00:19:00,440 --> 00:19:01,440 Speaker 8: consumer finance. 412 00:19:01,119 --> 00:19:02,680 Speaker 2: In some ways, does it make it easier to trade 413 00:19:02,680 --> 00:19:05,480 Speaker 2: small caps, to be invested in small caps because they're 414 00:19:05,520 --> 00:19:07,960 Speaker 2: not the target of some of the headlines to start. 415 00:19:07,720 --> 00:19:08,160 Speaker 3: The new year. 416 00:19:08,440 --> 00:19:10,960 Speaker 8: So we've been as a team very polished on small 417 00:19:10,960 --> 00:19:12,120 Speaker 8: caps since around about. 418 00:19:11,920 --> 00:19:13,000 Speaker 3: July of last year. 419 00:19:13,320 --> 00:19:17,040 Speaker 8: We're beginning just to sort of temper that enthusiasm. 420 00:19:16,560 --> 00:19:19,280 Speaker 3: Just now, and it's changed just the rally well the positioning. 421 00:19:19,359 --> 00:19:22,160 Speaker 8: So positioning was a big driver of our view back 422 00:19:22,160 --> 00:19:24,639 Speaker 8: in the summer when basically we had record shorts by 423 00:19:24,640 --> 00:19:28,159 Speaker 8: hedge funds and asset manager that's now completely closed, actually 424 00:19:28,200 --> 00:19:30,440 Speaker 8: has moved back to a net long It's not crowded 425 00:19:30,440 --> 00:19:32,919 Speaker 8: by any stretch, and one of the big beneficiaries of 426 00:19:32,920 --> 00:19:35,240 Speaker 8: small caps right now is a combination of the OBBB 427 00:19:36,280 --> 00:19:37,880 Speaker 8: and also the fact we have to think about AI 428 00:19:37,920 --> 00:19:40,960 Speaker 8: beneficiaries ie low margin companies that actually can start to 429 00:19:41,000 --> 00:19:43,840 Speaker 8: get the benefits of AI productivity as well. So there 430 00:19:43,880 --> 00:19:46,359 Speaker 8: is still a positive small cap story, but from the 431 00:19:46,359 --> 00:19:49,040 Speaker 8: positioning dynamic perspective, we have to respect the fact it's changed. 432 00:19:49,119 --> 00:19:51,040 Speaker 2: Is it fair to say that trade though, is no 433 00:19:51,119 --> 00:19:53,639 Speaker 2: longer dependent on lower interest rates? There's something did click 434 00:19:53,720 --> 00:19:56,040 Speaker 2: in in the last several months that was away from 435 00:19:56,080 --> 00:19:56,600 Speaker 2: the Federal. 436 00:19:56,400 --> 00:19:58,640 Speaker 3: Reserve story in terms of trade, the. 437 00:19:58,600 --> 00:20:00,439 Speaker 2: Fact that we had small caps rally as hard as 438 00:20:00,480 --> 00:20:02,879 Speaker 2: they did even though basically the right kind of cycle 439 00:20:03,000 --> 00:20:03,560 Speaker 2: is now stalled. 440 00:20:03,760 --> 00:20:05,960 Speaker 8: I would definitely say there's been a tariff a tariff 441 00:20:06,119 --> 00:20:09,040 Speaker 8: temperament dynamic that's been at play in small caps as well. 442 00:20:09,040 --> 00:20:10,800 Speaker 8: And of course we're going to get the IPO announcement 443 00:20:10,840 --> 00:20:13,160 Speaker 8: from the Supreme Court any day now, and I think 444 00:20:13,200 --> 00:20:16,080 Speaker 8: that decision will also plot the path for small caps 445 00:20:16,080 --> 00:20:16,600 Speaker 8: in the mid term. 446 00:20:16,600 --> 00:20:19,760 Speaker 2: Two, it's that market story the Supreme Court decision, because 447 00:20:19,760 --> 00:20:23,200 Speaker 2: Amris asked this question continuously and have a lot of pushback, 448 00:20:23,200 --> 00:20:25,840 Speaker 2: I would to say basically goes something like this, yeah, 449 00:20:26,160 --> 00:20:28,600 Speaker 2: mayor basically, what's going to happen is they'll find another 450 00:20:28,640 --> 00:20:30,080 Speaker 2: way and it doesn't really change any think. 451 00:20:30,280 --> 00:20:33,160 Speaker 8: So that's really the question. The question is not about 452 00:20:33,200 --> 00:20:35,399 Speaker 8: whether it's a market dynamic or not. The question is 453 00:20:35,680 --> 00:20:38,600 Speaker 8: does the President want to use use this apos Scotus 454 00:20:38,720 --> 00:20:41,200 Speaker 8: ruling as an off ramp in a year where he 455 00:20:41,520 --> 00:20:43,720 Speaker 8: really wants to win the midterms. And you can see 456 00:20:43,760 --> 00:20:46,000 Speaker 8: a lot of the domestic policy announcements that have come 457 00:20:46,080 --> 00:20:48,199 Speaker 8: through from him over the past where you can these 458 00:20:48,240 --> 00:20:51,640 Speaker 8: frenetic headlines have been about affordability in helping the middle class, 459 00:20:51,720 --> 00:20:53,800 Speaker 8: and so would actually a tariff roll back and we've 460 00:20:53,840 --> 00:20:56,280 Speaker 8: already seen some of that, right, whether it's furniture and 461 00:20:56,400 --> 00:20:58,720 Speaker 8: kitchen cabinetry and stuff that was supposed to kick in 462 00:20:58,760 --> 00:21:01,800 Speaker 8: and didn't is all part of a let's called it 463 00:21:01,840 --> 00:21:04,159 Speaker 8: a one year hiatus in order to try and improve 464 00:21:04,200 --> 00:21:07,399 Speaker 8: the affordability dynamic of Americans and then kick the tariff 465 00:21:07,480 --> 00:21:08,199 Speaker 8: narrative back in. 466 00:21:08,800 --> 00:21:11,040 Speaker 3: That's not my view, just to be very sure. I 467 00:21:11,080 --> 00:21:11,600 Speaker 3: think that the. 468 00:21:11,520 --> 00:21:14,320 Speaker 8: President play in the Supreme Court, right. I think the 469 00:21:14,359 --> 00:21:16,720 Speaker 8: President likes tariffs. I think he likes winning. I think 470 00:21:16,720 --> 00:21:19,680 Speaker 8: he likes using it as leverage in part of the 471 00:21:19,720 --> 00:21:23,400 Speaker 8: foreign policy. However, there is a narrative out there that 472 00:21:23,440 --> 00:21:25,360 Speaker 8: there is an off ramp that could present itself. 473 00:21:26,200 --> 00:21:29,760 Speaker 2: This is the Bloomberg Surveillance Podcast, bringing you the best 474 00:21:29,760 --> 00:21:33,080 Speaker 2: in markets, economics, angio politics. You can watch the show 475 00:21:33,160 --> 00:21:36,119 Speaker 2: live on Bloomberg TV weekday mornings from six am to 476 00:21:36,240 --> 00:21:40,000 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify, 477 00:21:40,119 --> 00:21:42,359 Speaker 2: or anywhere else you listen, and as always, on the 478 00:21:42,400 --> 00:21:44,840 Speaker 2: Bloomberg Terminal and the Bloomberg Business app.