Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along
Speaker 1: with Jonathan Farrell and Lisa Abramowitz. Join us each day
Speaker 1: for insight from the best an economics, geopolitics, finance and investment.
Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify, and
Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com,
Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App.
Speaker 2: Joining us now from Washington is Judy Sue, the acting
Speaker 2: US Secretary of Labor, responding to the labor market report
Speaker 2: from about an hour and fifteen minutes ago. Secretary Sue,
Speaker 2: fantastic to catch up with you. Just your first reaction
Speaker 2: to the payrolls report from earlier this morning and whether
Speaker 2: we're seeing broad based strength in this economy or something
Speaker 2: that's showing us things are slimming down.
Speaker 3: Good morning, Jonathan, Thank you very much. This is a
Speaker 3: good job report. It represents steady and stable growth, which
Speaker 3: is what we want. It shows that the president's policies
Speaker 3: bid nomice is working. It's combined with a three point
Speaker 3: six percent unemployment rate. Many predictions were that it would
Speaker 3: not get below four percent right after the pandemic induced
Speaker 3: economic crisis for a long time, and these policies have
Speaker 3: defied that. And in fact, we've seen less than four
Speaker 3: percent unemployment for seventeen consecutive months now, which is the
Speaker 3: longest duration since the nineteen sixties.
Speaker 2: We know we've got a bit of tension out there
Speaker 2: in the labor market at the moment, and you've been
Speaker 2: involved in some of that, so I want to build
Speaker 2: on some of it with you. We have a tentative
Speaker 2: agreement covering West Coast Port workers that's been an issue
Speaker 2: for a while. I know you've had some involvement, so
Speaker 2: congratulations for that. We now have a new issue, so
Speaker 2: let's talk about that one, the potential for three hundred
Speaker 2: thousand UPS workers to go on strike. How involved are
Speaker 2: you in those discussions with the union and UPS?
Speaker 3: Yeah, thank you, Johnathan. Thanks for mentioning the port because
Speaker 3: those parties worked very hard for over a year and
Speaker 3: did reach a tentative agreement recently. It still has to
Speaker 3: be ratified, so the process is not over, but it
Speaker 3: demonstrates that collective bargaining were and that you can reach
Speaker 3: agreements that are as the President often says, good for
Speaker 3: workers where companies can profit, and that's good for the
Speaker 3: economy as a whole, and there remain other negotiations that
Speaker 3: are going on.
Speaker 4: Right.
Speaker 3: That's what it means to be in an economy where
Speaker 3: workers have some power, where unions are at the table
Speaker 3: and we are monitoring the negotiations, but trust that the
Speaker 3: parties are going to do what they.
Speaker 2: Need to do. Have you spoken to ups? Have you
Speaker 2: spoken to the union involved this week?
Speaker 3: Yeah, I've been in touch with both parties. I've also
Speaker 3: just in my role as Acting Secretary, talked to parties
Speaker 3: to these negotiations as well as unions and employers across
Speaker 3: the economy. And so again I'm hopeful and know that
Speaker 3: that they're going to continue to do what they need
Speaker 3: to do and that a fair contract is something that
Speaker 3: everybody hopes that there's there can be win wins, as
Speaker 3: we saw at the Port Cercaly.
Speaker 2: So I've heard that word thrown around quite a lot
Speaker 2: by this administration. This word fair and language is important,
Speaker 2: it's meaningful.
Speaker 4: What would fair be.
Speaker 5: Right?
Speaker 3: So this president has been very clear that fairness and
Speaker 3: equity is very important and that we can build an
Speaker 3: economy to this fair and equitable meaning from the bottom
Speaker 3: up in the middle out right where nobody gets left
Speaker 3: behind where we invest in the middle class. You know,
Speaker 3: Bidenomics is all about investing in America and in particular
Speaker 3: industries like semiconductors and manufacturing and infrastructure, but also investing
Speaker 3: in American workers and also increasing competition to decrease prices.
Speaker 3: All those things are part of what President Biden believes
Speaker 3: is fair and what we believe. This jobs report demonstrates
Speaker 3: that a strong and fair economy can be.
Speaker 2: That's so great, But we have to define what it
Speaker 2: means for ups specifically, and this agreement they're going to
Speaker 2: try and strike with this union, what would a fair
Speaker 2: white increase be? Can you put a number on it?
Speaker 3: Well, I will say the same thing that I said
Speaker 3: when I was out the ports talking to the parties.
Speaker 3: A fair contract is one that the members are going
Speaker 3: to ratify. So a fair contract is something that workers
Speaker 3: choose at the end of the day.
Speaker 4: And again that process.
Speaker 3: Is important for the parties to be able to negotiate,
Speaker 3: to be able to stay at the bargaining table, and
Speaker 3: to be able to resolve issues. And I do believe,
Speaker 3: and as has been shown time and time again, there
Speaker 3: are win win solutions.
Speaker 2: There, don't We have to be careful there though, if
Speaker 2: we start saying things like fair is whatever the union wants, right.
Speaker 3: So I mean at the bargaining table, right, there's all
Speaker 3: kinds of issues that we have seen throughout history that
Speaker 3: when workers can bargain alongside employers who are committed to
Speaker 3: you know, employers who understand that the best investment they
Speaker 3: can make as an investment in their workers. There's all
Speaker 3: kinds of things that can happen when it comes to
Speaker 3: wages and working conditions and benefits. And those are the
Speaker 3: kinds of things we want for every American worker, right.
Speaker 3: We want stable work, we want a path to the
Speaker 3: middle class. We want security and retirement, we want health benefits,
Speaker 3: we want leave. Those are all things that the President
Speaker 3: has prioritized, and I think those are all elements of
Speaker 3: what it means to have a good job.
Speaker 2: There are issues you're working on, Secretary, So I know
Speaker 2: that your nomination hasn't been progressing. So that take you
Speaker 2: from Acting Secretary of Labor to Secretary of Labor. What's
Speaker 2: going on with that? Can you give us some information
Speaker 2: on the timeline you're hoping that this gets out with?
Speaker 3: So the President has expressed great confidence in me. He's
Speaker 3: nominated me to serve as US Labor Secretary. I am
Speaker 3: doing that job. The confirmation question is certainly one for
Speaker 3: the Senate, but I've also appreciated the broad support I've
Speaker 3: had from a number of Senators, and we remain hopeful
Speaker 3: about confirmation. And meanwhile, I am here to do the
Speaker 3: job and do what the President asks, which has helped
Speaker 3: him finish the job. And we're again seeing progress and
Speaker 3: continued growth, and we know we have more work to do,
Speaker 3: and I'm all in to help get that done.
Speaker 2: Do you concern it's holding up the Department's agenda at all?
Speaker 3: No, So the work the Department continues full steam. We
Speaker 3: are you know, we have enforcement work to do to
Speaker 3: ensure that every worker gets the wages that they're owed
Speaker 3: and comes home healthy and safe at the end of
Speaker 3: the day. We are laser focused on connecting employers who
Speaker 3: need workers to the good jobs that are being created
Speaker 3: in the economy to people who are looking for those jobs.
Speaker 3: So that's another big party for us, and those are
Speaker 3: very important and we will continue to do them and
Speaker 3: I'm proud to lead the Department in these efforts.
Speaker 2: Secretly say, we're happy to catch up with you this morning.
Speaker 2: Following the Piro Report. Thanks for being with us.
Speaker 1: Uncertainty is an order and that is a good place
Speaker 1: to start with. Randall Krassner, Randy, the Bloomberg interns have
Speaker 1: invaded the building. I was speaking to a whip smart
Speaker 1: intern yesterday, newly admitted after reading Krosner out of Babson College,
Speaker 1: the Pride of Wellesley, Massachusetts, and that intern he said,
Speaker 1: what should I read? And I said, You've got to
Speaker 1: read Peter Bernstein. It's required at Chicago on risk and uncertainty.
Speaker 1: Tell me right now how uncertain you are about the
Speaker 1: American economy, the American labor economy, this jobs report pandemic.
Speaker 6: I think the uncertainty is pretty high because, you know,
Speaker 6: as you guys were discussing before, it seems like the
Speaker 6: labor markets should have started to slow down a bit,
Speaker 6: but we haven't seen much evidence of that. Certainly, the
Speaker 6: ADP numbers yesterday and other data suggest that the lave
Speaker 6: market's still pretty hot.
Speaker 1: Yeah.
Speaker 6: The long and variable lags is my you know, great
Speaker 6: predecessor at University of Chicago, Treatman, had talked about. But man,
Speaker 6: these are really getting to be very long on lags.
Speaker 6: You start to think, you start to see something by
Speaker 6: Now that's the uncertainty. How high is the FED going
Speaker 6: to have to go? Because the fen's not going to
Speaker 6: quit into the labor market if.
Speaker 1: The FED in the mystery is how high do they
Speaker 1: have to go? Are these normal meetings forward or the
Speaker 1: PhDs the people that worship your financial economics? Do they
Speaker 1: have to amend every discussion? Is they get out to
Speaker 1: November one meets.
Speaker 5: Well?
Speaker 6: I think what they've got to do is try to
Speaker 6: see are there some structural changes in the economy, and
Speaker 6: I think there have been at least some changes, whether
Speaker 6: they're permanent structural or not so sure about probably something structural.
Speaker 6: For the labor market, we certainly see lower labor force participation.
Speaker 6: A lot of older workers have said, there's no way
Speaker 6: I'm going back into the labor market. I don't care
Speaker 6: that wages are high. I know too many people who
Speaker 6: didn't make it through COVID. I want to see my kids,
Speaker 6: my grandkids. We also have seen with the very low
Speaker 6: interest rates during during the pandemic and just coming out
Speaker 6: of it, that everybody refinanced. So normally you have the
Speaker 6: transmission mechanism of monetary policy having an impact on interest
Speaker 6: rates and so having an impact on people's payments and houses,
Speaker 6: et cetera. But so many people refinance into very low
Speaker 6: fixed thirty year mortgages. It doesn't matter as much to
Speaker 6: the economy that interest rates are going up.
Speaker 4: Because people aren't.
Speaker 6: People's income is not being affected by that, or at
Speaker 6: least a smaller fraction of people's income is affected by
Speaker 6: that than normal.
Speaker 2: So, Randy, with that in mind, what's the appropriate role
Speaker 2: of the feder Reserve with that as your backdrop, is
Speaker 2: it to just keep pushing or acknowledge everything you just acknowledged.
Speaker 6: Well, it might mean that they need to go further
Speaker 6: than in the past. Now, I don't think they're going
Speaker 6: to have to go as far as in the late
Speaker 6: seventies early nineteen eighties, because fortunately they started before inflation
Speaker 6: expectations got out of control, because that's what happened back then.
Speaker 4: Inflation was in the load double digits.
Speaker 6: And they had to bring in astrates to fifteen twenty
Speaker 6: percent because the feathered lost credibility. Inflation expectation expectations went out,
Speaker 6: but really not that much.
Speaker 4: So that's a positive.
Speaker 6: But it may need mean that they need to do
Speaker 6: more work in raising rates to get the same impact
Speaker 6: on the economy of sort of slowing taking some of
Speaker 6: the heat, particularly out of the wage demands.
Speaker 2: So, Randy, this debate often comes down to one or
Speaker 2: two hikes. Now twenty five to fifty basis points is
Speaker 2: it's nothing. What kind of numbers are you talking about
Speaker 2: thinking about?
Speaker 6: Well, I certainly I think we'll see what the data
Speaker 6: say about the labor market. Maybe the labor market's about
Speaker 6: to crack. Certainly that they don't suggest it. But if
Speaker 6: it doesn't, they're going to keep at it. And you know,
Speaker 6: I think they're going to.
Speaker 4: End the year.
Speaker 6: Those are the sticks and they will to five.
Speaker 1: Okay, Randy, this is great. We're gonna get a jobs report,
Speaker 1: we're going to talk about all the knobabbel and that.
Speaker 1: But I want to bring it over to finance. I
Speaker 1: want to bring it over to what you actually teach
Speaker 1: at the Booth school. Can you tell the students at
Speaker 1: Booth entering last week of August, whenever it is they
Speaker 1: get through their eight week orientation, can you tell them
Speaker 1: that we've reached financial stability.
Speaker 4: We're not sure.
Speaker 6: So it gets back to the uncertainty that you had
Speaker 6: talked about before, because obviously, with the very rapid increase
Speaker 6: in interest rates. We've had an impact on banks like
Speaker 6: Silicon Valley banks. They thought they were geniuses by buying
Speaker 6: long dated securities. That was fine until just rates went
Speaker 6: up so much that the valuable securities plummeted. And uh,
Speaker 6: You've got some other other institutions that also have a
Speaker 6: lot of effectively long term fixed rate things in their
Speaker 6: talent sheet. Long term is commercial real estate, particularly commercial
Speaker 6: real estate. That's I think going to be a challenge.
Speaker 6: And so we're going to see how that that plays out.
Speaker 6: And I think when we start getting the next round
Speaker 6: of bank earning reports right there may be a little
Speaker 6: bit of tumult around that.
Speaker 1: I mean, I'm not going to miss words, Professor Krausner.
Speaker 1: I look at the stress Trust. The stress tests is
Speaker 1: a comedy. I mean, I just I just don't think
Speaker 1: they had any value at all. But after SVB from
Speaker 1: where you sit, have we seen a new enhanced financial supervision?
Speaker 1: Is there something new in the religion of looking at
Speaker 1: the banks after what we saw a number of weeks ago.
Speaker 6: I think one thing that they are now focusing on
Speaker 6: is interest rate risk. So other signatories to the so
Speaker 6: called Basil three regulations the capital standards that came out
Speaker 6: from from the financial crisis. Virtually everybody has an important
Speaker 6: rule related to interest rates and interest rate risk. We
Speaker 6: didn't have that in the US, and so I think
Speaker 6: that's going to be the key thing that changes. And
Speaker 6: my hunches at my former colleagues at the FED and
Speaker 6: the other regulators are keenly focused on that issue now
Speaker 6: and they weren't before.
Speaker 2: Randy Steiklaus jobs repul seven minutes to why we'll catch
Speaker 2: up with Randy christ went just a moment to get
Speaker 2: his reaction to that.
Speaker 1: We're going to see some bond market movement. Here is
Speaker 1: we digest this data? Joining us on Lindsay Pigs, a
Speaker 1: chief economist at Stefel as well, and to me, it's
Speaker 1: a hallmark announcement. Lindsay, with the revisions, let me go
Speaker 1: through the math again, it's simple to Eldra can handle this, Lindsay.
Speaker 1: I can't do the differentuential equations like you, and that
Speaker 1: is two hundred and nine thousand, take away one hundred
Speaker 1: and ten thousand. Can you frame this out with the revisions?
Speaker 1: Is a sub one hundred thousand report?
Speaker 7: Well, I do think it fell well short of expectations,
Speaker 7: but that being said, it's still a solid headline number,
Speaker 7: and for the FED, the focus is not that top
Speaker 7: line non farm pail WORL report. They're looking at the details.
Speaker 7: They're looking at the inflationary components, and with the unemployment
Speaker 7: rate declining, wage growth gaining momentum. This is the exact
Speaker 7: opposite of what the FED wanted to see. This keeps
Speaker 7: the FED on the path for an additional rate increase
Speaker 7: later this month, and depending on what we see from
Speaker 7: the inflation data next week, we could see another rate
Speaker 7: increase shortly thereafter.
Speaker 1: Our audiences on radio and television are saying, wait, wage
Speaker 1: growth four point four percent, take away five or six
Speaker 1: percent inflation, depending on whether I'm buying stake this weekend,
Speaker 1: And the answer is they're not getting ahead. Which nominal
Speaker 1: wage growth does a FED need to see? Three point
Speaker 1: five percent? Dare I say two point nine percent? How
Speaker 1: low do we have to bring down wage growth?
Speaker 7: I think? I think if we saw a two handle,
Speaker 7: the FED would be very comfortable with that. I think
Speaker 7: that would give the FED confidence that we're on a
Speaker 7: sustainable downward trajectory. That's what the FED wants to see.
Speaker 7: It's not about getting inflation under control from eight down
Speaker 7: to six. It's continuing that trajectory back to that two
Speaker 7: percent time, giving.
Speaker 1: The access that on a two point nine percent nominal
Speaker 1: wage growth, we're distant from that.
Speaker 4: Aren't we?
Speaker 7: Absolutely? Absolutely, And one of the biggest fears for the
Speaker 7: FED is that wages are continuing to rise. Growth is
Speaker 7: continuing to accelerate without any improvements in productivity, and so
Speaker 7: there we start to see this wage price spiral leaving
Speaker 7: the economy behind. Growth is slowing, we know that, but
Speaker 7: if underlying wage components continue to increase, what is the
Speaker 7: economy gaining from that? It goes back to the old
Speaker 7: adage of we could hire a million workers to make windows,
Speaker 7: a million workers to break windows. If the supply of
Speaker 7: labor falls short of that, wages go up, but we're
Speaker 7: not adding anything to the economy.
Speaker 1: Want to make clear, we've really got of flightiness on
Speaker 1: the data screen as well. Right now red and green
Speaker 1: in the screen features a negative eight Nasdaq barely to
Speaker 1: the green side.
Speaker 5: As well.
Speaker 1: In the yield space, there is some movement four point
Speaker 1: ninety six percent of the two year the ten year
Speaker 1: yield four point zero four percent. These are all new
Speaker 1: numbers for me. They're really a shock to see in
Speaker 1: this high four point zero one percent as well, how
Speaker 1: many quarters of you know, as you say, two oh
Speaker 1: nine is still a substantial non firm payrolls number. But
Speaker 1: if we developed a three month moving average of one
Speaker 1: hundred and ninety thousand, my reading is that doesn't get
Speaker 1: it done for the FED.
Speaker 3: Well, there's still.
Speaker 7: Got to sustain where wages. At that point, we.
Speaker 1: Have to see inge everything on wages.
Speaker 7: Well, inflation wages, that's one component of inflation, but we
Speaker 7: need to get that under control. We need to see
Speaker 7: some of that tight labor market conditions ease so that
Speaker 7: the FED feels more confident that wages will begin to ease.
Speaker 7: Now that doesn't mean that they're going to tackle overall
Speaker 7: inflation then, just by getting the labor market to to
Speaker 7: become less tight. There's other components of inflation, but that's
Speaker 7: the component that the Fed mean control. That will determine
Speaker 7: the terminal level. The other components of inflation will determine
Speaker 7: how long the FED is forced to maintain that elevated
Speaker 7: level of rating.
Speaker 1: Give us a steephul granularity of what mister McKee talked about,
Speaker 1: which is a racial makeup of jobs. You saw some
Speaker 1: higher unemployment, some jumps in unemployment among minorities, and also
Speaker 1: on the education basis as well. The stereotype within financial
Speaker 1: media is we have a lot of service sector bartenders
Speaker 1: and waitresses still being employed. Biat s are a different
Speaker 1: story here.
Speaker 7: Well, I think there's two different storylines. Certainly when we
Speaker 7: look at where the most unemployment is gaining momentum, that's
Speaker 7: at the lower skills level. We're starting to see technology
Speaker 7: replace those lower skills. This was something that was happening
Speaker 7: before the pandemic, but this is a trend that has
Speaker 7: certainly been exacerbated more recently. But I also think that
Speaker 7: we haven't yet seen that cyclical component suggesting that weakness
Speaker 7: is lurking around the corner just yet. As we heard
Speaker 7: about leisure and hospitality still posting a sizable increase this month,
Speaker 7: that would be assumed to be the one area where
Speaker 7: we would start to see that weakness gain credibility gain evidence,
Speaker 7: but we haven't seen that quite yet.
Speaker 1: Is it still a pandemic tinged report?
Speaker 7: I don't know if we can necessarily say that the
Speaker 7: pandemic is influencing this report, but I think the aftermath
Speaker 7: of the pandemic, the change in psychology is impacting this
Speaker 7: report because we're still seeing millions of workers sitting on
Speaker 7: the sideline, not actively participating as we would expect in
Speaker 7: the traditional manner in the labor force. So we do
Speaker 7: need to still think about providing an incentive to pull
Speaker 7: some of those sideline workers in. That may help to
Speaker 7: expand the labor supply and then organically reduce wages. But
Speaker 7: we're not going to see that downward pressure unless we
Speaker 7: see demand for labor precipitous decline or the supply of
Speaker 7: workers dramatically increased.
Speaker 1: We do you, Thank you so much, Lindsay from Steford.
Speaker 2: We can catch up with Christian Horner, the team principal
Speaker 2: for Red Bull Racing. Christian, wonderful to catch up with you, sir.
Speaker 2: Going into race weekend in Silverston. Can we start there?
Speaker 2: As my colleague Tom pointed out, just how special is
Speaker 2: this race, this circuit for you and the team.
Speaker 4: Well, look, it's one of the best circuits on the tour.
Speaker 5: It's fast, it's demanding, it's source of men out from
Speaker 5: the boys, it's a big challenge, and it's it's old school.
Speaker 4: I mean, this track goes back.
Speaker 5: To just after the Second World War, so an old
Speaker 5: airfield with a brims of road converted into a racing
Speaker 5: circuit that has developed over the years, but.
Speaker 4: It's one of the big tests for the drivers and
Speaker 4: the teams.
Speaker 2: Max was absolutely dominant last weekend. There was this amazing
Speaker 2: moment at the end of the with a couple of
Speaker 2: laps to go, he came in for a pit stop
Speaker 2: just to get the quickest lap. Christin, can you describe
Speaker 2: the guy that you're working with every single day? How
Speaker 2: special is Max Verstappen.
Speaker 4: I think what we're.
Speaker 5: Witnessing at the moment is a sportsman that's just a
Speaker 5: really at the top of his game, and you know,
Speaker 5: he's a joy to work with, and he continues to
Speaker 5: surprise us with the levels that he's that he's reaching,
Speaker 5: and you know the hype that he's hitting.
Speaker 4: So yeah, as I.
Speaker 5: Say, nothing is, nothing is, he continues just to continue
Speaker 5: to surprise us at the moment.
Speaker 4: But he's in the form of his life and I
Speaker 4: think there's more to come.
Speaker 1: Christian, I think Americans are fascinated by this. I look
Speaker 1: at the wonderful coverage Sky Sports is doing and basically
Speaker 1: they forget about vers step and five minutes into the race,
Speaker 1: to look at all the Netflix sub races and all
Speaker 1: that baloney. We have an America, a guy for the
Speaker 1: Los Angeles Angels in baseball name O Tony, who's once
Speaker 1: in a generation, is for stepping like that.
Speaker 4: I think, Look, we're in a healthy period of Formula one.
Speaker 5: We've got Lewis Hamilton, the most successful driver of all
Speaker 5: time out there. We've got Fernando Orlonzo that's doing it
Speaker 5: for the old guys. And you know, we've got this
Speaker 5: emergence of Max the staff, and I think only in
Speaker 5: time will history judge just how good he is. But
Speaker 5: what we're seeing at the moment is certainly something pretty special,
Speaker 5: particularly with the rot results that he's ratcheting up.
Speaker 2: Christian, talk to me about how, from a manager's perspective,
Speaker 2: you maintain harmony within the team. When he took that
Speaker 2: point for the quickest lap last weekend, that was taken
Speaker 2: away from Checko, his teammate within Red Bull, Christian, can
Speaker 2: you tell me as a manager how you're maintaining the
Speaker 2: harmony when you have to provide the resources for someone
Speaker 2: who's dominant Max and maintain the confidence of his teammate.
Speaker 4: Well, I think he's just.
Speaker 5: Dealing with openness and honesty, and I think got Max
Speaker 5: uh deserved or urged himself the opportunity to have a
Speaker 5: go at that fastest lab.
Speaker 4: He created a pitstof for himself.
Speaker 5: He was going to have a go at it on
Speaker 5: the on al tars and for us it's actually less
Speaker 5: risk to put him on a set of newer tars and.
Speaker 4: Take the PIDs stop. So yeah, he earns himself that right.
Speaker 5: And I think the relationship between the two guys is
Speaker 5: is strong and the most important thing is that they
Speaker 5: talk to each other. They communicate. When there's an issue,
Speaker 5: they talk about it. We get it on the table
Speaker 5: and and get it addressed.
Speaker 2: Can we expect check Out to be racing for red
Speaker 2: Bull next year?
Speaker 4: Then Christian, Yeah, he's got a contract.
Speaker 5: He's with us till you know, till the end of
Speaker 5: twenty four so and we're happy other than atother contract,
Speaker 5: we're happy with you know, the overall performance of him.
Speaker 5: He's had some difficult Saturdays recently, but his racing has
Speaker 5: been great and hopefully the confidence from that podium in
Speaker 5: Austria is going to put him, you know, back on
Speaker 5: the pace here on Saturday.
Speaker 2: Let's talk about someone else on the grid who's unhappy.
Speaker 2: Lewis Hamilton unhappy with the dominance of Red Bull. Unsurprisingly Christian,
Speaker 2: he's had some recommendations on what they can do about that.
Speaker 2: Maybe we can set a time limit for when we
Speaker 2: start to plan for next year's race. Car Chris, and
Speaker 2: what's your response to people who were fed up with
Speaker 2: the dominance of your team.
Speaker 5: Well, look, it's flat threading in many respects. The sport
Speaker 5: goes in cycles. I mean Mercedes, I mean how many
Speaker 5: years did they dominate and nobody got.
Speaker 4: Anywhere near seeing them for about seven years.
Speaker 5: So we're we're performing at an incredibly high level.
Speaker 4: The team is doing his job and.
Speaker 5: The others you know, will be putting a target on
Speaker 5: us and they'll be trying to catch.
Speaker 4: And I think.
Speaker 5: With stability of the rules that the field is going
Speaker 5: to converge. It's onny a matter of times. So and
Speaker 5: so yeah, I think trying to get everybody to start
Speaker 5: to design their car at you know, a start, they
Speaker 5: would would just be impossible to manage and police.
Speaker 1: Christian, our producer, are the guy that tells us what
Speaker 1: to do every day. Grew up in Western Australia. So
Speaker 1: he says, we're not doing the interview, if we don't
Speaker 1: talk about your third driver, Daniel Riccardo. I think the
Speaker 1: people looking at Daniel Riccardo in America are saying, what
Speaker 1: does this guy do? Do you do you want to
Speaker 1: retain a third driver like Daniel Ricardo or is it
Speaker 1: a good feeling for Red Bull if he goes off
Speaker 1: to someone else's is rumored.
Speaker 5: Well, I gave him that chance because I I thought
Speaker 5: Formula one still needed Daniel and I think that he's.
Speaker 4: Still got more to give. We know how talented he is.
Speaker 5: He just needs to rediscover his form and his mojo,
Speaker 5: which he seems to be doing certainly in a virtual world.
Speaker 4: And he's testing our car in the real world.
Speaker 5: On Tuesday and Wednesday of next week, and you know,
Speaker 5: we'll start to see where he's at in relation to
Speaker 5: the race drivers.
Speaker 4: So it'd be great to.
Speaker 5: See Daniel back on the grid next year, even if
Speaker 5: he's not in a repel car.
Speaker 1: Christian a sensitive issue which we see in the danger
Speaker 1: of Formula one and all the safety efforts that are made.
Speaker 1: There have been two really difficult deaths in Formula one,
Speaker 1: including a tragedy recently, I believe in Belgium. What do
Speaker 1: you do day to day, tick by tick to make
Speaker 1: the sports safer. What's the next thing to make it safer?
Speaker 5: Well, look, I think the FIA do a great job
Speaker 5: in terms of the safety of these cars.
Speaker 4: It's just you know, compared to where they were just
Speaker 4: even a few years ago.
Speaker 5: If you look at Roman Grossan's accident in Bahrain, thing
Speaker 5: that a human could actually survive that.
Speaker 4: Is is beyond belief. But you know, you can always
Speaker 4: do more, and.
Speaker 5: The FIA are constantly pushing us, you know, with the cars,
Speaker 5: but also now the circuits. I think they you know,
Speaker 5: there's circuits that we need to look at because we
Speaker 5: can only take the car so far. But you know,
Speaker 5: I think still more that we can do as a
Speaker 5: collective with the FIA.
Speaker 1: On certain circuits there seem to be I mean I
Speaker 1: was barefoled last week watching every minute of it and
Speaker 1: and really, you know what your team did, and I
Speaker 1: look at I guess it's called the stewards where the
Speaker 1: track isn't working out and people are going off the
Speaker 1: track and there's twelve hundred violations. I mean, we don't
Speaker 1: see that in American sport. Are we going to see
Speaker 1: that again? It's Ulverstone where the quality of the driving
Speaker 1: is so good that the track doesn't fit the excellence
Speaker 1: of the drivers.
Speaker 4: Yeah, hopefully not.
Speaker 5: I mean I think that was something that needs to
Speaker 5: be addressed moving forward. I think the problem is is
Speaker 5: and it was, you know, two corners that are inviting
Speaker 5: the drivers to go out there, and of course they
Speaker 5: can't see the lines.
Speaker 4: They're driving by feeling. I think that if there.
Speaker 5: Was a piece of gravel strip there or you know,
Speaker 5: something like that, they wouldn't.
Speaker 4: Go near it. If there was a wall where they
Speaker 4: certainly wouldn't go.
Speaker 5: So yeah, I think that there's things that can be
Speaker 5: done to, you know, to improve the situation. Hopefully it
Speaker 5: won't be an issue here, but you've got to stay
Speaker 5: in the lines.
Speaker 2: I do want to finish on safety and the track. Christian,
Speaker 2: there are some worries that maybe we have some protests,
Speaker 2: the climate change protesters that we've seen protests various sports
Speaker 2: in the UK over the last few years. You're concerned
Speaker 2: about that over the weekend. What have your conversations been
Speaker 2: with the FIA over the last couple of days and
Speaker 2: your own drivers going into the weekends with regards to that, Well, look,
Speaker 2: it is a.
Speaker 4: Big concern because you run on a cricket page, sure.
Speaker 5: At tennis court, you know there's only a there's only
Speaker 5: a batner ball out there. You run on a Formula
Speaker 5: one track, you know there's twenty cars going around, the
Speaker 5: speeds are closer to two hundred miles an hour, and
Speaker 5: from a safety point of view, it is unimaginable or
Speaker 5: unthinkable that people would put themselves into and the drivers
Speaker 5: at such risk. So I really hope that you know,
Speaker 5: nobody does anything stupid this weekend. You know, Formula One
Speaker 5: is taking sustainability and is pushing that message and driving
Speaker 5: with fully sustainable fuels that we have coming from twenty
Speaker 5: twenty six. We're doing more than any other industry to
Speaker 5: champion that, and I'd be really disappointed to see, you know,
Speaker 5: somebody try.
Speaker 4: And upset what is going to be probably one.
Speaker 5: Of the biggest events sporting events on the British calendar
Speaker 5: this year.
Speaker 2: Christian, I've loved our conversations. We've loved our conversations. Let's
Speaker 2: continue them. Luck for the race weekend. As a Ferrari fan,
Speaker 2: you know that I don't quite mean that, but good.
Speaker 4: Luck, good luck, I mean it. This weekend of Red
Speaker 4: Bull Racing.
Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and
Speaker 1: anywhere else you get your podcasts. Listen live every weekday,
Speaker 1: starting at seven am Eastern. I'm Bloomberg dot com, the
Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You
Speaker 1: can watch us live on Bloomberg Television and always I'm
Speaker 1: the Bloomberg Terminal. Thanks for listening. I'm Tom Keen, and
Speaker 1: this is Bloomberg