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Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane.

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Speaker 1: Daily we bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Martin

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Speaker 1: Secker joins us head of all of our content and

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Speaker 1: of course, uh running all of our Washington operation for years,

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Speaker 1: and Nick Wadhams joins us in Washington in the blur

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Speaker 1: of the day, Nick, I want to drive right down

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Speaker 1: to task one, which is Mike Pompeo. Is he going

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Speaker 1: to be different than Rex Tillerson and getting us to

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Speaker 1: an operational, functional State Department or the will the President

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Speaker 1: block that effort? I mean, you know, I think he

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Speaker 1: his foreign policy views are generally much more in line

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Speaker 1: with the President Trump's, so much more hard line. I

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Speaker 1: think Secretary Tillerson did have a foreign policy outlook that

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Speaker 1: was much more conventional and sort of in line with

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Speaker 1: what we would have thought of the more republican, moderate

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Speaker 1: republican administration in the past. Uh that had led to

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Speaker 1: a sort of war between the Secretary Tillerson and the

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Speaker 1: White House where uh, there we was there was a

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Speaker 1: lot of sparring over nominees for posts. That was one

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Speaker 1: of the big reasons why, uh, these slots were not

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Speaker 1: getting filled. He was objecting to some of the President

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Speaker 1: Trump's nominees for posts. The Trump White House was objecting

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Speaker 1: to his positions, so usually had this sort of deadlock

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Speaker 1: over these nominees. Well, just thirty five days ago, or

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Speaker 1: excuse me, forty five days ago, Thomas Shannon left the

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Speaker 1: State Department is under Secretary of State for Political Affairs.

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Speaker 1: That's just one example of people leaving the door. When

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Speaker 1: does the hemorrhagen stop? Nick, Well, I don't think this

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Speaker 1: is something that is going to end with Mike Pompeo.

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Speaker 1: If anything, it will only hasten it. Um Uh. There's

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Speaker 1: a lot of criticism of recky Dollerson, but actually when

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Speaker 1: you look at his foreign policy prescriptions, they were fairly

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Speaker 1: standarded in line with past administrations. If anything, Mike Pompeo

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Speaker 1: will be even more harder to the right and and

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Speaker 1: will alienate this building even more. Those those these these

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Speaker 1: people tend to be sort of cautious and careful um

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Speaker 1: and orthodox and their prescriptions. So when you put in

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Speaker 1: someone like Mike Pompeo. They're going to have allergic reaction

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Speaker 1: to him. Marta Shanka, I want you to come in

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Speaker 1: on this and tell us your thoughts. But specifically, does

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Speaker 1: this have anything to do with the ongoing or non

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Speaker 1: ongoing relationship that the United States has with Russia. I

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Speaker 1: note that that Retch to Listen yesterday was quoted as

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Speaker 1: saying that the United States has tried to work more

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Speaker 1: diligently and more carefully with the Russians on a variety

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Speaker 1: of issues, but said that the Russians have taken it

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Speaker 1: upon themselves to us. He says, pivot, Uh in a

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Speaker 1: more hardline direction. You know, to me, that's one of

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Speaker 1: the more fascinating things. And Nick and chime in on

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Speaker 1: this is just what Mike Pompeo thinks about the Russian

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Speaker 1: interference in the two thousand and sixteen election. The CIA

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Speaker 1: has a central role in looking at that issue. Um.

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Speaker 1: Does his political alignment with Donald Trump preclude him from

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Speaker 1: being outspoken about the Russians meddling in the election? Or

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Speaker 1: does he speak the truth to the president? Uh? That

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Speaker 1: will be something that will be fascinating and it will

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Speaker 1: come out in his confirmation hearing. UM, I would suspect

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Speaker 1: he would get confirmed. But they're going to be some

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Speaker 1: hard questions asked at that at that hearing when it

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Speaker 1: had when it happens, Marty are they're hard questions to

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Speaker 1: be asked about the actual role of the State Department

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Speaker 1: no matter who is in charge, because, I mean, there

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Speaker 1: has been money allocated for the State Department that is

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Speaker 1: yet to be spent. There are a variety of ambassadorial

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Speaker 1: posts that have been vacant and have not received any

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Speaker 1: specific appointments. Is there a philosophical issue of about how

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Speaker 1: the president views the State Department and its use for

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Speaker 1: peign policy. Well, traditionally state departments have been really run

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Speaker 1: out of the White House. I mean it's the President

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Speaker 1: of the United States who sets policy and directs the

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Speaker 1: state head of state to actually execute it. One of

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Speaker 1: those things that Rex Tillerson did, which was very controversial,

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Speaker 1: is a strict adherence to budget restraints and a lot

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Speaker 1: of the lack of people in those posts was a

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Speaker 1: philosophical issue that we didn't need to Now the question

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Speaker 1: is does Mike Pompeo take the same approach and then

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Speaker 1: Nick Adams, for example, to your coverage of former Secretary

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Speaker 1: of State Tillerson in Chad the other day. How alone

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Speaker 1: is he out there compared to Secretary carry traveling three

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Speaker 1: and four and five years ago. Oh, I mean, this

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Speaker 1: is fascinating. We literally just ended that trip to Africa

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Speaker 1: about four hours ago. We got back about five am

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Speaker 1: from Nigeria, and on the plane with us he did

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Speaker 1: when he obviously knew what was going on. He didn't

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Speaker 1: give any indication of it to us at the time,

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Speaker 1: but he did have this very rare moment where he

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Speaker 1: spoke with us on the record in the back of

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Speaker 1: the plane, which he had not traditionally done, very harsh

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Speaker 1: words for Russia, which was in dissonance with with the administration.

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Speaker 1: H a lot of confidence, he said, he was very

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Speaker 1: confident in himself and his own abilities. Um, when we

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Speaker 1: asked him about the possibility of negotiations with Kim jongun,

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Speaker 1: and then you see this over and over, this dissonance

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Speaker 1: with the administration in Chad. He said, Chattians are welcome

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Speaker 1: in the United States. Whether it was the administration that

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Speaker 1: had imposed this travel panactual reporting and he's in the

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Speaker 1: back of the plane coming back from Nigeria. Would you

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Speaker 1: suggest that the secret of the former Secretary of State

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Speaker 1: in his interview with you and other reporters on that airplane,

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Speaker 1: supported the President's efforts with Mr Kim and North Korea. Yes,

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Speaker 1: there's there's no question that he did. But he was

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Speaker 1: clearly blindsided by the President's decision to accept the meeting

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Speaker 1: with Kim Jong hun on on spur of the moment.

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Speaker 1: I mean, this goes against everything Rex Tillerson believes in,

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Speaker 1: which is deliberation, process, doing things right, making sure you

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Speaker 1: have all the bases covered before you go into a meeting.

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Speaker 1: So he was not surprised by the president's decision to

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Speaker 1: meet with Kim Jong un. He was very surprised by

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Speaker 1: the President's decision to say, yes, let's just do this meeting,

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Speaker 1: uh quickly without the proper preparation. She's just joining us worldwide.

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Speaker 1: Pim Fox and Tom King with our foreign policy reporter,

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Speaker 1: State Department reporter, Nick Waddams, and Martin Schenker with us

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Speaker 1: of course running all of our Washington shop and now

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Speaker 1: head of all of content for Bloomberg News. Marty a

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Speaker 1: question for Mr Wadhons just off the plane. Yeah, Nick,

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Speaker 1: What's interesting to me is that you're convinced that Rex

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Speaker 1: Tillison absolutely knew what was going on? What makes you

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Speaker 1: think that that's so? I mean, this president sometimes keeps

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Speaker 1: his own counsel, even on things like this. Uh. Two reasons. One,

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Speaker 1: on the plane, he he cut this trip short by

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Speaker 1: a day, which struck us as extremely odd. You're on

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Speaker 1: a five nations trip to Africa. Why come home only

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Speaker 1: one day early? If you're gonna cut it short, you

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Speaker 1: know why. He he also had he was ill at

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Speaker 1: one point in Nairobi, so he spent the entire day off.

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Speaker 1: That struck us as odd. He basically had no appointments

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Speaker 1: on on that one day. Um. He also said that

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Speaker 1: he got a call on Friday morning. He had gotten

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Speaker 1: a call on Thursday about North Korea that kept him

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Speaker 1: up all night. Then he said, I got another call

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Speaker 1: on Friday and I asked him specifically what was that

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Speaker 1: call about, and he said, I can't tell you about

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Speaker 1: that yet. But so clearly there was a lot going on.

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Speaker 1: This is critical. Nick Wadhams, have you seen a change

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Speaker 1: behavior in the former Secretary of State over the last

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Speaker 1: week or so on this trip to Africa? Well, interestingly,

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Speaker 1: the changing behavior I think was the fact that he

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Speaker 1: was more willing to speak to us generally he's been

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Speaker 1: quite cautious and uh not very outspoken. He would rarely

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Speaker 1: do on the record uh interviews with us in the

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Speaker 1: back of the plane. This time he did, and he

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Speaker 1: was very forth right, particularly in his condemnation of Russia. UM.

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Speaker 1: And then, you know, just looking back and piecing some

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Speaker 1: of these things together, it is interesting that he obviously canceled,

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Speaker 1: he cuts the trip short, which struck us all as odd.

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Speaker 1: He had this day where he didn't emerge from his

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Speaker 1: hotel room. They said he was ill, which you know,

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Speaker 1: obviously in Africa is entirely possible. But when you look

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Speaker 1: back and sort of connect the dots like that, it

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Speaker 1: does seem that there was a level of sort of

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Speaker 1: strain and chaos about this trip. You know, there's also

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Speaker 1: this fascinating moment where he basically took the entire afternoon

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Speaker 1: off on Sunday to do a game drive with his

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Speaker 1: staff in that Roby National Park, UM, which you know,

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Speaker 1: for Secretary Kerry had done something similar when he was

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Speaker 1: when he was on the job. To do it for

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Speaker 1: so many hours on a trip like that, it's just interesting.

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Speaker 1: You know, another sort of data point, uh, Nick, just

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Speaker 1: quickly give you about thirty seconds here. Gina haspell named

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Speaker 1: to become the head of the Central Intelligence Agency. As

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Speaker 1: Mike Pompeo looks to the next Secretary of State, tell

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Speaker 1: us about the challenges that she faces. Well, I mean again,

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Speaker 1: you're gonna have this issue of the intelligence community colliding

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Speaker 1: against the Trump administration. Mike Pompeo has been adamant that

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Speaker 1: he has not shaded intelligence at all to fit what

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Speaker 1: President Trump wants. But there's a huge war going on

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Speaker 1: over the exact role that Russia played, you know, obviously

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Speaker 1: in the middle of the US elections, and the role

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Speaker 1: it continues to play. She's going to be under a

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Speaker 1: lot of pressure from both sides, the intelligence community and

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Speaker 1: the administration to get this right. Fascinating. Nik Wadhams greatly

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Speaker 1: appreciate your travels for Bloomberg News, and of course this

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Speaker 1: reporting from the plane was Secretary Tillerson over the last

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Speaker 1: few days. Mr Wadhams is our foreign policy reporter in Washington.

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Speaker 1: We think Martin Schenker as well, particularly Marty pointing out

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Speaker 1: the hearings that are to come with the new Secretary

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Speaker 1: of State. Mr Pompeio wanted to bring you now a

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Speaker 1: gentleman that we opened the year with with his top

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Speaker 1: Rists of the Year, Ian Bremer of Eurasia Group. Dr Bremer,

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Speaker 1: thank you for making time with us today. Frankly, this

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Speaker 1: instability within six Pennsylvania Avenue and the administration was one

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Speaker 1: of your risks this year. We're not surprised, though, are we.

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Speaker 1: Uh No, And let's keep in mind that you know

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Speaker 1: the initial firings, which you know are at an unprecedented level. Uh.

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Speaker 1: Senior posts worried about something like almost double that we've

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Speaker 1: seen any any modern day administration in the first year.

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Speaker 1: But most of those that were forced out early were

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Speaker 1: people that really were not competent to govern needed to

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Speaker 1: be out. We're problematic for a bunch of reasons. Most

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Speaker 1: recently the Gary Cone and now Rex Tillerson removals are

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Speaker 1: actually very different. These are people that are clearly very competent,

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Speaker 1: lots of experience, Uh maybe maybe not the best fits

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Speaker 1: for the administration for lots of reasons, and certainly king

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Speaker 1: with their own problems, but will make it harder to

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Speaker 1: do them. Ian, do you just assume that Secretary of

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Speaker 1: State Pompeo, if he's more aligned with President Trump, will

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Speaker 1: have a State Department that is ever more empty than

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Speaker 1: the one that Secretary of State Tillerson enjoyed. No, I

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Speaker 1: wouldn't assume that. I mean tell us it was truly

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Speaker 1: loathed by the diplomats. Uh. He kept his own counsel,

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Speaker 1: a very small basically kitchen cabinet within State, and people

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Speaker 1: he brought over from his days at X on Mobile. Uh,

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Speaker 1: there was enormous Uh. You know, I had to do

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Speaker 1: with more of his management style, and I suspect Pompeo

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Speaker 1: is not going to do much force might do a

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Speaker 1: little better on that front and on the people around

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Speaker 1: him immediately around him issue. The issue had much more

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Speaker 1: to do with the actual policies, to listen, has a

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Speaker 1: lot of experience dealing with difficult leaders all over the world. Um,

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Speaker 1: he had been a moderating force and a fairly independent

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Speaker 1: force on trade, on trade with China, on North Korean negotiations,

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Speaker 1: on the Iran deal, on Russia. Pompeo will be none

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Speaker 1: of those things. Will be you geological hawkus and much

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Speaker 1: willing to do whatever Trump wants. Here the bell there

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Speaker 1: markets open up a hundred and zero five Ian bremer Ian.

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Speaker 1: If I know Pim Fox wants to jump in here,

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Speaker 1: if I can play off your new book, US versus Them,

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Speaker 1: the failure of globalism, US versus them, the failure of

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Speaker 1: our foreign policy. What does Secretary of State Pompeio need

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Speaker 1: to fix day one? Uh, He's not gonna fix anything

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Speaker 1: they want. That's not why he's being brought in. I mean,

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Speaker 1: you know, you now have a president that is saying

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Speaker 1: he's going to meet with Kim Jong run um and

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Speaker 1: wants to play nice if that works, but if he doesn't,

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Speaker 1: he's prepared to become a hard line. Pompeo, I think,

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Speaker 1: doubles down on that message. You have an Iran deal,

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Speaker 1: the Trump says he wants it better or he wants

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Speaker 1: to break it. By May, Pompeo doubles down on that.

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Speaker 1: He creates a much more binary set of outcomes that

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Speaker 1: either the US gets it the way we want on

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Speaker 1: all of these issues, or you're going to see a

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Speaker 1: considerably more hawkish policy. Um. Trump might consider that fixed

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Speaker 1: in the sense that it's more of what Trump wants,

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Speaker 1: but it's much more dangerous world it's and it's more

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Speaker 1: volatile for the market. And just a little bit more

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Speaker 1: on Mike Pompeo graduated first in his class at West Point.

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Speaker 1: His law degree at Harvard and was a congressman from Kansas.

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Speaker 1: He also desires regime change in North Korea. What's his

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Speaker 1: position going to be as the President prepares for his

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Speaker 1: historic meeting with Kim Jong Long of North Korea? Well, again,

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Speaker 1: I mean, I think if you're Pumpel in this environment,

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Speaker 1: you know the reason you're being brought in is to

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Speaker 1: tell Trump that you're right about everything. So it's much

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Speaker 1: more like Lightheiser as US trade representatives. It's hearing what

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Speaker 1: Trump wants and figuring out a way to deliver that

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Speaker 1: message to others and get it back to the Boss.

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Speaker 1: So you're never gonna see him making statements on television

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Speaker 1: which you're not aligned with Trump. He'll be much more

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Speaker 1: like Minute And in that regard and on and because

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Speaker 1: we're gonna be talking a lot about North Korea going forward,

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Speaker 1: he's gonna be a hot He's gonna be one saying

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Speaker 1: um that if we don't see a path or deuterization,

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Speaker 1: the military option is on the table. You never hate

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Speaker 1: that he's gonna be one talking about maximum sanctions and

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Speaker 1: pressure until we get something from Kim Jong lend he

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Speaker 1: makes it more likely that the North Koreans offer something substantive,

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Speaker 1: but he also makes it more likely the talks breakdown

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Speaker 1: or even never happen. What has been his role at

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Speaker 1: the at the Central Intelligence Agency? Has it changed under

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Speaker 1: the direction of Mr Pompeo. Uh, you know, I think

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Speaker 1: that it's been pretty aggressive in terms of counter terrorism efforts. UH.

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Speaker 1: Certainly support for an expanded US presents internationally in places

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Speaker 1: where we're going with bad actors. UM. You've seen that

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Speaker 1: in American support for the saudiast on Yemen. Pompeo has

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Speaker 1: played a significant role there. A lot of people say

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Speaker 1: that to war the Americans shouldn't be involved in. I

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Speaker 1: think Pompeo's position is these are bad guys. They need

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Speaker 1: to take military and intelligence efforts everything we can. We

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Speaker 1: need to hit them hard. Also, Pompeo's replacement in c

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Speaker 1: i A UH was in charge of one of the

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Speaker 1: most important black side CIA operated UM, you know, with

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Speaker 1: lots of enhanced interrogation techniques. Again, what you're seeing is

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Speaker 1: a move towards a more focus, more certaive American foreign policy,

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Speaker 1: but more in the lateral as well. Well. In that context,

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Speaker 1: Mike Pompeo was in charge of the Counterintelligence Mission Center.

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Speaker 1: I believe right. This is at the CIA, and that's

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Speaker 1: the department which began the investigation into possible links between

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Speaker 1: associates of Donald Trump and Russian officials. Yeah, I mean,

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Speaker 1: I get. I think that what we're gonna see on

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Speaker 1: Russia is very interesting to watch. That Trump removed Tillerson.

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Speaker 1: By the last thing we heard from Tillison were a

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Speaker 1: couple of very strong statements that the United States fully

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Speaker 1: supported um Theresa May uh in the belief that the

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Speaker 1: Russians were behind these nerve agent attacks against British nationals,

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Speaker 1: that the Americans would support action against Russia. UM. Pillison's

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Speaker 1: also supported sanctions against Russia expanding Uh. The White House

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Speaker 1: has absolutely refused to mention the Russians explicit regists. I

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Speaker 1: think that Pompeo will know way took a hard wine

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Speaker 1: on Moscow unless we see a shift from Trump going forward. Um.

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Speaker 1: That's it's very clear we're going to see no daylight

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Speaker 1: between these two. Well, can you tell us about his

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Speaker 1: relationship with James Madis, Secretary of Defense and specifically the

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Speaker 1: military's awareness of climate change as a as a threat

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Speaker 1: to US security. That doesn't seem to be consistent with

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Speaker 1: Mr Pompeo's views, it's not. But having said that, Madis's

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Speaker 1: views have not been consistent with much of the Trump

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Speaker 1: in the race. And Madis been very good at not

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Speaker 1: getting in the limelight, not making big statements that he's

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Speaker 1: going to get criticized for UM and UH and and

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Speaker 1: I think that keeping his own counsel UH. The morale

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Speaker 1: at the Pentagon, unlike the State Department on the Tilliston,

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Speaker 1: has been very high. Maddis as one of the generals,

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Speaker 1: has held in very high refused by both both Trump

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Speaker 1: and the White House. I actually think everyone that talked

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Speaker 1: about a suicide path that the past and was gone,

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Speaker 1: that Maddis was gone to I think that was complete

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Speaker 1: b speculation that we time mad Dr Bremer. One more question,

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Speaker 1: if we could generous of your time this morning the

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Speaker 1: President Tilts and his recent comments I don't know you've seen,

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Speaker 1: I mean towards Iran. How will our relationship with Iran

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Speaker 1: change and does that provide for further Middle East instability? Well,

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Speaker 1: there's been a lot of negotiation with Killerson and with

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Speaker 1: his advisors, with the Europeans transpiring the way to UM

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Speaker 1: continue to ensure that the Iranians will not be able

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Speaker 1: to develop nuclear capacity at the end of the tenure period.

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Speaker 1: Other words, strengthen uh de termined it the deal without

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Speaker 1: breaking the deal. Um. I think that Pompeo is going

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Speaker 1: to be less interested um in that path, is going

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Speaker 1: to be more interest in trying to bring the iranience

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Speaker 1: back to the table to change or break the deal.

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Speaker 1: Like with North Korea, it's a more digital and it's

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Speaker 1: a more risky out. The new book Us versus then

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Speaker 1: the failure of globalization. Ian Bremer with us this morning.

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Speaker 1: We're honored now him to bring in George Friedman with us.

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Speaker 1: Really really, uh, I think this is a timely interview. Pim.

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Speaker 1: Why don't you bring in Mr Freedman with geopolitical futures

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Speaker 1: on defense and how it links into the State Department. Well,

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Speaker 1: just let him go ahead and tell us what he

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Speaker 1: thinks about this new appointment of Mike Pompeio as our

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Speaker 1: u S Secretary of State. George Freedman, your thoughts not

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Speaker 1: very important at all. Uh. First, this president's which is

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Speaker 1: people around. Secondly, a large number of presidents, most of

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Speaker 1: them are their own secretaries of state. Trump just made

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Speaker 1: a decision, really radical decision to go to North Korea

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Speaker 1: to meet with Kim on a major crisis. Uh. He

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Speaker 1: obviously doesn't feel that Tillerson is prepared to take you know,

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Speaker 1: the he's kind of changes. Tillersen is a very conservative player,

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Speaker 1: and he wants somebody backing him who is going to

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Speaker 1: be more in tune with him. But I mean, in

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Speaker 1: terms of foreign policy, I mean Trump is very, very radical.

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Speaker 1: I mean, any other presidents who said, look, I'm not

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Speaker 1: going to go to war with North Korea, I'm going

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Speaker 1: to talk to them, well be praised a high heaven. Uh.

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Speaker 1: In this case, of course, everything he does is going

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Speaker 1: to be condemned. But in general, he's had a very

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Speaker 1: conservative foreign policy. Tillerson has backed it, but he loves

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Speaker 1: shifting personnel around for whatever reason. So in general, the

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Speaker 1: Tillerson leaving doesn't mean a whole lot. Pompeo coming in

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Speaker 1: doesn't mean a whole lot. Trump is running the show.

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Speaker 1: If that's the case, If President Trump is running the show,

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Speaker 1: why would Mike Pompeo want this job. Well, to be

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Speaker 1: called Secretary of State means a lot. Pompeo seems to

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Speaker 1: be closer to the President this week than the other.

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Speaker 1: But there have been a lot of press who have

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Speaker 1: been whose nowhere to the Secretary of States. When Henry

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Speaker 1: Kissinger went to China to open China, William Rodgers, whose

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Speaker 1: Secretary of State, was never told that it was happening

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Speaker 1: in The reason was it didn't trust the State's Department,

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Speaker 1: not the leak. What George treatment from where you set

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Speaker 1: with your defense abilities? What is the linkage of our

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Speaker 1: State Department with our defense department? Is that overdone? Is

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Speaker 1: it overrated? Or is there a real tangible working relationship

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Speaker 1: between the two Well depend on the level. There's lots

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Speaker 1: of routine things going on that they work together on.

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Speaker 1: They have different perspectives on the world at different missions,

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Speaker 1: different jobs. But this president and other presidents had felt

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Speaker 1: that they could not trust the State Department to follow

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Speaker 1: their policies. The State Department has a reputation earned or

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Speaker 1: not that they have a view of the world and

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Speaker 1: whatever the president says, they're going to go and do it.

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Speaker 1: And so in many administrations, the State Department has been

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Speaker 1: cut out. They have been left with the routine things,

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Speaker 1: but the major breakthroughs they haven't touched. Killerson was told

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Speaker 1: to cut the State Department. The budget has been cut.

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Speaker 1: We'll see what happens with that, But I mean there's

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Speaker 1: always been attention between the Defense Department's view of the world,

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Speaker 1: the State department ze of the world, and the CIA's

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Speaker 1: department of the world due the world, and good presidents

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Speaker 1: have always allowed that to go on, and you know,

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Speaker 1: try to have a foreign policy that kind of combines

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Speaker 1: the two at that level. So in this particular case,

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Speaker 1: this president doesn't trust the State Department. He clearly trust

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Speaker 1: the Defense Department, and he has a love hate relationship

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Speaker 1: the Sea. The most one of the more more important

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Speaker 1: books that you put out is the Flashpoints the emerging

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Speaker 1: crisis in Europe. What do you expect Mike Pompeio to

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Speaker 1: contribute to the alleviation of any crisis in Europe? Well,

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Speaker 1: the crisis in Europe is a European crisis. Uh. Their

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Speaker 1: failure to deal with the two thousand eight crisis has

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Speaker 1: generated fragmentation among nations, bricksit being only the most visible

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Speaker 1: and within nation the rise of nationalist movements. There's the

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Speaker 1: United States has not touched the European situation by and large,

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Speaker 1: there's nothing we can do and the Europeans wouldn't respond.

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Speaker 1: So when we talk about the crisis in Europe, it

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Speaker 1: is the crisis, the fact the EU is failing, failing

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Speaker 1: is an entity, and that it's kicked off a political

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Speaker 1: crisis where even the Germans don't have a coherent government.

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Speaker 1: So it's an internal process that really doesn't affect us.

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Speaker 1: One of the things. Remember Trump, oddly enough, he's pulled

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Speaker 1: back from being responsible for the world. George Freeman, thank

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Speaker 1: you so much. That geopolitical futures greatly appreciate the time

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Speaker 1: today on short notice. We're there. Economic data, Vincent del Judas,

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Speaker 1: good morning time. The consumer price indext the CPI February,

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Speaker 1: both the headline and the core rising at a slower

407
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Speaker 1: pace than the prior month, both up point two percent

408
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Speaker 1: c p I in the core month over month February

409
00:24:22,800 --> 00:24:25,280
Speaker 1: up point two percent year over year. We see a

410
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Speaker 1: little bit of a pickup in the CPI two point

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Speaker 1: two percent versus two point one, but the all important

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Speaker 1: core year over year holding steady at one point eight percent.

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Speaker 1: I'm Vinnydale Juda, so let's go back to New York. Vinny,

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Speaker 1: thank you very much. The number bang in line, the

415
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Speaker 1: market going nowhere. Treasuries unchanged, the US tenure at two six,

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Speaker 1: pretty much unchanged on the session. Euro dollar unchanged off

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Speaker 1: the back of this as well. At one fifty two,

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Speaker 1: we're up about a tenth of one percent. That we

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Speaker 1: do start to climb a little bit higher on euro

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Speaker 1: dollar now by about two tents of one percent. A

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Speaker 1: very marginal reaction in the f facts market, a weak

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Speaker 1: dollar story, and a very small reaction in the bond market,

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Speaker 1: which just a tiny bit coming into thrice ras Now

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Speaker 1: drama here, Michael McKay, Blind Black's very joining us in

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Speaker 1: the studio in New York. No drama in the numbers, Mike, No,

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Speaker 1: I'm straining here to find something exciting to talk about.

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Speaker 1: We did see a small decline and energy prices that

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Speaker 1: probably has to do with seasonals. Energy prices did not

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Speaker 1: rise as much as they usually do during the month.

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Speaker 1: They're kind of flat, uh down to a certain extent.

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Speaker 1: Gasoline prices where so you get a one tenth rise

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Speaker 1: that's certainly shaved some off. But almost every category was up,

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Speaker 1: which is something that will you know, encourage the the

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Speaker 1: inflation hawks. But not up by much. I mean, cannot

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Speaker 1: change significantly from January. But Michael McKee, if Mark Mobius,

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Speaker 1: legendary investor per chance, was here, he would tell me

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Speaker 1: Tom do what the cf as do. Run the smooth

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Speaker 1: moving averages, exponential or simple. I run simple moving averages.

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Speaker 1: Mike mr Mobius always runs exponential moving averages. The vectors

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Speaker 1: going up. But we can't break out of the moving

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Speaker 1: averages that we saw four years ago or longer ago,

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Speaker 1: you know, pre crisis. All this. Where's the breakout? Where's

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Speaker 1: the breakout? Breakout? It's on about the fifteen of April

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Speaker 1: when we get the CPI numbers for March. Is that

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Speaker 1: a base effect issure effect issue? But what you're seeing

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Speaker 1: here is inflation starting to rise across the board. A

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Speaker 1: lot of things are moving up in price. And we

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00:26:45,320 --> 00:26:48,879
Speaker 1: used to have a much more uh stratified, you know,

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Speaker 1: diversified thing where if some things went up, something you down.

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Speaker 1: Most most are going up, they're just not going up

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Speaker 1: by much. I mean, airline fares rose by six tenths

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Speaker 1: during a month. Um the motor vehicle insurance last month

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Speaker 1: was a big deal because it was up one point

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Speaker 1: three percent. Was at one point seven percent this time.

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Speaker 1: So you're you're still seeing a lot more stuff going up.

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Speaker 1: We're going to hear a lot about goldilocks in the

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Speaker 1: days to come. Michael McKey because this is fertile ground

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Speaker 1: for for risk assets in the minds of a lot

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Speaker 1: of people. Inflation, Yes, things are moving high, they're drifting higher,

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Speaker 1: but it's so gradual and the pressure is so subdued

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Speaker 1: that what you see in terms of reaction on the

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Speaker 1: screen today, Tom, it's not in effect. It's not in

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Speaker 1: the bond market, it's in the equity market. Equity future

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Speaker 1: is really spiked off the back of that inflation print.

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Speaker 1: It's the fear of inflation, Michael, is what's gripping investors.

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Speaker 1: And I guess this report this morning says, at least

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Speaker 1: for now, nothing to fear, though as you've pointed out,

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Speaker 1: next month, in the month after that could be quite

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Speaker 1: critical in the next move fear itself, Tom, And we're

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Speaker 1: talking about this on surveillance television this morning. Uh, the

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Speaker 1: idea that the markets are really really terrified of inflation

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Speaker 1: out there, but it's going to be very gradual and

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Speaker 1: it's not going to be the inlation of your past.

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Speaker 1: Mike McKee, Thank you so much. Much more on this

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Speaker 1: in the coming weeks. Thanks for listening to the Bloomberg

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00:28:13,560 --> 00:28:19,520
Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts. SoundCloud,

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00:28:19,880 --> 00:28:24,120
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at

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00:28:24,160 --> 00:28:28,400
Speaker 1: Tom Keene before the podcast. You can always catch us worldwide.

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Speaker 1: I'm Bloomberg Radio