WEBVTT - Over 200 Dead After London-Bound Boeing Jet Crashes in India 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:18.560 Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 0:00:18.640 --> 0:00:21.920 Listen on demand wherever you get your podcasts, or watch 0:00:21.960 --> 0:00:23.120 us live on YouTube. 0:00:23.480 --> 0:00:25.880 So the Boeing seven eighty seven Dreamliner that was operated 0:00:25.880 --> 0:00:29.240 by Air India crash shortly after taking off in India, 0:00:29.320 --> 0:00:31.680 killing all. But it's killing all two hundred and forty 0:00:31.680 --> 0:00:35.080 two people on board joining us now is said Phillip Bloomberg, 0:00:35.120 --> 0:00:37.280 Deputy team leader for Global Aviation. I said he was 0:00:37.280 --> 0:00:38.960 in London, but he's not. He's in Paris. I should 0:00:38.960 --> 0:00:40.720 have known from the Eiffel Tower that's behind him. For 0:00:40.760 --> 0:00:44.479 those of you on radio, this is all right before 0:00:44.520 --> 0:00:46.960 the Paris air show, right, what are you hearing on 0:00:47.000 --> 0:00:47.760 the ground. 0:00:48.840 --> 0:00:51.360 Thanks Alix. So at the moment, we don't really have 0:00:51.560 --> 0:00:54.440 details on what rety went wrong with the aircraft and 0:00:54.560 --> 0:00:57.000 what caused the crash. I mean it reached an altitude 0:00:57.000 --> 0:00:58.680 of six hundred and twenty five feet and then it 0:00:58.800 --> 0:01:01.160 sort of just plummeted the ground in a massive fireball. 0:01:01.640 --> 0:01:05.600 And we know that over two hundred over two hundred 0:01:05.600 --> 0:01:10.200 people have been pulled out dead. There has been some 0:01:10.319 --> 0:01:13.840 mention of survivors, we don't really know how many. The 0:01:13.880 --> 0:01:16.360 police said that survivors have been taken to hospital. We're 0:01:16.400 --> 0:01:19.440 not quite sure whether those survivors are from the aircraft 0:01:19.640 --> 0:01:22.960 or whether they're from the residential building. So the plane 0:01:22.959 --> 0:01:26.560 crashed into a residential building. It was a medical college 0:01:26.560 --> 0:01:30.520 hostel and that's where students and doctors were eating lunch 0:01:30.520 --> 0:01:34.320 when the plane crashed. So it was a massive tragedy 0:01:34.600 --> 0:01:38.960 the bot for air India, for India, and obviously it's 0:01:39.120 --> 0:01:42.080 raised lots of questions on Boeing and we're still waiting 0:01:42.120 --> 0:01:44.640 to see what those answers actually are to those questions 0:01:44.720 --> 0:01:47.560 as to what caused it and where do we go 0:01:47.640 --> 0:01:48.000 from here. 0:01:48.240 --> 0:01:52.400 So typically who leads these investigation series at the host 0:01:52.440 --> 0:01:55.760 country is that the airline? Is it? How does that work? 0:01:57.760 --> 0:02:01.919 Yes, so the investigation will be led by investigators from India. 0:02:02.000 --> 0:02:04.960 So typically when a plane crashes, the country where the 0:02:05.000 --> 0:02:08.400 plane crash leads the investigation into what went wrong. The 0:02:08.840 --> 0:02:12.240 other countries that sort of we have FA input, we 0:02:12.280 --> 0:02:15.640 have NTSP input, we have input from the manufacturer. In 0:02:15.639 --> 0:02:18.880 this case Boeing in also from GE because they made 0:02:18.919 --> 0:02:21.640 the engine, So there will be input from others. And 0:02:21.720 --> 0:02:27.200 we've also seen the UK Air Investigation Investigation Accident Investigation 0:02:27.320 --> 0:02:30.720 Board talking that they would be sending some investigators to 0:02:30.800 --> 0:02:33.600 India tomorrow, so there will be it will be a 0:02:33.680 --> 0:02:36.680 multinational effort in terms of trying to find out what 0:02:36.760 --> 0:02:40.280 went wrong and then they will sort of determine where 0:02:40.480 --> 0:02:43.320 the problem came up from and what really caused this crash. 0:02:44.240 --> 0:02:47.840 We are seeing Boeing shares down obviously looking at GE 0:02:47.960 --> 0:02:52.799 because they were using GE engines. Are those market reactions investors' 0:02:52.880 --> 0:02:57.320 reactions legitimate considering how much unknown there are, how hard 0:02:57.320 --> 0:03:00.160 it is to fly planes and the variables like birds. 0:03:02.200 --> 0:03:05.280 It's difficult to actually put a sort of input this 0:03:05.400 --> 0:03:08.360 onto Boeing or GE because I mean, this aircraft has 0:03:08.360 --> 0:03:11.639 been in service for over eleven years, almost twelve years, 0:03:11.800 --> 0:03:13.600 so it's not a brand new aircraft that's just come 0:03:13.600 --> 0:03:16.239 off fresh off the line from Boeing. So I mean 0:03:16.280 --> 0:03:18.639 it is sort of far fetched to sort of pin 0:03:18.720 --> 0:03:21.920 the blame on Boeing without sort of ascertaining the causes 0:03:21.960 --> 0:03:24.600 of what happened and what went wrong. I mean, obviously 0:03:24.720 --> 0:03:28.320 the investigation will determine what went wrong and who is 0:03:28.360 --> 0:03:31.680 it fauld and if there was pilot error, if there 0:03:31.760 --> 0:03:34.160 was any technical issue, if there was something wrong with 0:03:34.200 --> 0:03:37.160 the plane or with the engines. But it's all still 0:03:37.200 --> 0:03:39.680 too early to determine the cause of it, and so 0:03:40.200 --> 0:03:42.680 it does seem to be an initial reaction, and we 0:03:42.720 --> 0:03:45.600 will get more clarity on what really went wrong in 0:03:45.680 --> 0:03:48.280 the days and months ahead as we sort of as 0:03:48.400 --> 0:03:51.880 investigators sort of port through the flight data recorders, the 0:03:51.960 --> 0:03:55.600 cockpit voice recorders and sort of pieced together, minute by minute, 0:03:55.640 --> 0:03:57.320 second by second, what really went wrong. 0:03:57.880 --> 0:03:59.400 All right, so thank you so much for joining us. 0:03:59.440 --> 0:04:03.400 Really appreciate your reporting, said our Philip, deputy team leader 0:04:03.440 --> 0:04:06.760 for Global Aviation Bloomberg News. He is based in London, 0:04:06.760 --> 0:04:09.960 but who's reporting from our Paris bureau today. 0:04:11.840 --> 0:04:15.560 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:04:15.640 --> 0:04:18.680 weekdays at ten am Eastern on Apple, Cocklay and Android 0:04:18.720 --> 0:04:22.039 Auto with the Bloomberg Business app. Listen on demand wherever 0:04:22.080 --> 0:04:25.200 you get your podcasts, or watch us live on YouTube. 0:04:25.760 --> 0:04:29.080 All right, let's talk inflation. Yesterday, Remember we had the 0:04:29.120 --> 0:04:31.360 CPI data came out and it came in a little 0:04:31.880 --> 0:04:35.200 less than expected, so we called that benign inflation, I 0:04:35.200 --> 0:04:37.640 think was the term we used. As John's just mentioned, 0:04:37.640 --> 0:04:40.919 we got the PPI out today, John characterized it as muted. 0:04:41.000 --> 0:04:43.839 I'll go with that PPI final demand month the month 0:04:43.960 --> 0:04:46.679 zero point one percent, consensus was zero point two percent. 0:04:46.680 --> 0:04:49.120 And then if you annualize all this stuff and say 0:04:49.240 --> 0:04:53.360 PPI X food, energy and trade year over year came 0:04:53.360 --> 0:04:56.440 in a two point seven percent. Consensus was three percent. 0:04:56.520 --> 0:04:59.200 So that's a pretty big beat, I would say. Jeffrey 0:04:59.240 --> 0:05:02.880 Cleveland joins economists at Peyton and Regal out there in 0:05:03.279 --> 0:05:06.880 l A. Jeffrey, what did you make of yesterday's CPI, 0:05:07.080 --> 0:05:09.440 today's PPI what you call on inflation these days? 0:05:10.440 --> 0:05:13.240 Well, Paul, not only was it benign for May, that's 0:05:13.240 --> 0:05:15.760 four months in a row, So four months in a row, 0:05:15.800 --> 0:05:18.400 after you know, a January hot start to the year, 0:05:18.960 --> 0:05:23.040 CPI has been soft. I know the inflationistas listening are 0:05:23.040 --> 0:05:25.279 going to say that, you know, just wait, just wait 0:05:25.320 --> 0:05:28.560 another month and the tariff toll will will hit, and 0:05:28.600 --> 0:05:31.600 that is possible. But I would point out that in 0:05:31.640 --> 0:05:34.440 the day that we saw yesterday, it wasn't just that 0:05:34.520 --> 0:05:38.360 goods prices were soft. Also services prices were soft, So 0:05:38.760 --> 0:05:40.800 you know, housing free which are we all clear, but 0:05:40.880 --> 0:05:43.720 also non housing services. I wouldn't say the all clear, Alex, 0:05:44.160 --> 0:05:46.679 but I mean it's uh, we're getting there. We're getting 0:05:46.680 --> 0:05:49.320 close to say it all clear. I think another another 0:05:49.400 --> 0:05:52.520 couple of months, I'll declare the the all clear. I 0:05:52.560 --> 0:05:55.719 think also with this morning's PPI, you throw that in 0:05:55.760 --> 0:05:58.920 the mix. You can imagine a soft reading for core 0:05:59.080 --> 0:06:01.440 PCEE when it comes out at the end of this month, 0:06:01.720 --> 0:06:03.839 which is what the FED is more focused on, and 0:06:04.080 --> 0:06:05.839 I think very good news for the central Bank and 0:06:05.920 --> 0:06:08.480 for the bond market. So soft inflation. 0:06:08.160 --> 0:06:11.960 Readings, So, Jeff, is it we're not necessarily seeing any 0:06:11.960 --> 0:06:15.160 inflation in the numbers yet? Maybe we will in the future. 0:06:15.400 --> 0:06:18.880 Is that a reflection of companies just kind of eating 0:06:18.960 --> 0:06:21.520 the cost increases that they are experiencing, maybe taking in 0:06:21.600 --> 0:06:24.200 the margin as opposed to passing them along to consumers. 0:06:24.960 --> 0:06:27.599 That's a possibility, Paul, It's possible. We just haven't seen 0:06:27.640 --> 0:06:30.720 the pass through yet. People are shifting their behaviors, people 0:06:30.800 --> 0:06:32.359 are making up for it in other ways and not 0:06:32.400 --> 0:06:35.239 passing it through into prices. I think all of those 0:06:35.279 --> 0:06:37.840 are in the mix. I think one thing we've been 0:06:37.839 --> 0:06:41.080 telling clients is that. Keep in mind, imported goods in 0:06:41.160 --> 0:06:44.800 terms of the PCE index are six seven eight percent 0:06:44.839 --> 0:06:49.480 of the index, so you could see potential price increases 0:06:49.520 --> 0:06:51.760 on those goods, but you have to keep in mind 0:06:51.800 --> 0:06:54.360 most of what you spend your money on, PAUL are 0:06:54.400 --> 0:06:57.359 things like services, and those we still see scope for 0:06:57.440 --> 0:06:59.880 services to continue to cool off, and certainly we saw 0:06:59.880 --> 0:07:02.479 that in May, so that could outweigh some of the 0:07:02.880 --> 0:07:05.680 tariff price increase. That's a good news. So I think 0:07:05.680 --> 0:07:07.080 by the end of the year, so if you can 0:07:07.120 --> 0:07:10.600 look out six months or so, I think inflation will 0:07:10.640 --> 0:07:13.200 continue to moderate. Okay, So if. 0:07:13.080 --> 0:07:16.040 We are in this disinflationary environment right now, well, actually, 0:07:16.080 --> 0:07:17.800 would you categorize us as disinflation? 0:07:18.600 --> 0:07:18.760 Oh? 0:07:18.840 --> 0:07:21.840 Yeah, I mean we peaked in twenty twenty two at 0:07:21.840 --> 0:07:24.920 a very high level on core inflation. It's been coming down. 0:07:25.160 --> 0:07:27.120 It's been coming down slower than we would have hoped, 0:07:27.440 --> 0:07:30.400 but it is disinflating. So I think we're definitely in 0:07:30.400 --> 0:07:32.040 a disinflationary environment right now. 0:07:32.160 --> 0:07:34.720 Yes, So if it's disinflationary, is that enough for the 0:07:34.760 --> 0:07:38.640 FED to cut in July September predemptively? 0:07:39.480 --> 0:07:41.160 I think you have to step back here. You put 0:07:41.200 --> 0:07:43.400 yourselves in the shoes of the FED. You're at four 0:07:43.560 --> 0:07:46.360 fifty on the funds rate. I would categorize that alex 0:07:46.480 --> 0:07:50.840 as restrictive. So they have a restrictive policy setting. But 0:07:50.960 --> 0:07:53.320 we know, we just talked about it. Inflation is cooling. 0:07:53.440 --> 0:07:56.360 Disinflation and the other thing that you brought up earlier 0:07:56.400 --> 0:07:59.200 on a segment which was wonderful, We are seeing a 0:07:59.240 --> 0:08:02.640 slow down in the lake. So with that backdrop, I 0:08:02.640 --> 0:08:04.600 think the next move from the Fed is a cut. 0:08:04.880 --> 0:08:07.520 Question is what are they comfortable doing that. I don't 0:08:07.560 --> 0:08:10.120 think it's likely next week, but I think the market 0:08:10.160 --> 0:08:14.120 should start pricing in July, should start entertaining July. But 0:08:14.200 --> 0:08:17.800 we think but by September guys will have some evidence 0:08:18.040 --> 0:08:19.720 enough where they could possibly cut. 0:08:20.360 --> 0:08:23.160 If that's the scenario, and inflation, you know, is not 0:08:23.240 --> 0:08:27.360 necessarily a concern here or a big concern, what does 0:08:27.400 --> 0:08:29.800 that do to your GDP? Look for the remainder of 0:08:30.040 --> 0:08:31.680 this year, we. 0:08:31.600 --> 0:08:35.719 Cut our GDP Paul after the tariff turmoil really broke 0:08:35.800 --> 0:08:39.360 out starting February second. That Sunday afternoon, my team got 0:08:39.360 --> 0:08:41.680 together and we cut our GDP. So we went down 0:08:41.760 --> 0:08:44.120 to one percent for twenty twenty five Q four to 0:08:44.200 --> 0:08:47.640 Q four we brought that actually up a little bit 0:08:47.920 --> 0:08:50.480 in recent weeks, so we're around one point five percent 0:08:50.800 --> 0:08:53.280 for the year. That's not a recession, Paul. I would 0:08:53.360 --> 0:08:58.400 characterize that as subpar economic growth, so subtrend, but that 0:08:58.480 --> 0:09:02.040 doesn't really change here with that with this disinflation story, 0:09:02.480 --> 0:09:04.240 I think that that will be the case. We'll have 0:09:04.720 --> 0:09:08.880 subpart growth, We'll avoid a recession, but we'll have disinflation. 0:09:08.960 --> 0:09:11.560 That's good for bonds. I think you're especially the long 0:09:11.720 --> 0:09:14.920 end of the treasury market is really been pushed up 0:09:14.920 --> 0:09:18.760 by fears of the fiscal fears of inflation from tariffs, 0:09:19.080 --> 0:09:21.760 and if all of that sort of fades, man bonds 0:09:21.800 --> 0:09:23.120 look good. We have a good set up here for 0:09:23.160 --> 0:09:25.040 the bond market over the second half of the year. 0:09:25.040 --> 0:09:29.280 In my view, really deficits included in that. Yeah, I 0:09:29.320 --> 0:09:33.400 mean the deficits, Alex. This is the most widely known 0:09:33.440 --> 0:09:36.800 story on Earth, you know, talking to global clients for years, 0:09:37.360 --> 0:09:40.040 they've been looking at the US budget deficit. It's huge. 0:09:40.320 --> 0:09:43.040 I'm not denying that six or seven percent of GDP. 0:09:43.559 --> 0:09:45.800 I don't think that's going to change next year with 0:09:45.520 --> 0:09:48.959 the big beautiful budget bill, but I think that's priced in. 0:09:49.559 --> 0:09:51.480 We see that in I think the slope of the 0:09:51.520 --> 0:09:54.920 curve in turn premium that's been built into tens and 0:09:55.000 --> 0:09:57.800 thirty year treasuries. So that's no, that's a known known. 0:09:58.640 --> 0:10:01.720 I think as we move on beyond that, you know, 0:10:02.000 --> 0:10:04.160 people are going to realize the real story here is, Okay, 0:10:04.160 --> 0:10:06.600 what happens with growth and what happens with inflation that 0:10:06.640 --> 0:10:07.560 will drive markets. 0:10:07.880 --> 0:10:10.840 Hey, Jeffrey, I know you're in LA. You're an LA guy. 0:10:11.520 --> 0:10:13.280 Give us a sense of what's happening out there. 0:10:14.280 --> 0:10:17.200 Well, you know, I'm twenty five miles from downtown LA today, 0:10:17.200 --> 0:10:19.120 as you can see here in the home office. Part 0:10:19.160 --> 0:10:21.560 of that is because paid and regal offices are, you know, 0:10:21.600 --> 0:10:24.320 in the heart of it, downtown Los Angeles, which enjoyed 0:10:24.360 --> 0:10:27.880 such a great resurgence pre COVID. It was really a renaissance, 0:10:27.920 --> 0:10:30.560 if you will. Yeah, people living and working down there. 0:10:30.600 --> 0:10:32.760 So the events that we've seen in the last week 0:10:32.840 --> 0:10:36.320 or so really unfortunate, causing a lot of uncertainty here 0:10:36.840 --> 0:10:39.280 on the West Coast. I think as far as it 0:10:39.320 --> 0:10:42.160 pertains to the economic data, I mean, the big thing 0:10:42.200 --> 0:10:45.520 we're watching here, Paul, is the labor force. You saw 0:10:45.559 --> 0:10:49.320 that actually in the May jobs report, labor force participation 0:10:49.720 --> 0:10:52.920 went down. We like to look at the labor force flows, 0:10:53.240 --> 0:10:55.360 so every month you can look at the number of 0:10:55.360 --> 0:10:58.240 people that are going from being employed, for example, to 0:10:58.480 --> 0:11:01.640 out of the labor force, and in May that number 0:11:01.920 --> 0:11:05.160 was the biggest increase that we've seen outside of COVID 0:11:05.440 --> 0:11:08.559 in the last twenty twenty five years. It could be retirements, 0:11:08.679 --> 0:11:11.880 it could be people leaving the labor force for reasons other, 0:11:12.520 --> 0:11:15.040 you know, than work related, maybe family related reasons. But 0:11:15.080 --> 0:11:17.360 it could also be related to the immigration issues. So 0:11:17.360 --> 0:11:18.679 I think we need to keep we need to keep 0:11:18.679 --> 0:11:21.760 an eye on that because the labor force participation is 0:11:21.800 --> 0:11:23.600 the key part of economic growth. 0:11:23.960 --> 0:11:26.160 Jeffrey, thank you so much for joining us. Really appreciate 0:11:26.160 --> 0:11:29.199 getting your time. Jeffrey Cleveland, Chief economists Payden and Regal 0:11:30.040 --> 0:11:33.200 joining us via zoom from Los Angeles, where he is 0:11:33.400 --> 0:11:34.359 a based. 0:11:36.679 --> 0:11:40.360 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:11:40.440 --> 0:11:43.839 weekdays at ten am Eastern on Applecarplay and Android Auto 0:11:43.920 --> 0:11:47.000 with the Bloomberg Business App. Listen on demand wherever you 0:11:47.040 --> 0:11:50.040 get your podcasts, or watch us live on YouTube. 0:11:50.559 --> 0:11:52.600 We are live here in the Bloomberg Interactive Broker Studio 0:11:52.600 --> 0:11:56.160 in New York. We are streaming live on YouTube as well. 0:11:56.400 --> 0:12:00.200 All right, I'm looking at some Bloomberg reporting here, and 0:12:00.200 --> 0:12:04.160 Donald Trump says he's intended to send letters to trading 0:12:04.160 --> 0:12:06.599 partners in the next one to two weeks setting unilateral 0:12:06.679 --> 0:12:10.359 tariff rates ahead of a July ninth deadline to reimpose 0:12:11.000 --> 0:12:14.319 higher duties on dozens of economies. So sending out letters. 0:12:14.360 --> 0:12:16.120 I'm not sure what that means, but I guess do 0:12:16.240 --> 0:12:19.920 I watch mine? Dear sir, maam exactly to whom it 0:12:20.000 --> 0:12:22.960 may concern, we're raising your things. Nathan Dean, he knows 0:12:23.000 --> 0:12:24.680 the stuff because we pay him to know this stuff. 0:12:24.760 --> 0:12:29.000 Nathan Dean, Bloomberg Intelligence senior policy analysts. Nathan, just give 0:12:29.080 --> 0:12:31.560 us your latest kind of over you of where we 0:12:31.600 --> 0:12:35.839 are on these tariffs here in little I guess context. 0:12:37.200 --> 0:12:39.240 Yeah, what I would say is, there's really two phrases 0:12:39.280 --> 0:12:41.640 we're saying at the moment. The first is uncertainty. And look, 0:12:41.640 --> 0:12:43.559 if you're in the markets, this isn't a new word, 0:12:43.679 --> 0:12:46.360 you know. The uncertainty is the year for is the 0:12:46.360 --> 0:12:48.560 word for twenty twenty five. But I would also use 0:12:48.600 --> 0:12:51.440 the phrase status quo because even though President Trump said 0:12:51.520 --> 0:12:54.079 yesterday that he's going to send those letters out, and 0:12:54.160 --> 0:12:56.520 for what it's worth, that's a much easier way than 0:12:56.559 --> 0:12:59.319 going to the Rose Garden and holding up a little 0:12:59.360 --> 0:12:59.719 card that. 0:12:59.679 --> 0:13:02.280 Says caclates, you know. 0:13:02.559 --> 0:13:04.240 I think what we're going to see is we saw 0:13:04.240 --> 0:13:06.720 some reporting from Bloomberg News just last night that President 0:13:06.760 --> 0:13:09.600 Trump was also talking about extending this. So I think 0:13:09.640 --> 0:13:12.560 the current idea here is is that you're going to 0:13:12.559 --> 0:13:15.920 have a situation where you have President Trump going out 0:13:15.960 --> 0:13:19.640 there and making threats or making statements that raises headline risk. 0:13:19.920 --> 0:13:22.320 But subsequently you're also going to have this idea that 0:13:22.360 --> 0:13:24.440 we're just going to try and keep the status quo 0:13:24.559 --> 0:13:26.880 because we don't want to rock the markets. And so 0:13:27.000 --> 0:13:28.920 I think you are going to see some examples. I 0:13:29.000 --> 0:13:31.680 think President Trump may pick on a couple of countries 0:13:31.800 --> 0:13:35.200 or the European Union in particular, to try and raise 0:13:35.600 --> 0:13:37.880 a renewed threat or a headline risk in order to 0:13:37.880 --> 0:13:40.760 just spur negotiations. But I think for the next three 0:13:40.800 --> 0:13:42.800 to six months, the markets are going to face this 0:13:42.920 --> 0:13:46.440 on this status quo of a ten percent baseline plus 0:13:46.480 --> 0:13:50.480 an extension or plus an exemption, or plus a certain 0:13:50.480 --> 0:13:53.200 additional threshold like we saw with the China agreement and 0:13:53.280 --> 0:13:55.640 that should probably stick through the third quarter. 0:13:56.280 --> 0:13:59.000 Are these agreements, Emily, we're just looking at China in 0:13:59.040 --> 0:14:01.960 the UK, are they actually different or are they just 0:14:02.040 --> 0:14:04.600 kind of circling back to where we were before all 0:14:04.640 --> 0:14:06.080 of this trauma unfolded here. 0:14:06.840 --> 0:14:09.199 Well, so the China one is mostly status quote from 0:14:09.200 --> 0:14:11.640 where we were before, But the UK agreement was different 0:14:11.720 --> 0:14:15.600 because the United Kingdom didn't have a trade deficit with 0:14:15.640 --> 0:14:17.880 the United States like other certain countries do. So the 0:14:17.920 --> 0:14:20.400 base case scenario that you should be looking at is 0:14:20.440 --> 0:14:23.000 a ten percent minimum tariff on every country. 0:14:23.040 --> 0:14:24.480 I mean, look, you know. 0:14:24.400 --> 0:14:26.680 We heard Treasury Secretary Scott Besson say if they don't 0:14:26.720 --> 0:14:29.000 have any trade, you know, tariff's on us, we're not 0:14:29.000 --> 0:14:30.960 going to have tariffs on them. But this idea of 0:14:31.000 --> 0:14:33.880 a ten percent baseline is something that's usually sticking around at. 0:14:33.840 --> 0:14:34.440 The White House. 0:14:35.200 --> 0:14:39.400 But then you're also going to see exemptions for example, automobiles, technology. 0:14:39.480 --> 0:14:41.400 Anybody that can get into the White House is going 0:14:41.440 --> 0:14:45.000 to be pushing for President Trump to offer exemptions. And 0:14:45.040 --> 0:14:46.840 we just go back to this idea that if you 0:14:46.920 --> 0:14:50.880 are going to see sectors that impact consumer prices, so 0:14:51.000 --> 0:14:54.920 think of things like Apple, MacBooks or Amazon or you know, Walmart, 0:14:54.920 --> 0:14:58.280 Like Treasury Secretary Scott Bessont was just getting pushed about 0:14:58.280 --> 0:15:00.520 in the Senate Finance Committee, and you are going to 0:15:00.520 --> 0:15:03.520 see exemptions, but then there are going to be additional 0:15:03.720 --> 0:15:06.600 you know, tariffs for other countries. But we should say 0:15:06.600 --> 0:15:08.920 that a lot of this depends on negotiations. Bloomberg News 0:15:08.960 --> 0:15:11.920 reported just twenty minutes ago that Prime Minister Mark Karney 0:15:11.920 --> 0:15:14.720 said the US Canada's going well. They reported last night 0:15:14.720 --> 0:15:17.640 that negotiations with India weren't going so well, so that 0:15:17.760 --> 0:15:20.840 idea for examples to be made before July ninth could 0:15:20.840 --> 0:15:21.360 come about. 0:15:22.600 --> 0:15:26.000 Okay, I guess we'll just we just keep in touch 0:15:26.080 --> 0:15:29.200 with some skepticism. But it feels like we're going to 0:15:29.240 --> 0:15:31.280 get to a spot kind of where we did last time, 0:15:31.280 --> 0:15:32.760 which is, at the end of the day, it's a 0:15:32.800 --> 0:15:35.520 lot about nothing, you know, and I think the markets, 0:15:35.680 --> 0:15:38.560 certainly the equity markets might be pricing that in with 0:15:38.920 --> 0:15:43.000 the rebound here all right, Nathan, for the adults in 0:15:43.000 --> 0:15:45.400 the room here, what's the next thing from DC we 0:15:45.400 --> 0:15:46.880 should be focusing on here? 0:15:47.840 --> 0:15:49.560 So the number one question we've been getting from our 0:15:49.560 --> 0:15:52.600 clients just this morning is when is the Senate Finance 0:15:52.600 --> 0:15:56.840 Committee going to release its legislation or its text President 0:15:56.880 --> 0:15:58.680 Trump's One Big, Beautiful Bill. So if you are an 0:15:58.720 --> 0:16:01.200 equity investor in your you know, exposed to the solar 0:16:01.240 --> 0:16:03.920 industry or the winds industry, this is very important to 0:16:03.960 --> 0:16:07.440 you because Senator Crape out just last night was saying 0:16:07.520 --> 0:16:10.640 that things like certain text credits should be phased out earlier, 0:16:11.480 --> 0:16:13.680 and we think he was hitting at solar and wind 0:16:14.080 --> 0:16:17.160 and others would be extended, which was nuclear and geothermal. 0:16:17.280 --> 0:16:19.960 Now obviously we're still waiting for that text. Now. I 0:16:19.960 --> 0:16:22.400 think that text is going to come after market clothes 0:16:22.400 --> 0:16:24.760 on Friday. I think it's going to come Saturday or Sunday. 0:16:24.760 --> 0:16:28.000 But keep your eyes out because there is this potential 0:16:28.040 --> 0:16:29.880 for some what I you know, I used to say 0:16:29.880 --> 0:16:32.440 marijuana stocks have hot sauce. Now I say the solar 0:16:32.480 --> 0:16:34.840 stocks they have hot sauce. So these things move around, 0:16:35.160 --> 0:16:37.000 So definitely keep your eyes out for that. That's probably 0:16:37.040 --> 0:16:39.880 the next major catalyst you're going to see coming from Washington, is. 0:16:39.800 --> 0:16:42.120 That like a hot sauce reference is a good thing 0:16:42.200 --> 0:16:45.200 or a bad thing or just spicy, just stuff spicy. 0:16:45.760 --> 0:16:48.000 I stole it from our friends over in the ETF space. 0:16:48.200 --> 0:16:51.720 Okay, no, fair enough, because a solar sector is just 0:16:52.560 --> 0:16:55.640 really in a mess based on when the tax credits 0:16:56.080 --> 0:16:58.200 land when it comes out of the Senate. 0:16:58.560 --> 0:16:59.880 Do you think the timeline still works? 0:17:00.960 --> 0:17:01.240 I do. 0:17:01.360 --> 0:17:03.280 I think, you know, obviously the Senators want to have 0:17:03.280 --> 0:17:06.520 all this legislation out in the public arena before Juneteenth. 0:17:06.600 --> 0:17:08.440 Next week they're going away for a couple of days, 0:17:08.760 --> 0:17:11.080 and I think the Senate can eventually get there. They 0:17:11.080 --> 0:17:13.920 seem to be a little bit more i'd say on board. 0:17:13.960 --> 0:17:16.480 There's still major questions about the deficit, getting the ram 0:17:16.560 --> 0:17:19.600 Pauls on the dead ceiling, and you know the other 0:17:19.720 --> 0:17:22.879 senators Ron Johnson's if you will, on board. But I 0:17:22.920 --> 0:17:24.560 think they can get there by the fourth of July, 0:17:24.680 --> 0:17:27.000 or maybe even after the fourth of July. We still 0:17:27.040 --> 0:17:29.280 are thinking at eighty percent chance this gets done before 0:17:29.320 --> 0:17:31.560 the August recess, all right. 0:17:31.600 --> 0:17:33.760 I mean those recesses are actually a good incentive to 0:17:33.800 --> 0:17:37.080 get stuff like deadlines. Yes, so it's good, all right. 0:17:37.119 --> 0:17:40.200 Nathan appreciate it as always, Nathan Dean, he is our 0:17:40.240 --> 0:17:43.960 go to person in DC to explain all the craziness 0:17:43.960 --> 0:17:46.080 down there in terms of the policies. Nathan Dean senior 0:17:46.080 --> 0:17:50.119 policy analysts Bloomberg Intelligence. He's down on our DC bureau. 0:17:52.280 --> 0:17:55.960 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:17:56.040 --> 0:17:59.400 weekdays at ten am Eastern on Applecarclay and Android Otto 0:17:59.520 --> 0:18:02.600 with the Work Business app. Listen on demand wherever you 0:18:02.640 --> 0:18:05.640 get your podcasts, or watch us live on YouTube. 0:18:06.359 --> 0:18:09.080 Happy Thursday, everybody. Alex still here alongside Paul Sweeney. This 0:18:09.400 --> 0:18:12.080 is Bloomberg Intelligence Radio. We are broadcasting to live from 0:18:12.119 --> 0:18:16.040 Interactive Broker Studio right here in Midtown Manhattan. So June 0:18:16.160 --> 0:18:18.160 is Pride Month. So over the next couple weeks we're 0:18:18.160 --> 0:18:21.359 going to highlight segments on topics related to equality. And 0:18:21.400 --> 0:18:24.000 today we're speaking with Laura Maudy, a CEO and co 0:18:24.080 --> 0:18:27.520 founder of Bobby Now. Bobby is the only mom founded 0:18:27.520 --> 0:18:30.399 and lead pediatric nutrition company in the US and the 0:18:30.440 --> 0:18:34.840 third largest fully integrated infant formula manufacturer in the country. Laura, 0:18:34.960 --> 0:18:36.919 we remember speaking to you over the pandemic when there 0:18:36.920 --> 0:18:41.840 were shortages of things like infant formula. What is first 0:18:41.880 --> 0:18:44.040 and foremost on your radar right now, like the biggest 0:18:44.160 --> 0:18:45.800 struggle that you have right now? 0:18:47.560 --> 0:18:48.960 Lovely to chat with you guys again. 0:18:49.080 --> 0:18:52.280 Hello, I am the biggest struggle I think right now 0:18:52.400 --> 0:18:55.520 is you know, you'll remember the infant formula shortage in 0:18:55.520 --> 0:19:00.359 twenty twenty two. There has been a very concentrated effort 0:19:00.480 --> 0:19:03.879 to make sure that we diversify and break up the 0:19:03.960 --> 0:19:07.240 concentrated market, and the only way to do that is 0:19:07.280 --> 0:19:11.040 to invest in more domestic manufacturing. I think the last 0:19:11.040 --> 0:19:13.520 time I spoke to you guys, I mentioned that we 0:19:13.600 --> 0:19:18.640 have co created a bill that really allows and incentivizes 0:19:18.720 --> 0:19:21.840 more domestic manufacturing for infant formula, and right now that 0:19:22.000 --> 0:19:24.160 is the number one focus. 0:19:24.000 --> 0:19:27.840 The Infant Formula Made in America Act of twenty twenty five. 0:19:28.280 --> 0:19:29.080 Talk to us about that. 0:19:30.400 --> 0:19:33.400 So again, like I said, this is on the back 0:19:33.440 --> 0:19:36.280 of the shortage, and what we recognized was nothing will 0:19:36.359 --> 0:19:39.000 change if nothing changes when it comes to the footprint 0:19:39.040 --> 0:19:45.200 of infant formula manufacturing. So this bill incentivizes new players 0:19:45.480 --> 0:19:50.359 to up level and to break ground and build infant 0:19:50.359 --> 0:19:52.520 formula manufacturing here in the US. 0:19:53.359 --> 0:19:55.440 Is it How expensive is it? 0:19:55.440 --> 0:19:56.480 It's very expensive. 0:19:56.840 --> 0:20:00.920 It's very expensive, but maybe nothing like other other investments 0:20:00.960 --> 0:20:04.080 that are being made right now in manufacturing. It takes 0:20:04.080 --> 0:20:07.280 around three years and it could be anywhere from you know, 0:20:07.359 --> 0:20:10.200