WEBVTT - Bloomberg Surveillance TV: September 29th, 2026

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<v Speaker 1>Bloomberg Audio Studios. Podcasts Radio News. This is the Bloomberg

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<v Speaker 1>Surveillance Podcast. I'm Jonathan Farrow, along with Lisa Abramowitz and

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<v Speaker 1>Anne-Marie Hordern. Join us each day for insight from the

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<v Speaker 1>best in markets, economics and geopolitics. From our global headquarters

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<v Speaker 1>in New York City, we are live on Bloomberg Television

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<v Speaker 1>weekday mornings from 6 to 9 a.m. Eastern. Subscribe to

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<v Speaker 1>the podcast on Apple, Spotify or anywhere else you listen.

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<v Speaker 1>And as always, on the Bloomberg Terminal and the Bloomberg

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<v Speaker 1>Business App. We begin this out with elevated yields keeping

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<v Speaker 1>the pressure on equity markets worldwide. Ed Yardeni of Yardeni

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<v Speaker 1>Research writing, we suspect that the bond market has been

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<v Speaker 1>hacked by bond vigilante algorithms. They respond to news headlines

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<v Speaker 1>with huge trades that exacerbate volatility. Ed joins us now

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<v Speaker 1>for more. Ed, welcome to the program, sir. It's good

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<v Speaker 1>to see you. Do you believe we might be entering

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<v Speaker 1>a little bit of a negative feedback loop in this

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<v Speaker 1>bond market where high yields fuel deficit worries and that

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<v Speaker 1>fuels high yields? Are we on the brink of that, Ed?

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<v Speaker 2>I think we're on the brink of it. We're sort

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<v Speaker 2>of in the midst of it. We've actually seen, I think,

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<v Speaker 2>since the beginning of the year, a synchronized increase in

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<v Speaker 2>bond yields that might actually have started last year. And

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<v Speaker 2>I think a lot of that has to do with

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<v Speaker 2>what we've previously discussed. The Bank of Japan is growing.

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<v Speaker 2>raising interest rates, and that is causing an unwind of

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<v Speaker 2>the global carry trade, which I think is affecting global bonds.

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<v Speaker 2>And so a lot of that is kind of a

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<v Speaker 2>knee-jerk mechanical event. But at the same time, I think

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<v Speaker 2>we also have these algorithms that'll take any news whatsoever

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<v Speaker 2>that's out there, and some of that's been bearish, and

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<v Speaker 2>kind of blow it up so we get these rapid

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<v Speaker 2>increases in bond yields.

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<v Speaker 1>And at what point do you think it becomes self-limiting

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<v Speaker 1>that the bike steps in because people start to worry

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<v Speaker 1>about the damage?

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<v Speaker 2>I think there's already a lot of worry about the damage.

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<v Speaker 2>People are already kind of wondering what's going to break here.

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<v Speaker 2>So I think we're already at that point. I think

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<v Speaker 2>the best way to monitor that is to just keep

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<v Speaker 2>watching where the bond yield is relative to short-term rates. Usually,

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<v Speaker 2>you start to get bond yields going up less than

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<v Speaker 2>short-term rates when bond investors become increasingly convinced that that

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<v Speaker 2>as short-term rates continue to go up, that something will break.

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<v Speaker 3>And of course, the two-year Treasury here.

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<v Speaker 2>And around the world has been a very good leading

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<v Speaker 2>indicator of what central banks are going to be doing.

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<v Speaker 2>And right now, the two-year Treasuries in all the major

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<v Speaker 2>countries in the world are pointing towards more tightening by

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<v Speaker 2>central banks.

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<v Speaker 3>So on September 15th, I kind of.

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<v Speaker 2>concluded that we want to proceed with caution here when

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<v Speaker 2>it comes to the equity market. Well, it turned out

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<v Speaker 2>to be actually a good call, more of a good

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<v Speaker 2>call for the bond market, though I was focusing on

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<v Speaker 2>the equity market.

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<v Speaker 4>So, Ed, you said it's a good time to proceed

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<v Speaker 4>with caution. This morning, we were just talking, John mentioned

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<v Speaker 4>that Aurora has postponed its IPO due to what it

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<v Speaker 4>called uncertainty in the market, even as it reports a

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<v Speaker 4>90 percent revenue growth over the year of 2026. Is

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<v Speaker 4>this potentially the sign of something breaking when it comes

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<v Speaker 4>to the pipeline of deals that are trying to get done?

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<v Speaker 2>Well, I kind of am watching Oracle more closely because

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<v Speaker 2>of the Stargate deal where Oracle is... in a partnership

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<v Speaker 2>with OpenAI and SoftBank to build data centers. And I

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<v Speaker 2>think the total commitment is $ 500 billion. And just recently,

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<v Speaker 2>one of those data centers was postponed rather significantly because

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<v Speaker 2>a 19-mile gas pipeline in New Mexico was rejected by

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<v Speaker 2>the state. So, yeah, there's starting to be some stresses there.

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<v Speaker 3>In the AI trade as well.

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<v Speaker 2>And of course, that's what has continued to hold the

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<v Speaker 2>market up quite well near a record high for both

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<v Speaker 2>the NASDAQ and the S &amp; P 500.

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<v Speaker 4>Does this mean that at this point, if something might

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<v Speaker 4>break or there are signs that at least the broader

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<v Speaker 4>risk appetite is waning at a pretty accelerating clip, does

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<v Speaker 4>that make you bullish bonds? We heard from Jim Bianco

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<v Speaker 4>yesterday that he is getting bullish for the first time

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<v Speaker 4>in years just based on this technical retracement.

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<v Speaker 2>I would say that bonds yielding 5.25% are very attractive,

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<v Speaker 2>certainly on a 10-year basis. The good thing about bonds

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<v Speaker 2>is if you just hold them, you get your money

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<v Speaker 2>back and you get the yield. And I think, again,

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<v Speaker 2>five and a quarter is a pretty good yield. But

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<v Speaker 2>It doesn't feel like this is necessarily the peak in

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<v Speaker 2>bond yields. I think even Bianco said that we might

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<v Speaker 2>find that we can get even better yields if we

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<v Speaker 2>just kind of wait here. So I'm not convinced that 5.25%

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<v Speaker 2>is necessarily the top in yields.

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<v Speaker 5>I was....

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<v Speaker 2>Thinking that that was the case, but I'm increasingly wondering

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<v Speaker 2>whether the unwind of the yield curve trade is a

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<v Speaker 2>big problem here. This kind of, I just recently wrote,

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<v Speaker 2>actually last night, that this might be the revenge of

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<v Speaker 2>the bond vigilantes. The bond vigilantes were suppressed from the

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<v Speaker 2>great financial crisis to the great virus crisis with quantitative

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<v Speaker 2>easing and zero interest rates. And now that they've been

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<v Speaker 2>sort of liberated and free to express an opinion, they're saying, well,

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<v Speaker 2>you know, you accumulated all that debt at near zero

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<v Speaker 2>interest rates back then. Now you're going to have to

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<v Speaker 2>refinance it at these yields. And that's concerning.

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<v Speaker 1>I looked at it this morning.

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<v Speaker 6>You called it invasion of the bond vigilante algorithm. So

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<v Speaker 6>how high, Ed, do you think yields can actually go?

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<v Speaker 2>Well, I know I think more and more people are

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<v Speaker 2>thinking about the possibility of getting closer to 6%.

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<v Speaker 3>I would say 5.5%.

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<v Speaker 2>I'm not getting into the alarm stage here. I think

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<v Speaker 2>we are going to find lots of buyers at these

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<v Speaker 2>kind of levels. The same thing happened In 2023, when

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<v Speaker 2>the bond yield got to 5% very quickly, we saw

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<v Speaker 2>that the auctions actually started to go very well. And

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<v Speaker 2>then bond yields actually declined because inflation moderated. This is

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<v Speaker 2>not exactly the same scenario right now. One of the

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<v Speaker 2>reasons I turned more cautious in mid-September is because of

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<v Speaker 2>what's going on in the Middle East.

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<v Speaker 3>Higher for longer oil prices.

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<v Speaker 2>Means stickier inflation, means that central banks are not in

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<v Speaker 2>a one-and-done mode, but are in a tightening mode, and that,

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<v Speaker 2>in turn, is pushing up bond yields. So I think

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<v Speaker 2>that the good and the bad news is that the

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<v Speaker 2>repricing in the bond market is occurring pretty rapidly. That

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<v Speaker 2>hurts in the short term, but to the extent that

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<v Speaker 2>we get to where the terminal rate is for the

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<v Speaker 2>bond yield, that will be helpful.

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<v Speaker 1>Stay with us. More Bloomberg surveillance coming up after this.

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<v Speaker 1>Let's send back to Anthropic, the company steamrolling ahead with

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<v Speaker 1>huge AI spending plans going into its blockbuster IPO. Dan

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<v Speaker 1>Ives of Yorkville Ives writing, investors will focus on its

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<v Speaker 1>massive growth profile. This will be a watershed event for

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<v Speaker 1>the tech sector and the market. Dan joins us now

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<v Speaker 1>for more. Dan, welcome to the program. It doesn't come

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<v Speaker 1>without controversy. Let's talk about the details. The customer concentration, Dan,

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<v Speaker 1>how much of this company is built on just a

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<v Speaker 1>handful of names?

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<v Speaker 5>Yeah, I mean, look, the nature of the hyperscalers and

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<v Speaker 5>just what we're seeing on the GPU.

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<v Speaker 3>Side, it's going to be concentrated now. But I don't

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<v Speaker 3>think that that's necessarily that much of an issue.

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<v Speaker 5>I think investors understand in this AI build-out, it starts

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<v Speaker 5>with a small group and it's going to expand. Because remember,

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<v Speaker 5>we're still expanding. third inning of the AI revolution. Anthropic

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<v Speaker 5>is in a unique position, but definitely, well, this is

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<v Speaker 5>eye-opening in terms of for the market. And I think finally, investors,

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<v Speaker 5>they've anticipated this watershed event because Anthropic's front and center

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<v Speaker 5>in the AI race.

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<v Speaker 1>It's certainly a unique proposition, Dan. How unusual is it

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<v Speaker 1>to see a company in a perspective worn about existential

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<v Speaker 1>risk to humanity?

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<v Speaker 3>Yeah, I mean, that's definitely a first. And look, I

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<v Speaker 3>think it speaks to.

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<v Speaker 1>Is that a sales pitch or a warning, Dan?

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<v Speaker 5>Again, that's a head-scratcher Saturday Night Live skit, right? I mean, look,

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<v Speaker 5>I think part of the problem is that if they

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<v Speaker 5>slow down.

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<v Speaker 3>China wins.

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<v Speaker 5>And I think that's sort of the problem here is

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<v Speaker 5>that the safety guard rails that you could put in,

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<v Speaker 5>you know, the genie's already out the bottle. And I

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<v Speaker 5>think you've seen Jensen, Nadella and others kind of talk

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<v Speaker 5>about it. You know, also part of the problem is

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<v Speaker 5>you can't get to the top floor.

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<v Speaker 3>And then pull the ladder up.

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<v Speaker 5>So the regulatory capture is another issue that's playing out here.

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<v Speaker 5>And I think the reality front and center today probably

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<v Speaker 5>in the White House is that there needs to be

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<v Speaker 5>safety guardrails. But you can't have politicians in two or

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<v Speaker 5>two area code slowing down innovation, especially when China is accelerating.

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<v Speaker 4>Dan, is that really true that this is going to

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<v Speaker 4>just give China an upper hand if you put limits

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<v Speaker 4>or guardrails around recursive AI, self-improving AI? That's something that

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<v Speaker 4>the PBOC isn't particularly interested in engaging with and that

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<v Speaker 4>ultimately potentially leaves a sort of authoritarian regime at the

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<v Speaker 4>hands of a technology that could potentially go rogue.

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<v Speaker 5>Yeah, Lisa, look, my view is for the first time

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<v Speaker 5>in 30 years, the U.S. is ahead of China when

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<v Speaker 5>it comes to tech. And I think part of this

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<v Speaker 5>balancing act or quagmire is that the reality is that

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<v Speaker 5>for the U.S., if you actually start to slow down

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<v Speaker 5>the models, slow down innovation... China will narrow the gap.

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<v Speaker 5>And that's just the reality. I think what Karp talks about,

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<v Speaker 5>and I agree, sovereign AI, Jensen talks about this as well,

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<v Speaker 5>I think that is much more of the focus. And

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<v Speaker 5>that might be a focus today in terms of enterprises

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<v Speaker 5>having control of their own data.

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<v Speaker 3>But, look, in my view, the data center.

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<v Speaker 5>Build-out, what companies are looking at when it comes to

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<v Speaker 5>use cases, it's still early days. But you can talk

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<v Speaker 5>out of both sides of the mouth, and I think

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<v Speaker 5>that continues to be what investors need to glean through,

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<v Speaker 5>talk versus action.

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<v Speaker 4>Meanwhile, people are talking about just the scope of money

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<v Speaker 4>that's being raised. I mean, the latest in this prospectus

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<v Speaker 4>reported by Reuters of Anthropic talks about $ 518 billion of

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<v Speaker 4>additional spending in the future on data sensors, cloud computing.

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<v Speaker 4>At what point are we promising the financing of something

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<v Speaker 4>that's bigger than any other industrial revolution in the United

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<v Speaker 4>States with kind of an unproven return proposition? I mean, yes,

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<v Speaker 4>we're seeing some returns on this, but the spending is

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<v Speaker 4>incredibly robust and only accelerating from here.

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<v Speaker 5>We're going to have, call it, $ 4 to $ 5 trillion

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<v Speaker 5>being spent in the next three to four years. But

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<v Speaker 5>you're building the Vegas Strip in 1955. I mean, that's

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<v Speaker 5>where we are relative to what this is going to

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<v Speaker 5>look like. We're going to talk about physical AI and

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<v Speaker 5>data and ultimately space and where it all plays out.

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<v Speaker 5>I think investors understand that these companies just can't. spend

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<v Speaker 5>and see no returns. And I think that's something that

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<v Speaker 5>we've seen with the public companies. For Anthropic, that will

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<v Speaker 5>be the focus for investors, is that when you start

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<v Speaker 5>to see the return, the growth is eye-popping relative to

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<v Speaker 5>what they're seeing. But it's that balance. And then for investors,

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<v Speaker 5>it's understanding what are the derivatives of this, the second, third,

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<v Speaker 5>fourth derivatives. Because as Anthropic goes public and others... It's

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<v Speaker 5>healthy for the overall tech space. These are public companies, transparency,

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<v Speaker 5>just like we've seen with SpaceX.

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<v Speaker 6>Hey, Dan, I have a question regarding this meeting this afternoon,

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<v Speaker 6>the superintelligence.

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<v Speaker 1>Luncheon with the president.

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<v Speaker 6>Do you think he's trying to get the industry on

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<v Speaker 6>board to some of the communication he has been using

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<v Speaker 6>when it comes to AI? Or is it the other

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<v Speaker 6>way around, where potentially you have the industry trying to

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<v Speaker 6>get the president to sign up on maybe some regulation?

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<v Speaker 5>Yeah.

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<v Speaker 3>Yeah, I think it's the former.

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<v Speaker 5>I think it comes down to you can't do a doomer.

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<v Speaker 5>You can't scare people. Say AI is taking 50 percent

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<v Speaker 5>of white collar jobs. Electricity bill is going to go higher.

0:12:43.770 --> 0:12:46.870
<v Speaker 5>It's going to be an issue for mankind. And then

0:12:47.090 --> 0:12:49.550
<v Speaker 5>all of a sudden, you know, talk about growth.

0:12:49.610 --> 0:12:49.990
<v Speaker 3>I think the.

0:12:49.950 --> 0:12:53.030
<v Speaker 5>Reality is that it's based on the data center issues,

0:12:53.350 --> 0:12:57.580
<v Speaker 5>the midterm, such a political debate issues. Tech industries created

0:12:57.640 --> 0:13:01.940
<v Speaker 5>the PR nightmare themselves. And I think there's definitely some

0:13:02.220 --> 0:13:05.380
<v Speaker 5>sort of closing the door to understand getting everyone on

0:13:05.400 --> 0:13:07.940
<v Speaker 5>the same page. Because if you do that, it just

0:13:08.059 --> 0:13:10.870
<v Speaker 5>fuels the fire relative to try to close some of

0:13:10.890 --> 0:13:11.569
<v Speaker 5>the data centers.

0:13:11.850 --> 0:13:13.570
<v Speaker 3>Which is a negative for the industry.

0:13:13.870 --> 0:13:16.510
<v Speaker 5>And then the winner for every data center that closes

0:13:16.890 --> 0:13:18.650
<v Speaker 5>or doesn't happen is China.

0:13:19.070 --> 0:13:22.550
<v Speaker 1>Stay with us. More Bloomberg surveillance coming up after this.

0:13:31.910 --> 0:13:34.470
<v Speaker 1>As you all know, it's well documented voter frustration building

0:13:34.550 --> 0:13:38.000
<v Speaker 1>over artificial intelligence heading into the November midterms. Joyce Chang

0:13:38.040 --> 0:13:40.920
<v Speaker 1>of JP Morgan writing, populist pressure will rise regardless of

0:13:40.960 --> 0:13:44.000
<v Speaker 1>the outcome with visible backlash to AI winners and neither

0:13:44.040 --> 0:13:47.540
<v Speaker 1>party holding a clear economic trust advantage. Joyce joins us

0:13:47.559 --> 0:13:48.890
<v Speaker 1>now for more. Joyce, good morning. Good to see you.

0:13:48.900 --> 0:13:49.480
<v Speaker 7>Great to be here.

0:13:49.780 --> 0:13:51.960
<v Speaker 1>What's the runway for policy? What does it look like

0:13:52.000 --> 0:13:52.730
<v Speaker 1>heading into next year?

0:13:53.309 --> 0:13:56.790
<v Speaker 7>Well, I think the midterm elections are underestimated as a

0:13:56.850 --> 0:13:59.710
<v Speaker 7>risk right now. So there are three things we're really

0:13:59.750 --> 0:14:03.550
<v Speaker 7>looking at. And affordability is a big issue. AI is

0:14:03.590 --> 0:14:06.610
<v Speaker 7>a big issue. But there's also a possibility of higher

0:14:06.650 --> 0:14:11.569
<v Speaker 7>tariffs here, greater re-escalation with Iran as well. But AI

0:14:11.830 --> 0:14:14.709
<v Speaker 7>and affordability politics, I think those two things are here

0:14:14.750 --> 0:14:18.340
<v Speaker 7>to stay, irrespective of what the midterm election outcomes are.

0:14:18.550 --> 0:14:21.440
<v Speaker 6>We were talking yesterday how some Democratic candidates are a

0:14:21.460 --> 0:14:23.540
<v Speaker 6>little bit too extreme for the mainstream. But at the

0:14:23.600 --> 0:14:27.520
<v Speaker 6>same time, we have higher energy prices. Is that potentially

0:14:27.560 --> 0:14:31.600
<v Speaker 6>going to shift some voters maybe into the red camp,

0:14:31.960 --> 0:14:32.460
<v Speaker 6>the blue camp?

0:14:32.480 --> 0:14:34.750
<v Speaker 7>Sorry. I really don't think that it does that, because

0:14:34.930 --> 0:14:37.370
<v Speaker 7>when you look at the one big, beautiful bill, I mean,

0:14:37.390 --> 0:14:39.710
<v Speaker 7>if you've got gas at the pump at $ 4. 50 and

0:14:39.830 --> 0:14:42.670
<v Speaker 7>it stays there, you wipe away all the benefits of

0:14:42.690 --> 0:14:44.930
<v Speaker 7>the one big, beautiful bill. And this is why I

0:14:45.130 --> 0:14:48.820
<v Speaker 7>really see that neither party is really earning the economic

0:14:48.880 --> 0:14:52.260
<v Speaker 7>trust right now. So, you know, the populist pressures are

0:14:52.300 --> 0:14:55.220
<v Speaker 7>here to stay, but I wouldn't necessarily just say that

0:14:55.340 --> 0:14:57.660
<v Speaker 7>it is going to be red versus blue. It is

0:14:57.720 --> 0:15:01.530
<v Speaker 7>just the affordability issues in the last month because of

0:15:01.570 --> 0:15:03.830
<v Speaker 7>gas at the pump have really seemed to me to

0:15:03.870 --> 0:15:06.390
<v Speaker 7>have shifted a lot of the sentiment in the polls.

0:15:06.570 --> 0:15:08.190
<v Speaker 6>Do you think that's going to push the president towards

0:15:08.230 --> 0:15:10.960
<v Speaker 6>this populist policy of maybe an export ban?

0:15:11.380 --> 0:15:13.880
<v Speaker 7>Well, the export ban is something that I think is

0:15:13.940 --> 0:15:16.280
<v Speaker 7>very much on the table, and that could work for

0:15:16.280 --> 0:15:19.340
<v Speaker 7>30 days over the very short term. And then you're

0:15:19.360 --> 0:15:22.740
<v Speaker 7>going to hit the refinery compressions, all of these other issues,

0:15:22.800 --> 0:15:24.890
<v Speaker 7>which will just be another distortion that's not going to

0:15:24.950 --> 0:15:28.230
<v Speaker 7>solve this issue. So I don't think it is policy

0:15:28.250 --> 0:15:30.130
<v Speaker 7>that really makes much sense here, but it's certainly on

0:15:30.150 --> 0:15:30.730
<v Speaker 7>the table now.

0:15:30.930 --> 0:15:33.790
<v Speaker 4>You know, arguably one driver of some of the resilience

0:15:33.830 --> 0:15:36.090
<v Speaker 4>that we're seeing in earnings was the one big beautiful

0:15:36.110 --> 0:15:37.550
<v Speaker 4>bill and some of the tax cuts. And a lot

0:15:37.570 --> 0:15:39.330
<v Speaker 4>of people have pointed to that as something that have

0:15:39.390 --> 0:15:43.820
<v Speaker 4>really fueled the gains in corporate balance sheets. Do you

0:15:43.840 --> 0:15:45.960
<v Speaker 4>see a chance that that could be revoked or that

0:15:46.000 --> 0:15:47.230
<v Speaker 4>some of those taxes could go up?

0:15:47.580 --> 0:15:51.000
<v Speaker 7>Well, I think for the personal income taxes, you had

0:15:51.040 --> 0:15:53.840
<v Speaker 7>that benefit already, so that's passed. So right now, they're

0:15:53.860 --> 0:15:57.240
<v Speaker 7>focused on gas at the pump, but inflation is still

0:15:57.300 --> 0:16:01.610
<v Speaker 7>very sticky here. So the corporate benefits, many of those

0:16:01.800 --> 0:16:05.810
<v Speaker 7>are phased in to stay as far as... just the

0:16:05.850 --> 0:16:09.130
<v Speaker 7>business interests that benefit from it. But what I would

0:16:09.150 --> 0:16:12.450
<v Speaker 7>look at more is that you're going to have more

0:16:12.630 --> 0:16:15.550
<v Speaker 7>regulation that will have to be forthcoming on AI at

0:16:15.610 --> 0:16:19.150
<v Speaker 7>some point, that some of these benefits will have some

0:16:19.230 --> 0:16:21.720
<v Speaker 7>offsets going forward, just when you look at the issues

0:16:21.770 --> 0:16:25.620
<v Speaker 7>that are going to be debated on technology and on

0:16:25.640 --> 0:16:26.360
<v Speaker 7>tech sovereignty.

0:16:26.640 --> 0:16:27.220
<v Speaker 1>Where would that.

0:16:27.500 --> 0:16:29.560
<v Speaker 4>Actually show up in the tech sphere? Because right now

0:16:29.600 --> 0:16:31.660
<v Speaker 4>in the tech stack, when you look at data center build-outs,

0:16:32.020 --> 0:16:33.720
<v Speaker 4>they really haven't been affected. If you look at any

0:16:33.760 --> 0:16:36.220
<v Speaker 4>kind of empirical data, it doesn't show any kind of

0:16:36.260 --> 0:16:37.740
<v Speaker 4>restraint whatsoever on the build-out.

0:16:37.760 --> 0:16:39.520
<v Speaker 1>A lot of lip service, but not actual restraint.

0:16:39.980 --> 0:16:43.480
<v Speaker 4>Is there anywhere that you see real practical regulation that

0:16:43.540 --> 0:16:45.240
<v Speaker 4>could crimp some of the AI trade?

0:16:45.460 --> 0:16:48.780
<v Speaker 7>I don't think that it's going to happen in this administration.

0:16:48.800 --> 0:16:51.880
<v Speaker 7>I think it's going to be a big issue in 2028.

0:16:51.880 --> 0:16:54.350
<v Speaker 7>And I think you're going to see other countries also

0:16:54.470 --> 0:16:56.330
<v Speaker 7>try to figure out the way in which they can

0:16:56.750 --> 0:17:00.310
<v Speaker 7>engage with this. But these public-private partnerships, I mean, I

0:17:00.330 --> 0:17:02.910
<v Speaker 7>don't know, just all of my background looking at emerging markets,

0:17:02.950 --> 0:17:06.990
<v Speaker 7>they rarely end up lasting over a long duration of time.

0:17:07.050 --> 0:17:08.970
<v Speaker 7>But I think you're absolutely right. I mean, right now

0:17:08.990 --> 0:17:11.600
<v Speaker 7>there's been a lot of lip service on this. There's

0:17:11.619 --> 0:17:14.520
<v Speaker 7>been a lot of concern and anxiety about And it's interesting,

0:17:14.560 --> 0:17:16.260
<v Speaker 7>in other parts of the world, this is not the

0:17:16.300 --> 0:17:18.960
<v Speaker 7>same political issue. But I think this is much more

0:17:18.980 --> 0:17:21.570
<v Speaker 7>of a 2028 issue as far as what actually could

0:17:21.609 --> 0:17:21.880
<v Speaker 7>be done.

0:17:22.010 --> 0:17:24.010
<v Speaker 1>How dependent is your growth outlook for the next year

0:17:24.350 --> 0:17:25.690
<v Speaker 1>on what happens here with SAC?

0:17:26.460 --> 0:17:28.940
<v Speaker 7>Well, I mean, look, the tech CapEx into next year

0:17:29.000 --> 0:17:32.000
<v Speaker 7>looks very good. I think your question becomes, you know,

0:17:32.320 --> 0:17:34.760
<v Speaker 7>when do you hit a crunch point on this? You

0:17:34.800 --> 0:17:37.639
<v Speaker 7>will have the Treasury funding, I think, by next August.

0:17:37.700 --> 0:17:39.920
<v Speaker 7>They'll have to increase that. And then you'll be looking

0:17:39.940 --> 0:17:41.710
<v Speaker 7>at CapEx for the next year, for 2028 and a

0:17:41.730 --> 0:17:46.010
<v Speaker 7>presidential year. But for the next couple of quarters, the

0:17:46.050 --> 0:17:48.830
<v Speaker 7>CapEx actually looks quite strong just given where the demand

0:17:48.910 --> 0:17:51.690
<v Speaker 7>is at. So, I think this is much more, you know,

0:17:51.850 --> 0:17:55.459
<v Speaker 7>you've got midterm mark. You have the fiscal deficit taking,

0:17:55.480 --> 0:17:57.940
<v Speaker 7>I think, more space than even some of the tech

0:17:57.960 --> 0:17:58.580
<v Speaker 7>numbers right now.

0:17:58.619 --> 0:18:01.550
<v Speaker 1>Given the Federal Reserve's pursuit of 2%. Are they in

0:18:01.590 --> 0:18:03.230
<v Speaker 1>a fight with those things? Are they in a fight

0:18:03.250 --> 0:18:03.990
<v Speaker 1>with those forces?

0:18:04.630 --> 0:18:07.070
<v Speaker 7>Well, look, the 2% has not been met for a

0:18:07.310 --> 0:18:09.600
<v Speaker 7>long time. And I think what the markets feel is

0:18:09.660 --> 0:18:12.880
<v Speaker 7>that the inflation here is sticky, but it hasn't been destabilizing.

0:18:12.900 --> 0:18:15.900
<v Speaker 7>I mean, we're actually looking at one of the broadest-based

0:18:16.100 --> 0:18:19.139
<v Speaker 7>growth recoveries we've seen in a long time. You have

0:18:19.180 --> 0:18:22.790
<v Speaker 7>above potential growth in Japan and Europe. I mean, it's

0:18:22.830 --> 0:18:26.570
<v Speaker 7>still only 1.5%, but also in the United States. And

0:18:27.109 --> 0:18:30.850
<v Speaker 7>you've got China doing stimulus. So I think the higher

0:18:30.890 --> 0:18:32.810
<v Speaker 7>rates are going to stay here, but the higher fiscal

0:18:32.850 --> 0:18:34.490
<v Speaker 7>is also going to stay here. So it's not just

0:18:34.580 --> 0:18:37.320
<v Speaker 7>the tech story. Everybody's going to keep an eye on

0:18:37.359 --> 0:18:37.840
<v Speaker 7>Treasury soon.

0:18:38.810 --> 0:18:42.330
<v Speaker 1>This is the Bloomberg Surveillance Podcast, bringing you the best

0:18:42.390 --> 0:18:45.670
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0:18:45.710 --> 0:18:49.750
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0:18:50.170 --> 0:18:53.399
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