1 00:00:02,720 --> 00:00:10,560 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,520 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:18,479 Speaker 1: Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 4 00:00:18,600 --> 00:00:21,799 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:21,920 --> 00:00:23,040 Speaker 1: us live on YouTube. 6 00:00:23,640 --> 00:00:27,160 Speaker 2: It's got an update here on what's happening down in Washington, 7 00:00:27,240 --> 00:00:31,320 Speaker 2: DC with all these tariffs. Every single day there seems 8 00:00:31,360 --> 00:00:33,440 Speaker 2: to be more and more news. Tyler Kendall joined us 9 00:00:33,400 --> 00:00:37,400 Speaker 2: Bloomberg News reporter Tyler, what's the latest on the tariffs 10 00:00:37,440 --> 00:00:40,360 Speaker 2: here where we heard some tough talk from mister Carney, 11 00:00:41,320 --> 00:00:44,960 Speaker 2: the incoming Prime minister at Canada. What's the latest right. 12 00:00:44,840 --> 00:00:46,879 Speaker 3: Well, we are expecting the next round of tariffs to 13 00:00:46,880 --> 00:00:48,800 Speaker 3: go into effect this Wednesday. That's going to be on 14 00:00:48,880 --> 00:00:51,640 Speaker 3: steel and aluminum tariffs at twenty five percent. We've been 15 00:00:51,640 --> 00:00:55,240 Speaker 3: told not to expect any exemptions or carve outs at 16 00:00:55,280 --> 00:00:58,200 Speaker 3: this moment, but of course, like many things, that remains 17 00:00:58,200 --> 00:01:00,320 Speaker 3: to be seen and could be a moving target here 18 00:01:00,360 --> 00:01:02,280 Speaker 3: at the White House, and I would just expect to 19 00:01:02,320 --> 00:01:05,560 Speaker 3: hear this week rhetorics start to shift from senior administration officials. 20 00:01:05,560 --> 00:01:06,960 Speaker 4: We've often talked about. 21 00:01:06,720 --> 00:01:08,520 Speaker 3: Tariff's up to this point as being a way to 22 00:01:08,560 --> 00:01:11,280 Speaker 3: advance President Trump's border policies. But now we're going to 23 00:01:11,280 --> 00:01:14,040 Speaker 3: start to hear a lot more about these tariffs being 24 00:01:14,080 --> 00:01:17,640 Speaker 3: about national security concerns. Recall, steel was a flashpoint on 25 00:01:17,680 --> 00:01:20,400 Speaker 3: the twenty twenty four campaign trail with that proposed MEF 26 00:01:20,480 --> 00:01:24,399 Speaker 3: on steel acquisition and where we heard national security come up. Notably, 27 00:01:24,480 --> 00:01:27,440 Speaker 3: a Commerce Secretary, Howard Lutnick, over the weekend did say 28 00:01:27,520 --> 00:01:31,480 Speaker 3: that Americans should start to prepare for foreign good prices 29 00:01:31,520 --> 00:01:33,920 Speaker 3: to go up, although he contends that US good prices 30 00:01:33,959 --> 00:01:36,480 Speaker 3: will ultimately go down over the long term, but that 31 00:01:36,520 --> 00:01:39,320 Speaker 3: there might be that adjustment period as we've heard President 32 00:01:39,360 --> 00:01:41,280 Speaker 3: Trump talk about. I just bring that up about the 33 00:01:41,319 --> 00:01:43,080 Speaker 3: steel tariffs because we have to keep in mind that 34 00:01:43,120 --> 00:01:46,039 Speaker 3: includes those downstream items and economists say that could hit 35 00:01:46,240 --> 00:01:47,240 Speaker 3: consumers the most. 36 00:01:47,640 --> 00:01:49,960 Speaker 5: Tyler Trump said of the U with economy faces a 37 00:01:50,040 --> 00:01:53,600 Speaker 5: period of transition, how much pain are they willing to take? 38 00:01:54,760 --> 00:01:56,720 Speaker 3: Right Well, the threshold for pain appears to be a 39 00:01:56,760 --> 00:01:59,600 Speaker 3: little bit higher than most people believe. But the rhetoric 40 00:01:59,680 --> 00:02:01,440 Speaker 3: right now of the White House is that there needs 41 00:02:01,480 --> 00:02:03,920 Speaker 3: to be this short term adjustment period in order to 42 00:02:03,960 --> 00:02:06,680 Speaker 3: have this longer term growth. And President Trump actually gave 43 00:02:06,760 --> 00:02:09,280 Speaker 3: us a little bit of insight into his thinking during 44 00:02:09,320 --> 00:02:12,400 Speaker 3: that interview that aired over the weekend, actually comparing the 45 00:02:12,480 --> 00:02:15,880 Speaker 3: US to China, saying, in his words that China thinks 46 00:02:15,919 --> 00:02:18,960 Speaker 3: in a one hundred year perspective, whereas the US likes 47 00:02:19,000 --> 00:02:20,959 Speaker 3: to think in quarters. He then used that as a 48 00:02:21,000 --> 00:02:24,400 Speaker 3: way to segue into doubling down on the claim that 49 00:02:24,440 --> 00:02:26,560 Speaker 3: he says he is not watching the stock market, though 50 00:02:26,600 --> 00:02:29,919 Speaker 3: he did noted that he has his eye towards interest rates. 51 00:02:29,919 --> 00:02:31,600 Speaker 3: But it really does track with what we've been hearing 52 00:02:31,600 --> 00:02:33,760 Speaker 3: from White House officials, which is that they are trying 53 00:02:33,960 --> 00:02:36,919 Speaker 3: to have everybody look at the broader macroeconomic picture when 54 00:02:36,919 --> 00:02:40,320 Speaker 3: concerns come up about inflation, or the labor market and 55 00:02:40,400 --> 00:02:43,400 Speaker 3: workforce cuts, or even consumer sentiment. And I actually caught 56 00:02:43,480 --> 00:02:45,639 Speaker 3: up with any C Director Kevin Hassett here on the 57 00:02:45,680 --> 00:02:48,359 Speaker 3: White House North Lawn earlier this morning, and he told 58 00:02:48,400 --> 00:02:50,080 Speaker 3: me that there's really not much they can do until 59 00:02:50,120 --> 00:02:53,160 Speaker 3: the full Trump Agenda is implemented, which really means that 60 00:02:53,200 --> 00:02:55,960 Speaker 3: they are banking on some things that haven't yet quite 61 00:02:55,960 --> 00:02:58,960 Speaker 3: gone into effects, such as a terrorists as a revenue raiser, 62 00:02:59,000 --> 00:03:02,400 Speaker 3: which goes hand in hand with importantly here President Trump's 63 00:03:02,440 --> 00:03:05,520 Speaker 3: tax cut agenda, which Isabelle, we know is not going 64 00:03:05,560 --> 00:03:08,160 Speaker 3: to necessarily be an easy task for this Congress. 65 00:03:08,520 --> 00:03:12,400 Speaker 2: And Tyler, I guess the initial discussion surrounding these tariffs 66 00:03:12,560 --> 00:03:15,600 Speaker 2: from President Trump's administration, where they were really not so 67 00:03:15,639 --> 00:03:18,520 Speaker 2: much a trade war issue but a war against drugs 68 00:03:18,560 --> 00:03:22,520 Speaker 2: and immigration. Is that still the argument that the administration 69 00:03:22,639 --> 00:03:23,040 Speaker 2: is making. 70 00:03:24,080 --> 00:03:26,520 Speaker 3: Well when it comes to those tariffs against Mexico and 71 00:03:26,520 --> 00:03:29,440 Speaker 3: Canada that currently have this USMCA as well as auto 72 00:03:29,520 --> 00:03:32,480 Speaker 3: exemption on them, This administration even over the weekend, said 73 00:03:32,480 --> 00:03:34,760 Speaker 3: that any amount of fentanyl combing over the border is 74 00:03:34,880 --> 00:03:37,040 Speaker 3: too much, and it doesn't really seem like they're moving 75 00:03:37,080 --> 00:03:38,600 Speaker 3: off of that. We're going to them move into this 76 00:03:38,680 --> 00:03:41,960 Speaker 3: national security argument with the steel and aluminum tariffs this week, 77 00:03:42,000 --> 00:03:44,080 Speaker 3: but then we are really pushing ahead to that April 78 00:03:44,120 --> 00:03:47,040 Speaker 3: second date that the administration keeps pushing us towards when 79 00:03:47,080 --> 00:03:49,480 Speaker 3: it comes to the reciprocal tariff plans. We did learn 80 00:03:49,520 --> 00:03:52,880 Speaker 3: that after President Trump had threatened reciprocal tariffs against Canadian 81 00:03:53,480 --> 00:03:56,400 Speaker 3: lumber and dairy, for example, that that likely will not 82 00:03:56,480 --> 00:03:59,480 Speaker 3: take effect until April second, even though he had threatened 83 00:03:59,480 --> 00:04:02,680 Speaker 3: that those could have come sooner. So we're really going 84 00:04:02,720 --> 00:04:04,880 Speaker 3: to start to see this argument of reciprocity as we 85 00:04:04,960 --> 00:04:07,920 Speaker 3: start to expect some more leaders to come here over 86 00:04:08,000 --> 00:04:10,000 Speaker 3: the next couple of weeks, as we beat the drum 87 00:04:10,120 --> 00:04:11,680 Speaker 3: up to that April second date. 88 00:04:12,160 --> 00:04:15,040 Speaker 5: How aligned is President Trump? And Secretary's caught Best that 89 00:04:15,120 --> 00:04:17,440 Speaker 5: we have Trump saying that this is a transition period, 90 00:04:17,560 --> 00:04:19,839 Speaker 5: and we have Best and saying this is a detox period. 91 00:04:21,000 --> 00:04:21,160 Speaker 4: Right. 92 00:04:21,200 --> 00:04:24,120 Speaker 3: Well, they're really trying to put forward this picture that 93 00:04:24,200 --> 00:04:27,400 Speaker 3: the government does need to reduce government spending and that 94 00:04:27,440 --> 00:04:29,800 Speaker 3: does go along with this tax cut agenda. We're going 95 00:04:29,800 --> 00:04:32,839 Speaker 3: to need spending cuts in order to offset the tax cuts, 96 00:04:32,839 --> 00:04:35,560 Speaker 3: and that's something that this Congress in particular is going 97 00:04:35,600 --> 00:04:38,840 Speaker 3: to have to grapple with. Republicans in the House are 98 00:04:38,880 --> 00:04:41,560 Speaker 3: really divided among this issue, particularly when it does come 99 00:04:41,600 --> 00:04:44,240 Speaker 3: to government spending cuts and concerns about what it could 100 00:04:44,240 --> 00:04:47,680 Speaker 3: mean for social programs such as medicaid. That is going 101 00:04:47,720 --> 00:04:50,080 Speaker 3: to be a very complicated factor here as they try 102 00:04:50,120 --> 00:04:52,160 Speaker 3: to get that over the finish line. And we got 103 00:04:52,160 --> 00:04:54,599 Speaker 3: one indication this weekend that they are expecting this to 104 00:04:54,640 --> 00:04:58,960 Speaker 3: be a month's long fight. The House Republicans introducing a 105 00:04:59,040 --> 00:05:02,880 Speaker 3: stopgap measured keep the government funded until September thirtieth, with 106 00:05:02,960 --> 00:05:05,320 Speaker 3: President Trump posting on truth Social that he had asked 107 00:05:05,360 --> 00:05:07,640 Speaker 3: for that date in order to give enough time for 108 00:05:07,720 --> 00:05:10,320 Speaker 3: Republicans to work out the rest of his agenda items. 109 00:05:10,600 --> 00:05:12,680 Speaker 2: All right, Tyler, thank you so much for joining us. 110 00:05:12,720 --> 00:05:14,800 Speaker 2: Really appreciate it. Tyler at Kendall. She's a reporter for 111 00:05:14,839 --> 00:05:16,520 Speaker 2: Bloomberg News down to Washington, DC. 112 00:05:18,600 --> 00:05:22,280 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 113 00:05:22,360 --> 00:05:25,720 Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto 114 00:05:25,839 --> 00:05:28,919 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 115 00:05:28,960 --> 00:05:32,120 Speaker 1: get your podcasts, or watch us live on YouTube. 116 00:05:32,440 --> 00:05:33,960 Speaker 2: So I've got a lot of volatility as the name 117 00:05:34,000 --> 00:05:36,640 Speaker 2: of the game here in marketplaces, and we know that 118 00:05:36,680 --> 00:05:39,240 Speaker 2: markets do not like volatility, so you see that in 119 00:05:39,240 --> 00:05:40,640 Speaker 2: the price action here. Let's see what the. 120 00:05:40,560 --> 00:05:41,360 Speaker 6: Pros are doing here. 121 00:05:41,520 --> 00:05:45,120 Speaker 2: Tim o'bona, what's chief investment strategist at Innovator Capital Management. 122 00:05:45,120 --> 00:05:49,760 Speaker 2: He's somewhere out there in Chicago, one of my favorite towns. Absolutely, Hey, Tim, 123 00:05:49,880 --> 00:05:52,240 Speaker 2: talk to us about these markets here. You talk to 124 00:05:52,279 --> 00:05:55,600 Speaker 2: your clients. How do you is it handholding? Is it 125 00:05:55,839 --> 00:05:57,800 Speaker 2: what are the conversations these days. 126 00:05:58,680 --> 00:06:01,160 Speaker 7: Oh, Paul, there's a lot of jitters out there, and 127 00:06:01,240 --> 00:06:04,359 Speaker 7: every conversation that we are having right now all comes 128 00:06:04,360 --> 00:06:06,000 Speaker 7: back to the question of what's going to be the 129 00:06:06,040 --> 00:06:09,440 Speaker 7: net impact of all these different policies from the Trump administration. 130 00:06:10,160 --> 00:06:13,240 Speaker 7: And you know, right now, I think there's this mindset 131 00:06:13,360 --> 00:06:15,839 Speaker 7: shift that you know, everybody was really excited about the 132 00:06:15,839 --> 00:06:19,200 Speaker 7: pro business policies of the Trump administration. Now I think 133 00:06:19,200 --> 00:06:22,200 Speaker 7: it's becoming pretty clear that Trump realizes he needs to 134 00:06:22,200 --> 00:06:24,919 Speaker 7: slow this economy down if he wants to get interest 135 00:06:24,960 --> 00:06:27,640 Speaker 7: rates and inflation under control. And there's really two ways 136 00:06:28,320 --> 00:06:30,360 Speaker 7: that he's going to be able to do that. One 137 00:06:31,080 --> 00:06:33,480 Speaker 7: is pulling back in government spending and I think you're 138 00:06:33,480 --> 00:06:37,040 Speaker 7: seeing that through through DOGE. And then also with the tariffs, 139 00:06:37,720 --> 00:06:39,920 Speaker 7: and the tariffs we view that as really a tax 140 00:06:40,000 --> 00:06:43,239 Speaker 7: on the consumer that is going to put additional pressure 141 00:06:43,760 --> 00:06:47,240 Speaker 7: on consumers that are already under stress. And I think 142 00:06:47,240 --> 00:06:49,400 Speaker 7: what he's going for here is long you know, long 143 00:06:49,480 --> 00:06:52,000 Speaker 7: term gain with the fact that we know there's going 144 00:06:52,040 --> 00:06:54,920 Speaker 7: to be continued short term pain, and he's okay with that. 145 00:06:55,760 --> 00:06:57,800 Speaker 7: You know, you're not going to get the approval of 146 00:06:57,839 --> 00:07:00,520 Speaker 7: the everyday American if the stock markets going up. You know, 147 00:07:00,720 --> 00:07:04,240 Speaker 7: he counted that the first time constantly, that's not the case. 148 00:07:04,240 --> 00:07:04,560 Speaker 1: This time. 149 00:07:04,600 --> 00:07:06,680 Speaker 7: He's not talking about it at all. And I think 150 00:07:06,680 --> 00:07:09,359 Speaker 7: it really comes back to that realization that if we 151 00:07:09,360 --> 00:07:11,320 Speaker 7: are going to get interest rates down, if we are 152 00:07:11,360 --> 00:07:14,320 Speaker 7: going to get inflation under control, there has to be 153 00:07:14,400 --> 00:07:17,200 Speaker 7: some pain that comes along with that. And I think 154 00:07:17,240 --> 00:07:18,440 Speaker 7: that's what you're seeing right now. 155 00:07:19,200 --> 00:07:21,480 Speaker 5: And note you mentioned that the majority of investors were 156 00:07:21,520 --> 00:07:24,760 Speaker 5: not taking Trump seriously when it comes to tariffs, So 157 00:07:24,800 --> 00:07:26,840 Speaker 5: now it seems like he is serious and the velocity 158 00:07:26,840 --> 00:07:30,679 Speaker 5: of the shift from excitement to fear has been swift. 159 00:07:30,960 --> 00:07:33,040 Speaker 5: How are you trading this market? Where do you hedge? 160 00:07:34,200 --> 00:07:36,400 Speaker 7: Well, you know, really in the bulk of what we 161 00:07:36,480 --> 00:07:39,600 Speaker 7: do is risk management, you know, at all times. And 162 00:07:39,680 --> 00:07:42,000 Speaker 7: if you look at the flows that we've seen here 163 00:07:42,040 --> 00:07:46,800 Speaker 7: recently in the ETF market, we've seen a tremendous amount 164 00:07:46,800 --> 00:07:48,680 Speaker 7: of inflows here to the tune of about a billion 165 00:07:48,720 --> 00:07:51,440 Speaker 7: dollars over the last week and a half into buffered 166 00:07:51,480 --> 00:07:54,640 Speaker 7: ETF strategies. And really what these do is they give 167 00:07:54,680 --> 00:07:58,000 Speaker 7: you a known level of downside protection on an index 168 00:07:58,080 --> 00:08:00,240 Speaker 7: like the S and P five hundred ETF or the 169 00:08:00,320 --> 00:08:04,480 Speaker 7: Nasdaq with known upside exposure. And I think right now, 170 00:08:04,640 --> 00:08:07,160 Speaker 7: we look at all the uncertainty that is out there, 171 00:08:07,440 --> 00:08:09,840 Speaker 7: you know the fact that you know, on the flip 172 00:08:09,840 --> 00:08:11,600 Speaker 7: of a switch, Trump could come out there pull back 173 00:08:11,640 --> 00:08:14,760 Speaker 7: tariffs and this market could rip higher, or you could 174 00:08:14,800 --> 00:08:18,520 Speaker 7: continue to see this tit for tat. There's so much uncertainty. 175 00:08:18,560 --> 00:08:21,400 Speaker 7: And really, what these strategies do and why I think 176 00:08:21,480 --> 00:08:25,200 Speaker 7: so many investors are gravitating towards these, is that they 177 00:08:25,200 --> 00:08:27,760 Speaker 7: do help remove a lot of that uncertainty. They keep 178 00:08:27,800 --> 00:08:31,240 Speaker 7: you invested, which is incredibly important, especially right now, but 179 00:08:31,360 --> 00:08:33,480 Speaker 7: they also are going to help you really hedge out 180 00:08:33,520 --> 00:08:36,520 Speaker 7: and mute a lot of this volatility that we're seeing, 181 00:08:37,040 --> 00:08:38,600 Speaker 7: you know, coming from the Trump administration. 182 00:08:39,679 --> 00:08:42,200 Speaker 2: Talk to us about the fixed income market. 183 00:08:42,200 --> 00:08:42,360 Speaker 6: Here. 184 00:08:42,360 --> 00:08:45,080 Speaker 2: We've got big moves today here in the in the 185 00:08:45,120 --> 00:08:47,920 Speaker 2: bond market, treasuries of ten your ersury up twenty basis points, 186 00:08:47,960 --> 00:08:50,840 Speaker 2: kicking the yield down the like four point two two percent. Here, 187 00:08:51,400 --> 00:08:54,480 Speaker 2: where's opportunity if anywhere in the fixed income market. 188 00:08:55,480 --> 00:08:57,560 Speaker 7: Well, Paul, I think we're starting to get a little 189 00:08:57,600 --> 00:08:59,360 Speaker 7: more more bullish here, and this has been an area 190 00:08:59,360 --> 00:09:02,040 Speaker 7: we've been very bearish on for the last couple of years, 191 00:09:02,120 --> 00:09:04,200 Speaker 7: you know, simply for the fact that you know, most 192 00:09:04,240 --> 00:09:06,480 Speaker 7: advisors that we're working with are using these as a 193 00:09:06,559 --> 00:09:10,640 Speaker 7: risk management tool, right, and we continue to see BONN 194 00:09:10,720 --> 00:09:13,920 Speaker 7: yields in equity prices moving in the same direction that 195 00:09:13,960 --> 00:09:17,480 Speaker 7: you don't have that diversification that most advisors are going for. 196 00:09:18,360 --> 00:09:20,480 Speaker 7: With that, I think with some of the changes that 197 00:09:20,520 --> 00:09:24,480 Speaker 7: we've seen here recently, they're starting to become more opportunities. 198 00:09:25,160 --> 00:09:27,640 Speaker 7: You know, if you look at BONN yelds and inflation 199 00:09:27,720 --> 00:09:30,840 Speaker 7: really over the last several years, they followed this this 200 00:09:30,960 --> 00:09:34,240 Speaker 7: government deficit as a percentage of GDP almost in lockstep 201 00:09:34,320 --> 00:09:36,800 Speaker 7: with one another. So as we see more and more 202 00:09:37,200 --> 00:09:40,079 Speaker 7: you know, hopefully more success from from the Department of 203 00:09:40,120 --> 00:09:43,200 Speaker 7: Government efficiency from the Trump administration being able to pull 204 00:09:43,280 --> 00:09:46,880 Speaker 7: back that spending, I think that gives us more hope 205 00:09:46,960 --> 00:09:49,720 Speaker 7: that we can see, uh, you know, interest rates start 206 00:09:49,760 --> 00:09:52,679 Speaker 7: to work, or that inverse correlation start to work a 207 00:09:52,720 --> 00:09:56,360 Speaker 7: little bit better, that interest rates can come down. Uh 208 00:09:56,559 --> 00:10:00,360 Speaker 7: and again a slowing economy too, that that should help 209 00:10:00,440 --> 00:10:02,600 Speaker 7: us out on the longer end of the yield curve. 210 00:10:02,679 --> 00:10:04,840 Speaker 7: So I still do think it's it's a risk with 211 00:10:04,880 --> 00:10:07,319 Speaker 7: the environment that we're in right now with core inflation 212 00:10:07,440 --> 00:10:10,160 Speaker 7: still elevated, but I think for the first time in 213 00:10:10,200 --> 00:10:12,920 Speaker 7: a couple of years, we're starting to see signs, you know, 214 00:10:12,960 --> 00:10:16,080 Speaker 7: that the long to intermediate duration bond trade could be 215 00:10:16,080 --> 00:10:17,360 Speaker 7: showing some signs of life here. 216 00:10:17,960 --> 00:10:20,160 Speaker 5: When it comes to inflation, we have Mohammed El Ariyan 217 00:10:20,240 --> 00:10:22,760 Speaker 5: and an opinion piece today saying that the FEDS insistence 218 00:10:22,800 --> 00:10:27,000 Speaker 5: and keeping inflation to two percent maybe limiting its flexibility. 219 00:10:27,040 --> 00:10:29,640 Speaker 5: Where do you stand on that on your inflation views. 220 00:10:30,520 --> 00:10:32,520 Speaker 7: Well, I don't think the Fed is going to move 221 00:10:32,559 --> 00:10:34,400 Speaker 7: on it, so I think it's a fun thing to debate. 222 00:10:34,480 --> 00:10:37,320 Speaker 7: I don't necessarily know if it helps investors in the 223 00:10:37,400 --> 00:10:41,440 Speaker 7: short term. And look, you look back in the history 224 00:10:41,640 --> 00:10:45,920 Speaker 7: of the US any time that we have seen core 225 00:10:45,960 --> 00:10:50,640 Speaker 7: inflation starting off north of five percent or above, never 226 00:10:50,760 --> 00:10:53,520 Speaker 7: before have we had a situation where we've gotten back 227 00:10:53,559 --> 00:10:57,599 Speaker 7: down to two percent without a recessionary hit to the 228 00:10:57,679 --> 00:11:00,560 Speaker 7: labor market coming. And you know what we've heard for 229 00:11:00,600 --> 00:11:02,280 Speaker 7: the last several years, even from a lot of our 230 00:11:02,480 --> 00:11:05,440 Speaker 7: you know, advisor clients, is that this time is different. 231 00:11:06,280 --> 00:11:08,320 Speaker 7: And look, I hope it is. I hope this time 232 00:11:08,400 --> 00:11:10,520 Speaker 7: is different where we can get back down to that 233 00:11:10,520 --> 00:11:13,400 Speaker 7: two percent target without a huge hit to the labor 234 00:11:13,440 --> 00:11:15,840 Speaker 7: market taking place. But we don't want to just go 235 00:11:15,880 --> 00:11:18,120 Speaker 7: out there and position our portfolios like that's going to 236 00:11:18,120 --> 00:11:21,400 Speaker 7: be the case, because it would, in fact be a 237 00:11:21,559 --> 00:11:24,320 Speaker 7: unicorn event. And I think, you know, a lot of 238 00:11:24,360 --> 00:11:26,240 Speaker 7: the you know, this comes back down to how strong 239 00:11:26,240 --> 00:11:29,320 Speaker 7: the labor market has been over the last couple of years. 240 00:11:29,360 --> 00:11:32,080 Speaker 7: Wage growth still running north of you know, well north 241 00:11:32,080 --> 00:11:35,440 Speaker 7: of four percent. That's not conducive with a two percent 242 00:11:35,520 --> 00:11:38,320 Speaker 7: inflation target at all. And you know, I think what 243 00:11:38,520 --> 00:11:40,320 Speaker 7: gives me a little bit of hope that we are 244 00:11:40,360 --> 00:11:42,760 Speaker 7: going to get back down there, you know, within the 245 00:11:42,800 --> 00:11:44,760 Speaker 7: next year or so now is if you look at 246 00:11:44,800 --> 00:11:47,959 Speaker 7: all the layoffs that are taking place within the government 247 00:11:48,240 --> 00:11:50,320 Speaker 7: over the last couple of years, you've had about a 248 00:11:50,400 --> 00:11:53,440 Speaker 7: quarter of all new jobs that have been created by 249 00:11:53,480 --> 00:11:56,240 Speaker 7: the government. We're starting to pull that back. You're starting 250 00:11:56,280 --> 00:11:58,280 Speaker 7: to see you know, a lot of those layoffs, which 251 00:11:58,280 --> 00:12:00,439 Speaker 7: I've seen recent estimates in the three hunds to five 252 00:12:00,520 --> 00:12:04,360 Speaker 7: hundred thousand range, those are going to be jobs that 253 00:12:04,400 --> 00:12:06,760 Speaker 7: are going to be replaced in the private sectors. So 254 00:12:06,800 --> 00:12:09,800 Speaker 7: there's going to be a lot more supply coming to market, 255 00:12:09,960 --> 00:12:12,680 Speaker 7: which I'm hopeful that that will really soften things up 256 00:12:12,720 --> 00:12:13,520 Speaker 7: to where we need to be. 257 00:12:13,880 --> 00:12:15,560 Speaker 2: Tim, thank you so much for joining us. Timber Bouden, 258 00:12:15,600 --> 00:12:19,240 Speaker 2: what's chief investment strategies from Innovator Capital Management. 259 00:12:20,880 --> 00:12:24,600 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 260 00:12:24,679 --> 00:12:28,040 Speaker 1: weekdays at ten am Eastern on Applecarclay and Android Auto 261 00:12:28,160 --> 00:12:31,240 Speaker 1: with the Bloomberg Business app. Listen on demand wherever you 262 00:12:31,280 --> 00:12:34,640 Speaker 1: get your podcasts, or watch us live on YouTube. 263 00:12:34,960 --> 00:12:37,000 Speaker 2: Is Bill Lee Paul Sweeney live here in on our 264 00:12:37,000 --> 00:12:38,160 Speaker 2: Bloomberg Interrective Broker. 265 00:12:38,440 --> 00:12:39,280 Speaker 6: We're studio. 266 00:12:39,280 --> 00:12:41,440 Speaker 2: We're streaming live on YouTube at over to YouTube dot 267 00:12:41,480 --> 00:12:45,000 Speaker 2: com and search Bloomberg Podcast Live, and that's where you're fine. 268 00:12:45,200 --> 00:12:47,199 Speaker 2: We talk every week to our good friends at Bloomberg 269 00:12:47,440 --> 00:12:50,719 Speaker 2: New Energy Finance b n EF. Now we've got to 270 00:12:50,720 --> 00:12:53,120 Speaker 2: talk about tariffs and what that means for green sectors 271 00:12:53,120 --> 00:12:56,119 Speaker 2: from energy to biofuels. Today we do that with Antoine 272 00:12:56,200 --> 00:13:01,160 Speaker 2: Wagner Jones, head of Trade and Supply Chains for bn Yeah, Antoine, 273 00:13:01,200 --> 00:13:05,240 Speaker 2: thanks for being in our studio here. Tariffs cannot be 274 00:13:05,400 --> 00:13:10,040 Speaker 2: good for the evolution into green energy. How do you 275 00:13:10,040 --> 00:13:14,079 Speaker 2: guys think about the wrists that are being introduced into. 276 00:13:13,920 --> 00:13:18,600 Speaker 8: That, Yeah, there's at a time where everything is whipsawing 277 00:13:18,720 --> 00:13:21,240 Speaker 8: and we're seeing a lot of differences in terms of 278 00:13:21,240 --> 00:13:25,240 Speaker 8: policy approaches. What's really interesting is to see areas of continuity. 279 00:13:25,440 --> 00:13:28,360 Speaker 8: Trump is very much on board with manufacturing in the US. 280 00:13:28,720 --> 00:13:30,360 Speaker 8: That was something that was very much a part of 281 00:13:30,400 --> 00:13:33,280 Speaker 8: the Biden administration. The way in which that's happening is 282 00:13:33,440 --> 00:13:37,760 Speaker 8: very different, however, as central planks of Biden's approach was 283 00:13:37,760 --> 00:13:40,800 Speaker 8: to be Okay, we're going to onshore semiconductors, We're going 284 00:13:40,880 --> 00:13:44,839 Speaker 8: to onshore clean energy manufacturing. And what we've seen now 285 00:13:44,960 --> 00:13:49,760 Speaker 8: is attack on the Inflation Reduction Act rhetorically and a 286 00:13:49,880 --> 00:13:52,160 Speaker 8: version that's starting to build on the Chips Act. These 287 00:13:52,200 --> 00:13:56,000 Speaker 8: big sources of finance for a lot of these projects 288 00:13:56,040 --> 00:13:57,920 Speaker 8: that are happening in the US at a time when 289 00:13:58,000 --> 00:14:00,000 Speaker 8: tariffs are starting to be stepped up as a respon 290 00:14:00,040 --> 00:14:01,560 Speaker 8: once and this is building on a lot of tariffs 291 00:14:01,559 --> 00:14:04,360 Speaker 8: that we saw on the Biden administration front. That has 292 00:14:04,400 --> 00:14:07,000 Speaker 8: to be twinned with support for some of these different sectors. 293 00:14:07,320 --> 00:14:09,600 Speaker 8: When that's being pulled out, then it starts to become 294 00:14:09,800 --> 00:14:12,880 Speaker 8: very uncertain, and when you're seeing the levels of volatility 295 00:14:12,920 --> 00:14:16,200 Speaker 8: around tariff's being announced, being pulled back, being re announced 296 00:14:16,200 --> 00:14:18,200 Speaker 8: when things are really unclear in terms of what's going 297 00:14:18,240 --> 00:14:20,840 Speaker 8: to happen. That's not great for businesses that need to 298 00:14:20,880 --> 00:14:26,120 Speaker 8: make decisions on investment that has quite a long payback period. 299 00:14:26,600 --> 00:14:30,000 Speaker 8: And we're not quite seeing the upsurge in manufacturing investment 300 00:14:30,040 --> 00:14:33,560 Speaker 8: that we're expecting to see over the first few months 301 00:14:33,600 --> 00:14:36,040 Speaker 8: as a result. So it's an interesting time. There's a 302 00:14:36,080 --> 00:14:38,520 Speaker 8: lot in flux. It's bad news for leek green energy, 303 00:14:38,560 --> 00:14:41,320 Speaker 8: as you can expect, but it's also not necessarily great 304 00:14:41,320 --> 00:14:42,960 Speaker 8: news for some of the objectives that are a central 305 00:14:42,960 --> 00:14:46,480 Speaker 8: part of Trump's agenda, whether that's building out data centers. 306 00:14:46,520 --> 00:14:48,040 Speaker 8: You need a lot of grid equipment, a lot of 307 00:14:48,080 --> 00:14:50,560 Speaker 8: that comes from Mexico that suddenly becomes a lot more 308 00:14:50,560 --> 00:14:52,760 Speaker 8: expensive if you need all the transformers that you need, 309 00:14:53,600 --> 00:14:56,360 Speaker 8: and the examples along that line of thinking just on 310 00:14:56,400 --> 00:14:58,800 Speaker 8: ever ending. So it's a lot of uncertainty and not 311 00:14:58,840 --> 00:15:01,560 Speaker 8: a great outlook when it comes to to you know, 312 00:15:01,680 --> 00:15:04,800 Speaker 8: this idea that tariff's equals manufacturing, but actually the path 313 00:15:04,800 --> 00:15:07,560 Speaker 8: to getting there is a lot more is a lot 314 00:15:07,600 --> 00:15:09,320 Speaker 8: more fraught than I think is appreciated. 315 00:15:09,920 --> 00:15:11,440 Speaker 5: I was just going to ask what we see a 316 00:15:11,480 --> 00:15:14,280 Speaker 5: shift into em Are they starting to ramp up imports 317 00:15:14,280 --> 00:15:16,560 Speaker 5: of clean tech products? I mean maybe they could stand 318 00:15:16,560 --> 00:15:17,080 Speaker 5: to benefit. 319 00:15:18,640 --> 00:15:24,640 Speaker 8: Yeah, it's we generally speaking, yes, we could start to 320 00:15:24,680 --> 00:15:28,080 Speaker 8: see arise from that perspective. But again, I think a 321 00:15:28,080 --> 00:15:31,720 Speaker 8: lot of the constraining factors they're on grid investment rather 322 00:15:31,800 --> 00:15:34,400 Speaker 8: than the cost of clean energy, and that's where we're 323 00:15:34,440 --> 00:15:36,680 Speaker 8: starting to see some real pain points when already there's 324 00:15:36,680 --> 00:15:40,480 Speaker 8: some big shortages of large power transformers, for example, and 325 00:15:40,520 --> 00:15:43,040 Speaker 8: that's something that is repeatedly a huge concern and something 326 00:15:43,080 --> 00:15:46,400 Speaker 8: that has made materially more difficult to integrate that sort 327 00:15:46,400 --> 00:15:49,240 Speaker 8: of clean energy if you're making building out the grid 328 00:15:49,280 --> 00:15:51,560 Speaker 8: a lot harder. So there's a lot of recurring themes 329 00:15:51,600 --> 00:15:52,479 Speaker 8: that keep popping. 330 00:15:52,240 --> 00:15:52,960 Speaker 6: Up, and that's one of them. 331 00:15:53,600 --> 00:15:57,120 Speaker 2: How about near shoring. We thought about North America as 332 00:15:57,200 --> 00:16:00,840 Speaker 2: near shoring Canada and Mexico, but that may not be 333 00:16:01,120 --> 00:16:04,520 Speaker 2: enough because now we're talking putting tariffs on those folks 334 00:16:04,600 --> 00:16:07,160 Speaker 2: as well. So it sounds like if you want to 335 00:16:07,200 --> 00:16:12,240 Speaker 2: manufacture anything, it's going to be almost entirely United States based. 336 00:16:12,040 --> 00:16:14,160 Speaker 8: And that's what's fascinating. So over the last few years, 337 00:16:14,200 --> 00:16:18,600 Speaker 8: we've seen all these different buzzwords on shoring, reshoring, near shuring, 338 00:16:18,720 --> 00:16:21,240 Speaker 8: near shuring. This idea which was promoted by the Biden 339 00:16:21,240 --> 00:16:24,960 Speaker 8: administration that will have certain incentives for manufacturing, will extend 340 00:16:25,040 --> 00:16:28,760 Speaker 8: those incentives for manufacturing parts of evs, for example, to 341 00:16:28,800 --> 00:16:33,280 Speaker 8: our North American neighbors in Canada and Mexico. Now, when 342 00:16:33,280 --> 00:16:38,720 Speaker 8: you're starting to impose tariffs on those same neighbors, then 343 00:16:38,760 --> 00:16:41,400 Speaker 8: you're flying in the face of that trend, and it 344 00:16:41,440 --> 00:16:43,320 Speaker 8: really seems like that sort of dead in the water. 345 00:16:43,960 --> 00:16:45,440 Speaker 8: I don't think we're going to see the death of 346 00:16:45,480 --> 00:16:49,080 Speaker 8: integrated value chains for the automotive sector over the next 347 00:16:49,120 --> 00:16:52,040 Speaker 8: few weeks. That's going to remain in North America, across 348 00:16:52,080 --> 00:16:54,720 Speaker 8: North America because of the inertia in the system, the 349 00:16:54,720 --> 00:16:56,400 Speaker 8: efforts that are being made by lots of these the 350 00:16:56,400 --> 00:17:00,000 Speaker 8: big three automakers for example. But at the same time, 351 00:17:00,040 --> 00:17:01,520 Speaker 8: I don't think we're going to see the step up 352 00:17:01,520 --> 00:17:05,000 Speaker 8: in investment in Mexican manufacturing that was due to surf 353 00:17:05,080 --> 00:17:09,520 Speaker 8: the US market through this trend of nailshuring, which now 354 00:17:09,520 --> 00:17:11,040 Speaker 8: I really don't see as a poltical priority. 355 00:17:11,080 --> 00:17:13,399 Speaker 2: All interesting, All right, and Swan, thank you so much 356 00:17:13,440 --> 00:17:17,000 Speaker 2: for joining US. Antoine Vagno Jones, head of Trade and 357 00:17:17,080 --> 00:17:20,360 Speaker 2: Supply Chains for BNF. Joining us here on our Bloomberg 358 00:17:20,400 --> 00:17:21,840 Speaker 2: Interactive Brokers Studio. 359 00:17:23,520 --> 00:17:27,240 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 360 00:17:27,320 --> 00:17:30,680 Speaker 1: weekdays at ten am Eastern on Applecarclay and Android Auto 361 00:17:30,800 --> 00:17:33,879 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 362 00:17:33,880 --> 00:17:37,280 Speaker 1: get your podcasts, or watch us live on YouTube. 363 00:17:37,400 --> 00:17:41,520 Speaker 2: Earlier today, Joe Dominguez see You, of Constellation Energy, spoke 364 00:17:41,560 --> 00:17:45,000 Speaker 2: with Bloomberg Intelligence co host Alex Steele about the impact 365 00:17:45,040 --> 00:17:48,760 Speaker 2: of tariffs on energy investments at Sarah Week in Houston. 366 00:17:48,880 --> 00:17:52,040 Speaker 2: Joe was first asked about the recession. It's slowing growth, 367 00:17:52,080 --> 00:17:54,639 Speaker 2: and he was asked if he's noticing any of that 368 00:17:54,800 --> 00:17:56,200 Speaker 2: at Constellations take a listen. 369 00:17:56,640 --> 00:17:58,560 Speaker 9: We don't see an end in sight right now. We're 370 00:17:58,560 --> 00:18:01,159 Speaker 9: starting to see it get rational, and by that I 371 00:18:01,240 --> 00:18:04,240 Speaker 9: mean we're not seeing the same request for data centers 372 00:18:04,280 --> 00:18:06,880 Speaker 9: popping up in five or six utilities. So I think 373 00:18:06,920 --> 00:18:10,560 Speaker 9: the hyperscalers are beginning to figure out where they want 374 00:18:10,560 --> 00:18:13,560 Speaker 9: to go. And it's not the frenzy of activity, but 375 00:18:13,600 --> 00:18:16,280 Speaker 9: in terms of the deal pace, it continues the same 376 00:18:16,280 --> 00:18:17,520 Speaker 9: way we saw it last year. 377 00:18:17,800 --> 00:18:19,879 Speaker 10: And how are the deals like, how is it to 378 00:18:19,920 --> 00:18:20,600 Speaker 10: get them done? 379 00:18:21,040 --> 00:18:23,600 Speaker 4: Is it hard? Is it coming up with a structure 380 00:18:23,760 --> 00:18:25,600 Speaker 4: the money? Like? What is it? 381 00:18:25,600 --> 00:18:28,520 Speaker 9: It's not hard, but they're complicated because they're multi billion 382 00:18:28,560 --> 00:18:31,919 Speaker 9: dollar deals, right, So we're talking about twenty year deals 383 00:18:31,960 --> 00:18:35,199 Speaker 9: for power that sometimes could cost five or ten billion dollars. 384 00:18:35,240 --> 00:18:38,159 Speaker 6: So, like any commercial deal of that scale, it's. 385 00:18:38,040 --> 00:18:40,520 Speaker 9: Going to take a long time to negotiate, and each 386 00:18:40,600 --> 00:18:42,560 Speaker 9: time you need to do that with a new party, 387 00:18:42,840 --> 00:18:45,160 Speaker 9: you have to go through all the terms and conditions again. 388 00:18:45,320 --> 00:18:47,960 Speaker 9: But I think we're going to get some some deals 389 00:18:47,960 --> 00:18:48,600 Speaker 9: done this year. 390 00:18:48,880 --> 00:18:51,560 Speaker 10: Can you give me some hints, like in maybe areas, 391 00:18:51,640 --> 00:18:54,760 Speaker 10: what kind of deals, like what kind of power? 392 00:18:55,160 --> 00:18:58,560 Speaker 9: Well, I think nuclear continues to be very attractive for 393 00:18:58,600 --> 00:19:01,320 Speaker 9: the hyper scalers because it operates twenty four to seven, 394 00:19:01,680 --> 00:19:04,240 Speaker 9: it's cleaned, so it meets their environmental goals, and it 395 00:19:04,280 --> 00:19:06,960 Speaker 9: matches up really well from a reliability standpoint. 396 00:19:07,119 --> 00:19:08,679 Speaker 4: So let's go Tom money then for a second. 397 00:19:08,880 --> 00:19:11,800 Speaker 10: So coming up with the deals is very interesting, particularly 398 00:19:11,800 --> 00:19:14,199 Speaker 10: the one you do with Microsoft to restart three Mile Island. 399 00:19:14,880 --> 00:19:16,399 Speaker 4: Are your costs going up right now? 400 00:19:18,200 --> 00:19:18,880 Speaker 6: A little bit? 401 00:19:19,000 --> 00:19:22,520 Speaker 9: But it's really labor inflation that we mostly see. Now, 402 00:19:22,520 --> 00:19:25,720 Speaker 9: Remember we have existing nuclear plants that are already built. 403 00:19:25,880 --> 00:19:28,399 Speaker 9: So a lot of the costs of the raw materials 404 00:19:28,440 --> 00:19:31,879 Speaker 9: that you're seeing, you know, potentially impacted by tariffs in 405 00:19:31,880 --> 00:19:34,800 Speaker 9: the long run, but in escalation through inflation. We're not 406 00:19:34,840 --> 00:19:37,960 Speaker 9: seeing much of that tiny bid on uranium pricing. 407 00:19:38,240 --> 00:19:40,600 Speaker 6: But most of what we're seeing is labor contracting. 408 00:19:40,720 --> 00:19:43,439 Speaker 10: So are you planning for a tariff increase that we 409 00:19:43,440 --> 00:19:45,720 Speaker 10: should be seeing on stealing aluminum on Wednesday? 410 00:19:45,800 --> 00:19:48,359 Speaker 4: Right? You would have no one that would have limited impact. 411 00:19:48,400 --> 00:19:50,720 Speaker 6: How do you see that pretty limited impact on us? 412 00:19:50,800 --> 00:19:53,920 Speaker 9: It would impact replacement parts and that sort of thing, 413 00:19:54,000 --> 00:19:57,520 Speaker 9: but it's going to be a deminimous impact on our budget. 414 00:19:57,640 --> 00:20:00,639 Speaker 10: And if you wind up seeing an increase in labor, 415 00:20:01,080 --> 00:20:04,000 Speaker 10: how does that change in your contracts? Like you already 416 00:20:04,000 --> 00:20:06,639 Speaker 10: said it, you have to go back to them and say, hey, listen, 417 00:20:06,960 --> 00:20:08,720 Speaker 10: we got to renegotiate my costs are going on. 418 00:20:08,960 --> 00:20:12,000 Speaker 9: No, there's no reopeners up or down for those sorts 419 00:20:12,000 --> 00:20:12,520 Speaker 9: of inflation. 420 00:20:12,640 --> 00:20:13,800 Speaker 4: So you're really taking on that risk. 421 00:20:14,000 --> 00:20:16,160 Speaker 9: Sure, yeah, yeah, and we're taking it on for over 422 00:20:16,240 --> 00:20:19,560 Speaker 9: twenty year period. And that's the importance of being able 423 00:20:19,600 --> 00:20:22,600 Speaker 9: to do this with nuclear Right, we know exactly what 424 00:20:22,600 --> 00:20:25,320 Speaker 9: our cost structure is going to be within a range 425 00:20:25,520 --> 00:20:27,400 Speaker 9: for ten and twenty years. 426 00:20:27,400 --> 00:20:28,480 Speaker 6: Harder to do with our. 427 00:20:28,440 --> 00:20:31,160 Speaker 9: Natural gas assets, where we don't know what the price 428 00:20:31,160 --> 00:20:33,120 Speaker 9: of natural gas is going to be ten years out, 429 00:20:33,240 --> 00:20:35,320 Speaker 9: or whether we're going to have a carbon tax, or 430 00:20:35,359 --> 00:20:37,639 Speaker 9: what the changes in environmental regulations are. 431 00:20:37,480 --> 00:20:37,840 Speaker 6: Going to be. 432 00:20:37,960 --> 00:20:39,000 Speaker 4: So how do you manage that risk? 433 00:20:39,200 --> 00:20:42,119 Speaker 9: Well, I think what's really difficult to do that in 434 00:20:42,160 --> 00:20:44,600 Speaker 9: the case of natural gas. I think they're what you're 435 00:20:44,640 --> 00:20:47,440 Speaker 9: doing is something that looks more like an index product 436 00:20:47,440 --> 00:20:51,000 Speaker 9: that is indexed to either inflation or natural gas prices. 437 00:20:51,520 --> 00:20:54,080 Speaker 10: When you talk about the different parts of your business, 438 00:20:54,280 --> 00:20:56,600 Speaker 10: how much of the capex that you're spending is going 439 00:20:56,680 --> 00:21:01,120 Speaker 10: to new stuff, beefing up old stuff, or just replacing 440 00:21:01,119 --> 00:21:02,440 Speaker 10: and making sure everything stays on track. 441 00:21:02,560 --> 00:21:06,200 Speaker 9: Yeah, So for us ALEX we face a critical decision 442 00:21:06,359 --> 00:21:09,560 Speaker 9: as to whether to relicnse the nuclear plants for another 443 00:21:09,640 --> 00:21:12,480 Speaker 9: twenty years, and we're facing that across the fleet. 444 00:21:12,840 --> 00:21:13,840 Speaker 6: So when you say. 445 00:21:13,680 --> 00:21:17,120 Speaker 9: New, if we don't do this, it's going to be retired, 446 00:21:17,240 --> 00:21:21,119 Speaker 9: very much like Three Mile Island was retired. So the 447 00:21:21,240 --> 00:21:25,680 Speaker 9: distinction between keeping existing open and something that's truly new 448 00:21:25,760 --> 00:21:27,119 Speaker 9: is immaterial. 449 00:21:27,240 --> 00:21:29,879 Speaker 6: Right If it's gone. It's gone. It's the same as 450 00:21:29,920 --> 00:21:31,160 Speaker 6: if it were never built. 451 00:21:31,440 --> 00:21:34,440 Speaker 9: So we are investing all of our monies to secure 452 00:21:34,520 --> 00:21:38,040 Speaker 9: that fleet for the future, and we're also doing uprights 453 00:21:38,119 --> 00:21:40,280 Speaker 9: and restarts and other things like that. In terms of 454 00:21:40,280 --> 00:21:43,520 Speaker 9: a percentage to your question, I would say ninety percent 455 00:21:43,560 --> 00:21:47,200 Speaker 9: of our spend is in the existing assets and getting 456 00:21:47,240 --> 00:21:49,240 Speaker 9: them ready to run for decades to come. 457 00:21:49,400 --> 00:21:53,280 Speaker 10: So when we talk about power demand booming and increasing 458 00:21:53,680 --> 00:21:57,919 Speaker 10: by multiple digits, right, I mean ten percent would be huge. 459 00:21:58,680 --> 00:22:01,040 Speaker 10: How do you play that it's not new, is it 460 00:22:01,200 --> 00:22:02,240 Speaker 10: just expanding? 461 00:22:02,880 --> 00:22:03,920 Speaker 6: Well, it is expanding. 462 00:22:03,920 --> 00:22:07,200 Speaker 9: A lot of our clients are interesting interested in operating 463 00:22:07,280 --> 00:22:11,160 Speaker 9: that's increasing the output of existing nuclear plants, and we're 464 00:22:11,200 --> 00:22:14,280 Speaker 9: doing that in a number of different regions. Obviously, the 465 00:22:14,320 --> 00:22:16,919 Speaker 9: restart is more limited. You had one plant there that 466 00:22:16,960 --> 00:22:18,840 Speaker 9: you could turn on, and I think there might be 467 00:22:18,840 --> 00:22:21,359 Speaker 9: another in the nation. And then the rest of that 468 00:22:22,000 --> 00:22:26,119 Speaker 9: is going to be probably spent on renewables, storage and 469 00:22:26,240 --> 00:22:28,800 Speaker 9: natural gas for the time being, and then the fullness 470 00:22:28,840 --> 00:22:30,879 Speaker 9: of time new nuclear m and a for that. 471 00:22:30,960 --> 00:22:32,720 Speaker 10: I know you just bought Calpine, so that really beefs 472 00:22:32,800 --> 00:22:35,520 Speaker 10: up your natural gas. Nuclear is now fifty percent of 473 00:22:35,560 --> 00:22:37,840 Speaker 10: your portfolio. Versus A seventy. That was a big shift. 474 00:22:38,320 --> 00:22:39,560 Speaker 10: What else is in your pipeline for. 475 00:22:39,480 --> 00:22:41,480 Speaker 6: That, Well, we've got a lot on our plate. 476 00:22:41,800 --> 00:22:44,200 Speaker 9: We've got a lot of food d Yeah, and so 477 00:22:44,440 --> 00:22:47,240 Speaker 9: this year we're going to spend making sure that we're 478 00:22:47,280 --> 00:22:49,479 Speaker 9: ready to integrate Calpine. 479 00:22:49,080 --> 00:22:51,800 Speaker 6: And prepared for regulatory approvals at the back end of 480 00:22:51,840 --> 00:22:52,080 Speaker 6: the year. 481 00:22:52,119 --> 00:22:54,000 Speaker 9: But as you said, it's a big deal, and I 482 00:22:54,000 --> 00:22:56,639 Speaker 9: think what we've indicated as a company is M and 483 00:22:56,720 --> 00:22:59,080 Speaker 9: A is a big part of our strategy. 484 00:22:59,280 --> 00:23:02,879 Speaker 10: Yes, M and A in beefing up nuclear, natural gas, 485 00:23:02,960 --> 00:23:04,160 Speaker 10: or you want to diversal all of the. 486 00:23:04,119 --> 00:23:05,200 Speaker 6: Above, all of the above. 487 00:23:05,680 --> 00:23:08,120 Speaker 9: I think storage is going to increasingly be a part 488 00:23:08,119 --> 00:23:11,280 Speaker 9: of the story, so we'll look at those opportunities as well. 489 00:23:11,600 --> 00:23:13,600 Speaker 10: Everyone now wants to get into power. It is the 490 00:23:13,680 --> 00:23:16,520 Speaker 10: coolest thing right now in the market. Whether you're looking 491 00:23:16,560 --> 00:23:20,240 Speaker 10: integrated utilities, regulated utilities, even energy companies, are you seeing 492 00:23:20,240 --> 00:23:21,040 Speaker 10: more competition. 493 00:23:21,280 --> 00:23:24,119 Speaker 9: I think what people are trying to figure out is 494 00:23:24,160 --> 00:23:28,000 Speaker 9: whether they too can secure longer term contracts. I don't 495 00:23:28,000 --> 00:23:31,720 Speaker 9: see people building spec power plants hoping, you know, the 496 00:23:31,800 --> 00:23:35,920 Speaker 9: demand will come. So I think there's going to be 497 00:23:35,960 --> 00:23:38,399 Speaker 9: a lot of interest there. But it's largely going to 498 00:23:38,400 --> 00:23:41,440 Speaker 9: be fossil. It'll continue to be renewables, but it always 499 00:23:41,520 --> 00:23:44,240 Speaker 9: has been renewables, and then we'll see whether they could 500 00:23:44,240 --> 00:23:45,200 Speaker 9: get deals done. 501 00:23:46,080 --> 00:23:46,399 Speaker 7: All right. 502 00:23:46,440 --> 00:23:48,879 Speaker 2: That was Alex Steel. Bloomberg is Alex Steel speaking with 503 00:23:48,920 --> 00:23:52,399 Speaker 2: Joe Dominga SI Constellation Energy down there in Houston at 504 00:23:52,400 --> 00:23:55,400 Speaker 2: the Sarah week At conference, talking about the energy bis, 505 00:23:55,480 --> 00:23:59,119 Speaker 2: particularly on the nuclear energy side, where Constellation has a 506 00:23:59,160 --> 00:23:59,680 Speaker 2: big plate. 507 00:24:00,720 --> 00:24:05,439 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 508 00:24:05,600 --> 00:24:09,600 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 509 00:24:09,800 --> 00:24:13,080 Speaker 1: ten am to noon Eastern on Bloomberg dot com, the 510 00:24:13,160 --> 00:24:17,040 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 511 00:24:17,040 --> 00:24:20,359 Speaker 1: can also watch us live every weekday on YouTube and 512 00:24:20,560 --> 00:24:22,520 Speaker 1: always on the Bloomberg terminal