WEBVTT - US-Iran Interim Deal and Fed Chair Warsh 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.280 --> 0:00:30.960 Rebecca Patterson right now to be kind senior fellow with 0:00:31.040 --> 0:00:34.479 the Council on Foreign Relations. Her work at Bridgwater bessemer 0:00:34.520 --> 0:00:37.520 at JP Morgan over the years, thrilled she could join. 0:00:38.400 --> 0:00:41.600 I guess I gotta do the FED meeting. To me, 0:00:42.000 --> 0:00:46.040 it could be dramatic. If he's going to change things. 0:00:46.640 --> 0:00:49.720 He doesn't want to dawdle around, does he mean? 0:00:49.760 --> 0:00:52.680 I think Priority one, two and three this week is 0:00:53.040 --> 0:00:56.640 reinforce the Fed's credibility. You don't want any questions about 0:00:56.680 --> 0:01:00.320 any political bias. So that's goal number one for Kevin 0:01:00.360 --> 0:01:02.279 Warsh this week, I think, which he should be able 0:01:02.280 --> 0:01:05.959 to execute beautifully. I think beyond that, if he does 0:01:06.000 --> 0:01:08.920 a press conference, I expect he will, but it's not 0:01:09.080 --> 0:01:12.959 a given. If he does a press conference, then that'll 0:01:12.959 --> 0:01:15.520 be his opportunity to lay out the priorities. What is 0:01:15.560 --> 0:01:16.319 he going to focus on? 0:01:16.440 --> 0:01:16.720 First? 0:01:16.760 --> 0:01:19.680 I would imagine he wants to review all the economic models, 0:01:19.720 --> 0:01:23.160 the processes. He's going to review communication. He's already been 0:01:23.240 --> 0:01:27.120 very vocal about having less communication, think more less. 0:01:26.959 --> 0:01:28.319 It has been for years. 0:01:28.400 --> 0:01:31.120 Yes, a new thing, the balance sheet will wait. 0:01:31.480 --> 0:01:36.160 Yeah, so, Rebecca. Obviously he's got some level of pressure 0:01:36.280 --> 0:01:38.880 from the President from the White House to lower rates. 0:01:38.920 --> 0:01:41.880 But wait, the data is not there. He's got a 0:01:41.920 --> 0:01:43.320 committee he has to deal with. 0:01:43.440 --> 0:01:43.640 Yep. 0:01:44.200 --> 0:01:46.920 Wait, I would think the messaging this week is as 0:01:47.000 --> 0:01:48.440 much for the rest of US i e. 0:01:48.560 --> 0:01:52.120 The market, maybe even more so for the President. Yeah. 0:01:52.160 --> 0:01:55.840 I mean, he's got a difficult needle to thread here, right, 0:01:56.080 --> 0:01:59.880 keep the President on his side ideally, but build credibility 0:02:00.120 --> 0:02:03.520 trust with his colleagues at the FOMC, I mean, And 0:02:03.600 --> 0:02:05.600 to your point on the data, I mean, right now, 0:02:05.840 --> 0:02:08.840 core PCE for May is tracking at around three point 0:02:08.919 --> 0:02:12.200 three percent year on year. If that's the number that 0:02:12.240 --> 0:02:14.840 comes in or something like that, there's no way they 0:02:14.880 --> 0:02:18.120 can cut rates anytime soon. And even if the straight 0:02:18.160 --> 0:02:21.000 of the hormones straight of hormones does open soon, which 0:02:21.000 --> 0:02:24.280 we all hope it does, and oil prices retreat further, 0:02:24.880 --> 0:02:28.160 you still have a strong economy, now probably stronger. You 0:02:28.240 --> 0:02:31.000 have inflation coming through the AI channel as well as 0:02:31.000 --> 0:02:35.200 other channels, and so it seems like the market pricing 0:02:35.240 --> 0:02:37.680 and the possibility of a hike makes a lot more sense. 0:02:37.680 --> 0:02:39.800 So that is going to be a challenge for Chairman 0:02:39.840 --> 0:02:40.560 Warsh for sure. 0:02:41.080 --> 0:02:42.799 I met u s dollar here. We kind of came 0:02:42.840 --> 0:02:43.440 into the year. 0:02:43.680 --> 0:02:45.400 I guess the consensus on the street was for a 0:02:45.440 --> 0:02:48.320 week or a dollar, and then the war with Iran 0:02:48.480 --> 0:02:50.320 starts and we had that flight to quality like we 0:02:50.480 --> 0:02:51.320 typically see. 0:02:52.000 --> 0:02:56.640 Now what well, the dollar until the news over the 0:02:56.639 --> 0:03:00.760 weekend was down or sorry, was down again only two 0:03:00.800 --> 0:03:04.280 major currencies, the Norwegian crown and the Australian dollar, both 0:03:04.320 --> 0:03:08.200 big commodity exporters. It was stronger against everything else, primarily 0:03:08.320 --> 0:03:13.280 on rate expectations, higher interest rates following higher energy prices 0:03:13.320 --> 0:03:16.960 and broader inflation pressures. Now that that is off the table, 0:03:17.000 --> 0:03:19.600 you have seen yields, as you guys just mentioned, down 0:03:19.639 --> 0:03:22.640 a little bit. You are seeing the dollar down a 0:03:22.680 --> 0:03:25.639 little bit today. And the question again it goes back 0:03:25.680 --> 0:03:28.720 to the Fed, do we have a hawkish bias in 0:03:28.760 --> 0:03:31.840 the press conference this week or not. I think the 0:03:31.919 --> 0:03:34.520 rate expectations will continue to be pretty important for the 0:03:34.560 --> 0:03:36.800 dollar going ahead. And again it's not just the US, right, 0:03:36.840 --> 0:03:39.720 two sides to every currency trade. We expect a Bank 0:03:39.720 --> 0:03:43.280 of Japan hike this week. The ECB, the European Central Bank, 0:03:43.400 --> 0:03:47.920 just raised rate. So it's not clear how much stronger 0:03:47.960 --> 0:03:48.880 the dollar gets. 0:03:48.680 --> 0:03:51.480 Out of Florida. And Johns Hopkins, I mean, there was 0:03:51.520 --> 0:03:54.000 this idea that if you end a war, even as 0:03:54.080 --> 0:03:57.640 Caplin says, a middle war, the idea is you get 0:03:57.640 --> 0:04:03.200 a disinflationary tendency competison now at CFR. But if you're 0:04:03.600 --> 0:04:07.520 on Wall Street right now, and what's clearly a boom 0:04:07.600 --> 0:04:11.800 investment banking environment, do you just assume disinflation? 0:04:12.960 --> 0:04:16.200 I wouldn't assume anything right now. Look, we have we 0:04:16.279 --> 0:04:19.920 have some tweets and some headlines suggesting that we have 0:04:20.040 --> 0:04:25.040 a step forward towards peace, but the deal isn't supposed 0:04:25.080 --> 0:04:28.240 to be signed till Friday, and even then it's not 0:04:28.480 --> 0:04:31.919 clear yet if it sticks, it's not clear what the 0:04:32.000 --> 0:04:34.520 terms are going to be. I mean, Iran wants and 0:04:34.640 --> 0:04:38.120 needs funding. I think they could still pressure to have 0:04:38.200 --> 0:04:40.919 some sort of fee, service fee to go through the 0:04:40.960 --> 0:04:43.000 straight not at all a service fee. 0:04:43.160 --> 0:04:45.560 And Paul, this is really Rick Wilson just now on 0:04:45.600 --> 0:04:48.320 Twitter with just a scathing quick note like where are 0:04:48.400 --> 0:04:49.120 the details? 0:04:49.520 --> 0:04:51.960 Yeah, when do we get the details? I don't have an. 0:04:51.839 --> 0:04:57.039 Answer, and we might not for sixty days. Right. 0:04:57.480 --> 0:04:59.359 The markets will flip right around if we do that. 0:04:59.520 --> 0:05:02.279 Well, they do that, right, And that's the point. Oil 0:05:02.320 --> 0:05:05.280 has come down, stocks are up. Does it last? Do 0:05:05.320 --> 0:05:08.520 you want to chase it here? I mean, if we 0:05:08.600 --> 0:05:11.240 have peace and it's certainly in both sides interest to 0:05:11.279 --> 0:05:14.120 have peace. Iran desperately needs money. It needs to rebuild. 0:05:14.320 --> 0:05:15.159 The US does. 0:05:15.040 --> 0:05:17.480 Not want oil at a four handle or thirty year 0:05:17.560 --> 0:05:20.120 year olds at a five handle going into midterms. 0:05:20.920 --> 0:05:24.040 Gold, well, it seems like just a cup of coffee goes. 0:05:24.080 --> 0:05:26.520 Tom had said we were at five thousand dollars and 0:05:26.600 --> 0:05:28.000 now so we've seen a pullback. 0:05:27.680 --> 0:05:28.840 Here at forty three hundred. 0:05:28.920 --> 0:05:31.120 Yeah, yeah, I mean you had a lot of speculative 0:05:31.120 --> 0:05:32.920 money going to gold at the beginning of the year. 0:05:32.920 --> 0:05:35.039 We had a little bit of a parabolic move, so 0:05:35.120 --> 0:05:37.120 that was part of it. But the other part of 0:05:37.160 --> 0:05:40.400 it is we did have two big central banks, Russia 0:05:40.400 --> 0:05:44.839 and Turkey selling Russia sold for four months in a row. 0:05:44.960 --> 0:05:47.400 Turkey was the biggest seller of gold in March. But 0:05:47.520 --> 0:05:50.680 those are the outliers. Central banks in general are continuing 0:05:50.720 --> 0:05:51.280 to buy. 0:05:51.160 --> 0:05:55.400 Bloomberg surveillance across the SNAE show Boy and for San Antonio, 0:05:56.000 --> 0:06:00.359 Three Am and a diner and re Ordered tried to 0:06:00.400 --> 0:06:03.200 get over the hangover. Joining us now with the Rebecca 0:06:03.240 --> 0:06:07.279 Patterson and studio is Anry Horder, who was, Yeah, doing 0:06:07.400 --> 0:06:09.520 a seminar in Houston. 0:06:11.680 --> 0:06:13.200 In Newston, can you get. 0:06:12.960 --> 0:06:17.039 Me tickets to San Antonio. I'll take it over. How 0:06:17.080 --> 0:06:19.040 did you get from Houston to San Antonio? 0:06:20.120 --> 0:06:20.919 Our friend drove me. 0:06:21.360 --> 0:06:21.600 Friend. 0:06:22.160 --> 0:06:24.280 Yeah, So a friend saw that I was in Houston. 0:06:24.640 --> 0:06:26.840 Also saw I was at Game three with the presidents 0:06:26.839 --> 0:06:27.960 and I'm going to game five. 0:06:28.560 --> 0:06:29.320 Why didn't you come? 0:06:29.360 --> 0:06:31.880 And I made a game time game time decision Saturday 0:06:31.960 --> 0:06:34.520 night and I was like, you know what, like, I'm 0:06:34.520 --> 0:06:34.880 so cold? 0:06:34.920 --> 0:06:36.200 Are you sitting with Prince Harry? 0:06:36.600 --> 0:06:37.880 I was not sitting with Prince Harry. 0:06:37.880 --> 0:06:38.800 Oh yeah, you texted me. 0:06:38.960 --> 0:06:39.600 I saw him. 0:06:39.640 --> 0:06:41.839 I saw Spike Lee. I was sitting more by Patrick Ewing, 0:06:42.560 --> 0:06:43.880 which was pretty amazing. 0:06:44.000 --> 0:06:45.040 Did he block your view? 0:06:45.200 --> 0:06:46.240 He did not block my view? 0:06:46.279 --> 0:06:47.400 He was actually behind me. 0:06:47.640 --> 0:06:52.760 So I will say San Antonio was the sixth borough 0:06:52.839 --> 0:06:56.520 on Saturday night. It was how to be fifty percent 0:06:56.640 --> 0:06:59.400 maybe seventy five percent New York Knick fans and the 0:06:59.440 --> 0:07:00.599 first order or two. 0:07:00.680 --> 0:07:01.640 Obviously we were. 0:07:01.520 --> 0:07:04.720 Behind, but we've been there before and it was a 0:07:05.360 --> 0:07:07.960 little intense, and then Jalen Brunson does what he does. 0:07:08.040 --> 0:07:10.800 This team works together so well and they clinched it. 0:07:10.800 --> 0:07:11.560 It was incredible. 0:07:12.000 --> 0:07:14.080 You have to call him my Jalen. Missus Keene is 0:07:14.120 --> 0:07:16.440 calling my Jalen this week. 0:07:16.320 --> 0:07:16.960 My Jalen. 0:07:18.240 --> 0:07:22.480 I gotta ask what was in the arena the energy 0:07:22.560 --> 0:07:25.720 that was not captured for America on TV. 0:07:26.240 --> 0:07:29.320 I think what was not captured was the moment you 0:07:29.400 --> 0:07:34.239 realize they were about to become champions after fifty three years. 0:07:34.880 --> 0:07:40.280 There was literally tears from New Yorkers and their faces, 0:07:40.400 --> 0:07:43.520 grown men just absolutely crying. One guy next to me 0:07:43.800 --> 0:07:46.960 was a New Yorker, stayed for the whole thing, moved 0:07:46.960 --> 0:07:49.160 to San Antonio in nineteen ninety four, so he was 0:07:49.240 --> 0:07:52.960 technically there supporting the Spurs, but even he was emotional 0:07:52.960 --> 0:07:53.600 and he said, this is. 0:07:53.560 --> 0:07:55.440 Pretty bittersweet for me for our fans. 0:07:55.440 --> 0:07:57.360 On radio, I just have to highlight the outfits that 0:07:57.400 --> 0:08:00.640 are in this studio here. Rebecca Patterson, New York can 0:08:00.720 --> 0:08:04.640 Nick orange head to toe fantastic. Hamry Horner comes in 0:08:05.120 --> 0:08:08.840 to the whole thing going and the Tom's got the blink. 0:08:09.080 --> 0:08:10.680 I mean I didn't know Tom either. 0:08:10.720 --> 0:08:11.560 You were a Celtics fan. 0:08:12.720 --> 0:08:14.480 Well, we're all Nick fans. 0:08:14.480 --> 0:08:20.840 Yes, I said, he just writes to pay check exact. 0:08:21.000 --> 0:08:25.120 One more question for Rebecca Patterson. Here. The spirit of 0:08:25.160 --> 0:08:29.360 this to me, the single miscall a New York city 0:08:29.360 --> 0:08:33.680 in the gloom was a census of twenty twenty where everybody, 0:08:33.720 --> 0:08:37.280 including the smart people, said, oh, we had six hundred 0:08:37.360 --> 0:08:41.520 thousand in the MSA here. I mean, it's his bet 0:08:41.600 --> 0:08:44.480 against New York that's always been there. 0:08:44.480 --> 0:08:47.319 You know what, I think there is a human emotion 0:08:47.520 --> 0:08:49.920 that you always want to go after whoever's on top. 0:08:50.080 --> 0:08:52.080 And that could be a company, it could be a person, 0:08:52.120 --> 0:08:54.040 it could be a city. So it's easy to go 0:08:54.080 --> 0:08:56.679 after New York. But look, New York's back. People are 0:08:56.679 --> 0:08:59.000 working five days a week in the office, real estate 0:08:59.040 --> 0:09:00.000 prices are coming back. 0:09:01.120 --> 0:09:01.440 God. 0:09:01.600 --> 0:09:03.240 I mean last week, if you tried to get around 0:09:03.240 --> 0:09:05.720 the city in a cab or even on the subway, 0:09:05.720 --> 0:09:06.560 it was packed. 0:09:06.679 --> 0:09:09.920 Yeah, Rebecca, thank you so much. Rebecca Patterson with us 0:09:09.920 --> 0:09:13.080 writing for the Console on Foreign Relations, a terrific podcast, 0:09:13.480 --> 0:09:17.680 Stay with us more from Bloomberg Surveillance coming up after this. 0:09:24.920 --> 0:09:28.480 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:09:28.559 --> 0:09:31.720 weekday afternoons from seven to ten am Eastern Listen on 0:09:31.800 --> 0:09:35.199 Apple Karplay and Android Otto with the Bloomberg Business app, 0:09:35.360 --> 0:09:37.280 or watch us live on YouTube. 0:09:37.600 --> 0:09:41.160 The Royal strategist for Robinhood joins us right now for 0:09:41.200 --> 0:09:45.120 two shortest visits stuff guild with us as well. If 0:09:45.160 --> 0:09:48.600 I haven't ended his conflict. How does it change your 0:09:48.640 --> 0:09:51.720 six months forward view, your journey thirty report. 0:09:52.520 --> 0:09:56.319 I think it makes costs a little bit lower for everybody. 0:09:56.760 --> 0:10:00.520 All those input costs that were elevated obviously start to 0:10:00.559 --> 0:10:03.000 come down. I don't think it'll happen right away because 0:10:03.440 --> 0:10:05.959 it takes a while to restart things. I saw something 0:10:05.960 --> 0:10:08.600 this morning where quit will take the longest because they're 0:10:08.600 --> 0:10:11.960 the most impacted. But it I mean, obviously the market 0:10:12.040 --> 0:10:14.200 is for discounting, so the market will care about it 0:10:14.240 --> 0:10:17.319 now and today, and you're seeing it in energy prices 0:10:17.000 --> 0:10:19.320 and energy stocks. 0:10:19.880 --> 0:10:20.200 All right. 0:10:20.240 --> 0:10:23.080 So let's say we do get some type of resolution 0:10:23.240 --> 0:10:25.120 here with around a little bit more certainty in that 0:10:25.200 --> 0:10:28.600 part of the world that brings the AI story right 0:10:28.640 --> 0:10:31.319 back to the you know, the front burner here. How 0:10:31.360 --> 0:10:34.160 do you guys think about AI at Robinhood, because that's 0:10:34.160 --> 0:10:36.640 a story that's kind of morphed over the last several 0:10:36.679 --> 0:10:39.400 years since we've all become involved with AI. How do 0:10:39.480 --> 0:10:40.920 you guys position it these days? 0:10:41.000 --> 0:10:43.360 Yeah, I mean at the company, we use it a lot, 0:10:44.080 --> 0:10:47.080 but when it comes to you know, I've subscribed to 0:10:48.120 --> 0:10:52.520 Jensen Huong's five layer cake approach, and it starts everything 0:10:52.559 --> 0:10:56.600 from like the materials and the energy inputs down to 0:10:56.600 --> 0:10:59.760 the application layer. And I think, you know, at times 0:10:59.800 --> 0:11:02.120 you're going to have some things that go back and forth, 0:11:02.160 --> 0:11:06.200 like some fits and starts, because the physical world can't 0:11:06.480 --> 0:11:09.320 just doesn't move as fast as the agentic world. And 0:11:09.440 --> 0:11:12.160 so I think that's where you know, obviously the conflict 0:11:12.200 --> 0:11:14.360 in the Middle East impacted that, but I do think 0:11:14.400 --> 0:11:17.800 we're moving a little closer to the application layer, which 0:11:17.880 --> 0:11:20.040 is like that that top end of the layer, which 0:11:20.080 --> 0:11:23.239 is if you look at a company like Eli Lilly, 0:11:23.600 --> 0:11:25.400 they have lily Pod where they take all of the 0:11:25.480 --> 0:11:29.800 data they've ever garnered and have, you know, can work 0:11:29.840 --> 0:11:32.400 with it in AI. I think that's the most powerful 0:11:32.679 --> 0:11:35.679 aspect of working with AI is when I take all 0:11:35.720 --> 0:11:37.640 this data and I put it into something that I 0:11:37.679 --> 0:11:40.160 can talk to. Talking to your data, I think is 0:11:40.240 --> 0:11:41.200 extremely powerful. 0:11:41.720 --> 0:11:44.599 How do you guys think about just I mean, what's 0:11:44.640 --> 0:11:46.680 your approach here as we go into the second half 0:11:46.679 --> 0:11:52.040 of twenty twenty six, here, stocks, bonds, alternatives on your platform? 0:11:52.040 --> 0:11:54.439 What are your clients doing these days? 0:11:55.120 --> 0:11:57.760 I mean, the stock market's been really good, so there's 0:11:57.800 --> 0:12:00.600 been a lot of buying of stocks. Whenever there's the pullback, 0:12:00.640 --> 0:12:03.680 we see them use ETFs to kind of, you know, 0:12:03.760 --> 0:12:06.400 add a little bit more exposure, but the buying has never. 0:12:06.280 --> 0:12:07.360 Really slowed down. 0:12:09.080 --> 0:12:12.240 I'd say prediction markets is are something that's rising, and 0:12:12.400 --> 0:12:15.760 I see a rising and ability to people to put 0:12:15.800 --> 0:12:18.760 their own views into it beyond the sports area that 0:12:18.920 --> 0:12:21.720 I focus beyond the sports area. So for example, the 0:12:21.760 --> 0:12:25.200 New York City, I'm sorry, the La Mayor Race was 0:12:25.200 --> 0:12:27.560 one of the top things in the last week or so. 0:12:28.760 --> 0:12:31.360 And also the price of bitcoin, the price of oil, 0:12:31.440 --> 0:12:34.520 like that's kind of where they were playing. And we 0:12:34.559 --> 0:12:39.000 also have robin Hood Ventures, which is our foray into 0:12:39.520 --> 0:12:41.240 It's a close and fun and it's our foray into 0:12:42.080 --> 0:12:43.280 actually private investments. 0:12:43.320 --> 0:12:46.280 Steph Coil, thanks so much with Robinhood driving all of 0:12:46.280 --> 0:12:49.800 their strategy this morning. Stay with us. More from Bloomberg 0:12:49.920 --> 0:12:51.920 Surveillance coming up after this. 0:12:59.160 --> 0:13:03.200 You're listening to Bloomberg Surveillance podcast. Catch us Live weekday 0:13:03.240 --> 0:13:06.840 afternoons from seven to ten am Eastern. Listen on Applecarplay 0:13:06.880 --> 0:13:10.160 and Android Auto with the Bloomberg Business app, or watch 0:13:10.200 --> 0:13:11.000 us live on. 0:13:10.920 --> 0:13:13.840 YouTube through Queen Victoria Street in London. 0:13:13.920 --> 0:13:18.439 Julian Lee joins oil strategist doesn't describe as expertise and 0:13:18.559 --> 0:13:23.440 a global sense of flows of hydrocarbon. Julian, I'm looking 0:13:23.480 --> 0:13:27.040 at a chart of Brent crude. The obvious question is 0:13:27.080 --> 0:13:29.559 do we get back to seventy dollars from the present 0:13:29.960 --> 0:13:33.440 eighty two? But what I see is a convexity. There's 0:13:33.480 --> 0:13:37.079 a real acceleration to a lower price. Is it the 0:13:37.120 --> 0:13:40.000 market getting out front of oil or is a market 0:13:40.120 --> 0:13:41.680 chasing where oil is going to be? 0:13:44.160 --> 0:13:46.560 I think, you know, at the moment, it's perhaps the 0:13:46.559 --> 0:13:50.280 market getting a little ahead of oil. There is a 0:13:50.320 --> 0:13:55.040 growing expectation that this MoU will get signed on Friday, 0:13:55.120 --> 0:13:58.640 and that will result in an opening of the strait 0:13:58.640 --> 0:14:01.680 of hormos. It's not going to be, you know, back 0:14:01.679 --> 0:14:05.679 to normal immediately. But there is a timescale to get 0:14:05.880 --> 0:14:08.959 flows back to normal through Hormus within thirty days. That 0:14:09.000 --> 0:14:13.280 may be optimistic. So I think the market is starting 0:14:13.320 --> 0:14:16.640 to price that in. There's still a lot of hesitancy 0:14:16.720 --> 0:14:22.000 among ship owners. They really want to see a bit 0:14:22.040 --> 0:14:26.000 more than just talk about this. I think they may 0:14:26.200 --> 0:14:30.040 start to change their position come Friday if this deal 0:14:30.160 --> 0:14:33.320 is signed. And at the moment, you know, we've seen 0:14:34.080 --> 0:14:38.440 in the newsroom, we've seen three different versions of what's 0:14:38.480 --> 0:14:40.520 in this deal. All of them have come from the 0:14:40.560 --> 0:14:45.760 Iranian side. They're all slightly different. We've had nothing official 0:14:45.800 --> 0:14:49.360 out of Washington yet, so you know, there's still plenty 0:14:49.400 --> 0:14:54.000 of room there, I think for wrinkles to appear before Friday. 0:14:54.040 --> 0:14:57.520 And I think that's what shippers are slightly nervous about. 0:14:57.560 --> 0:15:00.680 The market I think at the moment is it's much 0:15:00.720 --> 0:15:04.200 more optimistic about a deal being done than they have 0:15:04.360 --> 0:15:06.200 been for the past month or so. 0:15:07.360 --> 0:15:10.520 Julian, I'm looking at just an image on the screen 0:15:10.600 --> 0:15:13.200 of all the dots representing ships that are in strated 0:15:13.520 --> 0:15:16.400 permeus both sides, but quite frankly, and there's they're all 0:15:16.600 --> 0:15:20.280 over the place. Isn't it that the insurance companies who 0:15:20.360 --> 0:15:23.080 decide if this trade is open or not. 0:15:24.680 --> 0:15:28.360 Well, I think it's a mixture of the insurance companies, certainly, 0:15:28.400 --> 0:15:32.280 the ship owners, and to some extent the ship's crews 0:15:32.360 --> 0:15:36.120 as well. You know, it is an owner willing to 0:15:36.240 --> 0:15:38.960 risk its its vessel and its crew by sending it 0:15:39.040 --> 0:15:45.000 through a waterway that is still to some extent contested. 0:15:45.080 --> 0:15:50.080 They will want to see much more clarity and I 0:15:50.120 --> 0:15:54.680 think some mechanism of protecting these ships, at least legally, 0:15:55.280 --> 0:15:58.480 if not physically, before they start to move. 0:16:00.040 --> 0:16:02.640 Do we yet have a good sense of the damage 0:16:02.680 --> 0:16:06.320 that may have been done to the infrastructure in the 0:16:06.560 --> 0:16:09.480 energy real complex there in that world, because I'm not 0:16:09.520 --> 0:16:12.040 sure where oil goes even if the straight is open. 0:16:13.760 --> 0:16:15.560 Well, I think that's a very good question. I mean, 0:16:15.600 --> 0:16:21.880 there has undoubtedly been damage to some key facilities, certainly 0:16:22.240 --> 0:16:26.760 liquefied natural gas production in Katar, some gas and perhaps 0:16:26.840 --> 0:16:33.520 oil production in the United Arab Emirates, possibly installations elsewhere 0:16:33.560 --> 0:16:37.560 in the region. The other problem, I think is not 0:16:37.720 --> 0:16:42.160 just physical damage, but it's the fact that being unable 0:16:42.200 --> 0:16:45.080 to get their oil and their gas out of the Gulf, 0:16:45.720 --> 0:16:48.480 countries have had to scale back production. They've had to 0:16:48.520 --> 0:16:52.880 shut wells in they've had to reduce the flow from fields. 0:16:53.200 --> 0:16:56.400 Once everything opens up again, all of that has to 0:16:56.440 --> 0:17:01.920 come back into operation. That will take time. We think 0:17:02.000 --> 0:17:06.879 the shutdowns have been done in a fairly controlled manner, 0:17:06.960 --> 0:17:11.879 so that shouldn't have damaged the infrastructure. But then it 0:17:11.960 --> 0:17:14.639 has to be opened in a controlled manner as well 0:17:15.040 --> 0:17:19.240 in order to avoid surges of pressure that can damage 0:17:19.640 --> 0:17:22.840 well heads and pipelines and all that kind of stuff, 0:17:23.000 --> 0:17:26.720 and that will necessarily slow the process of everything coming back. 0:17:27.880 --> 0:17:30.280 What does it, excuse me, what does it mean for 0:17:30.359 --> 0:17:33.760 the Pacific rims Julian. Obviously the boat's going to come 0:17:33.760 --> 0:17:37.480 out to Paul's great question. And infrastructure, I guess that's 0:17:37.560 --> 0:17:41.840 distillates and refinery cutter in Awe. But how does Singapore 0:17:42.000 --> 0:17:44.080 fields this morning? Or Japan? 0:17:46.080 --> 0:17:49.800 Well, I think you know. I think Asia in particular 0:17:50.119 --> 0:17:54.080 has been hit hard by the closure of Horn Moves. 0:17:54.240 --> 0:17:57.359 Most of the oil out of the Persian Gulf, whether 0:17:57.440 --> 0:18:00.600 it's from the Arab side or the Iranian side, most 0:18:00.640 --> 0:18:04.080 of that goes to Asia, and so it is them 0:18:04.880 --> 0:18:07.320 is refiners in that part of the world who've been 0:18:07.400 --> 0:18:12.520 scrabbling around for barrels from elsewhere. I think if the 0:18:12.560 --> 0:18:16.040 strait does open fully, and if we start to see 0:18:16.080 --> 0:18:19.840 oil and gas flowing again, I think refiners in Asia 0:18:19.960 --> 0:18:24.800 will breathe a huge sigh of relief. The people who 0:18:24.840 --> 0:18:30.520 perhaps won't will be those in the Kremlin who have 0:18:31.520 --> 0:18:36.040 enjoyed the surgeon prices that this war has brought, and 0:18:36.160 --> 0:18:41.360 have enjoyed some relaxation on sanctions on their oil that 0:18:41.440 --> 0:18:45.679 has allowed Indian refiners back into to the market, and 0:18:45.800 --> 0:18:48.639 perhaps even some of the you know, the US oil 0:18:48.720 --> 0:18:53.960 companies who have have had a real boost from the 0:18:54.280 --> 0:18:56.480 higher prices and the demand for US. 0:18:56.359 --> 0:18:59.680 Crewed Julian, thank you so much. Really appreciate the breathe 0:18:59.680 --> 0:19:02.920 a small folks. This is the way we start really interesting. 0:19:03.720 --> 0:19:04.840 We stay with us. 0:19:05.080 --> 0:19:08.320 More from Bloomberg Surveillance coming up after this. 0:19:15.560 --> 0:19:19.120 You're listening to the Bloomberg Surveillance podcast. Catch US Live 0:19:19.200 --> 0:19:22.359 weekday afternoons from seven to ten am Eastern Listen on 0:19:22.440 --> 0:19:26.119 Applecarplay and Android Auto with the Bloomberg Business app, or 0:19:26.240 --> 0:19:27.879 watch US Live on YouTube. 0:19:28.040 --> 0:19:31.199 This is an important conversation Jim rowins with us with Deloitte, 0:19:31.640 --> 0:19:35.679 and this is on the fundamental issue of revenue for 0:19:35.800 --> 0:19:39.159 all this AI stuff. Off the twenty billion dollar n 0:19:39.240 --> 0:19:43.800 Nvidia bond deal today, Jim, on these tokens, to me, 0:19:44.240 --> 0:19:47.199 there will be price discrimination, There'll be all sorts of 0:19:47.320 --> 0:19:51.680 levels of usage. When do we start seeing a much 0:19:51.720 --> 0:19:58.800 more sophisticated pricing of how we use AI? Yeah? 0:19:58.880 --> 0:19:59.960 Thanks s having me on, guys. 0:20:00.040 --> 0:20:01.320 I mean, I think one of the key things that 0:20:01.320 --> 0:20:03.680 we're seeing right now in the market is that people 0:20:03.720 --> 0:20:06.960 are moving from basic AI use cases, you know, chat 0:20:07.119 --> 0:20:10.480 simple agentic workflows, to thinking about how they apply AI 0:20:10.560 --> 0:20:13.600 agents across their business functions, and that's seeing a real 0:20:13.640 --> 0:20:16.679 explosion in the usage of tokens. But it's also going 0:20:16.720 --> 0:20:19.080 to see the explosion of value creation because we're now 0:20:19.119 --> 0:20:21.280 talking about real work getting done by agents in the 0:20:21.400 --> 0:20:23.919 enterprise and really adding efficiency to what we're seeing. 0:20:24.000 --> 0:20:26.040 But do you model price down? 0:20:27.600 --> 0:20:29.040 You know, we're going to expect to see that the 0:20:29.119 --> 0:20:31.480 cost per token go down over a period of time, 0:20:31.520 --> 0:20:34.920 but the number of tokens people need continue to increase up. 0:20:35.320 --> 0:20:37.680 And given the constraints that we see in the data 0:20:37.680 --> 0:20:40.439 center space, there's going to be a competition there for 0:20:40.560 --> 0:20:43.240 those tokens for you enterprice to get access to them 0:20:43.520 --> 0:20:45.280 and use them effectively in their enterprise. 0:20:46.040 --> 0:20:48.639 Jim, I'm going to speak for about ninety nine percent 0:20:48.680 --> 0:20:50.160 of our viewing and listening audience. 0:20:50.600 --> 0:20:53.120 Can you explain, I don't know what a token is neither. 0:20:53.359 --> 0:20:54.960 Yeah, what's the token? Right? What is a token of? 0:20:54.960 --> 0:20:56.880 Why does it matter? Yeah? 0:20:56.920 --> 0:20:57.359 Think about it. 0:20:57.359 --> 0:20:59.119 So, if you're in front of one of your AI 0:20:59.200 --> 0:21:01.920 tools and you're putting some input, that's an input token. 0:21:01.960 --> 0:21:04.600 So you're asking a question, you're asking it to do something, 0:21:04.640 --> 0:21:06.840 provide some feedback. You've sent it a picture and you 0:21:06.880 --> 0:21:09.520 want some help with something. That's an input token, and 0:21:09.560 --> 0:21:13.320 then the response back from the large language model is 0:21:13.400 --> 0:21:17.280 the output token. So organizations price it on both the 0:21:17.280 --> 0:21:20.359 input and the output. So if you think about a 0:21:20.359 --> 0:21:22.840 closed source model, they're charging you for the input that 0:21:22.880 --> 0:21:25.080