WEBVTT - Bloomberg Surveillance TV: February 13th, 2026 0:00:00.040 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordert. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.240 Terminal and the Bloomberg Business app. Then that's that one hundred, 0:00:37.240 --> 0:00:39.800 as you all know. On Trackford's third straight weekly last, 0:00:40.000 --> 0:00:42.440 Tom forty of Maxim Group covers Apple and Amazon with 0:00:42.560 --> 0:00:45.360 a by rating on both. Tom joins us now for more. Tom, 0:00:45.479 --> 0:00:48.440 The anxiety is overwhelming this week in the tech sector. 0:00:48.479 --> 0:00:50.320 I don't even know if it's reached the main street 0:00:50.560 --> 0:00:53.880 just yet, but on Wall Street the faar is skyheigh 0:00:54.160 --> 0:00:57.280 in two names that you cover, Apple, Amazon. Let's start 0:00:57.280 --> 0:00:59.640 with Amazon. Lisa mentioned this eight day run of declients 0:01:00.040 --> 0:01:03.560 eighteen percent lower on Amazon. What has made that stop 0:01:03.600 --> 0:01:05.399 fall out of bed over the last week. 0:01:06.240 --> 0:01:09.080 Yeah, So when you think about the weakness in Amazon. 0:01:09.680 --> 0:01:12.279 I think it's entirely related to the two hundred billion 0:01:12.319 --> 0:01:17.399 dollar capex guidance by the company, and if you look historically, 0:01:17.640 --> 0:01:20.960 without downplaying the significance of a two hundred million dollar 0:01:21.040 --> 0:01:24.800 capex number for Amazon, but Amazon has a track record 0:01:24.920 --> 0:01:30.920 of ramping investing when necessary to take advantage of opportunities, 0:01:31.280 --> 0:01:35.880 and I do think that Amazon can take advantage or 0:01:35.920 --> 0:01:39.920 capitalize in AI in ways other megacaps can't. They have 0:01:40.000 --> 0:01:43.360 one point five sorry, one point five million employees, many 0:01:43.400 --> 0:01:46.920 at the large fulfillment center level. To the extent that 0:01:46.959 --> 0:01:52.480 they roll out robotics add automation, they can have greater efficiency. 0:01:52.840 --> 0:01:55.480 Now you've been talking a lot about AI displacing jobs, 0:01:55.840 --> 0:01:58.000 so I think that if you do the math equation 0:01:58.920 --> 0:02:02.520 for Amazon, it would be to the extent that automation 0:02:03.200 --> 0:02:07.200 reduced the headcount at the warehouse level. But at the 0:02:07.200 --> 0:02:09.480 same time, you have to think about the new jobs 0:02:09.760 --> 0:02:12.560 that automation would create, to the extent that someone has 0:02:12.600 --> 0:02:16.639 to make the robots service the robots, things of that nature. So, yes, 0:02:16.680 --> 0:02:20.520 I'm concerned about job loss from artificial intelligence, but I 0:02:20.520 --> 0:02:23.480 think it's going to be an offset of job loss, 0:02:23.520 --> 0:02:25.000 but also some job gains. 0:02:25.800 --> 0:02:26.000 You know. 0:02:26.360 --> 0:02:29.360 Tom John opened the show asking about this conflict that 0:02:29.440 --> 0:02:32.760 I think really is the conflict. Either this capex that 0:02:32.840 --> 0:02:35.880 all of these big tech companies are spending is not 0:02:36.080 --> 0:02:40.480 worth it and ultimately is going to backfire on them 0:02:40.520 --> 0:02:44.040 for a becoming asset heavy and not as profit heavy, 0:02:44.760 --> 0:02:47.720 or people are just totally mispricing the story and the 0:02:47.760 --> 0:02:52.880 disruption is actually yes significant on the other side, but 0:02:53.120 --> 0:02:55.519 is going to benefit these companies in a significant way. 0:02:55.520 --> 0:02:56.079 Which is it? 0:02:57.160 --> 0:03:00.239 Well, okay for Amazon again of the belief that it'll 0:03:00.280 --> 0:03:02.920 be worthwhile. And I think what's interesting is a student 0:03:02.919 --> 0:03:04.600 of you know, having started covering the Internet in the 0:03:04.639 --> 0:03:07.680 elite nineties, I remember the build out of dark fiber 0:03:07.720 --> 0:03:09.880 and things of that nature. So I worry that we're 0:03:09.880 --> 0:03:12.320 going to have this, you know, ghost data centers in 0:03:12.360 --> 0:03:14.760 the future and things of that nature. But the good 0:03:14.760 --> 0:03:18.400 news I think for Amazon and for other megacap tech 0:03:18.720 --> 0:03:22.600 companies that are ramping their cap x is that presumably 0:03:22.720 --> 0:03:25.560 if they don't see their returns, they can scale back 0:03:25.600 --> 0:03:28.840 the numbers. It isn't that Amazon Amazon spending two hundred 0:03:28.880 --> 0:03:32.480 billion in one day. So if you look at Amazon again, 0:03:32.720 --> 0:03:36.000 they've scaled back some of their leasing commitments when they 0:03:36.080 --> 0:03:38.640 determined that they didn't need as much fulfillment center square 0:03:38.640 --> 0:03:41.640 footage because there wasn't a demand. So I do think 0:03:41.720 --> 0:03:44.760 that as it pertains to Amazon, if they're not seeing 0:03:44.800 --> 0:03:48.160 the positive performance, that they're expecting greater efficiency at the 0:03:48.160 --> 0:03:52.400 warehouse level, a greater efficiency also at the software engineering level, 0:03:53.320 --> 0:03:55.920 better sales from e commerce, things of that nature. It's 0:03:55.960 --> 0:03:57.880 not like they can't stop the spending. They can, they 0:03:57.920 --> 0:03:58.640 can turn it off. 0:03:59.080 --> 0:04:00.560 Tom, is a tech really that good? 0:04:00.800 --> 0:04:02.960 Is the air really that good to disrupt all of 0:04:03.000 --> 0:04:06.680 these potential industries? Is the sort of heat seeking missile 0:04:06.960 --> 0:04:09.520 that Joe A Motto of newberg Erman was talking about? 0:04:09.800 --> 0:04:12.920 Is it truly that in terms of its effect efficacy? 0:04:13.840 --> 0:04:16.279 So you're asking me, so today we'll call it, you know, 0:04:16.240 --> 0:04:19.000 a day before Valentine's Day twenty twenty six. Is the 0:04:19.000 --> 0:04:22.320 technology that good to the extent that I have, you know, 0:04:22.400 --> 0:04:25.480 spent a lot of time with Alexa and Siri as 0:04:25.480 --> 0:04:28.679 an example of you know, AI and things of that nature. 0:04:28.800 --> 0:04:31.720 The answer is absolutely not. The question is in the 0:04:31.760 --> 0:04:34.480 future will it be that good? And it remains to 0:04:34.480 --> 0:04:36.560 be seen. But I would say, Lisa, I would say 0:04:36.560 --> 0:04:39.320 today I'm convinced that tech is not that good, But 0:04:39.480 --> 0:04:41.560 that doesn't mean directly we're not heading to a point 0:04:41.600 --> 0:04:43.920 where it will be much better than this today. And 0:04:43.960 --> 0:04:46.520 I think that's, you know, very much possible. 0:04:46.680 --> 0:04:48.279 Tom. I'm not going to ask you if you're spending 0:04:48.320 --> 0:04:50.800 Valot time's with Alexa and Siri. I'm not going to 0:04:50.800 --> 0:04:54.760 ask that question. It is you basically asked it yourself taking. 0:04:54.520 --> 0:04:57.000 My wife to dinner. But thanks Jonathan for worrying. 0:04:56.760 --> 0:04:59.320 About otherwise you could have joined us. I was consented. 0:05:00.040 --> 0:05:01.520 I'm going to follow up on Apple. I want to 0:05:01.560 --> 0:05:04.720 talk about Apple very quickly. Five percent move. Is this 0:05:04.760 --> 0:05:07.320 the thread of a margin squeeze from memory or is 0:05:07.360 --> 0:05:10.520 it about falling behind with AI? What's the move about? 0:05:11.080 --> 0:05:14.480 It has to be the margin squeeze on memory. So, Jonathan, 0:05:14.520 --> 0:05:16.560 I was sticking back to last year being on your 0:05:16.600 --> 0:05:19.799 show and wondering if we had a supercycle for AI 0:05:20.000 --> 0:05:24.640 for Apple, twenty percent growth in iPhones in the December 0:05:24.720 --> 0:05:28.040 quarter would make us think yes, But they absolutely they 0:05:28.040 --> 0:05:30.680 are nowhere with AI. So I think that the five 0:05:30.680 --> 0:05:34.760 percent move is concerned on memory. Apple historically does very 0:05:34.760 --> 0:05:37.640 well when they have a product selling as well as 0:05:37.720 --> 0:05:41.039 iPhone seventeen and improving the margin over time, they could 0:05:41.080 --> 0:05:45.040 take price managing supply chains Tim Cook's forte. So I'm 0:05:45.080 --> 0:05:47.799 not worried about memory, maybe as much as the market 0:05:47.839 --> 0:05:48.400 is right now. 0:05:49.000 --> 0:05:52.440 Stay with us. More Bloomberg surveillance coming up after this. 0:06:01.720 --> 0:06:04.320 Tiffany want to get Pincock joins usnaps talk about the days. Tiffany, 0:06:04.320 --> 0:06:06.360 welcome to the program. How much weight can we put 0:06:06.360 --> 0:06:10.000 on this week's data? Halted, un expected payrolls soft that 0:06:10.120 --> 0:06:11.000 expected CPI. 0:06:13.560 --> 0:06:15.840 Well, I think this morning's inflation print, even though it 0:06:15.880 --> 0:06:18.880 was in line with the Bloomberg consensus expectations, was actually 0:06:18.920 --> 0:06:21.479 pretty encouraging under the surface. You know, I think there's 0:06:21.520 --> 0:06:24.359 two things that we would highlight in that regard. You know, 0:06:24.440 --> 0:06:27.680 one is just that shelter inflation, which had been stubbornly, 0:06:28.400 --> 0:06:31.920 you know, just persistent since the pandemic. You know, it's 0:06:31.960 --> 0:06:35.360 finally really decelerating, and we saw that in today's report. 0:06:35.600 --> 0:06:40.240 You know, rental dynamics for new tenant rents actually suggests 0:06:40.279 --> 0:06:43.599 that that you're seeing a pretty stagnant rental market and 0:06:43.640 --> 0:06:46.200 that will ultimately feed into OERE with a lag. So 0:06:46.240 --> 0:06:48.360 that's good news for the FED. I think the other 0:06:48.520 --> 0:06:50.760 good news in this report, you know, is that the 0:06:50.839 --> 0:06:55.080 terrorf related effects are largely fading. You know, so we 0:06:55.120 --> 0:06:57.240 probably did get a little bit of a bounce back 0:06:57.279 --> 0:07:01.120 in core goods prices retail goods prices from the discounting 0:07:01.120 --> 0:07:03.599 that happened over the holiday season, you know, but ultimate 0:07:03.640 --> 0:07:06.080 looks like terriff effects of kind of they're behind us 0:07:06.080 --> 0:07:08.479 at this point. They were passed through to the extent 0:07:08.520 --> 0:07:11.400 that companies were going to do it. So as that fades, 0:07:11.720 --> 0:07:14.640 you know, you you should have a federal reserve that 0:07:14.640 --> 0:07:17.800 that feels more comfortable, you know, cutting interest rates, you know, 0:07:18.000 --> 0:07:20.680 it does look like they are a little bit restrictive 0:07:21.400 --> 0:07:23.840 relative to the media and long term estimate of the 0:07:23.840 --> 0:07:26.320 long run neutral interest rate. You know, so getting a 0:07:26.320 --> 0:07:28.560 couple of more cuts in this year seems very reasonable 0:07:28.600 --> 0:07:28.920 to us. 0:07:28.960 --> 0:07:31.000 It's if we not, all right, cuts now created equally. 0:07:31.160 --> 0:07:33.280 Do you see then a federal reserve that's cutting interest 0:07:33.360 --> 0:07:36.080 rights because inflation gives them the space, or because the 0:07:36.160 --> 0:07:40.560 labor market gives them a reason, you. 0:07:40.520 --> 0:07:43.520 Know, so I think so for us, the outlook for 0:07:43.880 --> 0:07:46.720 you know, for the labor market is pretty stable here. 0:07:47.320 --> 0:07:50.080 You know, ultimately, we think growth is going to be Okay, 0:07:50.160 --> 0:07:52.560 this year, you know, we're looking for two percent, you know, 0:07:52.600 --> 0:07:55.080 that should support the labor market, but nevertheless, you do 0:07:55.200 --> 0:07:58.760 have this AI related adjustment that's happening, you know, under 0:07:58.800 --> 0:08:01.720 the surface, so you know, those those factors are sort 0:08:01.720 --> 0:08:03.920 of offsetting. We're looking for the unemployment rate to kind 0:08:03.960 --> 0:08:06.520 of stay where it is, and then outside of that, 0:08:06.560 --> 0:08:09.600 we're looking for inflation to moderate, you know, moderate back 0:08:09.640 --> 0:08:12.240 to target this year, so that in our view, would 0:08:12.240 --> 0:08:14.840 be consistent with the Fed that that's easing somewhat. 0:08:15.240 --> 0:08:15.400 You know. 0:08:15.440 --> 0:08:18.880 Of course, if the unemployment rate were to rise much more, 0:08:19.000 --> 0:08:21.160 you know, than that, that would that would warrant more 0:08:21.160 --> 0:08:22.040 easing from the Fed. 0:08:22.320 --> 0:08:23.280 Tiffany, do you think. 0:08:23.080 --> 0:08:25.160 That this actually opens the door to three rate cuts 0:08:25.160 --> 0:08:27.440 this year, as the market seems to be implying right now. 0:08:30.960 --> 0:08:34.360 Yeah, I mean, we'll we'll definitely have to see. I mean, 0:08:34.400 --> 0:08:36.959 it's certainly possible that they could get in three. 0:08:37.440 --> 0:08:37.640 You know. 0:08:37.679 --> 0:08:40.480 Again, I think as kind of a rough estimate, we're 0:08:40.520 --> 0:08:43.640 looking at the mid the midpoint of the long run 0:08:43.760 --> 0:08:46.440 neutral estimate, which is which is right around three percent. 0:08:47.080 --> 0:08:48.560 You know, they're at three and a half now, so 0:08:48.600 --> 0:08:50.800 that implies two more cuts. You know, I think getting 0:08:50.840 --> 0:08:54.719 another one in would you know, be the result of 0:08:55.280 --> 0:08:59.920 more disinvationary pressure potentially target below target inflation or the 0:09:00.040 --> 0:09:01.280 unemployment rate moving up. 0:09:01.559 --> 0:09:03.679 I understand the idea of celebrating disinflation. 0:09:03.760 --> 0:09:05.880 We're still at two point four percent year over year 0:09:05.880 --> 0:09:06.920 for CPI. 0:09:06.880 --> 0:09:08.480 And people are saying this is winning. 0:09:08.520 --> 0:09:11.400 I mean, how strong is the disinflationary force coming from 0:09:11.440 --> 0:09:14.280 the housing sector that gives you confidence that we're actually 0:09:14.280 --> 0:09:16.800 going to get down to two percent even with FED 0:09:16.880 --> 0:09:19.720 rate cuts, given that we've been above two. 0:09:19.640 --> 0:09:21.200 Percent for five years. 0:09:24.120 --> 0:09:26.880 Yeah, well so in the housing sector has certainly been 0:09:26.960 --> 0:09:31.280 one of the reasons why that we've had stickier inflation. 0:09:31.480 --> 0:09:35.520 So the housing, oh we are and rents, rental inflation 0:09:35.760 --> 0:09:38.840 have been incredibly sticky, you know. You know that's in 0:09:38.920 --> 0:09:42.439 part because of it just takes them longer to adjust, 0:09:43.240 --> 0:09:46.880 you know, so they didn't accelerate as much as as 0:09:46.880 --> 0:09:49.440 home prices did during the pandemic. But but now they're 0:09:49.440 --> 0:09:53.360 decelerating at a slower pace. That's finally over. It looks 0:09:53.400 --> 0:09:56.120 like that ketchup has happened in the rental market, you know, 0:09:56.160 --> 0:09:58.760 and you can and you're now seeing more more stagnant 0:09:58.800 --> 0:10:00.720 rental trends so that is import ortant. 0:10:00.760 --> 0:10:00.920 You know. 0:10:00.960 --> 0:10:02.880 But again, the other thing is is that the thing 0:10:02.960 --> 0:10:06.440 that's held up overall inflation over the last year is 0:10:06.520 --> 0:10:09.880 some pass through of the additional costs that companies have 0:10:09.920 --> 0:10:12.240 to pay as a result of tariffs. But that's a 0:10:12.280 --> 0:10:15.440 one time price level adjustment, and when we look at 0:10:15.480 --> 0:10:18.480 core goods price behavior, you know, it looks like that 0:10:18.559 --> 0:10:21.200 adjustments largely happen. So now that it's happened, you should 0:10:21.200 --> 0:10:24.760 see core goods uh, you know, price inflation also starting 0:10:24.760 --> 0:10:27.199 to decelerate. So again, all that is is good news 0:10:27.200 --> 0:10:27.680 for the Fed. 0:10:28.040 --> 0:10:28.360 Definitely. 0:10:28.440 --> 0:10:30.840 Just one final comment if we can on the committee 0:10:30.880 --> 0:10:32.960 that Kevin Walsh will ultimately at some point this year 0:10:33.080 --> 0:10:36.920 be taken over. How contentious will things be? How divided 0:10:37.360 --> 0:10:38.400 is that committee currently? 0:10:41.280 --> 0:10:43.440 Well, I mean, you know, again, I think you I 0:10:43.440 --> 0:10:46.719 think you want to look at where everybody is as 0:10:46.840 --> 0:10:49.440 you know, where everybody's sort of writing down where they 0:10:49.480 --> 0:10:52.480 think the long run neutral interest rate is, because because 0:10:52.480 --> 0:10:55.120 that's going to be the debate this year, we think, 0:10:55.440 --> 0:10:58.200 you know, and of course that the AI you know, 0:10:58.240 --> 0:11:02.560 and the technology related diffusion will have implications for that 0:11:02.600 --> 0:11:03.400 our star debate. 0:11:04.160 --> 0:11:06.319 But there's a good. 0:11:06.120 --> 0:11:09.040 Majority of the Committee that still thinks that the current 0:11:09.160 --> 0:11:12.440 policy rate is above their estimate of our star, which 0:11:12.480 --> 0:11:14.760 means policy is slightly restrictive, you know. And if you 0:11:14.880 --> 0:11:18.760 have employment that is consistent with maximum levels, and you 0:11:18.800 --> 0:11:20.840 have inflation that's running at target, you should be at 0:11:20.880 --> 0:11:23.680 neutral policy. And so again the real debate this year 0:11:24.080 --> 0:11:26.480 on the FED is where neutral policy is going to be, 0:11:26.880 --> 0:11:28.360 you know. And again we're kind of looking at the 0:11:28.360 --> 0:11:30.880 midpoint of their estimated range of three percent. 0:11:31.800 --> 0:11:35.280 Stay with US mult Bloomberg Surveillance coming up after this 0:11:44.679 --> 0:11:47.840 Global lead is gathering at the Munich Security Conference, the 0:11:47.920 --> 0:11:51.079 US Secretary of Saint Marco Rubio leading a delegation as 0:11:51.080 --> 0:11:55.200 the Trump administration pushes Transatlantic ties potentially to their limits. 0:11:55.280 --> 0:11:57.560 The Republican Senator Tom Tillis is on the ground in 0:11:57.679 --> 0:12:00.320 Munich and he joins US now for more. Senator, welcome 0:12:00.360 --> 0:12:02.360 back to the program. Forgive me for doing this life 0:12:02.360 --> 0:12:04.520 in the moment. But the news just crossed. This is 0:12:04.559 --> 0:12:07.720 on Ali Baba reporting from Reuters. So the Trump administration 0:12:07.800 --> 0:12:09.680 is expected to add Ali Baba to a list of 0:12:09.720 --> 0:12:13.480 firms that allegedly help China's military. This according to reports 0:12:13.760 --> 0:12:18.079 just moments ago. Senator clearly the US administration and Congress 0:12:18.080 --> 0:12:19.880 for that matter, is looking to put a bit of 0:12:19.920 --> 0:12:23.440 a squeeze on China landing in Europe and Munich, Germany. 0:12:23.520 --> 0:12:26.040 Do you believe that you have the Europeans on site 0:12:26.200 --> 0:12:29.559 in this effort. 0:12:30.920 --> 0:12:31.640 I think we do. 0:12:31.720 --> 0:12:34.520 But let's go back to Ali, Bob and honestly, any 0:12:34.640 --> 0:12:38.280 business that's domiciled in China, does anybody really believe that 0:12:38.280 --> 0:12:41.840 there's separation between the CCCP and the state owned enterprises 0:12:41.880 --> 0:12:44.439 and other supposedly independent businesses. 0:12:44.480 --> 0:12:46.439 I think the President is on. 0:12:46.440 --> 0:12:48.400 The right track to make sure that we're starting to 0:12:48.440 --> 0:12:51.200 hold China accountable. We need a good relationship with them, 0:12:51.360 --> 0:12:53.240 but it needs to be one that's founded on trust. 0:12:53.280 --> 0:12:55.280 And quite honestly, there are moves in China that I 0:12:55.320 --> 0:12:55.960 don't trust. 0:12:56.559 --> 0:12:59.440 So Senator, with that in mind, should US based investors 0:12:59.440 --> 0:13:03.679 be able to have access to investing in these companies? 0:13:06.200 --> 0:13:10.560 Well, look, I've got a real problem with We had. 0:13:10.480 --> 0:13:15.360 A Banking Committee com meeting yesterday with Adkins before from 0:13:15.400 --> 0:13:18.080 the SEC, and I've got a real problem with the 0:13:18.240 --> 0:13:22.200 US getting into a trend of buying into some of 0:13:22.240 --> 0:13:26.080 our companies. I feel like we should let the free 0:13:26.120 --> 0:13:29.720 market really drive innovation and also back to the segment 0:13:29.800 --> 0:13:32.800 before I watched your prior segment, we've also got. 0:13:32.760 --> 0:13:34.599 On leiche I. We can't be afraid of it. 0:13:34.679 --> 0:13:36.440 We have to embrace it, we have to leverage it, 0:13:36.640 --> 0:13:38.640 and we have to be the leader in innovating it. 0:13:38.760 --> 0:13:41.880 Well, Senator, let's talk about that. Creative destruction is a 0:13:42.000 --> 0:13:45.320 feature of the US economy and American dynamism is something 0:13:45.360 --> 0:13:48.560 Lisa was talking about earlier on this morning. Senator, I 0:13:48.559 --> 0:13:51.160 feel like there's an aversion to that these days, and 0:13:51.200 --> 0:13:53.760 a fear associated with some of the headlines we've all 0:13:53.800 --> 0:13:56.120 seen over the past suite, the prospect of white collar 0:13:56.240 --> 0:13:59.560 jobs being wiped down. How do we prepare for a 0:13:59.559 --> 0:14:03.440 moment that and ensure that what globalization did to manufacturing 0:14:03.720 --> 0:14:09.360 doesn't happen to services with AI A sure, well, we. 0:14:09.360 --> 0:14:11.959 Have to be ever watchful, but the bell has been wrong. 0:14:12.120 --> 0:14:15.160 We can either decide to be the innovation leader and 0:14:15.200 --> 0:14:19.560 work with our partners and allies, the nations that we 0:14:19.640 --> 0:14:22.880 have military alliances with, to make sure that the Western. 0:14:22.520 --> 0:14:24.800 World is still in the front of it. 0:14:24.880 --> 0:14:27.720 But I'm reminded of books that I read about the 0:14:27.760 --> 0:14:31.240 Industrial Revolution and anytime that we've had a major leap 0:14:31.320 --> 0:14:32.320 in technology. 0:14:32.800 --> 0:14:35.200 We can't pretend like it didn't happen. 0:14:35.360 --> 0:14:37.640 We have to figure out how to master it and 0:14:38.280 --> 0:14:41.400 be the best practice and executing it and dealing with 0:14:41.440 --> 0:14:45.320 all the potential negative consequences and job displacement. I think 0:14:45.360 --> 0:14:48.280 the jury is still out on what the job displacement's 0:14:48.280 --> 0:14:50.040 going to be. Does it mean that we've got to 0:14:50.040 --> 0:14:54.680 put more money in education and retooling expertise around the 0:14:54.720 --> 0:14:58.320 needs of the AI future, Probably almost certainly, But we 0:14:58.360 --> 0:14:59.200 should resist it. 0:14:59.320 --> 0:15:00.080 We should make sure. 0:15:00.000 --> 0:15:02.520 Sure that we get rid of the patchwork of laws 0:15:02.560 --> 0:15:04.640 that are being implemented at the state level that are 0:15:04.680 --> 0:15:09.560 impediments to our own indigenous innovation and AI, come up 0:15:09.600 --> 0:15:11.640 with rules of the road at a federal level, and 0:15:11.760 --> 0:15:14.720 just unleashed the power of the US innovation economy to 0:15:14.800 --> 0:15:16.120 lead the world to get into right. 0:15:17.000 --> 0:15:20.080 Senator, do you feel like internationally there's the same skepticism 0:15:20.120 --> 0:15:23.960 you're in Europe, it's known for regulating their experts in it, 0:15:24.000 --> 0:15:26.920 and it seems like a growing number of people feel 0:15:27.000 --> 0:15:29.120 like that is hampering some of the progress. 0:15:29.160 --> 0:15:31.920 I mean, is there the same kind of enthusiasm. 0:15:32.080 --> 0:15:34.560 What's the mood like around some of the AI story 0:15:34.560 --> 0:15:37.960 that's causing a lot of a lot of volatility, certainly 0:15:38.040 --> 0:15:39.000 here in the United States. 0:15:42.360 --> 0:15:45.440 For years, I've been trying to remind everyone of how 0:15:45.480 --> 0:15:49.480 critical we were of the GDPR data privacy, data breach 0:15:49.880 --> 0:15:51.640 policies of the EU implement it. 0:15:51.680 --> 0:15:53.720 They made mistakes, they corrected. 0:15:53.280 --> 0:15:56.840 Some of them, but then states started gold plating some 0:15:56.920 --> 0:15:59.480 of those policies California and other ones that are again 0:16:00.280 --> 0:16:03.440 to our tech sector. What we need are national rule. 0:16:03.560 --> 0:16:07.040 This is clearly interstate commerce. We need to preempt these laws, 0:16:07.440 --> 0:16:09.720 make them better if we find the best practice, be 0:16:09.800 --> 0:16:12.720 instructed by that at some state level. But we need 0:16:12.760 --> 0:16:16.160 to set that platform right or the maligne users of 0:16:16.200 --> 0:16:19.800 AI are going to outpace our ability to stay up 0:16:19.840 --> 0:16:20.200 with them. 0:16:20.280 --> 0:16:21.000 That's why I. 0:16:20.920 --> 0:16:23.600 Think it's so important. I was the one, the. 0:16:23.600 --> 0:16:26.000 Only one, actually nine to nine members voted against that. 0:16:26.080 --> 0:16:29.640 There was an amendment last year to try and preempt 0:16:29.680 --> 0:16:31.960 the AI laws at the state level come up with 0:16:32.000 --> 0:16:34.320 a national standard. I think that we need to do 0:16:34.360 --> 0:16:36.800 that very quickly, and we should throw data privacy data 0:16:36.800 --> 0:16:38.160 breach out there so that we get it right and 0:16:38.240 --> 0:16:40.240 maybe we have a gold plated state or that Europe 0:16:40.240 --> 0:16:41.120 can be instructed by. 0:16:41.680 --> 0:16:44.440 In the meantime, as people are concerned about this leave 0:16:44.480 --> 0:16:47.480 and market transition and the pain that could come alongside it. 0:16:47.480 --> 0:16:49.400 It's one reason why there's been so much focus on 0:16:49.400 --> 0:16:51.400 the FED to reserve. It's one reason why people are 0:16:51.400 --> 0:16:54.480 saying it might behoove the FED to cut rates more 0:16:54.480 --> 0:16:57.920 aggressively in order to ease the pain for a number 0:16:57.920 --> 0:17:00.560 of individuals that otherwise might be losing their job. I mean, 0:17:00.600 --> 0:17:04.040 how much are you feeling satisfied in the process that 0:17:04.119 --> 0:17:07.479 you could get a hearing for the nominee Kevin worsh 0:17:07.720 --> 0:17:08.159 in the. 0:17:08.240 --> 0:17:10.359 Not so distant future. Do you think that that's feasible. 0:17:13.520 --> 0:17:15.480 Well, we could have a hearing all we want, but 0:17:15.640 --> 0:17:19.080 until the investigation is done. I still believe that the 0:17:19.119 --> 0:17:23.960 initial inquiry and the investigation was a flex to try 0:17:23.960 --> 0:17:27.639 and get the current chair to step aside. Chair Powell 0:17:27.720 --> 0:17:30.879 has a term as chair that expires in May. He 0:17:30.920 --> 0:17:33.399 also has a term that could extend for two more years. 0:17:33.560 --> 0:17:36.879 I have no intention allowing any FED Board nominee to 0:17:36.960 --> 0:17:39.639 move forward out of committee and to be confirmed until 0:17:39.680 --> 0:17:43.200 this matter is subtled. Well, this is foundational to FED independence, 0:17:43.240 --> 0:17:44.800 and I for one, I'm going to stand on the 0:17:44.840 --> 0:17:47.080 side of certainty and FED independence. 0:17:47.160 --> 0:17:49.120 Is what delivers certainty in our markets. 0:17:49.280 --> 0:17:51.760 So Senator is intriguing because we heard from the Treasury 0:17:51.800 --> 0:17:55.080 Secretary earlier on this morning speaking to the American press, 0:17:55.520 --> 0:17:58.280 and he said the following that I spoke with Republican 0:17:58.359 --> 0:18:01.160 senators early this week, and I think we have agreement 0:18:01.200 --> 0:18:03.480 to go ahead with the Wash hearing. Do you have 0:18:03.480 --> 0:18:08.679 an understanding of where he's getting that impression from. 0:18:08.840 --> 0:18:13.040 Well, you know, I've said that if they shouldn't confuse 0:18:13.160 --> 0:18:16.359 or conflate two issues, the suggestion that we should have 0:18:16.400 --> 0:18:19.800 an oversight hearing to see how well this building project 0:18:19.840 --> 0:18:22.320 with the FED has gone, It's fine with me. In fact, 0:18:22.359 --> 0:18:24.359 I think we should have that kind of oversight for 0:18:24.400 --> 0:18:28.280 the East Wing construction, the upfit of the air Force 0:18:28.359 --> 0:18:30.560 one that's kind of a mini air Force one because 0:18:30.560 --> 0:18:32.200 it can't fly out of US barners. 0:18:32.480 --> 0:18:34.560 All of that is just good governance oversight. 0:18:35.000 --> 0:18:37.640 None of that has anything to do with an investigation 0:18:37.800 --> 0:18:41.200 that I believe was dead on arrival. We are talking 0:18:41.240 --> 0:18:45.199 about two minutes of testimony that seven members of the 0:18:45.240 --> 0:18:48.399 Banking Committee, Republican members including the chair. 0:18:48.240 --> 0:18:51.240 Have all said did not constitute a crime. 0:18:51.280 --> 0:18:54.200 We've got a prosecutor who's not listening to the eye 0:18:54.200 --> 0:18:57.439 witnesses and continuing that's not productive, and I'm not going 0:18:57.480 --> 0:18:59.119 to I'm not going to allow it. 0:18:59.200 --> 0:19:00.320 Maybe they can commit. 0:19:00.000 --> 0:19:02.400 It's Democrats to vote with them, but as long as 0:19:02.400 --> 0:19:02.760 I'm the. 0:19:02.680 --> 0:19:05.080 Deciding vote, we can have mister Warsh, who I would 0:19:05.160 --> 0:19:08.040 love to be the next FED chair, but I'm not 0:19:08.080 --> 0:19:11.080 going to confirm the next FED chair until I can 0:19:11.119 --> 0:19:13.919 be absolutely certain that these sorts of flexes do not 0:19:14.040 --> 0:19:16.679 always have members of the Federal. 0:19:16.080 --> 0:19:18.280 Reserve Board or the Chair looking over. 0:19:18.160 --> 0:19:20.800 Their shoulder wondering when they get the call from some 0:19:21.000 --> 0:19:22.240 US attorney with a dream. 0:19:22.359 --> 0:19:24.639 The Senator, if you had the call from Treasury or 0:19:24.640 --> 0:19:26.480 from the White House about this, when was the last 0:19:26.520 --> 0:19:31.200 time you had the conversation on the issue. 0:19:31.440 --> 0:19:35.560 Well, I've had a conversation with the American people in 0:19:35.640 --> 0:19:37.960 c SPAN yesterday on the floor, and I don't think 0:19:38.000 --> 0:19:39.119 I was mincing words. 0:19:39.160 --> 0:19:40.920 I'm not really known for that. 0:19:41.160 --> 0:19:44.120 But if I need to make it very clear this 0:19:44.240 --> 0:19:48.240 is about an end for our resolution, I'll get the 0:19:48.720 --> 0:19:50.399 prosecutor the benefit of the doubt. 0:19:50.800 --> 0:19:52.960 Provide me with evidence beyond the two. 0:19:52.920 --> 0:19:56.959 Minutes of testimony and the committing that seven Republican members 0:19:56.960 --> 0:19:59.960