WEBVTT - Fed Expected to Announce Quarter-Point Rate Cut on Wednesday 0:00:02.880 --> 0:00:07.240 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.480 --> 0:00:12.840 This is Bloomberg Business Wait inside from the reporters and 0:00:13.039 --> 0:00:16.600 editors who bring you America's most trusted business magazine, plus 0:00:16.680 --> 0:00:20.840 global business, finance and tech news. The Bloomberg Business Week 0:00:20.880 --> 0:00:25.920 podcast with Carol Messer and Tim Stenebek from Bloomberg Radio. 0:00:27.080 --> 0:00:29.760 To get some economic data this morning. US retail sales 0:00:29.760 --> 0:00:32.120 increased at a firm pace in the month of November, 0:00:32.479 --> 0:00:35.680 bolstered by a surge in car purchases and solid online 0:00:35.680 --> 0:00:39.240 shopping that masked more mixed spending elsewhere. This has came 0:00:39.280 --> 0:00:41.320 from the US Census Bureau. It' said the value of 0:00:41.320 --> 0:00:44.760 retail purchases not adjusted for inflation increased seven tens of 0:00:44.800 --> 0:00:47.560 a percent after upward revisions to the prior to months, 0:00:47.800 --> 0:00:50.199 and if you back out autos, sales climbed a more 0:00:50.240 --> 0:00:52.360 modest two tens of a percent timp That was for 0:00:52.400 --> 0:00:53.280 a second month, okay. 0:00:53.320 --> 0:00:56.920 Separate data today showed US industrial production unexpectedly declined for 0:00:56.960 --> 0:00:59.720 a third month in November on decreases in utility output 0:00:59.720 --> 0:01:04.360 and bing manufacturing output rows less than forecasts. With more 0:01:04.360 --> 0:01:06.640 on the US economic backdrop and what to expect from 0:01:06.640 --> 0:01:09.480 the Fed tomorrow. Back with us is Steven Skanky, chief 0:01:09.520 --> 0:01:12.120 economic advisor at the Wealth Advisor Keell Point. Steve also 0:01:12.160 --> 0:01:14.960 a former US Treasury and White House National Security Council 0:01:15.040 --> 0:01:18.640 staff member, serving during the Nixon, Ford, Carter, and Reagan administrations. 0:01:18.640 --> 0:01:21.640 He joins us this afternoon from Washington, d C. 0:01:21.840 --> 0:01:24.039 Steve, Good as always to see you on the day 0:01:24.080 --> 0:01:27.319 before we hear from the Fed chair. This most recent 0:01:27.400 --> 0:01:29.840 data that Carol and I just mentioned certainly something that 0:01:29.880 --> 0:01:32.679 the members of the Federal Reserve Board of Governors are 0:01:32.720 --> 0:01:37.800 looking at today is today, is tomorrow certainly decided the 0:01:37.800 --> 0:01:40.920 big picture of what comes in January, February, March. That's 0:01:40.959 --> 0:01:42.399 what has investors focused. 0:01:44.000 --> 0:01:46.280 Well, first, thanks thanks for inviting me on as sorry, 0:01:46.280 --> 0:01:49.040 it's great to be with you and answering your question. 0:01:49.880 --> 0:01:52.640 The Marcus certainly think that it's decided as to what 0:01:52.640 --> 0:01:55.920 they're going to do tomorrow, and when you look at 0:01:55.920 --> 0:01:59.160 all the things that they've said, I think it'd be 0:01:59.200 --> 0:02:01.800 a big surprise if they if they didn't cut tomorrow. 0:02:02.080 --> 0:02:05.240 They basically indicated that, and the economic data has been 0:02:05.280 --> 0:02:09.679 supportive of that as well. I mean, the estimate for 0:02:10.000 --> 0:02:14.880 personal consumption expenditure, the Core Index that's come down that 0:02:14.880 --> 0:02:18.880 that's really good news. The employment data was okay but 0:02:19.040 --> 0:02:22.440 not overly strong. And and what you just said about 0:02:22.840 --> 0:02:28.000 retail sales very positive, even with gasoline sales down and 0:02:28.120 --> 0:02:34.120 industrial production more tepet, which which gives the FED a 0:02:34.160 --> 0:02:37.560 little bit more latitude to be confident about not having 0:02:37.639 --> 0:02:39.680 to not cut rates tomorrow. 0:02:40.600 --> 0:02:43.280 Well, and I guess though, to that point, Steve, some 0:02:43.960 --> 0:02:46.920 would suggest, wait, why do we even need a rate cut. 0:02:46.960 --> 0:02:50.760 We've got growth in the United States. The economy still 0:02:50.760 --> 0:02:53.119 seems to be humming along, so why do we need it. 0:02:54.840 --> 0:02:57.920 Well, the biggest concern, Carol, is in the in the 0:02:57.960 --> 0:03:01.000 employment side. You know, the at rate ticked up a 0:03:01.040 --> 0:03:05.320 little bit. The fence projection is that it will it 0:03:05.320 --> 0:03:09.600 will go higher. We'll see what they're some economic projections 0:03:09.639 --> 0:03:14.520 is for tomorrow in terms of the unemployment rate going 0:03:14.560 --> 0:03:17.920 into twenty twenty five. But that's where the fedce principal 0:03:18.040 --> 0:03:23.720 concern is. They're okay with where inflation is, especially since 0:03:23.760 --> 0:03:26.640 it looks like it's starting to come down a little 0:03:26.680 --> 0:03:31.000 bit again, but they don't want to see job losses 0:03:31.680 --> 0:03:34.360 or a weak employment market get ahead of them. 0:03:35.000 --> 0:03:39.120 I also wonder how much of the concern. Though again, 0:03:39.280 --> 0:03:41.800 maybe the argument for not cutting rates is that we 0:03:41.840 --> 0:03:46.240 still have inflationary pressures and there are some concerns about policies, 0:03:46.360 --> 0:03:49.400 tax policies and other by president like Donald Trump that 0:03:49.440 --> 0:03:52.640 could essentially feel some growth and also feel some inflation. 0:03:54.240 --> 0:03:59.280 Well, Carol, you're absolutely right about that. And interestingly, that's 0:04:00.400 --> 0:04:03.920 that's a little bit why I believe that the Fed. 0:04:04.440 --> 0:04:07.680 The FED would be reluctant not to cut when they 0:04:07.720 --> 0:04:12.400 announce tomorrow. They don't want to be seen as anticipating 0:04:13.000 --> 0:04:17.360 the economic result of some of the policies that President 0:04:17.440 --> 0:04:24.680 elect Trump has announced. Obviously tightening up the border deporting posts, 0:04:24.680 --> 0:04:29.880 which was wages up create instability in the jobs market 0:04:30.120 --> 0:04:33.280 and will also send up prices, not only the one 0:04:33.320 --> 0:04:39.640 time price site from the tariff, but also the instability 0:04:39.680 --> 0:04:44.320 that is created in the supply chain, which then contributes 0:04:45.200 --> 0:04:46.440 to ongoing inflation. 0:04:47.960 --> 0:04:51.800 Steve the summary of economic projections. I know certainly investors 0:04:51.839 --> 0:04:53.279 will be focused on that tomorrow. 0:04:53.360 --> 0:04:58.360 What do you expect, Well, I expect that the Fed 0:04:58.440 --> 0:05:02.320 is going to be pretty steady on that. They've they've 0:05:02.320 --> 0:05:06.560 been a little bit more, a little bit less optimistic 0:05:06.960 --> 0:05:12.440 along the way than we would have thought. But certainly 0:05:12.600 --> 0:05:17.159 for the unemployment number to trend toward five percent as 0:05:17.160 --> 0:05:20.760 we get into twenty twenty five. I think that's very realistic, 0:05:20.920 --> 0:05:25.120 even in the labor market that we have right now, 0:05:25.880 --> 0:05:28.839 and on inflation, I think they're just going to go 0:05:31.520 --> 0:05:34.640 Their assumption is going to be as if there were 0:05:34.800 --> 0:05:40.880 no changes in economic policy going forward. And that's just 0:05:41.320 --> 0:05:46.240 part of the dance that they need to be in 0:05:46.360 --> 0:05:49.520 right now so as not to be walking in or 0:05:49.560 --> 0:05:57.160 anticipating or trying to have any commentary about what the 0:05:57.200 --> 0:05:59.160 new Trump administration is likely to do. 0:05:59.240 --> 0:06:01.120 Well, So should we take should we take the summary 0:06:01.080 --> 0:06:03.320 of economic projections tomorrow with an even bigger grain of 0:06:03.360 --> 0:06:06.080 salt than we usually do, just because we don't know 0:06:06.160 --> 0:06:09.480 what the new administration will be able to implement in 0:06:09.520 --> 0:06:10.240 what timeline. 0:06:10.279 --> 0:06:12.880 They're also slippery, right, They can put them out there 0:06:12.920 --> 0:06:14.520 and then they're out there, and then the next day 0:06:14.600 --> 0:06:17.000 something could happen and they just don't apply anymore. 0:06:17.040 --> 0:06:24.000 Right, That's exactly right. And so yes, what they put 0:06:24.000 --> 0:06:29.320 out tomorrow is their thought about if nothing changed, where 0:06:29.400 --> 0:06:32.960 would we be? Yeah, And that's I mean, that's fair 0:06:33.880 --> 0:06:38.359 for what their job is, But in terms of practical 0:06:38.400 --> 0:06:43.080 application or actionable information, it's not particularly helpful. 0:06:43.120 --> 0:06:45.520 As you point out, Hey, listen, one last question before 0:06:45.560 --> 0:06:48.800 you go, you guys kill Points of Wealth Advisor. I 0:06:48.880 --> 0:06:51.720 am curious since the election, as we get ready to 0:06:51.720 --> 0:06:54.120 wrap up the year, which plain vanilla old US docs 0:06:54.160 --> 0:06:56.480 have done just fine for a second year in a row. 0:06:56.760 --> 0:07:00.560 What are you hearing from your clients? Are the kill 0:07:00.600 --> 0:07:02.960 Point clients, what's top of mind for them? Is it 0:07:02.960 --> 0:07:03.920 the new administration? 0:07:04.800 --> 0:07:05.120 Is it? 0:07:05.520 --> 0:07:09.080 I don't know, moving cash into equities? I don't know 0:07:09.120 --> 0:07:09.640 what is it? 0:07:11.000 --> 0:07:17.040 Well, there's a generally positive expectation for twenty twenty five, 0:07:17.800 --> 0:07:20.880 and the data support that as we look forward absent 0:07:21.040 --> 0:07:27.520 some monumental or tectonic change, So that's a positive thing. 0:07:27.920 --> 0:07:34.400 But we certainly encourage clients to have available sooner rather 0:07:34.480 --> 0:07:36.480 than later the amount of cash they think that they're 0:07:36.520 --> 0:07:38.920 going to need to spend in twenty twenty five, so 0:07:38.960 --> 0:07:41.720 that if there is a correction, even if it's short lived, 0:07:42.680 --> 0:07:46.080 that they're not in a position having to sell assets 0:07:46.160 --> 0:07:47.520 when the prices are down. 0:07:47.840 --> 0:07:49.520 All right, Good to know and always good to check 0:07:49.520 --> 0:07:52.400 in with you. Be well, Happy holidays, Marry Christmas. Steve Skanky, 0:07:52.720 --> 0:07:55.600 Chief Economic advisor at the Wealth Advisor, keell Point. Steve 0:07:55.680 --> 0:07:57.720 is a former US Treasury in White House National Security 0:07:57.720 --> 0:08:00.960 Council staff member, and yeah, giving us some insight on 0:08:00.960 --> 0:08:01.560 tomorrow's ED. 0:08:01.560 --> 0:08:03.240 Meeting and looking past tomorrow. 0:08:03.520 --> 0:08:06.160 On Friday morning, we'll hear from Mary Daily seven thirty 0:08:06.200 --> 0:08:09.080 am Wall Street time of the San Francisco Federal Reserve. 0:08:09.080 --> 0:08:12.000 It'll be her first TV interview since the FED meeting, 0:08:12.080 --> 0:08:13.960 so be sure to tune into that Friday morning, seven 0:08:14.080 --> 0:08:14.960 thirty Wall Street Time. 0:08:15.000 --> 0:08:16.920 On Bloomberg TV and radio. 0:08:17.360 --> 0:08:20.880 You're listening to the Bloomberg Business Week podcast. Catch us 0:08:20.920 --> 0:08:24.160 live weekday afternoons from two to five pm. Easter Listen 0:08:24.200 --> 0:08:26.360 on Apple car Play and then Broud Auto with a 0:08:26.360 --> 0:08:29.400 Bloomberg Business app, or watch us live on YouTube. 0:08:30.880 --> 0:08:33.520 Well, the US, in case you hadn't noticed, is experiencing 0:08:33.559 --> 0:08:37.040 a surge and power demand, with electricity consumption expected to 0:08:37.040 --> 0:08:40.640 climb almost sixteen percent over the next five years. Why, 0:08:40.679 --> 0:08:41.520 you may ask. 0:08:41.600 --> 0:08:42.480 A few factors? 0:08:43.440 --> 0:08:45.120 Is it because we're all getting EV's I don't think so. 0:08:45.320 --> 0:08:46.400 I could have soon to do with it. 0:08:46.640 --> 0:08:49.000 A few factors and drivers of that demand, including data 0:08:49.000 --> 0:08:53.880 centers evs AI welcome everybody to the New Economy with 0:08:53.960 --> 0:08:56.440 more on what may be the next supply demanded. Balance 0:08:56.480 --> 0:08:58.640 are two killer members of our Bloomberg News team who 0:08:58.640 --> 0:09:01.480 reported out this story. They are Bloomberg Newspower and Renewable 0:09:01.559 --> 0:09:05.000 Energy editor Will Wade, also with Bloomberg News Energy and 0:09:05.040 --> 0:09:08.160 Climate Disasters reporter Josh Saul, both here in our Bloomberg 0:09:08.240 --> 0:09:11.840 BusinessWeek studio. Well, I want to start with you and 0:09:11.880 --> 0:09:15.320 get an idea for consumption and where it exactly is 0:09:15.360 --> 0:09:18.920 coming from. Is it all AI or the push to 0:09:19.360 --> 0:09:21.800 move away from natural gas. 0:09:21.559 --> 0:09:23.520 Or heating and cooling? Is that part of it? You 0:09:23.559 --> 0:09:24.440 know what's coming from? 0:09:24.720 --> 0:09:27.560 It's all of it, and it's all happening all of 0:09:27.600 --> 0:09:32.400 a sudden. So we've seen cloud computing, you know, everyone 0:09:32.440 --> 0:09:34.520 wants to put all your photos and your files up 0:09:34.559 --> 0:09:37.080 in the cloud. That's driving data centers, a lot of 0:09:37.160 --> 0:09:40.240 data centers. And then all of a sudden, the same 0:09:40.360 --> 0:09:43.960 big tech companies are starting to do AI and that's 0:09:43.960 --> 0:09:49.360 an enormous use of power. So we've got data centers 0:09:49.720 --> 0:09:53.000 and then AI data centers, and then we've got the 0:09:53.000 --> 0:09:56.880 push to electrify everything. We want to use electric heating 0:09:56.880 --> 0:09:59.000 in your house instead of gas. We want to use 0:09:59.040 --> 0:10:02.880 electricity for your instead of gasoline. Where you've got factory 0:10:02.920 --> 0:10:06.920 these that are trying to use electricity for industrial heat 0:10:07.200 --> 0:10:10.800 instead of gas or coal. So it's just coming from 0:10:10.880 --> 0:10:14.280 every direction. But the crazy thing is we didn't really 0:10:14.280 --> 0:10:17.280 see this coming until about a year ago. So the 0:10:17.400 --> 0:10:22.240 utilities that build power plants, which takes years, weren't really 0:10:22.280 --> 0:10:27.040 planning for it that effectively. So now there's a potential 0:10:27.040 --> 0:10:29.040 looming shortage of electricity. 0:10:28.559 --> 0:10:31.120 Which makes me wonder should we just stop talking about 0:10:31.120 --> 0:10:34.000 the promise of AI and basically because we're not going 0:10:34.040 --> 0:10:35.920 to have enough power to meet the demand, Like, should 0:10:35.960 --> 0:10:39.400 we just stop it already? Because the expectations, the euphoria 0:10:39.440 --> 0:10:41.640 will is not going to be able to be met 0:10:41.679 --> 0:10:45.000 so easily or quickly, you know what the power demands. 0:10:45.080 --> 0:10:47.920 I'm not so worried about running out of power, like 0:10:47.960 --> 0:10:50.359 you turn on the light switch and there's no electricity 0:10:50.480 --> 0:10:53.040 for the lights. What I'm worried about is people not 0:10:54.200 --> 0:10:59.040 working for clean energy, so we're going to see electricity 0:10:59.080 --> 0:11:00.320 from anywhere they. 0:11:00.200 --> 0:11:00.600 Can get it. 0:11:00.600 --> 0:11:03.160 We've got people building more gas plants than we've seen 0:11:03.200 --> 0:11:05.480 in a long time. We got people that promised to 0:11:05.480 --> 0:11:08.400 shut down coal plants, now they're going let's keep those 0:11:08.400 --> 0:11:11.400 open a little longer. Yeah, Joshua about the gas plants 0:11:11.400 --> 0:11:11.640 a lot. 0:11:11.679 --> 0:11:14.200 Well, tell us about that, right, So there's a concept 0:11:14.240 --> 0:11:15.439 I wanted to bring up because I want to get 0:11:15.440 --> 0:11:17.280 I want to get listeners familiar with it. And it's 0:11:17.320 --> 0:11:20.720 baseload power. So the deal with wind and solar power 0:11:20.760 --> 0:11:22.640 is that it's intermittent, right, It's when the when the 0:11:22.640 --> 0:11:24.520 wind is blowing, when the sun is up, and it's 0:11:24.600 --> 0:11:28.240 very complicated to arrange a grid with a lot of 0:11:28.679 --> 0:11:31.440 clean energy sources because you have to balance the grid 0:11:31.440 --> 0:11:33.319 at all times. And when people wake up in the morning, 0:11:33.320 --> 0:11:35.600 they need the electricity running so they can run their 0:11:35.600 --> 0:11:38.280 appliances and get ready for their day. And sometimes if 0:11:38.320 --> 0:11:40.320 the sun isn't up at that point, that makes it tougher. 0:11:40.720 --> 0:11:43.720 What gas is really good at a big gas power 0:11:43.800 --> 0:11:47.120 plant is that it's baseload power just produces pretty close 0:11:47.120 --> 0:11:50.520 to the same amount of power all the time. Gas 0:11:50.559 --> 0:11:53.240 also produces carbon, which makes it a climate issue, which 0:11:53.280 --> 0:11:57.400 is what Will's talking about. But we had the CEO 0:11:57.440 --> 0:12:00.439 of g Vernova in recently and he basically said, as yeah, 0:12:00.600 --> 0:12:03.400 our wind sales are pretty flat, but our gas business 0:12:03.480 --> 0:12:06.880 is going bananas because they build the big gas turbines 0:12:06.960 --> 0:12:11.040 that uh, that power plants use to generate generate the power, 0:12:11.080 --> 0:12:14.600 and they've increased manufacturing and they're selling huge amounts of 0:12:14.600 --> 0:12:17.400 these gas turbines because that's what data centers want. 0:12:17.440 --> 0:12:18.000 He told us. 0:12:18.440 --> 0:12:21.079 Nobody's planning for anything other than twenty four to seven 0:12:21.960 --> 0:12:22.800 power usage. 0:12:23.000 --> 0:12:26.360 Is there a way that we can offload and by we, 0:12:26.480 --> 0:12:29.040 I mean the United States can offload some of this 0:12:29.320 --> 0:12:33.959 electricity usage, Josh outside of the country where electricity is 0:12:34.000 --> 0:12:38.160 more abundant in the sense, build some of these server 0:12:38.520 --> 0:12:42.520 farms in other places where there isn't an issue on 0:12:42.559 --> 0:12:42.959 the grid. 0:12:43.520 --> 0:12:45.640 It's it's complicated, it's hard to do. I mean with 0:12:45.640 --> 0:12:48.160 with data centers. It's hard because some things that are 0:12:48.160 --> 0:12:50.680 operating on the data center is certainly any anything related 0:12:50.679 --> 0:12:53.360 to national security. And even lots of companies they want 0:12:53.400 --> 0:12:55.680 their they want their data in the US, even in 0:12:55.800 --> 0:12:56.880 you know, you imagine then. 0:12:56.840 --> 0:12:57.599 They're shoring on. 0:12:57.760 --> 0:12:59.800 Shoring is like certainly something that you see with the 0:12:59.840 --> 0:13:01.080 day to centers. They want it nearby. 0:13:01.200 --> 0:13:02.960 Yeah, I mean, imagine a healthcare company. They don't want 0:13:02.960 --> 0:13:05.720 all their data stored in some country that they don't 0:13:05.720 --> 0:13:09.280 necessarily trust, so you run into issues with that. And 0:13:09.320 --> 0:13:12.280 as far as moving other users of power. Can't really 0:13:12.280 --> 0:13:16.240 move homes overseas without moving the family there, obviously, that's complicated. 0:13:16.280 --> 0:13:18.000 And then a big factory. You know, we want the 0:13:18.000 --> 0:13:19.800 big factory here because we want the jobs and we 0:13:19.840 --> 0:13:23.520 want the stuff produced here, so those power demands are 0:13:23.559 --> 0:13:24.800 also on shore. 0:13:24.960 --> 0:13:26.800 There's so many these that are coming to mind. Remind 0:13:26.880 --> 0:13:29.040 us guys about the rules and regulations that are in 0:13:29.040 --> 0:13:31.200 place in terms of carbon emissions, that the kind of 0:13:31.240 --> 0:13:35.240 commitments that companies and individuals or institutions have to abide 0:13:35.240 --> 0:13:38.040 by under the current administration or under the current rules, 0:13:38.320 --> 0:13:41.080 and how a new administration might change some of that. 0:13:42.120 --> 0:13:45.720 Okay, Well, when Biden came into office, he said he 0:13:45.800 --> 0:13:49.720 wanted to have a one clean power grid by twenty 0:13:49.800 --> 0:13:54.720 thirty five, and they set a twenty fifty net zero target. 0:13:55.240 --> 0:14:01.080 But these aren't really binding. These were goals, and I'm 0:14:01.120 --> 0:14:05.719 seeing increasing pessimism about reaching those goals, and. 0:14:05.640 --> 0:14:08.280 They don't even seem very close in the sense of 0:14:08.360 --> 0:14:10.160 years like those are pretty far. 0:14:10.080 --> 0:14:13.520 Up anyway, right, Yeah, But yeah, And we had so 0:14:13.679 --> 0:14:17.760 many companies, especially in like maybe the last five years, 0:14:18.160 --> 0:14:21.440 come out with their own internal net zero goals, and 0:14:21.720 --> 0:14:24.200 a lot of them are like really impressive and really ambitious. 0:14:24.480 --> 0:14:26.880 We're going to you know, utilities that promise to stop 0:14:26.880 --> 0:14:30.600 burning coal, big tech companies that said all of our 0:14:30.640 --> 0:14:32.440 operations are going to be carbon free. 0:14:32.560 --> 0:14:33.840 Yeah, that was before chat GPT. 0:14:34.640 --> 0:14:38.240 That's the problems. So these things were not binding, and 0:14:38.240 --> 0:14:40.760 now we're seeing a lot of companies kind of going 0:14:40.880 --> 0:14:43.240 radio silence on their goals, or some of them are 0:14:43.280 --> 0:14:45.400 just straight out saying, yeah, we're not going to make that. 0:14:45.480 --> 0:14:47.400 Does it matter if it's a global company in other words, 0:14:47.440 --> 0:14:49.960 because it's got a deal by global rules and global regulations, 0:14:50.040 --> 0:14:53.400 or no, not necessarily in terms of hitting carbon emissions, 0:14:53.480 --> 0:14:55.000 you know, reductions. 0:14:54.440 --> 0:14:57.080 The utilities, so the power companies actually producing their power, 0:14:57.080 --> 0:14:59.800 they're here, so their goals are here. We're already seeing 0:14:59.840 --> 0:15:01.920 those get kind of a little eroded around the edges. 0:15:02.000 --> 0:15:04.040 You know, companies saying, well, we said we're going to 0:15:04.080 --> 0:15:05.760 be done with coal by twenty thirty, we're actually going 0:15:05.800 --> 0:15:07.560 to be running these coal plants a little longer, but 0:15:07.600 --> 0:15:09.960 we're still sticking to our twenty fifty net zero goal. 0:15:10.160 --> 0:15:11.880 We're kind of seeing those eroded a little bit. But 0:15:11.920 --> 0:15:14.120 the way one one energy analyst put it to me recently, 0:15:14.120 --> 0:15:16.720 as he said, I mean, unless unless the company's goals 0:15:16.760 --> 0:15:18.920 are tied to some kind of state law, they're not 0:15:18.920 --> 0:15:21.640 really worth the paper they're written on, because they'll just 0:15:21.720 --> 0:15:23.720 keep getting eroded, and then as it gets closer to 0:15:23.720 --> 0:15:27.240 twenty fifty, they'll get you know, maybe maybe completely tossed 0:15:27.280 --> 0:15:27.840 out the window. 0:15:28.920 --> 0:15:31.480 Hey Will, what about nuclear? Where does nuclear come into this? 0:15:31.680 --> 0:15:33.240 Which is something like I feel like in the last 0:15:33.280 --> 0:15:35.160 two years, we all of a sudden here everybody talking 0:15:35.160 --> 0:15:35.720 about nuclear. 0:15:35.960 --> 0:15:38.000 Yeah, but I mean you've spent a lot of time 0:15:38.120 --> 0:15:41.800 business career facilities. Not so easy to just put a 0:15:41.800 --> 0:15:42.960 whole put a shuffle. 0:15:42.640 --> 0:15:43.600 In the ground and build one. 0:15:43.720 --> 0:15:44.600 No, nuclear is great. 0:15:44.640 --> 0:15:46.680 I mean Josh was talking about baseload power. You know 0:15:46.720 --> 0:15:49.440 it's even better for baseload nuclear it runs like ninety 0:15:49.440 --> 0:15:51.960 seven ninety nine percent of the time over the course 0:15:52.000 --> 0:15:53.560 of a year. You know, what's to not create about. 0:15:53.600 --> 0:15:57.320 Nuclear takes years to build. So we've got all of 0:15:57.360 --> 0:16:01.400 these companies seriously, Like the last couple of months, a 0:16:01.440 --> 0:16:04.360 lot of the big temp, big tech companies have announced 0:16:04.400 --> 0:16:08.600 these really big deals to use nuclear power to power 0:16:08.640 --> 0:16:12.960 their data centers in twenty thirty something when they're built, 0:16:13.000 --> 0:16:16.440 because there aren't any extra nuclear power plants laying around 0:16:17.080 --> 0:16:19.000 and it's going to take years to build them, and 0:16:19.000 --> 0:16:22.800 they're working with companies that are developing new technologies, so 0:16:24.120 --> 0:16:27.000 they hope they'll be ready in the next five years, 0:16:27.080 --> 0:16:29.240 but it's you know, there's always the chance they can 0:16:29.280 --> 0:16:32.240 get delayed, so in the meantime there's gonna be a 0:16:32.280 --> 0:16:32.960 lot of gas. 0:16:33.480 --> 0:16:37.680 It's kind of ironic, right, the move to clean energy 0:16:38.160 --> 0:16:41.880 is kind of complicating this process, right in terms of 0:16:41.920 --> 0:16:44.600 wanting as you said, the electrification of so much that 0:16:44.640 --> 0:16:48.000 it's making it difficult to kind of hit these targets. 0:16:48.320 --> 0:16:50.800 And I'm looking at, you know, a headline from today 0:16:50.880 --> 0:16:54.840 California reeling from extreme weathers, the wildfire risks return, and 0:16:54.880 --> 0:16:57.800 they also talk about another atmospheric river up in northern California. 0:16:57.840 --> 0:17:00.680 I mean, as we are talking about this, we continue 0:17:00.720 --> 0:17:05.360 to see it firsthand and increasingly the impact of climate change. 0:17:05.960 --> 0:17:08.400 So I just wonder kind of where this all leads us. 0:17:09.240 --> 0:17:11.879 Yeah, that's that's that's the right question, and the answer is, 0:17:11.920 --> 0:17:15.680 we don't know. We are seeing climate disasters in real time. 0:17:16.040 --> 0:17:18.639 In the summer it's too hot now in the fall 0:17:18.680 --> 0:17:21.920 and the winter, we're getting too much rain, and you're 0:17:22.040 --> 0:17:25.280 NK City, which are like unheard of, like yeah, make 0:17:25.359 --> 0:17:29.040 for great sunsets, but it smells bad and it Yeah, 0:17:29.080 --> 0:17:33.600 we're seeing the climate really has been affected. And that's 0:17:33.640 --> 0:17:36.600 the right question to ask, because yeah, all these factories 0:17:36.880 --> 0:17:39.359 are trying to decarbonize, but then where do you get 0:17:39.400 --> 0:17:41.760 the electricity? You know, the people to point out, Oh, 0:17:41.800 --> 0:17:43.720 you think you're so green because you've got an EV, 0:17:44.240 --> 0:17:47.439 but you're powering it with coal power. So there's a 0:17:47.480 --> 0:17:49.879 lot that has to happen. It's not an easy switch. 0:17:50.000 --> 0:17:52.439 Well, Josh, this is your beat, I mean, your energy 0:17:52.440 --> 0:17:55.639 and climate disasters reporter. So what is the fundamental connection 0:17:55.680 --> 0:17:56.679 between these two things? 0:17:57.760 --> 0:18:00.199 I see it. I see it that of course, the 0:18:00.200 --> 0:18:03.040 factories that produce the things we need for clean energy 0:18:04.119 --> 0:18:07.280 require power, but anything that we produce requires power. So 0:18:07.320 --> 0:18:11.200 I think overall that transition is still good for decarbonization, 0:18:11.359 --> 0:18:14.240 is still good for putting less carbon into the atmosphere 0:18:14.320 --> 0:18:18.200 and hopefully at least not accelerating those kinds of wildfires 0:18:18.200 --> 0:18:22.240 and those other things we're talking about. And I think 0:18:22.280 --> 0:18:24.280 that's more important. 0:18:23.840 --> 0:18:27.320 Than yeah, well, okay, so we'll come on in here 0:18:27.320 --> 0:18:30.240 because you mentioned the grid, and this is something that 0:18:30.280 --> 0:18:32.439 we haven't spent a lot of time talking about the 0:18:32.440 --> 0:18:34.800 health of the grid, and it's sort of this patchwork 0:18:34.840 --> 0:18:36.879 at least here in the United States, where you know 0:18:36.920 --> 0:18:40.160 you have Texas always comes to mind, for example, given 0:18:40.160 --> 0:18:42.000 the freeze that they saw a few years ago in 0:18:42.040 --> 0:18:44.600 the failure of the grid, where does the stability of 0:18:44.640 --> 0:18:45.879 the grid come into the conversation? 0:18:47.080 --> 0:18:50.520 That's another huge issue. A lot of the grid is 0:18:50.600 --> 0:18:53.000 not so stable, you know, a lot of the wires 0:18:53.000 --> 0:18:57.600 have been standing there for years and when a hurricane 0:18:57.680 --> 0:19:00.960 comes through, they get knocked down, saying they want to 0:19:01.040 --> 0:19:03.560 underground the wires because it's more reliable, which is a 0:19:03.560 --> 0:19:08.480 great idea, but expensive. You use the word patchwork. I 0:19:08.480 --> 0:19:12.400 think that's a pretty good word, especially because it's multiple 0:19:12.440 --> 0:19:15.880 systems operated by so many different companies and so many 0:19:15.880 --> 0:19:21.879 different jurisdictions with different rules. It's complicated. 0:19:22.920 --> 0:19:23.720 Well, we know it's like. 0:19:23.680 --> 0:19:24.760 That, Josh. 0:19:24.920 --> 0:19:27.439 I also do wonder is there something else within the 0:19:27.480 --> 0:19:29.840 all the energy space or new energy space that we're 0:19:29.840 --> 0:19:32.280 not talking about. My husband constantly is like, what about 0:19:32.359 --> 0:19:35.040 hydrogen fuel cells? Like that makes sense to me, Like 0:19:35.080 --> 0:19:37.040 I'm just curious, is there something that I don't know 0:19:37.040 --> 0:19:38.880 whether it's in the next year, or next six months 0:19:38.960 --> 0:19:41.199 or next two years that we start talking about that 0:19:41.280 --> 0:19:44.480 might help the situation. And just got about twenty five seconds. 0:19:44.600 --> 0:19:47.639 I think a lot of those things, fusion, hydrogen, a 0:19:47.640 --> 0:19:50.680 lot of those things are pretty far off. I think 0:19:50.720 --> 0:19:52.359 right now it kind of is just back to the 0:19:52.400 --> 0:19:55.160 basics that wind and solar takes a lot of takes 0:19:55.200 --> 0:19:58.320 some pressure off of the grid. Yeah, but yeah, right 0:19:58.359 --> 0:20:00.439 now it just looks like the next year looks like 0:20:00.640 --> 0:20:01.399 just more gas. 0:20:03.359 --> 0:20:05.120 I want to say, are you guys optimistic? 0:20:06.000 --> 0:20:08.399 No, no, no, but you'll be. 0:20:08.400 --> 0:20:11.720 Busy no Thanksgiving, my family asks me, like, what about 0:20:11.760 --> 0:20:13.600 this climate thing? Are we going to solve it? I'm like, 0:20:13.680 --> 0:20:15.600 I hope so, but I'm not optimistic. 0:20:15.680 --> 0:20:16.840 You're just there with the bad news. 0:20:16.880 --> 0:20:19.199 It gets worrisome. Hey guys, you keep us though up 0:20:19.200 --> 0:20:21.160 to speed. Thank you both so much. Will Wade Power 0:20:21.240 --> 0:20:23.879 Renewable Energy editor, and of course Josh Saw Energy and 0:20:23.880 --> 0:20:28.280 Climate Disasters reporter. Here at Bloomberg News, you're. 0:20:28.119 --> 0:20:32.040 Listening to the Bloomberg Business Week podcast. Listen live each 0:20:32.040 --> 0:20:35.040 weekday starting at two pm Eastern on Apple car Play 0:20:35.040 --> 0:20:37.920 and Android Auto with the Bloomberg Business app. You can 0:20:37.920 --> 0:20:41.199 also listen live on Amazon Alexa, from our flagship New 0:20:41.240 --> 0:20:44.879 York station. Just say Alexa, play Bloomberg eleven thirty. 0:20:46.480 --> 0:20:48.679