WEBVTT - Bloomberg Surveillance TV: March 25th, 2026 0:00:00.080 --> 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 Hordern. 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 --> 0:00:37.160 Terminal and the Bloomberg Business app. So here's the laces 0:00:37.240 --> 0:00:40.320 this morning, economic impacts of the Iran war mounting, with 0:00:40.440 --> 0:00:43.479 average gasoline prices in the US nearing four dollars per 0:00:43.520 --> 0:00:46.199 gallon globe was central banks weighing potential rate hikes with 0:00:46.240 --> 0:00:48.920 inflation not expected to fall to target levels. Joining us 0:00:48.960 --> 0:00:52.360 now to discuss Francis Donald of RBC. Francis, can we 0:00:52.400 --> 0:00:55.279 just begin with your outlook, your base case before this 0:00:55.360 --> 0:00:57.480 war and whether it's changed it to all looking out 0:00:57.640 --> 0:00:59.960 twelve months beast. 0:00:59.800 --> 0:01:02.640 Key before this war was something that looked a lot 0:01:02.720 --> 0:01:07.080 like stagflation, like growth that was slightly below comfort level 0:01:07.080 --> 0:01:10.920 and inflation that was slightly above comfort level, importantly driven 0:01:10.959 --> 0:01:15.560 by services inflation. Our outlook now is vibe stagflation medium, 0:01:15.840 --> 0:01:19.960 so more weighing on growth and more upside to inflation. 0:01:20.040 --> 0:01:21.800 Now, these are not massive figures. 0:01:21.840 --> 0:01:26.560 We're looking at three plus ish inflation, still high ones 0:01:26.760 --> 0:01:29.720 on growth, but it's not as comfortable as we would 0:01:29.720 --> 0:01:33.920 have liked. It certainly negates the tailwind coming from government spending, 0:01:34.240 --> 0:01:36.280 and inflation is probably going to. 0:01:36.319 --> 0:01:37.440 Lap itself again. 0:01:37.560 --> 0:01:40.360 I suspect next March we'll be celebrating the six year 0:01:40.400 --> 0:01:44.480 anniversary of inflation above that two percent target. So same 0:01:44.560 --> 0:01:47.480 directions and the wrong directions for this economy. 0:01:47.560 --> 0:01:50.480 Let's go with your medium grade stagflation, Francis. If we 0:01:50.520 --> 0:01:53.720 get medium grade stagflation, how does this fed A reserve respond? 0:01:53.760 --> 0:01:54.760 How much space do they have? 0:01:55.920 --> 0:01:56.920 They don't have space. 0:01:57.240 --> 0:02:00.680 Monetary policy is not the right tool for what ails. 0:02:00.400 --> 0:02:03.240 The US economy. And let's be clear, the US economy 0:02:03.320 --> 0:02:05.040 is not close to a recession. 0:02:05.160 --> 0:02:08.079 The unemployment rate is going to stay very low for 0:02:08.160 --> 0:02:11.800 supply side reasons lack of workers in the American economy 0:02:11.919 --> 0:02:15.360 rather than lack of demand going forward, and there's nothing 0:02:15.360 --> 0:02:17.480 the Federal Reserve can do. They can hiker cut all 0:02:17.520 --> 0:02:19.160 they want, it's not going to open the straight of 0:02:19.160 --> 0:02:22.800 horror moves. We are once again in a supply shock 0:02:22.840 --> 0:02:26.400 that limits the abilities of central banks to deal with 0:02:26.440 --> 0:02:30.120 what needs help in the US economy or any economy 0:02:30.160 --> 0:02:32.600 across the world. This is why we are increasingly leaning 0:02:32.600 --> 0:02:35.919 on fiscal policy. This is why government spending gets bigger 0:02:35.960 --> 0:02:36.359 and bigger. 0:02:36.360 --> 0:02:38.320 This is why the long end starts to rise. 0:02:38.760 --> 0:02:41.640 It's the same type of shock, of a different flavor. 0:02:41.840 --> 0:02:45.560 Unfortunately, So we're talking about the fiscal lever and a 0:02:45.560 --> 0:02:47.400 lot of people are looking at that and wondering are 0:02:47.400 --> 0:02:49.440 we really going to fit the bill for it. Yesterday 0:02:49.440 --> 0:02:51.800 we saw a pretty messy two year bond auction. Today 0:02:51.840 --> 0:02:54.640 we've got five year Tomorrow, we have seven year notes 0:02:54.680 --> 0:02:57.079 being sold by the US Treasury. How much are you 0:02:57.160 --> 0:03:01.680 getting concerned about buying government debt at these levels given 0:03:01.720 --> 0:03:04.040 the concern about how much that fiscal lever will be 0:03:04.080 --> 0:03:04.440 pulled on. 0:03:05.720 --> 0:03:09.080 Well, what I'm concerned about is more long run with 0:03:09.440 --> 0:03:12.520 US fiscal position, which is we have rising pressures on 0:03:12.600 --> 0:03:17.760 social security coming through. Interest costs are also rising, Defense costs. 0:03:17.440 --> 0:03:18.639 Are high, and again this. 0:03:18.600 --> 0:03:21.280 Is not a uniquely US situation. We see this in 0:03:21.320 --> 0:03:25.760 developed markets across the entire world, So leaving or having 0:03:25.800 --> 0:03:29.640 to rely on the fiscal lever necessitates big government and 0:03:29.720 --> 0:03:32.480 big government becoming the new norm going forward. 0:03:32.720 --> 0:03:35.160 And again it's not just a US issue, it's a 0:03:35.240 --> 0:03:36.800 new global macro factor. 0:03:37.040 --> 0:03:39.680 We've just switched our minds away from monetary policy being 0:03:39.680 --> 0:03:43.400 a cyclical driver towards governments and fiscal being the cyclical driver. 0:03:43.760 --> 0:03:47.320 The problem is that fiscal levers or governments tend to 0:03:47.360 --> 0:03:51.680 be more politically motivated, so your cycle becomes more attached 0:03:51.720 --> 0:03:53.960 to the political cycle as opposed. 0:03:53.600 --> 0:03:54.760 To the economic one. 0:03:54.960 --> 0:03:57.840 How much does your outlook change should this conflict go 0:03:57.920 --> 0:04:00.280 on in the Middle East for a longer period of time. 0:04:00.600 --> 0:04:03.240 In other words, you're talking about stagflation, like going to 0:04:03.280 --> 0:04:06.240 stagflation medium. The rest of the world is talking about 0:04:06.440 --> 0:04:10.200 runaway growth or recession, and there's nothing in between, depending 0:04:10.240 --> 0:04:12.560 on whether there's de escalation or not. How do you 0:04:12.640 --> 0:04:16.760 look at an ongoing prolonged enclosure of the Strait up 0:04:16.760 --> 0:04:23.080 removes and conflict in Iran as pressuring stiflation media. 0:04:21.880 --> 0:04:25.040 It's very uneven, and this is one of the challenges 0:04:25.080 --> 0:04:26.719 with the shock of this magnitude. 0:04:26.760 --> 0:04:30.000 Of course, we have net exporters of energy, so the. 0:04:30.000 --> 0:04:33.280 United States Canada where GDP doesn't get impacted on the. 0:04:33.200 --> 0:04:35.160 Top line to the same amount. And then you have 0:04:35.279 --> 0:04:36.320 net importers. 0:04:36.560 --> 0:04:39.640 Your net exporters, like the United States or Canada, for example, 0:04:39.839 --> 0:04:43.679 they're dealing with predominantly a price shock. That's one type 0:04:43.680 --> 0:04:46.320 of shock. But your net importers, well, they're dealing with 0:04:46.360 --> 0:04:50.040 a price shock and a supply shock that's a whole 0:04:50.080 --> 0:04:52.599 different ballgame than just an inflationary element. 0:04:52.640 --> 0:04:54.640 That's being on top of what the US and. 0:04:54.680 --> 0:04:58.520 Canada are currently facing underneath the surface. We also know 0:04:58.560 --> 0:05:02.719 it's an incredibly uneven thought uneven shocked for consumers. So 0:05:02.839 --> 0:05:06.200 on average, Americans, for example, spend less than two percent 0:05:06.279 --> 0:05:08.920 of all of what they spend on gasoline, but it's 0:05:08.960 --> 0:05:11.880 more near four percent for the bottom half of Americans. 0:05:12.160 --> 0:05:14.240 And so what concerns me more is we've talked a 0:05:14.279 --> 0:05:16.440 lot about things like case shapes, We've talked a lot 0:05:16.440 --> 0:05:18.760 about the US separating from the rest of the world. 0:05:18.839 --> 0:05:20.880 The longer this shock goes on, of course, it's going 0:05:20.920 --> 0:05:23.440 to change forecast numbers, but there's something a little more 0:05:23.480 --> 0:05:26.520 nefarious happening under the surface. We should be mindful of 0:05:26.520 --> 0:05:29.600 what that divergence underneath the forecast is going to do 0:05:30.240 --> 0:05:33.280 both to households but also to their sentiment, shocks, how 0:05:33.440 --> 0:05:36.400 they vote, their big implications to these shops that are 0:05:36.520 --> 0:05:39.320 very that create these divergences. 0:05:39.279 --> 0:05:42.719 Stay with US, multile Impex. Savana's coming up off to this. 0:05:52.000 --> 0:05:54.800 What we have is this administration potentially looking for this 0:05:54.920 --> 0:05:58.280 diplomatic off ramp and the Associated press saying that via 0:05:58.360 --> 0:06:02.000 Pakistani officials, the Iranians have received this plan, but it's 0:06:02.040 --> 0:06:04.200 really unclear, and you hear that from the President even 0:06:04.279 --> 0:06:07.240 yesterday saying we're unclear of who is running the country. 0:06:07.240 --> 0:06:11.760 So it's unclear Jonathan, who exactly in Washington is talking 0:06:11.800 --> 0:06:14.920 to who exactly in Tehran. And amidst all of this, 0:06:15.400 --> 0:06:18.159 we still have the straight of her moves effectively shut, 0:06:18.279 --> 0:06:23.120 especially for Western allies, as the Iranians continue to control 0:06:23.320 --> 0:06:25.800 that key waterway. And that is the focus of this 0:06:25.839 --> 0:06:30.080 morning's conversation with Ryan Peterson of Flexport, of course, the 0:06:30.120 --> 0:06:33.240 global logistics company. He is here in Washington, DC. He's 0:06:33.279 --> 0:06:35.279 a friend of the show, and I want to begin 0:06:35.320 --> 0:06:37.839 with a trip you made to the White House this week. 0:06:38.040 --> 0:06:40.200 You have been in discussions with this administration. What are 0:06:40.200 --> 0:06:42.799 they telling you about what is going on in terms 0:06:42.800 --> 0:06:47.640 of cargoes and shipping throughout these key waterways. 0:06:47.880 --> 0:06:50.040 Yeah, thanks for having me on. Well, so actually a 0:06:50.040 --> 0:06:51.880 lot of our conversations are about Terriss, but I did 0:06:51.960 --> 0:06:55.320 get a little bit of insight into what's happening, especially 0:06:55.760 --> 0:07:00.680 with jet fuel. With the accessibility of fuel on the 0:07:00.680 --> 0:07:03.839 West Coast and in Alaska, that's been a major concern 0:07:03.880 --> 0:07:07.039 for the administration to make sure that these areas get fuel. 0:07:07.080 --> 0:07:09.800 And as you know, California shut down a lot of 0:07:09.800 --> 0:07:14.000 our refineries in California where I live, and so there's 0:07:14.000 --> 0:07:16.240 a real risk there because they don't have enough connectivity 0:07:16.280 --> 0:07:20.280 to the rest of America's energy infrastructure. So they waved 0:07:20.280 --> 0:07:22.280 the Jones Act. So the Jones Act is this act 0:07:22.320 --> 0:07:25.520 that says that for domestic ocean freight. So if you 0:07:25.560 --> 0:07:30.200 want to ship oil or refined products from Texas other 0:07:30.200 --> 0:07:33.280 parts of the United States to California, or especially to Alaska, 0:07:33.320 --> 0:07:37.040 because Anchorage is such an important air freight airport, you 0:07:37.080 --> 0:07:40.080 can't do it on a foreign ship. That's what the 0:07:40.160 --> 0:07:43.520 Jones Act said. So the President waved the Jones Act 0:07:43.640 --> 0:07:46.080 to allow for these regions to get jet fuel from 0:07:46.120 --> 0:07:49.520 other parts of our country on non US made ships, 0:07:49.560 --> 0:07:51.760 which I think was a vital There was a real 0:07:51.800 --> 0:07:55.000 fear that Anchorage Airport wouldn't have air freight, and a 0:07:55.040 --> 0:07:56.880 lot of people don't know this, but Anchorage is probably 0:07:56.920 --> 0:08:00.320 the most important cargo airport in the United States, as 0:08:00.680 --> 0:08:04.080 cargo planes flying from Asia to the United States have 0:08:04.160 --> 0:08:05.680 to stop in Anchorage to refuel. 0:08:06.040 --> 0:08:08.880 What are companies your clients telling you right now, do 0:08:08.920 --> 0:08:11.120 they feel like some of the pressure is easing or 0:08:11.160 --> 0:08:12.600 things getting even more challenging. 0:08:12.720 --> 0:08:14.520 There's something I'm getting more and more challenging. I mean, 0:08:14.560 --> 0:08:16.720 the price of the price of air freight, especially has 0:08:16.760 --> 0:08:18.960 gone through the roof. If you're shipping from Asia to 0:08:18.960 --> 0:08:22.160 the United States, we're seeing prices have doubled since the 0:08:22.160 --> 0:08:24.480 beginning of the month, since the start of the conflict. 0:08:25.320 --> 0:08:28.360 Even that's carried over to the Asia to US trade lanes, 0:08:28.360 --> 0:08:32.160 where air freight prices have gone up a lot around well, 0:08:32.800 --> 0:08:35.440 initially it was around sixty percent. It's kind of stabilized 0:08:35.440 --> 0:08:37.800 a little bit, but more like across all of the lanes, 0:08:37.880 --> 0:08:40.520 Asia to US is up about twenty five percent. So 0:08:41.920 --> 0:08:43.920 obviously you're going to hear about that, complaints about that, 0:08:44.000 --> 0:08:46.760 but Actually the bigger problem is it's just available capacity. 0:08:46.920 --> 0:08:49.920 Twenty percent of all the capacity an air cargo. It's 0:08:49.920 --> 0:08:53.080 actually eighteen percent of the air cargo capacity in the 0:08:53.120 --> 0:08:55.680 world is operated by Middle Eastern airlines. 0:08:55.559 --> 0:08:56.480 So that's been caught off. 0:08:56.679 --> 0:08:59.760 Yeah, I think Emirates, think Katar Airways at the HOD. 0:09:00.240 --> 0:09:04.480 That probably includes SAD, the Saudi Airline, So that's a 0:09:04.520 --> 0:09:07.120 lot of capacity. It's effectively removed from the market. They've 0:09:07.120 --> 0:09:09.680 been operating limited flights. They've been trying to restore, but 0:09:09.720 --> 0:09:11.560 every time they come back, there's like another attack at 0:09:11.559 --> 0:09:14.199 the airport and they drop it again. So that's actually 0:09:14.240 --> 0:09:16.880 made it very difficult to get air freight moving at all. 0:09:16.960 --> 0:09:19.000 In some cases, there's just not enough capacity. 0:09:19.200 --> 0:09:21.280 I want to briefly end on the point you made 0:09:21.320 --> 0:09:23.760 about most of your conversation with the White Houses about tariffs, 0:09:23.800 --> 0:09:24.720 about what exactly. 0:09:25.200 --> 0:09:28.600 Yeah, well, we've been seeing a lot of tariff fraud. 0:09:29.840 --> 0:09:32.800 The United States allows foreign companies to import goods into 0:09:32.840 --> 0:09:36.480 the US without having any nexus any like a think 0:09:36.520 --> 0:09:38.679 of an entity or an LLC or anything like that. 0:09:38.720 --> 0:09:40.679 You can just foreign companies can just import into the 0:09:40.800 --> 0:09:43.960 United States. I mean, so we've observed at Flexport a 0:09:44.000 --> 0:09:47.440 huge percentage of trade has flipped to where the Chinese 0:09:47.440 --> 0:09:51.240 companies are importing it with Chinese freight forwarders and under 0:09:51.320 --> 0:09:54.760 declaring the commercial invoice value, effectively cheating on their terrafts. 0:09:54.760 --> 0:09:56.720 So we've been calling attention to this and partnering with 0:09:56.760 --> 0:10:02.480 them on how they might enforce this, and so that 0:10:02.840 --> 0:10:05.240 was a big agenda point for me, is sharing what 0:10:05.240 --> 0:10:07.200 we're seeing in the data how this is happening, but 0:10:07.280 --> 0:10:10.079 also trying to learn what's going to happen with tariff refunds. 0:10:11.400 --> 0:10:14.200 And as you know, the Supreme Court overturned the AIPA tariffs. 0:10:14.240 --> 0:10:16.559 Is one hundred and sixty six billion dollars that companies 0:10:16.559 --> 0:10:21.080 are owed and CBP has said publicly that only six 0:10:21.120 --> 0:10:24.360 percent of companies have registered their bank account with the 0:10:24.400 --> 0:10:26.880 government to receive these refunds. So that's something that flex 0:10:26.880 --> 0:10:28.600 Sport has been all over trying to help companies get 0:10:28.600 --> 0:10:31.160 their refunds back when when that process starts. 0:10:31.400 --> 0:10:34.079 Stay with US multil index to fan it's coming up 0:10:34.400 --> 0:10:34.880 off to this. 0:10:44.080 --> 0:10:46.679 The Iranians are saying that these talks are illogical, and 0:10:46.760 --> 0:10:49.319 a man that sits really at the center the intersection 0:10:49.400 --> 0:10:52.480 of all of this has experienced now in prior experience, 0:10:52.679 --> 0:10:57.560 whether it's geopolitics, financial markets, are actually a decorated combat veteran. 0:10:57.679 --> 0:11:01.920 I am joined now by Senator David mccormy from Pennsylvania. Senator, 0:11:02.000 --> 0:11:04.040 thank you so much for joining me, and good morning 0:11:04.040 --> 0:11:04.360 to you. 0:11:05.120 --> 0:11:05.720 Good morning. 0:11:07.120 --> 0:11:08.920 So I'm not sure if you just saw the news, 0:11:08.960 --> 0:11:13.000 but Iran has saying that these ceasefire talks are non 0:11:13.000 --> 0:11:16.160 existed and they're calling what the US is calling for 0:11:16.559 --> 0:11:20.280 as elogical. What is your understanding right now at the 0:11:20.280 --> 0:11:23.240 White House is putting forward? You sit on the Senate 0:11:23.280 --> 0:11:27.040 Foreign Relations Committee? Is the President buying time? Is this 0:11:27.120 --> 0:11:28.840 diplomacy or is this a distraction? 0:11:30.000 --> 0:11:32.680 Well, I wouldn't put much stock into what the Iranian 0:11:32.760 --> 0:11:35.480 spokesman say. Think about this way. If you're the person 0:11:35.520 --> 0:11:38.640 that's trying to negotiate some sort of endgame and you've 0:11:38.640 --> 0:11:43.439 got a bunch of radicals as part of the constellation 0:11:43.520 --> 0:11:46.760 of forces in Iran, you're certainly not going to present 0:11:46.840 --> 0:11:50.320 yourself as the voice of reason. So a lot of 0:11:50.320 --> 0:11:52.600 what's happening I think in the public domain shouldn't give 0:11:52.640 --> 0:11:55.360 us too much insight into what's happening behind the scenes. 0:11:55.400 --> 0:11:58.400 I think, stepping back bottom line, if you would have 0:11:58.400 --> 0:12:01.480 said on the first day of common operations, where will 0:12:01.520 --> 0:12:04.360 we be twenty twenty one days, twenty two days into this. 0:12:04.840 --> 0:12:08.280 I think from a military perspective, we've made enormous progress. 0:12:08.400 --> 0:12:13.200 We still have work to do, but we've eliminated ballistic missiles, drones, 0:12:13.520 --> 0:12:18.280 manufacturing capability the Navy, and those are the goals that 0:12:18.320 --> 0:12:21.079 President Trump set out, along with making sure Ron can 0:12:21.080 --> 0:12:24.240 never get a nuclear weapon. So question one for America, 0:12:24.280 --> 0:12:26.280 I think is where are we relative to those goals. 0:12:26.360 --> 0:12:27.920 I think we've made a lot of progress, but we've 0:12:27.920 --> 0:12:31.240 got to finish that job. And then second, we've got 0:12:31.240 --> 0:12:34.880 to make sure we secure the Straits of Hormuz, and 0:12:34.920 --> 0:12:39.040 I think there's multiple ways to try to lessen the 0:12:39.040 --> 0:12:42.040 blow of an oil markets. One, the administration is doing 0:12:42.080 --> 0:12:44.240 a lot of things to make sure there's adequate supply, 0:12:44.800 --> 0:12:46.840 but inevitably we're going to have to be able to 0:12:47.040 --> 0:12:49.679 show the markets and show the world that we can 0:12:49.720 --> 0:12:53.120 put ships through the straits, and that's going to require 0:12:53.160 --> 0:12:56.440 some combination of our allies working together with our military 0:12:56.480 --> 0:13:00.200 to eliminate that threat. Once those two things happen, I 0:13:00.200 --> 0:13:03.120 think we have a much more stable, secure situation, and 0:13:03.600 --> 0:13:05.480 I think well, you know, we're on a path to 0:13:05.520 --> 0:13:07.679 being able to look back and saying we've achieved the 0:13:07.720 --> 0:13:09.680 objectives there, but obviously there's more. 0:13:09.520 --> 0:13:09.960 Work to do. 0:13:11.000 --> 0:13:14.360 We could that happen through this fifteen point plan the 0:13:14.400 --> 0:13:19.400 administration has given the Iranians via Pakistani officials. 0:13:20.120 --> 0:13:22.400 Yeah, I think it could. I mean, you know, the 0:13:23.040 --> 0:13:25.280 most important goal of the United States, and it was 0:13:25.480 --> 0:13:28.560 the goal from day one. This was a regime that 0:13:28.840 --> 0:13:32.319 was underwriting to terrorist organizations around the world. It had 0:13:32.360 --> 0:13:34.720 more American blood on its hands than any other country. 0:13:34.720 --> 0:13:37.720 It was building up an enormous ballistic missile capability. To 0:13:37.760 --> 0:13:40.800 think Iran was formidable today, imagine three years from now. 0:13:41.240 --> 0:13:43.320 It had called America the Great Satan that I wanted 0:13:43.320 --> 0:13:45.160 to destroy, and it was committed to a new groar weapon. 0:13:45.360 --> 0:13:50.080 That was an unsustainable position. We had to eliminate that threat. 0:13:50.640 --> 0:13:54.520 If that threat is eliminated and the Iranian regime, whatever 0:13:54.559 --> 0:13:57.480 form it takes, is committed to not rebuilding nuclear weapons 0:13:57.480 --> 0:14:01.720 and not restarting its ballistic missile that's the basis for 0:14:01.840 --> 0:14:04.920 a negotiation. You know. The straits of hormous This is 0:14:06.080 --> 0:14:08.360 I laugh when when I hear people saying, maybe they 0:14:08.360 --> 0:14:11.000 didn't think of that. I mean, this has been the 0:14:11.040 --> 0:14:14.600 strategic question for decades. When I deployed to the golf 0:14:14.640 --> 0:14:19.280 in nineteen ninety, this was a primary consideration. Oil prices 0:14:19.400 --> 0:14:22.560 were over one hundred dollars in today's dollars, and in 0:14:22.600 --> 0:14:25.160 the financial crisis when I was the undersect for the Treasury, 0:14:25.720 --> 0:14:30.120 oil prices hit two hundred dollars in today's prices. So 0:14:30.840 --> 0:14:33.920 creating stability in the Straits and making sure it's secure 0:14:34.360 --> 0:14:37.240 is a critical geopolitical objectives, and we're going to have 0:14:37.320 --> 0:14:40.800 to We can't leave this situation until we're sure the 0:14:40.800 --> 0:14:44.560 Straits are going to be secure, and certainly Iran is 0:14:44.560 --> 0:14:48.920 a military threat is going to be dramatically diminished, which 0:14:49.040 --> 0:14:49.520 was the goal. 0:14:50.560 --> 0:14:54.040 I want to pick up on your pass your old division. 0:14:54.160 --> 0:14:57.840 The eighty second Airborne is being deployed two thousand troops. 0:14:58.200 --> 0:15:00.880 Is it your understanding that those SERVE members, along with 0:15:00.920 --> 0:15:04.240 the two Marine Expeditionary units will be used to secure 0:15:04.280 --> 0:15:04.960 the straight. 0:15:07.400 --> 0:15:09.360 I think the President's doing exactly what he should do, 0:15:09.400 --> 0:15:15.200 which is he's creating maximum optionality. Those forces in the 0:15:15.240 --> 0:15:18.680 region relatively small numbers five or six thousand in total. 0:15:19.040 --> 0:15:21.040 Once the eighty second gets there, they just give him 0:15:21.080 --> 0:15:25.040 lots of optionality. There's all sorts of potential ways that 0:15:25.120 --> 0:15:28.840 you might use the combination of air power, naval power, 0:15:29.080 --> 0:15:32.320 and ground troops to secure the Straits. So I think 0:15:32.320 --> 0:15:35.800 the president's smart to create options, and he's made the 0:15:35.840 --> 0:15:38.120 objectives clear, which is, we got to get rid of 0:15:38.120 --> 0:15:42.320 this military capacity to kill Americans, threaten our allies, and 0:15:42.840 --> 0:15:45.480 we've got to have the straits secure and open to 0:15:45.520 --> 0:15:48.880 global commerce. Those two things are critical. I also want 0:15:48.920 --> 0:15:50.880 to make a point that if you look at this 0:15:50.960 --> 0:15:54.120 situation compared to those past situations two thousand and eight 0:15:54.160 --> 0:15:57.520 that I mentioned or nineteen ninety, what's different is the 0:15:57.600 --> 0:16:01.120 commitment to energy dominance that we have here in America, 0:16:01.160 --> 0:16:02.880 and I give President Trump a lot of credit for that. 0:16:02.920 --> 0:16:06.040 We're a net exporter. We are well on the way 0:16:06.080 --> 0:16:09.520 to building enormous capacity based on the steps that President 0:16:09.560 --> 0:16:12.800 has taken. So we are more isolated from the shock 0:16:13.200 --> 0:16:15.080 associated with what's going on in the Middle East than 0:16:15.080 --> 0:16:17.920 we've ever been in the past. And others China and 0:16:17.920 --> 0:16:21.320 Europe and others are not as isolated because they haven't 0:16:21.320 --> 0:16:24.080 had that kind of capability and leadership that we have 0:16:24.120 --> 0:16:24.920 in the United States. 0:16:26.160 --> 0:16:29.200 Of course, your former job. Our audience knows you very well. 0:16:29.240 --> 0:16:32.640 You ran Bridgewater Associates, this massive hedge fund. I just 0:16:32.640 --> 0:16:34.360 would also love to get your take in terms of 0:16:34.360 --> 0:16:39.080 what's going on with financial markets. Energy prices have been whipsawing. 0:16:39.160 --> 0:16:42.400 We're seeing trading ranges you would normally see in a year, 0:16:42.600 --> 0:16:46.800 even two years, that are happening within moments, especially most 0:16:46.880 --> 0:16:51.960 recently regarding what's happening in the oil futures moment. Do 0:16:52.000 --> 0:16:55.440 you understand exactly what is going on in terms of 0:16:55.640 --> 0:16:58.840 the financial markets. Do you think they're too paying too 0:16:58.840 --> 0:17:02.320 close attention to potentially what Trump says and not exactly 0:17:02.400 --> 0:17:02.960 what he's doing. 0:17:04.600 --> 0:17:07.440 Well, listen, I wouldn't be one to want to stand 0:17:07.480 --> 0:17:09.960 here and try to predict markets, but I do think 0:17:10.400 --> 0:17:13.800 if you look through this moment, so look weeks months 0:17:13.840 --> 0:17:16.359 ahead and don't get caught up in the day to 0:17:16.440 --> 0:17:19.480 day whip sawing, I think you can see a path 0:17:19.640 --> 0:17:24.320 to a circumstance where energy markets more broadly and American 0:17:24.359 --> 0:17:27.520 interests more specifically are in much better, a much better 0:17:27.560 --> 0:17:29.840 situation than they were before the President took action in 0:17:29.920 --> 0:17:33.480 Venezuela and in Iran. So imagine a world where Iran 0:17:33.560 --> 0:17:36.600 no longer has the capacity to threaten the straits. The 0:17:36.640 --> 0:17:39.840 straits are open, and so we have that constant supply 0:17:39.960 --> 0:17:43.200 that goes through there with security. Thirty percent of the 0:17:43.200 --> 0:17:46.439 oil reserves in the world are in Venezuela and Iran, 0:17:46.920 --> 0:17:50.600 and those certainly Venezuela, but hopefully Iran will be much 0:17:50.640 --> 0:17:55.480 more amendable pro Western when the dust settles. I'm not 0:17:55.480 --> 0:17:57.440 trying to be too pollyannish here, but if you think 0:17:57.480 --> 0:18:00.600 through the path of what we might see in three months, 0:18:00.640 --> 0:18:03.639 six months, I think it's a much more stable world. 0:18:04.000 --> 0:18:06.159 I think it's a much more stable Middle East. I 0:18:06.200 --> 0:18:08.479 think the Straits of Hormouse are more secure than they 0:18:08.480 --> 0:18:11.959 were before this started. And I think global oil markets 0:18:11.960 --> 0:18:15.600 and global energy markets are much more stable. And again, 0:18:15.640 --> 0:18:17.880 I want to come back to this. This happens within 0:18:17.920 --> 0:18:22.760 the context of America Energy and Pennsylvania Energy. We're the 0:18:22.840 --> 0:18:26.159 second largest energy producer in America. We're the fourth largest 0:18:26.200 --> 0:18:30.280 natural gas reserves in the world. We're unlocking that potential. 0:18:30.359 --> 0:18:32.720 So I would imagine again when the dust settles, that 0:18:32.840 --> 0:18:37.680 Europe will be a much bigger buyer and recipient of 0:18:37.920 --> 0:18:41.320 American energy because they've now seen some of the uncertainty 0:18:41.359 --> 0:18:44.000 that goes with having Russia as a supplier, the Middle 0:18:44.040 --> 0:18:47.400 East as a supplier, So I think specifically. 0:18:48.160 --> 0:18:50.520 Says that are just specifically on the oil futures market, 0:18:50.520 --> 0:18:53.639 there was a massive trade just minutes before the President's 0:18:53.640 --> 0:18:56.320 truth came out, and we've had guests on this program, 0:18:56.359 --> 0:18:59.200 some of your former colleagues in your old world saying 0:18:59.200 --> 0:19:02.320 that is highly suspicious. At minimum, didn't want to go 0:19:02.359 --> 0:19:05.480 far to say it's manipulation, but are you concern that 0:19:05.520 --> 0:19:09.080 there has been manipulation when it comes to some of 0:19:09.119 --> 0:19:11.760 the posts or statements we're seeing from the White House 0:19:11.800 --> 0:19:15.800 and massive trades taken just before those moments. 0:19:17.119 --> 0:19:21.400 Well, in general, without going specific to that, in general, 0:19:22.000 --> 0:19:26.639 I'm concerned about the fact that information can be leaked 0:19:26.640 --> 0:19:29.800 in a way out of the government or two public 0:19:29.800 --> 0:19:32.280 officials in a way that people benefit from, whether it's 0:19:32.280 --> 0:19:35.040 public officials or otherwise. I just cosponsored a piece of 0:19:35.119 --> 0:19:38.639 legislation to eliminate the ability of members of Congress to 0:19:38.680 --> 0:19:41.720 trade equities. Not because I think there's massive fraud going 0:19:41.760 --> 0:19:44.560 on or something like that, but because even the perception 0:19:45.359 --> 0:19:49.679 of people benefiting from insider information that resides within the 0:19:49.720 --> 0:19:54.200 government I think is extremely problematic. So I can't comment 0:19:54.200 --> 0:19:56.120 on the specifics of those trades, but what I will 0:19:56.119 --> 0:19:58.040 comment on is I think there's a clear set of 0:19:58.080 --> 0:20:01.159 rules and laws thatverybody needs to adhere to if you're 0:20:01.200 --> 0:20:03.280 in public life. And then second, we also need to 0:20:03.280 --> 0:20:05.600 worry about the perceptions associated with that and take the 0:20:05.640 --> 0:20:07.919 extra mile to make sure that the public can be 0:20:07.960 --> 0:20:11.960 confident that public officials are acting solely in the interest 0:20:12.040 --> 0:20:12.600 of the public. 0:20:13.680 --> 0:20:14.959 We hear a lot, and I've been hearing a lot 0:20:15.000 --> 0:20:17.840 how the physical market is so different right now than 0:20:17.880 --> 0:20:20.159 the paper market when it comes to energy. You mentioned 0:20:20.160 --> 0:20:22.400 what is going on in terms of how America really 0:20:22.440 --> 0:20:24.040 is a net ex border now, so we are a 0:20:24.040 --> 0:20:26.560 little bit more insulated from this. But still, I'm sure 0:20:26.560 --> 0:20:29.960 you've heard from constituents prices are going up, Gasoline is 0:20:30.000 --> 0:20:33.359 a hair away from four dollars a gallon. How is 0:20:33.480 --> 0:20:35.320 Congress set to address this? 0:20:36.160 --> 0:20:38.800 Yeah, I'm glad you mentioned that. I should have mentioned 0:20:38.800 --> 0:20:43.120 that that's a huge issue that's happening on the ground. 0:20:43.160 --> 0:20:46.679 In Pennsylvania. The gallon of gas is about sixty cents 0:20:46.720 --> 0:20:50.720 more than it was before this started. And if you're 0:20:50.720 --> 0:20:53.920 a working family, the meeting income in Pennsylvany is about 0:20:53.920 --> 0:20:56.600 fifty two thousand dollars a year. If you're a working family, 0:20:56.640 --> 0:21:03.000 this pushs real pressure on you. We've made enormous progress 0:21:03.040 --> 0:21:06.199 since the President took office on bringing down the rate 0:21:06.240 --> 0:21:08.560