WEBVTT - Bloomberg Surveillance TV: June 18, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.239 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 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:35.840 Terminal and the Bloomberg Business app. 0:00:36.560 --> 0:00:39.000 You and Nuclear Watchdog Saying in Richmond. 0:00:39.080 --> 0:00:42.519 Facilities in Iran have taken direct military strikes. 0:00:42.600 --> 0:00:44.239 Joining us now is I'm so pleased to. 0:00:44.240 --> 0:00:49.480 Say the IAEA Director General, Raphael Grossi, Director General, You've 0:00:49.520 --> 0:00:51.640 had a very busy couple of weeks. 0:00:51.640 --> 0:00:53.360 Thank you so much for making time for us. 0:00:53.479 --> 0:00:56.400 I wanted to start with what damage has been done 0:00:56.520 --> 0:00:58.800 and what remains operational in Iran. 0:00:59.640 --> 0:01:01.640 Well, thank you very much. A pleasure to be with you. 0:01:03.040 --> 0:01:06.160 There has been a number of There have been a 0:01:06.240 --> 0:01:09.080 number of attacks since the beginning of the operation. First 0:01:09.120 --> 0:01:12.600 of all, a very important facility in Athans was badly 0:01:12.680 --> 0:01:19.560 hit with a full enrichment operating hall being destroyed completely 0:01:19.640 --> 0:01:26.680 above ground means that it means then the electrical substation 0:01:27.120 --> 0:01:33.560 and power infrastructure in this big facility also being taken 0:01:33.560 --> 0:01:39.160 out with a direct impact on a very important underground 0:01:39.560 --> 0:01:43.800 enrichment facility which is which is also there because of 0:01:43.800 --> 0:01:47.319 the sudden loss of power that caused of course immediate 0:01:47.480 --> 0:01:51.160 damage to these very delicate systems that the ultra centrifugues 0:01:51.240 --> 0:01:54.000 that produce the enriched uranium are. 0:01:54.480 --> 0:01:55.360 So this is one thing. 0:01:55.960 --> 0:02:00.880 Is Soahan, another very important nuclear compound which was repeatedly 0:02:01.320 --> 0:02:05.920 hit with a few buildings being affected. The one that 0:02:06.720 --> 0:02:11.920 has not sustained a similar degree of damage seems to 0:02:11.919 --> 0:02:16.240 be so far a very important facility which is also 0:02:17.000 --> 0:02:23.560 has the most important and sensitive parts secuted underground deep 0:02:23.680 --> 0:02:27.080 in the mountains, which is the facility at four door today. 0:02:27.520 --> 0:02:30.600 So you mentioned Isfahan, So if I could just jump in, 0:02:31.400 --> 0:02:33.919 is the four hundred and nine kilogram stockpile of highly 0:02:34.040 --> 0:02:38.519 urined uranium still safely underground and that site. 0:02:38.800 --> 0:02:43.120 Well, to say safely, I'm not so sure what could 0:02:43.120 --> 0:02:44.240 be could be the case. 0:02:44.680 --> 0:02:46.320 Let me say, let me say one thing. 0:02:46.160 --> 0:02:49.360 Which is very very important. It is it is in principle, 0:02:49.480 --> 0:02:52.280 it is there. It is stored there, as you can imagine, 0:02:52.680 --> 0:02:55.200 at a time of war. At a time of war, 0:02:56.280 --> 0:03:01.600 all nuclear sites are closed, so are in inspecters who 0:03:01.680 --> 0:03:06.800 are still i must say still in Iran, although they 0:03:06.800 --> 0:03:09.720 are in a protected place as you can imagine, but 0:03:09.800 --> 0:03:15.079 they are not inspecting no inspection, normal activity can take place. 0:03:15.240 --> 0:03:19.560 We assume we have not seen anything that would suggest 0:03:20.320 --> 0:03:23.840 that the stockpile has been moved, but of course this 0:03:24.480 --> 0:03:28.200 might need to be reconfirmed as soon as we have access. 0:03:28.720 --> 0:03:30.840 One has to say that Iran is aware of the 0:03:30.880 --> 0:03:36.960 fact that this stockpile needs to be there under iaa 0:03:37.240 --> 0:03:38.440 constant supervision. 0:03:38.800 --> 0:03:41.440 Well, even before hostilities began, Iran had told you they 0:03:41.440 --> 0:03:45.440 would implement special measures to protect its enriched uranium stockpile. 0:03:45.520 --> 0:03:48.640 What specifically are those special measures and how are they 0:03:48.720 --> 0:03:50.960 impacting your team that's on the ground. 0:03:51.680 --> 0:03:52.200 We don't know. 0:03:52.720 --> 0:03:56.160 We have been informed, as you rightly say, and I 0:03:56.320 --> 0:04:00.200 was also totally one of my last personal meetings with 0:04:00.360 --> 0:04:06.000 a foreign minister, doctor Abbas ACTI, that in case something happened, 0:04:07.160 --> 0:04:11.680 Iran would take measures to protect its material, equipment and 0:04:11.760 --> 0:04:15.480 so forth. But we haven't been informed of anything in detail. 0:04:15.560 --> 0:04:19.080 We have reminded, and I have personally reminded in a 0:04:19.160 --> 0:04:23.080 letter to Foreign Minister or ACGLY that there are obligations 0:04:23.240 --> 0:04:26.480 that need to be observed and that of course we 0:04:26.600 --> 0:04:31.120 would be available in case they want to share with us, 0:04:31.960 --> 0:04:34.360 as they should, what they are planning to do. If 0:04:34.400 --> 0:04:36.960 they are planning to do anything, we don't know what 0:04:37.000 --> 0:04:40.120 these protective additional measures could be. 0:04:40.640 --> 0:04:42.200 Even before the hostilities. We know. 0:04:42.279 --> 0:04:46.040 Your inspectors also reported that there was no systemic weapons programmed. 0:04:46.080 --> 0:04:49.880 Does that mean that no smoking gun existed to justify 0:04:49.880 --> 0:04:53.960 what we're seeing right now with preemptive invasion, Well, I. 0:04:53.880 --> 0:04:57.359 Don't know the metric of a smoking gun. How you 0:04:57.440 --> 0:04:58.600 would define that. 0:05:00.440 --> 0:05:01.640 To making a nuclear weapons? 0:05:01.880 --> 0:05:03.880 I have said, let me get to that. 0:05:04.279 --> 0:05:08.840 I have said that no country in the world is 0:05:09.080 --> 0:05:13.640 enriching uranium at this level of sixty percent, which is 0:05:13.680 --> 0:05:18.560 technically almost equivalent of ninety percent, which is needed to 0:05:18.640 --> 0:05:20.479 have a nuclear weapon. 0:05:21.000 --> 0:05:22.960 At the same time, we are inspectors. 0:05:22.960 --> 0:05:28.520 We are not political analysts or national political officials, so 0:05:28.839 --> 0:05:33.159 we have to have concrete proof in order to say 0:05:33.520 --> 0:05:37.240 that there is an active program to make a nuclear 0:05:37.279 --> 0:05:41.920 weapon which we have not seen. That doesn't mean that 0:05:41.960 --> 0:05:46.120 doesn't mean that they are in a territory which is 0:05:46.520 --> 0:05:50.599 of concern, and this is the reason why there is 0:05:50.680 --> 0:05:54.560 international concern. Why I had a very i would say 0:05:54.800 --> 0:05:58.359 serious report that I presented, as you may know, to 0:05:58.480 --> 0:06:01.960 the Board of Governors of the EYE a few days ago. 0:06:03.400 --> 0:06:07.359 I should also mention that in my conversations with my 0:06:07.400 --> 0:06:10.719 Iranian counter counterparts, they have always reminded that there is 0:06:10.760 --> 0:06:14.039 a fatua from the leader saying that no nuclear weapon 0:06:14.120 --> 0:06:17.479 would be compatible with Islam and things like that. But 0:06:17.520 --> 0:06:20.200 at the same time I have told them that many 0:06:20.320 --> 0:06:25.080 high officials have said that Iran has all the pieces 0:06:25.360 --> 0:06:29.360 of the puzzle, so to speak. So there has been 0:06:29.440 --> 0:06:32.400 a lot of ambiguity, and this is never good. 0:06:32.680 --> 0:06:35.720 Director General, There's a real question about what type of 0:06:36.200 --> 0:06:39.279 nuclear risk there is should there be some sort of 0:06:39.320 --> 0:06:41.400 explosion at some of these facilities. I know you've been 0:06:41.720 --> 0:06:43.599 directing a number of studies on this. 0:06:44.040 --> 0:06:45.360 What if you detected so far? 0:06:45.600 --> 0:06:49.760 And how concerned are you that a direct strike on 0:06:50.000 --> 0:06:53.760 Photo in particular could release nuclear material into the environment. 0:06:54.480 --> 0:06:57.160 Well, there could be, of course a release. We are 0:06:57.200 --> 0:07:02.480 following as good and as much as we can every 0:07:03.120 --> 0:07:06.919 military activity and assessing. 0:07:06.560 --> 0:07:10.960 The radiological impact of those. 0:07:11.040 --> 0:07:16.200 For example, I informed that in Natans, this facility that 0:07:16.560 --> 0:07:21.720 sustained the most I would say serious damage. There has 0:07:21.800 --> 0:07:25.960 been some contamination, but it is contained inside the perimeter 0:07:26.320 --> 0:07:28.920 if you want, of the facility, so there is no 0:07:29.200 --> 0:07:33.200 immediate danger for the population. Then if you move to 0:07:33.520 --> 0:07:40.960 a higher amount of material like for example, these highly 0:07:41.040 --> 0:07:43.800 enriched uranium and more, because there is not only let's 0:07:43.800 --> 0:07:47.440 not forget, there's not only the sixty percent, there's the 0:07:47.680 --> 0:07:52.440 five percent stop pile, there's the twenty percent stockpile. There's 0:07:52.520 --> 0:07:56.600 a lot of nuclear material around in the country. And 0:07:56.680 --> 0:08:00.680 of course a direct impact would have a radiological sequences 0:08:00.720 --> 0:08:03.800 which would be commensurate with the attack. So this is 0:08:03.840 --> 0:08:09.360 why I must I unfortunately cannot be as precise as 0:08:09.400 --> 0:08:12.560 I would like to, because it would depend if only 0:08:12.600 --> 0:08:17.320 a part of it is affected or more. But certainly, 0:08:17.600 --> 0:08:23.920 certainly the possibility of a radiological impact environmental impact exists. 0:08:24.200 --> 0:08:27.560 And as you also know, there are other facilities, including 0:08:27.600 --> 0:08:32.480 a nuclear power plant in Iran, which of course should 0:08:32.520 --> 0:08:37.400 never be touched because this could be another level of. 0:08:39.960 --> 0:08:46.400 Concern and environmental damage. So this is where this is 0:08:46.440 --> 0:08:47.079 what we see at. 0:08:47.040 --> 0:08:48.240 The moment, Director General. 0:08:48.400 --> 0:08:50.680 This is one reason why some people have speculated that 0:08:50.720 --> 0:08:54.439 there has been hesitance by Israelis as well as by 0:08:54.440 --> 0:08:58.040 the United States truly dropping some of the bunker bombers 0:08:58.080 --> 0:09:03.679 and other types of military equipment to try to destroy 0:09:03.800 --> 0:09:05.920 some of this weaponry. Do you think that this is 0:09:05.960 --> 0:09:08.880 actually a real risk, the sort of release potentially of 0:09:09.080 --> 0:09:13.319 radiological material into the environment that you think people are 0:09:13.320 --> 0:09:16.880 taking seriously. Have you had conversations with the US or Israel. 0:09:18.000 --> 0:09:22.199 Well, we have reminded everyone not that we need to 0:09:22.840 --> 0:09:26.800 be honest, because I think in the United States, you 0:09:26.880 --> 0:09:30.720 are the leading country in nuclear science and technology in 0:09:30.800 --> 0:09:35.679 the world. So I think there is complete awareness. And 0:09:35.720 --> 0:09:38.760 also in Israel and in Iran, and in the region 0:09:38.840 --> 0:09:41.400 and in Europe. I'm talking to and I would say 0:09:41.440 --> 0:09:44.720 in the Gulf States, I'm getting lots of calls from 0:09:45.440 --> 0:09:49.240 high officials, ministers, prime ministers. They are all very, very 0:09:49.280 --> 0:09:54.880 concerned about this probability. And I think, of course, I'm 0:09:54.880 --> 0:09:58.520 a diplomat, I'm not private to military decision making. But 0:09:59.360 --> 0:10:01.880 I want to believe and I think this should be 0:10:01.920 --> 0:10:06.319 the case that the potential radiological consequences of any military 0:10:06.400 --> 0:10:10.240 action is well taken into into account. But it's important 0:10:10.320 --> 0:10:13.280 is to return to the diplomatic to the diplomatic table 0:10:13.400 --> 0:10:16.480 as soon as possible, because what it's a state is very. 0:10:16.280 --> 0:10:18.319 Serious given the hostilities. 0:10:18.360 --> 0:10:20.840 Can you just walk us through the gap that exists 0:10:20.840 --> 0:10:24.360 from your inspectors and how potentially what the i a 0:10:24.480 --> 0:10:27.280 e a does every single day is being degraded. 0:10:28.600 --> 0:10:33.440 Well, obviously, I think nothing will be like in the past. 0:10:34.200 --> 0:10:36.679 We have crossed the line in the sense that there 0:10:36.720 --> 0:10:39.280 is a there is a war. There is a military 0:10:39.280 --> 0:10:46.080 conflict which has been triggered rightly or wrongly, on the 0:10:46.120 --> 0:10:49.120 assumption of certain nuclear. 0:10:48.800 --> 0:10:50.360 Activities taking place in Iran. 0:10:50.640 --> 0:10:56.080 And all these facilities which are or where the facilities 0:10:56.120 --> 0:10:59.840 that the i a e a. Inspectors were looking at 0:11:00.280 --> 0:11:03.719 day by day, some of them have been destroyed, some 0:11:03.800 --> 0:11:06.480 of them have been affected, and we do not know 0:11:06.960 --> 0:11:10.560 what the future holds in terms of what may happen 0:11:11.080 --> 0:11:12.680 over the next few days. 0:11:12.880 --> 0:11:16.280 So there will, of course there will be a reshuffle. 0:11:17.040 --> 0:11:24.440 We will continue inspecting and carrying out our activities, but 0:11:24.559 --> 0:11:26.920 that will be and I think we have to be 0:11:27.000 --> 0:11:30.480 realistic about this. That will be a function of the 0:11:30.520 --> 0:11:35.000 political and military evolution. Iran has said, and you mentioned 0:11:35.000 --> 0:11:38.240 this just now in our conversation. Iran has said that 0:11:38.280 --> 0:11:42.280 they might take additional measures. There are people in Iran saying, 0:11:42.400 --> 0:11:45.560 for example, which I hope will not be the case, 0:11:45.600 --> 0:11:48.000 that Iran should leave the Treaty on the Non Proliferation 0:11:48.080 --> 0:11:52.280 of Nuclear Weapons and expelled the IAEA, as it was 0:11:52.360 --> 0:11:55.280 the case in North Korea, as you remember a few 0:11:55.360 --> 0:12:01.080 years ago. So here, I think is a big political 0:12:01.679 --> 0:12:07.080 scenario unfolding which will hold a lot of events that 0:12:07.120 --> 0:12:11.000 we will have to take into consideration for international peace 0:12:11.040 --> 0:12:13.079 and security in the region and in the world. 0:12:13.160 --> 0:12:16.840 Quite obviously, IAEA Director General Raphael Grossi, thank you so 0:12:16.920 --> 0:12:20.160 much for spending time with us amid this conflict that 0:12:20.200 --> 0:12:32.720 I know you are closely following. Here's the latest markets 0:12:32.720 --> 0:12:35.839 awaiting the FED rate decision out later today. The consensus 0:12:35.880 --> 0:12:39.800 widely expecting the FED to hold rate steady, but updated 0:12:39.920 --> 0:12:42.400 economic forecast, which might be the most interesting part. 0:12:42.480 --> 0:12:43.440 Former Saint Louis. 0:12:43.240 --> 0:12:46.520 FED President Jim Bullard joins us now for more. Jim, 0:12:46.600 --> 0:12:47.839 so glad that you could join us. 0:12:47.840 --> 0:12:48.240 Thank you. 0:12:48.360 --> 0:12:50.640 I want to start with why would they say anything 0:12:50.679 --> 0:12:54.280 today at all? Can they avoid I guess his better question, 0:12:54.520 --> 0:12:56.560 can they avoid saying anything at a time where there 0:12:56.600 --> 0:12:57.640 is so much uncertainty? 0:12:58.920 --> 0:12:59.199 Yeah? 0:12:59.240 --> 0:13:02.400 Well, the FEDS certainly not taking the headlines today with 0:13:02.520 --> 0:13:06.160 the war in the Middle East, so that might play 0:13:06.160 --> 0:13:08.080 to their benefit. I don't think they would have said 0:13:08.120 --> 0:13:12.480 too much anyway. I do think there is the SEP 0:13:12.840 --> 0:13:16.920 coming out, and this will be the first SEP post 0:13:17.040 --> 0:13:20.280 April seconds, and so I think it will be a 0:13:20.320 --> 0:13:26.240 more stagflationary SVP, and I think markets are already anticipating that, 0:13:26.280 --> 0:13:30.080 but there is some room there for surprise depending on 0:13:30.160 --> 0:13:33.320 where that goes. And so I think during the Chairs 0:13:33.559 --> 0:13:37.959 press conference, he'll want to be talking about the SEP. 0:13:38.320 --> 0:13:41.800 Well, yeah, the idea of whether they do downgrade growth 0:13:41.920 --> 0:13:45.040 and increase their expectations for inflation at the same time, 0:13:45.440 --> 0:13:47.120 how do they respond with the dot plot, how do 0:13:47.160 --> 0:13:48.760 they respond with the reaction function? 0:13:48.800 --> 0:13:50.280 And that's really the ultimate question. 0:13:50.600 --> 0:13:53.320 Do they place the emphasis on inflation or do they 0:13:53.320 --> 0:13:56.640 place the emphasis on the slowing growth and potential hits 0:13:56.640 --> 0:13:58.679 the labor market. Do you have a sense, Jim, of 0:13:58.720 --> 0:14:02.520 whether the Fed this FED is more focused on inflation 0:14:02.880 --> 0:14:05.240 than growth or if their focus is shifting just a 0:14:05.280 --> 0:14:06.839 little more with some of the weakening data that we've 0:14:06.880 --> 0:14:08.599 seen over the past couple of weeks. 0:14:09.200 --> 0:14:12.880 Well, that's why this will be moderately interesting. I think 0:14:12.960 --> 0:14:16.440 you've also got comments from many members of the committee, 0:14:16.440 --> 0:14:19.880 But I think that if it was me, I'd be 0:14:19.960 --> 0:14:23.280 talking about slower growth due to the trade war, because 0:14:23.360 --> 0:14:26.920 that's what happened in twenty eighteen twenty nineteen, and I'd 0:14:27.000 --> 0:14:30.200 play down the inflation effects because I didn't really see 0:14:30.240 --> 0:14:34.480 too much in that earlier trade war. In fact, course, 0:14:34.680 --> 0:14:38.640 PC inflation actually declined in the first half of twenty nineteen, 0:14:39.400 --> 0:14:41.400 and by the time you got to the summer of 0:14:41.440 --> 0:14:43.360 twenty nineteen, that economy. 0:14:42.960 --> 0:14:45.320 Was slower and the FED lowered the policy rate. 0:14:45.480 --> 0:14:49.280 So I think the baseline would be here to get 0:14:49.360 --> 0:14:54.280 to September and make a judgment there about how they 0:14:54.320 --> 0:14:56.520 want to play this for the rest of twenty twenty five. 0:14:56.680 --> 0:14:59.760 Well, Jim, given your analysis and given the actual hard 0:14:59.840 --> 0:15:02.080 day that we have seen with inflation coming down in 0:15:02.080 --> 0:15:05.080 the past four prints, why wouldn't the FED be cutting 0:15:05.080 --> 0:15:07.000 today or do you think they would if they weren't 0:15:07.040 --> 0:15:10.920 so concerned about the uncertainty from policymakers in Washington. 0:15:13.040 --> 0:15:16.200 Yeah, I mean, I think one thing is just to 0:15:16.200 --> 0:15:21.280 get past this deadline, the ninety day deadline on trade deals, 0:15:21.760 --> 0:15:24.600 and see what comes out of that whether that would 0:15:24.640 --> 0:15:27.720 be extended or whether there would just be deal set 0:15:27.920 --> 0:15:31.280 or preliminary deal set. I think that would provide a 0:15:31.320 --> 0:15:33.840 lot of information to the committee. Also, the data on 0:15:33.880 --> 0:15:37.600 the economy has been reasonably good. Looks like second quarter 0:15:38.880 --> 0:15:41.880 GDP now is I just checked it three and a 0:15:41.920 --> 0:15:45.440 half percent, So that'll off set a week first quarter 0:15:45.640 --> 0:15:49.880 and keep the first half on average around two percent 0:15:50.000 --> 0:15:52.840 or a little below two percent growth. So you're okay 0:15:52.840 --> 0:15:55.560 on that. A lot of the other indicators are pretty good. 0:15:56.480 --> 0:15:59.720 Core PC inflation or dallas FTRIM mean about two and 0:15:59.760 --> 0:16:02.840 a half a half percent on an annual basis is still 0:16:02.880 --> 0:16:05.200 a little bit high, and so I think the committees 0:16:05.920 --> 0:16:07.800 probably got about the right stance here. 0:16:07.840 --> 0:16:11.440 But they can decide to do something a little bit. 0:16:11.400 --> 0:16:14.320 Later in the year, or if the data do come 0:16:14.360 --> 0:16:17.200 in in an adverse way, they can push things off 0:16:17.200 --> 0:16:18.240 to twenty twenty six. 0:16:18.400 --> 0:16:20.600 There's another point of consternation as well at this meeting, 0:16:20.640 --> 0:16:23.680 and of course that's the hostilities going on between Israel 0:16:23.760 --> 0:16:26.520 and Iran and the concern that there's going to be 0:16:26.760 --> 0:16:29.400 prolonged elevated oil prices. 0:16:29.680 --> 0:16:30.960 How does the FED deal with this? 0:16:32.560 --> 0:16:35.440 Yeah, Well, price shocks are always always vexing. From the 0:16:35.440 --> 0:16:38.720 FED point of view, I think the response so far 0:16:39.000 --> 0:16:42.560 has been muted. Considering that this is open warfare between 0:16:42.680 --> 0:16:44.640 Israel and Iran. 0:16:46.040 --> 0:16:49.200 I think Iran militarily. 0:16:48.480 --> 0:16:51.680 Speaking, doesn't look like they're in a very good position here. 0:16:51.720 --> 0:16:55.160 So possibly we get some kind of resolution one way 0:16:55.240 --> 0:16:58.600 or another, and markets are. 0:16:58.480 --> 0:17:01.280 Waiting to see where that's going to come out. But 0:17:02.000 --> 0:17:03.080 it certainly does. 0:17:02.920 --> 0:17:06.560 Affect headline inflation, does affect what people actually pay at 0:17:06.560 --> 0:17:10.600 the pump and in the US and so and around 0:17:10.680 --> 0:17:13.359 the world, and so that's definitely. 0:17:13.000 --> 0:17:14.200 A factor, Jim. 0:17:14.400 --> 0:17:16.440 As we look ahead, a lot of people are saying 0:17:16.520 --> 0:17:19.600 that this is increasingly a lame duck FED chair and 0:17:19.640 --> 0:17:22.240 that after he is gone, there's going to be someone 0:17:22.280 --> 0:17:24.520 new in his seat who will be a lot more dubvish. 0:17:24.680 --> 0:17:26.639 How realistic do you think that that actually is? 0:17:29.160 --> 0:17:31.399 Well, one share at a time, and it's really the 0:17:31.400 --> 0:17:34.560 committee that makes policy. It's not really any one person. 0:17:35.480 --> 0:17:37.800 Certainly Chair PubL guides the committee, but. 0:17:39.280 --> 0:17:40.679 It's having been on it. 0:17:41.040 --> 0:17:45.720 There's many people with their own staffs and their own analysis, 0:17:45.840 --> 0:17:49.080 and they've got their own ideas about where policy should go. 0:17:49.160 --> 0:17:51.479 I do think that the committee's. 0:17:51.200 --> 0:17:54.320 Smarter than any one person on the committee, and it 0:17:54.400 --> 0:17:57.240 really pays off to have a lot of different viewpoints 0:17:57.080 --> 0:18:00.640 as you're trying to make reason judgments where to take 0:18:00.680 --> 0:18:02.520 monetary policy for the United States. 0:18:02.760 --> 0:18:03.280 Jim, do you. 0:18:03.200 --> 0:18:06.440 Think that most of the committee members agree with you 0:18:06.520 --> 0:18:09.080 that they should be taking the slowing growth more into 0:18:09.080 --> 0:18:12.040 consideration than the inflationary potential shock given the fact that 0:18:12.080 --> 0:18:14.440 they haven't really seen it yet, or do you think 0:18:14.480 --> 0:18:16.960 that they are focusing on what some people have said 0:18:17.080 --> 0:18:19.720 is fighting the last war, which is inflation that got 0:18:19.760 --> 0:18:20.960 maybe a little away from them. 0:18:22.119 --> 0:18:24.440 Yeah, it's a little bit. I think about half the committee. 0:18:24.880 --> 0:18:29.040 It's once burned twice shy. I think they really don't 0:18:29.080 --> 0:18:34.560 want to let anything occur that would send inflation expectations 0:18:35.200 --> 0:18:40.320 meaningfully higher. You do have these survey based expectations. Those 0:18:40.400 --> 0:18:42.879 seem to have a big political element to them, and 0:18:42.920 --> 0:18:45.119 so I think you have to discard them right now. 0:18:45.440 --> 0:18:50.600 The tips market five year tips inflation compensation about two 0:18:50.640 --> 0:18:55.520 thirty two today trading right in that area. So that 0:18:55.600 --> 0:18:59.880 sounds pretty good for a five year outlook on inflation. 0:19:00.040 --> 0:19:01.720 And if you think some of that's a little bit 0:19:01.760 --> 0:19:05.159 of risk premium, so market is pretty confident as the 0:19:05.280 --> 0:19:08.960 FED will hit the inflation target over the five year horizon, 0:19:09.040 --> 0:19:12.159 which is really about the best you can do as 0:19:12.200 --> 0:19:12.880 far as the FED. 0:19:13.359 --> 0:19:15.879 Former Saint Louis FED President jimbull Ard, thank you so 0:19:16.000 --> 0:19:17.880 much for being with us. 0:19:27.280 --> 0:19:29.280 Recovery of black Rock. Writing this. 0:19:29.680 --> 0:19:32.760 The Federal keep rates on hold and highlight elevated uncertainty. 0:19:32.920 --> 0:19:33.720 No surprise there. 0:19:33.920 --> 0:19:36.600 All eyes will be on the statement of economic projections. 0:19:36.720 --> 0:19:39.800 Gargee joins us. Now for more gargy. How focused are 0:19:39.840 --> 0:19:42.480 you on the FED? How focused are you on the geopolitics? 0:19:42.520 --> 0:19:44.000 How do you sort of weigh the two? 0:19:44.359 --> 0:19:48.199 Absolutely, good morning, great to be here. Usually, you know, 0:19:48.240 --> 0:19:50.560 the saying goes the marketing can only focus on one 0:19:50.560 --> 0:19:53.360 thing at a time, and we've had many one things 0:19:53.400 --> 0:19:58.240 this year. Obviously oil prices, the impact of geopolitics, what 0:19:58.359 --> 0:20:01.840 that might do to headline inflation to consumer, that's top 0:20:01.840 --> 0:20:04.920 of mind, but I wouldn't. I mean, obviously this is 0:20:04.920 --> 0:20:08.760 an SEP FED meeting. I think that's also going to 0:20:08.800 --> 0:20:13.400 be important. In particular whether they're going to hint at 0:20:13.720 --> 0:20:15.840 two more rate cuts or just one more I think 0:20:15.880 --> 0:20:16.840 that is relevant. 0:20:17.200 --> 0:20:18.160 And at the same. 0:20:18.000 --> 0:20:23.359 Time, how they handled all this additional uncertainty to your 0:20:23.480 --> 0:20:26.720 drinking blood game. I think all of that is going 0:20:26.760 --> 0:20:28.480 to weigh on them. So I think both are going 0:20:28.480 --> 0:20:31.160 to be important. But obviously the market is the most 0:20:31.160 --> 0:20:33.960 important thing right now for both the humans involved, as 0:20:34.000 --> 0:20:38.159 well as oil prices and broader risks off in the markets, 0:20:38.200 --> 0:20:40.680 even for a short term. Is certainly the geopolitics in 0:20:40.720 --> 0:20:41.200 the Middle East. 0:20:41.280 --> 0:20:43.400 And just to be clear, the drinking game is with water. 0:20:43.440 --> 0:20:45.440 We all should be hydrated, So clearly that is where 0:20:45.440 --> 0:20:48.679 we're going online. But there is this question going forward 0:20:48.680 --> 0:20:51.080 about how much this economy needs that kind of support 0:20:51.760 --> 0:20:55.200 versus has some sort of threat, not necessarily of overheating, 0:20:55.240 --> 0:20:57.920 but facing a real sticky inflation that could. 0:20:57.760 --> 0:20:59.320 Be really punitive. 0:20:59.359 --> 0:21:02.360 I'm just wondering from your perspective, and the message from 0:21:02.359 --> 0:21:06.199 markets aren't equity is telling us that actually there is 0:21:06.240 --> 0:21:09.280 no problem, even though the economic data might suggest otherwise. 0:21:09.359 --> 0:21:12.320 So time and again we've seen that when there is 0:21:12.440 --> 0:21:15.840 geopolitical uncertainty in the markets, yes, we see that spike 0:21:15.880 --> 0:21:18.800 and oil prices. Historically this has been a great time 0:21:18.840 --> 0:21:21.680 to be diversified into products like gold, because that has 0:21:21.720 --> 0:21:26.199 been an excellent diversifier. But historically what we've seen is 0:21:26.200 --> 0:21:28.280 that the three month forward or even the one month 0:21:28.320 --> 0:21:31.960 forward on high quality parts of equity markets. They have 0:21:32.080 --> 0:21:35.960 looked through geopolitical uncertainty. However, I think as we go 0:21:36.080 --> 0:21:38.960 into two and two thirty pm today, let's take a 0:21:39.000 --> 0:21:41.600 look back of what we've gotten since the May sixth, 0:21:41.640 --> 0:21:46.919 May seventh FOMC last meeting. Inflation has been you know, 0:21:47.400 --> 0:21:50.639 there have been no impacts of tariffs yet yesterday, I 0:21:50.680 --> 0:21:53.760 think the most important thing was around the weakness of 0:21:53.800 --> 0:21:57.560 retail sales and global ip that is softening, and I 0:21:57.600 --> 0:22:00.280 think that is important and perhaps had some lot of 0:22:00.320 --> 0:22:02.920 an impact on price action in markets yesterday, and I 0:22:02.960 --> 0:22:05.960 think the FED recognizes that and more importantly at eight 0:22:06.080 --> 0:22:10.000 thirty today, initial jobless claims and the continuing claims that 0:22:10.119 --> 0:22:13.080 have ever so slightly gotten worse. I think those are 0:22:13.119 --> 0:22:15.679 the important things that we should all be looking forward to. 0:22:16.440 --> 0:22:19.240 But at the same time, like we've seen before, the 0:22:19.280 --> 0:22:23.960 market does tend to sort of look through neo term 0:22:24.080 --> 0:22:27.720 shifts in volatility, and I think the macro picture for 0:22:27.920 --> 0:22:32.440 now is still not too weak, so equities or especially 0:22:32.520 --> 0:22:36.240 quality equities and AI equities are probably going to be okay. 0:22:36.280 --> 0:22:37.480 But gardy is that a mistake? 0:22:37.560 --> 0:22:39.240 For all we know the president right now is still 0:22:39.240 --> 0:22:42.040 weighing his options, and one of those options is a strike. 0:22:43.040 --> 0:22:45.439 You know, one of those options is a strike. The 0:22:45.480 --> 0:22:51.560 market always responds in probabilities, not binary outcomes, So let's 0:22:51.560 --> 0:22:54.600 think about the probability of that. Yes, that's the headlines 0:22:54.680 --> 0:22:59.600 right now, with the surrender headlines from yesterday, for the 0:22:59.760 --> 0:23:05.520 US to get involved, for retaliatory retaliatory strikes to come through. 0:23:05.560 --> 0:23:07.399 I think that's going to be a big thing for 0:23:07.440 --> 0:23:10.760 the markets. Absolutely. And that's again why I would suggest 0:23:10.800 --> 0:23:12.560 that if you're listening to this right now, if you're 0:23:12.600 --> 0:23:18.840 an investor, having diversifying stuff in your portfolio, having diversifying 0:23:19.800 --> 0:23:23.280 asset classes like international equities, having some bonds in the 0:23:23.320 --> 0:23:25.080 front end of the curve and the belly of the curve, 0:23:25.400 --> 0:23:29.480 having things like gold and having inflation protection is really important. 0:23:29.560 --> 0:23:31.720