WEBVTT - Bloomberg Surveillance TV: January 26th, 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amrie Hordern. Join us each day

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<v Speaker 2>for insight from the best in markets, economics, and geopolitics

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>live on Bloomberg Television weekday mornings from six to nine

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<v Speaker 2>am Eastern. Subscribe to the podcast on Apple, Spotify or

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business app. So here's the lass

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<v Speaker 2>this morning. A key week ahead for the Federal Reserve.

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<v Speaker 2>President Trump said to announce his pick for the Central

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<v Speaker 2>Bank's next chair as policymakers gear up for the first

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<v Speaker 2>rate decision of twenty twenty six. Michael dadav Roth Capital, writing,

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<v Speaker 2>the incoming chair of the FED will then inherit an

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<v Speaker 2>increasingly divided and defiant FORMC Michael joins us Now from

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<v Speaker 2>one Mike, welcome to the show. It's going to see it.

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<v Speaker 2>Let's talk about why you believe this Fed will be

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<v Speaker 2>such an unruly Federal Reserve For the next vent chair,

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<v Speaker 2>does the market price the volatility within the Federal Reserve,

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<v Speaker 2>or does the market price the outcome of that volatility,

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<v Speaker 2>which means it's difficult to reduce interest rights.

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<v Speaker 3>Yeah. I mean, look, the market still gives the Fed

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<v Speaker 3>a lot of credibility and is not looking for a

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<v Speaker 3>huge political disruption. So you know, I think we're playing

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<v Speaker 3>with fire here going down this path with a lot

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<v Speaker 3>of political pressure on the Federal Reserve. So we'll see

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<v Speaker 3>what happens. I mean, at least there's some pushback. Senator

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<v Speaker 3>Tillis is basically defended Poul saying forget any new appointees

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<v Speaker 3>to the FOMC until this is resolved. And you know,

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<v Speaker 3>you have a divided FED and this is a Federal

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<v Speaker 3>Reserve that makes decisions based on a consensus. So you

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<v Speaker 3>don't just pick one member to lead the FED and

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<v Speaker 3>then assume that rates are going to go to one

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<v Speaker 3>because you know, you assume that's a good idea. So,

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<v Speaker 3>you know, we'll see how all of this plays out.

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<v Speaker 3>But I think the administration's really overplay their hand here.

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<v Speaker 4>I'm glad you mentioned Centator Tom Tillis. He spoke with

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<v Speaker 4>Jonathan Lisa myself in Davos, and he talked about the

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<v Speaker 4>fact that he is not going to let a candidate

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<v Speaker 4>go through until this is resolved in terms of the

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<v Speaker 4>DOJ probe on j Powell or the more than three

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<v Speaker 4>hundred and forty days he has left until his retirement.

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<v Speaker 4>Do you think the market is pricing in the fact

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<v Speaker 4>that we can have J. Powell be the FED chair

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<v Speaker 4>for I don't know, another three hundred days.

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<v Speaker 3>Well, I mean, look, his board seat doesn't expire until

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<v Speaker 3>twenty twenty eight, So if FED Chair Paul is really

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<v Speaker 3>worried about political influence on the FED, he could stay

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<v Speaker 3>on as a voter and deny the administration that board seat.

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<v Speaker 3>So you know, they would have to use the expiring

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<v Speaker 3>term of Governor Marin for the next FED chair. And then,

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<v Speaker 3>as I said in the quote, you've got a pretty

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<v Speaker 3>divided and defiant FMC. So that's just kind of a mess.

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<v Speaker 3>But it also prevents, you know, dramatic political manipulation of

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<v Speaker 3>the FED and pushing the FED down path where it's

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<v Speaker 3>doing things it shouldn't be doing. You know, running it

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<v Speaker 3>hot might sound very good in the short term, but

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<v Speaker 3>let's not forget how the tenure went from fifty basis

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<v Speaker 3>points to five percent. It had occurred on the back

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<v Speaker 3>of an inflationary policy here by the Federal Reserve. So

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<v Speaker 3>I don't think we want to repeat that exercise much.

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<v Speaker 2>You believe there is upsound inflation risk this year and

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<v Speaker 2>what's the source of that?

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<v Speaker 5>No, not really.

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<v Speaker 3>I mean I think that the fall ped Powell Fed

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<v Speaker 3>has done a phenomenal job here in terms of the

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<v Speaker 3>previous tightening and then easing by just about the right amount.

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<v Speaker 3>The nomenal economy has been super steady, inflation expectations are anchored,

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<v Speaker 3>so I think that they've presided over just almost a

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<v Speaker 3>perfect immaculate disinflation and I think that continues this year.

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<v Speaker 3>But we're playing with fire in terms of what the

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<v Speaker 3>administration is doing, and they should really reverse course, in

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<v Speaker 3>my opinion.

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<v Speaker 2>Stay with us. MULPLEINPEG surveillance coming up off to this,

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<v Speaker 2>Let's turn to the airlines, the storm leading to the

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<v Speaker 2>most flying cancelation since the COVID nineteen pandemic. Sami saith

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<v Speaker 2>of Rama James joins us now for more. Savvey. Welcome

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<v Speaker 2>to the program. As you look across the airlines, the

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<v Speaker 2>airports across this country in the last twenty four as

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<v Speaker 2>who was hot as hit?

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<v Speaker 5>Hey, good morning, you know it's fairly broad based.

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<v Speaker 6>Obviously to begin with, you saw American getting hit just

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<v Speaker 6>given what happened in Dallas, but all the airlines are

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<v Speaker 6>having significant cancelations.

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<v Speaker 5>What I would kind of remind is the nice.

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<v Speaker 6>Thing of a winter storm, as much as there could

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<v Speaker 6>be something nice about it, is that you do see

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<v Speaker 6>it coming, unlike summer storms. And so I would chalk

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<v Speaker 6>up a lot of Sunday's cancelations, which are significant for airlines,

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<v Speaker 6>making sure that the aircraft and crew are in place

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<v Speaker 6>so that once the storm passes they can get back

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<v Speaker 6>to flying relatively quickly. And now there are high level

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<v Speaker 6>of cancelations today, but nowhere near as many as there

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<v Speaker 6>were on Sunday. So you know, as long as folks

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<v Speaker 6>can kind of get out of the houses and get

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<v Speaker 6>to the airports, we expect, you know, the operations to

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<v Speaker 6>start resuming, because airlines had some early warning and rebele

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<v Speaker 6>to prepare ahead of time.

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<v Speaker 4>Well thirty six hundred in counting for today, savvy when

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<v Speaker 4>it comes to the cancelation. So when do you think

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<v Speaker 4>we truly will be back to quote unquote normal.

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<v Speaker 6>Yeah, you know what we're seeing today is it a

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<v Speaker 6>little bit similar to what you saw on Saturday, so elevated.

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<v Speaker 5>We'll see.

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<v Speaker 6>It really depends on, you know, how the kind of

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<v Speaker 6>the winter progresses and getting crews to the airports. But

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<v Speaker 6>I suspect by midweek we'll be back to normal, if

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<v Speaker 6>not already by tomorrow.

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<v Speaker 4>Savvy. I don't want to make this worse for the airlines,

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<v Speaker 4>but it potentially it could be a perfect storm this weekend.

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<v Speaker 4>What happens if the US government does shut down, we'll

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<v Speaker 4>have to see.

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<v Speaker 5>You saw what happened last time.

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<v Speaker 6>What I would say from the lessons learned last time

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<v Speaker 6>is that demand didn't have an impact.

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<v Speaker 5>The impact really.

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<v Speaker 6>Came once you got to the end and the FAA

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<v Speaker 6>kind of required cancelations. I think that's when you really

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<v Speaker 6>started to see demand being impacted, and.

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<v Speaker 5>Maybe even a little bit before that.

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<v Speaker 6>Once the shutdown was about a month in, I think

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<v Speaker 6>you started to see.

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<v Speaker 5>A little bit of impact.

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<v Speaker 6>But at least early days, there isn't much of an impact.

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<v Speaker 6>You do have TSA agents and FA workers, you know,

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<v Speaker 6>really showing up even though you know they might miss a.

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<v Speaker 5>Check in a week or two. So hopefully we don't

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<v Speaker 5>get a shutdown. Hopefully it doesn't.

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<v Speaker 6>If we do get one, it doesn't last as long

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<v Speaker 6>as it did last time and doesn't come to the

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<v Speaker 6>brickmanship that it came to last time.

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<v Speaker 2>Let's finish on an airline that's really shown up, not

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<v Speaker 2>in the last twenty four hours, but in the last

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<v Speaker 2>twelve months. This from the Wall Street Journal Airline of

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<v Speaker 2>the Year Southwest Sathie, What is Southwest doing right?

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<v Speaker 1>Yeah?

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<v Speaker 6>I mean I think they learned their lesson after the

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<v Speaker 6>winter storm of in December twenty twenty four and really

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<v Speaker 6>or twenty three and really kind of improved and invested

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<v Speaker 6>in the operation. They probably also benefit a little bit

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<v Speaker 6>from being in the right geographies, but more so it

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<v Speaker 6>is what Southwest has done to really focus on managing

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<v Speaker 6>the operation. And I would kind of point out that

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<v Speaker 6>they did this, you know, had this performance at a

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<v Speaker 6>time that the airline was going through a significant change

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<v Speaker 6>in their product, offering and strategy. So definitely a commendable

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<v Speaker 6>result there.

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<v Speaker 2>The performance gap in the stock market between the Southwestern

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<v Speaker 2>American airlines couldn't be wider. I mean, Southwest was out

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<v Speaker 2>by more than twenty percent last year and American Airlines

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<v Speaker 2>was down by more than ten savvy what is American

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<v Speaker 2>Allies getting wrong? And incidentally by the way they are

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<v Speaker 2>joined last in this survey, this Wall Street Journal Airline

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<v Speaker 2>Award of the last Year or so, they came joint last.

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<v Speaker 2>What does American Airlines doing wrong?

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<v Speaker 6>I mean, I think American also had the unfortunate incidents

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<v Speaker 6>that hampered them early on last year, so that I

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<v Speaker 6>had a hit on American. But I think you are

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<v Speaker 6>seeing them making some changes this year. You've you know,

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<v Speaker 6>they announced it in December about kind of adding a

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<v Speaker 6>little bit more you know, schedule cushions so that they

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<v Speaker 6>can make connections.

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<v Speaker 5>They are trying to do that.

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<v Speaker 6>But yes, definitely on the operation side, both kind of

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<v Speaker 6>internally what they could control and then externally what they

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<v Speaker 6>couldn't control really hurt them last year in terms of

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<v Speaker 6>kind of stock performance.

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<v Speaker 5>I think again Southwest has.

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<v Speaker 6>Come up with a very credible plan on turning around

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<v Speaker 6>their earnings and you're starting to get early signs that

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<v Speaker 6>maybe they can execute to that. Still a lot of

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<v Speaker 6>you know, skepticism in the market, but I think American

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<v Speaker 6>really needs to come up to come up and show

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<v Speaker 6>that they can do something.

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<v Speaker 5>Similar this year as well.

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<v Speaker 6>There are kind of early signs that they're trying to

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<v Speaker 6>do that, but they really have to kind of put

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<v Speaker 6>up the numbers.

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<v Speaker 1>They've really got to step up.

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<v Speaker 2>Stay with us. More Bloomberg surveillance coming up after this.

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<v Speaker 2>Let's sends to commodities, gold smashing past five k for

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<v Speaker 2>the first time ever as traiders pile into the debasement trade.

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<v Speaker 2>Amy Gowett, Lead Medals Commodity Strategistic moregan standing, writing, we

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<v Speaker 2>don't think prices of peat with geopolitical risk positive signals

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<v Speaker 2>from Central Banks and ETF bang we highlight our ball

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<v Speaker 2>case fifty seven hundred for the second half. Amy joins

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<v Speaker 2>us now for more. Amy, good morning. Just to clarify

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<v Speaker 2>us that the second half of this week or the

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<v Speaker 2>second half of this.

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<v Speaker 1>Year, it's the second half of this year.

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<v Speaker 2>Amy, let's get into that call. We have moved so

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<v Speaker 2>so quickly on the precious metal. Have we've got a

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<v Speaker 2>new driver here given developments over the last week.

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<v Speaker 1>Yeah. Look, I think there's multiple drivers working together, So

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<v Speaker 1>of course we should mention geopolitical risk and all of

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<v Speaker 1>the uncertainty that we have at the moment. I think

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<v Speaker 1>that is driving investors towards precious metals in particular, and

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<v Speaker 1>especially given prices that they're performing so well. I think

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<v Speaker 1>that is providing additional price momentum. We've also got a

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<v Speaker 1>bit of dollar weakness few days, and that is always

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<v Speaker 1>a tailwind for commodities, making them cheaper for non dollar holders.

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<v Speaker 1>And then I think, while we're still in this, when

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<v Speaker 1>will the FED cut rather than if the Fed will cut?

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<v Speaker 1>That's also a broader tailwind. But the key thing I

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<v Speaker 1>think also has changed that's worth flagging is around central

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<v Speaker 1>bank behavior. So we always thought of central banks thinking

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<v Speaker 1>about gold as a percentage share of their reserves, and

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<v Speaker 1>of course that means as gold prices rise, you would

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<v Speaker 1>think that they would slow the pace of buying because

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<v Speaker 1>the price is kind of doing the work for them.

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<v Speaker 1>But we had something really interesting from Central Bank of

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<v Speaker 1>Poland about a week ago saying they're now targeting seven

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<v Speaker 1>hundred tons of gold to an absolute tannage amount of gold,

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<v Speaker 1>which would imply about one hundred and fifty tons of buying.

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<v Speaker 1>So for context, Poland was the largest buyer already last year,

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<v Speaker 1>this would be about another fifty percent buying on top.

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<v Speaker 1>So if central banks are just thinking about having gold

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<v Speaker 1>regardless of the price, then that could also keep that

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<v Speaker 1>kind of structural buying at a higher level than we

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<v Speaker 1>were previously expecting amy.

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<v Speaker 4>I understand countries like Russia and China their face sanctioned threats,

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<v Speaker 4>wanting to make sure that they have this historical level

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<v Speaker 4>of gold bying. Why a central bank like Poland.

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<v Speaker 1>I think it's part of sort of where do you

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<v Speaker 1>put your reserves? And we've seen you've got the dollar

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<v Speaker 1>sort of seeing a slightly declining share across the world,

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<v Speaker 1>but it's not really clear what the other currencies are

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<v Speaker 1>that can really compete against the dollars. So I think

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<v Speaker 1>when it comes to central banks looking at their options,

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<v Speaker 1>gold is there. It's sort of something that should hold

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<v Speaker 1>its value over time, which I guess for a central bank,

0:11:38.200 --> 0:11:40.960
<v Speaker 1>their key role is to sort of protect the value

0:11:41.000 --> 0:11:43.720
<v Speaker 1>of their reserves. So if you are worried about currencies

0:11:43.760 --> 0:11:47.599
<v Speaker 1>in general losing value, gold is your sort of your

0:11:47.679 --> 0:11:49.960
<v Speaker 1>natural hedge there. And then I think Poland did site

0:11:50.000 --> 0:11:53.600
<v Speaker 1>specifically all of this geopolitical uncertainty as well, but we'd

0:11:53.600 --> 0:11:56.120
<v Speaker 1>also highlight say we saw Brazil, for example, coming in

0:11:56.120 --> 0:11:58.520
<v Speaker 1>in September for the first time in about four years,

0:11:58.559 --> 0:12:01.400
<v Speaker 1>so it's pretty wide spread. Now this buying.

0:12:01.720 --> 0:12:04.080
<v Speaker 4>There seems to be so many reasons why gold is

0:12:04.160 --> 0:12:07.079
<v Speaker 4>just smashing it This morning, can you give us what

0:12:07.160 --> 0:12:09.480
<v Speaker 4>you think potentially is the number one driver?

0:12:12.440 --> 0:12:17.199
<v Speaker 1>Yeah, Look, I think the price momentum is very important here,

0:12:17.200 --> 0:12:20.000
<v Speaker 1>and I think given all of this geopolitical uncertainty, I

0:12:20.080 --> 0:12:22.720
<v Speaker 1>say probably that is the number one driver in terms

0:12:22.760 --> 0:12:25.280
<v Speaker 1>of the last week of price action. But I do

0:12:25.400 --> 0:12:28.040
<v Speaker 1>think all of these other factors have set the scene

0:12:28.040 --> 0:12:29.160
<v Speaker 1>for us to be here well.

0:12:29.160 --> 0:12:31.280
<v Speaker 2>And we speaking of momentum, let's talk about a different

0:12:31.280 --> 0:12:33.960
<v Speaker 2>precious metal. Let's talk about silver. Got a five percent

0:12:34.200 --> 0:12:36.160
<v Speaker 2>move on my screen on the Bloomberg terminal so far

0:12:36.240 --> 0:12:38.160
<v Speaker 2>this morning. Can you just give us an idea of

0:12:38.240 --> 0:12:40.640
<v Speaker 2>how big that market is and how easy it is

0:12:40.760 --> 0:12:42.640
<v Speaker 2>to push around on any given day.

0:12:44.400 --> 0:12:44.679
<v Speaker 5>Yeah.

0:12:44.720 --> 0:12:48.280
<v Speaker 1>So silver is much much smaller than gold in terms

0:12:48.320 --> 0:12:51.040
<v Speaker 1>of its kind of global traded volume, in terms of

0:12:51.440 --> 0:12:54.719
<v Speaker 1>the market size on the screen and what you can

0:12:54.800 --> 0:12:59.000
<v Speaker 1>move financially, it is a bigger market in terms of

0:12:59.040 --> 0:13:02.720
<v Speaker 1>absolute tonnished just because it's a lower value in terms

0:13:02.760 --> 0:13:05.800
<v Speaker 1>of sort of annual production. But I think for what

0:13:05.800 --> 0:13:08.760
<v Speaker 1>we're seeing on silver is slightly different to gold in

0:13:08.800 --> 0:13:12.040
<v Speaker 1>that it's partly an industrial metal and partly a precious metal,

0:13:12.320 --> 0:13:14.760
<v Speaker 1>and so you do have real users who need to

0:13:14.760 --> 0:13:18.240
<v Speaker 1>buy silver arguably nobody needs to buy gold on any

0:13:18.280 --> 0:13:20.000
<v Speaker 1>given day, but if you have a factory that is

0:13:20.000 --> 0:13:23.160
<v Speaker 1>dependent on silver to make solar panels or electronics, so

0:13:23.360 --> 0:13:25.800
<v Speaker 1>there's a buyer out there that physically needs this metal.

0:13:26.000 --> 0:13:28.160
<v Speaker 1>And so that has been a big driver over the

0:13:28.200 --> 0:13:30.960
<v Speaker 1>last four or five years, pushing that silver market tighter

0:13:31.000 --> 0:13:33.720
<v Speaker 1>and tighter into deficits. And then you've also got this

0:13:33.880 --> 0:13:37.480
<v Speaker 1>precious metals angle of safe haven buying, and we're seeing

0:13:37.480 --> 0:13:40.800
<v Speaker 1>that really accelerated last year and continues to this year.

0:13:40.960 --> 0:13:43.960
<v Speaker 1>So when these two come together, when money flows into

0:13:43.960 --> 0:13:46.640
<v Speaker 1>a silver ETF, they need to find some physical metal

0:13:46.679 --> 0:13:50.040
<v Speaker 1>to underpin that, but that's largely been eaten up already

0:13:50.160 --> 0:13:52.959
<v Speaker 1>by all of this industrial demand we've had, so that

0:13:53.000 --> 0:13:55.880
<v Speaker 1>metal is just not there, and we're seeing this particularly

0:13:55.920 --> 0:13:58.000
<v Speaker 1>in China at the moment. So China is trading at

0:13:58.000 --> 0:14:00.960
<v Speaker 1>about a fifteen percent premium even to what we're seeing

0:14:01.120 --> 0:14:04.720
<v Speaker 1>in London and in New York. And that's physical demand

0:14:04.760 --> 0:14:07.040
<v Speaker 1>where that the metal is just not available. If we

0:14:07.080 --> 0:14:09.959
<v Speaker 1>go to London vaults, that there is silver in there,

0:14:10.000 --> 0:14:12.240
<v Speaker 1>but it's all kind of owned by these ETFs. It's

0:14:12.280 --> 0:14:14.680
<v Speaker 1>not really freely available to the market. And I think

0:14:14.880 --> 0:14:16.560
<v Speaker 1>that's why we're getting this squeeze.

0:14:17.400 --> 0:14:20.960
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