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- [00:00]
Narrator/Announcer
Bloomberg businessweek is brought to you by Evolving Money, a podcast that explores how cryptocurrency is the next logical evolution of the financial system. Follow the podcast, which is sponsored by Coinbase. Wherever you get your audio programs Hiscock Small Business Insurance Knows there is no business like your business across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like Small business Hiscox Small Business Insurance As a contractor.
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- [01:16]
Narrator/Announcer
Bloomberg.
- [01:17]
Bloomberg Host
Audio Studios Podcasts Radio News this is Bloomberg Businessweek daily reporting from the magazine that helps global leaders stay insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stanweck on Bloomberg Radio.
- [01:46]
Bloomberg Interviewer
Lots of news in crypto today. Grayscale investments filed publicly for an ipo. It's the latest crypto linked company to test public markets under an administration more open to digital assets. For more on crypto and bitcoin and bitcoin mining specifically. Joining us now, a name familiar to our audience, Eric Trump is the co founder and Chief Strategy Officer of American Bitcoin. It's a publicly traded bitcoin mining and treasury company. It's got a market cap around $4.4 billion. The company started trading on the Nasdaq back on September 3rd when it merged with a micro cap. Shares hit a high on September 9th. They're down around 47% since then. Eric, of course, also the Executive Vice President of the Trump Organization. He joins us from Florida. Eric, good to have you on the program again. How are you guys, great to be on. So if somebody wants exposure to bitcoin, why would they do that through American Bitcoin rather than just buying bitcoin outright on an exchange or even through an etf?
- [02:41]
Eric Trump
Yeah, what's a great question. I mean if you go out and you buy bitcoin on an ETF or you buy it on exchange, you kind of have one to one bitcoin, right? You go out and you buy one bitcoin, you're always going to have one bitcoin. Our entire ethos is increasing bitcoin per share. Right now every day we're mining bitcoin. We're mining bitcoin at roughly 50% of spot prices of bitcoin. So roughly about $56,000 per bitcoin. That's what we're able to mine at. We're able to mine because we have the best facilities anywhere on earth. We've got some of the cheapest energy anywhere on earth. We do it in America, we do it in West Texas. So right now our average cost produced at bitcoin is roughly $56,000. And we're mining bitcoin 24 hours a day, seven days a week. By doing that you're able to increase bitcoin per share, right? And that's the ultimate metric that we chase every single day. How do you increase the amount of bitcoin you have per share, you have of stock? And I think we can do that. Clearly if you go buy on a one to one basis, you don't have that ability to do. And that's the one metric that we track every single day. And that's the one metric that we try and improve every single day. And we've done a hell of a job guys. I mean we, we, you know, this public was founded on March 13, I'm sorry, March 31, roughly five months later, five months and three days to be exact. We were listed on the NASDAQ under abtc. We're less than three months old having been listed and we're already well surpassed 4,000 bitcoin that have either mined or that we've accumulated, making us the 25th largest BTC public treasury company in the world. And, and we're climbing that ladder very quickly every single day. So I couldn't be more proud of what we've been able to accompl. You know, everything that you said, I think you mentioned four and a half billion dollar market cap. And again we've been listed for less than three months and growing, you know, growing by, by, you Know, kind of with lightning speed.
- [04:23]
Bloomberg Interviewer
You mentioned the cheapest source of energy in mining, that bitcoin. Last time we spoke back in September, we had a discussion about wind energy that powers some of this mining. Is it still wind that's powering the mining operations for American bitcoin?
- [04:38]
Eric Trump
There's different sources, but certainly wind. There was a defunct wind farm. The guys over at Hut 8, which is our sister company, were able to lock into incredibly cheap energy because, frankly, it wasn't being utilized because it wasn't being pumped into the grid and locked into a very cheap contract for a very long period of time. We've got unbelievable renewable energy that we're using to mine our bitcoin. But you're going to see a lot of other energy sources. Come on. I mean, we're on the energy revolution in this country. I think you guys know that better than anybody. Look at oil, look at gas. You know, the policies are working. Look at these as Mars. Look at, you know, kind of fusion.
- [05:11]
Carol Massar
Well, well, well, wait a minute, Eric. Because smart. I mean, we, we do know. We're on it every day. And these small modular reactors, none of them are up and running. And anybody we talk to who understands the nuclear industry says that it'll take a few years to get them up and running.
- [05:26]
Eric Trump
Oh, guys, absolutely. Don't, don't, don't, don't think that I'm saying that they're up and running by any means. What I'm saying is we're in the heyday of power and power exploration in this country. Right now you have an administration that's hell bent on making sure this country has incredibly cheap power. Well, that's really interesting.
- [05:43]
Carol Massar
Let me just jump in there because we've done a deep analysis into the cost of electricity in 2025. Electricity costs depend far more on where you're located. And a lot of it has to do with the AI buildout and the cost of those data centers and tapping into the networks. You talk about Texas. I'm curious what you're paying per megawatt an hour in Hu. Houston right now. It's $25. It has gone up a lot since 2020. If you go back to 2020, it was $17 per hour. I mean, you know, those elections. I don't want to get political, but those elections, I mean, part of it was electricity prices that people. Americans have had enough.
- [06:22]
Eric Trump
Carol, you can't be serious. And honestly, I don't. I don't want to argue on Bloomberg. It's not. Not what I came here to do. I've got plenty of things to do in my daily life. You had the last administration that had the greatest war on energy that we've ever seen in the country, right? You had an administration that was literally shutting down oil and gas exploration daily. They were shutting it down daily. They were cutting every pipeline. They were, they were stopping every pipeline from being built. I mean, which ones do you want me to name? I could go through a list of 15 of them. In fact, it was, it was Joe Biden's first executive order to shut down the Keystone pipeline. They shut down all permitting, they shut down all transmission of oil and gas. There was a war on energy in this country the likes of which you've never seen before. We went from being energy independent under my father, where we're exporting energy to countries all around the world, to being energy dependent under Joe Biden. Don't even try and say that. We're not seeking the lowest cost energies. They had power plants that they were trying to build for a 15 year period of time, nuclear power plants. And guess what? At the end of them, Joe Biden's administration would turn them down and deny them the permits for, for nuclear energy. Right. My father is hell bent on making this country energy. And the reason. Hold on, please let me finish. The reason he's hell bent on it is if you track gdp, any GBT, GDP growth around the world and you directly correlate that with energy costs, they're 100% correlated. The lower your energy costs are for production of energy, the higher your GDP costs are. We have to win the war on cryptocurrency. We have to win the war on AI. We have to win these for our national security. We have to win these because we're the United States of America and we're the number one superpower. We must lead the way. Well, we need energy generation and my father is hell bent of getting that through every single form, whether it's natural gas and we're drilling, remember the slow baby drill. And we're drilling again and we're exploring again and nuclear power plants are getting permits again, which was not happening. So please don't, please, please don't talk to me about affordability when you had an administration that did everything they could to crush energy prices for a four year period of time.
- [08:34]
Carol Massar
Erica, I respect your position and opinion on this. But I also will say that you know the US is the largest oil producer that's out there. I want to go back to your company because on mining we learned today that Bit farms, it's one of the largest cryptocurrency miners. Said it plans to wind down those operations over the next two years. Focus on providing infrastructure to generate power for artificial intellig applications. We continue to see that a growing list of bitcoin miners are pivoting to AI and high performance compute services as profit margins shrink due in part to those falling prices of the tokens or the digital tokens that are out there. Do you have any plans for American bitcoin to pivot away from bitcoin mining into artificial intelligence now?
- [09:17]
Eric Trump
The exact opposite. We're only going to ramp up. We're going to ramp up every single day. I mean, Carol, you mentioned falling prices. Let me just kind of hit on this one for you. You know, guess what? Bitcoin prices were exactly two years ago from today. I'll tell you, because you would know. 36,500 was the cost of a Bitcoin two years ago. We are up 180% in a 24 month period. The spot price of a BTC is probably the number one performing asset, you know, of any asset. And this, is this coming from a guy who believes in hard assets, Right? I mean, I run one of the great real estate portfolios anywhere in the world. Cryptocurrency is absolutely on fire. Cryptocurrency is taking on.
- [09:56]
Carol Massar
Well, Bitcoin is up this year by about 5%. The S&P is up 15%. The NASDAQ 100 is up 20%. Gold is up 50% this year. No, I'm just saying, do you want to reverse?
- [10:06]
Eric Trump
Hold on, Carol, do you want to reverse that? I mean, do you want to go back two years? You want to go back three years, you want to go back five years, you want to go back 10 years?
- [10:13]
Carol Massar
I know how to dice.
- [10:14]
Eric Trump
The market historically have gone up on average of about 70% a year, year over year for the last 10 year period of time. All I'm saying is if you invested in BTC two years ago is probably the best investment you could have made. If you made invested BTC five years ago, you're sitting on infinite amounts of money, right? BTC has been probably the highest performing asset of the last decade right now. Also with BTC comes volatility. With crypto comes volatility. Volatility is our friend. Volatility is something that should be harnessed, right? And so I think bitcoin is going to continue to massively overperform the markets. Of course you're going to have drawdowns, right? I mean, every cycle has drawdowns. You're seeing, you were talking about Nvidia, you know, in the intro clip to introducing me today and how they're down 4% and this one, largest companies on earth, if not the largest company on earth, right? I mean that's down 4%. You're going to have drawdowns and things. That's, that's life. Now look at the historical performance of an, of an asset. And nothing has compared to totally bitcoin.
- [11:13]
Carol Massar
Totally understand markets, the ups and downs and sometimes the downs are an indication of either even moving down further. Hey, one thing I want to ask you is, I think you, you were on with Bloomberg back in September. You owned about 7 1/2% of the company. Has that number changed? Because it sounds, I can hear your conviction. It sounds like it's a long term conviction when it comes to the digital world and bitcoin in particular. So are you buying more shares?
- [11:39]
Eric Trump
That number has not changed at all. I have every share that, that I started this company with and I plan to for a long time to come. I love it, I believe in it. I think the people that we're doing it with are the smartest people in the world. We've got some of the greatest energy contract, we've got the most sophisticated facilities. And guys, what I'll tell you is I spent a lot of time all over the world. I think you know that from our real estate projects everywhere, everybody wants cryptocurrency. Everybody believes in cryptocurrency. Everybody's tremendously worried about their respective governments. Everybody's tremendously worried about their respective financial systems. Especially when you leave the United States, people in so many countries around the world, they get paid. They may as well burn that paycheck because of inflation. It absolutely kills them. All of a sudden, kind of bitcoin is digital gold. People believe in it. It's great asset. It's an asset that can't be inflated. It's an asset that only had 21 million coins ever. You know, the price of gold ever went to 40,000 bucks an ounce. Guys, I would tear down this building and I would find gold in the columns I find golden in the concrete. Right? You're going to, you're going to, you know, you're going to dig deeper and you're going to go farther and you're going to spend more money. So you're never going to actually have cap supply. With bitcoin, you have cap supply. And I can tell you whether it's Asia, whether it's Middle east, whether South America. There is a longingness to Treasury, Bitcoin. And you're seeing that from even some of the very biggest companies in the United States. They're putting it on their balance sheets in ways that they've never done before because they believe in digital assets and they believe in the attributes of them. Again, I'm a real estate guy. I love assets. But think about something that's transferable 24 hours a day, seven days a week. Think about something that's global. Think about something that's easy to transport.
- [13:17]
Carol Massar
You do love assets. And you guys, your family is so entrenched, obviously in real estate. You think Trump, you think real estate. But I'm just curious, if you had to choose between owning real estate or bitcoin, what would it be?
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Verizon Advertiser
Both.
- [13:28]
Bloomberg Interviewer
Both.
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Carol Massar
No, no, no. You have to choose. Come on, Eric, you're smart.
- [13:33]
Eric Trump
I grew up when I was 11 years old on construction sites, right. I clearly love tangible assets and I believe in them. And I think bitcoin is the greatest hedge toward those tangible assets that there is. What I will tell you is in any place other than the United States, I would probably take cryptocurrency. I mean, imagine if you lived in one of various South American countries or one of various African kind of countries that have instability, where government can come in at any time and steal your house, steal your piece of property, steal your hotel, right? You don't have a chance. You know, you don't, you don't have that problem with bitcoin, you don't have that problem with digital assets. That's, you know, that's, that's qualified on ledger 24 hours a day. So there's, there's a real need for this asset class around the world. And by the way, even in the United States, I mean, guys, I became one of the most debanked first, you know, people, you know American history for having never done anything wrong. You know, operating great golf courses, operating great residential buildings, condominium associations, hotels, right? And all of that got pulled out from under me because my father happened to wear a hat. I wasn't a politician, and I've never been politician. I've never worked for the government. We're wearing a hat that said make America great again. All of a sudden, I started getting canceled left and right. You know, the interesting thing about crypto, you know, technology, blockchain technology, digital assets, digital wallets. Can't cancel them. You can't take them away, right? And that's a beautiful thing. And there's a Flight to safety. There's a flight to safety that a lot of people in America have a harder time appreciating. Albeit when people see what happened to us, they can appreciate more. But a lot of people around the world can really appreciate. I think if you lived in a lot of the Asian countries, you'd appreciate it. I think if you live. Lived in a lot of places. And let me ask you, Saharan Africa, you probably appreciate that.
- [15:08]
Carol Massar
No, I understand what you're saying and think, you know, we've been talking about cryptocurrencies for a long time here at Bloomberg, and I think time will tell whether or not this is something that becomes well entrenched within our financial system, because at this point, people are still buying things like stocks and bonds.
- [15:25]
Eric Trump
Do you not believe it?
- [15:25]
Carol Massar
No, no, no, I do. But what I wanted to ask you is, and I think it's something that we talked about in our planning call. Do you. Do you feel like, you know, Tim asked about, you know, maybe the advantage of, you know, buying into your company versus maybe a microstrategy or something else? Do you feel like you guys an advantage because of your proximity to the White House? And I ask this full disclosure. When we talk about Paramount, Skydance, we say the same thing because we know that David Ellison certainly is looked upon favorably by the White House when it comes to maybe doing another acquisition. So do you think you have a little bit of an advantage.
- [16:03]
Eric Trump
Carol? It's such a frustrating question. Now, you know, my advantages are advantage with American bitcoin is we can mine Bitcoin at 50 cents on the dollar, roughly. You know, and we're mining bitcoin every single day any other. And by the way, Michael is a very close friend of mine, and there's no person in the world, you know, virtually that I respect more. He's an amazing human being and an incredible visionary in everything he's accomplished. Our advantage to mining bitcoin is every single day we mine a lot of bitcoin and we do so for 50 cents on the dollar. Go name another commodity you can do that with. Right? Every other treasury company virtually out there, they have to go buy bitcoin at the spot price of bitcoin that day. I can effectively go out right now and mine Bitcoin at 50% of that number. I can also go out and I can acquire bitcoin and American bitcoin can go out and acquire bitcoin at spot prices. And guess what? As I do that, I can also yield, manage down pricing based on the bitcoin that we mine each and every day. Obviously, the amount that you can mine is somewhat finite, even though our mining operations are growing on a daily basis. But that's a great advantage that I believe we have. We can increase the amount of Bitcoin per share of our shareholders, and we do. And that's why we're growing as quickly as we are. So I clearly believe in our strategy. I'm really, really proud.
- [17:15]
Carol Massar
But you understand why we, you do understand why we ask it, right? I mean, full disclosure, like we try to be.
- [17:20]
Eric Trump
I mean, Carolyn, so many of. So many of the questions here have just been. I understand clearly where, where you stand. Right. But, you know, this no shock to me. I understand why you're asking the question. I also understand that I have absolutely nothing to do with the federal government. I want nothing to do with the federal government. I have no interaction with the federal government when it comes to crypto policy. I stay in my own damn lane, and my lane is operating the greatest hospitality company on earth, an operating company that I truly believe in with every ounce of my heart and soul, which is what we're doing with Bitcoin, which, again, historically, has been an incredible asset.
- [17:55]
Bloomberg Interviewer
Hey, Eric.
- [17:57]
Eric Trump
So when I hear questions about how, you know, somebody could possibly argue that Biden had better energy policies for the United States than Donald Trump, like, give me a, give me a point.
- [18:08]
Carol Massar
I didn't argue that. I just, you know, we are, we are a data driven company. And so I look at data. Give me the data.
- [18:13]
Eric Trump
So, so perfect. Give me, give me the data. Give me one quantifiable metric where Joe Biden was a better energy president. Donald Trump. You can't. Well, you just can't. Well, I will say when you, when you had a president on the, on the first day of his term, cancel every pipeline, including the Keystone XL pipeline, which is why every gas pump in the United States of America had a little sticker on it saying, I did that. And this picture of Joe Biden pointing to the price of gas. Please spare me this conversation. You've got some of the lowest gas prices in the history of our country. They're coming down every single day. You've got an administration that are putting through permits for nuclear reactors like their PEZ because we need it if we're going to be successful based on all the metrics I gave you. No one can credibly tell me, you know, as these guys build wind farms in the middle of nowhere that aren't even plugged into the grid. But, I mean, I say that with all due respect, Carol.
- [19:06]
Carol Massar
No, I know, I know. And I don't want to argue. I mean, but there's a reason that, you know, WTI crude is below $60 a barrel and, you know, you know, the oil giants will talk and they'll say, listen, we're only going to do it.
- [19:16]
Eric Trump
What is the reason?
- [19:18]
Carol Massar
We're only going to do it if it makes sense. If the price of oil goes up because there is, you know, balance sheets. There's going to be a cost to drilling and doing exploration, and they're not going to do it unless the price of oil, whether the demand is there and as there is more oil or.
- [19:34]
Eric Trump
Do you think any of that has anything to do with the transportation of oil? Right. When you. When you're shutting down pipelines every single day, you know what else is affecting price? The fact that you can't move something that's naturally heavy. Right. And that's what Joe Biden was doing. It was the biggest. It was the biggest war on oil and gas, all for the purpose of creating, you know, EV cars that the consumers around this country did not want to buy. I mean, how many billions of dollars did they spend building for charging stations in the middle of absolutely nowhere, you know, under people to judge your transportation secretary, who is completely incompetent.
- [20:08]
Carol Massar
All right, I don't. I don't want to get you political, but anyway, listen, in five years, what do you hope your company is just to wrap up? Where do. Where do you see its role?
- [20:19]
Eric Trump
Yeah, I'm glad we came back to this. Thank you. I think we're going to create one of the great bitcoin companies anywhere in America. We're ascending the ladder very quickly. I think I mentioned that, you know, we're under three months old and, you know, we're a 25th largest public Bitcoin treasury company on all the lists. And we're sending that list very quickly. We just passed Gemini. Very good friends of ours, the Winkle bosses who, you know, they actually invested in American bitcoin, and they're good friends of ours. And it seems like every day we're. We're kind of climbing another step up that ladder. I think we're doing it well. I think we're doing it with tremendous heart and soul. I think we're doing it here in the United States of America. I think that's philanthropic to this country. And, you know, we need to lead the world in the financial, you know, digital financial revolution. Bitcoin is clearly leading that charge right now. Based on. Based on market cap and and I'm very, very proud of the company we're building and the speed of our growth and I think we're going to do tremendously well.
- [21:14]
Carol Massar
I'm sure all the financial execs do like this, probably played into it possibly as well as regulatory stuff when they were there at the White House. It's all coming at us. Hey Eric, thank you so much. Really appreciate it. We went around and around and I'm glad we were able to cover a lot of ground. Eric Trump, co founder, Chief Strategy Officer of American Bitcoin and Executive Vice President of the Trump Organization, joining us there in Florida.
- [21:36]
Bloomberg Interviewer
Stay with us. More from Bloomberg Businessweek Daily Coming up after this.
- [21:43]
Narrator/Announcer
Bloomberg Businessweek is brought to you by Evolving Money, a podcast that explores how cryptocurrency is the next logical evolution of the financial system. The program investigates how traditional finance firms are integrating crypto into their operations now that Washington has begun to pass much needed regulations. Follow the podcast, which is sponsored by Coinbase. Wherever you get your audio programs.
- [22:07]
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- [24:06]
Bloomberg Host
Youm'Re listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [24:21]
Carol Massar
As you know, we've got a sell off on Wall street traders bracing for a wave of economic releases after the US Government shutdown. It has driven though stocks and bonds lower a concern on whether the data that we ultimately get from the US Government as they play catch up and then start to get back on schedule whether or not it clears the way for another cut by the US Central bank. It's kind of in question right now.
- [24:46]
Bloomberg Interviewer
Another thing in question is just what this economy looks like. So we're hearing from different companies and we're hearing different things. The latest Verizon discussing plans to announce job cuts across the company next week. This according to people familiar with the plans. The move a major step in a transformation led by new CEO Dan Schulman. Nonetheless, Carol, it's another example of another big company cutting some jobs.
- [25:06]
Carol Massar
Yeah, exactly. And then you do have Fed speakers out there. Federal Reserve bank of San Francisco President Mary Daley said it's too soon to decide whether policymakers should lower interest rates in December. Here's where we are. Let's see what Elizabeth Renter has to say. She's senior economist over at NerdWallet. She's with us from Durham, North Carolina. Hey, Elizabeth, good to be talking with you once again. So what can you conviction, first of all, do you have in making calls on the U.S. economy, on the U.S. labor market, on inflation?
- [25:36]
Elizabeth Renter
Hey, well, thanks for having me again. You know, it's, it's tough to make sense of what's going on in the economy right now because the access to data is so limited. We're looking at private data sources and trying to infer what the BLS would have said over the past several weeks. And that's difficult. That's not to say it's brand new. Right. Myself and the Fed and economists across the country have been looking at private data sources in addition to federal data sources for some time. We're just having to put more weight on them now than we would have.
- [26:06]
Bloomberg Interviewer
I do think that Elizabeth just want to jump in what, what private data sources are the ones to you that are most important? What do you think tells the fullest story?
- [26:16]
Elizabeth Renter
Yeah, well, I think when it comes to the labor market, there's several great private data sources. So ADP is a reliable data source. But all of these private data sources have unique caveats. They're measuring slightly different things and you need to take that into consideration. So ADP misses government jobs entirely. They're more likely to overstate the number of jobs being added to the economy right now because they're not catching federal jobs, for example, which we know is a big item this year, entirely in 2025. Then you have a source like Revelio Labs. They're another solid source of labor market data, but they're searching job profiles, professional profiles. So there may be a delay in their data because they're catching. If you're open to work on LinkedIn, for example, putting all of these together takes a little more work than just looking at the jobs report every month. But I think that's what we have to do in the current environment.
- [27:05]
Carol Massar
All right, so labor market just quickly, how do you see it?
- [27:09]
Elizabeth Renter
Solid, but gradually cooling, which is I think, in alignment with what Fed chair, Fed Chair Powell said just a couple of weeks ago. You know, there is some weakness. Hiring is slow, but the unemployment rate according to the Cleveland or the Chicago Fed now cast BLS remains in that four, four and a half percent range. So not alarming. We are hearing a lot about layoffs in the headlines. But the headlines and what happens in practice or what would have been reflected in the BLS data are two different things.
- [27:37]
Carol Massar
All right, inflation. So I want to just point out, in an interview with Market Watch published today, Cleveland Fed President Beth Hammack said she's worried market participants might doubt the Fed's commitment to its 2% inflation target. If the central bank continues to lower rates 2% that target. And then where we are in terms of US Inflation, how sticky it is as we get kind of closer to 2% but not quite there.
- [28:04]
Elizabeth Renter
Well, I think we can so confidently say that inflation is high, it's above target, but it's not accelerating rapidly. So another source I look to for this one is the Cleveland Fed. Now, Cass, they compiled data from commodity prices and other high frequency sources to estimate where the CPI would be be. And it says that, you know, just that inflation is steadily high but not accelerating right now. I think expectations are in alignment. Whether you're asking the Fed or asking consumers up in the short term is what people anticipate Right. Inflation is going to remain above that target but then come down in the long term.
- [28:35]
Carol Massar
Can I just ask you, you know, I know, I understand that prices are not going up like they were a year, year and a half, two years ago, I get that. But they're also not going down. And I mean, the reality of kind of what we're all paying for things is this just it, and that's just.
- [28:52]
Narrator/Announcer
The way it is.
- [28:52]
Carol Massar
And why does it feel like we are still paying a lot for stuff? And is that a new reality, that things are just costing more in today's society?
- [29:02]
Elizabeth Renter
Well, I think there's several reasons for that right now, this year there are several sources of inflationary pressure and we're seeing that or we have seen that up until this point in the inflation data. You know, the impact of tariffs has kind of been trickling in. But also demand for services has kept services inflation high. I think also it's because we're all hyper attuned to it. You know, there's research out there that says after a period of high inflation, we're all going to be extra sensitive to inflation. And I think that also plays a role. We're all, we all have our eyes out for it. Right. So because inflation is higher than we like, it's going to be particularly painful in light of the recent high inflation period.
- [29:40]
Bloomberg Interviewer
Elizabeth, I had an interesting conversation with somebody today about the Federal Reserve and just the idea of Fed independence. And I'm curious about your view on this. Her argument to me was we're starting to look at monetary policy in the United States that represents, not necessarily monetary policy historically in the US but one that's under more political pressure than we've seen at least in recent years. And to her it's starting to look like something more out of the developing world where monetary policy is more politically influenced. I'm wondering your view on that.
- [30:13]
Elizabeth Renter
I don't know if I would take that quite of a bleak look. I mean, I believe the risk is there. You know, I think it was just earlier this week where Bostic came out and said he plans on retiring next year, which opens up another seat on the Fed. And the risk is always there that as an administration has undue influence on who is, who takes a seat at those decision making tables. There could be more pressure than usual. I do have pretty deep faith in the independence of the Fed and sort of the dedication to independent monetary policy that these people have in these positions. But I do think we have higher risks now than we did say a couple years ago.
- [30:50]
Narrator/Announcer
Yeah.
- [30:51]
Carol Massar
I mean, you know, part of, I think confusion on maybe the part of investors when they're thinking about the data that's going to come and whether or not it provides conviction for another rate cut come December. The part of it is, I mean, Fed officials themselves are divided right. On the best path ahead for interest rates due to high inflation and continued weakness in the labor market. You know, so, you know, it's a dual mandate. That's tough when both parts of the mandate are tricky right now. Right. And maybe create some problems or would determine a different Fed policy for each. And you do wonder that debate and which voices are going to sound the loudest and perhaps, perhaps have more sway assuming Fed Chair Jay Powell is among them. But how we need to think about that in the next Fed decision.
- [31:39]
Elizabeth Renter
Yeah, you're absolutely right. So not only is the data pointing to the dual mandate sort of the two sides of the dual mandate being at odds. Right. We still have high inflation and the labor market is cooling, but neither one of those things are sort of at a tipping point. Right. We're not seeing a skyrocketing unemployment rate and inflation is not at target, but it's not alarmingly high. So it makes sense that there's sort of more gray area and people are going to fall on either side of these decisions a little bit more than they normally would.
- [32:10]
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- [32:12]
Bloomberg Interviewer
I think we got to go.
- [32:14]
Carol Massar
I think we do. Listen, there's a lot going on and I guess as the data comes in, we'll ultimately see it is certainly an interesting time to be talking about the US Economy. That is for sure. Hey, Elizabeth, thank you so much. Elizabeth Renter, she's senior economist at NerdWallet, joining us from Durham, North Carolina.
- [32:32]
Bloomberg Interviewer
Stay with us. More from Bloomberg Businessweek Daily coming up after this.
- [32:39]
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- [35:33]
Bloomberg Host
To the Bloomberg Businessweek Daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [35:46]
Carol Massar
We got another stock on our radar.
- [35:48]
Bloomberg Interviewer
Yeah, another stock that's moving lower. In fact, here's a Disney down about 8% percent shows that it's not so magical at least today in the Magic Kingdom shares the Wall street or sends of the Walt Disney company rather down the most since April, this is the company reported sales that fell short of Wall street estimates and set a slate of big budget films, including the new Avatar picture Carol are going to weigh on results for the first quarter of its new fiscal year.
- [36:10]
Carol Massar
Yeah, it's definitely played out in today's session. Hey. Disney CFO Chief Financial Officer Hugh Johnson joined Bloomberg Television earlier today, covered a variety of topics, including a succession plan for the current CEO Bob Iger.
- [36:23]
Express Employment Professionals Advertiser
What the board has indicated is that.
- [36:25]
Eric Trump
Will take place sometime during the first calendar quarter of 26. We report in in next February. Whether that'll be before or after, I'll be up to the board. But we should have it done by, by the end of March.
- [36:41]
Carol Massar
All right. That again is Disney CFO Hugh Johnson. As he said, Disney expects to name a successor to Bob Iger by the end of March. Keep in mind, Iger was there for.
- [36:49]
Bloomberg Interviewer
A long name Bob or not one named Bob.
- [36:52]
Carol Massar
That's a good point.
- [36:54]
Bloomberg Interviewer
That's my question. But it was Bob followed by Bob followed by Bob.
- [36:58]
Carol Massar
But okay, Bob Iger there for a long time considered kind of a mastermind in terms of CEOs and what he did with Disney. Then Bob Chapek came in and there was a lot of focus right. On streaming and then things just reminding.
- [37:11]
Bloomberg Interviewer
Everybody about the succession last time and.
- [37:13]
Carol Massar
Bob Iger came back.
- [37:14]
Bloomberg Interviewer
Exactly.
- [37:14]
Carol Massar
Okay, so we'll see whether or not they have to be named Bob.
- [37:17]
Elizabeth Renter
Let's see.
- [37:17]
Carol Massar
So let's see what our Gita Ringgan has to say. She's Bloomberg Intelligence Senior Media analyst. She's at headquarters in Princeton. We're going to talk succession in a moment. Whether or not the next CEO Gita has to be named Bob. But more importantly, let's talk about the quarter that was in the outlook. That is, what do we need to know about earnings?
- [37:37]
Geeta Ranganathan
Yeah, quarter that was, was fine. It was pretty much in line with expectations. Carol. I think what really has kind of spooked the street a little bit is guidance. Again, overall guidance for fiscal 202026 seems to be okay. I think really what investors are having a hard time kind of wrapping their heads around is the fact that, you know, fiscal 1Q looks really soft, which means everything is going to get pushed to the back half of fiscal 2026. And I think that's what's causing a lot of the nervousness that we're seeing today.
- [38:07]
Bloomberg Interviewer
I want to go right to the successor. Disney board will name a successor to CEO Bob Iger.
- [38:12]
Carol Massar
Does it have to be named Bob?
- [38:14]
Bloomberg Interviewer
Yeah, I mean, well, who's, who's on the short list right now.
- [38:18]
Geeta Ranganathan
Yeah. So, I mean, the first big question, Tim, was, is this going to be an external candidate? Is there going to be an internal candidate? So it looks like initially when they started out, it was all four internal unit heads that were in the race. So we're talking ESPN's Jimmy Pitaro, we're talking Josh Tomorrow of the Parks, Dana Walden and Alan Bergman from the studio and content division. It looks like that race has kind of now narrowed down to two potential candidates. So we're looking at Dana Walden, who is a creative genius. And of course you have Josh Tomorrow, who is, you know, was headed Parks, and as a parks veteran, has an absolutely stellar track record there. So it's kind of going to come down to this internal question. Right. For Disney, the content is the start of everything. It is the source of everything, including, you know, parks. Right. The IP of parks is all from the movies and all the other creatives that they have going on at film and tv. So again, which one is. Is more important. The last time they had a Park sky, that didn't go so well. So we'll have to wait and watch. Yeah.
- [39:17]
Carol Massar
You know, and.
- [39:17]
Bloomberg Interviewer
Right.
- [39:17]
Carol Massar
They used to do things, I remember, like reporting on Disney. Like, people would switch jobs.
- [39:23]
Geeta Ranganathan
Right.
- [39:23]
Carol Massar
The CFO with parks, I think, or something, you know, as they would kind of like a CEO race, if you will, and let people kind of get another view of the company. Looking at Dana Walden, you know, co chairman, Disney Entertainment does have a big portfolio.
- [39:38]
Bloomberg Interviewer
Jimmy Kimmel. When he spoke to Lucas Shaw earlier this year at Bloomberg Screen Time, he was Jimmy Kimmel. That is incredibly complimentary of Dana Walden. Her name came up so much during that interview.
- [39:49]
Carol Massar
Yeah, that's a really good point. I didn't realize she. Yeah, so she's done a lot of interesting things. Handmaid's Tale, Kardashians only murders in the building. So what does Disney need, in your view? You understand this space and kind of how media has continued to evolve and Disney's place within it. And Disney's not just media, but they are media content and kind of just putting it across their platforms. What kind of CEO does Disney need?
- [40:15]
Geeta Ranganathan
They need somebody who can do everything right exactly as what Bob Iger has done. I mean, so these are some really big shoes to fill. I just wonder with kind of, you know, obviously Dana Walden, really good at handling talent. You just brought up the Jimmy Kimmel controversy. I mean, you need to be able to have a lot of charisma. You need to be able to kind of work with a lot of these very, very hard personalities in Hollywood. So I think Dana Walden definitely knows her way around there. She obvious obviously has a great reputation, a great track record. But at the same time, when you kind of look at the bread and butter of the business that is the parks business and you have to kind of be an operations geek and an operations nerd to really get the day to day running at all of the parks, at all of the cruise ships, the vacations properties. And of course, Josh tomorrow is the absolute superstar there. So I really wonder whether they actually need to have kind of a co CEO structure. I mean we know Netflix has done that pretty successfully. Spotify is looking to do that starting in January. So you know, I think it's, it could work. But then again it, you know, it's also a recipe for disaster.
- [41:20]
Bloomberg Interviewer
I love that. Maybe. Yeah, who knows? Well, maybe we'll find out just in a few months before we let you go. In an environment where so many of these large media companies are shedding assets or combining to form new ones, are looking to buy more Disney's assets, is it the right size right now? Does it need to shed any?
- [41:37]
Geeta Ranganathan
I don't think they need to shed anything. If at all something comes up, it's pretty much just the linear TV networks. But that is a smaller and smaller part of the, as we kind of look at the portfolio, Tim, you just look at the theme parks business along with all of the cruises and then you put streaming together, just those two pieces of the business would be close to about 70 to 75% percent of earnings in 2020, fiscal 2026. So really those are the big drivers in terms of earnings. I don't really think they, you know, they need to shed anything. But of course the question is going to keep coming up whether they do need to kind of spin off their cable TV network.
- [42:13]
Carol Massar
I love it that it's like though it comes down to like parks like being so important to the company. Hey Geeta. Thank you. Thank you. Geeta Ranganathan. She's senior media analyst at Bloomberg Intelligence.
- [42:22]
Bloomberg Host
This is the Bloomberg businessweek daily podcast available on Apple, Spotify and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5pm Eastern on bloomberg.com, the iHeartRadio app, tune in in and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.
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Bloomberg Interviewer
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