Germany Leads Military Buildup in Greenland in Response to Trump

Summary

Bloomberg Businessweek Podcast Summary

Episode: Germany Leads Military Buildup in Greenland in Response to Trump
Date: January 14, 2026
Hosts: Carol Massar, Tim Stenovec
Notable Guests: Ed Price (NYU & former British trade official), Matt Hornbach (Morgan Stanley), Karen Kimbrough (LinkedIn), Mike Townsend (Charles Schwab)

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Overview

This episode dives into geopolitical and economic developments driving global uncertainty: the weakening of Russia’s influence, America’s growing use of military power abroad, Germany's emerging role in European military affairs, the Supreme Court’s delay on Trump-era tariffs, U.S. labor market trends, and shifting dynamics in executive-White House relations. The panel of expert guests unpacks the risks and implications for international security, U.S. economic policy, and business leadership amid fast-changing headlines.

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Key Discussion Points & Insights

1. Russia’s Waning Global Influence and US Hard Power (02:04–07:26)

• Authoritarian regimes (e.g., Venezuela, Cuba) are discovering Russian security guarantees are less reliable than expected.
  • Carol Massar: “Venezuela's officials think their security relationship with Moscow was a paper tiger…” (02:18)
• Venezuela’s leadership shift leaves it with little choice but to pursue US partnership.
• Ed Price argues the US and allies are making assertive strategic moves reminiscent of scenarios previously considered only in a World War context.
  • Quote: “We’re fighting battles now that we would otherwise be fighting in a future World War III. … That’s very uncomfortable.” (03:20)
• Western powers have shifted from information wars (lost to disinformation) to direct, forceful engagement.
  • Quote: “Now we've realized that we can't fight as an open economy… against authoritarian disinformation. We're using hard power.” (04:57)
• The risk of conflict escalation with Russia or China is present.
  • US is making moves on the global chessboard without waiting for adversaries to act.
  • Ed Price: “It’s good until it’s bad.” (05:42)
  • Possible scenarios: deterrence could either make China hesitate on Taiwan, or push them to act faster before their strategic window closes.

2. Middle East: Iran, Israel, and Regional Realignment (08:08–10:52)

• The panel discusses President’s hesitancy to attack Iran and ramifications for global oil and regional stability.
• Ed Price contends a US/Iran conflict would likely be air strikes, not ground war, and reflects on the strategic folly of past US interventions.
• Israel’s aggressive moves against Iranian proxies have shifted the regional balance.
• Quote: “Israel has played its hand very expertly… I think if the KSA got on board, we would see a shift and ultimately… a new Middle East.” (09:38–10:24)
• Achieving calm in the Middle East may hinge on neutralizing Iran’s regional influence.

3. Germany’s Military Buildup in Greenland (11:10–11:40)

• Germany is leading European military deployments to Greenland amid transatlantic tension following the Trump administration’s push for control over the island.
• Ed Price advises against US intervention, warning that doing so could rupture alliances:
  • Quote: “It would be as dumb and as stupid and as destructive for us to go into Greenland. It would rupture our alliance with the EU.” (11:10)

4. Tariffs, Supreme Court, and US Economic Policy (14:51–22:54)

• The Supreme Court once again postponed ruling on Trump-era tariffs (IPA tariffs), prolonging uncertainty for US and global businesses.
  • Matt Hornbach (Morgan Stanley): Direct reversals of tariffs are unlikely; a nuanced, middle-ground ruling is expected. (15:45)
  • Biden or Trump could repackage tariffs under existing authorities if needed (Sections 232, 301, 122).
• Potential requirement for congressional approval could reinstate checks and balances in trade policy.
  • Implications of potential refunds from tariffs are considered: “There are already bilateral agreements… [Trump] can ‘repackage’ the tariffs under different authorities.” (17:04)
  • Matt Hornbach emphasizes possible refund scenarios mainly affect companies, not households, and are not likely to be inflationary.
• On Federal Reserve independence: Even a Trump-appointed chair cannot act alone—the committee system and market reactions impose additional constraint.
  • Quote: “The market is kind of the checks and balances on any Fed.” (22:33)

5. Labor Market Data & the Impact of AI (24:06–29:04)

• Karen Kimbrough (LinkedIn): Labor market is stable but slow, with hiring up 6% month-on-month yet still 20% below pre-pandemic levels.
  • Quote: “It's still really competitive for job seekers… twice as many applicants per open role as, say, three or four years ago.” (25:51)
• AI is beginning to reshape demand for skills, creating new roles that require specialized knowledge.
  • 1.3 million new jobs related to AI in areas like development, integration, and AI communication/storytelling.
  • Gen Z increasingly sees skilled trades and content creation as attractive career paths.

6. Executive Strategy Amid White House Policy Volatility (33:14–43:36)

• Mike Townsend (Charles Schwab): CEOs are becoming more selective in how—and whether—they respond to presidential pronouncements, given the volume and unpredictability of policy signals.
  • “He [Trump] just says a lot of stuff over the course of any one day… I think companies are doing a better job… not overreacting to every single pronouncement.” (34:20)
• Fed independence is seen as critical; even with a new chair, committee structure preserves decision-making balance.
• CEO wariness about speaking out stems from uncertainty and the threat of retribution from the White House, as illustrated by Exxon’s skepticism regarding Venezuela investments.
  • “It just doesn’t benefit your company to necessarily be in the headlines for a couple of days.” (41:09)
• Markets and executives are adapting, focusing on substantial policy changes rather than rhetorical noise.

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Notable Quotes & Memorable Moments

• Ed Price, on US power projection (03:20):
  “They messed around and they found out... the United States and the west more broadly are fighting battles now that we would otherwise be fighting in, in a future World War III. And I think that's very uncomfortable.”

• Carol Massar, on the shift in alliances (02:18):
  “Venezuela's officials think their security relationship with Moscow was a paper tiger…”

• Ed Price, on global chessboard strategy (05:42):
  “It's good until it's bad.”

• Ed Price, on Greenland intervention (11:10):
  “It would be as dumb and as stupid and as destructive for us to go into Greenland. It would rupture our alliance with the EU.”

• Matt Hornbach, on tariff legal strategy (17:04):
  “[Trump] has other authorities...to take some of the emergency tariffs […] and kind of repackage them under these different authorities.”

• Karen Kimbrough, on AI and labor (27:12):
  “AI is starting to have an effect on the labor market...1.3 million new roles related to AI.”

• Mike Townsend, on business adaptation (34:20):
  “He just says a lot of stuff over the course of any one day… companies are doing a better job… not overreacting to every single pronouncement.”

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Timestamps for Important Segments

• [02:04–07:26] Russia, Venezuela, and the New Face of Hard Power
• [08:08–10:52] Iran, Israel, Saudi Arabia, and shifting Middle East politics
• [11:10–11:40] Germany's military role and the Greenland question
• [14:51–22:54] Supreme Court deliberations on tariffs and economic/market implications (Matt Hornbach)
• [24:06–29:04] US labor market and AI’s growing impact (Karen Kimbrough)
• [33:14–43:36] Executive leadership strategies and navigating White House volatility (Mike Townsend)

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Tone & Style

• The conversation is analytical, pragmatic, and occasionally wry, with panelists careful to hedge predictions around global strategy and US policy choices.
• Frequent references to historical analogies underscore the uncertainty and potential gravity of current events.

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Conclusion

This episode weaves together global security, changing alliances, US domestic policy volatility, and business strategy into a cogent analysis of how markets, leaders, and workers are navigating disruption. Listeners are left with a sense of high stakes, ambiguity, and the need for vigilance and adaptability amid persistent political and economic crosswinds.

Transcript

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Audio Studios podcasts radio news this is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news. As it the Bloomberg businessweek Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg Radio.

[Interviewer/Host]

Carol got this story on our radar on our editorial call this morning. Couldn't stop talking about this.

[Carol Massar]

Yeah.

[Interviewer/Host]

Authoritarian regimes that previously benefited from close ties to the Kremlin have found Russian support lacking when it mattered most.

[Carol Massar]

Yeah, let's go through some of the bullet points. Venezuela's officials think their security relationship with Moscow was a paper tiger, citing the failure of Cuban and Russian intelligence intelligence agencies to help protect Nicolas Maduro. And then the consequence is a breakdown in trust with security partnerships between Venezuela, Cuba and Russia, with Maduro's successor, Delcy Rodriguez, now having little option but to accept American offers of cooperation. So just curious about what's going on here, and it feels Like Russia may be being pushed in a corner or maybe separated from some of the folks that it was, you know, had alliances with.

[Interviewer/Host]

We knew it was time to get Ed Price back on the program. He's non resident senior fellow at nyu. He's also a former British trade official. He joins us here in the Bloomberg Interactive Brokers studio. Did, did what happened in Venezuela in the aftermath show that the security relationships that Venezuela thought it had with Russia and China were not effective at all? Or was it the fact that this was the US Firepower and there's nobody that can compete with that?

[Ed Price]

What's the difference? Right? I mean, they messed around and they found out, in the words of the President, and yet I think it shows another thing which, you know, Carol and I were discussing before we went on, which is that the United States and the west more broadly are fighting battles now that we would otherwise be fighting in, in a future World War iii. And I think that's very uncomfortable.

[Interviewer/Host]

Explain what you mean by that.

[Ed Price]

Well, we're doing things, for example, hitting Iran and basically going into Venezuela and saying, right, we own this place now, which in a general war scenario might be sensible things to do. Right. It might be sensible to destroy Iranian nuclear capabilities if we are in a war. Let's remember that Iran and Russia are, on the face of things, close friends, despite this article. But that's uncomfortable, right? Because as Westerners, we all grew up on stories of Pearl harbor, the invasion of Poland and so on. And so the fact that we are now the first mover is very morally uncomfortable. That doesn't necessarily mean that it's strategically redundant. In fact, it could be quite the opposite.

[Carol Massar]

Why are we the first mover, in your view?

[Ed Price]

Well, I think that we've realized, as the west broadly, that we lost the first global information war, which was undeclared. It was fought in the last decade or so on the Internet. And our populace has been subjected, both sides of the pond, to poison, intellectual poison. I mean, there are people that believe in all sorts of conspiracy theories now. Like I heard one the other day, that the Titanic was fake. I mean, it's ridiculous. But this was. I know it's ridiculous, but. But this is the, the reality of it. And so now we've realized that we can't fight as an open economy, as an open society against authoritarian disinformation. We're making different moves and we're using hard power.

[Interviewer/Host]

So, meaning that the tariffs, sanctions don't necessarily work. What needs to happen is military action in order to remove an adversary.

[Ed Price]

Well, I think what we.

[Interviewer/Host]

Every case is different, of course, but I'm just trying to make sure I understand what you're saying.

[Ed Price]

I think that broadly speaking, the United States is reconfiguring to a war footing. We are not going to get to a position of autarky, which is zero trade, but we are cutting off strategic trade with someone, with a country I should say that we now consider to be a strategic adversary. Germany is rearming. Israel has destroyed the capability of Iran in many ways and all of its, you know, Hezbollah and all its other proxies. So I think that we are, as I say, we're making moves on a chessboard without waiting for our adversaries.

[Interviewer/Host]

Is this good, in your view?

[Ed Price]

It's good until it's bad. It's good until it's bad. There's never a moment that you can say in global strategy. Well, this is the obvious move we have to make.

[Interviewer/Host]

Like when you woke up that Saturday morning and you saw that Maduro was out, did you say to yourself, finally, what did you say?

[Ed Price]

Well, two things. One, good riddance, because it's a very good thing that the United States has the ability to remove dictators, and he had his. He had his feet on the throat of the Venezuelan people. But on the other hand, we're using our hard power, and it's one and done. So if we're going to use our hard power, eventually that will affect the level of trust that we project in the world. And somehow that's going to feed back into treasury markets, that's going to feed back into the way we fund our military, which is through debt.

[Carol Massar]

So you said it's good until it's bad. So what does bad look like?

[Ed Price]

Well, bad would be the reaction function in Russia and. Or China coming to blows. Right. Direct blows, if you notice. What we're trying to do is we're trying to get to a strategic threshold whereby under the Biden administration and under the Trump administration, we're keeping the Russians in check, we are keeping the Chinese in check. We are doing things that don't necessarily introduce great power conflict, great power war. But of course, we don't control these other sides. Right. And it might be that looking at, I mean, this is to your question, Tim. It might be that the Chinese looking at Maduro deters them from Taiwan. They might think, well, we're not ready, whatever that was, that was crazy. Or it might be that they think we need to speed up because our strategic window is closing.

[Interviewer/Host]

I think a lot of people have.

[Carol Massar]

Questions, well, which One is more likely because I think that has been somewhat of a debate. Right. I mean, Ed, in terms of does China now feel emboldened to be like, okay, now let's go after Taiwan, yeah. Or does it be like, that was a little freaky. I'm going to, we're going to just lay low for a little bit.

[Ed Price]

Well, I'll let you in on a secret. Okay. In the world of security analysts, we, we don't know which one is more likely. And I'll give you an example to back that up. Before the First World War, there was symmetrical deterrence. The armed camps in Europe both had equal force. And yet there was a war. Before the Second World War, the British changed attack. They said, well, we'd better not try and race Hitler. We better try diplomacy, appeasement. Because we obviously, in the First World War, provokes the Germans into attacking. And yet there was a war. So you have one example of a major conflict starting with symmetrical deterrence and an arms race on both sides. And you have another example of one side saying, maybe we should hang back. So we net. Net. We don't know how these things begin.

[Interviewer/Host]

I want to jump to Iran. We're speaking with Ed Price right now. A senior fellow at New York University is also a former British trade official. He joins us here in the Bloomberg Interactive Brokers studio. The president. When we actually saw crude oil fall, after the president made these comments, he said that he's been informed by sources on the other side that killing has stopped. Stopped in Iran. He says, we'll watch and see what the process is. Oil fell close to 2%. After the President signals he could hold off on attacking Iran. What would an attack on Iran look like? And what would the, what would the outcome of that be for the United States and for the Iranian people?

[Ed Price]

Well, I mean, first of all, we should have done this 20 years ago. We went into the wrong country, Iraq. And that mistake is, is echoing through history. Now, what would it look like? It doesn't seem that the President is a boots on the ground kind of guy. I think it would be very air.

[Interviewer/Host]

Heavy like we saw at the nuclear facilities in 2025.

[Ed Price]

Absolutely right. And that was the right thing to do. And if I can be partisan, I think this would be the right thing to do as well. The Iranian regime is oppressing its people. But again, it's very difficult because the lesson we did learn from Iraq and Afghanistan is it's very hard to put in place a government of your choosing afterwards. So we would have to see a full Uprising in the country. We would have to find people either in this country or in Iran to run the place.

[Interviewer/Host]

That's not an off the ground scenario.

[Matt Hornbach]

No, no.

[Carol Massar]

I mean, what are, what are the Middle Eastern allies in the region likely to do? Because this is complicated.

[Ed Price]

Well, I think Israel's done what it's going to do. Right. So Israel has played its hand very expertly. And the only reason we're even talking about Iran being in a position to for regime changes, because Israel hits it so hard. I think if we're thinking about American allies, I think Kingdom of Saudi Arabia would be the key.

[Carol Massar]

That's what I'm thinking. Yeah.

[Ed Price]

They would be the key player to get on board. And of course, the Saudis and the Iranians have been looking at each other for years thinking which side has the best leadership claim to regional Islam to the region as a general matter. So I think if the KSA got on board, we would see a shift and ultimately the KSA and Israel have to get together as they were going to before October 7th and normalize relations. And that would be a new Middle east is there.

[Carol Massar]

That's what I'm curious. Is it possible, Is it possible that we are seeing the beginning of a new Middle east where there isn't so much conflict or is there no way for that to happen?

[Ed Price]

This is my opinion. I think it's Iran behind all of this stuff. George W. Bush was once caught on a hot mic saying to Tony Blair, we just need Iran to stop doing all this stuff.

[Carol Massar]

Yeah, yeah, that's true.

[Ed Price]

It's Iran. They funded Hezbollah and so on.

[Carol Massar]

So if you can get Iran, if.

[Ed Price]

You can get Iran, I think, I think the whole region would calm down.

[Interviewer/Host]

Our Bloomberg News team reporting that Germany is taking the lead on of European nations sending military personnel to Greenland. This after Denmark said it's meeting with top US officials intent on controlling the world's biggest island, revealed that it, quote, unquote, fundamental disagreement remains. Your view on what should be done about Greenland?

[Ed Price]

Nothing. The United States should do nothing on Greenland. As smart as it would be and as moral as it would be to go in and help the Iranian people liberate themselves, it would be as dumb and as stupid and as destructive for us to go into Greenland. It would rupture our alliance with the eu. And by the way, I just mentioned the Germans are rearming and they're our friends right now, but I mean, they're going to be a formidable military within the next decade. So not as formidable as the US perhaps, but I think it would be silly.

[Interviewer/Host]

We always want more time with that Price.

[Carol Massar]

So just come back soon.

[Ed Price]

I will.

[Carol Massar]

Good to see you. Ed Price, of course, Senior Fellow Nonresident at nyu, former British Trade official and more joining us right here in our Bloomberg Interactive Broker Studio. Thank you.

[Interviewer/Host]

Thank you. Stay with us. More from Bloomberg businessweek Daily Coming up after this.

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[Carol Massar]

Well, as you know by now, the U.S. supreme Court did not rule on challenges to President Trump's tariffs for a second time. Tim was mentioning, and we'll see if third time's the charm that happened earlier today, leaving the world to wait until at least next week to learn the fate of his signature economic policy. This is a big one, Tim.

[Interviewer/Host]

Yeah. Meantime, research by Morgan Stanley's Matt Hornbach caught the attention of our team. A big shout out to Talia on our team for bringing this to our attention, noting that there may be room for nuance when the Supreme Court does finally rule.

[Carol Massar]

All right, so let's get into it. Matt is managing director, global head of Macro strategy up at Morgan Stanley. He joins us to and here in studio. Great to have you here. Welcome, welcome. The Supreme Court. So we're still waiting. You've got some research out. I mean, to be real, there could be one extreme. They could fully repeal it, right? Or they could fully back the president's IPA towers. How likely, though, in your view, before we get into the nuances, how likely is it to be one of those extremes, Matt?

[Matt Hornbach]

I think it's less likely than the middle gray area where there could be room for nuance. You know, these are complicated matters and there are lots of different opinions that are likely being held by different members of the Supreme Court. So we do think that the sort of black and white scenarios are less likely than that middle ground gray area where we do think that there's room for differences of opinion to come through in the final opinion whenever it gets released.

[Interviewer/Host]

When the president was in Detroit at the economic club yesterday, he said we should win on tariff Supreme Court case. He said that and he said we'll figure something out. If we don't win the tariff case, is he right to think that he will win it?

[Matt Hornbach]

Well, I think the president is right to think whatever he would like to think. In the end, it depends on the group of individuals who are tasked with setting the, you know, law of the land. So I don't know if he's right or if he's not right. The Supreme Court court will tell us one way or the other.

[Interviewer/Host]

So when we do hear from the Supreme Court. Let's say it doesn't go directly in the president's favor. He said we'll figure something out. If we don't win the tariff case, what's a likely scenario for his team to figure out how it can legally implement or keep these tariffs? Should the IPA tariffs be ruled unconstitutional?

[Matt Hornbach]

Absolutely. Well, I mean, I think the first thing to note is that there are already bilateral agreements that are sort of working their way through the system. Some of them have been finalized in as far as we think they might be finalized. Others are probably still in a period of back and forth. But the President does have the ability to do bilateral deals with countries, number one. Number two, he has other authorities that are at his disposal to take some of the emergency tariffs that he put in place and kind of repackage them under these different authorities. So, for example, section 232, section 301. Right. These are numbers that many people may not be familiar with. But, you know, starting in 2016, they are now very quickly became aware of these different authorities that the President has to implement tariffs. So I think he's got some of those authorities. There's a Section 122, which allows the President to put up to a 15% tariff on countries for a limited period of time. So there are definitely things that he could do.

[Interviewer/Host]

We didn't hear anything about Congress and using the powers of Congress to do this.

[Carol Massar]

That's what I think is interesting and we want to get into. What you see is there are more nuances in terms of how this plays out. But it does. You do wonder about the precedent that's set by this ultimate Supreme Court ruling about what this means going forward and the role that Congress plays has historically and is supposed to be playing when it comes to levying tariffs.

[Matt Hornbach]

Absolutely. And I think this is one of the possibilities that the Supreme Court could lay out is they could lay out some kind of a time frame for the administration to get the approval of Congress in order to keep the emergency tariffs in place. So there's. This is what we mean by nuance is that there's lots of different ways this could play out. And one of the ways is that the Supreme Court could encourage the administration to gain the approval of the Congress in order to keep the tariffs in place for an extended period of time.

[Carol Massar]

Go back to checks and balances, perhaps.

[Tim Stenovec]

Right.

[Carol Massar]

Like that would be the message you did share with our producer. Talia, a note about these in between scenarios. And I just want to pull out some of it. It Said should this is your words. Should the Supreme Court overturn the IPA tariffs. We think the two main considerations for investors with respect to the US Treasury's financing needs are the magnitude and timing of when refunds would begin. The impact to rethink the impact of treasury issuance will be limited to bills. Limited refund scenario likely no meaningful changes to bill issuance. Partial refund scenario the treasury likely makes a small increase to regular bill auction sizes. Fast scenario of the treasury likely issues if you ad hoc cash management bill. So in other words, they're going to have to come up with some money.

[Matt Hornbach]

So very possibly, yes, they may have to come up with some money. I think earlier this week there was a truth social post by the President relating to the issue of refunds. And the President made it, I think, clear that it's not going to be so easy to figure out who exactly is owed refunds and on what time frame they're going to be paid those refunds. And so I think from our perspective, even if the Supreme Court makes it clear that refunds will need to be paid at some point, the administration may have a lot of leeway to pay the refunds on their particular timeline. And so for the US treasury, who will ultimately have to push the button and send the funds exactly when they need to raise the funds in order to send them through the wires is is going to be very unclear. And you know, when they do decide they need to get the money, they may pre fund the treasury general account by issuing some treasury bills. That's very, very normal and the bill market can certainly handle that.

[Interviewer/Host]

Could it be inflationary?

[Matt Hornbach]

Could the refunds be inflationary? Well, from the perspective of our economics team, the refunds that we might be talking about.

[Interviewer/Host]

Putting a lot of carts before a lot of horses.

[Matt Hornbach]

Exactly right. But, but even if we take the extreme scenario of the refunds getting paid on a reasonable time frame, our economists don't expect it will subtract that much from inflation because the tariff rates will be coming down. And they also don't expect that it would add that much to real gdp.

[Interviewer/Host]

Because I'm just thinking stimulus checks. When I hear a refund check come in in the form of tariffs, I'm thinking what happened with stimulus checks during the COVID pandemic.

[Matt Hornbach]

Well, we have to also bear in mind that these refunds are very likely, mostly will be paid to companies.

[Carol Massar]

Yeah.

[Matt Hornbach]

And not necessarily to households.

[Carol Massar]

And maybe just helps out those companies who've been dealing with higher costs. Hey, one last question. Are there any in between scenarios when it comes to an independent Fed under President Trump, in your view?

[Matt Hornbach]

Well, I think there's lots of considerations here, Carol. And when we think about the independence of the Fed, the first thing we need to understand is that we're talking about a committee of individuals. And so in order to gain overriding control on this committee, you'll need more than just the chair of the Federal Reserve. Number two, whoever ends up being the next chair of the Federal Reserve, when they make a decision on policy, they're going to have to explain it to the investing public and to the public at large in a way that's credible. And if that explanation does not strike people as credible, then financial markets will extract a price.

[Carol Massar]

So the market is kind of the checks and balances.

[Matt Hornbach]

Absolutely.

[Carol Massar]

On any Fed. You know, I'm reading 1929 by Aaron or Sorkin and Andrew. Sorry. And it's just interesting. Like you think about the pressure on the Fed back then during the panic and you're just thinking about the pressure here. It's different. But you just weather, you know, what this would mean for the financial markets going forward.

[Matt Hornbach]

That's right. I think I'm kind of related to this. What is really important is that whoever is in charge of the Fed and whatever the committee ends up looking like that, they get the best quality data from our statistical agencies, the Bureau of Labor Statistics, the Bureau of Economic Analysis that they possibly can get. And one of the things that has happened since the government shutdown in October is that the quality of the data has deteriorated, the response rates to the labor market report have plummeted. It's really important that whoever is in the Fed, at the Fed, they get the best quality data that they can get to make the best decisions for the American people.

[Carol Massar]

They can come back soon. Love to continue this. Matt Hornback, he's managing director, global head of Macro Strategy over at Morgan Stanley. While the President's tariffs certainly on executive minds around the US and around the globe, so too Tim, is the economic backdrop. We got some data today.

[Interviewer/Host]

Yeah. Retail sales rose in November by the most since July, fueled by a rebound in auto purchases and resilient holiday shopping. Wholesale inflation in the US Picked up slightly in November for from a month earlier on a jump on energy costs. Also, US previously owned home sales climbed in December to the fastest pace since 2023, a welcome sign for a housing market that has lacked momentum for a couple of years.

[Carol Massar]

So that's what's going on. So we wanted to take a deeper dive into the US Economic picture based on some of this and especially when it comes to the labor market. With us is Karen Kimbrough. She is chief economist over at LinkedIn. She joins us from Sunnyvale, California. Karen, good to be checking in with you.

[Interviewer/Host]

You.

[Carol Massar]

We keep getting data on the US economy, some old, some more current. Compare that with what the data you guys get on the LinkedIn platform, especially when it shows the US labor market. Does it all kind of tell the same US economic story in your view?

[Karen Kimbrough]

Our data at LinkedIn definitely reflects the publicly available data, although our data typically comes out in real time and I would say sometimes even in advance of the releases. So, for example, we are seeing a lot of hiring data, a lot of quits related data, and a lot of data about job transitions that just tells us about the health of the labor market. And what we're seeing right now, honestly, is a labor market that's holding on. As you just mentioned and your previous speaker mentioned, it's been a couple of years of low momentum for the economy and but we're seeing hiring actually in the last month picked up 6%. So on the month we saw a little 6% bump in hiring, which meant employers are back out there looking for talent. We think that could continue. But by and large, it has been a sluggish labor market. And a lot of that in our opinion, had to do with the really big run up in interest rates that we saw back in 2022 and 2023. You know, the 500 plus basis points in a year and a quarter really kind of hit the brakes for employers.

[Interviewer/Host]

So, you know, we last spoke to you a little over a month ago. And I'll ask the question that I try to ask you each and every time you join us, which is, is the labor market better than it was when you were last on our program now, or is it worse?

[Karen Kimbrough]

You know what, I actually think it's probably a little bit the same, maybe slightly better and better because hiring has accelerated a little bit in the last month for us, but to the point where I said it's kind of the same. Hiring is still running 20% slower than it was in our pre pandemic era. So hiring overall across all industries is pretty slow. There are a few pockets of growth. And you look at education and health care, of course, is the star, technology is improving, believe it, they're hiring more. But by and large, we're in this transition period where the labor market has been a little bit suppressed, where employers just aren't hiring as much and workers are kind of staying. So it's A little bit better. But let me leave you with one thought here. It's still really competitive for job seekers. So on our platform at LinkedIn, what we're seeing is twice as many applicants per open role as, say, three or four years ago. And so there's a lot more people looking at the same jobs, trying to get one of them.

[Carol Massar]

So does that just mean the jobs where there is growth? I mean, there are jobs. I don't. Okay, so they're.

[Karen Kimbrough]

What does it mean?

[Carol Massar]

Yeah, what does it mean? Like, I'm trying to figure it out. Like, so is it that there are a lot of jobs out there, but for the ones that there are most workers for, there's fewer spots?

[Karen Kimbrough]

What it means to me, the way I read it, is that AI is starting to have an effect on the labor market. I do believe that most of what we've seen in terms of that sluggishness in hiring, the fact that the nonfarm payroll numbers are low, has a lot to do with the classic, like, supply and demand factors. But AI is starting to have its effect, and we're seeing it in some new roles that are being created. But those roles are looking for very specific skills, and not all workers across the economy have those skills yet. So here's some of the new roles that we're seeing that are popping up. So, for example, 1.3 million new roles related to AI. Whether you are building AI tools, whether you are integrating them into business processes, whether you're trying to expand, explain it to people and be a storyteller of sorts, there's 1.3 million more roles looking for AI literacy skills.

[Interviewer/Host]

Karen, I want to jump in. That's great for somebody who's like 20 years old and has time to. To learn how to do those things. But for somebody who's, you know, mid or late career, just very briefly, in a minute, how do you make that pivot?

[Karen Kimbrough]

Yeah, well, one of the things is you need to think about the skills, right? So a lot of. A lot of people are kind of striking out on their own, and they're becoming founders, where they are basically entering the gig economy or doing their own thing where they can really lean into the one skill that they really have. That's a special advantage. We're seeing a lot more people get into content creation. There are 4 million people on our platform right now doing content creation, and we're seeing a lot of Gen Z folks who are saying, you know what? The trades actually might be preferable for me as a career path. Wow, 6 out of 10 of them say they're thinking the trades look really meaningful as a career path.

[Carol Massar]

Sounds like people are listening, right? To certainly the trends and demands that are out there.

[Interviewer/Host]

Trades or influencers? Yeah, those are your choices.

[Carol Massar]

Which one would you do?

[Interviewer/Host]

Trades? Both.

[Carol Massar]

I could see you being a good plumber.

[Interviewer/Host]

I think that's probably way less exhausting than being an influencer.

[Karen Kimbrough]

I mean as well see exactly.

[Carol Massar]

Karen. Great stuff. Karen Kimbrough, chief economist over at LinkedIn. Be well, talk soon.

[Interviewer/Host]

Stay with us. More from Bloomberg Businessweek Daily Coming up after this.

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[Tim Stenovec]

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.

[Carol Massar]

As we've been reporting, one of big stories today, and it's kind of because it's been delayed again. The U.S. supreme Court did not rule on challenges to President Trump's tariffs. That was for a second time. So we maybe have to wait until next week to learn the fate of a signature economic policy which again continues to create uncertainty for global CEO, certainly American CEOs. It's also one of the many things that out of the White House that our next guest needs to make sense of. I'm sure he's called on a lot when it comes to all things out of Pennsylvania Avenue. So great to be talking once again, Tim, with Mike Townsend.

[Interviewer/Host]

He's Managing Director of Legislative and Regulatory affairs for Charles Schwab. He's a political analyst based in Washington. He's also the host of Schwab's Washington Wise podcast. He did some time on the Hill earlier in his career as well. Mike, good to see you again. Thanks for joining us. We're only a few days into the new year and already we're talking about Venezuela. We're talking about companies in the US and the president wanting to get that oil out of Venezuela. There's the pushback from the president and the Department of Justice on Fed Chair Jay Powell and the Federal Reserve. A busy few days to start the year.

[Mike Townsend]

Yeah, absolutely. Great to see you, Carol and Tim and I. Absolutely. I feel like it's been two months worth of news in the first two weeks of the new year, so definitely trying to keep track of it all. As you talked about at the top of the show, a little bit of a surprise, I think, that the Supreme Court did not rule on the, on the Trump tariffs. That's something that now it's almost like a parlor game here in town. Is it going to be today? Is it going to be today? So I guess we're going to wait until next week and see where that heads.

[Carol Massar]

I mean, what's. Is the president creating a good or bad environment for American business? Like what. What is it that you keep hearing?

[Mike Townsend]

Yeah, I think that the hard thing with this president, and I'm not saying this flippantly, but he just says a lot of stuff over the course of any one day, whether that's, you know, in speeches where he goes off script or in impromptu news conferences or over social media. There's just a lot to absorb every day. And, you know, I think companies are doing a better job. CEOs are doing a better job at maybe not reacting to every little thing and, you know, trying to find where are the places we can work with the administration to work with the White House and not sort of overreact to every single pronouncement that comes out, because not every single pronouncement that comes out sort of amounts to anything. So I think that's the trick that is, you know, people are getting better at navigating that.

[Carol Massar]

Well, certainly not apples to apples, but I feel like we're doing the same thing. I mean, there's a lot that comes at us, and I think we're really tasked with trying to determine what really matters to investors longer term. So when it comes to, to things like capping credit card fees or Venezuela and having oil industry execs there and, you know, talking about investing and recreating and rebuilding the infrastructure in Venezuela, you know, I mean, I can just go kind of on and on the tariffs. How do you figure out with all of that that's dumped on us on a daily basis, what really matters, what we should be focusing on? Maybe it's not the shiny thing, but maybe it's Something much more so substantial. What are the substantial things that you think corporate CEOs should be keeping an eye on when it comes to this White House?

[Mike Townsend]

Well, look, I don't think there's any question that the markets are very, very interested in the Fed independence issue and the, the situation with Fed Chair Jerome Powell. But even larger than that, obviously we have a successor to Powell coming, coming up and you know, potentially other changes to, to the board. Stephen Myron term, which is very abbreviated. You know, his term ends at the end of January. So you know, we'll have to see whether he stays on or whether the President appoints someone else to that. But I think the question of Fed independence is absolutely critical for the markets. You've seen what happened over the last few days maybe kind of come back to the White House and not the way they expected a lot of pushback from a lot of different people. Well, Mike, do you think international, when.

[Carol Massar]

The President consistently criticizes Fed Chair Jay Powell that that's just bark or do you think there's bite to it in terms of what he wants in a Fed chair and what he's going to present in a Fed chair?

[Mike Townsend]

Yeah, I think, you know, I think he's frustrated. There's no question he's frustrated that he thinks rates should be lower and that he thinks Jay Powell is sort of the driver of that. And I think we're going to get a successor chair for, from one of the, whoever the he chooses out of the kind of four finalists it appears that we have, I think we'll get someone who is probably at least more interested in doing, doing what the President wants in terms of rates. But I think the thing to remember is that this is a 12 member committee that votes and the chair is just one vote. So I don't think that, you know, putting in a chair that maybe is a little bit, bit of a different mindset than Powell is necessarily going to mean rates are going to go down all of a sudden. So I think that's the important thing to keep in mind that it is a committee that's going to make a group decision based on the data and, and I don't expect dramatic changes no matter who he, he chooses as chair.

[Interviewer/Host]

But there are certain things that have to happen between now and then, Mike, and that includes at least according to Senator Thom Tillis of North Carolina Republican, the President backing off and the DOJ backing off its legal threats against Fed Chair Jay Powell. Senator Lisa Murkowski supports Senator Thom Tillis decision to vote against any nominees to The Fed in the Senate Banking Committee in response to that DOJ probe into Jay Powell. So we have to see movement there, it sounds like, before we even see movement for the next Fed Chair.

[Mike Townsend]

Well, and I think that's right. I think you have to keep in mind, and sometimes I think the President forgets this, but that, that Congress has a role to play in a lot of these issues. And you know, I think on, you know, for example, on another issue, the, the capping of credit card interest rates, you know, you've seen some pretty high level of skepticism on Capitol Hill. And of course, it's Capitol Hill that ultimately have to, to decide how to proceed on that. So I think the Fed chair is, is another place where, you know, whoever he nominates has to go through the Senate Banking Committee, has to get a vote by the full Senate, and they have some ability to hold that up, as Tillis talked about and as others have talked about. So we'll see where the, where the investigation goes. But I venture to say that this has not played out in the way that the White House maybe anticipated it would. And wouldn't be surprised if we saw maybe a little bit of a backing down at some point. We heard in the near future.

[Interviewer/Host]

Yeah, we heard the word backfire quite a bit over the last couple of days in terms of the way that this has played out.

[Carol Massar]

Yeah, you know, that's what's interesting. Right. And we, we know the President will say things and then he kind of backpedals or comes back, you know, on different issues. But I do wonder how that can be, you know, kind of just prevent executives from making decisions because they either don't want to pop up on the White House's radar or they're just not quite sure what ultimately sticks in terms of policy. Policy or oversight from the White House.

[Mike Townsend]

Oh, I think there's no question that makes it more difficult. I mean, certainly the tariff situation is a great example of that. Are they going to be on? Are they going to be off? Are there going to be refunds? And, you know, we're months and months into this, into this debate and knowing that this court case was coming. So I think that makes things difficult. I think longer term planning is clearly harder, but I think executives are finding a path to forward and sort of picking and choosing their battles and trying to communicate with the White House to not just go out on TV and bash something that the President said, but to find, you know, is there a place of common ground that we can work towards? And I think executives are doing a Much better job at that than maybe they were six or eight months ago.

[Carol Massar]

We're talking with Mike Townsend, managing Director of Legislative and Regulatory affairs for Charles Schwab. He's in Our Bloomberg Washington, D.C. bureau. You know, Mike, though, when a CEO does speak out, and I think about what happened with the oil executives around the table at the White House and the Exxon CEO who talked about Venezuela being uninvestable and kind of the pushback, I mean, why aren't, I mean, I guess this is stupid naive, but here I go, you know, why aren't more CEOs speaking up? I mean, I think it was kind of shocking, shocking to see Jay Powell on a video pushing back who to thunk. But I do wonder why are they so fearful of retribution from the White House?

[Mike Townsend]

Well, I think it just doesn't benefit, you know, your company to necessarily be in the headlines for a couple of days. And so I think that's what a lot of executives are thinking about.

[Carol Massar]

But isn't there some honesty? Right. Like I think about the Exxon CEO of being honest and saying, yeah, Darren.

[Interviewer/Host]

Woods said that on Friday at that roundtable that we, we broadcast, like, if.

[Carol Massar]

You'Re a shareholder in a publicly held company, you want your CEOs to be transparent and honest about something that could mean investing money and something that doesn't ultimately pay off because it. Right. It already hasn't. So, like, I, I'm just trying to, like, understand, you know, that aspect of it.

[Mike Townsend]

Well, I do think the Venezuela situation in particular is a, is a pretty unique one for the oil companies. They have a long history. They have lots of losses there. They have, you know, years and years of unstable infrastructure and unstable environment. I'm not surprised that they're skeptical about the situation. And I think, particularly with Venezuela, you know, I don't think there's too much disagreement that Maduro was a bad guy, that he had to go. The question is, what happens from here? What does it mean that we are running Venezuela? How long is that going to happen? You know, are we going to end up with troops on the ground? So I think the, there's just a lot of uncertainty there. And, you know, I'm not surprised that some executives said, you know, kind of hang on, let's wait and see how this plays out before I commit to anything. You know, four days after, after this has all gone down. I do think you mentioned earlier the video from Fed chair Jerome Powell. I thought that was pretty interesting, as you did, because he has taken all the provocations, all the name calling over the last really 12 months and just kind of let it roll off his back until now. Well, I thought that was pretty significant that he made that statement, Mike, to.

[Interviewer/Host]

That point, just in 30 seconds, the last 30 seconds we have with you. The markets have been letting all this roll, roll off its back. Whether we're talking about the equity market or the bond market. We're seeing some losses in equities today and yesterday, but it's pretty minimal, I think, given what's happened over the last few days. Very briefly, when does this rhetoric start to affect the markets negatively?

[Mike Townsend]

Yeah, I think, again, I think the markets looked at this Fed situation, seen the widespread, you know, different perspectives of commentary on the Hill about concern and said, okay, maybe we're not, don't have to be too worried about this right now. Again, I think the markets, sort of like we were talking about with executives are, are doing a better job at maybe not reacting to every little thing that comes out. And hopefully we'll continue to do that.

[Carol Massar]

And hopefully we're going to come back to you soon because we so enjoy talking with you. Mike Townsend, Managing Director of Legislative and Regulatory affairs over at Charles Schwab.

[Tim Stenovec]

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 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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