US, China Reach TikTok ‘Consensus,’ Setting Up Trump-Xi Call

Summary

Bloomberg Businessweek – Episode Summary

Episode Title: US, China Reach TikTok ‘Consensus,’ Setting Up Trump-Xi Call
Date: September 15, 2025
Hosts: Carol Massar & Tim Stenovec

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Overview

This episode centers on rapidly evolving developments in US-China relations related to TikTok, with an expected Trump-Xi call following a provisional agreement to keep TikTok operational in the US. The conversation highlights the geopolitical, economic, and strategic facets of this decision, using TikTok and other tech flashpoints (like Nvidia) as a lens for broader trade negotiations. The episode also includes segments analyzing the upcoming Federal Reserve meeting and Elon Musk’s financial moves, making connections between fiscal policy, global business, and technology.

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US-China Reach Framework on TikTok

[01:53–06:41]

Main Points

• Provisional TikTok Deal:
  Negotiators have reached a “framework deal” to allow TikTok (ByteDance) to continue operations in the US, with specifics still being finalized.
• Political & Geopolitical Stakes:
  TikTok’s future is tightly coupled to US-China trade tensions. President Trump has advocated for a solution that enhances US influence over TikTok, recognizing its significance for younger voters and US tech dominance.
• Upcoming Trump-Xi Call:
  The episode anticipates a pivotal conversation between President Trump and Chinese President Xi Jinping, potentially at the APEC summit next month.
• Chinese Leverage with Nvidia:
  Parallel to the TikTok issue, China found Nvidia in violation of antitrust rules in a previous deal, interpreted as a pressure tactic during ongoing negotiations, especially with stakes in AI and semiconductors.

Notable Quotes

• On the state of negotiations:
  “I think it’s fair to say things are moving forward and moving in the right step. But ... always proceed with a little bit of caution there.”
  —Skyler Woodhouse ([03:31])

• TikTok as leverage:
  “If he’s able to basically say that TikTok in the US are more aligned than TikTok and China, the President might see that as a win and U.S. dominance.”
  —Skyler Woodhouse ([04:23])

• Geopolitical context:
  “It’s interesting that the agreement sort of came while the US and China were meeting in Madrid. So that just sort of highlights the importance there ... It definitely could impact tariff talks.”
  —Skyler Woodhouse ([05:43])

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The Federal Reserve: Policy Outlook and Trump’s Influence

[08:30–16:09]

Main Points

• Expected Fed Rate Cut:
  Former New York Fed President Bill Dudley and senior US economist Yelena Shulyatyeva both expect a 25 basis point cut.
• Economic Crossroads: The Fed faces a balancing act between controlling inflation (pressured by tariffs) and responding to weakening jobs data.
• Inflation vs. Slowdown:
  Shulyatyeva forecasts inflation above 3% later this year because of tariffs, with continued slowdown but not an outright recession or stagflation.
• Trump’s Public Pressure:
  Trump has publicly urged deeper rate cuts and is vocal about Fed appointments, which raises concerns about the central bank’s independence.

Notable Quotes

• On conflicting Fed mandates:
  “There are the two goals in conflict and we actually think that inflation will rise ... but we also see a significant slowdown in economic growth.”
  —Yelena Shulyatyeva ([11:34])

• On President’s influence over the Fed:
  “It’s hard to kind of ignore all of that’s been said and … possibly the changing the composition as a result of President Trump.”
  —Carol Massar ([13:26])

• On risks to continued growth:
  “Consumers, you know, spending, keep spending and that's really an upside risk to the economy. But unfortunately ... consumers ... are getting tired of all this high prices.”
  —Yelena Shulyatyeva ([15:20])

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Tesla, Elon Musk’s Pay Package, and Stock Moves

[16:27–24:41]

Main Points

• Elon Musk’s $1B Share Purchase:
  Musk’s buy signals confidence amidst discussions of an unprecedented $1T pay package, with share prices reacting positively.
• Tesla’s Meme Stock Energy:
  The stock demonstrates meme-like volatility, heavily influenced by Musk’s public statements and retail investor sentiment.
• Pay Package as Lock-In:
  The pay deal is constructed to anchor Musk at Tesla years into the future, aligning with ambitious business and technology goals (autonomous vehicles, robotics).
• Continued Multitasking—No Restriction on Musk’s Outside Activities:
  Despite shareholder concern, Musk remains free to split attention between Tesla, SpaceX, political activity, and personal branding.

Notable Quotes

• On Musk’s impact:
  “If the board were to say ... we need to replace you, that would instantly ... most investors, including bulls and bears, the stock would fall because this company is really a bet on this one guy, warts and all.”
  —Max Chafkin ([20:08])

• On the audacity of the pay deal:
  “It also kind of creates a goal that is really audacious and that’s something that can maybe help justify the valuation being where it is.”
  —Max Chafkin ([19:18])

• On Musk’s ongoing activities:
  “There’s nothing in this pay package saying you need to spend more time at Tesla relative to SpaceX ... It really just doesn’t sound like that’s the plan.”
  —Max Chafkin ([22:54])

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Debate Over Earnings Transparency: Quarterly vs. Semiannual Reporting

[26:46–29:10]

Main Points

• Trump’s Proposal:
  President Trump proposes to end quarterly earnings reports, shifting to a six-month cadence, claiming it would save costs and let managers focus.
• Investor and Analyst Reaction:
  Brent Schutte and hosts agree that transparency is vital, with more frequent reporting seen as a key reason for the US market’s global premium.

Notable Quotes

• On transparency:
  “For me, the more transparency the better. And so I prefer having quite a bit of data to look over.”
  —Brent Schutte ([27:30])

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Market Outlook: Navigating Uncertainty and Inflation Risk

[29:10–34:05]

Main Points

• Fed Dilemma & Tariff Effects:
  With tariffs rising sharply, the US is entering uncharted territory, reminiscent of policies not seen since 1935. The Fed’s dual mandate is under strain.
• Investment Strategy:
  Schutte recommends diversification and staying away from concentrated bets due to elevated uncertainty and potential inflation risks.
• Small and Mid-Cap Opportunities:
  These segments are seen as holding long-term promise despite current nervousness about valuations.

Notable Quotes

• On market positioning:
  “You stay diversified. You don’t concentrate in any one part of the market. Because concentration to me means that you think you know exactly what’s going to happen.”
  —Brent Schutte ([33:02])

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Timestamps of Important Segments

• US-China TikTok Deal Discussion: [01:53–06:41]
• Fed Policy & Trump’s Influence: [08:30–16:09]
• Tesla & Elon Musk Discussion: [16:27–24:41]
• Earnings Transparency Debate: [26:46–29:10]
• Brent Schutte Market Outlook: [29:10–34:05]

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Memorable Moments

• Skyler Woodhouse's careful optimism about the TikTok negotiations and the potential domino effect on broader US-China relations ([03:31], [05:43]).
• Yelena Shulyatyeva’s nuanced take on inflation and recession risks amid policy and market volatility ([11:34], [12:48]).
• Max Chafkin’s candid appraisal of Elon Musk’s greater-than-life influence over Tesla and the speculative nature of its valuation ([20:08]).
• Brent Schutte’s clear vote for continued transparency and data availability in public markets, reinforcing trust and market premiums ([27:30]).

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In summary:
This episode offers listeners a high-level yet detailed scan of crucial developments at the intersection of geopolitics, US economic policy, technology, and financial markets. The discussions are lively, insightful, and timely, providing valuable perspective on how these disparate issues coalesce to shape the global business and investment climate.

Transcript

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[A]

Bloomberg Audio Studios Podcasts Radio News this.

[B]

Is Bloomberg Business Week Daily reporting from.

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The magazine that helps global leaders stay.

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Ahead with insight on the people, companies.

[C]

And trends shaping today's complex economy.

[B]

Plus global business, finance and tech news as it happens.

[C]

The Bloomberg Business Week Daily Podcast with Carol Massar and Tim Stenovec on Bloomberg.

[B]

Radio Headlines already coming out today, including social media posts from President Trump who said he would speak with Chinese leader Xi Jinping Chinese leader Xi Jinping on Friday. All this following talks between negotiators that resulted in a framework deal to keep Byte Answers TikTok app running in the US So where is this all important trade and geopolitical relationship really? We're going to head to The Bloomberg Washington D.C. news Bureau and bring in White House reporter Skyler Woodhouse who joins us from there. Scala where is the US And China in these talks? What's the status as it stands right now?

[D]

Yeah, Tim, I mean I think what we're seeing right now, you know, this is just sort of the next step in sort of the China US Saga around their talks, from everything from tariffs to obviously what we're seeing with Tick Tock and with Tick Tock, this is something, you know, that President Trump has talked about for quite some time now and it's something he definitely wants to see come together. I mean during the campaign he talked about how with younger voters on TikTok, it sort of helped amplify his momentum. So, you know, he would like to see this deal come together. And as we look forward to what, September to October next month, with the two leaders potentially heading to the APEC summit, I mean, I think we'll have to see if this deal ultimately comes together. But one thing we did not quite hear from today with the talk was we saw the movement around Tick Tock, but we're still looking to see what those details might be.

[A]

Yeah, I mean, devil in the details, like. But maybe everybody has always said to us, used to China, complicated. Right. So none of this stuff happens easily. And so it's going to be a lot of talks before we start to get kind of the final terms, if you will. So is it progressing? Can we say it's progressing?

[D]

I think when you think of the Trump administration, there's usually a lot of meetings, a lot of, you know, conversations that are being had. I think, I think it's fair to say things are moving forward and moving in the right step. But I think, you know, any time when talking about the Trump administration, you always have to sort of err on a side of caution. Just because things can change so quickly, something could change at this very second, you just never know. So, you know, even though things are appear to be moving forward, still always proceed with a little bit of caution there.

[B]

No, one thing that Carol and I have talked about quite a bit, Skyler, is just the question of Tick Tock and why that seems like such an important issue or why it is such an important issue. We understand the huge user base, certainly we understand the power that the app has. But when you think about it from the perspective of Washington D.C. and maybe from the perspective of China using this as a bargaining chip. What is that? Context?

[D]

No, absolutely. I mean, I mean, I mentioned this about, you know, President Trump is. You could say he's a fan of the app in terms of how the engagement is with younger voters. But then separately, I mean, I think it ties into what the President has sort of been trying to do during his second term, which is sort of, you know, establish the US Basically. If he's able to get the US more involved in Tick Tock and have it be less Chinese owned, you know, that's a win for him, especially given how massive the TikTok platform is. If he's able to basically say that, you know, TikTok in the US are more aligned than TikTok and China, the President might see that as a win and U.S. dominance.

[A]

Hey, one thing I though want to get to and I think to mentioned it, you know, China ruled that or maybe we anyway it's part of the backdrop.

[B]

We've been talking about it.

[A]

We have been trying to rule that Nvidia violated anti monopoly laws with a high profile 2020 deal. So that is seen as ratcheting up the pressure on D.C. during these sensitive trade negotiations. Skyler, is China just negotiating, showing leverage like know TikTok's important. Nvidia is really important certainly to the United States and AI. So I'm just trying to put that in that piece into the puzzle and how it explains what's going on here between us and China.

[D]

No, absolutely, Carol. I mean I think it's very interesting to sort of take a step back and just sort of lay out that, you know, it's interesting that the, the agreement sort of came while the US And China were meeting in Madrid. So I think that just sort of highlight highlights the importance there. I mean it's still, you know to, to be seen on if you know, this is China using this as leverage. But I mean it definitely could impact tariff talks. So you know, we heard from Jameson Greer earlier today in Madrid saying, you know, that you know, a potential extension could come in November. But I mean still a lot going on in this space especially around AI and chips and all that stuff. So it will be interesting to see sort of what this investigation and how it wraps into everything going forward and.

[A]

How it wraps into what's expected is a chat between President Trump and President Xi on Friday. All right, we're going to leave it there. Scholar, thanks so much. Skyler Woodhouse. She is Bloomberg Washington, D.C. news Bureau White House reporter joining us there from the nation's capital.

[B]

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

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Pinpointing the genetic changes that predispose us to disease. Identifying the roots of mental illness, treating congenital anomalies even before birth. At Boston Children's Hospital we're investing in children's health today to ensure the well being of adults tomorrow. As home to the world's largest pediatric research enterprise and more than 260 specialty programs, Boston Children's is where the world comes for answers. Learn [e-mail] introducing the all new Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time? Do that with the all new Adobe Acrobat Studio. Learn [e-mail] do that with Acrobat. Every business starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey with smart business buying. Get everything you need to grow in one familiar place. From office supplies to IT essentials and maintenance tools. Amazon Business takes the buying experience you know and love from Amazon plus tools that help you save costs and make insights based decisions ready to bring your visions to life. Learn [e-mail] you're listening to the Bloomberg.

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Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern.

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Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch.

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Us live on YouTube. Bill Dudley, former New York Fed President and Bloomberg Opinion columnist, discussed the outlook for this week's Fed policy decision and the future path of interest rates right.

[E]

Along with everybody else.

[C]

I expect a quarter point cut.

[A]

It's baked in the cake.

[C]

I'd be surprised if they do anything else. They'll be guidance because they're going to.

[B]

Publish the summary of economic projections which.

[C]

Shows their interest rate outlook for the rest of the year and into 2026 and 2027. And I think the big debate there.

[B]

Is do they show one more cut after September or do they show two more cuts?

[C]

And I think it's going to be a very close call between those two outcomes. I'm actually expect expecting very sense on the side of no rate cuts, maybe 0 or 1. The other side of the equation is are we going to get 50 people supporting a 50 basis point rate cut? I think one person I'm expecting them perhaps is is Steve Moran if he gets confirmed and is sitting on the FOMC on on Wednesday afternoon.

[B]

They have it. Former New York Fed President Bill Dudley, who is a Bloomberg Opinion columnist, earlier today on Bloomberg Surveillance on Bloomberg Television. Carol, we had a great guest with a view on this week's Fed decision.

[A]

We do indeed. Great to have with us a former Bloomberg colleague, now senior U.S. economist for the Conference Board, Yelena Schiller joining us from Long Island. Yelena, so good to have you back here with us. Do you agree with former New York Fed President Bill Dudley?

[F]

Well, on certain points, yes. And I guess everybody seems to agree that we're going to have a 25 basis point cut tomorrow. So I guess the most Exciting thing to watch will be to see who's going to be at the meeting. Meeting and not what they do.

[A]

Right.

[B]

Yeah.

[F]

I think, you know, in terms of dissents, we actually could see a little bit more of difference in opinions. And you know, if Stephen Myron is going to participate in the meeting, he may actually dissent on the dovish side in in favor of cutting rates even more than 25 basis points. Or we could see a hawkish descent. That is quite possible. I think. You know, the previous summary of economic projections showed 3.5% forecast for core PCE this year. So if some of these participants still think that inflation is going to rise as much, they may also descend on the hawkish side. So it will be definitely a very interesting meeting and we will see how many cuts they will price in. I totally agree with Bill Dudley that that is probably going to be the most interesting thing to see how many cuts are in the dot plot.

[B]

Well, let's take a step back and just want to get from you your view of the US Economy right now. Carol and I've spent quite a bit of time over the last few weeks talking about the tension between the Fed's dual mandates when it comes to stable prices and maximum employment. Given the cracks that are starting to show in the labor market, what do you think is more important for the Fed to focus on tomorrow's meeting and then toward the end of the year?

[F]

Totally. I think that's. That's exactly the thing that we are watching. So now the, the mandate is pretty tricky to, to follow. Right. So there are the two goals in conflict and we actually think that inflation will rise. We think that inflation will rise above 3% in terms of PC towards the end of the year due to tariffs. But we also see a significant slowdown in economic growth. The economy has already slowed quite significantly in the first half of the year. Growth really fell below 2% if you average it up Q1 and Q2. So don't be fooled by 3.3% GDP growth in the second quarter. So it's due to gyrations in imports ahead of tariffs. So. And we do see that the economy will slow further in the second half of the year below 1%, quite frankly. So we spent the time.

[A]

So Yelena, Shill stagflation or recession or how are you potentially seeing it?

[F]

It's too like. These words are very dramatic. We don't expect either. So stagflation is inflation getting out of hand and inflation expectations getting out of hand. We don't project that. So we do see a pickup in inflation and slowdown in economic growth, but not to such a degree that also we forecast a recession. No, we do think that there will be a significant slowdown, but growth will probably remain positive. And that will be very tricky to read in economic data.

[A]

One of the things I'm just curious is President Donald Trump even today predicted a big cut from the Federal Reserve this week ahead of the meeting. And we know he has been for a while since he really came into the, into the White House for the second term, talking a lot about the Fed, the composition to the Fed. What Jay Powell should be doing is that input from the president, you know, how is it maybe impacting or maybe more so politicizing the US Central bank? I know we can say they're not going to be political, but it's hard to kind of ignore all of that's been said in the pressure and possibly the changing the composition as a result of President Trump.

[F]

Well, it's a very good point, Carol. And you know, obviously we all watching what is happening with the Fed and how it affects Fed independence. I think the Fed and each and every participant in that meeting will actually try to make as much effort as they possibly can to really address this in a very nonpartisan, non political way. Looking at the data, looking at the same data we'll all look at and just come up with the best possible projection and solution for how they see the economy will evolve. And we have to listen to them and really believe that's what's what's happening. I think, yes, the recent news are very important because they draw attention to what is happening with the Fed. But what's happening inside of the Fed and at that meeting will be solely focused on the economy. That's, that's what I truly think.

[B]

Yelena, just 20 seconds. What would change your view on saying that the US Is not necessarily at risk of negative growth in the near future?

[F]

Consumers. Consumers, you know, spending, keep spending and that's really an upside risk to the economy. But unfortunately I think that consumers, you know, kind of like spending here and there, but they're getting tired of all this high prices.

[A]

All I'm going to say is my daughter who, yes, she's been a consumer for a long time, but now that she's starting to have her own job in her own place and do her own consuming is just like, why is everything so expensive?

[B]

Like, you know, you don't have to cut her off, Carol, you don't have to.

[A]

There is a point you don't have to Love her. Love her.

[B]

Incredibly, the bank of mom and dad. It's not. It doesn't have to close.

[A]

Are they never cut? I mean, my dad was giving me gas money until I was well beyond that. I should have. Yelena, thank you so much. Elena Shellativa, senior year's economist for the conference board.

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[B]

Tesla shares earlier in the session up as much as 7.5%. Given back some of those gains up 3.3% right now. Still good enough, Carol, for a gainer for you?

[A]

Yeah, absolutely.

[B]

You want.

[A]

It's on my list.

[B]

Okay, good.

[A]

It's on my list.

[B]

Well, the reason why we're watching it and talking about it, investors are buying it is because Elon Musk responded to an unprecedented pay proposal from Tesla's board by buying about $1 billion worth of shares.

[A]

A lot of share.

[B]

Is it a lot for Elon, though?

[A]

I don't know. Probably not if you're going to have a trillion dollar pay package.

[B]

We'll pose the question to Max Chaff and he's Bloomberg businessweek senior reporter. He is co host of the Everybody's a Business podcast. He's the author of the Contrarian, Peter Thiel and Silicon Valley's Pursuit of Power. He does it all. He joins us in the Bloomberg Interactive Brokers studio. Billion dollars. Is that a lot for Elon?

[E]

I haven't looked at how much his net worth has moved. I'm not sure if that, if the. Our Bloomberg billionaires list has updated it yet. But it will go up because Tesla's a good stock has gone up in response to this. So maybe it ends up paying for.

[B]

Itself, essentially imagining a snake eating its own tail with like how this, how this works.

[E]

There, there's a little bit of that with Elon Musk. I mean this is.

[B]

He's the wealthiest person in the world. The index has not been updated today, but as of the last updated $418.6 billion is his net worth.

[E]

Yeah, I mean his, the stock, it operates. Although Tesla has this very large, very good business in selling cars, the Tesla stock kind of operates a little bit like a meme stock. It moves around a lot. You know, 5% gain, which, which is where we were earlier in the day, I guess even a little higher, maybe 7%. That's a big move for Most companies, it's not the biggest move in the world for Tesla where you, where you often see these wild swings and often the wild swings are really just about things that Elon Musk has said. You know, if he, if he gets on Twitter and says something really positive about self driving cars or about the Optimus robot, that can sometimes be enough because you have retail traders, remember this is a company with a very large retail shareholder base. They respond to that. And what we've seen over the last week, not just purchase of shares on the open market, which is a big deal, I mean a billion dollars, A billion dollars, that's, that's no joke. Especially given that Elon Musk has spent a lot of time over the last couple of years essentially borrowing against Twitter and, and buying other things and doing, you know, spending time in Washington and buying X and so on. So, so refocusing on Tesla, shareholders are going to like that. And the other thing that I think these kind of retail investors who really like Elon Musk care about is this pay package simultaneously from their point of view, ensures that Elon Musk is going to be locked up at this company for a long time. It also kind of creates a goal that is really audacious and that's something that can maybe help justify the valuation being where it is, which is, you know, it's very, if you compare it to like other car companies, Tesla, you know, has a much greater valuation.

[B]

So maybe different, it's a different planet maybe, but people would say it's a different animal, it's not a car company.

[E]

But anyway, this, this maybe goes would go some way towards justifying that valuation or even growing it it further because it includes huge sales goals for Tesla's automotive business, which has been stagnating of course over the last year or so, as well as goals around self driving cars as well as Optimus and so on. If he, if he really were to get there, I think most investors would say yeah, it's worth the potential trillion dollars that we have agreed to pay him.

[A]

I mean it's a company with a $1.3 trillion market cap and expected revenues. The latest number, the annual figure, we're talking about maybe $93 billion. So you know, price to sales. I don't know, I just kind of think about it. I mean, I get the connection. I mean Tesla without an Elon is not going to be Tesla, right?

[E]

It is, that's true. And I think, and that is what's so interesting about what's been happening since the beginning of the Trump presidency and maybe even a little bit before that, where you have. On one hand, you could make a really strong argument that some of Elon Musk's actions in Washington or his, you know, the things he's putting on his X page, the kind of associations with various polarizing figures which we even saw over the weekend, this rally in the UK that that is hurting the company's business. On the other hand, if you were to remove Elon Musk, if the board were to say, you know, that's it, we've had enough Elon Musk, we need to replace you, that would instantly. I think most people believe most investors, including bulls and bears, the stock would fall because this company is really a bet on this one guy, you know, warts and all.

[A]

Well, warts and all. Yet he's got. We always talk about Space X having leaders, right, that have a really key in what that company does. Yet the visionary, is it safe to say Max, is really Elon, or is it a group of people that are the visionaries?

[E]

I think Tesla, Tesla and Space x are really two different animals because as you said, SpaceX has this kind of deputy in Gwynne Shotwell is the president of the company who has relationships with, with important customers, especially government customers, and a business that is just, you know, sort of more stable in terms of selling launches to the US Government. We've talked a lot on this show and elsewhere, of course, about how dominant SpaceX's position in the launch market. Tesla's a little bit different, right? There are lots of carmakers who are bringing out really good electric cars right now. There are Chinese companies with great autonomous vehicle packages. So, so there's real competition and we've seen, you know, sales go all over the place. And yet there is this kind of crazy out there vision of Tesla as a massive robotics company. And so it's just much more, I think, a speculative bet than, than Space X is for, for the investors who are putting money into this thing.

[B]

And look, SpaceX still a private company, we don't know what's going to happen. Maybe they spin off Starlink, who knows? We'll have to stay tuned to see what happens there. But Max, when it comes to Space X and Tesla and Elon Musk's pay package as it relates to Tesla, is it a loss for Space X? You said when shot Wells, you know, really the glue that holds it together. But Elon is the one who wants to colonize Mars.

[E]

If you watch the interview or listen to the interview that, that Bloomberg did Last week with Tesla's chair, Robin Denholm, you heard her say that they're fine with him working at other companies. There's nothing in this pay package saying you need to spend more time at Tesla relative to SpaceX than you were.

[B]

Before to reach the benchmarks that would pay him $1 trillion or achieve that trillion dollar payday. One would imagine that he would have to spend more time.

[E]

It really just doesn't sound like that's the plan. I mean, the plan seems to be they're going to stick with what they're doing, which is develop, you know, from, at least that's, that's the story they're telling. I agree with you. And I think if you talk to bears especially, they're going to say, look, this plan, these goals are out of this world, they're crazy. It's going to be very, very hard for this to happen without some, some crazy things happening. But probably both internally and externally, the Elon position, the Tesla position is, things are growing great. We're, we're, we're transitioning rapidly to autonomous cars and before you know it, the robot future. There's not only, at least in my reading of this pay package, no requirement that he like spends less time at these other companies. There's really nothing stopping him from, of political activity. At least as a poster, there is this line about winding down his activities. But last week when asked about this, the Tesla chair essentially said, well, he's still allowed to do his personal activities. She wouldn't put any kind of defined timeline or what it would mean. It really seems like he can continue funding candidates and serving as an advocate, because I think, at least my understanding based on that interview and in the proxy, those would consist of Elon Musk's kind of personal political activities. If he were to take another job in government, like that seems less likely, but, but again, there's still a lot of room for him to kind of be an advocate and be vocal, be out there.

[A]

Is it odd that he bought these shares, just got 20, 25 seconds, like, do you think that there was like, hey, we're working on this payback?

[E]

I think he's signaling to investors that he's committed and that's how they're going to see it. It's, I think he's attempting to, you know, if you're cynical, you say maybe he's goosing the stock. If you're not cynical, you say, he just believes in this thing. He believes the stocks undervalued and he's committed and that's what he's signaling like.

[A]

The ultimate insider buying Tesla, right? It's a big sign of confidence. Stock still up about 3%. It was up earlier in the day, up 7 and a half percent. Max Chaff can Bloomberg Businessweek senior reporter thank you so much. This is Bloomberg.

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Stay with us. More from Bloomberg businessweek Daily coming up after this.

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Us live on YouTube. That's not all. We'll get to one more headline in just a second. I want to bring in Brent Schuhty, Chief Investment Officer of Northwestern Mutual Wealth Management. The firm has more than $300 billion in assets under management. Brett, always good to chat with you. So where we want to start? Carol brought this up early this morning. As soon as this crossed the President saying that companies should report earnings every six months, he called to an end to quarterly earnings reports suggesting companies report on a six month basis. He said this change would save money and allow managers to focus on running their companies. But critics argue it would be a step backward and reduce transparency. How would you view something like this as somebody who has to make decisions about investing large sums of money?

[C]

You know, for me, the more transparency the better. And so I prefer having quite a bit of data to look over. And I think it's one of the reasons why the US Actually trades.

[A]

Yeah, I'm with you. Hallelujah. But keep going.

[C]

I mean, there's lots of reasons why the US Trades at a premium to foreign markets, but certainly our transparency here in the United States I think helps that premium grow just a bit. And so that's one of the areas that I'd like to keep as much transparency as possible. That all being said, you know, it's open for discussion, certainly I think about working for a company like the one I work for where we are able to think longer term rather than quarterly just because of how we're designed. And there are benefits that too. But for me, the more the better, at least. And that's where I lean towards, albeit with a discussion that I'm willing to have on the other side of the equation.

[B]

Well, but I think you bring up an important point and that's the difference in different structures, but it also has to do with shareholders. So if you're a shareholder of a publicly traded company, you're an owner in that company. If you work, let's say, for a private company, you don't necessarily need to be communicated with or you. Because there aren't investors in private companies on a wide scale. Right. These are private companies or family owned companies, etc. So, you know, there's a big difference there when it comes to structure.

[C]

Absolutely. And I guess I go back to the more transparency the better. I mean, that's like saying we're going to limit the jobs report for three or four or five months, I'd prefer to see it every month. And so to me, it helps me make better decisions, I think. And certainly I think, you know, one thing investors need to learn to do is not overreact each and every data point. But I'm still in favor of actually seeing that data. And like I said before, I think it's one of the reasons why just all the transparency, all the data in the US that is trusted, is the reason why US stocks, at least one of them, trade at a premium relative to the rest of the world.

[A]

All right, so let's talk about that Fed decision that we get on Wednesday. Brent, how much of the expectations about what the Fed's going to do in September and perhaps in subsequent Fed meetings this year and maybe into 2026. How much of that is already baked into the equity trade?

[C]

I think quite a bit. I mean, to me in this day and age, there seems to be a never ending belief that the Federal Reserve can cut rates and magically save every a cycle. And that's where, at least in the past, the timing is difficult and this time they're risking missing on both sides of their mandate. And so that's where there's quite a bit of tension that I really haven't seen as much in my 31 years of doing this. Now, to where you could paint a picture of a recession, although not many people are predicting one now, which is hard to believe given the fact that the jobs market has weakened as much as it had. You could paint me that realistic picture. On the opposite side, you could paint a picture of inflation continuing to move higher in the not too distant future. And that's where I think those two things haven't really been an issue for markets to have to contend with or the Fed to have to contend with the last 15 or 20 years, which makes it a very interesting Fed meeting. I think they'll cut 25 basis points, but I think they'll pull back a little bit on the narrative of promising anything for the future. And that's where I still think they're going to talk about being data dependent and the risk that inflation continues to move higher because we really haven't tried this level of tariffs in about 80 some years. So we have to go back to 1935. And that's where I think economists on both sides of the equation, there are economists who think it's more of an inflation type of reality. The other side thinks it's more of a slower growth in the near term we've gotten both of them, I guess it's still up for grabs what happens in the intermediate term. And that's where I think they'll leave the door open for flexibility in the future.

[A]

Could some of this be a little messy depending on the outcome of Fed Governor Lisa Cook, whether or not she's actually going to be involved in these meetings. And then we've got got Stephen Myron who's we are expecting some news today about Senate confirmation so that he'll be at that meeting. And you do wonder if he's carrying water for the President as he is the President's nomination to be on the Fed 100%.

[C]

I mean this is where, you know, I think I Think you're a Bloomberg, I think, actually brought it up that we might have the first dissent on both sides. And so there's certainly a divided Fed. I just think that shows you the time period we're in where there's all kinds of change happening all at once.

[A]

Months.

[C]

And I mentioned not seeing tariffs at the 18% effective rate, which is what we're headed to since 1935. That's where I think, you know, economists look at textbooks and they also look at history. And we don't have a long history of what actually happens, especially in an economy that's changed as much as it has since 1935. And I think you're going to see those divisions in the Fed in the meeting on Wednesday.

[B]

Why do you think we haven't seen inflation show up to the extent that many people six months ago thought it would as a result of these tariffs?

[C]

This is where I think the narrative is a little bit wrong. I hear the narrative that inflation hasn't shown up yet. I think inflation is showing up again. It was coming down and now it's going back up. If you think about it, you had importers pull ahead imports, you had consumers pull ahead demand. You had companies build inventories in advance. And that's where the tariffs haven't been on all that long. And the effective tariff rate as of the end of July was 9.7% and we're headed to somewhere around 18%. So I don't think we've seen the full impact yet. And I think the last few inflation reports have shown that tariffs are starting to show up. And that's where I imagine, if you're a company kind of thinking about how dynamic the past four or five months have been, you don't want to raise prices prematurely if the tariffs don't survive or they don't last or something changes because then you risk losing market share. And so you probably hold off as long as possible. When you combine that with other things I've mentioned, that's where I think there's still probably more in front of us. And that's a risk the Fed has to navigate.

[A]

Feel like a reality check. Kind of loving this. Brent, what I want to ask you, we're talking Brad Studi, chief investment officer of Northwestern Mutual Wealth Management Firm has over 300 billion in assets under management. Brent, just got about a minute left here. All right, so tie it all up. What do we do as investors here?

[C]

I hate to sound boring, but you stay diversified. You don't concentrate in any one part of the market. Because concentration to me means that you think you know exactly what's going to happen. And I still think there's lots of uncertainty and there's different paths forward. So I think there are different outcomes that could occur because we are changing how the US Economy operates in regard to the rest of the world and that brings about different risk, which I think you haven't really had to worry about the inflation risk if you're an investor since 050607 beyond 2022. And that's where I just think you need to stay diversified. You need to make sure that you're not taking more risk than what is in your plan. I do think there's opportunities and things where you need to think longer term. I mentioned people not mentioning the word recession now, even though the labor market is pretty weak. I also hear people talking about valuation not being all that relevant anymore. This is where the market trades at 23 times, but there are plenty of markets that don't. I know it's a bad timing tool, but plant the seeds now that you'll be thankful for later in the future. And that's where I still think Small and mid cap stocks provide opportunities for longer term investors and I'd encourage you to kind of wrap that all into a whole portfolio.

[A]

Good stuff. Interesting. Brent. Thank you so much Brent Judy, Chief Investment Officer of Northwestern Mutual Wealth Management. As we mentioned, 300 billion in assets under management joining us from Milwaukee.

[B]

This is the Bloomberg Business Week 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, TuneIn and the Bloomberg Business app.

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