Warsh Set to Face Early Reality Check as Trump’s Man at the Fed

Summary

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Bloomberg Businessweek Podcast Summary

Episode: Warsh Set to Face Early Reality Check as Trump’s Man at the Fed
Date: January 30, 2026
Hosts: Carol Massar & Tim Stenovec
Guests: Michael McKee (Bloomberg Economics & Policy Correspondent), Katie Kaminski (AlphaSimplex Group), John Van Eck (VanEck Funds CEO), Dr. Ellen Wald (Transversal Consulting)

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Overview

This episode centers on President Trump's nomination of Kevin Warsh as Federal Reserve Chair—an appointment likely to have sweeping consequences for US monetary policy, financial markets, and the global economic outlook. The discussion also covers recent volatility in cross-asset markets, reactions to Warsh’s nomination, the interplay of geopolitics and commodities (especially gold, energy, and metals), and the macro environment.

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Key Discussion Points & Insights

1. Kevin Warsh’s Background, Reputation, and Policy Approach

[01:46–06:53]

• Warsh’s Credentials:
  • Former Fed Governor during the financial crisis, with both monetary policy and Wall Street (Morgan Stanley, Duquesne) experience.
  • “He is very qualified…he’s got a good Wall Street background…He is well known, and people feel he’s very qualified.” – Michael McKee [02:19]
• Policy Stance:
  • Known as an inflation hawk, previously argued inflation is the Fed’s top issue.
  • Advocates for reducing the Fed’s balance sheet, opposes forward guidance and short-term forecasting.
  • Warsh believes AI, business investment, and deregulation can drive growth with low inflation, enabling lower rates (“Warshinomics”).
• Challenge:
  • “How much of this is going to be seen as doing the President’s bidding and how much…as warshinomics?” – Michael McKee [02:59]
  • The confirmation process will reveal whether he’s perceived as an independent thinker or a Trump loyalist.

> Quote:

“He doesn’t like using short term forecasts, and he finds it part of the Fed communication problem...he doesn’t like forward guidance either. He finds that less than useful.”
– Michael McKee [06:01]

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2. AI, Productivity, and Inflation: Are the Optimistic Claims Realistic?

[03:29–04:25]

• Warsh echoes arguments that AI can boost productivity and allow for lower inflation and rates.
• Caution from McKee: "We saw this with the PC revolution in the 1990s…productivity went way up, inflation went way down…but the question is…everybody has to figure out how to use [AI] to really increase productivity…that’s the part nobody quite knows yet." [03:36]
• Societal Challenge: If AI replaces jobs, “then what happens to society? That’s another big issue.” – McKee [04:18]

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3. Confirmation Politics and Fed Independence

[04:25–11:12]

• Senate Dynamics:
  • Thom Tillis (R–NC) expected to support Warsh, possibly contingent on dropping the Justice Department investigation into Jay Powell (the outgoing Chair).
  • “There are many ways they could easily say, ‘Okay, we looked at this and it wasn’t a crime’…drop this before it becomes an obstacle to Warsh getting through.” – McKee [05:10]
• Powell’s Future Role:
  • If Powell remains as a Governor after stepping down as Chair, any dissent could undermine Warsh:
    “If he dissents…it's going to carry a lot of weight in the markets and…undermine Warsh.” – McKee [11:25]
• Fed Chair vs. President:
  • Tension is inherent: “The Fed chair is supposed to be looking out for the economy, and the President's going to be looking out for the President—no matter who the President is.” – McKee [09:59]

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4. Market Responses to Warsh’s Nomination

With Katie Kaminski – [06:53–09:39]

• Immediate Reaction:
  • “Huge cross asset selloff day… correlations between asset classes spiking that normally wouldn’t.” – Kaminski [07:17]
• Market Expectations:
  • Markets wanted “pedal to the metal, get lower rates” – a more moderate candidate (Warsh) caused a reassessment and selloff.
  • Metals (especially gold, silver) were trending but experienced reversals.
• Prospect for Bonds:
  • “More uncertainty in bond markets and more volatility and potential for more extreme scenarios.” – Kaminski [09:03]

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5. Will Markets Keep the Fed Honest Amid Political Pressure?

[12:32–14:56]

• Political Oversight:
  • Some, like CA Gov. Gavin Newsom, argue that “the markets kind of keep the president on the straight and narrow” when it comes to Fed independence.
  • Kaminski believes bond markets are “harder for the president to [control]…if we lose the bond market and things get challenging, it can be very difficult.” [13:29]
• Ongoing Volatility:
  • “Just the level of volatility…in some of these commodities…indicates that we’re in a very different regime this year than we have been in recent months.” [14:56]

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6. Gold & Commodities Outlook: Macro & Geopolitical Drivers

With John Van Eck – [18:29–25:28]

• Gold’s Bull Run:
  • “This is the hardest bull market to trade…deep fundamentals are still there…The U.S. has a fiscal spending problem. We’ve weaponized our financial system…the world economy is becoming diverse…countries want gold, something they can hold.” – Van Eck [18:49]
• Shift Away from Dollar Dominance:
  • “It’s the dollar plus gold…China and India don’t want a dollarized economy.” [20:56]
• ETF Flows:
  • Despite the price rally, little US buying until recently; international interest robust.
• AI and Electrification:
  • Massive AI/data demand drives long-term bull case for electricity and critical metals, especially copper and uranium.
  • “Electrification needs the old world…natural gas, gas turbines, construction, all that…If you get China even showing some signs of life, you’ve got good demand for the old world.” [22:34]
• On Warsh’s Nomination:
  • “Basically picked a very competent nominee…If you looked at the financial markets today and I told you which day this week was the Fed governor nominated, you would have no idea…landed the plane perfectly.” [24:35]
• Main Worry:
  • “I’m worried about over fiscal spending in the United States. That’s where we lose confidence in the global markets and that will weaken the dollar again and cause gold to continue to rally.” [25:18]

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7. Energy & Geopolitics: Iran, Venezuela, and Oil Prices

With Dr. Ellen Wald – [28:15–33:23]

• Middle East Tensions:
  • Trump’s threat of a full oil embargo on Iran seen as serious:
    “We’ve, we’ve seen this show before…unless Iran’s oil facilities are targeted, there isn’t much of a threat…But now we are seeing that President Trump is actually putting a kind of oil embargo on the table…people are taking this much more seriously.” – Wald [28:59]
• Venezuela as an Oil Player:
  • Companies cautious—Chevron only able to boost production by ~120,000 bpd over next 2 years; larger increases “going to take a lot longer and a lot more investment.” [30:21]
• Macro Backdrop:
  • Iranian oil off the market could push prices up. China will either have to pay more or import less if deprived of Iranian crude.
  • “[Stock performance is] the impact of higher oil prices…[but] whether this is going to continue…all depends on how the geopolitical situation plays out.” [32:13]

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Notable Quotes & Memorable Moments

• On Warsh’s Independence:

  “How much of this is going to be seen as doing the President’s bidding and how much of it is going to be seen as warshinomics?”
  – Michael McKee [02:59]

• On AI and Productivity Parallels:

  “We saw this with the PC revolution in the 1990s. Productivity went way up, inflation went way down…We just don’t know how long it's going to take [with AI].”
  – Michael McKee [03:36]

• On Powell Staying as Governor:

  “This is not an ordinary governor. This is the guy who was the chair…If he dissents or…objects…it’s going to…undermine Warsh.”
  – Michael McKee [11:25]

• On Market Response:

  “The market was really waiting for more of a pedal to the metal, get lower rates…a more moderate candidate ironically has caused a sell off…”
  – Katie Kaminski [07:56]

• On Gold as Global Reserve Shift:

  “It’s the dollar plus gold…Countries want [gold] because…it's untouchable…It's a big paradigm shift.”
  – John Van Eck [20:56]

• On Geopolitics and Oil:

  “President Trump is actually putting a kind of oil embargo on the table…and so I think people are taking this much more seriously.”
  – Dr. Ellen Wald [28:59]

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Timestamps for Key Segments

• Kevin Warsh’s Background, Policy, and Independence: [01:46–06:53]
• AI, Productivity, and Inflation Dynamics: [03:29–04:25]
• Politics of the Confirmation – Senate & Powell’s Role: [04:25–11:12]
• Market Response and Bond Market Implications: [06:53–09:39]
• Markets as Checks on Political Power: [12:32–14:56]
• Gold, Commodities, and the Macroeconomic Regime: [18:29–25:28]
• Energy Geopolitics and Market Outlook: [28:15–33:23]

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Summary Table

| Topic | Featured Speaker(s) | Key Points | Timestamp | |----------------------------|----------------------|-------------------------------------------------------------------------------------------|-------------| | Warsh’s Profile & Nomination | Michael McKee | Qualified, independent? Hawks’ background, “warshinomics” vs. “Trump’s man” | 01:46–06:53 | | AI & Productivity Hopes | Michael McKee | Parallels to PC revolution, real impact unclear, risk of societal disruption | 03:29–04:25 | | Confirmation Politics | M. McKee, Hosts | Senate maneuvers, Powell’s influence post-chair, Fed-chair–president clash | 04:25–11:12 | | Markets’ Initial Response | Katie Kaminski | Cross-asset selloff, disappointment over moderation, volatility in metals & bonds | 06:53–09:39 | | Market Checks on Politics | Katie Kaminski | Markets may reset expectations, keep Fed anchored, bond market as last backstop | 12:32–14:56 | | Gold & Commodities Outlook | John Van Eck | Bull case: fiscal issues, de-dollarization, electrification, AI, global flows | 18:29–25:28 | | Oil, Energy, Geopolitics | Dr. Ellen Wald | Iran embargo threat, Venezuela limitations, Chinese demand, macro risks for energy prices | 28:15–33:23 |

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Conclusion

This episode provided a rich, nuanced look at how US monetary policy, political maneuvering, technological change, and global geopolitics are colliding in real time as Kevin Warsh stands poised to take on the Fed’s top job. Guests offered well-reasoned skepticism about optimistic AI-driven growth, highlighted the sensitivity of financial markets to both policy and geopolitics, and mapped out a world where gold and energy remain core to strategic positioning—both for countries and for portfolios.

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Transcript

[Host 1]

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[Announcer]

Is Bloomberg businessweek Daily, reporting from the magazine that helps global leaders stay ahead with insight on the pie, people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg businessweek Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg Radio.

[Host 2]

With more on Kevin Warsh, Bloomberg TV and Radio International economics and policy correspondent Michael McKee joins us here in the Bloomberg Businessweek studio. He served on the Fed's board of governors during the financial crisis. He's advised President Trump on his economic policy in the past. He's been a hawk. What do we know about Kevin Warsh in 2026?

[Michael McKee]

Well, we know he's straight out of central casting.

[Host 2]

We've heard that a couple times from the president.

[Michael McKee]

The most important thing but you remember the president chose Jay Powell because Janet Yellen was too short and didn't look like a central bank.

[Host 1]

This matters to the President.

[Michael McKee]

This matters to the president. I mean, why would you bring it up? Anyway, Kevin Warsh does have the monetary policy background and he's got a good Wall street background. So he's well known there because of course, he started at Morgan Stanley before he went to the WAL White House for George W. Bush. And then he's been working for Duquesne, for stan Druckenmiller for 15 years now. So he is, he is well known and people, people, he has put it this way, he's very qualified. Now the issue is how does he get the things done that he has always thought needed to be done because Donald Trump put him up. In other words, Warsh has been a hawk. But, but he has also argued that inflation is the number one issue for the Fed. They've got to keep inflation down. And now he's sort of adopted the argument that Chris Walsh been using that AI business investment deregulation going to make the economy grow faster with lower inflation and therefore you can have lower interest rates. But how much of this is going to be seen as doing the President's bidding and how much of it is going to be seen as warshinomics as somebody put it today. But we're going to have to wait and see how, how he's able to sell this in public.

[Host 1]

Well, let's go to that argument, Mike, is that right? Do we know yet that it's going to be okay?

[Michael McKee]

But in theory it should be. We saw this with the PC revolution in the 1990s. Productivity went way up, inflation went way down and we could certainly repeat that. We just don't know how long it's going to take. There's a lot of AI out there and it's being adopted more quickly than the pieces and electricity 50 years. But, but the question is not so much that everybody's using it, but everybody has to figure out how to use it to really increase productivity and to save money. And so that's the part nobody quite knows yet. The other converse side of that is if we don't need you because I can do your job, then what happens to society? And that's another, that's another big issue.

[Host 2]

You know, I want to go back to what Thom Tillis said, Republican senator who's on who's, you know, an integral part of making sure that whoever is nominated becomes Fed chair or doesn't become Fed Chair on the Senate Banking Committee. Does, does he like, does he actually make it through?

[Michael McKee]

Oh, I think he makes it through.

[Host 2]

But without Thom Tillis's support.

[Michael McKee]

I think he'll get Thom Tillis's support.

[Host 2]

Which would be as a result of the DoJ dropping its investigation into Jay Powell.

[Michael McKee]

Yes. Now who's investigating Jay Powell? Judge Jeanine, the TV judge that Trump appointed as a U.S. attorney in the District of Columbia. And what did she do? She issued a subpoena for records of the Feds buildings. She hasn't yet. As far as we know Gone to a grand jury. She hasn't sought an indictment. There are many ways they could easily say, okay, we looked at this and it wasn't a crime. You know, the President can still say, as he did today, that, you know, somebody made a profit off this is, this is really bad management or whatever and they can, they can drop this before it becomes an obstacle to war. She's getting through.

[Host 1]

We want to bring Katie Kaminsky in, but before we do that, go do some of the things that Kevin Warsh. Right. As when he was at the Fed, as the Fed governor. Reluctant. Reluctant at times. Right. To cut rates.

[Michael McKee]

Yes.

[Host 1]

Now argues the Fed should reduce the size of the balance sheet. And he advocates changing how the Fed thinks about inflation and forecasts. So those are some of the key components that will be guiding him if indeed he is the next Fed chair.

[Michael McKee]

He doesn't like using short term forecasts and he finds it's part of the Fed communication problem. He says, you know, every time something, some new indicator comes out, then you have half the Fed run out and make a speech and say they're tilting this way and then they tilt the other way. And so he doesn't like that and he doesn't like forward guidance either. He finds that less than useful because you get locked into something that. But you said necessary. Yeah, exactly.

[Host 1]

We've all been in relationships and probably.

[Michael McKee]

One of the more important things for Wall street is what does he do about the size of the Fed's balance sheet? His argument is that QE was necessary in the great financial crisis, but then they should have stopped. Instead they kept going and then they did it again during COVID and now you have this big balance sheet and the Fed can do its job without that. There's a lot of aspects to this, but it is going to be something that Wall Street's going to be concerned about going forward.

[Host 1]

Sit tight, Mike. We want to bring Katie Kaminsky, who's been patiently waiting by she's chief research strategist, Portfolio manager at Alpha Simplex Group with us from a very chilly Boston. I know because my daughter's there and she says it's cold like New York. Katie, what's more, chilly Boston or some of the market reception that we got around? Kevin Warsh Although I have to say I felt like it wasn't very clear cut in terms of the market reaction, actually.

[Katie Kaminsky]

I mean, from our perspective, it's very, it's been a huge cross asset sell off day. Yeah, we've seen, we've seen sort of such huge moves in the metals, it's sort of like this dollarization narrative that sort of reverted that everyone was piled into across multiple asset classes. So you're seeing correlations between asset classes. So spiking that normally wouldn't today. So it's actually quite a big cross asset class day today.

[Host 2]

So how would you characterize, if you were to just look at the entire market response, cross asset, how would you characterize the response to this nomination?

[Katie Kaminsky]

So the interesting part is I would characterize it as the market was really waiting for more of a pedal to the metal, get lower rates and sort of this high octane approach. And I think a more moderate candidate ironically has caused a sell off in the sense of that theme that we were thinking the market's moving in that direction. But it was pretty much due for a sell off. If you think about it, if you look particularly in the metals, I mean that has been a extremely trendy asset class. And you know, so for us it's still just sort of maybe the top of a trend that's been very extended.

[Host 1]

Katie, what's your read on and we just, we had some visuals up there about Kevin Warsh and how he was passed over in 2017 when President Trump nominated Fed chair Jay Powell who were sued, assuming he's going to stay on as a governor right after his chair chairmanship is over in the spring. What kind of dynamic does that create, do you think, potentially in your view? And might it create some tension that plays out in financial markets, maybe in the treasury trade?

[Katie Kaminsky]

I mean, I definitely think that all eyes have been on the Fed, on independence of the Fed, on disagreements, on dissents. So I think for us it's been the hardest asset class to trade. Is it just sort of goes in one direction and then reverts? Because it's very unclear what all of this means. So I think my general answer would be that we're going to have more uncertainty in bond markets and more volatility and potential for more extreme scenarios. A little bit less of a trendy environment for trading bonds, which is tricky for us.

[Host 2]

I want to bring Michael McKee back into the conversation. Mike, I want to go back to that, that first message from the President this morning and the message on true social on top of everything, he is central casting and he will never let you down, the never let you down part. Is it possible for a Fed chair to do his or her job without letting down the president?

[Michael McKee]

Probably not because the incentives are different for the two of them. The Fed chair is supposed to be looking out for the economy and the President's going to be looking out for the President no matter who the President is. But does, does it have to be a major clash? A lot of that depends on what happens and the externalities that come in that you can't predict.

[Host 2]

It only took a year for the President's first nominee and the first, you know, when he passed over Warsh in his first term to go to Powell. To go to Powell and then after a year they really, well, they were.

[Michael McKee]

Still, they were still at that point trying to figure out how to get out of the zero bound range because they've been in it for so many years and nothing was happening and they to raise rates and the President didn't like that because he didn't like higher interest rates. And then the Fed stopped because of the little temper tantrum that the market side had and then it was fine again for a while and now we've got rates not as low as the President wants. So he gets mad. But that's going to happen. It's happened throughout history with Presidents and Fed chairs and they just have to basically take it like Jay Powell has, but still do what needs to be done.

[Host 1]

Bottom line, what will be the role of Jay Powell if he stays on as a governor? As we said Kevin Wash passed over in 2017. Do you think it's going to be comfortable? Jay will say what he wants to say. Like I'm just curious the dynamics, it's.

[Michael McKee]

Going to be very interesting because this is not an ordinary governor. This is the guy who was the chair that everybody expected and looked at, looked towards. So if he stays on, it's going to be difficult because if he dissents or if he objects to something that is being done in monetary policy, it's going to carry a lot of weight in the markets and it's going to to a certain extent undermine Warsh. So the question is, does Powell want to be in a position that he might have to do that he's got to figure out if war is going to be good enough for the Fed that he can escape. But the other thing is this investigation has to end and the timing has to be right so it doesn't look like they're buying off Powell and Powell is being bribed to leave. So, so the sooner they get rid of the investigation, the better if they want Powell out. But I can't believe that the President would do anything that would keep Powell in his seat longer, especially if they don't get, they can't get Warsh confirmed and can't get him put in there because then that would be the president's fault. And he's got Jay Powell, who he hates, still there because he didn't act.

[Host 1]

Oh my God. It's like a, I don't know, reality show to some extent, the Fed reality show. Michael McKee, thank you so much. Really appreciate it. Mike's going to be having an interview with Stephen Myron of the Fed a little bit later on at 3pm Wall street time. So be sure to check that out. We will be carrying that. Katie Kaminsky still with us. Katie, I do think about something California Governor Gavin Newsom told our Bradstone and obviously a Democrat, he's a vocal opponent or critic, if you will, to the president, not shy about stressing his opinion. Having said that, he made a point that there's no rule of law in this administration. Again, Gavin Newsom's opinion. But he said the markets kind of keep the president on the straight and narrow. So I'm just curious if you think that's what the bond market believes, that we will have an independent Fed, that it's going to be very careful because the president understands the importance of financial markets.

[Katie Kaminsky]

I mean, I would definitely say that today's confirmation shows a little bit of that or at least this particular nomination because a lot of people were expecting the extreme scenario, a big shift in general direction. And I think that's where, you know, the market must be playing some role of that because the bond market is one of the few places that's harder for, for the president to and really if we lose the bond market and things get challenging, it can be very difficult.

[Host 2]

Was that at risk of happening in this process at all?

[Katie Kaminsky]

I mean, I think we have seen yields going a little bit higher recently. I don't know if that's a more pro growth story or whether or not at some point we might be concerned about, you know, vulnerability of US Bonds. But I do think it's always a risk in this scenario where the Fed has been, you know, so conflicted and also where it's really unclear where that's going. So I think we're watching it. It hasn't moved out of range, but you definitely see indications.

[Host 1]

Just 30 seconds, Katie. I mean, it is kind of confusing. The dollar trade, as you said, metals, gold, silver have been on a tear. They're dropping back even just looking. And I realize it's the end of the month, but even the equity trade, you know, we saw some buying over the last half hour. It doesn't feel like narratives and trends are yet quite forming or quite formed yet?

[Katie Kaminsky]

Yeah, I'd say. I mean today isn't over yet and yesterday was also a weird day like this where you had copper moving massively as well. I think just the level of volatility that you're seeing in some of these commodities, commodity assets is concerning and it's something that indicates that we're in a very different regime this year than we have been in recent months. And I think we'll have to see sort of if this is the top or if we're going to continue to see this type of volatility around commodities going forward.

[Host 1]

It's bottom line. Really interesting to say the least. Hey Katie, thank you so much. Stay warm. Have a good weekend. Katie Kaminsky She's Chief Research Strategist, Portfolio Manager at Alpha Simplex Group.

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[Host 2]

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[Host 1]

Joining us once again in studio.

[Katie Kaminsky]

Hello.

[Host 1]

Hello.

[John Van Eck]

Good to see you.

[Host 1]

Great to see you. Interesting. Gold funds, I mean gold and silver. The move that we're seeing today, gold funds, it's in your DNA, has been for decades. What do you make of kind of the trade that we're seeing here? Is it just all about what we're seeing in the, in the dollar trade coming off of the Fed announcement?

[Michael McKee]

Yeah.

[John Van Eck]

I mean in the short term, I say this is the hardest bull market to trade, the gold bull market. So in 2023, we started pounding the table to buy gold. No one wanted to listen. Right. Because gold sort of had a horrible decade after the financial crisis and now it's run up so much and people will cast. Our clients were like, I missed it, I missed it, I missed it. Right. And then you had this technical blow off and it's going to correct. Right. We think it could correct to 3,800, you know, which would be the 200 moving average day support, it's down 15% now. I think it's in a multi year bull market. Don't focus on all the short term, but people are going to get psyched out and when it does correct to 3800, no one's going to be talking about gold and it's going to be impossible to convince them to buy. But the deep fundamentals are still there. And what are they? They are that the United States has a fiscal spending problem. We've talked about that before. We don't need to get into the details. We've got unpredictability on tariff policies and a bunch of foreign policy Maybe even military action in the Mid East. Right. All that's happening and we've weaponized our financial system or we' weaponize the dollar. Right. When we took Russia's reserves during the Ukraine invasion. So people want gold, something they can hold. Countries want that. And the developed markets who are getting richer year after year, month after month are buying more gold. So that's why we see this a long ways to go.

[Host 2]

Why are, why is gold the right asset to hold in an environment like as you describe?

[John Van Eck]

Well, countries want it because if they put it in their vaults and no one, it doesn't matter what the current US President thinks about them, it's untouchable. And it's Also, you know, 100 years ago the world's financial system centered around gold. And my argument is the world economy is becoming diverse just like it was 100 years ago. I like to talk about the rise of India a lot. Just it's going to be as important in the next 10 years as the.

[Host 1]

Rise of China just signing a big trade agreement.

[John Van Eck]

Right, right. With Europe. And they're not dollarized economies, so what are they going to buy? Gold is the world's leading currency. It's a big paradigm shift.

[Host 1]

So is the era of the US Dollar over.

[John Van Eck]

It's the dollar plus gold. And you know, again, if you're looking at India, you're looking at China. They don't want a dollarized economy. Right. And what's their second best China would.

[Host 1]

Like not like it either. And they've been trying, right. To get their own currency, be much more of a global currency. But it's been, I don't think anyone's.

[John Van Eck]

Going to win as the next global currency. I think it's going to be gold by default.

[Host 1]

Interesting. Tell me about the flows that you've seen in your gold funds. And then we want to expand out to some of your other funds. Is this money been flowing in like crazy?

[John Van Eck]

So that's part of my thesis. Not a lot in context. So last year there was very little gold buying in the US Gold was going straight up basically. Very little gold buying until the second half of the year. There's been a ton of bullion buying in the last month or so in our gold shares fund. No one talks about gold shares. There were net redemptions last year, about $4 billion. And we just got inflows yesterday which. But in the ETF world sometimes you get inflows when people want to short it. And I think that was a very smart investor worried about the sell off.

[Host 2]

Well, let's transition a little bit. Gold is certainly of interest to us, but energy is also of interest to us. I was actually thinking about this earlier today. Not just the fact that we talk about energy demand when it comes to AI and data centers, but also just the cold weather that we've been seeing. And you've seen commodities rally as a result of some of that. When it comes to AI, when it comes to the trade related to AI, you're very bullish on uranium, you're very bullish on other ways to power the US Moving forward. Where are you seeing those flows and why?

[John Van Eck]

Right. Well, we've got two things going on. We've got this multi year shortage of electricity in the United States driven by AI data center demand. So everyone who's moving towards that electricity trade is getting rewarded in their equity prices. And then on top of that, we had some news out of China, maybe it's not real, that they may do some stuff to alleviate their housing problems if they do that. Right. And they call it Dr. Copper. That's the next metal I would focus on, Tim. And Dr. Copper is like a sign of the health of the economic growth. And I mean, copper has also had a little bit of a crazy run up. But I think the fundamentals are what you talked about. The new world of AI, electrification needs the old world, it needs natural gas, it needs gas turbines, it needs construction, all that kind of old world stuff. And if you get China even showing some signs of life, you've got a good economy and good demand for the old world.

[Host 1]

It's interesting though, I thought about that move with China like to prop up housing and that can be helpful. But it just to me also points to the troubles that they continue to have in their economy. Right. Domestically. But you think that these are fixes that lead to a better domestic economy in China or what?

[John Van Eck]

Well, I think China's been saying I want to lead in all the technology areas and I don't really care about housing. Right. I mean, effectively. And if the private developer, developers go bankrupt, so what I think that's a reasonable policy, I guess. But I mean, I think if they're kind of sick of it and they need their consumer to get going, I mean, Trump is going to meet with Xi in April and I think part of the narrative has got to be China's got to do something to boost their domestic consumption, you know. But you know, that's Yan's entirely out of the blue guess as to the narrative that might be appearing.

[Host 1]

I just feel like we've been talking about that for a long time. And they've been doing different things and I understand their frustration. But tweaking, tweaking, not enough, right?

[John Van Eck]

Not enough.

[Host 2]

Jan, before we let you go, we got to have you weigh in on Kevin Warsh and the president's pick again. He's the nominee. He's not yet Fed chair. Your view there.

[John Van Eck]

Scott Besant landed the plane cleanly, right? They determined about six to nine months ago they wanted a less aggressive Fed. They wanted fewer economists, a smaller building and a smaller balance sheet. They figured out that policy change. He articulated it really clearly. He wrote articles, Scott Bessant did. So they, you know, say basically picked a very competent nominee. They had four competent choices and they picked one. And if you looked at the financial markets today and I told you which day this week was the Fed governor nominated, you would have no idea. Right? It's he's landed the plane perfectly independent Fed totally.

[Host 1]

No, no worries.

[John Van Eck]

I'm worried about over fiscal spending in the United States. That's where we lose confidence in the global markets and that will weaken the dollar again and cause gold to continue to, to rally.

[Host 1]

Well, you were the perfect guest to have we were like, oh my gosh, John, take care. Thank you so much. John Van Eck, he is chief executive officer of Vaneck Funds, joining us right here in studio.

[Host 2]

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

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[Host 1]

All right, we wanted to get into the oil patch. And back with us to talk all things oil is Dr. Ellen Walt. She's president of Transversal Consulting. She is also senior fellow of the Atlantic Council. Also author of Saudi Inc. Joining us from Boca Raton, Florida. Ellen, so good to have you back with Tim and myself here on Bloomberg. We do want to talk earnings, but I think we're more intrigued by what's going on geopolitically right now. And what that means is maybe longer term for the energy trade. Iran has said it was prepared for talks with the US If President Trump ends his threats against the Islamic Republic and warned military strikes could trigger a wider conflagration. Conflagration in the Middle East. What is the relationship between that and oil prices?

[Dr. Ellen Wald]

Yeah, I think that what we're seeing now actually reflects more President Trump's threat to essentially institute some kind of oil embargo against Iran. And that's why we're actually seeing oil prices rise. You know, we've, we've, we've been, you know, we've seen this show before. We've had, you know, US Strikes against Iranian nuclear facilities in Iran and oil prices have barely budged. Because really, unless Iran's oil facilities are going to be actively targeted, there really isn't much of a threat to, you know, the flow of oil in and out, the flow of oil out of, out of the Persian Gulf. But now we are seeing that President Trump is actually putting a kind of oil embargo on the table that he's sending, sending ships there. We've seen with Venezuela that there is a willingness to actually commandeer ships carrying Venezuelan oil. And so I think people are taking this much more seriously.

[Host 2]

Yeah.

[Dr. Ellen Wald]

Then they have other, other issues regarding Iran.

[Host 2]

So, so you mentioned Venezuela and that's exactly where I want to go. The relationship between potential flare up in Iran and the relationship between US Companies going after oil in Venezuela, does it change the calculation that some of the super majors are going to make in terms of going to Venezuela?

[Dr. Ellen Wald]

Well, I think that if Iranian oil is somehow struggling soft, if the flow of Iranian oil is up now, Iran isn't, isn't exporting nearly as much oil as it has the potential to export, but it is exporting a significant amount to the countries that buy its oil, particularly China. And so that would absolutely increase oil prices. Now, if you have Iranian oil off the table and you've got Venezuelan oil, I can see why some companies would look at that and say, hey, you know, the forecast, forecast for oil prices in 2026 is probably too low and isn't reflecting this new geopolitical reality. But I don't think that they can take that to the bank right now. So you've definitely still got a lot of skepticism in terms of how much it's going to cost to go into Venezuela and to invest there to really increase oil production. And look at Chevron, okay? Chevron is the only American company that's still operating in Venezuela and it produces, produces so little oil there that they've said they could increase production there by 50% over the next, within the next 18 to 24 months. So that's two years and that would only be about 120,000 barrel a day increase. So we're not talking about a huge amount of oil. To increase Venezuelan oil above that amount is going to take a lot longer and a lot more investment.

[Host 1]

Ellen, one thing I want to mention. Chevron's up 15% here in January. We know they reported results. Exxon is up about 17% here this month. What is the general Macro environment. I mean, it sounds like Venezuela not really going to be a factor for a while and I'm not quite sure how we factor in Iran since, you know, so does anything really largely change when it comes to the macro backdrop for the energy trade, oils specifically?

[Dr. Ellen Wald]

So I think that Iran really has the most impact in terms of overall oil prices. If for some reason Iranian oil is off the market or off the black market, then that could increase pressure on the non black oil market or the regular oil market. In other words, China is going to need to either decide to decrease the amount of oil it's importing because its source of Iranian oil is gone, or it's going to decide it's going to replace that with, with non sanctioned oil and it's going to have to pay more for that. And so that will definitely increase essentially increase demand on the non sanctioned oil market. And so that could definitely lead to an increase in prices than what we previously expected. And then when it comes to Venezuela, I think, you know, when you're looking at Exxon and Chevron, we're definitely seeing the impact of higher oil prices this quarter on, on you know, how their stock price is going and that will, that should come out in their first quarter earnings eventually. But the question of whether this is going to continue for the rest of the year is really remains to be seen because it all depends on how the geopolitical situation plays out.

[Host 1]

So much could happen. Dr. Ellen Wald over at Transversal Consulting, thank you so much. Really appreciate it.

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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. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

[John Van Eck]

Foreign.

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