Bloomberg Surveillance TV: August 11th, 2026

Summary

Bloomberg Surveillance TV: August 11th, 2026 – Episode Summary

Overview

This episode of Bloomberg Surveillance, hosted by Jonathan Ferro, Lisa Abramowicz, and Annmarie Hordern, covers a dynamic landscape across finance, economics, and geopolitics, anchoring discussions in leading macro events. The show features in-depth conversations with market strategists and policy experts, focusing prominently on the complex impact of AI-driven capital demand on markets, the persistent inflation challenge, U.S.-Iran geopolitical tensions and their economic fallouts, and the turbulent outlook for U.S. midterm elections with a particular lens on gridlock and its implications for markets and policymaking.

---

Key Segments and Insights

1. AI Investment and Monetary Policy Tensions

Guest: Marvin Lowe, State Street
Timestamps: 02:20–07:56

• Tech Capital Demand and Yields:

  • Discussion centers on the wave of big tech debt issuance, primarily driven by aggressive AI infrastructure buildouts.
  • Marvin Lowe argues this “incredible demand for capital” is pushing up Treasury yields and adding to inflationary pressure.
    • “We have to look at inflation through the chip lens… the supply for chips is being affected by this capital raise and this data center build out.” (Lowe, 02:51)
  • AI investment is now “predicated on growth outperformance,” becoming a critical tailwind for economic data.

• Implications for Policy:

  • The panel discusses whether monetary policymakers should respond more aggressively given this capital flow, since high issuance in debt and equity markets suggests financial conditions aren’t tight enough.
    • “This inflationary impact from AI has legs and is going to last for a longer period of time.” (Abramowicz, 03:38)
  • Lowe notes that standard data (like CPI) is “backwards looking,” and capital demand must be considered holistically (04:05–04:51).

• Fed Policy and Long-Term Yields:

  • Debate over whether Fed Chair Kevin Warsh can credibly argue AI is disinflationary, with Lowe skeptical that productivity gains will materialize quickly enough to offset near-term inflation (05:29–05:46).
  • Monitoring the “magic number” of 5% on the 10-year Treasury as a level that could constrain AI-driven capital exuberance (07:14–07:28).

Notable Quote:

“Interest rates are supposed to be set where the amount of capital is equal to the availability of savings. And from that perspective, the demand for capital certainly are at levels that we haven't seen in quite some time.”
– Marvin Lowe (04:05)

---

2. Geopolitical Tensions: U.S.–Iran and Oil Markets

Guest: General Karen Gibson, Academy Securities
Timestamps: 10:16–17:11

• Trump’s New Demands and Market Reaction:

  • President Trump’s call for Iran to pay reparations for past attacks escalates diplomatic tension, pushing oil prices higher.
    • “Oil gaining as President Donald Trump makes new demands for Iran, saying reparations… will be part of any future negotiations with Tehran.” (Abramowicz, 10:35)

• Multilayered Negotiations:

  • Talks unfolding on two fronts: Oman–Iran (administration of the Strait of Hormuz) and U.S.–Iran (requiring U.S. concessions).
  • Iran holds out for major U.S. concessions, such as military withdrawal or reparations—deemed “simply not acceptable” by the U.S. side (11:16–12:22).

• Iranian Economic Pressures:

  • Iran is under significant economic and military pressure, but U.S. patience is constrained by domestic politics, especially energy prices.
    • “The Iranian economy… is really being hammered by this. The blockade doesn't help, the sanctions don't help.” (General Gibson, 12:30)

• Security/Escapism Anecdote:

  • Washington Post report: Secret service used an airport catering truck as a decoy for President’s departure from Turkey due to assassination fears—described as “unprecedented” and “a pretty successful evasive measure.” (13:17–14:28, General Gibson)

• Why the U.S. Is Isolated:

  • The framing of the dispute as Iran vs. U.S. rather than Iran vs. the world undermines diplomatic leverage—experts advocate for a broader multilateral coalition, similar to the JCPOA era (14:41–16:10).

• Regional Dynamics:

  • Saudi–Houthi conflict in the Red Sea adds complexity; recent attacks prompt more proactive Saudi responses (16:10–17:11).

Memorable Moment:

“Escaping in a food truck that nobody noticed is, is a pretty, pretty successful evasive measure.”
– General Karen Gibson (13:49)

---

3. Midterm Elections, Policy Gridlock, and Market Impact

Guest: Livy Kendrell, Pimco
Timestamps: 19:02–25:27

• Split Congress Still Likely:

  • Base case remains a divided Congress, with neither party likely to have a true governing majority through 2027.
    • “Regardless of the outcome, neither party is likely to have a real governing majority come 2027. Yay, more gridlock.” (Abramowicz introducing Kendrell, 19:02)
  • Markets tend to prefer gridlock, seeing it as reducing unpredictable policy swings.

• Fragmentation Within Parties:

  • The Democratic “family fight” (progressive vs. establishment) has moved from safe districts into critical Midwestern races (Michigan, Wisconsin, Minnesota), potentially shaping both midterms and the 2028 presidential race (19:28–21:06).

• Wave Election Prospects:

  • Even in a Democratic wave, redistricting and narrow state-level margins cap majorities, making significant policy progress unlikely (22:02).
    • “A great night for them [Democrats] would be a…plus 10 majority, plus 15 majority. We’re not talking about…the plus 40 majority… in other sort of midterm elections.” (Kendrell, 22:02)

• Is Gridlock Still “Good” for Markets?

  • Lisa Abramowicz challenges the conventional wisdom due to today’s sharply polarized, dysfunctional Congress.
    • “Is gridlock still good when people can’t even be in the same room together and talk?” (Abramowicz, 23:28)
  • Kendrell concedes that real market stress will arise when Congress needs to act, particularly on fiscal issues (deficit, Social Security, healthcare) as the 2031 Social Security Trust Fund inflection point nears (23:48–24:54).

• Interest Rates and Economic Headwinds:

  • Ongoing higher borrowing costs amplify pressures, especially as gas prices above $4/gallon become a key headwind for the incumbents.
    • “Gas…the price of gas really does get into the zeitgeist of voters. And so with that above $4… I do think that's going to be a headwind for the president and the president's party.” (Kendrell, 25:01)

---

Notable Quotes & Timestamps

• On Tech-Driven Capital Demand:

  “We have to look at inflation through the chip lens.”
  – Marvin Lowe, State Street (02:51)

• On an Unprecedented Security Measure:

  “Escaping in a food truck… is… a pretty successful evasive measure.”
  – General Karen Gibson (13:49)

• On Entrenched Gridlock:

  “Honestly, a great night for them would be…a plus 10 majority, plus 15 majority…That is just even if that comes to pass…more likely is that Democrats…have a five seat majority in the House and then maybe Republicans have a 50, 50 Senate. And that is like neither party…has a governing majority.”
  – Livy Kendrell, Pimco (22:02)

• On Gas Prices Shaping Voter Mood:

  “Gas…the price of gas really does get into the zeitgeist of voters. And so with that above $4…that’s going to be a headwind for the president and the president’s party.”
  – Livy Kendrell, Pimco (25:01)

---

Additional Highlights

• Bloomberg Tech Minute:
  • DoorDash is rolling out FAA-approved delivery drones to cut delivery costs and times, minimizing reliance on human couriers for remote orders (08:35, 17:20).
• Humorous Aside:
  • The use of decoys for presidential security sparks panelist speculation about the next great Washington D.C. spy movie storyline (14:41).

---

Conclusion

This episode provides a comprehensive snapshot of intertwined developments across the economic, political, and geopolitical landscape:

• AI and new tech buildouts are creating persistent upward pressure on yields and inflation, challenging central bank narratives.
• U.S.–Iran relations remain fraught, with energy markets highly sensitive to diplomatic brinksmanship and regional instability.
• The U.S. political outlook is increasingly defined by gridlock and party fragmentation, which, while historically positive for markets, presents new challenges in moments of fiscal or security stress.
• Lively panel exchanges and expert guests deliver crisp, practical insights—making the episode essential listening for those tracking the pulse of “markets, economics and geopolitics.”

---

For further details and ongoing live coverage, watch Bloomberg Surveillance TV weekday mornings or subscribe to the podcast on your favorite platform.

Transcript

[Creative Planning Announcer]

Salary bonus 401k stock options investment accounts if your wealth manager only sees one piece of the puzzle, who's connecting the rest? Creative Planning's integrated team of specialists coordinates all of it so everything fits together. Creative Planning where wealth works together creativeplanning.com BSP Amazon Pharmacy presents Painful Thoughts of

[Casual Male Speaker]

course I see my co worker in

[Casual Female Speaker]

line at the pharmacy. Can you tell I'm picking up prescription hemorrhoid cre?

[Creative Planning Announcer]

I'm probably standing weird.

[Livy Kendrell]

Why is he smiling?

[Casual Male Speaker]

He knows he's gonna call me Hemroid Lloyd tomorrow.

[Casual Female Speaker]

I know it.

[Casual Male Speaker]

I gotta quit my job.

[Creative Planning Announcer]

Next time, avoid awkward conversations and get fast free delivery with Amazon Pharmacy Healthcare just got less painful.

[She's Birdie Announcer]

This episode sponsored by She's Birdie. You lock the hotel room door, then check it again. And maybe one more time because even the nicest room can feel unfamiliar at night. That's why She's Birdie created Birdie Box with She's Birdie. You can bring peace of mind with you. Birdie Box is a portable travel door alarm for hotels, dorms, Airbnbs and anywhere you stay away from home. Just attach it to the door frame, switch it on and if someone opens the door, Birdie Box blasts a loud siren and flashing alarm to alert you and everyone nearby. Because the best part of travel isn't worrying, it's sleeping soundly. Birdie Box from She's Birdie locking in peace of mind wherever you stay. For safer, more confident travel, visit she'sbirdie.com that's s h e s b I r d I e.com

[Carol Massar]

Bloomberg Audio Studios podcasts Radio News.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro along with Lisa Abramowicz and Annmarie Horton. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from 6 to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app To begin

[Lisa Abramowicz]

this hour with stocks kind of looking for direction as the flood of big tech debt keeps upward pressure on treasury yields. Marvin Lowe of State street writing While recent data has thrown a big bit of cold water on the strength of the economy, the strong demand for capital has created strong need for tighter financial conditions. Marvin joins us now for more. Marvin, great to see you. Thank you so much for being with us. Can you explain that why all of the tech issuance is actually a requirement for tighter financial, tighter monetary Conditions in and of itself.

[Casual Male Speaker]

Yeah, absolutely. I mean, Harry mentioned kind of the supply and demand aspect of it and you know, there is a supply issue that is arising ultimately with all of this AI build out. You know, ultimately, you know, we look at inflation through the oil lens and that makes clear sense. But also we have to look at inflation through the chip lens which is the demand for chips and the supply for chips is being affected by this, this capital raise and all of this data center build out. So it is, it is ultimately interrelated. Ultimately growth outperformance this year has very much been predicated on the fact that we've got all of this investment within the, the GDP stack if will and there is no let up in that demand at this point.

[Lisa Abramowicz]

So you're saying that regardless of what happens with the underlying economy or core inflation away from some of these key components, that monetary policymakers should be looking at the rapid record pace of issuance in the debt markets and frankly increasing activity in the equity markets as a sign that they are not restrictive enough, that this inflationary impact from AI has legs and is going to last for a longer period of time.

[Casual Male Speaker]

Yeah, absolutely. I mean, I wouldn't say that we can ignore the data, but I think that we have to take the data within the context of, you know, everything that we're saying in terms of the capital demand in this environment. You know, there, there's economic theories which say that, you know, interest rates are supposed to be set where the amount of capital is equal to the availability of savings. And from that perspective the demand for capital certainly are at levels that we haven't seen in quite some time.

[Annmarie Horton]

Obviously when it comes to the data, it's backwards looking. And for someone like Beth Hammack, and if you listen to her speak, it doesn't really matter what tomorrow's CPI print brings in terms of where she sees the trajectory and what needs to be done to really try to tamper inflation. How are you, are you viewing tomorrow's CPI print?

[Casual Male Speaker]

Yeah, I mean, you know, we're still going to be above targets for the 63rd, 64th month, if you will, there are questions as to whether or not the disinflation is going to get us to that 2%. And in an environment where you've got again kind of this economic tailwind from this investment balloon that we have, you know, you've got to look at it holistically and you know, and pass the fact that we're still above those targets and the shape of the curve and how long yields are responding are saying that there are concerns that you're not taking it seriously enough.

[Annmarie Horton]

Given all of this money flooding into AI, given the fact that it is costing a lot more in terms of having compute, do you think it's going to be much harder for Fed Chair Kevin Warsh to have that argument that ultimately AI is disinflationary?

[Casual Male Speaker]

Certainly in the short term. You know, Jackson Hole is coming up. He's going to talk about the big items that he, that you know, he referenced during the, the last FOMC meeting. You know, we'll get a sense on kind of when that productivity can actually make its way into. But in the short term it is going to be really, really difficult to calibrate the potential for productivity gains five years down the line within the environment that we have right now.

[Lisa Abramowicz]

What would raising rates actually do on the front end of the yield curve, Marvin? I mean ultimately we've seen that even with rates materially higher priced in by the market, with the market doing the work, as Kevin Marsh was saying, it hasn't really had a material effect on where equities are.

[Casual Male Speaker]

No, it hasn't. Which, which ultimately is a tailwind for kind of equity story. This isn't, this isn't like prior investment cycles around technology where you know, certainly the technology itself has to be proven, but it's being embarked upon by companies that are incredibly cash flow positive and that is somewhat sustainable. I think ironically, showing that you've got this board inflation fighting mentality is going to help the long end. It's really the fact that the long end, whether it's driven by term premiums, whether it's driven by real yields, are being unhinged by concerns that you're not taking it seriously enough. I'd look at that for the biggest win in raising rates kind of at the short end, if you will.

[Lisa Abramowicz]

When do you see long ends reach the long end of the yield curve? Reaching a point where it does constrain some of the enthusiasm that we're seeing in equities and frankly the ambitious capital expenditures that we're seeing from AI and frankly even other companies as well.

[Casual Male Speaker]

Yeah, so you know, 5% on the 10 year is always kind of that magic number that we're looking at. If it's driven by real yields, you know, certainly getting real yields into this 120, 550 basis point range, you know, we're closer to that, you know, 80 if you will, perspective from a term premium viewpoint that really starts to I think tamper the enthusiasm of how much you can throw at These long duration models stay with us.

[Jonathan Ferro]

More Bloomberg surveillance coming up after this.

[Creative Planning Announcer]

Salary bonus 401k stock options investment accounts At a certain wealth level, your financial life is anything but simple. If your wealth manager only sees one piece of the puzzle, who's connecting the rest? Creative Planning's integrated team looks at the whole picture. They coordinate your investments, tax strategy and estate plan to form a complete view of your financial life so everything fits together. Creative Planning where wealth works together. Learn [e-mail] BSP this is the Bloomberg

[Carol Massar]

Tech Minute brought to you by ChatGPT. Now with ChatGPT work, I'm Carol Massar. DoorDash, the largest food delivery company in the U.S. is building its own delivery drones and has gained the necessary FAA approvals to operate them commercially. The latest in its effort to delegate more orders to robots as a way of cutting delivery times, Bloomberg's Natalie Leung reports. The company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period. The effort marks an expansion of DoorDash's in house robotics efforts to reduce reliance on human couriers for some orders, as their wages constitute a key expense to the business. Drones are also a way for DoorDash to cut delivery times on orders from more remote locations that some dashers may not want. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get [e-mail] today by selecting work mode available on plus and Pro plans.

[Casual Male Speaker]

Evening buyer's Remorse Buy a new car.

[Jonathan Ferro]

I'll be moving in.

[Casual Male Speaker]

Let's get started.

[Carol Massar]

Uh, sorry, I think there's been a mistake. I bought it from Carvana.

[Casual Female Speaker]

You what? Yeah, great price.

[Carol Massar]

I even have seven days to love

[Casual Female Speaker]

it or return it.

[Carol Massar]

So there's no, no, no buyer's remorse. More like Buyers rejoice. I guess I'll let myself out.

[Jonathan Ferro]

Congratulations.

[Casual Male Speaker]

I mean it.

[Casual Female Speaker]

Buyers rejoice.

[Carol Massar]

Buy your car today on Carvana. Limitations and exclusions may apply. See our seven day return policy at Carvana.com.

[Casual Male Speaker]

Iran is broke. Totally broke.

[Casual Female Speaker]

They

[Casual Male Speaker]

reparations, you might say, or they asked for money for the damage that we've done. I said that's a good idea. Well, we're going to ask for money for the damage they've done over a 50 year period. If there's damages to be paid, I think Iran should pay those damages.

[Lisa Abramowicz]

Here's the latest Oil gaining as President Donald Trump makes new demands for Iran, saying reparations for past attacks will be part of any future negotiations with Tehran. General Karen Gibson of Academy securities writing, Iran is substantially weaker today than before the war began. However, it has gained considerable coercive leverage. Iran benefits when the dispute is framed as an issue between IRAN and the U.S. general Gibson joins us now for more. General Gibson, I want to get your take just of the lay of the land, if you could zoom out and give us a sense of what has actually changed over the past couple of weeks as people reassessed whether talks were on versus now where it seems like increasingly they're pretty far away.

[Casual Female Speaker]

Yes, so that's a great question, Lisa. I think, you know, one, the talks are proceeding on two axes simultaneously. One is between Oman and Iran, and that's the mechanism by which the strait would be administered, the potential for either voluntary payments or some form of toll to assist with administration. And then the second tack is the more important one, frankly, the one between the US And Iran, which is not about how it will be administered, but when it will open, with Iran insisting that the strait will not actually open until the United States makes some major concessions. And as we've just heard from Taylor and has been widely, these are concessions that are simply not acceptable to the United States, some of them like, you know, removing US Military forces from the region or reparations and then others. It's just unwise to agree to the entirety of this package when really many elements of it, particularly some of those economic aspects are leverage that the United States will also need in follow on negotiations that we hope will occur to look at Iranian nuclear curbs.

[Annmarie Horton]

What's going to be the response from this White House if they do not go forward with opening up the Strait of Hormuz and inking this deal with Aman.

[Casual Female Speaker]

Yes, well, so as Taylor just highlighted, the Iranian economy, which was already weak before this war began, is really being hammered by this. The blockade doesn't help, the sanctions don't help. Additional pressure that could be applied. It's unfortunate it's not a broader multilateral effort, but the economic pressure and sustained military pressure on Iran would eventually compel them perhaps to shift their strategy. The issue is time and domestically, and I'm not a domestic political analyst, but domestically there are constraints that make it difficult for the United States, whether it's gas or oil pressures or midterms or pledges not to engage in a forever war, that make it more challenging for the US to wait this out, which really I think is what it will require.

[Annmarie Horton]

Amidst all of this, there was really a Of sense. Stunning story last night from the Washington Post about the President and his departure from NATO. I was with him in NATO in Ankara. And after he boarded Air Force One, the Washington Post reports that he was shuttled via an airport catering truck, typically used to load meals into another aircraft so as a decoy so he could secretly leave Turkey. Is there a real threat on the president's life that you would be concerned about at this point?

[Casual Female Speaker]

Well, I think we've seen even domestically, people who have attempted to assassinate the president, that there are real threats, and he's been on Iran's fatwa list for some time. I'm not aware, certainly, of whatever classified intelligence information may have been available to lead the Secret Service to believe that there was a potential imminent threat, a very viable threat in Turkey. Obviously, that's not something that should be disclosed if that were the case. But I would say escaping in a food truck that nobody noticed is, is a pretty, pretty successful evasive measure.

[Annmarie Horton]

Yeah, absolutely. And General, I would just love to understand from you, have you ever seen or heard of anything like this in the past?

[Casual Female Speaker]

Oh, of a president in a food truck now. Or, you know, it's, it's, it's a very, it's a, it's a very deceptive measure. Creative, certainly. Seem to have been effective, but, yes, unprecedented, probably.

[Lisa Abramowicz]

And something that can get slipped into the next spy movie or movie about Washington, D.C. i'm sure. I am curious about your point that you're making, that it's beneficial for Iran when this conflict is framed as Iran versus the US Versus Iran versus the world, which is kind of how a lot of people are seeing it when it comes to closing the Strait of Hormuz. What's your take on why it has been framed so much as Iran versus the US and how that could be changed?

[Casual Female Speaker]

Well, I think it's unfortunate. One of the, the anomalies of this conflict is that we did not build a broad base of support from allies beyond the Gulf. And even at that point, it's, there's some question as to how much they were in on this plan to begin with. Previous conflicts across the Middle east and elsewhere, there has been more international support for what the United States has been doing. I think it certainly doesn't help the erosion of some of the trust with our allies, but a broader multilateral effort. I mean, as you point out repeatedly, this is very global impacts. In fact, the United States, aside from inflationary pressures, suffers less from the closure of the Strait of Hormuz than the Asian oil consumers or Europe and so having broader buy in, broader economic pressures, kind of like we had with jcpoa, a more multilateral effort would certainly speed the timeline, I think of potentially compelling Iran to change its strategy.

[Lisa Abramowicz]

How much more are the Saudi Arabians getting involved given the fact that the Houthis seem to be repeatedly targeting them in the Red Sea? We saw that again overnight and seem to be more proactive in terms of a response.

[Casual Female Speaker]

Yeah, so I would say the Saudi threat, the Houthi threat to the Saudis is certainly more proximate to them than Iran. Iran has not been recently attacking Saudi oil infrastructure, although they've certainly threatened to do that previously. I think that's why Operation Freedom, the military escort mission, only lasted one day, was due to Iranian threats against the east west pipeline. But the Houthi threat is more proximate and the Houthi threat is longstanding. The Saudis and the Houthis have fought two wars previously and those conflicts predate the Houthis relationship with Iran as one of their proxies. That's a very thorny perpetual security issue that the Saudis have faced, which again unfortunately does not seem to have an imminent solution.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

[Carol Massar]

This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work, I'm Carol Massar. DoorDash, the largest food delivery company in the U.S. is building its own delivery drones and has gained the necessary FAA approvals to operate them commercially, the latest in its effort to delegate more orders to robots as a way of cutting delivery times, Bloomberg's Natalie Leung reports. The company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period. The effort marks an expansion of DoorDash's in house robotics efforts to reduce reliance on human couriers for some orders as their wages constitute a key expense to the business. Drones are also a way for DoorDash to cut delivery times on orders from more remote locations that some dashers may not want. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get [e-mail] today by selecting work mode available on plus and Pro plans. Hi, I'm Carol Massar with a helpful tip to keep you plugged in throughout the market day. Subscribe to the Stock Movers report from Bloomberg. These are short audio episodes, five minutes or less, delivered right to your podcast feed. Stock Movers fills you in on the day's winners and losers on Wall street and tells you about the news and data that's driving those gains and losses. Why spend all day watching tickers scroll across your screen? Subscribe to Stock Movers today on Apple, Spotify or anywhere else you listen.

[Lisa Abramowicz]

Livy Kendrell of Pimco writing Our base case case for the November midterm elections continues to be a split Congress. Regardless of the outcome, neither party is likely to have a real governing majority come 2027. Yay, more gridlock. Libby joins us now. It seems like markets like that, so maybe that is a positive.

[Livy Kendrell]

They do like it. Yeah.

[Lisa Abramowicz]

What are you expecting in terms of gleaning insight for the fight for the Democratic soul and party's sort of direction going forward?

[Livy Kendrell]

Yeah, we're seeing, I think, a lot of interesting trends almost converging. It's this really, really sort of anti incumbent, anti establishment sentiment that's been played out across both parties, both Republicans and Democrats. And then of course within the Democratic Party, this is also being kind of woven into this Democratic socialist, a sort of far left ideology versus the more kind of mainstream establishment Democrats. It really hasn't actually had major implications for what the midterm election results have been so far, at least before last week in that many of these fights are being played out in kind of blue, if not very sapphire blue districts. You know, New York City, Denver, Colorado. Whether the Democrats are going to be liberal or very liberal, it doesn't really matter in terms of sort of their electability in those districts because they're sort of overwhelmingly Democratic. However, last week it really changed in terms of the Michigan Senate race. And now you have the Wisconsin gubernatorial race and also the potential, you know, Minnesota Senate race as well today. So in terms of the primary, so, so I think that this is this has been sort of an intra, you know, few intro kind of family spat that has really had very little few implications for the midterms. However, again, last week has changed that. And again, I do think that it probably puts this Michigan Senate seat, maybe Minnesota, depending on how that turns out today. And then of course the Wisconsin gubernatorial seat, which is going to be important for the certification of the election in terms of 2028. This is going to have implications for not only the midterms, but 10, say

[Annmarie Horton]

for, for 2020, this family fight with the Democratic Party that's going to play out now in the midterms. We saw it happen last week. How much is that going to set the tone for 2028 and the candidate that they end up choosing?

[Livy Kendrell]

Yeah, And I think this is going to be, I mean, obviously what happens, you know, today will be interesting, particularly in Wisconsin and Minnesota. But I think what is going to be more important is obviously what happens in November. And so can, you know, these people can, you know, they are, their rhetoric is obviously resonating with a group of the Democratic Party, but can they then pivot and have a more sort of centrist message that then can actually make them electable for a general election come 2026, if these folks lose, if El Said loses in terms of November, if, you know, Francesca Hong wins today and then loses in November, in terms of the gubernatorial race in Wisconsin, I do think that's going to sort of take some wind out of the progressive left saying going into the general election and 2028, if, however they win, then you're going to really see this fight, I think, really play out. In terms of the primary big picture,

[Annmarie Horton]

what kind of numbers are you looking at for after the midterms in terms of the composition of Washington?

[Livy Kendrell]

Yeah, I mean, honestly, even if this is a wave election for Democrats and there are some inklings of that in terms of the generic ballot, in terms of the enthusiasm gap, Democrats are much more enthusiastic about voting this election. Those are sort of two indicators that we are monitoring that have sort of suggested wave environments before in terms of the House, that these sort of, there's a much lower ceiling for how many seats Democrats can win because of the redistricting that has happened. So honestly, a great night for them would be a kind of a plus 10 majority, plus 15 majority. We're not talking about the sort of plus 40 majority that we have seen in other sort of midterm elections. And that is just even if that comes to pass, and I think more likely is that Democrats, you know, have a five seat majority in the House and then maybe Republicans have a 50, 50 Senate. And that is like neither party. Nothing gets done to have a governing majority. I mean, I think it may be sort of this quixotic world. You could say those are the ingredients for actually compromise. If President Trump wanted to do something, say on immigration, for instance, or maybe on health care, you know, those are narrow majorities or split Congress have given way to some compromise in different political environments. I don't think we should fool ourselves. I think this means more gridlock. It means that, you know, I think we've seen kind of past peak President Trump, I think there's obviously much more oversight and what have you on him. But in terms of stuff that's getting done, it's going to be very, very minor.

[Lisa Abramowicz]

Is gridlock still good when people can't even be in the same room together and talk? I mean, it's one thing to have Democrats and Republicans, say 10 or 15 years ago when people would have, you know, salons together and they would go out together. Now when you go to Washington, D.C. it's very different. People don't talk to one another, they don't congregate together. Is gridlock still as good for markets

[Annmarie Horton]

as it used to be?

[Livy Kendrell]

Yeah, I think that's a great question. I think that sort of when the rubber meets the road for markets is when they really need Congress and they really need the fiscal authorities to do something right. And we did see, of course, during COVID that a lot of this partisanship fell, fell by the wayside and they were able to spend a lot of money, which is a much easier the harder task, obviously, for Congress is to do the really hard things politically, which of course we've talked about in terms of reducing the deficit. Something an audible laugh by Emory. But honestly, it's, yeah, I think it's warranted. I mean, it's just in terms of actually doing the really hard work, whether it's going to be raising revenues, raising taxes, definitely difficult to do, obviously reforming Social Security, reforming health care. Those things we all know are going to have are going, are coming. Honestly, they have to. In terms of our fiscal picture now, whether it's going to be in the next three years, probably not. But you know, that 2031 Social Security Trust Fund inflection point, I do think that's going to be a forcing mechanism and that will be sort of when the rubber meets the road. And I think the markets will be focusing more on this kind of, you know, dysfunction in Congress.

[Lisa Abramowicz]

Just 30 seconds. How much do higher interest rates really challenge this? That much more, given how much more the interest expense is right now for

[Livy Kendrell]

the U.S. i think, you know, mortgage rates have obviously are much higher than they were not their highest, obviously not during, you know, what we saw during the Biden administration. Gas, though, I have to say, gas is still the thing. It's gas and groceries, housing, sort of health care, sure. But gas, the price of gas really does get into the zeitgeist of voters. And so with that above $4, you know, a gallon, I do think that's going to be a headwind for, for the president and the president's party.

[Jonathan Ferro]

This is the Bloomberg Surveillance podcast bringing you the best in markets, economics and geopolitics. You can watch the show live on Bloomberg TV weekday mornings from 6am to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app,

[Carol Massar]

Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get, and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com get the latest

[Livy Kendrell]

news from around the world, delivered to

[Carol Massar]

you in an instant.

[Casual Male Speaker]

Subscribe to Bloomberg News now and get

[Lisa Abramowicz]

news when you want it on your schedule.

[Casual Male Speaker]

These are short audio reports on the day's top stories that you can listen

[Casual Female Speaker]

to in just a few minutes.

[Livy Kendrell]

Make Bloomberg News now your trusted source for the latest global headlines.

[Carol Massar]

With context, it's available 24 hours a

[Casual Female Speaker]

day, anytime you need it, right on your smartphone or smart speakers.

[Creative Planning Announcer]

Subscribe to Bloomberg News now today on Apple Podcasts, Spotify or anywhere you listen.

[Casual Female Speaker]

Sleep Number's new collections are designed to adapt to the changing nature of your life and your sleep needs. Whether it's the personalized comfort of the Comfort Mode mattress, the targeted pressure relief of the Comfort Next mattress, or the climate collection that actively cools or warms to help you fall asleep and stay asleep.

[Casual Male Speaker]

And now get early access to our biggest sale of the year. Save 25% on the new Comfort Next Luxe for a limited time only at a Sleep number store or sleepnumber.com.