Bloomberg Surveillance TV: June 26th, 2026

Summary

Bloomberg Surveillance TV: June 26th, 2026

Podcast Summary

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Overview

This episode of Bloomberg Surveillance TV (June 26, 2026) focuses on the state of financial markets, the sustainability of AI infrastructure investment, a deep dive into the semiconductor cycle, and a critical look at geopolitics with a special focus on the unfolding situation in the Strait of Hormuz, Iran sanctions, and global chokepoints. Hosted by Jonathan Ferro, Lisa Abramowicz and Annmarie Hordern, guests include Cameron Dawson (NewEdge Wealth), Vivek Arya (Bank of America), and Eddie Fishman (Council on Foreign Relations). The show skillfully links market narratives with investment implications and global risk themes.

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Major Discussion Points & Insights

1. AI Infrastructure & Hyperscaler Spending

• Guest: Cameron Dawson, NewEdge Wealth

• Topic: Is hyperscaler capex (capital expenditures) sustainable?

• Timestamp: 01:55–07:55

  • AI Investment “Arms Race”:

    • The hyperscalers (major cloud and AI companies) are driving the boom in infrastructure, but investors are increasingly worried about how long they can continue heavy spending.
    • Quote: “Micron is able to post 830% earnings growth...because the hyperscalers are willing to dig very deep into their pockets, burning all of their free cash flow in order to build out capex.” — Cameron Dawson (02:41)

  • Profitability & Market Skepticism:

    • Investors are wary as these companies transition from capital-light to capital-intensive models.
    • Quote: “Now they're morphing into these highly capital intensive businesses...and the really big question is, will we get the kind of returns that we got in their legacy businesses...?” — Dawson (03:55)
    • Multiples on "Mag 7" tech companies have compressed from 35x to 25x as the market dislikes reduced free cash flow.

  • Impact on Broader Market Ecosystem:

    • The AI infrastructure rush has expanded from public markets to private markets, with risks that the supply-demand imbalance may not last through standard fund lifecycles.
    • Quote: “If those hyperscalers stop spending, what happens to the entire ecosystem?” — Lisa Abramowicz (05:00)
    • Rotation Underneath the Market: Despite S&P 500 being flat, more names have crossed above their 50-day moving averages; Russell 2000 has outperformed Mag 7 by 27% this year, but rebalancing is imminent (06:05).

2. Inflation, Fed Policy, and Rate Hike Debates

• Guest: Cameron Dawson, NewEdge Wealth

• Timestamp: 07:08–11:08

  • Goods Inflation Persists:

    • Durable goods inflation (historically a deflationary force) is now sticky because of lingering pandemic effects, tariffs, and the rise of AI.
    • Quote: “What a brave new world that we're talking about goods inflation being persistent. For the last 20 years, goods has been a source of disinflation...now you have AI, you’re in a world where goods inflation has been far more persistent.” — Dawson (07:24)

  • Interest Rates & The Fed Dilemma:

    • Despite resetting crude oil prices, the market is increasingly pricing in more rate hikes.
    • The Fed is perceived as more ambiguous, possibly opening the door for hawkish moves.
    • Quote: “If you choose not to decide, you still have made a choice.” — Dawson paraphrasing Rush lyrics (09:21), on Fed's indecision leading to more volatility.

  • Treasury & Debt Refinancing Pressure:

    • $10 trillion in Treasury debt up for refinancing, mostly at the short end of the curve; the Treasury Secretary would likely favor lower short-term rates to ease refinancing (09:21).

  • Fed Event Takeaways:

    • Messaging is cautious: “It wasn’t a red light [to hike rates]....It was support of this hold and wait and see.” — Dawson (10:17)
    • Shift from optimizing supply chains for efficiency to resiliency means margins may compress as globalization’s tailwinds fade.

3. Semiconductor (Semis) Supercycle

• Guest: Vivek Arya, Bank of America

• Timestamp: 13:30–17:08

  • Bullish Long-term on Chips:

    • Arya forecasts that the current infrastructure cycle for semiconductors could last through the end of the decade, as wider enterprise and consumer adoption is still to come.
    • Quote: “We think that the infrastructure cycle could last at least through the end of this decade. I think we are only about a third of the way through…there is still a lot of adoption ahead.” — Arya (13:57)

  • Semiconductor Boom-Bust, or Something Different?

    • While acknowledging inherent cyclicality, Arya argues that this time may be structurally stronger:
      • Top companies (Nvidia, Broadcom, Micron) are trading at below-market multiples, unlike past cycles.
      • Capacity expansion in semis is slow and expensive, supporting prolonged supply-demand imbalance.
    • Quote: “The only way [a company with 3 billion subscribers] can grow 20-30% a year is to extract more value from every user. And AI is a critical tool to do that.” — Arya (15:13)

4. Geopolitics: Strait of Hormuz, Iran, and Chokepoint Diplomacy

• Guest: Eddie Fishman, Council on Foreign Relations

• Timestamp: 20:06–26:20

  • Iran Strikes, Chokepoints, and "Toll" Diplomacy:

    • Iran has used its strategic control of the Strait of Hormuz to pressure the US into making economic concessions.
    • Quote: “What has happened in 2026…is actually the reverse [of the 2015 nuclear deal]. Iran...has imposed significant economic pressure on us and has coerced us to give up economic concessions.” — Fishman (21:05)
    • Other countries (e.g., China last year with rare earths, potentially Indonesia at the Strait of Malacca) may follow, seeing the financial success of such tactics.

  • International Implications & Response:

    • If Iran is allowed to charge a toll, it undermines the fundamental international principle of free and open waterways.
    • US military dominance—traditionally the guarantor of open commerce—is shown to have limits in this context.
    • Quote: “You’re undermining a core tenet of the international system, which is that waterways like the Strait of Hormuz are free and open to international commerce.” — Fishman (22:42)

  • Sanctions, Money Flows & Policy Limits:

    • US is releasing frozen Iranian assets ($12B or more) in exchange for reopening the strait, but with little oversight.
    • Quote: “Even if [Iran] uses some of that money for [agricultural imports], that frees up additional resources to rebuild their nuclear program, to supercharge their missile program…” — Fishman (25:01)
    • Lesson learned: economic pressure as a policy tool has limits and may lead to escalation if goals are overly ambitious.

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Notable Quotes & Moments

• Market Skepticism About AI/Tech Spending:
  “These companies used to be such capital light businesses…Now we’re capital intensive and competitive, which says to us these are lower return on invested capital businesses. And we think that’s why the market has been punishing them.” — Cameron Dawson (03:55)

• Fed’s Dilemma on Rates and Indecision:
  “If you choose not to decide, you still have made a choice.” — Cameron Dawson via Rush lyrics (09:21)

• Semiconductors’ Structural Tailwinds:
  “The only way for [a massive tech company] to grow 20–30% a year is…AI.” — Vivek Arya (15:13)

• Chokepoint Diplomacy and Global Risk:
  “Iran has shown that a US adversary can weaponize a chokepoint and then get paid to stand down. Others will take note.” — Eddie Fishman (20:29)

• Sanctions Realism:
  “Money is fungible…the freed-up capital can go to rebuild Iran’s nuclear or missile program.” (25:01)

• Effectiveness of Economic Pressure:
  “[Economic pressure] is a powerful tool, but it’s a limited one…and you’re going to wind up probably on a slippery slope to the use of military force.” — Eddie Fishman (25:44)

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Key Timestamps & Segments

• AI & Hyperscalers/Market Reactions — 01:55–07:55
• Rotation in Equity Markets/Russell 2000 — 06:05
• Inflation & Fed Discussion — 07:08–11:08
• Semiconductor Supercycle with Vivek Arya — 13:30–17:08
• Chokepoint Diplomacy & Iran/Eddie Fishman — 20:06–26:20

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Tone & Style

The hosts maintain a brisk, data-driven tone, with moments of candid skepticism and wry humor (e.g., “If you choose not to decide…”). The guest experts provide pithy explanations and a sense of urgency around both investment and geopolitical trends.

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Summary Conclusion

This episode explores the sustainability of AI infrastructure spending, the shifting fundamentals of the semiconductor industry, shifting inflation dynamics, the Federal Reserve’s delicate balancing act, and urgent geopolitical risks around chokepoints and economic leverage. Investors are cautioned to question supply-demand imbalances and capital allocation in both tech and semis. The real-world consequences of global power shifts are starkly illustrated by rising chokepoint diplomacy and the uncertain efficacy of sanctions.

Transcript

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[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro along with Lisa Abramowicz and Annmarie Horden. 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 and as always on the Bloomberg Terminal and the Bloomberg Business app, we begin this out with stocks sliding as spending concerns rattle investors. Cam Dawson of New Edge wealth writing, truly everything hinges on one thing. How long will hyperscalers be willing to throw all their capital into AI infrastructure? Mostly as the market punishes their stock prices? Cameron joins us now for more. Cameron, good morning. Good to see you.

[Cameron Dawson]

Good morning.

[Jonathan Ferro]

Is this sustainable what's your view on things?

[Cameron Dawson]

I think the only reason why Micron is able to post 830% earnings growth in the year of 2026 is because the hyperscalers are willing to deep reach very deep into their pockets burning all of their free cash flow in order to build out capex. Tapping the debt markets now, tapping the equity markets. And I think the big question is how much more upside is there to hyperscaler capex spending. The reason why we've seen so much upside to the infrastructure earnings this year is because people have revised higher their their hyperscaler capex numbers up from 30 start the year to now 90%. So when you look into 2027 people are expecting 20 to 30% growth on top of this year's 90%. The question is where does that money come from? We're talking about hundreds of billions of dollars and there's a really big question as to whether or not this equity market will have the patience with these hyperscalers to wait for the returns to come.

[Jonathan Ferro]

At the moment that patience is wearing thin. I've mentioned that quote from the Alphabet executive a number of summers ago when they came out and said the biggest risk here is underinvesting and not overin investing. That really set the tone for the amount of capex we've seen. How sensitive do you think that argument will be to the pushback that's developing at a single name level.

[Cameron Dawson]

Yet when you tell everybody that you're in an arms race and it's an existential crisis, this is not necessarily something that you would correlate with higher margins. And I think the challenge that we have is that you know, these companies used to be such capital light businesses and that was who they were at their core. Now they're morphing into these highly capital intensive businesses and the really big question is whether or not this is a way a good place to allocate capital will get the kind of returns that we got in their legacy businesses which were monopolies and capital light. Now we're capital intensive and competitive which says to us these are lower return on invested capital businesses. And we think that's why the market has been punishing them. If you look at their returns, the reason why they're down is not because of earnings. Earnings are still being revised higher for all these companies. It's because you've taken 10 multiple turns out of their their names. The Mag 7 used to trade at 35 times. At the peak last year it's 25 times. So this is the market saying we don't like the deterioration in free cash flow generation. And I think that's why you're seeing this multiple compression.

[Lisa Abramowicz]

Karen, I just think about what are the consequences for so many funds that have decided that they just want to be an infrastructure bet. CO2, the hedge fund opened up an infrastructure strategy. John Gray from Blackstone was at a conference saying Blackstone is now an AI company because AI infrastructure is the future. If those hyperscalers stop spending, what happens to that entirety of the ecosystem?

[Cameron Dawson]

It's one of the things that we've been wrestling not to just within public markets, but within private markets as well, where you're signing up for seven to ten year fund lives. And yes, we can acknowledge that today at this very moment, there are very distinct supply shortages. There is so much more demand for compute than there appears to be available capacity. But as we know, whenever you have super normal profits, it tends to draw on capital, draw on competition. And so if we're looking for seven to ten year kinds of investments, as you would say with the Blackstone, who is a of private market player, that the question is, does this supply demand imbalance remain during that entire fund life. So I think it's a really, really open question how long this supply demand imbalance actually persists.

[Lisa Abramowicz]

These are some big unknowns. So what takes the mantle in the big time? Is it the semis that these hyperscalers are spending on? Is it banks? Is it something cyclical, totally separate from the trade?

[Cameron Dawson]

I mean, I think the story of the last month has been the rotational market. You have the dynamic where you have the S&P 500 flat on the surface, but you have percent more names above their 50 day moving average today than you had at the start of June. So this is all this big rotation underneath the surface. It's not necessarily people running for the hills from equities. Overall. You add on top of that something like the Russell 2000 outperforming Mag 7 by 27% this year. But there's a really big caveat with Russell 2000. We get the rebalance at the end of this month and all of the big names that have driven Russell 2000 outperformance are actually graduating up into the Russell 1000. So the challenge you have is that your biggest winners are moving out of the index. So it's effectively like saying that the Knicks, if you traded all the players away, are they still the Knicks? That's effectively what's happening to the Russell too.

[Jonathan Ferro]

And we've got a rate hike debate on the horizon as well, somewhat linked to the tech story, we're seeing these companies, Microsoft, Apple, pass on these higher costs, consumer electronics are going to go up in price. And even though we've had a reset in crude prices, we've had a firming in rate hike bets over the last month. What do you make of that disconnect?

[Cameron Dawson]

What a brave new world that we're talking about goods inflation being persistent. For the last 20 years, Goods has been a source of disinflation or actually outright deflation because of globalization, because of productivity. But ever since the pandemic and then you had tariffs and now you have AI, you're in a world where goods inflation has been far more persistent. Now the good news on the other side of the inflation story is that wage pressures are not there. So you're not seeing the same dynamic of wage prices spiral. And you don't have pressure from housing as housing continues to be in the doldrums due to the high, high rates at the long end of the curve. So the combination of everything means that high goods inflation services may be not as bad. But then you also have to contend with the potential that we could see negative headline prints on CPI just because of falling oil prices. So we think maybe peak inflation fears might be behind us, at least in the very near term.

[Jonathan Ferro]

So I'm not expecting a 22 repeat, a Fed that's got a scramble. We can't by definition go from zero to five again. But could we see three hikes in the next six months?

[Cameron Dawson]

I think that it really depends on whether or not we see more pressure on this inflation spreading to other areas. And I think the fact that core PC is still at 3.4% would be the one reason that you would argue for rate hikes. And I feel as if, and this is really coming very similar to what Dada was arguing, which is that because Warsh abstained from providing a dot, he effectively was opening up the door for those rate hikes by saying, look, it wasn't me, I didn't do this. And so that effectively is giving room to potentially hike rates. But if you're in an environment where CPI and a year or on a month over month basis is negative on a headline basis, it's hard to see the Fed hiking in that environment.

[Lisa Abramowicz]

Still, it's a market that maybe has less reality checks on exactly where we're going. If you don't have a worse who's as present and as transparent as Fed chairs in the past, does that just lead to more volatility Volatility then yeah,

[Cameron Dawson]

we've been thinking about the lyric from the Rush song a lot which is if you choose not to decide, you still have made a choice. And I think that that choosing not to decide in the near term was effectively opening the door for the hawks, as I mentioned. And I think the big question will be as we get later into the year as we see the market still pricing in a 1,120% chance of a hike. So more than when more than one hike through the end of the year. Do you actually see see him push back against that in any way at this meeting? It certainly wasn't the case. He talked about fighting inflation. But it's really important to remember you have $10 trillion of treasury debt outstanding that has to be refinanced this year. 85% of that refinancing is coming at the short end of the curve. So if there's one person who really, really, really wants short term rates lower, it is Secretary Bassen because of the treasury financing pressure.

[Jonathan Ferro]

You were in the room with mess in this week at the event at the Economic Club in New York. Was that a green light to hike rates?

[Cameron Dawson]

I think it wasn't a red light. So I think it was, it was support of this hold and wait and see. It wasn't an all out we have to cut rates. You didn't see this argument coming from Bessant talking about because of AI, because of of of efficiency that you have this huge Runway in order to be able to cut rates, that the neutral rate is lower. It was effectively whatever the data supports. I think the most interesting thing from Bessant at that at the presentation was the talk about globalization and margins and the fact that effectively you used to optimize supply chains for margin for efficiency and now you have to optimize supply chains for resiliency and redundancy. And that says to us in the last 20 years of massive margin expansion on the back of the of globalization, does that come into question?

[Jonathan Ferro]

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

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[Public.com Representative]

IBM support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve of the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory services by Public Advisors, LLC, SEC registered advisor complete disclosures [e-mail] disclosures.

[Jonathan Ferro]

Vivek Area of Bank of America staying bullish on semis raising his forecast for the chip sector expecting the market to reach 2.7 trillion by 2030. He writes, the industry moving to addressing structural and physical constraints from having to defend return on investment before memory chip shortages and price inflation remain the critical moving pieces. Vivek joins us now for more. Vivek, welcome. We've been asking how much longer is the Runway? The response we're getting from a lot of people is longer than you think. What's your response?

[Vivek Area]

Good morning. We think that the infrastructure cycle could last at least through the end of this decade. I think we are only about a third of the way through and you know, there is still a lot of adoption ahead when it comes to enterprises, when it comes to consumers. You know, yes, there has been a lot of deployment of this infrastructure initially by the hyperscalers, but I think we are very early in the adoption of these services and applications by enterprises and consumers. On premise, there's a lot of deployment that different countries and states and regions need to do to be self Sufficient. So no, we are extremely bullish. And I think that means very good things across the semiconductor supply chain. Whether one looks at computing companies, whether one looks at networking, optics, memory and you know, these kind of deployments are never a straight line that are, there are going to be periods of digestion in between. But I think that despite that volatility, I do think the cycle can last at the end of the decade.

[Lisa Abramowicz]

On that cycle, I have the same question for you that John was just discussing with Ed, that these stocks, these semiconductors go through boom and bust. Historically, is this time different?

[Vivek Area]

Yeah, they, they do go through boom and bust cycles. And you know, there is, you know, there is a scenario where between now until the end of the decade, there is a year where there is a period of absorption. But, but I would say that that is part of, you know, any cyclical industry. What we have to question though is that do we believe that the deployment of this infrastructure is important and that is there enough of monetization and funding and the returns that these hyperscalers are getting? And our assumption is absolutely, yes. Look at the growth rates that the top search company, the top, you know, web services company, they are getting. Their growth rates have accelerated to their fastest level in the last three or four years. If you look at the largest social company out there with 3 billion plus subscribers, it is growing 20 to 30% a year. How does a company with 3 billion subscribers grow 20 or 30% a year? The only way for it to do that is to extract more value from every user. And AI is a critical tool to do that. That is why we are so bullish, because I think there is a secular theme. But of course within any secular theme there could be periods of, of digestion in between. And if you look at the growth rates for the end customers that are anywhere between 20 to 30% on an, on an average, the semiconductor industry is not able to create capacity that quickly. You know, it takes years, billions of dollars to add new manufacturing fabs. There's a lot of specialization required. And so I think the supply demand imbalance can last for, for a while. And then the final point I would make there is, you know, the top three semiconductor companies that I cover, Nvidia, Broadcom and Micron, they're all trading at below market multiples. So it is different this time because I do think the cycle can last longer and because I do think the valuations make a lot more sense this time around.

[Jonathan Ferro]

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

[Public.com Representative]

Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash Putting on a hedge on public you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC. SEC registered advisor complete disclosures [e-mail] disclosures

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[Jonathan Ferro]

Under Savannahs this morning, a presidential Sri

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Lanka they want to make a deal

[Eddie Fishman]

with us Very badly. And we probably will.

[Cameron Dawson]

I think we will. But the strait is open.

[Eddie Fishman]

Yesterday they took out 19 million barrels of oil. That's the most in the history of the strait. And the oil prices are dropping like a rock. And you know, as goes oil, so goes everything else.

[Jonathan Ferro]

So here's the latest this morning. The President touting the flow of crude through the Strait of Formers. This as a container vessel was attacked, undermining efforts to restore traffic. Multiple networks reporting Iran launched the strike. Eddie Fishman of the Council on Foreign Relations writing, Iran still has the ability to disrupt traffic if ships violate its wishes. Iran has shown that a US Adversary can weaponize a chokepoint and then get paid to stand down. Others will take note. Eddie joins us now for more. Eddie, good morning. Good to see you.

[Eddie Fishman]

Nice to see you, John.

[Jonathan Ferro]

It's advertised in the following fashion. No one's charging a toll. But ultimately aren't they being paid to reopen the Strait of Formers?

[Eddie Fishman]

Oh, definitely. I mean, that is what fundamentally the MoU is, right. If you go back to 2015, the Iran nuclear deal, the JCPOA, which a lot of people compare this to, in that circumstance, the United States imposed significant economic pressure on Iran and pressured Iran to give up concessions on this nuclear program. What has happened in 2026 this year is actually the reverse. It's Iran. By using its key choke point, the Strait of Hormuz has imposed significant economic pressure on us and has coerced us to give up economic concessions. The way you know that is that all the economic relief of this deal is front loaded before anything on the nuclear side.

[Jonathan Ferro]

Your words, your language, others will take note. Who are we thinking about?

[Eddie Fishman]

Pretty much everyone. I mean, because again, this is the second time that this has happened in as many years. China did the same thing last year with rare earth elements. They got us to backpedal our policy on China by virtue of view of cutting us off from that key choke point. If you're thinking about other countries that could do similar things, I mean, Indonesia is right at the top of the list with the Strait of Malacca. Their government has already brought up the possibility of imposing additional fees at the Strait. It's caused a lot of agita in places like Singapore and Malaysia, but that doesn't mean that over time they won't reimpose this type of thing. I think the Iranians came out yesterday and said that a toll at the Strait of Hormuz could be worth the $40 billion a year for the Iranian government. Any other government sitting across one of these Straits will see that kind of a revenue and imagine what they could provide for themselves too.

[Lisa Abramowicz]

Do you think it will continue to work for these other players who take note in your words, if it is something that looks like Indonesia, are other governments going to be okay with this or does there reach a point that there is enough of a pushback that this system becomes not viable?

[Eddie Fishman]

That's the key question, Danny. I mean, look, look what Secretary of State Rubio said yesterday and I totally support his. His position is that if Iran is allowed to charge a fee here, there is going to be chaos. Right. You're undermining a core tenet of the international system, which is that waterways like the Strait of Hormuz are free and open to international commerce. So I do think it will require an international effort to stop this from happening. I think the challenge is since World War II, that norm of free and open commerce has been underwritten by US Military power. And the US Military has just proven over the last four months that we cannot physically force the strait to be open. And so I guess the question becomes now what are the Iranians going to do? Are they going to target neutral ships like that Singaporean flagged vessel yesterday that defy it and take a channel around Amman? Maybe don't, don't pay a toll, but if they do, I'm not really sure what we're going to do about it.

[Lisa Abramowicz]

Beyond the revenue from the toll, there is this question of the hundreds of billions of dollars that Iran is likely getting with this MOU and where that money goes to. The White House has said it's going to go to things like US Agriculture. What do you make of this pot of money and how it's likely to be spent?

[Eddie Fishman]

Yeah, so. So look, I think the most plausible way that this deal could be funneled to buy agricultural commodities is through the frozen assets that Iran has. They've got tens of billions of dollars of these frozen assets, assets. And ostensibly through this deal. The White House has not fully provided the details. In this 60 day period, we're going to provide at least 12 billion or so to the Iranians. The question is, how does that actually get channeled to buy US Agricultural commodities? So far we've seen no evidence that it will. And the thing that makes me a little nervous frankly that this is more rhetoric than reality, is if you look at the one regulation that has come out, which is the sanctions relief on Iranian oil sales in this general license that came out on Monday, there are no restrictions whatsoever in terms of how Iran can use that money. It actually allows Iran even to collect the funds in US Dollars, which is something that the United States has not provided Iran for decades.

[Jonathan Ferro]

Republicans used to criticize Democrats for taking those frozen funds and allowing them to do the same thing to use it for humanitarian needs. But ultimately the same criticism was leveled at them that we should level at Republicans, too. If they're not using that money for that, what are they using the money for? If I've got excess capital now to spend on humanitarian needs, it means I've got additional capital to spend on the other things, like sponsoring proxies. How do we address that?

[Eddie Fishman]

That's exactly right. Money is fungible. Right. So, and Iran does depend on agricultural imports, right? They import grain, they import wheat, they, they import corn a lot, actually, soybeans from Brazil, you know, a lot of the same countries that we compete with. So they're going to buy agricultural commodities potentially from the United States. It's again, I haven't seen any proof that that's going to happen. But to your point, John, even if some of that money is used for that, that frees up additional resources to rebuild their nuclear program, to supercharge their missile program, which ostensibly now the US Is okay with, you know, per comments by President Trump. So I completely agree with you on

[Jonathan Ferro]

the sanctions failed, Operation Economic Fury, if you look at this and how it's played out, failed, what are the lessons from that?

[Eddie Fishman]

Look, I think the key lesson from this influence entire episode, right, you go back to the sanctions under George W. Bush, Barack Obama, and then, and then now under Trump in Operation Economic Fury and Operation Epic Fury, is that economic pressure is a powerful tool, but it's a limited one. And if you're trying to use economic pressure, for instance, just to curtail Iran's nuclear program, I actually think that was a viable goal.

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Right.

[Eddie Fishman]

We had a deal that in 2015. It's probable Trump could have even had a deal, you know, earlier this year. If you're going for something more maximalistic list like regime change, I think it's pretty unlikely and you're going to wind up probably on a slippery slope to the use of military force.

[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, Foreign.

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