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- [00:00]
Matt Miller
Looking for more investing options? Meet cboe, the exchange that pioneered options trading. With exclusive trading products like VIX and SPX Options, CBO can help you trade in any market environment. There are risks associated with CBOE Company products. Review the disclosures and disclaimers at cboe.com
- [00:15]
Raj Goyal
usdisclaimers@venture global, we think about what can
- [00:19]
Matt Miller
be done, not what's usually done through innovation.
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Raj Goyal
Venture Global is not only building some
- [00:25]
Robert Kaplan
of the largest energy facilities in the
- [00:27]
Raj Goyal
world right here in the United States,
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Robert Kaplan
but delivering American energy at a fraction
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Raj Goyal
of the cost and a fraction of the time.
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Robert Kaplan
So while others are busy talking, we're busy building.
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Raj Goyal
That's Venture Global.
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Robert Kaplan
That's unstoppable energy.
- [00:45]
Karen Moscow
Small businesses are the pulse of every community. They bring people together, create opportunities and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more@chase.com business chase for business make more of what's Yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co. Bloomberg Audio Studios Podcasts Radio News. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [01:50]
Matt Miller
It is fed Day, folks. It is the first fed meeting for Mr. Wash Kevin Wash, the new chair of the Fed. We want to break down kind of what we can expect later on today. We have Bloomberg's Michael McKee. He's down in D.C. he'll bring all the reporting to us this afternoon. Robert Kaplan right now joins. He's the vice chairman at Goldman Sachs. He's a former president of the Dallas Fed. Robert, thank you so much for joining us here. What do you expect to hear from Mr. Warsh today?
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Robert Kaplan
I think today will be a little bit of a philosophical day and that he's going to he's going to have to talk about what happened in the meeting. I would think he's going to give his take on what the current situation is in the economy with employment inflation. And I would think he's going to make a few points about his approach, his philosophical approach in that, for example, he's going to want to see robust debate and disagreement inside the room. He's going to want to see less predicting by the Fed Less prognostication. He's going to want to see though, patience and that over the horizon some of the structural drivers, AI adoption, Chinese overcapacity, you know, he wants to be patient to see the disinflationary impacts and he's going to have to though, acknowledge that we're in an inflationary sticky inflationary period right now. The war and straight opening will help, but he's going to have to also, I would hope he'll say, listen, if that inflation we think is going to be persistent, you know, that he's going to have to make clear he's prepared to act. He's going to have to, he's going to have to give people a little bit of a feel for him, establish his credibility and I think this is a good opportunity to do that.
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Matt Miller
Robert, how is his, his, I guess, reputation within the members of the Fed today as he walks in for his first meeting here? How is he perceived within this Federal Reserve?
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Robert Kaplan
Well, if you were just reading the newspapers and watching tv, you would, you might get a sense, you know, he's been an outside critic of the Fed. He's been critical of some of the mistakes they've made. I think now that he's inside,
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Raj Goyal
people
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Robert Kaplan
may find this hard to believe, but my own view is a lot of that gets washed away. He's now one of us. He's our leader. I want him to do well, we want him to do well. I want to work well with him. And so I think the judgments on him from here by people at the Fed will be based on what he does now, how does he communicate with us, how does he run the meeting, how easy is he to work with, how constructive is he? And so they'll be open minded and they're going to want to, I would think in my former seat, I'd want to do whatever I could to help him get off to a good start. And I think that'll be the dynamic.
- [05:00]
Matt Miller
So dots, one of the favorite functions on the Bloomberg terminal, the dots, getting a sense of kind of where the Fed is. Is that something that you think he may want, Mr. Walsh may want to do away with as he thinks about how the Fed should be communicating to global Wall Street?
- [05:21]
Robert Kaplan
Probably, yes. The question is how does he get from here to there, given the dot plots, been around now for a number of years. But yeah, I think he wants them to go less and, and I agree with this to some extent, less on the prognostications. Don't get yourself boxed in by some predictions you've made leave yourself the opportunity to change your mind. I always said the dot plot had the shelf life of an unrefrigerated carton of milk. Meaning I go in there to the meeting, I give my views on the outlook, I give my views on the long run, neutral rate on the dots. And if something happens two weeks later, I may change my mind. And I think he knows that. And I don't think, I think there'll be a lot of people around the FOMC table who will actually be,
- [06:16]
Greg Peters
won't
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Robert Kaplan
be sorry that he wants to curtail that because it's put him in some awkward situations at times around the committee. But how he orchestrates it and how he works with the members to make sure that he gets buy in for that, I don't know. I don't know how he plans to do that. But I would think you'll see the trend will be toward re reviewing that and predicting less.
- [06:42]
Matt Miller
Rob the inflation story is a challenge here for consumers in the marketplace. It's also a challenge for this Federal Reserve as they think about their dual mandate. How do you think they're looking at inflation here? So we do have oil, you know, coming down off of those highs from earlier in the year, but still probably higher than people would like to see.
- [07:03]
Robert Kaplan
Yeah, so, so to me, the way I look at this, there's the monthly data, but the more important, bigger picture dynamic is we, we are in a capex AI driven power data center driven capex boom in the United States and to some extent globally, but particularly in the United States at the same time due to tariffs, curtailment of immigration. So we have, we have, we have labor constraints and then the third has been oil, which hopefully is getting resolved. You've got resource constraints while we've got a capex boom that calls on those resources. And so to me, it's not a shocker that the capex part of AI, the infrastructure build is going to make inflation stickier. The adoption part over the horizon should be disinflationary. But we're right now in the teeth of the capex part. And so the Strait of Hormuz being open, oil prices going down, that'll definitely help. And I think what it does is for those who are more inclined to say we should be raising rates, I would think this bolsters the argument, let's kick the can a little longer for several months and see how this oil price decline, the bleed stops from that and let's see if we start to see a cooling in the inflation rates. And so I would guess Kevin Worsh will be arguing, be arguing for patients. And I think the straight being open helps with that. But there's, but the oil price is not the only issue. You've got this structural issue which, which they have to be aware of and monitor and contend with.
- [08:59]
Matt Miller
We're speaking with Robert Kaplan, he's the vice chair chairman at Goldman Sachs. He's former president of the Dallas Fed as well. Robert, you mentioned, you know, AI and you and your colleagues at Goldman Sachs are kind of right at the, at the nexus of the capital formation, kind of fueling the growth of this AI thing. How do you guys, as I guess we're in year three or four of really having an understanding of what AI can be. How are you guys thinking about this now as you work with your clients at Goldman Sachs?
- [09:30]
Robert Kaplan
So, so there's a couple of different tracks and yes, we're, we're in the middle of both of these. First there's the infrastructure build in that we need more compute. For as much compute is on the drawing boards, we need to create more compute and adoption is outpacing the demand for compute is outpacing the supply. So that means data centers, power, other infrastructure. And the capex related to that is creating all sorts of opportunities for Wall street to raise capital, debt, equity, et cetera. There's then the AI adoption and the companies that are in the middle of that and those companies are busy also growing and raising capital. I'll avoid specific names but Even most recently SpaceX is part of that story, both the infrastructure and adoption stories. And so we are raising capital for that. And every client that I work on and that we're working on is involved in rethinking their business and their processes and using AI to, to improve their productivity, improve their, their distinctive value proposition. And, and they, and they believe that if they don't do that, they're going to be left behind. And so this is also driving in my opinion, substantial amount of merger activity. And that's why you're seeing so many mergers. Not all because of this, but it's a big part of the story where I want more size and scale and ability to invest and bolster for this AI adoption because we're going to have to disrupt our own businesses so we can be competitive and our competitors are going to be doing that. And so we're seeing it in multiple different channels.
- [11:35]
Matt Miller
And Robert, as you mentioned, is unforeseen or just an extraordinary historically investment cycle for AI. If you peel back the AI cycle that we're in here. Are you concerned that maybe it's masking some weakness in this economy? Because boy, it just seems like the sums being invested are propping up a lot of industries and a lot of companies these days.
- [11:57]
Robert Kaplan
Well, I'll put it this way. The if you look at S and P earnings, if you look at the economy, yeah. You'll see there's the AI imprint, either infrastructure or adoption or innovation, and then there's everything else. And you are seeing a divergence. And I think the biggest issue that I'm seeing is let's say there's 134 million households in the United States. The median income is $80,000 a year. Okay. Half the bottom half of those 134 million households statistically does not own much in the way financial assets may not own their home. And they've lost 25, 30% purchasing power over the last five years. And they're struggling to make ends meet. That part of the consumer, although they've just gotten tax refunds, tax on tips, tax on overtime, it's helping them, but they're, they're challenged. And you can see a disproportionate amount of consumer spending is coming from more affluent. I think that's a, that's a watch out. And I, across clients and across the economy, I'm seeing that dichotomy play out with AI.
- [13:17]
Matt Miller
I mean, one of the benefits presumably is going to be increased productivity. If that in fact happens, is that enough to offset what appears to be kind of a flat, you know, population with the immigration is effectively shut down. And so the population were like a lot of other industrialized companies, flat. The declining populations. Can AI make up for that?
- [13:40]
Robert Kaplan
It can help. And the jury is how much. Jury's out on how much. So we're hoping, and our economists are thinking that in the out years over the horizon, AI can potentially add as much as 50 basis points or more to GDP growth. Okay, yeah, so that's very helpful. How much of that we capture is going to depend on how adaptable our workforce is and our ability to get workers who lose their job in one area or their job gets redefined to make sure they stay in the workforce and they get retrained if they need to. And we are okay, but not great at that in the United States. And this starts with early childhood literacy, improving full day versus half day pre K, affordable childcare for at risk populations, improving secondary education, skills training. The whole ecosystem has to get better. So can that help offset the fact we have very little labor force growth. It can help, but but it means that potential GDP growth may still be disappointing. And the reason that's a big deal is we are historically highly leveraged at the government level. We need more. We need more GDP growth to service this debt. And so we need all of this innovation as much as possible to translate into GDP growth.
- [15:05]
Matt Miller
Robert, thank you so much. We appreciate getting so much of your time here today. Robert Kaplan, he's the vice chairman of Goldman Sachs there, giving us some thoughts here. Stay with us. More from Bloomberg Surveillance coming up after this. When your options are limited, so are your opportunities. At cboe, the global exchange that pioneered options trading, we offer more ways to move with the market from VIX and SPX options to global market data solutions. CBOE helps investors diversify, manage risk, and stay ahead of whatever the market does next. CBOE Life is better. With options, your investments could be too. There are risks associated with CBOE Company products. Review the disclosures and disclaimers@cboe.com USDisclaimers the
- [15:52]
Robert Kaplan
thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands
- [16:10]
Greg Peters
of hours for strategic work.
- [16:12]
Robert Kaplan
Now we're helping companies get smarter by putting AI where it actually pays off,
- [16:16]
Matt Miller
deep in the work that moves the business.
- [16:19]
Robert Kaplan
Let's create smarter business.
- [16:20]
Matt Miller
IBM Support for the show comes from Public Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing Member FINRA, SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash all investing involves risk of loss. See Complete disclosure disclosures at public.com/disclosures.
- [17:24]
Karen Moscow
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [17:37]
Matt Miller
Mike Wilson joins us here, chief US equity strategist and CIO at a little shop called Morgan Stanley. I started Yesterday was my 40th anniversary on global Wall street. And throughout my entire career, Morgan Stanley has, in my opinion, the best tech research on global Wall Street. You think about Mary Meeker, Frank Quattrone on the banking side and all that kind of stuff. Mike, what are you guys saying about AI these days? That's the theme arguably of our career more than the Internet. What are you guys saying about that?
- [18:09]
Mike Wilson
Yeah, I mean it's more of the same. So I mean, little known fact, I guess I started the. I was orig, original tech sales tech, you know, desk analysts in the 90s. And so I saw front row seat to the whole boom and bust of
- [18:23]
Tom Keene
that Henry Blodgett, Frank Quattrone.
- [18:27]
Mike Wilson
Yeah, I mean, so all these names and everything else. So anyways, the point is that this is just another capex. This is just the next tech cycle. Okay. And so there are a lot of similarities, there are a lot of differences, but we're in the mix, we're in the middle of it right now. And that's what we've been saying. And that continues. And the reason why I feel confident it's not at the end of the road yet is because the capital markets are still funding this and the companies are being rewarded for it. Meaning when we look at this carefully, you know, capex to sales ratio as a factor is being rewarded in the marketplace. Okay. In other words, if you're spending more, the stock goes up. Now eventually that'll start, it'll start to be a headwind and we'll, you know, figure out when that is. And when that starts to happen, you got to worry. The other thing I would be paying attention to is credit spreads. Right? And so for some companies, their credit spreads have blown out or CDSs have gone up because at the margin we're seeing, at the margin, some companies are not being rewarded for higher capex now because they're viewed as a loser. Okay. But that, broadly speaking, that's not the case yet. So there's usually early warning signs. There's canaries in the coal mine that tell you, okay, they're overspending. I'll say this, this is probably not a house for you, but it's my view there's a 100% chance there's going to be malinvestment here. Okay.
- [19:32]
Tom Keene
Yes.
- [19:32]
Mike Wilson
Just like every major capex, that's not a crazy statement. Okay. It's no different than Fracking, it's no different in railroads, no different in electricity cycles. So but we're probably not there yet. We don't know. And the other thing to keep in mind is that the marginal cost to compute, the marginal cost of the product itself has to go to zero for it to work. It will go to zero, there'll be all you could eat plan. But we're in that transition period. There's going to be, I think we're now in the transition from the picks and shovels to the adopters. We're seeing actual adopters of the technology are becoming more efficient, driving revenue, not just cutting costs by hiring fewer people. That transition could last probably several years and then ultimately, you know, we'll have, we'll have the other side of it.
- [20:10]
Tom Keene
By the way, Jim Chanos was on with Tom and Scarlett last Friday on Bloomberg Money, their new program every Friday at noon. And of course he's a short seller and he's talking his book to some extent but he did say that, you know, during the dot com era at the tail end earnings were up 30% and the next year they were down 40 because people were putting in these massive orders due to huge capex ramp up and then all of a sudden they disappeared. How do you know when we're going to get there? Because I know you look at forward earnings and earnings revisions that are still, are they still to the upside?
- [20:47]
Mike Wilson
Yeah. So we are seeing a peak rate of change though in the revision breadth in a lot of different areas. And you know, one of those is semiconductors where we haven't seen it roll over but it's at such a high level it can't sustain. So think about this. Since ChatGPT was announced in I guess November 22nd now we've had three decent corrections in this bull cycle of capex. Three different times we've seen these stocks go down 30 to 50% so we can have a 30 to 50% drawdown and still have the long cycle in. And that's what I expect to see. You know, I suspect we'll see another one of those scares. And by the way, you know, in March the memory stocks were down 30 to 40%, should have bought them and then they went up five times. So you know, like trying to trade that back and forth is for, for the pros only, you know, we try to do that a little bit but like for the average person. So I don't think it's the end but, but boy, I mean you to think that you can't have these big Kind of, you know, cyclical resets. It's pretty naive.
- [21:43]
Matt Miller
Morgan Stanley Equity trading DESK Serious people,
- [21:46]
Tom Keene
they know what they're doing.
- [21:47]
Matt Miller
Serious people, man. I traded against them for years. I'm not sure I ever made it. Good on that. Hey, Mike, when you see mega IPOs like SpaceX, like Anthropic, like OpenAI coming, does that tell you anything about the market in general?
- [22:01]
Mike Wilson
Well, the appetite's still there. I mean, like, that's what I said earlier. Like, you know, the market is absorbing a lot of paper. And it's not just in equities, by the way, it's in credit.
- [22:09]
Matt Miller
Yeah, Nvidia came out with a bond.
- [22:11]
Mike Wilson
Yeah, I mean, we've seen massive credit offerings. Which means what? It means that the market is funding these expenditures. It's, it's unlikely these companies are going to raise the money and not spend it. Okay, so that's why everybody's so excited about semiconductors. But to your point, Matt, earlier, like, you know, the market's not dumb, okay? Like, and people say, oh, this is what happened in the news today. I mean, I don't, do I care if I'm an equity guy, Do I really care? Not really, because it's usually the market's thinking six months in advance. And that's why we look at these indicators like revision breath, because they're canary. That tells me things are accelerating. I mean, one of the reasons we got so bullish last year, we were debating this on your other show, is we saw the revision breath just going, and we had a different view. But that was our, we're almost cheating, right? We can see like in three months, which can happen to actual earnings. It's a tell. And so that's why I'm so focused right now that we're at such high levels on rate of change that it has to come off a bit. But I don't think it's the end. It's a, it's a reset a little bit on the, on the rate of change.
- [23:06]
Tom Keene
By the way, I, I, I normally anchor Bloomberg Open Interest, which airs on Bloomberg television weekdays from 9am to 11am
- [23:14]
Matt Miller
Are you doing that today or.
- [23:15]
Tom Keene
MIKE Wilson, FREQUENT GUEST yeah, I'm doing that today as well.
- [23:17]
Matt Miller
But radio and tv?
- [23:18]
Tom Keene
Well, I prefer radio, to be honest. I know I listen to this program every, every day. So it's a real honor to be on with you. Lou Wang from Bloomberg News wrote a great piece last week. I think about all of the equity coming to market in the next two years. JP Morgan estimates one and a half trillion dollars of net equity coming to market as opposed to the last 20 years, we've seen $12 trillion taken out of the market through corporate buybacks. Is that about face concerning to you?
- [23:47]
Mike Wilson
Yeah, I mean, once again that can lead to corrections. So I mean we've been very focused in the last two months. As you read our research, you'll know like on liquidity. Okay. So and by the way, earlier this year people were kind of bearish on the economy and bearish on basically that things were going to be softer in earnings. That turned out to be true. But what they should have been focused on was that the Fed was kind of transitioning. They were going from being less dovish on rate guidance, but then more dovish on liquidity. So that actually helped stocks to bottom in March. I'll just tell you right now that that liquidity picture is actually somewhat deteriorating now. So today's meeting with the new Fed chair is going to be important to say, okay, well how are you going to think about the rmp, the reserve management program or purchases? And how are you going to think about, you know, managing kind of liquidity picture in the face of liquidity being sucked out of the marketplace? And there's three, there's three draws on liquidity now. One is all this issuance, both in equity and fixed income. The other one is, is on the economy itself.
- [24:47]
Karen Moscow
Right.
- [24:47]
Mike Wilson
The economy itself is absorbing capital in a way like we haven't seen. So the other big change, Matt, from not just the fact that we're seeing net issuance perhaps, but we're also seeing net consumption of liquidity in the real economy. We haven't been investing for 20 years. We've been in a world of financial repression. So that just means it's more volatile. You're going to get this more volatile world, but it also leads to higher nominal GDP growth. That's why I'm not worried about earnings growth at all. I'm worried about the multiple and these sort of drawdowns that you get because of this volatility and liquidity and then the peak rate of change on revisions.
- [25:17]
Matt Miller
Mike, thanks so much for joining us. Appreciate it. Mike Wilson, Chief U.S. equity Strategy Masterclass as usual. Absolutely. Stay with us. More from Bloomberg Surveillance coming up after this. Support for the show comes from public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public you can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by 0/ash all investing involves risk of loss. See complete disclosures@public.com disclosures being a small
- [26:30]
Karen Moscow
business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools looking for tips and advice, their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more@chase.com business chase for business Make More of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.
- [27:28]
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- [28:25]
Karen Moscow
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [28:38]
Matt Miller
We welcome right now Craig Peters, post CIO of P Jim Credit. He is a proud graduate of one of my favorite schools, the College of New Jersey in Ewing, New Jersey. I've hired a bunch of those kids at Bloomberg Intelligence in Princeton. They're doing a great job for us. Greg, in the credit markets here, do I take credit risk here? I mean I. I feel like I can just sit and hide away in a two year treasury at 4%. Do I need to take credit risk above that?
- [29:07]
Greg Peters
I think that's something that's very much top of mind. I think cash is attractive, I think base rates are attractive. Our bias is to lean into that. I look at the credit markets from a passive beta broad perspective and they look quite expensive. So spreads are just calling the richest decile that we've seen the past 25 years or so. So the value proposition in credit from just a broad allocation standpoint is not great. At the same time I will tell you that the dispersion in the market and the opportunities and the ability to really take advantage of dislocations is the best I've ever seen it. So it's quite a dichotomy I guess, in a way. So at one side I'm really not over enthused around the credit market and then on the other I'm quite enthused from an idiosyncratic perspective.
- [30:03]
Tom Keene
Dispersion is a word I hear a lot from credit investors. I just talked to Bruce Richards from Marathon and he was all in on that point as well. Can you expand on that? For somebody who lives in the equity world or a couple of guys who do like me and Paul.
- [30:18]
Greg Peters
Yeah. So the markets are separating the strong from the weak. As a credit investor, you really enjoy the marketplace when companies are not necessarily at top of their game, so to speak. Credit spreads are tight at the index level for a reason and that is because fundamentals are pretty good. But what that masks is that not all sectors, not all companies are doing well. The ability for credit investors who actually do the credit work to take advantage is quite robust. Stated differently, you have bonds or loans, some trading at 6%, some trading at 12%. So it's giving you an opportunity to kind of sift through. And the second point is this AI buildout. Well, there's just so much debt hitting the market in so many different forms, whether it's in kind of A structured form spv, whether it's high yield loans, direct lending. So it's really creating a fantastic opportunity.
- [31:28]
Matt Miller
How do you think about that paper, Greg? All the AI paper that's been hitting the market here, there's a lot of issuers here, great credits, but they haven't really been big in the credit markets until recently. But it seems like the market can absorb anything they want to bring to market for now.
- [31:48]
Greg Peters
So this is going to be a continued onslaught. So I think of it three parts right now. We're very much in the early stages, so I would not rush to enter, particularly the unsecured side of the market. You're speaking about the Mag 7. That paper just continues to hit, let's say, the investment grade corporate market. I expect that to continue. I do not think that is good value. I expect more paper to come. Those spreads will continue to be under pressure. If you look at some of the max seven spreads, those spreads have more than doubled over the past 12, 18 months. So the market's repricing that risk. I think it'll continue to reprice that risk. And so I don't view that as a good proposition. I see much, much better value in areas in the market where you can get similar risk tied to those Mag 7 names that actually have structure and collateral attached to it, actually wider spread. So I think the market's fundamentally mispricing that and that's where we're focused.
- [32:59]
Matt Miller
So, Greg, I mean, if I'm Morgan Stanley, Goldman Sachs, JP Morgan Salesman, I call you. You're not picking up the phone to buy this stuff.
- [33:06]
Greg Peters
Well, we're always picking up the phone, but it's a relative value decision. And I think investors like us, big money managers like pjem, we have kind of the opportunity to look across and take advantage. So we don't necessarily have to be invested so we can look at it. But if we are investing, it's a recycling type of trade. What I mean by that is the technicals, as you mentioned, are still quite strong. So we'll buy it, we'll sell it, and we'll get another deal to come. So there's no reason to dive headfirst into this marketplace on the unsecured Mag 7 AI build out because there's a lot of paper coming down the pike.
- [33:57]
Tom Keene
By the way, what does, what does Kevin Warsh gonna do today, remember today's first meeting. But we need to gauge, you know, we have this Fed spectrometer, for example, on the Bloomberg terminal, FD sp go. We finally put him in and he gets a minus two rating. And that's like Max Dovish. I thought he was a hawk.
- [34:21]
Matt Miller
I didn't know this function FDSP go.
- [34:24]
Mike Wilson
Yeah.
- [34:25]
Greg Peters
That's what makes it so interesting. Right. So if you look at his body of work and his communication throughout the years, he decidedly leans hawkish. But you know, in the, you know, the interview process, let's just call it that, he, you know, definitely had a more dovish tilt. We think he cares.
- [34:48]
Tom Keene
How else could he get the job? That's the only way you can get the job. Right. When you're around President Trump, you have to agree with President Trump. You have to say, emperor, you have a beautiful set of new clothes.
- [34:58]
Greg Peters
Yeah. Yeah. And so I think he's playing a different game. And so what I mean by that is let's do a thought experiment. So let's say he comes out today and he cuts interest rates by 100 basis points. What happens to back end yields? They're just going to explode higher. So I think he's trying to convince the administration that the way that you actually keep a cap on interest rates, in fact maybe even bring interest rates down, is to have a more hawkish tilt, not a dovish tilt. So I don't know if he'll be successful around that. But I think that's the idea. The data are too strong. Inflation's too far away from their mandate to really have this easing bias here. So even if I think he wants to ease, which I don't think he does necessarily, that easing bias just looks out of place given kind of the broad macro that we're seeing.
- [35:58]
Matt Miller
All right, Greg, thanks so much for joining us. Appreciate it as always. Greg Peters, he's the co CIO at PJIM Credit, they're in Newark, New Jersey. Monster amounts of capital there. If you're a Goldman Sachs salesman or Morgan Stanley salesman and you're selling debt, one of your first phone calls is to pjim because that's how big they are. Stay with us. More from Bloomberg Surveillance coming up after this. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called generated assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend, small cap stocks with improving operating margins or the s and P500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria, but on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures@public.com disclosures running a small
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Karen Moscow
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- [39:34]
Karen Moscow
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [39:47]
Matt Miller
Roger Goyal joins us here in studio. He's a candidate for the New York State Comptroller. Those are the dudes that run and take care of and manage the money of the state of New York. Extraordinarily.
- [39:59]
Tom Keene
They decide how much SpaceX will invest in.
- [40:02]
Raj Goyal
Oh, well, we'll talk about that.
- [40:04]
Matt Miller
Raj, thanks so much for joining us here.
- [40:05]
Raj Goyal
Good morning. Thanks for having me.
- [40:06]
Matt Miller
Talk to us about your platform here. Raj, as you think about becoming the comptroller of the state of New York, what are you thinking about these days? What's top of your mind?
- [40:15]
Raj Goyal
Well, I think you know this is a Democratic primary and again, thanks for having me. People want change and they want people who will stand up and tackle this affordability crisis that's choking all of New York. And for Democrats, of course, you want to stand up to the Trump administration. I'm, I think, a pretty unique guy. I've been in public office. I've started and run a company that I started from scratch and successfully sold. And I've got a real vision for the fact that we can lower utility rates, we can build affordable housing, and frankly, we can have a pension fund that reflects our values. Right now we are investing in some companies, I think trouble a lot of New Yorkers, Palantir, for example. I definitely want to talk about SpaceX. The current incumbent's been in Albany for 40 years. He's not known by most of the public. I think it's very concerning. Your previous guest was talking about the SpaceX manipulation, which is what I'll call it on the Nasdaq on the index, to get into that. That's a key investor protection that's being eroded. Current state comptroller is completely silent on that and we need to change that.
- [41:09]
Tom Keene
So, I mean, I want to get into your background and how you succeeded as a Democrat in a red state previously. But let's wrap this up on Space X then. I mean, it's going to go into the NASDAQ 100 without really any seasoning at all. It's going to be float magnified. Essentially. This is a company worth now almost $3 trillion that only has $85 billion in float. And that compares with other companies at that level, have $1 trillion in float. What do you do as comptroller to try and Limit your exposure to that because you're going to own, I imagine, ETFs, the Qs, whatever, you're going to have it automatically.
- [41:50]
Raj Goyal
Well, look, even regardless of the exposure of the, of the pensioners in New York State Common, the role of the New York State Comptroller should be to go to the index funds and sound the alarm bell here. So we have had a little bit of comment around the governance structure of SpaceX that's gotten very little attention. The fact that he can't, he's chairman and CEO. You know, I would have loved that when I was running my company.
- [42:10]
Tom Keene
I mean, Jamie Dimon is chairman and CEO. So all the successful ones are.
- [42:14]
Mike Wilson
Right.
- [42:14]
Raj Goyal
Well, but the thing is there's a lot more fiduciary duties. There's a lot more, there's a lot more accountability that Jamie Dimon face even, even at even a JP than Elon Musk has. This is his private fiefdom. Let's be, let's be real here. There's no real accountability for his conduct and so, and how he runs the company, so that's a governance issue. But as far as you're saying is it affects average investors. The state comptroller controlling, as we were talking about, a $300 billion pension fund should be sounding the alarm bell to the markets because there's 80, at least almost $100 billion of New York State taxpayer money that are in public indexes, that are in the indices. And so it is the logical watchdog. You know, I like to say that I'm going to be the affordability watchdog and that includes investor protections. And so this office is asleep at the switch, is not known for being active on this. And this is a logical role. And I think, you know, and your previous guest mentioned this, this is only, I think the canary in the coal mine. NASDAQ caved here. The S and P held firm. Let's see what happens when these new giant IPOs come. I think we're going to see a continued erosion of investor protections. And that really harms New Yorkers and it harms investors all across the country. And the New York State comptroller should be a leader on that and he's not.
- [43:22]
Matt Miller
I. It's certainly the front and center issue for global Wall street over the last several years. Sure. One of the concerns and one of the issues is how do you power this thing? How do you electrify this AI revolution and who pays for that? And there's some concerns that consumers through their higher electric bills are paying some of this. How does that work in the state of New York?
- [43:46]
Raj Goyal
Oh, it's completely broken. I'm really glad you asked that, because right now we've got about almost 30 data centers that are in the docket. And what you're having is actually right left, rural urban outrage. Have you seen these community meetings where they're saying, what are these data centers? I mean, generous tax breaks. I mean, ratepayers are on the hook for these. There is, you know, a small but very powerful commission in Albany, you may know, called the Public Service Commission. That is a rubber stamp for these utility companies that come in. Everybody knows the utility industry is completely broken. They have a guaranteed rate of return. You know, somebody said that the utility industry is the only industry where you're paid to decorate your office because the capex you get a guaranteed rate of return. And so I was the first in this race and I have been a very loud critic of these data centers. I support the moratorium that just passed the legislature. And of course we wanna be innovation forward, but the last thing we wanna do is takeis. Subsidize Jeff Bezos. I don't think we need to subsidize Elon Musk. You and I, we all pay for this stuff. And right now, our Con Ed bills, national grid bills going through the roof. Everybody's hacked off about this, and they should be.
- [44:52]
Tom Keene
I wanna ask how you win as a Democrat and you did this in a red state in Kansas, not only as a democr.
- [44:59]
Raj Goyal
He's a very progressive Democrat.
- [45:00]
Tom Keene
Exactly. A progress and anti nra. I imagine Kansas is a place where they love their. At least their long guns.
- [45:06]
Raj Goyal
Yeah.
- [45:07]
Tom Keene
How do you do that? I think Democrats as a whole, nationally are struggling with this. With this question. How do you unify especially such a broad party?
- [45:17]
Raj Goyal
Well, I think it's very simple, actually, which is if we talk about issues that voters actually care about. The Democratic Party lost its way when it became captive. Basically a bunch of beltway consultants. When we talk about the affordability crisis, when we talk about lowering utility rates, investing in affordable housing, getting for, you know, especially Democrats, ice out of New York, you know, and that is, again, a. Not a Democrat. That's a left right consensus that we shouldn't be terrorizing Americans. This is not what people signed up for. And so that's what people are looking for from a Democratic Party. That's why I'm running. That's why I often say that we need better Democrats, Democrats who fight and who actually reflect our values and, and make life better for the average person, they're being rewarded at the ballot box.
- [46:00]
Tom Keene
By the way, Raj, how do you do it? Let me ask you a personal question. You went to Duke, and then you went to Harvard Law. You could be minting money. And you went to work for the naacp, for Public Citizen, for the aclu.
- [46:13]
Matt Miller
You have kids.
- [46:14]
Tom Keene
You live in New York. It's expensive.
- [46:17]
Raj Goyal
Well, look, I'm very proud of the fact. I appreciate you mentioning that. I've just always been dedicated to making things better. And I did spend some time in the private sector because I was fixing bloat and corporate waste and legal budgets and fixing these systems is what really animates me. And I think the state comptroller's office right now is frankly broken, and it is not relevant to people's concerns. People should know about this office. Frankly, it should be the national international leader on these issues, like on SpaceX, investor protections and so on. But instead, we've got a state comptroller who, frankly, is part of that Albany machine, 40 years up there taking corporate cash, super PACs, part of the inside machine. We need change.
- [46:57]
Matt Miller
Raj, thanks so much for joining us. Appreciate it. Raj Goyal, candidate for the New York State Comptroller in the primary coming up. We appreciate getting three minutes of your time.
- [47:06]
Karen Moscow
This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, and anywhere else you get. Your podcasts listen live each weekday 7 to 10am 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.
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