The US Macroeconomic Picture

Summary

Bloomberg Surveillance Podcast: The US Macroeconomic Picture

Date: June 30, 2026
Hosts: Tom Keene, Paul Sweeney, featuring Jonathan Ferro, Lisa Abramowicz, Annmarie Hordern
Notable Guests: Bob Michele (CIO, JP Morgan Investment Management), Chris Merengue (CIO Value, Gabelli Funds), David Westin (Bloomberg/ABC), Ellen Wald (Senior Fellow, Atlantic Council), Tani Fukui (MetLife)

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Episode Overview

This episode offers an in-depth examination of the current US macroeconomic landscape, exploring pivotal topics including Fed policy outlook, bond and credit markets, emerging markets resilience, sectoral investing trends, the intersection of technology and capital markets (notably AI), the future of the media and sports industries, and the global geopolitical and energy outlook. The discussion is driven by expert interviews, rich commentary, and lively back-and-forth among the hosts and guests.

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Key Discussion Points & Insights

1. State of the US Bond Market & Fed Policy

Guest: Bob Michele, JP Morgan
Timestamps: 01:45–08:20

• Fed Rate Hike Expectation:

  • The Fed is setting up task forces likely knowing already what actions must be taken. Powell "wants to glide into 2027 without having to do much," but market and economic pressures are likely to force clarity as soon as September.

    “You don’t set up task forces unless you already know the answer.” – Bob Michele [03:06]

• Bond Market Outlook:

  • The US 10-year Treasury yield is currently in a fair value range (4.125% to 4.625%).
  • Markets are pricing in one, maybe two more rate hikes—"the bond market looks pretty good right now." [04:01]
  • "If [the Fed] comes in and leans into growth and inflation pressures, they don’t need to do a lot. Maybe one or two maintenance hikes..." – Bob Michele [04:01]

• Credit Risk & Investment Trends in Europe:

  • Taking significant credit risk; global business investment is robust, particularly in sectors like energy security, defense, and AI.
  • Investing by sovereigns and corporates is keeping the pace for global economic “trend rate.” [04:44–05:28]

• Emerging Markets Resilience:

  • Emerging markets have weathered multiple shocks (Fed hikes, COVID, oil shock). Notably, China’s strategic energy moves have underlined the maturity of EM economies.

    “The emerging markets are maybe have developed faster than we want to give the term emerging markets credit for.” – Bob Michele [05:31]

2. AI, Hyperscalers & Tech Sector Debt

Timestamps: 06:34–08:20

• AI and Market Investment:
  • Ongoing debate on AI's market impact.
  • Debt issued by hyperscalers (major cloud/tech companies) has been well absorbed by the market; strong capex in early years, payback expected later. Tech firms show financial prudence.

    “The amount of debt that they’re adding is hardly noticeable on their leverage metrics.” – Bob Michele [07:04]

• Diversification & Market Absorption:
  • Tech companies have diversified debt across markets and currencies; concerns about debt “overwhelming the market” are unfounded given the size of the bond market.

    “A couple trillion here is not a lot of money. It’s maybe about 5% [of the bond index].” – Bob Michele [08:20]

3. Career Advice for Interns

Timestamps: 09:01–10:31

• Make the most of technological tools (especially AI), and observe leadership and organizational dynamics.

  “The way to differentiate yourself is to make use of the current tools that are available in the marketplace that...the senior investors...aren’t really skilled at. So, AI is one.” – Bob Michele [09:25]

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4. Sports Industry and Madison Square Garden Analysis

Guest: Chris Merengue, Gabelli Funds
Timestamps: 13:14–14:54

• Value of Sports Teams:
  • Sports franchises seen as strong stores of value; “winning helps, but it’s not everything."

    “They actually are good businesses. Capital light. They’re tribal audiences.” – Chris Merengue [13:47]

  • Knicks' enterprise value hits $10B; comparison with LA Lakers sets a market benchmark.
• Financial Moves:
  • Team splits and tax code changes (section 162M) cited as evolving influences on sports business economics.

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5. Media Industry Disruption and Future

Guests: Chris Merengue, David Westin
Timestamps: 15:08–23:10

• Cable/Streaming Consolidation:

  • Comcast’s NBC Universal split reflects larger industry trend toward flexibility and consolidation.
  • Content libraries central to streaming survival; “you need a huge library”—why Disney bought Fox. – David Westin [18:41]

• Live Programming as a "Moat":

  • Live sports and live news create pricing and audience differentiation; replayable content is worth less.

    “Live is the new moat.” – Tom Keene [19:39] “It’s worth most when we listen to you live. And that’s what advertisers are paying up for.” – Chris Merengue [19:45]

• News Polarization & Business Models:

  • With increasing polarization, networks pick 'sides'.

    “It’s a battle for the middle. CNN is fading. News Nation is coming...” – Chris Merengue [21:03]

  • David Westin: The business model for network news is eroding—no more ‘moat’ around general news, except for scarce live coverage or specialization.

    “There’s no moat around the business anymore. You can’t charge unless there’s scarcity.” [20:33]

• Rise & Fall of Media Moguls:

  • Fewer new 'mogul' icons; media landscape now shaped more by corporations and tech platforms.

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6. Global Trade, Geopolitics, and Oil

Guest: Ellen Wald, Atlantic Council
Timestamps: 27:43–32:34

• Middle East Alliances:

  • Sunni-Shia rift remains culturally/religiously profound but is less of a driver in contemporary geopolitics, e.g., Iranian support of Hamas.
  • Gulf states increasingly pragmatic, seeking to balance between Iran's regional influence and traditional Western alliances.

• US as a Regional Ally:

  • Critically, Gulf states (esp. UAE) may doubt US commitment if the US wavers on securing free Strait of Hormuz passage.

    “If the United States gives in on this in any form, it’s a sign...the US is not a partner that will support them.” – Ellen Wald [29:56]

• Oil Supply and Future Prices:

  • While more oil may begin flowing from the gulf, logistical challenges and uncertain Chinese demand cast doubt on ultra-low price targets ($50/barrel).

    “If China decides...not to buy that extra 4–5 million barrels a day, then...we’re going to be in a big oil glut.” – Ellen Wald [31:33]

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7. AI as a Productivity Driver and Fed Communications

Guest: Tani Fukui, MetLife
Timestamps: 36:11–41:45

• Trade Friction & Inflation:

  • Shifting global trade patterns keep inflation above target (“getting to that 2%” is harder), compounding the effect of supply shocks.

• State of US Consumer:

  • Aggregate consumer strength is buoyed by jobs and manageable debt/debt service ratios.

    “Consumers say they’re unhappy, but they don’t spend like they’re unhappy.” – Tani Fukui [38:05]

• AI: Hype or Productivity Revolution?

  • Long-term net positive for productivity, but short-term impact may be bumpy—draws parallels to the early dot-com era:

    “You didn’t really have the productivity benefits until a decade or so after that.” – Tani Fukui [39:41]

• Fed Communication in the Social Media Age:

  • Current Fed Chair taking a “say less” approach, but this may be less effective with today’s rapid media environment, unlike the Greenspan-era.

    “If you don’t speak, everybody else will fill in that vacuum for you.” – Tani Fukui [40:28]

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Notable Quotes & Timestamps

| Timestamp | Speaker | Quote | |-----------|-----------------------|-----------------------------------------------------------------------------------------------------------------| | 03:06 | Bob Michele | “You don’t set up task forces unless you already know the answer.” | | 04:01 | Bob Michele | “The bond market looks pretty good right now. It has a repricing the Fed.” | | 05:31 | Bob Michele | “Emerging markets are the pleasant surprise of the year so far...maybe have developed faster than we give credit.”| | 07:04 | Bob Michele | “The amount of debt that they’re adding is hardly noticeable on their leverage metrics.” | | 09:25 | Bob Michele | “Make use of the current tools...the senior investors...aren’t really skilled at. So, AI is one.” | | 13:47 | Chris Merengue | “Sports teams...are good businesses. Capital light. They’re tribal audiences.” | | 18:41 | David Westin | “The big move is technological. It’s streaming...you need a huge library.” | | 19:39 | Tom Keene | “Live is the new moat.” | | 20:33 | David Westin | “There’s no moat around [general news] anymore. You can’t charge unless there’s scarcity.” | | 21:03 | Chris Merengue | “It’s a battle for the middle. CNN is fading. News Nation is coming...” | | 29:56 | Ellen Wald | “If the US gives in on this in any form, it’s a sign...the US is not a partner that will support them.” | | 38:05 | Tani Fukui | “Consumers say they’re unhappy, but they don’t spend like they’re unhappy.” | | 39:41 | Tani Fukui | “You didn’t really have the productivity benefits until a decade or so after that.” | | 40:28 | Tani Fukui | “If you don’t speak, everybody else will fill in that vacuum for you.” |

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Segment Timestamps Overview

| Topic/Guest | Segment | Timestamps | |----------------------------------|-----------------|-------------| | Fed & Bond Markets—Bob Michele | 01:45–08:20 | | AI, Tech Debt | 06:34–08:20 | | Intern/Career Advice—Michele | 09:01–10:31 | | Sports/MSGS—Chris Merengue | 13:14–14:54 | | Media Industry/News—Merengue/Westin | 15:08–23:10 | | Global Oil/Geopolitics—Ellen Wald| 27:43–32:34 | | Productivity, AI, Fed—Tani Fukui | 36:11–41:45 |

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Conclusion

This episode skillfully weaves together major threads impacting the US and global macroeconomic environment: central bank navigation, sector rotation, the absorption of massive tech investments, live content’s evolving role in media, and the shifting sands of international trade and energy. Guests provide not only outlooks but also practical lessons—whether it’s managing career development in the age of AI or understanding why sports teams and content libraries remain resilient against volatility and tech disruption.

If you want insight into how institutional investors, economists, and media insiders are interpreting—and navigating—the crosscurrents of 2026, this episode is essential listening.

Transcript

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[Paul Sweeney]

we get into it, little side note for the IT leaders listening in. I was reading up on a Microsoft Commission survey the other day and learned that teams using Windows 11 Pro PCs report 62% fewer fewer security incidents compared to Windows 10 PCs, including three times fewer firmware attacks. Pretty significant. With security built in, you'll have AI ready it. That sets you up for operational efficiency as well as long term resilience. Upgrade to Windows 11 Pro at Windows means business.com

[Podcast Host/Announcer]

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.

[Tom Keene]

We are advantage and particularly that we're not under the time pressure of the Fed decides to someone that's been a foundation of our thinking about our central bank and bills, notes and bonds. Bob Michael joins us now. Cio, Head of GF ICC what global

[Bob Michele]

fixed income, currency and commodities got them all.

[Tom Keene]

He attended every restaurant, new building and they gave him that honorarium. JP Morgan Investment Management do you know what worse strategy is yet?

[Bob Michele]

Other than to set up task forces, it's not clear.

[Tom Keene]

How long will it take? Based on the history of central bankers,

[Bob Michele]

Powell for example, we think his hand will be forced sooner than he likes it. Clearly by having the task force come back at year end, he wants to glide into 2027 without having to do much. But the markets move, the economy moves, the summers tend to a crucible of intensity. So we think by the September meeting he's going to have a plan.

[Tom Keene]

I got to get. I got to get this in. It's too important. Paul's got a million smart questions. I'm assuming James Dimon hates task forces with a passion. What do you expect to get out of a task force, plural, from the Fed?

[Bob Michele]

Well, it depends who's leading them and who's on them. I think they'll come back with very thoughtful ideas in the end. You don't set up task forces unless you already know the answer. So he knows the answer. It's just a matter of seeing if he can pin it on the task force or just go ahead and say do it this way runs it folks.

[Tom Keene]

You just heard they're absolutely perfect.

[Paul Sweeney]

Tom, I don't want to say Bob is old here, but let's say he's been around the block once or twice. Look at this note. The US bond market looks fair value. We expect a 10 year US treasury to trade between 4 and 1 8th and 4 and 5, 8. He's quoting fraction. I mean who does that anymore, Bob? Michael, talk to us about that 10 year. I mean it feels like we are where we are and that's kind of where the market feels pretty comfortable here. What do we do here with in with rates here where they are?

[Bob Michele]

Well, in two and a half months we went from 392 to close to 470 and. And both of those prove to be extremes. We're somewhere in the middle. We're pricing in one, possibly two Fed rate hikes. I think 4 and 58 covers you for two rate hikes. Think we need to get down to 4 and an eighth. Probably you don't have enough yield in the market to cover you for a rate hike or two. So we're saying the bond market looks pretty good right now. It has a repricing the Fed. If they come in and lean into growth and inflation pressures, they don't need to do a lot. Maybe one or two maintenance hikes join the other central banks, but that's about it.

[Paul Sweeney]

How much credit risk are you taking these days in Europe?

[Bob Michele]

We're taking a lot. We had our investment quarterly last week. We tried, as bond investors do, to poke holes in the economy and prove that either it's about to collapse or or melt up in a fireball of growth and inflation. And instead what we saw was is that businesses are rationally putting together capex plans. There's a lot going on. When we think about sovereigns away from the U.S. they're also thinking about investing. Everyone wants energy security, everyone wants defense of their borders. Everyone has to invest in AI. So these are things that will keep the underlying trend rate of the global economy going.

[Paul Sweeney]

Does that include emerging markets as well?

[Bob Michele]

Well emerging markets are the pleasant surprise of the year so far. Here is yet another shock that they survive. They survive. The Fed's 525 basis point rate hikes never happened before. They survived Covid and now they're surviving an oil shock. It's a little bit more nuanced. We had own the energy exporters we've now gone back to the importers but when you look at the way China was able to cut imports of oil and repurpose how they get energy it tells us that the emerging markets are maybe have developed faster than we want to give the term emerging markets credit for.

[Tom Keene]

That's across America and worldwide. Bob Michael of JP Morgan here perspective from Bill's notes and bonds of course dragging it over to the equity markets as well. So I skim for all the weekly prices prospects comes out every Friday evening. I've got a pause with a beverage of my choice Paul to read for all the team.

[CBOE Representative]

Okay.

[Tom Keene]

And what to say and I'm sorry it's a pretty balanced view and I'm hearing from you a balanced view. Bill Ackman is out today with a retreat of a plus plus plus on hyperscalers from a guy out of UniCredit in Slovenia is well there's all this heat, this ferment, this, this, this smoke and mirrors debate about AI you guys are doing business in it. How are the bonds, the debt of a hyperscalers being digested by the public?

[Bob Michele]

Well so far they've been digested pretty well. I think we've all seen when a new technology revolution comes along it's not all over in one or two years. It tends to run for a decade and the first half of that decade is where the capex gets invested in. The second half is where you get the payback. Right. The hyperscalers have very pristine balance sheet so the amount of debt that they're adding is hardly noticeable on their leverage metrics.

[Tom Keene]

Do you look at them as a tranche now? An initial gazillion dollar tranche and then there'll be a second one into 27 and a third. Is it going to stagger forward 20 or 20 there? 20 down the road?

[Bob Michele]

Well you look at what some of them have raised and you wonder where it is other than sitting in cash or some sort of short duration account because they aren't fully spent yet. So yeah it's possible they'll be back next year. I think they have to start spending what they've raised so far and that takes some time.

[Paul Sweeney]

How do you think about all this technology debt coming to the marketplace, because this is the. These companies haven't historically been in your market raising capital, but it seems to have been well received so far.

[Bob Michele]

We're impressed because certainly you get worried that trillions of dollars of debt could overwhelm the market. When we look at the Bloomberg aggregate bond index, it's 40 trillion. So a couple trillion here is not a lot of money. It's maybe about 5%. And that couple trillion will come in over three or four years. We've also been impressed about how intelligent the hyperscalers have been. They've diversified across markets. They've issued some in euros, some in Canada dollars. There will be some in Mexico peso and some in Japanese yen. And then they've gone to some hybrid structures to finance the data centers.

[Tom Keene]

So JP Morgan gets 500,000 applications for summer roles.

[Paul Sweeney]

Oh, wow.

[Tom Keene]

And they weeded out with an acceptance rate, frankly, under 1% to 4,000 summer interns. Bob Michael's got to wander into a room with a bunch of emotional, really, really smart, really competent kids. What's your first message to him?

[Bob Michele]

My first message is the way to differentiate yourself is to make use of the current tools that are available in the marketplace that, you know, the senior investors in the platform aren't really that skilled at. So AI is one. When I came into the industry, it was electronic spreadsheets. Do that. And secondly, observe what's going on. You'll see who the leaders are and the traits that are characteristic of them. You'll also see people who you feel well because of their characteristics and traits. They're being held back. So keep your eyes open and observe.

[Tom Keene]

I really emphasize the last thing you just said is forget about trying to find wonderful people like Kelsey Barrow is just an idea. Figure out the people that aren't getting it done. That's the biggest lesson from an intern. Now, you didn't mention this, that part of the training of a JP Morgan intern is to master the Bloomberg professional service. Of course, that's a gift to nail.

[Bob Michele]

That was always in technology. So, okay, we do send them for training.

[Paul Sweeney]

We need to be in here every day.

[Tom Keene]

Coming to Bob Michael lecturing on the Bloomberg terminal to interns, the cherubs J.P. morgan, he drives all of fixed income. Stay with us. More from Bloomberg Surveillance coming up after this.

[CBOE Representative]

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[Paul Sweeney]

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[Tom Keene]

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[Podcast Host/Announcer]

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[Tom Keene]

I got a line item on Madison Square Garden Sport Group at Capital Expenditures that doesn't include what it's going to cost to keep my Jalen in my household. It's not Jalen.

[Paul Sweeney]

No, it's my Jalen.

[Tom Keene]

Yep, I understand Chris Merengue is our Knicks expert here. We're thrilled he could join us. CIO Value at Gabelli Funds Just throw it. He could come by. You have talked forever about Madison Square Garden Sports. How do you respond after what we've all witnessed over the last 90 days?

[Chris Merengue]

Well, I still have Nick's fever. Still living off of it. You know you Mentioned bitcoin earlier. I don't know that Mario would have called it rat poison. We're not. But we're not. We're not involved. We'd rather buy sports teams. They're great stores of value. They actually are good businesses. Capital light. They're tribal audiences. They allow them to exert pricing power. And winning helps, but it's not everything, you know.

[Tom Keene]

How much does winning help? Where do you see that on the income statement?

[Chris Merengue]

Well, it definitely has created more Knicks fans, including in my household. It seems like your household.

[Tom Keene]

My child.

[Ellen Walt]

But.

[Chris Merengue]

But, you know, I'm not sure the Knicks are worth materially more today than they were a month ago. They are the most valuable franchise in the NBA. You're paying at $400. The stock went from $250 to $400 this year. 24 million shares. A little bit of debt. That's an enterprise value of $10 billion. The Knicks are worth at least $10 billion based on the Lakers selling for that much earlier this year. And you get your Rangers for free.

[Paul Sweeney]

Is that why James Dolan is splitting up the team?

[Chris Merengue]

Well, lots of theories about that. One is to give them financial flexibility. There is this thing, and I won't go too deep into it at 9 o' clock in the morning, but 162M, it's a new provision of the tax code which makes it more expensive to keep players.

[Tom Keene]

Speaking of jail. And we have to bring in our next expert, Alexis Christopher with Chris Meringue.

[Tani Fukui]

Hey, you know, we kept Shammit. How excited are we about that?

[Chris Merengue]

I'm excited about that.

[Tani Fukui]

I didn't think that was going to happen.

[Chris Merengue]

We'd like to. Yeah, bring it back.

[Tani Fukui]

They want to keep the core.

[Paul Sweeney]

The core. Five starters, I think next year. Exactly. Very exciting. Chris, want to ask you about Comcast. Big announcement yesterday, splitting apart the company, the NBC Universal from the core cable broadband business there. What do you think the strategy is there and how do you guys think?

[Chris Merengue]

Well, it's a trend splitting companies. In 2009, I was here cheering on Brian Roberts, who absolutely stole NBC from ge. Trough multiples.

[Paul Sweeney]

Trough.

[Chris Merengue]

The world has changed and it's changed a lot. This split is not a surprise. The timing is a little bit of a surprise, but it definitely gives them increased flexibility. I think you'll see more consolidation, particularly on the cable side.

[Paul Sweeney]

The joke among media investment bankers is every five years Brian gets a niche and he needs to go out and do something big. What do you think he wants to do in this new world order? I can't Imagine he's splitting these companies up and Putting new. Bringing Mr. Angelakis back.

[Chris Merengue]

Right.

[Paul Sweeney]

To retire.

[Chris Merengue]

Well, Michael Angelakis is a deal guy.

[Paul Sweeney]

Yes.

[Chris Merengue]

And so that's not missed. Telecom companies need scale. You know, again, probably 10 years ago I would have been talking about the broadband hedge, which is to use Netflix, you need fast broadband that was only provided at the time by cable companies. That has been breached by fiber from the telephone companies as well as now fixed wireless. And you got more guys coming over that moat from space.

[Tom Keene]

Okay, your heritage here with Gabelli and I was a huge, huge interest in gab years ago. You guys own media. So I think CNN is with cbs. What's NBC Universal going to do? They. It's out in the zeitgeist. Rich Greenfield's talking it up. I mean, they got to mate with somebody, right?

[Chris Merengue]

Well, yeah, and there are a lot of pieces. Obviously they did the spin off a Versant at the very beginning of the year. We all remember they have another network in business. But yes, they have kept most of the sports business. The cable networks, including MSNow and CNBC, they have their own path. We love their CEO. We all like the stock and buying the stock. NBC is a bit different. Obviously the parks business, which probably the most business within NBC. But listen, there are. Netflix is showing its hand, they want to buy, probably so do some of the other big tech companies.

[Paul Sweeney]

All right, let's step back just broadly. How are you guys at Kabelli looking at the markets these days?

[Chris Merengue]

So we're in a bubble everywhere, somewhere. It's just a question of where we are in that bubble. And I think we're still mid innings, to use the sports analogy. Still tons of money obviously going into Capex. That's what's fueled the market. Earnings estimates have gone up. They've gone up more than the market. And so we're trying to focus on industries that we know, inflation conduits, et cetera. So no change in what we do.

[Paul Sweeney]

So I know you guys are really bottoms up. Look at value, fair market value, private market value. Where do you see value out there? Because it seems like that's tough to do.

[Chris Merengue]

Yeah, I mean, it's still down market, down cap, which was a wasteland for many, many years. It's where we started really finding value still there. And the indices have been dominated by semis.

[Tom Keene]

Did you ever do a conference call with David Westin? Like you're on the phone. Chris Merengue. Gabelli, what. What a wonderful quarter, Mr. West. Did you ever do that?

[Chris Merengue]

I don't think we got around to that. We do it right now.

[Tom Keene]

Joining us, David Westin. I want to get to your really important interview with Paul Krugman. David Westin, but this is just too much media here right now. I mean, I'm, I'm sorry. We have a consolidation of American media. David Westin, where are we in five years given your experience at ABC and Bloomberg?

[David Westin]

Well, I think it is consolidation. That's right. I mean, you know about this better than I do probably. But the thing you've seen with streaming, the big move is technological. It's streaming. Streaming is taking over thanks to Netflix and Now we have YouTube. And the one thing we've learned about streaming, I think is you need a lot of content. You need a huge library. That's why Bob Iger bought Fox, right? To get really bulk up a lot. And I think that's what they've got to do for Ms. I heard you talking about NBC.

[Tom Keene]

So Chris, what is you got to bulk up? YouTube do. It's all about. I mean, they're in cash. I talked to our people. They're back from Cannes. Did you ever go to Cannes?

[David Westin]

Did you go to Canada?

[Chris Merengue]

I have missed that one.

[David Westin]

There's a thing called vipcom that you had to go to every year.

[Tom Keene]

I don't want to hear.

[Chris Merengue]

Well, YouTube is YouTube Carlton, by the

[David Westin]

way, Tom, down in the corset, that's where you stay.

[Chris Merengue]

YouTube is the biggest media company in the world, which people forget about. But I think it's more than just streaming. It's live. It's live in sports, like this program.

[Tom Keene]

Thank you.

[Chris Merengue]

You know, it's Rob Schwartz.

[Tom Keene]

Live is the new moat. I stole the quote from him. Talk about live.

[Paul Sweeney]

You can't skip it.

[Chris Merengue]

I mean, people love to listen to replays of what you're doing here. But it's worth most when we listen to you live. And that's why what advertisers are paying up for and that's why we subscribe.

[Paul Sweeney]

David, back in your remedy. Abc, you ran ABC News for a long time. Where does network news, I mean, where are we here? And I look at Paramount and they own CBS and cnn. I don't know how that works, but.

[David Westin]

So do you want an answer from my heart or from my head?

[Paul Sweeney]

Both.

[Tom Keene]

There's two different answers.

[David Westin]

Heart. It's going to be great and we're going to be really important and network news is going off our head. I don't understand the business plan. I just don't get it. And we've seen this, by the way. This Goes all the way back to cable. I mean, when I went to run ABC News, Fox News had not yet started. MSNBC had just started.

[Paul Sweeney]

Right.

[David Westin]

And so they came over. But there's been one innovation after the other that just eroded the business plan. So there's no moat around the business anymore. You can't charge unless there's scarcity. I absolutely agree with Live on sports, particularly sports. And I'll say, Tom, you and Paul, when it comes to markets, I mean, there's some scarcity there you want, but other than that, there's just you can't charge for it. And as a result, what you're seeing, I think is a version of AM radio infecting its way into broadcast network news. That's what you're saying.

[Chris Merengue]

I would defer to David, but I actually think that with this polarization of the country, you are seeing Ms. Now stake out one side, Fox has the other, and it's a battle for the middle. CNN is fading. News Nation is coming into there.

[Tom Keene]

Maybe the networks, you have to have an opinion. CNN prided themselves and Matt Winkler and Michael Bloomberg have said we're going to do a news organization where people don't know what Paul Sweeney thinks. Okay, or maybe they don't know what I think. But is there a middle ground available? Chris Merengue, are you going to only win with a polarization?

[Chris Merengue]

Well, again, using the analogy, in my heart, I wish that was the world in my head, I don't think the

[David Westin]

answer is it's never happened yet. When you're talking about general news, what happened here at Bloomberg was unique in that if you go left or right when it comes to money, you're going to be out of business because you know it's either right or wrong. The market's upwards down and you know, you can't have opinion when you talk about general news, then you can have opinions.

[Tom Keene]

But they're right and left across America and worldwide. We continue our conversation. Thrilled to have David Weston Westin with us with his work at ABC and of course now with Wall Street Week at Bloomberg. And Chris Merengue with us with Gabelli. Even better, three media pros. Paul Sweeney with all of his work over the decades.

[Paul Sweeney]

Chris, it Fox, they've seemed to stake their company and I would argue pretty successfully on their news and their branded news and sports. Is that enough?

[Chris Merengue]

Well, Rupert acted first on this by selling his entertainment business to Disney. I'm not sure Disney or Comcast would have. I think they probably both would have replayed that. If we could go Back in history, they've taken a run at Roku or are buying Roku, which is a little bit of a surprise to the street, because they're trying to find a business model for what they have left. And I wouldn't doubt them. They're very good. They're very agile. So we'll see how that plays out.

[Tom Keene]

Clyde Davis has died at 94. Ted Turner recently. John Malone, iconic. And Gabelli was so attached to Tcoma. Where's that? Where's the next generation of those people? Or was that old time lost?

[Chris Merengue]

I don't know what the next generation. Obviously, we have next generations of some of those families, but I'm not sure we have the moguldom that we once had. The Sumners and the Johns.

[Tom Keene]

Yeah.

[Chris Merengue]

Rupert's still around, obviously, as is John. He's active, but he's active in a different way.

[Tom Keene]

I got to get this in, folks, because David Westin's just killing it. Did you just have a conversation with Paul Krugman?

[David Westin]

We did.

[Tom Keene]

The laureate. What did you learn? I saw the headline from your people. David has people. I know people. Weston has people.

[David Westin]

A person, not people.

[Tom Keene]

A person singular, is coming around to supporting a Trump tariff regime.

[David Westin]

Well, well, I think that may be a little too much, but it was interesting. He said he was actually uncomfortable with where he is when it comes particularly with automobiles on tariffs because he would like to be a free trader. And he said he and other people he knows are very uncomfortable. He thinks that it will not sustain at this point, given what China is doing. There have to be some sort of protective tariffs or we will just lose our auto industry.

[Tom Keene]

This is critical, folks, because this is Krugman's wheelhouse. This is how he won the Nobel Prize. Chris Range. Mario Gabelli started out as an auto analyst. Are you guys long China? Ev.

[Chris Merengue]

We're very worried about it. We still own. We still like a lot of the car parts companies that are sort of agnostic to the platform. Not as much as we were 50 years ago. We turned 50 this year.

[Paul Sweeney]

Oh, okay.

[Chris Merengue]

You don't look at.

[Tom Keene]

Mario is 50.

[Chris Merengue]

Well, I'm 52. Mario's a little older than that, but our firm. Almost as old as me.

[Paul Sweeney]

Yeah, that's right.

[Tom Keene]

This has been wonderful. Thank you to the two of you so much for coming in this morning. Chris Merengue, with all of his leadership in the Valley, and David Westin. Stay with us. More from Bloomberg Surveillance coming up after this.

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[Paul Sweeney]

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[Tom Keene]

Member FINRA and SIPC Advisory Services by Public Advisors, LLC SEC registered advisor complete

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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.

[Tom Keene]

We're going to do this interview differently. Ellen Walt, a senior fellow at Atlanta Council, and I could go to where, where's Brent crude going? Or what's a gallon of gas going to do? We have a treasure. She wrote a book a number of years ago called Saudi Ink and it directly folds into the tapestry, the culture of the Arab clash against Persia. I think of valley narratives. There's a wonderful new book on Iran. Joining us now, Ellen Water book is must read. Saudi Ink. Alan reset now, the arch Sunni Shia split in the world after this war.

[Ellen Walt]

So I do think that while the Sunni Shia split is very important in a religious sense, I do think that politically it's probably becoming less of an issue. And we've seen that in a number of fronts. I think that the most prominent is really the Iranian support for Hamas. Hamas is a predominantly Sunni group. It grew out of the Muslim Brotherhood in Egypt, which is a very Sunni based group. And so we're really seeing, I think that while there are very distinct religious differences between Iran and Saudi Arabia, I think they're very profound culturally, they're very profound religiously. Iranian clerics do not look to the Saudis as a source of religious legitimacy or religious authority, which is something that other Sunni countries do. But I do think that we are, are seeing the growth and prominence, in fact, of kind of mixed areas. Look at the United Arab Emirates. This is a region that has traditionally, you know, it is, it is a Sunni country, but it is traditionally very close to Iran and Persia. And I think we're seeing that playing out in real time as a lot of these Gulf countries are kind of caught between Iran's orbit on one hand and Iran as a growing regional power. And you know, on the other hand, they are traditional allies, Arab Sunnis.

[Tom Keene]

Let's start with the crucial states that go up to Kuwait. Do they consider the United States still a steadfast ally?

[Ellen Walt]

I do think that that is a question that the answer to that is going to be coming very quickly. I think that they were initially they did consider the US to be a very steadfast ally, especially, you know, the, the uae. They have been working very closely with the US to establish nuclear power plants which have been very important to their overall energy growth. They've really become very close with Israel, which has brought a number of very positive economic benefits for them. And yet at the same time, I do think that they felt somewhat abandoned and still feel abandoned because they believe very strongly that Iran should not control the Strait of Hormuz. Iran should not pay tolls or should not demand tolls or any kind of, you know, fees for passage to the Strait of Hormuz. And if the United States gives in on this in any form, it's a sign to the UAE that the United States is not a partner that will support them. And I think that we will see them make some very important choices in the coming months that have to do with this. If they don't believe that the US Will defend free passage in the Strait of Hormuz, they are going to build pipelines to get around it. And they're not going to necessarily depend on the US Politically or diplomatically.

[Paul Sweeney]

Ellen, a lot of traders are saying, hey, you wind this war down and oil just from a supply and demand perspective is going back down to 50, if not even lower by the end of the year. How do you think about that?

[Ellen Walt]

I think that there's a lot of optimism there in terms of oil returning to somewhat normal flows out of the Persian Gulf, and that's really not happening. Yes, we've seen a lot of oil exit the Persian Gulf recently. We're not seeing nearly as many tankers come back in. I think that the new normal is going to look like a ferry service. We're going to see a couple of services that will basically ferry oil out of the Strait of Hormuz to, to tankers that sit outside. So more oil will leave than necessarily we see tankers in. But this process will be more expensive. It will take longer. And I also think that China's demand, China's buying patterns have not returned to where they were before. If China decides, hey, we're no longer interested in, you know, buying that extra 4 million, 5 million or so barrels a day, then, yeah, we're going to be in a big oil glut because the world is used to China demand being elevated like that. If China does return to that, then I do think that oil at 50 is a bit low.

[Tom Keene]

Ellen Walt, thank you so much. Senior fellow of the Atlantic Council. Her definitive book, Saudi Inks. Stay with us. More from Bloomberg Surveillance coming up after this.

[Paul Sweeney]

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

[CBOE Representative]

Investing Brokerage Services by Open to the Public Investing Inc.

[Tom Keene]

Member FINRA and SIPC Advisory Services by Public Advisors LLC. SEC registered advisor complete disclosures [e-mail] disclosures

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[Podcast Host/Announcer]

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.

[Tom Keene]

She is well qualified for a larger perspective. Not so much the cliche of 60,000ft, but just where are we now with partner, not a warden of Columbia and the hugely prestigious UCLA reach in trade and international relations. Tanifuku. He joins us from MetLife. Our international relations now in the time of Trump. The cacophony of news we're facing is our trade, is our international linkages. Are they forever broken or can we still move forward with American exceptionalism?

[Tani Fukui]

Broken is a strong word, I think, but I would say that it's a concern. It's a concern in terms of our international trade, how that affects our ability to get the things that we need at the right price. Right. Inflation is one of those concerns that without, with these shifting global trade patterns, we're not going to necessarily be able to get to that 2% in inflation for some time, just because of all the changes to the global economy. The supply shocks that continue to come,

[Tom Keene]

the endless supply shocks. What does the demand side look like? Paul keeps telling me the restaurants are packed.

[Tani Fukui]

Yeah, the demand side is strong, whether that's just the top 20% or the top 19% or the top 1% or whatever. On the macroeconomic front, you've got a strong consumer overall in aggregate, and you've got strong corporations. Right. Corporate profits are going from strength to strength. Let's see what happens next quarter. But for sure, they've done extremely well. And that also supports the economy.

[Paul Sweeney]

How is the consumer doing out there? Again, the consumer seems pretty darn. Is it just as simple as if the consumer's got a job, the consumer's okay.

[Tani Fukui]

That and inflation not being at 9% helps.

[Paul Sweeney]

Right.

[Tani Fukui]

So we had, we had problems because of inflation. Consumer consumers says they can. The consumers say they're unhappy, but they don't spend like they're unhappy. And that's the important difference. Right. And they are still, you know, they say you can inflate, you can inflate debt away. That's what happened during the pandemic. And they're still at, on aggregate, again, at relatively low debt levels and debt service ratios. So there's bandwidth there.

[Paul Sweeney]

We've got oil back down to $70 a barrel from 100 plus. Does that mean my inflation concerns are done?

[Tani Fukui]

I think there's a lot. There's a bit of a tail there in terms of how that passes through the rest of the big concern though, is really more about the intersection of AI price pressures and energy prices. So yes, there's a little bit there because of the Strait of Hormuz, but there's a lot there because of AI demand for all sorts of things. Chips, computers, blah, blah, blah. But especially also very much energy.

[Tom Keene]

But the heart and soul of MetLife, your work, drew Mattis, work in that is to get away from the blah, blah, blah and say, here's where we are in three years or five years. Do you look at AI as a blah, blah, blah? I love that. Can I steal that? I'll steal that. But if you look at the blah, blah, blah, is it all a productivity enhancer and a net positive for our nation? Three years, five years out?

[Tani Fukui]

I would say yes. But how we get there is certainly not a smooth and easy path. Clearly there's massive gains to be had from productivity. But if you think about, let's say we, we are something like in 1998 or so in terms of the 1996, 1998, in terms of the dot com boom, you didn't really see, you know, you played around with things, you thought it was kind of cool, the Internet, but you didn't really have the productivity benefits until a decade or so after that.

[Tom Keene]

You were so on. You played around with it. That perfectly captures 1995.

[Paul Sweeney]

So Fed Chairman Warsh, what was your initial read of his first statement, his first press conference and kind of the direction here?

[Tani Fukui]

Yeah, so I think he's, I mean, the result of it has been very much in line with what I think works to his advantage. He didn't say very much in the, in the statement. In his press conference. He tried not to say very much. He didn't provide a press conference. That's a dot. And I think all of those things are in his line of trying to say less as the Fed chair. I think the markets took that as, hey, we knew he was a hawk all along. Let's go. But I'm a little bit worried about the future because I think he wants to play it more close to the vest. But this isn't 2011 anymore. Now we've got the social media era where if you don't speak, everybody else will fill in for, in that vacuum for you. You know, all the Fed chair, all the Fed governors, the presidents, every commentator out there, all the, you know, and that's, that's where playing it close to the vest may not work when it did a couple years, couple of decades.

[Tom Keene]

Really great observations that the social media, the communications, you know, they turn into a Greenspan Wash comparison.

[Chris Merengue]

Yeah.

[Tom Keene]

You know, it's just two different worlds, right?

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[Tom Keene]

Tiny thank you so much. Tiny Fukui Never enough time Senior Director, Economic and Market Strategy Matt Light this

[Podcast Host/Announcer]

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

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