US and Iran Prepare for Deal Signing, SpaceX Soars

Summary

Bloomberg Surveillance Podcast – June 16, 2026

Episode Summary: US and Iran Prepare for Deal Signing, SpaceX Soars

Main Theme

This episode centers on two dominant themes: the imminent US-Iran deal with implications for global diplomacy, trade, and energy markets, and the dizzying heights of equity markets as exemplified by the SpaceX IPO and the current AI-fueled rally. The hosts and their expert guests provide insight into the economic, market, and policy consequences of these headline events, blending geopolitical context with market dynamics.

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1. The Return of US-Iran Diplomacy: What’s at Stake?

Guest: Alexis Crow, Partner & Chief Economist, PwC

Diplomacy in a Changed World

• Host Tom Keene opens by asking about the new style of US diplomacy post-Trump and whether traditional approaches will return ([02:10]).
• Alexis Crow notes the US’s continuing trend towards “minilateralism” and bilateral deals — a “preference to make deals of mutual but maximum benefit for the American people” rather than maxilateral, multilateral agreements. The current deal with Iran unfolds in the shadow of the G7 summit, raising questions about lasting peace and inflation control for US allies.

Economic Fallout from the Iran Conflict

• The ongoing war in Iran is described as a “known unknown” rather than a true black swan ([03:23]).
• Despite energy shocks (gasoline and airfare inflation) and continued consumer sensitivity at the pump, US consumer demand remains resilient. AI investment is highlighted as a major driver of corporate spending.
• Alexis Crow:

  “Demand is still strong for consumers. We talked about that before. And there are no holds barred for corporate investment when it comes to AI.” ([04:18])

AI, Mag 7, and a Fragile Wealth Effect

• Crow cautions that a substantial portion of economic strength is tied to the “wealth effect” of the MAG 7 stocks, raising questions about what happens if these giants stumble ([04:38]).

Interest Rates, Inflation, and Geopolitics

• Post-war financial dynamics: Rather than a disinflationary or deflationary effect, supply shocks continue to drive inflation, with government debt issuance in both the US and Japan pushing yields higher ([05:33]).
• On the broader regime change:

  “Since 2016, we’ve seen a culture of national insecurity brought forward by advanced economies… back to the trade war, the pandemic, Russia-Ukraine, and now Iran. So we’re stockpiling, reshoring, onshoring — all that will push rates up over the longer term.” ([06:12])

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2. The Fed, Central Bank Signals, and Market Communication

Main focus: Upcoming Fed meeting with Chair Warsh

Market Expectations and Central Bank Messaging

• Crow expects the Fed to “hold pause,” mirroring ECB and BoJ restraint ([07:51]).
• She explains how the US, as the “world’s central bank,” must tread carefully as international yields rise, warning against over-reliance on detailed central bank communication:

  “I don’t think that there’s room for much communication under this Warsh. She’s made it very clear. So markets will have to become accustomed to this.” ([08:42])

Market Psychology

• Host Tom Keene remarks:

  “I think they’ve overcommuted themselves… it’s zany almost.” ([09:31])

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3. Bull Market Euphoria: SpaceX IPO and AI-Fueled Rally

Guests: Emily Rowland (Manulife & John Hancock) and Cameron Dawson (NewEdge Wealth)

Stock Market at Record Highs — FOMO and Risk

• Rowland describes the current climate as a “dip buyer’s dream market” driven by insatiable risk appetite, even among traditionally conservative investors ([12:39 – 13:30]).
• She frames participation as “drafting” — staying invested for momentum, but with caution:

  “We don’t want to be the lead race car, risking running into the wall, but we want to participate in this.” ([13:30])

• On valuation extremes:

  “It’s so hard to find anything that’s on sale right now… the stock market’s more than twice the size of the economy. We’ve never experienced that before… the market is almost wagging the tail of the economy.” ([16:00])

Bond Market and Diversification

• Despite stock euphoria, Rowland urges rediscovering fixed income:

  “If you want to know anything about the subsequent five-year returns you’re going to earn in bonds, all you really need to know is what the starting yield is.” ([14:32])

• Recommends shifting from cash into high-quality bonds as yields are attractive and income streams sustainable.

Are We in a Bubble?

• “That is a definition that one could certainly go with here. But, you know, bubbles can last a long time. Momentum can last a long time. So again, you want to be there, but you want to be careful here.” — Emily Rowland ([14:12])

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4. SpaceX IPO: Frenzy or Fundamentals?

Guests: Cam Dawson (NewEdge Wealth), Discussion with hosts

The Valuation Debate

• Rowland and Dawson analyze SpaceX’s sky-high valuation as “engineered” via limited supply and index inclusion, but caution against reading too much into short-term market pricing ([23:05 – 23:51]).
• Dawson:

  “We are in new stratospheres, new galaxies of valuations... a very speculatively driven market.” ([23:05])

Historical Parallels to ‘Irrational Exuberance’

• Keene references “effervescence” reminiscent of late ’90s markets, with Dawson pointing to clear analogs, including past periods where markets ignored Fed hikes until bubbles eventually burst ([24:22]).

AI’s Dominance and Market Breadth

• Dawson questions whether AI spending is masking broader economic weakness:

  “It’s certainly propping up the economy... if you look at household consumption forecasts, they've turned lower… but the forecast for private fixed investment — all this CapEx investment — have moved higher within the GDP forecast.” ([26:32])

• The narrowness of the rally (concentration in mega tech) is noted as a potential risk.

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5. Fed, Inflation, and Macro Outlook

Key Points from Cam Dawson and fellow hosts

• Anticipates no rate hike from the Fed at the upcoming meeting, but big focus on changes in the statement and Summary of Economic Projections (SEP). The “dot plot” may reflect a higher median as dovish members leave ([28:38]).
• On portfolio positioning:

  “We do deploy it into equities… there is opportunity, we think, in order to deploy into higher quality equities that have lagged in this very narrow market.” — Cam Dawson ([29:22])

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6. US-Iran Deal: Sanctions, Trade, and Global Economic Impact

Guest: Dan Tannenbaum, Oliver Wyman; Host Tom Keene

Sanctions Relief: Unknowns and Risks

• Tannenbaum underscores the uncertainty around deal terms and sanctions relief:

  “We don’t really know what money is being offered to Iran in the form of sanctions relief other than it’s performance based.” ([33:18])

What’s Changed Since 2015?

• Warns that Iran now knows it can close the Strait of Hormuz, and has proven it can hold off US military power with “drones and fast attack boats” ([34:16]).
• “Even if this deal brings back a detente, you’ve got the same government in place. You’ve got an angrier Supreme Leader... and they know they can do more damage than they did in 2015.” ([34:16])

The Cost of De-globalization

• $300 billion in global economic costs already, could balloon to $7 trillion due to permanent trade fragmentation ([36:11]):

  “Countries are focused on safeguarding their own economic security, which now… economic security is national security. That is very much true at the moment.”

What Would Be Constructive?

• “We need trade to start moving again for the global economy... US tax dollars are not paying for the reconstruction of Iran... Iran needs something in return... The question is how and how much? And how are we monitoring their performance with the terms of this deal…?” — Dan Tannenbaum ([37:12])

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7. Notable Quotes & Memorable Moments

• On AI’s outsized role:

  “There are no holds barred for corporate investment when it comes to AI.” — Alexis Crow ([04:18])

• On market psychology:

  “The biggest risk right now seems to be not having enough risk in portfolios. So the appetite is insatiable.” — Emily Rowland ([12:39]) “Bubbles can last a long time. Momentum can last a long time.” — Emily Rowland ([14:12])

• On SpaceX valuation:

  “We are in new stratospheres, new galaxies of valuations… a very speculatively driven market.” — Cam Dawson ([23:05])

• On US-Iran deal and global trade:

  “Countries are focused on safeguarding their own economic security, which now... economic security is national security.” — Dan Tannenbaum ([36:11])

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Recommended Listening Timestamps

• [02:10] – Alexis Crow on post-Trump diplomacy and what’s changed
• [04:18] – AI’s impact on the US economy
• [12:39] – Emily Rowland on market FOMO and risk appetite
• [14:32] – Fixed income’s hidden appeal amidst stock euphoria
• [16:00] – Market cap vs. economy; the market “wagging the dog”
• [23:05] – Dawson on SpaceX valuation and speculative excess
• [24:22] – Analogies to historic market bubbles
• [28:38] – Anticipating the Fed’s statement and projections
• [33:18] – Tannenbaum on opacity of the Iran deal
• [36:11] – Fragmentation, sanctions, and economic security

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In Closing

This episode encapsulates a market awash in liquidity and risk-taking, enabled by AI-mania and iconic IPOs, even as the world economy wrestles with energy shocks, persistent inflation, and uncertainty around US-Iran diplomacy. The hosts and guests deliver a nuanced, occasionally skeptical take on whether current fundamentals can support today’s extraordinary price levels — and what to watch as geopolitics and central banks continue to steer the market narrative.

Transcript

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[E]

No one more steeped in the path to this diplomacy than Alexis Crowe, Partner, Chief Economist, PwC. I'm not going to go through the resume right now, but just I'll just say she wandered by the London School of Economics to figure out what diplomacy is completely off the remit is this diplomacy we're witnessing. It's absolutely unusual. And do you think after Trump we get back to some kind of diplomacy that we used to know, that we used to grow up with?

[C]

Thanks Tom, for having me here. I would say what we've seen in in the sort of imprimatur that Trump 1.0 left is a preference for minilateralism and bilateral deals with the emphasis on dealing with rather than some of the maxilateral agreements that we had. Right. The architecture of the WTO, etc. And so we've seen this penchant for the President really come to the come to life in the second term of this preference to make deals that are of mutual benefit but of maximum benefit for the American people. So I think that's still the narrative that he's couching this in. Of course this is taking taking place against the backdrop of the G7. So of course our traditional allies that are present there, be it Europeans, be it Japan, are also going to be wondering the extent to which this diplomatic round will lead to lasting peace and therefore a cessation to inflation for these economies.

[A]

Given that back, given the black swan that has been dealt to the global economy with this war in Iran, the US Economy seems better than good, doesn't it? It seems like people have jobs, they're spending money. I don't know inflation's an issue, but most people are dealing with it. How do you think about that?

[C]

Well, Paul thinks I would say black swan. Maybe not. If you go back to Donald Rumsfeld.

[A]

Okay.

[C]

You know, there are known unknowns. There are unknown unknowns. And this was probably a known unknown. Right. We, we called this last summer after Operation Hammer. And I think probably some people in the United States underestimated the extent to which oil could be held at the price where it is. So presuming that you have a full cessation of conflict and it's full opening of the Straits of Hormuz, you'll still see elevated energy price price costs. And that like that has led to just an energy price shock for the American consumer, namely in gasoline and airfares. And so we are coming into the summer driving season. We know the extent to which US Consumers are sensitive when it comes to the price they pay at the pump. We know the share of wallet that has had to go to basic goods like electricity, gasoline. Nevertheless, demand is strong, right? Demand is still strong for consumers. We talked about that before. And there are no holes barred for corporate investment when it comes to AI.

[A]

If you peel back AI is our economy okay? Because it seems like AI has been just pumping up almost every part of it.

[C]

And I would say it's really the wealth effect attributed to those MAG seven too. Right. And we've talked about this in the past, but you've got a record number of U.S. households invested in the stock market. So more than just the top two Kintels that are participating in that wealth effect. But then one would ask what would just happen to that wealth effect should the mag 7 tumble? I think that's the other shoe that we have to focus on.

[E]

I look at this path, I'm looking at. You have it, your beautiful note. Alexis Crowe, Folks, looking at the Japan 40 year bond, the yield has come in. If they raise rates, whatever the answer is, they're going to jawbone in their yield. Is what we're missing here, and particularly looking at the analogs of history, is that after any given war, after any given military stimulus, you Announce a disinflation, or dare I say, almost the fear of deflation. Is that in your mind?

[C]

Not what I see right now. I mean, I think those yields moving in tandem on the US 30 year and the Japanese 40 year notes are more related to the record piles of government debt that we've been issuing, both for Japan and the United States. And the fact that you have seen multiple supply shocks translating into inflation, that's above target for both of these central banks. Added to that as we highlighted the weaker yen. So what I see, Tom, is just going back to this, is this, you know, this concept that we bring forward is like demand side geopolitics and supply side geopolitics.

[E]

I love that. Okay, great. But then what's after Trump?

[C]

So. Well, here's the thing. What have we seen? We've seen since 2016, we've seen a culture of national insecurity that has been brought forward by advanced economies as we navigate these supply shocks back to the trade war, going back to the pandemic. Russia, Ukraine, and now Iran. So we're stockpiling, so we're doing reshoring on shoring. All that will push rates up over the longer term.

[E]

Did you study under Hayek at llc? That's a joke, Alexis. Okay, there's two Alexis. I know in the studio.

[C]

I'm so confused. During this entire interview, every time you say Alexis, I my ears perk up.

[E]

Alexis Crowe, what's important here is, you know, Hayek would say, you clear markets. How do we clear after Trump? To me, that's the arch question.

[C]

Well, it's interesting. Just go back to Trump 1.0. Right. So we didn't clear after Trump 1.0. Biden kept on a lot of these same policies that have led to an elevated natural rate of interest over the longer term. Think about those relations between Washington and Beijing. Arguably, you could say more trade restrictions were put on China during the Biden administration, the decarbonization efforts. We became a net oil exporter under Biden. So some of those same policies were carried forward. Forward. And you think about where the Democrats might go under a different administration, and you would still say that there's probably going to be a focus on reshoring supply chains, bolstering aerospace and defense, bolstering our energy security grid, et cetera.

[A]

So Fed chairman Mr. Warsh, he's got his kickoff meeting tomorrow. What does he do? What are you expecting there?

[C]

Hold pause.

[A]

Okay.

[C]

Hold pause. Which would be generous, right? In the wake of what we've seen with the ECB. Last week, BoJ today. And the other thing about that I would say Tom, just on the rate side with Japan and the US is the US is going to have to be careful as those yields continue to move up in Japan, not, not today, but over the longer term because we are, we are the world's central bank. Right? We are still not a small national central bank. So we saw that even going back to the volume back in August 2023.

[E]

You're expert on the dialogue of central banks. Is Mr. Wash going to lead to a fractures like Boe Mervyn King central bank? Is he going to go back to the quiet and solitude of Alan Greenspan? What are we going to see tomorrow and into the FOMC future On the

[C]

communication side, everybody's putting their bets out there as to whether or not the scp, the summary of economic projections is kind of rest in peace and rip. And there you just have to go back to. Under Chairman Martin, the Fed did not regularly issue communications. You had staff starting to do econometric forecasts. Those were mixed with judgment forecasts by FOMC members. But there wasn't a lot of weight put to those staff forecasts. So as we go forward, I don't think, I don't think that there's room for much communication under this war. She's made it very clear. So markets will have to become accustomed to this. The other side of it is, are markets actually rational in their expectations of some of the statements that we receive from the Fed?

[E]

Yeah, I don't think so. I think they've overcommuted themselves into it's zany almost is the word I would use. Not to borrow from the economist Alexis Crow. Thank you so much, partner. Chief Economist bcw. Stay with us. More from Bloomberg Surveillance coming up after this.

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[E]

The market generations. We catch up with Emily Rowland, co chief investor strategist Manulife and John Hancock of Boston. She was in with us recently and reaffirmed being in the market. Emily, I see so many distractions now, including Space X, that it just to me comes down to where are we going to be June 30, which is like Paul next to tomorrow.

[A]

I know.

[E]

Emily, where are we going to be in this earnings season?

[F]

I mean, it's just amazing, Tom. You know, the market is just loving this shiny new toy that it is embracing right now. And it's almost like the market just keeps giving you riskier and riskier options. It's hard to say if some of these price moves are going to be sustainable, but the biggest risk right now seems to be not having enough risk in portfolios. So the appetite is insatiable. Right now, it's just a dip buyer's dream market. My prediction is that my grandchildren are going to be writing about this in business school. Just really, really remarkable dynamics permeating markets

[A]

right now is, I guess, Emily, for a lot of folks, they feel like they just have to be in this market and that's troubling to a lot of people. How do you think about that?

[F]

Yeah, I mean the FOMO is unbelievable. I walk around the halls of Manulife, John Hancock and the most conservative investors that I've known in my career are like, I don't have enough risk in my portfolio. And so there's a major fear of missing out in this market. And the way we think about it is the way we would think about a race car drafting the market. You know, we don't want to call a top in this. Momentum is an incredibly powerful force, but we want to think about drafting. We don't want to be the lead race car, risking running into the wall, but we want to participate in this. So it's about having quality and being in the market.

[E]

Did you just define a bubble?

[F]

That is a definition that that one could certainly go with here. But you know, bubbles can last a long time. Momentum can last a long. So again, you want to be there, but you want to be careful here.

[A]

Emily, what are we doing in the bond market here? I mean again, you can sit in a two year and get four north of 4% in the two year treasury. How much credit risk do you want to take here?

[F]

Well, I'm excited you brought up bonds because there's nobody that wants to talk about them right now given the fact that you've got these stocks that are up, you know, 5, 7% before the market even opens. So why would anybody want to talk about boring old bonds? But we think it's a really interesting time to think about fixed income doing more heavy lifting in port portfolios. Yields are elevated. It was just a few years ago that we had a massive retirement income problem. If you want to know anything about the subsequent five year returns you're going to earn in bonds, all you really need to know is what the starting yield is. And as you talked about 4 1/2 5% on high quality bonds right now we're embracing that and we think that you can lean into that income, build a return stream that's going to last. Everybody still has a love affair with cash money market funds. Getting that off the sidelines, redeploying it to a mix of high quality bonds, we think makes a lot of sense. Investors tend to hate bonds right before they love them. And we want to think about that today.

[E]

Okay, let's take something that's very AI Walmart. They with 2.1 million employees, Bentonville, Arkansas their present PE on the Bloomberg rounded up is 45. There's no one listening to this who took a course, Emily, that would say that's normal. How normal is the Emily Rowland space right now?

[F]

It's, it's so hard to find anything that's on sale right now and I think that's the biggest challenge. We're not at a great starting point. Think about the amount of this, just the sheer size of the market Right now the stock market's more than twice the size of the economy. We've never experienced that before and what it's resulting in is it used to. The way we used to learn things Tom is that the economy would tell you a lot about what was going to happen in the market. And today we're in a position where the market is almost wagging the tail of the economy because there's been this incredible amount of wealth accumulation that's been built up. Consumers are feeling great about their investments and again this gets back to the K shaped economy. It's the haves and haves not and the folks that have access to to mutual funds, other wealth are funneling that back into the economy. So that's the biggest challenge that we're looking at today.

[E]

I'm not going to mention the company because I don't want to embarrass them but they're total mediocrity. I've met with management, blah blah blah and they've done 2 2% per year for the last 10 years. They're modeled forward at a 26 P E. Yeah every the markets and they're a complete mediocrity. Everybody would agree that.

[A]

Yep, absolutely. Hey Emily, to that point here we've got the SpaceX IPO which is just extraordinary event in and of itself for this stock market in its entire history and anthropics also in the wings. OpenAI another gajillion dollar IPOs. What are some of these deals? What are they telling me? Is this suggesting a top to the market?

[F]

Well, potentially. But what we really want to look at is just the amount of liquidity that is at stake here and that's needed. I mean you have these trillion plus market cap companies that are now tapping the equity market for issuance. This is really notable at the same time as this other tidal wave is impacting markets which is that central banks globally are staring down the potential of tightening. So this flood of capital has been helped by a somewhat lower cost of capital coming into this. But now you've got these two forces converging where these IPOs are requiring a massive amount of liquidity and central banks are potentially tightening into that. So it's going to be interesting to see how that plays out as we approach the back half of the year.

[E]

So what are you telling Manulife, John and cock clients and RIAs to do? Should they be acquiring shares this morning?

[F]

Well, it's about participating but having a plan B. So we Tom, as you know, we've been overweight technology stocks in the United states for over 10 years. That is still an overweight for us. But the concentration risk is becoming even harder. Like I used to be able to come on here and say buy international stocks, buy small cap stocks. Think about diversifying. Well, guess what, 42% of the emerging markets index is now in tech stocks. 28% of it is just three stocks. You look down in market cap, small and mid cap companies in the United States. That's become an AI trade as well. There are semiconductors in there. So where can you find a plan B? You want to be there. But look at things like industrials. They're benefiting from defense spending, capex spending, one big beautiful bill. We're looking at industrials and mid caps. We're finding them in international growth stocks. So it's just about having that plan B. We talked about fixed income as another part of that plan. Participate and protect.

[E]

Emily, thank you so much. Emily Rowland from Austin. Remy led John in. Stay with us. More from Bloomberg Surveillance coming up after this.

[A]

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[D]

You're listening to the Big 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.

[A]

Yum Brands to sell Pizza Hut for $2.7 billion I just had my 40th reunion down to University of Richmond. We lived at the Hut on Patterson Avenue and saved us.

[E]

Kim Dawson would like to step in. Did you work at the Hut?

[H]

No, I never worked at the Hut, but I'm a big fan of the Hut because they used to do book it when I was a kid. And so you would go if you read books you would get free personal pan pizza. So maybe my love of reading is owed to Pizza Hut.

[E]

Is anything of Space X in any books?

[H]

No, absolutely not. I mean it's absolutely incredible that we are talking about a company now almost to surpass the market cap of Amazon this morning. Amazon makes $820 billion in revenue on an annual basis. We're talking about last year where space SpaceX made 19 billion. So we are in new stratospheres, new galaxies of valuations and I think it's important to note that a lot of this upside move was very much engineered by the staging of how much supply would be released to SpaceX stock compared to how much demand would be created because of the index inclusion. So I'm not sure how much we can read into this from a valuation side of things. But we also have to appreciate that this is a very speculatively driven market.

[E]

Okay, I'm going to introduce this right now. I could do it with someone as sophisticated as Cam Dawson of New Edge. Leo Quad Ahmed won the Pulitzer Prize a number of years ago for a profoundly important book on central banks. A New 200 Some Pages, 1873 is the title. The Rothschilds the first Great Depression in the Making of the Modern World. I'm almost done the book. The fact is we've seen this before. We do have analogs of effervescence, don't we?

[H]

Oh, we certainly do. We go all the way back to Greenspan giving his irrational exuberance speech in 1996. Of course he cuts rates in 1998 in the face of LTCM, starts raising rates in 1999 because of this effervescence. And I think the important parallel there is that markets ignored rate hikes from the Fed in 1999 up until March of 2000. You eventually got a super hike at the end or in the third quarter of 2000 which eventually ended up popping the overall bubble. So there is precedent for markets to continue on rallying despite a hiking Fed.

[A]

Are you nervous about these market here? A lot of folks feel like boy, we're just all time highs, all time highs, all time highs. Then we get this SpaceX IPO. We got anthropic, we got open AI frothiness. How do you view it all?

[H]

Yeah, look, I think in every boom scenario there is always an aspect of real earnings as well as speculation. And I think a lot of people look at this market and say oh no, no, this is not the 1990s because look at the earnings of the, of the semiconductor names. Look at the earnings coming out of AI infrastructure. Well, there were earnings back in the 90s as well. If you look at the earnings of names like Cisco or names like intel, from 98 to 2000 they actually had over 100% earnings growth. So there were earnings that were backing it up. The key difference is that those spending the money like our hyperscalers today, back in the 2000s that was people who didn't have any earnings. It was all really driven by debt and a lot of very low quality companies. So the question is how much more room is there for hyperscalers to keep ratcheting up their their capex forecast? Because if there's anything that matters most for this market, it's these companies still being willing to spend boatloads of money in order to drive this virtuous Circle of AI infrastructure capex Are you concerned

[A]

that this AI spend in this AI halo is masking a weaker economy? Maybe. And maybe weaker earnings story?

[H]

Well, it's certainly propping up the economy and it's certainly adding to strength that we would certainly not see. You can look at in the economic forecast line. If you go the ECFC function within Bloomberg, what you can see is that the forecast for household consumption have turned lower. Not surprising because of the pressure on consumers from higher oil prices and inflation and negative real wage growth. But the forecast for private fixed investment, which of course is all this CapEx investment have moved higher within the GDP forecast. So that's that offset that you have.

[E]

Cameron Dawson with this is new Edge. What we do at Bloomberg is when we have reporting that moves markets, we tell you about it. Priscilla Azeveda Roca, Steven Stepinski and Salma L or Donnie thank you Javier Blas for bringing this to our attention. Cutter plans to rapidly restart LNG output after hours opens. This is original reporting first from Bloomberg and you see it move the oil markets. Brent crude comes down under 81 $80.36. It'll be profound if we get a 79 handle on Brent crude. Qatar is planning to rapidly boost liquefied natural gas production once the Strait reopens, aiming to restore most of its export capacity within two months. Cam Dawson that's the kind of shock that keeps the story going, the narrative going.

[H]

Yeah, certainly, because effectively you're able to draw a picture forward to say we're going to get relief in oil prices, that maybe we've seen a peak in headline inflation and that some of the risks that inflation could metastasize or down slow spread throughout the rest of the economy has fallen as a much lower probability. Now it suggests that there is pressure taken off of the Fed to hike rates, that we're still somewhat in this hold situation simply because the labor market's not falling off a cliff. So when you put it all together, the risk of higher inflation is lower, the risk of higher interest rates is lower and the risk of an adversarially hawkish Fed is also lower.

[A]

Mentioned the Fed. We're going to hear from the Fed tomorrow. What do you expect?

[H]

Yeah, well not much as far as policy moves, of course there's no expectation of of any policy action. The statement could potentially change a lot. That will be fascinating. We get a summary economic projections as well, which will be really interesting. If you look at the forecast for PC in the ACP from March, they had it at 2.7% so that's going to move higher. And then look at the dot plot. There's all this question of whether or not Warsh will contribute a dot. And I think it's important to note that Myron stock will be removed simply because he's no longer on the on the Fed. And so his dot was very low. So by definition the median is going to move higher.

[E]

I don't care. Well, Dan Tannenbaum writes in and says ask Cameron what she would do with cash this morning.

[H]

Oh goodness, look, we do deploy it into equities. Look, I think that given the fact that you have high inflation, the opportunity cost of cash and inflation eating into it is is certainly higher. We've seen a lot of underperformance of high quality equities and that underperformance has been incredibly pronounced. So there is opportunity, we think, in order to deploy into higher quality equities that have lagged in this very narrow market.

[E]

Do you have any more media opportunities this morning?

[H]

Oh, well, Your dear friend Mr. Lee Brody has has commandeered me for a 10am okay.

[E]

Between now and 10am you can have an Alexis Christopher is New York Knicks cookie.

[H]

Oh yes, yes. I earned it.

[E]

I think you've earned it. Thank you.

[A]

Oh yeah, you can have to makeup

[E]

will get you straightened out for Lee brody here at 10:00am Cameron Dawson, thank you so much. Stay with us. More from Bloomberg Surveillance coming up after this.

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[E]

We could do an hour today with Dan Tannenbaum. Surprise is not Evian Lebar, yes, as they say, live band whatever it is on the southern coast of Geneva with Oliver Wyman, truly one of the nation's experts on sanctions. What kind of money do we give to Iran that's constructive good money versus a bailout versus something that harms our sanctions strategy?

[I]

We don't know. I mean that's the whole problem. When the JPOA was signed before the JCPOA in 2015, that text came out almost immediately. We don't really know what's been agreed to. We've seen rumors of a $300 billion reconstruction fund. We've seen messages about unfrozen assets to the tune of tens of billions of dollars. We don't really know what money is being offered to Iran in the form of sanctions relief other than it's performance based.

[E]

Unfair question, but I'm going to launch it at Oliver Wyman's best are we?

[D]

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 I Heart radio app Tune in and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.

[I]

Going to be any better than where we were in 2015? It will definitely be worse. For this reason, Iran didn't know in 2015 that they could Even close, the Strait of Hormuz, you can't unring that bell. They can do this again. No deal can stop them permanently from doing that. And really, they've been able to hold the entire American military at bay with drones and fast attack boats. So even if this deal brings back a detente, you've got the same government in place. You've got an angrier Supreme Leader because his relatives have been killed. It's the same government, it's the same group in charge, and they know they can do more damage than they did in 2015.

[A]

So what is a. What is a good scenario here? I mean, it seems like we've broken this thing. I guess we own it to some degree. The U.S. i mean, what's a good outcome here?

[I]

The good outcome is the trade starts flowing again in whatever form we can do it. I mean, in fairness to the President, he did reinstate this conflict in February. We need to get trade moving again. You've got such a significant swath of goods, helium, sulfur, not just energy, that are transiting the strait or not transiting the strait. You've got 600 vessels that are basically in a holding pattern. We need goods to start moving again for the global economy. I mean, I saw yesterday the US Oil strategic reserves are as low as they've been since Reagan. I mean, these are not. That's how the energy market has offset prices in the U.S. why the prices haven't gone higher is because the U.S. has allowed access to barrels out of the strategic reserves. We need trade to start flowing again. That's the good outcome. What happens next is the real question.

[A]

You mentioned trade. I mean, tariffs have gotten pushed to the back burner here. I mean, what is the state of global trade here today? I mean, is globalization still. That's a really good question. Where are we kind of forgotten about this?

[I]

Thank you. Thank you for the setup. We wrote a paper with the World Economic Forum a couple of weeks ago where we actually calculated the cost of global trade of all of these different disruptions, including the Trump trade policy, what China's begun doing in kind, and other nations as well. We've already cost the global economy about $300 billion, with a possibility of it costing the global economy $7 trillion. If we go back to those Liberation Day like environments where you've essentially halted trade between countries like the US And China, but you've now got a situation where fragmentation is somewhat permanent. Countries are focused on safeguarding their own economic security, which now we've heard it, economic security is national security. That Is very much true at the moment.

[E]

What. What would you like to see out of this? We're going to have some announcement here. Whatever the President does, what's the damn Tannen bomb? And then what next that is constructive for America?

[I]

I mean, look, I want to see trade begin moving again. I want to see that US Tax dollars are not paying for the reconstruction of Iran. And I really don't believe that'll end up happening. Although there's a lot of questions out there. Iran needs something in return. I mean, that they. You can't just give them nothing and say, we're going to stop bombing you and that's enough. They're going to get access to their immobilized and frozen assets. There's no doubt about that. The question is how and how much? And how are we monitoring their performance with the terms of this deal, which really up until 2018, in the last deal they were complying with. So they have done probably a bigger trust deficit than we might at this point, given they did agree to a deal. They were complying with it. It got ripped up, you know, eight years ago.

[E]

Dantebaum, thank you so much. Dan Tannenbaum, Oliver Wyman. Appreciate it this morning.

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