Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Wait inside, from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
All Right, everybody, Yes, TikTok, We're in a wait and see mode.
We know.
Also, hi for longer. We've heard this from a lot of FED speakers. The latest to weigh in on all of this, Federal Reserve Governor Christopher Waller, in a speech today at the Peterson Institute for International Economics.
In the absence of significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting and easing in the stance of monetary policy.
Again, that's Federal Reserve Governor Christopher Waller, a wash in FED speak and talking FED president's firsthand is our own Michael McKee, Mike's Bloomberg News International economics and policy correspondent. He's joining us from Amelia Island in Florida, where the Atlanta Fed hosts its annual Financial Markets conference, where'd everybody go, Mike, Are.
You get any time outside, Mike, or is it just are you in a conference room the whole time?
I mean the pictures, I'm not getting much time outside. Everybody's in the conference room right behind me.
Right now. They're talking about the future of.
The US dollar overseas, which of course everybody has on their minds because the FED has higher interest rates than the rest of the world.
The dollar keeps getting stronger.
But it's been interesting because there really isn't a whole lot of disagreement from FED officials.
Some of them, like Grafael Bostik, put a number on how.
Many cuts we might get this year, maybe one, he says, And others don't even have a number. They're just saying, well, we think we might be able to cut rates, but we're going to watch those inflation numbers as they come in.
Well, as Carol mentioned, she's got a countdown going. We're eleven days away from the black period beginning for the FED. That's ahead of course of the next FED meeting. And I'm wondering what taken this taken today and yesterday and all the FED speakers that we've heard in various locations around the country. What it all means for that next policy meeting, which does come out on June.
Twelfth, Well, it probably means we're not going to see any kind of move at all, because they all want more time and more data. What will be interesting is the summary of economic projections, what they think is going to happen in terms of inflation, growth and unemployment. And then of course the infamous dot plot. They've got to put some dots on the plot, so they'll have to put some numbers to it. We won't know who exactly is whom, except.
That if.
Rafael Bastik is just going to do one cut, maybe we can figure his out. But it will be interesting to see how far they back off of what they put out in March, which was for three cuts. And as Laurenamester said yesterday to us on Bloomberg, that's off the table. Now.
Yeah, I mean this is what's interesting, right Mike, and their commentary they can kind of come in haul a little bit or be a little bit vague, but you know, it's like pin the tail and donkey. At some point you got to stick a pin in the dot plot and like make your projections.
Yeah, and they know it's a problem because they know they don't know what they're going to do. They're waiting for this data now. Chris Waller made the point today that the FED is not overly dated dependent, as someone on Wall Street have argued, because the FED is looking at the data but not doing anything yet they haven't bounced around.
It's the markets that have.
Been overly data dependent, going up and down and pricing in and pricing out FED moves, while the FED has just sat there waiting for evidence that would enable it to move. So he doesn't think that they're guilty of being too data and driven, but that's the situation. They're not going to move until they see the right kind of data. So even what we get out of a dot plot in June may not mean that much.
Mike, you mentioned that a lot of the folks on the Federal Reserve who we've heard from in recent days haven't had a lot of variation when it comes to their opinions about the path of interest rates or high for longer, or when to move rates lower. And I'm wondering if, in your years of covering the FED and covering monetary policy, if it's pretty atypical to have this much widespread agreement.
It depends on the situation totally.
We had this kind of agreement in the early two thousands when the FED raise interest rates seventeen times by twenty five basis points at a time. Everybody knew what they were going to do, and they had pretty much telegraphed it, so it wasn't a surprise. And obviously when you have a crisis like the pandemic or even the Great Financial Crisis, when they cut rates dramatically.
Everybody knew that they'd all be on board for that.
The real dissents came in the days maybe back in the nineteen nineties and earlier, when there were questions about how much and whether they should move given inflation. We haven't had significant inflation since then, so it hasn't been a huge issue.
Hey, Mike, listen, you have seen lots of market cycles, and you have talked to tons of different of FED speakers over the years, and you've talked to them before crises, post crises, you know, Pandemic, GFC, Great Financial Crisis. So I do wonder, as you like, is there a mood, Is there a tone that you are feeling at this time from all of these folks are kind of where we are. They kind of like, listen, guys, we're almost there, Like we got this. It's you know, things are kind
of moving along like we wanted. I don't know, how do you characterize.
It, Well, it may be a little bit Carol.
As a mommy, you'll understand this when you tell your daughter I got this, but you're not really sure. But you're the authority figure, so you have to say.
I got this.
That's kind of the situation they're in. I haven't seen this much uncertainty about the economy among FED officials in a very long time, if ever.
Because the pandemic up ended all of.
Their models and all of the prior history that they used to draw from and try to figure out where they are.
And they admit it's still kind of that way. They think they.
Know what's going to happen, but they have a great deal of humility about it because they've been wrong before coming out of this pandemic, because they get a misleading view of the economy.
I still hope my daughter isn't listening because Mike, that's kind of figure out. Yeah, yeah, I got this. Hey, one last question, there are those some economic data points or what are the economic data points to keep an eye on ahead of that June meeting.
Well, on May thirty, first, we're going to get the PCE inflation numbers, and those will be important because obviously.
That's the indicator that the Fed follows.
Interesting thing is the nerds who go into this stuff have a pretty good track record of forecasting EZE and they think it's going to.
Come down a little more than CPI. That would be good news.
But then we get CPI again on the day of the Fed meeting, so if there were some disaster in those numbers, they could make a last minute change in their plans. Of course, Jobs Day, we get Jobs Day the first week of June, and that's always a fun time.
Well, don't look over your shoulder, but the nerds are coming for you, so just be careful there, all right. Michael McKee always great to check in with you, of course, our Michael McKee, international Economics and Policy correspondent there at Amelia Island in Florida.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple card Play and then brout Auto with a Bloomberg Business app or watch us live on YouTube.
She played an AI virtual assistant in the twenty thirteen film Her declined an offer from open ai CEO Sam Altman that was back in September about voicing an audio feature for the company's popular chat GPT chatbot, only tim to be shocked, angered, and in disbelief her words, when last week open ai released new audio tools and stage demonstrations that included a voice called Sky that sounded a lot like her.
That her that Carol is referring to as actress Scarlett Johansson, who says she was quote forced to hire legal counsel to demand the removal of an AI voice from open ais chatbot that sounded too much like her own voice. Tracking this for us is Bloomberg News AI reporter Rachel Metz. She's in our San Francisco bureau. Okay, Rachel. It's a specific story of what happened to Scarlett Johansson, and that's
a story that you write about. But there's also the bigger, broader story that matters about what and who can be manipulated in the AI world. So before we get to that part, walk us through what happened to Scarlet Johansson and then open AI's reaction to it, and then we'll get to how this illustrates things moving forward.
Sure, so Scarlett Johansson sent a very angry or she put set out a very angry statement yesterday saying that she had been asked back in September if she would be interested in voicing a voice for an audio feature for Chat GPT. She was not interested in doing that, and she told the company she was not interested in doing that. The company also put out a voice feature that same month, and so these voices Sky is one of five that they released in September, and it's been available.
For instance of using the Chat GPT app on an iPhone, you could use this voice. I think it kind of was a little bit under the radar to the average person until just this past week when Openingye released its new flagship model and much of its demo centered on voice interaction and they used this same Sky voice. I think a lot of people, perhaps including Scarlett Johansson, hadn't really thought, wait a minute, that sounds a lot like Scarlett Johansson until just recently.
And then there was the tweet last week which we're going to put up on the screen from sam Alt. Then can I call it a tweet? The post on X you a post just one word Rachel and it's her there it is. I think that might have done something.
No, I I think so. I mean it's kind of hard to say that you that that didn't refer to the movie her, to the voice from the movie her, to the her in her right, which we all know is Scarlett Johanson. I mean, different people can have different opinions about who this sky voice sounds like. And to be clear, OpenAI did say this was a voice and like our other voices, came from voice actors that we hired.
It is not Scarlet Johansson's voice. But I think a lot of people do think that it sounds like her, and she clearly thinks it sounds quite a lot like her. And I think that that is really really important that Scarlet Johansson thinks it sounds like Scarlet Johansson.
And Rachel they yanked it right.
Yeah, so what they did the other day. It's weird to wake up to things like this, but this is this is how.
It goes so new reality.
I know, I was like, wait, what's happening?
But so is this dream.
Just yeah, exactly, just yesterday, the sky voice was paused. They said, so basically and right now, like if I open up the chat GBT app on my iPhone, what will happen is I'll see it if I want to choose a voice. But if you choose it, you won't actually get to use it. You'll be using another voice. I think right now it's another voice called Juniper.
Okay, So I said that we'll talk about the bigger picture here, and that's what I want to get too, because it's sort of to me as emblematic of this world where computers and humans are becoming closer together, this idea of living in a world where maybe what we hear in an audiobook or what we see on a screen isn't necessarily the person who it's portraying it to be. So talk a little bit about that.
I mean, I think that we're seeing and we have seen over the years quite a number of companies roll out assistant type devices. This would be the latest. And what is interesting, regardless of the voice about what Opening the Eye is trying to do now is with their latest model, they're saying, these voices are going to respond in essentially real time, so in a number in order of milliseconds, just like you and I would talk to
each other. And we saw this on display in the demo, and that really changes the dynamics I think between a person and the technology if the technology is going back and forth with you and also is sort of adjusting in real time to the way that you're sounding, which open Aye says that it can do.
But I mean, isn't there going to be Like Tim and I were talking before we get on air, I'm like, aren't there going to be images things generated? If they're pulling in all this information that's out there, that there's going to be something that looks like Tim one day or you or me, it's just going to kind of happen. Is that going to be kind of just it's just going to happen or sounds.
Like us, you mean, like an avatar of you.
Yeah, or something, but maybe not intentional only if you're on Fumble, I think is what we learned last week at the Bloomberg Technologies on it. That's true, But you know, if it's pulling it existing data that's out there, visual or other audio, like, isn't it going to eventually create things that look like all of us sound like all that I mean, I mean.
These companies are making really intentional decisions to create voice models.
There.
You would for something that's gonna specifically sound like a person, you would be recording like a real voice actor's voice. This is what Opening Eye said that they did. Yeah, and this is pretty common. You would record somebody saying certain things, and then you would use that to build your voice model, and that's how you end up with like a bunch of different voices that people can choose.
It is true that it is getting increasingly easy to build a like a deep fake voice of you or of I mean, someone could use this audio and build something like that pretty easily. But I mean, I think a lot of this sort of what we're sort of going around here is this issue of consent. Should people be able to do that? I think a lot of us would argue not under most circumstances unless someone explicitly approves of it, right.
Yeah.
The reason one of the reasons I thought of this is so interesting is because just a few months ago, back in September, we saw the union in Hollywood that represents actors come to an agreement that included limiting the use of AI and recreating performances, And I thought to myself, well, this is a situation where, you know, the likeness of Scarlett Johansson was asked for by one of the AI companies that's a leader when it comes to this technology,
and it's sort of emblematic. I think Rachel of the idea that in the future, maybe we could see these representations of folks who are maybe on a screen or in some other media that are generated by machine, like that world is not too far away.
I mean, I would argue we're already there. Of there are certainly representations of people's voices, people who are still alive whose voices may not work very well on like Val Kilmer. There are representations of people who are no longer alive on either video or voice or some combination of the two. I mean, in several cases these are controlled and licensed by like the estates of these people.
But certainly something I think is just getting better and better, and we're going to be saying more of in the years to come. Yeah, she's probably why Scarlett wanted to say something about it. She knows this is not the end of.
This, right, Like we've done commercials, whether it was with Marilyn Monroe, Row or other celebrities. Right, Like, we've sure put there, but you do wonder, like how much further this can get? Anyway, Like you said, you wake up. This is especially for your world below. You're like, Okay, this is what's going on. It's a little crazy, but it's interesting and it gives us a chance to talk with you, which we so appreciate. Rachel, thanks so much. It is one of the stories that we're talking about
a lot in the newsroom. It's like wild on social We're just kind of watching different media outlets. Everybody's covering, including us, because just trying to make spense. Since, of course Rachel Matt's Bloomberg News AI reporter there in San Francisco.
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Let's some marvelous night for moon Dance with the Star.
Okay, so you heard of Alphabet's self proclaimed at Moonshot Factory. It's the research lab X within what was then Google was founded back in twenty ten. It's the idea that it would capture the public's imagination with visions of a techno utopian world. It would help invent Think of Way mo think of Google Glass or Project Loon, which were these high altitude balloons that would beam Internet's remote locales.
Love it right? It just not to love yeah wow, except for Google Lass exactly. Well, Alphabet self proclaimed moonshot Factory is coming back down to Earth servites Bloomberg News techne ledge of reporter Julia Love. She joins us now from San Francisco. Her story, by the way, one of the most read on the Bloomberg terminal today. It is also the Bloomberg Big Take on this Tuesday and available in the upcoming issue of Bloomberg Business Week. So be
on the watch for that. Julia, All right, break it down. What is going on?
Well, thank you so much for having me today. It's a really interesting crossroads for Google acts. They were founded with big hopes. It was the place where goodle was going to take these big swings and funnel its profits from the search business into finding the next bid hit in a totally unrelated industry. They made self driving cars, they launched internet connected balloons. But now it's been fourteen
years and the money is starting to run dry. The lab's budget has been cut and they're shifting to a model on which they're going to be spinning out these moonshots as independent startups, which is a big change.
Are these independent startups? What is their connection to Google at this point? Because the whole idea with this was that this was a within Google and it would create something. And I think a good example of this, I don't know was over at Amazon Aws for example, Like that became an incredible business at Amazon, and it was started as like a side project at Amazon. But if we think about it from Google's perspective, this was supposed to be the thing that you know, Sergey Brinn was imagining
in his like techno utopia of the future. What is the connection that the company will have to these startups?
Yeah, absolutely so. I think they will remain within the Alphabet family in a certain sense. In many cases, X will take the state in these startups, so it will still profit if they succeed, but they will no longer be Alphabet owned companies, And I think that the benefit of that for Alphabet is that building these businesses in far out industries takes a lot of patients. They've been at it with way Mo for well over a decade, and that BET's business model has really yet to pan out.
So I think that they were kind of reaching a crossroads in which they were ready to headge their risks a little bit and find opportunities to cash in on their investment.
Well, and how much of this is also kind of sharpening their financial pencils and making way kind of rating in some of the costs because of increasingly how much we've been talking about AI and the importance for this company to be positioned clearly and strongly when it comes to gen AI and all that's maybe to come.
Yes, I think that is a huge part of the story. We have seen belt tightening across Goodle and X has been no exception. I think there's a feeling that the company really needs to drill down on its strengths and X projects increasingly are focused on either AI or climate change, and the lab really has been feeling budget cuts. It used to have a project to celebrate, or it used to have a party to celebrate the project that had been eliminated, and even that party has been cut sadly.
Julie's what's lost here for alphabet for Google?
You know in the past x. In addition to the projects that it sparked, I think it was a powerful tool for retention. It was a place that many Googlers aspired to work, and it really signaled that this was a company that was about much more than search. And now I think it does sort of raise questions about how doroodle will continue to express those ideals and what the company is really about.
You know, I wonder too, like you know, this is I feel like tech entrepreneurs are always like decided to like free to dream like and kind of go different places. That luxury of having maybe a really strong core business that generates cash that you can play around. And I think in your story you point out from Google's early days you talk about, you know, the two founders made a point of fundling profits, profits from their search engine into businesses that had nothing to do with it. Out
of this effortcame Gmail and Google News. Like, there are things that are so part of our lives and I'm assuming help move the needle that you do wonder when you're not able to just free to dream, like what gets lost? Kind of building on what Tim.
Asked, Yeah, absolutely, I think it's a moment across the valley when we're seeing the tech giants really kind of buckle down. Amazon and Meta have also cut back on some of their moonshot style projects, but I think that we are seeing a lot more appetite to invest in deep technology in the venture capital community. And some people who I've talked to think that that is Pride Events as legacy, that it showed the value in taking these big beds.
Did anything ever come of? I mean, we know weimo where WEIMO is Carol Howard just to San Francisco and we saw the weymos everywhere. Google Glass, you know, we have Apple's version of a face computer, and we have Meta's version of face can so Google cla, We're not wearing Google Glass, but certainly that idea is sticking. Project Loune, though, is that something that at all ended up sticking?
Well, Interestingly, Project loun was killed, and that I think was a big turning point for Edge. It really signaled that the business model was paramount. But there's another project Tara that is still alive within the lab. It took some of Lune's technology and there's no balloons, but they transmit Internet through beams of light. And interestingly that project is now viewed as one of the best candidates for this new spin out process.
So stay tuned. So still stuff will come, but just it's a little bit of a different focus. Really interesting read, and as we said, it's a Bloomberg big take and coming in the upcoming new issue of Bloomberg Business Week. Our thanks to Bloomberg News technology reporter Julia Love joining us from San Francisco, a journal how about you let me drive? Oh no, no, no, no, alright, please, I'll do the gravels.
Let's wait, I.
Want to try it.
Keep it's good question. This is the drive to the clothes thing?
Well by around?
Should it on on Bloomberg Radio?
All right, everybody just coming up on eighteen minutes to go until we wrap up the trading day. It's an interesting one. We're just off our highs of the session, but little change. We do get those end video results after the close, just twenty four hours roughly from net What.
Is it an interesting one?
Is it?
No? No that I gotta keep you on us I gotta keep you honest. Abbiail do a little walk in here, and she was just like you degree that.
It's just kind of one of those like waiting for GOODO kind of feeling like market datos and video. Yeah, exactly, waiting for good slash and video. Let's see what Judah Bolvin has to say as we drive to the club, because we do have to wrap up the trading day. Gina Bulvin is President Bulvin Wealth Management and she joins us on this Tuesday. Gina, it does feel like a little bit of a wait and see mode. But listen, we just got through most of earnings. There's a lot
of FED speakers. We're waiting for the next FED meeting. We've got ENVD tomorrow. I don't know what's the important kind of market conversation for you right now.
Hi, Carol, thank you for having me and thanks for having me back. You know we're expecting a good year in the market. I'm still bullish, but I just want to make it clear I didn't just join the party. I've been a ball since I came on a year and a half ago in January. And one of the reasons why I'm bullish is because the consumer has stayed strong. What I like really about the market this year versus last year is we're seeing an incredible broadening out we have.
I think what's so interesting is we have communications services up twenty yet we have utilities up fifteen percent. Technology is up fifteen percent, energy is up thirteen percent, financials up twelve, industrials up twelve. These are all year to date numbers, all double digits returns. When you look at growth stocks and you look at value stocks, and that tells me it's a very healthy market.
Well wait a minute, so on that, because Abigail Doolittle was here earlier and talking about the divergences that we are seeing kind of in different parts of the market. So right, you've got S and P NASDAQ one hundred.
Right.
You know, we keep talking about the various records that we've seen or trading near records. Transports are down, the socks is way down. Last time we saw, you know, a high level or its record high was back in early March. So there's divergences within the market. That makes you wonder, Okay, it's not like everybody's in the pool, the equity pool.
Well I think that's true, but I think it's a very different market than it was last year, where you had the Magnificent seven really leading until the end of the year. I mean, when you in the same year, when you have utilities, comm services and technology double digits, I think that's really interesting.
I want to talk a little bit about the GOODO that we're waiting for in Video, because I know that this is something that you're watching closely, Gina. As Abigail Dolittle told us a little earlier in our program, the options market is pricing in double digit moves to the upside or downside based on tomorrow's report, and I'm just wondering how you're looking at it.
So I can't speak for individual stocks, but absolutely n Video has replaced Jerome Powell as the market mover right, and so much is writing on this earnings report because AI is really driving a lot of these gains in the broad market. You know, utilities and in industrials beneficiaries are derivatives of the AI AI revolution that's going on. So it's definitely it's definitely important, you know. I the wisper number of the earnings ten. I see that that's improving.
And as long as it's a healthy beat. I think that's going to be good for the overall market. But keep in mind, I mean, are you an investor or are you a trader? Right, Investors buy good quality stocks and invest in certain themes for really the long term, and AI really has a long runway and a lot of stocks, a lot of sectors, even the economy in terms of productivity. All of these are going to matter over a ten year time period. And just what's going to happen tomorrow.
Well, do you think the records that we've seen on the S and P and the Nasdaq one hundred are indicative of a trader's market or investors market.
That's a great question, Carol, and I think I think long term investors can make money. And the reason is is because we've just come through yet another better than expected earning season and it's usually fundamentals, and it is fundamentals that are that is driving this market higher as well as we're in a better macro environment. Powell came out and he said very clearly, you know, we don't see stagflation, and all things equal, we're not going to
see any interest rate hikes. We are going to get cuts. I do think we'll get one or two this year. It doesn't really matter if it's in you know, May, Jily, it's not May, but it's going to happen in July. Is it going to happen in November or soth September, It doesn't matter. Interest rates are coming down and that's what's going to help drive stocks forward as well.
How are you so sure of that, though.
Well, because inflation is coming down, it's still sticky, and interest rates are absolutely going to stay interest rates are absolutely going to stay higher for longer. One of the reasons why I think that interest rate that inflation is coming down is because the biggest component of CPI is housing,
and housing is taking longer to show up. The decrease is taking longer to show up in CPI with the government data, but we're seeing it in private data that rents are coming down and more, there's more building, and there's more supply coming on the market. So this has just taken longer than we thought. But I do think
that inflation's coming down also. You know, we're starting to see the consumer be a little bit more stringent with their spending, the consumers slowing and you know, it's like, what took so long slower demand is going to help bring prices down. You know what is really driven prices up is you know, because companies could increase prices, restaurants could stay at high prices, and because consumers are continuing to spend. If demand slows, then we're going to see
some of these prices coming down. Yeah, and we're starting to see that.
Okay, hey, listen, you give us a lot to think about, so appreciate it. Gina, thank you for stopping by. Gina Bolvin, she's president of Bolve and Wealth Management Group, joining us there on this Tuesday, and I think it's yeah, some things to think about. That idea of Nvidia replacing jer own Pala new kind of like triggered.
Oh I love that. That's like a phrase.
Hey, I love this.
Eleven days until the FED blackout count it.
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