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Hey listen, folks. We did get a key inflation gauge. It came out earlier this morning. It grew at a slower pace last month. We also got some data on a resilient US consumer. We also saw incomes growing, and yet US consumer sentiment fell in the month of September to a four month low on growing concerns about the
impact of high prices and personal finances. Richmond Fed President Thomas Barkin spoke with Bloomberg TV and Radio international economics correspondent and policy correspondent Michael McKee before this morning's of US economic reports, and you talked about the Fed's dual mandate and keeping an eye on all the data as it continues to come in.
It's a low hiring environment, but the labor supply is also short and you have to be very attentive to that balance because it could get out of balance right. Similar on the inflation side, you do have these cost pressures and four and a half years of inflation over target. On the other hand, you're not seeing that show up and spikes and inflation in the real time numbers.
We are seeing what.
Seems to be a productivity boom, and so I think you have to be very attentive to how little we know about how each of our mandate variables is going to play out. And so, you know, I feel like very adaptive is the way to think about it as and that's part of why I'm not being prescriptive into well, it's this many cuts over this period of time, because I think we're going to see and learn a lot as.
We go here.
Adaptive and attentive sounds like data dependent. That is Richmond FED President Thomas Barkin. Earlier this morning on Bloomberg with Bloomberg TV and Radio International Economics and Policy course Mike joining us from DC along with Elizabeth rent Or, senior economist at the personal finance company nerd Wallet. We'll get to her in just a moment, but Mike, I do want to start with you this morning's data drop of US data and what you heard from Fed President Barkin.
Does it all kind of mesh with what we got in the latest FED decision and commentary.
Maybe not.
And that's the situation that Tom was describing, is we came out of the FED meeting thinking that they were going to do a rate cut in October and there was a good chance of another one in December. And then over the last four or five days, we've gotten a number of data points that suggest that the economy may be rebounding from a summer low, maybe stronger than we thought. Second Quarter growth was revised up, and today
we got better than expected spending numbers from consumers. So at this point it's really hard to say what's going to happen. The one thing we know from today PCEE report is that inflation is not going down. It didn't get any worse, but it is still a closer to three percent than the Fed's two percent target. So it just kind of beans that those who are in the middle for the Fed, they're probably going to be waiting till much closer to October twenty ninth to make any kind of decision.
Mike, is there a shoe to drop when it comes to inflation as a result of tariffs, because we did have so many companies pull forward goods purchases before tariffs hit, and we just haven't seen it show up. We're going to start hearing from companies in the middle of next month for their latest earnings report, but we're not seeing the spikes in inflation like he was talking about to you.
Well, we have seen some We've seen prices go up for some goods, and there are expectations that will continue to see that. It depends, as you mentioned, on inventories and how fast those are worked down and then supply chain adjustments. It's very hard to say exactly when things are going to hit, but economists do expect and the Fed does expect to see inflation rise over the next couple of months. Then the question is does it go down again or does it keep going up because maybe
the President is continuing to put on additional tariffs. The one thing that we can probably into it is that Americans are not happy. The consumer sentiment numbers went down because of inflation, and even though it doesn't have a lot to do with the President's tariffs, Gasoline prices have gone up. Meat prices have gone up. Turkey prices have gone up there for different reasons. But when you go to the grocery store, it's all just inflation to you.
Yep.
I don't do a lot of the shopping in my house. My husband tends to do.
My daughter do.
No.
My people are my husband and my daughter. But man, they brought some steaks and I was like, how much did they cost? When they told me, I was like, whoa, Elizabeth, come on in on this. Because we are continuing to get data points, how does that cross with what we did get from the and your view on where the economy is and what needs to be done in terms of monetary policy.
Well, I think largely what Spin said is accurate. You know, the FED is trying to keep their eye on the ball. We're all trying to keep our eye on the ball. But there's a lot of balls in the air right now, and some of them are flying in completely different direction. So it's really hard to suss out where things are headed. When it comes to inflation, Yes, it ticked up just slightly, but it's not showing real acceleration right now. To your point, consumers are feeling a bit of a burn more than
that headline number would have you believe. You know, food inflation rose last month according to today's data, and that's something we all interact with on a weekly, if not daily basis.
We see that number.
And so that's definitely playing into consumer sentiment. Also, we're more exposed to all of this talk about the economy, right, We're all talking a lot about when inflation is going to pick back up, the impact of tariffs, and so that's in the back of consumers heads as well, So they anticipate a lot of potentially bad stuff happening as of yet, wen't haven't seen it translate into reduce spending from a big picture overall, I'd say this week we
got some more of those mixed messages though. Right consumer spending is strong despite weak sentiment. The economy continues to grow according to the GDP figures. I say, if there's some good news out of this week in addition to the consumer spending, is that the initial claims came down the unemployment claims, So that's a bright spot I suppose on the recent past labor market.
You know, I'm thinking of a conversation that Tim and I had yesterday with the CFO of a firm, right, and we talked to the CEO just a couple of weeks ago and they're saying they're pretty busy. There's a
lot of activity on their platform. We were thinking, well, wait a minute, how does this mesh with maybe a slowdown in consumer you know, concerns about the consumer and they our own Stuart Paul kind of weighing in that, well, what's happening is people are buying, but they're buying and taking longer to pay for things, and that's why they're making use of that place.
Like essentially, if he sees a service such as though that being used, then it could be a sign about the way the consumer's feeling. Elizabeth, I want to go to you on next week and the non farm payer print that we're expecting a week from now, we'll be sitting here talking about that number. Fifty thousand is the number of jobs that economy is surveyed by Bloomberg expect to be added to the economy. How is the labor market in your view?
The labor market is hanging in there, you know. I think the big question next week is not only what we're going to see in the jobs data, but if we're going to see the jobs data.
You know, if the I saw that story right, if there's a shutdown, the BLS would delay the next US jobs report.
Right, And this is crucial data for monetary policy, as you all know. I mean, ideally, if there is a shutdown, it will be brief, as recent ones have been, and the FED will still have that data in hand before their next meeting.
Regardless of when we get it.
I anticipate that data is going to show, you know, weaker job growth as we've seen over the past several months. But I do believe the unemployment rate is going to remain relatively steady. The break even rate, or the number of jobs we have to add each month in order for the unemployment rate to remain steady, is decreasing. And that's because the labor force is decreasing.
Right.
We know we're not getting as many immigrants right now, and some immigrants that we're already here, already working, maybe leaving the workforce. The magnitude of that a little uncertain, but I do believe that's going to help hold that unemployment rate where it is.
Mike, saving thirty seconds for you, because I think we have to bring up Fed Governor Lisa Cook this case before the Supreme Court. President Trump wants the Supreme Court to, I guess give him the okay to fire her.
She's fighting it as well.
Just quickly, what do we know, what might we get in terms of news, either today or potentially over the weekend.
Well, a decision could come any time by the Court, and they have tended to move quickly in these Trump firing officials cases, except that in this case there are a lot of miquey filings, friends of the court, filings that the justices may want to wade through. And also we've seen in a couple of controversial cases that some justices want to dissent, and so that takes some time to write. So we don't exactly know when we are
going to get this decision. If the Court allows her to stay in the job, then we kind of lose the headlines for a year or so while it goes through lower courts. And if they fire her, then of course we'll be back here immediately talking with you about what happens next to the FED.
Right, and we talk about whether or not we have an independent FED anymore.
All right, Mike McKee, thank you so much. There in DC.
Bloomergs Mike McKee along with Elizabeth Renter, senior economist at Nerd Wallet.
Stay with us more from Bloomberg Business Week Daily coming up after this.
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Well, former FBI director James Comey has been charged with lying to Congress an obstruction related to testimony he gave in twenty twenty, accelerating President Trump's push for legal action against his perceived political enemies. Now after the indictment, Comy said in a video on Instagram that he is not afraid. His lawyer to Tim has come out with a statement.
Yeah, as lawyer said, Jim Comy denies the charges filed in their entirety. We look forward to vindicating him in the courtroom. I want to bring in Bloomberg News Justice Department reporter Chris Strome. He joins us from Washington, DC. Chris, a relatively short indictment. What exactly is James Comy alleged to have done?
Well?
The process? Here?
Is highly unusual. The charges are highly unusual. There's two charges against Comy. It's for lying and obstructing a congressional proceeding related to testimony he gave in September of twenty twenty, which was just about five years ago, which was right up against the statute limitations for DOJ to go get these charges.
So I got to say, all of us are I think doing a deep dive to try and remember if I can't even remember what happened on my so to think about what happened in five years ago. Although when you start doing it, you were like, oh, yeah, we day Monday was the Tailanell press conference.
It was it was that's all I remember.
Well done, well done.
So but Chris take us back there and what it is that he is charged with lying about.
Yeah.
So, during the hearing, it was before the Senate Judiciary Committee, he was asked about a situation in which his deputy, Andrew McCabe had leaked information to the Wall Street Journal about Hillary Clinton, and Komy.
Was asked if he stood by previous.
Testimony he had given that he didn't authorize the leak, and he said he did. Now the Justice Department is trying to say that Komy wasn't telling the truth because he was involved in authorizing the leak. And it goes back actually to twenty sixteen when there was a dispute between Komy and his deputy Andrew McCabe regarding the leak. McCabe had said that Comy approved of the leak after the Wall Street Journal reported on it, and Kmy said
he had no memory of that. The Justice Department Inspector General looked into this and issued a report that found that Komy was telling the truth and McCabe was lying about it. And so essentially Comy was reiterating that he had no knowledge of the leak, but the Justice Department is trying to say, well, Andrew McCabe said, you did have knowledge of the leak, and so therefore.
We are going to charge you with lying.
Now, the Justice Department might have some additional information, but this has been well investigated and to our knowledge, there's no new information that would that would prove Kmy was lying.
So it raises the question and back to what Patrick Fitzgerald, the lawyer for James Comy, said, he denies the charges filed and we look forward to vindicating him in the courtroom. Does it make it too a courtroom.
It's hard to know. At this point.
Comy is going to have an initial appearance on October ninth. I'm sure that his lawyers are going to move to just dismiss the charges before they ever go to trial. Getting charges dismissed is very difficult, so it's you know, probably more likely that they will end up going to trial. I would expect Comy and his lawyers to call for a quick trial because they believe the facts are on their side and that Komy can get equitted.
What about a history lesson for everybody, a civic lesson for everybody.
I mean, do presidential.
Powers extend to something like this and using the Justice Department to maybe go after presidential foes?
Well, this has been one of the raging debates under the Trump administration, both the first Trump administration but definitely under this second administration. How far do Trump's powers go as president? Now, Trump will say that he controls the Justice Department, that he can order prosecutions, that he is the chief law enforcement officer. Historically, the Justice Department has maintained independence from the White House and from the president, but that's largely.
Based on norms and traditional practices.
There's no law or regulation that says the president can't interfere in prosecutions.
Yeah, I guess I would say some presidential historians would also suggest that maybe a google the Watergate like at this point right.
Well, that time we had a lot of pushback from Republican senators who made their way to the White House, And we haven't heard that this time.
Around, right, So, like, we'll see, We'll just have to, I guess, kind of wait and see how this plays out. Interesting story, another one certainly on our mind. Chris, Thank you so much for running through it for us. Chris Strom, He's Justice Department. Justice Department reporter joining us from Washington, DC.
Stay with us more from Bloomberg Business Week Daily coming up after this.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five eas during Listen on Apple Karplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
In the meantime, we continue to piece together the life of Jeffrey Epstein. Bloomberg News has gone through more than eighteen thousand emails from Epstein's personal Yahoo account that was obtained by Bloomberg News that cash revealing Carol a sweeping array of details about not just his public life, but his private life as well.
Exactly we want to get into it. It is today's Bloomberg Big Take. Bloomberg News finance reporter Max Ableson part of the team who wrote it. He's here in studio, Max, so good to have you here. Another incredible read. It is among our most read stories on the Bloomberg First of all, step back. We've been covering this, right, these emails remind everybody, the emails that Bloomberg got access to what you guys have been going through.
Yeah, that's right.
It's been one of the highlights of my you know, twenty years in journalism to be a part of this team with Siria Matu and Jason Leopold and if Benny Morrison, many others.
So, you know, Epstein who remains.
So profoundly central to the public imagination and yet.
Such a profound enigma.
Bloomberg News obtained you know, thousands, more than ten thousand, more than eighteen thousand emails. And I want to be clear, these are these are private emails. These aren't things that have.
Been recycled through.
It's not things everyone knows about this new stuff and it's from it's from a private email dress actually, for example, where there was one email where someone says, listen, I need to talk to you about something private. What email would be good and he writes back and says this one to give.
You a sense of what we're talking about here.
And my colleagues, including Harry Wilson and others, did some really remarkable reporting on Peter Mendelssohn, who lost his job as the UK bassador of the United States.
Exactly in the week of their story.
And Avin Benny Benny Morrison and Jason Leopold have done and others had done great work on Gillian Maxwell and really carefully showing that her relationship to Epstein was just just much deeper and that partnership was much closer than either either have had admitted. And what this story, which which I wrote with this this wonderful team, what this story is about is, in some ways, I hope you know, not the usual.
You know, Epstein is of course, in some.
Ways a story about sex and sex crimes. But I think what you'll find is that what this story is about is about what I what I cover. It's it's really a story about money and a storry about power and a story about connections. And that's how we talked about it with our editors, including Lauren Eder.
And it's a but can I just pump in in that there's a bunch of people pictures, and I'll be honest with you, I.
Think when we both I didn't recognize most of them.
Well, that's what I think was so notable about this. I mean, there are certainly the names that have been associated with Epstein for years, like Alan Derschowitz, for example, and there's new information, new emails from there in a conversation that your team had with him about that. But there's also a name that I'd never seen before, Mary Spaeth, somebody who's a crisis strategist. She was director of media relations at one time for the White House under Ronald Reagan.
What did she what role did she serve?
Well?
Thanks for that question, because I think what's special about the piece and I hope viewers and listeners check it out. I think what makes it a valuable piece of journalism, especially at this moment when Epstein.
Is really in the news and is all of a sudden.
It has gone from being an exclamation point to a real question mark. And there are a lot of questions about what's going to happen now over the next few days and weeks and months with Epstein and his files. What our story is about and why Mary Spaith comes up is that it's about the depth and the breadth of his relationships. And you know, it is not a story about Republicans versus a story about democrats. It's a story about powerful people, and it's a story about different
kinds of power. It's a story about academics and researchers, people who made it make it into high elite echelons of intellectual life. It's about people who offer, like Mary Spaith offers a basically strategy for people who are in trouble, crisis strategy, public relations. And it's a story about counselors and lawyers. And to answer your question about Mary, there was a point, believe it or not, where investigators are closing in Jeffrey Epstein. This is early two thousand and eight.
You know, he's about to go to jail for the It's like about a year, it's a little bit longer than a year. And after that he's a free man for a very long time. I think about a decade until the twenty nineteen charge sex trafficking, and then he dies.
He's found dead in prison for jail right after that.
But back in two thousand and eight, investigators are circling Epsea's in trouble and what do we find in these emails? But these draft apology options where she sends him three different kinds of apology apologies. One is one's very meek, talks about his memories of being a kid.
It's actually found it very deep.
You know all of us remember being kids and having to apologize. Second one is very short, it's really terse. But the third one, it's the word we use.
Is elegaic, and it is. He cites William James.
I'm hoping it's the first Bloomberg News story that calls out William James, nineteenth century American philosopher. Talks about the hour of terror and the hour of say shifty, how.
About that word?
And he talks about the American dream, talks about the American dream and a substantial rewards, and he says, this is a public and heartfelt apology.
I just want to say, Space Firm was hired through a lawyer to provide communications options for mister Epstein and his legal team, she said. In response to questions for the story, she said, quote, I ultimately terminated the engagement because of my discomfort with it.
That's right, that's right, Thanks for saying that. I think it's really important, out of fairness that we add things like that. And you know, she also said, you know, because of confidentiality and privilege, she can't comment further. But you know, we don't know, We don't know what was going on here. I want to be clear with our viewers. You know, for all we know, Epstein was really very
close to saying sorry, but he did not. He did not in the sense of giving a broad apology, certainly to his victims.
And I want to be clear.
The US Department of Justice says there are more than a thousand of them, more than a thousand of them, and Epstein did not give a heartfelt William James quoting apology as far as we know.
But our story shows what it could have potentially sounded like if he had.
It's why we say there are so many questions still out there. And you guys, by going through these emails, maybe This is not direct conclusions, but you start to piece together, you know, kind of a little bit more of the life around Jeffrey Epstein. Max, thank you as always, Max abel Abelson. He's financial reporter at Bloomberg News. This is the big take.
Check it out on the Bloomberg.
Stay with us. More from Bloomberg Business Week Daily coming up after this.
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All right, TikTok, everybody, just about eighteen nineteen minutes to go until we wrap up.
The trade for the day and for the week overall.
We are expecting a down week on the S and P five hundred, this after three consecutive weeks have gained. However, there is one name that is definitely on our radar. I've had to play around with.
The game that I'm going to talk about with my TV.
Colleagues, because as soon as we saw the headline popping about Electronic Art said to be near a takeover by silver Lake, initially reported by the Wall Street Journal, This is about a fifty billion dollars maybe.
Deal to go private. That's big that according to people familiar, that would be massive.
It's not just silver Lake but also sadier Abia's public investment fund. This, according to people with knowledge of the matter. The video game maker is known for madd An NFL, the SIMS and then Carrol's favorite battlefield.
I walk by every.
Playing that all the time.
Love it.
Couldningnounce a deal as soon as next week, said the person who has not to be identified discussing confidential information.
Stock up about fourteen percent as we speak, So we said it could be a fifty billion dollar take private. Right now, the market cap at forty eight point two billion. All right, let's talk about not necessarily that unless she wants to, but let's talk about the stocks overall for the day, for the week. Carolschlife is back with us chief market strategist at BMO Private Wealth, joining us from Minneapolis Private Wealth. By the way, three hundred and fifteen
billion dollars in assets under management. And I got to say, if you're lucky enough to have a four oh one K and you've looked at it recently and you're buying the market Carol, you're pretty happy.
It combs up.
Yeah, yeah, you're pretty happy. And it almost doesn't matter what segment you're in. And it's actually better to have spread it around this year because in particular, diversification, which we preach all the time, is work.
It definitely worked this year.
So let's let's talk a little bit about valuations, because earlier this week we heard from fed JJ Powell. He was asked about stock valuation. There was not a rational exuberance moment, No, there was not. He did say it's not a time of elevated its financial stability risks. But he also said, Carol, Carol, s some asset prices elevated versus historical levels, and by many measures, equity prices are fairly highly valued.
Is he right?
Yeah, they're rich. But it's also important to put the caveat in there. And actually the piece I wrote this week for our field was called beer Hunting, and we talked about valuations in there. And one of the things it's important to recall is that valuations are not what kills a bear market, nor do they kills a bull market, or do they revive a bear market. Things can stay over or undervalued for a great length of time, and it's usually something structural that breaks that brings markets down.
And so yes, the valuations are high, but earnings estimates and GDP estimates have been brought down low because no one knows exactly how to filter through all the impacts of everything thrown us this year. And the one theme that's been very consistent is the resiliency of businesses, the economy, and consumers.
You know, it's kind of wacky, right, like we just in terms of the moods of this market, Like you go back to January and I think we weren't you know, we were still in the Biden economy and people were still talking about us exceptionalism. And then we got the inauguration and the White House started, you know, implementing executive orders and different initiatives. And then of course the tariffs and we saw a stock sell off and then we've seen the bounce back as things kind of eased when
it comes to tariffs. It's just been kind of all over the place. Is there a dynamic though to this market?
You know that you kind of can cling to.
I think the dynamic we've been claimed to and the thing we've urged investors to cling to all years to follow the fundamentals and to look at companies and to listen to what companies are doing and watch what they're doing. And it's interesting because we also had in addition to all of that, we also had the big disconnect between the hard data and the soft data for a long time, or the sentiment, and you still see inklings of that, particularly among consumers.
But we've also encouraged.
Clients to step back and think through this is really the mirror image of what you had in Trump one point zero or when he came in there. You had a lot of really optimistic things going on with the economy, and then we had tariffs hit in the back half of that, and then we had COVID, and everybody.
Had a collective lack of recall of.
What came before COVID in a lot of cases this time around, if you recall after the election and into early January, we came in with a lot of optimism. Wall Street staffed up thinking we were going to have all the M and A and IPOs and all of that go on, and then we got hit all of a sudden with tariffs and trade policy and geopolitical issues and markets took a step back and looked at that, and now we're back to where a lot of that
stuff's pushed aside. Markets are desperately trying to get to the other side of tariffs and focus on something else.
But business is through it all.
And that's one of the advantages we have is that we bank multi generational businesses and we also manage the money for those businesses when we'll liquidity events happen, and
so we're plugged into a lot of that. And when we talk to the business owners and the commercial teams we have that serve those those business owners, they've told us throughout their adapting and adopting as best they can, and they're nervous, but they still have to grow and they have to continue to do business because they have shareholders and bankers and employees.
What are they nervous about.
I think they're just nervous like anybody else, trying to figure out, you know, where does the next policy changer shift come from?
Where there's I think the answer is social that's where it comes from.
Maybe it's social media, but you know, the hard part is is it amplifies moves too, and even you know, even when you go do a search on social media, your search is going to feed your your.
Personal personal preferences.
If you will, you have to be active about searching a variety of sources or active about searching out something that's going to be neutral and down the middle. And so yeah, it's definitely been a challenging year, but it's a big process of having to write every week really helps because we're trying to sort through the okay of all of this stuff going on, right, what is impact for portfolios moving forward?
Carol, But I thought it was interesting that you said that the work that you guys are doing for businesses that even though there's some concerns and uncertainty and fears out there, that they're making decisions right because they have to run a business and if it's a competitive world as we all know, and if they kind of delay miss something, there's potential that they're going to lose share, right and they're going to fall behind it, so that
they're pulling you know, that they're actually moving ahead with things, even.
Like we see the IPO market. That's a good sign.
Yeah, it's a great sign. And we've been talking about for some time. When you look at the stats of what's out there because we've had such a locked up IPO market for such a long time. I've seen some estimates recently of as many as thirty thousand companies that are revenue and earnings generated mature companies in venture capital and private capital portfolios.
If even one percent of those go public, you know.
The other thing that's really interesting is when you were tracking the earnings as they came in in the second quarter, they're technically according to Bloomberg, there were only four hundred and ninety seven names in the S and P five hundred.
So we've had this net reduction of public companies out there and so having some IBOs because we peaked in terms of public companies back in nineteen ninety six I think it was, and currently there are more ETFs than there are publicly held companies in the US.
Interesting, wait, all right, wait, we got to go, but we got to come back on that point in the future, because I think it's an interesting dynamic to this market and what it says Caryl.
Thanks glad we could reconnect Carrol's life.
She's cheap market strategic at Female Private Wealth joining us from Minneapolis.
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