Bloomberg Surveillance TV: April 17th, 2026

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This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordernt. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app. So here's the latist

Great to be with you and great to have view all three.

And thank you for hosting us. Thank you for hosting us. Sir, Let's talk about this. I've asked so many people this question. I'll ask you why isn't the President taking the off ramp and getting his man confirmed at the Federal's.

Well, it's what I recommend. I mean.

I said back in January that I didn't think Jay Pal had done anything criminal and that it was a distraction to have the DOJ dew that investigation, which is, as I've said many times, doesn't exempt the FED from criticism. I've had plenty of things that I think that Jay Power the FED Board should have done differently over the years.

But it's time to.

Move on from this. The petitions to the court have been rejected, and I think it's time to move on from the case and put our attention around getting Kevin Warsh confirmed by the United States Senate.

Do you think it's enough pressure right now in the White House for the President to take the off ramp.

Well, I would hope.

So you see this letter that you just had the reporting on from the Democrats, and Senator tell Us is still very committed to holding his support of the nomination until this is behind us. The House Committee or the Senate Committee continue to work look at the investigation of the building if they want to, and that kind of thing.

But when it comes to.

Our oversight, of monetary policy, our overside of the treasury market structure, the face of just doing our routine work and overseeing the FED. I'd like to see the new chair confirmed and let President Trump have a new partner at the FED. Let Treasury Secretary Bessett have a new partner in bank supervision and monetary policy. It's time and I think it's important to move.

It feels like the president's doubling down. Maybe he doesn't want to lose face. So what could potentially be an offer? I mean, he likes deals, is potentially I'm going to drop the DOJ case. But J Powell, you're not staying on till twenty twenty eight.

Well, I think Chairman Powell is interested in seeing his replacement confirmed, and I think Chairman pal is probably interested in going on to the next phase of his career in his life quite frankly, So.

You don't think he's staying on as governor, Well.

I think that depends on According to J. Powell, that's how he's inclined to stay on. According to J. Pal, if Kevin's not confirmed and if this case is not dropped.

So this is why I think it's if you're.

For the Trump administration and the Treasury moving on having an economic policy that's in alignment. Then I think it's in the president's interest to see the case move on and let's go forward with the Trump administration's appointees at the FED.

In the meantime, Rick Reader of black Croft was just on and he was talking about how he would like to see whoever comes into the FED next work with the federal government on initiatives to try to get mortgage rates lower, try to get benchmark rates lower on the long end as well, in order to keep affordability under check.

Well, I think the best way to make sure that takes place is to make sure inflation is well anchored. And I think we do that by taking steps to on the supply side to see that the big beautiful bill from last year on the tax side is fully implemented. Let the Americans, both in business and home and their households reap the benefits of those important supply side tax changes, and let's continue our work to right size regulation. Those things would free up more capital to the housing sector.

Let's finish on financial services. What are you hearing about, mythos and how dangerous this might be? We sho you understanding of things right now?

Well, the Committee has both ranking Member Waters and I are concerned about that. We've actually asked the Treasury for a brief there we have noted the treasure Secretary's engagement and the FED with the largest financial institutions in the country. When I meet with the private sector, I hear from them that Claude is a very effective AI partner and that they've been most impressed with it, and that they want to get into a mode where they can see

Making some bold claims ahead of IPOs, they've got an interest to really hype this up over the next twelve months. It's hot to understand what's random, what is in and the thirty seconds we have left, do you foresee any hearings to get some of these CEOs in front of you guys, for the public to have what's random, what is.

In Well, we've started our hearings on AI, both from a regulatory compliance point of view, and we have done roundtables, meaning not public hearings yet with the business sector, both the tech sector and the users. And I think you'll see us continue that work this year.

Stay with us multile impex Savan's coming up off to this. We begin this hour with stelf sitting of record highs as investors are potential us around Truce Rick, Reader of Black Rock, writing, the immense disruption of trade and global supply conditions will be what truly influences market price sick. Rick joins us now for more. Rick, welcome to the program, buddy. Always a privilege, a pleasure to catch up with you, sir.

Good question, so I'd I'd say a couple of things. First of all, I think what it tells you is the technicals in the equity market are extraordinary, and the earnings numbers that are coming through are pretty powerful. And so, you know, you look at the US economy and you look at what's you know, I heard the beginning of the showtime about the economies week. Economies is strong. Actually the parts of the economy and the primary drivers are doing quite well.

You look at tech.

I mean, you look at some of the numbers yesterday that you cited, and you look at these earnings growth and I was looking at some of the semies.

You took about ninety seven percent earnings.

Growth year on here. I mean, like unbelievably powerful numbers. And then you look at you know, the high end consumer, that consumption, You look at retail sales when you break it.

Down, pretty darn good.

So you've got an economy and by the way, you've got housing's not in good shape, lower income's not in good shape.

So that is is what it is.

But what drives the equity market is in pretty good shape. And the technicals. So you had this period of time that nobody wanted to buy stocks, and then you realize, you know, I've said it before. You you know you're gonna have an IPO calendar this year that maybe's a couple hundred billion. Maybe we're going to buy back a trillion of stock this year, so we're actually there's not enough stock to buy.

So it's just a pretty You talk about how explosive this is.

You realize people sit on their hands, I don't want to do anything, particularly in tech, and then all of a sudden, you know, maybe a little bit of better news, the earnings come in, and then then you create this the technicals and equities, by the way, it's complete different. And when you think about the treasury market, et cetera, because we're getting we get five hundred and twenty billion a week of supply, it's I mean, it's amazing. In the equity market, how good the technicals are.

Rick, Is there a contradiction in the fact that we're seeing such explosive confidence in equities?

You're seeing so much cash.

Out there that are looking for places to go, and at the same time people are expecting inflation to come back down to two percent over the next five to ten years.

Does that seem contradictory?

No, man, Listen, I think I think, and I've been doing this for many, many few decades. I've never seen a productivity revolution like this before. I mean, so you go through I mean almost every company I look at, you see a similar dynamic. I grow my top line revenue, let's say it's four to ten percent. Obviously techt's significantly

Companies do great.

By the way, the counter of that, it's not great from an employee point of view. You're seeing that playout, which you know is part of what you know what affects the interest rate transmission. So it's a really good story from a productivity and a corporate earnings point of view, not so much for the broad world population.

So Rackel bullish are you right now? It sounds like you're incredibly bullish on big colaps. I mean, are you essentially going all in? Do you think it is a time to go into equities over bonds, to go into equities over cash, to go into equities over commodities.

I'm not that bullish, but I listen, I think, listen.

You know we are long the equity market.

You know.

One of the things that happens when you know you had what happened a few weeks ago, when volatility spikes, you can't really it's hard to have a very long equity position because you can't manage your risk using the volatility markets.

Now vall has come.

Down, it allows you to run a bit longer equity disposition.

And so, yeah, I like equities.

If you said to me, let's look at the credit markets, he say, gosh, where is high yield? Where's investment grade credit? And I say, okay, I've got some beta that I could put in the portfolio. Look at where spreads are investment grade credit not interesting?

High yield you know it carries well. Spreads are not that interesting. So I said, gosh, I'm going to.

Take my beta and orient it a bit more towards the equity market, or more towards the equity market where the earnings growth is explosive. I got convexity of the upside and I can manage the risk. That's a better in a portfolio construct. That's a better disposition than I think than you know, parts of the credit market are today.

We're how do I think the Federal Reserve is thinking about all of this, especially given the fact that we are seeing higher energy costs in the United States, not as high as Asian Europe, but they are still sticking higher.

You know, I tell you there's a pretty extraordinary point in time, and you know part of what I'm talking about productivity and the employment dynamic.

Listen.

I think the Fed you will be on hold and watch the data and you'll see it by the way you're going to see and we are seeing some what will be some particularly headline inflation, some heavier numbers on inflation. I think what the FED has to do and the ECB has to do is think about you having a supply shock. This is not a demand driven inflation. By the way you think about what's happening to lower income, middle income people. You're getting hurt on food costs, fuel costs.

Bit, I'll watch the data. I think the ECB should do the same.

Maybe they get ahead of it and hike a couple of times, but I listen, I think you know when we talked about before, how's it. Look at the housing numbers this week. You look at existing home sales. When the mortgage race shifts up, home sales come down, and then you look at the breakdown of retail sales. You know what's happening. And I mean, is the dispersion keeps growing? Lower income, middle income having a hard time. That's where

I still think you'll get a couple of cuts. Do you push it back a little bit?

Yeah?

Maybe, but you're talking about a very two speed economy where interest rates really affects things housing, small business, lower income, and it's part of what I think the rate can come down.

So reck, let's look across the curve right now. If the Fed's going to stand hold, that's going to anchor the front end. We've seen a lot of that in the performance of fixed incoming treasurey yields over the past few weeks. If you go further out along the curve, it just feels like the ten year is anchored around four thirty, which was the upper end of the pre

You know, I had to tell you, Jonathan a minute when you know, I hear people come on and say I think rates are going to higher things, I think rates are going lower. I actually find the turn year part of the curve from an acid allocation point of view, not interesting, as you said. But by the way, my colleague Rus Brownback talks about your show all the time.

Can you keep mortgage rates down? Are there initiatives to.

Actually pull that mortgage rate down that you can have through fiscal stimulus?

That's really powerful.

My sense is that ten year note will drift lower over the you know, through this year as you get maybe you get the funds rate down a bit. Can you keep the ten year alongside of it? But I will tell you, Donathan, in our portfolios, I say, look,

Rick, We've got to ask you what kind of initiatives would bring down rights yields at the long end of the curve.

So, by, by the way, a bunch of things from the FED. From the FED point of view, you can use your balance sheet effectively. We have eighty nine percent of the debt of the treasury markets in the zero to two year part of the yield curve. It's actually not that much out in the back end. The FED can actually be very very effective. And how you manage

We should talk about.

You look at how there's not enough inventory of houses today. It influences labor mobility to the negative. Because we don't have enough inventory, people can't move. It influences we don't build enough houses. We don't put enough people to.

Work in shelter.

And by the way, you can't bring down shelter inflation because we don't have enough houses. There's tremendous motivation and quite frankly, the initiative to actually bring down housing costs and a brainer to build more inventory to bring down that mortgage rate. You know, I think it has much more, much more benefit than people give credit.

To stay with us.

More Bloomberg surveillance coming up after this, and Stephen Kirk of the Council on Foreign Relations writing, the Iranians will demand a role in whatever is planned and will not give up whatever leverage they have. Steven joins us now for more. Stephen, good morning, good to see. Let's talk about some of the claims coming from the president. I mean, they've made some concessions. Can you just outline your understanding of what the demands are and what the concessions might be.

Well, the demands have been pretty consistent that the Iranians have to give up their nuclear program, they have to give up their missile program, and stop arming and supporting their proxies. I don't see any real movement on the part of the Iranians.

There may be a negotiation.

The Iranians may demonstrate some tactical flexibility in order to get themselves out from under the problem that they've now found themselves with an economy that's teetering on the edge. But they want to live to fight another day. And the people in charge in Iran right now are the hardest of the hard line. I mean, the President keeps talking about this new pragmatic regime. These are people with a history of waging war against the United States and its partners for the last forty seven years.

Is the President just basically insinuating their pragmatic because they showed up to talks.

Is that it is that.

The only step we've seen from Iran to be willing to negotiate with the United States is that they actually showed up in Islamabad.

Yeah, that's precisely willing to talk. So essentially the President is roy cohening this. He's saying something that he wants everybody to believe, and he's trying to create his own reality on this. But there's no indication that this group of people are willing to meet the United States. There's certainly they're not willing to capitulate on the battlefield. What makes anybody believe they're going to capitulate at a negotiating table.

You're right to say this administration has been very consistent with what they wanted to see from Iran. But now there's this extra additional need, which is the opening of the Strait of Hermos. Would the United States or golf partners except the Strade of Removes be open, but Iran would get some sort of monetary fund for that a toll.

It strikes me that the United States will accept that. At some point the Golf States will be very very unhappy about this. I mean, think about the strategic setback this is for both the United States and our golf partners. Before this war was launched, there was freedom of navigation through the Strait of Hormoves.

Now the Iranians have some notional.

Leverage over the strait, although we're blockade it right now. Some resolution of this that gives the Iranians a role is something that no one ever imagined. And can you imagine a situation in which the Amorandis or the Saudis have to pay their primary regional adversary for transit through the Strait of Hormors to keep their economies going.

This is a.

Tremendous strategic setback for the United States as well as the Amorandis, the Saudis, the Iraqis, the Bahrainis, everybody.

In the region.

And it's not just about Iran, It's also about China. And the Atlanta Council put out a graph showing that the number of cross border payments transacted in run minbi has gone up tremendously in the past six weeks. I mean, how much do you see China stepping in and trying to create the Petro Yuan to try to reassert themselves in terms of the voice of influence over the region.

Yeah, you know, I think the Chinese stand to gain here at the expense of the United States. But I think that the Chinese also have a compelling interest in freedom of navigation throughout the throughout the world, but particularly in the Strait of Hormos. I also have a ton of oil in storage. So I think the Chinese are well placed to play a role. They have pushed the Iranians into talks and made their preferences known. But I don't think the Chinese are really wanting to step in

It is not completely clear what all of the goals are. There's a general goal though in the United States and in the Western world, freedom of navigation through the seas, a desire not to see a nuclear Iran. What's Iran's ultimate goal given the new leadership.

The ultimate goal of this regime is.

Survival, okay, but beyond that, but beyond this.

To continuous nuclear program, I mean the ultimate guarantee of regime survival, to hold on to the leverage that it now has in.

The strait of rumors, which is something new, which.

Is almost as good as, if not better than, a nuclear program, because you might be able to make money off of.

It and to continue.

To play a role and put pressure on the rest of the region. The Iranians have not given up despite the battering that they've taken any of the basics of their approach to the region and their approach to.

The United States.

That has been a change of strategy from the United States. There is now a blockade of the blockade. Does that mean Iran has lost leverage or they just going to wipe the out?

The Iranians look at the world in a very different way the way we look at the world. We look at the world in two four to six eight year periods because that's how electoral cycle. Those in charge of the Islamic Republic have a much longer timeframe, So.

They'll wait us out. They'll wait out.

A new administration will come in, they'll have some new approach, and even if there is some change, there's a blockade of a blockade, but there's some negotiation that's going to go on about the status of about the straight up ormos. They're going to insist that they play some role in it.

But right now they can't move their product either. And at some point in the next few weeks, analysts say there's going to be shut ins. They could do some serious damage of their wills, which is oil is basically the main driver of their economy. Do you think that could force them to be a little bit more pragmatic.

Well, certainly the economy is on the verge of collapse. The Israelis and the United States have done tremendous damage from the air and now this blockade is making things even worse. But keep in mind, as I said before, this is the hardest of the hard line. They'd rather eat dust than capitulate to the United States.

So I think this is going to go on much longer, and.

Again at the negotiating table there might be some tactical flexibility. They're interested in sanctions relief, but are they interested in.

Solving all the issues between the United States and are on I don't think so.

Really tough question to answer, But I've got a while skin forgive. I've got a pvice case of how long the strike's going to be closed full I think.

That the straits are going to be closed for at least in the next few months.

The next few months, I think.

It's entirely possible that, you know, it's going to take time to negotiate this. The end of this blockade that the Europeans are talking about this mechanism, it will take time for them to get it together to get naval escorts through the Strait of Homs. That's even assuming that the Europeans have the kind of kind of organizational capacity to actually do this kind of thing without the help of the United States. And as I said, I think

This is the Bloomberg Survendics podcast, bringing you the best in markets, economics, antient politics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business Amp.