Bloomberg Surveillance TV: August 28th, 2025

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This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordert. 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

Hi, and the pleasure to join you.

Pretty much.

I think everything has changed. I started at the IMF in twenty nineteen and that feels like that was the calm before the storm, and you had the pandemic, you had war in Ukraine, and now geoeconomic fragmentation. I think the global economic order is transforming in ways we haven't seen in decades, and it's still highly unclear where the global economy will settle. I think the second big difference between twenty nineteen and now is on the fiscal front.

How has the IMF's for all changed during this period, given that it was set up under a very different infrastructure at a time, and a lot of people are saying we're now in the post Bretton Woods era.

The IMF has great experience dealing with turbulence. You know, there was a period when you had the end of Breton Woods going off the fixed exchange rate to the dollar and the dollars to gold. That change happened and the IMF adapted, and we are obviously now in a world with big shifts in terms of how countries work with each other. The IMF has always functioned as trying to do the art of the possible, which is due the best you can given the constraints, and done it

Do you see a risk that it doesn't survive though at a time when funding is really in question, it's a lot of major economies. We've seen China go it alone. There have been questions about the United States.

Firstly, the IMFs funding structure doesn't rely on any budgetary support from any country, so it's in a very strong place because of that, and everything we've seen so far points to all the members wanting the IMF to continue functioning.

As it has.

We work very closely with the US administration. That engagement is going extremely well, but also the other one hundred and ninety member countries that we have so as of now, lots of support. Of course, the environment has changed and the IMF is going to adapt to it in this new geopolitical environment that we have, but it has a lot of experience dealing with these kinds of events.

One thing that you've done during your tenure at the IMF is really study the change in the geopolitical relationship. You've talked a lot about that, including the reliance on the dollar, and that's been a point of big speculation of late in markets as well. How much you actually seeing worldwide nations try to shift to alternatives from the green back, this idea of insulating themselves from some of the policy uncertainty that have made a lot of headlines this year.

So we do see small shifts on the margin, right We are seeing countries diversifying out of the US, but again on the margin, because they were so exposed to the US, several of them are hedging against a dollar risk.

We're seeing some of that.

Too, But I think the narrative that somehow something is dramatically changed about the behavior of the dollar.

It's really too early. People point to the correlation.

Between what's happening with long term bond eels and the strength of the dollar and saying, well, that's changed, and therefore something has changed dramatically.

That's not the case.

We take long enough period, the relationship between the dollar and borrowing costs is you know, it can move in different ways. So there's nothing unpre idented. But of course these are still early days. We shall see where all of the shifts in the global economic order are headed. And I think that's the source of tremendous uncertainty that's still weighing on the world economy.

How much has any perceived loss of FED independence changed that? And we've been talking about how there's this dissonance between the commentary by a lot of analysts and economists about the fear of some sort of loss of independence and then a lack of market reaction that you would kind of expect on the other side. Are you seeing any shifts that maybe are less visible.

I think everybody agrees on this, would be markets and economic professionals, policymakers. Everybody agrees that central bank independence is critical. One tree policy independence is critical. So if we are not seeing much market reaction, it must be that people think that well, that independence is still intact, that independence has been critical to bring down inflation from the high levels we saw post pandemic inflation expectations were anchored because of that, inflation came down.

So I don't think there's.

Any ibsence but about that.

It must be that everybody still believes that independence, especially operational independence in terms of setting arntry policy rates, will be maintained.

So you reject the idea that the market's just somehow ignoring a reality or something like that. You think the market's speaking and that we should listen to the market.

No, I just think that everybody at this point is functioning on the fog of uncertainty. I mean, there's really a lot of information thrown out there. Separating the week from the chef. It's not that easy, and so I think everybody is on wait and see mode. And right now, at least, of course, I think that the markets are putting very very low probability on any big negative event. That may be excessive. I think is more to worry

Let's put some of these things together.

If you look at developments in the UK, in France, the bil to address fiscal concerns and find that additional fiscal space, the latest developments here in America as well, are you witnessing Do you think we're witnessing a convergence between the kind of dynamics we typically see an EM with DM and do you think those terms are useful anymore?

In quite the same way.

I think we have certainly moved away from the case of advanced economies. Rich economies can keep increasing their death which is what's projected to happen, and there's not nouchu to worry about. I think we certainly pass that major economies are beginning to worry about what's happening to their eels. You're seeing that it's a major concern France right now as we speak. But even in the US long term

But we should.

Recognize that the reason we've seen resilience is because we haven't had a financial crisis. Despite the pandemic, despite wards, despite geoeconomic fragmentation, despite FED rates going up very sharply, we've not had a financial crisis. That doesn't mean that that will never happen. We have very high levels of debt around the world. I think bond markets are in.

A fragile place.

You have valuations in equity markets that are sky high. So I would say trede carefully because if you do have a financial crisis, we know those the scarring that comes from that is long lasting.

And when you talk about a financial crisis, some people are wondering what can potentially trigger it. Are you saying that the sovereign debt market of developed markets is of the greatest concern at this point?

I mean, usually when you get a financial crisis, it's a combination of events that can trigger it, right, And so if you have multiple markets that seem to be in a vulnerable position. You could end up with a negative event, right, and so the bond markets what you're seeing with very high levels of debt fragility. Associated with

All of that is going to be very important.

So you're leaving the IMF and you're going back to Harvard A university that you've known very well, what are you going to be doing there? And how important is it for you to really get this sense back in the economics profession of pure research and true rigor versus some of the politicization that we've seen recently.

So I think the reason that the economics profession has been able to contribute so well over these last few years is because in the phase of unprecedented shocks, you really need to go back to some of your training to figure out how you're going to respond to a pandemic that you haven't seen in one hundred years or war in Europe, right, So having that base of knowledge

Those are the crown.

Jewels for good economic policy, and yet the policy direction is away from that. So I think there is absolutely some bit of soul searching, some bit of stepping back and asking yourself, how do you solve this trust deficit? How do you make sure this in this new world of communication, that the good ideas still come true.

Stay with us. More Bloomberg surveillance coming up after this.

Dan Ives, the global head of tech research of Wentburst, writing, we view any declined and invidious stock to be a clear buying opportunity as it remains the only game in town fueling this fourth Industrial revolution. On just now for more, Dan, you sit in the headlines the boom is over. What's the pushback this morning?

I think the booms just starting. I mean, if you look at these numbers, especially when you factor in what China is going to be. I mean, you know Jensen talked about fifty fifty percent type growth number, This just shows the next stage of adoption is actually just starting.

I think, Look, I think the stock is green today.

By the end of the day, Dan, that's what you're saying. You think that by the end of the day people will realize come around to your point of view that actually what the disappointment was was a non inclusion of any China sales, but a real robust growth elsewhere.

Is that your argument?

You just exactly like summarize it, because the reality is is that when you look at data center and then you actually factor and with China's going to be when you look at two to five billion and you look at the acceleration next few quarters, I mean, there's no reason that's not accelerating. And now in China with the pay for play model back in you're talking about could

Dan, I feel like we should do a show where in the world is Dan ives of Webbush because you're always somewhere different. This morning, it looks like you're down under in Sydney, and I'm curious about the rest of the world. It's actually really telling that you've been traveling the world because outside of China and Video's growth has been tremendous and we've seen a real increase, particularly in other Asian countries.

How much does that.

Give you that extra bullish push that, even if it's not China, you are seeing the rest of the world rush to adopt as much as they can of in video before maybe some of the policies change yeah.

Look, and I think you see that Leason when you look in Middle East, I mean Middle East, perfect example, they're just continuing to just massively build that out when it comes to Saudi UAE. Look, the reality is is that they're years ahead.

To any other chip player.

I mean you look at everything happened from a Huawei perspective.

There, they've narrowed the gap.

But the reality is that every Chinese big tech player wants in vidio chips. And I think what you started and now realize is that you talk about a third of that overall revenue going to in video. This is trillion that's going to be playing out. That's why I believe there's a five trillion dollar mark cap. You know, either by year end they're early twenty six.

But Dan, the China policy is subject to change on the US side, and also we have seen in the past Beijing telling firms not to buy and video chips. Can this company continue to grow the way you envision if say China was taken out of the of the play.

Yeah, Look, there's no doubt China continues to be That's the golden goose for Jensen Avini. But that's also why look Jensen ten percent politician, ninety percent CEO. And when you think about the China market, but also Beijing telling Chinese company is big tech not to buy in idio chips, that's like telling a kid don't eat the candy.

The reality is they want in video chips.

They don't want to have a third fourth rate chip. And that's why Jensen knows it. And they're going to continue to kind of play this policy. And I think we see here six nine, twelve months now China's a fifty billion dollars annual market for them.

Jensen Wang last night said they keep advocating on the sensibility of an importance of American tech companies to lead and win the AI race. Basically, we keep lobbying the American government when it comes to Blackwell, do you think at some point they'll be able to sell those chips into China?

Hey for play model, right, I mean maybe that fifteen percent goes to twenty five percent. Look, because Jensen understands that what they can sell that gives Huawei and China that much more power. And I think in this AI arms race between the US and China's biggest poker chip on the table continues to be in video, and I think that's the reality. There's no one that has more info when it comes to AI, you know, relative to Trump.

Vin Jentsen, I mean he's become really I think.

A big strategic advisor for Trump administration when it comes to AI.

Now, nobody's saying the growth story is gone a way. We don't think this is going to next growth. No one's suggesting that we're going to see healthy double digit growth figures. Based on what we heard from the company overnight. What they are suggesting is that the level of growth is going to change, and perhaps we need to reassess our view of this company With that in mind, don how have you changed your view as growth decelerates just by definition?

Yeah, Look, my view is that as you start to actually go into physical AI world and you go into Thomas going to robotics, you look at the next few years. I could argue streets underestimating numbers twenty five thirty percent next fe years. So I think as this actually plays out, my view is like in video is undervalued relative to where this is all going, and we're only in Like I've talked about, the AI party was nine pm, now

What's become clear though, from the earnings of the likes of Microsoft and Google or Alphabet, is that there is some pushback when it comes to the investor in community about how much some of these companies are spending and it needs to broaden out in a significant way, and if it does, that raises questions about how much in Vidia has to steal market share from other players. Who's going to be the biggest loser as in Vidia continues and charts its path over complete dominance of this industry.

Yeah, losers are clearly Intel, right, I mean, despite obviously what we see with US government and you know, obviously soft Bank. I mean, I just think there's a better chance to meet playing Ryder cup beck Page than Intel gaining share, you know, And I think that's that's part of the issue, is that AMD is going to gain share in video in the game chair. You're clearly on broad common others, but it's a have and to have nots that's going to continue to play out.

But but you look at last night's quarter along.

With what we've seen from earnings as a ball, you feel really good in terms of the validation story for AI.

Down before you go, Shaitkeigan Bradley have chosen himself.

Look, I think he could have chosen himself. You know, it was obviously maybe a good decision for him. But I think ultimately US wins. That wins a Ryder cup that pitch.

Stay with us mult Blomberg Surveillance coming up after this. Stuart Kaiser, the head of Equity Trading Strategy a city right in the following. In videos, earnings is the largest event for the S and P five hundred over the next month. For equity investors, the AI theme and the impact of that on returns is on par with the FED. She joins us now for more Stuke and Mornic, good morning things. A pretty calm on bike. What you make of that?

I mean, I think the.

Video numbers were just about good enough effectively, probably right at the low end of where the whisper number was. The China stuff obviously adds a little bit a little bit of noise to it, but I mean margin seventy you know, seventy whatever four and a half, seventy three and a half percent ey sackmor they wanted to be fifty.

Four billion of revenues.

I think that the test here was if a video was really strong, what would it have done to.

The Russell trade?

And I think that's what a lot of people were sort of debating, was if we get a because you know, Snowflake, a mango dB both very strong results on the soffar Ai side, if you had gotten that from a video, would that have made people you turn out of the Russell and value trade back into growth. It doesn't seem like the numbers were strong enough to do that, but they were strong enough to keep the S and P from selling offs.

So mill toast in video rapport is good for small camps.

Yeah, at least tactically, you know, at least to highlighted with the mix of policy versus data. I think that that small cap trade as really poor risk reward as we go into September, because it's careful what you wish for, wish for good news, good news news, bad news type situation. But yeah, exactly, But yeah, I think I think the

Couple of weeks.

Is this actually a connected idea that somehow big tech winning is small companies losing or is this just simply that markets can only focus on one idea at a time, and if they're not focused in AI, they're focus in the FED.

Yeah, it's probably a little bit of both, but yeah, I would agree with that. I think there is some view that how do you keep up with the spending that these hyperscalers are doing, or if you're a smaller company, the market right now is to some degree in one big trade, right, and that trade is long growth long large cap long the AI thematic right, and everything else has sort of been ignored to some degree. What we saw in August is people trying to re engage with

To that value, trade al right.

Is any money coming out of bonds and going into stocks.

And this is something that a.

Number of people had been flirting with earlier in the year, the idea that they could get better yield on stocks at a time when inflation was going to be a little bit more elevated than say bonds, especially with uncertain policy.

Yeah, it'd be interesting to see if the Fed actually does start cutting and those money marketing yields actually get down to a level where it's a little bit attractive if we see a re engagement. If you look at the balances in retail money market funds, I mean, you're like three trillion bucks. It's a lot of money. Not all of that is coming into stocks, right. I think some of that was basically bank account money that got put into money.

Markets for yield.

I don't necessarily know if that would go directly into equities, but there's the potential you get a little bit of a tailwind, a little bit of a toil went there. The question there, though, is if there is, why are they cutting? Is ultimately what this gets into. If they're cutting because the labor market is falling apart, money is not going to be rushing into equities, and that's going

Well, with the event of Nvidia behind us, what's the market going to be focused on now? Is it squarely on the labor market report ahead of the Fed meeting?

Yeah?

I think it's payrolls and then September ninth you get the BLS revision to payrolls, which, as you cover Trump, I'm sure that'll be very, very very certifuction this.

Week in the cabinet meeting that he expects a very strong labor market report.

He might get a decent labor market report, but look, I mean, consensus is sub one hundred k. Chairpal last week said break even on jobs right now is fifty to seventy five K. So look, I mean a strong report right now will probably be one hundred and twenty five.

But you know, our economists think you might get.

You know, four hundred thousand, you know, negative revisions from the BLS benchmark that is not going to go over well politically and honestly, from a market's perspective, that's a sneaky event. On September ninth, you know how many jobs get kind of revised out of the BLS.

It's a ready else setup, isn't it.

This market is pricing in a cyclical up term federal reserves, ready consent increasing center baut cyclical DOWNSTND.

What gives I agree with three hundred percent. But I actually thought the response to the FED.

The response to the FED was much more positive than I would have guessed.

I think what happened was the initial.

Headline was about their getting ready to cut, but if you read his speech, it was because they are seeing some you know, weakness in the labor market. Not only if they say weakness, I think the risk reward is really poor. And then a lot of folks, I think, believe that they're prioritizing growth. But he also specifically said we're not going to allow character of inflation to become a bigger problem. So I was surprised, honestly at how positively the market reacted to the FED.

But yeah, I'm with you.

I think you have a little bit of I don't want to say a disagreement but you have a situation where the FED is clearly worried about the growth side of their mandate. The market has been willing to ignore that to some degree, and as I said, I think that gives you really poor risk award to some of these smaller captures.

There's a phrase I really don't like, but I'm going to use it. Hawkish cup Is that kind of what you're thinking about September seventeenth, of course, relative to what's expected at the time and what comes in on the data front over the next few weeks.

But it's that where you're at now.

I guess you know in the sense that yeah, they are probably going to cut, and yes, I think they're going to be very cautious, and how they cautious and how they message that in the sense that this is not, you know, an aggressive kind of cutting regime.

No.

Look, if you get a very weak labor market report, that cut may it may not come across as as hawkey.

So you know, they are very very data dependent.

But although equal, let's say we print a consentious job number of call it seventy five K, and you get an okay inflation print, then yes they'll cut. But to your point, They're not going to message this as an aggressive cutting cycle. They're probably going to message this as a meeting by meeting process that is data dependent.

So if you just turn this on its head and take it a step further, is this essentially a market that's hoping this is a politicized rate cut and then it's going to be a politicized rate cutting cycle that doesn't necessarily warrant it based on where the economy is, which will give fuel to equities but won't actually be as a result of economic weakness.

Well, myself out of trouble, I'm going to call those insurance customs yes, and I think that well, probably yes, enjoy some insurance counts. Look, there is a sneaky uber Bowl case out there lurking right, which is that for three months corporate Americas said on their hands, did less hiring, did less capital investment because of the uncertainty around tariffs

No, you say that it's low probability.

But I was looking at your very own economic surprise index and it actually is at the highest, the most positive going back to the end of last year. So if you see, yes, the economic data hasn't been great, but it's been trending in the right direction. It's actually begoing the opposite direction of some sort of doom and gloom in the economy. So how do you square that with the idea that there really is weakness under the hood that the FED is responding to.

Well, what's interesting about that too, is a lot of us come from the soft data, which is survey data.

You mish was actually quite weak.

So is the survey data that's in you're figuring No, But the survey data that's improved has been corporate survey data.

It's been the PMIS.

So in the sense, if you believe that corporates are going to re engage, that's very positive news. If you're worried about the labor market, you're kind of a little more circumspect about it. So agree that the data looks pretty good. Look, economic surprise can be positive for two reasons. It could be really strong data or really low expectations. In this case, it might be that the expectations were kind of low when we're clearing relatively low.

Mark that kind of set up with Corporate America having the one big beautiful build deregulation and some clarity on tariffs. What does that mean for the FED in twenty twenty six.

I mean, I probably mean someth that'll be really if they're in a cutting cycle, doing it very very methodically and maybe like a quarter to quarter basis instead of a meeting to meeting basis. Look if they get if you were to have all of that stuff kind of coalesce into a little bit of an upturn in the US economic data, then yeah, the FED is going to be much more focused on ensuring that the inflation risk

I didn't take you as a humisch kind of guy. I used to be a Humich kind of guy. And then I realized that the respondent right, you know, the response right is just ridiculous.

You need to defend yourself here because you know, humish kind of guy.

Ehodaently is your new kind of.

Slight conspiracy theorists, humish kind of guy.

This is what happens when the British come. They don't like the Dow, they don't.

Like they're anti America.

Stay with us, malplinpag Savanna's coming up off to this, would like to bring in Nati Richards and the chief economist of ADP nat A good morning, Good morning. If you took some time off, not that you ever do, but if you did, and you didn't know any of the economic data and I just showed you jobless claims, would you have a decent read on the languor market right now?

Yes, I would think it was pretty strong. But if I unpacked it a little bit, then I haven't taken a lot of time off.

Actually I've been a mock.

I actually identify four crosswalks between macro trends that are big in the making and also the very granular real time data that we're seeing. Then the first one is the consumer. That consumer spending, which you're seeing picked up in the GDP numbers, has been a resilient driver of the labor market as well. So where you see strength in the consumer, you're seeing strength in the jobs market, namingly leisure and hospitality, and there's some trade and transportation

How much is there stealth firing or sort of attrition plans that are in place that don't make it some of the overall numbers as necessarily job losses in the traditional way.

You know, this is a super and I'm glad you asked me this question because it's a super complex question because what we're seeing on the part of the employer may not be demand driven.

First of all, we had this.

Great, big, great resignation in twenty twenty two, and young people are supposed to turn over, they're supposed to leave these jobs. They're staying put. And so there's a little bit less hiring because people are staying put, and then you have the effect of AI. There's been new research from Stanford that was out using ADP data. A paper was released yesterday saying that in AI exposed fields like software developers or customer service reps, you are seeing an

But do you get a sense of whether it is weakening in a way that would justify some sort of FED move or that would require some sort of policy adjustment, or is it just transforming. Is it just a structural shift that has nothing to do with policy. Frankly, it has to do everything with technology.

Yes, and yes, and that's what makes it so hard. Yes, it is weakening. We are seeing a slow down and hiring momentum. It's a slow down from the beginning of the year. It's a slow down from last year. Some of that is what Chair Pal said in his speech, that we're seeing lower supply, lower demand, but still some equilibrium that gives us a pretty good unemployment rate.

But yes, it is structural.

We're seeing aging demographics really cut into labor and these nascent technologies affecting early career in real time. So yes and yes, it's both, and that's why you can't predict it. You're going to see companies be hesitant and slow down. They're hiring because of macro trends that have nothing to do with their customer base, and then they're going to be come back in the market and hire.

When they need to.

And so we won't know if a one month slow down is indicative of a really weakening labor market or just some hesitancy. So we have to look at a couple more months to get that trend right. The Ocean First Financial CEO is just on. He was saying with his commercial clients, they're not hiring as much because of AI. You were at Jackson Hole, the theme was labor and transition, Yet you said no one presented a paper on artificial intelligence.

Well, what's happening right in front of them right now.

But AI is harder because you have to have granular data. And that's why this paper that I mentioned from Stanford, looking at ADP's millions of job titles, you actually see the effect AI is happening. So for employers there are some big investments in AI. Some of that investment will augment career, so for later career, more tenured workers, AI is seen to boost productivity, and those investments are being

If you want to just tune again, welcome to the program.

Just moments ago some economic data on GDP and on jobless claims. Mi McKee standing by was a little bit more. Might you've had a second look, what'd you say.

Well, we can do. It's under the hood here.

And the basic reason we saw a rise in GDP in the first revision for the second quarter is personal consumption rose to one point six percent from one point four percent. In business investment significantly increased, non residential fixed investment up five point seven percent. It was one point

Of course, now it's all about quarter.

Three Mi mckaye.

Just before you go, it feels like in April the wisdom paralysis and the economy. A lot of people have back trying to work out what was happening with policy. Are you getting a read, a clean read on anything to do with just things bouncing back that maybe we will see that reacceleration as the year progresses and people re engage with the economy.

I think we're too.

Far away from the second quarter numbers to say that they have this revision has much bearing on what's going to happen. The good news was that businesses were spending in the second quarter, and that's been what everybody's watching.

Were they going to hold off or not?

Consumer spending continues at a slower pace than it had but they're still hanging in there.

So where do we go from here?

Everybody's been waiting to see what effect the tariffs would have, and this is about the time when we're going to start seeing that.

Mimi kay, I appreciate it, Mike, thank you. Sir As always might come the tank to that NATA is still with us. NATA, we wanted a word from you on the Federal serve. September in some ways feels like an easy co now they're going to cut rights. How would you set things out for people for September and beyond into twenty six of the Federal Serve.

I think it's really helpful to look at how the FED has moved historically, which is in small bites, moderated over a long time prime That may not be the way that they can act now because there's so many moving parts of this economy. Whether you think that tariffs are a one time price increase or have ripple effects, the fact is the lags between monetary policy and the lags between what's going on in the economy, they might

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