Bloomberg Surveillance TV: January 27th, 2026

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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 Terminal and the Bloomberg Business app. Henrietta trees of Vader

I think that's pretty clear.

And you have a whole bunch of Republicans, especially those that are in very at risk states, coming out clearly condemning the moves from Ice that resulted in the death of Alex Preedy over the weekend, and that kind of disruption and the fracture and the Republican Party is how you know that things need to change from the status quo that we have right now. I think, in addition, the personnel swaps that the White House is trying to

Just two weeks ago, you had an odds of a government shut down twenty five percent. Now they skyrocketed, So you think now, what is the percentage that we will shut down on Friday? And how long will the shutdown be? Because remember we just got over in the fall, the longest ever government shutdown.

I hear a lot of optimism behind the scenes from Democrats and Republicans that the path forward, as I just mentioned, is pretty simple.

You just strip out DHS funding.

And the problems for the White House is really optics. They have to sort of admit that there was a catastrophe in Minnesota and there needs to be remedies here and restrictions put on ice. The White House is tacitly acknowledging that already with the personnel moves. But my base case expectation is that they do find an off ramp here. Neither Republicans nor Democrats want this shutdown to happen, which is very different than the October first shutdown that we saw last year.

Well, the President so called Governor Waltz yesterday and the mayor of Minnesota. Does that bode well for the White House or for Democrats?

He's the one making that.

Outreach, you know, I think this is a case where the American public is demanding change, and both sides are prepared to give a little bit. Whether that's going to be sufficient to get you changed to peace of legislation on the floor remains to be seen. But every side is recognizing that the killings have to stop, and it's so overwhelming in public polling that it's just obvious you

You got to move forward from both sides.

So if we have this off RAM but the DHS funding stripped out, what do Democrats need to see to then sign up for DHS funding because majority leader Fund's going to need them to pass that through at the end of the day.

Yeah, absolutely, I think that Democrats are still pulling together a concrete list of what they want. There were some conference calls throughout the day yesterday. I think the most extreme is probably for DHS head Christy Noam to resign, and that's definitely going to be something that stays on

I'm glad you brought that up.

Do you think she is going to make it to that hearing because we have had Senator Tillis block all these DHS appointees until she decided to come on the Hill for hearing, and they've been dragging that out.

Yeah, they really have. And March third is a really long time away. Think about what's going to come in between them. The President has to deliver a State of the Union address. Immigration is going to have to be in the forefront. You know. Hopefully there's no other escalation, and ICE really stepped back from its very aggressive sort of patrolling of the streets right now. You have a lot to do before we get to March third. I think the question of whether she makes it that long

Well, speaking of they Senator from North Carolina, he's got a big role to play in the process to nominate and confirm the next FED chair, Henrietta. I thought this was going to happen months and months ago. What's happening?

You know, I've said this to clients quite a bit.

If you think in the grand scheme of things of what's going on in DC, from trying to annex Greenland to raising tariffs in South Korea to the killings in Minnesota, the FED parlor game is actually the least you know, insane or really scary or problematic part of the administration's focus right now.

They don't need.

A predecessor for j. Powell until May, so they can drag this out. It's already been, you know, a couple of months past due. Secretary Besson said, you know it was coming at Davos. I think they got time, and I don't think it's a high stakes thing. Obviously the Street is very closely watching it, but it's really just a parlor game between a couple of options that the

Stay with us, multplinbeg Savannah's coming up off to this.

I have Mary Bara here, the CEO and chair at General Motors, I'm pleased to say, and Mary really knocking the cover off the ball with these earnings that you see with your outlook, more than two billion dollars in extra profit and profit jump for twenty twenty six. Let me start by asking what you attribute this to. Is it just the great sales and the financing of the higher margin vehicles like a Sierra Can Escalade.

Well, first, I have to start by thanking the entire Generalmoters team, our suppliers, and our dealers for doing a phenomenal job. You know, twenty twenty five was an exceptional year, especially when you look at all the challenges that we face, and I think it really demonstrates one of the core capabilities of GM, and it's our agility and our resilience.

So couldn't be more proud of the team.

The ZR one x with twelve hundred and fifty horse power, it is indeed, I would call it a hypercar. Mary, That's not the bread and butter though for you. You really make these highly profitable, highly capable big trucks, and Americans are buying more of those and fewer.

Of the evs.

Do you expect to continue to sell fewer of the EV's. I know you took a seven billion dollar and change right down for that business in twenty twenty five.

Well, you know the whole industry. We were on a path that we were working to get to forty to fifty percent evs by twenty thirty. So now that the regulatory environment has changed and the consumer incentives have gone, there is going to be slower EV adoption. We're still committed evs and we've got a great portfolio that we're

I have had as the host of Hot Pursuit of Bloomberg podcast about cars, the opportunity to drive a lot of your evs, from the Sierra EV to the Hummer EV to the Escalade IQ, and they're fantastic products. Are you Are you not deterred that Americans aren't buying more of these vehicles? You know how capable, how capable they are, you know how we useful they are in daily life. What needs to happen for more Americans to buy these evs?

Well, I think that consumer is very rational when they're making a decision about what CARDI by.

Let's remember it's one.

Of the most important and expensive decisions that they make. And one of the things we have to continue to work on to drive EV adoption is a more robust charging infrastructure, and that still is continuing to happen. So every quarter, more and more chargers are available. I think we as people in their individual communities, see that they've got a robust charging network and believe if they have to go on a road trip there's that as well.

What about the hybrids, Mary, I mean, GM was really a front runner not only in EV technology, but in hybrid technology with the Chevy Volt. I remember when the Tahoe came out with a six lider gas engine and electric battery power. Will you start to sell more of the hybrid vehicles.

Well, we have always focused. As you said, we have great hybrid technology, we have great EV technology. We're one of the few OEMs that invested in a dedicated EV platform that allows us to have the portfolio we have. So we're focused on the endgame and we have affordable evs.

I wonder how much your racing efforts push towards that, And I know this is something I've talked about with your president Mark Royce on a number of occasions, but you're getting into so many more leagues. I watched the hypercars in Lament this summer and looking forward to watching you participate in Formula one. Do you think this really boosts your brand awareness around the world.

Absolutely, we definitely see that it does.

And I think when you look at Cadillac and the strength of Cadillac, it is true luxury, true American luxury. F one is the place that Cadillac should be showcased. So we're very proud to be a full works American team, anxious to enter this year in Australia, but I think it's going to be very important for the Cadillac brand, and we do have a really robust program that takes what we learn on the track and we incorporate into

I got to ask about the finance arm. GM Financial provided a massive liquidity buffer I think thirty six billion dollars there. How do you think about, because you're doing buybacks, returning a lot of cash to shareholders. I'm sure they're happy about the stock is near an all time high, but how do you think about putting that aside for protection versus supporting shareholder returns, you know, in case the autocycle turns at some point.

Well, we've indicated that eighteen to twenty billion is our cash target. Last year we finished the year strong at around twenty two billion, and we have a capital allocation framework of first reinvesting in the business, second making sure that we have an investment grade balance sheet, and then returning cash to shareholders. And we think, based on the strength of our business and the cash that we generate, we can continue to do that well.

And that's where our focus is.

You know, the financial arm has added I think more than two billion dollars to twenty twenty five profits, So it's really a contributor, kind of a quiet profit stable lot. Is that turning though, as delinquencies and charge offs rise a little bit? Is that starting to concern you as consumer balance sheets fin out.

Well?

It's something that we watch very closely that I think GMF does a great job in their business, and it is a very important business. Shout out to the gm

I look at loan originations in the fourth quarter and I see that they're down pretty substantially, about twenty one percent, and I wonder if that's a deliberate choice by GMF. Are you tightening your credit standards or is that reflecting a softer demand today? Rates and prices which are both fairly high.

Well, the car company and the finance company. They work together to make sure we have the right equation and what's going to optimize profitability for the enterprise. And so I don't think you can look at one quarter. It goes up and down depending on what's happening in the external world.

But GMF is a very.

Important part of our portfolio of companies, and again, as I said, it works in concert with the car company to make sure that we have a strong business overall.

I have to when I think of credit standards, I think of First Brands among some of the other businesses that have fallen to Chapter eleven this year. And I saw a report in the Financial Times overnight that you, along with Ford, your crosstown rivals, are negotiating to help send them a rescue line of sorts. Can you comment on that at all, Mary.

Well, what we're very much focused on is while we make sure we have secure supply is that transition period. So I think what you see General Motors and other ims working together to do is make sure that we don't have supply chain disruptions because of their financial situation.

We've been working on it.

But I think as we look at you know, the immediate, what's happening next week, next month. That's the work that we're doing, as well as in parallel making sure we have longer term supplies. So that's what you're seeing with that announcement.

When you talk about a supply chain, I think about the concessions you're able to get out of your suppliers. I know that you're trying to keep costs down. You're under a thread of tariffs or you already face tariffs, and a lot of the places you've produced, how much of those tariffs have you been able to pass through to consumers where you haven't been able to cut costs or get concessions from suppliers.

I think if you look at our portfolio, I think you know, for the most part, we've worked to offset it and with efficiencies across the board, making smart decisions on where we produce, and so very little has gone to the consumer because we are such a cost sensitive business and it's such a competitive business. But we continue to look at all those levers and we stay focused on consumer affordability.

You're operating Mary in the heart of America, and America's undergone some really tough times, especially over the last few weeks in Minnesota. What are you doing, What is General Motors doing to kind of keep the temperature down to kind of keep the calm at your company and with your suppliers.

Well, we want to make sure that everyone stays focused on the business and is part of the solution, meaning de escalating. I believe that's starting to happen. So that's what we continue to reinforce.

Stay with us. Mulblemberg. Savannah's coming up off to this a sensitive federal reserve. The Central Bank is set to make his first right decision of the YA tomorrow as threats to FED independence build. Joining us now is the former Kansas City FED president as the George as the welcome bank to the program. Before we get into substance, the Economic Bank drop the policy. I want to pick up on the more assertive stunts, the more aggressive posture, if you will. The Chairman Pouse seemed to be taken

Yeah.

Good, Marnie, Jonathan. I think the Chairman had to take this move. I think we have been dancing around these threats to independence and really trying not to make too much of it. But I think the Chairman reached a point where he really did have to speak out and send a message to the public about how important the decision making of the Central Bank is that it not

That's when it comes to the video he released in reaction to the subpoena from the DOJ. But he also recently went to the Supreme Court to attend the hearing of Lisa Cook, and the administration said that he was now politicizing that hearing. What's your reaction to that movement from J Powell?

Well, I think the Supreme Court's decision is absolutely consequential to the future of the Federal Reserve and thinking about how this body will weigh in on the ability of removing FED governors. So clearly, I think as a leader of this institution, his interest would be high and understanding how the courts might be talking about this and what the arguments are that are presented.

I didn't view that as a political.

One given these stances we have seen from him, do you think in the press conference he's going to be more willing to engage when reporters obviously ask a number of questions that are really on this line when it comes to politics.

Well, I'm quite sure he's going to get a number of questions, and I suspect he will address them at the same time, though, trying to keep the focus on what it is this committee is really focused on, and that is responding to economic conditions in the United States, and so yes, I think he will have to address what are likely to be a number of questions, and he may do so in the fashion he did in

As did you think that the economic backdrop at the moment gives them the space the hit post for a little while.

Yeah, I agree that it's time to take a breath on these rate cuts. They've made a number of cuts that are still feeding through the economy, and so I think it makes sense in the face of elevated inflation and what seems to be coming this year, that it would be a good time to pause and really take stock of how they assess the economy on both sides of their mandate.

What do you expect is coming this year on the inflation side.

Well, my own view, Jonathan is that inflation is something we've got to keep a careful eye on because I continue to hear this idea that the full impulse of the tariffs has not fed through yet. I think companies have been trying to do their best in managing pushing through those costs, but you could expect I think that the first half of the year we will see more

I understand you're concern about inflation potentially pushing higher, but hasn't the Fed basically acknowledged that they're no longer looking for two percent target given how many cuts we've had and it's been closer to three.

Well, they've certainly moved in the direction of putting more weight on the labor market part of their mandate and have emphasized that. And I think you know fair enough to look at that, because you have seen a dramatic change in the data from a labor market that was really tied a number of job openings and that's sort of reversed and pulled back. At the same time, though this is a FED that just released its framework saying two percent was the target, they have to keep their

When it comes to the potential tariff paths through, we have heard from Amazon they're saying that more of the tariff pass through is actually starting to creep into some of the prices. But do you think that consumers will bear the brunt of it, or really, will it still be corporate America that tries to bear the brunt of it this year as well?

Yeah, Marie, We'll have to see how this plays out. I mean, so far, I think businesses have been very careful not to overwhelm consumers with these price increases. But there is a limit to that, as you know, and I think consumers have been bearing the cost of this, and I think they will continue to.

We saw some.

Of that, I think come through in the Fed's Page book most recently to say that is still very much on the minds of businesses as they come into this new year.

I s's so strange to have a conversation right now, this really robust backdrop for economic growth at the same time we have these concerns about a weaker labor market. What do you think explains that disconnect of the last twelve months and do you see it reconciling in the next twelve.

Well, it's easy to start with the data, Jonathan and say, you know, the government shut down gave us a little scramble as it relates to that.

So it's going to.

Take a little while, both on inflation data and labor market data to work through that, But I think we also have to recognize that while demand has come off, and you can say demand came off from employers because of uncertainty, because of making more technological investments that would substitute for labor, you've also seen the supply side be hit directly too, and so those two things have left us with an unemployment rate that looks pretty low all

This is the Bloomberg Surveillance Podcast, bringing you the best in markets, economics, angiopolitics. 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 app.