Bloomberg Surveillance TV: January 5th, 2026

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

Well, I think the economy is demonstrated its resilience or with the past few years, I mean all the shocks that have hit it, starting with the pandemic and then the tariffs most recently and yet real GDP is at an all time record high, and so I'm just extrapolating that that continues, that the economy will continue to grow through the end of the decade, and that by the end of the decade we could very well see the market anticipating something like five one hundred dollars a share

Certain things happened last year that people thought would be relevant and turned out to be irrelevant. I'm thinking of the tariffs of April of last year, irrelevant to the headline a's acre of five hundred index at least, and then later on and through the year, the fact that unemployment carried on climbing and it didn't seem to disrupt this secuity market. It's not going to be the story for twenty six as well. Yeah.

Absolutely, And I think twenty twenty five demonstrated that the economy could grow even when we have a labor market that's not growing much at all, and that can only happen if productivity is booming. Productivity growth during the first half of the decade kind of recovered. It was really quite depressed at the beginning of the decade, it's recovered to kind of this annual average of about two percent.

As you know better than most, what often happens coming into the new year. People look for the other thing, not the thing that's been working for years, but they look for the other things that they sa time to move away from.

If you get to the other thing.

Well I'm in that camp. I'm in the notion that it's time to rebalance them. I mean, when you've got information technology and communication services accounting for forty five percent of the market cap of the S and P five hundred, maybe it's time to rebalance a bit. And I've been recommending also overweighting financials and industrials, and I would continue to overweight them and put some money also on an overweight basis into healthcare. I think every company is basically

Last year, there was a big overhang on questions of how tariffs would impact companies in thus their share price. What do you think is going to be the big policy question mark of this year?

Well, I think everybody's focusing on the fiscal stimulus that's kind of locked into the system with the One Big Beautiful Bill Act that was passed last July, but it was retroactive to the beginning of last year, and so according to Secretary of Treasury Avestent, a lot of a lot of households are going to get an extra one thousand to two thousand dollars in refine, more than would otherwise have been the case, and that could be very stimulative.

Well, given they're locked in, do you think consumers are ready preemptively spent those checks they're about to get.

I don't think so. I think they're going to be pleasantly surprised by the refunds. I mean, you know, claiming your refunds is not something that's easily to predict, So I do think that there's going to be a stimulus from it.

Why do you think this will leave the Federal Reserve and policy for the year ahead.

Well, you know, we've got a lot of known unknowns. We'll see who the next FED chair is, but we also know that whoever is the FED, it's only really one vote on the FMC, so defense are going to remain data dependent. And I think that with the economy likely to be quite strong, at least in the first half of the year, I think the Fed's done at least for the next six months.

One man, one vote is not how we've been thinking about the Federal reserve of a previous leaderships and previous administrations. Why is it changing.

Well, the previous FED chairs were consensus builders. That's what they spent a lot of time doing, and there was very successful at it. Particularly FED Chair Powell was a great consensus builder builder. But I think the next FED chair is going to be much more aligned with the President, with the White House, and I think there could be a lot I think there could be a lot more independence among the FED committee.

Is that the unintended consequence of this push five for us?

Yeah, I mean everybody's been talking about the FED is going to be less independent. I think they'll be more independent. I think you'll see more dissension.

You mean they're going to be more independent because it's so obvious. Potentially the FED chair is so tethered to the president, everyone else will feel like they can be honest and speak out.

Yeah.

Well, if you've got a FED chair that's Trump dependent, everybody else's data dependent. I think you're going to have a difference of opinion and it's going to be pretty visible, as it has been in the last minutes.

When you say that they only have one vote. Do you think this administration might take a different approach when I think about the FED and potentially elevate a governor Waller so they get an extra seat because it is a deliberative body.

Well, I think Waller would make the most sense because he's got the experience, he knows all the players, and he could be more of a consensus builders than somebody that's just kind of you figure out the FED. But yeah, I think whoever is the next FED chair, they're going to realize they have a consensus problem and they have to deal with it. And so I think at the end of the day, the FED it isn't going to

Stay with us more Bloomberg surveillance coming up after this. Former City and US Intelligence official Norman Rule rights in the following. In addition to ensuring US influence out of Venezuela's all reserves, the administration will seek to reduce China's political influence over a region normal. Jounderstaw for more normally and welcome. We talked about how impressively clean this operation

Ordinary display of the skill of US military and untelgence officials working together for many months and then putting an amazing array of US military intelligence operatives together on the ground. But it also showed the extraordinary nature of US technology. The Venezuelans talked about having air defenses that could spot stealth fighters, and the United States managed to put not only dozens of aircraft but helicopters throughout Venezuela's skies, and

Iran was the big focus in June. Obviously, Venezuela is the big focus now norm what country could be next where the US has a more aggressive foreign policy.

I think it's important to take a real hard look at the December National Security Strategy, because the National Security Strategy makes clear that the United States will be inclined to be non interventionist, but use robust military and economic force, most likely in the Western hemisphere, and then otherwise use economic and military tools only when needed outside of that environment for limited purposes, not state building, not to put

This is not an.

Administration looking to involve the US in a conventional conflict.

When it comes to Venezuela and now, the acting President of Rodriguez, given the fact that she was the number two her brother runs the National Assembly, she was by the Panamanian leader said this in thedorism without Maduro. Is this regime containment instead of change.

Well, I think you've got a couple of different issues here. So the US posture again is being clarified as interest driven state craft. We're interested in stopping drugs, migration, adversary, exclusion from oil, democracy restoration is being positioned as.

A downstream objective.

Now, let's put this in the contact as the Venezuelans, they've just seen an extraordinary display of US power. They cannot compete with us. They have no allies of any consequence.

Norman, we're tracking live pitches of the form of Venezweman leader heading to a court here in New York City, which is stunning in and of itself. In an ideal world norm this is what people would like to see. They would have liked to send this guy step down a long time ago. And then the nobel prize is when it walks into Caracas the following day to streets celebrating her arrival and she takes over in democracy rates.

No, and that's not the real world.

Could you share with us the cold hard reality of the real world and how difficult it will be between age the resistance that hasn't yet shown itself yet in Venezuela, but could manifest materialize in a months to count.

Well. To be clear, I'm not of Venezuelan in domestic political expert, but for the Venezuelan opposition to take charge, they're going to have to overcome the architecture of the military, the security forces, the Cuban security forces who are ingrained within the architecture of the Venezuelan government, the entire political system of Venezuela, which will be among the first to

But in any case, this is a situation in motion.

Stay with US mult Bloomberg surveillance coming up after this. Let's stick with the energy market. The US of course ready to use the commodity for leverage in Venezuela.

There's a quarantine right now in which sanctioned oil shipments. There's a boat and that boat is under US sanctions. We go get a quarter or or we will seize it. That remains in place, and that's a tremendous amount of leverage that will continue to be in place until we see changes not just further the national interests of the United States, which is number one, but also that lead to a better future for the people of Venezuela.

Bob mcdaney, the founder and president of Rapidant Energy Group, joined US now for more Bob, as you and I start this conversation with tracking live pictures of the former Venaswevan leader making this way to court here in New York. This is an individual whoever saw the biggest energy reserves on the planet, and this was a sector an industry

Hi, Jonathan, Sure, it's a matter of many years to decades and tens of billions of dollars. The good news is, especially US companies, they know how to do it. They have the engineering, logistical, technical expertise. But it's going to take boatloads of money and we won't be seeing real oil until after the end of the second Trump term.

We just need to be realistic about that.

But Bob, is the will there given the fact that these are companies that had to flee Venezuela in two thousand and seven.

Absolutely, you know they're tantalized, but they are cautiously tantalized. I was in the White House twenty three years ago after we were chased out by Hugo Chavez. No fun at all, and they will be very cautious in going back in. But it also gets to this transition will what kind of government are we going to have there, what kind of contract terms, what kind of physical security there are There's a wide and deep set of big questions that these oil companies and their boards are going

It's an arc. It's got this right.

It's a nothing burger for short term crude futures. It's another tailwind for US oil companies majors coming after this sort of walk back from this peak demand narrative. You think about it, US oil majors have just had a great extended holiday season. Peak demand is fading in twenty thirty. That's good for them, and now the world's largest oil reserves may be available to them when it really counts after twenty thirty.

Well, you also got it right. I actually thought of you in the morning after this all took place, because before the Christmas holidays you said there was a seventy percent chance that Madua would be out. Did you think it was going to happen this quickly?

Yeah, yes, we did.

I think the market has gotten you mentioned June in the Iran war.

The market doesn't understand Trump.

It was surprised when he attacked Iran, It was surprised when he puts sanctions on Rosneft and Luke Oil in October, and it was surprised when he attacked when he removed Maduro. I think what the market doesn't understand is the President's willingness to take risk when it comes to confronting adversaries on top tier foreign policy challenges, even if energy is at stake. And the reason why Emmerie and you just mentioned it. The President the White House believes, and I

So what are you telling clients is the next potential risk taking this administration is going to go for?

Iran and Russia are up next. Look at the presidents talking about Israel is not kidding about preventing Iran from reconstituting its its missile and nuclear programs, and with the unrest for seeing there maybe stirring the pot. So the President's been talking very forcefully. Look what he said with Prime Minister net Yahoo willingness to intervene if the regime

With Russia, Putin's not going to agree to armistice.

And while President Trump often has a friendly demeanor towards Putin, says nice things, he also tightened sanctions and I think he's willing to do so even more into next year. So let's look to Iran and Russia for real potential supply disruptions, not Venezuela.

When you say that up next, well, can you just give a staytown on what you mean by that? Because up next, after what we saw I have had, awakens a very different scenario for Iran and for Russia. What do you mean by their up next?

Well, I think if Iran doesn't agree to halt its missile capabilities, its reconstitution, it's nuclear capabilities, and as if we even see this continued unrest. I think there will be, and we told clients seventy percent probability of another wave of at least Israelia strikes on Iran, perhaps supported or joined by the United States. We're at a solid seventy percent on that also sanctions, tighter sanctions we've let Iran off.

So really cutting.

Into their oil exports at least and military action at best seventy percent probability in the coming let's say months. Putin Russia same thing so far. They just wanted to widen the Eural's discount to Brent. They just wanted to, you know, hurt Putin's revenue, not cut into production. If oil prices keep falling, it's a big condition. If oil prices keep softening, I think he'll be willing to be tougher on in India, China and other customers of Russians Russia's crude.

How consistent is that with the national security strategy that they put out at the end of last year.

You know, it is consistent, But the subtle you got to read into it.

Trump didn't say, Look, we're going back to the Western hemisphere, and we're all about not only the Monroe doctrine, but the Trump correlated which means we won't even let our adversaries have economic stakes in our region. That's what the focus was. But he didn't say we're completely pulling up stakes in Europe, the Middle East and Asia.

Didn't say that not acting that way.

We don't think China has a free hand in Taiwan, we don't think Putin has a free hand in Putin in Ukraine, and in the Middle East, we're going nowhere.

So we're kind of having it both ways. I think we're.

Having our internationalism, our global alliances and the Eurasian land mass on the one hand, but telling the world, yeah, we're really going to be busy in the Western Hemisphere.

I'm ready. That was certainly part of the conversation over the weekend. Does this speed to the idea that maybe they're going to refocus everything on the so called Western hemisphere, ultimately Latin American, and take their off the ball in places the Middle East and Europe.

Well, one thing is for sure is that they definitely are monitoring the price of oil and to Bob's point, does that give them a lot more leverage around the world? Only there Arepasca actually came out with a telegram over the weekend and was talking about how if the US is able to hold prices near fifty dollars a barrel, that puts serious pressure on Russia's state capitalist economic model.

Well, just before you go, I wanted to combat some time and talk about a much longer term issue, the life Spanish shale. How are you considering the life Spanish shale with the developments that we saw took place over the weekend.

Well, we think shale is going to be around forever, and there are other deposits around the world. Look at what Argentina is doing, so other shale deposits open up. We could see new, strongly emerging shale plays. In the US, we think it's a mature sector. We don't see a lot of net growth, but you know what, look at AI, look at technology gains. Real big mistake to bet against,

So shale is sort of in a plateau for the time being.

But if we get a surprise, it's not going to be the death of shale.

It's going to be that Wow, we can recover a lot more. We even got more efficient.

Stay with us mult Bloomberg surveillance coming up after this.

Well, here's the late system.

The choice remarket so far this morning yields falling for the first time at a week on escalating to your political tensions, adding to the games we saw through last year, a forty basis point move lower on a ten year maturity through the year, this morning we down to four sixteen seventy one. To discuss joining us now is Jimpnco of Pienco Research. Jim, Welcome to the show. So the move of the front end phenomenal, of course, in line with the rate reductions at the federal reserve, but it

Well, I think we need to first put that in a little bit of perspective.

In twenty twenty five, all the ten year yields around the developed world were either unchanged or higher. The only one that was lower was the US. All the thirty year yields not every country has a thirty year were unchanged to higher, including the US. So there was only one long term yield around the world that went down last year, and that was the US ten year yield.

But their yields went up.

I think the difference might be political, and that is the President has tied his success to lower tenyure yields and has been demanding that the Federal Reserve cut interest rates, and that had had an effect in twenty twenty five.

Whether it does in twenty twenty six is a different question.

Jim, you're sug Jansen.

There was almost an implicit treasury per coming from the administration that's making people reluctant to sound that specific maturity.

Yeah, I am, because that specific maturity was the only one that was down. Now, if we had a bunch of them down on yield, like the US was down forty basis points in the tenure, then I would argue to you that, you know, it wasn't but there was something specific about that maturity, and I don't think that that can last forever.

It did last for twenty twenty five.

So really it's going to come down to what is the economics of twenty twenty six. Now, if it looks like twenty five, we had strong growth, we had a four point three percent GDP in the third quarter, the last number we had we had inflation, it is still in the up or twos. We're almost six years past the beginning of COVID and we're still in nowhere near two percent that those types of numbers will produce higher tenure yields throughout twenty twenty six.

Jamis, you consider the rest of the world, not just the US bond market, but the global bond market. Is the center of gravity for US bonds in the US or the dynamics that you're speaking to. Actually, I swear the in places like Japan.

Oh, I think you're right that where it's not if I could talk about the default is it's not in China anymore. China's now fallen to the third largest country that owns treasuries behind the UK, and so it has definitely moved to somewhat in Japan, and that is probably in that negative with their rates going up, the incentive to sell US fixed income securities and move.

Back to China to Japan, excuse me, grows every day.

So yes, then by default it comes back to the US and it comes back to FED policy, and that comes back to how the growth is and our mind everybody that if you look at the last FED meeting, it was a nine to three vote, But if you look at the way that everybody was talking, it might have been ten to nine among the nineteen members of the Fed whether or not they should have cut rates

Do you think twenty twenty six will be risks or opportunities to marketants participants? Especially given the stunning developments just over the weekend when it comes to foreign policy of this administration.

Well, there's always going to be risks, But I guess the real question is where do the risks come. Do they come in denting growth or slowing down growth, or do they come in potentially pushing up inflation? And I would you know, I am one that has been and continues to be concerned about inflation. What happened in Venezuela is a good long term story for crude oil, but it might not even be a twenty twenty sixth story for crudelf anything.

It might be somewhat bullish for crude oil over the very short.

Term as they cut off shipment to China that has to replace it by buying it from other places and pushing it up just over the very short term, but longer term it could be. But I think that most of the risks that I see are going to lead to them to inflation staying in the high twos to the low threes, and the market starting to realize that a three and a half percent funds rate and a four point two percent or so ten yure yield might be too low when it.

Comes to inflation. What makes you the most nervous because many people were talking about tariffs last year, but we haven't seen a real impact.

On that.

Yet.

And the reason I say yet is that while you look at the announced rates that the Trump administration is said about tariffs, it averages about seventeen to eighteen percent is what the tariff rate was a year ago.

It was two, so we went from two to seventeen.

But if you look at the actual tariffs collected, it's more around ten percent. And I think that accounts for a lot of why you're not seeing the inflation in tariffs,

Jim, let's finish on the unintended consequences of the president's push for Laurynteriest rights. We spoke to ed Jhon Danny earlier on this morning, and he echoed your argument that I want to give you some credit for as well, the fact that this has galvanized every voter on the committee, and it's a change from what we've seen on the

For the last forty years, everybody votes with what the chairman wants. They talk internally, and then they come to an agreement before the meeting, and that's where you get these twelve zero, eleven to one votes. But now it looks like the Fed is shifting to be more like the Bank of England or to make Japan, and that is is that each voter is going to vote in or think the Supreme Court.

We saw nine three there was a good argument that you could have had a seven to five vote.

I've advocated that that would actually be a positive for the FED, not a negative. Each Each governor, each president is supposed to represent the American people and vote the way that they think is the best for monetary policy, and there should be disagreement in that. And if they start to move that way, the biggest thing that could happen is President Trump could put somebody in place. That person could advocate for what President Trump wants one percent funds, but.

Does he have seven votes to get it.

And he might not have seven votes to get it in twenty twenty six if the economy stays strong and inflation stays sticky, and that could be a big departure from what we've seen from the FED in recent decades.

Jim, It's not one of the main pillars for your call for this year that ultimately we don't get much action from the Federal Reserve.

Yeah, I think so.

I think there's a lot of people that are thinking two or three cuts because we're going to get an uber Davish FED chairman because Trump is going to replace j Poll by May. But again, it really comes down to yes in the old way, the chairman would tell everybody how to vote, and they would do Chris disagree internally, but they would do what he would want. But in the new way, they might just say, no, you just don't have the votes for it. We're going to vote otherwise on this policy.

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