Bloomberg Surveillance TV: March 19, 2025

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

I thought the call was epic, I thought, Jonathan, I thought it was epic, transformational all you know, those are the sorts of adjectives that I use about this call.

The president and.

President Trump and President Putin were in sync with one another. The call was outcome oriented.

They were talking.

About how to save lives, how to stop the carnage. And for me, I was proud to be an American sitting there listening to it.

Steve, let's talk about some of the outcomes. We're hopeful that ultimately we end up with a thirty day ceasefire. Before we get there, we're working towards things like a prisoner swap. We're working towards a maritime ceasefire in the Black Sea. That's important too. There was also a conversation, yes that about maybe in agreement to limit attacks on

Was agreed between the two presidents was, and it was at President Trump's suggestion, that there'd be a cessation of attacks on energy infrastructure from both sides, and civilian infrastructure for that matter, also working towards a black Sea moratorium on hits on naval vessels and freighters carrying grain and things of that sort, and ultimately that would evolve into a full on ceasefire, which is a bit more complicated because there's a two thousand kilometer border, there's Kursk, and

So, mister Rikkoff, is your understanding that of today, energy facilities, energy infrastructure will be off limits.

That's my understanding, yes, ma'am.

Do you think the next stage, potentially, as we get the roadmap towards thirty day full ceasefire, potentially geography should be off limits, like drones hitting Kiev.

You know, I can't speak to that. I think the idea behind the thirty day ceasefire. First of all, we made more progress yesterday than has been made in the last three and a half years. They actually, the tool leaders actually talked and committed to cessation of attacks on energy infrastructure and civilian infrastructure. They talked about reviving the Black Sea maritime agreement that had been negotiated several years ago and never really implemented. Those are monumental things and

It's complicated.

There are different battlefield conditions in various spots. That's for the technical teams to figure it out. And they're going to be meeting in Saudi Arabia, I believe, beginning Monday and Tuesday. So lots of progress happened yesterday, and it happened in large part because of President Trump.

Let's talk about that meeting in Saudi Arabia in the next week or so. The team's going to be led by, I believe Secretary Rubio. I think we all want to know what needs to happen at that meeting before the two leaders end up in the same room to get to that end deal. That we all want to see what needs to happen in the next week.

Well, I'm not sure that the Secretary of State has done an amazing job, as has the National Security Advisor Mike Waltz. They were both at the last meeting Jetta. It went well, lots of trust building happened, and I believe on Monday. We actually have the technical teams going in why because that's what we're down to. We don't need to have larging the larger overarching discussions that's been had and it was completed yesterday between the two leaders.

They agreed on a pathway to.

Some cease fire conditions today and to a full on cease fire that will be negotiated over the coming days. I actually think in a couple of weeks we're going to get to it. So lots of good things now it's for the technical teams to dot the i's and cross the t's, and everybody is committed to that process.

If you think we're going to get there in a couple of weeks, could we then see a meeting in person between President Trump and President Putin in the Kingdom?

You know, I can't speak for them, but my best bet would be that it's likely to happen. They have a great rapport together. They had a great rapport in the first Trump administration. It was on display yesterday. This was really a very positive, very proactive, outcome oriented call. And that's who President Trump is. He's there to get to the goal line, and we did. We went a long way yesterday to doing that.

Even now, the president a long long time, going back decades. In fact, there's very few people that know him better than you do. There's a lot of people speculating about what the motives are, what the end objectives are.

If we could just sit on that for a moment.

Does the push for peace in Ukraine run parallel with the push to normalize US Rush relations or Steve?

Are they separate issues?

No, I don't think there's any doubt that the two are important. For Russia is a critical relationship for US. It's critical as it affects all other things out there, China, Iran.

The Middle East.

These two leaders coming together and I think having conversations about nuclear proliferation, which they did yesterday and was anormously positive. These are this is enormously beneficial.

For the world at large. And the President believes in this.

He believes in peace, he believes in engaging, He believes in using peace through.

Strength to.

Create a better world for everybody. And with that could come a drop in defense budgets. Take all that money and spend it on things that matter more than waging war all the time. This is his policy, and so he's to be commended for that. Yesterday was literally transformational as far as I as far as I am.

Concerned, mister Rikoff, So then is the idea of its normalization to draw a wedge between Russia and China and Russia in Iran as well to further isolate America's adversaries like Tehran and Beijing.

The I think normalization is about having real conversation President Biden, according to President Putin, did not speak to President Putin for three and a half years. That's not a proper way to run policy. President Trump, in a short eight weeks has spoken to President Putin twice, very very positive and constructive conversations. He's directed me on his behalf to

The new term.

In the lengthy conversations you have had with the Russian lead. Did restrictions on Russian energy come up soil? Did they come up yesterday?

When you say restrictions, Jonathan, on Russian energy, what do you I'm not sure what you're asking.

Restrictions on financial services, engaging in deals that restrict the flow of Russian energy, the price camp that the Bible administration pushed over the last year or so, Sir, have a variety of restrictions that make it difficult for Russian energy to compete with energy.

I'll swear.

We did not discuss or the pardon me, the President did not discuss specifically sanctions yesterday.

If that's what you're referring to.

I think obviously that's a conversation that the two leaders are going to have and everybody is open to it. But first and foremost, we want a solution to that means an end to the fighting. We want to get to the ceasefire. That's the President's policy, and we're going to get to the ceasefire, and I think after that everything else will be a detail sanction relief and all the other things that go with a full on peace treaty.

Trump said last night to Fox News that Russia would like to use some of the US economic power. This is an individual who's been against the likes of Nordstream Nordstream two for years. Mister Werkoff, you know that. But can you see a world when Russian energy comes back online via pipelines like Nordstream?

Well, I can certainly see that world.

But let me give you, let me give you an example about the deleterious effects here and why we have to get to a solution. Russian oil today is being sold cheap to China. I'm not sure that's such a wonderful benefit of that India.

OK So you're underscoring my point.

So there are all these deleterious things that could come from this, and I think the beginning of it is a conversation. I think it's sort of unacceptable for two world leaders of the stature of a Russian president and an American president who haven't talked to three and a half years. That's an unacceptable policy program for the president.

Mister Ricofer.

It's a conversation.

We've had a lot on this programmers. The fact that sanctions when it comes to Russia didn't change Putin's motives and they still were able to fund the war by selling.

A lot of these a lot of this energy.

It just created new markets for Russia to be willing to trade. Scott Bessant, though, the Treasury Secretary said the other day that we will go to attend and bring sanctions if we have to on Russia to bring Putin to the table. Do you see President Trump getting to that point lifting sanctions to attend in order to cajole Putin to the table for the ceasefire.

Look, Scott bessen does a great Treasury Secretary. I'm not going to speak to what he had to say. I'm going to say this. I've had two meetings at the direction of President Trump with President Putin in the last several weeks that have collectively aggregated to almost eight hours. Many other people in the senior people in the administration are having meetings with their colleagues and their counterparts there. The President has directed all of this. There is amazing

We don't like to see that serve we could just finish. On Europe, something we've not discussed in the last ten minutes or so. The Europeans, Germany and the EU are pushing to rearm. They're set to spend hundreds of billions of euros on defense. That's something that President Trump has been pushing for for quite a while. Does he welcome that, does he complicate talks in any way? Does it antagonize Russia and make this harder? How does he view that at the moment?

Look, I think the President has a policy which is that Europe should pay more for their own defense, and so I think to the extent that that's what's happening. I think that's a good thing, rearming and all the other stuff that leads to more conflagration, that leads to that undermines a peace process.

I would say that that's not such a good thing.

So look, we're here to get a deal in Russia and Ukraine, and we're well on the way to getting it done. And I think you're going to hear some You're going to hear some really positive things happening as these talks continue.

Mister Werkoff, you're a successful businessman that is now really at the height of diplomacy around the world. European strong economic ties with Russia did not prevent Putin for his full scale invasion of Ukraine in twenty twenty one. Do you think it could prevent hostilities in the future if we were to see a ceasefire and businesses in trade were back to come into.

The fore I don't think there's any doubt. I think the point is to get everybody focused not on war, but on making their countries better, on spending the money on their people in Ukraine, on rebuilding, on doing on doing good things for their people. That's how you get to a better place. And that's President Trump's agenda throughout the world and we see it being very very His agenda is very effective.

People buy into it.

I was on the phone with President Macrone last night giving him a download of what happened, and we had a really positive conversation about the outcome. So I think there's a lot of buy in to President Trump's leadership, the way he's leading the world today, not just the United States. It's just exceptional for me to watch.

We've a few seconds left with you, sir, but I think that's an important comment to make relations with Europe. They are endorsing, Are they this approach that the President is taken, Because publicly they seem to be saying one thing. Are they endorsing this approach? Privately, I'm hearing a lot

Well, you know, I went into the real estate business. I was a young lawyer and I went in because I wanted to be Donald Trump to tell you the truth, and that really is the truth. By the way I've talked about this in the past, he was a great real estate guy, and to a large extent, I follow

Steve, You've been generous with your time this morning, sir, and we appreciate it. Hair Rum Blimbuck's vinements, We've going to do this again. Thank you very much for being with us. THEE House Special Envoy to Middle East, that Steve Whitcuff. Bnandi Geldberg of TD writes market sentiment moved from euphoria to dispasse so fast it's given investors whiplash. While the data has become concerning, the economy is still doing okay and show signs of moderating.

Kannadi joins us now for more.

It's good to see you, sir, Thanks for being If he says exactly that today, is that holekish?

I think so.

I mean you were looking at that tenure rate right around four thirty and saying, look how stuck it is. I think if he sounds dubbish, he would get raped to four percent. If he sounds hawkish, we can back up pretty significantly. The market's been pricing in a lot of you know, fed action, so to speak. If he comes out and says nothing, I think we go back up to four fifty four sixty.

In a hurry.

Hold on a second, on the short end, on of the long end, on the long end, Okay, Isn't that counterintuitive because some people are actually growing increasingly concerned about longer term inflation with the expectation that you've got debt issuance around the world, let alone deglobalization, et cetera. You're saying that if they sound somewhat hawkish or at least not ragingly dubvish, you could get a backup on the long end.

How does that make sense?

I think, Look, I think the market is so much worried about growth than inflation right now. I mean, we're all talking kind of stackflationary impulses here. I do think the Fed, if they face any sort of growth slowdown, will be pretty quick to act. But I think at this point they're going to pour a little bit of cold water on the market's expectation that they're going to

Watch what they do, not what they say. That's what people are saying right now. When you have a drinking game around uncertainty and data dependency, how.

Do you want to drink again?

Cheers?

There you go some hot water.

There is a question though, about how much they're going to give a signaling with quantitative tightening. And I keep going back to this because ultimately we've heard about that from Scott Best at the Treasury Secretary. We've heard that potentially they could start to pause the allowance of their balance to roll off their lack of reinvestment as a way to sort of ameliorate concertainty around the debt ceiling.

What do you take of that type of move If that does come, I.

Think they'll try to sell it. As you know, this.

Is completely technical, don't read into this. I think part of the issue is the markets are going to have trouble divorcing that from you know, interest rate policy.

The Fed has always said there's two different programs.

Our view is they can still wait a little bit. So our view is they don't have to actually cut QT here. They can wait until the next meeting or the meeting after. We actually think QT is going to run all the way until September before they end, with a little bit of a risk obviously to them ending earlier. I think that discussion has already gotten in the market.

They Treasury secondary sat and you'll see and set exactly the same thing. By the way, so he essentially alluded to that, let's get to the full cast median dup.

She has two cuts? Does it shives three? Two? I think let's a shot at the end to today.

I think the risk is that it goes to three. I mean, we've actually got it still showing two. I think that conversation around inflation versus growth is really what everyone's nervous about. And you know, I wouldn't be surprised to see some of the dots actually move higher, not lower. So I think the expectation is the dots all shift

The biggest risk I think for Marcus today, and we're all trying to gain this out. If you get a snack flashing me outcome and the revisions to the forecast and the Federal SEF that just looks tased and confused.

That helps nobody.

Well, it helps nobody who wants a FED put. But anyone who's looking for a FED put, well, good luck. I feel like the bond market maybe has moved away from the idea of a FED put a little bit. Stock markets still held out hope. It might be the one most susceptible to disappointment today.

Do you think he's worried about what's developing in market or it's just not big enough, not yet.

I think they're watching it closely. I think you know, ski scope certainly matters. I think the timeline matters as well. I mean, if you have a fifteen to twenty percent fall in risky assets over the course of a couple of weeks or a month, that's certainly concerning. If that happens over the couple of months or a quarter, that's something they keep an eye on. What we're really watching is the impact of this fallen equities on hir income consumers.

Not yet.

I think there's a lot of nervousness, but the data is not there yet.

That would be a night to change.

Cannot appreciate your time as a ways, cannot go back that of tday. We'll begin the saund with Stuck's steady as Trina's White, the FMC rank decision, Kaki Chantry, if black Croft wang in on the market volatility, writing this, there is no single smoking gun, but rather we look to a mosaic of data and sentiment indicators that have all contributed to the pullback in risk.

Gnkie joins us now for more Gnkey and morning, it's good to see you.

Morning.

Great Please You've said that because a lot of days we get this down draft inequities and a lot of people just say trade, trade, uncertainty, policy volatility, and then we see names that aren't really associated for that story down aggressively, maybe much more so than the gms of this world, which you think explains the fuller picture.

Yeah, absolutely, so a couple of things. First of all, thank you for having me. I would characterize it as four different things that have been driving the markets over the last.

Couple of weeks.

So the first is, as we were discussing earlier, there has been a significant expectation of slowdown of growth for Q one and the entirety of the year, and that's coming from which brings me to the second point. That's coming from consumption or expectations of consumers slowing down. For the longest time, that has been the lynchpin of the economy. If you're at going to see consumers slowing down, and

That's another thing.

I'll also say, of course this policy uncertainty that has been there all along, but now alongside the policy uncertainty and the questions about tariffs and immigration, there's now that very real slowing down that you're seeing. Finally, I'll say that we have to give a nod a little bit to some of the valuations that we already had coming into this year. We all admitted and we knew that valuations in the US market were a little stretched. So

We try to create a narrative for just momentum play. And I keep saying this because the tech trade has been the one that's got the most beaten up, and it comes at a time where suddenly people are questioning whether maybe their money will be better treated.

In other places.

You're seeing those flows rapidly shift. How much is that ultimately with underpitting this and it's sort of exemplified by the biggest losers.

I think that's a part of the story.

There's obviously, you know, two last week on Thursday, when we had those big moves and we entered into correction territory. A lot of finger pointing did happen towards what was the positioning, what were some of the hedge fund most

So I think it's a combination.

That was my point earlier that Jonathan, that you read out. It's a lot of things coming together while at the same time China and Europe are going the other way in terms of fiscal expansion. I think this is a great opportunity for investor to recognize, especially USM bust investors, to recognize the need for adding hedges and the need

So let me ask you on the non US So. Danny Berger earlier today shared a really interesting factoid that since the start of last year twenty twenty four, do we turn on the max seven is the same as it return on the decks? Yeah, going forward, what do you think that that relationship looks like?

I think a lot depends.

I mean, just yesterday, obviously we finally got the approval of some of the fiscal policies that are going to take place. I think a lot of that depends on what ultimately happens and at what pace.

If I had to bet for the next.

Ten years, I would still put my money in American Innovation and AI. Some of them is just large gap quality US companies. Over the next few months or even the next year. I think Germany, which is already, as you pointed out, had an amazing run. I think there's more to that story to go. But what is your

So recent investor survey showed the biggest ever outflow from US equities and showed the biggest ever outflow from the US to the rest of the world. Yeah, some people view this signaling the end of the really nasty technicals and that now we can look to at least neutral technicals. Do you buy that?

I mean, yes, I follow the survey. It's a good one to follow if you're a market participant. I also look at how many people fill out the survey. We do our own and we just had a client call with over two thousand people that answered similar pole questions, and what they talked about was actually looking to buy, looking for an opportunity to buy a pullback in US risks. So I don't know if that survey by itself is the end all and be all in terms of technicals.

There.

Used to be just one. There was no alternative. We all know that acronym. Now there are other options. Those options come in gold as diversifiers, in short data tips, it comes in the minimum volatility parts of the US market, and yes it comes in Europe and non US.

Prices during the edge right now, isn't it over the last few months.

I love that idea that essentially, if you want to talk about why Europe might make sense, now is your moment to go talk to people.

It's easy to talk about now. We had people coming on the program for so many years and the same thing and nothing happened.

Exactly, so now they can come out and say, look, there is hope there. I do wonder at what point we get a structural shift and just Obahama's point earlier about this idea, that are we looking at a long term shift in flows and potential and how.

Do you price it in?

And it seems like investors are not really suggesting that just yet.

Gucky, appreciate your time, so it's going to see you. Thanks for dropping by Gaki chandrib of Black Crock still a proper introduction. David Rumstein at the Carlile Group joined us now for more. David, good morning, good to see.

You, My pleasure to be here.

Thank you for having me.

You've caught up with some fantastic individuals over the last few weeks, including the former Treasury Secretary Steve Manuchin. But I think we want your thoughts, your individual view on where we are on this economy and where you think things a headache.

Obviously, the economy depends on certainty, and there's some lack of certainty right now. But what's going to happen on taxes and tariffs? So when there's greater certainty, I think we can better predict where the economy is going to go. Muhammad knows that so well. So in my view, there's

How much is a FED part of this discussion with people expecting them to step in and rescue the economy should grow slow enough versus prioritize inflation.

Well when the FED, I think the Fed's view is the FED doesn't surprise people. Under JPW, the FED pretty much tells you what it's going to do and then explains what it's done after he does it. And today there's been no signals out of the FED that is going to be a rate cut that I can see. So I think it's unlikely you're going to get a FED rate cut today, and therefore I think the market would be shocked if it were. We'd be very happy if it did, but I don't think it will happen today.

David Wall are we on two characterizations about private equity. One is a ton of money on the sideline waiting to come in and two distributions back. All feel very very slow. Well.

For the last couple of years, there haven't been as many exit opportunities as people wanted. As a result, a lot of the private equity firms are ready to sell things. They were hoping at the beginning of this year as the new administration came in that there'll be looser regulatory controls, IPOs better and so forth. That hasn't yet happened. It may happen, hasn't yet happened. There is a lot of money on the sidelines, for sure, and I do think that some of the deals that have been talked about

My guess would be So you mentioned the importance of trying to resolve the uncertainty, and that's the upside. What's the downside? What's the thing that keeps you up at night?

Well, clearly markets want to know what the rules of the game are. Most business people can adapt. Just tell us what the rules are, and we'll move one way or the other. Right now, there's some uncertainty is whether President Trump can get through the tax cuts he wants at the level he wants. Can they get through the Senate? Will those people get all the spending cuts they want? Nobody really knows. Will the judges stop some of that?

David, you have a relationship with the president, You've spoken to him. Do you believe there's something like the Trump put still in play?

Well?

I think President Trump came into office with big expectations from the market that he would do a lot of things that President Biden didn't do. So far, President Trump has tried to do a lot of these things. They haven't yet come to reality, but they may. I just don't know yet. I think he's fairly bullish about his ability to get these things through Congress, but obviously he's frustrated from time to time about what the judges are doing.

Last question comes from a blimpeg subscribe. But does mister Rubinstein think the Orioles will win the American League East? It seems to be the only thing people care about right now. What's your wants to that?

We certainly deserve because we have a great owner and.

We agree with that high.

Yes, if the ownership is the most important criteria, we should and we have a good team, and amazingly they can project how many games we're gonna win in advance of the season, and they're pretty accurate. But I won't say how many they project.

I think Mike is part of the ownership group too, so I've got to agree with that as well. So it's always going to catch up with you. Appreciate your time. Thank you, Thank you very much David Rubinstein there at the Carlisle Group. Thank you, and do not miss David's conversation with former Treasury Secretary Steve Manuchin tonight on peer to peer Conversations Right here on Bloomberg. This is the Bloomberg Surveillance Podcast, bringing you the best in markets, economics,