Bloomberg Surveillance TV: March 6th, 2026

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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

In a well? Jonathan's good to be with you. Yes, I am. I mean this has been fifty years of counting American bodies the caused at the hands of the IRGC, the Kuds Force Iranian IEDs. This has been an on standing, long standing gray zone war between Iran and the West for all these years. And the President set out the goal of they will not obtain a nuclear weapon, and we have not been successful in four different presidential administrations

There is, as you know, Congressman, a domestic price to pay in more ways than one. Unfortunately, for this conversation we're going to focus on the market aspect. There are much more important issues that play as well, gas prices, a climate. What's your assessment of the disruptions to energy flows one and two. The kind of remedies that the US government can offer right now?

Well, I think some of the remedies are You've heard Treasure's secutary investment talk about supporting the insurance markets. Of course, the United States Navy is going to do their part to support a transit of the strait of our moves, which benefits everyone in the markets. But as you pointed out in your reporting, you've just got a risk at the margin of Iran striking a production facility or a transit ship, and so that has really chilled the oil transit market in the Gulf.

I think this is temporary.

I think it's going to be handled over the next few weeks. I don't think it's going to have a

So I think this I.

Don't believe will have a lasting effect on markets, but certainly has an important short term effect as we're seeing in oil markets and in the insurance markets.

Congressman, would you support measures like using and tapping the spr the strategic patroil and reserve to try to mitigate some of the price increases even in the short term that people are already feeling when they go fill up their cars.

Well, I think that's a decision the Treasury Secretary and the Cabinet needs to make. If they think that's in the right reason, then I certainly would chourage them to consider it. We experienced that with Joe Biden during the Russian invasion of Ukraine, and it was microscopic. The actual hit I mean the sense per barrel from a strategic patroyum reserve release or not that measurable. So if the whole production and distribution of oil were disrupted, then that

Congressman, there also are some strategic questions the Congress has to face, including how to prepare the United States better and frankly restock some of the munitions that are being depleted. There's a fifty billion dollars bill current in your hands, in your house, and I'm just wondering, would you support an additional funding measure to try to help stockpile some additional supplies. Should this be a prolonged conflict, and if there are any additional conflicts in the future.

Well, there was a significant work on that in the Big Beautiful Bill last summer. There was nine billion dollars allocated to the Pentagon to specifically work on the munitions supply chain. We've certainly seen that taken to action in Arkansas and Camden, Arkansas, where we've seen a significant increase in munitions in rocket engine production the cause of the

We think that's good bill.

It came out of Committee forty one to zero, so it's a strong bipartisan bill, and we're working with the administration on that, but both the Armed Services Committees and the Defense Production Act the Treasury are all working on

Congressman, you want the chair of the Highest Financial Services Committee. Of course, now would be a good time to hear from Chairman Powell. Are there any plans to have that semianual testimony anytime soon?

You bet. We have invited him. We're trying to find a date and coordinate that date with the Senate Banking Committee because we typically do those hearings back to back.

So I hope that that can happen soon.

Stay with us. Mult Bloomberg surveyan's coming up after this rising crude adding to inflation feares potentially for the Federal Reserve, Retail gasoline prices in the United States reaching their highest levels in eighteen months, the search and energy costs coming ahead of fresh routs on the economy with payroll states that you are eight thirty Eastern time joining us around the table. I'm pleased to say here in New York the Fed Governor Chris Wallach, Governor Wan look good to see us, sir.

It's good to see you all again.

When we planned this, I thought you'd come in and talk about the labor market, but something else has taken over. What's your assessment of developments in the Middle East and ultimately what it means for you and the committee.

Yeah, I mean, I guess that's exactly The thing is, what you're going to see is you're going to see a spike and gasoline prices after the American citizens are going to see when they go to the pump, and they're going to stare at it and be a little shocked in terms of how things go. But for us thinking about policy going forward, this is unlikely to cause sustained inflation. This one reason we don't look at energy prices where we look at core. Core is a better

It's not going to be a big factor down the road.

So this is why we never look at energy prices.

They bounce up, they come back down.

It's not that it's something that we don't feel sympathy for people that that's what they have to pay when they put the gas in their cars. But for us thinking about the longer term in terms of policy, this is something we're just gonna have to kind.

Of put off for now.

When does it become something bigger if it's so.

It becomes bigger, if it becomes more permanent, because then what's going to happen. You're going to see this jump in prices. Then it'll start bleeding through to other parts of the economy.

Energy is a big part.

It feeds into everything else, and then somehow those energy costs get passed along like everything else.

Well, that's what you're more worried about.

Economists on any given day, Lisa might myself and they'll talk about the experience of the seven so and coming out of the pandemic, and they'll say things like the officials of the fenders of a someone conditions good by some of that. It's not your experience of things.

Well, in the seventies, remember we didn't just have one. We had massive oil shocks. If you take seventy three, the price of oil quadrupled overnight. It went from four dollars a barrel was at twelve dollars a barrow or three, or went from three or whatever the numbers were. But that was a shock, and it never came back down, and then there was another one. Every time you turned around, there was another oil shock. Then I ran oil and bargo in seventy nine. So that was kind of the

So that's why I'm more willing to.

Say this is, I hate to say, but more like a one off event than what we saw in the nineteen seventies.

As roseenn Rosennadena used to say, it's always something because if it's not just it's not just the oil shocks, it's the whole idea. Now we're going to have a whole new round of tariffs coming through the economy, and we've got this low fire, low higher economy. How long do you think that continues? Does this just push out the time period for companies to sit on their hands not invest because they don't know what's going to happen.

Yeah, I mean, this is one of the things I've been concerned about since last June, is how week the labor market has been. There were a lot of factors last summer that we're driving this kind of low higher, low fire. It looked like maybe in January we might be turning a corner. We'll find out today whether that was,

It was zero negative.

So that kind of fragility wouldn't take much for some sort of a serious shock to sort of start pushing people in another direction. Whether this is that kind of shock or not, we'll start finding out.

Yeah, it's early, because of course these are going to be January numbers. But you've been on record as saying you'd like to cut more because you still worried about where the labor market is. What would it take to get you to back off on that feeling, because if we get the same sort of numbers we had in December, it still shows very narrow breadth of hiring, and it still shows some reasonably good numbers for hiring.

Yeah, the even with the January report, like I said, it was all concentrated in a couple of sectors, So.

That was good. They were robust.

We got a big number, well above everybody's estimate to break even, But the concentration didn't give me a lot of comfort that the economy as a whole was doing really well. So that's where my brain is telling me. The number was good and the economy looks okay. It was above break even, but my guts are telling me it may not be that good. And that's where I'm waiting to see what today's numbers. I'm almost certain it's

A pair of these two ideas, the idea of the oil that's creating some concerns about inflation and then a labor market that kind of is in question, right, is it decelerating or is it reaccelerating. How much has your reaction changed potentially to Friday's today's report, given the fact that we do see energy prices pushing on inflation. In other words, would you be less inclined to cut rates if there is strength that's demonstrated in the labor market today.

Yeah, that's kind of what I was hinting at last week, that if we get another solid job report then last month, this month looks like the labor market's turning around. A lot of the downside risk I've been worried about for six months is kind of going away. We got a hot We're going to get a hot PCE number given what we already have seen coming in, that's going to probably print from everything I've seen about a point four. Okay,

Let's say the counterfactual. Let's say we don't get a good print. Let's go we see the weakness that you see right now when you talk to people in your district and that you speak to in the different districts as well as beyond. How much do you think the FED should react to this because it's sort of the dual mandate is in conflict and absolutely the wrong way.

Yeah, I mean, that's the tension we've had for the last years. I've been more worried about the labor market risk the inflation risk. I've always believed inflation was going to come back down once tear if effects passed through. My other colleagues on the committee are much more concerned about the inflation.

It's been high for five years.

They're not seeing it coming down, and they think the labor market is.

All stabilized, it's all supply side.

So these are the two different views that people have about thinking about policy. And I was more willing to cut rates because I was more worried about the labor market, not as worried about inflation coming down. But like I said, if the labor market continues to go weak, if this thing comes in, I mean ADP was promising the other day. So if the labor market is good, inflation's hotter, and we think it's fine to kind of wait another meeting

I hate to be the ones who asked this question, but what's a good report? Because at eight thirty East in time, but we'll be asking that question ab outselves. What's good to you? What does good look like?

Well?

I think good would be if you saw another number like January, that would be really good because you're well above everybody's break even estimates at that point, and that'd be two in a row.

Looks like it's going through.

We got very good numbers off the ISM, manufacturing and services this week. That's another indication that maybe things are turning around. So if that's the case, I'm starting to see less downside risk now on the tariff stuff. I still have a view that all the tariff risk is to the downside. I just don't see big increases in tariffs spread all over the place.

If anything, they're going to come down.

Estimates of this are coming down, deals are going to potentially get made. So I don't see a lot of tear for risk going even though there's more uncertain there's always the uncertain I don't see a lot of price pressures from what we think could happen going forward. So that's going to bring I think that's going to bring inflation down or take pressure off, and it'll take something, the uncertainty off.

At some point, well, it becomes a question of what problem are you trying to solve and what tool are you using to do it. How would cutting rates by twenty five or fifty basis points help the labor market If companies are sitting on their hands because they're still waiting for tariff news and we've got a war going on.

Yeah, I mean we can always say, ah, we can't do anything, just sit there.

That's not my job.

My job is trying to help the economy and achieve our dual mandate. And if the labor market's not looking good, then I have to make this trade off.

But does it make a difference to the CEOs?

Well, maybe not.

I mean that's from saying we could argue about whether monetary policy has any effect in general on the labor market. There's you know, you go back in economics, back to the eighties and nineties, there's a whole camp of people that said Manitari policy is completely irrelevant for the economy.

So quit wasting your time.

You're opening up a very different conversation. Yeah, that's a whole bitt we can spend a long time on. I wanted to squeeze this in. I actually think it's one of the more important topics at the moment. We're not seeing a tightning of financial conditions a material one in public markets. I don't see that in stocks, I don't

On, Well, there's a couple things.

I mean, in general, I'm not I don't see big, really big, widespread problems in the private credit market. What you're seeing is a couple of cases of certainly frauds that fraud widespread, I don't. You know, it's hard to believe that the entire correct private credit market is being driven by fraud or bubble posting of collateral. So these are kind of these one off things that get a

So I don't think as a whole.

The private credit market is in any serious trouble. But you're going to have these things popping up here and there, But I don't think there's enough of it that's going to somehow drive down the financial markets and create any kind of financial stability problems.

Stay with us. Multiple impax Savanance coming up off to this. So here's the lisis this morning. The War in the Middle ag sending energy cast surging across the globe, the price of crude sitting at a multi year high, while European natural gas is set for its biggest weekly gain since the energy crisis of twenty twenty two. John guess Now is the European Energy Commissioner. Dani Jorkinson, Commissioner, Welcome

Well, first of all, it's important to say that it's not actually so much that it's disruption of supply that creates problems, because first of all, we don't get any oil or gas from our RNT directly, and we get some limited amounts of gas from the Gulf region overall. But that's not it's not nothing, but it's not the big problem. The big problem is the effects on the global markets, and of course those effects on the global markets also hits consumers in Europe, especially on oil and on LERG.

So, Commissioner, do you see a reason to try to step in and stave off some of the increases in price or do you think that this will well right size itself because ultimately the EU isn't as dependent on around and sort of some of the regional supplies.

So I saw earlier that you compared this crisis through the crisis in twenty two when Russia started as full scale invasion in Ukraine. And I understand why, because this is the worst crisis we've had since. But it's also important to say that we are we are not close to the level of crisis that we have in twenty two. The prices are higher, yes, but not close to as high as they were there, So that's number one. Number two. We are also much better situated to dealing with these

Commissioner, have you had any conversations with Chris right over in the United States about potentially increasing local fied natural gas exports to Europe in order to stave off any output from Cutter that is interrupted.

Yes, we have a continuous dialogue across the Atlantic, both with the American administration but also of course with the companies and with the sector. And we have to be thankful that the American companies have been able to supply us with len G that we've needed because we have decided to to ban the import of Russian gas.

We needed, of course to.

Ban this import because we didn't want to continue to indirectly help finance pootince war, and of course also pushing has weaponized energy against us, and we could not accept that. So we needed other sources, and here the American gas has been very welcome. And the projections, also because of the political talks that we've had and what we've done to facilitated the projections are that that will also increase in the future.

Commissioner on Russian crude. These Treasury Department, as you know, I'm sure you saw the news issued a temporary waiver to the Indian refiners to purchase Russian crud. What's your reaction to that given what you just said.

For us, it's very clear we do not wish to buy Russian energy. We have got a combination of sanctions and also are.

You disappointed that the Americans are allowing the Indians to buy that crude.

That's not up for me to comment on. I can definitely say what we want in the European Union is to hit Russia as hard as possible on their incomes from energy. Russia they're conducting a terrible brutal war in

And follow this example.

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