Bloomberg Surveillance TV: September 5th, 2025

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

Joining us.

Now, I'm very pleased to say, is the United States Secretary of Commas, Howard Lutner. Mister Secretary, Welcome to the programs. I know you wanted to talk about Japan, so let's do that. I want you to share with us the terms of this five hundred and fifty billion dollar investment fund, a collpitarive course of the negotiations that you've been helping to lead with the Japanese. Can you share with us the details this morning, sir.

Sure.

So this is a completely different kind of trade deal that anyone's ever seen before. So the idea is, the Japanese government will give five hundred and fifty billion dollars to Donald Trump to invest as the United States and Donald Trump sees fit in America. So the Japanese will get back their money and ninety percent of the profits will go to the American citizens, the American taxpayer. So Donald Trump, I'll give you an example. We buy all

So it sounds amazing. Do the Japanese think it's amazing? And have they codified this agreement?

They have so yesterday it was all signed. So the President signed the EO, I signed the MoU with Minister A Kazawa in the Commerce Department. This is signed, it is written. So what happens is Donald Trump can select the project that he wants. We put a capital call into the Japanese, they send in the money, and we

I mean, this is amazing.

In order to have a fifteen percent tariff and so they can keep making their cars in Japan.

Let's just down the details, mister secretary. So the timeline you talked about the rest of the president's term, is the reclear timeline here, and what's the enforcement mechanism to make sure it happens.

Well, two things.

Number One, they've committed that they will meet the Capitol call. So when we're building a project, they will fund the project's building during the term this investment lasts through, meaning they will put out the money through the rest of Donald Trump's term. So January twenty twenty nine, and let's say halfway through and they've invested two hundred and fifty billion dollars, they stop.

Saying, I don't want to send you any more money. The tariffs pack, you know, pop right back up.

And they no longer receive the cash flow from these projects. They would all just stay with the United States of America. So there is just no way they're going to not fund these projects. And Donald Trump is going to deliver to the American people.

And this deal is really it's.

If you think about it, five hundred and fifty billion dollars of Japanese government's money in order to buy down their tariff in Donald Trump's hands for his availability to invest and build in America. Alaska pipeline scale fifty billion, one hundred billion.

Donald Trump wants.

To unleash the Alaska pipelines. The Japanese will finance it, and it's great for America.

It's fantastic.

It's the Secretary to appreciate. We've got a number of topics to get through with you in a short amount of time, so I wanted to turn to one of the issues in India. This came from the present this morning on social media. It looks like we've lost India and Russia for that matter, to deepest darkest China. May they have a long and prosperous future together. This relationship between the US and India has clearly soured.

You.

Your South said earlier this year that India rubbed the US the wrong way. There's an understandable tension that continues to build. But they're not the only ones buying Russian energy. The Chinese are buying Russian energy, and for that matter, the Europeans too. And I think there's a sense from the Indian side, mister Secretary, that they feel singled out, perhaps unfairly. What's your comment, your message for them this morning?

Well, remember before the Russian conflict, the Indians bought less than two percent of their oil from Russia. Less than two percent and now they're buying forty percent.

Of their oil from Russia.

What they're doing is because the oil is sanctioned, it's really really cheap because the Russia trying to find people to buy it, and so the Indians have just decided, ah, the heck with it, let's buy cheap and make a ton of money.

But you know what, that is just plain wrong.

It's ridiculous, and they either need to decide which side they.

Want to be on. You know what's funny is I remember the Chinese.

Sell the Chinese, Well, we're always willing to talk. The Chinese sell to us, the Indians sell to us. They're not going to be able to sell to each other. We are the consumer of the world. People have to remember it's our thirty trillion dollar economy that is the consumer of the world. So eventually they all have to come back to the customer, because we all know eventually the customer is always right.

When you are talking with India, mister Secretary, I know a lot of companies in the US have shifted manufacturing to India from China's there's a real interest in this in terms of their costs. How much do you feel like you've lost leverage as a result of the court case that came out fairly recently.

We haven't lost any thing with respect to the court case.

If you look at the.

Descent right, it was seven to four. Read the descent cheat. The current Chief Justice sided with President Trump, the former Chief Justice sided with President Trump, and the incoming Chief Justice sided with President Trump. And the smartest guy on the bench, which is well known who the smartest guy.

On the bench is, he sided with Donald Trump.

So I think you are going to see the Supreme Court side with Donald Trump. And I don't think we've lost leverage. What we've lost is that India doesn't yet want to open their market. Stop buying Russian oil, right, and stop being a part of bricks right. They're the vowel between Russia and China. If that's who you want

It seems like there's been a hardening of the line, both with President Trump as well as Mody, and a sense that there isn't really a coming together. In fact, that meeting with Jujenpang and Vladimir Putin and FRIM Minister Mody seemed to indicate a coalescing of the bricks.

Do you see anywhere in.

The next month two months any type of deal or backing down to a lower rate with India.

I would expect.

You saw it in Canada, right the Carney got elected with this term elbows up, meaning let's fight with America. They put on retaliatory tariffs. They were all bravado, and what happened? Their GDP negative one point six percent, unemployment rocketing towards eight percent, and what did Carney just do? He just finally finally dropped his retaliatory tariffs. So I think what happens is it's all bravado because you think it feels good to fight with the biggest client in

That's why he's the president.

Speaking of making a deal. I understand the Swiss are in town, just tearing that the Swiss Vice president has turned up in the Nat of Stice again. Is there a meeting on the agenda to today going into the weekend.

Yes, so I'm going to meet with the Swiss delegation. They're coming in to make a new proposal, and the Trump administration is.

Always willing to listen.

But you have to remember, you know, the Swiss like to say they're a small country of only nine million people, a small rich country.

And how do they become so rich?

They sell us pharmacuit articles like it's going out of style, all right. They make so much money off of America. That's why they're rich. So let's hear what they have to say. We'll discuss it with the president. You know, I'm not optimistic, but I'm always willing to listen, and Donald Trump is always.

Why are you not optimistic? Traditionally there's been a decent relationship. Then the president's first term relied on the Swiss a lot when it came to foreign policy and developments in places like Iran. What's happened this time?

Well, if you.

Just consider trade, right, you know, the European Union, right, they open their market four hundred and fifty million people, twenty trillion dollar economy, and they say, well, take our tariffs down to zero. You the American exporters can sell us everything.

I mean, how fantastic is that?

And they say we'll pay you fifteen percent and you pay us nothing. I mean, that is really really attractive. Now you go to Switzerland, nine million people. I mean, they're going to offer the American exporter as compared to the size and scale by which they export and earn money off of us. So the idea is we need balanced in fair trade. And that's a difficult thing. Now

Now that's a different way of thinking.

Now, if the Swiss come out of the box with a whole new way of thinking, I'm open minded. But if they just say our rich companies are going to buy more of America. I mean, that's what Donald Trump is complaining about. You realized in nineteen eighty five, we America owned more of the rest of the world. We owned one hundred and just about one hundred and fifty billion of the rest of the world. And you know, in twenty twenty five, when Donald Trump takes office, the rest of the world owns.

Twenty six trillion more.

Of us because they just use all the money they make off of us to buy us, and sooner or later they're just going to own us. And Donald Trump has said enough of this, We are going to own ourselves going forward.

Mister Secretary, I know you're your own boss on your own time, but your team is telling us we've got to go shortly, so I'm gonna squeeze out a few more minutes if I can. At a thirty Eastern time. We're meant to get a job's number. This is what we heard from the BLS just moments ago that the Bureau of Labor Statistics says it's experiencing a technical problem and data retrieval tools are currently not available on the website. Sir, are we going to see a number in ten minutes time.

I don't know if we're gonna see the number, but I tell you it makes it crystal clear. You should have fired the person who was running that group right. Because it didn't fire them two weeks ago, you sure at heck would be firing them today. So they need new leadership in BLS, that's for sure.

They need new tech and BLS, that's for sure.

And Donald Trump needs to rely upon the numbers. America needs to rely upon the numbers. You can't have these bent former administration people who have a view and who want to harm the president. We need accurate numbers coming from BLS and finally we'll have new leadership.

To deliver it.

Mister secretary, you're also going to promise new resources for them to increase their collection and increase some of their staff to go out and make this data accurate.

Yeah.

Can you imagine they had people calling around. I mean, come on, computers, computers, Wow, it's twenty twenty five and a half. Computers, new resources, new technology, wildly better information. That's what America demands. That's what Donald Trump's going to give them. And you just need to change leadership every once in a while and make sure we get it right. I'm excited about what's coming. Of course, you fire the person, what do you learn? You learn that their technology is just voet.

But we'll fix it. We'll fix it.

Stay with us. More Bloomberg surveillance coming up after this. Payrolls report did drop on time four minutes ago twenty two thousand downside surprise seventy five was the estimate. You're looking at a three month average now for payrolls of just twenty nine thousand captured in the bond market, with lower yields in the FX market, with a week of dollar inequities, equities still positive on the session by a quarter of one percent on the S and P five hundred,

This idea that this could lead to a reignition of the cycle, and it goes back to the question that you asked yesterday. Is this a FED that will be cutting into something of a reacceleration or that will cut and spur that reacceleration. Right now, the market, based on the market activity, seems to think that raycut could be very helpful. In allowing the reignition of cycle.

We've got a fantastic lineup for the next twenty five minutes or so. We can kick it off with Stephanie Roth of Wolf Research. Stephanie Gimonic. No morning, you've had five minutes to go over this, so what's your first take?

First take is another week summer employment report. Immigration seems to be having another impact on the data. When you look at the household survey, the foreign worm population was again sort of the weaker part of it. Looking ahead, we expect that you'll have one more piece of negative news. So September ninth, once we get the annual preliminary benchmark revisions, that's going to be revised down to the tune of something like six hundred thousand. That's going to be another

A bit different.

The first thing you went to, though, was population growth. Do you think there's still a big supply side story that's under appreciated in these numbers.

Yes, I do. I think that's a large part of what's going on. Of course, it's hard to sort of decipher months a month, but if you look at the household survey, foreign born employment was down three hundred and forty two thousand, when native born was up four hundred and fifty one thousand. The label force participation rate for foreign born take down again, So it does look like you're seeing some continued weakness out.

Of the immigration.

That's helps explain why PARA growth was negative. In June, we had five hundred thousand people from the HNV program whose visas got expired overnight from May to June.

If that's the case, why aren't we seeing faster wage growth? Why are we seeing the underemployment rate going up? Why are we seeing the average number of hours worked in a week kind of stay stagnant or even go down. Right, These are the sides of weakness that people look at on the corners and say, wait a second, there is something here that speaks to the demand side as much as there is this also supply side story.

Yeah, I mean the wages were fine zo point three percent, which is an okay number, not a number that you would expect if the belid market is really falling apart. So what we're seeing is a combination of supplying demand. It's certainly not just a supply side story. The band is also softened, but when you look at for the months ahead, that demand should start to pick up as

Mam McKay standing by Mike, you've got some moll Yeah.

John, to the issue you're just talking about now, I'm not sure it holds a lot of water. Because the civilian labor force grew by four hundred and thirty six thousand during the month, which is the biggest since April, and April was when the month that we saw the market the labor data start to weaken. The participation rate actually ticked up, and at this point it doesn't look like immigration played a big role.

I have to mention here.

That the BLS cautions on its website and in its literature not to use the foreign board native born population statistics to just tell you what happened this month, because there are statistical reasons that they don't. It's complicated. I won't go into it on the air, but I'm not sure that gives us a whole lot of information. It's been a talking point used by administrations from both parties, but I'm not sure that that makes a lot of difference.

During the month.

I will point out that construction jobs were down by seven thousand, ADP had them up by sixteen thousand. And in that strange comment the President made last night about the payroll report, which suggested he already knew what the numbers were He said, it's all construction now, but it doesn't seem.

To be construction.

Mike McKay with Elysis might thank you, Stephanie. You were following that explanation. Please I want to give you some time to respond.

Yeah, so, I mean, I think it's fair.

The data are certainly volid a month a month, but if you look at the foreign born statistics out of the household survey, it's been fairly weak for the past couple of months. So it to the extent that, of course it's not a perfect picture, but we do know that there's significant crackdown from an immigration perspective that is likely having some impact. Although it's very difficult to get a clean read out of the data. You saw the foreign born employment fall threeinge of forty two thousand in

Of responses already this morning. This from nil Data of Renmak. The Hawks have lost on their own terms. Employment growth is still calling and the unemployment rate is rising.

You have right now one hundred percent chance of a rate cut baked in for later this month. So it seems like they are agreeing with his assessment and that on their own terms this would warrant a rate cut. Key question to me is what is the depth of

Let's turn to Jeff Rosenberg on that he joined us from Blackrock. Jeff, welcome to the program, Sir. What do we always say the first move isn't always the right move, and let's see if this sticks. But the first move is stocks higher. What's your take?

Yeah, the first move is stocks higher, and this is bad news. Is good news for the stock market, because the Fed's going to ride to the rescue and cut rates and the economy is not going to fall off a cliff. Financial conditions will help that. It's a little bit circular, but if the FED is going to underwrite the risk rally, then financial conditions will hold up confidence even if you're having a little bit of a slow down here on the demand side.

So look, that's the initial read.

You know, Russell two thousand, nasdak out performance is really quite notable. People piling into what has already been working.

Because the FED is going to be behind that.

And I think that, you know, on top of what Stephanie and you all were just talking about. Yeah, it's a weaker report, but it's a weaker report that solidifies twenty five. But it's really about and I think is where Lisa was about to go, you know, what's the path from here? Does this put October on the table? Does this put fifty on the table? But what it really puts on the table is a FED that gets

Combination for risk assets.

And that's why you're seeing, at least in this initial reaction, bad news is good news.

You said something really important there Jeff that this is an indication that the FED is going to underwrite risk assets at a time when there is enough weakness in labor markets to justify that. We'll give you confidence that the weakness that we're seeing is fixable or addressable by a couple of rate cuts this year by the Federal Reserve.

Well, I wouldn't overstate that and say that it is. But the confidence piece of that is really the primacy of financial conditions. And so you know, while we're worried about a lot of things, one of the things we're not worried about is financial conditions, and they are exceptionally easy. And this is what I've said on the program many times.

If we've seen the hawks throw in their hawkish tilt and become more dubbish on the fresher reserve and start cutting rates, does data like this, Jeff, make you think that maybe you have to price in steeper cuts over the remainder of next year, especially with the changing of the guard, that maybe this market is underappreciating the risk of more significant easing.

Yeah, it's a really good question.

I think it's one that will turn our attention increasingly towards which is okay to what end Waller, you know, gave a little hint in that in his interview earlier this week. One hundred to one hundred and fifty basis points that seems to be what most consensus use around Taylor rule implies. You know, so that amount is kind

But its powerless. How highlighted.

Excuse me?

You know this is also still a labor market that is, you know, not tremendously out of balance. These are small increases, yes they're increases in the unemployment rate, but the supply side and the demand side are both easing at the same time. And you see it in the strength in the wages, the persistent you know, one thing that didn't happen here is a big slowdown in the work week.

Something will keep an eye on and and so that will hold up. How deep does this path have to get.

It's quiet end of the curve, Jeff, Just to keep you up to speed on things if you haven't got the bloomberg in front of you. But down nine basis points at the front end of the curve now trading at three forty three forty nine, so into the three forties now, which is something we haven't seen all year. Tens are at about four point zero nine percent, so we've broken down through four point one thirty's are way off away from five percent of the moment. At about

Jeff, do you see things lining.

Up for a repeat of twenty four or is this different this time?

Well, it's certainly different this time.

And you know, the day's focus is on the labor markets and it's a premiere data point for the growth side of the equation. But next week other data will come out and we'll focus again on the other side, which is the inflationary side.

And so this is really the tension that you see.

Within the curve that if the FED is cutting and they're telling us, and Powell was pretty clear coming out of Jackson Hole, there's a primacy of within the dual mandate, the growth side, the maximum employment side of that mandate, but it's happening at a time, and this is where the hawks have you know, kind of been you know, squawking a little bit that, hey, you know, the inflation piece hasn't really been solved and the uncertainty of the

And you've got some technical positioning.

Everybody's on the same side of the boat, so that can have an unwind. But the fundamentals behind a steepening curve outlook cutting interest rates in the face of still sticky inflation on top of all the fiscal concerns, you know, do argue that the pass through from policy in the short end to the back end won't be as strong as we would historically expect. Absent, you know, the big shock of an economy that really discelerates and brings back

Stay with us, multpleinpex. Savanna's coming up off to this. Michael Nathansen of Muffett Nathansen has a by raising a two thirty price talk on Alphabet Chas and writes the following, this outcome is a home run for the status quo, and the status quo has been very favorable to Google. Michael joins us. Now for Michael, welks to the programs. Just your reflections on what happened early this week, and then we can get to whether the runsom competitors that can really break up this status quote.

Yeah, good morning, Jonathan. That was the best outcome, obviously possible. The market had been really fearful of what the courts could have done here, and it could have hurt Apple deeply and Alphabet deeply. And you look at this and say, to your point, the court was smart to say change is coming anyway, Why are we going to accelerate whatever's happening.

Let's see where technology moves us.

Right.

So, Michael, how do you think it's going to change? And why stay constructive on this name?

Okay, good question.

So what's going to happen is search as we know it has changed already, right, Search is moving from links to answers. Do you use open AI, Chat, Chipetia or even the new AI mode at Google. You're seeing a different type of search that is mostly happening in informational queries, not commercial queries. Right, So our view is it's going to take a long time for commercial queries. You'll find me the best hotel in Boston, find me, you know,

Does that make sense to you, Johnathan?

So our view is that the price of the traffic to people's websites will only go up because they'll be less graphic one of people's websites as more answers are headed off at people like an open ai or AI mode at Google.

So it's consolidating all of the attention on a smaller group of names. So it's a more valuable proposition. Do you think that Google needs to really now ramp up any type of open ai competitor, any kind of chatbot, artificial intelligence induced search result in the next two to three months. They have a time on them, a clock on them to sort of show their metal in their competition with open Ai.

So it's interesting. I would say to you if you had me on two years ago, a year ago, I'd be very nervous about their speed to market and their ability to change. They've been changing the past couple months pretty aggressively. They had an event called io back in May. They launched a bunch of new products. If you look, if you look at what's happening in real time at you know, AI mode on Google Search, you're seeing tremendous change, So I think the ramping is happening in the current timeframe.

They're not sleeping at you at the wheel.

They see the challenge from Catch and then taking it on pretty aggressively.

You mentioned Apple and that they also benefited from that, and I wonder a lot of people waking up to the fact that Apple's not dead as well in the past couple of days at least by virtue of their share price. Were you comforted by the fact that Tim Cook was at that meeting yesterday and it seemed like the president seemed a lot more amenable to him, calling out some of the investments and even giving him a nod with their India presence.

Yeah, so, Craig, my partner Carver's Apple. We had to sell on Apple heading into the court. You know the court findings. We're really worried that they would lose twenty billion plus of payments from Alphabet, which was pretty much all profit. John Hint's point that the status quo remaining, it is incredibly positive for Apple that they can work with Google, maybe they build a new seri product that's been rumored. They don't have to lose twenty billion plus

Michael, just before you go, do you pay much attention to seating plans and who gets to seat next to the president? Do you read anything between the lines?

Probably?

I probably do, right, John, I did not see the seating plans last night. I apologize too, bitch of Washing two bite Washington.

Mark Zuckerberg was the first person next to him.

I'll give you that cheat sheet, thank you so much.

Well, look how much marks we're spending right now out of nowhere and Capex right they've just massively ramped up their investment in the US on data centers right in Ohio and Louisiana. So he's spending spending is Dana White on his board? Now he's done more than anyone. I can think I can get back into the good races of this administration.

This is the Bloomberg surveillance podcast, bringing you the best in markets, economics, and geopolitics. 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.