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Joining us down in studio Lindza pegx. She was stiffel, she was My comments of the year. Just brave, Brave, Brave Interviews twelve and eighteen months ago. Let's get brave here on PPI coming up in a moment. What's the character of our inflation? Is it an immovable feast up or down? Or is just a leadenness a resiliency to where we are in price change?
I think right now inflation is experiencing some sort of a floor support. But around that floor we are going to continue to see movement. Any movement to the down side simply solidifies the Fed's growing concerns about the employment side of the equation, and really any upside risk, at least from a minimal standpoint, is going to maybe keep the FED still focused on acazing, but limit the amount of using For two of.
Our listeners across the nation right now on YouTube on radio are saying she's nuts. They're looking at their day to day living and it screams inflation. Are we going to see that in four minutes? Are we going to see that tomorrow?
As CPI, we've been seeing that for years, inflation is well above that two percent target. We're nowhere near getting back to that, and yet the Fed seemingly is abandoning their concern about inflation now shifting very furiously their focus on the employment data. I think if the Fed had stayed true to their mandate early on, we would be in a much better position from a broader economic standpoint. They stopped short of where they needed to raise rates
back in the day. They've been slow playing it, and now we're still contending with this easing that we saw at the end of last year, exacerbating this underlying embeddedness of inflation in the economy.
So what do you attribute that an inability to balance both at once over focusing on the inflation side of the mandate, and what does that tell us about the path forward here? You mentioned kind of the risks going forward when it comes to the labor market. What confidence should we have in the Fed's capacity to again balance both of these things going forward, as the labor market becomes something that it seems understandably is going to attract much more of their attention.
Well, it's a.
Delicate balance, So I don't want to say this is an easy job by any means. I think they're doing the best that they can. But I do think that the fed's focus should be and should have been, more
fervently on inflation. And now at this point that window of opportunity is closing because the economy is losing some momentum, the labor market is losing some momentum, and the focus now is shifting, and that's going to I think retard or in some cases maybe even completely outright remove the fedsibility.
Can we can we go NERD report?
Yeah?
On a Slavsky Hicksian income substitution effect. I'm screaming that what we're seeing is a massive income effect of all of American economics right now, which will be a decline in our purchasing power. Do we see that now?
Absolutely?
Remember the consumption data that we're seeing, while still somewhat positive, somewhat stable, is not cost adjusted. So when we talk about a four percent retail sales number, we're not adjusting for buying twelve apples for one dollar or one apple for twelve dollars. Consumers are still out in the marketplace. They're still spending. There's still the backbone to the US economy, but we're getting there less for our money. Absolutely, we're taking home Lis just.
Brilliant doctor pigs with us.
You were at n y U, Right at Northwestern Northwestern?
Excuse me started with an N. I could remember which a Northwestern football New York University ball? Right, Okay, I got a disinflationary report this morning. If I get the same view tomorrow with CPI, doesn't it scream fifty beeps and check a lot of boxes.
I don't think it screams fifty basis points. I think it screams the Fed can cut policy by twenty five basis points. But remember, we're still talking about an elevated inflationary environment. One report getting US closer to two percent does not remove the thread of inflation, and I would argue that the risk of inflation still remains to the upside if we look out to the end of the
year and the growth profiles higher than expecting. Right, consumers pick up spending in that key holiday spending season, businesses start passing along terarf related costs more than they have over the past couple of months. We're going to see inflation pick up and that's going to remove the Fed's ability to cut race Northwestern.
You've got the magic of Robert Gordon in others. I mean, there's a huge historical bent there. Have we seen this before or is this original charactory?
I think this is a new type of market. We've never seen this environment post COVID with a forty percent explosion in the money supply, with this type of change in fiscal policy coming down the pipeline. This is a new type of market that is trying to absorb these massive inflationary pressures that have been in place for a number of reasons over a number of years, and the Fed continues to seem tolerant of above target inflation.
David, the revisions come out and they too show a modest disinflation as well. That'll put a little fire on this.
We're hearing the Interactive Broker's studio. You're in Chicago. What's the reaction to this? On Sathless Salle Street in Chicago, Austin gools Be telling us last week he wanted to see these numbers. These numbers were going to be important for him as he makes his way to Washington next week. How does this do you think change his sense of the calculus here going forward?
Well, I think the Fed is going to look at these figures and say there's it's not a material upside risk to inflation, at least not this month. And given the material decline in the labor market data that we've seen as of late, the three month average right round thirty thousand jobs per month, that's going to be enough to justify a rate cut next week. I don't think it's enough to justify fifty basis points, but twenty five basis points, with possibly a couple descents in favor of
a larger cut. But going forward, it's going to continue to depend on the evolution of the employment data and the inflation side of the equation, which has far from been satisfied at this point.
You are celebrating with your time off a new issuance of offspring as well, and there's a whole affinity here to Julie Andrews and the sound of music. Are there going to be seven Lindsay's I mean, are we heading for seven.
K three is where we're going to cap it.
I think that's the case. Just to lead a governess and a lot more.
Help Julie Andrews to show up, but either careful.
Of those of Childcares is going on things.
That's a real no no, it's it's doubled.
To congratulations from all of us within Lindsay Jason really really appreciated. Doctor pigs is with Steve Wall Stay with us. More from Bloomberg Surveillance coming up after this.
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Nick Ackerman joins us, now starting his career in the depth of Watergate, but far more than that, working in corporate law in fraud. We are honored he could be with us today. David Girl, why don't you bring in the esteem mister Ackerman?
Well, Nick, great to speak with you, and I took your council quite a bit over the course of the first Trump administration on all matter of legal issues when I was at another network. It's great to speak with you once again. You're another year. Let's secret, it's about traitor.
All of this on two words for cause. Help us understand here the case that Lisa Cook and her attorney, Aviy Lowell are trying to make here, and the difficulty of proving that as we get to the appeal stage of this, maybe all the way up to the Supreme Court.
Well, it's not that difficult. Actually, for cause on the judge in the District Court interpreted that to me, and it has to be something some kind of malfeasance during the time that Lisa Cook was actually serving on the Federal Reserve Board. She went through the legislative history, looked at the what was intended in the Amendment to the Federal Reserve Act back in nineteen thirty five. I looked at the fact that what Congress was concerned about was
malfeasance in office. So as a matter of law, she found that four cause can only relate to the time period that Lisa Cook was in office, and this all allegedly occurred prior to her appointment as a Federal Reserve Board member.
Nick, you know, well, there are many of these agencies that have some degree of independence from the administration or from Congress in Washington. The Supreme Court is should a decision a few months back in which it noted that the fens independence is a unique one and a special one. How is that going to shape what happens here going forward? If this does in fact make its way to the Supreme Court, how will that color the decision that those nine justices made.
Oh, I think that's the bottom line. The fact that the Supreme Court, I think it was in Wilcox has already said that it was essentially dicta in another decision, but I think everyone agrees, and the District Court opinion made a very strong case for the notion that Congress's intention in creating the Federal Reserve Board, well over one hundred years ago at this point, was done in order to keep it independent from the ongoing politics of the nation.
The fact that the person is appointed to a fourteen year term, the fact that it was only a person could only be removed for cause that really, I think is going to color this straight up through.
Nick I had a hockey injury during Watergate, and I was flat on my back that summer where we leisurely went through meetings in Sammervan and Howard Baker and all the rest of it. Those days are gone. Now we want to be at the Supreme Court in three and a half days. Nick Ackerman, how has our law changed because we're so damn in a rush?
Well, I think it's the Supreme Court with their docket this. I mean they decide things on stays very rapidly without full briefing. I mean it just is not right. Get the Watergate thing with the repeal on the tapes went very quickly. The whole thing occurred within a seven month period, which in terms of normal litigation was really fast. But today people are running up to the Supreme Court immediately.
In the shadow docket that the Supreme Court has fostered allows for instant opinions without really a good opinion, not a substantial.
How does the Chief Justice defend the institution and the remainder of the Roberts term, the Roberts era.
I think it's very difficult because when you're not actually writing full opinions, explaining your reasoning, giving both sides an opportunity to put in a full briefing. There's a reason for all of that. It's so that these issues, which are very important can be decided in a normal course where everybody has a chance to actually put best foot forward.
One final question. I got to get this in Michael Barr's Waiting for the News with mister Ackerman. This is too how political our appeals courts because so and so appointed this judge or that judge.
I think they come down to being very political in the sense that this was not something that we looked at back during the days of Watergate. There are judges that are appointed specifically because they wrote particular articles on an issue that appeals to the president. I think they're much more political than they were, and certainly the Supreme Court comes across now.
As David said at the beginning of this conversation, we're just thrilled in hunted you could be with us. Nick Eckerman, thank you so much for giving us needed perspective here among amidst this legal moment. I should say, stay with us. More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Apple, Karplay and Android Otto with the Bloomberg Business app, or watch us live on.
YouTube the late Vince Ferrell, who I abdored. He was on Wall Street Week with lu Lu Kaiser. Vince Ferrell and I used to be in tears laughing about how many kids we were still paying their iPhones for. Here to brief us this morning, tone down with a new Pittsburgh Pirates cap is Dan Ives. For those of you on radio, you're lucky. What's the p on your hat?
It's Arnold Palmer had from arn Palmer torn him big, big arma Palmer fan.
Let's get this out of the way. You signed as a chairman of a crypto thing this week. Explain what the game is you're doing there? Yep.
So you know we announced that I'm gonna be chairman of EKO and a KO. You know is you know when you think about Sam Alman in the build out of World, what Dave essentially done is it's really gonna be the infrastructure authentic keys for AI in the future. And you know, I was a huge believer in this. You know, I'm not taking this on just for any crypto equity in This.
Is a rasearch channelist. This is a sidecard deal.
Yeah, this is this is a total separate initiative. Uh, you know, total separate from my web bush. But but Tom factors really into my view of the AI revolution. I'm doing this because I think this is going to be the fact of standard for really you're going to.
Take a minority interest in perplexity. If they called you, we need.
As long as it comes through Keen.
Earlier this week was a corrugated packaging company.
It basically is a treasury vehicle for world Coin in terms of what we've done, and that's why I think. You know, receptions obviously been great. You know, we raised capital and closed that this morning. Okay, it was super exciting to just put another you want to talk.
Now this appears, which is like Worldcoin, it's a means of authentication. You have your iris scane to know that you're the person that you say you are.
Glad you know, well, okay, that's enough so that there's a stor involved to bring the orb for community next time. What did mag five learn from the Oracle pop last night?
This AI party, it's ten pm going to four am. I mean, the point is the infrastructure was that's gonna be historic quarter when you look at work and it shows the type of cap backs we're seeing and the use cases are exploding.
We've talked about so much here in the Change My Life.
I mean as simple as that.
Look and the reality is anyone that thinks hype not real. That oracle number is a validation. That's a drop the mic from Saffra and Ellison. That shows to me what's going to happen the rest attack and it ze Brahmin.
Did we have a drop the mic moment with mister Cook yesterday? I tuned in for twelve seconds. It's so manipulated. I can't watch it. You and had Ludlow saw were your thumbs up, like Gene Mounster.
Look, it's a thumbs up relative to I think expectations. Our view here is that the elf in the room continues to be as we talk about AI.
But I do believe with the DOJ Google situation now you.
Know in the rearview mirror, they will double down then and that's going to be ultimately their AI partnership. But in terms of the actual iPhone, look, three hundred million plus have an upgrade four plus years. The point is this is going to be includes John Tucker, including talker. So if you think about on a scale one to ten from an upgrade cycle. Super cycle being a ten, it's probably going to be about an eight point five. But what I tell you is the street right now
numbers are conservative. New York City cab driver or uber is still barished on Apple, and I think that to me sets it up well as well as you add AI and they actually make a big move there. You tell about another you know, one hundred dollars per share to the stock.
What does Apple have to do when it comes to AI? So I look at Meta for instance, and they pay a lot of money. They're hiring a lot of big name people. And I think if you look at the history of Apple that had a bad luck of bringing in outside talent, particularly the executive level, to mix things up, to change things around, are they able to do that? What do they have to do to kind of re establish themselves here at the vanguard of AI.
Look, there's a better chance of me playing in Beth Page Ryder Cup in September then AI innovation happening from Apple, and I think that's the issue that they got to go outside.
It has to be good.
You're a way to make that work.
Danae with Wedbush with us this morning. David Gerntin can good Morning across the nation and the way you listen to us on radio good Morning nineties to nine FM in Boston, on YouTube and your home at your office. Floored by the sign up, Thank you so much, Bloomberg podcast Go out to YouTube and subscribe it Bloomberg Podcasts. Thank you for your attention to our new dan ives like digital. Maybe I should start wearing bright pink. What do you think, David?
I could see that.
Why don't you continue with mister? I've talked about the pink both for I know what.
The hoodie beneath the jacket would be a good look for you.
I think when I thought Dan I have's clothing, we could add potentially a bow tie and it would be called.
Everything is like two X. You know, it's like for little people. What's the name of the company.
It's snow milk. My cost snow milk.
They got to make like adult sizes like we we have X six X.
I think we go down the route with a keen bow tie. I have been I'm actually advocate.
Very good David jump in.
Can I go back to Oracle? I diverted over to to appled love to go back to Oracle, what should make How quickly they were able to make this this pivot, What does it say about sort of the future direction of Oracle moving into cloud computing as rapidly as it did, as successfully as it did. Certainly when you look at the numbers.
Of guess who's watching course, so you see what they did, it's Benioff, it's Adobee, it's software where right now they're not the cool kids table.
I mean, what Oracle has been able to.
Do because of the stack right it's it's been transformational. And I think that more is where we're seeing. Everyone wants that. That two to three trillion of cap backs, everyone wants it.
Doug Cass emails in Okay, he's beside himself about the Yankees defense. They're averaging like three years a game. I mean, it's said Aaron Judge should be at first base, Dan ives. Dougcass has a question for you, the backlog dynamics versus the accounting on the statements. Is this an accounting issue to come not only for Oracle but for other mags seven and then there's so much future business that needs to adjust in the accounting statement. Is that a risk?
And I hope Doug's doing well. It's a good question.
I think there's definitely some normalization that's going to have to happen there over the coming quarters. So you got to normalize it, you know, from a backlog perspective in terms of arr Look, I think the reality is is that over the coming quarters, that's where like look for Oracle, if you got if you're the amount of stock that could go to three P fifty four hundred. You got to continue to show this because you as the normalization starts to happen, the comps ultimately start taking place.
You need to continue to see that growth.
You mentioned Google and uh Gemini, what are they waiting for?
They were waiting they were waiting for DOJ I mean that and now the candleight dinner could happen between soon Dar and Cook. And I believe that is Look because I truly and we've talked about, if the dog went negative toward an Apple Google, then they have no choice called perplexity on the red phone and they have to do that deal. But now I think they double down.
The joy they're.
Waiting for is it literally like just Egos, they have to wait a little bit of time.
I think you wait a little time look. And we also know in Cooper Tino there is a part of it that runs like a motor vehicle in New Jersey, and that's been some of the issue in terms of some of the bureaucracy that they're trying to get rid of in terms of the red tape.
Going back to the Oracle numbers, So say sundors tuning in to watch Romain and numbers yesterday, or Andy stole it up in that Seattle What do they make those Oracle numbers? How much are they worried about the progress that Oracles made here?
And how do they I think they actually love seeing those numbers because they view it. And that's why, like what you see with Google's gc B, it's it's a barometer that shows where that's coming. That's why Nadella, he's sitting there with the Mimosa right now watching those numbers.
I mean, and I do you want to mention Oracles put their support by in Bloomberg Surveillance. We thank Oracle for their support each and every day. What's your single best buy?
I mean to me, single best buy here continues to be Microsoft just because of my view of because of where the hyperscalers are it's in their backyard. Stock actually sold off a little postcord and I think that's one they will ultimately join in video.
What's eventually gonna be there.
Twenty this year and you say way more.
Just to we've talked about it's just to beginn We are in the second inning of the AI Revolution, going night, and we've talked about the party start at nine pms.
Now ten pm goes to four am.
On the dance for is Noadella Jensen, pound On tear carp and others people.
The guy who says a romantic life. Let's make it clear you just got off the romantic red eye.
I just got off them, Carol and Tim. Right, Yeah, I was there rocking to and actually I went. I went from Australia to Huntington Beach to now here with you.
Guys appreciate that Lafe flat beds as you were talking about yesterday.
But he's a little guy. It's like it's a little guy. No, No, the Lafe flat bed works. There's no late flat bed for me.
Yeah, but the problem is that's why you're the one that does like the special cabin and emerates.
So the play.
The Keen cabin and the whole King shower in the Disclosure.
Law Premiere Air France. But which ray It's like a huge cabin.
Of course, but you set a higher standard.
It does. I don't know. I don't know. Some tennis player was sitting next to me.
It's actually it's actually Keyn's whorld. We all pay rent. Jos. Thank you for.
Exploding on whatever your new business transaction is. I still don't keet Well.
Deorb's coming to you soon and I'll bring it next time. Okay, Dan, I think that's really small. We'll bring the orban next time. Team will get skinned, Dani.
Thank you so much. I'm gonna sell the show. Dan Hights web Bush Securities. Stay with us. More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
I'm gonna set this up right now. There was a missile attack and Cutter, and my biggest problem with Cutter is we really don't know much about it. It's directly west of Dubai, sort of in between the Dubai and Riod it's his hunk of lands stuck out into the Persian Gulf, and David it's mostly expats. It's mostly it's such a place used to be in an economy rapt on gas and oil that it's not that many Katari's and a lot of X pass and about other than that.
Our knowledge base is they run an airline where you see those genormous planes landed on big Jet TVA the Heathrow. That's a knowledge.
And then we get to the broad strokes description of the huge, huge news yesterday, huge news Israel in strikes trying to take out leadership of hamas in in doa and certainly unprecedented and really raising a lot of concern throughout the region around the world. We of the President of United States saying he was not happy with how this had all unfolded. The US apparently was tipped off to the attack happening, but very soon before before it did,
wasn't consulted before all of that. I want to bring it down, Leslie Polton Gusman. It foundered Energy Vista also a senior non resident felt the Center for Strategic International Studies talk more about this and the effects that it's having on the region. This comes on the heels of this, this OPEC announcement boosting outflows of oil. What does all
of this mean for the energy market? We have been through this conflict now for more than seven hundred days, going back to October seventh, and there's been concern all the way that this could have a profound impact on the energy market. So far it really hasn't. Does this stand to change that calculus or the way the energy market looks in any way?
Well, thanks for having me back.
I think it was most likely an orchestrated attack, and as a result, we're not likely to have short term market implication, especially for catoric gas and energy and pricing globally, because Katar remains one of the world's largest energy exporter. However, it's going to have implications for its long term expansion plans.
Katar is expanding.
Massively its export capacity in the coming years and has not marketed all of it, and this underscores is vulnerability because of its location and because of the vulnerability of its shipping routes that we've seen over the past two years.
Since the wars in.
The Middle Easts have you know, surged from in different neighborhood countries.
We've seen also in Iran.
Iran attacking Katar in June also an orchestrated attack. So I think it really puts in plain sight Qatar's reliabilities.
Tom laying out again in broad strokes sort of what goes on in cutter and let me dig into that a bit more. We had the present Nighted States going there on this big trip and really playing up the fact that it's a source of investment and a place that he's really seized on is an important ally, and the region of course has the largest military base in the US military base in the Middle East as well.
How do you see that the geopolitics unfolding here kind of is playing this huge role here in trying to negotiate some sort of solution to that conflict in Gaza. They're upset, the US as upset. What does it mean just for the broader geopolitical relationships here.
I think Katar has a very ambiguous geopolitical standing. On one hand, it hosts US military base and on the other hand, it keeps strong ties with Western enemies such as Iran. Ramas, the Husi, the Muslim Brotherhood, and it's financing in Europe for example.
I think what we've.
Seen right now is Israel really coming out with its new military defense strategy since October seven, preemptively deterring any threats and trying to accomplish its war goals before the markup of the two years anniversary, I mean side anniversary of October seven.
Let me ask the dumb American question, because I am the dumb American. Are they on our side? When you look at Bahring Cutter Kuwait, you look at shores of the Persian Gulf, are those guys are they on our side?
I think that's the best question.
And okay, yes, and I'm so happy you asked this question because I think eventually there is going to be more scrutiny on Katar and they will need to pick a side because this ambiguity geopolitically serves them as any middle small power. But you know, it's it cannot last because there is this rivalry between China and the US because there is too much at stake and the economics, you know, side of things. So it's definitely a critical question for the coming United.
Airb memorates and complexities of the five tribes. Have Dubai have Abu Dhabi? Have they picked a side?
Not necessarily, But if you look at the Yemen Civil War, for example, Katar was definitely not on the southeast side, but was on the housy side. And right now you have many threats that are coming on the way to the US right and Katar is not on the right side.
Distinction, Folks, Kura knew all that. What she just said to me, it's Greek. I'm like, really, continue, David.
You know we we were talking earlier this week Ian Bremer view Ratio Group send out a note talking about this kind of reconfiguration of geopolitical alliances, and for so long he was talking about g zero and the dissolution of kind of alliance of world leaders. Help us understand what you saw as you watched the proceedings unfolded in Beijing a few days ago. So you had President she there with Kim Jong und and you had you had a Preme Minister Modi there, Vladimir Putin there as well.
What is all of that signal to you, particularly from the vantage that you have of looking at this through the prism of.
Energy time will tell us if it's a strategic bluff or a real deepening of the Joe economic alliance between Beijing and Moscow. I think it reminded me some of the Cold War statements, you know, preemptive statements, not much detail. You know, they haven't agreed on pricing, but they are here to come as a splash on the media on this you know, international stage and show that they this kind of corporation going on.
Thank you for coming in. I learned a lot that you know that was really good.
Agreed.
I don't know how you do it. How do you know that cutter supported as you do too. You did a big take on at some point, Leslie. Thank you, thank you, Thank you. Leslie. Paltic Guzman with us with Energy Vista as well.
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