Bloomberg Surveillance TV: June 13, 2025
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This is the Bloomberg Surveillance Podcast. I'm Jonathan Farrow, along with Lisa Abramowitz and Anne-Marie 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 6 to 9 a.m. 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.

Israel launching another round of attacks on several locations in Iran. President Trump reportedly telling ABC, quote, I think it's been excellent and there's more to come. Joining us now to discuss this, Danny Danone, the Israeli ambassador to the United Nations. Ambassador, good morning. Thank you for having me, Don. Thank you for sharing some of your time with us because I'm sure you've been exceptionally busy. Let's just talk about where things stand right now. Is this operation ongoing? And ultimately, what are the goals?

Well, the goals are very clear. We want to make sure that Iran will not pose a threat, not only against Israel, but against the entire Western civilization. And specifically, we have two main goals. To eliminate the nuclear capabilities and to stop the production of ballistic missiles. And let me elaborate on that.

You know, it's not only the nuclear weapons. We all know about the UN enrichment and about that they're getting very close to put a bomb together. But look at what they're doing with the ballistic missiles. They want to, they want it to be at the same level of the U.S. and Russia in terms of the quantity and the technology of the ballistic missiles. We couldn't allow it to happen. We got intel about their intentions to create another attack against Israel. You know, we all remember what happened on October 7th, but this time they wanted to use

thousands of ballistic missiles and invade into Israel with their proxies. So it was a preemptive attack. So we will continue until we will be sure that we eliminated those two capabilities. How sure are you right now?

Well, we will have to wait and see the result of the attack of last night. It was a major attack. More than 200 aircraft participated in the attack. Many targets, many senior military officials were eliminated.

last night, and we will continue until we know that Iran is in the point that they cannot continue with their efforts. Including the IRGC general commander, is there an intent for regime change in Iran from Israel?

Well, that's not our goal. You know, we are concerned about the threats to Israel. For the Iranian people, I wish they would have a different regime. You know, we saw what happened in Iran. The people are suffering there. They have no heat in the winter, no AC in the summer. They are suffering there. But our goal is to eliminate the capabilities of Iran so they will not be able to threaten us. And then, Marie, look at the map.

We have no border with Iran. It takes us hours to fly there in order to attack those facilities, but still they spend billions of dollars to create threats against Israel. This nuclear enrichment is deep into the mountains. How long will that victory actually take? And it's called Rising Lion. Why is that?

Well, you know, every time we pick a name when we have a military operation, sometimes the computer is doing it for us. So there is no real meaning for the word of the operation. But I would say that IAEA published recently that Iran has enough uranium to create not only one bomb, multiple bombs.

So it only, it was a matter of days to put it together. We decided not to wait, not to take that risk. We believed the threat of the Iranian. When they said that they're gonna use those ballistic missiles to destroy Israel, we took it very seriously. - How much did the Israeli government brief the US government?

So we talk with the U.S., but this decision was decided in Jerusalem, and we took that decision independently, not for the first time. In the '80s, I want to remind you, we attacked the nuclear reactor in Iraq. We took the decision by ourselves when we attacked the reactor in Syria. I think it will serve the U.S. and other Western democracies, but it was

decision that was made in Israel. Do you think the United States will come to not just the Israeli defense, but potentially if you're needing help with more attacks, if this continues for days and weeks? Well, since the day that it was established, we never asked the U.S. to fight for us. We know how to fight, and we know how to defeat our enemies. You know, we have heard threats that the Iranians are threatening the U.S. targets, they are threatening the allies of the U.S. in the Gulf. And you're closing your embassy, right?

So we take precautions in different places around the world. We are aware of the threats, but we will continue. Also in Israel, we have to be honest. In Israel today, we are getting ready for serious attacks coming from Iran. It will be very intense in Israel in the next few days. We are preparing the population. And this operation, it's not only about the bravery of the pilots.

It's about the population in Israel. They will have to follow the guidelines in order to avoid casualties. Ambassador, as you know, the United States has distanced themselves from this in the last 24 hours and said they weren't part of the attack. What's not clear to us is whether they assisted in the defense of Israel. Did they?

Well, you know, we have capabilities and we are... You do, but did they assist you when they sent over drones from Iran to Israel? Did you receive any help from partners outside of Israel? Well, as far as I know, we were able to deal with the drones by ourselves.

And, you know, but we have to realize, you know, the threat is not only against Israel. As I said earlier, Iran is threatening the allies of the U.S. in the Gulf. So we have the capabilities. I'm not sure they have the same capabilities. Are you worried about an asymmetrical response from Iran?

Well, we took into consideration that there will be retaliation. Will it be proportional? Well, they know that we have capabilities as well. So they will have to think twice before they attack us and what they are doing. And I would say that today we can reach every target in Iran. We have the control in terms of our pilot. Do you have intent to reach every target?

Well, you know, we have the capability. We focused on the goal that I mentioned earlier, the ballistic missile infrastructure and the nuclear facilities. How long will that take if you were to reach every target?

Well, it's not going to be a short operation. So is it weeks or months? I wouldn't say months, but it can take days or weeks. How lonely is Israel of the United Nations at the moment? Well, I will let you know in a few minutes when I go there, Jonathan, but it's going to be tough for us. Iran already called for the Security Council to meet. Probably it will happen this afternoon.

But, you know, I will tell my colleague at the UN, where were you in the last 10 years when Iran threatened Israel? Where were you when they sent ballistic missiles? Where were you when they actually acquired the nuclear capabilities? So, you know, wars will not stop Iran. Israel will. The international response, Saudi Arabia calling it heinous, the NATO secretary general calling for de-escalation, the UN secretary general calling for maximum restraint.

Do you think there is a diplomatic route when it comes to dealing with this regime?

Well, I think that they, you know, already have the diplomatic act. And the time for that will come. But we saw that the diplomacy didn't convince Iran to change course. You know, for decades they negotiated, they played the game, they lied. We found, we had the intel, that they are developing nuclear capabilities for military usage. There's some analysis, though, that under the JCPOA they were restrained, they were capped.

they are not capped now when it comes to enrichment. Well, you know, with and without the JCPOA, they were continuing. And what we revealed only recently, that, you know, alongside the reactors and the plan that was supervised by the international community, they developed a military capability that they were hiding it from the international community. So once we realized that they are going to that direction, we decided to stop that.

Ambassador, we appreciate your time this morning. Thanks for making time for us. Thank you very much. I'm sure you're going to have an exceptionally busy day ahead of you. So thank you, sir. The Israeli ambassador to the UN, Danny Danone, there on the latest attacks on Iran.

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It's the latest this morning. Investors rushing into bonds, pushing yields lower briefly as tensions between Israel and Iran reach a boiling point. Joining us now to discuss is Robert Tibb of PGM. Rob, I said briefly because yields now are up, particularly at the front end, by about two basis points. It feels like a tug of war between natural risk aversion, out-of-risk assets to something else, plus an inflation redevelopment. What would you put more weight on, one versus the other?

Right. Well, actually, for right now, the market is, in some respects, putting more emphasis on the Fed at this point in the cycle. I mean, actually, from the best levels at some points overnight, we've seen some flattening of the yield curve, where effectively having a higher oil price reduces the odds of Fed rate cuts, which then is positive for the inflation outlook, you know, leads to a flatter curve.

So that's rather ironic. But we've seen a lot of these situations in the Middle East over the years, going back

And they're all at different points in the economic cycle. So when you go back to 1990, you know, that was hitting in the middle of a recession. This one is hitting in the middle of a pretty firm economic backdrop, albeit one with a lot of anxiety. But it leads to a different kind of market reaction. To your point, starting points matter. So let's talk about the starting point. We've made some progress on inflation, four consecutive months of downside surprises. Where are we now, Robert? And do we risk upending some of the progress we've made?

Definitely. You know, we have had three good months of inflation. But the problem with this cycle is before the three months of good inflation, we had three months of terrible inflation. And then before that, last year, there were months of good and then months of bad and not just one, but a few and a crack.

And that's why this has been such a difficult cycle for people to get their arms around. And the same has been true on the real economic activity, where you get a few strong months, a few weak months. And so the Fed is in this constant pull and pull, push and pull of, oh, yeah, we've succeeded. We're going to be able to cut interest rates. Oh, no, we have to really, you know, stand tough. And already...

Most inflation forecasters were looking for inflation to go up as a result of tariffs, if not in yesterday's morning's number, definitely in the next several numbers that are coming. So it begs the question, Rob, let me jump in at the time we have left. What does it mean for the Fed next Wednesday when they've got to put out forecasts?

Yeah, so they're definitely going to be on hold and evaluating, and I think it's going to make them very reluctant to even change their dots, make any fine-tuning. They're going to want to say they need more information.

And going back to that 1990 incident where people think Kuwait's being invaded and the Iraqis being repulsed was very quick, that actually took a few months for the price of oil to make it all the way up to the top. So these things can take some time to evaluate. We're not in a weak economic backdrop. The Fed's going to have time to evaluate. I think they're going to stand pat, try to talk down volatility, talk about the firm under-relying situation. Robert Sipp, FPGym. Rob, appreciate the time, sir.

Thanks for making time for us this morning. We need to spend some time on the potential Iranian response. We can do that now with Stephen Cook, the Senior Fellow for Middle East and Africa Studies at the Council on Foreign Relations. Stephen, welcome to the program, sir. What a timely opportunity to catch up with you. Stephen, can we start with Iranian defense and military capabilities, how degraded they've been, how degraded they've become, and not just theirs, but also the military capabilities of Iranian proxies as well. What is the current state of play?

Yeah, well, reporting coming out of Iran and Israeli reporting indicates that a tremendous amount of damage has been done to Iran's ability to respond. There are reports of James Bond-like Mossad operations in which they have disabled the ability of the Iranians to launch large numbers of ballistic missiles towards Israel.

they have targeted Iran's air defenses so that Iran is more vulnerable than ever. Thus far, the only thing that the Iranians have been able to muster are

or a wave of UAV strikes, most of which I believe have been shot down. As far as the proxies go, Hezbollah has said it will not respond to Israel's attacks on Iran. And in fact, the Lebanese government has said it will make sure that Hezbollah does not respond to Israel's attacks on Iran. We haven't yet heard from the Iraqi militias, but in the past, specifically last October when the Israelis hit Iran previously, the Iraqi militias have said,

that they weren't interested in retaliation. That leaves the Houthis, and we'll have to see how they respond. But by early accounts, the Israelis have done a very significant amount of damage to Iran's ability to strike effectively. Of course, it's early days. The Iranians may have some tricks up their sleeves, but right now,

But all the advantage goes to the Israelis who are once again undertaking attacks against Iran. Stephen, if it's true that the U.S. and Israel have a tight security relationship, why would Israel choose to act and the United States not?

Well, we don't know for sure whether the United States was not in on this. There is a lot of Israeli reporting suggesting that this was in the last few days were an elaborate deception campaign. But I think in keeping with the president's worldview, Defense Secretary Pete Hegseth said it best before Congress just the other day, in which he said Prime Minister Netanyahu is going to do what's best for his country and President Trump's going to do what's best for the United States.

I think the Israelis' view is that the Iranians in recent weeks have crossed a certain threshold and that they just could not wait. There is a fair amount of Israel-U.S. security coordination. And as these attacks are unfolding, it's likely that the United States provided real-time intelligence to the Israelis. And, of course, in retaliation, because Israel is part of CENTCOM, the United States and Israel and other regional partners will cooperate in defense of Israel as a result of that.

It remains to be seen. I think the president's post on social media this morning would suggest he'd like to have it both ways. And maybe when you're the president of the United States, you get to have it both ways. But I think more needs to be—we need to find out more about the actual U.S. role here. You just insinuated that you don't think this would hinder the U.S. response in defending Israel. So do you expect the U.S. to come out in full force in Israeli defense when we see Iran's retaliation?

We already see in the CENTCOM area of operations the Jordanian Air Force is shooting down Iranian drones. And that is in coordination with the United States. So, yes, I do think that the United States will help in the defense of Israel in the event of a kind of massive Iranian response. And I do think that the United States would get involved if the Iranians seek to respond by, for example, closing the Strait of Hormuz or attacking shipping in the Persian Gulf.

We've been talking about for months, actually years, about Iranian enrichment and these breakout periods. Why now, Stephen? Well, I think the Iranians have been working diligently at this and that their security situation has deteriorated over the course of recent months.

I think we should be skeptical about the reports over these many years that Iran was not seeking to weaponize its program and has been diligently working throughout in order to develop weapons capability. I was privy to an open source briefing just recently, which made it clear that the Iranians really have never stopped

uh... their efforts to uh... develop nuclear weapons so do you think today's attack was all about where they are in terms of their capability when it comes to their nuclear program or is there something else israel knows that we have yet to be briefed on

Well, I think for the Israelis, a certain threshold had been breached, and they felt that they did not have much time left before the Iranians weaponized. But I think that there's a broader goal here for the Israelis. The way this attack is unfolding is quite similar to what the Israelis did to Hezbollah in the fall of 2024, essentially an effort to decapitate the regime, make it reestablish

render its ability to respond effectively quite weak and provide an opportunity for a change in regime. It is the Iranian regime that is the danger, not necessarily Iran or the Iranian military or even the Iran nuclear program. It is the regime and what their intentions are to do with it. If you change the regime, you provide an opportunity for perhaps

a more benign government there. An opportunity, this is a very, very risky strategy, but it seems clear based on how the Israelis have attacked the IRGC leadership, the military leadership, and even reportedly took a shot at the Supreme Leader himself. - Steven, I wanna follow up on this. What you're saying is really quite important because what I've heard so far this morning

is something quite different. That this was a targeted limited operation to degrade the military and nuclear capabilities of this country. And that regime change was something bigger, something that they weren't pursuing. If the Iranian regime believes that the Israelis are looking to topple the regime and they view this as the start of an existential threat,

How does that shape their response in the coming weeks and months? Because I can tell you from a financial market perspective, a lot of people are thinking about the Strait of Hormuz. And some people would sit here and say, that's the big car, the nuclear option. They wouldn't reach for that. Maybe they look to de-escalate things from here. Are you saying this could play out differently?

Oh, I certainly think that that's the case. And I think that people are missing the point here. Prime Minister Benjamin Netanyahu has for months been talking about the Iranian people, how the Iranian people are suffering under this regime, that a different regime would be better for the Iranian people. And so I think that there is absolutely a broader goal that is here. The Israelis promised

Prime Minister Netanyahu himself promised on October 9th, 2023, to change the Middle East. That doesn't entail limited operations just against nuclear programs.

As I said, it's a risky strategy. The Israelis are far away. They are looking to greatly weaken this regime so that it can be more easily toppled. It's not a coincidence, I don't think, that the Israelis called their operation Rising Lion. Take a look at the Shah's regime. Take a look at their flag. There's a lion in the middle of it.

I do think that it may be existential for the Iranians and that they may try to retaliate in very, very significant ways. I think the question is how much damage has the Israeli military done in last night's wave of attacks, waves of attacks that are being undertaken now, waves of attacks that are being contemplated?

in the coming days, how much damage they've done to the Iranian ability to respond and whether the Iranians after all this will be able to muster the kind of massive response against Israel or American bases around the region. They'll still have a lot of resources at their disposal. Certainly the ability to create chaos in other parts of the region. But will it be this kind of existential regional war that people have been warning about so far?

It doesn't look like it with Hezbollah saying, we're not involved, quiet from the Iraqi militias. That may unfold in coming days, but the Israelis seem intent on not allowing that to happen. Deeply thoughtful stuff. Stephen, appreciate your time, sir. Stephen Cook there of the Council on Foreign Relations.

If this government spending in defense goes towards things like R&D that have dual-use civilian purposes, you could get spillovers that actually end up enhancing productivity in Europe and so have a more long-lasting impact on growth.

To learn more about the intersection of national security and global trade, subscribe to PGM's The Outthinking Investor in your favorite podcast app.

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AI is redefining what's possible for your business. Are you up for the challenge? Microsoft is helping leaders like you get AI ready faster with unified data and simplified platform management, unlocking up to 150% improved output.

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Good morning, Jonathan. Yeah, I'm here with the CEO of Ford, Jim Farley. And Jim, a lot to talk about here at Le Mans with you. You just got out of a race car. But before we do that, I want to ask you about the Israeli strike on Iran and the counterattack. All

Are all of the Ford employees that you know of in safe places, you do have operations in the Middle East? We do. It's a really important region for us. We're watching Turkey as well. We have a huge operation in Turkey. We export all the way through Europe and the UK. So, so far so good, but it's clearly a concern for all of us in business. One of the things we've seen as a result obviously is the oil price rise five or six percent really across the board.

Has the low oil price been helpful to you or has it not helped to encourage people to buy electric cars?

Yeah, it's interesting because it cuts both ways at Ford. We're 60% almost of the commercial business in the U.S. and a lot of that is energy. So you go to Odessa, Texas, everyone drives a Ford Super Duty. So, you know, if oil isn't in that $65, $70 range, our customers suffer. But, you know, obviously I think for the economy and for everything, it needs to be in that kind of range that makes sense for everything. Large spikes, big changes in oil prices and gas prices.

have huge impacts on our demand. We see truck and full-size SUV demand go down when there are big spikes happen in '08, happened many times. So no, I don't think our business likes big changes for the consumer. It's very stressful for them. The electric business, though, I would imagine also is dependent on, in some sense, higher gas prices. It is. I drove your Lightning. It was fantastic. Spent a week in it. I've driven the Mach-E for a couple weeks. And

one of the great pleasures is you don't ever have to go to a gas station, right? - Yes, yes. - How are those businesses doing right now? 'Cause you've taken such big losses there and maybe slowed down in terms of your progress into EVs. - Yeah, we've really changed because we're thankful. We've been number two to Tesla for three years in the US.

because we spent our capital like five, six years ago and all that product's been out for four years that you mentioned. So we've learned a ton. Now we've changed our capital allocation for EVs. We've reduced the spending, changed the battery chemistry a lot to focus on more profitability. We've gone down market and mostly in commercial. Those are the only markets where we think in the US, you know, an 8, 7% of the industry is going to make sense for EV where you can actually make money.

And the EPA requirements have a big impact on the EV investments by OEMs. During the last several years, you know, we had to kind of sell like 15 to 20 percent of our mix to be EVs, both for the ZEV states, California, Colorado, New York, but also, you know, to meet the national tailpipe emissions. And so what's happened, interestingly, the total number of EVs in the U.S. has grown significantly.

But the total revenue has not changed in three years because the prices have come down equal to the volume going up. So the EV market has not been growing for three years if you look at total revenue. Everyone looks at unit volume. Don't look at that. Look at the price and the volume. And I think we now have a good strategy going forward. A lot of our competitors are just investing for the first time. And good luck if you're selling an $80,000 SUV electric vehicle. We've invested a lot in hybrid. Look at that.

We are really successful with our truck hybrids. The best-selling vehicle in the U.S. for 47 years has been the F-150. 25% of those customers now buy hybrid, and a lot of it is exportable power. You can run your house for six days with an F-150 hybrid now, and the others don't offer that at all. So, yeah, we think hybrid is really the mainstream technology. We'll see E-Revs come to the U.S. soon as the next technology for partial electrification. I want to ask you about...

sell, race on Sunday, sell on Monday. Since we're here at Le Mans, since you just got out of a Mustang race car, how does this racing effort, and it's a big effort, trickle down to the bottom line for Ford shareholders? Well, for us, the biggest is off-road market. You know, we have, you know, almost 20% of a global profit coming from our enthusiast off-road products. And we race at Dakar, we race at Baja, we race at King and the Hammers. That's a big thing. You know,

I don't think there's a better way to promote your brand. Look what Ford winning in 66 at Le Mans did for Ford Motor Company. It made us a global company. We're an American company, but that moment changed us completely. And that's why we're going back in 27 to take on Ferrari and take on Porsche. We think we have the technology.

Also the tech transfer, software, battery tech, aerodynamics. It's different than the 70s, but the tech transfer over to our road cars is immediate. You'll see hundreds of Ford engineers here who will be working on Monday on our road cars. And it's really important tech transfer. But we do it regularly.

I think as smart as we can, and maybe as a racer, I'm more sensitive about wasting money on racing. And we challenge ourselves to be really smart. I think we've done a great job with the off-road, the Raptors, the Tremors, you know, all the Broncos. I think that's been, frankly, some of the smartest investment we had in racing. You say you're an American company. You've touted yourself as literally the most American car maker. 80% of the cars that you sell in America are made there. Donald Trump...

was out overnight saying maybe he's going to go after even higher auto tariffs. While you've said in the past that causes costs and chaos, does it also kind of help you because no one else makes as many cars as you do in America? Well, for Ford, this is a moment for us. You know, we have employee pricing out there. We gain a couple points of share year over year. A lot of Americans are shopping Ford because now they're starting to think, hey, half the cars in the U.S. are imported.

And if all the car companies were like Ford, there'd be 15 new factories in the US, a million new jobs. You know, I think a lot of Americans are starting to pay attention to where these cars come from. And for us, yes, I think Donald Trump's policies

especially around the Asian countries where they've supported with subsidies, direct or indirect, for their automobile industry. This is a great thing. We have to sort out this Mexico-Canada thing because we need to keep the vehicles affordable in the U.S.

And there's actually a lot of parts we can't even make in the U.S., Matt, as you know. And so we have to kind of sort out what role does Mexico and Canada have in our North America market from supply chain and manufacturing to keep the vehicles affordable. And that's something that we're talking to the administration. We found the administration to be very positive to work with. They want to help companies like Ford that did the right thing for Americans.

But we have more work to do. In terms of what the administration's been trying to do with China, are you satisfied with the rare earth minerals that you have access to? I know that you had to slow down production in the past. Yes. Have you been able to secure the amount of magnets that you need? It's day to day.

It's day to day. These high-power magnets, the raw materials from them only come from certain places in the world. They're all processed in China. And they go in your speakers and your auto system. They go in your motors for your wipers and your seats. They're all...

all over our F-150, for example. We have applications in Amofcom. They're getting approved one at a time. We're educating the administration. We're educating the Chinese leadership about how important these jobs in the Midwest are. They're dependent. We have had to shut down factories. It's hand-to-mouth right now.

I'm reading the paper like everyone else. I was very happy to read about London and having a good meeting there because it has a direct impact on our jobs in Michigan and Ohio.

So we'll see. It's hand-to-mouth right now. Jim, thanks so much. Really appreciate your time and congratulations on the race. Thank you. 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 6 a.m. to 9 a.m. 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.

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