Bond Market Tariff Signals and the Outlook for US Growth
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This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Joining us now from BlackRock, Amanda Leiden. If we are quiet now, why are the markets so distressed?

Good morning. Thank you for having me. I think what's been puzzling to us is that we've had, in our view, a trimming of the left tail risk on the trade policy uncertainty. But we're not completely in the clear in terms of the overhang and the potential hit to margins, as you were discussing in the earlier segment.

credit spreads are wider, but they're not reflecting a sharp downturn in growth. As for the yield backdrop, our colleagues in the BlackRock Investment Institute, I know you had a way on earlier this week, we're expecting a steepening of yield curves and a rebuild of term premium along it. I think that's what that march higher in interest rates is reflecting. For mere mortals like me who never look at this stuff,

where do you glean the most information? Is it in high yield dynamics? Is it in short term, SOFR, FANCI, full fit? Where does Amanda Linem turn to learn what fixed income says? - I think the short term funding repo markets are definitely important in times like this. We're staying in very close contact. - And they're healing. - They are.

liquidity is a bit challenged, but they're for sure open and functioning. For corporate credit investors, actually, the new issue debt capital markets has been a really important barometer of confidence during late 2018, during the pandemic, even during periods of the commodity disruption. The freezing of those capital markets during those periods of time did catch the Fed's attention, we know that.

Right now, they're open and functioning just at a higher cost. We're watching that very closely. The other thing at a more macro level is this feedback loop, this really important feedback loop, we would argue, between corporate margins, the layoff rate, which is still low, consumer spending, and overall economic activity. If pressures on margins are enough for corporates to flex that layoff tool more aggressively, we think that could really cause some concern in the broader economic backdrop.

How do you guys feel about credit quality out there in the marketplace? It's an interesting question, Paul. In times like this, the reflexes often just move up in quality, so to speak. We're actually pushing against that a bit. We're actually fine moving down in quality within the investment grade universe because on net, those companies are very well positioned fundamentally heading into this. So we're fine moving into that triple B part of the capital structure. And then even into the high end of high yield, actually in recent years, especially since the pandemic, the

fundamentals of the high end of high yield look very similar to the low end of investment grade. There's a lot more fluidity between that market in terms of issuers. So we're actually fine reaching down in there. That picking up of additional spread is going to be really important given the volatility in the treasury market to kind of cushion those total returns. Amanda Linen with us, head of macro credit at BlackRock this morning. A lot of good conversations. BlackRock's pretty big.

Aren't they? Pardon? BlackRock's pretty big, aren't they? They're large. Yeah, they're on the edge of ginormous. It depends if Jeff Rosenberg's having a good day. The most important quote I've seen here, and I put it out on Twitter this morning. This is from the Governor Waller.

A Tale of Two Outlooks of Speech. This is Waller, folks. In terms of output growth with large tariff increases, I would expect the U.S. economy to slow significantly later this year and this slower pace to continue into next year. What will our listeners and viewers do?

debt instruments do. Right. So that's not priced in to credit spreads to the earlier point. There is some room for credit spreads to widen. Now, the magnitude of that growth downturn, we would argue, has yet to be determined. If you assume, like our colleagues in BII do, an average effect

tariff rate of 20% using the economic rule of thumb that's around a 200 basis point hit to growth and a 200 basis point upward pressure on inflation. The one thing that I thought was really important from both Chair Powell and Beth Hammock's comments yesterday is that it seems that Fed officials are acknowledging that the dual mandate could come into tension later this year as unemployment increases and inflation potentially increases. That's the most important part.

part of, I think, the commentary that I gleaned yesterday. And what that means is that it's not a given that the Fed will cut preemptively if we see signs of a growth downturn. Private credit, I don't... I mean, you got to take...

responsibility for private credit. You're in a fixed income space. What is private credit? I mean, she's a BlackRock. I mean, they rule the world. Private credit, are we going to see some stress there, do you think? So I think just like liquid credit, private credit is subject to the business cycle and a deterioration in growth. We are expecting an uptick, I would say, in liquid credit and private credit in covenant amendments, defaults, that sort of thing. The one interesting point, though, is that in times of private

or in times of liquid credit market volatility, private credit has usually stepped in as a financing source for a wide range of companies when the syndicated markets don't function as they should, not because of actual fundamentals, but more so technicals, which are a broader conversation. - There's no gray hair, excuse me, the blue button, the Detroit Lions blue button. There's no gray hair in the room. I remember that in every single crisis, the Wall Street angst is a surprise.

These newfangled private credit, private equity things, do they have an internal leverage in them that makes them the next surprise? The amplifying channels that were present during the financial crisis when I was actually covering the insurance sector, they're not really there, Tom.

I think one of the maybe understated points on private credit, this is long-term capital that is locked up and is not really subject to run risk, for example, like bank deposits, right? So you're at matching long-term capital with long-term investments. That is going to be a stabilizing factor. Now, we should not be Pollyannish, though, but a credit cycle or an economic downturn will cause losses. But can we, bridging the gap, is that a systemic risk, I think, is a bridge too far. Fed Chairman Jay Powell, he's in the news today, probably not for the reasons he wants to be. Right.

What do you expect this Fed to do over the next coming months? Is there any role they play here to calm the markets, to provide, I don't know, maybe greater liquidity? Sure. So as it relates to monetary policy, we're not expecting them to be preemptive. So we view a rate cut in the first half of this year as unlikely, barring a really sharp downturn in the labor market. So payroll gains $50,000 or less in a couple months. I think they have to...

calm the market when the 30-year hit 5%. We started to hear from Susan Collins and others that they were kind of watching conditions in the funding markets and ready to step in to deploy their very robust toolkit that is left over from the pandemic and the financial crisis. So I do think they're kind of waiting in the wings if market dislocation gets there. But volatility is different than a lack of functioning. And it seems that we're not there. We're not there at the moment. One final question. And it's just as simple as this.

Everybody's going to go in flat over a long weekend. I mean, I get that.

But the basic idea here is who's selling, making prices go lower in bonds? Is it foreigners selling or is it domestic selling? What does BlackRock say? Well, foreigners own around 25% of the corporate bond market. So it's not just foreign holdings of treasuries or foreign holdings of equities. Actually, they're a meaningful participant. I do think that if you think about actually European credit spreads have outperformed U.S. credit spreads significantly over the past few weeks. And so I think

while the U.S. had been a destination for capital for a lot of these foreign investors, that may on the margin retreat a bit. That being said, the U.S. corporate bond markets are still the most liquid, deepest, broadest market. So there's not a ton of substitution available in other markets outside the U.S. Did I do that okay so you're not in trouble with Chris Mead?

I think that's great. I think he did perfect. Your badge will work today. I think so. Amanda Linen, thank you so much at BlackRock here. Financial professionals, did you know MassMutual is more than just insurance? More than protecting what's important today? They have a full suite of wealth management solutions designed to help your clients build and grow for the future.

Their unique open architecture gives you the freedom to offer a range of products that best serve your clients' needs while still offering a feeling of independence. An autonomy that comes with a full support of MassMutual resources, technology, and guidance so you don't have to do everything on your own. MassMutual's compensation often outperforms the wirehouses so you can keep more of what you earn.

It's a feeling that you can build a business that's flexible, rewarding, and truly focused on your client's success. It's a feeling you won't find just anywhere. The feeling is MassMutual. Learn more at massmutual.com slash wealthmanagement. When your company has a position to fill, are you really seeing the best professional candidates?

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CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. Anastasia Amoroso joins us right now. Just absolutely outstanding of having the courage in this crisis, that crisis, to stay in the market. Chief Investment Strategist at iCapital. Anastasia, let's get right to it now. Do you maintain a bull market call?

I don't. I don't. Not at this near-term outlook of timeframe anyway, Tom. And the reason for that is you really have to parse the approach of the administration right now, which to me really spells short-term pain for long-term gain. And maybe we get to the long-term gain, and I'm happy to elaborate what I mean by that, but the short-term pain for now, it seems to be something the administration is willing to stomach. And therefore, as market participants, we have to adjust accordingly.

And the short-term pain, Tom, that I'm talking about is the fact that either the consumer wallets will have to absorb what is this round of tariffs or corporations will have to absorb it. And there's a cost that's associated with moving your supply chain and really rejiggering the way you've done business for the last number of years. So the second core

that we're in right now to me is about this process of adjustment. And yes, the analysts have been cutting earnings. Yes, the S&P 500 is down 14% from the 52-week highs, but I still think this negative revision cycle for now is still with us. So near term, I am cautious and defensive in a portfolio.

Anastasia, I'm just looking at the earnings for the S&P 500 on the Bloomberg Terminal. And just a few weeks ago, they were 12% roughly. Now it's kind of 8%, 9% growth in calendar year 25. Where do you think earnings growth really shakes out for this year?

Yeah, I think it definitely goes lower from here. And the way to think about it, for about a 5% increase in the effective tariff rate, this is by the way, according to Goldman Sachs calculations, you can expect one or two percentage points decline in earnings growth. So if you do the math for the 16% effective tariff rate, which we most likely have at the moment, that probably takes us down another 3% to 6% lower on earnings growth. So the S&P 500 estimates are down about

three and a half, as you mentioned. And I do think there's three to 6% lower to go. So we might end up with roughly flat or maybe plus 2% earnings growth for the year. So the good news with that though, is that the markets move ahead of that. And the fact the S&P is down that 14% from the 52 week highs, it does suggest the market is already prepared for the cycle of downwards revisions. But

Historically, when you look at investment periods like this, it is not a great backdrop for risk assets when you have a cyclical slowdown and negative earnings revisions. What happens if the tariff crisis is a lesser crisis? If somehow the magnitude pulls back, the president capitulates, whatever. What will happen to people's 401k if that happens?

Right. Well, I guess we saw the preview of that, Tom, last Wednesday when tariffs were reversed. And this is why it is a precarious time for investors. And the way that I do position this right now is, yes, you have to hunker down and prepare for the short-term pain in your existing portfolios.

And at the same time, you have to think of this time if you are a long-term investor as a moment of opportunity for a long-term investor. So I would really sort of decouple. If you have an existing portfolio, you stay defensive, you lean into stables, you lean into utilities, you lean into private credit where you can get paid. But if you do have cash on the sidelines that you've been waiting to deploy, if you can take a 12-month plus time

horizon. There we go. That's it. That's the Anastasia we know. It can't be bearish for too long, Tom, because obviously history is on our side. Most of our guests have a 12-minute horizon. It's good to have Anastasia out of 12 months. We're going to continue with Anastasia Amoroso here of ICAP in the time of crisis. You know, we make jokes about it, folks, but

You know, I really have to say, boy, there's a lot of tension out there. Sure. Absolutely. People just exhausted. That unknown thing, yeah. And our job is to keep it light. But this is serious stuff. It's great to have someone like Anastasia. Put the bat down. With the market opening, Lisa Mateo. I can't help it. Good morning, guys. Well, shares have been mixed before the bell. Slump in health insurance really weighing on sentiment. Right now, the markets are open. So let's get to the feeling this morning. S&P 500 up 3%.

Three tenths of percent, 20 points, 5,296. We have the Dow down a percent, 482 points, 39,188. And the NASDAQ, that's up about half a percent, 92 points, 16,398. The two-year yield at 3.77%. That's little change. The yield on the 10-year, 4.29%. And that's up about two basis points. We have the Bloomberg Dollar Spot Index is little changed right now.

And checking in with a few stocks that were really moving before the bell. Now at the open, we have United Health down 17%, Hertz up 27%, and Eli Lilly up 13%. That is your Bloomberg opening bell report. Paul and Tom. Do you think people are making money with that, or is it just about a lot of losses? Yeah, I think across the board we're seeing the median stock down much more than the overall index.

Anastasia Amorosa with us with ICAP. Anastasia, you were so great in a bull market, and the theme was buy America, buy free cash flow, buy the MAG-5, the MAG-6, the MAG-8, whatever. Is that still in place? Can you own Apple this morning?

Well, I think some of it is still in place, Tom. And coming into the year, we did worry about the MAC-7 stocks. We did worry about semiconductors. And some of it was because of the big tech regulation. Some of it was because of this raft of tariffs and export controls that we expected. So for the time being, the first place I would step into would not be the MAC-7 stocks. And semiconductors, for example, will likely be challenged if you have

this cyclical slowdown in the global economy. They just get caught up in export controls and the overall slowdown. So I don't necessarily think that that part of it right now is the first place to be. They're not immune from U.S. economic slowdown either. But

I do think that, as I mentioned before, you want to align yourself with the direction of policy right now. And the direction of policy is focus on domestic companies who are sourcing their cost of goods sold here in the United States. And they're mostly selling to the U.S. consumers. So that's why sectors like utilities and real estate and consumer staples, for example,

have outperformed and by the way also financials held up as well so that's why I would focus there right now but I will say Tom that you know if this administration succeeds longer term and if this results in deals that brings production to the United States if this results in a new world order we actually

tariffs and non-tariff barriers do drop, then maybe we do have this onshoring investment boom. And so you have to allow for the possibility, especially given the tax policy in the US, which is so favorable. She can't be negative.

I mean, you know, she's not. Anastasia Amoroso, thank you so much. With iCapital, greatly, greatly appreciate it. This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple CarPlay and Android Auto.

This is a really important conversation. I did a chart years and years ago on the Bloomberg, which was the decline of manufacturing employment in America. And there's ebbs and flows to it. But if you run it on a log axis, frankly, folks, it's a really smooth, just conversation.

Technological-driven decline in employment is the population of manufacturing in America. Jay Timmons is the CEO of the Group for Manufacturers, the National Association for Manufacturers. As we mentioned, he's out of the Ohio State. He's done a lot of work for various political types of North Carolinians, driving the voice of manufacturers. What's the number one thing, Jay, the president gets wrong about?

about manufacturing in America, all the stereotypes that are out there. What's President Trump most get wrong? You know, I think that

What a lot of Americans get wrong is that manufacturing is a very modern technology-driven operation. And it is not the manufacturing that you might think about from your father or grandfather's days. This is something that has a different type of skill set that's required. And so manufacturers right now are investing a lot in training that next generation of the manufacturing workforce. I saw a chart yesterday.

that showed the complete lock-in as philosophy folks of individualistic America, the complete failure of America to retrain the workforce after the last 40 years. Lighthizer among others has been great on this. How in God's name do we start acting like Europe and actually retrain manufacturing types put out of work?

Let's not act like Europe completely when it comes to manufacturing, but I agree with you that they have some really good apprenticeship programs. And we're pretty proud of our apprenticeship work that we do at the National Association of Manufacturers through the formerly known as the Toyota Fame Program. So we were spreading that across the country.

I think what we really need to focus on, though, if we truly want to grow manufacturing investment here in the United States, we've got to make things less expensive here in this country. So by that, I mean our tax policy. 2017, those tax reforms, they were, as President Trump said, rocket fuel for manufacturing investment, hiring, wage growth in our industry. Those things are expiring.

And we need to get those renewed. And so we're waiting for Congress to do that. The regulatory burden is another big cost driver, about $50,000 per employee per year in compliance costs for manufacturing. Should we do credits like LBJ a million years ago? Just do direct credits to manufacturing? I think...

Well, I think tax policy is actually, that would help drive that investment, right? So if you have lower tax rates and you're able to compete against the rest of the world,

That's really where I think we want to settle. Jay, what types of manufacturing jobs do we really want to bring back to the U.S.? Do we want to bring textile mills back to the U.S.? What do we want to bring back? So I do think that the narrative that the manufacturing workforce is in decline is actually a false narrative. We're right now at about 13%.

approaching 14 million manufacturing employees. That's been pretty stable for the last decade. - It is stable in the last six, seven, eight years, I'll give you that. - Yeah, but we want to grow it, right? We want to grow that here. And so those jobs, and I appreciate the question, those jobs are really very different than in the past. So highly technical jobs. So we want people to be trained with a very different set of skills than perhaps

even five, ten years ago, right? And so to your very first question, that falls on manufacturers to invest in training their workforce. And I'm pretty proud of what we are doing in the sector right now to accomplish exactly that. But we need those economic policies that help facilitate that. So it seems like...

You know, a lot of folks are now questioning the value of a college education. And a lot of folks are saying, boy, trade schools are really what we need. Talk to us about trade schools. You're just so lucky to have an Ohio State person here. Come on.

Talk to us about the trade schools are they're becoming extraordinarily important in the manufacturing sector. But I also want to say that we have something for everyone in manufacturing. You know, probably about 45 percent of the jobs in manufacturing require nothing more than a college, pardon me, a high school degree.

But there are positions that require a four-year degree or technical training, even advanced degrees, all across the board. I want to go to Paul's emotion, and I'm going to double barrel here. The Financial Times, I'm sorry, I can't cite the author, it was one of their great newsletters.

had that wonderful survey three, four days ago. Everybody wants to bring Jay Timmons' world back to America. More manufacturing jobs, but a huge body of Americans don't want to work in manufacturing. There's a poll, spoke volumes. But the videos that have gone viral, which is fat people like me sitting in a machine doing mundane factory work, that's the stereotype Paul was just talking about.

I mean, the fear is you got some 400, 600, 800 people outside Hong Kong doing make work. Do we want to bring those jobs back here?

I want to grow the types of jobs we have here in this country. And I know it sounds kind of trite to say, but I love opening up the doors to manufacturing facilities for young people. My daughter, Ellie, is traveling with me this week. It's her spring break. And we've been able to go into a couple of plant floors. And I think

her eyes were opened about the possibilities in manufacturing. Those jobs are pretty exciting. They change constantly and they provide really a lifelong. Did President Biden advance that with all his legislation? I think that the Chips and Science Act was very important for this country. I think that the investments that we made in infrastructure were very important for this country. And in the IRA bill that was passed,

There were some policy provisions that we thought were very important as well. So look, I mean, manufacturing changes. And I'm not going to sit here and say that, you know, manufacturing is a Republican industry or a Democratic industry. It's an American industry. And when manufacturing succeeds... Come on, you've been in the trenches of the Capitol. I mean, what you just said, is that app that Republicans and Democrats are on the same page?

I think every single person I talk to, I don't care if they're Republican or Democrat, they want to see manufacturing succeed. Now, having said that- Even people that went to the University of Michigan? That's still out for debate. But listen, I understand that there are different

philosophies on how to accomplish that. But I can tell you from what I, when I talk to manufacturing leaders, what they say is reduce the cost of doing business here in the United States and we will flourish. And when either side or both sides focus on that, that is exactly what we'll see in this country. The cost of production, the cost of manufacturing in the U.S.,

My understanding from 60 years on this planet in business education is that it's higher here, materially higher here than the rest of the world. That's why the jobs went to other places around the world. Can the U.S. compete on a cost basis, manufacturing-wise, do you think? Yes, they can. And how do we do that? And listen, some people will say, oh, well, the cost of labor. You know what? Don't give me that. I want to pay our people more. I want our people in this country to be paid more. If we're going to do that...

That means that we've got a lower cost that we actually have control over. And I sound like a broken record, but I'm going to go back to tax reform. 2017, those reforms were rocket fuel. And now we have members of Congress saying, well, maybe we don't have to do quite as much as we did before. Maybe we can raise taxes on small businesses. No, that's not going to work. That's just not going to work. What type of jobs, what types of manufacturing would you like to see

in the US that maybe we're not doing right now? - Actually, we're doing almost everything. I just wanna do more of it. - Can we make an iPhone here versus Foxconn in China? - I believe that those are the types of jobs that you'll see coming here with the right policies, yeah. - How do you respond to-- - Technology, production. - In the last couple days, they've reduxed the Trump Arnault visit to Texas to try to make handbags for Louis Vuitton, whatever, leather projects as well.

How do you respond to the stereotype Americans can't do the fine work

that we get out of Asian manufacturing and employment. I'll give you one example. Gretsch, now owned by Fender, makes white Falcon guitars in Japan. They're exquisite. Nothing was ever made like that out of Michigan years ago. How do you respond to the fact Americans can't do the fine manufacturing work of Asia? Well, maybe we should do that in Ohio.

But it's a big part of Ohio, right? No, I'm just... Listen, I think Americans can rise to the challenge of literally anything in the terms of manufacturing. But I do have to say this. We can't do everything here in the United States much as we would like to, but we can do a whole lot more. Right now, we have 500,000 open jobs in manufacturing. And to your point...

Are people really inspired to go into manufacturing? That is the job of our manufacturing institute to make sure young people see. - Well, come on, pay is the solution there, right? - Well, pay is the highest in any sector of the economy. - Okay. - Right, the average pay. - I must ask, how do you respond to job loss in Windsor, Ontario and job loss in Michigan in manufacturing auto? I mean, this is nuts what we're going through right now. - Some of that is going south.

Right. Where there are lower costs of doing business. And some of that is demand. And some of that is additional potential costs like tariff policy that could have a negative impact on our ability to be productive here in this country to lower the cost of production. We're hearing, you know, the whole discussion of tariffs are creating a lot of uncertainty in the marketplace. Are you hearing that from the manufacturers you talk to every single day?

Yeah. I look. So they just are they pulling back on capital investments? I think that they're very to be to be very blunt about it. I think manufacturers are very concerned. They want to see progress. The president has given himself 90 days. I don't know what that's down to now, about 80 probably left to negotiate deals from around the world. And we we are very hopeful that we're going to see some policies that are zero for zero tariffs. I understand the Italian prime minister is proposing exactly that right now for the EU.

But we also have a couple other issues. We've got critical minerals, critical inputs, like critical minerals or machinery for shop floors, chemicals. That we can't do here right now. We've got to figure out a way to bring those into these discussions as well. And then incentives, by the way. Is there bipartisan support?

to fix, say, pharmaceuticals are made in China or Europe or rare minerals have been co-opted by China. I don't see the bipartisan support. Well, what I hear is we want to make sure that our supply chain is strong and is kind of unbreakable. If you think back to COVID,

our supply chain was broken. And so we weren't able to access things like PPE. We were, as an organization, we were calling the entire world to get PPE here to New York. Lisa, put up your back. We got to go. But Jay Timmons, this is a manufacturing at your best. This is an Anthony Volpe, American-made torpedo bat of the New York Yankees. I wouldn't ask you if it was a torpedo. Yeah.

That is fine American manufacturing. Yeah, exactly. Right? That's for the great American game, baseball. There you go.

There you go. Yeah, let's hit it out of the park. We're going to hit it out of the park, as the Yankees did last night. Jake Timmons, thank you so much. She's CEO and president of the National Association of Manufacturers. Can't say enough about that. Financial professionals, did you know MassMutual is more than just insurance? More than protecting what's important today? They have a full suite of wealth management solutions designed to help your clients build and grow for the future.

Their unique open architecture gives you the freedom to offer a range of products that best serve your clients' needs while still offering a feeling of independence. An autonomy that comes with a full support of MassMutual resources, technology, and guidance so you don't have to do everything on your own.

Mass Mutual's compensation often outperforms the wire houses so you can keep more of what you earn. It's a feeling that you can build a business that's flexible, rewarding, and truly focused on your client's success. It's a feeling you won't find just anywhere.

The feeling is MassMutual. Learn more at massmutual.com slash wealthmanagement. When your company has a position to fill, are you really seeing the best professional candidates?

Sure, you get plenty of resumes, but you may be missing an untapped resource. Ideal candidates not currently job searching. People not actively looking, but who may be open to the right opportunity. It can be the difference between a good hire and a great hire.

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com and see how the recruiters, with a deep understanding of the experience and expertise you need, can find the right fit for your business. After all, you deserve to see the best candidates, both active and passive. Whether you're looking for a long-term or project-based professional, you're going to want to look for a talent that's going to help you.

Specialized Recruiting Group is ready to find the talent you need. Go to srgpros.com right now to get started. That's srgpros.com. Specialized Recruiting Group, a tailored approach to professional hiring.

This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal. Joining us now...

is the woman with the greatest job out of college known to mankind. Here's the way it is, folks. You're at home and you're, you know, you vote right down the list, GOP, and your daughter or your son announces that they're to the left of Bernie Sanders.

So they want to go out and get the job in America. Allie Martell has the job out of George Washington University with Blue Rose Research. Allie, how did you get the job every kid to the left wants in America? How did you actually get this plum position wrapped around Bernie Sanders?

Well, right now I'm working for a company called Blue Rose Research, which is an organization that works across the entire democratic and progressive ecosystem. But to start, I am a data analyst by trade. And that's something that I had to self-teach through things like Excel and

and online courses and also learning a little bit on the job as an organizer. - Right. - No one path to becoming a data analyst, but it was a fun path. - I set her up for that folks. She's fluent in Python. The way you get into politics in America is to computer program. Allie Martell, right now there was no Python going on in Utah for the left.

We saw the gentle lady of the Bronx and the gentleman from Vermont get in U2-sized populations. The arenas were packed in Utah. Allie, you know there's 12 Democrats in Utah. How did that happen? - You know, I'd love to point to a chart that is in the retrospective that our team put out that you mentioned, where we look at overall issue importance to voters.

And when you look at that chart, you see something very clearly, that voters care more than anything else about their day-to-day material reality. They care about the economy. They care about the cost of living. They care about the cost of their health care. And so that's something that we find. Not only do voters really care about it, but they're actually generally aligned with overall the Democratic Party on a number of economic-focused issues. Voters agree with us that we need to –

curtail corporate price gouging that we need to make sure that the ultra wealthy are paying their fair share so we have some really persuasive on this subject matter and so but at the same time if you look at that same chart you also see that Republicans still have a trust advantage on these issues and so there's a branding issue here but there's a lot for us to be working with because at the end of the day a lot of Republican voters do actually agree with our

economic platform. Okay, well, let's keep score here, Paul, to be clear. House, Republicans won. Senate, Republicans won. White House, Republicans won. That's the score, Paul. Go. Ali, talk to us about the Democratic Party today. Where is it? Since Election Day, we have heard nothing from the Democratic Party. President Trump has taken all the oxygen out of the room very successfully. Where's the Democratic Party today?

yeah you know election night was obviously tough for the democratic party at large there were a number of victories down ballot that are obviously getting overshadowed by what happened at the top of the ticket but you know it could have been a blowout red wave that night and it wasn't there were a lot of victories in the house the senate the state legislature ballot initiatives um but obviously what happened at the top of the ticket was devastating and it still wasn't enough

The trends that we're looking at, one of the things that makes it tough to reflect on is that there were a number of losses across the board with a number of different demographics.

Trump had already been making inroads with non-white voters for some time. We'd already been seeing increased levels of educational polarization where college educated voters were becoming more Democratic and non-college educated voters were becoming more Republican. The thing that we were seeing specifically in 2024 that, you know, we're kind of talking about right now as a party

When we look at who Biden won in 2020 that he had started to lose over the course of his presidency, those folks really had one big thing in common. They skewed towards being less politically engaged

less likely to view politics as important to their identity. And so that is new for the Democratic Party. And it's something that we're still- Okay, Allie, I got time for one more quick question here. We're going to have you back. This has been really, really good. Allie Mortel, Matt Iglesias writes for Bloomberg Opinion, Democrats need more combative centrists. Where are they?

Right now, it is fair to say that voters are looking for somebody to step up and push back on some of the things that Trump is saying that he's going to be doing or doing that is going to hurt their day-to-day lives. You know, there are some potential real vulnerabilities

from some of the policies that the Trump administration is getting behind. And so people are looking for a change. There's a reason that global incumbents, not just Joe Biden, have been losing left and right in this post-COVID economy. People are unhappy with the status quo. So I think that there's some merit to that.

Ellie, we've got to run. Thank you so much. We'll do this again. Ellie Martell with us at Blue Rose Research. This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple CarPlay and Android Auto.

auto with the bloomberg business app you can also watch us live every weekday on youtube and always on the bloomberg terminal whitney tilson joins us now and if you just need to know one attribute of whitney tilson i'm sorry it is the most coveted mba distinction out there it is a baker scholar real deal university just study

years ago, were you surprised when you were a Baker Scholar? Like, were you sitting in your dorm room staring at the ceiling and they said, "Whitney, good news, you're a Baker Scholar"? Is that how it works? Well, it's just based on your grades over two years. It's top 5% of the class, and I'd been getting mostly ones is what they call As there. And so it wasn't completely unexpected, but yeah, it was a real honor.

The race to me is original in that, for example, with Scott Stringer with his huge liberal progressive Jewish support from Bella Abzug and Jacob Javits back, it seems like the fabric and character of our political system is breaking. Who do you represent in this race?

Fed up New Yorkers. I got into the race because I saw a bunch of career politicians. This was back after the election in November. Including Scott, to be fair. Absolutely. 30 plus years. And I think the...

New York City is being poorly managed. It's headed in the wrong direction. And I didn't see any real change candidates in the race. And I saw how well this city was run and how well it did under Mike Bloomberg. Sort of funny here sitting on a Bloomberg show, in fact. And in the 11 years since he left office under two career politicians and looking at a field of more career politicians, I think New Yorkers are looking for a change agent. And I'm the only one in the race.

And of course, Mike Bloomberg is the founder of Bloomberg LP and this radio apparatus here. Whitney, what's your platform? What do you want to do here?

- Mostly get the city's economy growing again. We are an economic powerhouse. You mentioned how important New York is to the country. It's 5% of US GDP, just in the five boroughs of New York. And when I go to all the mayoral forums and talk with all the career politicians and debate the issues,

All we're debating is how to spend the tax dollars and which city program they would fund and create more spending programs. And I'm a business person, and I understand our tax base comes from our economic base, from wealthy individuals, people investing, growing businesses. Everybody wants rising wages. The way to get there is growing businesses, hiring more

people. So I think we can grow this economy by 50% in the next 10 years. That's about 4.1% compounded. How does someone like Mayor Tilson speak to the constituency of someone we've had on many times, and that would be Greg Meeks of Queens? He's the leading Democrat of Queens. There's all sorts of constituencies under Congressman Meeks within Queens.

How do you speak to the machine if you're an outsider? - Right, I'm going directly to the voters. There is no path for a first time candidate, outsider like me, to win a traditional race. But keep in mind, only 26% of eligible Democrats voted in the primary last time.

I think the other 74%, a lot of them didn't vote because they just saw different flavors of career politicians. So I've got to go around the machine directly to the voters with a message of change. And if you look at voters, 75% of New York City voters think the city's headed in the wrong direction and clearly want change. And so I've got to position myself as the change candidate and go directly to them. Do you see a need to change the tax system

in the city of New York? Well, I'm the only candidate to my knowledge who said I will not be raising taxes. The number two candidate in the polls after Governor Cuomo is a 33-year-old socialist named Zoran Mamdani. And he just came out yesterday with an enormous tax plan to raise corporate taxes, to raise taxes on the wealthy in New York. And we already have the highest tax rate in the city, excuse me, in the country.

And I think the traditional tax and spend far left plan would be devastating and cause further flight of our wealthiest citizens who pay the bulk of our taxes as well as our business base. What investment can we grow? People don't even know that there's a whole manufacturing heritage of the boroughs, Brooklyn and

and all there's the romance back to 100 years back or so. If there is business investment here, what kind of business investment is it? - Well, right off the top real estate, we have an acute housing crisis in this city, a 1.4% vacancy rate, the highest rents in the country. We're losing our working class who literally can't pay their rent.

So, but we've erected zoning codes, environmental rules, just a stifling process to get anything built, residential and business construction as well. So that would be a huge area. - Do you find evidence of support among Democrat traditional politicians for this idea we gotta fix the housing crisis in America? Or do you feel like a lone voice?

Actually, every candidate in the race is talking about this. But most of the traditional career politicians are falling back on their traditional nostrums of government spending, using federal dollars to build subsidized housing. And they generally speak disparagingly about those evil landlords exploiting tenants and evicting them and so forth. And my view is the opposite. The

with federal government cuts likely on the way.

we're going to have to tighten our belts. And the only way, the only big pool of money to do this kind of investment has got to come from the private sector. And we need to make New York an attractive place to invest. So I'm a kid. I'm over in Switzerland. It's four Swiss francs to a dollar. Swiss francs appreciate it a little bit. And I'm sitting over there across the valley, Val-de-Rive, Val-de-Rive, and I can see Whitney Tilson climbing the Matterhorn.

I can see him in the binoculars, just like the Disney movie that we all grew up with. What's it like not in the Disney movie, but Whitney Tilson, what's it actually like to climb the Matterhorn?

It was magnificent. I've climbed the Mont Blanc, the Matterhorn, the Eiger, and then here in the United States, really one of the iconic climbs of all time was the Nose of El Capitan, which was featured in the movie Free Solo. But I did it with ropes and a guide. So, you know, if I slipped and fell, I wasn't going to die. It wasn't like the Disney movie. Yes.

So, you know, in some ways what I'm doing here running for mayor is a seven month extended version of some of the extreme climbing and other events I've done. What's been the biggest surprise in this effort so far?

To the upside, just what an incredible city this is and getting out into every corner, how incredibly diverse this is. Our immigrants, our communities are such a strength and an asset. And I think it's terrible that they're feeling terrorized right now.

It's been hard breaking out and getting my name out there. Do we need more police officers? Scott Stringer was adamant we need more police officers, do we? Yes, he's right. Interestingly, also in the area of housing, but also in the area of police, a lot of the lefties are now tacking toward the center because New York voters are pretty upset. And they spoke in the last election. That's the big thing.

Absolutely. But we're at a 34-year low in the number of police officers right now in New York City. Not surprisingly, you know, crime's up 30-plus percent, the major felonies since pre-pandemic. And so we need to get more officers. And thank goodness we've now got a police commissioner, Jessica Tisch, who's managing them well. Next month, you're going to take Lisa Mateo with you. All right. Whitney Tilson, thank you so much.

in the mayoral race. We'll have many other mayoral candidates in with us here in the coming weeks. This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple CarPlay and Android Auto.

Auto with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal. We're going to do the newspapers right now. It's a nice diversion from everything going on. Divert us, Lisa Mateo. Okay, so we'll stick with sports since we got the whole bad

thing going. We'll go to football, though. We've been talking about the transfer portal, right? NIL deals. Well, what it's actually doing, it's bringing into a popular college football tradition at a lot of schools. And it's the annual spring football game, right? It's this intra game, you know, intra squad scrimmage. It's huge, right? Because you had like University of Nebraska had more than 60,000 people like come out to this.

But the thing is, it's dying down. Like, University of Nebraska is not doing this year. They're one of 18 programs from major conferences decided to just not do the event. Few reasons why, okay? They canceled it for the element of surprise, okay? Others because the fears of players getting injured. But the big reason is, yes, the transfer portal and NIL deals. Coaches are getting paranoid that they're going to lose players by putting them out in such, you know, like a big platform because the roster is just so unstable. Exactly.

I'm a hack here, I have no idea. It's become pro sports, period. - Totally, totally. And every coaches, all the coaches are saying it now. So I think, just what I listened to some of the experts here, you have to have some type of regulation, some kind of oversight here. I was meeting with Coach K last week down in Duke. I said, "Coach, why don't you become the commissioner of college athletics?"

You fix it. And he said, no, no, no, no, no. I didn't want any part of that. I'm taking care of my grandkids. Let me ask a dumb question. Who's the giant for Duke? Cooper? Cooper Flatt. Does he get a degree? No. No, he's not even on campus anymore, probably. Why are we doing this? Although he had like a 4.0 GPA. Of course. I mean, he was an incredible kid. But no, he's going to... Who's going to give him a B? Next! Next!

but it just goes to show you the impact that it's having, you know? Okay. So Tom, I know you love space. So I found this story. Okay. Is there a life beyond earth? It could be possible. This was in the New York times. Okay. Scientists have been looking for it. Mars, Venus, Mars,

but now researchers are offering what it says the strongest indication of extraterrestrial life okay it's not in our solar system but it's a massive planet it's known as k218b oh it orbits like a star 120 light years from earth not sure how long but it's far

But what they're saying is that they did an analysis of the atmosphere and it shows that this molecule that on Earth has only one known living source, like living organisms, marine algae. So what they say is that if there ever is extraterrestrial life, it's gonna take a long time to come, but it could be proof that it's covered with a warm ocean. - 142 light years? - It's crazy. - All they gotta do is go in Afterthought's bathroom and look at some of the makeup that's five years old.

sephora from five years ago that old that's signs of new life but you never know we may not be alone out there so watch contact jody foster's wonderful movie yeah great movie um okay so i got a problem with this next story oh you do really okay you're not a fan of this okay the stories in advance i do i know i know a guy he's got the inside info um okay so costco has their kirkland signature brand which

Which I like. But it's bringing customers to the beer aisle. Okay? So they had the wines. The spirits did well. The beer never really did well. But now this new beer, it's their signature Hell Style Lager. It's a Costco-only release from Deschutes Brewery in Bend, Oregon. It's a 12-pack priced at $13.99. Wow.

- Wow. - You can't beat that. - So Costco Kirkland beer. - Yes, Costco Kirkland beer. So it's made at this particular brewery. But why they're saying it's a win-win is because the way they go about it. So Costco partners

with them to eliminate the sales and marketing expense for the brewery. So the brewery gets this expansive shelf. She knows what's going on. But it's cheaper for the consumer that way too, and that's how they can order it for under $14. This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, and anywhere else you get your podcasts.

Listen live each weekday, 7 to 10 a.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.