Equity Rally Continues as Tariff Pause Continues
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Bloomberg Audio Studios. Podcasts. Radio. News. 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. We start strong with, frankly, folks, the most important interview of the day.

Asset allocators are a dime a dozen. Every firm's got 10, 20, 30 people loving. They want to get out there and allocate your assets. Steve Chivarone is at Federated Hermes, and he does it with a shocking clarity and directness. Are we over-diversified right now, oh wise one?

Depends on where you're investing. I think in the U.S., I think investors are about right. I think being overweight the U.S., I think that home bias is actually appropriate right now. And I think the non-U.S. equity outperformance of the first half will prove to be relatively short-lived. I was in... You say the worst is behind us. Worst of the tariff uncertainty. Yeah, I agree. I think it is. And I think you're in a de-escalation phase there. I wasn't surprised by the president's

kind of slapping around of Europe on Friday. There was a little bit of complacency, I think, both amongst the negotiating parties and the market that, you know, once he had de-escalated, that was it. And you could kind of slow walk it. So he needed to kind of shock the system a little bit. I also wasn't surprised when that had its intended effect and he pushed back out to July. But Tom, talking to investors outside the United States,

they were shockingly under-allocated to the U.S. You know, you have folks on the mainland with maybe only 20% in U.S. equities, which is 60%, 70% of the global market cap of the kind of MSCI world or MSCI all-country world. And so I think there's still buyers to come into this market. And I think the most likely outcome here is a slow growth

Soul-crushing grind higher in U.S. equities that will pull the skeptics in over the course of the year. Soul-crushing grind. That was on Emerson Lincoln Palmer's third album. Exactly. It's a great song. Soul-crushing grind. What's the Federal Reserve going to do here, given some of the economic data we're seeing here and some of the, I guess, some of the uncertainty from the tariff discussions? You know, look, I find some of the rhetoric and certainty out of the Federal Reserve

A little surprising. I get wanting to be patient. I think that's right. I think if you think thoughtfully about any impact of tariffs,

the impacts are much more severe on growth than they are inflation and i think you have an economy that is slowed and a consumer that's under some pressure so i i hear them talk about patience i think they're going to cut this year they just don't know it yet you have an advantage of adults at federated how are people old and grizzled i mean you're doing asset allocation and that and your clear memo is by american by technology is that what your portfolio managers are doing that's

That's what we did this cycle. I mean, you know, we said at the beginning of the year I was on this show,

that we were strapping ourselves to the mast. We weren't going to get caught in the emotional turmoil and that we wanted to add to equities through the distress. And we did. And where we added, Tom, was in large cap growth. You got the MAG-7 and the large cap growth index somewhere around six multiple points below its three-year average. You don't pass on a six multiple point discount

with companies that are generating the kind of cash flow and growth that those companies are. And so that was the buy this time around. I'll tell you, I still think, and I know it's been waiting for Godot, but I think the second half story is going to be ones where small caps and cyclicals assert themselves as well. So what do we, we had the U.S. debt downgraded. I mean, does that kind of call into any question

recession risk here? I mean, or are we just kind of a slowing economy, grind higher? As goes the U.S. consumer goes the U.S. economy. And as goes the U.S. labor market goes the U.S. consumer. You know, and here's the thing, and here's why I don't buy into the kind of recession views.

Companies had a wonderful excuse if they wanted it to lay off workers last month. They had tariff uncertainty. They had growth slowdowns. They could have slashed their guidance. They didn't. They pulled it in some cases. And they didn't take it. And I think this is the lesson of 2020 when folks, you know, companies fired folks and then it took them three years and 30% more to hire them back. And so unless you see that labor market break, I don't think you have recession on the table.

I'd also say, Paul, that there's this wonderful romanticism around the bond vigilantes, and that's what's pushing yields up. But that doesn't explain German bond yields. That doesn't explain Japanese government bond yields. And if that really is a story of three separate bond market issues, would you rather buy...

the Bund when they're raising debt to buy bullets, or would you rather buy the U.S. Treasury where they're raising debt to stimulate? I don't care. The reason we had you in is I want you to talk about, and this is a new way, they did this the other day, they had a fabulous meeting with your good competitor, PIMCO, and we talked about all these new derivative instruments, Federated and your good competitor, PIMCO, Fidelity and others are incredibly vanilla.

You avoid the derivative plague. Right now, we've got lots of buy-write strategies. Everybody's got a buffer thing going in that. Tell me about asset allocation and the solution being all these gimmicky investments. Yeah, look, I think for very specific client needs, whether it's enhancing income or you've got real risk aversion, derivatives can play a role. Over the long run, in terms of building sustainable assets

quiet wealth, if you will. The story is about staying invested. Everything around that is just behavioral. It's about staying invested. So the question is, how do you understand the client? How do you understand what their risk tolerance is and then build them a long-term asset allocation? And then be tactical enough, Tom, that you don't whipsaw your way out of returns or

But you provide the client with enough comfort to say, okay, we're not just sitting here blindly. Because at the end of the day, the story is really simple. Just because it's difficult doesn't mean that it's complicated. Investing is difficult because it's hard to stay invested. It's hard to stay unemotional. But it's not nearly as complicated as we make it out to be. That's just us.

making ourselves feel better that it's hard. See how he gets, he just, he just ramps it up there. Sure. He gets totally mental engaged. Like that was brilliant. I think we're going to use that on single best idea today. Steve Chivarone. Thank you so much. That was federated. What you just heard there, folks. 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 listen live on amazon alexa from our flagship new york station just say alexa play bloomberg 11 30. he is definitive as a public service of the nation nicholas burns joins us now uh with his work across our state department our diplomacy for decades culminating and extended to her duty as ambassador to china

We welcome Nick Burns of Wellesley, Massachusetts this morning. Nick, I've loved great about your eight-day work week

in China was there you would be working, doing the diplomatic thing in Beijing, and then you'd get on the train. Here's a caption, folks. Most people in China, folks like me, we go to Hong Kong, Shanghai, two blocks of Beijing, and we say we went to China. Nick Burns has done further. We crossed the Yellow River at Henan at 191 miles an hour on the high-speed train.

What do we most get wrong, Nick Burns, about the inner China that you experienced? Well, good morning, Tom, and it's a great pleasure to be with you after a long, long stretch. You know, China is a multifaceted society. On the one hand, you have the Communist Party of China, major competitor of the United States in military tech.

economic, human rights grounds. So I had a kind of a combative relationship at times with that government. And we had to be aggressive in holding the line. On the other hand, the other job of being an ambassador is not just to the government of China, but to the 1.4 billion people of China. And I found the Chinese people outside the Communist Party to be extraordinarily entrepreneurial,

to be very, very hardworking, creative, innovative, and very civil when you met them. My wife Libby and I didn't encounter any direct anti-Americanism when you're talking to the Chinese people. I encountered a lot of it when I worked with the government of China. And so we decided that, you know, we had to travel in China to get to know party secretaries, governors, business leaders, universities, and we went most often by high-speed rail because they have

a magnificent train station. And that's how you get to know people on the train and see the countryside and get to understand the country. Do we have a knowledge behind those red doors in Beijing? Is it like when we were with the Russians before the collapse where our intelligence was lacking? Is there a mystery to Xi and the government? Or do we actually have a handle on what's going on?

Well, I'd say two things. First, you know, we had daily contact with the government of China. And I spent a lot of time with the Chinese leadership, with ministers, for instance. And so you do get to know them. But the party, the Communist Party, which is so powerful right now, is very good at being opaque.

And Chinese politicians, political leaders do not reveal the private side of them, of their lives as they do in the United States and most of the rest of the world. So there is a lack of transparency there. And sometimes it's a guessing game, but we did our best, obviously, in working with them to get a sense of what their motivations were. You know, we were, as I said before, I figured about 80% of my job was competing with China on behalf of the United States and maybe 20%.

was working on climate change and working on fentanyl, which is a critical issue for us, and on the cooperative side. And so this is not an easy relationship for the United States. Nicholas, how do you think that the Chinese government wants to proceed with the U.S.? Do they want to engage with the West, or are they comfortable in what's kind of becoming, I guess, a new

Cold War, certainly a technological Cold War between China and the West. How do they want to approach it? That's such a fascinating subject. On the one hand, you know, given the fact that China has the world's largest export economy and manufacturing economy, they have to have ties with the United States, Japan, Korea, and Europe, because that's the market for their economy, and that keeps their GDP growth rate up.

So there is a sense, a part of China Inc, which wants to be integrated with the rest of the world. But you're right. I mean, what has emerged over the last several years is a very close strategic partnership between China and Russia.

and at times with Iran and North Korea as well. And that's a formidable set of countries. What they're trying to do, what Xi Jinping is trying to do, is offset the real strength of the United States in global competition. And that is that we have alliances in the East Asia with Japan, South Korea, the Philippines, Thailand,

and Australia. These are treaty alliances. And that gives us a weight and leverage over the Chinese that they don't have. And so they've tried to offset it with these other relationships. But Russia and North Korea and Iran are not the economic powers that Japan

certainly is, that India is as a partner of the United States. So I think that's our big advantage. Maybe that's the number one lesson that I learned or relearned as ambassador to China. I'd also been ambassador to NATO, that we have to count on our allies and we have to be respectful of our allies and build those relationships. That's the best way, I think, to deter the Chinese. Well, that does not perhaps...

is the view of the Trump administration in terms of how the Trump administration is treating U.S. allies here. Does President Xi and the Chinese government view that as potentially an opening to weaken the U.S., I guess, influence globally?

I think they do. You'll remember after April 2nd, when President Trump made his major tariff announcements, the Chinese were very quick to say to the Japanese and South Koreans in particular, let's all get together, the three of us, China, South Korea, and Japan against the United States. Of course, Japan and South Korea would not have it. But they're seeking, the Chinese are seeking those openings. And as the United States in a way diminishes,

Our faith in our alliances, the Chinese see that's a real vulnerability for the United States. As we demolished USAID, the US Agency for International Development, I think it was a major mistake to fire 8,000 people in two weeks. That doesn't make much sense. The Chinese swooped in and began to tell countries in the South, listen, if the United States is not going to work with you,

or help you, we will. And so we're in a battle for global influence against China. There's no question. And we need

USAID, we need our alliances to be competitive in that battle. - We continue with Nicholas Burns, ambassador to China here up until the recent months with all of his work in American diplomacy as well. We all await a book, I'm sure it's coming out here in two or three years if you can find the free time to do it. Nick Burns, just as simple as I can, as you mentioned allies earlier, is Vietnam our ally?

I think Vietnam, not in the strict sense of the word, when I use the word ally as a diplomat, it's a treaty ally, a military ally, like the NATO countries or Japan. Vietnam's a partner, and it's a country that...

fears China, has had to live next door to China for all of its history, has a difficult, complicated relationship with China. So Vietnam wants to be our military partner. But at the same time, like all the other countries of Southeast Asia, China's their lead trade partner. They have to live with China. And so the Vietnamese are engaged

like the Malaysians and the Singaporeans and the Indonesians, kind of a balancing act between the United States and China. So how will this play out in the, you know, you can call it non-multilateral, pseudo-bilateral, unilateral Trump approach to McKinley trade history? I mean, I don't understand that.

how we battle the natural leakages of a bilateral agreement as trade goes to Vietnam, trade goes to Malaysia, trade goes to Mexico for that matter. That's a given, right?

Well, you know, I think there's a little bit of a contradiction, I would say, in President Trump's policy. On the one hand, President Trump is right to use tariffs as a way to try to push the Chinese to be more fair-minded in the way they treat American companies, because they mistreat American companies, the Chinese. And President Biden put major tariffs on 100% on Chinese EVs, for instance, on China just a year ago.

But the problem is when President Trump went out and put those 145% tariffs on China, he also put tariffs on Japan, South Korea, European Union, Canada, and Mexico. Those are our natural allies. They all have the same problems with China as we do on trade. I think it would have been a better strategy to have really focused on China and coalesced with the Japanese, South Koreans, and Europeans. It would have given us more weight

at the negotiating table with the Chinese. - Nick Burns, I've got to ask you about my essay of the year three years ago. You were off on some train somewhere, having a long weekend with the pandas outside Chengdu. I'm gonna butcher the pronunciation, Nick. Kai Xi, C-A-I-X-I-A, acclaimed Chinese dissident, wrote for Foreign Affairs Magazine an essay, "The Weakness of Xi Jinping." I was thunderstruck, Nick Burns, by that essay.

and the idea of almost the thuggism, the simplicity of the Chinese government. What's the process you witnessed as ambassador of the parochialism of the Xi regime?

Well, I remember that essay as well and was impressed by it. I would say this. Deng Xiaoping's great insight after Mao's death half century ago was that China could not afford one man rule. Mao nearly ruined China with the Cultural Revolution. And so Deng practiced collective leadership. That's all gone now. China's back to one man rule and the one man is Xi Jinping. In

And on the one hand, he's experienced, he's obviously very smart, he's very ambitious, he's very strategically directed in terms of Chinese power. But on the other hand,

He's surrounded himself with people who have worked for him in the past. There are no peers around him. No one's perfect. And so you see Xi Jinping making some considerable mistakes. I'll just cite one. You know, he went after the Chinese tech industry in 2021, 2023, so that a lot of the tech entrepreneurs who made China wealthy, like Jack Ma of Alibaba, were banished from the country. Jack Ma lives in Tokyo.

So you see the weaknesses in some of these strategic eras because you don't have people around him to say, you know, that might not be the best thing to do, to question him.

And I think, you know, as I've participated in our own government, we're always better when you have people around the American president who can say, you know, Mr. President, I know you want to go down that road, road A, but road B is going to be the easier place, a route for you. That doesn't happen in China nowadays. And, you know, it's kind of a closed leadership. He does travel a lot, but he's never lived overseas. He's never been in business. So you see some of the limitations in Chinese decision making.

So where does the Communist Party under Xi go from here? I mean, he's been in office for as long as many people can remember. What's the consensus about how the leadership in China plays out? How much longer does he stay in power? Does he enjoy the support of the people? What's next?

Well, you know, again, Deng Xiaoping's practice was that General Secretary of the Communist Party, the president of China, would stay in office for no more than two five-year terms, so 10 years. And that was the case for 40 years, and Xi Jinping is now well beyond that. My own impression is that he's probably president for life. Since I'm 69, I can say he's a relatively young man at 71, but still...

you know, when people get close to 80. You know, all bets are off in terms of health. And so you got to worry about, well, you have to actually be concerned about stability when your leader gets older. And there is no route of succession. There's no transfer of power prescribed in Chinese law. They're going to have to make up

happens when Xi Jinping leaves power and how he leaves power. Nicholas Burns with us, an extended conversation. We continue with him for a little bit more here. Paul Sweeney in time, keen across the nation. Good morning. As we speak to our former ambassador of China, he did his first diplomacy at the Duck Pond in Wellesley, Massachusetts, a few years ago. What was your first day like?

newly minted, four languages, fancy degrees, and there you were. You were not wearing Bermuda shorts and socks in Mauritania, were you? What was your first day like in Mauritania?

Well, referring to my first job overseas for the U.S. government, 1980, 45 years ago in the Sahara Desert, I was an intern hoping to then take the oath of office and become a full-fledged diplomat. And so they sent me to this tiny outpost, Nuwakchott, Mauritania, where we had a two-person embassy. And I was the second person, you know, doing all the different jobs. And it was fascinating. I mean, I must say,

I had wanted to go in the US government in college and grad school. And when you finally get in and you stand beside the American flag and you're there helping to preside over July 4th celebrations, there's an immense pride.

in serving our government. And I hope that, you know, with all the attacks on federal government by Elon Musk and others, I hope people listening to this will know that the civil servants, the foreign service officers, the military officers, we all take an oath to the Constitution. So what do you need, Nick Burns, from Marco Rubio? Here's a guy, everybody adores him. He's one of the few people in Washington that's not worth a gazillion dollars. Marco Rubio of Florida. He's serving in the crucible service

of the emotions of President Trump hour by hour. What is your counsel to Marco Rubio for those kids starting out in the most coveted job in America? - That you can believe that young people who join, and middle-aged people, the federal government are nonpartisan. We take an oath to be nonpartisan. It's actually a law, the Hatch Act of 1952.

And I served across, I served Republican presidents and Democratic presidents. I never asked any of my colleagues, hey, what party do you belong to? Because it would have been really inappropriate to do that. And what bothers me about the mass firing of our civil servants in Washington is that there's somehow this suspicion that they're all Democrats and progressives, which is absolutely not the case. People just want to serve the country. So I do think respectfully-

Secretary Rubio and President Trump, they've really weakened the ability of the United States to put good people in the field on the military side and the civilian side. Paul, get one more question in here, but I forgot to tell you, Paul, Burns' people said we can't ask about the Red Sox.

No. It's always not. It's always not. Please don't ask me. One more question. So, Nick, just real quickly here, what's the view of the people you talk to outside of the U.S. government in foreign governments? What's their view of the U.S. these days? Well, I think, you know, there's a...

There is a sense that the United States is withdrawing from, I would say, what made us great, our alliances. So people in NATO are really worried that the United States is no longer going to be the leader of NATO. The Ukrainians are worried that we're going to leave them high and dry to face the Russian war machine. The Japanese and Filipinos are wondering, will the United States be there if China continues to press against Ukraine?

They're borders. And so I think the United States has become kind of a risk. Our government, it's the unpredictability of our government, the seesaw back and forth in terms of what the leader says, our leader says. And that worries me.

I, you know, listen, I'm a patriotic American. I want President Trump to succeed in the world. I want his government to succeed in the world. Who wouldn't if you're an American citizen? But I think there's a disquiet and uncertainty about sometimes the direction that our government is heading in, particularly on the tariff issue. Nick Burns, thank you so much. Generous time with us this morning. Ambassador Burns, of course, to China and to Mauritania a few years ago.

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There's no business like small business. Hiscox Small Business Insurance. You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. Paul and I both agreed we desperately need to talk to Jane Foley. She's at Rabobank.

absolutely definitive on cross currents of the foreign exchange market Jane is a weaker dollar vector in place well it would appear to be so I mean you know it is going to be difficult for the Fed because a weaker dollar is of course inflationary but what we appear still to have

is an awful lot of investors really re-evaluating those dollar trades, those pro-dollar trades, really of the last few years when everyone was very much of the view of buy America. Right now, it seems that the theme for this year, and it's still ongoing, is that people are re-evaluating options elsewhere, whether or not that be defence in Europe or

Japan, the Japanese JGB market, perhaps a little bit toxic-turvy at the moment, but certainly Japanese assets have been on the radar again of investors this year. And I think the weaker dollar is just a mimicking of this commentary that we've been hearing quite a lot, that by America, the story of the past few years is...

been really re-evaluated. Okay, Jamie and Sasar taught me how to do this. I brought up Taiwan dollar, Korean won, and Sing dollar. I'm sorry, Jane, those charts are elegant. Strong Singapore, strong Taiwan, strong Korea. What are the ramifications if they break through to new currency strength versus the dollar?

Well, they don't necessarily want that. That would be a significant move and significant pressure on their economies if that were the case. But certainly, that's been an idea which has been very much caught up in speculators' minds over the last few weeks.

Clearly, we do need to see some of the progress made on trade deals between the US and a variety of other countries for this type of speculation to be put to bed or at least to have a little bit better of an anchor. So that's what we need to see. There's been a lot of speculation as to whether or not currencies would form part.

of these trade deals, whether or not the weaker dollar that Trump has been talking about in previous years is going to be part of that. And that's what the market is sort of a little bit frightened about. But certainly, you know, I would have thought that if Trump wanted a weaker dollar to make American exports cheaper, which has been part of his mantra, you know, for a long time, he would want that under his control. And I think what

we've seen recently this year is not a dollar weakening because Trump wants it to weaken. It's been a dollar weakening because market investors have been reevaluating the value that they are now seeing in U.S. assets as opposed to assets elsewhere. And that's not necessarily what the Treasury wants. Paul, I'm not going to sing dollar. This from the second week of April, it's been a 5% strengthening.

of Singapore dollar, it's a wicked elegant chart. I went to logs for Jane Foley. You know, that's the way we roll. And it's out to standard deviations strength here. The trend is in place, weaker U.S. dollar. Weaker U.S. dollar. We see that in the Bloomberg dollar index still plumbing some lows here. Jane, a lot of Americans are getting ready to come over to Europe for summer holiday here. They're not liking the euro here at 113. How high can the euro go here?

Well, you know, that, of course, is a big question. If we go back a month or so, there were some views out there thinking, oh, you know, euro dollar is on course for 120 this year. I still think that 120 is a fair way off. I mean, we've got to consider this from the ECB's perspective, too, or from the Eurozone's perspective. I mean, think about Germany. Yes, there was that loosening of the debt breaker.

couple of months ago. Yes, you know, that really has reinvigorated investor interest and, you know, defence infrastructure, etc., in the outlook for German growth in the coming years. But, you know, the Bundesbank has warned that Germany could still see recession this year. Most big forecasters think that that boost to German growth won't start until next year. And we've still got the headwinds possibly of trade wars coming through as well. So if

Germany sees recession this year. Well, the ECB definitely don't want to see a euro strengthening significantly. And I think if we did see the euro ratcheting up at a pace from these sorts of levels, we could see a more dovish ECB to try and counter some of that move. So, yes, we might see 120. I don't think we're going to see it this year. Would we see it by the end of next year? Well, no.

certainly could but that would of course would depend on how that growth engine starts to to work in in germany and the rest of europe too boy i got a lot of pound sterling coins and script scrolling all the way you know all of all my drawers here it's up tom

Like 11.4% in the last few months. It's unbelievable. Folks, this is why you watch surveillance. Michael Barr, Lisa Mateo. Paul, while you were yapping with Jane, I did what Jane does every day. I looked at an Hermes tie. I go over to Paris, take United 57, go over to Paris, and that bow tie right now is 240 euros. If it's 115 euros,

If it's 1.15, it's $276. Oh, boy. There you go. And if it goes to 1.20, Jane Foley knows, it goes to $288. That's real. I mean, that is real money. That is $12 increase because of Macron. There's no other way to put it. Get one more in here to Jane Foley while I print the tie I'm not going to buy next time around. Yeah, you're not, but I don't think so. So talk to us about the pound sterling, Jane. What's the story there? Yeah.

Well, of course, we did see that stronger than expected CPI inflation data last week, too. And we saw retail sales managing to be a bit more robust, too, than the market had expected. And, of course, if you go back a couple of weeks before that, we had the GDP data for the first quarter coming in a little bit more robust. And, of course, there's been the news that

that the UK did manage to sign a trade deal with the US and also in the same week with one in India as well. So there has been a fair amount of better than expected news for the UK. I think that has given Sterling a little bit of a fill up and we see that and certainly in Cable, you know, above.

The recent range. And so Sterling's had some decent news. Now, that's not to say that we are not going to have those headwinds. We know that growth this year is still going to be difficult. In June, we've got the Chancellor again. She has to do a spending review in June. That's going to be tough because UK debt is so high. So it's not all plain sailing, but Sterling certainly has seen some benefit recently. Have you recovered from Tottenham winning the Europa?

Jane, I mean, it was too much. Well, we had Crystal Palace winning a big match, too. Did you see that, too? It's my local team. Well, that's just up the road from me, so that was pretty good. Have you watched Ted Lasso where they filmed the TV show at Crystal Palace?

I didn't see that, no. You should see that. I want to watch for me. You have to watch Ted Lasso. You'll love it. They film it in Crystal Palace. They're, you know, it's great. I mean, Crystal Palace, one top damn one. What's next? I don't know. The world's going to a mess. Jane Foley, thank you so much. Greatly appreciate it. This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple CarPlay and Android.

with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say, Alexa, play Bloomberg 1130. Huge response from Henrietta Trace. Let's bring her in with Veda Partners here on the madness in Washington between the left, the right, the center, and four other flavors as well. Henrietta, quickly here, you were on a number of times ago and you said 63 congressional seats are in play today.

Do you stand by that or is it a different number? If I'm not mistaken, it's actually 69. That's based off of the Florida first and Florida sixth special elections that happened two months ago or so. And it puts at risk basically any district that's R plus five or in Jeffrey's view, R plus 10 or more. Very good.

Very cool. Let's move on, just as the news flows, extraordinary. I think America, including Tom Keene, is ignorant about the nuances of the GOP Senate. We love to parse the House. We know that story. How divided is the Senate for the senator from the Dakotas?

This is an interesting question. Kevin Kramer, who I assume you're talking about or could be speaking about later soon, is different in that there are members who are actively benefiting from things like the Inflation Reduction Act.

from the clean energy subsidies that came from a purely Democrat-only passed bill, who are extraordinarily opposed to the president's tariffs, but are unwilling to rein him in. And the senators from the Dakotas represent that faction. So they are out there, you know, going to Canada, trying to pass legislation to almost provide something that the Republican Party can talk about that is not related to the tariffs and not related to the president's

maybe more social items on his agenda. And that's really what they're representing right now. When you say Dakotas, that's who I think of. How about just in tariffs in general, Henrietta? We have, again, once again, we're seeing this playbook play out time and time again, announce big tariffs, big headlines, and then walk them back as it relates to Europe here. How do you think this whole tariff thing is going to play out? Because it has been the number one item on the president's agenda since day one.

Since the 1980s. My view is that Liberation 2.0 is coming. Liberation Day 2.0 is fast approaching, and it doesn't have to just be July 9th. Think about what is coming down the pipe. Number one, we have sectoral tariffs across pharmaceuticals and semiconductors, the

The comment period is over. Those tariffs could hit at any moment. The pharmaceutical sector and the European Union are heavily concerned about those tariffs hitting in the next two to three weeks, if not before. Those would come in if press if history is precedent at 25% rates. That's what the president has tariffed.

aluminum, steel, automobiles, and everything else on with the National Security Tower. So those are pending. And there are a litany of those that will come for the remainder of the summer and into the rest of this year across lumber, copper, trucking, air jets, cargo, et cetera. Then we have July 9th.

And what's happening already is that even nations that we are close to or should have trade deals with, as suggested by Secretaries Besset and Lutnick, are nowhere near completion. Indeed, South Korea, the one that I anticipated or I understood Lutnick and Besset were talking about weeks ago when they started saying trade deals could be announced just a week after Liberation Day, are nowhere near completed. They have an election on June 3rd, and they're saying they need a delay beyond July 9th.

The same is true for Japan, who doesn't even have a date for their election yet. So when I think about what's coming down the pike for investors, it's more tariffs, both sectoral and a hike specifically with the EU above their current 10 percent rate. I think the president's itching to get to 20, at least, if not higher, as evidenced by his 48 hours of considering 50 percent.

how does all this tariff talk how is it playing out politically is there any feedback any polling do people care are they concerned that inflation is going to hit let me stop and say this is the question of the morning that's a key question how do people feel about this i'm so glad you asked you know we cover all kinds of macroeconomic policy items and we can talk about wonky stuff like current policy baseline or carried interest tax rates the american public under

understands tariffs. What's shocking to me is to go and, you know, go to my local grocery store, see the front page news, and the side advert is for buy your appliances now before the tariffs hit. Buy them now before President Trump implements Liberation Day tariffs. I mean, those are front page news items in states like Louisiana. The American public knows what tariffs are. They know for sure that they are not tax cut.

and they know that they're coming. The history of this with McKinley, taking it back to someone that the president worships, Henry DeTray's McKinley quarters or years after his heavy tariffs repealed them. Do we even get to heavy tariffs, or do you just assume he'll verbally retrench, retreat at some point, like in Liberation II?

I feel really strongly that we need to stop. Well, I know I just did it, but like we need to concentrate on the fact that these tariffs are on. Y'all have some great reporting and charts in the Bloomberg terminal today about exactly how much money is coming into Customs and Border Patrol just now for this month. It is just starting to hit. Those prices will be passed on to consumers, whether that's at Costco or Walmart. And as I mentioned, the American public.

Republicans, Democrats, and Independents have a very negative view of these tariffs. They don't like when, you know, Peter Navarro comes out and says these are tax cuts. We know that they're not. We know that inflation is real, and now it's because of the tariffs. We've got to do this more. Henrietta, thank you so much. I just can't say enough about it. Henrietta Trey's there, and the key item there at the beginning, she's taken out from 63 to 69 seats in play as we go to the midterms of 2026.

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♪♪♪

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. The newspapers with Lisa Matej. She and I are doing battling prom stories.

Her stories are uglier than mine. Oh, it's a stressful time, let me tell you, especially for the girls. Okay, so we have this trend, right? Wealthy people buying sports teams. Well, that could be,

could be taking a little bit of a timeout because the house bill that we've talking about is targeting tax breaks for team owners so what it does it includes the tech to the tax code it could cut in half the tax write-off that is potentially worth hundreds of millions of dollars to some team owners this according to the New York Times I mean NFL NBA other major leaguers they've been able to write off like the entire value of their teams quote intangible assets

player contracts, media rights, sponsorships over 15 years. So now that could change. And what they're saying is that maybe that could stop cooling this trend of wealthy people wanting to buy teens because they won't get as much of a tax break. Yeah, but you've heard this before, Paul, right? Yep. Sure. You know, this circles around. Yep. Been there. It's been there. It's been. I watched some ball this weekend, and I'm not sure I understand the correlation of money to it other than

There's teams that are loaded, and there's teams that are not. Well, I mean, in the NFL, they brought private equity now invest in the NFL. So we're having 10% of these franchises, so we're seeing a lot of that. In the NFL, is there a weak group like in Major League Baseball, Paul?

There are weak teams, but no weak franchises. The value is just so great. There's no Chicago White Sox. No. I mean, I just kind of feel like even if you're in a small market like Jacksonville, the value creation there is extraordinary. So we'll see.

Next. All right. So we go from sports to... That's okay. Can you do better? Yeah, I can. Okay. Okay. Business trips. Okay. You mentioned you have one coming up. Yes. Right? Okay. I have one coming up next week. Tom's here. Where are we going? Rome? No, we're going to the nation's capital, to the National Shores, the Gaylord Resort down there just outside of D.C. for an event. Alex Steele and I will be there. Very cool. Yeah.

so we'll pick up a museum all right so you're doing that business trip right next week i'm going to san francisco tom's staying here yeah i have no life john tucker's going nowhere so you have the golf so you're the one that has a golf stream okay i couldn't figure out newark um so the question that's coming up from this story is do you bring a plus one on your business trips

So that's the question. Blended travel, right? Leisure is like a big thing now, business leisure. But a new study is saying that Gen Zers and millennials, they're more likely to bring a friend or spouse. And they say that they won't tell their boss because they're afraid what their boss might say. So then they have their friend or spouse kind of dipping and ducking and hiding the boss on the trip there.

but they're just talking about this whole idea and it brings a question like would you bring do you bring a a spouse or a plus one on a business trip is it okay some companies are actually saying they encourage it because it makes things more enjoyable it brings your stress level down so yeah i got a plus one you got it okay sure there you go yeah going down to dc and you're not a gen z and millennial trend do what i want to do i'm at that point in my life when this is it's more stressful you

You think it's more stressful? Oh, yeah, because if I wheel into London for five days and take plus one with me, she's like plus Bond Street, plus let's go over to Dublin to Guinness. Let's go look at some museum and get, you know, a zillion dollars of merch. You spend a little more, yes. It's definitely more stressful. That's my answer. You're the opposite. One more. Okay, big Memorial Day box office. Not sure if you went out to the movies, but a lot of people did. 326 million.

million dollars in North America that's between Lilo and Stitch and the Mission Impossible movie big big big um the theaters needed it so this was like kind of that boost that they wanted yeah I mean it's I think as we get farther and farther and farther from the pandemic and getting a little bit closer to normalization I'm not sure normalization is pre-pandemic levels but right it's gonna be a it's gonna be a continue to be a big big important window for these

The Newspapers with Lisa Mateo. A strong start to the week. 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.

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