Market Rises amid Policy Uncertainty
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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 are advantaged with Neil Dutta of Renaissance Productions.

Macro, Neil, you were my economist of the year with resilient optimism in the depths of COVID. You've turned more cautious. When I see a stock market go to record highs, how can I be cautious? No, it's a great point. I mean, clearly, Tom, the pain trade is stocks go higher. I mean, you have the market at...

at basically new highs and you know it looks like bears outnumber bulls so that's you know I mean pretty good sign the pain trade is higher you know look I mean you know the I think you know the stock market is a very useful discounting mechanism so it's always important to keep an eye on it especially when you have a cautious economic view like I do but

you know, it's also worth pointing out that it's not a perfect discounting mechanism, right? So when I think about why stocks have gone up, you know, it's earnings, rates and risk premium and earnings estimates keep going higher. Risk premium has been coming down. You know, you're getting soothing words on trade and interest rates have been coming down as the markets bet

you know, I guess more in the direction of our Fed view. So that's what's powering the stock market higher, which kind of raises the stakes for what earnings looks like going forward. I mean, obviously, economic data generally

over the last number of weeks on net has been negative. And, you know, you'd expect, you know, some of that to bleed into the earnings. The way it does is, David, Dutta just reads Jeff DeGraff's research. Oh, OK. Yeah, he doesn't know anything about the stock market. He just listens to DeGraff. David Gurin. I love that you call him. Was he formerly your economist of the year? Do you get a trophy for that? Is there like a...

No, he gets a beverage of his choice at the time of his choosing. Neil, let me stick with the soothingness that you talked about in terms of the rhetoric that we've heard from the Fed on and what we've heard from policymakers on tariffs as well. How much of a disconnect is there as you see it between what we're hearing from from them and as you see the state of the economy today?

Well, I mean, my big gripe is really the state of the economy as it is, not so much what tariffs are doing to the economy, because in my opinion, I mean, before tariffs even happened, I mean, we were talking about a frozen housing market, a frozen labor market, a capex cycle that was really just about tech, not much else. And, you know, I mean, tariffs make that bad situation worse. But, you know, look, I mean, David, I mean, for the U.S. economy,

What I'm really focused on right now is the ongoing deterioration in labor markets. We have continuing claims rising to fresh highs week after week. That means that unemployment is probably going up.

And housing continues to get worse, particularly new single-family housing, right? So that, to me, is an important thing to consider. I got year-over-year PCE coming up here in one minute. Quickly, Neil, out of 30 seconds, 2.1% to a surveyed 2.3%. Is that on the edge of stagflation inflation?

No, I mean, this would be the third consecutive month where core inflation is running 0.1. I mean, stagflation, we have more stag than we have flation right now. The flation part is very much in the range of a forecast. And I think it's important for people to explain why the tariff-induced inflation is like

likely is anything more than a one-off. Neil Dutta with Renaissance Macro, nailing the stag of stagflation. I see real personal spending with a negative statistic. Neil, what does that signal for future GDP?

Well, it's going to mean that you're going to see some downward revisions to estimates of GDP. And remember that the estimates weren't that strong to begin with. You know, I'm a little bit surprised that the consensus missed the real consumption number because we did see unit auto sales come down quite meaningfully over the month. And so, you know, look, I mean,

if you look at this data what it shows is real consumption came in a bit weaker than expected and core inflation came in a bit firmer than expected so without having you know dialed into all the details it just tells you that consumers are resistant to higher prices right and that's because ultimately

consumer inflation, in my opinion, really boils down to the household budget constraint. Right now, if you look at real income net of transfers, that's up only 1.5% against last year. And that kind of sets the table for what consumer spending will more or less do.

And, you know, you're talking about, I think, at a minimum of a low potential growth environment. David Gurr, I see the line item in PCE. There's like 200 line items and there's one for summer camp. Would you care to comment? No, I prefer not to comment on that. It's strained all my resources now that I have two of them going. But no, that's that's an extreme one. Let me go back to the housing market, which you mentioned just a moment ago is one of the two things that you're kind of focusing on and suggesting counseling us to focus on here as well.

How big a drag is that likely to be on the economy more broadly? You're looking here at sort of new home starts and projecting a lot of nuance into the way that we should be thinking about that. Well, sure. I mean, remember, this isn't the first time during this cycle where we've seen residential investment go down. The first time was back in 2022 when the Fed was gearing up massive, you know, rate hiking campaigns. So they basically crushed home sales. But what was important about that period was you were still in a situation where, you know, home...

units under construction were rising. Right now you're in a situation where housing starts are running below completions, which basically means that units under construction will continue to come down. If you look also at the slack in the new housing market, you have essentially cycle highs in unsold new housing inventory. So that kind of begs the question as to why

builders are going to break ground on new homes to start with because it makes much more sense at this point for them to kind of sell out of the homes they've already made as opposed to breaking ground on new homes. So that means units under construction will keep falling. And that sort of begs the question as to what's going to happen with construction employment, which has been relatively hanging in there.

you know, over the last number of years or so. And then you talk about, you know, home prices are, are, are declining, uh, you know, uh, nationally. Um,

particularly the South and the West, which is where the builders have been making the homes. So I do think that construction activity and residential is gonna be coming down. And I think that's gonna have effects on employment over the coming months. - Neil Dutta with us at Renaissance Macro. We continue commercial free through a good part of this hour. I should say lots of economic data coming up next week. David Gur, one more question for Mr. Dutta.

Neil, I listened to Mary Daly yesterday on surveillances. I know you likely did as well. And she talked about her modal outlook has been for some time. We would begin to see be able to adjust the rates in the fall. She hasn't really changed that that view. Any I'm curious of what you're hearing or pulling from the commentary we've heard from these Fed officials and what sense you have of their path going forward here.

Well, David, as you know, I mean, if you put two economists in a room, you're lucky to get four opinions, right? So and I think that's kind of where you're at right now with the Fed. I mean, you have a very kind of bimodal sort of distribution. I mean, there's some that don't think they should be cutting at all. And there's others that think that maybe two cuts are likely, some thinking they should start sooner than later. You know, to me, I think

What's important is what Daley said about tariffs, because she basically said that, look, like everything we know about this means it's going to be a one off. So why are we holding off on easing if, you know, given that that first principle?

At the same time, you know, we know that unemployment is going higher. And, you know, the Fed has been saying for the longest time that the labor markets aren't a source of inflationary pressure. I agree with that. But if unemployment is going higher, maybe the risk now is that the labor markets are, in fact, becoming a source of disinflationary pressure. And I think that's something that they need to heed. Interesting. Neil Dutta, thank you so much.

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

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You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. I have been waiting for this interview right now in the studio with this Monica Guerrero compliance call for you from Morgan Stanley and begged, begged, begged. Don't ask her. You have real world New York City problems.

Yes. Everyone talks. Monica Guerra does.

Kareem Hajjar in the Boston Globe today has a blistering essay on the gentleman who just won Democratic primary here. Can you fathom where we will be if Mr. Mogdani is elected mayor in November? Where will people like you in the machinery of City Hall be in February or March of next year? Any idea?

Yeah, well, I just want to clarify, I'm no longer working for City Hall. Not Morgan Stanley's opinion. But one of the things that I think was interesting about this race is that it seemed that the sort of democratic socialist label didn't really matter, right? That there is a desire to have New York City be more affordable. That's what I saw people running towards.

Now, what does it mean long term? One of the biggest questions we're thinking about from a markets perspective is what happens with free busing? How do you get there? Right. And that's a big and that's a big question, because we know the MTA is both a city and state run entity. And there's a lot of debt. There is a lot of fiscal pressure. And how are they going to get there? So for me, my question is, what does the bonding situation look like long term? And what does that mean for Credit Spark?

So there's adult talk, folks. Here's what we're going to do. David, when she gets a day off from working Stanley...

She can come in with her flip-flops, and we'll talk to her about New York City. Why don't you begin an adult interview, David Gurra? I'd love to talk a bit about trade, first of all. And we had this interview yesterday. Howard Lutnick was on with Kayleigh Lyons and Joe Matthew. And what he allowed during the course of that interview was that the U.S. and China had signed an agreement. We can call it a deal, framework of a deal, what have you, seeming to codify what was discussed and agreed upon in Geneva and then in London after that.

Where does that get us as we kind of push headlong? We're less than two weeks away from July the 9th, which is when this pause that the president put in place on these reciprocal tariffs ends. And I should say China is exempt from all of that. Where are we now? And as we see the market move on that news from Commerce Secretary Lutnick,

What does it tell you about progress and process and where things are headed? I think it tells me that markets have been essentially waiting for any news, right? So anything to hang their hat on, any piece of certainty. And so if we're thinking about this framework, I think some of the details we know have to do with rare earth minerals concessions, right? There's very, very light information on what's in there.

The interesting thing about this is that even though we have sort of a black box on all of the other negotiations, they have said that they're willing to kick the can on the 10%. So we know that there is essentially a set baseline going forward and that the rest is just, right, this negotiating piece. We think that ultimately you're going to land lower, closer to 10% than, say, 30%, 40% in some instances, depending on the country. For us, this means...

positive market response because you're not getting the worst case scenario, right? Markets have essentially adjusted and priced in this activity. But it also means for us as investors, right, is that we know which industries, which sectors are going to be the most impacted and where we have status quo. I was at the G7 Leaders Summit, and so I watched as the president left, and there were all these disappointed delegations who had flown great distances, especially

spending a lot of time on airplanes with the hope that they could get some time with President Trump and his team to talk through these trade deals. As you listen to Secretary Lutnick talk about how we're close to these 10 deals, 10 major trading partners signing deals, we had Scott Besant on Fox Business this morning talking about all of this getting wrapped up by Labor Day. How much has all of the activity of these last few weeks, so that's the G7, that's the NATO summit, of course, all that's been happening in the Middle East,

Set back this timetable. How much realism is baked into the fact that we could get some deals here signed soon? I think that it is real that you could get some deals signed soon, especially by August. The fact that they've pushed out that deadline, and I think they'll continue to do so. I don't think we're really beholden to any specific timeframe. Other than that, if we're looking at the tax bill, so I'm going to shift here to OBB, the one big beautiful bell. Yes.

If you're looking at the fiscal hawks and getting them to the table, there has to be some sort of assurance, right, that they can offset some of the debt and deficit. And so while we may not know what those specific parameters are, we do have a baseline expectation from the CBO of what types of revenue could be raised in event of heightened tariffs. It's Friday. You're killing me, David. All this stuff is way too nerd-fest.

Monica, are you concerned about our debt and deficit? Or do we just, you know, the proverbial little G, we just continue to grow our way out of this mess? The idea from this administration is, yes, they want to grow their way out of this. I know that. Every administration since Zachary Taylor or Tyler.

Taylor, thank you. I remember John Taylor. Back with Taylor Thomas? Jonathan Taylor Thomas? I almost interviewed John Taylor once. Help me here. Right now, we're going to grow our way forward to extend and pretend. So let me just put it this way. I'm not a modern monetary theorist. I don't prescribe to the idea that debt doesn't matter.

Now, what I do want to highlight is that you have to have growth at levels that outpace the pace of interest expense growth. Right. And so if they're able to get that balance correct, right, if you get the GDP to interest expense balance correct, then essentially you can keep going for quite a while, right, on this productivity promise of the United States. So we don't actually see that cracking yet, but it is still a problem. Madhika, I've got 20 seconds. Free busing. Come on. We can do this over a cup of Sanka.

It's not that complex. Have you been on a bus? No, I haven't been on a bus since Nixon was president. The buses are great, just FYI. Free busing. The rich pay for it, but they know it's a dedicated tax. They know every dollar of that tax is going to buses. It's a layup.

This is the thing. There's a lot of transportation policies that seem like layups. You know, when you're thinking about congestion pricing from Hochul's perspective, that was a layup. It wasn't. It had tons of hiccups with people that have, you know, opposing views. So not everyone is going to feel that, you know, that they're willing to be altruistic and, you know, support free busing.

We got to go. This is brood. Please come back like Monday. Monica Greer with us. Your favorite mode is the Roosevelt Island tram. Right. I got a problem. 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 1130. Much more of an international brief. We're so honored.

to have her in studio with us. She was just a workhorse through COVID. Freya Bemis with us, Chief Economist T.S. Lombard, always and forever of London. When you say to an American, you have to focus on the Pacific Rim, let's start with a why. Trump trade tariffs and all that, why should we pay attention to the Pacific Rim in the second half of this year?

Yeah, I think that nexus between the US and China is one of the things that's really changing and shifting in terms of the axis of the global economy. When we think about the underlying drivers of some of the big shifts that we see in the thing that I hyperfixate on, which is bond equity correlations,

The underlying driver is the political economy and the rise in inequality at both ends. I saw another jump condition in Taiwan dollar today, way outside two standard deviations. Take currency dynamics, weak dollar, over to some of these almost jump conditions in Pacific Rim strength, over to equity bond correlation.

Okay, so I think all right, let's do this I think what's happening here is is in in the the currencies outside of the renminbi within China like I just don't know why the administration wouldn't consider

the currency as part of trade deals. When you're considering China, it's a slightly more, I guess, aggressive proposition. But Taiwan has had this current account surplus for years and years and years. It's a massive percentage of GDP. Why would that not be a part? Why would the currency not be a part of the deal?

And I think sort of what's changing here, here I go to the bond equity correlation, is that we're shifting away from the hyperglobalization that has sustained those current account surpluses and into a world where the policy reaction to the hollowing out of Detroit and the rise of inequality, the policy reaction is negative supply shocks, negative supply shocks.

push inflation into the system, destroy demand, and turn the bond equity correlation positive because investors need more to compensate them for the deterioration of the hedging quality of the bond. And so the likelihood of those negative supply shocks is just higher now than it was previously, not least because we're moving from a unipolar global political order to a multipolar global political order, which also has a lot of consequences in that Pacific Rim area.

So this increase in instances of negative supply shocks, to me, and this is where I have to be very careful about sort of my truth on a three-year time horizon versus what actually gets priced at this moment in time, to me that means greater likelihood of negative supply shocks. But just as in the 80s it took quite a long time for people to price out term premium, it's going to take quite a long time. It just takes longer than the modern media thinks. David?

I'd love to stick with that, which is your overarching thesis, this move away from a kind of unipolar world to a multipolar one. And so when you look at the weakening in the dollar that we've seen, is it part and parcel of that? Do you see that as kind of emblematic of maybe more near-term or shorter-term phenomena? Or is that part of this kind of broader thesis that you have? I think it's definitely part of this broader thesis, that the underlying sort of driver of the dollar standard and the

The strength of the dollar is the fact that the U.S. economy is just more dynamic. It's able to sustain higher private consumption-led growth without creating inflation. And so risk-adjusted returns in the U.S. have just been higher.

over that period of time. But I think what's changing now, the US is going to remain exceptional. It's just not going to be as exceptional as it was in the 2010s. Gradations of exceptionality. Exactly, right. So I think the underlying causes of the strength of the dollar is not so much on the trade account. That seems to me something that's sort of flapping in the wind of capital flows. And it's actually capital inflows, predominantly actually in the last decade from Europe rather than the

Pacific Rim that have helped to cause this kind of strength of the dollar and the outperformance of U.S. assets to the extent that they contribute there as well. And so that's also unwinding and reversing because U.S. risk-adjusted returns are coming down relative to the rest of the world where U.S. risk-adjusted returns are probably better and partly thanks to

partly thanks to the chaos that is created by Trumpian policy in Europe, but also thanks to the rise in inequality and the rise of the AFD 10 percentage points in the German elections and Russian threat.

Can I ask you about what's transpired over the last 24 hours? We had the Commerce Secretary on our air yesterday evening, and he said there's been this deal that's been inked, which I guess is codifying the agreement that took place in Geneva and then was re-upped in London. Great enthusiasm it seems in the market because that's an indication of something. What is the something that you see that indicating, bringing to bear your experience today?

tracking what's what's going on in in asia here here it seems to me it's a very basic thing that's been to agree to which is a continuation of talks and i guess more openness to some facets of of trade what exactly has been inked here and why is that so significant if at all yeah i i guess the the big kind of push point that could shift in terms of the actual rate of of tariffs that's going to be charged on china is is with relation to the fentanyl side of things which is a big part of the the 30 additional on

China. So that's maybe where you could get some positive news kind of coming through. But like with all the trade negotiations, July 9th is not like the deadline for this to be done. It's the deadline for talks to have started, which

which means again that you just get these kind of uncertainty shocks coming through in the time we've got left with all of the ts lombard the heritage of charles dumont what you're doing free abimish where do you think the blended tariff level will settle down to it's 17-ish now i'm guessing i'm just making a weekend guess where does that end up does it come back down near two three

No, I think tariffs have multiple functions in the toolbox. One is negotiations. That's what we saw in the first half. Now we're kind of coming through that process of negotiations. Another is like actual rebalancing of the U.S. economy, whether you believe that's going to happen or not. But the one with the baseline for tariffs that persists is a fiscal reason and a reorientation of fiscal policy. I don't think it is a coincidence that tariffs

tax cuts are about 0.8% of GDP and spending cuts offset that by 0.2%. And then it just so happens that tariff revenues as they stand would probably be about 0.6%. And so that helps you to square the circle in Congress between the fiscal hawks and the people that are up for re-election in the primary. So I think that 10% level is actually quite sticky. Right.

I got 20 seconds. What does Labour do in the United Kingdom? I read the British newspapers and it's as crazy as I've ever seen it. Absolutely crazy. I don't understand it. Okay. In the 20 seconds, they probably replicate what Gordon Brown does, which is tell the Bonn vigilantes what they want to hear and then spend like a trooper. Okay. Does reform, is Nigel Farage going to be the next prime minister? 12 seconds. I don't know.

I hope not. If Reeves manages to sort of shift past this kind of myopic focus on the fiscal rules, then maybe the economy can turn around. Freya, thank you so much. Great to see you. Does that cover our United Kingdom politics for the week? Yeah, very good. 30 seconds for the week. Nailed that. Freya Beamish, thank you so much.

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This is what the market used to sound like.

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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. Joining us, James Steele of HSBC. It's one of the P's, platinum or palladium. I think I saw record high.

like yesterday or the day before, your world's on fire, isn't it? I mean, even silver got it going. Yes, it certainly is, Tom. The precious metals markets have all been very active this year. Why? Well, for varying different reasons. The gold, obviously, you know, and all the time I've been watching gold and analyzing it, the same 12 or 15 factors drive it year after year.

The trick in analyzing it and trying to get an idea where the price might go is to which of those factors is dominant and which is recessive. Right now, and for this year, it's been geopolitics, and last year as well. And it's been quite a long time since that was in the driver's seat. And central banks are still buying at the margin? Oh, absolutely. That's the second issue, too. I mean, I have no doubt that...

We would not be up here if it weren't for central bank buying. Now, I've got to get this in because I think it's so important. If I look at Telluride, Colorado, and the Liberty Bell mine, which is gold and silver, and it's like, you know, the unsinkable Molly Brown, it's like 1890. They shut it down in 1921. Is there still gold or silver out there when Gura goes out to Telluride?

Well, I don't know about that specific mine, but there's one of the problems with gold. You know, they talk about peak oil. Well, I can tell you there's no such thing as peak oil, but there is peak gold. We've been looking for gold for 5,000 years. We've only been looking for oil for 150-odd years. And the ore grade is dropping. It's getting more difficult. We haven't had a mega discovery since 1997. That's 20 million ounces or more.

since 1997, so there's no shortage of gold, and I don't mean to give the impression that there is.

And mine supply is going up because it's very profitable to produce gold right now. But we do see later in the decade, we see the gold production from the mining side beginning to plateau and top out. Let me go back to the central bank issue. And I keep thinking about this Leslie Hook piece in the Financial Times from a few weeks back. And the thrust of that was you have central banks.

really scaling up their purchases of gold. All the while, the forecast seems to be they're going to be paring down how many dollars they have on hand. What does that phenomenon tell you or say just about the state of the world today?

Well, that brings in the de-dollarization argument, which we think is gradual. We're not in the dollar will cease to be the world's reserve currency camp at all. For many reasons, according to our FX research team, the dollar will remain the world's reserve currency. But

Perhaps every central bank doesn't need quite as many dollars as it has. And if it decides on a portfolio basis to readjust things, but is reluctant to go into another specific currency, which many of them appear to be, then gold is a marvelous way of slightly de-weighting your dollar holdings without committing yourself to something like the euro, the yen, or another fixed income instrument that you might not want to own. So it's a perfect sweet spot.

And when you see geopolitical risks, I mean, when you look at the central banks that are buying, they tend to be near neighbors that they may or may not have issues with. They don't tend to keep the gold in that country. I see.

they tend to be homicidal elsewhere. James Steele with us on your Commute Across the Nation. Near June 30 here, we reset for the second half of 2025, even looking into 2026, which I find hard to believe. Futures up 12, up 22 earlier. Give back a little bit, but we'll see how the market opens here in 23 minutes of X16.24. James Steele, are central banks supposed to own gold? I mean, they have a societal policy that,

to manage inflation and the mandates differ or the jobs market everyone new zealand's different than america i get that but where does it say they're supposed to have a fort knox well they've always had gold gold was the original um when central banks originated going back to the bank of france the bank i was going to go back to france they were all founded uh on their gold reserves

And in fact, it's only been relative-- you could almost ask that the currency as we know it now is relatively new compared to their gold holdings. Are their gold holdings now equivalent to what they held in the 1930s? Well, as far as the actual tonnage goes, they're greater, but as a percentage of their reserves, much smaller, because we've gotten a lot more currency since then.

You bring up geopolitics, and I take that to mean what's been happening in the Middle East, all of the upheaval that we've seen, the fighting and upheaval. How much does the Korean trade picture, the tariffs picture, affect the appetite for gold and what we're seeing in the market more broadly?

Well, it's been a positive for the gold market for many reasons. It feeds into the geopolitical argument as well. Tariffs are arguably disruptive to capital markets, credit spreads. They can ultimately have an effect on equities. All of these things increase uncertainty.

and that's good for gold. You know, it's not so much that gold reacts to good economic policy or bad economic policy, although obviously it does, but it really reacts to his uncertainty. And if you look at the economic policy on uncertainty index, and we've done a lot of statistical work on this, the correlation is quite good.

Where is gold now in the luxury space? I mean, you know, Anna Wintour is finally retiring from Vogue US after a stellar, magical adjustment in jewelry and fashion and all that. Is it booming now? Gold demand in jewelry? Well, at the high end, it's always good because of the income that's allowed to support it. But jewelry demand itself is down double-digit.

Don't forget, 50% of all physical gold demand is in jewelry. Really? Half of it? Yes, half of it.

And I'm not talking about hedge funds and portfolio managers. Does it play into the price? Millions. It does. But the difference is that on the institutional and the investment level, relatively few players move in and out, and they move a lot of bullion. So they can appear to dictate the price on a daily level, whereas millions of people buy and sell gold

and very fractional small amounts every day around the world and it can take many months for that to feed in david let's go to our expert on this joining us weekend gold expert lisa mateo can you buy gold at costco you can buy the bars and you can buy like jewelry and stuff too okay david one more for james still tom at the beginning uh mixing up palladium and platinum

What's another metal that we should be paying attention to here? Aside from gold, where have you seen an interesting story emerge here? Well, so far, it's been platinum. And part of that is the jewelry story. Platinum jewelry, gold jewelry has gotten very expensive, very expensive indeed. And in price-sensitive economies, notably China, there is an ongoing switch now back to platinum.

And when you compare the size of the markets, I mean, they're much smaller. Platinum is much smaller than gold. And the supply of it is rather tight. Most of it comes from South Africa, but also Zimbabwe and Russia. And none of them are in a particularly good state to increase output. So the stocks are much lower.

the sensitivity to prices higher. Thank you for this brief, James Steele with us with HSBC. Just love having you. This is the Bloomberg surveillance podcast. Listen live each weekday, starting at 7 a.m. Eastern on Apple car play 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 1130. Let's get to it. The newspaper's Lisa Mateo before she jets to Venice. That's correct. All right. So we've heard about the Trump administration's battle with Harvard, right? David, you've reported on a number of times. Now, the New York Times is saying the Trump administration putting the pressure on the president of the University of Virginia to step down. They're currently investigating the school for the DEI efforts.

The DOJ is saying that they want that president to step down. And the New York Times is saying that's what's making this different than all the other battles that they've done, because this is the first time the administration has pushed a university to remove its leader. He's been the president there since 2018. So this is a big move for that with all the talks. Where are the courts? I mean, forget about whatever the name of the school is.

doesn't the judiciary just show up at some point? Well, we've seen that in the case of Harvard over these last few weeks, sort of allowing Harvard to continue to allow international students in, for example. But I think what's so fascinating about this story by Michael Schmidt of The Times is just the power that's being exercised on this public state university, as you say, at least to bring up the fact that they're trying to get this leader out who'd been at Harvard, by the way. He'd been, I think, the dean of the education school at Harvard before this. So we'll see where this goes. But a sort of...

You see it ratcheting up here. The administration's kind of the vice it's putting on these schools, public and private. I had a wonderful conversation with an executive of a college the other day. It doesn't matter where they are. And we both agreed it's a world turned upside down for all sorts of reasons. Post-COVID, there's fewer kids now.

You know, just the normal grinding of education is tough right now. Yeah. And everyone's sort of worried about where all this is headed. We'll have to see. Lisa, next, please. Okay. I'm about due for a Costco run. Okay. And I have to prepare the budget because you usually drop about $500 every time you go. She's got four freezers. I see. Yeah. Lining the garage wall. She turns her freezers on in the garage and stat my own browns out. I do. All right.

But here's why I thought, that's why I thought this story was interesting, okay? It's on the terminal. Source is telling Bloomberg that Target is looking into the sale of more products in larger quantities. So they want to start doing the bulk items on their website because they say it's going to provide greater value, like coffee and snacks and things like that, because they want to compete with Costco, but also Walmart. So you can get the bulk without the membership price. Do you stand at home and regret that?

that you bought paper plates for 2030? When you buy bulk, do you stare at it and go, that was dumb? No, the only time I do is produce when it goes bad, and I get really mad. Costco have produce? They do, and they have great produce. So, yes, that's the only time I get mad. Bulk and Whole Foods is if you can get avocados. If they have them in stock. If they have them. And aren't ripe or overdone. Costco's killing it. I mean, on a shareholder return, it's amazing.

I'm telling you, I was on to something a long time ago. You got your tassel from the Gritty Palace. She's going to get the gold membership card from Costco. She's doing better, trust me. $1,600 a night. Next. All right, so we go from Target to the elite world of private jets, okay? So celebrities, business owners love them. But you've always heard about the environmental impact

Remember the stories with the Super Bowl and all that. So the Washington Post, yes, Davos too, they pointed to this report. It highlights that globally, private jets emitted up to 19.5 million metric tons of greenhouse gases in 2023. And here's what's interesting. That year, private jets, they polluted more than the total of all commercial flights that were departing from London's Heathrow Airport. So that is huge. And the U.S. is ranking high. Yeah.

I hope you hear this and exercise more discretion in terms of your use of the surveillance. Well, I usually don't have it. I went back and forth with Brammo last night. And, you know, we're looking at the Dassault, but it's not the one Taylor Swift has. It's a cheaper one. And we're staying with Gulfstream. You've always bought used, which I think is smart. Yeah, we do. And we didn't price up. I said to Mike, I said, I'm just not getting a G6.

And the answer is the engine pollution is a big deal. It is. It is. You're not going to have to take that to the wedding to Venice. You can't. But Sweeney took the Sikorsky out to the U.S. He did. He had to get out there fast. Stenevec couldn't get a seat. He had to take the taxi. Lisa Mateo, the newspapers. Thank you so much. This is the Bloomberg Surveillance Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts.

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