Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Well, it is the doubling down of a relationship that's already existed for many years. We're talking about that between two very well known household tech giants in UH that have been in the news a lot, and we're talking about Apple and Google specifically.

Well, it is the doubling down of a relationship that's already existed for many years. We're talking about that between two very well known household tech giants in UH that have been in the news a lot, and we're talking about Apple and Google specifically.

Yeah, this story by Bloomberg's Mark German an exclusive and it's among the most read stories on the Bloomberg today. It's certainly caught the attention to of investors, sending both stocks hire today and giving a lift to the overall equity trade today.

Yeah, this story by Bloomberg's Mark German an exclusive and it's among the most read stories on the Bloomberg today. It's certainly caught the attention to of investors, sending both stocks hire today and giving a lift to the overall equity trade today.

All Right, so let's get to it for more and what's going on. Let's bring in Mark German on his story. Marks, Bloomberg News chief technology reporter, joining us from LA Along. Also with us is Bloomberg News Senior Executive editor for Global Technology, Tom Giles. He's here in studio Mark's story though, as we said, and exclusive among I think it's a top the most read mark. Let's start with you lay it out for us in terms of the news and what you are hearing.

All Right, so let's get to it for more and what's going on. Let's bring in Mark German on his story. Marks, Bloomberg News chief technology reporter, joining us from LA Along. Also with us is Bloomberg News Senior Executive editor for Global Technology, Tom Giles. He's here in studio Mark's story though, as we said, and exclusive among I think it's a top the most read mark. Let's start with you lay it out for us in terms of the news and what you are hearing.

Yeah, where you're hearing that. Apple and Google are and talks for Apple to license Gemini. That's Google's top generative AI, a large language model for integration into the iPhone and iOS eighteen and the iPad later this year. Apple has its own homegrown AI, including some GENAI that will be based into the device. Those will be models that run on the phone themselves. But what a lot of consumers are clamoring for are like Gemini, Microsoft Copilot, Chat, GBT, the ability to type in a short prompt and get an essay, a letter, or an image or what not created for you that's very reliant on the cloud. It's a very expensive endeavor obviously that comes with a lot of challenges and scrutiny as well, and so Apple felt like going with a partner at least this year isn't its best interest. It has talked to open AI, and it has talked to Google. The open AI talks happened recently, but the Google talks are active, and it appears both Google and Apple are keen on getting something done by June. Obviously this could still fall apart, but this is what's happening right now, the two being in discussions.

Yeah, where you're hearing that. Apple and Google are and talks for Apple to license Gemini. That's Google's top generative AI, a large language model for integration into the iPhone and iOS eighteen and the iPad later this year. Apple has its own homegrown AI, including some GENAI that will be based into the device. Those will be models that run on the phone themselves. But what a lot of consumers are clamoring for are like Gemini, Microsoft Copilot, Chat, GBT, the ability to type in a short prompt and get an essay, a letter, or an image or what not created for you that's very reliant on the cloud. It's a very expensive endeavor obviously that comes with a lot of challenges and scrutiny as well, and so Apple felt like going with a partner at least this year isn't its best interest. It has talked to open AI, and it has talked to Google. The open AI talks happened recently, but the Google talks are active, and it appears both Google and Apple are keen on getting something done by June. Obviously this could still fall apart, but this is what's happening right now, the two being in discussions.

Hey, Mark, does it also tell us a story? Does it tell you a story about where Apple is when it comes to its progress on AI right now? Yeah, and that's the real question.

Hey, Mark, does it also tell us a story? Does it tell you a story about where Apple is when it comes to its progress on AI right now? Yeah, and that's the real question.

It tells us that Apple has not made as much progress as it would need to on the generative AI and cloud based generative AI front specifically. I do think they have made a lot of progress on on device AI in day to day usability, but either it has not made progress or it doesn't feel like it needs to make progress on cloud based GENAI specifically based on short prompts I would imagine do come down to the fact that they need They know they need to get this out this year. They know Google's the best. Why not expand that search deal? Maybe make some money off of it too well, having far less liability than they would if they went in house.

It tells us that Apple has not made as much progress as it would need to on the generative AI and cloud based generative AI front specifically. I do think they have made a lot of progress on on device AI in day to day usability, but either it has not made progress or it doesn't feel like it needs to make progress on cloud based GENAI specifically based on short prompts I would imagine do come down to the fact that they need They know they need to get this out this year. They know Google's the best. Why not expand that search deal? Maybe make some money off of it too well, having far less liability than they would if they went in house.

Yeah, I do feel like the pressure is on all of the big tech names to kind of really move forward when it comes to AI. Tom Giles, come on in on this, because I feel like when you hear Apple and Google get together on anything I feel like exponentially the impact, and I think about regulators just being like, wait, what are you two doing now again.

Yeah, I do feel like the pressure is on all of the big tech names to kind of really move forward when it comes to AI. Tom Giles, come on in on this, because I feel like when you hear Apple and Google get together on anything I feel like exponentially the impact, and I think about regulators just being like, wait, what are you two doing now again.

As we saw this story coming together, the wheels in my head started turning. Immediately. My thinking is DOJ and FTC are going to look at this, this agreement should it come together with great interest. As we all know, DOJ is already looking into that relationship between Apple and Google that gives Apple, that gives Google added prominence on the iPhone when.

As we saw this story coming together, the wheels in my head started turning. Immediately. My thinking is DOJ and FTC are going to look at this, this agreement should it come together with great interest. As we all know, DOJ is already looking into that relationship between Apple and Google that gives Apple, that gives Google added prominence on the iPhone when.

It comes to search right, when it comes to search right.

It comes to search right, when it comes to search right.

But so if you see something that deepens the relationship between two of the most powerful companies in the world, you're gonna want to make sure that that's not something that's gonna thwart competition or in any way hurt the consumer somehow keep competitors from getting into this space. So there's lots of questions that they have that they're going to ask. And already the FTC is looking at the relationship when it comes to AI between Microsoft and open AI. So these kinds of things they're gonna.

But so if you see something that deepens the relationship between two of the most powerful companies in the world, you're gonna want to make sure that that's not something that's gonna thwart competition or in any way hurt the consumer somehow keep competitors from getting into this space. So there's lots of questions that they have that they're going to ask. And already the FTC is looking at the relationship when it comes to AI between Microsoft and open AI. So these kinds of things they're gonna.

They're gonna be why Whiteboard, I'm assuming you guys had this massive We're.

They're gonna be why Whiteboard, I'm assuming you guys had this massive We're.

Gonna want to look at the fine at the details the fine print.

Gonna want to look at the fine at the details the fine print.

So Mark, it's funny when you when you talk about Apple and Alphabet, you know they're certainly competitors to the extent that Alphabet has the Android operating system, which you know is the biggest operating system in competition with Apple's iOS. But at the same time they are partners, and Apple has had partnerships with once rivals in the past. I think back to this event in twenty fifteen, when I think it was an iPhone event or maybe an iPad event, where a Microsoft executive was on stage, and it was such a big deal that like a Microsoft executive was actually on stage at this event. If this partnership comes to fruition, is it that big of a deal or is it not that big of a deal because Apple and Google have had a partnership in the past.

So Mark, it's funny when you when you talk about Apple and Alphabet, you know they're certainly competitors to the extent that Alphabet has the Android operating system, which you know is the biggest operating system in competition with Apple's iOS. But at the same time they are partners, and Apple has had partnerships with once rivals in the past. I think back to this event in twenty fifteen, when I think it was an iPhone event or maybe an iPad event, where a Microsoft executive was on stage, and it was such a big deal that like a Microsoft executive was actually on stage at this event. If this partnership comes to fruition, is it that big of a deal or is it not that big of a deal because Apple and Google have had a partnership in the past.

I certainly remember that iPad pro announcement that was in September twenty fifteen, and Microsoft at the time, under their new CEO, Sat Nadela, at the time, their goal was to get their software and services everywhere. Apple's goal at the time was to make the iPad more of an office device, and so there was some mutual benefit there getting office on the iPad would be good for both parties. In this case, getting Gemini built into the iPhone would also.

I certainly remember that iPad pro announcement that was in September twenty fifteen, and Microsoft at the time, under their new CEO, Sat Nadela, at the time, their goal was to get their software and services everywhere. Apple's goal at the time was to make the iPad more of an office device, and so there was some mutual benefit there getting office on the iPad would be good for both parties. In this case, getting Gemini built into the iPhone would also.

Be good for both parties.

Be good for both parties.

Apple would be able to push new AI features that everyone's claiming for to its two billion users, and Gemini would be gaining many more users and a stronghold on one of the most popular devices of our lifetimes. Right, and I want one more thing I want to add. Tom's point is excellent about the FTC and the DOJ. Our thinking on this is that in order to combat those concerns, Apple probably will have to have an API or some sort of sort or feature for other generative AI providers, maybe Open AI, maybe Anthropic, maybe someone else, to be able to integrate themselves into iOS as an alternative and better yeat. Apple probably would have to let users choose when you boot up the phone for the first time, who you want your generative AI provider to be, or as Tom said, the DOJ and FTC are going to be smelling around pretty quickly.

Apple would be able to push new AI features that everyone's claiming for to its two billion users, and Gemini would be gaining many more users and a stronghold on one of the most popular devices of our lifetimes. Right, and I want one more thing I want to add. Tom's point is excellent about the FTC and the DOJ. Our thinking on this is that in order to combat those concerns, Apple probably will have to have an API or some sort of sort or feature for other generative AI providers, maybe Open AI, maybe Anthropic, maybe someone else, to be able to integrate themselves into iOS as an alternative and better yeat. Apple probably would have to let users choose when you boot up the phone for the first time, who you want your generative AI provider to be, or as Tom said, the DOJ and FTC are going to be smelling around pretty quickly.

I also do wonder about Gemini, Apple, Google, who gets I mean, who benefits more? You just said mark Gemini into the iPhone. It's good for both parties. Did one of them need to do this more than the other. Was the pressure on Apple?

I also do wonder about Gemini, Apple, Google, who gets I mean, who benefits more? You just said mark Gemini into the iPhone. It's good for both parties. Did one of them need to do this more than the other. Was the pressure on Apple?

You in?

You in?

Yeah, you know, I would say the easy answer is the pressure is more so on Apple, But I think there's pressure on both companies, right Google. You know, Search obviously is down. Google is looking for, you know, new areas of growth and getting its next big thing on the world's biggest or second biggest platform. You know, it's a big deal for them. They're already owning their own in house platform. They'll own number one, and now they could own number two on AI as well. So I think the pressure is probably equal on both, maybe more so on Google, because I think if Apple didn't do anything this year on the A front, if they didn't do this, it would be a bad look. We'd certainly criticize them heavily for it. But would their revenue drop significantly? Would people stop buying iPhones? Probably not so. Certainly, maybe the pressure is more on Google, but certainly on both.

Yeah, you know, I would say the easy answer is the pressure is more so on Apple, But I think there's pressure on both companies, right Google. You know, Search obviously is down. Google is looking for, you know, new areas of growth and getting its next big thing on the world's biggest or second biggest platform. You know, it's a big deal for them. They're already owning their own in house platform. They'll own number one, and now they could own number two on AI as well. So I think the pressure is probably equal on both, maybe more so on Google, because I think if Apple didn't do anything this year on the A front, if they didn't do this, it would be a bad look. We'd certainly criticize them heavily for it. But would their revenue drop significantly? Would people stop buying iPhones? Probably not so. Certainly, maybe the pressure is more on Google, but certainly on both.

From the investor point of view, you have to look at the perception that there are some players that are far further ahead when it comes to generative AI. A lot of people are giving a lot of props to Sachi Nadella and Microsoft for getting in on that relationship with open Ai at an early stage, making a big invation and being seen as leaders. There's a lot of criticism about Google on the other hand, as being something of a laggorty. They should have been way ahead of the game when it comes to AI. They've got deep mind, they had their own AI team at work. Sometimes those two teams worked at loggerheads with each other. They're getting that better, but they are seen as being behind Microsoft and its relationship with open Ai. You see Meta coming from out of left field with its lms. It's open sourcing them. There's a lot of momentum behind that, and Zuck is putting a big push behind that, and Apple of those big players. You really would like to see Apple being in that conversation. It's not in those conversations. It's not being mentioned in the same breath Microsoft, Open Ai, and even Google.

From the investor point of view, you have to look at the perception that there are some players that are far further ahead when it comes to generative AI. A lot of people are giving a lot of props to Sachi Nadella and Microsoft for getting in on that relationship with open Ai at an early stage, making a big invation and being seen as leaders. There's a lot of criticism about Google on the other hand, as being something of a laggorty. They should have been way ahead of the game when it comes to AI. They've got deep mind, they had their own AI team at work. Sometimes those two teams worked at loggerheads with each other. They're getting that better, but they are seen as being behind Microsoft and its relationship with open Ai. You see Meta coming from out of left field with its lms. It's open sourcing them. There's a lot of momentum behind that, and Zuck is putting a big push behind that, and Apple of those big players. You really would like to see Apple being in that conversation. It's not in those conversations. It's not being mentioned in the same breath Microsoft, Open Ai, and even Google.

It does feel like today's news has kind of changed that, right, Like, all of a sudden, the conversation maybe all right, I don't know that Apple all of a sudden, we're looking at differently a little bit.

It does feel like today's news has kind of changed that, right, Like, all of a sudden, the conversation maybe all right, I don't know that Apple all of a sudden, we're looking at differently a little bit.

Potent that it has. There's a strong relationship with Google and it's going to capitalize on that and weave more of those open those AI features into the iPhone, providing a huge platform and a huge validation for what Google's been doing. Both have the potential to benefit tremendously from this.

Potent that it has. There's a strong relationship with Google and it's going to capitalize on that and weave more of those open those AI features into the iPhone, providing a huge platform and a huge validation for what Google's been doing. Both have the potential to benefit tremendously from this.

And Tim, I think about how much we've talked about Google Right and the criticism of Gemini, specifically in terms of some of the biased concerns.

And Tim, I think about how much we've talked about Google Right and the criticism of Gemini, specifically in terms of some of the biased concerns.

Yeah, so talk a little bit about that, mark, because it was just a couple of weeks ago that we were talking about all the challenges that Alphabet was facing in its AI ambitions and the CEO of the company had to essentially come out and say, well, you know, wait a second, this is not acceptable to us, and we're working on this to try to make it better.

Yeah, so talk a little bit about that, mark, because it was just a couple of weeks ago that we were talking about all the challenges that Alphabet was facing in its AI ambitions and the CEO of the company had to essentially come out and say, well, you know, wait a second, this is not acceptable to us, and we're working on this to try to make it better.

Yeah, I know those I'm familiar. There was some controversy on Twitter and other social media about, you know, which races were portrayed in a historical context. This is my understanding. My understanding is that Google would provide the Gemini underlying model to Apple Right, which apparently did not have the issue. And this particular issue that Sun Darpa Chai, as you said, commented on and was at the center of the controversy, was related to the end user interface of the Google chatbot. So it's apparent that or apparently from what I'm told, this issue wouldn't have been replicated on the iPhone integration.

Yeah, I know those I'm familiar. There was some controversy on Twitter and other social media about, you know, which races were portrayed in a historical context. This is my understanding. My understanding is that Google would provide the Gemini underlying model to Apple Right, which apparently did not have the issue. And this particular issue that Sun Darpa Chai, as you said, commented on and was at the center of the controversy, was related to the end user interface of the Google chatbot. So it's apparent that or apparently from what I'm told, this issue wouldn't have been replicated on the iPhone integration.

You know, it's really interesting, Tim and I are both reading Caris Swisher's book that kind of takes you through so much in the technology world.

You know, it's really interesting, Tim and I are both reading Caris Swisher's book that kind of takes you through so much in the technology world.

Now.

Now.

I know our own team has really just chronicled it so well over the last couple of decades or the last decade and a half. But I just think about how, you know, Tom, there are companies that were so much seemingly at the forefront that all of a sudden they weren't. And I do feel like you see this jocking among especially some of the establishment, of like we got to be on this because this is what we all think is the next wave.

I know our own team has really just chronicled it so well over the last couple of decades or the last decade and a half. But I just think about how, you know, Tom, there are companies that were so much seemingly at the forefront that all of a sudden they weren't. And I do feel like you see this jocking among especially some of the establishment, of like we got to be on this because this is what we all think is the next wave.

Well, I'm really struck by if you look at the share price of these companies. I mean, Apple rocketed ahead, became the world's most valuable company, but at Stock has kind of, you know, taken a turn for the worst. By contrast, I'm fascinated by you look the share price for Meta on the other end. A couple of years ago, Meta was on the ropes. We were talking about the existential threat posed by companies like TikTok. For example, we were talking about the things that Apple has done, sort of changing and making it harder for you to monetize advertising on the iPhone, and that really hurt Facebook. A couple of years ago, their stock was tanking as a result of all these things. Now look at how Meta's performing visa the Apple. The story has changed dramatically.

Well, I'm really struck by if you look at the share price of these companies. I mean, Apple rocketed ahead, became the world's most valuable company, but at Stock has kind of, you know, taken a turn for the worst. By contrast, I'm fascinated by you look the share price for Meta on the other end. A couple of years ago, Meta was on the ropes. We were talking about the existential threat posed by companies like TikTok. For example, we were talking about the things that Apple has done, sort of changing and making it harder for you to monetize advertising on the iPhone, and that really hurt Facebook. A couple of years ago, their stock was tanking as a result of all these things. Now look at how Meta's performing visa the Apple. The story has changed dramatically.

Well, Tom, I'm curious about this idea of a land grab for AI going on right now, because each of these big megacap companies has their own identity, right Facebook, Meta owns social networking, Apple owns the iPhone and the mobile operating system, at least at the high end. Right, you have Alphabet that owns search. You have Microsoft, which would say that it owns productivity, but it plays in a lot of different areas. And now they're all going after what is essentially the same thing. Is there any sort of historical corollary for that? When you have so many companies that are known for their own thing kind of going after a new thing.

Well, Tom, I'm curious about this idea of a land grab for AI going on right now, because each of these big megacap companies has their own identity, right Facebook, Meta owns social networking, Apple owns the iPhone and the mobile operating system, at least at the high end. Right, you have Alphabet that owns search. You have Microsoft, which would say that it owns productivity, but it plays in a lot of different areas. And now they're all going after what is essentially the same thing. Is there any sort of historical corollary for that? When you have so many companies that are known for their own thing kind of going after a new thing.

Yeah, and some of them do better than others. I mean the Internet, some of them, you know, built themselves on that, and others got left behind. Microsoft comes to mind, for example, when it comes to mobile telephony. You know, Apple sprinted ahead and really has owned that space. Google came in and with Android has done very very well. But if you look at dominance of the hardware and of the US market, Apple has kind of really run away with that. Microsoft went nowhere, So.

Yeah, and some of them do better than others. I mean the Internet, some of them, you know, built themselves on that, and others got left behind. Microsoft comes to mind, for example, when it comes to mobile telephony. You know, Apple sprinted ahead and really has owned that space. Google came in and with Android has done very very well. But if you look at dominance of the hardware and of the US market, Apple has kind of really run away with that. Microsoft went nowhere, So.

Mark come back in on because I think about just the last is it week or so or two weeks or so? Apple give it up on the car after ten years and now this potential deal, it looks like with Google moving kind of all in pretty aggressively. It feels like with artificial intelligence, how are you kind of looking at Apple holistically right now on this news?

Mark come back in on because I think about just the last is it week or so or two weeks or so? Apple give it up on the car after ten years and now this potential deal, it looks like with Google moving kind of all in pretty aggressively. It feels like with artificial intelligence, how are you kind of looking at Apple holistically right now on this news?

The presence of new artificial intelligence software and capabilities doesn't change the underlying idea that Apple's a hardware company that makes seventy five percent to eighty percent of their annual revenue from hardware. So even if they fix this underlying problem with the lack of artificial intelligence, or even when they do as I should say, doesn't fix the underlying notion that they don't necessarily have a next generation hardware product to make money off of. Now here's where those two things come together. AI could enable all sorts of new hardware products in the future.

The presence of new artificial intelligence software and capabilities doesn't change the underlying idea that Apple's a hardware company that makes seventy five percent to eighty percent of their annual revenue from hardware. So even if they fix this underlying problem with the lack of artificial intelligence, or even when they do as I should say, doesn't fix the underlying notion that they don't necessarily have a next generation hardware product to make money off of. Now here's where those two things come together. AI could enable all sorts of new hardware products in the future.

What do you mean very.

What do you mean very.

Core of that. Well, the car was an AI product right at self driving cars AI hardware, and now that AI hardware is no longer happening, So they're going to have to figure out some sort of new hardware category, whether it's based on AI, probably or not, to really move the needle revenue wise. The iPhone has completely plateaued, the iPad has been sinking, the Mac has plateaued. Some of their other products AirPods, Apple Watch, et cetera. Those are growing, right, but those are not meaningful contributors to the bottom line. The jury is still out on the Vision Pro. There are some other future categories that they're working on, so I'll mention now and some I won't, including AirPods with cameras, augmented reality glasses, but those don't really change the fundamental story. The question is what is the next big thing that could bring as much revenue and interest in as a car, And I think even for Apple right now, it's a little unclear.

Core of that. Well, the car was an AI product right at self driving cars AI hardware, and now that AI hardware is no longer happening, So they're going to have to figure out some sort of new hardware category, whether it's based on AI, probably or not, to really move the needle revenue wise. The iPhone has completely plateaued, the iPad has been sinking, the Mac has plateaued. Some of their other products AirPods, Apple Watch, et cetera. Those are growing, right, but those are not meaningful contributors to the bottom line. The jury is still out on the Vision Pro. There are some other future categories that they're working on, so I'll mention now and some I won't, including AirPods with cameras, augmented reality glasses, but those don't really change the fundamental story. The question is what is the next big thing that could bring as much revenue and interest in as a car, And I think even for Apple right now, it's a little unclear.

Hey, Mark In, I've got a question for you. In the last few seconds, can you talk about where and how Apple might use this for Vision pro and real.

Hey, Mark In, I've got a question for you. In the last few seconds, can you talk about where and how Apple might use this for Vision pro and real.

Quick Mark the yeah, that's yeah, yeah, sure, that's a great question. So there is some AI in the Vision Pro, but nothing like you've seen from what Meta has been able to do with their headsets integrating AI. There is a future I see where the vision Pro cameras could tap into this new generative AI that they're getting from Google and their in house to unite those two things. You could be walking around a grocery store. The artificial intelligence compare with those cameras tell you more about a food item you're looking at, or get a player at an NBA game. The AI combined with those cameras can tell you their stats or what their three point percentage is, depending on where they're standing behind there.

Quick Mark the yeah, that's yeah, yeah, sure, that's a great question. So there is some AI in the Vision Pro, but nothing like you've seen from what Meta has been able to do with their headsets integrating AI. There is a future I see where the vision Pro cameras could tap into this new generative AI that they're getting from Google and their in house to unite those two things. You could be walking around a grocery store. The artificial intelligence compare with those cameras tell you more about a food item you're looking at, or get a player at an NBA game. The AI combined with those cameras can tell you their stats or what their three point percentage is, depending on where they're standing behind there.

All right, now, I totally kind of get it.

All right, now, I totally kind of get it.

All right.

All right.

I wish you guys could just stay for the next hour. We so appreciate it. Markerman, Bloomberg News Chief Technology reporter and of course, Bloomberg News Senior Executive editor for Global Technology, Tom Giles, joining us in studio.

I wish you guys could just stay for the next hour. We so appreciate it. Markerman, Bloomberg News Chief Technology reporter and of course, Bloomberg News Senior Executive editor for Global Technology, Tom Giles, joining us in studio.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play, and then brought auto with a Bloomberg business act or watch us live on YouTube.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play, and then brought auto with a Bloomberg business act or watch us live on YouTube.

Check out the Treasury trade, the yields along the curve. You got that two year note climbing to its highest level this year right now at four seventy three. But we were above that level and then you had FED swaps pricing and lesson of fifty percent odds of a June rate cut. So this is kind of your backdrop for the Wednesday FED meeting.

Check out the Treasury trade, the yields along the curve. You got that two year note climbing to its highest level this year right now at four seventy three. But we were above that level and then you had FED swaps pricing and lesson of fifty percent odds of a June rate cut. So this is kind of your backdrop for the Wednesday FED meeting.

Tim, I think, needless to say a bit of an adjustment over the last few months about rate expectations. Just forty eight hours from now, of course, we are going to have our second FED decision of twenty twenty four. Well, rates are expected to stay and change. We will get an update on the Fed's projections for rates this year, and of course also on the US economy.

Tim, I think, needless to say a bit of an adjustment over the last few months about rate expectations. Just forty eight hours from now, of course, we are going to have our second FED decision of twenty twenty four. Well, rates are expected to stay and change. We will get an update on the Fed's projections for rates this year, and of course also on the US economy.

All right, it is, without a doubt one of our key focal points this week for investors with some thoughts on the rate environment in recent moves. Let's bring back Bloomberg Intelligence Chief US interest rates strategist Ira Jersey. Ira. They're out in our BI headquarters in Princeton, New Jersey. Ira, I feel like whiplash man. Listen hard to ignore what's going on in rates. I feel like over the last week, once again give us an idea. I mean, here we have what a tenure at four thirty three, at two year note at four to seventy three, and we're off kind of the highs of this session. It does feel like we are pushing up against some of the recent highs here. Does it mean that we could go even higher? How are you looking at the trade as of late?

All right, it is, without a doubt one of our key focal points this week for investors with some thoughts on the rate environment in recent moves. Let's bring back Bloomberg Intelligence Chief US interest rates strategist Ira Jersey. Ira. They're out in our BI headquarters in Princeton, New Jersey. Ira, I feel like whiplash man. Listen hard to ignore what's going on in rates. I feel like over the last week, once again give us an idea. I mean, here we have what a tenure at four thirty three, at two year note at four to seventy three, and we're off kind of the highs of this session. It does feel like we are pushing up against some of the recent highs here. Does it mean that we could go even higher? How are you looking at the trade as of late?

Yeah, So obviously the market's taken out a lot of the risk that the economy is going to slow down significantly, that the Federal Reserve is going to cut interest rates very aggressively later this year, and now it's taking a more modest approach. So right around four point seven percent is what we have on fair value for the Federal Reserve cutting three times this year and then four times next year. So we're basically right there, right, And so I think that we're we're now to get more direction on where the front end's going to going to go. It's probably going to come more from the economic data than it will from Wednesday's FED meeting. You know, I don't think Jay Powell is going to say much different than you've heard in recent Fed speak, So he's going to say, we're data dependent, We're going to move if we have to or when we can, and so you know, we'll be concentrating on some of the nerdy really details of some things as opposed to you know, when exactly the Fed's going to cut, whether it's June, July, maybe not till November.

Yeah, So obviously the market's taken out a lot of the risk that the economy is going to slow down significantly, that the Federal Reserve is going to cut interest rates very aggressively later this year, and now it's taking a more modest approach. So right around four point seven percent is what we have on fair value for the Federal Reserve cutting three times this year and then four times next year. So we're basically right there, right, And so I think that we're we're now to get more direction on where the front end's going to going to go. It's probably going to come more from the economic data than it will from Wednesday's FED meeting. You know, I don't think Jay Powell is going to say much different than you've heard in recent Fed speak, So he's going to say, we're data dependent, We're going to move if we have to or when we can, and so you know, we'll be concentrating on some of the nerdy really details of some things as opposed to you know, when exactly the Fed's going to cut, whether it's June, July, maybe not till November.

We like the nerdy stuff here, I right, So share it with me, Share it with us. What about when it comes to sort of as we get out of the curve a little bit on the ten year what's your focus on sort of expectations over the next few months and perhaps this year.

We like the nerdy stuff here, I right, So share it with me, Share it with us. What about when it comes to sort of as we get out of the curve a little bit on the ten year what's your focus on sort of expectations over the next few months and perhaps this year.

So the ten year rate at this has been moving along with interest rate policy. So you look at what's been moving, it hasn't really been inflation expectations. Inflation expectations have been pinned basically between two point two and two point four percent according to the tips market. So most of the moves in treasuries recently has come from real yields. So basically, the idea that the Federal Reserve is going to switch policy, interest rates are going to remain volatile or not volatile in this case, more volatile. So because of those things you've seen, you've seen tips yields like ten year tips shields back up again toward two percent and pushing up toward there toward that area, and if the Federal Reserve does actually ultimately cut, you'd likely see real yields, so those tips yields come down a little bit, but we're not quite there yet, so I think further out the curve, it's all. It's still about Fed policy expectations and what they're doing. That nerdy stuff though that I was talking about where things like the Fed balance sheet policy, because they mentioned Jay Powell mentioned that that at this meeting they would start to talk about what they were going to do with their balance sheet, how balance sheet runoff was going to be maintained for longer, but at lower levels. So I suspect that after this meeting we won't get an answer or recommendation, but j. Powell might lay out two or three options of what the Federal Reserve is considering or discussing. And though that's kind of where the rates nerds like myself will wind up focusing a lot of our.

So the ten year rate at this has been moving along with interest rate policy. So you look at what's been moving, it hasn't really been inflation expectations. Inflation expectations have been pinned basically between two point two and two point four percent according to the tips market. So most of the moves in treasuries recently has come from real yields. So basically, the idea that the Federal Reserve is going to switch policy, interest rates are going to remain volatile or not volatile in this case, more volatile. So because of those things you've seen, you've seen tips yields like ten year tips shields back up again toward two percent and pushing up toward there toward that area, and if the Federal Reserve does actually ultimately cut, you'd likely see real yields, so those tips yields come down a little bit, but we're not quite there yet, so I think further out the curve, it's all. It's still about Fed policy expectations and what they're doing. That nerdy stuff though that I was talking about where things like the Fed balance sheet policy, because they mentioned Jay Powell mentioned that that at this meeting they would start to talk about what they were going to do with their balance sheet, how balance sheet runoff was going to be maintained for longer, but at lower levels. So I suspect that after this meeting we won't get an answer or recommendation, but j. Powell might lay out two or three options of what the Federal Reserve is considering or discussing. And though that's kind of where the rates nerds like myself will wind up focusing a lot of our.

Time, I do also keep thinking about with rates day and kind of higher for longer, it feels like are just at least the treasury curve kind of moving up here, that how much of the work is ultimately being done by treasury investors versus what the Fed has to do.

Time, I do also keep thinking about with rates day and kind of higher for longer, it feels like are just at least the treasury curve kind of moving up here, that how much of the work is ultimately being done by treasury investors versus what the Fed has to do.

Yeah, that's an interesting point because you know, even though the curves inverted more, there was a lot of talk when we were priced in for six interest rate cuts this year that the financial conditions were too easy, that the market was easing in front of the Federal Reserve. And the market's always to do that in the modern world, right, the Market's always going to anticipate what the Fed's going to do. So in this in this environment, I agree with the idea that, you know, financial conditions aren't as tight as they were, but you look at things like credit spreads, you look at lending conditions in general, and they haven't tightened that much over the last three months. So you're still in an environment where the Fed might be forced to maintain rates a little bit higher than some people expect until it's very clear and obvious that the economy is slowing to a very great degree. So you're talking about the unemployment rate, you know, broaching toward reaching toward five percent and trending much higher. You know, the last employment report wasn't terrible. Yes, unemployment went up a little bit, but a part of that which is people re entering.

Yeah, that's an interesting point because you know, even though the curves inverted more, there was a lot of talk when we were priced in for six interest rate cuts this year that the financial conditions were too easy, that the market was easing in front of the Federal Reserve. And the market's always to do that in the modern world, right, the Market's always going to anticipate what the Fed's going to do. So in this in this environment, I agree with the idea that, you know, financial conditions aren't as tight as they were, but you look at things like credit spreads, you look at lending conditions in general, and they haven't tightened that much over the last three months. So you're still in an environment where the Fed might be forced to maintain rates a little bit higher than some people expect until it's very clear and obvious that the economy is slowing to a very great degree. So you're talking about the unemployment rate, you know, broaching toward reaching toward five percent and trending much higher. You know, the last employment report wasn't terrible. Yes, unemployment went up a little bit, but a part of that which is people re entering.

The workforce as well.

The workforce as well.

So so you know, you have you have a still an okay economy and a federal reserve that that kind of might need to maintain these levels of rates. You know, potentially it's possible throughout the rest of the year. I don't think that that's the case. I think we will have a slowing in the economy with they'll cut at some point, but it's possible that maybe they only cut, you know, fifty basis points before the end.

So so you know, you have you have a still an okay economy and a federal reserve that that kind of might need to maintain these levels of rates. You know, potentially it's possible throughout the rest of the year. I don't think that that's the case. I think we will have a slowing in the economy with they'll cut at some point, but it's possible that maybe they only cut, you know, fifty basis points before the end.

Of this year, so two.

Of this year, so two.

So two cuts, then.

So two cuts, then.

Well it's I mean, that's that's definitely that's a possibility. I think if they if the federal reserve were to cut in July, then they'd probably wind up cutting three times. But there's a you know, it's not clear what the near term path of the economy is going to be. You still have spending and retail sales that are reasonably reasonably robust. Yes, the retail sales number missed, but when you look at the the overall trend, it's still pretty decent. And then and the employment situation is good. So unless you wind up seeing inflation come down significantly or the unemployment rate pop up a lot the next two months, the Fed might not do anything until after the elections. That's not that's not that's not our base case for sure, but that is certainly a realistic possibility.

Well it's I mean, that's that's definitely that's a possibility. I think if they if the federal reserve were to cut in July, then they'd probably wind up cutting three times. But there's a you know, it's not clear what the near term path of the economy is going to be. You still have spending and retail sales that are reasonably reasonably robust. Yes, the retail sales number missed, but when you look at the the overall trend, it's still pretty decent. And then and the employment situation is good. So unless you wind up seeing inflation come down significantly or the unemployment rate pop up a lot the next two months, the Fed might not do anything until after the elections. That's not that's not that's not our base case for sure, but that is certainly a realistic possibility.

One thing that we know the Fed will do on Wednesday's release an updated summary of economic projections, the so called dot plot.

One thing that we know the Fed will do on Wednesday's release an updated summary of economic projections, the so called dot plot.

What's that?

What's that?

What's the smart thing to be looking for in the dot plot?

What's the smart thing to be looking for in the dot plot?

IRA?

IRA?

And and you know what should we what's the what are the questions we should be asking ourselves when we're looking at it.

And and you know what should we what's the what are the questions we should be asking ourselves when we're looking at it.

Yes, So, so you know, the twenty twenty four dots will get a lot of attention, you know, people and you know, all the news media outlets and the like will wind up focusing on you know, will the Fed start cutting in June or July or you know, are there are there now you know, two cuts in the dots or three as the media and by the way, we think it'll remain at three, but there'll be some changes in some of the dots. The most important thing to me and to the long term for the treasury market, like ten year treasuries will be the twenty twenty five and twenty twenty six dots. So what does the Federal Reserve anticipate doing? And in terms of the terminal rate, right, So it's not so much you know, when they're going to cut here and there. Yes, that's that's a nice talking point, but it's does the Federal Reserve and anticipate cutting to three percent two and a half percent as the long run or is that going to change? Because maybe they think that the economy is going to be more robust than they think, even if it does slow down. So if that long term dot or the twenty twenty six dots are a little bit higher than they were in December, then I think that ten year yields, yeah, might move higher, might see four and a half percent. Yet again, if they were to move those dots.

Yes, So, so you know, the twenty twenty four dots will get a lot of attention, you know, people and you know, all the news media outlets and the like will wind up focusing on you know, will the Fed start cutting in June or July or you know, are there are there now you know, two cuts in the dots or three as the media and by the way, we think it'll remain at three, but there'll be some changes in some of the dots. The most important thing to me and to the long term for the treasury market, like ten year treasuries will be the twenty twenty five and twenty twenty six dots. So what does the Federal Reserve anticipate doing? And in terms of the terminal rate, right, So it's not so much you know, when they're going to cut here and there. Yes, that's that's a nice talking point, but it's does the Federal Reserve and anticipate cutting to three percent two and a half percent as the long run or is that going to change? Because maybe they think that the economy is going to be more robust than they think, even if it does slow down. So if that long term dot or the twenty twenty six dots are a little bit higher than they were in December, then I think that ten year yields, yeah, might move higher, might see four and a half percent. Yet again, if they were to move those dots.

Up, just fascinating to kind of watch it in the moves.

Up, just fascinating to kind of watch it in the moves.

But we talked about volatility, and we've certainly seen a fair amount. But it is pretty remarkable of what we've seen in the last week.

But we talked about volatility, and we've certainly seen a fair amount. But it is pretty remarkable of what we've seen in the last week.

Hey, Ira, thank you so much.

Hey, Ira, thank you so much.

Ira. Jersey chivus interest rates strategists at Bloomberg Intelligence, joining us from OURBI headquarters in Princeton, New Jersey, and just yeah, a quick recap ten year at four thirty three, you get a two year note with a yeald of four to seventy three. Stuck in the middle of there a five year note with the yield of four to thirty five here. But we'll see, you know, We're going to have a big fed special radio, TV, YouTube and Bloomberg originals. Our gang will be on it on Wednesday, so be interesting to see what we get in terms of those projections.

Ira. Jersey chivus interest rates strategists at Bloomberg Intelligence, joining us from OURBI headquarters in Princeton, New Jersey, and just yeah, a quick recap ten year at four thirty three, you get a two year note with a yeald of four to seventy three. Stuck in the middle of there a five year note with the yield of four to thirty five here. But we'll see, you know, We're going to have a big fed special radio, TV, YouTube and Bloomberg originals. Our gang will be on it on Wednesday, so be interesting to see what we get in terms of those projections.

It's not a five percent on the tenyure like in October.

It's not a five percent on the tenyure like in October.

Not yet.

Not yet.

Yeah, okay, there it is tic Tick.

Yeah, okay, there it is tic Tick.

This is Bloomberg.

This is Bloomberg.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Easter 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 playing Bloomberg eleven thirty.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Easter 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 playing Bloomberg eleven thirty.

This story was reported out by our own Mary Schlangenstein. She reported on a company it's called JSX, their Dallas based airline beloved by work travelers for offering convenience like a chartered plane at near business class prices, and instead of flying from packed hubs, it flies from sparse private hangars. In exchange for the amenities of a big airport, passengers get a lot of convenience. So in lieu of long tsa baggage screening lines, they get their bags swabbed for explosives and walk through a weapons detector. So it sounds like kind of move through kind of quickly.

This story was reported out by our own Mary Schlangenstein. She reported on a company it's called JSX, their Dallas based airline beloved by work travelers for offering convenience like a chartered plane at near business class prices, and instead of flying from packed hubs, it flies from sparse private hangars. In exchange for the amenities of a big airport, passengers get a lot of convenience. So in lieu of long tsa baggage screening lines, they get their bags swabbed for explosives and walk through a weapons detector. So it sounds like kind of move through kind of quickly.

Yeah, it's sort of like I think what people would argue. I mean, people have flown at love it. I've talked about they. I haven't flown up before, but people absolutely love it. The thing is JSX is only able to exist thanks to what some airline rivals say as an FA loophole. The founder and CEO counters that they're just annoyed that he's treading on their turf. We've got that founder with us, Alex Wilcox, founder and CEO of JSX, and Mary Schlangenstein Bloomberg News US airlines reporter. Mary recently, as Carol mentioned, wrote about the airline that's drawn this cult following. Both Mary and Alex join us from Dallas. Alex, We're gonna get to you in just a sac but before we do, I want Mary to kind of lay out her reporting here and explain this this loophole, because Mary, you've covered airlines for years, and rivals to JSX say that that there's this loophole. Talk to us a little bit about how this airline is able to exist.

Yeah, it's sort of like I think what people would argue. I mean, people have flown at love it. I've talked about they. I haven't flown up before, but people absolutely love it. The thing is JSX is only able to exist thanks to what some airline rivals say as an FA loophole. The founder and CEO counters that they're just annoyed that he's treading on their turf. We've got that founder with us, Alex Wilcox, founder and CEO of JSX, and Mary Schlangenstein Bloomberg News US airlines reporter. Mary recently, as Carol mentioned, wrote about the airline that's drawn this cult following. Both Mary and Alex join us from Dallas. Alex, We're gonna get to you in just a sac but before we do, I want Mary to kind of lay out her reporting here and explain this this loophole, because Mary, you've covered airlines for years, and rivals to JSX say that that there's this loophole. Talk to us a little bit about how this airline is able to exist.

Well, basically, they put together two different types of certified air carriers and they were able to mix you know, a public charter with what becomes a private charter with two different types of airlines and airline certifications, and basically it lets them fly in aircraft up with more seats, with up to thirty seats, but they don't have to have the normal TSA's training or scanning. I'm sorry, they don't have to have pilots that are younger than sixty five. They can have pilots with less flight experience, and so taking advantage of those rules is what's raised some objections to JSX and other carriers like it, but it's also allowed them to operate.

Well, basically, they put together two different types of certified air carriers and they were able to mix you know, a public charter with what becomes a private charter with two different types of airlines and airline certifications, and basically it lets them fly in aircraft up with more seats, with up to thirty seats, but they don't have to have the normal TSA's training or scanning. I'm sorry, they don't have to have pilots that are younger than sixty five. They can have pilots with less flight experience, and so taking advantage of those rules is what's raised some objections to JSX and other carriers like it, but it's also allowed them to operate.

All right, Alex, come on in on this because regulators, you know, knew what you were doing.

All right, Alex, come on in on this because regulators, you know, knew what you were doing.

They signed off.

They signed off.

What do you say to some of these these critics who talk about you maybe taking advantage of a loophole.

What do you say to some of these these critics who talk about you maybe taking advantage of a loophole.

Well, I mean, I guess one person's loophole is another person's law, and it is just law. It's forty to forty five year old established law. It's law that even American Airlines does you know, it operates under.

Well, I mean, I guess one person's loophole is another person's law, and it is just law. It's forty to forty five year old established law. It's law that even American Airlines does you know, it operates under.

And they're the biggest complainer of the group here.

And they're the biggest complainer of the group here.

American Allies has a co chair with Contour, which is another part when thirty five air carrier that operates exactly under the exact same rules, with the exact same pilot experience requirements. They also sell tickets as American Airlines, but you actually wind up flying on Contour or Envoy or sky West or japan Airlines or Goal in Brazil which only has a two hundred fifty hour captain rating requirement. So this is the pot calling the kettle black. They just don't like us, and every argument they make against us is hypocritical when it comes to operations, and a lot of the people that are commenting about safety and security really are not qualified to do so. So we're very proud of our achievements, are near decade of flawless operations, and we see this purely as competitive competitive anxiety.

American Allies has a co chair with Contour, which is another part when thirty five air carrier that operates exactly under the exact same rules, with the exact same pilot experience requirements. They also sell tickets as American Airlines, but you actually wind up flying on Contour or Envoy or sky West or japan Airlines or Goal in Brazil which only has a two hundred fifty hour captain rating requirement. So this is the pot calling the kettle black. They just don't like us, and every argument they make against us is hypocritical when it comes to operations, and a lot of the people that are commenting about safety and security really are not qualified to do so. So we're very proud of our achievements, are near decade of flawless operations, and we see this purely as competitive competitive anxiety.

Alex having said that your success, sometimes success brings a lot more eyeballs, including those of regulators. Are regulators coming out to you and saying, well, wait a minute, maybe we need to rethink this.

Alex having said that your success, sometimes success brings a lot more eyeballs, including those of regulators. Are regulators coming out to you and saying, well, wait a minute, maybe we need to rethink this.

No, I mean there's been because of the efforts of two Dallas based competitors and their trade unions. They've been begging the regulators to pay attention to us. They went to the DOT, they got turned away. They went to the FAA. Eighty thousand of our customers came out in strong defense of us, and we turned them away. They went to the US Congress in connection with the current FAA Reauthorization Act, and they tried to get us outlawed under the reauthorization and politicians from both sides of the aisle who recognize the value that we bring to their communities rallied to our support again. Now they're trying to TSA. They're trying to do with sub Rosa, with the TSA, with all kinds of baseless threats about security and terrorism and very irresponsible things that frankly, as an industry, we've always agreed we would never compete on safety and security matters, and so Southwest and excuse me, Southwest and American airlines have crossed that line.

No, I mean there's been because of the efforts of two Dallas based competitors and their trade unions. They've been begging the regulators to pay attention to us. They went to the DOT, they got turned away. They went to the FAA. Eighty thousand of our customers came out in strong defense of us, and we turned them away. They went to the US Congress in connection with the current FAA Reauthorization Act, and they tried to get us outlawed under the reauthorization and politicians from both sides of the aisle who recognize the value that we bring to their communities rallied to our support again. Now they're trying to TSA. They're trying to do with sub Rosa, with the TSA, with all kinds of baseless threats about security and terrorism and very irresponsible things that frankly, as an industry, we've always agreed we would never compete on safety and security matters, and so Southwest and excuse me, Southwest and American airlines have crossed that line.

And that is a.

And that is a.

Dangerous line across because it actually makes the entire industry less safe, because it makes people unwilling to talk about safety and security in an open way, which is the way we make the system better.

Dangerous line across because it actually makes the entire industry less safe, because it makes people unwilling to talk about safety and security in an open way, which is the way we make the system better.

Mary, I want to bring you in. You reported this out.

Mary, I want to bring you in. You reported this out.

You put Alex and JSX on our radar, So come on and ask Alex the question.

You put Alex and JSX on our radar, So come on and ask Alex the question.

Alex, I wanted to ask you if you've heard anything from the FAA, if you've gotten any feedback from them in terms of the timing of their decision, and then also if you've heard anything from the TSA, which was expected to issue some proposed recommendations fairly soon.

Alex, I wanted to ask you if you've heard anything from the FAA, if you've gotten any feedback from them in terms of the timing of their decision, and then also if you've heard anything from the TSA, which was expected to issue some proposed recommendations fairly soon.

Thanks Mary.

Thanks Mary.

Now, the FAA has not communicated they're going to be taking any action. They've got to read through those seventy thousand comments first and obviously respond to the concerns rates and those things, and then if they're going to make a rule change, they're going to have to go through the regular administrative process to do so, so it'll be an NPRM, a noticeable proposed that will making that actually addresses whatever rule they may or may not make. We believe that if they are arguing me new rules, they will actually be modeled upon how we operate today. We go well above and beyond many of the rules that do apply to us already. In some cases we go above and beyond the rules that apply to the major airlines as well. And with respect to the TSA, they will respond to real threats from real bad guys, and not from retired airline executives who are taking potshots.

Now, the FAA has not communicated they're going to be taking any action. They've got to read through those seventy thousand comments first and obviously respond to the concerns rates and those things, and then if they're going to make a rule change, they're going to have to go through the regular administrative process to do so, so it'll be an NPRM, a noticeable proposed that will making that actually addresses whatever rule they may or may not make. We believe that if they are arguing me new rules, they will actually be modeled upon how we operate today. We go well above and beyond many of the rules that do apply to us already. In some cases we go above and beyond the rules that apply to the major airlines as well. And with respect to the TSA, they will respond to real threats from real bad guys, and not from retired airline executives who are taking potshots.

Hey, Alex, I should note that not all airlines have come out and been critical of your model. Investors in your company include United Airlines, Jet Blue, Qatar Airways, so there are some partners that you have with with major airlines. But I do want to know do you have a backup plan at this point if the FA were to come out and say, you know, the way that you're doing it is actually not something that we want to approve. What would be your backup plan?

Hey, Alex, I should note that not all airlines have come out and been critical of your model. Investors in your company include United Airlines, Jet Blue, Qatar Airways, so there are some partners that you have with with major airlines. But I do want to know do you have a backup plan at this point if the FA were to come out and say, you know, the way that you're doing it is actually not something that we want to approve. What would be your backup plan?

And for those who are actually listening to radio, you're smiling.

And for those who are actually listening to radio, you're smiling.

Thanks. Yeah, I know.

Thanks. Yeah, I know.

I think there's a couple of things. But first of all, thank you for pointing out it's not the industry as a whole, because I think a lot of the coverage has made it seem as though every year every major air carrier is against us, And you're absolutely right, Jet Blue and United Airlines and Guitar Aways are all investors, proud investors here at JSX. In fact, there's only two airlines that are really outspoken against us, and those are our Dallas neighbors here. American Airlines as an a long and notorious anti competitive history. They've been admonished very recently by a federal judge for what they tried to do in the Northeast as well. And Southwest Airlines, and they also put Legacy a Legacy Airlines out of business about twenty years ago here in Dallas. And Southwest Airlines is very territorial about love Field, and understandably so because they've got a ninety eight percent market share. So I think it really is not the industry. It's just American in Southwest, and it's provincial. It's related to Dallas territory. As far as a backup plan, look, I mean they're not just going to wake up one day and say, hey, you can't do this anymore.

I think there's a couple of things. But first of all, thank you for pointing out it's not the industry as a whole, because I think a lot of the coverage has made it seem as though every year every major air carrier is against us, And you're absolutely right, Jet Blue and United Airlines and Guitar Aways are all investors, proud investors here at JSX. In fact, there's only two airlines that are really outspoken against us, and those are our Dallas neighbors here. American Airlines as an a long and notorious anti competitive history. They've been admonished very recently by a federal judge for what they tried to do in the Northeast as well. And Southwest Airlines, and they also put Legacy a Legacy Airlines out of business about twenty years ago here in Dallas. And Southwest Airlines is very territorial about love Field, and understandably so because they've got a ninety eight percent market share. So I think it really is not the industry. It's just American in Southwest, and it's provincial. It's related to Dallas territory. As far as a backup plan, look, I mean they're not just going to wake up one day and say, hey, you can't do this anymore.

They couldn't do it to us anymore. They could it with the industry.

They couldn't do it to us anymore. They could it with the industry.

They would they could say, hey, you've got to do something differently on a safety or security issue that we've identified and want you to address, and we'll just address whatever that issue is. But the real thing to know about this, and it's also left out of the coverage so far, is that there are only about four hundred and eighty airports that the entire US industry, major airline industry, you can fly to. So if you're going to fly any of the any major airline, there's only four hundred eighty airports across the United States. There are over two thousand other taxpayer funded airports that right now are available only to people that have access to private aviation. And so if you're going to outlaw public charter, you know, on it completely, then that means over two thousand airports in this country will be left with zero access to the average consumer. Anyone that cannot actually buy a ticket, I'm sorry, they cannot you know, rent a private jet or own a private jet on their own, is going to be left to those one underd and needy airports and the notoriously bad service that's offered at most of them by a lot of network carriers. So, you know, the backup plan is that we're just going to comply with whatever we're departed to comply with, as we always do. We're going to maintain our outstanding compliance and reputational history, and we're going to continue to focus on our customers. And if we focus on our customers day in and day out, and on their safety and their security and their pleasure, and we're going to be just fun.

They would they could say, hey, you've got to do something differently on a safety or security issue that we've identified and want you to address, and we'll just address whatever that issue is. But the real thing to know about this, and it's also left out of the coverage so far, is that there are only about four hundred and eighty airports that the entire US industry, major airline industry, you can fly to. So if you're going to fly any of the any major airline, there's only four hundred eighty airports across the United States. There are over two thousand other taxpayer funded airports that right now are available only to people that have access to private aviation. And so if you're going to outlaw public charter, you know, on it completely, then that means over two thousand airports in this country will be left with zero access to the average consumer. Anyone that cannot actually buy a ticket, I'm sorry, they cannot you know, rent a private jet or own a private jet on their own, is going to be left to those one underd and needy airports and the notoriously bad service that's offered at most of them by a lot of network carriers. So, you know, the backup plan is that we're just going to comply with whatever we're departed to comply with, as we always do. We're going to maintain our outstanding compliance and reputational history, and we're going to continue to focus on our customers. And if we focus on our customers day in and day out, and on their safety and their security and their pleasure, and we're going to be just fun.

Alex just got about thirty seconds left chair, So I don't know in a year, two years. I mean, if everything goes as you guys are moving along right.

Alex just got about thirty seconds left chair, So I don't know in a year, two years. I mean, if everything goes as you guys are moving along right.

Now, how much bigger can you become?

Now, how much bigger can you become?

And just real quickly only get about twenty seconds.

And just real quickly only get about twenty seconds.

Sure, I mean, as you covered, as Mary well covered, we expect to be at a billion dollar run rate within the next couple of years. And you know, anything is possible once we achieved that. Could be public markets, could be maybe we buy someone here in Dallas.

Sure, I mean, as you covered, as Mary well covered, we expect to be at a billion dollar run rate within the next couple of years. And you know, anything is possible once we achieved that. Could be public markets, could be maybe we buy someone here in Dallas.

Could you be bought by somebody.

Could you be bought by somebody.

Too, or maybe we'll buy them.

Too, or maybe we'll buy them.

Could you be bought by someone though, I.

Could you be bought by someone though, I.

Mean the company doesn't belong exclusively to me, so that'd be a question for our investors.

Mean the company doesn't belong exclusively to me, so that'd be a question for our investors.

All right, great stuff, as always, really appreciate it. Alex Wilcox, Chief executive Officer JSX joining us from Dallas, and of course our marriage. Schlangenstein, USA Airlines reporter at Bloomberg News, joining us from our bureau in Dallas.

All right, great stuff, as always, really appreciate it. Alex Wilcox, Chief executive Officer JSX joining us from Dallas, and of course our marriage. Schlangenstein, USA Airlines reporter at Bloomberg News, joining us from our bureau in Dallas.

Mary, thank you, Marco.

Mary, thank you, Marco.

Journal.

Journal.

Now about you let me drive?

Now about you let me drive?

Oh no, no, no.

Oh no, no, no.

No, honey, please, I'll do the gravel. Wait, I want to try it.

No, honey, please, I'll do the gravel. Wait, I want to try it.

It's good question.

It's good question.

This is the drive to the globe. Well it on Bloomberg Radio.

This is the drive to the globe. Well it on Bloomberg Radio.

Everybody, TikTok as I like to say, TikTok everybody? What do we have eighteen minutes left in today's trading session?

Everybody, TikTok as I like to say, TikTok everybody? What do we have eighteen minutes left in today's trading session?

We haven't talked about TikTok today?

We haven't talked about TikTok today?

How that happened?

How that happened?

Every week?

Every week?

Find the week? Is young?

Find the week? Is young?

Tim?

Tim?

See what the Senate does?

See what the Senate does?

Right?

Right?

Yeah?

Yeah?

Exactly.

Exactly.

Our next guest has noted speaking of the markets, though, let's talk more broadly. Our next guest has noted this before that it's not higher for longer, but longer for longer. And we're about to see this, uh this week as we get ready for Wednesday's FED meeting. So perfect guest to talk about the Fed and a little bit more.

Our next guest has noted speaking of the markets, though, let's talk more broadly. Our next guest has noted this before that it's not higher for longer, but longer for longer. And we're about to see this, uh this week as we get ready for Wednesday's FED meeting. So perfect guest to talk about the Fed and a little bit more.

Yeah, let's welcome back Amanda Gotti, chief investment officer at the PNC Asset Management Group. She joins us once again from Philadelphia. Amanda, how are you one?

Yeah, let's welcome back Amanda Gotti, chief investment officer at the PNC Asset Management Group. She joins us once again from Philadelphia. Amanda, how are you one?

Great? How are you guys doing?

Great? How are you guys doing?

We're doing really. Well, okay, so we'll actually hate Monday.

We're doing really. Well, okay, so we'll actually hate Monday.

So I'm like, really here.

So I'm like, really here.

Yeah, come on by the end of Monday.

Yeah, come on by the end of Monday.

Everybody who hates Monday, raise your hand, like I mean, Amanda, how do you feel about Mondays?

Everybody who hates Monday, raise your hand, like I mean, Amanda, how do you feel about Mondays?

Well?

Well?

I love Mondays when I get to spend it with you. But that's a big exception to the rule.

I love Mondays when I get to spend it with you. But that's a big exception to the rule.

So big exception, all right, Carol. I know you want to ask about it in video I do.

So big exception, all right, Carol. I know you want to ask about it in video I do.

I want to start there. We'll get into the fed in the moment.

I want to start there. We'll get into the fed in the moment.

But you had some thoughts on that. I'm looking at the notes that you shared with our producer Paul Brennan. It's on your radar, it's on our radar, and video CEO jets And Wang expected to make some comments and a keynote today. Your commentary on this one, AI is much more than I believe. One company is what you said. I think, right, Yes, sorry, I'm looking at my notes here. More than one industry, let alone one company. So do you think like the obsession that investors have with Nvidia is a little crazy?

But you had some thoughts on that. I'm looking at the notes that you shared with our producer Paul Brennan. It's on your radar, it's on our radar, and video CEO jets And Wang expected to make some comments and a keynote today. Your commentary on this one, AI is much more than I believe. One company is what you said. I think, right, Yes, sorry, I'm looking at my notes here. More than one industry, let alone one company. So do you think like the obsession that investors have with Nvidia is a little crazy?

Well, it's a great question to start on, and I would say yes, in and of the moment, it feels a little bit of a frenzy, right, it does feel a little bit crazy, particularly when you look at some of these forward pe valuations in Nvidia in particular, trading in a quasi monopoly valuation level. It's still very early days, right, we haven't seen the fundamentals outside of basically in Vidia accelerate to justify some of these lofty valuations. But we really do believe in the AI store and we think that this is really like the next innovation cycle, and so there's so much more to come from this. But I think in the moment, investors are really fixated on one stock, one industry, one company, and we need to think more broadly than that, I think in terms of this secular theme.