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This is Bloomberg business Week, Insight from the reporters and editors that bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio.

This is Bloomberg business Week, Insight from the reporters and editors that bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio.

It's one day after the latest FED decision, the second decision of twenty twenty five. We're President Trump posting on social media that the FED should cut interest rates, splitting with the US Central Bank as officials way the economic cost of his tariff push. As you know, the FED did not cut rates as expected yesterday, but they did sharply reduce their twenty twenty five growth projections. Meantime, one former FED official, former New York FED President Bill Dudley, and a Bloomberg opinion columnist telling us right after the decision that the FED is in a bit of a tough place.

It's one day after the latest FED decision, the second decision of twenty twenty five. We're President Trump posting on social media that the FED should cut interest rates, splitting with the US Central Bank as officials way the economic cost of his tariff push. As you know, the FED did not cut rates as expected yesterday, but they did sharply reduce their twenty twenty five growth projections. Meantime, one former FED official, former New York FED President Bill Dudley, and a Bloomberg opinion columnist telling us right after the decision that the FED is in a bit of a tough place.

You know, I think the reality is they're flying blind. They don't really know what's going to happen the growth. They don't know what it's going to happen to inflation, and you know, that increases the risk of making a policy mistake or just being late.

You know, I think the reality is they're flying blind. They don't really know what's going to happen the growth. They don't know what it's going to happen to inflation, and you know, that increases the risk of making a policy mistake or just being late.

Tough place to be Former New York President Bill Dudley, Bloomberg opinion columnist as well yesterday and Bloomberg Surveillance. The FED decides all right to talk about the day after and also go over some US economic data points that we got this morning back with us as Bloomberg News Economics editor Molly Smith. She's here joining me and Tim. She is here in our New York studio. Molly as always so much coming at the economic universe and just investors in general. Today's US economic data looks like the labor market, okay, housing market bounce back from some weakness. What do we need to know?

Tough place to be Former New York President Bill Dudley, Bloomberg opinion columnist as well yesterday and Bloomberg Surveillance. The FED decides all right to talk about the day after and also go over some US economic data points that we got this morning back with us as Bloomberg News Economics editor Molly Smith. She's here joining me and Tim. She is here in our New York studio. Molly as always so much coming at the economic universe and just investors in general. Today's US economic data looks like the labor market, okay, housing market bounce back from some weakness. What do we need to know?

Yeah, the job was claims numbers have really just been in a bit of like a holding pattern in this kind of like no nothing state. You know, they're really very much in line with pre COVID levels, like hovering in this two twenty thousand area on the initial claims and that's nothing really to.

Yeah, the job was claims numbers have really just been in a bit of like a holding pattern in this kind of like no nothing state. You know, they're really very much in line with pre COVID levels, like hovering in this two twenty thousand area on the initial claims and that's nothing really to.

Worry about, which is great.

Worry about, which is great.

Of course, there are other data that we get later today that are referring to federal workers specifically, and those have been drifting higher as we would expect to see per all of the government firings. That we've been having, So that's.

Of course, there are other data that we get later today that are referring to federal workers specifically, and those have been drifting higher as we would expect to see per all of the government firings. That we've been having, So that's.

What is that data that we get later.

What is that data that we get later.

So that's still from the jobless claims data, it's just published a little bit later for the federal workers. Specifically that the Department Labor also puts this out later on Thursday. So we've been starting to pay closer attention for that. Not something we used to look at before, but obviously makes a lot more sense now. And then on the housing front, we saw existing home sales up beat all estimates in February.

So that's still from the jobless claims data, it's just published a little bit later for the federal workers. Specifically that the Department Labor also puts this out later on Thursday. So we've been starting to pay closer attention for that. Not something we used to look at before, but obviously makes a lot more sense now. And then on the housing front, we saw existing home sales up beat all estimates in February.

I think a lot of this was really due.

I think a lot of this was really due.

To the weather though that coming back from remember in January we had the wildfires in La. We had really bad winter weather across a lot of the South. So those were the two regions in February that really bounced back, whereas the Northeast and the Midwest not as much.

To the weather though that coming back from remember in January we had the wildfires in La. We had really bad winter weather across a lot of the South. So those were the two regions in February that really bounced back, whereas the Northeast and the Midwest not as much.

But why was this such a surprise, Molly, Because we actually saw equity markets turn higher as a result of this stronger than expected housing data. Why did this surprise analysts? They knew about the weather already.

But why was this such a surprise, Molly, Because we actually saw equity markets turn higher as a result of this stronger than expected housing data. Why did this surprise analysts? They knew about the weather already.

Yeah, you know, this was above the reading was above all estimates in the Bloomberg survey. I think that you know, the expectation for the housing market right now is really just so grim. Like you know, it's very much like we're just going to be in this really steady state of like you know, pretty tepid sales. Mortgage rates, yes, have come down a bit in recent weeks, but are still in that six point seven percent area, and home prices are still really high. Even though you're getting more inventory coming on the market, it still hasn't really made much of a dent in prices. So the outlook for housing isn't great right now. That said, we're going into this season where home sales do typically pick up in the spring, so that's going to be really.

Yeah, you know, this was above the reading was above all estimates in the Bloomberg survey. I think that you know, the expectation for the housing market right now is really just so grim. Like you know, it's very much like we're just going to be in this really steady state of like you know, pretty tepid sales. Mortgage rates, yes, have come down a bit in recent weeks, but are still in that six point seven percent area, and home prices are still really high. Even though you're getting more inventory coming on the market, it still hasn't really made much of a dent in prices. So the outlook for housing isn't great right now. That said, we're going into this season where home sales do typically pick up in the spring, so that's going to be really.

Key to watch.

Key to watch.

Okay, we have that economic data. We talked about the economic data. Now that we've had about a day to really digest what we heard from j Powell and the Federal Reserve yesterday, what are your thoughts, Molly. I was a little surprised to see the market reaction yesterday given the uncertainty that Powell express but what it was the best fed day market going all the way back to July of last year.

Okay, we have that economic data. We talked about the economic data. Now that we've had about a day to really digest what we heard from j Powell and the Federal Reserve yesterday, what are your thoughts, Molly. I was a little surprised to see the market reaction yesterday given the uncertainty that Powell express but what it was the best fed day market going all the way back to July of last year.

I think what Powell's job a lot of the time is to do is understandably not induce panic or to downplay where there might be perceptions of panic and the SEP or Summary of Economic Projections yesterday that came out before Powell spoke, For me, that would have been a bit panic inducing. I think you know that sharp cuts rvery sharp cuts to growth, you know, marked up unemployment pretty noticeably, marked up risks to inflation as well, very much. So those are things that all right now, you know, add up to what we say is statflation risks, and that was really the big word going into the press conference yesterday. But then Powell gets up there and seems to downplay all of these risks, doesn't seem to phase by it. I think something for me that was really bizarre was his idea that the marking down of growth projections and higher risks to inflation somehow balance each other out. That part I still don't really have great understanding on. But I think the market rally was really just because the Fed still sees two rate cuts this year. And I think there was a real case where what if you saw the dots price in more than that, because normally we would love to see that and that would be, you know, a good news rally. But I think in this case, if you saw more cuts priced in. That would have really clued in to say that the FED is very worried about growth and that they would have been expecting more cuts even though inflation's going to be so high.

I think what Powell's job a lot of the time is to do is understandably not induce panic or to downplay where there might be perceptions of panic and the SEP or Summary of Economic Projections yesterday that came out before Powell spoke, For me, that would have been a bit panic inducing. I think you know that sharp cuts rvery sharp cuts to growth, you know, marked up unemployment pretty noticeably, marked up risks to inflation as well, very much. So those are things that all right now, you know, add up to what we say is statflation risks, and that was really the big word going into the press conference yesterday. But then Powell gets up there and seems to downplay all of these risks, doesn't seem to phase by it. I think something for me that was really bizarre was his idea that the marking down of growth projections and higher risks to inflation somehow balance each other out. That part I still don't really have great understanding on. But I think the market rally was really just because the Fed still sees two rate cuts this year. And I think there was a real case where what if you saw the dots price in more than that, because normally we would love to see that and that would be, you know, a good news rally. But I think in this case, if you saw more cuts priced in. That would have really clued in to say that the FED is very worried about growth and that they would have been expecting more cuts even though inflation's going to be so high.

What's the analysis after we kicked it off? Mentioning what Bill Dudley, former New York FED President, said on the Bloomberg broadcast yesterday following the FED decision, saying, you know, I think the reality is that the FED is flying blind. They don't really know what's going to happen to growth, they don't know what's going to happen to inflation, and how that increases the risk of making a policy mistake. Do most folks that you talk to in the economic community feel like we just don't know what's next. I feel like there is a growing chorus of business leaders who are kind of saying that, and it's why you're seeing maybe m and a pull back, lots of things pull back.

What's the analysis after we kicked it off? Mentioning what Bill Dudley, former New York FED President, said on the Bloomberg broadcast yesterday following the FED decision, saying, you know, I think the reality is that the FED is flying blind. They don't really know what's going to happen to growth, they don't know what's going to happen to inflation, and how that increases the risk of making a policy mistake. Do most folks that you talk to in the economic community feel like we just don't know what's next. I feel like there is a growing chorus of business leaders who are kind of saying that, and it's why you're seeing maybe m and a pull back, lots of things pull back.

Yeah, it's totally fair.

Yeah, it's totally fair.

I mean, I think it's.

I mean, I think it's.

One of the funny parts of the press conference yesterday too, was when Powell had said back to a reporter when.

One of the funny parts of the press conference yesterday too, was when Powell had said back to a reporter when.

He broke out into the Grateful Dead song, No.

He broke out into the Grateful Dead song, No.

Just that part. There was one part where he had like put it back to a reporter saying, you know, like forecasting is really hard, Like what would you put down? It was like, okay, that's more your job than like hours, but it's really hard.

Just that part. There was one part where he had like put it back to a reporter saying, you know, like forecasting is really hard, Like what would you put down? It was like, okay, that's more your job than like hours, but it's really hard.

To his credit, it is very hard right now.

To his credit, it is very hard right now.

So and you saw that very much in the economic projections as well. Yeah, all of the heightened uncertainty around growth, around the labor market, around inflation.

So and you saw that very much in the economic projections as well. Yeah, all of the heightened uncertainty around growth, around the labor market, around inflation.

He's not wrong.

He's not wrong.

I think none of us really know.

I think none of us really know.

And you know, to Michael McKee's great question of how long are you going to wait to see the totality of these policies?

And you know, to Michael McKee's great question of how long are you going to wait to see the totality of these policies?

Who the heck knows right?

Who the heck knows right?

And will it be too late?

And will it be too late?

Right?

Right?

Because you have to be so preactive, I got to say, I sow, I've you know, put buttons and like, you know, things that fall off, and threading a needle can be really tough. And I feel like that's where the FED is right now. Threading a needle into terms of what we need for monetary policy.

Because you have to be so preactive, I got to say, I sow, I've you know, put buttons and like, you know, things that fall off, and threading a needle can be really tough. And I feel like that's where the FED is right now. Threading a needle into terms of what we need for monetary policy.

Not easy right now, not at all. I don't want their job. We'll just sit here and try to decipher it. Well.

Not easy right now, not at all. I don't want their job. We'll just sit here and try to decipher it. Well.

His job getting a little harder too, with President Trump saying last night that the FED should cut interest rates. Splitting with the US Central Bank is officials way the economic cost of his tariff push. This is a post on his social media network. The FED would be much better off cutting rates as US tariffs start to transition their way to the economy. Do the right thing. April second is Liberation Day in America. How does that complicate Powell's job?

His job getting a little harder too, with President Trump saying last night that the FED should cut interest rates. Splitting with the US Central Bank is officials way the economic cost of his tariff push. This is a post on his social media network. The FED would be much better off cutting rates as US tariffs start to transition their way to the economy. Do the right thing. April second is Liberation Day in America. How does that complicate Powell's job?

Well, Well, one thing, it totally breaks with a long standing practice that you know, the FED is an independent institution that.

Well, Well, one thing, it totally breaks with a long standing practice that you know, the FED is an independent institution that.

Yes, going all the way back to d eighteen, right.

Yes, going all the way back to d eighteen, right.

A long time, and Powell has been a very staunch supporter as it did this last time, right. Yeah, Like presidents don't usually comment on monetary policy, that's not their job justice, Powell will often say real comments on fiscal policy.

A long time, and Powell has been a very staunch supporter as it did this last time, right. Yeah, Like presidents don't usually comment on monetary policy, that's not their job justice, Powell will often say real comments on fiscal policy.

So that's one thing.

So that's one thing.

The other thing is that if the as I was kind of saying before, if the FED was going to price in more rate cut ex expectations this year, I think it honestly would have the inverse effect of what Trump is going for. I think more people would perceive that as the FED is really worried about growth and that even though inflation's projected to be elevated, we need to step in to save the economy, So I don't think that would honestly have the effect that Trump is going for.

The other thing is that if the as I was kind of saying before, if the FED was going to price in more rate cut ex expectations this year, I think it honestly would have the inverse effect of what Trump is going for. I think more people would perceive that as the FED is really worried about growth and that even though inflation's projected to be elevated, we need to step in to save the economy, So I don't think that would honestly have the effect that Trump is going for.

All Right, lots to keep on our mind, Molly, Thanks so much, Bloomberg News Economics editor, Molly Smith. All right, that is your economic update on this Thursday. Now what it all means for those who have to invest in this market where instability seems to be the norm. Volatility we see it today due to trade war uncertainties, and despite as we just talked about with Molly, a bounce back in some housing and certainly job data looking pretty positive, we do get a big test tomorrow with the expiration of four and a half trillion dollars worth of options contracts. So helping make sense of the trade for us here at Bloomberg is Bloomberg Opinion columnist Connor Sen. He is founder of Peachtree Creek Investments. He joins us from Atlanta. Hey, Connor, good to have you back here with Tim and myself. You know, there are always buyers and sellers in the market, right, and whether there's more or less of one really kind of helps develop, you know, or determine the flows, the demand, the pricing. But I do think about and with the acknowledgement that there's always buyers and sellers. Is today's market investable in your view?

All Right, lots to keep on our mind, Molly, Thanks so much, Bloomberg News Economics editor, Molly Smith. All right, that is your economic update on this Thursday. Now what it all means for those who have to invest in this market where instability seems to be the norm. Volatility we see it today due to trade war uncertainties, and despite as we just talked about with Molly, a bounce back in some housing and certainly job data looking pretty positive, we do get a big test tomorrow with the expiration of four and a half trillion dollars worth of options contracts. So helping make sense of the trade for us here at Bloomberg is Bloomberg Opinion columnist Connor Sen. He is founder of Peachtree Creek Investments. He joins us from Atlanta. Hey, Connor, good to have you back here with Tim and myself. You know, there are always buyers and sellers in the market, right, and whether there's more or less of one really kind of helps develop, you know, or determine the flows, the demand, the pricing. But I do think about and with the acknowledgement that there's always buyers and sellers. Is today's market investable in your view?

I think so, just that the market we had coming into the year was very momentum driven a lot of optimism about the Trump administration, and I think we've seen over the past month that that momentum has really come out of the market. The Trump optimism is more mixed, and so that sort of fast money trade, hot money trade has really come out of the market, but sort of a lot of parts of the market are still not really that concerned about recession, and so basically you're getting better valuations on stocks than need a month ago without yet the kind of recession concern that you've gotten over the past two years. A few times.

I think so, just that the market we had coming into the year was very momentum driven a lot of optimism about the Trump administration, and I think we've seen over the past month that that momentum has really come out of the market. The Trump optimism is more mixed, and so that sort of fast money trade, hot money trade has really come out of the market, but sort of a lot of parts of the market are still not really that concerned about recession, and so basically you're getting better valuations on stocks than need a month ago without yet the kind of recession concern that you've gotten over the past two years. A few times.

Color, what about the rotation that we're seeing out of US equities into international equities. I've spoken to two friends. They're not in finance. They're normal people who are thinking about their own retirement. They have nothing to do with investing day to day in the market. But both of them have said to me, I'm selling US equities and I'm investing outside of the US. I think that it's a little turbulent here right now, and I think the opportunities outside of the US. What do you make of that?

Color, what about the rotation that we're seeing out of US equities into international equities. I've spoken to two friends. They're not in finance. They're normal people who are thinking about their own retirement. They have nothing to do with investing day to day in the market. But both of them have said to me, I'm selling US equities and I'm investing outside of the US. I think that it's a little turbulent here right now, and I think the opportunities outside of the US. What do you make of that?

I think from a narrative standpoint, I get it in that sort of over the past few years, the US was seen as the only game in town globally to invest, and I think that explains a lot of the valuations you saw in US large cap stocks last year, when you had Costco at fifty five times earnings and Walmart at thirty five times earnings. It wasn't just the tech stocks, so sort of a belief that don't bet against America. American companies are going to win, and there's no growth anywhere else in the world. And so I think now you're seeing, well, you know, there is a need for capital in Europe and we're seeing the stock market perform better there. I'm sure globally a lot of investors who were sort of betting on the US or I feel kind of just you know, deceived, and so they're looking to repatriot capital. And at least for now, I get the story of well, Europe's going to grow faster, the US is more mixed, So let's rotate money out of the US to other parts of the world.

I think from a narrative standpoint, I get it in that sort of over the past few years, the US was seen as the only game in town globally to invest, and I think that explains a lot of the valuations you saw in US large cap stocks last year, when you had Costco at fifty five times earnings and Walmart at thirty five times earnings. It wasn't just the tech stocks, so sort of a belief that don't bet against America. American companies are going to win, and there's no growth anywhere else in the world. And so I think now you're seeing, well, you know, there is a need for capital in Europe and we're seeing the stock market perform better there. I'm sure globally a lot of investors who were sort of betting on the US or I feel kind of just you know, deceived, and so they're looking to repatriot capital. And at least for now, I get the story of well, Europe's going to grow faster, the US is more mixed, So let's rotate money out of the US to other parts of the world.

Hey, one of the things I wanted to ask you here we are Connor one day after the FED and Tim was kidding or we kid it at the top of the broadcast, like, don't look at your four oh one k right now. I, however, did And I am wondering about you know a column you wrote that gets into where the stock market goes, the economy will follow. We have seen a pullback in stock so far, certainly this year. So based on that, where do you think the US economy has had in your view? It sounds like you're not talking about recession, but I am curious how you kind of tie these together.

Hey, one of the things I wanted to ask you here we are Connor one day after the FED and Tim was kidding or we kid it at the top of the broadcast, like, don't look at your four oh one k right now. I, however, did And I am wondering about you know a column you wrote that gets into where the stock market goes, the economy will follow. We have seen a pullback in stock so far, certainly this year. So based on that, where do you think the US economy has had in your view? It sounds like you're not talking about recession, but I am curious how you kind of tie these together.

We've had a negative momentum in the US economy, I would say for about a year. I think the soft landing ended last spring full employment and the bus spring. But the acceleration and growth we're seeing is just very, very slow, and it's not fall off a cliff like we saw with Lehman Brothers in two thousand and eight or with COVID, and so I think that's a case where I don't think we're gonna have recession over the next six months. For I think housing's already kind of dead, so it's hard to kill housing again. And AI is the other risk at economy that I see, and that seems like more of a twenty twenty six story. With all the CAPEX spent, what's going to happen this year? And so I do think that high end consumption growth could be slower, maybe pretty stagnant this year. But you're not really seeing signs of growth falling off a table or the kinds of fragilities that would lead to a recession at least over the next few months.

We've had a negative momentum in the US economy, I would say for about a year. I think the soft landing ended last spring full employment and the bus spring. But the acceleration and growth we're seeing is just very, very slow, and it's not fall off a cliff like we saw with Lehman Brothers in two thousand and eight or with COVID, and so I think that's a case where I don't think we're gonna have recession over the next six months. For I think housing's already kind of dead, so it's hard to kill housing again. And AI is the other risk at economy that I see, and that seems like more of a twenty twenty six story. With all the CAPEX spent, what's going to happen this year? And so I do think that high end consumption growth could be slower, maybe pretty stagnant this year. But you're not really seeing signs of growth falling off a table or the kinds of fragilities that would lead to a recession at least over the next few months.

What's the AI risk that you see. I'm here in San Francisco right now, everybody's talking about Nvidia GtC. We're going to be hearing from ED in just a few minutes. What's the AI risk?

What's the AI risk that you see. I'm here in San Francisco right now, everybody's talking about Nvidia GtC. We're going to be hearing from ED in just a few minutes. What's the AI risk?

For me?

For me?

It's just sort of the dollars being spent. So if tens or hundreds of billion of dollars are being spent on chips and data centers and power generation the utilities, it's really that going away that would create the recession risk. And I think just the lead times to cutting spending on that are more than a few months, a few quarters, and so it's really companies have committed to spend money in twenty twenty five, it's really twenty twenty six that the question mark is, and we're just not going to know about that for at least six months. So I think in twenty five maybe markets don't do well, but the economy probably a stagnation is the worst case scenario rather than.

It's just sort of the dollars being spent. So if tens or hundreds of billion of dollars are being spent on chips and data centers and power generation the utilities, it's really that going away that would create the recession risk. And I think just the lead times to cutting spending on that are more than a few months, a few quarters, and so it's really companies have committed to spend money in twenty twenty five, it's really twenty twenty six that the question mark is, and we're just not going to know about that for at least six months. So I think in twenty five maybe markets don't do well, but the economy probably a stagnation is the worst case scenario rather than.

A bad recession, but not stagflation.

A bad recession, but not stagflation.

I don't think so. I'm kind of with the that the tariffs are likely more of a one time impact, and it might be a significant one time impact, depending on how sizable they are, but it's just not going to be a nineteen seventies thing, even a twenty twenty two thing. It'll just be, you know, some prices went up for a few months, and then after that one time price shock, it sort of happened. And that's even if companies feel like they can pass along those prices, and that's not clear the moment that they're willing to do so.

I don't think so. I'm kind of with the that the tariffs are likely more of a one time impact, and it might be a significant one time impact, depending on how sizable they are, but it's just not going to be a nineteen seventies thing, even a twenty twenty two thing. It'll just be, you know, some prices went up for a few months, and then after that one time price shock, it sort of happened. And that's even if companies feel like they can pass along those prices, and that's not clear the moment that they're willing to do so.

All right, So I'm going to get a bunch of hate mail, but I'm only, you know, pigging back on what fed Jo J. Powell said about tariff's like transitory, We never get that wrong. Not a hot word here, but I mean, truly, do you believe that the impact of tariffs will be transitory even if they stay and don't go away, or is it only if they stay don't go away, and there is it more piled on and we get using regulatory environment and we get tax cuts.

All right, So I'm going to get a bunch of hate mail, but I'm only, you know, pigging back on what fed Jo J. Powell said about tariff's like transitory, We never get that wrong. Not a hot word here, but I mean, truly, do you believe that the impact of tariffs will be transitory even if they stay and don't go away, or is it only if they stay don't go away, and there is it more piled on and we get using regulatory environment and we get tax cuts.

It kind of depends on the underlying conditions in the economy. And when Russia invaded Ukraine in early twenty twenty two, we had a very overheated economy, low interest rates. That was kind of the perfect dynamic for that inflation to stick around and be amplified. Right now, you have an economy where the cyclical parts that are pretty weak. The hiring last year that was strong was government, healthcare and education. That looks to week in this year. There's just not a lot of underlying growth momentum in the economy, so it's not clear that companies are in a position to pass longst price increases. So I think it's the economy is weaker and that's why I think it's more likely to be transitory.

It kind of depends on the underlying conditions in the economy. And when Russia invaded Ukraine in early twenty twenty two, we had a very overheated economy, low interest rates. That was kind of the perfect dynamic for that inflation to stick around and be amplified. Right now, you have an economy where the cyclical parts that are pretty weak. The hiring last year that was strong was government, healthcare and education. That looks to week in this year. There's just not a lot of underlying growth momentum in the economy, so it's not clear that companies are in a position to pass longst price increases. So I think it's the economy is weaker and that's why I think it's more likely to be transitory.

Okay, so twenty seconds, don't be worried investors. Is that your final line?

Okay, so twenty seconds, don't be worried investors. Is that your final line?

I mean, I think you know, if you were super invested heading into the year, that was probably a mistake. After this selloff, I think you need sort of more bad things to happen this year.

I mean, I think you know, if you were super invested heading into the year, that was probably a mistake. After this selloff, I think you need sort of more bad things to happen this year.

Than just spooks.

Than just spooks.

I think the spook move has already happened.

I think the spook move has already happened.

All right, we're gonna leave with our Hey, Connor, thanks so much. Glad we could check in with you. Bloomberg Opinion Columbus Connorson. He's the founder of Peachtree Creek Investments.

All right, we're gonna leave with our Hey, Connor, thanks so much. Glad we could check in with you. Bloomberg Opinion Columbus Connorson. He's the founder of Peachtree Creek Investments.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and the Android Auto with the Bloomberg Business at 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 CarPlay and the Android Auto with the Bloomberg Business at or watch us live on YouTube.

Well, some big news in the world of sports, and no it's not March Madness, although that is also big, and we'll get to that in just a moment. But among our most read stories on the Bloomberg terminal at this hour is a consortium reaching a deal to buy the NBA's Boston Celtics for six point one billion dollars. Takeover makes it the biggest NBA deal ever, surpassing the four billion dollar valuation for the Phoenix Suns back in late twenty twenty two. So let's talk about this. Joining us is Bloomberg News US sports business reporter Randall Williams. He's here in studio along with Bloomberg Originals Chief correspondent Jason Kelly. Guys, I want to kick it off, Randall, first talk to us about this deal. A lot of money, A lot of money.

Well, some big news in the world of sports, and no it's not March Madness, although that is also big, and we'll get to that in just a moment. But among our most read stories on the Bloomberg terminal at this hour is a consortium reaching a deal to buy the NBA's Boston Celtics for six point one billion dollars. Takeover makes it the biggest NBA deal ever, surpassing the four billion dollar valuation for the Phoenix Suns back in late twenty twenty two. So let's talk about this. Joining us is Bloomberg News US sports business reporter Randall Williams. He's here in studio along with Bloomberg Originals Chief correspondent Jason Kelly. Guys, I want to kick it off, Randall, first talk to us about this deal. A lot of money, A lot of money.

It's the most ever paid for a sports franchise. It edges out Josh Harris's purchase of the Commanders and NBA owners in the league is happy he got the six billion.

It's the most ever paid for a sports franchise. It edges out Josh Harris's purchase of the Commanders and NBA owners in the league is happy he got the six billion.

Uh. Jason is shaking his head. Why are you taking Mead?

Uh. Jason is shaking his head. Why are you taking Mead?

It's unbelievable when you think about the last even during the period where these guys have owned the Boston Celtics, they bought it for three hundred and sixty million dollars correct back in.

It's unbelievable when you think about the last even during the period where these guys have owned the Boston Celtics, they bought it for three hundred and sixty million dollars correct back in.

Twenty twenty two and two thousand and two. Forget me, yeah, two and.

Twenty twenty two and two thousand and two. Forget me, yeah, two and.

Two won a couple championships. They put it on the market for essentially a state planning on the part of the Grouseback family. You know, I don't know what you heard, Randall. It wasn't a certainty that they were going to get to this price, but they did.

Two won a couple championships. They put it on the market for essentially a state planning on the part of the Grouseback family. You know, I don't know what you heard, Randall. It wasn't a certainty that they were going to get to this price, but they did.

No.

No.

I mean when they don't own their own stadium, and you know, the stadium is a big part of this because basketball in the NBA you fill up the stadium forty one times a year. But there's three hundred and sixty five days in a year. You want to fill that with concerts. You want to fill that with other events, festivals, and so when you don't own that, you lose out on revenue. For the Celtics to reach six billion dollars without owning their own stadium, it sets the precedent for the NBA expansion owners who are going to be bidding for this, who will own their stadium. And it's like, oh, they sold for that without a stadium.

I mean when they don't own their own stadium, and you know, the stadium is a big part of this because basketball in the NBA you fill up the stadium forty one times a year. But there's three hundred and sixty five days in a year. You want to fill that with concerts. You want to fill that with other events, festivals, and so when you don't own that, you lose out on revenue. For the Celtics to reach six billion dollars without owning their own stadium, it sets the precedent for the NBA expansion owners who are going to be bidding for this, who will own their stadium. And it's like, oh, they sold for that without a stadium.

Oh, I'm good, But that begs the question, why did they pay so much without the stadium.

Oh, I'm good, But that begs the question, why did they pay so much without the stadium.

Well, there's a lot of reasons why, I insult, right, there's a lot of reasons why. But the first thing I would say is that when you're buying a sports team, you do want to get to a price. And I think that for the league and for the Boston Basketball group, they wanted that six billion, they got it. And there's someone there's some unhappy people too, like Steve Pagliyuga. He put out a statement and said, look, we're gonna pay pat We're gonna excuse me, we're going to pay cash into this. And he lost and we're seeing that Bill Chisholms Group, which has Sixth Street and Rob Hale and Bruce A. Beal Junior from relative companies they won Come.

Well, there's a lot of reasons why, I insult, right, there's a lot of reasons why. But the first thing I would say is that when you're buying a sports team, you do want to get to a price. And I think that for the league and for the Boston Basketball group, they wanted that six billion, they got it. And there's someone there's some unhappy people too, like Steve Pagliyuga. He put out a statement and said, look, we're gonna pay pat We're gonna excuse me, we're going to pay cash into this. And he lost and we're seeing that Bill Chisholms Group, which has Sixth Street and Rob Hale and Bruce A. Beal Junior from relative companies they won Come.

On, Jason, Yeah yeah, Jason, does does the deal make sense to you? I mean somebody who's who's looked at these valuations for a long time, does it actually pencil out or is it pretty shocking to you? And look, we should say something is worth whatever, somebody's going to pay for it. So obviously it's worth this much, but it's kind of mind blowing.

On, Jason, Yeah yeah, Jason, does does the deal make sense to you? I mean somebody who's who's looked at these valuations for a long time, does it actually pencil out or is it pretty shocking to you? And look, we should say something is worth whatever, somebody's going to pay for it. So obviously it's worth this much, but it's kind of mind blowing.

Now it's hard to pencil it out. But then again, you know Randall and now we're talking about this. Before he came on air, people thought Steve Balmer was crazy for paying two billion dollars for the LA Clippers. People thought Matt Ishbiel was crazy for paying four billion dollars for the Phoenix Suns and Mercury. People thought these guys were crazy for paying three hundred and sixty million dollars, you know, twenty some eighty years ago. So you're exactly right. I think one thing that to build on what Randall was saying. The other real interesting thing about this is this is an expensive team, right. They have a very high pay roll, and this is not the sort of cash machine that maybe people would think it is right.

Now it's hard to pencil it out. But then again, you know Randall and now we're talking about this. Before he came on air, people thought Steve Balmer was crazy for paying two billion dollars for the LA Clippers. People thought Matt Ishbiel was crazy for paying four billion dollars for the Phoenix Suns and Mercury. People thought these guys were crazy for paying three hundred and sixty million dollars, you know, twenty some eighty years ago. So you're exactly right. I think one thing that to build on what Randall was saying. The other real interesting thing about this is this is an expensive team, right. They have a very high pay roll, and this is not the sort of cash machine that maybe people would think it is right.

And I'd say, going back to your point about you know how crazy it is. You look crazy in the moment buying any sports franchise, But as long as valuations look good, you look like the wise guy in due time. So as long as these valuations keep rising in the NBA has a new media deal, everybody looks smart. On the Celtics side, no stadium ownership, and you have a lot of money to pay out to players, So they have to definitely go back to the drawing board and go back to their books and figure out like how do we make this work long term?

And I'd say, going back to your point about you know how crazy it is. You look crazy in the moment buying any sports franchise, But as long as valuations look good, you look like the wise guy in due time. So as long as these valuations keep rising in the NBA has a new media deal, everybody looks smart. On the Celtics side, no stadium ownership, and you have a lot of money to pay out to players, So they have to definitely go back to the drawing board and go back to their books and figure out like how do we make this work long term?

But Randall, as we were talking about it, it wasn't just the biggest NBA deal in history. It's the biggest sports franchise deal in history. So you got the Washington Commanders last year for six billion, Manchester United last year for five point four billion, the Broncos for four point six billion back in twenty twenty two. It's football, it's soccer, it's basketball. What's going on here, redl Is it just supply and demand?

But Randall, as we were talking about it, it wasn't just the biggest NBA deal in history. It's the biggest sports franchise deal in history. So you got the Washington Commanders last year for six billion, Manchester United last year for five point four billion, the Broncos for four point six billion back in twenty twenty two. It's football, it's soccer, it's basketball. What's going on here, redl Is it just supply and demand?

It's a little bit of both.

It's a little bit of both.

I mean you're seeing in the influx of private equity in these deals, and so with these franchises rising as quickly as they are, the number of people who are able to buy these teams outright is diminishing. It's just getting so much smaller. That's why you see Sixth Street in this deal having a billion dollars to offer up and help pay for this. With that in mind, if private equity is going to pay a billion dollars for this six billion dollar team, then even the number of limited partners from individual people is going to be small as well. So it all depends on how you're forming your ownership group, whether you want private equity, whether you want people.

I mean you're seeing in the influx of private equity in these deals, and so with these franchises rising as quickly as they are, the number of people who are able to buy these teams outright is diminishing. It's just getting so much smaller. That's why you see Sixth Street in this deal having a billion dollars to offer up and help pay for this. With that in mind, if private equity is going to pay a billion dollars for this six billion dollar team, then even the number of limited partners from individual people is going to be small as well. So it all depends on how you're forming your ownership group, whether you want private equity, whether you want people.

It just really depends.

It just really depends.

But private equity is a silent partner in this.

But private equity is a silent partner in this.

All right, well, lent Man, Whenever we talk about these big deals, we could go on forever because it's always fascinating in the amount of money and the buyers continue to pay up. Radel, thank you so much. We'll look for more of your coverage on the ruer. Randall Williams, US sports business reporter here at Bloomberg News. We're going to stay with sports because didn't know, or maybe did you notice, that March Madness is underway. Welten, Kelly, listen. We do our own version here at Bloomberg and it's now hitting what it's tenth anniversary, So tenth anniversary. This is called Brackets for a Cause.

All right, well, lent Man, Whenever we talk about these big deals, we could go on forever because it's always fascinating in the amount of money and the buyers continue to pay up. Radel, thank you so much. We'll look for more of your coverage on the ruer. Randall Williams, US sports business reporter here at Bloomberg News. We're going to stay with sports because didn't know, or maybe did you notice, that March Madness is underway. Welten, Kelly, listen. We do our own version here at Bloomberg and it's now hitting what it's tenth anniversary, So tenth anniversary. This is called Brackets for a Cause.

This is something I've been really excited to be a part of along with our chairman Numeritis Peter Grauer. For the last ten years, we've raised six million dollars. More than six million dollars so far, setting a new record. In this year's contest, sixty one participants pledging twenty thousand dollars. I'm not as good at math as you are, Carol Masser and Tim Cenovic, but that's one point two million dollars plus a purse. It's going to be split among some really good charities. We couldn't be more excited.

This is something I've been really excited to be a part of along with our chairman Numeritis Peter Grauer. For the last ten years, we've raised six million dollars. More than six million dollars so far, setting a new record. In this year's contest, sixty one participants pledging twenty thousand dollars. I'm not as good at math as you are, Carol Masser and Tim Cenovic, but that's one point two million dollars plus a purse. It's going to be split among some really good charities. We couldn't be more excited.

All right, who's playing this year? I did not do my bracket yet, by the way, which means I can't do it because the games have started. Yeah, come on, man, it's twenty twenty six for me.

All right, who's playing this year? I did not do my bracket yet, by the way, which means I can't do it because the games have started. Yeah, come on, man, it's twenty twenty six for me.

Yeah. Who did get there?

Yeah. Who did get there?

Who did get there?

Who did get there?

Together?

Together?

Though?

Though?

This year, some really good names, some names very familiar to the Bloomberg BusinessWeek audience. We're talking about John Gray, We're talking about David Solomon, John Gray, of course, President Blackstone David Solomon, the CEO of Goldman Sachs. Jenny Johnson, she is of course running Templeton. Carolyn Tish Blodgett. She is an owner of her family of the New York Football Giants as well as the controlling owner of Gotham FC.

This year, some really good names, some names very familiar to the Bloomberg BusinessWeek audience. We're talking about John Gray, We're talking about David Solomon, John Gray, of course, President Blackstone David Solomon, the CEO of Goldman Sachs. Jenny Johnson, she is of course running Templeton. Carolyn Tish Blodgett. She is an owner of her family of the New York Football Giants as well as the controlling owner of Gotham FC.

Katie Cootch of TCW Yes.

Katie Cootch of TCW Yes.

Katie Kotch John Winkle read from TPG. So it is a murderer's row.

Katie Kotch John Winkle read from TPG. So it is a murderer's row.

Most of these guys are who's been there from like day one.

Most of these guys are who's been there from like day one.

So Gary Cone has been there from day one. He won the very first contest. Of course, now the vice chairman of IBM, former president of Goldman Sachs. We actually got some of the champions together for a dinner a few weeks ago and Gary was there. Of course, he served in the first Trump administration. He's been just ride or die for this for a long time. John Gray has been with this pretty much since the beginning as well. He won a couple of years ago. These people show up, they get very excited, and you know Cliff Asnist, Dwight Anderson, like lots of names.

So Gary Cone has been there from day one. He won the very first contest. Of course, now the vice chairman of IBM, former president of Goldman Sachs. We actually got some of the champions together for a dinner a few weeks ago and Gary was there. Of course, he served in the first Trump administration. He's been just ride or die for this for a long time. John Gray has been with this pretty much since the beginning as well. He won a couple of years ago. These people show up, they get very excited, and you know Cliff Asnist, Dwight Anderson, like lots of names.

Bill Ackman, I always kid you when I used to sit next to you, and it would be like Jason would come in the morning and they would be like messaging him like did you see what?

Bill Ackman, I always kid you when I used to sit next to you, and it would be like Jason would come in the morning and they would be like messaging him like did you see what?

Like how I?

Like how I?

Well I did, and I mean, honestly, this will come again. Is no surprise these guys, these men and women very competitive. I'll get emails all weekend about you know, where they are, and they're gaming it out, especially as it gets towards the finals. And keep in mind we're looking at the men's bracket and the women's bracket. It's split evenly between the two. So six hundred thousand will go for the men's, six hundred thousand will go for the women's.

Well I did, and I mean, honestly, this will come again. Is no surprise these guys, these men and women very competitive. I'll get emails all weekend about you know, where they are, and they're gaming it out, especially as it gets towards the finals. And keep in mind we're looking at the men's bracket and the women's bracket. It's split evenly between the two. So six hundred thousand will go for the men's, six hundred thousand will go for the women's.

Yeah, Jason, I can still do my women's bracket right.

Yeah, Jason, I can still do my women's bracket right.

Yes, you should be able to do your bracket on the terminal. Yes, yeah, jeets.

Yes, you should be able to do your bracket on the terminal. Yes, yeah, jeets.

Until tomorrow at eleven thirty, so that one is still open.

Until tomorrow at eleven thirty, so that one is still open.

Yeah, get in there, Get in there, Tim Sten.

Yeah, get in there, Get in there, Tim Sten.

He go on the Bloomberg terminal. You know it will never get Tim on Jason's feet are bracket sneakers. Yes, we will never get them our limited edition we needed edition sneakers. Bracket sneakers.

He go on the Bloomberg terminal. You know it will never get Tim on Jason's feet are bracket sneakers. Yes, we will never get them our limited edition we needed edition sneakers. Bracket sneakers.

I'm gonna you can take a picture and put them out on your social well.

I'm gonna you can take a picture and put them out on your social well.

Yeah, Jason, I know what size is your shoe?

Yeah, Jason, I know what size is your shoe?

Jason, maybe you can share?

Jason, maybe you can share?

Yeah, no, not for sharing. Tim, All right, have fun in San Franciscoy.

Yeah, no, not for sharing. Tim, All right, have fun in San Franciscoy.

Jason Kelly, thank you so much.

Jason Kelly, thank you so much.

This is the Bloomberg Business Week podcast. Listen live each weekday starting at two pm 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 eleven thirty.

This is the Bloomberg Business Week podcast. Listen live each weekday starting at two pm 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 eleven thirty.

Do we want to talk a little bit about cars. Gotta say one of the best known global auto brands. Great read on the global auto economy and the luxury global consumer. We're talking about Mercedes Benz and our Hannah Elliott recently catching up with the company's CEO for more on wear and why because there was a hilltop villa involved and we want to know the details. Hannah, of course, is Bloomberg Pursued Autocolumnists. She's also co host of the Hot Pursuit podcast that she does with Matt Miller. You can find that at Bloomberg dot Com or wherever you get your podcast. Hannah, so good to check in with you. You are on the West Coast, as you often are. You're in Irvine, California today at Karma Automotive, the headquarters. First of all, let's start there. Where are you? Why are you? Who are they?

Do we want to talk a little bit about cars. Gotta say one of the best known global auto brands. Great read on the global auto economy and the luxury global consumer. We're talking about Mercedes Benz and our Hannah Elliott recently catching up with the company's CEO for more on wear and why because there was a hilltop villa involved and we want to know the details. Hannah, of course, is Bloomberg Pursued Autocolumnists. She's also co host of the Hot Pursuit podcast that she does with Matt Miller. You can find that at Bloomberg dot Com or wherever you get your podcast. Hannah, so good to check in with you. You are on the West Coast, as you often are. You're in Irvine, California today at Karma Automotive, the headquarters. First of all, let's start there. Where are you? Why are you? Who are they?

Well, it's a funny thing. You should bring it up. I can't actually tell you too much because I'm embargo. But okay, the good news is I am at the headquarters of Karma Automotive and they are bringing forth a new vehicle that should be hitting the streets in twenty twenty six. So I can't say much more than that. It's going to be electric, of course, And of course we remember Karma they had There was a Karma Fisker. There have been multiple iterations of this company. They've struggled, but they're going to They're going to fight again. So I'm here to report about it.

Well, it's a funny thing. You should bring it up. I can't actually tell you too much because I'm embargo. But okay, the good news is I am at the headquarters of Karma Automotive and they are bringing forth a new vehicle that should be hitting the streets in twenty twenty six. So I can't say much more than that. It's going to be electric, of course, And of course we remember Karma they had There was a Karma Fisker. There have been multiple iterations of this company. They've struggled, but they're going to They're going to fight again. So I'm here to report about it.

Can they Well, okay, I was gonna ask ask you more questions. I'm so scared of Yeah, I'm so scared. I'm so scared.

Can they Well, okay, I was gonna ask ask you more questions. I'm so scared of Yeah, I'm so scared. I'm so scared.

I'll tell you if I can answer or not. I mean, it's fascinating.

I'll tell you if I can answer or not. I mean, it's fascinating.

Well, okay, but before we get to Mercedes, I do you want to It's really really hard for an American car company to start and pull this off. I mean, look at Tesla, look at Rivian. Yes, but the road of you know of that is paved with like the bodies of so many car companies.

Well, okay, but before we get to Mercedes, I do you want to It's really really hard for an American car company to start and pull this off. I mean, look at Tesla, look at Rivian. Yes, but the road of you know of that is paved with like the bodies of so many car companies.

Can they pull it off?

Can they pull it off?

I don't know. It's going to take a lot of money. It's going to take a lot of money. And at this point, and this is a great segue into Mercedes, I don't know if they can catch up enough in the technology world to compete with Mercedes. And I say that having just driven the third generation Carma Rivero from La down here, and the technology is moving so fast these days for a small startup to now compete with Mercedes, and I've just spent a week in Rome with Mercedes with their new CLA said Anne, It's going to be extremely difficult. And one thing I always said about the startups were, you know, the big OEMs did not produce electric cars at first because they didn't have to. It didn't mean they couldn't, It just means they didn't have to. Now, as OEMs realized, they're going to have to and they need to to offer options for everybody, the market is even more competitive. So I don't know, it's really a tough challenge.

I don't know. It's going to take a lot of money. It's going to take a lot of money. And at this point, and this is a great segue into Mercedes, I don't know if they can catch up enough in the technology world to compete with Mercedes. And I say that having just driven the third generation Carma Rivero from La down here, and the technology is moving so fast these days for a small startup to now compete with Mercedes, and I've just spent a week in Rome with Mercedes with their new CLA said Anne, It's going to be extremely difficult. And one thing I always said about the startups were, you know, the big OEMs did not produce electric cars at first because they didn't have to. It didn't mean they couldn't, It just means they didn't have to. Now, as OEMs realized, they're going to have to and they need to to offer options for everybody, the market is even more competitive. So I don't know, it's really a tough challenge.

Kind it feels like I don't know. Is just so you know the word of the era right now, because there's just so much coming out people. I want to ask you about your conversation. I mean, take us to the hilltop villa and what you saw, but who you talked to. And I am curious about the global environment, the global business environment, especially with you know, tariffs coming out of the United States, global supply chains being maybe potentially rethought. What did you have to say?

Kind it feels like I don't know. Is just so you know the word of the era right now, because there's just so much coming out people. I want to ask you about your conversation. I mean, take us to the hilltop villa and what you saw, but who you talked to. And I am curious about the global environment, the global business environment, especially with you know, tariffs coming out of the United States, global supply chains being maybe potentially rethought. What did you have to say?

So I spoke with Ola Collinius, who is the chief executive officer and chairman of Mercedes Benz Group. This is the guy where the buck stops. And he also is saying he doesn't know the future. This is a common thread that we've seen. When I ask him about tariffs, when I ask him about China, when I ask him about EV sales in the US, he is very open saying nobody knows the future. What is important is to be very quick and to be very flexible. And so Mercedes is working to speed up everything and to be incredibly flexible so they can pivot and turn if they need to to satisfy the market. What they're hearing and what the CLA sedan really provides is that some people do want evs, but a lot of people still want a combustion option. So this CLA sedan is really interesting because it's very affordable. It should be around fifty thousand euros. US prizing hasn't been announced, but for Mercedes that's considered entry level. But it also is very advanced and it will be offered in a hybrid version in the US next year. So it's debuting as an electric vehicle, but there will be a hybrid version coming next year. Again, it's all about options, and it's also about going against Tesla, the kind of original startup that made good. This is this is Mercedes now going directly to Tesla.

So I spoke with Ola Collinius, who is the chief executive officer and chairman of Mercedes Benz Group. This is the guy where the buck stops. And he also is saying he doesn't know the future. This is a common thread that we've seen. When I ask him about tariffs, when I ask him about China, when I ask him about EV sales in the US, he is very open saying nobody knows the future. What is important is to be very quick and to be very flexible. And so Mercedes is working to speed up everything and to be incredibly flexible so they can pivot and turn if they need to to satisfy the market. What they're hearing and what the CLA sedan really provides is that some people do want evs, but a lot of people still want a combustion option. So this CLA sedan is really interesting because it's very affordable. It should be around fifty thousand euros. US prizing hasn't been announced, but for Mercedes that's considered entry level. But it also is very advanced and it will be offered in a hybrid version in the US next year. So it's debuting as an electric vehicle, but there will be a hybrid version coming next year. Again, it's all about options, and it's also about going against Tesla, the kind of original startup that made good. This is this is Mercedes now going directly to Tesla.

Well, speaking of that, Tesla is at least in the ones that are sold in the US are made in the US. Concern about and closely aligned now with President Trump, with Elon Musk, how closely aligned he is. What is the concern that Mercedes has about tariffs? About President Trump given the comments that he's made about German car companies.

Well, speaking of that, Tesla is at least in the ones that are sold in the US are made in the US. Concern about and closely aligned now with President Trump, with Elon Musk, how closely aligned he is. What is the concern that Mercedes has about tariffs? About President Trump given the comments that he's made about German car companies.

It's a huge, huge concern. I asked Ola about it. He used the word reciprocity. He of course is following very closely, but he really made the point that Mercedes has been in the US for decades. They've got two factories in the US. They are one of the nation's largest exporters, and he really emphasized, we feel a mare American. We're part of the American fabric. We hope there's a sense of reciprocity as we're talking about these tariffs.

It's a huge, huge concern. I asked Ola about it. He used the word reciprocity. He of course is following very closely, but he really made the point that Mercedes has been in the US for decades. They've got two factories in the US. They are one of the nation's largest exporters, and he really emphasized, we feel a mare American. We're part of the American fabric. We hope there's a sense of reciprocity as we're talking about these tariffs.

All right, great stuff as always, So glad we could check in with you. Hannah. Thank you, thank you, Thank you. Hannah Elliott. She is Bloomberg Pursuit's auto columnist out there in Irvine, California. Highly recommend you check out her story. It's on the Bloomberg and at Bloomberg dot com. You and find out a little bit more too, about the cla from the Mercedes from Mercedes, I should say, and her experience doing a test drive.

All right, great stuff as always, So glad we could check in with you. Hannah. Thank you, thank you, Thank you. Hannah Elliott. She is Bloomberg Pursuit's auto columnist out there in Irvine, California. Highly recommend you check out her story. It's on the Bloomberg and at Bloomberg dot com. You and find out a little bit more too, about the cla from the Mercedes from Mercedes, I should say, and her experience doing a test drive.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube. Well, the NASTAC one hundred is in correction. It's down about eleven percent from its January highs. The S and P five hundred, Carol, it's down by eight percent. Look, corrections happen, stocks go down. Yet the volatility that we're seeing right now stemming from a back and forth trade war, uncertainty over future economic conditions. That's something Carol, that investors in this market may.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube. Well, the NASTAC one hundred is in correction. It's down about eleven percent from its January highs. The S and P five hundred, Carol, it's down by eight percent. Look, corrections happen, stocks go down. Yet the volatility that we're seeing right now stemming from a back and forth trade war, uncertainty over future economic conditions. That's something Carol, that investors in this market may.

Not be used to, that's for sure. And the question that Peter Atwater has for investors is do they stay buckled in in the passenger seat with President Trump behind the wheel or do they chump from the car. It is great to have back with us on Bloomberg Business Swee Peter Atwater. He's President of Financial Insights and adjunct Professor of Economics at William and Mary. He's also author of the twenty twenty three book The Confidence mapp, charting a path from chaos to Clarity. He also coined the term K shaped recovery. He joins us from Williamsburg, Virginia. Peter, so glued to be talking with you again. I feel like I'm not even quite sure where to start because there's so much coming at us. The volatility, you know, you get into investors feeling vulnerable, uncertain, powerless sentiment is a big factor. I don't know this market environment like where do we go from here? Do we even know? Bill Dudley of the New York Fed said, you know, really that the Fed doesn't even really kind to know where to go next.

Not be used to, that's for sure. And the question that Peter Atwater has for investors is do they stay buckled in in the passenger seat with President Trump behind the wheel or do they chump from the car. It is great to have back with us on Bloomberg Business Swee Peter Atwater. He's President of Financial Insights and adjunct Professor of Economics at William and Mary. He's also author of the twenty twenty three book The Confidence mapp, charting a path from chaos to Clarity. He also coined the term K shaped recovery. He joins us from Williamsburg, Virginia. Peter, so glued to be talking with you again. I feel like I'm not even quite sure where to start because there's so much coming at us. The volatility, you know, you get into investors feeling vulnerable, uncertain, powerless sentiment is a big factor. I don't know this market environment like where do we go from here? Do we even know? Bill Dudley of the New York Fed said, you know, really that the Fed doesn't even really kind to know where to go next.

Yeah, we never really know where to go.

Yeah, we never really know where to go.

But what's so interesting to meet about where we are today is that there has been this huge mind shift from inauguration day to today. So coming into inauguration, people were fantasizing wildly about where the markets were going, where the new administration was going to take the economy in the markets, And since then investors have had to come to grips with the fact that there is without question a shift in behavior out of Washington where President Trump is behind the wheel. And so investors are used to being in the passenger seat with specific companies with you know, next to CEOs.

But what's so interesting to meet about where we are today is that there has been this huge mind shift from inauguration day to today. So coming into inauguration, people were fantasizing wildly about where the markets were going, where the new administration was going to take the economy in the markets, And since then investors have had to come to grips with the fact that there is without question a shift in behavior out of Washington where President Trump is behind the wheel. And so investors are used to being in the passenger seat with specific companies with you know, next to CEOs.

For good and for ill.

For good and for ill.

But now they're having to look at their entire portfolio and decide are the investment I'm involved in going to be beneficiaries of the new administration or victims of them.

But now they're having to look at their entire portfolio and decide are the investment I'm involved in going to be beneficiaries of the new administration or victims of them.

It's just so interesting to hear this because I think there's this narrative that emerged following the first Trump administration that this is a guy who looks to the Dow in the s and P five hundred as a scorecard, as a sort of report card, and indeed, during his first administration he touted numbers there. Yet we've heard a different narrative emerge this time, Peter. Do you buy it that he's not paying attention to the stock market.

It's just so interesting to hear this because I think there's this narrative that emerged following the first Trump administration that this is a guy who looks to the Dow in the s and P five hundred as a scorecard, as a sort of report card, and indeed, during his first administration he touted numbers there. Yet we've heard a different narrative emerge this time, Peter. Do you buy it that he's not paying attention to the stock market.

One of the things we know about President Trump is he loves to cite metrics that work in his favor. So I'm not surprised with the markets dropping that he's looking for alternative measures of consumer and satisfaction in the economy.

One of the things we know about President Trump is he loves to cite metrics that work in his favor. So I'm not surprised with the markets dropping that he's looking for alternative measures of consumer and satisfaction in the economy.

But I think at the end of the day, what he is trying.

But I think at the end of the day, what he is trying.

To demonstrate, more than anything else is that he and he alone is going to dictate economic policy, American diplomatic policy, and that everyone else needs to come to grips with that.

To demonstrate, more than anything else is that he and he alone is going to dictate economic policy, American diplomatic policy, and that everyone else needs to come to grips with that.

But is there a point like, yeah, No, It's interesting, Peter, because how many conversations I've had with folks and they're like, oh, you know how this is going to play out. It's just like you know, you reported on at the first go round, and it feels so different, and I think so many people are realizing this is different this time around. Having said that, is there a point a breaking point where the team around the president somehow has a bigger say like they did in the first administration, because right now it does feel like absolutely, like you lay it out, the president's in the driver's seat and everyone is there in the back seat to back them up.

But is there a point like, yeah, No, It's interesting, Peter, because how many conversations I've had with folks and they're like, oh, you know how this is going to play out. It's just like you know, you reported on at the first go round, and it feels so different, and I think so many people are realizing this is different this time around. Having said that, is there a point a breaking point where the team around the president somehow has a bigger say like they did in the first administration, because right now it does feel like absolutely, like you lay it out, the president's in the driver's seat and everyone is there in the back seat to back them up.

Yeah.

Yeah.

One of the things that I say to my students is falling confidence individuals grow spines. And so what we're likely to see is that should the markets continue to drop, should consumer confidence continue to fall, those around him will feel compelled to react. Whether that's sufficient or not, we don't know. And to be fair, Carol, there are a number of organizations and individuals who feel wildly empowered now, and so we're in this interesting moment where individuals and organizations are having to decide in which camp do they expect to fall because one of the things we see with dominant leaders such as Trump is there are clear benefits and there are also clear punishment.

One of the things that I say to my students is falling confidence individuals grow spines. And so what we're likely to see is that should the markets continue to drop, should consumer confidence continue to fall, those around him will feel compelled to react. Whether that's sufficient or not, we don't know. And to be fair, Carol, there are a number of organizations and individuals who feel wildly empowered now, and so we're in this interesting moment where individuals and organizations are having to decide in which camp do they expect to fall because one of the things we see with dominant leaders such as Trump is there are clear benefits and there are also clear punishment.

Well, how do you advise people to weather this storm if you indeed think it is a storm? Because there are a lot of people we talk to Peter who say, okay, wait a second, once he gets tax cuts figured out, once we get to April, and there's more clarity when it comes to trade, things will become less valid ale what do you say to that?

Well, how do you advise people to weather this storm if you indeed think it is a storm? Because there are a lot of people we talk to Peter who say, okay, wait a second, once he gets tax cuts figured out, once we get to April, and there's more clarity when it comes to trade, things will become less valid ale what do you say to that?

So I think that investors have to be thinking, I say a lot. You know, plan for what you can imagine, but be prepared for what you can't. In this environment, investors and corporate executives need to have two playbooks at once. One is in anticipation of things going in their favor, but also a very clear playbook for if this goes against me, what do I do? What is my what are my preparations planned ahead in anticipation of that?

So I think that investors have to be thinking, I say a lot. You know, plan for what you can imagine, but be prepared for what you can't. In this environment, investors and corporate executives need to have two playbooks at once. One is in anticipation of things going in their favor, but also a very clear playbook for if this goes against me, what do I do? What is my what are my preparations planned ahead in anticipation of that?

Because the outcome.

Because the outcome.

Here is going to be very binary. And that's what we see over and over is that when you create beneficiaries and victims, the vulnerability that comes from the victims sets things in motion. We're seeing that in Europe right now, where the geopolitical vulnerability has leaders on edge and they're mobilizing in response.

Here is going to be very binary. And that's what we see over and over is that when you create beneficiaries and victims, the vulnerability that comes from the victims sets things in motion. We're seeing that in Europe right now, where the geopolitical vulnerability has leaders on edge and they're mobilizing in response.

I'm going to ask you something crazy, Peter. Is one of the outcomes here on an investor perspective, that the US becomes uninvestable.

I'm going to ask you something crazy, Peter. Is one of the outcomes here on an investor perspective, that the US becomes uninvestable.

In your view, I think that is a clear possibility. I think that investors have to be made comfortable that the United States is interested in foreign capital, in retaining domestic capital and appreciate tim If you look at labor, goods and capital, we're seeing We've already seen restrictions and walls go up on the immigration front, We're seeing tariffs creating friction in terms of the mobility of goods. It is to me only a question of time when capital falls into that same playing field where public policy begins to intervene, and not just in the United States, but globally in terms of wanting it, not wanting it, courting it, pushing it away. Those are completely in sync with what we're seeing with labor and goods.