Bloomberg Audio Studios, podcasts, radio news.

Bloomberg Audio Studios, podcasts, radio news.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Easter on Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Easter on Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

All right, let's go to the topic du jour, and that's about Trump tariffs and how it actually could affect growth. For example, we're looking at economists kind of reevaluating the impact of policies on the US economy and then the sequencing, Right, if you have tariffs now, but then you have tax cuts later, what that winds up looking like then for growth? And the current is Bloomberg's a global economy reporter and he joins us now from DC. What's the scuttle butt among economists when it comes to President Trump's tariffs policy.

All right, let's go to the topic du jour, and that's about Trump tariffs and how it actually could affect growth. For example, we're looking at economists kind of reevaluating the impact of policies on the US economy and then the sequencing, Right, if you have tariffs now, but then you have tax cuts later, what that winds up looking like then for growth? And the current is Bloomberg's a global economy reporter and he joins us now from DC. What's the scuttle butt among economists when it comes to President Trump's tariffs policy.

I think moving faster and expected alex is one way to think about it. I mean, to be clear, there is no you know here that the President is either imposing tariffs or that he believes in tariffs as a tool of trade policy. But I think there is a sense of a shock at the pace of the moves. Remember a couple of things. His trade team isn't actually a confirmed in office yet it converce actory Howard Lopnik and Jameson Greers trade represent that of be formally appointed to their roles there. There was an executive order on day one of the organization setting out this the remit for a study in the US trading policy with partners around the world. But already we've had threats of tariffs on Columbia, threats of tariff on Mexico and Kinada, actual tariffs implemented on China ten percent across the board. Also that's new territory, not just intermediate goods across the board. And of course now we have the expected announcement of tariffs and steel aluminium that the President took yesterday, and the reciprocal tariff idea that he's also flooded, due for detail again this week. So you know, it's easy to say this isn't a shock. He spoke about it during the campaign. But the breath and pace that I think is catching people off guard.

I think moving faster and expected alex is one way to think about it. I mean, to be clear, there is no you know here that the President is either imposing tariffs or that he believes in tariffs as a tool of trade policy. But I think there is a sense of a shock at the pace of the moves. Remember a couple of things. His trade team isn't actually a confirmed in office yet it converce actory Howard Lopnik and Jameson Greers trade represent that of be formally appointed to their roles there. There was an executive order on day one of the organization setting out this the remit for a study in the US trading policy with partners around the world. But already we've had threats of tariffs on Columbia, threats of tariff on Mexico and Kinada, actual tariffs implemented on China ten percent across the board. Also that's new territory, not just intermediate goods across the board. And of course now we have the expected announcement of tariffs and steel aluminium that the President took yesterday, and the reciprocal tariff idea that he's also flooded, due for detail again this week. So you know, it's easy to say this isn't a shock. He spoke about it during the campaign. But the breath and pace that I think is catching people off guard.

So initially on Friday morning, when we got the report from Reuters that Trump was considering reciprocal tariffs that day, there wasn't really any indication of which country he was referring to.

So initially on Friday morning, when we got the report from Reuters that Trump was considering reciprocal tariffs that day, there wasn't really any indication of which country he was referring to.

How are you all.

How are you all.

Thinking about this whole concept of reciprocal tariffs and what the implications could be globally.

Thinking about this whole concept of reciprocal tariffs and what the implications could be globally.

Well, reciprocal tariff idea is going to be a very technical one. You know, we really need to see the exact details of what the President is thinking about. But the rough analysis from people following this trade expert is essentially what President is saying is if a the US puts the tariff on one country's goods of say two percent, and that country puts a tariff on US goods of say ten percent, the President wants to.

Well, reciprocal tariff idea is going to be a very technical one. You know, we really need to see the exact details of what the President is thinking about. But the rough analysis from people following this trade expert is essentially what President is saying is if a the US puts the tariff on one country's goods of say two percent, and that country puts a tariff on US goods of say ten percent, the President wants to.

Level that up to level of playing field.

Level that up to level of playing field.

And I think is that this might be a replacement to the universal tariff of ten percent that he spoke about. So different different ideas there in the mix. But again that's a technical one we're going to have to wait and see in detail. Where it certainly adds to thee of more tariffs coming.

And I think is that this might be a replacement to the universal tariff of ten percent that he spoke about. So different different ideas there in the mix. But again that's a technical one we're going to have to wait and see in detail. Where it certainly adds to thee of more tariffs coming.

So the idea that the tariffs center them cells are knows surprise, But it's the speed at which President Trump is mood but moving on tariffs that is a surprise, which then raises the question of the quote unquote positive parts of the administration like deregulation and lower corporate taxes to then offset the hit we might take from tariffs. What do you guys expect in terms of the speed there.

So the idea that the tariffs center them cells are knows surprise, But it's the speed at which President Trump is mood but moving on tariffs that is a surprise, which then raises the question of the quote unquote positive parts of the administration like deregulation and lower corporate taxes to then offset the hit we might take from tariffs. What do you guys expect in terms of the speed there.

Yeah, I mean to clear to President and his team say that this trade policy, this hole is trade policy will drive investment in the US, will bring manufacturing back home, It will raise revenue for the government, and it will balance trading books.

Yeah, I mean to clear to President and his team say that this trade policy, this hole is trade policy will drive investment in the US, will bring manufacturing back home, It will raise revenue for the government, and it will balance trading books.

With the rest of the world.

With the rest of the world.

Along with, as you say, this deregulation policy, and you know, making it easier to build things, make it easier to extract resources and energy from the ground, getting infrastructure projects moving, and you know, it's kind of a pro business deregularty attitude writ large. So there is a case that the new administration is will at least animal spirits. Economists haven't yet down graded their forecast, right anything like that. You know that I'm f single out to you experts perform once back in January. But you know, nonetheless, there's also feeling that, wait a minute, right now, we seem.

Along with, as you say, this deregulation policy, and you know, making it easier to build things, make it easier to extract resources and energy from the ground, getting infrastructure projects moving, and you know, it's kind of a pro business deregularty attitude writ large. So there is a case that the new administration is will at least animal spirits. Economists haven't yet down graded their forecast, right anything like that. You know that I'm f single out to you experts perform once back in January. But you know, nonetheless, there's also feeling that, wait a minute, right now, we seem.

To be at the very least pain stage of this.

To be at the very least pain stage of this.

We're seeing those spending cuts this federal level of staff lost staff, job cuts at federal level, the terriffs. Of course, the sweeteners if you have too wrong in the economy, that's the deregulation. Just mentioned that the tax cuts that, of course haven't yet been agreed by Congress. So, you know, supporters saying, look, this is a big program here, ultimately will lead to a stronger and faster going economy, but a lot of skeptics are saying that there's potential for significant disruption and.

We're seeing those spending cuts this federal level of staff lost staff, job cuts at federal level, the terriffs. Of course, the sweeteners if you have too wrong in the economy, that's the deregulation. Just mentioned that the tax cuts that, of course haven't yet been agreed by Congress. So, you know, supporters saying, look, this is a big program here, ultimately will lead to a stronger and faster going economy, but a lot of skeptics are saying that there's potential for significant disruption and.

Pain along the way.

Pain along the way.

Very early saying yet, but certainly plenty of skepticism, unspecoid support on both sides of this.

Very early saying yet, but certainly plenty of skepticism, unspecoid support on both sides of this.

So there's a lot of conversation about what tariffs can mean for different countries across the globe. But if we were to bring it back to the consumer, how exactly would that impact the consumer. Would we see countries just passing off tariff costs onto consumers? What does that look like?

So there's a lot of conversation about what tariffs can mean for different countries across the globe. But if we were to bring it back to the consumer, how exactly would that impact the consumer. Would we see countries just passing off tariff costs onto consumers? What does that look like?

Yeah, it depends on the level of the tier and depends on the type of goods.

Yeah, it depends on the level of the tier and depends on the type of goods.

Right.

Right.

So, for example, the last trade war between President Trump's administration in China was mostly intermediate goods that components and materials that factories are buying off of China, you know, ultimately didn't have that much of an impact on the mainStreet inflation this time around the president that's put ten percent tariffs and all the goods coming out of China and coming into the US, so that's like consumer goods, typical household baskets. Similarly, from Mexico, a big portion of exports from Mexico to the US was on food, food stuff like fruit and veg and an apparel. So if you start putting tariffs on those kind of products, then the question becomes who's going to absorb it. Is the seller going to cut their prices and absorb that tariff or will the buy Will the buyer absorbed the tariff in the US, and or will it be passed along to consumers? And that's where Commas saying, hang on, some of this will surely have to plats on the consumers, and that's why they say in the first round, effect at least will be inflationary.

So, for example, the last trade war between President Trump's administration in China was mostly intermediate goods that components and materials that factories are buying off of China, you know, ultimately didn't have that much of an impact on the mainStreet inflation this time around the president that's put ten percent tariffs and all the goods coming out of China and coming into the US, so that's like consumer goods, typical household baskets. Similarly, from Mexico, a big portion of exports from Mexico to the US was on food, food stuff like fruit and veg and an apparel. So if you start putting tariffs on those kind of products, then the question becomes who's going to absorb it. Is the seller going to cut their prices and absorb that tariff or will the buy Will the buyer absorbed the tariff in the US, and or will it be passed along to consumers? And that's where Commas saying, hang on, some of this will surely have to plats on the consumers, and that's why they say in the first round, effect at least will be inflationary.

Well, and that's the interesting part.

Well, and that's the interesting part.

I was talking about this a little earlier with Isabelle and Nora about commodities, is but commodities are efficient markets, so they'll just rerate, So the price of the commodity will rebrate to account for the tax. In order to have the consumer or the company, whomever's buying it want to buy it. If I'm buying a coat, that's not the same thing, Like that's not an efficient market. I'm just not going to buy the coat. And so there's different distinctions based on what's actually.

I was talking about this a little earlier with Isabelle and Nora about commodities, is but commodities are efficient markets, so they'll just rerate, So the price of the commodity will rebrate to account for the tax. In order to have the consumer or the company, whomever's buying it want to buy it. If I'm buying a coat, that's not the same thing, Like that's not an efficient market. I'm just not going to buy the coat. And so there's different distinctions based on what's actually.

Being taxed, very different distinctions.

Being taxed, very different distinctions.

And you hear some FED officials make the point that even if FED officials have different views, like some make the point it's a one off, we kind of look through that impact. Others saying, wait a minute, this could be the kind of start of setting off a longer term consumer inflation Expectations that University of Michigan surveyed the end of last week show that consumers.

And you hear some FED officials make the point that even if FED officials have different views, like some make the point it's a one off, we kind of look through that impact. Others saying, wait a minute, this could be the kind of start of setting off a longer term consumer inflation Expectations that University of Michigan surveyed the end of last week show that consumers.

Are a bit worried about inflation now, especially due to tires. So it's you know, it's not a very clear cut impact on this and for either side of the argument.

Are a bit worried about inflation now, especially due to tires. So it's you know, it's not a very clear cut impact on this and for either side of the argument.

But remember again there's also a bigger picture of view that you have those people who argue this will drive investment and employment, but there are also those who say will hurt consumer confidence and business confidence because they don't have certainty, don't know how to invest. So there'll be a lot of confusion in the meantime on tell this trade policy to settle down.

But remember again there's also a bigger picture of view that you have those people who argue this will drive investment and employment, but there are also those who say will hurt consumer confidence and business confidence because they don't have certainty, don't know how to invest. So there'll be a lot of confusion in the meantime on tell this trade policy to settle down.

So how are other global leaders responding to this? I know, when I was watching the Super Bowl last night, I actually saw an ad for from Canada about tariffs, and I missed that. Really it was super interesting a cowboy hating.

So how are other global leaders responding to this? I know, when I was watching the Super Bowl last night, I actually saw an ad for from Canada about tariffs, and I missed that. Really it was super interesting a cowboy hating.

No it was not.

No it was not.

There was no stash flying around, there was no mustaches, but it was a really interesting ad. And I'm just curious. What are you all seeing in terms of the response from other world leaders.

There was no stash flying around, there was no mustaches, but it was a really interesting ad. And I'm just curious. What are you all seeing in terms of the response from other world leaders.

Well, you know, again early days you get different response from different capitals. But broadly speaking, when it comes to merchandise goods trade, a lot of the messaging has been you know, what do you want us to buy?

Well, you know, again early days you get different response from different capitals. But broadly speaking, when it comes to merchandise goods trade, a lot of the messaging has been you know, what do you want us to buy?

We're willing to step up.

We're willing to step up.

Mexico stepped up with putting troops in the border for that Fentanel and immigration issue, as in Canada, but Canada has also made clear that you know, they're in the market to buy US goods. The European Union has said that they're willing to step up and buy maybe more US gas or other products you have. Japan here last week prominent s Orshiba talking about one trillion worth an investment in the US. And this goes around. If all of these world leaders make the point. They're willing to invest in buy goods, but they're also making it clear that they will retaliate in kind as well if the US pushes this faith policy too far. China has already retaliate literally today, those tariffs from China have gone into fact on agricultural goods, agricultural machinery coming out of the US into into China. And of course I've got some anti trust measures going on against some US companies as well. You have a playbook ready to retaliate if they want to. Canada head threatend to Italian as in Mexico. So you know, there's a there's a kind of a play nice we'll we'll come and see what can we do deal all this, but if that does mark out, they're willing to respond as well.

Mexico stepped up with putting troops in the border for that Fentanel and immigration issue, as in Canada, but Canada has also made clear that you know, they're in the market to buy US goods. The European Union has said that they're willing to step up and buy maybe more US gas or other products you have. Japan here last week prominent s Orshiba talking about one trillion worth an investment in the US. And this goes around. If all of these world leaders make the point. They're willing to invest in buy goods, but they're also making it clear that they will retaliate in kind as well if the US pushes this faith policy too far. China has already retaliate literally today, those tariffs from China have gone into fact on agricultural goods, agricultural machinery coming out of the US into into China. And of course I've got some anti trust measures going on against some US companies as well. You have a playbook ready to retaliate if they want to. Canada head threatend to Italian as in Mexico. So you know, there's a there's a kind of a play nice we'll we'll come and see what can we do deal all this, but if that does mark out, they're willing to respond as well.

All right, and I really appreciate always the best and the current Bloomberg Global Economy reporter joining us on Trump tariffs and what that does to growth.

All right, and I really appreciate always the best and the current Bloomberg Global Economy reporter joining us on Trump tariffs and what that does to growth.

You were listening to the Bloomberg Intelligence Podcast. Catch the program live weekdays at ten am Eastern on Apple car Play and the Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station just say Alexa played Bloomberg eleven thirty.

You were listening to the Bloomberg Intelligence Podcast. Catch the program live weekdays at ten am Eastern on Apple car Play and the Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station just say Alexa played Bloomberg eleven thirty.

All right, I wanted to get a broader take on the Trump administration and some deeper changes at taking place nationally, particularly when it comes to diversity, equity and inclusion. Mark Morioll, CEO of a National Urban League, joins us now on this and side note. Mark was mayor of New Orleans from nineteen ninety four to two thousand and two. Mark, did you watch the Super Bowl?

All right, I wanted to get a broader take on the Trump administration and some deeper changes at taking place nationally, particularly when it comes to diversity, equity and inclusion. Mark Morioll, CEO of a National Urban League, joins us now on this and side note. Mark was mayor of New Orleans from nineteen ninety four to two thousand and two. Mark, did you watch the Super Bowl?

Were you there?

Were you there?

Hey?

Hey?

I was there, and I was an Eagles fan because I lived in Philadelphia during my days in college at U Penn.

I was there, and I was an Eagles fan because I lived in Philadelphia during my days in college at U Penn.

And I tell you what, I didn't expect that outcome.

And I tell you what, I didn't expect that outcome.

I felt Philadelphia would win, but I thought it was going to be a competitive game all the way down to the end. It wasn't really a competitive game. The Eagles really really dominate.

I felt Philadelphia would win, but I thought it was going to be a competitive game all the way down to the end. It wasn't really a competitive game. The Eagles really really dominate.

Yeah, they took it.

Yeah, they took it.

It was surprising.

It was surprising.

It was from somebody who like literally just started to understand football yesterday. I'm actually not kidding.

It was from somebody who like literally just started to understand football yesterday. I'm actually not kidding.

I was like, what is this Jeeves?

I was like, what is this Jeeves?

Huh?

Huh?

What what is that team? Anyway, side, I'm glad you went. I'm glad you got to see it. Either way, it was always a fun experience.

What what is that team? Anyway, side, I'm glad you went. I'm glad you got to see it. Either way, it was always a fun experience.

To watch. Mark.

To watch. Mark.

You are CEO of the National Urban League. It's the largest historical civil rights and urban advocacy organization in the country. What are you guys doing right now to combat sort of anti DEI rhetoric and policy from DC.

You are CEO of the National Urban League. It's the largest historical civil rights and urban advocacy organization in the country. What are you guys doing right now to combat sort of anti DEI rhetoric and policy from DC.

So, we are working very hard to get institutions, leaders, corporations to reaffirm their commitment. Jamie Diamond and JP Morgan Chase have done so. Roger Bigodell in the National Football League have done so. Companies like Delta and Target, and there's an entire list. Those that have reaffirmed their commitment may not have gotten as much media attention as those that have walked away. I'm dismayed by those who say they have walked away. What every company in America should be doing is living up to the meaning of the Civil Rights Act of nineteen sixty four prevents non discrimination, or rather is a non discrimination law which prevents discrimination based on race, creed.

So, we are working very hard to get institutions, leaders, corporations to reaffirm their commitment. Jamie Diamond and JP Morgan Chase have done so. Roger Bigodell in the National Football League have done so. Companies like Delta and Target, and there's an entire list. Those that have reaffirmed their commitment may not have gotten as much media attention as those that have walked away. I'm dismayed by those who say they have walked away. What every company in America should be doing is living up to the meaning of the Civil Rights Act of nineteen sixty four prevents non discrimination, or rather is a non discrimination law which prevents discrimination based on race, creed.

Color, religion, and national origin.

Color, religion, and national origin.

Many of those who are promoting from behind the scenes the antide and I movement are trying to roll back progress this nation is made over the last seventy years. Women, African Americans, latinos Asians, indigenous Americans, disabled Americans, LGBTQ Americans have had a chance over the last seventy years to participate in the mainstream of American life, in jobs and business opportunities, around corporate board tables, in elected office. This is a full scale attack on all of that progress based on a false and misleading narrative that somehow diversity equity and inclusion promotes quotas and undermines narritive. I take great exception to that, because what diversity equity inclusion says is give everyone with merit a chance, not just some, not just men, not just white men. Give everybody, including a chance for the opportunities that America represents.

Many of those who are promoting from behind the scenes the antide and I movement are trying to roll back progress this nation is made over the last seventy years. Women, African Americans, latinos Asians, indigenous Americans, disabled Americans, LGBTQ Americans have had a chance over the last seventy years to participate in the mainstream of American life, in jobs and business opportunities, around corporate board tables, in elected office. This is a full scale attack on all of that progress based on a false and misleading narrative that somehow diversity equity and inclusion promotes quotas and undermines narritive. I take great exception to that, because what diversity equity inclusion says is give everyone with merit a chance, not just some, not just men, not just white men. Give everybody, including a chance for the opportunities that America represents.

That's what this is all about.

That's what this is all about.

And so we are going to continue to work and fight and advocate for continuation of this country's commitment to equal opportunity.

And so we are going to continue to work and fight and advocate for continuation of this country's commitment to equal opportunity.

Well, market sounds like last week was a really big week for you. You were inducted into the Nola Wall of Walk of Fame on Thursday, and you received a Humanitarian Award the first time a non sports person was chosen for this award at the Super Bowl party on Saturday. So very big week for you. But back on the notion of companies walking back their commitments. Do you think this is really just a sigh of relief for companies that weren't necessarily genuine about these commitments, or do you think maybe corporations just want to have the freedom to make their own decisions without having to necessarily report and be held accountable in those ways.

Well, market sounds like last week was a really big week for you. You were inducted into the Nola Wall of Walk of Fame on Thursday, and you received a Humanitarian Award the first time a non sports person was chosen for this award at the Super Bowl party on Saturday. So very big week for you. But back on the notion of companies walking back their commitments. Do you think this is really just a sigh of relief for companies that weren't necessarily genuine about these commitments, or do you think maybe corporations just want to have the freedom to make their own decisions without having to necessarily report and be held accountable in those ways.

Well, reporting being accountable is what the law requires, It's always required that. That's our system of laws, our systems of the constitution. But I think some companies are frankly being intimidated. There's a behind the scenes ever to intimidate, to deveain, to threaten companies. I heard one story where a company was told that if they did not walk back their Dee and I, this group would launch a social media campaign and show some lewde and lascivious videos that may have taken place at an event that the company co sponsored.

Well, reporting being accountable is what the law requires, It's always required that. That's our system of laws, our systems of the constitution. But I think some companies are frankly being intimidated. There's a behind the scenes ever to intimidate, to deveain, to threaten companies. I heard one story where a company was told that if they did not walk back their Dee and I, this group would launch a social media campaign and show some lewde and lascivious videos that may have taken place at an event that the company co sponsored.

This is what we're faced.

This is what we're faced.

We're faced with a smear campaign, a campaign of attacks, a campaign of division, and yes, it is a campaign of hate. Major corporations in America operate under rubric of law. They follow that law. That law makes things fair and equitable for everyone. All diversity, equity, inclusion is is a program to implement non discrimination laws.

We're faced with a smear campaign, a campaign of attacks, a campaign of division, and yes, it is a campaign of hate. Major corporations in America operate under rubric of law. They follow that law. That law makes things fair and equitable for everyone. All diversity, equity, inclusion is is a program to implement non discrimination laws.

That's what it represents, and this nation cannot walk back.

That's what it represents, and this nation cannot walk back.

And we are going to battle and fight and work in the courts and in every way, shape or form possible to ensure that this nation remains committed to equal opportunity.

And we are going to battle and fight and work in the courts and in every way, shape or form possible to ensure that this nation remains committed to equal opportunity.

Hey, Mark, it's really good to catch up with you. Congratulations on the host of the awards. Congratulations on the Eagles winning as well. Thank you so much for your time today. Mark Mariral joining us their CEO of the National Urban League.

Hey, Mark, it's really good to catch up with you. Congratulations on the host of the awards. Congratulations on the Eagles winning as well. Thank you so much for your time today. Mark Mariral joining us their CEO of the National Urban League.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Today we are joined by Michael Hale, and he is Bloomberg Intelligence senior restaurant and food service analysts here to talk about McDonald's earnings. So we have McDonald's sales that improved on stronger international results. What is your broad read on this, Michael?

Today we are joined by Michael Hale, and he is Bloomberg Intelligence senior restaurant and food service analysts here to talk about McDonald's earnings. So we have McDonald's sales that improved on stronger international results. What is your broad read on this, Michael?

You know, the most important piece of the report really is the US recovery post E Coli, and we got some good news on that front. So traffic was actually positive in December, so I think that was much better than anyone had expected. They cited kind of a choppy January here, but the only region is still impacted by E COLI seems to be the Rocky Mountain region where the outbreak occurred. And they expect a full US recovery by the beginning of the second quarter.

You know, the most important piece of the report really is the US recovery post E Coli, and we got some good news on that front. So traffic was actually positive in December, so I think that was much better than anyone had expected. They cited kind of a choppy January here, but the only region is still impacted by E COLI seems to be the Rocky Mountain region where the outbreak occurred. And they expect a full US recovery by the beginning of the second quarter.

Which is good news.

Which is good news.

What about the rest of the world versus the US, It was the rest of the world that really performed well yeah, yeah.

What about the rest of the world versus the US, It was the rest of the world that really performed well yeah, yeah.

And a big part of that was just lapping like pretty weak year ago results, right, so we wrapped the start of the of the Israel Hamas war, and so the Middle East was stronger. Countries with large Muslim populations were also stronger. And then also China lapped a very weak result last year and management cited some stabilization in that market, which is encouraging for them. So the easy comps was what really fueled international sales. You know, we're kind of more bullish on the US moving forward than international, you know, because outside of the Middle East, in China, Europe we think is going to continue to kind of be an issue for them. The Arizona is experienced it's seeing much higher inflation than the US, and that's really crimping low income and family spending on the continent.

And a big part of that was just lapping like pretty weak year ago results, right, so we wrapped the start of the of the Israel Hamas war, and so the Middle East was stronger. Countries with large Muslim populations were also stronger. And then also China lapped a very weak result last year and management cited some stabilization in that market, which is encouraging for them. So the easy comps was what really fueled international sales. You know, we're kind of more bullish on the US moving forward than international, you know, because outside of the Middle East, in China, Europe we think is going to continue to kind of be an issue for them. The Arizona is experienced it's seeing much higher inflation than the US, and that's really crimping low income and family spending on the continent.

Are people still buying the Big Mac?

Are people still buying the Big Mac?

They don't break out Big Mac sales, but they cited pretty strong results out of the Chicken Big Mac, which I was kind of surprised about. You know, my associate tried it, he was not a big fan. But but yeah, they cited you know, pretty strong results out of the Chicken Big Mac in the United States and other markets. I think France was who they called out specifically and to the point where they're going to continue to to you know, bring it back as a limited time offare in the future.

They don't break out Big Mac sales, but they cited pretty strong results out of the Chicken Big Mac, which I was kind of surprised about. You know, my associate tried it, he was not a big fan. But but yeah, they cited you know, pretty strong results out of the Chicken Big Mac in the United States and other markets. I think France was who they called out specifically and to the point where they're going to continue to to you know, bring it back as a limited time offare in the future.

So I was actually talking to an IB user, a Bloomberg user about this. Why are McDonald's franchises elsewhere like a rest of world so much better than in the US, and that like you can get like super good food that doesn't take like fast food.

So I was actually talking to an IB user, a Bloomberg user about this. Why are McDonald's franchises elsewhere like a rest of world so much better than in the US, and that like you can get like super good food that doesn't take like fast food.

Why is that?

Why is that?

Yeah, Jonathan Farrowe asked me the same thing this morning. He said he wants them all to be like the you know McDonald's in Italy, you know, And the answer I had there was just more discerning tastes.

Yeah, Jonathan Farrowe asked me the same thing this morning. He said he wants them all to be like the you know McDonald's in Italy, you know, And the answer I had there was just more discerning tastes.

Right, that might be it, no, but really, like is it I mean, does it affect margins, Like, what are the margins like in the US versus rest of the world.

Right, that might be it, no, but really, like is it I mean, does it affect margins, Like, what are the margins like in the US versus rest of the world.

We don't we don't have that information, you know what I mean. It's a franchise business, right, So you know what I mean, So we don't have a ton of color on all the different franchise markets and what kind of margins they pull in. You know, the US generally is a lower margin for the franchise business, just because they have a lot more franchisees and need a lot more oversight. The international franchise business tends to generate wider margins.

We don't we don't have that information, you know what I mean. It's a franchise business, right, So you know what I mean, So we don't have a ton of color on all the different franchise markets and what kind of margins they pull in. You know, the US generally is a lower margin for the franchise business, just because they have a lot more franchisees and need a lot more oversight. The international franchise business tends to generate wider margins.

So I always used to think about McDonald's is a really cheap place, a discount fast food place, but prices are getting higher. Are we still seeing demand from lower income consumers for the brand?

So I always used to think about McDonald's is a really cheap place, a discount fast food place, but prices are getting higher. Are we still seeing demand from lower income consumers for the brand?

You know, it continues to be the weak spot at McDonald's and for anyone that has a lot of exposure to low income consumers. So the entire QSR space, right, Jack in the Box, Wendy's, Burger King, you know, a lot a lot of chains, you know struggled last year because of their inability to draw low income consumers. You know, they're impacted most by inflation, right, We've had four plus years of restaurant price hikes and higher costs across the board, right, and so you know, chains that are exposed to low income consumers are going to continue to press on value to try to bring them into the fold. You know, it seemed like it didn't seem like restaurants and sales did improve for a quick service in the fourth quarter, and we think a big part of that is just a re establishing of their value proposition.

You know, it continues to be the weak spot at McDonald's and for anyone that has a lot of exposure to low income consumers. So the entire QSR space, right, Jack in the Box, Wendy's, Burger King, you know, a lot a lot of chains, you know struggled last year because of their inability to draw low income consumers. You know, they're impacted most by inflation, right, We've had four plus years of restaurant price hikes and higher costs across the board, right, and so you know, chains that are exposed to low income consumers are going to continue to press on value to try to bring them into the fold. You know, it seemed like it didn't seem like restaurants and sales did improve for a quick service in the fourth quarter, and we think a big part of that is just a re establishing of their value proposition.

Right.

Right.

McDonald's early last year got a lot of shade about the eighteen dollars big mac meal in Connecticut, right, and so they decided to push hard on value, and prior to the E Coli outbreak, you know, October had some really good results. They were drawing customers in with that five dollars meal deal, and traffic was positive for the first time during the year. So value pushing on value has been successful for McDonald's. That's not good for their competitors because Donald's has the most scale, right, But we think this is going to continue throughout twenty twenty five in the quick service industry.

McDonald's early last year got a lot of shade about the eighteen dollars big mac meal in Connecticut, right, and so they decided to push hard on value, and prior to the E Coli outbreak, you know, October had some really good results. They were drawing customers in with that five dollars meal deal, and traffic was positive for the first time during the year. So value pushing on value has been successful for McDonald's. That's not good for their competitors because Donald's has the most scale, right, But we think this is going to continue throughout twenty twenty five in the quick service industry.

So just to confirm you're seeing, there was a meal that came up to eighteen dollars. You totally missed this.

So just to confirm you're seeing, there was a meal that came up to eighteen dollars. You totally missed this.

She totally missed this one.

She totally missed this one.

Yeah, yeah, it was one franchisee in Connecticut. Of course it was Connecticut, right, no comment, no, fair enough, fair enough. But he was he was pushing back because he, you know, he was dealing with a lot of inflation and he was just you know, he wanted to make some money on the big mcneilie was trying to make a point in.

Yeah, yeah, it was one franchisee in Connecticut. Of course it was Connecticut, right, no comment, no, fair enough, fair enough. But he was he was pushing back because he, you know, he was dealing with a lot of inflation and he was just you know, he wanted to make some money on the big mcneilie was trying to make a point in.

The frintage specialty.

The frintage specialty.

Oh wow, so many things I think about on that.

Oh wow, so many things I think about on that.

All right, Michael, thanks a love. Were gonna leave it there.

All right, Michael, thanks a love. Were gonna leave it there.

Michael Halen, a Bloomberg Intelligence in Your Restaurant and Food Service analyst, joining us on McDonald's.

Michael Halen, a Bloomberg Intelligence in Your Restaurant and Food Service analyst, joining us on McDonald's.

This is a Bloomberg Intelligence podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.

This is a Bloomberg Intelligence podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.

M

M