Boaz Weinstein Warns ‘Wheels Coming Off’ Private Credit Funds

10:27Tim Stenovec:It's just getting good. Visit lifemd.com slash goodlife. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna. And I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive.

11:22Yeah.

11:23Tim Stenovec:Wow. So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

11:52Boaz Weinstein:This podcast is brought to you by WISE, the app for international people using money around the globe. When it comes to sending money abroad, many providers claim to offer free fees and competitive rates. But don't be fooled. This can be code for inflated exchange rates. With the Wise account, you can send, spend, and receive money in over 40 currencies without ever having to worry about hidden fees. Sending pounds across the pond? Most transfers arrive in 20 seconds or less. Spending reals in Rio? The Wise Travel Card gives you the mid-market rate on every purchase. No costly markups on your bill.

12:24Boaz Weinstein:Getting paid in dollars for your side gig? avoid hidden fees, and get the real exchange rate every time. With 24-7 access to live support, your international transactions with Wise are quick, transparent, and safe. Plus, Wise runs over 7 million daily checks to catch and prevent fraud. 15 million people already trust Wise to manage their money internationally. Be smart. Get Wise. Download the Wise app today or visit wise.com. Terms and conditions apply.

12:53Tim Stenovec:You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube.

13:07Carol Massar:Now we want to get to some of today's trade and economic fundamentals behind it all. There's a lot going on, you know, things like that little thing called inflation.

13:16Boaz Weinstein:I think it will be addressed tonight in the State of the Union.

13:18Carol Massar:I think it will, right? Yeah. Affordability at large.

13:20Boaz Weinstein:Oh, no question. I think many people argue, though, it's still a problem. The Fed largely reminds us, yes, it is. And yet there are those that are concerned about the slowing U.S. labor market. Earlier today at the 2026 National Association of Business Economics Policy meeting underway in Washington, D.C., Bloomberg's Mike McKee caught up with Fed Bank Reserve President of Chicago, Austin Goolsbee, to talk about the Supreme Court's ruling and how it could impact U.S. inflation. When the part of inflation that has come from tariffs is supposed to go away, It's supposed to be transitory. And when you see things like the forecast say inflation is going to peak out and then start falling by the end of 2025, and then that moves the goalpost, well, maybe it'll be the first quarter of 26.

14:11Boaz Weinstein:And now they're saying, well, maybe it will be the second quarter of 26. That's not a great sign. We need to see what we should see, especially on the good side. If the tariff inflation is transitory, it's supposed to start going away. That's Bloomberg Mike McKee caught in catching up with the Federal Reserve Bank of Chicago President Austin Goolsbee a little earlier today.

14:37Carol Massar:Well, and this is kind of the predicament we are when we see that Friday decision, Supreme Court decision when it comes to tariffs. What does that mean? do we take away inflationary pressures, right, when it comes to costs? This is something we've talked about that ultimately the consumer is going to pay a higher cost. Some companies have been eating that higher cost because of tariffs. But eventually, you know, we're seeing things already being passed on to consumers. And Austin Goolsbee kind of getting to this point, like, where are we? Like, it's kind of a moving goalpost, like, all right, a big decision on Friday.

15:11Carol Massar:But then we have the president over the weekend, and we talked about this a lot yesterday, of imposing his own kind of across-the-board tariffs. And so we're trying to figure out if tariff inflation is transitory. He said, you know, it's supposed to start going away. And that's kind of like the question and predicament we're in.

15:27Boaz Weinstein:Well, let's get that question over to Lauren Goodwin. She's economist and chief market strategist at New York Life Investments. She joins us here in the studio. So following that Supreme Court decision, do we have a clear view on where inflation goes from here? I don't think we were ever going to be super clear on the impact that tariffs have directly to inflation. When you're looking at an inflation forecast, you can certainly look at which types of goods are receiving tariffs, how that might roll into the total number. But keep in mind, there is a bigger geopolitical context that's changing as well with respect to how goods are sourced, where supply chains are moving.

15:59Boaz Weinstein:That started during the pandemic, if not before. And so I think the conversation around tariffs and uncertainty and what it means certainly for the deficit is very reasonable. but the specific pass through to consumers, I don't know that we were ever really going to have

16:13Carol Massar:a great number on that. So in terms of the deficit, you're saying this is revenue that maybe is going away that could have helped to cut back the U.S. deficit. Or no, or yes. Well, that's the concern.

16:24Boaz Weinstein:Over the last couple of days, to be honest with ourselves and really any investor that I've been speaking to, most folks' range of average effective tariff rate was somewhere between 10 and 12 and 15 and 16 percent. And it looks like that's where we're likely to net out regardless of the authority used for those tariffs. And so that likely means we don't have a huge change in deficit assumptions. Really, the activity we've seen on the curve, I think, suggests that the market agrees with that.

16:52Carol Massar:What about other inflationary pressures in terms of the president's big spending bill that he sent, you know, that was passed last year? So is that kind of tailwind for the economy and that's inflationary in the long run? Tell us about kind of how you're gaming out inflation for this year.

17:10Boaz Weinstein:Yeah, that's really where the rub is. If you look at the broader economy picture, you have, of course, tariffs and that tax on the consumer. Again, difficult to handicap, but we know it's there. Same is true of global supply chains and geopolitical challenges. And certainly these fiscal tailwinds that we see supporting the consumer likely mean that prices are going to continue moving higher. Now, it's my view, and we've talked about this a bit before, that a strong inflation print a couple times in a row is probably one of the more disruptive events for this market pricing that we could see. However, it's not clear to me that that's going to be the mechanism that disrupts the market here in the next couple of months.

17:50Boaz Weinstein:I'm watching for it, but it's not in our base case. What I think, though, that that affordability challenge creates, talk a lot about how we don't really see that in the market. I don't know that I agree because a lot of the spending and more, I'll call it populist leaning policies from both sides of the aisle that we see are a reflection of knowing that the average American is struggling with affordability. What? We only have two minutes left and there's a lot that we want to get to. Okay, so I want to get to a little bit of your view on AI and productivity. We don't have time to play the sound, but there's a lot of people talking about this right now.

18:30Boaz Weinstein:And yesterday, IBM was the latest example of what happens to a stock that people think is under threat from AI. The productivity side of this, how do we look at that? So here's the real answer. None of us know.

18:45Tim Stenovec:Certainly none of us in macro world know. You're in good company saying that.

18:48Boaz Weinstein:Certainly none of us in macro world know. Look, the way that productivity will be garnered from this technology is much more closely in the hands of the technology actors than in the macro and investment space. And so what we're all doing is crafting our scenarios. And one thing I'll say about our high uptake, medium uptake, low intake scenarios, they're all disruptive. And so I think what we need to focus on instead of the specific winners and losers, which I think are too early to identify, it's how do you get more accustomed to that disruptive market where leadership is changing the way it has been pretty regularly?

19:24Carol Massar:I think it's tough. And I think, you know, the caveat is, and you are not alone. You know, Lauren, everybody says it's early on. We don't really know. And that even the report, the research report that came out yesterday, that it's just too soon to kind of figure out winners and losers and the impact. I mean, we did Fed Governor Chris Waller talking today about the U.S. Central Bank moving towards a system-wide deployment of AI across regional banks and its D.C. headquarters. But that's, again, it's a tool that everybody's playing with.

19:52Boaz Weinstein:Yeah, we should hope that they are, right? Everyone, the more we use AI, the more unfireable. I botched that, but the better it is for us. Your job is safe for today.

20:02Carol Massar:Someone in the world said, if you're not using it, you've just got to start. Otherwise, you're behind already. Lauren Goodwin, you rock. Thank you so much.

20:09Boaz Weinstein:Stay with us. More from Bloomberg Businessweek Daily coming up after this.

20:18Tim Stenovec:Hello, hello. Hello, I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna. And I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today with the goal of being 70 % more productive.

21:05Tim Stenovec:Yeah. Wow. So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

21:35Boaz Weinstein:This podcast is brought to you by WISE, the app for international people using money around the globe. When it comes to sending money abroad, many providers claim to offer free fees and competitive rates. But don't be fooled. This can be code for inflated exchange rates. With the Wise account, you can send, spend, and receive money in over 40 currencies without ever having to worry about hidden fees. Sending pounds across the pond? Most transfers arrive in 20 seconds or less. Spending reals in Rio? The Wise Travel Card gives you the mid-market rate on every purchase. No costly markups on your bill.

22:07Boaz Weinstein:Getting paid in dollars for your side gig? avoid hidden fees, and get the real exchange rate every time. With 24-7 access to live support, your international transactions with WISE are quick, transparent, and safe. Plus, WISE runs over 7 million daily checks to catch and prevent fraud. 15 million people already trust WISE to manage their money internationally. Be smart. Get WISE. Download the WISE app today or visit WISE.com. Terms and conditions apply.

22:35Tim Stenovec:Adobe Acrobat Studio, your new foundation. Use PDF spaces to generate a presentation. Grab your docs, your permits, your moves. AI levels of your pitch gets it in a groove. Choose a template with your timeless cool. Come on now, let's flex those tools. Drive, design, deliver, make it sing. AI builds the deck so you can build that thing. Do that, do that, do that with Acrobat.

23:01Boaz Weinstein:Learn more at adobe.com slash do that with Acrobat.

23:06Tim Stenovec:You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube.

23:19Carol Massar:So among our most read stories on the Bloomberg today, Charlie just mentioned it, has to do with Meta Platforms doing a mega deal with advanced micro devices. It's a blockbuster one that marks a win for chip makers' attempts to catch up with NVIDIA. So let's get right to it. With us is Bloomberg Tech co-host Ed Ludlow, airing every Monday through Friday at 11 a.m. Wall Street time on Bloomberg Television. Ed, out there in our San Francisco News Bureau. Ed, walk us through the particulars of, I'm not sure what to call it, arrangement, partnership, deal? What do you want to call it?

23:51Boaz Weinstein:Well, it's a deal. For sure, it's a deal. And I'm sure the ink's dry on it. But, you know, it's six gigawatts of capacity. That's like the equivalent of the output of six nuclear reactors. Power millions and millions of homes with that. I'm just laughing because I want to see the power, Ed. Well, you know, people have been posing really good questions, which is like a very simple question is why do we talk about data center capacity in terms of gigawatts and not like in dollars or number of chips? And the reality is like at a base level, data is transferred within the server inside the data center using electrons and it requires electricity to power it.

24:28Boaz Weinstein:You know, and that's why we measure it that way. But for AMD, it's important, right, because it represents tens of billions of dollars of revenue over that period. And it's a kind of vote of confidence from a very large data center operator on their latest technology, which starts with MI450 and then the roadmap goes from that.

24:47Carol Massar:So much more powerful to say how much power will be created or how much data center capacity versus saying we're going to buy a jillion chips from you.

24:59Boaz Weinstein:Yeah, well, there are loads of reasons for that, in part because like AMD's story is now mirroring what NVIDIA went through, which is we used to talk about NVIDIA as just having a great chip, single GPU, as if it was something you could sort of hold up in your hand. and it doesn't really work like that. You know, AMD does the whole design of the server and the server is power hungry, you know, and it puts a burden on the grid. But that's why we talk about it in those terms in common parlance in gigawatts because it explains the scale of the compute, right? And this is massive, massive scale. The average size of a data center right now is like 300 to 500 megawatts.

25:38Boaz Weinstein:So the fact that these two are committing to six gigawatts over time, it is really big, But note that like Meta's talked about all of this, you know, by the end of this decade, having tens of gigawatts online and beyond that, hundreds of gigawatts, you know, for what they want to achieve in AI. So, Ed, let's talk about the financing of this and whether or not they're like, like explain the equity involvement, because as part of the arrangement, Meta will receive warrants to buy 160 million AMD shares in stages. Does that mean that, let's say AMD's price doesn't go up to$600 per share, which is in the agreement.

26:16Boaz Weinstein:Does that mean that Meta won't own that portion of AMD stock? Yeah. So they are mandatory and they are operational and financial goals. So in one scenario, which I think is the final tranche of how it's structured, AMD share price would need to hit$600 a share. And let me just look down at my screen. 213. There's some way to go, right? But it works in both directions. This, in terms of what AMD gets, AMD will book revenue on this. Meta will pay AMD for the server designs and computers. And so there are operational milestones. In other words, Meta has the right to act on those warrants if it actually builds these data centers.

27:04Boaz Weinstein:and actually, you know, deploys them. So as of now and in the near future, Meta won't necessarily be a shareholder of AMD as a result of this deal. Yeah, it is structured at different prices. And, you know, what's interesting about it is like, it's almost identical to what AMD did with OpenAI. OpenAI was also offered warrants for$160 million, 160 million shares, apologies. but they were set against very clearly structured operational goals. In other words, until somebody has dug up the ground, put the data center in and switched on the computer, nothing happens. And, you know, OpenAI is still a little ways off from that happening too.

27:48Carol Massar:Okay. Is anyone getting pushed out or left out in the AI race by this deal being done? Like, is anybody like saying, wait a minute, what are they doing?

27:57Boaz Weinstein:The other way to look at it is like through Meta's lens. like Meta literally just did a similar deal with NVIDIA. And what's so interesting, right, is that they framed that deal in the millions of chips. And, you know, going back to what I was saying a moment ago about gigawatts, but it's a similar arrangement. And so Meta is doing three things. It is a massive buyer of NVIDIA gear. It's a massive buyer of AMD gear, but it also deploys is like a lot of resources internally to develop its own custom accelerators. And you either accept or don't the base position that all of these companies that are working on AI are supply constrained.

28:36Boaz Weinstein:In other words, they don't have access currently to enough compute to achieve the things that they want to do. And so to de-risk that, they are diversifying the sources of that compute in different ways.

28:48Carol Massar:You know, listening to that, A, and it makes me think about talking to people in the world of power generation and just saying how a lot of the hyperscalers were doing deals with a lot of different utilities just to make sure that they're covered and that all those contracts or initial maybe conversations weren't going to all pan out. And I guess that's what I'm trying to, when I hear this, you know, it sounds like meta being smart, making sure its supply chain is robust internally, externally, as much as it can. But it also makes me think a lot of this sounds like insurance policies. And if the demand ultimately isn't there or it doesn't, the ROI isn't there, this starts to come undone, right?

29:27Carol Massar:Is that the big question?

29:28Boaz Weinstein:There's an element of future-proofing. So the way that Mark Zuckerberg explains it is, remember, he sat next to the president and promised to invest$600 billion. And more recently, he's talked about the risk of misspending about$200 billion. And to Mark Zuckerberg, the greater risk is to not spend it, because then you won't know if you'll have the tools available to you to develop the AI models that you think are necessary at the time. It's also another reason why we track that PJM data. I think we've on Business Week talked about this before. So PJM is like the biggest utility basically on the eastern seaboard.

30:04Boaz Weinstein:And they actually revised down their peak demand forecast because to your point, lots of things get announced on paper. They sit on electricity demands. They never build the things. And so we're trying to understand what's really being built on the ground. And I guess, too, like if we think about how fast this stuff has just accelerated in recent years, Ed, you know, maybe things could get more efficient. Maybe not as much electricity will be in demand, as some analysts have said. I don't know. We are speaking with Ed Ludlow. He's the co-host of Bloomberg Tech on Bloomberg TV. He joins us from our San Francisco Bureau.

30:38Boaz Weinstein:Ed, a real feather in the cap for AMD and Lisa Su, right? Yeah. You know, they have tried to differentiate themselves. In any given quarter at the moment, AMD will book$10 billion of revenue for absolutely everything it does. NVIDIA's just data center business is$50 billion a quarter. And so, you know, that shows you where they are right now. Now, their pitch has been an engineering-focused pitch where, particularly in inference, in other words, running the models, not training them, is where their technology performs best. and like that was a big part of this to say like one of the reasons meta is doing this with us is that they will co-engineer those later generations of data center to use amd's technology right they'll work together the different engineering teams to make them work as efficiently as possible in a world where right now like nvidia dominates largely for training but dominates generally in data center and then you have google's tpu its own custom chip which is good at both training and inference.

31:40Boaz Weinstein:And so, again, this is about meta saying, what are our options here? AMD is a good option for that bucket, which is like specialized inference, as far as we can tell. Yeah.

31:50Carol Massar:And it's also just kind of interesting looking at it from a stock perspective. I mean, AMD is soaring in today's session. You know that we're up about 9%. But AMD is little changed on the year. NVIDIA is little changed on the year after strong runs last year. I mean, investors are still being kind of cautious, right? When it comes to this group, Ed.

32:12Boaz Weinstein:Yeah. I mean, I think back to October when AMD did the deal with OpenAI and the stock jumped 25 % or whatever it was. So people have short memories, like your partnerships are relative in the eyes of the market. This was a multi-year thing going into the start of 2026, right? So yeah, like NVIDIA is up modestly, but it had grown triple digits in the past whatever years. And, you know, it's now trading at relatively low multiple based on its forward earnings. So people are kind of like, OK, let's cool it a bit.

32:44Carol Massar:Hey, we've got about a couple of minutes left here. I want to ask you about Anthropic also on our radar. Stocks, actually the market overall kind of rebounding. As they said, it was expanding the reach of its cloud chatbot to build partnerships in the software and services sectors. And we know this has been a space that keeps getting beat up by the AI scare that AI is going to kind of take away all their business. I'm trying to understand AI working with software firms or AI a threat, or we don't really know yet.

33:13Boaz Weinstein:So I'll try and summarize all of it because there were several, say a dozen stocks that moved to the upside based on this partnership with Anthropic. Anthropic has a very competent model clawed. Historically, it is focused on coding and making coding more efficient and getting rid of backlogs. All it's basically now saying is that They have an agentic platform that is a platform. Instead of being a standalone tool, you basically go to any given software company, look at the thing they already do and say, wouldn't it be great if Claude just worked within that? Intuit is a good example. People will use Intuit for their tax returns as consumers and small and medium businesses will as well.

33:49Boaz Weinstein:Imagine if you actually went onto that platform and there was an agent. And by agent, we mean, you know, an AI that's authorized to do something. That's what they came out and said today.

33:59Carol Massar:Ed Ludlow, of course, co-host of Bloomberg Tech on Bloomberg TV. Catch it 11 a.m. Wall Street time on Bloomberg Television.

34:05Boaz Weinstein:Stay with us. More from Bloomberg Businessweek Daily coming up after this.

34:28Tim Stenovec:Pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive. Yeah. Wow. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things.

35:17Tim Stenovec:To listen to the full conversation, visit ibm.com slash smarttalks.

35:47Boaz Weinstein:without ever having to worry about hidden fees. Sending pounds across the pond? Most transfers arrive in 20 seconds or less. Spending reals in Rio? The Wise Travel Card gives you the mid-market rate on every purchase. No costly markups on your bill. Getting paid in dollars for your side gig? Avoid hidden fees and get the real exchange rate every time. With 24-7 access to live support, your international transactions with Wise are quick, transparent, and safe. Plus, Wise runs over 7 million daily checks to catch and prevent fraud. 15 million people already trust Wise to manage their money internationally.

36:22Boaz Weinstein:Be smart. Get Wise. Download the Wise app today or visit wise.com. Terms and conditions apply.

36:42Tim Stenovec:school. Come on now, let's flex those tools. Drive, design, deliver, make it sing. AI builds the deck so you can build that thing. Do that, do that, do that with Acrobat.

36:54Boaz Weinstein:Learn more at adobe.com slash do that with Acrobat.

36:59Tim Stenovec:You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App.

37:10Boaz Weinstein:Or watch us live on YouTube. Well, President Trump's efforts to end Russia's invasion of Ukraine are stalling with peace talks deadlocked and the fighting largely at a stalemate after four years of war.

37:21Carol Massar:It's like it's hard to get my head around because I remember our first conversations when this broke out and it was like, can this end within the year?

37:30Boaz Weinstein:And it was like, well, the first conversations, if I recall correctly, everybody thought Ukraine would fall within three or four days.

37:38Carol Massar:And look at like here we are. and the fighting continues. But it's not without its costs on so many different levels and first and foremost, of course, the loss of just human lives. But there's just so much that has really hurt, certainly Ukraine in a big way.

37:52Boaz Weinstein:Elise Giuliano is Senior Lecturer in Political Science at Columbia University. She's also Director of Graduate Studies at Columbia's Harriman Institute for Russian, Eurasian, and East European Studies. She's also Director of the Program on U.S.-Russian Relations. She joins us from New York. Professor, always good to have you on the program. If we think back to just four years ago, and I mean, it seems it's just remarkable to realize that that time has passed and what people thought in the beginning, what people are thinking right now. President Trump making it a priority, at least during the election, in his first year in office, to end the war.

38:30Boaz Weinstein:In your view, is the end of the war in sight?

38:34Tim Stenovec:the end of the war unfortunately is not in sight and i think uh the most sober-minded view about this is the view of ukrainians who understand that at this point uh president trump thought he could i think he said end the war um in a few days and he thought it would be a simple task but the two sides remain very far apart and the reason for this really is the intransigence of the Russian side of Putin, who really has not moved off of his initial goals in undertaking the invasion four years ago.

39:05Carol Massar:Yeah, that's where I wanted to go. I mean, this is really, I feel like the ball is in his court. And unless he gives up the land grab and some other conditions, I mean, what do we need to see from President Putin for this to happen?

39:21Tim Stenovec:Well, the negotiations that are ongoing are really focusing and talking about territory. Yeah. But this just makes it sound like a big game of risk. But what Putin wanted when he went into Ukraine four years ago was to have Ukraine in Russia's orbit in a kind of 19th century great powers way where a great power has should believes that it has sovereignty or control over its neighbors. So I don't think he's moved off of that goal. If you remember, the initial invasion was to directly toward Kiev to overthrow the government of Ukraine and to put in place a puppet or kind of pro-Russian puppet regime.

40:00Tim Stenovec:That was a huge failure. And so now we're talking about territory and there's a stalemate on the line of contact in the east and south. However, Putin does not seem to, and the negotiations do not really seem to meet in the middle, because this is not about territory for Russia, at least for Putin. And for Ukraine, this is about the viability, the sovereignty, the very existence of their state.

40:24Boaz Weinstein:If it's not about territory for Vladimir Putin, what is it about?

40:28Tim Stenovec:It's about having Ukraine in Russia's orbit. So whether that means keeping Ukraine out of Europe, out of NATO, out of an alliance with the West, with the U.S., that's what it's about. So if, you know, if they do come to a ceasefire and they settle this kind of sticky point about territory, the problem is that what the Russian side is asking for is something that Ukraine cannot give, which is one territory, all of Donbass, including territory that Russia does not control. right terribly and if they if they win that if they get that um then they could be well positioned to mount another uh invasion or or a a another you know war in a short period of time whereas ukraine wants security guarantees and it wants those security guarantees from the west and from europe and that is exactly what russia does not want it does not want europe involved uh so there you see the kind of fundamental conflict between the two sides.

41:31Tim Stenovec:Yeah.

41:31Carol Massar:You know, European Commission President Ursula von der Leyen said that the bloc will deliver on its$106 billion loan package to Ukraine one way or another, her words, as, you know, we continue to see this go on. And we're looking at Ukraine maybe running out of funds in just a matter of weeks. Why can't we have more of a backing for Ukraine? Or is that then a major shift in geopolitical alliances? Why not? Can't the world, the United States get more? Why can't Ukraine be a NATO? Like what message would that send to the rest of the world? It certainly would send a strong message to Russia. But it would also mean the potential for everybody else to get involved in that conflict, right?

42:16Carol Massar:NATO allies. lies.

42:18Tim Stenovec:Okay, well, there's a few things there. I mean, Ukraine, the hesitance of the US and Europe to place Ukraine in NATO is because NATO is a military alliance, and then Europe and the US would possibly be engaged in war with a nuclear power, Russia. So that's been the kind of hesitancy on the part of both the Biden and Trump administration welcoming Ukraine into NATO. However, that doesn't mean that once a ceasefire is achieved, that Europe cannot help to secure the point of contact and provide security guarantees to Ukraine, something short of NATO membership. And that's what they're kind of working on.

43:00Tim Stenovec:And that's the direction that the EU is moving in. But in terms of the short term kinds of problems, you have Hungary very much a Russian puppet, well, not fully a puppet state, but aligned with Russia kind of acting as a spoiler within the EU. So the EU is a is a complicated actor in and of itself.

43:20Boaz Weinstein:So, Elise, over the last four years, there have been different moments where we've learned about what's happening inside of Russia, what's happening inside of Ukraine, especially with regard to people who've lost their lives as a result of this conflict. On the Russian side, I'm curious about support for the war and where Vladimir Putin finds the people to do the fighting, because that was a concern a couple of years ago.

43:45Tim Stenovec:Yeah, certainly we do not see Russians signing up in droves to fight this war. There isn't even a kind of understanding among many Russians of why Russia is fighting this war. And so where Putin finds the Russians willing to fight is in mainly the rural areas of Russia, the very core areas of Russia. And they are paid huge amounts to go to the front. And these amounts are, you know, life changing for some of these the families in these rural areas. And so, you know, basically, a lot of people are calling Russian army a mercenary army at this point. And that's that's an important point, because if Russia's economy is doing so poorly, which it is, especially lately, is it going to have enough money to continue essentially hiring its own citizens, paying them these high salaries and payouts and death payouts if the economy is really suffering.

44:45Carol Massar:Elise, if there's an agreement where Ukraine gives up territory, then what's to stop Russia, President Putin, from doing this again? He's already, this is his second, would be his second land grab, certainly when it comes to Ukraine. If he does walk away with land, if there is some kind of resolution. I mean, does it then kind of just say to him, well, keep going? Like, should we assume that he will keep going? Like, is that crucial that he gets no land out of this?

45:19Tim Stenovec:Right. So that's the fear of Ukraine and that's the fear of the EU and many European states and formerly under the previous administration. Is it a right fear though? Is it accurate? Is it the right fear to have? Well, you know, so, you know, if Putin is in power, it to me, as long as he remains in power and as long as he has this kind of obsession with Ukraine and with the kind of ideas that he's been articulating all along since, you know, the past four years, then it seems to me that he will not give up on the goal of, as I said at the beginning, taking control of Ukraine and having Ukraine as as a neighboring state.

45:57Tim Stenovec:that's basically under the sovereignty of Russia. And so, yeah, this is the fear. You have Russian troops positioned very much inside some of the areas of Ukraine that would allow them, if there were ceasefire, that would allow them to restart the war again, you know, in six months, in a year, in a few years.

46:18Boaz Weinstein:Is there anything in your view that the U.S. could or should be doing in order to hasten an end to the conflict?

46:25Tim Stenovec:Well, sure. I mean, the U.S. has a lot of is a strong is the strongest state in the world. It has a lot of tools. You could say tools of statecraft that it could use and is not using. First of all, let's be aware of the fact that the U.S. has cut off aid, military aid and assistance to Ukraine under the Trump administration. Cut off. Right. So now it's Europe who purchases weapons from the U.S. and provides aid and assistance to Ukraine. So financially, that's one thing. But especially, you know, there could be further sanctions. There could be better enforcement of sanctions. And there could be threats of military force by sending those weapons to Ukraine.

47:13Tim Stenovec:So there could be much stronger military support for Ukraine as a threat. Look, the U.S. is doing it right now with Iran. with the traditional tools of diplomacy, the threat of the use of force to compel another state to engage in the policy or political outcome that the U.S. wants. And the U.S. is not doing this. It's just taking a backseat. And it's really not clear that the negotiations are bringing the great power to bear on Russia that we could that we could be bringing. All right.

47:46Carol Massar:We're going to leave it there. But, Elise, always appreciate your insight and thoughts on all of this as this war between the two entering its fifth year. Thanks to Elise Giuliano. She's senior lecturer in political science at Columbia University, also director of graduate studies at Columbia's Harriman Institute for Russian, Eurasian and East European Studies, director of program on U.S.-Russian relations.

48:07Tim Stenovec:This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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