Fed Chair Search Expands to Include Bowman, Jefferson and Logan

0:00What if data didn't sit still? What if intelligence moved with us? Not buried in reports, but activated in real time, where lives are being shaped, where decisions are being made. It all starts with a question. Where is the potential? Cotality turns data into clarity, intelligence into insight, insight into action. Because when intelligence moves, we all move forward. Cotality. Intelligence beyond bounds. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need.

0:41Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. This is Jacob Goldstein from What's Your Problem? Running a business is hard enough. Don't make it harder with a dozen apps that don't talk to each other. One for sales, another for inventory, a separate one for accounting. That's software overload. Odoo is the all-in-one platform that replaces them all. CRM, accounting, inventory, e-commerce, HR.

1:22Fully integrated, easy to use, and built to grow with your business. Thousands have already made the switch. Why not you? Try Odoo for free at odoo.com. That's odoo.com. This is Osvaloshin from Tech Stuff. For many kids and teens, math class is a source of stress. And a lot of that stress comes from learning at the wrong pace. That's why I want to tell you about Brilliant. Brilliant is the online math tutor that's visual and interactive. It helps students actually understand math step by step, and gives them guidance when they need it. Brilliant was built by experts from MIT and Harvard and is trusted by millions of teachers and parents.

2:03Sign up at brilliant.org slash tutor and get 20 % off for back to school. That's brilliant.org slash tutor. Bloomberg Audio Studios. Podcasts, radio, news. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenevec on Bloomberg Radio. It is Bloomberg Business Week Daily. I'm Tim Stenevec along with Isabel Lee from the Bloomberg News cross-asset team.

2:50Carol master is out today and it is a data heavy week right now if we look at the s &p 500 we're down just about well just shy of two tenths of one percent the nasdaq down about the same the doubt down half a percentage point uh as far as earnings go we're pretty much we have nvidia at the end of this month but we've made it through quite a few of the companies in the s &p 500 uh july inflation data we're getting tomorrow. The CPI is what I'm referring to. We're going to get PPI on Thursday, retail sales on Friday, industrial production, some sentiment data from the University of Michigan as well.

3:27Watching it all is Molly Smith. She's Bloomberg News Economics Editor. She joins us here in the Bloomberg Interactive Brokers Studio. Did I forget anything? Those are the big ones. Those are the big ones. What's the most important? CPI tomorrow? Oh yeah, hands down. So that's the biggie that will be the Fed though. You don't care about CPI, right? Oh, well they do. I mean, It's not, of course, their preferred inflation measure. That's called the PCE, the Personal Consumptions Expenditures Price Index. It's a lot lengthier to pronounce, but they prefer the PCE. But the thing is, PCE draws a lot from CPI.

4:00So we do care what that has to say, as well as what PPI has to say, which also feeds into the PCE. And I think that should do it on acronyms for now. So, yeah, we'll get to more. Don't worry. But at least for that sentence. But yeah, the CPI tomorrow. So that's going to be for the July inflation data. And it looks like we're going to see what economists are expecting more signs of tariff pass through in some of those key goods categories, as well as some pickup in services costs. So it's going to seem probably a bit broad from what people are expecting so far. So that's going to like, you know, for us, of course, like we're looking at the goods categories because we want to know what's happening with tariffs.

4:42And that's what they mostly apply to. But to see that services costs are picking up again as well, that would be just really bad news for the Fed to see that this is really not just a tariff story if broader inflation is picking up. So based on your reporting, how much of tariff is really motivating inflation? So it's been I mean, I think we got the clear sign in the June CPI, which that didn't affect the headline number so much. But when we looked at some of those key goods categories of, you know, goods that are commonly imported, like toys and appliances and electronics, that those were noticeably firmer in June.

5:20And that's what we're looking for in this report as well, as well as some other goods categories to flag also. So that's where, you know, it's been a little bit tricky then to decide, like, how much are tariffs really impacting inflation? Is it just going to be in some of these goods categories, but you have these other dynamics that are keeping overall inflation in check? Like, how much of that does that, we want to, of course, look at inflation as a whole for the Fed's perspective, but they also want to know how persistent any of this is going to be and how broad the impacts will be. Well, Jay Powell has talked about it being a one-time hit and inflationary in the sense of, yes, it'll happen one time, but then you won't necessarily see the sustained price increases year after year from tariffs.

6:08Is that generally what economists believe too? I think there's still a bit of a split opinion about how this is going to happen because there hasn't really been consistency as to how companies are responding with their pricing strategies. And a lot of them have been trying to hold off on raising prices so far, because there's been so many reversals and pauses and on again, off again with the tariffs. And, you know, of course, the most part, for the most part, the big ones went into effect, you know, just at the end of July on when he set those reciprocal tariff rates. But we still have, you know, perhaps there's going to be a truce now with China extended for another three months.

6:44And a lot of these companies are sitting here looking at their pricing strategies and they don't want to antagonize their customers more than they need to. Maybe let's see, can we hold off only raised prices once, once we really know what's going on, but who knows how long that's going to take and how long we can wait in the meantime. What about the Fed? We have reporting that shows that the search has been expanded to three more qualified candidates. So this is for the Fed chair you're talking about. Yes, so Jay Powell, term doesn't end until next May. And that's really what's been a lot of the news going on at the Fed lately of who's going to be replacing Powell.

7:22Of course, Trump has taken huge aim at Powell personally for why the Fed hasn't lowered interest rates yet. It's not just Powell, though, who, you know, is in the camp of had been wanting to hold rates steady. Of course, we had two Fed governors dissent at the meeting last month. But it seems like there is more of a camp maybe now emerging that interest rates cuts are needed after seeing that week July jobs report. So I mean, there's just so much at the Fed, though, in terms of we had then a Fed governor also resign shortly after that jobs report. And so there's going to be like a temporary seat to fill in the meantime.

7:59A lot of personnel changes over there. But yes, obviously looking very closely at who's next after Powell. Yeah, I mean, it was pretty wild to have that. You were here with us on that Friday when all of this was a scary day. Was it? Yeah. I mean, I, so that was the Friday, the jobs report you made. Right. So that was eight 30 in the morning. And then the crazy downward revisions, obviously really substantial. That was wild. And then it was almost two and I'm thinking, okay, I can probably go to the bathroom now. I can probably get lunch now, but let me come back to my desk first, just before I go heat up my lunch.

8:33And that's when he fired the BLS commissioner. So it was not in time, not in fact, time to get lunch yet. And then the Kugler news, that was the Fed governor who resigned, that came out shortly after the BLS chief being fired. So yeah, it was a busy day. So I want to start with the BLS chief being fired and what could happen to the organization and to the quality of data. Because even before this happened. You had written about the quality of data here in the United States and how it's typically held up as the gold standard. Statistics Canada is really good. We know New Zealand has really good data as well.

9:11And it's kind of seen by a lot of outsiders as a competitive advantage. Is that data going to remain good here in the U.S.? And that's certainly the hope. And as of right now, there's no reason to think that it won't. I think where economists get nervous, though, is that this has historically been both the position of BLS commissioner as well as BLS as an institution, very nonpartisan and independent and free of politics. And they're now worried that because Trump has accused the previous commissioner of manipulating the data for political reasons, that perhaps that, you know, there is now going to be, there's reason to think that there's political interference in the numbers, which, you know, again, under McIntyre's tenure, And you're there certainly was no suspicion.

9:57And Trump's claims are completely without evidence and and very much unfounded. The person who heads up the the group, though, isn't the one who actually determines the number. No, no. This is an agency of about 2000 people around the country. And a lot of these processes, you know, don't involve the commissioner, let alone a whole lot of people, period. You know, it's a very computerized program process that the data collectors are largely responsible for inputting the numbers into a system that will then, you know, aggregate it all together across the country, across all the different categories, whether we're talking about jobs or inflation, whatever it may be, and is then analyzed and presented to the commissioner once the numbers are finalized.

10:41So the commissioner really has no part in how these reports are assembled. They see the numbers at the very end, and then will brief the president's team the night before a big report comes out. So that'll be happening sometime later today for when Trump's economic team is going to tell him what's in the CPI report for tomorrow. Okay, keep that in mind ahead of tomorrow's report and, of course, ahead of the August number, which we will get in September for payrolls. That is Bloomberg News Economics editor Molly Smith joining us here in the Bloomberg Interactive Brokers Studio.

11:39when intelligence moves, we all move forward. Kotality. Intelligence beyond bounds. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same. The thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio.

12:14Start your free trial at adio.com slash iHeart. Hey, everyone. It's Cal Penn, host of Earsay, the Audible and iHeart Audiobook Club. This week on the podcast, I'm sitting down with Lily Chu, the author of the Audible original romantic comedy, Just Kiss Already. It's a story about a forensic anthropologist who secretly writes mystery novels, an actress who adapts his book into a film, and what happens when a meme and a media tour collide with a slow burn romance. It's performed by Simu Liu and Philippa Su, and it is an absolute blast. When you actually hear the performance, you realize that other people are taking your words and what you thought was kind of a straightforward sentence like, the cat in the corner is black.

13:03In my head, it's the cat in the corner is black, not the dog, not the gerbil. But someone else might say it, the cat in the corner is black. That's always fascinating to me, how they just bring in all these different nuances and really make it fun and interesting and distinctive. Listen to Earsay, the Audible and iHeart Audiobook Club on the iHeartRadio app or wherever you get your podcasts.

13:31This is Charity Lawson from Bachelor Happy Hour. Charity, I was thinking about this the other day. What's something that you'll always say yes to? That's easy. Seeing my friends, last minute girls trip, basically making memories you'll talk about for years. Same. And somehow every one of these memories comes with something to plan. That's so true. That's why Klarna stands out. It's about smarter tools that help you manage your money without taking away from the moments that matter. Exactly. With flexible ways to pay, cash back that builds automatically, and everything in one place, Klarna helps you feel more confident making everyday money decisions.

14:07Because when you have the right tools, everything feels more manageable. Download the Klarna app today or visit Klarna.com to learn more. California resident loans made or arranged pursuant to California Finance Law License, NMLS number 1353190. Clarina Balance account required to be eligible for cashback points. Limitations, terms and conditions apply. 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. President Trump downplayed expectations for his upcoming meeting with Russian leader Vladimir Putin.

14:45As he seeks to end the war in Ukraine, he cast it as a feel-out meeting. He said he would confer with Ukrainian and European leaders after the sit-down. The president's effort to moderate expectations for the summit follows Zelensky ruling out Putin's demand for territory that Moscow doesn't control as a precondition for a ceasefire, with the Ukrainian leader Zelensky citing the need for constitutional approval. President Trump on Monday slammed that excuse, adding that he was, quote, a little bothered by it. The next meeting will be with Zelensky and Putin or Zelensky and Putin and me. I'll be there if they need.

15:22But I want to have a meeting set up between the two leaders. I was a little bothered by the fact that Zelensky was saying, well, I have to get constitutional approval. I mean, he's got approval to go into war and kill everybody. But he needs approval to do a land swap because there'll be some land swapping going on. I know that through Russia and through conversations with everybody to the good for the good of Ukraine. Good stuff, not bad stuff. Also, some bad stuff for both. That was President Trump earlier today from the briefing room. Back with us is Ed Price. He's non-resident senior fellow at New York University.

15:58He's also a former British trade official. He joins us here in the Bloomberg Businessweek studio. And I want to start with the idea of a land swap being good for the good of Ukraine. is is a land swap the that's the president's words he said that this morning is in your view a land swap with russia the only way that this war will end um no it's not the only way this war will end and by the way land swap is a euphemism for conquest so the fact that the swap implies that each side is giving up something or sort right i mean it implies that but i'm sure that russia is going to get more than anything ukraine is going to be given and by the way the land we're talking about is Ukrainian land back to Crimea in 2014.

16:38So the fact that the US president is on television saying he's interested in a land swap is a euphemism. He means allowing Russia to conquer parts of Ukraine. You also argue that a weakened Russia benefits China more than a strengthened one. How does that align with the idea that Ukraine's victory should be decisive? I mean, is there a contradiction in crushing Russia while containing China? So you've caught me out in a contradiction very skillfully, and that's a good challenge. Because yes, on the one hand, if the West fights Russia and defeats Russia on the European plane, in the long run, that's going to empower Beijing, it's going to empower China, because they won't have a competitor in Eurasia.

17:21On the other hand, if you let Russia back into the tent, as it were, and give them something in Ukraine, you've undermined Western values such that the leaders in Beijing can turn around and say, well look why don't we just take taiwan because nobody has any principles um so yes i'm when i make the argument that we should fight russia and ukraine i then immediately contradict myself about the long run effect of that but i think that's because in essence kissinger made the biggest mistake in world history and decided to bring china into the tent before it was a democracy i want to go back to what you said you answered my previous question with it's one way the war could end what's another way the war could end well i mean if And that was a land swap that you were referring to.

18:03Yeah, so I mean, a land swap would pause the war. It wouldn't end the war because Russia would retool and they've moved their economy to a long-term war footing. Another way would be to beat them, right? It would be to give them the sufficient long-range weapons in 2022. I mean, we've been talking about this for years now and I've always made the same argument, which is like, if we just give them the kit, give the Ukrainians the kit, let them finish the job, they can get Russia out of Europe. But again, this is... Doesn't seem like there's US appetite for that. There's none. And I think we know why there was none under Biden, because he and Jake Sullivan were worried about Russian nuclear saber rattling, which I think was a mistake.

18:40We have nukes too, by the way. But under Trump, it's a bit more of a mystery. Like, why does Trump treat Putin so kindly? Why does Trump treat Putin so well? And it's not entirely clear to me, other than perhaps trying to bring Russia on board, like I say. And you described this moment as offering Putin, quote, peer status that he hasn't earned yet. So what, in your view, would have been a more appropriate U.S. stance towards China, especially at this stage of the war? so i think a more appropriate stance um if you're going to meet vladimir putin you do it on neutral ground you show that you're not happy about it right you make the right diplomatic noises that this guy is engaged in an illegal war um you don't invite him to alaska which by the way has bad juju because if we remember alaska it used to be russian and it's a bit of a it's a bit of a flex on putin's part to to be able to uh get over to alaska like that um but look i mean people like me would say you don't do it at all and that we are far past the point of diplomacy how far past the point are we um i don't believe that look we can't we obviously can't go back in time but ask that question with the with the question about is there any way to salvage that i mean that's another way of asking i think like how far into this war are we how long would this war continue we thought three and a half years ago would be two weeks or one week or five days yes and um i guess another point would be what is this war is this war a wider regional confrontation if so does giving putin what he wants now uh something that will stop that trend or continue i would argue continue it and so but look it's very difficult for analysts because on the one hand with the example of appeasement in the 1930s and the clear lesson of that is you should actually fight the bad guys and on the other hand we have the very clear lesson from the cuban missile crisis and the very clear lesson of that is maybe you should talk to the russians so we're kind of flying in the dark here because I make one argument, which is very hawkish, and some very sensible people, including the administration, make exactly the opposite argument.

20:38You also mentioned a, quote, American right-wing obsession with post-democratic Russia. Do you think that this ideological admiration is truly driving policy, or is it more a fringe narrative that's maybe being overstated? It's a bit weird, right? It's difficult to tell to what extent the alt-right so-called in American politics is literal, and to what extent they're actually just saying things that they think will get airtime, or saying things that they think are policies, sensible policies that they need to dress up in a sort of sexier language. I tend to take people seriously when they say things, right?

21:13As I get older, I realize that that kind of works as a rule of thumb. And when the alt-right says, look, we're in a late-stage republic, or we want to be post-democratic, or we don't actually believe that people should vote, my ears prick, and I think, okay, maybe that's true. right i don't think i don't know why i don't know what the benefit is to saying that unless you believe it let's pause on this for a second because we're getting some breaking news cnbc reporting is that president trump has extended the china tariff truce for 90 days the current deadline was set to expire tomorrow august 12th you you just let out a little bit of a laugh smiling i giggled it's not professional uh taco baby you see you see that's what this is it's pathetic why it's pathetic i mean the guy says here's my red line this is the date that something's going to happen this is absolutely written in stone turns out it's written in sand and it just makes us look silly and if he is going to go and meet putin on uh friday in alaska do you think putin's not watching that and thinking this guy has said something and then immediately caved again i mean it just really it's not i laugh because i laugh in despair and american state craft is all the worst for it.

22:25But you're saying this is not good for the credibility of the United States. Perhaps the president or someone else would argue, we just need more time to get these deals done. These are complicated things. Look at the trade deals that happened with China during the first administration. Those took years. They were a phased in approach. It makes sense that it will take more time. Well, I mean, you're talking to a former trade official who didn't used to have wrinkles, right? I mean, they do take time. You're looking good. Thanks for that. That's the makeup team, Bloomberg makeup team. Yeah, but they should just say that then, shouldn't they?

22:56They should say this stuff takes a long time. They shouldn't say in two weeks time, we're going to cure cancer and find unicorns. I think it demeans the United States. And he's actually put us in a lose-lose position. Either we go ahead and shoot ourselves in the foot on the economy, or we reverse course and look silly. And by the way, the economy is doing okay, right? I mean, inflation is around 2%. We're speaking with Ed Price. He's non-resident senior fellow at New York University, also a former British trade official. So you mentioned the meeting. What strategic upside do you see for the U.S., even symbolically, in engaging with Russia?

23:27Any headlines you're expecting or takeaways? I expect it to be a failure because Putin is structurally determined to defeat and conquer Ukraine. And if anyone can't see that or understand that, I think they're either woefully stupid, I'll say it, or they're willfully ignorant. Now, it might be that in the very long term, there is a rational U.S. reason strategically for bringing Russia closer to the West because of this forecast of a long run conflict with China. So that might make some sense. But this is another very difficult position, because if we do get to the point where we rehabilitate Russia after this brutal war, we are undermining our soft power because we're saying it's OK to do that kind of thing, right?

24:10Right. Well, is there a risk to add that we see Russia continue to move into mainland Europe if the U.S. essentially says a land swap is a way to end this war? Yes, you can have this land because you have used military aggression against it. What's to say they wouldn't do that with Poland? Well, so Poland is actually a very serious military power. and I think that if you if you attacked Poland you might get an even worse response and even worse bloody nose than than you did in Ukraine if you're Russia but if it wasn't for D-Day the Russians would be in Paris today right they have a they have a structural reason not to have a functioning European Union not to have functioning Western democratic economies anywhere near them and they're going to continue pushing hey I just want to change subjects we have one minute left with you.

25:00We're getting a question from a listener viewer right now who has a question for you about tariff theory because you're a former trade official. The president has essentially said that academics have gotten this wrong, that economists have gotten wrong. Do you agree with that? Is it too early to tell if academics have this wrong? Just about 45 seconds. President Trump's argument is that we neoclassical economists have it wrong because there is a bank account somewhere that's filling up with money. He is engaged in linear extrapolation. He thinks that will continue forever. It won't. At some point, demand will shift, supply will shift.

25:37You can't have revenue from tariffs in perpetuity. There is a bank account filling up, though, with tariffs right now. Billions of dollars have flown into it. Billions of dollars are nothing, right? I mean, compared to the trillions of dollars in debt, I mean, it's 36 point something going up and up and up. And the idea that you're going to introduce these tariffs and make money forever at the same time as saying we're trying to cut off trade is completely silly. Ed Price, thanks for coming in. Always good to see you. Ed Price is non-resident senior fellow at NYU. He's also a former British trade official.

26:08This is the Bloomberg Businessweek Daily podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Well, we're going to start with an unusual, if not unprecedented arrangement for two behemoth tech firms that stands to unnerve U.S. companies and Beijing alike. NVIDIA and AMD have agreed to pay 15 percent of their revenues from Chinese AI chip sales to the U.S. government in a deal to secure export licenses. President Trump making comments about this this morning from the press briefing room.

26:51I deal with Jensen, who's a great guy, and NVIDIA. The chip that we're talking about, the H20, it's an old chip. China already has it in a different form, different name, but they have it. Or they have a combination of two we'll make up for it and even then some. The Blackwell is super-duper advanced. I wouldn't make a deal with that, although it's possible I'd make a deal a somewhat enhanced in a negative way Blackwell. In other words, take 30 % to 50 % off of it. But that's the latest or the greatest in the world. Nobody has it. They won't have it for five years. But the H20 is obsolete. You know, it's one of those things, but it still has a market.

27:41I want to bring in Jordan Klein, Managing Director for Mizuho Securities, where he specializes in the tech sector. He joins us from New York. Jordan, I want to fact check a little bit of what we heard from the president's assessment of the H20 and of Blackwell in just a minute. But first, big picture, you're positive on this development, this revenue share from Chinese sales, from AMD and NVIDIA. Why is that? Yeah, well, thanks for having me. I mean, look, in a simple way, I just view something as better than nothing. I mean, I'd rather have 85 percent of billions of revenue than 100 percent of nothing.