Mild Inflation Print Boosts Fed-Cut Bets

25:21Yeah. 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.

25:51support for the show comes from public public is an investing platform that offers access to stocks options bonds and crypto and they've also integrated ai with tools that can assist investors in building customized portfolios one of these tools is called generated assets it allows you to turn your ideas into investable indexes so let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index.

26:31You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. Add paid for by public holdings. Brokered services by public investing member FINRA SIPC. Advisory services by public advisors. SEC registered advisor. Crypto services by zero hash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Being a small business owner isn't just a career.

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27:41See how your business can get stronger and go farther with Chase for Business. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. 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. You know what is one of the most read stories on the Bloomberg?

28:20Anything related to Jeffrey Epstein. Yeah. Yeah. It's an interesting story about Goldman Sachs in that regard. Yeah, from resignation of the top lawyer there to the resignation of one of the most powerful figures in the Middle East. We are all over the fallout from the latest batch of the Epstein files. Todd Gillespie is here. We have Jason Leopold next hour to really tell us what the steady outflow of information has been from these files and potential repercussions moving forward. All right. Also, I'm holding this up because this is Bloomberg Markets Magazine. It's a February-March issue, and it is out.

28:51It asks, should we be afraid of the big boom in private credit? The asset class is the subject of the latest issue of Bloomberg Markets Magazine. and the editor's going to join us in just a few minutes. I do feel like credit in all its twists and turns is certainly top of mind for everybody. Okay, champagne ahead of Valentine's Day. That sounds nice. Yeah. All right, could cost you more due to those tariffs. The founder and CEO of one champagne company. Yeah, chocolate covered anything. No, but they go, you know, with champagne. Oh, I don't know. Have you not seen pretty ones? Okay. I'm trying to stay on track here.

29:21Oh, right, sorry. This company is suing the Trump administration for what the founder and CEO says is$78 ,000. she is owed that she spent on tariffs last year. Well, Supreme Court might have something to say about that. Remember who's paying for these tariffs. Supreme Court, though. Yeah, that's where it's going. All right. Lots to come over the next two hours. Do not go anywhere. First up, though, a check on that trading day. Here's Amy Morrison for Charlie Pellett. All right. Thank you, Carol. Sources telling Bloomberg that SpaceX is pursuing a dual-class share structure in its planned IPO this year.

29:48A two-tier structure would give select shareholders stock with extra voting power, allowing them to dominate decision-making, but it would also allow insiders like Elon Musk to maintain control of the company, even with a minority stake. And you're right, tamer than expected inflation numbers spurred bigger bets on Fed rate cuts, moving markets into the green, but just a little bit, just a little bit, paring back some of those gains from earlier today. Right now, S &P 500 up a quarter percent. NASDAQ, little changed on the upside. The Dow up about two-tenths of a percent. Ten-year Treasury yield at four percent.

30:18The two-year yield at 3.4 percent. Let's check Bitcoin now. Oh, it's fine. Up almost 5%, around$69 ,000. Traders now pricing a 50 % chance of a third rate cut this year. CPI fell to a nearly five-year low last month. As apartment rental price growth slowed and gas prices fell, that offered some relief to Americans who are still dealing with sharp increases in costs of the past five years. Consumer prices are about 25 % higher than they were five years ago. Ethan Devitt is global market strategist at Moneta Group Investment Advisors. Certainly not just noise. We have to look at how this is cascading through different sectors.

30:53It hit our sector just this week, private wealth. There is definitely a sell first, ask questions later type of mentality. Moneta, if in, Devitt was on Bloomberg Open Interest. For on-demand news 24 hours a day, subscribe to Bloomberg News Now wherever you get your podcasts. I'm Amy Morris. That's a Bloomberg Business Flash. We go back to Bloomberg Business Week Daily with Carol Masser and Tim Stenevac. Thanks for that update. Do appreciate it. Well, one of the most read stories on the Bloomberg, Kathy Rumler leaving her position as Goldman Sachs' top lawyer, drawing to a close a month-long saga that saw the investment bank staunchly defend her over previous associations with Jeffrey Epstein.

31:32We've got Todd Gillespie with us. He's Bloomberg News banking reporter. He joins us here in the Bloomberg Interactive Brokers Studio. So her name has been associated with Jeffrey Epstein for months at this point. But the bank changed its tune after the latest batch? Well, apparently not, Tim. And in fact, that's actually one of the most interesting things about this. David Solomon was on CNBC this morning. Oh, yeah, and he had fully supported her. Right, right. And she offered her resignation. And this is actually one of the things that is quite incredible to a lot of the partners and senior executives at Goldman is how staunchly the leadership continues to defend her.

32:06And there was, in fact, no contrition, no, you know, no acknowledgement of any wrongdoing at all about roomless behavior from David Solomon this morning when he spoke on TV just before, by the way, he went to play golf alongside Ron DeSantis at Pebble Beach. So some people are suggesting that perhaps Goldman's response to this whole crisis and, you know, the two weeks or so that David Solomon has been battling this out essentially against the media and internally and perhaps even against his own psyche. Who knows, really, when it comes to David Solomon sometimes, you know, some are really asking questions about his judgment now.

32:42And really, that's where people in the next few days are going to start to turn their attention. Who is asking those questions? I mean, are employees internally? Did it become difficult for her internally because of this? Yeah, I mean, certainly employees internally felt a lot of them couldn't necessarily raise their concerns to David Solomon, bearing in mind, you know, he's someone who has consolidated power at this firm over the past few years, away from its partnership structure and much more towards a sort of traditional top-down CEO environment. You also have a management committee that he's expanded dramatically, which now has 46 people on it, way more than any other Wall Street bank, which essentially, you know, when you talk about collaboration and everything, Actually, in the end, one might argue, it ends up consolidating power in the hands of, you know, the one CEO who's essentially at the top of that.

33:28All right. Devil's advocate for a moment. Like some would say, well, what did she legally do wrong? Like, did she provide him any legal advice? She certainly did, Cal. In fact, one of the most incredible things this week that came out was revelations about emails in this drop that showed how she essentially helped him suppress the media strategy and legal fight by Virginia Dufresne, who we all know, one of the most vocal accusers of Jeffrey Epstein, who committed suicide last year. Bear in mind the story that we lost. Sorry? She wrote a book. She did indeed write a book. Yeah, that was posthumously published.

34:06Right. Right. Right. And she, you know, and throughout all of this, you can see these emails that show actually that how Rumler talks about relishing the potential opportunity. If only she could have been the lawyer to depose her at the stand. She helps advise lawyers of Epstein on how to wage that campaign to stop her interview with Good Morning America from airing, which famously never aired and is still never aired, you know, before she died. And so there are these moments here where people are starting to see these emails and then question more deeply at the firm in particular. why Goldman was continuing to stand by her and also what came up in this due diligence process that they said they conducted and that led them to such confidence in her.

34:45What do we know about her relationship with Jeffrey Epstein? Why was she so close to him? Well, one thing that's clear throughout the emails is that he consistently started leaning on her for years for informal legal advice, for media strategy. She was also receiving things in return, right? He was introducing her to people. He was advising her on, you know, getting a new job, for instance. He was giving referrals to people like Larry Summers, you know, who was close to Sheryl Sandberg at Facebook when she was looking for a potential job there. And all through this, you see this like very transactional, reciprocal relationship between these two people who, you know, as lots of people have been troubled throughout these files.

35:26This is, you know, and, you know, many people have mentioned in this case in particular, you know, the plutocratic class that sort of comes and, you know, that their intimate levels of behavior that come out within these files are quite something. And I mean, it's important to say, you know, that she, you know, she says she's never done anything wrong. She's never done anything illegal. She says she's never represented Epstein in court or advocated on his behalf to the press or to any government officials. And yet, as we all remind, that in 2008 is when he did the plea agreement and he was a registered sex offender.

35:57So at that point, anything that anybody does in terms of relationship is with that knowledge. Yeah, absolutely. And I mean, one of the things that, you know, there's an op-ed, for instance, that he was trying to get published in The Washington Post that she helped edit that basically defended, you know, the strength of the plea agreement and the federal investigation that he was under back in 2008. She entered this relationship with him in around 2015. She entered this friendship with him. She calls it a friendship, you know, and says that she wants to get help him get rid of his legal troubles.

36:27And this continues and persists even after the 2018 Miami Herald investigation, which released, you know, accusations of abuse by 60 women. She ended up at his in court standing behind his lawyers during his arraignment. Yeah. So. Some would say judgment comes into call, certainly. Todd, thank you so much for keeping us up to speed on this. Banking reporter at Bloomberg News. This is one of the most read, if not the most read story on the Bloomberg Terminal today. Also, one of the most read stories has to do with SpaceX considering a dual class share structure in its planned IPO this year. With us with What You Need to Know is Bloomberg Tech co-host Ed Ludlow.

37:01He joins us from San Francisco. Ed, the dual class share structure, nothing uncommon about that in Silicon Valley and, you know, in media companies, too, to be fair. Is this all about Elon maintaining control? It's all about Elon maintaining control. I mean, it's not surprising that this would be something SpaceX is considering. You know, what I understand from sources, and we did this story of Ryan Gould, right, is that it's being considered. Like, I don't think they're as far as having decided the structure of an IPO. But the state of play with SpaceX anyway is that, you know, it's kind of already structured that way.

37:45Musk has a lot of like the majority of influence and control, but he doesn't have a financial majority. So the cap table is quite diversified among all the names, you know, like Google and Fidelity and Founders Fund. But within that, in terms of power, in terms of votes, as a private company, Musk's already there. And I just point out finally that, you know, he tried to do that previously with Tesla and it didn't work. And so I think there had been an underlying assumption that they would at least try with SpaceX. If you were sitting down, I don't know, with Elon, what would you ask him about this?

38:24Oh, goodness. If I was sitting down with Elon, I mean, it's something I think about day and night. Well, you know, as it relates to voting control, the one reason it's not surprising is if you think about Elon Musk's stated motivations with Tesla and the compensation package, right? So when the compensation package for Tesla, and again, people are going to get confused because we're jumping from SpaceX, Tesla, are they one and the same? Who knows? He always framed this as being not about money. He didn't care how much he was paid in the end. He wanted to have enough voting power so that he could execute on what he thought his vision for the company was in the AI context.

39:11And with SpaceX, like the logic's very much the same. You have a company that's doing really well at launching rockets and payload for customers and has got a very successful so far constellation based Internet service in Starlink. but he's like ripping up the script, right? The future is space-based data centers. And so the control part is for him to be able to do it. A catapult to the moon. That's what he wants. Ed Ludlow from Bloomberg Tech. I thought it was Mars. Moon and then Mars. Okay. Yeah, that's what we do. Check out Ed's story, Ryan Gould's story and more on the Bloomberg Terminal. You are listening to and watching Bloomberg Businessweek Daily.

39:52Stay with us. More from Bloomberg Businessweek Daily coming up After this.

40:00Hello, 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.

40:48Yeah. 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.

41:18support for the show comes from public public is an investing platform that offers access to stocks options bonds and crypto and they've also integrated ai with tools that can assist investors in building customized portfolios one of these tools is called generated assets it allows you to turn your ideas into investable indexes so let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index.

41:58You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. Add paid for by public holdings. Brokered services by public investing member FINRA SIPC. Advisory services by public advisors. SEC registered advisor. Crypto services by zero hash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Small businesses are the pulse of every community.

42:33They bring people together, create opportunities and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level. That makes it possible for you to connect, learn from each other, and grow together. There's a real commitment to seeing small businesses succeed. The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your business. They'll help your business grow with individual guidance and convenient digital tools all in one place.

43:07With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com slash business. Chase for business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank NA, member FDIC. Copyright 2026, JPMorgan Chase and Company. You're listening to the Bloomberg Business week daily podcast. Catch us live weekday afternoons from two to five Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

43:46The best performer in the S &P 500 Coinbase up 16.8 % as we speak. Volume is actually triple the average. Company posted weak results yet people are buying. I want to bring in Stacey Maria Schmel, Bloomberg News Executive for Crypto Payments and Digital Finance. Is this a signal? Yeah, I'm going to do this. I'm going to put you on the spot. Do it. Is this a signal that people think this is the bottom? I think it's a signal that people hope it's the bottom. So one of the interesting things that we've been keeping an eye on is, you know, we talked the last time that I was here. Thanks for having me back.

44:23It was just a week ago. And things have changed a lot since then. It's a lot of crypto stuff. Folks really are looking for signs that even if it's not going to get better, it's not going to get worse. And one of the interesting things about the Coinbase results yesterday was that there was this feeling of like, okay, like that was they had a rough quarter. Everybody else had a rough quarter. A lot of the loss that they reported was based on like the market value of Bitcoin. And so maybe, you know, coming into Q1 and Q2, that's as low as we're going to see it for the foreseeable future. And so even though you had various analysts and, you know, different folks on the sell side adjusting their price targets, it was still very much kind of like, OK, we think now we're at a level that stuff may be oversold.

45:09And so let's like let's not get out of control here. I'm glad you went there because, I mean, you go back to the October high that we saw. I mean, Coinbase has fallen as crypto has fallen, right? And I mean, it's down about 60 % since then. So there's a lot of bad news factored in at this point. And it's not like these results were terrible, right? So that's just, okay, like you said, maybe the worst is over. The results were kind of, you know, they missed some estimates, but like not by a huge amount. And there was some like optimism about what might be coming in the next quarters. And I think one of the things, interestingly, you know, fintechs and digital asset companies aren't being punished by the market because they are a little bit outside of the AI narrative.

45:52They're a little bit outside of the why do you need billions of dollars in capital expenditure. And so, you know, they're really kind of benefiting from this idea of if you think that Bitcoin has had a rough time, but the road ahead looks more positive, it's time to buy up some of these stocks. Well, can I just say, in the press release, there was optimism from the Coinbase team about regulation and things. And are they kind of right that that's going to make it better for anybody? Or can we not make that assumption? I think there is very much a sense within the digital asset industry that there is one remaining key piece of legislation that they are really desperately looking forward to.

46:29And that is what's been called the Clarity Act, which would codify some elements of market structure and also make some final adjustments to how stable coins are regulated and legislated. The problem for the digital asset industry is the banks and the crypto companies do not agree on how to move forward with some of those provisions. And that's been a real drag on both sentiment and prices across the market. When there is agreement, if there is agreement, does that change things markedly? Absolutely. I mean, our own analysts on BI have said that, you know, companies like Coinbase and Robinhood will really benefit from like this agreement to go forward.

47:07Because one of the things that it removes is the uncertainty that if there's a change of administration, if Democrats retake the White House, then, you know, they will just undo the executive orders and everything else. So having things like actually codified into legislation really provides a much clearer path for the digital asset companies. So back to Coinbase, and then we can branch out a little bigger. If we think about Coinbase, can we think about Coinbase like we think about Intercontinental Exchange or the NASDAQ? I mean, I would say that Coinbase, much like Robinhood, has demonstrated a real commitment to diversifying in some of the ways that these other traditional exchanges have.

47:45I think they are doing some really interesting things around the fact that they are like, oh, OK, like, how are we thinking about tokenization? How are we thinking about custody of different kinds of digital assets? Like, what are our relationships with the ETF providers in that particular vein? So from, you know, the analysts who are more bullish on the stock are really looking in like that forward looking direction of digital asset companies. Don't only think of them as a proxy for Bitcoin. Think of them as like fintechs in that broader sense. Because if, you know, this is a company where transaction revenue accounts for the majority of revenue and then subscription and services is the minority of revenue.

48:22And there are different segments and lines within each of those segments. But if we think about it, if people if they're making money from transactions, people are buying and selling crypto no matter what the price of Bitcoin is. So they're still making money even if the price of Bitcoin is going down because those transactions are happening. Do more transactions happen when prices rise? Really depends. So, you know, one of the things you sometimes see is that when prices are falling, you might have like more selling or people kind of sitting out on the sidelines or exiting completely. The bigger risk from some of the analysts that we've been talking to, to crypto companies is people spending less money on transacting on crypto exchanges and more money on the prediction markets.

49:03right so again it's this idea of if you're a person who used to trade like meme stocks or you're into sports gambling and you're like oh like bitcoin and dogecoin and meme coins this seems fun and now you're like or i could like be putting some money on polymarketing putting putting some money on calci so it's you know like the competition is not so much is this person interested in like crypto for the sake of crypto it's more like they have some discretionary income right and there are more ways that you could be you know spending that than there were previously So then how do you think about this?

49:34Because I feel like you and I have these conversations, Tim, a lot, too. But I mean, are we still like what will cryptocurrencies really be in terms? Are they going to be this thing that totally changes how everybody and everything transacts or not necessarily? Deep existential questions in the front. I know. Sorry. It's a three day weekend. We do have champagne later to make up for it. But like, do you know what I'm saying? Like, I just, I still don't know. You know, do we have to have the, like, what does it mean for them, the big banks or the big financial firms? Or I don't know, just all the financial infrastructure that we have today.

50:07Does that mean they will likely be all a part of this too? So there's absolutely a version of what you are describing, which is in fact the version that banks are preparing for in a lot of ways, which is that crypto becomes a traditional financial payments rail alongside like the SWIFs and the ECHs and everything else, where it's just like so normalized that it's a way of either transacting or moving money across borders or trading certain types of assets. And you don't even think about it. And it's just like built into the system. And one of the great ironies of that is it's like absolutely the opposite of what the people who came up with crypto.

50:47Exactly. Because to me, that sounds like a lot of oversight and a lot of regulation. And so then what? But also potentially like way more volume, right? Like different kinds of use cases. And yeah, I think that that is, to me, what makes this beat so interesting. It's you can either have this perception that you are betting on Bitcoin because you think all of the world's governments are going to fail. Or you could have this perception that you think things like stable coins are interesting because governments are going to need more ways to monitor financial transactions across borders. This is why she's the best.

51:21I know. Oh, my gosh. Stacey Maria Schmell, executive editor for crypto payments and digital finance for Bloomberg News in here in our Bloomberg Interactive Brokers Studio. Check out what she and the team do on the terminal. This is the Bloomberg Businessweek 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. Tune in 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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