US Core CPI Eases to Four-Year Low in Shutdown-Hit Report

24:08Does it make you say, hmm, maybe I do something more? No, it's not so much that it makes us say it because it has to make financial sense. It has to be something that for us, we can say this is a good opportunity for us to take advantage of. Yeah. The better regulatory environment, though, provides more opportunities because then there'll be other institutions that think they're better off if they partner with somebody. And, you know, in the last three, four or five years, that hasn't been the case. Right. Many institutions are saying, hey, we don't want to take a risk here of trying to sell ourselves or partner with someone.

24:40And maybe that doesn't happen or it takes too long to happen and they hurt the franchise. So that's probably a no for 2026. It's hard to say. Well, just geographically, just in 20 seconds, geographically, the most appealing area where you want to be, where you're not right now. Look, we're a New York metro based institution. So that's a big market. So you want to grow here. Yeah, we want to. And as I always joke here, you know, Florida is part of that market. So I like the growth prospects here in the New York metro market. I like what's going on in Florida. We'd be remiss in terms of Fed policy and what we get in terms of a new Fed chair.

25:17And also, we did get that additional rate cut last week, Frank. We said we were going to have a rate cut last time we were here. Just real quickly, 30 seconds, how's the bank managing the rate backdrop in the steeper yield curve that we're seeing? Just quickly. Listen, I think it's great for banks. And I think you see it in the market reaction to banks over the last 30, 45 days, right? Bank valuations are up pretty strongly. Banks are now favored in portfolios today. I think part of it is the steepness of the yield curve. And I think part of it is the optimism around the economy going into 26.

25:49So still optimistic. Yeah, very. Kind of love that, right? We could use some optimism. Frank Sorrentino, thank you. Have a great holiday. Oh, you too. Happy New Year. Yeah, really appreciate it. Fabulous. Thank you. Founder, Chairman, and Chief Executive Officer of ConnectOne Bank right here in our studio. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

26:11You're listening to the Bloomberg Businessweek 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. I'm looking at shares of DJTUS. It's Trump Media and Technology Group. It's the parent company of True Social. They do some crypto, financial services. They're getting into nuclear fusion. It's surging today at more than 41%. The company said today will merge with TAE Technologies. It's a closely held fusion developer founded in 1998. This is a transaction valued at more than$6 billion.

26:48It's kind of wild. This was not on my business, my bingo card this year. This was not on mine either. Shareholders of each company are going to own about 50 % of the combined business after the all-stock deal is completed. That, according to Trump Media, they put that out in a statement. We have a ton of questions about this, and we knew right off the bat that we want to talk to Will Waite. He's Bloomberg News energy reporter. He joins us here in the Bloomberg Interactive Brokers Studio. I got full disclosure. I had never heard of this company before 630 a.m. this morning. Had you ever heard of it?

27:20No. There were. Yeah, I've heard of them. Okay. So people in the energy world know this company. Yeah. Yeah. TA is one of the companies in Fusion that we've been watching that's making solid progress. Solid progress. That's an important way to put it because this is unproven at this point. Yeah, because Fusion is hard. Fusion's really hard. I mean, I write about nuclear fission, which moves really slow. Fusion's slower than that. It's literally creating a little tiny star that you can find with super powerful magnets and somehow get energy out of that. So if that sounds hard, yeah, it is hard.

27:58But TA is a company that's been at this for a long time. We've been watching them. But when I say solid progress, what that really means is nobody has done this yet. It's been demonstrated in a lab situation. Yeah, back in 2022. And a couple times since then. It's Lawrence Livermore in California. But no one's got a commercial system working. No one's got demo systems working. We're waiting for it. Is it the kind of thing, Will, that all of a sudden, like, you know, Eureka, all of a sudden they figure it out and it could happen tomorrow? No. It's more likely it's not going to happen for? Fill in the blank.

28:39How many years?

28:44Maybe less than 10 for a couple things. So it's a long ways out. So, I mean, the company I've really been watching is called Commonwealth. They're already planning their first commercial system. They're working on it in Virginia, but they're doing all their research outside Boston because they came out of MIT. They don't have their demo system working yet. They've been talking about reaching this critical milestone in 2027, 2028-ish. So like I said, no one can do this yet, but there's several companies that we think are getting close. So I put TAE on the list, and they told us that they're going to start construction next year on a commercial system.

29:27I'm like, you're going to start building what next year? I'd love to see it happen. It'd be great. But I have questions. Apart from the association with the president and the close ties to the president that this gives the company, what else would be in this? I don't want this combination of these two companies. Like, why would TAE do this? Money. They want money. In fact, they had a call this morning and their CEO said that capital is becoming one of their big challenges. And I'm like, I thought the physics and the engineering was your big challenges. But, you know, they said they get up to 300 million cash out of this right away or when the deal closes.

30:13But, you know, close to now-ish to start working on their commercial system. So that's great. and they get access to the Trump media backing. So that's good for them. So there's a lot of money happening here. I mean, if it was so promising, why aren't other investors rushing to give them money or others? Is it just because of how long this is taking? It could be. I don't know the answer to that question, but it's the right question to ask. And they've already raised, I think, a billion three to date, which is a lot of money, but Fusion takes time and takes a lot of money. There's a lot of companies working on it, and they've all raised billions of dollars as well.

31:00So let's say one of these companies, maybe TAE, maybe another company, maybe Commonwealth is able to pull this off. What is the ultimate promise, and what does that look like in terms of facilities, in terms of what it does to the grid, in terms of what it does to our power bills? Okay, the ultimate promise is really something special. This fusion energy, it does not have the dangerous radioactive waste that you get from fission energy. So that's great. And some of the raw materials that they use for fuel, a lot of it just comes from hydrogen. So it's not as hard to get. So fusion companies will say, we have the promise of abundant, clean energy.

31:43I'm like, it sounds like a fantasy, but it's actually kind of what they're working towards. So it would be great. It's called nuclear fusion. Yeah. Where does the nuclear part come in? The process. The process? All right. So fission, which is what we have now, is when you have a big atom and you break it up and you get energy from splitting it. Fusion is the exact opposite. You take small atoms and you smoosh them together and you get energy when they fuse into something else. And there's no byproduct? I wouldn't say there's no byproduct. Some of the processes have some radioactive waste, but it's not the dangerous toxic waste like from fuel rods, the old spent uranium fuel rods.

32:28It's low-level waste. It's not as bad. It's not nothing. It's easier to deal with. Is it interesting, and forgive me, I was just looking for the specifics, but I believe the administration dropped some nuclear regulations or regulatory framework this week. I mean, is it interesting kind of the timing on all of this? And I don't want to point fingers at anything, but it seems kind of co-winky-dick. It could be a coincidence. It could be not a coincidence. I'm not in a position to say, but I will say. Some might say it would be. Yeah. But it's definitely true that the Trump administration is really supportive of nuclear energy.

33:07They've done a lot of executive orders and policy changes to make nuclear happen. Is that a good thing, in your view, for someone who's been following this space? Has there been too much regulatory oversight, to be fair? To be fair, I hear consistently that one of the challenges for getting a nuclear power plant built is the paperwork. It's getting all the approvals. Now, to be even more fair, I want a government that takes radiation seriously. But it has been something that slows the process. And especially in this country, nuclear is very, very expensive. And one of the reasons is because it takes so long to get things going.

33:53So having some of the processes streamlined, I'm in favor of that. very briefly will 10 seconds how many nuclear plants will be brought online next year next year yeah one that i know of okay more that's one more than this year yeah the palisades plant michigan should come back online january february five seconds how many are china putting online next year way more than that okay uh we will continue this conversation into the new year we'll wait thank you so much happy holidays merry christmas all that good stuff bloomberg news energy reporter. Stay with us. More from Bloomberg Business Week Daily coming up after this.

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36:43We'll see you next time. LLC. 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. Shares of Darden Restaurants, the owner of Olive Garden and Longhorn Steakhouse climbed after the company raised its comp sales forecast and cited better than expected growth fueled by affordable meal options and strong spending from higher income diners. Darn to expect some economic pressure in the first half of next year, but Carol, this could be offset by consumer spending from potential fiscal stimulus in early 2026.

37:20And beef prices are also expected to fall next year. Hallelujah. As production increases. I mean, beef has been getting hit hard. A lot of chicken in our home. Yeah. Michelle Corsmo is president and CEO of the National Restaurant Association. We're curious what she has to say. It is the trade group for the restaurant industry, and she joins us from Washington, D.C. Michelle, Tim just laid out really good news, or some good news, we should say, from Darden today. We've seen mixed results, though, from the restaurants. It's a great read on the business community, a great read on the consumer. Sweet Greens co-founder also stepping down from the struggling salad chain after the share price has dropped about 80 % so far this year.

37:59Cava's down 60 % from this year's highs. Chipotle is down 45 % from this year's high. It doesn't sound so great. these are your members. This is your community. What are you hearing from them? Well, exactly what you've said in terms of such a great industry and such a great bellwether for how the economy is doing. And it really is a mixed bag. So we've seen$1.5 trillion in restaurant industry sales in 2025, which is up from last year, but not as strong as it needs to be and not as strong as we want it to be in these really tight margin businesses. And what we found is it kind of depends on what you're on.

38:37how your is and really how you're leaning into that price certainty for customers. Value matters. Price certainty really matters. And so you see that making a difference as they're also navigating all of the tariff and supply chain and beef price problems that you've just talked about. Yeah, we're going to get to some of the challenges in just a minute. So that's how your members are doing. Your members depend on consumers. From your perch, how's the consumer doing? And it's not monolithic by any means, but how would you describe the U.S. consumer right now? So the U.S. consumer right now, I would say, is very deliberate.

39:13They want to be certain about what they are spending and how they're doing it. And that's really a place where restaurants have been able to lean into some of that certainty in the offerings they have and the pricing. But it's definitely been a situation where we're not seeing as much traffic as we normally would. We always want to see those guest count numbers going up in restaurants, and it hasn't been going up at the level that people want. OK, so I just want to go through some of the challenges. You mentioned some of the challenges. You said the tariff related challenges, the beef price challenges.

39:52What is the biggest challenge that restaurants are facing? certainty i think with every industry and with every business what everyone is looking for is certainty and we certainly know that the president has an aggressive agenda to try to make a strong economy for u.s consumers but the lack of certainty actually creates something that feels quite the opposite when restaurants are dealing with how to navigate different pricing, supply chain problems, tariff price increases, changing from day to day. That definitely gets to be a bit of a challenge for restaurants trying to serve consumers that are looking for that certainty.

40:32You know, one thing that we're seem certain about is immigration. And this note from Torsten Slock at Apollo this morning really caught my attention. He said, he writes, from 2022 to 2024, net immigration was around 3 million people per year. The CBO forecasting that annual immigration in 2025 and 2026 will be around 500 ,000 people. Torsten writing, quote, this has important consequences for labor supply, wage growth, and housing demand. From a labor supply issue that affects your members, but also from a customer's perspective that affects your members. Which one is harder for the restaurants in the U.S.

41:11right now? Is it the the lack of workers from immigration? Or is it lack of customers from immigration? That feels like a Hobson's choice. So without a doubt, the restaurant industry really cares about ensuring that we've got enough workforce to help provide that great hospitality that makes people love restaurants. And there's 988 ,000 open positions in restaurant and hospitality this month. So we need workers. And this is why it's been a significant issue for us to push for immigration reform. We need more legal pathways for guest worker programs, more opportunities for people to come in and do this work, even as a guest worker in a legal documented fashion.

41:53And so getting to that solution is something we're really pushing for for Congress, because we need to get people in jobs in restaurants. The consumers need it. Well, big problem. That's a lot of workers that aren't that the industry needs. Is the White House listening? Are members of Congress listening? We never feel like they're listening enough on immigration. So there always seems to be... But are they listening less than maybe they were in years past, recent years past? This has been a difficult issue. In fact, some would call this the third rail in terms of issues that Congress deals with for decades, frankly.

42:32And we get close often, but we need to get it across the finish line. And so that's really what we're pushing is it's time for them to realize that it has to provide some legal pathways because we're seeing, I mean, those numbers that you're talking about with immigration coming down, I think we're going to see in 2025 in reports I've read that this will be the first year that the U.S. population will not have increased. And that's a significant impact on our workforce. And so we care a lot about making sure that we've got enough workers in the restaurant industry. You know, there's certainly a lot of places for technology to take jobs, but hospitality is still built on people and personal interactions.

43:11So we want those people to work in restaurants. And we want, obviously, a robust economy with lots of consumers that are coming in to enjoy those restaurants. Well, you know, and I just want to go back to the speech that President Trump gave last night, the primetime speech. And he talked a lot about immigrants and immigration. but he said a lot of the immigrants and forgive me and I should have the the exact quote in front of me but basically that a lot of the immigrants that are coming in are criminals and and so on what's the restaurant industry's experience with immigrants who come into the United States and I realize there's legal there's illegal so I'm just but there's a lot of folks that maybe aren't legal that are in the restaurant industry that you might hear that kind of on the side so I'm just curious about that commentary from the president and the reality of what it really is all about?

44:00We don't think that that commentary tells the full story. And I think we want to start with a complete agreement that people that are breaking laws, especially those laws that are hurting Americans, really aren't, you know, as illegal immigrants, certainly not a place for them here. And so creating a safe environment for Americans is really important. But there's a lot of people who are showing up every day, working hard, being reliable, taking care of their families, doing the right thing, mowing their lawn, all of those things that make your neighbor somebody that is friendly and reliable that you want to see.

44:39And so this is why it's important to us that we push for more legal pathways to guest worker programs, because those people need to be in our communities contributing. And obviously, we need to deal with the people that are breaking the laws. But for those people that want to work hard and show up and contribute to our economy, let's find a place for them to do that. Beef prices still up 13 percent so far this year, though. They're down from the highs that we saw in August and September of this year. We've spoken to you in the past and we've talked about inflationary concerns, but it hits restaurants different because the margins are so tight.

45:17What are the biggest costs right now for your members? So beef costs for sure. We're seeing a lot of fluctuation on seafood. One of the things that we're seeing in the data that we're trying to figure out is a lot of data is showing seafood as a protein price going down. But what our members are telling us from our survey work is that they're seeing increased seafood prices. And so there's a lot more we've got to figure out there. And I think this is a place where tariffs or the threat of tariffs is really hurting that supply chain, especially as whatever happened to be in the warehouse under a pre-tariff price really starts to deplete.

45:56And so I think anytime you're looking at proteins, that's going to be a place where people are concerned. And then anytime you're looking at any kind of vegetable or produce, we want to make sure that those tariffs stay off as well, because we can't produce in the United States the amount of produce that we consume on a regular basis. And we certainly can't produce it year round. Michelle. Not in D.C. in the winter. That is true. And even in California doesn't satisfy the entire country or provide for the entire country. Hey, before we let you go, we got to talk about cold hard cash, specifically the penny.

46:34I was surprised on our editorial call when our producer Ari said that this is a big issue for you guys, costing your restaurants$13 to$14 million monthly in forced rounding losses. Explain what's going on with the penny. Well, it is certainly interesting, and nobody really had on our bingo card for 2025 that we would be talking about penny shortages. But for some reason that we can't quite figure out, the Fed has stopped circulating pennies. So the Federal Reserve does a really important thing by keeping money and coins circulating around the country so that we've got the right level of those coins and bills in the right areas and regions.

47:12And right now, they're not doing that with pennies. And so we're seeing pentage shortages. And so often consumers are coming in and paying cash. In fact, I think people would be surprised to know that one in four transactions in restaurants is a cash transaction. So people are coming in paying cash and often they can't get exact change. So that's creating a difficult situation for consumers, but also that difficult situation that you cited in the 13 to 14 million dollars a year in lost revenue for restaurants. Wow, that's a real number. It's interesting. My understanding is they stopped mining them because I think it cost more.

47:46But this is different. This is the Federal Reserve in circulation versus the U.S. not producing them new ones anymore. So you mean pulling them out of circulation? Yeah, there are 300 million pennies that are in circulation right now in the U.S. And so there should be enough pennies rolling around that we can keep using pennies even though they are not minting them anymore. Have they checked the couch cushions? or my husband's pockets or the, the washing machine. That's usually where they end up. Pick up those pennies. It matters. And those single socks. Michelle, thanks so much. Michelle Korsmo, president and CEO of the national restaurant association trade group for the restaurant industries.

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