October 2, 2025 • 18 mins
On today's podcast:
(1) The US Supreme Court refused to allow President Donald Trump to immediately oust Federal Reserve Governor Lisa Cook while she sues to keep her job, dealing a setback to his efforts to exert more control over the central bank.
(2) White House Budget Director Russell Vought is planning to swiftly dismiss federal workers, a sign that Republicans will lean into hardball tactics to pressure Democrats to cave to end a government shutdown.
(3) Arab and Muslim national leaders are pushing Hamas to accept the Gaza plan unveiled by US President Donald Trump this week, saying the need to end the fighting surpasses concern about the finer details.
(4) German Chancellor Friedrich Merz lashed out at Viktor Orban during a meeting of European Union leaders in Copenhagen on Wednesday, accusing the Hungarian prime minister of derailing discussions on the bloc’s security needs.
(5) French unions are holding a new round of anti-austerity protests Thursday, seeking to maintain pressure on Prime Minister Sebastien Lecornu as he struggles to pull together a budget proposal.
Podcast Conversation: Broadway Musicals Need to Take More Risks: Allison Schrager
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Day BACUT podcast. Good morning, It's Thursday,
the second of October. I'm Caroline Hepcitt in London and I'm.
Speaker 3 (00:16):
Stephen Caroline Brussels. Coming up today, the US Supreme Court
pauses Donald Trump's efforts to fire FED Governor Lisa Cook
as the government shutdown delays key data. The Central Bank
relies on.
Speaker 2 (00:28):
The world's most valuable startup, Open AI sells shares at
a record five hundred billion dollar valuation.
Speaker 3 (00:35):
Plus why the global weight for gas turbines to power
AI risks a new energy crisis.
Speaker 2 (00:42):
Let's start with a roundup of our top stories.
Speaker 3 (00:44):
The US Supreme Court is refusing to allow President Trump
to immediately fire Federal Reserve Governor Lisa Cook. The court
order means Cook can remain in her position until at
least January, when judges are due to hear arguments in
her case. Bloomberg's International Economics and Policy Corus bond At
Michael McKee says the final decision may now come after
rulings in cases of other senior officials fired by Trump.
Speaker 4 (01:07):
The court has suggested there may be some slack given
to the FED that isn't given to these other agencies.
It may be that they want to consider the cases
more or less sort of together at the same time,
to think about how one affects the other. That is
one reason that they may have punted on this for
the time being.
Speaker 3 (01:26):
McKee AD's the Supreme Court means Cook will continue to
vote on interest rate decisions after the deferral. Legal analyst
a Bloomberg Intelligence gave Cook a sixty percent chance of
winning her case.
Speaker 2 (01:37):
President Trump is planning to use the government shut down
to far federal workers. This week. White House Press Secretary
Caroline Levittz says layoffs will happen very soon, but she
declined to give details on which positions would be targeted.
That's as Chicago Fed President Austin Goolsby says, the lack
of official data during the shutdown is already proving challenging.
Speaker 1 (02:00):
The data dogs are howling because you know, we're not
getting our usual supply of information. I will say, I
consider the Bureau of Labor Statistics job data to be
the absolutely best data source on jobs and statistics in
the entire world. If we aren't going to have those,
(02:23):
it's problematic.
Speaker 2 (02:25):
Austin Goolsby speaking there. Meanwhile, the Trump administration also halted
eighteen billion dollars in federal funding for infrastructure projects in
New York City. Whitehouse Budget Director Russell Vote cited concerns
over diversity and equity policies for the cuts, but the
President warned earlier that he would use the shutdown to
(02:46):
target quote Democrat.
Speaker 5 (02:48):
Things Open Aye.
Speaker 3 (02:50):
It's completed to share sale that makes it the most
valuable startup in the world, surpassing Elon Musk's SpaceX. The
Chachipte makers employees sold roughly six point six billion dollars
worth of shares to a group of investors at a
record five hundred billion dollar valuation. The company is locked
into an increasingly bitter fight for top AI engineers, and
(03:11):
the share sale is seen as one way to offer
an incentive for those who stay araband.
Speaker 2 (03:16):
Muslim leaders are pushing Hamas to accept the twenty point
peace plan for Gaza announced by President Trump this week,
saying the need to end the fighting surpasses concerns about
its finer details. One senior regional official told Bloomberg it's
important to focus on what he called wins in the plan,
including an end to the displacement of Gazans from the territory.
(03:39):
The official sees the aim of full Israeli withdrawal from
the Strip as a significant achievement, and said these are
the reasons the plan was swiftly endorsed by the foreign
ministers of Saudi Arabia, Jordan, the UAE and other countries.
Katar's Foreign ministry said Hamas is preparing its response to
the plan after President Trump earlier set a quote three
(04:02):
to four day deadline for the group.
Speaker 3 (04:05):
Bloomberg understands the Germany's Chancellor of Frederic Martz, lashed out
at Hungary's Victor Orban during a meeting of EU leaders
in Denmark. Mertz accused the Hungarian Prime minister of derailing discussions.
The class took place during a discussion over how the
EU can better defend itself against Russian threats and support Ukraine.
It's the latest sign of frustration with Orban, who has
(04:26):
wielded his veto to hinder sanctions against Russia. Meanwhile, Danish
Prime Minister Meta Frederickson said Europe is in the middle
of a hybrid war waged by Moscow, and the continent
must arm itself.
Speaker 6 (04:38):
I think it is serious.
Speaker 2 (04:40):
I think the war in Ukraine is very serious.
Speaker 7 (04:44):
When I look at Europe today, I think we are
in the most difficult and dangerous situation since the end
of the Second World War, not the.
Speaker 6 (04:52):
Cold War and War.
Speaker 3 (04:53):
Denmark's Prime Minister Meta Fredericson, speaking there as the country's
capital hosted EU leaders yesterday, around forty eight years from
the wider European political community will join a second summit today.
Speaker 2 (05:05):
Unions in France are holding another day of anti austerity protests.
Demonstrators are aiming to maintain pressure on the Prime Minister,
Sebastian Locurnu as he pulls together a budget proposal. Bluebog's
teamer at a Bio has more.
Speaker 8 (05:20):
Walkouts are planned and sectors including education and transport today,
as French protesters seek concessions on labour from the government.
Unions called for the latest round of action after meeting
with Prime Minister look Anew last week, citing a lack
of clarity around his budget plans. The strikers are expected
to be less disruptive than the last round of protests
(05:40):
held in September, but some flight disruption is anticipated. Lak
A New is aiming to reduce the deficit to about
four point seven percent of economic output in twenty twenty six,
and has left the door open to measures that could
affect the richest, saying it's impossible to not hear the
French people's demand for tax justice. Yes in London, Tea
(06:01):
added Bayo Bloomberg Radio I.
Speaker 3 (06:04):
Meanwhile, the shape of the upcoming budget in the UK
is starting to become clearer after Labour's party conference. The
Chancellor laid the ground for raising taxes and improving welfare
for children at the annual gathering. Blog James Wilcock was there.
Speaker 7 (06:17):
There is a roughly thirty five billion pound fiscal hole
to fill in the autumn budget, and the Chancellor also
has a shortage of political capital for major spending cuts.
Judging by their public hints for ministers, higher levies on
gambling companies, are potential freeze on income tax thresholds, and
a renewed push to cub welfare spending all seemed to
(06:39):
be on the cards, But the big decisions will start
after this Friday, when the Office for Budget Responsibility delivers
its first fiscal forecast to the government in London. James Wilcock,
Bloomberg Radio and.
Speaker 2 (06:52):
Those are our top stories this morning in the markets.
Asian equities rallying, hangsaying, indegs up by one point eight percent,
lots of AI drivers, Samsung and sk Heinix doing a
deal with Open AI. We have seen record highs for
benchmarks in the US. Also, the Country World Index and
large cap eurostos fifty shares have saw record cloths yesterday
(07:16):
for the first time since March. And stop futures are
very strong now for Europe this morning, up almost six
tens of one percent on the Ustox of fifty futures.
US futures. Also in the green treasuries holding gains. They're
shrugging off the shutdown in the US. The dollar is flat,
Gold steadying, but we've seen a five day rally in
Goldman Sachs still very bullish on gold.
Speaker 3 (07:36):
Those are the markets in a moment. More on Lisa
Cook and the data challenges at the FED, plus why
there's a shortage of turbines for natural gas power plants.
But another story that I've been reading this morning, which
really I think someone just got inside my brain and
wrote something based on it. It's about the economics of musicals.
Allison Tregger from Greenberg Opinion has been writing about how
big Broadway musicals are failing at an alarming rate. None
(07:59):
of the eight teen shows that opened last year has
so far turned a profit. This is a problem the
industry is facing rising costs, Audiences have never really come
back stronger after the pandemic as well, and she says
this is effecting the creativity and the ambition of new
shows as well. But what I found really interesting in
Alison's piece is the contrast with London's West End. She
(08:19):
says that the producers she spoke to say the smaller
theaters and the bigger local audience, more Londoners going to
shows mean that people can be more patient to wait
for profit, but also can allow for more experimentation. And
I think that kind of bears out when you see
some of the shows, big international shows that are opening
in London first, giving I suppose producers a chance to
(08:40):
see if it works.
Speaker 2 (08:41):
Stephen, you and I have seen a shocking number of musicals.
I think it is fair to say, for reasons that
I shan't explain on the radio, but London does have
I think some of the same Broadway issues in the
sense that we've seen a lot of movies turned into
moving musicals in London, Missus Doubt find Elfin, Back to
the Future, Totoro actually, all of which I really did
(09:02):
quite enjoy. Luckily though, London does have a lot of
interesting fair lots of different theaters as you say, so
it's not just the big ips, it's also the kind
of unknown new place I really want to see punch.
Speaker 3 (09:15):
Oh yeah, I've had great thing, yes, because based.
Speaker 2 (09:18):
On news a real not life terrible news event.
Speaker 3 (09:21):
Well, and if you think about Operation Men's Meat, which
was a film Whien He Go Back? I mean that's
been massively successful. London has opened on Broadway and done
very well there as well, and that's an interesting idea
of something it's a very British story having huge success
also on Broadway anyway. Alison Tregger's Peace you can read
at Blomberg dot com for its lash opinion.
Speaker 2 (09:40):
Right, let's speak you more. Now on the Federal Reserve,
Lisa Kirk will be staying on as governor for now
after a Supreme Court ruling yesterday. This as the Chicago
Fed's Austin Gilsby warning that the lack of data publications
during the US government shutdown will make the Central Banks
job harder. Bloomberg opinion columnists Daniel Moss joins us now
for more. Good Morning, Daniel. Donald Trump has been prevented
(10:02):
from firing Lisa Cook whilst her case makes its way
through the corpse various court rulings and decisions. Should we
see this as a reprieve for FED independence?
Speaker 6 (10:13):
Reprieve is a fair description. They're not out of the woods,
and the Trump team will try again to undermine the FED.
It's only a couple of months ago, though in Trump
world it seems like a very long time ago that
(10:34):
the President toured the FED renovation site with j Powell.
Speaker 5 (10:39):
We all remember the.
Speaker 6 (10:41):
Videos of them wearing hard hats. So they tried that
one and that didn't work. Then they turn their sites
on Cook. So these guys are not giving up.
Speaker 4 (10:54):
It is a.
Speaker 6 (10:56):
Public institution which is not cowtowing to him and over
which he does not have direct control. This is a
source of frustration. He's going to keep coming back. But yes,
this is a reprieve. That's why I say it's not
a solution, it's a reprieve.
Speaker 3 (11:14):
Does it change the likely trajectory for their fads rates
from here though?
Speaker 6 (11:19):
I don't believe so. They've indicated their inclined to cut
a couple more times in coming months, and you know,
there's nothing in the data to suggest that that's being
blown off. Course, doesn't mean there's going to be a Cutok,
We've got to go back to the start of the year.
We may well end up in terms of the federal
(11:41):
funds rate where we thought we would be at the
start of the year. So the first dot plot published
this year, I believe, well, maybe it was in December.
The December FOMC meeting projected a medium reduction twice to
twenty five base point cuds. Well, okay, we've just had one,
(12:02):
probably get another for the end of the year, so
we'll end up with two or three, which is basically
where we were starting. So I'm not sure this changes
a lot in terms of the policy rate in the
foreseeable future.
Speaker 2 (12:17):
Which is strange when you think about it, given the
turbulence and uncertainty during the course of the year. The
other issue that rate setters are facing now though, is
a lack of data. The BLS is halting publications during
the shutdown. How big a problem is this for the Fed?
Speaker 6 (12:34):
Well, the BLS has scaled back depending on the data
series or halted publication during a government shutdown before, including
numerous times when I was working in Washington, DC and
in charge of the economic news. You know, we've been
here before. It's not a tragedy. There will be catch
(12:56):
up publication afterwards. But what is interesting thing about this
is it comes at what some people are identifying as
a turning point in the economy, wherein the labor market
is softening, but actual other measures of economic activity are
(13:16):
holding up pretty well. The economy grew an annual rate
of more than three percent the last quarterly report we had,
but the labor market's also weakening, So there's something going
on here. We're in a sort of a gray zone
where grappling to figure out what's going on. The FED
does have a labor market mandate, and the labor market
(13:38):
is softening. I don't know, there's any question about it.
You can debate the extent of it and the causes
of it, but it does appear to be happening.
Speaker 3 (13:45):
Daniel, thanks so much for joining us binber companding economists.
Daniel Math there and you can read the latest and
that Dana has been writing about the global central banks
at Bloomberg dot com forward slash opinion. Stay with us
more from Bloomberg Daybreak. Europe coming up after this next
to a major challenge facing global electricity supplies as artificial
(14:07):
intelligence increases demand orders for turbines to power natural gas plants,
a vastly outpacing supply, threatening the world's ability to keep pace.
Stephen Schaptinsky leads our team covering energy and Asia. He
joins us now for more. Stephen, First of all, what
effect is AI having on electricity demands?
Speaker 5 (14:25):
So AI has effect on electricity demand depends on which
region you're talking about. Here in Asia it is affecting it,
but overall, emerging nations are growing for a number of reasons,
including air conditioning things like that. Now when you look
at the United States or Europe, it is having a
much bigger impact for developed nations where power demand had
(14:46):
largely been flat or growing somewhat steadling. The introduction of AI,
especially in the United States, has led to a real
big growth in data centers, and those data centers need power,
and more often than not, these companies are choosing or
utilities as well, are choosing to build gas fire power plants,
(15:06):
and those power plants need turbines. The turbines are the
heart of the power plant. It spins and it creates electricity,
and there are only three companies that make these turbines.
So it's creating a supply crunch because of suddenly a
spike in power demand in the US and in other
developed places.
Speaker 2 (15:25):
Yeah, absolutely, the UK talking about this, the clash maybe
with its climate goals, but also the need to build
more infrastructure. It comes amide a broader shift also away
from coal into natural gas. How big is the shortfall
when it comes to the supply of turbines that are
needed for gas plants.
Speaker 5 (15:46):
So that's really interesting and that was what we set
off to analyze this story. We heard that there was
a crunch in turbines, but when you actually look at
the numbers, it's much worse over the next four or
five years than we had expected. Right now globally to
build turbines, essentially, all the ones that are used for
power generation, all of the manufacturers have sixty gigawatts of capacity.
(16:08):
They can build sixty gigwats worth of turbines every year.
This year orders are going to be above sixty gigawatts
and they're going to hit close to ninety to one
hundred gigawatts every year basically through twenty twenty nine and
then maybe start to taper off. So there isn't enough
capacity to build these turbines for at least the end
of the decade. And that means that there are four
(16:30):
hundred billion dollars worth of power plans that are either
planned or proposed that might need to be canceled or
delayed if they don't get these pieces of equipment.
Speaker 3 (16:40):
What does that mean in effect then for the power
supplies that we rely on globally, And I suppose is
it a problem that can be addressed?
Speaker 5 (16:49):
So it depends again where you're looking in the United
States or countries that have more money companies that are richer,
if there isn't a gas turbine, they can quickly switch
to other solutions, which are renewables with batteries. That's a
solution that they can rapidly roll out. The grid has
the ability to degree to take that in now where
(17:09):
I sit in Southeast Asia, it's much more challenging. Places
like Vietnam that plans twenty at least twenty two gas
fire power plants through twenty thirty, they don't have the
option to switch to renewables as quickly, so that means
that they might have to rely on coal if they
don't get these turbines. We did a survey of these
twenty two power plants planned for Vietnam, and only one
of them has a binding contract for a gas fire turbine,
(17:33):
which means that many of these could be delayed or
not happen. In Vietnam. It's more than just Ai. Their
economy is growing rapidly, Their factory is being built the country.
The people are getting richer, and they want air conditioning.
All of this power demand requires more generation, and if
they can't fill it with gas or renewables, they're going
to do it with coal.
Speaker 3 (17:54):
This is Bloomberg Daybreak Europe. You're morning brief on the
stories making news from London to Wall Streets, and.
Speaker 2 (18:00):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 3 (18:06):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (18:12):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 3 (18:21):
I'm Stephen Carol. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak. Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Day BACUT podcast. Good morning, It's Thursday,
the second of October. I'm Caroline Hepcitt in London and I'm.
Speaker 3 (00:16):
Stephen Caroline Brussels. Coming up today, the US Supreme Court
pauses Donald Trump's efforts to fire FED Governor Lisa Cook
as the government shutdown delays key data. The Central Bank
relies on.
Speaker 2 (00:28):
The world's most valuable startup, Open AI sells shares at
a record five hundred billion dollar valuation.
Speaker 3 (00:35):
Plus why the global weight for gas turbines to power
AI risks a new energy crisis.
Speaker 2 (00:42):
Let's start with a roundup of our top stories.
Speaker 3 (00:44):
The US Supreme Court is refusing to allow President Trump
to immediately fire Federal Reserve Governor Lisa Cook. The court
order means Cook can remain in her position until at
least January, when judges are due to hear arguments in
her case. Bloomberg's International Economics and Policy Corus bond At
Michael McKee says the final decision may now come after
rulings in cases of other senior officials fired by Trump.
Speaker 4 (01:07):
The court has suggested there may be some slack given
to the FED that isn't given to these other agencies.
It may be that they want to consider the cases
more or less sort of together at the same time,
to think about how one affects the other. That is
one reason that they may have punted on this for
the time being.
Speaker 3 (01:26):
McKee AD's the Supreme Court means Cook will continue to
vote on interest rate decisions after the deferral. Legal analyst
a Bloomberg Intelligence gave Cook a sixty percent chance of
winning her case.
Speaker 2 (01:37):
President Trump is planning to use the government shut down
to far federal workers. This week. White House Press Secretary
Caroline Levittz says layoffs will happen very soon, but she
declined to give details on which positions would be targeted.
That's as Chicago Fed President Austin Goolsby says, the lack
of official data during the shutdown is already proving challenging.
Speaker 1 (02:00):
The data dogs are howling because you know, we're not
getting our usual supply of information. I will say, I
consider the Bureau of Labor Statistics job data to be
the absolutely best data source on jobs and statistics in
the entire world. If we aren't going to have those,
(02:23):
it's problematic.
Speaker 2 (02:25):
Austin Goolsby speaking there. Meanwhile, the Trump administration also halted
eighteen billion dollars in federal funding for infrastructure projects in
New York City. Whitehouse Budget Director Russell Vote cited concerns
over diversity and equity policies for the cuts, but the
President warned earlier that he would use the shutdown to
(02:46):
target quote Democrat.
Speaker 5 (02:48):
Things Open Aye.
Speaker 3 (02:50):
It's completed to share sale that makes it the most
valuable startup in the world, surpassing Elon Musk's SpaceX. The
Chachipte makers employees sold roughly six point six billion dollars
worth of shares to a group of investors at a
record five hundred billion dollar valuation. The company is locked
into an increasingly bitter fight for top AI engineers, and
(03:11):
the share sale is seen as one way to offer
an incentive for those who stay araband.
Speaker 2 (03:16):
Muslim leaders are pushing Hamas to accept the twenty point
peace plan for Gaza announced by President Trump this week,
saying the need to end the fighting surpasses concerns about
its finer details. One senior regional official told Bloomberg it's
important to focus on what he called wins in the plan,
including an end to the displacement of Gazans from the territory.
(03:39):
The official sees the aim of full Israeli withdrawal from
the Strip as a significant achievement, and said these are
the reasons the plan was swiftly endorsed by the foreign
ministers of Saudi Arabia, Jordan, the UAE and other countries.
Katar's Foreign ministry said Hamas is preparing its response to
the plan after President Trump earlier set a quote three
(04:02):
to four day deadline for the group.
Speaker 3 (04:05):
Bloomberg understands the Germany's Chancellor of Frederic Martz, lashed out
at Hungary's Victor Orban during a meeting of EU leaders
in Denmark. Mertz accused the Hungarian Prime minister of derailing discussions.
The class took place during a discussion over how the
EU can better defend itself against Russian threats and support Ukraine.
It's the latest sign of frustration with Orban, who has
(04:26):
wielded his veto to hinder sanctions against Russia. Meanwhile, Danish
Prime Minister Meta Frederickson said Europe is in the middle
of a hybrid war waged by Moscow, and the continent
must arm itself.
Speaker 6 (04:38):
I think it is serious.
Speaker 2 (04:40):
I think the war in Ukraine is very serious.
Speaker 7 (04:44):
When I look at Europe today, I think we are
in the most difficult and dangerous situation since the end
of the Second World War, not the.
Speaker 6 (04:52):
Cold War and War.
Speaker 3 (04:53):
Denmark's Prime Minister Meta Fredericson, speaking there as the country's
capital hosted EU leaders yesterday, around forty eight years from
the wider European political community will join a second summit today.
Speaker 2 (05:05):
Unions in France are holding another day of anti austerity protests.
Demonstrators are aiming to maintain pressure on the Prime Minister,
Sebastian Locurnu as he pulls together a budget proposal. Bluebog's
teamer at a Bio has more.
Speaker 8 (05:20):
Walkouts are planned and sectors including education and transport today,
as French protesters seek concessions on labour from the government.
Unions called for the latest round of action after meeting
with Prime Minister look Anew last week, citing a lack
of clarity around his budget plans. The strikers are expected
to be less disruptive than the last round of protests
(05:40):
held in September, but some flight disruption is anticipated. Lak
A New is aiming to reduce the deficit to about
four point seven percent of economic output in twenty twenty six,
and has left the door open to measures that could
affect the richest, saying it's impossible to not hear the
French people's demand for tax justice. Yes in London, Tea
(06:01):
added Bayo Bloomberg Radio I.
Speaker 3 (06:04):
Meanwhile, the shape of the upcoming budget in the UK
is starting to become clearer after Labour's party conference. The
Chancellor laid the ground for raising taxes and improving welfare
for children at the annual gathering. Blog James Wilcock was there.
Speaker 7 (06:17):
There is a roughly thirty five billion pound fiscal hole
to fill in the autumn budget, and the Chancellor also
has a shortage of political capital for major spending cuts.
Judging by their public hints for ministers, higher levies on
gambling companies, are potential freeze on income tax thresholds, and
a renewed push to cub welfare spending all seemed to
(06:39):
be on the cards, But the big decisions will start
after this Friday, when the Office for Budget Responsibility delivers
its first fiscal forecast to the government in London. James Wilcock,
Bloomberg Radio and.
Speaker 2 (06:52):
Those are our top stories this morning in the markets.
Asian equities rallying, hangsaying, indegs up by one point eight percent,
lots of AI drivers, Samsung and sk Heinix doing a
deal with Open AI. We have seen record highs for
benchmarks in the US. Also, the Country World Index and
large cap eurostos fifty shares have saw record cloths yesterday
(07:16):
for the first time since March. And stop futures are
very strong now for Europe this morning, up almost six
tens of one percent on the Ustox of fifty futures.
US futures. Also in the green treasuries holding gains. They're
shrugging off the shutdown in the US. The dollar is flat,
Gold steadying, but we've seen a five day rally in
Goldman Sachs still very bullish on gold.
Speaker 3 (07:36):
Those are the markets in a moment. More on Lisa
Cook and the data challenges at the FED, plus why
there's a shortage of turbines for natural gas power plants.
But another story that I've been reading this morning, which
really I think someone just got inside my brain and
wrote something based on it. It's about the economics of musicals.
Allison Tregger from Greenberg Opinion has been writing about how
big Broadway musicals are failing at an alarming rate. None
(07:59):
of the eight teen shows that opened last year has
so far turned a profit. This is a problem the
industry is facing rising costs, Audiences have never really come
back stronger after the pandemic as well, and she says
this is effecting the creativity and the ambition of new
shows as well. But what I found really interesting in
Alison's piece is the contrast with London's West End. She
(08:19):
says that the producers she spoke to say the smaller
theaters and the bigger local audience, more Londoners going to
shows mean that people can be more patient to wait
for profit, but also can allow for more experimentation. And
I think that kind of bears out when you see
some of the shows, big international shows that are opening
in London first, giving I suppose producers a chance to
(08:40):
see if it works.
Speaker 2 (08:41):
Stephen, you and I have seen a shocking number of musicals.
I think it is fair to say, for reasons that
I shan't explain on the radio, but London does have
I think some of the same Broadway issues in the
sense that we've seen a lot of movies turned into
moving musicals in London, Missus Doubt find Elfin, Back to
the Future, Totoro actually, all of which I really did
(09:02):
quite enjoy. Luckily though, London does have a lot of
interesting fair lots of different theaters as you say, so
it's not just the big ips, it's also the kind
of unknown new place I really want to see punch.
Speaker 3 (09:15):
Oh yeah, I've had great thing, yes, because based.
Speaker 2 (09:18):
On news a real not life terrible news event.
Speaker 3 (09:21):
Well, and if you think about Operation Men's Meat, which
was a film Whien He Go Back? I mean that's
been massively successful. London has opened on Broadway and done
very well there as well, and that's an interesting idea
of something it's a very British story having huge success
also on Broadway anyway. Alison Tregger's Peace you can read
at Blomberg dot com for its lash opinion.
Speaker 2 (09:40):
Right, let's speak you more. Now on the Federal Reserve,
Lisa Kirk will be staying on as governor for now
after a Supreme Court ruling yesterday. This as the Chicago
Fed's Austin Gilsby warning that the lack of data publications
during the US government shutdown will make the Central Banks
job harder. Bloomberg opinion columnists Daniel Moss joins us now
for more. Good Morning, Daniel. Donald Trump has been prevented
(10:02):
from firing Lisa Cook whilst her case makes its way
through the corpse various court rulings and decisions. Should we
see this as a reprieve for FED independence?
Speaker 6 (10:13):
Reprieve is a fair description. They're not out of the woods,
and the Trump team will try again to undermine the FED.
It's only a couple of months ago, though in Trump
world it seems like a very long time ago that
(10:34):
the President toured the FED renovation site with j Powell.
Speaker 5 (10:39):
We all remember the.
Speaker 6 (10:41):
Videos of them wearing hard hats. So they tried that
one and that didn't work. Then they turn their sites
on Cook. So these guys are not giving up.
Speaker 4 (10:54):
It is a.
Speaker 6 (10:56):
Public institution which is not cowtowing to him and over
which he does not have direct control. This is a
source of frustration. He's going to keep coming back. But yes,
this is a reprieve. That's why I say it's not
a solution, it's a reprieve.
Speaker 3 (11:14):
Does it change the likely trajectory for their fads rates
from here though?
Speaker 6 (11:19):
I don't believe so. They've indicated their inclined to cut
a couple more times in coming months, and you know,
there's nothing in the data to suggest that that's being
blown off. Course, doesn't mean there's going to be a Cutok,
We've got to go back to the start of the year.
We may well end up in terms of the federal
(11:41):
funds rate where we thought we would be at the
start of the year. So the first dot plot published
this year, I believe, well, maybe it was in December.
The December FOMC meeting projected a medium reduction twice to
twenty five base point cuds. Well, okay, we've just had one,
(12:02):
probably get another for the end of the year, so
we'll end up with two or three, which is basically
where we were starting. So I'm not sure this changes
a lot in terms of the policy rate in the
foreseeable future.
Speaker 2 (12:17):
Which is strange when you think about it, given the
turbulence and uncertainty during the course of the year. The
other issue that rate setters are facing now though, is
a lack of data. The BLS is halting publications during
the shutdown. How big a problem is this for the Fed?
Speaker 6 (12:34):
Well, the BLS has scaled back depending on the data
series or halted publication during a government shutdown before, including
numerous times when I was working in Washington, DC and
in charge of the economic news. You know, we've been
here before. It's not a tragedy. There will be catch
(12:56):
up publication afterwards. But what is interesting thing about this
is it comes at what some people are identifying as
a turning point in the economy, wherein the labor market
is softening, but actual other measures of economic activity are
(13:16):
holding up pretty well. The economy grew an annual rate
of more than three percent the last quarterly report we had,
but the labor market's also weakening, So there's something going
on here. We're in a sort of a gray zone
where grappling to figure out what's going on. The FED
does have a labor market mandate, and the labor market
(13:38):
is softening. I don't know, there's any question about it.
You can debate the extent of it and the causes
of it, but it does appear to be happening.
Speaker 3 (13:45):
Daniel, thanks so much for joining us binber companding economists.
Daniel Math there and you can read the latest and
that Dana has been writing about the global central banks
at Bloomberg dot com forward slash opinion. Stay with us
more from Bloomberg Daybreak. Europe coming up after this next
to a major challenge facing global electricity supplies as artificial
(14:07):
intelligence increases demand orders for turbines to power natural gas plants,
a vastly outpacing supply, threatening the world's ability to keep pace.
Stephen Schaptinsky leads our team covering energy and Asia. He
joins us now for more. Stephen, First of all, what
effect is AI having on electricity demands?
Speaker 5 (14:25):
So AI has effect on electricity demand depends on which
region you're talking about. Here in Asia it is affecting it,
but overall, emerging nations are growing for a number of reasons,
including air conditioning things like that. Now when you look
at the United States or Europe, it is having a
much bigger impact for developed nations where power demand had
(14:46):
largely been flat or growing somewhat steadling. The introduction of AI,
especially in the United States, has led to a real
big growth in data centers, and those data centers need power,
and more often than not, these companies are choosing or
utilities as well, are choosing to build gas fire power plants,
(15:06):
and those power plants need turbines. The turbines are the
heart of the power plant. It spins and it creates electricity,
and there are only three companies that make these turbines.
So it's creating a supply crunch because of suddenly a
spike in power demand in the US and in other
developed places.
Speaker 2 (15:25):
Yeah, absolutely, the UK talking about this, the clash maybe
with its climate goals, but also the need to build
more infrastructure. It comes amide a broader shift also away
from coal into natural gas. How big is the shortfall
when it comes to the supply of turbines that are
needed for gas plants.
Speaker 5 (15:46):
So that's really interesting and that was what we set
off to analyze this story. We heard that there was
a crunch in turbines, but when you actually look at
the numbers, it's much worse over the next four or
five years than we had expected. Right now globally to
build turbines, essentially, all the ones that are used for
power generation, all of the manufacturers have sixty gigawatts of capacity.
(16:08):
They can build sixty gigwats worth of turbines every year.
This year orders are going to be above sixty gigawatts
and they're going to hit close to ninety to one
hundred gigawatts every year basically through twenty twenty nine and
then maybe start to taper off. So there isn't enough
capacity to build these turbines for at least the end
of the decade. And that means that there are four
(16:30):
hundred billion dollars worth of power plans that are either
planned or proposed that might need to be canceled or
delayed if they don't get these pieces of equipment.
Speaker 3 (16:40):
What does that mean in effect then for the power
supplies that we rely on globally, And I suppose is
it a problem that can be addressed?
Speaker 5 (16:49):
So it depends again where you're looking in the United
States or countries that have more money companies that are richer,
if there isn't a gas turbine, they can quickly switch
to other solutions, which are renewables with batteries. That's a
solution that they can rapidly roll out. The grid has
the ability to degree to take that in now where
(17:09):
I sit in Southeast Asia, it's much more challenging. Places
like Vietnam that plans twenty at least twenty two gas
fire power plants through twenty thirty, they don't have the
option to switch to renewables as quickly, so that means
that they might have to rely on coal if they
don't get these turbines. We did a survey of these
twenty two power plants planned for Vietnam, and only one
of them has a binding contract for a gas fire turbine,
(17:33):
which means that many of these could be delayed or
not happen. In Vietnam. It's more than just Ai. Their
economy is growing rapidly, Their factory is being built the country.
The people are getting richer, and they want air conditioning.
All of this power demand requires more generation, and if
they can't fill it with gas or renewables, they're going
to do it with coal.
Speaker 3 (17:54):
This is Bloomberg Daybreak Europe. You're morning brief on the
stories making news from London to Wall Streets, and.
Speaker 2 (18:00):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 3 (18:06):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (18:12):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 3 (18:21):
I'm Stephen Carol. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak. Europe
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