June 26, 2025 • 15 mins
Apollo Global Management President Jim Zelter calls talk of President Donald Trump possibly naming his next pick early for Federal Reserve Chair “a great distraction of headlines.” Zelter also weighs in on the US deficit and decline of the dollar. He is joined by Bloomberg hosts, Jonathan Ferro, Lisa Abramowicz, and Annmarie Hordern.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio.
Speaker 2 (00:06):
News joining us now for long discussion Jim's out to
the president of Apollo Global Management, Jim, good morning, Good
morning John, and happy birthday, sirs.
Speaker 3 (00:13):
Good Thank you very much. I appreciate it great.
Speaker 2 (00:15):
They spend too much time on the Federal Reserve. But
I do want your reaction to this journal piece overnight.
Speaker 4 (00:20):
Well, I think I think that the president's already won.
It's a great distraction of headlines. I personally don't think
he's going to name anybody too early because right now
he's in the catbird seat of blaming without accountability, which
is classic Trump playbook. So I think the fact that
we're talking about it is interesting. It's a great diversion
(00:41):
from the reality I think he does. And there's no
doubt he wants rates lower. That's what's part of his
plan for many, many years, and that's how he doesn't
like to pay debt and he likes to pay low
coupons on it. But the fact that you know, I
just don't think that if you're Trump right now and
you take his playbook, he'll make this a conversation. But
I don't suspect he's going to do anything premature because
(01:03):
he's able to put blame on the current resident of
the Fed, and he likes to be in that position.
Speaker 2 (01:09):
Your wor it's blaming with accountability without accountability. Is this
something you think he should be accountable for.
Speaker 4 (01:15):
Well, certainly, I think if you think about what's going
on in the last three or four months, the issues
of tariffs, it feels like that's a little bit on
the sidelines right now. I know we haven't resolved, but
the marketplace has absorbed the idea of a ten percent
plus or minus tariff, maybe a little bit higher, but
to Trump's benefit, in the administration's benefit, the market has
(01:35):
absorbed that, moved on the issues about the Middle East
and all the challenges of foreign policy. There was a
lot of action last ten days ago and a week
and a half ago, and now that has been sort
of absorbed in the marketplace. The big elephant in the
room is still our deficit issue. You guys have talked
about it quite a bit. It's obviously the topic of
(01:56):
appropriate conversation, and so I think that is an important
topic that still remains.
Speaker 3 (02:02):
But we talked.
Speaker 4 (02:05):
Earlier in this year about the decline of US exceptionalism.
I think Mark Twain was right that the PREMI that
my death is is a bit premature, and certainly the
market has moved on. So I think the tariffs are
little bit off on the side, The foreign policy issues
are a little bit off the side right now. The
deficit issue is a real issue. We could talk a
(02:25):
little bit about what's going on with the dollar. I
personally think what's going on with the dollar. I think
there was a lot of investors around the globe that
invested in US assets, and they made money both ways
on the currency and on the underlying assets for almost
ten years, and they turned around and they found themselves
really unhedged. And I think you're going to see some
pretty good numbers out of the big banks this quarter
(02:46):
because investors around the globe have been rushing to hedge
their dollar exposure. But I think it's a ten year
catchup that people just didn't hedge their portfolios in massive scale.
So I don't look at this dollar decline is I
look at it as more of a technical factor than
a long long run impact on the health of the
(03:08):
US economy.
Speaker 1 (03:08):
There's a lot to impact there, including the breakout of
the hedging profits at some of the big banks, which
we'll all be now looking for. To build on what
John is asking about is the FED on the brink.
I don't want to say have a policy error, but
of being too late kind of to build on what
President Trump is accusing him, because you are seeing the
weakening and the dollar accompanied by the biggest negativity, the
(03:29):
biggest increase in downside economic surprises that we've seen in
a year.
Speaker 4 (03:35):
If you look at the Bloomberg page on rates of
the G seven economies other than the UK, where the
outlier in terms of where our ten year yields are
and our yield curve is. I sit in my seat
and I see a variety of inputs that some tell
me the economy is slowing down a little bit with consumers.
(03:56):
Some tell me inflation is still a little bit more
represented in the economy. We see inflation around three percent,
three three and a half percent. And I don't think
it's obvious that the FED should be cutting right now.
I think it is a very legitimate question to be
asking what's the trajectory of the FED activity, And so
(04:18):
I don't think it's a slam dunk decision. I know
the market, the futures would tell you three cuts in
the next the rest of the year, three three and
f cuts. You know, Tors and I are a bit
skeptical on that. We see what's going on, and I
think there's maybe one cut. Your basic question, is the
FED conversation a really important one right now?
Speaker 3 (04:36):
It is.
Speaker 4 (04:38):
I have a view that rates are going to be
a little bit stickier and higher in the US than
people think. We've had that view for quite some time,
but so it is. It is a good question for
the administration to have right now, but I'm not sure
that's the primary question for the market.
Speaker 1 (04:52):
One of the reasons why people keep asking this question
is would the FED be considering cutting for the right
reasons for the wrong reasons? The right reasons being just inflation,
which you reject, for the wrong reasons being because we
are seeing a weakening in the labor market as we
see as increase in jobless claims. What's your sense of
that based on what you've seen with portfolio companies, what
you've seen with your investments, is that valid?
Speaker 4 (05:13):
Yes, I think long term you can't argue with the
long term deflationary impact of technology and AI that is
out there now, whether that's six twelve eighteen twenty four months.
There's a massive deflationary impact from that activity. I just
don't think it's on the center of the plate right
(05:34):
now in the markets. It's out there, and I think
that you're fighting with short term still supply interruptions, hiring interruptions,
and some short term challenges that are inflationary versus a
long term backdrop of deflationary trends because of AI around
the globe. I think that's sort of the center conversion.
(05:56):
When I'm back here in twenty twenty six and twenty
twenty seven, I think raids will probably be a bit
lower because of the technology impact. But I think in
the next six to nine months, I don't think rates
are going to be dramatically lower.
Speaker 2 (06:10):
If you'd taken six months off and came back to
work and look where the market was, I don't think
you'd have a clue. When I think it happened here.
Equity's close to all time highs, credit spreads are very tight.
It's not a market is screaming out for rake cuts.
From your standpoint at Apollo, when you look at valuation, underwriting,
any red flags getting your attention at all at the moment,
you know.
Speaker 3 (06:29):
The economy is amazingly resilient. In the US.
Speaker 4 (06:32):
And I was here three or four months ago, there
was concern handering about the trajectory of the economy.
Speaker 3 (06:37):
There was handeringing.
Speaker 4 (06:38):
About non US investors, global investors investing in the US.
I've been all around the world in the last twelve weeks.
American exceptionalism is front and center. Back you talk about
where valuations are and levels of equities and raids, they're back.
Global investors want to invest in the US. They made
(06:59):
a lot of way, they thought they were going to
diversify themselves away and they realized the breadth and depth
and the strength of the US economy and the scale
of what they need to invest, and the US is
the primary place to invest.
Speaker 3 (07:13):
It still is.
Speaker 4 (07:14):
So you know, it's sharing as I was in Europe
a few weeks ago as well, your folks, I want
to talk about that amazing thing is going on in
Germany right now. The reality is public markets are the narrative,
but private capital drives the economy, and we're seeing it.
We've been amazingly active. Edn F last week a lout
of matica. What's going on in a variety of financing
(07:35):
So It's been a very, very busy time, but I'm
not seeing any red flags going off, and I really
I want to make sure we talk today about this
concern about the private capital private credit bubble versus just
an economic cycle. We're due for a credit cycle, but
that does not mean it's a bubble and private capital
is playing a bigger and bigger role.
Speaker 3 (07:56):
Look what we did last week for ED and F
in the UK.
Speaker 4 (07:58):
And Germany billion dollars strowing private capital financing long duration
debt to finish out their nuclear power plant build.
Speaker 3 (08:07):
Really really important that we're playing that role.
Speaker 2 (08:09):
Well, sit in Europe, let's just stay there off the
back of your travel. So you mentioned AD and F,
big stealing transaction. Also big target from you and the
team to invest was it one hundred billion in Germany
over the next decadal set.
Speaker 4 (08:19):
If you're a leadership a journey right now, your goal
is to get a four trillion economy to a six
trillion economy, and you are I was with the administration.
You can talk to Tomerz. You know, they really are
embracing the role of private capital along with government spending
over the next five or ten years.
Speaker 2 (08:36):
They've been so dependent on the banking system in Europe
for such a long time, Can they get away from that?
Because I feel like I've been talking about this for
more than a decade.
Speaker 4 (08:43):
Well, I think the evidence is here to if you
look at the last twenty four months and what's going
on with the leading Italian banks. Look what's going on
with HSBC. You know what's going on with Barkley's and
Deutsche Bank. They're operating in a much different capital regime,
with a focus on shareholder value, with a focus on
ROE and they're really not taking all the policy lending
(09:05):
on their balance sheet like they had in the past, So.
Speaker 3 (09:08):
They're actually operating the right way.
Speaker 4 (09:10):
What you didn't really see before is the government really
embracing in Germany, in France, in the UK they want
private capital to be part of the solution because they
know the government balance sheets cannot do all that's needed
in terms of the massive capex of transmission, line of transportation,
of AI, of data centers.
Speaker 3 (09:32):
They know they're behind.
Speaker 4 (09:33):
So if anything, this administration in the US, the memo
they sent out about what's going on in the US
and Europe stepping forward, European leadership has taken notice. Let
there be no doubt. I go to Europe three four
times a year. I've never been so embraced as we
were three weeks ago in Germany and France about the
(09:54):
role of private capital in this buildout.
Speaker 1 (09:56):
How much is that driven by this US administration?
Speaker 3 (09:59):
A lot.
Speaker 4 (10:00):
I mean, it's clear that they know that the European
leadership has even if you look this morning about how
they're stepping up on defense spending with NATO. So I think,
you know, when I think about the globe right now, again,
taros are a little bit off on the sidelines. They're
part of the conversation. It's a question of how much,
(10:20):
not if, or when. And I do think they feel
like there's a responsibility that they have for their citizens,
because when you look at the last fifteen years and
where the US has grown versus europe growth, it's startling.
You know, when I got out a college a few
decades ago, it was all about Japan. Japan was going
to take over the world. It was all about Germany
industrial taking over the world.
Speaker 3 (10:42):
That did not come to play.
Speaker 4 (10:44):
And I know they have a lot of catching up
to do, and I just think it's a very very now.
You know, if you watch, if you listen, if you
read the draggy letter and what he put forth eighteen
months ago. Now, if they followed that all one hundred
and fifty six pages in great detail, it would be
a watershed economic opportunity. And I think parts of that
(11:04):
will to come forth. But they're already making moves on
securitization other activities. And to Jonathan's point, the European banks
are a bit behind the US in terms of the
fundamental focus on roe and shareholder return and capital efficiency.
But I think, I don't want to say they're catching up,
but they're getting in line.
Speaker 2 (11:25):
Clearly, you've talked about macro paralysis in the past. I
don't see any sign of paralysis when I look at, saye,
high yield issuance, when I look at activity, Do you
see paralysis at all?
Speaker 3 (11:35):
I don't. And back to this last topic.
Speaker 4 (11:37):
I mean, as you point out, at least pointing out
the two big topics that they need to really deal
with right now is the tariffs on July ninth and
the big beautiful bill. But we're not talking about that
this point. We're talking about a FED chairman in nine months.
And I look at everything through what this president has
been in the past is a real estate developer. It's
all about location, location, location, pick will be about loyalty, loyalty, loyalty.
(12:02):
Let's not get confused. There isn't paralysis in the market.
As I mentioned before you the public markets in the narrative,
the private capital is really the driver the economy. A
lot of activity going on in the US on refinancing,
in Europe, on the global industrial renaissance. So we are
on pace to have our busiest quarter in origination. We've
(12:25):
had in a number of years, a tremendous amount of
activity across our equity platform, our infrastructure platform, our credit platform.
So I do think there was a lot of handeringing
as I said six six or three four months ago,
and I think that's now on the sidelines, maybe not
on the narrative, but certainly on activity.
Speaker 1 (12:43):
Is that activity in lieu of some of the deals
activity that we were expecting. Was it sort of expected
to be the deals and the IPOs and the big
boom for the banks, and instead it's a Powell coming
in and doing a lot of financing deals in.
Speaker 3 (12:54):
The back Well, I think too.
Speaker 4 (12:56):
I think beginning of the year people projected that the
busiest folks on Wall Street would have been the ECM
equity capital markets teams and the M and A teams,
And while they've both been busy, the busiest folks have
been their rate hedging and derivatives teams because of what's
going on in the dollar and concern about tariffs and such.
Speaker 3 (13:15):
But it's an interesting backround.
Speaker 4 (13:17):
Even listening to your program this morning, the fundamental economy
is doing fine. It's doing well, maybe not to the
growth expectations that people had earlier this year, and will
come out somewhere around a two percent growth with about
three percent inflation. But whether it was Nvidia, whether it
was Micron, you know, a lot of cappec still going,
a lot of companies in the AI space raising tremendous
(13:39):
amounts of capital at high valuations with long list of
investors coming in, and the activity, as I said earlier,
what's going on in Europe right now about that industrial renaissance.
It's still going on. So again, I think there's the
headlines and then there's the reality of the underlying economy
and the role of private capital, which is a much
much bigger, longer term story.
Speaker 1 (14:01):
How do you think you're going to decipher the reality
versus the headlines when it comes to New York City.
Speaker 3 (14:06):
You have a huge company here.
Speaker 1 (14:07):
In New York, and a lot of people are concerned
about a Democratic.
Speaker 3 (14:09):
Socialist becoming the mayor of the city.
Speaker 4 (14:11):
You know, it's probably one of the most complicated jobs
in the world on the political stage, in terms of
bringing a variety of the five girls together, the business,
the community, the unions, all the folks that make New
York the special place it is. As I've mentioned before,
three out of every one hundred college graduates a year
come to New York. In the US, it's still the
(14:33):
magnet of talent and ambition. So when you see somebody
that on the surface does not appear to have a
long resume of leadership and making tough decisions, really concerning.
And I think that we'll see now just winning the primary, well,
in the past it might have been the litmus test
for being the mayor. I think there's still a long
(14:56):
time coming until November.
Speaker 2 (14:57):
Build down the office in Florida. Is that what you'll
hear in that's there was the most diplomatic response.
Speaker 4 (15:03):
We we we are, we we we are, we are,
we are a New York company, and we got we
we are. We are determined to be here. I'm determined
to be here. Our leadership is determined to be here.
We have people in the office five days a week.
Speaker 1 (15:16):
He's running.
Speaker 3 (15:17):
You know. It's uh January, Jim.
Speaker 2 (15:19):
It's good to see you. Happy birthday, Jimi, a polit
Bloomberg Audio Studios, podcasts, radio.
Speaker 2 (00:06):
News joining us now for long discussion Jim's out to
the president of Apollo Global Management, Jim, good morning, Good
morning John, and happy birthday, sirs.
Speaker 3 (00:13):
Good Thank you very much. I appreciate it great.
Speaker 2 (00:15):
They spend too much time on the Federal Reserve. But
I do want your reaction to this journal piece overnight.
Speaker 4 (00:20):
Well, I think I think that the president's already won.
It's a great distraction of headlines. I personally don't think
he's going to name anybody too early because right now
he's in the catbird seat of blaming without accountability, which
is classic Trump playbook. So I think the fact that
we're talking about it is interesting. It's a great diversion
(00:41):
from the reality I think he does. And there's no
doubt he wants rates lower. That's what's part of his
plan for many, many years, and that's how he doesn't
like to pay debt and he likes to pay low
coupons on it. But the fact that you know, I
just don't think that if you're Trump right now and
you take his playbook, he'll make this a conversation. But
I don't suspect he's going to do anything premature because
(01:03):
he's able to put blame on the current resident of
the Fed, and he likes to be in that position.
Speaker 2 (01:09):
Your wor it's blaming with accountability without accountability. Is this
something you think he should be accountable for.
Speaker 4 (01:15):
Well, certainly, I think if you think about what's going
on in the last three or four months, the issues
of tariffs, it feels like that's a little bit on
the sidelines right now. I know we haven't resolved, but
the marketplace has absorbed the idea of a ten percent
plus or minus tariff, maybe a little bit higher, but
to Trump's benefit, in the administration's benefit, the market has
(01:35):
absorbed that, moved on the issues about the Middle East
and all the challenges of foreign policy. There was a
lot of action last ten days ago and a week
and a half ago, and now that has been sort
of absorbed in the marketplace. The big elephant in the
room is still our deficit issue. You guys have talked
about it quite a bit. It's obviously the topic of
(01:56):
appropriate conversation, and so I think that is an important
topic that still remains.
Speaker 3 (02:02):
But we talked.
Speaker 4 (02:05):
Earlier in this year about the decline of US exceptionalism.
I think Mark Twain was right that the PREMI that
my death is is a bit premature, and certainly the
market has moved on. So I think the tariffs are
little bit off on the side, The foreign policy issues
are a little bit off the side right now. The
deficit issue is a real issue. We could talk a
(02:25):
little bit about what's going on with the dollar. I
personally think what's going on with the dollar. I think
there was a lot of investors around the globe that
invested in US assets, and they made money both ways
on the currency and on the underlying assets for almost
ten years, and they turned around and they found themselves
really unhedged. And I think you're going to see some
pretty good numbers out of the big banks this quarter
(02:46):
because investors around the globe have been rushing to hedge
their dollar exposure. But I think it's a ten year
catchup that people just didn't hedge their portfolios in massive scale.
So I don't look at this dollar decline is I
look at it as more of a technical factor than
a long long run impact on the health of the
(03:08):
US economy.
Speaker 1 (03:08):
There's a lot to impact there, including the breakout of
the hedging profits at some of the big banks, which
we'll all be now looking for. To build on what
John is asking about is the FED on the brink.
I don't want to say have a policy error, but
of being too late kind of to build on what
President Trump is accusing him, because you are seeing the
weakening and the dollar accompanied by the biggest negativity, the
(03:29):
biggest increase in downside economic surprises that we've seen in
a year.
Speaker 4 (03:35):
If you look at the Bloomberg page on rates of
the G seven economies other than the UK, where the
outlier in terms of where our ten year yields are
and our yield curve is. I sit in my seat
and I see a variety of inputs that some tell
me the economy is slowing down a little bit with consumers.
(03:56):
Some tell me inflation is still a little bit more
represented in the economy. We see inflation around three percent,
three three and a half percent. And I don't think
it's obvious that the FED should be cutting right now.
I think it is a very legitimate question to be
asking what's the trajectory of the FED activity, And so
(04:18):
I don't think it's a slam dunk decision. I know
the market, the futures would tell you three cuts in
the next the rest of the year, three three and
f cuts. You know, Tors and I are a bit
skeptical on that. We see what's going on, and I
think there's maybe one cut. Your basic question, is the
FED conversation a really important one right now?
Speaker 3 (04:36):
It is.
Speaker 4 (04:38):
I have a view that rates are going to be
a little bit stickier and higher in the US than
people think. We've had that view for quite some time,
but so it is. It is a good question for
the administration to have right now, but I'm not sure
that's the primary question for the market.
Speaker 1 (04:52):
One of the reasons why people keep asking this question
is would the FED be considering cutting for the right
reasons for the wrong reasons? The right reasons being just inflation,
which you reject, for the wrong reasons being because we
are seeing a weakening in the labor market as we
see as increase in jobless claims. What's your sense of
that based on what you've seen with portfolio companies, what
you've seen with your investments, is that valid?
Speaker 4 (05:13):
Yes, I think long term you can't argue with the
long term deflationary impact of technology and AI that is
out there now, whether that's six twelve eighteen twenty four months.
There's a massive deflationary impact from that activity. I just
don't think it's on the center of the plate right
(05:34):
now in the markets. It's out there, and I think
that you're fighting with short term still supply interruptions, hiring interruptions,
and some short term challenges that are inflationary versus a
long term backdrop of deflationary trends because of AI around
the globe. I think that's sort of the center conversion.
(05:56):
When I'm back here in twenty twenty six and twenty
twenty seven, I think raids will probably be a bit
lower because of the technology impact. But I think in
the next six to nine months, I don't think rates
are going to be dramatically lower.
Speaker 2 (06:10):
If you'd taken six months off and came back to
work and look where the market was, I don't think
you'd have a clue. When I think it happened here.
Equity's close to all time highs, credit spreads are very tight.
It's not a market is screaming out for rake cuts.
From your standpoint at Apollo, when you look at valuation, underwriting,
any red flags getting your attention at all at the moment,
you know.
Speaker 3 (06:29):
The economy is amazingly resilient. In the US.
Speaker 4 (06:32):
And I was here three or four months ago, there
was concern handering about the trajectory of the economy.
Speaker 3 (06:37):
There was handeringing.
Speaker 4 (06:38):
About non US investors, global investors investing in the US.
I've been all around the world in the last twelve weeks.
American exceptionalism is front and center. Back you talk about
where valuations are and levels of equities and raids, they're back.
Global investors want to invest in the US. They made
(06:59):
a lot of way, they thought they were going to
diversify themselves away and they realized the breadth and depth
and the strength of the US economy and the scale
of what they need to invest, and the US is
the primary place to invest.
Speaker 3 (07:13):
It still is.
Speaker 4 (07:14):
So you know, it's sharing as I was in Europe
a few weeks ago as well, your folks, I want
to talk about that amazing thing is going on in
Germany right now. The reality is public markets are the narrative,
but private capital drives the economy, and we're seeing it.
We've been amazingly active. Edn F last week a lout
of matica. What's going on in a variety of financing
(07:35):
So It's been a very, very busy time, but I'm
not seeing any red flags going off, and I really
I want to make sure we talk today about this
concern about the private capital private credit bubble versus just
an economic cycle. We're due for a credit cycle, but
that does not mean it's a bubble and private capital
is playing a bigger and bigger role.
Speaker 3 (07:56):
Look what we did last week for ED and F
in the UK.
Speaker 4 (07:58):
And Germany billion dollars strowing private capital financing long duration
debt to finish out their nuclear power plant build.
Speaker 3 (08:07):
Really really important that we're playing that role.
Speaker 2 (08:09):
Well, sit in Europe, let's just stay there off the
back of your travel. So you mentioned AD and F,
big stealing transaction. Also big target from you and the
team to invest was it one hundred billion in Germany
over the next decadal set.
Speaker 4 (08:19):
If you're a leadership a journey right now, your goal
is to get a four trillion economy to a six
trillion economy, and you are I was with the administration.
You can talk to Tomerz. You know, they really are
embracing the role of private capital along with government spending
over the next five or ten years.
Speaker 2 (08:36):
They've been so dependent on the banking system in Europe
for such a long time, Can they get away from that?
Because I feel like I've been talking about this for
more than a decade.
Speaker 4 (08:43):
Well, I think the evidence is here to if you
look at the last twenty four months and what's going
on with the leading Italian banks. Look what's going on
with HSBC. You know what's going on with Barkley's and
Deutsche Bank. They're operating in a much different capital regime,
with a focus on shareholder value, with a focus on
ROE and they're really not taking all the policy lending
(09:05):
on their balance sheet like they had in the past, So.
Speaker 3 (09:08):
They're actually operating the right way.
Speaker 4 (09:10):
What you didn't really see before is the government really
embracing in Germany, in France, in the UK they want
private capital to be part of the solution because they
know the government balance sheets cannot do all that's needed
in terms of the massive capex of transmission, line of transportation,
of AI, of data centers.
Speaker 3 (09:32):
They know they're behind.
Speaker 4 (09:33):
So if anything, this administration in the US, the memo
they sent out about what's going on in the US
and Europe stepping forward, European leadership has taken notice. Let
there be no doubt. I go to Europe three four
times a year. I've never been so embraced as we
were three weeks ago in Germany and France about the
(09:54):
role of private capital in this buildout.
Speaker 1 (09:56):
How much is that driven by this US administration?
Speaker 3 (09:59):
A lot.
Speaker 4 (10:00):
I mean, it's clear that they know that the European
leadership has even if you look this morning about how
they're stepping up on defense spending with NATO. So I think,
you know, when I think about the globe right now, again,
taros are a little bit off on the sidelines. They're
part of the conversation. It's a question of how much,
(10:20):
not if, or when. And I do think they feel
like there's a responsibility that they have for their citizens,
because when you look at the last fifteen years and
where the US has grown versus europe growth, it's startling.
You know, when I got out a college a few
decades ago, it was all about Japan. Japan was going
to take over the world. It was all about Germany
industrial taking over the world.
Speaker 3 (10:42):
That did not come to play.
Speaker 4 (10:44):
And I know they have a lot of catching up
to do, and I just think it's a very very now.
You know, if you watch, if you listen, if you
read the draggy letter and what he put forth eighteen
months ago. Now, if they followed that all one hundred
and fifty six pages in great detail, it would be
a watershed economic opportunity. And I think parts of that
(11:04):
will to come forth. But they're already making moves on
securitization other activities. And to Jonathan's point, the European banks
are a bit behind the US in terms of the
fundamental focus on roe and shareholder return and capital efficiency.
But I think, I don't want to say they're catching up,
but they're getting in line.
Speaker 2 (11:25):
Clearly, you've talked about macro paralysis in the past. I
don't see any sign of paralysis when I look at, saye,
high yield issuance, when I look at activity, Do you
see paralysis at all?
Speaker 3 (11:35):
I don't. And back to this last topic.
Speaker 4 (11:37):
I mean, as you point out, at least pointing out
the two big topics that they need to really deal
with right now is the tariffs on July ninth and
the big beautiful bill. But we're not talking about that
this point. We're talking about a FED chairman in nine months.
And I look at everything through what this president has
been in the past is a real estate developer. It's
all about location, location, location, pick will be about loyalty, loyalty, loyalty.
(12:02):
Let's not get confused. There isn't paralysis in the market.
As I mentioned before you the public markets in the narrative,
the private capital is really the driver the economy. A
lot of activity going on in the US on refinancing,
in Europe, on the global industrial renaissance. So we are
on pace to have our busiest quarter in origination. We've
(12:25):
had in a number of years, a tremendous amount of
activity across our equity platform, our infrastructure platform, our credit platform.
So I do think there was a lot of handeringing
as I said six six or three four months ago,
and I think that's now on the sidelines, maybe not
on the narrative, but certainly on activity.
Speaker 1 (12:43):
Is that activity in lieu of some of the deals
activity that we were expecting. Was it sort of expected
to be the deals and the IPOs and the big
boom for the banks, and instead it's a Powell coming
in and doing a lot of financing deals in.
Speaker 3 (12:54):
The back Well, I think too.
Speaker 4 (12:56):
I think beginning of the year people projected that the
busiest folks on Wall Street would have been the ECM
equity capital markets teams and the M and A teams,
And while they've both been busy, the busiest folks have
been their rate hedging and derivatives teams because of what's
going on in the dollar and concern about tariffs and such.
Speaker 3 (13:15):
But it's an interesting backround.
Speaker 4 (13:17):
Even listening to your program this morning, the fundamental economy
is doing fine. It's doing well, maybe not to the
growth expectations that people had earlier this year, and will
come out somewhere around a two percent growth with about
three percent inflation. But whether it was Nvidia, whether it
was Micron, you know, a lot of cappec still going,
a lot of companies in the AI space raising tremendous
(13:39):
amounts of capital at high valuations with long list of
investors coming in, and the activity, as I said earlier,
what's going on in Europe right now about that industrial renaissance.
It's still going on. So again, I think there's the
headlines and then there's the reality of the underlying economy
and the role of private capital, which is a much
much bigger, longer term story.
Speaker 1 (14:01):
How do you think you're going to decipher the reality
versus the headlines when it comes to New York City.
Speaker 3 (14:06):
You have a huge company here.
Speaker 1 (14:07):
In New York, and a lot of people are concerned
about a Democratic.
Speaker 3 (14:09):
Socialist becoming the mayor of the city.
Speaker 4 (14:11):
You know, it's probably one of the most complicated jobs
in the world on the political stage, in terms of
bringing a variety of the five girls together, the business,
the community, the unions, all the folks that make New
York the special place it is. As I've mentioned before,
three out of every one hundred college graduates a year
come to New York. In the US, it's still the
(14:33):
magnet of talent and ambition. So when you see somebody
that on the surface does not appear to have a
long resume of leadership and making tough decisions, really concerning.
And I think that we'll see now just winning the primary, well,
in the past it might have been the litmus test
for being the mayor. I think there's still a long
(14:56):
time coming until November.
Speaker 2 (14:57):
Build down the office in Florida. Is that what you'll
hear in that's there was the most diplomatic response.
Speaker 4 (15:03):
We we we are, we we we are, we are,
we are a New York company, and we got we
we are. We are determined to be here. I'm determined
to be here. Our leadership is determined to be here.
We have people in the office five days a week.
Speaker 1 (15:16):
He's running.
Speaker 3 (15:17):
You know. It's uh January, Jim.
Speaker 2 (15:19):
It's good to see you. Happy birthday, Jimi, a polit
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