May 27, 2025 • 20 mins
Watch Alix and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Alix Steel
Today’s Podcast Features are:
Stephanie Guichard, Senior Economist at the Conference Board, discusses consumer confidence data. US consumer confidence rebounded sharply in May, with the Conference Board's gauge increasing by 12.3 points to 98, marking the biggest monthly gain in four years.
Ros Mathieson, Bloomberg News Director for Europe, the Middle East and Africa, discusses the European Union and the US signaling a willingness to work towards a trade deal over the next six weeks. This follows a phone call between President Donald Trump and European Commission President Ursula von der Leyen.
Janet Lorin, Bloomberg Higher Education Finance Reporter, discusses the latest news at Harvard University. The Trump administration is moving to cancel all remaining federal contracts with Harvard University, worth an estimated $100 million, as part of its battle against the university.
Patrick Wilson, Portfolio Manager at CenterSquare Investment Management, joins to discuss
how the outlook for potentially higher inflation due to tariffs can shape investing in listed REITs today.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Applecarplay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:23):
This is Bloomberg Intelligence Radio. All right, let's get to
that consumer confidence on number jumping the most in four
years on outlook for better economy as well as trade truth.
Joining us now to break down those numbers even more
is Stephanie Gusha, a senior economist at the conference Sport.
Is it truly alle relief on trade? At this point?
Speaker 3 (00:46):
It's largely We split our sample around May twelve to
see whether there was a stronger improvement in the second
half of the month, and there was, sorry, truly after
the trade did with CHI now that we saw strongest
improvement in our indicators, especially the expectation component.
Speaker 4 (01:06):
So in your index here, what's the makeup of kind
of consumer confidence? Is it how much is kind of jobs?
Do I have a job? Or is it more about inflation?
What am I going to have to pay for stuff?
Just general economic concerned? How is that waited?
Speaker 3 (01:24):
So it's a lot about jobs, both in the current
situation and in the expectations components. And one thing to
notice that the current job situation is the only component
of the index that didn't improve this month, So there
are still some concern about, you know, where the label
market is going right now, and we don't explicitly have
(01:50):
an inflation component in the index. However, we ask consumers
about how they feel about their future income, which could
be capturing, you know, whether they are going to get
enough money to pay for what they need, and that
that's one of the components of the expectation component. But
it's not really about inflation overall. It's more about the
(02:13):
label market.
Speaker 2 (02:14):
Okay, Stephanie, thank you very much. Really interesting, and also
we have not recouped though the big decline that we've seen.
It's not a full v yet that recovery for consumer
confidence a right, Stephanie Kusha joining us there from the
conference board.
Speaker 1 (02:28):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (02:42):
Alex still here alongside pauls we need. This is Bloomberg
Intelligence Radio. We're broadcasting to live from our interactive broker
studio right here in mid tom Manhattan. Also check us
out on YouTube, Bloomberg dot com, as well as originals
on realku and your smart tv anywhere where you get
your news. So, the news over the weekend as well
as this morning, is President Trump rolling back it's tariff
deadline and tariff amount on the European Union, saying that
(03:05):
it's speeding up, it's treading negotiations and he thinks this
is a positive event. Now that deadline's extended to July ninth,
after a call this weekend with the European Commission President
Ursula Vonderlyon. Let's get more on this with Roz Matheson,
Bloomberg News director for Europe, the Middle East and Africa.
Ros What do we know that the EU Ursula Vonderlyon
offered President Trump to make him feel so good about it?
Speaker 5 (03:26):
Well, part of it might have just been that that
phone call seemed to have gone smoothly, but also what
we saw from the markets when he threatened the fifty
percent tariff, maybe al so perhaps entered into Donald Trump's thinking.
But as you say, we do know after that call
that he walked back that threat. So we've got a
bit more breathing space on the EU side to get
talks going. And now the question is how can talks
(03:47):
occur in a in a proper way, and what is
the EU going to do potentially to crack open the
door with US without giving away its own red lines,
because the E does have a whole lot of stuff
that is just willing, not willing to give ground on.
We do know they seem to be wanting to now
split up the talks a little bit, So separate all
these big things out into smaller pieces and see if
(04:08):
they can make any traction on individual things. So more
on the political side, there's hot button issues around auto's pharmer,
civil aircraft chips and so on, and then more technical
level conversation around things like non tariff barriers. So split
everything up into smaller compartments again and see if they
can edge anything forward. But in doing so you do
(04:30):
also risk fragmentation. And the question is in conversations going forward,
do you end up with partial bits of a framework
deal and nothing really complete? And what then happens if
we get very very close to this July deadline and
things are still deadlocked.
Speaker 4 (04:45):
So ross how united is the European Union in these negotiations?
Here in these discussions do you think?
Speaker 5 (04:54):
Well, that's always the classic question, isn't it with the
EU unity in the minute? Because it is a bunch
of very different economies and very different politicians leading each country.
In this case, there does seem to be a decent
amount of unity. You're not seeing some of the bigger
economies speak out necessarily against each other. I mean, that's
been the weakness and the strength of the EU for
(05:16):
many many decades, is trying to peel individual leaders away
from each other. We've seen that for example on how
to handle the war in Ukraine. But on this they
do seem to be unified. So even some of the
economies that have tended to side with Donald Trump are
falling in line. The question again is like, is there
any wiggle room between the EU and the US to
(05:39):
get to some kind of framework agreement or are we
going to see this all happen in July and then
EU retaliation, which could be quite significant, kicks in automatically
at that point, and so it's really downe to the
negotiators at this point to see if they can find
common ground and the role potential of Ursula Vonderline in
that her chief trade negotiator been talking a lot with
(06:01):
US officials like Howard Lutnick for example, and jameson Gria
of late. Is that personal relationship going to get any
kind of traction and are they able to represent and
hear you collectively then as a whole.
Speaker 2 (06:12):
But that's sort of what confuses me because is it
concrete stuff or is it just having a good phone
call with President Trump? And like, what can Europe actually
offer thus concrete that's not going to make all the
other twenty six members mad?
Speaker 4 (06:26):
Well, that's the thing.
Speaker 5 (06:27):
It does seem to be quite personal, right. I was
thinking about recently, even to Donald Trump's first term in
office and some of the trade tensions with China for
example that came up at the G twenty's and so on,
and how it always took like a meal with sieging
Pings sitting down at a table together, that leader level
conversation to break the eyes to get a thaw, even
if it's temporary in trade tensions. We saw that with
(06:51):
China over and over again. And then of course it
all fell apart some months later and we were back
to a trade war. So it does seem to be
quite personality dependent, and it's about again the EU does
have its red lines. It's not going to roll over
in order to get a deal. Equally, it's about letting
Donald Trump feel like he's got a win on some
parts of it potentially, So it's a very careful exercise.
(07:14):
In this case, the EU is saying, you know, these
negotiators are representing all of us. You can't try and
come to each leader individually and peel us off. The
representatives for us are the people who are talking to you.
So this is the EU chief negotiator, for example Shaskovich.
It's also Oshel of Vondeline and those in the Commission.
So they are holding the line on that versus coming individually.
(07:36):
But again, do they have that personal rapport that's going
to get this over the line.
Speaker 4 (07:40):
Ross, thanks so much for joining us. Really appreciate getting
your reporting. Ross Math as a news director for you're
the Middle East and Africa for Bloomberg News. Joining us
via zoom from our London headquarters at Queen Victoria Street.
Speaker 1 (07:52):
You're listening to the Bloomberg Intelligence podcast. Catch US live
weekdays at ten am Eastern on Applecarckley and Android Dot
with the Bloomberg Business app. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (08:06):
All Right, One of the great stories over the weekend,
I mean great as in you can really sink your
teeth into the ongoing drama of this is President Trump's Administration's.
Speaker 6 (08:15):
Attack on Harvard.
Speaker 2 (08:17):
The latest is the administration's moving to council all remaining
federal contracts with Harvard University, worth an estimated one hundred
million dollars. The latest in this battle with this university.
Janet Lauren is Bloomberg Higher Education finance reporter and joins us. Now,
what's the end goal?
Speaker 6 (08:35):
Do you think is Harvard.
Speaker 2 (08:36):
Kind of understands this from the Trump administration.
Speaker 6 (08:39):
That's a really good question, because it seems like several
times a week we're seeing a new financial tool being
hammered down on Harvard. The Trump administration has a lot
of issues with Harvard, and many of these elite universities,
Harvard and Columbia have been single dart. Harvard is the
richest and the oldest university in America, so it has
(09:01):
a particular status. But the administration is outlined several things
in addition to them not doing enough about anti Semitism.
They say they're discriminatory in hiring and admissions, and what
does that mean. They you know, it's related to diversity
and DEI that they're potentially not picking the best candidates
(09:23):
and other candidates are being excluded. He is a problem
with the ideal ideological bias, as he said, which is
very left leaning at Harvard, and they should they should
promote more viewpoints than just one. And Harvard has said
they don't disagree with him on some of these points,
but they don't agree with the way Trump is trying
(09:44):
to implement this with you know, huge financial penalties. And
people say, well, Harvard's a private university. Why does the
US government have a say in this? And the US
government gives universities like Harvard, you know, billions of dollars
in invest in grants, grants, it's true, grants and contracts.
(10:05):
But the federal government also allows student visas. They allow
international students to come to study at universities.
Speaker 2 (10:14):
Well, not necessarily. Now Politico is just reporting Paul. The
US orders halts a student visa interviews, so there is that.
Speaker 3 (10:23):
Okay, So student visas.
Speaker 6 (10:25):
Are regulated, you know, through the US government, and Harvard
has almost seven thousand international students. If you look at
the international community in total, it's more like ten thousand people,
which doesn't the lower number doesn't include people who are
here for fellowships or doing research and their families and
international students typically pay the full price. So there's more
(10:49):
than a million of them in the US, and it's
really propped up a lot of universities, including Harvard.
Speaker 4 (10:56):
What's the legal path that Harvard has taken here?
Speaker 6 (10:59):
So Harvard suit immediately and there's a temporary restraining order.
There's a hearing coming up this week, but procedurally that
we'll see what happens. But if you're an international student
and you're thinking, well, it's been my dream to come
to Harvard, should I go. I'm going to do a
program for two years or an undergrad for four years,
(11:20):
but maybe I'm not going to complete it. It's introducing
a huge amount of uncertainty in this calculation for students.
Speaker 4 (11:29):
And what's happening on the ground. I could tell for
my time at Duke, kids are choosing not to come
to the US right in the study elsewhere, and some
of the best and brightest going to other places. And
what do those students do after they get the degrees?
They tend to stay there, right, right.
Speaker 2 (11:45):
Because why would you run the risk of going there
for a year and all of a sudden being asked
to leave. Why not go some you know, Oxford is
just nice? Go ahead?
Speaker 4 (11:51):
Why not?
Speaker 6 (11:52):
Exactly?
Speaker 2 (11:53):
Okay, So what happens like what I mean, Harvar's going
through the courts, But that's going to take forever, right.
Speaker 6 (11:59):
No, I mean, you think about COVID when there was
a huge amount of uncertainty, people had the option of
taking a gap year, and the colleges were very accommodating
in that there's less at some point the pandemic was
going to end in real life, would return on campus.
But no, it could have a large impact for universities
(12:19):
in their bottom lines if they decide to go elsewhere.
Speaker 4 (12:23):
So again, it's I'm guessing every other university in the
country is just kind of keeping their head down hoping
they don't get into those sites of President Trump. Is
there a sense that this is going to have a
real chilling effect on just higher education in general, in
terms of investment, in terms of recruiting the best and
brightest students and faculty and all that kind.
Speaker 6 (12:45):
Of Well, there are a couple of things going on
within higher education, as Paul. You know, the cost of
it is something that I don't think any American is
going to disagree with. It's very high. You know, there's
a whole system of discount but you know, if you
look at some of the richest colleges, you know, more
than half actually pay the full price. Why is a
(13:07):
year at say Harvard Law School one hundred and twenty
thousand dollars. Why do students take six years to graduate
from college. There's a lot of issues within higher education
that should be addressed, and I think the American public
would like to see some of those things answered. But
the system is, you know, there's a lot of federal
(13:30):
money in this system, so in some ways the federal
government certainly has a right to ask a lot of questions.
Speaker 5 (13:38):
Yeah.
Speaker 4 (13:38):
Yeah, interesting, it's a tough time spread, oh my gosh. Yeah,
and they already had some of the just the fact
that there are fewer fewer candidates.
Speaker 6 (13:47):
You know, because of pure demographics.
Speaker 4 (13:49):
Yeah, demographics.
Speaker 2 (13:50):
And yeah, there was one area where you didn't think
would be affected by elections like you might have thought education.
But anyway, all right, Jane, thanks a lot. Jane Lauren
Boomberg higher education finance reporter on the latest President Trump
versus Harvard University very much sort of as we walk
through that issue between the two of them.
Speaker 1 (14:07):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (14:21):
Alex Steel alongside paulse we need. This is Bloomberg Intelligence Ready.
We bring you all the top news and business, economics
and finance through our lens of our Bloomberg Intelligence folks.
They cover two thousand companies and one hundred thirty industries
all around the world. All right, as we have raids
still treading around that five percent level for the thirty year,
despite the fact that rates have come down a touch
over the last two days, it does bring into question
(14:42):
what happens with commercial real estate. Patrick Wilson, portfolio manager
of Center Square Investments, joins us. Next, Okay, what's the
remarket looking like right now?
Speaker 7 (14:52):
Yeah, so it's been very interesting, to say the least
to start the year. Obviously, trade policy has affected all
asset classes across the economy, but in terms of reachs,
you know, we are seeing things like interest rate volatility. Obviously,
reats are a pretty capital intensive business, so the issuing
of debt and equity capital has had to be really
(15:15):
precisely timed. I mean, just this year, we've been from
a four point eight percent yield on the tenure to
bottoming at three ninety nine. Depending on where you were
in and when you were in the queue, it could
either scuttle or even postpone some of your debt and
equity issuance on that front. So it's been times where
we've also seen development starts year to date have also
(15:39):
slowed on the reach side and commercial real estate as
a whole, And obviously that relates to the tariffs and
the thread of cost overruns and whatnot being a little
bit more difficult to forecast, and so it's kind of
taking a wait and see approach to the market a
little bit.
Speaker 4 (15:53):
So in the commercial real estate space, how's that the
deal flow been. It doesn't seem like I'm reading a
lot about deals getting done.
Speaker 7 (16:02):
Yeah, it's a great point. There's if you roll back
the clock, we actually came into this year at very
healthy levels. That was when the agenda on the Trump
administration was going to be very pro growth. People were
a little bit more gung ho and more optimistic about
our economic outlook. And then as we roll through early
April and what's occurred since, there's definitely been some trepidation
(16:27):
coming through. And so we've seen things like property transactions
by count, so property transaction count and portfolio acquisitions, Larger
M and A deals certainly get you postponed or in
some cases possibly have been pulled back as a result
of just not having that same amount of confidence on
where the economy is heading.
Speaker 2 (16:46):
What areas in the market can kind of weather this storm, right,
Like we obviously had the data center build up, but
even that has been trimming around the edges, right and
sort of changing the type of investments that's going into
AI and data centers as well.
Speaker 7 (17:01):
Yeah, so you're speaking more broadly to just areas where
you could.
Speaker 2 (17:06):
Well typically like the bull case for Readze was data centers, right,
But then now it does feel like that narrative is
not changing but shifting a little bit and trimming like
maybe we're going to go more to the infront stage,
so you need to build different types of centers in
different areas versus the huge behemoth data centers.
Speaker 7 (17:24):
Yeah, no, that's definitely fair. You know, you're speaking to
the transition from training in data centers often far flung
where power and land was widely available, to now bringing
it more to the inference phase of the data center buildout,
which has to be closer to population density. So what
we see here is that making its way into main
(17:45):
street America where we start seeing you know, Microsoft Copilot
being integrated into your workflows and that has to have
a lower latency. So we're in the crux of kind
of that transition. We've seen over the last few quarters
more and more discussion inferencing truly taking place in the
data center reads. So those would be Digital Realty TICK
(18:06):
or DLR EQUINIX eqi X, those would be two platforms
that are starting to speak to where they have a
greater amount of network, dense collocation and facilities where that
latency does matter, and you start to see that AI
inferencing take place. And so that's kind of a new
phenomenon over the last few quarters.
Speaker 4 (18:25):
So as Michael McKee walks into the studio, I naturally
think of senior housing package. Wow, that's got to be
a long term bullish story in your space.
Speaker 7 (18:40):
Yes, it is. At Center Square. We really do have
a very optimistic view and outlook for the senior housing space.
So we in the demographics, not just in the US,
but across the globe, there is the concept of the
baby boomer generation moving through a bit of you know,
pigging the python, if you will, as we move through
that age cohort and they're sitting on a profound amount
(19:04):
of equity capital in their homes, so the capacity to
pay is very, very high, and demographically speaking, this kind
of speaks to that secular demand that we're targeting at
Center Square right now to kind of buffer any economic weakness.
What we see is the keger in the eighty plus
population that we've seen over the last really twenty years
has been hovering at one one and a half percent,
(19:25):
and starting about next year, that keger will increase to
four four and a half percent of that eighty plus population.
And we don't see, again real estate being a very
supply and demand driven industry, we don't see really any
supply on the horizon that will satiate that uptick in demand.
So combining the capacity to pay along with the really
(19:47):
really favorable demographic led demand coming through, we see that
to be very very favorable for senior housing going forward.
Speaker 2 (19:55):
All right, really great, really appreciate it. Come back. We
love to a continue to update from you. Patrick Wilson
joining us on the reed market and where there is
still value. Patrick Wilson, Portfolio manager of Center Square Investment.
Speaker 1 (20:07):
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Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:23):
This is Bloomberg Intelligence Radio. All right, let's get to
that consumer confidence on number jumping the most in four
years on outlook for better economy as well as trade truth.
Joining us now to break down those numbers even more
is Stephanie Gusha, a senior economist at the conference Sport.
Is it truly alle relief on trade? At this point?
Speaker 3 (00:46):
It's largely We split our sample around May twelve to
see whether there was a stronger improvement in the second
half of the month, and there was, sorry, truly after
the trade did with CHI now that we saw strongest
improvement in our indicators, especially the expectation component.
Speaker 4 (01:06):
So in your index here, what's the makeup of kind
of consumer confidence? Is it how much is kind of jobs?
Do I have a job? Or is it more about inflation?
What am I going to have to pay for stuff?
Just general economic concerned? How is that waited?
Speaker 3 (01:24):
So it's a lot about jobs, both in the current
situation and in the expectations components. And one thing to
notice that the current job situation is the only component
of the index that didn't improve this month, So there
are still some concern about, you know, where the label
market is going right now, and we don't explicitly have
(01:50):
an inflation component in the index. However, we ask consumers
about how they feel about their future income, which could
be capturing, you know, whether they are going to get
enough money to pay for what they need, and that
that's one of the components of the expectation component. But
it's not really about inflation overall. It's more about the
(02:13):
label market.
Speaker 2 (02:14):
Okay, Stephanie, thank you very much. Really interesting, and also
we have not recouped though the big decline that we've seen.
It's not a full v yet that recovery for consumer
confidence a right, Stephanie Kusha joining us there from the
conference board.
Speaker 1 (02:28):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (02:42):
Alex still here alongside pauls we need. This is Bloomberg
Intelligence Radio. We're broadcasting to live from our interactive broker
studio right here in mid tom Manhattan. Also check us
out on YouTube, Bloomberg dot com, as well as originals
on realku and your smart tv anywhere where you get
your news. So, the news over the weekend as well
as this morning, is President Trump rolling back it's tariff
deadline and tariff amount on the European Union, saying that
(03:05):
it's speeding up, it's treading negotiations and he thinks this
is a positive event. Now that deadline's extended to July ninth,
after a call this weekend with the European Commission President
Ursula Vonderlyon. Let's get more on this with Roz Matheson,
Bloomberg News director for Europe, the Middle East and Africa.
Ros What do we know that the EU Ursula Vonderlyon
offered President Trump to make him feel so good about it?
Speaker 5 (03:26):
Well, part of it might have just been that that
phone call seemed to have gone smoothly, but also what
we saw from the markets when he threatened the fifty
percent tariff, maybe al so perhaps entered into Donald Trump's thinking.
But as you say, we do know after that call
that he walked back that threat. So we've got a
bit more breathing space on the EU side to get
talks going. And now the question is how can talks
(03:47):
occur in a in a proper way, and what is
the EU going to do potentially to crack open the
door with US without giving away its own red lines,
because the E does have a whole lot of stuff
that is just willing, not willing to give ground on.
We do know they seem to be wanting to now
split up the talks a little bit, So separate all
these big things out into smaller pieces and see if
(04:08):
they can make any traction on individual things. So more
on the political side, there's hot button issues around auto's pharmer,
civil aircraft chips and so on, and then more technical
level conversation around things like non tariff barriers. So split
everything up into smaller compartments again and see if they
can edge anything forward. But in doing so you do
(04:30):
also risk fragmentation. And the question is in conversations going forward,
do you end up with partial bits of a framework
deal and nothing really complete? And what then happens if
we get very very close to this July deadline and
things are still deadlocked.
Speaker 4 (04:45):
So ross how united is the European Union in these negotiations?
Here in these discussions do you think?
Speaker 5 (04:54):
Well, that's always the classic question, isn't it with the
EU unity in the minute? Because it is a bunch
of very different economies and very different politicians leading each country.
In this case, there does seem to be a decent
amount of unity. You're not seeing some of the bigger
economies speak out necessarily against each other. I mean, that's
been the weakness and the strength of the EU for
(05:16):
many many decades, is trying to peel individual leaders away
from each other. We've seen that for example on how
to handle the war in Ukraine. But on this they
do seem to be unified. So even some of the
economies that have tended to side with Donald Trump are
falling in line. The question again is like, is there
any wiggle room between the EU and the US to
(05:39):
get to some kind of framework agreement or are we
going to see this all happen in July and then
EU retaliation, which could be quite significant, kicks in automatically
at that point, and so it's really downe to the
negotiators at this point to see if they can find
common ground and the role potential of Ursula Vonderline in
that her chief trade negotiator been talking a lot with
(06:01):
US officials like Howard Lutnick for example, and jameson Gria
of late. Is that personal relationship going to get any
kind of traction and are they able to represent and
hear you collectively then as a whole.
Speaker 2 (06:12):
But that's sort of what confuses me because is it
concrete stuff or is it just having a good phone
call with President Trump? And like, what can Europe actually
offer thus concrete that's not going to make all the
other twenty six members mad?
Speaker 4 (06:26):
Well, that's the thing.
Speaker 5 (06:27):
It does seem to be quite personal, right. I was
thinking about recently, even to Donald Trump's first term in
office and some of the trade tensions with China for
example that came up at the G twenty's and so on,
and how it always took like a meal with sieging
Pings sitting down at a table together, that leader level
conversation to break the eyes to get a thaw, even
if it's temporary in trade tensions. We saw that with
(06:51):
China over and over again. And then of course it
all fell apart some months later and we were back
to a trade war. So it does seem to be
quite personality dependent, and it's about again the EU does
have its red lines. It's not going to roll over
in order to get a deal. Equally, it's about letting
Donald Trump feel like he's got a win on some
parts of it potentially, So it's a very careful exercise.
(07:14):
In this case, the EU is saying, you know, these
negotiators are representing all of us. You can't try and
come to each leader individually and peel us off. The
representatives for us are the people who are talking to you.
So this is the EU chief negotiator, for example Shaskovich.
It's also Oshel of Vondeline and those in the Commission.
So they are holding the line on that versus coming individually.
(07:36):
But again, do they have that personal rapport that's going
to get this over the line.
Speaker 4 (07:40):
Ross, thanks so much for joining us. Really appreciate getting
your reporting. Ross Math as a news director for you're
the Middle East and Africa for Bloomberg News. Joining us
via zoom from our London headquarters at Queen Victoria Street.
Speaker 1 (07:52):
You're listening to the Bloomberg Intelligence podcast. Catch US live
weekdays at ten am Eastern on Applecarckley and Android Dot
with the Bloomberg Business app. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (08:06):
All Right, One of the great stories over the weekend,
I mean great as in you can really sink your
teeth into the ongoing drama of this is President Trump's Administration's.
Speaker 6 (08:15):
Attack on Harvard.
Speaker 2 (08:17):
The latest is the administration's moving to council all remaining
federal contracts with Harvard University, worth an estimated one hundred
million dollars. The latest in this battle with this university.
Janet Lauren is Bloomberg Higher Education finance reporter and joins us. Now,
what's the end goal?
Speaker 6 (08:35):
Do you think is Harvard.
Speaker 2 (08:36):
Kind of understands this from the Trump administration.
Speaker 6 (08:39):
That's a really good question, because it seems like several
times a week we're seeing a new financial tool being
hammered down on Harvard. The Trump administration has a lot
of issues with Harvard, and many of these elite universities,
Harvard and Columbia have been single dart. Harvard is the
richest and the oldest university in America, so it has
(09:01):
a particular status. But the administration is outlined several things
in addition to them not doing enough about anti Semitism.
They say they're discriminatory in hiring and admissions, and what
does that mean. They you know, it's related to diversity
and DEI that they're potentially not picking the best candidates
(09:23):
and other candidates are being excluded. He is a problem
with the ideal ideological bias, as he said, which is
very left leaning at Harvard, and they should they should
promote more viewpoints than just one. And Harvard has said
they don't disagree with him on some of these points,
but they don't agree with the way Trump is trying
(09:44):
to implement this with you know, huge financial penalties. And
people say, well, Harvard's a private university. Why does the
US government have a say in this? And the US
government gives universities like Harvard, you know, billions of dollars
in invest in grants, grants, it's true, grants and contracts.
(10:05):
But the federal government also allows student visas. They allow
international students to come to study at universities.
Speaker 2 (10:14):
Well, not necessarily. Now Politico is just reporting Paul. The
US orders halts a student visa interviews, so there is that.
Speaker 3 (10:23):
Okay, So student visas.
Speaker 6 (10:25):
Are regulated, you know, through the US government, and Harvard
has almost seven thousand international students. If you look at
the international community in total, it's more like ten thousand people,
which doesn't the lower number doesn't include people who are
here for fellowships or doing research and their families and
international students typically pay the full price. So there's more
(10:49):
than a million of them in the US, and it's
really propped up a lot of universities, including Harvard.
Speaker 4 (10:56):
What's the legal path that Harvard has taken here?
Speaker 6 (10:59):
So Harvard suit immediately and there's a temporary restraining order.
There's a hearing coming up this week, but procedurally that
we'll see what happens. But if you're an international student
and you're thinking, well, it's been my dream to come
to Harvard, should I go. I'm going to do a
program for two years or an undergrad for four years,
(11:20):
but maybe I'm not going to complete it. It's introducing
a huge amount of uncertainty in this calculation for students.
Speaker 4 (11:29):
And what's happening on the ground. I could tell for
my time at Duke, kids are choosing not to come
to the US right in the study elsewhere, and some
of the best and brightest going to other places. And
what do those students do after they get the degrees?
They tend to stay there, right, right.
Speaker 2 (11:45):
Because why would you run the risk of going there
for a year and all of a sudden being asked
to leave. Why not go some you know, Oxford is
just nice? Go ahead?
Speaker 4 (11:51):
Why not?
Speaker 6 (11:52):
Exactly?
Speaker 2 (11:53):
Okay, So what happens like what I mean, Harvar's going
through the courts, But that's going to take forever, right.
Speaker 6 (11:59):
No, I mean, you think about COVID when there was
a huge amount of uncertainty, people had the option of
taking a gap year, and the colleges were very accommodating
in that there's less at some point the pandemic was
going to end in real life, would return on campus.
But no, it could have a large impact for universities
(12:19):
in their bottom lines if they decide to go elsewhere.
Speaker 4 (12:23):
So again, it's I'm guessing every other university in the
country is just kind of keeping their head down hoping
they don't get into those sites of President Trump. Is
there a sense that this is going to have a
real chilling effect on just higher education in general, in
terms of investment, in terms of recruiting the best and
brightest students and faculty and all that kind.
Speaker 6 (12:45):
Of Well, there are a couple of things going on
within higher education, as Paul. You know, the cost of
it is something that I don't think any American is
going to disagree with. It's very high. You know, there's
a whole system of discount but you know, if you
look at some of the richest colleges, you know, more
than half actually pay the full price. Why is a
(13:07):
year at say Harvard Law School one hundred and twenty
thousand dollars. Why do students take six years to graduate
from college. There's a lot of issues within higher education
that should be addressed, and I think the American public
would like to see some of those things answered. But
the system is, you know, there's a lot of federal
(13:30):
money in this system, so in some ways the federal
government certainly has a right to ask a lot of questions.
Speaker 5 (13:38):
Yeah.
Speaker 4 (13:38):
Yeah, interesting, it's a tough time spread, oh my gosh. Yeah,
and they already had some of the just the fact
that there are fewer fewer candidates.
Speaker 6 (13:47):
You know, because of pure demographics.
Speaker 4 (13:49):
Yeah, demographics.
Speaker 2 (13:50):
And yeah, there was one area where you didn't think
would be affected by elections like you might have thought education.
But anyway, all right, Jane, thanks a lot. Jane Lauren
Boomberg higher education finance reporter on the latest President Trump
versus Harvard University very much sort of as we walk
through that issue between the two of them.
Speaker 1 (14:07):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 2 (14:21):
Alex Steel alongside paulse we need. This is Bloomberg Intelligence Ready.
We bring you all the top news and business, economics
and finance through our lens of our Bloomberg Intelligence folks.
They cover two thousand companies and one hundred thirty industries
all around the world. All right, as we have raids
still treading around that five percent level for the thirty year,
despite the fact that rates have come down a touch
over the last two days, it does bring into question
(14:42):
what happens with commercial real estate. Patrick Wilson, portfolio manager
of Center Square Investments, joins us. Next, Okay, what's the
remarket looking like right now?
Speaker 7 (14:52):
Yeah, so it's been very interesting, to say the least
to start the year. Obviously, trade policy has affected all
asset classes across the economy, but in terms of reachs,
you know, we are seeing things like interest rate volatility. Obviously,
reats are a pretty capital intensive business, so the issuing
of debt and equity capital has had to be really
(15:15):
precisely timed. I mean, just this year, we've been from
a four point eight percent yield on the tenure to
bottoming at three ninety nine. Depending on where you were
in and when you were in the queue, it could
either scuttle or even postpone some of your debt and
equity issuance on that front. So it's been times where
we've also seen development starts year to date have also
(15:39):
slowed on the reach side and commercial real estate as
a whole, And obviously that relates to the tariffs and
the thread of cost overruns and whatnot being a little
bit more difficult to forecast, and so it's kind of
taking a wait and see approach to the market a
little bit.
Speaker 4 (15:53):
So in the commercial real estate space, how's that the
deal flow been. It doesn't seem like I'm reading a
lot about deals getting done.
Speaker 7 (16:02):
Yeah, it's a great point. There's if you roll back
the clock, we actually came into this year at very
healthy levels. That was when the agenda on the Trump
administration was going to be very pro growth. People were
a little bit more gung ho and more optimistic about
our economic outlook. And then as we roll through early
April and what's occurred since, there's definitely been some trepidation
(16:27):
coming through. And so we've seen things like property transactions
by count, so property transaction count and portfolio acquisitions, Larger
M and A deals certainly get you postponed or in
some cases possibly have been pulled back as a result
of just not having that same amount of confidence on
where the economy is heading.
Speaker 2 (16:46):
What areas in the market can kind of weather this storm, right,
Like we obviously had the data center build up, but
even that has been trimming around the edges, right and
sort of changing the type of investments that's going into
AI and data centers as well.
Speaker 7 (17:01):
Yeah, so you're speaking more broadly to just areas where
you could.
Speaker 2 (17:06):
Well typically like the bull case for Readze was data centers, right,
But then now it does feel like that narrative is
not changing but shifting a little bit and trimming like
maybe we're going to go more to the infront stage,
so you need to build different types of centers in
different areas versus the huge behemoth data centers.
Speaker 7 (17:24):
Yeah, no, that's definitely fair. You know, you're speaking to
the transition from training in data centers often far flung
where power and land was widely available, to now bringing
it more to the inference phase of the data center buildout,
which has to be closer to population density. So what
we see here is that making its way into main
(17:45):
street America where we start seeing you know, Microsoft Copilot
being integrated into your workflows and that has to have
a lower latency. So we're in the crux of kind
of that transition. We've seen over the last few quarters
more and more discussion inferencing truly taking place in the
data center reads. So those would be Digital Realty TICK
(18:06):
or DLR EQUINIX eqi X, those would be two platforms
that are starting to speak to where they have a
greater amount of network, dense collocation and facilities where that
latency does matter, and you start to see that AI
inferencing take place. And so that's kind of a new
phenomenon over the last few quarters.
Speaker 4 (18:25):
So as Michael McKee walks into the studio, I naturally
think of senior housing package. Wow, that's got to be
a long term bullish story in your space.
Speaker 7 (18:40):
Yes, it is. At Center Square. We really do have
a very optimistic view and outlook for the senior housing space.
So we in the demographics, not just in the US,
but across the globe, there is the concept of the
baby boomer generation moving through a bit of you know,
pigging the python, if you will, as we move through
that age cohort and they're sitting on a profound amount
(19:04):
of equity capital in their homes, so the capacity to
pay is very, very high, and demographically speaking, this kind
of speaks to that secular demand that we're targeting at
Center Square right now to kind of buffer any economic weakness.
What we see is the keger in the eighty plus
population that we've seen over the last really twenty years
has been hovering at one one and a half percent,
(19:25):
and starting about next year, that keger will increase to
four four and a half percent of that eighty plus population.
And we don't see, again real estate being a very
supply and demand driven industry, we don't see really any
supply on the horizon that will satiate that uptick in demand.
So combining the capacity to pay along with the really
(19:47):
really favorable demographic led demand coming through, we see that
to be very very favorable for senior housing going forward.
Speaker 2 (19:55):
All right, really great, really appreciate it. Come back. We
love to a continue to update from you. Patrick Wilson
joining us on the reed market and where there is
still value. Patrick Wilson, Portfolio manager of Center Square Investment.
Speaker 1 (20:07):
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