July 28, 2025 • 23 mins
-Terry Haines, Pangea Policy Founder
-Steve Ricchiuto, Mizuho Chief Economist
-Richard Masters, Premier League CEO
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
with Lisa Bromwitz and Amrie Hordern. Join us each day
for insight from the best in markets, economics, and geopolitics
from our global headquarters in New York City. We are
live on Bloomberg Television weekday mornings from six to nine
am Eastern. Subscribe to the podcast on Apple, Spotify or
anywhere else you listen, and as always on the Bloomberg
(00:34):
Terminal and the Bloomberg Business App. Terry Haynes of Pangaeepolicy, Terry,
Welcome to the program. There is always a temptation to
move on to the next thing. I just want to
talk about the last thing for a little bit longer.
Just frame what we witnessed over the weekend. To see
European Commission president except fifteen percent and essentially say thank you,
we will rebalance and almost apologizing about the situation.
Speaker 3 (00:57):
Well, it's a it's a triumph of a lot of things.
Certainly the president ought to take a victory lap. I
think it's I think it ends up being good for
the European Union. It's a blow against the conventional wisdom,
which of course, in the last quarter saw a lot
of this as disastrous. The markets see the fact of
the deal and the ratification of trade and the expansion
(01:17):
of trade is the most important thing and number one.
Number two, I think there's a situation here where as
you've alluded to when you're questioning with Tyler, that the
geopolitical element of this also remains front and center. Whether
we're talking about the continued interdependence of the US and
European Union economies, or whether we're talking about investments in
(01:41):
the United States and purchases of military equipment. You're seeing
a You're seeing a tightening of the alliance, and I think,
frankly an attempt by both parties to push back a
bit against against China terry.
Speaker 4 (01:55):
Just to build on that theme, we're hearing from the
EU Trade Commissioner morro Sekovich this morning in Brussels, and
he commented on how overcapacity is destroying the EU steel industry.
Over Capacity is sort of code from steel from China,
and I wonder how much that is. Ongoing discussions that
are happening now that have pushed Europeans to make this
deal with the United States, even if it's being perceived
(02:18):
by the market as being better for the.
Speaker 3 (02:19):
US, well, they'll they'll certainly try to make a deal
on this. But at the same time, you know, the
europe sees in the United States sees as well.
Speaker 5 (02:28):
I think the.
Speaker 3 (02:30):
China using the economic sectors and industries as geopolitical weapons.
And there's nothing there's nothing more stark than China trying
to flood the European market with evs for example, on this.
And you know, we even see Bloomberg reported recently Starbucks
(02:54):
under assault now by a Chinese coffee company starting in
New York, vastly undercutting prices. So you'll see this throughout
and it is a light motif these trade deals and
the fulcrum of kind of pushing back against China, limiting
China's ability to try to use industries and sectors to
(03:17):
frankly hollow out and destroy industrial capacity in the West.
Speaker 4 (03:21):
What have we learned from both the Japanese deal and
the EU deal in terms of the structure of the
sustainable trade conversation going forward? Is it the fifteen percent
is a new floor and that you have to have
some sort of investment fund alongside that. The details of
which haven't really been disclosed on either side.
Speaker 3 (03:38):
I tend to go outside in on this instead of
inside out. What I mean by this is I think
I think markets, and I've said this many times on
this program, I think markets are focusing entirely too much
on tariffs and entirely not too much on the broader
benefits of the rest of Trump trade and trade policy
(04:00):
and tax policy, whether it be the tax bill and
the variety of things that are that are coming from
that or these trade deals, and how they're trying to
reorient in ways that frankly continue and expand investment in
the United States as a compliment to onshoing and reshoring
in critical critical industries, as Secretary best and puts it.
Speaker 4 (04:23):
In fairness, though, stops are at record high. So if
you're reaching record high after record high and what capacity,
are you saying that markets are not aware of some
of the positive benefits from this, Well.
Speaker 3 (04:33):
I'm saying that they haven't been, first of all, And
second of all, I'm saying that there's there continues to
be a focus on tariffs as a negative without the
countervailing positives and attached. Certainly, markets had gotten over a
lot of the tariff shock in the last quarter, and
you know got past the idea from the conventional wisdom
(04:55):
that this was going to cause a hole in the economy. Now,
what your situation is, Steve put it very well in
the last segment, is you've got a variety of hoops
that have been jumped through all of what your market positives.
And now we're turning to for example, the FED this
week as well as earnings to see if the proofs
and the putting on that.
Speaker 2 (05:15):
Side the narrative has changed quickly. Let's put it that way, Terry,
appreciate your time. Terry Haynes. There of panchee policy. Steve
Reshoot of Mazoo with a bullish forecast for Friday's payrolls report,
calling for one hundred and forty thousand jobs to be
(05:35):
added and expecting the unemployment rate to tick up slightly.
Steve joined us now for more Steve Goomonic, good morning.
Some of the times that maybe one forty is called bullish.
Now for the labor market, what's changed, Well.
Speaker 6 (05:46):
You are further into a business cycle. You do have
a labor market shortage. You do have a very very
tight labor market, so it's hard to continue to add
large scales without causing a certain amount of disruptions and
a dramatic rise in wages, and I think companies have
been resistant on that. I also think there's a bit
of a technology shift taking price, and I don't think it's
all the AI, but I think it's further adopting of
(06:07):
the traditional types of technology that we need to do
things in the service industry with more and more kiosks
popping up everywhere, and I think that helps the situation
as well. So we're supplementing labor or get a little
bit with capital where we can.
Speaker 4 (06:22):
You have some people like Chris Waller, governor who's expected
to send the first ascent on the Federal Reserve since
nineteen ninety three, potentially on Wednesday, coming out and saying
he's seeing cracks, he's seeing signs that there is instability
in the labor market. Do you reject that wholesale or
do you just say that that is something that comes
along with the changes in technology and demographics.
Speaker 6 (06:41):
Well, I do reject at wholesale because what we see
in terms of the claims numbers, what we see in
terms of the continuing claims numbers leave us in an
environment in which you know there's a healthy labor marketing environment.
We see no evidence whatsoever in the data that's less
likely to be disrupted by any kind of flow differentials.
(07:02):
We also seen in terms of the Jolts numbers, which
I don't particularly like, but the FED seems to like
in terms of hiring quits going back up, in terms
of hirings being healthy, in terms of job openings going
back up. So I don't see where there really are
cracks in the labor market. It's a traditional slowing that
takes place as you get this far into an environment.
And oh, by the way, adjust it for how tight
(07:23):
the labor market fundamental he.
Speaker 4 (07:24):
Is, given the fact that we do see some sort
of slowing at least at the very least, Is there
anything inflationary about this labor market? Is there anything about
wage growth that would give you confidence that we could
see more than just a one time price adjustment from tariffs?
Speaker 6 (07:39):
Oh, I think you grew up going towards a three
percent inflation rate, and that's part of the issue. I
think it's from a labor market tight standpoint, I don't
necessarily have to talk about tariffs to tell you I
think we're going to three percent inflation, and I question
whether or not tariffs themselves will be reflected in prices substantially,
because you look at quorter margins, they're very, very wide.
(08:01):
You look at exporter margins with the dollar going down,
you've got that benefit coming through a little bit of
goods prices. We've seen given the fact that the dollar
is depreciated six or seven percent in the last year,
and not surprising you see a little upward movement in
prices that would typically just take place from the currency standpoint,
and actually it's not even keeping place with the currency standpoint,
(08:23):
because global deflation is real. And that's the other thing
that's offsetting and helping the exporter margins widing, because as
China dumps all its goods everywhere else in the world,
these people are sitting there with their run material base
starting to get cheaper, and therefore they could absorb the
margins where and China is dumping goods everywhere that they
can't dump here anymore.
Speaker 2 (08:42):
Other capacity is a massive issue, particularly for the Europeans.
That's for sure. You said something really interested that we
need to unpack the labor market might be a reason
to be hawk issh still, Governor Walla was in your
seat a week two weeks ago. I made the case
the labor market is increasingly becoming a reason to be dumbished.
So I just want to give you some time. What's
happening in the labor market right now that you think
(09:03):
is going to keep them on the back foot.
Speaker 6 (09:05):
I think the fact that the unemployment rate is not
going to go higher. I think the you know, movement
to four point two, we've been there and they've done nothing.
But I think when you look at the fundamentals of
the labor market and what will drive that unemployment rate
up a little bit, you can discover that it's positive science.
An expansion in the labor force from not having expanded
for two months in a row. That's going to be
(09:25):
the kind of thing that you know, gives you an
environment where and that's probably going to wind up in
a little bit increase in unemployment. Temporarily, you're going to
wind up in an environment where it's a healthy expansion
in the labor market help you up with adjustment in
the unemployment rate. I don't think there's cracks in the
system when I look at the earnings numbers. You know,
my earnings revision tracker is now positive after being negative
(09:46):
for weeks on end, It's now been positive for three
weeks in a row. Companies are revising up earnings. We're
at ten point nine percent for this year, thirteen point
nine percent for next year. These are solid earnings numbers.
These aren't kind of an earning number of peop will
sit back and say I have to scale back on
employment dramatically. I think a lot of the announcements that
you're picking up on in the labor market are taking
(10:07):
place in states where you're required to announce the layoffs,
but you're not required to announce the net hirings, and
I think that becomes part.
Speaker 5 (10:15):
Of the problem.
Speaker 6 (10:15):
It's selective decision to look at the information. And this
is a confirmation bias I think comes from the dots.
If I were to drop Jonathan Ferroll out of an
alien spacecraft, you had been studying the Federal Reserve for years,
you'd been studying the US economy for years, but you
didn't know any about the dots, and I dropped you
in Arizona right now, Okay, you would come out of
(10:35):
that spacecraft and you would be like, Oh, the FED
shouldn't be cutting rates. But everyone else says the Fed's
cutting rates. Why because the dots are there, so everyone's
biased by the dots.
Speaker 2 (10:44):
Other people might cherry peck some labor market data. Right now,
at least, I've talked about a few things. Entry level
hiring not great at all, job switches not getting that
boost to pay. You talked about the labor market and
the tightness there, sufficiently tight to generate stronger pay rolls growth,
stronger wage growth. It keeps this FED reluctant account interest rights.
Speaker 6 (11:02):
We've got an hoarurwly earnings number of zero point four percent.
That's again consistent with a four percent rise. A four
percent rise is consistent with three percent inflation. FEDS targets too.
We're a two point seven our estimate for the upcoming
PCE deflator. There's seven tenths off the mark, three tenths
closer to my number, seven tenths away from their number.
I'm sorry. I think they're not in the position to
(11:23):
cut rates. And if they were to cut rates, I
think it would be a mistake. And I think you'd
discover exactly what happened last year when they cut rates,
and that is the long end of the curve. Would
sell off, so it would be a bear steepener.
Speaker 4 (11:35):
Which at a certain point is the reason why people
are also looking to the auctions. Sorry, I had to
say that I've been ormissed. There are auctions today and
tomorrow two year, five year, and seven year notes, but
also the Treasury refunding announcement that comes on Wednesday, when
maybe we get a sense of whether any of this
will matter for the US government's dep financing costs because
maybe they'll issue everything in t bills and just retire
all of their coupon all of their treasury bonds. I mean,
(11:57):
how much are you looking at that to really understand
exactly how this Treasure Department is going to manage this
and whether it's going to have any market immifications.
Speaker 6 (12:06):
Well, I think there's lots of reasons to expect bill
issue sizes will go up. Back when I began, which
was ancient history in terms of the markets, one of
the things I had to do was estimate the treasuries
operating cash balance. So I had to figure out financy
and I had to figure out the net cash flows,
and we assumed every single quarter a third of all
the net new money would be raised in bills. That's
(12:28):
not happening now. So yeah, there's more bill issuance coming
relative to coupon issuance.
Speaker 4 (12:32):
When you came in, you said that there's something else
that you're looking for.
Speaker 6 (12:35):
Stable Coin is something that I'm going to be looking
to see whether or not Treasure Secretary of pressent a
if he's back from his overseas trip and talks further
about stable coin than he did at the May Were
funding announcement, And he made a statement at that point
in time that I think get stuck in a lot
of people's minds. And I visited a lot of accounts,
and some of these accounts are very, very interested in
the whole stable coin concept and where do we go
(12:56):
with stable coin and how much of it will be
financed through bills, And he talked about two trillion dollars
market cap. You look at stable coin now, it's about
three hundred two hundred billion dollars. So that's telling it
there's a long way to go. And I question whether
or not if you wind up with it being done properly,
if you want it, For example, the Federal Reserve issuing
(13:17):
its own stable coin, could you then be in a
situation where we might actually replace a lot of our
electronic transfers of wires and replace the swift system with
something more simple and less costly for the end result user.
And know the banks don't want this because clearly it
influences a business they make a lot of money on.
But clearly the end user wants it. I can imagine
(13:39):
a place like Walmart, Target, Boeing, these big people, these exporters,
these importers, all sitting there saying, you know, this would
be great.
Speaker 5 (13:46):
It reduces my costs.
Speaker 6 (13:47):
I really think we have to do this right now.
We've got lots of stable coins going in different directions
and trying to do different things. If we could find
one way of unifying it and putting them all on
one network, creating it all in terms of one large
ability to do it, for example, with a treasury coin
hosted on a Federal Reserve website, I think you can
get a very fast adoption of the technology.
Speaker 2 (14:10):
You think it leads to increased tea build demand.
Speaker 6 (14:12):
I do think it leads to increased tea build demand,
because I do not believe it'll affect currency in circulation,
which affects the rest of the Federal Reserves portfolio. Currency
in circulation is a percentage of the economy's percent of
financial transactions is not going down. Yes, a lot of
the currency in circulation is outside the country, but we
still have the currency that's in circulation once up outside
the country. But we do have as a result of that,
(14:34):
the big federal reserve portfolio, and I don't think it changes.
So Yes, what happens in terms of stable coin, I
think will be a net new demand.
Speaker 5 (14:40):
Interesting.
Speaker 2 (14:41):
Happy to catch Shelby this morning Church a lot of
the audience Ryan and as well Steved shouldov missoo, I
have an a tremendous yes, so far dead on so
far this year on a lot of issues. Well, it's
nice watched football league making its way across the Atlantic.
The English Premier League is playing six matches for sold
(15:03):
out crowds in New Jersey, Chicago, and Atlanta this summer,
the series kicking off this past weekend with Manchester United
beating West Ham joining us. Now, I'm very pleased to
say the CEO of the English Premier League, Richard Master's
Richard and Monic.
Speaker 5 (15:16):
Good morning, thank you for having me.
Speaker 2 (15:17):
Welcome to the studio here in New York. It's going
to see you, sir, let's just talk about your involvement
in the sport. I think it's almost twenty years of
direct involvement with the Premier League. Are you surprised by
the amount of growth we've seen? Not in the UK,
forget all of that, the amount of growth we've seen
in America.
Speaker 1 (15:32):
Twenty years next January at the Premier League seven years
a CEO in December, what's the Premier League gets? Get
bigger and bigger and bigger and out here in the
US we've got a fantastic broadcast relationship NBC. We've opened
offices here in New York. We're committed to grow in
the game. About thirty percent of the US population not
interested in soccer or football, and about two thirds of
(15:53):
those followed the Premier League.
Speaker 5 (15:54):
And that's a brilliant foundation which to growth.
Speaker 1 (15:56):
Reason we're out here with six of our teams playing
matches to give our fans a taste to the Premier League.
Speaker 2 (16:02):
As a Britain New York I can tell you the
experience of NBC is amazing. I get to wake up
on a Saturday morning on a Sunday and I get
to watch absolutely everything. That's not the experience in the
UK with Sky. It's a very different experience. You only
get to watch so much. Why do we get to
see so much more through NBC than maybe fans in
the UK get to see at home.
Speaker 1 (16:23):
Well, in the UK, the matches between two and five
o'clock on a Saturday afternoon, which is the traditional time
to go and watch football in the country, aren't broadcast.
Speaker 5 (16:32):
So it's not just the Premier League. The FFL as
well aren't.
Speaker 1 (16:34):
Broadcast, and that's part of the decision we've made. It's
long term commitment to what's called Article forty eight. But
anywhere else outside of the UK, it's all three hundred
and eighty games throughout the season you can watch.
Speaker 5 (16:45):
And of course here in the US, as you.
Speaker 1 (16:46):
Say, there are millions of people getting up on a
Saturday and Sunday morning watching their favorite team and you
can sit there from seven AMS or lunchtime watch the
entire thing if you want to, And that's a brilliant
thing for us.
Speaker 4 (16:57):
Does it kind of hurt your soul to say soccer
instead of football at all?
Speaker 1 (17:00):
I think they're interchangeable. When I grew up, I grew
up in the Midlands, I watched soccer Sunday on Star
soccer rather on a Sunday lunchtime, so it's interchangeable at this.
Speaker 4 (17:12):
Point, though, does it dilute the pelayer's ability to really
commit to not only a team but a season if
they're playing at all times in all places and their
bodies have to be exhausted at a certain point.
Speaker 5 (17:24):
Now that's true.
Speaker 1 (17:25):
I mean there is a starter of players at the
top of the game who are playing a lot, and
it's a big issue within the game. The Premier League, obviously,
since ninety four, has been twenty clubs to in gen
eighty games August to May, but we've seen the gradual
expansion of European competitions and now global competitions as well.
Speaker 5 (17:43):
Next summer, the US will host.
Speaker 1 (17:45):
The World Cup first time forty eight teams, and of
course in the last summer we've seen the Club World Cup,
a brand new competition put into the calendar. And I
think that from my perspective, not just as CEO the
Premi League, but also my other role as chair of
the World League's Sociation, which is about representing domestic leagues
around the world, there has to be a big conversation
(18:05):
now about how you balance this out properly and make
sure that players are looked after and that these competitions
are additive and not subtractive from the competitions they bump into.
Speaker 2 (18:15):
Well, it's have that conversation right now. I can speak
as a fan. I hate it. I don't want to
see an expanded FIFA Club World Cub. In fact, for
most fans of the English Premier League, we get annoyed
whenever there's an international break. We don't want to see
more tournaments. What we loved was just the cadence of
every two years you had a major tournament. The Euro's,
the World Cup, the Euro's the World Cub. Why have
we gotten away from there? And what's your message to
(18:36):
FIFA to UEFA, as in the minds of many fans
they just seem to be chasing money, the expense of
the game and maybe the player's health.
Speaker 5 (18:44):
Well, the message is talk.
Speaker 1 (18:46):
You know that there is actually strong dialogue between domestic
leagues in Europe and New AFA about competitions and that's
a coalition of stakeholders, clubs, leagues, club players as well
talking about it. That dialogue doesn't happen at all for
the game and it should do. So that's the key message.
Sit down and talk to the leaguees, talk to all
the stakeholders and find a way through all of this,
(19:07):
because it has a limit and I think we've gone
past it. We've gone past saturation point. My job, obviously
is to look after the Premier League, and we're going
great guns, thank you very much. And I want the
purity of that competition to remain. I want people to
be able to enjoy that, enjoy their football because I
want the best players on the pitch all the time
in the Premier League and not worrying about how to
(19:28):
balance everything out.
Speaker 2 (19:29):
Let's talk about the purity of the game. It's a
polarizing topic and very controversial, as you know, Manchester City
in this number one hundred and fifteen the number of
charges for alleged breaches of financial regulations. What can you
share with us this morning about where things stand.
Speaker 5 (19:45):
Nothing is the honest truth.
Speaker 1 (19:48):
The case was heard last year and we wait for
the decision to be made. We can't hurry the people
whose job it is to make that decision, and it
will happen when it happens, and I don't know when
it's going to be. We'll find out with everybody else.
Speaker 2 (19:59):
What's your se of why it's taking so long.
Speaker 5 (20:01):
I don't know, and it's difficult for me to speculate.
I'm sorry.
Speaker 2 (20:04):
It's just difficult for a lot of people in the
game who follow the game to see how quickly things
concluded with a club like Habitat and how long it's
taking with a club like Manchester City. And some people
can't help but conclude that maybe different clubs are being
treated differently because of these status they have in the
Premier League.
Speaker 5 (20:20):
Yeah.
Speaker 1 (20:20):
Well, I do want to sign of frustration and share
some of those but in the end, this process is
very different.
Speaker 5 (20:27):
These allegations are very different. Makes it different too.
Speaker 1 (20:30):
They just said that the charge themselves and the number
of them, but I can't really get into it.
Speaker 5 (20:36):
I really can't talk about and you.
Speaker 2 (20:37):
Can't get into the details. But do you think it's
hurting the reputation of the league?
Speaker 1 (20:41):
Well, at the center of this is a football competition,
and I think people want to basically watch the football.
Speaker 5 (20:48):
That's the main event.
Speaker 1 (20:50):
And when you get dragged into whatever it may be,
financial affairs, I think people think that maybe there's something
going wrong here. I do accept all of that. The
competition remains strong, the economics, the primileague remain strong and fundamentally,
as long as we can put the best players on
the pitch and give people a fantastic competition, I think
(21:11):
we can get through this period.
Speaker 4 (21:13):
I've been an outsider and I've been studying the rules
of the game and the sustainability rule that kind of
led to this investigation into Man's City and this idea
that a club has to bring in and just spend
the same amount of money that it brings in. Do
you think that that rule has become outdated or unenforceable
in any kind of real time way.
Speaker 5 (21:34):
So, if you're talking.
Speaker 1 (21:34):
About the financial regulations within football, our clubs are all
really subject to two sets of regulations, our own, the
profitable and sustainability rules and also u waifers rules, So
they're looking at two sets of financial rules to comply with.
And essentially in England our rules are there. It's a
spending rule really about profitability. So there is the ability
(21:56):
to invest and that's what we want our clubs to do.
We've got a fantastic set of owners that invest in
the stadiums, in fan experience and players on the pitch,
and that's what we want. Whatever, as I said, the
great set of owners that want to invest, and so
there has to be a limit ultimately to ensure they've
got a competitive league, which we do have.
Speaker 5 (22:14):
So I think we're known as look at investing in
the Premier League.
Speaker 1 (22:17):
They can see that you can aspire to do better
in the league and now seeing more clubs qualifying for
European competition. Our clubs are in incredibly successful in Europe
and that's all down to investment. So there has to
be a limit ultimately on what you can spend. Clubs
have all signed up to these rules and we are
enforcing them.
Speaker 4 (22:34):
Well, how much does the Saudi League really kind of
I don't know, skew the financials of this in a
way that creates a sort of complicated dynamic.
Speaker 1 (22:43):
Well, the Saudi League is an investment phase. Sally League's
been around for many decades and now we're seeing local
investment into that and they're becoming very active in the marketplace.
Sometimes that good for Premierley clubs. Some sids they take clubs,
take players that Premi leagu clubs want to sign. It's
just a new dynamic and we have to observe it
and we have to cope with it.
Speaker 2 (23:04):
Richard, you'll be generous with your time. We appreciate it.
Thanks for dropping by, Thanks for having me, Thank you
very much for being here. Richard Masters there the English
Premier League CEO. This is the Bloomberg Surveillance podcast, bringing
you the best in markets, economics, and giot politics. You
can watch the show live on Bloomberg TV weekday mornings
from six am to nine am Eastern. Subscribe to the
(23:25):
podcast on Apple, Spotify or anywhere else you listen, and
as always on the Bloomberg Terminal and the Bloomberg Business
out
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
with Lisa Bromwitz and Amrie Hordern. Join us each day
for insight from the best in markets, economics, and geopolitics
from our global headquarters in New York City. We are
live on Bloomberg Television weekday mornings from six to nine
am Eastern. Subscribe to the podcast on Apple, Spotify or
anywhere else you listen, and as always on the Bloomberg
(00:34):
Terminal and the Bloomberg Business App. Terry Haynes of Pangaeepolicy, Terry,
Welcome to the program. There is always a temptation to
move on to the next thing. I just want to
talk about the last thing for a little bit longer.
Just frame what we witnessed over the weekend. To see
European Commission president except fifteen percent and essentially say thank you,
we will rebalance and almost apologizing about the situation.
Speaker 3 (00:57):
Well, it's a it's a triumph of a lot of things.
Certainly the president ought to take a victory lap. I
think it's I think it ends up being good for
the European Union. It's a blow against the conventional wisdom,
which of course, in the last quarter saw a lot
of this as disastrous. The markets see the fact of
the deal and the ratification of trade and the expansion
(01:17):
of trade is the most important thing and number one.
Number two, I think there's a situation here where as
you've alluded to when you're questioning with Tyler, that the
geopolitical element of this also remains front and center. Whether
we're talking about the continued interdependence of the US and
European Union economies, or whether we're talking about investments in
(01:41):
the United States and purchases of military equipment. You're seeing
a You're seeing a tightening of the alliance, and I think,
frankly an attempt by both parties to push back a
bit against against China terry.
Speaker 4 (01:55):
Just to build on that theme, we're hearing from the
EU Trade Commissioner morro Sekovich this morning in Brussels, and
he commented on how overcapacity is destroying the EU steel industry.
Over Capacity is sort of code from steel from China,
and I wonder how much that is. Ongoing discussions that
are happening now that have pushed Europeans to make this
deal with the United States, even if it's being perceived
(02:18):
by the market as being better for the.
Speaker 3 (02:19):
US, well, they'll they'll certainly try to make a deal
on this. But at the same time, you know, the
europe sees in the United States sees as well.
Speaker 5 (02:28):
I think the.
Speaker 3 (02:30):
China using the economic sectors and industries as geopolitical weapons.
And there's nothing there's nothing more stark than China trying
to flood the European market with evs for example, on this.
And you know, we even see Bloomberg reported recently Starbucks
(02:54):
under assault now by a Chinese coffee company starting in
New York, vastly undercutting prices. So you'll see this throughout
and it is a light motif these trade deals and
the fulcrum of kind of pushing back against China, limiting
China's ability to try to use industries and sectors to
(03:17):
frankly hollow out and destroy industrial capacity in the West.
Speaker 4 (03:21):
What have we learned from both the Japanese deal and
the EU deal in terms of the structure of the
sustainable trade conversation going forward? Is it the fifteen percent
is a new floor and that you have to have
some sort of investment fund alongside that. The details of
which haven't really been disclosed on either side.
Speaker 3 (03:38):
I tend to go outside in on this instead of
inside out. What I mean by this is I think
I think markets, and I've said this many times on
this program, I think markets are focusing entirely too much
on tariffs and entirely not too much on the broader
benefits of the rest of Trump trade and trade policy
(04:00):
and tax policy, whether it be the tax bill and
the variety of things that are that are coming from
that or these trade deals, and how they're trying to
reorient in ways that frankly continue and expand investment in
the United States as a compliment to onshoing and reshoring
in critical critical industries, as Secretary best and puts it.
Speaker 4 (04:23):
In fairness, though, stops are at record high. So if
you're reaching record high after record high and what capacity,
are you saying that markets are not aware of some
of the positive benefits from this, Well.
Speaker 3 (04:33):
I'm saying that they haven't been, first of all, And
second of all, I'm saying that there's there continues to
be a focus on tariffs as a negative without the
countervailing positives and attached. Certainly, markets had gotten over a
lot of the tariff shock in the last quarter, and
you know got past the idea from the conventional wisdom
(04:55):
that this was going to cause a hole in the economy. Now,
what your situation is, Steve put it very well in
the last segment, is you've got a variety of hoops
that have been jumped through all of what your market positives.
And now we're turning to for example, the FED this
week as well as earnings to see if the proofs
and the putting on that.
Speaker 2 (05:15):
Side the narrative has changed quickly. Let's put it that way, Terry,
appreciate your time. Terry Haynes. There of panchee policy. Steve
Reshoot of Mazoo with a bullish forecast for Friday's payrolls report,
calling for one hundred and forty thousand jobs to be
(05:35):
added and expecting the unemployment rate to tick up slightly.
Steve joined us now for more Steve Goomonic, good morning.
Some of the times that maybe one forty is called bullish.
Now for the labor market, what's changed, Well.
Speaker 6 (05:46):
You are further into a business cycle. You do have
a labor market shortage. You do have a very very
tight labor market, so it's hard to continue to add
large scales without causing a certain amount of disruptions and
a dramatic rise in wages, and I think companies have
been resistant on that. I also think there's a bit
of a technology shift taking price, and I don't think it's
all the AI, but I think it's further adopting of
(06:07):
the traditional types of technology that we need to do
things in the service industry with more and more kiosks
popping up everywhere, and I think that helps the situation
as well. So we're supplementing labor or get a little
bit with capital where we can.
Speaker 4 (06:22):
You have some people like Chris Waller, governor who's expected
to send the first ascent on the Federal Reserve since
nineteen ninety three, potentially on Wednesday, coming out and saying
he's seeing cracks, he's seeing signs that there is instability
in the labor market. Do you reject that wholesale or
do you just say that that is something that comes
along with the changes in technology and demographics.
Speaker 6 (06:41):
Well, I do reject at wholesale because what we see
in terms of the claims numbers, what we see in
terms of the continuing claims numbers leave us in an
environment in which you know there's a healthy labor marketing environment.
We see no evidence whatsoever in the data that's less
likely to be disrupted by any kind of flow differentials.
(07:02):
We also seen in terms of the Jolts numbers, which
I don't particularly like, but the FED seems to like
in terms of hiring quits going back up, in terms
of hirings being healthy, in terms of job openings going
back up. So I don't see where there really are
cracks in the labor market. It's a traditional slowing that
takes place as you get this far into an environment.
And oh, by the way, adjust it for how tight
(07:23):
the labor market fundamental he.
Speaker 4 (07:24):
Is, given the fact that we do see some sort
of slowing at least at the very least, Is there
anything inflationary about this labor market? Is there anything about
wage growth that would give you confidence that we could
see more than just a one time price adjustment from tariffs?
Speaker 6 (07:39):
Oh, I think you grew up going towards a three
percent inflation rate, and that's part of the issue. I
think it's from a labor market tight standpoint, I don't
necessarily have to talk about tariffs to tell you I
think we're going to three percent inflation, and I question
whether or not tariffs themselves will be reflected in prices substantially,
because you look at quorter margins, they're very, very wide.
(08:01):
You look at exporter margins with the dollar going down,
you've got that benefit coming through a little bit of
goods prices. We've seen given the fact that the dollar
is depreciated six or seven percent in the last year,
and not surprising you see a little upward movement in
prices that would typically just take place from the currency standpoint,
and actually it's not even keeping place with the currency standpoint,
(08:23):
because global deflation is real. And that's the other thing
that's offsetting and helping the exporter margins widing, because as
China dumps all its goods everywhere else in the world,
these people are sitting there with their run material base
starting to get cheaper, and therefore they could absorb the
margins where and China is dumping goods everywhere that they
can't dump here anymore.
Speaker 2 (08:42):
Other capacity is a massive issue, particularly for the Europeans.
That's for sure. You said something really interested that we
need to unpack the labor market might be a reason
to be hawk issh still, Governor Walla was in your
seat a week two weeks ago. I made the case
the labor market is increasingly becoming a reason to be dumbished.
So I just want to give you some time. What's
happening in the labor market right now that you think
(09:03):
is going to keep them on the back foot.
Speaker 6 (09:05):
I think the fact that the unemployment rate is not
going to go higher. I think the you know, movement
to four point two, we've been there and they've done nothing.
But I think when you look at the fundamentals of
the labor market and what will drive that unemployment rate
up a little bit, you can discover that it's positive science.
An expansion in the labor force from not having expanded
for two months in a row. That's going to be
(09:25):
the kind of thing that you know, gives you an
environment where and that's probably going to wind up in
a little bit increase in unemployment. Temporarily, you're going to
wind up in an environment where it's a healthy expansion
in the labor market help you up with adjustment in
the unemployment rate. I don't think there's cracks in the
system when I look at the earnings numbers. You know,
my earnings revision tracker is now positive after being negative
(09:46):
for weeks on end, It's now been positive for three
weeks in a row. Companies are revising up earnings. We're
at ten point nine percent for this year, thirteen point
nine percent for next year. These are solid earnings numbers.
These aren't kind of an earning number of peop will
sit back and say I have to scale back on
employment dramatically. I think a lot of the announcements that
you're picking up on in the labor market are taking
(10:07):
place in states where you're required to announce the layoffs,
but you're not required to announce the net hirings, and
I think that becomes part.
Speaker 5 (10:15):
Of the problem.
Speaker 6 (10:15):
It's selective decision to look at the information. And this
is a confirmation bias I think comes from the dots.
If I were to drop Jonathan Ferroll out of an
alien spacecraft, you had been studying the Federal Reserve for years,
you'd been studying the US economy for years, but you
didn't know any about the dots, and I dropped you
in Arizona right now, Okay, you would come out of
(10:35):
that spacecraft and you would be like, Oh, the FED
shouldn't be cutting rates. But everyone else says the Fed's
cutting rates. Why because the dots are there, so everyone's
biased by the dots.
Speaker 2 (10:44):
Other people might cherry peck some labor market data. Right now,
at least, I've talked about a few things. Entry level
hiring not great at all, job switches not getting that
boost to pay. You talked about the labor market and
the tightness there, sufficiently tight to generate stronger pay rolls growth,
stronger wage growth. It keeps this FED reluctant account interest rights.
Speaker 6 (11:02):
We've got an hoarurwly earnings number of zero point four percent.
That's again consistent with a four percent rise. A four
percent rise is consistent with three percent inflation. FEDS targets too.
We're a two point seven our estimate for the upcoming
PCE deflator. There's seven tenths off the mark, three tenths
closer to my number, seven tenths away from their number.
I'm sorry. I think they're not in the position to
(11:23):
cut rates. And if they were to cut rates, I
think it would be a mistake. And I think you'd
discover exactly what happened last year when they cut rates,
and that is the long end of the curve. Would
sell off, so it would be a bear steepener.
Speaker 4 (11:35):
Which at a certain point is the reason why people
are also looking to the auctions. Sorry, I had to
say that I've been ormissed. There are auctions today and
tomorrow two year, five year, and seven year notes, but
also the Treasury refunding announcement that comes on Wednesday, when
maybe we get a sense of whether any of this
will matter for the US government's dep financing costs because
maybe they'll issue everything in t bills and just retire
all of their coupon all of their treasury bonds. I mean,
(11:57):
how much are you looking at that to really understand
exactly how this Treasure Department is going to manage this
and whether it's going to have any market immifications.
Speaker 6 (12:06):
Well, I think there's lots of reasons to expect bill
issue sizes will go up. Back when I began, which
was ancient history in terms of the markets, one of
the things I had to do was estimate the treasuries
operating cash balance. So I had to figure out financy
and I had to figure out the net cash flows,
and we assumed every single quarter a third of all
the net new money would be raised in bills. That's
(12:28):
not happening now. So yeah, there's more bill issuance coming
relative to coupon issuance.
Speaker 4 (12:32):
When you came in, you said that there's something else
that you're looking for.
Speaker 6 (12:35):
Stable Coin is something that I'm going to be looking
to see whether or not Treasure Secretary of pressent a
if he's back from his overseas trip and talks further
about stable coin than he did at the May Were
funding announcement, And he made a statement at that point
in time that I think get stuck in a lot
of people's minds. And I visited a lot of accounts,
and some of these accounts are very, very interested in
the whole stable coin concept and where do we go
(12:56):
with stable coin and how much of it will be
financed through bills, And he talked about two trillion dollars
market cap. You look at stable coin now, it's about
three hundred two hundred billion dollars. So that's telling it
there's a long way to go. And I question whether
or not if you wind up with it being done properly,
if you want it, For example, the Federal Reserve issuing
(13:17):
its own stable coin, could you then be in a
situation where we might actually replace a lot of our
electronic transfers of wires and replace the swift system with
something more simple and less costly for the end result user.
And know the banks don't want this because clearly it
influences a business they make a lot of money on.
But clearly the end user wants it. I can imagine
(13:39):
a place like Walmart, Target, Boeing, these big people, these exporters,
these importers, all sitting there saying, you know, this would
be great.
Speaker 5 (13:46):
It reduces my costs.
Speaker 6 (13:47):
I really think we have to do this right now.
We've got lots of stable coins going in different directions
and trying to do different things. If we could find
one way of unifying it and putting them all on
one network, creating it all in terms of one large
ability to do it, for example, with a treasury coin
hosted on a Federal Reserve website, I think you can
get a very fast adoption of the technology.
Speaker 2 (14:10):
You think it leads to increased tea build demand.
Speaker 6 (14:12):
I do think it leads to increased tea build demand,
because I do not believe it'll affect currency in circulation,
which affects the rest of the Federal Reserves portfolio. Currency
in circulation is a percentage of the economy's percent of
financial transactions is not going down. Yes, a lot of
the currency in circulation is outside the country, but we
still have the currency that's in circulation once up outside
the country. But we do have as a result of that,
(14:34):
the big federal reserve portfolio, and I don't think it changes.
So Yes, what happens in terms of stable coin, I
think will be a net new demand.
Speaker 5 (14:40):
Interesting.
Speaker 2 (14:41):
Happy to catch Shelby this morning Church a lot of
the audience Ryan and as well Steved shouldov missoo, I
have an a tremendous yes, so far dead on so
far this year on a lot of issues. Well, it's
nice watched football league making its way across the Atlantic.
The English Premier League is playing six matches for sold
(15:03):
out crowds in New Jersey, Chicago, and Atlanta this summer,
the series kicking off this past weekend with Manchester United
beating West Ham joining us. Now, I'm very pleased to
say the CEO of the English Premier League, Richard Master's
Richard and Monic.
Speaker 5 (15:16):
Good morning, thank you for having me.
Speaker 2 (15:17):
Welcome to the studio here in New York. It's going
to see you, sir, let's just talk about your involvement
in the sport. I think it's almost twenty years of
direct involvement with the Premier League. Are you surprised by
the amount of growth we've seen? Not in the UK,
forget all of that, the amount of growth we've seen
in America.
Speaker 1 (15:32):
Twenty years next January at the Premier League seven years
a CEO in December, what's the Premier League gets? Get
bigger and bigger and bigger and out here in the
US we've got a fantastic broadcast relationship NBC. We've opened
offices here in New York. We're committed to grow in
the game. About thirty percent of the US population not
interested in soccer or football, and about two thirds of
(15:53):
those followed the Premier League.
Speaker 5 (15:54):
And that's a brilliant foundation which to growth.
Speaker 1 (15:56):
Reason we're out here with six of our teams playing
matches to give our fans a taste to the Premier League.
Speaker 2 (16:02):
As a Britain New York I can tell you the
experience of NBC is amazing. I get to wake up
on a Saturday morning on a Sunday and I get
to watch absolutely everything. That's not the experience in the
UK with Sky. It's a very different experience. You only
get to watch so much. Why do we get to
see so much more through NBC than maybe fans in
the UK get to see at home.
Speaker 1 (16:23):
Well, in the UK, the matches between two and five
o'clock on a Saturday afternoon, which is the traditional time
to go and watch football in the country, aren't broadcast.
Speaker 5 (16:32):
So it's not just the Premier League. The FFL as
well aren't.
Speaker 1 (16:34):
Broadcast, and that's part of the decision we've made. It's
long term commitment to what's called Article forty eight. But
anywhere else outside of the UK, it's all three hundred
and eighty games throughout the season you can watch.
Speaker 5 (16:45):
And of course here in the US, as you.
Speaker 1 (16:46):
Say, there are millions of people getting up on a
Saturday and Sunday morning watching their favorite team and you
can sit there from seven AMS or lunchtime watch the
entire thing if you want to, And that's a brilliant
thing for us.
Speaker 4 (16:57):
Does it kind of hurt your soul to say soccer
instead of football at all?
Speaker 1 (17:00):
I think they're interchangeable. When I grew up, I grew
up in the Midlands, I watched soccer Sunday on Star
soccer rather on a Sunday lunchtime, so it's interchangeable at this.
Speaker 4 (17:12):
Point, though, does it dilute the pelayer's ability to really
commit to not only a team but a season if
they're playing at all times in all places and their
bodies have to be exhausted at a certain point.
Speaker 5 (17:24):
Now that's true.
Speaker 1 (17:25):
I mean there is a starter of players at the
top of the game who are playing a lot, and
it's a big issue within the game. The Premier League, obviously,
since ninety four, has been twenty clubs to in gen
eighty games August to May, but we've seen the gradual
expansion of European competitions and now global competitions as well.
Speaker 5 (17:43):
Next summer, the US will host.
Speaker 1 (17:45):
The World Cup first time forty eight teams, and of
course in the last summer we've seen the Club World Cup,
a brand new competition put into the calendar. And I
think that from my perspective, not just as CEO the
Premi League, but also my other role as chair of
the World League's Sociation, which is about representing domestic leagues
around the world, there has to be a big conversation
(18:05):
now about how you balance this out properly and make
sure that players are looked after and that these competitions
are additive and not subtractive from the competitions they bump into.
Speaker 2 (18:15):
Well, it's have that conversation right now. I can speak
as a fan. I hate it. I don't want to
see an expanded FIFA Club World Cub. In fact, for
most fans of the English Premier League, we get annoyed
whenever there's an international break. We don't want to see
more tournaments. What we loved was just the cadence of
every two years you had a major tournament. The Euro's,
the World Cup, the Euro's the World Cub. Why have
we gotten away from there? And what's your message to
(18:36):
FIFA to UEFA, as in the minds of many fans
they just seem to be chasing money, the expense of
the game and maybe the player's health.
Speaker 5 (18:44):
Well, the message is talk.
Speaker 1 (18:46):
You know that there is actually strong dialogue between domestic
leagues in Europe and New AFA about competitions and that's
a coalition of stakeholders, clubs, leagues, club players as well
talking about it. That dialogue doesn't happen at all for
the game and it should do. So that's the key message.
Sit down and talk to the leaguees, talk to all
the stakeholders and find a way through all of this,
(19:07):
because it has a limit and I think we've gone
past it. We've gone past saturation point. My job, obviously
is to look after the Premier League, and we're going
great guns, thank you very much. And I want the
purity of that competition to remain. I want people to
be able to enjoy that, enjoy their football because I
want the best players on the pitch all the time
in the Premier League and not worrying about how to
(19:28):
balance everything out.
Speaker 2 (19:29):
Let's talk about the purity of the game. It's a
polarizing topic and very controversial, as you know, Manchester City
in this number one hundred and fifteen the number of
charges for alleged breaches of financial regulations. What can you
share with us this morning about where things stand.
Speaker 5 (19:45):
Nothing is the honest truth.
Speaker 1 (19:48):
The case was heard last year and we wait for
the decision to be made. We can't hurry the people
whose job it is to make that decision, and it
will happen when it happens, and I don't know when
it's going to be. We'll find out with everybody else.
Speaker 2 (19:59):
What's your se of why it's taking so long.
Speaker 5 (20:01):
I don't know, and it's difficult for me to speculate.
I'm sorry.
Speaker 2 (20:04):
It's just difficult for a lot of people in the
game who follow the game to see how quickly things
concluded with a club like Habitat and how long it's
taking with a club like Manchester City. And some people
can't help but conclude that maybe different clubs are being
treated differently because of these status they have in the
Premier League.
Speaker 5 (20:20):
Yeah.
Speaker 1 (20:20):
Well, I do want to sign of frustration and share
some of those but in the end, this process is
very different.
Speaker 5 (20:27):
These allegations are very different. Makes it different too.
Speaker 1 (20:30):
They just said that the charge themselves and the number
of them, but I can't really get into it.
Speaker 5 (20:36):
I really can't talk about and you.
Speaker 2 (20:37):
Can't get into the details. But do you think it's
hurting the reputation of the league?
Speaker 1 (20:41):
Well, at the center of this is a football competition,
and I think people want to basically watch the football.
Speaker 5 (20:48):
That's the main event.
Speaker 1 (20:50):
And when you get dragged into whatever it may be,
financial affairs, I think people think that maybe there's something
going wrong here. I do accept all of that. The
competition remains strong, the economics, the primileague remain strong and fundamentally,
as long as we can put the best players on
the pitch and give people a fantastic competition, I think
(21:11):
we can get through this period.
Speaker 4 (21:13):
I've been an outsider and I've been studying the rules
of the game and the sustainability rule that kind of
led to this investigation into Man's City and this idea
that a club has to bring in and just spend
the same amount of money that it brings in. Do
you think that that rule has become outdated or unenforceable
in any kind of real time way.
Speaker 5 (21:34):
So, if you're talking.
Speaker 1 (21:34):
About the financial regulations within football, our clubs are all
really subject to two sets of regulations, our own, the
profitable and sustainability rules and also u waifers rules, So
they're looking at two sets of financial rules to comply with.
And essentially in England our rules are there. It's a
spending rule really about profitability. So there is the ability
(21:56):
to invest and that's what we want our clubs to do.
We've got a fantastic set of owners that invest in
the stadiums, in fan experience and players on the pitch,
and that's what we want. Whatever, as I said, the
great set of owners that want to invest, and so
there has to be a limit ultimately to ensure they've
got a competitive league, which we do have.
Speaker 5 (22:14):
So I think we're known as look at investing in
the Premier League.
Speaker 1 (22:17):
They can see that you can aspire to do better
in the league and now seeing more clubs qualifying for
European competition. Our clubs are in incredibly successful in Europe
and that's all down to investment. So there has to
be a limit ultimately on what you can spend. Clubs
have all signed up to these rules and we are
enforcing them.
Speaker 4 (22:34):
Well, how much does the Saudi League really kind of
I don't know, skew the financials of this in a
way that creates a sort of complicated dynamic.
Speaker 1 (22:43):
Well, the Saudi League is an investment phase. Sally League's
been around for many decades and now we're seeing local
investment into that and they're becoming very active in the marketplace.
Sometimes that good for Premierley clubs. Some sids they take clubs,
take players that Premi leagu clubs want to sign. It's
just a new dynamic and we have to observe it
and we have to cope with it.
Speaker 2 (23:04):
Richard, you'll be generous with your time. We appreciate it.
Thanks for dropping by, Thanks for having me, Thank you
very much for being here. Richard Masters there the English
Premier League CEO. This is the Bloomberg Surveillance podcast, bringing
you the best in markets, economics, and giot politics. You
can watch the show live on Bloomberg TV weekday mornings
from six am to nine am Eastern. Subscribe to the
(23:25):
podcast on Apple, Spotify or anywhere else you listen, and
as always on the Bloomberg Terminal and the Bloomberg Business
out
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.