Traders React to the Jobs Report as Tariffs Sink In

Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyApril 4th, 2025
Featuring:
1) Claudia Sahm, Chief Economist at New Century Advisors, Neil Dutta, Head: US Research at Renaissance Macro Research, and Jamie Patton, Co-Head of Global Rates at TCW, react to today's jobs figures and discuss the outlook for the Fed and Jay Powell. Traders have increased their expectations for the Federal Reserve to cut interest rates this year, with money markets now showing 100 basis points of reductions by year-end.
2) Dan Ives, Global Head of Technology at Wedbush Securities, discusses the "worse than worse case scenario" tariff announcement as it relates to tech. President Trump announced sweeping tariffs on imports from virtually every US trading partner, affecting tech companies like Dell, Apple, Sonos, and HP. The tariffs will increase costs, slow demand, and strain global supply chains, with levies ranging from 10% to 46% on imports from countries like China, Taiwan, and South Korea.
3) David Blanchflower, economics professor and labor economist at Dartmouth University, on labor and wages in a high tariff America. As tariffs set into the American economy, it's unclear how they will affect wages and the labor market. It comes as Republicans are considering creating a new tax bracket for those earning $1 million or more, with a top rate of around 39% to 40%, to offset the costs of their tax bill.
4) Gautam Mukunda, professor at Yale University School of Management and Bloomberg Opinion columnist, on the short and long-term political impact of tariffs. It comes as a new poll shows President Trump's approval rating slipping ahead of his tariff announcement.
5) Lisa Mateo joins with the latest headlines in newspapers across the US, including the Wall Street Journal story on the domino affect from the trade war and the New York Times' look at the grocery aisle and the impact of tariffs

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple CarPlay or Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch

(00:25):
us live on YouTube.

Speaker 2 (00:27):
Claudia Sam, yesterday in front of sixteen hundred people at
the Marriott Marquis, we had a fantastic panel and they
mentioned Claudia Sam. She is definitive on rational analysis of
the American labor market out of Michigan Chief Economists, News
Centery Advisors joining us.

Speaker 3 (00:47):
Now, Claudia, you write that the.

Speaker 2 (00:49):
Some rule triggers at four and a half percent. How
distant are we from a four and a half percent
unemployment rate?

Speaker 4 (00:59):
So I think we're unths away from seeing that unemployment rate.
It tends to take time for it to build. Unfortunately.
I think that is where we're headed here, so we
could see something like that in the second half of
the year.

Speaker 5 (01:12):
Claudia, the question I think for a lot of folks
here when we look at this data here today on
the jobs, and it's not going to give as much
of a hint to the way employers are thinking about
the job market today post tariff discussion, But what will
you be looking at it?

Speaker 4 (01:25):
Today's data, right, So you know today's data matters. This
employment report matters not because it tells us what's going
to be the effect of all the administration's policies, particularly
with the teriff policies that we learned about this week,
But it is a policy happens in a macroeconomic context.
We need this labor market to be as resilient and

(01:48):
strong as possible to help workers and households whether this
storm is coming. That was absolutely crucial. We in twenty
twenty two or twenty twenty three, we're economous. Many were
saying session is coming, recession is coming. We had some
big policy changes fed raising interest rates, Inflation was high.
We did not have a recession, and a key to
that was we had a very strong labor market that

(02:09):
buffered it. So it's really important this context going in
even if the policy effects aren't there today.

Speaker 2 (02:16):
Clauda Danny blanche Flower up at Dartmouth's just mentioned your
name in awe over the Michigan approach to listening to
non experts to the Michigan conference numbers.

Speaker 3 (02:27):
In all that his.

Speaker 2 (02:28):
President Trump broken the labor and investment confidence of America.

Speaker 4 (02:36):
Well, and I will say Danny's done excellent work using
those expectations surveys, but Michigan survey the conference board to
really get a sense of is a recession coming? So
the song rule was a lot about is one here?
But he's done a lot of work on what is
one coming? And take those the sentiment surveys very seriously,
and it's ugly right now. We had an ugly period
a few years ago too where people were very downbeats.

(02:58):
But again we're back in place where people are telling
us and business is too. The outlook is pretty grim.
And that's even before I mean that's last month surveys, right,
that's not even this week's survey. So it's you. It
can be hard to interpret those data. Sometimes they can
lead us astray, and yet like there are real policy
tatas happening. And one thing with this little book Salt Data,

(03:21):
is you can look into the future and give us
that cuit.

Speaker 3 (03:23):
You can.

Speaker 2 (03:23):
Claudia, stay with us, please, We're going to go to
doctor Sam here after the data. Neil Dutta waiting on deck,
who's been brilliant again. Duta talking with Krugman. Professor Krugman
will join us next week at some point, Claudia, completely
unfair for you to go granually here on the jobs report.

Speaker 3 (03:40):
We'll let Neil Dutta do that. But do you take
us three?

Speaker 2 (03:43):
I mean, Jason Furman's go an ecumenical, honest with seven
moving averages.

Speaker 3 (03:49):
What does Claudia Sam do?

Speaker 2 (03:50):
Do you look at the two months, the three months
with revisions, the six month moving average, which matters to
you on non farm payrolls.

Speaker 4 (04:00):
Right, well, you definitely don't want to focus on just
one month of data. Three month moving average is a
good place to start. I will say, though, I'm the
employment report in general, you just want to breathe it
all in, right, like, you need to look at this.
You know, the payrolls, this is good. That was a solid,
solid red even with the revision unemployment rate. We don't
like to see it taking up on utilization. So I'd
say this is kind of a mixed bag. That the

(04:22):
wage pressures aren't there, so at least we're not, you know,
pulling in another inflationary impulse here. So I think, you know,
generally this this looks a lot like what we've been
seeing from this labor market, which is it's in a
good place, but it's not it's not the like firing
on all cylinders that we would need to, you know,
go up against some of these shoes.

Speaker 3 (04:43):
And Paul, you're going back and forth with jer own Powell.
I mean, this doesn't move the needle for the fat doesn't.

Speaker 5 (04:48):
I'm not sure we'll see soon though. But Claudia here,
how do you think, maybe let's just say, how do
you think the labor market's going to evolve for the
remainder of the year, giving some of this uncertainty that
that's number brought into the accon outlook with all these tariffs.

Speaker 4 (05:03):
Well, so I think the labor market is going to
get on a slowing trajectory. The thing is, it's one
of the it's one of the last places where this
shows up. We're going to see prices start to move
up pretty rapidly, and then you see consumers pull back,
and then you see you know, employers go from not
hiring as much to not as many hours, and then
they start laying off and then you know, it takes
time for this to move for a shock like this

(05:26):
like these tariffs, to move their way through the economy,
and if if you wait until it shows up in
the higher unemployment rate to do something, they like to said,
you waited until we're passed. So I think that's you
don't want to look here first the labor market, but
the trajectory is not encouraging the policy.

Speaker 2 (05:45):
Changes, Claudia, to the silliness of the sum rule. And
you've been very good about you know, the people speaking
with sorted to trying to crystal ball or recession. Nobody knows, Claudia,
where we are may second the April report June sixth,
the main report, where would you guess the labor economy?

Speaker 3 (06:05):
Is the fourth of July?

Speaker 4 (06:10):
Oh goodness, you know the answer to that question is
going to change so much on what the administration says
the next few weeks. Right, it really can't be underscore
how like the duration of the tariffs, the bread like
do we have retaliation. I mean, again, the outlook is
not good, but it's like that that is going to
be so important, and that is that's such a wild card.

(06:32):
So I'll put a direction of imp unemployment rate will
be higher.

Speaker 6 (06:36):
I don't know that we're four and a half at
that point, but I think that's that's the direction we're
headed unless there is a real pivot on the policy
coming out of the administration.

Speaker 3 (06:48):
Doctor Sam, thank you so much. Claudia Sam.

Speaker 2 (06:50):
We are honored to have you on each and every
labor David New Century Advisors, of course, definitive at Michigan
and the Federal Reserve. Neil Dunda with us number of
days ago. Generous of him to come back on this
job's day. He's with Renaissance Macro. Neil, let's start with
how you dovetail your work with Jeff de Graf on

(07:10):
the markets over at Renaissance Macro. Is the Neil Dutta
world such a mess that the graph freezes, goes to cash,
takes a hyper defensive position.

Speaker 7 (07:24):
I mean, I think, you know, Jeff is always looking
for opportunities and you know, trying to look under the
hood to see what other people aren't seeing. And I
think he continues to do that, so you know, I
think it's times like this he's looking for, you know,
tentative evidence of a bottom the.

Speaker 2 (07:43):
Job's day four point two percent. I guess a vector's
in place. Claudia Sam speaks of an important four point
five percent. I asked us yesterday at the game for him,
Neil Dott I would have asked it of you, do
you frame out a five percent unemployment rate given the
festivity in the rose garden.

Speaker 7 (08:03):
I don't know about five percent. But we're going up,
I think, you know, I think we've been going up
for a while. Obviously, given the shock to financial conditions
that we've seen in recent days, that view is just amplified.
But consumers have been telling us that things are getting
worse for a while. So I had been largely expecting

(08:27):
a fairly linear increase in the unemployment rate. I mean
you basically have you know, ongoing layoffs. I mean they've
been coming up modestly. The hiring rate has been very
very sluggish, and rates of job finding are low, and
so when you that combination, it you know has gotten
us a fairly linear increase in the unemployment rate. The

(08:48):
risk now, I think is a more nonlinear increase in
the unemployment rate because of what's going on. That to
me is the risk that we need to be concerned about.
You know, hiring rates are probably be going to weaken,
and you know, at the margin, I would say layoffs
are getting worse because you know, I mean just tariffs,

(09:09):
I mean it's like it's like anything else with trade.
I mean, the you know, the benefits are widespread with trade,
the costs are very localized, and tariffs it's the opposite.
So the costs are spread out, the benefits are localized.
So you know, my sense is that it's hard to
argue that the shock to financial conditions won't you know,

(09:33):
have some spill over into the into the real economy.
And so you know, I think it makes sense to
a pencil in a higher unemployment rate forecast.

Speaker 3 (09:41):
Right going forward.

Speaker 5 (09:43):
So Neil, I know the administration labeled their tariff day
Liberation Day, but I see in your note happy obliteration
a day here. So walk us through the math here.
Given the numbers that we do, know, what do you
kind of run through your model that could be a hit?

Speaker 3 (10:00):
Do GDP as we give a wope?

Speaker 7 (10:02):
You know, well a lot of these models, I mean
if you game out like I mean, wherever the effective
tariff rate was before and what these new tariffs imply.
I mean you're talking about an effective tech tariff rate.
Basically that's like customs duties revenues as a share of
our custom you know, as a share of imports. I
mean you're basically talking about, you know, something close to

(10:25):
twenty five percent based I mean by our calculations, you know,
that represents you know, a little over I think a
one percentage point shock to GDP. So I think that's
kind of where, you know, how most of these calculations
are coming about. I would argue, though, that these calculations
understate conditions, you know, the hit to some extent, because

(10:49):
you're just looking at a direct cost. You're not You're
not sort of including like what is their ramification to
corporate confidence, household up confidence, you know, and sort of
the l over and not on effects. And I think,
you know, that's why I think it could be even worse.
But you know, I mean if these stay on, I mean,
this is basically a recession like outcome for the US economy.

Speaker 3 (11:08):
Neil dan Ives was in earlier.

Speaker 2 (11:11):
He suggests Big Tech will pull all guidance forward in
their conference calls. How in God's name do you take
an Excel spreadsheet and get the Dutta crystal ball out
past the vicinity of April fifteenth?

Speaker 7 (11:26):
I don't, I mean, you know, to me, we're all
just guessing at this point. Maybe you should have a
game theorist, come on with you, Tom, that would probably
be the best, the best person to interview. I mean,
we sort of see these things on our international trade courses,
looking at, you know, the the.

Speaker 8 (11:45):
Dynamics of a trade war. Right.

Speaker 7 (11:46):
This is sort of like the classic prisoner's dilemma, and
we're kind of going through it, right. I mean, we're
seeing the part where you know, you see both sides
retaliate and you're at the worst outcome, and that seems
to be what we're getting. And you know, I do
think it's interesting. I mean, this is sort of going
a little bit beyond my wheelhouse, admittedly, but I found
it interesting that the administration said it was wise for

(12:08):
other countries not to retaliate because this would be some
sort of cap And yet what do we see this morning.
China retaliating and I think Europe is probably next. And
if that's the case, you know, I think you have
to really cross your fingers and hope that the White
the White House won't also retaliate. But you know, I'm

(12:31):
not really holding my breath best.

Speaker 2 (12:32):
This is great in man Q, macroeconomics is one one
of your pages. Alan Blinder, fifteenth edition, fifteenth edition, Chapter fourteenth,
Paul is cross your fingers.

Speaker 5 (12:43):
So, Neil, one of the things that's I guess concerning
me in addition to you know, kind of the math
you ran through about a what a terrafrate of twenty
five percent? What that would mean for GDP. It's just
the it seems like noticeable, noticeable decline in confidence, both
consumer confident and corporate confidence. How do you factor that

(13:04):
into kind of economic growth and maybe inflation expectations.

Speaker 7 (13:08):
Well, I mean it's it's it's the it's for consumer confidence.
It's the speed of the decline, right that, That to
me is the big concern. I mean, consumer confidence has
been quite sluggish for a while. You know.

Speaker 8 (13:21):
Look, I mean.

Speaker 7 (13:23):
This is a this is a shock to the economy,
right like, So it's basically growth will slow down and
reset at a much lower level. I think, what this
what what you're going to see is basically, uh, the
high end consumer, which has been the core source of
support for consumer spending over the last year, they are
going to jack up their savings rate.

Speaker 8 (13:45):
As a result of this.

Speaker 7 (13:46):
I mean, you're you're in a situation now where stock
prices are going down, right. The elevated level of stock
prices is one reason why net worth was rising relative
to income last year, which is why consumer spending was
so strong because people drew down their savings as a result.
You have the opposite situation now, So what do you
think is gonna happen with the savings rate?

Speaker 8 (14:04):
It's gonna go up As.

Speaker 7 (14:06):
A baseline, consumer spending wasn't gonna be really much stronger
than one and a half percent right now, because that's
where real income growth has kind of been tracking net
of transfer. So we've already seen quite sluggish income.

Speaker 3 (14:19):
So even a.

Speaker 7 (14:20):
Stable savings rate gets you that if the savings rates
going up, you're gonna have something weaker than that. So
you can see already how it's very challenging to get
to a anything better than really the best I can
come up with is like a below potential growth environment.

Speaker 2 (14:35):
Still, so maybe this job's day wasn't what's to come
in May and June and on forward. In some of
the gloom again, a four point two percent unemployment rate,
But Neil dudda on April ten, when the red sacks
are in first place on April ten, I'm looking at
as CPI report, is.

Speaker 3 (14:54):
That move is lagged?

Speaker 2 (14:56):
Is the unemployment rate. Are we going to see stagflation
CPI here in six days?

Speaker 7 (15:04):
I mean, I think there's I mean, there may be
some possibility that the inflation number surprises to the downside,
in my opinion. I mean, you do have some you know,
some improvement in some of these areas like eggs and
so forth. I mean, you probably haven't yet seen the
upward movement in car prices just yet. Write what we
know about auction prices suggest that maybe car prices come

(15:26):
in a little bit, so, you know, March might be
an okay month for inflation, and normally I think that
would probably give the Fed, you know, some rope to
cut or think about it. But it's all about the
outlook now, and you know so so the data doesn't
really take on that much.

Speaker 3 (15:47):
What are you going to write about this weekend?

Speaker 2 (15:48):
Paul Krugman just email being says, ask Donna what he's
going to write about.

Speaker 3 (15:52):
What are you going to write about this weekend?

Speaker 7 (15:53):
Neil, I'm going to write about how I think the
economy was slowing, you know, going into all this trade
war stuff, and that means that the administration doesn't have
as much buffer as they thought they might have earlier.
I mean, you know, we talk about two twenty eight
on non farm perils today. I mean the revisions, I

(16:13):
think are what's important, right, That's where you have the
most confidence. Right. So the fact that the revisions were
down fifty thousand tells me that they didn't get as
strong of a hand as they thought they were dealt.
And you know, arguably, you know, this March number was
just a payback from weather right in January and February.

Speaker 8 (16:31):
So the underlying trend is actually somewhat weaker.

Speaker 2 (16:33):
So if they if they are, even Paul's been brilliant,
and as Jerry Morian Senator Mariana Kansas was just out
on CNN, people are basically saying, where are the Republicans?

Speaker 3 (16:43):
Paul? You mentioned this this morning, Neil Dadda.

Speaker 2 (16:46):
If this goes away, do you sense that our trust,
our confidence in our American exceptionalism is damaged?

Speaker 8 (16:58):
If what goes away?

Speaker 3 (17:00):
I mean yeah, if the tariffs go away.

Speaker 7 (17:06):
If Trump tariffs go away, that means that I mean
that basically means that the president isn't as politically, I
mean that basically it's a it's a political nightmare for him, right.
I mean, if you're if you're betting on on that.
I mean, I don't know, Tom. I mean, I think

(17:26):
to me, I wrote about this quickly this morning. I
think he believes he was spared an assassin's bullet to
do what he's doing. So why does anybody think he's
going to be backing off anytime soon?

Speaker 3 (17:38):
This is what he believes.

Speaker 2 (17:39):
It's a part.

Speaker 7 (17:40):
Of his political identity if he if he backs off now,
that's an uncontal surrender, which makes him basically impotent politically
going forward. I mean, it's too soon for that to
happen in my opinion.

Speaker 2 (17:50):
Neil, thank you so much, and as thank you President
Trump for listening to surveillance this morning.

Speaker 3 (17:55):
Paul and I got to take a break. Paul's going
to bring her in.

Speaker 2 (17:58):
Jamie Patton is out of TCW and Los Angeles. Every
time she speaks, I learned something, of course, maybe in
this crisis will learn something.

Speaker 5 (18:08):
I want to learn what her when.

Speaker 3 (18:09):
Do the Dodgers lose exactly?

Speaker 5 (18:11):
I want to learn what her favorite sandwich was at
Hogie Haven in for instance, she spent some time there.
Jamie Patten, co head of Global Rates at TCW, joins us, Jamie,
what do you make of kind of what we're seeing
out there in your market, the treasury.

Speaker 9 (18:24):
Bond market, it's been busy. I think obviously risk markets
are very disappointed by all the tariffs, but treasuries are
great again, so.

Speaker 7 (18:36):
We love this move. We were much.

Speaker 9 (18:40):
More confused by the initial reaction to a Trump presidency
and tariffs and anti immigration and all of that. That's
there's nothing surprising about this. Tariffs are bad for growth,
they're bad for the consumer, they're bad for the economy.

Speaker 4 (18:54):
They're bad.

Speaker 9 (18:55):
So this is the right market reaction. I'm a little
confused why it took so long. It's like the market
didn't believe what Trump was saying until not even Tuesday.
Even when he said it Tuesday, it was really like
Wednesday that market participants for like, oh this is serious,
this is bad. But his whole campaign and all up
until now, he's been telling us what he's going to do.
So I think, unfortunately we need to believe him, which

(19:18):
is great for bonds and great for TCW. You know,
we've been long duration in the front end.

Speaker 2 (19:22):
What should mom and pop do here? Would their fixed
income take us away from geniosity? Jamie Patten and Princeton
and derivatives and mathewness.

Speaker 3 (19:31):
And all that.

Speaker 2 (19:32):
What do mom and pop do in fixed income over
the weekend?

Speaker 9 (19:38):
I'll tell you what I tell my parents to do,
because please get Allocating into fixed income is a great
idea right now, but you have to be really careful.
So how we're positioned at TCW, we're long duration. We
love that we're lightening up just because we don't call
tops and bottoms and we dollar cost average in and
out just to be prudent risk managers. But we're also

(19:58):
still very underweak credit. So you can be long fixed
income but also in an extra defensive position, but you
don't want to bleed out on carry. So at the
same time, you can be underweight credit, long duration and treasuries,
and then we're also long. We like agency mortgages. They're
basically government guaranteed. They should do well regardless of risk

(20:19):
on risk off. Maybe you have a little bit of
pain in the beginning of a risk off, but overall
their money good. So we like allocations to fixed income,
but you have to be careful. Don't just go all
into credit to pick up a few extra basis points.
This is not the environment to just pick up carry.

Speaker 5 (20:35):
So in terms of just kind of the market here,
talk to us about where you think. I'm looking at
the tenure here three point nine to two percent. Where
do we go here?

Speaker 9 (20:47):
I think we still go a little bit lower. The
ten yere is a good question because we still have
this dynamic of nothing has been done to improve the deficit.
We still have increasing term premiums and a lot of
treasury issuing, so the curve could easily go a lot steeper.
So if you're choosing your long duration position, we still
like concentrating that more towards the belly and the front end.
And what I mean better is choose and fives. But overall,

(21:10):
this is a bad situation. The Fed's in a terrible situation.
They have high inflation, but not the good inflation, not
the demand driven inflation, and they need to cool economy,
and then they have a terrible growth situation. They should
be a neutral, They should have been a neutral a
while ago. So we're watching a policy mistake happen. But
they're too scared to lower rates when they see scary
inflation numbers.

Speaker 2 (21:29):
As partly, it's off your remit, but I know you're
done at Michael's and Santa Monica doing this. I mean
at TCW, are you modeling in an aggressive FED of
three and four rate cuts this year? I mean, I
know it's not your game, but con you're talking about it, Jamie,
are you doing that?

Speaker 9 (21:46):
It is my game. I love telling people what to do,
whether it's my job or not.

Speaker 3 (21:50):
So I'm shocked me.

Speaker 9 (21:53):
So we think these FED cuts it makes sense that
they're priced or they're pushed out the curve, but we don't.
They'll be priced out. So as the FED cuts get
pushed a little bit further away, they're going to have
to cut more and faster. So if they had been
a little bit more conservative and kind of gotten back
to neutral when we think they probably should have, which

(22:13):
was over the past few months, then they wouldn't have
had to cut as much. But they're going to wait.
They're going to be too high for too long, and
then it's going to be a larger than expected problem
and they'll have to cut more. That's why we keep
a little bit of our long even though we are
lightning up.

Speaker 2 (22:28):
Jamie Patton, TCW, thank you so much from the West
Coast early in our morning.

Speaker 3 (22:32):
Really really appreciate that.

Speaker 1 (22:39):
You're listening to the Bloomberg surveillance podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business Up, or
watch us live on YouTube.

Speaker 3 (22:52):
We're thrilled that Dan Ives could be with us today.

Speaker 2 (22:54):
Is not on a plane, not in a hotel room somewhere,
not watching Penn State in the Frozen four. He's here everyone, Dan,
I'm gonna cut to the chase. You and I have
been here before. Is the opportunity still there in mag
seven for the brave to acquire shares this morning?

Speaker 10 (23:14):
Look, I'd say yes and no. I mean, like tom
My view is like twenty five years doing this, and
we've told about this for decades. Here these are his opportunities.
In my long term view of tech, Trump tariff is
an economic armageddon if it stays in its current form.
In my view, it changes the whole tech paradigm from

(23:35):
a supply chain and from a growth perspective. And I
think that right now is the scary thing for the
long term. Of course, I continue to be bullish in
terms of these, but look, this is a black swan
event what he single handedly has done on a self
inflicted way.

Speaker 5 (23:53):
Dan, I mean, what do you hear from the folks
in Silicon Valley these days, because I mean made more
of a pilgrimage to support this president than Silicon Valley
going against you know, decades of history. They're not getting
much payback, are they?

Speaker 10 (24:10):
And I think that's to me like talking to tech
executives the last four to eight hours, that's just got
me more concerned because when you talk to them, if
there's some sort of broader plan and instead like they're
asking you what you think and they look, I come.
I don't think companies are gonna I don't think Apple's
gonna give guidance on it his call. I don't think

(24:30):
a lot of these techicoms are going to give guidance
because it is that uncertain, because the reality is, like god,
fifty four percent increase that would destruct ten percent of demand.

Speaker 2 (24:40):
Stillantis is out there with layoffs and windsor Ontario. I
think two three days ago, I got Microsoft at two
hundred and twenty eight thousand employees. Are you looking where
Nadella and his team? Look, these are the cards this
president delld us We're laying off six percent of our people,
thirteen thousand people.

Speaker 10 (24:59):
You have to assume and the assumption is it. It
starts with this is some form of negotiation.

Speaker 3 (25:05):
Okay, conversation.

Speaker 10 (25:07):
Again, if you if you take these tariff at there,
the way that they're laid out in that chart that
is really viewed as a comedy show, then it's an
economic arm Again. If the tariff's staining, it's coming forward,
and to some extent, I you're essentially including Silicon Valley
based on from a from a cost and supply chain perspective.

(25:28):
The reason layoffs won't happen is these tech companies gonna Okay,
let's see the next few months. Let's ultimately see how
the games played if this actually holds. And then but
if we're if we have these tariffs in place by
the summer, it's all bets off.

Speaker 5 (25:43):
So I think about some of these tech investments, says
A big ticket items, long term investments. I guess one
of the concerns is, boy, if I'm just an executive
in general and I'm thinking about making a multi million
dollars one hundred million dollar investment in some tech hardware software,
I'm going to sit back here.

Speaker 3 (26:03):
The stuff, the stuffhob ibo is delayed.

Speaker 5 (26:06):
Yeah, I mean, just as one, I'm just gonna step
back and self fulfilling profits.

Speaker 10 (26:09):
Yeah, and that and that's the word. And Tom I
would say, for every month that these tariffs are in place,
you take off another ten percent of demand in the year.
So right now you already have ten percent in terms
of what's already gonna be baked in. Ten percent number
cuts across the board.

Speaker 2 (26:25):
Mark from Los Angeles femails and Susstan ives about Apple.
We'll do that, Mark German right now. Okay, let's double
barrel it. They they're addicted to share buybacks. They cleared
out with this plunge. They come out, they release a
new announcement of share buybacks and they got as I
mentioned to Kathy Jones, they have to come out and
issue that now.

Speaker 3 (26:47):
Well, I.

Speaker 10 (26:49):
Do agree on that front that they'll they'll definitely go
down that route. My thing is that it would take
them three years to take ten percent of the supply
chain move it to the U and now it costs
sort happen. So the point is it's it's right now
about the supply chain and what this is ultimately doing.
But that's why for Apple, if you're a long term

(27:10):
shareholder and a long term investor, you own it if
you're a trader right now, it's a cleer to go low.

Speaker 2 (27:14):
Paul and I are expert analyzing Chinese supply chain dynamics
from where the Barrett michaels, So I think that's where
we do it. You actually go to China. What will
Tim Cook do in the tip for tap between US
and China? Does he increase labor in China?

Speaker 3 (27:33):
Does he pull away? Do they push Apple out?

Speaker 10 (27:37):
So first, a pushing Apple out is basically impossible. Remember
Apple at peak's second biggest employer in China when it
comes to iPhone demand. Look, the reality is that for
Cook and ironqicly the everything they moved to Vietnam, it's
actually hired tariff than China. So clearly this is where
that ten percent politician Cooke, nine percent CEO maybe goes

(27:58):
to fifty percent politics fifty percent. You know what types
of ultimately exemptions do they get in terms of what
they did in the US From an investment perspective. Munusian
talked about that as well. Do they get some sort
of breaks? And I think for Apple it just comes
down that they are not. Cook is not gonna change
the long term structural footprint of Apple because of these

(28:22):
head scratching tariffs the way they were laid out, and
ultimately to see how they play out.

Speaker 3 (28:26):
Dan Ies with Wedbush Kathy Jones.

Speaker 2 (28:28):
Earlier from Charles shap we welcome all of you on
your community across the nation, particular, good morning to ninety
nine and one FM and Washington heads spinning down there.
So sender Grassley of Iowa really fired up yesterday over
what are we gonna.

Speaker 3 (28:42):
Do about this? What we're gonna do is bring you
the conversation on this job day.

Speaker 2 (28:46):
Claudia Samnil Dutta with this later Kate Moore in the
nine o'clock hour, Paul swhen he continues with ives of webbush.

Speaker 5 (28:53):
Dan it realistically, when you talk to the folks in
Silicon Valley, what if any can production and the tech
supply chain can be brought back to the US in reality.

Speaker 10 (29:03):
In the next two to three years basically two percent.
Now I'm saying what you talk right, It would take
four to five years to build a factory from a
cost structure. iPhones if you built them in the US
would cost thirty five hundred dollars.

Speaker 3 (29:18):
Okay, you know what I'm saying.

Speaker 10 (29:20):
So the point is like every time, Like you know,
investors are when I'm in DC a few weeks so
that we get we need to buy them here, I'm like, well, look,
the reality is is that that basically burnt, like that
would basically be imploding Silicon Valley the way that it's
built to the core of the last forty years.

Speaker 2 (29:38):
Okay, over the weekend, they're gonna ca then the market
right now, future soaks down one thousand, make the Dow
futures down two thousand points.

Speaker 3 (29:45):
We're under forty thousand.

Speaker 2 (29:47):
Wow on Dow futures, the vics thirty nine point one seven,
the ten year yield we mentioned with Kathy comes in.
Where are we My eyes are failing me on a Friday.
It's Friday, right, yeah, three point eight seven, said Dan,
And I swear this this is going to get.

Speaker 3 (30:02):
Fixed over the weekend.

Speaker 2 (30:04):
Where is the ives' greatest conviction single stock? Where are
you buying an odlock for DNA eight thousand?

Speaker 10 (30:12):
It's it's Apple and the media. I mean the two needs,
Like if you have a horizon over three to six months,
Apple and the media. Because the view is here is
that what's being baked into these stocks is already a recession.
And already ten to fifteen percent numbers cuts. So if
you get any deal, those are the names right here.

Speaker 2 (30:33):
What's the elasticity or revenue for Apple? I mean it's
been single digit. The Apple haters, the people that you know,
there's people that hate Dana ives can't imagine.

Speaker 3 (30:41):
It's uncas, there's complete Twitter's wardrobe.

Speaker 5 (30:44):
I'm a net camm, it's.

Speaker 2 (30:46):
You know, I gotta get this in before we get
to Penn State hockey. Okay, damn, this is critical. They
don't have revenue growth. That's almost to their advantage now
that they're managing for cash flow.

Speaker 10 (30:57):
And then more and more everything you've is talked about.
Now more of that cash flow, because remember that's gonna
dramatically change now that valuation that that gives it a
beast case in what I believe, Afloor. I mean, I
think where Apple's trading here, we start to be begging
in almost a massive number cut relative to where the
stock's gonna open.

Speaker 2 (31:18):
Apple done five percent, Video down four percent. I don't care, Dan,
I is the only reason you're here. Penn State hockey
frozen four How they get there so quickly?

Speaker 10 (31:27):
I mean, look, guy Gadowski and that team you know,
Aiden Fink. I mean, if you look at it, I mean,
Penn State hockey, if I've been one of the best stories,
not just now Canadian. I mean there's a lot of
Canadian but but but but you do have a lot
of us as well. And I think I think they're
gonna They're gonna make some noise.

Speaker 5 (31:44):
And the wrestling team won yet again.

Speaker 3 (31:46):
It's an epic.

Speaker 10 (31:47):
Look, it's an epic year for Penn's across the board
when it comes to sports.

Speaker 2 (31:52):
But the football, the basketball they killed win the Big Game,
just Frozen four at the same disease.

Speaker 10 (31:59):
But it's the start of ultimately, first I think I think,
I think we're gonna coming back. We know, I think
we ultimately, I think we can win this Frozen four.
And I think Keen when we talked, Once the tariffs
get lifted, and then we're gonna be talking about Penzi
twenty twenty five national champ.

Speaker 2 (32:15):
Can you imagine the elasticity if there's somehow this tariff
madness is listed.

Speaker 3 (32:20):
I mean, but if we've never seen.

Speaker 10 (32:23):
This, it will be I mean historical, but you know,
right now continues to be a science experiment.

Speaker 3 (32:29):
Did you see when the market craters.

Speaker 5 (32:30):
He tones down the color exactly so real quick you
say this tech party. This ends at four am. It
feels like the parents came in and broke up the party.

Speaker 10 (32:39):
Year look, Trump basically came broke up the party. Cops
came and Louise for now, the party is off because
Trump broke it up.

Speaker 3 (32:48):
Dan, I thank you so much for coming in dinnis Web.

Speaker 1 (32:51):
But this is the Bloomberg Surveillance Podcast. Listen live each
weekday starting at seven am Eastern on Apple Corplay and
Android Otto with the Bloomberg Business Up. You can also
listen live on Amazon Alexa from our flagship New York station,
Just say Alexa, Play Bloomberg eleven thirty.

Speaker 3 (33:08):
Many talk, some do.

Speaker 2 (33:12):
David Blanchflower changed Atlantic economics out of England decades ago
with a thin book out of Mit Press called The
Wage Curve. Everybody had to stop and read it. And
it was about the dynamics of labor, the dynamics of
our wage, our inflation adjusted wage. The thing about Blancheflower

(33:33):
that's great is up in the sunny climbs of Hanover.
He could have retired like fifteen years ago. Instead we're
inflicted with Blancheflower. Bryson, which is him continuing his granular
research forward on the American labor economy. Professor Blanchflower, thank
you for joining us as we get out to the

(33:54):
jobs report with Claudia sam and Neil Dada.

Speaker 3 (33:57):
David Blanchflower, how bad is it?

Speaker 11 (34:01):
Well, it's pretty bad. Take my role as well as
the central banker. I think that the central bankers will
be sitting there with unbelievable amounts of uncertainty thinking, you know,
this is catching a falling knife. It does look like chaos,
and it's unclear where this is going. Certainly we're going
to see some stuff in the labor market, and I

(34:22):
suspect this will be the you.

Speaker 8 (34:23):
Know, the tip at the top of the cliff.

Speaker 11 (34:25):
Probably, I think, you know, think about if you were
a central banker. On the one hand, you're worried about
inflation coming, so you think, oh, with that, I have
to raise rates. You're also sitting there seeing the probability
of a global recession coming and you think, well, if
that's the case, I have to cut rates. So we're
really sitting here sitting waiting, watching seeing how far this goes,

(34:47):
and the and the and the stop for as you
were just talking about don't look good. So I think
this is chaos. I think it's there's no sense in
which this makes any sense, and why you would want
to impose an enormous taxing.

Speaker 8 (35:00):
He's on the American public. I don't know.

Speaker 2 (35:02):
What's so important here, folks. And again this formula is
trotting out thanks to Steve Ratner over with Joe and Mika,
who had did a really nice explanation of the absolute
idiocy of this formula. The one who figured out that
idiocy was James Siriricki of The New Yorker magazine and
now at the Atlantic.

Speaker 3 (35:20):
Here's what Siri Ricky says about David blanche Flower.

Speaker 2 (35:24):
This is akin to the quote the wisdom of crowds,
whereby the aggregate predictions of non experts often produce more
accurate assessments.

Speaker 3 (35:35):
David blanche Flower, what.

Speaker 2 (35:36):
Did the plain and simple non economist Americans say right now?

Speaker 11 (35:41):
Well, if you so, I've spent on Claudias, I'm gonna
have on in a while.

Speaker 8 (35:45):
She's been really good at this stuff too.

Speaker 11 (35:46):
But if you try and think about predicting downturns, and
for the technically minded, I look at what did the
NBR business Cycle Dating Committee, CORP recession. So the question is,
at the moment you're sitting at, what is the predictor?

Speaker 8 (36:01):
And we'll go with two. The best predictors actually.

Speaker 11 (36:04):
Are the essentially consumer expectations in disease.

Speaker 8 (36:08):
Are they below eighty?

Speaker 11 (36:10):
And the answer is both the Conference Board and Michigan
surveys are looking.

Speaker 8 (36:15):
In horrendous space. Seven of the eighth states.

Speaker 11 (36:18):
That they report for a forecast in recession, and if
you look back to twenty this was exactly what you
would see. But the second one, actually Tom that I'm
really looking at, is are there success two successive months
of employment declines either on the household account or on
the establishment account. So we saw a positive last month

(36:40):
on the establishment account, but we saw minus five eight
eight on the household account, So are be watching that
very hard? Does that come in today negative? If it does,
that's a big predictor of recession. So I think the
likelihood is probably that the NBR will perhaps date a
starting recession in April twenty twenty five, perhaps may, but

(37:03):
I think we'll see that now if the data comes
into day anything like that, the consumer confidence dat has collapsed.

Speaker 8 (37:10):
I mean, that's where we are I think.

Speaker 3 (37:12):
And we'll have that for you in twenty one minutes.
Paul Professor.

Speaker 5 (37:15):
I know when we spoke to you last in November,
we're talking about tariffs. You said, the big questions are
what do other countries? What are they going to do?
It appears that people aren't going to take this lying down.
There's gonna be some retaliatory tariffs here of substance. What
does that mean?

Speaker 3 (37:31):
Right?

Speaker 11 (37:31):
Well, that's yeah, that's right. Obviously we've just seen China responding.
And actually I had a conversation with a guest you
had on yesterday. We chatted last night, which is my
colleague Doug Owin, and his view was actually that two
weeks ago, his view was that everywhere would have actually
responded like for like, and his view is this is
also chaotic.

Speaker 8 (37:53):
That maybe what you'll see.

Speaker 11 (37:54):
I mean, obviously China's responded, but maybe some countries will
actually sit.

Speaker 8 (37:58):
And wait and watch look rather than.

Speaker 11 (38:01):
Immediately respond, perhaps because Trump will step back. Perhaps we'll
see more evidence coming. So I think the answer is
potentially you'll see many more places responding, but maybe for
now all the sensible thing. You go back to our
conversation a minute ago, abouts you know what's coming. Where
are we? It might be that other place. I think
the UK's example, Japan's an example. They're going to sit

(38:24):
and take a breath and think in the sense that, Okay,
if you did it, you don't have to do it
this week. China's done it, and that's a really big deal.
But you know, this is really huge amounts of uncertainty,
and think about what the consequences of that are. Firms
aren't going to invest us top building plans in the
United States because of the chaos. Central banks don't know
what to do because there's great uncertainty. So I think

(38:46):
we'll see a little bit of let's sit back and
wait and decide what's the most appropriate. But that's Doug
Owen's view, and I think it's mine.

Speaker 8 (38:53):
Too, Professor.

Speaker 5 (38:55):
I think we're starting to hear and this coming earning
cycle is going to be very interesting to see which
companies provide guidance in which companies withhold right guidance here,
because it feels like not just consumers, but companies are
also sitting on their hands and waiting.

Speaker 11 (39:11):
Well they are, I mean, I was, I was actually
just the thing came across my terminal, just a minute
ago from the UK Institute of Directors, and they quite interesting.

Speaker 8 (39:22):
They immediately did a survey of six hundred odd members
of the.

Speaker 11 (39:25):
Institute of Directors and seventy percent of them say that
they expect their profits are going to fall as a result.
So obviously you know firms are going to give a
different vidy. I mean, if seventy percent of them, I
think this is going to have a profit effect on them,
They're going to sit and wait and watch. But you
might imagine they're going to impact employment, it's going to
impact investment. And I'm just going a couple of quick

(39:48):
things just so listeners understand. Think are the basic I
mean blandram Erwin teach intro macro, what do we teach?

Speaker 8 (39:55):
National income is.

Speaker 11 (39:56):
Decided by C plus I plus G right consumption plus
investment plus government. Well, the situation we're in now, consumer
spending's falling and sentiments declining, investment intentions of declining, and
the government's cutting spending. So how do we get anything
other declines in GDP? The only issue I think is
how big of those declines going to be. Are they

(40:17):
just going to reduce the expected to grow from to
one or is it going to go negative, and I
think that's where we are. Hard to predict anything, but
it all looks like the wrists of to the downside, right,
and this government has to calm nerves.

Speaker 2 (40:30):
Okay, well, the folks of Vignette here, so Blancheflower calls
me up. I'm lecturing the intro Macro at Dartmouth. There's
a bunch of marketing marks going.

Speaker 3 (40:40):
Who's the cloud the bowtie?

Speaker 2 (40:42):
And I look down in the aisle and Dug Irwin
staring at me, sitting on the floor of the isles,
and I've got an ex philosophical Okay, David, you've.

Speaker 3 (40:51):
Been through this with the Bank of England. It's about
confidence and trust. I mentioned this yesterday.

Speaker 2 (40:56):
How close are we to I'm going to call as
a generalization a clement aptly disinflationary United Kingdom analog.

Speaker 8 (41:08):
Well, I don't know the answer to that.

Speaker 11 (41:11):
I mean, think about I think a good analogy I
thought you would ask something like that, And a good
analogy I think now is actually to look back at
what Ben Bernanke just did. Yankee Ben Bernanke went to
the UK to the Bank of Being in the said
let's think about how you modeled it and actually today
these models essentially are thrown out of the window. And
what you're going to have to do, and firms are

(41:33):
going to do it, and central banks are going to
do it. They're going to set up scenarios tom They're
going to have scenario one, everyone retaliates, scenario two, Trump
backs off, and you're going to sit and try and
map out those scenarios and then try and think which
of them is the most like Because you can't run
a forecasting model, we have no prior data to look
at this. So I think I do think the advice

(41:56):
that I would give people is, you know, wait what,
let's see where we Let's see when this thing bottoms out.
Think about if people say you're going to buy on,
buy on the decline, buy at the bottom, Well, we
don't know where the bottom is. So I think I
think that's the logic, and I think we're seeing that.
I mean, you know, you guys are great at tracking
what's going on. You know, a falling night, you just

(42:16):
wait for it the fall, And I think that's where
we are.

Speaker 2 (42:19):
David Blanchelard, thank you so much for joining us the
honor evading Irwin and Black Blanche back to Bath in
this crisis really helps. He is at Dartmouth College.

Speaker 1 (42:34):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple, Corplay and Android
Otto with the Bloomberg Business app. You can also watch
us live every weekday on YouTube and always on the
Bloomberg terminal.

Speaker 2 (42:48):
Gouda mccunne joins us now with Yale with all of
his work is wonderful book picking presidents and this weekend
we need an applelogue or I need a chapter seven
year where do we go from here? As the conclusion professor,
where do we go from here? After Rose Garden festivities
in the last forty eight hours.

Speaker 12 (43:11):
This is probably the single largest self inflicted economic foreign
economic policy failure of any of our lifetimes. Just no
matter how far back you go, so we're in uncharted territory.
The thing that really strikes me is to an extent
that we have not seen before with Trump, even in
the first Trump administration, he just seems to be immune.

(43:31):
He's not listening to other people, right, He's not listening
to the feedback from the markets. He just seems to
be immune to that. We can speculate as to what
the reasons for that might be, but my guess is
it's going to take him longer to back off the
tariffs than people expect, and people who are anticipating the
same sort of like we're doing this, we're not doing
this back and forth. I wouldn't want to take that bet.

Speaker 5 (43:49):
Even before the tariffs, we've had this market kind of
reflect on some of the economic policies here. If you
just look at the stock market performance here to date
in the US in the first quarter was dramatically blow
the rest of the world, and that rarely, if ever, happens.
Are you surprised so the market has spoken, Are you
surprised that members of Congress have not spoken about tariffs

(44:09):
or perhaps some other policies.

Speaker 12 (44:11):
So I'm not surprised yet. I will be surprised if
this keeps going for a few months. Right now, the
Republican Party is still completely unified behind Trump, and Republican
representatives in the House and Senate care most about that.
But this is going to start to hit and I
would think the biggest way in which the pressure will
start to ramp up is they're working on these tax cuts.

(44:33):
They want to do massive tax cuts again, despite you know,
obviously the deficit consequences of that, and those tax cuts
are focused again disproportionately on the wealthy. I think Democrats
are kind of going around saying, hey, if you guys
want to erase, do the largest tax increase in human
history targeted primarily on the poor and middle class in
order to pay for tax cuts for the wealthy. The

(44:56):
politics of that look pretty bad to me, even if
you're a Democrat, a Republican in a red state.

Speaker 2 (45:01):
Up the script. We can do this with god. A mccundam.
Now you're coming from Boston. For those of you on radio,
we've got the gorgeous backdrop. It looks like a Spielberg movie.
Said of Beacon Hill, the Charles River over to two
universities of suspectability, Professor mccundac, I mean, as simple as
I can, President Trump is against the people dining at
Number nine Park on Beacon Hill. They're against the fancy

(45:25):
people of Boston and coast to coast as well. You
say the Republicans are going to stay with him, John
Burn Murdoch in the Ft says they're already walking away.
Do you anticipate or is there a historical analog where
the Republicans walk away from Donald Trump.

Speaker 12 (45:44):
So there's a possibility. So what you saw Andrew Johnson
and the eighteen sixties where the Republican Party turned completely
on him and it was the Democrats who were his
base of support. But for Trump, it is impossible to
overstate the charismatic hole that Donald Trump has on the
Republican base.

Speaker 3 (46:02):
Right.

Speaker 12 (46:02):
For whatever criticisms you might make of Trump, his skill
at crafting that is just unparalleled in American history. And
if you're a Republican Conasonan whose basic concern is getting reelected,
that's going to get really hard.

Speaker 8 (46:14):
That being said, maybe.

Speaker 12 (46:16):
I'm being optimistic here, but I think there is a
core of Republicans who are looking at the damage, and
as much in the economic damage, they're looking at the
catastrophic collapse in our physician in the world where essentially
all of our allies are saying you know, I mean
not behind the scenes, right, they're saying on the record.
They're saying things like you're better off allying with China
than the United States because at least the Chinese are predictable.

Speaker 10 (46:37):
Right.

Speaker 12 (46:38):
That is also got a bit pressure on at least
those Republicans who care a lot about foreign policy, and
that's just something that we've never seen before, and the
consequences of it are going to keep rippling out for
years and decades. If Trump vanished tomorrow, we would still
be dealing with this for a generation.

Speaker 2 (46:56):
That's one of the most amazing statements of the week.
You're saying, Profet sir, if President, if we had President Advance, whatever,
if President Trump removed tomorrow, this continues.

Speaker 12 (47:08):
So I mean, I'm not saying the economic policy might change,
but the foreign policy effects will continue. So let's put
this differently. Right, So, I used to advise the Chief
of Naval Operations and you know, the senior military, and
so right now there is the Polish or the Japanese
version of me who's going and advising their Ministry Defense
and saying, we have wagered the existence of our country

(47:31):
on the American nuclear umbrella for you know, quite a
long in the Japanese cases, nineteen forty five in the
poll since the end of the Cold War. And clearly
that is not possible because even if Trump weren't here,
the Americans clearly like to elect people like this. So
we need the nuclear weapons of our own because it
would be irresponsible not to have them, and that's not speculation.

(47:52):
The President of Poland just said Poland should probably look
at acquiring nuclear weapons because the Americans are no longer reliable.
The consequence of that are going to be kept failing forever.
Because if I were Japanese advising the Japanese Ministry Defense,
I'd say it is irresponsible not to do this.

Speaker 5 (48:09):
So again, I guess the question is, this is kind
of where we are again. Do you expect it at
any point pushback from some members of Congress, because it
does not appear that there's anything within the administration to check, if.

Speaker 12 (48:26):
You will, No, And I think the thing that might
have started to break it was the Tuesday elections where
the Republicans you know, loost in Wisconsin and we're closer
than they should have been in Florida, despite the massive
intervention of Elon Muskin Wisconsin, I mean sort of. The
joke I was hearing was that the inflation has gotten
so bad that the wealthiest man in America can't buy

(48:47):
some a state Supreme Court seat anymore. And a lot
of Republicans were being held in check by the fear
essentially that Musk in particular would pay for primaries against them.
If he is no longer able or willing to do that,
or if his effectiveness is just decreased, that might free
up some space to maneuver. But I wouldn't expect it
to happen fast. The bond here is really tight.

Speaker 2 (49:09):
I mean, I look forward here and let's just simplistically
say this, and I said this this morning post, I'm
repeating myself at the Rose Garden. Did President Trump lose
the House?

Speaker 12 (49:22):
So my guess is that just simple regression to the
mean And the fact that the two bases of the
parties have switched so Democrats now have high propensity to
vote voters and Republicans have low propensity to vote probably
meant that Trump lost the House the day he won
the November election. The question now is is this going
to be so bad that the Democrats will be able
to keep the House for multiple cycles. The last time that,

(49:46):
as you know, you're hearing Republicans say this, you know,
not for attribution but on the record, but where they're
actually quoted. The last time we saw tariffs like this,
Republicans lost the House for sixty years. I don't anticipate
that happening. But the politics of this, like it's particular,
it will be striking right. The people who will suffer most,
both from the tariffs themselves and from the responses to
the tariffs by other countries, are Republican voters.

Speaker 2 (50:08):
Professor Dinner tonight at Number nine Park, Thank you so much.
Look for Lakanda with us from Boston.

Speaker 3 (50:14):
Of course's affiliation Modio.

Speaker 1 (50:16):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay and Android
Auto with the Bloomberg Business app. You can also listen
live on Amazon Alexa from our flagship New York station.
Just say Alexa play Bloomberg eleven thirty.

Speaker 3 (50:33):
We need to break the newspapers.

Speaker 13 (50:35):
Okay, well I'm not going to give it to you
because we're talking tariffs. I know, just when you wanted.
This one's in the journal. So it's an interesting look
because it's talking about how President Trump's tariffs on China
threatened to create this new problem for global economy. They
talked about this four hundred billion dollar surge of Chinese
goods that are now going to be looking for new markets.
And the problem is that the global markets already filled

(50:57):
with these China made goods. So then you have the
domino effect, and that's what it talks about about other
major exporters like Vietnam, South Korea, Japan, they could see
those similar issues. And economics are saying how the trade
wars could escalate because of this, and one of them
actually saying that the real fireworks are yet to come.
So they're saying that this whole domino effect could start coming.

(51:17):
Chinese imports slap with that thirty four percent duty. But
this morning we heard also that China is hitting back
saying it's going to impose a thirty percent imports from
the US soybets among.

Speaker 5 (51:28):
Yeah, so farmers, Okay, I get from mister Trump. Then
look at the direct.

Speaker 3 (51:34):
A check for mister Trump. I don't get it. I
don't get it.

Speaker 2 (51:37):
Anybody in the control room get it. Can you get
the soybetan dynamics?

Speaker 13 (51:41):
It does not ken.

Speaker 3 (51:42):
Doesn't need to doesn't tofu.

Speaker 13 (51:45):
Next, Okay, so we're sticking with towers. Were going to
the grocery aisle right.

Speaker 8 (51:53):
Here we go.

Speaker 13 (51:54):
What's going to cost you more at the grocery store? Okay?
Because of this all right, parts of the store where
the infant has to move fast, that's what's going to
hit the hardest. Like the prototyle. You have bananas coming
from Gus, right, grapes coming from Peru. Okay, those are
going to cost you more. Sugar coffee too. On top
of it, seafood, you know you can't get the nice
fresh seafood is going to cost you a little bit more.

(52:15):
Now they're saying that tariffs are going to drive up
the cost even for Paul's favorite, those private label products,
those cheaper ones are even going to start to come up.
And the opportunity for price gouging they also talked about,
which was interesting, is that they think that's going to
start to get higher too as people start to take
advantage of it a little bit.

Speaker 3 (52:34):
Are they going to eat the tariff in their margin?

Speaker 5 (52:36):
That's of course I don't see, And I remembers companies maybe, yeah,
I just I remember back from the pandemic. I mean,
we heard most of these companies, consumer packaging good companies
said that they were able to pass along most of
the pricing creases to consumer and we certainly felt that
out that supermarket as consumers. So whether they can do
it again, I don't know, but boy, it's I don't

(52:59):
know this.

Speaker 2 (53:00):
You're going to go from three shopping cards to seven
shopping cards this week in at cost.

Speaker 3 (53:05):
I'm gonna start to purge.

Speaker 13 (53:07):
I'm gonna have to click my cart and like I've
been holding onto the card, I got it empty it
now one more?

Speaker 3 (53:13):
What do you have?

Speaker 7 (53:13):
Okay?

Speaker 13 (53:14):
This was from the Boston Globe. It's about the cost
of education getting more expensive, grocerries getting expensive, course of
education getting expensive. New England, right, you know it has
some of the most prestigious universities, also the most expective
you have Wellesley College. It's overall annual costs for undergraduates
are passing one hundred thousand dollars in September. Crazy, just
over sixty nine thousand of that is tuition, so you

(53:36):
have like Roome and Board in their textbooks, transportation, things
like that. But it sounds like other private schools they're
really not far behind, because if you look at Harvard,
Boston College, Tufts University, they're going to be well above
ninety thousand next year. So it's just this thought of
the prices of colleges keep on going from most schools
in New England to actually total cost rose anywhere from

(53:57):
three to five percent last year.

Speaker 3 (53:58):
That's one can afford.

Speaker 2 (53:59):
It is the picture for the Red Sox. I just
signed for a million zillion dollars. What's interesting is a
single sentence in that Boston Globe article that they see
no lessening of their cale.

Speaker 13 (54:10):
The incoming class is going to be the largest ever.
So people are still enrolling.

Speaker 5 (54:15):
Despite again having been at the board level of a
couple of places. The cost structure for higher education is
simply broken.

Speaker 1 (54:24):
It is.

Speaker 5 (54:24):
It is totally does not work. You have to cut
it in f which you can't do because but that's
what has to happen.

Speaker 2 (54:33):
We'll have to see and we'll have a much more
on this thanks to our education team, David Gura doing
some good work there with Janet Lauren recently Lisa Mateo
with the newspapers.

Speaker 1 (54:45):
This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Easter and on Bloomberg dot Com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube

(55:05):
and always on the Bloomberg terminal