Warsh Touts ‘Consequential’ AI, Trump Press Secretary Out After Five Days

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Original language: English

Original video: Warsh Touts ‘Consequential’ AI, Trump Press Secretary Out After Five Days · Channel: Bloomberg Television · 48:27 · Watch on YouTube

Topics: AI infrastructure and hardware, Markets and economy

Summary

Bloomberg Businessweek Daily covers a difficult week for stocks, with technology and semiconductor shares falling as oil prices rise. Fed Chair Kevin Warsh avoids giving a near-term rate signal but calls AI one of the most consequential changes to the economy in his lifetime. The program examines delays, financing risks, and delivery challenges at AI data-center developer Nscale, then discusses the sudden departure of White House press secretary Katie Zachariah and the political outlook ahead of the midterms. Later segments look at NFL owners’ priorities and halftime-show selection, SoftBank’s reported interest in Allied Universal, and several notable stock movers.

Key points

U.S. stocks fell, led by semiconductor shares, while Brent crude briefly reached $110 a barrel.
Kevin Warsh reiterated the Federal Reserve’s commitment to price stability but did not offer a new signal on upcoming interest-rate decisions.
Warsh described AI as a potentially transformative force and said it is affecting economic demand before supply.
Bloomberg reports that Nscale’s flagship data-center project in Norway is six months behind schedule, illustrating the challenges of building AI infrastructure.
Nscale has substantial announced contracts but has delivered only a small fraction of its targeted capacity; its projects also depend heavily on financing and timely construction.
White House press secretary Katie Zachariah is leaving the role after less than a week, amid criticism of her briefing and questions about the administration’s messaging.
A political analyst says affordability remains central to the midterm campaign, while corruption allegations and possible congressional investigations are also gaining attention.
NFL owners are expected to discuss international expansion and minority ownership sales; the interview describes Roc Nation as leading the Super Bowl halftime-show production.
SoftBank is reportedly considering an acquisition of Allied Universal as Masayoshi Son explores security services as a possible use for AI-powered robots.
CoreWeave shares continued to slide amid concern about borrowing costs and debt, while ExxonMobil rose as oil prices and refining margins strengthened.

Chapters

Start	Chapter	Summary
00:00	Market losses and the week’s agenda	The hosts introduce the program and review the week’s decline in technology and semiconductor stocks.
02:07	Market update and press secretary departure	Charlie Kelly reports falling equity indexes, rising oil prices, and the news that Katie Zachariah is leaving her White House role.
04:13	Warsh on AI and Fed policy	Kevin Warsh discusses AI at the IMF meetings, while a Bloomberg reporter explains what his remarks do—and do not—signal about rates.
10:13	Nscale’s delayed AI data center	A Bloomberg technology reporter explains the delays in Norway and the broader construction, labor, and financing risks facing AI cloud companies.
18:40	Markets and the White House press operation	The program revisits the market selloff and reports that Katie Zachariah will leave the press secretary role after less than a week.
20:52	Why Katie Zachariah is leaving	A White House correspondent discusses the brief tenure, criticism of Zachariah’s first briefing, and the president’s comments.
24:31	Midterms, messaging, and possible investigations	A political analyst discusses the administration’s messaging challenges, election prospects, affordability, and potential congressional investigations.
32:34	Oil prices and NFL owners’ meeting	After another market update, a Bloomberg sports reporter previews NFL owners’ discussions on international games and ownership stakes.
39:58	Who chooses the Super Bowl halftime show?	The discussion turns to Roc Nation’s role in producing the halftime show and possible performers.
42:39	SoftBank and AI-powered security robots	The hosts discuss SoftBank’s reported interest in Allied Universal and the prospect of robots taking on security work.
44:46	Stocks on the move	A Bloomberg equities reporter examines CoreWeave’s decline, ExxonMobil’s gains, and higher costs weighing on J.B. Hunt.
48:27	Teaser for the next segment	The hosts preview a discussion of Tesla cars in space and a weekly economic roundup.

Quotes

This is probably the most consequential change to the U.S. and the global economy in my lifetime? — 04:48

We’re not in the business anymore. — 06:28

Hardware is different, and these big construction projects are inherently difficult. — 12:51

Our core We Vernon scale is entirely premised on leverage and fundraising to develop the data centers. — 17:39

Concepts and entities

Artificial intelligence, Kevin Warsh, Federal Reserve, CoreWeave, Anthropic, Microsoft, Katie Zacharias, ROC Nation, SoftBank Group, Allied Universal

Full transcript (original language)

00:00 This is Bloomberg Businessweek daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today’s complex economy, plus global business, finance and tech news as it happens. Bloomberg Businessweek daily with Carol Massar and Tim Stent event live on Bloomberg Radio, Television and Bloomberg Originals. And a very good afternoon, everybody. Yes, indeed. Across Bloomberg platforms, that means

00:31 TV, radio, YouTube and Bloomberg Originals. This is Bloomberg Businessweek daily for this Friday, October 16th, 2026. Yeah, yeah, yeah, that kind of a week. Uh, it is that kind of a week? Um, well, yeah. Look, it could be worse. You could be a high flying tech stock. I could be a high flying tech stock. I could be, uh, semiconductor stock, and I’d be kind of depressed a little bit. You would be down in the dumps. The stocks bit has been getting beat up. The Nasdaq 100 right now is not at session lows. Just off of session. Lows down 2.3%. The S&P 500 right now uh down about 1.1%.

01:04 Just off of session lows as well. Charlie’s going to have more in just a minute. But this is the way the week is ending. And it’s kind of been the tone of the week. Stocks down 2.8% today. Uh it’s down. It’s still up about 60% year to date. But remember it was it had more than double earlier in the year. So uh, a bit of a different term. So we’re going to talk about that. We’re going to talk about Fed Chair Kevin Warsh making comments overnight. Not any market reaction. He did though address I a little bit in his comments. But nonetheless we are going to get to what you need to know what he said.

01:35 So we’ll dig into that a little bit later on. Yeah. And also how it adds to the narrative. Because speaking of narratives, we’ve talked a lot about one NIO cloud this week. Cor, we’ve down more than 20% this week due to concerns over rising bond yields and debt distress. Our big take today yeah takes us to another prominent Nio cloud that’s been beset by delays and angry workers ahead of its potential IPO of somewhere called. Yeah, that’s where it is. Okay. Good hint. Hey, also, midterms are a little more than three weeks away. Is there no October surprise inside? Maybe we just got.

02:07 You got an October surprise a few minutes ago. Maybe we just got it in. Uh, it’s never too early to talk about the Super Bowl halftime show, so we’re going to get to that a little bit later on. Let’s get you going, though, on this Friday with a check on the trade. Here is the one and only Charlie Kelly. All right. I thank you very much. After five days in the role. White House press Secretary Katie Zechariah is out this after President Trump saying earlier that Katie Zacharias should reconsider her role. But we are learning that white House press secretary Katie Zacharias is out. The story we’re following. And we’ll have more coming up for you. Bloomberg Businessweek daily right to

02:40 the equity markets. A lot of red here. You run the weekly numbers on the Bloomberg and for the S&P 500 index, we’re looking at a loss for the week now of 2% on the S&P today down 92 points down by 1.2%. Uh right now in fact lows of the day on the S&P. Dow industrials down 273. Now drop there of 5/10 of 1%. We’ve got Nasdaq down 2.1%. This as chip stocks continue to sell off. Case in point the Sox the Philadelphia Stock Exchange semiconductor index down

03:11 now by 3% two year at 4.74%, ten year 5.09%. The 30 year 5.43%. All of this with gold. Little change down just under 2/10 of 1% 4164 the ounce and West Texas Intermediate Cream now above $100 a barrel, $100.71, up 2.8%. Barrel of Brent right around 109, now up by 3% among some of those chip names today we’re looking at shares of Nvidia. They are declining by 1%.

03:43 We’ve got Broadcom down now by 3.7%. Micron lower by 4.1%. And core we’ve stopped that. Certainly been in the news this week extending its SLI a slide core. We’ve right now down by another 12%. Recapping here S&P 500 index down now by 1.1%. And for on demand news 24 hours a day, subscribe to Bloomberg News Now wherever you get your podcasts. Tim and Carol. That is a Bloomberg Businessweek. All right. There’s a lot to get to. Um, we do though, want to touch on Kevin

04:13 Walsh because while many of us were sleeping in a moderated discussion, I’m sure that not everybody likes any of us. Well, he wasn’t just the guy. You might have been up for one reason. I might have been up there. I think many of us were awake, actually, but there was a moderate discussion this morning in Bangkok at the International Monetary Fund’s annual meetings, and Fed Chair Kevin Warsh made really no remarks. A monetary policy didn’t give any update on his outlook for the U.S. economy, apart from reiterating that the fed will deliver price stability. So thank you. But he did address AI and the economy.

04:48 Advent of this new technology. This is probably the most consequential change to the U.S. and the global economy in my lifetime? Yep. Um, so I take it seriously. But as a central banker, also soberly, responsibly. Um, I’d say it’s going to do several things. First, it’s obviously hitting the demand side of the economy before it’s going to hit the supply side of the economy. All right. That, of course, was Kevin Warsh, uh, chair of the U.S. central Bank Federal Reserve, there at the IMF annual meetings in, uh, in a

05:23 Bangkok. Let’s get that out right, correctly in Bangkok. Um, moderating the discussion was the head of the IMF, Kristalina Georgieva. Well, let’s go from Bangkok to Washington, D.C., our Bloomberg News bureau there, and to Bloomberg News, a global economy reporter and a current and a, uh, was this much ado about nothing from the fed chair overnight? Well, it was classic, you know, tea leaf reading. Uh, no doubt about it. Um, Tim, uh, you know, on the one hand, the chairman came out and said, I’m not going to give anyone a signal what we’re going to do to interest rates.

05:54 We’re not in that business anymore. It’s a new fad. But at the same time, people listen closely to what he didn’t say and what he didn’t say was he didn’t talk up any concern or alarm over the inflation data we’ve just had over the past week, both consumer and producer prices, as you both know, were on the hot side showing broad based price increases. He didn’t get into that. Instead, he just said, look, we took that decision a few weeks ago in September to raise rates. We took away a dose of accommodation tax time, as he terms it. We’ve got two more meetings still to go. We’ll have to think about what we’re going to do then. Uh, and I think all of that was enough

06:28 to convince the fed watching more of his signal. There was, look, we are where we are. We’re not going to be changing. Um, and it certainly wasn’t the new message. So it’s more about what he didn’t say and what he did say. Okay, I want to go back to what you said about this being a new fed and this fed chair saying we’re not in the business of forward guidance. Is everybody on board with that? Because I remember I’m old enough to remember earlier this week when our Bloomberg News team had an interview with, uh, New York Fed President John Williams, and he indicated that there would be likely be no hikes in 2027 and one more this year.

07:02 So we clearly are going into some kind of a new communication, a framework with the current fed under Chairman Warsh. No doubt about it. There is a task force that he set up that will report back in the coming months. That would probably set out clearer rules of the road in terms of where everyone’s going. But in terms of where we are right now, the last few weeks have sent mixed signals here, pointing because we had several key fed officials come out before the inflation data. Uh, making the point that they have they have policymakers have time. They don’t have to raise rates one meeting after after another. And as you mentioned there, New York Fed

07:35 President John Williams made the point that, look, he sees one more rate hike, probably at the end of the year. Now, that was all before the inflation data gap. Then we had the inflation data and it was pretty broad based. It was hotter than expected. A lot of economists had. It wasn’t. Give me a good look in terms of where price pressures were going, but there’s a feeling now of that they’ve kind of locked themselves in for. For rightly or wrongly, they’re looking for the end of signal that the policymakers are going to be on hold this week. So it will be quite a shock for them to turn around now and raise rates when they haven’t sent that signal. But that’s why all the focus is on

08:06 December. But because even if they don’t hike in October, the inflation story hasn’t gone away. It’s a question of how they respond at their next meeting and the last one for the year, which is in December. Hey, and one thing I do wonder, you know, we’ve always been able to kind of stack up who’s important at the fed. And obviously it’s the chair. It’s often the president of the New York Fed. There’s vice chairman is the same kind of stacking in terms of important voices from the fed. Is that still the same under fed chair Kevin Warsh. Well certainly the positions remained of you’ve got the vice chairman of the

08:39 board. You have the vice chairman of the FOMC, which is the whole policymaking committee, and they typically operate as what’s known as the troika. To your point. Um, and they’re kind of seen as the leadership. We don’t yet know, though, if that is the classic structure this time around. Because to your point, when, um, you know, Williams came out a few weeks ago in his speech and then vice Chair Jefferson came out with his speech was a lot of, uh, wondering among fed watchers. Wait a minute. Is this like a big signal from the fed? From the coming from the very top? But actually, fed watchers said they were probably just delivering their own message.

09:10 They were saying where they see the economy and their message happened to be, we don’t necessarily we think we have time to assess where the data is headed. So again, this goes back to my point earlier. We’re still in a bit of a transition period here. We know the chairman is talking about a new framework. He doesn’t want to do this kind of near term signaling in terms of growth rates or rates are going. So we have to get some clarity on that in the months ahead. All right. Good stuff. Listen and thank you so much. Really appreciate it. Uh, he is uh and a current he is Bloomberg News global economy reporter joining us there in D.C.. Just want to mention a headline crossing

09:43 two on the Bloomberg terminal. U.S. fiscal year 2026 budget gap widening to 1.99 trillion from 1.78 trillion. What is the gap mean? We’re basically spending more than we’re bringing home. That works. Come on. I know. Come on. So you either have to raise revenues or cut spending. If I just think about it like my own fiscal house. Right? Right. Make more money or spend less money or cut back in some of the streaming services anyway. It’s something like that. That’s.

10:13 We could spend a three hours talking about this. We don’t have time. But maybe. Maybe the 4:00 hour hit. Let’s get now to the flagship AI data center that is six months behind schedule, with workers set to be housed in a floating hotel to get it over the finishing line. Uh, yeah. This one is interesting. It’s a Neil Cloud, though. Okay, we are talking a lot about Neil Clock. We we are specifically core. We’ve it’s certainly one of the most prominent ones. It’s taken again today. Now Duff down of just about 25% this week. But today’s Bloomberg big take takes us to another. And this one Carol is a flagship AI data

10:45 center in Norway. You gave the hint a little earlier. I did six months behind schedule, with workers set to be housed in a floating hotel to get it over the finish line. All right, so let’s get to this story. Definitely caught, uh, our attention this morning. Um, we welcome man, Brody Ford. He is tech reporter at Bloomberg News. Joining us from San Francisco. Brody, good to have you here. Lots to get to. We do want to talk about the big take, like take us to Norway. Take us to end scale, take us to the floating hotel. First up, though, let’s start with the company. How important a Neil Cloud is it?

11:16 And scale is very interesting because it’s one of the most prominent Neil Clouds, and I think it’s the best example of the huge promise of the new cloud industry. But the fact that there’s a lot of work that’s left to deliver on these promises, right? And scale has a pretty a all star lineup of folks. Our board has Sheryl Sandberg, they have the former OpenAI, um, sub CEO. We have, you know, a lot of kind of big names from Oracle and Microsoft, and

11:48 they have a lot of big contracts with companies like Microsoft, companies like anthropic. But really a tiny share of those contracts have been delivered on a tiny share of those data centers have been built. And so the question is, can and scale and all of the companies like it deliver on these big promises. Well, is does this one have to be looked at separately from other NIO clouds for, for various reasons, maybe its locations of its data centers or the regulatory

12:19 environment where it operates? Do we have to look at it differently, or can we lump it together with the core weaves and the uses of the world? Every company has unique factors, but they’re up against the same challenges. They’re up against time lines, against labor, against the cost and availability of materials at the end of the day. The tech industry has been in the quiet of a software mind set for the last decade or two. You have a lot of people who are very good at quickly iterating through

12:51 software. Hardware is different, and these big construction projects are inherently difficult, and it’s not always easy to just follow the plan that’s laid out. Yeah. And speaking of that plan, I mean, the company has said what it has something like more than $100 billion in contracts. It has built or leased less than 1% of that targeted capacity. So that feels like a big gap. So how big is that gap between what the company has promised and what it can actually deliver? It’s a significant gap. I mean, they have some very impressive

13:24 contracts, right? They have inked with Microsoft and Anthropic tens of billions of dollars. Their biggest projects are actually in the US, out in West Virginia. They have a project that could scale to be among the largest eye data centers anywhere that, you know, they are very excited about. They have a lot of good management on their team, but the most advanced project they have is the smaller site in Norway. So it’s the only real indicator we have and that project has not gone super smoothly.

13:56 You could argue that maybe they’ve improved their processes and then they’ve brought out a new people. That may be true, but what Norway shows us is that bringing these big data centers online, it’s not straightforward. And when you’re so leveraged, like a lot of these neo clouds are, the timelines are crucial. Well, and on that, you mentioned some of the certainly high profile. Well no names um, that are working with us and scale Microsoft Anthropic. And my understanding is they account for roughly 85%.

14:26 I’m not sure if you said 85% a big chunk of their contract rate. I mean, great customers to have, but that’s a lot of concentration. Anthropic too. I mean, can they just walk away from portions if this event scale delivers late. I mean, how much financial risk are they ultimately carrying if they’re if these projects don’t work out? This is the huge question because today compute demand is so huge, right? There’s such an imbalance in supply and demand. And so Microsoft or Anthropic would

14:58 never walk away today. That would make no sense. The question is, 2 or 3 years from now if some of these bigger projects come on line. If you have one that’s a lagging what is in the terms of these contracts, right. Once you get to a point where the demand environment’s a little more normalized, are some of these neo clouds going to get caught holding supply and have a whole bunch of sunk capital and struggle to find good customers at the rates they want. So why is this one Neo Brody I’m sorry. Go ahead. No, no, it’s okay, but it’s it’s just. Yeah.

15:32 I was going to say. Brody, why is this company. We have a little bit of a lag, so I apologize. Why is why is this companies challenge is somewhat somewhat unique, like we do have examples of data centers that are being built, but we also have examples of data centers that are being hit by by some political pressure, especially here in the United States. And we had some folks on earlier today on on Bloomberg who said that they estimate about 5 to 10% of data center projects, at least in the U.S., will not be built over political pressures.

16:05 But again, why is it this? Why is this company have a unique set of challenges? So it’s possible that their challenges are not unique. But part of what is unique is the disclosure, right? If a big company like Microsoft has a bit of a mishap, it’s such a big diversified company that these things don’t always get disclosed. Or as in schools, entire businesses bringing online these big data centers, and they just launched their S-1 for their IPO. And so we have a better view of what it

16:38 means to be a data center developer, to be in the cloud through end scale than maybe any other company save core weave. And so we’re really able to see how these timelines are going, what the financing looks like. And there’s a lot of debate out there. Just is this a good business to be in, period. Wow. On a week when how much is core we’ve lost this week. So let’s just bring it home. I mean, Brody, we have focused so much about core. We’ve you know, we are asking, is it

17:08 important to make a distinction between the neo Cloud and the hyperscalers? They’re not the same thing. I mean, neo cloud, right? They’re data. It’s all about AI, right? I mean, and that’s an important distinction. So if I for some reason we don’t need as much capacity. Chips get more efficient. So on and so forth. Are they the first that are going to take the hits? Yeah I’d say so. So the big distinction is you think about a company like Amazon or Microsoft. They’re big diversified businesses with a lot of cash flow in this part of the

17:39 business to subsidize the AI cloud development over here. Right. And so they’re really even if some dependent negative free cash flow, they have legit big businesses to subsidize the development. Our core We Vernon scale is entirely premised on leverage and fundraising to develop the data centers. And so if that goes sideways, yes, they are caught holding the bag much sooner. Again, right now, demand is huge. I don’t mean to be too numerous stick because people will line up to buy capacity.

18:10 The question is you just have to get that capacity online soon. That’s right, because the market today might be very different from what the market is in a year or two years. Just quick. Yeah, exactly. Um, thank you so much. Really appreciate it. Thank you. Yeah. Great stuff. Ready for it. He is our tech reporter here at Bloomberg News with the latest on the Bloomberg big taken. Also tying it all back to core weave as well. Um. One. Two. Three. Four. Five. Yeah. That’s half a scary emoji if you’re

18:40 keeping track. It’s less than half a scary movie. Half a Scaramucci talking about the white House press secretary out just after five days. We’re going to talk about that. We’re going to talk about the midterms just around the corner. We’ve got an update. We’ve got analysis. What’s on the mind of companies as they take all of this in. This is Bloomberg. It’s 221 on Wall Street. We do check markets all day long here at Bloomberg. And as we have been reporting, Katie Zechariah will no longer serve as President Trump’s press secretary after

19:13 serving less than a week on the job. A white House official says Zacharias will transition out of the job. It is unclear if she’ll be taking another position in the white House or in President Trump’s orbit. And again, a topic we will continue to cover for you right here on Bloomberg Businessweek daily. Stocks move lower. Familiar themes. Chip stocks selling off again. Eight in a row for the stocks. We got oil advancing. Let’s get right to the numbers. We begin with the S&P as a baseline. Now 7646 where we stand down 1.3%. We’re on track for a loss this week of

19:46 2% or more on the S&P. Dow industrials now down 300 points down 6/10 of 1%. Tech’s hard hit Nasdaq 100 index down 2.5%. Nasdaq Composite down 2.2%. Right now we have got the Sox lower by 3.1%. That is the Philadelphia Stock Exchange’s semiconductor index two year at 4.74%, ten year 5.09%. The 30 year 5.43% gold little changed 4161 the ounce. And again, West Texas Intermediate

20:19 crude, now topping $101 a barrel, up 3.4%. Barrel of Brent 109 46, down by 3.3%. Briefly. Apple shares right now just turning lower. Little change have been higher for much of the day. Shipping estimates for Apple’s iPhone duo slipped into January. Within minutes of the company opening pre-orders this morning, recapping S&P down by 1.2%. Tim, that is a Bloomberg business flash. All right, Charlie, thank you so much. Well, Katie, Zechariah is out after five

20:52 days as white House press secretary got the news just a little while ago, she will no longer serve as President Trump’s press secretary after spending less than a week on the job, thrusting the White House’s communications operation back into a state of chaos. Some would say they really need it, right with the midterms just around the corner. Uh, she was out of the roll as of Friday, according to people familiar with the matter, who requested anonymity to describe the decision before it was public. It’s unclear if she would take another position in the white House or in the president’s orbit. President Trump, just a short while ago, as he was about to board Marine One, had

21:24 this to say about the former white House press secretary. I said, Katie, do you need this? I don’t think you need this. And we’re talking about doing something. We like daddy a lot. I think she’s been really, really treated very unfairly. No, no, we’re talking about. I want her to have a good life. I don’t want to have a life like she’s led in the last three days. All right, that was president time just to show, uh, President Trump. Excuse me. Just a short while ago, as he was getting ready to board Marine One outside the white House.

21:58 Uh, we should point out that the times New York Times also reported that the president did tell reporters, as well, that he encouraged her to reconsider her position. We want to get more on what we’ve heard in our own reporting here. We head to the white House and Bloomberg News White House correspondent Skyler uh, Woodhouse. And as we said, she is there on the white House lawn. Uh, Skyler, good to know. Um, we talk about October surprises. Perhaps this is it ahead of the midterms, but but who knows? What do we know? What have we found out about why she’s gone so quickly? Yeah.

22:29 Carol will look. She has only been like she was on the job for just about a week. Um, she had her briefing earlier this week that lasted just about 15 minutes, taking only about three questions from reporters. Um, and her briefing was pretty heavily criticized. I think there was a lot of, um, questions on why she did not answer more reporter questions. Uh, the briefing was pretty quick. There was also just a lot of, um, thought among, uh, folks here in Washington on, you know, sort of what

23:00 qualified her for this job. And if she was properly, uh, ready to take on this position as press secretary. And, look, being press secretary, it’s a very difficult job. Caroline Leavitt, you know, was, uh, did the job very well. She was one of the youngest press secretaries, um, that we’ve ever seen. And she sort of nailed the role as press secretary in terms of having relationships with the press. She came out, she answered questions, she sparred with reporters, And that was sort of not what we saw from Katie

23:30 earlier this week. And also there was more, uh, scrutiny that came about, um, when she was asked, um, if she passed the bar and she responded, China. Now, that sparked even more questions on if she actually passed the bar and raised questions about potentially her ties with China. And so the president, um, you know, today sort of was talking about how he told Katie that if I were you, I would think about transitioning out. All right. Interesting, interesting. Always keeping us on our toes.

24:00 Um, Skyler, thank you so much. Uh, Bloomberg News white House correspondent Skyler Woodhouse joining us from the white House lawn, just showing some video. I assume that was, uh, yeah, when she was announced her first, uh, press conference. I only recognize it because of what she was wearing. I knew you were going to say that. Uh, well, that’s how you figure it out. Some that same day here. All right. We are very, very curious to see what our next guest has to say about all of this. Great to have back with us. Henrietta Trace, director of economic policy research, Aveda Partners. It’s an investment advisory and consultancy firm at the intersection of

24:31 financial markets and the quarters of the nation’s capital. Who would be a better voice know none other than Henrietta. Uh, she joins us from New Orleans, Louisiana. Henrietta, we did just get this news a short while ago. We want to talk about a lot of stuff. The midterms. It has been a little messy. This is not what you want happening before the midterms, is it? It’s not. Especially when you want the message to be really clear. And I think it’s a good example of muddled messages that we’ve gotten basically for the last eight months, at least.

25:02 You know, what’s the point of the war with Iran? What is the strategy for reopening the street? How are we bringing gas prices down? What are we doing about affordability? You know, those are questions that Republicans have been grappling with all year. And the Democrats have just been hammering the Republican Party with. So now, if you don’t have a spokesman to get those messages across, it makes it even more difficult to convey to voters what you want to see in the last 18 days before the election. Politico is reporting that there’s zero, quote, zero chance the president said,

25:33 zero chance that Susie Wiles will will take her place. But is there is there somebody, in your view, within the president’s orbit right now who could, ahead of the midterms, bring things together and and try to clean some of this up in the next couple of weeks? You know, I feel like the Republican Party has some excellent conduits and excellent message layers that they could get across. I mean, we see them on live TV every night. You know, without naming names, I’d say that’s where I would go.

26:04 You want somebody with a proven ability to take hard questions. The press secretary role is extraordinarily taxing. And whether you support the president of this term or the last term, you know that that job is going to get hammered with hard hitting questions from all around the room, um, for however many hours they’re in there, so it’s a thankless job. I’d want somebody that I know already could do it and has experience. I mean, the president is going to be in the office for another two years. There’s a long way to go. A lot of messaging to telegraph 18 days before the election, but two years

26:37 before the 2028 presidential, that’s a critical role for the party and the white House to have failed. Well, great that you went there because I want to go there, too. I mean, I’m curious how much how important is this story with midterms just around the corner? And then we’ve got some great reporting by our Ted Mann and Joshua Greene, Josh Greene about congressional Democrats. Henrietta expected to gain subpoena power after the midterm elections and are likely to investigate companies that cooperated with the Trump administration.

27:07 So we’re talking about companies like Palantir, Apple, Microsoft hiring Democratic Party insiders and getting ready for potential subpoenas and public testimony. It sounds like a lot of certainly the people that we talk about that we talked to are getting ready for life after the midterms. Um, how do you see it? What’s the reality of what you think the midterm outlook will be or the outcome will be? Well, I think they absolutely should be getting ready for that. What we see from the campaign donations and where they’re pulling funding from the campaigns across new Jersey, Florida

27:40 and Texas just this week makes me pretty comfortable saying that the Democrats are going to control the House next year. I don’t think it’s much of a question anymore. So right there, that’s enough to make sure that investigations are exactly where the Democrats start. When I speak with leadership, they tell me that it’s going to start the Trump family. It’s going to start with crypto predictive markets, the Trump family’s exposure to or investment in those, um, sectors. And then it will expand out to areas in which the Trump family or any cabinet secretaries have taken a stake, or even the white House has taken a stake in a

28:12 critical minerals company, a defense contractor. Uh, not to mention IBM, Intel, all those. But, you know, the exposures that are coming out about the donated donors to the Presidential Ballroom. It’s just fodder across the board. You’re going to need a clear message. And one of the things that I find fascinating, I went to a campaign event last night just to see what the fuss was about and what Democrats were talking about. The corruption angle was very prominent, more than I would have expected. So we know that affordability is the main narrative, but corruption is definitely seeping in. And that’s because the Democratic

28:45 polling is showing that not just Democrats get galvanized by that, but independents are also galvanized. And that’s how you win an election. So you’re sort of answering my question, but I want to push you a little bit more on this. Do you do voters like should this actually be the priority of incoming lawmakers? If the focus from the polls has really shown us that people care about affordability? You know, front and center, that’s what they care about. Yeah, they absolutely do.

29:16 So, Tim, specifically, I would say there’s two things. Number one, all these investigations are going to stem from a narrative of affordability. That’s what they’ve relayed to me. Um, and then so, you know, the Trump family gets very wealthy off of their exposure to crypto. And what have you gotten? That kind of a thing is what they relay. The second reality that we’re dealing with is that under no circumstances, you know, everybody wants to play the parlor game of will the Republicans hold on to the Senate or not? I think they will, with 60% odds, which puts me in the minority, for sure.

29:47 But it doesn’t really matter if you don’t have 60 votes to cut off a filibuster or 67 to override a presidential veto. No legislation is passing next year anyway. So I think for investors, our core focus needs to be on the fourth quarter of this year, when Republicans still have control of the House and the Senate and the white House, they can pass the reconciliation bill. They can provide funding to the Pentagon to perpetuate the war with Iran. They can do a farmers bailout. They can raise the debt ceiling. Um, you just need to, uh, you just said that you think the Republicans will hold

30:19 on to the Senate? Yeah, that’s my forecast. Your forecast? So what are you seeing? Do you see the Republicans holding on to Texas? Do you see them holding onto Maine? Do you see them holding on to Ohio because. Yeah. Take it. I mean, listen, Tim is always, um, Henry checking the prediction markets as he should, because all of a sudden, we know that they can be pretty reliable. They say Democrats have a 63% chance as Kelsey to control the Senate. Yep. So you got to get really granular and you got to look at the individual races. And in my opinion and my experience, these states that Democrats are

30:53 competing in are simply two red to fail. When we’re talking about states that Trump won by 14, 16, even 22 points. You’re not talking about, uh, blue wave, which I agree we’re going to get this year. You’re talking about a blue tsunami. Is it possible? Sure. But with 60% odds, I think it won’t happen. What you’d want to see and why, you know, to tie it back into the press secretary and disarray in the white House here, the way the Democrats are going to win a state like Texas or a state that Trump carried, like Alaska for 14 points, or even a state like

31:26 Maine, that’s got a tremendous incumbency advantage. You know, a Senate incumbent really gets re-elected 80% of the time in a wave election cycle. It’s 50% of the time. So you’re dealing with I don’t know. Everybody likes to talk about this being a change election. The reality is these are extraordinarily red states Kansas and Nebraska. Louisiana, Alabama. Come on. You’re going to need more than D plus eight to get there. Well I a D plus 11 situation I know talking to those some of you know Texas is an interesting one 6040 on Cal State

31:58 for Talarico over Paxton. Yeah. All right anyway good stuff. Um, Henrietta. Thank you. Have a great weekend. Henrietta Maria. She’s director of economic policy research at Veda Partners. Speaking of affordability. Yes, affordability. Can we get there? Well, I don’t know. Brent futures rising to 110 a barrel. For the first time since May of 28, we touched it. We backed off. But again, energy price is still way up from where they were before the U.S. war on Iran. All right, stick around everybody. We’re talking NFL.

32:34 It’s 240 on Wall Street. We do check markets all day long here Bloomberg stocks lower semis slump oil surges. Brent oil hitting $110 a barrel for the first time since May as prospects for imminent supply relief dwindle, prompting traders to ramp up bullish bets ahead of the weekend. Brent right now barrel of Brent crude, the global benchmark at 109 85, did trade briefly at $110 a barrel, up now by 3.7%. West Texas Intermediate crude holding

33:04 above $101 a barrel, up 3.6%. WTI 101 54 I mentioned the selloff in equities right now. We got chip stocks leaving us lower over the S&P down 95 drop. They’re up 1.2%. Dow industrials down 5/10 of 1%. Techs hit hard Nasdaq down 2.3%. Nasdaq 100 down 2.5%. The Russell 2000 index of small cap shares down by 1.7%. The Sox at the Philadelphia Stock

33:34 Exchange. Semiconductor index down 3.1%. The two year 4.75%, ten year 5.10% and the 30 year 5.44%. Gold, meanwhile, down 3/10 of 1% 4160 the ounce. And again, the crude quote bears repeating. WTI right now 101 63. The Brent news though that’s the big story hitting 110 a barrel 109 87 up by 3.7% again. Dow S&P Nasdaq they are all in the red. As we have been reporting, Katie

34:07 Zechariah will no longer serve as President Trump’s press secretary after spending less than a week on the job. A white House official says Zacarias transitioning out of a job. It’s unclear if she will take another role in the white House or in President Trump’s orbit. Carolyn. Tim, that’s a Bloomberg Businessweek. Tim has a sparkle on it. Did you go to Disney or something? You know, sometimes I get up in the middle of the program, get a little touch up, you know, a little, you know? Yeah. Why not? It doesn’t hurt anyone.

34:37 That’s why I love them. It doesn’t hurt anything. Well, I want to prepare for Randall. That’s the thing I know. I want to make sure I’m always looking my best for him. Sparkly. Yes, yes. Um, let’s just get to it. He’s in the house. Randall Williams is with us. He is Bloomberg News senior reporter. He’s also one of the hosts of the Business of Sports podcast, a new one dropping today. Um, is he performing at the Super Bowl halftime show? I thought we weren’t going to talk about. I know we’re going to. We’re not. Okay. Good stuff. All right, all right. Spoiler alert. We’re going to talk Super Bowl halftime. Sure. Uh, I mean, the season just got

35:09 underway. Yeah, it’s season is or six weeks in. But football flies by and it’s the season. Every single game matters. It’s sort of the beauty of the NFL is that every game losing week one or week three or week four, it could cost you down the line. But NFL owners are set to gather here in New York, uh, believe next week on Tuesday and Wednesday. They do this every they do uh, generally speaking, this specific meeting in October that normally occurs is normally in New York. There was one time where it was in Atlanta for them to announce the Super

35:40 Bowl that was going to be in Atlanta. But outside of that, this meeting is normally in October. Is this this is sort of, you know, this is not as big as the annual meeting that happens in the spring, but in terms of immediate operational challenges or opportunities that the NFL wants to address. But what’s at the top of the list? I think that they will be talking a lot of international stuff. They’re playing more international games than they ever have this year, including a Paris game that is upcoming. And I think there’s going to be a lot of conversation around that. And then, of course, you have your minority sales that are going to be happening.

36:12 We reported that, uh, arctos is buying a piece of the Falcons. I read today with, uh, a friend of mine, Ben Fisher, who reported that Steven Ross is selling another piece of the dolphins. And so those sort of things are normally what happens at this meeting. There aren’t a lot of big things, but it all depends on the drama and the season, because the NFL cares who owns what, right. But increasingly they’ve opened it up. Right? Yeah, they care. But I think for the most part, so long as the NFL’s finance committee, which is about six, 5 to 6 owners, so long as they approve it, then generally speaking, there were gen pop owners.

36:45 The rest of them approve these deals. So smaller deals. But I mean the valuations are continuing to rise and it’s no surprise. All right. Do you have more. We I do because um, the internet on the international expansion, the challenge as everybody knows, the challenge with football is the toll it takes up on the players. It’s not like baseball where they’re playing, you know, X number of games for like consecutive day after day. and in some cases doubleheaders. Right. So. So that’s the main thing. That prevents true expansion of the season.

37:17 Right. In some ways also it’s the deal that they have with the collective bargaining agreement that they have with the NFL Players Association that I believe allows up to ten, uh, international games. They’re playing nine this year. So they could add one more. But in Roger Goodell’s Mine, he’ll tell you on the record and off that he’d like to have 16. That way each team can play, uh, just about every week of the season. But there’s a lot of things that need to happen between now and then. Would teams get bigger so more people can so they don’t have to play the same people? What do you mean by that? You mean hiring people with the roster rosters is because these I mean, look,

37:52 the I went to one of the, uh, training camps. I was training camp a few months ago, a massive number of players who you just never see on the. Yeah. I mean, like, I just got players and you have a 53 man roster. I do anticipate that when the players union negotiates a new collective bargaining agreement that one of the things that will be at the table will be more roster spots, because if you are going to have us play more games, then maybe our workforce should be a lot bigger. However, it’s still very, very early. And I will say, generally speaking, going back to the meeting in itself, this is the tightest meeting of the year

38:25 in terms of just owner culture and how they walk around like some owners, you know, there five and oh, there are other owners who are three and two, there are other owners who are zero and five. And so all of those things create a different aura that the owners walk in with. Some owners don’t want to talk to media at all, and they walk straight to, you know, their meetings. But, uh, it’s a lot of fun. They can be moody. Oh, you have no idea. They’re just like us. They’re just like us. Right. I get it. I won’t even ask you about the international game I have, um, we grew up in a giant family. My brothers are giant fans.

38:55 One of them went over to London to see a game. Loved it. Like met people on Facebook. They got together. It was interesting. And they. He’s like staying in touch with folks. And they’ve just found the U.S.. what does that what has that done? Those overseeing games for the league? Well, it’s grown the game of football, no doubt. Now, if you ask the owners, the owners say the economics aren’t there just yet because they’re not getting the ticket revenue there. One of the teams is giving up home game revenue to travel internationally and basically invest in building their brand globally. Um, but it really depends on the owner.

39:28 If you are there, some teams, you know, show up 36 hours before the game and that’s not a big presence. But if you like the Jacksonville Jaguars, who are spending two weeks in London, then of course their presence overseas is going to grow a lot faster than teams that are just in and out for maybe strategy purposes. Yeah, but I think the NFL has a lot of room to grow internationally. All right. So the full meetings owners underway. What determines who gets to play in the Super Bowl? In the Super Bowl

39:58 you mean hold on. What team or what the Super Bowl halftime have to I’m sorry I just it is absolutely. Uh, talking about it is absolutely Jay-Z and ROC Nation’s decision. Um, it’s like point blank period is what I say to that. Um, of course, the NFL is going to in some ways approve, but there is no like, all right, we don’t like this person. Jay. Select someone and then they perform. Why wait. How did he get control of this? Uh, this is a long story, but long story short, when the NFL was in the middle. Okay, great.

40:30 Well, the NFL was in the midst of the turmoil with Colin Kaepernick and getting out of the protest. Jay-Z struck a deal with the NFL to help on social justice. Jay-Z and ROC Nation struck a deal with the NFL to help them with their social justice efforts and to basically get control of the halftime show. Now, of course, it is still the NFL’s show, but I would 100% call it a production that is led by ROC Nation. That’s phat. Who do you all want to see perform this year? Um, Taylor Swift is not going to be the CEO. Travis Kelsey, something like Dua Lipa. Why not Jay-Z? Why not be kind of predictable?

41:01 I think Jay-Z is. Jay-Z is my theory. Yeah, I think you said you do. Yea, he performed at Yankee Stadium. He’s done a lot promoting, uh, you know, his album The Reasonable Doubt and a Black Album to Jay-Z and Beyonce. I would look that. The reality is like, exactly. If you do J, I assume Beyonce has done so many NFL performances, but who is ever tired of the answer? It’s clean view we’re talking about here. So, um, I think other candidates could be maybe Justin Bieber. Miley, maybe Miley Cyrus is my favorite moment of the week, right?

41:33 This never gets tired of Beyonce. Um, but will we know? When did they announce? Well, interestingly enough, this is the second latest that I’ve ever seen a Super Bowl halftime show announce. So your guess is as good as mine? We have no idea. I think it’s come on, I don’t know, you should ask Jay. I know I’m on right now. Well, I’d say is that, uh, I thought that they were going to announce it on Monday because the game was played at SoFi Stadium, where the Super Bowl is going to be, and it didn’t happen. Now, this week’s Monday Night Football game is the Washington Commanders against the 40 niners. And the 40 niners are going to blast them, so they’ll have to find another spot.

42:05 Um, but I mean, the perfect spot for rock is when they choose it. You can do it anyway. Exactly. He’s on it. Um. Oh, hell. Random. Oh, yeah. So thanks for the trip. Bloomberg News senior reporter, also one of the hosts of the Bloomberg Business of Sports podcast, a new one dropping as we speak. Hey, uh, coming up next on Bloomberg Businessweek daily, a check on trading and stocks on the move. This is Bloomberg. This is Bloomberg Businessweek daily with Carol Massar and Tim Stent event on

42:39 Bloomberg Radio and television. All right, everybody, just to rehash Carol Massar Tim’s dynamic live here at Bloomberg headquarters in New York City. So I think watching it stock 80 hours a trade in the United States right now down about 8.6%. This as SoftBank Group is considering an acquisition of Allied Universal. It’s the largest security services company in the United States as founder Masayoshi Son explores ways to deploy AI powered robots across industry. Um, he has identified security services

43:10 as a promising proving ground for robotics technologies developed by his portfolio companies, and deploying fleets of robots instead of human security staff could be economically viable. Um, okay. I have a lot of thoughts about this, about robot security. Yeah. I mean, you’ve seen the law enforcement robot dogs videos, right? Yeah. And the sort of the bomb sniffing stuff. But imagine humanoid robots taking the place of human security. It’s it’s straight out of, like, RoboCop or sci fi movies, right?

43:41 I mean, I guess I yeah, I am still blown away. Was it a month ago or a few weeks ago where we saw those videos coming out of China and just all the different things, and they weren’t perfect and but they were kind of kind of freaks me out. Okay, well, I live right now. Handle security for the New York City subway through its contracts with the MTA. Uh, it also offers enhanced protection, such as intelligence analysts, uh, canine services, bomb technicians. It does facility offerings such as cleaning, janitorial work, and maintenance. Like you said, um, the security staffing industry has already been looking at ways to automate tasks and implement AI.

44:15 It also has a large footprint in providing security for data center developments, which is a growing industry in the country. The business was valued at more than 7,000,000,000 in 2019. So look at the 80 hours of SoftBank right now down about 9% uh on this news. So investors immediate knee jerk reaction to this is and often happens with news of potential acquisitions for the acquiring company sending shares lower right. Especially if they think they’re maybe potentially overpaying or so. So all right. Well keep a watch on that. I’m Carol Massar along with Tim Stefanovic. Let’s get to some stocks on the move on

44:46 this Friday. And uh, here to do that is Matthew Griffin. He’s Bloomberg News U.S. equities reporter joining us right here in studio. Hey, good to have you here. We have a lot of stocks down or at least the major indices down on this Friday. What caught your attention? Well, Carol, we’ve all been paying attention to core. We’ve all week. It’s the poster child of the I sell off this week. So that stock ticker C r WV is down another 14% today. And my colleagues on the equities team have a great story out today. They’re talking about the tension

45:20 investors kind of have to sit with here which is demand for IE infrastructure AI computing. That’s what this company provides. That’s not in question. That’s really strong. But borrowing to finance that demand. It’s getting more expensive especially for this company. Its bonds are trading at levels that typically indicate distress. And for most of the week, investors attention. It’s been on cracks in the eye trade. Generally, chipmakers have been lower. And for core, we’ve it’s been on those challenges and those fears. So that stock it’s down 26% this week.

45:52 If it ends the day around there, that’s going to be its worst week since it went public last year. Wow. I mean, I see, right? Yeah. I mean, and like you said, it’s it’s this is just one example of what we’ve seen on a trade this week. The stock’s down about 15% over the last eight sessions through Friday. That’s the Philadelphia Semiconductor index ticker Sox. And you know that just speaks to the sentiment that we’re seeing right now. Again like you said earlier what it’s up what more than 60% this year. Yeah the Sox still. But remember when it doubled. And it was I think above that. So it’s really pulled back from some of those highs.

46:23 All right. From core we’ve CR we’ve to x0 and we go ExxonMobil. Well energy names one of the very few patches of green in the market today. Exxon that’s ticker exo M. It’s up 2.1%. We saw the redhead on the Bloomberg about 20 minutes ago. Brent futures touching $110 a barrel for the first time since May. Some of that is because Donald Trump’s deal with Russia to release diesel seems like it’s on shaky footing. And then we actually got some numbers from Exxon this morning.

46:53 Preliminary earnings numbers that underscore just how much money these big oil majors are making from the fuel shock, so they expect higher refining margins. That’s a function of diesel getting more expensive even faster than crude oil. They expect those higher margins to add $4.5 billion to their results in the most recent quarter. That’s pretty serious. Yes. 633 a gallon is the daily national average. Uh, diesel. Well, this is our. Sorry. Yeah.

47:23 This is diesel. Mhm. Uh, across the United States, it’s the national average 6.33 a gallon. Not too shabby. I’m just taking a look. Next on mobile it is. How much you think it’s up this year. ExxonMobil. Yeah 30%, 48%. It’s pretty remarkable. And I mean the energy names, they’ve been so volatile. Of course they’ve had to. But investors in that sector I mean you Venezuela too, that that was a tailwind there for the the stocks. We’ve got 30s. Let’s do JB hunt tickers JB. Yes.

47:54 Or that stock down 3.5%. This is a transport company. They’re paying for that more expensive diesel. Also insurance costs also more money to hire and train drivers. That added $50 million in additional expenses in the most recent quarter. That has that stock down about 3.5% today. All right, Matthew Griffin from our Bloomberg News equities team with today’s stock movers. For more conversations like this, check out our Stock Movers podcast. You can subscribe for five minute episodes on the biggest winners and losers on the stock market.

48:27 You can do that wherever you get your podcasts. You’re going to take a car into space. Oh my gosh, what do you think? I don’t know, after seeing that video last night. Um, just wear your helmet and your helmet. Yeah. We are going to talk about Tesla cars in space that’s coming your way. We’re also going to check in with our Mike McKee, uh, a little bit of the eco roundup for the week. Stick around, though, the clothes coming your way on TV.