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• 00:00FAMOUS MOTORBIKES, INTEL GETTING 3%. FOR THE CONVERSATIONS THAT MATTER AND THE INSIGHTS YOU NEED, LET’S GET STARTED. ♪ > > NEWSMAKERS AND MARKET MOVERS, THIS IS “THE PULSE” WITH FRANCINE LACQUA. FRANCINE: GOOD MORNING AND WELCOME TO “THE PULSE.” THE TRUMP ADMINISTRATION HAS DIFFUSED SOME OF THE TENSIONS THAT HAD RATTLED FINANCIAL MARKETS, WALKING BACK COMMENTS ON THE FED AND CHINA. PRESIDENT TRUMP SAYS HE HAS NO INTENTION OF FIRING THE FEDERAL RESERVE CHAIR JAY POWELL AND ON TRADE THE PRESIDENT FLOATED CUTTING TARIFFS ON CHINESE SUBSTANTIALLY. PRES. TRUMP: WE ARE GOING TO BE VERY NICE. THEY ARE GOING TO BE VERY NICE. WE WILL SEE WHAT HAPPENS. ULTIMATELY, THEY HAVE TO MAKE A DEAL. 145% IS VERY HIGH. IT WON’T BE THAT HIGH. WE’LL MAKE A DEAL WITH CHINA. FRANCINE: WE WILL DISCUSS WHAT THAT MEANS FOR THE MARKETS. THANK YOU BOTH FOR JOINING US. LET’S GET CAUGHT UP IN WHAT HAPPENED THE LAST 24 HOURS. FIRST IT WAS SCOTT BESSENT SAYING EVERYTHING WILL BE FINE WITH CHINA AND THE PRESIDENT TRUMP WAS PRETTY FORTHRIGHT. I DON’T KNOW WHETHER HE WAS LOOKING AT THE MARKETS OR JUST WANTS THINGS TO EASE DOWN A BIT. > > AN INDICATION AT LEAST TARIFFS WON’T GO HIGHER IN THE NEAR TERM BUT FOR THEM TO COME DOWN WE NEED HIM TO HAVE A PROPER SIT DOWN CONVERSATION IN THOSE TALKS HAVE TO HAPPEN AND THERE IS NO SENSE OF WHEN THOSE TALKS MIGHT HAPPEN OR WHO MIGHT BE INVOLVED, PARTICULARLY WHAT YOU REALLY NEED IS DONALD TRUMP AND XI JINPING TO TALK DIRECTLY. AN INDICATION AT LEAST HE DOES NOT WANT TO KEEP PUSHING THINGS IN THIS TIT-FOR-TAT GAMBIT AT THE MOMENT, BUT IT DOESN’’T MEAN THAT TARIFFS ARE GOING TO DROP SIGNIFICANTLY AND IMMEDIATELY. IT DOES REQUIRE CHIDED TO SAY, WE WILL AGREE TO DO THIS IF YOU DO THAT. THERE HAS TO BE THAT NEGOTIATION. THE COMMENTARY FROM CHINA OVERNIGHT HAS BEEN INTERESTING. THEY INDICATE THEY ARE WILLING TO HAVE CONVERSATIONS WITH THE U.S. BUT ALSO XI JINPING SAYING IN COMMENTS OVERNIGHT THAT TRADE WAR’S BENEFIT NOBODY. HE IS NOT REALLY SHIFTING HEAVILY ON THE RHETORIC, ESPECIALLY WHEN IT COMES TO THE U.S. YOU CAN SEE CHINA HAS BEEN WILLING TO PLAY HARDBALL WITH THE U.S. ON THIS AND THERE ECONOMY ARGUABLY IS A BIT BETTER INSULATED AGAINST SOME OF THIS BEHAVIOR HAPPENING. THERE HAS TO BE IMPETUS FOR CHINA ALSO AND CHINA IS NOT — WE ARE NOT NECESSARILY IN THE REALM OF A FULL PULLBACK AT THIS POINT BUT OPENING THE DOOR PERHAPS IF WE CAN GET TOWARD TALKS MAY BE WE CAN GET TO SOME KIND OF UNDERSTANDING. FRANCINE: MARKETS WERE QUICK TO REACT. HAS A DRAMATIC SHIFT OUT OF U.S. ASSETS BEEN OVERBLOWN? > > I THINK MARKETS HAVE REACTED A FAIR BIT TO THE NEWS OF THE LAST FEW WEEKS. FROM OUR POINT OF VIEW, WHAT WE THINK OF IS TAKE A STEP BACK AND LOOK AT WITH THE SITUATION IS OVERALL TELLING YOU. WE THINK ABOUT IT IN THAT SENSE, WHAT WE OBSERVE THIS EVEN BEFORE APRIL 2 WE WERE STARTING TO SEE THE WEAKNESS IN THE DATA IN THE U.S. SENTIMENT DATA BUT SO WAS A ON THE HARD DATA. SINCE THEN THE UNCERTAINTY HAS INCREASED QUITE MEANINGFULLY. WHAT THAT MEANS IS THE CONSUMERS AS WELL AS THE CORPORATES WILL BE A LOT MORE CAUTIOUS IN TERMS OF THINKING ABOUT SPENDING AND INVESTMENTS. NORMAL IS SUCH AN ENVIRONMENT COME YOU EXPECT YIELDS TO GO LOWER, TREASURIES TO RALLY. WHAT WE HAVE SEEN IT IS YIELDS MOVE HIGHER IN THE LAST THREE WEEKS. WHY DID THAT HAPPEN? THE IDEA AROUND FOREIGNERS REDUCING ALLOCATIONS TO U.S. ASSETS. I THINK SOME OF THAT IS LIKELY HAPPENING AS THE UNCERTAINTY AROUND THE U.S. IS CREATING ANXIETY IN THE MINDS OF THE FOREIGNERS. IT ALSO IS A BIG GLOBAL DELIVERING THAT IS HAPPENING BECAUSE WANTING TO AGREE SO MUCH IT CREATED SHOCK TO MANY OF THE LEVERAGED STRATEGIES. RATES MOVED HIGHER. IN THE CONTEXT OF THE LONGER-TERM FUNDAMENTALS, ECONOMIES OF SLOWING DOWN, GROWTH WEAKENING, IF YOU THINK ABOUT IT IN THE NEXT SIX MONTHS TO ONE YEAR, CHANCES ARE GROWTH WILL BE LOWER THAN WHAT IT IS TODAY, NEAR 0%. IN ESSENCE, RATES LOOK QUITE ATTRACTIVE, TREASURIES START TO LOOK ATTRACTIVE AND THE FIVE TO 10 YEAR POINT. FRANCINE: GIVEN THE VOLATILITY, IS TODAY AN OPPORTUNITY TO RISK PORTFOLIOS ON A POSSIBLE TRADE DEAL OR IS IT TOO SOON? > > I THINK THERE WILL BE VOLATILITY. THAT VOLATILITY WILL CREATE BOLD MOVES IN THE RATE MARKETS, CREDIT MARKETS, AND EQUITY MARKETS. THE QUESTION IS, WHERE IS THE OPPORTUNITY? FROM OUR POINT OF VIEW, WHEN WE LOOK AT WHERE THE OPPORTUNITY HAS COME OF THE RIGHTS STANDS OUT. IN THE U.S., U.K., AUSTRALIA THE TREASURY — THE GILT AND GOVERNMENT BOND MARKET STAND OUT WHERE BASICALLY THE MARKET IS NOT FULLY PRICING IN THE GROWTH WEAKNESS THIS SCENARIO IS CREATING. MARKET IS CITING REASONABLE OR HIGH PROBABILITY TO THE SCENARIO THAT FOR EXAMPLE FOR THE U.S., FOREIGNERS MIGHT REDUCE ALLOCATION U.S. HOLDINGS BUT NOT ASSIGNING AS MUCH PROBABILITY TO A SCENARIO THAT GROWTH WILL WE CAN THEREBY THAT OPPORTUNITY IN THE RATES MARKETS. I THINK ON THE CREDIT AND EQUITY MARKET, WE STILL HAVE TO BE A LITTLE CAUTIOUS. THERE WILL BE MORE VOLATILITY. WE HAVE TO RECOGNIZE THIS ENVIRONMENT CREATES AN SCENARIO WHERE GROWTH PROSPECTS ARE MUCH WEAKER WHICH MAY NOT BE AS STRONG AN ENVIRONMENT FOR CREDIT OR FOR EQUITY MARKETS. FRANCINE: WE SPOKE TO THE CHIEF EXECUTIVE OF BARCLAYS YESTERDAY AND THESE WERE HIS THOUGHTS ON THE U.S. AS RESERVE CURRENCY. > > 100 YEARS, 80 YEARS OF TRYING. SO MUCH SO IMPORTANT COMMODITIES — GOLD, OIL. DOLLARS ARE PART OF THE PAYMENT SYSTEM. WHEN COUNTRIES TALK TO EACH OTHER, THEY REPRESENT THEIR GDP IN VARIOUS FIGURES IN DOLLARS. I THINK I’M DOING THAT, TAKE A LONG TIME. 3% IS NOT THAT MUCH. FRANCINE: GIVEN THE UNCERTAINTY AND UNPREDICTABILITY OF THE TRUMP ADMINISTRATION COME HOW MUCH PREMIUM DO THINK INVESTORS SHOULD BE ATTRIBUTED TO U.S. ASSETS? > > FIRST, I AGREE I COME I THINK THE DOLLAR WILL REMAIN THE RESERVE CURRENCY. I THINK A BIG PORTION OF THE TRADE HAPPENS IN THAT AND THERE’S NOT A CLEAR ALTERNATIVE TO WHAT THAT IS. WHAT A RESERVE — ALTERNATE RESERVE CURRENCY IS. THE QUESTION AROUND HOW MUCH PREMIUM THAT INVESTORS WILL ASK, I THINK WE’VE SEEN A MEANINGFUL INCREASE IN THE PREMIUM ALREADY GETTING PRICED IN, PARTICULARLY IN THE RATES MARKET. EVEN THE DOLLAR NOW AS OF YESTERDAY HAD MOVED TO LEVELS THREE YEARS AGO. THERE IS ALREADY A MEANINGFUL PREMIUM THAT HAS BEEN ASSIGNED TO THAT. CERTAINLY THAT CAN MOVE A LITTLE BIT MORE. MORE PREMIUM CAN BE ASSIGNED. I THINK FOR MANY INVESTORS LIKE OURSELVES, STARTING TO CREATE OPPORTUNITIES, PARTICULARLY ON THE RATES SIDE, TO TAKE THE OTHER SIDE OF THIS PREMIUM THAT IS BEING BUILT IN BECAUSE OF THE GROWTH BACKDROP. ON THE DOLLAR SIDE, HE WAS CURRENCIES MOVE — TENDS TO BE MORE LONGER-TERM TREND. THERE CAN BE ADDITIONAL WEAKNESS IN THE DOLLAR OR LONG TERM WE ALSO RECOGNIZE IT HAS BECOME A LITTLE MORE OF A CONSENSUS TRADE IN THE MARKET IN THE LAST FEW WEEKS. ANY KIND OF HEADLINES HAS THE POTENTIAL TO CAUSE A LITTLE BIT OF A SNAPBACK RALLY IN THE DOLLAR. FRANCINE: I WOULD ASK ABOUT THE FED IN A SECOND. THE OTHER NEWS OVERNIGHT WAS ELON MUSK TAKING A BIT OF A BACK STEP FROM THE WHITE HOUSE. DOES HE ACTUALLY FEEL HIS JOB IS ALMOST OVER? COOKSEY IS COMING UP ON THE 130 DAY LIMIT FOR HIS POSITION AS A NONOFFICIAL GOVERNMENT EMPLOYEE WHERE HE WAS GOING HAVE TO PROBABLY STEP ASIDE. THERE’S BEEN A LOT OF TALK ALREADY THAT MAY WOULD BE THE END OF IT IN HE WAS START PULLING BACK ARE PARTICULARLY GIVEN IMPETUS FROM THE TESLA NUMBERS LAST NIGHT, NEEDS TO GET BACK TO HIS BUSINESS AND PAY ATTENTION TO IT IS VERY REAL. THEY HAVE NEW MODELS COMING UP. THAT THE ROBOTAXI STUFF. HE REALLY NEEDS TO PAY ATTENTION TO HIS COMPANY. THE TIME I DOES MATCH UP WITH WHAT WE WERE REALLY EXPECTING FOR HIM TO PULL BACK. HE HAS GOT HIS LEFT –DOGE WON’T JUST STOP DEAD BECAUSE HE STEPS ASIDE. THAT EFFORT WILL CONTINUE. THERE ARE OTHER SIGNIFICANT FIGURES IN THE U.S. ADMINISTRATION, GOVERNMENT OFFICIALS WHO HAVE BEEN ARCHITECTS OF THIS POLICY ALSO. THE IDEA OF REALLY CUTTING BACK THE U.S. GOVERNMENT AND ALL THE AGENCIES INCLUDING THE PENTAGON AS WE ARE SEEING THE STATE DEPARTMENT UNDER MARCO RUBIO AS WELL. THIS IS NOT A POLICY THAT IS GOING TO GO AWAY JUST BECAUSE ELON MUSK IS NO LONGER THERE FRONT AND CENTER. IT MAY BECOME LESS VISIBLE AND, BECOME MORE ORDERLY ONE COULD ARGUE, BUT IT IS NOT GOING TO STOP. IT IS A SIDE OBVIOUSLY THAT ELON MUSK IS SAYING I NEED TO GET BACK AND PAY ATTENTION TO MY BUSINESSES. ELON MUSK ARGUING THAT TARIFFS ARE OBVIOUSLY NOT GOOD FOR HIS BUSINESS. FRANCINE: I WANT TO ASK ABOUT THE FED, PRESIDENT TRUMP HAS PULLED A MAJOR ABOUT-FACE WHEN IT COMES TO HIS STANCE ON THE FED. TRUMP SAYING HE’S NOT GETTING RID OF JAY POWELL DESPITE CRITICIZING THE FED CHAIR IN A SERIES OF PUBLIC COMMENTS. PRES. TRUMP: I’VE NO INTENTION OF FIRING HIM. I WOULD LIKE TO SEE HIM BE A LITTLE MORE ACTIVE IN TERMS OF HIS IDEA TO LOWER INTEREST RATES. A PERFECT TIME TO LOWER INTEREST RATES. IF HE DOESN’T COME IS THAT THE END? NO, IT’S NOT. I WISH IT COULD HAVE TAKEN PLACE EARLIER. I HAVE NO INTENTION TO FIRE HIM. FRANCINE: TALKING ABOUT UNCERTAINTY WILL AND UNPREDICTABILITY — UNCERTAINTY AND UNPREDICTABILITY IN TERMS OF POLICY. THE CONCERN IS MARKETS HAVE TO TAKE HIM AT FACE VALUE BUT THEN HE WALKS BACK ON IT. > > THAT’S RIGHT. HE WAS USING LANGUAGE AROUND JEROME POWELL THAT IS MORE KIDS IN KINDERGARTEN CALLING HIM LOSER, INCOMPETENT, TALKING ABOUT — AND THEN SUDDENLY SAYING I’M NOT TRYING TO FIRE HIM. THAT RELATIONSHIP IS FUNDAMENTALLY, IF YOU CALL IT A RELATIONSHIP, BROKEN NO MATTER WHAT DONALD TRUMP IS GOING TO STILL KEEP TALKING PUBLICLY ABOUT WHERE HE ONCE INTEREST RATES TO BE AND LAMBASTING POWELL. THREE FACTORS, ONE IS WATCHING THE MARKET. HE KNOWS DIGGING INTO TRY TO GET RID OF JEROME POWELL WOULD CAUSE A MASSIVE ROILING OF THE MARKET, INCLUDING THE BOND MARKET, WHICH IS THE ONE HE SEEMS TO BE WATCHING. TOO MUCH OF A HASSLE TO TRY TO DO IT. IT IS NOT EASY FOR HIM TO DO THIS. IT IS COMPLICATED AND ARGUABLY HE DOES NOT HAVE THE LEGAL ABILITY TO DO SO. JEROME POWELL’S TERM IS UP IN ABOUT A YEAR SO MAYBE HE FIGURES HE CAN WAIT IT OUT. THIRDLY, JEROME POWELL IS QUITE USEFUL BECAUSE OF THE ECONOMY DOES IN HER DONALD TRUMP WANTS IT TO GO, GIVE A FALL GUY. FRANCINE: THE CONCERN FOR MARKETS AS THERE WAS PRICING IN THE MARKETS HAVE SOMEWHAT OF A RISK BUT ACTUALLY THEY DID NOT REALLY PRICE IT FULLY. BECAUSE IF THE FED CHAIR IS FAR COME ALL BETS ARE OFF. HOW DO YOU DEAL WITH UNCERTAINTY? > > YOU ARE RIGHT. IN GENERAL, ANY KIND OF INTERVENTION TOWARD THE FED’S INDEPENDENCE IS NOT SOMETHING THE MARKETS APPRECIATE. MARKETS LIKE CERTAINTY. THIS ADDS TO AN ALREADY UNCERTAIN ENVIRONMENT THAT HAVE BEEN CREATED. IN A SCENARIO WHERE THE INTERVENTION CONTINUES, THAT WOULD BE NEGATIVELY VIEWED BY RISK ASSETS ACROSS RATES MARKETS, CURRENCY. IT WOULD INCREASE THE RISK PREMIUM EVEN FURTHER THAN WHAT HAS HAPPENED. FRANCINE: YOU MENTIONED THE BEHAVIOR U.S. TREASURIES THAT WERE TRADING A BIT LIKE RISKY ASSETS. DO YOU THINK THERE HAVEN IS A STATUS IS IN QUESTION? > > IT HAS PERFORMED THAT WAY IN THE LAST FEW WEEKS. IF YOU LOOK AT THE LONGER TERM, FOR EXAMPLE FROM JANUARY TO MARCH, EQUITY MARKETS DECLINED PRETTY SIGNIFICANTLY, AND TREASURIES RALLIED. SIMILARLY, THE AUGUST 2024 PERIOD WHEN WE HAD THE BIG JAPAN , EQUITIES DECLINED SIGNIFICANTLY, RATES RALLIED. 2023, SILICON VALLEY BANK, EQUITIES DECLINED FROM A FIXED INCOME RALLIED SIGNIFICANTLY. THE LAST THREE WEEK PERIOD IS A LITTLE UNIT IN THE LAST COUPLE OF YEARS. TWO REASONS, ONE IS AROUND FOREIGN REDUCTION AND SECOND AROUND LEVEL POSITION UNWIND. FOR PATIENT INVESTORS LIKE OURSELVES, IT HAS CREATED OPPORTUNITIES TO ADD EXPOSURE. FRANCINE: PIMCO STILL PREFERS BONDS OUTSIDE THE U.S.? > > WE LIKED U.S. EXPOSURE BUT WE ALSO LIKE TO U.K. AS WELL AS AUSTRALIA. FRANCINE: WHAT ALSO LOOKING FOR? THERE IS SO MUCH UNCERTAINTY DOMESTICALLY ALSO WITH WHAT IS HAPPENING WITH THE DEFENSE SECRETARY AND THINGS THE MARKET IS NOT PRICING. DO WE KNOW HOW DONALD TRUMP MEASURE SUCCESS? DOES HE WANT TO KEEP HAPPY WITH THE BOND MARKET BUT THEN GETS ON WITH ACTUALLY DELIVERING ON WHAT HE WAS VOTED ON? COOKSEY CLEARLY WANTS TO GET SOME TRADE DEALS DONE AND A LOT OF FOCUS ON INDIA WITH VICE PRESIDENT JD VANCE. VERY WARM WORDS FROM THE PRIME MINISTER OF INDIA. HE CLEARLY WAS TO GET SOME INDIVIDUAL RUNS ON THE BOARD. BUT HE WANTS TO DO THAT ON A BILATERAL BASIS. HE DOES NOT WANT A BE NEGOTIATING WITH COUNTRIES AS A LOC AS WELL AS THE EU COULD BE TO — AS A BLOC AS WELL AS THE EU. NOW YOU ONCE DEALS AND THOSE JUST MAY TAKE MONTHS BUT HE WANTS TO SHOW PROGRESS, PARTICULARLY WITH U.K. AND THEN PHYSICALLY DEMONSTRATING HOW MUCH HE IS CUTTING GOVERNMENT, IS ANOTHER ONE. UKRAINE, GETTING A DEAL THERE, NUMBER THREE. FRANCINE: WHEN IT COMES TO LIQUIDITY A MARKET FUNCTIONING, THERE WERE CONCERNS OVER A COUPLE OF DAYS. DO YOU WORRY ABOUT THAT ACTIVELY? > > WE LOOK AT QUITE ACTIVELY BUT FOR NOW WHEN WE LOOK AT OVER THE LAST THREE OR FOUR WEEK DATA, MARKET FUNCTIONING HAS BEEN NORMAL. THERE IS BEEN A LITTLE BIT WIDENING AS YOU WOULD EXPECT AS VOLATILITY PICKS UP, YOU SEE THAT IN THE TREASURY MARKET AND CREDIT MARKET AS WELL. BROADLY, THE MARKET FUNCTIONING HAS BEEN NORMAL. I THINK A LOT OF POLICYMAKERS LOOK AT THAT AS WELL AND THEY GET COMFORT THAT THERE IS FOR MORE RISK OF TRANSMISSION ACROSS THE PUBLIC MARKETS, WHICH IS ALSO IMPORTANT. THE PUBLIC MARKETS ARE ABLE TO DO THAT. EVEN IF A LITTLE INCREASE CAN HAPPENS DURING PERIOD OF VOLATILITY. FRANCINE: THANK YOU SO MUCH, MOHIT MITTAL AND ROS MATHIESON. COMING UP, THE OUTLOOK FOR OIL AND THE IMPACT OF TRUMP’S TARIFFS AND GEOPOLITICAL TENSIONS WITH FATIH BIROL. THIS IS “BLOOMBERG.” FRANCINE: THE CONVERSATIONS THAT MATTER, THE INSIGHT YOU NEED, THIS IS “THE PULSE.” THE THREE MAJOR OIL FORECASTING AGENCIES HAVE ALL MADE HEFTY CUTS TO THEIR DEMAND ESTIMATES FOR 2025. THE PROJECTIONS BY THE IAEA, OPEC, EIA FOLLOWED PRESIDENT TRUMP’S TARIFFS AND THE DECISION BY AN ALLIANCE OR PRODUCING NATIONS TO SPEED UP THE RETURN OF BARRELS REMOVED FROM THE MARKET TWO YEARS AGO. AT THE SAME TIME GEOPOLITICAL TENSIONS ESCALATE THE RISK OF ENERGY SUPPLIES REMAINS A MAJOR CONCERN. THIS WEEK THE U.K. GOVERNMENT AND INTERNATIONAL ENERGY AGENCY ARE HOSTING AN INTERNATIONAL SUMMIT ON ENERGY SECURITY IN LONDON. I’M DELIGHTED TO BE JOINED BY FATIH BIROL. THANK YOU FOR JOINING US. WHAT ACTION YOU HOPE OR EXPECT TO ACHIEVE AT THE SUMMIT IN LONDON ON ENERGY SECURITY? > > FIRST OF ALL COME THE FIRST ACTION IS TO BRING ALL THESE GOVERNMENTS TOGETHER. TOMORROW 60 GOVERNMENTS FROM ALL CONTINENTS, FROM EMERGING COUNTRIES, TOP ENERGY COMPANIES. IT IS A TIME WHEN THE GEOPOLITICAL UNCERTAINTIES ARE GOING SO HIGH AND FRAGMENTATION IS GROWING TO BRING EVERYBODY AROUND THE TABLE IS OF COURSE A MAJOR ASSET FOR THE DISCUSSIONS. BUT WHAT I WANT TO SEE FROM THIS MEETING IS THERE IS A COMMON UNDERSTANDING ABOUT CURRENT AND TOMORROW’S ENERGY SECURITY RISK AND WHAT WE CAN DO ALTOGETHER. FRANCINE: CAN OIL REMAIN BELOW $70 A BARREL? IF IT DOES, WHAT KIND OF IMPACT WOULD THAT HAVE ON THE ECONOMY AND SUPPLY AND DEMAND? > > WE TALK ABOUT UNCERTAINTIES, OIL MARKETS COME AT THE TOP OF IT. BUT OUR NUMBERS, THIS YEAR WE EXPECT OIL DEMAND TO INCREASE ABOUT 700,000 BARRELS PER DAY AND PRODUCTION GROW SIGNIFICANTLY HIGHER THAN THAT. IN THAT CONTEXT, IF THERE ARE NO OTHER SURPRISES, WE MAY EXPECT OIL PRICES TO SEE A DOWNWARD PICTURE FURTHER. FRANCINE: HOW HAS IT BEEN DEALING WITH THE TRUMP ADMINISTRATION SO FAR? HAS THERE BEEN ANY DEMANDS ON CHANGING THE OUTLOOK OR SOME OF THE MODELS ARE USED TO PREDICT? > > WE WORK ALL THAT ADMINISTRATION US ANOTHER COUNTRIES IN A RESPECTFUL WAY. OTHER MEMBERS HAVE THEIR OWN VIEWS. WE WORK WITH THE SPIRIT OF OUR COLLEAGUES FROM THE USE OF ADMINISTRATION, FOR EXAMPLE, WE TALK ABOUT THE SECURITY. WE HAVE TOP OFFICIALS COMING FROM THE DEPARTMENT OF ENERGY AND DEPARTMENT OF STATE COMING TO THIS MEETING AS WELL AS OTHER 60 COUNTRIES. IT FRANCINE: YOUR VIEWS ON OPEC-PLUS, WAS IT A BIT RECKLESS TO SPEED UP THE PACE OF OIL SUPPLY INCREASES WHEN DEMAND IS SHAKY AND WE ARE IN THE MIDDLE OF A TRADE WAR? > > I WOULD SAY IT IS HOW THEY WOULD MOVE IN THE NEXT WEEKS AND MONTHS TO COME IN THE CONTEXT WE SEE IT, SURPLUS IN THE OIL MARKETS AND THEREFORE IT IS UP TO THEM TO DECIDE WHERE THEY’RE GOING TO GO. BUT LAST YEAR — THIS YEAR WE ALSO EXPECTED A RATHER SLOW OIL DEMAND GROWTH IN THE MARKETS MAINLY DRIVEN BY WHAT IS HAPPENING IN CHINA. FRANCINE: THERE IS A BIT OF RELIEF ON SOME POSSIBLE DEAL WITH CHINA AT THE MOMENT. DOES THAT CHANGE WHAT YOU ARE EXPECTING DEMAND TO DO FOR THE PRICE OF OIL? IS THAT A GAME CHANGER? > > THERE ARE TWO REASONS WHY WE EXPECT OIL DEMAND GROWTH TO BE WEAK COMPARED TO PREVIOUS YEARS. ONE OF THEM IS STRUCTURAL, WHICH IS CHINA AND OTHER COUNTRIES, ECONOMIC GROWTH IS SLOWER THAN IN THE PAST. AN ELECTRIC CAR STOLEN. THE SECOND IS TRADE WAR. IF THERE’S A CHANGE IN THE TRADE WAR CONTEXT IN A POSITIVE DIRECTION, AID MAY INCREASE THE GLOBAL ECONOMIC OUTLOOK AND WE MAY SEE HER OIL DEMAND MAY BE SLIGHTLY HIGHER THAN WHAT WE HAVE NOW. FRANCINE: WE STICK WITH THE FORECAST A GLOBAL OIL DEMAND WILL STOP GROWING BEFORE THE END OF THE DECADE? > > I THINK WITH THE CURRENT POLICIES, OUTLOOK, TRENDS, WE EXPECT OIL DEMAND GROWTH TO SLOW DOWN CONSIDERABLY IN THE NEXT YEARS TO COME. WE ARE SEEING LESS THIS YEAR AND THAT MAY MEAN OIL DEMAND COMES TO A CERTAIN LEVEL, A PEAK LEVEL COME AND STAY AROUND THAT. STILL VERY HIGH. A LOT OF OIL TO SUPPLY TO THE MARKETS. FRANCINE: THE OTHER BIG UNKNOWN IS WHAT HAPPENS TO IRANIAN OIL SUPPLIES. WE ARE HEARING FROM THE TRUMP ADMINISTRATION THEY WANT TO MAXIMIZE PRESSURE BUT AT THE SAME TIME TRY TO REACH A DEAL TO REMOVE SANCTIONS. HOW DO YOU DO THE OUTLOOK FOR THAT? > > OIL MARKETS TODAY, THERE ARE MANY UNCERTAINTIES AND ONE IS AS WE JUST DISCUSSED, THE TRADE WAR’S. THE OTHER WHAT IS THE ECONOMIC OUTLOOK AND SANCTIONS. IRAN, RUSSIA WHAT WILL HAPPEN THERE. ALSO WILL IMPACT THE MARKETS. THE MORE ORIOLE COMES TO MARKETS, THE LOWER THE PRICE THERE WILL BE. FRANCINE: FOR IRAN, IT IS PARTICULARLY DIFFICULT TO UNDERSTAND WHAT WILL HAPPEN BECAUSE GEOPOLITICAL. > > VERY DIFFICULT FOR ALL OF US TO UNDERSTAND IS THAT A LOT OF DISCUSSIONS GOING ON BUT WE HOPE A SOLUTION FOR EVERYBODY IN THE SCRIPT. FRANCINE: ARE YOU WORRIED ABOUT INCREASING INSTANCES OF NEGATIVE PRICING IN EUROPE’S SPOT PRICE — SPOT POWER MARKETS? WHAT DOES IT TELL US? > > NOT FOR THE TIME BEING. WE ARE SEEING RENEWABLES ARE GROWING STRONGLY IN EUROPE. THERE ARE PROBLEMS IN TERMS OF AVAILABILITY BUT THIS WILL BE SOLVED AND IS A STRUCTURAL ISSUE. FRANCINE: WHAT ARE YOU MOST OPTIMISTIC FOR THE ENERGY MARKETS IN THE NEXT 12 MONTHS? > > A LOT OF NEW TECHNOLOGIES ARE COMING. INNOVATION, TECHNOLOGIES, ELECTRIC CARS, BATTERIES, SOLAR. LAST YEAR, OF ALL THE POWER PLANTS INSTALLED IN THE WORLD, MORE THAN 80% WERE RENEWABLES AND NUCLEAR POWER. TWO CARBON FREE SOURCES. FRANCINE: WE ALSO HAVE A LOT OF DATA CENTERS. WE ARE ALWAYS ON OUR PHONES. > > WE ARE ENTERING AN AGE OF ELECTRICITY. WE ARE STILL OIL AND GAS BUT ELECTRICITY. THE SOURCE OF ENERGY IN THE CENTURY, IN MY VIEW. FRANCINE: THANK YOU FOR JOINING US, FATIH BIROL. COMING UP, TOP DIPLOMATS INCLUDING MARCO RUBIO DECIDE TO SKIP UKRAINE PEACE TALKS IN LONDON TODAY, RAISING QUESTIONS ABOUT THE STATE OF NEGOTIATIONS. MORE ON THAT NEXT. WE WILL ALSO SPEAK TO BILL BROWDER IN A VERY SHORT TIME. THIS IS “BLOOMBERG.” ♪ ♪ FRANCINE: WELCOME TO “THE PULSE.” THESE ARE YOUR TOP STORIES. MARKETS BOUNCE BACK AFTER PRESIDENT TRUMP DIFFUSE HIS TENSION SAYING HE HAS NO INTENTION OF FIRING THE FED CHAIR JAY POWELL AND PLANS TO BE VERY NICE TO CHINA. TESLA JUMPS PREMARKET AS ELON MUSK PLEDGES TO REFOCUS HIS ATTENTION ON THE AUTOMAKER AFTER DISAPPOINTING FIRST-QUARTER EARNINGS, TELLING INVESTORS HIS WORK AT DOGE IS MOSTLY DONE. YOU SECRETARY OF STATE RUBIO PULLS OUT OF TALKS ON ENDING THE WAR IN UKRAINE, PUTTING DONALD TRUMP’S PEACE EFFORTS IN DOUBT. LET’S GET MORE ON THAT STORY. JD VANCE SAYS BOTH UKRAINE AND RUSSIA WILL NEED TO GIVE UP SOME TERRITORY IN ORDER TO STRIKE A PEACE DEAL. IT COMES AS HE WAS SECRETARY OF STATE AND EUROPEAN DIPLOMATS ARE’S — SKIPPING PEACE TALKS IN LONDON TODAY, EFFECTIVELY DOWNGRADING THE LEVEL OF THE MEETING. GREG, THANK YOU FOR BEING HERE. WHAT CAN WE ACTUALLY EXPECT TO SEE OUT OF THOSE TALKS? > > AS YOU SAID, IT APPEARS THE TALKS HAVE BEEN DOWNGRADED NOW THAT THE FOREIGN MINISTERS AND SECRETARY OF STATE WILL NOT BE THERE. THE TALKS WERE INITIALLY SUPPOSED TO BE A FOLLOW-UP TO A ROUND OF TALKS LAST WEEK IN PARIS WHERE THE U.S. LAID OUT PROPOSALS THEY SET FOR A CEASE-FIRE DEAL. AMONG THOSE WERE THE U.S. RECOGNIZING CRIMEA, TAKING UKRAINE STATE A BIT OFF THE TABLE, AND FREEZING THE CONFLICT MORE OR LESS ALONG THE LINES OF CONTACT WHERE IT STANDS RIGHT NOW. TODAY WAS SUPPOSED TO BE A FOLLOW-UP. IT SEEMS THE U.S. IS LOOKING FOR A YES OR NO ANSWER, AS YOU SAID, WE JUST HEARD FROM THE VICE PRESIDENT WHO SAID THEY PUT FORWARD AN EXPLICIT PROPOSAL AND WANT A YES OR NO. THAT APPEARS TO BE WHAT THE U.S. IS COMING TO THE TABLE TO FIND OUT IN THESE TALKS. FRANCINE: HOW HAS UKRAINE RESPONDED TO U.S. PROPOSALS THE CEASE-FIRE? WHAT IS PRESIDENT ZELENSKYY TRYING TO ACHIEVE SEEKING A MEETING WITH THE PRESIDENT AT THE POPE’S FUNERAL? > > PRESIDENT ZELENSKYY IS IN A DIFFICULT POSITION. THIS IS A TOUGH SPOT FOR HIM. U.S. PROPOSALS ARE VERY HARD FOR THEM TO SWALLOW AND HE HAS ALREADY SAID UKRAINE WILL NOT RECOGNIZE RUSSIAN CONTROL OF CRIMEA. HE HAS SAID IN THE PAST HE DOES NOT — THAT UKRAINE WILL NOT CEDE SOVEREIGN TERRITORY, WHICH IS ONE OF THE PROPOSALS. AND IF THE CONFLICT IS FROZEN AT THE CURRENT LINES, THAT IS A BIGGER SACRIFICE FOR UKRAINE AND RUSSIA. UKRAINE HAS BEEN TRYING TO GET BACK TERRITORY. FOR HIM, HE IS THIS DIFFICULT TASK OF BALANCING THIS, KEEPING THE U.S. ON HIS SIDE, TRYING TO INSTILL DOUBT IN PRESIDENT TRUMP ON VLADIMIR PUTIN’S INTENTIONS. IT IS A TOUGH ROLE. MEETING WITH TRUMP IS MEANT TO THREAD THE NEEDLE. FRANCINE: GREG SULLIVAN, THANK YOU SO MUCH. SIR BILL BROWDER HAS WRITTEN ABOUT HIS EXPERIENCE IS EXPOSING CORRUPTION IN RUSSIA AND LAST WAS KNIGHTED FOR HIS SERVICES TO HUMAN RIGHTS. HE IS A BEST-SELLING AUTHOR OF “FREEZING ORDER.” BILL BROWDER, COFOUNDER AND CHIEF EXECUTIVE OF HERMITAGE CAPITAL, JOINS US NOW. THANK YOU FOR JOINING US. DO YOU THINK RUSSIA WILL ABIDE BY ANY DEAL THAT TRUMP REACHES WITH PUTIN TO END THE WAR? > > PUTIN HAS A LONG HISTORY OF NOT ABIDING BY ANY DEALS. HE LIES, HE MAKES PROMISES AND DOES NOT KEEP THEM. THERE ARE SPECIFIC PROMISES HE HAS ALREADY MADE IN RELATION TO UKRAINE. THERE WAS A PREVIOUS CEASE-FIRE DEAL CALLED MINSK ONE AND THEN THERE WAS MINSK TOO. HE BROKE BOTH OF THOSE CEASE-FIRE DEALS. IT IS HARD TO IMAGINE FIRST OF ALL THAT HE IS GOING — THAT THERE WILL BE AN AGREEMENT THAT HE WILL BE HAPPY AGREEING TO. SECONDLY, IF HE DOES AGREE TO ANYTHING, HE WILL VIOLATE THAT AGREEMENT VERY QUICKLY. THIS IS WHAT HE DOES. THERE’S NOT A WORD THAT VLADIMIR PUTIN SAYS THAT CAN BE RELIED ON. IT IS ALL VERY FRUSTRATING FOR ANYBODY WHO IS A SUPPORTER OF UKRAINE TO WATCH THIS PROCESS PLAY OUT IN WHICH UKRAINE IS BEING FORCED TO MAKE UNBELIEVABLE CONCESSIONS. PUTIN IS BEING REWARDED FOR HIS AGGRESSION. THERE IS NO SECURITY GUARANTEES FOR UKRAINE. FRANCINE: HOW DO YOU SEE THE RISKS AND THE PROBABILITY OF A RESUMPTION OF THE INVASION A YEAR OR SO LATER? IF THERE IS AN END TO THE WAR? > > I THINK THE WAR WILL CARRY ON IN ALL SORTS OF FORMATS NO MATTER WHAT PUTIN AGREES TO THIS WEEK. FROM WHAT I CAN TELL, I DON’T THINK HE’S GOING TO AGREE TO ANYTHING THIS WEEK AND I DON’T THINK UKRAINE IS GOING TO AGREE TO ANYTHING THIS WEEK. IT DOESN’T LOOK LIKELY BASED ON THE DEMANDS BEING PLACED. IF THERE WAS AN AGREEMENT AND PERHAPS I WILL BE WRONG ABOUT THAT, YOU CAN’T RELY ON PUTIN AT ALL. PUTIN WILL CONTINUE TO PUSH ON ALL DIFFERENT AREAS. HE CERTAINLY COULD USE SOME TIME AND SANCTIONS RELIEVE TO REBUILD HIS MILITARY. I THINK IF HE WERE TO AGREE TO ANYTHING, THAT WOULD BE THE BASIS FOR HIS AGREEMENT. YOU CAN BE 100% SURE PUTIN WILL BE BACK AT IT WITH UKRAINE AND VERY WELL WITH OTHER NEIGHBORING COUNTRIES LIKE ESTONIA, LITHUANIA, POLAND. FROM THE EUROPEAN’S PERSPECTIVE, ANYTHING THAT IS — ANY OF THESE SURRENDER TYPE PROPOSALS THAT ARE BEING FORCED ON UKRAINE ARE VERY NEGATIVE AND VERY RISKY. FRANCINE: WHAT ARE THE CHOICES THAT UKRAINE HAS IF THE U.S. WALKS AWAY? DO YOU BELIEVE THE TRUMP ADMINISTRATION WILL WALK AWAY IF THEY DON’T FEEL LIKE A SOLUTION CAN BE REACHED? > > I BELIEVE THEY PRETTY MUCH HAVE WALKED AWAY FROM UKRAINE BASED ON EVERYTHING THAT HAS HAPPENED. THERE IS NOT BEEN ANY NEW MILITARY AID AGREEMENTS FROM THE UNITED STATES. I THINK THAT IT IS ENTIRELY PLAUSIBLE AND POSSIBLE THE U.S. DOES WALK AWAY. IF THEY DO, I THINK IT IS VERY LIKELY THAT UKRAINE WILL CARRY ON FIGHTING. THEY WILL CARRY ON FIGHTING WITH THE SUPPORT OF THE EUROPEAN UNION. I THINK THERE IS A VERY HIGH PROBABILITY THAT AT THAT POINT EUROPEAN UNION WILL CONFISCATE RUSSIAN CENTRAL BANK RESERVES WHICH ARE CURRENTLY FROZEN IN THE EUROPEAN UNION AND USE THAT MONEY TO CONTINUE FUNDING UKRAINE. EVERYBODY ALWAYS DOWNPLAYS THE UKRAINIANS FROM DAY ONE WE HAD EVERYONE SAID UKRAINE WAS GOING TO LOSE IN THREE DAYS, RUSSIA WAS GOING TO WIN. UKRAINE HAS A VERY STRONG REASON TO CONTINUE FIGHTING WHICH IS THAT WHEN RUSSIA OCCUPIES THEIR COUNTRY, TERRIBLE THINGS HAPPEN. THE PEOPLE GET TORTURED AND KILLED, WOMEN GET RAPED, CHILDREN GET KIDNAPPED. FURTHER UKRAINIANS TO GIVE UP, IT SEEMS LIKE — FOR THE UKRAINIANS TO GIVE UP, IT SEEMS LIKE UNLIKELY GIVEN THE REALITIES ON THE GROUND. FRANCINE: WHAT IS THE WAY FORWARD EVEN IF EUROPE STEPS UP SUPPORT TO THE EXTENT IT CAN, HOW LONG OF SCENARIO COULD UKRAINE HOLD UP AGAINST RUSSIA? > > IF THE EUROPEANS CONTINUE TO SUPPORT UKRAINE, AND IF THEY SUPPORT UKRAINE IN THE FORM OF LETHAL WEAPONS, UKRAINE AT SOME POINT COULD END UP WITH A MILITARY ADVANTAGE WHICH POINT THEY COULD NEGOTIATE A PROPER PEACE DEAL AS OPPOSED TO ONE BEING FORCED ON THEM. AND THAT SORT OF HAS TO BE WHAT THEY’RE LOOKING FOR, A SITUATION WHERE THERE NEGOTIATION — NEGOTIATING FROM STRENGTH AND NOT BECAUSE U.S. IS PULLING OUT. I THINK THE UNITED STATES PULLING OUT OF THIS WHOLE THING IS PRETTY MUCH ALREADY DECIDED SO IT IS JUST A QUESTION OF HOW TO MANAGE THAT PULLOUT IN A WAY THAT IS LEAST PAINFUL FOR UKRAINE AND FOR EUROPE. FRANCINE: WHAT IS YOUR ADVICE TO COMPANIES AND INVESTORS THINKING NEVER RETURNED TO RUSSIA IF SANCTIONS ARE LIFTED AS PART OF ANY PEACE DEAL? > > I WAS ONCE THE LARGEST FOREIGN INVESTOR IN RUSSIA UNTIL I WAS EXPELLED, MY OFFICES WERE RATED, A LAWYER WAS –RAIDED, BY LAWYER WAS TORTURED AND KILLED. WHAT I CAN SAY IS THIS HAPPEN LONG BEFORE ANY INVASION OF UKRAINE EVEN BEFORE THE INVASION OF GEORGIA. RUSSIA IS A TOTALLY UN-INVESTABLE COUNTRY. IT IS A DANGEROUS COUNTRY. THERE IS AN ABSOLUTE NO RULE OF LAW, TOTAL CORRUPTION. ANYBODY WHO VENTURES INTO RUSSIA WOULD BE DOING SO AT A HUGE, HUGE RISK. I WAS A PROBABLY NEGLIGENT IF THEY ARE A PUBLIC COMPANY, NEGLIGENT GOING INTO RUSSIA BASED ON THOSE RISKS. FRANCINE: THERE IS OUR BELIEF IN THE TRUMP ADMINISTRATION THAT DONALD TRUMP COULD FIND A SOLUTION, A DEAL THAT VLADIMIR PUTIN RESPECTS HIM OR HER FEARS HAVE BEEN IT WOULD BE DIFFERENT. > > WELL, DONALD TRUMP MAKES ALL SORTS OF VERY GOOD DEAL OF STATEMENTS THAT DON’T TURN OUT TO BE TRUE AND THAT IS CERTAINLY ONE HERE. VLADIMIR PUTIN WILL CERTAINLY NOT WANT TO ENRAGE DONALD TRUMP BUT AT THE SAME TIME, VLADIMIR PUTIN HAS MANY OF HIS OWN OBJECTIVES AND THEY HAVE NOTHING TO DO WITH DONALD TRUMP. HIS MAIN OBJECTIVE IS TO STAY IN POWER UNTIL THE END OF HIS NATURAL LIFE. IN ORDER TO DO SO, HE NEEDS FOREIGN ENEMIES, WARS, CONFLICT, AND MONEY. AND THAT MONEY WILL COME FROM EXTORTING FOREIGN BUSINESSES, RUSSIAN BUSINESSES, STEALING MONEY FROM PEOPLE AS HE HAS ALWAYS DONE. RUSSIA REALLY IS THE MOST HELLISH COUNTRY IN THE WORLD WHEN IT COMES TO THE INTEGRITY IN BUSINESS AND ANY TYPE OF NORMAL ACTIVITY. ANYBODY WHO IS EVEN CONSIDERING GOING INTO RUSSIA SHOULD TURN THE OTHER DIRECTION. IT MAKES NO SENSE. FRANCINE: SIR BILL BROWDER, THANK YOU FOR JOINING US TODAY, CHIEF EXECUTIVE AND COFOUNDER OF HERMITAGE CAPITAL MANAGEMENT. PRETTY STRONG WORDS ON RUSSIA. BRITAIN’S PRIVATE SECTOR HAS SUFFERED ITS BIGGEST CONTRACTION IN MORE THAN TWO YEARS. THAT IS AFTER DONALD TRUMP’S TARIFFS CAUSED ORDERS FROM ABROAD TO DRY UP AND TRIGGERED RECESSION FEARS ACCORDING TO A CLOSELY WATCHED SURVEY. S & P GLOBAL’S PURCHASING MANAGERS INDEX TUMBLED TO 48.2 IN APRIL, SHARP DECLINE FROM THE PREVIOUS MONTHS. WORSE THAN EXPECT BY ECONOMISTS. ANYTHING BELOW THE 50 THRESHOLD MEANS IT IS A SIGN OF CONTRACTION. THE HEAD OF THE IMF HAS WORN THERE’S A GREATER CHANCE OF A GLOBAL RECESSION OF UNCERTAINTY OVER TRADE DRUGS ON. > > IF WE HAD THIS CLOUD OF UNCERTAINTY COMING LOWER AND LOWER, MAKING IT DIFFICULT FOR THE BUSINESS COMMUNITY AND FOR HOUSEHOLDS TO TAKE DECISIONS, WE COULD HAVE A SELF-INFLICTED INJURY THAT I GUARANTEE YOU WE WILL REGRET. FRANCINE: THAT WAS A MANAGING DIRECTOR OF THE IMF SPEAKING TO US EARLIER. THERE ARE PLENTY MORE HIGH PROFILE INTERVIEWS FROM THE IMF MEETING IN WASHINGTON THIS WEEK, INCLUDING WITH THE BUNDESBANK PRESIDENT WHO WILL BE ON “SURVEILLANCE” TODAY AT 12:30 P.M. LONDON TIME. A CHATGPT EXECUTIVE SAYS OPENAI WOULD BE INTERESTED IN BUYING GOOGLE CHROME BROWSER IF IT IS ORDERED TO BE SPINAL. IT WAS CALLED BY THE U.S. JUSTICE DEPARTMENT TO TESTIFY AS PART OF A THREE WEEK TO DETERMINE WHAT CHANGES ALPHABET GOOGLES MUST MAKE AFTER A JUDGE FOUND LAST YEAR THE COMPANY MONOPOLIZED THE SEARCH MARKET. THE ALTERNATIVE MEDICINE ADVOCATE HAS WRITTEN DOZENS OF BOOKS EXPLORING HEALTH AND WELL-BEING AND HIS LATEST THIS IS 95TH BOOK. IT EXPLORES THE ROLE OF TECHNOLOGY IN PARTICULARLY AI IN SPIRITUALITY. I HAVE BEEN SPEAKING ABOUT WHETHER HE THINGS ARTIFICIAL INTELLIGENCE COULD IMPROVE HUMAN INTELLIGENCE. > > IT EXPANDS HUMAN INTELLIGENCE FOR SURE. THE BIG QUESTION IS, DOES IT EXPAND SPIRITUAL COGIC CAN IT HELP US BECOME MORE SELF-AWARE. A MACHINE THAT IS NOT AWARE OF ITSELF CAN HELP YOU BECOME MORE AWARE OF YOURSELF. AI’S HUGE IMPLICATIONS FOR WELL-BEING, THE FUTURE OF WHAT WE CALL HEALTH SPAN AND LONGEVITY, A DEEPER UNDERSTANDING OF REALITY. WHAT IS CONSCIOUSNESS, WHAT IS EXPERIENCE. HOW TO ENGAGE IN CONTEMPLATIVE INQUIRY TO ACCESS SPIRITUAL INTELLIGENCE? BEYOND WHAT WE CALL INTELLECTUAL INTELLIGENCE, EMOTIONAL INTELLIGENCE — ALL OF WHICH, BY THE WAY, AI CAN HELP WITH. FRANCINE: WHAT DO YOU THINK OF ARTIFICIAL GENERAL INTELLIGENCE? ONE OF THE GREAT QUESTIONS WE HAVE IS, WHAT IS IT EXACTLY AND WHEN DO WE KNOW IF IT FITS SINGULARITY? > > EVERYBODY IS TALKING ABOUT IT. I DON’T BELIEVE AGI WILL EVER BE CONSCIOUS. CONSCIOUS MEANS SUBJECTIVE EXPERIENCE. SO IT DOESN’T FEEL HUNGER OR HAS SEXUAL URGES OR FEAR DEATH OR HAVE EXISTENTIAL DILEMMAS OR FEEL ANXIETY. IN THAT WAY, ARTIFICIAL GENERAL INTELLIGENCE WILL NOT BE CONSCIOUS OR MAY HAVE SUBJECTIVE EXPERIENCE. IT WILL ASSIMILATE THAT AND THAT WILL HAPPEN SOONER OR LATER. FRANCINE: YOU ARE GOOD FRIENDS WITH SAM ALTMAN. I READ YOU BOTH LOVE MEDITATION. WHAT YOU MAKE OF TECH CHIEF INFLUENCE AT THE WHITE HOUSE AT THE MOMENT? > > I THINK THE WHITE HOUSE HAS TO BE RECEPTIVE TO THESE GREAT MINDS THAT WE HAVE RIGHT NOW IN THE WORLD OF TECHNOLOGY. AND THE WORLD OF TECHNOLOGY CAN ALSO HELP SOLVE CONFLICTS. RIGHT NOW EVERYWHERE IN THE WORLD, ALWAYS SEE TRYING TO SOLVE CONFLICTS THROUGH VIOLENCE. WE HAVE MEDIEVAL MINDS AS LEADERS IN THE WORLD. AND THEN WE HAVE AI AND NUCLEAR WEAPONS AND SO ON. SO I THINK IT BEHOOVES A NEW LEADER RIGHT NOW WHO WANTS PEACE, PROSPERITY, SUSTAINABLE PLANET, INTRODUCE HEALTH, WELL-BEING, TO BE FULLY VERSED IN AI. IF THEY’RE NOT, THEY GET THE RIGHT — THERE IS NO PROBLEM YOU CANNOT SOLVE TODAY IF YOU HAVE A SHARED VISION, IF YOU COMPLEMENT EACH OTHER’S STRENGTHS, AND YOU CREATE A SPIRITUAL AND EMOTIONAL BOND IN A TEAM, THEN WE HAVE CREATIVE SOLUTIONS. BUT WE DON’T THINK LIKE THAT. WE HAVE METAPHORS OF VIOLENCE. WAR AGAINST WAR, WAR AGAINST POVERTY, WAR AGAINST CANCER. THESE ARE RIDICULOUS METAPHORS THAT HAVE NO PLACE IN OUR MODERN WORLD WITH THE CAPACITIES THAT WE HAVE. WE CAN ACTUALLY — THIS IS THE CONVERSATION I’VE HAD WITH SAM MANY TIMES. THAT IF WE COLLECTIVELY USE AI WITH A SHARED VISION, WE COULD HELP CREATE A MORE PEACEFUL, JUST, SUSTAINABLE, HEALTHIER WORLD. FRANCINE: THAT WAS THE AUTHOR DEEPAK CHOPRA SPEAKING TO US FROM NEW YORK. COMING UP, ELON MUSK SAYS HE WILL SPEND MORE TIME FOCUSING ON TESLA OVER HIS WHITE HOUSE ROLE AS THE EV MAKERS PROFITS PLUNGE. THAT STORY IS NEXT. THIS IS “BLOOMBERG.” ♪ > > STRUCTURALLY SPEAKING, WE DO STILL HAVE VERY POSITIVE NEW MEXICO. IN THE MACRO SIDE BECAUSE STRUCTURALLY SPEAKING IT IS VERY ATTRACTIVE INVESTMENT GEOGRAPHY FOR THE U.S.. MEXICO IS HUGELY COMPETITIVE IN TERMS OF COST. SO WHY WOULD THE U.S. COMPANIES NOT TAKE ADVANTAGE? COAX THIS STRUCTURAL COST ADVANTAGE IS GOING TO LEAD MEXICO TO CONTINUE TO CONTRIBUTE TO THE GROWTH, U.S. AS WELL, VALUE CHAINS, SUPPLY CHAINS ARE SO INTEGRATED THAT MEXICO HAS TO PLAY CONTINUING ROLE IN THE FURTHER DEVELOPMENT OF THE U.S. AND U.S. IS GROWING VERY HEALTHILY, VERY NICELY. IT WILL BENEFIT MEXICO. THIS WAY OR THAT WAY, IT WILL BENEFIT MEXICO. > > MEXICO IS A SOURCE OF RESILIENCY, OF EARNINGS. IT GENERATES THE DIVERSIFICATION WE HAVE IN THE FOOTPRINT. THERE IS ANOTHER IMPORTANT, SOMETIMES WE DON’T FOCUS A LOT ABOUT, AND WHAT WE ARE SO CONVINCED THAT MEXICO IS WHEN YOU CONTINUE TO DO WELL WHICH IS THE LEVERAGE OF THE COUNTRY. THE LEVERAGE IS ONLY 33%. WHEN YOU SEE MEXICO GROW, YOU HAVE SEEN IT GROW BECAUSE STRUCTURALLY SPEAKING, THE LEVERAGE IS SO LOW THAT JUST A LITTLE BIT OF GROWTH AND THE LEVERAGE IS GOING TO BE ABLE TO SUPPORT THAT. THAT IS WHAT WE ARE STRUCTURALLY POSITIVE IN MEXICO. FRANCINE: BBVA CHIEF FINANCIAL OFFICER SPEAKING TO BLOOMBERG ABOUT THE OUTLOOK FOR ITS LARGEST MARKET, MEXICO, IN THE WAKE OF TRUMP’S TARIFFS. IT AIRS TONIGHT FOR U.S. YEARS AT 9:30 P.M. AND THURSDAY EVENING IN EUROPE. ELON MUSK IS BOUND TO DEVOTE MORE TIME TO TESLA STARTING NEXT MONTH AND SAYS HIS STENT LEADING THE SO-CALLED DEPARTMENT OF GOVERNMENT EFFICIENCY WILL BE LARGELY COMPLETE. INVESTORS HAVE TAKEN HIS DECISION TO FOCUS ON THE EV MAKER AS A POSITIVE MOVE AFTER TESSA REPORTED FIRST QUARTER RESULTS THAT MISSED ANALYST ESTIMATES. JOINING US NOW IS CRAIG TRUDELL. THIS KIND OF CAME AS A SURPRISE BUT I DON’T KNOW WHETHER IT IS BECAUSE THERE ARE TENSIONS WITH PEOPLE IN THE WHITE HOUSE OR WHETHER HE ACTUALLY NEEDS TO GET BACK TO FOCUSING ON TESLA. > > I THINK IT MAY BE A LITTLE BIT OF EVERYTHING HERE AT PLAY WHERE ALL ALONG IT WAS THE CASE THAT AS A SPECIAL GOVERNMENT EMPLOYEE, HE HAD A TICKING CLOCK THAT HE WAS SUBJECT TO. I THINK HE IS ALSO ACKNOWLEDGING THAT THIS IS NOT WORKING, COMING RIGHT OUT AND GETTING THE CALL WITH HIS ID HIS GOING TO DEVOTE MORE TIME TO TESLA. I THINK IT IS ALSO IMPORTANT WE NOTE THAT LAST NIGHT HE SAID AS LONG AS TRUMP WANTS AND FOR THE LENGTH OF HIS PRESIDENCY TO HELP OUT, HE IS GOING TO HELP OUT, BE OR TWO A WEEK. HE IS NOT GOING ANYWHERE. HE WAS NOT CONTRITE OR APOLOGETIC. HE SAID HIS CRITICS WERE ON THE TAKE AND PAY PROTESTERS AND THAT SORT OF THING. HE IS NOT NECESSARILY SENDING A SIGNAL THAT I’M GOING TO TRY AND MAKE AMENDS OR RETHINK MY ACTIONS. HE WAS VERY MUCH OF THE MIND OF, I AM IN THE RIGHT HERE. FRANCINE: WHAT DOES HE NEED TO DO TO PUT TESLA BACK ON TRACK? > > IMPORTANTLY, HE NEEDS MORE PORTABLE VEHICLES TO SELL. — MORE AFFORDABLE VEHICLES TO SELL. THE NUMBERS BEING QUITE WEAK AND EVEN WEAKER THAN EXPECTATIONS, ASSURANCE THAT THESE MORE AFFORDABLE VEHICLES THEY HAVE SAID WILL BE COMING IN THE FIRST HALF OF THE YEAR ARE STILL — THERE WAS CONCERN ABOUT THAT BECAUSE OF HER REUTERS REPORT ON FRIDAY. THEY SEEM TO BET THAT BACK ALTHOUGH THEY ALSO DID NOT COME RIGHT OUT INSIDE THAT WAS WRONG WRONG. THEY ALSO ACKNOWLEDGED THAT THAT RAMP IS MAYBE NOT GOING AS QUICKLY AS THEY WOULD LIKE. I THINK IT IS IMPORTANT THEY DO FOLLOW THROUGH ON THAT BECAUSE THIS IS A THAT THE SALES WEAKNESS IS SUBSTANTIAL ON THE AUTOMOTIVE SIDE. ANOTHER SORT OF KEY BIT OF NEWS TO COME OUT OF LAST NIGHT WAS THE ENERGY BUSINESS, WHICH HAS BEEN EXTREMELY STRONG, MORE SUSCEPTIBLE TO TARIFFS HITTING THE SIDE OF THE BUSINESS BECAUSE THERE HAVE BEEN IMPORTING BATTERY CELLS FROM CHINA INTO THE U.S. FOR THAT BUSINESS. FRANCINE: THANK YOU SO MUCH, CRAIG. YOU HAVE A GOOD SECTOR TO FOLLOW, ESPECIALLY WITH WHAT OF THE BIG PERSONALITIES. S.A.P.’S FIRST QUARTER PROFIT ACTUALLY BEAT ANALYST ESTIMATES EVEN AS IT CLOSELY WATCHED SOCCER REVENUE CAME IN SLIGHTLY BELOW PROJECTIONS. THE CHIEF EXECUTIVE CHRISTIAN KLEIN TOLD BLOOMBERG BUSINESS IS STRONG DESPITE WORRIES U.S. TARIFFS COULD TRIGGER A GLOBAL SLOWDOWN. > > NO PULL BACK ON SPENDING ON S.A.P.. WHAT THEY ARE TELLING ME IS, CHRISTIAN, HELP ME TO DRIVE PRODUCTIVITY, GIVE ME MORE AI ON ASSET MANAGEMENT, SUPPLY CHAIN. HOW CAN I AUTOMATE SEVERAL TASKS IN MY BACK OFFICE FUNCTIONS? THAT IS WHAT THEY ARE MORE AND MORE ASKING FOR GIVEN THEY ARE UNDER FINANCIAL PRESSURE. WHAT WE ARE NOT SEEING YET IS THERE ACTUALLY DELAYING PROJECTS OR EVEN CUTTING PROJECTS. FRANCINE: CHARLIE WELLS IS HERE. CHARLIE, S.A.P. SHARE PRICE JUMPING ON THE BACK OF THE EARNINGS REPORTS. WHAT ARE THE MARKETS LIKING? > > SHARE PRICE UP BY THE MOST AT ONE POINT SINCE 2019. ANALYST CALLED S.A.P. A MASTER CLASS IN RESILIENCE. WHAT INVESTORS SEEM TO BE LACKING IS THE FACT THAT BUSINESS MODEL HERE COULD WITHSTAND A LOT OF THE TARIFF AND CERTAINTY BECAUSE OF THEIR BUSINESS THEY WILL BE BOOKING, THE CONTRACT THEY ALREADY HAVE ENTERED IN, TO GIVE THEM INSULATION IN TARIFF UNCERTAINTY GOING FORWARD AND THE MARGINS HAVE IMPROVED 215 BASIS POINTS OR CAME IN 250 BASIS POINTS AHEAD OF CONSENSUS. FRANCINE: DID S.A.P. GIVE A BROADER READ ON HOW IT COULD BE AFFECTING HOW — HOW TARIFF COULD AFFECT TECH? > > FRAMEWORK IS STARTING TO EMERGE. WHAT WE ARE SEEING IS FIRMS THAT CAN GET THAT INSULATION, HAVE THIS BOOK TO BUSINESS, THOSE WILL PROBABLY BENEFIT IN THE MARKET. SOME TECH FIRMS THAT MAY TAKE MORE OF A HIT, MIGHT BE MORE DEPENDENT ON HEADCOUNT OR DEPENDENT ON CONSULTING. S.A.P., NOT REALLY IN THAT BUCKET. FRANCINE: WE HAVE INTEL PLANS TO CUT MORE THAN 20% OF STAFF. WHAT MORE DO WE KNOW? > > A PERSON FAMILIAR WITH THE MATTER SAID THEY COULD BE ANNOUNCED THIS WEEK. THIS WILL BE THE FIRST MAJOR REORGANIZATION COMING FROM THE NEW CEO WHO TOOK OVER THE COMPANY LAST MONTH. HE HAS BEEN TRYING TO REORIENT THIS COMPANY AS THEY’VE SEEDED A LOT OF GROUND TO COMPETITORS. THIS SEEMS LIKE SOME OF HIS STRATEGY STARTING TO EMERGE NOW. FRANCINE: EARNINGS TOMORROW? > > THAT STRATEGY WITH — IS WHAT WILL BE LOOKING OUT FOR. IS IT CUT, CUT, CUT? IS IT REORIENT? THAT WILL BE ON THE DOCKET TOMORROW. FRANCINE: A LOT GOING ON, CHARLIE, THANK YOU FOR BRINGING US UP TO DATE. DON’T MISS OUR INTERVIEW WITH THE BUSINESS BANK PRESIDENT AND THE IMF SPRING MEETINGS IN WASHINGTON. THAT INTERVIEW AT 12:30 P.M. LONDON TIME TODAY. IF YOU LOOK AT THAT MARKETS, LET’S GIVE YOU A MARKET UPDATE BECAUSE THERE IS QUITE A LOT GOING ON. THE STOCKS DEFINITELY BREATHING A SIGH OF RELIEF, STOCKS JUMPING. FUTURES IN THE U.S. BUT ALSO EUROPEAN EQUITIES JUMPING, BONDS RISING. THERE’S A LOT OF RELIEF ACROSS GLOBAL MARKETS AFTER THE TRUMP ADMINISTRATION DEFUSED SOME OF THE TENSIONS THAT HAVE RATTLED INVESTORS. TWO MAIN THINGS, DONALD TRUMP SAYS HE DOES NOT PLAN TO FIRE JAY POWELL AND THERE’S A LOT OF GROWING OPTIMISM OF EASING U.S.-CHINA TRADE TENSIONS AND THAT IS BOOSTING THE MOOD. TRUMP SAID HE PLANS TO BE VERY NICE TO CHINA IN ANY TALKS AND TARIFFS WILL DROP AT THE TWO COUNTRIES CAN REACH A DEAL. YOU CAN SEE THAT PLAYING ACROSS EUROPEAN MARKETS WITH THE DAX GAINING SOME 3%. UP NEXT, “BLOOMBERG BRIEF.” THIS IS “BLOOMBERG.” ♪