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• 00:00PUT TWO MORE FOR THE CONVERSATIONS THAT MATTER AND THE INSIGHTS YOU NEED. LET’S GET STARTED. > > NEWSMAKERS AND MARKET MOVERS “THE PULSE.” , THIS IS FRANCINE: GOOD MORNING AND WELCOME TO “THE PULSE.” IN JUST A MOMENT WE WILL DISCUSS THE MARKETS, TREASURIES, AND THE FOUR DAY CELLO. THE POUND IT SINKS TO THE LOWEST LEVEL SINCE 2023. WE ARE JOINED BY NORA SZENTIVANYI FROM JP MORGAN AND RACHEL EVANS IN A MOMENT. FIRST, LA’S WORST NATURAL DISASTER IN DECADES. AT LEAST FIVE PEOPLE A BEEN KILLED, MORE THAN 100,000 HAVE BEEN FORCED TO FLEE DEVASTATING WILDFIRES IN CALIFORNIA. THERE ARE CURRENTLY FIVE FIRES BURNING ACROSS LOS ANGELES DRIVEN BY HURRICANE STRENGTH WINDS. JOE BIDEN HAS CANCELED HIS FINAL OVERSEAS TRIP AS U.S. PRESIDENT. LET’S BRING IN ROS MATHIESON. IT IS PRETTY HARD TO IMAGINE THE SCALE OF EXACTLY WHAT IS HAPPENING. GIVE US SOME CONTEXT IN TERMS OF THE SIZE OF THE FIRE AND THE OUTBREAK. > > THESE ARE EXTRAORDINARY SCENES. WE HAVE SEEN WIND GUSTS UP TO 80 MILES PER HOUR, EXPECTED TO CONTINUE TO THURSDAY, POSSIBLE WIND STORMS AGAIN NEXT WEEK. NO RAIN. FIREFIGHTERS STRUGGLING TO EXCESS WATER SUPPLY. WE HAVE OUR FRESH FIRE THAT BROKE OUT OVERNIGHT IN THE HOLLYWOOD HILLS. THESE ARE COMING INTO DENSELY POPULATED AREAS. IT IS 27 THOUSAND ACRES THAT HAS BURNED SO FAR. FOR A BIT OF COMPARISON, SOME PEOPLE ARE SAYING IT IS PRETTY MUCH THE CENTRAL AREA OF LONDON. IT IS LARGE PARTS OF EQUIVALENT TO DOWNTOWN MANHATTAN AND BROOKLYN. IT IS A SIZABLE AREA THAT IS BURNING. HOUSES, SCHOOLS, PROPERTY, BUSINESSES. A NUMBER OF PEOPLE HAVE LOST THEIR LIVES. FIREFIGHTERS ARE STRUGGLING TO CONTAIN THESE BLAZES. NO SINCE IT WILL GET BETTER ANYTIME SOON. FRANCINE: PRESIDENT-ELECT DONALD TRUMP HAS BLAMED GOVERNOR NEWSOM FOR THE DEADLY FIRES. PRES. TRUMP: IT IS VERY SAD BECAUSE I BEEN TRYING TO GET GAVIN NEWSOM TO ALLOW WATER — YOU WOULD HAVE TREMENDOUS WATER IF THEY SENT IT FROM THE PACIFIC. THEY ARE PROTECTING TINY LITTLE FISH AND OTHER AREAS, BY THE WAY , CALLED THE SMELT. FOR THE SAKE OF THE SMELT, THEY HAVE NO WATER. THEY HAVE NO WATER IN THE FIRE HYDRANTS TODAY. A TERRIBLE THING. WE ARE GOING TO GET THAT DONE. I WILL GET IT DONE FROM THE FEDERAL SIDE. HE DID NOT WANT TO SIGN IT BUT IT WILL NOT HAPPEN AGAIN LIKE THAT. THERE IS NO REASON. FRANCINE: WHY IS TRUMP BLAMING THE GOVERNOR OF CALIFORNIA? > > NEWSOM’S OFFICE HAD THOSE CLAIMS BY DONALD TRUMP ARE UNTRUE BUT OBVIOUSLY THESE TWO MEN HAVE A LONG HISTORY AND NONE OF IT IS GOOD. THEY HAVE TAKEN FREQUENT POT SHOTS AT EACH OTHER OVER THE YEARS AND TRUMP HAS PARTICULARLY TAKEN SHOTS AT CALIFORNIA AS WELL. TRUMP IS NEVER ONE TO MISS AN OPPORTUNITY TO TAKE A POLITICAL MOMENT IN SOMETHING. IF THIS WAS DURING THE ELECTION CAMPAIGN POTENTIALLY INTERESTING . HE IS THE INCOMING PRESIDENT. WHAT THIS TELLS US IS WE ARE GOING TO SEE A LOT OF TENSION BETWEEN DONALD TRUMP AND GAVIN NEWSOM IN CALIFORNIA ONCE DONALD TRUMP IS IN OFFICE IN A WEEK OR SO. WE ARE ALREADY SEEING GAVIN NEWSOM SAYING HE WANTS CALIFORNIA TO BE A BASTION OF RESISTANCE HE CALLS IT AGAINST SOME OF DONALD TRUMP’S POLICIES AROUND REGULATION, DEPORTATION. GAVIN NEWSOM HAS TENSIONS WITH ELON MUSK, A CLOSE CONFIDANT OF DONALD TRUMP. THIS IS TELLING US IN THEIR MINUTE, NOT MUCH ABOUT THE FIRES, THAT WE ARE GOING TO SEE A VERY FRAUGHT RELATIONSHIP GOING FORWARD. FRANCINE: ROS MATHIESON WITH THE LATEST ON U.S. POLITICS AND THESE HORRIFIC FIRES IN L.A. TURNING TO THE MARKETS, THE POUND HAS SLUMPED TO ITS WEAKEST SINCE 2023 AMID BROAD U.K. SELLOFF. JOINING US NOW, NORA SZENTIVANYI AND RACHEL EVANS. RACHEL, CAN YOU PUT THIS IN CONTEXT? THE U.K. IS VERY LITTLE BUFFERS, WHICH IS WHY THEY ARE BEING HURT THE MOST. THERE’S IS BEEN A GLOBAL MARKET KIND OF ROUTE FOR BONDS. > > THIS BEGAN IN THE U.S., KICKED OFF THE NEW YEAR COMES A BIT OF A SENTIMENT SHIFT AS EVERYONE STARTED TO THINK ABOUT THE INCOMING ADMINISTRATION UNDER TRUMP, WHAT THAT MIGHT MEAN FOR INFLATION PRESSURES, AND BOND SUPPLY. ON SUPPLY HAS BEEN SOMETHING THE BOND MARKET IS ALWAYS THINKING ABOUT THAT HAS THESE LITTLE SPIKES WHERE IT IS PARTICULARLY CONCERNED ABOUT THESE THINGS. THIS IS ONE OF THOSE MOMENTS. FOR THE U.K., WHICH ALREADY HAS BIG QUESTIONS TO ANSWER ABOUT ITS DEBT SUSTAINABILITY, CAME UP FOLLOWING THE BUDGET FROM THE INCOMING LABOR GOVERNMENT BACK IN OCTOBER. THIS HAS BECOME A PARTICULAR CATALYST FOR THEM TO REALLY BE SUFFERING FROM THIS YIELD RISE MORE GENERALLY. FRANCINE: WE SAW MOVES THAT IS WORRYING WHICH IS WEAKNESS IN POUND AND WHAT WE HAVE IN YIELDS. IS THERE A DANGER AT SOME POINT YOU HAVE THE LOSS OF THE WERE PEOPLE THE WORRY ABOUT THE U.K. — PHILOSOPHY THAT PEOPLE WORRY ABOUT U.K. AND SO FULFILLING PROPHECY? > > I THINK THAT DYNAMIC HAS ALREADY STARTED TO PLAY OUT. THE U.K. IS IN A TRICKY SITUATION BECAUSE NOT ONLY DOES IT HAVE A PRETTY WEAK GROWTH BUT ALSO INFLATION HAS PROVED TO BE QUITE STICKY AND NOW I THINK THERE ARE CONCERNS THAT PRICE PRESSURES WILL CONTINUE TO RISE ALONGSIDE WEAK GROWTH WHICH PUTS THE BANK OF ENGLAND INTO A BINDER AND REDUCES ITS ABILITY TO REDUCE POLICY RATES. GENERALLY, THE MARKET IS SKEPTICAL ABOUT THE GOVERNMENT’S ABILITY TO FUND THIS LARGER FISCAL DEFICIT AND ALSO I THINK BUSINESS SENTIMENT FOR THE PRIVATE SECTOR, BUSINESSES IN PARTICULAR, HAS BEEN HIT BY THE INCREASE IN THE EMPLOYER’S SOCIAL SECURITY CONTRIBUTION. FOR THE U.K., THIS IS GOING TO BE A TRICKY YEAR. FRANCINE: IS THAT THE GOVERNMENT’S FAULT BECAUSE OF THE BETTERMENT THIS BUDGET? > > I THINK THEY MISCALCULATED THE MARKETS WILLINGNESS TO LOOK THROUGH THESE PRESSURES. AND I THINK NOW IT IS RECKONING DAY AND THEY’RE GOING TO HAVE TO DO WITH THE MARKET FALLOUT. POSSIBLY MAKE SOME ADJUSTMENTS TO THE BUDGET, MAYBE INCREASE TAXES AND CUT SPENDING, BUT THEY’RE GOING TO HAVE TO RESOLVE THIS RECORD PRESSURE THAT IS BUILDING RIGHT NOW IS SOME SORT OF POLICY RESPONSE IN THE END. FRANCINE: THERE HAVE BEEN MANY PARALLELS BETWEEN THE BUDGET DISASTER UNDER LIZ TRUSS AND NOW THE DEBT CRISIS OF THE 1970’S. WHAT ARE THE PARALLELS? > > IMAGE MENTIONED THAT TWO PEOPLE UP BEEN JUMPING TO FOR COMPARISONS. IT IS WORTH NOTING THE MARKET IS A LOT STRONGER IN TERMS OF ITS STRUCTURE TODAY THAN IT WAS UNDER LIZ TRUSS. THERE WAS A LIQUIDITY CRUNCH THAT REALLY FURTHER THE SELLOFF IN GILT. THAT IS LARGELY GONE AWAY AND WE HAVE ALMOST A STABLE SYSTEM. WHENEVER WE SEE A MULTI-DAY SEVERE SELLOFF, OF COURSE THERE IS AN UNDERSTANDABLE JOB TO ARE LOOKING FOR THESE PARALLELS. I THINK WHAT WILL BE INTERESTING IS THE DEGREE TO WHICH THE U.K. SELLOFF CONTINUES PAST THE BROADER RISE IN YIELDS WE HAVE BEEN SEEN. THAT TO ME WOULD SIGNAL THIS IS NOT JUST SOMETHING THAT IS BECOMING A BIG PROBLEM FOR THE U.K. AND THIS EPICENTER, THEY ARE DECOUPLING FROM THAT RISE IN GUILDS ELSEWHERE AND BECOMING THE PLACE IN THE WORLD WE HAVE TO REALLY WATCH IN TERMS OF SUPPLY. FRANCINE: THE MORE THE MARKET ROUT CONTINUES COME THE MORE BASICALLY THEHOLE BECOMES FIGURE. SO FAR ABOUT 9 BILLION POUNDS LOST. IF IT CONTINUES, THAT WHOLE WILL BE EVEN BIGGER. > > FOR SURE. THE PRESSURE IS BUILDING WITH THE RISE IN INTEREST EXPENSES AS BOND YIELDS CONTINUE TO RISE. THERE IS A DIRECT PASS THROUGH TO EXPENDITURE SIDE OF THE BUDGET SO AS A U.K. ECONOMIST HAS BEEN SAYING, THERE IS INCREASED PRESSURE I THINK TO ANNOUNCE FURTHER MEASURES TO CONTAIN THE BUDGET DEFICIT. TIMING OF THAT THE NEXT COUPLE OF MONTHS, THEY ARE CERTAINLY GOING TO HAVE TO COME OUT WITH SOME ANNOUNCEMENTS. I THINK OF THIS PRESSURE CONTINUES TO BUILD. BUT THERE IS ALSO A BROADER PHENOMENON ONGOING WHICH IS THE MARKETS GLOBALLY ARE CONCERNED ABOUT THE STICKY INFLATION AND HIGHER INFLATION, ESPECIALLY WITH RESPECT TO THE POTENTIAL INCREASES IN U.S. TARIFFS. FRANCINE: ON THE BANK OF ENGLAND, WITH A STEP IN TO TRY AND STABILIZE? > > I THINK WE ARE NOT THERE YET. CERTAINLY ON THE POLICY RATE SIDE, WE THINK THERE IS PROBABLY SPACE FOR ANOTHER CUT IN THE NEAR TERM BUT WHEN WE REEVALUATE THE ENTIRE YEAR, THE SCOPE FOR RATE CUTS THIS YEAR, I THINK IT IS GOING TO BE INCREASINGLY DIFFICULT FOR THE BANK OF ENGLAND TO HAVE CONFIDENCE IN REDUCING THE INTEREST RATES FURTHER TO THE EXTENT THE MARKETS HAD PREVIOUSLY BEEN PRICING. I THINK WE JUST WIGGLE ROOM FOR THE BANK OF ENGLAND IS MUCH MORE NARROW IF WE DON’T GET FISCAL DEFICIT CONSOLIDATION. FRANCINE: IS THERE ANYTHING THAT COULD HAPPEN TODAY FOR THE MARKETS TO BE CALMER, THE TREASURY SIDE? > > WE DID SEE A STATEMENT FROM LAST NIGHT TRYING TO SORT OF CALM DOWN. IT DOESN’T YET TO HAVE APPEARED TO OF WORK BUT A DIRECT ATTEMPT TO ADDRESS THAT ISSUE. WE ALSO HAVE SOME POLICE SPEAKERS STARTING TO COME OUT MOST OF I AM SURE THEY WILL BE ASKED ABOUT THAT MOST OF DEPENDING ON WHAT THEY SAY, THAT COULD HELP SORT OF PUT A FLAT THE GILT BUT IT WILL BE DIFFICULT. WHEN THE MARKET GETS ROLLING, IT IS HARD TO BRING IT TO A CLOSE. FRANCINE: HOW DIFFICULT IS IT TO SEE THESE INFLATION CONCERNS? HOW MUCH OF IT — CENTRAL BANKS HAVE BEEN SAYING THIS FOR A WHILE, IT IS TO BE GRADUAL COME CUTTING INTEREST RATES BECAUSE THE LAST MILE WILL BE MUCH MORE DIFFICULT. HOW MUCH OF THIS IS JUST THE FACT OF THAT AND HOW MUCH OF IT IS TRUMP AND TARIFFS WORRIES? > > I THINK THERE’S AN UNDERLYING STICKINESS IN CORE INFLATION TO BEGIN WITH. WE HAVE ENDED 2024 WITH CORE INFLATION GLOBALLY STILL RUNNING AT 3%, WHICH IS WELL ABOVE THE 2% TARGET FOR MOST DEVELOPED MARKET CENTRAL BANKS. A LOT OF THAT HAS TO DO WITH CONTINUED STICKINESS IN SERVICE PRICES. I THINK ALONGSIDE THAT, THERE IS AN ADDED CONCERN THE TARIFF HIKES WILL ADD FURTHER TO GOOD PRICE INFLATION MOST OF AN ALREADY INTO LATE LAST YEAR, WE SAW SOME MANUFACTURED GOODS PRICES WHICH ARE NOW RUNNING AT ROUGHLY 1% — EARLIER ON, THEY HAD BEEN IN DEFLATION SO WE HAVE ALREADY SEEN SOME REBOUND. ON TOP OF THAT IF WE GET TARIFF HIKES, WE GET SOME WEAKENING IN CURRENCIES OUTSIDE THE U.S. THAT WILL FUEL INFLATION. THAT WILL CERTAINLY LIMIT THE SPACE. AT THE SAME TIME I THINK THERE’S GOING TO BE SOME DIFFERENTIATION ACROSS COUNTRIES AS WE GO THROUGH 2025. I THINK THE U.S. CERTAINLY FALLS INTO THE STICKY INFLATION BUCKET , THE U.K. PERHAPS AS WELL. IN ELSEWHERE, WE ARE SEEING DISINFLATION TRADE INTACT. I THINK THE DIFFERENCE IS IN DOMESTIC DEMAND CONDITIONS, BROADER MACRO ECONOMIC CONDITIONS ARE BROADLY RESPONSIBLE FOR THESE DIFFERENCES. OBVIOUSLY, WE HAVE WE DEMAND AND GROWTH IN YOUR AREA. QUITE RESILIENT GROWTH IN THE U.S. I THINK THAT WILL DRIVE THIS DIVERGENCE BETWEEN STICKY U.S. INFLATION ON THE ONE HAND AND SOFTER INFLATION ON — ELSEWHERE. FRANCINE: THANK YOU. COMING UP, ANOTHER ROUND OF CHIP EXPORT CURBS. WE TALK TECH NEXT. THIS IS “BLOOMBERG.” FRANCINE: WELCOME BACK. BLOOMBERG HAS LEARNED THE BIDEN ADMINISTRATION IS PLANNING FURTHER RESTRICTIONS ON THE EXPORTS OF AI CHIPS FROM THE LIKES OF NVIDIA. LET’S BRING IN TOM MACKENZIE. THANK YOU FOR JOINING US. WHAT DO WE KNOW? > > WE KNOW THESE COULD BE CONNECTED AS SOON AS FRIDAY — ENACTED AS SOON AS FRIDAY. THEY ARE LOOKING AT THREE TIERS ESSENTIALLY IN TERMS OF RESTRICTING A ACCELERATORS GLOBALLY. THE FIRST IS ALLIES OF THE U.S. OR U.K., CANADA, AUSTRALIA, TAIWAN WILL HAVE FREE ACCESS TO AS MANY ACCELERATORS FOR COMPANIES LIKE NVIDIA AS THEY ONE. THE OTHER TWO — THE FIRST TIER, U.S. ADVERSARIES. CHINA AND RUSSIA, COMPLETELY RESTRICTED. THE SECOND TIER IS INTERESTING BECAUSE THAT IS MOST OF THE REST OF THE WORLD BEYOND THOSE TWO OTHER SEGMENTS. THERE WILL BE LIMITS. THERE WILL BE SOVEREIGN CAPS ON TERMS OF THE NUMBER OF A ACCELERATORS EACH COUNTRY CAN GET. AS A COMPANY WITHIN THOSE COUNTRIES, YOU CAN APPLY FOR MORE, UNLIMITED NUMBER OF CHIPS IF YOU MEET CERTAIN REQUIREMENTS IN TERMS OF HUMAN RIGHTS AND SECURITY THAT MEET THOSE U.S. REQUIREMENTS. YOU HAVE TO GET THESE SIGNOFF FROM THE U.S. IN ORDER TO INCREASE THAT NUMBER OF AI ACCELERATORS. THE CONTEXT IS THE U.S. IS LEADING IN THIS TECHNOLOGY. THEY KNOW THEY HAVE THAT LEVERAGE. REPUBLICANS AND DEMOCRATS HAVE SAID WE SHOULD USE AS LEVERAGE TO TRY TO PRY SOME OF THESE COMPANIES COME INVESTORS AWAY FROM CHINA. THIS IS THE BASE APPROACH. THREE DIFFERENT TIERS. FRANCINE: THE TIMING IS SO ODD BECAUSE THERE IS A NEW PRESIDENT JANUARY 20. > > THE TIMING IS INTRIGUING. ONE WAY TO LOOK AT IT, THIS BUILDS ON THE RESTRICTIONS THAT HAVE COME THROUGH FROM THE BIDEN ADMINISTRATION, TARGETED AROUND CHINA AND INCREASINGLY RUSSIA’S ABILITY TO GET A HOLD OF SOME OF THESE CUTTING-EDGE TECHNOLOGIES WHETHER IT IS THE SOFTWARE, HARDWARE, COMPONENTS THAT GO INTO IT. IN THAT SENSE, IT IS RATIONAL AND BUILDS ON THE REST OF THE PROCESS THE BIDEN ADMINISTRATION HAS PUSHED THROUGH. VERY CLOSE TO THE INAUGURATION AND THE NEW TRUMP ADMINISTRATION COMING INTO PLACE. QUESTIONS AROUND THE CURRENT REGISTRATION COME THE INCOMING ONE WILL BE MORE BASED ON BROAD-BASED TARIFFS THEN SECTOR BY SECTOR TARIFFS. NVIDIA, VERY UPSET ABOUT THIS SITE IT WILL DAMAGE THE U.S. ECONOMY, IS ECONOMIC GROWTH IN THE INDUSTRY IS PUSHING BACK AGAINST THIS. THESE MEASURES COULD COME IN AS SOON AS TOMORROW. FRANCINE: TOM MACKENZIE WITH THE LATEST ON TECH. NORA SZENTIVANYI, GLOBAL ECONOMIST AT JP MORGAN, STILL WITH US. THIS IS STILL PART OF THE UNEASINESS IN THE WEIGHT THE U.S. DEALS WITH CHINA. WILL IT EXCEPTIONALISM ABOVE EVERYTHING ELSE SO THE REST OF THE WORLD LOSES WHEN TRUMPETS AND A POWER? > > WE ARE SEEING U.S. EXCEPTIONALISM PLAY OUT. WE SEE U.S. BUSINESS INTIMATE CONTINUES TO SOAR WHEREAS THE REST OF THE ROAD SENTIMENT HAS BEEN DETERIORATING. I THINK WE WILL SEE A CONTINUATION OF THAT, ESPECIALLY ONCE THE NEW U.S. POLICIES ARE ANNOUNCED IN A FEW WEEKS TIME. MOST LIKELY WE KNOW THE U.S. — INCOMING U.S. ADMINISTRATION IS INTENDING TO REDUCE TAX AND REVELATORY — REGULATORY BURDEN. AT THE SAME TIME, THEY ARE FLAGGING POLICIES THAT ARE GOING TO INCREASE COST THROUGH HIGHER TARIFFS AND RESTRICTIONS ON IMMIGRATION, WHICH I THINK WILL WEIGH ON SENTIMENT IN THE REST OF THE WORLD AND PROBABLY DIRECTLY AS WELL. WILL WEIGH ON TRADE FLOWS. I THINK THE BIG QUESTION FOR ME RIGHT NOW IS IF THE U.S. WOULD LIKE TO USE THE INCREASE IN TARIFFS TO BOOST TAX REVENUES TO FUND FISCAL SPENDING, I THINK THAT IS GOING TO FURTHER FUEL INFLATION PRESSURES. FRANCINE: BUT ALSO DEBT. IS THERE REALLY A WORRY WE ARE NOT TALKING ABOUT — ENOUGH ABOUT U.S. DEBT, THAT SOMETHING COULD GO WRONG? THE CATALYST COULD BE SOMETHING IN EUROPE. > > YES, THAT CONCERN AROUND U.S. DEBT HAS BEEN THERE. I THINK IT WILL REMAIN THERE ESPECIALLY IF THEY CUT TAXES AND INCREASE FISCAL STIMULUS AS EARLY AS THIS YEAR IN THE U.S. AND I THINK THAT FUELS INFLATION FURTHER. I THINK IN EUROPE AS WELL, WE HAVE SEEN CONCERNS AROUND REDUCED FISCAL CONSOLIDATION AND FRANCE FOR EXAMPLE BUT I THINK EUROPE HAS MORE FISCAL SPACE, ESPECIALLY IF PLACES LIKE GERMANY ARE ABLE TO REFORM THEIR DEBT RATE TO PROVIDE THAT SPACE FOR MORE FISCAL STIMULUS. I THINK EUROPE PERHAPS HAS A BIT MORE LEEWAY THAN THE U.S. DOES WHERE DEBT HAS BEEN BUILDING IN A VERY SIGNIFICANT WAY FOR SOME TIME NOW. FRANCINE: THANK YOU FOR JOINING US, NORA SZENTIVANYI, JP MORGAN. YOU ARE LOOKING AT LIVE PICTURES FROM WASHINGTON AT A PRESIDENT JIMMY CARTER STATE FUNERAL. SPECIAL COVERAGE BEGINS TODAY 5:00 P.M. LONDON TIME ON BLOOMBERG TV AND RADIO. PLENTY MORE TO COME. THIS IS “BLOOMBERG.” ♪ > > TARIFFS IS GOING TO BE JUST FOR EQUITY INVESTORS, THAT IS GOING TO BE THE BIGGEST FOCUS BECAUSE THAT CAN AFFECT EARNINGS. I DON’T THINK WE WILL KNOW ABOUT TAXES FOR QUITE A WHILE. I THINK TARIFFS WE WILL KNOW QUITE A BIT IN THE NEXT MONTH OR TWO. IF THEY CAN EXECUTE ON THESE POLICIES AND GET TO WHERE THE WORKERS ARE COMFORTABLE WITH THIS, THE SECOND HALF OF THE YEAR COULD BE MUCH BETTER FOR EQUITIES. FRANCINE: MIKE WILSON. ADVISERS TO PRESIDENT-ELECT DONALD TRUMP ARE SAID TO BE CONSIDERING MICHELLE BAUMAN AS THE FED’S NEXT VICE CHAIR. MICHAEL BARR HAS SAID HE WILL STEP DOWN FROM THE VICE CHAIR ROLE WHILE RETAINING HIS SEAT ON THE FED’S BOARD OF GOVERNORS. ALSO DRAWING UP A SHORT LIST OF POTENTIAL REPLACEMENTS RICHARD JAY POWELL WHOSE TERM ENDS IN MAY 2026. UNION REPRESENTING U.S. DOCKWORKERS HAS REACHED A TENTATIVE DEAL WITH PORT OPERATORS FOR A NEW SIX-YEAR CONTRACT OF WHAT IMPOSSIBLE STRIKE. BLOOMBERG HAS LEARNED THE AGREEMENT GUARANTEES UNION JOBS WHEN CERTAIN TECHNOLOGIES ARE IMPLEMENTED, INCLUDING THE SEMI AUTOMATED CRANES THAT HAD BEEN A STICKING POINT. THE DEAL STILL NEEDS TO BE RATIFIED BY THE TWO SIDES. A STATE FUNERAL TAKEN PLACE IN WASHINGTON TODAY FOR THE FORMER U.S. PRESIDENT JIMMY CARTER. THESE ARE LIVE PICTURES AS HIS BODY LIES IN STATE AT THE CAPITOL WERE MEMBERS OF CONGRESS HAVE BEEN PAYING LAST RESPECTS. AFTER THE SERVICE IN WASHINGTON, CARTER WILL BE TAKEN BACK TO GEORGIA FOR A PRIVATE BURIAL. U.S. CASH MARKETS ARE CLOSED FOR NATIONAL DAY OF MOURNING. WE WILL HAVE SPECIAL COVERAGE OF THE FUNERAL TO :00 P.M. U.K. TIME — 2:00 P.M. U.K. TIME. COMING UP, MORE OF OUR INTERVIEW MOST OF HE APPEARED WITH DONALD TRUMP EARLIER THIS WEEK TO ANNOUNCE MULTIBILLION FRANCINE: GOOD MORNING AND WELCOME TO “THE PULSE.” LOS ANGELES HAS PLUNGED INTO ITS WORST NATURAL DISASTER IN DECADES, DEADLY WILDFIRES FORCE MORE THAN 100,000 RESIDENTS TO FLEE. GILT SHAKEUP SOME OF THE EARLY LOSSES ON THE POUND FALLS TO ITS WEAKEST LEVEL AGAINST THE DOLLAR NEVER A YEAR AMID A BROAD U.K. SELLOFF. THE BIDEN ADMINISTRATION PLANS ANOTHER ROUND OF CURBS ON AI CHIPS EXPORTS JUST DAYS BEFORE LEAVING OFFICE. PRESENT LIKE DONALD DUBAI PROPERTY GROUP DAMAC WILL BE INVESTING $20 BILLION IN U.S. DATA CENTERS. THE FOUNDER AND CHAIRMAN SPOKE TO BLOOMBERG A SHORT TIME AGO. > > WE HOPE SOMETIME THIS YEAR WE WILL BE ANNOUNCING SOME ACQUISITIONS AND THEN DESIGN AND CONSTRUCTION. THERE IS A LOT OF WORK WE HAVE TO DO TO INVEST THE $20 BILLION. > > THAT IS A SUBSTANTIAL AMOUNT OF MONEY. HOW ARE YOU FINDING THIS DEAL? CAN YOU PROVIDE SPECIFIC DETAILS ON WHERE THAT $20 BILLION IS COMING FROM? > > THIS IS ASSET-BASED BUSINESS, INFRASTRUCTURE NORMALLY 60% TO 70% — FINANCIAL INSTITUTIONS WERE BONDS LEVERAGE FROM PROPERTY WILL BE ABLE TO — EQUITY WHICH WILL BE IN THE RANGE OF ANOTHER 30% WHICH WILL BE ABOUT $5 MILLION TO $6 MILLION. — $5 BILLION TO $6 BILLION. HAVING SAID THAT, AS WE GET MORE OPPORTUNITY, WE WILL BE MORE THAN HAPPY TO BRING PARTNERS WITH THOSE. > > WHEN YOU TALK ABOUT THOSE THIRD-PARTY PARTNERS, WHO ARE YOU TALKING ABOUT SPECIFICALLY? ARE THERE BANKS YOU HAVE IN MIND? > > WE ARE TALKING TO PARTNERS IN U.S. WHO WILL BRING ADDED VALUE. IF THEY ARE IN INSTRUCTION BUSINESS, POWER BUSINESS. FIRST WE ARE LOOKING AT ADDED VALUE PARTNER NOT JUST TO BRING MONEY BUT HELP US EXECUTE IN THIS BUSINESS. THAT WILL BE THE FIRST CHOICE. FRANCINE: DAMAC CHAIRMAN HUSSAIN SAJWANI. WITHOUT IDENTIFYING TRUMP BY NAME, GERMAN CHANCELLOR OLAF SCHOLZ SAID HE DISCUSSED THE LATEST OF ELEMENTS WITH EUROPEAN ALLIES AND A PHONE CALL ON WEDNESDAY. JOINING US NOW IS LESLIE VINJAMURI. ALSO STEPHANIE BAKER. LESLIE, FIRST OF ALL, THERE’S BEEN A LOT IN THAT FIRST PRESS CONFERENCE FROM MAR-A-LAGO THAT LASTED ABOUT 90 MINUTES AND WAS VERY WIDE-RANGING COME AT TIMES IT WAS DIFFICULT TO UNDERSTAND WHETHER IT WAS POLICY OR JUST VENTING FROM DONALD TRUMP. AS YOU GO TO THIS NEW ADMINISTRATION, WHAT DO YOU LOOK FOR? > > A PRESS CONFERENCE, WITH DONALD TRUMP I WAS LOOKING TO SEE WHERE IS HE SEEKING TO CHANGE THE NARRATIVE, TO MOVE THE NEEDLE, AND TO PUSH THE BOUNDARIES OF WHAT MANY PEOPLE IN THE POLICY DOMAIN WHETHER IT IS DOMESTIC OR FOREIGN POLICY, CONSIDER TO BE DOABLE, ACCEPTABLE, AND THE BIG THING THAT JUMPED OUT OF THE FOREIGN POLICY SIDE WERE THE COMMENTS ON GREENLAND. WE’VE HEARD THE ONGOING COMMENTS ON CANADA. THESE ARE OBVIOUSLY NORM-SHIFTING. PANAMA. IF YOU LOOK AT WHAT DONALD TRUMP IS TRYING TO DO, HE IS TRYING TO GET PEOPLE TO RETHINK THE RELATIONSHIP OF THE U.S. WITH THESE COUNTRIES. HE OBVIOUSLY IN THE REARVIEW OR FRONT VIEW MIRROR WE HAVE AN UNDERSTANDING OF THE ART TAKE, OF GEOPOLITICAL COMPETITION, OF SEA LANES. THESE WILL BE GUIDING MUCH OF THE FOREIGN POLICY CONSIDERATIONS OF THE NEXT ADMINISTRATION THAT WOULD HAVE BEEN GUIDING A KAMALA HARRIS ADMINISTRATION AS WELL. BUT TO MAKE THIS UP WITH QUESTIONS OF SOVEREIGNTY, IT IS VERY INTERESTING AND OBVIOUSLY NOT ORTHODOX STYLE. ON THE DOMESTIC SIDE, I WAS MOST STRUCK BY LAST FRIDAY’S VOTE TO NOMINATE THE SPEAKER OF THE HOUSE JOHNSON THAT IT DID NOT GO AS SMOOTHLY. WE ALL KNOW TRUMP HAD ENDORSED THAT IN ADVANCE AND IT STILL DID NOT GO THROUGH QUICKLY AND SMOOTHLY. WE ARE ALL LOOKING TO SEE WHAT WILL THE GUARDRAILS BE AND HOW MUCH PUSHBACK WILL THERE BE ON PRESIDENT TRUMP’’S ATTEMPT TO PUSH THROUGH HIS DOMESTIC AGENDA? WE ARE SEEING HIS PARTY IS NOT FULLY UNITED STUFF THEY ARE GOING TO TRY TO TAKE THROUGH AN OMNIBUS BILL — BORDER SECURITY, TAX CUTS, ENERGY SECURITY, ENERGY TRANSITION POLICIES. MANY THINGS IN THAT WOULD BE HARD FOR ANY ADMINISTRATION. WE HAVE SIGNS — WE ARE NOT SURPRISED THE DEMOCRATS WILL PUSHBACK, BUT WHAT IS INTERESTING TO SEE THAT THE REPUBLICAN PARTY IS NOT FULLY UNITED ON THE FOREIGN POLICY SIDE, THE QUESTION IS LESS WHO IS GOING TO PUSH BACK AT HOME. IT IS MUCH MORE HOW ARE LEADERS IN EUROPE AND IN OTHER PARTS OF THE WORLD GOING TO CONTEND NOT ONLY WITH DONALD TRUMP, BUT THE BIG NEWS ITEM HERE IN THE U.K. HAS BEEN ELON MUSK ON TWITTER. WE ARE SEEING GRUBS LEADERS NOW BEGINNING — EUROPE’S LEADERS NOW TO SPEAK OUT AGAINST THE COMMENTS AND THE INTERVENTIONS THAT ELON MUSK IS MAKING. THIS IS A VERY COME AGAIN, UNORTHODOX, UNCONVENTIONAL STYLE OF GOVERNANCE. QUITE FRANKLY, AND SOME WAS COMPARED TO TRUMP’S FIRST TERM IN OFFICE. FRANCINE: STEPHANIE, WHEN TRUMP SUGGESTS USING ECONOMIC FORCE WILL BASICALLY MAKE CANADA BECOME A U.S. STATE BECAUSE HE WILL IMPOSE TARIFFS ON CANADIAN GOODS, HOW SHOULD LEADERS REACT TO IT? WE HAVE SEEN PRETTY STRONG REACTIONS FROM CANADIAN POLITICIANS WHEN HE ATTACKS EUROPE, MUCH MORE MUTED RESPONSE. > > IN THE CASE OF CANADA, IT SPED UP THE DEPARTURE OF JUSTIN TRUDEAU. HE HAD BEEN UNDER PRESSURE FOR MANY MONTHS WITH FOLLOWING APPROVAL RATINGS AND DISAGREEMENT WITH HIS FINANCE MINISTER CHRYSTIA FREELAND WHO THOUGHT THEY SHOULD RESPOND FULLY TO THE THREAT OF TARIFFS. THAT ULTIMATELY LED TO HIS DECISION TO STEP DOWN. I THINK IN EUROPE, THE REACTION PARTICULARLY TO ELON MUSK AND HIS ATTACKS ON VARIOUS LEADERS HAS BEEN MUTED. THEY HAVE HIT BACK AT HIM. MACRON HAS, SO HAS OLAF SCHOLZ. I THINK IT POSES A UNIQUE CHALLENGE BECAUSE HE IS INTERVENING IN EUROPEAN POLITICS IN THE WAY WE HAVE NOT SEEN BEFORE. THIS IS THE WORLD’S RICHEST MAN SIDING WITH RIGHT-LEANING PARTIES, RIGHT-WING PARTIES, IN PARTICULAR TODAY, HE IS GOING TO BE DOING THIS X EVENT WITH THE LEADER OF GERMANY’S FAR-RIGHT PARTY AFD PARTY, WHICH THE EU WILL BE WATCHING TO SEE IF IT VIOLATES ANY EU RULES ON DISINFORMATION. THIS IS AN EXTRAORDINARY INTERVENTION BY THE WORLD’S RICHEST MAN. FRANCINE: YOU SAID THE WORLD’S RICHEST MAN. I GUESS THE CONCERN IS IT IS NOT CLEAR WHETHER HE IS FULLY ALIGNED WITH TRUMP OR HE IS JUST AN ADVISOR. HOW DO YOU SEE THAT RELATIONSHIP? > > TRUMP HAS BEEN FAIRLY SILENT, ALLOWING MUSK TO DO WHAT HE WANTS, WHETHER OR NOT HE IS DOING IT WITH THE IMPLICIT APPROVAL OR PERHAPS HE MAY DECIDE TO INTERVENE AT SOME POINT. WE DON’T KNOW. THAT IS PART OF THE PROBLEM. MUSK HAS THIS HUGE AMOUNT OF INFLUENCE BECAUSE HE IS SO CLOSE TO TRUMP AND PROVIDED $250 MILLION TO HELP THEM GET ELECTED , BASICALLY CAMPED OUT AT MAR-A-LAGO. IF YOU LOOK AT MUSK’S TWITTER FEED, HE IS OBSESSED, PARTICULARLY U.K. POLITICS. FRANCINE: I WAS ON X YESTERDAY AND 95% OF WHAT HE HAS BEEN TWEETING IS ALL ABOUT THE U.K.. LESLIE COME HOW TRICKY IS THAT FOR ALLIES? A COUNTRY LIKE THE U.K. BUT ALSO OTHER ALLIES COME HOW DO THEY DEAL WITH THE ADMINISTRATION BUT ALSO HOW DO THEY DEAL WITH ELON MUSK WHO IS A FORCE OF ITS OWN? > > THIS IS TRICKY. JANUARY 20 I THINK IS IMPORTANT MARK. IT ALREADY FEELS LIKE DONALD TRUMP IS IN THE WHITE HOUSE BECAUSE OF HIS VERY ACTIVE SIGNALING ON WHERE HE IS PLANNING TO GO. JANUARY 20 IS A TURNING POINT. HE BECOMES THE FORMAL SECOND TERM PRESIDENT OF THE UNITED STATES OF AMERICA. THERE WILL BE AN INCREASED EXPECTATION THAT CERTAINLY BY EUROPE, THAT DONALD TRUMP EITHER RESPONDS TO SOME OF THE MORE EGREGIOUS CLAIMS THAT ELON MUSK IS MAKING OR THAT HE IS — EUROPEANS ARE GRAPPLING WITH THIS. IT IS EXTREMELY NONCONFIDENTIAL, UNORTHODOX. SOME OF THE PUSHBACK MIGHT BE THROUGH DOMESTIC LEGISLATION. THAT OBVIOUSLY COULD TAKE MORE TIME. IT IS A SLOWER RESPONSE. MY CONCERN OR I GUESS MY QUESTION IS, PRESIDENT TRUMP AT SOME POINT IS GOING TO WANT THINGS FROM EUROPE. IT IS OBVIOUSLY NOT A RELATIONSHIP OF EQUALS BUT THERE ARE STILL THINGS EUROPE CAN DO FOR DONALD TRUMP THAT WILL BE USEFUL MOST OF ELON MUSK AT A CERTAIN POINT THAT CAN GET IN THE WAY. WE ARE ALREADY HEARING A CONVERSATION HERE ABOUT WHETHER THE U.S. AMBASSADOR SHOULD BE SUMMONED. THAT OBVIOUSLY IS A COMPLICATED THING BEFORE JANUARY 20 SINCE THAT AMBASSADOR IS REALLY PRESIDENT BIDEN’S AMBASSADOR JANE HARTLEY. BUT ONCE THAT NEEDLE TURNS AND DONALD TRUMP IS FORMALLY THE U.S. PRESIDENT, I THINK THIS BECOMES A MUCH HIGHER STAKES CONVERSATION. FRANCINE: STEPHANIE, WE HAVE NOT HEARD MUCH ABOUT VLADIMIR PUTIN. > > NO, HE HAS BEEN RELATIVELY QUIET. I DID NOTE IN TRUMP’S PARIS TRIVIA AFTER THE OPENING OF NOTRE DAME, HE SAID REACHING AGREEMENT WITH RUSSIA AND UKRAINE WAS A PRIORITY AND HE ACTUALLY SAID IT WAS MORE DIFFICULT THAN THE CONFLICTS IN THE MIDDLE EAST, WHICH I THOUGHT WAS SIGNIFICANT. I THINK HIS WHOLE COMMENT ABOUT GREENLAND COULD BE SEEN THROUGH THE EYES OF WHAT HAS HAPPENED WITH RUSSIA OVER THE PAST FIVE YEARS. HE FIRST FLOATED THIS IDEA IN 2019 AND HE FRAMED IT AS A LARGE REAL ESTATE DEAL. SINCE THEN, WE’VE HAD BOTH GLOBAL WARMING, WHICH IS FURTHER OPENED UP THE ARCTIC AND NORTHERN SEA ROUTE, POSSIBLE TRADE ROUTES THROUGH THEIR, AS WELL AS VLADIMIR PUTIN’S IMPERIAL AMBITIONS BEING TAKEN MORE SERIOUSLY. I DO TAKE IS GREENLAND THREAT VERY SERIOUSLY. I THINK WE SHOULD NOT DISMISS IT AS JUST A BIZARRE INTERVENTION BY A MERCURIAL PRESIDENT-ELECT. I THINK HE IS DEADLY SERIOUS ABOUT IT. WHAT IS BIZARRE IS IT IS NOT REALLY A NEGOTIATING TACTIC BECAUSE I DON’T THINK DENMARK IS A POSTER FURTHER U.S. COOPERATION IN GREENLAND. THE U.S. HAS A BASE THERE WITH ABOUT 200 TROOPS. IT SERVED AS AN EARLY WARNING SYSTEM WHICH IS CRUCIAL GIVEN THE SERIOUSNESS OF THE SITUATION AROUND RUSSIA AND PUTIN. I DON’T THINK THERE’S ANYTHING STOPPING THE U.S. FROM INCREASED INVESTMENT IN GREENLAND, EXPLAINED A MILITARY BASE. IT IS KIND OF HARD TO SEE WHAT HIS TACTIC IS BUT I WOULD BE WATCHING IT PRETTY CAREFULLY. FRANCINE: THANK YOU FOR JOINING US, LESLIE VINJAMURI AND STEPHANIE BAKER. COMING UP, PRESSURE GROWS ON YOU K CHANCELLOR RACHEL REEVES AS THE CELL OF CONTINUES. WE WILL BE JOINED BY OPINION COLIN MISSED IN OCTOBER — WE WILL BE JOINED BY A GUEST. THIS IS “BLOOMBERG.” ♪ FRANCINE: THE POUND HAS FALLEN TO THE LOWEST LEVEL AGAINST THE DOLLAR IN MORE THAN A YEAR. GILT YIELDS CONTINUE TO RISE. IN A RARE INTERVENTION, THE TREASURY HAS ALSO SIGNALED IF HIGHER BORROWING COSTS BY ABOUT THIS WE’LL HAD ROOMS, THE CHANCELLOR WILL CUT PUBLIC SPENDING RATHER THAN RAISE TAXES. THANK YOU BOTH FOR JOINING US. FIRST OF ALL, WE HAVE SEEN — BASICALLY THE WORRYING SIGN IS WE SAW POUND MOVE, GILT MOVE, AND IT COULD SIGNAL INVESTORS ARE LOSING FAITH IN THE ABILITY TO CONTROL INFLATION AND FISCAL SPENDING. WHOSE FAULT IS THIS? > > I THINK THAT IS IMPORTANT QUESTION RIGHT NOW. THIS HAS OFTEN BEEN COMPARED TO THE TRUST MOMENT IN 2022. THERE ARE THREE REASONS WHY. THE FIRST ONE IS THE SCALE AND SPEED OF THE SHOP. BACK IN AUTUMN 2020 TWO, ESAU YIELDS RISE BY 100 BASIS POINTS IN A SPACE OF JUST FOUR DAYS. HERE WE ARE NOT LOOKING AT THE SAME SCALE. THE SECOND THING IS THAT AT THE TIME THAT WAS VERY U.K.-SPECIFIC, REACTION TRIGGERED BY BUDGET AND NOW GLOBAL. AT LEAST 70%, IF YOU LOOK AT THE MOVE IN YIELDS, I THINK I’M NOT WRONG, BUT IF YOU LOOK AT THE MOVE IN YIELDS, SINCE BEFORE THE BUDGET, 70% IS COMING TO THE U.S.. A BIG GLOBAL COMPONENT THAT WASN’T THERE IN 2022. FINALLY, WE HAD AN AMPLIFIER IN 2022, CRISIS, WHICH WE DON’T SEE RIGHT NOW. I THINK A LOT OF IT IS GLOBAL. THERE IS A FISCAL CONCERN THAT OBVIOUSLY SHE HAS A RESPONSIBILITY BECAUSE SHE HAD A CHOICE TO MAKE HER FISCAL PLANS MORE RESILIENT AND STABLE AND SHE LET HERSELF LOWER HEADROOM AGAINST HER TARGET. IT GIVES RISE TO SITUATIONS RIGHT THIS. IN A WAY, SHE COULD HAVE BULL APPROVED HER PLANS A BIT MORE. FRANCINE: BASICALLY COME OF THE CHANCELLOR HAS GIVEN HERSELF IS RAZOR THIN. > > ANA’S DETAIL WAS SOMETHING AROUND 12 BILLION OR SOMETHING WHICH MATHEMATICALLY MAKES IT — WE DON’T KNOW YET QUITE WHAT DISHWARE RATES WILL BE. I THINK ANA IS SLIGHTLY GENEROUS ON OUR CHANCELLOR. IT IS QUITE A BIT OF HER RESPONSIBILITY. THERE IS LACK OF BELIEF IN HER ECONOMIC PLAN AND THE TRANSFER MOMENTUM FROM THE PRIVATE SECTOR TO THE PUBLIC SECTOR CAN ASSUME THIS CAN INCREASE IN TAXES IS YET TO HIT, HAS LEFT INVESTORS WORRIED, SERIOUSLY WORRIED ABOUT THE U.K. SHE DOES BEAR THE RESPONSIBILITY. IT IS NOTABLE IN THE LAST FEW DAYS, MUCH MORE IN THE U.K. THAN THE U.S. THERE ARE CONSEQUENCES OF THIS. MY POINT IS VERY STRONG I THINK THE BANK OF ENGLAND ALSO HAS RESPONSIBILITY HERE BECAUSE THE LIQUIDITY THE HEDGE FUNDS IN PARTICULAR ARE ABLE TO ACCESS MUCH MORE ACCELERATED AND GENEROUS SYSTEM WHICH ALLOWS A LOT OF LIQUIDITY IN THE SYSTEM IS NOW BEING USED AGAINST THE U.K., POTENTIALLY IN A WAY WE CAN SEE WHAT IT WAS DOING WHAT, WHERE, HOW, IT WOULD MET — MAKE MUCH BETTER OVERSIGHT. FRANCINE: ANA, IS IT TOO SOON TO SAY, I’VE SEEN A COUPLE OF NUMBERS LIKE WITH — IT COULD CONTINUE IN THE U.K., BASICALLY WIPED OFF 9 BILLION, SO THAT KIND OF GETS AWAY OF HER BUFFERS, THE NUMBER COULD KEEP ON RISING AND RISING. > > OUR MATH IS THAT IT HAS CREATED A FISCAL — AN ADDED COST OF 11 BILLION SO THAT MEANS SHE WILL NEED TO FIND MORE SPACE. MARCUS MADE AN IMPORTANT POINT WHICH IS THE OPR WILL TAKE A SNAPSHOT OF THE CURVE IN EARLY FEBRUARY. I THEN, THINGS CAN CHANGE. OF COURSE THIS IS A MECHANICAL EXERCISE BUT WE STILL NEED TO WAIT UNTIL THEN. IT IS IMPORTANT TO NOTE THE BANK OF ENGLAND WILL MEET AT THE START OF FEBRUARY. WE THINK THEY WILL CUT RATES. I THINK TED IS ON TRACK THAT SHOWS THEY ARE CUTTING RATES. THEY HAVE BEEN PRETTY DEVILISH IN DECEMBER. LAST YEAR ACROSS OTHER MEETINGS, THEY SORT OF SURPRISED ON THE DEVILISH SIDE. IT IS POSSIBLE IN FEBRUARY THEY DO IT AGAIN COME THE CURVE SHIFTS AND THE PROBLEM IS NOT AS BIG. GOING BACK TO MY EARLIER POINT, SUCH A SMALL MARGIN OF HEADROOM AND POLICY ROOM, THIS SITUATION IS BOUND TO HAPPEN AGAIN AND AGAIN. SHE HAS LIMITED OPTIONS BECAUSE SHE CANNOT REALLY CUT INVESTMENTS. RAISING TAXES WILL BE DIFFICULT. SHE HAS SAID MAY BE SPENDING CONSTRAINT WILL BE THE ANSWER. THAT IS MOST LIKELY — THE MOST LIKELY COURSE OF ACTION TO DEAL WITH WHATEVER FISCAL DETERIORATION COMES UP. FRANCINE: THANK YOU BOTH. I COULD SPEAK TO YOU FOR AN HOUR. COMING, SOME OF OUR INTERVIEW WITH THE OUTGOING FCC CHAIRMAN GARY GENSLER NEXT. THIS IS “BLOOMBERG.” FRANCINE: THE OUTGOING CHAIR OF THE SEC SAYS THERE IS MORE STILL TO BE DONE IN REGULATING THE CRYPTO MARKET. GARY GENSLER PLANS TO STEP DOWN WHEN DONALD IS SWORN IN. HE TELLS US HE FEELS TERRIFIC ABOUT WHAT HE HAS ACHIEVED. > > IT IS A GREAT PRIVILEGE TO BE IN A ROLE LIKE THIS. 33RD CHAIR. IT IS A BIG COUNTRY. I START WITH IT IS SUCH A PRIVILEGE TO BE HERE AND THANK YOU TO JOE BIDEN FOR ASKING ME TO DO IT. WHAT IS REMARKABLE ABOUT THIS ROLE IS THAT IT OVERSEES THE 100 $20 TRILLION CAPITAL MARKET WHICH TOUCHES EVERYTHING IN OUR ECONOMY. YET TO RAISE MONEY FOR MOST OF WHAT WE DO IN OUR ECONOMY AND PEOPLE SAY — SO I FEEL TERRIFIC . YOU ASK ABOUT THE ATTACKS AND THINGS LIKE THAT. THAT IS WHAT PUBLIC POLICY IS ABOUT. YOU WALK INTO THE CENTRAL SQUARE AND YOU DEBATE THESE IMPORTANT THINGS FOR 330 MILLION AMERICANS. I HAVE WORKED OVER THE YEARS WITH HILLARY CLINTON ON A NUMBER OF CAMPAIGNS AND REMEMBER HILLARY SAYING ONES, IF YOU ARE NOT WILLING TO BE ATTACKED, YOU CAN’T GO INTO THE PUBLIC SQUARE AND DEBATE POLICY. I THINK THIS PART OF OUR GREAT DEMOCRACY. > > I LOOK AT YOU AND IT IS THE PRESIDENT-ELECT, THE WORLD’S RICHEST MAN. DOES IT FEEL DIFFERENT TO YOU THAN WHAT YOU EXPERIENCED AFTER THE GLOBAL FINANCIAL CRISIS AT THE CFTC, HAS THE ATMOSPHERE CHANGE FOR REGULATORS LIKE YOURSELF? > > I THINK IT DOES CHANGE. WHAT WE DO HERE AT THIS GREAT AGENCY IS LOOK OUT FOR EVERYDAY AMERICANS. PEOPLE TRYING TO SAY FOR A BETTER FUTURE AND TRY TO MOVE THROUGH THINGS THAT HELP THEM LIKE WE HAVE DONE. EVEN SHORTENING THE SETTLEMENT CYCLE FROM TWO DAYS TO ONE DAY. IT MIGHT SOUND GEEKY BEHIND THE SCENES COME BUT IT MEANS YOU GET YOUR MONEY ONE DAY FASTER, FOR INSTANCE. OR GETTING PRIVACY NOTICES. THERE WAS NO FEDERAL RULE YOU NEEDED TO GET A NOTICE IF YOUR DATA WAS HACKED AND WE PUT IN PLACE SOME RULES TO DO THAT. WE ARE LOOKING OUT FOR EVERY DAY AMERICANS TRYING TO LOWER THE COST OF THE MARKETS TO TRADE STOCKS, BONDS. BUT IT DOES NOT SURPRISE ME. THERE ARE SOME IN THE MIDDLE OF THE MARKET CALLED BROKERS, DEALERS, INTERMEDIARIES, STOCK EXCHANGES WHO THEY LIKE THEIR BUSINESS MODEL AND IF WE ARE CHANGING THE ROLES TO BENEFIT EVERY DAY AMERICANS, THEY MIGHT HAVE THOUGHTS ON THAT AND OBJECT . THAT IS PART OF THE PROCESS. FRANCINE: THE OUTGOING CHAIR OF THE U.S. SECURITIES AND EXCHANGE COMMISSION GARY GENSLER SPEAKING TO BLOOMBERG. WE ARE KEEPING AN EYE ON WHAT IS HAPPENING WITH THE U.K. MARKET TURMOIL. A LOT GOING ON. THE MAIN QUESTION NOW, WHAT STOCKS ARE PAYING FOR STERLING AND GILT.