Bloomberg Surveillance TV: June 4th, 2026

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Bloomberg Audio Studios Podcasts, Radio News. This is the Bloomberg surveillance podcast. I'm Jonathan Ferro, along with Lisa Abramwitz and Anne-Marie Hordern. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9 a.m. Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app. So here's the latest this morning. The President remaining positive on negotiations, as Tehran says there has been no tangible

progress. Overnight clashes between Israel and Hezbollah complicating talks, as Lebanon's president says a ceasefire with Israel could begin within 24 hours. Joining us now around the table, the State Department spokesperson, Tommy, Tommy, you're the man this morning. Good morning to you. Tell us, we're making some progress because I can tell you on Wall Street. This is the number one story that people don't want to talk about right now. Are we moving forward? Well, look, we're moving forward in achieving the president's objective. I mean, you started saying mixed messaging on Iran, but the president's been clear from the beginning what his primary objective is here. The Iranian, regime can't have a nuclear weapon. So we saw Operation Epic Fury the decisive outcomes from that.

We're seeing in Lebanon and Israel, those talks being separate from these talks regarding the nuclear issue, but the highest level talk since 1993 progress being made there. The president's not going to be rushed into a bad deal. He's going to make a good deal for the American people, and he's indicated we're seeing some movement here from the Iranian side. The president yesterday talked about a ceasefire. We talked about this a little bit earlier, saying that that basically means shooting in a more moderate manner. That's what the ceasefire is. what would it take for this administration to say the ceasefires off? Well, look, I think what we're seeing here regarding this is defensive actions.

Of course, we saw Operation Epic Fury decimation of their defense industrial complex, their missile complex, their Navy, for example. But of course, we're going to take defensive action to protect U.S. interests and U.S. troops. That's a common sense approach. We also have in this context economic theory that are a blockade that we have Iranian ships, Iranian port. So there's leverage the president has. He has all the cards here.

And what we saw the secretary described before, Congress, as we are seeing the Iranian regime talk about many of the things that they refuse to talk about for months. But the president also being clear, he's going to see this objective be fulfilled one way or another. The Iranian regime cannot have a nuclear weapon. The Wall Street Journal reporting overnight that Trump told his aides that he won't resume in all that war with Iran unless U.S. troops are killed.

Is that going to be the line where potentially we could see more offensive attacks? Well, look, as the president saying, again, we're going to take defensive action to protect U.S. troops, U.S. soldiers. I'm not here to predict the future about what the president may decide. But of course we're going to take that defensive action. Of course we are. That's a common sense approach. If we see threats against U.S. interests, U.S. troops, we're going to be acting.

And the president, the DOW, has done just that. Why isn't the International Atomic Energy Agency involved in these talks? Well, I mean, we see the president talking about a role for the IA in terms of the destruction of the nuclear dust. The president, this has been a longstanding concern for the entire world, the threat that the Iranian regime having a nuclear weapon could have. It's the president who has taken action to actually address this. Well, the IAEA came out overnight with a report where they said that the risk of Iran developing a nuclear weapon right now is higher than it was a number of months ago, raising concerns that they don't have access to oversight and saying that they would like to be more involved in these negotiations. Do you have any understanding of where they are in this and the urgency to get them in to be able to surveil what's going on?

Well, again, part of the discussions we're having here, as the President has indicated publicly, is regarding the destruction of the enriched uranium. Iranian that was enriched beyond a point of any sort of peaceful purpose, the IAEA, the President indicating, would play a role within that. Regarding where the Iranian regime is, as the Secretary discussed before Congress, they were attempting to develop a conventional weapon shield, which they could act with basically impunity to develop a nuclear weapon. The President taking clear concrete action to decimate that conventional military shield. So the President taking action to prevent the Iranian regime from having a nuclear weapon consistently from the beginning of this administration. How effective has the blockade been?

We've had this blinking contest for a while. trying to work out at what point will we breach storage capacity in Iran? Have you got anything to share with this this morning about how effective that blockade has been? Well, it's been incredibly effective in terms of blocking revenue from going to the Iranian regime, hundreds of millions of dollars a day being blocked from the Iranian regime. This is also the broader context of that maximum pressure policy. We're actually continuing to take action at the State Department, the Treasury Department, to target entities that are trying to evade U.S. sanctions that are designed to deny the regime

the funds they need for their malign activities. We saw actions as recently, either yesterday or earlier this week, those actions have continuing. So this economic fury is continuing. We're seeing, in terms of the effect, hundreds of millions of dollars being denied to the Iranian regime. Marco Rubio was in front of the Senate for our Relations Committee as well this week, and he said that Iran has laid very large parts of Strait of Ramos with mines. Have any of them been cleared? How much of the Strait is still mined?

Well, the President indicating that we're taking operations to see that demining of the strait. I think this also shows the difference here. the Iranian regime trying to close the Strait of Hormuz and say that we should be able to control who goes to the Strait of Hormuz. That's why we saw this blockade of Iranian ships and Iranian ports. We're not going to be in a situation where we're going to accept a country deciding unilaterally who gets to use an international waterway. That's not going to happen.

The president and the secretary both indicating that. Tommy, can you see why people on Wall Street right now are slightly frustrated with some of the communication coming from the White House? And I'll give an example. The president said the strait would reopen back on April 17th. The strait did not reopen. It feels like we're getting the same headlines recycled every week. Can you see the frustration right now for people on Wall Street track in this story?

Well, look, I think fundamentally the president's a dealmaker. We saw the action. He takes the action he needs to take. We saw it with Operation Minuthammer. We saw it with Operation Epicure. Except he's not making a deal, is he? Well, I think he's working on that deal. I mean, we're seeing him make more progress than anyone's ever made in terms of

addressing this issue in terms of the real results we've seen from these operations. The President wants that diplomatic approach. But fundamentally, the Iranian regime cannot have a nuclear weapon. That would have been an untenable threat to the region. the entire world. That was being addressed. It has been addressed that has been addressed. Stay with us. More Bloomberg surveillance coming up after this.

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Complete disclosures available at public.com slash disclosures. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business.

Let's create smarter business, IBM. When you own your own business, you own every decision. Now own the card that rewards you for. for it. The Chase Sapphire Reserve for business card brings the best Sapphire Reserve benefits to business owners who expect hardworking rewards. Designed to meet the needs of business owners at scale, this pay-in-full card elevates your travel experience and offers premium benefits and value toward business services that will take your business to the next level. Fuel your business and maximize rewards with 8x points on all purchases through Chase Travel, 3x points

on social media and search engine advertising, annual partnership credits, and more. Make every journey more rewarding with a $300 annual travel credit and access to a network of airport lounges, whether you're looking for pre-flight productivity or time to rest and recharge. Chase Sapphire Reserve for Business. It's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for business, make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by J.P. Morgan Chase Bank, N.A. Member FDIC.

As for investors bracing for the May Payrolls report due out tomorrow, the Dallas Fed President Laurie Logan, signaling optimism that AI will boost Labor demand. There are a number of data centers that are either in the planning stage or in the construction stage, and that's creating significant demand for labor. We're seeing wage growth in those particular areas. Joining us now to discuss, Betsy Stevenson of the Ford School of Public Policy at Michigan University. Betsy, welcome back to the program. It's always good to hear from you.

There's a great debate on the future of this labor market, given the technological revolution we're working through right now, Betsy. How are your thoughts evolving on that matter? Well, I mean, I think what we just heard her say is we're going to see a lot of construction workers as we build data centers. But that's not a solution to the challenges for white-collar workers as AI workers. starts to increase efficiency. I mean, I think what we're seeing right now is a lot of companies that are still doing really well and able to grow. And that's why we're not seeing a lot of layoffs, but we're also not seeing a lot of hiring.

And so what they're doing is they're trying to take these gains in terms of increased productivity so that they can increase their output, but they can do it without hiring workers. And that I think is, I think that's the best way for technology to work. through the labor market is to do it in a period of growth so that people don't lose jobs, but the people who have jobs become more productive. The challenge for the U.S. right now is that it is such a low, higher, low fire environment that the people who do need to enter the labor market, either they lose a job or they've been out of the labor market and need to reenter, they're the ones struggling.

And that's why we're seeing the rate of long-term unemployed increase. Betsy, it's really hard for us to judge at the moment just how tight this labor market actually is. As you reflect on that, we've had this negative supply shock to the labor market. We haven't had the entrance come into the supply pool, so to speak, because of these tighter regulations around immigration and the enforcement of the southern border. Betsy, with that in mind, how do you gauge how loose or tight this labor market actually is right now? You know, I think it's actually a labor market where we want to look at the particular skills that workers have to think about whether it's loose or tight is going to depend on exactly the market that you're in and the skills that you have. So I think of it as a time of great reshuffling. You might find that you're in actually quite weak labor market given your skills and where you're at.

And that might mean that you need to skill up with something different or relocate. So that's part of why I think we see it as both. Wait, it's a weak labor market. No, it's a tight labor market. I think it's because it's both. And it really depends on exactly where you are and what set of skills you have. Betsy, where are we in what you referred to before as the white collar recession? Well, I don't think we're in a white collar recession.

But I do think that we're not really prepared for a lot of white collar workers to need to make some transitions. Now, there are some good things. One is that white collar workers have developed a lot of skills around how to learn and develop new skills. So that makes them actually really well positioned to make changes as their company says, hey, I don't need you to do this anymore, but we might need you to do this other set of tasks. Can you learn how to do them? Can you skill up? And I think historically we have seen that many workers, are able to do this. And, you know, one of the other things with AI is that it is disproportionately going to

impact women's jobs, jobs held by women. And women have historically been a bit more flexible around, whoa, I need to change what I'm doing because my old job isn't there anymore. So I have a lot of optimism that we're going to have a lot of ongoing demand for human workers. And we have workers who are able to have the flexibility needed to make changes. But I think we should understand that any period where people are having to make changes, where there's uncertainty, is going to be a period of weaker consumer confidence and anxiety around for the public. So if you push this through the Fed's response mechanism, a lot of people are looking at the labor market report tomorrow as a guide to whether the labor market can be some sort of indication of weakness that could leave the Fed on hold indefinitely or even remaining.

with an easing bias. Do you think it's an appropriate stance for the Fed to be a bit more dovish with this type of backdrop? Or do you think that they should prioritize inflation because of the uncertainties around the labor backdrop? Inflation isn't good for workers either. I think, you know, Jerome Powell said that a few press conferences ago. And it really stuck with me because I think it's important to remember that workers don't want unemployment, but they also don't want inflation.

And so then what the Fed has to do is look at what can they be more certain about? Right now, unfortunately, they can be more certain about inflationary pressure than they can about a weak economy, right? We still see a GDP now forecast for Q2 of 3%, where we saw jolt's job openings actually rise in April. I don't think we should overinterpret those as the economy is really strong. But I do think that they make it hard for the Fed to justify cutting rates at this moment. But Betsy, this inflationary pressure is coming from a conflict and it's energy driven. Isn't the Fed historically?

Haven't they been taught to look through this? I really, I love this. I feel like I was like in my econ macro class and a student was like, hey, we're supposed to look through this. You're 100% right. But there's one problem. We had high inflation in 2021. And we have a public that is on tender hooks worried about inflation. What that means is that inflation expectations may not be as well anchored as we need them to be in order to look through a brief period of inflation.

So what the Fed has to be looking at is you're absolutely right. not what is the transitory inflation that's going to pass through very quickly, but what's the potential for that transitory inflation to become sticky, either because it takes the conflict a while to resolve, or because inflation expectations are not well anchored. Stay with us. More Bloomberg surveillance coming up after this.

Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same. actions, buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the VIX hits 25, buy a put option on the S&P 500, or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions, and executing your

strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public dot com slash market. Paid for by public investing. Rokered services by open to the public investing, Inc. Member FINRA and SIPC. Advisory services by public advisors LLC, SEC registered Advisor. Complete disclosures available at public.com slash disclosures. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand, but by embedding AI across HR, IT, and procurement processes,

we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. When you own your own business, you own every decision. Now own the card that rewards you for it. The Chase Sapphire Reserve for Business card brings the best Sapphire Reserve benefits to business owners who expect hardworking rewards. Designed to meet the needs of business owners at scale, this pay-in-full card elevates your travel experience and offers premium benefits and value toward business services that will take your business to the next level.

Fuel your business and maximize rewards with 8x points on all purchases through Chase travel, 3x points on social media and search engine advertising, annual partnership credits, and more. Make every journey more rewarding with a $300 annual travel credit and access to a network of airport lounges, whether you're looking for pre-flight productivity or time to rest and recharge. Chase Sapphire Reserve for Business. It's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for business, make more of what's yours.

Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA, member FDIC.

We begin this hour with stocks edging lower after Broadcom results call off the record breaking run for chipmakers. Tracy McMillard of Wales Farco with a year-end target on the S&P of 7500, expecting no Fed rate moves, a better economy and increased M&A activity through to year end. Tracy joined us now for more. Tracy, a wrinkle this morning and good to see you. And that wrinkle comes from Broadcom. What's the lesson from the price section this morning? Good morning, John. So the lesson is that after such an amazing run like we've seen in the AI names, there is still some room for disappointment. So we have overweighted information technology, but we're telling investors not to chase those names at these prices right now. And that there are probably better opportunities in some other sectors like industrials or utilities or even financials.

Well, you've liked financials. That's been a high conviction call. And Tracy, it hasn't been working. Why hasn't it been working and why would that change? Yeah. So it hasn't been working because of the steepening use. I'm sorry, the flattening yield curve and the private credit issues. And we think that going forward, we are going to start to see that yield curve steep in some.

Right now, there are a couple of price rate hikes priced into the markets. We think those are going to come out by the end of the year. And we also see some additional potential upside in rates on the long end. M&A activity, you mentioned that as well. IPO activity, both really good for investment banking. So all of those things we think support financials. We were talking about concerns around private credit. We're getting another headline this morning that Blackstone Private Credit Fund plans a cap

for investor redemptions at 5%. This comes amid a slew of different information that we've been hearing, including from the Swiss Partners Capital we were talking about earlier this morning. Does this give you pause, or do you think that this is, noise given a duration mismatch and not necessarily a broader signal about the market? Yeah, so we think that that is not necessarily a broader signal about the market. We're watching spreads in the public markets that are at near record tights. And so we don't see broad concern in the fixed income markets.

That said, there are some pockets in the private credit market that, obviously, investors are starting to worry about. And so we would tell investors that it's important to keep that diversification within a fixed income portfolio with some potentially in private credit, if that fits their risk profile. But in the public markets, we are just not seeing that stream. There's also an issue of consumer spending with their wages, not really keeping pace. We just saw credit card balances hit a record $1.28 trillion on the market. margins, delinquencies picking up. Do you see signs the consumer is getting tired?

Does that give you pause? Yeah, so definitely there is a component, a segment of the consumer that is starting to get stretched, get tired. If you will, we've talked about, you know, the higher prices that they are experiencing. And so they continue to spend. But some of that spending is now coming from saving. Some of it's going on to credit cards. And I think the positive here is that it's not all consumers, and we are continuing to see, you know, some farming in the labor markets.

And as long as consumers have jobs, they can continue to spend. And really all we're expecting from the consumption part of GDP this year is maybe a modest improvement because most of our GDP expectation is coming from cap-fax. Tracy, what do you think about the energy space right now? I notice in your note you said you want your investors' portfolios to trim energy equities and commodities. But we just heard from Amos Hockstein, who basically said we're living right now globally on a buffer. And when that dries up, you know, we could see tremendous upside when it comes to energy prices. Yeah, so we are telling our investors that it is a source of funds for some other areas of the market where we see better valuation. So we're not necessarily disputing the fact that almost a billion barrels of oil have been lost through this conflict and that there are going to be some pockets of the global economy that are going to start to experience severe shortages

if we don't get oil flowing again. That said, though, we do think that when oil spikes, that it is an opportunity for investors to reposition because we don't think this is a long-term supply issue. It's a supply shock. Is this basically investors needing some capital to allocate elsewhere, maybe with some upcoming IPOs? Where else do you see investors moving money around to make sure that they are getting in on that AI race? Yeah. So we definitely think we see that happening. We have seen the MAG7 starting to underperform. We've seen crypto underperforming. And so we think it's some of those. higher beta areas of the market where investors are pulling funds, raising cash, so they will

have that cash available as these big IPOs come to market through the summer. This is the Bloomberg surveillance podcast, bringing you the best in markets, economics, and geopolitics. You can watch the show live on Bloomberg TV, weekday mornings from 6am to 9 a.m. Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business Out.

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