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along with Emily Grafo. She's Bloomberg
News crosset reporter. She is in for
Carol Master on this yes Fed Wednesday,
August 20th, 2025. Those minutes from
the Federal Reserve, the last FOMC
meeting expected to drop in the next 10
seconds. We are going to bring you those
headlines as soon as we get them. In the
meantime, the S&P 500 down 4/10en of 1%,
the Nasdaq Composite down 9/10en of 1%.
Stocks off their worst levels of the
day. But yes, tech down once again.
Those minutes crossing as we speak. The
majority of Fed members saw inflation
risk outweighing the employment risk.
That is the red sticky crossing the
Bloomberg terminal. The minutes of the
Federal Reserve July 29th to 30th
crossing just now. Many noted the full
effect of tariffs could take some time.
In addition to that, several members of
the FOMC flagged the risk of inflation
expectations unanchoring and several
expected companies would pass tariffs to
consumers. Several also noted concerns
about elevated asset valuations. Several
members said current rate may not be far
above neutral. Once again, these are the
minutes released of the July 29th
through 30th meeting in Washington DC. I
want to bring in Stuart Paul right now.
He's US economist for Bloomberg
Economics. He joins us here in the
Bloomberg Business Week studio. Stuart,
a lot has happened since this meeting
actually took place. The non-farm
payrolls report that came out as a
shock, a weaker ISM manufacturing
meeting, a surge in producer prices.
We'll talk about those in a second. Your
immediate reaction to what just crossed,
though,
>> incrementally more hawkish than what we
saw in June. What we're really thinking
about when we look at these minutes is
whether more or fewer than most
committee members feared persistent
tariff induced inflation and whether
more or fewer than many committee
members expected a gradual softening of
labor market conditions. As you pointed
out, the majority saw inflation risks
outweighing employment risk and at the
time of the meeting that likely was the
case. But these minutes were just a bit
stale even just 2 days after the FOMC.
>> That's when that shocking non-farm
payrolls report came out with prior
revisions too.
>> That's exactly right. And so the fact
that at the time that the FOMC met to
make that interest rate decision and as
these minutes were being written that
most or the majority interchangeable
words here saw inflation risk
outweighing unemployment risk. That's
likely shifting right now. And so as we
read through these minutes just a little
bit more, the thing that we want to keep
in mind and the thing that we want to
look for is just how thin the majority
was and how loosely held was that view
of the majority. How easily will they be
swayed to thinking that at the current
moment with the revisions that we have
now employment risks are outweighing
inflation risk.
>> If we take a look at the bond market
right now, we're not seeing a ton of
movement in the front end of the curve.
the two years down about one basis
point. If you do look though at the WP
page on the Bloomberg terminal, the
model estimates about an 84% chance of a
cut by that September meeting. Knowing
what you know now about the minutes and
of course the data that we've seen in
between then, does that seem about
right? 84% chance of a cut.
>> It does seem about right. It almost
seems like the conversation should be
moving to whether the risk is that there
will be no cut in September or a 50
basis point cut in September. I think
that right now risk is probably skewed
towards zero cuts from you know right
now obviously consensus view is that
there's going to be 125 basis point cut.
Risk is probably skewed to the downside.
The thing that probably matters from
these minutes is that going into the
Friday jobs report that changed our view
of the labor market, FOMC members, the
voting members of the monetary policy
committee here were more so focused on
inflation risk. And with tariffs
incrementally rising, they're going to
be even more focused on inflation. Uh,
and I think that that's something that
they're going to need to weigh against
the renewed or altered view of the labor
market. It brings me to another
headline, Stuart. Several of the members
consumers. Is that surprising? Is that
news at all to you? I mean, I I think
that's kind of been the expectation.
>> That is, but the PPI print that came in
showed that a lot of companies were
absorbing this.
>> That's right. So, companies are
absorbing this. The line that I'm
focused a little bit more on right now
is several officials are concerned about
slower real income growth. Like that's a
little bit of a tip of the hat that the
majority that did vote to hold rates
steady could have been getting a little
bit nervous about the labor market even
as they decided to hold rate steady. The
fact that several members are focused on
slowing consumer income growth means
that firms are going to have relatively
less capacity less space to pass on
higher costs to customers. If folks
incomes are slowing, if the labor market
is cooling, then yeah, firms are going
to feel their margins getting squeezed.
they're not going to be entirely able to
pass along those higher input costs.
>> Yeah, I'm seeing another head several
flagged risk of inflation expectations
unanchoring um as you suggested that
that wouldn't be good for the
trajectory. Another headline here,
several noted concerns about elevated
asset valuations. We don't sometimes
kind of how the Fed thinks about markets
gets a bit lost in the mix um when we're
talking so much about labor and
inflation. What do you what do you make
of that comment? Are they watching? Are
they paying attention to the rise that
we've seen in the stock market, the
rally since um liberation day?
>> Almost certainly. And this is what's a
little bit tricky when we go through the
minutes and we start trying to use
quantifying words like many or most or
several. We sort of lose track of the
fact that there are a at least a couple
different camps within the FOMC. one of
which is more academic led by folks like
John Williams who will take their
estimate of the neutral rate of interest
and look at where we are with the
overnight with the federal funds rate
target range and say policy is
restrictive relative to our academic
estimate of neutral. Then you have more
markets oriented folks like Alberto
Musulm or Lori Logan or Beth Hammock who
will look at where asset prices are and
say it's really difficult for you to
tell me that rates are restrictive right
now. So when we focus in on some of
these quantifying words, we lose a
little bit of track of that. And I think
that Emily, as you just pointed out, if
you have folks out there who are worried
about asset valuations or markets that
are a little bit frothy, they might be a
little bit more so inclined to move very
slowly once they resume cutting rates.
And that's why we expect that there will
likely only be one rate cut this year.
>> Stuart, we're about to head to Jackson
and and talk with Michael McKe,
Bloomberg News international economics
and policy correspondent, who's there,
of course, for the economic symposium.
We'll hear from Jay Powell on Friday.
What does all of this that we that we're
reading right now, the minutes, but also
the data that we've gotten since then
mean for Powell's speech on Friday and
what he intends to communicate? Pal is
going to have a few different
priorities. One of which is going to be
discussing the monetary policy framework
review where he's likely going to move
away from the current flexible average
inflation target. Again, it's a little
bit more of an an academic exercise with
a little bit less relevance to what
we're thinking about with September. As
we read through the minutes and as we
think about the data that we've seen,
everything basically points to an
incremental move toward uh monetary
policy getting a little bit less
restrictive and uh a little bit of
additional comfort in the balance of
risk shifting towards cooling
employment. And I think that Pal is
going to need to acknowledge that when
he speaks. Uh just later this week in
Jackson Hole,
>> Stuart Paul, US and Canada economist for
Bloomberg Economics, joining us here in
the Bloomberg Business Week studio. I
want to bring in Michael McKe,
international economics and policy
correspondent for Bloomberg TV and
radio. He joins us from Jackson,
Wyoming, where he's gearing up for the
Jackson Hole Economic Symposium. It
officially starts tomorrow. Mike though,
getting a lay of the land. Mike, I want
to bring you in just on the latest that
we heard from Stuart and from the
Federal Reserve with regards to these
minutes. The Treasury 2-year yield pairs
its decline after the FOMC minutes came
out. The majority saw inflation risk
outweighing employment risk. Several
members flagged the risk of inflation
expectations unanchoring. Several said
current rate may not be far above
neutral and several expected companies
would pass tariffs to consumers. What is
your instant reaction to these minutes?
Well, it was very interesting because
what we had seen is a fairly strong
employment report for June in uh July
and then we got the CPI and PPI numbers
that were more worrisome in terms of
inflation going up. The Fed met at the
end of July. So, they were already
looking under the hood and seeing some
issues with inflation uh growing and
that uh sort of mitigates as Stuart said
against perhaps a cut in September if we
get the same kind of numbers again. Uh
the question is what are we going to
get? Are we going to see more inflation?
And if that's the case, the minutes
offer support for the idea that the
majority on the Fed isn't going to move
if we get a weak employment report
unless it's very weak.
>> Mike, when you look at some of these
heads and just I know we still have to
kind of parse through where tariffs come
up in the minutes. Many noted the full
What's your understanding? right now of
just what that length of time means.
What What do most Fed economists think
about just kind of how long it takes for
us to really see the pass through
effects of tariffs
>> in general? They were looking for about
6 months, say uh the end of the third
quarter, the beginning of the fourth
quarter this year. But it's been
complicated by the fact that the Trump
administration has been on and off about
the tariffs. First they put them on,
then they pause them, then they bring
them back, and now some more have gone
on, and there are more to come. So this
could stretch out over a period of time.
And the other thing is a lot of
companies brought in imports from
overseas early to try to build their
inventories so they could sell things to
people without raising prices. Those
inventories are getting run down and
prices are going to have to start going
up. We've seen in earnings reports some
companies, Home Depot yesterday saying
they were going to have to start raising
prices. So, we should start seeing it as
the months go on. But the question is,
does it happen all at once or does it
happen over months and months and months
and take away people's belief that
inflation is anchored? We saw Friday the
uh University of Michigan numbers
suggest that people are getting a little
worried about inflation.
>> All of this going to be top of mind for
policy makers and officials gathering in
at Jackson for the Jackson Economic
Symposium officially kicks off tomorrow
as I mentioned. So too, I think will be
among the things people talk about is
what's happening with allegations that
the president is leveling and others in
the administration are leveling against
members of the Federal Reserve. This
time, Bill Py added again. It's a most
read story on the Bloomberg. It's about
the director of the Federal Housing
Finance Agency urging AG Pam Bondi to
investigate Federal Reserve Governor
Lisa Cook over a pair of mortgages.
President Trump posted our Bloomberg
News story to social media and said Cook
quote must resign. Now, Mike, I is this
all about remaking the Fed?
>> Partly about remaking the Fed and partly
about the efforts the Trump
administration has had to weaponize the
government against Democrats. Uh the
thing about the Fed aspect of it is Lisa
Cook is not a decisive policy maker.
She's not a swing vote. she'll generally
vote with the majority, generally vote
with the chair in terms of leaving
interest rates unchanged in recent
months. Uh removing her wouldn't make a
big difference in the president's goal
of driving down interest rates, but it
would give him the opportunity to name
another person to the Fed and they could
name somebody who is much more
sympathetic to low interest rates. And
uh that's going to have people's backs
up. A lot of economists already reacting
negatively to this news. uh but uh we
don't know what the bottom line is in
terms of what Lisa Cook may or may not
have done and the Fed doesn't know and
so at this point I wouldn't expect Cook
or the Fed to comment on it and we're
going to have to see uh where the
attorney general takes this if she takes
it at all.
>> Mike, you're not a politics reporter but
you were for many years. So, I think
it's fair to ask about this pattern of
alleged wrongdoing that seems to be
coming from the Trump administration
pursuing mortgage fraud allegations
against other high-profile Democrats.
California Senator Adam Schiff, New York
Attorney General Leticia James. There's
also the alleged impropriety that you've
covered a lot at the Fed with Powell in
regard to the remodel. How how do you
look at that?
Well, I think a lot of it is basically
just an attempt to influence public
opinion. You throw the charges out there
and the public remembers that because
they get big headlines and then if
somebody is cleared or if the attorney
general and the justice department don't
even take up the case, you don't hear
much about that. And the idea is to
build some skepticism in about uh these
various people so that when they take on
the Trump administration or they do
something the administration doesn't
like like voting to keep interest rates
steady, the president can blame them
instead of himself or his own policies.
>> We want to get to Jackson Hole because I
can at least say I'm very envious of the
background that you're sitting in front
of right now. It looks beautiful. Can
you talk about the tone, the mood? What
are pe how I guess how much of the
discussions at this meeting are actually
going to be about Fed independence and
who the next chair is? There's been so
much talk, at least headlines about
Trump weighing in on who his pick is
going to be, who's going to be the next
pick. Is that really going to take up a
lot of the conversations or is it going
to be more an economic symposium?
Well, I suspect it'll be dinner party
conversation. It's not parties, but
dinner conversations and maybe on the
sidelines. But the official uh subject
here is labor markets in transition,
which is a very timely topic given the
fact that the labor market seems to be
in transition, at least with the July
jobs report. The only thing is these are
academic papers looking forward into the
future and they don't have a lot of
bearing on what is going to be happening
in terms of policy in the near term. So
I think it's going to be a bifurcated
session where people are talking on the
sidelines about what's going to happen
next at the Fed. But the main program is
going to be about what could happen down
the road 6 months a year or so from now.
talk a little bit more about labor, this
topic here, because it was interesting
in the minutes and although these are
backdated, um that the Fed officials
seem to be more concerned about
inflation and they're saying that
outweighs concerns over the labor
market. Um but what's the I guess tone
going to be on that Powell speech on
Friday about the labor market?
>> Well, I would imagine that he's going to
say we need more information. The Fed
looks at the unemployment rate as sort
of a proxy for US growth and in this
case the unemployment rate really hasn't
moved. We saw weak hiring but not a lot
of firing and so the Fed is probably
going to be looking to see what happens
with the August payrolls report and if
anything bleeds over into the
unemployment rate. That's maybe the
point that Powell would make in a
perhaps less direct way. the papers that
are going to be presented here and the
talk that's uh we're going to have here
is going to be more about things like
what's AI going to do the work for to
the workforce in the future and uh
what's happening with the retirement of
the baby boomers and the the inability
we've seen so far of recent college
graduates to get jobs. Uh so it's more
about the structure of the labor market
than about what's happening because of
tariffs or fiscal policy.
>> Yeah. You add immigration to that mix,
something we've spoken quite a bit
about. Mike, this week when it comes to
how that changes and potentially changes
the labor picture moving forward. Hey,
before we let you go, one more on the
next potential Fed chair. David Zervis
over at uh Jeff, formerly of the Fed.
That's where he began his career. Then
he went to Wall Street. He was on CNBC
earlier today. He said, "The Fed has
never been independent. The political
pressures on the Fed have always been
growing and continue to grow." He
highlighted pressure from Democratic
lawmakers in recent years on monetary
policy makers to lower interest rates.
Is the Fed independent?
>> Uh the Fed is independent, at least in
terms of the way it acts. Uh Republicans
are pulling out uh old uh or trying to
make uh coincidences into uh causation.
The fact that the Fed lowered interest
rates in the past was not because they
were trying to necessarily help a
politician, but because the economy
called for it. Remember last summer we
saw the unemployment rate rise
significantly. And that's just before
the Fed cut rates 50 basis points, which
is why they did that. That was the
reason they cited. And it it makes
sense. It wasn't an attempt to help Joe
Biden, but because the two things
happened at once, people like David
Zervos are trying to make the case that
the Fed is biased. But the Fed is is not
biased. They are biased only towards
what the economy is telling them to do.
You can argue about whether it's the
right move to raise or lower interest
rates at this point uh for what'll
happen down the road, but it's not a
political decision.
>> We are biased towards Michael McKe here
on Bloomberg TV and radio. That's
Michael McKe's Bloomberg News
correspondent joining us from Jackson,
Wyoming. Stay tuned to Bloomberg for
continuing live coverage from Jackson
Hole through the rest of the week. Mike
McKe and company are on the ground in
Wyoming to cover the Kansas City Fed's
annual economic policy symposium. We've
got a great programming Thursday and
Friday coming up there. Coming up next,
we're talking venture capital on
Bloomberg Business Week Daily.
stack all declining with the S&P 500
index down 39 right now. Drop there of
6/10 of 1%. It is a Fed Wednesday. We
got the minutes 20 minutes ago. Most
Federal Reserve officials highlighted
the risk to inflation as outweighing
concerns over the labor market at their
meeting last month as tariffs fueled a
growing divide within the central bank's
rate setting committee. S&P as I
mentioned lower now by 6/10en of 1%. We
do have the Dow down 106 drop there of
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For the NASDAQ composite index a drop
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Our MAG 7 index is tumbling by 1.6%. The
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Spot gold is up $28 the ounce, up 9/10en
of 1% while West Texas Intermediate
crude up 1.5%
6327 for a barrel of WTI.
Microsoft has curtailed Chinese
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For on demand news 24 hours a day,
subscribe to Bloomberg News now wherever
you get your podcast. I'm Charlie Bell.
That is a Bloomberg Business Flash.
>> Hey, thanks for the update, Charlie. Do
appreciate it. I want to talk fintech,
financial technology. Chime financial.
It's a prominent fintech. Recently
IPOed. The stock actually fell below its
IPO price of $27 for the first time 69
days after going public. This is traders
dump shares of fintech companies during
a sell-off in US equities over the last
couple of days, today included. We see
SoFi Block, a firm selling off yesterday
and today as declines in big tech stocks
push major indexes lower. I want to
bring in David Haber. He watches this
stuff closely. general partner at the VC
firm Andre Horowitz. It's perhaps among
the most wellknown in the world having
made early bets on Airbnb, Coinbase,
Facebook when it was called Facebook,
Instagram, Figma, Lift, Slack, a firm,
Skype, and more than 700 other
companies. Also joining us, someone else
who watches FinTech closely, Paige
Smith. She's consumer finance reporter
for Bloomberg News. Everybody is here in
the Bloomberg Business Week studio.
David, I want to start with you. The
fintexs I mentioned, chime, sofi, block,
a firm, one of which Andre Horowitz has
invested in.
>> Yep.
>> How do you think about these in the
context of where we are in fintech? Is
this like a
>> sort of web 1.0 in in where we are with
fintech? You
>> know, it's a great question. I think um
you know, we were chatting, Paige and I
were chatting about this earlier. Um you
know, I think a lot of fintech from you
know, call it 2012 to 2018 were were
these style of companies. These were
businesses that lead with a financial
product and they got started by really
unbundling the bank, you know, kind of
building a wedge, whether it's a trading
product or a fee free mobile first bank
account in Chime's case. And as they've
scaled, they've kind of rebundled
product to try to become the primary
sort of financial relationship with
their end customer. I think where I've
been spending time and you know I used
to run a lending business which you know
wasn't a direct competitor with these
but was a very challenging you know
company uh to lead has been different
right the types of fintech companies
that I look for and most like investing
in are those that lead with software or
have the potential for a network effect
right so often selling into large
financial institutions as opposed to
trying to compete with them directly and
it's been one of the things that I've
been spending time the last four years
here at Andre is just trying to bridge
the gap between you know what's
happening on the frontier and in the
startup ecosystem and many of these
large financial institutions.
>> You know, David, I have a question for
you as well about one of the companies
that we chatted about which is Plaid and
kind of this interesting dynamic right
now around charging. There were
theoretically the it negotiations are
ongoing, discussions are ongoing and the
regulatory environment is a little bit
uncertain right now. But the idea of
charging for access to customer
financial data, it was kind of an issue
that was
>> settled for a hot minute and has now
sort of come back. I guess I would be
curious about your from your
perspective, how does this discussion of
kind of the banks sort of essentially
like digging these moes around
themselves um to charge for this this
financial data. What what are your
thoughts on this?
>> Yeah, so look JP Morgan came out
recently saying they wanted to charge
the fintech ecosystem I think $300
million for access to consumer data. um
you know and it was done under the
opices of you know consumer protection
and and their own kind of cost structure
to support this information. I think
it's really just uh hiding the true
intention which is sort of an
anti-competitive move right ultimately
plaid you know which again in in full
transparency I helped seed the company
back in 2013 and trees and we're you
know large investors in the business so
um you know I have a strong point of
view here but plaid ultimately sits at
the intersection between the bank a
fintech application and the end customer
right and and so they do play this sort
of intermediate uh role um but
ultimately I think it's who who owns
this information, right? JP Morgan has a
strong point of view that they own the
information. I believe that consumers
own their own data and that we need more
open kind of standards, you know, for
how people are able to share their own
information with other, you know, third
party applications. The analogy that I
use often is, you know, do you own the
photos in your iPhone or does Apple,
right? Should Apple be able to charge
Instagram for you authenticating access
to your photos?
>> I don't think so. Right? Right. I think
you ultimately own you should be able to
share your photos with any application
that you want to connect to. And JP
Morgan is basically saying, "No, your
photos are mine and we're going to be
able to charge their Instagram
equivalent $300 million for access to
your information." I I just don't think
that's fair and I think it's again I
think it's veiled under this sort of
threat of you know consumer protection
and their own cost. The reality is, you
know, data data infrastructure costs
have come down so precipitously and
we're talking about your accountant and
routing number, right, and your
transaction history. It's really not
that sort of technology intensive and
for many, you know, banks, they don't
actually have real-time APIs, right? And
so for the longtail community regional
banks, I think Plaid plays an even more
important role in becoming this sort of
like data utility um and and enabling
kind of this ecosystem of fintech
companies to build interesting
applications on top of those products.
Aside from Plaid, are you seeing
investing opportunities that kind of
capture that theme of perhaps consumers
getting their their rights to whether it
be data, finances, or maybe even iPhone
photos back?
>> It's it's an interesting question. I
mean, we there's a lot happening kind of
in in consumer fintech broadly, and I
think um you know, AI is sort of
changing the the conversation here in a
lot of ways. Um it you know maybe it's a
different answer to your your question
but um you know my partner Alex uh
recently announced an investment in a
company called Salient which has uh
launched voice agents for auto loan
servicing right and what's interesting
in this in this capacity is you know
these are large non-bank and bank auto
lenders that have you know very large
you know armies of of call center folks
um now using voice agents who can speak
in you know 50 languages 247 fully
compliantly
you know, many of these markets. And so
I think it's an interesting question of
how is sort of technology and the
software actually doing the work and how
is that changing the relationship with,
you know, with the end customer. Um, and
so that's I think one of the bigger
themes that we're seeing in in consumer
finance. There's a lot happening also in
the back office, you know, in many of
these bigger financial institutions.
>> You know, I want to talk a little bit
about it's funny, you don't necessarily
think of venture capital and politics
until like the 2024 election. And I
think Andre Horowitz really find itself
at the center of the political ecosystem
right now. Uh Mark's very close with the
Trump administration. He's advised
President Trump. He's been outspoken
with his support. Uh the firm hired
Daniel Petty after his acquitt. I think
people would say that's political there.
Andre Horowitz's very first hire, Scott
Cooper, now a month into his gig as HR
chief for the federal government. We had
some reporting recently on the Bloomberg
terminal, Riley Griffin, noting that uh
Scott was introduced to commerce
secretary by Mark and Ben. What what is,
you know, there this connection to a
relationship with the Trump
administration? What is what how do you
feel about that in the sense of like
having a direct line to the
administration or a direct line to
Washington given Andre Horowitz's
involvement in this administration?
Look, I think I think from a macro
perspective, you know, 15 years ago,
technology was sort of this industry
that existed, you know, only in Silicon
Valley. It was sort of not part of the
conversation in DC. It wasn't really a
conversation in most industries. Mark,
you know, famously wrote this essay,
software is eating the world. I think
that's happened, right? Technology is
now proliferated across every industry,
you know, in our society, in our
economy, and as as a result is directly
impacted by, you know, DC and the
regulatory environment. And so I think
their point of view is not it it's
really not partisan. I know that there's
a lot of headlines that that you know
have happened you know from the
presidential election but fundamentally
I think our view is we want to support
what we call the little tech agenda.
>> We want to you know back the on both
sides of the aisle people who support
innovation and support sort of
technologies advancement. So we've
donated to you know Democrats and
Republicans uh in in support of this
issue. Well, do you feel like you have a
more direct line now than you did during
the Biden administration?
>> Certainly, I think as a firm we've taken
a much more front leaning approach. I
think Mark and Ben and others at the
firm tried to spend a lot more time, you
know, in the prior administration. I
think that was part of what governed
their um, you know, decision to be more
vocal, you know, in this presidential
election. I think it's important in
general to have a dialogue with DC
because again I think technology has
just you know permeated every part of
society and you have the largest
technology companies with massive
lobbying arms in DC. there is sort of
this tragedy of the commons challenge in
the startup ecosystem and in the venture
ecosystem because it's highly fragmented
right it's these are relatively small
institutions and so I think their belief
is you know if not us then whom and so I
think we're trying to be sort of a
convening force in creating a voice for
this tech ecosystem again to drive
innovation and ultimately I think better
outcomes for society for the economy etc
>> we're speaking with David Haber general
partner at the venture capital firm
Andre Horowitz
>> and you know David I have another
question for you I cover consumer
finance here at Bloomberg and you know
we did just see the Chime IPO. We've
seen a number of sort of consumerf
facing um fintex do quite well in the
last couple of years and kind of there
are these um sort of household names
frankly that you and I use for a lot of
our corners a lot of corners of our
financial lives. Robin Hood comes to
mind as well but you know I guess I'm
curious like are we
>> is consumer fintech dead? like are we
kind of shifting to a lot of these you
know like we mentioned a few names
earlier of kind of infrastructure
companies financial services
infrastructure companies where it's
still fintech for sure but it's not like
fintech that you and I would
>> know the name of or see the brand in uh
you know we might see their ads on the
subways but we don't interact with them
what are your thoughts
>> yeah look I I think part of it is just
like how the market has evolved right
when many of these companies started in
you know 2012 like early early 2010s,
many of the largest banks didn't have
mobile banking products, right? Many of
them weren't acquiring customers online.
And so it was much easier, you know,
candidly to launch with the wedge
product to spend money and acquire
customers and and build, you know, a
much larger user base. I think the
challenge, you know, over the past
several years is like CAC is the new
rent, right? A lot of that spending has
now gone to the largest technology
platforms to help, you know, these big
institutions acquire their end customer.
And it's just become a lot more
competitive. It's much more difficult I
think to break through and compete now
directly with a Robin Hood or a Chime or
a SoFi etc. It's one of the reasons not
I think there are other reasons
culturally within these financial
institutions their willingness to to
leverage third party technologies
changed dramatically in the last five or
six years and as a result made it much
more interesting to back software-led
companies and infrastructure companies
selling into these institutions to again
solve real problems change their
workflows and I think that part of the
kind of more B2B side of the market has
become more interesting at least to me.
>> David we only have 30 seconds left. What
is the most interesting company that
you've made an investment in that our
audience hasn't yet heard of that should
be on their radar?
>> H there's a bunch, but uh it's hard to
pick. Um Paige wrote a great article on
on a company called Moment that is
building fixed income trading
infrastructure. And so again, kind of a
wonky part of the world, but if you're a
wealth management client, getting a bond
ladder is still a manual process today
at most large financial institutions.
Soon that will be done programmatically.
I think this is a company, albeit more
infrastructure, that's going to become
uh much more wellknown over time.
>> You're a man who knows his audience. We
can talk about bond ladders and bond
infrastructure all day here on
Bloomberg. David Haber, general partner
at the venture capital firm Andre
Horowitz. Also with us, Paige Smith. She
is consumer finance reporter for
Bloomberg News. This is Bloomberg
Business Week Daily.
It's 240 on Wall Street. We do check
markets all day long here at Bloomberg.
We have got the Dow, the S&P, NASDAQ,
all declining right now. A slide in tech
stocks pushing key US indexes toward
their fourth straight day of declines as
investors question skyhigh valuations.
Also minutes ago, top of the hour, we
did hear from the FOMC. We got the
minutes and most Federal Reserve
officials highlighted the risk to
inflation as outweighing concerns over
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last month as tariffs fueled a growing
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mentioned down for a fourth day. Right
now we got the S&P down 30. That is a
drop of 510 of 1%. Dow industrials down
40 a decline of onetenth of 1%. The
NASDAQ composite index down 221 for
NASDAQ a drop right now of 1%. Our MAG 7
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Apple down now by 1.9%. Tesla shares
they're down by 2.3%.
The 10-year yield 4.28% with a 2-year
Spot gold up $29 the ounce up 9/10en of
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now just about flat on the day up $50
per token 113,605
on Bitcoin. Earnings news, Estee Lauder
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stocks lower, S&P down 510 of 1%. For on
demand news 24 hours a day, subscribe to
Bloomberg News now wherever you get your
podcast. I'm Charlie Pallet. That is a
Bloomberg Business Flash.
>> Hey, thanks for that update, Charlie. Do
appreciate it. Well, earlier today, Oak
Tree Capital Management co-chair Howard
Mark spoke exclusively with John Pharaoh
and Lisa Brahmittz on Bloomberg
Surveillance. They covered a lot of
ground in the interview. He said stocks
are expensive, though there's no reason
to think a correction is coming. Here's
what he said when asked about the state
of investing in the US and if the
environment here has deteriorated.
Is the United States still the focal
point for defensive investments?
Uh
>> you know uh I think I I said in the memo
that I think the US is still the best
place in the world to invest. uh the
things that make the US exceptional uh
the spirit of innovation, the free
markets, the rule of law, the capital
markets, the the growth and dynamism, uh
the great companies, these things are
still all true, but as I said in the
memo, we we're the best place. We may be
a little less best than we used to be.
Uh the world is thinking that maybe the
US is a little best, less best than it
used to be. And um and I I can't I can't
argue against that. I mean uh
fundamentally as an investment
environment um
I think uh things are uh are a little
bit deteriorated.
Is there a place where you see has more
opportunities right now just based on
valuations and based on maybe a firming
up of contract law and other aspects
that really lead to a robust investment
backdrop?
>> Um well, as I say, I I still think we're
the best place in the world to invest.
Um and and um
you know
we're a great car at a high price.
You can get some uh cars around the
world that are not as great as ours.
Cheaper.
Which do you prefer?
uh less good at at a cheaper price or
better at at a more expensive price. Um
so you know other parts of the world do
not have our dynamism.
Um uh and uh lots of places in the world
are overregulated compared to the United
States. Um uh but if they're on sale
relative to uh the US uh it's not
unreasonable to want to have some
representation there.
>> Well, there you have it. Just part of
the interview with Oak Tree Capital
Management co-chair Howard Marx speaking
exclusively with John Pharaoh and Lisa
Bramitz earlier today on Bloomberg
surveillance. Emily, as I mentioned,
they covered a lot of ground. Uh in
addition to that he was asked about the
idea of whether or not stocks are in a
bubble right now because of values and
he said in the early days of a bubble
though the critical point for a
correction has yet to come. I heard the
interview I was struck he said it was
like maybe 1997
>> I believe is what he this reminds him
of.
>> Yeah. He actually put in his mo recent
memo that January 2nd of this year was
the 25th anniversary of his memo
bubble.com.
So he's wellversed in financial history.
Uh and reading this, it's interesting.
He also said uh that he flew to South
America on a plane without Wi-Fi, so he
didn't have email or entertainment. So
what did he do? He wrote this memo about
valuations and and potential potential
bubbles here. Uh of course before coming
on Blue Book TV. Yeah, amazing what you
can actually get done uh when you the
distractions of modern technology.
>> Well, in other news today, speaking of
modern technology, Google introducing
the newest additions to its portfolio of
Pixel devices. Bloomberg Technology
co-host Caroline Hyde is at the event in
Brooklyn. She's standing by with
Google's senior vice president of
platforms and devices. Rick Osterlo,
fresh off his keynote address at Made by
Google 2025. Caroline, take it away.
Tim, thank you. There were quite a
number of celebrities alongside Rick
Oello. I mean, just an array of fabulous
people coming on to talk about the
latest hardware, but for me, the
takeaway was the AI was Gemini just
interweaved between everything. Is this
the showcase? Is this why you have
hardware to just show off what Gemini
can do?
>> Yeah, I think that's a big part of it. I
mean, Gemini is a huge part of Google
strategy. Um, we've made so much
progress with it. We've got the best
models around. We have the best AI
assistant. We're just so excited about
uh what we've talked about today. And
yeah, I I personally love using the VO
video model. You saw a video of my dog
talking in the show, which was really
fun to put together.
>> Cute poodle across something.
>> Yeah, he was a he's a Portuguese water
dog who somehow speaks English. But it
it was really really fun uh to to put
that together. And and this this is kind
of the power of AI now. You can do
things for fun. You can be a lot more
productive with it. And Gemini is the
thing that powers it all for us.
>> I mean, Steph Curry's doing things with
sports. You had Alex Cooper there.
Caller Daddy doing things with camera.
I'm interested though how this sets you
apart that what are you offering, do you
think, versus the competition? How am I
going to be able to use it in a whole
different way than currently I could
with a competitive out there?
>> Yeah. Well, I I mean, I think AI in
general just transforms all of these
products. Um, on the phone, it's going
to make it so much easier to
interoperate with your phone. You just
talk to the AI and it'll do things for
you. You can show your camera to the AI
and it'll give you hints about what to
do. Like if you're trying to do a
project at home, like fix some plumbing
or uh fix some shelves, whatever it is,
AI can help. And um we're really excited
about our partnership with Stephen Curry
to apply this AI technology to personal
coaching. And you know, he's I can't
think of a better person to work with
than him. He has sleep coaches,
nutrition coaches, fitness coaches, and
and he wanted to work with us to bring
this kind of capability uh for personal
coaching to everyone. And so that's what
that partnership's all about. We're
really excited to work with Steph.
>> And in many ways, what you were helping
oversee the purchase of Fitbit back in
the day, it's now in the form factor of
a watch that you've got on.
>> Rick, though, what form factors are we
yet to see? We've got the uh you got the
pods in your ears, you've got the watch,
you got the phones,
>> right? I mean,
>> I think there might be a few coming
next. Um, well, we're bringing Gemini to
a bunch of surfaces you use every day,
but they'll probably be used very
differently, like automotive. They'll be
Gemini in your car, on your television,
in your smart speakers and smart
displays. But I think a really exciting
thing that'll come in the future is
Gemini and glasses. So, we're working on
smart glasses that'll run Gemini as the
main way you interact.
>> Any year that you think that that'll be
coming out? Is this going to be
>> it'll be 2027
>> some sometime next year will be pretty
exciting to see
>> 2026 I'm interested in how the vertical
integration so helps look you've got the
tensor G5 the new chip
>> what does that bring in terms of the
effectiveness
>> yeah well I mean a big focus of Tensor
all along has been on trying to run AI
um and you know we're trying to show
what AI on devices can do for the whole
Android ecosystem and we're making an
example with Tensor but also working
with all of our other silicon partners
like MediaTek and Qualcomm and others.
And what we're trying to do is run the
Gemini Nano model and do things like
Magic Q that you saw today.
>> Talk us through that for the audience.
>> Yeah, I mean Magic Q um just allows a
user to be able to quickly process
something from another application when
they're in the context of of say like
your messages app. So, for instance,
there were examples shown of uh pulling
up uh reservations for a restaurant and
just having automatically a little
button that says call the restaurant
when you're in a text thread with a
friend.
>> Jimmy Fallon helping show that one.
>> Jimmy Fallon was very good at showing
that. But, but it's just an example of
trying to make things easier for the
user and help you be more productive and
it's using AI to kind of make these
connections across applications.
>> What I love that you said at the start
of that answer was about the Android
ecosystem. Yes. And I think guide the
audience for us for a minute. Why have
this hardware? Is it to be in and of
itself profitable? Is it to be showing
off what Android can do? Is it more
about just the impact that you're going
to be able to have with partnerships as
well under this?
>> Yeah. I mean, it's a little bit of all
those things. Um, but certainly a key
thing is to be able to show off our
software so that everyone can see what
it's possible of doing. Um and and so
you know it's we found it to be the best
way to get our Gemini AI capabilities
out through Android through our partners
and with Pixel we can show uh the best
that it can do. So we're we're very
excited about that combination.
>> I mean the world of technology is a
beautiful one of frenemies and you've
got the partner but also the competitor
that is Samsung. How does that evolve in
this AI ecosystem?
>> Well I mean we work very closely with
Samsung. We we work together with them
on Gemini technology as well. We're
really excited about the launches they
just did with Fold 7 and Flip 7. Um
showcasing some amazing capabilities and
some great hardware. And that's sort of
the benefit of Android is it's an open
ecosystem where a lot of people can
participate. They can show what their
brand can do and and we're just so happy
that they're able to take advantage of
Gemini too.
>> Bloomberg Intelligence, our analysts are
always so great at sort of helping tell
the story of the entire vertical nature
of Google. Manip Singh was on the show a
little bit earlier and he was really
interested in ultimately how you're
going to use sort of the chip locally
within Gemini as well. How does that
give you an edge?
>> Yeah, I mean it can be very helpful to
be able to process things on the device
either for speed of operation or perhaps
when you're in and out of network
coverage and also of course it can help
keep things private too. You know if
there's something very sensitive and you
just process it on the device, it just
stays there locally and you don't have
to worry about it. Um, but you know, all
these things are just part of a whole
picture of AI and we're we're just
excited to be able to have this whole
stack, this full stack that allows the
users to do so much with Gemini
>> and it's a global offering, but already
what is it next week I'm going to be
able to buy the phone?
>> Yes, that's right.
>> Maybe a bit later for the watch. Is
there a supply chain issue here? Is what
is putting us back in terms of
manufacturing?
>> No, it's just sort of normal operations.
We have sometimes staggered releases and
the watch is just coming out a little
bit later this year.
>> Has everything been beautifully seamless
when it comes to supply chain? We always
know.
>> It's always tricky. It's always
difficult managing a supply chain, but
these products are coming off very well.
>> And more broadly, is is the
measurability of success here the number
of sales, the profit profitability of
the business or more how everyone goes
off and starts adopting Gemini more
broadly? Yeah, I mean I it is probably
the last thing you said is the most
important thing. We want to showcase
what Gemini can do for everyone and then
get it distributed as broadly as we can.
I mean Google's mission is to try to
serve everyone and Pixel is one way we
do that, but of course there's so many
other ways. We we offer Gemini through
all of our partnerships. We offer Gemini
through the web. We offer Gemini in so
many ways. And so so um this is one way
that we can get it to market through
Pixel. Well, it's about the platform as
well as the devices, and that's exactly
your title, of course, Google SVP of
platform and devices. Rick Oslo, it's
been a joy speaking with you. Thank you
very much. Have a great rest of your
day. And back to you in the studio.
>> Thanks so much. A big thank you too to
Caroline Hyde. Standing by with Rick
Osterlo, Google's senior vice president
of platforms and devices. They are doing
that in Brooklyn. Fresh office keynote
address made by Google 2025. Shares of
Google, by the way, Alphabet, I should
say, today down by close to 1 percentage
point, but we're seeing tech slide a
little bit. Taking a look at the markets
right now, the NASDAQ Composite down
9/10en of 1%. The S&P 500 down about
4/10en of 1%.
I'm Tim Stenc along with Emily Grafo.
Let's take a look at some stocks on the
move today. With us is Bloomberg Newses,
Vdonna. Hi, Rick. Vdonna, what do you
have on your radar? I have a slate of
retail companies that I'm looking at
that are really in the news today and
they're I I chose them because they all
have sort of personal relevance maybe if
not
>> just to me but to all of us. Okay.
>> One is TJ Maxx. That's ticker TJX up
about 3.4% today after the offpric
retailer boosted its earnings per share
forecast for for the full year. I
personally love the TJ Maxx brands. I'm
a huge fan of Marshalls. I think a lot
of people are and you can see that you
know customers who maybe are growing
really worried about inflation and
tariff related issues that they actually
have been shopping at TJ Maxx and
Marshalls and some of their other brands
uh as we know that they are offering
things at a discount.
>> Maybe they're maybe they're pivoting
away from some other higherend
retailers.
>> What's the personal connection to this
one?
>> Are we talking about Target? I was
trying to segue into Target.
>> I want to know, but no, the personal
connection to TJX.
>> Oh, I said I love Marshalls.
>> Oh, okay. Thank you.
>> I I'm like
>> sometimes you have to say it twice for
me.
>> Oh, okay. Should I say it a third time
for you? I I love Marshalls. I think
it's the best store. It's so fun. You'll
You'll spend so much money there on
stuff you absolutely do not need, but
absolutely love.
>> Okay.
>> Yeah. I'm not a spokesperson, by the
way.
>> What about for Target?
>> Target. uh ticker TGT down some 6% the
retailer uh is picking an internal CEO
appointment um which is the news of that
is sort of offsetting better than
expected uh second quarter results and
it did maintain its guidance but still
shares are lower today because of that
news about the CEO
>> and he'll join Target's board this new
um CEO while the current CEO Brian
Cornell who has led the big box retailer
since 2014 will transition to focus on
his role as executive chair. It's always
kind of disappointing for the company,
for the person, you know, assuming the
role when you see the shares fall as
much as they do when there's like a
leadership change.
>> Well, it's been a really tough road for
Cornell. Uh there have been a lot of
issues not just with the company's
sales, but also culturally and sort of
looking for the identity in this new
political environment. Um but yeah,
anytime you see executive shift or
executive change over in a stock
response like this, I think it
>> and the opposite happened to Starbucks,
right? Brian Chipotle's uh CFO CEO, he
when he went over to to Yeah, I think it
rose 25% that day or something along
those lines.
>> Okay, finally, Estee Lauder.
>> Estee Lauder, another retailer. Again, I
I know I said, you know, something that
might be near and dear to a lot of
people's hearts, maybe to yours, Tim.
I'm not sure, but shares are off by 5%
today. It said it hired external
adviserss to conduct a review of of its
brands um of the brands that it owns. Uh
and they're really looking to accelerate
a turnaround after years of sales
declines. Obviously, they carry a number
of different brands, worldrenown
uh and um and for those who are not in
the know, it's skincare, it's cosmetics,
it's hair care, it's fragrances. though
shares off by 5%.
>> And it's fancy skin care. One of their
brands is La Mer, which infamously has a
moisturizer that goes for $390.
>> Tim, if you're into the luxury skinare
uh lore,
>> I I will say they do own Labo, which is
the what my wife really likes. So,
>> fragrance. That's a fragrance brand.
Yeah.
>> Mhm. Okay. So, I know it.
>> Yeah. I knew you would. Yeah. Near and
dear to my heart, too.
>> Yes, exactly.
>> Yeah. It took me a while to find that,
though.
>> Oh, okay.
>> That's Donna Hierrick. She is Bloomberg
News crosset reporter. For more
conversations like this, check out a new
Stock Movers podcast. You can subscribe
for 5minute episodes on the biggest
winners and losers in the stock market.
Check out Stock Movers on Apple,
Spotify, or anywhere you get your
podcasts. Taking a little bit of a turn
lower for tech stocks. The Nasdaq
Composite down a little over 1% right
now. The S&P 500 down just about half a
percentage point. Taking a look at the
industry groups, consumer discretionary
to the downside of 1.3%, it down 1.3%,
communication services down 7/10en of
1%. Well, that is going to do it for
Bloomberg Business Week Daily on
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among the most read on the Bloomberg
terminal after Croup hiring a law firm
to investigate complaints about behavior
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Also, Bloomberg exclusive, Lauren Grush,
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