where we have less efficiencies because governments are trying to avoid the vulnerabilities of globalization. others say we are headed to a productivity miracle. these technologies will more than offset what we lose from the less collaborative world. that could happen. the pessimists say the reason we are here in the first place is because of massive gains in the macro economic paradigm that were distributed very unequally. we had big winners and losers. the pessimists say ai will exacerbate that tremendously. with massive winners and losers it will be destructive to society. it is a fool's errand to predict exactly what will happen. at bridgewater we try to be practitioners. get your hands dirty. understand the technology deeply and prep yourself for a wide range of outcomes about how this

will play out. sonali: bridgewater has been using ai for its own processes. late last year you launched a fund at bridgewater starting with $2 billion that uses machine learning as the primary basis for decision-making that builds on proprietary technology. what have you learned from this in terms of how machine learning based investing is different from human led investing? >> i feel very lucky. from the 1980's we know no human brain can't get their head around everything in the world. we are not moving from a human led investment process to a machine led investment process. we are using scientific calculations and then we were using excel sheets and then we were using the most complicated

experts, this was ai before ai to make investment decisions in a systematic way. for us this is another step along an arc and what we have learned through this process of the artificial intelligence investment associate is a strategy ruled out at the beginning of last year. it is the same thing people do but in a machine learning way. we learned through scientific breakthroughs within bridgewater that you can reason and generate alpha in a machine learning first way and that strategy competes with humans and generates unique alpha. that has been running for a year and a half and it is comparable and it is mind growing in the space of hospitals. -- in the space of what can happen. beyond the numbers this year, the most important thing is it keeps us up-to-date on where things are going, not only within the asset management

industry but also as you think about how it will impact the macro economy. sonali: at the time of the launch your co-cio said the fund had a potential to change the hiring and composition of staff. what skills do you think future employees of bridgewater will need. we were joking earlier, maybe the junior analysts do not do away but boarded they have to be doing something different. >> which has always been the case. when you have an expert system that does a lot of what humans have been doing on their phones, you start to move people to do what machines cannot do. we have been shifting the type of humans we bring into bridgewater for 50 years that means for analytical skills in the financial backgrounds to people who are conceptual and asked philosophical questions because they will be very levered with technology and how they explore their questions, that has been moving. this is a big shift but it is a

big shift in the same direction to think about what can humans do. what can they do machines cannot do? the one thing i am worried about is when you think about that arc , you have to think about what trains people over time. there are basic jobs that people have in many places where you sleep on your desk and you do the tough work that leads you to be able to do the higher level, more conceptual things. one of the things we are thinking about is we are well-positioned already to replace a lot of the basic tasks with machines. what if that mean that you have to be conscious not only of today, but what does it mean? sonali: how does this fit into the broader trajectory of bridgewater. when i think about where you stand today you've inherited this firm that is half a century old. how do you position the firm for the future? this is on the scope of positioning for the next 50

years. what is bridgewater to point out? -- what is bridgewater 2.0? >> there are things that have been the bedrock of bridgewater. i said this on this stage years ago. sonali: just after your name ceo . >> bridgewater is about getting an incredible group of people together and having this unique culture that puts in the center of everything the desire to be excellent because that is the only way to accomplish this incredible difficulties. that stayed the same. if you look at the three things i said, said the macro economic paradigm is shifting and because of that the tailwind is done. alpha generation, the positive uncredited alpha we turn for 33 years is more important than

ever. a deep understanding of cause and more important than ever. we have to hold the hand of our clients on days like today in months like the last month where they are asking how are these new policies going to flow through the economy. what is going on? tremendous focus on improving the quality of understanding. the second thing is portfolios, we are in our 50th year this year. it has always been about partnering with cios and helping them achieve their goals. these were investment goals, resiliency, diversification, we've been very focused to see that would increase the impact across the portfolio because allocations will be small. $1 trillion. we've been focused on the ability to invest in china. our onshore strategy returned 30%. i say that not because of the

number but it shows where our focus has been. technology will disrupt us tremendously. making sure you have a partner in bridgewater that you can lean on to show you where things are headed, those are the big three areas we have been focusing on. sonali: we will get back to where things are headed but before we get there i want to give the audience a chance to get to know you. the more i have learned about you the more your story is like nothing i have ever seen in finance. you did not graduate from high school initially. you eventually went to work and then you started at bridgewater as a 33-year-old intern. how? sonali: by jewish mother, for using i do not graduate high school on this stage, her heart is broken. it is true.

i have never shared this. i have said many times that i know i am different. a lot of people comment on the fact i am not wearing a tie. i come from the other side of the world, i come from israel, i've talked about being a third generation to grandparents that were jewish refugees from a family that was murdered in the holocaust and i talked about how the story of my life is connected to seeing them establish a country and i talked about how incredible of a people with values can do incredible things that i've always jumped the story to say i ended up at bridgewater. if you double-click on that story i was a bad student in high school. i did not get a diploma at the end of 12 years and i was very lucky that israel there is a mandatory service everyone has to do with the age of 18. because people like my grandparents that come from libya and hungary and poland, different backgrounds and different languages, to come

together to accomplish this incredible task of putting a country together, they knew they had to make the most out of human capability and do that through the service. the service ignores everything that happens up until the age of 18 and based on your merit reassesses you. i tested at 18 thinking i was incompetent and tested extremely highly. that changed my life and lead to a very successful service and the reason that is important is because 15 years later i am at 33-year-old already with gray hair, winter internet bridgewater. it is me and six other hung over dartmouth 20-year-olds. my english is not great. i am out of context and it is pretty confusing. to say i feel lost is not the beginning of it. i am at an organization that is trying to make the most in a mirror tonic -- in americredit -- in a meritocratic way.

luck matters. i was lucky to be in a society that i got a second shot in the service. the second thing is back to the ai point you talked about. differences in thinking and unique contributions are very valuable and i think that is especially true in a world where a lot of the generic intelligence will be commoditized. the third thing is a way to capture unique ways of thinking is to inspire us to have a real meritocracy. that is true in israel. that is true at bridgewater. that is key to facing the challenges we have as corporations. sonali: another major part of your background is your is really heritage. you are talking about complicated geopolitics. in the past year alone you've been back to israel, you've spent a lot of time in the middle east, including saudi arabia, qatar, bahrain, all in

your capacity as ceo bridgewater. what can you share about the trajectory of the middle east and do you see a path to peace when it comes to the conflict israel? nir: let me start where i feel like i have to. october 7 is incredibly personal for me. not just october 7 but also what happened subsequently. there are still 59 hostages in gaza. there is suffering in gaza, there is suffering in israel. these are family members, our community. some of them are neighboring countries. these are partners of bridgewater. it has been a year and a half of trauma and my heart goes to everyone on this. it is important for me to say i am proud to be jewish. i am proud to be israeli. i am proud of my countrymen and women and i feel very lucky i

have had the chance and this job go around the world, including in the middle east and places that matter and represent the best of israel and learn about the best in many of the countries you have mentioned. to forge real friendships with people and incredible leaders and your question about where things are headed, i have said this before. i have a deep belief that tragedy and trauma and suffering leads to resiliency. resiliency leads to evolution. if you look at the second world war and the new world war that came out of it, if you look at the great depression and the new economic paradigm, if you look at the holocaust and my grandparents rising from the ashes and building a country, if i said a great group of people can come together and share values and forge a different future i would go back to all the people in the middle east, not just in israel but in saudi arabia and the uae.

there is a resilient generation that has suffered a lot and i am more hopeful than ever that that generation can create a completely different future going forward in the middle east and a 100 year piece. sonali: what role does saudi arabia, does the u.s. play in negotiating peace and is there a 2.0 version of the abraham accords? nir: that is not for me to answer. the thing i would say is that i think saudi arabia, the u.s., the uae, bahrain, there is a generation of leaders. and i talk to these people they are just like me. they have the same aspirations as i have. a coalition of that group of people in israel and in the region is a way to create what you call a second abraham accords and it is coming.

i am more hopeful today than i have been five years ago. out of the suffering there is a crystallization that creates a necessity to evolve. sonali: i want to get your thoughts clearly on this because the human toll has been devastating in israel and in gaza. and beyond, really at this point. how you see the conflict playing out given the cease-fire talks have stalled? nir: if i said it is a fool's errand to guess where ai is going this is truly a fool's errand. until the hostages are released there is no solution. also until there is a future for the palestinian people, there is no solution. there are solutions that can be put together but it will be put together by a new generation taking leadership and coming

together and making sacrifices. sonali: a lot of people look around and say in the wake of world war ii when you look now a lot of the protections that were put in place to make sure the world to not fracture again, some of those protections are now under threat, particularly with the changing guards across countries. do you worry about that? nir: personally yes. that is a part of the macroeconomic paradigm that is also a geopolitical paradigm. out of the trauma of world war ii the world started a series of events that led not only to protections and institutions but increased collaboration decade after decade leading us to a long period of extreme collaboration. there is no question that paradigm, geopolitical and macro economic paradigm is being undone. there are reasons that is

getting undone. there were problems that need to get fixed. if that is not done well instead of correcting the problems the system had you can create a disaster. i worry that between correcting the problems and causing complete chaos we can easily end up being in chaos. sonali: before i let you go, this is kind of a number -- this is kind of another bummer of a question, do you think the world is more dangerous than it has been in a long time? nir: the world is more dangerous than it has been in recent history. this is one of the problems we have with humans. if you go back 150 years, if you are in the u.s. in the 1800s it is tough. you have militias, women have no rights, black people have no rights. you have the spanish flu come then you have the great

depression, then world war i, world war ii, the assassination of kennedy and martin luther king. we have a bias of the last 30 years which were particularly calm. the world is more dangerous today but this is not a bigger problem than we have seen in the history of our parents and grandparents. sonali: thank you for such a clear conversation. that is the ceo of bridgewater. lisa: that was an in-depth conversation with the ceo bridgewater associates speaking at the bloomberg best conference in downtown manhattan. we will bring you more comments throughout the day but in the meantime i want to check in on the market volatility we have seen. you look at what is happening in equities. there is a lot of red.

president trump following through on his long threatened tariffs a new phase in his trade war. the s&p 500 gave up all of its postelection gain. it is now sitting just above its 200 day moving average. it fell as much as 2% so it has paired some of its losses but yesterday i dropped about 2.5% at its lowest. global stocks, certainly that is the concern. it is not just developed markets but also emerging markets as well. there is a flight to safety sparking a rally in u.s. treasuries, especially the short end of the curve. two year yield coming down way more than the 10 year and therefore a steepening of the curve. traders are pricing in three rate cuts this year. a huge change from earlier in 2025. among major currencies the peso is leading losses, approaching 21 per dollar. we will get into mexico's response to the trade war shortly but that is the big

mover in the fx world. let's get over to emily graffeo for a couple of our individual movers. emily: you can see the losses weighing on big tech stocks and also banks. amazon, meta, those tech stocks leading losses in the s&p. tesla noted china sales are slumping so that stock is also down. it is not just tech, it is consumer discretionary as well. target and best buy both warning consumers should expect higher prices due to tariffs. for target they get a lot of fruits and vegetables from mexico during the winter and best buy has appliances and gadgets and they get most of their supplies from mexico and china. the tariff news is not good for those companies and best buy really getting pounded, down almost 15%. finally walgreens is nearing a deal with sycamore partners that would take the company private. that stock is higher.

the transaction can be announced as early as this week in the journal also reported earlier that sycamore was closing in on a deal to acquire walgreens for $10 billion. now we have sourcing from bloomberg reporting six banks are working on funding packages of $12 billion for this walgreens take private deal. we are watching that. scarlet: thank you so much. emily graffeo with our movers. it comes to these trade tensions justin trudeau spoke earlier about the fallout from president trump's tariffs. >> today the united states launched a trade against canada. their closest partner and ally, their closest friend. at the same time, they are talking about working positively with russia, appeasing vladimir putin, allying -- a lien, murderous dictator. make that make sense. scarlet: we have global coverage

of the trade tensions with derek in toronto and perley not in mexico city and marielle in washington. we heard justin trudeau's comments back there. canada has also retaliated. tell us what they are. >> the first round is on about $30 billion worth of goods the u.s. exports to canada. a lot of foodstuffs, things like coffee and wine. the much bigger ticket items, about 120 5 billion canadian dollars worth of good. that is steel and aluminum and cars and trucks. president trump has talked a lot about the auto industry and said at various points he does not understand why canada is allowed to make cars and export them to the u.s. there is also a flow of those products going the other way. u.s. factories have about half of the canadian market, by far the largest seller of the -- of

vehicles into canada. those tariffs come on more towards the end of march. scarlet: thank you so much. let's go to cara lena in mexico. president sheinbaum has chosen to wait a bit before announcing your response. tell us what we know. >> president sheinbaum is showing she is charting her room course on the trump response. everyone this morning was waiting to see whether she would announce retaliatory tariffs. instead she said she would hold a major political event on sunday at the iconic mexico city square. this is where presidents usually hold their inaugural speeches or when they want to give a big government update. this is very symbolic that she is choosing this location to announcer next steps. she is also leaving the door open for more dialogue. she said she is looking to speak with trump himself on thursday. i think there's also the possibility that if that

conversation leads to some kind of new agreement that we may not end up seeing the retaliatory tariffs at all. it is an interesting moment and we will certainly be tuned to how the conversations go, especially when you remember that in the past week shein bound -- president sheinbaum's government has taking many of the steps trump was looking for, including adding more people to the border and working on security. scarlet: let's bring in mario parker in washington. what is important is the context. president trump is due to address congress this evening and upon size state of the union. mario: it is the big homecoming game he has been looking forward to and it is raining outside to your point about so much red on the screen. a lot of this is self-induced. mark is not properly digesting the tariffs and the trade war's in the way the president had hoped and promised to americans when they sent him back to

washington, d.c. with a mandate to fix the economy. scarlet: mario parker in washington. thank you so much to our panelists. let's talk about the stock of the hour. best buy following the most since 2020 after releasing the lackluster outlook. its guidance does not include the impact of recently and permitted tariffs, the ceo is saying price increases are highly likely on the goods it does sell. best buy and target among the retailers like walmart and home depot taking a fairly conservative outlook and warning consumers who expect higher prices. bloomberg slowly meyer joins us now to give us more details. the commentaries what is steering investors, isn't it? lily: i think it was on the call today and the ceo and other executives told everyone consumers may be expecting higher prices and that is when the stocks continue to fall. scarlet: in terms of where best buy's goods are from, i'm guessing china is a big part of

that and there's no question trump was going to impose tariffs on china. that part was certain compared to mexico or canada? lilly: best buy gets most of its goods indirectly from china or mexico, those are there two biggest countries they source from. scarlet: in terms of what else analysts are saying to they see any silver lining? a lot of these are things outside best buy's control? lilly: i think everyone is in a wait and see mode. best buy executives are saying we are also waiting to see what will happen. i think the next months will be interesting. they are not expecting to see real impact from this until the second quarter. scarlet: this is uncertainty that plagues the company and the industry. is anyone saying anything about positive catalysts for best buy, products that may get consumers into stores? lilly: on the call they were talking about software changes and software updates that will

cause consumers to purchase new products and they also said they saw positive sales within computers and tablets as well. sonali: the refresh -- scarlet: the refresh cycle might prompt people but it still remains a tariff outlook prompting a lot of the concern. lilly meyer covering best buy. we should mention target is a big decliner. as we take you to commercial break, just a quick note on the markets. the s&p 500 continues to pair some of its losses and it is now only down about 1.1%. earlier it had been losing as much as 2%. this is a halving of the decline we saw earlier but the data points we get this week will be crucial, especially when we get to the end of the week and have the jobs report on friday. a lot of questions about hiring

and how gun shy a lot of the companies are when it comes to the outlook. not a lot of certainty about what is to come in the weeks and months ahead of them. coming up we have more from bloomberg invest taking place live in new york city, including hearing from the head of consumer banking at bank of america, aron levine. this is bloomberg. ♪

scarlet: welcome to bloomberg markets. i am scarlet fu. marketers have to their losses. of the s&p 500 done about 1%. still well below its 50 and 10 day moving average. the vix above 23. earlier it had a high of 26, about the six month average of

17. there is buying in treasury putting the yield lowered to 3.91%. as traders increasingly bet on three rate cuts this year. the pacer the big loser among mexican currencies after mexican president claudia sheinbaum says she will announce cattle were purpose -- counter tariffs sunday. at the bloomberg invest conference sonali basak death with aaron levine. sonali: standing by with aaron levine head of preferred banking at bank of america, the president of preferred banking. you deal with a lot of consumers when it comes to bank of america's business. when you look at what is underpinning the market, and i want your thoughts about the broader tariff story here, how do consumers in particular respond? the tariffs spurred threats

about inflation reemerging. do you worry about that too? aaron: any uncertainty is troubling for clients. we start off on solid footing. spending the first part of the iraq 5%, 6%, low unemployment, inflation working its way down. clearly the story of today, the tariffs and market reaction is driving, what does it all mean? what is the uncertainty? sonali: how do you think about tariff effects more broadly? is it just inflation? aaron: it's too soon. the real challenge is that there is a lot of uncertainty around what does it mean? people react. for our clients it is always about commit the advice we give them is to fake long-term, reassess your goals. what is your timeframe? what is your risk profile? there will always be volatility

in the marketplace and today is an example. sonali: we were talking in a commercial break that there are so many changes happening in the market now, the bond market in particular, seeing a drop off in yields across the curve. for the people holding so much money still in cash is today a good day to rethink that? aaron: anytime there is a correction, if you are a long-term bull, there are opportunities. a lot of our clients had been holding cash or moving back and i expect a lot of them to take advantage of these opportunities. there's a lot of great companies. as their stock comes down it is an interesting opportunity to buy. sonali: to your point on buying the dip, and the other hand, what about the bond market? four for the first time in a long-term fixed income has become attractive to a wider group of investors. do you have more people willing

to participate in the market? or is it still too confusing for them to do so? aaron: we have a range of ways clients can interact. we have a self-directed portfolio. clients use our research to make those decisions, all the way to our merrill lynch and private bank that work with advisors. each individual has to make decisions. today we are seeing a lot of conversations about, how does this impact me? what should i do? how should i take action? sonali: it is a tough day in the markets, not just today, but yesterday. think about silver linings. look at the 10 year yield. look at it falling. there is a question about whether it is fallen for the wrong reasons, which we will get to in a second. does it create relief in certain parts of the economy that have not seen relief, like mortgages?

aaron: certainly rates coming down presents a eyes saw the committees some burden. but the key is not to overreact too soon and stay on a longer-term strategy. sonali: how long do rates need to come down or stay near this level for you to see that affect? aron: a big percentage of our clients have mortgages under 4%, given how long rates stayed low. it still has to come down a bit before there is a real entry back into the market for refinance. we have a little ways to go. sonali: 4% is a long way away. is that even the reentry level at this point? what level your time -- are you telling your clients to reenter? aron: you want to see rates, down below or you are currently setting to make sense. we have a while. people will stay where they are. then the question is do to housing market. challenges are not consistent

across the country. there are some parts of the country where you see supply quite high. some parts where it is low. it is regionally based on how clients are looking at the housing market. sonali: do you feel like you have to talk to your clients about the possibility of recession more? there are clearly growth concerns in the market. is the 10 year fallen for the wrong reasons? aron: the obligation is to continue having conversations and make sure clients understand their own profile and how long they are looking to invest for. the economy is still strong. we still have low unemployment, good spending, and strong corporate profit. overall, it is still a good story. obviously there are some watch items and things happening to put some concerns up there but underlying it it is still a strong story. sonali: what you watching from four that would've said to that story? aron: we are focused on making sure clients are supported through all the different

volatility we have and making sure they have a long-term outlook. we go through these all the time. it's not about one moment to say, now we will make a change. we will watch and see. unemployment is probably what we watch closest. sonali: days away from jobs day. given the volatility you are seeing an jobs numbers, how much data do you need to see before you start to get worried? aron: we have the best researchers and economists added industry. they look at this every day. we are constantly evaluating what the markets are. underlying it now, there is still strength, the most important thing. today is a volatile day. tomorrow can bring something else. the key is, how do we help our clients stay the course on what is important to them. sonali: i take your point on the consumer still being strong. generally, you see it. however, inflation expectations have risen. how do you grapple with that?

how does it create a change in behavior? aron: inflation, clients have been dealing with a now a couple years. it is starting to come down and there is optimism. spending a strong. what will happen with consumer spending now? and if inflation starts to kick back up? keep in mind, our clients have more deposits in their checking and savings accounts pre-covid -- then they did pre-covid and it is up substantially year-over-year especially low income. you have people who have cash, who have bad lenses higher than they was managing their budgets through inflation. it puts pressure. utility bills is another watch items that can put extra pleasure. -- extra pressure. it was a low unemployment, and money in their accounts they can support the inflation. scarlet: -- sonali: thank you for joining us. a lot of things to watch as consumers navigate the environment. aron living head of consumer

banking. scarlet: sonali basak speaking with the head of consumer banking at bank of america. next we go to the bloomberg invest conference where goldman sachs chief investment officer marco argento he will join us. this is bloomberg.

scarlet: this is bloomberg markets. i'm scarlet fu. in downtown manhattan the bloomberg invest conference is taking place. sonali basak is with marco argento the the goldman sachs chief information server. sonali: i am with marco argenti

the chief information of the red goldman sachs and i want to dive right into how you are using artificial intelligence at goldman sachs. in the many years i have covered goldman, there have been many ways you have already been using ai. but now it is generative ai that is supposed to be the new big thing. think about the models you are using. how are you taking the treasure trove of data goldman has and overlaying it into the different models you use? marco: absolutely. we have people from pretty much all major businesses leveraging ai and in generators -- ed generative ai today for a variety >> of workflows and our approach is to use a variety of models given the fact that as you have seen the models have been evolving very rapidly. there is not really one-size-fits-all. > you need to choose which one fits a different task.

those use cases range across different areas of the bank. private wealth management asset management. also developers, about one fourth of our organization. we have over 12,000 developers. we have been leveraging ai for efficiency in a major way. sonali: what does this look like? are you giving the ways your staff across different divisions are using what you are creating to make their jobs more efficient? marco: with private wealth, you will have a are creating, for example, drafts, or looking at portfolios and analyzing dozens of underlying positions to really summarize those businesses in a way to explain them better to your client or creating reserves on behalf of your clients. it is a fantastic way to accelerate drafting.

and then and there is one of the key supports of the ways we use ai, and extent of and for people really remain key in the center of it. in asset and wealth management there are thousands and thousands of public filings and sometimes a lot of signals hidden in the noise of those filing solar in the boilerplate. you can use ai to extract those signals. those are incredibly interesting use cases that right now we are just taking at scale. scarlet: you mentioned human in the loop. i reckon that is because of a lot of reasons of security and safety that apply to ai. a lot of things were initially reticent to use different models made elsewhere and then bring them inside the door. what are the big concerns? marco: there's a lot we don't know yet about ai in general.

they are really new technologies emerging in the last couple years. this is why it is so important to take a responsible approach, applying controls so you protect yourself from potential inaccuracies or hallucinations. there are a lot of techniques which can be used to make ai more accurate. one of the most important is around the quality of the data. you mentioned that before. i think when people ask me, how should i approach ai? my response is always to make sure you have quality data. quality data, not only when you are training in ai, but using ai to find answers, for example, and having quality data when you do retrieval of documents or information, putting it in a way that ai can understand. around ai we have created a platform that is all that. it retains controls, implements

safety and implements a clear and clean interface to data and it translates the data that we have for the documents in a way that the ai can understand. and if you want to use an analogy, let's say the models are kind of like the nuclear power material. the gsai platform is the power plant around that that keeps it safe and makes it safe for usable energy. sonali: gsai, what does it do that other banks can't? you have an enormous amount of information in goldman sachs about what the markets are doing. how do you integrate that into your processes? would you ever consider making it more public facing? marco: the three key elements are the quality of the data, the quality of your people and the quality of our you can use ai and we think that to ask -- succeed, you need to excel in

all three. we have invested a tremendous amount to make data understandable to the , eye and understandable to humans. we have built a whole platform in the last four years that we also open source code of legend and we want others to use that platform. we think better data is the better data for everybody. you know the world is very interconnected. when we talk to another bank would like the bank to speak the same language. sonali: when you think about the bigger picture here at the story of generative ai has been moving quickly in the amount of dollars is massive. blackrock today announced another tens of billions of dollars in infrastructure. what does it go next? when you think about the future promise of ai, where you think, especially in the financial industry, that it will be the most productive? what is it the next big thing?

marco: you need to think about it in two waves. the first wave is seeking efficiency. in our developer relations we see examples of like 20% efficiency. in the big picture of the number of developers we have, that's actually a big number but it does not stop there. the future is where ai will actually help you grow your business and make better decisions, faster decisions. what is called an agent tick framework with the ai can do tasks on your behalf. at that point, efficiency is no longer a fraction of what the human can do but it can be a multiplier of what humans can do. that is the basic premise of ai long-term. scarlet: sonali: we are watching engineers in charge. that is marco argenti. scarlet: coming up on bloomberg

markets, u.s. tariffs now a reality and markets have been hit by a wave of volatility this week. earlier today on bloomberg invest, the soros fund management cio and ceo spoke about wild swings in the markets. >> i would have thought the markets would have held up better, and i would have also not thought we would have had the level of the level of frenetic activity out of washington. when we look at the headlines over the past 24 hours, they have been kind of breathtaking in speed and scale.

scarlet: u.s. equities joining the rest the world in a selloff.

the uncertainty over trade wars remains the catalyst. you take -- do you take comfort from the fact the s&p 500 has pared back a huge chunk of its losses? if nothing else does this suggest we are not seeing disorderly sailing? callie: we aren't seeing disorderly selling at least for now. you saw the nasdaq 100 hit it's 1 -- 200 day then markets across the board had a nice balance there. i am not putting too much weight into the strength we have seen. obviously i hope stock prices keep going back up but i would be cautious especially seeing the economic effects of tariffs. scarlet: in your view, what exactly are investors were priced into? tariffs are moving targets. callie: that is a question. i think to a certain extent investors are preparing for

a world where there is more tariff action or unexpected consequences. we have seen tariffs impacting economic data in the ism manufacturing report monday, the advanced trade data friday. i think that was a real shock to investors because it showed there is real action happening underneath some pretty high tariff speculation and now the tariffs are official, 25% tariffs on canadian and mexican imports in 20% tariffs on chinese imports. if there are still questions around what that can mean for the economy broadly. it means tariffs at higher costs can weigh at higher earnings, on job growth, on business investment. i am not sure we have quite escaped that up. if tariffs come off in a day or two. that is where investors heads thereat. they are trying to adapt -- answer a litany of questions. scarlet: target and best buy

stopped hard today. we have jay powell speaking friday and traders pricing 93 rate cuts this year. what are you looking to hear from jay powell? i know he goes into these conversations hoping to not make news. callie: yes. he's usually good at that. the fed is in a pickle now. jay powell's words during this week, during this volatility, or more important than they usually are. you go back to the fed's dual mandate prioritizing stable prices and maximum employment. they are kind of at odds now. obviously, there is a real risk to the job market and on the other hand, tariffs to boost prices and cause companies to feel more empowered to lean into higher prices. i'm not ready to say stagflation yet but you are at the beginning of the fed having to choose one side of the mandate versus the

other end lately they have been biased towards looking up policy and the inflation side of the mandate. i want to hear from jay powell, what side he is looking at and how it has changed over the past few weeks and how the fed plans to change policy with the new information. scarlet: we have a new economic data as well as a jobs report friday. how will the numbers shape what we expect to hear from jay powell? callie: ism services are a large majority of the economy. that is where gdp growth comes from. it is not saying manufacturing is important. it does give us good clothes. but -- clues. ism services data is important and a little more coincidence. if we see ism services for shrinking especially for months on end, you probably have an issue with growth. i think the jobs report is probably the most important report you can get every month. i think this month it is

especially important to help us understand how the federal government policy affected hiring and employment. so it's big. scarlet: thank you for joining us. if that does it for bloomberg markets the severed. a pois next. have a great day.

9 from the world of politics, to the world of business, this is balance of power. live, from washington dc. joe: a tariff tuesday brings retaliation with canada responding to 25% tariffs with its own levies hours before president trump addresses congress. i'm joe mathieu alongside kailey leinz in washington on th tuesday early edition of balance of power. it's interesting. the markets don't seem to like this. but this could keep going. kailey: it certainly could. he seems to not like what he heard from prime minister trudeau earlier today who said the tariffs were "very dumb." edit the president now saying on truth social that governor trudeau, referring to the 51st state he should like to see