spencer: nationalist garlic: welcome to "bloomberg markets," i'm scarlet fu. we are seeing the s&p 500 declined about .1% here we treasuries extend their rally. weak private payrolls adding to speculation that the fed will cut rates. right now, markets are pricing in rate cuts for 2025.

the 10-year lows at 2.25%. the real action was in germany's bond market, where there was a historic selloff. that is not a typo. you can see the 10 year bund yield jumping 29 basis points from almost 39 basis points, the most since 1990 after the fall of the berlin wall. the physicals spending on -- the fiscal spending on infrastructure and a generational policy shift. bloomberg reported that the u.s. is reporting a one-month delay of canada and mexico tariffs on autos. remember yesterday, the 25% tariff on mexico and canada went into effect. for the latest on ongoing trade discussions, we go now to kailey leinz, balance of power cohost in washington. what do we know about this potential one-my file? kailey: our colleagues at bloomberg are reporting that people familiar with the matter

are having concerns about the big three automakers. we heard about this by president trump and his joint address to congress last night when he said he spoke to the heads of the big three, ford, gm, and stellantis, yesterday. according to our sources, those talks could continue today. the concern, of course, is the auto sector is very vulnerable in a scenario which tariffs are on our north american trading partners. according to bloomberg economics, u.s. automakers a particular need key parts like seatbelts and airbags, for example, are reliant on imports, some 80% from canada and mexico specifically, which is why you have the likes of farley saying recently that these kind of tariffs could potentially "blow a hole" in the industry. he said it could lead to billions of profits losses in a loss of u.s. jobs, and that it could mean higher costs for consumers. we saw in anderson economic study that came out earlier this week that suggested the is tariffs could raise the cost of

vehicles in the united states as much as $12,000. that may be what the trump administration is now considering here. the commerce secretary howard lutnick yesterday first suggested the president was pulling back at least in some sectors or some middle ground on the tariffs in canada and mexico. he told our colleagues on "bloomberg surveillance" early this morning that an announcement could come early this morning, that it be a sector like autos. what we are hearing from canada, at least canadian officials, that at least all the tariffs are removed on canadian goods, the retaliatory tariffs will remain. justin trudeau will be speaking on this today as well. scarlet: a lot parts. bloomberg's kailey leinz, cohost of "balance of power," which will air at the top of next hour. she mentioned howard lutnick, who was on bloomberg television earlier today.

he mentioned the type of issues are the sentinel being smuggled into the u.s. he also mentioned some issues next month. take a listen. ssec. lutnick: this is not a trade war, this is a drug war. you are showing us even more ways to try to slow fentanyl,, and if they can do that, the president is open-minded. what he is thinking about is which sections of the market that can maybe, maybe he will consider giving them relief, until we get to a court april 2 tier but i don't want anybody to forget, april 2 is the day that we announce our reciprocal tariffs around the world. april 2 is coming, but this is coming this month. jonathan: yesterday when you said i think the president is going to figure out you do more and i will meet you in the middle, we are probably going to

announce that tomorrow, as in today, can we no longer expect that announcement? sec. lutnick: i did not say that. i said the president is listening to the office of mexico and canada. he's thinking about trying to do something in the middle. he's thinking about it. we are talking about it. when i leave here, i will talk about it with him. i think early this afternoon, we expect to make an announcement, and my thinking is it's going to be somewhere in the middle. so not 100% of all products, and not nine, somewhere in the middle, because i think mexico and canada are trying to see where we end up. i think somewhere in the middle is a likely outcome. jonathan: when you say somewhere in the middle, do you mean somewhere in the middle of tariffs, between 0% and 25%, or are we going to carve out certain industries, and will that carvel be the autos? because the president mentioned last night he has spoken to the autos ceo's.

sec. lutnick: yeah. i think it's byproduct, by region. remember, the usmca, the u.s., united states, mexico, and candid agreements that you have to have a certain amount of u.s. content in your products to be usmca compliant. so i think he's thinking about those categories, u.s.-mca compliant, doesn't that make sense to you, right? if you comply with the agreement, made you avoid tariffs, and if you did not comply, you knew you were not complying, and therefore it seems likely that is the place the president will go. again, the president gets to make the decision. i'm there talking with him about it, and so is the team, but our expectation is that it will be categories. it will be 25%, but there will be some categories left out. it could be autos, it could be others as well could usmca come of a look at that, that was the agreement we made, the u.s.,

mexico, and canada, saying those products are exempt. everyone who did not live under those terms did so at their own risk. scarlet: i was commerce secretary howard lutnick speaking to the "surveillance" team this morning. we want to repeat the headline here in the last couple of minutes, which is the white house is considering a one-month delay on auto tariffs on canada and mexico. the white house is considering a one-month delay for automakers for those newly imposed tariffs on mexico and canada. the white house says the situation remains fluid. we already heard from secretary howard lutnick that exceptions were under consideration. those announcements could come later today. when you look at the impact on the markets, what is notable is the pop in general motors, ford, and stellantis. they were higher on the day because of hints that perhaps there would be relief coming from howard lutnick yesterday, but once the headline crossed, based on bloomberg reporting, we

saw gains increase for these names. general motors up almost 5%, ford about 3.35 percent, and stellantis almost 7%. when it comes to the overall market, we pared our losses, the s&p 500 little change, down about .1%. the dow industrials actually in positive territory, gaining .25 percent. when it comes to yields, certainly a mixed picture compared to yesterday's heavy buying of treasuries. right now, the two year yield is extending the rally could you see the two year yield down four basis points 3.94%. this is bloomberg. ♪

scarlet: this is "bloomberg markets," i'm scarlet fu. the united states is considering a one-month delay of the mexico and canada tariffs on autos, this after automakers going to capitol hill, appealing their case and how it could be damaging for sales of their vehicles and their businesses. this is certainly a developing story and something that, secretary howard lutnick had hinted at yesterday, saying there might be some exceptions to the initial tariffs that were under consideration. nevertheless, we did see they went into effect yesterday, and it caused a big selloff in equities and a big rally in u.s. treasuries. of course, we are keeping an eye on what this means for certain stocks, including general motors and ford. if you look at their share prices, they were higher on the day, and they certainly popped on the news. again, this goes to the idea that jim farley, ceo of ford,

along with other executives from automakers from automakers, have been making the case, going to capitol hill, speaking was representatives, speaking with members of the trump administration to say that these new tariffs would impose huge costs on their businesses, and, of course, in the end, make vehicles more expensive, that they would be passing along to the consumers, perhaps affecting sales down the road. for more context on this breaking news, i want to bring in mike shepard from washington, d.c. tell us more about what we know when it comes to the detroit automakers and how much work they've been doing to try to get the attention of the white house , to carve out an exception for their businesses. mike: our reporting shows this has been a full court press for the big automakers, stellantis, general motors, ford. they see that the implementation of these tariffs are goods from canada and mexico, would be devastating for supply chains,

would cause immediate increases for prices, forced on the line for consumers who might be thinking about buying a new carpet we could see prices go up thousands of dollars per the units that people might be looking to purchase, that would be devastating to the industry. they are looking for some of these, and it is not final. the situation is still very fluid, as our story makes clear, but this is certainly a priority for them. they want to make sure the president and his advisors understand the gravity of the situation, as far as their industry is concerned. scarlet: yeah. go back to what ford ceo jim farley has been saying. . he's been very vocal on the matter, saying that tariffs would be devastating for the industry and would blow a hole for the carmakers specifically. these conversations have been going on for a while. the white house would go forward regardless, and if needed, dial it down after they are imposed. it causes a lot of confusion for

the industry and investors. mike: one interesting difference between trump 2.0 and the president's four first four years in office. back when he was beginning to craft this new version of a very muscular trade policy against the world, one that was built around tariffs, there were many more carve out that exceptions that were built into these programs. this time around, we are not really seeing any. i even took a look at the u.s. commerce department pages last night to see, ok, so what carveouts are there so far? we go see evidence of any yet. this is something that the president even has signaled publicly, that he does not expect to make any exceptions. the ideas come in his view, if you don't want tariffs, you have to move your production and your manufacturing here. but the trouble is come in the modern economy, for autos and

semiconductors and other industries we care about very closely, the supply chains are so intertwined, and they are so global. it is really hard to just simply pick up and move the entire supply chain onto u.s. soil. it would take generations and so much investment to be undone and redone that, carveouts existed during the first administration, is an acknowledgment of that reality on the ground. so what we want to see is whether this actually is, one, if they can actually complete it, and if it goes for more than a month in a month is one thing, but after a month is out, automakers will find themselves back in the same pickle. scarlet: yeah. i think this is a very important point, that it took decades to build of the supply chains into mexico, into canada for these automakers, and it is not as if one month buys a lot of time to reverse things or bring manufacturing back to the u.s., never mind that we have the capacity to do so or even the labor to run those manufacturing plants. mike, put into context

everything we know so far, because when it comes to retaliatory action, canada has announced some action, and it is facing it in over the course of a couple of different periods. mexico says it will be make== waiting unti sunday t make any announcement on its -- it will be waiting until sunday to make any announcement on its own retaliatory tariffs. what do we know about talks scheduled between the white house and each of these countries? mike: it's a good question for it was china, we have a little bit less visibility, but we are aware that, you know, with mexico and canada, officials from all sides of the border have been discussing this at great length and with significant intensity. there was concern that prime minister justin trudeau, who is about to leave office, has signaled that the country will not rollback any of those retaliatory tariffs until the u.s. stands now give meanwhile while in mexico, the, there does

seem to be a wet of-- in mexico, though, there does seem to be more of a wait and see approach. maybe they can get some sort of a break from donald trump on these, offering enough of what he would consider to be progress in areas that he used as the justification for these tariffs and that is border enforcement and cutting down on the flows of illegal drugs into the u.s. but all of that remains to be seen. and, of course, when it comes to china, there's a longer game to be played when it comes to tariffs he imposed his first time in office back in 2020. those remain in effect, they are up for review in april. we will have to see how that plays out and what talks between the world's two largest economies might look like. scarlet: ok, mike shepard, thank you so much for hopping on zoom and talking about this with us. mike shepard in washington giving us much-needed context on

breaking news that, again, the white house is considering a one-month delay en auto tariffs on canada and mexico. let's bring in david wells from our detroit bureau chief. a one-month delay on auto tariffs on canada and mexico by the u.s., is that a victory for these automakers that have been lobbying washington to carve out an exception for automakers? david: it is, albeit a temporary one, but it does give them another month to try to work with the administration and find out a way to avoid these tariffs and really figure out what president trump wants from them, to make sure they don't actually implement it. scarlet: yeah. i would imagine the management of each of these automakers have been in washington a lot, jim farley most notably after the inauguration, talking about how tariffs would blow a hole in the industry.

when you talk to folks at the automakers, how are they thinking through making some permanent changes to their global supply chains in a given that so much of these developers are unpredictable, and even when there is a tariff announced, it might be, you know, imposed and then removed after a month or delayed by one month. david: they would not make prominent changes unless the tariffs were in place for a long time. even if trump implement it these tariffs for 30 days, you will not see them invest $1 billion in a new plant or try to force suppliers to do it. you are talking about spending or having your suppliers spend $1 billion, you know, hundreds of millions of dollars at least to relocate productions for tariffs that, you know, might not be permanent. they will need to see that there's going to be a long-term impact before they lay out that kind of capital. and it takes a lot of time to do, too, if you don't just build

a plant the next day could i think what you can see in a month is some sort of plan to relocate some production. if trump's first administration is any indication, and it probably is, you did seeing some of that under pressure for companies that make a lot of products outside of the country. you saw chrysler, stellantis, we will keep some truck production here, and i think ford did as well. some of that stuff was sort of in the works, but they accelerated it. i think you could see some underutilized plants, i think general motors has one in kansas that does not have a lot of vehicles in there right now. you can see them bringing some vehicles back here. and a lot of times, what trump wants to see is something that is sort of symbolic. we will see if he would be happy with at this time. but he will want to see investments, a lot of plans investment in the u.s. he wants to see plans like that

as well. you are seeing some of that already, that the car companies could just excel. gm has plans for a new battery plant in indiana that will open up in 2027. maybe they do something like that. maybe they bring some of the electric vehicles they are making in mexico to one of their plants in the u.s. that's making these now. they have a plant outside of detroit, in michigan, they have not opened up their electric truck plant. maybe they can make the chevy blazer or chevy equinox ev's there. these things take money and time to do, but these are the kinds of things that they could bring into place to make the president happy and also bring some jobs and investment back to the u.s. scarlet: all right, david welch, bloomberg's detroit bureau chief, responding to records of the white is considering a one-month delay in tariffs on mexico and canada, at least for autos.

in the meantime, we want to go to the bloomberg best conference, taking place in downtown new york, where the brookfield ceo is speaking. let's take a listen. chris: and as long as you keep your eye on 20 years from now, in the businesses you are running, all of these things will be looked back upon as very short-term items. what we are going through today will not be relevant 25 years from today. erik: it might not be relevant be on his presidential term. chris: i'm just telling you, 25 years now, it will not be relevant. erik: you are thinking on that time horizon. you can afford to think like that. chris: everything we do, while we are in private markets, we buy things for long periods of time. we will hold them or it will find where we may have to

sail, but we prepare investment for the next owner that they will accept the next 25-year -- 25 years, and that is important to keep your eye on. erik: i know you are competitive come in your industry come as an individual, sometimes the how of a deal making process is important. the deal that i just mentioned, the $19 billion deal for these global ports, originated, as we understand it, with a pitch by larry fink,, of course, who is a peer of yours. thinking of the next four years, not necessarily 25, from a competitive standpoint, is that the kind of thinking that you have to be operating with in order to be competitive, in order to win? that kind of access and that kind of -- i think under the circumstances, dealmaking

creativity? chris: our, you know, we are building the intel fabrication plant in arizona. we saw and the microsoft power contract to build for them, largely in the united states. we did a large deal in germany with deutsche telekom with their telephone towers. we just signed the business in france with the french government for $20 billion. our business is about facilitating our operating skills and amassing some of the large amount of money is that we have to take on opportunities that are significant, and increasingly, there are not that many people that compete with us, just because of the access to capital that we have. erik: you are right, there are not many people who can compete with you. there are few, however, right?

some of them started in different places. brookfield for many years was known as a huge player in real estate and infrastructure, now, of course, you are also huge in private equity and credit, renewable energy and insurance, but the others, i could name some of them. you know who they are, are following a similar playbook, right? trying to give clients everything they could possibly want under one roof, concentrating more and more lp assets. it's been great for your stock price and for their stock price. is the future more the same, which is to say more concentration and more convergence, the biggest firms getting not just bigger but more i liked another, or will there be a diversions at some point, which, say, for brookfield, and perhaps another firm or two, going in one direction and everybody else going in another? bruce: i think over time, if you look at financial services, there's always opportunity for

niche players, and there will always be that around the world. but there's increasingly concentration within large-scale players, which come as you know, there are probably five or six today, maybe seven or eight over. and those large players look similar, but they are not exactly the same, and it is how they develop to access the capital that they have available to be able to deploy it to businesses. so they are similar, but they are not exactly the same. and it is not that one is better than the other, it's just that they are a little bit different for various reasons, probably developed over 25, 30 years. erik: when the big differentiators in your industry now is insurance, a huge growth engine for alternative asset managers as a group, and brookfield, of course, included. why is that business so appealing? why has it grown so quickly?

bruce: one of the last businesses in the financial services industry that had not, it is almost now turned on its head. we are in the business of come in our insurance business, finding low risk liabilities and maximizing the asset value that we can generate on the asset side of the balance sheet. historically, insurance companies made money from insurance and found some to invest their money. so that model has almost been turned like this, and our special ingredient to all of this is that we have 100 $50 billion of capital at our parent company. we've put almost $20 billion into the equity of our insurance business, which we just sold and put that money into the company. and we will continue to do that, to build out the business over the next 10 years. so because we have 150 billion

dollars of tangible capital, we can grow that business very significantly, and it helps facilitate, of course, earnings in the insurance business but drives our whole asset management franchise as well. erik: so if you were to take the $20 billion plus of equity you have in that entrance business now and add $100 billion plus? bruce: it ultimately could be all the capital we have a talk, which is $150 billion. erik: turn it into an insurance business with what in the way of assets? bruce: it would just be turned up this way, with insurance business owning asset management and our investment operations, which is really what berkshire hathaway is. it is an insurance company that owns investments. yes, they don't have an extra 100 $50 billion in capital up top, but, yes. erik: so if you execute on that plan and we compare brookfield

with apollo, because it sounds to me like it is at this point going to be a very useful comparison, what do the two look like at the end of the day? bruce: look, our business has a very large asset management business, which is $1 trillion of assets under management. a large insurance company that is getting bigger. and a very significant pool of cash. cash and assets that can be turned into cash. what we do with those assets that could be turned into cash will decide overtime. they may go into our insurance company if we can find opportunities, or we will redeploy them into some other financial services business, or we will keep buying stock back for the next 20 years. we will have to see where it goes, and it will all depend on opportunities. erik: bruce, you recently predicted there will be more consolidation in the alternative industry. will brookfield be a buyer as well? bruce: we are at the point where

bruce: we have in that culturally, we can see i try -- eye to eye energy partners. we see no real need to pay up for anything at this point in time just because we are pretty broad -- we have a pretty broad array of products for our client and we continue to build those out. erik: i want to take a minute and talk to you about ai in particular because infrastructure is quite obviously to all of us becoming one of the factors in the growth of ai. hundreds of billions of dollars is being committed to ai infrastructure.

the field is up later. what is your commitment and what role do you see yourselves playing overtime? bruce: so we are the largest private builder of renewable power in the world. we are among the top three largest builders of data centers in the world and we are continuing to morph the model into funding compute capacity for the technology groups. the number one things that stand between us achieving all of the models that will drive the ai revolution in productivity advances is the backbone of infrastructure around the world. it is the singular one thing so we continue to put enormous amounts of money behind these businesses. it is largely because our view is that crowd -- productivity

advances that will come out of ai models in advance robotics and services are going to be unprecedented over the next 20 years and what that means is we are in the midst in the united states and also globally, in the midst of this enormous investment era but it is going into highly productive -- scarlet: that is the bloomberg best conference. if you want to continue to listen to the conversation, you can check it out on the bloomberg terminal by typing live into into the developments at bloomberg live. we are looking at modest gains in u.s. equities now. the indexes have erased their losses, up by .4%. it had been in decline earlier before headline crossed. bloomberg reporting the u.s. is now considering imposing a one-month delay of auto tariffs on canada and mexico. we saw shares of gm, ford, ansa

lantus pop on the news. that rally in treasuries continues as investors took stock of the latest economic data. private payrolls, and concluded that at least for now, it looks like the federal reserve might cut interest rates more than had been in dissipated. 10 year yield not really moving very much and is pretty much at the 2025 clothes in the german bund is a whole other story. big selloff in germany's bond market as the new chancellor in waiting is expected to spend a lot more on defense and infrastructure and that is going to end up costing the country given where it is trading. let's bring in market reporter norma melinda to kind of put some context around the moves we are seeing in equities. stocks have erased their losses and these are fairly modest moves given what we saw yesterday which just goes to show the tariffs situation, the headline risk is so very fluid. >> it really is a fluid

conversation. so volatile and all of this is based off of the headlines we are seeing and of course the most recent one is the fact that there could be a one-month tariff delay specifically on canada and mexico and when we think about automakers, we know this is a very tariff sensitive group. ford, stellantis, general motors, they are up off of this news but it is still a modest pop so nothing too substantial at this current moment but it is definitely one we are watching and that wall street is keeping an eye on. >> it's not just the headlines out of washington people are paying attention to. we have a lot of data this week. that was not great. it is soft data but it is pointed to worries with prices paid rising more than anticipated. that is inflationary. employment coming in weaker than expected. manufacturing is a smaller part of the u.s. economy. services is where the economy is being driven and the data this morning on sources was fairly benign.

kailey: there is so much data to keep an eye on. it is so fluid how it is trickling out to different sectors by an area i've marked -- that is an area that of course people have been marching when we do think about tariffs and thinking about the idea of this proposed military spending cut. i have been speaking with analysts at bloomberg intelligence and they have this view that it will not be cuts we are seeing in terms of the budget but a reallocation of funding to different areas trump has priorities for that are trickling out into different ways so we are seeing defense stocks a bit higher but it's funny when you look at these different policies sensitive sectors and how they are moving. scarlet: it's not just defense stocks in the u.s. defense stocks in europe are getting a huge beta because of the expectations those companies will get a lot more orders given the u.s. is dialing back up military support for ukraine. thank you so much. bloomberg equities reported.

let's go to detroit. he helped break the story on how the u.s. gains -- is considering a one-month delay on the auto tariffs on canada and mexico. tell us more about what we have learned. to what extent is this really the white house not capitulating but saying to the auto industry we heard what you have said about the pain that this will cause. >> detroit automakers have been pushing really hard with the commerce secretary and with the president himself. the auto ceo's had a meeting yesterday with president trump when they really pushed hard for this relief. it is a one-month reprieve. the quid pro quo here is the president wants the automakers to come up with plans to move investment and production into the united states so that is what they are going to work on over the next month while they have this delay. if it comes through. it is still in various -- a very fluid situation. the white house is telling us that is what they are working

toward. scarlet: plans on moving production back to the united states. even if they come up with a plan, it is not something they can take action on immediately. these are things that take years if not decades to actually execute, right? keith: absolutely. they cannot just flip a switch. suddenly open a plan to the united states. that does take years. it costs billions. what they are going to do is come up with plans for increasing investment in the u.s., plans for bringing production into the u.s., that is what this month is designed to give them. >> thank you so much and congratulations on the scoop. the white house is considering imposing a one-month delay on auto tariffs for canada and mexico. the 25% tariffs did go into effect yesterday but we are now talking about possible carveout for the auto sector. really appreciate it. for more on the ongoing trade dispute, we want to bring in vice president of economics shelly kaushik who takes a look

at the canadian economy and kind of forgotten in all this as we look at the gyrations in the u.s. equity market is what this means for canada's economy. you have written about how canada's economy could tip into recession depending on how long these tariffs on canada stay around four. >> yes. i mean, that is one of the many uncertainties we have right now including whether there is going to be an exemption or a delay potentially for the auto industry. that is just exactly how long these tariffs will last and whether we have additional tariffs on top of the existing ones, the 25% on most goods, so i mean, with everything that has been in place so far, i think we are seeing a meaningful hit. like i said, there is a lot of uncertainty. our initial read is for these tariffs to be in place for a year in that scenario would

certainly bring about this possibility of a moderate recession in canada. >> in your work, have you carved out what the impact on canada's economy would be if there was a carveout for automakers? >> it is very early to tell right now even with this news, this potential announcement of a carveout, it's really only a one-month delay so again, even if automakers do get that delay, it is certainly a welcome step. the auto industry is definitely one of the most if not the most highly integrated across both borders with the united states and canada and with mexico and so it is not nothing. a one-month delay is just that. we don't think it will have a major impact on the economics certainly when we see amount to a quarter of even a year. >> what can be frustrating for a lot of investors and i'm sure companies even more so is the fact that these delays are coming in in one month

increments, not enough to do anything. one-month year, one-month there but you cannot plan around that. that being the case, is that more damaging to the economy and to sentiment that if there was just a six-month blanket delay? >> for sure. this just goes back to the overarching uncertainty that we are all facing globally. so yes, even if we do get exemptions and exemptions on top of exemptions, we already have the threat of additional tariffs in play as well and we also have all of this added uncertainty of just this general backdrop of these rising trade tensions and rising geopolitical risks so that in and of itself does weigh on the economic outlook certainly in canada. we have already downgraded our outlook for canada even before the tariffs were in place and in fact the canadian economy is

doing pretty well if these tariffs were not threatened on canada. i think we would be talking about a much different story just thanks to previous rate cuts by the bank of canada helping to support growth to start off 2025. but because of these threats and now the reality of tariffs, we are looking at a recession this year. >> just a reminder, the 25% tariffs on canada and mexico, there is only a 10% tariff on oil and natural gas so a lower rate for those key commodities which the u.s. does rely on canada to export. you mentioned the bank of canada and the bank of canada's next policy meeting is in a week from now on march 12. the bank of canada has been aggressive in cutting rates. how do these latest developments effect or impact the rate cutting past already put in place by the bank of canada? >> yes, i mean, the bank of canada already cut by 200 basis

points and that is a leader amongst his peers and across other central banks. and like i said, we are already starting to see those effects play out on the canadian economy. the economic growth and also some inflation metrics have started to firm up. through the end of 2024 and into the beginning of this year so we were actually calling for the bank of canada to pause at next week's meeting until the tariffs came into place and at this point, we are looking for the bank to cut by another 25 basis points just due to these risks to the economic outlook. >> how are you thinking about the canadian dollar? it's getting cut up in the crosswinds of all these headlines that are coming out, delays, imposition of tariffs. at 1:4364 -- where does canada want that currency to be in terms of the optimal performance of its exports? >> i mean, i guess that is one of the benefits of a floating currency. we are likely to see, you know,

continued downward pressure on the canadian dollar as long as these tariffs remain in place or the threat of tariffs remain in place. so that will help to mitigate some of that impact for canadian exporters. as a canadian dollar weakens, that does make canadian exports relatively more attractive than would have otherwise been the case. so yes, there is no particular target here but it is certainly one silver lining, i guess i could say, for canadian exporters. >> we heard canadians finance minister dominic leblanc has been talking about how he is close to rolling out fiscal stimulus to help support consumer spending within canada. what are you looking for him to unveil and will that move the needle enough to prevent a recession? >> at this point, we don't have

any forecast for fiscal stimulus. the canadian government itself is in a point of transition right now. with the current liberal party electing a new leader this weekend, actually so it is very difficult to tell, very early to tell what kind of stimulus will be rolled out in the coming week let alone in the coming months or years. especially if these tariffs remain in place. what i will say is, i mean, it does look like we are in a new environment for trade. again, even if these tariffs are lifted or even if there are an additional exemptions for canadian industries, we are in this era of heightened uncertainty when it comes to trade with our largest trading partner so it is a shift for the canadian economy but it likely does not necessitate a full-scale fiscal response.

it is more retooling the canadian economy to respond to this very different environment. >> retool and wait to see what transpires because it is a moving target. senior economist and vice president, thank you so much for joining us today. >> thank you. >> we have more on how markets are moving today as we continue to cover u.s. trade policy changes. we are looking at an s&p 500 gaining .4%. the nasdaq up by about .5%. the rally continues in short dated maturities in the treasury market. this is bloomberg. ♪

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>> this is bloomberg markets. i'm scarlet fu.

u.s. stocks are gaining for the first time this week. we want to highlight a couple of individual equity members and for that, we go to alexandria. >> first step is abercrombie fish shares are struggling. it's revenue will grow 3% to 5%, a slight miss from estimates. they have been a hot streak by investors are wondering whether the momentum can keep going in the other direction p we have moderna shares on a tear after the ceo and board directors said they bought $6 million worth of the stock. they also announced it expects to launch a personalized cancer vaccine it is developing with merck. it is in a late stage trial. our stock of the hour is stellantis and general motors. the white house weighs a one-month delay of canada and mexico tariffs. howard lutnick teased the relief late yesterday. ford rallied 2.7 percent and carmakers are up across the board today.

>> alex, thank you so much. the headline we got at the top of the hour, the u.s. considering weighing a one-month delay on auto tariffs on canada and mexico. we will continue to follow those the relevance for you. coming up, you look at five-year treasuries and they are some of the key leading indicators that are pointing to recession fears at wall street break -- wall street banks. this is bloomberg. ♪

scarlet: this is bloomberg markets. i am scarlet fu. the r word is back. wall street banks are starting to raise a flag that recession awes are unsettlingly high. the market implied probability of an economic downturn is now at 31%. there is a similar model from goldman sachs suggesting recession risk at 23%, up from 14% in january.

the bloomberg news cross-asset reporter has been writing about this and joins us now. which asset classes in market indicators specifically are flashing the highest odds of recession? what are people looking at? >> if you look back to november, there were many of the risk assets were pretty much pricing in zero chance of recession. now, the s&p is a good example. it was 0% and now it is 22%. significant change. 50% chance of recession. so pretty high and of course if you look at the five-year treasuries, it is a tossup again. rates markets have obviously moved a lot and there is a lot of sensitivity when it comes to pricing and rate cuts. we are pricing in a lower rate cuts which as you can imagine this coming on the back of -- increasing chance of recession. high-yield credit is not necessarily flashing fear. it is around 10%. vix is also elevated but not too

high so there are many parts of the markets that are remaining relatively calm but what we have seen is recession was pretty much less than 10% probability and now we are in the 30's so that is definitely a change in markets. it is not the base case. let's not scare people. scarlet: it's part of the conversation in a way that it wasn't before. we talk about how this growth scare is triggered by the imposition of tariffs. if president trump walks back the tears, do the recession fears go away? >> you can imagine some of it may subside and even the relief we have seen today we saw in earlier trading, futures were up and a lot of that faded later in the day. we are very sensitive to each headline but obviously, if there is a relief for risky assets, that will mean that a lot of those will be slowly priced out but so far, we have actually erased s&p gains for the year. 10 year yields are 50% -- 60

basis points lower. we saw oil falling to the lowest level since 2021 so those kind of reliable metrics of growth are definitely flashing some concern but not necessarily fear of -- bloomberg is reporting the white house is considering a one-month delay on auto tariffs and mexico and canada. when it comes to the economic data, there is a difference between the soft data in the hard data, the economic data the government reports. manufacturing showed contraction in manufacturing, lower employment, higher prices paid, which feels like stagflation. that is a concern, right? >> it is too early to call on this. the economic index has a good breakdown between soft data which is like survey for what consumers think and quantitative data which is giving us -- what we are seeing is that the

surveys that are more dependent obviously on how people feel and on their sentiment are showing things are a lot worse than hard data so a lot of economists are finding some relief, saying it is too early to worry and that is something we have seen in 2023 when we were so worried about recession, there was a game -- a big gap between soft data and hard data and it was a head fake. it was not materialized so people are looking at those parallels as well. >> i like how you put it. the survey data is more emotional. what is more worrisome, inflation or an economic slowdown? quotes economic slowdown suddenly became a big thing. we know for example the index was in positive territory for quite some time. it tumbled into negative territory quite fast so growth scarcity became a problem and we obviously look at 10 year yields. there has been a big shift in sentiment there. it seemed for a while, it was inflation, but now, it is

growth. scarlet: thank you as always. as we head to balance of power, we are looking at equities after session highs with the s&p up two thirds of 1%. from new york, this is bloomberg. ♪ our xfinity network is built for streaming all the stuff people love. how can it get any better? -i'm just spitballin' here, but, what if we offer people apple tv+, netflix and peacock? for one low monthly price. -yes. so, people could stream the shows they love. and we could call it... xfinity streamsaver! mmmmm. what about something like: streamsaver? ooooooo. -i love that. add streamsaver with apple tv+, netflix and peacock included for only $15 a month... and stream all your favorite entertainment, all in one place.

>> from the world of politics to the world of business, this is "balance of power."

live from washington, d.c. >> on again, off again tariffs keep washington guessing and wall street on edge. welcome to the fastest show in politics, a day after president trump's address to congress with news he may delay auto tariffs on canada and mexico by a month. i am joe mathieu alongside kailey leinz in washington. thanks for being with us this day after the wednesday edition of "balance of power" here on bloomberg tv and radio. the report that we are getting here from bloomberg news is already moving the markets once again. kailey: certainly the shares of automakers fords and g.m. are moving. you have seen it in the broader equity markets which have been royaled in the last few days over the implementation of these tariffs to begin with. it is noteworthy that the news are reporting that they're considering removing the auto sector from these levies, also comes as president trump told us in his