Gary Cohn Talks Fed Chair, US Economy
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We begin this hour with stocks extending their sell-off as President Donald Trump's push to take control of Greenland is sending fresh volatility into markets worldwide. The IBM vice chairman and former NEC director Gary Cohn joins us now for more. Gary, good to see you. Thanks for having me. You heard the way we opened the program. There seemed to be a concrete ideology when you were alongside the president in his first term. How would you describe this moment? What is this all about?
No one knows for sure. But I think what we've seen evolve in the Trump presidency is this desire to negotiate and get a deal. So ultimately, is Greenland all about getting a deal? We know that the North Atlantic is becoming much more of a sought-after territory from a militaristic standpoint. So I understand the president's concern to have a military presence and protection of the North Atlantic. If we want to expand our air defenses, Greenland is a pretty strategic spot. So I understand what the president's interest is. They also have rare earths, which is something that we in the United States can't supply to ourselves. So the question is, is this a negotiating posture to get a deal with Greenland to get more rare earths, to get a larger naval and air force presence?
And it may be. It does seem like that's on the table. And this may all evolve in a place where the United States ends up in a very good strategic position.
Do you think that's the way the business world sees it coming into the World Economic Forum this week?
You know, I think the business world is split on it. You know, you've obviously got a European presence here and a U.S. presence here. I think the U.S. presence is a little bit more optimistic that this is going to end in the right place. And we've seen this before. I think the European contingency is a little more leery and say, look, you know, maybe you're confident this ends well. We don't like being in the middle of this right now.
which is a reason why, in European hours, treasuries were selling off much more, the dollar was much lower, and as the US wakes up, people are coming in and buying it. How much is the sell America trade real, and how much is it a perception based on these moments, the ones that we saw in Liberation Day?
There is some sell America going on right now. I've met with a couple of different asset managers this morning, said that global funds are reallocating a little bit out of the United States. So you see that, you know, interest rates are higher. So people selling bonds rates go higher.
What insights does Gary Cohn offer about the current state of the US economy?
People are repatriating currency back home. They're selling dollars to buy local currency. They're selling stock market. They've got to repatriate currency. So I think we're seeing a little bit of that. I don't think that's what's driving the overall market right now. It doesn't feel like we've got to liquidate America. It feels like we've got to trim around the edges in asset allocation models going on.
This goes back to the wrestling match we were describing. AI on one side, you've got politics on the other, and they're facing off, and it's sort of sell America until AI rears its head and gets to the lead, and that's where we're going.
And it's sell America until the light turns green and everyone has to buy America again. Because in the real reality, if you look at the U.S. economy, what's going on, we've got one of the strongest economies in the world today. You know, we're growing at five plus percent growth.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–2:54
2
What insights does Gary Cohn offer about the current state of the US economy?
2:54–4:07
3
How does the Trump administration's negotiation style affect global perceptions?
4:07–8:52
4
What is the significance of the 'Sell America' trade?
8:52–11:22
Speakers
7 identifiedMore from Bloomberg Talks
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