Episode summary
White House Eyeing Chips Act Funds for Intel Stake | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Lisa Mateo · Guests: Ryan Gould, Deborah Aitken, Ben Elliott, Libby Cantrill
Summary
The episode focused on the Trump administration’s reported consideration of using CHIPS Act money to take a stake in Intel, a move Ryan Gould said should be seen as a way to shore up Intel’s balance sheet and give investors confidence. He described it as an unprecedented shift in industrial policy, with the Ohio fab project central to Intel’s attempt to regain semiconductor manufacturing leadership in the US. He also said the proposal could help Intel find customers by putting the government behind the company.
Deborah Aitken said Pandora is likely to pass on higher tariff costs through pricing, with her analysis pointing to roughly 4% additional pricing in the US, even as jewelry and watch brands work to protect margins. She said the broader luxury sector is responding with cost savings, portfolio changes and wider price points, while China remains weak and slow to recover.
Ben Elliott said any sale of Fannie Mae and Freddie Mac shares would be highly consequential because removing the government guarantee could push mortgage rates higher, with estimates ranging from 20 to 30 basis points to as much as a percentage point. He argued the companies are functioning well and provide liquidity to homebuyers, so Treasury would need to be very careful about any step toward privatization.
Key takeaways
- Ryan Gould said a government stake in Intel would effectively act as confidence capital for a company that is losing money and struggling to execute in Ohio.
- Gould said the CHIPS Act could be used to fund the stake, even though the law was designed for domestic semiconductor manufacturing and Intel has already received billions in grants and Pentagon-related funding.
- Deborah Aitken said Pandora could need to raise US prices by about 4% as tariffs filter through, while luxury peers are also planning mid-single-digit price increases.
- Aitken said China remains a difficult luxury market because consumer sentiment is weak and shoppers are staying local or trading down.
- Ben Elliott said selling Fannie Mae and Freddie Mac shares could lift mortgage rates by 20 to 30 basis points or more if the federal guarantee is reduced.
- Elliott said the main risk in privatizing Fannie and Freddie is disturbing a system that currently supports the 30-year fixed-rate mortgage market at low rates.
Notable quotes
“this probably should be seen as a way to potentially shore up Intel's balance sheet”
“this investment, this proposed investment uh should probably be viewed as a confidence capital type of arrangement for Intel”
“it does seem like a new time, a new dawn for how to think about, you know, the Trump's administration's uh play with private industry”
“we would expect uh you when when we did some deep analysis and because of the different tariff situations we would expect um maybe 4% pricing additionally to come through from Pandora”
“if you reintroduce credit risk um as a result of making the companies private and and cutting off the federal government guarantee um then that could add relatively substantial uh price there”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m.
Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. So, the Trump administration reportedly in talks with Intel to have the US government take a stake uh in the company.
What does this all mean? Let's go to someone who knows about it. It's Ryan Gold.
He's Bloomberg deals reporter joining us live here in the studio. Ryan, thanks for joining us. Um, what would a deal like this do?
I think this probably should be seen as a way to potentially shore up Intel's balance sheet. I mean, it's a company that's been struggling. It's losing money.
It's really got an ambition to return uh semicondu semiconductor manufacturing on mass to the United States in a way that we've not seen in years. Um it's all centered around the Ohio plant. The Ohio plant has been seen as a way for Intel to become a shining light across the world.
They said by 2030 it was going to be one of the biggest and the best in the world. Um obviously that hasn't been the case. It's been delayed quite a few times.
So this this investment, this proposed investment uh should probably be viewed as a confidence capital type of arrangement for Intel. you know bring give some give some confidence to investors that this is something they should stand behind because it has the backing of the most creditw worthy institution uh in the world
We don't do this very often we being the US government this is a monstrous change in industrial policy what are folks saying out there about this — It is I think you know certainly among the people I've been speaking to this is something that you know it's a new dawn in a way I mean if you're a bank or a lawyer or anyone on Wall Street thinking about struggling US companies in quote unquote mission critical industries or industries that are sensitive to the United States.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- chips act
- intel stake
- tariffs and luxury retail
- mortgage rates
- fannie mae and freddie mac
Companies and tickers mentioned
- INTC
- FNMA
- FMCC
- Intel
- Pandora
- PIMCO
- Fannie Mae
- Freddie Mac
Watch the episode
Watch “White House Eyeing Chips Act Funds for Intel Stake | Bloomberg Intelligence” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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