Episode summary
Bloomberg Surveillance TV: May 12th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 22 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Katherine Thompson, Elizabeth Economy, Michael Gapen
Summary
The episode centered first on President Trump’s upcoming trip to China and the way the Iran conflict is shaping the agenda. The guests argued that the administration lacks a clear strategy on Iran, that China may try to use the moment to press its own priorities, and that Taiwan and export controls cannot be separated from trade negotiations. One guest said the most likely U.S. objective is an economic truce, while Beijing will try to push security issues onto the table as leverage.
The discussion also focused on whether the U.S. is retreating globally. The guests pushed back on that idea, arguing instead that the Trump administration is redefining U.S. leadership by shifting away from broad multilateral commitments and toward narrower bilateral arrangements tied to critical minerals, rare earths, and security interests.
A later segment turned to the hot CPI print and what it means for the Federal Reserve. Morgan Stanley’s economist said the report showed signs of energy-driven second-round effects, tariff pass-through, and shelter catch-up, with the Fed likely to stay on hold for the rest of the year. He argued that a rate hike only becomes plausible if core inflation moves above 3% and stays there.
Key takeaways
- The guests said the Trump-Xi meeting is likely to revolve around stabilizing the relationship, but Taiwan, Iran, tariffs, and export controls all remain intertwined.
- One guest argued the administration has no clear Iran strategy and has already gone too far down the escalation ladder to easily preserve the ceasefire.
- Elizabeth Economy said China wants the U.S. to treat it as a normal trading partner, while Washington wants purchases and an economic deal it can show at home.
- Michael Gapen said CPI showed energy, tariffs, and shelter all pushing inflation higher, and the Fed is likely to stay sidelined through the rest of the year.
- The guests said a Fed hike would require core inflation to move above 3% and keep rising, not just a one-month spike.
Notable quotes
“The volumeing of rejections and counterp proposals between Iran and the US demonstrates just how far the administration is from winding down this war”
“there are basically three big buckets of issues that both sides want to address”
“We think we're at peak pressures now”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Abramitz and Amarie Hordern.
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Just on the conversations around the meeting between President Trump and Xi Jinping. Look at the lineup of CEOs that will be attending that meeting with the president or at least attending the visit alongside him. Look who's missing. Spot the guy who's not on the screen. Jensen of Nvidia.
Yeah. This comes after Jensen Wong said that he would be honored to accompany President Trump on this trip and it comes with chips very much at the forefront of discussions with China. Is this a signal that maybe the president is trying to distance himself from Jensen Wong? How does this sort of leave some of the chip negotiations that have been incredibly fraugh between these two nations?
You know what? From my perspective, for whatever that's worth this morning, probably not much, but I think it probably does Nvidia a favor. Some of those chips getting into the country through the back door. people questioning the relationship between him and the administration right now. I think it probably does him a favor that there's a bit of separation on this visit to China.
Perhaps it also could be hinged on the idea that China has created some chips that are starting to work for the deepseek model. How much is that going to be at the forefront also of these negotiations?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us economy
- markets
- defense and foreign policy
- investment outlook
- world markets
Companies and tickers mentioned
- MS
- Morgan Stanley
- Bloomberg
- Cato Institute
- Hoover Institution
Watch the episode
Watch “Bloomberg Surveillance TV: May 12th, 2026 | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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