US Jobs Report Eases Fed Hike Worries

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This is Bloomberg Businessweek Daily. Reporting from the magazine that helps global leaders stay ahead. With insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily Podcast. With Carol Masser and Tim Stenebeck.

Hey, folks.

Yeah, we got to talk about one of the key economic reports of the week. Yes, it was inflation, but it was also the monthly jobs report.

The data, we had the U.S. adding fewer jobs than expected in September.

We saw wage growth slowing, signaling some caution among employers and made rising costs. Unemployment rate, though, rising to 4.2%, partly reflecting a growing workforce.

And also, the two previous months were revised downward. So- Is the job market as strong as we thought it was?

I think it's a good question. We're going to dig into that.

We also, though, want to explain a little bit about what this means for maybe the U.S.

Yield trajectory on that.

We did hear from Kevin Hassett, director of the White House National Economic Council, president's chief economic advisor. Here's what he had to say to our Bloomberg team of Mike McKee and Danny Berger earlier today.

Longer rates perhaps have some upside because of real returns being so high. But in the end, that's very, very good for the economy because you have to look at the whole thing. And so the only reason those long rates would go up, it's a general equilibrium thing, is that the economy is so strong.

All right.

The economy is so strong, according to Kevin Hassett.

Well, depending what he's talking about in terms of relations to where rates go. Kevin Hassett, of course, director of the White House National Economic Council. talking with Danny Berger and Michael McKee. Mike joining us right now. He's, of course, Bloomberg TV and radio international economics and policy correspondent joining us here.

You've had a long day.

Not as long as you.

Yeah, I did get a few hours of sleep in between from coming back. Talk to us about what Kevin Hassett had to say. You spoke to him about a lot of different things. And I am curious about what he had to say, too, about what it means for rates. And I always think about lower rates mean we've got to give the economy some juice a little bit too.

Well, he didn't argue for lower rates at this point. We did talk about the jobs report, of course, and I mentioned, and I think he would have agreed if he weren't working for Donald Trump, that sometimes bad news is good news in the sense that the job creation wasn't as strong as we thought, and the average hourly earnings were down on a year-over-year basis to 3%, which is a little bit below inflation. So Americans are not happy about that stuff, but it also means for the president's agenda that the Fed doesn't have to raise rates right away, which is something that they have been concerned about.

So bad news is not terrible news for the president.

And it wasn't terrible news for the economy either, because the labor market has slowed, the labor force growth has slowed. So we need fewer jobs now to keep the unemployment rate steady. And so 29,000 jobs is not great, but it's still around the bottom of the level you need for that. And the unemployment rate went up to 4.2%, but it really moved by three basis points when you go out to three decimal places.

And is that because more people were out there actively searching for a job, and so they're added amongst the unemployed?

Yep, the denominator grew.

What does this mean for what the Fed's going to prioritize now? We know they have the dual mandate, keep inflation low, keep the economy at full employment. Is this report enough to have them think, wait a minute, we now need to really worry about the job market?

No, they don't need to worry about the job market. But what it does is take it out of consideration for them. They can focus on the inflation numbers. If we had gotten a strong jobs report like we did in the initial report in August, then it would have suggested maybe the economy is starting to really heat.

Up and you need to move rates faster.

Now, while most of them still think we're going to need another rate increase, it doesn't have to be in October.

And this is the last, you know, I just think about the political side of this, Mike. I think this is the last monthly jobs report. before midterms, but we do have a Fed meeting before midterms. Is there, I don't know, should we not go there in terms of politically what we could see in terms of what the Fed would do perhaps ahead of midterms?

Well, let me put it this way. The Fed would like not to have to get caught up in the politics. They will do what is necessary, as they always say.

No matter who's in White House, the Fed doesn't.

No matter who's in the White.

House, they have a track record of raising rates before elections. when they think that's necessary. In this case, I'm sure it's just easier not to, but they're not going to say that. But the numbers don't compel them to do it unless we get some sort of really, really strong CPI report.

Is there a reason to believe that the job market will markedly improve between now and the end of the year? I mean, we saw the Challenger survey out this week saying intentions to hire don't look that great. We've got the holidays coming. That's usually when retailers bring on more workers. They seem a little hesitant this year to do so.

They do seem a little hesitant, and it's kind of understandable in that Americans had slowed their spending. Then last month was big. Do they still have a lot there? The savings rate is going down. It isn't clear where Americans are going with this in terms of consumer spending. We know that Through the end of the year, we should still have strong business spending because.

You've got all the AI.

All the AI spending.

The AI spend is still adding to the overall economy. But the holidays are a little hard to predict at this point. We have to see kind of where people are in the month of October if they're still wanting to spend.

Well, maybe if gas prices go down, they'll spend some more.

There you go.

I want to go there because you guys went there with, actually, this, I don't, Kevin Hassett, I think, made some comments, too, on Fox News about, that there's more to come next week in terms of presidential announcements on energy. So, I mean, how does this factor in? My view is that energy longer term, there's going to be pressures. There's such demand everywhere you look. So I don't know how easy this is a fix.

Yeah, the president will maybe have some press releases, but there isn't really a fix for what's going on. They did get a boost today because the European Union agreed to release 100 million barrels of oil.

And diesel today.

Which will bring down prices in Europe. And because it's a globally traded commodity, it should bring down prices for diesel a little bit here. But the oil part isn't really going to make a huge difference. It'll bring the prices down in futures markets for oil, but not for gasoline, because oil has to be refined into gasoline and it has to be refined into diesel. And refineries are running full out. There's no additional capacity available. So you can make more unrefined oil available, but it isn't going to get you any more gasoline or diesel.

If it's already refined diesel, that will help at the margin.

Mike, you wear a lot of hats here, as you know. Sometimes you talk sports, which we might get into.

But you also work on Wall Street Week, and I don't want to give away any stories you might be working on. But you also look at so many different metrics to kind of understand what's going on in the real economy here in the U.S. Is the real economy doing well? We're going to get earnings very soon, and I bet there's going to be a lot of folks...

maybe I'm wrong, are going to say earnings are doing okay.

Yeah, earnings appear to be doing okay, and the real economy is doing okay. We're seeing growth. It's a different kind of contribution. Most of it's coming from the AI stuff, but it is boosting growth in the overall economy. And we're not seeing people lose their jobs, even though job creation is slow. The weekly jobless claims numbers are very, very low. So people have jobs, and they can spend, and we know from economic history that they basically spend out of their paychecks, except for the very rich. And so we can keep going like this unless something bad happens.

Now that is a different, the economic aspect of it is a different thing from the political aspect. Because I was, we were talking beforehand, I was out in Illinois and this week, and the people.

There are not happy.

They note that there's a lot of help wanted signs, but they're also very upset about what they say is affordability. They see the gas prices, and the people in business and on the farms see the diesel prices, and they don't think any progress is being made. They think time's being wasted on the Iran war, and they are just tired of it all at this point.

Yeah, and there was that poll out, I think, this week showing the disapproval over the way President Trump has been handling the cost of living in this country, and now it's seeping through to the Republicans as well.

Yeah, I mean, it's going to get more acute for the people who call Washington at least part-time home because they may not much longer.

They're also probably ticked out about the Bears leaving, but that's going to be.

Oh, we can get to that later.

I know, I know.

But I know Mike has some thoughts always. Mike, thank you so much. Have a great weekend. Thanks for sticking around. He is Michael McKee. He's, of course, Bloomberg TV and radio, international economics and policy correspondent, We're going to stay on jobs, the U.S. economy, and let's get right to our next guest.

We've got Kathy Bojancic. She's Senior VP and Chief Economist over at Nationwide Mutual, the insurance company, joining us from.

New York City.

Hey, Kathy, good to have you back on Bloomberg here with Alexis and myself. Your read on the job data and what it tells us about the U.S.

Economy.

Oh, hi, Carol. Happy to be with both of you. I think it's a solid labor market reading. Yes, it was cooler than expected, cooling from August. But as Mike pointed out, it was just right, because if it was stronger and we had another robust gain in jobs and maybe wage growth was stronger, that would elicit a stronger and faster response from the Federal Reserve. And that would mean that possibly October is really strongly on the table in terms of a rate increase. I would agree now that there's a little less compelling reason, but I don't think we can rule it out completely because we have to wait for the inflation data, the consumer price index data that will come out in the middle of October.

But I think you look at the three-month monthly average for payrolls overall over 50,000, private payrolls 54,000. And we do need less job growth to keep the unemployment rate steady. We need 20,000 to 30,000 a month. So we're well clearing that if you look at the last three months.

We know that wages can be inflationary. We saw them actually pull back in this latest report. Is there concern there, though, that at some point the consumer is going to be too strapped, not be able to keep up with these higher prices that we see?

Yeah, I mean, Alexis, it's, you know, a burden for the consumer right now. They're definitely being pinched by higher energy prices, you know, gasoline, and as you mentioned, the farmers with higher diesel prices. But what we've seen is the consumer powers through that, at least, you know, they did certainly in the spring and early summer. And, you know, I think the savings cushion is a little bit more than we thought. Yes, the savings rate's been coming down, but with revised GDP numbers, actually the savings rate is about a percentage point higher than we thought before. So it's 4.1%. And then they can rely a little bit more on credit cards. And I'm talking about households who are really pinched by these higher energy costs, right? And

you're talking more lower middle income, lower income houses. Others are doing okay, right? And they have wealth effects from higher stock prices.

Home prices.

So they're not really feeling it as badly as other households.

Kathy, I want to move over to the yield space because if we see the 10-year yield sort of finding a new floor at 5%, what does that mean for the consumer? And does that then finally start to challenge the stock market rally?

Great question. So I would say, you know, how the 10-year yield really affects the consumers through mortgage rates, right? And mortgage rates are now above 7%. So it's really bad news for the housing market. But I'm not sure that's materially different than what we've been kind of going through in the housing market. I think people just stay put, right?

And a lot of people have mortgages at rates that are 3% or less. So they're immune to this. They won't be able to move necessarily, but they're immune. Auto loan rates probably go up a bit. But what we've seen is auto sales kind of have moved sideways for many quarters now. Some of it is a lack of inventories.

They haven't rolled out the new 2027 automobiles. So I don't think there's a material change there. In terms of the stock market, well, you know, a big reason why long-term yields are higher is because the economy is stronger and nominal growth is higher. And that's usually good for earnings. You know, Carol was talking about that earlier. It's usually good for earnings and the equity market. So we probably have a lot more upward movement that we could withstand, the equity market can, in terms of yields. And also keep in mind, AI spending is not going to be sensitive with rates, even if they go up a bit more.

Yeah.

I mean, listen, those big tech firms continuing to tap into certainly the credit markets, and it's certainly something we watch. Hey, Kathy, one thing I want to go back to before we leave, and this is back to the job market. you say less job growth to keep unemployment, is keeping the unemployment rate kind of steady.

But I also do.

Wonder, is there a point when the labor pool is shrinking, does that mean we also ultimately are going to keep kind of guardrails about how much growth we can get out of this U.S.

Economy?

We always talk about the importance of immigration and being able to increase our labor pool.

So I just do wonder about that.

Yeah, I mean, we are very reliant on that and have been. and it can hold back economic activity for sure. And it probably has already for the last 18 months or so. But we also have AI again. We keep mentioning AI. It's so prominent, right? AI is going to boost productivity growth, and it probably has already to some degree.

And even besides that, productivity growth has been strong. So that helps offset the drag from less labor supply. So I think You know, the U.S. economy is still in pretty good, solid shape. It could really be stronger, though, if we had more availability of workers. No doubt about that.

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

All right, everybody, we're just talking about watches and keeping time, if you will. And it is just about one month to the day, 32 days to be exact.

Thank you, Juan, for reminding me. Until the midterms.

They really are just around the corner. What will the outcome be? There's been lots of speculation. Check out the prediction markets.

There's some betting. But the outcome will determine policy, policy changes.

Does it stay the same? President Trump is certainly concerned about another impeachment.

And does it affect the market? I mean, does a blue wave next month, what does that mean for the stock rally?

A lot of questions, and we're all watching. Nathan Dean is also on top of it all. He is a senior U.S. policy analyst for our Bloomberg Intelligence team. He's out there in D.C.

Nathan, Nathan, it's been a bit. I'm glad to have you back with us. We are getting close.

First of all, top of mind for you as you think about policy when it comes to the midterms.

So really, you know, if we have this scenario where the Democrats take at least one chamber, it's going to push President Trump into two other avenues of getting his policies through. And that is reliance on the power of the presidency, which really speaks to geopolitics in the energy sector and then tariffs in the consumer sector. And then also push on deregulation, which we're telling our clients is that expect a flurry of proposals between now and the first half of next year, which primarily is impacting financial services and crypto. The SEC and CFTC in particular are working on seven measures that all should be out before Thanksgiving.

Nathan, what we saw happen today with the G7 saying they're going to tap their oil reserves now to sort of ease the crunch for not only gasoline, but also diesel. We know this is something President Trump has desperately wanted to do. His approval rating is quite low amongst even now some Republicans who say they're really concerned about the cost of living. Is this going to make a difference for him in the midterms? And is it just too little too late?

It's a little too little too late.

I mean, if you think about all the affordability measures that President Trump has been pushing over.

The last year, only really one of them really went into fruition.

And this was a bill about preventing private equity and other type of corporations from purchasing single family homes, which we at Bloomberg Intelligence don't think it's going to have much of an impact, at least not for another three to five years. So the challenge for President Trump right here is to try and actually change the behavior of to try and get some traction for the Republican Party going into the midterms.

We don't see any evidence of that happening.

So what's going to happen is that if the Democrats do take at least one, if not both chambers of the House, President Trump's going to effectively ignore Congress and go back to those other ways of implementing policy. And there's one thing I haven't really mentioned, and that's artificial intelligence.

We at Bloomberg Intelligence don't think there's any type of policy coming down from the federal level Anytime soon that's going to stop or prevent or restrict any type of capex spending for artificial intelligence, artificial intelligence is going to be under President Trump's watch until January 20th, 2029 at 12.01 when the next president takes that office.

Yeah, I mean, this past week has shown that he is certainly interested in a big way.

You just think of those.

Senior top tech names just around him outside the White House holding that press conference. All of a sudden, I feel like he's very keen to be very, very involved in all of this and Having said that, Nathan, you know, we've had a Congress, I don't know what they've been doing, but it's just, you've had a president, right, who can take executive actions and executive orders.

And do so much.

I think there's an assumption that not as much will get done, but.

He can still do a lot. You've been kind of saying this, right?

There can still be a lot of policy implementation that impacts financial markets, business cycles, and so on.

Absolutely.

Now, you know, first off, we'll have a gridlock Congress, which generally is good for the fixed income markets because you don't have the opportunity.

For a reconciliation like bill to drive up the U.S. deficit.

Sequestration sort of constrains the government on that. And so our rates strategist, Ira Jersey, has been telling his clients that's probably a good thing from the deficit perspective.

But then there is legislation that is going to get done.

Let's just, you know, there is these bouts of economic populism on both sides of the aisle. And one bill, just for an example, it's a bill called the Credit Card Competition Act. It would open up additional competition for Visa and MasterCard. So better for American Express and Discover slash Capital One. That type of bill does have certain pockets of support on both sides of the aisle. That is a bill that could pass in the next congressional session.

But to your point, President Trump, what do presidents do in their second half of their second terms? They go geopolitical because capital begins to ignore them. And that's really where tariffs are going to come into play next year. And we actually think 2027 is the year of the tariff, not 2025.

Wow.

Because in 2025, President Trump was not on firm legal grounds.

Now he is in 2027.

So expect a lot more tariffs to come back or at least tariff threats to come back. And it's certainly going to have lots of impact from consumers to automobiles to retail.

I got to say, too, Nathan, when you say geopolitics, I think about how much has been done just so far in this administration. And I can't even care to venture where else it might go, Alexis, at this point in terms of the U.S. war in Iran and just so many different things overseas.

You know what I also find interesting, Nathan, is how a lot of companies on their earnings calls recently were talking about the tariff refunds and how much that actually helped their bottom line. I mean, isn't that a deterrent for the president, or I guess not, the fact that the government might be on the hook to pay back some of these tariffs if the courts say so?

So we're not actually through.

I mean, most of the tariff refunds, we're about halfway through the process right now of those tariff refunds are coming back to those companies. So you should see those for another quarter or so. But when it comes to President Trump and his tariff strategy, it's an effective way for him, a tool, if you will, to conduct negotiations with other countries. Now, he doesn't always implement that tariff, but there is a thought out here that right now we're currently about five basis points below where the blended effective tariff rate was in 2025, which is around 15, 16%.

Our general view is that we're going to go back to where we were in 2025. So you're going to see a slight increase in global tariffs. But really, the main question is specifically some of those relationships where things get a little bit muddy. And I'll just call it the United States and Canada. If you're looking at the big three automobile makers, certain cars go across that border 15 times before they're completed. And if relationship between the United States and Canada goes south even further and tariffs go up, well- There's a lot of implications there from potash to automobiles. There's a lot of things here. And President Trump is going to want to get the deal done sometime this year, if not next.

And listen, this is a president who's proven that he can focus on things even when there's so much going on. But I think about the distraction of another impeachment and how that might impact things. President Trump has predicted that Democrats would impeach him for a third time. if they retake control of Congress. So, you know, he's been out there trying to help the Republican candidates that are running in these midterms.

But talk to us about how you guys are.

Factoring the possibility of another impeachment for President Trump and what that would mean for what he can or cannot get done. And also how the global world or stage might look at him.

Yeah. So, you know, Representative Raskin and Representative Garcia, who are the ranking members of the House Judiciary and Oversight Committee, actually insinuated earlier this week that They are not interested in an impeachment against the president.

Look, it'd be the third time.

President Trump would probably welcome it. You know, it allows him to fight. That's something he likes to do. There are going to be pockets of the Democrats out there that are interested in impeaching the president. But right now, we just don't think that's in the cards. Now, what is in the cards, however, is investigating what the Democrats have been calling corporate corruption. Now, this means bringing CEOs to the Capitol Hill and having them testify. And the White House has already insinuated that the communications between companies and the White House is privileged information. So there could be a scenario where we'll just pick on the AI CEOs because they were here in Washington this week. The

Democrats bring them to Congress and say, did you have this weird or this conversation with the president? And these CEOs will have to come back and say, based upon the legal advice from the.

It's somewhat uncomfortable.

Now, it leads to headline risk, not a huge investing impact point of view, but there have been instances over the last 10 years where CEOs come to Congress, they don't perform well, and it begins to ask questions, and investors begin to get a little bit concerned.

So we expect a lot of that to take place next year.

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

Hey, our next guest joined us back in March, Irish Companies.

He's from Ireland.

Well, you'll hear that in a moment, yes, and I love the accent.

Here's the backdrop.

Irish Companies have committed more.

Than $ 6. 1 billion in new capital spending commitments. That's to the U.S. economy.

That's through 2026, 2030, the horizon. We got this back in March. He was here in our studio earlier. This is the Prime Minister of Ireland. The Taoiseach was headed to the White House for the annual St. Patrick's Day visit, but our guest is back with us. He's Michael Lohan.

He's CEO of IDA Ireland. I am back from L.A. I keep telling everybody. I took the red eye.

I took the red eye.

Not the red eye, so I really don't have much experience.

The country's foreign direct investment agency back here in our Bloomberg Interactive Brokers Studio.

Good to see you. How are you?

I'm great.

Thank you very much, Karen. I actually love to meet you.

Did you bring the nice weather with you?

Well, yeah, I'd say I have, but I'm not sure. Hopefully I can bring it back with me when I return to Ireland at the weekend.

It's a little bit cooler there.

Hey, I want to ask you, and so much to talk to you, I want to talk about that visit back in March to the White House and ongoing conversations between the U.S. and Ireland, because it does certainly seem sometimes complicated, the U.S.

And the rest of the world. What can you share with us?

Yeah, so I think the last time we spoke, actually, it was Patrick's week, as we now call it, and we were going to the White House as part of that. And I think what's happened, you know, during that week, obviously, we got an opportunity to reinforce that strong commitment between the U.S. and Ireland, you know, that dual, I suppose, relationship that we have in terms of investment, U.S. companies investing in Ireland, you know, a proven trusted relationship, Irish companies investing here in the U.S., And we see that continuing.

We see strong momentum of US companies into Ireland. Just in July of this year, we had Intel, another 5 billion being invested in their global capacity out of Ireland as well.

Data centres?

No, no, this is on chip manufacturing with Intel. And that's what's driving the next growth. So we continue to see that investment on semiconductors, in life sciences, in financial services, fintech. These are all real areas of growth for the Irish economy and indeed the global economy.

Yeah, it's not making President Trump very happy though, is it?

Well, actually we had President Trump in Ireland just a couple of weeks ago and for a very positive trip as well. And I think when you look at the, I suppose, the engagement of US companies in Ireland, like it goes back six, seven decades. So the growth of those companies has propelled, you know, not just in Ireland, but actually internationally as well. So we're part of that value chain that brings growth to the corporation, both here in the US and indeed globally.

So where do things stand right now with the Trump administration? with regards to tariffs and Ireland, because we know there were, did he roll back tariffs recently on whiskey?

On Irish whiskey, yeah, he made the declaration of Irish whiskey. But of course, with Ireland, we're in the European Union, so we're part of the broader deal. There is the agreement between Europe and the US in terms of tariffs and within that percentage of a 15% cap. So we continue to work through that. And I think for Ireland, we've been advocating, as has Europe, for product to reduce that.

Because I think the more restrictions that we have on tariffs and flows, that's not positive in terms of innovation, in terms of growth. So we're very, I suppose, proactive in engaging both our European colleagues and directly with Washington in terms of that mutual beneficial relationship. I suppose, activity that comes from having free flow of trade and free flow of innovation between their two nations.

Michael, how would you characterize, though, how the White House is seeing it, right? You know, go back to the first, you know, administration, and he came out guns a-blazing in terms of imposing tariffs on many. And, you know, you think about, not the first time, the second time, very much after he took office for his second term. And then we've seen things roll back. How would you characterize...

how the Trump administration is viewing what they want in terms of tariffs for the rest of the world.

Have they eased dramatically in your view?

Yeah, so I think we've seen an evolution.

And the engagement has eased.

Yeah, so I think we've seen an evolution of the thought process around tariffs, the purpose for them, and interaction. And I think we've seen that not just with Europe, but obviously with other nations in the world as well. Because these supply chains are complex, they're global, they're interwound, you know, in terms of if you think about a drug or a semiconductor, they actually have multiple touch points, not just in Europe or in North America, but in other parts of the world as well. So I think there is an acceptance of that, but I can also understand the US administration in terms of building capacity in the US. So I think we have to find, I suppose, the common ground between us in that context. And for

us in Ireland, we believe that Ireland provides that gateway for US companies into Europe, into global markets, that strengthens ultimately the parent company, which is a US company. And we've seen how that's There's many companies I mentioned, 30, 40, 50 years in Ireland, and the growth that's come in those companies is because of the presence they've had internationally as well as here in the US. So I think there's a complementary element that exists in international trade.

Carol mentioned data centres a moment ago. I want to touch on AI because you have a big international summit coming up. Will it be in Dublin?

It is in Dublin, yeah. So it's part of, obviously, we're chairing the European Council at the moment, Ireland. So we're in that seat until the end of this year. And it's part of that we're holding international AI so much if it's part of Europe's AI month. So that's happening on the 14th of October, where we'll have policy leaders from Europe, we'll have industrial and enterprise leaders from all over the globe, and we'll have multiple, I suppose, industry segments, not just technology, but actually those where we apply AI. So across healthcare, across automotive, we'll all be part of that discussion, really talking about how we build and integrate trusted AI through our enterprise models and through

our enterprise supply chains.

Michael, you guys, or.

Ireland, I should say, had lifted a de facto ban on connecting new data centres to the electricity grid around Dublin. So it's a move that kind of gives the industry long-awaited clarity. on the requirements for building new facilities. What can, you know, how much building are you seeing or interest in building? Give us an idea, quantify the capacity around new data centers.

Yes, so you're correct.

What we've done in Ireland actually, I think uniquely is, We've, and look, we have this challenge all around the globe in terms of energy demand.

You can build them, but if you don't have the power.

Well, even for everything, for economic growth broadly, I think we need more energy and we need robust, I suppose, systems to support that in terms of grid and so forth. But in Ireland, what we've done is we've taken our renewable ambition, which is to increase our generation capacity by 5x over the next two decades. And that's actually going to be through renewables in terms of offshore wind. And we've linked that to large energy users. And we're saying to the large energy users is, If you want to connect, you can get a connection agreement, but you must decarbonise and be an enabler for the renewable generation.

Is that a part of the agreement to build a data centre?

Correct.

You can build it, but here's what you have to do.

For any large energy user, i.e. data centres, they have to give those commitments. What's the commitment? All of the energy has to be renewable? Yes, so 70-80% will have to be renewable. And of course, there'll be a different mix in this because we realise there's going to have to be battery technology involved, There's going to have to be sustainable technology and there may continue to have to be, I suppose, gas fired as well for reliance on the grid.

So all of that is connected. We're connecting our sustainable initiative with our ambition for economic growth.

I wonder if states here in the US can use that as a blueprint because you're giving companies, they might not love the rules, but you're giving them real guardrails and transparency.

And that was the whole purpose of it from the government perspective is provide a pathway that energy users can plan their future investments. And this has just come into position this year. So we're going to see the first number of investments happening over the years ahead. But crucially, it's about linking that generation capacity with the demand capacity and doing that in a sustainable manner.

Well, and it's interesting.

I want to talk, if we have a time, wind energy, but I want to go back to the original question. So then with all of this, how much activity demand people looking to build data centers in Ireland?

What can you tell us about the activity around this?

Yeah, so we have been active in the data center market for 20 years.

I know.

But AI has given juice to all of this.

It is.

It is given another juice is certainly one word for it.

Yeah.

I do think what's important is, and we're very clear on this, as an open economy and Ireland is built as a digital economy, we need to have digital infrastructure and we need to have data centres. Now, what we have to do is balance data centre requirements with the capacity of any state or nation to support that. And from a policy perspective, we think we're getting that right with our policy direction. And just last week, we've seen a permitting coming through for a data centre as well for Google. So like we continue to see progression on data center investment in Ireland, but we have to balance that.

And I think that's where our policy agreements are.

So you'll say no, Google comes in and says, I want to spend a million dollars, a billion trillion dollars on a data center, but we really don't want so much in renewable. I shouldn't just say Google. I'm just doing an example of everything before everybody gets crazy.

A heavy hitter.

You'll say, nope, you need to do renewables.

No, you have to. That's the conditionality that's associated with it. You have to deliver within the national policy and the national framework. And that's the means in which we... Because remember, energy is a scarce resource everywhere in the world. And we have to manage that. And it has to be plan-led.

And in Ireland, we're very much in a plan-led approach. How do we make sure we're dealing with that from a generation perspective? and a demand perspective and doing that in the most sustainable manner possible.

And in Ireland, your largest source of renewable electricity is wind farms.

Correct.

So talk to us about that and what is outside investment like right now for wind farms in Ireland?

So in Ireland at the moment, we have a very developed Onshore wind farms and solar, who taught in Ireland at solar, but the technology has improved so much that solar is really effective in Ireland. So today, actually, our grid can be anywhere up to 50% plus is coming off renewables on an average basis. And sometimes it's higher than that. But the real, I suppose, growth area is in offshore wind. So we're actually looking at the east.

Coast of Ireland.

A lot of water around you.

We have a lot of water, yeah, and we have a lot of wind. So the real opportunity is off the east coast. The first projects actually will be, the permitting will come through in that in the coming weeks for the first scale of investments off the east coast. The long term ambition is when we've done the East Coast is actually to come on the West Coast between on the Atlantic, where really we're seeing high value and high volumes of wind. But that's new technology is going to be required. But that's where the real growth can come from Ireland's future. And our future is going to be about renewable energies driving our generation capacity.

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

It's been a while since we spoke with our last guest.

He is Yannick Benjamin.

He's a sommelier and restaurateur, also making hospitality accessible to all people, everyone, as a co-founder of Wine on Wheels that unites the hospitality industry and wine lovers to support people living with disabilities.

It's something he knows a lot about. It's something we have explored with him many times, and we welcome him back. Yannick, good to have you back.

It's great to be back. Thank you so much.

How are you doing?

Tell me about your world.

You've been in restaurants. You've been, obviously, in wine for a long time.

Something we've talked about.

How's it going?

Life is amazing. The weather's perfect here.

It's October and two weeks away, or a little bit past two weeks, but then Wine on Wheels, October 18th.

So busy, busy.

Tell us about that organization for those who might not be in the know. And it's been a few years, so how things have been going and the impact that you guys.

Have been making.

For sure.

We're keeping ourselves very busy. And as I always say, we're trying to turn wine into hope, right? Wine on Wheels was started in 2012. I was in a car accident in 2003. It feels like forever. And I'm paralyzed. And I realized, along with my colleague.

That there was this void of helping other people with disabilities.

That simply did not have that same kind of love, care, and support that one needs to overcome this very life-changing situation. And so through my love of wine, through my love of hospitality and trying to gather everyone under the same roof to raise money for worthy causes.

And that's what we do.

What is it about wine that sort of brings people together?

Oh, my God.

You know what? I'm on now. Wine is communal, right? And we have to even think about the ancient Greeks at the ancient agora. and they're getting together and they're drinking wine and they're having these incredible conversations, right? So this is what wine is for me, and what I love about Wine on Wheels, I think of ourselves as, you know, there's Socrates and there's Diogenes the Cynic, And we're having great conversations and a mosaic of different people from all around the world.

It's so funny. I was in Greece recently for vacation, and I was in the ancient Agora.

Oh, yes.

And you just sort of let your mind go there and go, what was it like to be here? And I think with a glass of red, it would have been pretty incredible.

Well, I'll tell you, the wine back then was very different. It was probably harsh. You know, they were dumping honey and herbs and spices.

So very different.

What I do want to ask, though, wine on wheels. It's fun wine, and we're going to sample some in just a moment, and you have this event. But tell us about the specific things when you get down to the details, what you guys are doing to make a difference. Because I remember having these conversations with you. It's a tough time when you realize, you know, you're disabled. It's going to be difficult to get around. So what is it that you guys do?

Of course.

I mean, I don't want to state the obvious, but certainly if you have a long-term disability and trying to navigate the healthcare system is incredibly challenging.

Yeah.

For example, there's this lovely lady who I've been friends with and she's also on the board of Wine on Wheels.

Her name is Natalia Mendez. She's an incredible advocate.

She's a quadriplegic and she is the head and CEO of Women on Wheels. And they're doing tremendous work to empower women who have a disability. So through Wine on Wheels, through the money that we raise, we support this organization. We want to see more people with disabilities out in the workforce. We want to see more people with disabilities independent, and living their best lives. Keep in mind, there's one in four Americans that identify as having a disability.

So these are numbers that we cannot ignore.

And so hopefully, with whatever little we can do, we want to try to help these individuals.

So you have this event coming up, October 18th. Tell us what it is, what's it all about.

So I've gathered some of the best sommeliers, wine professionals under one roof. They're all going to be behind tables. Pour in some of the most fantastic wines. We're going to have a couple of food tables.

Where, where, where? Sorry, yeah, sorry, sorry.

City Winery down in the Meatpacking District. It's an incredible space, incredible venue, great staff.

Great view.

So instead of having Eggs Benedict for your Sunday brunch, come on down and visit us.

It's from 12 to 3. We'll have your Eggs Benedict first.

Maybe, yeah, yeah, exactly.

You should have your Eggs Benedict first.

You can have it all.

You brought us some wine.

Yes.

And so talk to us about, first of all, you've got a big bottle here.

Yes.

This is going to be auctioned off.

That's going to be auctioned off.

This is, I think, one of the greatest winemakers, Domaine Christian Moreau, great family in the heart of Chablis, northern France, 100% pure Chardonnay. This bottle, along with a couple of vintages, this is called the Jeroboam. generously donated to Wine on Wheels for our auction.

Amazing.

So it's a great opportunity to have a very rare bottle for probably half the price that you have in the market. So Silent Auction really offers that. And I'm so grateful to Christian Moreau for supporting us.

Is it egregious to ask, like, how much does a bottle like this often go for?

You know, the rarity is there. You can't just go into a store.

It's not just size, but it's rarity.

Yeah, like I want a Jeroboam of this 2008, let alone, Chablis Grand Cru.

It's incredible. So there's no price on it.

If somebody's hearing this right now and they're like, I've got to get my hands on it, how can they participate in the auction if they don't go to City Winery?

Great question. Go on our website, wineonwheels.org.

Or DM me, Yannick Benjamin, or Wine on Wheels, and we will figure it all out. But yeah, you can just go on our website, and it's all there for sure.

All right, so you gave us, you brought in some for us to sample. So let's start with the white or the red?

Yeah, so I brought these two wines because I just came back from Argentina, and I was completely impressed. And this is just a slight example of wines that you'll, We'll have the classics, we'll have the Cabernets, we'll have the Pinot Noirs, we'll have the Chardonnays, we'll have the Sauvignon Blancs, but I wanted to bring also the other side of wine that's so interesting, so fascinating, and these are unbelievably friendly priced wines, budget friendly. So the first wine, this is called La Montagnista, and we are in Argentina, but in Salta, this is a grape called Torontes. Creamy, Fresh, floral, nice citrus aromas, super complex, layered. I was so impressed by the wines of Argentina because we think of Argentina

as Malbec country, but there's certainly more to it.

This is so much lighter. I would never think this was an Argentinian wine.

Yeah, yeah, for sure. And there's tons of small little producers like that. They're doing such a great job.

When you say budget, though, what are we talking about in terms of price?

Anywhere from $ 20 to $ 25, even slightly lower.

So I think it's really reasonable.

Okay.

That's one of the things I've learned over the last few years talking to you and others in the industry. You don't need to spend a ton of money to get a great bottle of wine. And your guys are discovering vineyards all around the world that just offer up some great things.

The quality of wine has never been better, honestly, and especially in South America. I mean, it's just unreal. I mean, across the world, but what they're doing right now. It's pretty amazing. It's amazing, yes. And the other one, so I.

Brought another kind of very unique grape in Argentina.

It's called Criolla.

Okay.

It's light, it's fresh, it's got nice tartness too. Cranberry rhubarb aromas, you know, just an easy drinking wine. And this is a type of wine that you can actually put on ice. It's like a good table wine. It's a good table wine. And this is something that's quite inexpensive, under 20 bucks. You know, you can't go wrong. But I wanted to bring that because Roca Madre, Lo Montanista, great little producers that are doing a tremendous job really representing their countries.

In the best possible way.

How tough is it on the little producers though?

And to get noticed?

Oh, it's not easy.

I mean, the amount of wine that's out there is unbelievable. It just doesn't stop. So it requires a lot of work. It's not just about making the wine or harvesting the grapes. It doesn't stop there. You've got to market yourself. You've got to put yourself out there.

There are some vineyards that are closing in California.

Yeah, I know. I just think that there's been an influx of overproduction. And I think that a lot of people hedged their bets because of the pandemic, because drinking spiked up.

Right.

But I think things are back to normal. We're getting there.

I think we're overreacting.

Younger people are not drinking as much is what I keep hearing.

Yeah, I'm glad you went there. What's going on there?

I mean, listen, I... The people that follow me, I see a lot of young people drinking.

I mean, there's always a reset. You know, I mean, 10, 15 years ago, people were freaking out about gluten. But now every block you go to, there's a pizzeria.

There's still people making pasta. There's still a Italian restaurant. So it's one of those things. Things kind of work full circle.

I do have some young members of my family.

Everything in moderation.

Wine on Wheels, October 18th. Again, where can people find information?

Go to wineonwheels.org.com. Go on Instagram, Wine on Wheels as well, Yannick Benjamin. We would love to have you. It's going to be a great event.

Thanks for bringing the wines.

They were really good.

Well, thank you so much for having me.

This is the Bloomberg Businessweek Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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