WEBVTT - US Consumer Spending Powers On Even as Inflation Persists 0:00:02.520 --> 0:00:10.520 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business 0:00:10.520 --> 0:00:14.400 Week Daily reporting from the magazine that helps global leaders 0:00:14.440 --> 0:00:18.360 stay ahead with insights on the people, companies, and trends 0:00:18.360 --> 0:00:23.360 shaping today's complex economy. Plus global business, finance and tech 0:00:23.440 --> 0:00:27.320 news as it happens. The Bloomberg Business Week Daily Podcast 0:00:27.640 --> 0:00:31.720 with Carol Masser and Tim Stenebeck on Bloomberg Radio. 0:00:32.280 --> 0:00:35.320 Hey listen, folks. We did get a key inflation gauge. 0:00:35.400 --> 0:00:37.440 It came out earlier this morning. It grew at a 0:00:37.440 --> 0:00:39.760 slower pace last month. We also got some data on 0:00:39.760 --> 0:00:42.800 a resilient US consumer. We also saw incomes growing, and 0:00:42.960 --> 0:00:46.199 yet US consumer sentiment fell in the month of September 0:00:46.240 --> 0:00:48.800 to a four month low on growing concerns about the 0:00:48.840 --> 0:00:52.519 impact of high prices and personal finances. Richmond Fed President 0:00:52.520 --> 0:00:55.920 Thomas Barkin spoke with Bloomberg TV and Radio international economics 0:00:55.920 --> 0:01:00.440 correspondent and policy correspondent Michael McKee before this morning's of 0:01:00.600 --> 0:01:03.240 US economic reports, and you talked about the Fed's dual 0:01:03.320 --> 0:01:06.200 mandate and keeping an eye on all the data as 0:01:06.200 --> 0:01:07.319 it continues to come in. 0:01:08.040 --> 0:01:11.399 It's a low hiring environment, but the labor supply is 0:01:11.440 --> 0:01:13.440 also short and you have to be very attentive to 0:01:13.480 --> 0:01:16.520 that balance because it could get out of balance right. 0:01:17.200 --> 0:01:19.360 Similar on the inflation side, you do have these cost 0:01:19.400 --> 0:01:22.800 pressures and four and a half years of inflation over target. 0:01:23.200 --> 0:01:25.280 On the other hand, you're not seeing that show up 0:01:25.319 --> 0:01:28.120 and spikes and inflation in the real time numbers. 0:01:28.280 --> 0:01:29.160 We are seeing what. 0:01:29.160 --> 0:01:31.319 Seems to be a productivity boom, and so I think 0:01:31.360 --> 0:01:34.320 you have to be very attentive to how little we 0:01:34.360 --> 0:01:36.920 know about how each of our mandate variables is going 0:01:36.959 --> 0:01:39.280 to play out. And so, you know, I feel like 0:01:39.400 --> 0:01:41.400 very adaptive is the way to think about it as 0:01:41.440 --> 0:01:44.280 and that's part of why I'm not being prescriptive into well, 0:01:44.280 --> 0:01:47.080 it's this many cuts over this period of time, because 0:01:47.240 --> 0:01:49.919 I think we're going to see and learn a lot as. 0:01:49.760 --> 0:01:50.360 We go here. 0:01:50.600 --> 0:01:53.520 Adaptive and attentive sounds like data dependent. That is Richmond 0:01:53.560 --> 0:01:56.640 FED President Thomas Barkin. Earlier this morning on Bloomberg with 0:01:56.920 --> 0:02:00.520 Bloomberg TV and Radio International Economics and Policy course Mike 0:02:00.600 --> 0:02:04.080 joining us from DC along with Elizabeth rent Or, senior 0:02:04.120 --> 0:02:07.600 economist at the personal finance company nerd Wallet. We'll get 0:02:07.600 --> 0:02:09.200 to her in just a moment, but Mike, I do 0:02:09.280 --> 0:02:12.480 want to start with you this morning's data drop of 0:02:12.600 --> 0:02:17.120 US data and what you heard from Fed President Barkin. 0:02:17.160 --> 0:02:19.640 Does it all kind of mesh with what we got 0:02:19.720 --> 0:02:21.760 in the latest FED decision and commentary. 0:02:23.960 --> 0:02:24.400 Maybe not. 0:02:25.400 --> 0:02:29.520 And that's the situation that Tom was describing, is we 0:02:29.560 --> 0:02:31.880 came out of the FED meeting thinking that they were 0:02:31.919 --> 0:02:34.079 going to do a rate cut in October and there 0:02:34.120 --> 0:02:36.680 was a good chance of another one in December. And 0:02:36.720 --> 0:02:38.959 then over the last four or five days, we've gotten 0:02:39.120 --> 0:02:42.680 a number of data points that suggest that the economy 0:02:42.760 --> 0:02:46.760 may be rebounding from a summer low, maybe stronger than 0:02:46.800 --> 0:02:49.880 we thought. Second Quarter growth was revised up, and today 0:02:49.919 --> 0:02:54.880 we got better than expected spending numbers from consumers. So 0:02:55.120 --> 0:02:58.240 at this point it's really hard to say what's going 0:02:58.280 --> 0:03:00.520 to happen. The one thing we know from today PCEE 0:03:00.639 --> 0:03:03.760 report is that inflation is not going down. It didn't 0:03:03.800 --> 0:03:06.640 get any worse, but it is still a closer to 0:03:06.680 --> 0:03:10.000 three percent than the Fed's two percent target. So it 0:03:10.160 --> 0:03:12.639 just kind of beans that those who are in the 0:03:12.680 --> 0:03:17.240 middle for the Fed, they're probably going to be waiting 0:03:17.320 --> 0:03:20.200 till much closer to October twenty ninth to make any 0:03:20.320 --> 0:03:21.120 kind of decision. 0:03:21.560 --> 0:03:24.640 Mike, is there a shoe to drop when it comes 0:03:24.680 --> 0:03:28.440 to inflation as a result of tariffs, because we did 0:03:28.440 --> 0:03:31.880 have so many companies pull forward goods purchases before tariffs hit, 0:03:32.520 --> 0:03:34.400 and we just haven't seen it show up. We're going 0:03:34.440 --> 0:03:36.360 to start hearing from companies in the middle of next 0:03:36.400 --> 0:03:39.280 month for their latest earnings report, but we're not seeing 0:03:39.320 --> 0:03:41.440 the spikes in inflation like he was talking about to you. 0:03:42.640 --> 0:03:44.960 Well, we have seen some We've seen prices go up 0:03:45.000 --> 0:03:48.520 for some goods, and there are expectations that will continue 0:03:48.560 --> 0:03:52.040 to see that. It depends, as you mentioned, on inventories 0:03:52.080 --> 0:03:54.800 and how fast those are worked down and then supply 0:03:54.880 --> 0:03:58.880 chain adjustments. It's very hard to say exactly when things 0:03:58.920 --> 0:04:01.440 are going to hit, but economists do expect and the 0:04:01.480 --> 0:04:04.840 Fed does expect to see inflation rise over the next 0:04:04.880 --> 0:04:07.360 couple of months. Then the question is does it go 0:04:07.600 --> 0:04:11.520 down again or does it keep going up because maybe 0:04:11.560 --> 0:04:16.520 the President is continuing to put on additional tariffs. The 0:04:16.560 --> 0:04:19.520 one thing that we can probably into it is that 0:04:19.800 --> 0:04:23.440 Americans are not happy. The consumer sentiment numbers went down 0:04:23.760 --> 0:04:27.599 because of inflation, and even though it doesn't have a 0:04:27.600 --> 0:04:31.400 lot to do with the President's tariffs, Gasoline prices have 0:04:31.440 --> 0:04:35.279 gone up. Meat prices have gone up. Turkey prices have 0:04:35.440 --> 0:04:38.440 gone up there for different reasons. But when you go 0:04:38.480 --> 0:04:40.839 to the grocery store, it's all just inflation to you. 0:04:41.320 --> 0:04:41.560 Yep. 0:04:41.760 --> 0:04:43.480 I don't do a lot of the shopping in my house. 0:04:43.600 --> 0:04:44.760 My husband tends to do. 0:04:44.880 --> 0:04:46.240 My daughter do. 0:04:46.520 --> 0:04:46.560 No. 0:04:46.720 --> 0:04:48.560 My people are my husband and my daughter. But man, 0:04:48.560 --> 0:04:49.880 they brought some steaks and I was like, how much 0:04:49.880 --> 0:04:53.280 did they cost? When they told me, I was like, whoa, Elizabeth, 0:04:53.320 --> 0:04:56.120 come on in on this. Because we are continuing to 0:04:56.120 --> 0:04:59.200 get data points, how does that cross with what we 0:04:59.279 --> 0:05:01.560 did get from the and your view on where the 0:05:01.600 --> 0:05:03.520 economy is and what needs to be done in terms 0:05:03.560 --> 0:05:04.600 of monetary policy. 0:05:05.760 --> 0:05:09.839 Well, I think largely what Spin said is accurate. You know, 0:05:09.880 --> 0:05:11.520 the FED is trying to keep their eye on the ball. 0:05:11.520 --> 0:05:12.840 We're all trying to keep our eye on the ball. 0:05:12.839 --> 0:05:14.720 But there's a lot of balls in the air right now, 0:05:14.760 --> 0:05:16.960 and some of them are flying in completely different direction. 0:05:17.120 --> 0:05:19.880 So it's really hard to suss out where things are headed. 0:05:19.920 --> 0:05:22.839 When it comes to inflation, Yes, it ticked up just slightly, 0:05:22.920 --> 0:05:27.080 but it's not showing real acceleration right now. To your point, 0:05:27.120 --> 0:05:29.480 consumers are feeling a bit of a burn more than 0:05:29.480 --> 0:05:32.200 that headline number would have you believe. You know, food 0:05:32.200 --> 0:05:35.279 inflation rose last month according to today's data, and that's 0:05:35.320 --> 0:05:38.200 something we all interact with on a weekly, if not 0:05:38.480 --> 0:05:39.320 daily basis. 0:05:39.360 --> 0:05:40.560 We see that number. 0:05:40.279 --> 0:05:43.480 And so that's definitely playing into consumer sentiment. Also, we're 0:05:43.480 --> 0:05:46.159 more exposed to all of this talk about the economy, right, 0:05:46.240 --> 0:05:48.800 We're all talking a lot about when inflation is going 0:05:48.839 --> 0:05:50.880 to pick back up, the impact of tariffs, and so 0:05:51.120 --> 0:05:53.480 that's in the back of consumers heads as well, So 0:05:53.800 --> 0:05:57.280 they anticipate a lot of potentially bad stuff happening as 0:05:57.320 --> 0:06:00.520 of yet, wen't haven't seen it translate into reduce spending 0:06:00.839 --> 0:06:04.040 from a big picture overall, I'd say this week we 0:06:04.160 --> 0:06:06.640 got some more of those mixed messages though. Right consumer 0:06:06.680 --> 0:06:10.880 spending is strong despite weak sentiment. The economy continues to 0:06:10.920 --> 0:06:13.400 grow according to the GDP figures. I say, if there's 0:06:13.400 --> 0:06:16.680 some good news out of this week in addition to 0:06:16.720 --> 0:06:19.320 the consumer spending, is that the initial claims came down 0:06:19.360 --> 0:06:22.560 the unemployment claims, So that's a bright spot I suppose 0:06:22.600 --> 0:06:25.440 on the recent past labor market. 0:06:26.040 --> 0:06:27.600 You know, I'm thinking of a conversation that Tim and 0:06:27.640 --> 0:06:29.880 I had yesterday with the CFO of a firm, right, 0:06:29.920 --> 0:06:31.480 and we talked to the CEO just a couple of 0:06:31.480 --> 0:06:34.080 weeks ago and they're saying they're pretty busy. There's a 0:06:34.080 --> 0:06:36.480 lot of activity on their platform. We were thinking, well, 0:06:36.480 --> 0:06:38.279 wait a minute, how does this mesh with maybe a 0:06:38.320 --> 0:06:41.440 slowdown in consumer you know, concerns about the consumer and 0:06:41.480 --> 0:06:44.640 they our own Stuart Paul kind of weighing in that, well, 0:06:44.760 --> 0:06:47.040 what's happening is people are buying, but they're buying and 0:06:47.120 --> 0:06:49.640 taking longer to pay for things, and that's why they're 0:06:49.640 --> 0:06:50.440 making use of that place. 0:06:50.520 --> 0:06:52.480 Like essentially, if he sees a service such as though 0:06:52.720 --> 0:06:55.120 that being used, then it could be a sign about 0:06:55.320 --> 0:06:57.640 the way the consumer's feeling. Elizabeth, I want to go 0:06:57.760 --> 0:06:59.880 to you on next week and the non farm payer 0:07:00.160 --> 0:07:02.080 print that we're expecting a week from now, we'll be 0:07:02.120 --> 0:07:05.480 sitting here talking about that number. Fifty thousand is the 0:07:05.600 --> 0:07:08.720 number of jobs that economy is surveyed by Bloomberg expect 0:07:08.839 --> 0:07:11.520 to be added to the economy. How is the labor 0:07:11.560 --> 0:07:12.480 market in your view? 0:07:13.880 --> 0:07:15.840 The labor market is hanging in there, you know. I 0:07:15.840 --> 0:07:18.080 think the big question next week is not only what 0:07:18.080 --> 0:07:19.480 we're going to see in the jobs data, but if 0:07:19.480 --> 0:07:20.640 we're going to see the jobs data. 0:07:21.680 --> 0:07:24.440 You know, if the I saw that story right, if 0:07:24.480 --> 0:07:27.400 there's a shutdown, the BLS would delay the next US 0:07:27.520 --> 0:07:28.560 jobs report. 0:07:28.960 --> 0:07:31.920 Right, And this is crucial data for monetary policy, as 0:07:31.920 --> 0:07:34.520 you all know. I mean, ideally, if there is a shutdown, 0:07:34.560 --> 0:07:37.040 it will be brief, as recent ones have been, and 0:07:37.280 --> 0:07:39.480 the FED will still have that data in hand before 0:07:39.480 --> 0:07:40.200 their next meeting. 0:07:40.520 --> 0:07:41.880 Regardless of when we get it. 0:07:42.080 --> 0:07:44.400 I anticipate that data is going to show, you know, 0:07:44.760 --> 0:07:48.120 weaker job growth as we've seen over the past several months. 0:07:48.360 --> 0:07:50.400 But I do believe the unemployment rate is going to 0:07:50.440 --> 0:07:54.600 remain relatively steady. The break even rate, or the number 0:07:54.640 --> 0:07:56.680 of jobs we have to add each month in order 0:07:56.680 --> 0:08:00.520 for the unemployment rate to remain steady, is decreasing. And 0:08:00.560 --> 0:08:03.200 that's because the labor force is decreasing. 0:08:03.320 --> 0:08:03.480 Right. 0:08:03.520 --> 0:08:05.960 We know we're not getting as many immigrants right now, 0:08:06.160 --> 0:08:09.280 and some immigrants that we're already here, already working, maybe 0:08:09.440 --> 0:08:13.560 leaving the workforce. The magnitude of that a little uncertain, 0:08:13.600 --> 0:08:15.120 but I do believe that's going to help hold that 0:08:15.200 --> 0:08:16.440 unemployment rate where it is. 0:08:16.560 --> 0:08:18.400 Mike, saving thirty seconds for you, because I think we 0:08:18.480 --> 0:08:21.360 have to bring up Fed Governor Lisa Cook this case 0:08:21.880 --> 0:08:26.160 before the Supreme Court. President Trump wants the Supreme Court to, 0:08:26.600 --> 0:08:28.800 I guess give him the okay to fire her. 0:08:29.240 --> 0:08:30.520 She's fighting it as well. 0:08:30.960 --> 0:08:32.960 Just quickly, what do we know, what might we get 0:08:32.960 --> 0:08:35.520 in terms of news, either today or potentially over the weekend. 0:08:36.520 --> 0:08:38.559 Well, a decision could come any time by the Court, 0:08:38.600 --> 0:08:40.680 and they have tended to move quickly in these Trump 0:08:40.720 --> 0:08:44.719 firing officials cases, except that in this case there are 0:08:44.800 --> 0:08:49.079 a lot of miquey filings, friends of the court, filings 0:08:49.880 --> 0:08:53.600 that the justices may want to wade through. And also 0:08:53.760 --> 0:08:56.840 we've seen in a couple of controversial cases that some 0:08:57.080 --> 0:08:59.640 justices want to dissent, and so that takes some time 0:08:59.679 --> 0:09:02.040 to write. So we don't exactly know when we are 0:09:02.080 --> 0:09:05.440 going to get this decision. If the Court allows her 0:09:05.480 --> 0:09:08.920 to stay in the job, then we kind of lose 0:09:08.960 --> 0:09:11.440 the headlines for a year or so while it goes 0:09:11.440 --> 0:09:15.240 through lower courts. And if they fire her, then of 0:09:15.280 --> 0:09:19.160 course we'll be back here immediately talking with you about 0:09:19.160 --> 0:09:20.839 what happens next to the FED. 0:09:20.760 --> 0:09:22.240 Right, and we talk about whether or not we have 0:09:22.280 --> 0:09:23.640 an independent FED anymore. 0:09:23.840 --> 0:09:26.160 All right, Mike McKee, thank you so much. There in DC. 0:09:26.280 --> 0:09:29.400 Bloomergs Mike McKee along with Elizabeth Renter, senior economist at 0:09:29.440 --> 0:09:30.160 Nerd Wallet. 0:09:30.880 --> 0:09:33.680 Stay with us more from Bloomberg Business Week Daily coming 0:09:33.760 --> 0:09:34.679 up after this. 0:09:39.080 --> 0:09:42.960 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:09:43.000 --> 0:09:46.199 us live weekday afternoons from two to five eastering. Listen 0:09:46.240 --> 0:09:49.840 on Apple Karplay and Android Auto with the Bloomberg Business app, 0:09:50.000 --> 0:09:52.600 or watch us live on YouTube. 0:09:52.960 --> 0:09:56.320 Well, former FBI director James Comey has been charged with 0:09:56.480 --> 0:09:59.880 lying to Congress an obstruction related to testimony he gave 0:10:00.040 --> 0:10:03.840 in twenty twenty, accelerating President Trump's push for legal action 0:10:04.080 --> 0:10:07.959 against his perceived political enemies. Now after the indictment, Comy 0:10:08.000 --> 0:10:10.439 said in a video on Instagram that he is not afraid. 0:10:10.920 --> 0:10:13.040 His lawyer to Tim has come out with a statement. 0:10:13.160 --> 0:10:16.400 Yeah, as lawyer said, Jim Comy denies the charges filed 0:10:16.440 --> 0:10:20.160 in their entirety. We look forward to vindicating him in 0:10:20.200 --> 0:10:22.720 the courtroom. I want to bring in Bloomberg News Justice 0:10:22.720 --> 0:10:27.280 Department reporter Chris Strome. He joins us from Washington, DC. Chris, 0:10:27.720 --> 0:10:32.040 a relatively short indictment. What exactly is James Comy alleged 0:10:32.320 --> 0:10:32.880 to have done? 0:10:34.080 --> 0:10:34.240 Well? 0:10:34.280 --> 0:10:35.080 The process? Here? 0:10:35.120 --> 0:10:38.079 Is highly unusual. The charges are highly unusual. There's two 0:10:38.200 --> 0:10:43.480 charges against Comy. It's for lying and obstructing a congressional 0:10:43.520 --> 0:10:48.000 proceeding related to testimony he gave in September of twenty twenty, 0:10:48.080 --> 0:10:50.520 which was just about five years ago, which was right 0:10:50.600 --> 0:10:53.720 up against the statute limitations for DOJ to go get 0:10:53.720 --> 0:10:54.400 these charges. 0:10:54.920 --> 0:10:56.360 So I got to say, all of us are I 0:10:56.400 --> 0:10:58.439 think doing a deep dive to try and remember if 0:10:58.640 --> 0:11:00.640 I can't even remember what happened on my so to 0:11:00.679 --> 0:11:03.160 think about what happened in five years ago. Although when 0:11:03.200 --> 0:11:05.559 you start doing it, you were like, oh, yeah, we 0:11:05.840 --> 0:11:07.760 day Monday was the Tailanell press conference. 0:11:08.120 --> 0:11:10.360 It was it was that's all I remember. 0:11:10.480 --> 0:11:11.520 Well done, well done. 0:11:11.760 --> 0:11:14.480 So but Chris take us back there and what it 0:11:14.600 --> 0:11:17.880 is that he is charged with lying about. 0:11:19.080 --> 0:11:19.320 Yeah. 0:11:19.360 --> 0:11:23.599 So, during the hearing, it was before the Senate Judiciary Committee, 0:11:24.480 --> 0:11:27.680 he was asked about a situation in which his deputy, 0:11:27.800 --> 0:11:31.400 Andrew McCabe had leaked information to the Wall Street Journal 0:11:32.080 --> 0:11:36.479 about Hillary Clinton, and Komy. 0:11:36.360 --> 0:11:39.360 Was asked if he stood by previous. 0:11:38.960 --> 0:11:43.000 Testimony he had given that he didn't authorize the leak, 0:11:43.200 --> 0:11:46.600 and he said he did. Now the Justice Department is 0:11:46.640 --> 0:11:51.200 trying to say that Komy wasn't telling the truth because 0:11:51.200 --> 0:11:54.520 he was involved in authorizing the leak. And it goes 0:11:54.600 --> 0:11:59.520 back actually to twenty sixteen when there was a dispute 0:11:59.600 --> 0:12:06.120 between Komy and his deputy Andrew McCabe regarding the leak. 0:12:06.559 --> 0:12:12.240 McCabe had said that Comy approved of the leak after 0:12:12.800 --> 0:12:15.640 the Wall Street Journal reported on it, and Kmy said 0:12:15.640 --> 0:12:19.760 he had no memory of that. The Justice Department Inspector 0:12:19.800 --> 0:12:23.440 General looked into this and issued a report that found 0:12:24.080 --> 0:12:29.960 that Komy was telling the truth and McCabe was lying 0:12:30.000 --> 0:12:36.200 about it. And so essentially Comy was reiterating that he 0:12:36.240 --> 0:12:39.040 had no knowledge of the leak, but the Justice Department 0:12:39.160 --> 0:12:42.280 is trying to say, well, Andrew McCabe said, you did 0:12:42.320 --> 0:12:45.840 have knowledge of the leak, and so therefore. 0:12:46.920 --> 0:12:48.800 We are going to charge you with lying. 0:12:48.960 --> 0:12:53.040 Now, the Justice Department might have some additional information, but 0:12:53.160 --> 0:12:57.560 this has been well investigated and to our knowledge, there's 0:12:57.640 --> 0:13:01.720 no new information that would that would prove Kmy was lying. 0:13:01.920 --> 0:13:05.000 So it raises the question and back to what Patrick Fitzgerald, 0:13:05.000 --> 0:13:08.120 the lawyer for James Comy, said, he denies the charges 0:13:08.200 --> 0:13:11.160 filed and we look forward to vindicating him in the courtroom. 0:13:11.200 --> 0:13:13.760 Does it make it too a courtroom. 0:13:14.080 --> 0:13:15.240 It's hard to know. At this point. 0:13:15.320 --> 0:13:18.800 Comy is going to have an initial appearance on October ninth. 0:13:19.720 --> 0:13:21.920 I'm sure that his lawyers are going to move to 0:13:22.200 --> 0:13:24.800 just dismiss the charges before they ever go to trial. 0:13:26.160 --> 0:13:31.320 Getting charges dismissed is very difficult, so it's you know, 0:13:31.679 --> 0:13:35.200 probably more likely that they will end up going to trial. 0:13:35.640 --> 0:13:38.439 I would expect Comy and his lawyers to call for 0:13:38.520 --> 0:13:41.400 a quick trial because they believe the facts are on 0:13:41.480 --> 0:13:43.480 their side and that Komy can get equitted. 0:13:43.880 --> 0:13:47.600 What about a history lesson for everybody, a civic lesson 0:13:47.600 --> 0:13:48.200 for everybody. 0:13:48.240 --> 0:13:49.920 I mean, do presidential. 0:13:49.440 --> 0:13:53.240 Powers extend to something like this and using the Justice 0:13:53.280 --> 0:13:56.400 Department to maybe go after presidential foes? 0:13:57.920 --> 0:13:59.920 Well, this has been one of the raging debates under 0:13:59.920 --> 0:14:03.040 the Trump administration, both the first Trump administration but definitely 0:14:03.080 --> 0:14:08.000 under this second administration. How far do Trump's powers go 0:14:08.160 --> 0:14:11.640 as president? Now, Trump will say that he controls the 0:14:11.720 --> 0:14:16.120 Justice Department, that he can order prosecutions, that he is 0:14:16.160 --> 0:14:20.680 the chief law enforcement officer. Historically, the Justice Department has 0:14:20.920 --> 0:14:24.680 maintained independence from the White House and from the president, 0:14:26.360 --> 0:14:28.720 but that's largely. 0:14:28.280 --> 0:14:34.040 Based on norms and traditional practices. 0:14:34.520 --> 0:14:39.400 There's no law or regulation that says the president can't 0:14:39.440 --> 0:14:40.880 interfere in prosecutions. 0:14:42.080 --> 0:14:45.760 Yeah, I guess I would say some presidential historians would 0:14:45.800 --> 0:14:48.640 also suggest that maybe a google the Watergate like at 0:14:48.640 --> 0:14:49.440 this point right. 0:14:49.800 --> 0:14:51.360 Well, that time we had a lot of pushback from 0:14:51.440 --> 0:14:54.360 Republican senators who made their way to the White House, 0:14:54.360 --> 0:14:56.480 And we haven't heard that this time. 0:14:56.320 --> 0:15:00.600 Around, right, So, like, we'll see, We'll just have to, 0:15:00.640 --> 0:15:02.360 I guess, kind of wait and see how this plays out. 0:15:03.520 --> 0:15:07.120 Interesting story, another one certainly on our mind. Chris, Thank 0:15:07.160 --> 0:15:09.760 you so much for running through it for us. Chris Strom, 0:15:09.840 --> 0:15:16.600 He's Justice Department. Justice Department reporter joining us from Washington, DC. 0:15:17.000 --> 0:15:19.800 Stay with us more from Bloomberg Business Week Daily coming 0:15:19.840 --> 0:15:20.760 up after this. 0:15:25.000 --> 0:15:28.840 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:15:28.920 --> 0:15:31.600 us live weekday afternoons from two to five eas during 0:15:31.840 --> 0:15:35.040 Listen on Apple Karplay and Android Auto with the Bloomberg 0:15:35.080 --> 0:15:37.800 Business app, or watch us live on YouTube. 0:15:39.000 --> 0:15:40.960 In the meantime, we continue to piece together the life 0:15:41.000 --> 0:15:44.240 of Jeffrey Epstein. Bloomberg News has gone through more than 0:15:44.240 --> 0:15:47.760 eighteen thousand emails from Epstein's personal Yahoo account that was 0:15:47.800 --> 0:15:51.440 obtained by Bloomberg News that cash revealing Carol a sweeping 0:15:51.520 --> 0:15:54.400 array of details about not just his public life, but 0:15:54.480 --> 0:15:55.800 his private life as well. 0:15:56.000 --> 0:15:58.840 Exactly we want to get into it. It is today's Bloomberg 0:15:58.920 --> 0:16:01.720 Big Take. Bloomberg News finance reporter Max Ableson part of 0:16:01.720 --> 0:16:06.080 the team who wrote it. He's here in studio, Max, 0:16:06.120 --> 0:16:08.600 so good to have you here. Another incredible read. It 0:16:08.640 --> 0:16:11.000 is among our most read stories on the Bloomberg First 0:16:11.000 --> 0:16:13.840 of all, step back. We've been covering this, right, these 0:16:13.840 --> 0:16:17.600 emails remind everybody, the emails that Bloomberg got access to 0:16:17.680 --> 0:16:18.840 what you guys have been going through. 0:16:19.000 --> 0:16:19.680 Yeah, that's right. 0:16:19.920 --> 0:16:21.920 It's been one of the highlights of my you know, 0:16:21.960 --> 0:16:23.960 twenty years in journalism to be a part of this 0:16:24.000 --> 0:16:28.080 team with Siria Matu and Jason Leopold and if Benny Morrison, 0:16:28.160 --> 0:16:28.760 many others. 0:16:29.080 --> 0:16:33.560 So, you know, Epstein who remains. 0:16:33.400 --> 0:16:36.640 So profoundly central to the public imagination and yet. 0:16:36.640 --> 0:16:37.800 Such a profound enigma. 0:16:38.680 --> 0:16:43.440 Bloomberg News obtained you know, thousands, more than ten thousand, 0:16:43.520 --> 0:16:46.080 more than eighteen thousand emails. And I want to be clear, 0:16:46.160 --> 0:16:49.760 these are these are private emails. These aren't things that have. 0:16:49.600 --> 0:16:51.840 Been recycled through. 0:16:52.160 --> 0:16:55.720 It's not things everyone knows about this new stuff and 0:16:55.960 --> 0:17:00.400 it's from it's from a private email dress actually, for example, 0:17:01.000 --> 0:17:03.240 where there was one email where someone says, listen, I 0:17:03.480 --> 0:17:06.119 need to talk to you about something private. What email 0:17:06.160 --> 0:17:08.200 would be good and he writes back and says this 0:17:08.240 --> 0:17:09.600 one to give. 0:17:09.480 --> 0:17:10.840 You a sense of what we're talking about here. 0:17:12.080 --> 0:17:15.479 And my colleagues, including Harry Wilson and others, did some 0:17:15.600 --> 0:17:18.600 really remarkable reporting on Peter Mendelssohn, who lost his job 0:17:18.640 --> 0:17:20.880 as the UK bassador of the United States. 0:17:20.560 --> 0:17:22.200 Exactly in the week of their story. 0:17:23.480 --> 0:17:27.080 And Avin Benny Benny Morrison and Jason Leopold have done 0:17:27.560 --> 0:17:29.720 and others had done great work on Gillian Maxwell and 0:17:30.119 --> 0:17:33.640 really carefully showing that her relationship to Epstein was just 0:17:33.640 --> 0:17:36.120 just much deeper and that partnership was much closer than 0:17:36.160 --> 0:17:40.359 either either have had admitted. And what this story, which 0:17:40.400 --> 0:17:43.840 which I wrote with this this wonderful team, what this 0:17:43.880 --> 0:17:46.439 story is about is, in some ways, I hope you know, 0:17:46.480 --> 0:17:47.199 not the usual. 0:17:47.240 --> 0:17:48.720 You know, Epstein is of course, in some. 0:17:48.680 --> 0:17:51.480 Ways a story about sex and sex crimes. But I 0:17:51.720 --> 0:17:53.639 think what you'll find is that what this story is 0:17:53.640 --> 0:17:55.880 about is about what I what I cover. It's it's 0:17:55.880 --> 0:17:57.760 really a story about money and a storry about power 0:17:57.760 --> 0:18:00.440 and a story about connections. And that's how we talked 0:18:00.440 --> 0:18:03.080 about it with our editors, including Lauren Eder. 0:18:04.119 --> 0:18:05.720 And it's a but can I just pump in in 0:18:05.800 --> 0:18:08.040 that there's a bunch of people pictures, and I'll be 0:18:08.040 --> 0:18:08.600 honest with you, I. 0:18:08.600 --> 0:18:11.160 Think when we both I didn't recognize most of them. 0:18:11.200 --> 0:18:13.159 Well, that's what I think was so notable about this. 0:18:13.240 --> 0:18:15.040 I mean, there are certainly the names that have been 0:18:15.040 --> 0:18:17.720 associated with Epstein for years, like Alan Derschowitz, for example, 0:18:17.800 --> 0:18:19.960 and there's new information, new emails from there in a 0:18:20.119 --> 0:18:23.679 conversation that your team had with him about that. But 0:18:23.680 --> 0:18:26.600 there's also a name that I'd never seen before, Mary Spaeth, 0:18:27.240 --> 0:18:30.120 somebody who's a crisis strategist. She was director of media 0:18:30.119 --> 0:18:33.120 relations at one time for the White House under Ronald Reagan. 0:18:33.840 --> 0:18:35.639 What did she what role did she serve? 0:18:36.160 --> 0:18:36.360 Well? 0:18:36.480 --> 0:18:38.720 Thanks for that question, because I think what's special about 0:18:38.760 --> 0:18:41.960 the piece and I hope viewers and listeners check it out. 0:18:42.280 --> 0:18:45.400 I think what makes it a valuable piece of journalism, 0:18:45.480 --> 0:18:47.760 especially at this moment when Epstein. 0:18:47.800 --> 0:18:50.919 Is really in the news and is all of a sudden. 0:18:50.920 --> 0:18:53.720 It has gone from being an exclamation point to a 0:18:53.720 --> 0:18:55.520 real question mark. And there are a lot of questions 0:18:55.560 --> 0:18:56.920 about what's going to happen now over the next few 0:18:56.960 --> 0:18:59.960 days and weeks and months with Epstein and his files. 0:19:01.119 --> 0:19:03.840 What our story is about and why Mary Spaith comes 0:19:03.920 --> 0:19:08.480 up is that it's about the depth and the breadth 0:19:08.560 --> 0:19:11.600 of his relationships. And you know, it is not a 0:19:11.600 --> 0:19:14.720 story about Republicans versus a story about democrats. It's a 0:19:14.720 --> 0:19:17.760 story about powerful people, and it's a story about different 0:19:17.880 --> 0:19:20.880 kinds of power. It's a story about academics and researchers, 0:19:20.920 --> 0:19:24.040 people who made it make it into high elite echelons 0:19:24.080 --> 0:19:29.160 of intellectual life. It's about people who offer, like Mary 0:19:29.160 --> 0:19:32.800 Spaith offers a basically strategy for people who are in trouble, 0:19:32.840 --> 0:19:36.520 crisis strategy, public relations. And it's a story about counselors 0:19:36.600 --> 0:19:42.920 and lawyers. And to answer your question about Mary, there 0:19:43.000 --> 0:19:45.760 was a point, believe it or not, where investigators are 0:19:45.760 --> 0:19:48.480 closing in Jeffrey Epstein. This is early two thousand and eight. 0:19:48.720 --> 0:19:50.800 You know, he's about to go to jail for the 0:19:51.440 --> 0:19:53.280 It's like about a year, it's a little bit longer 0:19:53.280 --> 0:19:55.560 than a year. And after that he's a free man 0:19:55.720 --> 0:19:57.640