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Speaker 2: Here at the Outpost in Washington. We did make it
Speaker 2: to the end of the week. An interesting one here
Speaker 2: with the PCE data. Not really interesting the word I'm
Speaker 2: sure the White House is using as it looks at
Speaker 2: this repeated reminder. Now three months in the making PCE
Speaker 2: hotter than they wish, pushing back expectations for FED rate cuts,
Speaker 2: of course, one of which Joe Biden himself predicted by
Speaker 2: the end of the year. The headline on the terminal
Speaker 2: inflation data reinforce Powell shift toward higher for longer, so
Speaker 2: you can come up with your own theory as to
Speaker 2: why stocks are higher. But it's not lifting moods in
Speaker 2: the Biden campaign. As I turned to another headline on
Speaker 2: the Terminal from our friend Gregory Cordy, inflation overshadowing US
Speaker 2: economic resilience, hurting Biden and he's with us right now.
Speaker 2: Gregory Cordy here in Washington. Goodness us her. This is
Speaker 2: sort of the ultimate good news is bad news story,
Speaker 2: isn't it.
Speaker 3: Yeah, So we're having this sort of soft landing, but
Speaker 3: it's such a soft landing that it's sort of excruciating
Speaker 3: to watch the economy grow a little slower than expected
Speaker 3: while inflation remains a little higher than expected. And it's
Speaker 3: really put President Joe Biden in this sort of vice
Speaker 3: where the economy is betwixt and between, and when people
Speaker 3: get conflicting signals about the economy, they tend to be
Speaker 3: negative about. Uncertainty is bad for markets, and it's bad
Speaker 3: for voters who want to kind of see the light
Speaker 3: at the end of the tunnel and they're not quite
Speaker 3: seeing it by the end of this year.
Speaker 2: Well, that's right, and that means, you know, potentially higher
Speaker 2: for longer, which is a problem for a lot of
Speaker 2: people for a lot of reasons when they're borrowing money.
Speaker 2: It certainly has an impact on the housing market here,
Speaker 2: young people asking for a break when it comes to debt.
Speaker 2: Joe Biden, as I mentioned, predicted a rate cut. And
Speaker 2: I know that the White House constantly differs, doesn't want
Speaker 2: to talk about the FED and we try Jared Bernstein
Speaker 2: will be on later.
Speaker 4: Don't tell them. I'll probably try. But they've got to have.
Speaker 2: Their own dot plot inside the West Wing, just like
Speaker 2: they do in the Biden campaign, and they were banking
Speaker 2: on that, not just a soft landing, but to be
Speaker 2: able to say, hey, we licked inflation, and that's starting
Speaker 2: to look out of reach.
Speaker 4: Yeah.
Speaker 3: One of the biggest problems is that the second quarter
Speaker 3: of an election year, so right about now, is when
Speaker 3: voters tend to kind of solidify their opinions about the
Speaker 3: economy that they take with them to November. The perception
Speaker 3: always lags the reality. So if the reality is uncertain, now,
Speaker 3: what's it going to be in November? And if so,
Speaker 3: if you're a Biden campaign, you want some good news
Speaker 3: not just by November, you want it pretty soon. So
Speaker 3: if people have a time to really digest that news
Speaker 3: and feel it by the time they go into the
Speaker 3: voting booth in November.
Speaker 2: In the meantime, we tend to talk about not economic
Speaker 2: data but the political campaign. They do have an opportunity
Speaker 2: for the next six to eight weeks. The other guy
Speaker 2: is locked in a courtroom. To what extent can Joe
Speaker 2: Biden leverage that he's been certainly traveling a lot more
Speaker 2: while to reinforce the split screen.
Speaker 3: Yeah, it's really interesting because Biden has been, and we
Speaker 3: remember this from twenty twenty, a bit of a homebody,
Speaker 3: remember the Basement campaign, and in common presence, tend to
Speaker 3: wage the Rosegarden campaign, do a lot of official announcements,
Speaker 3: but stay at the White House. And really the amount
Speaker 3: that President Biden is traveling now you have to think
Speaker 3: that it's a deliberate response to the fact that Trump
Speaker 3: can't travel and taking avantage of that. He's in not
Speaker 3: just going to swing states, but he's in New York
Speaker 3: this week. He's doing media. He's doing not just the
Speaker 3: sort of campaign thing, but he's he's trying to project
Speaker 3: a very sort of energetic presidency.
Speaker 2: We should mention the fact. And for our satellite radio listeners.
Speaker 2: On another channel, he's doing a sit down interview with
Speaker 2: Howard Stern today.
Speaker 3: Yeah, it just concluded. It was an hour and thirteen minutes,
Speaker 3: no commercial interruptions. Yes, that's the way that on Howard
Speaker 3: Stern dive and it was a deep dive into his
Speaker 3: life story, his loss of his wife, the loss of
Speaker 3: his son. Does very emotional interview it's part of this
Speaker 3: kind of I've old enough to remember this Arsenio strategy.
Speaker 3: Remember when Where's the Saxophone went on the Arsenio Hall
Speaker 3: Show and everybody at the time said, you can't do that.
Speaker 4: Oh, that was a big thing.
Speaker 3: That's you know, there's a there's rules of political decorum,
Speaker 3: and you have to do interviews with professional journalists.
Speaker 4: Now they're announcing campaigns on late nights exactly, And so
Speaker 4: Howard Stern has an audience that does not over lap
Speaker 4: with entirely with the Bloomberg audience.
Speaker 5: Right.
Speaker 3: There's sure there's an overlap set that them then diagram,
Speaker 3: but it's not exactly the same audience. So he's trying
Speaker 3: to get that the listeners who might not pay attention
Speaker 3: to politics. And Stern was a very friendly interview. It's
Speaker 3: interesting because he enjoyed a very cozy rapport with Trump
Speaker 3: for a decade.
Speaker 4: Regrets, isn't that interesting?
Speaker 2: Great to see it come back more often, Gregor recordy
Speaker 2: and find the story inflation overshadowing economic resilience not what
Speaker 2: they want to be reading, but likely are this weekend
Speaker 2: in the Biden White House. Then again, he's got a
Speaker 2: comedy routine tomorrow and I'm trying to keep it light.
Speaker 2: It's the White House correspondence to Dinner weekend, and I'm
Speaker 2: sure on Monday will be playing tape of some of
Speaker 2: the routine.
Speaker 4: I'm Joe, Matthew and Washington.
Speaker 2: Glad you're with us today on Balance of Power here
Speaker 2: on Bloomberg Radio, on the satellite and on YouTube, where
Speaker 2: you can find us right now search Bloomberg Global News
Speaker 2: and find our live feed. One of the other top
Speaker 2: stories that were fallowing today because we've heard so much
Speaker 2: little about it, is the beginning of construction of this
Speaker 2: temporary peer, the floating peer, to bring humanitarian aid to Gaza.
Speaker 2: We've got news today and the Washington Post of fascinating
Speaker 2: write up not only on the fact that this has begun,
Speaker 2: but it's already becoming a target, or at least one
Speaker 2: that militants would like to make a target. They launched
Speaker 2: mortars at Israeli forces in Gaza, according to the Post,
Speaker 2: as those forces prepared for the arrival of goods. The
Speaker 2: attack on this marshaling area did not cause damage to
Speaker 2: the US, as we're building all this outside of mortar
Speaker 2: range hundreds of yards off the coast. But the Pentagon's
Speaker 2: talking about this already, pat Ryder making it very clear
Speaker 2: that the risks are high. Security analysts have been talking
Speaker 2: about any number of threats, speedboats packed with explosives, divers
Speaker 2: swimming with mines, and then of course incoming rockets. All
Speaker 2: of this could become a very real problem when they
Speaker 2: need to connect the bridge, the peer to land. And
Speaker 2: it's something we wanted to talk about with David Harden.
Speaker 2: He's managing director at Georgetown Strategy Group, former USAID Mission
Speaker 2: director to the West Bank and Gaza. He knows about
Speaker 2: this firsthand, former senior advisor to President Obama, special envoy
Speaker 2: from Middle East. Piece David, it's great to see you.
Speaker 2: Thank you for coming to talk to us today on Bloomberg.
Speaker 2: Is this going to be a major story and in
Speaker 2: a bad way in a couple of weeks when this
Speaker 2: temporary peer is within range?
Speaker 6: It could be.
Speaker 7: I mean it could be, but I like the peer,
Speaker 7: and I may be one of the few humanitarians or
Speaker 7: the one of a few military strategists who does what
Speaker 7: we ultimately need to do. And just look at this
Speaker 7: from an economics perspective, what needs to happen is that
Speaker 7: all crossings need to be open as much as possible
Speaker 7: on a most predictable basis, with as much food flooding
Speaker 7: the market as possible.
Speaker 8: If you are.
Speaker 7: Able to open multiple entry points, then no one entry
Speaker 7: point becomes is that particularly important? And so you know,
Speaker 7: first and foremost the land crossings need to work, they
Speaker 7: need to work more robustly, and that would be in
Speaker 7: the north areas and cum Schlom in the south, and
Speaker 7: then Rafa.
Speaker 8: On the Egyptian border.
Speaker 7: But if you were able to also get a peer
Speaker 7: going in, then you might actually be able to flood
Speaker 7: the zone with more food, more basic commodities, lowering the price,
Speaker 7: lowering the risk, lowering the chaos.
Speaker 6: But it's true the peer is a potential target.
Speaker 2: Of course, ill conceived from the start, is how Senator
Speaker 2: Roger Wicker, Senate Armed Service Committee's ranking member here, this
Speaker 2: is becoming a political issue to what extent and will
Speaker 2: its success resonate here in Washington. It's success or not
Speaker 2: on a political level.
Speaker 7: I mean, clearly a failure is going to accrue to
Speaker 7: Biden just like a success would. I disagree though with
Speaker 7: the notion that's an ill conceived idea.
Speaker 8: I mean I like it another for a geopolitical reason,
Speaker 8: which is look.
Speaker 7: Facts on the ground matter in the Middle East, and
Speaker 7: the Israelis are masters that are having facts on the ground,
Speaker 7: whether it's settlements or checkpoints or roads in the West
Speaker 7: Bank or whatever. The Palestinians never get facts on the ground.
Speaker 7: Putting a peer that would take basic commodities, that would
Speaker 7: allow for basic commodity imports is a fact in their favor.
Speaker 8: The Israelis control.
Speaker 7: That maritime zone, so let's be real crystal clear about that.
Speaker 7: They've controlled it for the last fifteen years and they've
Speaker 7: been able to lock it down.
Speaker 6: It doesn't mean that they couldn't an.
Speaker 8: Attack, of course they could. But back to my bigger point, right,
Speaker 8: if there.
Speaker 7: Are more crossings, and again let's talk about land crossings,
Speaker 7: then there is then no one particular access point is
Speaker 7: that important.
Speaker 6: So if the pier is the only way to get
Speaker 6: basic commodities in.
Speaker 8: It's going to be attacked.
Speaker 6: If the pier is one of five different ways of
Speaker 6: getting basic commodities in, it doesn't matter so much.
Speaker 2: What's your worry right now, Dave? When you see headlines
Speaker 2: like Israel stepping up cross border strikes on Hesbola to
Speaker 2: the north, the early stages, it seems of an invasion
Speaker 2: of Rafa. What is it that keeps you up at
Speaker 2: night right now when we're in such a tenuous moment
Speaker 2: in our relationship with Israel.
Speaker 8: Yeah, I mean.
Speaker 7: The Israeli Iranian play seems to have stabilized for the moment, Okay,
Speaker 7: and that's good.
Speaker 6: I mean you should expect continued has bull of strikes.
Speaker 7: The thing that really deeply worries me is the famine risk,
Speaker 7: and you know, and that would include an attack on
Speaker 7: Rafa that just exacerbates to humanitarian catastrophe. The Israelis are
Speaker 7: great at saying, well, we've killed thirteen thousand Hamas fighters,
Speaker 7: we're ahead of the game, and there's only four battalions
Speaker 7: left in Rafa.
Speaker 6: You know, that all may be true, and it also
Speaker 6: may be immterial, because what we don't know is maybe.
Speaker 7: They've killed thirteen thousand Hamas fighters, but fifty thousand.
Speaker 6: People have lined up the joint and perhaps they're not
Speaker 6: as trained.
Speaker 7: Or they're not as sophisticated, but the pipeline is open.
Speaker 6: That very well could be the case. Further, I think the.
Speaker 8: Israelis have really lost in the pr war.
Speaker 7: And so look, Hamas is a terrorist organization and they
Speaker 7: have killed Americans.
Speaker 6: And yet you know, for right a wrong, and in
Speaker 6: a sense.
Speaker 8: It doesn't matter for this point, for.
Speaker 7: Right or wrong, the American college campuses are ablaze with
Speaker 7: Hamas supporters.
Speaker 9: Now, that just goes to show you that after more
Speaker 9: than six months of fighting, Disraelies may not.
Speaker 7: Have degraded the elements of Hamas sufficiently enough to defeat them.
Speaker 6: And they may never do that. And so when you
Speaker 6: add in.
Speaker 9: The risk of famine, which I think the administration has
Speaker 9: already said is ongoing, then you're just looking at generations
Speaker 9: of grievances and the sons and the grandsons, and the
Speaker 9: daughters and the granddaughters that the current fighters are going
Speaker 9: to be fighting again.
Speaker 8: None of this occrues to the US Benefit day.
Speaker 2: If I only have a minute left, if you were
Speaker 2: still in your role as a senior advisor to the president,
Speaker 2: would you tell him to address these young people on
Speaker 2: campuses directly?
Speaker 7: I mean, the election is pretty profound for America, and
Speaker 7: it's important that in my view, you know that Gaza
Speaker 7: is put in the context of a whole array of
Speaker 7: issues that are consuming America at the moment, and you
Speaker 7: know he's not going to win in a debate on
Speaker 7: you know, at Columbia for sure, but to engage and
Speaker 7: to understand h and to understand the legitimate aspirations of
Speaker 7: the Palestinian people too right, I mean.
Speaker 6: We could be on the wrong side.
Speaker 8: Let's be clear about this.
Speaker 6: The Palestinians are going to get a state.
Speaker 8: We just blocked them.
Speaker 7: In the u n you know, are We're going to
Speaker 7: block them forever because because this will propel terrorism and
Speaker 7: and it's a fundamental risk.
Speaker 8: To his election campaign.
Speaker 6: So yeah, I think he's he's really facing kind.
Speaker 7: Of an ambiguity, is strategic ambiguity with no clear path forward,
Speaker 7: and I I feel like he's at pretty profound risk geopolitically,
Speaker 7: national security wise, daplastically.
Speaker 4: And David, I'm sorry I don't have more time for you.
Speaker 2: David Harden. Come sit with us in studio next time.
Speaker 2: It's great to have you with us. I'm Joe Matthew.
Speaker 2: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
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Speaker 10: I'm Kaylee lines alongside Joe Matthew live in Washington, d C.
Speaker 10: Where we know President Biden always tries to put a
Speaker 10: positive spin on economic data when we get it. For
Speaker 10: a while, Joe, it did seem that the data was
Speaker 10: trending more in the favor of an incumbent president, with
Speaker 10: growth in the labor market hanging in their inflation was cooling.
Speaker 10: It feels that maybe that is happening to a lesser
Speaker 10: degree now. It wasn't too hot today, but it was
Speaker 10: still slightly hot, hotter than expected at least one of
Speaker 10: the metrics, And.
Speaker 2: There's thoughts that revisions could be a greater problem as
Speaker 2: we seem to be stuck here. If plateauing is the
Speaker 2: word to use, I'm not sure. I guess that's better
Speaker 2: than continuing to rise. But Anna Wong is with us
Speaker 2: from Bloomberg Economics for her take is Anna is frequently
Speaker 2: the contrarian on some of these issues and not always
Speaker 2: in line with the conventional wisdom on Wall Street.
Speaker 4: Good to see you, Anna, Does this.
Speaker 2: Confirm the fears that so many people had yesterday because
Speaker 2: it's really being kind of snuffed out by strong earnings
Speaker 2: and a different attitude today.
Speaker 7: In the market.
Speaker 11: Yeah, it's actually better than what people feared yesterday. I
Speaker 11: was here in this program yesterday and I said that
Speaker 11: the Wall Street was reacting to yesterday's GDP implied inflation,
Speaker 11: thinking that today they're going to see core PCEE going
Speaker 11: at zero point four to eight. Instead, we got zero
Speaker 11: point three to two, which was what we in line
Speaker 11: with what we were expecting yesterday. And this is why
Speaker 11: today we see that two year yields and the ten
Speaker 11: year yields actually came down because it's not as bad
Speaker 11: as still it's uncomfortably hot.
Speaker 10: Well, and I guess that kind of brings us to
Speaker 10: this question as to whether or not not being as
Speaker 10: bad as it could have been makes it really good
Speaker 10: news if you're the Federal Reserve thinking about how tight
Speaker 10: policy is going to need to stay for how much longer,
Speaker 10: if you're a market wondering when the Fed is going
Speaker 10: to be making those decisions that they can ease policy. Ultimately,
Speaker 10: this doesn't really change what we thought yesterday in terms
Speaker 10: of what the Fed will do.
Speaker 11: Right, Yeah, exactly, Kelly. So the big picture is that
Speaker 11: inflation is stickier than the FED wants. And next week
Speaker 11: we're gonna have Powell probably coming out to make a
Speaker 11: big hawkish pivot. And the reason why we expect that
Speaker 11: big hawkish pivot from Powell next week is that, you know,
Speaker 11: the other day one of the most dubvish member of
Speaker 11: the FOMC, Austin Goilsby, said that the FED will have
Speaker 11: to recalibrate the strategy. So if even the most hawkish
Speaker 11: member said they need to reac calibrate, it means that
Speaker 11: the whole committee is likely going to signal something big
Speaker 11: next week.
Speaker 4: Wow. Fascinating.
Speaker 2: So the news conference, if not the statement itself, the
Speaker 2: language might change in the statement. What would be j
Speaker 2: Powell's posture here, because he seems to have gotten to
Speaker 2: the point where he wanted to to convince the markets
Speaker 2: that we're not cutting anytime soon.
Speaker 11: Yeah. I think Powell could even briefly hinted that maybe
Speaker 11: they won't cut rates and in fact a rate hike
Speaker 11: could be an option on the table. I think that
Speaker 11: would be enough to send the market.
Speaker 4: We'll go over well.
Speaker 10: Yeah, all right. Anamal, chief US economist at Bloomberg Economic,
Speaker 10: has been a busy couple days for you and it's
Speaker 10: certainly going to be busy next week. Thank you so
Speaker 10: much as always, and of course, Joe, as we've discussed
Speaker 10: on this program in the last several weeks, Joe Biden
Speaker 10: has not actually proven that reluctant to talk about FED
Speaker 10: policy recently, standing by his idea that the FED will
Speaker 10: cut at least once this year, maybe just a month delayed.
Speaker 4: In his word, we planned back that sape.
Speaker 10: Well, yeah, I guess.
Speaker 4: We'll see about that.
Speaker 10: And we know that Donald Trump and his administration was
Speaker 10: very vocal about.
Speaker 4: What the federating at him every day. You see this
Speaker 4: Wall Street Donald story.
Speaker 2: Yes, indeed the Trump administration if there's another reshaping the FED.
Speaker 2: They're talking about allies of Donald Trump though, they're having
Speaker 2: these meetings about how they could sort of dismantle things
Speaker 2: and have the president himself for herself play a role
Speaker 2: in sending interest rates. But I wonder if Donald Trump
Speaker 2: himself is involved in those conversations. The story didn't seem
Speaker 2: to indicate knowledge, So we'll look.
Speaker 10: For more clarity that we might not be getting it
Speaker 10: today because Donald Trump is a bit tied up at
Speaker 10: the moment. He is in court in New York in
Speaker 10: the hush money case where David Pecker is being cross
Speaker 10: examined on the stand. It seems that his defense teams
Speaker 10: trying to make it trying to make the case that
Speaker 10: David Pecker was not just trying to help Trump politically,
Speaker 10: but potentially help the playboy model in question, Karen McDougal
Speaker 10: reset her career. So that is where we begin now
Speaker 10: with Dave Ehrenberg, who's the state attorney down Palm Beach.
Speaker 10: We always love to have Dave on the show. Welcome
Speaker 10: back to Balance Power on TV and radio. Dave, just
Speaker 10: walk us through how you are reading the days of
Speaker 10: testimony that we have seen thus far from mister Pecker,
Speaker 10: and how you think the case is going so far
Speaker 10: for the defense on the one hand, for prosecutors on
Speaker 10: the other.
Speaker 12: Well, it's great to be back with you. I think
Speaker 12: it's going well for prosecutors because Pecker is able to
Speaker 12: corroborate Michael Cohen's story that he will tell. And Michael
Speaker 12: Cohen has been a very important but flawed witness because
Speaker 12: he had a prior conviction for perjury among other things,
Speaker 12: even though he was lying on behalf of Donald Trump.
Speaker 12: But it's important to get corroboration and Packer was part
Speaker 12: of Trump's inner circle during his campaign, and the key
Speaker 12: for Pecker is also to set the stage for what
Speaker 12: was going on. This wasn't a one off, This wasn't
Speaker 12: a one time deal with Stormy Daniels. This was a
Speaker 12: coordinated effort to catch and kill stories that would be
Speaker 12: damaging to Donald Trump for the sake of his election.
Speaker 12: It was done right before the election. There was a
Speaker 12: non disclosure agreement with that doorman that expired right after
Speaker 12: the election. There was the payment to Stormy Daniels two
Speaker 12: weeks before the election. So this also undercuts Donald Trump's
Speaker 12: certain defense that this wasn't for the election. This was
Speaker 12: just to help Trump with his wife Milanya to keep
Speaker 12: this stuff secret. So it was to protect his marriage. No,
Speaker 12: Pecker exposes the falsity of that, because it was, according
Speaker 12: to his testimony, all about the election.
Speaker 4: So, David, it's great to have you. Good to see you.
Speaker 4: When are we getting a ruling on this gag order?
Speaker 4: We have to wait for another hearing.
Speaker 2: We thought we had a hearing, but then I guess
Speaker 2: five more violations since then. It almost seems like a strategy.
Speaker 2: As long as Donald Trump continues to violate the gag order,
Speaker 2: they'll never be able to enforce it.
Speaker 4: Yeah.
Speaker 12: Donald Trump supporters say that he's being treated differently than
Speaker 12: everyone else, and I agree, but not for the reasons
Speaker 12: they say. I think he's being treated better than others, because, Joe,
Speaker 12: if you and I were out there bashing the judge
Speaker 12: and violating his orders, we would be locked up yesterday.
Speaker 12: I mean, we would be wearing an orange jumpsuit and
Speaker 12: steel bracelets. But Donald Trump is able to do these
Speaker 12: things because judges don't want to appear political and they
Speaker 12: want to show their even handed so they bend over
Speaker 12: backwards to give him the deference, the grace to continue
Speaker 12: doing this, and at most he'll get hit with the fine.
Speaker 12: Do not expect that he will be incarcerated pre trial
Speaker 12: because of his words, no matter what he says.
Speaker 10: Okay, well, what about post trial, Dave? I mean, ultimately,
Speaker 10: when we're considering the very jury going to decide whether
Speaker 10: or not to convict him of these charges. These are
Speaker 10: felony charges, thirty four of them, maximum penalty of four
Speaker 10: years in prison for a class E felony. Do you
Speaker 10: think realistically that will ever happen, that we would see
Speaker 10: Donald Trump behind bars?
Speaker 12: Unlikely? I think he would get either probation, which he's
Speaker 12: eligible for there is no mandatory minimum with these charges,
Speaker 12: or perhaps he gets some version of house arrests. I
Speaker 12: cannot envision the Secret Service taking up shop in the
Speaker 12: cell next to Donald Trump in New York, especially because
Speaker 12: this case, although I do think the prosecution is a
Speaker 12: good case, on appeal, it could get a little shaky
Speaker 12: because there's some uncharted territory here legally speaking as to
Speaker 12: whether you can use the second statute, which appears to
Speaker 12: be a state election conspiracy statute, to elevate a state
Speaker 12: misdemeanor to a state felony when that other statute involves
Speaker 12: campaign finance stuff, And can the state regulate campaign finance
Speaker 12: when that's a federal election. Wouldn't they be preempted by
Speaker 12: federal law? These are the kind of arguments that Trump's
Speaker 12: lawyers will be certain to make on appeal, and I
Speaker 12: think Trump has a better chance on appeal than he
Speaker 12: has in this current trial, where I think it's probable
Speaker 12: he's going to be found guilty.
Speaker 4: Fascinating Dave.
Speaker 2: I was talking to June Grosso a little bit earlier
Speaker 2: about the security that's afforded the witnesses high profile witnesses
Speaker 2: like Michael Cohen and Stormy Daniels. This is going to
Speaker 2: take a whole take on a whole new look and
Speaker 2: feel when we see these two individuals specifically, and I'd
Speaker 2: say even most, especially Stormy Daniels taking the stand, and
Speaker 2: it's going to be here a pin drop. The kind
Speaker 2: of stories that she's going to be telling will be explosive.
Speaker 2: It's one thing to be in the courthouse. What kind
Speaker 2: of security are they afforded while they're in New York
Speaker 2: for this whole experience.
Speaker 12: Well, the security would be pretty much their own that
Speaker 12: if they would have to come up with I don't
Speaker 12: see that none. Yeah, the prosecutors will take care of
Speaker 12: them while they're testifying and around the time they're going
Speaker 12: to the courthouse back and forth. But after it's over,
Speaker 12: after they testifier, before it's up to them. And that's
Speaker 12: the scary thing. That's why you have a gag order,
Speaker 12: because you don't want Trump to rile up his very
Speaker 12: aggressive masses. He's got some real hardcore supporters who will
Speaker 12: show up at Barack Obama's Georgetown condo with a van
Speaker 12: full of guns and ammunition after Trump docks is the
Speaker 12: former president so we've seen this before. We saw it
Speaker 12: on January sixth. So yeah, it's your right to be
Speaker 12: concerned about their safety. And that's why the judge should
Speaker 12: enforce these gag orders more strictly, because you don't want
Speaker 12: him tempting to tamper with witnesses.
Speaker 10: Well, on the subject of witnesses, Dave, it's also worth
Speaker 10: pointing out that Donald Trump is indicated he may testify
Speaker 10: in his own defense at some point, not just other
Speaker 10: witnesses that will take the stand. If you were on
Speaker 10: the prosecution team or on the defense team, how would
Speaker 10: you feel about Donald trump testimony As these trial weeks
Speaker 10: go on.
Speaker 12: There is zero chance that Donald Trump will be taking
Speaker 12: the stand. I know he's saying he's going to, but
Speaker 12: that's for public consumption. That's for the benefit of his
Speaker 12: team of his supporters, so that they say, yes, he's
Speaker 12: got nothing to high and then I'll find a reason
Speaker 12: why he's not taking the stand. If he takes the stand,
Speaker 12: he's subject to a withering cross examination. He'll have to
Speaker 12: deal with the embarrassing details of the Stormy Daniels relationship,
Speaker 12: and he'll have all the stuff that's going to come
Speaker 12: in about for example, the civil fraud trial that he
Speaker 12: was just found guilty of up there in New York.
Speaker 12: I mean things that will embarrass him he will not
Speaker 12: want to respond to. And if he'd he does respond
Speaker 12: and lies, he could be charged for that. So he'd
Speaker 12: be walking into a perjury trap. His lawyers will not
Speaker 12: let him take the stand. Donald Trump knows better. Right now,
Speaker 12: it's all bluster. Don't believe the hype.
Speaker 2: Who's the slam dunk in our remaining moment here, Dave,
Speaker 2: Who's the slam dunk witness? They've been trying very hard
Speaker 2: to discredit Michael Cohen? Is it Stormy Daniels herself?
Speaker 12: No, I'm gonna go off the board here. It's not
Speaker 12: Stormy Daniels, not Karen mcdom, not Michael Cohen. They're all
Speaker 12: They're all important witnesses, but they have somewhat of an
Speaker 12: acc of grind. You know who doesn't have an acc
Speaker 12: of grind? Joe Hope Hicks. Hope Hicks was in the
Speaker 12: room where it happened. She was on Air Force one
Speaker 12: steaming his clothes while Trump was still wearing them. I mean,
Speaker 12: she's privy to a lot of private conversations, and she's
Speaker 12: a Trump loyalist and she cooperated with the grand jury.
Speaker 12: She's gonna be brought in for corroborations. That's gonna be
Speaker 12: musty TV, even though there are no cameras in the courtroom.
Speaker 12: But at least maybe people can watch us talk about
Speaker 12: it afterwards, because is when Trump sees one of his
Speaker 12: most loyal aids up there to corroborate Michael Cohen's testimony.
Speaker 12: I think that's going to be the big thing, So
Speaker 12: watch for that.
Speaker 4: Incredible. It's always great to have Dave Ahrenberg. Good to
Speaker 4: see you. Dave. Let us know when you're back in town.
Speaker 2: He's Palm Beach County State Attorney, reinforcing the drama, Kayley
Speaker 2: in this case that typically does not need a lot
Speaker 2: of reinforcement. If there's one thing we have in ample supply,
Speaker 2: it's the drama in New.
Speaker 10: York, certainly, and some of that is brought in and
Speaker 10: out of the courtroom in front of the cameras. When
Speaker 10: Donald Trump speaks. We did hear from him, by the
Speaker 10: way earlier today, because it's not just a trial day
Speaker 10: for Donald Trump, it's also his wife's birthday. This is
Speaker 10: what he said about that.
Speaker 9: I want to start by wishing my wife Malania, very
Speaker 9: happy birthday.
Speaker 8: He nice to be with her, but I'm at a
Speaker 8: court house for a rig drive. Terrible, but we're doing
Speaker 8: very well in this rig drift.
Speaker 4: Everybody knows yesterday was a big day, but I.
Speaker 6: Do have to begin my wishing happy birthday.
Speaker 2: Happy birthday, so the former First Lady, who we don't
Speaker 2: see very often with Donald Trump, but nice of him
Speaker 2: to mention Milania as we assembled our panel, just for
Speaker 2: a couple of minutes here, want to have Rick Davis
Speaker 2: and Jeanie Shanzeo each take a swing at what we
Speaker 2: heard and we'll have a deeper dive coming up here
Speaker 2: on balance of power, our signature panel with us, Rick,
Speaker 2: what do you think after hearing from Dave Ehrenberg and
Speaker 2: what we're about to experience the next couple of weeks
Speaker 2: for someone who's trying to be elected again to the
Speaker 2: White House.
Speaker 13: Yeah, I can't even fathom the campaign disarray around having
Speaker 13: your candidates sitting in the courthouse, you know, four days
Speaker 13: a week with Wednesdays off, and trying to beat out
Speaker 13: some kind of message each day. It's it's just intolerable
Speaker 13: and there's no good news coming out of this right
Speaker 13: you'd have to dig for the pony to find a
Speaker 13: positive news story out of these trials.
Speaker 10: Happening right now for him, well, Genie Rick mentions he's
Speaker 10: stuck in court four days a week. He does have
Speaker 10: Wednesdays off. Reportedly he spent this Wednesday this week his
Speaker 10: day off from court golfing at his club in Bedminster.
Speaker 10: So what do we do with that information?
Speaker 14: Yeah, we thought maybe they'd sneak in a campaign event.
Speaker 14: They did not. You know, it's fascinating to me to
Speaker 14: hear him wish you a happy birthday to his wife,
Speaker 14: the former First Lady, Happy birthday, but then he slips
Speaker 14: right in there to calling the trial rigged, rigged, rigged.
Speaker 14: He simply cannot control himself or help himself, and he's
Speaker 14: walking dangerously close to more and more violations of this
Speaker 14: gag order, which we still don't have a ruling on
Speaker 14: by the judge. And all of this makes it not
Speaker 14: just a headache for the campaign, which is big, but
Speaker 14: for his attorneys as well. I mean, we don't even
Speaker 14: know the next witnesses because he's constantly attacking them. The
Speaker 14: prosecution won't reveal the list, so it's a it's a
Speaker 14: nightmare for everyone trying to work with it, and you know,
Speaker 14: there's not much more that they can.
Speaker 2: Do to control him, though, Jenny Shanzano and Rick Davis,
Speaker 2: We're going to have a lot more coming up with
Speaker 2: our panel. They've got to do another hearing on the
Speaker 2: gag order, right, there's five.
Speaker 10: More next Thursday.
Speaker 2: Leeg's Violations. I'm Joe Matthew alongside Kaylee Lines. I'm more
Speaker 2: coming up a Balance of Power only on Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 2: A lot of New York news this week. We're here
Speaker 2: at Washington talking about New York every day. Joe Biden there,
Speaker 2: Donald Trump of course there in court. And there are
Speaker 2: questions today after Joe Biden did an interview with Howard
Speaker 2: Stern about whether we're going to see any debates at all.
Speaker 2: This is not the first time that this has come up,
Speaker 2: because we know that Joe Biden has questioned this. He says, well,
Speaker 2: what you know, what if he is lying through the
Speaker 2: whole thing. How do we manage that is the a
Speaker 2: credible person to debate? And we also know that Republicans
Speaker 2: have a huge problem with the Commission on Debates and
Speaker 2: don't want any of the mainstream moderators who have been suggested.
Speaker 10: Yeah. Well, and Donald Trump did not partake in a
Speaker 10: single Republics from primary debate. We just saw Ron DeSantis,
Speaker 10: Nikki Haley, and veg Ramaswami fighting it out amongst themselves
Speaker 10: as Trump remained the front runner. So I guess we'll
Speaker 10: see if things are different now that we're in the general.
Speaker 10: This is what President Biden had to say on the matter.
Speaker 4: Can I tell you what fantasy I had? I don't
Speaker 4: know if you're going to debate your opponent. I am somewhere.
Speaker 4: I don't know when I'm happy.
Speaker 10: So that was President Biden. The voice you heard before
Speaker 10: if you're listening on radio, was Howard Stern, who was
Speaker 10: conducting this interview. And I will conduct an interview of
Speaker 10: our own now with Rick Davis and Jeanie Shanzino. Our
Speaker 10: signature of political panel are with us. So, Genie, is
Speaker 10: this a good idea for Biden? He doesn't exactly know
Speaker 10: where or when it seems, but he's open to it.
Speaker 14: Yeah, I mean, this was fascinating. Apparently this was an
Speaker 14: unscheduled or at least I shouldn't say on scheduled, unannounced
Speaker 14: stop in New York. He's in New York today and
Speaker 14: you know, even the White House press pool didn't know
Speaker 14: he was going too serious to do this interview. He
Speaker 14: goes there and he makes news. So, you know, I
Speaker 14: think it was a coup for the campaign in that regard.
Speaker 14: I think it's also telling it is on Howard Stern
Speaker 14: and obviously not you know, in a more mainstream media outlet,
Speaker 14: but it is of course important because it's the first
Speaker 14: time we've heard the president commit to debating Donald Trump.
Speaker 14: And of course we had Donald Trump not that long
Speaker 14: ago at a rally with an empty podium talking to it,
Speaker 14: waiting for Joe Biden to debate. So the you know,
Speaker 14: Trump campaign has said they want to debate. Joe Biden's
Speaker 14: ready to debate, so you know, here we go. But
Speaker 14: you know, I also think it's a good a good
Speaker 14: thing for the campaign on Biden's part that they've been
Speaker 14: able to get breakthrough sort of the news of the
Speaker 14: Trump trial in this way during this trip to New York.
Speaker 14: So a good day all around for the Biden team
Speaker 14: so far.
Speaker 2: Well, Rick Davis, we've come full circle, I guess on
Speaker 2: a couple of matters. Howard Stern is now hanging out
Speaker 2: with Joe Biden. I can remember when Donald Trump was
Speaker 2: one of his favorite guests. He could come out with
Speaker 2: a catalog of archival interviews. Some would suggest he helped
Speaker 2: to get him elected in the first place by making
Speaker 2: him the character that he became on that program. But
Speaker 2: it seems like Donald Trump maybe maybe Republicans have come
Speaker 2: full circle on the idea of debates. I thought they
Speaker 2: had an allergy to debates on network television with mainstream
Speaker 2: media moderators, but recent reporting has suggested otherwise.
Speaker 4: Are these two guys going to get on a stage
Speaker 4: or not?
Speaker 13: Yeah, I've said in that studio with Howard Stern talking
Speaker 13: to John McCain about presidential ambition, and nothing made.
Speaker 8: Me more worried than that.
Speaker 13: Our long time and frankly thing to recall, we did
Speaker 13: it as a stop by too. We didn't tell our
Speaker 13: media pool and just went over there. So it's the
Speaker 13: place you go to have some fun. It was a
Speaker 13: pretty light interview, but I disagree with Jennie. If I
Speaker 13: were sitting there and John McCain said, I commit to
Speaker 13: debating my opponent, why.
Speaker 6: Would you do that.
Speaker 13: We haven't negotiated with them yet. I've negotiated a number
Speaker 13: of presidential debates, and if you're an incumbent, you start
Speaker 13: out with why should I debate you? And you'll negotiate
Speaker 13: from there. Best I can tell, Donald Trump nor the
Speaker 13: White House has agreed to the commission terms. There's a
Speaker 13: National Commission on Presidential Debates that has already arranged times,
Speaker 13: places and dates, and nobody has said yes to any
Speaker 13: of that.
Speaker 4: So we're a long way.
Speaker 13: From having an agenda where those two candidates are going
Speaker 13: to be on the stage together.
Speaker 6: And I don't even know.
Speaker 13: I haven't seen anything in reporting that indicates that they've
Speaker 13: appointed debate negotiators and even begun that process, which is
Speaker 13: pretty formal. You come up with a memorandum of understanding
Speaker 13: and it governs the entire debate. So I wouldn't hold
Speaker 13: my breath all right now if you were planning on
Speaker 13: going to a debate right.
Speaker 10: Away, all right, reality check from wow Rick Davis. We
Speaker 10: always appreciate it. There's also just the question of what
Speaker 10: a debate would accomplish. I think we all remember how
Speaker 10: debates went down in the twenty twenty matchup between these
Speaker 10: two Genie It wasn't pretty. At the risk of editorializing,
Speaker 10: and they are now because Biden ultimately won that election.
Speaker 10: Two presidents were talking about here the American people know them.
Speaker 10: So would a debate accomplish for either of them?
Speaker 12: Yeah?
Speaker 14: That debate, you know, I remember it so well myself.
Speaker 14: It was stunning, and now we think Donald Trump had
Speaker 14: COVID during it, potentially, you know, I still am a
Speaker 14: believer in the debates because I do think it's important
Speaker 14: that the American public be given the chance to see
Speaker 14: the two candidates on the stage together speaking as much
Speaker 14: as possible. There is certainly room for improvement, God knows,
Speaker 14: but I do think it's important, and I disagree with Rick.
Speaker 14: I think this was Joe Biden quintessential calling Donald Trump's bluff. Yeah,
Speaker 14: I'll debate you. I think the worst thing he could
Speaker 14: have said to Howard Stern and his audience today was Oh,
Speaker 14: I'm gonna sit back. No, you know, I'm not sure.
Speaker 12: No, bring it on.
Speaker 14: He can debate him, He's done it before and he
Speaker 14: has won. I can guarantee Donald Trump, who hasn't debated
Speaker 14: this cycle yet, is going to come up with all
Speaker 14: kinds of excuses not to be there and make it hard.
Speaker 14: The Republican Party has already stepped away from the commission.
Speaker 14: So absolutely Joe Biden did the right thing. He's on
Speaker 14: the right side of this, and let's see Donald Trump
Speaker 14: come forward and agree to it. He hasn't for any
Speaker 14: of his others.
Speaker 10: Okay, Genie, your wish maybe is Donald Trump's command because
Speaker 10: he just posted on true Social crooked Joe Biden just
Speaker 10: announced he's willing to debate. Everyone knows he doesn't really
Speaker 10: mean it. But in case he does, I say anywhere, anytime,
Speaker 10: any place. It goes on after that. But I guess
Speaker 10: those all caps all caps of course they are.
Speaker 4: We'll see that all right now.
Speaker 2: So now we've confirmed that Donald Trump does listen to
Speaker 2: the program, which is interesting to me for starters. But
Speaker 2: they're both going to act like I'm assuming they want
Speaker 2: to debate. You're one of the first people I've heard
Speaker 2: suggest that that will not happen.
Speaker 4: We didn't.
Speaker 2: To Kaylee's point, see Donald Trump in a debate once
Speaker 2: in the primary cycle.
Speaker 4: So will this be the debate less campaign.
Speaker 13: Yeah, very well could be. The reality is the media
Speaker 13: organizations and the Biden campaign having learned, as Genie points
Speaker 13: out from two thousand and twenty, that there's no way
Speaker 13: to actually monitor the facts that come out of Donald
Speaker 13: Trump's mouth. I should say, messages that come out of
Speaker 13: Donald Trump's mouth for factualness. You can't stop the debate
Speaker 13: after every answer and say, okay, here are the things
Speaker 13: that he said that aren't true. You know, and when
Speaker 13: you look at town halls and things like that that
Speaker 13: CNNA has done and other outcomes, they're a disaster for
Speaker 13: those organizations because you know, there's no way to govern
Speaker 13: Donald Trump's behavior.
Speaker 4: And so.
Speaker 13: Unless you have some understanding that it's going to be
Speaker 13: a fact base endeavor, it's like taking Joe Biden and
Speaker 13: tying both his arms behind his back because he's likely
Speaker 13: to try and be accurate. Now, he may forget things,
Speaker 13: and he may have other kinds of problems, but it
Speaker 13: won't be the kind of problems Donald Trump presents to
Speaker 13: the stage. And so if you're the Democrats, and I
Speaker 13: know having talked to some of their political folks, this
Speaker 13: is a real problem. Right One's fighting by Marcus at
Speaker 13: Queensberry's rules, and the other is fighting by the bronx
Speaker 13: bring chains and a gun. You know, I'm sorry, Joe Biden,
Speaker 13: but that is not the way you operate. And so
Speaker 13: why say yes to that kind of a brawl.
Speaker 2: Yeah, you don't bring a knife to a gunfight, Jeannie.
Speaker 2: This but this post on truth social goes further as
Speaker 2: he concludes with let's do the debate at the courthouse
Speaker 2: tonight on national television. I'll wait, is this kind of
Speaker 2: goating going to be what we do all summer?
Speaker 14: I think it will be. And of course number one,
Speaker 14: of course he's listening to you too, and I'm so
Speaker 14: glad to hear it. Over to seven point thirty one
Speaker 14: Bloomberg and get on there. They should both debate. But
Speaker 14: you know what I really have to say, Joe Biden
Speaker 14: enjoys being underestimated.
Speaker 6: He is up to this.
Speaker 14: He will absolutely be there and be present for a debate.
Speaker 14: Look at the last two states of the unions, he
Speaker 14: outperformed what anybody expected. He's one person who has debated
Speaker 14: Donald Trump and in an election, so I would not
Speaker 14: underestimate him in this context. So bring on the brawl.
Speaker 10: It's gonna be a great summer, we're getting like West
Speaker 10: Side still, can we pull that?
Speaker 4: I want to play that back. I don't know what
Speaker 4: are we going to do, Kayley.
Speaker 10: I don't know. I feel like we did a disservice
Speaker 10: by not reading the full tweet, because it's not just
Speaker 10: at the courthouse tonight. After he sas New York references
Speaker 10: anywhere anytime, any place, he goes on to say, I
Speaker 10: suggest Monday evening, Tuesday evening, or Wednesday evening at my
Speaker 10: Raley in Michigan, going on to say an alternative, he's
Speaker 10: in New York City today, although probably doesn't know it,
Speaker 10: and so am I stuck in one of many.
Speaker 4: Although probably doesn't know it.
Speaker 10: Yes, you can find that whole post on truthsocial dot com.
Speaker 2: You're spending people there now, Rick Davis and Genie Shanzde No,
Speaker 2: thank you. It must be Friday, and we need our
Speaker 2: closers with us. They'll be back later on, by the way,
Speaker 2: our signature panel five PM, the late edition bounce of
Speaker 2: Power Bloomberg Radio and TV.
Speaker 4: Always something to learn from Rick in Genie, We're.
Speaker 2: Going to talk a little bit more coming up here, Kayley,
Speaker 2: about our other top story today that's economic data.
Speaker 10: Absolutely, we're going to get Mark Zandi from Moody's on
Speaker 10: the program.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Can
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Speaker 10: Seems that Friday is a better day. Yes, the data
Speaker 10: is not as scary today perhaps for the market as
Speaker 10: it was yesterday.
Speaker 2: Some better than expect journings going a long way here,
Speaker 2: and it's hard to tell if we're caught in the
Speaker 2: glare of Google and Microsoft beating estimates, Kaylee, or if
Speaker 2: there's a little bit of a reversal in the negativity
Speaker 2: surrounding the PCEE data yesterday. Quarterly monthly data out today
Speaker 2: and it's telling a bit of a different story. We're
Speaker 2: certainly seeing a reaction here, a bit of a sigh
Speaker 2: of relief realizing the headlines of problem as we've discussed
Speaker 2: politically for Joe Biden, but in terms of the economy itself.
Speaker 2: Mark Xandy at Moody's Analytics out of a tweet yesterday
Speaker 2: that might tell us a lot about where we are today.
Speaker 2: Mark writes the Weaker that expected growth was largely the
Speaker 2: result of a bigger increase in the trade deficit driven
Speaker 2: by more imports. Perplexed by the sell off in the
Speaker 2: stock and bond markets, he's with us now again. Chief
Speaker 2: Economists Moods Analytics Market. It's great to see you. We're
Speaker 2: overdue for a catch up here. Did the data today
Speaker 2: reinforce your point from yesterday?
Speaker 5: I think so, Joe, Yeah, yesterday was a bit perplexed
Speaker 5: at the market reaction, I mean, big sell off. It
Speaker 5: felt like folks were focused on the strong increase in
Speaker 5: the core PC for the quarter, But in today's data
Speaker 5: reaffirmed that, well, inflation remains sticky. It's not coming in
Speaker 5: quite as fast as everyone would like. You know, it's
Speaker 5: not hair on fire. You know, it is coming in
Speaker 5: and it will continue to come in, you know, over
Speaker 5: the course of the next several months. I think everyone's
Speaker 5: just a bit more relaxed today, and that on top
Speaker 5: of the good earning, so you know, contributed to green
Speaker 5: today compared to red history. But if you add of
Speaker 5: both days, we're kind of.
Speaker 4: Where we sort of started. So no real.
Speaker 10: Change Okay, fair enough. It's also worth pointing out that
Speaker 10: PC was not the only data that we got today, Mark,
Speaker 10: We did get University of Michigan sentiment figures and inflation
Speaker 10: expectation figure sentiment going down, inflation expectations at least for
Speaker 10: the year ahead ticking up. How should we be thinking
Speaker 10: about the consumer, the engine of the economy, that was
Speaker 10: what is driving the GDB growth that we are seeing,
Speaker 10: and how they're how firm they are at this moment,
Speaker 10: how stable.
Speaker 5: Bill rock solid and Ni Ailey, you know, they're driving
Speaker 5: the train, have been throughout the since the pandemic, continued
Speaker 5: to do so. No sign of any kind of weakening
Speaker 5: and consumer spending at least not in the reports we
Speaker 5: got today and yesterday, and for good reason. All the
Speaker 5: fundamentals look good. Wage growth is stronger than inflations, of
Speaker 5: people's purchasing powers improving, and that's across the entire wage distribution.
Speaker 5: Low wage workers, high wage workers. You know, unemployments for
Speaker 5: four percent been there for more than two years, so that, yeah,
Speaker 5: that's not changed.
Speaker 10: So barg If all of that is true, why isn't
Speaker 10: sentiment higher? Why don't people feel better? Bloomberg's polling suggests
Speaker 10: people feel that the economy is going to get worse,
Speaker 10: not better, in the months moving forward. So what's the disconnect.
Speaker 5: Well, partly you're looking at the wrong index, you know,
Speaker 5: again the interest of Michigan survey that's biased by political
Speaker 5: people's political prism. I think if you look at the
Speaker 5: Conference for survey, yeah, you know, that's exactly right down
Speaker 5: the fairway.
Speaker 8: I mean, it's they've.
Speaker 5: Been doing that survey for decades and it's a little
Speaker 5: bit above average, no change in the last six, nine,
Speaker 5: twelve months, very consistent with the spending we're getting. So
Speaker 5: I wouldn't pay much attention now. Having said that, I
Speaker 5: do think people, you know, the typical American is still
Speaker 5: feeling the sting of the high inflation we suffered back
Speaker 5: in twenty one twenty two going into twenty three, and
Speaker 5: people are paying a lot more. Even though inflation has
Speaker 5: come back in, people are still paying a lot more
Speaker 5: for food, for rent, you know, kind of the staples
Speaker 5: of life.
Speaker 7: You know.
Speaker 5: I just got my insurance motor insurance, vehicle insurance bill,
Speaker 5: joked when I saw it. So, you know, we're still
Speaker 5: inflation's in and that's great, and that's very positive for
Speaker 5: future Fed policy and interest rate cuts. But you know,
Speaker 5: people still have are still feeling the ill effects about
Speaker 5: high inflation that we suffered back a couple three years ago.
Speaker 4: Where are you on interest rate cuts? So we're going
Speaker 4: to get any of this year?
Speaker 8: I think so, Joe.
Speaker 5: I mean, if there were no election, I'd say we'd
Speaker 5: get two, maybe three. But there's an election, and that
Speaker 5: messes things up. So it feels like it's going to
Speaker 5: take a few months for the Fed to collect the
Speaker 5: evidence they need that. You know, the Zandi's right, and
Speaker 5: inflations come in and we're going to be fine, and
Speaker 5: that probably takes us to the September meeting. But you know,
Speaker 5: September is right before the election. You're right in the
Speaker 5: middle of the election, and I mean you've been seeing
Speaker 5: reports about what President Trump might do to the next
Speaker 5: Federal Reserve. They're going to be politicized. They just don't
Speaker 5: want to do that.
Speaker 6: Now.
Speaker 5: Not lowering rates when the inflation numbers say you should
Speaker 5: lower rates is also political, but less likely you get
Speaker 5: wrapped up in the politics if you don't cut right.
Speaker 5: So that means that takes you to the November meeting.
Speaker 5: But the November meeting is like days after the election.
Speaker 5: I mean like literally right after the election. Making a
Speaker 5: movement feels political. So I know, when you add it
Speaker 5: all up, given all these dynamics, I say one rate
Speaker 5: cut in December and then quarter a rate cut every
Speaker 5: quarter next year going into twenty twenty six.
Speaker 10: Okay, so it might be a while because of the
Speaker 10: election before you see the support for the economy in
Speaker 10: the form of policy easing perhaps, And I would imagine
Speaker 10: in that same vein market also, we should have very
Speaker 10: little expectation that if something were to break, if things
Speaker 10: were to suddenly materially soften, but the Fed, still fighting inflation,
Speaker 10: wants to keep policy tight that you wouldn't have any
Speaker 10: kind of fiscal policy stepping in to try to do
Speaker 10: some of that work either.
Speaker 5: No, No, that's just not going to happen. So the
Speaker 5: economy is on its own. I do think if something
Speaker 5: breaks in the financial system, and just as a reminder,
Speaker 5: you know, when the Fed's got the funds rate of
Speaker 5: five and a half percent, you'll curve is inverted. Financial
Speaker 5: system is under a lot of pressure. That's one reason
Speaker 5: why you might want to cut sooner rather than later,
Speaker 5: not to so nothing breaks there. Yeah, and there's you know,
Speaker 5: things to be cautious about in the broader economy. The
Speaker 5: lib market feels really good, but that's resting on no layoffs,
Speaker 5: and that feels like something that can change very quickly
Speaker 5: if there's an event or sentiment shifts among business people
Speaker 5: and they start laying off workers. So I do think
Speaker 5: there's a strong argument to start cutting interest rates, and
Speaker 5: I think the FED would cut rate if something did break,
Speaker 5: even though inflation is not quite back to where it
Speaker 5: needs to be, at least in their book.
Speaker 2: Spending time with Mark Xandy from Moody's Analytics here on
Speaker 2: Bloomberg TV and Radio. That's reporting out today Wall Street
Speaker 2: Journal story Mark, that makes you wonder what the FED
Speaker 2: might look like if Donald Trump as president again. He's
Speaker 2: hearing advice apparently from some of his allies, that there'd
Speaker 2: be a way to take power away from the FED
Speaker 2: and even introduce the commander in chief, make the president
Speaker 2: part of the interest rate decision making mechanism. This is
Speaker 2: all blue sky stuff right now. But what would another
Speaker 2: Trump term mean for the Fed?
Speaker 5: Well, as you know, it's coming from the Wall Street Journal,
Speaker 5: I have no other knowledge than that. But let me
Speaker 5: just say, you know a bedrock of a well functioning economy,
Speaker 5: a market economy. Our economy is an independent federal reserve,
Speaker 5: if fed, a reserve that can make interest rate decisions
Speaker 5: independent of political factors, or at least as best as
Speaker 5: they can do if they're changing policy because it makes
Speaker 5: for good politics, and that Trump's what's needed for a
Speaker 5: good economy.
Speaker 8: That's just a prescription for disaster.
Speaker 5: And I think every investor on the planet knows that,
Speaker 5: and I think everyone would throw up all over that.
Speaker 5: So hopefully that's just a report, just a report, and
Speaker 5: nothing more than that, all.
Speaker 10: Right, Mark Zandy, Moody's analytics chief economist. Always great to
Speaker 10: have you here on Bloomberg Television and Radio.
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