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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 2: Thanks for being with us here on the Friday edition

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Speaker 2: of Balance of Power. We've got a lot of wood

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Speaker 2: to chop this hour, with big questions about government funding,

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Speaker 2: a deadline that will likely mean a shutdown at midnight

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Speaker 2: tonight twelve one am tomorrow. That coupled with news from

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Speaker 2: the White House today the President finally making it clear, Yeah,

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Speaker 2: it was one of the Kevins warsh in this case

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Speaker 2: to be the next chair of the Federal Reserve. President

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Speaker 2: talked about this just a short time ago. If you

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Speaker 2: were with us on Bloomberg. He invited reporters into the

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Speaker 2: Oval Office for a completely unrelated matter. Who is in

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Speaker 2: fact signing an executive order on an IndyCar race. That's

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Speaker 2: going to be happy and I guess coming up this

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Speaker 2: summer in Washington, we'll have much more on that if

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Speaker 2: it actually takes place.

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Speaker 3: But he was asked by reporters about the pick. Here's

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Speaker 3: what he said, but.

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Speaker 4: He certainly wants to cut rich. I've been watching him

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Speaker 4: for a long time, top student, best schools, everything was

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Speaker 4: like perfect, youngest person ever to serve on the Fed.

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Speaker 4: Got the whole package. Looks do mean anything, but he's

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Speaker 4: got the look. But he's got the whole package. And

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Speaker 4: I think he's going to do a great job.

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Speaker 2: And the headline on the terminal Trump picks a reinvented

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Speaker 2: Worsh to leave the Federal Reserve. Not everybody's happy about

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Speaker 2: this pick, and we're very curious to talk to Michael

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Speaker 2: McKee about the confirmation process, which we know is going

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Speaker 2: to be a tough one to start with. Tom tillis

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Speaker 2: blocking the way in objection to the DOJ investigation into J.

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Speaker 3: Powell.

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Speaker 2: Michael mckei, Blomberg International Economics and Policy correspondent with US

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Speaker 2: live from World Headquarters in New York. What do you

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Speaker 2: make of the pick, Michae and how long is this

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Speaker 2: going to take to get through the Senate.

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Speaker 5: It's not a complete surprise, because, of course Worsh has

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Speaker 5: been mentioned as a potential FED.

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Speaker 6: Chair for eight years now.

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Speaker 5: In the first Trump administration in twenty seventeen, he was

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Speaker 5: considered for the job that ultimately went to Jay Powell.

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Speaker 5: So he's stayed close to the President and he's kept

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Speaker 5: himself just enough in the news on his views on

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Speaker 5: monetary policy to keep him as a live candidate. And

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Speaker 5: it appears to the President never really lost faith in him.

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Speaker 5: We all wondered as the prediction markets went up and down.

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Speaker 5: But warsh has got some qualifications. He's got some strengths,

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Speaker 5: he has some weaknesses. He's certainly got the central bank experience,

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Speaker 5: and he is an inflation hawk, even though he's gotten

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Speaker 5: more dubbish, but those should appeal to Wall Street. He's

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Speaker 5: got the Wall Street background. At the same time, he

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Speaker 5: wants to do sort of a major overhaul of the FED,

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Speaker 5: and it isn't clear how people at the FED are

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Speaker 5: going to feel about that.

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Speaker 7: So, Mike, is this more a question of when, not if,

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Speaker 7: we'll see a confirmation of a potential Kevin Warre.

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Speaker 6: As FED chair?

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Speaker 7: Because President Trump says he's not concerned with Senator Tillis

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Speaker 7: blocking this, and Senator Tillis himself said that he was

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Speaker 7: pleased by the pick.

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Speaker 5: I don't see this as being any kind of major

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Speaker 5: delay it could be a delay, but it's also a

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Speaker 5: delay that isn't necessary at this point. There is a

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Speaker 5: subpoena to j Powell to provide records on the construction

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Speaker 5: projects at the FED buildings.

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Speaker 6: There's no indictment.

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Speaker 5: There hasn't been an indication that he's necessarily a target

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Speaker 5: for an indictment. The President, if he wanted to, could

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Speaker 5: call up Judge Janine, his TV star US attorney, and say,

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Speaker 5: you know, let's make this disappear.

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Speaker 6: So I think what we saw in the Oval Office

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Speaker 6: today is.

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Speaker 5: The President not wanting to completely back down and kind

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Speaker 5: of let.

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Speaker 6: Jay Powell off the hook at this point.

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Speaker 5: But I don't think the idea that would stay on

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Speaker 5: because Trump didn't get Worsh confirmed would be something that

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Speaker 5: the president would want to see.

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Speaker 2: What do we make of the personal connections here and

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Speaker 2: to what extent will this play into confirmation hearings. Mike

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Speaker 2: Worsh works with Stanley drucken Miller, who's close with Scott Bessett,

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Speaker 2: who led the search. Worsh's father in law, Ronald Lauder,

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Speaker 2: was an undergrad friend of Donald Trump at University of

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Speaker 2: Pennsylvania's Wharton Business School.

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Speaker 3: Is just the way Washington.

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Speaker 5: Works well, and don't forget Stan Drucken Miller and Scott

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Speaker 5: Bessett worked for George Sorows. I mean, I'm not sure

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Speaker 5: how mag is going to react to all that their

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Speaker 5: guy is now going to be running the Fed.

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Speaker 6: The Sorrows people.

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Speaker 5: There will be questions about all of this, But Walsh

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Speaker 5: has been sort of operating on his own for a

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Speaker 5: long time now, and while he's friends with these people

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Speaker 5: and he works for Stan, he's not driven by any

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Speaker 5: of them, and he's certainly people would certainly take issue

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Speaker 5: with the idea that he is going to be told

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Speaker 5: what to do.

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Speaker 6: By either of them.

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Speaker 5: The latter connection interesting, of course, because the Rod Lauder,

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Speaker 5: his father in law, has been a major donor to

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Speaker 5: the Republican Party, so it certainly could have put a

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Speaker 5: thumb on the scale there. But you have to remember

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Speaker 5: that Ron Lauder is also the person who told Donald

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Speaker 5: Trump to go get Greenland.

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Speaker 7: Mike, if it's perhaps hindsight is now twenty twenty, I am

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Speaker 7: wondering what you make of what felt like a long

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Speaker 7: delay in us getting this announcement from President Trump. We

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Speaker 7: kept hearing from the administration it was going to be

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Speaker 7: within the next two weeks. Within the next two weeks,

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Speaker 7: though they didn't make what was our understanding of a

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Speaker 7: January deadline by at least one day.

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Speaker 5: Well, they probably I hesitate to guess what happens in

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Speaker 5: the Trump White House. I would imagine that the President

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Speaker 5: had interviews with all of the finalists and he decided

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Speaker 5: he kind of liked them all, and they all had

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Speaker 5: good points and bad points, and he wanted to weigh

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Speaker 5: the issue. And then you have to remember that this

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Speaker 5: president is the bullet in the China shop, and there's

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Speaker 5: a crisis a minute in that Oval office, and so

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Speaker 5: I imagine that he got sidetracked. He didn't need to pick

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Speaker 5: anybody immediately. So while he dealt with Venezuela, while he

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Speaker 5: dealt with Iran and everything else, this probably was kind

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Speaker 5: of off to the side, all right.

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Speaker 7: Bloomberg's Michael McKee, international Economic and Policy correspondent for US,

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Speaker 7: Thank you so much, And to extend the conversation, we're

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Speaker 7: going to bring in now Heather Bouchet. She's a former

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Speaker 7: member of the Council of Economic Advisors under the President

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Speaker 7: Joe Biden administration and now Chief Economist for invest In

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Speaker 7: America Cabinet. Heather, thanks so much for being here. Let's

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Speaker 7: just get your initial reactions thoughts on this pick for

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Speaker 7: Kevin Worsh to be the next FED chairman and what

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Speaker 7: your understanding is on the shape that his policy making

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Speaker 7: could make if he is confirmed to lead the Central Bank.

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Speaker 8: Yeah, Tyler, I mean we've been waiting for this announcement.

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Speaker 8: And here's the thing. I think many of us in

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Speaker 8: the economics community and around the world are very concerned

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Speaker 8: about this question of FED independence. And you know what

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Speaker 8: kind of person President Trump would put into this role

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Speaker 8: and would nominate to be chair whether or not they

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Speaker 8: would be able to stand up for you know, doing serious,

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Speaker 8: incredible analysis of what's going on in the economy and

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Speaker 8: making those independent decisions. And I think that you know,

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Speaker 8: what Kevin Worsh has shown over the past year is

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Speaker 8: that while he has long been a hawk on inflation,

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Speaker 8: you know, during the global financial crisis, when unemployment was

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Speaker 8: nine percent, he was out there saying, Hey, we need

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Speaker 8: to be really worried about inflation, you know. But now ever,

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Speaker 8: since it seems like he's been trying to get this job,

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Speaker 8: he's done a flip flop and he seems to be

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Speaker 8: parroting the president's views that actually know rates are too high,

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Speaker 8: and we can lower rates, and we don't need to

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Speaker 8: worry about inflation. We don't need to worry about the

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Speaker 8: consequences on the economy of many of Trump's policies that

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Speaker 8: might raise prices. And so that worries me because it

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Speaker 8: indicates that he he wants his job very badly. That's

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Speaker 8: not a bad thing, of course, it's an important job,

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Speaker 8: and we want whoever takes this job to be successful

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Speaker 8: in this role. But we need to have someone in

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Speaker 8: this role who's willing to follow the data and evidence

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Speaker 8: and to make sound decisions, not just do whatever the

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Speaker 8: president wants.

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Speaker 2: Interesting, Heather, I'm curious to hear your thoughts on a post.

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Speaker 2: We just saw a statement from Senator Mark Warner of

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Speaker 2: course Banking Committee, and he will factor into this confirmation process.

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Speaker 2: He writes, it's difficult to trust that any chair of

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Speaker 2: the Federal Reserve selected by this president will be able

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Speaker 2: to act with the independence required of the position, knowing

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Speaker 2: that the administration will levy charges against any leader who

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Speaker 2: makes interest rate decisions based on facts and the needs

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Speaker 2: of our economy rather than Trump's personal preferences. Do you

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Speaker 2: share that concern that the chairman knows he could be

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Speaker 2: investigated or face charges if he doesn't do what the

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Speaker 2: president wants.

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Speaker 8: Well, I think that is obviously the concern. We've seen

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Speaker 8: what happened to Lisa Cook, We've seen the charges, the

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Speaker 8: criminal charges against the Fed and j Powell. Right now,

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Speaker 8: this is a serious breach of the independence that the

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Speaker 8: Federal Reserve is long held. And it's important that you

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Speaker 8: know this is about interest rates, it's also about all

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Speaker 8: of the other things that the Federal Reserve does. You know,

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Speaker 8: what kind of things does the president you want the

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Speaker 8: FED to do in terms of banking regulation or whether

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Speaker 8: or not banks have access to the credit lines that

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Speaker 8: they need. Is the President going to try to use

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Speaker 8: the Federal Reserve to punish people that he doesn't like.

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Speaker 8: We've seen the president be willing to take all parts

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Speaker 8: of government and use them for his own personal retribution schemes.

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Speaker 8: So I think there is a lot of concern, and

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Speaker 8: I think doubling down on that concern. You know, Kevin

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Speaker 8: marsh has made these speeches and comments over the past

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Speaker 8: year about questioning Federal Reserve independence. There was an article

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Speaker 8: that I was reading before the show that you know,

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Speaker 8: appeared in Bloomberg last summer where he was questioning independence

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Speaker 8: of the Federal Reserve, And so what does he mean

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Speaker 8: by that, why is he saying now, and what kind

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Speaker 8: of chair will he be? These are big questions, and

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Speaker 8: these are the questions that senators should be asking as

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Speaker 8: they go through the confirmation process.

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Speaker 7: Well, Heather, I'm glad that you brought up that the

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Speaker 7: Fed has more than just monetary policy when it comes

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Speaker 7: to what they end up doing, because we have heard

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Speaker 7: from Worsh previously indicate that he's willing to give up

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Speaker 7: some aspects when it comes to bank supervision. I'm wondering

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Speaker 7: if we can tap on your expertise as working under

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Speaker 7: an administration in economic policy, what would this mean for

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Speaker 7: other regulators in Washington.

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Speaker 9: Well, I think it.

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Speaker 8: What we need is bank regulation that is sound, that

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Speaker 8: is focusing on making sure that we are protecting the

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Speaker 8: financial system as a whole, not individual banks necessarily, but

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Speaker 8: the whole system, and making sure that the costs of

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Speaker 8: that are not pushed on to families across the country

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Speaker 8: and that we don't have something like the global financial

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Speaker 8: crisis happen again. Is you know, one of the really

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Speaker 8: important purposes of the FED and our financial regulatory system overall.

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Speaker 8: And I think there are real concerns. You know, the

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Speaker 8: administration is already you know, taking steps to pair back

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Speaker 8: some of these regulations on banks and having a Federal

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Speaker 8: Reserve chair that is already said that they're open to

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Speaker 8: that does raise a lot of big questions and concerns.

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Speaker 8: I will say, you know, it was It's been hard

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Speaker 8: to watch this process because I don't know that any

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Speaker 8: of the options that it seemed like the President was

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Speaker 8: looking at would be folks that would be able to

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Speaker 8: stand up to him. And so I think another deeper

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Speaker 8: question we need to ask ourselves is would anyone that

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Speaker 8: the president put in place be able to stand up

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Speaker 8: to him given the kinds of pressure that he has

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Speaker 8: been putting on these independent institutions.

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Speaker 3: Well, are you hoping, Heather, that J.

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Speaker 2: Powell hangs around a while and it could be on

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Speaker 2: the board another couple of years if you want it

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Speaker 2: to be well.

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Speaker 9: I I'm a fan of J.

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Speaker 8: Powell, and I think that he would do a lot

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Speaker 8: of good if he stayed on the board. I know

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Speaker 8: that he watches a lot of press around, you know,

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Speaker 8: what's going on, what folks say about him, I think

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Speaker 8: that he would be an asset and could help really

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Speaker 8: ground what the FED does in the kind of steady

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Speaker 8: leadership that he has provided over his term as chair.

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Speaker 7: So you don't think that this changes the longer term calculus.

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Speaker 7: You think that we could be looking at J. Powell

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Speaker 7: staying on as a governor through twenty twenty eight.

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Speaker 9: Well, I haven't.

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Speaker 8: I don't know what's in his mind, but I think

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Speaker 8: that certainly wouldn't be a bad idea.

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Speaker 2: We're spending some time with Heather Bouchet as part of

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Speaker 2: our coverage here on the Fredday edition of Balance of Power.

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Speaker 2: The confirmation process could be interesting here, Heather, and curious

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Speaker 2: your thoughts on the way this might go. I realized,

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Speaker 2: obviously you come from the Biden administration, not the Congress.

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Speaker 2: But Tom Tillis has a problem with this. He's put

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Speaker 2: a block on it until the DOJ investigation into J.

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Speaker 2: Powell is resolved. And some of the changes in his

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Speaker 2: feelings about the FED that you touched on earlier have

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Speaker 2: been highlighted by some Democrats in the Capitol. Our headlined

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Speaker 2: on the terminal refers to a reinvented worsh What types

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Speaker 2: of questions.

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Speaker 3: Would you ask him in confirmation.

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Speaker 8: Well, you know, I called it a flip flop in

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Speaker 8: my note this morning. I think that I if I

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Speaker 8: were advising one of the senators what to ask, you know,

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Speaker 8: I think to investigate why has he changed his views?

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Speaker 8: And what does this mean about his thoughts over the

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Speaker 8: long term? You know, how he's thinking about interest rates?

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Speaker 8: Why was he so hawkish before and so dubvish now?

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Speaker 8: And you know what were the what were the empirical

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Speaker 8: facts and data that caused him to change his mind.

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Speaker 8: I'd want to hear more about that in his vision

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Speaker 8: for his leadership in the Fed.

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Speaker 7: Heather, I think on any other day we would really

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Speaker 7: be asking you about what has been a flurry of

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Speaker 7: recent tariff threats from President Trump, particularly amid a week

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Speaker 7: where we're talking a lot about a dollar weakness, and

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Speaker 7: just last night we saw President Trump heightened his tariff

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Speaker 7: threats related to two countries, Cuba and also Canada. And

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Speaker 7: Canada in particular, we've seen a lot of ramped up

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Speaker 7: rhetoric against the Prime Minister Mark Karney. Now, this fifty

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Speaker 7: percent tariff against Canadian made aircraft. Last week it was

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Speaker 7: a one hundred percent tariff. What do you view of

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Speaker 7: these threats when it comes to our northern neighbor. Are

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Speaker 7: these credible threats? Are we posturing ahead of USMCA negotiations

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Speaker 7: or could it be both?

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Speaker 8: Well, I do not in any way pretend to read

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Speaker 8: President Trump's mind, and what we have seen since he

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Speaker 8: took office is a very chaotic implementation of economic policy,

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Speaker 8: and in particularly tariff policy.

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Speaker 9: It's very capricious. Now, it comes and goes.

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Speaker 8: It depends on his mood and how he feels about

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Speaker 8: different countries.

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Speaker 9: So I think that's the thing. One.

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Speaker 8: The announcement about the airplanes seemed very challeng because where are.

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Speaker 9: We going to get those planes? These aren't easy to make.

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Speaker 9: How is this going to affect the US economy?

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Speaker 8: Here we are today talking about the Federal Reserve and prices,

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Speaker 8: and I think the question has to be whether or

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Speaker 8: not those heres are going to lead to higher prices.

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Speaker 2: Heather is great to have you, Heather Bouchet, economist at

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Speaker 2: the White House and the Biden administration. We thank you

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Speaker 2: for the insights and we'll assemble our political panel next.

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Speaker 2: Are we going to shut down tonight? We'll talk to

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Speaker 2: Genie and Matt about that. Straight ahead only here on Bloomberg.

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Speaker 2: Stay with us on Balance of Power. We'll have much

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Speaker 2: more coming up after this.

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Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch

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Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

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Speaker 1: New York station Just Say Alexa played Bloomberg eleven thirty.

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Speaker 2: Guys Washington recovers from the premiere of Milania waka flocka

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Speaker 2: Flame has made his way outside of the Kennedy Center

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Speaker 2: along with all the dignitaries. That was a big thing

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Speaker 2: Tyler Kendall last evening here in town. The after parties,

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Speaker 2: the invite list controlled very carefully.

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Speaker 3: You can tell me all about it later when we're

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Speaker 3: off the here.

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Speaker 7: I enjoyed talking about it yesterday with well absolutely very program.

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Speaker 2: It's going to be on fifteen hundred screens, they say,

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Speaker 2: Millennia really. Then it will have its own series on

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Speaker 2: Netflix because of course Jeff Bezos or on Amazon Prime.

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Speaker 2: Jeff Bezos bought the film. Right This is the stuff

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Speaker 2: that Tyler is concerned with right now. Now, all of

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Speaker 2: this was blotted out by the big news of the day,

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Speaker 2: a FED chair pick. We've talked about that this hour

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Speaker 2: already in Kevin Warsh, but also a government shutdown that

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Speaker 2: appears to be looming, even though the President indicated last

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Speaker 2: evening on Truth Social that he has cut a deal

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Speaker 2: with Democrats.

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Speaker 7: Pretty remarkable actually that the White House got involved and

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Speaker 7: got involved so quickly, right compared that to the last

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Speaker 7: government shutdown, where I felt like the two sides weren't

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Speaker 7: even engaging at all. But just because they have struck this,

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Speaker 7: the contours of it are understanding is that they're going

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Speaker 7: to strip out the DHS funding to a short term

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Speaker 7: stopgap measure for that while they worked out what those

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Speaker 7: potential curbs on ice could look like, but then past

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Speaker 7: the remaining five bills. The thing is, we're up against

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Speaker 7: this really difficult timeline tonight at midnight, the houses out

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Speaker 7: of session. We saw a snag last night by Senator

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Speaker 7: Lindsay Graham, which is leading to questions on where we

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Speaker 7: go from here. So that's where we're going to start

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Speaker 7: with our political panel today. Jeanie Shanzano, Democracy Visiting Fellow

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Speaker 7: at Harvard Kennedy School's Ash Center, and a Bloomberg Politics

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Speaker 7: contributor alongside Mattterrell, managing partner at Firehouse Strategies and a

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Speaker 7: Republican strategist.

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Speaker 6: So Matt, let's just start with you.

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Speaker 7: What does this tell you that the White House was

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Speaker 7: willing to negotiate about the potency of this political issue,

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Speaker 7: what we're seeing play out in Minneapolis, the future of

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Speaker 7: immigration policy in this country, and what sort of curbs

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Speaker 7: do you think that the White House is going to

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Speaker 7: get behind? As we try to glean more details about

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Speaker 7: the agreement that they reach.

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Speaker 10: What is a smart move by President Trump working in

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Speaker 10: again reach out to Democrats, want to get to a

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Speaker 10: deal here, and it comes down to this sixth Bill,

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Speaker 10: And I think right now it is not a great

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Speaker 10: look for Democrats. I mean, the truth is, this is

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Speaker 10: not going to stop ICE from being fully funded. It's

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Speaker 10: not going to you know, shut down DHS. What this

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Speaker 10: will do is shut down FEMA, tsa secret service, coast Guard.

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Speaker 10: That's not a good look for Democrats. But in the end,

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Speaker 10: the question is what's going to get this across the

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Speaker 10: finish line. I think it's just wait and see here.

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Speaker 10: Whether it's a two week period, we'll see what the

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Speaker 10: timeline is here. But You're right in saying that we

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Speaker 10: are coming up to a deadline. That is this evening,

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Speaker 10: we're going to have that partial government shut down. That's

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Speaker 10: roughly eighty percent of the government that's going to be

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Speaker 10: shut down, if you will.

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Speaker 6: But I think it's a good look for the president.

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Speaker 6: That's just a good look.

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Speaker 10: It's the right thing to do for the president to

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Speaker 10: be showing leadership here. Want to work with Democrats to

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Speaker 10: get this across the finish line.

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Speaker 2: What do you think of the five Republicans we talked

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Speaker 2: with one yesterday and Senator Ted bug who voted against

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Speaker 2: that mini bus. Were they crossing a line with the president?

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Speaker 7: You know?

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Speaker 10: This for the president, these lawmakers that work through Here's why.

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Speaker 10: I can tell you nobody negotiates better with lawmakers on

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Speaker 10: Capitol Hill than President.

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Speaker 2: Trump's exciety like a Mike Lee though, Tommy Tuberville, a

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Speaker 2: Ted Budd.

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Speaker 3: It's not just Rand Paul who's voting no.

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Speaker 7: Here.

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Speaker 2: There are some concerns about the optics around this ic enforcement.

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Speaker 10: And I think you should expect that President Trump's going

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Speaker 10: to work one on one with these lawmakers, work in

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Speaker 10: the phones, to work with them to get to a

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Speaker 10: place where people are comfortable moving forward here. But I

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Speaker 10: think the other part of this is where are the

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Speaker 10: American people at on this? And yeah, there's certainly the

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Speaker 10: administration saying, look, nothing's ever done perfect, and there's sins

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Speaker 10: that are looking at right now with ice in Minneapolis.

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Speaker 10: But at the same time, look at the polling right now,

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Speaker 10: Republicans are doing better on the issues of immigration and

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Speaker 10: border security in comparison to Democrats. And beyond that, the

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Speaker 10: vast majority of Americans right now they want to see

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Speaker 10: people who are in this country illegally, who've committed crimes,

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Speaker 10: think about rape, homicide, deporter from the country. So I

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Speaker 10: think right now President Trump has a mandate. But to

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Speaker 10: your point, it's working with these lawmakers one on one.

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Speaker 10: Expect that he's doing that to get this across the.

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Speaker 7: Finish one well, to build on this. In Matt's point, Genie,

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Speaker 7: how much of a wild card could the House of

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Speaker 7: Representatives be Because we know that any legislation is going

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Speaker 7: to have to get kicked back down to that chamber.

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Speaker 7: We've already seen some conservatives make their own demand since

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Speaker 7: we're going to be shifting the contours of the package

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Speaker 7: that was already approved by the House, what are you

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Speaker 7: watching for And could this debate really drag on?

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Speaker 11: Yeah, Tyler, And it's going to be kicked down to

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Speaker 11: the House twice. Right, They've got to pass the soft

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Speaker 11: gap portion, which is the easier of the two, I presume,

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Speaker 11: and then once the deal is reached, if it's reached,

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Speaker 11: it's got to go back and get passed. And with

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Speaker 11: numbers as tight as they are in the House, that

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Speaker 11: is going to be terrible, terribly difficult because it means

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Speaker 11: that any member of the House can pull up Lindsey

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Speaker 11: Graham can hold this thing up for what they want,

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Speaker 11: and people have a lot of asks.

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Speaker 9: So that's one thing.

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Speaker 11: The other thing is this bill that they are stripping

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Speaker 11: out now was negotiated. Now when you blow up that

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Speaker 11: and goiated bill, people are going to go back to

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Speaker 11: their corners and ask again for what was what they wanted.

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Speaker 11: So it's gonna be tough. That said, you know, the

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Speaker 11: politics of this are critically important to understand. Matt was

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Speaker 11: talking about public support for immigrants who are accused of crimes,

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Speaker 11: and absolutely people most many Americans support that. But what

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Speaker 11: we're seeing in the polls is this enormous overreach on

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Speaker 11: the part of the White House and the administration in ice.

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Speaker 11: When it comes to what happened in Minneapolis, when you

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Speaker 11: have two American protesters shot dead on the streets. None

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Speaker 11: of that is supported, particularly by independence and the generic

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Speaker 11: polls now have republic have Democrats rather.

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00:21:45,040 --> 00:21:46,480
Speaker 9: Up double digits.

443
00:21:46,800 --> 00:21:49,600
Speaker 11: That is bad news for Republicans the House, it's bad

444
00:21:49,640 --> 00:21:52,600
Speaker 11: news for the White House. Donald Trump is not negotiating

445
00:21:52,600 --> 00:21:55,280
Speaker 11: with Democrats because he likes them or thinks that it's

446
00:21:55,320 --> 00:21:58,800
Speaker 11: a good idea. He's negotiating out of political necessity and

447
00:21:58,880 --> 00:22:01,840
Speaker 11: a very we can that he is playing here on immigration.

448
00:22:03,040 --> 00:22:06,280
Speaker 2: Tyler refers to a wildcard being the House map. There's

449
00:22:06,280 --> 00:22:09,320
Speaker 2: another wildcard in the Senate named Lindsay Graham, who is

450
00:22:09,359 --> 00:22:11,320
Speaker 2: the Ellen. At Mike Johnson from the FLOORI today it's

451
00:22:11,320 --> 00:22:13,760
Speaker 2: his birthday. For crying out loud with the speaker's birthday.

452
00:22:14,200 --> 00:22:16,600
Speaker 2: He wants language in this bill. We've talked about this

453
00:22:16,640 --> 00:22:19,240
Speaker 2: before on the program when going into the last shutdown,

454
00:22:19,280 --> 00:22:21,000
Speaker 2: this was an issue. He wants the right to be

455
00:22:21,040 --> 00:22:23,640
Speaker 2: able to sue the government for having his phone records

456
00:22:23,680 --> 00:22:27,440
Speaker 2: accessed by Jack Smith. Remember when Joe Biden at one

457
00:22:27,440 --> 00:22:30,080
Speaker 2: point said every senator is a president because the margins

458
00:22:30,119 --> 00:22:32,520
Speaker 2: so tight. So lindsay, Graham can keep this thing on

459
00:22:32,640 --> 00:22:34,720
Speaker 2: ice as long as he wants, why should he be

460
00:22:34,720 --> 00:22:36,080
Speaker 2: able to sue the government over this?

461
00:22:36,359 --> 00:22:38,480
Speaker 10: Well, look, it's up to Center Graham decide what he

462
00:22:38,520 --> 00:22:41,840
Speaker 10: wants to do here. And look, he's had concerns like

463
00:22:41,880 --> 00:22:45,760
Speaker 10: many Republicans on Capitol Hill regard what happened with Jack Smith.

464
00:22:46,200 --> 00:22:49,959
Speaker 10: The truth is this is something that voters nationwide had

465
00:22:50,000 --> 00:22:53,399
Speaker 10: a concern with. Okay, those megabased Republican based voters. So

466
00:22:53,400 --> 00:22:55,000
Speaker 10: I do think that what CENTA. Graham is doing right

467
00:22:55,000 --> 00:22:58,000
Speaker 10: now is speaking to America's nationwide, particular those base voters

468
00:22:58,000 --> 00:22:58,320
Speaker 10: out there.

469
00:22:58,400 --> 00:22:59,280
Speaker 3: Why is he alone on this?

470
00:22:59,359 --> 00:23:02,120
Speaker 6: Then, well we'll see who else weighs in here.

471
00:23:02,160 --> 00:23:04,440
Speaker 10: I mean, look, as we've seen, anything can happen during

472
00:23:04,480 --> 00:23:07,320
Speaker 10: these government shutdowns or in the lead up to a shutdown.

473
00:23:07,359 --> 00:23:10,320
Speaker 10: It's not uncommon, frankly for lawmakers to want to highlight

474
00:23:10,400 --> 00:23:11,639
Speaker 10: certain things that they care about.

475
00:23:12,040 --> 00:23:13,720
Speaker 6: This is a unique moment right now to do that.

476
00:23:13,760 --> 00:23:16,840
Speaker 10: But in the end, it is truly about keeping the

477
00:23:16,880 --> 00:23:18,880
Speaker 10: government open, or I should say, once a shut down

478
00:23:18,920 --> 00:23:21,800
Speaker 10: shuts down likely this evening, get it back open. And

479
00:23:21,840 --> 00:23:24,400
Speaker 10: that's where the focus needs to be. Frankly for lawmakers

480
00:23:24,440 --> 00:23:27,159
Speaker 10: on Capitol Hill. Look, every lawmaker, Sirta Graham has a

481
00:23:27,240 --> 00:23:29,919
Speaker 10: right to vocalize where he's at on things here right now.

482
00:23:29,920 --> 00:23:31,080
Speaker 6: That's his rise of senator.

483
00:23:31,280 --> 00:23:33,200
Speaker 10: By I think what the American people want right now

484
00:23:33,600 --> 00:23:36,040
Speaker 10: is to get the government back open once it shuts down,

485
00:23:36,320 --> 00:23:38,159
Speaker 10: and really to focus in on the key shoes they

486
00:23:38,160 --> 00:23:38,639
Speaker 10: care about.

487
00:23:38,840 --> 00:23:41,800
Speaker 6: One of those is border security safety.

488
00:23:42,119 --> 00:23:44,160
Speaker 10: That's going to be on the ballot in November, coming

489
00:23:44,200 --> 00:23:45,720
Speaker 10: up here in these intum elections as well.

490
00:23:46,000 --> 00:23:47,879
Speaker 7: Well in our final minute here, Genie, we also want

491
00:23:47,920 --> 00:23:49,200
Speaker 7: to make sure we ask you guys about the other

492
00:23:49,240 --> 00:23:52,200
Speaker 7: top story, Kevin warsh as the Federal Reserve pick. Wondering

493
00:23:52,240 --> 00:23:54,159
Speaker 7: what you make of that, but also the fact that

494
00:23:54,200 --> 00:23:56,480
Speaker 7: when President Trump announced him, he also put out this

495
00:23:56,680 --> 00:23:59,840
Speaker 7: statement in parallel touting his NEC director. Kevin has to

496
00:24:00,000 --> 00:24:02,440
Speaker 7: explaining that he didn't get the job because he wants

497
00:24:02,480 --> 00:24:05,119
Speaker 7: to keep an economic messenger inside the administration.

498
00:24:06,440 --> 00:24:08,640
Speaker 11: Yeah, that's right, the two Kevins, and we know which

499
00:24:08,640 --> 00:24:11,080
Speaker 11: one got the nod. But he's supportive of both. He

500
00:24:11,119 --> 00:24:13,480
Speaker 11: said today in the White House. He likes both. I

501
00:24:13,520 --> 00:24:17,160
Speaker 11: think it's going to be a fascinating confirmation process, given

502
00:24:17,480 --> 00:24:21,919
Speaker 11: particularly how the issue of Jerome Powell, this lawsuit and

503
00:24:21,960 --> 00:24:25,240
Speaker 11: what happens there. So I'm excited for it and it's

504
00:24:25,280 --> 00:24:29,119
Speaker 11: about time, Tyler. We waited for this announcement a long time.

505
00:24:30,800 --> 00:24:33,720
Speaker 2: Genie, thank you so much and Matt. Great conversation and

506
00:24:33,760 --> 00:24:36,280
Speaker 2: an important panel. It sets us up for our late

507
00:24:36,440 --> 00:24:38,240
Speaker 2: edition of Balance of Power. I'll be back here with

508
00:24:38,320 --> 00:24:40,680
Speaker 2: Tyler at five pm Eastern time. Not that we're going

509
00:24:40,720 --> 00:24:42,280
Speaker 2: anywhere now, I just want you to know we'll be

510
00:24:42,359 --> 00:24:44,359
Speaker 2: up on Capitol Hill and we'll be live from the

511
00:24:44,440 --> 00:24:46,800
Speaker 2: Senate to go to the source and find out exactly

512
00:24:46,840 --> 00:24:49,840
Speaker 2: what is going on. Genie Shanz No Bloomberg Politics contributor,

513
00:24:50,000 --> 00:24:53,199
Speaker 2: Matt Terrell, Republican strategist Firehouse. Thank you both for a

514
00:24:53,240 --> 00:24:57,000
Speaker 2: great conversation. Much more ahead, including our conversation with Chairman

515
00:24:57,080 --> 00:24:58,760
Speaker 2: french Hill. We're going to get the view from the

516
00:24:58,760 --> 00:25:01,760
Speaker 2: Republican at the top of the House Financial Services Committee

517
00:25:01,760 --> 00:25:04,719
Speaker 2: when it comes to the confirmation process and the choice

518
00:25:04,840 --> 00:25:07,920
Speaker 2: Kevin Warsh by way of Donald Trump as the next

519
00:25:08,119 --> 00:25:10,680
Speaker 2: Fed share Stay with us on Balance of Power. We'll

520
00:25:10,680 --> 00:25:12,280
Speaker 2: have much more coming up after this.

521
00:25:16,640 --> 00:25:20,120
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

522
00:25:20,160 --> 00:25:23,240
Speaker 1: us live weekdays at noon and five pm Eastern on

523
00:25:23,359 --> 00:25:26,600
Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business App.

524
00:25:26,640 --> 00:25:29,640
Speaker 1: You can also listen live on Amazon Alexa from our

525
00:25:29,680 --> 00:25:31,000
Speaker 1: flagship New York station.

526
00:25:31,560 --> 00:25:34,160
Speaker 3: Just say Alexa play Bloomberg eleven thirty.

527
00:25:35,600 --> 00:25:38,360
Speaker 2: Balance of Power Now the Friday edition, Live from Washington

528
00:25:38,400 --> 00:25:42,560
Speaker 2: with big questions about a government shutdown tonight, a mini shutdown,

529
00:25:42,640 --> 00:25:45,359
Speaker 2: we're calling it, as well as the future of the

530
00:25:45,400 --> 00:25:48,520
Speaker 2: Federal Reserve with Kevin warshtaff by President Trump. Today, we're

531
00:25:48,520 --> 00:25:51,080
Speaker 2: going to talk to Congressman french Hill, who chairs the

532
00:25:51,080 --> 00:25:52,919
Speaker 2: House Financial Services Committee.

533
00:25:53,080 --> 00:25:53,760
Speaker 3: Just moments from now.

534
00:25:53,840 --> 00:25:55,720
Speaker 2: He will join us live from Capitol Hill to get

535
00:25:55,720 --> 00:25:59,000
Speaker 2: his take on all of this. As Jensen Wong keeps

536
00:25:59,040 --> 00:26:02,880
Speaker 2: his eyes on China along with shareholders of Nvidia as

537
00:26:02,920 --> 00:26:04,720
Speaker 2: part of a much bigger picture here when it comes

538
00:26:04,760 --> 00:26:08,320
Speaker 2: to export controls and the US race with China, when

539
00:26:08,320 --> 00:26:10,119
Speaker 2: it comes to the AI spend.

540
00:26:10,480 --> 00:26:12,080
Speaker 3: What about the H two hundreds.

541
00:26:12,080 --> 00:26:14,320
Speaker 2: We've been hearing this back and forth about whether in

542
00:26:14,440 --> 00:26:16,840
Speaker 2: Vidia should be allowed to sell them and about whether

543
00:26:16,960 --> 00:26:19,439
Speaker 2: China wants them. Of course, now they've been cleared for

544
00:26:19,520 --> 00:26:22,720
Speaker 2: sale in China helped the stock a little bit, but

545
00:26:22,800 --> 00:26:26,080
Speaker 2: the CEO of Nvidia, Jensen Wong, says the Chinese government

546
00:26:26,119 --> 00:26:28,760
Speaker 2: has yet to approve the imports Listen.

547
00:26:29,200 --> 00:26:34,520
Speaker 12: I'm hoping that also the Chinese government would allow Nvidia

548
00:26:34,640 --> 00:26:35,960
Speaker 12: to sell in H two hundred.

549
00:26:36,119 --> 00:26:38,520
Speaker 3: So they have to decide, and I'm.

550
00:26:38,400 --> 00:26:42,480
Speaker 12: Looking forward to to a favorable decision. I think that

551
00:26:43,560 --> 00:26:47,359
Speaker 12: H two hundred is very good for America technology leadership,

552
00:26:47,880 --> 00:26:50,800
Speaker 12: is also very good for the Chinese market, and the

553
00:26:50,840 --> 00:26:53,399
Speaker 12: customers would very much like to have AGE two hundred

554
00:26:53,800 --> 00:26:55,960
Speaker 12: and so I'm looking forward to a good decision.

555
00:26:57,880 --> 00:27:00,320
Speaker 2: Speaking to a throng of reporters at the airport in

556
00:27:00,440 --> 00:27:03,879
Speaker 2: taype Ay, it brings us to an important conversation.

557
00:27:03,440 --> 00:27:05,119
Speaker 3: That we've been looking forward to with Navin.

558
00:27:05,119 --> 00:27:07,600
Speaker 2: Garis Shankar, who is the president of Economic Security and

559
00:27:07,680 --> 00:27:11,720
Speaker 2: Technology at the Center for Strategic and International Studies csis

560
00:27:11,800 --> 00:27:13,960
Speaker 2: out with an important new report called tech Edge, a

561
00:27:14,000 --> 00:27:18,439
Speaker 2: living playbook for America's technology long game, and it is

562
00:27:18,480 --> 00:27:21,280
Speaker 2: a long game for Jensen Wong and Nvidia and the

563
00:27:21,320 --> 00:27:23,760
Speaker 2: whole space. Navien, it's great to have you. Welcome to

564
00:27:23,760 --> 00:27:28,199
Speaker 2: Bloomberg TV and Radio once again. First of all, is

565
00:27:28,240 --> 00:27:30,080
Speaker 2: this on or off or what?

566
00:27:31,080 --> 00:27:33,800
Speaker 13: Well, It's hard to tell, but I would actually zoom

567
00:27:33,800 --> 00:27:36,520
Speaker 13: out and say what it underscores is how far the

568
00:27:36,560 --> 00:27:39,760
Speaker 13: debate on export controls has come. It's not simply access

569
00:27:39,760 --> 00:27:44,000
Speaker 13: to a chip. It's around Chinese autonomy who exercises leverage

570
00:27:44,000 --> 00:27:47,640
Speaker 13: in terms ofpsetting the rules of the game. Importantly, it's

571
00:27:47,680 --> 00:27:51,000
Speaker 13: not simply about the chip, It's about the whole AI ecosystem. Yes,

572
00:27:51,240 --> 00:27:53,920
Speaker 13: so I think it's always important to keep those in mind,

573
00:27:53,920 --> 00:27:56,840
Speaker 13: which is really the thrust of our report, because if

574
00:27:56,840 --> 00:27:59,240
Speaker 13: you're trying to play the long game rather than react

575
00:27:59,240 --> 00:28:02,320
Speaker 13: to the news of the moment, you've got to keep

576
00:28:02,320 --> 00:28:06,240
Speaker 13: in mind all the pieces that make China better at

577
00:28:06,320 --> 00:28:08,479
Speaker 13: AI versus the US or vice versa.

578
00:28:08,600 --> 00:28:10,480
Speaker 7: So then what is the sweet spot when it comes

579
00:28:10,560 --> 00:28:13,359
Speaker 7: to with a long game and an administration that wants

580
00:28:13,400 --> 00:28:16,800
Speaker 7: to balance national security concerns but also giving an American

581
00:28:16,840 --> 00:28:18,000
Speaker 7: company market access.

582
00:28:18,400 --> 00:28:21,880
Speaker 13: Absolutely so for US, the ultimate goal is to out innovate,

583
00:28:22,200 --> 00:28:25,439
Speaker 13: out innovate, out innovate. But to do that, it's not

584
00:28:25,520 --> 00:28:28,919
Speaker 13: important that a deepseek moment happens. It's important to know

585
00:28:29,040 --> 00:28:31,720
Speaker 13: why a deep seek moment happens. And the answer to

586
00:28:31,760 --> 00:28:35,680
Speaker 13: that question is the underlying ecosystems, the drive technology innovation,

587
00:28:35,800 --> 00:28:39,200
Speaker 13: commercialization and scaling. How do you move from laboratory to

588
00:28:39,360 --> 00:28:42,239
Speaker 13: factory as quickly as possible? And so the thrust of

589
00:28:42,320 --> 00:28:45,040
Speaker 13: what we've been saying is focus on the drivers, which

590
00:28:45,080 --> 00:28:50,520
Speaker 13: are the ecosystems, and to build dexterity across technologies that matter,

591
00:28:50,600 --> 00:28:53,080
Speaker 13: and how the ones that are interconnected. So it's not

592
00:28:53,120 --> 00:28:56,800
Speaker 13: just AI, it's AI and rare earths, it's AI and

593
00:28:56,880 --> 00:29:01,520
Speaker 13: digital networks. These pieces together generate the types of competitive

594
00:29:01,520 --> 00:29:03,320
Speaker 13: advantage you want to win over the longer.

595
00:29:03,120 --> 00:29:05,360
Speaker 2: Interesting well, when you talk about what's needed to win

596
00:29:05,560 --> 00:29:08,080
Speaker 2: the long game, one of the items you point out

597
00:29:08,120 --> 00:29:11,600
Speaker 2: is defending our networks. Can you do that without more

598
00:29:11,640 --> 00:29:12,920
Speaker 2: severe export controls?

599
00:29:14,800 --> 00:29:18,120
Speaker 13: It's a combination of pieces to defend our networks. One is,

600
00:29:18,200 --> 00:29:21,640
Speaker 13: I would say you want positive incentives to deepen integration

601
00:29:21,760 --> 00:29:24,680
Speaker 13: with partners that you can trust. Obviously we're in a

602
00:29:24,760 --> 00:29:27,320
Speaker 13: very different moment now with some of our traditional allies,

603
00:29:27,360 --> 00:29:29,880
Speaker 13: and that cuts against what we need to win on

604
00:29:30,000 --> 00:29:34,120
Speaker 13: technology leadership. Two is, you do need defensive tools like

605
00:29:34,160 --> 00:29:39,440
Speaker 13: export controls and investment screening, but alone without focusing on

606
00:29:39,480 --> 00:29:43,680
Speaker 13: the incentives or deeper integration, stronger inter firm linkages is

607
00:29:43,680 --> 00:29:45,880
Speaker 13: not going to do the trick. So when we say

608
00:29:45,880 --> 00:29:48,760
Speaker 13: defend the networks, we mean defend the networks of your innovators,

609
00:29:48,760 --> 00:29:53,680
Speaker 13: your traditional trading partners, researchers around the world with whom

610
00:29:53,720 --> 00:29:55,480
Speaker 13: you can have secure collaboration.

611
00:29:55,960 --> 00:29:57,959
Speaker 7: What do you make of the more hands on industrial

612
00:29:58,000 --> 00:30:01,000
Speaker 7: policy that we've seen from the Trump amistry taking stakes

613
00:30:01,040 --> 00:30:03,280
Speaker 7: in some of these companies this week it was USA

614
00:30:03,680 --> 00:30:07,200
Speaker 7: or Earth something about Trilogy Metals, MP Materials, even the

615
00:30:07,200 --> 00:30:09,440
Speaker 7: Golden Share or in the Knee Pond deal that we

616
00:30:09,480 --> 00:30:10,560
Speaker 7: saw struck last year.

617
00:30:10,920 --> 00:30:14,640
Speaker 13: I think it's really important to rely on the stress tested,

618
00:30:14,720 --> 00:30:19,120
Speaker 13: time time tested drivers of innovation that we've known for

619
00:30:19,200 --> 00:30:23,200
Speaker 13: almost two hundred years. And so whenever you have government

620
00:30:23,240 --> 00:30:27,520
Speaker 13: intervention of this kind, whether it's subsidies or direct government ownership,

621
00:30:27,840 --> 00:30:30,080
Speaker 13: you have to ask the question, what is the market

622
00:30:30,080 --> 00:30:33,320
Speaker 13: failure you're solving for? And I don't know if we're

623
00:30:33,320 --> 00:30:36,520
Speaker 13: doing that in as disciplined a way as possible. The risk,

624
00:30:36,760 --> 00:30:40,160
Speaker 13: even as we consider economic security or national security, the

625
00:30:40,280 --> 00:30:42,880
Speaker 13: risk is that it becomes a slippery slope and we

626
00:30:43,000 --> 00:30:47,240
Speaker 13: forget the drivers of the free enterprise system that we have.

627
00:30:47,800 --> 00:30:50,040
Speaker 13: And so I think it's a question of the right balance.

628
00:30:50,520 --> 00:30:57,360
Speaker 13: We emphasize the strong enablers that are needed across technologies, workforce, energy, capital,

629
00:30:57,400 --> 00:31:01,080
Speaker 13: market access. Those sorts of things are in in basic

630
00:31:01,120 --> 00:31:05,040
Speaker 13: and foundational research, all of which do not include government

631
00:31:05,080 --> 00:31:08,280
Speaker 13: ownership of a particular company. Do that make sure that

632
00:31:08,280 --> 00:31:08,920
Speaker 13: that's done.

633
00:31:09,360 --> 00:31:13,080
Speaker 2: It's been fascinating listening recently to the CEO of Anthropic,

634
00:31:13,200 --> 00:31:16,200
Speaker 2: who is continuing to warn us about the very technology

635
00:31:16,200 --> 00:31:20,160
Speaker 2: that he's helping to develop. He compared giving high end

636
00:31:20,280 --> 00:31:24,280
Speaker 2: AI chips to China to providing our nuclear technology to

637
00:31:24,400 --> 00:31:27,600
Speaker 2: North Korea. That's a pretty extreme view. I guess I'm

638
00:31:27,680 --> 00:31:30,400
Speaker 2: wondering when we will know if he's right or wrong.

639
00:31:30,920 --> 00:31:35,479
Speaker 13: The challenges you don't actually know until it's that's not

640
00:31:35,520 --> 00:31:38,880
Speaker 13: the answer we want, right. But I think it's worth

641
00:31:38,960 --> 00:31:43,080
Speaker 13: noting that many of the people who've advocated for taking

642
00:31:43,080 --> 00:31:46,120
Speaker 13: down export controls, when you ask them how do they

643
00:31:46,160 --> 00:31:49,040
Speaker 13: weigh the real national security risks, you don't get a

644
00:31:49,040 --> 00:31:53,280
Speaker 13: great answer. And I'm particularly concerned about civil military fusion

645
00:31:53,720 --> 00:31:56,880
Speaker 13: policy on the part of the PRC. At the same time,

646
00:31:57,440 --> 00:32:00,640
Speaker 13: a strategy that is purely around export controls or purely

647
00:32:00,680 --> 00:32:03,960
Speaker 13: around investment screening also misses the point, which is you

648
00:32:04,040 --> 00:32:07,160
Speaker 13: have to out innovate by strengthening the incentives for us

649
00:32:07,160 --> 00:32:10,320
Speaker 13: to continue to really push the envelope at the cold

650
00:32:10,400 --> 00:32:11,920
Speaker 13: face of technological innovation.

651
00:32:12,400 --> 00:32:13,200
Speaker 3: So it's both.

652
00:32:13,360 --> 00:32:15,560
Speaker 13: And I think the thing I would just mention is

653
00:32:15,600 --> 00:32:19,000
Speaker 13: economic policy has become much more complicated than it was

654
00:32:19,040 --> 00:32:21,760
Speaker 13: in a world where we just had globalization and we

655
00:32:21,800 --> 00:32:24,640
Speaker 13: didn't have to deal with these mercantile and malign threats.

656
00:32:25,160 --> 00:32:27,640
Speaker 13: So it's never going to be an easy answer of

657
00:32:27,680 --> 00:32:30,560
Speaker 13: black and white. And that's kind of an adult conversation

658
00:32:30,680 --> 00:32:32,280
Speaker 13: that we should be having right well.

659
00:32:32,640 --> 00:32:34,360
Speaker 7: Butts in our final minute talk about one of the

660
00:32:34,440 --> 00:32:37,600
Speaker 7: key economic policies of this administration, which is of course tariffs.

661
00:32:37,640 --> 00:32:39,280
Speaker 7: And I'm curious what you make of the fact that

662
00:32:39,280 --> 00:32:42,680
Speaker 7: we've seen a lot of trade deal struck without addressing

663
00:32:42,680 --> 00:32:45,280
Speaker 7: a top us concern when it comes to protecting tech

664
00:32:45,320 --> 00:32:49,719
Speaker 7: company digital services taxes. We saw threats renewed this week.

665
00:32:49,800 --> 00:32:51,840
Speaker 7: I'm not sure what time is right now, a new

666
00:32:51,880 --> 00:32:56,360
Speaker 7: threat on South Korea over how they have treated some

667
00:32:56,480 --> 00:33:00,719
Speaker 7: American tech companies, their allegations that there's unfair tree practices.

668
00:33:01,280 --> 00:33:02,760
Speaker 7: What do you make of this? Is this something that

669
00:33:02,800 --> 00:33:05,600
Speaker 7: the administration should have prioritized in all of the talks

670
00:33:05,680 --> 00:33:07,320
Speaker 7: last year three things.

671
00:33:07,560 --> 00:33:10,360
Speaker 13: I think the administration has focused too much on the

672
00:33:10,400 --> 00:33:16,120
Speaker 13: goods merchandise goods trade deficit rather than services opportunities. Second,

673
00:33:16,560 --> 00:33:18,360
Speaker 13: to the extent that they have said we want to

674
00:33:18,360 --> 00:33:23,280
Speaker 13: bring down non tariff barriers to US services exports, for

675
00:33:23,320 --> 00:33:26,080
Speaker 13: example in Korea, that's a very good thing.

676
00:33:26,520 --> 00:33:28,160
Speaker 6: The issue is to execute on that.

677
00:33:28,280 --> 00:33:31,160
Speaker 13: The issue is to deliver on that. And I think

678
00:33:31,280 --> 00:33:34,360
Speaker 13: third is we could use the tariff agenda as leverage

679
00:33:34,640 --> 00:33:39,040
Speaker 13: more effectively to identify many, many opportunities for US companies

680
00:33:39,040 --> 00:33:42,200
Speaker 13: to go deeper into these markets and support economic integration.

681
00:33:42,400 --> 00:33:44,560
Speaker 13: So I think I would keep the eyes on the

682
00:33:44,560 --> 00:33:45,600
Speaker 13: prize when it comes to that.

683
00:33:45,880 --> 00:33:46,920
Speaker 3: Thank you to be all right.

684
00:33:47,000 --> 00:33:51,240
Speaker 7: Navin Garishankar, President of the Economic Security and Technology Department

685
00:33:51,280 --> 00:33:54,320
Speaker 7: at the Center for Strategic and International Studies and author

686
00:33:54,360 --> 00:33:56,640
Speaker 7: of the new report tech Edge, a living playbook for

687
00:33:56,680 --> 00:33:58,840
Speaker 7: America's technology long game. Thanks so much.

688
00:33:59,000 --> 00:34:01,360
Speaker 3: Stay with us on of Power. We'll have much more

689
00:34:01,400 --> 00:34:02,360
Speaker 3: coming up after this.

690
00:34:07,760 --> 00:34:11,239
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

691
00:34:11,280 --> 00:34:15,200
Speaker 1: us live weekdays at noon and five pm Eastern on Almacarchleay,

692
00:34:15,239 --> 00:34:18,319
Speaker 1: and Android Auto with the Bloomberg Business app. Listen on

693
00:34:18,360 --> 00:34:21,600
Speaker 1: demand wherever you get your podcasts or watch us live

694
00:34:21,680 --> 00:34:22,760
Speaker 1: on YouTube.

695
00:34:23,719 --> 00:34:25,799
Speaker 2: Thanks for being with us again. On the Friday edition

696
00:34:25,840 --> 00:34:27,520
Speaker 2: of Balance of Power. As we try to get our

697
00:34:27,600 --> 00:34:31,200
Speaker 2: arms around the President's decision to tap Kevin Walsh as

698
00:34:31,239 --> 00:34:33,759
Speaker 2: the next FED share, we bring you what is the

699
00:34:33,800 --> 00:34:36,720
Speaker 2: most important interview you're going to hear and see today

700
00:34:36,840 --> 00:34:37,680
Speaker 2: about this topic?

701
00:34:37,760 --> 00:34:38,440
Speaker 3: On Bloomberg.

702
00:34:38,840 --> 00:34:41,960
Speaker 2: The chairman of the House Financial Services Committee is joining

703
00:34:42,000 --> 00:34:43,839
Speaker 2: us live right now from Capitol Hill.

704
00:34:43,880 --> 00:34:45,120
Speaker 3: That, of course would be.

705
00:34:45,040 --> 00:34:49,000
Speaker 2: Republican Congressman French Hill of Arkansas, a former banker now lawmaker,

706
00:34:49,320 --> 00:34:53,759
Speaker 2: who's going to play into, of course, this entire conversation. Congressman,

707
00:34:53,800 --> 00:34:56,000
Speaker 2: it's great to see you, mister chairman. Welcome back to

708
00:34:56,000 --> 00:34:59,080
Speaker 2: Bloomberg TV and Radio. Is the President going to get

709
00:34:59,080 --> 00:35:02,880
Speaker 2: a chair here who now rapidly cuts rates when the

710
00:35:02,920 --> 00:35:05,759
Speaker 2: President wants there's a big question about FED independence and

711
00:35:05,760 --> 00:35:07,200
Speaker 2: I'm wondering what you're thinking today.

712
00:35:08,800 --> 00:35:10,879
Speaker 14: Well, Joe, it's great to be with you. Happy New Year.

713
00:35:10,960 --> 00:35:12,799
Speaker 15: Always good to be with you on a big news

714
00:35:12,920 --> 00:35:17,760
Speaker 15: day like this. I was gratified to see President Trump

715
00:35:17,920 --> 00:35:24,440
Speaker 15: name a very academically, professionally and from a monetary policy

716
00:35:24,520 --> 00:35:29,919
Speaker 15: point of view, qualified individual and Kevin Warsh as his nominee.

717
00:35:29,360 --> 00:35:30,120
Speaker 14: To succeed J.

718
00:35:30,280 --> 00:35:33,520
Speaker 15: Powell as Chairman of the Federal Reserve. Kevin's years of

719
00:35:33,560 --> 00:35:37,720
Speaker 15: experience in financial markets as a former governor of the FED,

720
00:35:38,320 --> 00:35:42,239
Speaker 15: I think keenly have him knowledgeable of the responsibilities and

721
00:35:42,280 --> 00:35:46,880
Speaker 15: the leadership needed to guide the America's Central Bank. And

722
00:35:46,920 --> 00:35:52,359
Speaker 15: I hope that calmer heads will prevail on this investigation

723
00:35:52,520 --> 00:35:58,040
Speaker 15: around Jay Powell, and that we don't have Warsh's nomination

724
00:35:59,160 --> 00:36:00,600
Speaker 15: held up because of that.

725
00:36:00,640 --> 00:36:01,720
Speaker 14: We need that.

726
00:36:01,760 --> 00:36:05,839
Speaker 15: Successive leadership and we need it confirmed and let them

727
00:36:05,920 --> 00:36:06,279
Speaker 15: have some.

728
00:36:08,239 --> 00:36:10,480
Speaker 14: Overlap and be able to work together.

729
00:36:12,160 --> 00:36:15,040
Speaker 7: Well, Senator Tom Tillis says that as of now he's

730
00:36:15,080 --> 00:36:19,279
Speaker 7: going to block that nomination until that legal matter is resolved.

731
00:36:19,400 --> 00:36:21,680
Speaker 7: Are you calling on the Department of Justice to drop

732
00:36:21,760 --> 00:36:24,800
Speaker 7: its investigation into jer Own Powell.

733
00:36:24,960 --> 00:36:27,880
Speaker 15: Well, I know Senator Tillis's point of view, and you

734
00:36:28,000 --> 00:36:32,719
Speaker 15: saw my statement about the investigation of J. Powell on

735
00:36:33,200 --> 00:36:39,759
Speaker 15: potentially having misled Congress about the building renovation plans over

736
00:36:39,880 --> 00:36:40,320
Speaker 15: the FED.

737
00:36:40,920 --> 00:36:42,200
Speaker 14: I think that's a distraction.

738
00:36:42,400 --> 00:36:46,320
Speaker 15: I don't think that's a topic that deserves a DOJ

739
00:36:46,640 --> 00:36:50,320
Speaker 15: investigation in my personal view. I made that clear within

740
00:36:50,520 --> 00:36:54,520
Speaker 15: hours of that public information hitting, and I said part

741
00:36:54,520 --> 00:36:57,160
Speaker 15: of that distraction was this is going to potentially delay

742
00:36:57,200 --> 00:37:02,680
Speaker 15: President Trump's own economic agenda, which includes getting his choice

743
00:37:03,200 --> 00:37:04,360
Speaker 15: confirmed in the Senate.

744
00:37:05,160 --> 00:37:06,640
Speaker 14: So that's why I think it's important.

745
00:37:06,640 --> 00:37:09,600
Speaker 15: I hope that the DOJ can more promptly review the data,

746
00:37:10,080 --> 00:37:12,920
Speaker 15: review their decision, and take a final decision on their

747
00:37:13,800 --> 00:37:15,720
Speaker 15: whether or not they're going to pursue the case.

748
00:37:15,800 --> 00:37:18,280
Speaker 14: I just want people to know publicly.

749
00:37:17,920 --> 00:37:21,680
Speaker 15: This is, as I say, a distraction and could delay

750
00:37:22,080 --> 00:37:24,360
Speaker 15: President Trump's own macroeconomic agenda.

751
00:37:25,640 --> 00:37:28,680
Speaker 2: Well, obviously we're deeply curious to know what the timeline

752
00:37:28,719 --> 00:37:29,960
Speaker 2: is and we don't have a sense of that when

753
00:37:29,960 --> 00:37:32,600
Speaker 2: it comes to the Department of Justice. But assuming this

754
00:37:32,680 --> 00:37:38,000
Speaker 2: has resolved and there's a chair wash in the months ahead,

755
00:37:38,880 --> 00:37:41,480
Speaker 2: mister chairman, I wonder your thoughts on j. Powell staying

756
00:37:41,480 --> 00:37:43,440
Speaker 2: with the FED. He could be there for another two years.

757
00:37:43,480 --> 00:37:44,919
Speaker 2: Would that be a good thing or do you worry

758
00:37:44,960 --> 00:37:47,919
Speaker 2: about having a scenario in which there's a shadow chair

759
00:37:47,960 --> 00:37:48,560
Speaker 2: so to speak.

760
00:37:49,960 --> 00:37:52,719
Speaker 15: Well, I think Chairman Fowl has to take that decision

761
00:37:52,800 --> 00:37:57,279
Speaker 15: once Chairman Walsh has confirmed about whether he'll leave the

762
00:37:57,320 --> 00:38:00,520
Speaker 15: FED at the time of his chair term ending in

763
00:38:00,600 --> 00:38:04,640
Speaker 15: May or continue as a governor. I think a lot

764
00:38:04,680 --> 00:38:07,680
Speaker 15: of that depends on what happens over the next few weeks.

765
00:38:08,440 --> 00:38:10,960
Speaker 15: I think it's important, though, that President Trump have his

766
00:38:11,160 --> 00:38:16,320
Speaker 15: chair nominated and confirmed as effectively as possible, because I

767
00:38:16,360 --> 00:38:18,759
Speaker 15: think that's an important component in making sure we get

768
00:38:18,760 --> 00:38:22,840
Speaker 15: price stability right in conjunction with all the things we're doing,

769
00:38:22,960 --> 00:38:27,120
Speaker 15: Joe to help our economy have a faster growth and

770
00:38:27,239 --> 00:38:30,440
Speaker 15: a sustained growth that benefits all of America's working families.

771
00:38:30,480 --> 00:38:32,680
Speaker 15: We've done a good job on the tax side, preventing

772
00:38:32,719 --> 00:38:36,480
Speaker 15: a huge tax increase on working families. We are lowering

773
00:38:36,560 --> 00:38:40,840
Speaker 15: the regulatory compliance burden on American businesses, particularly small businesses

774
00:38:40,840 --> 00:38:44,880
Speaker 15: and community banks. We're opening up energy markets across the

775
00:38:44,880 --> 00:38:48,319
Speaker 15: country to bring down energy prices. These are all things

776
00:38:48,360 --> 00:38:51,680
Speaker 15: that I think have the promise of giving us good,

777
00:38:51,800 --> 00:38:55,200
Speaker 15: strong economic growth in twenty twenty six, and I just

778
00:38:55,239 --> 00:38:57,960
Speaker 15: don't want to have the monetary policy aspect of that

779
00:38:58,080 --> 00:39:00,839
Speaker 15: be under a shadow in these early months of the year.

780
00:39:02,400 --> 00:39:04,880
Speaker 7: Well as we're thinking about a future FED under a

781
00:39:04,880 --> 00:39:07,960
Speaker 7: potential chair war. She has previously indicated that he'd be

782
00:39:08,000 --> 00:39:11,959
Speaker 7: willing to give up some of the aspects of bank supervision.

783
00:39:12,080 --> 00:39:15,719
Speaker 7: I'm wondering what regulatory rule Congress would be willing to

784
00:39:15,760 --> 00:39:19,000
Speaker 7: step into, if at all. What does this perhaps mean

785
00:39:19,040 --> 00:39:22,520
Speaker 7: for bolstering your own oversight capacity when it comes to

786
00:39:22,560 --> 00:39:23,560
Speaker 7: bank regulations.

787
00:39:24,800 --> 00:39:29,240
Speaker 15: Well, we have a vigorous oversight of bank supervision across

788
00:39:29,320 --> 00:39:33,120
Speaker 15: all the bank regulators, credit union regulators, and we do

789
00:39:33,239 --> 00:39:36,879
Speaker 15: that through both our legislative work on making concrete legislative

790
00:39:36,920 --> 00:39:41,080
Speaker 15: reforms that would tailor that compliance regulation focus it tie

791
00:39:41,080 --> 00:39:46,000
Speaker 15: it to bank complexity, bank size, and we also using

792
00:39:46,640 --> 00:39:50,160
Speaker 15: our influence with the regulators. Brother it's Jonathan Gould at

793
00:39:50,160 --> 00:39:52,680
Speaker 15: the contro of the Currency, Travis Hill at the FDIC,

794
00:39:52,960 --> 00:39:55,440
Speaker 15: or Mickey Bowman, the Vice chairman of the FED, how

795
00:39:55,440 --> 00:39:59,080
Speaker 15: do we have a harmonized, balanced and common approach. We

796
00:39:59,200 --> 00:40:02,560
Speaker 15: got way off track and the Biden administration costs went up.

797
00:40:03,480 --> 00:40:08,040
Speaker 15: I think safety and soundness compliance actually went down as

798
00:40:08,080 --> 00:40:12,160
Speaker 15: the Biden administration focused on things like DEI instead of

799
00:40:12,160 --> 00:40:16,680
Speaker 15: bank safety and soundness. So we want to play a

800
00:40:16,760 --> 00:40:20,560
Speaker 15: role in what the executive branch might consider on any

801
00:40:20,640 --> 00:40:24,960
Speaker 15: reform to that compliance and supervisory process. But to the

802
00:40:24,960 --> 00:40:28,200
Speaker 15: point you mentioned about the FED and their role of

803
00:40:28,239 --> 00:40:33,040
Speaker 15: supervising large banks and bank holding companies, trying to consolidate

804
00:40:33,120 --> 00:40:37,000
Speaker 15: that effort's and that's an idea as old as the

805
00:40:37,040 --> 00:40:39,720
Speaker 15: Fed's creation itself back in nineteen thirteen.

806
00:40:41,400 --> 00:40:42,080
Speaker 3: Mister Chairman.

807
00:40:42,440 --> 00:40:46,040
Speaker 2: There's a hope that lower interest rates would help to

808
00:40:46,160 --> 00:40:50,399
Speaker 2: unlock some motion in the housing market here. And this

809
00:40:50,440 --> 00:40:52,640
Speaker 2: is something the President has expressed a lot of concern

810
00:40:52,680 --> 00:40:54,879
Speaker 2: about because if you start to get to this as well,

811
00:40:54,880 --> 00:40:58,400
Speaker 2: he's worried that you start to raid people's nest eggs

812
00:40:58,400 --> 00:41:02,160
Speaker 2: if housing values start to come down. You were right

813
00:41:02,200 --> 00:41:04,799
Speaker 2: here on Bloomberg TV and Radio after you passed your

814
00:41:04,840 --> 00:41:08,680
Speaker 2: housing bill out of committee that would cut red tape

815
00:41:08,880 --> 00:41:12,040
Speaker 2: and spurn more building here. The Majority leaders signaled that

816
00:41:12,120 --> 00:41:14,799
Speaker 2: would be coming soon in an interview. Do you have

817
00:41:14,840 --> 00:41:16,239
Speaker 2: a sense of timeline on this.

818
00:41:17,800 --> 00:41:18,560
Speaker 14: Well, Joe, I do.

819
00:41:18,719 --> 00:41:21,440
Speaker 15: I think our twenty first Century Housing Act focus on

820
00:41:21,480 --> 00:41:24,120
Speaker 15: the supply. We want to lower the cost of constructing

821
00:41:24,160 --> 00:41:27,360
Speaker 15: housing and we ought to we want to increase the supply.

822
00:41:27,440 --> 00:41:29,960
Speaker 15: It's not a demand oriented bill, and I think that's

823
00:41:29,960 --> 00:41:32,080
Speaker 15: what we need right now. I think there are other

824
00:41:32,120 --> 00:41:34,960
Speaker 15: ways to tackle it as well, and my friends on

825
00:41:35,000 --> 00:41:37,759
Speaker 15: the House Ways and Means Committee have approaches they might

826
00:41:37,800 --> 00:41:40,880
Speaker 15: want to take that could unlock housing and increased supply.

827
00:41:41,360 --> 00:41:43,520
Speaker 15: So if you have lowering interest rates and you have

828
00:41:43,760 --> 00:41:47,240
Speaker 15: the a red tape cut which we propose in twenty

829
00:41:47,239 --> 00:41:50,239
Speaker 15: first century housing, and you combine that with freeing up

830
00:41:50,280 --> 00:41:54,320
Speaker 15: our community banks to make loans, which is an objective

831
00:41:54,360 --> 00:41:57,919
Speaker 15: we have in our Main Street Capital Access Act, that's

832
00:41:57,960 --> 00:42:03,480
Speaker 15: a perfect way to block housing availability to more families

833
00:42:03,840 --> 00:42:05,760
Speaker 15: through lower cost and more supply.

834
00:42:06,440 --> 00:42:08,640
Speaker 14: I hope that that bill can come to the House

835
00:42:08,719 --> 00:42:12,160
Speaker 14: floor in just a few days. I really am pushing

836
00:42:12,560 --> 00:42:14,360
Speaker 14: for that. I think it's the right decision.

837
00:42:14,400 --> 00:42:19,560
Speaker 15: I've told President Trump that housing and housing availability, housing accessibility,

838
00:42:19,560 --> 00:42:22,880
Speaker 15: and housing costs are absolutely at the top of the

839
00:42:22,920 --> 00:42:25,760
Speaker 15: agenda for the American people, families all over this country.

840
00:42:26,239 --> 00:42:28,600
Speaker 15: And with his help, we can get this bill passed

841
00:42:28,600 --> 00:42:30,200
Speaker 15: in the House and signed into law.

842
00:42:31,360 --> 00:42:33,520
Speaker 7: In the final minute we have you, Terra Hill, do

843
00:42:33,560 --> 00:42:36,439
Speaker 7: you have a date set yet for Jerom Powell's semi

844
00:42:36,480 --> 00:42:39,880
Speaker 7: annual testimony to Congress and do you expect him to

845
00:42:40,080 --> 00:42:41,000
Speaker 7: make that appearance.

846
00:42:42,360 --> 00:42:42,719
Speaker 14: I do.

847
00:42:42,800 --> 00:42:45,400
Speaker 15: I expect Chairman Power to appear before the committee. We

848
00:42:45,480 --> 00:42:48,120
Speaker 15: are working with his office to set that date. We

849
00:42:48,200 --> 00:42:50,960
Speaker 15: also tend to coordinate that very carefully with the Senate

850
00:42:51,000 --> 00:42:54,360
Speaker 15: Banking Committee, as well, so that those testimonies are in

851
00:42:54,440 --> 00:42:57,160
Speaker 15: the same week and that work continues. But we look

852
00:42:57,200 --> 00:43:00,400
Speaker 15: forward to having Chairman Power to talk about his Humphrey

853
00:43:00,400 --> 00:43:05,360
Speaker 15: Hawkins Humphrey Hawkins obligation to give his semi annual monetary

854
00:43:05,360 --> 00:43:06,440
Speaker 15: policy testimony.

855
00:43:06,960 --> 00:43:08,440
Speaker 3: Yeah, that's news, mister Chairman.

856
00:43:08,480 --> 00:43:11,239
Speaker 2: There had been thought that he might not be able

857
00:43:11,280 --> 00:43:14,239
Speaker 2: to or willing to appear. How about the Treasury Secretary

858
00:43:14,320 --> 00:43:17,920
Speaker 2: in our remaining moments, do you have an opportunity to

859
00:43:18,000 --> 00:43:20,960
Speaker 2: bring Scott Bessett before the Committee for testimony?

860
00:43:21,000 --> 00:43:21,200
Speaker 9: Soon?

861
00:43:23,440 --> 00:43:26,840
Speaker 15: Secretary Busset will be back before the Committee in really

862
00:43:26,960 --> 00:43:30,200
Speaker 15: hours rather than days, and we look forward to talking

863
00:43:30,200 --> 00:43:32,960
Speaker 15: to him and his opportunity to be before the Committee

864
00:43:32,960 --> 00:43:35,759
Speaker 15: and answer the Committee's questions. And I want to say

865
00:43:35,800 --> 00:43:38,320
Speaker 15: as we wrap up, what a great job he did

866
00:43:38,719 --> 00:43:42,520
Speaker 15: on providing excellent candidates for President Trump's consideration to be

867
00:43:42,560 --> 00:43:45,760
Speaker 15: the next chairman of the Fed. Treasure Secretary Busset managed

868
00:43:45,760 --> 00:43:47,240
Speaker 15: a terrific process.

869
00:43:48,560 --> 00:43:48,960
Speaker 10: All right.

870
00:43:49,040 --> 00:43:52,640
Speaker 7: Congressman Frendshill, Republican representing Arkansas second District and the chair

871
00:43:52,680 --> 00:43:55,080
Speaker 7: of the House Financial Services Committee, thanks so much for

872
00:43:55,160 --> 00:43:57,640
Speaker 7: joining us here Bloomberg Television and Radio.

873
00:44:00,200 --> 00:44:03,399
Speaker 2: Thanks for listening to the Balance of Power podcast. Make

874
00:44:03,440 --> 00:44:06,400
Speaker 2: sure to subscribe if you haven't already, at Apple, Spotify,

875
00:44:06,480 --> 00:44:09,040
Speaker 2: or wherever you get your podcasts, and you can find

876
00:44:09,120 --> 00:44:12,320
Speaker 2: us live every weekday from Washington, DC at noontime Eastern

877
00:44:12,640 --> 00:44:14,120
Speaker 2: at Bloomberg dot com