WEBVTT - Looking Ahead to First US Jobs Report of 2025 0:00:00.080 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:12.680 This is Bloomberg Business Week Insight from the reporters and 0:00:12.800 --> 0:00:16.800 editors that bring you America's most trusted business magazine, plus 0:00:17.000 --> 0:00:20.799 global business, finance and tech news. The Bloomberg Business Week 0:00:20.840 --> 0:00:25.760 Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio, 0:00:26.840 --> 0:00:27.720 so focal. 0:00:27.480 --> 0:00:28.960 Point for investors and the Fed. 0:00:29.000 --> 0:00:31.880 Tomorrow morning's monthly jobs report, we'll have that at eight 0:00:31.960 --> 0:00:35.760 thirty am Wall Street time. The expected upcoming annual January 0:00:35.760 --> 0:00:39.040 revision to US job growth will be substantial, but probably 0:00:39.040 --> 0:00:42.520 not as bad as initially estimated, underscoring tim a labor 0:00:42.560 --> 0:00:43.960 market that is gradually cooling. 0:00:44.120 --> 0:00:45.760 With more on what's to watch for, We've got a 0:00:45.760 --> 0:00:49.599 Bloomberg News Bloomberg Economics US economist start Paul joining us 0:00:49.600 --> 0:00:52.440 here in the studio along with Bloomberg's Vince Signerella to 0:00:52.440 --> 0:00:55.560 connect the dots between the data and the markets. Really 0:00:55.560 --> 0:00:57.640 please to have both of them here in the studio 0:00:57.680 --> 0:01:02.280 with Stuart. I do want to start with you, what 0:01:02.480 --> 0:01:06.280 is the number expected tomorrow consensus versus what Bloomberg Economics 0:01:06.280 --> 0:01:07.920 expects for payrolls. 0:01:07.959 --> 0:01:11.119 We're expecting two hundred and fifteen thousand jobs. In January, 0:01:11.160 --> 0:01:15.480 consensus is closer to around one seventy. But if you 0:01:15.560 --> 0:01:18.160 listen to the whispers on Wall Street, folks are really 0:01:18.160 --> 0:01:21.280 inching up towards that two hundred thousand mark. There were 0:01:21.280 --> 0:01:25.040 strong economic fundamentals throughout the month. We saw hiring accelerating 0:01:25.080 --> 0:01:29.759 as reported in pmis adp surprise to the upside. Also, 0:01:31.600 --> 0:01:33.440 we also do have to take account of the fact 0:01:33.440 --> 0:01:36.480 that there was a polar vortex in that lower forty 0:01:36.480 --> 0:01:40.040 eight states, and we also had wildfires in Los Angeles, 0:01:40.120 --> 0:01:43.960 shaving a few thousand jobs off the January report. 0:01:44.080 --> 0:01:48.280 So in other words, they actually the job market might 0:01:48.280 --> 0:01:51.800 be stronger than we think because of those special instances. 0:01:51.920 --> 0:01:56.520 Well, so the amount of hiring in January was relatively robust. 0:01:56.680 --> 0:01:58.560 But if we think about all those revisions that you 0:01:58.600 --> 0:02:01.480 are mentioning, it's going to were the base against which 0:02:01.520 --> 0:02:05.559 we're measuring January payroll growth. As you mentioned, through March 0:02:05.640 --> 0:02:07.360 of twenty twenty four, we're going to get a downward 0:02:07.440 --> 0:02:11.120 revision we think of about seven hundred thousand jobs, less 0:02:11.160 --> 0:02:14.480 than the eight hundred and eighteen thousand originally estimated. Then 0:02:14.520 --> 0:02:17.440 we get revisions of the birth death model through the 0:02:17.600 --> 0:02:20.079 end of twenty twenty four, that's going to shave off. 0:02:20.120 --> 0:02:22.720 We think about another two hundred and thirty five thousand jobs, 0:02:23.040 --> 0:02:26.119 bringing total payrolls at the end of twenty twenty four 0:02:26.360 --> 0:02:28.919 down by about nine hundred and thirty five thousand jobs. 0:02:29.240 --> 0:02:31.920 Adding two hundred and fifteen thousand in January is great, 0:02:32.200 --> 0:02:34.760 but it doesn't mean that we're breaching where that high 0:02:34.800 --> 0:02:37.200 water mark that we thought we had already set. 0:02:37.320 --> 0:02:39.919 All right, So Vince, you know you watch the ins 0:02:39.919 --> 0:02:41.760 and outs of the market. I mean, do traders care 0:02:41.760 --> 0:02:42.880 about these kind of revisions? 0:02:43.400 --> 0:02:46.720 They didn't last year for whatever reason, might they this year? 0:02:46.919 --> 0:02:47.320 They might? 0:02:47.400 --> 0:02:49.600 And it might be more of a political hint of 0:02:49.639 --> 0:02:52.359 things than anything else, especially with all the stuff that's 0:02:52.400 --> 0:02:55.079 going on and rumors with Doge and all this stuff 0:02:55.880 --> 0:02:58.520 that maybe things aren't as up and up, if you will. 0:02:58.600 --> 0:03:02.080 But to serious point, traders are looking for a number 0:03:02.120 --> 0:03:04.440 closer to two hundred thousand tomorrow. So I think I 0:03:04.520 --> 0:03:07.120 agree with him. I think the asymmetric risk is we 0:03:07.160 --> 0:03:09.600 see a higher number tomorrow, which is definitely going to 0:03:09.639 --> 0:03:12.079 probably weigh on treasury yields and maybe even on equities 0:03:12.080 --> 0:03:13.040 at least for the short run. 0:03:13.440 --> 0:03:16.040 Evin's how does they contrast to it sort of in 0:03:16.160 --> 0:03:18.880 weight of importance to I mean, Carol said, it feels 0:03:18.880 --> 0:03:19.600 like Friday. 0:03:19.360 --> 0:03:20.600 Because it's quite a week. 0:03:20.639 --> 0:03:24.160 But which where we focused early in early in the week, 0:03:24.200 --> 0:03:27.280 that was all anyone could talk about. Yeah, what's the 0:03:27.320 --> 0:03:29.920 distinction there between what traders are focused on, the eco data, 0:03:30.240 --> 0:03:31.520 what comes out of the White House when it comes 0:03:31.560 --> 0:03:32.360 to tariff's and trade. 0:03:32.760 --> 0:03:34.080 How do you make sense? So it flipped. 0:03:34.240 --> 0:03:36.920 I mean, no one cared about jobs when the tariff 0:03:37.440 --> 0:03:40.280 news was out. When you were looking at twenty five 0:03:40.320 --> 0:03:43.280 percent tariffs on both Canada and Mexico, ten percent going 0:03:43.280 --> 0:03:45.400 out to China, that was the big deal. When that 0:03:45.520 --> 0:03:48.840 was on pause, Bang, back to economic data, back to earnings. 0:03:49.120 --> 0:03:50.120 That's now the focus. 0:03:50.880 --> 0:03:52.640 A couple of weeks from now, three weeks from now, 0:03:52.680 --> 0:03:56.320 whenever this pause ends, if we go back to tariff's again, 0:03:56.360 --> 0:03:58.960 we're going to flip again. It'll be tariff news that weighs. 0:03:59.160 --> 0:04:01.160 And I said what best and said today in market's 0:04:01.200 --> 0:04:03.680 not picking up on He basically said, China is going 0:04:03.720 --> 0:04:06.520 to be the ones eating the cost of these tariffs. 0:04:06.880 --> 0:04:09.320 That means the tariffs and China are going anywhere and 0:04:09.360 --> 0:04:13.680 could possibly be increased so that may sort of even 0:04:13.720 --> 0:04:15.920 things out with both data and tariffs come back into 0:04:15.960 --> 0:04:16.440 the nature. 0:04:16.480 --> 0:04:19.200 Do you agree Stuart, that China is going to be 0:04:19.240 --> 0:04:20.520 the ones eating the tariffs? 0:04:20.640 --> 0:04:23.000 I think when it comes to prices, I do expect 0:04:23.080 --> 0:04:25.799 China to eat a large chunk of of the tariffs. 0:04:25.800 --> 0:04:28.760 There are too many margins along which prices can adjust 0:04:29.240 --> 0:04:31.800 before it gets before consumer goods get to the shell 0:04:32.800 --> 0:04:33.360 cut field. 0:04:33.360 --> 0:04:35.719 Reduce prices ahead of the tariff. 0:04:35.440 --> 0:04:38.200 So China can lower trying to can lower their prices 0:04:38.400 --> 0:04:40.520 as they're heading out of the port. You can end 0:04:40.560 --> 0:04:43.840 up seeing further dollar appreciation that helps to office at 0:04:43.880 --> 0:04:46.080 the effect of tariffs. When it comes to consumer prices. 0:04:46.440 --> 0:04:49.440 When you look within the federal government data and you 0:04:49.480 --> 0:04:53.080 look at corporate profits, at least in the aggregate, there 0:04:53.120 --> 0:04:55.040 is room for a compression there. So there are all 0:04:55.080 --> 0:05:00.560 these margins again against which prices can adjust before get 0:05:00.560 --> 0:05:03.000 to the shelves for consumers. So who's gonna end up 0:05:03.000 --> 0:05:05.720 feeling the pain Probably China a bit more than US 0:05:05.760 --> 0:05:08.159 consumers for that specific set of goods. 0:05:08.240 --> 0:05:12.880 So you're saying, like a manufacturer who manufactures over in China, 0:05:12.960 --> 0:05:15.680 even though it might be an American company, the manufacturer 0:05:15.720 --> 0:05:17.400 in China is going to say, we're going to cut 0:05:17.400 --> 0:05:19.800 your costs, so we're going to eat some of that 0:05:20.040 --> 0:05:21.919 over there, So that once the tariff has put it 0:05:22.000 --> 0:05:24.280 on the American consumer, it doesn't feel. 0:05:24.320 --> 0:05:27.520 You have manufacturers, you have importers, you have wholesalers, and 0:05:27.560 --> 0:05:30.520 then you have retailers all along that chain. You have 0:05:30.839 --> 0:05:33.159 room for compression before consumers feel the pain. 0:05:33.279 --> 0:05:35.520 Vince, What is it like though, Like in this environment, 0:05:35.680 --> 0:05:39.160 like we've seen Donald Trump in the White House before, 0:05:39.240 --> 0:05:42.280 it does feel a little bit different. But there is 0:05:42.320 --> 0:05:44.320 a lot coming out investors and trying to figure out 0:05:44.360 --> 0:05:46.760 what's the sticky stuff. What's the stuff that really sticks around? 0:05:46.920 --> 0:05:50.440 Is it tariffs? Is it tax cuts? Is it I 0:05:50.480 --> 0:05:53.000 don't know? Or is it like what is it? 0:05:53.040 --> 0:05:53.160 So? 0:05:53.720 --> 0:05:54.440 How do you make sense? 0:05:54.839 --> 0:05:57.120 I think we have to think the tariffs are going 0:05:57.160 --> 0:05:59.960 to be here? He ran on tariffs. He's thinking about 0:06:00.000 --> 0:06:03.159 putting across the board tariffs which nobody's talking about of 0:06:03.240 --> 0:06:06.080 two and a half percent or higher. It's in the background. 0:06:06.120 --> 0:06:08.240 He's not even brought it up too much, but it 0:06:08.279 --> 0:06:10.520 is in the conversation in the White House that two 0:06:10.560 --> 0:06:12.760 and a half percent to maybe five percent tariffs could 0:06:12.800 --> 0:06:16.200 come out across the board on every product. We're not 0:06:16.240 --> 0:06:19.520 seeing that yet. That may not come forward, but they're 0:06:19.720 --> 0:06:21.840 they're talking in the White House and it's not practical, 0:06:22.080 --> 0:06:24.640 but that they're thinking in the White House that they 0:06:24.680 --> 0:06:29.880 can use tariffs to either reduce or eliminate the income tax. Now, 0:06:30.400 --> 0:06:33.520 US consumer would obviously love that we'll pay You don't 0:06:33.520 --> 0:06:37.159 pay a tax unless you buy something. Probably, I mean, 0:06:37.200 --> 0:06:41.240 realistically not going to happen that it can compensate. But 0:06:41.600 --> 0:06:44.520 I believe they think that they can do some form 0:06:44.600 --> 0:06:47.760 of tariffs to raise some revenue along with the cutting 0:06:47.839 --> 0:06:52.160 of expenses, that they can cut taxes to appease the 0:06:52.279 --> 0:06:56.279 voter base, and to just to promise to deliver on 0:06:56.320 --> 0:06:56.839 what he promised. 0:06:56.960 --> 0:06:57.680 You know, I think about what. 0:06:57.680 --> 0:07:00.480 You just said, Stuart, because as an economist, you know, 0:07:01.080 --> 0:07:03.919 you have to figure out again how long these tariffs 0:07:03.920 --> 0:07:06.360 stick around. If there's more that are put on. I 0:07:06.480 --> 0:07:09.760 understand that China can eat some of it, perhaps, but 0:07:09.800 --> 0:07:11.880 there's got to be ultimately an impact on some US 0:07:11.920 --> 0:07:12.600 companies too. 0:07:13.040 --> 0:07:15.280 Sure there are an impact on US companies and. 0:07:15.280 --> 0:07:17.240 Growth ultimately maybe here in the US and. 0:07:17.280 --> 0:07:19.200 Growth, that's right. So the first element that you have 0:07:19.240 --> 0:07:22.080 to deal with on the growth when it comes to 0:07:22.120 --> 0:07:24.400 growth is that before tariffs are implement that you have 0:07:24.440 --> 0:07:29.320 a surge in imports, and that starts the way on growth. 0:07:29.360 --> 0:07:33.960 With the implementation of tariffs on Canada and Mexico delayed 0:07:34.160 --> 0:07:37.960 until March, again, expect to see as much importing of 0:07:38.000 --> 0:07:41.000 goods from those two trading partners in advance of announced 0:07:41.000 --> 0:07:43.800 tariffs or any sort of agreement during the first quarter. 0:07:43.840 --> 0:07:46.000 So that's going to weigh on growth immediately. Then the 0:07:46.040 --> 0:07:50.320 growing pains that come with reorienting supply chains does weigh 0:07:50.360 --> 0:07:54.120 on growth as well. So I'm certainly not dismissing those 0:07:54.760 --> 0:07:58.560 as a geopolitical tool, though in sort of trying to 0:07:58.640 --> 0:08:02.440 position the US visa China, it makes sense that Trump 0:08:02.480 --> 0:08:05.120 would look to keep those tariffs in place where it 0:08:05.160 --> 0:08:07.240 gets to be a little bit simpler of a relationship, 0:08:07.320 --> 0:08:10.280 let's say, with the US and Canada. It doesn't make 0:08:10.280 --> 0:08:14.440 as much sense to be as harsh with tariffs on Canada, 0:08:14.480 --> 0:08:17.880 for example, and because most of the net exports that 0:08:18.400 --> 0:08:22.080 Canada is sending our way are energy products, and Trump 0:08:22.160 --> 0:08:24.120 isn't going to want to deal with higher energy prices, 0:08:24.400 --> 0:08:26.200 especially if that does ripple through to. 0:08:26.200 --> 0:08:26.720 The gas pump. 0:08:26.880 --> 0:08:28.320 If I want to give you the last word on 0:08:28.320 --> 0:08:30.440 the trade. When you say that the market's not picking 0:08:30.520 --> 0:08:33.679 up on what you think the president has communicated with 0:08:33.760 --> 0:08:36.320 regard to tariffs, what exactly do you mean? What do 0:08:36.360 --> 0:08:38.520 you think where do you think prices should be? 0:08:38.800 --> 0:08:42.240 Well, I don't think they're taking it seriously that tariffs 0:08:42.240 --> 0:08:45.040 are coming. I mean, let's not forget we already have 0:08:45.120 --> 0:08:47.640 tariffs in China that he imposed in his first term. 0:08:47.800 --> 0:08:50.240 They're still on the Biden administrations and takes them off, 0:08:50.480 --> 0:08:53.360 so it's not like he's opposed to doing this. I 0:08:53.400 --> 0:08:56.920 think what the tariffs and the situation with Canada and Mexico, 0:08:57.480 --> 0:09:00.680 the thought process on the street was if I'll slap 0:09:00.679 --> 0:09:02.480 my friends around, imagine what I could do to you 0:09:02.600 --> 0:09:03.199 China and Europe. 0:09:03.200 --> 0:09:04.280 And let's not forget Europe. 0:09:04.559 --> 0:09:07.520 He really has the hots for putting tariffs on Europe 0:09:07.600 --> 0:09:08.280 and they're coming. 0:09:08.400 --> 0:09:09.400 They will be coming. 0:09:09.640 --> 0:09:11.600 So I think he's going to like counter in Mexico 0:09:12.000 --> 0:09:16.680 off easy with maybe some minor tariffs just to just 0:09:16.720 --> 0:09:19.079 because of the fentantal situation until that comes under control 0:09:19.120 --> 0:09:22.120 of immigration. But I think China and Europe are going 0:09:22.120 --> 0:09:23.880 to pay the price of this, and the UK eventually 0:09:23.920 --> 0:09:24.280 as well. 0:09:24.360 --> 0:09:26.160 All right, well we're going to be on tariff watch, 0:09:26.200 --> 0:09:27.720 that's for sure. All right, guys, thank you so much. 0:09:27.800 --> 0:09:31.199 Vince Nurella here in studio, global macro strategist at Bloomberg News, 0:09:31.240 --> 0:09:35.280 and of course our Stuart paul Us economist at Bloomberg Economics. 0:09:35.800 --> 0:09:39.360 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:39.440 --> 0:09:42.880 live weekday afternoons from two to five pm Eastern. Listen 0:09:42.920 --> 0:09:46.439 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:09:46.640 --> 0:09:48.440 or watch us live on YouTube. 0:09:49.360 --> 0:09:52.400 Let's get to our latest on Elon and his work 0:09:52.440 --> 0:09:55.560 there at the US government the Washington Post. We do 0:09:55.600 --> 0:09:58.679 want to point out reports that representatives from Elon Musk's 0:09:58.720 --> 0:10:02.600 DOGE have fed sensitive data from across the Education Department 0:10:02.720 --> 0:10:06.360 into AI software to probe the agency's programs and spending. 0:10:06.400 --> 0:10:09.360 This according to two people with knowledge of the DOSE 0:10:09.440 --> 0:10:11.920 team's actions. Again, this is coming from the Washington Post. 0:10:12.240 --> 0:10:14.959 All of this coming on the back of Elon Musk's 0:10:14.960 --> 0:10:17.320 efforts into the US Treasury, which came to. 0:10:17.360 --> 0:10:18.200 Light this past week. 0:10:18.240 --> 0:10:20.240 We've been talking about a lot here at Bloomberg, and 0:10:20.280 --> 0:10:22.559 it brings us to what is the most read story 0:10:22.600 --> 0:10:26.080 on the Bloomberg today about how Elon and his efficiency team, 0:10:26.360 --> 0:10:29.040 who have gained access to the Treasury Department's computer network, 0:10:29.040 --> 0:10:32.199 have caused alarm and sparked a stand up between bureaucrats 0:10:32.360 --> 0:10:35.719 and President Trump's administration with more. We welcome in Ted Man. 0:10:35.720 --> 0:10:38.360 He's Bloomberg News, Money and Influence reporter. He's out there 0:10:38.360 --> 0:10:41.440 in our DC bureau. Ted a lot of places to go, 0:10:41.480 --> 0:10:43.559 and we know we heard from the US Treasury Secretary 0:10:43.559 --> 0:10:44.880 on that. We'll get to that in a moment, but 0:10:44.920 --> 0:10:48.000 give us an update update in terms of the work 0:10:48.200 --> 0:10:50.760 that Elon Musk and the Dosee team have been doing 0:10:50.800 --> 0:10:53.040 specifically at the Treasury and the type of back and 0:10:53.080 --> 0:10:54.280 forth we've been seeing. 0:10:55.800 --> 0:10:59.199 Well, thanks for having me. The work that they're doing 0:10:59.360 --> 0:11:02.440 is primary, rarely focused on the information systems that flow 0:11:02.520 --> 0:11:05.920 through the Treasury. That's information on all the payments that 0:11:05.960 --> 0:11:11.320 the US government makes, all the identifications of programs and individuals, 0:11:11.400 --> 0:11:14.200 and all of the stores of information that are contained 0:11:14.240 --> 0:11:18.079 inside that agency. The fact that this team of relative 0:11:18.160 --> 0:11:21.120 unknowns were able to so quickly get access to that 0:11:21.200 --> 0:11:26.319 information alarmed members of both parties in Congress, even Republicans. 0:11:26.520 --> 0:11:30.360 We reported this morning that five or six Republican senators 0:11:30.400 --> 0:11:34.000 have privately lodged objections to the White House when that 0:11:34.120 --> 0:11:40.160 became clear, because it's really unprecedented to have relative newcomers 0:11:40.360 --> 0:11:46.160 crawling through the very most secret forms of information contained 0:11:46.160 --> 0:11:47.280 within the Treasury Department. 0:11:47.600 --> 0:11:51.839 What did the GOP senators take issue with? According to 0:11:51.920 --> 0:11:54.240 your reporting, the. 0:11:55.240 --> 0:11:57.400 Best that we have been able to understand is that 0:11:57.480 --> 0:11:59.199 there was a feeling that this was a little bit 0:11:59.240 --> 0:12:02.439 too big brother. That's how one person put it, that 0:12:02.480 --> 0:12:07.360 this is going deep into personally identifiable information. There was 0:12:07.559 --> 0:12:09.440 in the some of the early reporting this sense that 0:12:09.480 --> 0:12:13.439 the government that these staffers were really getting a very 0:12:13.520 --> 0:12:16.840 up close and personal view of what individual information was 0:12:16.920 --> 0:12:20.320 within the Treasury Department, and they were lodging objection to that, 0:12:20.480 --> 0:12:22.280 saying that it was, you know, the sort of thing 0:12:22.320 --> 0:12:26.800 that bothered them as being overly invasive and really uncontrolled. 0:12:26.840 --> 0:12:29.840 We don't really have any sort of precedent for this 0:12:29.920 --> 0:12:30.520 kind of behavior. 0:12:30.679 --> 0:12:32.360 Who is on the Doze team? 0:12:32.360 --> 0:12:33.840 And we're gonna hear a little bit later on this 0:12:33.960 --> 0:12:37.000 hour and about twenty minutes time or so the Treasury 0:12:37.000 --> 0:12:38.880 Secretary dressing some of those officials. 0:12:38.880 --> 0:12:42.439 But what do we know about who is the DOGE team? 0:12:43.720 --> 0:12:46.000 And the qualifications well, in. 0:12:45.920 --> 0:12:48.560 Terms of people at Treasury, one thing that we reported 0:12:48.559 --> 0:12:52.280 this morning, which the Secretary confirmed later on in his 0:12:52.480 --> 0:12:56.840 Bloomberg interview is Tom Krause, who's one of those DOGE 0:12:56.840 --> 0:13:00.240 officials and is now at Treasury, is someone that's Scott 0:13:00.280 --> 0:13:03.520 Besson interviewed in December when he was putting together his team, 0:13:03.600 --> 0:13:06.960 and that in that conversation they discussed this very level 0:13:07.120 --> 0:13:11.040 of perusal of the forms and systems within the Treasury 0:13:11.120 --> 0:13:14.880 Department that is now underway. And what that shows is 0:13:14.920 --> 0:13:17.439 that while you have Republicans on the Hill being a 0:13:17.440 --> 0:13:21.040 little unnerved not having expected this to happen, Scott Besson 0:13:21.120 --> 0:13:23.400 himself is much more on board with this than a 0:13:23.400 --> 0:13:25.240 lot of people may have previously assumed. 0:13:25.800 --> 0:13:28.960 I'm curious what you know. We've learned quite a bit 0:13:29.000 --> 0:13:33.120 from Scott Bessen thanks to Silia Mosen's interview with him 0:13:33.120 --> 0:13:36.480 a little earlier today. He did say that he personally 0:13:36.559 --> 0:13:39.959 vetted Treasury employees and that they only have read only 0:13:40.040 --> 0:13:42.560 access to federal payment data and there's been no tinkering 0:13:42.559 --> 0:13:47.280 with the department's payment systems. Does your reporting align. 0:13:46.960 --> 0:13:51.160 With that, Yeah, that's been the biggest question, and certainly 0:13:51.320 --> 0:13:53.640 on the Democratic side of the aisle, there was great 0:13:53.679 --> 0:13:55.880 alarm at this notion that they were getting in there 0:13:55.920 --> 0:13:59.040 in these systems and potentially altering code, doing things that 0:13:59.320 --> 0:14:02.840 went beyond simply looking at this information, which is unusual enough, 0:14:02.840 --> 0:14:05.079 but actually changing what was in there. So this is 0:14:05.080 --> 0:14:07.360 the first time we've had the Treasury Secretary saying no, 0:14:07.559 --> 0:14:12.200 that was not occurring. They had previously sent a letter 0:14:12.240 --> 0:14:15.680 to the Hill in response to some lawmakers, including Senator 0:14:15.760 --> 0:14:18.839 Ron Wyden, but even the letter itself seemed to say 0:14:18.880 --> 0:14:21.280 that they didn't currently have anything that went beyond read 0:14:21.360 --> 0:14:25.200 only access. What Besin said today was that no, they 0:14:25.280 --> 0:14:28.000 had not changed anything or tinkered with those systems about 0:14:28.000 --> 0:14:28.920 how money flows. 0:14:29.320 --> 0:14:32.000 Hey, Ted, my understanding too, is a federal judge temporary 0:14:32.080 --> 0:14:34.480 limited access to the Treasury payment system. 0:14:34.480 --> 0:14:35.040 A group of. 0:14:35.000 --> 0:14:38.920 Unions accused the agency of illegally sharing members information with 0:14:39.120 --> 0:14:42.800 Musk's team, and this is that order that allows only 0:14:42.920 --> 0:14:46.600 read only access to those two Musk associates, including Kraus. 0:14:47.400 --> 0:14:48.360 What's interesting is. 0:14:48.280 --> 0:14:50.320 It does sound like the legal system is kicking in, 0:14:50.760 --> 0:14:54.400 so who in general are bringing suits and might bring 0:14:54.440 --> 0:14:58.960 more suits to kind of maybe prevent elon Musk and his. 0:14:58.920 --> 0:15:01.480 Team, the DOSE team from doing more at Treasury. 0:15:03.160 --> 0:15:05.840 Well, in particular, I think you're going to see legal 0:15:05.840 --> 0:15:09.520 efforts that originate with organized labor because to the extent 0:15:09.560 --> 0:15:12.880 that DOGE has sort of signaled its ultimate intentions, one 0:15:12.880 --> 0:15:15.280 of them clearly is to reduce the number of federal employees. 0:15:15.320 --> 0:15:18.000 And so the unions who defend those workers' rights are 0:15:18.040 --> 0:15:22.480 starting to agitate essentially to slow this effort down until 0:15:22.480 --> 0:15:23.640 they can understand what's going on. 0:15:23.800 --> 0:15:25.240 That is the most likely. 0:15:26.880 --> 0:15:29.320 Initial wave I think of legal action. 0:15:30.240 --> 0:15:30.720 I'm curious. 0:15:31.200 --> 0:15:37.400 I'm wondering about the potential conflicts of interest here and 0:15:37.440 --> 0:15:42.360 the concerns about somebody such as Elon Musk with varied 0:15:42.360 --> 0:15:47.680 business interests competing with companies such as Boeing companies that 0:15:47.720 --> 0:15:52.640 are Internet service providers with Starlink of course, competing against 0:15:53.080 --> 0:15:57.480 other NASA contractors with SpaceX. What type of data, even 0:15:57.520 --> 0:16:00.480 if it's read only, he could have access to that 0:16:00.960 --> 0:16:02.040 has folks concerned. 0:16:03.640 --> 0:16:03.920 Sure. 0:16:04.000 --> 0:16:07.160 Sources we've talked to, including former members of the Trump 0:16:07.200 --> 0:16:10.640 administration first time around and other officials, have pointed to 0:16:10.680 --> 0:16:14.000 exactly that if you were a businessman with the breadth 0:16:14.040 --> 0:16:18.800 of interests that Musk has, and you had unfettered access 0:16:18.840 --> 0:16:21.120 to all of the information in the United States Treasury 0:16:21.200 --> 0:16:25.040 about what about your competitors' finances, about payments and payment 0:16:25.120 --> 0:16:27.960 schedules of the US government to them for the contracts 0:16:28.040 --> 0:16:28.640 that they hold. 0:16:29.720 --> 0:16:30.680 We don't know. 0:16:30.880 --> 0:16:35.280 To what extent they have or plan to or will look. 0:16:35.160 --> 0:16:36.880 Into tax data. 0:16:38.080 --> 0:16:40.000 You might want to know a lot more about the 0:16:40.560 --> 0:16:44.600 taxes of your biggest rivals, you know, the other ev manufacturers. 0:16:44.920 --> 0:16:47.240 All of that is on the table. And since we've 0:16:47.280 --> 0:16:50.040 been told that Musk himself will be the one deciding 0:16:50.080 --> 0:16:51.920 if he has a conflict of interest in what he's 0:16:52.000 --> 0:16:56.000 up to, the government and the press and the public 0:16:56.040 --> 0:16:59.080 don't have a lot of assurances that he's not looking 0:16:59.120 --> 0:17:02.480 at these these stores of information as a way to 0:17:02.520 --> 0:17:04.400 improve his business propositions. 0:17:04.480 --> 0:17:06.879 And that's the important distinction, this conflict of interest or 0:17:06.880 --> 0:17:11.119 potential conflict of interest, right, ted, I mean Musks classified 0:17:11.119 --> 0:17:15.000 as this special government employee. This temporary designation limits his 0:17:15.080 --> 0:17:17.000 term of service one hundred and thirty days out of 0:17:17.040 --> 0:17:20.920 the year. He doesn't have to provide those financial disclosures 0:17:20.960 --> 0:17:24.080 and other ethics requirements. So the classification is there because 0:17:24.160 --> 0:17:28.200 other administrations have brought in outside help, maybe just for 0:17:28.280 --> 0:17:32.080 a short term period. The difference is, many would argue, 0:17:32.320 --> 0:17:35.560 is that you're bringing in a CEO of a publicly 0:17:35.560 --> 0:17:39.959 held company and companies that you know, in particular SpaceX, 0:17:40.520 --> 0:17:43.000 you know, have billions of dollars in government contracts with 0:17:43.080 --> 0:17:43.920 the United States. 0:17:45.520 --> 0:17:46.000 That's right. 0:17:46.400 --> 0:17:48.920 It's the definition of a conflict of interest to be 0:17:48.960 --> 0:17:51.080 in the position that he is in right now with 0:17:51.200 --> 0:17:55.359 continued personal involvement in for profit companies that do business 0:17:55.440 --> 0:17:58.560 with the government that he's helping to advise and advice. 0:17:58.640 --> 0:18:02.560 Seems a little like he's going much farther than advising, 0:18:02.560 --> 0:18:05.760 it seems like to us from what little they've said. So, yeah, 0:18:05.760 --> 0:18:08.280 this is an unprecedented situation for someone to have the 0:18:08.400 --> 0:18:12.399 financial interest he has in his companies while simultaneously dictating 0:18:12.720 --> 0:18:14.080 the operations of the government. 0:18:14.240 --> 0:18:14.400 TED. 0:18:14.440 --> 0:18:16.920 We should note there are quite a few supporters of 0:18:17.040 --> 0:18:19.280 Elon Musk and what he's doing. Look no further than 0:18:19.320 --> 0:18:22.040 the replies to what he posts on his own social 0:18:22.080 --> 0:18:26.520 media platform, X. What are you hearing publicly from folks 0:18:26.560 --> 0:18:30.080 inside and outside the government about? Yeah, the government maybe 0:18:30.240 --> 0:18:33.080 is spending too much money, Maybe there does need to 0:18:33.119 --> 0:18:35.880 be some controls, Maybe there needs to be some modernization 0:18:36.520 --> 0:18:37.400 of these systems. 0:18:37.440 --> 0:18:39.480 What are we hearing there? 0:18:39.640 --> 0:18:43.280 I mean, those are all conventional platitudes of American politics. 0:18:43.520 --> 0:18:46.040 Everyone always says they're for the government spending less money 0:18:46.040 --> 0:18:47.879 on things they don't like, and for the government to 0:18:47.920 --> 0:18:50.520 be more modern and to operate more efficiently, and to 0:18:50.560 --> 0:18:54.000 spend taxpayer dollars. Wisely, these are not new sentiments, and 0:18:54.200 --> 0:18:57.160 certainly he's getting I think a lot of support from 0:18:57.200 --> 0:18:59.600 people who feel like maybe this is the way to 0:18:59.720 --> 0:19:01.879 all to the government in ways that it has not 0:19:01.960 --> 0:19:03.000 been shaken up. 0:19:03.320 --> 0:19:04.439 So roughly in the past. 0:19:05.080 --> 0:19:06.840 So there is support for that, and even some of 0:19:06.840 --> 0:19:10.280 the Republican lawmakers who have privately been a little leery 0:19:10.359 --> 0:19:12.160 of some of the ways they've been going about their 0:19:12.200 --> 0:19:15.719 business over the past couple of weeks, are still sticking 0:19:15.720 --> 0:19:19.760 by Musk. Personally, no one is registering any objections either 0:19:19.800 --> 0:19:23.680 to Musk or to Trump with some of these early actions, 0:19:23.680 --> 0:19:26.960 not on the Republican side, so certainly they are acting 0:19:26.960 --> 0:19:29.520 as if they have a mandate. And on the Republican side, 0:19:29.560 --> 0:19:32.320 there has not been a lot of nothing really in 0:19:32.320 --> 0:19:35.400 the way of public resistance to this, only some private concerns. 0:19:35.520 --> 0:19:37.600 Ted after you and the team doing the reporting on 0:19:37.640 --> 0:19:41.840 this and what's going on at US Treasury and listening 0:19:41.880 --> 0:19:46.880