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Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

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Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

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Speaker 1: iHeartRadio app, and the Bloomberg Business app, or listen on

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Speaker 1: demand wherever you get your podcasts.

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Speaker 2: We do want to bring in the voice of Congresswoman

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Speaker 2: Abigail Spanberger, who I've been looking forward to talking with,

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Speaker 2: of course, congresswoman from Virginia's seventh congressional district, the Democrat

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Speaker 2: from Virginia former CIA case officer, is with us now

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Speaker 2: on Bloomberg Radio. Congresswoman, welcome back. I don't want to

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Speaker 2: turn you into a legal analyst, but last time we spoke,

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Speaker 2: you had pretty strong feelings about the classified document case

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Speaker 2: against Donald Trump, and I wonder if you think, between

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Speaker 2: the special counsel and this case in Georgia, if there

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Speaker 2: is a strong enough indictment against him following the events

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Speaker 2: of January sixth.

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Speaker 3: Well, I think you just need to look to the

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Speaker 3: grand jury. This is a grand jury that sat and

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Speaker 3: listened to the evidence and voted to indict, voted to

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Speaker 3: move forward with these indictments. And certainly, I think to

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Speaker 3: anyone reading the indictments that are publicly available, whether their

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Speaker 3: attorneys or not. Every I is dotted and T is crossed.

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Speaker 3: And most importantly, these are not just the simple decisions

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Speaker 3: of prosecutors, but the work of a grand jury that

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Speaker 3: sat and heard witness after witness and determined that, yes,

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Speaker 3: there was ample information and evidence and testimony of witnesses

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Speaker 3: that would lead them to believe that these indictments are appropriate.

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Speaker 2: Well, we're hearing about a lot of weaponizing of government

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Speaker 2: double standard here, weaponizing of the DOJ, even from your

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Speaker 2: own speaker, Kevin McCarthy, What would you tell mister speaker

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Speaker 2: about that, now that we've seen a case emerge from

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Speaker 2: the state of Georgia.

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Speaker 3: I think that these attacks on the Department of Justice,

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Speaker 3: the attacks on the FBI, the attacks on public servants

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Speaker 3: who have devoted themselves to upholding law, to upholding the Constitution,

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Speaker 3: to protecting our communities are uncalled for. I represent Quantica,

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Speaker 3: which is the FBI training facility. I represent FBI agents

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Speaker 3: across across the seventh District. They are hardworking law enforcement

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Speaker 3: officers who believe in the rule of law, who work

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Speaker 3: to uphold the law, and continuing to see attacks on

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Speaker 3: them on the DOJ, it's an effort to distract from

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Speaker 3: the very real threats that exist and the very real

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Speaker 3: information contained in these indictments.

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Speaker 2: Well, you know, we wanted you to come on and

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Speaker 2: talk about the work of the Congress, and I'd like

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Speaker 2: to get to a couple of specific issues here. But

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Speaker 2: do you worry that this starts to hang over Capitol

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Speaker 2: Hill and in fact makes things even less productive.

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Speaker 3: I think it's been hanging over Capitol Hill for years.

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Speaker 3: If you'll remember, under for President Trump's presidency, he had

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Speaker 3: regular attacks against the intelligence community, the very people who

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Speaker 3: are risking their lives and living overseas and collecting vital

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Speaker 3: information so that we understood the threats that emanate from

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Speaker 3: Russia and from Iran and from China very real terms.

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Speaker 3: Threatened the men and women of the FBI and impugned

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Speaker 3: their work. And they're the folks that keep us safe

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Speaker 3: from terrorist attack and investigate problems here at home and

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Speaker 3: everything from bank robberies to international terrorism to narco trafficking, etc.

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Speaker 4: Etc.

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Speaker 3: So this has been occurring for quite some time, and

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Speaker 3: it's certainly wildly inappropriate, and the role of Congress is

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Speaker 3: clear oversight to make sure that these agencies are fulfilling

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Speaker 3: their mission. But the fact that those oversight capacities are

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Speaker 3: in any way being used as a distraction method because

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Speaker 3: we have a former president who's now been indicted in

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Speaker 3: four separate jurisdictions for an array of alleged crimes. It's

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Speaker 3: pretty sad reality, frankly on Capitol Hill. But I continue

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Speaker 3: to be proud of the extraordinary public servants who I represent.

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Speaker 2: Well, I'll tell you when you come back to work,

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Speaker 2: it's going to be fast and furious. I can really

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Speaker 2: only imagine what's going to happen as we talk about

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Speaker 2: the possibility of a government shutdown. The House has a

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Speaker 2: lot of catch up work to do with the Senate

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Speaker 2: when it comes to getting actual appropriations bills, assuming that

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Speaker 2: is going to happen this time around. But you know,

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Speaker 2: as we hear members of the Freedom Caucus say, don't

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Speaker 2: fear the shutdown. That was what Bob Good said. It's

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Speaker 2: actually going to be good for Washington to just shut

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Speaker 2: it down because we do bad things here. Chuck Schumer

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Speaker 2: showed up on cable news this morning and said he's

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Speaker 2: got a deal in principle with Kevin McCarthy for a

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Speaker 2: short term solution. Is that enough to avoid a shutdown?

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Speaker 2: Or does it just prolong one.

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Speaker 3: Hopefully it's enough to avoid a shutdown, a short term

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Speaker 3: cr and move forward.

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Speaker 4: You know.

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Speaker 3: Related to Congressman Goods comments, he is from Virginia. Virginia

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Speaker 3: is the most impacted economically impacted state in the country

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Speaker 3: when there is a shutdown. The fact that any representative

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Speaker 3: who represents the Commonwealth would say there's nothing to fear

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Speaker 3: in a shutdown shows an absolutely outrageous lack of understanding

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Speaker 3: of what it means to have a government shutdown occur.

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Speaker 3: And the reality is we must do everything to avoid one.

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Speaker 3: And you look to the Senate. The Senate has already

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Speaker 3: passed all twelve of their appropriations bills out of committee

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Speaker 3: with overwhelming bipartisan support, And certainly, I think the reality

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Speaker 3: of kind of looking to the Senate for their expediency

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Speaker 3: in moving things along is a comical state of play.

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Speaker 3: But the reality is that we should follow their lead,

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Speaker 3: recognize the work that they have done, and move bills

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Speaker 3: in the House that are reflective of what has already

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Speaker 3: garnered the broad bipartisan support necessary to pass through the Senate,

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Speaker 3: because likewise those bills would through the House.

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Speaker 2: It does seem like the House the Senate are in

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Speaker 2: different orbits. Right now, is it possible to avoid a

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Speaker 2: government shutdown? Or is it inevitable?

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Speaker 3: It has to be possible. We have to avoid a

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Speaker 3: government shutdown. It is an absolutely outrageous abdication of the

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Speaker 3: responsibility of Congress for any member of Congress to act

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Speaker 3: as though a government shutdown is an inevitability. The job

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Speaker 3: of the Speaker of the House is to preserve and

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Speaker 3: facilitate the function of Congress, and frankly, our primary responsibility

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Speaker 3: is to ensure the function of our government. And so

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Speaker 3: the idea that anyone would accept that a government shutdown

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Speaker 3: is just going to happen needs to find a new

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Speaker 3: line of work. That absolute sort of abdication of responsibility

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Speaker 3: is offensive to me as a former federal employee, and

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Speaker 3: certainly as someone who represents thousands of extraordinary public stas

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Speaker 3: urvans and the larger economy that works with them. That's

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Speaker 3: government contracts, that's restaurant owners who are in, you know,

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Speaker 3: places frequented by public servants. That's the appliance store that

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Speaker 3: sells microwaves and refrigerators to federal employees. Right in our

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Speaker 3: district and in our state. A shutdown is absolutely catastrophic

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Speaker 3: and for anyone who wants to make some economic argument.

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Speaker 3: I have been at the table when government employees have

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Speaker 3: to sit down. As a former intel officer, right, I

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Speaker 3: was serving in a station overseas, and you sit around

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Speaker 3: the table and say, okay, well, you're meeting with the

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Speaker 3: terrorists next week, and you're a meeting with the you know,

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Speaker 3: the nuclear proliferation source next week, and you're meeting with

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Speaker 3: so and so from X four and government. Which one

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Speaker 3: of those can we push until Congress gets its act together.

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Speaker 3: The idea that anyone anywhere in the world is pushing

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Speaker 3: or determining what's quote unquote essential versus non essential, when

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Speaker 3: it might be somebody's Social Security payments or they're VA

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Speaker 3: processing or their passport, let alone, you know, investigations of

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Speaker 3: transnational criminal organizations. The idea that any of that has

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Speaker 3: to get delayed or that somebody wastes a minute determining

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Speaker 3: kind of how we rack and stack these priorities because

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Speaker 3: Congress can't do its job on time is grotesque to me.

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Speaker 2: I've never heard you fired up like this before.

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Speaker 3: Abigail s about Tommy Tubberville and I'll come you know.

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Speaker 2: That's coming, but I'll tell you what you're speaking the

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Speaker 2: language of Virginia. Here're you sound like somebody who might

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Speaker 2: be governor of Virginia. Is that where we're going?

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Speaker 3: You know? I sound like somebody who is deeply passionate

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Speaker 3: about a functional government and the idea that somebody is

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Speaker 3: going to play politics with whether or not one of

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Speaker 3: the senior citizens in my district gets their Social Security check,

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Speaker 3: or whether a veteran in my district is processed through

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Speaker 3: the VA, or whether or not, you know, a family

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Speaker 3: who have long planned for a vacation can actually get

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Speaker 3: their passports in order, or whether or not public servants

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Speaker 3: who work day in and day out to serve their

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Speaker 3: community can actually get paid. Or whether a small business

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Speaker 3: who went out on a limb put their life savings

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Speaker 3: into it and are doing small government contracting work, whether

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Speaker 3: they go for a month without payment and see their

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Speaker 3: business collapse. I sound like a person committed to all

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Speaker 3: of those people. And I'm going to continue to be

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Speaker 3: aggressive on this issue because the negligence on the part

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Speaker 3: of some of my colleagues hurts the people that I represent,

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Speaker 3: and Virginia is the most economically impacted state in the

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Speaker 3: case of shutdowns, and I will defend my state, and

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Speaker 3: I will defend the constituents I represent, of.

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Speaker 2: Course, and I hear you, but our listeners should know

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Speaker 2: that there's going to be a term limited exit here

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Speaker 2: in a moment. And I wonder if it is true

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Speaker 2: reports that you're considering a run.

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Speaker 3: I'm certainly always considering how I can best serve my

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Speaker 3: constituents and my state. But right now I am focused

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Speaker 3: on getting us through September without a government shutdown. And

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Speaker 3: We've got exciting elections here in the Commonwealth, and I'm

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Speaker 3: supporting so many great candidates who are on the ballot.

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Speaker 2: In November, you mentioned your friend Tommy Tuberville. I didn't

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Speaker 2: even have to bring him up, but I noticed that

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Speaker 2: you tweeted about Senator Tuberville's one man show, you right,

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Speaker 2: has now left the Army, Navy, and Marines without confirmed

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Speaker 2: leaders for the first time in history. This, of course,

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Speaker 2: is the blockade that alone senator is holding up military

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Speaker 2: promotions at the Pentagon here and that boy, we're above

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Speaker 2: three hundred now, I believe, including top brass here. Congresswoman,

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Speaker 2: what's the solution here? Because he shows We've talked to

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Speaker 2: him repeatedly, no signs of backing down, and the Senate

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Speaker 2: Majority leader doesn't want to bring each one of these

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Speaker 2: nominations to the floor and set that precedence. That's go

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Speaker 2: on forever.

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Speaker 3: Let's talk about what's at stake right now. Our enemies

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Speaker 3: are watching right Russia's watching, China's watching, Iran is watching.

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Speaker 3: I don't want to hear a single China Hawk say

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Speaker 3: anything about China without them saying. And this is why

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Speaker 3: we need to have top leadership in our military. Let's

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Speaker 3: talk about what we're talking about. The designated new Chairman

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Speaker 3: of the Joint Chiefs can't get confirmed chief of Staff

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Speaker 3: for the Air Force, chief of Staff for the Army,

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Speaker 3: Chief of Naval Operations, the commandant of the Marine Corps,

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Speaker 3: which has its headquarters at Quantico in my district, and

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Speaker 3: the Vice Chief of Space Operations, as well as more

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Speaker 3: than three hundred people across the country and the world

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Speaker 3: in top leadership positions. Seventy three positions in DC, impacted,

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Speaker 3: thirty nine in Virginia, impacted, thirty five abroad. And if

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Speaker 3: this doesn't end, we are on pace to see approximately

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Speaker 3: six hundred and fifty positions unfilled and unable to be

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Speaker 3: confirmed because of Tommy Tuverville that's six hundred and fifty

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Speaker 3: out of eight hundred and fifty two, right, like that

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Speaker 3: is rageous. And we're going to talk about the threats

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Speaker 3: that exist on the global stage, and yet one man

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Speaker 3: is going to be able because of his culture war

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Speaker 3: and one man march. He's going to keep our military

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Speaker 3: from being ready to address the threats that exist. It's

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Speaker 3: unbelievable to me. This is unacceptable. It's absolutely outrageous. What

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Speaker 3: does it say to the men and women in the military,

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Speaker 3: not just those who are impacted, but those who got in.

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Speaker 3: Maybe they're at year fifteen and they're trying to determine

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Speaker 3: do I stay in the military, do I commit? Do

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Speaker 3: I try to go to one of those flag officer

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Speaker 3: positions with They know that every step of the way,

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Speaker 3: one one ridiculous person could stand in the way of

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Speaker 3: their ability to serve our nation. I mean, the ramifications

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Speaker 3: are unbelievable, and this needs to come to an end.

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Speaker 4: You know.

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Speaker 3: The bottom line is he has already set a horrible precedent.

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Speaker 3: So the bad precedent's already been set. If I were

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Speaker 3: if I were queen for a day, I would call

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Speaker 3: every single Senator in and I would make them vote

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Speaker 3: every single day, seven days a week, because the bottom

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Speaker 3: line is this man will break under the pressure of

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Speaker 3: a whole host of his Republican colleague saying, I was

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Speaker 3: supposed to do this in my district. I'm supposed to

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Speaker 3: go to so and so's wedding. I'm supposed to do

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Speaker 3: this golfing trip or whatever thing they might have planned. Yeah,

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Speaker 3: and at that point in time, that's how you actually

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Speaker 3: get him to bow under the pressure, because apparently doing

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Speaker 3: the bidding of China and Russia isn't enough for him.

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Speaker 2: Wow, Okay, I think I know what you mean by that.

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Speaker 2: But until you do become queen for a day, it's

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Speaker 2: just us in the media asking questions. Congresswoman. And this

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Speaker 2: is what he told Bloomberg last time we hit him

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Speaker 2: in the hallway.

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Speaker 5: We're sticking with what we believe in. It's an illegal bill,

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Speaker 5: and they're trying to make an n run in the

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Speaker 5: NBA and all that. It's not gonna work. They got

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Speaker 5: change policy, back illegal policy, get a standalone bill on

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Speaker 5: Flora's vote on it. That's how we're going this thing.

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Speaker 2: It sounds like he wants to have a vote too.

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Speaker 3: Yeah, he wants a vote on the NDAA, so have

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Speaker 3: him vote against the NDA. Right, this is what he's doing.

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Speaker 3: He is waging a culture war because he doesn't like

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Speaker 3: what the policy of the Department of Defense is. Sure,

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Speaker 3: then put forth an amendment that you want to change

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Speaker 3: the policy to Department of Defense. It will fail in

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Speaker 3: the Senate, frankly, but that's democracy. It was put forth

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Speaker 3: on the House side. It passed out of the House,

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Speaker 3: so you know, maybe that will make him happy, but

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Speaker 3: it will fail in conference. Because the bottom line is

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Speaker 3: the United States military their obligation is not to make

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Speaker 3: one man from Florida slash Alabama happy. Their mission is

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Speaker 3: to protect the Unitited States and our readiness. And if

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Speaker 3: that means ensuring that service members can travel for the

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Speaker 3: healthcare access that they need, that is their obligation. And

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Speaker 3: that's how they keep the best and the brightest and

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Speaker 3: the most ready military fighting force that the world has

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Speaker 3: ever seen. And this man, because he cares about dictating

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Speaker 3: what the DoD is doing relative to the health needs

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Speaker 3: of its women, soldiers and airmen and marines and all

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Speaker 3: of our service members, because that is his priority, he

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Speaker 3: is willing to threaten our military readiness to the most

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Speaker 3: egregious degree. And so let him put forth amendments when

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Speaker 3: they fail. That's democracy. I'm sorry for him. He can

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Speaker 3: do as many television interviews as he wants, but the

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Speaker 3: reality is what he's doing to our military is absolutely

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Speaker 3: dangerous and our adversary nations are watching well.

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Speaker 2: It threatens military funding potentially as well.

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Speaker 6: That's right.

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Speaker 2: Are we going to see this supplemental request for Ukraine past?

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Speaker 2: Are we going to see the Pentagon fully funded? In

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Speaker 2: this next budget fight?

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Speaker 3: It's going to be a question of whether Speaker McCarthy

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Speaker 3: puts a bill on the floor. The bottom line is

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Speaker 3: that there are the bipartisan votes to fully pass a

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Speaker 3: National Defense Authorization Act that can pass the House, pass

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Speaker 3: the Senate, and go to the President's desk and get signed.

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Speaker 3: There are also the votes to pass the Ukraine supplemental.

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Speaker 3: It's really just a question of whether or not the

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Speaker 3: Speaker is going to be willing or have the courage

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Speaker 3: to deal with the pressure from his right wing flank

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Speaker 3: about whether he puts it on the floor. He seems

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Speaker 3: to live in eternal fear that they will call for

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Speaker 3: a vote to vacate the chair, and that's impacting what

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Speaker 3: he's willing to put on the floor. The votes are

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Speaker 3: there in the House and in the Senate, but we

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Speaker 3: need a speaker willing to bring it to the floor.

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Speaker 2: Congress, when I haven't even asked you about the Inflation

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Speaker 2: Reduction Act yet, this has been quite a conversation here.

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Speaker 3: That's the happy topic.

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Speaker 2: Well, you know, I guess it is. It depends who

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Speaker 2: you talk to. Of course, Democrats say that it is.

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Speaker 2: The White House says that this is a generational investment.

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Speaker 2: Republicans say, we don't even know what it is, and

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Speaker 2: voters in many cases never heard of it. What does

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Speaker 2: the President have to do in the next year to

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Speaker 2: change that?

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Speaker 3: If they say they don't know what it is, I'm

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Speaker 3: wondering why they voted against it. Maybe they should have

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Speaker 3: taken time to read the bill. Because this bill made

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Speaker 3: major impacts across the board for the people that I represent.

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Speaker 3: And I'll just focus frankly on prescription drugs because that's

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Speaker 3: where we are already seeing the impact on constituents. It

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Speaker 3: gave Medicare the power to negotiate some of the most

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Speaker 3: expensive and most used drugs in Medicare party that lowers prices.

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Speaker 3: It kept out of pocket costs for Medicare beneficiaries to

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Speaker 3: two thousand dollars per year. And if if you're a retiree,

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Speaker 3: that's extraordinary. That is so helpful. It created penalties. We

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Speaker 3: want to talk about inflation. It created penalties for transnational

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Speaker 3: pharmaceutical companies, these big pharmaceutical conglomerates that have been historically

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Speaker 3: raising their prices faster than the inflation rate. And to say,

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Speaker 3: wait a second, you know, we recognize that these companies

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Speaker 3: are moving with markets, but if you are increasing your

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Speaker 3: fees far past the inflation rates, there's going to be

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Speaker 3: a fee for that. It made necessary vaccines like the

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Speaker 3: shingles vaccine free for hundreds of thousands of Virginians who

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Speaker 3: use Medicare. They capped the price of insulin at thirty

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Speaker 3: five dollars a month for Medicare beneficiaries.

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Speaker 2: Something voters need, an owner's manual, and.

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Speaker 3: It's also already we've seen some pharmaceutical companies pass on

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Speaker 3: this cap to others. And really, this is the number

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Speaker 3: one issue that I continue to hear, particularly I mean

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Speaker 3: from families across the board, but particularly from seniors. You're

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Speaker 3: living on a fixed income and you're feeling the impacts

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Speaker 3: of the inflation. We've experienced over the past few years.

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Speaker 3: And the idea that any senior or any person would

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Speaker 3: be choosing to cut their medication or not take their

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Speaker 3: medication at the right rate because they have to save

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Speaker 3: money and they're choosing between putting food on the table

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Speaker 3: and their medicine. That's just outrageous.

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Speaker 2: So what you're telling me is you read the bill.

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Speaker 3: I read the bill, and I voted for the bill,

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Speaker 3: of course, and seniors are saving money. It's exciting.

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Speaker 2: Congress Swimming. It's great to have you back, Abigail Spanberger.

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Speaker 2: We weren't supposed to. We broke all kinds of rules.

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Speaker 2: I kept you late, we didn't play commercials. There A

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Speaker 2: lot of things happened while we were talking, but I

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Speaker 2: learned a lot and I would love to stay in

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Speaker 2: touch with you on this. When you do make a

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Speaker 2: decision on the next chapter, we're going to come to

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Speaker 2: Virginia to see you as well. Abigail Spanberger from Virginia,

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Speaker 2: seventh many thanks for being with us here on Bloomberg's

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Speaker 2: sound on Wow reassembled a panel. Rick Davis and Max

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Speaker 2: Burns are with us. Rick, that sounded like a whole

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Speaker 2: new Abigail Spanberger in a lot of ways. I could

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Speaker 2: ask you about a lot of the issues that we discussed,

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Speaker 2: but is this is this someone aiming for higher office?

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Speaker 4: Well, if we did a word count on Virginia and

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Speaker 4: my constituents, I think we'd be impressed by the factor

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Speaker 4: into the home game. Yeah. Look, I mean she's obviously

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Speaker 4: been able to get re elected to an incredibly difficult

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Speaker 4: district and show her political prowess both legislatively and politically.

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Speaker 4: So you know, there's a there's a there's probably a

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Speaker 4: future for that congresswoman somewhere in state of Virginia. But

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Speaker 4: we'll see where she winds up going in the meantime.

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Speaker 4: I mean, so much to unpack from that great interview, Joe,

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Speaker 4: well done.

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Speaker 2: Well geez, Yeah, sometimes you'll learn a lot when you

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Speaker 2: talk to a lawmaker. Max. Of course, the congresswoman has

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Speaker 2: to first win reelection, I presume. And there's a Republican

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Speaker 2: named John Maguire, a former Navy seal state lawmaker, who

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Speaker 2: says he will be running for that seat as well

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Speaker 2: in the Richmond suburbs. Will this be a tough fight

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Speaker 2: if that happens.

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Speaker 7: Well, he's certainly in for a fight. I mean, Abby

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Speaker 7: Spamberger is the definition of a fighter. I mean, I've

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Speaker 7: lived and worked in Virginia politics for a dozen years

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Speaker 7: over in the eighth district, and she was always one

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Speaker 7: of the politicians who seem to be in it because

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Speaker 7: of the policy and to be an honest collaborator in

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Speaker 7: making people's lives better. And Virginia voters really like that.

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Speaker 7: I mean, remember, Glenn Youngkin won in part by framing

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Speaker 7: himself as not as much of a big personality as

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Speaker 7: Terry mccauloffe, but more of a get things done pragmatist.

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Speaker 7: And that is Abbie Spanberger to a t.

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Speaker 2: What do Republicans think if you can even answer that

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Speaker 2: rick of Abigail Spanberger. She survived a very difficult election

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Speaker 2: in twenty twenty, and it might be in for one again.

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Speaker 4: Yeah. Look, I mean it's a competitive district, and frankly,

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Speaker 4: without some support of Republican voters on the margins, I

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Speaker 4: don't think she could get reelected. So I think that

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Speaker 4: she makes it clear that she's not playing the partisan

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Speaker 4: card when she does these things, and that opens up

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Speaker 4: some of the Republicans in her district, who you know,

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Speaker 4: would be more moderate than what we see in other

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Speaker 4: more rural areas of Virginia and if she does look statewide,

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Speaker 4: she'll have to figure out what her messaging will be

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Speaker 4: to them. But prigmatism is something she's known for, and

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Speaker 4: there are a lot of Republicans who reward that.

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Speaker 2: All right, quick swing with both of you. I've only

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Speaker 2: got about ninety seconds here. But she was most animated

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Speaker 2: about this military blockade. We've talked about Tommy Tumberville's effort many,

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Speaker 2: many times. This is, of course, in protest of the

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Speaker 2: Pentagon's abortion policy. When's it going to end? Max?

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Speaker 7: Well, Tommy Tumberville likes to say he's just representing his constituents,

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Speaker 7: but nearly sixty percent of Alabama voters say they want

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Speaker 7: him to stop threatening military preparedness. I mean, this is

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Speaker 7: the definition of ego gratification at the expense of national security.

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Speaker 7: And now even Republicans are telling him to cut it out.

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Speaker 7: We saw Nicki Haley called it low to hold a

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Speaker 7: military hostage. And if Nicki Haley is criticizing you, you

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Speaker 7: know you've messed up.

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Speaker 2: Does this go on straight through the holidays?

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Speaker 8: Here?

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Speaker 6: Rick?

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Speaker 2: How does this send?

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Speaker 1: Yeah?

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Speaker 4: I actually don't see a reasonable exit for for Tommy

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Speaker 4: Tubberbill the coach hasn't put himself in a position where

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Speaker 4: he can gracefully change his position, and so it's it's

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Speaker 4: kind of like a slow moving train wreck. And I

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Speaker 4: think until his constituents really start to put the pain

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Speaker 4: to him, which I think exactly as Max said, they'd

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Speaker 4: be inclined to do if they really understood what the

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Speaker 4: what the requirements of office are there. You know, he's

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Speaker 4: he's going to hold his ground until he feels a

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Speaker 4: pain at home.

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Speaker 2: Well, that was something. This is why you want to

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Speaker 2: subscribe to the podcast if you're not always with us

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Speaker 2: live a fascinating conversation with Congresswoman Abigail Spanberger. Great analysis

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Speaker 2: from Rick Davis and Max Burns on some pressing issues

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Speaker 2: here who says the news gets slow in August.

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Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the

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Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the

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Speaker 1: tune in up, Bloomberg dot Com, and the bloom Business app.

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Speaker 1: You can also listen live on Amazon Alexa from our

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Speaker 1: flagship New York station, Just say Alexa, play Bloomberg eleven thirty.

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Speaker 2: As I put in the headlines here in the terminal,

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Speaker 2: most FED officials saw significant upside risks to inflation. This

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Speaker 2: is straight from minutes from the last Federal Reserve meeting, right,

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Speaker 2: you get the fly on the wall view here. This

436
00:24:21,680 --> 00:24:23,439
Speaker 2: is the stuff you wish you knew when it happened.

437
00:24:23,920 --> 00:24:27,760
Speaker 2: But there's more where that came from. Maybe one seems

438
00:24:27,760 --> 00:24:31,200
Speaker 2: obvious following what I just told you, inflation risks could

439
00:24:31,240 --> 00:24:35,160
Speaker 2: require further tightening. But more importantly, two Fed officials favored

440
00:24:35,200 --> 00:24:39,879
Speaker 2: holding rates steady in July, So we've got some maybe

441
00:24:39,920 --> 00:24:42,840
Speaker 2: discord here is certainly some disagreement inside the FOMC, and

442
00:24:42,840 --> 00:24:45,679
Speaker 2: that's where we want to start with marxx Andy Delighted

443
00:24:45,720 --> 00:24:48,119
Speaker 2: to have Mark with us, the chief economists for Moody's Analytics,

444
00:24:48,119 --> 00:24:50,560
Speaker 2: on this first anniversary of the IRA. We have a

445
00:24:50,560 --> 00:24:53,239
Speaker 2: lot to talk about, Mark, and great to have you

446
00:24:53,400 --> 00:24:55,200
Speaker 2: to catch up a bit. I know that these are

447
00:24:55,359 --> 00:24:57,120
Speaker 2: just breaking now. We're just getting a look at these

448
00:24:57,160 --> 00:25:00,000
Speaker 2: Fed minutes. Maybe none of this sounds surprising to you,

449
00:25:00,440 --> 00:25:03,280
Speaker 2: but if most Fed officials see significant upside risks, what

450
00:25:03,280 --> 00:25:07,320
Speaker 2: does it mean when two officials favor holding rates steady

451
00:25:07,359 --> 00:25:09,480
Speaker 2: in July? Does that bring us back to the pause

452
00:25:09,680 --> 00:25:12,560
Speaker 2: or the skip knowing that there might be further increases?

453
00:25:13,280 --> 00:25:14,720
Speaker 9: Well, Joe, it's good to be with you. Thanks for

454
00:25:14,760 --> 00:25:19,320
Speaker 9: the opportunity. Yeah, I suspect that the FOMC is done.

455
00:25:19,359 --> 00:25:22,600
Speaker 9: It's right hikes. I mean this was minutes for the

456
00:25:22,680 --> 00:25:25,600
Speaker 9: meeting at the end of July. Since then, we've gotten

457
00:25:25,640 --> 00:25:28,480
Speaker 9: more data, inflation data, economic data, and they all point

458
00:25:28,520 --> 00:25:31,840
Speaker 9: to an economy that's moderating and inflation that's kind of

459
00:25:31,840 --> 00:25:32,960
Speaker 9: coming back into target in.

460
00:25:33,000 --> 00:25:34,200
Speaker 6: A reasonably graceful way.

461
00:25:34,280 --> 00:25:37,199
Speaker 9: So you know, if that data continues, and I expect

462
00:25:37,200 --> 00:25:39,960
Speaker 9: that it will by the next so FOMC meeting in September,

463
00:25:40,760 --> 00:25:44,760
Speaker 9: I would anticipate that they would pause at that meeting

464
00:25:44,760 --> 00:25:46,160
Speaker 9: and that would be the end of the right hike.

465
00:25:46,320 --> 00:25:48,880
Speaker 9: So this is looking in the rearview mirror a bit

466
00:25:49,000 --> 00:25:52,720
Speaker 9: given the data flow, so I wouldn't read too much

467
00:25:52,720 --> 00:25:54,720
Speaker 9: into it, And it feels like everything's moving in the

468
00:25:54,760 --> 00:25:56,159
Speaker 9: right direction for the FED to end.

469
00:25:56,160 --> 00:25:57,000
Speaker 6: It's right hikes.

470
00:25:57,240 --> 00:26:01,400
Speaker 2: Well, like that's maybe better FED staft scraps recession call.

471
00:26:02,359 --> 00:26:08,359
Speaker 2: Some saw small jobless rate rise. That's just like what

472
00:26:08,359 --> 00:26:10,240
Speaker 2: we've been hearing from every Wall Street bank over the

473
00:26:10,320 --> 00:26:13,480
Speaker 2: past couple of weeks. Mark what was the turning point

474
00:26:14,080 --> 00:26:16,600
Speaker 2: that brought all these smart people to think there would

475
00:26:16,640 --> 00:26:17,360
Speaker 2: be no recession.

476
00:26:18,160 --> 00:26:20,040
Speaker 9: I think it was the inflation data. And by the way,

477
00:26:20,320 --> 00:26:22,920
Speaker 9: I'm just going to toot my horn, I never said recession.

478
00:26:23,000 --> 00:26:25,320
Speaker 2: Actually, thank you. By the way, our listeners should understand

479
00:26:25,320 --> 00:26:28,560
Speaker 2: you've been entirely consistent on that, and now the world

480
00:26:28,640 --> 00:26:29,960
Speaker 2: is moving toward Mark Xandy.

481
00:26:30,440 --> 00:26:34,639
Speaker 9: That doesn't mean I'm right what is being written here,

482
00:26:34,920 --> 00:26:37,439
Speaker 9: but but people are changing their views, and I think

483
00:26:37,480 --> 00:26:39,440
Speaker 9: it goes to the inflation statistics.

484
00:26:39,440 --> 00:26:41,359
Speaker 6: They're they're they're they're very good.

485
00:26:41,880 --> 00:26:45,280
Speaker 9: I mean, just to give you one, overall consumer price

486
00:26:45,359 --> 00:26:50,400
Speaker 9: inflation UH is a year over year through the month

487
00:26:50,440 --> 00:26:53,760
Speaker 9: of July, is UH, you know, excluding housing down to

488
00:26:53,800 --> 00:26:58,439
Speaker 9: one percent. Core consumer price inflation, so excluding food and energy,

489
00:26:59,480 --> 00:27:01,200
Speaker 9: you know, exclude housing is down to two and a

490
00:27:01,240 --> 00:27:01,720
Speaker 9: half percent.

491
00:27:02,040 --> 00:27:02,280
Speaker 6: Joe.

492
00:27:02,720 --> 00:27:05,159
Speaker 9: That's that's inflation at targets. So the only thing that

493
00:27:05,200 --> 00:27:08,480
Speaker 9: needs to happen here is for housing inflation to come

494
00:27:08,520 --> 00:27:10,480
Speaker 9: back into something that's more typical.

495
00:27:11,160 --> 00:27:12,359
Speaker 6: And that's going to happen.

496
00:27:12,400 --> 00:27:14,120
Speaker 9: We know that with a high degree of confidence because

497
00:27:14,119 --> 00:27:17,040
Speaker 9: that's tied to market rents, and we know rents are

498
00:27:17,040 --> 00:27:19,639
Speaker 9: flatted down since the end of last year. So you know,

499
00:27:19,720 --> 00:27:23,399
Speaker 9: the forecast for inflation to get back to the fed's

500
00:27:23,440 --> 00:27:26,200
Speaker 9: target by this time next year is a really pretty

501
00:27:26,200 --> 00:27:29,080
Speaker 9: good one without any more rate hikes, without recession. I

502
00:27:29,119 --> 00:27:32,760
Speaker 9: think it's that kind of realization that you know, that

503
00:27:32,760 --> 00:27:38,200
Speaker 9: that that inflation calculation that is changing people's minds that Okay,

504
00:27:38,320 --> 00:27:41,200
Speaker 9: you know, maybe this economy can get inflation back in

505
00:27:41,240 --> 00:27:43,720
Speaker 9: the bottle without having to suffer a recession.

506
00:27:44,200 --> 00:27:47,120
Speaker 2: The question, then, I guess becomes, you know, for how

507
00:27:47,200 --> 00:27:50,399
Speaker 2: long and if we don't see you know, cuts coming

508
00:27:51,359 --> 00:27:53,720
Speaker 2: anytime in the near future, could this just be the

509
00:27:53,760 --> 00:27:54,280
Speaker 2: new normal?

510
00:27:55,600 --> 00:27:55,800
Speaker 6: Yeah?

511
00:27:55,840 --> 00:27:58,600
Speaker 9: I suspect the bar is really high, you know, in

512
00:27:58,600 --> 00:28:01,200
Speaker 9: the minutes would suggest the bar is you know, really

513
00:28:01,240 --> 00:28:02,800
Speaker 9: quite high for rate cuts.

514
00:28:03,080 --> 00:28:04,480
Speaker 6: I mean we, I think the Fed.

515
00:28:05,000 --> 00:28:08,240
Speaker 2: I mean next year, you know, just the foreseeable future.

516
00:28:08,240 --> 00:28:11,119
Speaker 2: Could we be at these levels for years years?

517
00:28:11,160 --> 00:28:12,720
Speaker 6: No, I don't think so.

518
00:28:12,800 --> 00:28:14,880
Speaker 9: I mean, if i'm if I'm you know, reasonably right

519
00:28:14,880 --> 00:28:19,480
Speaker 9: about inflation, you know, coming into defens target and growth,

520
00:28:20,359 --> 00:28:23,159
Speaker 9: you know, remaining around the economy's potential about two percent,

521
00:28:23,200 --> 00:28:25,960
Speaker 9: give or take. I think at that point the FED

522
00:28:26,040 --> 00:28:29,399
Speaker 9: will come to the conclusion that, you know, we don't

523
00:28:29,440 --> 00:28:32,679
Speaker 9: need short term interest rates at you know, five and

524
00:28:32,680 --> 00:28:34,560
Speaker 9: a half percent, which is where the federal fund rate

525
00:28:34,560 --> 00:28:38,240
Speaker 9: target is today because you know, most estimates of it

526
00:28:38,320 --> 00:28:39,840
Speaker 9: is an estimate, so there's a lot of debate, but

527
00:28:39,880 --> 00:28:42,640
Speaker 9: most estimates would put the neutral federal funds rate target,

528
00:28:42,720 --> 00:28:46,720
Speaker 9: that rate that's consistent with monetary policy neither supporting or

529
00:28:46,840 --> 00:28:48,880
Speaker 9: restraining growth, at about two and a half to three.

530
00:28:49,000 --> 00:28:51,160
Speaker 9: So if you're at five and a half, that it's

531
00:28:51,200 --> 00:28:54,000
Speaker 9: going to start doing some damage. So I suspect that

532
00:28:54,320 --> 00:28:57,320
Speaker 9: once inflation is within spitting distance of the Fed's target,

533
00:28:57,360 --> 00:28:59,680
Speaker 9: and again I expect that by this time next year

534
00:28:59,680 --> 00:29:03,520
Speaker 9: that they'll start to slowly ease monetary policy, bring interest

535
00:29:03,520 --> 00:29:05,880
Speaker 9: reachs down, not quickly, but you know, slowly over time.

536
00:29:06,800 --> 00:29:08,600
Speaker 2: Mark Sandy hold that thought, we're going to go straight

537
00:29:08,640 --> 00:29:11,440
Speaker 2: to the FED for just a moment with Bloomberg's own

538
00:29:11,600 --> 00:29:14,000
Speaker 2: Kaylee Lines, who was in the lock up for all

539
00:29:14,040 --> 00:29:17,480
Speaker 2: this stuff and has all of this this breaking news

540
00:29:17,520 --> 00:29:19,520
Speaker 2: for us. Kayley, is great to talk to you. I

541
00:29:19,560 --> 00:29:22,600
Speaker 2: wish you were here in the room, but it's great

542
00:29:22,640 --> 00:29:24,880
Speaker 2: that you're at the FED to get this breaking news.

543
00:29:24,880 --> 00:29:28,360
Speaker 2: The FED staff scraps recession call kind of jumping out

544
00:29:28,360 --> 00:29:30,320
Speaker 2: of the terminal to me here, but we're clearly still

545
00:29:30,360 --> 00:29:31,640
Speaker 2: in for more rate hikes.

546
00:29:31,640 --> 00:29:34,840
Speaker 10: It sounds like, well, we could be Joe. And of

547
00:29:34,840 --> 00:29:37,560
Speaker 10: course we knew because Chairman Palell had told us at

548
00:29:37,560 --> 00:29:41,160
Speaker 10: the podium after last the FED meeting in July that

549
00:29:41,200 --> 00:29:43,920
Speaker 10: the staff had scrapped that recession call. But we're getting

550
00:29:43,920 --> 00:29:46,880
Speaker 10: a little bit more detail on the staff's economic thinking,

551
00:29:47,040 --> 00:29:50,840
Speaker 10: noting that the staff observed that indicators and real activity

552
00:29:50,840 --> 00:29:53,480
Speaker 10: had come in stronger than expected. Basically, the data has

553
00:29:53,560 --> 00:29:55,800
Speaker 10: just been holding a lot up, a lot better than

554
00:29:55,800 --> 00:29:59,480
Speaker 10: they previously anticipated. That said, they do still expect growth

555
00:29:59,560 --> 00:30:01,600
Speaker 10: next year in twenty twenty four, and in twenty twenty

556
00:30:01,600 --> 00:30:04,400
Speaker 10: five is going to run below their estimate of potential

557
00:30:04,560 --> 00:30:07,120
Speaker 10: output growth, and they think there will be a small

558
00:30:07,200 --> 00:30:11,480
Speaker 10: increase in the unemployment rate relative to its current level.

559
00:30:11,520 --> 00:30:14,240
Speaker 10: So there are still risks here. And of course, participants

560
00:30:14,280 --> 00:30:16,680
Speaker 10: in the meeting, according to the minutes, did note that

561
00:30:16,800 --> 00:30:21,360
Speaker 10: risks to achieving its goals, meaning two percent inflation target

562
00:30:21,440 --> 00:30:22,920
Speaker 10: had become more two sided.

563
00:30:23,680 --> 00:30:25,680
Speaker 2: Of course, you know, Mark just made the point, Kayley,

564
00:30:25,800 --> 00:30:29,320
Speaker 2: this is rear view mirror. So how much stock should

565
00:30:29,360 --> 00:30:31,480
Speaker 2: we put in what was said at the last meeting.

566
00:30:32,720 --> 00:30:35,200
Speaker 10: Yeah, it is a really good point, because of course

567
00:30:35,240 --> 00:30:37,440
Speaker 10: this is backward looking by three weeks, we've gotten a

568
00:30:37,440 --> 00:30:40,040
Speaker 10: lot of data, including a very important CPI print in

569
00:30:40,080 --> 00:30:43,440
Speaker 10: the interim. But the minutes do say that participants think

570
00:30:43,480 --> 00:30:46,280
Speaker 10: they needed to see more data on inflation and more

571
00:30:46,320 --> 00:30:48,760
Speaker 10: signs that aggregate demand and supply were moving into better

572
00:30:48,800 --> 00:30:51,960
Speaker 10: balance in order to be confident that those inflation pressures

573
00:30:52,120 --> 00:30:57,040
Speaker 10: were abating. Theoretically that data could have suggested. It suggested

574
00:30:57,080 --> 00:30:59,880
Speaker 10: that to them in recent weeks, but still when they're

575
00:31:00,080 --> 00:31:03,200
Speaker 10: noting the upside risks to inflation, which is what they

576
00:31:03,200 --> 00:31:05,960
Speaker 10: were talking about when most participants said that those upside

577
00:31:06,040 --> 00:31:10,120
Speaker 10: risks could require further tightening of monetary policy, that's really

578
00:31:10,440 --> 00:31:13,600
Speaker 10: what they're wary of. What the data is suggesting now

579
00:31:13,680 --> 00:31:15,760
Speaker 10: is one thing they are worried though, that there is

580
00:31:15,800 --> 00:31:17,920
Speaker 10: still upside risk that could be present in the future.

581
00:31:18,120 --> 00:31:20,760
Speaker 2: It says a lot, though, at least to me Kayley,

582
00:31:20,920 --> 00:31:24,200
Speaker 2: that we're dispatching Kaylee lines to the FED and the

583
00:31:24,240 --> 00:31:27,000
Speaker 2: whole world is holding its breath when the minutes come out.

584
00:31:27,040 --> 00:31:28,920
Speaker 2: It just speaks to the world that we're in here,

585
00:31:29,520 --> 00:31:31,600
Speaker 2: the data dependent world that we're in when it comes

586
00:31:31,600 --> 00:31:33,240
Speaker 2: to everything involving interest rates.

587
00:31:34,720 --> 00:31:37,800
Speaker 10: Yeah, that's exactly right. Anyone is looking for any semblance

588
00:31:37,800 --> 00:31:40,200
Speaker 10: of clarity they can get in regard to the Fed's thinking.

589
00:31:40,240 --> 00:31:42,720
Speaker 10: And luckily, now that we've got the minutes today, they

590
00:31:42,720 --> 00:31:44,959
Speaker 10: don't have to wait too much longer for even fresher

591
00:31:45,040 --> 00:31:48,400
Speaker 10: views because Jackson Hole is next week. Joe, I unfortunately

592
00:31:48,400 --> 00:31:49,920
Speaker 10: don't get to go to Jackson Hole like I got

593
00:31:49,920 --> 00:31:51,560
Speaker 10: to come down to the FED today. But you know,

594
00:31:51,600 --> 00:31:52,400
Speaker 10: a girl can dream.

595
00:31:52,600 --> 00:31:55,000
Speaker 2: I bet you Michael McKee's got that cowboy at ready.

596
00:31:55,040 --> 00:31:56,800
Speaker 10: Though it doesn't he I bet he does.

597
00:31:57,120 --> 00:31:58,800
Speaker 2: It's great to have you from the Fed, Kaylee. We'll

598
00:31:58,840 --> 00:32:02,120
Speaker 2: see you back here in the bureau. Kaylee lines Bloomberg's

599
00:32:02,440 --> 00:32:04,960
Speaker 2: very own who we normally spend time with every day

600
00:32:06,000 --> 00:32:07,840
Speaker 2: in this hour, and I want to bring Mark Zandi

601
00:32:07,920 --> 00:32:12,000
Speaker 2: back again, the chief economist for Moody's Analytics, to I

602
00:32:12,040 --> 00:32:14,040
Speaker 2: don't know if it's possible to put a bow on

603
00:32:14,160 --> 00:32:18,840
Speaker 2: this mark, but I'm I'm pointed to mortgage rates thirty

604
00:32:18,880 --> 00:32:22,520
Speaker 2: year hitting seven point one six percent last week, the

605
00:32:22,640 --> 00:32:25,440
Speaker 2: highest since two thousand and one. Incidentally, the first that

606
00:32:25,520 --> 00:32:29,040
Speaker 2: was the year I bought my first home, and that

607
00:32:29,160 --> 00:32:31,760
Speaker 2: seemed pretty good back then. It seems outrageous now.

608
00:32:33,720 --> 00:32:36,160
Speaker 6: Indeed, indeed, well, you know.

609
00:32:37,960 --> 00:32:39,880
Speaker 9: With a ten year at four and what four and

610
00:32:39,920 --> 00:32:44,120
Speaker 9: a quarter? You the spread again, it's mortgage rates are

611
00:32:44,160 --> 00:32:46,000
Speaker 9: awfully high, about three hundred basis points.

612
00:32:46,000 --> 00:32:47,320
Speaker 6: That's how you get to seven and a quarter.

613
00:32:48,120 --> 00:32:48,360
Speaker 4: You know.

614
00:32:48,480 --> 00:32:51,680
Speaker 9: If what I've noticed is that if you're at seven percent,

615
00:32:51,720 --> 00:32:54,760
Speaker 9: we're above that's when the housing market really takes it

616
00:32:54,840 --> 00:32:55,360
Speaker 9: on the chin.

617
00:32:55,520 --> 00:32:56,800
Speaker 6: You know, people pull back.

618
00:32:57,360 --> 00:32:59,080
Speaker 2: Yeah, this is is this the breaking point?

619
00:32:59,640 --> 00:32:59,880
Speaker 7: Yeah?

620
00:32:59,880 --> 00:33:01,480
Speaker 9: I think if we stay over seven, I think we

621
00:33:01,520 --> 00:33:04,000
Speaker 9: all start to see. You know, we had been seeing

622
00:33:04,000 --> 00:33:06,320
Speaker 9: some stabilization in the single family housing market, right because

623
00:33:06,360 --> 00:33:08,520
Speaker 9: mortgage rate take gotten back down closer to six and

624
00:33:08,760 --> 00:33:11,400
Speaker 9: felt like that was breathing some life back into the market.

625
00:33:11,440 --> 00:33:13,680
Speaker 9: But when you're seven percent plus and it now it

626
00:33:13,680 --> 00:33:15,080
Speaker 9: feels like we're going to be here for a little bit.

627
00:33:15,640 --> 00:33:18,760
Speaker 9: You know, affordability is now completely out of reach. And

628
00:33:19,200 --> 00:33:21,440
Speaker 9: I wouldn't expect the markets start weakening again and we'll

629
00:33:21,440 --> 00:33:24,480
Speaker 9: start to see some house price declines here in your futures.

630
00:33:24,520 --> 00:33:26,880
Speaker 9: But you know, that's part of the process. I mean,

631
00:33:27,200 --> 00:33:31,880
Speaker 9: the Federal Reserve is working hard to slow the economy's

632
00:33:31,880 --> 00:33:35,960
Speaker 9: growth by raising rates. The most rate sensitive secretor of

633
00:33:35,960 --> 00:33:37,360
Speaker 9: the economy is single family housing.

634
00:33:37,400 --> 00:33:39,440
Speaker 6: So you know, if single family housing.

635
00:33:39,680 --> 00:33:41,920
Speaker 9: Isn't taking it on the chin, then you know what

636
00:33:42,160 --> 00:33:43,840
Speaker 9: is and the Fed's not going to get what it needs,

637
00:33:44,040 --> 00:33:46,160
Speaker 9: you know, or what it wants in terms of slowing

638
00:33:46,200 --> 00:33:48,280
Speaker 9: growth and getting inflation back down to target. So this

639
00:33:48,400 --> 00:33:51,320
Speaker 9: is you know, it's no fun, it doesn't feel good,

640
00:33:51,400 --> 00:33:54,080
Speaker 9: but you know, this is I think by design, part

641
00:33:54,120 --> 00:33:54,760
Speaker 9: of the process.

642
00:33:55,000 --> 00:33:57,280
Speaker 2: As the yield curve gets back to something more normal, though,

643
00:33:57,320 --> 00:33:59,640
Speaker 2: what does that mean for mortgage rates?

644
00:33:59,800 --> 00:34:02,080
Speaker 9: Go, well, that that would be great, right, then then

645
00:34:02,280 --> 00:34:04,440
Speaker 9: we'll start to come in. That spread I mentioned between

646
00:34:04,480 --> 00:34:06,600
Speaker 9: mortgage rates and the ten year tursury or the three

647
00:34:06,640 --> 00:34:09,640
Speaker 9: inner basis points that's almost double what it is typically

648
00:34:09,840 --> 00:34:11,759
Speaker 9: and there's lots of you know, technical reasons for that,

649
00:34:11,800 --> 00:34:13,480
Speaker 9: one of which is going.

650
00:34:13,200 --> 00:34:14,560
Speaker 6: Back to the inverted Yell curve.

651
00:34:15,000 --> 00:34:17,080
Speaker 9: So you know that spread is going to mean very,

652
00:34:17,200 --> 00:34:20,319
Speaker 9: very wide until you know it's clear that you know

653
00:34:20,360 --> 00:34:22,480
Speaker 9: that y'll curb is starting to move in, and then

654
00:34:22,520 --> 00:34:25,120
Speaker 9: I expect the spread to come back in, just just

655
00:34:25,480 --> 00:34:27,600
Speaker 9: to put a stake in the ground. I think in

656
00:34:27,680 --> 00:34:30,279
Speaker 9: the long run, you know, abstracting from the ups and

657
00:34:30,320 --> 00:34:34,440
Speaker 9: downs in the economy and everything else, the thirty year

658
00:34:34,480 --> 00:34:36,759
Speaker 9: fixed mortgage rate should be somewhere between five and a

659
00:34:36,800 --> 00:34:39,879
Speaker 9: half and six, so you know, seven is too high.

660
00:34:39,960 --> 00:34:42,280
Speaker 9: But but you know, I don't think we should expect

661
00:34:42,320 --> 00:34:45,200
Speaker 9: anyone should expect to see mortgage rates back down to

662
00:34:45,320 --> 00:34:47,480
Speaker 9: like into the threes, which is where we were before

663
00:34:47,520 --> 00:34:48,680
Speaker 9: if I started raising rates.

664
00:34:48,760 --> 00:34:51,359
Speaker 2: I hope everybody's taking notes. You're not selling the five

665
00:34:51,400 --> 00:34:55,600
Speaker 2: point five from Mark Zandy. So Mark, it was one

666
00:34:55,719 --> 00:35:02,760
Speaker 2: year ago today now. The signing of the Inflation Reduction

667
00:35:02,880 --> 00:35:05,840
Speaker 2: Actor was a big moment for Joe Biden. God they

668
00:35:05,880 --> 00:35:08,880
Speaker 2: even played Hail to the Chief. Joe Manchin shared the

669
00:35:08,880 --> 00:35:12,359
Speaker 2: stage with him at the White House. There's been an

670
00:35:12,360 --> 00:35:14,759
Speaker 2: issue ever since then and people understanding what the heck

671
00:35:14,800 --> 00:35:17,640
Speaker 2: it is and why it matters. And I remember talking

672
00:35:17,640 --> 00:35:19,040
Speaker 2: to you going all the way back to this thing

673
00:35:19,080 --> 00:35:22,480
Speaker 2: called Build Back Better, which they took the pieces from

674
00:35:22,520 --> 00:35:25,200
Speaker 2: that turn it into the IRA. And I wonder if

675
00:35:25,200 --> 00:35:27,960
Speaker 2: you feel us upbeat about things now as you did

676
00:35:28,000 --> 00:35:29,919
Speaker 2: a year ago, knowing that it's going to take time

677
00:35:29,960 --> 00:35:32,319
Speaker 2: for a lot of this stuff to take hold. There

678
00:35:32,320 --> 00:35:34,240
Speaker 2: are also new questions about what it might cost.

679
00:35:36,320 --> 00:35:38,000
Speaker 6: Yeah, I still feel really good about it.

680
00:35:38,000 --> 00:35:39,680
Speaker 9: I mean, at the end of the day, the Inflation

681
00:35:39,760 --> 00:35:43,640
Speaker 9: Reduction Act was really about climate, climate risk, climate mitigation,

682
00:35:43,880 --> 00:35:47,280
Speaker 9: trying to take a step in the direction of reducing

683
00:35:47,320 --> 00:35:52,399
Speaker 9: our CO two emissions, because that's critical, I think here

684
00:35:52,920 --> 00:35:55,920
Speaker 9: to ensure that temperatures don't continue to rise and we

685
00:35:55,960 --> 00:36:00,600
Speaker 9: don't have more economic loss due to hurricanes and heat

686
00:36:00,640 --> 00:36:03,279
Speaker 9: stress and everything else. So you know, I think this

687
00:36:03,320 --> 00:36:05,360
Speaker 9: is vitally critical and we got to get going, and

688
00:36:05,400 --> 00:36:08,239
Speaker 9: I think this was a good, strong step in the

689
00:36:08,320 --> 00:36:12,840
Speaker 9: right direction. It's it's not the IRA is not using

690
00:36:12,880 --> 00:36:16,680
Speaker 9: sticks to get people moving on col reducing CO two emissions.

691
00:36:16,680 --> 00:36:19,120
Speaker 9: That would be like a carbon tax. We we just

692
00:36:19,200 --> 00:36:22,320
Speaker 9: aren't politically able to do that. This is all about carrots,

693
00:36:22,760 --> 00:36:25,440
Speaker 9: you know, tax credits to get the private sector to

694
00:36:26,120 --> 00:36:28,680
Speaker 9: move in the right direction here to address climate risk.

695
00:36:29,040 --> 00:36:31,200
Speaker 9: And it's working. And actually the interesting thing, as you

696
00:36:31,239 --> 00:36:35,120
Speaker 9: point out, is it's working much better than anticipated. The

697
00:36:35,160 --> 00:36:37,799
Speaker 9: private sector is all in on these tax credits, and

698
00:36:37,840 --> 00:36:40,200
Speaker 9: it may end up being more more expensive. But you know,

699
00:36:41,160 --> 00:36:43,520
Speaker 9: there are pay fors in the IRA, meaning you know,

700
00:36:43,600 --> 00:36:47,080
Speaker 9: there were efforts to raise revenue and cut other spending

701
00:36:47,120 --> 00:36:50,000
Speaker 9: to pay for the IRA. It doesn't look like that's

702
00:36:50,000 --> 00:36:52,320
Speaker 9: going to happen, at least not in the next ten years,

703
00:36:52,360 --> 00:36:56,200
Speaker 9: but if you know, you extrapolaid out or twenty twenty

704
00:36:56,200 --> 00:36:59,040
Speaker 9: five years, then then it is very very much paid for.

705
00:36:59,160 --> 00:37:02,080
Speaker 9: And then after that the benefits are quite enormous because

706
00:37:02,120 --> 00:37:04,920
Speaker 9: it does go to reducing you know CO two missions

707
00:37:04,920 --> 00:37:07,120
Speaker 9: and temperatureize, which is really going to be important, you know,

708
00:37:07,160 --> 00:37:09,040
Speaker 9: as you move towards the mid part of this century.

709
00:37:09,200 --> 00:37:12,239
Speaker 2: But it's called the Inflation Reduction Act, Yeah, have a

710
00:37:12,239 --> 00:37:12,759
Speaker 2: different name.

711
00:37:14,160 --> 00:37:16,400
Speaker 9: Well, as you may recall, you know, we were in

712
00:37:16,440 --> 00:37:21,480
Speaker 9: the middle of the inflation raging was just ragings. Yeah,

713
00:37:21,760 --> 00:37:23,520
Speaker 9: you need to do something to get across the finish

714
00:37:23,600 --> 00:37:25,239
Speaker 9: line politically, and I think that's what it was. There

715
00:37:25,280 --> 00:37:28,000
Speaker 9: were some elements, other elements of it that did reduce

716
00:37:28,000 --> 00:37:29,719
Speaker 9: the cost of living for people. I mean there was

717
00:37:30,200 --> 00:37:33,960
Speaker 9: you know, things related to Obama Care subsidies, so to

718
00:37:34,040 --> 00:37:37,279
Speaker 9: make it more affordable to afford health insurance, and some

719
00:37:37,320 --> 00:37:40,399
Speaker 9: things to reduce the cost of prescription drugs, those kinds

720
00:37:40,400 --> 00:37:43,040
Speaker 9: of things. So it's not completely devoid of you know,

721
00:37:43,600 --> 00:37:46,680
Speaker 9: efforts to reduce inflation. But you know, obviously that was

722
00:37:46,719 --> 00:37:49,120
Speaker 9: a marketing you know ployee more than anything.

723
00:37:49,640 --> 00:37:51,960
Speaker 2: Hey, it's great to catch up with you, Mark Marks Andy,

724
00:37:51,960 --> 00:37:55,400
Speaker 2: the chief economists for Moody's Analytics on a score of topics.

725
00:37:55,400 --> 00:37:58,600
Speaker 2: Happy Birthday, I guess Ira, you're.

726
00:37:58,400 --> 00:38:02,520
Speaker 1: Listening to the Bloomberg Sound Podcast. Catch us live weekdays

727
00:38:02,520 --> 00:38:05,879
Speaker 1: at one Eastern on Bloomberg dot com, the iHeartRadio app,

728
00:38:05,920 --> 00:38:08,880
Speaker 1: and the bloom Business app, or listen on demand wherever

729
00:38:08,920 --> 00:38:10,000
Speaker 1: you get your podcast.

730
00:38:11,160 --> 00:38:14,240
Speaker 2: We bring you back to Kaylee Lines with some final

731
00:38:14,280 --> 00:38:17,880
Speaker 2: thoughts fresh back from the Fed. And as they say, Kaylee, uh,

732
00:38:18,280 --> 00:38:22,000
Speaker 2: time is money, and if you're the Secretary of State,

733
00:38:22,040 --> 00:38:24,200
Speaker 2: you don't have a lot of time. This is true,

734
00:38:24,640 --> 00:38:28,120
Speaker 2: and so when it comes to the matter of Barbenheimer,

735
00:38:29,080 --> 00:38:31,680
Speaker 2: it's pretty tough to get there, right three and a

736
00:38:31,719 --> 00:38:35,480
Speaker 2: half hours plus two something hours. Yeah, I haven't seen

737
00:38:35,840 --> 00:38:39,560
Speaker 2: a half day commitment right exactly, but you better believe

738
00:38:39,640 --> 00:38:42,240
Speaker 2: this came up at the briefing today at the State's Department.

739
00:38:42,280 --> 00:38:44,799
Speaker 1: A related note, have you seen Appenheimer yet?

740
00:38:44,960 --> 00:38:47,120
Speaker 6: And if you have, what do you think?

741
00:38:47,640 --> 00:38:49,600
Speaker 8: I'm glad that these are two very distinct questions To

742
00:38:49,640 --> 00:38:52,480
Speaker 8: take your second question. First, No, I've not yet seen Apahira.

743
00:38:52,520 --> 00:38:54,279
Speaker 8: I'm trying to find the what three and a half

744
00:38:54,320 --> 00:38:55,239
Speaker 8: hours necessary?

745
00:38:55,400 --> 00:38:56,399
Speaker 6: That's fird to watch it.

746
00:38:56,360 --> 00:38:59,680
Speaker 1: But it is so expensive if you do the iMac.

747
00:38:59,360 --> 00:39:00,840
Speaker 8: Well it isn't the cards, or we'll wait till it

748
00:39:00,880 --> 00:39:01,480
Speaker 8: starts streaming.

749
00:39:01,520 --> 00:39:06,960
Speaker 2: But imagine the soul crushing sound for Christopher Nolan to

750
00:39:07,000 --> 00:39:10,280
Speaker 2: hear the Secretary of State indicate he may watch it streaming,

751
00:39:10,480 --> 00:39:14,880
Speaker 2: streaming on his phone. Maybe, but what about the other movie?

752
00:39:14,920 --> 00:39:19,000
Speaker 8: I also look forward to seeing Barbie, Yes, but no

753
00:39:19,520 --> 00:39:21,759
Speaker 8: set plans to do that again. Have to find have

754
00:39:21,840 --> 00:39:24,080
Speaker 8: to find the time. Maybe we can do a double

755
00:39:24,080 --> 00:39:27,560
Speaker 8: feature in briefing room. That's for those who've seen neither movie.

756
00:39:27,800 --> 00:39:32,280
Speaker 10: Okay, Christopher Nolan and Greta Gerwig need to get him

757
00:39:32,320 --> 00:39:35,120
Speaker 10: like a copy before the DD comes out. Send it

758
00:39:35,160 --> 00:39:37,239
Speaker 10: with him on the State Department plane for the next

759
00:39:37,239 --> 00:39:39,919
Speaker 10: time he travels. Has a really long flight halfway around

760
00:39:39,960 --> 00:39:40,320
Speaker 10: the world.

761
00:39:40,400 --> 00:39:42,719
Speaker 2: That's a perfect and that's what you can watch. That's

762
00:39:42,760 --> 00:39:45,080
Speaker 2: he's got nothing but time ye where nobody's trying to

763
00:39:45,360 --> 00:39:50,680
Speaker 2: call him or anything that on a plane to some

764
00:39:51,320 --> 00:39:56,239
Speaker 2: summit in another country. But I think we know what

765
00:39:56,320 --> 00:39:58,800
Speaker 2: the weekend plans are for Anthony Clincoln.

766
00:39:59,200 --> 00:39:59,520
Speaker 9: Thanks.

767
00:40:00,120 --> 00:40:02,080
Speaker 2: I don't think he wants to see Oppenheimer. I think

768
00:40:02,120 --> 00:40:03,719
Speaker 2: we know what movie he wants to see. He was

769
00:40:03,840 --> 00:40:07,800
Speaker 2: very animated when he talked about the other films. Maybe

770
00:40:07,840 --> 00:40:13,360
Speaker 2: a pink jacket for the Secretary tie.

771
00:40:13,600 --> 00:40:15,520
Speaker 7: Maybe his next trip will be to Barbiewell.

772
00:40:15,840 --> 00:40:20,759
Speaker 2: That would be fantastic. With apologies for the earworm, I

773
00:40:20,880 --> 00:40:22,840
Speaker 2: just had to play around for one minute with my

774
00:40:22,920 --> 00:40:27,760
Speaker 2: friend Kaylee and of course the Secretary of State. Thanks

775
00:40:27,760 --> 00:40:29,880
Speaker 2: for listening to the Sound On Podcast. Make sure to

776
00:40:29,920 --> 00:40:33,080
Speaker 2: subscribe if you haven't already, at Apple, Spotify, and anywhere

777
00:40:33,080 --> 00:40:35,440
Speaker 2: else you get your podcasts, and you can find us

778
00:40:35,520 --> 00:40:38,880
Speaker 2: live every weekday from Washington, DC at one pm Eastern

779
00:40:38,920 --> 00:40:42,360
Speaker 2: Time at Bloomberg dot com