Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
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Speaker 2: Terminal and the Bloomberg Business app. We begin this hour
Speaker 2: with Stoff sitting near all time highs, the S and
Speaker 2: P five hundred approaching six thousand, notching its forty ninth
Speaker 2: record so far this year, Equities heading towards their best
Speaker 2: week of twenty twenty four as Trump takes back the
Speaker 2: White House and Vin Powell continues cunning interest rates. Joining
Speaker 2: us now Mohammad Erin of Queen's College, Cambridge. Mohammed, Welcome
Speaker 2: to the program. I know you watch the news conference,
Speaker 2: so let's start there. What would your takeaway?
Speaker 3: So three takeaways?
Speaker 4: John One is as expected in terms of the characterization
Speaker 4: of policy, desire to maintain optionality. And then where I
Speaker 4: really felt for him, John is not in his response
Speaker 4: to the question Visa VIVI the President elect, where pow
Speaker 4: the lawyer came out very strongly. It is this sort
Speaker 4: of muddled view of what is going on and inability
Speaker 4: to pivot forward. So think of his responses to the
Speaker 4: question of decomposition of the bond yield. Think of his
Speaker 4: characterization of real wages, does he want them higher, does
Speaker 4: he want them lower? Think of his characterization of the
Speaker 4: labor market. And then that key question by Mike McKee
Speaker 4: when he said you've.
Speaker 1: Looked backwards, what about forward?
Speaker 4: And he Powell ended up talking backwards, And you get
Speaker 4: very strongly a couple of feelings. Certainly I did what
Speaker 4: I felt for him. One is he's become totally hostage
Speaker 4: to data. And two is that he is.
Speaker 1: In this world of the seventies.
Speaker 4: And eighties where once you are away from the extremes
Speaker 4: of really high inflation or the threat of deflation, that
Speaker 4: somehow we believe monetary policy can fine tune outcomes, and
Speaker 4: we know that if you overrely on demand management to
Speaker 4: fine tune, you end up with all sorts of creduital damage.
Speaker 4: I really felt for him, but not for the political
Speaker 4: reasons that most of the media is covering right now.
Speaker 2: Somehow, as you've said this a few times, the lack
Speaker 2: of a strategic underpinning. Could you just provide some clarity
Speaker 2: on what you think that underpinning should be. Given the
Speaker 2: lack of clarity we have about the so called trifecta
Speaker 2: down in Washington, d C. What policy might look like,
Speaker 2: the margins that work through to get that clarity for
Speaker 2: twenty twenty five and really to sit there in December,
Speaker 2: which I think we all agree, is that much harder
Speaker 2: meeting to make a decision on interest rates and to
Speaker 2: provide forecasts.
Speaker 4: It shouldn't have been a harder meeting, John, It shouldn't
Speaker 4: have been a hard to meeting because there was great
Speaker 4: clarity back in July, and you and I talked about
Speaker 4: this that it was time to start reducing rates, that
Speaker 4: he could have done it twenty five, twenty five, twenty five,
Speaker 4: we were a distance from most estimate of the neutral rate,
Speaker 4: which is somewhere in the upper threees I think, And
Speaker 4: there's a distance to.
Speaker 1: Go, and you would use the restrict interst of policy.
Speaker 4: Instead, we got no change in July fifty in September,
Speaker 4: then a sense you know what fifty was a mistake,
Speaker 4: We got the twenty five and now, as Lisa pointed out,
Speaker 4: probably is are changing vis December. You know, this is
Speaker 4: not what policy should be doing, but this is what
Speaker 4: policy ends up doing. When you are excessively data dependent.
Speaker 4: You have a pass towards closer to neutral, You have
Speaker 4: reasons why you should pursue this, and if the election
Speaker 4: promises tend to end up to be reality, then you
Speaker 4: could change a strategic view. But as he rightly said,
Speaker 4: we don't know how much of this will end up
Speaker 4: being actual implementation.
Speaker 5: His strategic view, Mohammed seems to be let's cut by
Speaker 5: twenty five as they just did, and then maybe twenty
Speaker 5: five again in December, and then the question really becomes
Speaker 5: a blank slate. He said that they will have more
Speaker 5: data to really make that assessment, putting the focus much
Speaker 5: more on CPI. Do you think it was a mistake
Speaker 5: for him to reintroduce the emphasis on the FEDS mandate
Speaker 5: of inflation after basically kicking it to the curb and
Speaker 5: focusing simply on the employment picture.
Speaker 1: Yeah, it was such a confused discussion. I mean, he
Speaker 1: was pushed on core.
Speaker 4: Inflation twelve months, because he had only focused on headline inflation,
Speaker 4: so the two point one versus two point seven. So
Speaker 4: he got a question, what about the two point seven
Speaker 4: that you haven't mentioned? And then we got into the
Speaker 4: discussion of is it twelve months, is it three months?
Speaker 4: Is it six months? He himself previously I had said,
Speaker 4: look at the twelve month's number. Now we look at
Speaker 4: the three months number six number. Just like we went
Speaker 4: through so many definitions of core and super core.
Speaker 1: And everything else.
Speaker 4: I mean, yes, he added confusion when there's actually little
Speaker 4: need to add confusion right now on that issue.
Speaker 5: So what do you think the FED should be doing
Speaker 5: if ideally if they were going to have a framework,
Speaker 5: or what framework should they follow? And I say this
Speaker 5: as Jim Bianco over at Piancre Research says that right
Speaker 5: now to cut rates again might be worse than transitory.
Speaker 1: So I don't agree with that. I think that we
Speaker 1: are a distance away from what the neutral rate is.
Speaker 4: I think that inflationary expectations are relatively anchored, not at
Speaker 4: two percent. But you know my view that two percent
Speaker 4: is too low, and certainly now is too low an
Speaker 4: inflation target for this economy unless you want to structurally
Speaker 4: weaken it in a significant manner. They should be on
Speaker 4: a path of until we get significant new information on
Speaker 4: what's ahead.
Speaker 1: I'd stress what's ahead, we will.
Speaker 4: Be on a path for now of maintaining a twenty
Speaker 4: five basis points cut and the other thing I have
Speaker 4: stress it is time to get out about this framework.
Speaker 4: They have this mindset they have that they're the only
Speaker 4: game in town. They are not the only game in town.
Speaker 4: They should leave center stage right now and become more
Speaker 4: of an observer and wait to see what plays out.
Speaker 4: But you know, once you are on center stage, you've
Speaker 4: been the only game in town for so long it
Speaker 4: is really difficult to exit stage left.
Speaker 2: So Muhammad, that's your advice to the policy maker. Is
Speaker 2: your advice different to a market participant? Because markets, as
Speaker 2: you know, are anticipatory. The FED you've suggested is overreactionary.
Speaker 2: So I want to understand from your perspective now what
Speaker 2: you would say to a market sticipant whether they should
Speaker 2: be pricing in a big positive growth shop that could
Speaker 2: come with some additional in flight.
Speaker 1: So attend.
Speaker 4: The direction of travel is clear, more growth, slightly higher inflation,
Speaker 4: a higher public sector borrow requirement and a huge sucking
Speaker 4: sound where a lot of phone capital.
Speaker 1: Will end up in the US. That is the direction
Speaker 1: of travel.
Speaker 4: What you've got to figure out, and it's hard, and
Speaker 4: that's why we've got to market is the magnitudes of
Speaker 4: these things.
Speaker 1: But I think John, the direction of travel is clear.
Speaker 4: The magnitudes are going to become clearer as we get
Speaker 4: firm indications not only of what the policy proposals are,
Speaker 4: but who's going to implement these policies.
Speaker 1: The appointments are going to be very important going forward.
Speaker 6: I couldn't agree more.
Speaker 2: Do you think this could be a bigger problem for
Speaker 2: the rest of the world that it will be the
Speaker 2: United States?
Speaker 4: Oh? Absolutely. This is a period in which US dominance
Speaker 4: of the global system is going to increase, both for
Speaker 4: positive reasons and for negative reasons. In the short term,
Speaker 4: the rest of the world simply cannot build enough pipes.
Speaker 1: Around the US.
Speaker 4: They're trying, and they've been doing it, but these pipes
Speaker 4: are very small compared to the size of the US.
Speaker 4: Over the longer term, you will see more pipes being
Speaker 4: built around the US at the core of the system.
Speaker 7: Muhammad the journalist yesterday and the press conference get a
Speaker 7: for effort for trying to get J Powell talk about politics,
Speaker 7: but he wasn't going anywhere near this. Do you actually
Speaker 7: have concerns about the independence of the FED?
Speaker 1: So I would have gone even less. I mean, he
Speaker 1: gave the legal response.
Speaker 4: This was J Pile, J Powell the lawyer, coming out
Speaker 4: in a very strong way. If I had been him,
Speaker 4: I would have simply said, I'm not going to discuss
Speaker 4: this issue.
Speaker 1: I wouldn't have said no. I would have said I.
Speaker 4: Would simply say I would not have discussed this issue.
Speaker 4: Saying no opens up a whole new host of things.
Speaker 7: Do you think saying no was hostile to the former
Speaker 7: president going to be future president?
Speaker 4: I think if it wouldn't surprise me if it's viewed
Speaker 4: as hostile. I think what Chair Power was trying to
Speaker 4: do is give the legal answer. However, it can be
Speaker 4: easily viewed as hostile.
Speaker 5: Yes, based on your view of the US gaining that
Speaker 5: sucking sound of capital away from the rest of the world,
Speaker 5: do you think that sucking sound will also go to
Speaker 5: finance the deficit in a way that.
Speaker 1: Really caps off yields.
Speaker 5: It doesn't really allow them to rise as high as
Speaker 5: some people are threatening such as five percent.
Speaker 4: Yes, I mean so, there's two interpretations of why yields
Speaker 4: came down.
Speaker 1: One is the market has revisited.
Speaker 4: The other, which I favor more, is that US bonds
Speaker 4: relative to the rest of the world became really cheap
Speaker 4: and people reallocated away.
Speaker 1: If you look at what.
Speaker 4: Happened to the differentials visa be the rest of the world,
Speaker 4: US bond in relative space, and most of the time,
Speaker 4: as you know, Lisa, this market solves in relative space
Speaker 4: in the advanced world. It solves more in absolute space
Speaker 4: in emerging markets, but in the advanced world they tend.
Speaker 1: To solve in relative space.
Speaker 4: And relative to other advanced economies, the US yields were looking.
Speaker 1: Very attractive, Muhammed.
Speaker 6: It's wonderful to catch up with you, sir.
Speaker 2: We're lucky to get some time with you. You want
Speaker 2: to get now? Is Ryan Peterson a flex sport right?
Speaker 2: Welcome to the program, sir, let's start with this. How
Speaker 2: busy are you right now? And as business increased a
Speaker 2: ton over the last few weeks.
Speaker 8: Yeah, well, you know, not just necessarily because of the Trump,
Speaker 8: of the possibility of a trumple actually, but we also
Speaker 8: have a looming port strike on the East Coast. Remember
Speaker 8: the Port they went on strike last month, but they
Speaker 8: got a ninety day hiatus and January fifteenth that contract end,
Speaker 8: so that all the East Coast sports right before Trump
Speaker 8: gets elected may go back on striking. So a lot
Speaker 8: of people are trying to get goods in before that
Speaker 8: might happen. So there's always something in global trade.
Speaker 7: Was called union Joe, how do you think the port
Speaker 7: negotiations will go under President elect Trump?
Speaker 3: Yeah, it's a really big question.
Speaker 8: It's sort of like who he listens to, because he
Speaker 8: himself says back in October made statements in favor of
Speaker 8: the union and saying, hey, they need to write to negotiate.
Speaker 1: Against these FOURIGN companies.
Speaker 8: At the same time, his main advisor and how Elon
Speaker 8: Musk has said, well that the union's demands for no
Speaker 8: automation are ridiculous and need to be stopped. So it's
Speaker 8: a really big open question who's Trump going to listen
Speaker 8: to and how does that play out?
Speaker 7: Because of that dynamic, do you think these talks could
Speaker 7: really drag on and how long could we see them
Speaker 7: dragging into twenty twenty five?
Speaker 8: Well, that's one big concern is sort of the talks
Speaker 8: are happening five days before the inauguration, and so is
Speaker 8: you know, what's the current BIDE administration's.
Speaker 3: Role and how committed are they to making that happen.
Speaker 8: And then that's of course with the backdrop of territs WI,
Speaker 8: which we were also alluding to here in your intros.
Speaker 8: Trump's going to want to come in and have that priority.
Speaker 8: But it's very hard to govern when there's always something
Speaker 8: coming at you, right, Ryan.
Speaker 5: Just to zoom out a little bit, there is this
Speaker 5: question you mentioned that things are getting very busy. A
Speaker 5: lot of people are front loading some of their orders
Speaker 5: to get a hoad of both whatever policy changes might come,
Speaker 5: as well as that potential strike. Can you give us
Speaker 5: some sense, some scope of just how much busier it is,
Speaker 5: how much rates are able to go up for you
Speaker 5: as people do try to get ahead of that uncertainty.
Speaker 8: Yeah, I mean, you know you're seeing volumes a little
Speaker 8: bit higher, but it's very hard to attribute to any
Speaker 8: one thing in this It's a very complex, dynamic world.
Speaker 8: So I wouldn't want to say, oh, the volumes are
Speaker 8: up this much because of because of tariffs or because
Speaker 8: of looming changes in policy. So I don't have a
Speaker 8: specific number to tie to it. That said, we've seen
Speaker 8: it every time. Whenever there's new tariffs, you see a
Speaker 8: big surge. You saw it with the BIDA mistration earlier
Speaker 8: this year when they increased three oho one Section three
Speaker 8: oh one tariffs on Chinese steel, for example. That led
Speaker 8: to a big push and ocean freight rates went up about.
Speaker 3: Three x earlier this year. From long run.
Speaker 8: Historical average, it costs about two thousand dollars to ship
Speaker 8: a container from Asia to the US. That went up
Speaker 8: to over six seven thousand dollars in the spot market
Speaker 8: this summer, and it was it was driven by that.
Speaker 3: It was driven by.
Speaker 8: People pulling goods in both before the port strike and
Speaker 8: before the tariffs. So we've seen this movie before, and
Speaker 8: we're probably heading right back into something similar.
Speaker 5: I'd like to lead into this idea that we've seen
Speaker 5: this movie before. We've had the experience of the twenty
Speaker 5: eighteen different tariffs that came to play twenty seventeen, twenty eighteen.
Speaker 5: There's a real question about how much companies have already
Speaker 5: rejiggered their supply chains to adjust to a new reality,
Speaker 5: new pressures, a new focus on near shoring and on shoring.
Speaker 5: How much have you seen a real shift in the
Speaker 5: patterns of your clients in terms of where they ship
Speaker 5: from now.
Speaker 8: It's been massive over the last decade, and not just
Speaker 8: driven by the terriffs, although it's a big factor, but
Speaker 8: also driven by labor costs Chinese. Chinese labor costs have
Speaker 8: gone up, and good for the workers in China, they're
Speaker 8: getting paid more, but they're no longer the low cost
Speaker 8: source of labor for the world, and so companies have
Speaker 8: been relocating that the companies that can have been relocating,
Speaker 8: especially Vietnam, India, Mexico have been sort of like three
Speaker 8: big winners, but many other countries too.
Speaker 1: And that said, there are a lot of supply.
Speaker 8: Chains where you just can't get it done outside of China.
Speaker 8: The manufacturing expertise the ecosystem of component suppliers and for
Speaker 8: that I'm specifically talking about electronics or a few other sectors,
Speaker 8: but really the electronics sector has a real hard time
Speaker 8: moving out of moving manufacturing out of China. And then
Speaker 8: the other big factor, the other big industry here is
Speaker 8: e commerce. Chinese e commerce parcels, so going direct to
Speaker 8: consumer all the way from China are close to fifty
Speaker 8: percent of the world's air freight now, and that is
Speaker 8: already being discussed to shut that down or to impost
Speaker 8: tariffs on it. Remember, those fly duty free under the
Speaker 8: current regulations, and even the Biden administrations and the current
Speaker 8: CBP has a directive Customs and Border Protection excuse me
Speaker 8: as a directive to take away those tariff exemptions that
Speaker 8: may make those non competitive.
Speaker 3: So there's a lot of different.
Speaker 8: Factors here, and I think you'll see an escalation because remember,
Speaker 8: these new tariffs are on top of the ones that
Speaker 8: the Trump and Biden administration put in. They're not It's
Speaker 8: not just like we're back to Trump's tariffs. Biden never
Speaker 8: took them away, and they'll be talking about adding on
Speaker 8: to those.
Speaker 5: You mentioned Vietnam and you mentioned Mexico, and I just wonder,
Speaker 5: especially given some of the threats that we've heard from
Speaker 5: the Trump campaign, how much you see from the flows
Speaker 5: that Mexico is kind of a trojan horse for Chinese
Speaker 5: goods And the same with Vietnam.
Speaker 8: Yeah, in both cases, you've seen exports from China to
Speaker 8: these countries increase by twenty percent over the last two years,
Speaker 8: and so that implies there were either being goods there
Speaker 8: as raw materials into a manufacturing process, or in some
Speaker 8: cases there's probably some fraud where they're just relabeling things
Speaker 8: and saying made in Mexico was actually made in China.
Speaker 8: I think it's probably much more of the former, much
Speaker 8: more of raw materials moving in, and so it's not
Speaker 8: necessarily the market finds a way. You know, it's very
Speaker 8: hard to when when a country like China is so
Speaker 8: good at manufacturing, very hard for businesses to avoid using that.
Speaker 8: They're just going to have a competitive advantage and the
Speaker 8: markets route around it. And the other factor here is
Speaker 8: that it's it's expensive. Trucking is expensive, so moving a
Speaker 8: container or a truckload of cargo from Mexico up to
Speaker 8: the United States is not cheaper than shipping a container
Speaker 8: from Vietnam to the United States. Ocean freight, the physics
Speaker 8: are unmatched, so it's so much cheaper than land freight.
Speaker 8: So it's not necessarily that just because Mexico is closer
Speaker 8: in terms of distance, that it's cheaper.
Speaker 7: There's one sailing rood I wanted to ask you about,
Speaker 7: given we were going to have a change of an
Speaker 7: administration come January, the Red Sea, do you think We're
Speaker 7: going to see more freight go through there.
Speaker 8: We've already started to see a little bit of restoring
Speaker 8: of services through the Red Sea just in the last month.
Speaker 8: And that's before Trump. You know, even anyone had an
Speaker 8: idea that Trump would win. Some carriers are starting to
Speaker 8: brave that. I think there's a real possibility for a breakthrough,
Speaker 8: but I'm not I don't have any insight into, you know,
Speaker 8: what Trump might do with her on or the HOOTI
Speaker 8: rebels there, but I think you should expect a new
Speaker 8: set of initiatives, policies, and potentially potentially military.
Speaker 3: Action, but very unclear.
Speaker 8: One interesting story I thought didn't get enough attention was
Speaker 8: that this allegation that the houtis the rebels in Yemen
Speaker 8: or the really the government in Yemen has been taking
Speaker 8: bribes effectively and running a toll road to the tune
Speaker 8: of two billion dollars a year from ocean carriers and
Speaker 8: ocean shippers to move cargo through and sort of.
Speaker 3: A payoff to not shoot down.
Speaker 8: That's a really crazy development if true, and I like
Speaker 8: to see more about it. I don't have any sources
Speaker 8: on that other than reading it in the news.
Speaker 2: Well, I now a reporter around this table. That's going
Speaker 2: to change that story a little bit more now, Ryan,
Speaker 2: appreciate that.
Speaker 1: Ryan.
Speaker 2: Let's do this again soon. This was super sharp. Really
Speaker 2: appreciate your time, Ryan Peterson. There of flex for Casey
Speaker 2: of signum Global Advice is writing. Broadly speaking, we see
Speaker 2: Trump beginning his second term unrestrained Republican trifecta Supreme Court majority,
Speaker 2: popular mandate. This may be a once in a generation
Speaker 2: chance for Republicans to ennact sweeping change. Rob John just
Speaker 2: now for more, Rob, Good morning morning. Can we start
Speaker 2: with a trifecta you think it gets done? What kind
Speaker 2: of margins are you looking for?
Speaker 9: Really tate margins. I mean it's going to be as
Speaker 9: if not tighter than what we're seeing currently. Of the
Speaker 9: twenty five seats still to be called, I think Republicans
Speaker 9: very easily win or comfortably win nine of them, so
Speaker 9: that gets them to two nineteen, and there.
Speaker 6: Are other sheets Democrats will win in there.
Speaker 9: There are about five or six seats that are absolutely
Speaker 9: toss ups.
Speaker 6: At this point.
Speaker 9: So the best Republicans can hope for, I think is
Speaker 9: two twenty maybe two twenty one.
Speaker 6: But it looks a lot like it does today.
Speaker 7: House majority with Tom Emmer this morning Punchable News says,
Speaker 7: I don't care if it's two eighteen, two nineteen, two twenty.
Speaker 7: I don't give a damn. As long as you have
Speaker 7: the majority, we're going to be successful. But if you
Speaker 7: have two eighteen, basically everyone becomes a king.
Speaker 9: No, yeah, everybody becomes a king. I think it's worse
Speaker 9: for at least Deephonik, who would like to be appointed
Speaker 9: somewhere else, and they don't want to deal with the
Speaker 9: special election in New York at this point that would
Speaker 9: take away their majority.
Speaker 6: If it was that slim.
Speaker 9: But I mean, frankly, Donald Trump is president elect, which
Speaker 9: means in the House, Donald Trump is king. I mean
Speaker 9: they are going to take their shots not from Mike
Speaker 9: Johnson or anybody else.
Speaker 6: They're going to take them from Trump.
Speaker 7: So besides at least Stefan and who may go over
Speaker 7: to the UN, what does the leadership look like in
Speaker 7: the House.
Speaker 9: I think it's Speaker Johnson. I think it's Speaker Johnson
Speaker 9: will stay in his seat.
Speaker 1: He did what he had to do.
Speaker 9: I mean, he retains the Republican majority very likely at
Speaker 9: this point. And you know, other than that, I frankly
Speaker 9: don't think it matters very much because I think this
Speaker 9: will be a session which legislation is done top ten.
Speaker 6: It'll come from Trump, It'll come from.
Speaker 9: The White House, and the Senate very likely to fall
Speaker 9: online the House probably even more so.
Speaker 3: So.
Speaker 7: What's the first order of business?
Speaker 6: The border or taxes?
Speaker 9: I think it's the border. I think it's oil and gas,
Speaker 9: both through executive action. I think taxes will take a
Speaker 9: little bit longer because we will see I mean, it's
Speaker 9: not a budget negotiation between Republicans and Democrats. It'll be
Speaker 9: a budget negotiation between the center and the right of Republicans,
Speaker 9: and we'll see that done through budget reconciliation.
Speaker 6: That'll take a number of months.
Speaker 5: Will what will the immigration proposal look like? Is it
Speaker 5: going to be mass deportations.
Speaker 9: I think we will hear about mass deportations. I think
Speaker 9: it's very unlikely we'll see that in the short term, frankly,
Speaker 9: because it just requires so many billions and billions of
Speaker 9: dollars to do that. There isn't an obvious path forward
Speaker 9: for mass deportations. I think very likely what we see
Speaker 9: is targeted deportations of illegal immigrants who have committed crimes
Speaker 9: on US soil. Will get pictures and videos of immigrant
Speaker 9: being taken across the border and buses, and we're very
Speaker 9: likely to see remain in Mexico reinstated.
Speaker 6: But deporting tens of millions of.
Speaker 9: Illegal immigrants really really hard to do without additional funding
Speaker 9: from Congress, which would take a lot longer.
Speaker 5: You know, one of the most interesting conversations that we've had,
Speaker 5: I thought was Representative french Hill yesterday, where we were
Speaker 5: talking about the budget deficit and his concern about it.
Speaker 5: And he is a Republican, he is a House member,
Speaker 5: he is a supporter of Trump, and he poured a
Speaker 5: lot of cold water over some of the proposals that
Speaker 5: we heard from Elon Musk and the feasibility of cutting
Speaker 5: two trillion dollars of the budget so easily. So how
Speaker 5: much pushback will there be within even the Republican Party
Speaker 5: as far as expanding the deficit to the degree that
Speaker 5: some people project that the plans would do.
Speaker 9: I think there will be some pushback, but I think
Speaker 9: almost necessarily we will see an extension of the Trump
Speaker 9: tax cuts, all of them, not just some of them.
Speaker 9: And you know, there really isn't any obvious spending to
Speaker 9: commensurate with that level of tax cuts. So otherwise, put,
Speaker 9: I think we are going to see an expansion of
Speaker 9: the deficit almost necessarily.
Speaker 2: So work through the kind of policies that run the
Speaker 2: campaign that you think could get done.
Speaker 6: No tanks, he's on tips that happens. Probably not. You
Speaker 6: don't think that happens.
Speaker 3: Well.
Speaker 9: I think over the past six months, what we've seen
Speaker 9: is Donald Trump run frankly, a phenomenal campaign. Of course
Speaker 9: today we know it was a winning campaign. I think
Speaker 9: a lot of what he was discussing, does he want
Speaker 9: to get it done?
Speaker 6: Maybe?
Speaker 9: Are they priorities to get done in this first one
Speaker 9: hundred two hundred days where we'll see a bulk of
Speaker 9: the legislation get done.
Speaker 6: I think probably not.
Speaker 2: So that's one policy copor tank's write down to fifteen
Speaker 2: percent with conditions?
Speaker 6: What about that?
Speaker 3: Yeah?
Speaker 6: I think so.
Speaker 9: I mean again, the campaign talked about twenty percent, eighteen percent.
Speaker 9: I think those were campaign poys because frankly, a corporate
Speaker 9: rate cut doesn't play very well among working the working class.
Speaker 9: I think Republicans are going to do all that they
Speaker 9: can to get it down to fifteen percent.
Speaker 7: Let's talk about inside the White House. Josey Wiles was
Speaker 7: announced last night, Trump calls her his ice baby. Who
Speaker 7: else do you expect to join the cabinet?
Speaker 6: We see Rick Cornell at State.
Speaker 9: If it's not Rick Cornell, it'll probably be from the Senate,
Speaker 9: maybe Rubio. It could also be Bob O Brian. But but
Speaker 9: I would I would tap at Grenell at this point.
Speaker 9: You know, we're all asking ourselves who Treasury is going
Speaker 9: to be. It's Scott Best and I think is at
Speaker 9: the top of the list. But Howard Lutnek has I
Speaker 9: think become more popular in the campaign and transition teams
Speaker 9: over the course of the past week or month. So
Speaker 9: I would look at Howard Levenink as well.
Speaker 7: What do these names swirling around the potential cabinet picks
Speaker 7: for President Trump tell you about where his mind is
Speaker 7: and how maybe the next four years will play out.
Speaker 9: Well, I think that the Trump two point oh team
Speaker 9: will be more ready to govern than the Trump one
Speaker 9: point oh team was. I mean, we have to remember
Speaker 9: that in Trump one point zero we also had a
Speaker 9: Republican trifecta. There was not a lot of major legislation
Speaker 9: that got done in that period before the midterms. I
Speaker 9: think we will see a different Trump administration with a
Speaker 9: lot more momentum, a lot more efficient whether without Elon Musk,
Speaker 9: you know, really running the efficiency efficiency show. So what
Speaker 9: I think we're going to see is it's a technocratic cabinet,
Speaker 9: but it's also a cabinet very very willing to implement
Speaker 9: Trump's policies.
Speaker 5: You say technocratic cabinet. Yesterday Donald Trump came out with
Speaker 5: the plan to eradicate deep state.
Speaker 6: It started talking.
Speaker 5: About a series of measures to give him the ability
Speaker 5: to remove certain people, certain bureaucrass as he calls them,
Speaker 5: different members of the government. How much are those some
Speaker 5: of the things that we can expect to hear versus
Speaker 5: the technocratic aspects that you're talking about.
Speaker 9: Well, I think at a very high level, top level
Speaker 9: cabinet positions, these people are really smart. These people have
Speaker 9: their hands in policy, and they're going to be ready
Speaker 9: to go underneath that. So some of the more professional
Speaker 9: but still policy related jobs, Trump wants to ensure that
Speaker 9: those people are pursuing his agenda and not their own.
Speaker 9: The easiest way for him to do that is to
Speaker 9: enact something called Section FI, which could allow for him
Speaker 9: to fire up to fifty thousand policy level positions subcabinet
Speaker 9: do we think he's going to fire fifty thousand people,
Speaker 9: you know, on January twentieth, twenty. First, no, do I
Speaker 9: think that that's a helpful threat for Trump to ensure
Speaker 9: that the people working under him and under his cabinet
Speaker 9: are pushing the ball forward.
Speaker 6: I think it is helpful. So I think we hear
Speaker 6: a lot more.
Speaker 5: About Session f The reason why I ask this is
Speaker 5: because when you say ready to govern, that could mean
Speaker 5: a lot of different things. Is it pushing through legislation,
Speaker 5: is it looking for the types of provisions that could
Speaker 5: allow some of these more dramatic provisions to go into effect.
Speaker 6: Which is it?
Speaker 9: Well, I think first it's it will be done by
Speaker 9: executive action. And again I think that the two opportunities
Speaker 9: for him to do that on the border, not so
Speaker 9: much major immigration reform, but border enforcement in particular. And
Speaker 9: I do think very quickly we will see that. You know,
Speaker 9: Trump returned to the drill baby, drill talking points opening
Speaker 9: up federal land for more oil.
Speaker 6: And gas production.
Speaker 9: Whether or not we see them in the market in
Speaker 9: the short term, I'm skeptical, but it is what it is.
Speaker 9: The second, on the legislative front, I think it will
Speaker 9: be tax focused. I think everything else sort of in
Speaker 9: the first one hundred days probably falls to the wayside.
Speaker 2: Up it's going to see. As always said, thank you Rupkese.
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