1 00:00:02,520 --> 00:00:08,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. I'm Marie joined us 2 00:00:08,080 --> 00:00:10,800 Speaker 1: now in Washinton with a special guest. I am Marie. 3 00:00:12,000 --> 00:00:12,760 Speaker 1: Good morning John. 4 00:00:12,760 --> 00:00:14,520 Speaker 2: That's right, I'm joined with a friend of the show, 5 00:00:14,600 --> 00:00:15,480 Speaker 2: David Malpass. 6 00:00:15,520 --> 00:00:17,040 Speaker 1: He's the former head of a World Bank. 7 00:00:17,079 --> 00:00:19,280 Speaker 2: Of course, he was the head of the bank when 8 00:00:19,320 --> 00:00:21,520 Speaker 2: Trump was in office in twenty nineteen. 9 00:00:21,800 --> 00:00:23,400 Speaker 1: David, thank you so much for joining us. 10 00:00:23,440 --> 00:00:26,440 Speaker 2: So we were talking about all morning this trade anxiety 11 00:00:26,560 --> 00:00:29,560 Speaker 2: really going into the weekend because Trump yesterday said that 12 00:00:29,600 --> 00:00:31,720 Speaker 2: when it comes to the pause on Canada Mexico, the 13 00:00:31,800 --> 00:00:34,319 Speaker 2: twenty five percent those tariffs will go through, and then 14 00:00:34,320 --> 00:00:37,080 Speaker 2: he added an additional ten percent on China. 15 00:00:37,120 --> 00:00:38,479 Speaker 1: How should we be reading this? 16 00:00:39,560 --> 00:00:42,599 Speaker 3: A big change in the direction of trade, But then 17 00:00:42,680 --> 00:00:44,720 Speaker 3: the trading system wasn't working, and. 18 00:00:44,680 --> 00:00:46,840 Speaker 1: So you think those tariffs hold for true? 19 00:00:46,920 --> 00:00:51,239 Speaker 3: I think those this time the tariffs will hold. But 20 00:00:51,320 --> 00:00:54,960 Speaker 3: that also begins this process of trying to adjust the 21 00:00:55,000 --> 00:00:58,120 Speaker 3: whole global trading system into one that works better and 22 00:00:58,200 --> 00:01:01,720 Speaker 3: specifically better for the US. This is going to quickly, 23 00:01:01,760 --> 00:01:05,080 Speaker 3: I think, get into intellectual property rights and the other 24 00:01:05,200 --> 00:01:09,240 Speaker 3: trading practices that China has been involved in, also transhipment 25 00:01:09,319 --> 00:01:14,760 Speaker 3: and the issues of back doors into the United States 26 00:01:14,840 --> 00:01:18,360 Speaker 3: with trade. So I think those will go on for months. 27 00:01:18,520 --> 00:01:20,560 Speaker 2: We already know those conversations are happening in terms of 28 00:01:20,560 --> 00:01:23,120 Speaker 2: the back door between Mexico and China. 29 00:01:23,680 --> 00:01:24,679 Speaker 1: Almost sixty percent of. 30 00:01:24,720 --> 00:01:28,199 Speaker 2: US adults though Bloomberg did a survey with Harris Pohl, 31 00:01:28,920 --> 00:01:31,880 Speaker 2: almost sixty percent of US adults expect Trump's tariffs will 32 00:01:31,920 --> 00:01:36,000 Speaker 2: lead to higher prices. How concerned review about this stoking 33 00:01:36,080 --> 00:01:41,000 Speaker 2: inflation and potentially stagflationary fears creeping into this economy. 34 00:01:42,040 --> 00:01:44,360 Speaker 3: Products are going up and down all the time, so 35 00:01:44,440 --> 00:01:47,760 Speaker 3: some products will go up. But then the question is 36 00:01:47,840 --> 00:01:52,120 Speaker 3: what does the US economy, this amazing economy that we have, 37 00:01:52,480 --> 00:01:54,800 Speaker 3: what does it do to react? And I think there 38 00:01:54,840 --> 00:01:59,400 Speaker 3: will be a huge rush by US companies to make 39 00:01:59,440 --> 00:02:02,840 Speaker 3: things in the US and also to find other sources. 40 00:02:03,000 --> 00:02:06,280 Speaker 3: They're already doing that. Companies are preparing. They've known this 41 00:02:07,280 --> 00:02:10,680 Speaker 3: is coming. There's been some preparation time, and so they'll 42 00:02:10,720 --> 00:02:14,280 Speaker 3: make adjustments and that will create jobs in new areas, 43 00:02:14,320 --> 00:02:19,120 Speaker 3: which is the point on net. You get that. Plus 44 00:02:19,200 --> 00:02:23,640 Speaker 3: the bigger changes that President Trump is doing is on 45 00:02:23,680 --> 00:02:27,480 Speaker 3: the regulatory side, on the tax side, those are positive 46 00:02:27,560 --> 00:02:31,520 Speaker 3: for output in the US. One of the important spots 47 00:02:31,600 --> 00:02:33,760 Speaker 3: is energy, and I think there really will be a 48 00:02:33,760 --> 00:02:37,320 Speaker 3: lot more energy produced by the US, which also is 49 00:02:37,360 --> 00:02:38,720 Speaker 3: stimulative for growth. 50 00:02:38,800 --> 00:02:40,799 Speaker 2: So you see the economy right now in a good place. 51 00:02:41,080 --> 00:02:42,720 Speaker 2: So do you think the FED then should be on 52 00:02:42,800 --> 00:02:43,640 Speaker 2: hold for the rest. 53 00:02:43,480 --> 00:02:43,920 Speaker 1: Of the year. 54 00:02:45,520 --> 00:02:48,040 Speaker 3: I would like to see a lower yield curve across 55 00:02:48,080 --> 00:02:50,480 Speaker 3: the board, that's on the short end and the long end, 56 00:02:50,520 --> 00:02:52,920 Speaker 3: and I think to do that you have to exude 57 00:02:53,000 --> 00:02:57,200 Speaker 3: confidence in the US dollar and in your ability to 58 00:02:57,320 --> 00:03:01,720 Speaker 3: control your spending. That wasn't being done in the previous administration. 59 00:03:02,080 --> 00:03:05,799 Speaker 3: So there are opportunities now to get a lower yield 60 00:03:05,840 --> 00:03:09,880 Speaker 3: curve across the board. They're not embarked on that yet. 61 00:03:09,960 --> 00:03:11,519 Speaker 3: It's maybe a little early. 62 00:03:11,320 --> 00:03:13,160 Speaker 1: But we know what Treasury Secretary said. 63 00:03:13,160 --> 00:03:15,480 Speaker 2: He wants a lower ten yure yield, and that seems 64 00:03:15,520 --> 00:03:17,800 Speaker 2: to be a key point in the markets that this 65 00:03:17,840 --> 00:03:21,120 Speaker 2: administration is watching. What do you think they want to 66 00:03:21,120 --> 00:03:22,959 Speaker 2: see and how can they achieve it? 67 00:03:23,360 --> 00:03:26,760 Speaker 3: Stick with the eye on the prize that is abundance 68 00:03:27,280 --> 00:03:30,680 Speaker 3: and you want common sense. If you really apply those 69 00:03:30,720 --> 00:03:33,760 Speaker 3: two things, you will get a lower yield curve. That's 70 00:03:33,800 --> 00:03:36,840 Speaker 3: because the US economy is so strong. What we're talking 71 00:03:36,840 --> 00:03:40,520 Speaker 3: about with treasury rates both shortened and to an extent. 72 00:03:40,600 --> 00:03:45,120 Speaker 3: Long end is is that your your confidence in your 73 00:03:45,160 --> 00:03:50,040 Speaker 3: ability to pay and to pay on that and be consistent, 74 00:03:50,320 --> 00:03:52,480 Speaker 3: and the US can up that these are supposed to 75 00:03:52,560 --> 00:03:56,240 Speaker 3: be the riskless rates, so they can be lower if 76 00:03:56,360 --> 00:04:00,520 Speaker 3: you if you create confidence within the economy and within 77 00:04:00,600 --> 00:04:01,080 Speaker 3: the dollars. 78 00:04:01,160 --> 00:04:02,560 Speaker 2: Do you think the FED should be cutting into a 79 00:04:02,600 --> 00:04:03,280 Speaker 2: good economy. 80 00:04:04,320 --> 00:04:09,400 Speaker 3: We can hope that the deregulation is implemented, the energy 81 00:04:09,440 --> 00:04:12,960 Speaker 3: production is implemented, and the FED will have an opportunity 82 00:04:13,200 --> 00:04:17,839 Speaker 3: to be cutting into a deregulating, faster, growing, more efficient economy. 83 00:04:17,920 --> 00:04:20,160 Speaker 1: Yes, we have seen with the jojeffect. 84 00:04:20,279 --> 00:04:24,400 Speaker 2: President Slash take the US out of the who usaid commitments. 85 00:04:24,920 --> 00:04:26,360 Speaker 1: You used to run the World Bank. Do you think 86 00:04:26,360 --> 00:04:27,359 Speaker 1: the World Bank is next? 87 00:04:28,040 --> 00:04:29,880 Speaker 3: I think there'll be a look at all of the 88 00:04:29,920 --> 00:04:35,559 Speaker 3: international organizations. What is the US getting for them, what's 89 00:04:35,600 --> 00:04:38,960 Speaker 3: the governance structure of them? And are they doing work 90 00:04:38,960 --> 00:04:43,040 Speaker 3: that's actually necessary for governments to be doing. One challenge 91 00:04:43,080 --> 00:04:45,240 Speaker 3: for the IMF and the World Bank is they were 92 00:04:45,279 --> 00:04:48,720 Speaker 3: created in nineteen forty four, so you can imagine that 93 00:04:48,760 --> 00:04:54,200 Speaker 3: their mission has grown vague, that they're older. They served 94 00:04:54,240 --> 00:04:57,080 Speaker 3: the purpose that they were originally set up to. So 95 00:04:57,160 --> 00:05:00,160 Speaker 3: one of the challenges for all these organizations is to 96 00:05:00,200 --> 00:05:03,200 Speaker 3: stay small and stay on mission, and I think that 97 00:05:03,360 --> 00:05:04,200 Speaker 3: needs to be done. 98 00:05:04,360 --> 00:05:06,040 Speaker 1: David, thanks so much for your time this morning. 99 00:05:06,160 --> 00:05:08,440 Speaker 2: Jonathan, of course the former head of the World Bank 100 00:05:08,520 --> 00:05:11,080 Speaker 2: under Trump one point zero David Malpass ending there that 101 00:05:11,120 --> 00:05:14,720 Speaker 2: potentially imf World Bank maybe maybe next when it comes 102 00:05:14,760 --> 00:05:16,560 Speaker 2: to how much the US might support them. 103 00:05:16,760 --> 00:05:19,400 Speaker 1: Amory, I appreciate the update, Amrie that down in Washington, 104 00:05:19,480 --> 00:05:19,720 Speaker 1: d C.