Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us
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Speaker 2: Jack Fitzpatrick here from Bloomberg Government, sitting in for Joe
Speaker 2: Matthew will be back next week plenty to discuss, especially
Speaker 2: on the Middle East. I'm looking forward in a few
Speaker 2: minutes to speaking with Hagar Shamali, who led the efforts
Speaker 2: focused on Syria and Lebanon at the National Security Council
Speaker 2: back during the Obama administration. We'll get some big picture
Speaker 2: takeaways on that and some specific information from her. But
Speaker 2: let's bring in our panel of Bloomberg Politics contributors right now,
Speaker 2: Rick Davis and Jeanie she and Zano. I think I
Speaker 2: have one obvious question on the politics of everything that's
Speaker 2: happening in the Middle East, and they're basically three points
Speaker 2: to discuss here. One the explosions in Iran that the
Speaker 2: latest I've seen in our coverage on the Bloomberg terminal
Speaker 2: is that at least one hundred and three people in
Speaker 2: Iran killed. Also, separately from that, the death of the
Speaker 2: deputy Pullit Bureau leader of Hamas sala al Aaruri in
Speaker 2: an explosion in Lebanon, and also the rising tensions in
Speaker 2: the Red Sea, especially following a report from the Houthi
Speaker 2: rebels in Yemen saying that they had gone after another
Speaker 2: ship of French origin. Part of their broad discussions brought
Speaker 2: broad focus on going after ships that they say have
Speaker 2: any connection to Israel. And let's go right now to
Speaker 2: Hagar Shamali again with experience of the National Security Council
Speaker 2: and founder of Greenwich Media Strategies. Hagar, really happy to
Speaker 2: have someone with your breadth of knowledge here. And as
Speaker 2: I go through a sort of triumvirate of issues to
Speaker 2: focus on in the Middle East, my big picture question
Speaker 2: for you is, to what extent do we look at
Speaker 2: this as a string of individual incidents or to what
Speaker 2: extent do we see this as a collective rising of
Speaker 2: tensions that can itself further tensions further violence in the
Speaker 2: Middle East. Do you see these as in any way
Speaker 2: collectively rising tension in the region.
Speaker 3: Sure well. So.
Speaker 4: One of the things that I always say is that
Speaker 4: when the storms gather in the Middle East, it rains everywhere.
Speaker 4: And what I mean by that is that you have
Speaker 4: numerous terrorist groups. You have a run backed terrorist groups
Speaker 4: and militants and militias. You also have sunny terrorist groups,
Speaker 4: and they take advantage of that instability. Whenever they see
Speaker 4: that maybe governments are pouring their resources somewhere, that they
Speaker 4: might be distracted by something or focused on a certain
Speaker 4: event or source of instability, they take advantage of that
Speaker 4: and pursue their own efforts to further that instability. And
Speaker 4: that doesn't mean that it evolves into a larger scale
Speaker 4: war or that it devolves things into chaos, but that
Speaker 4: is their goal.
Speaker 3: Their goal is to.
Speaker 4: Take advantage of that and say, hey, because you've got
Speaker 4: people not paying attention perhaps or or you know, it
Speaker 4: almost feels like a free for all. And so then
Speaker 4: they pursue attacks of this kind. And so when I
Speaker 4: saw what happened in Iran, right away, it had the
Speaker 4: markings of a terrorist an attack made by a terrorist group.
Speaker 4: It has nothing to do with the relationship right now
Speaker 4: or the state of affairs between Iran and Israel or
Speaker 4: Iran in the United States. This is purely a terrorist attack,
Speaker 4: a terrorist group that took advantage of the situation.
Speaker 5: And I want to be clear on that.
Speaker 2: The latest reporting we have has not even really vague
Speaker 2: insinuations yet at this point of who is expected to
Speaker 2: or suspected to be responsible. Have we gotten any updates?
Speaker 2: Is there any intelligence on who Iran would suspec at
Speaker 2: this point? Is it an absolute mystery and pointing fingers
Speaker 2: is not useful on that front?
Speaker 3: Well, no, pointing fingers is certainly not useful.
Speaker 4: And it is interesting that Iran has not said anything
Speaker 4: yet as to what group or who might be behind this.
Speaker 4: What we have seen in the past is that ISIS
Speaker 4: has pursued a number of attacks inside Iran. For example,
Speaker 4: in twenty twenty two they attacked a schiite shrine where
Speaker 4: fifteen people were killed. And that's in addition to other
Speaker 4: attacks and so and al Qaida, by the way, still
Speaker 4: operates in Iran. And the attack that I saw today
Speaker 4: it bears a lot of the markings of attacks pursued
Speaker 4: by ISIS. You've seen them do the same thing in
Speaker 4: Afghanistan when they've seen groups of people civilians gather for
Speaker 4: a certain event. Maybe it's a wedding, maybe it's some
Speaker 4: kind of mourning or procession for a funeral or whatever
Speaker 4: it might be. They take advantage of that because they
Speaker 4: see that it's a group of people and they want
Speaker 4: to maximize the casualties and death that they that they seek.
Speaker 4: And so I can't put the finger at Isis, obviously,
Speaker 4: but I can highlight that this is not new to Iran,
Speaker 4: that we've seen it before with Isis in particular.
Speaker 2: Well, one other point of confusion that I think is
Speaker 2: an important one as we track broadly everything going on
Speaker 2: in the Middle East, when we look toward the Red Sea.
Speaker 2: The news recently from the Houthis Armed Forces spokesman saying
Speaker 2: that they targeted the CMA CGM tage and the French
Speaker 2: container shipping company responsible for that saying that vessel did
Speaker 2: not suffer any incident. The Houthis had said previously they
Speaker 2: would focus on ships going through there, either to Israel
Speaker 2: or with connections to Israel, but there seems to be
Speaker 2: some vagueness around who exactly that applies to. I'm thinking,
Speaker 2: from the perspective of companies with ships going through the
Speaker 2: Red Sea, what is the breadth of who should be
Speaker 2: concerned they have the Houthis succeeded in any way targeting
Speaker 2: ships with connections to Israel, or how widespread are the
Speaker 2: issues there.
Speaker 4: So this is this the situation of the Red Sea
Speaker 4: is very volatile and is and it could it could
Speaker 4: get worse if the naval coalition that's there now that's
Speaker 4: led by the United States, the US group together an
Speaker 4: international navy coalition to combat the threats that are being
Speaker 4: posed by the Houthis and those aggressive attacks that the
Speaker 4: Houthis are pursuing against these vessels. Already, you have seen
Speaker 4: a few weeks ago you saw the Houthy militants succeed
Speaker 4: in attacking certain vessels. Now, the US has been very
Speaker 4: successful at intersecting missiles. Now you've seen this week, for example,
Speaker 4: Houthi's approached a vessel and then they made an emergency
Speaker 4: call signal to the United States. The US came with
Speaker 4: helicopters and sank the three Houthy militant boats. And so
Speaker 4: what you see is this kind of constant whack.
Speaker 3: A mole effort.
Speaker 4: And what the Houthis are portrayed are saying here is
Speaker 4: that while the US here is at the US and
Speaker 4: the international Navy coalition is succeeding at mitigating this threat
Speaker 4: and addressing those threats when they arise, meaning when you've
Speaker 4: got those houthy militant boats approaching vessels or when they
Speaker 4: lobb rockets or drones or long range cruise missiles wherever
Speaker 4: they are lobbing them, including at Israel, they've been able
Speaker 4: to intercept those. At the same time, you see that
Speaker 4: the Huthis are not being deterred from pursuing this type
Speaker 4: of aggression in the Red Sea, which has, as you've noted,
Speaker 4: real real implications for shipping and for by the way,
Speaker 4: for global inflation.
Speaker 3: Obviously already, just in one.
Speaker 4: Week freight rates have increased two point five to four
Speaker 4: times fold for what is normal quote unquote normal for
Speaker 4: this time of year. And so this situation is volatile.
Speaker 4: When that in the International Navy Coalition was created, Marisk
Speaker 4: had resumed shipping in that area along with other shipping companies,
Speaker 4: for example, and then this week, because the attacks had continued,
Speaker 4: they halted they and other shipping companies have halted that shipment,
Speaker 4: those shipments through the Red Sea and the Swiss Canal
Speaker 4: once again. So this is going to remain very volatile
Speaker 4: unless the US and other partners take a more offensive
Speaker 4: approach against Uthi militants and remind them that that freedom
Speaker 4: of navigation is a national security priority.
Speaker 2: And can you spell that out a little more, a
Speaker 2: little more for me, Shamalley, when you say a more
Speaker 2: offensive approach or exactly what should or would you expect
Speaker 2: to change in the US military's role in the Red Sea.
Speaker 4: That's a great question. So what you're seeing now are
Speaker 4: kind of tick for tack attacks. You've got the Houthy
Speaker 4: militants either approaching a vessel with a boat or labbying
Speaker 4: some kind of rocket, and in those instances, the US
Speaker 4: and the International Navy coalition they respond to it. So
Speaker 4: that coalition is not proactively pursuing any kind of offensive
Speaker 4: air sprichs or other military engagement against the Houthi militants
Speaker 4: who are based in Yemen and who are funded and
Speaker 4: armed by Iran.
Speaker 3: So it's very much a position.
Speaker 4: That's meant to be defensive in nature and to also
Speaker 4: just not spark something bigger, and that is a risk,
Speaker 4: and that is something the bidenministration has made very clear.
Speaker 4: They do not want to spark a regional wide war.
Speaker 4: They don't want to escalate things further, and so that's
Speaker 4: why you see when these militant groups, and it's not
Speaker 4: just in the Red Sea. When you have militant Iran
Speaker 4: backed militias and terrorist groups in Iraq and Syria pursuing
Speaker 4: attacks against US bases there, you're also seeing the same
Speaker 4: type of response. It's very tit for tat the US
Speaker 4: is making it clear we're not pursuing aggression, you are,
Speaker 4: and if you do, we will respond in kind.
Speaker 3: So the responses are very proportionate.
Speaker 4: But the Huthis are not as armed certainly as the
Speaker 4: United States. They are nowhere near as strong as all
Speaker 4: of those countries that make up the Navy Coalition, and
Speaker 4: so if they wanted to pursue a more offensive position,
Speaker 4: they could prohable actively go and pursue air strikes against
Speaker 4: where they see major weapons depots or command centers of
Speaker 4: the Houthis in Yemen.
Speaker 5: And Hagar.
Speaker 2: Bigger picture question for you for the Biden administration, which
Speaker 2: broadly had looked to pivot to Asia, just looking at
Speaker 2: everything that's been in the news for not only this week,
Speaker 2: but big picture, it seems very difficult for the Biden
Speaker 2: administration to really extricate itself from the degree of focus
Speaker 2: on the Middle East to the extent that they wanted
Speaker 2: to what position does all of this put the Biden
Speaker 2: administration in regarding the big picture goals that they have
Speaker 2: for President Biden's term.
Speaker 3: Sure, well, you know, it's funny.
Speaker 4: I feel like this is just the story of every
Speaker 4: administration for the past, for the past and ten to
Speaker 4: fifteen to twenty years when I was at the National
Speaker 4: Security Council, I was director for Sarria and Lebanon at
Speaker 4: the White House under President Obama, and that is and
Speaker 4: then the whole theme of the pivot to Asia started.
Speaker 4: It was this sentiment the Arab Spring was raging, we
Speaker 4: were unable to affect real change, and it was a
Speaker 4: sentiment that you know, the Middle East was really nothing
Speaker 4: but problems between Iraq and the Arab Spring. It was
Speaker 4: a drain on our resources. We weren't getting anywhere, We
Speaker 4: had very few partners to work with, and on top
Speaker 4: of it, we were losing troops. And so it kind
Speaker 4: of felt like this massive strain and liability for the
Speaker 4: United States and where our national security interests were waning.
Speaker 4: And so there was this pivot, the idea of a
Speaker 4: pivot to Asia. And every time there was this effort
Speaker 4: to focus more heavily on Asia, something would rope the
Speaker 4: United States back into the Middle East, whether it was
Speaker 4: Iran or whether it was something to do with Israel
Speaker 4: or Syria for example, isis I mean, all of these
Speaker 4: major milestones would rope the United States back into the
Speaker 4: Middle East, and this is a bit of an example
Speaker 4: of that. However, I will say that while I understand
Speaker 4: the the lack of prioritization on the Israeli Palestinian conflict,
Speaker 4: the fact is that you know when you have something
Speaker 4: like this happened when you had October seven, happened and happened,
Speaker 4: and what happened afterward that was because not only did
Speaker 4: Israel take the eye off the ball of the threat
Speaker 4: that Hamas posed, but so did the United States. And
Speaker 4: the US also downgraded pursuing a two state solution because
Speaker 4: it had seemed it was so difficult and practically impossible
Speaker 4: to achieve in the two decades prior to that. And
Speaker 4: so that's when you have things that bubble up and
Speaker 4: then rope the United States back. But that where I
Speaker 4: see this becoming an issue for Asia is that if
Speaker 4: I were president, she and I were watching the United
Speaker 4: States send its resources to Ukraine and Israel, and to
Speaker 4: be very focused on Ukraine and Israel. It doesn't mean
Speaker 4: that the US is unable to focus on China or
Speaker 4: other threats in that region. They're not going to take
Speaker 4: their eye off that ball. They have a huge teams
Speaker 4: and that is a very marked threat that they know about.
Speaker 4: But at the same time, if I were president, she
Speaker 4: and I will watching the negotiations on Capitol Hill and
Speaker 4: how difficult it is to pass aid packages now for
Speaker 4: Ukraine and Israel. Then if I were present, I would think, well,
Speaker 4: now it might not be such a bad time to
Speaker 4: pursue some kind of action or maneuver visa the Taiwan,
Speaker 4: because the US is taken with these other issues. It's
Speaker 4: an election year and the public is not very supportive
Speaker 4: of sending these massive aid packages. So that's where I
Speaker 4: could see things prey this year.
Speaker 2: That's an important point and I should sneak in one
Speaker 2: more quick one with you, Hagar, since we've been leaning
Speaker 2: on your analysis on Middle Eastern issues. On Iran, you
Speaker 2: were on balance of power yesterday and made the point
Speaker 2: that if Iran was going to do something with more force,
Speaker 2: that might have already happened by then. But of course,
Speaker 2: big news this morning with the explosion, Does that change
Speaker 2: your mind? Does that change your thinking about a response
Speaker 2: from Iran and the forcefulness of any actions. If you
Speaker 2: can give me the thirty second version of that one.
Speaker 4: No, I still see when I saw today's action. To me,
Speaker 4: it was just yet another effort on the part of
Speaker 4: a terrorist group to take advantage of this instability. And
Speaker 4: you're gonna see the instability grow. I don't mean to
Speaker 4: diminish it or to diminish the threats that come from
Speaker 4: the region. It is going to grow further until things
Speaker 4: in Gaza calm down, and they're not going to calm
Speaker 4: down until probably February or March. Now that's short in
Speaker 4: the grand scheme of things, But I still don't see
Speaker 4: a major.
Speaker 5: War, right.
Speaker 2: Hagar Shamali, former director for Syria and Lebanon at the
Speaker 2: National Security Council, now the founder of Greenwich Media Strategies
Speaker 2: Great Insights. Coming up, we're going to talk about the
Speaker 2: US Mexico border, a key point of negotiation in Congress
Speaker 2: with the panel. I'm Jack Fitzpatrick. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the
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Speaker 2: The new Speaker, Mike Johnson, Speaker of the House for
Speaker 2: a couple months now, is heading down to the US
Speaker 2: Mexico border, not only making the point that the President
Speaker 2: will have to negotiate with Republicans on border security measures
Speaker 2: and asylum issues, but seemingly staking out a hard position
Speaker 2: going into an election year. It seems that we will
Speaker 2: hear a lot about the border in twenty twenty four,
Speaker 2: about three point thirty, Speaker Mike Johnson will do a
Speaker 2: press conference, but we already know that about sixty House
Speaker 2: Republicans are down in South Texas by the border, drawing
Speaker 2: attention to that as ahead of them coming back to
Speaker 2: Washington next week in the House of Representatives. I'm Jack
Speaker 2: Fitzpatrick from Bloomberg Government, sitting in for Joe Matthew today,
Speaker 2: and I'm here with our Bloomberg Politics contributors Jeanie she
Speaker 2: and Zano and Rick Davis. Really looking forward to getting
Speaker 2: your insights on the politics at play, the policies that
Speaker 2: could come about because this is not just politics. This
Speaker 2: is an active legislative negotiation as Congress negotiates what they
Speaker 2: have said would be a combined border security.
Speaker 5: And Ukraine aid measure.
Speaker 2: Rick, it does not seem that Republicans are changing their position,
Speaker 2: moderating their position at all. What should we take away
Speaker 2: from the fact that, well into these negotiations on border issues,
Speaker 2: you have a large group of House Republicans going down
Speaker 2: to the border putting a spotlight on the issue. To me,
Speaker 2: it seems that a sign that is a sign that
Speaker 2: they are not moderating. But what do you take away
Speaker 2: from this point of emphasis from the new speaker here?
Speaker 6: Yeah, I think the point you make about them not moderating,
Speaker 6: I think they are kind of the tip of the
Speaker 6: spear with Republican strategy right now, you know, and taking
Speaker 6: sixty members, as you mentioned, down to Eagle Pass in
Speaker 6: the Texas border, one of the most active border crossings
Speaker 6: in the entire country, is meant to kind of shock
Speaker 6: the same right here. We've got all these legislative agenda
Speaker 6: items do here in Washington, and you know, here we
Speaker 6: got a third of the Republican caucus down on the border.
Speaker 6: That gives great high cover to Jim Langford's Republican senator
Speaker 6: in the set, you know who has been spearheading the
Speaker 6: talks with Chris Murphy Democrat and Christian Cinema Independent on
Speaker 6: trying to get a package deal where border security is
Speaker 6: added to the Ukraine and Israel funding. So those two
Speaker 6: are working quite in tandem, and I think the more
Speaker 6: pressure on the administration to come to the table in
Speaker 6: a compromise position, the better off you are. So the
Speaker 6: House is trying to push the outside envelope on policy
Speaker 6: while it gives some room in the Senate for them
Speaker 6: to negotiate.
Speaker 2: Genie, there's the policy side, the legislative negotiations happening in Congress.
Speaker 2: Even as they're out there are still a few senators
Speaker 2: in Washington discussing this. And then there's the politics side.
Speaker 2: It's twenty twenty four, or it is election year, an
Speaker 2: election year not only for these House members but for
Speaker 2: the president. To what degree do you see the hard
Speaker 2: line Republican stance demanding something on the border as genuinely
Speaker 2: simply a negotiation on a bill versus Is this about
Speaker 2: twenty twenty four? Is this about election day? How do
Speaker 2: you separate, if at all, the policy and the politics
Speaker 2: at play here.
Speaker 7: Yeah, it is so hard to do. I mean, we
Speaker 7: do see a real effort on the part as Rick
Speaker 7: mentioned of Langford of the Democrats and the Independent Christian
Speaker 7: Cinema Chris Murphy trying to negotiate. But the reality is,
Speaker 7: if there is a deal to be had, it is
Speaker 7: simply not enough to get something out of the Senate.
Speaker 7: Even if they can get sixty senators, You've got to
Speaker 7: get it through the House. So what I really really
Speaker 7: wish the President would do is he would call the
Speaker 7: House Republicans bluff. He would say, absolutely, let's deal, give
Speaker 7: them what they want. Can you imagine if he said,
Speaker 7: we'll give it all to you, we will pass comprehensive
Speaker 7: immigration reform. They will not buy it because their focus
Speaker 7: is on using this for political reasons. And of course,
Speaker 7: as we've been hearing in the last twenty four hours
Speaker 7: of impeaching Mayorcis the head of Homeland Security, the first
Speaker 7: time they're going to impeach a cabinet level official since
Speaker 7: the late Civil War period. That's their focus. Marjorie Taylor
Speaker 7: Green said she was promised, and we hear January tenth,
Speaker 7: they hold their first hearing on that. But I do
Speaker 7: wish the President would call their bluff and say we
Speaker 7: should act, give them what they want and see if
Speaker 7: they bite. I guarantee they won't, and nor will Donald
Speaker 7: Trump let them.
Speaker 2: A gutsy recommendation from Genie. I see the logic there, Rick,
Speaker 2: I think this all begs the question who is actually
Speaker 2: in charge? You mentioned James Langford taking the lead on
Speaker 2: the Republican side in the legislative negotiations. But when it
Speaker 2: comes to the question of if there is a realistic
Speaker 2: chance that they can pass something in the House and Senate,
Speaker 2: is it James Langford we should be looking to, Is
Speaker 2: it Mike Johnson? We should be looking to who is
Speaker 2: the key person who's the most important X factor among
Speaker 2: Republicans in terms of if something can be enacted?
Speaker 6: You know, look, I mean we look at this as
Speaker 6: a legislative debate right now in Washington. But I would just,
Speaker 6: you know, as a parenthetical, point out that somebody else
Speaker 6: who's playing a game on this, and it's an important
Speaker 6: game and a high risk is Governor Abbott in Texas.
Speaker 6: He is launched, excuse me, what he calls the Operation
Speaker 6: Loan Star, and he's putting ten billion dollars to work
Speaker 6: on the border, basically usurping federal authority. The federal government
Speaker 6: is responsible for immigration, and basically what Governor Abbott has
Speaker 6: said is they've failed in their duty and I'm taking
Speaker 6: action as a governor. This puts even more heat on
Speaker 6: Republicans to act in the Senate because the last thing
Speaker 6: they want is all these governors having you know, a
Speaker 6: hodgepodge of policies on the border. They want the federal
Speaker 6: government to act. And even Democrats are looking at this saying,
Speaker 6: oh my god, we cannot let this issue slip. As
Speaker 6: you pointed out early in the segment, Jack, this has
Speaker 6: become a hot button political issue. It's always been important
Speaker 6: to border states like Arizona and Georgia, you know, where
Speaker 6: targeted presidential states. But the reality is more and more
Speaker 6: Americans are saying that immigration issues are you know, they're
Speaker 6: number two, right behind the economy, and so everybody's got
Speaker 6: something at stake here. I would say, like what Genie suggested,
Speaker 6: I think Biden's going to have to articulate what deal
Speaker 6: he's willing to have Democrats accept, because otherwise, if left
Speaker 6: just to Chris Murphy to cut a deal, he may
Speaker 6: not get a deal. And the only thing that's bad
Speaker 6: for Biden is if no deal gets done and then
Speaker 6: no funding or the border, no funding for Ukraine, no
Speaker 6: funding for Israel. That would be seen as his greatest
Speaker 6: legislative failure since his term began.
Speaker 2: And Rick, go a little deeper for me on the
Speaker 2: role of Governor Abbot And can you spell out the
Speaker 2: motivation there? Is he pushing this so much out of
Speaker 2: a motivation to put a major national spotlight on the
Speaker 2: issue of immigration. Is it a particular deal that he
Speaker 2: wants to see Congress strike? Is it a political spotlight
Speaker 2: on himself? Explain that power of Governor Abbot for me
Speaker 2: a little bit more.
Speaker 6: Yeah, Jack, all of the above right hit the nail
Speaker 6: right on the head. I mean, this guy is shipping
Speaker 6: immigrants all over the country via buses and planes. I
Speaker 6: don't think there's a single market that hasn't been affected
Speaker 6: by this, in Democrat run cities all across the country.
Speaker 6: He has gotten the spotlight on the state of Texas
Speaker 6: by putting barriers in the Rio grand. I mean like
Speaker 6: he has done more to bring to attention the trials
Speaker 6: and tribulations of this border problem than anybody else, A
Speaker 6: border problem that at best of the Biden administration is
Speaker 6: just hope would go away, and it has only gotten worse.
Speaker 6: So if there's a face behind broken immigration policy and
Speaker 6: the sort of political attack machine that Republicans have on this,
Speaker 6: it's Governor Abbott. And I think he's done a really
Speaker 6: amazing job of elevating this into the political debate.
Speaker 3: Now.
Speaker 2: I know it's a completely separate legislative topic or policy topic,
Speaker 2: but legislatively the border has been tied to the fate
Speaker 2: of Ukraine AID, so I think I'd be remiss not
Speaker 2: to ask about where things stand there, Genie. There seems
Speaker 2: to be an undercurrent of maybe the idea that a
Speaker 2: lot of Republicans would be perfectly fine seeing Ukraine AID fail,
Speaker 2: at least specifically the Biden request for Ukraine AID fail.
Speaker 2: How should Democrats approach this issue? Should they be looking
Speaker 2: for an alternate route to get rid of this tie
Speaker 2: between these two issues? What are the options on Ukraine
Speaker 2: for Democrats given the seemingly intractable nature of these border talks.
Speaker 7: Yeah, and you know, it was such a idea to
Speaker 7: bundle them together. Was so sort of experimental in that regard.
Speaker 7: And if none of this gets done, it's going to
Speaker 7: be seen obviously as a failure. You also have some
Speaker 7: Republicans like Mitch McConnell supporting Ukraine aid, and so I
Speaker 7: do think that they should handle these separately. At this point,
Speaker 7: we need to get aid to Ukraine, we need to
Speaker 7: get it to Israel, it needs to be for Taiwan.
Speaker 7: The border has been a vexing problem in this political year.
Speaker 7: It needs to be resolved. But I can't see getting
Speaker 7: major comprehensive reform legislation at this point, and so I
Speaker 7: do hope that they, you know, sort of disentangle those
Speaker 7: I don't even know if that's a word, jack, but
Speaker 7: get do those separately so they can get the aid
Speaker 7: they need to Ukraine and also free up the Biden
Speaker 7: administration so they don't have to end run around Congress
Speaker 7: to get aid to places like Israel and Ukraine that's
Speaker 7: desperately needed.
Speaker 2: I'm giving you a pass on disentanglement. Jeanie Sheen's Dana
Speaker 2: Rick Davis.
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us
Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the
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Speaker 2: Jack Fitzpatrick from Bloomberg Government hosting today in instead of
Speaker 2: Joe Matthew, and I'm here with Annawong, Bloomberg Economics Chief
Speaker 2: US economist, for the initial takeaways. First, high level, what's
Speaker 2: the biggest news from these minutes?
Speaker 5: In your view? What's the main takeaway from December?
Speaker 8: Several officials see rates stay at peak level for longer,
Speaker 8: and at first glance, it seems that the takeaway is
Speaker 8: that the minutes tone is more hawkish than how Jerome
Speaker 8: Pale sound like back in December.
Speaker 2: I see the headline cuts projections show cuts by.
Speaker 5: End of twenty twenty four.
Speaker 2: What is your view on the most likely route of
Speaker 2: when cuts occur? Are we talking late twenty twenty four?
Speaker 2: What have we learned about the timeline there?
Speaker 3: Right?
Speaker 8: You know, the FED has published in their dot plot
Speaker 8: back in December they expect seventy five basis points of
Speaker 8: great cuts and that could come in the second half
Speaker 8: of twenty twenty four. If I'm guessing that several of
Speaker 8: the officials think those seventy five basis point what happened
Speaker 8: towards the back end of twenty twenty four, and there's
Speaker 8: no reason why the minutes would differ from what the
Speaker 8: dot plot had indicated, right, But the question going into
Speaker 8: this always is should we believe in what the Fed
Speaker 8: officials are saying? And the bond market traders did not
Speaker 8: believe in these numbers. The botto markets believe that the
Speaker 8: first rate cut could come in March twenty twenty four.
Speaker 8: Right now, the probability of a rate cut in March
Speaker 8: twenty twenty four is about seventy to eighty percent.
Speaker 3: It used to be even.
Speaker 8: More priced in back in December. They were already paired
Speaker 8: back that bets already in the last couple of days.
Speaker 8: But I think the minutes did very little to I mean,
Speaker 8: the minute did.
Speaker 3: Very little to.
Speaker 8: Support what powells. That's because Powell was very dovish, right,
Speaker 8: and the minutes seems to be more of sticking to
Speaker 8: the dot plots numbers saying that, you know what, don't
Speaker 8: be too optimistic about rate cuts too soon.
Speaker 2: And a lot of this conversation is about the length
Speaker 2: of keeping them near their peak. But just for my understanding,
Speaker 2: what's the prevalence among voting members of any push or
Speaker 2: any openness to further increases?
Speaker 8: How signs definitely, I mean if you look at the
Speaker 8: dot plot, you could see that I think there was
Speaker 8: a sizeable group that sees seventy five basis point rate cuts,
Speaker 8: but there were I believe for at least four or
Speaker 8: some who seem more. In fact, there was one who
Speaker 8: actually see one hundred and fifty basis point of rate
Speaker 8: cuts in twenty twenty four. I think so. For my
Speaker 8: own takeaway, I think that the FOMC minute is actually
Speaker 8: communication tool that you can think of it as another
Speaker 8: speech by the VEED officials, another way that they could
Speaker 8: twist the message, but what they will actually do is
Speaker 8: not really dependent on what this minute will say. And
Speaker 8: in fact, New York Fed's own research shows that typically
Speaker 8: in easing cycles, the FED internal deliberateberiations much more dubvish
Speaker 8: than these public communications. So my view is that the
Speaker 8: FED is still likely to cut in March twenty twenty
Speaker 8: for the reason that the growth is faltering, and I
Speaker 8: think the data in the next three weeks would be
Speaker 8: quite critical, because, for example, this Friday with the jobs report,
Speaker 8: and we do see significant weakening, then I think the
Speaker 8: bond traders will be putting back on that trade of
Speaker 8: March rek that's even January.
Speaker 2: Anna Wong, thank you so much for great, very immediate
Speaker 2: insights on those FOMC minutes from December on some fairly
Speaker 2: hawkish language, but good insights on what to expect as
Speaker 2: early as March. From Anna Wong. Now, let's bring in
Speaker 2: Enrique moronas executive director from hente Unita of hente Unita,
Speaker 2: the Human Rights Border Coalition. We spoke in the last
Speaker 2: hour on the politics of some of these congressional negotiations
Speaker 2: on the border, but I want to cut through some
Speaker 2: of the political language as much as possible and learn
Speaker 2: a bit about what's happening on the border, what the
Speaker 2: causes are, what the policies at play are. Enrique, thank
Speaker 2: you so much for joining us, giving your long work
Speaker 2: on these issues and communicating with people who are seeking
Speaker 2: to come to this country. I'm curious what you make
Speaker 2: of what's in the news with regard to congressional negotiations.
Speaker 2: Have you heard of any policy changes, especially when Republicans
Speaker 2: push for third country keeping asylum seekers in third countries?
Speaker 2: Do you see any solutions being discussed in Congress or
Speaker 2: are they missing any of the root causes? What should
Speaker 2: we know in Washington about the root causes of people
Speaker 2: coming to the US seeking asylum in particular.
Speaker 9: Yes, glad to be with you. I have been on
Speaker 9: the border all my life, as you know, I have
Speaker 9: been working to help the situation along. And I don't
Speaker 9: think that the Republicans come into the border to speak
Speaker 9: to the border patrol is the answer. How come they
Speaker 9: never speak to the migrants themselves. They don't want to
Speaker 9: become citizens, they want to become residence. They're looking for
Speaker 9: a life, not necessarily a better life, but a life
Speaker 9: to escape the violence, the environmental situation, the politics, and
Speaker 9: much of that has to do with the United States.
Speaker 9: The United States has four and a half percent of
Speaker 9: the world's population, yet it consumes a third of the
Speaker 9: world's illegal drugs, It consumes a third of the natural resources.
Speaker 9: It provides weapons to these countries. That is not the solution.
Speaker 9: The solution is to work with these countries, come up
Speaker 9: with a plan that makes sense to both countries. Comprehensive
Speaker 9: immigration reform if something that a lot of people have
Speaker 9: battled for for a long long time, and we're not
Speaker 9: any closer today. I think both the Republicans the Democrats
Speaker 9: have done about bad job, and I believe that the
Speaker 9: solution will be coming in the next administration. Hopefully it
Speaker 9: will be Biden, but I don't think Biden or Trump
Speaker 9: will be the candidates. I think they're both not going
Speaker 9: to be there for twenty twenty four, Trump because of
Speaker 9: his legal problems in biting, because of his health. So
Speaker 9: I hope that we really do have humane immigration reform.
Speaker 9: I'm right here on the border and that one of
Speaker 9: those migrants has said I want to become a citizen.
Speaker 9: They just want to get their papers so they could
Speaker 9: come here and be saved. It's a worldwide situation. It's
Speaker 9: not just the US and Mexico, and here on this
Speaker 9: border US in Mexico. Never is there a bigger difference
Speaker 9: of the two countries, the United States being the most
Speaker 9: powerful country in the world and Mexico being a developing country.
Speaker 9: Neither country is bad. But let's have humane immigration reform,
Speaker 9: more asylum judges, more immigration attorneys. That is the real solution.
Speaker 2: Enrique, what do you make of, especially the push from
Speaker 2: Republicans for asylum seekers who have traveled through another country
Speaker 2: where they may be eligible for asylum. They want to
Speaker 2: stop people from coming to the US if they have
Speaker 2: traveled through another country where they could have sought asylum.
Speaker 2: This is I think maybe sort of tangential to the
Speaker 2: quote unquote remain in Mexico policy. Do you see that
Speaker 2: as effective? Is that something that you can easily apply
Speaker 2: to people who are seeking to come here. What's the
Speaker 2: actual effect and that is that feasible in your mind?
Speaker 9: Well, a lot of people are actually looking for asylum
Speaker 9: in Mexico, and Mexico has granted asylum. But I think
Speaker 9: that the United States should be more forgiving of these
Speaker 9: people and have let them have an asylum hearing. It's
Speaker 9: a terrible situation for them. Mexico has done a really
Speaker 9: bad job. I think Amlo the president is not doing
Speaker 9: a very effective job. I don't think majorcas is doing
Speaker 9: an effective job either. But we got to stay away
Speaker 9: from Trump. He was very dangerous, separating families, shooting people
Speaker 9: through the border wall and so forth. But let's think
Speaker 9: of twenty twenty four and beyond. I think that we
Speaker 9: should have a more humane immigration reform. This is a
Speaker 9: worldwide situation. It's not just here on the on the
Speaker 9: Western hemisphere. It's also happening in Europe and other parts
Speaker 9: of the world where there's more migration than ever, more
Speaker 9: migration than ever, because of the environment, the violence, the hunger,
Speaker 9: and so forth, Let's let's provide human immigration for these people.
Speaker 9: We have plenty of space. Yes, it's a challenge, but
Speaker 9: it's more. But we can't be using these political ploys
Speaker 9: like Abbott and the Scantis are with using the migrants
Speaker 9: as political ploys and busting them or flying them to
Speaker 9: other states. That is not the way to do it.
Speaker 9: We should have a solution. We have had many attempts
Speaker 9: at this for many decades, and I know that we
Speaker 9: can do it. It's it's a it's good. It's gonna
Speaker 9: be a my national situation that we have to uh,
Speaker 9: you know, work on, and I know the United States
Speaker 9: and the other countries can do it.
Speaker 2: Enrique, could you tell us a little more about, especially
Speaker 2: what has happened in the past few years, what are
Speaker 2: the underlying causes in South and Central America driving the
Speaker 2: recent border surge are what are those root causes?
Speaker 9: Well, those causes not only there but also in African Asia.
Speaker 9: Is the environment, the fact that there's environmental challenges. The
Speaker 9: United States is more responsible for for environmental damage than
Speaker 9: any other country in the world when you talk about
Speaker 9: it per capita. It's also the situation with lack of resources,
Speaker 9: lack of resources to provide jobs for them. It's also
Speaker 9: the situation of violence in their countries. These are all
Speaker 9: situations that are happening in all over the world, and
Speaker 9: the United States and the country where they're coming from
Speaker 9: have to do a better job, and they can do
Speaker 9: a better job. Remember years ago we had this issue
Speaker 9: with Columbia and Colombia was able to straighten it out.
Speaker 9: We also had the situation in other countries and we
Speaker 9: were able to straight straighten it out. We should not
Speaker 9: be pitying this. That also with giving aid to Ukraine
Speaker 9: or the Middle East, they should be separate issues. This
Speaker 9: should be separate issues. The United States is a much
Speaker 9: greater country than that. Most of the people in this
Speaker 9: country were once immigrants. Before we were us, we were them,
Speaker 9: and we were able to settle this issue. Now is
Speaker 9: no different, uh, And it's a situation in which the
Speaker 9: whole world seems to be closing in on them and
Speaker 9: nobody wants to help them. We believe that we should
Speaker 9: have human immigration reform. Love has no borders, and of
Speaker 9: course we want security, but most of the migrants are
Speaker 9: not a problem as far as security is concerned domestic
Speaker 9: terrorists are more of a problem, and we look at
Speaker 9: we need to look at the realities of this situation,
Speaker 9: not the myths.
Speaker 2: And given your first hand noledge of the situation, I
Speaker 2: know this is discussed a lot in a political lens,
Speaker 2: but in the reality of it, can you, Enrique, tell
Speaker 2: us a little bit more about this state of people
Speaker 2: who make it to the US when they seek asylum,
Speaker 2: when they either across the border or present themselves at
Speaker 2: a crossing point. In terms of their safety, they a
Speaker 2: lot of them have made it through a dangerous area
Speaker 2: or paying somebody to bring them here. Tell us a
Speaker 2: little bit about the state of safety and well being
Speaker 2: or sometimes lack thereof of people when they arrive finally
Speaker 2: at the US.
Speaker 9: Well, we have a situation right here in San Diego,
Speaker 9: only an hour from US is Hakkumba, and Hakkumba is
Speaker 9: where a lot of the migrants have crossed. That's in
Speaker 9: the US, and they cross over there and they're left
Speaker 9: out in the open. It's freezing at night, it gets
Speaker 9: very hot at in the day. We need to have
Speaker 9: a situation where the people can can have shelter. They
Speaker 9: should be treated in a humane manner. They don't know
Speaker 9: what's going on. They speak different languages Dyinese, Spanish, et cetera,
Speaker 9: and the culture is very different. For example, if the
Speaker 9: person is from southern Mexico, when the border patrol tells them,
Speaker 9: you know, look at me when I'm talking to you,
Speaker 9: that's a sign of disrespect in their culture. So there's
Speaker 9: always this game going on where people don't know how
Speaker 9: to how to respond. We need to be more sensitive
Speaker 9: to these people. The overwhelming majority of them are just
Speaker 9: looking for a life. I was at a synagogue recently
Speaker 9: and somebody said, I saw you on TV the other day.
Speaker 9: I don't know why these children are coming unaccompanied, And
Speaker 9: I said, you know the story of Moses better than
Speaker 9: I do. And when Moses' mom put him in the
Speaker 9: river to go to you know, to cross the river,
Speaker 9: she didn't know people he was going to live or die,
Speaker 9: but she knew that if her baby stayed in Egypt,
Speaker 9: he was going to die. It's the same situation. It's
Speaker 9: an act of love, so we should be responding in
Speaker 9: the same We're a we are a country that has
Speaker 9: had the history of welcoming migrants. Sometimes we haven't always
Speaker 9: welcomed them. Look at the Canadian border. There's no wall
Speaker 9: with Canada. It's twice as big as the length of
Speaker 9: the Mexican border. We know a lot of people have
Speaker 9: been going through there. This is really raised based. It's
Speaker 9: unfair and we all need to do a better job.
Speaker 2: Enrique moronas executive director of pente Anita, the Human Rights
Speaker 2: Support Coalition.
Speaker 5: Thanks so much for joining us.
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