1
00:00:00,080 --> 00:00:10,119
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

2
00:00:10,119 --> 00:00:13,880
Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

3
00:00:13,920 --> 00:00:17,119
Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android

4
00:00:17,160 --> 00:00:20,560
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

5
00:00:20,600 --> 00:00:23,760
Speaker 1: you get your podcasts, or watch us live on YouTube.

6
00:00:25,160 --> 00:00:27,960
Speaker 2: Heley lines alongside Joe Matthew here on Bloomberg TV and

7
00:00:28,080 --> 00:00:30,680
Speaker 2: Radio on this Friday, Jobs Friday at that and what

8
00:00:30,720 --> 00:00:34,440
Speaker 2: a coincidence that the Jobs Day actually coincides with pretty

9
00:00:34,520 --> 00:00:37,320
Speaker 2: lengthy remarks from the FED chair Jay Powell before the

10
00:00:37,360 --> 00:00:39,800
Speaker 2: FED enters its blackout period its March meeting. Of course,

11
00:00:39,800 --> 00:00:42,479
Speaker 2: week after next, the FED is not expected to do

12
00:00:42,560 --> 00:00:45,159
Speaker 2: anything at that meeting, and the Chairman basically confirmed it,

13
00:00:45,159 --> 00:00:48,360
Speaker 2: as he suggested once again, there's no hurry to make

14
00:00:48,400 --> 00:00:50,879
Speaker 2: further policy adjustments. And it was interesting to hear from

15
00:00:50,920 --> 00:00:54,120
Speaker 2: the Chairman Joe this notion that the path to returning

16
00:00:54,320 --> 00:00:57,800
Speaker 2: to their inflation target has been bumpy. He expects that

17
00:00:57,880 --> 00:01:02,800
Speaker 2: to continue and perhaps further bumpiness. Assessment is required when

18
00:01:02,800 --> 00:01:04,720
Speaker 2: you're considering whether or not there is going to be

19
00:01:04,840 --> 00:01:07,080
Speaker 2: tariffs that would have an inflationary impact. As we heard

20
00:01:07,080 --> 00:01:09,160
Speaker 2: President Trump in the Oval Office just in the last

21
00:01:09,160 --> 00:01:12,680
Speaker 2: hour after giving some reprieve to Canada just yesterday saying

22
00:01:12,680 --> 00:01:15,319
Speaker 2: reciprocal tariffs on Canadian lumber and darry could go into

23
00:01:15,360 --> 00:01:17,320
Speaker 2: effect as soon as today.

24
00:01:17,040 --> 00:01:20,319
Speaker 3: Today or not or not, which seems to be the problem.

25
00:01:20,560 --> 00:01:23,240
Speaker 3: Although watching the markets lift off their lows, I guess

26
00:01:23,880 --> 00:01:28,200
Speaker 3: was encouraging after the Nasdaq fell into correction territory earlier today.

27
00:01:28,560 --> 00:01:31,119
Speaker 3: Michael McKee is actually there. He was in the room

28
00:01:31,480 --> 00:01:34,080
Speaker 3: for j. Powell's remarks and joins us from the US

29
00:01:34,120 --> 00:01:37,440
Speaker 3: Monetary Policy Forum. This sponsored again by the University of

30
00:01:37,520 --> 00:01:40,640
Speaker 3: Chicago Booth School of Business. Michael, it's great to see you.

31
00:01:41,040 --> 00:01:43,319
Speaker 3: Thanks for coming on. As Kayleie mentioned that the big

32
00:01:43,319 --> 00:01:46,720
Speaker 3: takeaways here, the big headlines, the Fed doesn't need to hurry.

33
00:01:47,120 --> 00:01:50,160
Speaker 3: You could wait for greater clarity the path to two percent, Michael,

34
00:01:50,920 --> 00:01:53,640
Speaker 3: gonna be bumpy. So nothing's new, is it.

35
00:01:56,360 --> 00:01:58,440
Speaker 4: No, there's really not a whole lot new here. I

36
00:01:58,440 --> 00:02:02,280
Speaker 4: think maybe what fed the market reaction, the brief recovery

37
00:02:02,320 --> 00:02:04,600
Speaker 4: that you had in the markets, was just a sense

38
00:02:04,600 --> 00:02:08,520
Speaker 4: of calm that the chairman exhibited, the idea that the

39
00:02:08,520 --> 00:02:10,760
Speaker 4: FED doesn't have to do anything right away because the

40
00:02:10,760 --> 00:02:13,520
Speaker 4: economy's in good shape. He talked about how the labor

41
00:02:13,600 --> 00:02:17,120
Speaker 4: market was in good shape. Inflation is coming down, still

42
00:02:17,160 --> 00:02:19,520
Speaker 4: too high, as you mentioned, it could be bumpy, but

43
00:02:19,560 --> 00:02:22,480
Speaker 4: he wasn't giving a lot of warning signals that there

44
00:02:22,560 --> 00:02:25,080
Speaker 4: is something wrong at this point that the FED would

45
00:02:25,080 --> 00:02:29,040
Speaker 4: have to react to. Now, obviously he said tariffs could

46
00:02:29,040 --> 00:02:33,680
Speaker 4: be inflationary. They're anticipating that prices will go up. But

47
00:02:33,880 --> 00:02:36,800
Speaker 4: because we have no idea exactly what the President is

48
00:02:36,840 --> 00:02:39,160
Speaker 4: going to do, the FED at this moment has no

49
00:02:39,240 --> 00:02:41,680
Speaker 4: idea what it's going to do. And that's kind of

50
00:02:41,680 --> 00:02:43,919
Speaker 4: where everybody else on the FED is at the moment.

51
00:02:45,200 --> 00:02:48,239
Speaker 2: Well, and is it the Fed's biggest potential problem right now, Mike,

52
00:02:48,360 --> 00:02:50,680
Speaker 2: is that the consumer has no idea where things are

53
00:02:50,720 --> 00:02:54,200
Speaker 2: going either, and we're starting to see consumer inflation expectations

54
00:02:54,639 --> 00:02:56,720
Speaker 2: pick up. He did call that out today, although he

55
00:02:56,800 --> 00:03:01,480
Speaker 2: noted it's not necessarily in longer term expect to expectations

56
00:03:01,480 --> 00:03:03,640
Speaker 2: and that's really what they care most about.

57
00:03:05,600 --> 00:03:07,839
Speaker 4: Well, we did see the University of Michigan's five year

58
00:03:08,080 --> 00:03:11,519
Speaker 4: inflation expectations move up in the last month. We'll get

59
00:03:11,560 --> 00:03:14,760
Speaker 4: another report from Michigan next week and we'll see where

60
00:03:14,760 --> 00:03:17,119
Speaker 4: they are also the New York Fed does its own

61
00:03:17,160 --> 00:03:20,120
Speaker 4: survey of expectations comes out next week, so we'll have

62
00:03:20,160 --> 00:03:22,600
Speaker 4: a better idea. Of course, the FED won't be talking

63
00:03:22,919 --> 00:03:25,799
Speaker 4: at that point, but they are worried that if we

64
00:03:25,840 --> 00:03:29,640
Speaker 4: see a continual series of tariffs, as the President sort

65
00:03:29,639 --> 00:03:34,440
Speaker 4: of continues to threaten, that that might drive consumer expectations higher.

66
00:03:34,680 --> 00:03:38,520
Speaker 4: And we did see expectations rise both on the short

67
00:03:38,600 --> 00:03:41,840
Speaker 4: end significantly and the longer end a little bit, just

68
00:03:41,960 --> 00:03:44,520
Speaker 4: on the headlines that you were getting from the President

69
00:03:44,600 --> 00:03:48,080
Speaker 4: on tariffs after he came into office. So people are

70
00:03:48,200 --> 00:03:51,200
Speaker 4: very sensitive to that. And JPOB made the point that

71
00:03:51,480 --> 00:03:54,400
Speaker 4: this is not the pre COVID era. People are used

72
00:03:54,400 --> 00:03:57,440
Speaker 4: to inflation now, and so they're perhaps more sensitive to

73
00:03:57,480 --> 00:03:59,320
Speaker 4: the fact that it could jump up again.

74
00:04:00,760 --> 00:04:04,200
Speaker 3: And by considering the Fed's dual mandate, some of the

75
00:04:04,280 --> 00:04:07,520
Speaker 3: concerns surrounding the job market not in this report so

76
00:04:07,640 --> 00:04:12,240
Speaker 3: much today, but concerns that thousands of fired federal workers

77
00:04:12,720 --> 00:04:17,480
Speaker 3: could really change the trajectory of growth in the labor market.

78
00:04:17,800 --> 00:04:20,560
Speaker 3: How would that change the Fed's view when it comes

79
00:04:20,600 --> 00:04:24,440
Speaker 3: to interest rates, Well.

80
00:04:24,320 --> 00:04:26,800
Speaker 4: It would be an interesting question because it would depend

81
00:04:26,839 --> 00:04:30,800
Speaker 4: on how serious it is Federal workers all of them,

82
00:04:31,320 --> 00:04:33,359
Speaker 4: about two million of them make up about one and

83
00:04:33,360 --> 00:04:36,080
Speaker 4: a half percent of the total labor force. So if

84
00:04:36,240 --> 00:04:38,800
Speaker 4: several hundred thousand lose their job, it isn't going to

85
00:04:38,839 --> 00:04:43,000
Speaker 4: make a big difference. It could bleed over into other

86
00:04:43,160 --> 00:04:47,239
Speaker 4: sectors though, as whose jobs are built around these federal

87
00:04:47,320 --> 00:04:51,640
Speaker 4: government workers, restaurants or stores or things like that. If

88
00:04:51,640 --> 00:04:54,320
Speaker 4: people lose their jobs, we could see an expansion. And

89
00:04:54,360 --> 00:04:58,680
Speaker 4: obviously the contractors, the civilian contractors who do work for

90
00:04:58,760 --> 00:05:01,920
Speaker 4: the federal government lose their jobs. Now, if that starts

91
00:05:01,960 --> 00:05:05,640
Speaker 4: to spread, then you get perhaps a psychological effect on

92
00:05:05,680 --> 00:05:08,279
Speaker 4: the rest of consumers who start to worry about their

93
00:05:08,360 --> 00:05:11,040
Speaker 4: jobs and then they pull back on spending, and that's

94
00:05:11,240 --> 00:05:13,120
Speaker 4: the classic way of recession starts.

95
00:05:14,839 --> 00:05:18,160
Speaker 2: Well, And wouldn't that suggest, Mike that while everybody's to

96
00:05:18,240 --> 00:05:20,760
Speaker 2: Joe's point on the dual mandate, trying to focus on

97
00:05:21,000 --> 00:05:24,080
Speaker 2: the inflationary side, and that's preliminary or primarily what the

98
00:05:24,080 --> 00:05:27,400
Speaker 2: FED has been keying off of two, that actually the

99
00:05:27,440 --> 00:05:29,920
Speaker 2: growth risks might be greater or just as great as

100
00:05:29,960 --> 00:05:32,960
Speaker 2: the inflation risks right now as we are seeing that

101
00:05:33,000 --> 00:05:36,320
Speaker 2: consumer pull back potentially that you're talking about, that could

102
00:05:36,400 --> 00:05:38,400
Speaker 2: be further fueled.

103
00:05:40,839 --> 00:05:41,000
Speaker 5: Well.

104
00:05:41,040 --> 00:05:42,719
Speaker 4: The problem for the FED is they're caught in the

105
00:05:42,760 --> 00:05:45,000
Speaker 4: middle here, and they're very happy with the fact that

106
00:05:45,600 --> 00:05:48,960
Speaker 4: right now inflation's coming down, slowly but coming down, and

107
00:05:49,120 --> 00:05:52,039
Speaker 4: the labor market is solid. The problem is if the

108
00:05:52,120 --> 00:05:54,760
Speaker 4: labor market deteriorates a lot, that's a suggestion that we're

109
00:05:54,760 --> 00:05:57,120
Speaker 4: going to see growth fall off, and then you start

110
00:05:57,120 --> 00:05:59,560
Speaker 4: to worry about recession, and then you start thinking about

111
00:05:59,560 --> 00:06:03,400
Speaker 4: cutting in interest rates. If inflation rises, then they would

112
00:06:03,440 --> 00:06:06,960
Speaker 4: have to start thinking about raising in play, raising interest rates,

113
00:06:07,240 --> 00:06:10,839
Speaker 4: which would also probably lead you into recession. So they'd

114
00:06:10,839 --> 00:06:13,360
Speaker 4: be caught between a rock and a hard place. So

115
00:06:13,760 --> 00:06:16,120
Speaker 4: they don't have a lot of good policy choices. If

116
00:06:16,160 --> 00:06:20,040
Speaker 4: this all goes pear shape and there is a genuine

117
00:06:20,080 --> 00:06:22,720
Speaker 4: consensus I think at the FED and among people on

118
00:06:22,760 --> 00:06:25,640
Speaker 4: Wall Street that President Trump has a very very narrow

119
00:06:25,720 --> 00:06:27,160
Speaker 4: path to make this work.

120
00:06:28,320 --> 00:06:32,200
Speaker 3: Looking at a rising stock market at this point, Mike,

121
00:06:32,279 --> 00:06:34,960
Speaker 3: the S and P's up ten points. We were sharply

122
00:06:35,040 --> 00:06:38,640
Speaker 3: lower earlier, the Nasdaq and correction territory this morning, now

123
00:06:38,839 --> 00:06:41,200
Speaker 3: eighteen points. I realized it isn't rally time, but the

124
00:06:41,240 --> 00:06:44,880
Speaker 3: turnaround was significant. You credited that to the calumn that

125
00:06:44,960 --> 00:06:47,800
Speaker 3: j Powell spoke to the markets, he's got to be

126
00:06:47,880 --> 00:06:50,960
Speaker 3: quiet for a little while. Now. How damaging could that

127
00:06:51,000 --> 00:06:53,080
Speaker 3: be for a nervous s Wall Street.

128
00:06:55,839 --> 00:06:58,400
Speaker 4: Well, it depends on the psychology of markets, which I

129
00:06:59,480 --> 00:07:02,479
Speaker 4: can't claim to know at this point. If there was

130
00:07:02,480 --> 00:07:06,719
Speaker 4: a feeling and an ongoing feeling that a sell off

131
00:07:06,880 --> 00:07:09,640
Speaker 4: was due, which I think there was, and you're looking

132
00:07:09,640 --> 00:07:12,440
Speaker 4: for reasons to sell, then you have to ask where

133
00:07:12,480 --> 00:07:15,720
Speaker 4: are we in that cycle. Next week we get the

134
00:07:15,760 --> 00:07:18,040
Speaker 4: inflation numbers from the CPI and then we'll get those

135
00:07:18,080 --> 00:07:21,480
Speaker 4: Michigan numbers. Will those contribute to a negative feeling that's

136
00:07:21,560 --> 00:07:25,520
Speaker 4: enough to keep markets going down? Or have we gotten

137
00:07:25,560 --> 00:07:28,240
Speaker 4: back to a little bit more of proper valuation and

138
00:07:28,360 --> 00:07:31,280
Speaker 4: people will either hold and wait and see what happens

139
00:07:31,280 --> 00:07:33,800
Speaker 4: with the tariffs or start to go back up again.

140
00:07:35,400 --> 00:07:38,080
Speaker 2: All right, Bloomberg's Michael McKee live on the scene where

141
00:07:38,080 --> 00:07:41,680
Speaker 2: we just heard from Chairman Powell. Thank you so much.

142
00:07:41,720 --> 00:07:43,960
Speaker 2: As we consider what Mike was just talking about tariffs.

143
00:07:44,000 --> 00:07:46,920
Speaker 2: This is actually something that our colleague Jonathan Farrow had

144
00:07:46,920 --> 00:07:49,480
Speaker 2: the chance to speak with the National Economic Council Director

145
00:07:49,560 --> 00:07:52,320
Speaker 2: Kevin Hassett about earlier this morning. As once again we're

146
00:07:52,360 --> 00:07:55,280
Speaker 2: getting new headlines from President Trump around tariffs he may

147
00:07:55,400 --> 00:07:58,520
Speaker 2: or may not impose on partners like Canada. This is

148
00:07:58,520 --> 00:08:00,760
Speaker 2: how director has It spoke about it.

149
00:08:01,400 --> 00:08:03,000
Speaker 5: I think in some sense that you've got quite a

150
00:08:03,000 --> 00:08:05,680
Speaker 5: bit of clarity already. There's no uncertainty. There's going to

151
00:08:05,720 --> 00:08:08,040
Speaker 5: be some tariff. It's going to be reciprocal. If you

152
00:08:08,240 --> 00:08:11,200
Speaker 5: don't like teriffs very much, then reciprocal could be a

153
00:08:11,240 --> 00:08:13,480
Speaker 5: great thing for you, because then countries around the world

154
00:08:13,480 --> 00:08:15,840
Speaker 5: will be lowering their tariffs. But the President believes that

155
00:08:15,880 --> 00:08:18,720
Speaker 5: if we replace income tax revenue with tariff revenue, we

156
00:08:18,760 --> 00:08:20,000
Speaker 5: can make everybody better off.

157
00:08:22,480 --> 00:08:27,040
Speaker 2: Make everybody better off, Joe. Of course, not all economists

158
00:08:27,120 --> 00:08:29,080
Speaker 2: are privy to that safety.

159
00:08:28,960 --> 00:08:30,640
Speaker 3: No, And it brings us back to this idea of

160
00:08:30,680 --> 00:08:33,280
Speaker 3: short term pain, this adjustment that the market may or

161
00:08:33,320 --> 00:08:35,480
Speaker 3: the economy itself may or may not be going through.

162
00:08:35,520 --> 00:08:39,600
Speaker 3: Here what this could mean longer term for tariffs with China.

163
00:08:39,720 --> 00:08:42,400
Speaker 3: Markets don't have a lot of tolerance for that kind

164
00:08:42,400 --> 00:08:44,200
Speaker 3: of talk right now, although I guess we are seeing

165
00:08:44,520 --> 00:08:47,320
Speaker 3: a better vibe in stock since j Pollis spoke. But

166
00:08:47,400 --> 00:08:49,880
Speaker 3: this idea of a short term correction has yet to

167
00:08:49,880 --> 00:08:50,520
Speaker 3: be quantified.

168
00:08:50,880 --> 00:08:53,400
Speaker 2: Well, yeah, certainly, and we talk about better vibes today.

169
00:08:53,400 --> 00:08:55,720
Speaker 2: Better vibe just means we're roughly even on the major

170
00:08:55,760 --> 00:08:58,680
Speaker 2: benchmarks after they have fallen to below the levels where

171
00:08:58,720 --> 00:09:01,400
Speaker 2: they were on election day, after we found out that

172
00:09:01,440 --> 00:09:04,319
Speaker 2: it was President Trump who was the victor in that

173
00:09:04,400 --> 00:09:06,520
Speaker 2: the Nasdaq one hundred earlier today, as you mentioned, Joe

174
00:09:06,520 --> 00:09:10,719
Speaker 2: fell into correction territory, though it's not clear whether or

175
00:09:10,720 --> 00:09:12,679
Speaker 2: not we're going to end the trading the day there.

176
00:09:12,720 --> 00:09:15,320
Speaker 2: So obviously, the stock market is not the economy, but

177
00:09:15,360 --> 00:09:17,880
Speaker 2: the economy is feeding into what we're seeing in the

178
00:09:17,920 --> 00:09:20,080
Speaker 2: stock market, and on this Job's Day, we want to

179
00:09:20,120 --> 00:09:22,760
Speaker 2: reflect more on just how healthy the economy is and

180
00:09:22,800 --> 00:09:26,240
Speaker 2: turned to Kitty Richer. She's strategic advisor and senior fellow

181
00:09:26,679 --> 00:09:30,720
Speaker 2: at the Groundwork Collaborative. Welcome back to Balance of Power, Kitty,

182
00:09:30,760 --> 00:09:32,440
Speaker 2: if we could just begin with the data we do

183
00:09:32,559 --> 00:09:34,640
Speaker 2: have in hand today, a jobs report that showed a

184
00:09:34,679 --> 00:09:37,880
Speaker 2: little bit higher unemployment of four point one percent, but

185
00:09:37,960 --> 00:09:41,640
Speaker 2: stronger than expected manufacturing payrolls. Specifically, what read does it

186
00:09:41,679 --> 00:09:44,480
Speaker 2: provide you on the labor market right now? Knowing that

187
00:09:44,520 --> 00:09:47,400
Speaker 2: everything that's happening with cuts in the federal government is

188
00:09:47,440 --> 00:09:50,079
Speaker 2: not yet yet reflected in these figures.

189
00:09:51,240 --> 00:09:53,480
Speaker 6: Thank you, Kaylee. Yeah, I think it's really important to

190
00:09:53,600 --> 00:09:57,480
Speaker 6: understand that the chaos that the Trump administration is sowing

191
00:09:57,640 --> 00:10:02,319
Speaker 6: in the markets and among consumers has not yet had

192
00:10:02,320 --> 00:10:06,679
Speaker 6: a chance to really filter through to the broad economic indicators.

193
00:10:06,720 --> 00:10:10,640
Speaker 6: Things like the BLS Jobs Day and the cuts that

194
00:10:10,679 --> 00:10:14,680
Speaker 6: are being made to the federal government workforce are really

195
00:10:14,720 --> 00:10:17,640
Speaker 6: going to start to hit home, not just in the

196
00:10:17,720 --> 00:10:22,839
Speaker 6: labor market, where we're going to see laid off workers

197
00:10:23,320 --> 00:10:26,760
Speaker 6: trying to find new jobs, unable to make rent payments,

198
00:10:26,800 --> 00:10:31,000
Speaker 6: mortgage payments. This could cause real problems in local economies

199
00:10:31,200 --> 00:10:34,200
Speaker 6: across the country because federal workers are not just in

200
00:10:34,200 --> 00:10:39,800
Speaker 6: the DC area, but also the services that those government

201
00:10:39,880 --> 00:10:44,120
Speaker 6: workers are providing are going to start degrading rapidly. And

202
00:10:44,720 --> 00:10:48,680
Speaker 6: you know, we're hearing that the Trump administration is looking

203
00:10:48,760 --> 00:10:51,920
Speaker 6: for a short term correction for long term benefits, but

204
00:10:52,240 --> 00:10:54,839
Speaker 6: it's really clear who's going to benefit from these policies,

205
00:10:54,920 --> 00:10:58,760
Speaker 6: if anyone, and that's Elon Musk and the other billionaires

206
00:10:58,800 --> 00:11:01,640
Speaker 6: that are currently running the government. Workers are going to

207
00:11:01,679 --> 00:11:06,200
Speaker 6: see the CFPB has been gutted, and they're going to

208
00:11:06,240 --> 00:11:09,920
Speaker 6: see financial institutions taking advantage of them and their families

209
00:11:09,960 --> 00:11:14,040
Speaker 6: with no watchdog to stop it. They're going to struggle

210
00:11:14,200 --> 00:11:18,920
Speaker 6: with the Social Security Administration, where the Trump administration ousted

211
00:11:19,040 --> 00:11:21,600
Speaker 6: the head of SSA so that they could get their

212
00:11:21,640 --> 00:11:27,360
Speaker 6: hands on sensitive data and are now threatening deeper cuts

213
00:11:27,400 --> 00:11:31,960
Speaker 6: to services while also lying about non existent fraud in

214
00:11:32,000 --> 00:11:34,800
Speaker 6: the State of the Union. All of these things are

215
00:11:34,840 --> 00:11:37,920
Speaker 6: going to start to show up in the labor market,

216
00:11:38,080 --> 00:11:40,560
Speaker 6: and they're already showing up in the lives of workers

217
00:11:40,600 --> 00:11:41,400
Speaker 6: and families.

218
00:11:43,360 --> 00:11:45,960
Speaker 3: Well, I'll tell you, I don't know to what extent

219
00:11:46,040 --> 00:11:49,000
Speaker 3: there was lying about fraud, but we were just talking

220
00:11:49,040 --> 00:11:53,119
Speaker 3: to Michael McKee about the impact of federal worker layoffs.

221
00:11:53,240 --> 00:11:56,880
Speaker 3: As you talk about this yourself, Kitty, could we be

222
00:11:56,920 --> 00:11:59,160
Speaker 3: in a world in which this effort by the Trump

223
00:11:59,200 --> 00:12:03,200
Speaker 3: administration and the ancillary impact that you're describing is what

224
00:12:03,240 --> 00:12:05,520
Speaker 3: prompts the Federal Reserve to start cutting rights again.

225
00:12:07,280 --> 00:12:09,160
Speaker 6: I think that the Fed is in a really difficult

226
00:12:09,200 --> 00:12:14,240
Speaker 6: position because the Trump administration is simultaneously engaging in these

227
00:12:14,280 --> 00:12:19,880
Speaker 6: federal worker cuts that absolutely could ripple through the economy

228
00:12:20,040 --> 00:12:25,880
Speaker 6: and cause contraction, while also sewing chaos in the markets

229
00:12:25,960 --> 00:12:30,040
Speaker 6: and threatening things that might drive up inflation. And so

230
00:12:30,800 --> 00:12:36,120
Speaker 6: it's a really difficult situation. I will say that I

231
00:12:36,200 --> 00:12:39,560
Speaker 6: believe that the FED should have cut interest rates more

232
00:12:39,600 --> 00:12:44,160
Speaker 6: quickly than they did, and we are still seeing persistent

233
00:12:44,520 --> 00:12:49,520
Speaker 6: inflation problems in the housing sector, but that's not going

234
00:12:49,520 --> 00:12:53,480
Speaker 6: to be aided by the FED holding mortgage interest rates

235
00:12:53,520 --> 00:12:56,559
Speaker 6: and other interest rates higher. Those interest rates are really

236
00:12:57,400 --> 00:13:01,240
Speaker 6: harming American families as they go out into the world

237
00:13:01,240 --> 00:13:04,080
Speaker 6: and try to purchase homes, try to pay their rent,

238
00:13:04,160 --> 00:13:08,320
Speaker 6: try to make ends meet in the current environment. But

239
00:13:08,760 --> 00:13:12,560
Speaker 6: it is really difficult to do monetary policy when there's

240
00:13:12,600 --> 00:13:13,599
Speaker 6: this much chaos.

241
00:13:15,240 --> 00:13:17,280
Speaker 2: Well, to your point on mortgage rates, we have seen

242
00:13:17,320 --> 00:13:20,679
Speaker 2: them come down as we've seen bond yields falling, specifically

243
00:13:20,720 --> 00:13:23,800
Speaker 2: in this administration has contended Kitty that they don't necessarily

244
00:13:23,840 --> 00:13:25,920
Speaker 2: need the FED to be cutting interest rates, that there

245
00:13:25,960 --> 00:13:29,160
Speaker 2: are mechanisms through which they can actually bring rates down

246
00:13:29,480 --> 00:13:32,640
Speaker 2: on their own and still have that relief provided to

247
00:13:33,000 --> 00:13:34,839
Speaker 2: want to be home buyers or people who need to

248
00:13:34,840 --> 00:13:38,080
Speaker 2: borrow money that you're alluding to. Are there actual fiscal

249
00:13:38,120 --> 00:13:42,920
Speaker 2: means with which they can do that in your mind, I.

250
00:13:42,880 --> 00:13:45,079
Speaker 6: Mean, the government has a lot of power to make

251
00:13:45,120 --> 00:13:47,680
Speaker 6: homes more affordable, but I don't think anything that Trump

252
00:13:47,720 --> 00:13:51,120
Speaker 6: administration is planning gets at that core issue for the

253
00:13:51,160 --> 00:13:54,720
Speaker 6: American people. There are lots of things that the government

254
00:13:54,760 --> 00:13:59,080
Speaker 6: can do to bring down the prices of healthcare and

255
00:13:59,760 --> 00:14:03,520
Speaker 6: grow and the things that Americans rely on, and the

256
00:14:03,559 --> 00:14:07,719
Speaker 6: Trump administration is moving in the opposite direction. So I

257
00:14:07,760 --> 00:14:09,800
Speaker 6: wouldn't take those promises at face value.

258
00:14:11,600 --> 00:14:14,839
Speaker 3: We had a conversation with Larry Summers just this week

259
00:14:14,920 --> 00:14:17,960
Speaker 3: getting back to this idea of short term pain for

260
00:14:18,080 --> 00:14:21,120
Speaker 3: long term gain. I think as you described it, Kitty,

261
00:14:21,200 --> 00:14:24,880
Speaker 3: Larry Summers, the former Treasury secretary, says that's the new transitory.

262
00:14:25,000 --> 00:14:26,040
Speaker 3: It sounds like you agree.

263
00:14:28,320 --> 00:14:33,400
Speaker 6: If we're talking about the Trump administration's promises that somehow,

264
00:14:33,440 --> 00:14:38,240
Speaker 6: this chaotic approach to managing the economy and allowing the

265
00:14:38,280 --> 00:14:41,640
Speaker 6: wealthiest man on earth to loot the federal government is

266
00:14:41,680 --> 00:14:47,000
Speaker 6: going to somehow eventually trickle down to workers. I think

267
00:14:47,040 --> 00:14:51,080
Speaker 6: that that is preposterous, and we're not seeing any evidence

268
00:14:51,120 --> 00:14:53,200
Speaker 6: of that. I don't think that we can take these

269
00:14:53,240 --> 00:14:56,200
Speaker 6: claims at face value at this point, and.

270
00:14:56,120 --> 00:14:57,240
Speaker 7: So I.

271
00:14:59,600 --> 00:15:03,640
Speaker 6: Agree that it would be silly to take the Trump

272
00:15:03,640 --> 00:15:09,840
Speaker 6: administration's claims about their policies and evaluate them without reference

273
00:15:09,920 --> 00:15:13,240
Speaker 6: to all of the other wild claims that they have

274
00:15:13,360 --> 00:15:15,960
Speaker 6: made and none of it is playing out in the data.

275
00:15:16,320 --> 00:15:18,440
Speaker 6: We know what is going to happen when you have

276
00:15:18,680 --> 00:15:27,640
Speaker 6: a government that is having sweetheart deals with Tesla, rampaging

277
00:15:27,720 --> 00:15:33,000
Speaker 6: through the federal workforce, cutting services to people, all in

278
00:15:33,040 --> 00:15:38,480
Speaker 6: the service of tax cuts for the very wealthiest and corporations,

279
00:15:38,600 --> 00:15:42,360
Speaker 6: which is what the Republicans and Congress are currently working toward.

280
00:15:43,200 --> 00:15:46,360
Speaker 6: We have fifty years of evidence that that kind of

281
00:15:46,360 --> 00:15:50,800
Speaker 6: behavior arms American workers in the short, medium and long term.

282
00:15:52,880 --> 00:15:57,200
Speaker 2: Well, if you just consider then the administration's objectives, if

283
00:15:57,240 --> 00:16:00,200
Speaker 2: you don't agree with their policy that they've said just

284
00:16:00,320 --> 00:16:02,720
Speaker 2: as a means of getting their kitty. If the objective

285
00:16:02,920 --> 00:16:08,680
Speaker 2: is to juice American growth, to incentivize American manufacturing, what

286
00:16:08,840 --> 00:16:12,000
Speaker 2: is the popular or proper way to go about that

287
00:16:12,440 --> 00:16:15,920
Speaker 2: if it isn't raising tariffs on trading partners, in cutting

288
00:16:16,000 --> 00:16:17,400
Speaker 2: taxes as they have outlined.

289
00:16:18,800 --> 00:16:23,640
Speaker 6: I mean, the Inflation Reduction Act, investments in manufacturing and

290
00:16:23,760 --> 00:16:28,920
Speaker 6: resharing are beginning to bear fruit now, and this administration

291
00:16:29,360 --> 00:16:32,000
Speaker 6: is trying to roll all of those back. I think

292
00:16:32,280 --> 00:16:36,360
Speaker 6: the way that we invest in American manufacturing American workers

293
00:16:36,640 --> 00:16:40,840
Speaker 6: is by investing in American manufacturing and American workers, not

294
00:16:41,200 --> 00:16:48,080
Speaker 6: by capriciously threatening our closest trading partners with tariffs that

295
00:16:48,640 --> 00:16:52,560
Speaker 6: do nothing but royal the markets, while also by the

296
00:16:52,560 --> 00:16:58,040
Speaker 6: way behind the scenes, walking back things like promises to

297
00:16:58,120 --> 00:17:01,720
Speaker 6: close loopholes that allow China to ship goods into the

298
00:17:01,800 --> 00:17:06,160
Speaker 6: United States without inspection. This policy is just really incoherent,

299
00:17:06,359 --> 00:17:08,800
Speaker 6: and so it's difficult to evaluate it on the merits.

300
00:17:08,960 --> 00:17:11,520
Speaker 6: But I do think that we have ample evidence that

301
00:17:11,560 --> 00:17:14,879
Speaker 6: an investment led strategy can be really helpful. And we

302
00:17:15,000 --> 00:17:19,479
Speaker 6: saw business investment, private investment go up near the end

303
00:17:19,520 --> 00:17:24,240
Speaker 6: of the Biden administration, and that was the fruits of

304
00:17:24,280 --> 00:17:27,800
Speaker 6: the investments that the administration made over the course of

305
00:17:27,840 --> 00:17:29,920
Speaker 6: the pandemic and the recovery from the pandemic.

306
00:17:31,440 --> 00:17:33,520
Speaker 3: Kitty, it's great to have you back, Kitty Richard, Senior

307
00:17:33,600 --> 00:17:37,560
Speaker 3: Strategic Advisor, Senior fellow the Groundwork Collaborative. In the wake

308
00:17:37,680 --> 00:17:40,159
Speaker 3: of j. Powell's comments and on this job's day, we

309
00:17:40,240 --> 00:17:43,880
Speaker 3: are typically higher on Wall Street after a very negative

310
00:17:43,960 --> 00:17:46,040
Speaker 3: start to trading. Here Kayley the S and P five

311
00:17:46,119 --> 00:17:49,679
Speaker 3: hundred up six points. Nasdaq is up eight after touching

312
00:17:49,720 --> 00:17:52,440
Speaker 3: correction territory that DAWs up over one hundred points. Big

313
00:17:52,480 --> 00:17:55,520
Speaker 3: jump in McDonald's today, which might speak to this whole

314
00:17:55,560 --> 00:17:56,600
Speaker 3: theme that we're touching on.

315
00:17:56,840 --> 00:18:00,480
Speaker 2: Yeah, and this theme obviously doesn't just apply to markets.

316
00:18:00,520 --> 00:18:02,600
Speaker 2: We're looking at the bond market as well. Interestingly, while

317
00:18:02,640 --> 00:18:05,320
Speaker 2: yels were lower in the aftermath of today's jobs data,

318
00:18:05,400 --> 00:18:07,359
Speaker 2: once we heard from Chairman Pow, they ticked up a bit.

319
00:18:07,359 --> 00:18:09,600
Speaker 2: We're up two basis points on the ten year, two

320
00:18:09,640 --> 00:18:11,679
Speaker 2: basis points on the two year as well. Those yields

321
00:18:11,680 --> 00:18:15,840
Speaker 2: four point two nine and three point nine seven percent, respectively.

322
00:18:15,880 --> 00:18:19,520
Speaker 2: In bitcoin eighty eight thousand. As the White House Crypto Summit.

323
00:18:19,359 --> 00:18:21,480
Speaker 3: Kicks off today, you wouldn't think that was happening based

324
00:18:21,520 --> 00:18:24,520
Speaker 3: on the price action. But there's some concern about using

325
00:18:24,560 --> 00:18:27,040
Speaker 3: seized coins not buying new ones. We'll talk about that

326
00:18:27,080 --> 00:18:29,120
Speaker 3: coming up next right here. On Balance of Power. This

327
00:18:29,320 --> 00:18:29,920
Speaker 3: is Bloomberg.

328
00:18:31,960 --> 00:18:35,440
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch

329
00:18:35,520 --> 00:18:38,360
Speaker 1: us live weekdays at noon and five pm. E's durn

330
00:18:38,520 --> 00:18:41,920
Speaker 1: on Apple, Cocklay and Android Auto with the Bloomberg Business app.

331
00:18:41,960 --> 00:18:45,000
Speaker 1: You can also listen live on Amazon Alexa from our

332
00:18:45,000 --> 00:18:51,240
Speaker 1: flagship New York station, Just Say Alexa played Bloomberg eleven thirty.

333
00:18:50,840 --> 00:18:53,600
Speaker 2: Meantime in Washington We're particularly interested in the price action

334
00:18:54,160 --> 00:18:56,320
Speaker 2: in bitcoin today because if I were to tell you

335
00:18:56,320 --> 00:18:59,280
Speaker 2: it would actually be down the day after a long

336
00:18:59,320 --> 00:19:02,840
Speaker 2: awaited Exact of Order to establish a strategic Bitcoin Reserve

337
00:19:02,840 --> 00:19:05,960
Speaker 2: from President Trump was signed, you might not necessarily believe it.

338
00:19:06,000 --> 00:19:08,040
Speaker 2: Of course, he talked about this on the campaign trail.

339
00:19:08,160 --> 00:19:10,040
Speaker 2: He said he would do it. It just finally came

340
00:19:10,880 --> 00:19:14,879
Speaker 2: part of the whole promises made, promises kept thing, I guess, Joe,

341
00:19:14,920 --> 00:19:18,000
Speaker 2: but those who invest in crypto specifically may have been

342
00:19:18,160 --> 00:19:20,119
Speaker 2: hoping that this promise was going to be kept a

343
00:19:20,119 --> 00:19:22,600
Speaker 2: little bit differently, as in this would mean the government

344
00:19:22,640 --> 00:19:25,399
Speaker 2: was going to start buying bitcoin rather than just taking

345
00:19:25,400 --> 00:19:27,640
Speaker 2: what the government had already seized and putting it into

346
00:19:27,680 --> 00:19:28,119
Speaker 2: this reserve.

347
00:19:28,240 --> 00:19:30,479
Speaker 3: That was the dream, which I guess could still be realized.

348
00:19:30,480 --> 00:19:32,480
Speaker 3: But they're going to start this way. Scott Bessett was

349
00:19:32,520 --> 00:19:36,000
Speaker 3: talking about this earlier today in an interview, suggesting that

350
00:19:36,040 --> 00:19:40,560
Speaker 3: at least they're going to stop selling bitcoin, create the

351
00:19:40,600 --> 00:19:42,760
Speaker 3: reserve and then maybe move on from there. But there's

352
00:19:42,760 --> 00:19:45,160
Speaker 3: been a lot of disappointment around this lately. The post

353
00:19:45,200 --> 00:19:48,679
Speaker 3: Untruth social a couple of days ago that suggested, you know,

354
00:19:48,840 --> 00:19:52,320
Speaker 3: investing in a series of different tokens sent bitcoin lower

355
00:19:52,800 --> 00:19:54,800
Speaker 3: and now here we are again today, although it's coming

356
00:19:54,840 --> 00:19:55,879
Speaker 3: off its lows of the session.

357
00:19:56,000 --> 00:19:56,160
Speaker 7: Yeah.

358
00:19:56,160 --> 00:19:57,800
Speaker 2: And I would point out that David Sachs, the White

359
00:19:57,800 --> 00:20:01,000
Speaker 2: House Crypto and Aizar did join Blue earlier today and

360
00:20:01,040 --> 00:20:03,400
Speaker 2: talked a little bit about this. This is what he said.

361
00:20:04,119 --> 00:20:06,560
Speaker 8: The reason why we need a bitcoin reserve is that

362
00:20:06,600 --> 00:20:09,920
Speaker 8: the federal government already owns some. In fact, it obtained

363
00:20:09,920 --> 00:20:13,360
Speaker 8: around four hundred thousand bitcoin over the past decade through

364
00:20:13,440 --> 00:20:17,840
Speaker 8: criminal and civil forfeitures and seizures, and so the government

365
00:20:17,920 --> 00:20:20,520
Speaker 8: has to have a strategy for how it deals with this.

366
00:20:22,280 --> 00:20:26,240
Speaker 3: Our conversation with Kristin Smith, the Blockchain Association CEO, is

367
00:20:26,280 --> 00:20:30,560
Speaker 3: with us at the table as the Crypto Summit gets

368
00:20:30,600 --> 00:20:32,680
Speaker 3: underway down the street at the White House, Christen, it's

369
00:20:32,680 --> 00:20:34,920
Speaker 3: great to see you. Welcome back to Bloomberg TV and Radio.

370
00:20:35,119 --> 00:20:35,760
Speaker 9: Great to be here.

371
00:20:35,800 --> 00:20:37,800
Speaker 3: What do you make of this frustration? Do you share it?

372
00:20:37,840 --> 00:20:39,600
Speaker 3: Were you hoping that the White House was going to

373
00:20:39,600 --> 00:20:40,640
Speaker 3: start buying No?

374
00:20:41,000 --> 00:20:43,360
Speaker 10: I think what happened last night with the executive order

375
00:20:43,440 --> 00:20:49,000
Speaker 10: that created a Bitcoin Strategic Reserve and a digital asset stockpile, I.

376
00:20:49,000 --> 00:20:50,280
Speaker 9: Think it hit the nail on the head.

377
00:20:50,320 --> 00:20:53,240
Speaker 10: This is exactly the type of signal that we need

378
00:20:53,280 --> 00:20:57,000
Speaker 10: to show that the United States is serious about keeping

379
00:20:57,040 --> 00:20:59,600
Speaker 10: the capital or making the US the crypto capital of

380
00:20:59,640 --> 00:21:03,399
Speaker 10: the world, but doesn't doesn't go so far that we

381
00:21:03,480 --> 00:21:06,160
Speaker 10: have the US government going out there into the market

382
00:21:06,440 --> 00:21:09,320
Speaker 10: and buying digital assets. I think as the AI and

383
00:21:09,359 --> 00:21:12,439
Speaker 10: cryptos are David Sachs pointed out earlier on Bloomberg Today,

384
00:21:13,000 --> 00:21:14,679
Speaker 10: you know that the US already has a lot of

385
00:21:14,720 --> 00:21:15,280
Speaker 10: these assets.

386
00:21:15,280 --> 00:21:17,640
Speaker 9: We need to take an inventory put it in one place.

387
00:21:18,400 --> 00:21:21,000
Speaker 10: But you know, I do think that there was some

388
00:21:21,040 --> 00:21:23,960
Speaker 10: around the world that don't fully understand the limits of

389
00:21:24,000 --> 00:21:24,760
Speaker 10: executive power.

390
00:21:24,800 --> 00:21:26,600
Speaker 9: I think if you want to have the government going

391
00:21:26,640 --> 00:21:29,400
Speaker 9: out and spending money to buy crypto, that is something.

392
00:21:29,200 --> 00:21:32,040
Speaker 10: That Congress needs to do and that is not within

393
00:21:32,040 --> 00:21:33,920
Speaker 10: the scope of the executive order. So I think there's

394
00:21:33,920 --> 00:21:36,240
Speaker 10: maybe just a misunderstanding of the powers that are out there.

395
00:21:36,240 --> 00:21:39,000
Speaker 10: But you know, I'm excited to see this established because

396
00:21:39,000 --> 00:21:41,840
Speaker 10: I think we're really ready to move the conversation onto

397
00:21:42,520 --> 00:21:45,760
Speaker 10: what can we do to establish a regulatory framework that

398
00:21:45,880 --> 00:21:49,679
Speaker 10: keeps US competitive for generations to come. And a lot

399
00:21:49,680 --> 00:21:52,000
Speaker 10: of that work right now is happening on Capitol Hill

400
00:21:52,080 --> 00:21:56,240
Speaker 10: with negotiations around stable coin bill market structure and some

401
00:21:56,280 --> 00:21:58,920
Speaker 10: of these other issues, and so I'm excited to see

402
00:21:58,920 --> 00:22:01,440
Speaker 10: this issue so hopefully put to the side for now

403
00:22:01,480 --> 00:22:04,000
Speaker 10: so we can focus on the really difficult work of

404
00:22:04,000 --> 00:22:05,560
Speaker 10: finding the right regulatory framework.

405
00:22:05,600 --> 00:22:07,560
Speaker 2: Well to your point, Kristen on Congress having to play

406
00:22:07,560 --> 00:22:09,199
Speaker 2: a role here, we did get a statement from the

407
00:22:09,280 --> 00:22:11,800
Speaker 2: Chair of the House Financial Services Committee French Hill today

408
00:22:11,800 --> 00:22:15,000
Speaker 2: which in part right, I encourage the administration to collaborate

409
00:22:15,040 --> 00:22:18,040
Speaker 2: with Congress, particularly in regard to the structure and any

410
00:22:18,080 --> 00:22:22,000
Speaker 2: funding related to the Strategic Bitcoin Reserve. Are all parties

411
00:22:22,040 --> 00:22:24,040
Speaker 2: aligned on not just this but the other things you

412
00:22:24,080 --> 00:22:25,840
Speaker 2: were talking about. The way in which to pursue a

413
00:22:25,840 --> 00:22:29,520
Speaker 2: strategy around market structure and stable coins. Is David Sach's

414
00:22:29,520 --> 00:22:31,359
Speaker 2: going to be saying in the same tune as Chairman

415
00:22:31,480 --> 00:22:33,160
Speaker 2: Hill or Chairman Scott.

416
00:22:32,880 --> 00:22:34,719
Speaker 10: For them, Yeah, I mean, I think everybody is aligned

417
00:22:34,760 --> 00:22:36,679
Speaker 10: with the goal, and there are a lot of different

418
00:22:36,680 --> 00:22:38,679
Speaker 10: ways I think to get to the same goal. And

419
00:22:38,720 --> 00:22:41,600
Speaker 10: I think a healthy policymaking process is the one we're

420
00:22:41,600 --> 00:22:46,600
Speaker 10: having now, where we allow different ideas to be vetted, debated, suggested,

421
00:22:47,280 --> 00:22:47,600
Speaker 10: and to.

422
00:22:47,600 --> 00:22:50,200
Speaker 9: Allow this collaboration. But I think the fact that we have.

423
00:22:50,640 --> 00:22:53,720
Speaker 10: The White House that is convening industry to hear from them.

424
00:22:53,760 --> 00:22:57,600
Speaker 10: They've invited representatives from Capitol Hill to join. We've had

425
00:22:57,640 --> 00:22:59,440
Speaker 10: David Sachs go to the Hill and be part of

426
00:22:59,440 --> 00:23:00,000
Speaker 10: press conference.

427
00:23:00,200 --> 00:23:00,560
Speaker 9: Is there.

428
00:23:00,840 --> 00:23:04,080
Speaker 10: I think the type of collaboration going on between the agencies,

429
00:23:04,119 --> 00:23:07,320
Speaker 10: between the White House and between Congress is very important

430
00:23:07,400 --> 00:23:10,000
Speaker 10: to making sure that all of the considerations are in place.

431
00:23:10,040 --> 00:23:12,320
Speaker 10: I think what we saw over the last four years

432
00:23:12,359 --> 00:23:14,639
Speaker 10: is we weren't having that kind of dialogue. We were

433
00:23:14,680 --> 00:23:17,640
Speaker 10: in send instead of seeing enforcement actions a lot of litigation,

434
00:23:18,160 --> 00:23:21,920
Speaker 10: and that wasn't the right approach. This open dialogue, discussion

435
00:23:21,960 --> 00:23:24,280
Speaker 10: and debate is exactly what we need, and I'm really

436
00:23:24,320 --> 00:23:27,199
Speaker 10: confident that we could build on the legislative work that

437
00:23:27,240 --> 00:23:29,760
Speaker 10: Congress did last year and get these items in place

438
00:23:29,800 --> 00:23:31,359
Speaker 10: as we move further along into the year.

439
00:23:31,560 --> 00:23:35,320
Speaker 3: So clearly you see this as a legitimizing action to

440
00:23:36,040 --> 00:23:38,000
Speaker 3: executive order. When you look at the language though that

441
00:23:38,080 --> 00:23:42,200
Speaker 3: David Sachs has been using. Any acquisitions would require budget

442
00:23:42,359 --> 00:23:46,480
Speaker 3: neutral strategies. Yeah, this is Washington. How long do you

443
00:23:46,520 --> 00:23:47,240
Speaker 3: need to wait for that?

444
00:23:47,760 --> 00:23:48,040
Speaker 9: Yeah?

445
00:23:48,119 --> 00:23:50,359
Speaker 10: Well, I mean listen, I think that there's going to

446
00:23:50,400 --> 00:23:53,680
Speaker 10: be a brainstorm as to how potentially we could add

447
00:23:53,720 --> 00:23:55,800
Speaker 10: more bitcoin. I mean, one idea I have I do

448
00:23:55,840 --> 00:23:58,119
Speaker 10: think this would also require an Act of Congress is

449
00:23:58,440 --> 00:24:00,840
Speaker 10: let people pay their taxes in bitcoin, or let people

450
00:24:01,040 --> 00:24:03,160
Speaker 10: let's collect all these tariffs in bitcoin. And I think

451
00:24:03,160 --> 00:24:08,600
Speaker 10: there's a lot of way that we can bring bitcoin exactly. So,

452
00:24:09,280 --> 00:24:11,960
Speaker 10: you know, there's ideas out there, and I think, you know,

453
00:24:12,000 --> 00:24:14,399
Speaker 10: the key is that the White House doesn't have the

454
00:24:14,400 --> 00:24:17,199
Speaker 10: authority to spend taxpayer dollars that Congress hasn't given them,

455
00:24:17,280 --> 00:24:19,880
Speaker 10: and so this is I think a really smart way.

456
00:24:19,960 --> 00:24:22,240
Speaker 10: I think they've thread the needle and I think it

457
00:24:22,320 --> 00:24:24,919
Speaker 10: sends a strong statement. I think there may be some

458
00:24:24,960 --> 00:24:27,680
Speaker 10: disappointment in the markets today, but you know, I think

459
00:24:27,680 --> 00:24:30,480
Speaker 10: as we move forward, this is a really stable policy

460
00:24:30,560 --> 00:24:32,879
Speaker 10: and not something that would just be undone with another,

461
00:24:33,119 --> 00:24:36,520
Speaker 10: you know, stroke of the pen in a future administration.

462
00:24:36,880 --> 00:24:40,160
Speaker 2: So to Joe's point on it lending legitimacy to the industry,

463
00:24:40,200 --> 00:24:42,239
Speaker 2: is that also what today's summit is about? Or are

464
00:24:42,280 --> 00:24:45,040
Speaker 2: you expecting that there's going to be tangible outcomes from

465
00:24:45,040 --> 00:24:47,360
Speaker 2: all of these executives meeting at the White House?

466
00:24:47,400 --> 00:24:49,760
Speaker 9: Yeah, I mean, this is an absolutely historic day.

467
00:24:49,840 --> 00:24:53,840
Speaker 10: I think sixteen years ago when Satoshi you know, issued

468
00:24:53,840 --> 00:24:56,119
Speaker 10: the white paper and then you know, bitcoin was running,

469
00:24:56,359 --> 00:24:59,440
Speaker 10: I don't think anyone could have imagined something like this

470
00:25:00,160 --> 00:25:01,720
Speaker 10: happening at the White House. I mean, this is this

471
00:25:01,800 --> 00:25:06,000
Speaker 10: is absolutely historic. I think it really sends a strong

472
00:25:06,119 --> 00:25:10,520
Speaker 10: signal that you know, crypto is valued here in the US,

473
00:25:10,560 --> 00:25:13,160
Speaker 10: this is an important industry and that we want to lead.

474
00:25:13,560 --> 00:25:16,040
Speaker 10: And I do think we could see some further announcements today.

475
00:25:16,080 --> 00:25:18,320
Speaker 10: I mean I think that that we are looking at

476
00:25:18,320 --> 00:25:20,720
Speaker 10: things in sort of two steps. The first step is

477
00:25:20,720 --> 00:25:23,400
Speaker 10: we need to undo the damage of the last administration.

478
00:25:23,920 --> 00:25:26,400
Speaker 10: The second step is we need to put the regulatory

479
00:25:26,440 --> 00:25:28,639
Speaker 10: and framework in place that allows the US to be

480
00:25:28,640 --> 00:25:31,400
Speaker 10: competitive for generations. And so I do think we can

481
00:25:31,440 --> 00:25:33,919
Speaker 10: see a lot of discussion today about you know, what

482
00:25:33,960 --> 00:25:36,560
Speaker 10: are the outstanding remaining items that we need to change

483
00:25:36,600 --> 00:25:37,760
Speaker 10: from the last administration.

484
00:25:37,840 --> 00:25:38,400
Speaker 9: There's a lot of.

485
00:25:38,320 --> 00:25:40,399
Speaker 10: Guidance out there, there's a lot of proposed rulemakings that

486
00:25:40,400 --> 00:25:41,360
Speaker 10: could be very damaging.

487
00:25:41,600 --> 00:25:44,040
Speaker 9: We need to wipe that away so we can.

488
00:25:43,920 --> 00:25:45,520
Speaker 10: Get roll of our sleeves and do the real work

489
00:25:45,560 --> 00:25:47,160
Speaker 10: to get the regulatory frameworktplace.

490
00:25:47,200 --> 00:25:50,640
Speaker 3: Ho Thik is the tent with the Blockchain Association. When

491
00:25:50,680 --> 00:25:54,480
Speaker 3: it comes to meme coins, this White House, this White

492
00:25:54,480 --> 00:25:57,600
Speaker 3: House has cranked a few hours argument about whether this

493
00:25:57,680 --> 00:25:59,160
Speaker 3: actually helps or hurts the industry.

494
00:25:59,240 --> 00:26:00,359
Speaker 9: Yeah, I know, you know, it's interesting.

495
00:26:00,359 --> 00:26:03,040
Speaker 10: I mean, I think meme coins are I think, a

496
00:26:03,200 --> 00:26:04,720
Speaker 10: perfectly legitimate.

497
00:26:04,280 --> 00:26:05,359
Speaker 9: And wonderful technology.

498
00:26:05,440 --> 00:26:05,600
Speaker 7: Right.

499
00:26:05,680 --> 00:26:09,119
Speaker 10: People are allowed to enjoy novelties, They're allowed to have fun,

500
00:26:09,200 --> 00:26:12,639
Speaker 10: and that's what that's what meme coins do. You know,

501
00:26:12,680 --> 00:26:14,760
Speaker 10: I think, you know, there is a little bit of

502
00:26:14,760 --> 00:26:18,200
Speaker 10: anxiety when you have the president playing in this space.

503
00:26:18,240 --> 00:26:20,160
Speaker 9: And I don't think he's doing anything wrong. I think

504
00:26:20,200 --> 00:26:23,520
Speaker 9: he's he's doing everything that is allowed under the law.

505
00:26:23,840 --> 00:26:26,879
Speaker 10: You know, there has been legislation that a Congressman Lecardo

506
00:26:26,960 --> 00:26:31,879
Speaker 10: introduced that would prevent elected officials from issuing.

507
00:26:31,480 --> 00:26:32,320
Speaker 9: Their own meme poins.

508
00:26:32,359 --> 00:26:35,960
Speaker 10: And I think that's an important debate for Congress to have.

509
00:26:36,119 --> 00:26:39,960
Speaker 10: But I mean, listen, we went from a president who

510
00:26:41,160 --> 00:26:44,000
Speaker 10: you know, did every his administration, did everything within their

511
00:26:44,000 --> 00:26:46,640
Speaker 10: power to try to stop this industry, to a president

512
00:26:47,000 --> 00:26:51,720
Speaker 10: who is all in, who is very enthusiastic, and who's participating.

513
00:26:51,800 --> 00:26:54,399
Speaker 10: And so you know, I will take the challenges of

514
00:26:54,440 --> 00:26:58,320
Speaker 10: an overly enthusiastic president any day compared to having to

515
00:26:58,359 --> 00:27:00,520
Speaker 10: deal with Gary Gensler in the lastdministration.

516
00:27:00,920 --> 00:27:02,560
Speaker 2: Well, and so that brings me back to your point

517
00:27:02,560 --> 00:27:05,040
Speaker 2: about there's kind of two phases here. One the unwinding

518
00:27:05,160 --> 00:27:07,600
Speaker 2: of before, and then we get to the after. If

519
00:27:07,600 --> 00:27:10,720
Speaker 2: the after has to include to create a regulatory framework

520
00:27:10,760 --> 00:27:13,639
Speaker 2: market structure, legislation emanating from Congress, which we got in

521
00:27:13,640 --> 00:27:15,560
Speaker 2: the last one didn't ultimately cross the finish line, I

522
00:27:15,560 --> 00:27:18,080
Speaker 2: would imagine it's going to look pretty different now that

523
00:27:18,119 --> 00:27:21,760
Speaker 2: Republicans have full control. What timeline are you expecting there?

524
00:27:21,760 --> 00:27:24,160
Speaker 2: If there's still all this kind of backward looking work

525
00:27:24,200 --> 00:27:26,280
Speaker 2: that needs to be done, when does that forward progress?

526
00:27:26,359 --> 00:27:28,359
Speaker 10: Yeah, Well, I think there's a lot of momentum building

527
00:27:28,400 --> 00:27:31,200
Speaker 10: in Congress. So we just last or just this week, gosh,

528
00:27:31,320 --> 00:27:31,960
Speaker 10: it was only this week.

529
00:27:32,840 --> 00:27:36,359
Speaker 9: Now we had a Congressional Review Act resolution.

530
00:27:36,000 --> 00:27:39,399
Speaker 10: In the Senate that got eighteen Democrats and one independent

531
00:27:39,440 --> 00:27:43,000
Speaker 10: that joined. We have a same resolution voted on in

532
00:27:43,000 --> 00:27:45,560
Speaker 10: the House next week. I think that that is starting

533
00:27:45,560 --> 00:27:48,600
Speaker 10: to build very bipartisan momentum that undoes the work of

534
00:27:48,640 --> 00:27:51,639
Speaker 10: the past. We're seeing work on stable coin bills, new

535
00:27:51,720 --> 00:27:55,480
Speaker 10: drafts introduced, we have markups and hearings, next week. I

536
00:27:55,520 --> 00:27:58,000
Speaker 10: think that will continue to build that momentum, and we

537
00:27:58,000 --> 00:28:00,879
Speaker 10: could see that as early as this and then I

538
00:28:00,920 --> 00:28:03,400
Speaker 10: think it's very likely that we could get market structure

539
00:28:03,400 --> 00:28:05,399
Speaker 10: done by the end of the year. I think that

540
00:28:05,400 --> 00:28:07,800
Speaker 10: there are a lot of discussions going on there, especially

541
00:28:07,880 --> 00:28:09,560
Speaker 10: between the House and the Senate. I have never seen

542
00:28:09,600 --> 00:28:13,119
Speaker 10: so much collaboration at a staff level and on a

543
00:28:13,119 --> 00:28:15,320
Speaker 10: member level between the House and the Senate. So I

544
00:28:15,359 --> 00:28:18,040
Speaker 10: think they're serious about getting this done. And we're really

545
00:28:18,080 --> 00:28:23,560
Speaker 10: excited at the Blockchain Association for the unique moment we

546
00:28:23,600 --> 00:28:26,760
Speaker 10: find ourselves in, and we're ready to be a partner

547
00:28:26,840 --> 00:28:29,240
Speaker 10: as policymakers are exploring ideas.

548
00:28:29,119 --> 00:28:31,520
Speaker 3: Dance cards pretty full on Capitol Hill right now, as

549
00:28:31,560 --> 00:28:35,120
Speaker 3: we stare down the pipe of a potential government shut down,

550
00:28:35,160 --> 00:28:38,720
Speaker 3: this massive reconciliation project. They're talking about Trump tax cuts

551
00:28:39,160 --> 00:28:41,120
Speaker 3: and so forth. What can Donald Trump say today? He's

552
00:28:41,160 --> 00:28:42,840
Speaker 3: going to speak, Well, he's scheduled to an hour and

553
00:28:42,880 --> 00:28:46,120
Speaker 3: a half from now at the Crypto Summit to hasten

554
00:28:46,800 --> 00:28:50,200
Speaker 3: and put some urgency underneath this effort on Capitol Hill.

555
00:28:50,480 --> 00:28:50,640
Speaker 5: Yeah.

556
00:28:50,680 --> 00:28:53,280
Speaker 10: Well, I mean, I think highlighting it as a priority

557
00:28:53,560 --> 00:28:56,000
Speaker 10: is really sends a signal to Congress that this is

558
00:28:56,000 --> 00:28:59,080
Speaker 10: something he wants to get done. I'm hopeful that who

559
00:28:59,120 --> 00:29:03,120
Speaker 10: will speak to a partisan audience, because whatever regulatory framework

560
00:29:03,120 --> 00:29:05,640
Speaker 10: gets put in place, we want it to be lasting.

561
00:29:05,680 --> 00:29:07,440
Speaker 10: We don't want it to be something that changes every

562
00:29:07,480 --> 00:29:10,480
Speaker 10: time there's a change in power. And so I'm hoping

563
00:29:10,520 --> 00:29:13,400
Speaker 10: that he will speak to a bipartisan audience. And I

564
00:29:13,440 --> 00:29:16,920
Speaker 10: think that, you know, with his leadership and with the

565
00:29:17,760 --> 00:29:20,360
Speaker 10: folks in the industry around the room being helpful in

566
00:29:20,400 --> 00:29:23,400
Speaker 10: the process, like, I think we can get there. And

567
00:29:23,480 --> 00:29:25,600
Speaker 10: so this is in you know, the US interest. I

568
00:29:25,600 --> 00:29:29,360
Speaker 10: don't think innovation is something that is a more Republican

569
00:29:29,400 --> 00:29:31,840
Speaker 10: and more democrat, and so I'm hoping he shows some

570
00:29:31,920 --> 00:29:34,600
Speaker 10: leadership and tries to bring people together. I think that

571
00:29:34,840 --> 00:29:36,440
Speaker 10: you know, stands in contrast to some of the other

572
00:29:36,480 --> 00:29:38,320
Speaker 10: issues and debates going on, and so I think it's

573
00:29:38,400 --> 00:29:40,400
Speaker 10: nice to have something where everyone can be on the

574
00:29:40,400 --> 00:29:40,960
Speaker 10: same team.

575
00:29:41,400 --> 00:29:43,719
Speaker 2: Well, it was great to have you here on our

576
00:29:43,760 --> 00:29:45,960
Speaker 2: team for at least yeah today. Thank you so much

577
00:29:46,000 --> 00:29:48,880
Speaker 2: for joining us in the studio. Kristen Smith, CEO of

578
00:29:48,880 --> 00:29:51,800
Speaker 2: the Blockchain Association with us on Bloomberg TV and radios,

579
00:29:51,960 --> 00:29:53,280
Speaker 2: Thank you so much. Of course, a lot of the

580
00:29:53,280 --> 00:29:55,480
Speaker 2: members of the Blockchain Association are at the White House

581
00:29:55,520 --> 00:29:57,880
Speaker 2: right now as we speak. The gathering was slated to

582
00:29:57,920 --> 00:30:01,640
Speaker 2: begin around one thirty today. Whole host of CEOs there

583
00:30:01,680 --> 00:30:03,160
Speaker 2: at the White House to plead their case. You know,

584
00:30:03,200 --> 00:30:05,640
Speaker 2: he's not going to be there, though former CEO used

585
00:30:05,640 --> 00:30:08,680
Speaker 2: to be the emissary to Washington, Sam Bankman Free he's

586
00:30:08,680 --> 00:30:11,520
Speaker 2: still looking for a pardon from President Trump. I wonder

587
00:30:11,520 --> 00:30:13,720
Speaker 2: if we don't hear anything come on in this speech today.

588
00:30:13,720 --> 00:30:15,920
Speaker 3: I wouldn't think that would be a headline, and we're

589
00:30:16,000 --> 00:30:18,040
Speaker 3: used to that around here. We'll be listening, of course,

590
00:30:18,080 --> 00:30:20,840
Speaker 3: when Donald Trump speaks three pm Eastern. They tell us

591
00:30:21,120 --> 00:30:23,320
Speaker 3: we'll let you know right here on the Fastest Show

592
00:30:23,360 --> 00:30:26,480
Speaker 3: in Politics with Kaylee Lines. I'm Joe Matthew. This is Bloomberg.

593
00:30:28,640 --> 00:30:32,120
Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch

594
00:30:32,160 --> 00:30:35,640
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

595
00:30:35,680 --> 00:30:38,720
Speaker 1: Cocklay and Android Auto with the Bloomberg Business app. You

596
00:30:38,760 --> 00:30:42,240
Speaker 1: can also listen live on Amazon Alexa from our flagship

597
00:30:42,280 --> 00:30:46,160
Speaker 1: New York station, Just say Alexa, play Bloomberg eleven thirty.

598
00:30:47,440 --> 00:30:47,640
Speaker 8: Hello.

599
00:30:47,760 --> 00:30:49,840
Speaker 3: We say that every Friday. What a week. We're doing

600
00:30:49,880 --> 00:30:51,880
Speaker 3: it again, and thank you for meeting us here at

601
00:30:51,920 --> 00:30:55,120
Speaker 3: the threshold of the weekend Jobs Day, showing some signs

602
00:30:55,120 --> 00:30:57,800
Speaker 3: of softening more people permanently out of work. Payrolls came

603
00:30:57,840 --> 00:30:59,680
Speaker 3: in a bit light one hundred and fifty one thousand

604
00:30:59,720 --> 00:31:02,800
Speaker 3: the s. It was for one hundred and sixty unemployment

605
00:31:02,840 --> 00:31:05,719
Speaker 3: four point one percent. We heard earlier today from one

606
00:31:05,760 --> 00:31:10,160
Speaker 3: of the President's closest economic advisors, Kevin Hassett, director of

607
00:31:10,160 --> 00:31:14,320
Speaker 3: the National Economic Council, on Bloomberg Surveillance, speaking with John Ferroll.

608
00:31:14,360 --> 00:31:17,320
Speaker 5: Here's what he said, We're preparing you for news like

609
00:31:17,360 --> 00:31:19,480
Speaker 5: today the great Jobs Report. I think one of the

610
00:31:19,520 --> 00:31:21,880
Speaker 5: things that you see if you look at it is

611
00:31:21,920 --> 00:31:24,360
Speaker 5: exactly the objectives of the Trump administration, of the fact

612
00:31:24,360 --> 00:31:25,600
Speaker 5: that even though we got a lot of work to do,

613
00:31:25,600 --> 00:31:27,400
Speaker 5: we got to pass the tax cuts and get this

614
00:31:27,760 --> 00:31:31,680
Speaker 5: deregulation train rolling, is that we're going to be reducing

615
00:31:31,880 --> 00:31:37,160
Speaker 5: government employment and reducing government spending and increasing manufacturing employment.

616
00:31:37,320 --> 00:31:38,960
Speaker 5: And as you can see in the Jobs report today,

617
00:31:38,960 --> 00:31:42,240
Speaker 5: you're already seeing a pivot in that direction. That's a

618
00:31:42,320 --> 00:31:45,520
Speaker 5: huge one. So last year, one hundred and eleven thousand

619
00:31:45,600 --> 00:31:49,280
Speaker 5: manufacturing jobs are destroyed by the Biden administration's policies, and

620
00:31:49,400 --> 00:31:51,760
Speaker 5: in this month alone, in February, we got ten thousand

621
00:31:51,760 --> 00:31:55,160
Speaker 5: manufacturing jobs and nine thousand auto jobs. And as you know,

622
00:31:55,200 --> 00:31:58,920
Speaker 5: those auto jobs are here, they're going to be paid well,

623
00:31:58,920 --> 00:32:01,000
Speaker 5: and they're here for a good long time. And that's

624
00:32:01,040 --> 00:32:03,360
Speaker 5: really just sort of a down payment on the Trump

625
00:32:03,400 --> 00:32:05,800
Speaker 5: policies that get a skyrocket into a golden ages as

626
00:32:05,880 --> 00:32:06,960
Speaker 5: we get the tax cuts passed.

627
00:32:07,160 --> 00:32:08,760
Speaker 11: So, Kevin, I hope you're right. But what I've heard

628
00:32:08,800 --> 00:32:11,040
Speaker 11: over the last week or so regarded the economic data,

629
00:32:11,120 --> 00:32:13,719
Speaker 11: when I spoke to the COMMAS secretary Howard Lutnik, Secretary

630
00:32:13,800 --> 00:32:17,160
Speaker 11: Lutnik said that this was Biden data over the last month,

631
00:32:17,160 --> 00:32:19,200
Speaker 11: that this was not Trump data. So if it's good,

632
00:32:19,200 --> 00:32:21,000
Speaker 11: if it's is it Trump data? And if it's bad,

633
00:32:21,120 --> 00:32:22,800
Speaker 11: is it Biden data? How does this work?

634
00:32:23,440 --> 00:32:27,080
Speaker 5: Let's go into the specifics. So what specifically has happened

635
00:32:27,440 --> 00:32:31,120
Speaker 5: is President Trump has made a big effort, along with

636
00:32:31,160 --> 00:32:33,880
Speaker 5: Elon Musk, to find workers that are unproductive and to

637
00:32:33,960 --> 00:32:36,000
Speaker 5: get them off the payrolls. And so we see government

638
00:32:36,000 --> 00:32:40,719
Speaker 5: spending going down. So is that a Trump effect? Yes, Manufacturing, well, manufacturing,

639
00:32:40,720 --> 00:32:43,800
Speaker 5: a job creation in the auto sector is happening because

640
00:32:43,800 --> 00:32:46,560
Speaker 5: people are anxious about future tariffs and they're already on

641
00:32:46,720 --> 00:32:49,560
Speaker 5: shoring production. Is that a Trump effect? Yes, but it's

642
00:32:49,600 --> 00:32:52,880
Speaker 5: true that we've inherited a lot of terrible Biden policies.

643
00:32:52,960 --> 00:32:55,480
Speaker 5: They want to get expensing gone and so on, and

644
00:32:55,520 --> 00:32:57,840
Speaker 5: that's bad for capital formation. We're going to fix that.

645
00:32:58,000 --> 00:33:00,120
Speaker 5: So we haven't fixed everything, but already the thing that

646
00:33:00,120 --> 00:33:01,400
Speaker 5: we're fixing you can see in the data, and I

647
00:33:01,400 --> 00:33:02,680
Speaker 5: think it's really quite remarkable.

648
00:33:02,720 --> 00:33:04,720
Speaker 11: Well, let's talk about the manufacturing data as well. We

649
00:33:04,800 --> 00:33:06,560
Speaker 11: hand that over the past few weeks. You're familiar with

650
00:33:06,800 --> 00:33:09,800
Speaker 11: ICM manufacturing. You're familiar, I'm sure with the respondents in

651
00:33:09,840 --> 00:33:11,560
Speaker 11: the surveys, and this is what they had to say.

652
00:33:11,880 --> 00:33:15,440
Speaker 11: The uncertainty about tariff keeps us cautious on spending. Customers

653
00:33:15,480 --> 00:33:17,800
Speaker 11: are pausing on new orders as a result of uncertainty

654
00:33:17,840 --> 00:33:20,920
Speaker 11: regarding tariffs. The incoming tarifts are causing our products to

655
00:33:21,000 --> 00:33:24,920
Speaker 11: increase in price. Are you hearing the same message from businesses?

656
00:33:25,040 --> 00:33:26,280
Speaker 11: Are you hearing something different?

657
00:33:27,360 --> 00:33:27,520
Speaker 6: Yeah?

658
00:33:27,640 --> 00:33:30,280
Speaker 5: What I'm hearing is a massive amount of onshoing. We've

659
00:33:30,320 --> 00:33:33,040
Speaker 5: got more than what a trillion and a half dollars

660
00:33:33,040 --> 00:33:36,040
Speaker 5: of commitments for new factories, and you're already seeing it

661
00:33:36,200 --> 00:33:38,480
Speaker 5: in the auto data. I've mean, think about it, how

662
00:33:38,520 --> 00:33:41,000
Speaker 5: hard it is to create a job in the auto sector.

663
00:33:41,040 --> 00:33:43,360
Speaker 5: To have ten thousand in a month means that the

664
00:33:43,760 --> 00:33:46,120
Speaker 5: attempt to ensure activity, to make it so that the

665
00:33:46,200 --> 00:33:48,760
Speaker 5: jobs are created here and the money isn't just you know,

666
00:33:48,800 --> 00:33:51,840
Speaker 5: fritter away to foreign countries, is exactly what President Trump's

667
00:33:51,840 --> 00:33:53,680
Speaker 5: objective is. And it's right there in the data.

668
00:33:53,720 --> 00:33:53,840
Speaker 4: Now.

669
00:33:53,840 --> 00:33:56,120
Speaker 5: I know that it's one month and the data could

670
00:33:56,120 --> 00:33:58,280
Speaker 5: blip around, but I was really really stunned. And the

671
00:33:58,280 --> 00:34:00,280
Speaker 5: other thing I was stunned about, which I know you

672
00:34:00,320 --> 00:34:03,200
Speaker 5: guys follow this a lot. In fact, Anna Wong at

673
00:34:03,200 --> 00:34:05,640
Speaker 5: Bloomberg is one of the best young economists I know

674
00:34:05,640 --> 00:34:07,240
Speaker 5: it looking at the numbers is that it was a

675
00:34:07,280 --> 00:34:09,680
Speaker 5: really bad flu season. And so when I adjusted for

676
00:34:09,760 --> 00:34:11,400
Speaker 5: the flu, what I thought this number was going to be,

677
00:34:11,400 --> 00:34:13,000
Speaker 5: it was way below the number that we got, and

678
00:34:13,120 --> 00:34:15,480
Speaker 5: so I was very positively surprised by this number once

679
00:34:15,520 --> 00:34:17,080
Speaker 5: you adjust for flu, and then you see that all

680
00:34:17,120 --> 00:34:19,840
Speaker 5: the jobs, all these jobs that are created in manufacturing.

681
00:34:20,239 --> 00:34:22,360
Speaker 5: And finally, if you go back and look at the

682
00:34:22,400 --> 00:34:25,160
Speaker 5: Biden job record mid flow, the fact that they revised

683
00:34:25,160 --> 00:34:27,480
Speaker 5: it down a million jobs last year. Don't forget that

684
00:34:27,520 --> 00:34:29,920
Speaker 5: a lot of the job creation was government workers. It

685
00:34:29,920 --> 00:34:31,959
Speaker 5: was government workers. About a quarter of the job creation

686
00:34:32,080 --> 00:34:34,360
Speaker 5: over the last two years was an increase in government workers.

687
00:34:34,520 --> 00:34:36,600
Speaker 5: And so if you take those out and then still

688
00:34:36,600 --> 00:34:40,040
Speaker 5: have a strong job's number, that's a great, great economic outcome.

689
00:34:41,360 --> 00:34:44,120
Speaker 3: Kevin Hassett at the White House earlier today on Bloomberg

690
00:34:44,160 --> 00:34:47,920
Speaker 3: TV and Radio. I'm Joe Matthew alongside Kaylee Lines in

691
00:34:48,080 --> 00:34:51,600
Speaker 3: Washington watching Wall Street off. The job's news didn't start well, Kaylee,

692
00:34:51,600 --> 00:34:54,840
Speaker 3: but we have turned higher after the Chair of the

693
00:34:54,880 --> 00:34:58,600
Speaker 3: Fed spoke earlier, j Powell seemed to soothe the markets

694
00:34:58,640 --> 00:35:02,480
Speaker 3: into changing course here though bitcoin is still lower on

695
00:35:02,520 --> 00:35:03,839
Speaker 3: this crypto summit thing.

696
00:35:04,000 --> 00:35:06,160
Speaker 2: Yeah, we're expecting to hear from President Trump at the

697
00:35:06,160 --> 00:35:08,799
Speaker 2: crypto summit at three pm Eastern at least that's when

698
00:35:09,080 --> 00:35:12,280
Speaker 2: it's scheduled, though he's also scheduled to sign executive orders

699
00:35:12,360 --> 00:35:15,280
Speaker 2: just half an hour before that at two thirty pm

700
00:35:15,280 --> 00:35:17,279
Speaker 2: Eastern time, And we already actually heard from him in

701
00:35:17,320 --> 00:35:19,800
Speaker 2: the Oval Office today, so he spoke to reporters suggesting

702
00:35:19,800 --> 00:35:22,279
Speaker 2: one of those executive orders he will be signing will

703
00:35:22,280 --> 00:35:26,920
Speaker 2: restrict eligibility for government run student loan forgiveness for individuals

704
00:35:26,920 --> 00:35:32,040
Speaker 2: who work for nonprofits that clash with the administration's immigration policies.

705
00:35:32,120 --> 00:35:35,319
Speaker 2: This is not necessarily, though, the education oriented executive order

706
00:35:35,320 --> 00:35:37,560
Speaker 2: we thought we might be getting from the President this week,

707
00:35:37,600 --> 00:35:40,080
Speaker 2: as there had been reporting that he could be signing

708
00:35:40,160 --> 00:35:43,000
Speaker 2: an EO to dismantle the Department of Education. The White

709
00:35:43,040 --> 00:35:45,680
Speaker 2: House has suggested though, that at least on timing, that

710
00:35:45,800 --> 00:35:46,759
Speaker 2: is fake news for now.

711
00:35:47,280 --> 00:35:49,840
Speaker 3: Yeah, that was the tweet or the ex post I

712
00:35:49,840 --> 00:35:52,839
Speaker 3: guess from the Press secretary yesterday. Some folks do again

713
00:35:52,920 --> 00:35:54,600
Speaker 3: to your point, though, think it's just a matter of

714
00:35:54,640 --> 00:35:57,520
Speaker 3: when that happens. President's been pretty clear about his intentions.

715
00:35:57,680 --> 00:36:00,680
Speaker 2: Yeah, including the new Secretary, Linda mcmahonson that her job

716
00:36:00,719 --> 00:36:04,320
Speaker 2: basically is to get herself out of a job eventually.

717
00:36:04,360 --> 00:36:05,799
Speaker 2: But we want to go to someone who used to

718
00:36:05,800 --> 00:36:07,480
Speaker 2: hold that job now, who I'm pleased to say is

719
00:36:07,520 --> 00:36:10,240
Speaker 2: joining us here on Bloomberg TV and Radio. Former Education

720
00:36:10,360 --> 00:36:14,080
Speaker 2: Secretary Margaret Spellings during the Bush administration, who is now

721
00:36:14,080 --> 00:36:18,360
Speaker 2: president and CEO of the Bipartisan Policy Center. Madame Secretary,

722
00:36:18,400 --> 00:36:20,799
Speaker 2: thank you so much for your time. If we could

723
00:36:20,800 --> 00:36:23,600
Speaker 2: just begin with what has been a very clear effort

724
00:36:23,640 --> 00:36:26,280
Speaker 2: on the part of Donald Trump to work toward getting

725
00:36:26,360 --> 00:36:29,560
Speaker 2: rid of the Department of Education. We've already seen Linda McMahon,

726
00:36:29,640 --> 00:36:32,640
Speaker 2: for example, offering buyouts to employees, some of which have

727
00:36:32,760 --> 00:36:35,359
Speaker 2: been accepted. What would the immediate impact be, even if

728
00:36:35,360 --> 00:36:38,560
Speaker 2: this is a slow unraveling on education in America.

729
00:36:40,320 --> 00:36:42,399
Speaker 12: Well, and I'm glad this is a segment that comes

730
00:36:42,440 --> 00:36:45,400
Speaker 12: right after a discussion of jobs and the job's numbers,

731
00:36:45,440 --> 00:36:48,480
Speaker 12: because we can't talk about jobs and good jobs without

732
00:36:48,520 --> 00:36:52,280
Speaker 12: getting quickly to education and the quality of the American worker.

733
00:36:52,719 --> 00:36:55,880
Speaker 12: And that's what we're focused on at the Bipartisan Policy Center.

734
00:36:55,920 --> 00:36:58,440
Speaker 12: And you know what I'm hearing is, yes, there's a

735
00:36:58,520 --> 00:37:03,520
Speaker 12: discussion around how federal programs should be deployed, but not

736
00:37:03,640 --> 00:37:07,799
Speaker 12: a question about many of those federal programs. Obviously, there's

737
00:37:07,880 --> 00:37:11,839
Speaker 12: still strong support for the title programs on the K

738
00:37:11,880 --> 00:37:15,400
Speaker 12: twelve side that support low income and special ed students.

739
00:37:15,640 --> 00:37:19,840
Speaker 12: They're still support for financial aid for higher ed students,

740
00:37:19,840 --> 00:37:21,759
Speaker 12: although we ought to be smarter about how we do

741
00:37:21,840 --> 00:37:24,640
Speaker 12: that in connecting it to the needs of the workforce.

742
00:37:25,160 --> 00:37:27,920
Speaker 12: But it's basically, how are we going to organize and

743
00:37:28,000 --> 00:37:30,759
Speaker 12: oversee the federal role? And so are there efficiencies to

744
00:37:30,800 --> 00:37:35,160
Speaker 12: be gained. Heck yes, and I'm looking forward to working

745
00:37:35,200 --> 00:37:38,759
Speaker 12: with Secretary McMahon and her team to talk about the

746
00:37:38,760 --> 00:37:41,640
Speaker 12: best ways to do that. It has grown a good

747
00:37:41,640 --> 00:37:45,359
Speaker 12: bit over time the federal workforces has been said, and

748
00:37:45,400 --> 00:37:47,279
Speaker 12: how are we smarter about how to do that?

749
00:37:49,320 --> 00:37:53,040
Speaker 3: We heard from Donald Trump on this secretary, and we've

750
00:37:53,040 --> 00:37:55,080
Speaker 3: heard him speak a couple of times. I'd like to

751
00:37:55,120 --> 00:37:59,160
Speaker 3: just go back, if we could, to the fourth of February.

752
00:37:59,480 --> 00:38:02,000
Speaker 3: This is Donald Trump in the Oval Office when he

753
00:38:02,080 --> 00:38:07,000
Speaker 3: was asked about his intentions here to basically eliminate the

754
00:38:07,000 --> 00:38:10,160
Speaker 3: Department of Education. Lenda McMahon had not yet been confirmed.

755
00:38:10,200 --> 00:38:12,279
Speaker 3: Here's what that exchange sounded like.

756
00:38:13,200 --> 00:38:16,600
Speaker 7: I told Linda, I hope you do a great job

757
00:38:16,640 --> 00:38:19,440
Speaker 7: and put yourself out of a job. I want her

758
00:38:19,440 --> 00:38:21,480
Speaker 7: to put herself out of a job. We're ranked at

759
00:38:21,480 --> 00:38:23,600
Speaker 7: the bottom of the list. We're ranked very badly.

760
00:38:24,400 --> 00:38:26,280
Speaker 13: And what I want to do is let the States

761
00:38:26,400 --> 00:38:29,759
Speaker 13: run schools. I believe strongly in school choice, but in

762
00:38:29,760 --> 00:38:32,320
Speaker 13: addition to that, I want the States to run schools,

763
00:38:32,400 --> 00:38:34,959
Speaker 13: and I want Linda to put herself out of a job.

764
00:38:36,320 --> 00:38:38,799
Speaker 3: Put herself out of a job. Margaret Spellings does that

765
00:38:38,880 --> 00:38:40,520
Speaker 3: sound like somebody you can work with.

766
00:38:42,120 --> 00:38:45,360
Speaker 12: Well, you know, states do run schools. Most of the

767
00:38:45,400 --> 00:38:48,560
Speaker 12: money obviously comes from states and local school districts. I

768
00:38:48,600 --> 00:38:53,080
Speaker 12: think Americans and President Trump obviously are rightly frustrated with

769
00:38:53,120 --> 00:38:56,400
Speaker 12: the quality of education in America today, and so what

770
00:38:56,480 --> 00:38:59,400
Speaker 12: we need to decide is, you know, where is the

771
00:38:59,480 --> 00:39:04,360
Speaker 12: role around accountability and transparency for achievement for federal funding

772
00:39:04,400 --> 00:39:07,400
Speaker 12: for the investments we do make and the outcomes that

773
00:39:07,480 --> 00:39:10,080
Speaker 12: states and local school districts are getting. And we can

774
00:39:10,120 --> 00:39:12,680
Speaker 12: certainly do a better job of doing that. There's been

775
00:39:12,719 --> 00:39:16,880
Speaker 12: a lot of discussion around authority for governors to being

776
00:39:16,920 --> 00:39:19,840
Speaker 12: more involved in some of those funding decisions about the

777
00:39:19,960 --> 00:39:22,319
Speaker 12: use of federal aid. But sure, I mean, are there

778
00:39:22,360 --> 00:39:25,040
Speaker 12: parts of the Department of Education that might go elsewhere,

779
00:39:25,680 --> 00:39:31,120
Speaker 12: might be managed better elsewhere. Possibly does it make a

780
00:39:31,120 --> 00:39:34,400
Speaker 12: lot of sense for school districts and universities to interface

781
00:39:34,440 --> 00:39:37,520
Speaker 12: with a multitude of federal agencies or just one. I mean,

782
00:39:37,560 --> 00:39:41,840
Speaker 12: I think she is an experienced businesswoman, she has experience

783
00:39:41,880 --> 00:39:43,880
Speaker 12: in the federal government, and I think she's going to

784
00:39:43,920 --> 00:39:48,400
Speaker 12: do President Trump some yesterday a good scalpel job on

785
00:39:48,840 --> 00:39:51,319
Speaker 12: looking at what can be approved over there. We don't

786
00:39:51,320 --> 00:39:54,720
Speaker 12: want to ship fat programs just around the federal government.

787
00:39:54,760 --> 00:39:57,279
Speaker 12: We need to have them run efficiently wherever they end up.

788
00:39:57,600 --> 00:39:59,759
Speaker 12: And obviously the Congress is going to have the last

789
00:39:59,760 --> 00:40:01,359
Speaker 12: onl on much of this.

790
00:40:02,600 --> 00:40:04,799
Speaker 2: Well, that's exactly where I wanted to go next. We

791
00:40:04,840 --> 00:40:07,239
Speaker 2: actually spoke with a Congressman, Ryan mackenzie, who sits on

792
00:40:07,239 --> 00:40:10,480
Speaker 2: the Education Committee, yesterday, who told us this has to

793
00:40:10,520 --> 00:40:12,719
Speaker 2: go through Congress. This can't be up to the executive

794
00:40:12,719 --> 00:40:16,600
Speaker 2: branch alone, whether it is drastic changes potentially to the

795
00:40:16,600 --> 00:40:20,120
Speaker 2: Department of Education or other agencies that we have seen

796
00:40:20,160 --> 00:40:23,239
Speaker 2: the Department of Government efficiency trying to pursue an end

797
00:40:23,239 --> 00:40:27,319
Speaker 2: to USAID, the CFPB, for example. Do you see Congressional

798
00:40:27,360 --> 00:40:30,040
Speaker 2: appetite to actually partake in that activity or would you

799
00:40:30,080 --> 00:40:32,800
Speaker 2: anticipate in them asking you to put that Bipartisan Policy

800
00:40:32,880 --> 00:40:35,759
Speaker 2: Center hat on right now that there might be some pushback.

801
00:40:37,000 --> 00:40:39,200
Speaker 12: Oh, I think there'll absolutely be pushed back on this

802
00:40:39,239 --> 00:40:43,840
Speaker 12: and everything else. I mean that modified that can describe anything,

803
00:40:44,600 --> 00:40:47,600
Speaker 12: but yeah, absolutely, the Congress is going to have their

804
00:40:47,719 --> 00:40:51,480
Speaker 12: say over this, and I think Secretary McMahon is eager

805
00:40:51,560 --> 00:40:53,839
Speaker 12: to engage with them. That's certainly what she told them

806
00:40:54,000 --> 00:40:58,600
Speaker 12: during her confirmation hearing and do that in a smart way.

807
00:40:58,640 --> 00:41:02,359
Speaker 12: You know, my hope is that we have to keep

808
00:41:02,400 --> 00:41:04,480
Speaker 12: the main thing the main thing, and the main thing

809
00:41:04,600 --> 00:41:08,120
Speaker 12: that we are all concerned about is the quality of

810
00:41:08,960 --> 00:41:11,640
Speaker 12: reading and math education in our country. We got the

811
00:41:11,680 --> 00:41:16,520
Speaker 12: report card a few weeks ago, and it's shocking. It's

812
00:41:17,440 --> 00:41:19,560
Speaker 12: something we all ought to be up in arms about.

813
00:41:19,640 --> 00:41:22,160
Speaker 12: And so rather than talk about, you know, the movement

814
00:41:22,160 --> 00:41:25,440
Speaker 12: of the deck chairs as the dominant matter, and we

815
00:41:25,480 --> 00:41:28,280
Speaker 12: need to be talking about how we best teach children

816
00:41:28,360 --> 00:41:31,360
Speaker 12: to read and do math so that they're prepared to

817
00:41:32,040 --> 00:41:33,680
Speaker 12: enter the workforce and be successful.

818
00:41:34,880 --> 00:41:38,319
Speaker 3: Secretary, you run the Bipartisan Policy Center, bipartisan being the

819
00:41:38,400 --> 00:41:42,160
Speaker 3: key word in this political climate, this partisan climate that

820
00:41:42,200 --> 00:41:44,480
Speaker 3: we're living in right now in Washington, d C. Is

821
00:41:44,520 --> 00:41:45,640
Speaker 3: this mission impossible?

822
00:41:46,880 --> 00:41:49,880
Speaker 12: No, it is not. And there's lots of bipartisan energy

823
00:41:49,920 --> 00:41:52,600
Speaker 12: that's going on and will go on and must go

824
00:41:52,719 --> 00:41:55,319
Speaker 12: on before deals are done. At the end of the day,

825
00:41:56,000 --> 00:41:58,560
Speaker 12: we as you know, we have very close margins in

826
00:41:58,600 --> 00:42:02,000
Speaker 12: the House and the Senate. You know, it'll take sixty

827
00:42:02,080 --> 00:42:05,480
Speaker 12: votes to abolish the Department of Education. I don't necessarily

828
00:42:05,520 --> 00:42:09,120
Speaker 12: see that happening. And so being smart about giving a

829
00:42:09,160 --> 00:42:12,200
Speaker 12: plan about how to run the thing better. Nobody that

830
00:42:12,280 --> 00:42:16,880
Speaker 12: I engage with is in supportive waste, fraud, and abuse.

831
00:42:17,680 --> 00:42:20,600
Speaker 12: So yeah, you bet. We're not going to extend the

832
00:42:20,600 --> 00:42:22,439
Speaker 12: tax cuts, We're not going to raise the debt ceiling.

833
00:42:22,520 --> 00:42:24,880
Speaker 12: We're not going to keep the government open, you know,

834
00:42:25,000 --> 00:42:28,640
Speaker 12: over time without bipartisan support for those things.

835
00:42:29,960 --> 00:42:32,239
Speaker 2: Well, it's not just a question of the government being

836
00:42:32,280 --> 00:42:34,320
Speaker 2: open over time. It's a question of if the government's

837
00:42:34,360 --> 00:42:36,399
Speaker 2: going to stay open beyond a week from today, when

838
00:42:36,400 --> 00:42:40,160
Speaker 2: the deadline is for funding to come through Congress. Are

839
00:42:40,160 --> 00:42:43,760
Speaker 2: you are you ultimately expecting that there will be bipartisanship

840
00:42:43,800 --> 00:42:46,000
Speaker 2: in that effort, because right now Democrats are signaling, at

841
00:42:46,040 --> 00:42:47,799
Speaker 2: least in the House, they are not willing at this

842
00:42:47,880 --> 00:42:49,080
Speaker 2: time to participate in that.

843
00:42:49,040 --> 00:42:54,080
Speaker 12: Effort, and we may well have a shutdown. I certainly

844
00:42:54,080 --> 00:42:56,720
Speaker 12: wouldn't want to make any wagers about that either way.

845
00:42:57,080 --> 00:43:00,480
Speaker 12: What I'm saying is, over the long haul, these big

846
00:43:00,520 --> 00:43:04,759
Speaker 12: policies of closing the Department of Education or extending the

847
00:43:04,800 --> 00:43:09,239
Speaker 12: tax cuts will ultimately come down to bipartisan agreements.

848
00:43:11,200 --> 00:43:13,760
Speaker 3: Secretary, it's great to have you on. Margaret Spellings, President's

849
00:43:13,760 --> 00:43:17,520
Speaker 3: CEO Bipartisan Policy Center, We appreciate the conversation. Come back

850
00:43:17,560 --> 00:43:24,040
Speaker 3: and talk to us again. Thanks for listening to the

851
00:43:24,080 --> 00:43:27,440
Speaker 3: Balance of Power podcast. Make sure to subscribe if you

852
00:43:27,480 --> 00:43:30,920
Speaker 3: haven't already, at Apple, Spotify, or wherever you get your podcasts,

853
00:43:31,360 --> 00:43:33,840
Speaker 3: and you can find us live every weekday from Washington,

854
00:43:33,920 --> 00:43:36,960
Speaker 3: DC at noontime Eastern at Bloomberg dot com.