WEBVTT - US Core CPI Remains Firm for Third Straight Month With 0.3% Gain 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.319 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.880 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:27.200 --> 0:00:29.600 Well, the world's biggest bond market boosted bets at the 0:00:29.600 --> 0:00:33.280 Fed will indeed slash rates again next month after inline 0:00:33.320 --> 0:00:36.720 inflation data, shorter dated treasuries outperforming. You saw that yield 0:00:36.760 --> 0:00:39.280 on to your notes dropping from the highest since July. 0:00:39.720 --> 0:00:42.680 Swap traders boosted to about eighty percent, maybe even more. 0:00:42.960 --> 0:00:44.879 The probability that the Fed will cut rates again on 0:00:44.920 --> 0:00:48.040 December eighteenth. Bottom line, it's a different trade than it 0:00:48.080 --> 0:00:48.960 was a couple of days ago. 0:00:49.080 --> 0:00:51.879 Yeah, it certainly is. That's the backdrop for Bloomberg's conversation 0:00:51.920 --> 0:00:54.520 with feder Reserve at Bank of Minneapolis President Neil Cashcari 0:00:54.640 --> 0:00:58.200 leading that chat Bloomberg News International Economics and Policy correspondent 0:00:58.320 --> 0:01:00.600 Michael McKee, who joins us here in the Bloomberg at 0:01:00.640 --> 0:01:04.280 Business Week Studio. Mike first up the CPI print today 0:01:04.400 --> 0:01:07.280 in line, as Carol mentioned, with Wall Street estimates. As 0:01:07.280 --> 0:01:10.320 you dug into the details, anything in there that stood out. 0:01:11.520 --> 0:01:15.399 I think the fact that there were many categories that 0:01:15.520 --> 0:01:17.640 did see pricing increases, and some of the ones that 0:01:17.680 --> 0:01:20.720 have been problems before are problems again, like used cars 0:01:21.360 --> 0:01:24.640 and housing is still not going down. It actually went 0:01:24.760 --> 0:01:27.559 up in price. The one area is the two areas 0:01:27.560 --> 0:01:31.039 that we did see some improvement in were food up 0:01:31.240 --> 0:01:33.640 just a tenth of a percent the same as last month, 0:01:33.760 --> 0:01:37.480 and gasoline, which was down. And we all know that. 0:01:39.120 --> 0:01:41.479 The other thing that stood out to me was I'm 0:01:41.520 --> 0:01:45.280 sure Kamala Harris wishes this report had come out before 0:01:45.920 --> 0:01:49.320 the presidential election because the price of eggs went down 0:01:49.480 --> 0:01:53.480 six point seven percent, and she's been criticized heavily for 0:01:53.520 --> 0:01:54.160 the price of eggs. 0:01:54.160 --> 0:01:55.760 I don't know if that would have made a difference, Mike. 0:01:56.720 --> 0:01:57.800 I don't think the election. 0:01:57.640 --> 0:02:00.880 Came down to just that. But I see what you're doing. Well, 0:02:00.880 --> 0:02:03.000 wait a minute, So when it comes to inflation, I 0:02:03.040 --> 0:02:05.640 do feel like, you know, we're hearing some mixed messages 0:02:05.760 --> 0:02:07.200 or some you know, you've a lot of stories on 0:02:07.240 --> 0:02:11.640 the Bloomberg that there are people concerned about inflation reigniting, 0:02:11.720 --> 0:02:14.400 and especially thinking about a Trump administration and it's pro 0:02:14.440 --> 0:02:15.320 growth policies. 0:02:15.639 --> 0:02:19.400 Well, there's two things to watch. One is that what 0:02:19.440 --> 0:02:21.920 you're talking about there with the Trump administration and the 0:02:21.960 --> 0:02:25.840 tariffs and tax policies. Saint Louis FED President Alberto Muslim 0:02:25.960 --> 0:02:28.960 was just asked about those and he said, I can't 0:02:29.000 --> 0:02:32.400 comment on anything that the new administration is going to do. 0:02:32.639 --> 0:02:34.919 But if you look at a textbook, it will tell 0:02:34.960 --> 0:02:43.480 you that tariffs raise prices and can create inflation. And 0:02:43.919 --> 0:02:48.000 Neil cashcarri had roughly the same views today. So the 0:02:48.040 --> 0:02:50.040 FED is going to be watching that. But the thing 0:02:50.080 --> 0:02:54.360 that has really got for the moment Wall Street's attention 0:02:54.560 --> 0:02:58.440 and some economist's attention is we've been making progress on inflation, 0:02:58.840 --> 0:03:00.919 but are we going to be stuck where we are? 0:03:01.480 --> 0:03:05.920 With the headline inflation at about two point four percent, 0:03:06.320 --> 0:03:09.280 you know, not two percent, and certainly core inflation well 0:03:09.280 --> 0:03:11.880 above that right now on a CPI basis three point 0:03:11.919 --> 0:03:14.520 three percent. Now, those numbers are lower for the PCEE 0:03:14.760 --> 0:03:18.320 that the Fed uses for its target, but it's still 0:03:18.360 --> 0:03:23.320 a question of have we stalled out and would that 0:03:23.760 --> 0:03:26.720 keep the Fed from cutting rates further because they need 0:03:26.760 --> 0:03:30.959 to keep the pressure on to keep pushing inflation lower. 0:03:31.440 --> 0:03:33.079 Hey, we're going to talk about your conversation with the 0:03:33.080 --> 0:03:35.080 ol Kashkari a little more in just a few minutes, 0:03:35.080 --> 0:03:36.720 but I want you to weigh in on this Department 0:03:36.720 --> 0:03:39.720 of Government Efficiency that's getting a lot of attention right now. 0:03:39.760 --> 0:03:43.160 Elon Musk Vivek Ramaswami are going to be co heads 0:03:43.520 --> 0:03:46.200 of this department. Must coming out on the X platform 0:03:46.240 --> 0:03:48.360 saying he wants this like running counter of how your 0:03:48.360 --> 0:03:54.400 tax dollars are wasted. Although previous presidencies and previous administrations 0:03:54.400 --> 0:03:57.760 haven't called this doge, this has been. 0:03:57.680 --> 0:04:00.480 Those points didn't exist, they didn't exist earlier. 0:04:00.800 --> 0:04:02.120 And this is my suspect. 0:04:02.200 --> 0:04:05.680 I suspect this acronym comes from maybe a commercial point 0:04:05.720 --> 0:04:09.120 of view on Elon Musk's side, but this is it 0:04:09.280 --> 0:04:14.720 is definitely not new. You go back to Theodore Roosevelt 0:04:14.880 --> 0:04:19.920 had a commission proposing new authority, followed by William Howard Taft, 0:04:20.640 --> 0:04:23.520 who also had a Commission on Government Efficiency that actually 0:04:23.560 --> 0:04:27.160 proposed and was enacted the first presidential budget. Presidents didn't 0:04:27.200 --> 0:04:30.359 submit budgets before, and so presidents were kind of in 0:04:30.400 --> 0:04:32.960 the driver's seat until the nineteen seventy four Budget Act 0:04:33.040 --> 0:04:37.159 created Congress's responsibility to pass the budget, which they never do. 0:04:37.800 --> 0:04:40.280 So you know, you can put that on the list. 0:04:40.400 --> 0:04:43.840 But you go all the way up through basically the 0:04:43.920 --> 0:04:50.120 George H. W. Bush administration, and literally Dwight Eisenhower had one, 0:04:50.279 --> 0:04:53.920 Franklin Roosevelt had two, while he had one and a 0:04:53.960 --> 0:04:57.120 half because Harry Truman took over the other the other half. 0:04:57.839 --> 0:05:00.640 And there was a commission under Hoover, there was commission 0:05:00.880 --> 0:05:03.919 under Coolidge. There were these commissions just get appointed by 0:05:04.000 --> 0:05:06.720 presidents and they all promise the same thing. We're going 0:05:06.760 --> 0:05:09.039 to make government work better for the American people. We're 0:05:09.040 --> 0:05:13.120 going to cut regulations, we're going to streamline activity. And 0:05:13.120 --> 0:05:16.440 they all come up with, you know, several hundred ideas 0:05:16.839 --> 0:05:19.880 and many of them get adopted, and yet here we 0:05:19.920 --> 0:05:23.240 are again. So you wonder how much success they can 0:05:23.320 --> 0:05:23.920 actually have. 0:05:24.440 --> 0:05:26.640 Yeah, I guess so, right, Like it's I mean, it's 0:05:26.880 --> 0:05:28.560 a huge task. I think a lot of people talk 0:05:28.600 --> 0:05:30.160 about though inefficiencies and government. 0:05:30.200 --> 0:05:32.080 So you do one, but it's it's not just getting 0:05:32.120 --> 0:05:34.039 rid of you know, these so called bureaucrats. It's not 0:05:34.080 --> 0:05:36.479 just firing people because that's actually very small portion. 0:05:36.600 --> 0:05:39.520 Well, that's that's a different effort too on the part 0:05:39.520 --> 0:05:41.599 of the Trump administration. He wants to be able to 0:05:41.640 --> 0:05:45.440 fire government officials who aren't loyal to him, and so 0:05:45.600 --> 0:05:49.080 that's this whole schedule F issue that's going to come up, 0:05:49.120 --> 0:05:52.680 where he tries to move these people from protected civil 0:05:52.720 --> 0:05:55.800 service jobs into fire at will jobs. 0:05:55.880 --> 0:05:58.440 But you do wonder what programs ultimately get cut. And 0:05:58.480 --> 0:06:00.719 that's the thing, whether it's Medicare, whether Social Security. 0:06:00.800 --> 0:06:02.120 It's a recent barackobus. 0:06:02.279 --> 0:06:04.159 I think voters actually vot tried. 0:06:04.000 --> 0:06:07.680 To remake the Commerce Department and separate out some things 0:06:07.680 --> 0:06:09.200 from there, and Congress said no. 0:06:09.880 --> 0:06:13.160 All right, so TBD right, wait and see and see 0:06:13.160 --> 0:06:16.039 what happens here. Let's go back to Neil Kushcari, present 0:06:16.080 --> 0:06:18.200 of the Federal Reserve Bank of Minneapolis. You did talk 0:06:18.240 --> 0:06:20.599 to him earlier. Let's just share with everybody some of 0:06:20.640 --> 0:06:23.839 the information that came out of the interview that Mike 0:06:23.880 --> 0:06:25.799 did with the surveillance team earlier. 0:06:25.839 --> 0:06:26.119 Today. 0:06:26.440 --> 0:06:28.599 I'm not seeing a lot of upside risks yet, we 0:06:28.640 --> 0:06:30.680 don't know what's going to get enacted. I'm not seeing 0:06:30.680 --> 0:06:32.440 a lot of upside risk that inflation is going to 0:06:32.480 --> 0:06:34.480 take off from here. The bigger risk that i'd be 0:06:34.520 --> 0:06:36.480 concerned about in the inflation front, is just if we're 0:06:36.520 --> 0:06:38.400 landing at around the two and a half percent level 0:06:38.720 --> 0:06:40.800 instead of back down to two percent level. I think 0:06:40.839 --> 0:06:43.920 that those risks existed before the election, and I think 0:06:43.960 --> 0:06:46.400 that there continues to be uncertainty now and we need 0:06:46.440 --> 0:06:48.680 to just be take our time, let the data come 0:06:48.680 --> 0:06:50.200 to us, and let that guide us. 0:06:50.760 --> 0:06:51.159 All right. 0:06:51.240 --> 0:06:54.200 So Neil Kushkari speaking with Mike and the surveillance team 0:06:54.200 --> 0:06:57.320 earlier this morning on radio and TV. So there is 0:06:57.320 --> 0:07:00.359 more data before the next FED meeting, right, So a 0:07:00.440 --> 0:07:03.600 rate move not a guarantee, despite what traders are saying, 0:07:03.600 --> 0:07:04.920 we know this can bounce around a little bit. 0:07:05.040 --> 0:07:06.560 Yeah, I wouldn't put a lot of stock in what 0:07:06.600 --> 0:07:09.280 you're seeing in the futures markets right now, because we 0:07:09.279 --> 0:07:11.520 do get a lot of data. We get another CPI report, 0:07:11.800 --> 0:07:15.120 we get a PCE inflation report, we get a couple 0:07:15.160 --> 0:07:18.239 of retail sales reports, and we get the jobs report 0:07:18.360 --> 0:07:20.640 for the month of November, and all those things will 0:07:20.720 --> 0:07:24.400 weigh on the administration. But you see Kashkari saying what 0:07:24.440 --> 0:07:25.360 we were just talking. 0:07:25.160 --> 0:07:25.560 About, that. 0:07:27.000 --> 0:07:30.560 His worry is that we get stuck, and that might 0:07:30.680 --> 0:07:34.040 call for the FED to stay in one place. Mussalam, 0:07:34.280 --> 0:07:38.200 who was mentioned was just speaking said exactly the same thing. 0:07:38.400 --> 0:07:41.800 Gradual cuts if inflation keeps falling, is the way he 0:07:41.880 --> 0:07:44.960 put it. And Jeffrey Schmid from Kansas City also saying, 0:07:44.960 --> 0:07:48.040 there's uncertainty about how our rates should fall because there's 0:07:48.200 --> 0:07:50.800 uncertainty about where inflation is going. And I think you're 0:07:50.800 --> 0:07:53.800 going to hear this pretty much from every FED official 0:07:54.800 --> 0:07:57.720 this over the next couple of weeks. We don't know, 0:07:57.840 --> 0:08:00.440 but don't count on it one way or another. Don't 0:08:00.480 --> 0:08:02.680 rule it out, but don't count. 0:08:02.400 --> 0:08:04.280 On us the way it goes. All Right, Michael McKee, 0:08:04.280 --> 0:08:06.840 thank you so much. International Economics and Policy courseponding here 0:08:06.840 --> 0:08:09.880 at Bloomberg News. Catch his full conversation with Neil Kashgari 0:08:09.960 --> 0:08:12.920 check it out on the Bloomberg All right, everybody, so, 0:08:13.240 --> 0:08:15.280 from the economy and FED policy to those who will 0:08:15.280 --> 0:08:17.640 be helping to shape some of the new policy initiatives 0:08:17.640 --> 0:08:20.160 in the Trump administration, that's exactly where we go right now. 0:08:20.400 --> 0:08:23.800 This as the President elect continues to name names for 0:08:23.840 --> 0:08:26.640 top cabinet posts and other advisory roles, and as mister 0:08:26.680 --> 0:08:29.920 Trump goes to Washington meeting today with President Biden and 0:08:30.000 --> 0:08:33.440 top members of the GOP back with our Washington around. 0:08:33.559 --> 0:08:36.800 Bloomberg News political reporter Tyler Kendall live for us at 0:08:36.880 --> 0:08:39.800 the White House. Tyler, President Biden and President elect Trump 0:08:39.880 --> 0:08:43.079 meeting earlier today at the White House. That meeting wrapping up. 0:08:43.400 --> 0:08:46.120 What do we know about that? What they talked about, 0:08:46.120 --> 0:08:46.800 how it went down? 0:08:47.720 --> 0:08:48.320 Yeah, I hate him. 0:08:48.360 --> 0:08:48.440 So. 0:08:48.440 --> 0:08:50.880 White House Press Secretary kree Jiane Pierre coming out just 0:08:50.920 --> 0:08:54.600 moments ago calling this meeting substantive, saying that there was 0:08:54.640 --> 0:08:57.520 this exchange of ideas and that they hit on national security, 0:08:57.559 --> 0:08:59.679 domestic policies, as well as a to do list for 0:08:59.800 --> 0:09:02.640 Congers in the coming months, including averting a government shutdown 0:09:02.640 --> 0:09:05.439 when funding runs out on December twentieth, as well as 0:09:05.480 --> 0:09:10.200 passing some more supplemental disaster relief funding for Americans. But 0:09:10.320 --> 0:09:12.640 the Press secretary also honed in on this idea that 0:09:12.679 --> 0:09:15.680 the meeting was largely symbolic, right it was to ensure 0:09:15.840 --> 0:09:18.600 this peaceful transfer of power. Important to point out that 0:09:18.640 --> 0:09:22.360 four years ago, then President Trump did not extend the 0:09:22.400 --> 0:09:25.800 same tradition to then President elect Biden. However, the two 0:09:25.880 --> 0:09:28.200 did appear cordial today and brief remarks off the top, 0:09:28.280 --> 0:09:31.840 both committing to making this transition as smooth as possible. 0:09:31.920 --> 0:09:33.880 I'd also quickly add that as we are getting these 0:09:33.920 --> 0:09:36.480 headlines from the White House Press briefing, it does appear 0:09:36.640 --> 0:09:40.560 that the two did speak about Ukraine and supplemental assistance 0:09:40.760 --> 0:09:43.600 to Ukraine. This confirmed some of our earlier speculations as 0:09:43.600 --> 0:09:45.640 we were looking at clues on what the two could 0:09:45.640 --> 0:09:48.480 be talking about, because as we look at what President 0:09:48.480 --> 0:09:51.880 Biden is pushing for in these final months of his administration, 0:09:52.000 --> 0:09:54.360 we know that his National Security advisor, Jake Sullivan has 0:09:54.360 --> 0:09:56.840 said that they will push the Trump transition team to 0:09:56.880 --> 0:09:59.840 make sure that that security assistance for Ukraine plays out. 0:10:00.040 --> 0:10:03.360 But of course he has now Vice President elect jd Vance, 0:10:03.400 --> 0:10:06.840 one of the staunchest opponents of Ukraine aid, in his 0:10:06.920 --> 0:10:09.040 oval office. So that's one of the storylines that we're 0:10:09.040 --> 0:10:10.160 going to be covering closely. 0:10:10.679 --> 0:10:12.640 Yeah, I'm glad Tyler brought up the idea of what 0:10:12.640 --> 0:10:14.600 happened four years ago very different at the White House, 0:10:14.679 --> 0:10:16.600 extremely different. I mean, think about where we were just 0:10:16.600 --> 0:10:19.240 a week after the election four years ago that you 0:10:19.360 --> 0:10:22.800 actually never met at the White House four years ago Obama. 0:10:23.000 --> 0:10:27.400 President Obama did extend that same courtesy to then President 0:10:27.440 --> 0:10:30.080 elect Trump eight years ago and he visited the White House. 0:10:30.160 --> 0:10:32.320 Yeah, right, like, so it wasn't kind of business as 0:10:32.400 --> 0:10:35.720 usual certainly last time around. Hey, One thing we also 0:10:35.760 --> 0:10:39.199 want to ask you, Tyler, is Republicans, for the first 0:10:39.200 --> 0:10:42.959 time in eighteen years elected someone other than Mitch McConnell 0:10:43.240 --> 0:10:46.240 to lead them today. That person is South Dakota Senator 0:10:46.320 --> 0:10:49.120 John Thune. Tell us a little bit of us about 0:10:49.160 --> 0:10:52.000 those developments coming out of DC as well. 0:10:52.200 --> 0:10:55.320 Yeah, definitely, Carol, So not necessarily a surprise. Senator John 0:10:55.360 --> 0:10:57.760 Thune one of the top contenders for this race against 0:10:57.760 --> 0:11:01.200 another John, Senator John Cornyn, a Republican from Texas. Also 0:11:01.400 --> 0:11:04.000 Senator Rick Scott, a Republican from Florida, who appeared to 0:11:04.000 --> 0:11:07.320 be backed by some of the more conservative MAGA Republicans 0:11:07.920 --> 0:11:10.679 for that spot. Thune ultimately ended up winning in a 0:11:10.720 --> 0:11:14.120 second round ballot. He's been the number two in the Senate, 0:11:14.160 --> 0:11:19.520 a staunch ally of Senator Mitch McConnell, who, as you mentioned, 0:11:19.559 --> 0:11:22.800 is ending a historic eighteen run as the party's leadership, 0:11:22.800 --> 0:11:25.520 but he is going to be absolutely critical. In remarks 0:11:25.679 --> 0:11:27.600 after winning, he said that he will work with now 0:11:27.640 --> 0:11:30.720 President elect Donald Trump because, as you both know, working 0:11:30.720 --> 0:11:33.079 with the Senate is going to be so critical for 0:11:33.160 --> 0:11:35.560 this incoming president, both for his agenda but also for 0:11:35.640 --> 0:11:38.559 some of his cabinet confirmation. There are two areas I'm 0:11:38.600 --> 0:11:40.880 watching for when it comes to Senator Thune. One is 0:11:40.920 --> 0:11:45.480 his position on tariffs. He's previously criticized Trump's proposed tariff 0:11:45.480 --> 0:11:49.680 across the board policy, warning about inflationary effects. And the 0:11:49.760 --> 0:11:51.800 second is again to bring it back to this idea 0:11:51.840 --> 0:11:54.720 of Ukraine aid, considering this was a particular area of 0:11:54.760 --> 0:11:57.840 tension with McConnell and some of his more conservative members 0:11:57.880 --> 0:11:59.480 of the party. So those are two of the areas 0:11:59.520 --> 0:12:01.560 I'm watching to see how they'll shake out as his 0:12:01.640 --> 0:12:02.240 term begins. 0:12:02.640 --> 0:12:05.400 The President elect didn't really come out and endorse anybody 0:12:05.920 --> 0:12:09.520 for that leadership position in the Senate Tyler, but Elon 0:12:09.640 --> 0:12:11.559 Musk certainly did, and there were a lot of Trump 0:12:11.600 --> 0:12:14.400 allies who were saying Rick Scott is the person to choose. 0:12:14.640 --> 0:12:18.640 How should we look at the fact that Scott didn't 0:12:18.640 --> 0:12:21.000 get picked as sort of a rebuke of, or at 0:12:21.040 --> 0:12:23.719 least some resistance to what Trump wants in the new 0:12:24.160 --> 0:12:25.560 in the new Senate. 0:12:26.200 --> 0:12:29.400 Right, well, I would focus on Senator Thune's track record 0:12:29.480 --> 0:12:32.520 in the Senate. He has won the admiration and respect 0:12:32.520 --> 0:12:35.079 for many of his colleagues, particularly since he has served 0:12:35.120 --> 0:12:38.760 as this number two to McConnell for so long, and 0:12:39.080 --> 0:12:41.720 he had been campaigning for this early and often. Meanwhile, 0:12:41.760 --> 0:12:44.520 Senator Rick Scott hadn't launched this bit. So we knew, 0:12:44.520 --> 0:12:46.560 you know, for many months, that Fune was going to 0:12:46.559 --> 0:12:48.760 be vying for this position. But Rick Scott, for example, 0:12:49.440 --> 0:12:51.720 was in a tight Senate race down in Florida and 0:12:51.720 --> 0:12:54.040 then kind of launched this sort of bid. It's going 0:12:54.040 --> 0:12:57.120 to be absolutely critical for the Trump administration to try 0:12:57.160 --> 0:12:59.959 to keep a coalition together. We had Congressman Brendan Boyle 0:13:00.120 --> 0:13:03.719 on a Balance of Power yesterday. He's a Democrat from Pennsylvania. 0:13:04.559 --> 0:13:07.719 We asked him about the future of governing with this 0:13:07.840 --> 0:13:10.560 incoming White House. He said that he's watching for if 0:13:10.600 --> 0:13:13.520 the Republicans can keep their conference in order since the 0:13:13.559 --> 0:13:16.760 most recent iteration recent years have showed us that infighting 0:13:16.800 --> 0:13:20.640 in the Republican Party has really hurt getting Republican legislation through. 0:13:20.640 --> 0:13:22.959 I would just quickly add that this morning, when Trump 0:13:22.960 --> 0:13:25.079 did go to the Hill, did appear that he backed 0:13:25.120 --> 0:13:27.760 House Speaker Mike Johnson. That's going to be another critical 0:13:27.800 --> 0:13:31.240 ally for getting Republican legislation and agenda items over the 0:13:31.240 --> 0:13:32.240 finish line. 0:13:32.559 --> 0:13:35.040 You know. And then of course there is Elan and Vivek, 0:13:35.120 --> 0:13:36.640 which was I feel like when we read in this 0:13:36.760 --> 0:13:39.599 morning Tyler, that was the story that was kind of 0:13:39.679 --> 0:13:43.520 top of mind in terms of president like Trump's appointments 0:13:43.720 --> 0:13:48.600 or you know, additional Advisory Council, if you will. The 0:13:48.640 --> 0:13:51.440 President does seem to be moving, though, very fast and 0:13:51.520 --> 0:13:54.360 furious when it comes to these appointments in these nominees. 0:13:56.280 --> 0:14:01.439 Yep, definitely, and particularly on this Department of Government efficiency. 0:14:01.440 --> 0:14:03.440 I would just say quickly, there are two big outstanding 0:14:03.520 --> 0:14:05.840 questions here right One, how is this going to work 0:14:05.880 --> 0:14:09.160 in practice? Trump has said that it will be outside 0:14:09.200 --> 0:14:11.000 of the government, So would that be some sort of 0:14:11.040 --> 0:14:13.000 a panel that works with the OMB, the Office of 0:14:13.040 --> 0:14:16.319 Management and Budget to give its recommendations? And then second, 0:14:16.400 --> 0:14:17.960 how is it going to do its work? You were 0:14:18.000 --> 0:14:22.240 speaking about this earlier with Mike McKee. The federal government 0:14:22.000 --> 0:14:26.200 spent six point seventy five trillion dollars last fiscal year. 0:14:26.440 --> 0:14:28.760 Musk came out in that Madison Square Garden speech just 0:14:28.800 --> 0:14:30.560 ahead of the election saying that he wants to cut 0:14:30.680 --> 0:14:33.800 two trillion dollars, But the vast majority of government spending 0:14:33.880 --> 0:14:38.000 is healthcare, social security, defense, and veterans benefits. So there 0:14:38.080 --> 0:14:42.040 is this concern that some of those more popular but 0:14:42.080 --> 0:14:46.040 also politically fraud initiatives like social security, Medicare, and medicaid 0:14:46.080 --> 0:14:49.840 could be at risk. But also, as you mentioned, Musk 0:14:49.880 --> 0:14:52.480 has pledged to make this a more transparent process. 0:14:52.680 --> 0:14:54.720 I do have one last question thirty seconds, you know, 0:14:54.760 --> 0:14:57.480 going back to what Tim mentioned about John Thune. I mean, 0:14:57.520 --> 0:14:59.720 it does look like he is willing to go to 0:14:59.760 --> 0:15:02.520 back with Donald Trump. Is he there to carry out 0:15:02.520 --> 0:15:05.360 the president elex mandate or is he willing to kind 0:15:05.360 --> 0:15:07.560 of go to toe to toe with him? Just quickly? 0:15:07.760 --> 0:15:10.320 Right, right, So in his remarks afterwards, he did say 0:15:10.320 --> 0:15:12.160 that he was willing to work with him. I think 0:15:12.160 --> 0:15:16.160 you're referencing of prior rift after twenty twenty one, after 0:15:16.240 --> 0:15:19.960 January sixth, and making sure that that election was certified 0:15:21.040 --> 0:15:23.000 in the way that it should have been. But John 0:15:23.040 --> 0:15:24.440 Thune has said that he will be there for the 0:15:24.520 --> 0:15:28.080 rank and file, even adding some of Donald Trump's priorities 0:15:28.080 --> 0:15:31.280 in his speech afterwards, including border funding and immigration. 0:15:31.520 --> 0:15:34.200 All right, good stuff, Hey, listen, Tyler, thank you so much. 0:15:34.240 --> 0:15:36.800 In and around DC, Tyler Kendall, she is Bloomberg News 0:15:37.080 --> 0:15:39.760 political reporter, joining us there from the White House. 0:15:40.800 --> 0:15:44.320 You're listening to the Bloomberg Business Week podcast. Catch us 0:15:44.360 --> 0:15:47.600 Live weekday afternoons from two to five pm Eastern Listen 0:15:47.640 --> 0:15:49.800 on Apple car Play and then brought auto with a 0:15:49.800 --> 0:15:52.840 Bloomberg Business act or want us live on YouTube? 0:15:54.080 --> 0:15:56.520 All right, folks are staying with news out of DC 0:15:56.680 --> 0:15:59.000 in the days after the election. Donald Trump and Elon Musk, Well, 0:15:59.000 --> 0:16:02.480 they seem to be riding the world's most intense contact. Hi, 0:16:02.640 --> 0:16:06.440 so writes our own Max Chaffkin. Musk is effectively camped 0:16:06.440 --> 0:16:08.760 out with Trump's inner circle at mar Lago. He shows 0:16:08.800 --> 0:16:12.080 up in family photos, He joins Trump's calls with world leaders. 0:16:12.360 --> 0:16:14.280 Perhaps that's what you get when you spend over one 0:16:14.320 --> 0:16:16.480 hundred million dollars one hundred and thirty two million at 0:16:16.560 --> 0:16:20.000 least into the President Alex campaign. So let's get to it. 0:16:20.040 --> 0:16:22.240 This is the Bloomberg Big Takes story, deemed by our 0:16:22.360 --> 0:16:25.320 editors as a must read story. It is reported out 0:16:25.360 --> 0:16:28.600 by Bloomberg's Max Chaffkin and Dana Hall. Max is Bloomberg 0:16:28.640 --> 0:16:32.560 businesswee correspondent contributor to the Elon Inc. Podcast. Max is 0:16:32.560 --> 0:16:35.560 also author of the contrarian Peter Teel and Silicon's Valley 0:16:35.800 --> 0:16:41.280 Silicon Valley's Pursuit of Power. Max joining us here in studio. Yeah, 0:16:41.360 --> 0:16:43.640 I mean we've all been asking kind of what is 0:16:43.720 --> 0:16:47.480 Elon going to do in this job? What can he 0:16:47.600 --> 0:16:50.000 do and what does it mean kind of as being 0:16:50.040 --> 0:16:51.640 part of this Trump inner circle. 0:16:51.920 --> 0:16:55.960 Well, I mean, you know, last night Trump announced something 0:16:55.960 --> 0:16:58.760 that he had teased repeatedly on a campaign trail, something 0:16:58.800 --> 0:17:01.400 that must get talked about, This idea that Musk would 0:17:01.480 --> 0:17:05.440 be an advisor in the streamlining of government. And there's 0:17:05.440 --> 0:17:07.920 even a catching name for this. This is the Department 0:17:07.960 --> 0:17:11.480 of Government Efficiency. It's not a department in the in 0:17:11.520 --> 0:17:14.400 the sort of normal sense, and and it's also unclear 0:17:14.520 --> 0:17:17.160 like how exactly how efficient they're going to be When 0:17:17.200 --> 0:17:20.960 Elon Musk has a co chair of Vek Ramaswami, that's say, 0:17:21.200 --> 0:17:21.560 do you know. 0:17:21.520 --> 0:17:23.440 What Tim's been saying, Hey, I've been saying that it's 0:17:23.440 --> 0:17:24.760 like it's supposed to be a fishing Why are there 0:17:24.760 --> 0:17:25.240 two of them? 0:17:25.400 --> 0:17:25.480 All? 0:17:25.560 --> 0:17:25.679 Right? 0:17:25.760 --> 0:17:27.639 This is and this is a joke that that that 0:17:27.800 --> 0:17:30.840 Democrats have pointed out and and critics are gonna are 0:17:30.840 --> 0:17:33.760 gonna seize on And I think that the challenge here 0:17:33.960 --> 0:17:37.160 is that many of the things that Elon Musk has 0:17:37.200 --> 0:17:42.080 talked about wanting to do, cutting two trillion dollars from 0:17:42.320 --> 0:17:45.160 UH from the federal budget, or even if you start 0:17:45.200 --> 0:17:48.399 talking about some of these very specific things that he 0:17:48.520 --> 0:17:52.040 personally thinks is kind of dumb or useless, all of 0:17:52.040 --> 0:17:54.160 that's going to be politically difficult. When you're talking about 0:17:54.200 --> 0:17:59.719 gigantic cuts UH two trillion dollars, that's going to mean Congress, 0:17:59.760 --> 0:18:04.000 it's going to mean hard choices about important federal programs 0:18:04.040 --> 0:18:06.840 like Social Security that lots and lots of Republicans. You know, 0:18:06.880 --> 0:18:08.680 that majority in the House is going to be very 0:18:08.800 --> 0:18:09.439 very narrow. 0:18:09.680 --> 0:18:14.159 The midterm is at the midterms. 0:18:13.640 --> 0:18:16.360 And so so again that's gonna be hard. But when 0:18:16.359 --> 0:18:19.160 you even talk about the the sort of smaller things 0:18:19.200 --> 0:18:22.480 like you know, some defense thing, you know, a lot 0:18:22.480 --> 0:18:24.359 of this stuff is politically charged. 0:18:24.400 --> 0:18:24.520 Right. 0:18:24.560 --> 0:18:27.680 You have senators, Congress people in various states who care 0:18:27.760 --> 0:18:30.600 about the jobs in those states. And Trump is going 0:18:30.640 --> 0:18:33.200 to need to govern and and he's going to need 0:18:33.440 --> 0:18:35.920 Republicans in the House and Senate to do that. Even 0:18:35.920 --> 0:18:40.119 though Republicans control those those branches. But what and you know, 0:18:40.320 --> 0:18:43.760 seeing the election of selection of John thune Is as 0:18:43.800 --> 0:18:45.800 Speaker again, that's kind of a bit of a rebuke 0:18:45.880 --> 0:18:48.960 to Elon and kind of the hard right part of 0:18:49.000 --> 0:18:52.200 this coalition. They had wanted Rick Scott. So there's gonna 0:18:52.200 --> 0:18:53.959 be a lot of challenges here. Of course, there are 0:18:54.000 --> 0:18:55.440 ways that Elon Musk can get paid. 0:18:55.560 --> 0:18:59.199 Even so one thing we should notice, Elon actually accompanied 0:19:00.119 --> 0:19:04.600 the President elect to Washington this morning. He was with 0:19:04.720 --> 0:19:07.119 lawmakers earlier too. They gave him a standing ovation in 0:19:07.160 --> 0:19:09.840 addition to giving the President elect a standing ovation, so 0:19:10.080 --> 0:19:12.200 certainly gives an idea how he's seen in the Republican 0:19:12.240 --> 0:19:13.000 Party right now. 0:19:13.400 --> 0:19:13.720 Max. 0:19:14.200 --> 0:19:17.160 The China part of Elon Musk's story I keep coming 0:19:17.200 --> 0:19:21.240 back to because he's got this very close relationship that 0:19:21.560 --> 0:19:23.359 I wonder if it could be, in the words of 0:19:23.359 --> 0:19:27.200 like Jeff Bezos, a complexifier when it comes to Elon 0:19:27.320 --> 0:19:29.480 Musk's relationship with Donald Trump. Because he wants to do 0:19:29.520 --> 0:19:31.679 business in China, and he wants to do business easily, 0:19:31.680 --> 0:19:32.640 and Jia, it's not just that. 0:19:32.600 --> 0:19:34.480 He wants to do business in China, he really needs 0:19:34.520 --> 0:19:37.520 to do business in China. Tesla unless there is a 0:19:37.680 --> 0:19:42.200