1 00:00:02,520 --> 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 --> 00:00:17,120 Speaker 1: noon and five pm Eastern on Apple Coarckley and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,040 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,600 --> 00:00:28,200 Speaker 2: Welcome to the Threshold of the weekend and the Friday 7 00:00:28,320 --> 00:00:31,040 Speaker 2: edition The Balance of Power here on Bloomberg TV and Radio. 8 00:00:31,080 --> 00:00:34,000 Speaker 2: I'm Joe Matthew in Washington, where all eyes have been 9 00:00:34,040 --> 00:00:35,959 Speaker 2: on the courthouse, just a couple of blocks from where 10 00:00:36,000 --> 00:00:40,080 Speaker 2: I'm sitting, right where Constitution meets Pennsylvania Avenue. Bloomberg's Tyler 11 00:00:40,159 --> 00:00:42,279 Speaker 2: Kendall has been there since before the sun came up. 12 00:00:42,280 --> 00:00:45,760 Speaker 2: This is, of course, the emergency hearing for Federal Reserve 13 00:00:45,800 --> 00:00:48,960 Speaker 2: Governor Lisa Cook and the President's efforts to have her fired. 14 00:00:49,000 --> 00:00:52,000 Speaker 2: There was a big argument about cause and whether in 15 00:00:52,000 --> 00:00:54,920 Speaker 2: fact the President has the authority here, whether due process 16 00:00:55,600 --> 00:00:59,960 Speaker 2: will be invoked. Both sides left wanting. It's unclear exactly 17 00:01:00,200 --> 00:01:02,360 Speaker 2: when they will be back, as the legal teams on 18 00:01:02,400 --> 00:01:05,640 Speaker 2: each side have been given more time to provide more filings. 19 00:01:06,080 --> 00:01:07,960 Speaker 2: Tyler brings us up to date and picks up the 20 00:01:08,000 --> 00:01:09,520 Speaker 2: story from there at the courthouse. 21 00:01:09,560 --> 00:01:14,119 Speaker 3: What else should we know, Tyler, Yeah, hey, Jo, Well, 22 00:01:14,160 --> 00:01:17,400 Speaker 3: this hearing lasted just under two hours, and we saw 23 00:01:17,480 --> 00:01:21,720 Speaker 3: really both sides get some tough questioning from the judge 24 00:01:22,080 --> 00:01:25,160 Speaker 3: during this hearing, because, as you're outlining here, there's a 25 00:01:25,160 --> 00:01:28,000 Speaker 3: few different issues at play. One is that today's case 26 00:01:28,080 --> 00:01:32,360 Speaker 3: was really about Cook seeking this temporary restraining order, which 27 00:01:32,360 --> 00:01:35,720 Speaker 3: would reinstate her into the role as the court process 28 00:01:35,840 --> 00:01:41,000 Speaker 3: around the larger legal questions surrounding her firing ultimately play out. 29 00:01:41,040 --> 00:01:44,200 Speaker 3: But that concluded with no ruling. We're not expecting anything 30 00:01:44,280 --> 00:01:47,360 Speaker 3: earlier than Tuesday, as both sides now have time to 31 00:01:47,640 --> 00:01:51,360 Speaker 3: file some additional arguments related to the case. And while 32 00:01:51,400 --> 00:01:54,320 Speaker 3: today's ruling didn't really have to do with the broader case, 33 00:01:54,360 --> 00:01:56,880 Speaker 3: we got a whole lot of insight into how both 34 00:01:56,880 --> 00:01:59,840 Speaker 3: sides are going to approach that legal battle, and, as 35 00:01:59,880 --> 00:02:02,320 Speaker 3: you mentioned, really hitting the nail on the head there. 36 00:02:02,480 --> 00:02:04,920 Speaker 3: The crux of this has to do with defining the 37 00:02:05,000 --> 00:02:07,800 Speaker 3: idea of cause, and we heard from Lisa Cook's lawyers 38 00:02:07,840 --> 00:02:11,919 Speaker 3: today that these allegations of mortgage fraud do not rise 39 00:02:12,280 --> 00:02:14,920 Speaker 3: to that level of cause, pointing out a few different 40 00:02:14,960 --> 00:02:18,279 Speaker 3: reasons why they feel that way, including that these allegations 41 00:02:18,280 --> 00:02:20,919 Speaker 3: happened in twenty twenty one and Lisa Cook wasn't appointed 42 00:02:20,919 --> 00:02:23,600 Speaker 3: as a governor until twenty twenty two, so they are 43 00:02:23,639 --> 00:02:27,840 Speaker 3: outside of her realm as a Federal Reserve official. In 44 00:02:27,880 --> 00:02:30,560 Speaker 3: the court filing yesterday, it's worth mentioning we did get 45 00:02:30,560 --> 00:02:32,679 Speaker 3: a little bit more of an insight into what they're 46 00:02:32,720 --> 00:02:35,240 Speaker 3: thinking here when it comes to a defense, suggesting that 47 00:02:35,280 --> 00:02:40,080 Speaker 3: if there were any discrepancies on these mortgage applications, perhaps 48 00:02:40,120 --> 00:02:42,560 Speaker 3: it's a clerical error, and that Lisa Cook did not 49 00:02:42,680 --> 00:02:45,480 Speaker 3: have any intent to deceive anyone. 50 00:02:45,680 --> 00:02:46,320 Speaker 4: Joe, I'll mention. 51 00:02:46,520 --> 00:02:49,680 Speaker 3: On the administration side, they have said that it is 52 00:02:49,840 --> 00:02:53,000 Speaker 3: up to the courts to allow the president to define 53 00:02:53,160 --> 00:02:57,480 Speaker 3: the stature of what qualifies as sufficient cause. They also 54 00:02:57,520 --> 00:02:59,600 Speaker 3: pushed back on this notion that Lisa Cook was not 55 00:02:59,680 --> 00:03:04,560 Speaker 3: given due process, pointing to President Trump's own social media posts, 56 00:03:04,560 --> 00:03:08,320 Speaker 3: saying that that should qualify as the necessary time that 57 00:03:08,400 --> 00:03:09,880 Speaker 3: she could have had to respond. 58 00:03:11,120 --> 00:03:13,079 Speaker 2: All right, Tyler, We've got a lot to cover here. 59 00:03:13,080 --> 00:03:15,600 Speaker 2: It's unclear exactly when they're going to come back though, correct. 60 00:03:15,800 --> 00:03:18,360 Speaker 2: Could it be as soon as Tuesday? After this long weekend. 61 00:03:20,880 --> 00:03:24,440 Speaker 3: That seems to be our understanding. The judge had indicated 62 00:03:24,440 --> 00:03:26,280 Speaker 3: that it's going to take her perhaps a little bit 63 00:03:26,320 --> 00:03:30,560 Speaker 3: additional time here to weed through exactly what's happening, particularly 64 00:03:30,600 --> 00:03:33,040 Speaker 3: when it does come to this tro We did hear 65 00:03:33,080 --> 00:03:36,040 Speaker 3: from Lisa Cook's lawyer, Abby Lowell earlier today saying that 66 00:03:36,040 --> 00:03:38,360 Speaker 3: they're not expecting the Federal. 67 00:03:37,960 --> 00:03:39,640 Speaker 2: Reserve to act today, he said. 68 00:03:39,680 --> 00:03:41,680 Speaker 3: He said that they're expecting the Fed to act once 69 00:03:41,760 --> 00:03:44,600 Speaker 3: this is resolved in the courts, which then also raises 70 00:03:44,680 --> 00:03:47,160 Speaker 3: questions about whether or not there needs to be this 71 00:03:47,280 --> 00:03:50,400 Speaker 3: TRORO in place, if this could move directly to an 72 00:03:50,400 --> 00:03:54,840 Speaker 3: injunction for perhaps the longer duration of this legal battle. 73 00:03:54,880 --> 00:03:57,240 Speaker 3: So still a lot of questions that we have to 74 00:03:57,280 --> 00:03:59,240 Speaker 3: parse through, but as of today, the update is that 75 00:03:59,280 --> 00:04:02,040 Speaker 3: there is no but we did get more insight into 76 00:04:02,040 --> 00:04:04,880 Speaker 3: how both of these sides are approaching the broader legal 77 00:04:04,920 --> 00:04:07,520 Speaker 3: case of her firing Tyler. 78 00:04:07,560 --> 00:04:09,480 Speaker 2: Many thinks, as always, it's been a long one for 79 00:04:09,560 --> 00:04:12,920 Speaker 2: Tyler Kendall at the courthouse here in Washington. Bloomberg's Michael 80 00:04:13,000 --> 00:04:16,000 Speaker 2: McKee has been watching this from his perch at World Headquarters, 81 00:04:16,040 --> 00:04:19,640 Speaker 2: Bloomberg International Economics and Policy Correspondent the man who brings 82 00:04:19,640 --> 00:04:22,240 Speaker 2: you the news from the Federal Reserve meetings from the 83 00:04:22,240 --> 00:04:24,200 Speaker 2: lock ups when the minutes are released, and he's with 84 00:04:24,279 --> 00:04:27,160 Speaker 2: us right now again, Michael, do we know if Lisa 85 00:04:27,200 --> 00:04:29,200 Speaker 2: Cook will be going to work in the meantime? What 86 00:04:29,240 --> 00:04:30,560 Speaker 2: does this mean for her status? 87 00:04:31,120 --> 00:04:34,479 Speaker 5: Well, as Tyler just mentioned, the FED basically said that 88 00:04:34,680 --> 00:04:37,599 Speaker 5: they are not taking any action until the case is resolved. 89 00:04:37,640 --> 00:04:39,080 Speaker 2: Now what resolved. 90 00:04:38,680 --> 00:04:41,159 Speaker 5: Means, we don't know whether that means the judge issuing 91 00:04:41,760 --> 00:04:46,800 Speaker 5: some sort of restraining order or injunction to keep her 92 00:04:46,920 --> 00:04:49,840 Speaker 5: in the job, or whether it means they're going to 93 00:04:49,880 --> 00:04:52,080 Speaker 5: wait until we see what the legal. 94 00:04:51,839 --> 00:04:54,120 Speaker 2: Case how that's resolved. 95 00:04:54,480 --> 00:04:57,560 Speaker 5: So we don't know, but it appears that she's been 96 00:04:57,600 --> 00:05:00,880 Speaker 5: working from home and she can still continue to work 97 00:05:00,880 --> 00:05:02,920 Speaker 5: from home as far as the FED is concerned for 98 00:05:03,000 --> 00:05:04,080 Speaker 5: the time being. 99 00:05:04,200 --> 00:05:04,560 Speaker 6: Now. 100 00:05:05,120 --> 00:05:09,520 Speaker 5: Before they left, the judge asked the lawyers to discuss 101 00:05:09,600 --> 00:05:13,440 Speaker 5: the idea of skipping from the tro to the injunction, 102 00:05:13,640 --> 00:05:17,920 Speaker 5: as Tyler was talking about and Abby Lowell, Cook's lawyer said, 103 00:05:17,960 --> 00:05:19,920 Speaker 5: the one thing he would not do would be to 104 00:05:19,960 --> 00:05:23,359 Speaker 5: agree to anything that disrupted the status quo. In other words, 105 00:05:23,400 --> 00:05:25,719 Speaker 5: anything that pushed her out of the job. In the 106 00:05:25,800 --> 00:05:28,600 Speaker 5: meantime and allowed the President to put someone else in. 107 00:05:29,800 --> 00:05:32,799 Speaker 2: Got it interesting? Well, I don't know if we really 108 00:05:32,880 --> 00:05:36,599 Speaker 2: learned very much today. We're still chewing on exactly how 109 00:05:36,640 --> 00:05:41,440 Speaker 2: to define cause once this is resolved on a legal level, 110 00:05:41,440 --> 00:05:44,840 Speaker 2: and I realized that could need some time because this 111 00:05:44,880 --> 00:05:47,440 Speaker 2: will likely go all the way to the Supreme Court. 112 00:05:47,600 --> 00:05:51,720 Speaker 2: Does J. Powell weigh in as the chair? When do 113 00:05:51,839 --> 00:05:52,599 Speaker 2: we hear from him? 114 00:05:53,560 --> 00:05:57,960 Speaker 5: We probably won't except for the fact that he's got 115 00:05:58,000 --> 00:06:01,919 Speaker 5: to face the press after the September seventeenth meeting. The 116 00:06:01,960 --> 00:06:04,960 Speaker 5: FED is in the uncomfortable position of not being able 117 00:06:05,000 --> 00:06:09,160 Speaker 5: to defend Lisa Cook because this is a private issue 118 00:06:09,160 --> 00:06:14,880 Speaker 5: of hers. It doesn't it's not part of the FED job, 119 00:06:15,120 --> 00:06:18,680 Speaker 5: so they can't get involved in that. They have obviously 120 00:06:18,720 --> 00:06:22,159 Speaker 5: a rooting interest in the President not being able to 121 00:06:22,240 --> 00:06:25,559 Speaker 5: replace people on the FED at will, but they can't 122 00:06:25,640 --> 00:06:28,880 Speaker 5: say that either, so they're kind of sidelined for the 123 00:06:28,960 --> 00:06:32,920 Speaker 5: time being. They will probably continue to make the case though, 124 00:06:32,920 --> 00:06:39,040 Speaker 5: that an independent central bank produces better economic outlooks outcomes 125 00:06:39,080 --> 00:06:41,159 Speaker 5: for the countries that have them. 126 00:06:41,880 --> 00:06:45,200 Speaker 2: Well, whether we get a ruling here on Tuesday or not, 127 00:06:45,400 --> 00:06:48,200 Speaker 2: we do know that we have an important date on Thursday, 128 00:06:48,560 --> 00:06:52,680 Speaker 2: when Steven Myron sits for his confirmation hearing before the 129 00:06:52,720 --> 00:06:56,599 Speaker 2: Senate Finance Committee. What are you expecting at this point, Michael, 130 00:06:56,600 --> 00:06:58,880 Speaker 2: because I'm thinking we could have a lot more fireworks 131 00:06:58,880 --> 00:06:59,839 Speaker 2: than we would have before. 132 00:07:00,640 --> 00:07:04,599 Speaker 5: Yeah, it'll be fairly easy for Myron to parry any 133 00:07:04,720 --> 00:07:07,680 Speaker 5: questions on Lisa Cook because he could say, I'm the 134 00:07:07,800 --> 00:07:09,760 Speaker 5: chairman of the Council of Economic Advisers. I don't have 135 00:07:09,760 --> 00:07:12,520 Speaker 5: anything to do with whether she's employed or not, and 136 00:07:12,560 --> 00:07:16,520 Speaker 5: I don't know what caused means either. But the Democrats 137 00:07:16,520 --> 00:07:19,560 Speaker 5: certainly will push him hard on some of the things 138 00:07:19,560 --> 00:07:21,200 Speaker 5: he's written about. Of course, he's the one who came 139 00:07:21,280 --> 00:07:24,680 Speaker 5: up with a mar A Lago accord idea, and he 140 00:07:24,760 --> 00:07:27,960 Speaker 5: also wrote a paper last year calling for significant reforms 141 00:07:28,400 --> 00:07:32,480 Speaker 5: to the Federal Reserve Act, including allowing state governors to 142 00:07:32,720 --> 00:07:36,120 Speaker 5: appoint the boards of directors of Regional FED banks, which 143 00:07:36,160 --> 00:07:40,520 Speaker 5: would then probably enable them to control who's appointed as 144 00:07:40,600 --> 00:07:43,800 Speaker 5: a Regional Fed president. And then obviously that would make 145 00:07:43,840 --> 00:07:47,800 Speaker 5: the Fed even more political. So you can imagine some 146 00:07:47,840 --> 00:07:50,480 Speaker 5: of the questions they're going to have. They'll also, I'm sure, say, 147 00:07:50,520 --> 00:07:52,120 Speaker 5: are you just going in to be a toty for 148 00:07:52,160 --> 00:07:54,840 Speaker 5: the President and vote for huge rate cuts because he 149 00:07:54,920 --> 00:07:55,360 Speaker 5: told you to. 150 00:07:57,560 --> 00:07:58,440 Speaker 2: How will he answer that? 151 00:08:00,240 --> 00:08:02,280 Speaker 5: He will say no, no, no, I have lots of 152 00:08:02,360 --> 00:08:06,640 Speaker 5: valid economic reasons for wanting huge rade cuts understood. 153 00:08:06,880 --> 00:08:09,240 Speaker 2: Michael McKee, It's always great to see you on the 154 00:08:09,280 --> 00:08:12,400 Speaker 2: Friday before a long weekend. This is a story that 155 00:08:12,480 --> 00:08:15,560 Speaker 2: we saw coming here a couple of days ago, and 156 00:08:15,720 --> 00:08:18,040 Speaker 2: to think that we're going into a long weekend with 157 00:08:18,120 --> 00:08:21,280 Speaker 2: so little certainty on how this is going to end 158 00:08:21,480 --> 00:08:25,840 Speaker 2: is really something. Natasha Sarin has been watching this as 159 00:08:25,920 --> 00:08:28,560 Speaker 2: president and co founder of the Ale Budget Lab, having 160 00:08:28,560 --> 00:08:32,840 Speaker 2: spent time as Deputy Assistant Secretary for Economic Policy and 161 00:08:32,920 --> 00:08:36,360 Speaker 2: former counselor to Treasury Secretary Jennet Yellen in the United 162 00:08:36,400 --> 00:08:38,880 Speaker 2: States Treasury Department. Anatasha, it's great to have you back 163 00:08:39,280 --> 00:08:42,079 Speaker 2: on Bloomberg TV and Radio. How should we be looking 164 00:08:42,120 --> 00:08:44,079 Speaker 2: at this today? This is going to be precedent setting 165 00:08:44,080 --> 00:08:44,760 Speaker 2: one way or the other. 166 00:08:45,840 --> 00:08:50,079 Speaker 7: You know, it's such a bigger issue than anything about 167 00:08:50,160 --> 00:08:54,120 Speaker 7: Lisa Cook or anything about mortgages, in that you're in 168 00:08:54,160 --> 00:08:59,280 Speaker 7: a situation where one of the fundamental institutions and sort 169 00:08:59,320 --> 00:09:03,400 Speaker 7: of causes is of American economic strength. Is the fact 170 00:09:03,480 --> 00:09:07,280 Speaker 7: that we have an independent central bank that makes monetary 171 00:09:07,320 --> 00:09:12,400 Speaker 7: policy decisions absent from political influence based only on how 172 00:09:12,440 --> 00:09:14,800 Speaker 7: it thinks about inflation and how it thinks. 173 00:09:14,559 --> 00:09:15,720 Speaker 6: About the labor market. 174 00:09:16,400 --> 00:09:20,480 Speaker 7: And what you're seeing here play out is really a 175 00:09:20,559 --> 00:09:26,560 Speaker 7: sort of potentially quite damaging conversation around whether that type 176 00:09:26,600 --> 00:09:31,400 Speaker 7: of institution should actually be free from political influence. And 177 00:09:31,480 --> 00:09:34,040 Speaker 7: the reason why I know it's pretty damaging is because 178 00:09:34,080 --> 00:09:35,679 Speaker 7: we've actually done it before. 179 00:09:35,720 --> 00:09:36,760 Speaker 6: In the United States. 180 00:09:36,800 --> 00:09:40,040 Speaker 7: We've had a politicized Federal Reserve in the Nixon administration 181 00:09:40,559 --> 00:09:44,920 Speaker 7: that made great decisions sort of according to how they 182 00:09:44,920 --> 00:09:48,560 Speaker 7: would best be suited to help President Niction when a 183 00:09:48,640 --> 00:09:53,240 Speaker 7: presidential campaign. The result of that was that we saw 184 00:09:53,400 --> 00:09:57,360 Speaker 7: the worst stagflation in this country in recent history, and 185 00:09:57,480 --> 00:09:58,800 Speaker 7: inflation rise from. 186 00:09:58,600 --> 00:09:59,800 Speaker 6: Three to thirteen percent. 187 00:10:00,080 --> 00:10:03,320 Speaker 7: So we're running some pretty real risks here, and they're 188 00:10:03,400 --> 00:10:07,400 Speaker 7: quite substantial, and they're much bigger than any one particular 189 00:10:07,480 --> 00:10:09,440 Speaker 7: individual or any one particular case. 190 00:10:10,480 --> 00:10:13,719 Speaker 2: So what's the FED going to look like six months 191 00:10:13,800 --> 00:10:14,280 Speaker 2: from now? 192 00:10:15,679 --> 00:10:18,160 Speaker 7: I hope that the answer to that is not that 193 00:10:18,320 --> 00:10:21,360 Speaker 7: different than it looks like today. And part of what 194 00:10:21,400 --> 00:10:23,840 Speaker 7: gives me a little bit of hope is that you're 195 00:10:23,920 --> 00:10:27,920 Speaker 7: watching this all play out in legal proceedings throughout the 196 00:10:28,040 --> 00:10:30,679 Speaker 7: Judiciary that ultimately will get to the Supreme Court. 197 00:10:31,080 --> 00:10:34,160 Speaker 6: And the Supreme Court went out of its way in 198 00:10:34,240 --> 00:10:36,640 Speaker 6: a removal case that had nothing to do with. 199 00:10:36,640 --> 00:10:40,680 Speaker 7: The Federal Reserve to signal the importance of the Federal 200 00:10:40,720 --> 00:10:43,840 Speaker 7: Reserve as an institution and its unique. 201 00:10:43,640 --> 00:10:46,120 Speaker 6: Quasi private it called it role in. 202 00:10:46,000 --> 00:10:50,240 Speaker 7: This economy, such that in that particular case there were 203 00:10:50,320 --> 00:10:54,520 Speaker 7: real limits on the president's ability to remove at will 204 00:10:55,840 --> 00:10:59,679 Speaker 7: members of the Federal Reserves Board of Governors, and particularly 205 00:10:59,720 --> 00:11:02,800 Speaker 7: the hair of the Federal Reserve. And so I think 206 00:11:02,880 --> 00:11:05,520 Speaker 7: in some sense they're laying I hope maybe I'm sort 207 00:11:05,559 --> 00:11:09,480 Speaker 7: of hoping that they're laying the groundwork for being very 208 00:11:09,520 --> 00:11:12,800 Speaker 7: explicit here that this is not a case in which 209 00:11:12,840 --> 00:11:16,760 Speaker 7: you're going to allow the executive to have unfettered capacity 210 00:11:17,080 --> 00:11:21,280 Speaker 7: to remove and install political operatives in these roles. But instead, 211 00:11:21,320 --> 00:11:23,840 Speaker 7: this is a case where the unique exigencies of the 212 00:11:23,880 --> 00:11:28,720 Speaker 7: Federal Reserve demand that we remain an independent monetary policy institution. 213 00:11:29,720 --> 00:11:32,080 Speaker 2: Well, I don't know if Natasha, you think that Steven 214 00:11:32,120 --> 00:11:33,760 Speaker 2: Myron is going to make the next meeting. There are 215 00:11:33,840 --> 00:11:36,520 Speaker 2: questions about that he's got his confirmation hearing next week 216 00:11:36,559 --> 00:11:39,760 Speaker 2: looks like that in fact could happen. But Christopher Waller 217 00:11:39,800 --> 00:11:42,319 Speaker 2: today is again calling for lower rates. He sees a 218 00:11:42,360 --> 00:11:46,560 Speaker 2: quarter point in September and then more additional cuts over 219 00:11:46,600 --> 00:11:49,080 Speaker 2: the next three to six months, the pace driven, of 220 00:11:49,160 --> 00:11:54,120 Speaker 2: course by incoming data. You can weigh in on the 221 00:11:54,640 --> 00:11:56,880 Speaker 2: rate cut if you want. But there are worries that 222 00:11:56,920 --> 00:12:00,520 Speaker 2: if President Trump goes through with this book is in 223 00:12:00,600 --> 00:12:03,760 Speaker 2: fact fired for cause that you're going to see a 224 00:12:03,800 --> 00:12:06,600 Speaker 2: big drop in short term interest rates because of a 225 00:12:06,720 --> 00:12:10,760 Speaker 2: Trump friendly FED, but that longer term rates are going 226 00:12:10,800 --> 00:12:14,480 Speaker 2: to keep rising for fear of a greater inflationary trend. 227 00:12:15,200 --> 00:12:15,880 Speaker 2: How do you see it? 228 00:12:16,960 --> 00:12:18,240 Speaker 6: You know, it's really interesting. 229 00:12:18,280 --> 00:12:22,200 Speaker 7: I actually think there is substantial room for debate, and 230 00:12:22,240 --> 00:12:24,440 Speaker 7: you're seeing it among the members of the Federal Reserve 231 00:12:24,480 --> 00:12:26,360 Speaker 7: Board right now with respect. 232 00:12:25,920 --> 00:12:29,400 Speaker 6: To how to navigate this particular economic moment, because on 233 00:12:29,440 --> 00:12:30,080 Speaker 6: the one. 234 00:12:29,920 --> 00:12:33,760 Speaker 7: Hand, you have of the most inflationary policies that we've 235 00:12:33,800 --> 00:12:36,880 Speaker 7: seen in our lifetimes with respect to tariffs that are 236 00:12:36,920 --> 00:12:40,800 Speaker 7: at a eighteen plus percent effective rate in the economy, 237 00:12:41,160 --> 00:12:42,880 Speaker 7: and on the other hand, you have a labor market 238 00:12:42,880 --> 00:12:45,800 Speaker 7: that's starting to cool, and so what you've seen Governor 239 00:12:45,840 --> 00:12:48,520 Speaker 7: Waller say, is he's in the direction of being concerned. 240 00:12:48,080 --> 00:12:49,240 Speaker 6: About the labor market. 241 00:12:49,600 --> 00:12:52,120 Speaker 7: I will note that even this sort of descent on 242 00:12:52,160 --> 00:12:54,640 Speaker 7: the Federal Reserve Board at the moment is about whether 243 00:12:55,000 --> 00:12:58,200 Speaker 7: you hold rates steady or you cut rates by twenty 244 00:12:58,200 --> 00:13:01,600 Speaker 7: five basis points. That's no where near the rate cuts 245 00:13:01,640 --> 00:13:04,240 Speaker 7: that the President and the administration have called for. And 246 00:13:04,280 --> 00:13:06,440 Speaker 7: so I think there is room for debate about whether 247 00:13:06,480 --> 00:13:09,520 Speaker 7: the Fed weights or whether the Fed continues or starts 248 00:13:09,520 --> 00:13:12,200 Speaker 7: to lower rates. But I actually don't think you're anywhere 249 00:13:12,240 --> 00:13:14,520 Speaker 7: close or should be anywhere close to some of what 250 00:13:14,800 --> 00:13:18,040 Speaker 7: the administration has been pushing. But the thing that's really 251 00:13:18,080 --> 00:13:20,240 Speaker 7: important that you said there, Joe, is sort of the 252 00:13:20,280 --> 00:13:23,040 Speaker 7: flip side of this, which is, like what happens. Let's 253 00:13:23,040 --> 00:13:26,079 Speaker 7: assume that you're in a world in which the Federal 254 00:13:26,160 --> 00:13:29,200 Speaker 7: Reserve Board decides tomorrow that we're going to lower interest 255 00:13:29,280 --> 00:13:32,120 Speaker 7: rates to the one percent the FED funds rate to 256 00:13:32,160 --> 00:13:34,320 Speaker 7: the one percent that President Trump is called for. 257 00:13:34,800 --> 00:13:37,959 Speaker 6: Well, that's actually not going to do. It's like pretty counterproductive. 258 00:13:37,960 --> 00:13:40,960 Speaker 7: It's not going to do to mortgage rates what the 259 00:13:41,000 --> 00:13:44,560 Speaker 7: President might like to see, precisely because you might be 260 00:13:44,679 --> 00:13:47,320 Speaker 7: changing the short term rate at which banks borrow from 261 00:13:47,360 --> 00:13:49,400 Speaker 7: one another, which is the FED funds rate that the 262 00:13:49,400 --> 00:13:53,800 Speaker 7: FED controls, But you're not actually able to effectuate what 263 00:13:54,120 --> 00:13:57,080 Speaker 7: mortgage rates or other rates we care about small business 264 00:13:57,120 --> 00:14:00,440 Speaker 7: loan rates are in this economy, because that matters a 265 00:14:00,440 --> 00:14:04,160 Speaker 7: lot with respect to what the market perceives is longer 266 00:14:04,320 --> 00:14:08,280 Speaker 7: term trends in interest rates, and what the market's going 267 00:14:08,320 --> 00:14:11,520 Speaker 7: to perceive is that, yeah, we did this politicized. 268 00:14:10,800 --> 00:14:13,080 Speaker 6: Thing, but the result of that is we're. 269 00:14:12,920 --> 00:14:15,160 Speaker 7: Going to be like we were in the Nixon administration, 270 00:14:15,360 --> 00:14:19,080 Speaker 7: facing a very substantial inflationary outlook and forced to raise 271 00:14:19,160 --> 00:14:21,120 Speaker 7: rates in the future, and long term rates are going to. 272 00:14:21,120 --> 00:14:23,480 Speaker 6: Be high as a result of that understanding. 273 00:14:23,560 --> 00:14:26,880 Speaker 7: So in some sense, this is all incredibly damaging to 274 00:14:26,920 --> 00:14:30,560 Speaker 7: the FED as an institution and incredibly counterproductive to the 275 00:14:30,560 --> 00:14:32,880 Speaker 7: goal of lowering interest rates in the economy. 276 00:14:33,080 --> 00:14:34,600 Speaker 6: And if the administration would. 277 00:14:34,320 --> 00:14:36,480 Speaker 7: Like to see that happen, I have a very easy 278 00:14:36,480 --> 00:14:39,360 Speaker 7: solution for them, something over which they have direct control, 279 00:14:39,560 --> 00:14:42,320 Speaker 7: which is rolled back these excessively high tariffs. 280 00:14:43,280 --> 00:14:45,120 Speaker 2: We spend a lot of time talking about what could 281 00:14:45,120 --> 00:14:47,520 Speaker 2: go wrong here, and I realize that there's now apparently 282 00:14:47,560 --> 00:14:52,040 Speaker 2: a third mortgage application that may not help Lisa Cook's case, 283 00:14:52,080 --> 00:14:56,200 Speaker 2: at least according to what we're hearing from the administration. 284 00:14:56,640 --> 00:14:58,840 Speaker 2: But when we think about things that could go right 285 00:14:58,920 --> 00:15:00,640 Speaker 2: as well. If this is going to be a precedent 286 00:15:00,680 --> 00:15:03,680 Speaker 2: setting ruling one way or the other, and Lisa Cook 287 00:15:03,800 --> 00:15:07,760 Speaker 2: keeps her job based on, say, a Supreme Court ruling, 288 00:15:07,760 --> 00:15:09,920 Speaker 2: what would that mean for FED independence going forward? 289 00:15:11,200 --> 00:15:14,880 Speaker 7: I hope what it means is that we entrench in 290 00:15:14,960 --> 00:15:19,960 Speaker 7: this country the sort of legal respect for the incredible 291 00:15:20,000 --> 00:15:25,440 Speaker 7: importance institutionally of the Federal Reserve and the incredible importance 292 00:15:25,960 --> 00:15:29,400 Speaker 7: to our countries not just economic security, but sort of 293 00:15:29,520 --> 00:15:33,000 Speaker 7: place in the global world order with respect. 294 00:15:32,560 --> 00:15:34,400 Speaker 6: To the independence of this institution. 295 00:15:34,560 --> 00:15:37,920 Speaker 7: And why it's like so critical is that it's taken, 296 00:15:38,080 --> 00:15:41,680 Speaker 7: you know, generations, decades to be able to be the 297 00:15:41,720 --> 00:15:46,040 Speaker 7: type of country that enjoys the safe harbor premium that 298 00:15:46,120 --> 00:15:49,280 Speaker 7: is allowed to borrow at lower rates, precisely because we're 299 00:15:49,320 --> 00:15:52,320 Speaker 7: like a stable ship in kind of turbulent. 300 00:15:51,920 --> 00:15:53,000 Speaker 6: Waters at times. 301 00:15:53,560 --> 00:15:56,240 Speaker 7: And what happens if you are no longer that and 302 00:15:56,280 --> 00:15:59,960 Speaker 7: in some sense that sort of credibility that took decades 303 00:16:00,040 --> 00:16:03,800 Speaker 7: and generations to build, it can evaporate very very quickly. 304 00:16:04,240 --> 00:16:08,040 Speaker 7: And when you are no longer that that translates into. 305 00:16:07,920 --> 00:16:09,360 Speaker 6: Real economic costs. 306 00:16:09,360 --> 00:16:13,280 Speaker 7: It translates into an environment that's not friendly for business investment, 307 00:16:13,600 --> 00:16:18,040 Speaker 7: It translates to higher mortgage traits for households and for 308 00:16:18,200 --> 00:16:21,640 Speaker 7: borrowers in this country. So I am hopeful that what 309 00:16:21,680 --> 00:16:23,560 Speaker 7: we're going to see is we're going to see entrench 310 00:16:23,640 --> 00:16:26,320 Speaker 7: to respect for something that is so pivotal to our 311 00:16:26,360 --> 00:16:27,320 Speaker 7: economic strength. 312 00:16:28,400 --> 00:16:31,000 Speaker 2: With all of this said, Natasha, and I'm out of time. 313 00:16:31,040 --> 00:16:32,920 Speaker 2: I only have a couple seconds. Did the Fed do 314 00:16:33,000 --> 00:16:35,360 Speaker 2: the right thing by not weighing in today in court? 315 00:16:36,800 --> 00:16:39,480 Speaker 7: I think that the Federal Reserve is doing exactly what 316 00:16:39,520 --> 00:16:41,400 Speaker 7: it needs to and should do in this case. And 317 00:16:41,440 --> 00:16:43,840 Speaker 7: as you know, they're named as a suit as a 318 00:16:43,880 --> 00:16:46,640 Speaker 7: party in this suit, so it's a complicated sort of 319 00:16:47,040 --> 00:16:49,800 Speaker 7: judicial dance for it to be doing. But they're doing 320 00:16:49,840 --> 00:16:52,760 Speaker 7: exactly what they should be and they have great lawyers there, 321 00:16:52,920 --> 00:16:55,720 Speaker 7: as does the legal case mandate. 322 00:16:57,200 --> 00:17:01,200 Speaker 2: Thank you Natasha for joining as always and president, co 323 00:17:01,280 --> 00:17:04,000 Speaker 2: founder of the Ale Budget Lab, former Jeopardy, Assistant Secretary 324 00:17:04,000 --> 00:17:07,680 Speaker 2: for Economic Policy, and former counselor to Treasury Secretary Janet Yellen. 325 00:17:08,080 --> 00:17:10,920 Speaker 2: I'm Joe Matthew and Washington. We'll assemble our panel next, 326 00:17:11,240 --> 00:17:14,160 Speaker 2: Rick Davis and g. D. Shanzeno on Lisa Cook on Bloomberg. 327 00:17:14,960 --> 00:17:18,440 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 328 00:17:18,520 --> 00:17:21,560 Speaker 1: us live weekdays at noon and five pm Eastern on 329 00:17:21,680 --> 00:17:24,920 Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business App. 330 00:17:24,960 --> 00:17:28,000 Speaker 1: You can also listen live on Amazon Alexa from our 331 00:17:28,000 --> 00:17:32,399 Speaker 1: flagship New York station, Just Say Alexa played Bloomberg eleven. 332 00:17:32,240 --> 00:17:37,080 Speaker 2: Thirty as we bring you news every day here live 333 00:17:37,119 --> 00:17:41,480 Speaker 2: from Washington. In many cases market moving news. It's a 334 00:17:41,520 --> 00:17:44,920 Speaker 2: little bit more abstract in the case of Lisa Cook, 335 00:17:45,000 --> 00:17:48,399 Speaker 2: but Wall Street is watching the bond market certainly is. 336 00:17:48,840 --> 00:17:51,720 Speaker 2: The judge did not indicate which way she was leaning 337 00:17:52,119 --> 00:17:55,040 Speaker 2: in this emergency hearing today that started at ten am. 338 00:17:55,280 --> 00:18:00,960 Speaker 2: It concluded with no ruling, as the judge heppard lawyers 339 00:18:01,320 --> 00:18:06,200 Speaker 2: for both sides, Lisa Cook and the administration about two 340 00:18:06,240 --> 00:18:08,919 Speaker 2: hours today without ruling on the Fed Governor's request for 341 00:18:09,000 --> 00:18:13,360 Speaker 2: a temporary order blocking her Ouster. We're going to talk 342 00:18:13,359 --> 00:18:16,520 Speaker 2: about this with the panel, along with the greater view 343 00:18:16,640 --> 00:18:19,639 Speaker 2: on what the administration is trying to accomplish here beyond 344 00:18:19,680 --> 00:18:23,439 Speaker 2: Lisa Cook herself. The firings that we've seen at the 345 00:18:23,480 --> 00:18:28,439 Speaker 2: head of the CDC, BLS and other agencies that the 346 00:18:28,440 --> 00:18:32,920 Speaker 2: president is clearly shaping in his own vision, something we 347 00:18:33,040 --> 00:18:37,800 Speaker 2: talked about with Donald Ayre, the former Deputy Solicitor General, 348 00:18:37,840 --> 00:18:41,240 Speaker 2: former Deputy Attorney General, joined us in studio today to 349 00:18:41,280 --> 00:18:45,159 Speaker 2: express his concerns about the changes that he fears, in 350 00:18:45,200 --> 00:18:48,440 Speaker 2: some cases, could be irreversible. Listen to what Air said. 351 00:18:49,320 --> 00:18:53,200 Speaker 8: What's far more important than any one of these situations 352 00:18:53,760 --> 00:18:58,440 Speaker 8: is the pattern that's clearly emerged since the inauguration, which 353 00:18:58,480 --> 00:19:02,719 Speaker 8: is a pattern of Donald Trump, in one instance after another, 354 00:19:03,400 --> 00:19:10,480 Speaker 8: working to essentially overthrow the norms, procedures, checks of our process. 355 00:19:10,800 --> 00:19:14,200 Speaker 8: And that's the real concern that we should all have. 356 00:19:16,440 --> 00:19:18,600 Speaker 2: We play it to the panel on our Friday edition. 357 00:19:18,640 --> 00:19:23,199 Speaker 2: Bloomberg Politics contributors Rick Davis and Jeanie Schanzeno are with us. 358 00:19:23,280 --> 00:19:26,400 Speaker 2: Rick is Republican strategist and partner at Stone Court Capital, 359 00:19:26,440 --> 00:19:30,000 Speaker 2: Genie of course Democracy visiting fellow at Harvard Kennedy's School 360 00:19:30,040 --> 00:19:33,720 Speaker 2: Ash Center, our democratic analysts. Always wonderful to have both 361 00:19:33,760 --> 00:19:35,879 Speaker 2: of you with us here. Rick, do you see it 362 00:19:36,560 --> 00:19:40,439 Speaker 2: as Donald Air does a test of the system. We 363 00:19:40,520 --> 00:19:43,960 Speaker 2: certainly see Donald Trump trying to exercise the limits of 364 00:19:44,040 --> 00:19:46,920 Speaker 2: his power as an executive But is it a cause 365 00:19:46,960 --> 00:19:47,520 Speaker 2: for concern? 366 00:19:49,119 --> 00:19:53,960 Speaker 9: Well, I think that anybody who is used to the 367 00:19:54,200 --> 00:19:57,159 Speaker 9: sort of standard checks and balances that have existed, you know, 368 00:19:57,240 --> 00:20:02,280 Speaker 9: throughout the modern presidency would be concerned about the emergence 369 00:20:02,320 --> 00:20:07,680 Speaker 9: of Donald Trump and sort of his unitary executive theory 370 00:20:08,160 --> 00:20:11,879 Speaker 9: that is clearly being implemented in virtually every one of 371 00:20:11,920 --> 00:20:15,120 Speaker 9: these instances. And certainly, you know, his test to see 372 00:20:15,119 --> 00:20:18,119 Speaker 9: if he can fire Lisa Cook, you know, is a 373 00:20:18,680 --> 00:20:23,000 Speaker 9: exercise of the concept that the Article two in the 374 00:20:23,040 --> 00:20:27,280 Speaker 9: Constitution says the president has sole power to govern the 375 00:20:27,280 --> 00:20:31,360 Speaker 9: executive branch, and he is testing every aspect of that 376 00:20:32,119 --> 00:20:34,719 Speaker 9: in the first nine months of office. And so in 377 00:20:34,760 --> 00:20:40,560 Speaker 9: the extreme, a unitary theory like this could diminish the 378 00:20:40,680 --> 00:20:43,199 Speaker 9: roles of the checks and balances in both the legal 379 00:20:43,760 --> 00:20:46,639 Speaker 9: you know, and the congressional side. So yeah, it's something 380 00:20:46,720 --> 00:20:49,480 Speaker 9: to keep an eye on because it's definitely a different 381 00:20:49,480 --> 00:20:53,320 Speaker 9: approach to governance than we've seen really in our lifetimes. 382 00:20:54,520 --> 00:20:56,600 Speaker 2: He had four years to think about this genie, and 383 00:20:56,680 --> 00:20:59,960 Speaker 2: a lot of people around him to help him succeed 384 00:21:00,160 --> 00:21:05,800 Speaker 2: in these goals of pushing the lines of authority from 385 00:21:06,080 --> 00:21:09,600 Speaker 2: the Oval office. If you're a Trump supporter, this is 386 00:21:09,640 --> 00:21:12,320 Speaker 2: all up. You're making America a great a great again. 387 00:21:12,359 --> 00:21:15,720 Speaker 2: But you've you've thrown down a number of flags and 388 00:21:15,720 --> 00:21:18,760 Speaker 2: issued a number of warnings about the checks and balances 389 00:21:18,960 --> 00:21:23,040 Speaker 2: that Rick Davis refers to. If they go away, can 390 00:21:23,080 --> 00:21:24,080 Speaker 2: you ever get them back? 391 00:21:26,400 --> 00:21:28,360 Speaker 6: Well, you know, we would hope so. 392 00:21:28,680 --> 00:21:34,000 Speaker 10: But I think you know, challenging legally, challenging in court 393 00:21:34,280 --> 00:21:35,760 Speaker 10: is not the problem. 394 00:21:35,960 --> 00:21:38,200 Speaker 6: It's a lot. It's a lot for you to cover 395 00:21:38,320 --> 00:21:40,280 Speaker 6: every day. It's a lot for all of us to watch. 396 00:21:40,920 --> 00:21:44,719 Speaker 10: What is most concerning to me, though, is the fact 397 00:21:44,880 --> 00:21:48,359 Speaker 10: that not just the president challenging his power if he 398 00:21:48,480 --> 00:21:51,600 Speaker 10: does so and he listens to the rulings by judges, 399 00:21:52,320 --> 00:21:57,000 Speaker 10: the fact that he is trying to upend any sense 400 00:21:57,119 --> 00:22:00,439 Speaker 10: of agreement on what is truth. You know, there's an 401 00:22:00,440 --> 00:22:05,199 Speaker 10: old saying which says that when you don't adhere to 402 00:22:05,480 --> 00:22:09,600 Speaker 10: or listen to facts, you abandon your freedom, because there's 403 00:22:09,640 --> 00:22:12,199 Speaker 10: no way to fight back if we don't have an 404 00:22:12,240 --> 00:22:16,679 Speaker 10: agreed upon fact, language, evidence based understanding. And that, to 405 00:22:16,760 --> 00:22:19,440 Speaker 10: me is the most troubling aspect of what we've seen. 406 00:22:19,560 --> 00:22:23,600 Speaker 10: Whether it's the Bureau of Labor Statistics, whether it is, 407 00:22:24,080 --> 00:22:29,280 Speaker 10: you know, the issue involving the FED. It's startling to 408 00:22:29,320 --> 00:22:32,200 Speaker 10: me that Jade Vance went out yesterday in an exclusive 409 00:22:32,240 --> 00:22:35,320 Speaker 10: interview with another outlet and said that it doesn't really 410 00:22:35,359 --> 00:22:39,000 Speaker 10: matter if what Lisa Cook did is illegal or not. 411 00:22:39,480 --> 00:22:42,160 Speaker 6: What matters is she is not serving the president. 412 00:22:42,280 --> 00:22:45,320 Speaker 10: And of course that's not what matters here. You've got 413 00:22:45,320 --> 00:22:47,679 Speaker 10: to follow due process and we have to have an 414 00:22:47,720 --> 00:22:52,520 Speaker 10: agreed upon understanding of facts in order to make policy 415 00:22:52,680 --> 00:22:56,359 Speaker 10: in this country going forward. So that to me is 416 00:22:56,400 --> 00:23:01,200 Speaker 10: the most troubling component, and the President has been pushing 417 00:23:01,240 --> 00:23:04,800 Speaker 10: those boundaries in a way we've never seen before in 418 00:23:04,840 --> 00:23:07,200 Speaker 10: the US, but we have certainly seen elsewhere. 419 00:23:08,280 --> 00:23:11,320 Speaker 2: You wonder if the checks and balances will be restored 420 00:23:11,359 --> 00:23:13,280 Speaker 2: in Congress Rick. So far, it really just has been 421 00:23:13,280 --> 00:23:16,760 Speaker 2: the courts pushing back on this administration. But Bill Cassidy 422 00:23:17,240 --> 00:23:19,640 Speaker 2: has been doing some hard thinking here when it comes 423 00:23:19,720 --> 00:23:22,640 Speaker 2: to the CDC and the changes that have taken place there. 424 00:23:22,680 --> 00:23:25,360 Speaker 2: Just in the last twenty four hours, the CDC director 425 00:23:25,480 --> 00:23:29,200 Speaker 2: was fired, four leaders in the agency resigned in protest, 426 00:23:29,240 --> 00:23:31,879 Speaker 2: and yesterday we saw the rank and file walk out 427 00:23:32,119 --> 00:23:35,119 Speaker 2: and hold a protest on the streets in front of 428 00:23:35,520 --> 00:23:39,080 Speaker 2: the agency. Here Senator Bill Cassidy got a promise from 429 00:23:39,160 --> 00:23:41,639 Speaker 2: RFKA Junior that this type of thing would not happen 430 00:23:41,680 --> 00:23:45,280 Speaker 2: and that vaccine policy would not be impacted by his 431 00:23:45,440 --> 00:23:50,600 Speaker 2: personal beliefs. Now, Cassidy says it's time to cancel the 432 00:23:50,720 --> 00:23:55,919 Speaker 2: Vaccine Advisory meeting that's set for September and that the 433 00:23:55,960 --> 00:24:00,359 Speaker 2: Help Committee must provide oversight when it comes to these 434 00:24:00,560 --> 00:24:04,520 Speaker 2: positions either being fired or vacated through resignation. Is the 435 00:24:04,560 --> 00:24:06,320 Speaker 2: Senate about to stand up here, Rick. 436 00:24:07,760 --> 00:24:08,680 Speaker 4: You know, it's hard to tell. 437 00:24:08,720 --> 00:24:13,600 Speaker 9: They have not to date. Speaking of exercising their powers 438 00:24:13,680 --> 00:24:19,479 Speaker 9: of the constitution, advising consent on these presidential appointments is 439 00:24:19,560 --> 00:24:24,200 Speaker 9: one of the most powerful aspects of their legislative authority. 440 00:24:24,760 --> 00:24:28,200 Speaker 9: And you know, in almost every instance of the most 441 00:24:28,240 --> 00:24:33,760 Speaker 9: controversial members of the Trump cabinet, they were able to 442 00:24:33,920 --> 00:24:38,400 Speaker 9: become appointed by a tie breaking vote by the Vice President. 443 00:24:38,880 --> 00:24:42,159 Speaker 9: And so there were not enough Senators to stand up 444 00:24:42,160 --> 00:24:46,600 Speaker 9: and say to Tulci Gabber, to jfk Jr. 445 00:24:47,280 --> 00:24:47,919 Speaker 2: This is a no. 446 00:24:49,240 --> 00:24:53,320 Speaker 9: And so they've kind of abdicated that most important role 447 00:24:54,480 --> 00:24:57,240 Speaker 9: to hold the executive branch his feet to the fire. 448 00:24:57,760 --> 00:25:01,399 Speaker 9: You know, when appointing individuals to to high Office. So 449 00:25:03,560 --> 00:25:05,959 Speaker 9: it makes sense that Casside's going to want to understand 450 00:25:06,320 --> 00:25:10,399 Speaker 9: what direction this administration's going on vaccine policy before they 451 00:25:10,440 --> 00:25:15,280 Speaker 9: implement it. That is the proper role of oversight. I 452 00:25:15,280 --> 00:25:18,240 Speaker 9: would not be surprised if they stiff him and say 453 00:25:18,960 --> 00:25:21,520 Speaker 9: we're going forward with this committee and we're going to 454 00:25:21,520 --> 00:25:24,879 Speaker 9: implement the rules to make America healthy again. 455 00:25:26,160 --> 00:25:31,439 Speaker 2: Well well, RFK Junior, in a memo to staff, Genie writes, 456 00:25:31,520 --> 00:25:36,639 Speaker 2: reform does not diminish your work, it strengthens it. Is 457 00:25:36,640 --> 00:25:41,400 Speaker 2: he right, there's nothing wrong with reform. 458 00:25:42,080 --> 00:25:46,199 Speaker 10: The problem is is that he, apparently, if we are 459 00:25:46,240 --> 00:25:48,600 Speaker 10: to believe the reports that are coming out, is not 460 00:25:49,640 --> 00:25:53,840 Speaker 10: listening to taking the advice of even meeting with those 461 00:25:53,880 --> 00:25:58,160 Speaker 10: experts in the CDC who have the knowledge to advise 462 00:25:58,280 --> 00:26:02,760 Speaker 10: him properly. I am really curious to see what this 463 00:26:02,920 --> 00:26:07,159 Speaker 10: report comes out on autism and the connection between autism 464 00:26:07,200 --> 00:26:11,840 Speaker 10: and vaccinations, which has been widely you know, discredited obviously, 465 00:26:12,320 --> 00:26:14,720 Speaker 10: and we heard just the other day in the cabinet 466 00:26:14,720 --> 00:26:18,720 Speaker 10: meeting the secretary promising President Trump, who is also expressed 467 00:26:18,720 --> 00:26:19,880 Speaker 10: belief in that connection. 468 00:26:20,520 --> 00:26:21,639 Speaker 6: Unfounded as it is. 469 00:26:21,760 --> 00:26:24,280 Speaker 10: That that report was coming in a lot of speculation 470 00:26:24,760 --> 00:26:28,280 Speaker 10: that the director of the CDC was removed because she 471 00:26:28,560 --> 00:26:30,879 Speaker 10: was pushing back on that. And again, we don't know, 472 00:26:31,359 --> 00:26:34,440 Speaker 10: but you know, the Secretary is talking about reform. 473 00:26:34,760 --> 00:26:35,800 Speaker 6: We welcome reform. 474 00:26:35,920 --> 00:26:40,400 Speaker 10: The CDC needs reform, but you simply cannot lose all 475 00:26:40,480 --> 00:26:44,720 Speaker 10: the knowledge in an institution and then reform it property 476 00:26:44,880 --> 00:26:48,920 Speaker 10: properly bringing in people who have no expertise, in this 477 00:26:49,000 --> 00:26:50,600 Speaker 10: case in science or medicine. 478 00:26:51,720 --> 00:26:55,960 Speaker 2: We heard from Dimitri Daska. Lookis he's been doing some interviews. Rick. 479 00:26:56,040 --> 00:26:59,399 Speaker 2: This is the director of National Center for Immunization and 480 00:26:59,400 --> 00:27:03,000 Speaker 2: Respiratory Diseases who quit. He resigned yesterday and his resignation 481 00:27:03,119 --> 00:27:05,679 Speaker 2: letter made the rounds. We were talking about that. He 482 00:27:05,760 --> 00:27:08,520 Speaker 2: did an interview with The Atlantic and said no one 483 00:27:08,600 --> 00:27:12,400 Speaker 2: from his center had ever been allowed to brief the Secretary. 484 00:27:12,880 --> 00:27:16,240 Speaker 2: Rfk Junior quote, I'm not sure where he's getting his 485 00:27:16,320 --> 00:27:22,040 Speaker 2: information other than sub stacks that are erroneous unquote, what's 486 00:27:22,080 --> 00:27:24,399 Speaker 2: going on inside of the HHS. 487 00:27:25,640 --> 00:27:29,199 Speaker 9: Well, this was the motivation behind Senator Cassidy and his 488 00:27:29,400 --> 00:27:34,080 Speaker 9: questions of Secretary Kennedy before he was willing to give 489 00:27:34,119 --> 00:27:38,960 Speaker 9: him a vote on his nomination. Is you know, put 490 00:27:38,960 --> 00:27:42,880 Speaker 9: a rein on this issue of attacking the vaccine policy, 491 00:27:43,600 --> 00:27:48,000 Speaker 9: you know that exists today, and he got a commitment, 492 00:27:48,720 --> 00:27:51,239 Speaker 9: and that commitment did in the last nine months. So 493 00:27:51,920 --> 00:27:57,159 Speaker 9: I think that there's a lot of recognition realization in 494 00:27:57,200 --> 00:28:01,280 Speaker 9: the Republican caucus of the United States Senate that they 495 00:28:01,320 --> 00:28:05,520 Speaker 9: are a party to this kind of dismantling of government. 496 00:28:06,440 --> 00:28:07,120 Speaker 2: Genie's right. 497 00:28:07,200 --> 00:28:12,240 Speaker 9: You can reform an agency without losing its expertise. Virtually 498 00:28:12,280 --> 00:28:15,719 Speaker 9: every administration puts its stamp on it like that. But 499 00:28:15,840 --> 00:28:19,679 Speaker 9: then to drive very talented people out and replace them 500 00:28:19,720 --> 00:28:23,520 Speaker 9: with folks who have no basic experience in the subject 501 00:28:23,520 --> 00:28:27,520 Speaker 9: matter of the agency is not going to build confidence 502 00:28:27,520 --> 00:28:28,359 Speaker 9: with the American public. 503 00:28:28,400 --> 00:28:29,840 Speaker 2: And again, we started. 504 00:28:29,440 --> 00:28:33,240 Speaker 9: This segment, you know, earlier in this hour talking about 505 00:28:33,600 --> 00:28:36,480 Speaker 9: whether or not Donald Trump has a potential of overreach 506 00:28:36,840 --> 00:28:39,000 Speaker 9: and losing the confidence of the American people. And I 507 00:28:39,000 --> 00:28:42,760 Speaker 9: would say issues like this tend to drive you in 508 00:28:42,800 --> 00:28:43,320 Speaker 9: that direction. 509 00:28:45,120 --> 00:28:47,680 Speaker 2: This is quite a moment We're in next Thursday, by 510 00:28:47,680 --> 00:28:50,440 Speaker 2: the way, we'll be the hearing Senate Finance Committee hearing 511 00:28:51,320 --> 00:28:53,960 Speaker 2: for RFK Junior's testimony, and there are going to be 512 00:28:54,040 --> 00:28:57,240 Speaker 2: some tough questions, I'm sure many Thanks to our great 513 00:28:57,280 --> 00:28:59,960 Speaker 2: panel on the Friday edition, Rick Davis and Jeanie Schanzo, 514 00:29:00,080 --> 00:29:03,880 Speaker 2: Bloomberg Politics contributors. I hope you both have a long weekend, 515 00:29:03,920 --> 00:29:06,440 Speaker 2: and we'll see you back here on the Tuesday edition. 516 00:29:07,920 --> 00:29:10,080 Speaker 2: Stay with us on Balance of Power. We'll have much 517 00:29:10,120 --> 00:29:11,320 Speaker 2: more coming up after this. 518 00:29:15,960 --> 00:29:19,400 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 519 00:29:19,480 --> 00:29:22,480 Speaker 1: us live weekdays at noon and five pm Eastern on 520 00:29:22,640 --> 00:29:25,880 Speaker 1: almal Coarckley and Android Auto with the Bloomberg Business App. 521 00:29:26,040 --> 00:29:29,320 Speaker 1: Listen on demand wherever you get your podcasts, or watch 522 00:29:29,360 --> 00:29:31,840 Speaker 1: us live on YouTube. 523 00:29:32,280 --> 00:29:33,840 Speaker 2: You know they're keeping it safe. This has been the 524 00:29:33,840 --> 00:29:36,440 Speaker 2: big story here most recently, and there are questions about 525 00:29:36,480 --> 00:29:40,120 Speaker 2: whether other cities will follow. You know, I'm talking about 526 00:29:40,120 --> 00:29:42,560 Speaker 2: the federalization, or I don't know if I can use 527 00:29:42,600 --> 00:29:46,960 Speaker 2: that term, the introduction of federal law enforcement working alongside 528 00:29:47,040 --> 00:29:49,560 Speaker 2: DC police here in Washington. They added, of course, armed 529 00:29:49,640 --> 00:29:52,040 Speaker 2: National Guard troops. We've been talking about this for a 530 00:29:52,080 --> 00:29:55,080 Speaker 2: couple of weeks. Questions now about what happens when lawmakers 531 00:29:55,120 --> 00:29:57,000 Speaker 2: come back to town and whether they'd like to see 532 00:29:57,000 --> 00:29:59,120 Speaker 2: more of this for longer, because it would take an 533 00:29:59,160 --> 00:30:03,560 Speaker 2: Act of Congress to maintain this beyond thirty days. Not 534 00:30:03,680 --> 00:30:07,040 Speaker 2: to mention other cities, the President floated Chicago, New York 535 00:30:07,840 --> 00:30:10,560 Speaker 2: and others. Speaker of the House was on Fox this 536 00:30:10,640 --> 00:30:12,880 Speaker 2: morning talking about it. Listen to what Mike Johnson had 537 00:30:12,880 --> 00:30:13,200 Speaker 2: to say. 538 00:30:14,160 --> 00:30:15,840 Speaker 11: I'm all for it, and I told the President and 539 00:30:16,000 --> 00:30:18,040 Speaker 11: yesterday morning we talked about this, and I said, we 540 00:30:18,120 --> 00:30:20,640 Speaker 11: will give you the resources and the authority necessary to 541 00:30:20,640 --> 00:30:23,120 Speaker 11: complete this job because it is wildly popular. You seen 542 00:30:23,160 --> 00:30:25,880 Speaker 11: the Democrat mayor of DC came out and said, thank 543 00:30:25,920 --> 00:30:28,520 Speaker 11: you for the reinforcements. We have to bring law and 544 00:30:28,640 --> 00:30:31,040 Speaker 11: order back. We're the party, he's the president to do it, 545 00:30:31,080 --> 00:30:32,520 Speaker 11: and we're going to show that to the people. The 546 00:30:32,560 --> 00:30:36,160 Speaker 11: statistics are overwhelming and it's ridiculous for him to deny 547 00:30:36,520 --> 00:30:39,200 Speaker 11: that he needs assistance with that. So I hope the 548 00:30:39,240 --> 00:30:41,000 Speaker 11: National Guard does go to Chicago. 549 00:30:42,360 --> 00:30:45,040 Speaker 2: Well, we'll see if that happens. But we thought first 550 00:30:45,120 --> 00:30:48,520 Speaker 2: we'd spend some time with the resident of Washington, DC. 551 00:30:48,680 --> 00:30:50,720 Speaker 2: You may have heard of. His name is Patrick McHenry 552 00:30:50,720 --> 00:30:55,000 Speaker 2: Bloomberg politics contributor, former Republican congressman, was former chair of 553 00:30:55,040 --> 00:30:58,440 Speaker 2: the House Financial Services Committee, and yes, former House Speaker 554 00:30:58,480 --> 00:31:01,120 Speaker 2: ProTem it's great to see you, sir. Back you live 555 00:31:01,160 --> 00:31:03,400 Speaker 2: on Capitol Hill, which has been known to see a 556 00:31:03,440 --> 00:31:07,160 Speaker 2: little bit of crime. Lawmakers come from all different parts 557 00:31:07,160 --> 00:31:09,920 Speaker 2: of the country, including a lot of rural areas who 558 00:31:09,920 --> 00:31:12,000 Speaker 2: may not be used to the game here in d C, 559 00:31:12,200 --> 00:31:14,520 Speaker 2: where we've seen carjackings and a lot of other stuff. 560 00:31:15,040 --> 00:31:18,240 Speaker 2: Even if albeit crime rates are at what they say 561 00:31:18,360 --> 00:31:21,320 Speaker 2: is a thirty year low. So what's the mindset going 562 00:31:21,360 --> 00:31:23,920 Speaker 2: to be among the Republican conference when they come back 563 00:31:23,920 --> 00:31:25,680 Speaker 2: and Donald Trump asks them for more teams. 564 00:31:25,760 --> 00:31:29,920 Speaker 12: Well, first, lawmakers both parties traverse a very narrow range 565 00:31:29,920 --> 00:31:30,880 Speaker 12: of Washington, DC. 566 00:31:31,000 --> 00:31:33,120 Speaker 4: They're not here for tourist attractions. 567 00:31:33,440 --> 00:31:35,760 Speaker 12: They're on Capitol Hill and a few blocks from Capitol 568 00:31:35,840 --> 00:31:40,160 Speaker 12: Hill for meetings and dinners and breakfast and that's about it. 569 00:31:40,240 --> 00:31:40,760 Speaker 2: Yeah, okay. 570 00:31:41,160 --> 00:31:44,840 Speaker 12: And so for their vantage point, they have Capitol Police, 571 00:31:44,880 --> 00:31:48,000 Speaker 12: you have Metro Police, DC Metro Police. They are well 572 00:31:48,040 --> 00:31:52,280 Speaker 12: covered for basic security measures. Having said that, you've had 573 00:31:52,320 --> 00:32:00,440 Speaker 12: some high profile cases of Democratic lawmakers, Republican law makers 574 00:32:00,480 --> 00:32:05,120 Speaker 12: experiencing carjackings, physical assaults just a couple of blocks from 575 00:32:05,160 --> 00:32:08,760 Speaker 12: the Capitol. So that's speaking to something's very real, very 576 00:32:08,760 --> 00:32:12,600 Speaker 12: real in urban America today. Coming off of COVID, the 577 00:32:12,640 --> 00:32:17,520 Speaker 12: stats were incredible for how bad DC and a lot 578 00:32:17,600 --> 00:32:21,120 Speaker 12: of places like Chicago have been and so there's a 579 00:32:21,120 --> 00:32:24,680 Speaker 12: perception across America for the rest of America that there 580 00:32:24,720 --> 00:32:28,480 Speaker 12: is an urban crime problem. And that's why you see 581 00:32:28,480 --> 00:32:32,280 Speaker 12: the present speaking to this. And so is there something 582 00:32:32,320 --> 00:32:37,440 Speaker 12: to it in urban America? Yes, its dramatic as I 583 00:32:37,440 --> 00:32:39,480 Speaker 12: think it's made out to be by the White House. 584 00:32:39,800 --> 00:32:43,320 Speaker 4: Not really, but these. 585 00:32:43,200 --> 00:32:47,640 Speaker 12: Aren't great stats, and the mayor, the Democratic mayor of Washington, 586 00:32:47,720 --> 00:32:50,440 Speaker 12: d c. Is saying, look, these things do have a 587 00:32:50,480 --> 00:32:54,520 Speaker 12: positive impact on reducing crime rates, the attention to the matter, 588 00:32:54,800 --> 00:32:57,360 Speaker 12: but if we take the attention off, then the crime 589 00:32:57,400 --> 00:32:59,480 Speaker 12: will reappear unless we change. 590 00:32:59,640 --> 00:33:03,280 Speaker 2: Okay, so what happens when you start adding other cities. 591 00:33:03,320 --> 00:33:05,400 Speaker 2: It's one thing the federal city gives the president a 592 00:33:05,400 --> 00:33:07,240 Speaker 2: lot more leeway if you're going to roll in a 593 00:33:07,400 --> 00:33:11,160 Speaker 2: Chicago like this, particularly with National Guard troops the way 594 00:33:11,160 --> 00:33:14,480 Speaker 2: we saw in La. It's a different construct. And the 595 00:33:14,520 --> 00:33:18,120 Speaker 2: pushback from Democratic governors has been very loud. Of course, 596 00:33:18,920 --> 00:33:22,880 Speaker 2: is there a line for Republicans for lawmakers on this 597 00:33:23,000 --> 00:33:24,800 Speaker 2: when it comes to other cities or when it comes 598 00:33:24,840 --> 00:33:28,200 Speaker 2: to the difference between federal police and the National Guard. 599 00:33:28,000 --> 00:33:31,760 Speaker 12: Well, frankly, it's for the voters of those jurisdictions to 600 00:33:31,920 --> 00:33:34,520 Speaker 12: vote in people that are going to keep them safe. 601 00:33:34,880 --> 00:33:37,840 Speaker 12: We saw this in San Francisco, a dramatic reversal in 602 00:33:37,880 --> 00:33:41,880 Speaker 12: San Francisco from a very soft on crime regime in 603 00:33:41,920 --> 00:33:45,080 Speaker 12: an all democratic city to a now tough on crime 604 00:33:45,320 --> 00:33:51,680 Speaker 12: regime with encampments and assaults, vehicles disappearing, CBS is being raided, 605 00:33:51,800 --> 00:33:55,360 Speaker 12: every store but every retail store possible being raided, and 606 00:33:55,400 --> 00:33:56,920 Speaker 12: they voted in a new government. 607 00:33:57,160 --> 00:33:58,560 Speaker 4: Chicago's got to do the same thing. 608 00:33:58,800 --> 00:34:00,680 Speaker 12: If they want something better than We've got to vote 609 00:34:00,680 --> 00:34:03,360 Speaker 12: for something better and to get different results. 610 00:34:03,440 --> 00:34:05,400 Speaker 2: But you're also saying that it's not up with Donald Trump. 611 00:34:05,440 --> 00:34:09,200 Speaker 12: It is not up to the president to keep mismanaged, 612 00:34:09,320 --> 00:34:13,319 Speaker 12: badly run cities and save their politicians or give their 613 00:34:13,360 --> 00:34:16,799 Speaker 12: politicians a foil to keep a nept government in. 614 00:34:17,040 --> 00:34:17,719 Speaker 4: That's my view. 615 00:34:18,320 --> 00:34:21,280 Speaker 12: There's enough for us to preside over with national security measures, 616 00:34:22,040 --> 00:34:27,760 Speaker 12: international challenges, terriff issue, economic issues. We've got big things 617 00:34:28,520 --> 00:34:31,040 Speaker 12: that we should be focused on. The political class in 618 00:34:31,160 --> 00:34:34,040 Speaker 12: Washington should be focused on, and especially the president. 619 00:34:33,880 --> 00:34:36,360 Speaker 2: Like funding the government say yes some of that. Basically, 620 00:34:36,680 --> 00:34:39,680 Speaker 2: I've turned away from all this shut down talk and 621 00:34:39,719 --> 00:34:44,040 Speaker 2: the recisions and how much Democrats and Republicans can't trust 622 00:34:44,040 --> 00:34:46,560 Speaker 2: each other because we got into the whole Epstein thing, 623 00:34:46,640 --> 00:34:49,520 Speaker 2: and that we got into the throes were summer news. 624 00:34:49,520 --> 00:34:52,520 Speaker 2: We're not done with that. So I what's top of 625 00:34:52,560 --> 00:34:55,120 Speaker 2: mind as lawmakers come back and are we going to 626 00:34:55,160 --> 00:35:00,360 Speaker 2: be hearing about Epstein next week? Sure we have a shutdown. 627 00:35:00,160 --> 00:35:07,279 Speaker 12: Sure you FPI director and the testifying before the Hill 628 00:35:07,840 --> 00:35:10,359 Speaker 12: in the month of September. In three weeks from now, 629 00:35:10,719 --> 00:35:13,560 Speaker 12: there'll be discussions of that, discussions about keeping the government open, 630 00:35:13,680 --> 00:35:19,480 Speaker 12: discussions about the president's nominee for the FED seat that 631 00:35:19,680 --> 00:35:20,680 Speaker 12: was previously open. 632 00:35:21,840 --> 00:35:23,719 Speaker 4: And so there is so much going. 633 00:35:23,480 --> 00:35:27,120 Speaker 2: On next week in RFK Junior Hearing when it comes 634 00:35:27,120 --> 00:35:30,719 Speaker 2: to appropriations, though, is the conventional wisdom correct here? We're 635 00:35:30,760 --> 00:35:32,560 Speaker 2: shutting down. It's just a question for how long. 636 00:35:32,719 --> 00:35:35,480 Speaker 12: Well it's really open to the Democratic minority in the 637 00:35:35,520 --> 00:35:39,279 Speaker 12: Senate and the House Speaker Johnson showed that they can 638 00:35:39,440 --> 00:35:42,399 Speaker 12: pass a continued resolution like they did in March, which 639 00:35:42,520 --> 00:35:45,480 Speaker 12: was its own political miracle because House Republicans. 640 00:35:45,040 --> 00:35:46,440 Speaker 4: Have not previously been able to do that. 641 00:35:46,480 --> 00:35:50,360 Speaker 12: So kudos to Speaker johnson decisions to make this time around, 642 00:35:50,560 --> 00:35:53,919 Speaker 12: just like in March, it's Schumer's decision. You have enough 643 00:35:54,360 --> 00:35:58,319 Speaker 12: Republican votes to pass something, but not to get to 644 00:35:58,360 --> 00:36:01,399 Speaker 12: the sixty vote culture vote that they need to have 645 00:36:01,480 --> 00:36:02,880 Speaker 12: for funding the government. 646 00:36:03,120 --> 00:36:05,719 Speaker 4: So it is in Schumer's hands, and. 647 00:36:05,680 --> 00:36:09,680 Speaker 12: So the focus should be on him on what he wants, 648 00:36:09,800 --> 00:36:14,480 Speaker 12: his expectations, because he's going to be the deciding the decider. 649 00:36:14,280 --> 00:36:15,960 Speaker 4: On whether or not we have a government shutdown. 650 00:36:16,000 --> 00:36:20,120 Speaker 2: Boy, okay, if we do. Every Democrat we've asked has 651 00:36:20,120 --> 00:36:22,040 Speaker 2: said yeah, but we can't do it unless there's a 652 00:36:22,080 --> 00:36:24,319 Speaker 2: plan to reopen it. Let me because if Donald Trump 653 00:36:24,400 --> 00:36:26,840 Speaker 2: gets this thing closed, he has no interest in reopening it. 654 00:36:26,880 --> 00:36:26,960 Speaker 6: Right. 655 00:36:27,000 --> 00:36:31,560 Speaker 12: Let me just tell you, Russ Vote, the budget director 656 00:36:31,680 --> 00:36:37,480 Speaker 12: for President Trump, has so desperately wants Chuck Schumer and 657 00:36:37,520 --> 00:36:39,640 Speaker 12: the Senate Democrats to shut. 658 00:36:39,440 --> 00:36:41,799 Speaker 2: This really important because what will happen. 659 00:36:42,280 --> 00:36:45,000 Speaker 12: We will find out. But he has a plan. He 660 00:36:45,080 --> 00:36:49,400 Speaker 12: has an intricate, detailed plan, and the goal is to 661 00:36:49,480 --> 00:36:52,920 Speaker 12: win the shutdown. Republicans are previous not one shutdowns in 662 00:36:53,120 --> 00:36:56,960 Speaker 12: nineties all the way through just a few years ago, 663 00:36:58,000 --> 00:37:02,040 Speaker 12: so not winning shutdown. He intends to change that, and 664 00:37:02,160 --> 00:37:04,880 Speaker 12: he's thought deeply about it for a very long time. 665 00:37:05,400 --> 00:37:09,080 Speaker 12: And Schumer may give him that opportunity either October first 666 00:37:09,480 --> 00:37:12,080 Speaker 12: or sometime late in the fall or into January. 667 00:37:12,120 --> 00:37:13,680 Speaker 2: If it happens, it's a record, right. 668 00:37:13,800 --> 00:37:14,880 Speaker 4: It would be a record. 669 00:37:15,239 --> 00:37:17,920 Speaker 12: It will be bad, and it will be bad, particularly 670 00:37:17,920 --> 00:37:22,000 Speaker 12: for Democratic politicians who did not fund the government, and 671 00:37:22,120 --> 00:37:24,560 Speaker 12: a government that they help fund and build and that 672 00:37:24,600 --> 00:37:26,919 Speaker 12: they are in defense of as a party. It would 673 00:37:26,920 --> 00:37:30,080 Speaker 12: be a very bad thing for Democratic politicians. So what 674 00:37:30,239 --> 00:37:32,520 Speaker 12: would what I would tell my Democratic friends is get 675 00:37:32,520 --> 00:37:36,359 Speaker 12: out of the way of your own folly here and 676 00:37:36,840 --> 00:37:38,600 Speaker 12: fund the government. Get out of the way and move 677 00:37:38,640 --> 00:37:41,640 Speaker 12: on to some other more serious fight for the ballot 678 00:37:41,640 --> 00:37:43,600 Speaker 12: box of the midterms. And if they don't do that, 679 00:37:43,880 --> 00:37:46,520 Speaker 12: then it's going to be a tasty, great fight for 680 00:37:46,600 --> 00:37:48,239 Speaker 12: the White House against. 681 00:37:47,880 --> 00:37:50,080 Speaker 2: Congressional Democrats is going to be a riot. 682 00:37:50,200 --> 00:37:51,080 Speaker 4: It's going to be wild. 683 00:37:51,320 --> 00:37:51,520 Speaker 2: Yeah. 684 00:37:51,880 --> 00:37:56,000 Speaker 4: But for us to sit behind the microphones, what's more interesting. 685 00:37:55,719 --> 00:37:59,120 Speaker 2: Right, a shortage of things to talk about. Democrats would say, though, hey, 686 00:37:59,480 --> 00:38:02,280 Speaker 2: you guys did that resistant package, so we can't trust 687 00:38:02,280 --> 00:38:04,680 Speaker 2: you in a budget deal anyway. That's why we're not 688 00:38:04,760 --> 00:38:07,400 Speaker 2: willing to vote for this. And Republicans say, yeah, and 689 00:38:07,400 --> 00:38:09,560 Speaker 2: we're going to do another one, yep? Is that coming? 690 00:38:09,760 --> 00:38:10,120 Speaker 3: Yeah? 691 00:38:10,160 --> 00:38:10,719 Speaker 4: Absolutely? 692 00:38:10,760 --> 00:38:13,320 Speaker 12: What will it looks like, well, they've got to determine 693 00:38:13,360 --> 00:38:15,520 Speaker 12: that and determine that the type of fight they want 694 00:38:15,520 --> 00:38:17,960 Speaker 12: to have about that recisions package. But the point is 695 00:38:18,160 --> 00:38:22,359 Speaker 12: right now, we have currently the largest federal government we've 696 00:38:22,400 --> 00:38:25,799 Speaker 12: had outside of wartime in the history of the United States. 697 00:38:25,840 --> 00:38:29,480 Speaker 12: We have the largest federal government outside of wartime that 698 00:38:29,600 --> 00:38:31,960 Speaker 12: is too big as a percentage of our economy and 699 00:38:32,040 --> 00:38:32,920 Speaker 12: raw dollar numbers. 700 00:38:32,920 --> 00:38:33,920 Speaker 4: We have a government that's. 701 00:38:33,719 --> 00:38:37,040 Speaker 12: Too big that we cannot afford as a great society. 702 00:38:37,760 --> 00:38:40,240 Speaker 12: We have a government, if you match state, local, and federal, 703 00:38:40,520 --> 00:38:44,040 Speaker 12: that tells Europeans that they're not running a social estate. 704 00:38:44,160 --> 00:38:44,520 Speaker 4: We are. 705 00:38:44,880 --> 00:38:47,120 Speaker 12: So we've got to get our financial house in order 706 00:38:47,440 --> 00:38:49,239 Speaker 12: and to prioritize that fight. 707 00:38:49,400 --> 00:38:50,279 Speaker 4: I think the President is. 708 00:38:50,280 --> 00:38:53,920 Speaker 12: Doing a very good job of bringing that to the fore. 709 00:38:54,360 --> 00:38:56,719 Speaker 2: We haven't even mentioned the word tariff since we've been 710 00:38:56,719 --> 00:38:58,600 Speaker 2: talking this time, which is usually something that we get 711 00:38:58,640 --> 00:39:01,840 Speaker 2: around to. Is is Congress kind of pans off the 712 00:39:01,880 --> 00:39:04,319 Speaker 2: reins on this? Will there be a Congressional answer to 713 00:39:04,320 --> 00:39:06,120 Speaker 2: tariffs now that they appear to all be in place. 714 00:39:06,160 --> 00:39:09,040 Speaker 2: India just got sacked with fifty percent this week. We're 715 00:39:09,040 --> 00:39:10,960 Speaker 2: waiting for news on China, but everyone else has a 716 00:39:11,040 --> 00:39:12,040 Speaker 2: number right now. 717 00:39:12,080 --> 00:39:17,000 Speaker 12: Congressman Well, I will tell you that President Trump has 718 00:39:17,040 --> 00:39:18,720 Speaker 12: complete mastery of the Republican Party. 719 00:39:19,680 --> 00:39:22,120 Speaker 4: There are folks on the Hill that hate tariffs. 720 00:39:22,640 --> 00:39:25,600 Speaker 12: They will remain quiet, and the President is there to 721 00:39:25,640 --> 00:39:30,319 Speaker 12: go get a big deal on trading arrangements. Now, all 722 00:39:30,360 --> 00:39:34,120 Speaker 12: of this is noise right landing Where do we end 723 00:39:34,200 --> 00:39:34,880 Speaker 12: up with India? 724 00:39:34,960 --> 00:39:37,280 Speaker 4: Where do we end up with Mexico? 725 00:39:37,640 --> 00:39:42,200 Speaker 12: Some very key decisions are still out, but it all 726 00:39:42,200 --> 00:39:43,440 Speaker 12: brings to focus. 727 00:39:43,400 --> 00:39:45,000 Speaker 4: The main thing here. 728 00:39:45,120 --> 00:39:48,360 Speaker 12: The main thing is our trading relationship with China and 729 00:39:48,400 --> 00:39:50,800 Speaker 12: the globes trading relationship with China. 730 00:39:50,960 --> 00:39:52,640 Speaker 4: That cannot be missed in all of this. 731 00:39:52,960 --> 00:39:55,240 Speaker 12: There's a lot of stuff in washing, a lot of noise, 732 00:39:55,600 --> 00:39:57,360 Speaker 12: but that is the signal you've got to go follow. 733 00:39:57,640 --> 00:40:01,200 Speaker 12: And the White House is very focused on and Treasury 734 00:40:01,480 --> 00:40:03,920 Speaker 12: and Commerce are very focused on landing a deal with 735 00:40:04,360 --> 00:40:06,640 Speaker 12: China that is durable for the long term. 736 00:40:06,680 --> 00:40:08,000 Speaker 2: How old do you know, Lisa Cook? 737 00:40:08,640 --> 00:40:12,760 Speaker 4: A little bit. I interacted significantly with the Fed Street. 738 00:40:13,080 --> 00:40:15,960 Speaker 2: That's why I asked, this is someone who's been vetted already, 739 00:40:16,719 --> 00:40:21,399 Speaker 2: who's being questioned now on apparently three mortgage applications. There 740 00:40:21,440 --> 00:40:23,960 Speaker 2: was a big emergency hearing down the street arguing about 741 00:40:24,080 --> 00:40:28,120 Speaker 2: cause they left without a ruling. How concerned are you about, well, 742 00:40:28,160 --> 00:40:32,120 Speaker 2: the Federal Reserve being impacted, its credibility being impacted by this, Well. 743 00:40:32,480 --> 00:40:36,799 Speaker 12: It is concerning. It is concerning the reputational damage to 744 00:40:36,800 --> 00:40:40,399 Speaker 12: the FED. Number one, Number two, the question of one 745 00:40:40,480 --> 00:40:44,440 Speaker 12: person getting bounced from the FED. What we're talking about 746 00:40:44,520 --> 00:40:49,360 Speaker 12: one appointee getting removed for cause. The courts have to 747 00:40:49,400 --> 00:40:51,239 Speaker 12: decide on this. It's one hundred and ten year old 748 00:40:51,280 --> 00:40:57,480 Speaker 12: statute untested. No previous governor has been removed by the President. 749 00:40:57,840 --> 00:41:01,200 Speaker 12: Although the Act says this, it's up and testing the courts. 750 00:41:01,600 --> 00:41:04,880 Speaker 12: It'll be testing the courts. We will find out and 751 00:41:04,920 --> 00:41:08,160 Speaker 12: that will be a determinative. That's determinative on the Act. 752 00:41:08,600 --> 00:41:11,279 Speaker 12: That does not mean the Federal Reserve is no longer independent. 753 00:41:12,560 --> 00:41:16,400 Speaker 12: It is that it's what comes next that could unravel 754 00:41:16,640 --> 00:41:19,719 Speaker 12: FED independence, if you and. 755 00:41:19,680 --> 00:41:23,360 Speaker 4: So those are the things. Well, in terms of what 756 00:41:23,520 --> 00:41:25,120 Speaker 4: other precipitating. 757 00:41:24,520 --> 00:41:29,880 Speaker 12: Acts can can impair the Fed's independence. 758 00:41:29,360 --> 00:41:32,080 Speaker 2: Like reaching into the twelve regional banks. 759 00:41:31,480 --> 00:41:34,600 Speaker 4: Correct, Okay, and so you have that is an open question. 760 00:41:34,800 --> 00:41:35,960 Speaker 4: You have these independent boards. 761 00:41:36,040 --> 00:41:38,160 Speaker 12: The nature of the Federal Reserve is built on the 762 00:41:38,280 --> 00:41:41,759 Speaker 12: nature of our constitutional checks and balances, and that means 763 00:41:41,760 --> 00:41:46,960 Speaker 12: separations of powers, separation of powers, and representative banks. So 764 00:41:47,000 --> 00:41:49,600 Speaker 12: we have a diverse group of banks across the country 765 00:41:49,600 --> 00:41:51,560 Speaker 12: that are supposed to be the voices for that region 766 00:41:51,920 --> 00:41:54,800 Speaker 12: and know what's happening in the economy. Bring those lessons 767 00:41:54,800 --> 00:41:58,000 Speaker 12: to Washington and be that region's voice. It is a 768 00:41:58,120 --> 00:42:02,120 Speaker 12: very complicated structure. The Federal Reserve is different, distinct than 769 00:42:02,239 --> 00:42:07,520 Speaker 12: other pieces of congressional creation. The Supreme Court has ruled 770 00:42:07,520 --> 00:42:10,640 Speaker 12: that and has opined on that that is special and 771 00:42:10,680 --> 00:42:13,439 Speaker 12: distinct in the nature of central banking, back to the 772 00:42:13,480 --> 00:42:15,799 Speaker 12: First and second Bank of the United States and the 773 00:42:15,840 --> 00:42:18,879 Speaker 12: founding fathers that put we're still alive and writing those 774 00:42:18,880 --> 00:42:22,880 Speaker 12: statutes around the Central Bank at the time, so those 775 00:42:22,920 --> 00:42:26,600 Speaker 12: things are tested. The Supreme Court has already opined on this. 776 00:42:26,960 --> 00:42:29,640 Speaker 12: Now it's a question of lower courts making a determination 777 00:42:29,680 --> 00:42:32,960 Speaker 12: on whether or not they follow this statute and then 778 00:42:32,960 --> 00:42:34,120 Speaker 12: the clear letter of the law. 779 00:42:34,520 --> 00:42:37,120 Speaker 2: Steven Myron going to have a hard session next. 780 00:42:37,160 --> 00:42:39,800 Speaker 4: Oh my gosh, it's going to be the craziest fireworks. 781 00:42:39,880 --> 00:42:42,520 Speaker 12: It's going to be the craziest fireworks on any Fed 782 00:42:43,280 --> 00:42:44,600 Speaker 12: governor not Wow, all. 783 00:42:44,520 --> 00:42:46,680 Speaker 2: Right, this is going to be wild to watch something else. 784 00:42:47,160 --> 00:42:51,239 Speaker 2: Senate Finance Committee will be, of course, interpreting this with 785 00:42:51,320 --> 00:42:53,800 Speaker 2: the help of the great Patrick McHenry. It's always pleasure 786 00:42:53,840 --> 00:43:01,160 Speaker 2: to have you, Bloomberg Politics contributor former Congressman. Thanks for 787 00:43:01,200 --> 00:43:04,279 Speaker 2: listening to the Balance of Power podcast. Make sure to 788 00:43:04,320 --> 00:43:07,440 Speaker 2: subscribe if you haven't already, at Apple, Spotify, or wherever 789 00:43:07,520 --> 00:43:10,120 Speaker 2: you get your podcasts, and you can find us live 790 00:43:10,200 --> 00:43:14,720 Speaker 2: every weekday from Washington, DC at Noontimeeastern at Bloomberg dot com.