WEBVTT - Yellen Interview on Debt Ceiling; Musk to Name New Twitter CEO 0:00:00.680 --> 0:00:04.000 From the Bloomberg Interactive Workers' studios. This is Bloomberg day 0:00:04.000 --> 0:00:05.640 Break for Friday, May twelfth. 0:00:05.640 --> 0:00:08.920 Coming up today, Janet Yellen speaks out on the debt ceiling. 0:00:09.039 --> 0:00:12.160 We bring you our exclusive interview with the Treasury Secretary. 0:00:12.200 --> 0:00:14.880 The US graces for a record migrant sir to the 0:00:14.960 --> 0:00:17.200 border as Title forty two comes to an. 0:00:17.239 --> 0:00:20.320 End, signs the tensions between the US and China may 0:00:20.320 --> 0:00:20.880 be easy. 0:00:21.000 --> 0:00:23.920 And Elon Musk is close to naming a new CEO 0:00:24.160 --> 0:00:24.640 at Twitter. 0:00:24.760 --> 0:00:27.040 The man who prosecutors saying put in New York City 0:00:27.080 --> 0:00:29.600 subway writer in a choke hold will be charged today. 0:00:29.760 --> 0:00:33.640 Bluss Upstate New York and the city clash over bussing migrants. 0:00:33.720 --> 0:00:36.440 I'm Michael Barber Moore. Hey, I'm John Staves Swards. 0:00:36.440 --> 0:00:39.080 Sports losses of the Mets and Yankees. The Devil season 0:00:39.200 --> 0:00:42.159 ended in overtime, the Knicks at Game six tonight in Miami. 0:00:43.640 --> 0:00:47.080 That's all straight ahead on Bloomberg day Break, the Business 0:00:47.080 --> 0:00:49.560 news You need to starn your day in just one 0:00:49.680 --> 0:00:54.840 fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business. 0:00:54.600 --> 0:01:00.600 App, and everywhere you get your podcasts. Good morning, I'm 0:01:00.640 --> 0:01:01.680 Nathan Hager. 0:01:01.560 --> 0:01:04.800 And I'm Karen Moscow. Here are the stories we're following today. 0:01:05.240 --> 0:01:08.680 We begin in Washington, where today's debt ceiling meeting between 0:01:08.680 --> 0:01:12.319 the President and congressional leaders has been canceled. Amy Morris 0:01:12.360 --> 0:01:15.319 has details from our Bloomberg ninety nine one newsroom in Washington. 0:01:15.800 --> 0:01:18.720 House Speaker Kevin McCarthy says leaders agreed it would be 0:01:18.760 --> 0:01:22.559 more productive to let the staff continue talks behind the scenes. 0:01:22.640 --> 0:01:23.360 The White House. 0:01:23.160 --> 0:01:24.120 Didn't cancel the meeting. 0:01:24.280 --> 0:01:26.680 All the leaders decided it's probably the best of our 0:01:26.720 --> 0:01:29.679 interest to let the staff meet again before we get 0:01:29.680 --> 0:01:30.199 back together. 0:01:30.240 --> 0:01:32.720 Republicans say they'll agree to raise the debt ceiling in 0:01:32.800 --> 0:01:35.880 exchange for budget cuts. The President says the cuts should 0:01:35.920 --> 0:01:39.320 be a separate negotiation and that the current GOP proposal 0:01:39.400 --> 0:01:40.240 is just too harsh. 0:01:40.319 --> 0:01:42.840 He wants to cut twenty two percent of everything that 0:01:42.959 --> 0:01:45.800 isn't defense spending, Social Security, or Medicare. 0:01:45.959 --> 0:01:49.120 The meeting has been tentatively rescheduled for early next week. 0:01:49.360 --> 0:01:52.440 The Treasury Department warns the US could default on payments 0:01:52.480 --> 0:01:55.320 as soon as June first. In Washington. I'm Amy Morris, 0:01:55.360 --> 0:01:56.280 Bloomberg Daybreak. 0:01:56.400 --> 0:01:58.919 All right, Amy, thanks well. Plenty of talk this morning 0:01:58.960 --> 0:02:02.200 on the consequences of not reaching a debt deal. We 0:02:02.240 --> 0:02:05.080 spoke with Treasury Secretary Janet Yellen just moments ago. 0:02:05.600 --> 0:02:10.920 There is no satisfactory solution for the United States, a 0:02:11.000 --> 0:02:16.639 solution that will be good for the economy and financial markets, 0:02:17.120 --> 0:02:22.120 other than Congress acting to raise the debt ceiling. There 0:02:22.120 --> 0:02:26.160 are potential different paths that could be taken if that 0:02:26.320 --> 0:02:30.760 doesn't happen, but there is not a single thing that 0:02:30.919 --> 0:02:35.040 can be done that will save the United States from 0:02:35.200 --> 0:02:39.520 considerable economic and financial damage. 0:02:39.680 --> 0:02:42.760 Treasury Secretary Janet Yellen made the comments to Bloomberg's and 0:02:42.840 --> 0:02:45.280 Marie hor Dern at the G seven meetings in Japan. 0:02:45.440 --> 0:02:48.800 Stay tuned for the full exclusive interview coming up shortly 0:02:48.840 --> 0:02:50.120 on Bloomberg Daybreak. Well. 0:02:50.160 --> 0:02:52.720 Karen Jamie Diamond is also weighing in on the debt 0:02:52.720 --> 0:02:55.440 limits stalemate. The CEO of JP, Morgan Chase, says a 0:02:55.560 --> 0:02:58.040 US default would be potentially catastrophic. 0:02:58.400 --> 0:03:01.000 The closer you get to it, you will panic, and 0:03:01.040 --> 0:03:03.400 so the closes you get you have, markets get volatile. 0:03:03.480 --> 0:03:06.240 Maybe there's Doc mar go down the Treasury. Markets will 0:03:06.240 --> 0:03:09.320 have their own problems. It's amazing you already have certain 0:03:09.360 --> 0:03:12.720 T bills trading three percent and right next one five percent. 0:03:13.080 --> 0:03:15.720 This is not good and people just remember the American 0:03:16.160 --> 0:03:20.480 financial system is the foundation to the global economics system, 0:03:20.480 --> 0:03:22.760 and so in the closes we get more panic, we 0:03:22.840 --> 0:03:23.760 might get downgraded. 0:03:23.880 --> 0:03:26.720 Jamie Diamond's also chiming in on the banking crisis, telling 0:03:26.760 --> 0:03:29.160 us it's time for regulators to help put an end 0:03:29.240 --> 0:03:30.040 to the turmoil. 0:03:30.480 --> 0:03:33.560 Well, Nathan, we've heard from Janet Yellen and Jamie Diamond 0:03:33.600 --> 0:03:36.320 on the debt ceiling. Now we're learning they'll discuss the 0:03:36.360 --> 0:03:40.160 issue together. Politico is reporting Yellen, Diamonds, City Group CEO 0:03:40.240 --> 0:03:43.440 Jane Fraser, and other members of the Bank Policy Institute 0:03:43.600 --> 0:03:46.520 will meet next week to discuss the debt limited pass. 0:03:46.800 --> 0:03:50.240 Outside the debt debate, Karen focus remains on the southern border, 0:03:50.280 --> 0:03:53.119 where the US is facing a record surge of migrants. 0:03:53.160 --> 0:03:57.400 Title forty two restrictions ended just before midnight. Already this week, 0:03:57.440 --> 0:04:01.640 illegal border crossings have top ten thousand. Her day, Republican 0:04:01.680 --> 0:04:04.800 Senator Ted Cruz says the situation is overwhelming. 0:04:05.040 --> 0:04:06.000 This is deliberate. 0:04:07.280 --> 0:04:10.520 This is a decision that was made by President Joe 0:04:10.520 --> 0:04:14.920 Biden and Kamala Harris and Congressional Democrats open up the 0:04:14.960 --> 0:04:18.640 border to what is nothing less than an invasion. 0:04:19.040 --> 0:04:22.000 Senator Cruz spoke along the border in Brownsville, Texas. The 0:04:22.040 --> 0:04:24.440 White House says tens of thousands of border agents are 0:04:24.520 --> 0:04:28.400 enforcing a new policy to deter illegal crossings. Democratic Congressman 0:04:28.440 --> 0:04:30.880 Henry Quaar of Texas says the border may be little 0:04:30.880 --> 0:04:32.600 more than a speed bump for migrants. 0:04:32.960 --> 0:04:35.960 I'm looking at the numbers that Border Patrol has in 0:04:36.040 --> 0:04:40.040 their facilities, and I can say this, on the average, 0:04:40.080 --> 0:04:43.640 they're like one hundred and thirty five percent over. I 0:04:43.680 --> 0:04:45.480 mean that is capacity. 0:04:46.120 --> 0:04:48.760 Democrat Henry Quaar of Texas spoke with Joe Matthew and 0:04:48.839 --> 0:04:51.640 Kaylee Lines on Bloomberg's Sound on Catch the Show weekdays 0:04:51.640 --> 0:04:53.919 from one to three pm Eastern Non Bloomberg Radio. 0:04:54.320 --> 0:04:57.560 Well, we turn to geopolitics now, Nathan Us China relations 0:04:57.600 --> 0:05:00.159 are in focus. There is a glimmer of hope that 0:05:00.240 --> 0:05:03.239 tensions may be easing a bit. And Bloomberg's Ed Baxter 0:05:03.360 --> 0:05:04.560 has the story. 0:05:04.600 --> 0:05:07.920 The two day meetings in Vienna between National Security Advisor 0:05:08.000 --> 0:05:11.640 Jake Sullivan and China's Foreign Minister Wang Yi. The White 0:05:11.640 --> 0:05:16.000 House characterizes it as substantive and constructive. The White House 0:05:16.000 --> 0:05:19.480 statement says key issues in the US, China bilateral relationship, 0:05:19.560 --> 0:05:24.040 global and regional security issues, Russia's war against Ukraine, and 0:05:24.080 --> 0:05:27.560 the crosstraight issues China. Shinwa fram the meeting in a 0:05:27.640 --> 0:05:31.279 similar way, saying the talks were constructive. The hope is 0:05:31.360 --> 0:05:33.920 they will set the stage for a Biden She summit 0:05:34.480 --> 0:05:37.159 in San Francisco. I'm at Baxter Bloomberg Daybreak. 0:05:37.279 --> 0:05:37.800 Thank you, Ed. 0:05:37.920 --> 0:05:41.120 Let's turn to some corporate news this morning. Twitter appears 0:05:41.120 --> 0:05:43.680 to be getting a management change at the very top. 0:05:43.880 --> 0:05:47.160 Let's get the details live from Bloomberg. Steve Rappaport, Good morning. 0:05:46.920 --> 0:05:48.520 Steve, Good morning, Nathan and Karen. 0:05:48.600 --> 0:05:48.920 Elon. 0:05:49.040 --> 0:05:51.679 Musk says the next CEO of Twitter will be a woman, 0:05:51.800 --> 0:05:54.120 Though he didn't name the successor, signs point to an 0:05:54.200 --> 0:05:58.160 NBC Universal executive. The Wall Street Journal reports Linda Yakarino 0:05:58.240 --> 0:06:00.520 is in talks for the job. Yakarino is chair of 0:06:00.520 --> 0:06:04.679 Global Advertising and Partnerships at NBCUniversal Media. She helped launch 0:06:04.680 --> 0:06:08.280 the streaming service Peacock and also oversaw high profile events 0:06:08.320 --> 0:06:10.800 like the Super Bowl and the Olympics. Back in December, 0:06:10.880 --> 0:06:13.400 Muskin and Twitter poll asked users if he should step down. 0:06:13.640 --> 0:06:16.840 More than fifty seven percent said Yes Live in New York. 0:06:16.839 --> 0:06:19.000 I'm Steve Rappaport Bloomberg Daybreak Right. 0:06:19.040 --> 0:06:21.159 Steve, thanks, and we have economic data out of Britain 0:06:21.200 --> 0:06:24.599 this morning. The UK economy grew slowly in the first quarter, 0:06:24.720 --> 0:06:28.440 even though strikes sharply curtailed activity. In March, GDP was 0:06:28.560 --> 0:06:30.880 up one tenth of one percent from the prior year, 0:06:30.960 --> 0:06:33.320 and that left the UK on track for anemic growth 0:06:33.320 --> 0:06:34.240 in the first half. 0:06:34.320 --> 0:06:40.039 And this is Bloomberg, Tim. 0:06:39.839 --> 0:06:40.840 And I to take a look at some of the 0:06:40.880 --> 0:06:43.440 other stories making news in New York and around the world. 0:06:43.520 --> 0:06:46.560 For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. 0:06:46.680 --> 0:06:49.840 Good morning. Nathan, a marine veteran, will be charged today 0:06:49.960 --> 0:06:53.919 with second degree manslaughter and the death of another subway writer. 0:06:54.160 --> 0:06:57.720 On May first. Prosecutors in New York say Daniel Penny 0:06:58.160 --> 0:07:01.360 used a chokehold on thirty year old Jordan Neely, who 0:07:01.400 --> 0:07:04.320 witnesses say was acting erratically on the New York City 0:07:04.360 --> 0:07:07.840 subway and threatening other passengers. Protesters have been in the 0:07:07.880 --> 0:07:10.720 streets of New York since Neely's death. They were out 0:07:10.720 --> 0:07:13.000 again last night. Activist Selena Trell. 0:07:13.400 --> 0:07:17.800 We need accountability and that comes from the mayor and 0:07:17.880 --> 0:07:18.840 the governor. 0:07:18.520 --> 0:07:23.760 Because his death is on their hands on agitimizing that 0:07:23.960 --> 0:07:24.800 type of murder. 0:07:25.080 --> 0:07:28.320 Activist Selena trell says there was no reason to strangle 0:07:28.360 --> 0:07:32.080 somebody to death. New York City and officials upstated are 0:07:32.120 --> 0:07:35.040 red odds, especially now that Title forty two has ended 0:07:35.480 --> 0:07:37.960 two bus loads and migrants have moved to a hotel 0:07:38.000 --> 0:07:42.120 in Newburgh. It comes as city officials are busting asylum seekers. 0:07:42.160 --> 0:07:45.800 North Residents of Rockland and Orange Counties have vowed to 0:07:45.800 --> 0:07:47.920 do everything in their power to prevent New York City 0:07:47.960 --> 0:07:51.880 Mayor Eric Adams from bussing the migrants. Adams sent them 0:07:51.960 --> 0:07:55.960 up states, saying the city's resources are strained at maximum capacity. 0:07:56.360 --> 0:07:59.560 Representative George Santos was back at work on Capitol Hill 0:07:59.800 --> 0:08:02.480 to vote on a bill he co sponsored that would 0:08:02.480 --> 0:08:06.520 helps states go after people who committed unemployment fraud during 0:08:06.560 --> 0:08:10.200 the pandemic. The Long Island Republican himself was arraigned this 0:08:10.280 --> 0:08:15.480 week on COVID unemployment fraud. South Carolina Republican Representative Nancy 0:08:15.560 --> 0:08:19.120 Mace is one of at least twelve GOP Congress members 0:08:19.400 --> 0:08:22.080 calling for Santos to step down or be expelled. 0:08:22.480 --> 0:08:24.720 I was actually said in January before he was indicted 0:08:24.760 --> 0:08:27.520 on these thirteen charges that he should resign, and I 0:08:27.600 --> 0:08:29.640 stand by that as one of the first Republicans. We 0:08:29.680 --> 0:08:31.720 have to police our own and hold our own accountable. 0:08:32.040 --> 0:08:34.079 And that's what that's what we need to be doing today. 0:08:34.600 --> 0:08:38.640 Congressman Santos has denied any wrongdoing. Donald Trump is appealing 0:08:38.640 --> 0:08:40.640 the verdict of a New York jury that found him 0:08:40.679 --> 0:08:44.640 liable for sexually abusing and defaming New York author E 0:08:44.760 --> 0:08:49.360 Gene Carroll and awarded her five million dollars in damages. Yesterday, 0:08:49.400 --> 0:08:52.400 the former president's lawyer filed a notice of appeal in 0:08:52.440 --> 0:08:55.559 federal court in Manhattan, two days after a jury decided 0:08:55.559 --> 0:08:58.920 against Trump. Global News twenty four hours a day, powered 0:08:58.920 --> 0:09:00.480 by more than twenty seven i have a one hundred 0:09:00.559 --> 0:09:03.360 journalists and analysts in over one hundred and twenty countries. 0:09:03.640 --> 0:09:06.120 I'm Michael Barr, and this is Bloomberg. Nathan. 0:09:06.160 --> 0:09:13.640 Okay, Michael, thanks time now for our Bloomberg Sports updates. 0:09:13.640 --> 0:09:15.880 For that, we bring in John stash Hour. Thanks Nathan. 0:09:15.960 --> 0:09:18.920 The NBA and NHL playoffs began with all five New 0:09:19.000 --> 0:09:21.280 York area teams, the Nets, Rangers, and Islanders all went 0:09:21.280 --> 0:09:23.360 out in the first round. That left the Knicks and 0:09:23.480 --> 0:09:25.640 the Devils, who trailed three games to won Game five 0:09:25.720 --> 0:09:29.439 at Carolina. Devils never trailed until seven minutes in just 0:09:29.559 --> 0:09:30.240 sudden death. 0:09:30.120 --> 0:09:32.559 Ack for drewy back to Gostas there at the left point. 0:09:32.920 --> 0:09:33.840 Now Cooke Kenya he. 0:09:33.920 --> 0:09:41.360 Top of the right circle. Yes, said the joy to 0:09:41.440 --> 0:09:45.600 the Todd Ference Finals, the Trains winning three two three 0:09:45.679 --> 0:09:49.400 over Time nine nine and Raleigh the co Also NHL 0:09:49.559 --> 0:09:51.720 Dallas beats Seattle for a three to two lead. NBA 0:09:51.800 --> 0:09:54.560 Denver won by twenty five at Phoenix, won the series 0:09:54.600 --> 0:09:57.000 in six. Boston state alive with the game six win 0:09:57.000 --> 0:10:00.240 at Philadelphia. As for the Knicks, they trailed Miami three one. 0:10:00.360 --> 0:10:02.280 Now it's three to two, but Ken they win tonight 0:10:02.400 --> 0:10:04.880 in Miami games three and four. There the Knicks led 0:10:04.920 --> 0:10:08.000 for only thirty three seconds over two games. Yankees and 0:10:08.120 --> 0:10:10.040 raise first to fourth the stadium. In a good look 0:10:10.080 --> 0:10:13.480 at why Tampa Bay is thirty and nine. Seven scoreless 0:10:13.480 --> 0:10:16.640 sittings from Drew Rassmussen raised broke open what was a 0:10:16.640 --> 0:10:18.680 scoreless game in the fifth inning. They won eight to two. 0:10:18.760 --> 0:10:21.600 They pulled away with six runs off three Yankee relievers. 0:10:21.640 --> 0:10:24.040 The Rays are nine games ahead of the Yanks, who 0:10:24.120 --> 0:10:26.840 will start Garrett Cole tonight. His last time out was 0:10:26.840 --> 0:10:29.800 in Tampa and Cole couldn't hold a six run lead. 0:10:29.840 --> 0:10:32.320 The Mets were shut out in Cincinnati five nothing. They've 0:10:32.360 --> 0:10:36.000 lost thirteen to the last seventeen. Mike Anderson, fired by 0:10:36.040 --> 0:10:39.320 Saint John's, has filed a lawsuits seeking forty five million 0:10:39.360 --> 0:10:42.679 dollars thirteen in back pay thirty four more impunitive damages. 0:10:43.000 --> 0:10:45.920 Anderson claims he was fired without cause and that Saint 0:10:46.000 --> 0:10:49.400 John's used his buyout money to pay his successor, Rick Pettino, 0:10:49.840 --> 0:10:50.680 John Stashellward. 0:10:50.679 --> 0:10:52.480 Bloomberg's courts. 0:10:54.360 --> 0:10:57.760 Live from coast to coast, from New York to San Francisco, 0:10:57.960 --> 0:11:03.120 Boston to Washington, dcationwide on Siriusxam, the Bloomberg Business Appen 0:11:03.240 --> 0:11:04.480 Bloomberg dot Com. 0:11:04.640 --> 0:11:09.439 This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. The 0:11:09.480 --> 0:11:12.240 only good outcome is raising the debt ceiling. That is 0:11:12.320 --> 0:11:16.000 yet another warning from Treasury Secretary Janet Yellen, who is 0:11:16.000 --> 0:11:19.840 cautioning on the catastrophic effects of a potential US debt default. 0:11:20.160 --> 0:11:22.840 Yellen says congressional leaders are running out of time and 0:11:23.080 --> 0:11:26.559 options to set aside their differences and find common ground 0:11:26.640 --> 0:11:30.080 so the government can pay its bills. Janet Yellen sat 0:11:30.120 --> 0:11:32.959 down for an exclusive interview with Bloomberg's and Marie Hoarder 0:11:33.120 --> 0:11:35.800 this morning at the G seven gathering in Japan to 0:11:35.840 --> 0:11:39.640 discuss the debt ceiling and other issues facing the US. 0:11:39.760 --> 0:11:41.480 Let's bring you that discussion right now. 0:11:41.960 --> 0:11:44.480 Unfortunately for you, in a way, what is looming over 0:11:44.520 --> 0:11:48.480 this G seven meeting is these concerns coming out of Washington, 0:11:48.760 --> 0:11:52.520 the debt ceiling negotiations, as well as still tremors in 0:11:52.559 --> 0:11:53.640 the banking industry. 0:11:53.960 --> 0:11:55.440 I want to start with the debt ceiling. 0:11:55.600 --> 0:11:58.360 Sure, of course Wall Street is very. 0:11:58.200 --> 0:11:59.079 Concerned about this. 0:11:59.520 --> 0:12:01.760 There is that X state approaching that you laid out 0:12:01.760 --> 0:12:04.480 potentially as soon as June first. But there's an assumption 0:12:04.600 --> 0:12:09.040 on Wall Street that if there's no negotiated deal after 0:12:09.160 --> 0:12:13.360 June first, Treasury will still maintain payments on securities. Is 0:12:13.400 --> 0:12:14.920 that assumption correct? 0:12:15.280 --> 0:12:19.880 Look, you know, all I can say is that there 0:12:19.960 --> 0:12:25.560 is no satisfactory solution for the United States, a solution 0:12:25.880 --> 0:12:30.720 that will be good for the economy and financial markets. 0:12:31.160 --> 0:12:36.160 Other than Congress acting to raise the debt ceiling. There 0:12:36.200 --> 0:12:40.199 are potential different paths that could be taken if that 0:12:40.400 --> 0:12:44.880 doesn't happen. But there is not a single thing that 0:12:44.960 --> 0:12:49.080 can be done that will save the United States from 0:12:49.240 --> 0:12:53.559 considerable economic and financial damage. 0:12:54.040 --> 0:12:57.440 But this planned was outlined back in twenty eleven, and 0:12:57.520 --> 0:12:59.800 you were there at the FMC meeting about it. 0:13:00.040 --> 0:13:00.600 It's said that. 0:13:00.559 --> 0:13:05.280 Treasury principles and securities would be paid. Is this something 0:13:05.360 --> 0:13:08.160 that at least for contingency plan has been discussed with 0:13:08.200 --> 0:13:08.760 the president. 0:13:09.480 --> 0:13:14.080 So my understanding I was at the FED in twenty 0:13:14.120 --> 0:13:18.120 eleven is that this plan was never presented to the 0:13:18.160 --> 0:13:20.199 President and never approved. 0:13:20.760 --> 0:13:22.560 And would you present it now? 0:13:23.320 --> 0:13:24.280 Look, we would. 0:13:26.480 --> 0:13:31.720 We were working full time to work with Congress to 0:13:31.800 --> 0:13:35.280 raise the debt ceiling. That's where our focus is. We 0:13:35.400 --> 0:13:39.839 know that the only good outcome is one in which 0:13:40.000 --> 0:13:45.840 Congress act acts, as it has many times, almost eighty 0:13:45.920 --> 0:13:48.439 times since nineteen sixty, to. 0:13:50.040 --> 0:13:51.000 Raise the debt ceiling. 0:13:51.679 --> 0:13:57.560 What global markets and American households and businesses need to 0:13:57.600 --> 0:14:02.760 see is that we have a Congress that's committed to 0:14:02.840 --> 0:14:06.400 paying the bills that we've incurred as a consequence of 0:14:06.440 --> 0:14:10.400 our legislation, that we're not a dead beat country. And 0:14:10.840 --> 0:14:14.559 if Congress fails to do that, it really impairs our 0:14:14.600 --> 0:14:18.960 credit rating. We have to default on some obligation, whether 0:14:19.000 --> 0:14:24.880 it's treasuries or payments to Social Security recipients. That's something 0:14:24.960 --> 0:14:29.680 America hasn't done since seventeen eighty nine, and we shouldn't 0:14:29.720 --> 0:14:35.560 start now. So we've not discussed what to do if 0:14:35.560 --> 0:14:38.520 that doesn't occur with the President. Our focus is on 0:14:38.920 --> 0:14:39.880 getting it done. 0:14:39.680 --> 0:14:42.120 Because, as you know, treasuries are the bedrock of a 0:14:42.160 --> 0:14:46.040 global financial system, and the asset managers I speak to 0:14:46.080 --> 0:14:49.720 the investors, they don't have the luxury of not contingency planning, 0:14:50.120 --> 0:14:53.200 So at this point should they assume that debt may 0:14:53.240 --> 0:14:55.040 not be serviced if there's no deal. 0:14:56.040 --> 0:15:04.239 Look, if Congres raise the debt ceiling, we face economic 0:15:04.320 --> 0:15:07.040 and financial catastrophe. 0:15:06.360 --> 0:15:07.320 One way or the other. 0:15:08.000 --> 0:15:11.880 And that's why our focus is on making sure the 0:15:11.920 --> 0:15:16.440 Congress does raise the debt ceiling. I feel that that's 0:15:16.480 --> 0:15:20.000 something we're going to succeed at doing, and we're working 0:15:20.080 --> 0:15:23.480 hard to make sure that that gets done. 0:15:23.680 --> 0:15:26.000 As we get closer to June first, will you alert 0:15:26.040 --> 0:15:27.800 Congress on a more precise date? 0:15:28.280 --> 0:15:32.560 Yes, I will update Congress as we have available information. 0:15:32.600 --> 0:15:35.560 But anything new now or still June first. 0:15:35.760 --> 0:15:39.880 Well, what I've said is early June, and potentially as 0:15:39.920 --> 0:15:43.000 early as June one. As we get closer, I may 0:15:43.040 --> 0:15:47.200 be able to provide more refined guidance. But you know, 0:15:47.280 --> 0:15:50.840 there is a lot of uncertainty about the exact level 0:15:50.880 --> 0:15:55.040 of cash balances and payments that we have to make 0:15:55.480 --> 0:15:59.760 from day to day, and so there remains a level 0:15:59.760 --> 0:16:03.680 of uncertainty about precisely when we would run out of 0:16:04.120 --> 0:16:06.360 cash to be able to pay the government's bills. 0:16:06.560 --> 0:16:08.880 Jamie Diamond was on Bloomberg TV yesterday and he said 0:16:08.880 --> 0:16:12.120 he set up a war room for contingency planning. Are 0:16:12.160 --> 0:16:14.200 you actively speaking to executives. 0:16:14.760 --> 0:16:19.920 I have talked, not within the last few weeks, but earlier, 0:16:21.040 --> 0:16:24.160 around the time in January when I sent my first letter, 0:16:24.600 --> 0:16:29.640 I talked to a number of bank executives. More recently, 0:16:29.760 --> 0:16:35.040 I've talked to leaders of business businesses in different sectors 0:16:35.080 --> 0:16:38.200 of the economy, and I will be meeting with senior 0:16:38.280 --> 0:16:42.280 bankers next week when I get back. But I want 0:16:42.320 --> 0:16:45.960 to understand how they're thinking about the debt ceiling, and 0:16:46.120 --> 0:16:49.960 what I'm hearing is that it is a grave source 0:16:50.000 --> 0:16:54.160 of uncertainty. That is one of the things that businesses 0:16:54.200 --> 0:16:58.280 are really concerned about. One of the biggest sources of 0:16:58.400 --> 0:17:03.400 uncertainty in terms of many big American businesses. 0:17:03.480 --> 0:17:05.560 That's where we're hearing too at Bloomberg. 0:17:06.040 --> 0:17:08.719 How frustrated are you potentially that these bank executives are 0:17:08.720 --> 0:17:13.480 speaking to are not putting pressure on Congress, particularly Republicans. 0:17:14.359 --> 0:17:22.760 Well, you know, Wall Street executives and American business people 0:17:23.240 --> 0:17:27.560 have always spoken out about their concerns about the debt sealing, 0:17:27.960 --> 0:17:32.160 and I think it's appropriate for them to talk about 0:17:32.480 --> 0:17:36.119 how they see the debt sealing is impacting the American 0:17:36.200 --> 0:17:41.520 economy and the global economy. So those voices, you know, 0:17:41.560 --> 0:17:45.280 we want to hear voices of people who will be 0:17:45.359 --> 0:17:46.240 affected by this. 0:17:46.880 --> 0:17:49.080 On top of all this, there's still some tremors in 0:17:49.119 --> 0:17:52.440 the banking system. In two months almost to the date, 0:17:52.520 --> 0:17:56.640 we've had four US lenders fail, But the administration continuously 0:17:56.680 --> 0:17:59.680 says that the banking sector is sound and resilient. Is 0:17:59.720 --> 0:18:02.760 that a fair assessment when you look at the regional 0:18:02.800 --> 0:18:04.639 banking sector, Well. 0:18:04.520 --> 0:18:08.080 The regional banks have been under some stress, but I 0:18:08.119 --> 0:18:12.280 think the banks that have failed have had some very 0:18:12.400 --> 0:18:18.199 unique characteristics that have made them vulnerable. The banks that 0:18:18.400 --> 0:18:27.080 failed tended to have substantial losses marked to market losses 0:18:27.440 --> 0:18:32.080 on their whole to maturity portfolios. So although their regulatory 0:18:32.200 --> 0:18:39.760 capital wasn't impaired, their tangible equity was diminished. And they 0:18:39.840 --> 0:18:46.200 simultaneously had a very high proportion of uninsured deposits. And 0:18:46.680 --> 0:18:50.960 that profile is not very common. But look, a lot 0:18:51.000 --> 0:18:56.240 of banks, particularly regional banks, are seeing their earnings come 0:18:56.320 --> 0:19:00.199 under pressure. The amount that they're having to pay for 0:19:00.400 --> 0:19:04.760 deposits is rising, and in many cases their investments are 0:19:04.760 --> 0:19:08.880 at lower interest and their stock prices are coming under pressure. 0:19:09.400 --> 0:19:15.800 But most banks now, even including the ones that are 0:19:15.920 --> 0:19:21.119 seeing pressure on their stock prices, have solid liquidity, would 0:19:21.119 --> 0:19:25.040 be able to manage paying off on insured depositors if 0:19:25.080 --> 0:19:26.200 they were to flee. 0:19:27.280 --> 0:19:30.680 Are you confident no other regional or small lenders will fail? 0:19:31.640 --> 0:19:34.520 Well, look, I don't want to talk about the situations 0:19:34.600 --> 0:19:39.960 of individual banks, but what I see is a banking 0:19:40.040 --> 0:19:46.000 system that overall is well capitalized, still has very solid earnings, 0:19:46.440 --> 0:19:52.800 and we've improved the available liquidity to the banking system 0:19:53.320 --> 0:19:57.680 and think that banks are going to be able to 0:19:57.760 --> 0:20:01.639 survive this. But you know, we're monitoring this situation very 0:20:02.040 --> 0:20:02.840 very carefully. 0:20:03.040 --> 0:20:05.040 The other big elephant in the room at this G 0:20:05.119 --> 0:20:07.720 seven meeting is, of course China, and you spoke about 0:20:07.720 --> 0:20:10.920 this yesterday, how you're working with your peers to look 0:20:10.920 --> 0:20:14.560 out outbound investment potentially when it comes to China. This 0:20:14.600 --> 0:20:16.359 would add on to what the United States has already 0:20:16.400 --> 0:20:20.000 done with export controls and sanctions. And you recently gave 0:20:20.200 --> 0:20:23.840 this speech about China and how the US views economic policy, 0:20:23.880 --> 0:20:27.440 and what you made clear is that national security concerns 0:20:27.480 --> 0:20:31.600 will be paramount even if it becomes to economic concerns. 0:20:32.080 --> 0:20:36.040 So I'm curious why the US still has tariffs on 0:20:36.160 --> 0:20:41.480 China if that is an economic benefit to many US consumers. 0:20:42.800 --> 0:20:48.360 Well, look, you know there was a so called three 0:20:48.440 --> 0:20:52.880 oh one action that was filed against China for unfair 0:20:53.000 --> 0:20:59.040 trade practices, and China wis fan guilty of three oh 0:20:59.160 --> 0:21:04.640 one violations, and those tariffs were put on place as 0:21:05.080 --> 0:21:12.200 retaliation for unfair trade practices. The Trump administration arrived at 0:21:12.200 --> 0:21:15.400 an agreement with China that might have led to lowering them. 0:21:15.840 --> 0:21:17.880 China didn't carry out their part. 0:21:18.359 --> 0:21:22.320 But are there any national security concerns about that's. 0:21:22.240 --> 0:21:29.320 Upholster that's not a national security concern. That's unfair trade practices, 0:21:29.520 --> 0:21:35.040 so that's not national security related. We do have concerns 0:21:35.240 --> 0:21:39.040 with some of the practices that China has engaged in 0:21:40.000 --> 0:21:45.560 with respect to trade and investment, whether it's forced technology transfer, 0:21:46.280 --> 0:21:54.080 massive subsidies to industries that really distort patterns of international trade. 0:21:55.280 --> 0:21:57.320 Yeah, and that'll be a big topic as well when 0:21:57.440 --> 0:22:02.399 President Biden meets with the leaders in Hiroshima, but also 0:22:02.480 --> 0:22:05.520 on China. I know that you're looking forward to potentially 0:22:05.560 --> 0:22:08.320 going to Beijing, you said at the appropriate time. We 0:22:08.440 --> 0:22:11.960 now have your counterpart in place, Holy Pong. He's been 0:22:11.960 --> 0:22:15.199 there for several weeks, so are there any plans in 0:22:15.240 --> 0:22:15.719 the works. 0:22:16.040 --> 0:22:18.960 I expect to travel there. I can't tell you what 0:22:19.000 --> 0:22:23.440 the date is. We have a number of senior American 0:22:23.520 --> 0:22:27.800 officials that are likely to go. We need to sequence 0:22:27.880 --> 0:22:29.959 them appropriately. 0:22:29.240 --> 0:22:30.479 And will you'll be there. 0:22:32.440 --> 0:22:36.200 I don't know who will be the first, but we're 0:22:36.240 --> 0:22:39.640 working with the Chinese and discussing among ourselves with the. 0:22:39.600 --> 0:22:43.399 Appropriate call yet though with Hulifong or you're just going 0:22:43.480 --> 0:22:44.600 to wait to seem in person. 0:22:45.240 --> 0:22:48.760 I haven't had contact yet with my new counterpart. 0:22:49.000 --> 0:22:52.240 And if I could ask one final question, Madame Secretary, 0:22:52.480 --> 0:22:54.280 I know you're staying on for the remainder of the 0:22:54.280 --> 0:22:58.119 Biden administration, but President Biden also announced he's running for 0:22:58.160 --> 0:23:02.640 twenty twenty four. Do you consider another four years at Treasury? 0:23:02.960 --> 0:23:08.080