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Speaker 1: Live from our nation's came this budget thing is going

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Speaker 1: to do nothing spaceports. I still think it's interesting President

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Speaker 1: Trump not playing his cards yet. Headlines Policy and Politics

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Speaker 1: colliding sound on with Kevin's related the insiders, the influencers,

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Speaker 1: the insides. I would rather see a congressional solution. It's

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Speaker 1: part of my DNA. The Senate map in looks a

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Speaker 1: lot different than it looked in. You really have a

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Speaker 1: divide within Team Trump. The present has to do exactly

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Speaker 1: what people send him here to do, which is to

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Speaker 1: get it done. He's sound on with Kevin's. He related

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Speaker 1: on Bloomberg one and one five seven m h D

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Speaker 1: two Botimore Fed Day, Folks fed Day, Folks Fed Chair

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Speaker 1: j Powell testifying before the House Financial Services Committee, Maxine

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Speaker 1: Waters territory, but AOC stole the show. Not even Maxine

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Speaker 1: Waters could get Larry Cudlow to agree with Democrats on something,

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Speaker 1: but Alexandria Acasio Cortez could. We're gonna I'm saying this right, folks,

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Speaker 1: AOC and Larry Cudlow agree on something, and we found

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Speaker 1: that out today at the House Financial Services Committee hearing room.

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Speaker 1: I'm gonna bring that the policy on that the yield curve.

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Speaker 1: We're also going to talk about rate cuts and the latest,

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Speaker 1: the latest on this horrific, horrific scandal regarding Jeffrey Epstein

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Speaker 1: and now Labor Secretary Alexander Acosta. Acosta says he's stay

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Speaker 1: and put. He gave a press conference earlier this afternoon.

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Speaker 1: We will bring you his remarks. We have an all

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Speaker 1: star panel to help us navigate through what what became

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Speaker 1: a fascinating, busy, busy news Today. Antoine cea right democratic strategist,

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Speaker 1: the founder and CEO of Blueprint Strategy, former senior adviser

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Speaker 1: to Hillary Clinton's as focusing primarily in South Carolina. And

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Speaker 1: Maddie Zuppler, a Front of the program, senior fellow at

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Speaker 1: the National Taxpayers Union and former Coalitions director for the

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Speaker 1: House Republican Conference. I'll also bring you my exclusive interview

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Speaker 1: with the top Republican on the House Financial Services Committee,

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Speaker 1: Congressman Patrick McHenry, a Republican from North Carolina. Busy, busy,

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Speaker 1: busy newsday, US Labor Secretary alex Acosta defending his handling

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Speaker 1: of Jeffrey Epstein's plea deal when he was the top

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Speaker 1: federal prosecutor in Southern Florida over a decade ago. I'm

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Speaker 1: reading from the Bloomberg terminal. He says his relationship with

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Speaker 1: President Trump remains good. And despite the renewed scrutiny since

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Speaker 1: Epstein's arrest over the weekend on fresh charges out of

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Speaker 1: New York. Of course, Jeffrey Epstein, the billionaire financier of

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Speaker 1: New York of Florida fame, has been charged charged facing

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Speaker 1: federal charges for having sex with miners uh and is

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Speaker 1: charged with sex trafficking. Now it has engulfed, engulfed the

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Speaker 1: country's attention as accusers are coming forward. Uh. And it's

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Speaker 1: a scandal that keeps growing politicians on both sides of

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Speaker 1: the aisle distancing themselves from Jeffrey Epstein, who was a staple,

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Speaker 1: a staple amongst the social certain social social circles in

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Speaker 1: the elite, elite, upper echelons of society, most mostly in

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Speaker 1: in Florida as well as in New York. With me

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Speaker 1: for the hour, Antoine Seawright, Democratic strategist and Maddie Douppler,

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Speaker 1: a senior fellow at the National Taxpayers Union, former Coalitions

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Speaker 1: director for the House Republican Conference. Maddie, I'll start with you.

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Speaker 1: I want to get your take, because Secretary Acosta really

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Speaker 1: facing accusations of having given a sweetheart deal, as many

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Speaker 1: are calling it too, Jeffrey Epstein facing calls for his resignation.

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Speaker 1: I want to play for you what he had to

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Speaker 1: say earlier today regarding the his handling of the Jeffrey

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Speaker 1: Epstein case when he was the U S Attorney in Florida.

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Speaker 1: Take a Lisson then pleased that the New York prosecution

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Speaker 1: is going forward. They brought these charges based on new

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Speaker 1: evidence against Jeffrey Epstein, who is now a retrostered sex offender.

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Speaker 1: And this is a very very good thing. His acts

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Speaker 1: are despicable, and the York prosecution offers an important opportunity

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Speaker 1: two more fully bring Epstein to justice. That was Labor

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Speaker 1: Secretary alex A. Costa, speaking earlier today to reporters in Washington,

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Speaker 1: d C. Hanging on to his job. Maddie, Well, you know,

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Speaker 1: and that's the reason I guess that he decided it

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Speaker 1: was prudent to get up and hold a press conference

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Speaker 1: about a case that he participated in over a decade ago.

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Speaker 1: I don't understand this calculus, particularly at a time where

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Speaker 1: we have sixty five different news cycles that happen in

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Speaker 1: one day. I if I were advising him on this,

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Speaker 1: I would say, just be quiet for a few moments,

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Speaker 1: for a few days, and another headline will take the

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Speaker 1: heat off of you. I understand that he feels like

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Speaker 1: he needs to get up and defend this, but you know,

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Speaker 1: I'm also not a lawyer, but I think relitigating a

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Speaker 1: case that has been dormant for so long long will

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Speaker 1: only serve to create troubles for him in the future.

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Speaker 1: Mr C write, you can run, but you can't have well,

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Speaker 1: I like how you've respectfully cleared your throat. You can

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Speaker 1: but you can run, but you can't have Um. This

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Speaker 1: is very unfortunate, and we all know this was a

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Speaker 1: secretary under the Ford or fourth president of the United States.

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Speaker 1: Republicans will be driving themselves off the political cliff. But

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Speaker 1: we also know is the fact that for the first

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Speaker 1: time in a long time, we see Democrats and Republicans

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Speaker 1: who agree that he either needs to resign or the

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Speaker 1: president must remove him, or some action needs to be

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Speaker 1: taken because he cannot fulfill his job. Knowing the situation,

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Speaker 1: which Republicans seventeen that there were several mention in the Hill.

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Speaker 1: Um it was several mention in the Hill today, UM

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Speaker 1: article today to talk about something has to be done

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Speaker 1: very much immediately. Several US Senates, but there's an audience

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Speaker 1: of one, right, and that's President Trump. And and well,

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Speaker 1: that's that's what his interview was. That's what this interview

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Speaker 1: was about. This interview was about tickling the ear of

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Speaker 1: Donald Trump to give some political cover to drag this

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Speaker 1: out as much as possible, to your point, to fastward

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Speaker 1: to a different news cycle. And I do think that

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Speaker 1: you raise a good point, which is kind of the

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Speaker 1: bipartisan nature of some of the I don't want to

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Speaker 1: say the allegations here, but there have been, there's been,

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Speaker 1: um some conversation that it's possible that this web goes

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Speaker 1: much deeper and it will include people on both sides

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Speaker 1: of the aisle. If indeed, what the Feds are trying

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Speaker 1: to do here is not just take Epstein down, but

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Speaker 1: other people who were involved in a bigger scandal. There

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Speaker 1: was a moment, there was a moment at this press

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Speaker 1: conference with Labor Secretary Acosta where he was asked by

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Speaker 1: a reporter if he had any regrets, any regrets for

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Speaker 1: how he handled this, And in hindsight, you know I

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Speaker 1: covered the Jerry Sandusky trial. Now what was that eight eight,

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Speaker 1: nine years ago? And this moment in this press conference

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Speaker 1: reminded me of when pent the late now Penn State

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Speaker 1: football coach Joe Paterno, was asked by a reporter if

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Speaker 1: he had any regrets, and Joe Paterno said, quote, I

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Speaker 1: wish I would have done more. Secretary Acosta today, when

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Speaker 1: asked that same question similar question, said that it is

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Speaker 1: a quote very hard question to answer. Uh, and I'm

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Speaker 1: reading from the Hill newspaper, stressed that he believes it

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Speaker 1: would have been too risky to quote unquote roll the

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Speaker 1: dice by taking Epstein to trial with the evidence his

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Speaker 1: office had. We did what we did because we wanted

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Speaker 1: to see Epstein go to jail. He needed to go

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Speaker 1: to jail, is what is what he had said. Uh,

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Speaker 1: you know, unlike what happened in the in the public sphere,

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Speaker 1: I guess you would call it at Penn State or

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Speaker 1: to some extent in the Catholic Church about who knew

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Speaker 1: what and when and how this system, how the judicial

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Speaker 1: system handles it in this case, Acosta's role in the

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Speaker 1: judicial system, really it's up to press it in Trump

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Speaker 1: if he wants to keep him on board. And I

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Speaker 1: want to play for you what Secretary a Costa had

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Speaker 1: to say with regards to his relationship with President Trump

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Speaker 1: as of today, take a lesson my relationship with the

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Speaker 1: President's outstanding. Uh. He has, I think, very publicly, Um,

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Speaker 1: made clear that that I've got his support. That was

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Speaker 1: Secretary Acosta saying that the President does support him. Yesterday

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Speaker 1: we brought you the news the President Trump had said

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Speaker 1: that he does feel sorry for the criticism that Acosta

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Speaker 1: is receiving. The President also saying that he still has

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Speaker 1: confidence in his labor secretary. Uh. And you know, I mean,

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Speaker 1: you know this, Antwana, I mean, ultimately it's up. It

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Speaker 1: really doesn't matter what what who's calling on him to

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Speaker 1: resign is that the President Trump? Well, I know, but

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Speaker 1: this is where I think we have to put us

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Speaker 1: at the partisan wheelings and dealings of DC and do

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Speaker 1: what's right. Um, and we all know it's right. You know.

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Speaker 1: A lawyer friend of mine texted this to me during

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Speaker 1: the press cons He said, at what point is the

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Speaker 1: Costa going to get to the point where he admits

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Speaker 1: he violated federal law by not informing the victims about

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Speaker 1: the deal? He is defending. That's a real question, but

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Speaker 1: I don't think that we know that. I mean, the

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Speaker 1: whole premise of a Costas argument is that we did

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Speaker 1: not have the evidence to convict us. What we did

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Speaker 1: was in the interest of trying to make sure that

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Speaker 1: someone that we had a reasonable presumption was guilty got

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Speaker 1: too exactly exactly and so so. And then that's that's

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Speaker 1: the challenge here, particularly for a Costa, which is he's

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Speaker 1: not going to be able to disclose what evidence they

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Speaker 1: didn't have, because that's obviously a strama. But he also

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Speaker 1: can't go back and reopen this case to show listen,

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Speaker 1: we couldn't have proved beyond a reasonable doubt that this

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Speaker 1: was happening. Um, so we went with the tactic that

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Speaker 1: we thought would get the most amount of punishment that

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Speaker 1: we thought we could defend well, both of us and

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Speaker 1: not lawyers. But again, I think the point was he

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Speaker 1: did not inform the victims. And then this this press conference.

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Speaker 1: To me, this is why I got Piste off a boy.

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Speaker 1: The press conference. It seems as if he was trying

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Speaker 1: to of paint himself as a hero in all of this.

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Speaker 1: I mean, I don't understand the press I didn't. I don't.

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Speaker 1: I wouldn't say that he didn't apologize. He did not

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Speaker 1: apologize in that press conference. And you're you, you alluded

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Speaker 1: to this Hill article and I've got it in front

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Speaker 1: of me. Uh. This was published last night by Alexander

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Speaker 1: Bolton and Brett Samuel's Acosta on shaky ground as GOP

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Speaker 1: support waivers. They quote and not they quote a GOP

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Speaker 1: senator who spoke anonymously, uh, saying that he's on shaky ground.

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Speaker 1: But Ben Sass was on Fox News Martha McCallum show, uh,

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Speaker 1: and he said, quote the guy victimized does it's probably

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Speaker 1: scores of little girls, And the sentence he got was pathetic.

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Speaker 1: The sentence, of course he's alluding to, was with regards

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Speaker 1: to Acosta and every mom and dad in America frankly,

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Speaker 1: not just moms and dads, but anybody with a heart

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Speaker 1: should be heartbroken by what happened to those girls, to

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Speaker 1: those victims, but also with the absurdity of a sentence

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Speaker 1: that short. I mean, uh. Majority Leader McConnell offered no

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Speaker 1: defense of Acosta, and you know, I mean that that's

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Speaker 1: where things stand. But Acostas argument is, hey, we got

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Speaker 1: the evidence, we wanted, We wanted this this guy, this criminal,

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Speaker 1: this this behind bars, but we can only take one

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Speaker 1: shot at it, and we did the best we could

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Speaker 1: with the information that we had. Respectfully, I mean maybe

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Speaker 1: the tone. I mean we're going to talk about tone

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Speaker 1: again like we do in Washington, know all the time

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Speaker 1: over the president of tone, the tweets, blah blah blah.

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Speaker 1: But you know, I think I think the tone today, Maddie,

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Speaker 1: do you let me ask a question, do you think

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Speaker 1: the tone was a little tone deaf? I certainly think

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Speaker 1: that if you are going to create a platform where

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Speaker 1: you are making this argument, you need to be contrite

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Speaker 1: about the pain and suffering that is resulting from the circumstances,

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Speaker 1: even if you think you made the right decision legally.

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Speaker 1: I think showing that kind of empathy, um in contrition

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Speaker 1: that these circumstances, even a rose, is crucial. You know,

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Speaker 1: I judged my politics, and I take the temperature by

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Speaker 1: things most people don't. So as I spoken to my

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Speaker 1: barber earlier today and I asked him what the conversation

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Speaker 1: was in the bobershop, and he said, you know what,

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Speaker 1: people who look like you, Antoine, who are doing more

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Speaker 1: time for a whole lot less, and I think that's

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Speaker 1: why you see so many people angry and frustrated, you

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Speaker 1: know what that Well said. And coming up, we're gonna

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Speaker 1: we're gonna talk politics and policy. Panels going to stay.

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Speaker 1: Antoine Seawright, Maddie Tuppler, This is Sound On with Kevin

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Speaker 1: Cyril on Bloomberg and one oh five point seven f

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Speaker 1: m h D two boltom over. I'm Kevin Cirelli, chief

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Speaker 1: Washington correspondent from Bloomberg Television and Bloomberg Radio. It was

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Speaker 1: a busy day in the Rayburn House Office building where

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Speaker 1: FED Chair J Powell testified before the House Financial Services Committee,

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Speaker 1: chaired of course by Maxine Waters. But it was Alexandria

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Speaker 1: Acasio Cortez who was able to find common ground with

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Speaker 1: FED share Powell, as well as the President's Chief Economic

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Speaker 1: Advisor of the National Economic Council of Advice. There's Larry Cudlow.

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Speaker 1: We're gonna dive into that tidbit. Coming up with an

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Speaker 1: all star panel. Antoine ce Right, Democratic strategist, Maddie Duppler,

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Speaker 1: the former Coalitions director for the House Republican Conference. Now

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Speaker 1: she's a senior fellow at the National Taxpayers Union. We

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Speaker 1: can't have FED Day. We can't have jobs day without Maddie.

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Speaker 1: So I want to talk about AOC and Larry because

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Speaker 1: we were talking about that and I mean, I was like,

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Speaker 1: stop talking. We got to talk about it on air.

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Speaker 1: But before we get to that, the two biggest takeaways

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Speaker 1: of this are, it looks like there's going to be

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Speaker 1: a rate cut at the end of the month, that

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Speaker 1: the FED is going to cut interest rates. I mean,

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Speaker 1: he didn't. He left. I mean, it's the FEDS. So

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Speaker 1: it's like you're translating everything and FED speak, but he

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Speaker 1: didn't really. You know, investors on the street, they interpreted

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Speaker 1: his remarks is saying essentially, all right, there's gonna be

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Speaker 1: a rate cut at the end of the button. No. Yeah.

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Speaker 1: When you're listening to the chairman or to FED speak,

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Speaker 1: really what you're looking for is the dispositive, right. So

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Speaker 1: it's the fact that the FED chairman today did not

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Speaker 1: in any way dilute home that there would be a

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Speaker 1: rate cut at the end of the month that leads

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Speaker 1: us to believe better rate cut is coming. And I

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Speaker 1: think that that that's really the important takeaway here. He

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Speaker 1: talked a lot about what continues to weigh on his mind,

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Speaker 1: and thus what he thinks weighs on the global economy. Um,

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Speaker 1: trade being one of them, which I actually think is

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Speaker 1: interesting given that we saw some headlines about U S,

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Speaker 1: M c A and maybe some inertia behind some of

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Speaker 1: these trade pressures today. UM, it will be interesting, I

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Speaker 1: think as Powell travels to the other side of the

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Speaker 1: hill tomorrow whether there are any developments that he gets

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Speaker 1: asked about when it comes to their being progress on

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Speaker 1: the trade so before the big takeaway rate cut expected

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Speaker 1: at the end of the month. Rate cut expected at

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Speaker 1: the end of the month. This based upon FED chair J.

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Speaker 1: Powell's testimony before the House Financial Services Committee. But you

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Speaker 1: mentioned the uncertainties, and they keep talking about this all

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Speaker 1: the different FED folks, and when they're ever they're speaking publicly,

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Speaker 1: and FED share Powell as well about the uncertainty that

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Speaker 1: the trade disputes have injected into the economy. But it's

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Speaker 1: not making their decision. It's not impact their decision on rates, right,

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Speaker 1: And I should mention too that I think the other

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Speaker 1: kind of standout comment that the chairman made was that

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Speaker 1: the Job's report from last month, with which of course

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Speaker 1: we were talking about last week, which was very very

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Speaker 1: strong particulture and four thousand jobs to the US economy. Smattering, smattering, smashing.

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Speaker 1: I don't even know what words are trying to combine

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Speaker 1: their smashing expectations exactly right, um, And after a lackluster

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Speaker 1: jobs report the previous month, the Chairman had said, you know,

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Speaker 1: that really doesn't have a lot of bearing on our

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Speaker 1: calculus headed into July. Now, if you had been reading

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Speaker 1: his comments from yeah, we knew that he wasn't really

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Speaker 1: looking at jobs. He know. We know kind of what

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Speaker 1: Powell thinks about the employment picture. Something we're gonna talk

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Speaker 1: about a little bit earlier. His employment versus inflation, which

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Speaker 1: of course is the Fed's dual mandate. He has some

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Speaker 1: questions about whether or not, Uh, there's a clee between

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Speaker 1: those two components. Um. But when it comes to kind

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Speaker 1: of uncertainty and economy, he is looking at the global

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Speaker 1: tensions that have been and that have resulted from trade,

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Speaker 1: business investment in the United States as well another metrics

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Speaker 1: that allow us to gauge whether or not the economic

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Speaker 1: recovery will continue to He's cutting Uh, he's cutting interest rates,

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Speaker 1: and candidly, I mean that's what President Trump wants. President

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Speaker 1: Trump Antoine has been tweeting at FED chair Powell threatening

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Speaker 1: with this job. With regards to this, he says that

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Speaker 1: China is eating or lunch, eating or lunch and and

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Speaker 1: and you know, I I think the reason the president

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Speaker 1: at least this is what I gather from folks that

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Speaker 1: I talked with inside of the belt Way who are

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Speaker 1: a lot smarter than I am. They say, obviously he

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Speaker 1: can turn the FED chair into a uh into a

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Speaker 1: boogeyman should the economy goes south. But also he's tapping

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Speaker 1: into what folks associate the FED with, which is interest rates.

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Speaker 1: When people think of the FED outside of the belt

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Speaker 1: Way and all throughout the country in Wisconsin, Michigan, Ohio,

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Speaker 1: they think of the FED and they think of interest rates.

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Speaker 1: So if the President is tweeting and saying an interview

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Speaker 1: at the interview lower rates, lower rates, what does that mean?

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Speaker 1: It means folks and get alone. And that is communicating

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Speaker 1: to the type of voters, those swing voters that he's

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Speaker 1: going to need. But you were I were talking about

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Speaker 1: the stands point in the break Ah, he's getting it

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Speaker 1: from the President on Twitter. Vaccine Waters, who chairs the committee,

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Speaker 1: Let the hearing, Let the hearing with this moment take

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Speaker 1: a listen, Mr chairman. If you got a call from

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Speaker 1: the President today or tomorrow and he said I'm firing you,

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Speaker 1: pack up, it's time to go, what would you do? Well,

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Speaker 1: of course I would not do that. I can't hear you.

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Speaker 1: My answer would be no, I laughed. I mean you

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Speaker 1: got to the theater, go ahead. It's one. Well, that

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Speaker 1: was gonna be my point. That's I think that was

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Speaker 1: probably one of the bigger takeaways from today's hearing, the

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Speaker 1: fact that we know there's some political pressure um, which

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Speaker 1: is my mind unpresident from the President to show his

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Speaker 1: disgust and dislike for the fair Chair, and the Chair

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Speaker 1: was very clear that he would not resign, which I

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Speaker 1: think will be another shifting conversation politically. But it also

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Speaker 1: says to me, in typical Trump speak, is that he

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Speaker 1: is setting him up to point blame if things go

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Speaker 1: south at some point between now re election. But you

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Speaker 1: know what, he keeps keeping the rates low and then

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Speaker 1: doing he's doing exactly what what President Trump wants. It's

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Speaker 1: it's gonna be We're gonna stick with the Fed. There's

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Speaker 1: more to talk about with A O. C. And Larry Cudlow.

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Speaker 1: You're listening to sound on with Kevin Surreally on Bloomberg

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Speaker 1: one and one oh five point seven of m h

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Speaker 1: D two, Baltimore. I'm Kevin Cirelli, chief Washington correspondent for

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Speaker 1: Bloomberg Television and Bloomberg Radio, and I was up in

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Speaker 1: the Rayburn House office building today where fed Shair J.

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Speaker 1: Powell fed Share J. Powell really signaling the markets that

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Speaker 1: were likely going to get a rate cut at the

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Speaker 1: end of the month, at least that's how the markets

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Speaker 1: interpreted interpreted his testimony before Maxine Waters Committee, the House

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Speaker 1: Financial Services Committee, So the right cud and then he

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Speaker 1: says that he's not going to step down, should the

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Speaker 1: should the president hypothetical should the President ask him to

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Speaker 1: step aside or resign, got laughters inside of the committee

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Speaker 1: hearing room. But it was Alexandria Acasio Cortes who was

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Speaker 1: able to find common ground between herself and Larry Cudlow.

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Speaker 1: Take a listen to her exchange with fed Share jpl

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Speaker 1: Here she is. I've been seeing lately that economists are

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Speaker 1: increasingly worried that the idea of Phillip's curve that links

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Speaker 1: unemployment and inflation is no longer describing what is happening

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Speaker 1: in today's economy. Have you been considering on that? What

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Speaker 1: are your thoughts on that? Yeah, very much so. We

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Speaker 1: spend a great deal of time on that. The connection

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Speaker 1: between um slacking the economy with a level of unemployment

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Speaker 1: and inflation was very strong. If you go back fifty years,

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Speaker 1: and it's gotten weaker and weaker and weaker to the

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Speaker 1: point where it's it's um it's a faint heart beat

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Speaker 1: that you can hear. Now it's still there. You can

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Speaker 1: see the state level data and things like that. But

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Speaker 1: I think we really have learned though that the economy

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Speaker 1: can sustain much lower unemployment than we saw it without

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Speaker 1: troubling levels of inflation. Maddie Duppler as the former Coalitions

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Speaker 1: director for the House Republican Conference, and Maddie looks like

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Speaker 1: you could have had a coalition there between between don't

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Speaker 1: tell me seeing Larry Cutler explain, don't tell me that

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Speaker 1: there aren't strange bedfellows in the Trump administration era here

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Speaker 1: in d C. Now, you know, Larry Cutler is a chameleon.

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Speaker 1: That I will say that so you know it's true.

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Speaker 1: And you know what, Kevin like, I've been on the

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Speaker 1: show how many times where I've said like, listen, we

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Speaker 1: have got to scrutinize some of these metrics that we

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Speaker 1: use to evaluate the economy. And I think that Chairman

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Speaker 1: Powell today kind of got close to UH saying that

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Speaker 1: as well, which is we are now in the longer

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Speaker 1: shock of economic expansion in modern history. Uh really since

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Speaker 1: we've started looking at the economy, and that should probably

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Speaker 1: provoke all observers to question whether or not we have

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Speaker 1: the proper tools to gauge, um, what the economy looks

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Speaker 1: like in what kind of capacity it has. You know,

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Speaker 1: a couple of years ago, the FED was saying that

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Speaker 1: full employment had us at unemployment above four percent. We're

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Speaker 1: now at three point six percent and under four percent

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Speaker 1: for the entire years. So there's obvious that there's been

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Speaker 1: a breakdown between some of these assumptions. The question is

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Speaker 1: what is the consequence for public policy, both from a

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Speaker 1: monetary standpoint as the FED evaluates it, but from a

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Speaker 1: fiscal policy standpoint as public policy makers on Congress contemplations.

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Speaker 1: You know, look, I'm in a level. I'm an honest guy.

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Speaker 1: I'm an honest guy. I got in trouble in high

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Speaker 1: school for falling asleep in my econ class, so I

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Speaker 1: had to dust off some of my still here and uh,

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Speaker 1: Democratic Democratic strategist listen to ants one. So I'll remind

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Speaker 1: you and me both about the Phillips curve, but which

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Speaker 1: I mean obviously a nerd out over this stuff. I

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Speaker 1: was a late bloomer. The Uh. The Phillips curve theory

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Speaker 1: says that low unemployment will inevitably and inevitably bring higher inflation.

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Speaker 1: Low unemployment means higher inflation. Will we have incredibly low

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Speaker 1: employment right now and we haven't seen much inflation. So

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Speaker 1: the Phillips curve theory, all of these economists, maybe that's

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Speaker 1: why I fell asleep, all of these economists who have

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Speaker 1: informed the Ape Coon books for all of our students. Well,

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Speaker 1: this theory, this Phillips curve, is not exactly holding up.

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Speaker 1: And that is where ao C and Larry Cudlow agree.

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Speaker 1: They're saying, wait a minute, this Phillips curve theory of

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Speaker 1: what everybody said, low unemployment leads to high inflation, Well

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Speaker 1: it's not holding up. And so that's what AOC was

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Speaker 1: asking ants On and Larry or J. Powell, the FED chair.

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Speaker 1: He says, quote the connection between slack and the economy

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Speaker 1: or the level of unemployment and inflation was very strong

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Speaker 1: if you go back fifty years. So he's saying that

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Speaker 1: this Phillips curve is relevant fifty years ago. I don't know.

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Speaker 1: We didn't have the Internet fifty years or maybe cryptocurrency,

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Speaker 1: which I'm gonna play for you guys tomorrow. Uh. This

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Speaker 1: by part is an interview because the libra here in

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Speaker 1: the Facebook Libra hearing is there. But I mean it's

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Speaker 1: it's remarkable. I mean, essentially it's part of a broader

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Speaker 1: trend dance. One right of are the metrics that we're using.

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Speaker 1: If it's not just to decide interest rates at the

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Speaker 1: Federal Reserve, it's data for the Census Bureau, it's everything. Well,

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Speaker 1: I'll say this, I believe in Philip and his curve. Uh.

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Speaker 1: And that is conventional wisdom. I don't think we're living

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Speaker 1: in conventional time. Uh. And the story has yet to

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Speaker 1: be written, um completely about this economy and what it means,

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Speaker 1: because there's so many factors to consider. Coming out of

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Speaker 1: the worst recession in my political lifetime, with Barack Obama

428
00:24:06,359 --> 00:24:09,320
Speaker 1: inherited this new norm we had to make adjustments to

429
00:24:09,880 --> 00:24:12,359
Speaker 1: and now the success that Trump is happening for some

430
00:24:12,440 --> 00:24:14,840
Speaker 1: in this economy, convincing the wisdom is out of the windows.

431
00:24:14,880 --> 00:24:17,080
Speaker 1: So that doesn't mean Philip in his curve is wrong.

432
00:24:17,640 --> 00:24:19,840
Speaker 1: It just means that convinction of times and convincing the

433
00:24:19,920 --> 00:24:22,280
Speaker 1: wisdom is out and it is yet to be written.

434
00:24:22,280 --> 00:24:26,160
Speaker 1: While we may be enjoying that today, tomorrow, next year

435
00:24:26,160 --> 00:24:28,720
Speaker 1: at this time could be different. And I think Donald

436
00:24:28,760 --> 00:24:32,840
Speaker 1: Trump has flirted and hinted with this and every move

437
00:24:32,920 --> 00:24:36,200
Speaker 1: he's made and point he's made about this economy well,

438
00:24:36,240 --> 00:24:39,080
Speaker 1: and you heard some of this in the hearing today too,

439
00:24:39,119 --> 00:24:42,600
Speaker 1: when there were some questions directed at Powell asking him

440
00:24:42,640 --> 00:24:45,600
Speaker 1: about what kind of fiscal policy did he think was

441
00:24:45,640 --> 00:24:49,560
Speaker 1: appropriate if indeed we did enter another recession um And

442
00:24:49,600 --> 00:24:52,560
Speaker 1: of course the Chairman didn't say explicitly what he thought

443
00:24:52,640 --> 00:24:54,240
Speaker 1: was appropriate, but he said that some of the tools

444
00:24:54,280 --> 00:24:56,399
Speaker 1: that were used in two thousand nine would be what

445
00:24:56,480 --> 00:24:58,320
Speaker 1: he would expect to see out of Congress if we

446
00:24:58,320 --> 00:25:01,880
Speaker 1: were to enter a recession. Read again. But it's interesting

447
00:25:01,920 --> 00:25:05,000
Speaker 1: because there is so much, so much research now being

448
00:25:05,000 --> 00:25:07,240
Speaker 1: devoted to this question of how do we know what

449
00:25:07,320 --> 00:25:09,800
Speaker 1: we know? And can we know more about the economy

450
00:25:09,880 --> 00:25:13,520
Speaker 1: if we aren't looking, if we aren't help would beholden

451
00:25:13,560 --> 00:25:16,359
Speaker 1: to some of these old models. Conventional with that, like

452
00:25:16,400 --> 00:25:18,400
Speaker 1: how you say conventionalism, That makes it seem more folks.

453
00:25:18,520 --> 00:25:22,240
Speaker 1: But it's it's true that things are different now. We

454
00:25:22,280 --> 00:25:25,840
Speaker 1: didn't have the internet even ten years ago, twenty years ago.

455
00:25:25,880 --> 00:25:28,960
Speaker 1: The internet put a different role in our lives and productivity,

456
00:25:29,040 --> 00:25:32,200
Speaker 1: well exactly in productivity and wages are all different because

457
00:25:32,280 --> 00:25:35,120
Speaker 1: workers are different, their relationship to work and their relationship

458
00:25:35,160 --> 00:25:37,600
Speaker 1: to their equipment. Right, Okay, I'm gonna I'm gonna get

459
00:25:37,600 --> 00:25:39,920
Speaker 1: really nerdy because I might have fallen asleep during the

460
00:25:40,000 --> 00:25:46,640
Speaker 1: charts and stuff. But who is the Phillips curve named after? Trivia? Trivia?

461
00:25:46,680 --> 00:25:49,560
Speaker 1: Do you know? Don't get out the phones, don't google

462
00:25:49,600 --> 00:25:53,800
Speaker 1: the Phillips curve? Who's it named after? Somebody named Philip? No,

463
00:25:54,080 --> 00:25:56,720
Speaker 1: someone named after William Phillips is the last named. William

464
00:25:56,800 --> 00:25:59,560
Speaker 1: Phillips was a New Zealand economist. And here's what I

465
00:25:59,600 --> 00:26:03,040
Speaker 1: do remember from from my days back as name. He

466
00:26:03,359 --> 00:26:07,119
Speaker 1: had a lot of odd jobs, Willie. Okay before he

467
00:26:07,160 --> 00:26:10,080
Speaker 1: had a lot of odd jobs, including he was a

468
00:26:10,080 --> 00:26:13,320
Speaker 1: crocodile hunter and a cinema manager. Now you can't, I'm

469
00:26:13,359 --> 00:26:16,840
Speaker 1: telling you, and this is someone but This is someone

470
00:26:16,840 --> 00:26:19,440
Speaker 1: who was a broad view of the employment picture, right,

471
00:26:19,560 --> 00:26:24,359
Speaker 1: like this goes to why we should be scrutinized. All right,

472
00:26:25,040 --> 00:26:28,879
Speaker 1: this is sound on with Kevin's he related on Bloomberg

473
00:26:29,720 --> 00:26:31,879
Speaker 1: one and one oh five point seven of m h

474
00:26:32,040 --> 00:26:35,639
Speaker 1: D two Baltimore. I'm Kevin CERELLI chief Washington correspondent for

475
00:26:35,680 --> 00:26:39,000
Speaker 1: Bloomberg Television and Bloomberg Radio. Earlier today, I was covering

476
00:26:39,200 --> 00:26:43,400
Speaker 1: the FED Chair J. Powell hearing before the House Financial

477
00:26:43,400 --> 00:26:46,400
Speaker 1: Services Committee, and I caught up for Bloomberg Television with

478
00:26:46,960 --> 00:26:50,720
Speaker 1: Congressman Patrick mckenry. He is the ranking member the top

479
00:26:50,760 --> 00:26:53,840
Speaker 1: Republican on House Financial Services Committee, and I asked him

480
00:26:53,880 --> 00:26:57,000
Speaker 1: about FED rates. Take a listen to our interview. This

481
00:26:57,160 --> 00:27:01,560
Speaker 1: is groundhog day. Everyone's trying to divine some movement, uh

482
00:27:01,640 --> 00:27:04,159
Speaker 1: in some future decision by a committee based off the

483
00:27:04,200 --> 00:27:06,320
Speaker 1: testimony of one member of the committee. So I don't

484
00:27:06,359 --> 00:27:09,040
Speaker 1: think we've got greater clarity on this um and I

485
00:27:09,040 --> 00:27:11,280
Speaker 1: don't think he's he's said anything different than he said

486
00:27:11,320 --> 00:27:13,760
Speaker 1: publicly so far today. So in terms of how the

487
00:27:13,800 --> 00:27:15,800
Speaker 1: economies are, what did you gather from him? I think

488
00:27:15,840 --> 00:27:18,240
Speaker 1: it's still going well. I think there are still those

489
00:27:18,359 --> 00:27:22,879
Speaker 1: risks signs globally and the impact that's having here on

490
00:27:22,920 --> 00:27:28,119
Speaker 1: our domestic economy. And when Jare Pale speaks to wage

491
00:27:28,119 --> 00:27:30,840
Speaker 1: growth not being as strong as you'd like to see

492
00:27:31,160 --> 00:27:34,480
Speaker 1: in essence, I think that's an indicator of some form

493
00:27:34,480 --> 00:27:36,800
Speaker 1: of Brake cut. But I think that's consistent what he

494
00:27:36,880 --> 00:27:39,320
Speaker 1: said in a little long run, how is trade policy,

495
00:27:39,359 --> 00:27:41,600
Speaker 1: of the trade disputes that are going on geo politically

496
00:27:41,600 --> 00:27:45,040
Speaker 1: around the world, how has that impacted what's the Fed's

497
00:27:45,080 --> 00:27:47,240
Speaker 1: decisions from what he's saying. So, I think based off

498
00:27:47,280 --> 00:27:51,479
Speaker 1: the FED data and publicly available data globally, China is slowed,

499
00:27:51,840 --> 00:27:55,200
Speaker 1: and China is used every means at their disposed, mainly

500
00:27:55,200 --> 00:27:59,000
Speaker 1: monitoring governmental interventions to keep your economy going. That's having

501
00:27:59,040 --> 00:28:02,320
Speaker 1: an impact um which shows when the President has gotten

502
00:28:02,359 --> 00:28:05,200
Speaker 1: strong and tough on China on trade, it has impaired

503
00:28:05,240 --> 00:28:10,320
Speaker 1: their economy. So there's their global growth concerns about that.

504
00:28:10,800 --> 00:28:14,600
Speaker 1: But there's also long term benefit for Americans when we

505
00:28:14,640 --> 00:28:17,280
Speaker 1: actually get trade policy right with China, so and so

506
00:28:17,480 --> 00:28:21,120
Speaker 1: showing it's having an effect. But the flight is worth

507
00:28:21,119 --> 00:28:22,960
Speaker 1: the fight in the long term for economics to blog,

508
00:28:23,000 --> 00:28:25,399
Speaker 1: you've got the FED chair here on Capitol Hill today.

509
00:28:25,480 --> 00:28:29,080
Speaker 1: Next week is this big social media hearing about Facebook

510
00:28:29,080 --> 00:28:33,240
Speaker 1: about Libra. In terms of blockchain technology, you ask FED

511
00:28:33,359 --> 00:28:35,840
Speaker 1: Chair Power about all of this, and and and really

512
00:28:35,880 --> 00:28:40,080
Speaker 1: in particular about whether or not blockchain could help so

513
00:28:40,600 --> 00:28:44,600
Speaker 1: to create some innovation in the US economies. Well, innovation

514
00:28:44,920 --> 00:28:49,959
Speaker 1: and financial inclusion I think are fantastic benefits of digital

515
00:28:49,960 --> 00:28:53,520
Speaker 1: currency and blockchains. I think it's enormous opportunity here. Now,

516
00:28:53,600 --> 00:28:56,040
Speaker 1: there are a lot of questions we have about Project Libra,

517
00:28:56,400 --> 00:28:58,760
Speaker 1: the nature of it, why it's being developed in Switzerland

518
00:28:58,800 --> 00:29:01,800
Speaker 1: not here in the United States, UM, and the major

519
00:29:01,880 --> 00:29:05,280
Speaker 1: decisions going into this much less the the use of it.

520
00:29:05,400 --> 00:29:10,520
Speaker 1: Now they're going to uh to to drive enough reserves

521
00:29:10,520 --> 00:29:13,960
Speaker 1: and global currencies to have a basket on which to

522
00:29:14,480 --> 00:29:18,360
Speaker 1: peg this liberal currency. So there there are huge questions about.

523
00:29:18,360 --> 00:29:21,560
Speaker 1: When Chair pal spoke about financial stability being a great

524
00:29:21,560 --> 00:29:25,240
Speaker 1: concern about Project Libra, it shows the magnitude of the

525
00:29:25,280 --> 00:29:30,320
Speaker 1: impact this project could have. That was Congressman Patrick mckenry.

526
00:29:30,400 --> 00:29:34,120
Speaker 1: He is a Republican on the House Financial Services Committee.

527
00:29:34,120 --> 00:29:38,160
Speaker 1: He is the top Republican on the House Financial Services Committee,

528
00:29:38,520 --> 00:29:42,320
Speaker 1: where FED Chair J. Powell testify it today with me

529
00:29:42,560 --> 00:29:46,160
Speaker 1: in studio for the Hour, Antoine ce Right, Democratic strategist,

530
00:29:46,200 --> 00:29:50,320
Speaker 1: Matti Zeppler, senior fellow at the National Taxpayers Union, former

531
00:29:50,480 --> 00:29:55,120
Speaker 1: Coalitions director for the House Republican Conference. What's on your radar, Maddie,

532
00:29:55,120 --> 00:29:58,320
Speaker 1: for for for this week, for this week, well specifically

533
00:29:58,320 --> 00:30:01,080
Speaker 1: for today. I am following this news. Bloomberg actually was

534
00:30:01,120 --> 00:30:03,760
Speaker 1: the first to break this afternoon that the administration is

535
00:30:03,760 --> 00:30:08,120
Speaker 1: opening a three oh one investigation into France. So this

536
00:30:08,200 --> 00:30:09,720
Speaker 1: is an issue that I've been falling for a while.

537
00:30:09,760 --> 00:30:12,280
Speaker 1: This is a response to France trying to tax American

538
00:30:12,320 --> 00:30:14,719
Speaker 1: digital companies. France is not the only country that has

539
00:30:14,720 --> 00:30:16,840
Speaker 1: tried to do this. A lot of European countries have

540
00:30:16,920 --> 00:30:19,720
Speaker 1: looked into this. O A c D tried to come

541
00:30:19,800 --> 00:30:24,280
Speaker 1: up with a consensus approach to taxing American tech companies.

542
00:30:24,320 --> 00:30:26,040
Speaker 1: They couldn't do it because a lot of these taxes

543
00:30:26,080 --> 00:30:29,440
Speaker 1: are coming up with their discriminatory in nature, so different

544
00:30:29,480 --> 00:30:32,320
Speaker 1: states are going in alone. The Trump administration has decided

545
00:30:32,360 --> 00:30:36,000
Speaker 1: that they are going to uh slap snap back with

546
00:30:36,080 --> 00:30:38,080
Speaker 1: a three on one investigation. There are a number of

547
00:30:38,080 --> 00:30:41,120
Speaker 1: tools the administration could use. I would encourage them to

548
00:30:41,160 --> 00:30:43,440
Speaker 1: look at ways that they can use their own tax

549
00:30:43,480 --> 00:30:45,880
Speaker 1: authority to try and get some of these countries to

550
00:30:45,920 --> 00:30:48,840
Speaker 1: knock it off when it comes to taxing American UH companies.

551
00:30:48,880 --> 00:30:51,560
Speaker 1: At three on one investigation, obviously, we just got off

552
00:30:51,560 --> 00:30:54,200
Speaker 1: an hour conversation about trade tensions and how the feed

553
00:30:54,320 --> 00:30:56,959
Speaker 1: is worried about them. That's going to create some some

554
00:30:57,000 --> 00:30:59,280
Speaker 1: further tensions for the white kind of heard about. I mean,

555
00:30:59,280 --> 00:31:03,160
Speaker 1: this is part of a order broader issue here, which

556
00:31:03,200 --> 00:31:06,080
Speaker 1: is how to protect tech firms and technology three oh

557
00:31:06,120 --> 00:31:09,200
Speaker 1: one investigation is the same tool President Trump used to

558
00:31:09,240 --> 00:31:13,080
Speaker 1: impose tariffs on Chinese goods. Uh, and so this is

559
00:31:13,400 --> 00:31:15,640
Speaker 1: this is uh, you know, a device that they're using.

560
00:31:15,960 --> 00:31:19,560
Speaker 1: Mckenry mentioned this with Libra and tomorrow I'm gonna play

561
00:31:19,600 --> 00:31:22,360
Speaker 1: for you guys an interview I did with Warren Davidson

562
00:31:22,360 --> 00:31:26,240
Speaker 1: and Scott Gotheimer, a Republican and Democrat respectively, who are

563
00:31:26,240 --> 00:31:29,320
Speaker 1: trying to get bipartisan legislation that would allow for blockchain

564
00:31:29,360 --> 00:31:31,520
Speaker 1: companies to say, so, we're getting wonky in the weeds,

565
00:31:31,560 --> 00:31:34,920
Speaker 1: but that is a huge deal to the radar. What's

566
00:31:34,960 --> 00:31:38,040
Speaker 1: on your radar? Uh? In the short term, the mal

567
00:31:38,120 --> 00:31:41,920
Speaker 1: invest mother hearing next week and then of course, and

568
00:31:42,040 --> 00:31:47,080
Speaker 1: how Democrats will re behave themselves in the upcoming debates,

569
00:31:47,080 --> 00:31:50,640
Speaker 1: and what that will mean for the fall, and and

570
00:31:50,680 --> 00:31:54,600
Speaker 1: what that will mean for all important South Carolina next year. February.

571
00:31:54,760 --> 00:31:58,120
Speaker 1: All right, Kevin, what's a new radar? Al right? Should I? Honestly,

572
00:31:58,240 --> 00:32:00,560
Speaker 1: it has nothing to do with politics. My sister's getting

573
00:32:00,560 --> 00:32:03,840
Speaker 1: married on Friday. My sister, my big sister, Eileen, She's

574
00:32:03,880 --> 00:32:07,920
Speaker 1: marrying Jeff Meally. I'm headed to Philadelphia literally tonight, so

575
00:32:08,240 --> 00:32:09,719
Speaker 1: I'm not going to be here, but my colleagues are

576
00:32:09,720 --> 00:32:11,480
Speaker 1: going to fill in for us for the rest of

577
00:32:11,520 --> 00:32:15,280
Speaker 1: the week. Uh. And that's giving a speech I am.

578
00:32:15,360 --> 00:32:18,040
Speaker 1: I'm giving the toast of her personal Should I practice

579
00:32:18,080 --> 00:32:21,080
Speaker 1: on air? Should I practice on air? How do they

580
00:32:21,120 --> 00:32:24,080
Speaker 1: know that you could speak? It's crazy? And you know this,

581
00:32:24,200 --> 00:32:26,840
Speaker 1: Maddie and Antoine, you'll you'll know this. I'm actually really

582
00:32:26,880 --> 00:32:29,440
Speaker 1: bad at like personal speeches. I'm much better talking about

583
00:32:29,440 --> 00:32:35,520
Speaker 1: like politics and like the Phillips curve, you know what,

584
00:32:35,560 --> 00:32:38,120
Speaker 1: to get the names right, a curve. I'm gonna pull

585
00:32:38,120 --> 00:32:40,600
Speaker 1: out a curve for the Phillips curve. I'll have AOC

586
00:32:40,800 --> 00:32:42,960
Speaker 1: and Larry Cudlow and it'll be like a whole thing

587
00:32:43,120 --> 00:32:45,280
Speaker 1: kill And I'm like, yeah, I'll put people to sleep.

588
00:32:45,320 --> 00:32:47,800
Speaker 1: But most important questions. If you get a call from

589
00:32:47,840 --> 00:32:50,520
Speaker 1: the President and saying stop your speech, would you do it?

590
00:32:54,640 --> 00:32:56,600
Speaker 1: Look at that I want to give. We're up against

591
00:32:56,600 --> 00:32:59,600
Speaker 1: the clock. I don't want to thank Antoine see right,

592
00:32:59,760 --> 00:33:03,840
Speaker 1: or a friend Democratic strategists and Sell and blue and

593
00:33:04,000 --> 00:33:07,800
Speaker 1: founder and CEO of Blueprint Strategy got me stumbling. Former

594
00:33:07,880 --> 00:33:11,560
Speaker 1: senior advisors Quentin kimp Cane in South Carolina, and of

595
00:33:11,600 --> 00:33:14,320
Speaker 1: course to Matti Zuppler, senior fellow at the National Taxpayers

596
00:33:14,400 --> 00:33:18,320
Speaker 1: Union and former Coalitions director for the House Republican Conference.

597
00:33:18,320 --> 00:33:21,440
Speaker 1: I'm back to Delco, but the sound On podcast will

598
00:33:21,480 --> 00:33:24,800
Speaker 1: continue with my colleagues. You can download it on Apple,

599
00:33:24,800 --> 00:33:27,480
Speaker 1: it tunes, at Bloomberg dot com, or by downloading Bloomberg

600
00:33:27,480 --> 00:33:29,400
Speaker 1: Business Appen. You can find me on Radio dot com,

601
00:33:29,640 --> 00:33:33,080
Speaker 1: I Heart Radio and Spotify. I'm Kevin Cirelli. SI you

602
00:33:33,120 --> 00:33:34,520
Speaker 1: next week you're listening to Bloomberg