1 00:00:00,120 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,920 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,479 Speaker 2: Terminal and the Bloomberg Business app. So here's the latest 10 00:00:37,520 --> 00:00:41,160 Speaker 2: ABC News confirming Vice President Kamala Harrison former President Donald 11 00:00:41,200 --> 00:00:43,559 Speaker 2: Trump have agreed to a President and Your debate on 12 00:00:43,600 --> 00:00:46,320 Speaker 2: September tent. The two sides hitting the campaign trail in 13 00:00:46,360 --> 00:00:49,239 Speaker 2: full force today, Harris holding a rally in Phoenix as 14 00:00:49,240 --> 00:00:52,400 Speaker 2: Trump heads to Montana. Jeanette Lowis Tratiguez joined us now 15 00:00:52,520 --> 00:00:55,640 Speaker 2: for Moreette, this has been agreed. September tenth is the 16 00:00:55,720 --> 00:00:58,800 Speaker 2: day on ABC. I just wander, from your perspective, who 17 00:00:58,840 --> 00:01:00,800 Speaker 2: is most at risk? Go aga into that. 18 00:01:02,600 --> 00:01:04,640 Speaker 3: I think that Trump is a little bit more worried 19 00:01:04,680 --> 00:01:07,479 Speaker 3: about his positioning since Harris has gotten into the race 20 00:01:07,520 --> 00:01:09,240 Speaker 3: and is now the Democratic nominee. 21 00:01:09,280 --> 00:01:11,240 Speaker 4: So I think he is actually looking at. 22 00:01:11,080 --> 00:01:15,600 Speaker 3: This to try to have a similar a similar debate 23 00:01:15,640 --> 00:01:18,480 Speaker 3: as he had on June twenty seventh against President Biden. 24 00:01:19,080 --> 00:01:20,360 Speaker 4: So I think there's more risk there. 25 00:01:20,440 --> 00:01:22,960 Speaker 3: What we're definitely seeing since Harris has gotten into the 26 00:01:23,040 --> 00:01:26,280 Speaker 3: race is a lot more momentum on the Democratic side. 27 00:01:26,440 --> 00:01:30,560 Speaker 3: You've seen the national polls a three point five percentage 28 00:01:30,560 --> 00:01:33,200 Speaker 3: point move from Trump, who had been up about three 29 00:01:33,240 --> 00:01:36,440 Speaker 3: percentage points to now Harris being up just about a 30 00:01:36,480 --> 00:01:39,280 Speaker 3: half a percentage point. In the swing states that matter 31 00:01:39,360 --> 00:01:41,200 Speaker 3: for this election, you've seen a move of more than 32 00:01:41,280 --> 00:01:44,440 Speaker 3: two point five points in Harris's direction. So now we 33 00:01:44,520 --> 00:01:46,920 Speaker 3: really do have a fifty to fifty race where it 34 00:01:46,959 --> 00:01:49,320 Speaker 3: could be a very close calm November, and I think 35 00:01:49,320 --> 00:01:51,320 Speaker 3: he really wants to use the debate to try to 36 00:01:51,360 --> 00:01:54,200 Speaker 3: rehighlight and be able to attack Harris on some of 37 00:01:54,240 --> 00:01:56,480 Speaker 3: the key issues that he thinks are un lacking. 38 00:01:56,280 --> 00:01:59,640 Speaker 5: Now, Jenette. He also yesterday in his press conference, Donald 39 00:01:59,680 --> 00:02:03,360 Speaker 5: Trump floated to other debate who was more at risk 40 00:02:03,480 --> 00:02:06,720 Speaker 5: of having more debate time when it comes to not 41 00:02:06,840 --> 00:02:08,919 Speaker 5: just on this ABC News one, but Trump was floating 42 00:02:08,919 --> 00:02:11,360 Speaker 5: an NBC News debate as well as a Fox News debate. 43 00:02:12,440 --> 00:02:13,280 Speaker 4: You know, it's interesting. 44 00:02:13,320 --> 00:02:15,720 Speaker 3: So obviously, I think the June twenty seventh debate that 45 00:02:15,880 --> 00:02:18,600 Speaker 3: was probably a bit of a surprise to many people. 46 00:02:19,040 --> 00:02:22,120 Speaker 3: You know, usually the incumbent president does lose their presidential debate, 47 00:02:22,120 --> 00:02:24,600 Speaker 3: but that was just quite a different debate than I 48 00:02:24,600 --> 00:02:26,079 Speaker 3: think anyone was expecting. 49 00:02:26,440 --> 00:02:27,840 Speaker 4: Trump could be more. 50 00:02:27,680 --> 00:02:29,720 Speaker 3: Disciplined in the debates, as we saw in the June 51 00:02:29,760 --> 00:02:32,679 Speaker 3: twenty seventh debate, but at the same time, there could 52 00:02:32,760 --> 00:02:36,200 Speaker 3: be you know, different reactions, kind of like what we 53 00:02:36,240 --> 00:02:38,919 Speaker 3: had in his press conference yesterday, where that could actually 54 00:02:38,960 --> 00:02:41,440 Speaker 3: hurt him. Now, if Harris is also on the defensive 55 00:02:41,600 --> 00:02:43,680 Speaker 3: and he's actually get able to get a lot of blows, 56 00:02:43,800 --> 00:02:46,600 Speaker 3: that can hurt her, So debates can actually be quite 57 00:02:46,680 --> 00:02:49,040 Speaker 3: up in the air. I think that's why we also 58 00:02:49,080 --> 00:02:50,880 Speaker 3: kind of want to see what happens at this first debate, 59 00:02:50,880 --> 00:02:53,400 Speaker 3: and if that means we want more than one usually, 60 00:02:53,440 --> 00:02:55,440 Speaker 3: but obviously we do have three. So I think Trump 61 00:02:55,480 --> 00:02:58,400 Speaker 3: is now trying to go back to that traditional mode. 62 00:02:59,000 --> 00:03:01,200 Speaker 3: But that's also a lot in a couple of weeks 63 00:03:01,280 --> 00:03:03,520 Speaker 3: right before the election, so we'll see what happens. 64 00:03:03,840 --> 00:03:06,560 Speaker 5: We also heard from Kamala Harris yesterday, the Vice president 65 00:03:06,760 --> 00:03:09,400 Speaker 5: talking about the fact that her team has scheduled or 66 00:03:09,400 --> 00:03:13,240 Speaker 5: she's asking her team to schedule a sit down interview 67 00:03:13,240 --> 00:03:15,280 Speaker 5: before the end of the month. Unclear if that means 68 00:03:15,280 --> 00:03:18,519 Speaker 5: it's going to be scheduled for August or potentially September, 69 00:03:19,040 --> 00:03:21,520 Speaker 5: but there was also reporting that they would maybe want 70 00:03:21,560 --> 00:03:24,880 Speaker 5: to sit her down with her feet pee pick Governor Wallas. 71 00:03:25,280 --> 00:03:27,120 Speaker 5: Do you get a sense that the campaign is trying 72 00:03:27,120 --> 00:03:30,919 Speaker 5: to shield her from some of these more direct confrontations 73 00:03:30,919 --> 00:03:32,359 Speaker 5: with journalists. 74 00:03:33,000 --> 00:03:35,080 Speaker 3: You know, I think it's unclear. I think one of 75 00:03:35,080 --> 00:03:38,120 Speaker 3: the things that this has been a very fast campaign, 76 00:03:38,160 --> 00:03:40,240 Speaker 3: so it's only been three weeks. I think to some extent, 77 00:03:40,320 --> 00:03:43,160 Speaker 3: she might be still trying to get her feet under 78 00:03:43,160 --> 00:03:45,200 Speaker 3: her and make sure that she kind of knows what. 79 00:03:45,160 --> 00:03:46,600 Speaker 4: Her policy positions are. 80 00:03:46,840 --> 00:03:48,720 Speaker 3: So there could be some of that in part of 81 00:03:48,720 --> 00:03:52,200 Speaker 3: the delay as to really be doing more of these interviews. 82 00:03:52,720 --> 00:03:54,800 Speaker 3: But I think also she's kind of has the momentum 83 00:03:54,880 --> 00:03:55,880 Speaker 3: at this point now. 84 00:03:55,920 --> 00:03:57,560 Speaker 4: She is a better debater. 85 00:03:57,720 --> 00:03:59,520 Speaker 3: She is better in front of the camera, I think 86 00:03:59,520 --> 00:04:01,680 Speaker 3: than she has been in the past, So I think 87 00:04:01,720 --> 00:04:04,440 Speaker 3: that does have a benefit for her, But there could 88 00:04:04,440 --> 00:04:07,520 Speaker 3: be other factors that I'm not quite sure exactly what 89 00:04:07,560 --> 00:04:09,640 Speaker 3: they may be, but I think this is something that 90 00:04:09,640 --> 00:04:11,880 Speaker 3: the Trump campaign is now trying to latch onto to 91 00:04:11,880 --> 00:04:13,960 Speaker 3: try and make that saying that she won't show up 92 00:04:14,000 --> 00:04:15,640 Speaker 3: in front of the press, she won't do interviews, and 93 00:04:15,640 --> 00:04:16,280 Speaker 3: she won't take. 94 00:04:16,200 --> 00:04:17,120 Speaker 4: Questions to that. 95 00:04:17,240 --> 00:04:19,800 Speaker 1: She's been vice president for about four years now, Is 96 00:04:19,839 --> 00:04:22,520 Speaker 1: it a problem she doesn't yet know her policies? 97 00:04:23,839 --> 00:04:24,000 Speaker 4: Well? 98 00:04:24,040 --> 00:04:26,240 Speaker 3: I think it's also just, you know, as a vice president, 99 00:04:26,240 --> 00:04:28,599 Speaker 3: she's trying to toe the line of what the president 100 00:04:28,600 --> 00:04:31,760 Speaker 3: Biden wanted right now. You know, we've seen that she's 101 00:04:31,880 --> 00:04:34,760 Speaker 3: not taking necessarily the same positions that she took as 102 00:04:34,800 --> 00:04:37,800 Speaker 3: a candidate in the twenty twenty cycle, so things like fracking, 103 00:04:38,720 --> 00:04:41,200 Speaker 3: she's trying to like moderate her position on Israel a 104 00:04:41,279 --> 00:04:43,440 Speaker 3: little bit. I think these are the things that she 105 00:04:43,480 --> 00:04:47,240 Speaker 3: wants to really make sure she has really ironed out better, 106 00:04:47,720 --> 00:04:50,520 Speaker 3: because obviously we know in this new cycle that people 107 00:04:50,600 --> 00:04:52,640 Speaker 3: love to take anything that you say and then kind 108 00:04:52,640 --> 00:04:54,320 Speaker 3: of spin it. So I think she also wants to 109 00:04:54,320 --> 00:04:56,719 Speaker 3: make sure she does have her messaging down. But she 110 00:04:56,760 --> 00:04:59,160 Speaker 3: does also have a risk there that if she's actually 111 00:04:59,160 --> 00:05:01,360 Speaker 3: not showing up in in front of the press, she's 112 00:05:01,400 --> 00:05:03,760 Speaker 3: not able to answer questions and talk about our policies. 113 00:05:03,880 --> 00:05:05,839 Speaker 3: That can also be a risk for her campaign as well. 114 00:05:05,920 --> 00:05:08,120 Speaker 2: Janet, just before you go, quite clearly the vice president 115 00:05:08,160 --> 00:05:10,520 Speaker 2: is driving enthusiasm at the top of the ticare how 116 00:05:10,560 --> 00:05:13,159 Speaker 2: is sent in House? Rice is evolving since Spiden dropped 117 00:05:13,160 --> 00:05:14,240 Speaker 2: out and she stepped up. 118 00:05:15,240 --> 00:05:16,920 Speaker 3: Yeah, So one of the biggest things that we've seen 119 00:05:17,000 --> 00:05:19,120 Speaker 3: is that since Biden got off the ticket and Harris 120 00:05:19,160 --> 00:05:21,560 Speaker 3: is now the new nominee, we've seen the odds of 121 00:05:21,560 --> 00:05:24,400 Speaker 3: a Republican sweep drop quite a bit. They were fifty 122 00:05:24,440 --> 00:05:27,200 Speaker 3: five percent on July sixteenth, They're now down to thirty 123 00:05:27,240 --> 00:05:30,120 Speaker 3: two percent this morning. And you also have twenty five 124 00:05:30,160 --> 00:05:32,839 Speaker 3: percent odds of a Democratic sweep and twenty five percent 125 00:05:32,839 --> 00:05:36,479 Speaker 3: odds of divided government in the scenario of a Democratic president, 126 00:05:36,640 --> 00:05:37,760 Speaker 3: Democratic House. 127 00:05:37,560 --> 00:05:40,600 Speaker 4: And a Republican Senate. I think what's interesting about. 128 00:05:40,440 --> 00:05:43,520 Speaker 3: This cycle is is that you could have divided government 129 00:05:43,640 --> 00:05:47,039 Speaker 3: under either scenario whoever wins the presidency, just because the 130 00:05:47,080 --> 00:05:49,560 Speaker 3: margins are so tight right now in the House and 131 00:05:49,640 --> 00:05:52,080 Speaker 3: the Senate. So, for instance, if Harris is getting a 132 00:05:52,120 --> 00:05:55,200 Speaker 3: lot of momentum, the Democrats only need a net four 133 00:05:55,279 --> 00:05:57,960 Speaker 3: seats to win the House, and those are seats that 134 00:05:58,000 --> 00:06:01,280 Speaker 3: are also in states like Alabama, and there's one seat 135 00:06:01,279 --> 00:06:05,279 Speaker 3: in Alabama, there's seats in California and New York and 136 00:06:05,320 --> 00:06:08,400 Speaker 3: New Jersey. The Democrats do have an opportunity to flip 137 00:06:08,440 --> 00:06:11,240 Speaker 3: this cycle. So if she has momentum, even if she 138 00:06:11,279 --> 00:06:13,919 Speaker 3: doesn't win the presidency, there is still a possibility the 139 00:06:13,960 --> 00:06:17,080 Speaker 3: Democrats could have control of the House. On the flip side, 140 00:06:17,120 --> 00:06:18,839 Speaker 3: the Senate does look like it's going to move to 141 00:06:18,880 --> 00:06:21,640 Speaker 3: the Republicans because you have a center or mansion no 142 00:06:21,720 --> 00:06:24,000 Speaker 3: longer running in West Virginia. I think that becomes a 143 00:06:24,040 --> 00:06:27,360 Speaker 3: Republican pickup. And then also John Tester is currently down 144 00:06:27,520 --> 00:06:30,039 Speaker 3: in the state of Montana, so that could be another pickup. 145 00:06:30,240 --> 00:06:30,880 Speaker 4: So there is this. 146 00:06:30,960 --> 00:06:34,039 Speaker 3: Interesting dynamic where we could have divided government no matter what. 147 00:06:35,080 --> 00:06:36,680 Speaker 3: So I think that that's something that we need to 148 00:06:36,680 --> 00:06:38,599 Speaker 3: look forward to because it's obviously going to have big 149 00:06:38,640 --> 00:06:41,839 Speaker 3: implications for what policies can be enacted next year, and 150 00:06:41,880 --> 00:06:44,640 Speaker 3: particularly as we're talking about the debate. I'm sorry, it's 151 00:06:44,640 --> 00:06:46,799 Speaker 3: about taxes and the debt ceiling debate. 152 00:06:46,960 --> 00:06:49,440 Speaker 2: Jeanette got it, just fantastic. ANCIL always do not load 153 00:06:49,440 --> 00:07:01,719 Speaker 2: their astrtigus days that I says Donald Trump using a 154 00:07:01,760 --> 00:07:05,000 Speaker 2: Marijuanca news conference to express frustration at the Federal Reserve. 155 00:07:05,240 --> 00:07:07,440 Speaker 2: The comments echoing of Wall Street Journal report back in 156 00:07:07,480 --> 00:07:10,120 Speaker 2: April saying that Trump's allies are drawing up plans to 157 00:07:10,160 --> 00:07:12,840 Speaker 2: blunt the Fed's independence should he win a second term, 158 00:07:12,960 --> 00:07:15,040 Speaker 2: a report that Trump's team has since pushed back on. 159 00:07:15,160 --> 00:07:18,640 Speaker 2: Repeatedly joined US Now to discuss his Republican Congressman Frendshill 160 00:07:18,960 --> 00:07:21,440 Speaker 2: of Arkansas Congressman, I'm going to start with a really 161 00:07:21,480 --> 00:07:24,360 Speaker 2: dangerous question. What is the former president talking about? 162 00:07:26,200 --> 00:07:28,440 Speaker 6: Well, Jonathan, great to be with you. I think every 163 00:07:28,480 --> 00:07:32,800 Speaker 6: president in the modern era has certainly criticized the FED 164 00:07:32,960 --> 00:07:37,000 Speaker 6: and lashed out and trying to have more control over 165 00:07:37,080 --> 00:07:40,400 Speaker 6: the FED. But since World War Two, having FED independence 166 00:07:40,440 --> 00:07:43,600 Speaker 6: is important. We want to try to have price stability. 167 00:07:43,680 --> 00:07:46,120 Speaker 6: That's their mission. I wish they focused only on the 168 00:07:46,120 --> 00:07:50,160 Speaker 6: price stability, but nonetheless that's their mission. And over my 169 00:07:50,280 --> 00:07:55,160 Speaker 6: time in public life, I've seen presidents try to influence 170 00:07:55,240 --> 00:07:58,680 Speaker 6: the FED through moral suasion by calling them over to 171 00:07:58,720 --> 00:08:01,840 Speaker 6: the Oval office. Baker and Ronald Reagan with Valen Green 172 00:08:01,960 --> 00:08:06,520 Speaker 6: span for the nineteen eighty four A vote election year. 173 00:08:07,120 --> 00:08:09,440 Speaker 6: But the bottom line is the FED can appoint, be 174 00:08:09,520 --> 00:08:12,000 Speaker 6: able to have fled's chairman appointed by the President to 175 00:08:12,120 --> 00:08:15,800 Speaker 6: the Senate confirms that position. The House and Senate conduct 176 00:08:15,920 --> 00:08:23,520 Speaker 6: major oversight over the operate fat Well, there is political tension. 177 00:08:23,200 --> 00:08:26,520 Speaker 5: There, Congressman. We heard from Jared Bernstein, of course, from 178 00:08:26,560 --> 00:08:29,240 Speaker 5: the White House director of the chair of the White 179 00:08:29,240 --> 00:08:32,160 Speaker 5: House Council of Economic Advisors. He tweeted this yesterday saying 180 00:08:32,400 --> 00:08:35,720 Speaker 5: history cannot be clear regarding the lasting and damaging inflationary 181 00:08:35,760 --> 00:08:39,520 Speaker 5: consequences of ignoring this lesson, of reversing the hard earned 182 00:08:39,559 --> 00:08:42,600 Speaker 5: progress of the past half century. So you agree with 183 00:08:42,640 --> 00:08:47,760 Speaker 5: the White House that the FED should remain completely independent, Well, 184 00:08:47,760 --> 00:08:48,400 Speaker 5: I agree with. 185 00:08:48,320 --> 00:08:51,760 Speaker 6: The record of history that the FED should be independent. 186 00:08:52,240 --> 00:08:55,199 Speaker 6: That's a central bank tenet that the FED should generally, 187 00:08:55,320 --> 00:08:58,080 Speaker 6: the central bank of a country should be independent of 188 00:08:58,160 --> 00:09:01,520 Speaker 6: the fiscal authority or or the legislator of brench to 189 00:09:01,640 --> 00:09:05,000 Speaker 6: protect the price stability. And as I say, since World 190 00:09:05,040 --> 00:09:08,480 Speaker 6: War Two, when we had actually Treasury representation on the 191 00:09:08,520 --> 00:09:13,800 Speaker 6: FED board, that's been done informally through the appointment process 192 00:09:13,840 --> 00:09:17,079 Speaker 6: to make sure the President's pleased with whoever the chair is, 193 00:09:18,240 --> 00:09:21,800 Speaker 6: and the Senate confirmation process, and there have been times 194 00:09:21,880 --> 00:09:25,640 Speaker 6: during tension where there's been White House meetings with FED 195 00:09:25,720 --> 00:09:29,800 Speaker 6: chairs or White House influence. Richard Nixon famously trying to 196 00:09:29,840 --> 00:09:35,040 Speaker 6: influence Arthur Burns during the nineteen seventy two election cycle, 197 00:09:35,160 --> 00:09:39,040 Speaker 6: the Jim Baker and Ronald Reagan antidote that I just mentioned. 198 00:09:39,559 --> 00:09:43,760 Speaker 6: But structurally it's maintained its independence, and I think that's important. 199 00:09:43,800 --> 00:09:45,760 Speaker 5: So let's talk about some of the FED policy. When 200 00:09:45,800 --> 00:09:48,040 Speaker 5: the Foreign President was talking about this yesterday, that he 201 00:09:48,080 --> 00:09:50,719 Speaker 5: would potentially have a better gut feeling or interest rate 202 00:09:50,720 --> 00:09:53,880 Speaker 5: should be, he said that heat chair Powell tends to 203 00:09:53,880 --> 00:09:55,600 Speaker 5: be a little bit lead on things. He gets things 204 00:09:55,640 --> 00:09:57,520 Speaker 5: a little bit too early and a little too late, 205 00:09:57,920 --> 00:10:01,160 Speaker 5: and he says he would have this feeling potentially he'd 206 00:10:01,160 --> 00:10:04,240 Speaker 5: be a better FED chair because of that. Do you 207 00:10:04,360 --> 00:10:06,960 Speaker 5: agree with where the FED is right now or do 208 00:10:07,040 --> 00:10:08,880 Speaker 5: you think they should be cutting and if so, do 209 00:10:08,880 --> 00:10:11,000 Speaker 5: you think it'll be political for them to take this cut? 210 00:10:11,040 --> 00:10:15,800 Speaker 5: In September, well Sherman Bella says they're data dependent. 211 00:10:15,920 --> 00:10:18,120 Speaker 6: I think that's good, But I think the way to 212 00:10:18,200 --> 00:10:24,760 Speaker 6: avoid these kinds of fights without much assurance of what 213 00:10:24,880 --> 00:10:27,320 Speaker 6: direction of the other is to have a rules based 214 00:10:27,440 --> 00:10:32,120 Speaker 6: monetary policy, the so called John Taylor Rule from Stanford University. 215 00:10:32,200 --> 00:10:34,240 Speaker 6: John and I work together on the White House Staff 216 00:10:34,520 --> 00:10:38,040 Speaker 6: in the nineties. The so called Taylor Rule would make 217 00:10:39,000 --> 00:10:43,320 Speaker 6: a range of mathematical recommendations on the targeting of short 218 00:10:43,559 --> 00:10:46,160 Speaker 6: rate rates by the FED. As opposed to it being 219 00:10:46,440 --> 00:10:50,000 Speaker 6: just a group of individuals on the Board of Governors 220 00:10:50,000 --> 00:10:52,400 Speaker 6: deciding that, or as Jim Grant refers to it, a 221 00:10:52,440 --> 00:10:55,920 Speaker 6: PhD standard, we would actually have a rules based standard. 222 00:10:56,520 --> 00:10:58,840 Speaker 6: Some others want to go back to a gold standard. 223 00:10:58,840 --> 00:11:01,920 Speaker 6: But a rules based standard would have a range of 224 00:11:02,000 --> 00:11:05,000 Speaker 6: guidance to the Fed of whend to cut and how 225 00:11:05,080 --> 00:11:07,560 Speaker 6: much to cut, and that would take some of this 226 00:11:08,800 --> 00:11:10,080 Speaker 6: instinct out of it. 227 00:11:11,080 --> 00:11:14,280 Speaker 1: So Congressmen, given that, and this is a criticism, other 228 00:11:14,280 --> 00:11:17,080 Speaker 1: people have said that the FED needs more of a framework. 229 00:11:17,120 --> 00:11:19,920 Speaker 1: They don't have reliable framework at this moment. Do you 230 00:11:19,920 --> 00:11:22,360 Speaker 1: think that's something that should be mandated in for the FED? 231 00:11:22,360 --> 00:11:24,160 Speaker 1: Would you like to see something along those lines. 232 00:11:25,320 --> 00:11:28,320 Speaker 6: I would like to see a rules based framework. And 233 00:11:28,559 --> 00:11:32,839 Speaker 6: when Chairman Powell was before the Committee a few weeks ago, 234 00:11:33,080 --> 00:11:36,559 Speaker 6: I asked him the status of their reassessment of their 235 00:11:36,760 --> 00:11:41,360 Speaker 6: very famous decision in August of twenty twenty, in the 236 00:11:41,400 --> 00:11:45,840 Speaker 6: middle of a pandemic, to just let inflation run a 237 00:11:45,840 --> 00:11:48,880 Speaker 6: little hotter than two percent, knowing that they could rein 238 00:11:48,920 --> 00:11:50,400 Speaker 6: it in which I think. 239 00:11:50,360 --> 00:11:50,560 Speaker 1: Is a. 240 00:11:52,360 --> 00:11:55,040 Speaker 6: Strong presumption that I don't know that's based in fact 241 00:11:55,120 --> 00:12:00,520 Speaker 6: as we've witnessed since twenty twenty one. I think that 242 00:12:00,880 --> 00:12:03,599 Speaker 6: is an opportunity for the Fed to reassess using a 243 00:12:03,679 --> 00:12:07,680 Speaker 6: rules based framework for their monetary policy. 244 00:12:07,760 --> 00:12:10,120 Speaker 2: A Congressman, since we last spoke, this race has changed 245 00:12:10,200 --> 00:12:12,520 Speaker 2: a lot, particularly in the last month. Can you talk 246 00:12:12,559 --> 00:12:15,320 Speaker 2: to me about how you see things evolving right now 247 00:12:15,520 --> 00:12:17,560 Speaker 2: when it comes to the issues. I think the impression 248 00:12:17,559 --> 00:12:18,840 Speaker 2: that a lot of people have that are coming on 249 00:12:18,840 --> 00:12:20,640 Speaker 2: this program right now is that we're not really talking 250 00:12:20,679 --> 00:12:22,920 Speaker 2: about those so much. It feels like we're talking about 251 00:12:22,920 --> 00:12:25,560 Speaker 2: the enthusiasm, the vibes, and the improvement that we're seeing 252 00:12:25,559 --> 00:12:28,560 Speaker 2: on the Democratic ticket since the sitting president dropped down 253 00:12:28,840 --> 00:12:30,920 Speaker 2: of the race. When it comes to the issues, I 254 00:12:30,960 --> 00:12:34,280 Speaker 2: know that you're very, very focused still, Congressman, on immigration, 255 00:12:34,720 --> 00:12:36,680 Speaker 2: Can you walk us through the things that you're concerned 256 00:12:36,720 --> 00:12:39,520 Speaker 2: about and do you think the former president is doing 257 00:12:39,559 --> 00:12:41,319 Speaker 2: a decent job of prosecuting the case? 258 00:12:43,000 --> 00:12:45,960 Speaker 6: Well? First, let's start there. I think to win this election, 259 00:12:46,400 --> 00:12:49,400 Speaker 6: it's a great opportunity for President Trump to be re elected. 260 00:12:49,440 --> 00:12:52,720 Speaker 6: I think his policies are much more in alignment of 261 00:12:53,760 --> 00:12:57,040 Speaker 6: my views are on the economy and national security, and 262 00:12:57,080 --> 00:13:00,160 Speaker 6: particularly border security. But we've got to stay focused on 263 00:13:00,200 --> 00:13:04,800 Speaker 6: the issues and get off some of the personalities here. 264 00:13:04,880 --> 00:13:07,080 Speaker 6: Let's focus on the issues, and I think your President 265 00:13:07,160 --> 00:13:10,720 Speaker 6: Trump and his vice president nominee JD. Evans focus on 266 00:13:10,760 --> 00:13:16,959 Speaker 6: the issues of national security, the border, community, policing, inflation. 267 00:13:17,640 --> 00:13:20,600 Speaker 6: They went and they went hands down on the border. 268 00:13:21,040 --> 00:13:24,240 Speaker 6: What I'm the most concerned about by the horrible Biden 269 00:13:24,320 --> 00:13:28,120 Speaker 6: policy of an open border is not just the millions 270 00:13:28,120 --> 00:13:30,440 Speaker 6: of people he's allowed in the country that we don't 271 00:13:30,440 --> 00:13:33,840 Speaker 6: have a full instinct of what to do about or 272 00:13:33,840 --> 00:13:36,880 Speaker 6: how to handle it, and swamping our border patrol system, 273 00:13:37,280 --> 00:13:40,280 Speaker 6: but the number of terrorists, people on the tear watch 274 00:13:40,320 --> 00:13:43,480 Speaker 6: lists that are in this country. And we've asked a 275 00:13:43,559 --> 00:13:46,240 Speaker 6: Chairman Turner of the Intelligence Committee, Chairman Grain of the 276 00:13:46,240 --> 00:13:50,160 Speaker 6: Homeland Security, and I have persistently for months asked for 277 00:13:51,040 --> 00:13:54,680 Speaker 6: this administration and the FBI and Homeland Security to tell 278 00:13:54,760 --> 00:13:57,959 Speaker 6: us where these people encountered on the terror watch list 279 00:13:58,080 --> 00:14:00,880 Speaker 6: are in this country, what has happened to them? And 280 00:14:00,920 --> 00:14:03,840 Speaker 6: when you think about millions of god aways, how many 281 00:14:03,880 --> 00:14:05,920 Speaker 6: more people are in the country that we don't know 282 00:14:06,000 --> 00:14:09,320 Speaker 6: about that we did not encounter. I find this very 283 00:14:09,360 --> 00:14:13,439 Speaker 6: concerning in light of the Pakistani comments about the Trump 284 00:14:13,480 --> 00:14:19,520 Speaker 6: assassination attempt, of the continuing Iranian documented Iranian influence in 285 00:14:19,560 --> 00:14:23,560 Speaker 6: the country on assassinations, in the recent Philadelphia discovery of 286 00:14:23,600 --> 00:14:28,560 Speaker 6: an isis K network that was operating the country having 287 00:14:28,640 --> 00:14:30,240 Speaker 6: come across our open border. 288 00:14:30,960 --> 00:14:33,120 Speaker 5: Kamorsman, if you're so concerned about the border, why did 289 00:14:33,120 --> 00:14:37,440 Speaker 5: the Republicans then ditch this idea of the legislation that 290 00:14:37,560 --> 00:14:40,200 Speaker 5: was circuling starting in the Senate with Langford when it 291 00:14:40,240 --> 00:14:41,520 Speaker 5: came to border security. 292 00:14:42,920 --> 00:14:46,200 Speaker 6: Well, first we passed HR two, which is the preferred 293 00:14:46,200 --> 00:14:50,440 Speaker 6: approach for House Republicans on both immigration reform and border security. 294 00:14:50,880 --> 00:14:52,680 Speaker 6: We got it passed, we sent it to the Senate, 295 00:14:52,720 --> 00:14:56,160 Speaker 6: there was no action on it. Senator Langford did a 296 00:14:56,240 --> 00:15:00,360 Speaker 6: good work trying to find consensus in the Senate, but look, 297 00:15:00,400 --> 00:15:04,720 Speaker 6: he was still facilitating thousands of people, undocumented people coming 298 00:15:04,760 --> 00:15:08,000 Speaker 6: in the border. He was not taking the concrete steps 299 00:15:08,040 --> 00:15:10,840 Speaker 6: that we put in HR two. So I think Am Marie. 300 00:15:10,920 --> 00:15:14,440 Speaker 6: That was the key difference for Speaker Johnson, for House Republicans, 301 00:15:15,120 --> 00:15:17,640 Speaker 6: and that's why that bill did not proceed in the center. 302 00:15:17,800 --> 00:15:20,000 Speaker 2: Congressman, we have to do this more often, sir. It's 303 00:15:20,000 --> 00:15:21,760 Speaker 2: going to catch up. And I promise if you I 304 00:15:21,800 --> 00:15:24,440 Speaker 2: say this every single year Razorbacks football, We're going to 305 00:15:24,440 --> 00:15:26,560 Speaker 2: make it happen this winter. Okay, going to make it happen. 306 00:15:26,800 --> 00:15:38,200 Speaker 2: All right, Thank you, sir. The Congressman French Shill of Arkansas. 307 00:15:41,000 --> 00:15:44,560 Speaker 2: Deborah Netshirt of Jennison, expecting to growth to continue for Lily, 308 00:15:44,760 --> 00:15:47,120 Speaker 2: writ in this thanks to a significant ramp up in 309 00:15:47,200 --> 00:15:52,080 Speaker 2: manufacturing capacity, uptake is going to increase dramatically in twenty 310 00:15:52,120 --> 00:15:55,160 Speaker 2: twenty six to twenty eight. This will translate into significant 311 00:15:55,200 --> 00:15:59,280 Speaker 2: sales and earning acceleration. Debra's joining us now to walk 312 00:15:59,360 --> 00:16:02,080 Speaker 2: us through all this and expand and give us detailed 313 00:16:02,080 --> 00:16:03,600 Speaker 2: Deborah in a way that I think we've been lacking 314 00:16:03,680 --> 00:16:06,440 Speaker 2: over the last few weeks or so. Welcome to the program. 315 00:16:06,560 --> 00:16:08,720 Speaker 2: I think for many people, and I'll speak for myself 316 00:16:08,760 --> 00:16:10,920 Speaker 2: when it comes to Novo versus Lily, I don't know 317 00:16:10,960 --> 00:16:13,240 Speaker 2: what the difference is, what the drugs are and what 318 00:16:13,320 --> 00:16:16,160 Speaker 2: the real distinction is between the two companies is Debora. 319 00:16:16,240 --> 00:16:18,080 Speaker 2: Can you help us with that? What is the distinction 320 00:16:18,160 --> 00:16:20,600 Speaker 2: between those two firms and the treatments and the drugs 321 00:16:20,640 --> 00:16:21,800 Speaker 2: that they're putting out to market. 322 00:16:22,800 --> 00:16:24,920 Speaker 7: Sure, well, thank you very much for having me. It 323 00:16:24,960 --> 00:16:26,840 Speaker 7: really does feel like they are part of the same 324 00:16:26,880 --> 00:16:30,960 Speaker 7: conversation lately and thought about as one company, doesn't it. 325 00:16:31,480 --> 00:16:33,920 Speaker 4: So Lily we'll start with Lily. 326 00:16:34,320 --> 00:16:37,080 Speaker 7: Lily is a little bit more of a diverse company 327 00:16:37,280 --> 00:16:42,560 Speaker 7: than Novo. They have a huge business and diabetes and obesity, 328 00:16:42,640 --> 00:16:45,160 Speaker 7: as we've talked about and as everyone knows, but they 329 00:16:45,280 --> 00:16:50,440 Speaker 7: also have been incredibly successful in oncology and immunology and 330 00:16:50,880 --> 00:16:54,920 Speaker 7: are just launching a new drug for Alzheimer's. But because 331 00:16:54,960 --> 00:16:58,520 Speaker 7: of the sheer size of the diabetes and obesity business, 332 00:16:58,600 --> 00:17:00,440 Speaker 7: a lot of the rest of Lily doesn't not get 333 00:17:00,480 --> 00:17:04,560 Speaker 7: talked about. The main drugs for Lily are ze Bound 334 00:17:04,600 --> 00:17:07,639 Speaker 7: and Manjaro. Is that Bound is marketed for obesity, whereas 335 00:17:07,680 --> 00:17:12,200 Speaker 7: Munjaro is marketed for diabetes. Novo is a little bit 336 00:17:12,240 --> 00:17:16,640 Speaker 7: more of a diabetes pure play. They've had a very 337 00:17:16,720 --> 00:17:21,119 Speaker 7: long They've had a long tenure in diabetes with a 338 00:17:21,119 --> 00:17:24,440 Speaker 7: big insulin business, turning to the golps. They have ozebic 339 00:17:24,480 --> 00:17:27,960 Speaker 7: for diabetes, they have ribeltis, and then they also have 340 00:17:28,080 --> 00:17:31,120 Speaker 7: a GOV which is their obesity drug. 341 00:17:31,920 --> 00:17:36,000 Speaker 1: I also understand the difference between those obesity drugs themselves. 342 00:17:36,040 --> 00:17:39,439 Speaker 1: For example, one of the big criticisms of Novo was 343 00:17:39,440 --> 00:17:41,760 Speaker 1: you have this drug that comes out and it allows 344 00:17:41,760 --> 00:17:43,800 Speaker 1: people to lose weight, but you have a problem where 345 00:17:43,800 --> 00:17:46,600 Speaker 1: people are losing muscle mass that in a way they're 346 00:17:46,600 --> 00:17:49,120 Speaker 1: almost becoming less healthy because of that. Who is at 347 00:17:49,119 --> 00:17:51,119 Speaker 1: the forefront of addressing that issue. 348 00:17:52,240 --> 00:17:54,360 Speaker 7: Well, I think I think the jury is out whether 349 00:17:54,440 --> 00:17:57,320 Speaker 7: or not the muscle mass is really an issue right now. 350 00:17:57,359 --> 00:18:00,560 Speaker 7: We need longer term data on obesity, which we don't 351 00:18:00,600 --> 00:18:03,840 Speaker 7: yet have. I think the one thing that you should 352 00:18:03,840 --> 00:18:06,800 Speaker 7: think about is we at Jennison really focus on the 353 00:18:06,800 --> 00:18:08,680 Speaker 7: long term, and if you look at the long term 354 00:18:08,760 --> 00:18:13,160 Speaker 7: data from diabetes, we're not seeing any adverse events related 355 00:18:13,200 --> 00:18:15,919 Speaker 7: to this difference between muscle and fat laws. So I 356 00:18:15,920 --> 00:18:17,679 Speaker 7: think we just need a little bit more time and 357 00:18:17,720 --> 00:18:20,159 Speaker 7: a little bit more data to see whether or not 358 00:18:20,280 --> 00:18:22,320 Speaker 7: this is a long term issue with these drugs. 359 00:18:22,359 --> 00:18:24,520 Speaker 1: And in the meantime, I mean the adoption and even 360 00:18:24,560 --> 00:18:27,960 Speaker 1: just the addressable market for these drugstebra is really big. 361 00:18:28,400 --> 00:18:31,159 Speaker 1: Since the nineteen seventies, the United States has had an 362 00:18:31,240 --> 00:18:34,880 Speaker 1: up trend in obesity rates. Are we about to witness 363 00:18:35,080 --> 00:18:38,280 Speaker 1: a wholesale societal shift where for the first time really 364 00:18:38,560 --> 00:18:41,639 Speaker 1: since the Great Depression, that obesity rates are going to 365 00:18:41,640 --> 00:18:42,280 Speaker 1: start to fall. 366 00:18:43,440 --> 00:18:45,480 Speaker 7: It would be really great if we could do if 367 00:18:45,480 --> 00:18:49,320 Speaker 7: we could see that because there is such a large 368 00:18:49,359 --> 00:18:53,639 Speaker 7: downstream effect of obesity on other body systems. One of 369 00:18:53,640 --> 00:18:56,159 Speaker 7: the most interesting things about the gops is just the 370 00:18:56,320 --> 00:18:59,280 Speaker 7: number of different diseases that they are having an impact on. 371 00:19:00,280 --> 00:19:05,800 Speaker 7: Seen a positive cardiovascular risk reduction in morbidity immortality. We've 372 00:19:05,840 --> 00:19:09,280 Speaker 7: seen an impact on liver disease called MASH. We've seen 373 00:19:09,720 --> 00:19:13,760 Speaker 7: positive impacts on slapapnia. We've seen positive impacts on kidney 374 00:19:13,840 --> 00:19:18,400 Speaker 7: disease and other types of cardiovascular diseases. So hopefully, as 375 00:19:18,440 --> 00:19:22,800 Speaker 7: time goes on and these gops are adopted, we'll see 376 00:19:23,359 --> 00:19:26,399 Speaker 7: this downstream effect take place. I think the thing to 377 00:19:26,440 --> 00:19:30,520 Speaker 7: focus on is since the obesity mids have come out, 378 00:19:30,640 --> 00:19:34,479 Speaker 7: we've really been supply constrained, and both Lily and Novo 379 00:19:34,960 --> 00:19:38,080 Speaker 7: have made really positive strides on supply and are going 380 00:19:38,119 --> 00:19:42,320 Speaker 7: to be exiting twenty twenty four with significantly more supply 381 00:19:42,400 --> 00:19:43,600 Speaker 7: than they've ever had before. 382 00:19:43,960 --> 00:19:46,639 Speaker 5: There's been a ton of enthusiasm, but you say utilization 383 00:19:46,960 --> 00:19:49,639 Speaker 5: isn't even close in terms of percentage of these drugs 384 00:19:49,680 --> 00:19:51,800 Speaker 5: in the market. Where do you see this going in 385 00:19:51,880 --> 00:19:55,240 Speaker 5: terms of percentage of the next five ten years. 386 00:19:57,040 --> 00:19:59,480 Speaker 7: I mean significantly higher than we are now. We're really 387 00:19:59,520 --> 00:20:02,720 Speaker 7: still only in the single digits when you think about obesity, 388 00:20:02,840 --> 00:20:04,200 Speaker 7: so we have a long. 389 00:20:03,960 --> 00:20:04,480 Speaker 4: Way to go. 390 00:20:05,440 --> 00:20:07,040 Speaker 2: There's a lot of people, Debora, as you know, trying 391 00:20:07,040 --> 00:20:10,960 Speaker 2: to develop second derivative trades around this story, and I 392 00:20:11,040 --> 00:20:13,200 Speaker 2: just wonder for you and the team what the process 393 00:20:13,280 --> 00:20:15,560 Speaker 2: is that you go through to develop those kind of trades. 394 00:20:15,640 --> 00:20:18,120 Speaker 2: I can save you from our perspective on this program. 395 00:20:18,119 --> 00:20:21,000 Speaker 2: We've had everyone from talking about the snack business all 396 00:20:21,000 --> 00:20:23,040 Speaker 2: the way through to the airline business and talking about 397 00:20:23,080 --> 00:20:26,359 Speaker 2: the savings on fuel costs of all things, Debora, if 398 00:20:26,359 --> 00:20:28,880 Speaker 2: the average passenger loses some weight, how are you thinking 399 00:20:28,880 --> 00:20:30,320 Speaker 2: about those second derivative trades? 400 00:20:32,200 --> 00:20:34,280 Speaker 7: Well, when we think about when we think about the 401 00:20:34,280 --> 00:20:38,040 Speaker 7: second derivative trades, we're really focused on any I'm looking 402 00:20:38,080 --> 00:20:40,600 Speaker 7: at drugs that can actually move the pup forward, not 403 00:20:40,800 --> 00:20:43,600 Speaker 7: really be similar to where we are now. 404 00:20:43,960 --> 00:20:45,200 Speaker 4: For the obesity market, we. 405 00:20:45,160 --> 00:20:47,879 Speaker 7: Believe is going to be incredibly different and segregated in 406 00:20:47,960 --> 00:20:51,520 Speaker 7: lots of different ways in ten to fifteen years from now. 407 00:20:51,800 --> 00:20:53,440 Speaker 7: And by that I mean there's going to be different 408 00:20:53,520 --> 00:20:57,000 Speaker 7: types of drugs and different types of administration profiles and 409 00:20:59,000 --> 00:21:02,520 Speaker 7: and timelines. And you take the drug for people that 410 00:21:02,640 --> 00:21:05,480 Speaker 7: need to lose different amounts of weight, so there will 411 00:21:05,520 --> 00:21:06,560 Speaker 7: be a lot more options. 412 00:21:06,560 --> 00:21:08,720 Speaker 4: If you need to lose twenty five. 413 00:21:08,520 --> 00:21:10,439 Speaker 7: Percent of your body weight or ten percent of your 414 00:21:10,480 --> 00:21:12,600 Speaker 7: body weight, there's going to be a drug for you. 415 00:21:12,680 --> 00:21:14,880 Speaker 7: There's also going to be a lot of combination drugs 416 00:21:15,240 --> 00:21:19,560 Speaker 7: for patients who have comorbid conditions. So we're really paying 417 00:21:19,560 --> 00:21:22,560 Speaker 7: attention to companies that are going to be able to 418 00:21:22,600 --> 00:21:26,960 Speaker 7: move the puck forward and find a differentiation. The thing 419 00:21:27,040 --> 00:21:30,520 Speaker 7: that's really interesting is even Lily, when they were on 420 00:21:30,560 --> 00:21:34,040 Speaker 7: their second quarter call yesterday talking about the amount of 421 00:21:34,280 --> 00:21:36,720 Speaker 7: R and D that they are doing that Novo's doing, 422 00:21:37,200 --> 00:21:40,240 Speaker 7: they haven't stopped with these Neither of these companies have 423 00:21:40,280 --> 00:21:43,040 Speaker 7: stopped with developing drugs and R and D. They are 424 00:21:43,080 --> 00:21:45,919 Speaker 7: still pedaled to the middle to try to develop the 425 00:21:45,960 --> 00:21:50,080 Speaker 7: next best thing. If you look at what's happened with 426 00:21:50,240 --> 00:21:54,240 Speaker 7: supply and just the sheer number of clinical trials an 427 00:21:54,720 --> 00:21:57,399 Speaker 7: a newcomer coming into this market is going to need 428 00:21:57,440 --> 00:22:00,760 Speaker 7: to spend a significant amount of money on both R 429 00:22:00,760 --> 00:22:04,560 Speaker 7: and D and manufacturing to really play. So it's not 430 00:22:04,680 --> 00:22:08,280 Speaker 7: only about can you develop a drug that has weight 431 00:22:08,320 --> 00:22:12,119 Speaker 7: loss that is better? It's what else does this drug do? 432 00:22:12,400 --> 00:22:15,080 Speaker 7: How is it different than what we have? Is it 433 00:22:15,119 --> 00:22:20,400 Speaker 7: more tolerable? Is the administration profile more favorable? And then 434 00:22:20,440 --> 00:22:26,040 Speaker 7: also can you develop a really broad phase three program 435 00:22:26,080 --> 00:22:29,520 Speaker 7: and afford to develop a really broad Phase three program 436 00:22:29,680 --> 00:22:33,879 Speaker 7: to demonstrate efficacy across as many diseases as both Lily 437 00:22:34,000 --> 00:22:36,240 Speaker 7: and Novo have and are. 438 00:22:36,119 --> 00:22:38,600 Speaker 4: Continuing to And then can you. 439 00:22:38,600 --> 00:22:43,840 Speaker 7: Build manufacturing and scale it up and build supply to 440 00:22:44,000 --> 00:22:46,840 Speaker 7: really be able to be a meaningful entrant. 441 00:22:46,480 --> 00:22:47,199 Speaker 4: In this market. 442 00:22:47,280 --> 00:22:49,960 Speaker 2: Yeah, that's not easy. That so, Deborah, appreciate your time 443 00:22:49,960 --> 00:22:51,639 Speaker 2: and place. We've got to make this happen. I have 444 00:22:51,640 --> 00:22:54,040 Speaker 2: no doubt we'll be talking again soon. Debonnat shut There 445 00:22:54,320 --> 00:22:59,479 Speaker 2: of Jennison Associates. This is the Bloomberg Sevenants podcast, bringing 446 00:22:59,560 --> 00:23:03,159 Speaker 2: you the best in markets, economics, angio politics. You can 447 00:23:03,200 --> 00:23:06,000 Speaker 2: watch the show live on Bloomberg TV weekday mornings from 448 00:23:06,000 --> 00:23:09,280 Speaker 2: six am to nine am Eastern. Subscribe to the podcast 449 00:23:09,320 --> 00:23:12,879 Speaker 2: on Apple, Spotify, or anywhere else you listen, and as always, 450 00:23:12,880 --> 00:23:15,480 Speaker 2: on the Bloomberg Terminal and the Bloomberg Business app.