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Speaker 2: Painting out of four buckets Today, there's a lot going
Speaker 2: on around here. Presidential debates, primary results, an Israel vote
Speaker 2: in the House today, and of course CPI Day. We're
Speaker 2: going to knock down all of these stories with some
Speaker 2: of the smartest minds in politics and economics over the
Speaker 2: next hour, and glad you're with us as we begin
Speaker 2: with data this morning at eight thirty. Suddenly everyone feeling
Speaker 2: pretty good about things as I read the headline of
Speaker 2: the terminal US inflation EBBS for first time in six
Speaker 2: months in relief for FED. This is the headline that
Speaker 2: so many have been hoping for. But let's look under
Speaker 2: the hood, because the headline does not always tell the
Speaker 2: whole story. Mark Hamrick joins us Now bank Rate Washington
Speaker 2: Bureau chief with his take on this market. It's good
Speaker 2: to have you back. Is the euphoria justified?
Speaker 3: It's going to be with you, Joe. I think David
Speaker 3: Kelly summed that up well in the earlier SoundBite, in
Speaker 3: the sense that we did not suffer another negative surprise here,
Speaker 3: and so just to have things show up essentially in
Speaker 3: line with expectations feels like a moral victory. But as
Speaker 3: we sort of think about this battle against inflation, the
Speaker 3: battle continues and we cannot say that victory is declared.
Speaker 3: But you'll take the wins when you can get them.
Speaker 3: And of course, you know, if we're thinking about the
Speaker 3: prospect of a raid hike around September, there's a heck
Speaker 3: of a lot of things that need to happen between
Speaker 3: now and then, including statistical data releases.
Speaker 2: Yeah, now you meant hike or cut, because people have
Speaker 2: been talking about both.
Speaker 4: Mark Well.
Speaker 3: Chairman Palse is not talking about a rate hike, and
Speaker 3: so I think we probably need to follow his lead
Speaker 3: on that unless we get some truly remarkable surprise, and
Speaker 3: so we're talking about a rate cut. And I think
Speaker 3: that as we've either been part of these discussions, Joe
Speaker 3: or listen to them more broadly, I think part of
Speaker 3: this is trying to keep some things in perspective, and
Speaker 3: part of that also is to acknowledge high degrees of
Speaker 3: uncertainty between then and now the world can change quickly.
Speaker 3: The other part is that higher for longer, which is
Speaker 3: sort of the baseline expectation for interest rates these days,
Speaker 3: can persist beyond the first rate cut. So what is
Speaker 3: the destination? And we'll have a better idea about that,
Speaker 3: you know, as we move along that journey as well.
Speaker 3: Another way of saying that, compared to what happened before
Speaker 3: the pandemic, it's probably a good expectation, in other words,
Speaker 3: a smart expectation or assumption to say that rates will
Speaker 3: remain elevated for the foreseeable future, but just not as
Speaker 3: high as they have been or are right now.
Speaker 2: Spending time with Mark Hamrick at bank rate, we're going
Speaker 2: to have to start seeing two tenths, right, maybe one tenth.
Speaker 2: We've got to start getting down to lower numbers here
Speaker 2: before we can have a real conversation about rate cuts. Right,
Speaker 2: we're celebrating point three instead of point four. But these
Speaker 2: need to start going lower.
Speaker 3: They do if only to sort of meet the Federal
Speaker 3: Reserves expectations for its preferred inflation gauge, personal consumption expenditures
Speaker 3: and core And so could that happen short. I think
Speaker 3: that you know, as was mentioned earlier, as we see
Speaker 3: consumers spending, as we see consumers saying no to a
Speaker 3: lot of prospective purchases, trading down where they are accepting
Speaker 3: the terms of those purchases, and in the marketplace perhaps
Speaker 3: setting prices at lower levels. I think we're seeing some
Speaker 3: weakness now and automobile sales which are showing up on
Speaker 3: dealer lots. They have essentially a couple of ways to
Speaker 3: respond to that, including price. Affordability is really the other
Speaker 3: watchword of our day, because we talk about inflation being
Speaker 3: this dynamic that's been present for more than two years
Speaker 3: in a significant way, but affordability or lack thereof, is
Speaker 3: really the end result of that, and that's the thing
Speaker 3: that so many people are struggling against.
Speaker 2: Really interesting to hear some of the anecdotal evidence as
Speaker 2: well from earnings reporting season, Mark, and I know this
Speaker 2: doesn't qualify as data for someone like yourself, but when
Speaker 2: you hear Starbucks talking about people trading down or not
Speaker 2: buying that expensive cup of coffee the way they were
Speaker 2: a couple of months ago, when you hear McDonald's in
Speaker 2: that same reporting season say the same thing, they're trying
Speaker 2: to work on a five dollars value meal to keep
Speaker 2: people coming into the restaurant. How do you add that
Speaker 2: to the composite of data that's going to prompt the
Speaker 2: FED one way or the other.
Speaker 3: Well, it's color right, And I think, you know, these
Speaker 3: are data points. They're not government you know, statistical data,
Speaker 3: but they are data points. And I literally did write
Speaker 3: down that five dollars meal thing on my sort of
Speaker 3: omnibus notepad this morning because I think that's sort of
Speaker 3: how this presented itself is presenting itself. You know, if
Speaker 3: you can't get people to pay let's say, you know,
Speaker 3: nine dollars per meal at a McDonald's, then you have
Speaker 3: to adjust because ultimately, unless we're on the road, these
Speaker 3: are discretionary purchases right in the words, you do not
Speaker 3: have to go get that four dollars twenty five cent
Speaker 3: coffee that you could make at home for significantly less
Speaker 3: than that, And that's where it becomes almost a luxury.
Speaker 3: And I think that's where consumers are drawing their own
Speaker 3: lines on that. I've done it in the past several
Speaker 3: days myself, where you know, we had Mother's Day last weekend.
Speaker 3: I opted against the beef to put on the grill.
Speaker 3: Went for the chicken instead, And you know, I was
Speaker 3: more satisfied with the latter purchase.
Speaker 5: Than I would have been with the former.
Speaker 2: I get that.
Speaker 1: I don't know.
Speaker 2: Next year, maybe take mom for the five dollar value,
Speaker 2: mel I think.
Speaker 5: That's We'll see how that goes over.
Speaker 2: Yeah, it's good to have you back. Mark Hamrick with
Speaker 2: his instant read on CPI, the Bank Rate Washington Bureau
Speaker 2: Chief with us here on balance of power. We'll hit
Speaker 2: this data as we work through the program. If only
Speaker 2: in our market checks. This is going over real well
Speaker 2: on Wall Street and Charlie Pellett. We'll breathe some life
Speaker 2: into that for us a little bit later on, As
Speaker 2: I mentioned, four buckets were painting at it today. We
Speaker 2: just went through one with CPI. The other is a
Speaker 2: looming vote today in the House on a piece of legislation,
Speaker 2: a resolution that will essentially call everyone on the carpet
Speaker 2: when it comes to our policy in Israel. This follows,
Speaker 2: of course. You remember we had a lot of talk
Speaker 2: about this last week, Joe Biden's decision to withhold some
Speaker 2: weapons shipments from Israel that prompted the Speaker of the
Speaker 2: House and Republican leadership to bring this resolution to the
Speaker 2: floor to compel the President to continue supporting Israel. And
Speaker 2: the whipping right now is looking interesting. We're hearing that
Speaker 2: as many as thirty or forty Democrats could break away
Speaker 2: from the White House to vote for this resolution. Everybody's
Speaker 2: trying to cover themselves here in an election cycle. So
Speaker 2: we talk about the policy in Israel. There's also big
Speaker 2: news coming out of Ukraine, and that's why we wanted
Speaker 2: to spend some time with Michael Allen, who's just made
Speaker 2: his way across town from Beacon Global Strategies. It's great
Speaker 2: to see you, sir, Welcome back to Bloomberg. You, of course,
Speaker 2: former Special Assistant to the President, former Senior Director Counterproliferation Strategy,
Speaker 2: National Security Council. Your experience is important to us here.
Speaker 2: Let's start with Israel right now, because I'm having a
Speaker 2: hard time telling what's going on. Last week, we're telling
Speaker 2: everybody about these two thousand pound bombs that the President
Speaker 2: was withholding, But the headline this morning is he's working
Speaker 2: up a new billion dollar weapons package even as this
Speaker 2: vote takes place to essentially condemn his decision last week.
Speaker 2: How do you rationalize all of these at once.
Speaker 6: So it's very confusing. I mean it even goes back farther.
Speaker 6: We just appropriated another fourteen billion dollars to go to Israel,
Speaker 6: and we say act in your own self defense. But
Speaker 6: yet we're saying with the other hand, we're going to
Speaker 6: deny you some arms. It's especially confusing this week, though,
Speaker 6: I think that real answer is a boring, bureaucratic answer
Speaker 6: that some of these things have been in the pipeline
Speaker 6: and they're multiple times for Congress and the administration to
Speaker 6: sort of say these things are ready to go. But
Speaker 6: it must infuriate them from a strategic messaging standpoint, because
Speaker 6: it looks like they're trying to to, on the one hand,
Speaker 6: limit what BB's doing in RAFA by saying no more
Speaker 6: offensive weapons while reassuring everyone, well, there's more long term
Speaker 6: stuff on the way. So it's really confusing, and I
Speaker 6: wouldn't blame anybody for trying to say, what is the
Speaker 6: Biden policy?
Speaker 2: Well, I'll tell you interesting insights from General David Petraeus,
Speaker 2: retired General, back from the Cutter Economic Forum, where he
Speaker 2: sat down with our editor in chief John mckelthwaite to
Speaker 2: talk about what it is to go after Hamas, remembering,
Speaker 2: of course, his experience in the Middle East fighting the Taliban.
Speaker 2: Here's what he told Bloomberg earlier today.
Speaker 4: Let's listen, you have to clear and hold and keep
Speaker 4: the enemy out of the people. And I do believe,
Speaker 4: by the way, that Hamas is the equivalent of the
Speaker 4: Islamic State. This is an irreconcilable extremist group that I
Speaker 4: believe does need to be destroyed. But how you do
Speaker 4: that matters a great deal, and I would welcome seeing
Speaker 4: a commitment that we are going to make your lives better.
Speaker 4: Pavillions in Gaza.
Speaker 2: Michael, I love your take on that. Do you see
Speaker 2: Hamas as the equivalent of the Islamic State Israel essentially
Speaker 2: fighting Isis Does that go for Hesbela to the north
Speaker 2: as well.
Speaker 6: I think I do agree with him, and I agree
Speaker 6: that both Hesbilay and Hamas are rejectionist groups. They're irreconcilable.
Speaker 6: There's no way to bring them over into a more
Speaker 6: moderate camp, if you will. I was in Israel last week.
Speaker 6: The issues are just as you think. Netanyahu cannot say
Speaker 6: anything about a post Gaza situation because he would lose
Speaker 6: the right wing of his governing coalition in the Kanesse,
Speaker 6: so he is restrained and saying things like he's saying
Speaker 6: today of oh, well, I can't talk about this until
Speaker 6: the whole thing is over. But yeah, I think even
Speaker 6: though the Israeli society is racked with concerns about the hostages,
Speaker 6: they generally agree we need to destroy Hamas at the
Speaker 6: very least the four battalions who are in the Rafa area,
Speaker 6: and then we can begin to see our way through
Speaker 6: the end of this phase.
Speaker 2: Of the war. You were there last week? Yeah, How
Speaker 2: did people react when they were talking with somebody fresh
Speaker 2: out of Washington here? Did you get an earful on this?
Speaker 2: Did they want to talk to you about the protests
Speaker 2: in America? What was the conversation?
Speaker 6: They were very concerned. They're very concerned about the growth
Speaker 6: and explosion, frankly, of anti Semitism. They are, though, trying
Speaker 6: to plead with us and say, after September eleventh, you
Speaker 6: wouldn't have agreed to anyone trying to restrict your freedom
Speaker 6: of action. Why is Biden trying to do this to us?
Speaker 6: The thing I think, though, that is the most concerning
Speaker 6: for them is the idea that over time we would
Speaker 6: cut them off from arms and assistants. On the one hand,
Speaker 6: they want to say, listen, we're going to do this ourselves.
Speaker 6: But on the other hand, Netnyaho cannot sacrifice in the
Speaker 6: end relationship with the United States. That is the greatest
Speaker 6: asset arguably that Israel has, at least national security wise.
Speaker 6: So we may not be able to talk him out
Speaker 6: of going into Rafa, But if he's thinking about going
Speaker 6: into Hespola before the election, I really don't think the
Speaker 6: relationship with Israel in the United States will survive that.
Speaker 2: That's saying a lot because a lot of people think
Speaker 2: that's about to happen. Yeah, I need to ask you,
Speaker 2: Michael about Ukraine troubling. If you're concerned about the future
Speaker 2: of Ukraine troubling reporting in the New York Times today
Speaker 2: that would suggest we are at an inflection point that
Speaker 2: could be the turn upon which Ukraine really starts losing
Speaker 2: this battle. Eighteen months ago, White House some Pentagon officials,
Speaker 2: as we're reminded, we're debating whether Russia was about to collapse.
Speaker 2: Russia is making a serious move right now. Ukraine is
Speaker 2: asking for weapons, a patriot battery for Kharkiv, where Russia
Speaker 2: is making quite a bit of headway here, but to
Speaker 2: see the side effect of a month's long debate actually
Speaker 2: show itself on the battlefield like this is troubling a
Speaker 2: lot of US officials. What's the real situation on the ground.
Speaker 6: It's alarming. The Ukrainians are losing villages. The Russians are
Speaker 6: exploiting what their strengths are, which are manpower and industrial might,
Speaker 6: and throwing everything they can at the Ukrainians. Now with
Speaker 6: the Ukrainians got a morale boost out of the fact
Speaker 6: that on April twentieth we paced, we did the Ukrainian aid,
Speaker 6: but not all of that, not even a small portion
Speaker 6: of that has come online yet, So I don't know
Speaker 6: that they're enjoying the benefits of what they might in
Speaker 6: another month or two. But they're trying to hold on.
Speaker 6: The Battle of Harkiev, as you mentioned, has begun. I
Speaker 6: think the Russians don't have enough troops, they don't have
Speaker 6: it sized correctly to take the entire city. But it's
Speaker 6: touch and go, and things are going to get worse
Speaker 6: before before they get better.
Speaker 2: For Ukraine. Well, okay, but that also would suggest there's
Speaker 2: time for Ukraine to turn this around.
Speaker 6: Yes, because Russia at the end of the day still
Speaker 6: doesn't have the right strategy or the right leadership. I
Speaker 6: think to do a sustained breakthrough in Ukraine, they may
Speaker 6: win villages, they may make some progress here and there.
Speaker 6: It is going to be alarming and seem alarming. But
Speaker 6: for them to break through, for example, like the Ukrainians
Speaker 6: did when they took Karkey, yes War Hairson in twenty
Speaker 6: twenty two, I don't think you're going to see anything
Speaker 6: that dramatic, but wow, that would cause a panic.
Speaker 2: Well, your perspective is important here because I'm here in
Speaker 2: too little, too late. You don't agree with that.
Speaker 6: I think it came just in time, but barely.
Speaker 1: I mean.
Speaker 6: The hard part, of course is getting all this stuff
Speaker 6: over there and getting it online. There are obviously munitions, backlogs.
Speaker 2: And all sorts of a lot more to deliver.
Speaker 6: I think they'll hold on, but it's going to be
Speaker 6: touch and go, and.
Speaker 2: A lot more to manufacture as well, in that sixty
Speaker 2: billion dollar truck. Gosh, Michael, it's great to see you.
Speaker 2: Michael Allen from Beacon Global Strategies helping us walk through
Speaker 2: the news today on the geopolitical front.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
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Speaker 1: Just Say Alexa Play Bloomberg eleven thirty.
Speaker 7: It's not just CPI day. This is also a day
Speaker 7: where we got news not just on inflation, but on
Speaker 7: presidential debates will be happening between Joe Biden and Donald Trump.
Speaker 7: The first will be on June twenty seventh in Atlanta,
Speaker 7: the swing state of Georgia, and that is where we
Speaker 7: go in our next conversation. I'm pleased to say that
Speaker 7: joining us here on Balance of Power on Bloomberg Television
Speaker 7: and Radio as doctor Bernice King. She's the daughter of
Speaker 7: Martin Luther King, Junior and the CEO of the King Center.
Speaker 7: Joining us from our Atlanta bureau, Doctor King, thank you
Speaker 7: so much for being here. We appreciate your time as
Speaker 7: we look ahead to what will go down in Atlanta
Speaker 7: just over a month from now. It comes against a
Speaker 7: backdrop of polls suggesting, including a New York Times Siana
Speaker 7: pol just earlier this week, that not only is Donald
Speaker 7: Trump leading in swing states including Georgia. Twenty percent of
Speaker 7: black voters is the tally he's winning right now. That
Speaker 7: would be the highest for any Republican presidential candidate since
Speaker 7: the enactment of the Civil Rights Act of nineteen sixty four.
Speaker 7: What exactly do you see happening here? Why is support shifting?
Speaker 8: Well, I think when people feel like they are not
Speaker 8: getting their issues heard or represented in a period of time,
Speaker 8: and there is a shift in the possibility of changing
Speaker 8: administrations or candidates, people have a tendency to shift parties
Speaker 8: or shift.
Speaker 9: To other individuals who may be running in the same party.
Speaker 8: We saw that, as you know, in two thousand and
Speaker 8: eight with President Obama after President Bush.
Speaker 9: We saw that.
Speaker 8: When Obama ran again, some people who did not vote
Speaker 8: for him the first time voted for him the second time,
Speaker 8: or people who did not vote for him who people
Speaker 8: who voted for President Bush and this time around when
Speaker 8: Obama was running, did not vote in the Republican Party
Speaker 8: voted in the Democratic Party because.
Speaker 9: They wanted hope, they wanted change.
Speaker 8: So I think there are people in the black community
Speaker 8: who are feeling like not a lot has changed, especially
Speaker 8: economically in the black community, and I think many of
Speaker 8: them are being driven by that.
Speaker 5: Doctor King.
Speaker 2: It's great to have you with us, and I appreciate
Speaker 2: the time that you're giving us today. From Atlanta. We
Speaker 2: were in Atlanta for the Senate runoff that re established
Speaker 2: Raphael Warnock as the Senator from Georgia, and I had
Speaker 2: the opportunity to walk around the King Center, spent time
Speaker 2: walking past that beautiful reflecting pool, and the people we
Speaker 2: spoke with that day talked about Joe Biden and Democrats
Speaker 2: what they could do to help Georgia. Raphael Warnock, of course,
Speaker 2: is a big part of that conversation, and we're having
Speaker 2: a very different conversation at this point now. But you're there.
Speaker 2: What are you actually hearing from people? Do you believe
Speaker 2: these polls? Do you believe that Donald Trump is going
Speaker 2: to secure the black vote in twenty twenty four.
Speaker 8: I don't know if it's a matter of a belief.
Speaker 8: I think there are many people concerned that that could
Speaker 8: be the case, and it's not speculation. I mean, especially
Speaker 8: black males who seemed to be more attracted to Donald
Speaker 8: Trump and his candidacy. And I think there's going to
Speaker 8: be a There has to be a plan and a
Speaker 8: strategy for the Biden administration to really creatively figure out
Speaker 8: how to reach especially this next generation who's very disgruntled
Speaker 8: right now. UH with the Biden administration. It's not gonna
Speaker 8: be easy, unfortunately, but it this is uh, this probably
Speaker 8: is the the most defining l election of of my
Speaker 8: my time. You know, I've been here sixty one years,
Speaker 8: I've been you know, voting for what forty five somewhere
Speaker 8: around there forty four years.
Speaker 9: Or so, you know.
Speaker 8: I it's an important election and people have to be
Speaker 8: very thoughtful about how they wanna see our nation move
Speaker 8: forward uh in the coming years, and who is going
Speaker 8: to best represent that policy wise and tone and tenor wise.
Speaker 9: Because it all goes together. Presidents set a.
Speaker 8: Tone in a nation and that is to me just
Speaker 8: as important as the policy side. As we know, most
Speaker 8: of the policies are passed by Congress. Th they're running
Speaker 8: as well this year, So it has to be very
Speaker 8: thoughtful in the approach. And I'm not sure many people
Speaker 8: are being thoughtful at this time. Typically people are led
Speaker 8: by you know, emotion, and we also have to be
Speaker 8: thoughtful globally. You know, it can't just be about me,
Speaker 8: because I live collectively in community. It's about my neighbors,
Speaker 8: So I have to think about it holistically, you know,
Speaker 8: about who would best represent us holistically as a nation
Speaker 8: and also those very fundamental issues that affect the least
Speaker 8: among us.
Speaker 7: Well as we consider the issues, and knowing that President
Speaker 7: Biden himself will actually be down in Georgia this weekend
Speaker 7: giving the commencement address at Morehouse, we've seen a lot
Speaker 7: of turmoil on college campuses lately. The issue of Israel
Speaker 7: and the ongoing war in Gaza is definitely one that
Speaker 7: seems to be shaping this election cycle, and especially given
Speaker 7: you and your family's legacy a peaceful protests, what do
Speaker 7: you make of what we have seen on campuses across
Speaker 7: the country that have not always been peaceful and in fact,
Speaker 7: in many instances have turned violent.
Speaker 8: Well, I think I think in all fairness, UH, it
Speaker 8: has to be a balanced approach and how we talk
Speaker 8: about it. UH. As as with any UH protest, any movement,
Speaker 8: there's gonna be people who infiltrate UH happen with my father.
Speaker 8: The difference I think in today's time is because there's
Speaker 8: not a real strategy that people are organizing around collectively
Speaker 8: with parameters and criteria. It's it's very difficult in a
Speaker 8: world where people can get you know, information instantly, uh
Speaker 8: to have those kind of regulations. But you have to,
Speaker 8: uh because otherwise what becomes the stories what you're saying.
Speaker 10: Uh.
Speaker 8: My my father was able to guard against that, as
Speaker 8: you know Memphis, they had to pull him out right
Speaker 8: before uh he was assassinated. Shortly before he assassinate that
Speaker 8: he led a protests there and some people that didn't
Speaker 8: filtrate it to turn it violent. And he had a
Speaker 8: track record of nonviolence, and that's important uh as well
Speaker 8: as we approach to see. So yes, that that is
Speaker 8: true that there have been some, but I I do
Speaker 8: want to applaud the young people who have not been violent,
Speaker 8: the ones who have been trying to press the message
Speaker 8: about what's happening to the Palestinians, and those who are
Speaker 8: pressing the message about Palestinians and freeing the hostages, because
Speaker 8: all of this is getting lost because I think there
Speaker 8: are people out there who genuinely want a holistic approach
Speaker 8: to what's what's happening, and they want something that's humane
Speaker 8: and the saving of lives period and and so that's
Speaker 8: not getting to the surface.
Speaker 9: And so I do not.
Speaker 8: Uh support the violence because I'm I come from a
Speaker 8: place of nonviolence, but I do know that there are
Speaker 8: people out there who do have a posture of trying
Speaker 8: to do this in a peaceful way, and unfortunately, when
Speaker 8: people feel like their demands are not being heard, it
Speaker 8: often happens. That's when Daddy said, you get the violence
Speaker 8: is the language of the unheard. So we have to
Speaker 8: look at why is this happening as well.
Speaker 2: It's an awfully important line right now, Doctor King. Kayley
Speaker 2: mentions the speech at Morehouse, the commencement addressed by President Biden.
Speaker 2: That's not all we have on the schedule this week.
Speaker 2: On Thursday tomorrow he'll be meeting with platus from Brown
Speaker 2: versus the Board of Education case and their families. On Friday,
Speaker 2: he's speaking at an NAACP event, who will address members
Speaker 2: of the Little Rock nine a campaign event on Saturday
Speaker 2: in Atlanta, and then Morehouse on Sunday, Doctor King, is
Speaker 2: being present like this help.
Speaker 9: Well? If being present is consistent?
Speaker 8: Yes, it's very difficult if people perceive your presence as
Speaker 8: being more political. And I think that's what a lot
Speaker 8: of people who in elected office face, and that is
Speaker 8: where are you in the middle? You know, in the
Speaker 8: in the times in between, UH, and and I think
Speaker 8: people are experiencing that they're showing up now, but what
Speaker 8: about those other times. Now, I'm not suggesting that UH,
Speaker 8: that has not been the case with the administration. But
Speaker 8: if it is the case that you have been consistently present,
Speaker 8: then the messaging has to improve, UH. And people need
Speaker 8: to know that you have and those people who n
Speaker 8: who know you've been present, need to be the voice saying,
Speaker 8: let me show you how they've been present.
Speaker 9: Here are the results.
Speaker 8: So the the campaign can't speak. The people who have
Speaker 8: benefited from UH, the administration, should, I say, need to
Speaker 8: be speaking. Let me show you how this has impacted
Speaker 8: my life. This is what I have gotten from the
Speaker 8: Biden administration. So it's now's the time for the people
Speaker 8: who believe in this candidate, who believe in President Biden,
Speaker 8: because he's a candidate. Now unfortunately he's the president, but
Speaker 8: yet he's a candidate. So now the people who believe
Speaker 8: in what he's done as the president need to be
Speaker 8: speaking for him while he is the candidate and saying,
Speaker 8: this is what he's done for our communities, our group
Speaker 8: with these issues.
Speaker 2: Only you could make the point in the way that
Speaker 2: you just did, Doctor King, were delighted that you could
Speaker 2: come and talk to us today live from Atlanta. Doctor
Speaker 2: Bernice King, CEO of the King Center, thank you for
Speaker 2: joining here on Balance of Power on Bloomberg TV and Radio.
Speaker 2: I'm Joe Matthew alongside Kaylee Lines. Fascinating conversation, Kaylee, as
Speaker 2: we spend so much time talking to strategists from here
Speaker 2: inside the beltwagh. Obviously the conventional wisdom inside the bubble
Speaker 2: is important when you're dealing with Congress and the White House,
Speaker 2: but hearing your perspective like that be awfully important for
Speaker 2: both campaigns right now.
Speaker 7: Yeah, And the message from doctor King there essentially is
Speaker 7: consistency is key, not just one week of events that
Speaker 7: ultimately will make a difference when voters in specific demographic
Speaker 7: troops are questioning whether or not your policies ultimately have
Speaker 7: cater to them or not.
Speaker 2: Her words were carefully chosen there. I'll be curious to
Speaker 2: see his reception at these events this week.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 1: us live weekdays at noon Eastern on a car play
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Speaker 1: on YouTube.
Speaker 7: My eyes are looking out, Joe to the twenty seventh
Speaker 7: of June. My calendar is marked big red circle, first
Speaker 7: debate between Biden and Trump of the twenty twenty four cycles.
Speaker 2: Yeah, is on. It's going to be like a pin
Speaker 2: dropping in that room. Imagine no crowd. Yeah, No one's clapping,
Speaker 2: no cheering, Not that they're supposed to anyway, but this
Speaker 2: is what happens, and then they get their mics caught
Speaker 2: off over time. It's going to be a surreal environment.
Speaker 7: For these two, assuming that all those rules can be
Speaker 7: agreed to fair enough. When Donald Trump's indicating he would
Speaker 7: prefer something with a live audience, a bigger venue, maybe
Speaker 7: not wanting the mic to be clipped at any one time.
Speaker 2: Yes, right, so we'll see, I guess again, assuming that
Speaker 2: everyone agrees to all of this, Let's see what the
Speaker 2: panel thinks. Rick Davis, of course, Bloomberg Politics contributor Republican strategist,
Speaker 2: has actually not only run presidential campaigns, but been deeply
Speaker 2: involved in this planning process that typically includes the Commission
Speaker 2: on Presidential Debates. He's with us alongside Brad Howard, Democratic
Speaker 2: strategist founder of the Corkoran Street Group. Brad, I know
Speaker 2: you're feeling pretty good about the position that Joe Biden
Speaker 2: is in walking into this, But how worried are you
Speaker 2: about live fact checking? Or just Donald Trump, who never
Speaker 2: cared about the rules anyway, why would he start now?
Speaker 5: Yeah, I mean that's obviously going to be a concern.
Speaker 11: You know, we saw just how rattling it was when
Speaker 11: he did it to Hillary of twenty sixteen, was unprepared
Speaker 11: to holding a two account.
Speaker 5: Then I think did better in twenty twenty.
Speaker 11: But you're right, the combination of trying to hold him
Speaker 11: to account could develop every single answer on that show.
Speaker 11: And you know, and I think there is some legitimate
Speaker 11: concern of is it really the moderator's role to correct
Speaker 11: everything that they say? That should that be left up
Speaker 11: to the American people? So I think, you know, I
Speaker 11: think there's a reasonable happy medium there. I think the
Speaker 11: moderators that I'm sure seen and will choose will be
Speaker 11: you know, they have a great set a bench of
Speaker 11: experienced moderators, and so I think I trust these views
Speaker 11: organizations to handle it.
Speaker 5: Better probably than the commission here.
Speaker 11: So we'll look forward to it and just to the
Speaker 11: point of your your son units driver's license where I'm from.
Speaker 5: Our response to that would just be bless your heart,
Speaker 5: So good luck with that.
Speaker 9: Bless your heart. All right?
Speaker 7: Well, Rick, come on in here, because obviously we've seen
Speaker 7: a debate between Donald Trump and Joe Biden before in
Speaker 7: the twenty twenty cycle. We know how perhaps undignified at
Speaker 7: certain points it was. To characterize it, how do you
Speaker 7: prep this go around for a debate between Donald Trump,
Speaker 7: who isn't always reluctant to stray from the truth, if
Speaker 7: you're Joe Biden, who tends to stick more to the truth.
Speaker 12: Yeah, I think Joe Biden's going to have to really
Speaker 12: figure out a way to distance himself from Trump, but
Speaker 12: also be really on alert because I agree it's hard
Speaker 12: to fact check Donald Trump, but I mean to some
Speaker 12: degree that's going to be Biden's job. He can't just
Speaker 12: ignore factual misrepresentations coming from his opponent because you can't
Speaker 12: rely on the moderators. CNN has a bad track record
Speaker 12: with Donald Trump. You know, they much discussed town hall
Speaker 12: that CNN did during the campaign with Donald Trump turned
Speaker 12: into a live fest and they lost control of it.
Speaker 12: Donald Trump is a disruptive guy. He knows how to
Speaker 12: take control of these situations. He's got enough, you know,
Speaker 12: capacity to really be a just truptive force in it
Speaker 12: something like a debate. And you know, General Joe Biden,
Speaker 12: I mean, come on, I mean, he's he's a dignified
Speaker 12: guy who tries to play by the rules, even if
Speaker 12: there are no rules to be played by. And so
Speaker 12: I think that they're going to have to throw out
Speaker 12: the playbook with Joe Biden, force him to not think
Speaker 12: about debates the way he traditionally has. I mean, he's
Speaker 12: got fifty years of you know, political experience debating on
Speaker 12: one set of rules, and this is a different time,
Speaker 12: a different place, and a different opponent. You've got to
Speaker 12: throw out that rule book and ready be ready to
Speaker 12: really go to town on Donald Trump and and have a
Speaker 12: firm grasp of the facts so that he can correct
Speaker 12: the record, because if the record stands, he's going to
Speaker 12: look really bad.
Speaker 2: I still have so many questions for both of you here, Brad,
Speaker 2: including who's going to watch nobody's going to mourn.
Speaker 5: I realize the end of the.
Speaker 2: Death of the Commission on Presidential Debates, but there was
Speaker 2: a purpose here to not just have a presidential debate,
Speaker 2: for instance, on a single cable network. A lot of
Speaker 2: people won't even be able to watch that. We spend
Speaker 2: all day talking about cord cutting here, Brad, Are we
Speaker 2: gonna lose something when the commission goes away?
Speaker 11: I mean, possibly it remains if you see it. I mean,
Speaker 11: there are ways that I imagine that these candidates will
Speaker 11: ensure that folks in their orbits will be able to
Speaker 11: wash you know, I think, as we've seen time and again,
Speaker 11: the first debate usually is a very highly watched affair.
Speaker 5: But the truth you to remember, the truth thing.
Speaker 11: That swayed these debates is the spin afterwards. It's does
Speaker 11: a candidate give the other campaign a moment to really
Speaker 11: attack them with and run it in paid media.
Speaker 5: Over and over and over.
Speaker 11: So if Biden has a bad moment, if Trump has
Speaker 11: a bad moment, trust me, swing voters will see it
Speaker 11: in paid ads throughout the country. One has a good
Speaker 11: there's a good moment, You'll see that and paid ads
Speaker 11: across the country.
Speaker 5: So they will get down.
Speaker 11: But you know, the start to finish kind of full
Speaker 11: broad spectrum watching the debate.
Speaker 5: If you want to watch it, there will be ways
Speaker 5: to watch it. I'm surely be.
Speaker 11: Watch parties and things on college campuses and et cetera,
Speaker 11: So I'm less concerned about that. I mean, the average
Speaker 11: viewer today is a little more savvy than they were
Speaker 11: probably ten years ago, so there's an ability to find
Speaker 11: any program you want to watch these days.
Speaker 2: This is going to raise the stakes, though, Kayleie. In
Speaker 2: that world, everyone's just going for a moment, right.
Speaker 7: You're looking for a SoundBite or whatever. It can go
Speaker 7: virall on TikTok or assuming we still have it at
Speaker 7: that point, we should, right, both campaigns are Both campaigns
Speaker 7: are on it, but it's about what gets replayed over
Speaker 7: and over again the next day, which just underscores Rick.
Speaker 7: How much of this, especially for two candidates who are
Speaker 7: the age that they are, this is about performance and
Speaker 7: being able to show stamina and dexterity and speak in
Speaker 7: your speech when you're ad libbing, not necessarily reading off
Speaker 7: a teleprompter. Is this ultimately really going to be about policy,
Speaker 7: especially because these two candidates are so well known, as
Speaker 7: are a lot of their stances.
Speaker 12: That's a fair statement. What do people really take away
Speaker 12: from these I was there at the debate when George
Speaker 12: Bush looked at his watch.
Speaker 5: George H. W.
Speaker 12: Bush looked at his watch, and that's the only thing
Speaker 12: people could remember. You know, that was a Bill Clinton
Speaker 12: win because of a self enforced error on the part
Speaker 12: of the president. And remember we have some history with
Speaker 12: these two guys. They have debated a couple of times,
Speaker 12: and arguably Donald Trump lost the first debate because he
Speaker 12: kept talking over Joe Biden.
Speaker 5: I mean like he went in loaded for bear.
Speaker 12: He was not going to give Biden a chance to speak,
Speaker 12: and Biden so famously said, you know, shut up and
Speaker 12: let me miss my answer, and that became I mean
Speaker 12: like there's nothing subjective about that, but it was like, Wow,
Speaker 12: Joe Biden didn't fall asleep at the debate.
Speaker 5: This is good.
Speaker 12: And he actually pushed back on Donald Trump, who was
Speaker 12: kind of being a bully. So yeah, I think you're right, Kaylee.
Speaker 12: I think these these have the opportunity to showcase the
Speaker 12: vitality of the candidates but also their ability to sort
Speaker 12: of operate under the heat of those cleague lights that
Speaker 12: are going to be on that studio and Atlanta, And
Speaker 12: I do think it's going to be that dynamic between
Speaker 12: the two of them, because I don't care what moderator,
Speaker 12: you get. I'm sure CNN will post up some really
Speaker 12: good ones. They're going to lose control of this debate
Speaker 12: in the first five minutes, and then it's going to
Speaker 12: be mono amano and we'll see what happens.
Speaker 2: Picturing the way in at some point here, Kaylee, I
Speaker 2: feel like this is you know, this is like pay
Speaker 2: per view stuff. Was this on purpose? Bred to make
Speaker 2: sure RFK Junior was not allowed on the stage. I
Speaker 2: know that he's not on the ballot in most states,
Speaker 2: but there's some polls showing him fifteen to twenty percent.
Speaker 2: He could potentially qualify for an old fashioned commission debate.
Speaker 5: You know, I don't know.
Speaker 11: I mean, I think it's all the roll of the
Speaker 11: dice with who RFK hurts and helps. You know, a
Speaker 11: lot of his conspiracy based theories from vaccines and et cetera.
Speaker 11: You know, traditionally we have a home in the Trump
Speaker 11: orbit is you know, last name is a home in
Speaker 11: the Democratic orbit, And there's enough data to suggest and
Speaker 11: pulling goes both ways on this, So you know, I
Speaker 11: don't know, you know, I think, you know, I agree
Speaker 11: with Rick.
Speaker 5: I thought he had a really good analysis of that.
Speaker 11: If you can't get to two hundred and seventy because
Speaker 11: you're not on enough states, then you should not be
Speaker 11: in these debates.
Speaker 5: I agree with that, you know.
Speaker 11: I think what's interesting here though, is you know, if
Speaker 11: I were Trump, I'd be a little more careful of
Speaker 11: how he's approaching these debates because right now he's setting
Speaker 11: the standard where Trump has very high expectations and Joe
Speaker 11: Biden has very low expectations. And so Joe Biden doesn't
Speaker 11: literally fall asleep at the podium, he may have a win,
Speaker 11: and it may have won the expectations game, which is
Speaker 11: a big part of these debates as well.
Speaker 2: That's right, Rick.
Speaker 7: Finally, I know we just had a whole conversation about
Speaker 7: how much of this is about performance over policy, But
Speaker 7: is a debate the best chance for Joe Biden to
Speaker 7: actually clarify what his policy in regard to Israel is
Speaker 7: considering all the back and forth we've seen in the
Speaker 7: last few weeks.
Speaker 12: Yeah, I think it certainly gives him a chance to
Speaker 12: talk directly to the voters. And he has been sort
Speaker 12: of flip flopping on this, which is all unforced errors
Speaker 12: on his part, right, I mean, like he was fine
Speaker 12: with the approach he took.
Speaker 5: He decided to veer the other way.
Speaker 12: Republicans now are taking advantage of that, especially in the
Speaker 12: House of Representatives, forcing Democrats to take sticky votes on Israel.
Speaker 12: The bottom line is he needs to convince people that
Speaker 12: he's got a firm grass for the economy, because nobody
Speaker 12: is going to decide this election on Israel, but it
Speaker 12: is going to be decided on the economy. And regardless
Speaker 12: of what the economic measures are today, especially with the CPI,
Speaker 12: he isn't getting that through to the American people. And
Speaker 12: if that's not the major topic of his conversation, he's
Speaker 12: cheating himself and his administration on the progress they've made,
Speaker 12: and he will not be able to get voters to
Speaker 12: start thinking differently about the economy.
Speaker 9: All right.
Speaker 7: Rick Davis, Bloomberg Politics contributor and Republican strategist, and Brad
Speaker 7: Howard of Corcoran Street Group, thank you both so much.
Speaker 1: Listening to the Bloomberg Balance of Power podcast Ken just
Speaker 1: Live weekdays at noon Eastern on Applecarplay and then rod
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Speaker 1: Just Say Alexa play Bloomberg eleven thirty.
Speaker 2: As we try to figure out next steps here for
Speaker 2: the FED and exactly what is the state of our economy,
Speaker 2: knowing that the headline numbers don't always tell the whole story.
Speaker 2: I'm Joe Matthew alongside Kaylee Lines in Washington. It's good
Speaker 2: to have you with us on Bloomberg TV and radio.
Speaker 2: The euphoria on the street is one thing, Kaylee, but
Speaker 2: it's a different consideration when you start talking to economists
Speaker 2: about where we are.
Speaker 7: Yeah, especially if you're talking about economists who live over
Speaker 7: at the Federal Reserve, who, yes, may be encouraged by
Speaker 7: this one month of data, but at the end of
Speaker 7: the day, this is just one month of data after
Speaker 7: three consecutive CPI prints that came in hot. It's great
Speaker 7: news to get one that was cooler than expected. But
Speaker 7: they're looking for a pattern here sure, not just a
Speaker 7: one office because they are haunted by the ghosts of
Speaker 7: decades pass and do not want to risk cutting brakes
Speaker 7: too early. So that is where we begin with Lindsay
Speaker 7: Oh And she is Groundwork Collaborative executive director, former Senior
Speaker 7: economic policy advisor to Senator Elizabeth Warren lindsay, welcome back
Speaker 7: to balance of power. Obviously you can see good things
Speaker 7: in the data today, but how many more data sets
Speaker 7: like this are we going to need to get before
Speaker 7: the Fed can feel comfortable cutting interest rates?
Speaker 10: Yeah, thanks for having me. I mean, look, the print
Speaker 10: this morning was undeniably good news, good news I think
Speaker 10: for American families, good news for the White House, and
Speaker 10: hopefully good news over at the Eccles Building.
Speaker 9: You know where the share of the Federal Reserve.
Speaker 10: Hangs out as well. You know, seeing core CPI come
Speaker 10: in at its lowest level since April of twenty twenty one,
Speaker 10: you know, really three years now, when you sort of
Speaker 10: cleave off that those food costs and those energy costs,
Speaker 10: you know, that's just really really great to see. And
Speaker 10: so you know, we'll see sort of how many more
Speaker 10: good prints the Federal Reserve chair needs to see before
Speaker 10: he moves to rate cuts. But you know, hard to
Speaker 10: ask for much better than what we saw this morning.
Speaker 2: So instead of trying to predict the Fed, lindsay, what's
Speaker 2: your thought, should we start cutting now?
Speaker 5: Oh?
Speaker 10: Absolutely? I mean you do not want to be behind
Speaker 10: the eight ball on rate cuts. We've got a strong
Speaker 10: job market, right, now we've got wages beating prices. And look,
Speaker 10: while the trend line hasn't been as sort of steadily
Speaker 10: downward as we'd like, overall inflation has really been coming
Speaker 10: down off its peak for you know, for over a
Speaker 10: year and a half now, and so I think the
Speaker 10: line is moving in the right direction. Borrowing costs are
Speaker 10: really pinching families. We're really starting to see some negative
Speaker 10: impacts in the housing market where mortgage rates are sky high.
Speaker 10: So I'd really like to see a rate cut sooner
Speaker 10: rather than later, you know, September at the latest.
Speaker 7: Well, as you talk about what's happening in the housing
Speaker 7: it's worth pointing out that where we're still seeing the
Speaker 7: stickiness inflation, in inflation does include shelter prices. That has
Speaker 7: been pretty persistent over a number of data sets. So lindsay,
Speaker 7: what's the solution. There are higher interest rates going to
Speaker 7: help solve that problem?
Speaker 10: No, I'm quite the opposite, right, high interest rates. We
Speaker 10: have the high mortgage rates which keep folks in the
Speaker 10: rental market unable to come in to the single family
Speaker 10: housing market, and that keeps some rent prices high, and
Speaker 10: that shows up in that shelter index, which you know
Speaker 10: also has there's some data issues there too, Right, the
Speaker 10: shelter index really lags, and so it takes a little
Speaker 10: while for us to get relief on on housing costs
Speaker 10: that show up in the in the CPI print. But
Speaker 10: if you're worried about housing costs in the United States,
Speaker 10: a high interest rate environment is certainly not going to
Speaker 10: get you in the going to get you in the
Speaker 10: right direction. It's not going to get Americans any relief
Speaker 10: in the housing market.
Speaker 2: Spending time with Lindsay Owens from the Groundwork Collaborative, Lindsay.
Speaker 2: President Biden made a big splash yesterday announcing new terror
Speaker 2: riffs on some Chinese imports with some big increases on
Speaker 2: EV's solar panels, some other things semiconductors, while keeping all
Speaker 2: of the Trump tariffs in place. Is this the new
Speaker 2: normal now, this protectionist approach for Democrats and Republicans.
Speaker 10: Yeah, I think that's exactly right. You know, tariffs used
Speaker 10: to be a four letter word in both parties in Washington,
Speaker 10: you know, you know, really just a decade ago, and
Speaker 10: I think there's been a sea change in how folks
Speaker 10: on both sides of the aisle think about trade and
Speaker 10: think about what makes a strong and resilient American economy.
Speaker 10: I mean, I like to go back to the eve
Speaker 10: of the pandemic, when I think Americans really got a
Speaker 10: glimpse of what it looks like to have an economy
Speaker 10: that is reliant on imports from China. And you know
Speaker 10: what we saw when the pandemic hit is we couldn't
Speaker 10: make anything here. We couldn't make the COVID test here,
Speaker 10: we couldn't keep ppe here. You know, we had all
Speaker 10: sorts of shortages because of the supply chains being gummed up,
Speaker 10: you know, coming in from Asia and China in particular.
Speaker 10: And I think Americans took a look around and said, look,
Speaker 10: a resilient economy, a strong economy is one in which
Speaker 10: we have a vibrant manufacturing class in America and is
Speaker 10: one in which we can sort of keep our own
Speaker 10: shelves stocked during a crisis. And so I think the
Speaker 10: Biden administration is making the exact right move when it
Speaker 10: comes to trade with China. If you want a green transition,
Speaker 10: a strong green transition, you know, completely relying on cheap
Speaker 10: solar panels for China is going to get you in
Speaker 10: a heap of trouble.
Speaker 7: Okay, So, Linda, you think the Biden administration is making
Speaker 7: the right move here, But essentially they move that they
Speaker 7: have made is to stand by the decisions of the
Speaker 7: Trump administration when it comes to tariffs and in fact
Speaker 7: just go further in certain key sectors. When Trump first
Speaker 7: implemented these tariffs, when that trade war kicked off back
Speaker 7: in twenty eighteen, there was a lot of talk among
Speaker 7: economists about the detrimental effects that was going to have
Speaker 7: on the US economy. It doesn't feel like we're hearing
Speaker 7: that as much this time around, and I just wonder why.
Speaker 10: Look, I think I think the economics profession is evolving,
Speaker 10: albeit slowly, on this point. But I think part of
Speaker 10: this is the story isn't just about trade deficits here, right,
Speaker 10: The story is about trade offs, if you will. What
Speaker 10: are the things that we're trying to build to build
Speaker 10: a strong economy. One of the things we want is
Speaker 10: good jobs in America. If we make all of our
Speaker 10: evs in China, we don't have a vibrant auto manufacturing
Speaker 10: industry in America. So that's an important piece of what
Speaker 10: we're trying to do with trade policy here. As I mentioned,
Speaker 10: we're looking for a green transition, but we're looking for
Speaker 10: resilient green transition, one that isn't going to be at
Speaker 10: the whims of shifts in the Chinese economy, but that
Speaker 10: is durable in the United States economy too. And so
Speaker 10: I think when you look at the big picture, when
Speaker 10: you look at the suite of interest here the American worker,
Speaker 10: what we want for American industrial policy, and what our
Speaker 10: foreign policy concerns are as well, it really points to
Speaker 10: the types of decisions that the Biden administration is rolling
Speaker 10: out based on really thorough reviews by the USTR's office.
Speaker 2: Lindsay, it's great to have you back. Lindsay Owens, Groundwork
Speaker 2: Collaborative Executive Director, per view on today's CPI data.
Speaker 1: Great to have you back.
Speaker 2: Thanks for listening to the Balance of Power podcast. Make
Speaker 2: sure to subscribe if you haven't already, at Apple, Spotify,
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