1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:24,480 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,520 --> 00:00:28,240 Speaker 2: Today, we're tracking our top story Federal Reserve Chair Droome 7 00:00:28,320 --> 00:00:31,880 Speaker 2: Powell carefully opening the door to an interest rate cut. 8 00:00:32,040 --> 00:00:35,839 Speaker 2: Con September. He gave what will be his last speech 9 00:00:36,120 --> 00:00:39,600 Speaker 2: as chair to the Kansas City Fed's annual Economic Symposium 10 00:00:39,640 --> 00:00:43,000 Speaker 2: earlier this morning out in Jackson Hole, Wyoming, and Powell 11 00:00:43,080 --> 00:00:46,879 Speaker 2: pointed to rising risks for the labor market even as 12 00:00:46,920 --> 00:00:48,880 Speaker 2: concerns over inflation remain. 13 00:00:50,120 --> 00:00:53,120 Speaker 3: The stability of the unemployment rate and other labor market 14 00:00:53,159 --> 00:00:57,160 Speaker 3: measures allows us to proceed carefully as we consider changes 15 00:00:57,160 --> 00:01:02,440 Speaker 3: to our policy stance. Nonetheless, with policy and restrictive territory, 16 00:01:02,760 --> 00:01:06,320 Speaker 3: the baseline outlook and the shifting balance of risks may 17 00:01:06,360 --> 00:01:08,440 Speaker 3: warrant adjusting our policy stance. 18 00:01:10,880 --> 00:01:13,760 Speaker 2: There was a lot hanging over these remarks from the 19 00:01:13,800 --> 00:01:16,720 Speaker 2: path of ray cuts to heighten pressure on the Central 20 00:01:16,720 --> 00:01:18,679 Speaker 2: Bank from the White House, and we want to get 21 00:01:18,680 --> 00:01:22,080 Speaker 2: into all of it with our very own Bloomberg's Michael McKee. 22 00:01:22,080 --> 00:01:25,200 Speaker 2: He's out there and Jacksonville has been covering this all 23 00:01:25,200 --> 00:01:29,600 Speaker 2: week for us. He's our international economics and policy correspondent. Mike, 24 00:01:29,720 --> 00:01:31,680 Speaker 2: let's just start with a recap from what we heard 25 00:01:31,800 --> 00:01:34,040 Speaker 2: from the FED chair. What sort of signals do we 26 00:01:34,080 --> 00:01:34,720 Speaker 2: get out of him. 27 00:01:34,640 --> 00:01:40,960 Speaker 4: Today, Well, basically by saying that the Fed is it's 28 00:01:41,000 --> 00:01:44,160 Speaker 4: okay to adjust policy, he told the markets that they 29 00:01:44,160 --> 00:01:47,080 Speaker 4: are betting correctly. The Fed is on track to cut 30 00:01:47,160 --> 00:01:50,200 Speaker 4: rates in September. That's a bit of a surprise. The 31 00:01:50,240 --> 00:01:52,920 Speaker 4: feeling was he would keep his options more open, but 32 00:01:53,600 --> 00:01:56,520 Speaker 4: for some reason, the Fed has decided that the threat 33 00:01:56,600 --> 00:02:01,200 Speaker 4: of unemployment rising and people losing their jobs is greater 34 00:02:01,280 --> 00:02:04,120 Speaker 4: than the threat of inflation for the time being, and 35 00:02:04,200 --> 00:02:06,920 Speaker 4: so they are on a path to cut in September. 36 00:02:06,920 --> 00:02:08,960 Speaker 4: It could change their mind, but right now that's a 37 00:02:08,960 --> 00:02:12,959 Speaker 4: pretty open suggestion. That's what they're going to do. Pretty 38 00:02:12,960 --> 00:02:16,799 Speaker 4: hard to walk that back. Their view is apparently that 39 00:02:17,280 --> 00:02:20,640 Speaker 4: it is going to be a rough time for the 40 00:02:20,720 --> 00:02:25,440 Speaker 4: labor market, with hiring really slowing down but tariff inflation 41 00:02:25,639 --> 00:02:29,320 Speaker 4: only slowly going into the economy. 42 00:02:29,600 --> 00:02:32,560 Speaker 5: Mike, We've had a lot overshadowing the FED as we 43 00:02:32,639 --> 00:02:35,480 Speaker 5: headed into the Jackson Hole Symposium. And that, of course, 44 00:02:35,520 --> 00:02:39,040 Speaker 5: has been the saga of Lisa Cook and the pressure 45 00:02:39,120 --> 00:02:43,120 Speaker 5: from the President himself on her to resign, and today 46 00:02:43,160 --> 00:02:46,680 Speaker 5: he escalated that by threatening to fire her if she 47 00:02:46,800 --> 00:02:51,280 Speaker 5: didn't leave voluntarily. Have we heard from her today or 48 00:02:51,360 --> 00:02:54,400 Speaker 5: from the FED on this? And let me also ask 49 00:02:54,480 --> 00:02:57,919 Speaker 5: Mike what sort of signal did Jerome Powell send about 50 00:02:57,960 --> 00:02:59,840 Speaker 5: FED independence during his remarks? 51 00:03:02,919 --> 00:03:05,000 Speaker 4: Well, I can tell you Lisa Cook is here. She 52 00:03:05,200 --> 00:03:08,720 Speaker 4: arrived this morning and she attended the first opening session. 53 00:03:08,800 --> 00:03:11,079 Speaker 4: She got a round of applause when she walked in. 54 00:03:11,960 --> 00:03:16,600 Speaker 4: And then the question becomes what happens next in her case. 55 00:03:17,840 --> 00:03:20,000 Speaker 4: That has been a distraction for the FED, but it 56 00:03:20,040 --> 00:03:22,640 Speaker 4: now could rise above that and become more of a 57 00:03:22,720 --> 00:03:27,120 Speaker 4: problem if indeed the President does follow through with his 58 00:03:27,240 --> 00:03:30,000 Speaker 4: threat to try to fire her, because that would trigger 59 00:03:30,320 --> 00:03:34,000 Speaker 4: a legal battle between the FED and the administration, and 60 00:03:34,040 --> 00:03:36,480 Speaker 4: we're not sure how all that would play out, and 61 00:03:36,600 --> 00:03:39,280 Speaker 4: we're not sure how the FED would react. I know 62 00:03:39,320 --> 00:03:42,080 Speaker 4: that Donald Trump is about ready to have reporters into 63 00:03:42,080 --> 00:03:45,040 Speaker 4: the Oval Office, and he always makes remarks, so I'm 64 00:03:45,080 --> 00:03:46,760 Speaker 4: sure he'll be asked about that and we may get 65 00:03:46,800 --> 00:03:49,480 Speaker 4: some more guidance on what he's thinking. The FED is 66 00:03:49,520 --> 00:03:52,600 Speaker 4: not talking about it. They, as I said, consider this 67 00:03:52,680 --> 00:03:54,600 Speaker 4: a distraction, and they say they don't want to get 68 00:03:54,640 --> 00:03:57,240 Speaker 4: into a tit for tat back and forth. But at 69 00:03:57,240 --> 00:04:00,520 Speaker 4: this point we're just waiting to see what happens with that. 70 00:04:00,560 --> 00:04:04,240 Speaker 4: Powell didn't send a major signal today because he didn't 71 00:04:04,280 --> 00:04:06,920 Speaker 4: talk about FED independence, also a bit of a surprise. 72 00:04:07,400 --> 00:04:11,840 Speaker 4: But the other issue is what is the FED future? 73 00:04:12,040 --> 00:04:14,840 Speaker 4: What is Jay Powell's future? So far, no word from 74 00:04:14,840 --> 00:04:15,360 Speaker 4: the president? 75 00:04:15,840 --> 00:04:19,760 Speaker 2: All right, Bloomberg's Michael McKee for us out in Jacksonwaioming. 76 00:04:19,839 --> 00:04:22,160 Speaker 2: We thank you as always. We are lucky to be 77 00:04:22,240 --> 00:04:25,080 Speaker 2: joined now by Leo Brainer, the former director of the 78 00:04:25,160 --> 00:04:28,719 Speaker 2: National Economic Council under the Biden administration, also former vice 79 00:04:28,800 --> 00:04:32,719 Speaker 2: chair of the Federal Reserve. She's a distinguished fellow at 80 00:04:32,800 --> 00:04:37,360 Speaker 2: the Georgetown Center for Financial Markets and Policies. Laoe, thank 81 00:04:37,360 --> 00:04:39,479 Speaker 2: you so much for being there. Can we just pick 82 00:04:39,560 --> 00:04:42,080 Speaker 2: up this conversation at this point when it does come 83 00:04:42,360 --> 00:04:46,360 Speaker 2: to FED independence and what risks you see as we 84 00:04:46,440 --> 00:04:48,960 Speaker 2: watch this pressure campaign from the White House ramp up. 85 00:04:49,240 --> 00:04:54,200 Speaker 6: Absolutely well, I think that first what Jay Powell said 86 00:04:54,200 --> 00:04:56,719 Speaker 6: today should have been music to the President's ears. He 87 00:04:56,880 --> 00:04:59,800 Speaker 6: essentially that was very dubbish set of remarks where he 88 00:04:59,880 --> 00:05:03,359 Speaker 6: is essentially said that he also viewed the risks to 89 00:05:03,560 --> 00:05:06,760 Speaker 6: the labor market as the greater set of risks, saw 90 00:05:06,880 --> 00:05:12,160 Speaker 6: inflation rising perhaps more slowly over time, and opened the door, 91 00:05:12,160 --> 00:05:16,159 Speaker 6: I think, very very clearly for a cut in December, 92 00:05:16,200 --> 00:05:19,919 Speaker 6: which is exactly what the President has been pushing so 93 00:05:20,120 --> 00:05:22,640 Speaker 6: hard for. So it was a dubbsh set of remarks, 94 00:05:22,640 --> 00:05:26,159 Speaker 6: and it really went quite far in the direction of 95 00:05:26,200 --> 00:05:29,320 Speaker 6: confirming there would be a cut in September. Of course, 96 00:05:29,320 --> 00:05:32,000 Speaker 6: we have two more important pieces of data that couldn't 97 00:05:32,000 --> 00:05:34,400 Speaker 6: go in the other direction, but he did not qualify 98 00:05:34,520 --> 00:05:39,039 Speaker 6: his remarks very much. So I think the question that 99 00:05:39,120 --> 00:05:43,800 Speaker 6: you're raising about the feds independence is very important. The 100 00:05:43,839 --> 00:05:47,080 Speaker 6: President looks to be getting what he wants in terms 101 00:05:47,240 --> 00:05:50,960 Speaker 6: of the path of rate cuts coming down over time, 102 00:05:51,120 --> 00:05:55,560 Speaker 6: reflecting what's going on in the economy, and it's counterproductive, 103 00:05:56,520 --> 00:06:00,800 Speaker 6: I think, to suggest that this be done due to 104 00:06:00,839 --> 00:06:06,640 Speaker 6: political pressure as opposed to simply following the statutory mandate 105 00:06:06,760 --> 00:06:09,400 Speaker 6: of the Federal Reserve Director. 106 00:06:09,440 --> 00:06:11,680 Speaker 5: Brainard, you have also sat in that room as a 107 00:06:11,720 --> 00:06:16,440 Speaker 5: member of the Federal Market Committee, as FED Vice chair previously, 108 00:06:17,279 --> 00:06:21,960 Speaker 5: describe the challenge in balancing that dual mandate, especially at 109 00:06:21,960 --> 00:06:25,360 Speaker 5: a moment like this when the economy is facing some 110 00:06:25,600 --> 00:06:29,480 Speaker 5: strains that it really hasn't faced in more than a century, really, 111 00:06:30,040 --> 00:06:33,320 Speaker 5: and we're talking about tariffs and how those are affecting 112 00:06:33,400 --> 00:06:37,400 Speaker 5: the whole outlook on inflation. We heard the FED chair 113 00:06:37,520 --> 00:06:40,880 Speaker 5: talk about how the impact of those tariffs on prices 114 00:06:40,960 --> 00:06:43,839 Speaker 5: might be momentary, but he did hold out the possibility 115 00:06:44,160 --> 00:06:46,880 Speaker 5: that they might be more lasting. What is your view 116 00:06:47,160 --> 00:06:50,440 Speaker 5: on the impact of prices and how is the central 117 00:06:50,480 --> 00:06:53,920 Speaker 5: bank balancing all that It also looks at the labor market. 118 00:06:54,160 --> 00:06:58,359 Speaker 6: Well, I think this is a very tricky juncture for 119 00:06:58,440 --> 00:07:02,839 Speaker 6: the Federal Reserve because it is responsible for keeping inflation 120 00:07:02,960 --> 00:07:06,640 Speaker 6: low and keeping the economy at maximum employment. And when 121 00:07:06,680 --> 00:07:10,560 Speaker 6: you see the large increases in tariffs, going from two 122 00:07:10,560 --> 00:07:14,239 Speaker 6: percent to seventeen percent on average in a short period 123 00:07:14,320 --> 00:07:18,880 Speaker 6: of time, that puts upward pressure on prices and downward 124 00:07:18,920 --> 00:07:24,160 Speaker 6: pressure on hiring and the labor market. That's a stagflationary shock, 125 00:07:24,360 --> 00:07:27,760 Speaker 6: which is the most difficult kind of shock for the 126 00:07:27,760 --> 00:07:32,280 Speaker 6: Federal Reserve to handle. And they're trying to tell the public, 127 00:07:32,360 --> 00:07:36,600 Speaker 6: the markets exactly how they're weighing those risks. Up until now, 128 00:07:36,880 --> 00:07:41,600 Speaker 6: we've heard a lot more about risks to inflation. Today, 129 00:07:41,680 --> 00:07:45,239 Speaker 6: what we heard at Jackson Hole was the chair articulating 130 00:07:45,600 --> 00:07:48,760 Speaker 6: how important it was to get out ahead of the 131 00:07:48,760 --> 00:07:52,560 Speaker 6: potential recessionary risk from a weakening labor market. 132 00:07:52,880 --> 00:07:56,119 Speaker 2: We also heard Drome Powell really highlight to this idea 133 00:07:56,120 --> 00:07:59,680 Speaker 2: of tighter immigration policy and how that is impacting the 134 00:07:59,760 --> 00:08:02,520 Speaker 2: land market. And I'm curious to dovetail this with the 135 00:08:02,560 --> 00:08:06,040 Speaker 2: conversation we're having about tariffs. As these companies are trying 136 00:08:06,080 --> 00:08:08,760 Speaker 2: to absorb perhaps the higher costs, are they also going 137 00:08:08,760 --> 00:08:10,640 Speaker 2: to have to face higher labor costs? 138 00:08:11,160 --> 00:08:14,200 Speaker 6: Well, you're exactly right that not only have the tariffs 139 00:08:14,200 --> 00:08:18,120 Speaker 6: created that kind of stagflationary shock, but into that mix 140 00:08:18,360 --> 00:08:24,840 Speaker 6: is a much smaller inflow into the labor supply. And 141 00:08:24,920 --> 00:08:27,880 Speaker 6: so it's very hard for the Federal Reserve to read 142 00:08:27,920 --> 00:08:31,200 Speaker 6: the labor market right now. Unemployment hasn't budged, it hasn't 143 00:08:31,240 --> 00:08:34,680 Speaker 6: gone up, but the rate of job creation has come 144 00:08:34,720 --> 00:08:37,960 Speaker 6: down dramatically, and so they are trying to gauge is 145 00:08:37,960 --> 00:08:40,800 Speaker 6: that because we have so many fewer people coming into 146 00:08:40,800 --> 00:08:45,520 Speaker 6: the labor market because immigration has essentially stopped, or is 147 00:08:45,600 --> 00:08:50,640 Speaker 6: the labor market weakening, which will of course lead to 148 00:08:50,720 --> 00:08:54,600 Speaker 6: an increase in the unemployment rate. And unemployment tends to 149 00:08:54,720 --> 00:08:57,320 Speaker 6: rise very quickly when it does start rising, which is 150 00:08:57,360 --> 00:08:59,920 Speaker 6: what the Chair said in his speech today, which is 151 00:09:00,000 --> 00:09:03,000 Speaker 6: why I think they are quite cautious about what's going 152 00:09:03,000 --> 00:09:04,080 Speaker 6: on in the labor market. 153 00:09:04,760 --> 00:09:07,760 Speaker 5: Director Brianon, we also wanted to ask you about economic 154 00:09:07,840 --> 00:09:11,000 Speaker 5: policy more broadly, and do you see an endgame in 155 00:09:11,040 --> 00:09:16,560 Speaker 5: the tariffs that the President has been unrolling and what 156 00:09:16,760 --> 00:09:20,200 Speaker 5: is the last thing impact in terms of US global 157 00:09:20,280 --> 00:09:25,240 Speaker 5: economic relations with trading partners and allies and adversaries alike. 158 00:09:25,559 --> 00:09:29,320 Speaker 6: So I think this question about is this the endgame 159 00:09:29,520 --> 00:09:33,640 Speaker 6: is so important for businesses who are making these hiring decisions, 160 00:09:33,640 --> 00:09:37,559 Speaker 6: They're making sourcing decisions, they are making pricing decisions, and 161 00:09:37,600 --> 00:09:40,520 Speaker 6: what they want more than anything, which I think we 162 00:09:40,679 --> 00:09:44,280 Speaker 6: all hear, is certainty. They want to know that the 163 00:09:44,440 --> 00:09:50,200 Speaker 6: tariff structure is going to essentially be completed at some 164 00:09:50,360 --> 00:09:55,960 Speaker 6: point and that will allow them to basically change their 165 00:09:56,000 --> 00:10:00,920 Speaker 6: supply chains and their hiring and hopefully you won't see 166 00:10:00,920 --> 00:10:05,320 Speaker 6: an ongoing increase in inflation. But if tariffs keep changing 167 00:10:05,480 --> 00:10:09,880 Speaker 6: keep bratcheting up. That will both make employers more cautious 168 00:10:09,880 --> 00:10:13,560 Speaker 6: about hiring and it could feed into inflation for longer. 169 00:10:13,760 --> 00:10:16,400 Speaker 6: And of course, with respect to the international environment, I 170 00:10:16,400 --> 00:10:19,760 Speaker 6: think trade partners are asking, to what extent can I 171 00:10:19,880 --> 00:10:23,520 Speaker 6: really count on the US to be a reliable international 172 00:10:23,600 --> 00:10:29,960 Speaker 6: partner if the US keeps changing tariff rates unilaterally based 173 00:10:30,040 --> 00:10:33,920 Speaker 6: not only on trade considerations, but in some countries cases 174 00:10:34,360 --> 00:10:36,360 Speaker 6: non economic reasons. 175 00:10:36,840 --> 00:10:38,880 Speaker 5: To follow on that, what is the impact on the 176 00:10:38,960 --> 00:10:41,920 Speaker 5: role of the dollars the world's reserve currency. Do we 177 00:10:41,960 --> 00:10:44,839 Speaker 5: see that at risk at all from this approach that 178 00:10:45,080 --> 00:10:47,880 Speaker 5: the President is taking with trade in other areas well. 179 00:10:47,920 --> 00:10:51,080 Speaker 6: It's kind of a very important point. One of the 180 00:10:51,440 --> 00:10:55,840 Speaker 6: great privileges of having the dollar be dominant is that 181 00:10:55,920 --> 00:10:58,760 Speaker 6: it costs the US government a lot less to borrow 182 00:11:00,080 --> 00:11:03,600 Speaker 6: to service its debt than it would if we didn't 183 00:11:03,640 --> 00:11:06,760 Speaker 6: have that dollar privilege. And so at a time when 184 00:11:07,320 --> 00:11:09,640 Speaker 6: the national debt is projected to go up three to 185 00:11:09,679 --> 00:11:14,640 Speaker 6: four trillion dollars, the fact that we are playing fast 186 00:11:14,640 --> 00:11:18,200 Speaker 6: and loose with the dollar, I think does raise some 187 00:11:18,280 --> 00:11:21,240 Speaker 6: questions about whether we might lose that advantage in terms 188 00:11:21,240 --> 00:11:24,360 Speaker 6: of our borrowing costs, and that hasn't happened yet. The 189 00:11:24,440 --> 00:11:26,600 Speaker 6: dollar has weakened a great deal. But when you see 190 00:11:26,640 --> 00:11:29,840 Speaker 6: a tax on the independence of the Federal Reserve, it 191 00:11:29,960 --> 00:11:33,400 Speaker 6: really does raise some questions about whether investors are going 192 00:11:33,440 --> 00:11:37,559 Speaker 6: to want to continue to be as disproportionately invested in 193 00:11:37,679 --> 00:11:41,240 Speaker 6: dollar assets treasury securities as they have historically. 194 00:11:41,840 --> 00:11:43,480 Speaker 2: In the final minutes that we have with you, I 195 00:11:43,480 --> 00:11:45,560 Speaker 2: wanted to pull on some of your expertise from working 196 00:11:45,640 --> 00:11:47,520 Speaker 2: in the Biden White House, and I wanted to ask 197 00:11:47,559 --> 00:11:50,680 Speaker 2: you about the more hands on industrial policy that we've 198 00:11:51,000 --> 00:11:53,360 Speaker 2: seen from this White House when it comes to a 199 00:11:53,400 --> 00:11:58,280 Speaker 2: potential government equity stake in Intel, the so called Golden 200 00:11:58,360 --> 00:12:01,440 Speaker 2: share in the Knee on Steel deal. How are you 201 00:12:01,600 --> 00:12:04,360 Speaker 2: viewing what seems to be a shift in the public 202 00:12:04,400 --> 00:12:07,760 Speaker 2: private partnership. And a lot of this is because the 203 00:12:07,840 --> 00:12:12,480 Speaker 2: administration is trying to bolster that domestic manufacturing. That's one 204 00:12:12,520 --> 00:12:16,640 Speaker 2: of those reasons underpinning their tariff plans. How do you 205 00:12:16,840 --> 00:12:20,240 Speaker 2: view this strategy by them that they're saying needs to 206 00:12:20,280 --> 00:12:22,920 Speaker 2: happen in order to reach these goals that they've set up. 207 00:12:23,200 --> 00:12:25,480 Speaker 6: Well, let me just say I do think that in 208 00:12:25,559 --> 00:12:27,880 Speaker 6: order to compete with China, which engages in a lot 209 00:12:27,880 --> 00:12:30,880 Speaker 6: of industrial policy that it has been important for the 210 00:12:31,000 --> 00:12:36,520 Speaker 6: United States, for instance, to provide investment incentives for the 211 00:12:36,559 --> 00:12:40,360 Speaker 6: advanced manufacturing of chips here in America. It's great that 212 00:12:40,400 --> 00:12:44,480 Speaker 6: we now have TSMC manufacturing the most advanced chips because 213 00:12:44,520 --> 00:12:47,839 Speaker 6: of the Chips and Science Act, But we should compete 214 00:12:47,840 --> 00:12:51,000 Speaker 6: with China based on our dynamic private sector. We should 215 00:12:51,000 --> 00:12:54,560 Speaker 6: not be emulating China's state capitalism. And when I hear 216 00:12:54,800 --> 00:12:58,840 Speaker 6: about these moves to take ownership stakes in some of 217 00:12:58,880 --> 00:13:03,760 Speaker 6: America's most port and dynamic businesses, it really troubles me 218 00:13:04,440 --> 00:13:07,439 Speaker 6: that we would be upsetting that balance. It's one thing 219 00:13:07,480 --> 00:13:10,880 Speaker 6: to support the private sector, it's another thing to be 220 00:13:11,240 --> 00:13:15,080 Speaker 6: moving into a kind of state capitalist model, which I 221 00:13:15,160 --> 00:13:16,079 Speaker 6: do not support. 222 00:13:16,480 --> 00:13:18,960 Speaker 5: Well, in the thirty seconds we have left, let's drill 223 00:13:19,080 --> 00:13:21,880 Speaker 5: down into that, is this a proper use of Chips 224 00:13:21,960 --> 00:13:26,199 Speaker 5: Act money? Then to do what the President is deliberating 225 00:13:26,200 --> 00:13:28,040 Speaker 5: on doing, that is to take the Intel stake. 226 00:13:28,200 --> 00:13:33,200 Speaker 6: Yeah, so I think I don't know exactly the legalities 227 00:13:33,400 --> 00:13:38,000 Speaker 6: of the stakes, but I just think it's bad policy. 228 00:13:38,240 --> 00:13:42,320 Speaker 6: I don't think the US government should be a shareholder 229 00:13:42,920 --> 00:13:46,719 Speaker 6: in these companies. I think we should support private sector investment. 230 00:13:47,160 --> 00:13:52,120 Speaker 6: Support Intel and TSMCS and others' ability to compete with 231 00:13:52,320 --> 00:13:55,400 Speaker 6: China so we can have the most advanced semiconductors here 232 00:13:55,440 --> 00:13:58,480 Speaker 6: in the US. But moving to state capitalism is something 233 00:13:58,480 --> 00:14:00,239 Speaker 6: that really trouble. 234 00:14:00,880 --> 00:14:03,160 Speaker 2: All right, Leel Brainard. We were lucky to have you 235 00:14:03,200 --> 00:14:05,319 Speaker 2: here on this important FED day. Former director of the 236 00:14:05,400 --> 00:14:08,600 Speaker 2: National Economic Council under the Biden administration, former vice Chair 237 00:14:09,000 --> 00:14:11,679 Speaker 2: of the Federal Reserve, and distinguished fellow at the Georgetown 238 00:14:11,720 --> 00:14:15,040 Speaker 2: Center for Financial Markets and Policy. Thank you for being here. 239 00:14:15,080 --> 00:14:18,800 Speaker 2: We'll continue this conversation on Balance Power plus the latest 240 00:14:18,800 --> 00:14:20,160 Speaker 2: on tariffs with Canada. 241 00:14:20,320 --> 00:14:21,080 Speaker 6: Stick with us. 242 00:14:21,240 --> 00:14:22,520 Speaker 2: This is Bloomberg. 243 00:14:28,040 --> 00:14:31,520 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 244 00:14:31,600 --> 00:14:35,000 Speaker 1: US live weekdays at noon and five pm Eastern on Apple, 245 00:14:35,080 --> 00:14:38,440 Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen 246 00:14:38,520 --> 00:14:41,640 Speaker 1: on demand wherever you get your podcasts, or watch US 247 00:14:41,680 --> 00:14:43,960 Speaker 1: live on YouTube. 248 00:14:44,920 --> 00:14:49,080 Speaker 2: Canada will remove its retaliatory tariffs on a long list 249 00:14:49,240 --> 00:14:53,080 Speaker 2: of US products that comply with the existing North American 250 00:14:53,480 --> 00:14:56,800 Speaker 2: trade deal that's in place, seeking to lower tensions with 251 00:14:56,920 --> 00:14:59,880 Speaker 2: the White House. Now, this was first reported by Bloomberg News. 252 00:15:00,080 --> 00:15:02,920 Speaker 2: We're lucky to have that reporter on the byeline of 253 00:15:02,960 --> 00:15:05,120 Speaker 2: that story with us. Now that's Brian Platt. He's a 254 00:15:05,160 --> 00:15:09,920 Speaker 2: Bloomberg Canada government reporter. He joins us now from Ottawa. Brian, 255 00:15:10,160 --> 00:15:12,240 Speaker 2: it's good to see you and things for being here. 256 00:15:12,320 --> 00:15:15,560 Speaker 2: Can you just give us some context here was this 257 00:15:15,720 --> 00:15:20,080 Speaker 2: move expected? And which goods does it apply to? 258 00:15:21,240 --> 00:15:24,160 Speaker 7: So yeah, to give a very brief history of this, 259 00:15:24,160 --> 00:15:26,720 Speaker 7: this is a big climb down for Canada. When Donald 260 00:15:26,760 --> 00:15:30,280 Speaker 7: Trump's second term started, justin Trudeau was still Canadian Prime Minister, 261 00:15:30,400 --> 00:15:34,240 Speaker 7: and Trudeau believed in retaliation and so to go dollar 262 00:15:34,280 --> 00:15:37,920 Speaker 7: for dollar retaliation. And so when Trump first imposed the 263 00:15:38,160 --> 00:15:42,080 Speaker 7: fence and al related tariffs on Canada, Trudeau hit back 264 00:15:42,120 --> 00:15:44,880 Speaker 7: with a big list of tariffs on American goods. So 265 00:15:44,920 --> 00:15:47,840 Speaker 7: that was things like Florida Orange juice and Harley Davidson 266 00:15:47,880 --> 00:15:51,960 Speaker 7: motorcycles and Kentucky bourbon. Canada was really the only country 267 00:15:51,960 --> 00:15:55,680 Speaker 7: in the world that hit back as hard as Trump 268 00:15:55,760 --> 00:15:58,920 Speaker 7: hit Canada, or hit the country when it comes to tariffs. 269 00:15:59,280 --> 00:16:01,880 Speaker 7: And Carneate's go over as Prime minister in April, but 270 00:16:01,960 --> 00:16:04,960 Speaker 7: those tariffs have remained ever since. And what our sourcing 271 00:16:05,000 --> 00:16:07,240 Speaker 7: tells us is that White House officials have made it 272 00:16:07,280 --> 00:16:09,960 Speaker 7: clear to Mark Carney's government that if they wanted to 273 00:16:09,960 --> 00:16:12,960 Speaker 7: get to any kind of trade talks on steel and 274 00:16:13,000 --> 00:16:16,240 Speaker 7: autos and some of these sectoral tariffs, that initial list 275 00:16:16,280 --> 00:16:18,840 Speaker 7: of tariffs that Trudeau brought in needed to go away. 276 00:16:19,240 --> 00:16:21,680 Speaker 7: And so that's what Carney announced today. He said, they're 277 00:16:21,840 --> 00:16:24,720 Speaker 7: they're dropping all of those counter tariffs if the goods 278 00:16:24,800 --> 00:16:29,840 Speaker 7: comply with the USMCA, and so, you know, the idea 279 00:16:29,920 --> 00:16:31,480 Speaker 7: here is that that's going to pave the way for 280 00:16:31,520 --> 00:16:34,200 Speaker 7: Canada and the US to start talking about steel and autos. 281 00:16:36,200 --> 00:16:40,760 Speaker 5: Brian, before we get back into Canada and US trade relations, 282 00:16:40,840 --> 00:16:42,360 Speaker 5: we do want to break in with a little bit 283 00:16:42,360 --> 00:16:45,960 Speaker 5: of news, a scoop coming in now that the Trump 284 00:16:46,040 --> 00:16:50,920 Speaker 5: administration and Intel Corp. Are poised to announce details later 285 00:16:51,040 --> 00:16:54,160 Speaker 5: today of an agreement that will give the US government 286 00:16:54,400 --> 00:16:58,320 Speaker 5: an equity stake in the iconic American chip maker. The 287 00:16:58,360 --> 00:17:02,040 Speaker 5: exact details and timing of this announcement today, of course, 288 00:17:02,080 --> 00:17:06,080 Speaker 5: are unclear, but bloomberg Is previously reported that a stake 289 00:17:06,119 --> 00:17:09,239 Speaker 5: of up to ten percent had been considered, and that 290 00:17:09,320 --> 00:17:12,680 Speaker 5: of course would make the US government the largest shareholder 291 00:17:12,840 --> 00:17:15,879 Speaker 5: in Intel, something we'll be watching through the rest of 292 00:17:15,920 --> 00:17:18,280 Speaker 5: the program. But Brian, we want to bring it back 293 00:17:18,320 --> 00:17:22,919 Speaker 5: to the whole question of Canada and its relationship with 294 00:17:23,000 --> 00:17:26,199 Speaker 5: the US when it comes to trade. How significant a 295 00:17:26,359 --> 00:17:29,200 Speaker 5: breakthrough is this and what does it set up as 296 00:17:29,280 --> 00:17:32,919 Speaker 5: a next step in terms of discussions with the US 297 00:17:32,960 --> 00:17:35,520 Speaker 5: on trade And this includes the USMCA. 298 00:17:36,720 --> 00:17:38,800 Speaker 7: Yeah, I mean, that's like the big next step here 299 00:17:38,880 --> 00:17:43,560 Speaker 7: is the USMCA talks, which there's a joint review that's 300 00:17:43,640 --> 00:17:46,560 Speaker 7: due to be completed by next summer, and we'll get 301 00:17:46,560 --> 00:17:49,040 Speaker 7: in where that process will start pretty soon. So that's 302 00:17:49,080 --> 00:17:51,960 Speaker 7: reviewing the entire free trade deal between Canada and the 303 00:17:52,080 --> 00:17:55,239 Speaker 7: US and Mexico from you know, in terms of how 304 00:17:55,240 --> 00:17:57,400 Speaker 7: big of a breakthrough is this, that's the biggest question 305 00:17:57,560 --> 00:18:00,119 Speaker 7: right now. Because the US did not give up anything here. 306 00:18:00,200 --> 00:18:03,119 Speaker 7: Canada gave up its counter tariffs, the US did not 307 00:18:03,160 --> 00:18:05,639 Speaker 7: give anything. The idea is that this was kind of 308 00:18:05,640 --> 00:18:09,280 Speaker 7: an olive branch to restart trade talks in full. Carne 309 00:18:09,320 --> 00:18:10,800 Speaker 7: is going to be under a lot of pressure now 310 00:18:10,840 --> 00:18:14,600 Speaker 7: to get to some kind of deal with Trump. Otherwise 311 00:18:14,640 --> 00:18:17,159 Speaker 7: Canada just keeps giving things up. I mean, this is 312 00:18:17,200 --> 00:18:19,600 Speaker 7: not the first time Carney has sort of given up 313 00:18:19,600 --> 00:18:22,520 Speaker 7: some concessions to Trump. Carne's going to be under a 314 00:18:22,560 --> 00:18:24,959 Speaker 7: lot of domestic political pressure now to show some results 315 00:18:24,960 --> 00:18:27,040 Speaker 7: in exchange for this. So we'll see where those talks go. 316 00:18:29,600 --> 00:18:32,359 Speaker 2: And Brian, can you also just give us a little 317 00:18:32,359 --> 00:18:35,199 Speaker 2: bit more details here when it comes to those sector 318 00:18:35,320 --> 00:18:39,080 Speaker 2: specific tariffs and why these have perhaps when it comes 319 00:18:39,119 --> 00:18:42,600 Speaker 2: to steal aluminum autos, why there have been perhaps more 320 00:18:42,640 --> 00:18:47,520 Speaker 2: sticking points with these negotiations compared to the tariffs that 321 00:18:47,520 --> 00:18:51,840 Speaker 2: we saw implemented much earlier this year around the fentanyl 322 00:18:51,880 --> 00:18:54,040 Speaker 2: and the border concerns when it comes to Canada. 323 00:18:55,119 --> 00:18:58,600 Speaker 7: Yeah, the thing to understand about this existing situation is 324 00:18:58,600 --> 00:19:00,560 Speaker 7: that a lot of the trade between Canada and the 325 00:19:00,600 --> 00:19:03,760 Speaker 7: US right now is tariff free because Trump is given 326 00:19:03,800 --> 00:19:08,000 Speaker 7: an exemption if it's covered under the USMCA. Steel an 327 00:19:08,040 --> 00:19:12,480 Speaker 7: aluminum in particular are two really big exceptions. Canada exports 328 00:19:12,560 --> 00:19:15,080 Speaker 7: a ton of steel and aluminum to the US. There 329 00:19:15,119 --> 00:19:18,720 Speaker 7: the biggest supplier of bothuminum in particular. I mean, there's 330 00:19:18,720 --> 00:19:20,679 Speaker 7: no other country that comes close to the amount that 331 00:19:20,720 --> 00:19:24,320 Speaker 7: Canada exports to the US. Trump's fifty percent tariff is 332 00:19:24,320 --> 00:19:27,439 Speaker 7: hammering the Canadian industries. Like there's steel mills that are 333 00:19:27,480 --> 00:19:30,560 Speaker 7: built all along the southern border of Canada with the 334 00:19:30,640 --> 00:19:33,800 Speaker 7: US who export a ton of their production normally to 335 00:19:33,840 --> 00:19:36,719 Speaker 7: the US, and those exports are basically halted right now 336 00:19:36,760 --> 00:19:39,879 Speaker 7: because of the fifty percent tariff that Trump has in place. 337 00:19:40,160 --> 00:19:43,480 Speaker 7: So Canada's under a Carney mark. Carney's under a lot 338 00:19:43,560 --> 00:19:46,359 Speaker 7: of pressure to try to get some deal done on 339 00:19:46,440 --> 00:19:49,680 Speaker 7: steel and aluminum in particular, and so I think that's 340 00:19:49,720 --> 00:19:52,440 Speaker 7: the biggest thing that Carney hopes to get to out 341 00:19:52,440 --> 00:19:55,320 Speaker 7: of the announcement today, is to somehow get some kind 342 00:19:55,320 --> 00:19:58,119 Speaker 7: of deal done with Trump on steel and aluminum and 343 00:19:58,200 --> 00:20:00,800 Speaker 7: get those metals shipping over the border again. 344 00:20:03,680 --> 00:20:07,240 Speaker 2: All Right, Brian Platt, Bloomberg Canada Government Reporter, We thank 345 00:20:07,280 --> 00:20:09,360 Speaker 2: you so much for all of your reporting. 346 00:20:09,640 --> 00:20:13,120 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 347 00:20:13,160 --> 00:20:16,639 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 348 00:20:16,680 --> 00:20:19,720 Speaker 1: Cocklay and Android Atto with the Bloomberg Business App. You 349 00:20:19,760 --> 00:20:23,200 Speaker 1: can also listen live on Amazon Alexa from our flagship 350 00:20:23,280 --> 00:20:27,200 Speaker 1: New York station, Just say Alexa play Bloomberg eleven thirty. 351 00:20:29,320 --> 00:20:34,119 Speaker 2: I'm Tyler Kenel here alongside Bloomberg's Michael Sheppard in Washington, 352 00:20:34,280 --> 00:20:37,040 Speaker 2: and we may be in Washington, but financial markets are 353 00:20:37,040 --> 00:20:40,760 Speaker 2: definitely focused on what's happening out in Jackson Hole, Wyoming, 354 00:20:41,200 --> 00:20:46,240 Speaker 2: as President Trump escalates a threat against Fed Governor Lisa Cook. Today, 355 00:20:46,640 --> 00:20:50,760 Speaker 2: the White House has elevated allegations of mortgage fraud against Cook, 356 00:20:50,800 --> 00:20:53,800 Speaker 2: with the President telling reporters earlier if Cook doesn't resign, 357 00:20:54,480 --> 00:20:55,440 Speaker 2: he will fire her. 358 00:20:57,119 --> 00:21:00,520 Speaker 8: To fi Alisa Cook, the Fed governor over her if 359 00:21:00,560 --> 00:21:01,359 Speaker 8: she doesn't resign. 360 00:21:01,480 --> 00:21:05,560 Speaker 3: Ye, what she did was a bit, so I'll fire 361 00:21:05,760 --> 00:21:06,840 Speaker 3: if she doesn't resign. 362 00:21:09,480 --> 00:21:12,760 Speaker 2: Now, no charges have been filed against Cook. These are 363 00:21:12,880 --> 00:21:15,840 Speaker 2: just allegations. And we did get a statement from Cook 364 00:21:15,880 --> 00:21:17,919 Speaker 2: the other day earlier this week where she said that 365 00:21:18,000 --> 00:21:21,600 Speaker 2: she will not be bullied into stepping down, adding in 366 00:21:21,760 --> 00:21:26,119 Speaker 2: part quote, I'm gathering the accurate information to answer any 367 00:21:26,359 --> 00:21:30,399 Speaker 2: legitimate questions and provide the facts here to discuss as 368 00:21:30,480 --> 00:21:34,640 Speaker 2: Catherine Edwards, economic policy consultant and Bloomberg opinion contributor, Catherine, 369 00:21:34,640 --> 00:21:37,040 Speaker 2: thanks so much for being here. Can we just get 370 00:21:37,040 --> 00:21:41,280 Speaker 2: your reaction to this developing story, this pressure campaign, and 371 00:21:41,359 --> 00:21:44,520 Speaker 2: can you give us perhaps the economic angle here? What 372 00:21:44,640 --> 00:21:47,240 Speaker 2: sort of economic risks, if at all, do you see 373 00:21:47,440 --> 00:21:49,320 Speaker 2: as the White House sharpens its attacks. 374 00:21:51,359 --> 00:21:56,240 Speaker 9: Well, the economic risk is always and the economic risk 375 00:21:56,280 --> 00:21:59,480 Speaker 9: has not changed since he started attacking Chairman Powell. It's 376 00:21:59,480 --> 00:22:02,359 Speaker 9: at the present is interfering in monetary policy because he 377 00:22:02,400 --> 00:22:05,080 Speaker 9: doesn't agree with what they're saying, risking the independence of 378 00:22:05,080 --> 00:22:08,560 Speaker 9: our central bank, which is paramount to our economic stability 379 00:22:08,760 --> 00:22:11,639 Speaker 9: and our respect abroad. That is the risk here. This 380 00:22:11,760 --> 00:22:14,200 Speaker 9: is just a new tactic of the same problem, which 381 00:22:14,240 --> 00:22:16,320 Speaker 9: is attacking people who don't agree with him or do 382 00:22:16,400 --> 00:22:19,919 Speaker 9: what he wants at an independent agency. The attack on 383 00:22:20,040 --> 00:22:24,320 Speaker 9: Cook is pretty remarkable for a couple of reasons. One, 384 00:22:24,800 --> 00:22:28,520 Speaker 9: everything she's accused of occurred before she became a Board governor, 385 00:22:28,840 --> 00:22:31,240 Speaker 9: so he's essentially saying that she should be fired for 386 00:22:31,320 --> 00:22:34,000 Speaker 9: something she did before she started working for the Fed, 387 00:22:34,280 --> 00:22:36,840 Speaker 9: which opens up a degree of precedence that anything you've 388 00:22:36,840 --> 00:22:39,480 Speaker 9: ever done wrong before you become a Fed governor becomes 389 00:22:39,480 --> 00:22:42,080 Speaker 9: grounds for firing. I don't think anyone would agree that 390 00:22:42,080 --> 00:22:45,840 Speaker 9: that's necessarily a good policy. Second, to the extent that 391 00:22:45,880 --> 00:22:50,240 Speaker 9: anything she's accused of is true, it's really common amongst 392 00:22:50,280 --> 00:22:53,320 Speaker 9: elected officials that they mess up on their homestead deduction. 393 00:22:53,400 --> 00:22:56,280 Speaker 9: In fact, the Attorney General of Texas is also currently 394 00:22:56,320 --> 00:22:59,919 Speaker 9: accused of claiming the homestead deduction at three different properties. 395 00:23:00,600 --> 00:23:03,399 Speaker 9: And when this happens, they pay the fine or whatever 396 00:23:03,480 --> 00:23:05,920 Speaker 9: is remaining balance on their property taxes and go about 397 00:23:05,960 --> 00:23:10,040 Speaker 9: their way. Because it's rarely considered to be fraud. It's 398 00:23:10,040 --> 00:23:12,520 Speaker 9: mostly considered to be an accident, and it hits people 399 00:23:12,600 --> 00:23:15,480 Speaker 9: in political positions who have to be in DC and 400 00:23:15,560 --> 00:23:17,280 Speaker 9: some other location all the. 401 00:23:17,240 --> 00:23:22,880 Speaker 5: Time, Catherine, The pressure by the President and other administrations. 402 00:23:22,960 --> 00:23:27,760 Speaker 5: Ona Governor Lisa Cook has certainly overshadowed the proceedings in 403 00:23:27,880 --> 00:23:31,520 Speaker 5: Jackson Hole where today we just heard from FED Chair 404 00:23:31,640 --> 00:23:35,800 Speaker 5: Jerome Powell giving his take on the economy and what 405 00:23:35,920 --> 00:23:40,400 Speaker 5: many see is his valedictory address at the annual gathering. 406 00:23:40,720 --> 00:23:43,560 Speaker 5: Give us your theater review of his remarks, but more 407 00:23:43,600 --> 00:23:47,320 Speaker 5: specifically on whatever he might have said or with signal 408 00:23:47,400 --> 00:23:50,520 Speaker 5: he might have tried to send about FED independence. 409 00:23:52,240 --> 00:23:55,120 Speaker 9: Well, I think it's helpful to remember that our president 410 00:23:55,280 --> 00:23:57,880 Speaker 9: is many things, but he's also a reality TV star 411 00:23:57,920 --> 00:24:01,359 Speaker 9: and he understands how to manute late the news very well. 412 00:24:01,720 --> 00:24:03,840 Speaker 9: On the day that the Chairman of the Federal Reserve, 413 00:24:03,880 --> 00:24:06,959 Speaker 9: someone he can't fire but wants to, makes a speech 414 00:24:07,000 --> 00:24:09,639 Speaker 9: about where our economy is, he draws attention to how 415 00:24:09,680 --> 00:24:12,119 Speaker 9: he wants to fire the only black woman who has 416 00:24:12,160 --> 00:24:15,000 Speaker 9: ever served on the board. I think this is really 417 00:24:15,080 --> 00:24:17,399 Speaker 9: important because it helps to keep your eye on the ball. 418 00:24:17,680 --> 00:24:21,000 Speaker 9: Powell's speech was very even, but very clear. We can't 419 00:24:21,080 --> 00:24:24,040 Speaker 9: change the long term inflation target, we can't ignore the 420 00:24:24,560 --> 00:24:27,959 Speaker 9: short term inflation pressures, and we can't assume that whatever 421 00:24:28,040 --> 00:24:31,359 Speaker 9: tariffs are going to do with inflation is over. The 422 00:24:31,400 --> 00:24:33,520 Speaker 9: Fed has a dual mandate and it has to put 423 00:24:33,560 --> 00:24:36,320 Speaker 9: the needs of inflation equal with those of unemployment and 424 00:24:36,359 --> 00:24:38,560 Speaker 9: the risk from inflation. At least my read of his 425 00:24:38,600 --> 00:24:40,959 Speaker 9: speech was the risk for inflation is more pressing at 426 00:24:40,960 --> 00:24:43,240 Speaker 9: the moment because prices are actively rising. 427 00:24:45,440 --> 00:24:47,480 Speaker 2: But I'm wondering what you think the White House's reaction 428 00:24:47,560 --> 00:24:51,560 Speaker 2: would be to the fed chairs comments today, and now 429 00:24:51,600 --> 00:24:54,800 Speaker 2: we have a trader's betting on this September rate cut. 430 00:24:54,800 --> 00:24:57,520 Speaker 2: Do you expect that the pressure on Cook could potentially 431 00:24:57,560 --> 00:24:59,639 Speaker 2: alleviate if the White House felt it got a stronger 432 00:24:59,680 --> 00:25:01,040 Speaker 2: signal from the Central Bank. 433 00:25:02,240 --> 00:25:05,479 Speaker 9: I can't pretend to understand how their communications department reacts 434 00:25:05,520 --> 00:25:08,200 Speaker 9: to things like this, or how the President does, simply 435 00:25:08,240 --> 00:25:12,720 Speaker 9: because just the level and the degree to which she 436 00:25:12,840 --> 00:25:16,320 Speaker 9: has attacked independent institutions, it makes it hard to understand 437 00:25:16,400 --> 00:25:19,560 Speaker 9: how the economic data would be interpreted, you know, fairly. 438 00:25:20,280 --> 00:25:22,080 Speaker 9: I mean, consider for a moment that Trump is his 439 00:25:22,520 --> 00:25:27,040 Speaker 9: own worst enemy in this fight. The biggest motivation to 440 00:25:27,119 --> 00:25:30,560 Speaker 9: lower interest rates right now would be that the economy 441 00:25:30,640 --> 00:25:33,560 Speaker 9: is much more fragile than it appears, and in particular 442 00:25:33,840 --> 00:25:37,479 Speaker 9: the labor market. That the dual mandates to have stable 443 00:25:37,520 --> 00:25:41,359 Speaker 9: employment and have our unemployment rate low is precarious. And 444 00:25:41,440 --> 00:25:43,520 Speaker 9: if he wanted to have interest rates lowered, he should 445 00:25:43,520 --> 00:25:47,440 Speaker 9: be making the case actively and loudly that the economy 446 00:25:47,480 --> 00:25:49,400 Speaker 9: is not in good shape and we need interest rates 447 00:25:49,440 --> 00:25:52,200 Speaker 9: to fall. But he doesn't do that. He fires people 448 00:25:52,240 --> 00:25:54,720 Speaker 9: who tells them that the economy is actually doing poorly 449 00:25:54,840 --> 00:25:57,040 Speaker 9: because he wants to maintain the case that the economy 450 00:25:57,080 --> 00:25:59,960 Speaker 9: has never been stronger and interest rates should be lowered. 451 00:26:00,240 --> 00:26:02,440 Speaker 9: So to put into a hypothetical, how do you think 452 00:26:02,440 --> 00:26:04,800 Speaker 9: he would react to the news without Lisa Cook. I mean, 453 00:26:04,800 --> 00:26:07,800 Speaker 9: it's not really making a case for himself that well regardless, 454 00:26:08,240 --> 00:26:11,080 Speaker 9: So it's I don't know, I'm not saying that it 455 00:26:11,080 --> 00:26:13,880 Speaker 9: was an unfair question. I'm just saying that he doesn't 456 00:26:13,920 --> 00:26:16,800 Speaker 9: seem to be following what would be in his own 457 00:26:16,840 --> 00:26:19,080 Speaker 9: best interest should he actually want interest rates to. 458 00:26:19,040 --> 00:26:20,080 Speaker 3: Be lowered. 459 00:26:21,480 --> 00:26:25,280 Speaker 5: Catherine. Let's turn to the question of inflation, and during 460 00:26:25,280 --> 00:26:28,520 Speaker 5: his remarks to own, Powell talked about tariffs and how 461 00:26:28,560 --> 00:26:32,119 Speaker 5: they would have a momentary or fleeting impact on prices 462 00:26:32,600 --> 00:26:35,600 Speaker 5: rather than a persistent or lasting one, but he did 463 00:26:35,640 --> 00:26:39,879 Speaker 5: not rule out the latter scenario entirely as a possibility. 464 00:26:40,080 --> 00:26:43,520 Speaker 5: What is your take on the impact of tariffs over 465 00:26:43,560 --> 00:26:47,680 Speaker 5: the long haul when it comes to prices and consumers pocketbooks. 466 00:26:49,560 --> 00:26:51,480 Speaker 9: I'm with Powell on this one. We don't know what 467 00:26:51,560 --> 00:26:53,719 Speaker 9: the effect will be. He laid out a pretty clear 468 00:26:54,800 --> 00:26:58,120 Speaker 9: set of scenarios of either it's a one time increase, 469 00:26:58,320 --> 00:27:01,240 Speaker 9: or it's a that's face then quickly, a one time 470 00:27:01,280 --> 00:27:04,359 Speaker 9: increase that happens over a longer period of time, or 471 00:27:04,520 --> 00:27:08,760 Speaker 9: permanently upward inflationary pressure that comes from these tariffs. We've 472 00:27:08,760 --> 00:27:11,840 Speaker 9: never had tariffs to this degree in our modern economy, 473 00:27:12,200 --> 00:27:14,160 Speaker 9: so it's I don't I think he's right in saying 474 00:27:14,200 --> 00:27:16,920 Speaker 9: we don't know which way this inflationary impact will go. 475 00:27:17,560 --> 00:27:21,840 Speaker 9: But he said, without maybe declaring as much, tariffs will 476 00:27:21,840 --> 00:27:26,040 Speaker 9: absolutely increase prices in our economy, and that is the 477 00:27:26,080 --> 00:27:28,440 Speaker 9: reality that we are living in. It is higher prices 478 00:27:28,520 --> 00:27:32,200 Speaker 9: in the future because of presidential policy. 479 00:27:33,000 --> 00:27:35,399 Speaker 2: And of course the other part of this is risks 480 00:27:35,440 --> 00:27:37,520 Speaker 2: to the labor market, and we heard fed cheer Jerome 481 00:27:37,920 --> 00:27:42,399 Speaker 2: Powell cite tighter immigration policy from the administration, which he 482 00:27:42,560 --> 00:27:45,040 Speaker 2: said has led to an abrupt slow down in the 483 00:27:45,119 --> 00:27:47,199 Speaker 2: labor force growth. We want to play you part of 484 00:27:47,200 --> 00:27:48,600 Speaker 2: what he said and then get your reaction. 485 00:27:48,800 --> 00:27:52,080 Speaker 3: On the other side, labor supply has softened in line 486 00:27:52,080 --> 00:27:55,280 Speaker 3: with demand, sharply lowering the break even rate of job 487 00:27:55,359 --> 00:27:59,760 Speaker 3: creation needed to hold the unemployment rate constant. Indeed, labor 488 00:27:59,760 --> 00:28:02,520 Speaker 3: force growth has slowed considerably this year with the sharp 489 00:28:02,520 --> 00:28:06,400 Speaker 3: fallof in immigration, and the labor force participation re rate 490 00:28:06,800 --> 00:28:11,400 Speaker 3: has edged down in recent months. Overall, while the labor 491 00:28:11,440 --> 00:28:13,840 Speaker 3: market appears to be in balance, it is a curious 492 00:28:13,920 --> 00:28:16,600 Speaker 3: kind of balance that results from a marked slowing in 493 00:28:16,640 --> 00:28:21,400 Speaker 3: both the supply of and demand for workers. This unusual 494 00:28:21,480 --> 00:28:25,000 Speaker 3: situation suggests that downside risks to employment are rising. 495 00:28:27,840 --> 00:28:30,440 Speaker 2: Catherine, talk to us here about some of the tangible changes, 496 00:28:30,480 --> 00:28:34,880 Speaker 2: tangible impacts that we've seen from the administration's immigration policy, 497 00:28:34,920 --> 00:28:37,560 Speaker 2: which at the moment they've really been doubling down on 498 00:28:37,680 --> 00:28:40,040 Speaker 2: when it comes to tighter immigration enforcement. 499 00:28:41,880 --> 00:28:46,480 Speaker 9: Yeah, it helps to understand the long history and context 500 00:28:46,520 --> 00:28:50,360 Speaker 9: here this century, the vast majority of growth of our 501 00:28:50,360 --> 00:28:53,320 Speaker 9: working age population. In some years, all of the growth 502 00:28:53,360 --> 00:28:59,400 Speaker 9: of our working age population has come from non native workers. 503 00:29:00,080 --> 00:29:03,680 Speaker 9: So if we were tomorrow cut off all entry into 504 00:29:03,720 --> 00:29:07,720 Speaker 9: the United States for immigrants, our labor force would fall, 505 00:29:08,120 --> 00:29:10,600 Speaker 9: and when it'd start falling the next day, we are 506 00:29:10,720 --> 00:29:13,760 Speaker 9: very much reliant on immigrants to keep the size of 507 00:29:13,760 --> 00:29:16,240 Speaker 9: our labor force growing. So what I think Powell was 508 00:29:16,280 --> 00:29:19,600 Speaker 9: trying to describe was just how difficult it is to 509 00:29:19,720 --> 00:29:22,360 Speaker 9: understand what is going on in the labor market when 510 00:29:22,400 --> 00:29:25,440 Speaker 9: this really key source for labor market growth is both 511 00:29:25,480 --> 00:29:29,000 Speaker 9: being restricted by the current policy as well as pulling 512 00:29:29,040 --> 00:29:31,200 Speaker 9: back on its own of people who are afraid to 513 00:29:31,200 --> 00:29:34,520 Speaker 9: get picked up and deported. So I think what he 514 00:29:34,600 --> 00:29:38,960 Speaker 9: was trying to clarify is just how unclear the labor 515 00:29:39,000 --> 00:29:42,320 Speaker 9: market signals can become when you've added this element of 516 00:29:42,400 --> 00:29:45,520 Speaker 9: reducing where growth has come from. So you can think 517 00:29:45,520 --> 00:29:47,880 Speaker 9: about this in terms of the monthly jobs report, how 518 00:29:47,880 --> 00:29:51,040 Speaker 9: many jobs does the US need to add every month 519 00:29:51,120 --> 00:29:53,800 Speaker 9: in order to be considered healthy. Now, for a long 520 00:29:53,840 --> 00:29:56,320 Speaker 9: time it was north of one hundred thousand. But if 521 00:29:56,400 --> 00:29:59,360 Speaker 9: immigration is going to slow and our population is no 522 00:29:59,400 --> 00:30:02,240 Speaker 9: longer going to grow because we're cutting off the source 523 00:30:02,240 --> 00:30:04,240 Speaker 9: of growth. Do we need to add one hundred and 524 00:30:04,240 --> 00:30:07,240 Speaker 9: fifty thousand jobs every month? Is eighty sufficient? Is the 525 00:30:07,320 --> 00:30:10,720 Speaker 9: thirty five we've seen over the past three months sufficient? 526 00:30:10,720 --> 00:30:13,120 Speaker 9: These questions get a lot harder to answer when the 527 00:30:13,200 --> 00:30:15,760 Speaker 9: key source of growth of the population is fluctuating so. 528 00:30:15,800 --> 00:30:21,280 Speaker 5: Wildly, Catherine, in the thirty seconds we have left another's 529 00:30:21,720 --> 00:30:24,600 Speaker 5: reaction we have seen to powles comments, of course, has 530 00:30:24,640 --> 00:30:28,760 Speaker 5: been on Wall Street, where traders are enjoying what for 531 00:30:28,840 --> 00:30:32,160 Speaker 5: them is their best day since April. Are they perhaps 532 00:30:32,200 --> 00:30:37,080 Speaker 5: a little over enthusiastic though in their bets and expectations 533 00:30:37,080 --> 00:30:39,480 Speaker 5: of what the Fed may do through the rest of 534 00:30:39,520 --> 00:30:39,880 Speaker 5: the year. 535 00:30:41,560 --> 00:30:43,640 Speaker 9: It's hard to know what it is they're positively reacting 536 00:30:43,640 --> 00:30:45,520 Speaker 9: to as well. Maybe they just liked knowing that the 537 00:30:45,560 --> 00:30:48,200 Speaker 9: independent central Bank said that they would stay independent and 538 00:30:48,240 --> 00:30:51,640 Speaker 9: on task and on mission. If that's why they responded positively, 539 00:30:51,680 --> 00:30:53,520 Speaker 9: I think that's good news. If there was some nugget 540 00:30:53,520 --> 00:30:56,640 Speaker 9: that they latched onto. The thing about the stock market 541 00:30:56,680 --> 00:30:59,440 Speaker 9: is a lot of times those positive feelings are ephemeral, 542 00:31:00,200 --> 00:31:02,760 Speaker 9: go away. The substance of our economy has to be 543 00:31:02,800 --> 00:31:06,760 Speaker 9: built on a strong, independent, central, big and sound fiscal policy. 544 00:31:08,800 --> 00:31:13,040 Speaker 2: All right, Catherine Edwards, economic policy consultant and a Bloomberg 545 00:31:13,080 --> 00:31:15,360 Speaker 2: Opinion contributor, We thank you so much. 546 00:31:16,920 --> 00:31:19,080 Speaker 8: Stay with us on Balance of Power. We'll have much 547 00:31:19,120 --> 00:31:20,320 Speaker 8: more coming up after this. 548 00:31:23,600 --> 00:31:27,080 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 549 00:31:27,160 --> 00:31:30,600 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 550 00:31:30,680 --> 00:31:33,680 Speaker 1: Cockway and Android Auto with the Bloomberg Business app. You 551 00:31:33,720 --> 00:31:37,200 Speaker 1: can also listen live on Amazon Alexa from our flagship 552 00:31:37,280 --> 00:31:41,520 Speaker 1: New York station Just Say Alexa played Bloomberg eleven thirty. 553 00:31:43,120 --> 00:31:46,719 Speaker 2: And we're tracking a developing story here in Washington that 554 00:31:47,040 --> 00:31:51,600 Speaker 2: FBI agents search the home of former National Security advisor 555 00:31:51,800 --> 00:31:55,719 Speaker 2: John Bolton. Person familiar tells Bloomberg News it's over an 556 00:31:55,800 --> 00:32:00,360 Speaker 2: investigation regarding classified documents. 557 00:32:00,400 --> 00:32:01,760 Speaker 9: For all the questions that we have. 558 00:32:01,840 --> 00:32:04,640 Speaker 2: About this story and what's next, we're going to bring 559 00:32:04,680 --> 00:32:07,160 Speaker 2: you now the reporter who broke the story for us 560 00:32:07,160 --> 00:32:10,160 Speaker 2: here at Bloomberg or very own, Miles Miller, Bloomberg News 561 00:32:10,160 --> 00:32:14,400 Speaker 2: senior reporter covering the FBI. Miles, It's good to see 562 00:32:14,400 --> 00:32:16,840 Speaker 2: you in great reporting on this. What's the latest. What 563 00:32:16,880 --> 00:32:18,080 Speaker 2: do we know about this search? 564 00:32:18,320 --> 00:32:18,520 Speaker 4: Yeah? 565 00:32:18,560 --> 00:32:21,560 Speaker 8: The FBI is currently searching not only the home but 566 00:32:21,840 --> 00:32:25,920 Speaker 8: the office of John Bolton. And this all boils down 567 00:32:25,960 --> 00:32:29,000 Speaker 8: to the book he wrote in twenty twenty, the room 568 00:32:29,120 --> 00:32:32,320 Speaker 8: where it happened, and in order to even get this 569 00:32:32,360 --> 00:32:34,680 Speaker 8: book out, he had to present it to the White 570 00:32:34,720 --> 00:32:37,440 Speaker 8: House at the time to make sure that there was 571 00:32:37,520 --> 00:32:42,480 Speaker 8: no classified information, and the investigation centers on whether or 572 00:32:42,520 --> 00:32:46,600 Speaker 8: not there was in fact classified information. When this book 573 00:32:46,680 --> 00:32:50,040 Speaker 8: came out, or before it came out, the Trump administration 574 00:32:50,400 --> 00:32:52,640 Speaker 8: at the time had tried to block it. They went 575 00:32:52,680 --> 00:32:56,880 Speaker 8: to court to block it. Trump accus Bolton of profiting 576 00:32:56,920 --> 00:33:01,760 Speaker 8: from this classified information, and Bolton said he went through 577 00:33:01,760 --> 00:33:04,600 Speaker 8: proper channels to get this done. It was taken to 578 00:33:04,680 --> 00:33:09,400 Speaker 8: the DOJ at the time, and then the DOJ did 579 00:33:09,400 --> 00:33:11,560 Speaker 8: not block the release of the book. The book came out, 580 00:33:11,600 --> 00:33:15,040 Speaker 8: and he has been out of Trump's good graces since then. 581 00:33:15,520 --> 00:33:17,960 Speaker 8: Just to give you a flavor of what Trump said 582 00:33:18,160 --> 00:33:22,240 Speaker 8: back then, he said, washed up creepster John Bolton is 583 00:33:22,280 --> 00:33:25,040 Speaker 8: a low life who should be in jail. Money sees 584 00:33:25,560 --> 00:33:30,520 Speaker 8: for disseminating for profit highly classified information. Asked about it today, 585 00:33:30,760 --> 00:33:33,440 Speaker 8: Trump said he didn't know anything about what happened, but 586 00:33:33,840 --> 00:33:35,640 Speaker 8: he said he's not a fan of John Bolton. 587 00:33:37,400 --> 00:33:40,200 Speaker 5: Miles. We have to ask about the current context, though, 588 00:33:40,240 --> 00:33:43,600 Speaker 5: and that is that John Bolton has been critical of 589 00:33:43,640 --> 00:33:47,400 Speaker 5: the President's conduct when it comes to foreign policy, recently 590 00:33:47,840 --> 00:33:51,400 Speaker 5: with Russia's leader of Vladimir Putin. Is there any connection 591 00:33:51,600 --> 00:33:56,320 Speaker 5: between that kind of criticism and this renewed inquiry into 592 00:33:56,440 --> 00:33:58,760 Speaker 5: his former national security advisor. 593 00:33:58,600 --> 00:34:01,720 Speaker 8: Right, I mean, just as recently as Friday, John Bolton 594 00:34:02,080 --> 00:34:05,040 Speaker 8: was on CNN for much of the night talking about 595 00:34:05,280 --> 00:34:09,120 Speaker 8: that summit in Anchorage, Alaska, and you know, that sort 596 00:34:09,160 --> 00:34:12,239 Speaker 8: of points to what some people say could be retaliation 597 00:34:12,440 --> 00:34:16,440 Speaker 8: for that. But the FBI Director Cash Mattel, as well 598 00:34:16,480 --> 00:34:19,799 Speaker 8: as the Attorney General Pam Bondi, they all were in 599 00:34:19,960 --> 00:34:23,399 Speaker 8: unified message that no one is above the law and 600 00:34:23,440 --> 00:34:26,719 Speaker 8: that this is all about, you know, really what they 601 00:34:26,840 --> 00:34:29,520 Speaker 8: see as a as an issue of national security of 602 00:34:29,560 --> 00:34:32,640 Speaker 8: being leaked out. But beyond that, you know, we have 603 00:34:32,760 --> 00:34:35,680 Speaker 8: seen in the you know, last few weeks and the 604 00:34:35,719 --> 00:34:38,279 Speaker 8: last few months of people who are related to any 605 00:34:38,320 --> 00:34:42,640 Speaker 8: of these matters, as related to the Trump uh classified 606 00:34:42,640 --> 00:34:48,200 Speaker 8: documents cases involving the President himself and any other matters 607 00:34:48,280 --> 00:34:51,640 Speaker 8: January sixth, that people are being moved from government. You know, 608 00:34:51,680 --> 00:34:54,279 Speaker 8: they're being fired and all of that, and so you know, 609 00:34:54,400 --> 00:34:57,360 Speaker 8: that is what points to these questions, is this politically 610 00:34:57,400 --> 00:35:01,240 Speaker 8: motivated or is this really something that's just focused on 611 00:35:01,800 --> 00:35:05,680 Speaker 8: national security matter and these documents being out in the 612 00:35:05,719 --> 00:35:08,239 Speaker 8: open and then and then in his book, you know, 613 00:35:08,280 --> 00:35:10,920 Speaker 8: it's it really is interesting. You saw at the beginning 614 00:35:10,920 --> 00:35:15,240 Speaker 8: of this administration, President Trump pulling the Secret Service detail 615 00:35:15,640 --> 00:35:18,640 Speaker 8: from John Bolton, if you you know, in my reporting 616 00:35:18,680 --> 00:35:21,120 Speaker 8: today and looking at you know, at the just the 617 00:35:21,560 --> 00:35:24,000 Speaker 8: landscape of where he was arrested. I'm sorry, where he 618 00:35:24,080 --> 00:35:26,840 Speaker 8: where the look at the landscape of where they searched 619 00:35:27,320 --> 00:35:31,080 Speaker 8: the home this morning. There were back in twenty twenty 620 00:35:31,080 --> 00:35:36,080 Speaker 8: four for secret Service vehicles outside the house and that's 621 00:35:36,120 --> 00:35:40,040 Speaker 8: gone today because that secret Service detail was taken from him. 622 00:35:40,040 --> 00:35:43,320 Speaker 8: But he said he had credible threats from foreign adversaries 623 00:35:43,760 --> 00:35:45,880 Speaker 8: who made threats on his life. 624 00:35:46,120 --> 00:35:46,640 Speaker 1: So it's just. 625 00:35:46,600 --> 00:35:49,120 Speaker 8: Interesting that the Trump administration comes in and immediately takes 626 00:35:49,160 --> 00:35:51,239 Speaker 8: that away and then is now searching his home. 627 00:35:52,520 --> 00:35:55,560 Speaker 5: Miles. Another major story that you have been covering, of course, 628 00:35:55,600 --> 00:35:59,960 Speaker 5: has been the president's effort to take over law enforcement 629 00:36:00,200 --> 00:36:04,120 Speaker 5: here in the nation's capital. How has that been playing out? 630 00:36:04,160 --> 00:36:07,799 Speaker 5: Both for residents, the state of security here on the 631 00:36:07,840 --> 00:36:11,080 Speaker 5: ground in the city, and how has it been in 632 00:36:11,200 --> 00:36:14,080 Speaker 5: terms of the politics of it. We have seen JD. 633 00:36:14,239 --> 00:36:18,319 Speaker 5: Vance and the President himself last night visiting some of 634 00:36:18,360 --> 00:36:21,080 Speaker 5: the National Guard troops who are taking part in this effort. 635 00:36:21,680 --> 00:36:24,600 Speaker 8: Yeah, so you know new reporting today that National Guard 636 00:36:24,600 --> 00:36:27,080 Speaker 8: troops in d C, you know, made up not just 637 00:36:27,080 --> 00:36:30,040 Speaker 8: of folks from d C, but from other you know, 638 00:36:30,120 --> 00:36:33,759 Speaker 8: conservative run state states run by conservative governors who've lent 639 00:36:34,040 --> 00:36:36,960 Speaker 8: you know, their National Guards members to DC as part 640 00:36:36,960 --> 00:36:40,279 Speaker 8: of this effort. So bolstering the initial eight hundred that 641 00:36:40,320 --> 00:36:44,920 Speaker 8: were deployed will be carrying weapons at some point. Pete Hegseth, 642 00:36:44,960 --> 00:36:48,480 Speaker 8: the Defense Secretary, making that determination today. We don't know 643 00:36:48,520 --> 00:36:51,120 Speaker 8: exactly when that's going to happen. But like on the ground, 644 00:36:51,200 --> 00:36:54,000 Speaker 8: what we're seeing is that by and large, you know, 645 00:36:54,080 --> 00:36:56,880 Speaker 8: there are a number of arrests that happened overnight and 646 00:36:57,080 --> 00:36:59,759 Speaker 8: large number of arrests. But when you compare that we 647 00:36:59,840 --> 00:37:02,040 Speaker 8: did story earlier this week, when you compare that with 648 00:37:02,280 --> 00:37:05,680 Speaker 8: the number of arrests made by Metropolitan Police Department during 649 00:37:05,680 --> 00:37:09,080 Speaker 8: the same period, it's well under the amount of arrests 650 00:37:09,080 --> 00:37:11,680 Speaker 8: that are already being made by officers. Now, you know, 651 00:37:12,000 --> 00:37:15,560 Speaker 8: we've been doing some exhaustive reporting, going through court dockets 652 00:37:16,120 --> 00:37:18,560 Speaker 8: and looking at really what were the top charges, the 653 00:37:19,080 --> 00:37:21,480 Speaker 8: big things that people were charged with. You know, in 654 00:37:21,600 --> 00:37:25,440 Speaker 8: large part, you know, they've only charged twelve people with 655 00:37:25,560 --> 00:37:29,400 Speaker 8: any federal crimes. Most of this winding up in superior 656 00:37:29,480 --> 00:37:33,200 Speaker 8: court in Washington, and you know, it's important to see 657 00:37:33,200 --> 00:37:36,120 Speaker 8: where these cases go. Are they thrown out, what happens 658 00:37:36,160 --> 00:37:39,479 Speaker 8: with them. Pam Bondi has said pretty critically that any 659 00:37:39,480 --> 00:37:41,920 Speaker 8: of these judges that have leniency to any of the 660 00:37:41,960 --> 00:37:45,600 Speaker 8: people who have attacked officers will be called out on 661 00:37:45,600 --> 00:37:48,319 Speaker 8: social media and they'll be going to do everything they 662 00:37:48,360 --> 00:37:50,640 Speaker 8: can to fight back against that. But you know, you 663 00:37:50,719 --> 00:37:54,480 Speaker 8: have a president who went out yesterday to really give 664 00:37:54,520 --> 00:37:56,040 Speaker 8: a message to the folks who's been out there on 665 00:37:56,080 --> 00:37:58,960 Speaker 8: the front lines to say, you know, continue doing this 666 00:37:59,000 --> 00:38:01,680 Speaker 8: effort and it probably won't stop here in Washington. 667 00:38:03,320 --> 00:38:06,160 Speaker 5: Miles Miller, thank you so much for all your reporting. 668 00:38:06,480 --> 00:38:09,120 Speaker 5: We're now going to take it to our signature political 669 00:38:09,200 --> 00:38:13,800 Speaker 5: panel of Genie Shanzano, democracy visiting fellow at Harvard Kennedy Schools, 670 00:38:13,800 --> 00:38:18,240 Speaker 5: ASH Senator and democratic strategist, and Ashley Davis, a partner 671 00:38:18,239 --> 00:38:21,879 Speaker 5: at S three Group and Republican strategist. Thank you, Bud 672 00:38:21,960 --> 00:38:24,760 Speaker 5: so much for joining us. Genie, I wanted to start 673 00:38:24,840 --> 00:38:31,040 Speaker 5: with you. What are we seeing as these this raid 674 00:38:31,160 --> 00:38:35,759 Speaker 5: today unfolds at John Bolton's house. Are we seeing a 675 00:38:35,840 --> 00:38:41,399 Speaker 5: widening campaign of retribution against national security officials who may 676 00:38:41,440 --> 00:38:43,920 Speaker 5: have crossed Donald Trump in the past. 677 00:38:45,480 --> 00:38:47,840 Speaker 10: You know, I think we have to be very careful. 678 00:38:48,600 --> 00:38:52,240 Speaker 10: A judge had to sign off on the AffA David 679 00:38:52,320 --> 00:38:56,120 Speaker 10: for the search warrant, which means that a judge found 680 00:38:56,200 --> 00:38:59,640 Speaker 10: that there was reason to support the search warrant. And 681 00:39:00,040 --> 00:39:03,000 Speaker 10: so I think until and unless we know what is 682 00:39:03,120 --> 00:39:06,359 Speaker 10: found and what the scope of this is, we've heard 683 00:39:06,400 --> 00:39:09,040 Speaker 10: it's all about, as you were just talking about the 684 00:39:09,120 --> 00:39:12,040 Speaker 10: information in this twenty twenty book the Room where it 685 00:39:12,120 --> 00:39:15,680 Speaker 10: happened that Bolton wrote, But there could also be more, 686 00:39:15,800 --> 00:39:18,080 Speaker 10: so I think we have to watch for that. But 687 00:39:18,200 --> 00:39:20,640 Speaker 10: the second thing I would say many people are talking 688 00:39:20,680 --> 00:39:23,520 Speaker 10: about the timing of this. This is the same day 689 00:39:23,560 --> 00:39:26,600 Speaker 10: that Congress is getting the Jeffrey Epstein files for the 690 00:39:26,640 --> 00:39:30,840 Speaker 10: first time, and the DOJ, knowing that, decided to go 691 00:39:31,040 --> 00:39:33,880 Speaker 10: in that day. So there's a couple of elements of 692 00:39:33,920 --> 00:39:35,920 Speaker 10: this that I think we have to be careful about 693 00:39:35,960 --> 00:39:38,200 Speaker 10: but the timing here is very interesting. 694 00:39:39,600 --> 00:39:41,640 Speaker 2: Well, Ashley, let's get your take. Do you have those 695 00:39:41,680 --> 00:39:45,600 Speaker 2: same concerns or what are you making of this FBI surch. 696 00:39:45,360 --> 00:39:46,040 Speaker 5: There's a couple of things. 697 00:39:46,080 --> 00:39:48,080 Speaker 11: Firstal genius exactly the right. A judge did have to 698 00:39:48,120 --> 00:39:50,279 Speaker 11: sign off on this, I think, and I would say 699 00:39:50,280 --> 00:39:52,480 Speaker 11: the same thing about when the FBI went into mar Lago. 700 00:39:52,520 --> 00:39:55,040 Speaker 11: I mean, this kind of going in for political reasons 701 00:39:55,040 --> 00:39:57,480 Speaker 11: we don't exactly know, but a judge did have to 702 00:39:57,480 --> 00:40:01,680 Speaker 11: sign off on the affiday. But I also think that 703 00:40:02,120 --> 00:40:05,160 Speaker 11: it's not about the book. It's about the papers he 704 00:40:05,400 --> 00:40:09,400 Speaker 11: used for the book. So even though, as Miles was 705 00:40:09,400 --> 00:40:13,799 Speaker 11: saying earlier, that it was approved to be published from 706 00:40:13,840 --> 00:40:17,240 Speaker 11: the Justice Department, that's one thing, But there's still documents 707 00:40:17,280 --> 00:40:20,440 Speaker 11: and unless well remember he lost his security clearance in 708 00:40:20,480 --> 00:40:23,000 Speaker 11: the beginning of this year, So if he has classified 709 00:40:23,040 --> 00:40:26,320 Speaker 11: documents in his house that are not supported by a skiff, 710 00:40:26,440 --> 00:40:29,399 Speaker 11: which is a national security room that can hold national 711 00:40:29,400 --> 00:40:33,760 Speaker 11: security documents, then that may be where there is concern. 712 00:40:34,000 --> 00:40:37,239 Speaker 11: So I don't know that it really matters that the 713 00:40:37,239 --> 00:40:39,680 Speaker 11: book was signed off on by the judiciary, by the 714 00:40:39,760 --> 00:40:42,840 Speaker 11: Justice Department. It's more of the documents that supported the book. 715 00:40:43,280 --> 00:40:44,640 Speaker 11: From what I've been told. 716 00:40:45,840 --> 00:40:48,920 Speaker 5: Jennie, we wanted to turn also to other news of 717 00:40:49,000 --> 00:40:51,760 Speaker 5: the day. Of course we'd be remiss and not talking 718 00:40:51,920 --> 00:40:55,959 Speaker 5: about the FED and the economy. How do you see 719 00:40:56,000 --> 00:41:01,960 Speaker 5: this unfolding politically for Republicans and for Democrats over the 720 00:41:01,960 --> 00:41:04,640 Speaker 5: next month or so. This will be a critical time 721 00:41:04,719 --> 00:41:08,360 Speaker 5: period with the FED about to make a big decision here. 722 00:41:09,040 --> 00:41:12,439 Speaker 5: What is your sense of where they go and how 723 00:41:12,440 --> 00:41:14,960 Speaker 5: this will be played by both the White House and 724 00:41:15,040 --> 00:41:15,839 Speaker 5: by Democrats. 725 00:41:17,200 --> 00:41:20,320 Speaker 10: Yeah, it was so fascinating to hear Jerome Powell's comments 726 00:41:20,360 --> 00:41:23,320 Speaker 10: this morning, and it is striking that he has agreed 727 00:41:23,360 --> 00:41:26,680 Speaker 10: with Chris Waller on the impact of these terroriffts as 728 00:41:26,719 --> 00:41:29,319 Speaker 10: sort of a one off. I don't know if that 729 00:41:29,400 --> 00:41:33,720 Speaker 10: indicates anything in terms of a you know, Waller's position 730 00:41:33,800 --> 00:41:37,400 Speaker 10: as Donald Trump looks to replace Powell. But even putting 731 00:41:37,400 --> 00:41:40,120 Speaker 10: that aside, I thought what's most striking is Jerome Powell 732 00:41:40,160 --> 00:41:44,000 Speaker 10: said very little directly about FED independence in the wake 733 00:41:44,120 --> 00:41:46,239 Speaker 10: of the President's Commons and you and Tyler were just 734 00:41:46,280 --> 00:41:49,879 Speaker 10: talking about them concerning Lisa Cook, and he did though 735 00:41:49,960 --> 00:41:54,480 Speaker 10: say that they would always make these decisions regardless of 736 00:41:54,520 --> 00:41:57,719 Speaker 10: pressure on the FED, based on the data. And so 737 00:41:57,840 --> 00:42:00,400 Speaker 10: that would suggest that while he has walked down this 738 00:42:00,520 --> 00:42:05,359 Speaker 10: path towards a September cut, that if additional data came 739 00:42:05,520 --> 00:42:09,360 Speaker 10: that he may be willing to change his mind. It's unknown. 740 00:42:09,880 --> 00:42:12,600 Speaker 10: And the final thing I would say that's fascinating is 741 00:42:12,640 --> 00:42:15,400 Speaker 10: it seems that Powell has made this switch based on 742 00:42:15,719 --> 00:42:19,200 Speaker 10: the data that came on jobs, and yet Donald Trump 743 00:42:19,239 --> 00:42:22,480 Speaker 10: should have then celebrated those data because they get him 744 00:42:22,520 --> 00:42:24,840 Speaker 10: what he wants, which is potentially a rate cut. And 745 00:42:24,880 --> 00:42:26,560 Speaker 10: yet what does he do. He fires the head of 746 00:42:26,640 --> 00:42:29,560 Speaker 10: the BLS. So there you go, Mike, It's it's a 747 00:42:29,600 --> 00:42:31,200 Speaker 10: fascinating turn of events. 748 00:42:33,680 --> 00:42:36,200 Speaker 2: I mean, yep, Actually, let's hear what you think. 749 00:42:36,239 --> 00:42:38,439 Speaker 11: It always is. I do think, I mean, you guys 750 00:42:38,520 --> 00:42:43,000 Speaker 11: better than anybody, that there probably was going to be 751 00:42:43,040 --> 00:42:46,759 Speaker 11: a rake cut in September the next meeting. But I 752 00:42:46,800 --> 00:42:49,480 Speaker 11: also think that, and you read everything leading up to 753 00:42:49,560 --> 00:42:52,000 Speaker 11: the speech today, that if he wasn't, if he didn't 754 00:42:52,000 --> 00:42:54,959 Speaker 11: say what he did, in some version, the markets would 755 00:42:54,960 --> 00:42:57,000 Speaker 11: have gone crazy because I think they would have expected 756 00:42:57,000 --> 00:42:59,560 Speaker 11: this to happen. You know, the longer it gets with 757 00:42:59,600 --> 00:43:01,719 Speaker 11: this kind of a tit for tat between Pow and 758 00:43:01,760 --> 00:43:03,759 Speaker 11: then obviously now with Cook, and that's a whole other 759 00:43:03,960 --> 00:43:07,239 Speaker 11: issue that we can talk about. But the longer it 760 00:43:07,280 --> 00:43:10,480 Speaker 11: goes into the fall, the less chance that he's ever 761 00:43:10,520 --> 00:43:13,319 Speaker 11: going to get fired because he's done, he's done getting 762 00:43:13,440 --> 00:43:15,920 Speaker 11: next year, so there's really no reason. And if if 763 00:43:16,000 --> 00:43:19,879 Speaker 11: Trump gets his right cut in September, maybe maybe they'll 764 00:43:19,920 --> 00:43:20,720 Speaker 11: bury the hatchet. 765 00:43:21,120 --> 00:43:23,520 Speaker 5: But does this take the heat off the ball Ashley 766 00:43:23,600 --> 00:43:26,640 Speaker 5: then for Lisa Cook or is that a separate matter? 767 00:43:26,680 --> 00:43:29,120 Speaker 11: Aal Oh, I think that's a separate whole matter. And listen, 768 00:43:29,239 --> 00:43:33,880 Speaker 11: I I find this whole thing fascinating with Bill Polti 769 00:43:34,000 --> 00:43:37,440 Speaker 11: and the head of the you know, Federal Housing Administration 770 00:43:38,000 --> 00:43:41,600 Speaker 11: and just some of the different information he's finding finding. Obviously, 771 00:43:41,800 --> 00:43:45,799 Speaker 11: he has put the information to the Attorney General. They 772 00:43:45,880 --> 00:43:48,799 Speaker 11: need to make a decision if she did, you know, 773 00:43:48,880 --> 00:43:53,799 Speaker 11: break the law obviously, and if so, they will I 774 00:43:53,840 --> 00:43:56,000 Speaker 11: think then there's maybe a case for him to fire her. 775 00:43:56,040 --> 00:43:58,560 Speaker 11: But that has to happen first. But right now we're 776 00:43:58,600 --> 00:44:01,279 Speaker 11: just it's playing out in the all. 777 00:44:01,280 --> 00:44:03,840 Speaker 2: Right, a great conversation today, and our political panel is 778 00:44:03,880 --> 00:44:06,440 Speaker 2: sticking with us for hour two of Balance of Power 779 00:44:06,440 --> 00:44:10,160 Speaker 2: that was Genie Shanzino, democracy visiting fellow at Harvard Kennedy's 780 00:44:10,120 --> 00:44:14,840 Speaker 2: School School's Ash Center, and a democratic strategist alongside Ashley Davis, 781 00:44:15,160 --> 00:44:18,400 Speaker 2: partner at S three Group and republican strategist. 782 00:44:22,680 --> 00:44:25,120 Speaker 8: Thanks for listening to the Balance of Power podcast. 783 00:44:25,760 --> 00:44:28,200 Speaker 10: Make sure to subscribe if you haven't already, at Apple, 784 00:44:28,280 --> 00:44:28,880 Speaker 10: Spotify 785 00:44:28,960 --> 00:44:31,560 Speaker 7: Or wherever you get your podcasts, and you can find 786 00:44:31,600 --> 00:44:34,840 Speaker 7: us live every weekday from Washington, DC at noontime Eastern 787 00:44:35,160 --> 00:44:36,520 Speaker 7: at Bloomberg dot com.