WEBVTT - Bloomberg Surveillance TV: July 23rd, 2025 0:00:02.400 --> 0:00:08.560 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:35.840 Terminal and the Bloomberg Business App. 0:00:36.440 --> 0:00:39.519 I'm joined by the US Treasury Secretary Scott Bessett this 0:00:39.560 --> 0:00:42.000 morning on the heels of this agreement the President announced 0:00:42.240 --> 0:00:46.080 last night last week, you joined me, John and Lisa, 0:00:46.120 --> 0:00:47.760 and you said you were going to Japan. 0:00:47.520 --> 0:00:49.440 For the World Expert, wasn't really going to be focused 0:00:49.440 --> 0:00:50.160 on trade. 0:00:50.240 --> 0:00:51.000 You came back. 0:00:51.320 --> 0:00:53.600 The President had a seventy five minute meeting as well 0:00:53.680 --> 0:00:56.120 last night with the trade negotiator. You were in the room, 0:00:56.440 --> 0:00:59.320 and he got this deal with you alongside him over 0:00:59.400 --> 0:01:02.160 the finish line. And even though the reporting at Washington 0:01:02.200 --> 0:01:05.800 that actually the discussions with Japan were quite difficult, what 0:01:06.000 --> 0:01:07.560 changed in the last twenty four hours. 0:01:08.040 --> 0:01:12.760 Look, Anne Marie, we had some discussions about the overall 0:01:13.200 --> 0:01:16.039 US Japan relationship, which was one of the strongest in 0:01:16.080 --> 0:01:19.640 the world when I was in Tokyo and Osaka, and 0:01:19.680 --> 0:01:20.679 then we got back. 0:01:21.319 --> 0:01:22.920 There are elections on Sunday. 0:01:23.760 --> 0:01:29.360 LEDP did slightly better than expected. They don't have a majority. 0:01:29.959 --> 0:01:35.160 Japanese government was ready to deal, and as president, only 0:01:35.200 --> 0:01:38.319 President Trump could do. He brought the Japanese trade delegation 0:01:38.600 --> 0:01:43.840 into the Oval and had a very fulsome negotiation with them, 0:01:43.920 --> 0:01:47.240 and I tell you they're tough negotiators for President Trump's tougher. 0:01:47.560 --> 0:01:48.240 Well, there's a. 0:01:48.160 --> 0:01:51.320 Photo circulating on Twitter from Dan Scavino and you actually 0:01:51.360 --> 0:01:54.960 see a sharpie x out of some what looks like 0:01:55.040 --> 0:01:59.040 preliminary deals for even more concessions with Japan. I want 0:01:59.080 --> 0:02:02.000 to ask you about this fifteen percent tariff free. Is 0:02:02.040 --> 0:02:04.680 that the new floor now for trading partners when you're 0:02:04.720 --> 0:02:06.160 going into these negotiations. 0:02:06.320 --> 0:02:09.880 Well, I think it's very important to note that fifteen 0:02:10.360 --> 0:02:15.880 percent for Japan for reciprocal terrorists for autos, that is 0:02:16.040 --> 0:02:19.680 a different kind of deal. But because the Japanese proposed 0:02:20.000 --> 0:02:24.480 a very innovative solution, we've been working with them for months, 0:02:24.720 --> 0:02:30.720 the trade team, myself, Ambassador Greer, Secretary Lutnik, and they 0:02:30.800 --> 0:02:34.360 came to US with the idea of a Japan US 0:02:34.600 --> 0:02:38.799 partnership where they are going to provide equity, credit guarantees 0:02:38.840 --> 0:02:42.320 and funding for major projects. 0:02:41.800 --> 0:02:42.600 In the US. 0:02:43.200 --> 0:02:46.480 So they got the fifteen percent rate because they were 0:02:46.520 --> 0:02:51.760 willing to provide this innovative financing mechanism. 0:02:51.919 --> 0:02:55.120 There's a lot of Japanese FDI into the United States already. 0:02:55.160 --> 0:02:56.120 Is this new capital? 0:02:56.400 --> 0:02:58.320 Oh no, this is all new capital. 0:02:58.639 --> 0:03:01.560 This is all new capital, and it is going to 0:03:01.560 --> 0:03:05.760 be targeted at the strategic industries. The President Trump and 0:03:05.840 --> 0:03:09.800 this administration believe that we have to de risk on 0:03:10.760 --> 0:03:14.840 During COVID, we saw our vulnerabilities, whether it was in 0:03:14.960 --> 0:03:19.760 medicine semiconductors. So we are going all in over the 0:03:19.800 --> 0:03:23.680 next few years to de risk our supply chains and 0:03:23.800 --> 0:03:26.640 this deal, thanks to President Trump, is going to be 0:03:26.680 --> 0:03:27.040 part of that. 0:03:27.280 --> 0:03:29.600 When it comes to the fifteen percent rate on autos, 0:03:29.840 --> 0:03:33.480 this means that Toyota is basically paying a cheaper rate 0:03:33.600 --> 0:03:37.600 than say GM if they have inputs from other countries. 0:03:37.640 --> 0:03:39.960 Still they're still at the twenty five percent auto rate. 0:03:40.240 --> 0:03:42.720 Do you see the auto rate leveling out to something 0:03:42.800 --> 0:03:44.240 lower than twenty five percent. 0:03:44.640 --> 0:03:46.000 We'll have to see. 0:03:46.080 --> 0:03:50.680 And again those are just GM components. There's also the 0:03:50.800 --> 0:03:57.320 US NCA, the portion of any autos assembled in the US, 0:03:57.440 --> 0:04:00.800 and then of course GM and especially Ford. I think 0:04:00.840 --> 0:04:04.360 Ford has the largest US production. You're building in the US, 0:04:04.440 --> 0:04:04.920 there are no. 0:04:04.960 --> 0:04:08.480 Tariffs, so when it comes to what's next, we know 0:04:08.520 --> 0:04:12.200 the EU negotiators are in town. This fifteen percent rate 0:04:12.280 --> 0:04:14.240 feels like potentially a floor. 0:04:14.360 --> 0:04:16.240 Could anyone get below fifteen percent? 0:04:16.279 --> 0:04:19.200 Is the European Union still trying for ten percent minimum 0:04:19.240 --> 0:04:20.040 baseline tariff? 0:04:20.279 --> 0:04:20.599 Well? 0:04:20.960 --> 0:04:24.599 Again, the fifteen percent is a result of this very 0:04:24.640 --> 0:04:28.719 innovative package that the Japanese came with and your President 0:04:28.760 --> 0:04:32.960 Trump being able to push them to do even more so. 0:04:33.760 --> 0:04:35.599 Has Russels come up with anything innovative? 0:04:36.600 --> 0:04:41.320 Not yet, But again, talks are going better than they 0:04:41.400 --> 0:04:46.279 had been. I think that we are making good progress 0:04:46.400 --> 0:04:49.760 with the EU. But as I've said before, Emory and 0:04:50.000 --> 0:04:53.440 the EU has a collective action problem twenty seven countries. 0:04:53.720 --> 0:04:56.279 Great thing about dealing with the Japanese. I've been going 0:04:56.320 --> 0:05:00.200 to Japan since nineteen ninety. I think this weekend my 0:05:00.320 --> 0:05:05.200 fifty second trip, and the Japanese government moves of one entity. 0:05:05.279 --> 0:05:08.360 They're highly organized across all level of government. 0:05:08.680 --> 0:05:10.680 So you say that talks are going better, we just 0:05:10.720 --> 0:05:12.880 have a story hitting the terminal this morning from our 0:05:12.920 --> 0:05:15.680 colleagues in Europe that the European Union is readying one 0:05:15.760 --> 0:05:20.760 hundred billion dollars euros. If there is no deal in place, 0:05:21.040 --> 0:05:23.640 they will impose thirty percent tariffs on those one hundred 0:05:23.640 --> 0:05:24.960 billion euros worth of goods. 0:05:25.000 --> 0:05:26.440 Do you think we're going to get to that place. 0:05:27.120 --> 0:05:30.560 I think it's a negotiating tactic and it's what I 0:05:30.560 --> 0:05:33.440 would do if I were in their place. But Amory, 0:05:33.720 --> 0:05:38.479 remember we are the deficit nation. They're the surplus nations, 0:05:38.600 --> 0:05:43.560 so any kind of a escalation in trade problems will 0:05:43.600 --> 0:05:44.640 always hit them worse. 0:05:44.960 --> 0:05:46.799 I want to also talk about what's going on with China. 0:05:46.880 --> 0:05:49.520 You're going to Stockholm Monday Tuesday to meet with your 0:05:49.600 --> 0:05:54.240 Chinese counterparts. Are we going to continuously see the discussions 0:05:54.320 --> 0:05:57.640 revolve around where Earth's and export controls or they're going 0:05:57.680 --> 0:05:59.200 to be other items on the table. 0:05:59.600 --> 0:06:00.600 I think we're in. 0:06:00.560 --> 0:06:04.160 A very good place with China now and we can 0:06:04.240 --> 0:06:09.360 start moving on to bigger discussions. As I've said many times, 0:06:09.680 --> 0:06:13.799 there is a potential for a big, beautiful rebalancing between 0:06:13.880 --> 0:06:17.560 the US and China. President Trump is committed to bringing 0:06:17.600 --> 0:06:22.160 back precision manufacturing to the US and as we become 0:06:22.200 --> 0:06:27.040 more of a manufacturing economy, China is highly imbalanced. They 0:06:27.120 --> 0:06:30.880 account for thirty percent of all the manufacturing output in 0:06:30.960 --> 0:06:36.359 the world. That's not sustainable. We believe they should become 0:06:36.360 --> 0:06:39.440 more of a consumption economy. If they are willing to 0:06:39.480 --> 0:06:42.320 go down that route, then we could actually do it together. 0:06:42.640 --> 0:06:44.200 And then there are lots of other things we can 0:06:44.240 --> 0:06:50.200 talk about, whether it's them buying sanctioned Russian or Iranian oil, 0:06:51.120 --> 0:06:57.240 a number of security things, and so a purchasing agreement. 0:06:57.400 --> 0:07:00.480 From Trump's first administration, he had to deal with China 0:07:00.600 --> 0:07:03.320 on the Phase one purchasing agreement on agriculture. 0:07:03.440 --> 0:07:06.600 Well, again, that's another way that we could bring this 0:07:06.720 --> 0:07:10.560 in balance relationship into balance. So we will be talking 0:07:10.640 --> 0:07:19.239 about purchasing agreements, especially ag and to refresh everyone's memory, 0:07:20.040 --> 0:07:23.200 we had the purchase agreements. Chinese lived up to the 0:07:23.240 --> 0:07:28.120 purchase agreements during President Trump's final year in office, and 0:07:28.160 --> 0:07:32.440 then the Biden administration didn't enforce those purchase agreements. So 0:07:33.080 --> 0:07:35.280 we're going to let bygones be bygones. We're going to 0:07:35.360 --> 0:07:39.120 look forward, and I think we can come up with 0:07:39.160 --> 0:07:43.000 some very interesting purchasing agreements. As you know, President Trump 0:07:43.520 --> 0:07:45.200 is committed to the American farmers. 0:07:45.320 --> 0:07:48.800 Well, looking forward, you told me John and Lisa last week. 0:07:48.880 --> 0:07:51.920 The market doesn't need to worry about August twelfth. That's 0:07:51.960 --> 0:07:55.600 the deadline for this current dayton between Washington and Beijing. 0:07:55.960 --> 0:07:57.360 What's the new deadline going to be? 0:07:57.840 --> 0:08:03.080 Well again, I think that we could roll it forward, 0:08:03.640 --> 0:08:07.880 maybe in a ninety day increment. And I think the 0:08:07.920 --> 0:08:11.120 good news here is that we are back on track 0:08:11.480 --> 0:08:18.640 with the Chinese negotiations. On April second, President Trump told countries, 0:08:19.240 --> 0:08:23.480 here's your reciprocal rate. But that was the ceiling if 0:08:23.520 --> 0:08:26.680 you do not escalate. If you don't escalate, this is 0:08:26.840 --> 0:08:30.840 the max. The Chinese chose to escalate. But now we 0:08:31.160 --> 0:08:33.840 both sides have de escalated, and I think we can 0:08:33.880 --> 0:08:37.400 get into a very good cadence of regular meetings with them. 0:08:37.720 --> 0:08:40.320 And look, we're the two largest economies in the world. 0:08:40.600 --> 0:08:43.280 We do not want to decouple with the Chinese. We 0:08:43.440 --> 0:08:46.000 just need to de risk part of our supply chain. 0:08:46.360 --> 0:08:50.360 Does regular incremental meetings include a meeting between President Trump 0:08:50.400 --> 0:08:51.680 and Shijiping this fall. 0:08:52.320 --> 0:08:56.040 I do know that a party chair she has invited 0:08:56.080 --> 0:09:00.720 President Trump to visit China. I don't know. I don't 0:09:00.720 --> 0:09:03.319 have dates on that. I don't know if the President's accepted. 0:09:03.640 --> 0:09:07.920 I know they have a fantastic relationship on a personal level, 0:09:08.240 --> 0:09:11.520 which I think forms the basis of everything between the 0:09:11.640 --> 0:09:12.480 US and China. 0:09:12.520 --> 0:09:15.480 Local reports in China, we're talking about the two meeting 0:09:15.559 --> 0:09:18.160 on the sidelines of the APAX summit in South Korea 0:09:18.200 --> 0:09:20.440 this fall at the end of October early November, or 0:09:20.480 --> 0:09:23.760 maybe President Trump going to China first. Could we see 0:09:23.760 --> 0:09:25.680 a meeting that soon? You think a meeting within this 0:09:25.800 --> 0:09:26.439 year can happen. 0:09:27.040 --> 0:09:31.280 Again, I'm not privy to the President's travel schedule beyond September, 0:09:31.640 --> 0:09:33.520 so we'll see. 0:09:33.360 --> 0:09:36.440 Nothing before a meeting with Chighing paid before September. 0:09:36.600 --> 0:09:37.800 Nothing before Labor Day. 0:09:37.920 --> 0:09:39.880 So in the last week, I do want to go 0:09:39.920 --> 0:09:42.520 through something that's going on with China. They've imposed exit 0:09:42.600 --> 0:09:46.079 bands on a Wells Fargo banker, a commerce department employee, 0:09:46.080 --> 0:09:49.319 and according to Microsoft, they hacked into their software. Will 0:09:49.360 --> 0:09:52.400 you address these actions at the talks in Stockholm. 0:09:52.720 --> 0:09:56.400 We're going to address a whole host of things, and 0:09:56.880 --> 0:10:00.319 you know, obviously things like that will be on the 0:10:00.360 --> 0:10:03.439 agenda with my Chinese counterpart. 0:10:03.760 --> 0:10:06.800 You had said to me last week that the Nvidia 0:10:07.040 --> 0:10:10.280 H twenty chip was potentially a chip in negotiations, a 0:10:10.320 --> 0:10:12.400 mosaic part of the deal. Do you think China is 0:10:12.440 --> 0:10:14.880 doing this for leverage at the trade table? 0:10:15.400 --> 0:10:23.880 Absolutely not, absolutely not, because again, the H twenty, while 0:10:24.000 --> 0:10:26.680 it is an advanced chip, is not one of the 0:10:26.720 --> 0:10:29.040 most advanced chip. I think if we were to think 0:10:29.080 --> 0:10:34.560 about the Nvidia stack, the HP would be something fourth 0:10:34.600 --> 0:10:40.319 fifth down the stack. And my understanding is that Huawei 0:10:40.720 --> 0:10:43.160 can produce something with similar advocacy. 0:10:43.480 --> 0:10:46.520 China's malicious behavior, even just in the past week, even 0:10:46.600 --> 0:10:49.640 targeting a commerce department employee, do you think they're doing 0:10:49.679 --> 0:10:53.080 this to have leverage with the United States? 0:10:53.440 --> 0:10:56.320 Well, I can tell you in Stockholm it's not going 0:10:56.360 --> 0:11:00.320 to give them any leverage with me. And it's a big, 0:11:00.360 --> 0:11:06.360 sprawling bureaucracy, and sometimes I think we may see the 0:11:06.480 --> 0:11:09.480 arrests may have been in a province, the central government 0:11:09.559 --> 0:11:12.040 may not be aware of it. So you know, I 0:11:12.040 --> 0:11:17.440 would highly doubt that something at that level they have 0:11:18.640 --> 0:11:22.280 wanted to engage with the US. We are engaging with 0:11:22.480 --> 0:11:25.200 them and I think both sides want to move forward 0:11:25.320 --> 0:11:26.520 in a productive way. 0:11:26.400 --> 0:11:27.760 But you'll raise these issues. 0:11:28.040 --> 0:11:32.559 Yes, So now that the administration is getting trade deals 0:11:32.559 --> 0:11:35.719 across the finish line Japan, Indonesia, Philippines yesterday, you say 0:11:35.760 --> 0:11:37.400 the European Union potentially in sight. 0:11:37.760 --> 0:11:39.520 Do you think the Federal. 0:11:39.200 --> 0:11:41.960 Reserve is going to have enough clarity by September to 0:11:42.000 --> 0:11:42.920 cut interest rates? 0:11:43.640 --> 0:11:46.800 Again, I'm not really sure what the Federal Reserve is 0:11:46.960 --> 0:11:52.520 looking at because thus far, we have not seen, or 0:11:52.559 --> 0:11:57.120 we've seen very little, if any price pressures from the tariffs, 0:11:57.400 --> 0:12:01.160 and if we were to see, those wouldn't be inflationary, 0:12:01.280 --> 0:12:05.920 be a one time price adjustment. So again, I think 0:12:05.960 --> 0:12:09.680 that their analysis of tariffs is a bit off. 0:12:10.000 --> 0:12:10.160 Well. 0:12:10.200 --> 0:12:13.800 Governor Waller made this exact case to us on surveillance 0:12:14.120 --> 0:12:17.920 on Friday, and it sounds like he might dissent at 0:12:17.920 --> 0:12:20.959 this meeting. He also said the President hasn't called him yet. 0:12:21.000 --> 0:12:23.240 He's one of these names that are circulating around. Could 0:12:23.320 --> 0:12:26.640 he replace FED chair J Powell? Is he a name 0:12:26.679 --> 0:12:28.760 you're looking at? Have you reached out to him? 0:12:29.040 --> 0:12:31.600 I think there are a lot of strong candidates, including 0:12:31.720 --> 0:12:37.200 several who are on the main board and perhaps regional 0:12:37.240 --> 0:12:38.120 bank presidents. 0:12:38.480 --> 0:12:42.480 So are there other names outside of Kevin Hassett, Kevin Walsh, 0:12:43.000 --> 0:12:45.520 Christopher Waller and you yourself has been circulating. 0:12:46.480 --> 0:12:49.960 There's a long list, and like I said, there's some 0:12:50.000 --> 0:12:50.880 great candidates. 0:12:51.240 --> 0:12:54.080 And have you reached out to everyone on both those lists. 0:12:54.520 --> 0:12:57.600 I'm not going to talk about the process, but we 0:12:57.880 --> 0:13:01.080 are getting the process underway. Obviously it's going to be 0:13:01.520 --> 0:13:06.040 President Trump's decision and we're not in a rush. 0:13:06.559 --> 0:13:07.840 So oh, you're not in a rush. 0:13:07.880 --> 0:13:09.800 But the President continuously says he wants to get rid 0:13:09.840 --> 0:13:13.560 of the FED chair J Powell. Mahmade Larian yesterday said 0:13:13.600 --> 0:13:14.439 he should resign. 0:13:14.920 --> 0:13:16.960 Do you think J. Powell should step down to protect 0:13:17.000 --> 0:13:17.560 the institution? 0:13:19.120 --> 0:13:19.840 Couple of things. 0:13:20.520 --> 0:13:23.480 One, the President said he is not going to fire 0:13:23.600 --> 0:13:28.680 Chair Palell. I was somewhat surprised that Muhammad al Arian 0:13:28.880 --> 0:13:32.000 came out and said that. And what I've come out 0:13:32.000 --> 0:13:35.360 and said is that I believe that it would do 0:13:35.559 --> 0:13:38.640 Chair Palell a favor, and he would be doing the 0:13:38.720 --> 0:13:45.480 institution of favor if he did an internal review. Separate 0:13:45.640 --> 0:13:49.600 monetary policy from everything else. And this is something that 0:13:49.679 --> 0:13:53.080 Larry Summers and I agree on, is this mission creep 0:13:53.200 --> 0:13:58.360 from the FED is endangering their independence of monetary policy. 0:13:58.480 --> 0:14:03.040 So all these other things they're engaging in could threaten 0:14:03.120 --> 0:14:09.160 monetary policy. So it is a big, sprawling institution. The 0:14:09.160 --> 0:14:14.720 central budget for the Board is up four x since 0:14:14.840 --> 0:14:21.120 two thousand and four, and every institution needs to examine themselves. 0:14:21.120 --> 0:14:21.800 But you want the. 0:14:21.800 --> 0:14:24.000 Man that you guys don't think is doing a good 0:14:24.120 --> 0:14:26.000 job to run that review. 0:14:26.920 --> 0:14:27.400 What's up? 0:14:27.720 --> 0:14:29.480 You want the man J Powell, which you and a 0:14:29.520 --> 0:14:31.480 president don't think is doing a very good. 0:14:31.400 --> 0:14:33.600 Job to run the review of the institution. 0:14:33.880 --> 0:14:37.880 Well, I think that it could be a committee, it 0:14:37.920 --> 0:14:42.400 could be a group. They could invite outside experts. In 0:14:43.440 --> 0:14:49.760 the Bank of England after the twenty twenty two rape hike, 0:14:49.880 --> 0:14:55.080 Shock went back and did a very good examination of 0:14:55.120 --> 0:14:59.440 what went wrong with monetary policy that brought in outside experts. 0:15:00.080 --> 0:15:02.440 You know, I think an internal review would be a 0:15:02.440 --> 0:15:06.320 good start, and if the internal review didn't look like 0:15:06.360 --> 0:15:09.160 it was serious, then maybe they could be an external review. 0:15:09.440 --> 0:15:12.640 Have you communicated this directly with J Powell? Do you 0:15:12.680 --> 0:15:17.880 guys continuously have your once a week breakfast lunches either 0:15:17.920 --> 0:15:18.960 at the Fed or the Treasury. 0:15:19.520 --> 0:15:23.479 I gave a speech on Monday night on Bank deregulation, 0:15:23.640 --> 0:15:27.760 bank regulation, the future of regulation, which is, aside from 0:15:27.800 --> 0:15:32.359 monetary policy, I think the most important thing for the economy. 0:15:32.800 --> 0:15:35.680 The FED is one of three regulators. There's the FED, 0:15:35.760 --> 0:15:38.720 the Office of Control of the Currency which sits under Treasury, 0:15:39.160 --> 0:15:45.600 and the FDIC. And I believe that all three of 0:15:45.680 --> 0:15:49.320 those should have important voices. And I believe that the 0:15:49.400 --> 0:15:53.840 regulation has been much too stringent. Since the Great Financial Crisis, 0:15:54.120 --> 0:15:57.400 we are seeing this big build up outside the regulated 0:15:57.480 --> 0:16:00.840 financial system. I think I saw something two days ago. 0:16:00.880 --> 0:16:05.400 The private credit is up ten XM not saying it's 0:16:05.400 --> 0:16:09.280 a financial stability problem, but I am saying that there's 0:16:09.320 --> 0:16:12.560 a regulatory arbitrage going on. But that was a long 0:16:12.600 --> 0:16:15.840 way of saying I saw a chair pale at that speech. 0:16:16.360 --> 0:16:19.560 And your lunches in breakfast continue always, so you have 0:16:19.600 --> 0:16:20.480 a good relationship with him. 0:16:20.480 --> 0:16:21.720 At the moment, we. 0:16:21.680 --> 0:16:23.120 Have continuing communication. 0:16:23.480 --> 0:16:25.640 Last time you were on, you also talked about the 0:16:25.680 --> 0:16:29.239 potential next FED chair. You said his or her nomination 0:16:29.920 --> 0:16:32.000 is Governor Bowman also in the running. 0:16:32.400 --> 0:16:35.000 Again I'm not going to name names, but. 0:16:36.480 --> 0:16:40.520 There are good candidates. As I said on the board 0:16:40.840 --> 0:16:45.440 at their several female regional bank presidents and then there 0:16:45.880 --> 0:16:49.440 are some fantastic women outside the FED. 0:16:49.680 --> 0:16:55.240 There's also Governor Kugler's chair that is open in January. 0:16:55.320 --> 0:16:58.240 Have you started that process. 0:16:58.280 --> 0:17:03.640 It's a simultaneous process. The Coogler chair is a fourteen 0:17:04.119 --> 0:17:09.760 year seat, so we'll be looking at that also. And again, 0:17:10.160 --> 0:17:12.679 I think we have some very good candidates. 0:17:12.200 --> 0:17:13.960 Given you just saw J. Powell. 0:17:14.000 --> 0:17:16.159 Has he yet to tell you whether or not he 0:17:16.280 --> 0:17:20.920 is going to leave the board his governor seat by 0:17:20.920 --> 0:17:22.040 before twenty twenty eight? 0:17:23.000 --> 0:17:27.359 He hasn't yet. My belief is that he will, and 0:17:27.480 --> 0:17:29.800 I think that it would be very good for the 0:17:29.840 --> 0:17:32.040 institution for him to do it, and I think it'd 0:17:32.040 --> 0:17:33.760 be very good for him personally to do it. 0:17:33.920 --> 0:17:36.520 The President once said that he goes out and rile's 0:17:36.560 --> 0:17:40.080 financial markets and then he sends you his Treasury secretary 0:17:40.119 --> 0:17:43.359 out to calm things. Things are pretty calm today. But 0:17:43.440 --> 0:17:45.479 when it comes to the FED chair, I know you 0:17:45.480 --> 0:17:47.920 love college basketball, and you talk about the president being 0:17:47.960 --> 0:17:51.919 Bobby Knight, and I know you love Dean Smith. Are 0:17:51.920 --> 0:17:54.320 you guys playing this good cop bad cop when it 0:17:54.359 --> 0:17:57.040 comes to talking about the FED talking about J. 0:17:57.200 --> 0:17:57.640 Powell? 0:17:58.680 --> 0:18:00.400 Not at all, Marie. 0:18:00.640 --> 0:18:04.120 The reason I think that I'm to the extent I'm 0:18:04.160 --> 0:18:07.600 able to calm the markets, and that doesn't always happen. 0:18:08.200 --> 0:18:11.720 I was in the investment business for thirty five forty years. 0:18:11.920 --> 0:18:15.320 But I think more importantly than that, I understand what 0:18:15.520 --> 0:18:19.480 President Trump is doing, and a lot of times he's 0:18:19.560 --> 0:18:24.480 one to three steps ahead of the market. And as 0:18:24.560 --> 0:18:28.919 you know better than anyone, the market wants instant explanations. 0:18:29.040 --> 0:18:35.640 They want they want clarity, they want immediate gratification. So 0:18:35.800 --> 0:18:39.600 I think that I am able to as a former practitioner, 0:18:39.960 --> 0:18:43.080 I think about when President Trump tells me what his 0:18:43.240 --> 0:18:46.200 goals are, I think about what is the best way 0:18:46.840 --> 0:18:50.560 for me to give good framing to market participants for 0:18:50.680 --> 0:18:55.160 them to understand what he's doing. Because he always has 0:18:55.200 --> 0:18:57.760 a plan, it's not always obvious. 0:18:58.359 --> 0:19:03.560 So you are communityating almost the strategic ambiguity that he 0:19:03.680 --> 0:19:05.280 likes to operate from well. 0:19:06.200 --> 0:19:10.919 And I'm also trying to explain that there is a 0:19:10.960 --> 0:19:17.360 plan because look, these letters went out, everyone was, oh 0:19:17.440 --> 0:19:21.320 my gosh, these are high rates, and I think the 0:19:21.359 --> 0:19:27.680 president created maximum negotiating leverage, and the market actually took 0:19:27.680 --> 0:19:30.400 it pretty well, took it pretty well. 0:19:30.800 --> 0:19:32.320 Just to finish on that final point, then, do you 0:19:32.359 --> 0:19:35.399 think he's more in boldened to go for higher rates 0:19:35.400 --> 0:19:39.040 with trading partners. Now, given the market is not pushing back. 0:19:39.200 --> 0:19:44.320 Well, I think he's created a lot of leverage because 0:19:44.680 --> 0:19:48.879 he's created an ab situation. He is able to go 0:19:48.920 --> 0:19:52.200 to the trading partners and say, look, I am happy 0:19:52.200 --> 0:19:54.640 to take in this tariff income if you don't want 0:19:54.680 --> 0:19:55.399 to negotiate. 0:19:55.760 --> 0:19:56.800 This is a high rate. 0:19:57.000 --> 0:20:00.840 But the US is taking a massive amount tariff income. 0:20:01.200 --> 0:20:08.080 We had the first June budget surplus since twenty fifteen 0:20:09.560 --> 0:20:13.560 last month. We reported it this month, and so we 0:20:13.600 --> 0:20:17.000 are taking in substantial income. So President Trump is creating 0:20:17.040 --> 0:20:20.080 this leverage by saying, if you don't want to negotiate 0:20:20.160 --> 0:20:23.359 with me, I've sent you a letter with a high rate. 0:20:23.760 --> 0:20:27.640 You have at the high rate, or come and negotiate 0:20:27.720 --> 0:20:31.080 in better fashion. Because I'll tell you what was fascinating 0:20:31.119 --> 0:20:34.080 for me, and this was President Trump at his best. 0:20:34.160 --> 0:20:38.560 At his best was the Indonesians came with what I 0:20:38.680 --> 0:20:42.920 thought was a very good offer out of the Blox. 0:20:43.680 --> 0:20:47.600 President Trump kept pushing them. He raised the reciprocal rate 0:20:47.840 --> 0:20:52.560 when he sent them the letter, and five iterations later, 0:20:52.880 --> 0:20:56.359 the Indonesian trade deal was greatly improved, turned into a 0:20:56.400 --> 0:20:58.320 great deal for both Sides. 0:20:58.320 --> 0:21:00.560 Secretary Scott Besson, Thank you so much for your time 0:21:00.640 --> 0:21:01.119 this morning. 0:21:11.320 --> 0:21:14.040 Jill Ford, co head of equity capital Markets for wels Fonco, 0:21:14.040 --> 0:21:16.280 expects activity to pick up in the second half of 0:21:16.320 --> 0:21:17.000 twenty twenty five. 0:21:17.080 --> 0:21:19.359 Joe joins us now for more joke and morning. Good morning. 0:21:19.480 --> 0:21:21.639 Market's wide open. Is it healthy? 0:21:21.880 --> 0:21:23.960 Is the kind of activity that you're across right now 0:21:24.040 --> 0:21:25.320 what you would describe as healthy? 0:21:26.400 --> 0:21:28.800 Well, I would say, you know, IPO volumes have certainly 0:21:28.800 --> 0:21:31.120 been lackluster for the first six months of this year, 0:21:31.160 --> 0:21:34.800 particularly contrasted versus all the expectations post the election late 0:21:34.880 --> 0:21:38.240 last year. We are starting to see signs of life 0:21:38.240 --> 0:21:42.160 within the equity capital markets, and particularly with IPOs. They 0:21:42.200 --> 0:21:45.919 are pricing well, they're trading well, buyers are making money. 0:21:46.080 --> 0:21:49.639 They're looking outwards now as we get more clarity with 0:21:49.680 --> 0:21:52.720 these with these tariff deals, they're looking for new ideas 0:21:52.760 --> 0:21:55.399 as opposed to hunkering down and trading what they know, 0:21:55.800 --> 0:21:58.200 and that's really really healthy for the IPO market. 0:21:58.520 --> 0:21:59.680 So I'm optimistic. 0:21:59.760 --> 0:22:03.480 There are lots of IPOs coming. Many IBOs came in June, 0:22:03.640 --> 0:22:06.000 there are many more coming in July, and the fall 0:22:06.080 --> 0:22:07.440 is looking pretty good as well. 0:22:07.240 --> 0:22:09.440 The typical lifespan of a company is obviously shifted. They're 0:22:09.440 --> 0:22:11.920 staying private for a whole lot longer. Can you describe 0:22:11.920 --> 0:22:14.159 to us as to why why they're not going public? 0:22:14.280 --> 0:22:16.280 Are they push factors or pull factors? You just see 0:22:16.320 --> 0:22:19.080 people sucked into private markets and stank there because the 0:22:19.119 --> 0:22:21.000 options available to them are so good. 0:22:21.480 --> 0:22:23.560 You know, a lot of it is driven by the 0:22:23.560 --> 0:22:26.840 companies that own them, the private equity sponsors. They are 0:22:27.080 --> 0:22:30.320 very unemotional about when they sell things. They want to 0:22:30.359 --> 0:22:33.200 sell at full value. They want to realize the full 0:22:33.280 --> 0:22:35.760 value that they that they deserve for their assets. And 0:22:35.800 --> 0:22:40.840 when IPO markets have larger than normal IPO discounts, they're 0:22:40.840 --> 0:22:42.840 going to sit back and say, what are my other options? 0:22:42.880 --> 0:22:45.919 And there's lots of options for treading water. I can 0:22:45.960 --> 0:22:48.560 give you a whole list of ways that private equity 0:22:48.680 --> 0:22:51.879 firms have decided to keep their companies private longer. The 0:22:51.880 --> 0:22:54.480