Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
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Speaker 2: Terminal and the Bloomberg Business app. We begin with our
Speaker 2: top story stocks on pause, with all eyes on Jackson
Speaker 2: Hole traders looking for ray cut clues from fed share
Speaker 2: Jay Powell when he speaks tomorrow, Muhammad al Erin of
Speaker 2: Queen's College, Cambridge, saying the stakes are high, writing in
Speaker 2: a Bloomberg opinion piece quote, it is critical for Powell
Speaker 2: to take advantage of the golden opportunity he has this
Speaker 2: Friday to regain control of the economic and policy narrative.
Speaker 2: Muhammed joins us now from more Mohammed, good morning.
Speaker 3: It's good to see you.
Speaker 4: Good morning, John.
Speaker 2: Thanks for that is for the next ninety minutes, so
Speaker 2: We've got plenty of time to work through these issues.
Speaker 2: I went through the piece on Bloomberg Opinion, pretty extensive,
Speaker 2: and a long list of ours for Chairman Power Tomorrow.
Speaker 2: I'm going to go through another quote that you wrote.
Speaker 2: It is particularly critical that people come away from Wyoming
Speaker 2: with a clearer picture of the new equilibrium policy rate
Speaker 2: that neither restraints nor fuels economic activity, the path to
Speaker 2: that rate, and what a sustainable two percent inflation target
Speaker 2: means in practice. Now that's what you want you expecting
Speaker 2: to get it this week.
Speaker 3: I hope I'll get one of those three, if not two, John.
Speaker 3: It is critical because, as you and Danny have been
Speaker 3: discussing this morning, it's not just about price volatility. It
Speaker 3: has been narrative volatility. People have moved violently in terms
Speaker 3: of their narrative of the economy in terms of what
Speaker 3: the FED should do on the basis of high frequency
Speaker 3: noisy data, and that tells you that we're lacking anchors
Speaker 3: in this economy. We're lacking a robust growth anchor, lacking
Speaker 3: a robust policy forward guidance, and we're lacking a robust
Speaker 3: technical anchor. So we should hope for the fair to
Speaker 3: start restoring the policy anchor. The way you do that
Speaker 3: is you tell people where you see the destination and
Speaker 3: how you think you're going to get there. That's what
Speaker 3: I think he should do. Whether he does or not,
Speaker 3: I'm not sure. Well, let's talk about what complicates it.
Speaker 3: The second anchor, forward guidance. You yourself, this is your
Speaker 3: language and your pace. You call it an ocean of
Speaker 3: genuine uncertainty. How do you provide forward guidance in an
Speaker 3: ocean of genuine uncertainty? The same way we do everything
Speaker 3: in life is that you say, this is where I
Speaker 3: think it is right now. This is why I think
Speaker 3: our star is as opposed to saying I'm not going
Speaker 3: to talk about it. This is why I think it is.
Speaker 3: It is dependent on these variables, and I will modify
Speaker 3: it if in mid course correction is needed.
Speaker 5: Do you think it's important that they discuss how they
Speaker 5: view the size of cuts, how they view twenty five
Speaker 5: versus fifty basis points?
Speaker 3: I think it is important, but the second order importance,
Speaker 3: So the first one is what is the destination look like?
Speaker 3: And secondly, how are we going to get there? It
Speaker 3: is problematic in my mind that the market is pricing
Speaker 3: in so many weight cuts right now, and Danny said
Speaker 3: it right this morning, is that there's this contrast between
Speaker 3: what the bond market thinks and what the equity market thinks.
Speaker 3: And this notion, and I love the way both of
Speaker 3: you have framed it of a hard landing policy response
Speaker 3: to achieve a soft landing that has got to be
Speaker 3: reconciled one way or the other. So I think the
Speaker 3: problem the market is overdoing it. I don't think we're
Speaker 3: going to get two hundred basis points of cuts in
Speaker 3: twelve months. I don't think we're gonna get a hundred
Speaker 3: basis point of cuts this year. I think we're going
Speaker 3: to get seventy five and one hundred and fifteen total.
Speaker 3: But the market is going to have to adjust at
Speaker 3: some point.
Speaker 5: A few people looked at the minutes that WILL released yesterday,
Speaker 5: and so the fact that several of them discussed cutting
Speaker 5: in July, maybe is them implicitly realizing that they are
Speaker 5: behind and that they need to be more. Did you
Speaker 5: come away with that from with the same idea.
Speaker 3: So when I read the notion that several several, not
Speaker 3: some several thought that in July cut was plaus and
Speaker 3: I thought to myself, what about the press conference? What
Speaker 3: happened in the press conference? Why didn't we hear that?
Speaker 3: And then when I heard both of you discuss the
Speaker 3: fact that a lot of people are discussing is are
Speaker 3: the minutes massage in some way after the meeting to
Speaker 3: reflect what has happened, since we won't know until we
Speaker 3: get the transcripts. Okay, but it is interesting that they
Speaker 3: put that in the minutes.
Speaker 2: Well, there's two options. Either the fedschaed does allows each
Speaker 2: job of reflecting consensus in the news conference, or they
Speaker 2: massage the minutes. You're quite critical, more critical than me
Speaker 2: of this federal reserve, poor forecasting, confusing communication, and lapses
Speaker 2: in bank regulation as well across those three things, and
Speaker 2: you think that maybe this could have some really large consequences.
Speaker 2: There's a quote in this piece that jumped off the
Speaker 2: page to me, Mohammad. The FED could further risk, damaging
Speaker 2: its policy effectiveness and reputation, and countries around the world
Speaker 2: would look for more ways to de risk both their
Speaker 2: economies and their financial systems from a FED that no
Speaker 2: longer responsibly anchors what is still a dollar dominated international
Speaker 2: monetary system. Now that's not something you just write lighthearted
Speaker 2: that's not just you sort of writing that down and
Speaker 2: expecting us to ignore it. That's important. Do you think
Speaker 2: that's what's a risk here?
Speaker 3: I do, and I really worry about it. John, The US,
Speaker 3: at the core of the system, has been able to
Speaker 3: inform and influence outcomes all over the world, and it
Speaker 3: has been able to lead policy coordination where needed. Why
Speaker 3: Because the US seem to be a responsible steward of
Speaker 3: the global economy that started to be undermined in two
Speaker 3: thousand and eight, it was undermined even more in twenty seventeen,
Speaker 3: has been undermined even more in twenty twenty one twenty
Speaker 3: two with the transitory inflation mistake. And what we're seeing
Speaker 3: is are people starting to hedge away from the dollar.
Speaker 3: Look at the price of gold, record after record after record,
Speaker 3: Look at central bank buying of gold around the world.
Speaker 3: They're divers flying away from the dollar. So I do
Speaker 3: worry that unless we gain policy credibility, that you're going
Speaker 3: to start seeing the system fragment, not just for geopolitical reasons,
Speaker 3: which we know is fragmenting, but fragmenting because there's less
Speaker 3: trust in the way the system is managed.
Speaker 2: Well, that's why I actually wanted to ask you when
Speaker 2: that exactly where I wanted to go. Is that driven
Speaker 2: by one half of day, say, or the other or both?
Speaker 2: And how much of it is driven by one and
Speaker 2: maybe not the other, because in my mind another paper's minds,
Speaker 2: they might be listening to this and saying, well, that's
Speaker 2: about sanctions, that's coming from the government, that's coming from
Speaker 2: outside of the world of monetary policy. How much of
Speaker 2: it is about that versus say, the things we're talking
Speaker 2: about right now.
Speaker 3: We have never seen the amount of volatilating the two
Speaker 3: year that we have seen recently. The two years supposed
Speaker 3: to be anchored by the FED forward policy guidance. The
Speaker 3: longer end can do all sorts of things, but at
Speaker 3: least you know the which the two to five year,
Speaker 3: lots and lots of stuff gets fries off that internationally
Speaker 3: and it has been a roller coaster. So jaeopolitics has
Speaker 3: a big influence. But what we have to minimize is
Speaker 3: giving you another reason for PEP to diversify away from
Speaker 3: the system, because they're diversifying not to another system, they're
Speaker 3: diversifying to fragmentation. They're diversifying to a system that builds
Speaker 3: little pipes around the center and doesn't solve as well
Speaker 3: as it should otherwise, and the world will suffer as
Speaker 3: a result.
Speaker 5: The things you're talking about, they are structural changes that
Speaker 5: central banks are undergoing. And I just wonder if Powell
Speaker 5: is able to wrestle back control, if government concerned doesn't
Speaker 5: erode it further. Can it be undone or is this
Speaker 5: point we're at, has the damage already been done and
Speaker 5: you basically can't put the pace back in the tube.
Speaker 3: So I think the economic side can be undone. You
Speaker 3: can go back, You can put the pace back into
Speaker 3: the tube. As you said it, it's a matter of
Speaker 3: being somewhat less backward looking and having the courage to
Speaker 3: be strategic as well. We are excessively data dependent. In fact,
Speaker 3: the FED being excessively data but dependent has led the
Speaker 3: analyst community to be excessive data dependent. Look at how
Speaker 3: probabilities are recession have moved on high frequency, noisy data
Speaker 3: that shouldn't happen, you said earlier, jobless claims has suddenly
Speaker 3: become this incredible number. Anybody who has been following that
Speaker 3: series for a long time knows it is incredibly noisy,
Speaker 3: and yet it can turn markets, and it can turn narratives.
Speaker 5: Are you confident the federal change though, I mean the
Speaker 5: language that we've heard it still is one of data dependents.
Speaker 5: It still is one of looking for the next payrolls
Speaker 5: print to try to get an idea of where they
Speaker 5: should go. How much confidence do you have that they'll
Speaker 5: actually adopt what you're recommending?
Speaker 3: And the word confidence is so important because it's in
Speaker 3: every FED narrative the word confidence. My confidence is growing.
Speaker 3: I mean they are now willing to shift their focus
Speaker 3: on both elements of their mandate. I think a little
Speaker 3: bit worried that the market has forgotten about the inflation
Speaker 3: part of the mandate and the market is only worried
Speaker 3: about the employment part. So I think they're a little
Speaker 3: bit worried about that, but they're willing to shift the man.
Speaker 3: I think they're going to get that. I think they're
Speaker 3: getting more confidence now that inflation is below three percent
Speaker 3: on this CPI, and I know that that's not what
Speaker 3: they look at, but that's what everybody else looks at.
Speaker 3: So I think they're gaining more confidence. So I am, too,
Speaker 3: gaining confidence that they're going to be able to get
Speaker 3: out of this phase of excessive data dependence that were
Speaker 3: caused by the big policy mistaken.
Speaker 2: Twenty twenty one, Victoria Fernandez of Crossmark Global Investments joined us. Victoria,
Speaker 2: last time we caught up, you were worried about a
Speaker 2: slowdown in the second half. Are you seeing evidence of
Speaker 2: that or evidence to the country.
Speaker 4: Now.
Speaker 6: I think we're still looking at signs that are telling
Speaker 6: us a slowdown could be coming. I know that the
Speaker 6: idea of a recession has really been taken off the
Speaker 6: table for most people, but I think a slowdown in
Speaker 6: the economy is there. I mean, look, you've got small
Speaker 6: caps outperforming large yesterday, but yet forty percent of the
Speaker 6: wrestle two thousand hasn't even.
Speaker 7: Had a profit.
Speaker 6: They haven't reported a profit over the last twelve months.
Speaker 6: You've got the difference between the two year and the
Speaker 6: FED funds at extreme levels typically that you only see
Speaker 6: when you're in a recession. You have saving rates coming
Speaker 6: down while delinquencies are going up. We know the consumer,
Speaker 6: even though they're spending or being very cautious and what
Speaker 6: they're spending.
Speaker 7: And I think when we look at the.
Speaker 6: Labor market and wages and earnings and margins for corporations,
Speaker 6: we could see that start to tighten up a little bit,
Speaker 6: and I think a good sign.
Speaker 7: You were just talking about the housing market.
Speaker 6: Mortgage rates are down eighty basis points and we aren't
Speaker 6: even seeing a bump in the housing market. We've seen
Speaker 6: refies go up applications, but not home buyers. So I
Speaker 6: still think there's some struggling going on in this economy,
Speaker 6: and I think we'll continue to see it in the
Speaker 6: second half of.
Speaker 2: The year, enough of a struggle to validate what's been
Speaker 2: priced into Federal Reserve rate cut expectations.
Speaker 6: Look, the Fed, in my opinion, is going to go
Speaker 6: very slowly. So your last guest talked about two rate
Speaker 6: cuts this year. That's where wes mark are as well.
Speaker 6: Twenty five in September, twenty five in December. I don't
Speaker 6: think they're going to go more than that, which means
Speaker 6: we may see a little bit of a repricing in
Speaker 6: the bond market. Two years you were just mentioning a
Speaker 6: rite back up close to four percent. We could see
Speaker 6: yields start to go back up as some of that
Speaker 6: is priced out of the market, some of the cuts
Speaker 6: people are expecting. I mean, what are they pricing in
Speaker 6: now three and a half four cuts.
Speaker 7: It's similar to what we saw.
Speaker 6: At the beginning of the year when everyone was expecting
Speaker 6: five or six, they had to come back and reprice
Speaker 6: the market. So in our fixed income portfolios, we've gone
Speaker 6: close to neutral duration.
Speaker 7: We're not ready to go long yet at this point.
Speaker 5: Victoria's a said that goes slow with data that's getting
Speaker 5: weaker but not necessarily weak. Is that also consistent with
Speaker 5: gold priced twenty five hundred dollars an ounce?
Speaker 6: You know, it's very interesting data because you're seeing this
Speaker 6: differentiation coming now between gold and bitcoin, where they had
Speaker 6: been going together for quite a long period of time.
Speaker 6: So I think people are going to You're seeing the
Speaker 6: dollar come down. I know it had a little bit
Speaker 6: of a bounce yesterday, but the dollars down pretty significantly.
Speaker 6: If the Fed is starting to lower rates, we'll see
Speaker 6: that happen more so people going into gold for a
Speaker 6: safe haven play.
Speaker 7: And we're seeing a lot of gold buying coming out
Speaker 7: of Asia as well.
Speaker 6: So not surprised gold is moving higher, not surprised we're
Speaker 6: seeing the dollar come down. I think that fits with
Speaker 6: a story of a FED slowly removing some of the
Speaker 6: tightness that's there. I think one of the things I
Speaker 6: like to say is the FED is not really being
Speaker 6: a commodative over the next few months.
Speaker 7: I think they're just going to be less restrictive.
Speaker 5: I just wonder what you think the success is in
Speaker 5: doing that. As using gold as a hedge. David Rosenberg
Speaker 5: at Rosenberg Research Things, he's it's going to go to
Speaker 5: three thousand simply because people don't trust bonds as a
Speaker 5: hedge right now. They don't trust central bank policy, they
Speaker 5: don't trust the guidance. So gold is where you hide out, Victoria.
Speaker 5: Gold hasn't had the best track record of being the
Speaker 5: place that you can hold out over long periods of time,
Speaker 5: So is it now the time? Can now be the
Speaker 5: time that you can you can hold on to Gold
Speaker 5: is something that protects you instead of something like bonds.
Speaker 6: So it hurts my heart a little bit, Danny when
Speaker 6: you say people don't like bonds, because I do manage
Speaker 6: taxable fixed income here at Crossmark, So I think you
Speaker 6: need to have some allocation to bonds in your portfolio. Look,
Speaker 6: it's a cash flow component, right, So maybe it's not
Speaker 6: a safe haven in the sense that from the time
Speaker 6: of purchase to the time of maturity, you don't.
Speaker 7: Have market value volatility.
Speaker 6: You will but you get a steady cash flow coming
Speaker 6: from that. Is it okay to have a little bit
Speaker 6: of gold as a hedge in your portfolio. I think
Speaker 6: that's fine. Do you do a huge allocation shift to that.
Speaker 6: I think that's a little much. I don't think there's
Speaker 6: anything in the economy that's telling us we have to
Speaker 6: make that drastic of a move.
Speaker 2: There is one thing that you've been saying, though, that
Speaker 2: runs contrary to what we've heard from a lot of
Speaker 2: people in fixed income, and I understand they've got something
Speaker 2: to sell. So there is sort of a bias in
Speaker 2: all of this too. You're still saying that just sit
Speaker 2: there and learn cash, earn money on cash, sit there
Speaker 2: at the front end, take you five percent, Victoria. Other people,
Speaker 2: as you know, are coming on the program, is saying
Speaker 2: you've got to lock in what's available at the long
Speaker 2: end right now, because that's not going to be there
Speaker 2: in several months time. Why's your approach a little bit different?
Speaker 6: Well, I think they need to look at it from
Speaker 6: a Barbell approach, Jonathan. I mean, look, yes, you can
Speaker 6: get some of that locked in on the short end.
Speaker 6: We know the Fed's going to lower rates. We talked
Speaker 6: about the difference between the two year and the FED
Speaker 6: funds being quite extreme.
Speaker 7: That's going to have to narrow.
Speaker 6: At some point. So do the short end of the curve,
Speaker 6: do those yields come down? Yes, so you get in now,
Speaker 6: you get a little bit of price appreciation in that
Speaker 6: because you will have lower yields going forward, So lock some.
Speaker 4: Of that in.
Speaker 7: But I agree, go out a little bit on the curve.
Speaker 7: Add some of that on the longer end.
Speaker 6: If you can still get four four and a half
Speaker 6: five percent in quality investment grade we're talking a double
Speaker 6: A rated not even having to go into triple B
Speaker 6: rated bonds, go ahead and put that in there as well. Again,
Speaker 6: it's part of that cash flow story and sets you up,
Speaker 6: especially if you're trying to match liabilities with the assets
Speaker 6: in your portfolio, and puts you in a good place
Speaker 6: the next five to seven years.
Speaker 5: Detoria, I've also got to ask you, because I know
Speaker 5: you see wages and how it relates to consumption as
Speaker 5: one of the canaries in the coal mine for this economy.
Speaker 5: Given that, what did you make of some of these
Speaker 5: retail earnings we've gotten the success of a target and
Speaker 5: the lack of it for someone like Macy's.
Speaker 6: It's an interesting kind of bifurcation that we're seeing. Obviously,
Speaker 6: Walmart did really well. I think some of the reason
Speaker 6: you're seeing a name like Walmart do well is because
Speaker 6: they have captured a much.
Speaker 7: Larger audience than they used to have.
Speaker 6: We know that a lot of high income spenders have
Speaker 6: actually moved into Walmart, so they're gaining traction there.
Speaker 7: Target was interesting. We know that they're comps.
Speaker 6: They have pretty easy comps because they have been underperforming
Speaker 6: for quite a long period of time. Glad to see
Speaker 6: them coming back. You're seeing better pricing in some of
Speaker 6: those elements. I know they said clothing was up, so
Speaker 6: that's good, and they also had a big boost from
Speaker 6: e commerce, so again different elements that are helping support.
Speaker 6: But Macy's been struggling for a while. They are that
Speaker 6: middle income consumer that is really having to pull back
Speaker 6: on discretionary spending as some of their more non discretionary
Speaker 6: items like food continue to move higher. So definitely a
Speaker 6: bifurcation that we're seeing in retail. Some of your low
Speaker 6: cost providers are gaining share and doing better, while that
Speaker 6: middle income consumer store is really starting to struggle.
Speaker 7: It does come down to wages. Wages is the driver of.
Speaker 6: Consumption, and I think as we see margins start to
Speaker 6: compress and earnings start to come down a little bit
Speaker 6: in the next six months or so, we can see
Speaker 6: wages start to stagnate.
Speaker 7: That's going to hurt the consumer.
Speaker 2: Why did you allat us go to a Macy's, Victoria?
Speaker 2: How long ago was it?
Speaker 7: It's been a while, We'll say.
Speaker 6: I've been to Bloomingdale's across the street from you guys,
Speaker 6: but Macy's. It has been quite a few years since
Speaker 6: I have stepped foot into Macy's. And it's probably why
Speaker 6: they're closing a lot of their stores right now.
Speaker 2: Yeah, Bloomdale so close you can accidentally fall into it
Speaker 2: walking down Avenue.
Speaker 4: I get it. I get it.
Speaker 2: It's convenient, Victoria, Thank you, Victoria Fernandez cross my global investments,
Speaker 2: I feel the same. It's local.
Speaker 4: Oh.
Speaker 2: For the DNC in Chicago, the main event coming this
Speaker 2: evening with a keynote addressed from the Vice President Kamala
Speaker 2: Harris at the DNC is am Marie AMH.
Speaker 4: Kibonic.
Speaker 8: Good morning, John, And ahead of that keynote address from
Speaker 8: Kamala Harris, where we know the economy has been the
Speaker 8: top ish of this election. I'm now joined by the
Speaker 8: chairman of the Senate Finance Community, senior Senator from Oregon,
Speaker 8: Senator Ron Wyde, and thank you so much for joining.
Speaker 4: Me, Thanks for having me so sing.
Speaker 8: Your colleague, Senator Mark Warner called next year twenty twenty
Speaker 8: five tax armor, Geddon and you've been working already on
Speaker 8: tax issues. Where do you see room for compromise in
Speaker 8: twenty twenty five.
Speaker 1: Well, first of all, we showed in twenty twenty four
Speaker 1: we wanted a bipartisan approach. You know, I put together
Speaker 1: a build out, a child tax credit and hundreds of
Speaker 1: thousands of units of house and help for small business
Speaker 1: and senior Republicans just didn't want to do it. I mean,
Speaker 1: the fact was jd Vance wouldn't even show up for work.
Speaker 1: So we had a bill that was fully paid for
Speaker 1: according to the Joint Committee on Taxation, would have been
Speaker 1: a big shot in the arm for family sixteen million
Speaker 1: kids would have been helped, four million small businesses, and
Speaker 1: Republicans were just day long.
Speaker 4: Well.
Speaker 8: Jd Vance was campaigning at the time, and even many
Speaker 8: Democrats would say this was a show vote. They knew
Speaker 8: they didn't have the votes yet Republicans want to wait
Speaker 8: till twenty twenty five. So that is why I think
Speaker 8: he would say he didn't.
Speaker 4: Show up for that.
Speaker 1: I understand that if he had been there, if he'd
Speaker 1: shown up, we could have gotten this past.
Speaker 4: It would have gone to the President. Would have been
Speaker 4: a huge shot in the arm to the economy.
Speaker 1: You know, we're talking about interest rates now looks like
Speaker 1: the Fed's going to lower interest rates. This is something
Speaker 1: that would really help families, because you got to understand
Speaker 1: that working families when they get these kind of kind
Speaker 1: of breaks, they go out and buy food and clothing
Speaker 1: and the like. What do the Republicans want to do?
Speaker 1: They want class war on working people. They want to
Speaker 1: hit them with tariffs, and tariffs are taxes on them.
Speaker 8: Okay, so let's talk about what colotentially be renegotiated for
Speaker 8: next year. We know Republicans will sign on for an
Speaker 8: expansion of child tax credit. Jay Vans Trump, I believe
Speaker 8: in that. What about the corporate tax? Kamala Harris is
Speaker 8: twenty eight percent? Look, do you think that's the opening salvo.
Speaker 1: Let's remember that the Republicans consistently in campaigns talk about
Speaker 1: things that they are going to say their interest in
Speaker 1: for working people, and then they go out and write
Speaker 1: these bills that are trickled down economics and give most
Speaker 1: of the breaks to the will to do. Now, let's
Speaker 1: talk about where we are on things like corporate taxes.
Speaker 1: I want to make sure that we have a reasonable
Speaker 1: rate that's going to allow us to compete in tough
Speaker 1: global markets. We know this is a challenging economy. This
Speaker 1: twenty one percent Donald Trump pulled out of nowhere. Nobody
Speaker 1: had any discussion about that in the Senate Finance Committee.
Speaker 1: And I can tell you a lot of my colleagues
Speaker 1: on both sides of the aisle, including some Republicans, they
Speaker 1: don't think the twenty one percent fits are definition of
Speaker 1: a reasonable rate.
Speaker 4: So what do you think is reasonable?
Speaker 1: I think that Western civilization isn't going to end with
Speaker 1: Kamala Harris's proposals. We're going to work in the committee
Speaker 1: to get a reasonable rate and one that will keep
Speaker 1: our companies competitive.
Speaker 8: Okay, So that sounds to me maybe like twenty five percent,
Speaker 8: which I've been hearing as something maybe there could be
Speaker 8: a negotiation around twenty five percent.
Speaker 1: There was a lot of interest in twenty five percent
Speaker 1: rate tied to increased opportunities to do business in the
Speaker 1: United States.
Speaker 4: Look at the big pharmaceutical companies.
Speaker 1: They generate a lot of their sales in the United States,
Speaker 1: you know, a lot of senior citizens, and then it
Speaker 1: go overseas to get a cheap tax break.
Speaker 8: Let's talk about American business. Part of Kamala Harris's economic
Speaker 8: plan has been this idea about price gouging, going after
Speaker 8: these individuals in the corporate world that are hiking up prices,
Speaker 8: and many are viewing that as potentially is this going
Speaker 8: to usher in price controls? What is your take on
Speaker 8: this issue and can you name a company that is
Speaker 8: currently price gouging.
Speaker 1: I'm glad you asked about this because I think the
Speaker 1: Vice President's moving in the right direction.
Speaker 4: We believe in markets.
Speaker 1: I'm the chairman of the Senate Finance Committee. I believe
Speaker 1: in markets. I believe in marketplace for since that's always
Speaker 1: the best way to go. But when markets are breaking down,
Speaker 1: you need some guardrails, and that is what the Vice
Speaker 1: President is talking about.
Speaker 4: Now I'm going to be going home.
Speaker 1: We're going to be flying all night to have town
Speaker 1: hall meetings in rural Oregon. You know what folks are
Speaker 1: going to ask me about They're going to ask me
Speaker 1: about the biggest grocery merger in American history, you know,
Speaker 1: Kroger's and Albertsons.
Speaker 4: Do you think it should go through?
Speaker 1: Well, what I've said is, I think we ought to
Speaker 1: kind of take a time out. I've been part of
Speaker 1: the effort with congress Woman Jayapaul to say let's have
Speaker 1: kind of a recall on this decision for a while and.
Speaker 4: Think through how to come up with a fair agreement.
Speaker 1: But what I can tell you is, when you know
Speaker 1: milk is four dollars a gallon and a lot of
Speaker 1: places meet ten dollars a pound, a lot of people
Speaker 1: are saying, get us a fair shake. And the concentration
Speaker 1: and consolidation we've seen in these food markets, I think
Speaker 1: is what we got to deal with.
Speaker 8: But prices have come down, Walgreen's Target, all these places,
Speaker 8: Walmart slashing their prices. They see hiring consumers actually trading
Speaker 8: down to some of their softer prices, and that was
Speaker 8: welcomed by the White House. Isn't this all caused by inflation,
Speaker 8: not corporate greed?
Speaker 1: Well, certainly we're coming out of COVID. There are a
Speaker 1: bunch of factors, but what I can tell you in
Speaker 1: my state, we're losing choices. For example, even for buying medicine.
Speaker 1: You know, we have only a couple of big pharmacies
Speaker 1: now they consolidate, and that's anti consumer. I'm a market's
Speaker 1: oriented democrat. I want to come back to that, but
Speaker 1: I think when markets aren't going very well, we need
Speaker 1: to have some guard rails and make sure we protect
Speaker 1: the consumer center.
Speaker 8: Ron Widen, thank you so much for Jim for joining
Speaker 8: Bloomberg TV.
Speaker 4: Jonathan.
Speaker 8: Of course, he's also the chairman of the Senate Finance Committee.
Speaker 8: He will be key to next year's twenty twenty five
Speaker 8: tax fate.
Speaker 2: I have no idea the people of Oregon with that
Speaker 2: interest in anti trust and competitive issues.
Speaker 4: Amra, Thank you.
Speaker 2: Mh Aver in Chicago. This is the Bloomberg Surveillance podcast,
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