Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the
Speaker 1: top stories in the coming week from our Daybreak anchors
Speaker 1: all around the world. Just to him of the program,
Speaker 1: here comes the big gathering at Jackson Hole. I'm John
Speaker 1: Tucker in New York. I'm Stephen Carlin Londoner Pratization by
Speaker 1: the UK's energy regulator in the coming days will help
Speaker 1: tell us how high inflation is likely to go later
Speaker 1: this year. I'm Bryan Curtis in Hong Kong. Is inflation
Speaker 1: near peaking in South Korea? I'm Amy Morris in Washington.
Speaker 1: The White House has had a few political wins. Will
Speaker 1: that move the needle with goods? That's all straight ahead
Speaker 1: on Bloomberg Daybreak Weekend on Bloomberg eleven three O, New York,
Speaker 1: Bloomberg one, Washington d C, Bloomberg one oh six one, Boston,
Speaker 1: Bloomberg nine sixties, San Francisco, d A B, Digital Radio, London,
Speaker 1: Sirius x M one nineteen and around the world on
Speaker 1: Bloomberg Radio dot com and via the Bloomberg Business at Everybody.
Speaker 1: I'm John Tucker. Let's start today's program with becoming annual
Speaker 1: gathered in Jackson Hole that officially he kicks off this
Speaker 1: coming Thursday. Blumber Global economics policy er Mike McKee is
Speaker 1: among those going and he joins us now for some insights.
Speaker 1: So you're gonna say it's really important this year because
Speaker 1: you're going, it's important ever justified your trip for for
Speaker 1: for people who don't know, we're not talking about going
Speaker 1: to do some early skiing or you know, fly fishing.
Speaker 1: This is a symposium of sorts. We might have some fishing.
Speaker 1: This is the Kansas City fat To Annual Economic Symposium.
Speaker 1: Started back in moved to Jackson Hole in one I believe,
Speaker 1: and has been going on ever since. Uh, they did
Speaker 1: a virtually the last couple of years. So this is
Speaker 1: a return to Jackson Lake Lodge in Grand Teton National Park.
Speaker 1: It's central bankers and academic economists from all over. They
Speaker 1: present like really boring papers nobody understands, and then there's
Speaker 1: like a few highlights where they say stuff that could
Speaker 1: move markets potentially. Well, if I were going to be honest,
Speaker 1: I totally agree with you. I don't think anybody there
Speaker 1: would say that their papers that people don't understand, because
Speaker 1: all those people understand it. There is a misconception about
Speaker 1: Jackson Hole that it is someplace where central bankers come
Speaker 1: to discuss the issues that face them and figure out
Speaker 1: how they're going to attack them. It's really an academic conference.
Speaker 1: Papers are submitted on topics related to monetary policy, and
Speaker 1: people do sort of exploratory work that sets the stage
Speaker 1: for thinking about ways to do things. But the average
Speaker 1: person probably would not if you don't have an economics
Speaker 1: theree would not understand a lot of it. Uh. And
Speaker 1: it is not as dramatic or exciting as people make
Speaker 1: it out to be. But by tradition, every year the
Speaker 1: FED Chairman gives a keynote address, and most years it
Speaker 1: falls under the category of nice to see you, glad
Speaker 1: you're all here. This is a really important topic. But
Speaker 1: a couple of times, most notably with Ben burn Anki
Speaker 1: during the Great Financial Crisis, he laid out strategies for
Speaker 1: the FED uh in monetary policy to deal with a
Speaker 1: financial crisis. And there is a hope or a feeling
Speaker 1: or a thought that J. Powe might do something similar
Speaker 1: at this meeting on Friday. Okay, where are we right
Speaker 1: now with the economic data? I mean, there's all sorts
Speaker 1: of speculation fifty or seventy five basis points at the
Speaker 1: next FEDER Reserve meeting that's coming up, what in September
Speaker 1: um And yet we've got this data that seems to
Speaker 1: indicate the rate of inflation may be slowing at this point.
Speaker 1: So I'm kind of wondering has the FED done its
Speaker 1: job or inflation data that we're getting is working against
Speaker 1: the Fed. There's a message that j Pal is going
Speaker 1: to want to deliver if he's going to talk about
Speaker 1: things like that, is that no, we're not anywhere near
Speaker 1: close to done yet. Uh. The markets took the idea
Speaker 1: that they could do fifty basis points in seven instead
Speaker 1: of seventy five, which was just laid out as a
Speaker 1: kind of a talking point by Jay Paula in July.
Speaker 1: They took it as a sort of a hint that
Speaker 1: the FED was going to pivot, and they look at
Speaker 1: some of the slowing economic data and they say, well,
Speaker 1: the Fed's gonna have to back off and next year
Speaker 1: they're gonna have to cut rates, and that's not gonna happen.
Speaker 1: The FED is committed to keeping infest rates higher for
Speaker 1: longer to make sure that inflation is squeezed out of
Speaker 1: the economy. So if you know what I mean, that
Speaker 1: the data that we recently got is that because of
Speaker 1: FED policy or because of something else. I mean, do
Speaker 1: you know when it's the policies working and done. That's
Speaker 1: part of the problem if you're a policy maker. You
Speaker 1: don't have real time confirmation because all the economic data
Speaker 1: is by nature backward looking, so you're trying to extrapolate
Speaker 1: from what you see and figure out what that means six, eight, ten,
Speaker 1: twelve months down the road. Now, we've seen inflation ease
Speaker 1: up a little bit one month's data, and a lot
Speaker 1: of that had to do with energy prices, and energy
Speaker 1: prices aren't anything at the FED deals with. The FED
Speaker 1: is crypt housing, and we've seen declines in new home
Speaker 1: sales and existing home sales and housing starts. So that
Speaker 1: is starting to affect the economy. But we're only just
Speaker 1: starting to see the impacts. And that's one of the
Speaker 1: discussions they have in their meetings is how far do
Speaker 1: we want to go? Because we want to go as
Speaker 1: far as we can without damaging the economy, and nobody
Speaker 1: quite knows where that is. Maybe it's something that Paul
Speaker 1: would address, all right, So who knows best the markets
Speaker 1: or the policy makers? Because it correct me if I'm wrong.
Speaker 1: It seems there's a bit of a disconnect between those
Speaker 1: two thinking. There's an old saying don't fight the Fed,
Speaker 1: and the young people who are in the markets these
Speaker 1: days are fighting the Fed. They haven't been around. You
Speaker 1: don't fight the Fed because they make the policy and
Speaker 1: they have pretty much unlimited funds when it comes to
Speaker 1: But what's happened over the years is you know what
Speaker 1: people jokingly referred to as the Greenspan Bernankee, Yell and
Speaker 1: and now Powell put where if markets get disrupted enough,
Speaker 1: the FED will come into the markets and save them. Uh.
Speaker 1: The Fed seems to be of the mind now that
Speaker 1: they're not going to do that because the markets aren't
Speaker 1: going to need saving. They don't. They're functioning just fine.
Speaker 1: It's just maybe that some people are losing money on
Speaker 1: this or that trade. So they want to make sure
Speaker 1: Inflation to them is the worst enemy, and they want
Speaker 1: to make sure that they get it out of the economy.
Speaker 1: So they want to deliver the message that's what they're
Speaker 1: going to do. Mike, thanks very much. We'll be hosting
Speaker 1: Bloomberg Surveillance Live for you from the Jackson Bowl Gallery
Speaker 1: here on Bloomberg Radio. And on Bloomberg Television as well.
Speaker 1: Just ahead on Bloomberg day Break weekend, the UK braces
Speaker 1: for a surgeon energy prices. This yeah, this is Bloomberg
Speaker 1: Daybreak weekend, our global look ahead of the top stories
Speaker 1: for investors in the coming week. I'm John Tucker in
Speaker 1: New York. Up later in the program, inflation and monetary
Speaker 1: policy in South Korea takes center stage. But first, Despite
Speaker 1: hitting double digits in July, inflation in the UK still
Speaker 1: hasn't passed a peak. An upcoming decision with the country's
Speaker 1: energy regulator will play a major role in deciding how
Speaker 1: much higher it's going to go. And for more, let's
Speaker 1: tend to London and bringing Bloomberg Daybreak Europe anchor Stephen
Speaker 1: Carroll John. Since the UK's energy regulator, off Jam has
Speaker 1: been setting maximum prices that energy firms can charge households
Speaker 1: for electricity and natural gas. The next price rise comes
Speaker 1: into a fact in October, and in the coming days
Speaker 1: we'll find out just how much it will be rising by.
Speaker 1: It's a move that will be a major driver of
Speaker 1: inflation in the UK for the latter months of this year.
Speaker 1: For more on this, I'm joined by Bloomberg's Renewable Energy
Speaker 1: and Climate Change of porter Will Mathis and our E M. E.
Speaker 1: A Economics and government correspondent, Buzzy Barden. Welcome to you both. Well,
Speaker 1: can you explain, first of all, what actually is the
Speaker 1: price cap and is it the maximum price that consumers
Speaker 1: can expect to pay this year? So this is a
Speaker 1: really good question and something that's pretty widely misunderstood. The
Speaker 1: price cap is a tool that the off Jim, the
Speaker 1: energy regulator, uses to cap like the unit price of energy.
Speaker 1: So for every megawatt hour of electricity and gas that
Speaker 1: you use in your home, the energy suppiers can only
Speaker 1: charge you a certain rate poor per unit of energy.
Speaker 1: But they when they're communicating this, they know that no
Speaker 1: one really knows what a kill watt hour electricity is.
Speaker 1: And if they come out and say, oh, we've kept
Speaker 1: energy prices at five p per kill watt hour, you
Speaker 1: know that means nothing to anyone, including you know me
Speaker 1: and I write about this stuff all the time. So
Speaker 1: what they do is they take that cap and then
Speaker 1: they multiply it by the average energy use across the
Speaker 1: country over a year, and then they put out that
Speaker 1: number to everyone. And that's what all the headlines are
Speaker 1: and so they say, for a whole year, the average
Speaker 1: energy bill in the country is going to be, you know,
Speaker 1: whatever it is. Most recently it was one thousand nine
Speaker 1: pounds and we're expecting a mere dart in the background
Speaker 1: now such a small price. Now we're talking about something
Speaker 1: that's much larger. So yeah, yeah, so that they use
Speaker 1: it as a way to communicate what people can expect
Speaker 1: their bills will be. But um, it is a bit
Speaker 1: more complicated, but it is just to kind of limit
Speaker 1: how much um suppliers can charge and they want to
Speaker 1: make sure that's in line with what it is costing
Speaker 1: those suppliers to actually buy energy and so they're not
Speaker 1: just you know, making obscene profits. So how exactly is
Speaker 1: the cop calculates it? Then basically they, um, you know,
Speaker 1: calculate what it costs the suppliers. And the absolutely number
Speaker 1: one thing is wholesale gas prices. Gas in the UK
Speaker 1: sets the price electricity. Gas is the way that the
Speaker 1: vast majority of homes get their heating in the winter.
Speaker 1: So you know, there are other things like taxes and
Speaker 1: certain policies that get funded off of bills, but the
Speaker 1: really big thing on the bills, And the thing that
Speaker 1: is fluctuating right now is wholesale enterry prices, and those
Speaker 1: are changing so much right now that it's pretty difficult
Speaker 1: to you know, know, you know in the beginning of
Speaker 1: the year what the cap is going to be at
Speaker 1: the end of the year, because the entry prices just
Speaker 1: look so much different right now amid just record volatility
Speaker 1: we're seeing in the market. How much is the price
Speaker 1: cop expected to arise by for October? So for October
Speaker 1: they're expecting it to go up to about three thousand,
Speaker 1: six hundred pounds and that is for an estimate for
Speaker 1: bills for the year from October, or one for the
Speaker 1: next twelve months that in that period they would estimate
Speaker 1: that it would be about three thousand, six hundred pounds UM.
Speaker 1: It's expected to go up even more in the first
Speaker 1: quarter of next year. And so for like the winter period,
Speaker 1: the six months of winter from October to March, the
Speaker 1: bills are expected to have tripled from what it was
Speaker 1: a year ago. Lizzie Burton turning to you, this is
Speaker 1: going to be so important for the broader inflation picture.
Speaker 1: We had that blistering number in the past few days,
Speaker 1: ten point one percent the inflation rate in July. This
Speaker 1: is going to determine how much hire that goes. Yeah,
Speaker 1: we're in double digits already. Economists got it wrong again.
Speaker 1: This is a new forty year high. It's more than
Speaker 1: five times the Bank of England's target and as you imply,
Speaker 1: we're not even at the peak yet. So the Bank
Speaker 1: of England had forecasts that when the energy price cup
Speaker 1: rises in October, peak inflation was going to be above
Speaker 1: but given that we're already above ten percent, that could
Speaker 1: be even higher. Now City economists are saying that peak
Speaker 1: inflation could be fifteen percent in the first quarter of
Speaker 1: three um. But remember it's not just about energy. In
Speaker 1: the data, the UK inflation data that we've just had,
Speaker 1: the main driver actually was food and actually as well
Speaker 1: it was quite broad based this inflation. The next biggest
Speaker 1: drivers were recreation and culture. You've had a big contribution
Speaker 1: from services. So the worry for the Bank of England
Speaker 1: is that this inflation surge is going to be long
Speaker 1: lasting because it's spreading beyond energy across the economy as
Speaker 1: people's inflation expectations keep running themselves. So what sort of
Speaker 1: challenges does this present now for the Bank of England.
Speaker 1: It's such a difficult moment for the Bank of England because,
Speaker 1: as officials explained after the last meeting, they're having to
Speaker 1: inflict pain on consumers in order to bring down inflation.
Speaker 1: So they've already done one jumbo rate hike in August
Speaker 1: fifty basis points. Now our economists at Bloomberg Economics and
Speaker 1: many others are expecting another fifty basis point hike in September,
Speaker 1: and the Bank of England has said that this is
Speaker 1: going to cause a long, shallow recession the likes of
Speaker 1: which we haven't seen since the nineteen nineties. UM Former
Speaker 1: Monetary Policy Committee member Andrew Sentence has said that the
Speaker 1: key rate might have to go up to three to
Speaker 1: four percent because policymakers at the beer we have got
Speaker 1: so behind the curve. And the other thing is that
Speaker 1: this inflation is swallowing up wage growth, which really makes
Speaker 1: the issue so much more pressing for the Bank of England.
Speaker 1: But because of the recession risk, that's what's worrying investors,
Speaker 1: and you've seen the yield curve in voting the most
Speaker 1: since the financial crisis because of the pain that the
Speaker 1: necessary rate cuts will inflict on the economy. Is. The
Speaker 1: energy price cap is something that we talk about so much.
Speaker 1: It is a major part of the debate that's happening
Speaker 1: at the moment on the political front, the toy leadership
Speaker 1: debate as well. What are politicians saying about how they're
Speaker 1: going to tackle high energy prices. Well, finally, for the
Speaker 1: first time in ages, cursed arm of the opposition, Labor
Speaker 1: Party leader managed to cut through with his proposal to
Speaker 1: continue the windfall tax and freeze energy bills this winter.
Speaker 1: And so in the hustings between Richard Sunac and those
Speaker 1: Trusts to be the next Conservative Party leader and Prime
Speaker 1: Minister this week, they had to respond to this proposal.
Speaker 1: Richie Sunac ruled it out. He said that he would
Speaker 1: target support the poorest households. Liz Trust said she doesn't
Speaker 1: want to throw money at a short term fix, but
Speaker 1: she wouldn't really be drawn on how else she would
Speaker 1: help other than repeating her promise of tax cuts. Okay,
Speaker 1: thank you very much to Bloomberg's Will Mathis and Lizzie
Speaker 1: Burden for those insights. I'm Stephen Caroline London. You can
Speaker 1: catch us every weekday morning for Bloomberg Daybreak Europe, beginning
Speaker 1: at six am. In London and one am on Wall Street,
Speaker 1: John Stephen, Thanks a lad, Just be UPO brig Daybreak
Speaker 1: the weekend. Here comes that big central bank meeting in
Speaker 1: South Korea. Is bloom broadcasting live from the Bloomberg Interactive
Speaker 1: Broker Studio in New York. Bloomberg eleven three oh to Washington,
Speaker 1: d C, Bloomberg to Boston, Bloomberg one O six one
Speaker 1: to San Francisco, Bloomberg nine to the country Sirius XM
Speaker 1: Channel one nine to London d A B Digital Radio,
Speaker 1: and around the globe the Bloomberg Business app and Bloomberg
Speaker 1: Radio dot Com. This is Bloomberg day Break Weekend, John
Speaker 1: Tucker in New York with your global Boocancademy talk stories
Speaker 1: for investment coming week. The pressure is on central banks
Speaker 1: in Asia and South Korea in focus right now for more,
Speaker 1: Let's into Hong Kong and Bloomberg day Break Asia host
Speaker 1: Brian Curtis and his colleague Doug Chrisner. John. The cost
Speaker 1: of living in South Korea is soaring. Last month, consumer
Speaker 1: inflation soared to the highest level in twenty four years,
Speaker 1: and it's raised questions as to whether or not the
Speaker 1: Bank of Korea will in the week ahead be so
Speaker 1: bold as to raise rates by another fifty basis points,
Speaker 1: as it did in July. For a closer look at
Speaker 1: the b okay meeting and the South Korean economy overall,
Speaker 1: we're joined by Kathleen Hayes, Bloomberg's Global Economics and Policy editor. Kathleen,
Speaker 1: thanks so much for joining us for the discussion. We've
Speaker 1: seen four rate hikes from the b ok this year
Speaker 1: and quite a lot of aggressive movement there. What are
Speaker 1: we expecting this time? Well, you know, the last rate
Speaker 1: hike was fifty basis point and that was a definitely
Speaker 1: the more aggressive move. So now the question is will
Speaker 1: they do another one? You just mentioned consumer prices up
Speaker 1: six point three percent from a year earlier. UM, that's
Speaker 1: a slight acceleration from the month before there. Uh. I
Speaker 1: think it's the highest since four So they are definitely
Speaker 1: in a position where want to get inflation down. Uh.
Speaker 1: And recently, however, Chingyong Ri, the new relatively new head
Speaker 1: of the Bank of Korea, signaled a move maybe of
Speaker 1: twenty five even with the high inflation. There's enough clouds,
Speaker 1: you know, dark clouds over the h Create economy, as
Speaker 1: there are many economies now in the world. I think
Speaker 1: they're getting a little less ready and eager to do
Speaker 1: the more aggressive hikes. They were one of the first
Speaker 1: central banks to begin tightening, I recall, and as with
Speaker 1: any central bank, it's trying to strike a balance right
Speaker 1: between tackling inflation on one hand and supporting economic growth.
Speaker 1: This is a very unique economy because it's so strongly
Speaker 1: export driven, but at the same time, there are a
Speaker 1: lot of internal things here that make it a little complex.
Speaker 1: The household sector is very heavily levered, right, You've got
Speaker 1: food inflation that's beginning to pop up. There are labor
Speaker 1: problems that the new government is having to deal with.
Speaker 1: So it's a complicated situation I think for the b Okay.
Speaker 1: And it's interesting because one of the reasons they're having
Speaker 1: those labor problems is because of rising prices. That's a
Speaker 1: big part of it. You know, we think more maybe
Speaker 1: about um food unrest in some poorer countries, but in
Speaker 1: in Korea, that's that's gotten people off their feet. I
Speaker 1: think it's that's one of the reasons why coming back
Speaker 1: to what the tone has been lately that uh, the
Speaker 1: the moves they're going to, they're gonna keep moving. They're
Speaker 1: gonna fight, but the moves are going to be gradual.
Speaker 1: That seems to be their message. Now they hope to
Speaker 1: get I believe to about two point seven five three
Speaker 1: by the end of the year, so they that means
Speaker 1: they have some more to run. But again maybe the
Speaker 1: fifty basis point hike isn't quite as UH probable, particularly
Speaker 1: after you see the slow down in China and we're
Speaker 1: seeing action on the fiscal side to the finance minister
Speaker 1: recently was talking about cutting spending pretty significantly. I think
Speaker 1: for ten years in a row, Um, you've been adding
Speaker 1: to extra spending year and year out with the previous administration.
Speaker 1: But the new administration wants to cut spending and get
Speaker 1: a lot more disciplined. How might that impact inflation? Well,
Speaker 1: if you cut back on spending, it's you know, your
Speaker 1: there's the money you add to melus or of subtract it.
Speaker 1: So the question is, I guess where they would be
Speaker 1: UH cutting their spending. Who would they be pulling back
Speaker 1: on And I don't think it's entirely clear yet exactly
Speaker 1: how that is UH is going to play out, So
Speaker 1: UH for the immediate future, I think that the b
Speaker 1: Okay and what they do. They're going to keep an
Speaker 1: eye on that, and they're very supportive of that. But
Speaker 1: I think that it's right now, it's going to be
Speaker 1: again more growth, uh. And it's not just China slowing down,
Speaker 1: of course that they're looking at. Their looking aggressive rate
Speaker 1: hikes by the FED. You mentioned the FED. It's interesting
Speaker 1: because we just had the FED Minutes recently and one
Speaker 1: of the things that I took away from it is
Speaker 1: a reminder that monetary policy works with a lag. We're
Speaker 1: going to need some time to be able to see
Speaker 1: more clearly how the tightening is playing out in the economy.
Speaker 1: And I would imagine the be Okay is in the
Speaker 1: exact same situation. They certainly are, and that's another reason
Speaker 1: why presumably they have to be sending out the message
Speaker 1: that they're going to keep hiking. They're ready to hike,
Speaker 1: but they've also stated publicly that this is one of
Speaker 1: the things they're watching very closely. But certainly Korea, what
Speaker 1: is it, the leventh biggest country in the world, it's
Speaker 1: the fourth biggest exporter, so it's something they're very much
Speaker 1: in tune to. And then something uh that's in the
Speaker 1: background for everybody, the war in Ukraine, the fact that
Speaker 1: it's not going away, the fact that commodity prices are
Speaker 1: being affected, and that washes over their economy too. All right, Kathleen,
Speaker 1: thanks so much for joining us an interesting discussion. Kathleen Hayes,
Speaker 1: Bloomberg's Global Economics and Policy editor. I'm Brian Curtis, along
Speaker 1: with Doug Krisner. You can catch us every weekday here
Speaker 1: for Bloomberg Daybreak Asia, beginning at six am in Hong
Speaker 1: Kong and six pm on Wall Street. John Bryan and
Speaker 1: Doug Thanks alive, just to hand on Bloomberg Daybreak weekend.
Speaker 1: The President Biden has had some big wins lately. How
Speaker 1: much traction and he get out of it? As politics
Speaker 1: gets more fractures have a big key midterm election. I'm
Speaker 1: John Tuckers. Busy is Bloomberg Daybreak weekend, our global look
Speaker 1: ahead of the top stories for investors in the coming week.
Speaker 1: I'm John Tuckery in New York. President Biden has had
Speaker 1: some big wins lightly and the question for him is
Speaker 1: how much traction can he get out of all of this?
Speaker 1: For more? Let's into our Bloomberg room in Washington and
Speaker 1: Amy Morris Amy, thank you, John. We are looking at
Speaker 1: the possibility that the Democrats may be feeling some momentum,
Speaker 1: a question that's especially important for President Biden right now
Speaker 1: ahead of the midterms. Bloomberg White House reporter Jordan Fabian
Speaker 1: joins me now is bringing us some insight. Jordan's it's
Speaker 1: a pleasure. Thanks so much for taking the time with
Speaker 1: us today. Thanks for having me on Amy. Now, let's
Speaker 1: start with the laundry list of wins for President Biden.
Speaker 1: The Inflation Reduction Act, the Chips Bill uh signs that
Speaker 1: inflation may be starting to moderate um. That analysis that
Speaker 1: was in the New York Times this past week asking
Speaker 1: the question if the Biden administration is at a turning point,
Speaker 1: Let me ask you, is the Biden administration at a
Speaker 1: turning point? I think it's fair to say it is.
Speaker 1: All these wins, especially the Inflation Reduction Act, weren't thought
Speaker 1: possible just weeks ago, and they did manage to push
Speaker 1: these through and not to mention it, you know, in
Speaker 1: a fifty Senate where there they really don't have a
Speaker 1: margin for error. So this is a real These are
Speaker 1: some real achievements for the White House. The the issue
Speaker 1: is is it coming too late for them to turn
Speaker 1: prospects around for Democrats in the November midterm elections. They
Speaker 1: really need these winds to try to generate momentum for
Speaker 1: them politically. But the problem is, Americans are still worried
Speaker 1: about the state of the economy and inflation, which while
Speaker 1: slow down last month, is still high compared to last year.
Speaker 1: And so you know, Americans are still uh dealing with
Speaker 1: those problems that are likely to have those things on
Speaker 1: their mind when they go to the batot box of
Speaker 1: the fall. That's kind of what they're up against, they
Speaker 1: being the Democrats. I mean, when they do have some
Speaker 1: sort of significant legislative win, there's that lag time between
Speaker 1: when the win happens and when the rank and file
Speaker 1: voters actually feel the impact of that. That's right. And look,
Speaker 1: I mean even in uh other administrations, it's not unusual
Speaker 1: for the president's party to take a beating in the
Speaker 1: first midterm election after the president was elected. And look
Speaker 1: at what happened to President Barack Obama. That he got
Speaker 1: the Obamacare through the Congress is signature achievement. And yet
Speaker 1: Democrats still lost in the in November of Donald Trump's
Speaker 1: Republican Party lost just two years after he was elected
Speaker 1: as well, the one recent outlier was George W. Bush,
Speaker 1: and that was that was during the midst of the
Speaker 1: Iraq War and only on year after the nine eleven attacks. So, uh,
Speaker 1: this is just something that happens in American politics. And
Speaker 1: while the White House has amasked a lot of winds
Speaker 1: and they're gonna try to put people out there and
Speaker 1: and get Democrats excited to vote, there's not much they
Speaker 1: can do to really change the political dynamics here that
Speaker 1: we've seen for the last few decades. Yeah, I understand
Speaker 1: that the White House is going to conduct that sort of,
Speaker 1: um popularity blitz, I guess a PR blitz where they're
Speaker 1: gonna go all over the country, sending out the cabinet
Speaker 1: secretaries and the President himself and sort of tout their accomplishments. Um.
Speaker 1: My question about that is does something like that normally
Speaker 1: change hearts and minds. I mean, letting people know what
Speaker 1: you've done is one thing, but actually thinking you're gonna
Speaker 1: get somebody to vote for you who might not have
Speaker 1: voted before or might not be interested in voting Democrat,
Speaker 1: that seems to be a harder sell. It seems unlikely
Speaker 1: it's going to help in a major way and shifting
Speaker 1: the political dynamic out of this election. But Democrats are
Speaker 1: hopeful that it can help around the market. In particular,
Speaker 1: they're hopeful that it could help excite Democrats who maybe
Speaker 1: we're down on President Joe Biden, to get excited and
Speaker 1: and go out and vote for Democratic candidates for the
Speaker 1: House and Senate in November. And they're not only banking
Speaker 1: on the recent spate of wins, but also on harnessing
Speaker 1: Democratic voters anger over the Supreme Court decision to end
Speaker 1: nationwide abortion rights. So you can expect Democrats to talk
Speaker 1: about what they've done and then also try to set
Speaker 1: up this dichotomy, this choice between them and a Republican party.
Speaker 1: They're gonna seek to label this extreme, and they're going
Speaker 1: to use their opposition to the inflation and justment acts,
Speaker 1: their position on abortion rights, and not to mention President
Speaker 1: Donald Trump, who's now embroiled in new legal problems and
Speaker 1: making noise that he might even announce another run for
Speaker 1: the White House and stuff in the next few months. Now,
Speaker 1: let's talk about the primaries. Jordan's. So far, they've seemed
Speaker 1: to be an exercise in seeing how much of a
Speaker 1: whole Donald Trump has on the Republican Party. A lot
Speaker 1: of people looking and comparing and contrasting this GOP candidate
Speaker 1: who has Trump backing versus that GOP candidate who does not.
Speaker 1: This past week we saw Republicans getting primaried, which I
Speaker 1: guess is now a Verblizz Cheney the most high profile example.
Speaker 1: So what does this say um to the White House
Speaker 1: and what are they worried about? Where are they more confident,
Speaker 1: what are they watching? Well, they're definitely watching these primaries closely.
Speaker 1: And you know from from my sense of talking to
Speaker 1: people in the White House and in democratic organizations, is
Speaker 1: that they prefer to have the more pro Trump Republican
Speaker 1: as the nominee and a lot of these close races
Speaker 1: because you know I was talking earlier about that contrast,
Speaker 1: they want to set up. The belief is that it's
Speaker 1: easier to do that when they're running against uh, you know,
Speaker 1: we're publican who's on the right wing of the party
Speaker 1: and it's espoused all those beliefs that I talked about
Speaker 1: earlier and also has maybe disputed the results of elections.
Speaker 1: They think that's an easy contrast to set up, and
Speaker 1: you're gonna see that in races like out in Arizona
Speaker 1: was has Senate race pitting an incumbent Mark Kelly against
Speaker 1: a Republican Canada and Blake Masters, who has expressed out
Speaker 1: about the election, and a number of other races do.
Speaker 1: And the problem, maybe though, is that a lot of
Speaker 1: these in a lot of these races, those candidates might
Speaker 1: actually end up winning, so on the Republican side. So
Speaker 1: while Democrats may have hoped that they've won, and in fact,
Speaker 1: Democratic political organizations have even run as supporting some of
Speaker 1: the quote unquote election deniers. Uh, you know, they're they're
Speaker 1: supporting candidates who might end up winning and having public
Speaker 1: office and holding the levels of power. And so it's
Speaker 1: a risky gamble, but it's one that Democrats hope pay off.
Speaker 1: Let's take that a step further. We mentioned Liz Cheney earlier.
Speaker 1: She is one of those Republicans who was one of
Speaker 1: the biggest adversaries from the GOP for President Trump. She
Speaker 1: lost that primary, but it doesn't look like she's done
Speaker 1: with politics. Just this past week, she's made a couple
Speaker 1: of announcements that make it sound like she is going
Speaker 1: to make sure her voice will continue to be heard.
Speaker 1: Did her losing that primary just light a fire in
Speaker 1: her belly. It certainly seemed to a mean. She even
Speaker 1: alluded in the past week to launching her own presidential campaign,
Speaker 1: possibly something that she's thinking about. The problem for her is, though,
Speaker 1: is that, you know, with the primaries on the Republican
Speaker 1: side of me pretty clear is that this is Donald
Speaker 1: Trump's Republican Party. Now, voters on the Republican side seemed
Speaker 1: to generally want these pro Trump candidates. They they support
Speaker 1: candidates who expressed doubts or denied the results of election.
Speaker 1: So what is Liz Cheney's position in the party at
Speaker 1: this point that who could she appeal to to win
Speaker 1: a nomination for the presidency. That's a very small sliver
Speaker 1: of voters at this point on the Republican side nationwide.
Speaker 1: And we are talking with Bloomberg White House correspondent Jordan
Speaker 1: Fabian about whether the White House winds of late can
Speaker 1: move the needle at all with the men terms. Um,
Speaker 1: Jordan's there is a primary coming up in Florida. What
Speaker 1: are you going to be watching for. I know Rohn
Speaker 1: de Santiss name has been coming up more than once. Yeah, certainly,
Speaker 1: you know Rohn de Santis is another person who's rumored
Speaker 1: that possibly want to run against Donald Trump or or
Speaker 1: or seek the presidential nomination for the Republican Party in
Speaker 1: four So you'll be looking closely at, you know, what,
Speaker 1: how he's going to perform. Is he is he really
Speaker 1: gonna you know, sort of run away with it and
Speaker 1: demonstrate his strength. And also in the weeks ahead, looking
Speaker 1: to New York State or on the Democratic side, there's
Speaker 1: some incumbent on incumbent races in New York City that
Speaker 1: you're you're going to see some dynamics on the progressive
Speaker 1: versus establishment wings of the party running against each other.
Speaker 1: So those races will be interesting too to watch to
Speaker 1: see how that power struggle on the Democratic side plays out. Yeah,
Speaker 1: I wanted to ask about that because, like you said,
Speaker 1: progressives versus the your your your standard sort of establishment Democrats,
Speaker 1: and a lot of Democrats right now not too happy
Speaker 1: with President Biden's response on the Supreme Court abortion rights reversal.
Speaker 1: They say he's moved too slow on this. Is that
Speaker 1: going to come back to affect him? Yeah, That's that's
Speaker 1: certainly a dynamic that exists right now. Amy, a lot
Speaker 1: of the activists in the Democratic Party you want to
Speaker 1: see a more forceful response to harness that energy and
Speaker 1: frustration that I was talking about earlier. When it comes
Speaker 1: to the abortion rights this issue, we've seen people like
Speaker 1: Vice President Kamala Harris really take the torch on this
Speaker 1: one run with it, whereas Biden's remarks have been more subdued. However,
Speaker 1: we haven't seen that frustration translated into a lot of
Speaker 1: progressive victories against candidates from the more establishment wing or
Speaker 1: that Joe Biden has backed. In fact, we've seen a
Speaker 1: lot of those progressive challengers lose to established min's figures.
Speaker 1: Uh Right, in the New York race where you're gonna
Speaker 1: see one Sean Patrick Maloney, the head of the House
Speaker 1: Democrats campaign, arms facing a progressive challenger, but he's thought
Speaker 1: to be a head and at race. Even looking back
Speaker 1: to a primery in Texas where Henry Quaire, who is
Speaker 1: a skeptic of abortion rights, ended up beating a progressive challenger,
Speaker 1: um that that that issue on the Democratic side hasn't
Speaker 1: seemed to have shifted the results of primaries, even though
Speaker 1: there is this frustration amongst some of the base voters
Speaker 1: about how President Biden has handled the issue. All Right,
Speaker 1: we're gonna watch it with you Jordan. Thank you so
Speaker 1: much for taking the time my pleasure. Amy, thanks Jordan's
Speaker 1: baby and covers the White House for Bloomberg News, and
Speaker 1: that's what's going on in the nation's capital. For more
Speaker 1: of our political news coverage, you can tune into Balance
Speaker 1: of Power with David Weston weekdays at noon Wall Street Time,
Speaker 1: and Sound On with Joe Matthew weekdays at five pm
Speaker 1: Wall Street Time. Right here on Bloomberg Radio, I'm Amy Morris,
Speaker 1: and this is Bloomberg John Amy Morris reporting from our
Speaker 1: Bloomberg room at Washington. Thanks a lot, Amy, and that
Speaker 1: does it for this additional Bloomberg day Break weekend. Join
Speaker 1: us again Monday morning at five am Wall Street Time
Speaker 1: for the latest on markets overseas, at the news you
Speaker 1: need to start your day, I'm John Tucker. This