WEBVTT - US Says Talks for Full Ukraine Ceasefire to Start Immediately 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:12.680 This is Bloomberg Business Week Insight from the reporters and 0:00:12.800 --> 0:00:17.120 editors that bring you America's most trusted business magazine, plus. 0:00:17.000 --> 0:00:19.280 Global business, finance and tech news. 0:00:19.440 --> 0:00:23.360 The Bloomberg Business Week Podcast with Carol Masser and Tim 0:00:23.400 --> 0:00:25.760 Stenoveek on Bloomberg Radio. 0:00:27.120 --> 0:00:29.880 We did mention our big story at the sour President 0:00:29.880 --> 0:00:33.479 Trump and President Putin of Russia speaking today in a 0:00:33.600 --> 0:00:35.800 long phone call about ninety minutes on how to bring 0:00:35.800 --> 0:00:39.519 an end to the Russia Ukraine wall. President Putin committed 0:00:39.560 --> 0:00:43.280 to limit Russian attacks on Ukrainian energy assets, but did 0:00:43.320 --> 0:00:46.320 decline to agree to a broader thirty day ceasefire, as 0:00:46.360 --> 0:00:49.360 the United States had sought with more. Let's head to 0:00:49.400 --> 0:00:52.280 the White House into Bloomberg's Tyler Kendall. She's there on 0:00:52.360 --> 0:00:54.560 the lawn of the White House, Tyler, Is this a 0:00:54.640 --> 0:00:58.640 step forward to ending the war between Russia and Ukraine? 0:01:00.160 --> 0:01:02.200 White House would like to paint it as such, But 0:01:02.280 --> 0:01:05.520 importantly you mentioned they are Vladimir Putin falling short of 0:01:05.680 --> 0:01:09.600 backing a thirty day ceasefire fire proposal that the US 0:01:09.680 --> 0:01:12.319 had been hoping for. Importantly, that White House readout goes 0:01:12.319 --> 0:01:15.480 on to say that negotiations will start for a maritime 0:01:15.640 --> 0:01:18.480 ceasefire on the Black Sea, followed hopefully by talks for 0:01:18.560 --> 0:01:21.759 a full seaspire and then a more permanent piece. Importantly, 0:01:21.800 --> 0:01:23.759 I just want to point out that the last time 0:01:23.840 --> 0:01:26.000 Zelenski was here at the White House, that Oval Office 0:01:26.000 --> 0:01:28.319 meeting devolved. He then went to Europe and presented to 0:01:28.360 --> 0:01:31.440 our European allies a similar path that he wanted to 0:01:31.480 --> 0:01:34.559 see a ceasefire in the sea and the sky, as 0:01:34.600 --> 0:01:38.120 he called it. You know, Bloomberg News had been reporting 0:01:38.120 --> 0:01:40.960 that Russia might have been trying to slow roll these 0:01:41.000 --> 0:01:44.680 negotiations earlier this morning, breaking the headline that Vladimir Putin 0:01:44.720 --> 0:01:47.160 would like to see a halt of all weapon flows 0:01:47.200 --> 0:01:51.280 into Ukraine, or, at least, according to sources familiar, the 0:01:51.360 --> 0:01:54.040 halt of US weapon flows into Ukraine. It remains to 0:01:54.040 --> 0:01:56.040 be seen if that is something this White House would 0:01:56.040 --> 0:01:58.760 really get behind, considering just last week it did reverse 0:01:58.800 --> 0:02:02.320 its own halt on US military assistance and intelligence sharing 0:02:02.360 --> 0:02:05.080 in order to get Ukraine to sign on to this 0:02:05.160 --> 0:02:09.280 thirty day piece proposal. Carol just quickly still a big questions, 0:02:09.280 --> 0:02:12.760 particularly considering that this readout does say that both countries 0:02:12.800 --> 0:02:15.600 want a lasting piece. That is raising questions about what 0:02:15.720 --> 0:02:18.240 that really looks like. Considering that we know that our 0:02:18.240 --> 0:02:21.280 European allies and Ukraine have been asking this White House 0:02:21.320 --> 0:02:25.000 what sort of firmer security guarantees they're willing to provide. 0:02:25.240 --> 0:02:28.440 Hey, Tyler, just very belief briefly fifteen seconds. Do we 0:02:28.480 --> 0:02:30.640 know what Ukraine would be giving up in exchange for 0:02:30.840 --> 0:02:31.560 the ceasefire? 0:02:32.880 --> 0:02:35.919 Well, that really remains to be seen at this point. 0:02:36.160 --> 0:02:38.200 They have said that they are willing to negotiate, but 0:02:38.200 --> 0:02:40.760 they need Russia to also come to the table. Ukraine 0:02:40.800 --> 0:02:43.000 has asked the US to ramp up sanctions if they 0:02:43.040 --> 0:02:46.120 do not get this thirty day cease fire into effect 0:02:46.160 --> 0:02:47.280 as quickly as possible. 0:02:49.120 --> 0:02:49.760 All Right, We're going to. 0:02:49.840 --> 0:02:51.679 Leave it on that note, Hey, Tyler, thank you so much. 0:02:51.720 --> 0:02:54.200 Tyler Kendall, Bloomberg News reporter there on the lawn of 0:02:54.240 --> 0:02:56.680 the White House. All Right, let's stay with this story 0:02:56.720 --> 0:02:59.440 because back with us for someone to share her expertise 0:02:59.600 --> 0:03:02.960 on Russia. Its longtime leader is doctor Angela Stent. She's 0:03:03.000 --> 0:03:05.320 senior fellow at the Brookings Institution, a member of the 0:03:05.320 --> 0:03:08.799 Council on Formulation, a former National intelligence Officer for Russia 0:03:08.880 --> 0:03:12.320 and Eurasia at the National Intelligence Council. And she's also 0:03:12.360 --> 0:03:14.640 the author of Putin's World, Russia against the West and 0:03:14.639 --> 0:03:17.000 with the Rest, which I am guessing she is probably 0:03:17.040 --> 0:03:20.799 working on updating. She joins us from Washington, DC, Doctor Stent. 0:03:20.919 --> 0:03:24.480 Always good to have you with Tim and myself. First 0:03:24.480 --> 0:03:27.320 of all, I'm just curious about the optics of how 0:03:27.320 --> 0:03:30.120 we got to today and whether or not you see 0:03:30.160 --> 0:03:33.520 this this conversation and the headlines that we have seen 0:03:33.639 --> 0:03:36.480 out of this conversation between President Trump and President Putin? 0:03:36.880 --> 0:03:39.120 Is this progress? Is this a step forward? 0:03:40.400 --> 0:03:42.160 So the way we go, well, thank you for having 0:03:42.240 --> 0:03:44.520 me on again. The way we got here is right. 0:03:44.600 --> 0:03:47.400 The President Trump said during the campaign that he was 0:03:47.440 --> 0:03:50.160 going to end this war in twenty four hours. It 0:03:50.200 --> 0:03:53.280 would never have started had he been president at the time. 0:03:53.640 --> 0:03:56.000 It took a little more than twenty four hours to 0:03:56.240 --> 0:03:59.800 get this particular phone call with Putin, although we know 0:03:59.840 --> 0:04:05.160 that he had previous ones after his election, and so 0:04:05.840 --> 0:04:08.640 he got the Ukrainians by putting pressure on them to 0:04:08.760 --> 0:04:11.720 agree to a thirty day total cease fire, and that's 0:04:11.760 --> 0:04:14.240 what he said he wants from the Russians. I've just 0:04:14.280 --> 0:04:18.159 been reading the Russian readoubt the Kremlins readout of the talks. 0:04:18.279 --> 0:04:21.520 It's a little different from the one that we got 0:04:21.560 --> 0:04:26.160 from the US side, and it mentions that Trump asked 0:04:26.279 --> 0:04:31.799 Putin for a cease fire on hitting energy and infrastructure targets, 0:04:32.080 --> 0:04:35.520 and it said that, you know, Putin was favorably inclined 0:04:35.560 --> 0:04:38.680 to it, it didn't actually necessarily say that he agreed 0:04:38.680 --> 0:04:40.200 with it. And a lot of it had to do 0:04:40.320 --> 0:04:43.960 with the restoration of US Russian relations, and apparently they're 0:04:44.000 --> 0:04:48.360 going to organize hockey games between Russia and the United States. 0:04:48.720 --> 0:04:51.840 But the thing that's most notable in the Russian one, 0:04:51.920 --> 0:04:55.000 and I think your correspondent already alluded to it, is 0:04:55.040 --> 0:04:58.360 that Putin's saying that they have to get to the 0:04:58.400 --> 0:05:02.560 fundamental causes, the root causes of why this war broke out, 0:05:02.720 --> 0:05:06.960 and that's going to go right back to NATO, to 0:05:07.320 --> 0:05:11.000 Ukraine wanting to be part of the West, and to 0:05:11.080 --> 0:05:15.120 Putin essentially saying that can happen. So I will be 0:05:15.560 --> 0:05:18.279 curious to see how this works out. I'd also like 0:05:18.360 --> 0:05:21.520 to know how they're going to enforce this very limited 0:05:21.680 --> 0:05:26.480 but still important ceasefire. Don't forget Russia has destroyed seventy 0:05:26.520 --> 0:05:30.840 percent of Ukraine's electricity production during this war. How are 0:05:30.839 --> 0:05:33.200 they going to monitor this and then what comes after it? 0:05:33.760 --> 0:05:35.640 But Angela doesn't seem like to you that it is 0:05:35.680 --> 0:05:37.840 indeed the beginning of the end of this war. 0:05:39.720 --> 0:05:42.840 It may be, I think what it's certainly the beginning 0:05:43.320 --> 0:05:47.800 of the US and Russia established, re establishing relations, and 0:05:47.839 --> 0:05:51.200 we've heard that from President Trump is a big Is 0:05:51.200 --> 0:05:53.800 it the beginning of the end of this war? I'm 0:05:53.839 --> 0:05:56.080 still I think the jury's out on that. I think 0:05:56.160 --> 0:05:59.200 we have to see how long Putin drags out the 0:05:59.279 --> 0:06:04.919 negotiation before he agrees to a total cease fire. And again, 0:06:05.240 --> 0:06:08.320 he hasn't really shown that he's interested in ending this 0:06:08.400 --> 0:06:12.440 war anytime soon. He's much more interested in restoring these 0:06:12.440 --> 0:06:15.160 relations with the US and ending his isolation. 0:06:15.880 --> 0:06:16.719 That's interesting. 0:06:17.120 --> 0:06:19.640 The other thing I wonder, Angeline, something that we've talked 0:06:19.640 --> 0:06:22.359 about with you before. I mean, are there ever really 0:06:22.400 --> 0:06:26.040 any guarantees that President Pultant won't try to invade Ukraine 0:06:26.120 --> 0:06:28.440 or another country again? And how does the outcome of 0:06:28.560 --> 0:06:32.120 this negotiate negotiation for an end to the war kind 0:06:32.120 --> 0:06:34.599 of determine the likelihood of that happening again? 0:06:35.800 --> 0:06:40.320 So as President Zelensky, unfortunately for him, pointed out in 0:06:40.360 --> 0:06:43.360 the Oval Office when he then got the president, the 0:06:43.440 --> 0:06:46.720 vice president very angry with him, Russia has violated every 0:06:46.760 --> 0:06:50.680 cease fire it's signed with Ukraine, certainly since the annexation 0:06:50.800 --> 0:06:54.279 of Primere in twenty fourteen. And Russia has also violated 0:06:54.320 --> 0:06:58.800 every treaty it's signed with Ukraine since its independence. So 0:06:59.240 --> 0:07:01.800 I think one has to be very skeptical. And this 0:07:01.880 --> 0:07:05.880 is of course why President Zelenski, again unfortunately for him, 0:07:06.160 --> 0:07:10.560 in the Oval Office, wanted to talk about security guarantees, 0:07:10.880 --> 0:07:16.040 because without very robust security guarantees, there's absolutely no reason 0:07:16.120 --> 0:07:20.440 to believe that Russia wouldn't try and invade Ukraine again. 0:07:21.440 --> 0:07:25.200 The best security guarantee we know would be Ukraine joining NATO. 0:07:25.560 --> 0:07:29.080 That's been taken off the cards now by the Trump administration, 0:07:30.040 --> 0:07:34.520 but it needs these guarantees, and the Europeans, the French, 0:07:34.840 --> 0:07:37.800 the British, and other European countries have said they're willing 0:07:37.880 --> 0:07:42.880 to provide security guarantees, boots on the ground to be 0:07:42.960 --> 0:07:47.040 a stabilizing force stabilization force once the war ends, but 0:07:47.160 --> 0:07:51.120 they say they need American backup for this, and that's 0:07:51.160 --> 0:07:55.679 something which the Trump administration has not committed itself to Angela. 0:07:55.760 --> 0:07:57.520 Let's say this is the beginning of the end of 0:07:57.520 --> 0:08:02.480 the war, and it does. And what does Russia look 0:08:02.600 --> 0:08:05.200 like on the other side of this is is it 0:08:05.440 --> 0:08:08.640 stronger or weaker than it was? Is it more? Is 0:08:08.680 --> 0:08:12.200 Putin more emboldened than he was pre invasion? 0:08:13.000 --> 0:08:14.840 Yeah, So what it looks like is, I mean, the 0:08:14.880 --> 0:08:17.120 economy is not in good shape and it's going to 0:08:17.160 --> 0:08:20.360 get worse the longer this war goes on for Putin. 0:08:20.680 --> 0:08:23.920 So if the war ends, that would and obviously if 0:08:23.920 --> 0:08:26.880 the sanctions are removed, which they would be if the 0:08:26.920 --> 0:08:30.160 war ends at some point, then that would be very 0:08:30.160 --> 0:08:32.800 beneficial for Putin. But yes, he comes out of this 0:08:32.920 --> 0:08:40.240 looking stronger. He invaded another country and provoked and presumably, 0:08:40.440 --> 0:08:42.360 I mean, we have to see if Ukraine has to 0:08:42.400 --> 0:08:45.880 make territorial concessions to Russia. He will then you know, 0:08:46.160 --> 0:08:50.679 have taken twenty percent of Ukraine. And unless there are 0:08:50.760 --> 0:08:55.800 these very robust security guarantees, he could invade again. And 0:08:55.840 --> 0:08:58.640 now he'll be in you know, he'll be invited back 0:08:58.679 --> 0:09:01.680 to the United States. Maybe the Europeans won't want to 0:09:01.720 --> 0:09:05.880 deal with him for any time soon, but Russia's actually 0:09:06.400 --> 0:09:10.160 strengthened its international position in many ways while it's been 0:09:10.200 --> 0:09:11.080 fighting this rule. 0:09:11.400 --> 0:09:13.760 You know, I think about something Tim brought up, and 0:09:13.880 --> 0:09:17.080 it just reminded us. Was it a debate where Mitch 0:09:17.160 --> 0:09:19.920 Romney said, who was asked, you know, I guess or 0:09:19.960 --> 0:09:23.960 the candidates, was it two thousand and eight or before that, 0:09:24.880 --> 0:09:27.199 twenty twelve, and what was the biggest right, what was 0:09:27.240 --> 0:09:30.000 the biggest concern or national security concern for the United States? 0:09:30.160 --> 0:09:32.360 He said Russia and was kind of laughed off the stage. 0:09:32.480 --> 0:09:38.320 But is there some credibility Angela in President Trump trying 0:09:38.360 --> 0:09:42.920 to create some kind of economic cooperation or more economic 0:09:42.960 --> 0:09:45.800 cooperation between the US and Russia to create a different 0:09:45.880 --> 0:09:50.600 future and relationship with Russia going quote, and is there 0:09:50.640 --> 0:09:51.439 some good to that? 0:09:52.760 --> 0:09:55.319 Well, in the nineteen nineties, there were a lot of 0:09:55.480 --> 0:09:58.680 American firms that were very active in Russia. Energy companies, 0:09:59.280 --> 0:10:02.719 launch firms, small funds. They were making money and they 0:10:02.720 --> 0:10:07.680 were doing quite well, and yet the political relationship between 0:10:07.880 --> 0:10:10.920 the US and Russia was very difficult. There were a 0:10:10.960 --> 0:10:13.720 couple of high points after nine eleven when the US 0:10:13.720 --> 0:10:17.319 and Russia with Putin, you know, worked together in terms 0:10:17.360 --> 0:10:22.440 of the beginning of the US campaign in Afghanistan. Also, 0:10:22.559 --> 0:10:25.560 I should point out that there were thousands of American 0:10:25.640 --> 0:10:29.800 business people in Ukraine when Russia invaded. That didn't stop 0:10:29.880 --> 0:10:34.080 Russia from invading. So of course there are arguments to 0:10:34.120 --> 0:10:38.080 build up economic ties with Russia, but I think history 0:10:38.160 --> 0:10:41.040 shows us and even the experience of the last thirty years. 0:10:41.280 --> 0:10:44.920 Putin always likes to separate economics from politics, and you 0:10:44.920 --> 0:10:48.240 can have a good or a strong economic relationship with 0:10:48.320 --> 0:10:51.040 Russia and it doesn't seem to have that much impact 0:10:51.280 --> 0:10:55.760 on what Russia does politically or militarily, particularly under Putin. 0:10:57.320 --> 0:10:59.520 You know, I asked what Russia would look like after this, 0:10:59.720 --> 0:11:02.480 but what about Ukraine? Because this is the country that 0:11:02.880 --> 0:11:05.400 three years ago we were talking to you and so 0:11:05.480 --> 0:11:08.280 many other people thought this war would be over just 0:11:08.360 --> 0:11:10.560 in a matter of hours, a matter of days, a 0:11:10.559 --> 0:11:13.240 matter of weeks. But look what Ukraine has been able 0:11:13.280 --> 0:11:15.480 to do to defend itself. What does Ukraine look like 0:11:15.559 --> 0:11:16.439 on the other side. 0:11:17.400 --> 0:11:18.600 Well, you know, on. 0:11:18.559 --> 0:11:22.280 The good side, Ukraine now has the strongest and largest 0:11:22.400 --> 0:11:29.839 army in Europe. It's developed very sophisticated technical technological capabilities. 0:11:30.360 --> 0:11:34.559 It's been using electronic warfare, it's much more sophisticated than that. 0:11:34.920 --> 0:11:38.000 On the other hand, of course, its economy has suffered greatly, 0:11:40.040 --> 0:11:44.040 and you know, it's had cities and villages obliterated by 0:11:44.080 --> 0:11:47.120 the Russians, so it's going to need an enormous amount 0:11:47.400 --> 0:11:51.400 of economic assistance and investment if it is to recover. 0:11:52.040 --> 0:11:55.480 It's also lost a large number of soldiers. We don't 0:11:55.720 --> 0:11:58.520 quite know, but I think for both Ukraine and Russia 0:11:58.520 --> 0:12:02.520 it's in the hundreds of thousands. And it also has 0:12:03.640 --> 0:12:06.920 millions of Ukrainians are now living abroad because of the war. 0:12:07.240 --> 0:12:09.040 They need to come back and they need to help 0:12:09.120 --> 0:12:14.120 rebuild the country. So economically it's it's, you know, in 0:12:14.280 --> 0:12:18.360 very poor shape, even though other aspects militarily it's better off, 0:12:18.400 --> 0:12:20.880 but it will still be in a very fragile state 0:12:21.320 --> 0:12:22.240 at the end of the war. 0:12:22.679 --> 0:12:23.120 Angela. 0:12:23.400 --> 0:12:25.000 You know, I was thinking about this a lot, like 0:12:25.360 --> 0:12:28.760 what is the relationship between President Putin and President Trump? 0:12:28.800 --> 0:12:31.120 And I know we've talked with you about this before. 0:12:30.840 --> 0:12:34.760 And what is it? You know, is it is Russia 0:12:34.880 --> 0:12:35.520 great power? 0:12:35.640 --> 0:12:38.120 Is it a great economy? You already referenced that it wasn't. 0:12:38.400 --> 0:12:41.119 They're businesses, their alliances, their leadership. 0:12:41.240 --> 0:12:42.400 I mean, is. 0:12:42.360 --> 0:12:47.120 It an economic and political model to emulate. I'm asking 0:12:47.240 --> 0:12:51.280 a little bit facetiously, but I'm trying to understand, you 0:12:51.320 --> 0:12:54.599 know why there is this relationship. 0:12:55.440 --> 0:12:58.680 Well, it's not an economic model to emulate because it's 0:12:58.760 --> 0:13:02.920 essentially a hydrocon an exporter. It doesn't have a very 0:13:02.960 --> 0:13:06.800 modern economy. You know, I always when I teach my students, 0:13:06.840 --> 0:13:09.040 I say, tell me how many products in your home 0:13:09.080 --> 0:13:11.760 are from China? On how many from Russia. Well you 0:13:11.840 --> 0:13:14.760 know the answer to that, there many of them from China, 0:13:14.800 --> 0:13:18.400 they're on from Russia. So it earns a lot of 0:13:18.440 --> 0:13:21.720 money by selling hydrocarbons, but it doesn't have really a 0:13:21.720 --> 0:13:25.240 modern economy. It has a shrinking population. It has a 0:13:25.280 --> 0:13:29.480 major demographic problem, and it's had that ever since the 0:13:29.600 --> 0:13:32.760 fall of the Soviet Union and even before then. But 0:13:33.080 --> 0:13:37.880 militarily it is a superpower, and that's in history. Russia 0:13:37.920 --> 0:13:40.600 has always been a great power because of its military, 0:13:40.880 --> 0:13:44.560 not because of its economy. And so it is you know, 0:13:44.720 --> 0:13:47.520 I think the largest nuclear power, the US and Russia, 0:13:47.600 --> 0:13:50.760 the two nuclear superpowers. The Russians have more warheads than 0:13:50.800 --> 0:13:53.480 we do, and so in that sense it's a great power. 0:13:53.720 --> 0:13:58.440 And because of the hydrocarbons and of course it's location. 0:13:58.559 --> 0:14:01.959 It's the largest country in the world world sitting astride 0:14:02.040 --> 0:14:07.160 Europe in Asia, so it has many strong endowments, but 0:14:07.800 --> 0:14:10.400 economically it really does need to modernize. 0:14:10.960 --> 0:14:13.680 Hey, just thirty seconds left, doctor sten. It does raise 0:14:13.679 --> 0:14:16.880 the question, though, how the rest of the world keeps 0:14:16.920 --> 0:14:21.120 putin in check, given the strength of its military and 0:14:21.360 --> 0:14:26.360 given his ambitions, how does that happen? Well, we know that. 0:14:26.280 --> 0:14:29.040 He has ambitions that go beyond Ukraine, and that's why 0:14:29.080 --> 0:14:32.240 the Europeans are very worried about it. And now you 0:14:32.360 --> 0:14:36.560 see France offering you a nuclear umbrella to the rest 0:14:36.560 --> 0:14:39.960 of Europe. You see some European countries, even Poland, talking 0:14:39.960 --> 0:14:42.840 about should they acquire nuclear weapons. So this is one 0:14:42.920 --> 0:14:46.760 of the impacts of this brutal war is at least 0:14:46.760 --> 0:14:51.119 country countries in Europe reminding themselves that they're still vulnerable 0:14:51.400 --> 0:14:53.720 to a potential Russian invasion, and some of them are 0:14:53.760 --> 0:14:56.720 talking about the possibility of a war with Russia within 0:14:56.720 --> 0:14:58.160 the next five years. 0:14:58.760 --> 0:15:01.720 Bottom line ten seconds. This is a good this is 0:15:01.760 --> 0:15:04.720 a good move. This is some progress. 0:15:06.280 --> 0:15:09.280 On the call. Yes it is, I mean hopefully if 0:15:09.280 --> 0:15:11.840 they implement this for us ceas file. Of course it's 0:15:11.880 --> 0:15:12.360 a good move. 0:15:12.600 --> 0:15:14.240 All right, my guests, is we're going to be coming 0:15:14.280 --> 0:15:16.600 back to you a lot more still on this, and 0:15:16.640 --> 0:15:18.600 we so appreciate that we can. 0:15:18.760 --> 0:15:19.720 Angela, thank you so much. 0:15:19.760 --> 0:15:22.280 Doctor Angela Stent, Senior Fellow at the Brookings Institution, a 0:15:22.320 --> 0:15:24.960 member of the Council on Foreign Relations, and her book 0:15:25.040 --> 0:15:27.400 author of Putin's World. 0:15:27.440 --> 0:15:28.400 Be sure to check it out. 0:15:29.400 --> 0:15:33.000 You're listening to the Bloomberg Business Week podcast. Catch us 0:15:33.040 --> 0:15:36.520 live weekday afternoons from two to five pm Eastern. Listen 0:15:36.520 --> 0:15:40.359 on Apple CarPlay and Android Auto with the Bloomberg Business app. 0:15:40.240 --> 0:15:42.080 Or watch US live on YouTube. 0:15:43.360 --> 0:15:44.880 One of the things we wanted to talk about is, 0:15:44.880 --> 0:15:47.840 of course, the upcoming FED decision tomorrow. We did see 0:15:47.840 --> 0:15:52.680 the Federal Reserve Bank of Atlanta's gpt GDP now index 0:15:52.720 --> 0:15:56.680 suggesting US gross domestic product will retract one point seven 0:15:56.800 --> 0:15:59.640 six percent, so a negative one point seven six percent 0:15:59.680 --> 0:16:02.400 the first quarter versus a negative two point zero six 0:16:02.400 --> 0:16:04.960 percent and its previous release on March seventeenth, So you've 0:16:05.000 --> 0:16:08.720 got that going on. Meantime, US Treasury Secretary Scott Bessett, well, 0:16:08.760 --> 0:16:11.160 he doesn't seem too worried about US growth. 0:16:11.320 --> 0:16:13.640 He spoke on Fox Business this morning. 0:16:13.880 --> 0:16:18.960 The underlying economy is healthy. There is no reason we 0:16:19.120 --> 0:16:22.920 have to have a recession. Can we have a pause 0:16:23.280 --> 0:16:26.760 as we go from this incredible level of government spending 0:16:26.840 --> 0:16:28.520 which is just unsustainable? 0:16:28.920 --> 0:16:31.720 That, of course is US Treasury Secretary Scott Besson earlier 0:16:31.760 --> 0:16:33.920 today on Fox Business. So let's get into it the 0:16:34.000 --> 0:16:36.960 US economy tomorrow's FED decision. Back with Tim and me 0:16:37.120 --> 0:16:42.320 is doctor Steven Skankee, chief economist advisor at the Wealth Advisor, 0:16:42.360 --> 0:16:45.320 I should say chief economist at the Wealth Advisor kill Point. 0:16:45.440 --> 0:16:48.120 He's also a former US Treasury and White House National 0:16:48.160 --> 0:16:50.880 Security Council staff member. He's out there in Washington, d C. 0:16:51.320 --> 0:16:52.960 And then right here in our New York studio is 0:16:52.960 --> 0:16:56.320 Bloomberg Economics US economist Stuart Paul. Hey, Stuart, I want 0:16:56.320 --> 0:16:58.360 to start with you. The FED is expected to hold 0:16:58.400 --> 0:17:01.240 rate steady this week. Tomorrow's decision really. 0:17:01.200 --> 0:17:02.480 All about the dot plot. 0:17:02.800 --> 0:17:05.040 Is mostly about the dot plot, and beyond what we 0:17:05.080 --> 0:17:08.480 actually get from the media and FOMC members expectations for 0:17:08.520 --> 0:17:10.840 the path of interest rates, we're also going to get 0:17:10.880 --> 0:17:13.359 a few clues about what they expect for the economy 0:17:13.520 --> 0:17:15.560 and what's going to be guiding their interest rate decision. 0:17:15.640 --> 0:17:18.000 So we're also probably going to see a downward revision 0:17:18.040 --> 0:17:21.040 of their expectations for twenty twenty five growth, and we're 0:17:21.080 --> 0:17:23.000 also probably going to see an upward revision of their 0:17:23.080 --> 0:17:26.360 estimates for core PCE inflation for the year ahead. And 0:17:26.480 --> 0:17:28.400 between the two of those, the question is what ends 0:17:28.480 --> 0:17:30.680 up dominating. Is it the cooler growth that will lead 0:17:30.680 --> 0:17:32.920 to more rate cuts? Is it the higher inflation that'll 0:17:32.960 --> 0:17:36.000 keep them on hold. We're expecting the median dot to 0:17:36.040 --> 0:17:39.320 still show two cuts in the year ahead, but if anything, 0:17:39.400 --> 0:17:41.920 the distribution of dots we think will be skewed to 0:17:42.080 --> 0:17:46.240 fewer cuts this year because of that uptick in inflation expectations. 0:17:47.000 --> 0:17:49.639 Steve, is that the focus for you too? The dot plot? 0:17:49.800 --> 0:17:51.120 Is that what you're focused on as well? 0:17:52.680 --> 0:17:55.960 Certainly it is because it gives us some better understanding 0:17:56.040 --> 0:17:59.560 of what they're thinking about. That's sort of first step 0:17:59.840 --> 0:18:03.240 and than what share Powl says and is press conference. 0:18:03.920 --> 0:18:06.560 They've had a lot of disparate information in the various 0:18:06.960 --> 0:18:12.600 Federal Reserve Bank branches and it'll be interesting to see 0:18:12.600 --> 0:18:17.879 how that gets reflected in the board member's expectations. 0:18:19.160 --> 0:18:19.800 Well, and I. 0:18:19.720 --> 0:18:22.720 Guess one of the interesting things too is and you know. 0:18:22.840 --> 0:18:27.000 Let me ask you, Steve, we just know the Treasury secretary. 0:18:27.080 --> 0:18:29.680 It's kind of interesting, you know, saying the underlying economy 0:18:29.720 --> 0:18:33.919 is healthy, no reason that we should have a recession, 0:18:34.040 --> 0:18:35.840 and yet nobody's really ruling it out right. 0:18:35.880 --> 0:18:37.680 Can you ever really rule out a recession? 0:18:39.880 --> 0:18:43.720 Certainly not, because while the economy came into this year 0:18:43.840 --> 0:18:49.680 very strong, and even today with you know, slower than 0:18:51.160 --> 0:18:55.480 trend growth in retail sales and all of the negative 0:18:55.520 --> 0:18:58.560 consumer sentiment that has been causing consumers to pull back 0:18:58.560 --> 0:19:03.080 in their spending, the economy is still robust, The labor 0:19:03.160 --> 0:19:08.160 market is strong, and and yes there's changes at the margin, 0:19:08.680 --> 0:19:11.320 but it would take a lot to tip the economy 0:19:11.320 --> 0:19:14.000 into recession. But at the same time, and I think 0:19:14.040 --> 0:19:17.800 this is what frightens markets the most, is that the President, 0:19:17.920 --> 0:19:24.760 his Treasury secretary, his Commerce secretary have all said that basically, 0:19:24.800 --> 0:19:29.639 they're okay if the market is down and if we 0:19:29.680 --> 0:19:34.200 tip into a recession, they're not worried about it because 0:19:34.440 --> 0:19:39.600 they're they're larger plan is to to reset, reboot, rebuild, 0:19:39.760 --> 0:19:44.040 recalibrate the economy, and they seem to be willing to 0:19:44.080 --> 0:19:47.960 accept that as as a necessary cost. If that should happen. 0:19:48.640 --> 0:19:49.440 I just get to I. 0:19:49.440 --> 0:19:52.720 Just got to say, as you're saying this about, I'm 0:19:52.720 --> 0:19:54.479 seeing Stewart kind of smile a little bit. 0:19:54.480 --> 0:19:55.280 Stuart, you're smiling. 0:19:55.280 --> 0:19:58.600 Why, Well, because I think that policymakers, even in the 0:19:58.640 --> 0:20:02.080 White House, they do about economic outcomes. Of course, they 0:20:02.080 --> 0:20:03.280 say that there's going to be a bit of an 0:20:03.280 --> 0:20:06.440 economic realignment. But if we think back to past presidents, 0:20:06.480 --> 0:20:09.240 we saw George W. Bush inheriting in the first term 0:20:09.280 --> 0:20:11.640 the bursting of the tech bubble. We saw Obama inheriting 0:20:11.680 --> 0:20:14.760 the global financial crisis. S and P five hundred in 0:20:14.800 --> 0:20:16.520 the first let's say one hundred days that they were 0:20:16.520 --> 0:20:19.639 in office was off at most, probably about fifteen percent. 0:20:20.000 --> 0:20:23.600 There's only so much that sort of self inflicted pain 0:20:23.680 --> 0:20:28.080 from policy decisions, policy announcements, tariff imposite, tariffs being imposed 0:20:28.119 --> 0:20:30.639 and then being walked back that the White House can 0:20:30.680 --> 0:20:33.760 really stomach before they feel some pain. The key difference, 0:20:33.800 --> 0:20:36.120 of course, would be that was Bush's first term Obama's 0:20:36.119 --> 0:20:38.840 first term that were running for reelection. If Trump is 0:20:38.880 --> 0:20:41.680 seeing this truly as his last term and not part 0:20:41.720 --> 0:20:44.640 of some broader magma movement, maybe Steve is right. Maybe 0:20:44.640 --> 0:20:47.920 he's a little bit insulated. I think that policymakers tend 0:20:47.920 --> 0:20:50.959 to be responsive to public sentiment. I think that they 0:20:51.000 --> 0:20:53.240 tend to be responsive to voters. 0:20:53.359 --> 0:20:54.960 And when you only have. 0:20:56.040 --> 0:20:58.359 Let's say, for example, three seats in the Senate that 0:20:58.400 --> 0:21:01.280 are going to be up in twenty twenty six, I 0:21:01.359 --> 0:21:04.320 think that Yeah, I think that it's probably a closer 0:21:04.359 --> 0:21:06.520 call than it might sound. They might be more responsive 0:21:06.520 --> 0:21:07.320 than you're suggesting. 0:21:07.760 --> 0:21:09.920 So what are you saying, Stort. Are you saying that 0:21:10.280 --> 0:21:13.480 policymakers will continue to be responsive or they have this 0:21:13.840 --> 0:21:17.600 insulation because the President is not up for reelection and 0:21:17.600 --> 0:21:20.200 there aren't that many Senate seats that are coming up either. 0:21:20.520 --> 0:21:22.320 I think that they're saying that they're going to be 0:21:23.440 --> 0:21:26.560 They're going to be less responsive than they have been historically. 0:21:26.600 --> 0:21:28.400 I think that there will come a point in time 0:21:28.440 --> 0:21:31.880 where we do get a little bit less rhetoric out 0:21:31.880 --> 0:21:34.600 of the White House and a little bit more of 0:21:34.640 --> 0:21:37.600 a reaction to both the printed data and financial market activity. 0:21:37.960 --> 0:21:42.800 Carol very wisely noted that the FED the Atlanta Fed's 0:21:42.920 --> 0:21:46.720 GDP now cast looks pretty dismal for the first quarter. 0:21:47.040 --> 0:21:48.720 We don't think that it's going to be quite that bad, 0:21:48.800 --> 0:21:51.560 but printing let's say an annualized pace of half of 0:21:51.640 --> 0:21:55.160 one percent in the president's first term. The president's first 0:21:55.200 --> 0:21:57.720 quarter of this term in office is not going to 0:21:57.720 --> 0:22:00.000 be something that's easy to brush off from a public 0:22:00.080 --> 0:22:02.760