WEBVTT - Inflation and Tariffs in Full Focus for Markets 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple, CarPlay or Android Otto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.000 us live on YouTube. 0:00:27.040 --> 0:00:29.240 And the Equity Americans Now is someone who has been 0:00:29.520 --> 0:00:33.640 a confirmed believer in American capitalist and Benjamin Ladler that 0:00:33.800 --> 0:00:37.600 joins at Brudesco BBI. Ben to tariff's matter and the 0:00:37.680 --> 0:00:39.280 confidence to hold equities. 0:00:39.960 --> 0:00:42.120 Yeah, I think they do. Unfortunately, I think we'll do 0:00:42.200 --> 0:00:43.960 a bit of a reality check here. I mean, I 0:00:44.000 --> 0:00:48.360 think tariff complacency is high. I think the Trump administration's emboldened. 0:00:49.040 --> 0:00:52.720 I think the traditional Trump puts uh frankly nowhere in sight, 0:00:53.159 --> 0:00:56.840 and that's just I think feeding this this loop and 0:00:57.040 --> 0:01:00.400 maybe further inboldening the administration. So yeah, I think we'll 0:01:00.440 --> 0:01:02.120 do a bit of a reality check. It doesn't make 0:01:02.160 --> 0:01:06.120 me particularly bearish, you know, looking further out, but I 0:01:06.120 --> 0:01:08.080 would certainly mind the gap a little bit in the 0:01:08.080 --> 0:01:09.240 short term. 0:01:09.440 --> 0:01:11.360 What do you think we're going to get from earnings here? 0:01:11.560 --> 0:01:13.960 Ben Again, We're going to kick off tomorrow with Jamie 0:01:13.959 --> 0:01:16.399 Diamond and JP Morgan and some of the other big banks. 0:01:16.400 --> 0:01:19.880 What do you expect this quarter from, you know, the 0:01:19.880 --> 0:01:20.959 corporate American. 0:01:22.120 --> 0:01:23.800 Yeah, so I'd be focused on two things. The good 0:01:23.840 --> 0:01:27.600 news is that the expectations are very low three four 0:01:27.640 --> 0:01:30.080 percent earnings growth. That's a very low bar, which I 0:01:30.120 --> 0:01:33.839 think everyone's going to easily beat. The less good news, 0:01:33.920 --> 0:01:35.880 and I think the focus of earning season is going 0:01:35.920 --> 0:01:39.240 to be on the company guidance, especially with all this 0:01:39.440 --> 0:01:41.760 tariff uncertainty that I think is where the sort of 0:01:41.800 --> 0:01:43.479 rubber may hit the road a little bit and we're 0:01:43.480 --> 0:01:46.080 going to maybe get some less good news from corporate 0:01:46.520 --> 0:01:50.160 I do think this uncertainty remains very corrosive for corporate 0:01:50.200 --> 0:01:53.320 America for investment plans, and I would expect to hear 0:01:53.360 --> 0:01:56.160 a little bit about that from the earning scourse. 0:01:57.000 --> 0:01:58.760 Do you think the markets here again we're looking at 0:01:58.800 --> 0:02:01.400 the US equity mark. It's at our near all time 0:02:02.000 --> 0:02:06.320 highs here again retracing the selloff from a liberation day? 0:02:07.040 --> 0:02:07.880 Is that too much? 0:02:08.160 --> 0:02:12.760 Are the markets too complacent about the potential economic headwinds 0:02:12.800 --> 0:02:14.120 from tariffs? 0:02:15.400 --> 0:02:17.919 Yeah, I think we've become too reliant on this taco narrative. 0:02:18.520 --> 0:02:20.960 It's a sort of boiling the frog scenario. I mean, 0:02:21.000 --> 0:02:22.800 I think we're going to wake up potentially in a 0:02:22.840 --> 0:02:25.799 month or two's time and find out that somehow Trump 0:02:25.840 --> 0:02:27.959 has walked us up from ten percent taris to twenty 0:02:28.000 --> 0:02:31.079 percent tarifs, flipping the sort of narrative on its head. 0:02:31.120 --> 0:02:33.840 And I think that will have an impact. It's a 0:02:33.919 --> 0:02:37.480 question I think of when, not if we may start 0:02:37.480 --> 0:02:40.000 to get a little bit of signs that tomorrow in 0:02:40.040 --> 0:02:42.600 the inflation print and the PPI print the day after that, 0:02:42.720 --> 0:02:46.120 and then the guidance from companies. But it's still early. 0:02:46.280 --> 0:02:48.960 But that's not fool ourselves. It's it's definitely coming. 0:02:50.120 --> 0:02:52.520 It looks then at the terrace and right right now 0:02:52.600 --> 0:02:55.400 yell budget labs at eighteen percent and they may model 0:02:55.440 --> 0:02:59.160 it in to a nineteen thirty four equivalent. Anybody that's 0:02:59.280 --> 0:03:03.720 studied this knows that's impossible. Does Bridesco, and particularly with 0:03:03.800 --> 0:03:08.480 your Latin American excellence, do you have a number that's doable? 0:03:08.600 --> 0:03:10.679 I mean to me, if we were at two or 0:03:10.720 --> 0:03:15.600 three percent before, is five percent doable? Dare I say 0:03:15.840 --> 0:03:17.720 eight percent on a blended basis? 0:03:19.360 --> 0:03:20.760 Well, I think the market has sort of made its 0:03:20.800 --> 0:03:22.880 peace with you know, something like ten I think the 0:03:22.919 --> 0:03:25.040 reality here is, though we may end up at double that, 0:03:25.600 --> 0:03:28.239 And and to your earlier point, the market's at twenty 0:03:28.240 --> 0:03:32.120 two times earnings. That's above average. The vix is at sixteen. 0:03:32.200 --> 0:03:34.680 Last time I looked well below average. I think that's 0:03:34.720 --> 0:03:37.920 just a very vulnerable you know, setup as I say, 0:03:37.920 --> 0:03:41.080 I'd probably buy any significant weakness, you know, looking further out, 0:03:41.080 --> 0:03:43.800 I wouldn't want to bet against corporate America. I will 0:03:43.840 --> 0:03:46.240 certainly been buying the rest of the world, where you 0:03:46.320 --> 0:03:48.400 have a sort of double discount of sort of cheaper 0:03:48.440 --> 0:03:52.400 currencies and cheaper evaluations. But yes, I think this could 0:03:52.400 --> 0:03:55.240 be our sort of long hot summer with a bit 0:03:55.280 --> 0:03:56.000 of volatility. 0:03:57.360 --> 0:04:00.040 This is a ben I've ever heard. Are you in ken. 0:04:02.960 --> 0:04:04.840 I would certainly be holding a little bit of cash 0:04:05.080 --> 0:04:07.160 ready to buy that dip which I think is coming. 0:04:07.400 --> 0:04:09.160 And I would certainly be looking at the rest of 0:04:09.160 --> 0:04:12.360 the world. I mean, I think the rotation narrative remains 0:04:12.400 --> 0:04:14.200 in place. I think this is worse news for the 0:04:14.280 --> 0:04:15.920 United States than it is for the rest of the 0:04:15.920 --> 0:04:18.599 world economically, and I think the rest of the world 0:04:18.760 --> 0:04:21.159 has buffers that the US doesn't have. The US still 0:04:21.200 --> 0:04:24.640 has this double premium of an expensive currency and expensive 0:04:24.640 --> 0:04:27.720 equity markets, and the rest of the world doesn't. As 0:04:27.760 --> 0:04:29.839 I say, I wouldn't want to bet too much against 0:04:29.880 --> 0:04:32.719 corporate America. I'd be looking for opportunities any sell off 0:04:32.760 --> 0:04:36.760 in tech and healthcare. But I do think, I do 0:04:36.800 --> 0:04:39.680 think we've taken the Tacho narrative too much at face value. 0:04:39.839 --> 0:04:42.440 You know, right here, I think there are you know, 0:04:42.520 --> 0:04:44.880 the Trump puts are still out there, They're just further away. 0:04:45.040 --> 0:04:46.960 I mean, I think there's maybe a new one you 0:04:47.200 --> 0:04:49.680 alluded to earlier of the sort of American stomach. What's 0:04:49.720 --> 0:04:52.320 going to happen when your coffee or induce your sugar, 0:04:52.360 --> 0:04:55.599 your beef is all fifty percent more expensive. You know, 0:04:55.720 --> 0:04:57.159 time will tell and we will find out. 0:04:58.000 --> 0:04:59.360 Ben Leader, thank you so much. 0:05:04.400 --> 0:05:08.000 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:05:08.040 --> 0:05:11.200 weekday afternoons from seven to ten am Eastern Listen on 0:05:11.279 --> 0:05:14.960 Applecarplay and Android Otto with the Bloomberg Business app, or 0:05:15.120 --> 0:05:16.560 watch us live on YouTube. 0:05:16.760 --> 0:05:19.119 This was scheduled and to be an interview of Joy 0:05:19.240 --> 0:05:23.000 talking about the House, the Budget Committee and all. Jody 0:05:23.080 --> 0:05:25.599 Errington is from the Texas that a lot of people, 0:05:25.640 --> 0:05:30.200 particularly Northerners, don't know we fly into DFW. Maybe we've 0:05:30.200 --> 0:05:33.240 got a wandering understanding of San Antoni and down to 0:05:33.279 --> 0:05:37.719 the Mexican border. But the northern Texas of Abilene and 0:05:37.800 --> 0:05:42.560 Delbert McClinton and Buddy Holly's Lubbock is just not talked about. 0:05:43.000 --> 0:05:46.760 Mister Errington is of the nineteenth district in the House 0:05:46.800 --> 0:05:49.680 of Representatives and with the Budget Committee. Jody Errington, thank 0:05:49.680 --> 0:05:51.160 you so much for joining bloomber Well. 0:05:51.160 --> 0:05:55.680 What a beautiful introduction. My folks in the food, fuel 0:05:55.720 --> 0:05:58.440 and fiber capital of the world would be would be 0:05:58.560 --> 0:06:00.560 very pleased and proud by that introduction. 0:06:00.800 --> 0:06:03.719 It is three hundred and some miles down eighty three 0:06:03.880 --> 0:06:09.400 south to Kernville. There's people making that drive today. This 0:06:09.560 --> 0:06:13.080 flood has turned the nation upside down. Give us an update, 0:06:13.160 --> 0:06:13.799 sir well. 0:06:14.200 --> 0:06:21.120 It's unimaginably heart wrenching for the families who've lost, especially 0:06:21.160 --> 0:06:27.279 their children overnight. A wall of river that rows almost 0:06:27.320 --> 0:06:31.440 thirty feet in less than an hour. That area is 0:06:31.520 --> 0:06:34.720 prone to flash floods. We have a ranch about three 0:06:34.760 --> 0:06:37.680 miles up the road from Camp Mystic, which is at 0:06:37.720 --> 0:06:41.600 the epicenter of this, but we've never seen anything like this. 0:06:42.120 --> 0:06:45.720 I don't know how you could prepare for it, but 0:06:46.160 --> 0:06:50.440 we're all praying for that community and those families, and 0:06:50.480 --> 0:06:53.880 there's still folks missing, and I know the governor's committed to, 0:06:54.520 --> 0:06:58.240 you know, not ceasing the search and rescue until everybody's found. 0:06:58.360 --> 0:07:01.840 It's Atlanta, States, Rise less Federal. You had a horrific 0:07:01.920 --> 0:07:06.799 winter storm. The swinter storms, folks in northern Texas are glacial. 0:07:06.920 --> 0:07:10.320 I mean they're like back to the ice age and 0:07:10.360 --> 0:07:12.960 the answers in nineteen twenty one, Lollock and Avelene was 0:07:13.080 --> 0:07:16.600 absolutely leveled and you dialed one eight hundred FEMA to 0:07:16.640 --> 0:07:20.360 get assistance. Is the FEMA of twenty twenty one the 0:07:20.400 --> 0:07:21.480 same as the FEMA now? 0:07:23.000 --> 0:07:25.200 Well, I hope it's much improved, but I'm not sure 0:07:25.240 --> 0:07:28.840 that's the case. I think the President's right to push 0:07:28.920 --> 0:07:32.640 that down at the state, local level, not necessarily the 0:07:32.680 --> 0:07:35.000 resources we're taxed on it one way or the other. 0:07:35.120 --> 0:07:37.840 I just think folks at the local and state level 0:07:37.880 --> 0:07:39.280 are probably best to handle it. 0:07:40.720 --> 0:07:44.920 So Congressman talked to us about this legislation that is 0:07:44.960 --> 0:07:47.800 a big success story for the Trumpet administration. I know 0:07:47.840 --> 0:07:49.080 you had a big hand and it talked to us 0:07:49.080 --> 0:07:52.160 about what this spending bill of this tax bill. What 0:07:52.200 --> 0:07:55.200 does it mean for this economy do you think going forward? 0:07:55.560 --> 0:07:58.760 I think it's significant and it couldn't come at a 0:07:58.800 --> 0:08:03.760 better time. I know there's some uncertainty with the tariff realignment. 0:08:03.880 --> 0:08:06.440 I think that will work out in a very positive 0:08:06.440 --> 0:08:09.480 way when we get these new deals and we have 0:08:09.560 --> 0:08:14.280 reciprocal trade relationships with folks, so I'm supportive of that. 0:08:14.440 --> 0:08:19.400 In the meantime, we have supercharged the growth that we 0:08:19.480 --> 0:08:23.640 saw from the first Trump tax cuts by making permanent, 0:08:23.680 --> 0:08:29.760 for example, business expensing for R and D, capital interest expensing, 0:08:29.920 --> 0:08:33.560 the pro growth provisions there. And then just tax relief 0:08:33.640 --> 0:08:37.800 to working families, not just the marginal rates, but improving 0:08:38.280 --> 0:08:41.280 the standard deduction and making it permanent. And then of 0:08:41.320 --> 0:08:46.199 course there are several working working man provisions. Tax on tips, 0:08:46.520 --> 0:08:52.040 no tax on overtime. Families with children get a supercharge 0:08:52.160 --> 0:08:53.160 of child deduction. 0:08:53.280 --> 0:08:56.559 How does it impact maybe people in your district, some 0:08:56.760 --> 0:08:59.920 a rural district, for example, the folks in your district, 0:09:00.120 --> 0:09:02.600 they here a global walltery here at bloomber we talked 0:09:02.600 --> 0:09:04.640 tariffs all day every day. Did the people in your 0:09:04.679 --> 0:09:08.000 district did they think about that or how did they 0:09:08.000 --> 0:09:10.240 think about some of the economic issues that you're trying 0:09:10.240 --> 0:09:12.400 to address in your bill and maybe the president's trying 0:09:12.400 --> 0:09:13.440 to address with tariffs. 0:09:13.720 --> 0:09:16.520 Well, on the bill, it's just more money in their 0:09:16.679 --> 0:09:20.360 in their pockets, right, that's a good thing for them, 0:09:20.760 --> 0:09:21.800 and they recognize it. 0:09:22.640 --> 0:09:25.480 On the on the other piece, you got ag and 0:09:25.679 --> 0:09:27.880 energy dominate. Yeah, I mean it is the. 0:09:27.880 --> 0:09:30.560 Largest oil patch and cattle feeder system and in the world. 0:09:31.280 --> 0:09:35.840 And so they understand unfair trade, they understand that it's 0:09:35.880 --> 0:09:39.480 not sustainable, and I think they're all in to support 0:09:39.920 --> 0:09:44.439 this president getting to that even competitive playing field. 0:09:45.480 --> 0:09:50.079 I'm looking for folks with this. Jody Arrington here from Texas, 0:09:50.080 --> 0:09:54.559 were thrillies with us in nineteenth congressional district of Northern Texas. 0:09:54.840 --> 0:09:56.560 You know, I look at you. You slipped by in 0:09:56.600 --> 0:09:58.840 the last election. You win eighty percent of the vote. 0:09:58.960 --> 0:10:02.200 I mean, they gotta do better next time. The president 0:10:02.240 --> 0:10:04.760 took Texas with fifty six percent. I don't know what 0:10:04.960 --> 0:10:06.360 you know off the top of your head what he 0:10:06.400 --> 0:10:08.840 took in the nineteenth congressional. 0:10:08.720 --> 0:10:12.079 Lesson me, less you Okay, So we're going to get 0:10:12.120 --> 0:10:12.839 him up there, okay. 0:10:13.040 --> 0:10:15.160 But the bottom line is, at least they had this 0:10:15.200 --> 0:10:18.480 for Michael bart today, student loans are going to affect 0:10:18.559 --> 0:10:21.360 Texas Tech. They're going to affect your Texas Tech. How 0:10:21.400 --> 0:10:25.679 do you balance the Trump mantra of tear the federal 0:10:25.760 --> 0:10:29.439 government apart with those eight hundred and forty two kids 0:10:29.440 --> 0:10:32.080 at Texas Tech. They can't go there this fall. I'm 0:10:32.120 --> 0:10:34.720 making it up, folks, they can't go there this fall 0:10:34.840 --> 0:10:37.880 because of the student loan shifts he's proposing. 0:10:38.760 --> 0:10:41.440 Well, I think the fact that we have all of 0:10:41.480 --> 0:10:44.719 this student aid and not targeted necessarily the people who 0:10:44.760 --> 0:10:46.840 need it, I think is an inflation area, has an 0:10:46.840 --> 0:10:49.760 inflation effect on the cost of education. I'm a former 0:10:49.840 --> 0:10:51.200 vice chancellor at Texas Tech. 0:10:51.240 --> 0:10:54.480 That's my alma mater. And the larger they do with 0:10:54.559 --> 0:10:57.800 the walk on football players, they give him like a 0:10:57.840 --> 0:11:00.839 fancy job. What was it like and you walked down? 0:11:00.960 --> 0:11:04.079 I mean with Patrick Mahams on the field, when you walked. 0:11:03.800 --> 0:11:05.559 Down, I would never have a chance. 0:11:05.720 --> 0:11:09.080 I couldn't even catch the balls that he throws today. 0:11:08.840 --> 0:11:12.400 But this was under the Spike Dyke's era, where just 0:11:12.440 --> 0:11:15.280 about anybody in their body you could fog a mirror, 0:11:15.280 --> 0:11:18.000 could walk on and and in fact, I didn't play 0:11:18.000 --> 0:11:20.840 football in high school. And when the recruiter asked me 0:11:20.880 --> 0:11:23.400 when we sat down right before my physical, He said, 0:11:23.400 --> 0:11:24.440 what did you play in high school? 0:11:24.480 --> 0:11:27.800 I said tennis? And he thought, old man, I want 0:11:27.840 --> 0:11:29.280 to see this question. 0:11:29.920 --> 0:11:32.720 Cowboys are chiefs, you know what. 0:11:33.480 --> 0:11:37.000 Cowboys over the chiefs. But I'm a college football guy. 0:11:37.080 --> 0:11:40.480 I'm not really interested. And we're losing that uniqueness in 0:11:40.520 --> 0:11:46.320 college sports because of Beniel's another conversation. I think we're destroyed. 0:11:46.120 --> 0:11:50.480 Another D one powerhouse, Duke Cosman. 0:11:51.600 --> 0:11:54.360 One of the key topics and key issues for President 0:11:54.400 --> 0:11:57.600 Trump and in his election was immigration. You come from 0:11:57.640 --> 0:11:59.640 a state that is boy that is right on the 0:11:59.679 --> 0:12:02.680 front lines of immigration. How do the folks in your 0:12:02.760 --> 0:12:05.439 district think about it? I mean a lot of these 0:12:05.440 --> 0:12:09.920 folks that come over, they pick our agricultural they build 0:12:09.960 --> 0:12:11.839 our homes, they do all that kind of stuff. 0:12:11.880 --> 0:12:13.160 They bust our tables. 0:12:13.360 --> 0:12:14.960 How do people in your district think about it? 0:12:15.600 --> 0:12:18.839 Well, I think they appreciate the fact that we don't 0:12:18.920 --> 0:12:22.160 have Americans that would do the jobs that are needed 0:12:22.200 --> 0:12:25.880 in the fields. As you mentioned in agriculture. Probably the 0:12:25.920 --> 0:12:29.319 same could be said in the in the oil patch. 0:12:30.400 --> 0:12:34.880 But I think they first and foremost wanted security and 0:12:35.280 --> 0:12:38.560 from a return to law and order from the chaos. 0:12:38.760 --> 0:12:42.520 It's been devastating and I'm just there with law enforcement. 0:12:42.559 --> 0:12:46.920 I'm telling you, the gangs, the drug activity exponential. 0:12:46.520 --> 0:12:47.720 Over the last four years. 0:12:48.040 --> 0:12:50.520 So in order to have the conversation that we need 0:12:50.559 --> 0:12:54.240 to have about legal immigration and making sure we have 0:12:54.440 --> 0:12:56.840 a win win situation with people who want a better 0:12:56.880 --> 0:13:00.000 life and filling the jobs that we need to produce 0:13:00.200 --> 0:13:03.560 the food, fuel, and fire, we had to do. We 0:13:03.679 --> 0:13:05.680 needed a president with the will to do what is 0:13:05.720 --> 0:13:08.920 being been done by this president in terms of border security, 0:13:09.280 --> 0:13:12.240 but there's more to be done on the legal side 0:13:12.559 --> 0:13:16.120 so that we can continue to facilitate the economic. 0:13:15.760 --> 0:13:19.160 Okay, including agriculture, which is a small matter from apling 0:13:19.880 --> 0:13:22.400 to love it to cut to the chase. Henrietta Tre's 0:13:22.520 --> 0:13:26.320 beautiful analyst was on earlier and says they're almost hiding 0:13:26.360 --> 0:13:29.720 the president's langeductedness because Jodie Arrington has to get re 0:13:29.800 --> 0:13:35.319 elected in November of twenty twenty six. What's your Republican 0:13:35.360 --> 0:13:40.480 Party in particularly the Texas delegation look like after President Trump? 0:13:40.960 --> 0:13:43.880 Is this like a moment and you guys shift back 0:13:43.920 --> 0:13:47.040 to you know, hating Lyndon Baines Johnson or you know 0:13:47.080 --> 0:13:50.600 what does the framework look like after Trump. 0:13:51.600 --> 0:13:56.120 I think President Trump's philosophy and focus on America First 0:13:56.120 --> 0:13:57.960 is here to stay. I think it's here to stay 0:13:58.080 --> 0:14:01.640 for all the right reasons, and I think it resonates 0:14:01.640 --> 0:14:04.480 with all the Republican districts, certainly in Texas. I mean, 0:14:04.480 --> 0:14:08.000 it's a ruby red state, and so putting our ag 0:14:08.040 --> 0:14:12.280 producers first in trade, putting our families first in allowing 0:14:12.320 --> 0:14:14.720 them to keep more of their money, putting the safety 0:14:15.080 --> 0:14:16.360 of our families first. 0:14:16.880 --> 0:14:18.800 Again, We've been at ground zero in. 0:14:18.760 --> 0:14:21.640 This border crisis for several years now, So. 0:14:22.280 --> 0:14:22.920 I don't think it. 0:14:23.640 --> 0:14:28.000 I think it remains the America First agenda into the future, 0:14:29.480 --> 0:14:31.280 and I think that's a good thing, and I think 0:14:31.320 --> 0:14:32.640 they will support that. 0:14:32.720 --> 0:14:35.640 Does he understand H two A program and dairy farms. 0:14:35.720 --> 0:14:37.120 I think he does. I think he does. 0:14:37.160 --> 0:14:39.560 In fact, he's the one that led me did that well. 0:14:39.600 --> 0:14:43.200 In the first Trump administration. You'll recall he actually pushed 0:14:43.200 --> 0:14:47.360 our party to a deal in fixing H two A. 0:14:47.480 --> 0:14:49.680 It was called H two C. It was a reform, 0:14:50.000 --> 0:14:50.400 it was a. 0:14:50.400 --> 0:14:54.520 Much improved reform along with giving legal status to Dhaka. 0:14:54.800 --> 0:14:58.000 He pushed our party outside of our comfort. It failed 0:14:58.440 --> 0:15:00.480 ultimately because we didn't get a Democrat to support it. 0:15:00.600 --> 0:15:03.600 We continue with Jody Arrington of the nineteenth Congressional Diistic. 0:15:03.720 --> 0:15:06.640 This is Northern Texas. Paul did an all night or 0:15:06.720 --> 0:15:09.600 Friday and Saturday. Did you watch all of land Man? 0:15:09.720 --> 0:15:09.800 Oh? 0:15:09.880 --> 0:15:12.240 Yeah, I'm all in. I know everything you know about oil. 0:15:12.080 --> 0:15:14.200 And gas when you see Landman? Is it fiction? 0:15:15.000 --> 0:15:15.080 No? 0:15:15.200 --> 0:15:16.440 I think he's pretty true to form. 0:15:16.480 --> 0:15:18.720 Actually, yeah, for better for worse. 0:15:18.880 --> 0:15:21.040 So it's funny when you think about Texas and energy. 0:15:21.240 --> 0:15:23.240 Obviously you think about the oil and gas, but you 0:15:23.280 --> 0:15:25.600 guys also have tons of wind farms and solar and 0:15:25.840 --> 0:15:28.040 you kind of lead the nation all of those things. 0:15:28.400 --> 0:15:30.400 So how does the folks out in your district? How 0:15:30.440 --> 0:15:34.080 did they think about, you know, fossil fuels versus you know, 0:15:34.160 --> 0:15:35.960 alternative energy? I guess is the term? 0:15:35.960 --> 0:15:36.800 How did they think about that? 0:15:37.600 --> 0:15:40.840 I think most folks are for all the above. I 0:15:40.920 --> 0:15:44.600 just think it's how you get there. Accelerating R and 0:15:44.720 --> 0:15:48.440 D for example, where we accelerate the amortization. We make 0:15:48.480 --> 0:15:52.880 that expensing immediate and permanent in this tax bill, as long. 0:15:52.760 --> 0:15:54.320 As it's technology neutral. 0:15:54.400 --> 0:15:57.160 I don't think they want the government picking winners and losers. 0:15:57.560 --> 0:16:01.160 I think they see the good that could come of 0:16:01.240 --> 0:16:04.800 renewable resources in the future. Obviously fossil is finite, but 0:16:04.880 --> 0:16:10.560 after the natural gas shale revolution, we have an ocean 0:16:10.720 --> 0:16:14.479 of this great resource, and so we don't want a distortion. 0:16:14.840 --> 0:16:19.840 We don't want regressive inflationary energy policies. We want it 0:16:19.880 --> 0:16:24.720 even playing field. But no one's averse to all the above, 0:16:24.760 --> 0:16:29.440 including renewable. It's just how aggressive we've been a at 0:16:29.480 --> 0:16:34.080 accelerating with tax benefits for renewable while b over the 0:16:34.160 --> 0:16:37.360 last four years being hostile to our bread and butter, 0:16:37.800 --> 0:16:39.680 which has put a lot of people on the defensive. 0:16:39.760 --> 0:16:41.760 Question, how do you respond in the bill that Paul 0:16:41.880 --> 0:16:46.280 mentioned that the huge benefit goes to the wealthy, granted 0:16:46.320 --> 0:16:48.640 the wealthy on a percentage basis or paying a lot 0:16:48.680 --> 0:16:52.840 of taxes. How the middle class of Lubbock and Abolene 0:16:53.400 --> 0:16:55.200 fair in this bill. 0:16:55.240 --> 0:16:58.640 I think they believe and have experienced that the value 0:16:58.680 --> 0:17:01.760 of the tax breaks that we extended from the first 0:17:01.760 --> 0:17:06.000 Trump administration in seventeen are greater among the lower and 0:17:06.040 --> 0:17:10.200 middle income folks than the upper upper income, and in fact, 0:17:10.640 --> 0:17:14.600 the top one percent pay a greater share, and in fact, 0:17:15.400 --> 0:17:18.000 the top ten percent of the income owners in the 0:17:18.040 --> 0:17:21.159 country paid seventy percent of all the federal bills. 0:17:21.440 --> 0:17:22.919 Now they pay seventy five percent. 0:17:23.560 --> 0:17:26.840 You're in a Paul mentioned this earlier. You're in a house. 0:17:27.000 --> 0:17:31.320 You guys are riding tall. Maybe you lose House, Senate 0:17:31.400 --> 0:17:34.960 president here over the next two four years ago, what's 0:17:34.960 --> 0:17:38.280 your response to how the Democrats have been so ineffective 0:17:39.080 --> 0:17:42.159 off of the election. You barely won the House. We 0:17:42.280 --> 0:17:45.800 witnessed that, you barely won the Senate. Good morning, Vice 0:17:46.040 --> 0:17:50.560 president advantage, we witnessed. We witnessed that. I mean, are 0:17:50.600 --> 0:17:53.320 you surprised that the Democrats can't get their act together? 0:17:53.520 --> 0:17:53.840 I am? 0:17:54.160 --> 0:17:56.120 I mean, I'm in the land of Anne Richards. I mean, 0:17:56.160 --> 0:17:57.000 she was iconic. 0:17:57.960 --> 0:18:03.080 I am. They are still wondering why. I don't know. 0:18:03.160 --> 0:18:06.399 I think they're so used to being against President Trump 0:18:06.600 --> 0:18:12.280 and making demonizing him that that has become And then 0:18:12.320 --> 0:18:16.560 you've got the left that has overpowered their party to 0:18:16.640 --> 0:18:18.840 the point that it's going to be really difficult to 0:18:18.880 --> 0:18:23.240 break free from their agenda that is disconnected from from 0:18:23.640 --> 0:18:24.840 mainstream Americans. 0:18:25.280 --> 0:18:26.400 Why are you in New York? 0:18:27.359 --> 0:18:29.800 Well, I'm here to tell the good news, the gospel 0:18:30.000 --> 0:18:34.280 of prosperity and security and opportunity that is going to 0:18:34.359 --> 0:18:36.960 come when you get the right policies and set the 0:18:37.000 --> 0:18:39.840 right conditions. We've done it, and I want people to 0:18:39.880 --> 0:18:41.119 know that help is on the way. 0:18:41.280 --> 0:18:46.600 If if we do a remote from Abilene, all we're 0:18:46.640 --> 0:18:50.359 the Lukes's Love Texas. 0:18:50.640 --> 0:18:55.520 This guy knows his Texas. He knows his Texas well. 0:18:55.520 --> 0:18:57.639 You're well choed anytime. 0:18:57.520 --> 0:18:59.840 Jody, thank you so much for joining us. Today's an 0:19:00.040 --> 0:19:04.320 nineteenth district the Real Texas at Delbert McClinton and one 0:19:04.440 --> 0:19:08.040 Buddy Holly from years ago. Jody Erinton, thank you so much. 0:19:08.400 --> 0:19:12.280 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:19:12.320 --> 0:19:15.719 starting at seven am Eastern on Applecarplay and Android Auto 0:19:15.760 --> 0:19:18.720 with the Bloomberg Business App. You can also listen live 0:19:18.800 --> 0:19:22.359 on Amazon Alexa from our flagship New York station. Just 0:19:22.400 --> 0:19:24.879 say Alexa play Bloomberg eleven thirty. 0:19:25.040 --> 0:19:26.920 This is going to be a good interview now, it's 0:19:26.920 --> 0:19:29.720 a critical interview. In fact, it may be our interview 0:19:29.800 --> 0:19:32.879 of the day. Joining us now from London, Jane Foley 0:19:32.960 --> 0:19:36.760 joins US head of Foreign Exchange statu to Strategy and 0:19:36.840 --> 0:19:41.360 tariff theory at Robobank. Jane, Robobank, with all of its 0:19:41.400 --> 0:19:45.679 centuries of tradition has to have a radar on the 0:19:45.760 --> 0:19:50.360 tariff dynamics. How is the chure now? The thirty year 0:19:50.480 --> 0:19:56.800 French bond in price has declined over seven percent since 0:19:57.280 --> 0:20:03.399 Donald Trump's inauguration, with a markets seizing in Europe? Is 0:20:03.440 --> 0:20:06.640 this different than Liberation Day one, say April third? 0:20:08.760 --> 0:20:12.159 Oh yeah, well, good morning Tom, Well, good morning everyone 0:20:12.200 --> 0:20:14.119 that you know it is. There's a very different feeling. 0:20:14.119 --> 0:20:16.359 And I think we can really extrapolate from what you 0:20:16.400 --> 0:20:19.000 were just hearing from your former guest, you know, straight 0:20:19.040 --> 0:20:22.640 back into the bond market, straight back into to foreign exchange. 0:20:22.680 --> 0:20:26.120 The market is just not as worried right now as 0:20:26.160 --> 0:20:29.800 it was on April the second. Now, you know, in 0:20:29.840 --> 0:20:33.320 agreement with your your previous guest, if we are in 0:20:33.359 --> 0:20:37.760 for a shock then on August the FIR with significant tariffs, 0:20:37.760 --> 0:20:42.320 say thirty twenty five percent tariffs for Europe, well the 0:20:42.359 --> 0:20:45.600 market is not necessarily priced for that, and that could 0:20:45.600 --> 0:20:50.199 certainly send you know, significant amount of gloom. Particularly you know, 0:20:50.240 --> 0:20:53.200 you consider the Eurozone economy. You know what is Germany 0:20:53.240 --> 0:20:56.080 facing right now? Well, it's always been facing pretty high 0:20:56.160 --> 0:20:59.080 energy cast labor market shortages, and then of course you 0:20:59.160 --> 0:21:02.120 put on top of that at the possibility of tariffs 0:21:02.119 --> 0:21:04.480 at a time with the exchange rate is is really 0:21:04.560 --> 0:21:07.800 quite strong. Well, you know that is not a pretty picture, 0:21:07.920 --> 0:21:10.160 and certainly the market will be worried. 0:21:10.280 --> 0:21:13.960 Fancy excuse me, Jane, I'm thinking I'm talking to Francy Lacuah. 0:21:14.119 --> 0:21:16.760 I mean they both went to Wimbledon. I'm sorry, Jane, 0:21:17.760 --> 0:21:20.480 I'm looking at the linkage here between your litmus paper 0:21:20.560 --> 0:21:23.560 pH in exchange and I got log convexity in the 0:21:23.600 --> 0:21:27.600 French thirty year bond price down big time. Mister mcclah 0:21:27.920 --> 0:21:31.919 has gone ooh la la uh Jane, how are they linked? 0:21:31.960 --> 0:21:35.280 And does it mean dxy back to one hundred Paul 0:21:35.359 --> 0:21:37.840 gets euro back to one oh five before he goes 0:21:37.880 --> 0:21:41.680