WEBVTT - The Fed Weighs Tariffs & Taxes 0:00:02.400 --> 0:00:06.720 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.920 --> 0:00:16.320 This is the Bloomberg Surveillance Podcast. Catch us live weekdays 0:00:16.320 --> 0:00:19.640 at seven am Eastern on Apple car Player, Android Auto 0:00:19.720 --> 0:00:23.080 with the Bloomberg Business App. Listen on demand wherever you 0:00:23.120 --> 0:00:26.120 get your podcasts, or watch us live on YouTube. 0:00:26.239 --> 0:00:27.680 Joining us down to get started. 0:00:27.760 --> 0:00:32.879 She Wolston Holiday Dress interat how many parties do you 0:00:32.920 --> 0:00:33.479 have tonight? 0:00:33.520 --> 0:00:33.680 Oh? 0:00:33.720 --> 0:00:35.120 My goodness, do you like only one? 0:00:35.520 --> 0:00:36.080 Only one? 0:00:36.400 --> 0:00:37.000 Just one party? 0:00:37.120 --> 0:00:37.279 Yes? 0:00:37.600 --> 0:00:38.640 Yes, Joining us. 0:00:38.520 --> 0:00:41.159 Rebecca Petis and iconic at JP Morgan of course, a 0:00:41.240 --> 0:00:44.960 tour of duty at Bridgewater as well. 0:00:45.120 --> 0:00:46.680 You came in and you whispered to Paul. 0:00:46.760 --> 0:00:48.680 You said, strong dollar. 0:00:49.240 --> 0:00:50.680 How strong a dollar? 0:00:51.440 --> 0:00:54.760 Well, a lot stronger than consensus has for next year. 0:00:54.840 --> 0:00:56.960 So most of the big investment banks are looking for 0:00:57.040 --> 0:00:59.160 weakness in the dollar, especially in the second half. 0:00:59.040 --> 0:00:59.400 Of the year. 0:01:00.320 --> 0:01:01.040 I don't see it. 0:01:01.120 --> 0:01:03.760 You've got a divergence in interest rates, even though that's 0:01:03.800 --> 0:01:06.320 somewhat priced in, but it's going to favor the dollar. 0:01:06.680 --> 0:01:09.320 You have much stronger growth in the US, which I 0:01:09.360 --> 0:01:11.920 think will continue to bring capital to the US, which 0:01:11.920 --> 0:01:15.000 will help the dollar. And in a case where President 0:01:15.040 --> 0:01:18.920 elect Trump decides to go hardcore on the tariffs. We've 0:01:18.959 --> 0:01:21.760 seen historically that that tends to be a positive for 0:01:21.840 --> 0:01:25.240 the dollar and weakness and currencies overseas. So the only 0:01:25.280 --> 0:01:27.520 case where I think the dollar weekends next year is 0:01:27.560 --> 0:01:30.080 if the US moderates while the rest of the world 0:01:30.160 --> 0:01:34.760 is gaining momentum, which moves capital overseas. Possible, but I 0:01:34.840 --> 0:01:37.520 just don't think the probability is as high as what 0:01:37.640 --> 0:01:38.959 consensus is suggesting. 0:01:39.040 --> 0:01:40.920 So I'm asking me for a friend here, could the 0:01:41.040 --> 0:01:42.200 euro get to parody? 0:01:42.400 --> 0:01:45.000 I think the euro is likely to break through parody. 0:01:44.800 --> 0:01:46.839 Now next year party, So there you go. I'm putting 0:01:46.880 --> 0:01:48.520 it out there, all right. I mean, for our friends 0:01:48.560 --> 0:01:51.080 that like to go to Rome in Paris, Lisa, that's 0:01:51.120 --> 0:01:53.000 a good thing. For those of us who stay in 0:01:53.000 --> 0:01:55.000 New Jersey, and that's so much of a thing, all right, 0:01:55.080 --> 0:01:57.160 talk to us about the equity markets. I've heard so 0:01:57.240 --> 0:02:00.240 much discussion over the past month or two of out 0:02:01.400 --> 0:02:06.200 international investors coming to the US market. Is is this 0:02:06.240 --> 0:02:09.639 activity unusual? Is it typical? What do you make of it? 0:02:09.960 --> 0:02:11.920 I mean, the risk that I think a lot of 0:02:11.919 --> 0:02:15.160 people are pointing out is that the US equity market, 0:02:15.320 --> 0:02:17.440 relative to the rest of the world, has gotten very 0:02:17.480 --> 0:02:21.359 expensive and heavily owned by foreign investors, international investors and 0:02:21.440 --> 0:02:24.880 domestic investors, and so there are. It feels like a 0:02:24.960 --> 0:02:27.920 drum beat now of calls that the US is in 0:02:27.960 --> 0:02:30.760 a bubble. The US could slow down next year. We'll 0:02:30.760 --> 0:02:33.480 get money going overseas because the valuations are much better. 0:02:33.840 --> 0:02:37.320 And the thing I always come back to is valuations matter, 0:02:37.400 --> 0:02:41.000 but aren't sufficient. You need a catalyst. And that's what 0:02:41.040 --> 0:02:43.600 I keep looking for. Is China pull out all the 0:02:43.639 --> 0:02:45.959 stops and held the consumer. Does Germany get rid of 0:02:46.000 --> 0:02:49.440 the debt break? And is that stimulus sufficient? I'm skeptical 0:02:49.480 --> 0:02:51.919 it is, which makes me think the US can stay 0:02:52.040 --> 0:02:55.360 the outperformer next year in terms of equities. But I'm 0:02:55.400 --> 0:02:56.280 watching those risks. 0:02:56.320 --> 0:02:58.600 Given where we are, let's fuld the correlated mess. 0:02:58.600 --> 0:03:00.160 I put out a tweet here we got d x 0:03:00.320 --> 0:03:03.000 Y through one oh seven. I got a ten year 0:03:03.080 --> 0:03:07.080 real yield out to two point zero three percent. To me, 0:03:07.160 --> 0:03:09.320 the single two sentences of the weekend was a guy 0:03:09.360 --> 0:03:14.200 named Sam Row, always suspect Sam Row channeling Liz Anne 0:03:14.200 --> 0:03:17.639 Saunders and Kevin Gordon and Charles Schwab on a beautiful 0:03:17.720 --> 0:03:22.120 scattered dot study that says it's not correlated. You can't 0:03:22.160 --> 0:03:26.239 take one year forward pe multiples like barons one on 0:03:26.240 --> 0:03:29.840 one and say market up or market down. What signals 0:03:29.840 --> 0:03:32.720 do you take from the equity market that bring you 0:03:32.760 --> 0:03:35.800 over to bonds, that bring you over to foreign exchange. 0:03:36.480 --> 0:03:37.440 That's a great question. 0:03:37.560 --> 0:03:41.440 So it's to me, there's a chicken and egg situation here. 0:03:42.280 --> 0:03:44.880 Does the equity market drive the currency? Does the currency 0:03:44.960 --> 0:03:47.840 drive the equity market and pull in bonds too? They 0:03:47.840 --> 0:03:52.040 all influence each other, and often it's which one is dominant. 0:03:52.120 --> 0:03:54.360 We'll be driving which one is having the bigger move, 0:03:54.440 --> 0:03:57.280 the greater momentum. So you can see a big move 0:03:57.320 --> 0:03:59.040 in bonds if we have a big rise in the 0:03:59.040 --> 0:04:01.840 ten year yield that not purely driven by growth, that 0:04:01.920 --> 0:04:04.760 can poll equity is lower. But we can also see 0:04:04.800 --> 0:04:08.440 if there's growth optimism about US exceptionalism, the tenure can 0:04:08.440 --> 0:04:10.200 go up and stocks go up with it, and the 0:04:10.280 --> 0:04:10.920 dollar goes up. 0:04:10.920 --> 0:04:12.680 Everything earlier there's a bubble. 0:04:12.800 --> 0:04:14.680 I don't see a bubble bubble. 0:04:14.920 --> 0:04:17.039 I did not say there's a bubble. I said there's 0:04:17.080 --> 0:04:17.880 a rugby morning. 0:04:17.920 --> 0:04:19.120 I'm trying to wake people up there. 0:04:19.160 --> 0:04:22.440 I want to be clear what I'm saying. The US 0:04:22.440 --> 0:04:25.279 market is expensive. If you look at a twelve month 0:04:25.320 --> 0:04:28.279 forward price earnings ratio, if you look at EPs growth 0:04:28.320 --> 0:04:31.159 priced in for next year for US stocks, if you 0:04:31.240 --> 0:04:35.520 look at ownership. But we know from history, to your point, Tom, 0:04:35.760 --> 0:04:39.240 that what happened this year has zero correlation with what 0:04:39.320 --> 0:04:42.520 happens next year. So the market could continue to rise 0:04:42.560 --> 0:04:45.000 if we have decent growth in the US and there 0:04:45.080 --> 0:04:47.520 aren't a lot of alternatives for your money. And I 0:04:47.560 --> 0:04:51.159 think that scenario is probably the most likely one. 0:04:51.800 --> 0:04:54.920 How About we had the election last month here, big 0:04:55.000 --> 0:04:58.479 change is coming starting in January of twenty twenty five 0:04:58.520 --> 0:05:01.320 here in US policy. Your outlook at all or your 0:05:01.360 --> 0:05:05.640 allocation or where you want to find risk in the marketplace. 0:05:05.720 --> 0:05:08.800 Yeah, the one thing that I think investors should be 0:05:08.839 --> 0:05:12.560 really thinking about our scenarios because we simply don't know 0:05:12.680 --> 0:05:15.560 yet what President elect Trump and his administration are going 0:05:15.640 --> 0:05:19.520 to do in terms of sequencing and size. So when 0:05:19.640 --> 0:05:23.599 do tariffs happen and how big are they, what kind 0:05:23.600 --> 0:05:26.719 of deportation do we see? Those are big downside risks 0:05:26.760 --> 0:05:29.520 in my opinion for the equity market. I don't think 0:05:29.560 --> 0:05:32.880 they're being priced in right now, but we don't know, 0:05:33.279 --> 0:05:35.599 And so if you don't know what's going to happen, 0:05:35.640 --> 0:05:37.760 you have a wider cone of outcomes. You need to 0:05:37.760 --> 0:05:40.960 be having some hedges in your portfolio. So fine, have 0:05:41.080 --> 0:05:44.159 fun with financials that are going to benefit from deregulation 0:05:44.240 --> 0:05:49.039 and growth, have fun with your digital asset related assets, 0:05:49.080 --> 0:05:51.159 so to speak. But then make sure you have a 0:05:51.200 --> 0:05:54.760 few defensive positions as well in case some of these 0:05:54.800 --> 0:05:59.119 negatives become reality. So I would look overseas at the UK, 0:05:59.440 --> 0:06:03.880 I would look overseas, possibly at Switzerland. Within the United States, 0:06:04.640 --> 0:06:09.119 I think things like energy, healthcare utilities can play a role, 0:06:09.320 --> 0:06:11.719 not in large size, but some pieces of it. Just 0:06:11.760 --> 0:06:15.040 to give you those hedges for those less friendly scenarios. 0:06:15.160 --> 0:06:18.640 Our viewers or listeners have a collective memory of President 0:06:18.720 --> 0:06:25.280 Trump railings a strong dollar. Everything you said is against 0:06:25.320 --> 0:06:29.640 a genetic structure of Donald Trump. He wants a week 0:06:29.760 --> 0:06:32.239 dollar to keep US exports going. 0:06:32.760 --> 0:06:34.640 Are you suggesting that's done. 0:06:35.800 --> 0:06:39.040 Trump has gotten a little more balanced in his currency 0:06:39.080 --> 0:06:42.080 comments over the last few months, and certainly the Treasury 0:06:42.160 --> 0:06:46.760 Secretary nominee Scott Bessant is also more balanced in terms 0:06:46.800 --> 0:06:50.679 of his view on the dollar. So if the dollar 0:06:50.720 --> 0:06:53.280 is very strong and we're seeing that hurt exporters in 0:06:53.360 --> 0:06:56.000 the data. Of course we're going to get some tweets 0:06:56.080 --> 0:06:57.440 or posts or whatever. 0:06:57.560 --> 0:06:57.760 You know. 0:06:57.839 --> 0:07:00.960 The president elect is into that day, but what can 0:07:01.000 --> 0:07:03.400 he actually do about it. I don't think we have 0:07:03.520 --> 0:07:06.600 a new Plaza accord or a mar Lago accord. I 0:07:06.640 --> 0:07:08.520 don't think that's in the cards. 0:07:08.760 --> 0:07:14.360 Golf course in Scotland. He is turn Turny, a turnberrier. 0:07:14.880 --> 0:07:17.559 Everybody works killed. Yeah, I can see president elected killed. 0:07:17.760 --> 0:07:20.520 Sure, talk to us about avocados. 0:07:21.440 --> 0:07:25.840 Okay, so I have been Yes, we're talking about avocados. 0:07:26.440 --> 0:07:27.760 So amazing. 0:07:29.760 --> 0:07:30.960 Surveillance go. 0:07:31.440 --> 0:07:33.960 So you think about risks in the next year. And 0:07:34.080 --> 0:07:36.840 one risk that I think is on people's radar screens 0:07:36.880 --> 0:07:40.800 but maybe not enough, is a resurgence of inflation. And 0:07:40.880 --> 0:07:43.480 one area I think you want to watch is food inflation. 0:07:44.600 --> 0:07:48.240 US farmers are struggling right now. They can't get enough workers. 0:07:48.760 --> 0:07:53.760 Uh and seventy percent of workers in US farming are immigrants, 0:07:54.280 --> 0:07:57.680 about half of those are illegal immigrants. If you reduce 0:07:57.760 --> 0:08:00.840 the workers, you can't get the crops out of the ground. 0:08:01.200 --> 0:08:05.000 Prices go up, profits go down. In addition to that, though, 0:08:05.080 --> 0:08:08.160 the tariffs are a big hit on US farmers. In 0:08:08.920 --> 0:08:12.280 twenty eighteen nineteen, those that year period alone, they lost 0:08:12.320 --> 0:08:16.480 twenty seven billion dollars in export revenue. Now, last time 0:08:16.600 --> 0:08:19.680 Trump failed them out, they got over eighty billion dollars 0:08:19.720 --> 0:08:22.600 in government subsidies. This time they don't have as much 0:08:22.640 --> 0:08:26.000 free money flowing to hand out. So why do avocados 0:08:26.040 --> 0:08:29.280 come in the mix. Because ninety percent of American avocados 0:08:29.320 --> 0:08:32.760 come from Mexico. And if we don't have people to 0:08:32.880 --> 0:08:35.560 get those avocados out of the ground here in California, 0:08:35.960 --> 0:08:40.800 and the tariffs on Mexico are causing some retaliation, avocados 0:08:40.840 --> 0:08:42.920 are going to become a luxury good I wrote about 0:08:42.920 --> 0:08:44.480 it in the New York Times this past week. 0:08:44.559 --> 0:08:46.360 I saw it, but Paul helped me. 0:08:46.440 --> 0:08:50.840 Here. We didn't know what avocado was until what fifteen 0:08:50.920 --> 0:08:51.360 years ago? 0:08:51.400 --> 0:08:53.760 The guacam only the kids with the quaka, it was guak. 0:08:54.160 --> 0:08:57.080 You know, if you want, that's a main three Americans. 0:08:57.360 --> 0:09:00.600 I mean, double the price of guac for super you 0:09:00.640 --> 0:09:02.080 will have angry voters. 0:09:03.240 --> 0:09:06.920 See, I told you each avocado contains fifty eight milligrams 0:09:06.960 --> 0:09:07.880 of magnesium. 0:09:08.200 --> 0:09:10.800 Sure, is there anything bad about avocados? 0:09:11.000 --> 0:09:13.400 Lisa, Come on, Lisa, get with it. 0:09:13.400 --> 0:09:15.160 It's a healthy fat. It's very good for you. 0:09:16.000 --> 0:09:18.560 Avocados. Do you buy him by the bushel at costco? 0:09:18.760 --> 0:09:20.520 We sure do, do you really? 0:09:20.640 --> 0:09:20.920 I do? 0:09:21.000 --> 0:09:22.880 I buy the big bag. They come a little bit hard, 0:09:22.920 --> 0:09:23.960 so you got to kind of put them in the 0:09:24.040 --> 0:09:26.880 cabinet to ripe off. Yeah, but that's the. 0:09:26.800 --> 0:09:29.240 Way to do it. The budget deficits has widened. This 0:09:29.320 --> 0:09:32.160 is from your optioned from three point nine percent of 0:09:32.160 --> 0:09:35.040 gross domestic product in twenty eighteen to six point four 0:09:35.120 --> 0:09:38.600 percent today, suggesting that maybe the US government will not 0:09:38.679 --> 0:09:42.679 have the same capability to support farmers in such a scenario. 0:09:42.679 --> 0:09:44.280 I mean they're going to feel pressure to do that, 0:09:44.480 --> 0:09:47.560 for sure. Farms are all across the country, our amber 0:09:47.640 --> 0:09:51.760 waves of grain, right, so they're going to be pressure. 0:09:51.840 --> 0:09:53.560 But are they going to find the money? It's going 0:09:53.600 --> 0:09:55.680 to be harder to find the money this time. Is 0:09:55.720 --> 0:09:57.440 Elon going to let them have the money? 0:09:57.600 --> 0:09:57.800 Right? 0:09:57.880 --> 0:10:01.520 Where's the best avocado restaurant in New York City? Oh? 0:10:01.640 --> 0:10:02.640 Massive craving word? 0:10:02.720 --> 0:10:07.600 Okay, Rosa Mexicano tabletop guacamole. They come and make it 0:10:07.640 --> 0:10:10.480 in front of you and you can customize it. That's 0:10:10.520 --> 0:10:11.320 still my go to. 0:10:11.720 --> 0:10:12.560 Yep, very good. 0:10:12.760 --> 0:10:17.280 See I'm now I'm now in holiday mode. You just 0:10:17.320 --> 0:10:18.520 officially got me there. 0:10:19.640 --> 0:10:22.320 Becky Patterson, thank you so much for joining us. 0:10:27.559 --> 0:10:31.400 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:10:31.520 --> 0:10:34.800 weekday afternoons from seven to ten am Eastern. Listen on 0:10:34.880 --> 0:10:38.080 Apple car Play and Android Auto with a Bloomberg Business app, 0:10:38.200 --> 0:10:39.960 or watch us live on YouTube. 0:10:40.240 --> 0:10:43.160 Henrietta Trace joins us right now with Veda Partners. 0:10:44.040 --> 0:10:47.160 She's just been absolutely famous, Henriette, there is really only 0:10:47.240 --> 0:10:52.559 one question. Are there Are there Republican senators that are 0:10:52.600 --> 0:10:56.480 going to push against their president? There was confusion over 0:10:56.520 --> 0:10:57.040 the weekend. 0:10:59.120 --> 0:11:00.920 I think there's a lot of things to push back 0:11:01.000 --> 0:11:04.120 against incoming President Trump over you know, some of the 0:11:04.160 --> 0:11:07.760 nominees that he's picked, whether it's tanksas or RFK Junior. 0:11:08.360 --> 0:11:12.200 You're starting to see it in individual little baskets. We're 0:11:12.200 --> 0:11:14.600 dealing with the government funding bill that has not been 0:11:14.640 --> 0:11:17.640 released yet because it continues and increases federal spending and 0:11:17.760 --> 0:11:20.120 creates a problem with you know, eighty to one hundred 0:11:20.120 --> 0:11:22.360 and fifty House Republican members. So I think they're picking 0:11:22.400 --> 0:11:24.800 and choosing which areas they want to fight the president over. 0:11:25.440 --> 0:11:28.240 So let's go to that issue here. I'm always when 0:11:28.280 --> 0:11:30.800 you people talk about funding the government and shutdowns. It 0:11:30.840 --> 0:11:33.120 kind of gets my attention here. Just walk us through 0:11:33.160 --> 0:11:35.599 the timeline about what our Congress is going to be 0:11:35.600 --> 0:11:37.800 doing over the next several weeks as it relates to 0:11:37.920 --> 0:11:39.080 keeping this government open. 0:11:39.640 --> 0:11:40.520 Yeah, great question. 0:11:40.960 --> 0:11:43.160 Right now, they're going to vote on a National Defense 0:11:43.200 --> 0:11:46.360 Authorization Act, which increases federal spending for that sector by 0:11:46.400 --> 0:11:49.280 one percent to eight hundred and eighty four billion dollars. 0:11:49.320 --> 0:11:52.600 If I'm not mistaken, it includes you know, fourteen percent 0:11:52.679 --> 0:11:54.599 uptick for a junior enlisted serviceman. 0:11:54.840 --> 0:11:57.120 And that's the package that they'll pass this. 0:11:57.120 --> 0:11:59.959 Week while we wait to release the government funding bill, 0:12:00.120 --> 0:12:03.679 which will similarly increase federal spending by one hundred billion 0:12:03.720 --> 0:12:06.959 dollars roughly just to get us into March. So we're 0:12:07.040 --> 0:12:09.280 kind of trying to clear the decks, but they're not 0:12:09.320 --> 0:12:10.520 clearing it for any kind. 0:12:10.320 --> 0:12:11.000 Of long duration. 0:12:11.160 --> 0:12:14.200 It's just until about March fourteenth of twenty twenty five, 0:12:14.480 --> 0:12:17.000 which means almost as soon as we pass this hurdle 0:12:17.040 --> 0:12:19.040 to keep the government open, we're going to be facing 0:12:19.080 --> 0:12:22.439 another shutdown early next year, which very likely could. 0:12:22.240 --> 0:12:24.960 Get in the way of the Republican agenda. 0:12:24.679 --> 0:12:29.160 Around this first smaller Reconciliation Bill on Immigration, Defense and 0:12:29.200 --> 0:12:32.400 the Order, and that's going to be the story of 0:12:32.559 --> 0:12:34.560 next to its starts. 0:12:34.320 --> 0:12:36.800 Well to the mystery of what Senator is going to 0:12:36.800 --> 0:12:40.560 do with the different controversial cabinet picks. Is the tea 0:12:40.640 --> 0:12:44.240 party ish type of the House going to go against 0:12:44.320 --> 0:12:47.160 their president on March fourteenth? 0:12:47.720 --> 0:12:50.640 You know? I think this is the real issue that 0:12:50.679 --> 0:12:53.040 we have, which is Speaker Johnson has a zero vote 0:12:53.040 --> 0:12:55.600 margin until April when he's going to have a whopping 0:12:55.640 --> 0:12:56.640 to vote margin. 0:12:56.760 --> 0:12:59.040 So House Republicans lost seats. 0:12:58.800 --> 0:13:01.120 Last election cycle, which is something that doesn't get I 0:13:01.120 --> 0:13:03.760 think reported enough, and that's going to be even more 0:13:03.800 --> 0:13:05.920 difficult for Speaker Johnson to keep the job and to 0:13:06.000 --> 0:13:08.160 keep the government open into next year. To answer your 0:13:08.240 --> 0:13:11.520 question directly, absolutely, I think that the Republicans in the 0:13:11.520 --> 0:13:14.320 next cr will probably lose one hundred and fifty House 0:13:14.360 --> 0:13:17.040 Republican members when they go to keep the government open 0:13:17.200 --> 0:13:19.520 under President Trump in twenty twenty five. 0:13:20.480 --> 0:13:23.480 All right, So I don't know how that wow, how 0:13:23.480 --> 0:13:25.760 that's going to play out, Henriette, I talked to us. 0:13:25.800 --> 0:13:29.120 I guess maybe a little bit more immediate in acounter 0:13:29.360 --> 0:13:32.120 is some of these nominations that still have to go 0:13:32.200 --> 0:13:34.280 through congressional approval. 0:13:34.960 --> 0:13:35.760 Where are we with. 0:13:35.720 --> 0:13:39.360 Some of the mister heg Seth, Tulca Gabbart, some of 0:13:39.400 --> 0:13:41.680 the more controversial ones. What do we know now? 0:13:42.320 --> 0:13:45.439 I mean, right now we're doing effectively a pretty serious 0:13:45.600 --> 0:13:47.560 media lobbying campaign. 0:13:48.040 --> 0:13:50.240 With hag Seth standing next to J. D. 0:13:50.400 --> 0:13:53.640 Dance and President Elect Trump at an Army Navy game, 0:13:53.679 --> 0:13:57.640 you know, obviously trying to project physically that they are 0:13:57.720 --> 0:14:01.079 all aligned and on board, and encouraging members of the 0:14:01.120 --> 0:14:04.959 Senate Republican Conference to get on board with passing those members. 0:14:05.040 --> 0:14:06.720 I think what's going to happen is we're going to 0:14:06.720 --> 0:14:09.520 see some of these folks get a full core press 0:14:09.640 --> 0:14:11.960 and President Trump put his weight behind it and say 0:14:12.000 --> 0:14:14.360 pass this, give me this nominee. 0:14:14.440 --> 0:14:16.120 But others A'llah. 0:14:15.880 --> 0:14:18.400 Telsea Gabbard, for example, are going to have a much 0:14:18.440 --> 0:14:19.360 more difficult time. 0:14:19.640 --> 0:14:20.800 I keep my eye on the prize. 0:14:20.840 --> 0:14:23.360 Obviously, I cover bacroeconomic policy, so I don't really care 0:14:23.360 --> 0:14:24.560 about some of those agencies. 0:14:24.720 --> 0:14:26.680 I really want to see Scott Bessett of the World, 0:14:26.760 --> 0:14:28.160 Damson Greer at USDR. 0:14:28.280 --> 0:14:29.920 Those are much more important to me, and I think 0:14:29.960 --> 0:14:32.440 those folks are very likely to get through those are 0:14:32.480 --> 0:14:34.160 the ones who will we put in tyreso on next year? 0:14:34.200 --> 0:14:35.280 I think that's the prize. 0:14:35.360 --> 0:14:37.840 And now, folks, the civics dumb question of the week, 0:14:37.920 --> 0:14:39.480 Let's get it out of the way early here on 0:14:39.520 --> 0:14:41.720 a Monday, Henrietta Trace with. 0:14:41.720 --> 0:14:43.040 A senator's vote. 0:14:43.600 --> 0:14:46.440 Are their votes visible or are they liked by a 0:14:46.480 --> 0:14:49.040 ballot box with their secret? Oh? 0:14:49.080 --> 0:14:51.440 No, absolutely visible. You can watch this all on c SPAN. 0:14:51.600 --> 0:14:54.000 It's a great family fun. Highly recommend this. 0:14:55.480 --> 0:14:59.760 Debt ceiling. She's such a nerve, I know, dead ceiling death. 0:15:00.160 --> 0:15:03.360 It's I mean, we've got the clock here in Manhattan. 0:15:03.440 --> 0:15:07.160 It shows us the deficits. And does anybody care in Washington, DC? 0:15:07.280 --> 0:15:08.040 Should they care? 0:15:08.840 --> 0:15:09.040 Oh? 0:15:09.080 --> 0:15:10.080 They talked about caring. 0:15:10.200 --> 0:15:14.240 For sure. Everybody's against deficits, that's for sure. But you're 0:15:14.280 --> 0:15:17.520 not against specific spending cuts. Excuse me, you're not for 0:15:17.720 --> 0:15:20.160 specific spending cuts. It's much easier to be against things 0:15:20.200 --> 0:15:22.720 than for them. So while we talk about, you know, 0:15:22.760 --> 0:15:25.600 being against federal spending, let's be mindful that we have 0:15:25.640 --> 0:15:29.160 to increase the debt ceiling next year. And Lindsey Grahm, 0:15:29.240 --> 0:15:32.520 they incoming Senate Budget Committee chairman, notified us last week 0:15:32.880 --> 0:15:36.640 that the debt ceiling, which could pass on party lines 0:15:36.680 --> 0:15:40.160 with just Republican support and a reconciliation bill will instead 0:15:40.200 --> 0:15:43.440 go through regular order. And that is acknowledgment that they 0:15:43.480 --> 0:15:46.120 will not be cutting federal spending next year. It is 0:15:46.320 --> 0:15:48.320 far too difficult a task, especially when you have a 0:15:48.400 --> 0:15:50.480 zero c margin in the House and only three seats 0:15:50.480 --> 0:15:51.000 in the Senate. 0:15:52.000 --> 0:15:54.120 How about on the tax front here, how do we 0:15:54.200 --> 0:15:58.320 think this is going to play out on the tax front? 0:15:58.440 --> 0:16:02.880 I think it's clear from incoming Leader Foons agenda that 0:16:02.920 --> 0:16:04.920 we will not get a tax bill until December of. 0:16:04.840 --> 0:16:08.080 Twenty twenty five. We are only to have the massive. 0:16:07.720 --> 0:16:11.240 Light over you know, the salt deduction, over repealing the 0:16:11.280 --> 0:16:15.760 IRA tax credits for burgeoning industries and clean energy solar, 0:16:16.200 --> 0:16:19.560 wind batteries, et cetera. It's popular to say that we're 0:16:19.600 --> 0:16:22.040 going to repeal the electric vehicles tax credit, for example, 0:16:22.240 --> 0:16:24.720 but that's about one hundred and twenty billion dollars in 0:16:24.760 --> 0:16:28.400 the broader IRA, which has balloomed, as you know, from 0:16:28.640 --> 0:16:30.880 a bill that they expected to be about two hundred 0:16:30.880 --> 0:16:33.640 billion dollars in private sector uptake to seven hundred and 0:16:33.720 --> 0:16:37.000 eighty billion dollars. Who has grown these industries some up 0:16:37.000 --> 0:16:41.520 in Boston, Texas, Ohio, North Dakota, South Dakota was buried 0:16:41.520 --> 0:16:45.000 by percident. Unfortunately, in red states, about seventy percent of 0:16:45.000 --> 0:16:46.200 that funny Red states. 0:16:46.360 --> 0:16:49.040 You know what's interesting here, Henrietta, and I've got to 0:16:49.040 --> 0:16:54.560 squeeze this in the salt tax it's called, is a 0:16:54.600 --> 0:16:59.000 stereotype that is just about democratic states? Or can mister 0:16:59.040 --> 0:17:03.640 Trump get pressure on the assault tax from Republican states? 0:17:04.400 --> 0:17:06.719 You know, that's a great question. As you know, I 0:17:06.760 --> 0:17:07.919 live down here in Louisiana. 0:17:07.960 --> 0:17:10.399 There are beautiful, nice streets down here where people are 0:17:10.400 --> 0:17:13.520 paying exorbitant property taxes and mortgages. 0:17:14.240 --> 0:17:17.120 That's in Texas, that's in every state in our great nation. 0:17:17.280 --> 0:17:19.800 There's big homes that people want this deduction for. 0:17:19.920 --> 0:17:21.879 So I think a lot of it weighs on the 0:17:21.880 --> 0:17:25.480 New York, New Jersey, Connecticut, California Republican contingent. And the 0:17:25.520 --> 0:17:28.880 reason that's easy is because those are sheets that president 0:17:28.960 --> 0:17:31.080 like Trump and the Republican Party have picked up in 0:17:31.080 --> 0:17:34.880 the last ten years, and so they really highlight those members, 0:17:34.960 --> 0:17:37.320 and frankly, those members are on the hook for fixing 0:17:37.400 --> 0:17:38.439 this for their constituents. 0:17:38.480 --> 0:17:40.600 That's that they got a lot to Henrietta Trace, thank 0:17:40.600 --> 0:17:43.640 you so much for your perspective. Can't say now from 0:17:43.640 --> 0:17:48.000 Louisiana today, which is wonderful. She is with Veda Partners. 0:17:48.040 --> 0:17:51.680 Every time she's on. I learned stuff I know every 0:17:51.720 --> 0:17:52.480 single time. 0:17:52.640 --> 0:17:53.320 It's just great. 0:17:53.520 --> 0:17:57.760 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:17:57.880 --> 0:18:00.520 starting at seven am Eastern on Apple Our Play in 0:18:00.640 --> 0:18:03.600 Android Auto with a Bloomberg Business app. You can also 0:18:03.680 --> 0:18:07.160 listen live on Amazon Alexa from our flagship New York station, 0:18:07.560 --> 0:18:10.240 Just say Alexa Play Bloomberg eleven thirty. 0:18:10.640 --> 0:18:13.120 This is a joy and for me and Paul and 0:18:13.119 --> 0:18:17.520 Lisa and Charlie Pellett, this could literally be a three 0:18:17.600 --> 0:18:22.280 hour conversation. We all fly, our loved ones fly. Stephen 0:18:22.359 --> 0:18:27.199 Trent is definitive. It's City group on this. You know, 0:18:27.359 --> 0:18:31.280 it's not American Airlines research. It's all of American research. 0:18:31.720 --> 0:18:33.840 Thrilled to have you in the studio. Way too short 0:18:33.840 --> 0:18:37.200 of visit which let's just get the single best buy. 0:18:38.000 --> 0:18:40.679 Is it a foreign carrier or a domestic carrier? 0:18:41.640 --> 0:18:43.520 Well, thank you so much for having me on and 0:18:43.880 --> 0:18:47.560 good morning to you. So in terms of the carriers 0:18:47.560 --> 0:18:49.960 we like the most in the United States, it's going 0:18:50.040 --> 0:18:52.800 to be Delta Airlines is our top pick. We do 0:18:52.880 --> 0:18:56.040 have American Airlines with a by rating and our focus 0:18:56.080 --> 0:19:00.800 group on a long term basis. However, within the America's 0:19:01.200 --> 0:19:04.480 Panama's COPA Airlines, we think is dynamite. 0:19:04.320 --> 0:19:07.159 Copa Airlines out of Panama. What's what's the place. I 0:19:07.240 --> 0:19:09.280 know you have a lot of experience covering the transports 0:19:09.320 --> 0:19:11.359 down in Latin America. Give us just kind of the 0:19:11.400 --> 0:19:13.320 macro call, because we don't talk about it a lot. 0:19:13.359 --> 0:19:14.880 How do you how do we think about it from 0:19:14.880 --> 0:19:17.840 a thirty thousand foot level Latin America transportation? 0:19:19.040 --> 0:19:22.760 Yeah, absolutely, So when we look at, for example, the 0:19:22.800 --> 0:19:25.159