1 00:00:02,560 --> 00:00:10,680 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is your weekly 2 00:00:10,840 --> 00:00:15,360 Speaker 1: Washington Policy Pulse, the Balance of Power podcast. I'm Joe Matthew. 3 00:00:15,600 --> 00:00:19,200 Speaker 1: Every Monday, Bloomberg Intelligence, senior policy analyst and friend of 4 00:00:19,200 --> 00:00:22,520 Speaker 1: the show, Nathan Dean shares his weekly call on upcoming 5 00:00:22,560 --> 00:00:25,760 Speaker 1: catalysts in the nation's capital. Listen for the most recent 6 00:00:25,760 --> 00:00:29,040 Speaker 1: and relevant policy research from our team at Bloomberg Intelligence. 7 00:00:29,280 --> 00:00:31,560 Speaker 1: Now with today's installment, here's Nathan Dean. 8 00:00:31,880 --> 00:00:35,040 Speaker 2: Good morning and good afternoon everybody. My name is Nathan Dean. 9 00:00:35,159 --> 00:00:37,680 Speaker 3: I am a senior policy and host with Bloomberg Intelligence 10 00:00:37,720 --> 00:00:39,639 Speaker 3: here in the Washington DC Bureau. I want to say 11 00:00:39,680 --> 00:00:42,800 Speaker 3: welcome for joining us on the Washington Policy Pulse and 12 00:00:42,840 --> 00:00:44,559 Speaker 3: also for those of you who are listening via the 13 00:00:44,560 --> 00:00:47,960 Speaker 3: Balance of Power podcast, welcoming you as well. This is 14 00:00:47,960 --> 00:00:50,120 Speaker 3: the call where every Monday at ten am Eastern week 15 00:00:50,360 --> 00:00:52,640 Speaker 3: together and we talk about what's going on this week. 16 00:00:53,040 --> 00:00:54,840 Speaker 3: And speaking of what's going on this week, well, we 17 00:00:54,960 --> 00:00:58,960 Speaker 3: are five days away from a partial, partial, partial, partial 18 00:00:59,280 --> 00:01:02,800 Speaker 3: government shut down. A joke, it's actually the Department of 19 00:01:02,800 --> 00:01:06,520 Speaker 3: Homeland Security is what we're talking about this week. Just 20 00:01:06,520 --> 00:01:09,480 Speaker 3: had a client call earlier this morning and talking about this, 21 00:01:09,560 --> 00:01:10,960 Speaker 3: and so I just wanted to give you my key 22 00:01:11,000 --> 00:01:14,640 Speaker 3: thoughts on this is that you know, what is happening 23 00:01:14,680 --> 00:01:16,800 Speaker 3: this week is we are debating about the funding of 24 00:01:16,840 --> 00:01:19,720 Speaker 3: the Department of Homeland Security. It is one of the 25 00:01:19,800 --> 00:01:23,360 Speaker 3: twelve appropriation bills that makes up the US government. Those 26 00:01:23,480 --> 00:01:25,920 Speaker 3: other eleven bills have all been passed and that has 27 00:01:25,959 --> 00:01:29,240 Speaker 3: been essentially funded the rest of the US government up 28 00:01:29,319 --> 00:01:32,080 Speaker 3: until September thirtieth, But for the two hundred and sixty 29 00:01:32,120 --> 00:01:36,120 Speaker 3: six thousand individuals that work for the Department of Homeland Security, 30 00:01:36,520 --> 00:01:39,960 Speaker 3: their funding runs out on Friday. Now, there's been a 31 00:01:40,040 --> 00:01:42,760 Speaker 3: lot of discussion about what's going to happen here, and 32 00:01:42,800 --> 00:01:44,560 Speaker 3: I think on this call, we've talked about in the 33 00:01:44,600 --> 00:01:47,440 Speaker 3: past that Immigration and custom and Enforcement, the ICE Agency 34 00:01:47,960 --> 00:01:50,720 Speaker 3: already has seventy five billion dollars appropriated through it up 35 00:01:50,800 --> 00:01:53,560 Speaker 3: until fiscal year twenty twenty nine. So what the Democrats 36 00:01:53,600 --> 00:01:55,760 Speaker 3: are pushing right now is a change of ICE tactics 37 00:01:55,840 --> 00:01:59,240 Speaker 3: rather than levels of ICE funding. You have five days 38 00:01:59,280 --> 00:02:02,600 Speaker 3: to figure it out. There's pretty much no agreement whatsoever 39 00:02:02,720 --> 00:02:05,920 Speaker 3: on where to moving forward on this, and so either 40 00:02:06,040 --> 00:02:07,640 Speaker 3: one of two things is going to happen. One is 41 00:02:07,680 --> 00:02:09,880 Speaker 3: we're going to have a shutdown, and the Department of 42 00:02:09,919 --> 00:02:12,600 Speaker 3: Homeland Security will effectively shut down, and then they'll have 43 00:02:12,639 --> 00:02:14,720 Speaker 3: to figure this out. For what it's worth, the House 44 00:02:14,800 --> 00:02:17,120 Speaker 3: is out next week, so is the Senate. The Munich 45 00:02:17,160 --> 00:02:20,240 Speaker 3: Security Conference starts on Friday. And just being a little 46 00:02:20,240 --> 00:02:24,640 Speaker 3: bit on the snarky side here, nobody they're bipartisan members 47 00:02:24,639 --> 00:02:26,880 Speaker 3: that are going to that conference. They don't want to 48 00:02:26,880 --> 00:02:29,240 Speaker 3: stick around in Washington and deal with this when they 49 00:02:29,240 --> 00:02:32,280 Speaker 3: should be in Germany eating schnitzel sos. 50 00:02:32,360 --> 00:02:33,480 Speaker 2: One of two things is going to happen. 51 00:02:33,520 --> 00:02:36,320 Speaker 3: One is the department will shut down and those individuals 52 00:02:36,360 --> 00:02:38,160 Speaker 3: who work for DHS are essentially going to have to 53 00:02:38,160 --> 00:02:40,760 Speaker 3: work for approximately a week until Congress comes back and 54 00:02:40,800 --> 00:02:43,000 Speaker 3: gets this done, or they're going to kick the can 55 00:02:43,040 --> 00:02:46,760 Speaker 3: with another continuing resolution, a two or three week continuing resolution, 56 00:02:47,200 --> 00:02:48,840 Speaker 3: which is I think where both sides of this are 57 00:02:48,840 --> 00:02:51,920 Speaker 3: going forward for what it's worth. There is some discussion 58 00:02:51,919 --> 00:02:54,880 Speaker 3: about potentially stripping ICE out of this and then doing 59 00:02:54,960 --> 00:02:59,560 Speaker 3: it appropriations for like individually for FEMA or Coastguard or 60 00:02:59,600 --> 00:03:04,080 Speaker 3: the trans rotation to Security Administration TSA. Too soon to 61 00:03:04,080 --> 00:03:06,200 Speaker 3: tell them where we're going with that. My story though, 62 00:03:06,360 --> 00:03:08,640 Speaker 3: is is that from the market perspective, you know this 63 00:03:09,480 --> 00:03:11,680 Speaker 3: this shutdown, if it occurs, isn't really going to have 64 00:03:11,720 --> 00:03:15,600 Speaker 3: any market impacts, And for clarity's sake in terms of 65 00:03:15,639 --> 00:03:18,080 Speaker 3: like BLS reports and other data reports and other things 66 00:03:18,160 --> 00:03:20,760 Speaker 3: like that, you can essentially say that we have clarity 67 00:03:20,800 --> 00:03:23,000 Speaker 3: through September thirtieth of the rest of this year because 68 00:03:23,000 --> 00:03:25,120 Speaker 3: the rest of the government is funded. I'm going to 69 00:03:25,160 --> 00:03:26,519 Speaker 3: come out and say that there's not going to be 70 00:03:26,560 --> 00:03:29,280 Speaker 3: a shutdown in September thirtieth, because nobody wants to shut 71 00:03:29,280 --> 00:03:31,359 Speaker 3: the government down one month before the midterm elections. 72 00:03:32,040 --> 00:03:33,600 Speaker 2: You're probably not going to have a shutdown during the 73 00:03:33,680 --> 00:03:34,480 Speaker 2: lame duck period. 74 00:03:34,600 --> 00:03:36,400 Speaker 3: Where I'm going with this is that you probably have 75 00:03:36,520 --> 00:03:39,240 Speaker 3: until March twenty twenty seven until we have the next 76 00:03:39,320 --> 00:03:42,640 Speaker 3: significant shutdown threat. We should also point though, is that 77 00:03:42,720 --> 00:03:46,320 Speaker 3: for every single moment that Congress is focused on DHS funding, 78 00:03:46,720 --> 00:03:48,800 Speaker 3: it's a moment they're not talking about other things like 79 00:03:48,840 --> 00:03:49,920 Speaker 3: housing and crypto. 80 00:03:50,400 --> 00:03:51,960 Speaker 2: Now, the reason why I bring. 81 00:03:51,840 --> 00:03:53,480 Speaker 3: Up housing is that's going to be in the next 82 00:03:53,520 --> 00:03:55,680 Speaker 3: big push you're going to see coming out from Congress. 83 00:03:56,320 --> 00:03:58,360 Speaker 3: Just this week, the House is going to most likely 84 00:03:58,400 --> 00:04:01,320 Speaker 3: take up and pass a bill call the Housing for 85 00:04:01,520 --> 00:04:03,200 Speaker 3: twenty first Century Act, and this comes out of the 86 00:04:03,200 --> 00:04:04,760 Speaker 3: House Financial Services Committee. 87 00:04:04,920 --> 00:04:07,240 Speaker 2: What you need to know about this is that, yes. 88 00:04:07,080 --> 00:04:10,160 Speaker 3: It's part of President Trump's affordability push, but this bill 89 00:04:10,200 --> 00:04:13,760 Speaker 3: in particular is pretty bipartisan and it really doesn't have 90 00:04:13,800 --> 00:04:15,760 Speaker 3: anything out they're exciting for us who are. 91 00:04:15,640 --> 00:04:17,560 Speaker 2: Looking at it from the equity market standpoint. 92 00:04:17,720 --> 00:04:19,680 Speaker 3: It's not really going to do much things in terms 93 00:04:19,720 --> 00:04:22,000 Speaker 3: of driving up new homes or whether it cuts the yes, 94 00:04:22,040 --> 00:04:25,160 Speaker 3: he cuts some regulatory red tape, it actually makes things 95 00:04:25,200 --> 00:04:27,720 Speaker 3: a little bit more aims to make government bureaucracy a 96 00:04:27,760 --> 00:04:30,360 Speaker 3: little bit more efficient. But this is going to most 97 00:04:30,400 --> 00:04:32,720 Speaker 3: likely pass the House this week. The Senate has its 98 00:04:32,720 --> 00:04:35,520 Speaker 3: own separate bill, and if you heard my discussion last week, 99 00:04:35,560 --> 00:04:38,200 Speaker 3: you heard the Senate Banking Committee has pushed Crypto off 100 00:04:38,240 --> 00:04:40,479 Speaker 3: for a month to deal with housing. That's what the 101 00:04:40,480 --> 00:04:42,240 Speaker 3: Senate Banking Committee is going to be looking at its 102 00:04:42,279 --> 00:04:44,240 Speaker 3: housing for the next month, and then they're going to 103 00:04:44,360 --> 00:04:47,320 Speaker 3: come together and try and reconcile it. The thing about 104 00:04:47,400 --> 00:04:49,280 Speaker 3: US policy policy, and I know that we have a 105 00:04:49,320 --> 00:04:51,800 Speaker 3: lot of non US investors on this call right now. 106 00:04:52,120 --> 00:04:54,960 Speaker 3: The thing about housing policy you should note though, is 107 00:04:55,160 --> 00:04:57,800 Speaker 3: that it's not so much a federal issue, but rather 108 00:04:57,839 --> 00:05:00,160 Speaker 3: it's a state and local issue. And it's almost it's 109 00:05:00,160 --> 00:05:02,640 Speaker 3: like a third rail of US politics because when President 110 00:05:02,680 --> 00:05:04,960 Speaker 3: Trump comes says I want to make housing more affordable, 111 00:05:05,839 --> 00:05:07,800 Speaker 3: are you doing that to the detriment of homeowners who 112 00:05:07,839 --> 00:05:10,080 Speaker 3: see the value of their homes going down? Or are 113 00:05:10,080 --> 00:05:11,839 Speaker 3: you trying to do this for individuals that don't have 114 00:05:11,880 --> 00:05:14,440 Speaker 3: homes that actually want to see those on prices go down. 115 00:05:14,880 --> 00:05:17,320 Speaker 3: You get the idea here is that it's very difficult. 116 00:05:17,680 --> 00:05:20,560 Speaker 3: And under the Biden administration, Vice President Kamala Harris was 117 00:05:20,600 --> 00:05:22,560 Speaker 3: the one was tasked with this, and a lot of 118 00:05:22,600 --> 00:05:25,039 Speaker 3: people in Washington thought that this was a thankless role 119 00:05:25,080 --> 00:05:28,320 Speaker 3: of tasking her with this because A the federal government 120 00:05:28,360 --> 00:05:30,120 Speaker 3: really doesn't have all that much to do, and B 121 00:05:30,680 --> 00:05:32,800 Speaker 3: it's actually very difficult to get it right. It's a 122 00:05:32,839 --> 00:05:36,359 Speaker 3: Goldilix strategy, if you will. But one thing I do 123 00:05:36,400 --> 00:05:38,480 Speaker 3: want to point out is just last week Bloomberg News 124 00:05:38,480 --> 00:05:42,120 Speaker 3: reported that there potentially could be an anti trust investigation 125 00:05:42,240 --> 00:05:45,599 Speaker 3: of US homebuilders. I would direct you to a note 126 00:05:45,600 --> 00:05:48,120 Speaker 3: that my colleague Jennifer re wrote and put out on 127 00:05:48,200 --> 00:05:50,520 Speaker 3: the terminal, and she essentially said, and I'm just going 128 00:05:50,560 --> 00:05:53,880 Speaker 3: to paraphrase here is that yes, you can launch an investigation, 129 00:05:54,800 --> 00:05:58,039 Speaker 3: but it's much more difficult to actually prove an investigation 130 00:05:59,240 --> 00:06:03,599 Speaker 3: or prove that actually anti trust allegations existed. The idea 131 00:06:03,680 --> 00:06:07,240 Speaker 3: here is is that this potential investigation, if any actually 132 00:06:07,320 --> 00:06:09,000 Speaker 3: were to come out at this point. 133 00:06:08,920 --> 00:06:10,280 Speaker 2: Is more bark than bite. 134 00:06:10,520 --> 00:06:12,919 Speaker 3: I'll defer you to Jen though on the specific So 135 00:06:12,960 --> 00:06:15,280 Speaker 3: if you want to talk more about housing, contact me. 136 00:06:15,320 --> 00:06:17,039 Speaker 3: I'll put you in with Jen and or our housing 137 00:06:17,080 --> 00:06:20,600 Speaker 3: analyst Drew reading. So let's talk about crypto a little bit. 138 00:06:20,720 --> 00:06:23,719 Speaker 3: Just last week we saw Treasury Secretary Scott Bessant testify 139 00:06:23,800 --> 00:06:26,400 Speaker 3: to the House Financial Services Committee and sent a banking committee. 140 00:06:26,480 --> 00:06:28,239 Speaker 3: I really didn't get much out of it. I watched 141 00:06:28,279 --> 00:06:30,280 Speaker 3: all five and a half hours of it. I really 142 00:06:30,279 --> 00:06:32,599 Speaker 3: didn't get all that much. But a couple of interesting 143 00:06:32,640 --> 00:06:34,280 Speaker 3: things I want on crypto I wanted to point out, 144 00:06:34,400 --> 00:06:36,000 Speaker 3: especially in the volatility that we're. 145 00:06:35,839 --> 00:06:37,119 Speaker 2: Seeing with bitcoin at the moment. 146 00:06:37,680 --> 00:06:40,760 Speaker 3: One is Treasure Secretary Scott Bessont reiterated that he's not 147 00:06:40,880 --> 00:06:43,720 Speaker 3: going to go out there, and I'm paraphrasing here, use 148 00:06:43,800 --> 00:06:48,400 Speaker 3: taxpayer dollars to purchase bitcoin. Now there is legislation out 149 00:06:48,400 --> 00:06:50,720 Speaker 3: there from Senator Cynthia Lummis that would directed the US 150 00:06:50,760 --> 00:06:51,880 Speaker 3: government to purchase bitcoin. 151 00:06:52,160 --> 00:06:53,320 Speaker 2: It's not going to go anywhere. 152 00:06:53,560 --> 00:06:55,960 Speaker 3: When treasure Secretary Scott Besson says he doesn't have the 153 00:06:56,000 --> 00:06:58,120 Speaker 3: authority to do that, it's not going to go anywhere. 154 00:06:58,200 --> 00:06:59,719 Speaker 2: For what it's worth. I actually think they do have 155 00:06:59,720 --> 00:07:00,360 Speaker 2: the already. 156 00:07:00,400 --> 00:07:04,320 Speaker 3: I think they could use the Exchange Stabilization Fund to 157 00:07:04,520 --> 00:07:07,280 Speaker 3: actually go out and purchase new bitcoin. But I don't 158 00:07:07,320 --> 00:07:09,640 Speaker 3: think it's going to happen. My note is thirty percent chance. 159 00:07:09,680 --> 00:07:11,680 Speaker 3: So you're going to see change of this in US policy. 160 00:07:11,920 --> 00:07:14,120 Speaker 3: So if you're looking for any type of relief for 161 00:07:14,280 --> 00:07:17,040 Speaker 3: bitcoin purchases, it's not going to come there. And then 162 00:07:17,040 --> 00:07:19,400 Speaker 3: on the crypto side, like I just mentioned, Senate Banking 163 00:07:19,400 --> 00:07:23,160 Speaker 3: Committee is working on housing. They've pushed crypto off. But 164 00:07:23,480 --> 00:07:26,120 Speaker 3: Senator Lammis did state last week when she was doing 165 00:07:26,200 --> 00:07:30,000 Speaker 3: a news interview that Senator John Thune, the majority leader, 166 00:07:30,320 --> 00:07:32,760 Speaker 3: said that he would dedicate time to the Senate floor 167 00:07:33,080 --> 00:07:36,080 Speaker 3: to this crypto bill sometimes quote unquote. 168 00:07:35,680 --> 00:07:38,520 Speaker 2: In the spring. In my mind that means April or May. 169 00:07:38,560 --> 00:07:40,720 Speaker 3: So if you're looking for passage on this crypt Market 170 00:07:40,760 --> 00:07:43,640 Speaker 3: Structure bill, you're looking at somewhere around April or may 171 00:07:43,880 --> 00:07:46,600 Speaker 3: I have a much more in depth call. I did 172 00:07:46,600 --> 00:07:48,880 Speaker 3: a video on the crypto policy or where we are, 173 00:07:49,120 --> 00:07:50,760 Speaker 3: so if you have any more questions on that, just 174 00:07:50,840 --> 00:07:54,000 Speaker 3: let me know and I'll direct you to that. A 175 00:07:54,000 --> 00:07:55,960 Speaker 3: couple other things, just real quickly, it's going to be 176 00:07:55,960 --> 00:07:57,800 Speaker 3: a short call this week. A couple of things to 177 00:07:57,840 --> 00:08:02,160 Speaker 3: keep in mind. On Wednesday, Prime Minister and Benjamin Yettnaw 178 00:08:02,160 --> 00:08:03,760 Speaker 3: who from Israel, is going to be coming to the 179 00:08:03,800 --> 00:08:06,280 Speaker 3: White House. So if you're looking at geopolitical risk and 180 00:08:06,320 --> 00:08:10,720 Speaker 3: specifically in terms of US I ran negotiations. Our friends 181 00:08:10,760 --> 00:08:14,000 Speaker 3: over at Bloomberg Geoeconomics actually put out their analysis just 182 00:08:14,040 --> 00:08:16,880 Speaker 3: this morning on where they think is things are going. 183 00:08:17,000 --> 00:08:19,600 Speaker 3: But you may see some headlines tied to Wednesday's visit. 184 00:08:20,720 --> 00:08:22,960 Speaker 3: We are also telling our clients just an update on 185 00:08:23,000 --> 00:08:26,120 Speaker 3: the Supreme Court i EPA case. February twentieth is the 186 00:08:26,160 --> 00:08:28,480 Speaker 3: first date that the Supreme Court could come back unless 187 00:08:28,520 --> 00:08:31,720 Speaker 3: they do an emergency or you know, non scheduled release. 188 00:08:32,080 --> 00:08:34,680 Speaker 3: But Holly from thinks February twentieth is the first state 189 00:08:34,720 --> 00:08:37,079 Speaker 3: that you're going to see the Supreme Court could potentially 190 00:08:37,120 --> 00:08:39,640 Speaker 3: come back and deal with tariffs, and then a little 191 00:08:39,640 --> 00:08:41,440 Speaker 3: bit on the lighter side. The House is actually taking 192 00:08:41,520 --> 00:08:44,880 Speaker 3: up legislation this week to create a new two dollars 193 00:08:44,920 --> 00:08:49,280 Speaker 3: and fifty cent coin to commemorate America's two hundred and 194 00:08:49,280 --> 00:08:53,040 Speaker 3: fiftieth anniversary. You know, our European friends know this that 195 00:08:53,080 --> 00:08:54,880 Speaker 3: the we actually do have a dollar coin. 196 00:08:55,000 --> 00:08:56,320 Speaker 2: It doesn't really go anywhere. 197 00:08:56,480 --> 00:08:59,560 Speaker 3: I actually used one at the grocery store about about 198 00:08:59,559 --> 00:09:02,040 Speaker 3: a six months ago, and the grocery store I actually 199 00:09:02,080 --> 00:09:04,679 Speaker 3: thought I was using fake currency. So that's pretty much 200 00:09:04,720 --> 00:09:07,679 Speaker 3: why nobody uses coins at the moment. But anyway, how 201 00:09:07,720 --> 00:09:09,120 Speaker 3: is it going to take up a bell to actually 202 00:09:09,160 --> 00:09:11,080 Speaker 3: try and mint to two dollars and fifty cent coin. 203 00:09:11,640 --> 00:09:14,280 Speaker 3: So smaller call today, shorter call today. But again I 204 00:09:14,360 --> 00:09:16,000 Speaker 3: want to say thank you for listening. If you have 205 00:09:16,000 --> 00:09:18,560 Speaker 3: any questions, please feel free to reach out and we'll 206 00:09:18,600 --> 00:09:19,080 Speaker 3: talk soon. 207 00:09:20,160 --> 00:09:24,040 Speaker 1: Our thanks to Nathan Dean, Bloomberg Intelligence Senior policy analyst, 208 00:09:24,120 --> 00:09:27,800 Speaker 1: bringing you the latest installment of his weekly Washington Policy Pulse. 209 00:09:28,200 --> 00:09:31,000 Speaker 1: For more from BI or to join this call live 210 00:09:31,200 --> 00:09:34,880 Speaker 1: each week, you can email Nathan at ndan at Bloomberg 211 00:09:34,960 --> 00:09:38,760 Speaker 1: dot net. That's nd Ea n at Bloomberg dot net 212 00:09:38,920 --> 00:09:41,319 Speaker 1: and come back to the podcast later today for the 213 00:09:41,400 --> 00:09:43,160 Speaker 1: latest edition of Balance of Power.