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Speaker 2: Cannot stop talking about the precious metals right, So we're
Speaker 2: seeing some signs of moderating here this morning. But the
Speaker 2: size of the losses that we have seen in precious
Speaker 2: metals and silver, gold, copper is one really for the
Speaker 2: history books. So let's talk more about it and where
Speaker 2: things might be headed with James Steele, chief Precious Metals
Speaker 2: analyst at HSBC. He joins us live in our Bloomberg Studios. James,
Speaker 2: good to see you. Happy Monday morning to.
Speaker 3: You, Thank you, good morning.
Speaker 2: So is this just really about this gold and silver
Speaker 2: trade being too crowded and people were just trying to
Speaker 2: try to get out or is there something else going
Speaker 2: on here?
Speaker 3: Well, I think you've effectively hit the head on the
Speaker 3: nail for the immediate reason. I mean, any commodity that
Speaker 3: has this parabolic rally that gold and silver had and
Speaker 3: the new entrance into the market, which way they were
Speaker 3: flooding in and have been for many, many months now.
Speaker 3: It really does invite a volatility and be profit taking
Speaker 3: stroke liquidation on any news or developments that run counter
Speaker 3: to gold, and we had a couple of them within
Speaker 3: a few days, and it really did give us a
Speaker 3: big and deserved, I think correction in both gold and silver.
Speaker 4: James, you've been at this precious metal game for decades now.
Speaker 4: Just put into context the volatility both on the upside
Speaker 4: and then the downside. On Friday, there's handful of daysaw,
Speaker 4: just extraordinary volatility.
Speaker 5: Just put that into context.
Speaker 3: Well, yes, you're right, and uh it's extraordinary and a
Speaker 3: bit so and so was a rally. Yep. You know,
Speaker 3: we were talking about gold made a fifty four I
Speaker 3: think new highs last night, and people were talking about
Speaker 3: a new high and new high and I always cautioned everybody.
Speaker 3: I said, look, it's not a new high until we
Speaker 3: go above in real terms what it was in nineteen eighty.
Speaker 3: In January of nineteen eighty, gold hit eight hundred and
Speaker 3: fifty dollars an ounce, and that's about thirty four hundred
Speaker 3: dollars in today's There you go, And they did that
Speaker 3: in April last year, and then I said, Okay, now
Speaker 3: we can genuinely talk about a new high. We can
Speaker 3: genuinely talk about a real rally. And the difference between
Speaker 3: now and seventy nine was a limited number of buyers
Speaker 3: at that time, a hunt Brothers, especially in silver, but
Speaker 3: also a much more broad based church this time, a
Speaker 3: lot of lot a lot in it. But the volatility, nonetheless,
Speaker 3: and to look at it this way, we had a
Speaker 3: swing in a couple of days that was equal to
Speaker 3: the absolute number that gold was trading at when I
Speaker 3: started covering it.
Speaker 2: Wow, that put it in perspective, right, So you know,
Speaker 2: it's just when you look at where we've come. I mean,
Speaker 2: gold top fifty five hundred dollars announced last week, it's
Speaker 2: now at about forty seven to fifty. I guess spot gold.
Speaker 2: Silver wiped out thirty percent of its value in just
Speaker 2: three days. Do you have a target for gold by
Speaker 2: the end of this year, because for many who had
Speaker 2: their target at fifty five hundred, well, it already blew
Speaker 2: past that in just the first month.
Speaker 3: Yeah, are high for the rest of the year is
Speaker 3: fifty five. We have an average which is almost where
Speaker 3: it is now, and we're expecting a very wide range.
Speaker 3: A good news could take us down closer to the
Speaker 3: four thousand dollars level. But what we think will likely
Speaker 3: the research view is that we have a moderately softer
Speaker 3: dollar this year according to our effects people who've been
Speaker 3: aready bang on on that. And also we would I
Speaker 3: think very likely see a resumption in a greater central
Speaker 3: bank buying. I mean, they are the ones that kicked
Speaker 3: off the genesis of this rally back in twenty twenty two.
Speaker 3: If you look at it this way, in twenty two,
Speaker 3: twenty three, twenty four, almost one out of every three
Speaker 3: ounces of gold that came out of the ground went
Speaker 3: into a central bank vault, double or triple the average
Speaker 3: for the previous ten years.
Speaker 2: That's incredible.
Speaker 3: Yeah, truly.
Speaker 5: So I think about a commodity.
Speaker 4: Let's just take oil prices spike up, they start drilling
Speaker 4: holes in Texas.
Speaker 5: What happens when you see gold just spike up?
Speaker 4: I mean they don't start digging more mind No, well
Speaker 4: not in the near term.
Speaker 6: You know.
Speaker 3: Again, when I first started covering the markets, by the
Speaker 3: time a group of geologists said I think there's some
Speaker 3: gold here, to the time when it went round your finger,
Speaker 3: your neck, it was about ten years wow, exploration, permitting,
Speaker 3: et cetera, et cetera. It's closer to twenty now. It
Speaker 3: takes a very long time. You know, it's highly capital
Speaker 3: intensive and the low hanging fruit has been picked. So
Speaker 3: we're going into into different regions and areas. What is
Speaker 3: flexible is recycling because gold, unlike oil and grain, is
Speaker 3: never consumed. It's stored somewhere. It's either around your bank
Speaker 3: or on your neck in a central bank vault and
Speaker 3: a vault some other place, and a bar and a coin,
Speaker 3: and that's what can be mobilized at fairly short Now.
Speaker 3: What we've noticed is that we haven't seen the response
Speaker 3: on the recycling side. It is higher, there's not as
Speaker 3: high as I would have expected. And it's rather like
Speaker 3: owning a home. If the market keeps going up, you
Speaker 3: may refrain from putting your flat on the market, but
Speaker 3: when it comes down a bit, you might then say, okay,
Speaker 3: maybe we've hit the high I should sell now. So
Speaker 3: we may see a pickup in recycling.
Speaker 2: You know, I just wonder, I mean, outside of just
Speaker 2: of investors, what is the larger impact on the economy,
Speaker 2: the fact that we have gold prices and we do
Speaker 2: use gold in different ways every day. Gold and silver
Speaker 2: prices being as high as they are, even despite the
Speaker 2: pullback we saw recently, they're still relatively high. What is
Speaker 2: that impact on the broader economy.
Speaker 3: Well, it has been good for jewelry, simply put. A
Speaker 3: jewelry is often about fifty percent of physical gold demand.
Speaker 3: We calculate that last year it was only thirty five percent.
Speaker 3: It's been down double digit. Also there's a reduction in
Speaker 3: coin demand. But generally speaking, gold does not have huge
Speaker 3: macroeconomic impacts. It reacts to macroecerdomics. It doesn't set It's
Speaker 3: not like oil. It doesn't set the stage. It reacts
Speaker 3: to the stage. And that's why you know, you've got
Speaker 3: to pay attention because the gold price, let's tell you
Speaker 3: that there are geopolitical or economic risks. It doesn't they
Speaker 3: may not materialize, but right, you know, the geopolitical risk
Speaker 3: index is fairly high and persistently high.
Speaker 5: All right, folks.
Speaker 4: G LCO that is the function of the day, gives
Speaker 4: you all the global commodities. You click on the metals
Speaker 4: and then it breaks it down between base metals, ferris metals,
Speaker 4: and precious metals.
Speaker 5: So there you go.
Speaker 4: That's the function you need to be on top of
Speaker 4: what's happening in the world of commodities.
Speaker 5: James Steel, thank you so much. We appreciate it.
Speaker 4: James's chief Precious Metals analyst at HSBC. Whatever we see
Speaker 4: big moves in precious metals by far. The first phone
Speaker 4: call we go out to is to James Steele, and
Speaker 4: he's kind of to give us some of his time there.
Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this.
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Speaker 4: The alexis Christopher sitting in for Tom Keena Paul Sweeneyer
Speaker 4: live here in our Bloomberg Interactive Brokers studio, streaming live
Speaker 4: on YouTube as well. I can see one of the
Speaker 4: other networks that Polsted Tiny Field. The Beast is out,
Speaker 4: so I just I'm not sure if the Beast has
Speaker 4: seen its shadow or not. We'll bring that to you
Speaker 4: as that news breaks. Let's get back to these markets
Speaker 4: here today. Madison Faller joins US Global investment strategists at
Speaker 4: JP Morgan Private Bank, located in London Madison. Twenty twenty
Speaker 4: five great year for equity markets. The US equity markets
Speaker 4: did really well. A lot of markets outside of the
Speaker 4: US did even better. How are you thinking about global
Speaker 4: equity stock.
Speaker 5: Price performance in twenty twenty six?
Speaker 7: Sure so, I think you know. Of course, twenty twenty
Speaker 7: five was an incredibly strong year for markets broadly and
Speaker 7: also for XUS, outperforming the US, which is not something
Speaker 7: that we always see. As we look forward into this year,
Speaker 7: I think it's another store where we are very much
Speaker 7: focused on being globally diversified.
Speaker 8: We still do believe that the US should.
Speaker 7: Remain the core of portfolios, given the access to growth
Speaker 7: in technology and potential productivity gains that it can provide.
Speaker 7: But at the same time, we are also seeing a
Speaker 7: world where national champions across different regions are also growing
Speaker 7: in increased focus, especially as it's underpinned by fiscal stimulus efforts,
Speaker 7: and that's also starting to show through into the earnings
Speaker 7: momentum as well. So I expect a continued narrowing of
Speaker 7: the gap between the US and the rest of the world,
Speaker 7: especially when it comes to earnings growth.
Speaker 8: Heading into this.
Speaker 2: Year in Madison, we keep talking about broader market participation
Speaker 2: with our guests and we're seeing more and more of it.
Speaker 2: Which sectors regions are sort of your top pick outside
Speaker 2: of the usual big tech names.
Speaker 7: So when we look across the market, there are a
Speaker 7: few different things that I would call out, and I
Speaker 7: think that different regions are showcasing that they have different
Speaker 7: strengths that.
Speaker 8: They can offer.
Speaker 7: So in the US, yes, you mentioned we do like
Speaker 7: big tech, but I do think that there's a broadening
Speaker 7: out beyond that where we want to be focused on
Speaker 7: the entire AI ecosystem, so not just the hyper scalers,
Speaker 7: but the entire AI value chain, from the hardware to
Speaker 7: the software, to power to data center infrastructure. But you're
Speaker 7: also seeing support within the US around financials and a
Speaker 7: catchup from healthcare, for instance.
Speaker 8: In Europe, I think it's very.
Speaker 7: Much a focus on energy security, on defense, we do
Speaker 7: know that spending continues to become unlocked in that area.
Speaker 8: When it comes to emerging markets.
Speaker 7: You know em can't be I think painted with one
Speaker 7: broad brushstroke, but there's certainly a lot of opportunity there
Speaker 7: where it be broad broad India, which is a focus
Speaker 7: of ours in addition to China Tech, and I would
Speaker 7: also call out Taiwan and Korea as well in terms
Speaker 7: of areas of focus within Asia.
Speaker 4: Breaking news here Hawks of Tony Phil predict six more
Speaker 4: weeks of winters to be no surprise, although two of
Speaker 4: my offspringer in California and they both are texting me
Speaker 4: like from the.
Speaker 5: Beach, from the golf course.
Speaker 4: Well that's just NaSTA, this is me, Yeah, Madison, talk
Speaker 4: to us about the bond market again. Fix income results
Speaker 4: in twenty twenty five for were really really solid.
Speaker 5: How do you think about opportunities to fixing come in
Speaker 5: twenty twenty six.
Speaker 7: What I think about fixed income, I think what I
Speaker 7: would be looking for are carry like returns. I think
Speaker 7: that now that we have most developed world central banks
Speaker 7: that are wrapping up their easing cycles, I do expect
Speaker 7: that bond yields will stabilize around these more elevated levels.
Speaker 7: And as a result of that, I think that we
Speaker 7: can expect to you know, clip that carry as we
Speaker 7: move along. Of course, if we were to be in
Speaker 7: a more downside growth scenario, bonds could offer protection, but
Speaker 7: I think at the you know, the flip side of
Speaker 7: that is that if we do see more inflation volatility,
Speaker 7: bonds might not be enough, which is why we're very
Speaker 7: much focused on complementing that with real assets like infrastructure
Speaker 7: and commodities like gold.
Speaker 8: Especially on the pullback.
Speaker 2: What are you doing with this gold trade right now? That,
Speaker 2: I mean, it went up so fast? I guess we
Speaker 2: shouldn't be too surprised, Paul, right that it's violently the
Speaker 2: violent move to the downside. But do you if you
Speaker 2: have gold, do you stick with it right now? Do
Speaker 2: you just hold if you're not in it, do you
Speaker 2: forget the fomo and stay out for now?
Speaker 5: What do you do with gold?
Speaker 8: We're buyers here.
Speaker 7: I think that this pullback offers another you know, re
Speaker 7: entry point for investors, especially if they aren't allocated already.
Speaker 7: For those that are allocated, we we'd certainly be holding
Speaker 7: those positions.
Speaker 9: Uh.
Speaker 8: And I think you mentioned mentioned it.
Speaker 1: Uh.
Speaker 7: You know, I think there's a you know a little
Speaker 7: bit of a sentiment driven effect that's you know driven
Speaker 7: driven prices lower over the course of the last few
Speaker 7: trading days. But I think the you know, structural drivers
Speaker 7: very much remain in place, whether that be this continued
Speaker 7: uncertainty premium, whether that's debt fiscal whether it's you know,
Speaker 7: do youolitically driven, But at the same time, we know
Speaker 7: that there's a lot of central bank buying. Retail buying
Speaker 7: is also not I think, to elevate it and remains
Speaker 7: below twenty twenty highs that we saw during COVID, So
Speaker 7: I think the seeds are still there. We'd certainly be buyers,
Speaker 7: and we actually just recently moved our targets higher north
Speaker 7: of six thousand Madison.
Speaker 4: We're just kind of right smack in the middle of
Speaker 4: earnings here. I guess to date they've been pretty solid.
Speaker 4: What are you taking away from earnings and what do
Speaker 4: you think the market needs to see from an earnings
Speaker 4: perspective here?
Speaker 7: I think the market needs to see that corporations can
Speaker 7: continue to you know, push through a lot of the
Speaker 7: unknowns that we've seen take place. It's certainly over the
Speaker 7: course of the last year. And so I think for
Speaker 7: me it's more, you know, whether or not they can
Speaker 7: really continue to show that resilience. We are looking at
Speaker 7: Q four looking to produce, you know, just under twelve
Speaker 7: percent year of year earnings growth, which is yet another
Speaker 7: quarter of double digit profit growth, which is really meaningful,
Speaker 7: and on top of that, we're all so seeing that
Speaker 7: profit margins are especially resilient and are historically high, so
Speaker 7: we're looking to see whether that continues to be the case.
Speaker 7: But the second thing that I would also point out is,
Speaker 7: you know how this continues to broaden out between sectors.
Speaker 8: So we know that the earnings growth.
Speaker 7: Gap between you know, the big tech, you know players
Speaker 7: of the world and the rest of the market was
Speaker 7: still quite wide and twenty twenty five, even if it
Speaker 7: narrowed a bit, we're looking to see if that continues
Speaker 7: to narrow and so far that that does seem to
Speaker 7: be the case, with other sectors certainly starting to participate more.
Speaker 2: I have exciting news. I'm looking at my weather app
Speaker 2: and it's hit double digits. So here in midtown Manhattan
Speaker 2: it is now of bolly twelve degrees. Madison, what is
Speaker 2: it like by you? Are you in London?
Speaker 7: I'm in London and it is cold and dreary and rainy,
Speaker 7: And I must say, I'm originally from Florida, So when
Speaker 7: you're talking about the weather and you know, pictures of sunshine,
Speaker 7: that's something that I certainly miss and I see from
Speaker 7: all my family members.
Speaker 2: You're also a graduate of the University of Notre Dame.
Speaker 2: So you're no stranger to like harsh Winters, right.
Speaker 8: Correct, correct, I felt all the climates.
Speaker 5: Madison, thanks so much for joining us.
Speaker 4: Appreciate it as always, Madison follow Global Investment Strategist JP Morgan,
Speaker 4: Private Bank.
Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this.
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Speaker 4: We're joined now by Joe Davis, Global Chief Economists at Vanguard.
Speaker 5: Joe, I want to start with our feder Reserve.
Speaker 4: We've had a lot of news over the last week
Speaker 4: the Federal Reserve kind of staying pat with their rates,
Speaker 4: but now we have the nomination of a new FED chair.
Speaker 4: I love to just kind of get your you know,
Speaker 4: FED thinking these days from at that thirty thousand foot level.
Speaker 6: Well, again, I think it's really a good choice just
Speaker 6: from what I know of just pass track records, and
Speaker 6: our view was that the Federal Reserve, you know, may
Speaker 6: ease once in twenty twenty six, but it would be
Speaker 6: GDP growth that could eventually add a little bit more
Speaker 6: half to labor market, which is pretty much stalled, and
Speaker 6: so I think we'll see that over the course of
Speaker 6: this year. Again we could have surprises on the jobs front.
Speaker 6: But again overall, plaud and I think the financial markets
Speaker 6: would agree. Joe.
Speaker 2: I want to talk a little inflation in twenty twenty six.
Speaker 2: Last week we got a backward looking number as we
Speaker 2: continue to play catch up from the government shutdown. We
Speaker 2: got the December producer price index and inflation at the
Speaker 2: wholesale level was hotter than expected. What are your expectations
Speaker 2: for inflation this year? And I wonder if the tariff
Speaker 2: passed through is now behind us, because I don't nobody's
Speaker 2: really talking about it anymore.
Speaker 6: I know, I know, well again it was delayed, was
Speaker 6: never dead. The tariff passed through, and so we should
Speaker 6: see some moderation and inflation. So the progress should be
Speaker 6: good yet frustrating. You know again, that's not you know,
Speaker 6: that's certainly our view, it's it's others view. I think
Speaker 6: as well. It's been stubborn inflation. It's almost five years
Speaker 6: above target. And again I applaud Kevin worse I think
Speaker 6: he's pointed to the fact that we found in our
Speaker 6: research fiscal easing or easy physical conditions have some modest
Speaker 6: boost on inflation. I think that's one of the reasons
Speaker 6: why it's been suffered.
Speaker 4: What is your call about inflation going forward here? Because
Speaker 4: again it's been persistent sticky. One could argue that this
Speaker 4: one big, beautiful bill may result in maybe even pushing
Speaker 4: inflation a little bit higher.
Speaker 5: How do you think about that?
Speaker 6: Well, I think what will happen in twenty twenty six
Speaker 6: is going to be the key just you know, tension
Speaker 6: for the next three years, and that is can AI
Speaker 6: and some of this productivity events as we've seen, be
Speaker 6: a relief valve on inflation versus if we don't have
Speaker 6: those sort of dividends, you're going to have, you know,
Speaker 6: some some fiscal based price pressures. That really is the
Speaker 6: tug of war we see, not just for this year.
Speaker 6: This year it's more modest, but is your bold enough
Speaker 6: to look out two or three years That is the
Speaker 6: tug of war. Can we get lower inflation with high
Speaker 6: growth or the inverse? That is clearly when I think
Speaker 6: the goal prices versus tech stocks point too on any
Speaker 6: given day Joe.
Speaker 2: Growth at four percent is pretty darn solid. Is it
Speaker 2: sustainable though? For the rest of the year.
Speaker 6: Well, I think we have some someone off. So we
Speaker 6: obviously had some trade you know, volatility that boosted the
Speaker 6: current numbers up. But our view was for twenty twenty
Speaker 6: six remains intact, and that is we could have economic
Speaker 6: upside from the US economic perspective, really driven at the
Speaker 6: margin by greater business investment and resilient consumer. You know,
Speaker 6: we were talking about, you know, the risks above two.
Speaker 6: Now we're clearly above that. We will see some moderation.
Speaker 6: But our our thesis of economic upside despite market froth,
Speaker 6: which gives us some concerns, that that core message remains intact.
Speaker 4: Hey, Joe, the labor market, I guess you know, one
Speaker 4: could call it resilient.
Speaker 5: Doesn't seem to be a lot of hiring, doesn't seem
Speaker 5: to be a lot of firing. Maybe that's okay. How
Speaker 5: do you think about the labor market.
Speaker 6: Well, again, we've had supply and demand moved down in locksteps,
Speaker 6: so clearly there's been a coin from a hiring perspective,
Speaker 6: But we have one of the one of the deepest
Speaker 6: labor market signals in the world. Given our four one
Speaker 6: k record keeping surface, you know, millions of real time
Speaker 6: we can see in real time how many are being
Speaker 6: hired let go, and also their wage increases. And so
Speaker 6: what we see is is affirming at a low level.
Speaker 6: Wage growth is stronger than employment growth. And if we're right,
Speaker 6: we should see a little bit greater, bigger in the
Speaker 6: labor market in the back half of the year. But
Speaker 6: we're not out of that yet. I mean, we are
Speaker 6: prepared to see in some month a modest negative non
Speaker 6: farm payroll that's that break, even with the supply having
Speaker 6: coming down, so that I think could be a you know,
Speaker 6: some market nervousness. You could see a federal reserve easing
Speaker 6: into that, you know, between now and the summer. But
Speaker 6: if you're bold enough to look past that, we see
Speaker 6: some firming in the labor market.
Speaker 5: Joe, thanks so much for joining us.
Speaker 4: Really appreciate getting a few minutes of your time. Joe Davis,
Speaker 4: he's global chief economist at Vanguard Group.
Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 4: Lexus Christopher sitting in for Tom Keene this morning on Paulsweeny.
Speaker 4: We live here in our Bloomberg Enrector Broker studio in
Speaker 4: New York City. We're streaming live on YouTube as well.
Speaker 6: Well.
Speaker 5: The US government stumbled.
Speaker 4: Into a partial shutdown while waiting for the House to
Speaker 4: approve a funding deal. President Donald Trump worked out with
Speaker 4: Democrats to get the latest reporting from what's happening down
Speaker 4: there in DC.
Speaker 8: We go to Henrietta.
Speaker 4: Tres co founder of Veda Partners. Henrietta, when are we
Speaker 4: going to get this government this partial shutdown partially re opening?
Speaker 10: Yeah, that might be what it is, a partial, partial reopening.
Speaker 10: We are looking at votes tonight in the Rules Committee
Speaker 10: around four o'clock. Maybe movement on the House floor around
Speaker 10: six pm at the earliest. But Speaker Johnson is setting
Speaker 10: the table for Tuesday votes, so it's going to be
Speaker 10: a little while yet. I think we are on a
Speaker 10: path towards reopening, but you should expect some drama on
Speaker 10: and off today.
Speaker 2: So what's the sticking point here? Henriette is it's still
Speaker 2: about immigration, ICE and how the White House is dealing
Speaker 2: with all of it.
Speaker 10: Yeah, definitely, And I think more than just the technicals
Speaker 10: and the policy will fight that fight for the next
Speaker 10: two weeks over masks and IDs and videotapes and stuff
Speaker 10: for all the ICE officers. But right now, it's really
Speaker 10: about the House Democratic Conference getting socialized the idea that
Speaker 10: they're going to need to provide quite a lot of
Speaker 10: votes to this, and Speaker Johnson accepting that. So Leader
Speaker 10: Schumer and President Trump were able to negotiate a deal
Speaker 10: that would work on the Upper Chamber, but now you
Speaker 10: know the House has to weigh in. What I look
Speaker 10: at from the inside is where members who are not
Speaker 10: Hakeem Jeffries are. Where not on the far left, you
Speaker 10: have guys that are stalwarts in DC like Steady Hoyer
Speaker 10: and Jim Clyburn saying that they want to support the bill,
Speaker 10: and they're encouraging their moderate members to do so. I
Speaker 10: suspect you'll see, much like in the Senate side, a
Speaker 10: good chunk of bipartisanship to get this over the finish
Speaker 10: line later on this week.
Speaker 4: Henretta, I believe the polling suggests that most Americans do
Speaker 4: not approve of the tactics Ice is employing here. How
Speaker 4: does that translate into, you know, what some of these
Speaker 4: Republican members of Congress do in terms of maybe this
Speaker 4: vote and maybe pushing back on some of the other
Speaker 4: president's agenda items.
Speaker 5: Where do we stand there?
Speaker 10: Yeah, it's it's amazing. Everything is just broken right now.
Speaker 10: So you can't just say up and down this is
Speaker 10: a red versus Blue issue or a D versus R issue.
Speaker 10: You have members up for reelection in Texas who saw
Speaker 10: a thirty one point swing in a state Senate seat
Speaker 10: just this weekend.
Speaker 9: That's crazy town.
Speaker 10: So you start to then fracture what would otherwise be
Speaker 10: a unified Republican or Democratic base. President Trump is going
Speaker 10: to do some serious arm twisting on I would say
Speaker 10: at least thirty forty members of the Republican Party to
Speaker 10: get them on board with this package. And on the
Speaker 10: Democrat side, you're going to have to see a lot
Speaker 10: of movement into the realm of being willing to negotiate
Speaker 10: with Speaker Johnson and with the White House.
Speaker 9: So it's the wild less out there right now.
Speaker 2: I just want to broaden this and go international for
Speaker 2: a moment. Henriette. Because things are heating up here. It's
Speaker 2: worrying between Iran and the US. I know that over
Speaker 2: the weekend around Supreme Leader warned the US of what
Speaker 2: he called a regional war. He said, quote, the Americans
Speaker 2: should know if they start a war this time, it
Speaker 2: will be a regional war. Talk to us a little
Speaker 2: bit about that, and where do things stand right now?
Speaker 10: Yeah, I mean, military advisors will tell you that that's
Speaker 10: a posture that must take on domestically because they do
Speaker 10: not have the firepower to go against the United States
Speaker 10: one on one, so they need to turn it into
Speaker 10: a regional theater. And what has occurred obviously as a result,
Speaker 10: because so many folks in DC, myself included, are worried
Speaker 10: about escalation on the military front, some sort of kinetic
Speaker 10: event where we are in Iran or somewhere nearby.
Speaker 9: We know the USS Abraham Lincoln is in.
Speaker 10: The region prepared to do what it was not prepared
Speaker 10: to do, you know, a week or two ago.
Speaker 9: So things have absolutely escalated.
Speaker 10: But the United States Senate already has members who are
Speaker 10: out there trying to put a war powers resolution on
Speaker 10: the floor to limit the president's ability to go you know,
Speaker 10: to the next level with Iran. So I think there's
Speaker 10: going to be a sustained push that the president can't avoid.
Speaker 10: He doesn't get to just act in a vacuum here
Speaker 10: like perhaps was the case with Venezuela. Now members are
Speaker 10: very keen to what's going on. They do not want
Speaker 10: to see another regional war in the whole of the
Speaker 10: Middle East. That does not play well with the American public,
Speaker 10: and Republicans don't want that on their backs going into
Speaker 10: a midterm election cycle either. So a lot of oversight
Speaker 10: that we did not see earlier in the year with Venezuela.
Speaker 4: So we were going into this election year, Henriette, thinking
Speaker 4: that perhaps Democrats could get control of the House, and
Speaker 4: then we see this state race in Texas that you mentioned,
Speaker 4: which was a real surprise win for the Democrat there.
Speaker 4: What's the feeling on the calculus for midterm elections here?
Speaker 5: So so early in the year, yeah, I.
Speaker 10: Mean, in this Texas seat, you had a plus seventeen
Speaker 10: for Trump electoral outcome, and I want to say that
Speaker 10: now it would swung back to plus thirteen for the
Speaker 10: Democratic candidate over the weekend.
Speaker 9: That is absolutely not normal.
Speaker 10: That is obviously the trajectory of what you see in
Speaker 10: a wave of election cycle. It builds up of what
Speaker 10: Democrats were able to notch as wins across the Northeast
Speaker 10: in November and Minnesota, Georgia, and Mississippi around the same
Speaker 10: time as they were doing the governor's races in New
Speaker 10: Jersey and Virginia.
Speaker 9: Sage is really quite clear.
Speaker 10: I thought Senator Tillis had a really important point for Republicans,
Speaker 10: which is, you know, the House is very likely to
Speaker 10: switch to Democratic control where at like eighty five percent
Speaker 10: on the Senate side, though our odds are much more
Speaker 10: muted at thirty percent. But look at the fundraising in
Speaker 10: a race like Alaska, where the Democratic challenger freized, you know,
Speaker 10: one and a half million dollars in twenty four hours,
Speaker 10: which is more than the current incumbent Republican race all quarter.
Speaker 10: There is okay, galvanization and enthusiasm, and it's coast to coast,
Speaker 10: I mean Jersey to Alaska. You can't get more inclusive
Speaker 10: than that.
Speaker 4: Zachy similar types of weather though, Henrietta, thank you so much.
Speaker 5: I appreciate henning you to Trece, co founder of Beta.
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