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Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

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Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

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Speaker 1: I Heart Radio app, and the Bloomberg Business App. We're

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Speaker 1: listening on demand wherever you get your podcasts. President Biden

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Speaker 1: in Belfast to start the day. Northern Ireland. It's a

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Speaker 1: mark the twenty fifth anniversary. Can you imagine of the

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Speaker 1: Good Friday Agreement, which of course brought peace to Northern Ireland.

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Speaker 1: The lesson of the Good Friday Agreement is this, in

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Speaker 1: times when things seem fragile or easily broken, that is

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Speaker 1: when hope and hard work are needed the most. That's

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Speaker 1: why we must make our theme repair, repair and a

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Speaker 1: Holy Eastern Season this season when all Christians celebrate renewal

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Speaker 1: and life. The Good Friday Agreement showed us that there

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Speaker 1: is hope for repair even in the most awful breakages.

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Speaker 1: The President, alongside Prime Minister Richie Soon to call on

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Speaker 1: Northern Ireland's political leaders here today to end the standoff

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Speaker 1: that has brought the regions devolved government to a halt.

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Speaker 1: There's been no functioning government since February of last year,

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Speaker 1: when the Democratic Unionist Party boycotted the administration in protest

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Speaker 1: of Brexit trading agreements for the region. The President spoke

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Speaker 1: to that today, all the immense progress we see around

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Speaker 1: us was built through conversation and compromise, discussion and debate, voting,

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Speaker 1: an inclusion. It's an incredible attestation to the power of

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Speaker 1: democracy to deliver needs for all the people. Let's talk

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Speaker 1: about this with an expert here, Donnase and Ruey is

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Speaker 1: a program fellow for Europe, Russia and Eurasia at CSIS,

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Speaker 1: and it's great to have you with us, Donnase and

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Speaker 1: the President here calling for this end of the standoff.

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Speaker 1: Is anyone listening, Hi, Joe, thanks for having me. I

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Speaker 1: think a lot of people are listening to this. Both.

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Speaker 1: The Prime Minister of the UK, even though he didn't

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Speaker 1: attend this speech, he was in Belfast. The leaders of

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Speaker 1: the parties in Northern Ireland, who President Biden had met

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Speaker 1: in DC for Saint Patrick's Day, everyone was listening there,

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Speaker 1: and I would guess the leaders of the Republic of Ireland,

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Speaker 1: who he's about to meet, we're listening to this as well.

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Speaker 1: There were a lot of questions for the administration before

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Speaker 1: the trip, for the purpose of the trip, and I

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Speaker 1: think now it's been made clear he met privately with

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Speaker 1: the leaders of Northern Ireland's five main political parties. I

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Speaker 1: suspect that conversation or those conversations had more impact than

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Speaker 1: a public speech. But in the US here people are

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Speaker 1: kind of making fun of the trip, like he's just

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Speaker 1: going to visit the old ancestral home and listen to

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Speaker 1: Irish music. But how important is this day here? I

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Speaker 1: realize he's moving on to Ireland and there's going to

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Speaker 1: be more of a of a leisurely paced there. But

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Speaker 1: how important was this opening visit? I say it was crucial,

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Speaker 1: just one to mark the anniversary you set this at

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Speaker 1: the top. Who could have imagined, you know, in nineteen

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Speaker 1: ninety eight. Absolutely agreement was incredibly significant, but the President

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Speaker 1: himself said, you know, peace was not inevitable. I would

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Speaker 1: say it also was not guaranteed even after the signing

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Speaker 1: of the agreement. So it's really important to mark that

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Speaker 1: anniversary so that we can all remember there's a lot

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Speaker 1: that needs to be done to sustain that piece and

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Speaker 1: move beyond some of these models of segregated politics in

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Speaker 1: Northern Ireland. So I think it's crucial that he came,

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Speaker 1: that he was also actually pretty forceful in his peach

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Speaker 1: I would say, on what he sees as the importance

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Speaker 1: of reforming the institutions in Northern Ireland, of supporting the

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Speaker 1: piece and involving all of the parties in this effort.

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Speaker 1: I hope the Assembly, he said, and the Executive will

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Speaker 1: soon be restored. That's a judgment for you to make,

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Speaker 1: not me. So what happens now, well, some of it,

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Speaker 1: I would imagine depends on what he told the leaders

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Speaker 1: in this brief engagement before his speech. What happens now

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Speaker 1: is I think Prime Minister Sunac Rishi Sunac of the

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Speaker 1: United Kingdom needs to continue this conversation with the leaders

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Speaker 1: of the parties in Northern Ireland. There's one party, as

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Speaker 1: you mentioned at the top of the DUP, that continues

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Speaker 1: to refuse to accept the agreement that was signed between

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Speaker 1: the EU and the UK on smoothing trade access and

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Speaker 1: the movement of goods between all of the different regions.

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Speaker 1: So what needs to happen now is they need to

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Speaker 1: make a decision on whether they want to be parts

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Speaker 1: of the Posts Good Friday Agreement institutions, which is the

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Speaker 1: only way to offer the people of Northern Ireland a representation,

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Speaker 1: a democratic representation in the institutions. I get the sense

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Speaker 1: that not a lot of Americans are plugged into this,

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Speaker 1: and after the agreement kind of assumed that things were

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Speaker 1: fine and may not have been aware of the argument

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Speaker 1: during the whole Brexit debate. Can you explain to the

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Speaker 1: extent to which Brexit was the corrosive element here? I

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Speaker 1: think you hit the nail on the head here. The

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Speaker 1: reason the European Union was so crucial in signing the

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Speaker 1: piece or reaching a piece agreement in nineteen ninety eight

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Speaker 1: was that it prevented what we keep calling a hard

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Speaker 1: border between Northern Ireland and Ireland the Republic of Ireland,

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Speaker 1: which are communities that were deeply integrated but between which

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Speaker 1: there were a lot of tension, and Brexit put this

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Speaker 1: border back on de facto. There's been a lot of

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Speaker 1: conversations since twenty sixteen and the referendum in the UK

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Speaker 1: to prevent this infrastructure coming back up, some of which

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Speaker 1: is to be honest, because they would be targets for

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Speaker 1: groups that disagree with this border. And by removing Northern

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Speaker 1: Ireland and the rest of the UK from the European Union,

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Speaker 1: it created a very complicated complicated situation because all of

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Speaker 1: these these trade routes were established for over decades, so

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Speaker 1: now you have to reinvent a custom systems that allowed

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Speaker 1: the goods to go beyond between the two regions and

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Speaker 1: people as well, movement of people. So Brexit really created

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Speaker 1: a very complicated situation where one part of the communities

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Speaker 1: of the community in Northern Ireland saw potential for reunification

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Speaker 1: with Ireland and the other parts felt like it was

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Speaker 1: being ripped away from the United Kingdom. That's really helpful.

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Speaker 1: It was the end of last year, December that Joe Kennedy,

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Speaker 1: the former Congressman, this is the young Joe Kennedy, the

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Speaker 1: third who just a couple of years ago delivered the

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Speaker 1: Democratic response to a Republican State of the Union address

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Speaker 1: and lost a race for Senate, named as US Special

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Speaker 1: Envoy way to Northern Ireland for economic affairs. He's with

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Speaker 1: the President. He was with the President in Belfast. What

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Speaker 1: does that appointment tell us about the administration's posture toward

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Speaker 1: all of this? To me, that shows that the administration

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Speaker 1: really understands where some of the pressure points are in

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Speaker 1: Northern Ireland to take stability to the next step. So

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Speaker 1: really what the President talks about peace dividends, So how

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Speaker 1: do we move from this to economic dividends of the peace.

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Speaker 1: Today we see in Northern Ireland unemployment is way down.

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Speaker 1: The GDP decrease for example during COVID was not as

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Speaker 1: bad as other parts of the UK. However, household income

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Speaker 1: and overall gdpeper capita is about eighty percent what it

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Speaker 1: is in the rest of the United Kingdom. So Northern

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Speaker 1: Ireland has emerged as a place up economic opportunity that

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Speaker 1: is not quite yet realized. So I think that's a

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Speaker 1: positive step from the administration to say we understand where

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Speaker 1: some of the pockets opportunity opportunity lie and we want

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Speaker 1: to get into those pockets and really expand the potential.

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Speaker 1: Which is also why the President mentioned that there's a

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Speaker 1: trade delegation later this year that will come with Joe

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Speaker 1: Kennedy with US companies, especially if the winds and I

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Speaker 1: want to emphasize that point. The new agreement between the

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Speaker 1: UK and the EU offers Northern Ireland dual market access.

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Speaker 1: That is a huge area of opportunity. How about that.

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Speaker 1: We're spending some time with Donna Ce and Ruey of csis.

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Speaker 1: This is all happening, of course, against the backdrop, as

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Speaker 1: I said earlier, of some really intense geopolitical tensions in Europe,

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Speaker 1: extending through Ukraine of course and going over to China.

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Speaker 1: And I wonder if we can connect the dots on

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Speaker 1: any of this here. As Emmanuel Macrone speaks to strategic

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Speaker 1: autonomy in Europe following his trip to China in which

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Speaker 1: he kind of came up empty, seems to be the

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Speaker 1: analysis he was looking for a lot more when it

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Speaker 1: came to the assistance of defining peace in Beijing. How

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Speaker 1: much does the president have to worry about maintaining alliances

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Speaker 1: in Europe? I will say, just to give some context

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Speaker 1: of the French visit he could you could see that

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Speaker 1: he didn't get a lot for his visit. But I

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Speaker 1: think people in Washington have focused a lot on the

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Speaker 1: words that he used, and really some of it is

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Speaker 1: I would say, a little bit overblown. Now that's not

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Speaker 1: to say that President Biden shouldn't worry about this, even

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Speaker 1: just for an issue like Ukraine. It is critical for

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Speaker 1: this administration to maintain unity with all the partners, all

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Speaker 1: all of its partners in Europe, and that includes France,

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Speaker 1: that includes the United Kingdom, which is also why he

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Speaker 1: was meeting with the Prime Minister of the UK this morning. Now,

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Speaker 1: China is, as we've talked about a lot, the looming challenge,

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Speaker 1: which is where he the administration is trying to enhance

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Speaker 1: unity in Europe and with the United States on the

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Speaker 1: issue of China. Let's say, visits like my home's visits

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Speaker 1: don't necessarily help, but I don't believe they hurt as

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Speaker 1: much as some of some of what's been portrayed on

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Speaker 1: this side of the pond. Interesting. This is why we

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Speaker 1: want to have some time with Donnasee and Ruey many

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Speaker 1: thanks for being with us program fellow for Europe, Russia

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Speaker 1: and Eurasia at CSIS. I'm Joe, Matthew and Washington and

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Speaker 1: it's time to assemble the panel. Rick Davis and Genie

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Speaker 1: Chanzano were here Bloomberg Politics contributors with an eye across

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Speaker 1: an ocean. As the President conducts his trip here, it's

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Speaker 1: about to get a lot easier, Rick, He's going on

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Speaker 1: to the ancestral home. He's making the pub visit today.

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Speaker 1: But those early hours in Belfast when he spent time

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Speaker 1: with the Prime Minister Joe Kennedy at his side here

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Speaker 1: calling for reunification or at least an end of the

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Speaker 1: standoff might be a better way to put it in

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Speaker 1: Northern Ireland. Will that resonate sure? I mean I think

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Speaker 1: this anytime you have a president with the heritage that

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Speaker 1: he has, you know, in country making the visit. His

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Speaker 1: standing is pretty high in the international community, led largely

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Speaker 1: by his leadership around the Ukraine fight, is really something special.

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Speaker 1: And the fact that he can bring this kind of

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Speaker 1: attention to a twenty five year old accord that actually

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Speaker 1: has an incredible amount of meaning right now, because these

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Speaker 1: Western institutions of peace and economic prosperity are under assault

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Speaker 1: by autocrats all around the world, and this is an

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Speaker 1: opportunity to celebrate a success story where peace has actually

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Speaker 1: generated economic opportunity for people there, and to remind everybody

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Speaker 1: that these things are not hollow institutions, that they're meaningful

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Speaker 1: and they have an impact and they're worth fighting for.

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Speaker 1: This is worth his time here, Genie. Will it actually

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Speaker 1: make a difference? I think it does. I think as

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Speaker 1: we go back, we forget how you extraordinary this agreement is.

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Speaker 1: And so it is very important to remember that given

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Speaker 1: the level of violence and hatred over there and this

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Speaker 1: Good Friday agreement was able to make remarkable progress, and

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Speaker 1: of course there's still more to be done. Only seven

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Speaker 1: percent of kids in Ireland go to integrated schools. It's

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Speaker 1: quite remarkable. You were talking about the government and basically

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Speaker 1: at a standstill, not working since last year. So these

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Speaker 1: are things that can still be work done. But I

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Speaker 1: think to celebrate that moment to talk maybe about more

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Speaker 1: economic investment, to talk about what can be done in

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Speaker 1: the wake of BREXA and how that reopened these wounds

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Speaker 1: we now see as we look at the polls over there,

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Speaker 1: we've seen a doubling in the increase of support to reunify.

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Speaker 1: So those are issues that still need to be addressed.

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Speaker 1: But it's very important the President, who describes himself or

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Speaker 1: has been described as five eighths Irish and Irish as

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Speaker 1: a pint of guinness, to be over there talking like this.

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Speaker 1: I think it is critically important and there's a huge

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Speaker 1: Irish community here in the United States that's waiting to

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Speaker 1: see what he has to say. We can't forget about that, well, no, absolutely, Rick.

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Speaker 1: I don't know how old you have to be. If

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Speaker 1: you're under forty m guessing this is we need to

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Speaker 1: tell people that you wouldn't have you wouldn't have believed

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Speaker 1: what this looked like, with barbed wire across Northern Ireland,

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Speaker 1: with daily bombings, fighting with police, the molotov cocktails. This

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Speaker 1: was like a daily story there, and you fast forward

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Speaker 1: twenty five years, people kind of assume everything's always been

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Speaker 1: all right, right, daily story there and here. This captivated

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Speaker 1: people's attention because it was basically the first we saw

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Speaker 1: of European terrorism. That's long before we ever heard of

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Speaker 1: al Qaeda, and the reality is that it has faded

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Speaker 1: in everybody's memory banks, and so a reminder so that

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Speaker 1: we don't replicate the abuses of the past is always

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Speaker 1: on tap. Presidents should be history teachers. They have a

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Speaker 1: unique position in the American psyche to educate, and this

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Speaker 1: is a great example of using some of his bully

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Speaker 1: pulpit in the presidency to remind people that we are

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Speaker 1: only one generation away from in many cases, you know,

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Speaker 1: really dire situations, and in this case, leaders banded together

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Speaker 1: of time. So it is worth a victory lap in

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Speaker 1: that regard. But it's also a cautionary tale because these

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Speaker 1: institutions are not strong right now, they're fragile. They're under

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Speaker 1: assault both by democrats and autocrats. And the reality is

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Speaker 1: this is part of the war we're fighting right now

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Speaker 1: for the intellectual support of our voters and our people

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Speaker 1: to support these kinds of institutions. Rick Davis nails it.

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Speaker 1: There before the Good Friday Agreements, when you talked about

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Speaker 1: terrorist attacks, when you heard reports about terrorist attacks, that

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Speaker 1: was frequently you were talking about what was going on

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Speaker 1: in Northern Ireland, not the Middle East. It's like another

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Speaker 1: life much more with our signature panel, Rick and Jeanie

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Speaker 1: coming up next time, Joe, Matthew and Washington, where we're

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Speaker 1: just getting started on the fastest show in politics, This

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Speaker 1: is Bloomberg. You're listening to the Bloomberg Sound on podcast.

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Speaker 1: Catch the program live weekdays at one Eastern on Bloomberg Radio,

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Speaker 1: the tune in app, Bloomberg dot Com, and the Bloomberg

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Speaker 1: Business App. You can also listen live on Amazon Alexa

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Speaker 1: from our flagship New York station, Just Say Alexa played

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Speaker 1: Bloomberg eleven thirty. The Secretary of Defense says they will

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Speaker 1: turn over every rock to track the leaked documents. Of course,

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Speaker 1: there's no rocks on the dark web, and a lot

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Speaker 1: of people are saying good luck with that. I've been

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Speaker 1: convening senior department leaders daily on our response, and I

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Speaker 1: have directed an urgent cross department effort, and we've referred

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Speaker 1: the matter to the Department of Justice, which has opened

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Speaker 1: a criminal investigation. Hey you have. Lloyd Austin says the

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Speaker 1: US will not stop until it finds out how the

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Speaker 1: classified documents on Ukraine, on Israel and other nations appeared online.

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Speaker 1: In what were his first public remarks about this whole fiasco,

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Speaker 1: held a news briefing yesterday, was alongside the Philippine Secretary

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Speaker 1: of Foreign Affairs. We learned a little bit more here,

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Speaker 1: He says. He was first brief the sixth of April

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Speaker 1: about what he called reports of unauthorized disclosure of sensitive

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Speaker 1: and classified material compiled by the Pentagon. Days since, we've

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Speaker 1: learned a lot. Right now, the Justice Department, as he

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Speaker 1: just mentioned, has opened its own investigation. The government trying

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Speaker 1: to reassure its allies now about its ability to keep

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Speaker 1: secrets safe. That must have been a fun part of

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Speaker 1: the conversation between Joe Biden and Richie Sunac as the

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Speaker 1: Defense Secretary makes clear they have no idea. We take

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Speaker 1: this very seriously, and we will continue to work closely

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Speaker 1: with our outstanding allies and partners, and nothing will ever

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Speaker 1: stop us from keeping America secure. We're just going to

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Speaker 1: keep on looking. Let's reassemble the panel for the latest

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Speaker 1: on this, because boy, it's not getting any better. Rick

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Speaker 1: Davis and Jeanie Schanz know, Genie, this is clearly an embarrassment.

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Speaker 1: We spend a little bit of time on it yesterday,

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Speaker 1: and we've learned that some of the documents that are

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Speaker 1: in here, namely the one we heard about involving Egypt

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Speaker 1: supplying rockets to Russia, may not have been accurate. They

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Speaker 1: don't seem to have much of a clue. On't even

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Speaker 1: where to start here. How do you conduct an investigation

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Speaker 1: of the dark web? You know, fiasco the word you used,

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Speaker 1: I think is an apt way to describe this. Everybody

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Speaker 1: you talk to says, oh, by the way, if you're

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Speaker 1: under twenty five, we'll have to explain to you what

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Speaker 1: discord is because you've never been on it and you

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Speaker 1: have no idea, and ask, yeah, and this is where

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Speaker 1: these documents were released, and we don't know to your point,

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Speaker 1: how many were manipulated, which are true, which aren't true,

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Speaker 1: and they raise real questions about Ukraine's ability to fight

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Speaker 1: this counter offensive. Does the United States need to step

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Speaker 1: up more at this point? And we do know that

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Speaker 1: we've been pushing our allies South Korea, Israel to step

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Speaker 1: up the supply, so an awful lot there. And again

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Speaker 1: we don't know the veracity of the documents, we don't

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Speaker 1: know where they came from, we don't know the motive

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Speaker 1: of the leaker, and so all of these things, you know,

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Speaker 1: I think really a real embarrassment for the Pentagon, quite frankly,

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Speaker 1: and something they do have to get to the bottom of,

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Speaker 1: because you know, this kind of thing does really have

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Speaker 1: enormous ripple effects as we go forward on everything from

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Speaker 1: the war to Ukraine to our ability to secure our documents.

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Speaker 1: You know, how can the United States not be able

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Speaker 1: to do this at this point when we're talking about

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Speaker 1: documents this critical the stuff involving Ukraine is concerning certainly

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Speaker 1: to Ukraine and never mind the US here rick Ukraine's

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Speaker 1: Defense Minister Reznikov says the League on Ukraine is a

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Speaker 1: mixture of true, false and outdated information because it definitely

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Speaker 1: doesn't speak compliments to Ukraine, and it would suggest that

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Speaker 1: the US is very worried about this offensive and what

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Speaker 1: strategy Ukraine might have. Well, look, there's no question that

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Speaker 1: the United States has a point of view that is

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Speaker 1: probably decidedly different than the public projections that they make,

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Speaker 1: and and that's absolutely a fair consideration, right, And then

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Speaker 1: when you have documents like this that leak out that

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Speaker 1: undermine that public perception, you know, it's embarrassing, but it's

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Speaker 1: actually not necessarily a bad strategy. I mean, you know,

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Speaker 1: we are in a fight for the hearts and minds

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Speaker 1: of leaders all around Western Europe to supply materials and

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Speaker 1: support to the Ukrainians, and you don't necessarily open your

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Speaker 1: kimono to all of those individuals every time you're asking

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Speaker 1: them to participate. And and so, yeah, it doesn't help

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Speaker 1: the Ukrainians that the older material in there is probably

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Speaker 1: not relevant. I mean, it's historical knowledge that Russians can

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Speaker 1: take advantage of, but probably not operational. But there are

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Speaker 1: probably things in there that I'm sure the Ukrainians would

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Speaker 1: prefer the Russians not to be broadcast. Now we are

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Speaker 1: in in a battle of intelligence. The Biden administration is

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Speaker 1: used quite well, the selective leaks of Russian intelligence to

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Speaker 1: undermine their campaign in Ukraine and now unfortunately their their

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Speaker 1: leak of intelligence information is cutting against them. But look,

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Speaker 1: we don't know how many times this has been cycled

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Speaker 1: through other people before it was published. We don't know

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Speaker 1: how many things, as Genie said, have been manipulated. We

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Speaker 1: know there are facts and figures on more casualties from

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Speaker 1: Russia that have been manipulated. Why in the world would

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Speaker 1: you do that? So um, you know, I think before

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Speaker 1: you make any conclusions on what impact this is going

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Speaker 1: to have on a potential offensive initiated by the Ukrainians,

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Speaker 1: you really got to figure out, you know, sort of

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Speaker 1: what's accurate, what's not accurate, and how many people pass

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Speaker 1: through this document before it actually showed up on the

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Speaker 1: web and it could have been apparently thousands according to reports,

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Speaker 1: which is a bit scary here, Genie. And it does

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Speaker 1: call into question, you know, processes and whether we need

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Speaker 1: to start making some you know, new protocols in this

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Speaker 1: new digital world that we're in. But what does this

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Speaker 1: mean in terms of conversations with our allies. The ambassador

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Speaker 1: from Morocco yesterday was you know, really condemning the Biden

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Speaker 1: administration for spying on our allies after Barack Obama said

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Speaker 1: this wouldn't happen again. Is this a tough conversation today

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Speaker 1: or was it earlier in Belfast? For instance, for Joe Biden,

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Speaker 1: it could have been tough. I can't imagine that they

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Speaker 1: are surprised. Look listen, we do it. We do it exactly,

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Speaker 1: So you know, I think that's a little bit of

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Speaker 1: sort of you know, going out there and saying, you know,

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Speaker 1: sort of pretend shock if you will. But the reality

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Speaker 1: is nobody shocked by that. But I do think it

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Speaker 1: does raise real issues in terms of you know, we've

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Speaker 1: been hearing from the Republican side in some cases, you know,

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Speaker 1: no blank check. Well, if these documents are to be believed,

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Speaker 1: there has been no blank check on the part of

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Speaker 1: the United States. We have been generous, but the blank

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Speaker 1: check ideas out the window. So you know, there are

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Speaker 1: repercussions in an awful lot of areas. But sure we

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Speaker 1: do keep check on what our allies are doing. It's

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Speaker 1: not comfortable to have that information released publicly, but we

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Speaker 1: can bet they are doing the same thing to us

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Speaker 1: as much as they are able. Spending time with Rick

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Speaker 1: Davis and Gen Chanzano here on Bloomberg Sound On. I

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Speaker 1: have to ask you guys, because you're here, We're gonna

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Speaker 1: have more on this next hour when we spend some

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Speaker 1: time with Mark mccatt. But we've got another And a

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Speaker 1: lot of people saw this coming. He's been making all

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Speaker 1: the right who was going all the right places. Senator

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Speaker 1: Tim Scott of South Carolina's getting a lot closer. I'm

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Speaker 1: announcing my exploratory Committee the President of the United States. Yes,

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Speaker 1: with great dramatic flourish and high production values. Yet another

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Speaker 1: video starts at Mount Sumter. I don't know if that

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Speaker 1: was the right idea or not, Rick, But how promising

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Speaker 1: is this candidacy? You know? Look, I mean Tim Scott

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Speaker 1: is I think got great potential to overperform. A lot

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Speaker 1: of Republicans like him. They liked the sort of story

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Speaker 1: of Tim Scott coming from nothing to something and the

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Speaker 1: aspirational nature of what he says, and he's a very

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Speaker 1: positive individual. So I think there's a real story there

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Speaker 1: for the Republican Party that may have quite a bit

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Speaker 1: of fatigue with those who served in the Trump administration,

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Speaker 1: with Trump himself, the anxiety that everyone feels about all

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Speaker 1: the attacks going back and forth, and and he's kind

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Speaker 1: of like the the calm in the center of that

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Speaker 1: storm right now, and that might be actually an interesting

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Speaker 1: approach to take as he plans to launch a presidential campaign,

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Speaker 1: just being the normal guy Genie. He calls out Joe

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Speaker 1: Biden in the video and Democrats we see images of

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Speaker 1: AOC and Bernie Sanders. He says they're exploiting race and

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Speaker 1: that Democrats refer to him as a token. Will that resonate?

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Speaker 1: You know, I think it could on the Republican right,

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Speaker 1: and I think in normal times, Tim Scott would be

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Speaker 1: a really great candidate. But you look at what Jason

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Speaker 1: Miller tweeted out Trump's advisor. He said, this is going

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Speaker 1: to be really bad for Santis, and I think that

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Speaker 1: that's really what we're seeing here, as these people roll out,

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Speaker 1: from Nicky Haley to potentially Tim Scott if he goes

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Speaker 1: through with this. You know, Trump's team is betting that

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Speaker 1: they're going to take from Disantis, and so, you know,

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Speaker 1: in a normal world, I'd say he's a great candidate,

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Speaker 1: but in this environment, Trump's it, and I'm not sure

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Speaker 1: he's going to resonate in the way he should and

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Speaker 1: I that video he rolled out that you're mentioning very

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Speaker 1: interesting to me to see him think talking about, you know,

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Speaker 1: the culture on the left of grievance and victimhood. I'm

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Speaker 1: listening to Donald Trump and all he does is have

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Speaker 1: a culture of grievance about himself. So I thought that

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Speaker 1: was a very strange way to roll this out. That's sure,

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Speaker 1: he was talking about grievance over greatness, he said, Rick,

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Speaker 1: does that Does that resonate with more than the right though?

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Speaker 1: Does that resonate with the center? Yeah? And there may

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Speaker 1: be voters, especially those that might participate in a caucus

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Speaker 1: in Iowa, who you know, would that would resonate with. Look,

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Speaker 1: there's a lot of people who feel displaced in society today,

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Speaker 1: and I think that regardless of where you call it

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Speaker 1: a grievance or or or cultural issues, I think that

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Speaker 1: he's trying to tap into that in a very subtle way,

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Speaker 1: maybe too subtle for politics today, which seems to be

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00:25:13,800 --> 00:25:16,520
Speaker 1: on the hard end of a two by four where

433
00:25:16,600 --> 00:25:19,680
Speaker 1: you spend most of the time. So just ask Asa Hutchinson,

434
00:25:20,320 --> 00:25:22,600
Speaker 1: Rick Davis, and Gen Chanzano. We'll be back with a

435
00:25:22,640 --> 00:25:24,719
Speaker 1: little bit more. We're gonna bring Emily Wilkinson as we

436
00:25:24,800 --> 00:25:28,760
Speaker 1: acknowledge and mark thee hundredth day of the Republican led House.

437
00:25:29,640 --> 00:25:33,159
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

438
00:25:33,200 --> 00:25:36,240
Speaker 1: live week days at one Eastern on Bloomberg dot Com,

439
00:25:36,280 --> 00:25:39,120
Speaker 1: the iHeart Radio app, and the Bloomberg Business App. We're

440
00:25:39,160 --> 00:25:43,160
Speaker 1: listening on demand wherever you get your podcasts. It's been

441
00:25:43,240 --> 00:25:48,480
Speaker 1: one hundred days, a hundred days since the House GOP

442
00:25:48,920 --> 00:25:52,600
Speaker 1: got to work. As we read on the terminal Bloomberg

443
00:25:52,600 --> 00:25:55,679
Speaker 1: Government Semiie Wilkins, House GOP off to bumpy starts, slowed

444
00:25:55,680 --> 00:25:58,200
Speaker 1: by debt limit party riffs. Yes, they emerge from their

445
00:25:58,200 --> 00:26:01,280
Speaker 1: first one hundred days struggling to carry out Emily Rights

446
00:26:01,680 --> 00:26:04,600
Speaker 1: much of their agenda while facing debt limit and spending showdowns.

447
00:26:04,600 --> 00:26:07,120
Speaker 1: It could make or break their ability to hold their majority.

448
00:26:07,200 --> 00:26:09,560
Speaker 1: Just remember where we were though one hundred days ago

449
00:26:10,200 --> 00:26:14,560
Speaker 1: and change. Remembering it took an historic fifteen rounds of voting.

450
00:26:14,600 --> 00:26:18,600
Speaker 1: I had to look fifteen rounds to elect Kevin McCarthy

451
00:26:18,680 --> 00:26:20,920
Speaker 1: as speaker. Remember we spoke when it was done. See

452
00:26:21,080 --> 00:26:23,760
Speaker 1: this is a great part because it took this long.

453
00:26:24,000 --> 00:26:26,159
Speaker 1: Now we learned how to govern. There we go so

454
00:26:26,240 --> 00:26:28,560
Speaker 1: now we'll be able to get the job done. So now,

455
00:26:28,880 --> 00:26:31,439
Speaker 1: well it's been a hundred days and still not allowed

456
00:26:31,440 --> 00:26:36,320
Speaker 1: to show for it to Emily Wilkins reporting she's with us. Now, Emily,

457
00:26:36,920 --> 00:26:40,359
Speaker 1: what is there to show for a hundred days? So

458
00:26:40,680 --> 00:26:43,600
Speaker 1: it's not like Republicans are completely empty handed right now.

459
00:26:43,720 --> 00:26:46,920
Speaker 1: They did pass a major energy package that they can

460
00:26:47,000 --> 00:26:50,120
Speaker 1: say now that they've pushed for energy independence. Are one,

461
00:26:50,840 --> 00:26:52,720
Speaker 1: are one, they're not. It's not going to go to

462
00:26:52,720 --> 00:26:54,120
Speaker 1: the sun and not going to go to the president,

463
00:26:54,359 --> 00:26:57,320
Speaker 1: although maybe parts of the bill might. They also did

464
00:26:57,400 --> 00:27:00,640
Speaker 1: pass a package on this parental Bill of rights when

465
00:27:00,640 --> 00:27:03,880
Speaker 1: it comes to parents knowing things about their child schools, schools,

466
00:27:03,880 --> 00:27:07,600
Speaker 1: making sure they're asking permission for the parents before certain things. Again,

467
00:27:08,000 --> 00:27:10,320
Speaker 1: that's not really going to go anywhere. And again, even

468
00:27:10,400 --> 00:27:13,679
Speaker 1: for that, you kind of saw this really rocky passage

469
00:27:13,880 --> 00:27:16,960
Speaker 1: where initially you had some hardline conservatives saying, hey, this

470
00:27:17,040 --> 00:27:19,879
Speaker 1: bill does not go far enough. They wound up adding

471
00:27:19,880 --> 00:27:22,919
Speaker 1: some amendments on transgender students that won the support of

472
00:27:22,960 --> 00:27:26,000
Speaker 1: some hardliners, but then you lost a couple moderates who

473
00:27:26,040 --> 00:27:28,360
Speaker 1: were like, hey, we can't vote on this and then

474
00:27:28,400 --> 00:27:31,800
Speaker 1: go back to our districts. You know, these are districts

475
00:27:31,800 --> 00:27:34,159
Speaker 1: with a lot of independent voters, a lot of Democrats

476
00:27:34,400 --> 00:27:36,359
Speaker 1: who just aren't going to be in favor of some

477
00:27:36,440 --> 00:27:38,840
Speaker 1: of those provisions. And so this is the difficulty here.

478
00:27:38,960 --> 00:27:42,719
Speaker 1: McCarthy to become speaker made a number of agreements, and

479
00:27:42,760 --> 00:27:46,040
Speaker 1: the corrux of all those agreements is that all all

480
00:27:46,080 --> 00:27:48,840
Speaker 1: two hundred and twenty two Republicans would get more of

481
00:27:48,880 --> 00:27:52,320
Speaker 1: a say in the process. And the good news is that,

482
00:27:52,400 --> 00:27:54,679
Speaker 1: you know, that is kind of how our democracy should be.

483
00:27:54,920 --> 00:27:57,680
Speaker 1: But the trick of it is is that it becomes

484
00:27:57,800 --> 00:28:00,320
Speaker 1: more and more difficult. Then you have so many cooks

485
00:28:00,359 --> 00:28:02,439
Speaker 1: at the kitchen, you have so many people who are

486
00:28:02,480 --> 00:28:06,240
Speaker 1: trying to contribute things that it does become difficult sometimes

487
00:28:06,280 --> 00:28:09,200
Speaker 1: to pass some of these pieces of legislation just because

488
00:28:09,320 --> 00:28:13,680
Speaker 1: everyone wants to have a say. We don't count the hearings,

489
00:28:13,720 --> 00:28:17,200
Speaker 1: the investigations, the oversight, which has been a big component

490
00:28:17,280 --> 00:28:21,480
Speaker 1: of this new majority as something to show for the

491
00:28:21,480 --> 00:28:24,200
Speaker 1: first hundred days, right, they actually haven't culminated in anything

492
00:28:24,280 --> 00:28:28,000
Speaker 1: yet they haven't. And I got some interesting perspectives when

493
00:28:28,040 --> 00:28:30,320
Speaker 1: I was speaking to folks on that. I mean, for

494
00:28:30,400 --> 00:28:33,680
Speaker 1: one regard, Americans do want Republicans to focus on things

495
00:28:33,720 --> 00:28:37,320
Speaker 1: like the banking crisis, the trained delilpments, not so much,

496
00:28:37,359 --> 00:28:41,560
Speaker 1: say Hunter Biden's laptop, and Republicans have faced some criticism

497
00:28:41,720 --> 00:28:44,760
Speaker 1: from conservative commentators who have said, look, we don't see

498
00:28:44,760 --> 00:28:48,200
Speaker 1: a smoking gun. They've yet to really uncover any evidence.

499
00:28:48,680 --> 00:28:50,640
Speaker 1: But you know, on the other hand, they are a

500
00:28:50,920 --> 00:28:53,920
Speaker 1: only one hundred days into it. Certainly Jim Jordan's sending

501
00:28:53,920 --> 00:28:55,920
Speaker 1: out plenty of subpoenas, trying to get a lot of

502
00:28:55,960 --> 00:28:59,360
Speaker 1: witnesses doing depositions that we might learn about later. And

503
00:28:59,480 --> 00:29:02,840
Speaker 1: the other interesting thing, as I was speaking with Kevin Kosar,

504
00:29:03,480 --> 00:29:07,280
Speaker 1: who covers Congress for the American Enterprise Institute, and he

505
00:29:07,440 --> 00:29:10,120
Speaker 1: was like, look, even if Republicans don't wind up with

506
00:29:10,280 --> 00:29:14,560
Speaker 1: some major thing that completely crashes and burns Biden's presidential run,

507
00:29:15,000 --> 00:29:17,560
Speaker 1: just by the fact that they are doing these investigations,

508
00:29:17,640 --> 00:29:19,600
Speaker 1: by the fact that they're looking into these things and

509
00:29:19,680 --> 00:29:22,320
Speaker 1: talking about these things, that alone is going to be

510
00:29:22,480 --> 00:29:25,120
Speaker 1: enough to win some of these Republicans big points with

511
00:29:25,240 --> 00:29:27,800
Speaker 1: their base. It's a great piece of reporting. Check it

512
00:29:27,840 --> 00:29:30,080
Speaker 1: out on the terminal from Emily Wilkins House gop Off

513
00:29:30,080 --> 00:29:32,480
Speaker 1: to bumpy starts slowed by debt limit, Party riffs. We

514
00:29:32,520 --> 00:29:34,440
Speaker 1: do have a lot more to follow in the second

515
00:29:35,040 --> 00:29:38,640
Speaker 1: half of this year, complete with thee hundred days scorecard.

516
00:29:38,680 --> 00:29:40,800
Speaker 1: Great work, Emily, and thank you as we reassembled the

517
00:29:40,840 --> 00:29:44,480
Speaker 1: panel for their take on this Rick and Genie hundred days.

518
00:29:44,480 --> 00:29:49,000
Speaker 1: In Genie, it's easy to, I guess, throw rocks at

519
00:29:49,040 --> 00:29:51,520
Speaker 1: a new Republican majority doesn't have a lot to show

520
00:29:51,520 --> 00:29:54,560
Speaker 1: for it. But how you know, they're not done yet,

521
00:29:55,120 --> 00:29:58,160
Speaker 1: And I do wonder we've come a long way since

522
00:29:58,200 --> 00:30:01,040
Speaker 1: we were talking about, you know, most to vacate and

523
00:30:01,040 --> 00:30:05,360
Speaker 1: how Kevin McCarthy could potentially get fired in his first

524
00:30:05,440 --> 00:30:08,720
Speaker 1: hundred days, haven't we we have? I mean, he hasn't

525
00:30:08,720 --> 00:30:12,200
Speaker 1: gotten fired. They did get two bills through, and Emily

526
00:30:12,240 --> 00:30:14,920
Speaker 1: noted they got other priorities passed that won't make it

527
00:30:14,960 --> 00:30:17,760
Speaker 1: through the Senate. But this is life in a divided government,

528
00:30:17,800 --> 00:30:20,720
Speaker 1: with a divided caucus, only a four seat margin, and

529
00:30:20,840 --> 00:30:23,640
Speaker 1: beholden to a former president who's running again. And this

530
00:30:23,720 --> 00:30:26,160
Speaker 1: is what we're seeing. And you know, the latest Pew

531
00:30:26,240 --> 00:30:30,000
Speaker 1: research shows a twenty nine approval rating for Republicans. They're

532
00:30:30,000 --> 00:30:32,800
Speaker 1: coming back after Easter break and they're going to have

533
00:30:33,000 --> 00:30:36,640
Speaker 1: a huge challenge because they've got to deal with the

534
00:30:36,760 --> 00:30:39,520
Speaker 1: elephant in the room, which is the debt ceiling. And

535
00:30:39,640 --> 00:30:42,240
Speaker 1: we heard in the leaks over the weekend and last

536
00:30:42,240 --> 00:30:45,640
Speaker 1: week that Kevin McCarthy doesn't have faith in some of

537
00:30:45,640 --> 00:30:49,600
Speaker 1: his top lieutenants, including Jody Arrington and Steve Scalise. So

538
00:30:49,840 --> 00:30:51,959
Speaker 1: how he's going to work with them to get this

539
00:30:52,120 --> 00:30:55,560
Speaker 1: done with the very minimal you know, margin that he

540
00:30:55,600 --> 00:30:58,440
Speaker 1: has he can only lose four is going to be tricky.

541
00:30:58,480 --> 00:31:00,480
Speaker 1: If he's able to do it, he may code down

542
00:31:00,480 --> 00:31:03,320
Speaker 1: in the anals. Is an amazing speaker, but so far

543
00:31:03,440 --> 00:31:05,920
Speaker 1: we haven't seen that. We don't have an X date yet, Rick,

544
00:31:05,960 --> 00:31:08,120
Speaker 1: but I suppose the next one hundred days could bring

545
00:31:08,200 --> 00:31:11,080
Speaker 1: some resolution, for better or worse to this debt ceiling crisis.

546
00:31:11,080 --> 00:31:16,360
Speaker 1: Will that define the Speaker's first session here as Speaker

547
00:31:16,360 --> 00:31:19,400
Speaker 1: of the House, Well, this could actually define his speakers ship, right.

548
00:31:19,480 --> 00:31:22,040
Speaker 1: I mean, there's really been nothing happening that would upset

549
00:31:22,080 --> 00:31:25,560
Speaker 1: any of the megarepublicans who opposed his speakership. Right, They've

550
00:31:25,600 --> 00:31:28,479
Speaker 1: all been out doing their own thing, no interruptions from

551
00:31:28,480 --> 00:31:32,080
Speaker 1: the Speaker, but no progress on the budget or the

552
00:31:32,160 --> 00:31:36,200
Speaker 1: debt ceiling activity. And that's where some of the tension

553
00:31:36,240 --> 00:31:38,360
Speaker 1: will probably come in. And so you know, in the

554
00:31:38,360 --> 00:31:42,320
Speaker 1: next quarter, Speaker McCarthy's going to have to use some

555
00:31:42,360 --> 00:31:44,600
Speaker 1: of the credit that he's built up to be able

556
00:31:44,640 --> 00:31:47,320
Speaker 1: to cash here a deal with the Biden administration on

557
00:31:47,360 --> 00:31:49,600
Speaker 1: the debt ceiling. And you know, he stood up in

558
00:31:49,640 --> 00:31:51,720
Speaker 1: the well and talked about his first hundred days and

559
00:31:51,720 --> 00:31:54,360
Speaker 1: basically attacked the Democrats for not having a budget. And so,

560
00:31:55,200 --> 00:31:58,160
Speaker 1: I guess of good defense is always a good offense. Well,

561
00:31:58,200 --> 00:32:00,240
Speaker 1: see you sound a little skeptical, then, do you he's

562
00:32:00,240 --> 00:32:02,560
Speaker 1: in a stronger position now than he was after fifteen

563
00:32:02,640 --> 00:32:04,600
Speaker 1: rounds and on the verge of being fired. No, I

564
00:32:04,600 --> 00:32:06,880
Speaker 1: think he's in the same position again. Nothing has happened

565
00:32:06,920 --> 00:32:10,160
Speaker 1: since then that would actually change the dynamic, either make

566
00:32:10,240 --> 00:32:14,080
Speaker 1: him less popular or more popular with the group that

567
00:32:14,200 --> 00:32:16,640
Speaker 1: was opposing him. And you know, he's allowed Marjorie Taylor

568
00:32:16,680 --> 00:32:18,840
Speaker 1: Green to take a leadership role and you know, being

569
00:32:18,840 --> 00:32:21,280
Speaker 1: important on a lot of committees. He's allowed Jim Jordan

570
00:32:21,360 --> 00:32:24,240
Speaker 1: to investigate anybody he wants to investigate, without any progress

571
00:32:24,240 --> 00:32:27,200
Speaker 1: on other important issues. You know, I mean like he's

572
00:32:27,200 --> 00:32:29,960
Speaker 1: allowed the team that opposed him to go ahead and

573
00:32:30,000 --> 00:32:32,600
Speaker 1: do whatever they want to do. But he's not making

574
00:32:32,600 --> 00:32:34,880
Speaker 1: any progress on his agenda, and his agenda has to

575
00:32:34,920 --> 00:32:38,480
Speaker 1: be passing a budget. You know, he said regular order.

576
00:32:38,600 --> 00:32:41,520
Speaker 1: That means all these appropriation committees should be doing work

577
00:32:41,560 --> 00:32:45,240
Speaker 1: today to manage out a budget, which will then give

578
00:32:45,280 --> 00:32:47,920
Speaker 1: them the insight into the spending cuts that they want

579
00:32:48,120 --> 00:32:50,240
Speaker 1: in order to put a deal on the table with Biden.

580
00:32:50,640 --> 00:32:53,080
Speaker 1: None of that's been done, so, I mean, who's the

581
00:32:53,160 --> 00:32:55,480
Speaker 1: upsetting I mean, there's no tension other than in the

582
00:32:55,560 --> 00:32:58,520
Speaker 1: leadership ranks where everyone's pointing a finger as to why

583
00:32:58,600 --> 00:33:01,880
Speaker 1: this budget isn't getting done. Genie, does Joe Biden trust

584
00:33:01,960 --> 00:33:04,160
Speaker 1: Kevin McCarthy to the extent that he says he does?

585
00:33:04,960 --> 00:33:09,400
Speaker 1: You know, would I wouldn't bet on it. I wouldn't

586
00:33:09,400 --> 00:33:11,040
Speaker 1: bet on it. I think he can work with him.

587
00:33:11,120 --> 00:33:14,239
Speaker 1: Joe Biden is comfortable working with the legislature. That's not

588
00:33:14,280 --> 00:33:16,560
Speaker 1: a problem for him. But he's going to keep asking

589
00:33:16,600 --> 00:33:18,440
Speaker 1: for this budget and that's going to be a challenge

590
00:33:18,480 --> 00:33:22,680
Speaker 1: for for Kevin McCarthy. God knows. We're still waiting great

591
00:33:22,680 --> 00:33:25,880
Speaker 1: conversation with Rick Davis and Genie Chanzano our signature panel

592
00:33:25,920 --> 00:33:29,440
Speaker 1: on the Fastest Show in Politics. You're listening to the

593
00:33:29,440 --> 00:33:33,320
Speaker 1: Bloomberg sound On Podcast. Catch us live weekdays at one

594
00:33:33,360 --> 00:33:36,480
Speaker 1: Eastern on Bloomberg dot com, the Irhart Radio app, and

595
00:33:36,520 --> 00:33:39,480
Speaker 1: the Bloomberg Business App. We're listening on demand wherever you

596
00:33:39,520 --> 00:33:43,000
Speaker 1: get your podcast. We have Katie Lines with us for

597
00:33:43,080 --> 00:33:45,040
Speaker 1: hour two of Sound On, which we do every day

598
00:33:45,040 --> 00:33:48,120
Speaker 1: now live from Washington. I'm Joe, Matthew and Kaylee. This

599
00:33:48,200 --> 00:33:52,320
Speaker 1: is not great, as the FED suggests, a recession may

600
00:33:52,360 --> 00:33:55,000
Speaker 1: well be on the horizon. The headline on the terminal

601
00:33:56,040 --> 00:34:00,760
Speaker 1: staff projected mild recession starting later in twenty three. Yeah,

602
00:34:00,800 --> 00:34:03,960
Speaker 1: and remember this is the meeting minutes of a meeting

603
00:34:04,000 --> 00:34:06,760
Speaker 1: in which they did still unanimously hike by twenty five

604
00:34:06,800 --> 00:34:09,959
Speaker 1: basis points because they are trying to fight inflation. But really,

605
00:34:09,960 --> 00:34:11,880
Speaker 1: when we're thinking about what the FED does next, it

606
00:34:12,000 --> 00:34:15,400
Speaker 1: is that kind of concern around recession that may have

607
00:34:15,560 --> 00:34:17,480
Speaker 1: some doubt onto whether or not the FED is actually

608
00:34:17,560 --> 00:34:21,040
Speaker 1: going to hike again or ultimately pause in may. Also

609
00:34:21,080 --> 00:34:22,960
Speaker 1: a headline that came out here and is revealed in

610
00:34:23,000 --> 00:34:25,400
Speaker 1: the minutes is that FED officials stress the need for

611
00:34:25,560 --> 00:34:28,799
Speaker 1: policy flexibility. This really comes down to the issue of

612
00:34:28,880 --> 00:34:32,160
Speaker 1: credit conditions. Given the bank failures, we have seen the

613
00:34:32,200 --> 00:34:35,600
Speaker 1: fact that banks seem to be pulling back on lending

614
00:34:35,680 --> 00:34:37,800
Speaker 1: all of that titans conditions in the economy, which is

615
00:34:37,800 --> 00:34:39,799
Speaker 1: in theory what the FED wants to achieve, but may

616
00:34:39,880 --> 00:34:42,320
Speaker 1: already be doing some of its work for it. And

617
00:34:42,400 --> 00:34:44,920
Speaker 1: of course this is something we've heard the IMF talking

618
00:34:44,960 --> 00:34:47,759
Speaker 1: about this week as well. Fascinating. It's a good good

619
00:34:47,800 --> 00:34:50,040
Speaker 1: day to have Libby Cantrill onboard, the head of public

620
00:34:50,080 --> 00:34:54,320
Speaker 1: policy at Pacific Investment Management Company. That's of course PIMCO,

621
00:34:54,400 --> 00:34:56,520
Speaker 1: and Libby, it's great to have you with us here.

622
00:34:57,200 --> 00:34:59,319
Speaker 1: I was looking forward to talking with you about the

623
00:34:59,360 --> 00:35:01,640
Speaker 1: debt ceiling. I found your note fascinating this week, but

624
00:35:01,680 --> 00:35:05,000
Speaker 1: I have to ask you if you have any reaction

625
00:35:05,040 --> 00:35:06,960
Speaker 1: to this, whether these FED minutes helped to fill in

626
00:35:07,000 --> 00:35:08,719
Speaker 1: any blanks for you as you look ahead for a

627
00:35:08,719 --> 00:35:12,080
Speaker 1: potential recession later this year. Yeah, I mean it does.

628
00:35:12,120 --> 00:35:15,440
Speaker 1: I think in some ways, I think the FED likely

629
00:35:15,520 --> 00:35:18,200
Speaker 1: saw a lot what it wanted to see in terms

630
00:35:18,320 --> 00:35:23,719
Speaker 1: of cooling, rental and housing and shelter inflation that's of

631
00:35:23,760 --> 00:35:26,920
Speaker 1: course been through stubbornly high, and it's about a third

632
00:35:26,920 --> 00:35:29,839
Speaker 1: of CPI, and so the fact that that is at

633
00:35:29,920 --> 00:35:36,319
Speaker 1: least directionally decreasing and softening will likely you reassure the

634
00:35:36,360 --> 00:35:39,560
Speaker 1: FED that they are on the right track. Goods inflation

635
00:35:39,760 --> 00:35:44,560
Speaker 1: also softening as well. That's actually under the inflation the

636
00:35:44,680 --> 00:35:47,759
Speaker 1: FEDS target right now on the goods inflation. But of

637
00:35:47,760 --> 00:35:51,960
Speaker 1: course services inflation is remaining stubbornly high, and that is

638
00:35:52,000 --> 00:35:54,120
Speaker 1: I think the big open question. Now. Some of that's

639
00:35:54,120 --> 00:35:57,400
Speaker 1: coming from and a lot of this will probably resonate

640
00:35:57,440 --> 00:36:00,399
Speaker 1: with your listeners because we have all experienced it. High

641
00:36:00,480 --> 00:36:05,080
Speaker 1: airfares and high compel prices. Those are obviously very volatile

642
00:36:05,200 --> 00:36:10,560
Speaker 1: and could decrease into the cyclical time period, but obviously

643
00:36:10,880 --> 00:36:14,560
Speaker 1: higher than services inflation, still higher than what the FED

644
00:36:14,680 --> 00:36:17,759
Speaker 1: is comfortable with. But again, the fact that you know,

645
00:36:17,800 --> 00:36:21,880
Speaker 1: housing and shelter inflation is softening, that should reassure the

646
00:36:21,920 --> 00:36:24,800
Speaker 1: FED that again they're moving in the right direction. Probably

647
00:36:24,800 --> 00:36:27,160
Speaker 1: gives them a little bit more wiggle room in the

648
00:36:27,280 --> 00:36:30,319
Speaker 1: main meeting. You know, I think we are you know,

649
00:36:30,520 --> 00:36:32,480
Speaker 1: of our view is that they're close to the terminal

650
00:36:32,560 --> 00:36:35,719
Speaker 1: rate here, regardless whether they hike one more time or

651
00:36:35,760 --> 00:36:39,439
Speaker 1: whether they pause. But certainly, you know, peak inflation now

652
00:36:39,560 --> 00:36:41,640
Speaker 1: is in the rear view mirror, and I think today's

653
00:36:41,719 --> 00:36:45,399
Speaker 1: print sort of reassures them of that. So Lebby, you say,

654
00:36:45,440 --> 00:36:48,960
Speaker 1: things are heading in the right direction, but direction is

655
00:36:49,000 --> 00:36:51,839
Speaker 1: different from ultimate destination. We're still trying to get down

656
00:36:52,200 --> 00:36:54,680
Speaker 1: to two percent inflation, so it raises a question of

657
00:36:54,680 --> 00:36:57,720
Speaker 1: how much more pain the FED would be willing to

658
00:36:57,719 --> 00:37:00,719
Speaker 1: tolerate to get there. Also the question of how much

659
00:37:00,920 --> 00:37:04,120
Speaker 1: pain the Biden administration would be willing to tolerate, because

660
00:37:04,120 --> 00:37:07,080
Speaker 1: we know they have been wanting to get inflation down

661
00:37:07,120 --> 00:37:10,040
Speaker 1: because it has plagued them politically. But if we're talking

662
00:37:10,040 --> 00:37:13,439
Speaker 1: now about a mild recession more economic damage happening as

663
00:37:13,480 --> 00:37:17,919
Speaker 1: a result, that's tough too. Yeah, I think that's exactly right.

664
00:37:18,000 --> 00:37:20,000
Speaker 1: I mean, you know, our view here of him Go

665
00:37:20,440 --> 00:37:23,560
Speaker 1: is that the FED will likely see inflation get down

666
00:37:23,600 --> 00:37:26,239
Speaker 1: to around three percent by the end of the year.

667
00:37:26,280 --> 00:37:30,120
Speaker 1: But of course that is not the two percent inflation

668
00:37:30,239 --> 00:37:32,960
Speaker 1: target are. You know, we have the benefit of now

669
00:37:33,000 --> 00:37:36,600
Speaker 1: having former FED Vice chair Rich Clarida rejoined him Go,

670
00:37:36,800 --> 00:37:38,880
Speaker 1: and he says that the said probably would feel, you know,

671
00:37:38,920 --> 00:37:42,279
Speaker 1: more comfortable a sort of two plus something, not three.

672
00:37:42,480 --> 00:37:46,000
Speaker 1: So to your point, if you inflation still running around

673
00:37:46,040 --> 00:37:49,400
Speaker 1: three percent, that you still indicates that the FED probably

674
00:37:49,440 --> 00:37:52,440
Speaker 1: has some more to do, and that will likely mean

675
00:37:52,520 --> 00:37:55,080
Speaker 1: more pain in the labor market, and our view, honestly,

676
00:37:55,080 --> 00:37:57,440
Speaker 1: it's pretty consistent with what the Fed staff view is

677
00:37:57,480 --> 00:38:01,360
Speaker 1: that we will likely see chances are higher than not

678
00:38:01,560 --> 00:38:05,800
Speaker 1: of a mild recession later this year. Again, mild, not

679
00:38:06,000 --> 00:38:08,520
Speaker 1: deep recession. We're not talking about the financial crisis of

680
00:38:08,520 --> 00:38:11,000
Speaker 1: two thousand and eight or anything like it. But there

681
00:38:11,040 --> 00:38:13,719
Speaker 1: will be some discomfort in order to get that inflation

682
00:38:13,760 --> 00:38:15,960
Speaker 1: target come in line with where the Fed wants it

683
00:38:16,000 --> 00:38:17,960
Speaker 1: to be. One of the great wild cards here is

684
00:38:17,960 --> 00:38:20,799
Speaker 1: the debt ceiling issue, of course, living and you're talking

685
00:38:20,800 --> 00:38:23,760
Speaker 1: about that in the Pimco Washington Watch. I was compelled

686
00:38:23,840 --> 00:38:27,040
Speaker 1: by the way you tackled this because Congress is of

687
00:38:27,040 --> 00:38:29,279
Speaker 1: course out of town, so no progress this week, and

688
00:38:29,320 --> 00:38:31,839
Speaker 1: god knows, we'll probably have none next week. But when

689
00:38:31,880 --> 00:38:33,640
Speaker 1: you look ahead to the X date, we're waiting for

690
00:38:33,680 --> 00:38:35,719
Speaker 1: that tax days almost here, so we'll have a real

691
00:38:36,440 --> 00:38:38,279
Speaker 1: day at some point soon here. But you're pointing to

692
00:38:38,320 --> 00:38:41,359
Speaker 1: the Treasury's monthly debt report suggesting the X date would

693
00:38:41,360 --> 00:38:46,000
Speaker 1: occur not until late July or August, which, as you

694
00:38:46,080 --> 00:38:49,800
Speaker 1: point out, may well correspond with Congress's annual August recess.

695
00:38:49,840 --> 00:38:52,120
Speaker 1: And we know there's going to be a lot of

696
00:38:52,120 --> 00:38:55,239
Speaker 1: headlines about jet fumes or something at that point in time. Here.

697
00:38:55,360 --> 00:38:59,200
Speaker 1: That is the compelling factor here, And I wonder if

698
00:38:59,239 --> 00:39:02,080
Speaker 1: you see a deal being struck mid to late summer

699
00:39:02,120 --> 00:39:04,560
Speaker 1: because of it. Yeah, you know, I think it's sort

700
00:39:04,560 --> 00:39:07,480
Speaker 1: of serendipitous in some ways that it looks like the

701
00:39:07,560 --> 00:39:10,840
Speaker 1: Treasury will probably be able to use these extraordinary measures

702
00:39:10,880 --> 00:39:14,760
Speaker 1: past the not only the April fifteenth tax filing deadline,

703
00:39:14,760 --> 00:39:17,200
Speaker 1: which is new note is important, but also June fifteenth,

704
00:39:17,200 --> 00:39:21,000
Speaker 1: another important tax filing sort of inflection point. If they

705
00:39:21,000 --> 00:39:23,480
Speaker 1: can get past those two dates, and they probably will

706
00:39:23,520 --> 00:39:26,160
Speaker 1: be able to get to end of July, if not

707
00:39:26,239 --> 00:39:28,920
Speaker 1: early August. And then that's exactly the kind of the

708
00:39:28,920 --> 00:39:30,799
Speaker 1: political point I was trying to make in my note

709
00:39:31,040 --> 00:39:34,960
Speaker 1: this week was that this neatly corresponds to the fact

710
00:39:35,000 --> 00:39:37,759
Speaker 1: that Congress does want to get out of town. They

711
00:39:37,800 --> 00:39:41,799
Speaker 1: of course have an annual six week recess where they

712
00:39:41,840 --> 00:39:43,759
Speaker 1: go back to their districts, they do some work, and

713
00:39:43,840 --> 00:39:46,000
Speaker 1: they usually go on vacation as well. They are human

714
00:39:46,040 --> 00:39:50,480
Speaker 1: beings after all, and that is oftentimes a real motivator

715
00:39:50,600 --> 00:39:52,560
Speaker 1: for them to get things done. A lot of times

716
00:39:52,600 --> 00:39:55,680
Speaker 1: we see some of the biggest pieces of legislation or

717
00:39:55,719 --> 00:39:58,840
Speaker 1: the biggest deals in sort of recent history, happen before

718
00:39:58,880 --> 00:40:02,239
Speaker 1: our congressional recess, whether it's August or Christmas break, which

719
00:40:02,280 --> 00:40:04,920
Speaker 1: is also another big inflection point. So my kind of

720
00:40:04,960 --> 00:40:06,960
Speaker 1: my point is my hope, I guess, is that this

721
00:40:07,000 --> 00:40:09,920
Speaker 1: will provide an incentive for folks to really try to

722
00:40:09,920 --> 00:40:13,120
Speaker 1: hammer something out before then. Your President Biden, as you know,

723
00:40:13,239 --> 00:40:16,399
Speaker 1: continues his stance he is not going to negotiate on this.

724
00:40:16,719 --> 00:40:21,160
Speaker 1: Speaker McCarthy says that is not a viable stance. So

725
00:40:21,520 --> 00:40:24,560
Speaker 1: this sort dance between the two will happen over the

726
00:40:24,600 --> 00:40:26,759
Speaker 1: next few weeks, if not months. But again I think

727
00:40:26,760 --> 00:40:29,920
Speaker 1: we are here at PIMCO. There might be some volatility,

728
00:40:30,000 --> 00:40:32,839
Speaker 1: some brinksmanship as we all have learned to expect, but

729
00:40:32,840 --> 00:40:35,320
Speaker 1: that there will likely be a deal. Again, the timing

730
00:40:35,400 --> 00:40:38,919
Speaker 1: of this that corresponds with the summer recess, I think

731
00:40:39,160 --> 00:40:41,799
Speaker 1: a sort of points to an increased chances of a

732
00:40:41,880 --> 00:40:46,239
Speaker 1: deal before that August recess. Okay, so that's before that

733
00:40:46,239 --> 00:40:48,640
Speaker 1: August recess. In the meantime, maybe it still is, as

734
00:40:48,640 --> 00:40:51,760
Speaker 1: you say, a dancer, maybe a stare down and someone

735
00:40:51,840 --> 00:40:54,759
Speaker 1: has to blink first. I just wonder Libby given the

736
00:40:54,800 --> 00:40:59,520
Speaker 1: events of recent weeks, questions swirling around the ethics of

737
00:40:59,560 --> 00:41:03,160
Speaker 1: Conserve of Supreme Court Justice Clarence Thomas, another mass shooting

738
00:41:03,280 --> 00:41:08,120
Speaker 1: in Louisville, Kentucky, competing rulings on abortion pills and access

739
00:41:08,160 --> 00:41:11,799
Speaker 1: to those, the indictment of President Trump. Are these all

740
00:41:11,920 --> 00:41:15,200
Speaker 1: just wins that are stacking up in the Democratic column,

741
00:41:15,320 --> 00:41:17,839
Speaker 1: making it less likely that Republicans are going to want

742
00:41:17,880 --> 00:41:20,520
Speaker 1: to push too hard on the debt stealing issue and

743
00:41:20,640 --> 00:41:25,080
Speaker 1: risk being blamed for something bad happening there too. I mean,

744
00:41:25,120 --> 00:41:27,799
Speaker 1: that's a that's a good point. I'm obviously sort of

745
00:41:27,840 --> 00:41:31,560
Speaker 1: the political climate here really does matter. I do think

746
00:41:31,600 --> 00:41:36,120
Speaker 1: that Republicans are going to want to have some sort

747
00:41:36,160 --> 00:41:39,920
Speaker 1: of you know, olive branch fig leaf, what have you,

748
00:41:40,520 --> 00:41:43,080
Speaker 1: something that they can declare as some sort of win.

749
00:41:43,120 --> 00:41:46,160
Speaker 1: And I think, you know, President Biden, you know, he's

750
00:41:46,320 --> 00:41:49,839
Speaker 1: very familiar with the incentives of members of Congress, of course,

751
00:41:49,880 --> 00:41:52,480
Speaker 1: having served in the Senate for for four decades, and

752
00:41:52,520 --> 00:41:54,719
Speaker 1: so he, you know, he, I think is probably going

753
00:41:54,760 --> 00:41:56,839
Speaker 1: to be inclined to try to provide something to those

754
00:41:56,880 --> 00:42:01,040
Speaker 1: Republicans as well, whether that is a future discussion over

755
00:42:01,160 --> 00:42:04,360
Speaker 1: spending as you as you both very well know, the

756
00:42:04,480 --> 00:42:08,319
Speaker 1: death feeling is actually not at all ironically related to

757
00:42:08,560 --> 00:42:11,920
Speaker 1: future spending. It just simply allows for us to honor

758
00:42:12,000 --> 00:42:14,360
Speaker 1: the spending that we've already agreed to in many cases

759
00:42:14,360 --> 00:42:18,239
Speaker 1: have already the funds that we've already spent. But so

760
00:42:18,360 --> 00:42:21,160
Speaker 1: I think President Biden is trying to find an off ramp,

761
00:42:21,360 --> 00:42:24,640
Speaker 1: some political cover to provide for Republicans and McGain. I

762
00:42:24,680 --> 00:42:28,160
Speaker 1: think he understands sort of the incentive system of McCarthy

763
00:42:28,200 --> 00:42:30,360
Speaker 1: and what have you. But I do think you're a

764
00:42:30,480 --> 00:42:33,680
Speaker 1: right that you know, Specer McCarthy has indicated and so

765
00:42:33,840 --> 00:42:37,319
Speaker 1: has Leader McConnell have indicated that they have no intention of,

766
00:42:37,520 --> 00:42:41,200
Speaker 1: you know, of defaulting on the US debt and that

767
00:42:41,280 --> 00:42:43,680
Speaker 1: they just want to simply have a discussion. So I

768
00:42:43,680 --> 00:42:45,319
Speaker 1: think we need to take them at their word. They

769
00:42:45,320 --> 00:42:48,279
Speaker 1: are not you know, there's no political upside at this

770
00:42:48,400 --> 00:42:52,200
Speaker 1: point for them to actually take us to the brink um.

771
00:42:52,360 --> 00:42:54,279
Speaker 1: And you know, again our expectation is that there's a

772
00:42:54,280 --> 00:42:57,680
Speaker 1: resolution before before that. Well, it brings us to the budget,

773
00:42:57,719 --> 00:43:00,600
Speaker 1: of course, budget negotiations that have not even started yet.

774
00:43:00,600 --> 00:43:04,240
Speaker 1: We were talking last hour with Rick Davis and Jeanie

775
00:43:04,280 --> 00:43:07,720
Speaker 1: Schanzano on our Political panel about this marking the first

776
00:43:07,840 --> 00:43:10,520
Speaker 1: hundred days. That was yesterday was day one hundred of

777
00:43:10,560 --> 00:43:14,400
Speaker 1: this Republican majority in the House. They promised regular order,

778
00:43:14,480 --> 00:43:16,040
Speaker 1: Libby and I know that that's kind of a joke

779
00:43:16,080 --> 00:43:17,960
Speaker 1: around here in Washington, but we were supposed to be

780
00:43:18,000 --> 00:43:20,800
Speaker 1: going through the process. We're talking about the debt ceiling

781
00:43:20,840 --> 00:43:23,239
Speaker 1: largely in a vacuum here. But of course Kevin McCarthy says,

782
00:43:23,280 --> 00:43:26,040
Speaker 1: they're not doing that a clean debt ceiling bill without

783
00:43:26,040 --> 00:43:29,720
Speaker 1: an agreement on spending cuts. And we're nowhere near that happening.

784
00:43:30,040 --> 00:43:32,520
Speaker 1: So how do we get one without the other? Yeah,

785
00:43:32,560 --> 00:43:34,960
Speaker 1: And of course, you know, Joe as you know that

786
00:43:35,160 --> 00:43:37,680
Speaker 1: Dieger McCarthy was making a big deal about passing a

787
00:43:37,719 --> 00:43:39,439
Speaker 1: budget that was going to be kind of a first

788
00:43:39,520 --> 00:43:42,080
Speaker 1: order of business for the Republican caucus in the House.

789
00:43:42,360 --> 00:43:45,040
Speaker 1: This was the January enough fastward April, and he's sort

790
00:43:45,080 --> 00:43:48,239
Speaker 1: of saying, oh, maybe the budget is not as important now.

791
00:43:48,280 --> 00:43:50,520
Speaker 1: The budget, as you know, folks may or may not know,

792
00:43:50,800 --> 00:43:55,760
Speaker 1: it's sort of a symbolic symbolic gesture, if you will.

793
00:43:56,239 --> 00:44:00,600
Speaker 1: It is non binding, and the president proposes his first

794
00:44:00,600 --> 00:44:03,719
Speaker 1: and then each chamber proposes their own budget, and then

795
00:44:03,760 --> 00:44:07,000
Speaker 1: that will lead to appropriations bills, which actually then lead

796
00:44:07,040 --> 00:44:09,960
Speaker 1: to to the actual funding of various programs and what

797
00:44:10,040 --> 00:44:13,359
Speaker 1: have you across the government. It's a very tedious, um,

798
00:44:13,760 --> 00:44:18,480
Speaker 1: you know, circuitous process, but it is important, and it

799
00:44:18,560 --> 00:44:22,120
Speaker 1: is important because for Republicans in the House, it actually

800
00:44:22,160 --> 00:44:25,680
Speaker 1: could you know, lay out some of their objectives and

801
00:44:25,760 --> 00:44:28,680
Speaker 1: could give the White House an indication of where, you know,

802
00:44:28,719 --> 00:44:32,320
Speaker 1: they may be able to negotiate on future spending bills.

803
00:44:32,320 --> 00:44:33,960
Speaker 1: Now again, Biden has made it clear he does not

804
00:44:34,040 --> 00:44:36,040
Speaker 1: want to negotiate over the death ceiling. And I can't

805
00:44:36,320 --> 00:44:40,759
Speaker 1: stress this enough. These are two separate processes that Republicans

806
00:44:40,840 --> 00:44:43,560
Speaker 1: want to link them, but they are actually inherently separate,

807
00:44:43,640 --> 00:44:48,000
Speaker 1: the death ceiling and over future spending. But the Republicans

808
00:44:48,000 --> 00:44:50,520
Speaker 1: at this point, and this is the most the bottom

809
00:44:50,520 --> 00:44:54,600
Speaker 1: line here is that they there isn't unanimity among Republicans

810
00:44:54,640 --> 00:44:58,160
Speaker 1: about spending cuts. And this is this is the tension.

811
00:44:58,200 --> 00:45:00,440
Speaker 1: There's only a sailing of a four seat Majorit already

812
00:45:00,760 --> 00:45:04,200
Speaker 1: really difficult to get a narrow majority in the House

813
00:45:04,239 --> 00:45:08,319
Speaker 1: Republican caucus onboard with spending cuts, especially when you're talking

814
00:45:08,320 --> 00:45:12,200
Speaker 1: about things like veterans benefits or healthcare benefits, really things

815
00:45:12,200 --> 00:45:15,680
Speaker 1: that actually affects their constituent. I have a popsicle headache.

816
00:45:16,360 --> 00:45:19,279
Speaker 1: Nothing we have. It's the same conversation for one hundred days,

817
00:45:19,320 --> 00:45:22,680
Speaker 1: probably one hundred more, right, Okayley, There's another date that

818
00:45:22,760 --> 00:45:26,960
Speaker 1: Libby has in this important note, and it's November of

819
00:45:27,080 --> 00:45:30,600
Speaker 1: twenty twenty three. Nobody's actually given me a real answer

820
00:45:30,640 --> 00:45:32,640
Speaker 1: on that. When is the last possible date from President

821
00:45:32,680 --> 00:45:36,080
Speaker 1: Biden to jump in the race? Yeah, so it is November,

822
00:45:36,120 --> 00:45:38,560
Speaker 1: and that that is only again as you just not

823
00:45:38,680 --> 00:45:40,239
Speaker 1: to get way two in the weeds here, but I

824
00:45:40,239 --> 00:45:43,600
Speaker 1: know you guys like weeds. We all live in the weeds.

825
00:45:43,960 --> 00:45:48,680
Speaker 1: That is the that's the the beginning of when the

826
00:45:48,880 --> 00:45:54,719
Speaker 1: states start requiring candidates to file for their their respective

827
00:45:54,719 --> 00:45:58,120
Speaker 1: parties primaries. That is the first set of dates. So,

828
00:45:58,280 --> 00:46:00,520
Speaker 1: presuming that you know President Biden wants to be on

829
00:46:00,680 --> 00:46:03,840
Speaker 1: every ballot in every state, in every primary, which I

830
00:46:03,880 --> 00:46:06,279
Speaker 1: think is a safe assumption, that November would be the

831
00:46:06,360 --> 00:46:09,520
Speaker 1: last possible time that he could declare. But of course

832
00:46:09,560 --> 00:46:12,560
Speaker 1: he's going, you know, our expectation is that he is

833
00:46:12,600 --> 00:46:15,640
Speaker 1: going to do so well in advance of that. I

834
00:46:15,680 --> 00:46:17,480
Speaker 1: think lots of folks thought it was going to be

835
00:46:17,520 --> 00:46:21,400
Speaker 1: the spring, looking maybe more like late spring or early summer.

836
00:46:21,760 --> 00:46:24,840
Speaker 1: I think to our previous discussion, in some ways it

837
00:46:24,920 --> 00:46:28,239
Speaker 1: behooves him to delay as much as possible. Not only

838
00:46:28,280 --> 00:46:30,960
Speaker 1: does he sort of clear the field, which is sort

839
00:46:30,960 --> 00:46:33,520
Speaker 1: of a given at this point that no other viable

840
00:46:33,560 --> 00:46:36,680
Speaker 1: Democrat will run against him, but he also destity president

841
00:46:36,719 --> 00:46:38,680
Speaker 1: for a little bit longer. It's not great to be

842
00:46:38,719 --> 00:46:41,320
Speaker 1: a candidate for president, as we all know, it's exhausting,

843
00:46:41,400 --> 00:46:44,839
Speaker 1: and you're also then viewed as inherently partisan. I think

844
00:46:44,840 --> 00:46:48,160
Speaker 1: he wants he's relishing that sort of that less partisan

845
00:46:48,239 --> 00:46:51,200
Speaker 1: role as being president, and he you know, again to

846
00:46:51,280 --> 00:46:54,239
Speaker 1: behooves him to not necessarily jump into their races as

847
00:46:54,280 --> 00:46:57,440
Speaker 1: quickly as I think a lot of folks expect it. Yeah,

848
00:46:57,520 --> 00:47:03,080
Speaker 1: Libby Cantrell Pinco, thank you so much. Thanks for listening

849
00:47:03,120 --> 00:47:05,440
Speaker 1: to the Sound On podcast. Make sure to subscribe if

850
00:47:05,480 --> 00:47:08,319
Speaker 1: you haven't already, at Apple, Spotify, and anywhere else you

851
00:47:08,320 --> 00:47:11,080
Speaker 1: get your podcasts. And you can find us live every

852
00:47:11,080 --> 00:47:14,440
Speaker 1: weekday from Washington, DC at one pm Eastern Time at

853
00:47:14,440 --> 00:47:17,080
Speaker 1: Bloomberg dot com.