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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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Speaker 2: with Lisa Bromwitz and a Marie Hortern. Join us each

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Speaker 2: day for insight from the best in markets, economics, and

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Speaker 2: geopolitics from our global headquarters in New York City. We

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Speaker 2: are live on Bloomberg Television weekday mornings from six to

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Speaker 2: or anywhere else you listen, and as always on the

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Speaker 2: Bloomberg Terminal and the Bloomberg Business app. Toss and Slock

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Speaker 2: of Apollo joins us now for more Toss and good monit,

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Speaker 2: sir Brnie. We've got a few minutes to go over

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Speaker 2: this one. What's your first take?

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Speaker 3: Well, very important backdrop for this is that the framework

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Speaker 3: to fit users for evaluating whether they should be hiking

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Speaker 3: ourcording is the tailor rule, and the tailor rule has

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Speaker 3: on the right hand side two variables, name you, unemployment

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Speaker 3: and inflation. And both these components name you wage, inflation

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Speaker 3: and unemployment are actually pointing in a direction at least

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Speaker 3: of the fifth thing on hold. Obviously, this is not

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Speaker 3: enough for them to consider begin to hiking.

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Speaker 4: But at the end of the day.

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Speaker 3: The tailwinds to growth continues were very strong. We have

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Speaker 3: an AI and data center boom, we have strong defense spending,

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Speaker 3: we have strong tailwinds also from the chipsack the Inflation

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Speaker 3: Production Act, and we also still have relatively itervated stark

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Speaker 3: price on whole prizes, all things that are supporting the

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Speaker 3: US consumer. And even before we then know what Trump

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Speaker 3: will do and what he announced on the tax policy yesterday,

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Speaker 3: if we do get lower taxes on Social Security, on

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Speaker 3: over time, on tips, other things, this will also be

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Speaker 3: a tailwind to the outlook. So it's not clear at

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Speaker 3: all that the fit is done, and for now I

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Speaker 3: think it will be that they will be keeping them

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Speaker 3: on hold, but the door is still open to hikes.

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Speaker 2: Coming to this recent communication certainly suggests they'll be on hold.

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Speaker 2: Implied in their routlook still and their communication as well

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Speaker 2: is ad bias to reduce interest rates. When you say

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Speaker 2: there is a chance to hike, I understand from what

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Speaker 2: we've heard from a lot of people on this program

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Speaker 2: the bar to cut has got higher, but it's the

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Speaker 2: bar to hike a whole lot higher. Just how low

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Speaker 2: is that bar?

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Speaker 3: But think about it. Since the election, we have certainly

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Speaker 3: seen animal spirits increase quite significantly. If you look at

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Speaker 3: kapex plans from the regional fits, they have all started

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Speaker 3: to reaccelerate. In the last two months, we've seen very

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Speaker 3: strong improvements in a number of sentiment indicators, all pointing

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Speaker 3: towards that there is still a chance that now that

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Speaker 3: may be in the business see time, particular the feeling

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Speaker 3: that well, maybe we should begin to hire more, maybe

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Speaker 3: we should begin to spend more in terms of capex.

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Speaker 4: So it is still true where we sit today.

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Speaker 3: The buyer is high because the expectation is that inflation

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Speaker 3: will continue to come down. But inflation today is still

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Speaker 3: roughly at around three percent, so we're not near the target.

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Speaker 3: And the trend in the last few months on a

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Speaker 3: year a year basis has been up.

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Speaker 4: So if you take.

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Speaker 3: Both inflation and the label market, and particularly on imployment

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Speaker 3: rate falling and also wage growth as high as four

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Speaker 3: point one on verhr eunings, those are very important indicators

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Speaker 3: for the fit when they think about what they want

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Speaker 3: to do.

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Speaker 1: A lot of independent indicators for wage growth don't show

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Speaker 1: that same kind of heat. And as we heard from

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Speaker 1: my Collins. Some of this has to do with just

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Speaker 1: the hours work coming down, and when you do the multiplication,

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Speaker 1: that's what ends up happening, is that you see that

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Speaker 1: kind of wage growth. I'm just wondering, are you seeing

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Speaker 1: other signs of inflation pick back up other than eggs

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Speaker 1: that really could be sustainable in an economy that otherwise

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Speaker 1: seems increasingly concerned about disinflationary de growth impacts.

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Speaker 3: So some of the indicators that have come in again

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Speaker 3: since the election is M services prices paked have really

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Speaker 3: jumped higher. They also see NFIB planning to raise average

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Speaker 3: selling prices have also gone higher, and the home based data,

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Speaker 3: which is much higher frequency for the label market, is

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Speaker 3: also looking a lot harder. So there are various indicators

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Speaker 3: that certainly suggest that it's not clear that this narrative

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Speaker 3: is that we are in a territory where monetary.

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Speaker 4: Policy is very restrictive.

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Speaker 3: If monetary policy was so restrictive, why is there unplanner

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Speaker 3: rate going down?

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Speaker 4: The on planiner rate should be going up.

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Speaker 3: So in that sense, there's a lot of conversations around still,

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Speaker 3: is it really the case that we are in restrictive

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Speaker 3: turrets or in particular again with policies potitionally coming not

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Speaker 3: only on turiffs, but also position coming on restrictions of immigration,

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Speaker 3: and also polices potentially coming in the last few days

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Speaker 3: on tailwinds to fiscal policy.

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Speaker 4: If this is.

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Speaker 1: Actually true, that the Fed could hike rate and that

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Speaker 1: policy is not restrictive in any way, does it make

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Speaker 1: sense to you that stocks would fall if benchmark rates

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Speaker 1: stay the same or the idea the prospect of FED

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Speaker 1: rate cuts later this year is taken off the table.

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Speaker 3: Well, the main reason why stocks are falling, in my

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Speaker 3: view is that forty percent of the index is the

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Speaker 3: top ten stocks that are really the Magnificent seven, and

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Speaker 3: they have such a big weight, and they are so

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Speaker 3: sensitive in the risk parity models to what interest rates do.

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Speaker 3: So if rates on out a bit higher and higher

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Speaker 3: for longer, then of course the Magnificent seven do tend

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Speaker 3: to train lower. So I think a very important answer

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Speaker 3: to your question is that the Magnificent seven and the

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Speaker 3: tech companies make up such a big share of the index.

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Speaker 3: So that's why we have seen some broadening out away

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Speaker 3: from them. But the difference in performance between the tech

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Speaker 3: stocks and the S and P four ninety three continues

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Speaker 3: to be very important.

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Speaker 5: Courson, you're talking about these tailwinds potentially from the policy

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Speaker 5: in Washington, DC. But how much you think Trump is

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Speaker 5: willing to expand the deficit.

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Speaker 3: Well, the Committee for Responsible Federal Budget scored what came

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Speaker 3: out yesterday and found that it would increase spending by

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Speaker 3: five to eleven trillion early the next decade. So in

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Speaker 3: some sense, it all depends on exactly what comes through,

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Speaker 3: and we will all over the next six months have

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Speaker 3: a lot of budget discussions, including culminating with the dead

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Speaker 3: ceiling in June. So let's see where it all goes

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Speaker 3: in terms of what the ultimate fiscal impulse will be.

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Speaker 3: But it's clear that at least what came out yesterday

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Speaker 3: did not point in the direction of physical console edition,

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Speaker 3: but pointed in aggregate in the direction of tilwinst grows.

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Speaker 2: Let's talk about where we are right now if you

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Speaker 2: are just joining us. Twelve minutes ago, the jobs report

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Speaker 2: came in with a downside surprise on the headline number

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Speaker 2: one forty three against an estimate of one to seventy

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Speaker 2: five on non farm pay rolls, but an upside surprise

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Speaker 2: on average ALI earnings month over month, coming in at

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Speaker 2: zero point five percent. The estimate zero point three, unemployment

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Speaker 2: dropping back to four percent from four point one. The

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Speaker 2: estimate was also four point one percent, so that unemployment

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Speaker 2: scare of the summer is over, dead and buried. The

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Speaker 2: Federal Reserve, of course, was a little bit nervous about that,

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Speaker 2: and delivered one hundred basis points of rate cuts across

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Speaker 2: a number of meetings to close out last year. Now

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Speaker 2: we're firmly on pause. We'll were talking a lot about

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Speaker 2: the revisions for twenty twenty four. The average month gain

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Speaker 2: has been revised to one sixty six from one eighty six,

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Speaker 2: and I think there were some economists that we're looking

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Speaker 2: for something a lot weaker than that, which.

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Speaker 1: Is the reason why people are looking at this and saying,

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Speaker 1: wait a second, we were expecting last year to have

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Speaker 1: even less strength, and actually.

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Speaker 4: It was pretty strong.

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Speaker 1: It just goes to undermine the fear that we had

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Speaker 1: at the end of last year that caused those rate

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Speaker 1: cuts by the Federal Reserve and raises questions, is this

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Speaker 1: really a market that's so susceptible to cracks forming if

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Speaker 1: there is a policy that hangs out there that creates

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Speaker 1: a good deal of uncertainty.

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Speaker 2: Jeff Rosenberger Blank roc joins US Now for more, Jeff,

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Speaker 2: you've had about thirteen minutes to poll river these numbers.

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Speaker 2: What's your big tank, Sir.

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Speaker 4: Jonathan.

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Speaker 6: I think the big take here is January is a

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Speaker 6: difficult month. There's a lot of moving parts. This is

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Speaker 6: a mixed report. I think the conclusion remains the same.

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Speaker 6: There's a very strong labor market. It's not going to

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Speaker 6: change the FED outlook. But probably the most interesting thing

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Speaker 6: is the last thing that you said that maybe what

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Speaker 6: the market is keyed on, which is then will benchmark

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Speaker 6: revisions the market having expected a lot bigger validation of

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Speaker 6: the story that the labor market is overstated in terms

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Speaker 6: of payrolls, and the overstatement was not as overstated as

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Speaker 6: people thought, and so maybe that's pushing up a little

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Speaker 6: bit on the rate reaction.

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Speaker 4: But overall it's a mixed report.

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Speaker 6: H is Mike Collins and you guys highlighted you know

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Speaker 6: that's probably flattered by the reduction in the work week,

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Speaker 6: the unemployment rate tacking down. That's on the strong side,

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Speaker 6: and the payroll headline is a little bit disappointing, especially

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Speaker 6: given the seasonal expectation that that would give it a

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Speaker 6: seasonal boost. Overall, you know, I think you talked about

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Speaker 6: in the earlier session about the asymmetry to the FED.

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Speaker 6: It's going to take a very very strong report and

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Speaker 6: unlikely to come out of the labor report, but really

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Speaker 6: an inflation report to push the FED off of the

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Speaker 6: cutting expectations, whereas a weakening side, the FED is going

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Speaker 6: to be very quick to cut. I don't think this

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Speaker 6: changes the out look. We're still on pause here well

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Speaker 6: through the first half of the year, and a lot

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Speaker 6: more data is going to be necessary for the FED

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Speaker 6: to accelerate their pace of cutting. Is they were very

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Speaker 6: clear in highlighting in the FMC they're in no hurry

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Speaker 6: to cut.

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Speaker 1: Jeff, you talk about the asymmetry and the fedce reaction

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Speaker 1: function and their propensity to cut rather than hike if

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Speaker 1: there is a weakening rather than some sort of boon.

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Speaker 1: Is there an asymmetry and investors that needs to be

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Speaker 1: rethought that people really believed that this was an economy

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Speaker 1: that was starting to show weakness, which justified some of

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Speaker 1: the rate cuts that we saw at the end of

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Speaker 1: last year, that maybe that didn't really exist, maybe that

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Speaker 1: we actually had a much stronger labor market than people

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Speaker 1: had expected. And this is a market that is more

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Speaker 1: susceptible to overheating than some people gave it credence over

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Speaker 1: the past few weeks.

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Speaker 4: Yeah, that's the change.

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Speaker 6: You know, we had the fear on the labor market

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Speaker 6: late summerfall last year. That's been replaced by a debate

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Speaker 6: you started to get into it earlier around Really are

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Speaker 6: we that type given how strong these labor markets are,

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Speaker 6: and maybe the FED doesn't have to move.

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Speaker 4: As far and maybe neutrals a lot.

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Speaker 6: Higher than we thought it was because of the performance,

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Speaker 6: the strength of the labor markets, the strength in the economy,

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Speaker 6: and the halting progress that we're making on disinflation. That's

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Speaker 6: kind of the summation of the change that has really

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Speaker 6: pushed us away from the FED is going to push

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Speaker 6: us into recession. The big increases in interest rates much

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Speaker 6: more towards what I keep saying on this program. You know,

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Speaker 6: the Fed's ignoring the role of financial conditions.

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Speaker 4: An incredible wealth.

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Speaker 6: Creation coming out of that mag seven AI wealth creation,

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Speaker 6: wealth effect that is leading to much looser financial conditions

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Speaker 6: than you would expect given the interest rates structure. And

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Speaker 6: that's really I think the issue here is that financial

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Speaker 6: conditions haven't been transmitting into the real li economy as

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Speaker 6: tight of policy as the rate piece and the FED

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Speaker 6: and comparisons to the tailor rule and interest rates are

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Speaker 6: just missing the boat here that in a modern economy,

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Speaker 6: really the post GFC economy, it's financial conditions through which

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Speaker 6: monetary policy transmits, not so much the interest rate.

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Speaker 4: We're much less interest rates sensitive.

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Speaker 6: We're much more confidence in spending sensitive, and that's driven

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Speaker 6: by financial conditions.

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Speaker 1: So, Jeff, all of that said, when you put it together,

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Speaker 1: would you fade the rally that we've seen over the

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Speaker 1: past four weeks and the ten year treasure yield?

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Speaker 6: Well, you know, it's interesting you talk about the ten

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Speaker 6: year treasury yield rally and here we're talking about kind

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Speaker 6: of before FED and FED policy. And obviously there's a

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Speaker 6: disconnect here between talking about the rates on the short end,

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Speaker 6: what the FED is going to control, what the markets

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Speaker 6: are going to react to with respect to the FED,

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Speaker 6: and what's going on on the long end, and what's

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Speaker 6: going on on the long end is going to be

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Speaker 6: much more affected by things like term premium, inflation uncertainty

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Speaker 6: and inflation risk premium and.

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Speaker 4: The fiscal policy outlook.

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Speaker 6: So I think that we've gotten to a level of

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Speaker 6: term premium that is normalized part way. You've gotten a

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Speaker 6: lot better in terms of the term premium, and that's

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Speaker 6: raised the attractiveness in terms of the ten year relative

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Speaker 6: to the two year. I think that fading it is

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Speaker 6: not really the outlook right here. I think what you're

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Speaker 6: going to be looking for is the debate around the

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Speaker 6: next policy. You know a lot of focus on trade

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Speaker 6: and tariffs. We're going to turn that focus into taxes

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Speaker 6: and fiscal and that's going to weigh a lot on

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Speaker 6: where that ten year and that term premium settles.

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Speaker 2: And that's how you down around a points at question.

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Speaker 2: Jeff Rosenbo Flank CROWK, Jeffer Frecid. It's a thank you

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Speaker 2: very much. Following the Pairoster port about twenty minutes ago,

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Speaker 2: down Sun surprise on the headline's number, but a much

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Speaker 2: helter that expected white Print to tack the latest standings

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Speaker 2: from Amazon, delivering bets unexpected earnings but giving disappointed guidance

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Speaker 2: for the current quarter. The CEO Anti Jasse warning growth

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Speaker 2: will be lumpy due to hardware delays and power constraints. Schwetzer,

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Speaker 2: Cjuria of Wolf Research right in the stock and perform

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Speaker 2: with the two seventy price target Swetzer Joints. Now for more,

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Speaker 2: Welcome to the program. First question, what we just heard

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Speaker 2: from Amazon. How much of that was in line with

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Speaker 2: what we'd heard from other players, the likes of Microsoft,

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Speaker 2: for instance.

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Speaker 7: Well, thanks for having me.

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Speaker 8: I would say the parts that were similar from at Amazon,

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Speaker 8: from Andy Jase to Microsoft and Google and Meta was

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Speaker 8: around Gapex and Cloud.

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Speaker 7: So what we heard from Andy Jasse were two things.

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Speaker 7: One is that these Gapex investments where they guided to

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Speaker 7: over one hundred billion dollars in Gapex for twenty twenty five,

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Speaker 7: they're leaning into what they believe there is demand for

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Speaker 7: and they would not be spending this money if they

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Speaker 7: did not know that there was demand coming, because you

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Speaker 7: procure all these infrastructure and data centers only if there

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Speaker 7: is demand, and we have heard that time and time

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Speaker 7: again from Google Cloud, from Sundar as well as at Microsoft.

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Speaker 7: That was part one.

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Speaker 8: Two was his.

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Speaker 7: Comment around and his reaction to what happened with deep

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Speaker 7: Seek and there are one model and the commonality here

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Speaker 7: is basically the same thing that we heard from Zuckerberg

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Speaker 7: at Meta as well as Sundar at Google around if

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Speaker 7: costs of training and inference go down. The intuition is

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Speaker 7: that the demand for AI will likely expand. It will

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Speaker 7: expand the TAM because there will be so many more

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Speaker 7: uses that will be attractive around applications to drive AAI compute,

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Speaker 7: and against that, all these companies are leaning into gap

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Speaker 7: expend TATA.

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Speaker 1: So many analysts after these earnings came out pointed out

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Speaker 1: time and again, this is still a bihemoth.

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Speaker 4: They're going to do very well.

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Speaker 1: We don't understand why people are punishing them. And yet

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Speaker 1: four out of six of the magnificent seven that have

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Speaker 1: reported so far have been meeted with a really disappointing

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Speaker 1: response in markets. How much do you think that ultimately

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Speaker 1: this is investors saying we are worried about valuations and

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Speaker 1: we're not going to extend things further period, even though

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Speaker 1: there is still that same promise of cloud computing.

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Speaker 7: I think it is more of that. I mean, if

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Speaker 7: we look at valuations now, all the AI levered names

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Speaker 7: have done so well over the past two years, we're

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Speaker 7: very limited upside for multiples in Meta or in Google

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Speaker 7: given that they also have the search overhang, or even Amazon,

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Speaker 7: of the megacap names that we cover. I think that

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Speaker 7: Amazon has the best valuation on a growth adjusted basis,

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Speaker 7: but it is more of that against the fundamentals. I

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Speaker 7: think that there's a common belief that AI demand and

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Speaker 7: AI is going nowhere, but given where the multiples are,

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Speaker 7: perhaps you would have to see greater upward revisions on

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Speaker 7: earnings before they get more credit on the share price.

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Speaker 1: Just to sort of underscore this point, Schwudda, do you

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Speaker 1: think that this is more an issue of just simply

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Speaker 1: people generate about valuations and maybe even the flow of

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Speaker 1: money due to other considerations, and less about deep seek

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Speaker 1: and a feeling that you really can do it with less.

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Speaker 2: I think so.

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Speaker 7: I think that the knee jerk reaction with deep Seek

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Speaker 7: and our one model was that this is negative for

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Speaker 7: the megagap names, at least with an Internet. I'm going

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Speaker 7: to refrain myself from talking about the impact on Nvidio,

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Speaker 7: but for the megacaps within our coverage. But as more

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Speaker 7: commentary came out from all the CEOs, it is becoming

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Speaker 7: increasingly clear that perhaps there is demand that is more

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Speaker 7: to come, and all these companies are looking at our

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Speaker 7: one model under a microscope and will figure out a

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Speaker 7: way to lower costs. So I think that is established

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Speaker 7: that costs will likely come down for training and for inference,

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Speaker 7: and against that there will be demand. I guess the

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Speaker 7: question is we now need to seek accelerated back to

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Speaker 7: returns on these investments. And until we see that, estimates

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Speaker 7: like you won't go up, and until then he may

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Speaker 7: not get full credit swet.

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Speaker 2: To appreciate it. It's going to catch up with you,

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Speaker 2: Schwerder Cojuri there will for research.

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Speaker 4: Thank you.

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Speaker 2: The Treasury Secretary skill best and making the case for

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Speaker 2: passing President Trump's tax bill and making the twenty seventeen

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Speaker 2: tax counts permanent. Terry Haynes of Pangaea writing, should the

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Speaker 2: tax bill go to plan, it lightly convinces markets to

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Speaker 2: fuel US economic exceptionalism for longer and with more fervor. Terry, John,

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Speaker 2: just now for more Terry, Welcome to the program, buddy.

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Speaker 2: It's going to see you as always. We caught up

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Speaker 2: with Kim Wallace a twenty two V research about an

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Speaker 2: hour ago actually, who made the case that he'd be

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Speaker 2: surprised to see a tax bill pass before December and

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Speaker 2: this might become a twenty twenty sixth story. Are you

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Speaker 2: on the same timeline.

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Speaker 9: No, not at all, John, and Good morning to everybody,

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Speaker 9: not at all, because what they've got to do is

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Speaker 9: they've got to pass this thing in the first calendar year.

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Speaker 9: They know that I've got the tax bill at eighty

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Speaker 9: percent likely to happen. The reason why is you've got

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Speaker 9: Congress that knows it needs a signature accomplishment, and you've

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Speaker 9: got a president that wants things. Look what you'll hear

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Speaker 9: from Washington tax boffins now is all is all process

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Speaker 9: related and kind of third level stuff. But best will

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Speaker 9: give you the clue here. What they want to do

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Speaker 9: is preserve the United States economic exceptionalism in the markets

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Speaker 9: absolutely for as long as possible. They need a tax

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Speaker 9: built for geopolitics, to keep America strong. They need a

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Speaker 9: strong economic policy to buoy the domestic economy and to

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Speaker 9: make America strong abroad. All that stuff. And by the way,

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Speaker 9: they've got to get rid of a world where debt

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Speaker 9: service is the biggest expenditure, so because that imperils all

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Speaker 9: of the stuff that I just mentioned. Yeah, and you've

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Speaker 9: got a president that's interested in doing big things. This

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Speaker 9: is a time for big things. This isn't a time

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Speaker 9: for small ball.

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Speaker 5: So is this a time for one big bill or two.

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Speaker 5: Sorry it is in my newshe of Washington. But I

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Speaker 5: think it does matter because this is going to be

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Speaker 5: incredibly hard one or two bills to make sure that

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Speaker 5: this Republican Congress signs off on it, given terry how

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Speaker 5: slim their majority is.

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Speaker 9: Well, it matters some memory. Sure, I'm not going to

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Speaker 9: say to the process doesn't matter at all. Of course

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Speaker 9: it matters some. What I am suggesting, though, is that

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Speaker 9: you shouldn't be diverted. No one should be diverted by

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Speaker 9: process as if it's the main thing, and one bill

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Speaker 9: to bill they get this thing done. You might recall

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Speaker 9: back in twenty seventeen the Congress faft around with doing

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Speaker 9: healthcare for the first four months of the year, and

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Speaker 9: that only switched relatively late into the tax bill. That's

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Speaker 9: not going to happen this year. They're all about economy, economy, economy.

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Speaker 9: But what I would suggest is that anything the answer

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Speaker 9: to the process question is, anything that helps achieve those

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Speaker 9: big goals that I just mentioned, is what the process

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Speaker 9: is going to end up being. Beyond that, though it's minimal.

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Speaker 9: You know, the people that are in favor of one

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Speaker 9: big bill, by and large are people who are afraid

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Speaker 9: to cross Trump. But if what ends up happening is

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Speaker 9: that two bills provide a quicker start to all this,

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Speaker 9: then he's going to be for that too.

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Speaker 5: And he said, so, Terry, the President has talked about

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Speaker 5: a lot of policies, tax policies he would like to see.

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Speaker 5: Yesterday we got carrot interest loophole added to the list,

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Speaker 5: which took everyone by surprise. You and I both know

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Speaker 5: that for decades Washington has been trying to close this

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Speaker 5: loophole and they failed. Why is all of a sudden

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Speaker 5: it's a Trump policy.

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Speaker 9: Well, you know, I thought you, I thought you all

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Speaker 9: summarized this very well the other in the last hour.

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Speaker 9: It's by and large political. It's certainly not a revenue raiser.

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Speaker 9: I mean, there's one source that I've seen recently that

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Speaker 9: estimated it raising something like twelve billion over ten years.

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Speaker 9: So you know, it's a rounding error in the bigger picture.

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Speaker 9: But you're absolutely that it puts him on a kind

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Speaker 9: of a populist political path. And if it doesn't happen

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Speaker 9: in the end, well it doesn't happen in the end,

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Speaker 9: but that's not a frontline issue here.

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Speaker 1: In the meantime, we got the review from the Committee

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Speaker 1: for a Responsible Federal Budget. For the potential bill, it

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Speaker 1: isn't great. It isn't great for that wonderful ten year

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Speaker 1: yield that Scott Bessant looks at. They said that it

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Speaker 1: would boost interest costs by about one point three trillion

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Speaker 1: dollars over the next decade, exceeding two hundred and fifty

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Speaker 1: billion dollars per year by twenty thirty five. Terry, how

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Speaker 1: feasible is it that this Congress has the capacity to

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Speaker 1: pass this bill and not just totally upend the bond market.

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Speaker 9: Well, here's here's a perfect example of what I mean

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Speaker 9: by process, Lisa. Everybody's kind of focusing on the existing rules.

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Speaker 9: Assuming this is exactly like twenty seventeen. It's not at

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Speaker 9: all like twenty seventeen, in part for the reason you mentioned.

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Speaker 9: You know, there's a much less tolerance for extending debt

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Speaker 9: and deficit than there was in twenty seventeen. Had a

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Speaker 9: relatively weak president and a relatively strong institutionalized Senate back

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Speaker 9: in twenty seventeen. You know, the biggest debate that's happening

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Speaker 9: right now isn't popping up in Washington conversations to markets

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Speaker 9: very much at all, which is whether you'll use current

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Speaker 9: policy as the baseline or current law is the baseline.

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Speaker 9: Use current law as the baseline, then you're into what

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Speaker 9: my Beginning's group talks about there. But if you change

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Speaker 9: into current policy, then you become then you were. Then

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Speaker 9: you become much freer to actually make the tax cuts

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Speaker 9: a whole lot bigger and actually free up a lot

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Speaker 9: more on what your pay fors are and your spending are.

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Speaker 9: I think I know which way this is going, and

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Speaker 9: it's not going It's not going back with the small

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Speaker 9: ball the way it used to be.

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Speaker 4: It's going to.

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Speaker 9: Going to the new baseline, which Terry.

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Speaker 1: Raises a question of whether it will it be allowed

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Speaker 1: by this Congress. And some people point to the fact

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00:22:00,440 --> 00:22:02,640
Speaker 1: that you've actually seen quite a bit of unity when

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Speaker 1: it comes to confirming some of the nominees, a surprising

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00:22:05,680 --> 00:22:08,560
Speaker 1: degree to some people. Do you think that that is

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00:22:08,680 --> 00:22:11,280
Speaker 1: just playing nice ahead of the hardball that's expected around

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00:22:11,320 --> 00:22:13,240
Speaker 1: the budget, or do you think this is setting a

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Speaker 1: precedent for what's to come that there will be that unity.

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Speaker 9: I think there's still there's still going to be a

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Speaker 9: good deal of unity, and I think the Senate particularly

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00:22:21,800 --> 00:22:25,159
Speaker 9: has done a very good job of defending itself against

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00:22:25,240 --> 00:22:30,160
Speaker 9: Trump demands. You'll remember back in November, you know, Trump

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00:22:30,240 --> 00:22:33,959
Speaker 9: was blustering on about how he wanted his nominees confirmed immediately,

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00:22:34,160 --> 00:22:37,040
Speaker 9: and you know, well, guess what, We're still confirming nominees.

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Speaker 9: You know that a lot of this stuff is being

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Speaker 9: done fairly quietly, but you know, at root, people that

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00:22:44,600 --> 00:22:50,199
Speaker 9: are talking about maintaining the current institutional rules around around

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00:22:50,200 --> 00:22:53,399
Speaker 9: the tax bill in particular, are essentially saying that the

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Speaker 9: Senate Parliamentarian is going to be more powerful than the

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Speaker 9: President of the United States and a majority of senators

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Speaker 9: and the will of loss and lots of the American

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Speaker 9: people and probably markets. So I think I got unfortunately

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00:23:07,640 --> 00:23:09,520
Speaker 9: for the Senate Parliamentari, and I think I'm taking the

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Speaker 9: other side.

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Speaker 2: Terry, appreciate it well framed, Terry Haynes. There of Pangaeer policy.

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00:23:18,040 --> 00:23:21,359
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