Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and a Marie Hortern. Join us each
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Speaker 2: of Apollo joins us now for more Toss and good monit,
Speaker 2: sir Brnie. We've got a few minutes to go over
Speaker 2: this one. What's your first take?
Speaker 3: Well, very important backdrop for this is that the framework
Speaker 3: to fit users for evaluating whether they should be hiking
Speaker 3: ourcording is the tailor rule, and the tailor rule has
Speaker 3: on the right hand side two variables, name you, unemployment
Speaker 3: and inflation. And both these components name you wage, inflation
Speaker 3: and unemployment are actually pointing in a direction at least
Speaker 3: of the fifth thing on hold. Obviously, this is not
Speaker 3: enough for them to consider begin to hiking.
Speaker 4: But at the end of the day.
Speaker 3: The tailwinds to growth continues were very strong. We have
Speaker 3: an AI and data center boom, we have strong defense spending,
Speaker 3: we have strong tailwinds also from the chipsack the Inflation
Speaker 3: Production Act, and we also still have relatively itervated stark
Speaker 3: price on whole prizes, all things that are supporting the
Speaker 3: US consumer. And even before we then know what Trump
Speaker 3: will do and what he announced on the tax policy yesterday,
Speaker 3: if we do get lower taxes on Social Security, on
Speaker 3: over time, on tips, other things, this will also be
Speaker 3: a tailwind to the outlook. So it's not clear at
Speaker 3: all that the fit is done, and for now I
Speaker 3: think it will be that they will be keeping them
Speaker 3: on hold, but the door is still open to hikes.
Speaker 2: Coming to this recent communication certainly suggests they'll be on hold.
Speaker 2: Implied in their routlook still and their communication as well
Speaker 2: is ad bias to reduce interest rates. When you say
Speaker 2: there is a chance to hike, I understand from what
Speaker 2: we've heard from a lot of people on this program
Speaker 2: the bar to cut has got higher, but it's the
Speaker 2: bar to hike a whole lot higher. Just how low
Speaker 2: is that bar?
Speaker 3: But think about it. Since the election, we have certainly
Speaker 3: seen animal spirits increase quite significantly. If you look at
Speaker 3: kapex plans from the regional fits, they have all started
Speaker 3: to reaccelerate. In the last two months, we've seen very
Speaker 3: strong improvements in a number of sentiment indicators, all pointing
Speaker 3: towards that there is still a chance that now that
Speaker 3: may be in the business see time, particular the feeling
Speaker 3: that well, maybe we should begin to hire more, maybe
Speaker 3: we should begin to spend more in terms of capex.
Speaker 4: So it is still true where we sit today.
Speaker 3: The buyer is high because the expectation is that inflation
Speaker 3: will continue to come down. But inflation today is still
Speaker 3: roughly at around three percent, so we're not near the target.
Speaker 3: And the trend in the last few months on a
Speaker 3: year a year basis has been up.
Speaker 4: So if you take.
Speaker 3: Both inflation and the label market, and particularly on imployment
Speaker 3: rate falling and also wage growth as high as four
Speaker 3: point one on verhr eunings, those are very important indicators
Speaker 3: for the fit when they think about what they want
Speaker 3: to do.
Speaker 1: A lot of independent indicators for wage growth don't show
Speaker 1: that same kind of heat. And as we heard from
Speaker 1: my Collins. Some of this has to do with just
Speaker 1: the hours work coming down, and when you do the multiplication,
Speaker 1: that's what ends up happening, is that you see that
Speaker 1: kind of wage growth. I'm just wondering, are you seeing
Speaker 1: other signs of inflation pick back up other than eggs
Speaker 1: that really could be sustainable in an economy that otherwise
Speaker 1: seems increasingly concerned about disinflationary de growth impacts.
Speaker 3: So some of the indicators that have come in again
Speaker 3: since the election is M services prices paked have really
Speaker 3: jumped higher. They also see NFIB planning to raise average
Speaker 3: selling prices have also gone higher, and the home based data,
Speaker 3: which is much higher frequency for the label market, is
Speaker 3: also looking a lot harder. So there are various indicators
Speaker 3: that certainly suggest that it's not clear that this narrative
Speaker 3: is that we are in a territory where monetary.
Speaker 4: Policy is very restrictive.
Speaker 3: If monetary policy was so restrictive, why is there unplanner
Speaker 3: rate going down?
Speaker 4: The on planiner rate should be going up.
Speaker 3: So in that sense, there's a lot of conversations around still,
Speaker 3: is it really the case that we are in restrictive
Speaker 3: turrets or in particular again with policies potitionally coming not
Speaker 3: only on turiffs, but also position coming on restrictions of immigration,
Speaker 3: and also polices potentially coming in the last few days
Speaker 3: on tailwinds to fiscal policy.
Speaker 4: If this is.
Speaker 1: Actually true, that the Fed could hike rate and that
Speaker 1: policy is not restrictive in any way, does it make
Speaker 1: sense to you that stocks would fall if benchmark rates
Speaker 1: stay the same or the idea the prospect of FED
Speaker 1: rate cuts later this year is taken off the table.
Speaker 3: Well, the main reason why stocks are falling, in my
Speaker 3: view is that forty percent of the index is the
Speaker 3: top ten stocks that are really the Magnificent seven, and
Speaker 3: they have such a big weight, and they are so
Speaker 3: sensitive in the risk parity models to what interest rates do.
Speaker 3: So if rates on out a bit higher and higher
Speaker 3: for longer, then of course the Magnificent seven do tend
Speaker 3: to train lower. So I think a very important answer
Speaker 3: to your question is that the Magnificent seven and the
Speaker 3: tech companies make up such a big share of the index.
Speaker 3: So that's why we have seen some broadening out away
Speaker 3: from them. But the difference in performance between the tech
Speaker 3: stocks and the S and P four ninety three continues
Speaker 3: to be very important.
Speaker 5: Courson, you're talking about these tailwinds potentially from the policy
Speaker 5: in Washington, DC. But how much you think Trump is
Speaker 5: willing to expand the deficit.
Speaker 3: Well, the Committee for Responsible Federal Budget scored what came
Speaker 3: out yesterday and found that it would increase spending by
Speaker 3: five to eleven trillion early the next decade. So in
Speaker 3: some sense, it all depends on exactly what comes through,
Speaker 3: and we will all over the next six months have
Speaker 3: a lot of budget discussions, including culminating with the dead
Speaker 3: ceiling in June. So let's see where it all goes
Speaker 3: in terms of what the ultimate fiscal impulse will be.
Speaker 3: But it's clear that at least what came out yesterday
Speaker 3: did not point in the direction of physical console edition,
Speaker 3: but pointed in aggregate in the direction of tilwinst grows.
Speaker 2: Let's talk about where we are right now if you
Speaker 2: are just joining us. Twelve minutes ago, the jobs report
Speaker 2: came in with a downside surprise on the headline number
Speaker 2: one forty three against an estimate of one to seventy
Speaker 2: five on non farm pay rolls, but an upside surprise
Speaker 2: on average ALI earnings month over month, coming in at
Speaker 2: zero point five percent. The estimate zero point three, unemployment
Speaker 2: dropping back to four percent from four point one. The
Speaker 2: estimate was also four point one percent, so that unemployment
Speaker 2: scare of the summer is over, dead and buried. The
Speaker 2: Federal Reserve, of course, was a little bit nervous about that,
Speaker 2: and delivered one hundred basis points of rate cuts across
Speaker 2: a number of meetings to close out last year. Now
Speaker 2: we're firmly on pause. We'll were talking a lot about
Speaker 2: the revisions for twenty twenty four. The average month gain
Speaker 2: has been revised to one sixty six from one eighty six,
Speaker 2: and I think there were some economists that we're looking
Speaker 2: for something a lot weaker than that, which.
Speaker 1: Is the reason why people are looking at this and saying,
Speaker 1: wait a second, we were expecting last year to have
Speaker 1: even less strength, and actually.
Speaker 4: It was pretty strong.
Speaker 1: It just goes to undermine the fear that we had
Speaker 1: at the end of last year that caused those rate
Speaker 1: cuts by the Federal Reserve and raises questions, is this
Speaker 1: really a market that's so susceptible to cracks forming if
Speaker 1: there is a policy that hangs out there that creates
Speaker 1: a good deal of uncertainty.
Speaker 2: Jeff Rosenberger Blank roc joins US Now for more, Jeff,
Speaker 2: you've had about thirteen minutes to poll river these numbers.
Speaker 2: What's your big tank, Sir.
Speaker 4: Jonathan.
Speaker 6: I think the big take here is January is a
Speaker 6: difficult month. There's a lot of moving parts. This is
Speaker 6: a mixed report. I think the conclusion remains the same.
Speaker 6: There's a very strong labor market. It's not going to
Speaker 6: change the FED outlook. But probably the most interesting thing
Speaker 6: is the last thing that you said that maybe what
Speaker 6: the market is keyed on, which is then will benchmark
Speaker 6: revisions the market having expected a lot bigger validation of
Speaker 6: the story that the labor market is overstated in terms
Speaker 6: of payrolls, and the overstatement was not as overstated as
Speaker 6: people thought, and so maybe that's pushing up a little
Speaker 6: bit on the rate reaction.
Speaker 4: But overall it's a mixed report.
Speaker 6: H is Mike Collins and you guys highlighted you know
Speaker 6: that's probably flattered by the reduction in the work week,
Speaker 6: the unemployment rate tacking down. That's on the strong side,
Speaker 6: and the payroll headline is a little bit disappointing, especially
Speaker 6: given the seasonal expectation that that would give it a
Speaker 6: seasonal boost. Overall, you know, I think you talked about
Speaker 6: in the earlier session about the asymmetry to the FED.
Speaker 6: It's going to take a very very strong report and
Speaker 6: unlikely to come out of the labor report, but really
Speaker 6: an inflation report to push the FED off of the
Speaker 6: cutting expectations, whereas a weakening side, the FED is going
Speaker 6: to be very quick to cut. I don't think this
Speaker 6: changes the out look. We're still on pause here well
Speaker 6: through the first half of the year, and a lot
Speaker 6: more data is going to be necessary for the FED
Speaker 6: to accelerate their pace of cutting. Is they were very
Speaker 6: clear in highlighting in the FMC they're in no hurry
Speaker 6: to cut.
Speaker 1: Jeff, you talk about the asymmetry and the fedce reaction
Speaker 1: function and their propensity to cut rather than hike if
Speaker 1: there is a weakening rather than some sort of boon.
Speaker 1: Is there an asymmetry and investors that needs to be
Speaker 1: rethought that people really believed that this was an economy
Speaker 1: that was starting to show weakness, which justified some of
Speaker 1: the rate cuts that we saw at the end of
Speaker 1: last year, that maybe that didn't really exist, maybe that
Speaker 1: we actually had a much stronger labor market than people
Speaker 1: had expected. And this is a market that is more
Speaker 1: susceptible to overheating than some people gave it credence over
Speaker 1: the past few weeks.
Speaker 4: Yeah, that's the change.
Speaker 6: You know, we had the fear on the labor market
Speaker 6: late summerfall last year. That's been replaced by a debate
Speaker 6: you started to get into it earlier around Really are
Speaker 6: we that type given how strong these labor markets are,
Speaker 6: and maybe the FED doesn't have to move.
Speaker 4: As far and maybe neutrals a lot.
Speaker 6: Higher than we thought it was because of the performance,
Speaker 6: the strength of the labor markets, the strength in the economy,
Speaker 6: and the halting progress that we're making on disinflation. That's
Speaker 6: kind of the summation of the change that has really
Speaker 6: pushed us away from the FED is going to push
Speaker 6: us into recession. The big increases in interest rates much
Speaker 6: more towards what I keep saying on this program. You know,
Speaker 6: the Fed's ignoring the role of financial conditions.
Speaker 4: An incredible wealth.
Speaker 6: Creation coming out of that mag seven AI wealth creation,
Speaker 6: wealth effect that is leading to much looser financial conditions
Speaker 6: than you would expect given the interest rates structure. And
Speaker 6: that's really I think the issue here is that financial
Speaker 6: conditions haven't been transmitting into the real li economy as
Speaker 6: tight of policy as the rate piece and the FED
Speaker 6: and comparisons to the tailor rule and interest rates are
Speaker 6: just missing the boat here that in a modern economy,
Speaker 6: really the post GFC economy, it's financial conditions through which
Speaker 6: monetary policy transmits, not so much the interest rate.
Speaker 4: We're much less interest rates sensitive.
Speaker 6: We're much more confidence in spending sensitive, and that's driven
Speaker 6: by financial conditions.
Speaker 1: So, Jeff, all of that said, when you put it together,
Speaker 1: would you fade the rally that we've seen over the
Speaker 1: past four weeks and the ten year treasure yield?
Speaker 6: Well, you know, it's interesting you talk about the ten
Speaker 6: year treasury yield rally and here we're talking about kind
Speaker 6: of before FED and FED policy. And obviously there's a
Speaker 6: disconnect here between talking about the rates on the short end,
Speaker 6: what the FED is going to control, what the markets
Speaker 6: are going to react to with respect to the FED,
Speaker 6: and what's going on on the long end, and what's
Speaker 6: going on on the long end is going to be
Speaker 6: much more affected by things like term premium, inflation uncertainty
Speaker 6: and inflation risk premium and.
Speaker 4: The fiscal policy outlook.
Speaker 6: So I think that we've gotten to a level of
Speaker 6: term premium that is normalized part way. You've gotten a
Speaker 6: lot better in terms of the term premium, and that's
Speaker 6: raised the attractiveness in terms of the ten year relative
Speaker 6: to the two year. I think that fading it is
Speaker 6: not really the outlook right here. I think what you're
Speaker 6: going to be looking for is the debate around the
Speaker 6: next policy. You know a lot of focus on trade
Speaker 6: and tariffs. We're going to turn that focus into taxes
Speaker 6: and fiscal and that's going to weigh a lot on
Speaker 6: where that ten year and that term premium settles.
Speaker 2: And that's how you down around a points at question.
Speaker 2: Jeff Rosenbo Flank CROWK, Jeffer Frecid. It's a thank you
Speaker 2: very much. Following the Pairoster port about twenty minutes ago,
Speaker 2: down Sun surprise on the headline's number, but a much
Speaker 2: helter that expected white Print to tack the latest standings
Speaker 2: from Amazon, delivering bets unexpected earnings but giving disappointed guidance
Speaker 2: for the current quarter. The CEO Anti Jasse warning growth
Speaker 2: will be lumpy due to hardware delays and power constraints. Schwetzer,
Speaker 2: Cjuria of Wolf Research right in the stock and perform
Speaker 2: with the two seventy price target Swetzer Joints. Now for more,
Speaker 2: Welcome to the program. First question, what we just heard
Speaker 2: from Amazon. How much of that was in line with
Speaker 2: what we'd heard from other players, the likes of Microsoft,
Speaker 2: for instance.
Speaker 7: Well, thanks for having me.
Speaker 8: I would say the parts that were similar from at Amazon,
Speaker 8: from Andy Jase to Microsoft and Google and Meta was
Speaker 8: around Gapex and Cloud.
Speaker 7: So what we heard from Andy Jasse were two things.
Speaker 7: One is that these Gapex investments where they guided to
Speaker 7: over one hundred billion dollars in Gapex for twenty twenty five,
Speaker 7: they're leaning into what they believe there is demand for
Speaker 7: and they would not be spending this money if they
Speaker 7: did not know that there was demand coming, because you
Speaker 7: procure all these infrastructure and data centers only if there
Speaker 7: is demand, and we have heard that time and time
Speaker 7: again from Google Cloud, from Sundar as well as at Microsoft.
Speaker 7: That was part one.
Speaker 8: Two was his.
Speaker 7: Comment around and his reaction to what happened with deep
Speaker 7: Seek and there are one model and the commonality here
Speaker 7: is basically the same thing that we heard from Zuckerberg
Speaker 7: at Meta as well as Sundar at Google around if
Speaker 7: costs of training and inference go down. The intuition is
Speaker 7: that the demand for AI will likely expand. It will
Speaker 7: expand the TAM because there will be so many more
Speaker 7: uses that will be attractive around applications to drive AAI compute,
Speaker 7: and against that, all these companies are leaning into gap
Speaker 7: expend TATA.
Speaker 1: So many analysts after these earnings came out pointed out
Speaker 1: time and again, this is still a bihemoth.
Speaker 4: They're going to do very well.
Speaker 1: We don't understand why people are punishing them. And yet
Speaker 1: four out of six of the magnificent seven that have
Speaker 1: reported so far have been meeted with a really disappointing
Speaker 1: response in markets. How much do you think that ultimately
Speaker 1: this is investors saying we are worried about valuations and
Speaker 1: we're not going to extend things further period, even though
Speaker 1: there is still that same promise of cloud computing.
Speaker 7: I think it is more of that. I mean, if
Speaker 7: we look at valuations now, all the AI levered names
Speaker 7: have done so well over the past two years, we're
Speaker 7: very limited upside for multiples in Meta or in Google
Speaker 7: given that they also have the search overhang, or even Amazon,
Speaker 7: of the megacap names that we cover. I think that
Speaker 7: Amazon has the best valuation on a growth adjusted basis,
Speaker 7: but it is more of that against the fundamentals. I
Speaker 7: think that there's a common belief that AI demand and
Speaker 7: AI is going nowhere, but given where the multiples are,
Speaker 7: perhaps you would have to see greater upward revisions on
Speaker 7: earnings before they get more credit on the share price.
Speaker 1: Just to sort of underscore this point, Schwudda, do you
Speaker 1: think that this is more an issue of just simply
Speaker 1: people generate about valuations and maybe even the flow of
Speaker 1: money due to other considerations, and less about deep seek
Speaker 1: and a feeling that you really can do it with less.
Speaker 2: I think so.
Speaker 7: I think that the knee jerk reaction with deep Seek
Speaker 7: and our one model was that this is negative for
Speaker 7: the megagap names, at least with an Internet. I'm going
Speaker 7: to refrain myself from talking about the impact on Nvidio,
Speaker 7: but for the megacaps within our coverage. But as more
Speaker 7: commentary came out from all the CEOs, it is becoming
Speaker 7: increasingly clear that perhaps there is demand that is more
Speaker 7: to come, and all these companies are looking at our
Speaker 7: one model under a microscope and will figure out a
Speaker 7: way to lower costs. So I think that is established
Speaker 7: that costs will likely come down for training and for inference,
Speaker 7: and against that there will be demand. I guess the
Speaker 7: question is we now need to seek accelerated back to
Speaker 7: returns on these investments. And until we see that, estimates
Speaker 7: like you won't go up, and until then he may
Speaker 7: not get full credit swet.
Speaker 2: To appreciate it. It's going to catch up with you,
Speaker 2: Schwerder Cojuri there will for research.
Speaker 4: Thank you.
Speaker 2: The Treasury Secretary skill best and making the case for
Speaker 2: passing President Trump's tax bill and making the twenty seventeen
Speaker 2: tax counts permanent. Terry Haynes of Pangaea writing, should the
Speaker 2: tax bill go to plan, it lightly convinces markets to
Speaker 2: fuel US economic exceptionalism for longer and with more fervor. Terry, John,
Speaker 2: just now for more Terry, Welcome to the program, buddy.
Speaker 2: It's going to see you as always. We caught up
Speaker 2: with Kim Wallace a twenty two V research about an
Speaker 2: hour ago actually, who made the case that he'd be
Speaker 2: surprised to see a tax bill pass before December and
Speaker 2: this might become a twenty twenty sixth story. Are you
Speaker 2: on the same timeline.
Speaker 9: No, not at all, John, and Good morning to everybody,
Speaker 9: not at all, because what they've got to do is
Speaker 9: they've got to pass this thing in the first calendar year.
Speaker 9: They know that I've got the tax bill at eighty
Speaker 9: percent likely to happen. The reason why is you've got
Speaker 9: Congress that knows it needs a signature accomplishment, and you've
Speaker 9: got a president that wants things. Look what you'll hear
Speaker 9: from Washington tax boffins now is all is all process
Speaker 9: related and kind of third level stuff. But best will
Speaker 9: give you the clue here. What they want to do
Speaker 9: is preserve the United States economic exceptionalism in the markets
Speaker 9: absolutely for as long as possible. They need a tax
Speaker 9: built for geopolitics, to keep America strong. They need a
Speaker 9: strong economic policy to buoy the domestic economy and to
Speaker 9: make America strong abroad. All that stuff. And by the way,
Speaker 9: they've got to get rid of a world where debt
Speaker 9: service is the biggest expenditure, so because that imperils all
Speaker 9: of the stuff that I just mentioned. Yeah, and you've
Speaker 9: got a president that's interested in doing big things. This
Speaker 9: is a time for big things. This isn't a time
Speaker 9: for small ball.
Speaker 5: So is this a time for one big bill or two.
Speaker 5: Sorry it is in my newshe of Washington. But I
Speaker 5: think it does matter because this is going to be
Speaker 5: incredibly hard one or two bills to make sure that
Speaker 5: this Republican Congress signs off on it, given terry how
Speaker 5: slim their majority is.
Speaker 9: Well, it matters some memory. Sure, I'm not going to
Speaker 9: say to the process doesn't matter at all. Of course
Speaker 9: it matters some. What I am suggesting, though, is that
Speaker 9: you shouldn't be diverted. No one should be diverted by
Speaker 9: process as if it's the main thing, and one bill
Speaker 9: to bill they get this thing done. You might recall
Speaker 9: back in twenty seventeen the Congress faft around with doing
Speaker 9: healthcare for the first four months of the year, and
Speaker 9: that only switched relatively late into the tax bill. That's
Speaker 9: not going to happen this year. They're all about economy, economy, economy.
Speaker 9: But what I would suggest is that anything the answer
Speaker 9: to the process question is, anything that helps achieve those
Speaker 9: big goals that I just mentioned, is what the process
Speaker 9: is going to end up being. Beyond that, though it's minimal.
Speaker 9: You know, the people that are in favor of one
Speaker 9: big bill, by and large are people who are afraid
Speaker 9: to cross Trump. But if what ends up happening is
Speaker 9: that two bills provide a quicker start to all this,
Speaker 9: then he's going to be for that too.
Speaker 5: And he said, so, Terry, the President has talked about
Speaker 5: a lot of policies, tax policies he would like to see.
Speaker 5: Yesterday we got carrot interest loophole added to the list,
Speaker 5: which took everyone by surprise. You and I both know
Speaker 5: that for decades Washington has been trying to close this
Speaker 5: loophole and they failed. Why is all of a sudden
Speaker 5: it's a Trump policy.
Speaker 9: Well, you know, I thought you, I thought you all
Speaker 9: summarized this very well the other in the last hour.
Speaker 9: It's by and large political. It's certainly not a revenue raiser.
Speaker 9: I mean, there's one source that I've seen recently that
Speaker 9: estimated it raising something like twelve billion over ten years.
Speaker 9: So you know, it's a rounding error in the bigger picture.
Speaker 9: But you're absolutely that it puts him on a kind
Speaker 9: of a populist political path. And if it doesn't happen
Speaker 9: in the end, well it doesn't happen in the end,
Speaker 9: but that's not a frontline issue here.
Speaker 1: In the meantime, we got the review from the Committee
Speaker 1: for a Responsible Federal Budget. For the potential bill, it
Speaker 1: isn't great. It isn't great for that wonderful ten year
Speaker 1: yield that Scott Bessant looks at. They said that it
Speaker 1: would boost interest costs by about one point three trillion
Speaker 1: dollars over the next decade, exceeding two hundred and fifty
Speaker 1: billion dollars per year by twenty thirty five. Terry, how
Speaker 1: feasible is it that this Congress has the capacity to
Speaker 1: pass this bill and not just totally upend the bond market.
Speaker 9: Well, here's here's a perfect example of what I mean
Speaker 9: by process, Lisa. Everybody's kind of focusing on the existing rules.
Speaker 9: Assuming this is exactly like twenty seventeen. It's not at
Speaker 9: all like twenty seventeen, in part for the reason you mentioned.
Speaker 9: You know, there's a much less tolerance for extending debt
Speaker 9: and deficit than there was in twenty seventeen. Had a
Speaker 9: relatively weak president and a relatively strong institutionalized Senate back
Speaker 9: in twenty seventeen. You know, the biggest debate that's happening
Speaker 9: right now isn't popping up in Washington conversations to markets
Speaker 9: very much at all, which is whether you'll use current
Speaker 9: policy as the baseline or current law is the baseline.
Speaker 9: Use current law as the baseline, then you're into what
Speaker 9: my Beginning's group talks about there. But if you change
Speaker 9: into current policy, then you become then you were. Then
Speaker 9: you become much freer to actually make the tax cuts
Speaker 9: a whole lot bigger and actually free up a lot
Speaker 9: more on what your pay fors are and your spending are.
Speaker 9: I think I know which way this is going, and
Speaker 9: it's not going It's not going back with the small
Speaker 9: ball the way it used to be.
Speaker 4: It's going to.
Speaker 9: Going to the new baseline, which Terry.
Speaker 1: Raises a question of whether it will it be allowed
Speaker 1: by this Congress. And some people point to the fact
Speaker 1: that you've actually seen quite a bit of unity when
Speaker 1: it comes to confirming some of the nominees, a surprising
Speaker 1: degree to some people. Do you think that that is
Speaker 1: just playing nice ahead of the hardball that's expected around
Speaker 1: the budget, or do you think this is setting a
Speaker 1: precedent for what's to come that there will be that unity.
Speaker 9: I think there's still there's still going to be a
Speaker 9: good deal of unity, and I think the Senate particularly
Speaker 9: has done a very good job of defending itself against
Speaker 9: Trump demands. You'll remember back in November, you know, Trump
Speaker 9: was blustering on about how he wanted his nominees confirmed immediately,
Speaker 9: and you know, well, guess what, We're still confirming nominees.
Speaker 9: You know that a lot of this stuff is being
Speaker 9: done fairly quietly, but you know, at root, people that
Speaker 9: are talking about maintaining the current institutional rules around around
Speaker 9: the tax bill in particular, are essentially saying that the
Speaker 9: Senate Parliamentarian is going to be more powerful than the
Speaker 9: President of the United States and a majority of senators
Speaker 9: and the will of loss and lots of the American
Speaker 9: people and probably markets. So I think I got unfortunately
Speaker 9: for the Senate Parliamentari, and I think I'm taking the
Speaker 9: other side.
Speaker 2: Terry, appreciate it well framed, Terry Haynes. There of Pangaeer policy.
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