1 00:00:02,400 --> 00:00:07,880 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Glad to have Senator 2 00:00:07,960 --> 00:00:10,960 Speaker 1: Bill Haggerty with us right now. Senator, welcome back to 3 00:00:10,960 --> 00:00:14,760 Speaker 1: Bloomberg TV and Radio. You've been calling, I believe, for 4 00:00:14,920 --> 00:00:18,439 Speaker 1: rate cuts over the course of this regime. Are you 5 00:00:18,560 --> 00:00:22,880 Speaker 1: now saying that it's the right move higher for longer 6 00:00:22,920 --> 00:00:24,240 Speaker 1: when it comes to interest rates? 7 00:00:24,920 --> 00:00:27,240 Speaker 2: Joe, actually haven't been calling for rate cuts at all. 8 00:00:27,280 --> 00:00:29,040 Speaker 2: What I've been calling for is for the FED to 9 00:00:29,080 --> 00:00:32,080 Speaker 2: remain data driven. I know Chairman pala is under a 10 00:00:32,080 --> 00:00:35,320 Speaker 2: tremendous amount of political pressure to cut rates. My colleagues, Frankly, 11 00:00:35,400 --> 00:00:36,960 Speaker 2: my colleagues from the other side of the aisle on 12 00:00:37,000 --> 00:00:39,440 Speaker 2: the Democrat side, have put immense pressure on him to 13 00:00:39,479 --> 00:00:42,239 Speaker 2: cut rates ahead of the November election. What I've been 14 00:00:42,280 --> 00:00:44,920 Speaker 2: maintaining is that he needs to remain data driven because 15 00:00:44,960 --> 00:00:47,360 Speaker 2: to the extent the FED gets involved or even gives 16 00:00:47,400 --> 00:00:50,040 Speaker 2: the appearance of acting in a political fashion, it will 17 00:00:50,040 --> 00:00:52,960 Speaker 2: destroy its credibility. Chairman Powell made it clear in his 18 00:00:53,240 --> 00:00:55,960 Speaker 2: testimony with me that he understands that he's going to 19 00:00:56,000 --> 00:01:00,560 Speaker 2: remain data driven. We see inflation moving, you know, direction downward, 20 00:01:00,600 --> 00:01:02,280 Speaker 2: at least the rate of growth, but it's not where 21 00:01:02,280 --> 00:01:04,520 Speaker 2: it's supposed to be, and I think he's going to 22 00:01:04,520 --> 00:01:07,000 Speaker 2: make certain that this isn't a transitory bump before he 23 00:01:07,000 --> 00:01:08,759 Speaker 2: takes any sort of action. I think that's the right 24 00:01:08,800 --> 00:01:11,119 Speaker 2: thing for the FED to do. We need to make 25 00:01:11,120 --> 00:01:13,360 Speaker 2: certain that we get inflation under control, and the most 26 00:01:13,400 --> 00:01:16,200 Speaker 2: important thing right now is that they not allow themselves 27 00:01:16,200 --> 00:01:18,040 Speaker 2: to be perceived as political actors. 28 00:01:19,800 --> 00:01:22,360 Speaker 3: Well, Senator, if it really is about the data, and say, 29 00:01:22,360 --> 00:01:24,640 Speaker 3: the data tomorrow and the data that we get in 30 00:01:25,200 --> 00:01:28,840 Speaker 3: the intervening months do show that inflation is indeed cooling, 31 00:01:28,880 --> 00:01:31,080 Speaker 3: that data could support the idea that the FED would 32 00:01:31,120 --> 00:01:33,240 Speaker 3: cut rates. Are you essentially saying there is no way 33 00:01:33,240 --> 00:01:35,959 Speaker 3: that they can do that before the election without it 34 00:01:36,040 --> 00:01:39,319 Speaker 3: being seen as political, even if the indicators within the 35 00:01:39,360 --> 00:01:40,520 Speaker 3: economy would support it. 36 00:01:41,200 --> 00:01:44,600 Speaker 2: No, Kayley, I think you mentioned the indicators. They just 37 00:01:44,680 --> 00:01:46,959 Speaker 2: have to support it, and I don't care when it 38 00:01:47,000 --> 00:01:49,640 Speaker 2: happens as long as the data do support it. I'm 39 00:01:49,680 --> 00:01:52,040 Speaker 2: just concerned that he's getting a lot of pressure. The 40 00:01:52,080 --> 00:01:53,640 Speaker 2: FED chair is getting a lot of pressure right now 41 00:01:53,680 --> 00:01:56,080 Speaker 2: that is political in nature, and I think he's got 42 00:01:56,080 --> 00:01:58,200 Speaker 2: to stick to his guns. He gave you every indication 43 00:01:58,240 --> 00:02:00,440 Speaker 2: in his testimony that that is precisely what he's going 44 00:02:00,480 --> 00:02:00,720 Speaker 2: to do. 45 00:02:02,320 --> 00:02:04,720 Speaker 1: It brings us to the issue of FED independence, Centator, 46 00:02:04,840 --> 00:02:08,120 Speaker 1: something that you brought up in your remarks yesterday. Here's 47 00:02:08,160 --> 00:02:11,079 Speaker 1: what you had to say during yesterday's testimony, and we'll 48 00:02:11,120 --> 00:02:12,760 Speaker 1: follow up with a question now. 49 00:02:14,280 --> 00:02:16,480 Speaker 2: As you know, the Federal Reserve was structured to shield 50 00:02:16,520 --> 00:02:20,320 Speaker 2: monetary policy from political influence, and that independence has given 51 00:02:20,320 --> 00:02:23,360 Speaker 2: the FED unique credibility in executing its mission. If the 52 00:02:23,400 --> 00:02:26,280 Speaker 2: FOMC were influenced in any way by political calculation rather 53 00:02:26,280 --> 00:02:29,800 Speaker 2: than economic data, it would severely damage the Fed's credibility 54 00:02:29,800 --> 00:02:32,960 Speaker 2: as an independent institution. It would increase uncertainty in our markets, 55 00:02:33,320 --> 00:02:35,680 Speaker 2: and it would jeopardize the dollar status as a global 56 00:02:35,720 --> 00:02:36,520 Speaker 2: reserve currency. 57 00:02:38,440 --> 00:02:40,520 Speaker 1: So FED independence is something we hear about every time 58 00:02:40,560 --> 00:02:42,720 Speaker 1: we talked to White House official. Senator, and I'm glad 59 00:02:42,720 --> 00:02:44,800 Speaker 1: that you went there. You're talking about this through the 60 00:02:44,800 --> 00:02:48,680 Speaker 1: guise of Joe Biden's political interests here, but I wonder 61 00:02:49,160 --> 00:02:52,399 Speaker 1: where you are on FED independence if there's another Trump administration, 62 00:02:52,480 --> 00:02:55,320 Speaker 1: because we all remember the tweeting directly at the FED 63 00:02:55,440 --> 00:02:58,919 Speaker 1: chair and now reading reports that the former president wants 64 00:02:59,000 --> 00:03:01,280 Speaker 1: to be more directly in if he wins this election. 65 00:03:01,360 --> 00:03:05,239 Speaker 1: And actually have a hand in setting interest rates. Does 66 00:03:05,280 --> 00:03:08,040 Speaker 1: FED independence work for both sides of the. 67 00:03:08,000 --> 00:03:12,680 Speaker 2: Aisle, Well, it definitely should, and I think the case 68 00:03:12,720 --> 00:03:15,320 Speaker 2: is very clear that as long as the FED maintains 69 00:03:16,400 --> 00:03:19,960 Speaker 2: data driven approach, that we will see certainty in the marketplace. 70 00:03:20,040 --> 00:03:22,680 Speaker 2: The world looks to what the FED does and the 71 00:03:22,720 --> 00:03:24,760 Speaker 2: approach that Chairman pal has taken, and I think that 72 00:03:24,840 --> 00:03:29,120 Speaker 2: I'll maintain this over time. We need to make certain 73 00:03:29,160 --> 00:03:31,919 Speaker 2: that the FED is perceived not as a political actor, 74 00:03:32,120 --> 00:03:36,040 Speaker 2: but one that is driven by the data. 75 00:03:36,080 --> 00:03:37,920 Speaker 3: Of course, it's not just the Fed's job to set 76 00:03:38,000 --> 00:03:41,800 Speaker 3: monetary policy. They also act as a regulator of the 77 00:03:41,840 --> 00:03:44,320 Speaker 3: banking system. And Chairman Powell did make a little news 78 00:03:44,360 --> 00:03:47,520 Speaker 3: in your hearing yesterday in regard to Basel three and 79 00:03:47,520 --> 00:03:49,640 Speaker 3: what the game will be. He suggested they're going to 80 00:03:49,680 --> 00:03:51,920 Speaker 3: have to repropose it. What do you need to see 81 00:03:52,360 --> 00:03:53,480 Speaker 3: in that reproposal? 82 00:03:54,480 --> 00:03:56,840 Speaker 2: Well, frankly, I don't think we even require a submission. 83 00:03:56,840 --> 00:03:58,840 Speaker 2: We've been through a massive stress test if you think 84 00:03:58,840 --> 00:04:01,920 Speaker 2: about what happened through the pandemic, and for three consecutive 85 00:04:02,000 --> 00:04:04,640 Speaker 2: years we were told that the system was adequately capitalized. 86 00:04:04,840 --> 00:04:06,560 Speaker 2: We get a new Vice chair who comes in and 87 00:04:06,600 --> 00:04:09,400 Speaker 2: makes a dramatic proposal that everyone in the industry told 88 00:04:09,400 --> 00:04:12,200 Speaker 2: me would have been devastating in terms of our competitiveness 89 00:04:12,200 --> 00:04:14,080 Speaker 2: as a nation. Our banking system is one of our 90 00:04:14,320 --> 00:04:17,200 Speaker 2: true sources of competitive advantage here in America, and this 91 00:04:17,240 --> 00:04:19,760 Speaker 2: would have placed us at a huge disadvantage relative to 92 00:04:19,800 --> 00:04:23,040 Speaker 2: Europe and relative to other banking systems across the world. 93 00:04:23,440 --> 00:04:26,040 Speaker 2: I'm delighted to see that the FED Board has realized 94 00:04:26,080 --> 00:04:28,599 Speaker 2: that they've withdrawn it, or he's talking about withdrawing it 95 00:04:28,640 --> 00:04:31,880 Speaker 2: and reproposing. At least he's indicated that the Chair has 96 00:04:31,920 --> 00:04:34,279 Speaker 2: indicated that they're going to follow the Administrative Procedures Act, 97 00:04:34,279 --> 00:04:36,640 Speaker 2: and that means they will have a reasonable amount of 98 00:04:36,720 --> 00:04:38,960 Speaker 2: input from the industry, and I hope that they they'll 99 00:04:39,000 --> 00:04:40,239 Speaker 2: take that fully into account. 100 00:04:41,360 --> 00:04:43,839 Speaker 1: Donald Trump has said Senator that he wants to be 101 00:04:43,880 --> 00:04:47,360 Speaker 1: the most crypto friendly president in American history. I guess 102 00:04:47,360 --> 00:04:49,320 Speaker 1: that history doesn't go back too far if we want 103 00:04:49,360 --> 00:04:51,279 Speaker 1: to draw a comparison. But what would that look like. 104 00:04:52,480 --> 00:04:54,440 Speaker 2: Well, I've spent a good deal of time with the 105 00:04:54,440 --> 00:04:58,000 Speaker 2: President talking about this industry and what we see, and 106 00:04:58,000 --> 00:05:01,400 Speaker 2: I think a shared vision came through in our Republican 107 00:05:01,440 --> 00:05:04,839 Speaker 2: platform just this week. We see crypto as a defining 108 00:05:04,880 --> 00:05:08,040 Speaker 2: issue in the election this November, and I think as 109 00:05:08,120 --> 00:05:10,560 Speaker 2: voters go to the polls, they're going to realize that 110 00:05:10,600 --> 00:05:13,279 Speaker 2: as they cast their vote will determine the outcome of 111 00:05:13,279 --> 00:05:15,520 Speaker 2: the crypto industry here in America, because on the Democrat 112 00:05:15,600 --> 00:05:18,760 Speaker 2: side you have a group that are I think, very 113 00:05:18,880 --> 00:05:22,920 Speaker 2: radically trying to centralize everything. They want central control. They 114 00:05:22,920 --> 00:05:25,400 Speaker 2: don't like the decentralized nature of cryptocurrency. They don't like 115 00:05:25,400 --> 00:05:29,200 Speaker 2: the decentralized nature of cryptotechnology. The innovation is going to happen. 116 00:05:29,240 --> 00:05:33,920 Speaker 2: Cryptotechnology possesses tremendous potential for America. We have innovative DNA 117 00:05:34,000 --> 00:05:36,440 Speaker 2: here that goes beyond any of the nation. We should 118 00:05:36,520 --> 00:05:39,119 Speaker 2: capitalize on that. We'll create the ecosystem that would allow 119 00:05:39,160 --> 00:05:41,479 Speaker 2: for that. And our platform basically says we're going to 120 00:05:41,560 --> 00:05:44,080 Speaker 2: end the crackdown on the crypto industry. We're going to 121 00:05:44,120 --> 00:05:47,120 Speaker 2: allow mining, we're going to create an ecosystem for innovation, 122 00:05:47,560 --> 00:05:51,440 Speaker 2: we're going to allow decentralized control of these assets, and 123 00:05:51,480 --> 00:05:53,680 Speaker 2: we're not going to allow the type of surveillance that 124 00:05:53,680 --> 00:05:55,400 Speaker 2: the Democrat solution would support. 125 00:05:56,960 --> 00:05:59,159 Speaker 3: Well, it's interesting, Senator to hear a little bit about 126 00:05:59,160 --> 00:06:01,880 Speaker 3: the conversations you've had with the former president on that subject, 127 00:06:01,880 --> 00:06:04,960 Speaker 3: and knowing that you've served as his ambassador to Japan, 128 00:06:05,040 --> 00:06:07,760 Speaker 3: I wonder what conversations you've had with him about the 129 00:06:07,880 --> 00:06:10,520 Speaker 3: US's relationship with allies As we have the NATO summit 130 00:06:10,600 --> 00:06:14,000 Speaker 3: underway here in Washington, do you expect that the nature 131 00:06:14,160 --> 00:06:16,960 Speaker 3: of US participation in that alliance will be changed in 132 00:06:17,000 --> 00:06:19,680 Speaker 3: any way if he does indeed win in November. Our 133 00:06:19,720 --> 00:06:22,279 Speaker 3: allies right to be concerned about that as they meet 134 00:06:22,320 --> 00:06:22,720 Speaker 3: this week. 135 00:06:23,839 --> 00:06:26,000 Speaker 2: Kaylee, I've met with a number of our allies during 136 00:06:26,000 --> 00:06:27,839 Speaker 2: the course of this week because they realize I'm the 137 00:06:27,839 --> 00:06:30,160 Speaker 2: only former member of the Trump administration that serves in 138 00:06:30,200 --> 00:06:32,720 Speaker 2: the United States Senate, and I've been very clear with them, 139 00:06:32,920 --> 00:06:35,320 Speaker 2: America First does not mean America alone. But what we 140 00:06:35,360 --> 00:06:38,479 Speaker 2: want to see is our allies standing strong with us. 141 00:06:38,800 --> 00:06:41,000 Speaker 2: And what we've seen in NATO is that they've responded 142 00:06:41,040 --> 00:06:43,560 Speaker 2: to President Trump's pressure. They've stepped up their investment. They 143 00:06:43,600 --> 00:06:45,800 Speaker 2: need to do more. I think President Trump is going 144 00:06:45,839 --> 00:06:48,680 Speaker 2: to be very clear about that. We don't hesitate to 145 00:06:48,760 --> 00:06:51,160 Speaker 2: criticize our allies when it's time for them to step up. 146 00:06:51,240 --> 00:06:53,120 Speaker 2: We stand shoulder to shoulder with them at the same 147 00:06:53,160 --> 00:06:55,800 Speaker 2: time when the need arises. That's what I've conveyed. That's 148 00:06:55,839 --> 00:07:00,520 Speaker 2: what I think we'll see is the Natos Nateto group 149 00:07:00,560 --> 00:07:02,720 Speaker 2: continues to visit me here this week. That's a message 150 00:07:02,720 --> 00:07:06,120 Speaker 2: I'm going to be very consistent in delivering, all right. 151 00:07:06,160 --> 00:07:09,000 Speaker 3: Republican Senator Bill Haggerty of Tennessee, member of the Senate 152 00:07:09,000 --> 00:07:11,320 Speaker 3: Form Relations Committee and the Banking Committee as well, thank 153 00:07:11,360 --> 00:07:12,760 Speaker 3: you so much for joining us.