1 00:00:02,920 --> 00:00:10,600 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,640 --> 00:00:14,560 Speaker 1: Bloomberg Balance of Power podcast. Catch Just Live weekdays at 3 00:00:14,560 --> 00:00:17,759 Speaker 1: noon Eastern on Applecarplay and then Roudo with the Bloomberg 4 00:00:17,800 --> 00:00:21,200 Speaker 1: Business app. Listen on demand wherever you get your podcasts, 5 00:00:21,400 --> 00:00:25,320 Speaker 1: or watch us live on YouTube. 6 00:00:25,960 --> 00:00:29,120 Speaker 2: Welcome to the Tuesday edition of Ballance of Power. I'm 7 00:00:29,200 --> 00:00:32,600 Speaker 2: Joe Matthew live in Washington, where it's all about CPI 8 00:00:32,840 --> 00:00:38,280 Speaker 2: Day today. Everyone up early, including Molly Smith, to put 9 00:00:38,400 --> 00:00:41,000 Speaker 2: pen to paper or I guess type away on the 10 00:00:41,120 --> 00:00:43,160 Speaker 2: numbers here. We're going to dive into this with Molly 11 00:00:43,200 --> 00:00:46,120 Speaker 2: in a second. With the headline not what the administration 12 00:00:46,240 --> 00:00:49,680 Speaker 2: wants to see. Remember the hotter than expected jobs report 13 00:00:49,800 --> 00:00:53,840 Speaker 2: on Friday. Well, now US core inflation is topping forecasts 14 00:00:54,360 --> 00:00:57,320 Speaker 2: again and this has, of course implications for the Federal Reserve. 15 00:00:57,360 --> 00:01:01,360 Speaker 2: Not to mention the outcome of this presidential election. Top 16 00:01:01,400 --> 00:01:05,200 Speaker 2: line and core inflation up four tenths from January. Molly 17 00:01:05,400 --> 00:01:09,640 Speaker 2: Smith set the alarm extra early today as Bloomberg Economics 18 00:01:09,720 --> 00:01:10,959 Speaker 2: editor to crank this out. 19 00:01:10,800 --> 00:01:11,520 Speaker 3: At eight thirty. 20 00:01:12,040 --> 00:01:13,800 Speaker 2: That's got to be a little bit of heartburn, right, 21 00:01:13,840 --> 00:01:15,840 Speaker 2: I mean, when the big ones hit like this the 22 00:01:16,000 --> 00:01:19,240 Speaker 2: job's day, the CPI day, everybody is watching. 23 00:01:19,640 --> 00:01:22,360 Speaker 4: It certainly wakes you up at that hour, for sure, Joe, 24 00:01:22,760 --> 00:01:24,800 Speaker 4: and I gotta say, like, just hearing Charlie run through 25 00:01:24,840 --> 00:01:27,520 Speaker 4: the market trading right now, I'm just baffled at like 26 00:01:27,640 --> 00:01:30,200 Speaker 4: why stocks are up as much as they are. I 27 00:01:30,840 --> 00:01:33,800 Speaker 4: would love to hear what good news investors saw on this, 28 00:01:33,840 --> 00:01:36,000 Speaker 4: because I really didn't see it from my seat. 29 00:01:37,240 --> 00:01:38,560 Speaker 3: Okay, so let's get into it. 30 00:01:38,560 --> 00:01:40,560 Speaker 2: Because you know, on Friday we were talking about the 31 00:01:40,560 --> 00:01:42,520 Speaker 2: push pull of the jobs report, and you know, you 32 00:01:42,560 --> 00:01:44,840 Speaker 2: can find a good story to tell if you look 33 00:01:44,880 --> 00:01:47,800 Speaker 2: at it the right way. In this case, shelters up, 34 00:01:47,840 --> 00:01:50,520 Speaker 2: Gasolina's up, cars up, clothing, airfares. 35 00:01:50,520 --> 00:01:52,840 Speaker 3: Have you tried to book a flight lately? This is 36 00:01:52,880 --> 00:01:54,280 Speaker 3: what people are talking about at home. 37 00:01:54,440 --> 00:01:55,160 Speaker 5: Yeah, exactly. 38 00:01:55,320 --> 00:01:57,760 Speaker 4: So, like you just said, this was just a lot 39 00:01:57,760 --> 00:02:01,720 Speaker 4: of you know, pretty robust reading across the board. I mean, 40 00:02:02,040 --> 00:02:04,200 Speaker 4: I guess if you really wanted to slice and dice it, 41 00:02:04,280 --> 00:02:07,280 Speaker 4: the positive here, so to speak, was that there was 42 00:02:07,320 --> 00:02:10,760 Speaker 4: a bit of a pullback in this really narrow category 43 00:02:10,919 --> 00:02:14,560 Speaker 4: of services inflation that the FED looks at very closely. 44 00:02:14,560 --> 00:02:18,320 Speaker 4: If you've heard people describe core services x housing. So 45 00:02:18,440 --> 00:02:20,839 Speaker 4: this is what this one pulled back a bit from 46 00:02:20,880 --> 00:02:23,959 Speaker 4: like a very strong January reading, but really went more 47 00:02:24,000 --> 00:02:28,720 Speaker 4: from like rising very sharply to still rising pretty quickly. 48 00:02:29,120 --> 00:02:31,920 Speaker 4: So I wouldn't say it was exactly a slam dunk 49 00:02:31,960 --> 00:02:34,720 Speaker 4: in terms of people looking for positive news to take away. 50 00:02:35,639 --> 00:02:38,760 Speaker 4: Maybe that shelter inflation also did come down a bit, 51 00:02:38,800 --> 00:02:42,680 Speaker 4: but shelter combined with gasoline, contributed to over sixty percent 52 00:02:42,840 --> 00:02:45,480 Speaker 4: of the rise in the overall CPI in the month. 53 00:02:45,560 --> 00:02:47,320 Speaker 5: So these are things that people pay. 54 00:02:47,160 --> 00:02:50,640 Speaker 4: For every day. So if you're the average American consumer 55 00:02:50,720 --> 00:02:52,480 Speaker 4: right now, it certainly doesn't make you feel good to 56 00:02:52,480 --> 00:02:55,040 Speaker 4: know that your housing costs and gasoline are still very 57 00:02:55,080 --> 00:02:55,680 Speaker 4: much rising. 58 00:02:56,680 --> 00:02:56,920 Speaker 3: Yeah. 59 00:02:57,000 --> 00:03:00,680 Speaker 2: Right, Is there hope at least in the bullets behind 60 00:03:00,760 --> 00:03:04,720 Speaker 2: energy prices? I mean, obviously gasoline has seasonal factors here, 61 00:03:04,760 --> 00:03:07,000 Speaker 2: or maybe you see some relief in the next couple 62 00:03:07,040 --> 00:03:08,320 Speaker 2: of months or is that wishful thinking. 63 00:03:08,639 --> 00:03:11,160 Speaker 4: It's certainly possible. I mean, this was the first rise 64 00:03:11,280 --> 00:03:14,920 Speaker 4: in the whole energy category that we saw in five months, 65 00:03:15,080 --> 00:03:18,440 Speaker 4: so you know, lately that had been a driver more 66 00:03:18,480 --> 00:03:21,440 Speaker 4: of disinflation on the overall headline. But as you said, 67 00:03:21,480 --> 00:03:24,480 Speaker 4: these things are seasonal you know, patterns can change, and 68 00:03:24,520 --> 00:03:27,320 Speaker 4: also when you see airfares so high, more people might 69 00:03:27,360 --> 00:03:29,040 Speaker 4: want to drive, and then that could drive up the 70 00:03:29,120 --> 00:03:31,200 Speaker 4: you know, demand for gasoline and therefore the price of 71 00:03:31,240 --> 00:03:31,760 Speaker 4: that as well. 72 00:03:32,280 --> 00:03:36,480 Speaker 2: No, and the cycle continues. What can you tell us 73 00:03:36,520 --> 00:03:39,200 Speaker 2: about airfares? The biggest monthly advance? Did I read that right? 74 00:03:39,520 --> 00:03:42,160 Speaker 4: Yes, the biggest monthly advanced since May of twenty two, 75 00:03:42,920 --> 00:03:45,720 Speaker 4: so that one really came up quite a bit in 76 00:03:45,760 --> 00:03:48,400 Speaker 4: the month. And it's interesting because we saw a report 77 00:03:48,400 --> 00:03:50,920 Speaker 4: earlier today from Southwest saying that they're going to have 78 00:03:51,000 --> 00:03:54,040 Speaker 4: to reduce capacity given all of the struggles that they're 79 00:03:54,040 --> 00:03:57,920 Speaker 4: having with fewer Boeing deliveries. As you know, we certainly 80 00:03:57,920 --> 00:04:00,360 Speaker 4: know about that story and how that's been playing out, 81 00:04:00,680 --> 00:04:02,840 Speaker 4: but I think that's something you could I think Ryan 82 00:04:02,880 --> 00:04:06,800 Speaker 4: Air may have also warned of something similar to capacity constraints, 83 00:04:06,800 --> 00:04:09,440 Speaker 4: so that's of course also just going to push up 84 00:04:09,480 --> 00:04:11,560 Speaker 4: prices more so. So I'm not sure if that was 85 00:04:11,560 --> 00:04:14,720 Speaker 4: a factor in the February reading, but certainly could be 86 00:04:14,800 --> 00:04:15,600 Speaker 4: in the months ahead. 87 00:04:16,680 --> 00:04:19,640 Speaker 3: Have you flown since the door blowout, Molly. 88 00:04:20,520 --> 00:04:24,400 Speaker 4: I flew in last month. I did fly, So maybe 89 00:04:24,400 --> 00:04:27,120 Speaker 4: I'm contributing to the problem, but I think about it 90 00:04:27,120 --> 00:04:29,479 Speaker 4: as well in advance, and they were it was like 91 00:04:29,520 --> 00:04:31,840 Speaker 4: a two hundred dollars round trip fair to Atlanta, So 92 00:04:31,839 --> 00:04:32,760 Speaker 4: I think that's pretty good. 93 00:04:34,040 --> 00:04:36,240 Speaker 2: Pretty good. Might be twice that by now? Did you 94 00:04:36,279 --> 00:04:39,520 Speaker 2: try to sit you know, see people getting on the plane. 95 00:04:39,520 --> 00:04:41,200 Speaker 2: They're trying to figure out where the door plug is, 96 00:04:41,240 --> 00:04:43,000 Speaker 2: even if there is one on the plane, and then 97 00:04:43,040 --> 00:04:46,799 Speaker 2: they buckle up before being told. That's a fascinating element 98 00:04:46,839 --> 00:04:47,440 Speaker 2: of this for me. 99 00:04:47,600 --> 00:04:48,359 Speaker 3: I don't know about you. 100 00:04:48,680 --> 00:04:50,560 Speaker 4: Yeah, I mean, look, I would do it too if 101 00:04:50,600 --> 00:04:52,160 Speaker 4: I was nervous that a part of the plane was 102 00:04:52,200 --> 00:04:53,839 Speaker 4: going to blow out when I was, you know, thirty 103 00:04:53,880 --> 00:04:57,040 Speaker 4: thousand feet of the air, So any precaution necessary. 104 00:04:58,200 --> 00:05:01,240 Speaker 2: All right, So we've got PPA by tomorrow. Does this 105 00:05:01,279 --> 00:05:02,880 Speaker 2: take on new meaning because I have to ask you 106 00:05:02,880 --> 00:05:06,720 Speaker 2: about the FED here, of course, Molly Smith. Everybody says 107 00:05:06,760 --> 00:05:09,919 Speaker 2: that this means we're not going to see anything o June. 108 00:05:09,720 --> 00:05:10,320 Speaker 3: At the earliest. 109 00:05:11,120 --> 00:05:13,120 Speaker 4: Yeah, it looks like that's where most of the bets 110 00:05:13,120 --> 00:05:16,400 Speaker 4: are circling around. So we're getting PPI on Thursday. I 111 00:05:16,440 --> 00:05:18,360 Speaker 4: believe in that one's going to be like the last 112 00:05:18,360 --> 00:05:21,359 Speaker 4: major inflation report that we get before the Fed's meeting 113 00:05:21,400 --> 00:05:24,280 Speaker 4: next week. Obviously, don't think really anyone right now is 114 00:05:24,360 --> 00:05:27,280 Speaker 4: expecting a rate cut at that meeting, so that's very 115 00:05:27,360 --> 00:05:30,159 Speaker 4: much penciled in to be a fifth straight hold on 116 00:05:30,279 --> 00:05:34,000 Speaker 4: interest rates. So the PPI is important. This is prices 117 00:05:34,040 --> 00:05:35,919 Speaker 4: paid to U as producer, so it's a measure of 118 00:05:35,920 --> 00:05:39,200 Speaker 4: wholesale inflation. And this is really more important when you're 119 00:05:39,600 --> 00:05:43,680 Speaker 4: talking to economic forecasters because there are categories within the 120 00:05:43,720 --> 00:05:47,640 Speaker 4: PPI that filter into what's known as the PCE, and 121 00:05:47,680 --> 00:05:50,560 Speaker 4: that's the Fed's preferred inflation measure. There were some of 122 00:05:50,600 --> 00:05:53,480 Speaker 4: those parts in the inflation report today as well, So 123 00:05:53,839 --> 00:05:56,800 Speaker 4: a lot of economists say once the PPI numbers come out, 124 00:05:56,960 --> 00:05:59,359 Speaker 4: that's when they start to firm up their estimates for PCE, 125 00:06:00,000 --> 00:06:02,400 Speaker 4: which by the way, is running much lower than the 126 00:06:02,440 --> 00:06:06,799 Speaker 4: CPI does, in part because it doesn't wait shelter as heavily, 127 00:06:06,920 --> 00:06:09,320 Speaker 4: so that one is trending a lot closer to the 128 00:06:09,320 --> 00:06:11,920 Speaker 4: feds two percent target, and that's really more the one 129 00:06:11,920 --> 00:06:13,679 Speaker 4: that drives policy in their opinion. 130 00:06:14,960 --> 00:06:18,560 Speaker 3: Fascinating. She's the smartest person in the room, which. 131 00:06:18,360 --> 00:06:20,080 Speaker 2: Is why we try to talk around times like this 132 00:06:20,120 --> 00:06:22,120 Speaker 2: when the data are so important. 133 00:06:22,160 --> 00:06:24,120 Speaker 3: Molly Smith it's great to see Molly. Thank you. 134 00:06:24,760 --> 00:06:27,760 Speaker 2: We'll connect on the next major data point. I am sure, 135 00:06:27,760 --> 00:06:30,840 Speaker 2: Bloomberg Economics editor, we bring you to the source. I 136 00:06:30,839 --> 00:06:32,760 Speaker 2: hope you get to sleep at some point. 137 00:06:33,320 --> 00:06:33,599 Speaker 3: Molly. 138 00:06:33,680 --> 00:06:36,880 Speaker 2: You know it's primary day because every time we talk 139 00:06:36,920 --> 00:06:39,640 Speaker 2: about this economics stuff, we have to do it against 140 00:06:39,640 --> 00:06:42,880 Speaker 2: the backdrop of politics, and if you're Joe Biden, this 141 00:06:42,960 --> 00:06:46,520 Speaker 2: is topic number one, right unless, of course, I'm told 142 00:06:46,520 --> 00:06:49,800 Speaker 2: that the poll says the border is more important than 143 00:06:49,839 --> 00:06:52,800 Speaker 2: the economy. But we're coming pretty close here, certainly, as 144 00:06:52,800 --> 00:06:55,239 Speaker 2: we head around the rest of the country with primary elections, 145 00:06:55,240 --> 00:06:58,000 Speaker 2: and today we've got some big ones, none bigger or 146 00:06:58,080 --> 00:07:05,120 Speaker 2: more influential, are potentially more revealing than the one in Georgia. 147 00:07:05,279 --> 00:07:09,320 Speaker 2: As I read in the AJAC the Atlanta Journal Constitution, 148 00:07:09,880 --> 00:07:13,520 Speaker 2: Georgia primary could set a presidential rematch, but there is 149 00:07:13,560 --> 00:07:16,600 Speaker 2: more to it than that. As we try to read 150 00:07:16,640 --> 00:07:19,560 Speaker 2: Tea leaves here, results could give both of these men, 151 00:07:19,680 --> 00:07:23,440 Speaker 2: Joe Biden and Donald Trump, insight into the depths of 152 00:07:23,480 --> 00:07:26,680 Speaker 2: their voter support. And that's where we start our conversation 153 00:07:26,760 --> 00:07:30,680 Speaker 2: with Andre Gillespie back with us to talk about Georgia politics, 154 00:07:30,720 --> 00:07:33,120 Speaker 2: and by that I guess I mean national politics, because 155 00:07:33,120 --> 00:07:36,320 Speaker 2: it's pretty hard to separate the two. Associate Professor of 156 00:07:36,320 --> 00:07:39,200 Speaker 2: Political Science at Emory University, it's great to see you. 157 00:07:39,840 --> 00:07:43,160 Speaker 2: What will we learn tonight from Georgia that we can 158 00:07:43,200 --> 00:07:44,320 Speaker 2: apply to the rest of the nation. 159 00:07:45,560 --> 00:07:47,840 Speaker 6: Well, today is a day for both the Democratic and 160 00:07:47,920 --> 00:07:50,600 Speaker 6: the Republican parties to practice there get out the vote 161 00:07:50,600 --> 00:07:52,680 Speaker 6: efforts and their mobilization strategies. 162 00:07:52,920 --> 00:07:54,360 Speaker 7: We know already who's going. 163 00:07:54,240 --> 00:07:56,760 Speaker 6: To win these primaries, and we know that at some 164 00:07:56,880 --> 00:07:59,800 Speaker 6: point tonight, whether it's in Georgia or Mississippi, Donald Trump 165 00:07:59,800 --> 00:08:03,280 Speaker 6: is the thrush across the delegate threshold to be able 166 00:08:03,320 --> 00:08:06,200 Speaker 6: to secure the Republican nomination. That's likely to happen for 167 00:08:06,280 --> 00:08:10,000 Speaker 6: President Biden sometime next week, perhaps Florida or Ohio. But 168 00:08:10,160 --> 00:08:14,560 Speaker 6: since we know that they have no competition anymore, or 169 00:08:14,600 --> 00:08:17,560 Speaker 6: nominal competition at best on the Democratic side, I think 170 00:08:17,600 --> 00:08:19,280 Speaker 6: what we're going to be paying attention to is who 171 00:08:19,320 --> 00:08:21,800 Speaker 6: bothers to show up. It's important in Georgia to keep 172 00:08:21,840 --> 00:08:24,040 Speaker 6: in mind that people have been voting for weeks already 173 00:08:24,040 --> 00:08:27,080 Speaker 6: in early voting. But if we see robust turnout on 174 00:08:27,120 --> 00:08:29,520 Speaker 6: both sides, I think that that is a harbringer of 175 00:08:29,560 --> 00:08:30,800 Speaker 6: how competitive. 176 00:08:30,320 --> 00:08:32,199 Speaker 7: The race is going to be in Georgia, and. 177 00:08:32,120 --> 00:08:35,199 Speaker 6: This election is really going to come down to which 178 00:08:35,640 --> 00:08:38,720 Speaker 6: campaign gets their people out to vote. This isn't about persuasion, 179 00:08:38,800 --> 00:08:40,000 Speaker 6: it is about mobilization. 180 00:08:41,480 --> 00:08:42,600 Speaker 3: You mentioned the early vote. 181 00:08:42,600 --> 00:08:45,520 Speaker 2: I wonder to what extent that might influence the outcome 182 00:08:46,240 --> 00:08:50,199 Speaker 2: with folks voting when Nicki Haley was still in the race. 183 00:08:50,320 --> 00:08:53,280 Speaker 2: Could that bring some noise to these numbers, not to 184 00:08:53,320 --> 00:08:54,360 Speaker 2: Donald Trump's benefit. 185 00:08:55,840 --> 00:08:59,160 Speaker 6: Well, so Georgia has a hybrid system where delegates are allocated. 186 00:08:59,360 --> 00:09:01,719 Speaker 6: The winner gets a certain number of delegates, and then 187 00:09:01,880 --> 00:09:06,400 Speaker 6: delegates are also allocated via congressional district. You know, it 188 00:09:06,480 --> 00:09:09,839 Speaker 6: is possible that Haley could win a district, but as 189 00:09:09,840 --> 00:09:12,680 Speaker 6: we saw on Super Tuesday last week, even in places 190 00:09:12,760 --> 00:09:16,240 Speaker 6: where you would expect Republicans to be more moderate, Donald 191 00:09:16,240 --> 00:09:18,960 Speaker 6: Trump actually did really well in those types of counties. 192 00:09:19,120 --> 00:09:21,000 Speaker 6: So I think it really does become a question of 193 00:09:21,040 --> 00:09:24,359 Speaker 6: whether or not Nikki Haley could still win some delegates 194 00:09:24,400 --> 00:09:28,040 Speaker 6: in say the fifth congressional district, you know, or maybe 195 00:09:28,040 --> 00:09:30,960 Speaker 6: one of the more Democratic leaning districts. Who's to say 196 00:09:31,080 --> 00:09:35,319 Speaker 6: either way, between Georgia or Mississippi, And it's probably more 197 00:09:35,360 --> 00:09:37,240 Speaker 6: likely to be Mississippi. Donald Trump is going to have 198 00:09:37,320 --> 00:09:41,520 Speaker 6: enough delegates to be the presumptive Republican nominee. 199 00:09:42,160 --> 00:09:43,000 Speaker 3: Well, that's interesting. 200 00:09:43,000 --> 00:09:45,160 Speaker 2: You mentioned turnout, and I wonder what the level of 201 00:09:45,200 --> 00:09:48,080 Speaker 2: interest is in Georgia when you go to ground, what 202 00:09:48,120 --> 00:09:50,800 Speaker 2: are people talking about, how are the ads playing, et cetera. 203 00:09:52,200 --> 00:09:54,000 Speaker 7: So you know, it's still pretty early. 204 00:09:54,160 --> 00:09:57,839 Speaker 6: The Biden campaign in particular has just done an ad 205 00:09:57,840 --> 00:10:00,200 Speaker 6: by and so we're gonna see what the fruit of 206 00:10:00,240 --> 00:10:02,880 Speaker 6: that look like in the coming weeks. I think it's 207 00:10:02,920 --> 00:10:06,000 Speaker 6: just really important and symbolic to note that both Donald 208 00:10:06,040 --> 00:10:10,280 Speaker 6: Trump and Joe Biden were in Georgia on Saturday, and 209 00:10:10,320 --> 00:10:13,120 Speaker 6: so I look at that as an unofficial kickoff of 210 00:10:13,320 --> 00:10:15,720 Speaker 6: the twenty twenty four general election cycle. 211 00:10:15,960 --> 00:10:16,880 Speaker 7: The fact that they were. 212 00:10:16,760 --> 00:10:20,959 Speaker 6: Here having competing rallies before a primary election, but during 213 00:10:20,960 --> 00:10:23,319 Speaker 6: the week where it became very very clear that these 214 00:10:23,320 --> 00:10:26,360 Speaker 6: were likely going to be the presumptive nominees, I think 215 00:10:26,440 --> 00:10:31,199 Speaker 6: is symbolically really important. Georgia is a state that Democrats 216 00:10:31,200 --> 00:10:33,959 Speaker 6: cannot lose if they want to continue to hold the 217 00:10:34,000 --> 00:10:36,920 Speaker 6: White House, and it is a state that Republicans wouldn't 218 00:10:36,960 --> 00:10:39,240 Speaker 6: want to lose because it's a psychological blow. So it's 219 00:10:39,280 --> 00:10:41,600 Speaker 6: going to be important until the polls showed that one 220 00:10:41,600 --> 00:10:44,400 Speaker 6: of these candidates has a definitive and consistent lead. 221 00:10:46,120 --> 00:10:49,920 Speaker 2: I'm spending time with Andre Gillespie of Emory University here 222 00:10:49,960 --> 00:10:52,160 Speaker 2: on balance of power. Andre, you were with us back 223 00:10:52,160 --> 00:10:54,680 Speaker 2: in December of twenty two when we came to Atlanta 224 00:10:55,280 --> 00:10:58,839 Speaker 2: for the special Senate election. Of course, Raphael Warnock beat 225 00:10:59,160 --> 00:11:02,280 Speaker 2: herschel Walker, and there was a conversation in the air 226 00:11:02,360 --> 00:11:06,360 Speaker 2: as we spoke to officials like Secretary of Raffensburger, even 227 00:11:06,400 --> 00:11:09,200 Speaker 2: the way your governor was talking at the time of 228 00:11:09,280 --> 00:11:14,600 Speaker 2: a conservative Republican not in the MAGA camp, and there 229 00:11:14,679 --> 00:11:18,240 Speaker 2: was a question about exactly what a Georgia Republican might 230 00:11:18,320 --> 00:11:20,680 Speaker 2: look like. This is a different world. It seems like 231 00:11:20,720 --> 00:11:21,600 Speaker 2: we're in now, isn't it. 232 00:11:22,559 --> 00:11:24,760 Speaker 7: Well, I mean, it is a slightly different circumstance. 233 00:11:24,800 --> 00:11:28,319 Speaker 6: So Brian Kemp and Brad Raffensberger are not MAGA Republicans, 234 00:11:28,320 --> 00:11:31,440 Speaker 6: but they're Republicans and loyal ones at that. You know, 235 00:11:31,480 --> 00:11:35,560 Speaker 6: it is highly unlikely that they're going to endorse Joe Biden, 236 00:11:35,640 --> 00:11:39,280 Speaker 6: or vote for Joe Biden, or even abstain from voting 237 00:11:39,320 --> 00:11:42,079 Speaker 6: in the presidential election. Because of the tension that they 238 00:11:42,080 --> 00:11:45,280 Speaker 6: have had with the Trump campaign. So they, you know, 239 00:11:45,480 --> 00:11:47,840 Speaker 6: may not be walking arm in arm and campaigning in 240 00:11:47,920 --> 00:11:53,000 Speaker 6: lockstep with Donald Trump, but it's highly unusual to expect 241 00:11:53,120 --> 00:11:56,760 Speaker 6: for them to, you know, not ultimately be supportive of 242 00:11:56,840 --> 00:11:58,920 Speaker 6: former President Trump of the Republican nominee. 243 00:11:59,480 --> 00:12:01,680 Speaker 2: Sure, I do hear you, But my god, if you 244 00:12:01,720 --> 00:12:04,080 Speaker 2: went back to that day when we spoke about the 245 00:12:04,120 --> 00:12:06,760 Speaker 2: Senate race, could you have imagined, projecting a year out 246 00:12:07,200 --> 00:12:11,880 Speaker 2: that Donald Trump would be the commanding favorite in the 247 00:12:11,920 --> 00:12:13,400 Speaker 2: Republican primary in Georgia. 248 00:12:14,120 --> 00:12:17,920 Speaker 6: It's not surprising. Primary elections tend to turn out your 249 00:12:17,920 --> 00:12:22,360 Speaker 6: most politically active and your most ideologically extreme voters, and 250 00:12:22,440 --> 00:12:26,000 Speaker 6: so there is a tendency in primary elections for the 251 00:12:26,040 --> 00:12:29,360 Speaker 6: extremes to actually really be the discuss the deciding vote 252 00:12:29,600 --> 00:12:31,880 Speaker 6: in terms of who the nominee is going to be. 253 00:12:32,200 --> 00:12:34,760 Speaker 6: And so in this case, Donald Trump still enjoys high 254 00:12:34,840 --> 00:12:37,640 Speaker 6: levels of support among the base, and so the base 255 00:12:37,760 --> 00:12:42,360 Speaker 6: is turning out in strong numbers to ratify their choice 256 00:12:42,400 --> 00:12:46,960 Speaker 6: for a candidate. It doesn't negate Brian Kemp's operation in 257 00:12:47,000 --> 00:12:50,440 Speaker 6: the state, his history with voters in the state, or 258 00:12:50,480 --> 00:12:53,640 Speaker 6: his incumbency advantage in twenty twenty two, and so you 259 00:12:53,679 --> 00:12:55,960 Speaker 6: can do both at the same time. And so Republicans 260 00:12:55,960 --> 00:12:58,280 Speaker 6: can still support somebody who they've known for years who 261 00:12:58,280 --> 00:13:00,520 Speaker 6: has a strong operation in the state, while at the 262 00:13:00,559 --> 00:13:04,480 Speaker 6: same time supporting this new wave of a Republican candidate 263 00:13:04,520 --> 00:13:06,000 Speaker 6: like Donald Trump and his allies. 264 00:13:07,120 --> 00:13:10,400 Speaker 2: Well, so under could Joe Biden win Georgia again today? 265 00:13:10,440 --> 00:13:12,920 Speaker 2: Would he be able to pull this off again? And 266 00:13:12,960 --> 00:13:15,080 Speaker 2: what will you be looking for tonight to help answer 267 00:13:15,160 --> 00:13:15,600 Speaker 2: that question? 268 00:13:17,040 --> 00:13:18,960 Speaker 6: So, I mean it is a bit of an apples 269 00:13:19,000 --> 00:13:23,079 Speaker 6: to kind of pairs or oranges comparison. But you know, 270 00:13:23,240 --> 00:13:26,360 Speaker 6: if there is very lackluster turnout in the Democratic primary, 271 00:13:26,400 --> 00:13:29,600 Speaker 6: that probably isn't a good warning sign. And so the 272 00:13:29,679 --> 00:13:31,800 Speaker 6: Biden campaign would have to make sure that they are 273 00:13:31,840 --> 00:13:34,920 Speaker 6: redoubling their efforts to set up field offices across the 274 00:13:34,960 --> 00:13:38,160 Speaker 6: state and sending people out to do the hard work 275 00:13:38,200 --> 00:13:40,680 Speaker 6: of talking to voters on their doorsteps and on their 276 00:13:41,160 --> 00:13:43,880 Speaker 6: phones to make sure that they actually do turn out 277 00:13:43,880 --> 00:13:47,719 Speaker 6: to vote in an election. There's still a numerical disadvantage 278 00:13:47,720 --> 00:13:50,920 Speaker 6: for Democrats in the state. What Democrats have been able 279 00:13:50,960 --> 00:13:53,800 Speaker 6: to demonstrate in the last few election cycles, though, is 280 00:13:53,840 --> 00:13:57,120 Speaker 6: that if they're running against a very problematic Republican candidate. 281 00:13:57,320 --> 00:13:59,160 Speaker 6: They may be able to make the case to get 282 00:13:59,200 --> 00:14:01,920 Speaker 6: more Democrats to turn out to vote, but Democrats are 283 00:14:01,920 --> 00:14:04,560 Speaker 6: going to have to find every possible Democratic voter and 284 00:14:04,640 --> 00:14:07,600 Speaker 6: make sure that they actually show up to vote in November, 285 00:14:07,679 --> 00:14:09,560 Speaker 6: otherwise they probably will lose the race. 286 00:14:10,840 --> 00:14:14,480 Speaker 2: Have you heard talk of irregularities, security concerns, anything that 287 00:14:14,520 --> 00:14:16,160 Speaker 2: the secretary has been trying to avoid. 288 00:14:17,559 --> 00:14:18,640 Speaker 7: No, I haven't heard anything. 289 00:14:18,679 --> 00:14:20,800 Speaker 6: I don't expect that they're going to be those types 290 00:14:20,880 --> 00:14:25,040 Speaker 6: of allegations made tonight. You know, it could be in 291 00:14:25,080 --> 00:14:29,280 Speaker 6: part because Donald Trump is expected to coast to victory 292 00:14:29,720 --> 00:14:31,920 Speaker 6: in the state, but it's you know, it's important for 293 00:14:32,040 --> 00:14:35,000 Speaker 6: us to keep in mind that Brad Rathvensberger brings an 294 00:14:35,000 --> 00:14:39,000 Speaker 6: engineer's eye to running elections, and so he has done 295 00:14:39,040 --> 00:14:41,320 Speaker 6: everything humanly possible to make sure that there are no 296 00:14:41,520 --> 00:14:44,600 Speaker 6: errors in the contest and that the vote is counted 297 00:14:44,640 --> 00:14:45,600 Speaker 6: accurately and fairly. 298 00:14:45,640 --> 00:14:47,880 Speaker 7: And I think voters should have confidence in that. 299 00:14:49,040 --> 00:14:50,800 Speaker 2: Well, I'm glad you could come talk to us today. 300 00:14:50,800 --> 00:14:53,200 Speaker 2: I don't know if the apples to pairs comparison. Maybe 301 00:14:53,240 --> 00:14:55,960 Speaker 2: I get to be in the class, but I'm trying 302 00:14:56,040 --> 00:14:58,560 Speaker 2: andrig Gillespie It's great to see you. Happy Primary day 303 00:14:58,560 --> 00:14:59,960 Speaker 2: in Georgia. Come back and see us again. 304 00:15:03,240 --> 00:15:06,560 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Can 305 00:15:06,760 --> 00:15:09,800 Speaker 1: just live weekdays at noon Eastern on Applecarplay and then 306 00:15:09,880 --> 00:15:12,480 Speaker 1: roud Oto with the Bloomberg Business app. You can also 307 00:15:12,520 --> 00:15:16,040 Speaker 1: listen live on Amazon Alexa from our flagship New York station, 308 00:15:16,440 --> 00:15:20,440 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 309 00:15:21,680 --> 00:15:25,120 Speaker 5: We are broadcasting to you live from Washington, where, of course, 310 00:15:25,160 --> 00:15:27,880 Speaker 5: inflation data is not just something that Marcus pay attention to. 311 00:15:27,960 --> 00:15:30,600 Speaker 5: It's something the White House pays attention to as well. 312 00:15:30,680 --> 00:15:32,800 Speaker 5: Joe President Biden having to put out a statement in 313 00:15:32,840 --> 00:15:36,040 Speaker 5: reaction to this slightly hot CPI we got today saying, 314 00:15:36,080 --> 00:15:37,880 Speaker 5: as he said in the State of the Union, we 315 00:15:37,960 --> 00:15:40,360 Speaker 5: have more to do to lower costs and give the 316 00:15:40,400 --> 00:15:41,600 Speaker 5: middle class a fair shot. 317 00:15:41,680 --> 00:15:44,320 Speaker 2: That's right, and by that I mean another four years 318 00:15:44,600 --> 00:15:45,440 Speaker 2: to finish the job. 319 00:15:45,480 --> 00:15:47,200 Speaker 3: And that has been the refrain from the White House. 320 00:15:47,240 --> 00:15:49,320 Speaker 2: Maybe we hear more of that if we start to 321 00:15:49,320 --> 00:15:52,600 Speaker 2: see a reacceleration here, I guess it's more of a plateau. 322 00:15:52,920 --> 00:15:54,800 Speaker 2: But it makes us realize that this does not or 323 00:15:54,840 --> 00:15:56,400 Speaker 2: it reminds us that this does not move in a 324 00:15:56,400 --> 00:15:59,520 Speaker 2: straight line, and we wanted to talk to Annawong about that, 325 00:15:59,560 --> 00:16:05,880 Speaker 2: who joined from here in Washington, Bloomberg Economics, chief US economist. 326 00:16:06,040 --> 00:16:08,240 Speaker 2: We're going all the way to the top here. Anna, 327 00:16:08,320 --> 00:16:12,160 Speaker 2: thank you for joining us. How would you characterize this? 328 00:16:12,320 --> 00:16:15,480 Speaker 2: Is it a plateau at four tenths or is there 329 00:16:15,520 --> 00:16:16,720 Speaker 2: something else going on here? 330 00:16:17,560 --> 00:16:20,440 Speaker 8: I think it is a sigh of relief, and that's 331 00:16:20,480 --> 00:16:24,520 Speaker 8: the reason why the market was rallying and response on 332 00:16:24,560 --> 00:16:28,360 Speaker 8: the day of today's CPI release as opposed to January, 333 00:16:28,680 --> 00:16:32,360 Speaker 8: even though the core CPI in January and February are 334 00:16:32,400 --> 00:16:35,080 Speaker 8: the same at zero point four percent. And the reason 335 00:16:35,160 --> 00:16:39,200 Speaker 8: why is because everyone today was watching how the owner's 336 00:16:39,240 --> 00:16:46,920 Speaker 8: equivalence rent inflation is doing. In January, that OEUR category 337 00:16:47,040 --> 00:16:50,920 Speaker 8: jumped and it's supposed to be a stickier form of inflation, 338 00:16:51,040 --> 00:16:54,440 Speaker 8: so everybody was worried. But in today's report we saw 339 00:16:54,520 --> 00:16:59,360 Speaker 8: that it came back on track for disinflation in the 340 00:16:59,400 --> 00:17:01,840 Speaker 8: rest of the year, So that was what caused a 341 00:17:01,960 --> 00:17:06,399 Speaker 8: sigh of relief. And Powell also thinks that rent housing 342 00:17:06,440 --> 00:17:08,560 Speaker 8: rents will be coming down, will be the key driver 343 00:17:08,720 --> 00:17:12,800 Speaker 8: of disinflation this year. So I guess for everybody who's 344 00:17:13,880 --> 00:17:16,680 Speaker 8: you know, driving the market rally today. It is due 345 00:17:16,720 --> 00:17:20,920 Speaker 8: to that relief that one powerful force of disinflation is 346 00:17:20,960 --> 00:17:21,680 Speaker 8: still on track. 347 00:17:23,160 --> 00:17:26,040 Speaker 5: And yet Anna, we're still not at two percent. You 348 00:17:26,080 --> 00:17:29,560 Speaker 5: mentioned Fed Shair Jerome Powell. How is the FED likely 349 00:17:29,600 --> 00:17:31,680 Speaker 5: to look at today's data? Does it provide them any 350 00:17:31,680 --> 00:17:34,800 Speaker 5: real evidence that they need to cut rates anytime soon 351 00:17:34,800 --> 00:17:35,399 Speaker 5: that they should? 352 00:17:36,119 --> 00:17:36,359 Speaker 8: Yeah? 353 00:17:36,400 --> 00:17:37,119 Speaker 2: So you know. 354 00:17:37,400 --> 00:17:41,159 Speaker 8: Also another factor contributing to the high reading today and 355 00:17:41,320 --> 00:17:46,080 Speaker 8: January is this thing called residual seasonality. Generally, businesses like 356 00:17:46,119 --> 00:17:49,800 Speaker 8: to mark up prices in January and February. So I 357 00:17:49,800 --> 00:17:52,520 Speaker 8: think Powell already know this because we heard from him 358 00:17:52,800 --> 00:17:55,639 Speaker 8: in his testimony last week that he said he didn't 359 00:17:55,680 --> 00:17:58,840 Speaker 8: need to see better inflation print. In fact, he even 360 00:17:58,880 --> 00:18:01,639 Speaker 8: said it could be a little little bit worse, because 361 00:18:01,680 --> 00:18:05,000 Speaker 8: I think he expected that the seasonal factors will lead 362 00:18:05,080 --> 00:18:08,720 Speaker 8: to higher January and February reading. And according to our projection, 363 00:18:09,080 --> 00:18:14,000 Speaker 8: so even if inflation continue at this path, and we 364 00:18:14,040 --> 00:18:17,800 Speaker 8: are still likely going to see the twelve month change 365 00:18:17,800 --> 00:18:21,080 Speaker 8: in core PCEE getting down to two point five percent 366 00:18:21,200 --> 00:18:22,400 Speaker 8: or below by middle of. 367 00:18:22,320 --> 00:18:29,200 Speaker 2: The year, Gasoline and shelter contributing to over sixty percent 368 00:18:29,320 --> 00:18:32,560 Speaker 2: here and of the overall monthly advance, one of those 369 00:18:32,840 --> 00:18:36,480 Speaker 2: in terms of energy gas prices could be quite volatile. 370 00:18:36,520 --> 00:18:39,440 Speaker 2: We could actually see some movement there. Is it possible 371 00:18:39,800 --> 00:18:42,520 Speaker 2: that that's the key to a lower reading next month? 372 00:18:43,240 --> 00:18:47,639 Speaker 8: Well, yeah, you're right, Joe. Gasoline is very volatile. We 373 00:18:47,760 --> 00:18:50,200 Speaker 8: just had two months of negative reading, so it could 374 00:18:50,200 --> 00:18:52,600 Speaker 8: be that next month could be up or down. But 375 00:18:52,640 --> 00:18:55,240 Speaker 8: the most importantly, the FED is going to look through 376 00:18:55,280 --> 00:18:58,800 Speaker 8: gasoline and we rather the Fed will be focusing on 377 00:18:58,840 --> 00:19:03,119 Speaker 8: inflation expectations one year ahead. And from New York Fed's 378 00:19:03,200 --> 00:19:07,240 Speaker 8: data yesterday, we saw that inflation expectations is actually coming down. 379 00:19:07,640 --> 00:19:09,560 Speaker 8: So that's what matters for the Fed. 380 00:19:11,320 --> 00:19:14,880 Speaker 5: All right, Annawong, Chief US economists for US at Bloomberg Economics, 381 00:19:14,920 --> 00:19:17,640 Speaker 5: thank you so much as always for joining us, especially 382 00:19:17,960 --> 00:19:20,479 Speaker 5: on CPI Day. But of course it isn't just CPI 383 00:19:20,560 --> 00:19:24,480 Speaker 5: Day here in Washington. It is also Robert her testimony Day. 384 00:19:24,680 --> 00:19:27,080 Speaker 5: As Joe and I were talking about, today is the 385 00:19:27,119 --> 00:19:29,600 Speaker 5: day in which he is appearing before the Judiciary Committee 386 00:19:29,600 --> 00:19:32,960 Speaker 5: along with other guests like the Oversight Committee Chairman Jim Comer, 387 00:19:33,000 --> 00:19:36,879 Speaker 5: who came to ask questions. And it's really showing a 388 00:19:36,880 --> 00:19:40,160 Speaker 5: bit of partisanship. Joe I would say on how exactly 389 00:19:40,200 --> 00:19:44,000 Speaker 5: the Special Council's report related to President Biden is going down, 390 00:19:44,280 --> 00:19:45,200 Speaker 5: depending on what side. 391 00:19:45,040 --> 00:19:45,320 Speaker 9: Of the eye. 392 00:19:45,359 --> 00:19:47,119 Speaker 2: I love that Jim Comer came in so like it 393 00:19:47,160 --> 00:19:49,560 Speaker 2: was like a little like a jazz improv session there 394 00:19:49,560 --> 00:19:52,000 Speaker 2: with the chairman from the Oversight Committee. 395 00:19:52,040 --> 00:19:52,760 Speaker 3: This is interesting. 396 00:19:52,840 --> 00:19:57,040 Speaker 2: Robert Hurts playing defenseyeh today and I neither side seems 397 00:19:57,080 --> 00:19:59,480 Speaker 2: to like what he's saying because he doesn't seem to 398 00:19:59,480 --> 00:20:01,680 Speaker 2: be fulfilling the roles that they were hoping he would today. 399 00:20:01,720 --> 00:20:02,879 Speaker 3: Is that fair well? 400 00:20:02,960 --> 00:20:05,160 Speaker 5: On the one hand, Democrats don't like what he said 401 00:20:05,400 --> 00:20:08,240 Speaker 5: in the report about the presidents and his poor memory 402 00:20:08,359 --> 00:20:10,960 Speaker 5: is Robert Hurr described it. On the other hand, Republicans 403 00:20:11,000 --> 00:20:13,119 Speaker 5: don't like that Robert Hurr made the decision not to 404 00:20:13,240 --> 00:20:16,600 Speaker 5: charge President Biden for wilfully retaining documents when we've seen 405 00:20:16,640 --> 00:20:19,160 Speaker 5: Donald Trump charge in some case in Florida with many 406 00:20:19,280 --> 00:20:24,159 Speaker 5: counts of wilful retention of classified national security information. So 407 00:20:24,280 --> 00:20:26,840 Speaker 5: that's what you're really seeing play out in the room. 408 00:20:26,720 --> 00:20:27,400 Speaker 9: Today, That's right. 409 00:20:27,440 --> 00:20:29,680 Speaker 2: I think Republicans wanted him to talk about this mister 410 00:20:29,760 --> 00:20:33,199 Speaker 2: Magoo that he met, though he's not doing that. Democrats 411 00:20:33,200 --> 00:20:36,159 Speaker 2: don't want to completely blow away his credibility because he 412 00:20:36,240 --> 00:20:39,320 Speaker 2: also decided not to charge Joe Biden. Yes, and sees 413 00:20:39,400 --> 00:20:41,720 Speaker 2: these two cases, the Biden and Trump cases, is being 414 00:20:41,800 --> 00:20:42,320 Speaker 2: very different. 415 00:20:42,600 --> 00:20:46,439 Speaker 5: Well, let's get another voice into this conversation. Joining us 416 00:20:46,440 --> 00:20:49,600 Speaker 5: here in our studio in Washington is former Republican congressman 417 00:20:49,640 --> 00:20:52,760 Speaker 5: from Virginia, Denver. Reglmans. Are always great to see you, 418 00:20:52,840 --> 00:20:55,159 Speaker 5: especially to see you in studio with us table on 419 00:20:55,240 --> 00:20:59,080 Speaker 5: Bloomberg TV at the table and radio at the table. Indeed, 420 00:20:59,119 --> 00:21:01,320 Speaker 5: of course you're not in the room with everybody else today. 421 00:21:01,320 --> 00:21:03,879 Speaker 5: But is anyone getting what they want out of this testimony? 422 00:21:03,960 --> 00:21:05,960 Speaker 5: If it's what's the point of it? 423 00:21:06,200 --> 00:21:07,640 Speaker 9: I think the point is to make sure that they 424 00:21:07,640 --> 00:21:09,840 Speaker 9: get YouTube videos that they can actually show back in 425 00:21:09,840 --> 00:21:10,400 Speaker 9: their districts. 426 00:21:10,560 --> 00:21:12,240 Speaker 5: Okay, So like any other here, Yeah. 427 00:21:12,119 --> 00:21:15,240 Speaker 9: It's like shockingly partisan, right, so you know, and so 428 00:21:15,280 --> 00:21:17,080 Speaker 9: that's what you know, that's what my consultants would tell 429 00:21:17,119 --> 00:21:19,280 Speaker 9: me to do, or my chief right just like Okay, Denver, 430 00:21:19,600 --> 00:21:21,679 Speaker 9: who cares what the world is saying. You're talking to 431 00:21:21,720 --> 00:21:23,399 Speaker 9: your district right now. So what you're saying, like when 432 00:21:23,440 --> 00:21:25,720 Speaker 9: comer comes in, it's the same thing, you know, it's 433 00:21:25,760 --> 00:21:28,840 Speaker 9: a it's click type of politics. It's click politics right now. 434 00:21:28,880 --> 00:21:31,200 Speaker 9: And why I mean, it's really hard to split hairs 435 00:21:31,240 --> 00:21:33,399 Speaker 9: and then try to make the Democrats and Republicans happy. 436 00:21:33,800 --> 00:21:36,160 Speaker 9: And you know, somebody who actually read the Mole report, 437 00:21:36,160 --> 00:21:38,320 Speaker 9: I know that's nuts, but somebody who actually did it, 438 00:21:38,800 --> 00:21:40,399 Speaker 9: I need to read the whole her report. But when 439 00:21:40,440 --> 00:21:42,159 Speaker 9: you try to actually split the middle, or you want to, 440 00:21:42,359 --> 00:21:44,159 Speaker 9: you want to create a narrative on somebody's age or 441 00:21:44,200 --> 00:21:47,159 Speaker 9: memory at that level, and then not charge at the 442 00:21:47,200 --> 00:21:48,920 Speaker 9: same time, I really don't know what they were trying 443 00:21:48,920 --> 00:21:50,520 Speaker 9: to do. And then it's the law. It's either illegal 444 00:21:50,600 --> 00:21:52,960 Speaker 9: or not. Maybe just talk about intent. But it's not 445 00:21:53,000 --> 00:21:55,359 Speaker 9: surprising to me that it's shockingly partisan today. 446 00:21:55,480 --> 00:22:01,959 Speaker 2: His line, I needed to show my work Denver the question, 447 00:22:02,040 --> 00:22:03,800 Speaker 2: of course, why would you go there? Why would you 448 00:22:03,880 --> 00:22:08,200 Speaker 2: even characterize his memory or his physical ability? 449 00:22:08,240 --> 00:22:11,800 Speaker 3: You're not a doctor. Did he make the case for why? 450 00:22:12,359 --> 00:22:14,280 Speaker 9: No? I don't think so. And I think that's the 451 00:22:14,280 --> 00:22:16,680 Speaker 9: thing that surprised me a little bit almost. You know, 452 00:22:16,680 --> 00:22:18,600 Speaker 9: it would be like me, you know, doing investigation. I 453 00:22:18,600 --> 00:22:20,280 Speaker 9: have this new AI company I have now, right, and 454 00:22:20,280 --> 00:22:22,440 Speaker 9: it's like me doing investigation. We get to that final point, 455 00:22:22,480 --> 00:22:24,919 Speaker 9: and I said, well, we would actually go after this person, 456 00:22:25,000 --> 00:22:27,320 Speaker 9: but you know what, actually they meant to steal a 457 00:22:27,320 --> 00:22:29,600 Speaker 9: Snickers bar, not a zero bar from what we can 458 00:22:29,640 --> 00:22:32,080 Speaker 9: see and what we talked about. But on the other hand, 459 00:22:32,119 --> 00:22:34,600 Speaker 9: so since he stole the wrong thing and he's not 460 00:22:34,680 --> 00:22:36,159 Speaker 9: really very good at things, we're just not going to 461 00:22:36,200 --> 00:22:37,879 Speaker 9: charge him. It just doesn't make any sense to me. 462 00:22:37,960 --> 00:22:40,160 Speaker 9: It's you know, and I did something wrong, you didn't, 463 00:22:40,280 --> 00:22:42,000 Speaker 9: or you didn't. And that's the same thing with the 464 00:22:42,040 --> 00:22:44,000 Speaker 9: Mole report. Either you did something wrong, you didn't. And 465 00:22:44,040 --> 00:22:45,720 Speaker 9: I think when they're trying to split the baby and 466 00:22:45,760 --> 00:22:47,879 Speaker 9: it's just politicized right now, I think it's really a 467 00:22:47,880 --> 00:22:50,040 Speaker 9: detriment to the American people, and I think it's actually 468 00:22:50,160 --> 00:22:51,280 Speaker 9: a bit of an insult. 469 00:22:51,560 --> 00:22:54,040 Speaker 5: Well, of course, doing the business of the American people 470 00:22:54,280 --> 00:22:57,000 Speaker 5: is what Congress was elected to do. They are literally 471 00:22:57,240 --> 00:23:00,200 Speaker 5: representatives of each of their districts. So when we think 472 00:23:00,240 --> 00:23:03,919 Speaker 5: about the business they're doing hearings like this, they are 473 00:23:03,960 --> 00:23:06,840 Speaker 5: potentially going to be voting on a TikTok bill tomorrow 474 00:23:06,920 --> 00:23:10,000 Speaker 5: that would see it banned if Byite Dance doesn't divest it. 475 00:23:10,680 --> 00:23:12,280 Speaker 5: And then on the twenty second they're going to try 476 00:23:12,280 --> 00:23:14,040 Speaker 5: to fund the rest of the government, the harder parts 477 00:23:14,040 --> 00:23:17,400 Speaker 5: of the government to fund, including homeland security, the Defense Department. 478 00:23:19,240 --> 00:23:21,960 Speaker 5: Is there work working. Are you confident that they're going 479 00:23:22,040 --> 00:23:24,400 Speaker 5: to be able to do those next six appropriations bills 480 00:23:24,440 --> 00:23:26,320 Speaker 5: when they're also doing things like we're seeing today. 481 00:23:26,960 --> 00:23:30,400 Speaker 9: You know, the short answer is no, not very confident. 482 00:23:30,600 --> 00:23:33,040 Speaker 9: And you know, for instance, when I know some of 483 00:23:33,080 --> 00:23:36,000 Speaker 9: these representatives actually trying to I would say, ferret through 484 00:23:36,040 --> 00:23:39,000 Speaker 9: the TikTok technology or what it actually means to actually 485 00:23:39,000 --> 00:23:41,399 Speaker 9: ban TikTok, or looking at other types of things, I 486 00:23:41,440 --> 00:23:43,359 Speaker 9: don't know if they're behind the door actually talking about 487 00:23:43,400 --> 00:23:45,920 Speaker 9: what other type of operations look with that type of technology. 488 00:23:45,960 --> 00:23:49,000 Speaker 9: When you talk about information operations or radicalization, I don't 489 00:23:49,000 --> 00:23:50,960 Speaker 9: even think they have the ability to digest it. I 490 00:23:51,000 --> 00:23:53,080 Speaker 9: don't think they have the intelligence to do so. I 491 00:23:53,080 --> 00:23:54,760 Speaker 9: think when you're looking at the other bills, it's become 492 00:23:54,840 --> 00:23:56,360 Speaker 9: so partisan. And now what do we have a one 493 00:23:56,440 --> 00:23:59,280 Speaker 9: or two seat separation, maybe three seat separation based on 494 00:23:59,280 --> 00:24:01,320 Speaker 9: who shows up the day. Let me tell you, I 495 00:24:01,320 --> 00:24:02,920 Speaker 9: think it's going to be a knockdown, drag out, and 496 00:24:02,920 --> 00:24:04,760 Speaker 9: I think you're going to see the screamers and the 497 00:24:04,800 --> 00:24:06,919 Speaker 9: partisans really coming to play, and I think it's going 498 00:24:06,960 --> 00:24:09,800 Speaker 9: to be literally insane for allow the saying to watch them. 499 00:24:09,920 --> 00:24:12,400 Speaker 2: I want you to tell us what happened with this 500 00:24:12,520 --> 00:24:15,720 Speaker 2: TikTok thing, because six months ago it was quiet, it 501 00:24:15,760 --> 00:24:19,159 Speaker 2: was crickets. There was this massive effort to block the 502 00:24:19,320 --> 00:24:22,080 Speaker 2: talk we're going to ban it. There were four different bills, 503 00:24:22,119 --> 00:24:26,479 Speaker 2: Democrats and Republicans acting like they liked each other, and 504 00:24:26,520 --> 00:24:30,719 Speaker 2: then they hired lobbyists and dumped millions of dollars on 505 00:24:30,760 --> 00:24:31,960 Speaker 2: the district and. 506 00:24:31,920 --> 00:24:35,240 Speaker 3: The story went away. That in itself is a story 507 00:24:35,359 --> 00:24:36,160 Speaker 3: if you ask me. 508 00:24:36,760 --> 00:24:39,960 Speaker 9: But how did it come back? Well, it's an election year, 509 00:24:41,440 --> 00:24:43,800 Speaker 9: so you know with election year, there's probably some polling 510 00:24:43,840 --> 00:24:45,960 Speaker 9: going on or things like that, or they're getting constituent calls. 511 00:24:45,960 --> 00:24:47,880 Speaker 9: But also you have lobbyists on both sides. I mean, 512 00:24:48,119 --> 00:24:50,040 Speaker 9: you think about TikTok going away, how does that open 513 00:24:50,119 --> 00:24:53,480 Speaker 9: up the market for other competitors? Number one, Donald Trump 514 00:24:53,560 --> 00:24:57,679 Speaker 9: absolutely yesterday. This is about finances. This is about actually 515 00:24:57,680 --> 00:24:59,560 Speaker 9: pay to play. This is rent seeking, right, So that's 516 00:24:59,560 --> 00:25:01,560 Speaker 9: what you're a Look, gosh, I'm being very blunt here. 517 00:25:01,600 --> 00:25:05,320 Speaker 9: I apologize that, but that's what's happening, right, Now the 518 00:25:05,320 --> 00:25:07,560 Speaker 9: thing when you're talking about TikTok, I despise parts of 519 00:25:07,560 --> 00:25:10,640 Speaker 9: TikTok based on the fact I was in information warfare. 520 00:25:11,160 --> 00:25:13,040 Speaker 9: Sort of do that today right with the company that 521 00:25:13,080 --> 00:25:14,840 Speaker 9: we have. When you're talking about and I've told people 522 00:25:14,840 --> 00:25:17,600 Speaker 9: that information wars the forever war. When you're looking at TikTok, 523 00:25:17,600 --> 00:25:19,560 Speaker 9: there's other things I would rather do to look at 524 00:25:19,560 --> 00:25:22,600 Speaker 9: TikTok for data purposes and information rather than totally ban it, 525 00:25:22,960 --> 00:25:26,000 Speaker 9: I think again, But that's nuance now you're talking about 526 00:25:26,080 --> 00:25:28,199 Speaker 9: you actually have to have Republicans and Democrats talking to 527 00:25:28,240 --> 00:25:30,399 Speaker 9: experts in the technical field on the nuance of the 528 00:25:30,440 --> 00:25:33,320 Speaker 9: specific bill. And nuance is not part of this tribalism 529 00:25:33,320 --> 00:25:35,320 Speaker 9: that's going on today. It's like you know, how many 530 00:25:35,400 --> 00:25:37,240 Speaker 9: sticks can I bang together and run through the woods 531 00:25:37,240 --> 00:25:39,720 Speaker 9: and screen you know, painted and bizarre earth paints. You know, 532 00:25:39,760 --> 00:25:42,440 Speaker 9: that's really what they're doing. And so that's what you're 533 00:25:42,440 --> 00:25:44,840 Speaker 9: seeing right now as you're seeing a lobbyist, a massive 534 00:25:44,880 --> 00:25:48,000 Speaker 9: lobby flow coming in that's actually trying to dictate one 535 00:25:48,000 --> 00:25:49,960 Speaker 9: way or the other where Democrats where Republicans are going 536 00:25:50,000 --> 00:25:51,120 Speaker 9: to go on the TikTok situation. 537 00:25:51,640 --> 00:25:53,600 Speaker 5: Well, and of course they in the House will have 538 00:25:53,640 --> 00:25:55,960 Speaker 5: a chance to vote on this measure tomorrow. That's the 539 00:25:55,960 --> 00:25:58,720 Speaker 5: working plan. This goes to the floor on Wednesday. The Senate, though, 540 00:25:59,000 --> 00:26:01,440 Speaker 5: seems much more and some of what you're hearing from 541 00:26:01,480 --> 00:26:04,439 Speaker 5: senators who seem more reluctant about this particular legislation are 542 00:26:04,520 --> 00:26:07,840 Speaker 5: concerns around maybe the First Amendment on constitutionality, also the 543 00:26:07,840 --> 00:26:10,920 Speaker 5: fact that this is a private company specifically being called 544 00:26:10,960 --> 00:26:15,120 Speaker 5: out in a piece of legislation. Are those concerns warranted? 545 00:26:15,280 --> 00:26:16,960 Speaker 9: Well, the thing is, if you're banning TikTok, what does 546 00:26:16,960 --> 00:26:20,119 Speaker 9: that do to Facebook? The senator? You know, the Senate's 547 00:26:20,119 --> 00:26:22,800 Speaker 9: showing some nuance right now. Now you're talking about okay, 548 00:26:22,840 --> 00:26:25,160 Speaker 9: what is the cut off line when you're talking about 549 00:26:25,240 --> 00:26:29,159 Speaker 9: radicalization and statistics or you're talking about ownership of as 550 00:26:29,200 --> 00:26:31,119 Speaker 9: said corporation, and what does that actually do for the 551 00:26:31,160 --> 00:26:33,680 Speaker 9: future of any type of I would say, any type 552 00:26:33,720 --> 00:26:35,520 Speaker 9: of controls on this type of language. I mean that, 553 00:26:35,920 --> 00:26:37,520 Speaker 9: you know, for me, being a First Amendment guy and 554 00:26:37,560 --> 00:26:40,359 Speaker 9: also understanding that there's really bad things happening in the 555 00:26:40,440 --> 00:26:43,360 Speaker 9: radicalization space, there has to be nuance where again, you're 556 00:26:43,400 --> 00:26:46,399 Speaker 9: not really representing the American people. You're representing special interests 557 00:26:46,440 --> 00:26:48,879 Speaker 9: based on what your fundraising looks like, and based on 558 00:26:48,880 --> 00:26:50,520 Speaker 9: what you're pulling and cross tabs looks like. And I 559 00:26:50,520 --> 00:26:52,400 Speaker 9: get it, you want to win your race, but maybe 560 00:26:52,440 --> 00:26:54,200 Speaker 9: do something and tell the truth to the American people. 561 00:26:54,280 --> 00:26:56,040 Speaker 9: Try to have some nuance in your thinking. When you're 562 00:26:56,040 --> 00:26:58,280 Speaker 9: going from nuance that is not a word that no, 563 00:26:58,320 --> 00:27:03,040 Speaker 9: I don't even know if they don't expel that a 564 00:27:03,800 --> 00:27:06,280 Speaker 9: Congress we spend time with someone who knows. The former 565 00:27:06,280 --> 00:27:09,040 Speaker 9: Congressman Denver Riggleman is with us here on Balance of Power. 566 00:27:09,200 --> 00:27:13,040 Speaker 9: We're gonna spend time later today with the President of 567 00:27:13,080 --> 00:27:16,439 Speaker 9: Poland on the later edition of Balance of Power. 568 00:27:17,520 --> 00:27:21,960 Speaker 2: He's meeting with Speaker Mike Johnson right now. The matter 569 00:27:22,040 --> 00:27:25,719 Speaker 2: of Ukraine, of course, is what they're talking about. What 570 00:27:25,760 --> 00:27:30,080 Speaker 2: does Mike Johnson say to a foreign head of state 571 00:27:30,680 --> 00:27:33,840 Speaker 2: like this, coming with an ask when there is absolutely 572 00:27:33,960 --> 00:27:34,520 Speaker 2: no answer. 573 00:27:35,280 --> 00:27:37,960 Speaker 9: He's dancing on eggshells right now. And what he's trying 574 00:27:38,000 --> 00:27:39,879 Speaker 9: to do is use a lot of big syllable words 575 00:27:39,920 --> 00:27:42,680 Speaker 9: to say nothing. That's what's happening behind closed doors right now. 576 00:27:42,720 --> 00:27:45,119 Speaker 9: And you know, I wonder Mike Johnson has got to 577 00:27:45,200 --> 00:27:47,680 Speaker 9: have I don't want to say this in a really 578 00:27:47,720 --> 00:27:49,920 Speaker 9: I come to Jesus on what's going on in Ukraine, 579 00:27:50,400 --> 00:27:53,719 Speaker 9: and I think I think Poland can help him with that. 580 00:27:54,480 --> 00:27:57,000 Speaker 9: There's got to be funding for Ukraine. Anybody who's outside 581 00:27:57,000 --> 00:27:58,320 Speaker 9: of that box right now, I think is in real 582 00:27:58,400 --> 00:28:00,760 Speaker 9: trouble because if we actually take away from Ukraine or 583 00:28:00,800 --> 00:28:03,480 Speaker 9: that support, Poland's going to be very worried about Russia 584 00:28:03,560 --> 00:28:06,080 Speaker 9: right now. So again, I would love to be in 585 00:28:06,119 --> 00:28:09,200 Speaker 9: that discussion right now. You know, my background is Eastern 586 00:28:09,240 --> 00:28:12,840 Speaker 9: European affairs. I deployed there, you know, for Operation Allied 587 00:28:12,840 --> 00:28:15,400 Speaker 9: Force on the Romanian Serbian border. I know a little 588 00:28:15,440 --> 00:28:18,360 Speaker 9: bit about Russia, just a little. But I would love 589 00:28:18,359 --> 00:28:20,040 Speaker 9: to be in there right now. But I can't imagine 590 00:28:20,080 --> 00:28:22,280 Speaker 9: how that conversation is going with Mike Johnson having to 591 00:28:22,320 --> 00:28:24,040 Speaker 9: appeal to the base of his party in the Freedom 592 00:28:24,080 --> 00:28:26,879 Speaker 9: Caucus and talking, you know, to a representative from Poland 593 00:28:26,880 --> 00:28:29,640 Speaker 9: at that level, it's got to be a mind numbingly 594 00:28:29,680 --> 00:28:31,040 Speaker 9: crazy conversation right now. 595 00:28:31,160 --> 00:28:33,400 Speaker 5: Well, and not just the members of his own conference, 596 00:28:33,400 --> 00:28:35,600 Speaker 5: but former President Trump as well, who we know has 597 00:28:35,680 --> 00:28:38,840 Speaker 5: opinions on Ukraine and whether or not the US should 598 00:28:38,840 --> 00:28:40,760 Speaker 5: continue to fund the war. Just make sure the war 599 00:28:40,840 --> 00:28:43,840 Speaker 5: comes to an end in whatever capacity. If you were 600 00:28:44,400 --> 00:28:46,560 Speaker 5: in Poland, if you were part of the Polish government, 601 00:28:46,680 --> 00:28:48,560 Speaker 5: would you fear second Trump administration? 602 00:28:48,640 --> 00:28:49,160 Speaker 7: Should they? 603 00:28:49,440 --> 00:28:52,400 Speaker 9: Anybody saying should? Yeah? And I would say that the 604 00:28:52,440 --> 00:28:54,200 Speaker 9: head of the Freedom Caucus is in mar A Lago, 605 00:28:54,280 --> 00:28:56,520 Speaker 9: by the way, So I mean that's really what we got. 606 00:28:56,560 --> 00:28:58,040 Speaker 9: And I would say that the Speaker actually go to 607 00:28:58,120 --> 00:29:00,960 Speaker 9: mar A Lago before he actually makes any decision going forward, 608 00:29:01,000 --> 00:29:04,040 Speaker 9: because President Trump is the nominee for the presidential race 609 00:29:04,080 --> 00:29:06,600 Speaker 9: in twenty twenty four and could possibly win. So yeah, 610 00:29:06,640 --> 00:29:09,800 Speaker 9: I think I think what you're saying right now, I 611 00:29:09,840 --> 00:29:12,000 Speaker 9: would think that anybody who's saying in the Polish government 612 00:29:12,040 --> 00:29:13,640 Speaker 9: is like, for the for the love of God, we 613 00:29:13,720 --> 00:29:16,400 Speaker 9: hope that Trump doesn't win. Pretty remarkable. 614 00:29:16,400 --> 00:29:18,080 Speaker 2: He's meeting with the President a little bit later on 615 00:29:18,680 --> 00:29:21,440 Speaker 2: before he makes his way here, Kaylee. I suspect that'll 616 00:29:21,440 --> 00:29:24,440 Speaker 2: be a very different conversation, but he'll be able to 617 00:29:24,520 --> 00:29:26,240 Speaker 2: tell the President about what he heard today. 618 00:29:26,320 --> 00:29:28,280 Speaker 9: Absolutely, and I think they're going to be very blunt 619 00:29:28,280 --> 00:29:31,040 Speaker 9: in that conversation. And again I can't believe is the 620 00:29:31,160 --> 00:29:33,360 Speaker 9: United States of America we have a GOP that's mostly 621 00:29:33,360 --> 00:29:35,560 Speaker 9: against Ukraine. Funding. It seems like we're an upside down 622 00:29:35,600 --> 00:29:36,240 Speaker 9: world right now. 623 00:29:36,920 --> 00:29:39,960 Speaker 2: Must be incredible coming back to Washington and walking freely 624 00:29:40,360 --> 00:29:41,520 Speaker 2: as a former congressman. 625 00:29:41,560 --> 00:29:43,120 Speaker 3: Oh yeah, that's right, whatever you want. 626 00:29:43,120 --> 00:29:44,640 Speaker 9: I would rather stick a pencil on my eye than 627 00:29:44,640 --> 00:29:46,040 Speaker 9: be in Congress right now. So I'm happy. 628 00:29:46,720 --> 00:29:50,000 Speaker 3: Uh never, don't be a stranger. Great to see you, 629 00:29:50,040 --> 00:29:50,640 Speaker 3: as great to see it. 630 00:29:50,800 --> 00:29:54,680 Speaker 2: Denver Wrigglelman, the former congressman, former Air Force intelligence, founder 631 00:29:54,720 --> 00:29:58,920 Speaker 2: of RIG Security, and author of The Breach, The Untold 632 00:29:58,920 --> 00:30:01,360 Speaker 2: story of the investigation into January sixth. 633 00:30:01,400 --> 00:30:02,200 Speaker 3: This is Bloomberg. 634 00:30:05,880 --> 00:30:09,400 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 635 00:30:09,480 --> 00:30:12,520 Speaker 1: us live weekdays at noon Eastern on Applecarplay and then 636 00:30:12,600 --> 00:30:15,560 Speaker 1: roud Otto with the Bloomberg Business app. Listen on demand 637 00:30:15,600 --> 00:30:21,440 Speaker 1: wherever you get your podcasts, or watch us live on YouTube. 638 00:30:21,920 --> 00:30:22,720 Speaker 3: Thanks for being with us. 639 00:30:22,720 --> 00:30:26,080 Speaker 2: Tuesday edition of Balance of Power here on Bloomberg TV 640 00:30:26,280 --> 00:30:29,840 Speaker 2: and radio and on YouTube. You can always find the 641 00:30:29,880 --> 00:30:32,200 Speaker 2: podcast if you showed up late, go to Apple, Spotify 642 00:30:32,240 --> 00:30:35,040 Speaker 2: or wherever you do that stuff and subscribe. As we 643 00:30:35,080 --> 00:30:38,480 Speaker 2: focus on the economy, of course, something that is of 644 00:30:38,760 --> 00:30:43,760 Speaker 2: dire concern to the Biden administration. With CPI day, bringing 645 00:30:43,760 --> 00:30:47,440 Speaker 2: hotter than expected inflation, and Kaylee, this is the second 646 00:30:47,480 --> 00:30:50,600 Speaker 2: time in a row we've seen a hotter than expected print, 647 00:30:50,760 --> 00:30:53,720 Speaker 2: getting some folks to wonder, is this bad news for 648 00:30:53,800 --> 00:30:56,680 Speaker 2: Joe Biden? Could we see a reacceleration of inflation that 649 00:30:56,680 --> 00:30:58,080 Speaker 2: would not be out of the question. 650 00:30:58,200 --> 00:31:03,000 Speaker 5: Or could we just see progress in a deceleration of inflation. 651 00:31:03,160 --> 00:31:07,080 Speaker 5: If this all proves sticky, does the price pressure relief 652 00:31:07,120 --> 00:31:10,640 Speaker 5: that has been underway continue? And of course this isn't 653 00:31:10,680 --> 00:31:14,160 Speaker 5: just potentially a problem for political figures like the President 654 00:31:14,200 --> 00:31:16,720 Speaker 5: of the United States, but non political figures as well, 655 00:31:16,760 --> 00:31:19,840 Speaker 5: like say the chairman of the Federal Reserve. Because, of course, Joe, 656 00:31:19,880 --> 00:31:22,600 Speaker 5: the market is still anticipating that by midway through this year, 657 00:31:23,000 --> 00:31:25,520 Speaker 5: the Fed could be cutting interest rates. The problem is, 658 00:31:25,520 --> 00:31:28,160 Speaker 5: if inflation isn't doing what they want, is the Fed 659 00:31:28,200 --> 00:31:29,480 Speaker 5: going to feel comfortable doing that? 660 00:31:29,520 --> 00:31:31,680 Speaker 2: These are big questions when you're trying to plan a campaign, 661 00:31:31,720 --> 00:31:33,240 Speaker 2: nevermind forecast the economy. 662 00:31:33,320 --> 00:31:35,520 Speaker 5: Absolutely, and there are big questions that we pose to 663 00:31:35,560 --> 00:31:37,520 Speaker 5: our guests, like the one joining us now, We're very 664 00:31:37,600 --> 00:31:40,800 Speaker 5: lucky to say. Danny Blinchfeower, a tenured professor of economics 665 00:31:40,840 --> 00:31:44,120 Speaker 5: at Dartmouth College, is with us. Professor, always great to 666 00:31:44,120 --> 00:31:46,720 Speaker 5: have you on Bloomberg TV and radio. When you look 667 00:31:46,760 --> 00:31:49,240 Speaker 5: at the data today, some of the more sticky components 668 00:31:49,280 --> 00:31:52,480 Speaker 5: of inflation potentially that we're watching here, do you see 669 00:31:52,560 --> 00:31:56,480 Speaker 5: signs that policy can or should ease in the not 670 00:31:56,560 --> 00:31:57,360 Speaker 5: so distant future. 671 00:31:58,360 --> 00:32:02,200 Speaker 10: Well, there's nothing in data today. I think that changed 672 00:32:02,240 --> 00:32:05,600 Speaker 10: my view from yesterday. And I always say to people, 673 00:32:05,880 --> 00:32:07,920 Speaker 10: I mean I was a person who sat and said 674 00:32:07,960 --> 00:32:11,240 Speaker 10: interest rates, and I think very often the debate in 675 00:32:11,320 --> 00:32:14,880 Speaker 10: public is not quite the debate the policymakers have, because 676 00:32:14,960 --> 00:32:18,080 Speaker 10: when you change interest rates, that impacts things in about 677 00:32:18,080 --> 00:32:22,000 Speaker 10: eighteen months time, and you always should be thinking what's 678 00:32:22,040 --> 00:32:24,600 Speaker 10: going to happen there? And has this latest piece of 679 00:32:24,600 --> 00:32:27,600 Speaker 10: information changed my view of things? And I think the 680 00:32:27,640 --> 00:32:30,960 Speaker 10: answer to that is no, We're running steady. But the 681 00:32:31,000 --> 00:32:34,720 Speaker 10: problem you're rightly picking it up is that the economy 682 00:32:34,760 --> 00:32:39,080 Speaker 10: has been a puzzle. Inflation has remained stickier than you 683 00:32:39,120 --> 00:32:43,000 Speaker 10: would have thought given the rate rises, and consumer spendings 684 00:32:43,040 --> 00:32:46,280 Speaker 10: remained stickier and held up more than you had thought. 685 00:32:46,520 --> 00:32:50,640 Speaker 10: There are, however, worrying signs, and I would be focused 686 00:32:50,840 --> 00:32:55,000 Speaker 10: on the labor market and also looking at the rest 687 00:32:55,040 --> 00:32:57,800 Speaker 10: of the world because the UK and other European countries 688 00:32:58,160 --> 00:33:01,560 Speaker 10: are clearly in recession. China's pretty slowly. So the answer is, 689 00:33:01,640 --> 00:33:03,960 Speaker 10: I don't think there's much would change my view. That 690 00:33:04,200 --> 00:33:07,680 Speaker 10: big issue still is have those rate rises that have 691 00:33:07,760 --> 00:33:10,440 Speaker 10: been in place for a while now have they fully 692 00:33:10,480 --> 00:33:12,880 Speaker 10: had an effect? And the Fed, I guess we'll be 693 00:33:12,920 --> 00:33:15,560 Speaker 10: sitting waiting and watching. I don't think it rules anything out. 694 00:33:15,840 --> 00:33:18,920 Speaker 10: The market's a little up on the news, but I'm 695 00:33:19,000 --> 00:33:20,960 Speaker 10: worried that something bad is still coming. 696 00:33:22,880 --> 00:33:26,720 Speaker 2: Danny Blanchflower, last time you joined us, we made clear 697 00:33:26,760 --> 00:33:29,120 Speaker 2: that you would have failed me in your economics class. 698 00:33:29,120 --> 00:33:31,920 Speaker 2: So I'm going to be careful here. But based on 699 00:33:31,960 --> 00:33:37,120 Speaker 2: what you just said, if you're saying interest rates, that's 700 00:33:37,440 --> 00:33:39,880 Speaker 2: I'm sorry, I can copy from Kayley's paper in here. 701 00:33:41,120 --> 00:33:43,400 Speaker 2: But if you're eighteen months out on interest rates, that 702 00:33:43,440 --> 00:33:45,719 Speaker 2: would indicate that we're not there yet right, that there 703 00:33:45,840 --> 00:33:47,280 Speaker 2: is more of an impact to come. 704 00:33:48,240 --> 00:33:50,560 Speaker 10: Well, I would have thought so, I mean things if 705 00:33:50,560 --> 00:33:52,760 Speaker 10: you think of that logic a single bank is called 706 00:33:52,880 --> 00:33:56,600 Speaker 10: the forecast to rise and think I mean, in a sense, 707 00:33:56,720 --> 00:33:59,360 Speaker 10: that's what we have to think about. I would like 708 00:33:59,400 --> 00:34:03,320 Speaker 10: to just focus back on some worrying signs. The question 709 00:34:03,560 --> 00:34:05,720 Speaker 10: in a sense, is always the two sets of worrying. 710 00:34:06,080 --> 00:34:09,840 Speaker 10: The seemer confidence predicts recession. The other thing that tells 711 00:34:09,840 --> 00:34:12,920 Speaker 10: you you're in recession particularly is in the labor market. 712 00:34:12,960 --> 00:34:16,160 Speaker 10: And I think very worrying has been the big employment 713 00:34:16,320 --> 00:34:19,320 Speaker 10: drops that you've seen on the household account in the 714 00:34:19,400 --> 00:34:22,479 Speaker 10: last four or five months, even bigger the last six months. 715 00:34:22,600 --> 00:34:25,080 Speaker 10: The declining in and blown on that account is even 716 00:34:25,160 --> 00:34:27,680 Speaker 10: bigger than it was in the last six months in 717 00:34:27,760 --> 00:34:31,920 Speaker 10: twenty oh seven as recession started. So maybe the dream 718 00:34:31,920 --> 00:34:35,719 Speaker 10: world we're in, the positive environment we're in, will continue, 719 00:34:35,800 --> 00:34:40,000 Speaker 10: but there are worrying signs that because that's that in 720 00:34:40,080 --> 00:34:43,280 Speaker 10: a sense, is that is the thing that picks up recession. 721 00:34:43,400 --> 00:34:46,560 Speaker 10: So in a sense that the Fed must always think, well, okay, 722 00:34:46,600 --> 00:34:49,480 Speaker 10: there are worrying signs here. To err on the side 723 00:34:49,480 --> 00:34:52,399 Speaker 10: of actually cutting rates would probably be the right thing 724 00:34:52,520 --> 00:34:56,399 Speaker 10: to do. I probably would, you know, as always known 725 00:34:56,440 --> 00:34:59,960 Speaker 10: as a dove, I would certainly be considering a rate cut. 726 00:35:00,400 --> 00:35:03,600 Speaker 10: I certainly would rule out, as others have suggested, anything 727 00:35:03,600 --> 00:35:05,920 Speaker 10: about a great rise, because the risks I think are 728 00:35:05,920 --> 00:35:08,240 Speaker 10: to the downside and the market. 729 00:35:08,280 --> 00:35:11,840 Speaker 5: See, well, we talked well, Danny, we talked about the 730 00:35:11,920 --> 00:35:14,560 Speaker 5: labor market where you see some concern with the acting 731 00:35:14,640 --> 00:35:17,520 Speaker 5: Labor Secretary here in the US Julie Sue. Just last 732 00:35:17,600 --> 00:35:21,440 Speaker 5: night on Balance of Power. I asked her specifically about wages, 733 00:35:21,480 --> 00:35:23,719 Speaker 5: because she was touting the higher wages that people have 734 00:35:24,040 --> 00:35:26,239 Speaker 5: received in part due to union contracts that have been 735 00:35:26,239 --> 00:35:28,560 Speaker 5: negotiated over the last year, and whether or not that 736 00:35:28,600 --> 00:35:31,640 Speaker 5: could refuel inflation lead to that kind of wage price 737 00:35:31,680 --> 00:35:34,840 Speaker 5: spiral people often talk about. This was her response to 738 00:35:34,880 --> 00:35:35,320 Speaker 5: that question. 739 00:35:36,080 --> 00:35:40,320 Speaker 11: We want to see real wage increases because more money 740 00:35:40,320 --> 00:35:43,080 Speaker 11: in workers' pockets is a good thing. More money in 741 00:35:43,120 --> 00:35:46,000 Speaker 11: the you know, at the kitchen table, right where families 742 00:35:46,040 --> 00:35:48,719 Speaker 11: are making hard decisions about what they're gonna buy and 743 00:35:48,800 --> 00:35:51,120 Speaker 11: how to you know, how to write, how to how 744 00:35:51,160 --> 00:35:53,319 Speaker 11: to live a secure life. You're never gonna hear me 745 00:35:53,400 --> 00:35:56,440 Speaker 11: say that making sure that working people get what they 746 00:35:56,480 --> 00:35:58,680 Speaker 11: deserve is a bad thing. I don't think that we 747 00:35:58,760 --> 00:36:03,440 Speaker 11: have to choose between people families paying prices that they 748 00:36:03,440 --> 00:36:06,400 Speaker 11: can afford and getting wages that are going to allow 749 00:36:06,440 --> 00:36:09,240 Speaker 11: them to feel some security. It's a false choice. 750 00:36:10,440 --> 00:36:13,320 Speaker 5: So she says, it's a false choice, Danny. She also 751 00:36:13,360 --> 00:36:15,080 Speaker 5: went on to tell us that what we're seeing in 752 00:36:15,120 --> 00:36:18,920 Speaker 5: the labor market is the very definition of a soft 753 00:36:19,000 --> 00:36:21,319 Speaker 5: landing that there doesn't need to be a decision made 754 00:36:21,320 --> 00:36:24,759 Speaker 5: between getting inflation under control and potentially breaking the labor market. 755 00:36:24,840 --> 00:36:27,200 Speaker 5: To what extent is that actually true. 756 00:36:28,160 --> 00:36:32,239 Speaker 10: Well, I think that you've started to see some real 757 00:36:32,280 --> 00:36:35,279 Speaker 10: wage growth, and obviously that's a good thing. And I 758 00:36:35,320 --> 00:36:38,440 Speaker 10: think the contrast to the wage price spiral we saw 759 00:36:38,520 --> 00:36:42,319 Speaker 10: in the past was when there were union contracts that 760 00:36:42,440 --> 00:36:47,120 Speaker 10: built in escalator clause. It's automatic escalator clauses, it's inflation. 761 00:36:47,200 --> 00:36:49,560 Speaker 10: We haven't really seen any of that. We've seen a 762 00:36:49,560 --> 00:36:54,439 Speaker 10: little bit emergence of work of power as economies have strengthened, 763 00:36:55,080 --> 00:36:57,120 Speaker 10: and we've seen a little bit of a pickup in 764 00:36:57,160 --> 00:37:00,160 Speaker 10: strike activity across the United States, but I don't think 765 00:37:00,160 --> 00:37:03,480 Speaker 10: there's any evidence of a wage price spiral, and economies 766 00:37:03,600 --> 00:37:05,799 Speaker 10: take a little time to move. The balance of power 767 00:37:05,840 --> 00:37:09,080 Speaker 10: between labor and capital has swung over the last two 768 00:37:09,120 --> 00:37:12,239 Speaker 10: decades so strongly in the favor of capital it would 769 00:37:12,239 --> 00:37:15,399 Speaker 10: be hard to tell people Aha, a slight movement back 770 00:37:15,400 --> 00:37:18,560 Speaker 10: towards labor means that the central bank has to plunge 771 00:37:18,600 --> 00:37:21,680 Speaker 10: in again and make workers worse off. Certainly not something 772 00:37:21,680 --> 00:37:24,279 Speaker 10: in the sense that you'd expect the Biden administration to 773 00:37:24,320 --> 00:37:27,080 Speaker 10: want to see so I think it is really sitting 774 00:37:27,560 --> 00:37:31,880 Speaker 10: holding with expectations that perhaps we will see worsening in 775 00:37:31,960 --> 00:37:34,839 Speaker 10: labor markets, worsening in other things, and the Central Bank 776 00:37:35,400 --> 00:37:38,319 Speaker 10: will have to cut rates, not least because of what's 777 00:37:38,360 --> 00:37:39,840 Speaker 10: going on in the world. Look at what's gone on 778 00:37:39,920 --> 00:37:42,480 Speaker 10: in China. China has just seems to have just come 779 00:37:42,480 --> 00:37:45,239 Speaker 10: out of a deflation situation. But the rest of the 780 00:37:45,280 --> 00:37:49,800 Speaker 10: world is looking at America as a fine place in 781 00:37:49,920 --> 00:37:51,920 Speaker 10: the economy doing well. The last thing they want to 782 00:37:51,920 --> 00:37:53,120 Speaker 10: do is make another error. 783 00:37:54,320 --> 00:37:56,920 Speaker 2: We're talking about today's CPI data and the economy with 784 00:37:57,080 --> 00:38:01,440 Speaker 2: Danny Blanchflower. Lastly, Danny as prices. A big part of 785 00:38:01,480 --> 00:38:05,680 Speaker 2: this CPI report is that the wild card that will 786 00:38:05,719 --> 00:38:10,760 Speaker 2: tell whether Joe Biden has a good economy to tout 787 00:38:11,040 --> 00:38:12,360 Speaker 2: by the end of this campaign. 788 00:38:12,520 --> 00:38:15,120 Speaker 10: Well, I mean, oil prices are a pretty tough one 789 00:38:15,160 --> 00:38:17,480 Speaker 10: to forecast. Given the stuff that's going on in the 790 00:38:17,480 --> 00:38:23,800 Speaker 10: Persian Gulf and the problems that are there. The ability 791 00:38:23,840 --> 00:38:26,760 Speaker 10: to control the global oil price is pretty It's pretty 792 00:38:26,840 --> 00:38:29,360 Speaker 10: Despite what Donald Trump and others say, the President of 793 00:38:29,400 --> 00:38:32,200 Speaker 10: the United States doesn't actually control the global The global 794 00:38:32,200 --> 00:38:35,560 Speaker 10: oil price it's called a global price, and global shocks 795 00:38:35,640 --> 00:38:38,239 Speaker 10: impact it. So I think we'll see. I think that's 796 00:38:38,239 --> 00:38:41,359 Speaker 10: obviously if there was to be a considerable spike in 797 00:38:41,400 --> 00:38:43,680 Speaker 10: the you know, in oil, that would be bad because 798 00:38:43,680 --> 00:38:46,600 Speaker 10: it would be it would impact people, even impact their 799 00:38:46,640 --> 00:38:48,520 Speaker 10: spending because they have to spend more at the pump. 800 00:38:48,760 --> 00:38:50,719 Speaker 10: So yes, I think it's something that you really want 801 00:38:50,760 --> 00:38:53,759 Speaker 10: to be mindful for. But again, once off spikes of 802 00:38:53,880 --> 00:38:56,560 Speaker 10: the oil price and not something that the central bank 803 00:38:56,600 --> 00:39:01,000 Speaker 10: should respond to. It's once off things just will They'll 804 00:39:01,040 --> 00:39:03,880 Speaker 10: spike today, they'll have an effect on inflation today, and 805 00:39:03,960 --> 00:39:06,680 Speaker 10: in twelve months time they'll drop away. But you know, 806 00:39:07,560 --> 00:39:10,240 Speaker 10: these are complicated issues. The central bank has done pretty 807 00:39:10,280 --> 00:39:12,680 Speaker 10: dumb well. I didn't think the economy would be doing 808 00:39:12,760 --> 00:39:15,160 Speaker 10: as well. In a sense, I've been more of a 809 00:39:15,200 --> 00:39:17,560 Speaker 10: doom merchant than I probably should have been. But we'll 810 00:39:17,600 --> 00:39:22,319 Speaker 10: see going forward. Everything rose with an election coming. 811 00:39:23,880 --> 00:39:26,040 Speaker 5: Well, that is the exact place I wanted to go 812 00:39:26,080 --> 00:39:29,000 Speaker 5: with you, Danny, because sure, monetary policy definitely has an 813 00:39:29,000 --> 00:39:31,839 Speaker 5: influence on the economy, but fiscal policy does as well. 814 00:39:31,840 --> 00:39:34,520 Speaker 5: And actually, in the statement that President Biden put out 815 00:39:35,000 --> 00:39:37,840 Speaker 5: addressing today's CPI report, saying there is more work to 816 00:39:37,840 --> 00:39:40,640 Speaker 5: do to bring crisis down. He said, Look, I requested 817 00:39:40,680 --> 00:39:42,640 Speaker 5: a lot of this in my budget, and as we 818 00:39:42,719 --> 00:39:44,279 Speaker 5: heard in the State of the Union last week, the 819 00:39:44,320 --> 00:39:47,760 Speaker 5: idea that he wants to see, you know, tax breaks 820 00:39:47,760 --> 00:39:52,320 Speaker 5: for people who own homes within certain income groups, child care, 821 00:39:53,320 --> 00:39:56,160 Speaker 5: universal pre K, these kinds of things that may not 822 00:39:56,239 --> 00:39:59,920 Speaker 5: actually become reality, but he's at least asking for them. 823 00:40:00,000 --> 00:40:03,920 Speaker 5: I'm coupled with higher taxes on the renchin on companies. 824 00:40:03,960 --> 00:40:05,680 Speaker 5: I'm not sure if you've had a chance to look 825 00:40:05,680 --> 00:40:07,720 Speaker 5: through the budget, but how should we be thinking about 826 00:40:07,719 --> 00:40:11,360 Speaker 5: fiscal policies influence on the economy now and going forward 827 00:40:11,400 --> 00:40:14,240 Speaker 5: if some of these things actually do become a reality. 828 00:40:14,960 --> 00:40:19,000 Speaker 10: Well, I think the reality is that the whole series 829 00:40:19,000 --> 00:40:22,680 Speaker 10: of economics papers, particularly from a famous economist called Ray Fair, 830 00:40:22,719 --> 00:40:27,839 Speaker 10: who talked about how elections are won and how important 831 00:40:27,880 --> 00:40:31,680 Speaker 10: the state of the economy is in determining whether the 832 00:40:31,719 --> 00:40:34,719 Speaker 10: incumbent wins or not. So I don't think the administration 833 00:40:34,800 --> 00:40:37,920 Speaker 10: has missed that fact and understands that if people are 834 00:40:37,920 --> 00:40:41,920 Speaker 10: feeling good on the economy, that the incumbent gets the 835 00:40:42,080 --> 00:40:46,239 Speaker 10: credit for it. And oftentimes you'll see even manipulation in 836 00:40:46,239 --> 00:40:49,960 Speaker 10: the sense that the budget disproportionately spent in places that 837 00:40:50,000 --> 00:40:52,840 Speaker 10: the president would like to win himself and for his 838 00:40:52,960 --> 00:40:56,759 Speaker 10: party to win. So you'd expect to see that right now. 839 00:40:57,400 --> 00:41:00,040 Speaker 10: And in some sense the Congress says, well, look, I 840 00:41:00,080 --> 00:41:01,279 Speaker 10: don't want to do that. I don't want to give 841 00:41:01,280 --> 00:41:05,520 Speaker 10: the incumbent help. But that's really where we are. A 842 00:41:05,560 --> 00:41:09,360 Speaker 10: booming economy is good for the incumbent. If the on 843 00:41:09,800 --> 00:41:13,279 Speaker 10: rate rise, inflation rate rises, then the narrative will be 844 00:41:13,360 --> 00:41:15,480 Speaker 10: the president is to blame for it. But in a 845 00:41:15,520 --> 00:41:17,839 Speaker 10: sense he can say, well, look how good the economy is. 846 00:41:18,000 --> 00:41:19,840 Speaker 10: Look how good it is compared to the rest of 847 00:41:19,880 --> 00:41:22,880 Speaker 10: the world. This does look like a rosy scenario. Vote 848 00:41:22,880 --> 00:41:25,760 Speaker 10: for me, and so this is crucial. This is crucial 849 00:41:25,800 --> 00:41:28,120 Speaker 10: not just the scale of the budget, but who it's 850 00:41:28,160 --> 00:41:30,680 Speaker 10: spent on and where it's spent, and you'd expect it 851 00:41:30,680 --> 00:41:33,040 Speaker 10: to be spent disproportionately if the president could have his 852 00:41:33,160 --> 00:41:36,480 Speaker 10: way in places that are for him to win. 853 00:41:38,480 --> 00:41:40,080 Speaker 3: Let you get back to fishing, Danny. 854 00:41:40,520 --> 00:41:42,880 Speaker 2: It's great to see you, Danny Blanche get back with 855 00:41:42,960 --> 00:41:44,760 Speaker 2: us from Dartmouth College. 856 00:41:44,760 --> 00:41:45,480 Speaker 3: I hope you're well. 857 00:41:45,920 --> 00:41:48,319 Speaker 2: Let's keep tabs with Danny as we work our way 858 00:41:48,360 --> 00:41:50,719 Speaker 2: through the cycle. This is kind of interesting as you've 859 00:41:50,719 --> 00:41:52,960 Speaker 2: started this line of questioning now. 860 00:41:52,880 --> 00:41:54,840 Speaker 9: Kaylee, I feel like we check back every couple. 861 00:41:54,680 --> 00:41:57,000 Speaker 5: Of months thee how it feels absolutely as we should, 862 00:41:57,080 --> 00:41:59,760 Speaker 5: especially as we progress into the summer months when potentially 863 00:41:59,800 --> 00:42:03,120 Speaker 5: we're going to be having more realistic conversation about cutting 864 00:42:03,160 --> 00:42:04,960 Speaker 5: back rates. And he seems to be a little bit 865 00:42:04,960 --> 00:42:07,440 Speaker 5: more worried about what's happening in the labor market than 866 00:42:07,520 --> 00:42:08,759 Speaker 5: we opten here here he went. 867 00:42:08,680 --> 00:42:10,080 Speaker 2: Back to it a couple of times without being asked, 868 00:42:10,120 --> 00:42:10,880 Speaker 2: which is important. 869 00:42:11,520 --> 00:42:13,440 Speaker 3: Yeah, we'll find out about that lag. 870 00:42:13,280 --> 00:42:14,800 Speaker 2: Effect when we get into the middle end of the 871 00:42:14,800 --> 00:42:17,160 Speaker 2: summer when it really does count. To Kayley's point going 872 00:42:17,200 --> 00:42:22,799 Speaker 2: into the debates in the general. Thanks for listening to 873 00:42:22,840 --> 00:42:26,239 Speaker 2: the Balance of Power podcast. Make sure to subscribe if 874 00:42:26,239 --> 00:42:28,960 Speaker 2: you haven't already, at Apple, Spotify, or wherever you get 875 00:42:29,000 --> 00:42:32,040 Speaker 2: your podcasts, and you can find us live every weekday 876 00:42:32,040 --> 00:42:35,840 Speaker 2: from Washington, DC at noontime Eastern at Bloomberg dot com.