Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
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Speaker 2: anywhere else you listen, and as always on the Bloomberg
Speaker 2: Terminal and the Bloomberg Business App. David Kelly of JP
Speaker 2: Morgan Asset Management, Tom Porcelli of p JIM Fixed Income Gents,
Speaker 2: Good morning to you, David. First to you. Your reaction, Well,
Speaker 2: I think.
Speaker 3: What we've got is a moderates moderation in the US economy,
Speaker 3: both in terms of growth and inflation. Inflation is it's
Speaker 3: taking a sweet time coming down, but we still think
Speaker 3: it's a downward trend. And I think you know the
Speaker 3: reason for the market reaction is that we didn't get
Speaker 3: enough surprise. So we've now had three reports. Who've had
Speaker 3: the jobs report, then we have the consumer Sentimental Report,
Speaker 3: and now I've had the retail sales, repoard. They're all saying,
Speaker 3: you know, overall things are moderating here. When you look
Speaker 3: at the Jill's number, things are moderating, and we've got
Speaker 3: fewer job opening. So it looks like the economy is
Speaker 3: just easy itself into sort of a two percent card
Speaker 3: or of two percent growth, inflation gradually coming down.
Speaker 4: Towards two percent, And that's very good news.
Speaker 3: And I think the good news is that we didn't
Speaker 3: get another upside surprise in CPI today.
Speaker 2: Does that whisper of a July cut get up a
Speaker 2: little bit louder after this, or is July still too soon?
Speaker 5: I don't know if the whisper, I mean, it's already
Speaker 5: been a whisper. I don't know if it can become less.
Speaker 4: Of a whisper.
Speaker 6: I think it sort of stays where it is.
Speaker 5: Which is to say, you know what, around twenty five percent.
Speaker 5: I think that's probably reasonable. It doesn't go away, though.
Speaker 5: I think that's the important thing on the back of this,
Speaker 5: So I think he'd probably still linger. But I think
Speaker 5: as a practical matter, it's probably going to get pushed
Speaker 5: a little bit. And I have no challenge with that.
Speaker 5: In fact, one of the things that I've actually look,
Speaker 5: I've been sort of critical of Pal when it's been
Speaker 5: mostly deserved.
Speaker 2: But I pushed back around this type.
Speaker 6: But recently I think he's done a good job with
Speaker 6: the narrative, right.
Speaker 5: I think after the last presser and actually the pressure before,
Speaker 5: where he said, hey, look, we're not going to overreact
Speaker 5: to a couple of you know, sort of strong string
Speaker 5: of inflation reports, just like we didn't overreact to a
Speaker 5: really soft string the last go around. So I think
Speaker 5: that this, to me, is a chair who wants to cut.
Speaker 5: I think that, and you can easily see one. And
Speaker 5: I think I think if he has the opening, I
Speaker 5: think he'll do two. And I think data like this,
Speaker 5: if it persists, I think that that'll give him that opening.
Speaker 5: And sorry, I'll meet this one last point. And I
Speaker 5: think David rightly highlighted this. You know, if if you
Speaker 5: look at that control number on retail sales, I mean
Speaker 5: it was pretty weak. And again, no one's making the
Speaker 5: case that we're sort of falling off a cliff here,
Speaker 5: but I think things are slowing down and that'd be
Speaker 5: consistent with.
Speaker 6: The FED having the ability to cut.
Speaker 1: We were just speaking with Ed Yar Denny, and he
Speaker 1: doesn't necessarily have the same kind of sanguine outlick that
Speaker 1: you do with respect to j. Powell, because he says, honestly,
Speaker 1: the consumer is strong that yeah, there was weakness to
Speaker 1: the control group, but it's Mike was saying.
Speaker 2: It has to do with auto sales.
Speaker 1: It's not the sort of broad based people not going
Speaker 1: out and spending things. So at what point, David, do
Speaker 1: you look at that and say, you know what, things
Speaker 1: are fine? Now? Why the rush to cut? I know
Speaker 1: you are in the police cut now and you should
Speaker 1: have already cut camp. Well, why is it not that
Speaker 1: we see things are just fine and you should stay
Speaker 1: in here and only a cut with turbocharge a rally,
Speaker 1: which is exactly the reaction we're getting today.
Speaker 4: Well, I think you should normalize interest rates.
Speaker 3: I think the Federal Reserve for a long time has
Speaker 3: been trying to micro manage the economy with race that
Speaker 3: got too low and too high. I think it messes
Speaker 3: with financial markets. And you know, the more the Federal Reserve,
Speaker 3: you know, tease all financial markets, the more financial markets
Speaker 3: sort of act like sort of babies here. I mean,
Speaker 3: you shouldn't have had this much of a reaction. But
Speaker 3: you get this reaction because of because you know, the
Speaker 3: Federal Reserve is so sensitive about saying anything that might
Speaker 3: offend the markets one way or the other than the
Speaker 3: when when you know, when economic numbers are a little
Speaker 3: bit off one way.
Speaker 2: There, I just say that reaction function is set up
Speaker 2: for us to be hind.
Speaker 4: I think market markets have an over reaction function. That's
Speaker 4: the problem. And so market does.
Speaker 3: Overreact and so the Federal Reserve you kind of have
Speaker 3: to expose the markets to normal policy, normal policies. If
Speaker 3: the economy is doing okay, rates ought to get back
Speaker 3: to normal levels. And I do think, you know, I
Speaker 3: don't think July, but I do think September is possible.
Speaker 3: It's it's there, and I think one of the I
Speaker 3: think j Powe himself will actually make a decision as
Speaker 3: he heads towards this about whether he wants it himself,
Speaker 3: because the one thing that we've seen about Jay Powell
Speaker 3: which is very clear, is he wants to build consensus
Speaker 3: and he works hard and actually lobbying. I wouldn't say
Speaker 3: lobbing necessary is the right word, but he does talk.
Speaker 3: I think it's amazing that he talks to all nineteen
Speaker 3: participants in the fmc C meeting before the meeting and
Speaker 3: just you know, this is my view and so forth,
Speaker 3: and that's why he's been able to get so much consensus.
Speaker 3: So if he thinks that, look, let's get going on
Speaker 3: a slow rate cut cycle before the election, so you know,
Speaker 3: and let's let's get it going here so we can't
Speaker 3: be accused of playing politics, I think I think he
Speaker 3: might well do that in September.
Speaker 6: To No, I agree.
Speaker 5: I think David is completely spot on. Look, I think
Speaker 5: this is just a recalibration cycle. You know, this is
Speaker 5: not you know, people here cuts, and I think that
Speaker 5: immediate immediately conscious of the images of the FED like
Speaker 5: getting aggressive, like, we don't think that that's the case.
Speaker 5: We think that this is going to be a sort
Speaker 5: of a very modest reduction in funds.
Speaker 1: But talking about markets as baby his babies, right, this
Speaker 1: question of how they react react has been basically a
Speaker 1: feature and not a book of financial policy. This was
Speaker 1: the transmission mechanism we've been talking about.
Speaker 4: This also, how much do we get a.
Speaker 1: Rally on the on the idea that we're going to
Speaker 1: get a cut, And that's going to be a problem.
Speaker 6: It's going to set us back further and.
Speaker 1: Actually cause this to be more of a problem and
Speaker 1: more sticky.
Speaker 3: Well, I think the Federals, Federal you know, the Federal Reserve,
Speaker 3: makes a big deal about how they don't lack politics
Speaker 3: over overall what they're doing. They should also do the
Speaker 3: same thing about market reactions.
Speaker 4: So they should not overreact.
Speaker 3: To how the market reacts to either economic numbers of
Speaker 3: their own policy. But also what they need to do
Speaker 3: is and I completely agree with you on a recalib
Speaker 3: calibration here, because what they just talk about is not
Speaker 3: monetary easing, but monetary normalization. The truth is, I don't
Speaker 3: think that we're heading into a you know, a higher
Speaker 3: for longer environment. I think we're heading into a normal,
Speaker 3: for longer environment. There's nothing there's nothing wrong with four
Speaker 3: and a half percent on a.
Speaker 4: Ten year treasury That's actually about right.
Speaker 3: Given two percent normal for Fed funds, I think, I
Speaker 3: personally think normal for Fed funds is somewhere between three
Speaker 3: fifty and four. I mean, in the fifty years before
Speaker 3: the financial crisis it was two percent above core CPI inflation.
Speaker 4: That would be four in the long run.
Speaker 3: I think, you know, someone three fifty three, seventy five
Speaker 3: to for me?
Speaker 6: Bet right, No, I mean I just found my new
Speaker 6: best friend.
Speaker 2: I love carry on.
Speaker 6: No, I think I.
Speaker 5: Yes, I agree, I mean I think that's I think
Speaker 5: it's exactly quite right. I think that this, to me
Speaker 5: is I think this is the right way of thinking
Speaker 5: about about where we're going. I think, you know, three
Speaker 5: and a half to four percent is probably the right range.
Speaker 6: To consider this in.
Speaker 5: And you know the good thing about that is, you
Speaker 5: know that is that that is roughly what the market
Speaker 5: is expecting. So I don't think that there has to
Speaker 5: be some big recalibration as it leads to the market,
Speaker 5: because expectations seem to be roughly right, although the market
Speaker 5: has tended to take things way too far.
Speaker 6: Let's be honest on that.
Speaker 2: We'll get to the market right now. Equity features are
Speaker 2: positive off the back of this economic data. I know
Speaker 2: a few of you just tuning in, this is what
Speaker 2: you miss. Zero point three percent is the number for CPI.
Speaker 2: Zero point four was the estimate on a headline basis,
Speaker 2: stripping out food and energy zero point three against an
Speaker 2: estimate of zero point three. The rustle out perform and
Speaker 2: a small caps up by one point four percent. Thank
Speaker 2: you to the bond market, treasuries running and yields drop
Speaker 2: in across the curve. The two yet down about seven
Speaker 2: basis points now to four seventy four. Mike McKee, still
Speaker 2: alongside us, Mike, you've had longer to read through this.
Speaker 2: What stands out now?
Speaker 7: Well, A couple of the categories that people watch closely
Speaker 7: perform pretty much as expected, in that used cars were
Speaker 7: down one point four percent, insurance health insurance only up
Speaker 7: three tenths of eight percent, but unfortunately auto insurance still
Speaker 7: posting a big gain one point eight percent, down a
Speaker 7: little bit from last month, but still an our size gain.
Speaker 7: And John, you had a probably good discount on your
Speaker 7: trip to Paris this week because airfares were down eight
Speaker 7: tenths of eight percent, which is.
Speaker 6: Kind of interesting because the CPI tends to.
Speaker 7: Include what people are buying for vacation time ahead. So
Speaker 7: we'll see if airline fars can continue to behave.
Speaker 2: Just for the record, it was Taylor Swift weekend in Paris,
Speaker 2: and I booked the flight I think a day before
Speaker 2: I got it, So Mike McKay, that was not cheap
Speaker 2: at all. Just for the record, did you.
Speaker 4: Enjoy the concert?
Speaker 2: I didn't get to watch the concept, but it was
Speaker 2: very busy. Can you imagine me a Tyler Swift conw
Speaker 2: Mohammed went, I know, Mohamma's going to be in a
Speaker 2: program on Friday.
Speaker 1: Great pink, fantastic.
Speaker 6: It was amazing.
Speaker 2: Did he really think he wouldn't be seen on that
Speaker 2: T shirt?
Speaker 6: Oh?
Speaker 8: I know he's now a swifty.
Speaker 2: Mohamma's going to join us Friday for a review of
Speaker 2: the economic data and apparently a review of the Taylor
Speaker 2: Swift performance in Paris, France over the weekend. David Kelly,
Speaker 2: I want to come back to the Federal Reserve, certainly
Speaker 2: not on Tyler Swift. You've said repeatedly that the Federal
Speaker 2: Reserve should just have faith in the calendar. This is
Speaker 2: going to work its self foul for the next twelve months,
Speaker 2: regardless of how restrictive they think they are. Is that's
Speaker 2: still your stunce.
Speaker 4: Absolutely.
Speaker 3: If you look at airline fares, I mean, you know,
Speaker 3: we've got we've actually got to air travel back above
Speaker 3: pre pandemic levels.
Speaker 4: There's plenty of.
Speaker 3: Demand out there, but the airline industry is competitive enough
Speaker 3: for airline fers to come down. But overall, you know,
Speaker 3: in some areas of services and throughout the goods industries.
Speaker 3: What we're seeing is enough competition to gradually push inflation down.
Speaker 3: So this is not an inflationary economy. The only time
Speaker 3: it's an inflationary economy is when you have a huge
Speaker 3: supply chain disruption and you have huge fiscal stimus where
Speaker 3: you're giving money to low and middle income households. That
Speaker 3: is the one way you can generate long stant or
Speaker 3: significant inflation year. Once you take that away, inflation will
Speaker 3: gradually drift down, and that's exactly what it's doing.
Speaker 4: It's just very gradual. Tom.
Speaker 9: Do you think a lot of this market reaction though,
Speaker 9: is actually the CPI or the retail sales because CPI
Speaker 9: is pretty much in line. Retail sales was much softer.
Speaker 5: Yeah, I mean, you know, it could also be a
Speaker 5: sort of a better than feared because as we were saying,
Speaker 5: I think before we were on camera, you know, could
Speaker 5: have easily been a four tenth. So I think it
Speaker 5: could be some of some of that for for sure.
Speaker 5: You know the thing too about inflation, I just think, look,
Speaker 5: I don't know about the wisdom of stripping out an
Speaker 5: assortment of different things, like you know, super core, I mean,
Speaker 5: you're stripping out fifty percent or more of the weight
Speaker 5: of inflation, which I look, I have no problem stripping
Speaker 5: things out of inflation. But what I would say is,
Speaker 5: if you want to do that, then go the next step, right,
Speaker 5: because what we know is that auto insurance has been
Speaker 5: a thorn in the side of inflation. That is, there's
Speaker 5: nothing the FED can do about that, and if you
Speaker 5: strip that out, inflation looks even a little bit better.
Speaker 5: So to me, that's the Just keep in mind there
Speaker 5: are some idiosyncratic sort of sectors that are really impacting
Speaker 5: inflation that the FED has no ability to control. So
Speaker 5: in that context, I think it's even better.
Speaker 3: And also, I mean, the FED have a good reason
Speaker 3: sets a target of two percent, but no conomists will
Speaker 3: honestly tell you there's a big difference between one or
Speaker 3: two and three. You know, so long as you're there
Speaker 3: or thereabouts, you know you're okay. And then what you
Speaker 3: do is do no evil, do not do or financial
Speaker 3: markets by having rates at a significantly incorrect level.
Speaker 9: So then should the that just be targeting two to
Speaker 9: three percent?
Speaker 3: Well, in Canada they have a range of one to
Speaker 3: three percent, and I kind of like the idea of
Speaker 3: a range of one to three percent as a target.
Speaker 4: We get in that range, we're fine.
Speaker 5: I totally agree. In fact, I always used the RBA.
Speaker 5: I know it is terrible.
Speaker 2: I'm sorry for you all the weight condemn.
Speaker 6: It was using Canada. I've used the RBA as a
Speaker 6: great example.
Speaker 5: The RBA has a range, and I think a range
Speaker 5: is a saying two point zero percent to me, like
Speaker 5: just strikes me as like the pinnacle of hubris. I mean,
Speaker 5: like you rarely see it at two point zero percent
Speaker 5: for any period of time. I think a range is
Speaker 5: really the right way of thinking.
Speaker 3: And it actually caused tremendous problems last decade because they
Speaker 3: kept raids way too low for way too long as
Speaker 3: they were trying to get inflation up to that two
Speaker 3: percent target, and that fueled a lot of the asset
Speaker 3: bubbles and real estate bubbles that they were now suffering from.
Speaker 1: So anyone who took the survey, the University of Michigan
Speaker 1: survey last Frido was listening to this, says, what are
Speaker 1: they talking about? They're in goldilocks land. Everything is amazing.
Speaker 1: It's going to be a great economy. Stocks are going
Speaker 1: to keep rallying. We can sustain this. J Powell is great.
Speaker 1: Where is the disconnect here between the important Okay.
Speaker 5: Yeah, sorry, So it's an important idea. I think about
Speaker 5: like my parents, right who having the foggiest idea what
Speaker 5: I do for a living?
Speaker 6: I mean, after me trying to explain it to them.
Speaker 5: But you know when I when I tell them, when
Speaker 5: I tell them, look, you know inflation is because they
Speaker 5: was asking what's happening when inflation's like, oh, it's improving,
Speaker 5: you know, not to fear.
Speaker 6: And my father loves to say, like, what the hell
Speaker 6: are you talking about.
Speaker 5: He's like, I'm going to the store. I'm still paying
Speaker 5: a lot more for stuff. And that's the disconnect between
Speaker 5: Main Street and Wall Street. Like we look at the
Speaker 5: percent change and they look at price level terms, and
Speaker 5: price level terms, it's still incredibly elevated. And that's a problem,
Speaker 5: by the way, from a consumption perspective, because a lot
Speaker 5: of these things are fixed costs, like auto insurance or
Speaker 5: like food prices that will actually continue to chew into
Speaker 5: disposable income.
Speaker 1: Okay, that's been basically the theory.
Speaker 3: I have to say, you need to fade that University
Speaker 3: of Michigan Sentiment Index surprise because they had a change
Speaker 3: in methodology and they started they're starting interviewing people on
Speaker 3: the web as opposed on the phone.
Speaker 4: And apparently people I've.
Speaker 2: Been waiting for that cod for agous.
Speaker 8: Lucky people.
Speaker 3: Well, yeah, exactly exactly one that now you get. You
Speaker 3: get asked on the web and apparently you're more gloomy
Speaker 3: when you look on the screen.
Speaker 9: How antiquated is callings on the phone?
Speaker 4: No problem, no problem at all.
Speaker 2: But the problem.
Speaker 3: But the problem is that they moved, they changed methodology,
Speaker 3: and they didn't do a level adjustment for the bias
Speaker 3: that they know it's actually causing their data. They put
Speaker 3: something out, I mean, it's this is really technical.
Speaker 2: But just it's not what's going to happen. They filed answers.
Speaker 2: I think inflations can be twenty percent if they.
Speaker 3: Don't, If they don't do a fix to this, the
Speaker 3: University of Michigan survey will be about six point six
Speaker 3: percentage or index points below where it was a few
Speaker 3: months ago forever. So so it's it just this change
Speaker 3: in methodology actually messes up the number. So I know,
Speaker 3: if it gets excited for a number of misses consensus
Speaker 3: by a loss and that.
Speaker 4: Happened, but it was just a technical technical web.
Speaker 5: You're again just the Apple fire. I mean, just keep
Speaker 5: in mind, for whatever the confidence numbers are worth. Confidence
Speaker 5: has been pretty downbeat, yet spending has been pretty robust
Speaker 5: on relative basis.
Speaker 6: Right, So we're feeders of the Michigan numbers. Two But
Speaker 6: I think now, yeah.
Speaker 5: Exactly, but I think, but I think the the inflation
Speaker 5: expectations numbers within Michigan I think are really useful.
Speaker 2: Sometimes it's nice to get along chance. This was great,
Speaker 2: Thank you. Alongside David Kelly, f JP Morgan, President Biden
Speaker 2: unfanning a sweeping new round of tariffs on Chinese imports
Speaker 2: ahead of the November election. The decision looks to escalate
Speaker 2: measures first put in place by former President Donald Trump.
Speaker 2: The former House Speaker Kevin McCarthy joins US now speak, McCarthy,
Speaker 2: go to see you, good to see you, great to
Speaker 2: catch up, sir. What did you think of that from
Speaker 2: President Biden? Did Biden just out Trump? Trump?
Speaker 8: No, he can't do that.
Speaker 10: I mean, Biden opposed these terrorists will four and I
Speaker 10: actually believe when it was only Nixon can go to China.
Speaker 10: I think a Republican administration always has a better relationship
Speaker 10: with China and a stronger one. We've watched in this
Speaker 10: current administration. They've created like an access of evil with Russia,
Speaker 10: Iran and China, something we haven't seen since the nineteen thirties.
Speaker 8: And you know, there's an interesting.
Speaker 10: Piece by Henry Kissinger before he passed in Graham Allison
Speaker 10: seventy nine, seventy nine and nine seventy nine years since
Speaker 10: a Great War, seventy nine years since a nuclear weapon
Speaker 10: was used, and only nine countries with the potential of
Speaker 10: a nuclear which in the seventies you thought there would
Speaker 10: be twenty five or thirty.
Speaker 8: That doesn't just happen.
Speaker 10: So foreign policy really matters. The world is in a
Speaker 10: different place that they're looking for a strong kind of
Speaker 10: American Western leadership, and I think that's the challenges that
Speaker 10: we have. And Biden's decision in Afghanistan and what he's
Speaker 10: just doing with Israel, it's really harming the world known
Speaker 10: in America, and I think greater stability will go a.
Speaker 9: Long way when it comes to China. Though Biden and
Speaker 9: Trump are largely on the same path. Trump is talking
Speaker 9: about sixty percent tariffs on imports coming from China on
Speaker 9: top of potentially a ten percent tariff wall for all imports.
Speaker 8: Isn't that trajectory?
Speaker 9: Isn't that the only place you know this well that
Speaker 9: there's bipartisanship in Washington.
Speaker 8: When it comes to China, well, you want to look
Speaker 8: at it.
Speaker 10: Trump's policies on China he believed long before he was
Speaker 10: ever elected. Biden has flipped his position on China in
Speaker 10: the last year, So it's kind of what you believe.
Speaker 10: And I think in China's position, China always looks long term,
Speaker 10: so if they have somebody in there with a strong position,
Speaker 10: you usually can negotiate something there.
Speaker 8: I believe, and I.
Speaker 10: Think looking at the New York Times latest polling Trump
Speaker 10: election is today, Trump would win it probably pretty big.
Speaker 10: Republicans would have a very big night that you would
Speaker 10: have an agreement with China. You might think there's another tension,
Speaker 10: you'll get a lot of good news for a while,
Speaker 10: but I think we would be in a much stronger
Speaker 10: place because there'd be greater respect on each side, and
Speaker 10: that's where you could come to an agreement.
Speaker 8: But an agreement on what I think you could get a.
Speaker 10: Lot of places on agreement on trade, agreement on the
Speaker 10: movement of China and Russia and Iran. I think China
Speaker 10: moving into the Middle East, bringing Iran and Saudi Arabia together,
Speaker 10: you wouldn't see that as much anymore. I think America
Speaker 10: would take back the place that they've stood before.
Speaker 9: So you were at the former president last night according
Speaker 9: to photos I saw online. What are you hearing from
Speaker 9: him and his team about what two point zero would
Speaker 9: look like? Would that also maybe include someone like yourself.
Speaker 10: Look, you never prejudge where it is, but I think
Speaker 10: the president is very upbeat.
Speaker 8: You look at what he's going through. Interesting thing.
Speaker 10: I think the White House has taken a position, and
Speaker 10: almost every position they're taking is all political, like this
Speaker 10: China position, Israel position.
Speaker 8: What he's looking at.
Speaker 10: And I mean, if you look at Biden in the
Speaker 10: last elections, and you're a station that plays with numbers,
Speaker 10: Biden won the election by forty eight nine and eighteen votes,
Speaker 10: but his favorability.
Speaker 8: Rating at that time was plus ten. Now it's minus twenty.
Speaker 10: You've got six states that are swing states and Trump
Speaker 10: has been leading in.
Speaker 8: Five of them for like fourteen months.
Speaker 10: And now Minnesota, which a Republican has not won since
Speaker 10: nineteen seventy two, when Ronald Reagan swept forty nine states.
Speaker 10: He didn't win Minnesota, but now it's a tie within Minnesota.
Speaker 10: So it's a much different play going forward. And I
Speaker 10: think their position they thought going after Trump in a
Speaker 10: judicial way would help them, I think it's hurt them.
Speaker 8: You also see independence now.
Speaker 10: I mean, by a margin of fifty three to forty two,
Speaker 10: Independents believe another four years of Biden will harm democracy,
Speaker 10: and they say democracy is on the ballot. So it's
Speaker 10: interesting what they had planned out. And my advice to
Speaker 10: the Biden administration, if you're in denial, you're not going
Speaker 10: to solve your problems, and they're kind of in denial of.
Speaker 8: The problems they have.
Speaker 9: Can I just ask you follow up though you didn't
Speaker 9: answer my question, would you consider going into a Trump administration?
Speaker 10: Look, I would consider to serve anywhere if I'm the
Speaker 10: best person. I think in America we need the best
Speaker 10: and brightest. But I think that's the last thing you
Speaker 10: look at. You want to lay out, make sure it's
Speaker 10: good policies. You want an election to be about policies
Speaker 10: and ideas, then people can govern in a better way.
Speaker 1: I want to try to strip away some of the
Speaker 1: politics from the policy and try to understand looking forward,
Speaker 1: you talk about under a Trump administration this idea of
Speaker 1: some agreement with China. I'm more focused on Europe, frankly,
Speaker 1: because under a Trump administration it was America go to loone,
Speaker 1: America first going out of NATO, really pressuring the.
Speaker 6: European Union to do more.
Speaker 1: How much is that going to be basically the state
Speaker 1: of play going forward, and then a Republican administration at
Speaker 1: a time where a lot of people are saying, you
Speaker 1: need an alliance to really counter some of these threats
Speaker 1: that you're talking about.
Speaker 10: That's a great question we should look because now we
Speaker 10: have time to compare what transpired in the Trump administration
Speaker 10: and what happened now was Trump tough with NATO? Yeah,
Speaker 10: but now you're watching the European nations actually spend more
Speaker 10: what they had promised to do on their defense, which
Speaker 10: they hadn't time.
Speaker 8: But let me answer your question. Okay, Now what you had,
Speaker 8: you didn't have war in Europe.
Speaker 10: For the first time in any American administration in modern history.
Speaker 10: Putin had not invaded another country. Now we have warn there.
Speaker 10: But let me finish your answer to your question. You
Speaker 10: have five American embassies that have now had to be evacuated.
Speaker 10: We now have a base in Africa where the Russians
Speaker 10: are now coming into, where you.
Speaker 8: Have a thousand US troops leaving out. It's the place
Speaker 8: we use our drones and others.
Speaker 10: So I know what the topic is and maybe the
Speaker 10: brushness of Trump's message, but we actually had positive returns
Speaker 10: within there. So it's a difference of opinion whether you
Speaker 10: like the headlines or not, but you really have actual
Speaker 10: facts on the basis of what a Biden administration looks
Speaker 10: like in Europe and what a Trump administration looks although
Speaker 10: there are long and.
Speaker 1: Variable lags with a lot of policies, so it's hard
Speaker 1: to identify exactly where some of the games come from depending.
Speaker 10: On who you've had the Abraham Accords, which I believe
Speaker 10: people should have got a Nobel Peace Prize over, But
Speaker 10: had Biden embraced the Abraham Accords, I don't think you
Speaker 10: would have had October seventh, My.
Speaker 1: Question was with Europe and particularly on the commercial side
Speaker 1: of things.
Speaker 6: Because what we hear from a lot of executives is.
Speaker 1: They don't know how to even shape policy given they
Speaker 1: don't understand what the policy in the US is going
Speaker 1: to be two European goods. Are they going to start
Speaker 1: to put up walls to those two to try to
Speaker 1: really enhance the industrial production of the United States?
Speaker 8: Are they going to work together?
Speaker 1: Is there going to be cohesiveness at a time where
Speaker 1: France seems to open to the idea of accepting electric
Speaker 1: vehicles from China? How does a Trump administration deal with
Speaker 1: issues given the fact that a lot of people say,
Speaker 1: we need these alliances in order to actually win on
Speaker 1: some of these issues.
Speaker 10: Well, I think we have strong alliances. I remember the
Speaker 10: Trump administration. I was there with McCrone in the White House.
Speaker 10: I mean, look, every country is going to want to
Speaker 10: compete with one another. I think what America wants to
Speaker 10: see is a level playing field. It's a disadvantage if
Speaker 10: America starts further behind and France. They want to have
Speaker 10: a level playing field. But every country is going to
Speaker 10: compete in different ways. And I just believe at the
Speaker 10: end of the day, you will find the policies we
Speaker 10: had under the Trump administration the policies we have today.
Speaker 10: America didn't have inflation, we were stronger around the world,
Speaker 10: incomes were rising, and what you're finding in the new
Speaker 10: York Times Polls America sees that too, And I think
Speaker 10: the number one issue people are going to drive is
Speaker 10: going to be inflation the border. Are they going to
Speaker 10: be the two largest drivers of this election?
Speaker 2: You don't think the birth control and abortion are going
Speaker 2: to be a big factor as well.
Speaker 10: I do think it'll be, but it'll be in certain spots.
Speaker 10: It was a big factor in the last election. But
Speaker 10: remember this, I mean you also look to what's going
Speaker 10: to happen in the Senate and what's going to happen
Speaker 10: in the House. I was leader for five years, and
Speaker 10: every single cycle when I was leader, Republicans picked up seats,
Speaker 10: even though Republicans lost everywhere else. When Biden was on
Speaker 10: the ticket, it was the first time since nineteen ninety
Speaker 10: four not one Republican in the House lost. And the
Speaker 10: last election, abortion was a very big issue. But as leader,
Speaker 10: I picked up five seats in New York and five
Speaker 10: seats in California. You would say abortion would be the
Speaker 10: top issues there. So I believe in pockets, Arizona could
Speaker 10: be an issue, Florida could be an issue, but.
Speaker 8: I think it'll be more in a pocket than it
Speaker 8: will be national.
Speaker 6: You talk about your leadership.
Speaker 9: Speaker Johnson had eleven Republicans vote to oust him, You
Speaker 9: only had eight Democrats came to save him. Are the
Speaker 9: Democrats in charge of the House at this point?
Speaker 8: Akeem thinks so. I mean he says it on sixty minutes, they.
Speaker 4: Saved Speaker Johnson.
Speaker 9: Look, he actually had more Republicans vote against him than
Speaker 9: you did, but you lost your job.
Speaker 8: That's not right.
Speaker 10: Uh. Look, I don't believe in the motion to vacate.
Speaker 10: I think Democrats play politics on both sides. If they
Speaker 10: didn't think the motion vakate was right, then why did
Speaker 10: they think it? Under me?
Speaker 8: But it is what it is is politics.
Speaker 10: They think they're going to play it for a political
Speaker 10: purpose to win. Republicans have a better chance on winning
Speaker 10: seats this election in the House than they did in
Speaker 10: the last two elections we want, so I think it's
Speaker 10: going to be a big night. You watch what happened
Speaker 10: in the primaries last night in Maryland. Hogan is going
Speaker 10: to make Maryland competitive and what that does it expands
Speaker 10: the playing field. The Republicans are going to win the Senate.
Speaker 10: It's a simple math question. The presidential election, it's still
Speaker 10: up in the air, but you look at every polling today,
Speaker 10: Trump is in the lead and Biden's doing nothing to
Speaker 10: change that. In the House, there's a better opportunity for Republicans.
Speaker 10: The only challenge and advantage the Democrats have is they're
Speaker 10: beating us now on money rather largely, and that will
Speaker 10: make a difference.
Speaker 2: I've got about ten seconds left. Can you give us
Speaker 2: a ninth VP? What do you think? Who would you
Speaker 2: like to see in that seat?
Speaker 10: Look, there's some great people and I sat with like Tim. Look,
Speaker 10: I think Jim Scott is great.
Speaker 8: I think our governor in North Dakota is.
Speaker 6: Excellent, Nick Hyley.
Speaker 10: Look, if he picked Nicki Hayley, I would say the
Speaker 10: race is over. Yeah, I think the race is over
Speaker 10: if you look at the primaries, even India.
Speaker 2: To the break, now, Kevin, we've got to go speak McCarthy.
Speaker 2: Thank you, sir. This is the Bloomberg Surveillance Podcast, bringing
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