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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: noon and five pm Eastern on Apple, Cockley and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: This is a difficult period of time for financial markets,

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Speaker 2: in a perfect time for us to be speaking with

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Speaker 2: President Trump's economic advisor in the Council of Economic Advisors

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Speaker 2: where he works as Chairman. Stephen Myron joins from the

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Speaker 2: north lawn of the White House on Jobs Day. As

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Speaker 2: a matter of fact, mister chairman, welcome back to Bloomberg

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Speaker 2: TV and Radio.

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Speaker 3: It's great to see you.

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Speaker 2: As we mentioned earlier, this Job's report would be our

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Speaker 2: lead story on any other day with payrolls blowing the

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Speaker 2: doors off. But after everything we have seen in the

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Speaker 2: financial markets, and knowing that President Trump has now put

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Speaker 2: forth his plans for tariffs taking effect tomorrow and next week,

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Speaker 2: are these data already old? No?

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Speaker 4: I don't think that data are already old. I mean, look,

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Speaker 4: you know, we're very pleased with the Job's report that

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Speaker 4: we got the economy created two hundred and twenty eight

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Speaker 4: thousand jobs in March. That's roughly twice the amount of

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Speaker 4: jobs that have created in either January or February. In fact,

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Speaker 4: it was such a good month that it was in

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Speaker 4: fact the fourth best month in the last two years

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Speaker 4: for job creation. That's pretty spectacular. And you know, in

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Speaker 4: spite of some headwinds that folks thought would be material headwinds,

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Speaker 4: the President has acted very swiftly and forcefully to close

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Speaker 4: the border and to prevent the surge of and to

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Speaker 4: stem the surge of illegal aliens coming into this country.

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Speaker 4: And lots of folks said, oh, that'll be bad for

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Speaker 4: job growth, right, that'll be bad for job creation. Well,

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Speaker 4: this report proves that that might not necessarily be the case.

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Speaker 4: And so what the report shows is the economy is

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Speaker 4: continuing to grow in spite of the President's variety of policies,

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Speaker 4: and it's a good sign.

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Speaker 5: Well, but this report, mister Chairman, is by nature backward looking.

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Speaker 5: I think the concerned financial markets have today is about

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Speaker 5: the forward looking picture and what the economy is actually

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Speaker 5: going to look like in light of the severe tariffs

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Speaker 5: that are being implemented starting tomorrow, the layoffs of federal

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Speaker 5: workers that the Department of Government efficiency is pursuing. How

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Speaker 5: can you guarantee the labor market will hold up in

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Speaker 5: the face of those challenges.

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Speaker 4: Yeah, thanks, So look, you know, the President acted with

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Speaker 4: historic scope and speed to address what was a decades long,

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Speaker 4: festering problem that had been eroding our competitiveness and eroding

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Speaker 4: our prosperity and eroding our economy. And so, of course

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Speaker 4: there's going to be some market volatility on the back

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Speaker 4: of that. Of course there's going to be some adjustments

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Speaker 4: on the back of that. But on the end of it,

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Speaker 4: you know, things are things are going to be materially better.

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Speaker 4: And I'll tell you why. Not only will the tariffs

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Speaker 4: incent reindustrialization in America and companies coming back to build

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Speaker 4: in America, but there's also two other legs to the

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Speaker 4: stool that are of significant importance. There's the deregulatory agenda,

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Speaker 4: and then there's the tax agenda, and both of those

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Speaker 4: are profoundly stimulative for the economy. And one point that

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Speaker 4: I like to make is that imports are only fourteen

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Speaker 4: percent of the economy. The other eighty six percent of

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Speaker 4: the economy is affected by the entire of the entirety

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Speaker 4: of the agenda. And so that's tax and regulation, and

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Speaker 4: both of us are going to be very important.

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Speaker 2: I'd like to ask you, Stephen, about the comments that

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Speaker 2: we heard from J.

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Speaker 3: Powell a bit earlier today.

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Speaker 2: The Fed chair had this to say about the impact

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Speaker 2: the potential impact of President Trump's tariff regime.

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Speaker 6: Listen well uncertain. He remains elevated. It is now becoming

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Speaker 6: clear that tariff increases will be significantly larger than expected,

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Speaker 6: and the same is likely to be true of the

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Speaker 6: economic effects, which will include higher inflation and slower growth.

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Speaker 6: The size and duration of these effects remains uncertain.

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Speaker 3: Stephen R.

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Speaker 2: Edward Harrison writes that unless the labor market data deteriorate precipitously,

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Speaker 2: the bond market is going to have to reverse some

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Speaker 2: of its post Liberation Day rally, taking stocks down further

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Speaker 2: in the process. The jobs report today is bad news

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Speaker 2: for stocks and bonds, he says, because we're not going

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Speaker 2: to see lower interest rates anytime soon. Chairman today, suggesting

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Speaker 2: that he is in no hurry even as President Trump

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Speaker 2: puts on truth social that this would be the perfect

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Speaker 2: time to cut interest rates. What is your message to

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Speaker 2: investors when it comes to rates here? Against the backdrop

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Speaker 2: of tariffs.

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Speaker 4: Sure, So first let me be clear that you know,

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Speaker 4: I'm not going to tell the what to do, but

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Speaker 4: I will point out that we lived in experience of

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Speaker 4: tariffs in twenty eighteen twenty nineteen during the president's first term,

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Speaker 4: and there was zero macroeconomic evidence whatsoever that tariffs had

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Speaker 4: any material inflationary impact. In fact, the FED wound up

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Speaker 4: cutting rates on that event. So I think it's important

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Speaker 4: to understand.

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Speaker 5: So we're talking a different scope and scale now, mister Chairman.

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Speaker 5: The tariffs from the last administration are nothing like what

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Speaker 5: we're seeing now.

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Speaker 4: Yeah, the President has acted with historic scope and speed.

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Speaker 4: I agree with that, but we also have to appreciate

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Speaker 4: what's going to be happening on the tax and regulatory front.

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Speaker 4: And I think that one of the most powerful things

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Speaker 4: for determining the supply side of the economy is the

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Speaker 4: regulatory environment. If prices are high and increasing because there's

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Speaker 4: not enough stuff, best way to address that is to

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Speaker 4: make more stuff. That means getting government out of the way,

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Speaker 4: letting firms invest, letting firms build, letting firms produce, and

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Speaker 4: if you make more stuff, you can address not only

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Speaker 4: inflationary pressures, but actually bring some prices down, and I

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Speaker 4: think that that's powerful and arguably much more powerful than

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Speaker 4: any effects of tariffs.

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Speaker 5: But what is the actual lag time between seeing a

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Speaker 5: lesser regulatory burden, seeing tariffs that maybe would incentivize us

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Speaker 5: manufacturing to invest in that capacity, the lag time between

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Speaker 5: the decision to do that and the actual capacity coming

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Speaker 5: online and whatever employment or what have you will come

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Speaker 5: with it. This isn't going to be an automatic thing,

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Speaker 5: right mister chairman.

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Speaker 7: Yeah. Thanks.

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Speaker 4: So that's a great point, which is that you know,

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Speaker 4: the regulatory process and taking away those regulations is a

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Speaker 4: legal process, and that takes some time. And the President

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Speaker 4: has made historic progress in the first two months peeling

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Speaker 4: back regulations, but there's still so much work to do

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Speaker 4: and it'll take some time for us to get that through.

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Speaker 4: And so that's you know, maybe this is part of

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Speaker 4: why there's market volatility because implementing the totality of our

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Speaker 4: plans will take some time. Congress is working on the

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Speaker 4: tax package as we speak. It will take some time

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Speaker 4: to pass it, it will take some time to implement it.

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Speaker 2: We're hearing a lot of concerns about recession. Money managers

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Speaker 2: are pointing their trades toward a recessionary environment, and JP

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Speaker 2: Morgan today increased odds for its recession forecast to sixty percent,

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Speaker 2: up from forty steven.

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Speaker 3: What are yours?

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Speaker 4: Yeah, you know, you know, I'm not a professional forecaster,

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Speaker 4: so I don't necessarily have odds. But what I will

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Speaker 4: say is what I said a moment ago, which is

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Speaker 4: that imports are only fourteen percent of the economy, so

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Speaker 4: you really have to think of, you know, really really huge,

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Speaker 4: really enormous changes, sort of shaking through those things to

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Speaker 4: get to the place where you think a recession is

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Speaker 4: likely as a result of something like this. And as

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Speaker 4: I said before, I think that the president's pro growth

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Speaker 4: policies in the regulatory front, providing further tax relief to

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Speaker 4: American families, extending the tax relief of his twenty seventeen

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Speaker 4: Tax Cuts Jobs Act, I think all of that is

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Speaker 4: profoundly supportive of growth. And I think there's maybe a

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Speaker 4: little bit too much focus on risks from what's going

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Speaker 4: on right now and not enough focus on the pro growth,

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Speaker 4: the pro growth policies that are that are.

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Speaker 3: Receiving on Wall Street. I understood.

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Speaker 2: Don't mean to interrupt sir, but there's a there's a

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Speaker 2: great worry about the negative wealth effect. This market is

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Speaker 2: in free fall right now. We could continue this next

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Speaker 2: week unless there is some change here in the news

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Speaker 2: cycle as we hear about additional retaliatory tariffs. At what

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Speaker 2: point does this drag consumer spending with it?

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Speaker 4: Yeah, so look, you know, you're right, there can be

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Speaker 4: some wealth effects there. There will be some wealth effects.

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Speaker 4: There will be you know, there will be ramifications of

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Speaker 4: that stuff. But like I said before, we have to

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Speaker 4: balance that out against the fatality of other stuff going

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Speaker 4: on in the policy agenda, the toutality of the other

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Speaker 4: strong drivers of economic growth.

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Speaker 7: You know.

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Speaker 4: One point that I've made a lot is that the

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Speaker 4: Biden administration's last two years, almost three quarters of jobs

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Speaker 4: that were created were in government and government adjacent sectors.

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Speaker 4: And that's profoundly unsustainable to have the government a train

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Speaker 4: driving the economy. In the March job support that number

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Speaker 4: came down from almost seventy five in the last two

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Speaker 4: years of the bindminstration to just about forty, right. So

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Speaker 4: that's a very material decline. And this is part of

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Speaker 4: reconfiguring the economy from a government driven growth engine to

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Speaker 4: a sustainable, durable, private sector growth engine. And this is

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Speaker 4: going to continue.

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Speaker 5: As we consider the growth outlook, keeping in mind that

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Speaker 5: you did just tell us, mister Chairman, that some of

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Speaker 5: this will take time to materialize in terms of the

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Speaker 5: stimulative efforts of this administration, whether legislatively or otherwise. If

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Speaker 5: the Federal Reserve were to decide that it has to

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Speaker 5: prioritize inflation, and if inflation persists and they don't want

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Speaker 5: to cut rates, but we do see a material downward

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Speaker 5: shift in growth or in the labor market, is there

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Speaker 5: a lever that the White House is going to be

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Speaker 5: able to pull more immediately to try to offset those

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Speaker 5: effects if the Fed can't do both at the same time.

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Speaker 3: Yeah.

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Speaker 4: So again, I I point you to the forthcoming tax

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Speaker 4: legislation that's being worked at that's being worked out in

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Speaker 4: the Hill, and I think that that will that will

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Speaker 4: allow the President to provide a profound tax relief that

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Speaker 4: will be excellent for American American families, American workers, American firms.

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Speaker 2: Well, going forward, mister Chairman, I wonder what's going to

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Speaker 2: happen in terms of messaging to this market. Are we

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Speaker 2: going to hear more from the administration, from the President

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Speaker 2: of the United States, from yourself when it comes to

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Speaker 2: the dollar. When it comes to investing in the stock

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Speaker 2: market in the United States, I know that frequently the

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Speaker 2: refrain is, we're seeing companies invest in America. But how

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Speaker 2: about in our financial markets, where we've seen I believe

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Speaker 2: a half dozen IPOs today delayed, some of.

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Speaker 3: Them pretty large.

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Speaker 2: We're hearing from some major firms planning to go public

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Speaker 2: as soon as next week that are putting those plans

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Speaker 2: on the shelf. What does the administration tell them?

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Speaker 4: Yeah, so I'm going to I'm not going to comment

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Speaker 4: on specific companies and IPOs, but I will say what

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Speaker 4: I said before, which is that, of course there's going

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Speaker 4: to be some market volatility on the back of the

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Speaker 4: present's historic actions. But I also want to redirect you

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Speaker 4: again to what we can do, and so you know

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Speaker 4: the look, the tariffs are designed to redress the emergency

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Speaker 4: of trade deficits, but there is a nice side effect,

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Speaker 4: which is they raise a lot of revenue, and if

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Speaker 4: you use that revenue not only to extend the historic

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Speaker 4: tax cuts from twenty seventeen, but to provide further tax

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Speaker 4: relief for American families while deregulaing in economy and making

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Speaker 4: it easier to invest, build higher in America, you have

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Speaker 4: the recipe to create an economic boom wherein America is

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Speaker 4: much more competitive because of the tariffs. It's much more

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Speaker 4: competitive because lower taxes, households, firms, workers keep more of

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Speaker 4: the money they earn every week, and they spend more

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Speaker 4: of it, they save more of it, they invest more

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Speaker 4: of it, and you get the government out of the waist.

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Speaker 4: They can build and invest and make factories. And that

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Speaker 4: is the recipe for an economic boom. And if we

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Speaker 4: keep at it, we can create a really great environment

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Speaker 4: for firms to invest in higher and that will in

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Speaker 4: the end, in the long run, drive the financial markets.

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Speaker 5: The other thing that tariffs, you would think, at least

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Speaker 5: traditional economic theory would tell you, would lead to, is

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Speaker 5: a stronger dollar. And yet that's not what we've seen

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Speaker 5: in the immediate aftermath of the announcement of these mister chairmen.

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Speaker 5: How concerned are you about a period of sustained dollar weakness?

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Speaker 4: Thanks? So, Look, you know, my view, as I've expressed before,

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Speaker 4: is that classic economic analysis would say that the burden

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Speaker 4: of any economic policy, whether it's a tax of subsidy,

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Speaker 4: no matter what it is, falls on what economists would

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Speaker 4: call the more inelastic party, but I think as easier

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Speaker 4: for other folks to understand as the more inflexible party.

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Speaker 4: And the example that I keep given is if you're

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Speaker 4: looking to buy a house and the town that you're

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Speaker 4: looking in raises its property tax rates, and you're flexible,

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Speaker 4: you can just look at the next town over. You

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Speaker 4: can change your behavior to avoid the burden of the tax.

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Speaker 4: The person who's selling the tax can't move his house

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Speaker 4: across town lines, so he's got to eat the property

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Speaker 4: tax and lower his selling price. And in that way,

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Speaker 4: the burden of the tax fell and the person who

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Speaker 4: couldn't move his house, And the same is going to

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Speaker 4: be true in international trade. American consumers are flexible. We

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Speaker 4: can make stuff here at home. We can change the

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Speaker 4: countries from which we import. We can stop importing from

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Speaker 4: a country with a high tariff rate and start importing

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Speaker 4: from a country with a low tariff rate that treats

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Speaker 4: us better, that is a better trading partner with us.

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Speaker 4: And that ability to change our consumption patterns, whether to

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Speaker 4: move it home into home production or among different countries,

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Speaker 4: makes us more flexible. By contrast, installed factories in China,

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Speaker 4: though they've already spent the capital. The factories are stuck

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Speaker 4: on the ground. The workforce is already trained to build

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Speaker 4: products aimed squarely at the US consumer markets. Those cannot move.

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Speaker 4: So in the long run, other countries, the tariff countries

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Speaker 4: will end up bearing the burden of the tax of

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Speaker 4: the tariff. Now, there's a couple ways that can happen.

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Speaker 4: In twenty eighteen, twenty nineteen, it happened through the currency,

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Speaker 4: but it need not happen that way. Again, it could

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Speaker 4: happen that way. It doesn't necessarily happen to have to

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Speaker 4: happen that way. There are plenty of other ways they

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Speaker 4: can end up bearing the burden of the tax. It

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Speaker 4: could happen through reduced selling prices.

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Speaker 5: All right, mister chairman, we appreciate you joining us here

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Speaker 5: on Bloomberg TV and Radio. Stephen Meyer in the chair

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Speaker 5: of the Council of Economic Advisors at the White House,

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Speaker 5: thank you so much for joining us on this job's day.

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Speaker 5: But of course, while we did get a strong payrulls report,

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Speaker 5: we are not seeing strength at least in risk assets today.

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Speaker 5: We're right around the session lows on the major equity benchmarks.

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Speaker 5: The S and P now down five point two percent.

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Speaker 5: The NASDAQ one hundred down five point four percent. We

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Speaker 5: want to get more on these markets now with Bloomberg's

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Speaker 5: Romain Bostik, who is joining us from New York. Romain,

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Speaker 5: I gotta say, I'm kind of feeling flashbacks to March

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Speaker 5: twenty twenty here.

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Speaker 8: Yeah, not just a round session lows. We are at

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Speaker 8: ed session lows. And just to put this into perspective,

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Speaker 8: Klee five hundred socks roughly in the SMB five hundred.

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Speaker 8: Only fourteen of those stocks right now are in the green.

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Speaker 8: We're headed towards what is going to be more or

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Speaker 8: less an unprecedented day. The superlatives pretty much stack up

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Speaker 8: like this. More or less, we're having the worst days

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Speaker 8: since at least twenty twenty two for certain sectors, the

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Speaker 8: worst day since the onset of the pandemic, And if

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Speaker 8: you take the pandemic out of the equation as sort

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Speaker 8: of a one off outlier, this is quite frankly shaping

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Speaker 8: up to be one of the worst days since the

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Speaker 8: late nineteen seventies. This is a market that is a

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Speaker 8: completely shut down, not just in equities, Kaylee. We've had

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Speaker 8: several IPOs that have been put on pause. That includes

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Speaker 8: names like Klarna stub hub chime. Several deals that were

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Speaker 8: in the works have also been paused. Not a single

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Speaker 8: corporation has been brave enough to try to sell new

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Speaker 8: debt today or yesterday. And right now you have the

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Speaker 8: sense of paralysis amongst economists. Despite the comments that we

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Speaker 8: just heard from the CECH chair just a few minutes ago,

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Speaker 8: most economists say right now they have no idea how

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Speaker 8: to chart a path forward.

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Speaker 2: You know, you talk about the fundamentals in this market,

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Speaker 2: Romayne kind of falling apart. What about the technicals? We

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Speaker 2: have so many broken charts. Even if the news improves,

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Speaker 2: would that help to lift stocks from where they are now?

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Speaker 8: Well, keep in mind, you know, a couple of days ago, Joe,

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Speaker 8: the support line on the S and P five hundred

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Speaker 8: was supposed to be fifty five hundred. Then when we

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Speaker 8: got broke below that, people said fifty four hundred. Right now,

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Speaker 8: we're trading right around the fifty one hundred level. That

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Speaker 8: is the low of the day, fifty one four and change.

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Speaker 8: And so whatever support levels were there, they've been broken.

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Speaker 8: Even when you look at other sort of lines such

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Speaker 8: as moving averages, Joe, the fact that the S and

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Speaker 8: P five hundred right now is in oversold condition. That's

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Speaker 8: where that fourteen day RSI dips below thirty. Traditionally, these

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Speaker 8: are all lines in the sand where typically you'll start

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Speaker 8: to see a rebound in socks that dip buyers come in.

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Speaker 8: You're just not seeing it there right now. The technicals

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Speaker 8: are working against them. The fundamentals, potentially because of economic conditions,

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Speaker 8: are working against them. So the big question now right now, Joe,

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Speaker 8: is if you do want to stay in this market,

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Speaker 8: what actually do you buy? What are you brave enough

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Speaker 8: to buy?

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Speaker 3: Not the truth the analysts aren't exactly telling us, Romaine.

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Speaker 3: It's great to see you.

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Speaker 2: It's been great having Romain Bostic with us. A feeling

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Speaker 2: we're going to talk against very bumpy days this week.

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Speaker 2: I think that might happen. What are you doing at

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Speaker 2: five with me and Washington, Kaylee? Lines of course here

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Speaker 2: on the fastest show in politics, as we try to

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Speaker 2: bridge here what's happening in Washington with what is happening

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Speaker 2: on Wall Street? And you can't remove the two here, Kayley,

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Speaker 2: as we reach ever lower, having heard from not only

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Speaker 2: the President but the.

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Speaker 5: Fed share Yeah, the Fed shair signaling they're still not

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Speaker 5: in a rush to cut rates, though it is warning

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Speaker 5: of the inflationary risks of these tariffs. And it's interesting

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Speaker 5: to note after we heard from the Chairman, you saw

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Speaker 5: even more buy and coming into the bond market. Maybe

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Speaker 5: that's the only thing anyone wants to buy a ten

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Speaker 5: year yield right now down eleven basis points at three

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Speaker 5: ninety two. This is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch

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Speaker 1: us live weekdays at noon and five pm. E's durn

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Speaker 1: on Apple Cocklay and Android Auto with the Bloomberg Business App.

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Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty.

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Speaker 5: The worst two day stretch since March of twenty twenty.

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Speaker 5: Is what we're heading for right now, with a bid

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Speaker 5: coming into the bond market as investors are looking for

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Speaker 5: safety somewhere. Keeping in mind they all just heard from

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Speaker 5: the Chairman of the Fed. While there may be some

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Speaker 5: persistent inflationary risk due to the tariff policies announced by

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Speaker 5: President Trump this week, the Fed is still not in

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Speaker 5: any rush to lower interest rates, despite perhaps Joe the

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Speaker 5: desire of President Trump for them to do so. He

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Speaker 5: actually said on True Social today, it would be the

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Speaker 5: perfect time, would have been.

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Speaker 3: Right before that meeting.

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Speaker 2: Maybe in fact that was coincided or time to coincide

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Speaker 2: with his remarks. It wasn't until Jay Powell started talking

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Speaker 2: that we saw these new lows on Wall Street because

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Speaker 2: now the fear is, of course, we're not going to

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Speaker 2: see lower interest rates anytime soon. Fascinating conversation with Stephen

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Speaker 2: Myron at the White House coming off the jobs data today.

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Speaker 2: He continued to point us to Trump tax cuts. They're

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Speaker 2: just getting the ball rolling on that on Capitol Hill.

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Speaker 2: In fact, we're going to have some votamas over the

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Speaker 2: weekend that could be pretty interesting. We'll be talking about

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Speaker 2: that likely on Monday. But what a treat to have

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Speaker 2: the chairman of the House Financial Services Committee with us.

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Speaker 2: We remember when he was just a congressman. We remember

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Speaker 2: when he was just a community banker. But that's why

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Speaker 2: this is an important conversation because of the unique perspective

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Speaker 2: that french Hill brings to us. From Arkansas, It's great

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Speaker 2: to see you. It's been too long.

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Speaker 3: Thanks for being great to both of you. Thank you.

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Speaker 2: So what do you think of this? I know you're

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Speaker 2: sensitive to the markets. You don't like what you're seeing

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Speaker 2: here on Wall Street. I'm sure the line from Stephen

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Speaker 2: Myron was just hang on. We're working on extending the

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Speaker 2: Trump tax cuts along with a number of other tax

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Speaker 2: points of tax relief that will help to make this better.

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Speaker 2: Does one offset the other?

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Speaker 7: Well, I think it's such an important question, and I'm

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Speaker 7: concerned that we cover up the strategy of right sizing regulation,

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Speaker 7: tailoring regulations, getting balanced back in the regulatory system, which

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Speaker 7: President Trump was so successful on in his first term.

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Speaker 7: We want to do that in this term. And as

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Speaker 7: you noted, the Senate will be voting on the House

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Speaker 7: Budget Reconciliation Bill this weekend that will lead and unlock

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Speaker 7: the ability to block a major tax increase for business

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Speaker 7: and for American households. Those are big, certain issues that

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Speaker 7: I think we can get done, I believe strongly, and

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Speaker 7: I don't want to see a tariff strategy offset that,

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Speaker 7: which is why I believe in trade diplomacy. I think

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Speaker 7: President Trump's right to engage in trade diplomacy, but I

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Speaker 7: believe sincerely that you should target sectors in a very

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Speaker 7: isolated way and achieve results and do the same thing

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Speaker 7: in reciprocity with countries you think are bad actors that

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Speaker 7: are not open to American products. And then finally, as

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Speaker 7: it relates to Canada and Mexico, I really think the

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Speaker 7: President should advance the negotiations on the USMCA reauthorization of

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Speaker 7: that treaty, that trade arrangement, and let's make some changes.

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Speaker 7: Let's make sure that Chinese component parts are not dumped

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Speaker 7: into Mexico or Canada and go into the supply chain.

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Speaker 5: So why not have Congress take the lead on that.

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Speaker 5: It is your Article one authority to do so. And

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Speaker 5: yet this is being driven out of the White House,

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Speaker 5: not by your chamber or by the Senate. Does that

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Speaker 5: need to change to calibrate this policy in a better

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Speaker 5: way for.

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Speaker 7: The economy Another good question. Since the late nineteen twenties,

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Speaker 7: Congress had been in the tariff setting business and they

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Speaker 7: were so frustrated by it and so bad at it

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Speaker 7: that they delegated it to the executive branch under Trade

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Speaker 7: Promotion Authority. But I think Article one's job there is

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Speaker 7: to make sure we try to get it right, work

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Speaker 7: with the administration to get it right. In the Senate's case,

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Speaker 7: ratifying treaties where necessary. So that's what we need to do.

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Speaker 7: Trade Promotion Authority, which was reauthorized in President Trump's first term,

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Speaker 7: has expired. President Trump, President Biden did nothing about it.

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Speaker 7: I think that would be a good step for the

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Speaker 7: Congress to consider reauthorizing that.

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Speaker 2: What is the banker inside you, never mind the chairman

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Speaker 2: of financial services, think about when you hear companies say,

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Speaker 2: why are we being unfairly targeted? All we have done

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Speaker 2: is play by the rules. We came out of China,

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Speaker 2: we went to Mexico, we went to Vietnam. Now we're

438
00:20:34,680 --> 00:20:39,120
Speaker 2: being penalized for that. Aren't they correct in making that point?

439
00:20:39,320 --> 00:20:42,000
Speaker 7: Well? I think it speaks to the uncertainty nature of this.

440
00:20:42,240 --> 00:20:44,400
Speaker 7: I hear it from my own constituents at home, who

441
00:20:44,440 --> 00:20:47,320
Speaker 7: are manufacturers who make something, but some of the component

442
00:20:47,359 --> 00:20:51,359
Speaker 7: parts and what they make comes from outside the US.

443
00:20:52,080 --> 00:20:55,240
Speaker 7: They're concerned about the cost, will their product be competitive?

444
00:20:56,080 --> 00:20:59,000
Speaker 7: And the same is true for Arkansas, big agricultural state.

445
00:20:59,160 --> 00:21:01,440
Speaker 7: Much of what we produce goes to Canada or Mexico.

446
00:21:01,560 --> 00:21:03,760
Speaker 7: So these are important issues, and that's why I think

447
00:21:03,800 --> 00:21:07,280
Speaker 7: the strategy has to be right. Using trade diplomacy to

448
00:21:07,359 --> 00:21:11,040
Speaker 7: open new markets, using trade diplomacy to lower rates in

449
00:21:11,080 --> 00:21:14,960
Speaker 7: certain product categories like auto and the European Union, for example,

450
00:21:15,640 --> 00:21:20,160
Speaker 7: and using trade diplomacy to punish bad actors. Those are

451
00:21:20,160 --> 00:21:23,280
Speaker 7: all important elements of it, and I think that gives

452
00:21:23,320 --> 00:21:26,400
Speaker 7: some certainty. When you use them across the board approach,

453
00:21:26,640 --> 00:21:31,240
Speaker 7: you get that uncertainty that my constituents are reflecting. So

454
00:21:31,280 --> 00:21:34,080
Speaker 7: I hope we can work on clarifying that in the

455
00:21:34,119 --> 00:21:35,720
Speaker 7: weeks ahead.

456
00:21:35,280 --> 00:21:36,920
Speaker 5: Well, and in the weeks and months ahead. The White

457
00:21:36,960 --> 00:21:38,800
Speaker 5: House is Joe mentioned earlier, and you were alluding to

458
00:21:38,880 --> 00:21:42,800
Speaker 5: the White House is pushing toward tax cuts that have

459
00:21:42,880 --> 00:21:45,480
Speaker 5: to happen at some point if TCJ is not going

460
00:21:45,520 --> 00:21:49,000
Speaker 5: to expire. I do wonder, though, the argument around that

461
00:21:49,080 --> 00:21:51,240
Speaker 5: tax package in twenty seventeen was it was going to

462
00:21:51,320 --> 00:21:53,240
Speaker 5: juice the economy. It was going to put more money

463
00:21:53,240 --> 00:21:55,920
Speaker 5: into people's wallets, It was going to give businesses more

464
00:21:55,960 --> 00:21:59,320
Speaker 5: money to make capital investments. Is it going to have

465
00:21:59,359 --> 00:22:01,240
Speaker 5: the same effects this time around, though, If it's just

466
00:22:01,280 --> 00:22:04,359
Speaker 5: an extension of what already exists, and those people and

467
00:22:04,400 --> 00:22:06,600
Speaker 5: businesses may be feeling a bit more of a pinch

468
00:22:06,680 --> 00:22:08,760
Speaker 5: in terms of the margin they actually have to work

469
00:22:08,800 --> 00:22:10,360
Speaker 5: with to spend that additional capital.

470
00:22:10,600 --> 00:22:13,879
Speaker 7: Well, the expensing has been being phased out, and so

471
00:22:14,040 --> 00:22:17,360
Speaker 7: the renewal of that I think will spur a capital investment.

472
00:22:17,480 --> 00:22:19,280
Speaker 7: Of the R and D tax credit the same, it

473
00:22:19,320 --> 00:22:23,480
Speaker 7: will spur new investment. You're right, at the corporate marginal

474
00:22:23,520 --> 00:22:25,720
Speaker 7: rate or at the household marginal rate, people would just

475
00:22:25,720 --> 00:22:29,560
Speaker 7: feel relief good. I mean, I can count on that

476
00:22:29,640 --> 00:22:34,080
Speaker 7: going forward. So I think it will unlock some activity

477
00:22:34,640 --> 00:22:38,199
Speaker 7: in the economy and it will produce faster economic growth,

478
00:22:38,960 --> 00:22:41,560
Speaker 7: even if the marginal rates don't change dramatically.

479
00:22:42,040 --> 00:22:45,919
Speaker 2: There was a time when revenue from tariffs was pitched

480
00:22:45,960 --> 00:22:48,440
Speaker 2: as a way to help pay for extending or making

481
00:22:48,480 --> 00:22:51,600
Speaker 2: permanent the Trump tax cuts. Is that part of the

482
00:22:51,640 --> 00:22:55,080
Speaker 2: conversation any longer, or are the tax cuts going to

483
00:22:55,080 --> 00:22:56,800
Speaker 2: be extended in lieu of the tariffs?

484
00:22:57,080 --> 00:22:59,280
Speaker 7: Well, in our discussions in the House, I can't speak

485
00:22:59,320 --> 00:23:02,399
Speaker 7: for the government at large, but in our discussions with

486
00:23:02,480 --> 00:23:05,080
Speaker 7: our colleagues in the House, we've been thinking about the

487
00:23:05,119 --> 00:23:09,840
Speaker 7: importance of extending the President Trump's tax cuts, cutting spending,

488
00:23:10,040 --> 00:23:12,439
Speaker 7: trying to write size government so that we don't have

489
00:23:12,480 --> 00:23:16,199
Speaker 7: two trillion dollar deficits. This is a major goal of

490
00:23:16,240 --> 00:23:21,440
Speaker 7: our House Budget Committee, and we're not counting on tariff revenue,

491
00:23:21,480 --> 00:23:25,159
Speaker 7: because tariff revenue is very difficult to predict. You have

492
00:23:25,720 --> 00:23:32,080
Speaker 7: countervailing duties, you have people will change their buying pattern.

493
00:23:32,200 --> 00:23:34,800
Speaker 7: So to automatically assume that you can count on that

494
00:23:35,359 --> 00:23:41,359
Speaker 7: I think is not significantly and significant or smart. So

495
00:23:41,400 --> 00:23:44,160
Speaker 7: we have not per se counted on that, and OMB

496
00:23:44,320 --> 00:23:50,160
Speaker 7: does not count tariff revenue in their scoring. So as

497
00:23:50,200 --> 00:23:52,679
Speaker 7: we get closer to that final vote, we'll look and

498
00:23:52,720 --> 00:23:57,200
Speaker 7: see where this Trump tariff plan settles, and that may

499
00:23:57,200 --> 00:23:59,800
Speaker 7: give us some indication, But in the meantime we're working

500
00:24:00,400 --> 00:24:01,199
Speaker 7: independent of that.

501
00:24:02,320 --> 00:24:04,720
Speaker 5: We were just listening for our colleague Charlie Pellett, looking

502
00:24:04,720 --> 00:24:07,119
Speaker 5: at the markets, specifically at bank stock, some of the

503
00:24:07,160 --> 00:24:09,840
Speaker 5: big investment banks that we're counting on a revival in

504
00:24:10,640 --> 00:24:13,399
Speaker 5: companies coming to the public markets and re engaging in

505
00:24:13,520 --> 00:24:15,080
Speaker 5: M and A activity. This gets back to the kind

506
00:24:15,080 --> 00:24:18,920
Speaker 5: of regulatory burden you were referring to earlier. You concerned

507
00:24:18,920 --> 00:24:21,800
Speaker 5: that some of this wider economic impact companies now deciding

508
00:24:21,800 --> 00:24:24,680
Speaker 5: perhaps is not the best time to enter the public markets,

509
00:24:24,680 --> 00:24:27,600
Speaker 5: that that regulatory burden being eased may be for not

510
00:24:27,680 --> 00:24:29,760
Speaker 5: if they can't actually take advantage of it.

511
00:24:30,000 --> 00:24:34,280
Speaker 7: Right well, certainly, I hope that the competition focus of

512
00:24:34,320 --> 00:24:41,200
Speaker 7: a Trump FTC Federal Trade Commission is open towards business, entrepreneurship,

513
00:24:41,240 --> 00:24:44,880
Speaker 7: business combination, where it produces more competition. And I would

514
00:24:44,920 --> 00:24:47,879
Speaker 7: hope that we are able in our regulatory focus on

515
00:24:47,920 --> 00:24:52,639
Speaker 7: capital formation to encourage more public companies because we lower

516
00:24:52,720 --> 00:24:55,199
Speaker 7: the cost quarterly of being public. That's a goal of

517
00:24:55,240 --> 00:24:58,240
Speaker 7: mine as chairman of the committee. But anytime you have

518
00:24:58,359 --> 00:25:01,800
Speaker 7: wide market uncertainty in equity prices, you're going to have

519
00:25:01,840 --> 00:25:05,440
Speaker 7: people pull back from a scheduled IPO because they need

520
00:25:05,480 --> 00:25:09,040
Speaker 7: market certainty. And so I hope this settles down soon

521
00:25:09,119 --> 00:25:12,520
Speaker 7: because I know there's a lot of interest in advancing

522
00:25:12,560 --> 00:25:16,320
Speaker 7: that equity market through the IPOs.

523
00:25:16,520 --> 00:25:18,639
Speaker 2: We've been talking, mister Chairman, for the better part of

524
00:25:18,640 --> 00:25:20,800
Speaker 2: ten minutes, and somehow Kailey Lines has not asked you

525
00:25:20,840 --> 00:25:21,480
Speaker 2: about crypto.

526
00:25:21,760 --> 00:25:24,040
Speaker 5: I was saving it for less about the stable acts.

527
00:25:24,080 --> 00:25:25,879
Speaker 2: Well, my gosh, we only have a couple of minutes

528
00:25:25,960 --> 00:25:27,920
Speaker 2: left here. You had an important week when it comes

529
00:25:28,000 --> 00:25:30,880
Speaker 2: to this. It's something that gets lost in a very

530
00:25:30,920 --> 00:25:33,439
Speaker 2: noisy news cycle. But this is important, something you've been

531
00:25:33,480 --> 00:25:35,119
Speaker 2: pursuing for months and months.

532
00:25:35,200 --> 00:25:37,560
Speaker 7: This is a real effort for the past four years,

533
00:25:37,600 --> 00:25:41,640
Speaker 7: really working with former Chairman Patrick McHenry, ranking Member Maxine

534
00:25:41,720 --> 00:25:46,600
Speaker 7: Waters to craft a dollar back stable coin under US

535
00:25:46,760 --> 00:25:50,480
Speaker 7: law inside the largest capital market, the most important economic

536
00:25:50,520 --> 00:25:52,080
Speaker 7: country in the world, that we would have our own

537
00:25:52,119 --> 00:25:55,000
Speaker 7: dollar back stable coin where we could have a tokenized

538
00:25:55,040 --> 00:25:57,760
Speaker 7: dollar payment on a blockchain. We had a successful markup

539
00:25:58,160 --> 00:26:01,439
Speaker 7: bipartisan result. And this is a companion to just a

540
00:26:01,480 --> 00:26:06,320
Speaker 7: few weeks ago, Bill Haggerty, Cynthia A. Lummis, Tim Scott

541
00:26:06,720 --> 00:26:11,600
Speaker 7: Guyan Jillibrand got a Senate dollar back stable coin bill

542
00:26:11,680 --> 00:26:13,960
Speaker 7: out of the Senate Banking Committee. This is the first

543
00:26:14,000 --> 00:26:17,679
Speaker 7: time we're demonstrating, I think to the markets that we

544
00:26:17,680 --> 00:26:20,200
Speaker 7: can make progress on this. I think we can get

545
00:26:20,200 --> 00:26:22,119
Speaker 7: that passed this year, and I think we can also

546
00:26:22,200 --> 00:26:25,920
Speaker 7: get the market structure bill passed. You've got to link them,

547
00:26:25,960 --> 00:26:30,480
Speaker 7: because a doll our back stable coin, but without market structure,

548
00:26:30,720 --> 00:26:33,040
Speaker 7: how would you custody it, how would you exchange it,

549
00:26:33,080 --> 00:26:35,480
Speaker 7: how would it be used? So they're important that we

550
00:26:35,600 --> 00:26:39,879
Speaker 7: try to keep them working together. President Trump's asked us

551
00:26:39,920 --> 00:26:41,800
Speaker 7: to complete that work by the August recess.

552
00:26:41,920 --> 00:26:43,919
Speaker 5: Okay, So in terms of sequencing, when we see a

553
00:26:43,960 --> 00:26:47,480
Speaker 5: full floor vote on the stable coin legislation before market

554
00:26:47,480 --> 00:26:50,000
Speaker 5: structure efforts. Beginner is that already I think House.

555
00:26:49,800 --> 00:26:53,959
Speaker 7: And Senate leadership have the best strategy under discussion. Tim Scott,

556
00:26:53,960 --> 00:26:57,199
Speaker 7: Bill Haggerty, Cynthia Aleumas. They're outstanding leaders. They know this

557
00:26:57,280 --> 00:26:59,520
Speaker 7: issue well, and we know it well in the House.

558
00:26:59,520 --> 00:27:01,760
Speaker 7: So we're going to craft the best legislative strategy.

559
00:27:02,760 --> 00:27:04,560
Speaker 5: How different will it be to fit twenty one?

560
00:27:05,800 --> 00:27:08,240
Speaker 7: We're gonna have our first hearing next week. Brian Style

561
00:27:08,240 --> 00:27:10,960
Speaker 7: of Wisconsin will convene his first market structure hearing in

562
00:27:11,000 --> 00:27:13,600
Speaker 7: the House. I we're excited about that and we hope

563
00:27:13,600 --> 00:27:15,800
Speaker 7: to get that text ready in the next few weeks.

564
00:27:15,800 --> 00:27:18,880
Speaker 3: We need a Style Hill panel. Yes, oh, yes, when

565
00:27:18,880 --> 00:27:20,080
Speaker 3: the time comes, can we do that?

566
00:27:20,119 --> 00:27:20,920
Speaker 7: We can do it, all right?

567
00:27:21,000 --> 00:27:22,800
Speaker 5: All right, well, we'll look forward to it. And we're

568
00:27:22,960 --> 00:27:25,320
Speaker 5: so excited to have you in studio today, mister chairman.

569
00:27:25,600 --> 00:27:27,919
Speaker 5: That is the Chair of the House Financial Services Committee,

570
00:27:27,960 --> 00:27:30,760
Speaker 5: Congressman Front Show of Arkansas here with us on Bloomberg

571
00:27:30,840 --> 00:27:34,399
Speaker 5: TV and Radio. Interestingly, Crypto won Bright Spot today. I

572
00:27:34,440 --> 00:27:36,680
Speaker 5: would note, Joe, if you're looking for haven, maybe you're

573
00:27:36,680 --> 00:27:38,720
Speaker 5: finding in treasuries, but maybe a little bit of marginal

574
00:27:38,800 --> 00:27:41,200
Speaker 5: byd coming into bitcoin as well. Can't say the same

575
00:27:41,200 --> 00:27:43,439
Speaker 5: for other risk assets though, as we're just off session

576
00:27:43,440 --> 00:27:46,000
Speaker 5: lows but still down about five percentage points on the

577
00:27:46,040 --> 00:27:47,280
Speaker 5: S and P five hundred and Nasdaq.

578
00:27:47,320 --> 00:27:50,040
Speaker 2: Little bit of a bid under bitcoin, but this is

579
00:27:50,080 --> 00:27:51,359
Speaker 2: a risk off market.

580
00:27:51,400 --> 00:27:51,960
Speaker 3: My goodness.

581
00:27:52,000 --> 00:27:53,960
Speaker 2: We're still trading near the lows of the session, and

582
00:27:54,000 --> 00:27:56,199
Speaker 2: we'll have a lot more coming up here on the

583
00:27:56,200 --> 00:27:59,399
Speaker 2: fastest show in politics. You can't remove Washington from Wall Street.

584
00:27:59,640 --> 00:28:02,159
Speaker 2: That's why I were here on Bloomberg TV and radio

585
00:28:02,200 --> 00:28:05,919
Speaker 2: alongside Kaylee Lines. I'm Joe Matthew. Thanks again to Chairman

586
00:28:06,040 --> 00:28:08,200
Speaker 2: french Hill. We'll have much more ahead on Bloomberg.

587
00:28:11,560 --> 00:28:15,040
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

588
00:28:15,080 --> 00:28:18,080
Speaker 1: us live weekdays at noon and five pm Eastern on

589
00:28:18,240 --> 00:28:21,480
Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business App.

590
00:28:21,640 --> 00:28:24,920
Speaker 1: Listen on demand wherever you get your podcasts, or watch

591
00:28:25,000 --> 00:28:26,520
Speaker 1: us live on YouTube.

592
00:28:27,760 --> 00:28:29,960
Speaker 2: So a new date to circle on the calendar, Kaylee,

593
00:28:30,040 --> 00:28:33,679
Speaker 2: seventy five days not a big shock, obviously, we were

594
00:28:33,680 --> 00:28:35,640
Speaker 2: creeping up on a deadline in the next twenty four

595
00:28:35,640 --> 00:28:38,680
Speaker 2: hours without a deal in place. It's unclear though whether

596
00:28:38,720 --> 00:28:41,160
Speaker 2: it's still I ask would China sign off on such

597
00:28:41,200 --> 00:28:44,120
Speaker 2: a deal, because that would be required for this to happen,

598
00:28:44,160 --> 00:28:47,400
Speaker 2: and they just put retaliatory tariffs on us today.

599
00:28:47,560 --> 00:28:49,520
Speaker 5: Yeah well, and the President does make reference to that

600
00:28:49,600 --> 00:28:51,840
Speaker 5: in his post on True Social He says, we continue,

601
00:28:51,880 --> 00:28:54,040
Speaker 5: we hope to continue working in good faith with China,

602
00:28:54,040 --> 00:28:57,600
Speaker 5: who I understand are not very happy about our reciprocal tariffs.

603
00:28:57,600 --> 00:29:00,080
Speaker 5: He goes on to say, this proves that tariffs are

604
00:29:00,120 --> 00:29:03,280
Speaker 5: the most powerful economic tool and very important to our

605
00:29:03,360 --> 00:29:05,880
Speaker 5: national security. Keeping in mind the President has floated multiple

606
00:29:05,880 --> 00:29:08,360
Speaker 5: times over the last week lessening the tariff burden on

607
00:29:08,480 --> 00:29:11,560
Speaker 5: China if it means they agree to a TikTok divestiture.

608
00:29:11,680 --> 00:29:14,600
Speaker 2: Tariff's the most powerful economic tool, though, I guess in

609
00:29:14,760 --> 00:29:17,640
Speaker 2: generating reciprocal tariffs sid in sending the stock market lower,

610
00:29:17,680 --> 00:29:19,960
Speaker 2: because that is what they have achieved today.

611
00:29:20,000 --> 00:29:22,280
Speaker 3: Commentary from J. Powill seemed to only make it worse.

612
00:29:22,480 --> 00:29:24,240
Speaker 5: Yeah well, and we want to get some more commentary

613
00:29:24,280 --> 00:29:26,920
Speaker 5: of our own here on this program. As we bridge

614
00:29:26,960 --> 00:29:30,600
Speaker 5: Wall Street in Washington and turned to Democratic Congressman Glenn

615
00:29:30,680 --> 00:29:33,360
Speaker 5: Ivy of Maryland, who was here with us in our Washington,

616
00:29:33,480 --> 00:29:35,440
Speaker 5: d C studio, we have much we want to discuss

617
00:29:35,480 --> 00:29:38,680
Speaker 5: with you, sir, and welcome back to Bloomberg TV and Radio. First, though,

618
00:29:38,680 --> 00:29:40,640
Speaker 5: as I know, you did vote for the legislation that

619
00:29:40,680 --> 00:29:45,000
Speaker 5: included this divest or ban law for TikTok another seventy

620
00:29:45,040 --> 00:29:47,760
Speaker 5: five day extension. Does this go against the nature of

621
00:29:47,800 --> 00:29:49,760
Speaker 5: what that law was actually supposed to achieve.

622
00:29:50,320 --> 00:29:51,000
Speaker 3: Yeah, it does.

623
00:29:51,120 --> 00:29:53,040
Speaker 9: And if you look at what they did over the

624
00:29:53,080 --> 00:29:56,640
Speaker 9: previous extension that the President gave them as far as

625
00:29:56,680 --> 00:29:59,720
Speaker 9: seeking a business solution, I didn't see really any effort

626
00:29:59,760 --> 00:30:03,200
Speaker 9: to do that. So extending him seventy five more days

627
00:30:03,400 --> 00:30:05,719
Speaker 9: to do what is the question that I have. If

628
00:30:05,760 --> 00:30:07,760
Speaker 9: they're not really going to be trying to figure out

629
00:30:07,800 --> 00:30:10,960
Speaker 9: a way to resolve this from a business perspective, then

630
00:30:10,960 --> 00:30:13,680
Speaker 9: they're just playing a stall game, and the president's falling

631
00:30:13,760 --> 00:30:14,080
Speaker 9: for it.

632
00:30:14,160 --> 00:30:16,160
Speaker 3: So I hope he'll get out of the way of that.

633
00:30:16,440 --> 00:30:18,800
Speaker 9: I don't think he really has the statutory authority to

634
00:30:18,840 --> 00:30:21,680
Speaker 9: do what he's doing here, but you know.

635
00:30:21,720 --> 00:30:22,720
Speaker 3: We'll see how it plays out.

636
00:30:22,800 --> 00:30:24,440
Speaker 2: Well, in the time that you were preparing to vote

637
00:30:24,480 --> 00:30:27,640
Speaker 2: on that bill, the bipartisan case was established that this

638
00:30:27,800 --> 00:30:29,320
Speaker 2: was a national security threat.

639
00:30:29,320 --> 00:30:31,240
Speaker 3: Has any of that changed? I don't think so.

640
00:30:31,360 --> 00:30:33,560
Speaker 9: And if you look at the ads that they run,

641
00:30:34,120 --> 00:30:37,080
Speaker 9: which never mentioned byte dance. But you know all these

642
00:30:37,440 --> 00:30:41,520
Speaker 9: nice people in Middle America who are making money using TikTok,

643
00:30:41,560 --> 00:30:43,760
Speaker 9: and we all know that that's the case. But the

644
00:30:43,800 --> 00:30:46,000
Speaker 9: fact that they're continuing to push it and act like

645
00:30:46,040 --> 00:30:48,320
Speaker 9: this is only about TikTok and has nothing to do

646
00:30:48,400 --> 00:30:51,320
Speaker 9: with byte dance, I think indicates how, you know, the

647
00:30:51,360 --> 00:30:54,800
Speaker 9: potential for misinformation and disinformation can be spread through this,

648
00:30:56,240 --> 00:31:00,560
Speaker 9: and they're doing that very aggressively and apparently pretty well well.

649
00:31:00,680 --> 00:31:03,160
Speaker 5: So there's the national security element of TikTok. I guess

650
00:31:03,160 --> 00:31:05,800
Speaker 5: there's also the national security element of something that the

651
00:31:05,800 --> 00:31:08,560
Speaker 5: President is now tying to TikTok, which is his tariff policy,

652
00:31:08,640 --> 00:31:12,920
Speaker 5: maybe using it as leverage in this particular instance, but overall,

653
00:31:12,960 --> 00:31:15,080
Speaker 5: as we consider the tariff regime that was announced by

654
00:31:15,080 --> 00:31:18,640
Speaker 5: the administration this week, I'm wondering what you're hearing behind

655
00:31:18,680 --> 00:31:20,800
Speaker 5: the scenes from your colleagues in the House, not just

656
00:31:20,840 --> 00:31:23,560
Speaker 5: from your fellow Democrats, who were obviously making their feelings

657
00:31:23,800 --> 00:31:26,320
Speaker 5: well known, but from Republicans. Are they saying things to

658
00:31:26,360 --> 00:31:28,280
Speaker 5: you in private that they're not willing to in public

659
00:31:28,280 --> 00:31:28,680
Speaker 5: about this?

660
00:31:28,920 --> 00:31:30,560
Speaker 9: Yeah, but I mean you're starting to actually see them

661
00:31:30,560 --> 00:31:33,040
Speaker 9: say things in public too. I mean, you know, the

662
00:31:33,840 --> 00:31:36,120
Speaker 9: loud screams you hear in the background are not just

663
00:31:36,280 --> 00:31:41,240
Speaker 9: Democrats and average Americans. They're Republicans who see this as

664
00:31:41,560 --> 00:31:44,800
Speaker 9: maybe one of the biggest political blunders that I can

665
00:31:44,840 --> 00:31:47,640
Speaker 9: recall in recent memory. This is a total unforced air.

666
00:31:48,040 --> 00:31:50,880
Speaker 9: You know, the economy was moving in a relatively good direction,

667
00:31:51,000 --> 00:31:54,280
Speaker 9: whether you like what Biden did or not. When he left,

668
00:31:54,400 --> 00:31:56,800
Speaker 9: you know, the US economy was pretty much the envy

669
00:31:56,840 --> 00:32:00,680
Speaker 9: of the Western world. Trump inherited a good economy. The

670
00:32:01,040 --> 00:32:04,320
Speaker 9: jobs report that just came out indicates that things were

671
00:32:04,360 --> 00:32:07,360
Speaker 9: moving in the right direction. Probably all he had to

672
00:32:07,360 --> 00:32:09,760
Speaker 9: do is kind of not get in the way, and

673
00:32:10,160 --> 00:32:12,680
Speaker 9: this is driving the truck off the cliff. I've never

674
00:32:13,840 --> 00:32:15,880
Speaker 9: imagined that he would do this and then to do

675
00:32:15,920 --> 00:32:19,240
Speaker 9: across the board tariffs on every product for almost every

676
00:32:19,280 --> 00:32:22,760
Speaker 9: country at the same time, and then act like you're

677
00:32:22,800 --> 00:32:24,880
Speaker 9: going to negotiate with all of these at the same

678
00:32:25,160 --> 00:32:29,120
Speaker 9: It's ridiculous. I'm not sure what he was thinking when

679
00:32:29,160 --> 00:32:31,080
Speaker 9: he did this, But I don't know what the exit

680
00:32:31,160 --> 00:32:33,080
Speaker 9: ramp is. I don't really see one. He's mad at

681
00:32:33,120 --> 00:32:35,800
Speaker 9: Powell for not giving him one, but Powell did. I

682
00:32:35,800 --> 00:32:38,440
Speaker 9: think what people were expecting. The Fed to do under

683
00:32:38,440 --> 00:32:39,440
Speaker 9: these circumstances.

684
00:32:39,520 --> 00:32:42,120
Speaker 3: Well, the impact locally for you is very real.

685
00:32:42,160 --> 00:32:45,160
Speaker 2: It's not just the tariffs here, and that's obviously hitting

686
00:32:45,200 --> 00:32:50,720
Speaker 2: people across the board. The market reaction hits people across

687
00:32:50,720 --> 00:32:54,200
Speaker 2: the board. The Doge cuts, though, hit you directly with

688
00:32:54,320 --> 00:32:57,560
Speaker 2: federal workers who live in your district who are being

689
00:32:57,600 --> 00:33:00,480
Speaker 2: shown the door. Then you add what to place with

690
00:33:00,520 --> 00:33:02,400
Speaker 2: some of the budget cutting. I know that the House

691
00:33:02,440 --> 00:33:05,320
Speaker 2: has yet to reverse the budget cuts for the District

692
00:33:05,400 --> 00:33:08,360
Speaker 2: of Columbia, but people are starting to sit back around here.

693
00:33:08,400 --> 00:33:11,200
Speaker 2: We're on global television and radio right now. People are

694
00:33:11,200 --> 00:33:13,479
Speaker 2: listening to you as well on ninety nine point one

695
00:33:13,640 --> 00:33:16,720
Speaker 2: FM in Washington, saying, hey, wait a minute. The Washington,

696
00:33:16,800 --> 00:33:20,880
Speaker 2: DC area, the DMV used to be recession proof because

697
00:33:20,920 --> 00:33:22,840
Speaker 2: of the fact that the federal government was here. At

698
00:33:22,920 --> 00:33:26,240
Speaker 2: least there was a shock absorber Congressman. Does that exist anymore?

699
00:33:27,280 --> 00:33:27,719
Speaker 3: Maybe not.

700
00:33:28,360 --> 00:33:30,760
Speaker 9: You know, what he's done in the attack on federal

701
00:33:30,800 --> 00:33:35,840
Speaker 9: employees has been extremely damaging. I mean, he's thrown people's

702
00:33:35,880 --> 00:33:38,040
Speaker 9: lives up in the air. And I know there's a

703
00:33:38,040 --> 00:33:41,040
Speaker 9: lot of people that don't have sympathy for so called bureaucrats,

704
00:33:41,080 --> 00:33:43,440
Speaker 9: but people are now starting to feel the impact of

705
00:33:43,520 --> 00:33:46,000
Speaker 9: the services that they're not getting because these people have

706
00:33:46,080 --> 00:33:48,200
Speaker 9: been fired, and some of these things are going to

707
00:33:48,200 --> 00:33:50,880
Speaker 9: be very long reaching and far reaching. So, you know,

708
00:33:51,640 --> 00:33:56,760
Speaker 9: cutting the clinical trials for Alzheimer's cancer, you know, Parkinson's.

709
00:33:57,040 --> 00:34:00,480
Speaker 9: My father died from Alzheimer's in Parkinson's, a combination of those.

710
00:34:00,840 --> 00:34:04,719
Speaker 9: So to see the clinical trials derailed just kind of

711
00:34:04,960 --> 00:34:07,680
Speaker 9: you know by happenstance is astonishing.

712
00:34:08,000 --> 00:34:08,520
Speaker 3: And then the.

713
00:34:08,440 --> 00:34:12,120
Speaker 9: Impact on you know, people who are seeking their PhDs

714
00:34:12,239 --> 00:34:13,800
Speaker 9: or starting their research careers.

715
00:34:14,080 --> 00:34:15,400
Speaker 3: We're gonna have ion q on.

716
00:34:15,440 --> 00:34:17,960
Speaker 9: Here in a minute, but yeah, you know, China is

717
00:34:18,520 --> 00:34:22,080
Speaker 9: throwing money at AI quantum computing and the like. They're

718
00:34:22,080 --> 00:34:25,560
Speaker 9: trying to grow as many of these scientists and engineers

719
00:34:25,600 --> 00:34:28,960
Speaker 9: as possible. Trump's cutting the money fraud for that, and

720
00:34:29,000 --> 00:34:31,520
Speaker 9: that's that's just scratching the surface. I mean, you know,

721
00:34:31,560 --> 00:34:34,720
Speaker 9: we could go through you know, the impact medicaid cuts

722
00:34:35,000 --> 00:34:38,120
Speaker 9: impacts on elementary schools, uh, you know, the impact on

723
00:34:38,200 --> 00:34:39,800
Speaker 9: local hospitals.

724
00:34:39,239 --> 00:34:40,800
Speaker 3: In rural and urban areas.

725
00:34:40,840 --> 00:34:43,560
Speaker 9: I mean, it's it's astonishing, its far reach, and it's

726
00:34:43,600 --> 00:34:46,600
Speaker 9: extremely damaging. And I think when you combine that with

727
00:34:47,800 --> 00:34:51,200
Speaker 9: the tariffs that he's put in place now. You're certainly

728
00:34:51,200 --> 00:34:54,000
Speaker 9: looking at a recession in the Washington metropolitan area, but

729
00:34:54,040 --> 00:34:56,479
Speaker 9: I think you're probably looking at one nationally as well.

730
00:34:56,640 --> 00:34:59,760
Speaker 2: You mentioned ion Q. This is a quantum computing company

731
00:34:59,760 --> 00:35:02,480
Speaker 2: that you introduced us to some months back, and you

732
00:35:02,520 --> 00:35:04,920
Speaker 2: were joined on the air here by the then CEO,

733
00:35:05,880 --> 00:35:08,759
Speaker 2: Nicolo Demassi, the president's CEO of ion Q, now in

734
00:35:08,840 --> 00:35:11,799
Speaker 2: charge of the company, joins us now as part of

735
00:35:11,800 --> 00:35:14,480
Speaker 2: our conversation. Nicolo, we want to add your voice to

736
00:35:14,520 --> 00:35:16,480
Speaker 2: what we're talking about here and welcome you to the

737
00:35:16,520 --> 00:35:19,480
Speaker 2: conversation with a lot of questions we have about quantum

738
00:35:19,520 --> 00:35:22,160
Speaker 2: computing and the charge that you have at ion Q.

739
00:35:22,920 --> 00:35:26,680
Speaker 2: Been pretty remarkable hearing you called out by Jensen Wang recently.

740
00:35:26,719 --> 00:35:29,000
Speaker 2: But there are great concerns now about a company like

741
00:35:29,040 --> 00:35:33,600
Speaker 2: yours seeing innovation stifled and having more difficulty accessing capital

742
00:35:33,640 --> 00:35:36,239
Speaker 2: because of what's happening in the financial markets.

743
00:35:35,960 --> 00:35:40,319
Speaker 3: Driven by the tariffs. What do you think, well, first of.

744
00:35:40,320 --> 00:35:42,920
Speaker 10: All, I want to thank the Congressman for including me

745
00:35:42,960 --> 00:35:45,320
Speaker 10: in this and thank the Congressman for all the support

746
00:35:45,360 --> 00:35:47,440
Speaker 10: that he's given to ion Q. You know, we were

747
00:35:47,480 --> 00:35:50,399
Speaker 10: born on the University of Maryland campus thirty years ago.

748
00:35:50,480 --> 00:35:54,759
Speaker 10: With doctor Chris Monroe, and we of course do a

749
00:35:54,840 --> 00:35:57,200
Speaker 10: lot with the University of the ecosystem with the DMV

750
00:35:57,920 --> 00:36:02,200
Speaker 10: and of course with all the associated ecosystem of agencies

751
00:36:02,360 --> 00:36:06,879
Speaker 10: in the area. You know you mentioned China. I mean absolutely,

752
00:36:06,920 --> 00:36:10,960
Speaker 10: they are investing, you know, probably fifteen billion dollars officially

753
00:36:11,040 --> 00:36:14,880
Speaker 10: in quantum computing, and I bet it's more unofficially given

754
00:36:14,920 --> 00:36:17,319
Speaker 10: how things work over there. And I would concur that

755
00:36:17,400 --> 00:36:20,600
Speaker 10: quantum computing and quantum networking, which is the other half

756
00:36:20,640 --> 00:36:23,520
Speaker 10: of our business, so it's faith making and safe breaking,

757
00:36:23,800 --> 00:36:26,120
Speaker 10: really are not just a paramount for the national security

758
00:36:26,160 --> 00:36:29,080
Speaker 10: of our country, but they're fundamental to the economic growth

759
00:36:29,080 --> 00:36:33,120
Speaker 10: prospects of our economy. And so you know, we we

760
00:36:33,160 --> 00:36:35,719
Speaker 10: work of course, you know, across the Aisle. We work

761
00:36:35,760 --> 00:36:39,640
Speaker 10: with the administration, every administration, and it has been a

762
00:36:39,640 --> 00:36:42,399
Speaker 10: bipartisan issue, which we're grateful for. I mean, our our

763
00:36:42,440 --> 00:36:46,239
Speaker 10: machines are made in America. Our quantum networking also is

764
00:36:46,320 --> 00:36:50,160
Speaker 10: rolling out in America in places like Tennessee for example.

765
00:36:51,000 --> 00:36:53,920
Speaker 10: And ultimately, you know, we believe that you know, you know,

766
00:36:53,960 --> 00:36:56,560
Speaker 10: tariffs will be a far bigger issue for companies that

767
00:36:56,600 --> 00:37:01,400
Speaker 10: are structured diffinerentely than I in Q. But nevertheless, you know,

768
00:37:01,440 --> 00:37:04,440
Speaker 10: we look forward to continue support in the state and

769
00:37:04,520 --> 00:37:07,440
Speaker 10: of course federally as we continue to grow this vital

770
00:37:07,440 --> 00:37:09,480
Speaker 10: technology for our country.

771
00:37:10,160 --> 00:37:12,479
Speaker 5: But what about the notion that, at least in terms

772
00:37:12,480 --> 00:37:15,520
Speaker 5: of China's retaliation against the US policy announced this week,

773
00:37:15,560 --> 00:37:19,080
Speaker 5: it's not just tariff measures but also restricting access to

774
00:37:19,160 --> 00:37:23,040
Speaker 5: critical minerals. Is that something given the role that those

775
00:37:23,080 --> 00:37:25,759
Speaker 5: play in quantum computing, that could affect your company.

776
00:37:26,320 --> 00:37:29,280
Speaker 10: Well, it can affect some companies in the quantum computing space.

777
00:37:29,360 --> 00:37:31,279
Speaker 3: Fortunately it doesn't impact I n Q.

778
00:37:32,560 --> 00:37:36,880
Speaker 10: Just yesterday, DARPA in fact awarded US the first stage

779
00:37:37,560 --> 00:37:40,759
Speaker 10: of their own journey towards building you know, let's call

780
00:37:40,800 --> 00:37:44,239
Speaker 10: it encryption, cracking and encryption protection. So, you know, the

781
00:37:44,280 --> 00:37:49,120
Speaker 10: basis of modern civilization relies on secure communications. You know,

782
00:37:49,200 --> 00:37:52,880
Speaker 10: battlefield the future relies on secure battlefield of today relies

783
00:37:52,920 --> 00:37:56,520
Speaker 10: on secure communications. And ultimately, you know, quantum computing helps

784
00:37:56,560 --> 00:37:59,640
Speaker 10: you both optimize that and quantum networking helps you ensure

785
00:38:00,040 --> 00:38:02,759
Speaker 10: that e commerce banking you know, you name it as

786
00:38:02,840 --> 00:38:06,680
Speaker 10: we know it today goes on you know, perpetually, right,

787
00:38:06,840 --> 00:38:09,400
Speaker 10: So this is an issue that you know, we fortunately

788
00:38:09,440 --> 00:38:12,040
Speaker 10: are well funded, our stock of course has not had

789
00:38:12,080 --> 00:38:14,399
Speaker 10: a great day to day, but our stock has had

790
00:38:14,400 --> 00:38:18,279
Speaker 10: a better day than than than everybody else who's exposed,

791
00:38:18,440 --> 00:38:21,120
Speaker 10: you know, fully to these to these measures. For sure,

792
00:38:21,760 --> 00:38:24,680
Speaker 10: we're heartened by the fact that we've got such strong

793
00:38:24,719 --> 00:38:27,239
Speaker 10: support in Maryland and many other states, as well as

794
00:38:27,280 --> 00:38:32,480
Speaker 10: in the federal government. They all recognize the criticality of information,

795
00:38:32,600 --> 00:38:36,960
Speaker 10: the criticality of optimization, the criticality of computing. You know,

796
00:38:37,400 --> 00:38:40,040
Speaker 10: Jensen Huang will we'll see us as a competitor some day,

797
00:38:40,120 --> 00:38:42,360
Speaker 10: but at the moment, we're just expanding the compute market

798
00:38:42,680 --> 00:38:45,839
Speaker 10: with quantum processing units. And our technology that you can

799
00:38:45,880 --> 00:38:48,479
Speaker 10: see behind me is actually what's called an ion trap

800
00:38:48,600 --> 00:38:51,960
Speaker 10: quantum computer, and we don't have to import any minerals

801
00:38:52,000 --> 00:38:52,200
Speaker 10: for this.

802
00:38:52,600 --> 00:38:57,200
Speaker 2: Fortunately, this is really impressive stuff, Congressman, which is why,

803
00:38:57,200 --> 00:39:00,359
Speaker 2: of course you introduced us to ion Q No that

804
00:39:00,760 --> 00:39:04,279
Speaker 2: they're working at the University of Maryland. How concerned are

805
00:39:04,320 --> 00:39:09,160
Speaker 2: you about federal grants being withdrawn or being challenged by

806
00:39:09,160 --> 00:39:11,920
Speaker 2: this administration and testing the innovation of a company like this.

807
00:39:12,560 --> 00:39:16,960
Speaker 9: It's extremely problematic. And we've got other entities. Johns Hopkins

808
00:39:17,160 --> 00:39:19,600
Speaker 9: is Baltimore. They're outside of my district, but you know,

809
00:39:19,640 --> 00:39:22,840
Speaker 9: they just had to lay off two thousand employees based

810
00:39:22,880 --> 00:39:25,840
Speaker 9: on what the administration had done as far as cuts.

811
00:39:26,200 --> 00:39:30,080
Speaker 9: And if we're looking at growing the field of scientists

812
00:39:30,080 --> 00:39:32,880
Speaker 9: and engineers, they're coming up out of college, out of

813
00:39:32,920 --> 00:39:36,680
Speaker 9: graduate school and getting into these professions. Now he's wiping

814
00:39:36,719 --> 00:39:40,080
Speaker 9: out the grants that they used to do their research.

815
00:39:40,120 --> 00:39:42,920
Speaker 9: He's wiping out the indirect cost payments so that allowed

816
00:39:42,960 --> 00:39:45,960
Speaker 9: these universities to do it. He's wiping out the grants

817
00:39:46,840 --> 00:39:49,960
Speaker 9: in some instances, contracts to go to the federal agencies

818
00:39:50,040 --> 00:39:53,439
Speaker 9: like NASA where they research is done. So we've got

819
00:39:53,440 --> 00:39:56,239
Speaker 9: this crop coming up with no place to go here

820
00:39:56,280 --> 00:40:00,360
Speaker 9: in the United States, while by contrast with China, you know,

821
00:40:00,400 --> 00:40:03,040
Speaker 9: they're not only are they you know, growing more of

822
00:40:03,080 --> 00:40:06,839
Speaker 9: these people faster, but they're they're throwing dollars or you know,

823
00:40:07,000 --> 00:40:09,640
Speaker 9: the Chinese equivalent of that into funding it so they

824
00:40:09,640 --> 00:40:12,160
Speaker 9: can expand it quickly. We're still in the lead, but

825
00:40:12,520 --> 00:40:15,200
Speaker 9: you know, the president's walking us off the field right now,

826
00:40:15,239 --> 00:40:17,960
Speaker 9: and when we should be competing and maintaining the lead

827
00:40:18,000 --> 00:40:18,400
Speaker 9: that we have.

828
00:40:18,800 --> 00:40:21,040
Speaker 5: Well, Nikola, we only have a minute left. But can

829
00:40:21,080 --> 00:40:24,880
Speaker 5: the private sector make up for anything that are the

830
00:40:24,960 --> 00:40:27,600
Speaker 5: lack i guess of investment or a pullback and investment

831
00:40:27,640 --> 00:40:28,640
Speaker 5: from the public sector.

832
00:40:29,840 --> 00:40:32,640
Speaker 10: We're we're we're doing our best, Congressman, for sure. You know,

833
00:40:32,640 --> 00:40:35,840
Speaker 10: we're trying to grow the job, the job, the job market.

834
00:40:35,840 --> 00:40:37,799
Speaker 10: Our Quantum Center that we have in partnership with of

835
00:40:37,800 --> 00:40:40,879
Speaker 10: course Maryland and U m D. And we're very much

836
00:40:40,960 --> 00:40:43,759
Speaker 10: part of and and I think a central tenet of

837
00:40:43,800 --> 00:40:47,439
Speaker 10: the of the Quantum Initiative and expansion of our headquarters

838
00:40:47,560 --> 00:40:51,440
Speaker 10: to create those research opportunities, create companies and incubation and

839
00:40:51,520 --> 00:40:55,279
Speaker 10: entrepreneurship around our technology. So uh, you know, we're well

840
00:40:55,320 --> 00:40:57,120
Speaker 10: capitalized and we'll do all we you know, all we

841
00:40:57,200 --> 00:40:57,879
Speaker 10: can every day.

842
00:40:58,520 --> 00:41:00,120
Speaker 3: Needless to say that we rely on and.

843
00:41:00,160 --> 00:41:04,440
Speaker 10: Partnerships with Maryland, the university, federal government to ensure that

844
00:41:04,440 --> 00:41:08,520
Speaker 10: our technology makes it into the commercial sector, the public sector,

845
00:41:08,560 --> 00:41:12,399
Speaker 10: onto the battlefield, into drug discovery, into uh, you know,

846
00:41:12,640 --> 00:41:15,600
Speaker 10: let's just call it aerospace the future and optimization opportunities

847
00:41:15,600 --> 00:41:18,680
Speaker 10: of the future every day of the week. So let's

848
00:41:18,760 --> 00:41:21,400
Speaker 10: let's let's hope that this is a this is a

849
00:41:21,440 --> 00:41:23,600
Speaker 10: moment in time and then all up from here.

850
00:41:23,520 --> 00:41:27,080
Speaker 5: For both of us, all right. Nicoloa Demasi, President and

851
00:41:27,160 --> 00:41:30,920
Speaker 5: CEO of IONQ, joined by Democratic Congressman Blent Ivy of

852
00:41:30,960 --> 00:41:33,239
Speaker 5: Maryland here with us on Balance of Power today. Thank

853
00:41:33,280 --> 00:41:34,120
Speaker 5: you both so much.

854
00:41:37,920 --> 00:41:41,120
Speaker 2: Thanks for listening to the Balance of Power podcast. Make

855
00:41:41,160 --> 00:41:44,120
Speaker 2: sure to subscribe if you haven't already, at Apple, Spotify,

856
00:41:44,239 --> 00:41:46,799
Speaker 2: or wherever you get your podcasts, and you can find

857
00:41:46,880 --> 00:41:49,680
Speaker 2: us live every weekday from Washington, d C. At noontime

858
00:41:49,719 --> 00:41:51,760
Speaker 2: Eastern at Bloomberg dot com.