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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 Just Live weekdays at

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Speaker 1: noon Eastern on Appocarplay.

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Speaker 2: And then Rouno with the Bloomberg Business app.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 3: We're just as busy as New York is today with

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Speaker 3: this double dip of big economic events, a FED decision

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Speaker 3: coming up in just over half an hour. Joe after

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Speaker 3: cooler inflation data this morning on the headline monthly CPI figure,

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Speaker 3: we get a zero point zero.

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Speaker 4: Of our set. Yeah, kind of amazing. Markets love it.

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Speaker 4: White House likes it, but treading carefully. As we see

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Speaker 4: in the statement here, prices are still too high, writes

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Speaker 4: the statement from the White House. But today's report shows

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Speaker 4: welcome progress on lowering inflation. Let's go to the source

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Speaker 4: and a great opportunity just moments before our special coverage

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Speaker 4: begins here on today's FED meeting, to speak with Heather Bouchet,

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Speaker 4: a member of President Biden's Council of Economic Advisors. She's

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Speaker 4: with us from a beautiful north lawn today, and Heather,

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Speaker 4: it's great to have you back. As I read the

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Speaker 4: statement from the White House, which is clear as I

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Speaker 4: read at the outset, prices are still too high. I

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Speaker 4: also wonder if you're thinking inside about how far we've come.

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Speaker 5: Oh, we have come so far in so many different ways,

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Speaker 5: you know. I think about the economy that the President

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Speaker 5: inherited and so many challenges. How we got unemployment down,

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Speaker 5: how we got people back to work. And yes, prices

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Speaker 5: went up, but we have seen prices come down by

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Speaker 5: about sixty percent, and certainly good news today with the

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Speaker 5: zero you know, the flat increase in prices overall. So

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Speaker 5: this has certainly been giving. As the President likes to say,

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Speaker 5: family is a little bit more breathing room and is

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Speaker 5: good news for American families, and of course good news

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Speaker 5: for American workers today as we saw yet another month

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Speaker 5: of wages outpacing inflation. That marks fifteen months for the

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Speaker 5: eighty percent of the workforce that are production and non

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Speaker 5: supervisory employees where their wages have been outpacing inflation. So

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Speaker 5: that's great news for workers and their families.

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Speaker 3: Well, Heather, even as we talk about a flat figure

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Speaker 3: on the headline, there still is a bit more happening

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Speaker 3: beneath the surface that shows some stickiness in certain areas,

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Speaker 3: including shelter prices up four tenths of one percent owners

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Speaker 3: equivalent rent similar How can that realistically be addressed at

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Speaker 3: this point when there are arguments being made, including by

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Speaker 3: members of the Democratic Party like Senator Elizabeth Warren, that

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Speaker 3: this is something that high interest rates are actually exacerbating

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Speaker 3: because it costs more to borrow to buy a house.

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Speaker 3: How can you be confident, as long as rates remain high,

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Speaker 3: that the shelter price pressures are going to come down.

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Speaker 5: Well, let me give you two answers to that question,

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Speaker 5: first a technical one and then a policy one. So first,

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Speaker 5: you know, CA, the Council of Economic Advisors, we've been

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Speaker 5: tracking this for quite some time. The way that shelter

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Speaker 5: is accounted for. You know, you build in rents from

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Speaker 5: leases that were signed while ago, so you have a

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Speaker 5: good sense when you look at real time data how

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Speaker 5: this might shift over time. You know, we have been

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Speaker 5: estimating that these these numbers will come down as the

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Speaker 5: prices of new leases come down, and certainly that's what

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Speaker 5: we've been seeing in general. Now, granted we certainly want

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Speaker 5: to come those to come down more, but that's taking

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Speaker 5: up a larger share of the monthly increase in price changes.

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Speaker 5: On the second point though, in terms of policy, and

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Speaker 5: the President has been acutely aware of the challenges in housing.

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Speaker 5: You know, he has put together a comprehensive housing supply

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Speaker 5: plan and that would do a number of things. One

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Speaker 5: thing that I just would like to point out is

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Speaker 5: that that plan includes giving new home buyers a tax

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Speaker 5: credit to make it just that much more affordable, which

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Speaker 5: can help account help ease the burden of those higher

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Speaker 5: interest rates during these times, so that people can get

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Speaker 5: into those new homes.

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Speaker 4: Heather, at what point to higher interest rates in themselves

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Speaker 4: become inflationary or are we already there?

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Speaker 5: Well, listen, you know, we have been in this situation

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Speaker 5: for quite a while now, and the expectations of where

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Speaker 5: interest rates are have been baked into you know, forecasts

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Speaker 5: and where people are thinking about the economy. And certainly

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Speaker 5: this is challenging for folks making those big purchases or

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Speaker 5: things like that. But we remain optimistic that because of

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Speaker 5: the success in the economy, and you know, critically we've

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Speaker 5: made so much progress, and that very quick progress in

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Speaker 5: the beginning, but we have seen you know, things like

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Speaker 5: the gains and jobs and output that we're starting to

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Speaker 5: see those get down to that kind of pace that

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Speaker 5: is sustainable, and so that's what we're looking for. And

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Speaker 5: you know, here today, we're here to talk about the

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Speaker 5: fact that you know, we have these numbers on inflation

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Speaker 5: that beat expectations on the low side. That certainly is

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Speaker 5: its ongoing good news and means that we're going to

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Speaker 5: get that extra bit of breathing room in the economy

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Speaker 5: to continue.

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Speaker 3: Well, as we think about the strength of the economy

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Speaker 3: that you're characterizing and say the labor market specifically, we

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Speaker 3: have seen a lot more analysis of the way in

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Speaker 3: which migrants have contributed to that the idea that they

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Speaker 3: are actually playing a very key role in the strong

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Speaker 3: job growth we continue to see every single month. But

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Speaker 3: President Biden just signed an executive order essentially cracking down

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Speaker 3: on those seeking asylum. Heather, how quickly do you expect

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Speaker 3: that might actually show up in the data? What economic

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Speaker 3: impact could it have?

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Speaker 5: So the President does not expect this to have negative

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Speaker 5: implications on the economy. Certainly, we have seen that, you know,

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Speaker 5: immigrants are an important part of our labor market. They

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Speaker 5: add to the economy, they go out there and get

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Speaker 5: those jobs, and you know in all the different ways

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Speaker 5: than add to the economy as they're buying things. But

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Speaker 5: we also know that the economy is very strong right

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Speaker 5: now in terms of the labor market, and we've seen

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Speaker 5: an unemplomerate add or below four percent, for you know,

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Speaker 5: over two and a half years now, and so that

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Speaker 5: certainly is an indication of the strength that there are

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Speaker 5: a sufficient number of jobs out there for anybody who

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Speaker 5: you know, wants to go out and try to find

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Speaker 5: something that continues to be a strong labor market even

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Speaker 5: though we've had this immigration We're spending.

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Speaker 4: Time with Heather Bouchet live from the White House as

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Speaker 4: we prepare for our spend. She'll fed coverage here on

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Speaker 4: Bloomberg TV and radio. There's a big debate about to begin, Heather.

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Speaker 4: We were discussing it before you joined us, about potentially

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Speaker 4: making the Trump era tax cuts permanent. There's a big

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Speaker 4: drive among Republicans to make that happen. And as we

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Speaker 4: consider the potential impacts of greater deficits on inflation, I

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Speaker 4: wonder what you would see happening to our economy if

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Speaker 4: that took place. These are set to expire next year.

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Speaker 4: What would happen if they were made permanent.

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Speaker 5: Well, listen, here's the thing. We know that the kinds

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Speaker 5: of policies that the prior administration put forward, we're supposed

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Speaker 5: to lead to a ramp up and investment and productivity

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Speaker 5: and particularly in manufacturing jobs across the country, and that's

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Speaker 5: not what we saw. In fact, the President Biden's agenda

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Speaker 5: has led to that kind of sharp uptick in investment,

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Speaker 5: and not doing it through the massive tax cuts that

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Speaker 5: were not good for the economy, but actually doing it

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Speaker 5: through smart targeted policy that has led to real economic

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Speaker 5: out comes and communities all across the place. So, as

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Speaker 5: we're looking at this conversation about what should and should

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Speaker 5: not expire, the President's been very clear. He continues to

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Speaker 5: believe that no one making under four hun one thousand

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Speaker 5: dollars a year should see their taxes go up. But

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Speaker 5: he also knows that we should not be just having

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Speaker 5: giveaways for American businesses that are not tied to investment

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Speaker 5: in growth and the kinds of things that really matter

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Speaker 5: to our economy. So that, I think is where the

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Speaker 5: important real contrast is between that Tex Cuts and Jobs

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Speaker 5: Act that only starved a government of the resources that

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Speaker 5: it needed and the President's proposals that have been put

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Speaker 5: forward in a way that is helped to lower the

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Speaker 5: deficit but is also making those of the top pay

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Speaker 5: their fair share.

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Speaker 6: All right.

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Speaker 3: Heather Bouchet, member of the White House Council of Economic Advisors,

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Speaker 3: joining us from the north lawn of the White House today.

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Speaker 6: Thank you.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens

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Speaker 1: just Live weekdays at noon Eastern on Applecarplay and then

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Speaker 1: roud Oro with the Bloomberg Business at You can also

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Speaker 3: Often we talk about here in Washington the political implications

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Speaker 3: of that, but there also is a fiscal question around

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Speaker 3: the very high level of borrowing costs and an incredibly

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Speaker 3: high level of debt. And as we get ready to

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Speaker 3: see former President Donald Trump meeting with congressional Republicans tomorrow,

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Speaker 3: addressing the debt, also addressing just the ledger, how much

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Speaker 3: money's coming in versus how much money is going out,

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Speaker 3: definitely going to be on the AGECTA.

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Speaker 4: Yeah, that's right. And of course there's going to be

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Speaker 4: a big drive for Donald Trump supporters to reinstate or

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Speaker 4: make permanent is a better way to put it. The

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Speaker 4: twenty seventeen Trump tax cuts. They are set to expire

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Speaker 4: next year, Kayley, and this is a big push in Washington.

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Speaker 4: We're already hearing a lot about this, and it's at

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Speaker 4: a time that frequently the concept of debt and deficits

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Speaker 4: can be forgotten in a campaign season. But it's obviously

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Speaker 4: an issue that Washington needs to get its.

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Speaker 3: Arms around pret quick, especially when you consider the potential

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Speaker 3: impact that that could have. I actually spoke about this

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Speaker 3: last month with Philip Swegel, who's the director of the

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Speaker 3: Congressional Budget Office, and he talked about how much it

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Speaker 3: would cost realistically to keep those tax cuts intact in

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Speaker 3: twenty twenty five.

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Speaker 7: That's right, that important parts of the twenty seventeen tax

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Speaker 7: Act expire at the end of next year, at the

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Speaker 7: end of twenty twenty five. Those are not in our

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Speaker 7: physical projections in the sense of the taxes referred to

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Speaker 7: the pre December twenty seventeen law and is more revenue.

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Speaker 7: So extending the parts of the tax Act that expire

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Speaker 7: would cost upwards of three trillion dollars over ten years,

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Speaker 7: and really closer to four trillion dollars, including the interrat service.

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Speaker 4: Three to four trillion dollars. We're talking big money here,

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Speaker 4: and it's going to prompt a conversation about spending as

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Speaker 4: well as taxation while we're at it, Kayley, and that's

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Speaker 4: where Kevin Brady comes in with us at the table today.

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Speaker 4: You know him as Congressman. We call him former Congressman,

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Speaker 4: now former chairman of the House Ways and Means Committee.

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Speaker 4: Kevin Brady is now spokesman for the Alliance for Competitive

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Speaker 4: Taxation and we're lucky to have him just in time

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Speaker 4: for the annual Congressional baseball Game. It's great to see you.

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Speaker 4: Welcome back to Blueberg. Thanks for having What a treat

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Speaker 4: to have you at the table here. This is going

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Speaker 4: to be part of your cause. So what do you

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Speaker 4: have as a response when you hear about debt and

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Speaker 4: deficits as an answer to making these tax cuts?

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Speaker 8: Yeah, so when you have to ask a question, what's

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Speaker 8: happens if they don't extend? So, you know, putting a

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Speaker 8: three to four trillion dollar tax hikes on families, main

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Speaker 8: street businesses, on American competitiveness has real consequences for lower paychecks,

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Speaker 8: much lower growth in the economy US less competitive at a

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Speaker 8: timetime is super aggressive, you.

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Speaker 5: Know what I mean.

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Speaker 8: They want to dominate our industries and technologies, and so

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Speaker 8: I think it's going to be crucial for both parties

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Speaker 8: to find a way forward to extend those tax cuts,

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Speaker 8: especially for those families, mainStreet businesses, and our competitiveness. You

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Speaker 8: may remember. The reason we did it is that for

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Speaker 8: a decade before twenty seventeen, the economy was slow growth

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Speaker 8: less than two percent. For a decade, paychecks have been flat,

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Speaker 8: and every other month we saw another US company move overseas.

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Speaker 2: So we had to.

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Speaker 8: Modernize the code in a big way lower rates. But

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Speaker 8: we didn't in such a way. We created code built

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Speaker 8: for growth of jobs and the economy and paycheck. We

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Speaker 8: wanted to make sure we were the desirable location for

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Speaker 8: new plants, innovation.

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Speaker 9: We did that.

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Speaker 8: We wanted one of the most competitive economies on the planet.

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Speaker 8: We did that, and as a result, paychecks the thing

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Speaker 8: I think I'm proud oft of. In the first three

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Speaker 8: years after tax reform, paychecks inflation adjusted went up nine percent,

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Speaker 8: the highest level since we began keeping records. So people

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Speaker 8: were getting ahead in a big way. That's really the

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Speaker 8: legacy of those cuts and why Congress has to find

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Speaker 8: a way to extend those or make them permanent.

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Speaker 3: But people were getting ahead at the same time the

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Speaker 3: deficit was growing. So if you, as you say, businesses

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Speaker 3: and consumers actually need these to stay in place, how

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Speaker 3: do you make it fiscally responsible?

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Speaker 8: Yeah, So the good news is there's ways and here's why.

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Speaker 8: You know, people remember the tax cuts is costing one

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Speaker 8: and a half trillion dollars, even though we've seen record revenue,

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Speaker 8: Like corporate rate revenue today is higher at twenty one

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Speaker 8: percent than it was at thirty five percent because of

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Speaker 8: the growth, so we've seen good growth. But bottom line

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Speaker 8: is the actual cuts for five and a half trillion dollars.

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Speaker 8: We paid for four trillion dollars of it reforms to

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Speaker 8: lower the rates, to modernize the code, and to grow

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Speaker 8: the economy in a big way. So lawmakers, as they

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Speaker 8: extend the tax cuts, will also extend the reforms that

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Speaker 8: help pay for that won't cover all of it. It's

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Speaker 8: a good solid step. So depending on the party, depending

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Speaker 8: on in an era where deathsit and debths really matter,

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Speaker 8: you know, both parties are going to have to decide,

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Speaker 8: so do we pay for all of it? We pay

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Speaker 8: for most of it. You know, what does that good

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Speaker 8: policy look there? And so they're going to have to

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Speaker 8: be looking at similar type reforms as we did in

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Speaker 8: twenty seventeen going forward for that very reason, to make

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Speaker 8: sure we're not adding, you know, significant amounts to the debt.

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Speaker 4: But you're sitting down there in Texas looking up at

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Speaker 4: this crowd. Now, we can hardly figure out a budget

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Speaker 4: to pay for the government, never mind deal with the

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Speaker 4: debt ceiling that's going to be looming. You do you

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Speaker 4: trust the people who currently serve in Congress to do

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Speaker 4: what you just said, extend the tax cuts and find

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Speaker 4: a way to pay for it.

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Speaker 8: You know, I do? And here's why. I think there's

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Speaker 8: a middle class in Congress people you don't see or

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Speaker 8: hear about often. They are very solid, trying to do

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Speaker 8: the right thing, serious lawmakers, and they're going to be

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Speaker 8: the ones to be putting these.

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Speaker 4: Packages together on both sides of the office.

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Speaker 8: So I believe there's I believe there is, and I

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Speaker 8: think that they can because sort of like twenty twelve

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Speaker 8: when we saw the Bush tax cuts expire, both parties

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Speaker 8: had a lot at stake, you know what I mean

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Speaker 8: in that and they do again in twenty twenty five.

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Speaker 8: The thing is, my point is, don't just extend or

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Speaker 8: permanent keep improving the tax code. We can be more

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Speaker 8: pro growth. It can be simpler, especially on small businesses.

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Speaker 8: There are things have changed, you know, because of China's

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Speaker 8: so super competitive. AI has changed things innovation should be,

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Speaker 8: especially for our US companies, the country the winds the

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Speaker 8: innovation race, wins the future and acts as top priorities

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Speaker 8: are keep America competitive, make us the most desirable place

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Speaker 8: for those new plants innovation, keep incentivizing innovation in the US.

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Speaker 8: And I think those are policies both parties, I think

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Speaker 8: can embrace.

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Speaker 3: Well, it's going to be one party or at least

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Speaker 3: the majority of the parties in both chambers meeting with

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Speaker 3: Donald Trump when he's here at Washington tomorrow. To what

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Speaker 3: extent is he already influential on this conversation, knowing that

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Speaker 3: there was a bipartisan tax bill that passed the House

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Speaker 3: with massive bipartisan majority that ended up going nowhere in

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Speaker 3: the Senate, and some people were telling us it's because

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Speaker 3: it's an election year and if you expand the child

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Speaker 3: tax credit, potentially Biden gets credit for it. Comes political

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Speaker 3: I wonder what you think of that narrative.

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Speaker 8: Yeah, so I think one president presidenthp's very influential, certainly

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Speaker 8: among the republic Party and party. These drove his economic

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Speaker 8: agenda that is so popular with the American people, so

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Speaker 8: he's got a big stake extending that in the corporate

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Speaker 8: rate cut, for example, that drove so much the paycheck

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Speaker 8: wage growth was his signature achievement, So he's going to

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Speaker 8: play a big role. I think some of the dynamics

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Speaker 8: of this year's tax bill will still be front and

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Speaker 8: center in twenty twenty five. You know, you're gonna have businesses,

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Speaker 8: you know, Republicans that want the middle class cuts, the

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Speaker 8: small business cuts remaining place, and want America to be

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Speaker 8: super competitive. Democrats are going to want a child tax

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Speaker 8: credit that looks like the COVID era credit. They're going

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Speaker 8: to want to defend the Green Energy Subsidies Inflation Reduction Act.

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Speaker 8: So you can already see sort of the battle lines

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Speaker 8: being drawn. But twenty twenty five, with the prospect of

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Speaker 8: three or four trillion dollars of tax hikes, it's gonna

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Speaker 8: to focus leaders in both those parties, tax writers who

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Speaker 8: are already beginning their work.

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Speaker 4: We're still waiting for the task COO to fit on

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Speaker 4: a postcard. Wasn't that going to happen?

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Speaker 8: You know, I'll tell you what in the house we

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Speaker 8: did exactly that. Our version was thirteen lines on a

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Speaker 8: postcard that ninety percent of Americans would use to file

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Speaker 8: I still dream about that because others. Can you imagine

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Speaker 8: you and I looking at a postcard and saying, this

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Speaker 8: is how I'm taxed, and more importantly, that's how my

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Speaker 8: neighbor is taxed. There's real power to simplicity. So I'm

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Speaker 8: you know, if you asked me things I'd dream about,

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Speaker 8: I wish we could have actually achieved, you know, the

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Speaker 8: postcard and that fairness from that is certainly.

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Speaker 10: One of them.

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Speaker 3: On the subject of what could be dream and what

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Speaker 3: could be achievable, we had Donald Trump over this past

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Speaker 3: weekend in Nevada floating no taxes on tipped income.

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Speaker 1: Yeah.

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Speaker 3: Do you think that is actually something workable knowing he

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Speaker 3: would need congressional approval to actually do that in a

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Speaker 3: second administration? Or do you think that was just kind

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Speaker 3: of an idea that was thrown out there given the audience.

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Speaker 8: No, I think it doesn't surprise me. Here's why because

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Speaker 8: during tax reform especially, you couldn't be at the White

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Speaker 8: House that he wasn't asking what are we doing for

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Speaker 8: the little guys? What are we doing for the blue

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Speaker 8: collar workers? I mean, that is part of who he is.

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Speaker 8: I don't know tons about the tip thing, but here's

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Speaker 8: so full disclosure. I'm one of those people. I want

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Speaker 8: fewer tax provisions for some lower rates for everyone. I

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Speaker 8: think that's the fairness here. But I think there's two impacts. One,

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Speaker 8: if you tax less is something to get more of it,

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Speaker 8: So I think there'll be more wages sort of redesigned

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Speaker 8: on the tip model. Secondly, those are industries that really

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Speaker 8: have trouble hiring people and keeping them, you know, I

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Speaker 8: mean those service industries, So you may see more young people.

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Speaker 8: I was a waiter and a bartender. I've lived that

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Speaker 8: tip life as well, and so you see may see

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Speaker 8: more people drawn to some of those service industries that traditionally,

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Speaker 8: you know, it's been hard to cover those tables.

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Speaker 10: That's for sure.

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Speaker 7: Yeah.

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Speaker 3: All right, well sir, great to have you here in

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Speaker 3: our studio. Thank you so much for joining us. Kevin

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Speaker 3: great indeed, beautiful night here in Washington. Former Chair of

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Speaker 3: the House Ways and Means Committee now spokesman for the

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Speaker 3: Alliance for Competitive Taxation. We appreciate you joining us. We

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Speaker 3: want to turn now to our political panel as we

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Speaker 3: look ahead to the perhaps non tax related discussions that

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Speaker 3: will be happening on Capitol Hill tomorrow between former President

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Speaker 3: Trump and Congressional Republicans. Rick Davis and Jeanie Shanze. Know

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Speaker 3: our signature political panel contributors here at Bloomberg are joining

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Speaker 3: us now. So, Rick, do you think that there's actual

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Speaker 3: items on the agenda for these meetings or is most

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Speaker 3: of this about optics in the show.

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Speaker 2: Yeah?

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Speaker 11: Well, first of all, you can't get away from the

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Speaker 11: optics in the show.

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Speaker 5: Right.

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Speaker 2: We're right in the middle of.

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Speaker 11: A presidential contest, and I think that part of what

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Speaker 11: Donald Trump's message is going to be is, Hey, our

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Speaker 11: boat floats with me at the top of the ticket.

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Speaker 11: Anybody who thinks that they can do better is crazy.

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Speaker 11: Everybody needs a rally around my annidacy. It's going to

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Speaker 11: be all about how the top of the ticket's going

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Speaker 11: to drive the outcome of the election.

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Speaker 2: And that's the political message.

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Speaker 11: I think that when you get into substance, I think

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Speaker 11: that Donald Trump's gonna make sure, nobody goes out there

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Speaker 11: with a with an agenda that somehow puts either his

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Speaker 11: campaign in a bad light or the Biden administration in

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Speaker 11: a good light.

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Speaker 2: You know, I certainly I'm the untold message.

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Speaker 11: You won't say this specifically, I would assume, but you

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Speaker 11: never know what Donald Trump is that don't do anything

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Speaker 11: it's going to cause me any problems between now and November.

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Speaker 11: That is probably the most important thing, because there are

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Speaker 11: various elements of the House and the Senate who have

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Speaker 11: agenda items that could cross pressure his campaign, and he

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Speaker 11: doesn't want any of that stuff happening. So it's almost like,

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Speaker 11: play along with my campaign. Do what I tell you

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Speaker 11: to do. We're all unified around me, and don't do

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Speaker 11: anything between now and November that's going to cause a

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Speaker 11: problem from my campaign.

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Speaker 4: Genie, you just heard the pitch from none other than

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Speaker 4: Kevin Brady, who used to share the House Ways and

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Speaker 4: Means Committee, with a strong argument on making the Trump

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Speaker 4: era tax cuts, as we call them, permanent. This is

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Speaker 4: going to be a big debate that makes its way

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Speaker 4: onto the campaign trail. What's Joe Biden's answer, Well, first

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Speaker 4: of all, I.

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Speaker 10: Love the thirteen lines. I remember a good postcard, and

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Speaker 10: I love that, so I wish Kevin Brady would come

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Speaker 10: back and fulfill that. I think what is going to happen,

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Speaker 10: or what should happen in a serious discussion, is to

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Speaker 10: look back and look at the reality of Donald Trump's record.

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Speaker 1: You know, he.

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Speaker 10: Promised cuts, and he delivered those cuts for billionaires, for

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Speaker 10: the very wealthy, and for big corporations. He reduces the

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Speaker 10: corporate income tax to twenty one percent. He's the first

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Speaker 10: president it's Herbert Hoover to leave with less jobs than

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Speaker 10: when he came in. And of course he had the

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Speaker 10: pandemic to deal with, so I will cut him some

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Speaker 10: slack on that. And the budget deficit a sword under

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Speaker 10: both him and Joe Biden, and we're now over three trillions.

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Speaker 10: So you know, I think he likes to hype his record,

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Speaker 10: but I think real serious questions have to be asked

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Speaker 10: about both his record in the past and what he

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Speaker 10: wants to do now. If he wants to grow our military,

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Speaker 10: for instance, how is he going to do that? If

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Speaker 10: he is cutting revenue. You know, in a way, this

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Speaker 10: isn't complicated. You if you're going to spend more, you

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Speaker 10: got to tell us what you're going to cut. I

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Speaker 10: don't suspect we hear any of that tomorrow, by the way,

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Speaker 10: but I think those are the serious discussions that have

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Speaker 10: to be had. And I think on Joe Biden's part,

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Speaker 10: he's got to say, we haven't reached where we should.

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Speaker 10: We still have very high costs in this country, but

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Speaker 10: we are moving in the right direction. And I am

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Speaker 10: going to take on all of those corporate billionaires and

440
00:21:48,640 --> 00:21:52,399
Speaker 10: the corporations that Donald Trump has been delivering for and

441
00:21:52,520 --> 00:21:55,240
Speaker 10: continues to promise to deliver for if they give a

442
00:21:55,240 --> 00:21:56,760
Speaker 10: billion dollars to his campaign.

443
00:21:58,320 --> 00:22:00,439
Speaker 3: Well, Rick, to Jeanie's point on a few are going

444
00:22:00,480 --> 00:22:03,280
Speaker 3: to reduce revenue. You also need to reduce spending. We

445
00:22:03,359 --> 00:22:05,919
Speaker 3: all know how big the slice of the pie is

446
00:22:05,960 --> 00:22:08,600
Speaker 3: that you can actually reduce. Because the mandatory part of

447
00:22:08,600 --> 00:22:11,960
Speaker 3: the ledger is just so much larger than everything else,

448
00:22:12,000 --> 00:22:14,760
Speaker 3: there's very little discretionary that you can actually cut. The

449
00:22:14,800 --> 00:22:17,160
Speaker 3: problem is when all of that, or a big chunk

450
00:22:17,200 --> 00:22:20,080
Speaker 3: of that is entitlements. Neither Joe Biden nor Donald Trump

451
00:22:20,160 --> 00:22:22,760
Speaker 3: can touch that politically, right, that's.

452
00:22:22,800 --> 00:22:25,879
Speaker 11: Well, certainly they're not going to touch it between now

453
00:22:25,880 --> 00:22:29,520
Speaker 11: and election day. They've both been very clear about their

454
00:22:29,680 --> 00:22:33,560
Speaker 11: lack of interest in reforming entitlements. The real question is

455
00:22:34,240 --> 00:22:37,520
Speaker 11: both of these guys, regardless of who wins, this will

456
00:22:37,560 --> 00:22:41,200
Speaker 11: be the last job of their political career, and so

457
00:22:41,359 --> 00:22:44,600
Speaker 11: they have an opportunity to then sit back and say,

458
00:22:44,640 --> 00:22:47,320
Speaker 11: you know, in order to reform some of our fiscal house,

459
00:22:48,040 --> 00:22:51,880
Speaker 11: we have got to start to get these entitlements under control,

460
00:22:52,440 --> 00:22:54,320
Speaker 11: because as you point out, Kaylee, I mean, there is

461
00:22:54,359 --> 00:22:57,040
Speaker 11: no such thing as cutting a budget without touching the entitlements.

462
00:22:57,080 --> 00:22:58,639
Speaker 2: The rest of it is just optics.

463
00:22:59,280 --> 00:23:01,840
Speaker 11: And so that's the question is do they have the

464
00:23:01,880 --> 00:23:05,879
Speaker 11: political wisdom and courage in the last four years of

465
00:23:05,880 --> 00:23:08,159
Speaker 11: their political career to try and put the country on

466
00:23:08,200 --> 00:23:11,040
Speaker 11: the right track when it comes to the successive entitlement

467
00:23:11,119 --> 00:23:14,080
Speaker 11: spending that's going to bankrupt the country at some point

468
00:23:14,119 --> 00:23:16,040
Speaker 11: if it's continued to go unchecked.

469
00:23:18,400 --> 00:23:21,320
Speaker 4: Our great panel, Rick Davis and Jeanie Shanzano or signature

470
00:23:21,320 --> 00:23:23,240
Speaker 4: panel on Balance of Power, and many thanks to both

471
00:23:23,240 --> 00:23:25,679
Speaker 4: of you for helping us distill all of this. We're

472
00:23:25,720 --> 00:23:27,320
Speaker 4: going to be talking a lot more about it, of course,

473
00:23:27,359 --> 00:23:29,840
Speaker 4: tomorrow when Donald Trump makes his visit here to Washington,

474
00:23:29,920 --> 00:23:32,560
Speaker 4: d C. Meeting with lawmakers on the House and the

475
00:23:32,600 --> 00:23:33,359
Speaker 4: Senate sides.

476
00:23:37,119 --> 00:23:40,640
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

477
00:23:40,720 --> 00:23:44,320
Speaker 1: us live weekdays at noon Eastern on Applecarplay and Enrounoto

478
00:23:44,440 --> 00:23:47,479
Speaker 1: with the Bloomberg Business app. Listen on demand wherever you

479
00:23:47,520 --> 00:23:50,960
Speaker 1: get your podcasts, or watch us live on YouTube.

480
00:23:51,680 --> 00:23:56,199
Speaker 4: Go to YouTube search Bloomberg Global News. Our live stream

481
00:23:56,840 --> 00:23:58,760
Speaker 4: is flying and we would love to have you join

482
00:23:58,840 --> 00:24:01,560
Speaker 4: us always. However you find us here on Bloomberg, we

483
00:24:01,600 --> 00:24:04,919
Speaker 4: make it pretty easy, and we'll be inviting our global

484
00:24:04,920 --> 00:24:07,520
Speaker 4: television audience in the next hour as we gear up

485
00:24:07,560 --> 00:24:10,520
Speaker 4: for the decision on interest rates and of course the

486
00:24:10,560 --> 00:24:14,240
Speaker 4: news conference that's going to follow. What Lindsey Owens would

487
00:24:14,280 --> 00:24:17,879
Speaker 4: ask if she were in that news conference today with

488
00:24:18,040 --> 00:24:21,280
Speaker 4: the chair Jay Powell, or maybe what she would say,

489
00:24:21,960 --> 00:24:26,359
Speaker 4: I told you so. She's not like that though. Groundwork

490
00:24:26,400 --> 00:24:30,920
Speaker 4: Collaborative executive director, former Senior economic policy advisor to Senator

491
00:24:30,920 --> 00:24:34,000
Speaker 4: Elizabeth Warren. Didn't that cross your mind? Great to see, lindsay,

492
00:24:34,119 --> 00:24:36,119
Speaker 4: at eight thirty this morning, you said I told you so.

493
00:24:36,400 --> 00:24:38,280
Speaker 4: You should have started cutting by now.

494
00:24:39,920 --> 00:24:43,959
Speaker 12: Oh no, not quite, not quite that spacier vindictive. I mean,

495
00:24:44,000 --> 00:24:45,560
Speaker 12: I just think for me, when I saw the numbers

496
00:24:45,600 --> 00:24:50,040
Speaker 12: this morning, breathed, breathed a huge sigh of relief. You know,

497
00:24:50,200 --> 00:24:54,040
Speaker 12: zero percent, zero year over year inflation. You know, it's

498
00:24:54,040 --> 00:24:56,479
Speaker 12: hard to get much better than that. And you know,

499
00:24:56,520 --> 00:24:58,920
Speaker 12: the second thought that came into my mind was be

500
00:24:58,920 --> 00:25:01,480
Speaker 12: better cut in September. I mean, there is no reason

501
00:25:01,960 --> 00:25:04,200
Speaker 12: to be looking past September to November.

502
00:25:04,240 --> 00:25:08,200
Speaker 4: Now, Okay, I got you. Are we going to hear

503
00:25:08,240 --> 00:25:11,560
Speaker 4: that today or are you concerned that higher for longer

504
00:25:12,119 --> 00:25:13,600
Speaker 4: remains the message this summer?

505
00:25:15,040 --> 00:25:15,280
Speaker 6: Yeah?

506
00:25:15,320 --> 00:25:18,520
Speaker 12: I mean I am really concerned that this may slip

507
00:25:18,520 --> 00:25:21,760
Speaker 12: to November. I think, you know, Powell has been pretty

508
00:25:21,800 --> 00:25:25,200
Speaker 12: hawkish on this front, but I think the data really

509
00:25:25,240 --> 00:25:28,679
Speaker 12: supports a September cut for a couple of reasons. But

510
00:25:28,760 --> 00:25:32,040
Speaker 12: the primary one is we are now if you exclude

511
00:25:32,200 --> 00:25:35,520
Speaker 12: owners equivalent of rent, we are now actually on the

512
00:25:35,600 --> 00:25:39,560
Speaker 12: year below the FEDS two percent target. So the last

513
00:25:39,600 --> 00:25:42,560
Speaker 12: mile here is housing. This is a housing story. We've

514
00:25:42,560 --> 00:25:46,320
Speaker 12: talked about this before and again. The interest rate environment

515
00:25:46,440 --> 00:25:48,960
Speaker 12: does not do you any favors on the housing front,

516
00:25:49,040 --> 00:25:53,199
Speaker 12: and if anything, could be exacerbating some of the housing

517
00:25:53,240 --> 00:25:56,800
Speaker 12: price issues that we're seeing lingering in the inflation numbers.

518
00:25:56,840 --> 00:25:59,760
Speaker 12: So the rest of the data suggests that we have

519
00:25:59,800 --> 00:26:02,760
Speaker 12: got to see cuts and the housing story doesn't get

520
00:26:02,760 --> 00:26:06,720
Speaker 12: better with this punitively high interest rate environment.

521
00:26:08,520 --> 00:26:12,879
Speaker 4: Whether we're talking housing or just broadly, lindsay, at what

522
00:26:13,040 --> 00:26:16,160
Speaker 4: point do high interest rates become inflationary on their own?

523
00:26:17,720 --> 00:26:19,560
Speaker 6: I mean, I think we're pretty much they are right.

524
00:26:19,920 --> 00:26:22,800
Speaker 12: We've got folks locked out of the mortgage market because

525
00:26:22,880 --> 00:26:25,919
Speaker 12: the cost of borrowing is prohibitively high. We're starting to

526
00:26:25,920 --> 00:26:31,200
Speaker 12: see an increase in credit card delinquencies for some borrowers.

527
00:26:31,320 --> 00:26:34,760
Speaker 12: That's not a great situation to be in. Economically, we're

528
00:26:34,800 --> 00:26:37,879
Speaker 12: starting to see a little bit of signs of a

529
00:26:37,920 --> 00:26:41,080
Speaker 12: slowing labor market. I mean, we're still, obviously just in

530
00:26:41,080 --> 00:26:42,760
Speaker 12: an incredibly strong labor market.

531
00:26:42,800 --> 00:26:44,520
Speaker 6: We've had now more.

532
00:26:44,359 --> 00:26:48,880
Speaker 12: Than two full years of unemployment at or below four percent.

533
00:26:49,720 --> 00:26:52,600
Speaker 12: We're seeing folks who've been on the sidelines in the

534
00:26:52,640 --> 00:26:55,200
Speaker 12: labor market who've wanted to get pulled into the labor

535
00:26:55,240 --> 00:26:58,480
Speaker 12: market able to get jobs. Americans with disabilities are able

536
00:26:58,520 --> 00:27:02,919
Speaker 12: to get jobs at higher rates than in decades past.

537
00:27:03,480 --> 00:27:05,679
Speaker 12: So you know, we've got a really strong economy here.

538
00:27:05,680 --> 00:27:07,320
Speaker 12: But I do think the Fed has got to stick

539
00:27:07,359 --> 00:27:09,320
Speaker 12: to its promised to follow the data, and the data

540
00:27:09,359 --> 00:27:12,359
Speaker 12: is saying, look, we're we're below the FEDS two percent

541
00:27:12,359 --> 00:27:13,359
Speaker 12: target when you pull out.

542
00:27:13,320 --> 00:27:14,520
Speaker 6: Owners equivalent of rent.

543
00:27:14,800 --> 00:27:17,359
Speaker 12: The other thing we're seeing on the housing front here is,

544
00:27:17,800 --> 00:27:20,720
Speaker 12: you know, new leases are are coming in low, so

545
00:27:20,880 --> 00:27:24,160
Speaker 12: this is really kind of a hangover of older leases.

546
00:27:24,320 --> 00:27:26,720
Speaker 12: And that's not a problem you solve with with high

547
00:27:26,760 --> 00:27:29,320
Speaker 12: interest rates, right. You know, people have just got to

548
00:27:30,600 --> 00:27:33,320
Speaker 12: you know, flow through those older leases. They you know,

549
00:27:33,359 --> 00:27:35,960
Speaker 12: they come back online and you get those at lower

550
00:27:36,000 --> 00:27:39,840
Speaker 12: price points. So I'm definitely ready for interest rate cuts,

551
00:27:40,280 --> 00:27:44,000
Speaker 12: I'll tell you. I find it quite concerning that you

552
00:27:44,119 --> 00:27:47,240
Speaker 12: hear over and over again in Washington that the Federal

553
00:27:47,240 --> 00:27:50,960
Speaker 12: Reserve chair will be uncomfortable cutting interest rates in September

554
00:27:51,000 --> 00:27:52,600
Speaker 12: because it's so close.

555
00:27:52,359 --> 00:27:53,000
Speaker 4: To the election.

556
00:27:53,760 --> 00:27:58,040
Speaker 6: And you know, I actually view that that position.

557
00:27:58,119 --> 00:28:00,320
Speaker 12: I understand that folks think he's trying to sort of

558
00:28:00,359 --> 00:28:03,480
Speaker 12: not to be political by not cutting interest rates before

559
00:28:03,480 --> 00:28:03,919
Speaker 12: the election.

560
00:28:04,560 --> 00:28:08,240
Speaker 6: I view that as dangerously political ground. If the data.

561
00:28:08,040 --> 00:28:10,560
Speaker 12: Supports a cut in September, there should be a cut

562
00:28:10,600 --> 00:28:13,520
Speaker 12: in September, right. He shouldn't sort of be playing timing

563
00:28:13,560 --> 00:28:16,600
Speaker 12: games with the election here. Manage the economy like you

564
00:28:16,640 --> 00:28:20,159
Speaker 12: said you would, adhering to the data and go for

565
00:28:20,240 --> 00:28:21,200
Speaker 12: the cut in September.

566
00:28:22,320 --> 00:28:25,520
Speaker 4: It's really something to when you read the President's statement

567
00:28:25,560 --> 00:28:29,440
Speaker 4: on this today, it begins by saying, not, you know, hey,

568
00:28:29,520 --> 00:28:32,359
Speaker 4: look everyone, this is great news. It begins by saying

569
00:28:32,359 --> 00:28:35,560
Speaker 4: prices are still too high, and he has to keep

570
00:28:35,600 --> 00:28:38,280
Speaker 4: saying that. I suspect publicly. We're going to talk to

571
00:28:38,320 --> 00:28:41,520
Speaker 4: Wendy Benjaminson about that in just a second, Lindsay. The

572
00:28:41,600 --> 00:28:44,960
Speaker 4: fact is he's got to be thinking, look how far

573
00:28:45,040 --> 00:28:46,280
Speaker 4: we've come, right.

574
00:28:47,600 --> 00:28:51,120
Speaker 12: I mean absolutely, you know, we're now almost two years

575
00:28:51,200 --> 00:28:54,600
Speaker 12: of inflation falling off. It's June twenty twenty two peak, right,

576
00:28:55,160 --> 00:28:58,720
Speaker 12: so we've come a huge way here. But Americans are

577
00:28:58,840 --> 00:29:02,120
Speaker 12: upset about high prices, and they're also upset about how

578
00:29:02,160 --> 00:29:06,560
Speaker 12: pricing works. And the administration has been taking this on aggressively.

579
00:29:07,160 --> 00:29:10,360
Speaker 12: The junk fees that Americans are paying, the drip pricing,

580
00:29:10,440 --> 00:29:13,720
Speaker 12: the personalized pricing, You paying more than your neighbor for

581
00:29:13,800 --> 00:29:17,880
Speaker 12: the same sweater because of the user interface dark pattern

582
00:29:17,920 --> 00:29:21,880
Speaker 12: you got pushed into through your Instagram app. I think

583
00:29:22,000 --> 00:29:24,400
Speaker 12: you know, it's not just the high prices Americans are

584
00:29:24,480 --> 00:29:24,960
Speaker 12: upset about.

585
00:29:25,040 --> 00:29:26,240
Speaker 6: It's how pricing works.

586
00:29:26,280 --> 00:29:28,080
Speaker 12: And I think you know what he said into his

587
00:29:28,160 --> 00:29:30,720
Speaker 12: statement is he's also taking that on. He's taking on

588
00:29:30,760 --> 00:29:34,040
Speaker 12: the drug companies who are jacking up the price of insulin.

589
00:29:34,240 --> 00:29:37,680
Speaker 12: He's taking on the hotels who are adding all manner

590
00:29:37,720 --> 00:29:41,480
Speaker 12: of you know, fees and other sort of deceptive add

591
00:29:41,520 --> 00:29:44,600
Speaker 12: ons to your total bill at the end of your stay.

592
00:29:45,000 --> 00:29:46,920
Speaker 12: And I think that stuff is really resonating with the

593
00:29:46,920 --> 00:29:49,520
Speaker 12: public because they're sick of that crap. And so that's

594
00:29:49,560 --> 00:29:51,320
Speaker 12: also what he said in his statement today, is that

595
00:29:51,360 --> 00:29:52,360
Speaker 12: he's doubling.

596
00:29:51,960 --> 00:29:52,960
Speaker 6: Down on those efforts.

597
00:29:54,000 --> 00:29:55,640
Speaker 4: So you have it from Lindsay Owens. It's good to

598
00:29:55,640 --> 00:29:57,920
Speaker 4: have you back on a FED day, no less groundwork

599
00:29:58,000 --> 00:30:02,240
Speaker 4: collaborative executive director. Thank you, Lindsey for the insights as

600
00:30:02,240 --> 00:30:04,720
Speaker 4: we bring in the aforementioned Wendy Benjaminson, who had her

601
00:30:04,760 --> 00:30:08,480
Speaker 4: eyes on this statement as well when the White House

602
00:30:08,480 --> 00:30:11,520
Speaker 4: decided to speak up this morning. She is Bloomberg's Washington

603
00:30:11,600 --> 00:30:13,760
Speaker 4: senior editor. Nice to see you, Nice to see it.

604
00:30:14,520 --> 00:30:16,719
Speaker 4: I don't care if you're running our poll or if

605
00:30:16,760 --> 00:30:20,320
Speaker 4: we're talking about Joe Biden's message of the day, which

606
00:30:20,360 --> 00:30:23,720
Speaker 4: frequently veers into different things, including the border, including the

607
00:30:23,800 --> 00:30:28,400
Speaker 4: reproductive rights. But this is the stuff that he needs

608
00:30:28,440 --> 00:30:32,000
Speaker 4: to be talking about every day. I'm just curious your

609
00:30:32,040 --> 00:30:35,240
Speaker 4: thoughts on the reaction here, because he could take a

610
00:30:35,320 --> 00:30:38,040
Speaker 4: victory lap right, look at the markets and maybe do

611
00:30:38,080 --> 00:30:40,560
Speaker 4: what Donald Trump I do for months. But prices are

612
00:30:40,600 --> 00:30:42,040
Speaker 4: still too high. He has to say that.

613
00:30:42,360 --> 00:30:44,400
Speaker 13: He has to say that, But I think this is

614
00:30:44,440 --> 00:30:46,440
Speaker 13: the first time he's done that. I mean, I was

615
00:30:46,480 --> 00:30:48,280
Speaker 13: been watching. Maybe I missed a month or so, but

616
00:30:48,560 --> 00:30:52,880
Speaker 13: I've been watching his statements over the whole period of

617
00:30:52,880 --> 00:30:56,120
Speaker 13: this where he does nothing but spike the football. And

618
00:30:56,360 --> 00:31:00,480
Speaker 13: while he has good reason to spike the football, has

619
00:31:00,800 --> 00:31:04,360
Speaker 13: the rate of inflation has slowly been coming down. Prices

620
00:31:04,360 --> 00:31:06,840
Speaker 13: in the grocery store, prices at the gas pump have

621
00:31:06,960 --> 00:31:11,440
Speaker 13: not significantly changed, and voters are feeling that. So you

622
00:31:11,520 --> 00:31:15,640
Speaker 13: tell an average voter that the rate of inflation has slowed,

623
00:31:15,640 --> 00:31:17,920
Speaker 13: but prices are still three percent higher than they were

624
00:31:18,040 --> 00:31:20,360
Speaker 13: yesterday and last year, and you got a one and

625
00:31:20,360 --> 00:31:23,320
Speaker 13: a half percent raise. That's not going to do it

626
00:31:23,400 --> 00:31:28,600
Speaker 13: so in November. So the fact that this month they

627
00:31:28,640 --> 00:31:32,440
Speaker 13: decided to start with that simple sentence prices are still

628
00:31:32,480 --> 00:31:36,440
Speaker 13: too high is an acknowledgement of the pain that voters

629
00:31:36,480 --> 00:31:39,320
Speaker 13: are still feeling when they go to buy things.

630
00:31:39,560 --> 00:31:43,440
Speaker 4: Do they believe him when he says that, you know,

631
00:31:43,800 --> 00:31:48,120
Speaker 4: he's going after big pharma. Republicans allow the special interest

632
00:31:48,160 --> 00:31:52,080
Speaker 4: from big oil. They're fighting for billionaires on Park Avenue.

633
00:31:52,120 --> 00:31:55,760
Speaker 4: I'm fighting for families. Is that resonating after three years

634
00:31:55,760 --> 00:31:55,920
Speaker 4: of this?

635
00:31:57,080 --> 00:32:00,320
Speaker 13: Maybe the polls are not really showing that.

636
00:32:00,480 --> 00:32:03,800
Speaker 4: I mean, He's people are remembering Donald Trump's economy.

637
00:32:03,400 --> 00:32:05,720
Speaker 13: Is a lot better than that now, of course, whether

638
00:32:05,800 --> 00:32:08,680
Speaker 13: that's real or not, right, that was before a global pandemic,

639
00:32:09,440 --> 00:32:12,240
Speaker 13: and that was before a huge infusion of federal spending.

640
00:32:12,360 --> 00:32:16,120
Speaker 13: But the economy, there's no argument that the economy is

641
00:32:16,120 --> 00:32:20,520
Speaker 13: getting better. And it is and Biden should politically take

642
00:32:20,560 --> 00:32:24,200
Speaker 13: credit for that. Voters still aren't feeling it. And he's

643
00:32:24,320 --> 00:32:26,920
Speaker 13: talking though about how I presume he means in a

644
00:32:26,960 --> 00:32:30,000
Speaker 13: second term he will actually get some of these things

645
00:32:30,040 --> 00:32:32,720
Speaker 13: done that he's been talking about, Yes for three years,

646
00:32:32,760 --> 00:32:35,440
Speaker 13: working with farm upbringing taxes down, things like that.

647
00:32:35,560 --> 00:32:37,840
Speaker 4: Well, we're going to have a grand debate about extending

648
00:32:37,920 --> 00:32:40,400
Speaker 4: the Donald Trump tax cuts next year.

649
00:32:40,520 --> 00:32:43,160
Speaker 13: Yes, Well, if Trump wins, we are ye. Oh well yeah, rue.

650
00:32:43,200 --> 00:32:45,800
Speaker 4: Although they are starting the full court press with his

651
00:32:45,960 --> 00:32:47,880
Speaker 4: visit this week. We're going to talk to Kevin Brady

652
00:32:47,880 --> 00:32:50,160
Speaker 4: about that a little bit later on. You wonder to

653
00:32:50,200 --> 00:32:52,360
Speaker 4: the extent that deficits are going to matter in an

654
00:32:52,400 --> 00:32:55,880
Speaker 4: election year. It's funny how people get amnesia over deficits.

655
00:32:57,680 --> 00:33:01,520
Speaker 4: Is Donald Trump running the agenda here in Washington for

656
00:33:01,600 --> 00:33:05,360
Speaker 4: Republicans with or without this election, because it's feeling like

657
00:33:05,400 --> 00:33:06,640
Speaker 4: it with this meeting tomorrow.

658
00:33:06,680 --> 00:33:09,560
Speaker 13: Absolutely, there's no question that Donald Trump is the head

659
00:33:09,600 --> 00:33:13,000
Speaker 13: of the Republican Party, is the driver of Republican Party policies.

660
00:33:13,360 --> 00:33:16,440
Speaker 13: And this meeting on Capitol Hill, to which Evan Mitch McConnell,

661
00:33:16,480 --> 00:33:19,040
Speaker 13: who has never had a lot of love lost for

662
00:33:19,200 --> 00:33:24,720
Speaker 13: Donald Trump, is attending, He is meeting with the House

663
00:33:24,760 --> 00:33:28,360
Speaker 13: Republicans and Senate Republicans to set the policy for the

664
00:33:28,400 --> 00:33:31,640
Speaker 13: rest of this year and then if they win after that.

665
00:33:32,360 --> 00:33:34,680
Speaker 13: I think even if he loses, he's still and Biden

666
00:33:34,720 --> 00:33:37,959
Speaker 13: as president. Republicans in Congress will still be pushed and

667
00:33:37,960 --> 00:33:41,280
Speaker 13: pulled by Donald Trump in terms of the policy that

668
00:33:41,320 --> 00:33:44,200
Speaker 13: they're going to talk about tomorrow, right before he goes

669
00:33:44,200 --> 00:33:46,960
Speaker 13: and meets with the most powerful CEOs in the country

670
00:33:47,920 --> 00:33:49,480
Speaker 13: down on the wharf tomorrow afternoon.

671
00:33:49,600 --> 00:33:54,520
Speaker 4: Speaker would love to deliver a contempt vote for the

672
00:33:54,520 --> 00:33:58,080
Speaker 4: Attorney General Merrick Arland to give for the President when

673
00:33:58,080 --> 00:33:59,360
Speaker 4: he comes to town. Are they going to make that

674
00:33:59,400 --> 00:33:59,960
Speaker 4: happen today?

675
00:34:00,440 --> 00:34:02,840
Speaker 13: I think they're going to try. The odds are not

676
00:34:03,480 --> 00:34:06,040
Speaker 13: firmly in their favor that they're going to succeed. There

677
00:34:06,080 --> 00:34:10,080
Speaker 13: are some centrist House Republicans, some House Republicans who used

678
00:34:10,120 --> 00:34:12,879
Speaker 13: to work for the Justice Department or the FBI, who

679
00:34:12,960 --> 00:34:17,080
Speaker 13: feel that this is not right to do. And right

680
00:34:17,360 --> 00:34:22,279
Speaker 13: after the conviction of the President's son on gun charge,

681
00:34:22,360 --> 00:34:24,399
Speaker 13: is what are we I mean, there's all over the.

682
00:34:24,360 --> 00:34:26,160
Speaker 4: Release of audio recordings of the president.

683
00:34:26,200 --> 00:34:28,920
Speaker 13: By the way, is funny about the weaponization of the

684
00:34:29,080 --> 00:34:31,360
Speaker 13: justice they're feeling that that's what's.

685
00:34:31,239 --> 00:34:33,799
Speaker 4: Well and the and the Attorney General doesn't think that

686
00:34:34,120 --> 00:34:36,319
Speaker 4: due to privacy issues and many other things. But the

687
00:34:36,400 --> 00:34:39,120
Speaker 4: precedent that would be set you get the transcript, not

688
00:34:39,160 --> 00:34:41,560
Speaker 4: the recording. Is it funny that we still call them

689
00:34:41,600 --> 00:34:44,840
Speaker 4: tapes after people listening never had a tape, but we

690
00:34:44,920 --> 00:34:47,040
Speaker 4: still but they know what we mean by audio tapes.

691
00:34:47,080 --> 00:34:49,600
Speaker 4: I just think it's funny there are no tapes. They're

692
00:34:49,640 --> 00:34:52,600
Speaker 4: like MP three's or something. That's going to be a

693
00:34:52,640 --> 00:34:55,600
Speaker 4: big story tomorrow, Yes, and it's going to set us

694
00:34:55,600 --> 00:34:57,920
Speaker 4: off in a conversation, whether there's a content vote or

695
00:34:57,960 --> 00:35:01,080
Speaker 4: not about Donald Trump's e can policies. And I hope

696
00:35:01,080 --> 00:35:02,879
Speaker 4: that you'll be back with us to do it again soon.

697
00:35:02,920 --> 00:35:04,359
Speaker 4: I know you're Are you in the field right now

698
00:35:04,400 --> 00:35:05,080
Speaker 4: for our next pole?

699
00:35:05,320 --> 00:35:05,400
Speaker 5: Now?

700
00:35:05,480 --> 00:35:10,320
Speaker 4: You love to say that after the debates Inside Information, Yeah,

701
00:35:10,360 --> 00:35:13,840
Speaker 4: Wendy benjamins In Bloomberg Washington, Senior Editor. Always great to

702
00:35:13,840 --> 00:35:15,120
Speaker 4: have Wendy's insights with us.

703
00:35:18,360 --> 00:35:21,640
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Can

704
00:35:21,840 --> 00:35:25,400
Speaker 1: just live weekdays at noon Eastern on Applecarplay and Enrounoo

705
00:35:25,520 --> 00:35:28,279
Speaker 1: with the Bloomberg Business app. You can also listen live

706
00:35:28,400 --> 00:35:31,600
Speaker 1: on Amazon Alexa from our flagship New York station, Just

707
00:35:31,640 --> 00:35:37,200
Speaker 1: say Alexa play Bloomberg eleven thirty.

708
00:35:36,480 --> 00:35:39,399
Speaker 4: Walking us through the markets on a very important day here.

709
00:35:39,520 --> 00:35:42,320
Speaker 4: Double risk is what I was reading about this morning,

710
00:35:43,280 --> 00:35:47,200
Speaker 4: and we just checked one of those two boxes waiting

711
00:35:47,239 --> 00:35:49,759
Speaker 4: for I guess single risk with the FED meeting, and

712
00:35:50,320 --> 00:35:52,759
Speaker 4: that's coming. We have special coverage planned for you. But

713
00:35:52,880 --> 00:35:56,600
Speaker 4: the news at eight thirty. My goodness, everyone's happy. US

714
00:35:56,640 --> 00:36:01,200
Speaker 4: inflation broadly cools, an encouraging sign for Fed officials. I

715
00:36:01,280 --> 00:36:04,920
Speaker 4: read on the terminal White House seems pretty happy about it.

716
00:36:05,040 --> 00:36:10,160
Speaker 4: Markets seem pretty happy about it. See how Molly Smith

717
00:36:10,200 --> 00:36:12,640
Speaker 4: feels about it. She was up early if you want

718
00:36:12,640 --> 00:36:14,600
Speaker 4: to get on the terminal. By the way, Molly Smith

719
00:36:14,680 --> 00:36:18,040
Speaker 4: is the gatekeeper if you cover economics here. She is

720
00:36:18,040 --> 00:36:22,279
Speaker 4: Bloomberg's economics editor. And you know CPI day is one

721
00:36:22,280 --> 00:36:25,480
Speaker 4: thing with a FED day on top of it. We're

722
00:36:25,520 --> 00:36:27,879
Speaker 4: lucky that you made time for is Molly Smith? Welcome back?

723
00:36:27,920 --> 00:36:29,239
Speaker 4: Do you drive a car? I know you live in

724
00:36:29,239 --> 00:36:30,359
Speaker 4: New York? Right, do you mind?

725
00:36:30,440 --> 00:36:30,560
Speaker 10: Well?

726
00:36:30,600 --> 00:36:33,800
Speaker 4: I like god you could, but gosh, be just about anywhere?

727
00:36:34,239 --> 00:36:35,880
Speaker 4: Are you coming in from the suburbs? You live in

728
00:36:35,920 --> 00:36:37,439
Speaker 4: New York? You don't have a car? Is that right?

729
00:36:37,640 --> 00:36:40,080
Speaker 14: I don't drive, and I live very close to HQ,

730
00:36:40,400 --> 00:36:41,960
Speaker 14: so I'm right here for the action.

731
00:36:43,400 --> 00:36:46,759
Speaker 4: You're really smart, as I know. Spend an hour to

732
00:36:46,760 --> 00:36:48,839
Speaker 4: get to work every morning. Although I don't live above

733
00:36:48,880 --> 00:36:50,520
Speaker 4: the store, they can't call me at night the way

734
00:36:50,560 --> 00:36:51,960
Speaker 4: they do you or first thing in the morning. And

735
00:36:52,000 --> 00:36:55,600
Speaker 4: I'm asking you about this because of these crazy prices,

736
00:36:55,600 --> 00:36:59,719
Speaker 4: not only for automobiles that we've been talking about, but

737
00:36:59,800 --> 00:37:05,120
Speaker 4: all insurance up twenty percent. Is this the number that

738
00:37:05,200 --> 00:37:08,040
Speaker 4: distorts the CPI today? How is that even possible.

739
00:37:08,360 --> 00:37:11,120
Speaker 14: So, actually, we've been looking at it more from the

740
00:37:11,360 --> 00:37:15,360
Speaker 14: monthly change in car insurance. What you were citing, correctly

741
00:37:15,560 --> 00:37:18,840
Speaker 14: is the annual pace that car insurance is up twenty

742
00:37:18,880 --> 00:37:21,759
Speaker 14: percent year every year. It has been one of the

743
00:37:21,760 --> 00:37:23,520
Speaker 14: bigger drivers of services and pleas.

744
00:37:23,560 --> 00:37:25,120
Speaker 4: Did it come down from last month?

745
00:37:25,440 --> 00:37:25,719
Speaker 8: What's that?

746
00:37:26,920 --> 00:37:28,600
Speaker 4: Did it come down from last month? Is that why

747
00:37:28,640 --> 00:37:29,400
Speaker 4: you make the difference?

748
00:37:29,480 --> 00:37:29,880
Speaker 6: Correct?

749
00:37:30,000 --> 00:37:33,200
Speaker 14: Yes, so this was the first month in gosh, I

750
00:37:33,239 --> 00:37:35,240
Speaker 14: think it was over two years.

751
00:37:35,280 --> 00:37:36,359
Speaker 8: Maybe it'd have.

752
00:37:36,320 --> 00:37:39,360
Speaker 14: To check me on that that our insurance fell in

753
00:37:39,400 --> 00:37:42,400
Speaker 14: the monthly rate. That is so look obviously on actual

754
00:37:42,440 --> 00:37:46,239
Speaker 14: prices still definitely high, not discounting that whatsoever. But when

755
00:37:46,280 --> 00:37:49,520
Speaker 14: you're looking at directionally, if this is maybe a sign

756
00:37:49,600 --> 00:37:52,320
Speaker 14: that this is going to start easing more going forward

757
00:37:52,360 --> 00:37:55,759
Speaker 14: and not contributing to more outsized readings, that could be

758
00:37:55,840 --> 00:37:56,640
Speaker 14: very significant.

759
00:37:57,920 --> 00:38:01,200
Speaker 4: So if you're looking at the more broad picture here

760
00:38:02,200 --> 00:38:05,839
Speaker 4: and you're, say, Joe Biden hoping for an interest rate cut,

761
00:38:05,960 --> 00:38:07,880
Speaker 4: we're going to talk more about that coming up in

762
00:38:07,920 --> 00:38:12,240
Speaker 4: a minute as well. What has you encouraged about this reading?

763
00:38:12,239 --> 00:38:14,400
Speaker 4: I mean we're talking we're celebrating over a tenth of

764
00:38:14,440 --> 00:38:16,040
Speaker 4: a percent essentially, here right.

765
00:38:16,200 --> 00:38:18,040
Speaker 14: Well, it's a lot of things, you know, It's not

766
00:38:18,160 --> 00:38:22,000
Speaker 14: just car insurance. This was a really broadly positive report

767
00:38:22,080 --> 00:38:24,640
Speaker 14: no matter if you're at the FED, if you're Joe

768
00:38:24,640 --> 00:38:28,239
Speaker 14: Biden American consumers. It really had a lot of good

769
00:38:28,280 --> 00:38:31,400
Speaker 14: news for a lot of people. That where we have

770
00:38:31,520 --> 00:38:33,919
Speaker 14: seen so much of the inflation pressure in the last

771
00:38:33,920 --> 00:38:36,719
Speaker 14: couple of years has been from services, and that's where

772
00:38:36,719 --> 00:38:39,919
Speaker 14: we finally got to see services prices coming down. Car

773
00:38:39,960 --> 00:38:42,880
Speaker 14: insurances was a big one that that has been, like

774
00:38:42,920 --> 00:38:45,440
Speaker 14: we said, going up for so many months, and we

775
00:38:45,520 --> 00:38:49,520
Speaker 14: also saw airfares come down that was significant some other

776
00:38:49,600 --> 00:38:51,600
Speaker 14: travel related expenses as well.

777
00:38:51,920 --> 00:38:52,120
Speaker 6: Well.

778
00:38:52,200 --> 00:38:54,400
Speaker 14: The next one that we're really all waiting for and

779
00:38:54,440 --> 00:38:57,080
Speaker 14: that economists are getting more conviction is going to show up.

780
00:38:57,080 --> 00:38:59,719
Speaker 14: And next month's report is that long awaited slowdown in

781
00:38:59,760 --> 00:39:03,360
Speaker 14: how inflation that has still really yet to materialize. So

782
00:39:03,400 --> 00:39:06,000
Speaker 14: we're hoping that the June CPI is going to be

783
00:39:06,040 --> 00:39:07,120
Speaker 14: the first real look at that.

784
00:39:08,800 --> 00:39:14,640
Speaker 4: So core CPI up two tenths from April market expected

785
00:39:14,680 --> 00:39:16,640
Speaker 4: three tenths. Is that right? But that I mean, this

786
00:39:16,719 --> 00:39:19,120
Speaker 4: is the sliver we're talking about here right right, And.

787
00:39:19,080 --> 00:39:21,480
Speaker 14: If you want to get even to even more to

788
00:39:21,520 --> 00:39:24,279
Speaker 14: a narrower sliver than that and get really walky with it,

789
00:39:24,320 --> 00:39:26,759
Speaker 14: as our readers like to. Then you're going to look

790
00:39:26,800 --> 00:39:29,200
Speaker 14: at it out to two decimal places. So this was

791
00:39:29,280 --> 00:39:33,560
Speaker 14: actually a point one six percent, so that rounds up

792
00:39:33,840 --> 00:39:36,560
Speaker 14: to zero two versus let's say if it was point

793
00:39:36,560 --> 00:39:37,240
Speaker 14: twenty four.

794
00:39:37,120 --> 00:39:38,080
Speaker 8: And rounded down.

795
00:39:38,320 --> 00:39:41,879
Speaker 14: And that's really significant because let's try to annualize that rate.

796
00:39:41,960 --> 00:39:45,000
Speaker 14: Point one six multiplied out over twelve months is a

797
00:39:45,040 --> 00:39:48,000
Speaker 14: one point nine to two pace of inflation. That's under

798
00:39:48,040 --> 00:39:50,399
Speaker 14: two percent. That's the magic number that we're looking for.

799
00:39:51,400 --> 00:39:54,360
Speaker 4: That's why I would have copied off of Molly's homework

800
00:39:55,080 --> 00:39:55,880
Speaker 4: in high school.

801
00:39:56,480 --> 00:39:57,319
Speaker 6: Couldn't do that one?

802
00:39:57,320 --> 00:39:57,840
Speaker 10: In your head?

803
00:39:58,280 --> 00:39:59,280
Speaker 6: I didn't either, I think.

804
00:39:59,200 --> 00:40:02,879
Speaker 4: Before I came here, Well, you've got a terminal, by God,

805
00:40:02,920 --> 00:40:05,720
Speaker 4: connect the dots for beyond this fed meeting of Molly.

806
00:40:05,760 --> 00:40:09,560
Speaker 4: They're not making decisions today, I'm sure based on this alone.

807
00:40:10,680 --> 00:40:13,120
Speaker 4: But in the grand scheme when we talk about the

808
00:40:13,160 --> 00:40:15,080
Speaker 4: dot plot, how does this factor into it?

809
00:40:15,400 --> 00:40:15,600
Speaker 1: Right?

810
00:40:15,680 --> 00:40:15,879
Speaker 2: Yeah?

811
00:40:15,920 --> 00:40:18,680
Speaker 14: I mean this was already we were wondering about how

812
00:40:18,719 --> 00:40:21,880
Speaker 14: the dots were going to shift from the March quarterly

813
00:40:21,960 --> 00:40:25,200
Speaker 14: projections to now, and after we had seen all of

814
00:40:25,239 --> 00:40:28,319
Speaker 14: those really hefty inflation prints at the start of the year,

815
00:40:28,640 --> 00:40:30,400
Speaker 14: and that's when the FED was thinking there would be

816
00:40:30,440 --> 00:40:33,840
Speaker 14: three rate cuts in twenty twenty four. Everybody's thinking, Okay,

817
00:40:33,840 --> 00:40:36,360
Speaker 14: that's now got to be down to two. This report

818
00:40:36,440 --> 00:40:40,000
Speaker 14: really helps solidify that, like there are probably two rate

819
00:40:40,000 --> 00:40:43,120
Speaker 14: cuts that could happen this year, and investors in the

820
00:40:43,160 --> 00:40:46,120
Speaker 14: market reaction today even more bullish that those could start

821
00:40:46,160 --> 00:40:49,160
Speaker 14: to come sooner. So right now, the first fully priced

822
00:40:49,160 --> 00:40:51,839
Speaker 14: FED hike would be in November, which is consequently two

823
00:40:51,880 --> 00:40:53,000
Speaker 14: days after the election.

824
00:40:54,200 --> 00:40:56,759
Speaker 4: Consequently, and we're told they don't play those games right

825
00:40:56,800 --> 00:40:59,319
Speaker 4: if it's too close to the election. That might be

826
00:40:59,360 --> 00:41:02,239
Speaker 4: part of the fact in although the FED wouldn't acknowledge that,

827
00:41:02,280 --> 00:41:02,960
Speaker 4: I'm sure.

828
00:41:02,880 --> 00:41:05,040
Speaker 14: Correct, But that's I'm sure that would come up in

829
00:41:05,320 --> 00:41:08,000
Speaker 14: Jay's press conference today and we will all be very

830
00:41:08,080 --> 00:41:08,800
Speaker 14: much listening.

831
00:41:09,840 --> 00:41:13,040
Speaker 4: Michael mckey's in there crafting a question that the I'm

832
00:41:13,080 --> 00:41:15,360
Speaker 4: sure the chairman will have to stop down and think about.

833
00:41:15,440 --> 00:41:17,680
Speaker 4: And Molly is great to have you. We appreciate your

834
00:41:18,160 --> 00:41:21,160
Speaker 4: joining us. Molly Smith, Bloomberg Economics editor, spends more time

835
00:41:21,200 --> 00:41:25,880
Speaker 4: on Bloomberg Radio than I do. She's that good. This

836
00:41:26,000 --> 00:41:30,799
Speaker 4: is a very important day in Washington tomorrow that you

837
00:41:30,880 --> 00:41:33,120
Speaker 4: might not have heard about, maybe if you're not inside

838
00:41:33,160 --> 00:41:38,560
Speaker 4: the beltway. Here an important thing called Seersucker Thursday. It's

839
00:41:38,640 --> 00:41:41,719
Speaker 4: happening on June thirteenth this year. And I bring this

840
00:41:41,840 --> 00:41:44,840
Speaker 4: up because if you're with us right now on YouTube,

841
00:41:45,239 --> 00:41:47,759
Speaker 4: you can close your eyes. If you're listening on Bloomberg

842
00:41:47,840 --> 00:41:51,200
Speaker 4: Radio or in satellite radio, the Great Lester Munson is

843
00:41:51,280 --> 00:41:53,880
Speaker 4: prepared for Seersucker Thursday. You're a day early, and it's

844
00:41:53,960 --> 00:41:55,200
Speaker 4: nice to see you in the studio here.

845
00:41:55,960 --> 00:41:57,920
Speaker 9: Thanks Joe on k Street. We like to do it

846
00:41:57,960 --> 00:41:59,279
Speaker 9: a little bit. We like to be ahead of the

847
00:41:59,320 --> 00:42:05,600
Speaker 9: curve Senate. It's going to be on Thursday out there today.

848
00:42:05,680 --> 00:42:07,160
Speaker 4: I have so much to learn from you. Still is

849
00:42:07,200 --> 00:42:09,640
Speaker 4: the co head of the international practice at BGR Group

850
00:42:10,320 --> 00:42:13,560
Speaker 4: and spent some time on the Senate Foreign Relations Committee

851
00:42:13,760 --> 00:42:18,440
Speaker 4: as as an important staff director. Another thing starts tomorrow,

852
00:42:18,480 --> 00:42:22,080
Speaker 4: that's the G seven. Funny how that coincides Joe Biden's

853
00:42:22,080 --> 00:42:24,759
Speaker 4: on Air Force one right now, heading over there with

854
00:42:24,840 --> 00:42:27,040
Speaker 4: your acumen in foreign policy, I want to get your

855
00:42:27,080 --> 00:42:29,759
Speaker 4: take on this because we have two hot wars going

856
00:42:29,800 --> 00:42:32,440
Speaker 4: that this president is trying to balance, and he has

857
00:42:32,480 --> 00:42:35,560
Speaker 4: the opportunity to sit down with our most important allies

858
00:42:35,600 --> 00:42:37,719
Speaker 4: the next couple of days to try to move the

859
00:42:37,760 --> 00:42:40,359
Speaker 4: ball on both of them. Does it help will pick

860
00:42:40,400 --> 00:42:43,120
Speaker 4: through those Ukraine and Israel first? How about that? Does

861
00:42:43,160 --> 00:42:46,520
Speaker 4: it help with the potential for a ceasefire? For him

862
00:42:46,520 --> 00:42:49,840
Speaker 4: to be in the same room with his G seven allies?

863
00:42:50,440 --> 00:42:50,720
Speaker 2: Well?

864
00:42:50,800 --> 00:42:53,400
Speaker 9: I think it can and can he use Is he

865
00:42:53,520 --> 00:42:56,760
Speaker 9: nimble enough to use this as an opportunity to drive

866
00:42:56,800 --> 00:42:59,480
Speaker 9: a message and show strength in the international community. It's

867
00:42:59,560 --> 00:43:02,200
Speaker 9: it's there's a higher degree of difficulty today than a

868
00:43:02,200 --> 00:43:05,400
Speaker 9: few days ago. The European Parliament elections were just a

869
00:43:05,400 --> 00:43:08,640
Speaker 9: few days ago, the right wing did really well. That's

870
00:43:08,680 --> 00:43:10,640
Speaker 9: going to be the mood with the Europeans at the

871
00:43:10,680 --> 00:43:13,759
Speaker 9: G seven. Prime Minister Maloney, who is hosting it's kind

872
00:43:13,760 --> 00:43:16,239
Speaker 9: of the spokesperson for that, so she's going to have

873
00:43:16,280 --> 00:43:19,839
Speaker 9: a prominent position. There's a mood of change afoot. Can

874
00:43:19,920 --> 00:43:22,560
Speaker 9: Joe Biden kind of turn that to his advantage? It's

875
00:43:22,640 --> 00:43:25,520
Speaker 9: hard as the incumbent, he's got some real challenges, but

876
00:43:25,760 --> 00:43:28,239
Speaker 9: this could be a real good opportunity for him to

877
00:43:28,280 --> 00:43:30,400
Speaker 9: show some foreign policy chops.

878
00:43:30,480 --> 00:43:32,440
Speaker 4: He got a bit of a running start in Normandy

879
00:43:32,520 --> 00:43:34,080
Speaker 4: last week he was in the same room with a

880
00:43:34,080 --> 00:43:35,719
Speaker 4: lot of the same people who'll be talking to now,

881
00:43:35,800 --> 00:43:39,040
Speaker 4: including Emmanuel mcron to your point, bruised up a little

882
00:43:39,040 --> 00:43:43,000
Speaker 4: bit in the elections over the weekend, but also President Zelenski.

883
00:43:43,040 --> 00:43:45,400
Speaker 4: He's going to be holding a bilateral news conference. I

884
00:43:45,440 --> 00:43:47,480
Speaker 4: suspected a land right in the middle of the show tomorrow.

885
00:43:47,520 --> 00:43:48,759
Speaker 4: As a matter of fact, we'll bring it to you

886
00:43:49,239 --> 00:43:53,600
Speaker 4: as it happens from overseas. Ukraine is something, of course

887
00:43:53,960 --> 00:43:56,160
Speaker 4: that's in the air, but we've cleared funding here in

888
00:43:56,200 --> 00:43:59,520
Speaker 4: the US. What's the next hurdle for Joe Biden and Ukraine.

889
00:44:00,040 --> 00:44:02,279
Speaker 9: Crane has been using some of our new aid and

890
00:44:02,320 --> 00:44:04,560
Speaker 9: some of the new kind of longer leash from Biden

891
00:44:04,719 --> 00:44:07,759
Speaker 9: to start striking at supply lines inside Russia. That's a

892
00:44:07,760 --> 00:44:10,000
Speaker 9: big deal. And now we see as kind of a

893
00:44:10,040 --> 00:44:14,000
Speaker 9: tit for tat Russian ships coming into Cuba in our backyard. Yeah,

894
00:44:14,000 --> 00:44:15,960
Speaker 9: a little bit of a violation of the Monroe doctrine

895
00:44:15,960 --> 00:44:18,680
Speaker 9: if you want to go way back, So can can

896
00:44:19,320 --> 00:44:22,480
Speaker 9: Biden double down with Zelenski. Let's punch the bully in

897
00:44:22,520 --> 00:44:25,480
Speaker 9: the nose. Let's go after the Russians. Let's show them

898
00:44:25,520 --> 00:44:28,400
Speaker 9: that we're undeterred here by what they're doing in the

899
00:44:28,480 --> 00:44:30,719
Speaker 9: Caribbean and that we're going to We're going to bring

900
00:44:30,719 --> 00:44:32,800
Speaker 9: the fight to them in Ukraine where it really matters.

901
00:44:32,960 --> 00:44:36,000
Speaker 9: So again, big opportunity for President Biden.

902
00:44:35,760 --> 00:44:38,520
Speaker 4: Seizing a Russian assets I suspect is on the agenda.

903
00:44:38,640 --> 00:44:42,000
Speaker 4: Remember we President signed the REPO Act into law same

904
00:44:42,000 --> 00:44:45,440
Speaker 4: time he passed the funding for Ukraine. But the bulk

905
00:44:45,440 --> 00:44:47,480
Speaker 4: of that money, we're told as in Europe. So this

906
00:44:47,560 --> 00:44:49,399
Speaker 4: sounds like an important conversation this week.

907
00:44:49,520 --> 00:44:51,399
Speaker 9: It can be, it can be. I think they should

908
00:44:51,480 --> 00:44:53,520
Speaker 9: keep expectations low. There's gonna be a lot of legal,

909
00:44:53,680 --> 00:44:56,320
Speaker 9: real impediments to fring up that money to use it

910
00:44:56,440 --> 00:44:58,680
Speaker 9: right away. It's probably going to be a few years

911
00:44:58,719 --> 00:45:00,680
Speaker 9: before we really see it being used.

912
00:45:00,680 --> 00:45:02,799
Speaker 4: So that's the rebuilding of Ukraine, that's the war.

913
00:45:02,880 --> 00:45:03,759
Speaker 9: That's right, that's right.

914
00:45:03,960 --> 00:45:05,560
Speaker 4: So the problem, why is it so hard to do

915
00:45:05,600 --> 00:45:07,920
Speaker 4: this when everyone seems to be on that side.

916
00:45:08,040 --> 00:45:10,880
Speaker 9: There's just it. It's harder than it looks.

917
00:45:11,120 --> 00:45:11,279
Speaker 2: Right.

918
00:45:11,440 --> 00:45:14,080
Speaker 9: The people are going to lawyer up these assets have

919
00:45:14,560 --> 00:45:17,520
Speaker 9: that are very valuable. President can't just go grab them,

920
00:45:17,920 --> 00:45:20,200
Speaker 9: or we are nations of laws here in the West, yes,

921
00:45:20,239 --> 00:45:22,520
Speaker 9: which is our wonderful asset and occasionally it's a bit

922
00:45:22,560 --> 00:45:23,960
Speaker 9: of a problem. In this case, it might be a

923
00:45:23,960 --> 00:45:24,520
Speaker 9: bit of a problem.

924
00:45:24,600 --> 00:45:27,759
Speaker 4: You mentioned offensive weapons. That is the big development, I

925
00:45:27,760 --> 00:45:30,360
Speaker 4: guess most recently, but it's isolated around Kharki for the

926
00:45:30,360 --> 00:45:32,360
Speaker 4: most part, where it appears that Ukraine has been on

927
00:45:32,400 --> 00:45:37,879
Speaker 4: the ropes. There have been interesting comments We've heard from

928
00:45:37,880 --> 00:45:40,680
Speaker 4: the likes of Emmanuel Macron and others say, hey, maybe

929
00:45:40,680 --> 00:45:43,640
Speaker 4: you want to use European weapons, and in some cases

930
00:45:43,719 --> 00:45:45,880
Speaker 4: Ukraine has been taking them up on that. Are we

931
00:45:45,960 --> 00:45:48,480
Speaker 4: on the same page with our European allies and are

932
00:45:48,480 --> 00:45:51,680
Speaker 4: we going to see a widening of that offensive posture.

933
00:45:51,880 --> 00:45:54,680
Speaker 9: It's a great question, Joe. The Biden administration has been

934
00:45:54,760 --> 00:45:57,799
Speaker 9: letting Europeans kind of push the envelope in terms of

935
00:45:57,840 --> 00:46:00,880
Speaker 9: what weapons systems are being used. Was Europeans and the

936
00:46:00,880 --> 00:46:04,680
Speaker 9: British who were pushing for more tanks, for more jet aircraft,

937
00:46:05,120 --> 00:46:08,080
Speaker 9: longer range weapons, and the Biden administration made it appear

938
00:46:08,120 --> 00:46:10,319
Speaker 9: like they were kind of going along reluctantly with that.

939
00:46:10,719 --> 00:46:13,719
Speaker 9: I think that's intentional to make to give the Europeans

940
00:46:13,719 --> 00:46:16,200
Speaker 9: some agency here, which can be a very good thing.

941
00:46:16,560 --> 00:46:19,080
Speaker 9: But so I'm hoping that's what this is. And there

942
00:46:19,160 --> 00:46:22,359
Speaker 9: isn't a real delta between the US and Western Europe here.

943
00:46:22,440 --> 00:46:24,160
Speaker 4: Well, it's interesting when you step back then and look

944
00:46:24,160 --> 00:46:26,560
Speaker 4: at this G seven. How much of this is photo

945
00:46:26,560 --> 00:46:29,440
Speaker 4: opportunity versus policy.

946
00:46:29,680 --> 00:46:33,760
Speaker 9: Sometimes the photo opportunity is the policy. The appearances matter here.

947
00:46:34,000 --> 00:46:38,719
Speaker 9: Can the President show some vigor and some nimbleness and

948
00:46:38,800 --> 00:46:41,759
Speaker 9: get these the Europeans to show their supportive of him.

949
00:46:42,160 --> 00:46:44,880
Speaker 9: Can they hold off the specter of, if you will,

950
00:46:45,320 --> 00:46:48,240
Speaker 9: of kind of an ascendant right wing in both Europe

951
00:46:48,280 --> 00:46:50,359
Speaker 9: and the United States. They're going to have to look

952
00:46:50,400 --> 00:46:52,799
Speaker 9: like they've got energy and they can solve problems. Can

953
00:46:52,840 --> 00:46:55,719
Speaker 9: they win in Ukraine? Can they get to a negotiated

954
00:46:55,719 --> 00:46:58,720
Speaker 9: settlement in Gaza? Can they show results for their efforts?

955
00:46:59,000 --> 00:47:01,040
Speaker 9: If not, people are going to vote for change.

956
00:47:01,080 --> 00:47:03,960
Speaker 4: So this is an important summit and the optics behind

957
00:47:03,960 --> 00:47:07,000
Speaker 4: it for this president. He's probably getting a good nap

958
00:47:07,080 --> 00:47:09,480
Speaker 4: on the plane right now. Right this is exhausting for

959
00:47:09,520 --> 00:47:11,920
Speaker 4: a young man, This would be exhausting. They're putting him

960
00:47:11,960 --> 00:47:14,440
Speaker 4: down the short stairs now to eliminate the chance.

961
00:47:14,239 --> 00:47:14,880
Speaker 2: Of a stumble.

962
00:47:15,320 --> 00:47:17,400
Speaker 4: This is part of the calculation for this White House.

963
00:47:17,640 --> 00:47:18,680
Speaker 4: No matter where he's.

964
00:47:18,480 --> 00:47:21,560
Speaker 9: Going low expectations. If he can walk off the stage

965
00:47:21,760 --> 00:47:23,600
Speaker 9: in the right way, in a straight.

966
00:47:23,360 --> 00:47:25,320
Speaker 4: Line, that's all I am going to my own self

967
00:47:25,320 --> 00:47:28,040
Speaker 4: to be perfectly on it. So I mentioned your time

968
00:47:28,080 --> 00:47:32,160
Speaker 4: on the Senate Foreign Relations Committee, there's discord over the ICC.

969
00:47:33,360 --> 00:47:35,520
Speaker 4: Getting back to where we started with Israel. Here, this

970
00:47:35,600 --> 00:47:38,040
Speaker 4: is the International Criminal Court arrest warrants.

971
00:47:38,120 --> 00:47:38,239
Speaker 5: Right.

972
00:47:38,280 --> 00:47:42,360
Speaker 4: We heard for Benjaminett Yahoo along with the leaders of Hamas,

973
00:47:43,200 --> 00:47:46,680
Speaker 4: and there was a move to have a resolution essentially

974
00:47:46,719 --> 00:47:51,640
Speaker 4: condemning the ICC. And it's not a layup. Why is

975
00:47:51,680 --> 00:47:54,600
Speaker 4: this controversial within the Senate Foreign Relations Committee? And will

976
00:47:54,600 --> 00:47:55,280
Speaker 4: it die there?

977
00:47:55,520 --> 00:47:58,000
Speaker 9: So I think Senator Rish, who's the ranking Republican there,

978
00:47:58,000 --> 00:48:00,600
Speaker 9: who's kind of the instigator of the is in the

979
00:48:00,880 --> 00:48:03,680
Speaker 9: is actually in the right place. He's taking a bipartisan

980
00:48:03,680 --> 00:48:06,440
Speaker 9: bill from the House. He wants the Senate to move it.

981
00:48:06,840 --> 00:48:10,160
Speaker 9: Senator Carden, who's the chair of the committee, has said, well,

982
00:48:10,200 --> 00:48:13,040
Speaker 9: I don't think it's bipartisan enough. I don't like the methodology,

983
00:48:13,040 --> 00:48:16,120
Speaker 9: but I'll continue talking to you. And and Senator Rish

984
00:48:16,160 --> 00:48:17,680
Speaker 9: is kind of holding his feet to the fire saying

985
00:48:17,680 --> 00:48:19,239
Speaker 9: all right, I'm going to slow down some of these

986
00:48:19,280 --> 00:48:21,279
Speaker 9: other things until we get this thing resolved. This is

987
00:48:21,320 --> 00:48:23,800
Speaker 9: the hot item, this is what both parties care about,

988
00:48:24,160 --> 00:48:26,640
Speaker 9: and and poor Sendor Cardon has to kind of defend

989
00:48:26,719 --> 00:48:30,000
Speaker 9: this little bit schizophrenic policy of the White House, partisan

990
00:48:30,840 --> 00:48:33,279
Speaker 9: the past House with a lot of Democrats, there are

991
00:48:33,320 --> 00:48:35,520
Speaker 9: some there's several Democrats in the Senate who want to

992
00:48:35,520 --> 00:48:38,799
Speaker 9: move this thing. I think it will at the end

993
00:48:38,800 --> 00:48:41,799
Speaker 9: of the day in some form, whether it's it goes

994
00:48:41,840 --> 00:48:43,680
Speaker 9: through the committee on some sort of compromise where they

995
00:48:43,719 --> 00:48:46,160
Speaker 9: attach it to something else. There's just there's just a

996
00:48:46,200 --> 00:48:48,200
Speaker 9: lot of energy and Congress that's playing out in other

997
00:48:48,200 --> 00:48:52,759
Speaker 9: committees on other legislation. Congress wants to support Israel. They

998
00:48:53,160 --> 00:48:56,120
Speaker 9: see Israel as very much the victim of Hamas and

999
00:48:56,160 --> 00:48:59,600
Speaker 9: Hamah and the positions of Hamas as utterly untenable. They're

1000
00:48:59,600 --> 00:49:01,440
Speaker 9: going to pushing until this thing is over.

1001
00:49:01,560 --> 00:49:03,400
Speaker 4: Which has got a minute with Lester Munson. But I

1002
00:49:03,440 --> 00:49:06,000
Speaker 4: have to ask you, with that said about Benjamin ett Ya,

1003
00:49:06,000 --> 00:49:08,360
Speaker 4: who paying a visit. That's going to be quite a

1004
00:49:08,480 --> 00:49:12,479
Speaker 4: day in Washington with some very sensitive feelings on both

1005
00:49:12,520 --> 00:49:16,040
Speaker 4: sides of the Aisle. He will be addressing a joint session.

1006
00:49:16,080 --> 00:49:19,879
Speaker 4: It seems what's the potential boycott list's going to look.

1007
00:49:19,840 --> 00:49:23,359
Speaker 9: Well, let's remember he was invited by the Speaker, Yes,

1008
00:49:23,800 --> 00:49:27,000
Speaker 9: Speaker Johnson and the Minority leader in the House, and

1009
00:49:27,239 --> 00:49:31,879
Speaker 9: Schumer and McConnell. So this is a bipartisan, bicameral effort. Yes,

1010
00:49:31,880 --> 00:49:34,600
Speaker 9: it'll be a little bit controversial, I think, particularly for progressives,

1011
00:49:34,800 --> 00:49:35,960
Speaker 9: there may be some on the far.

1012
00:49:35,880 --> 00:49:38,520
Speaker 4: Right or ceasefire by then that's that.

1013
00:49:38,560 --> 00:49:40,840
Speaker 9: Really is the big question, Joe, like, can can the

1014
00:49:40,880 --> 00:49:44,120
Speaker 9: Biden administration get to a place where this where whatever

1015
00:49:44,200 --> 00:49:46,839
Speaker 9: is going to happen, happens before the address that will

1016
00:49:46,880 --> 00:49:49,480
Speaker 9: make it much more successful. And if that doesn't happen,

1017
00:49:49,520 --> 00:49:52,479
Speaker 9: then I think we are looking at a real hot

1018
00:49:52,520 --> 00:49:53,320
Speaker 9: topic that we'll.

1019
00:49:53,200 --> 00:49:55,000
Speaker 4: Be curious to see if there's a White House visit

1020
00:49:55,719 --> 00:49:58,480
Speaker 4: and if there's gloating when he goes home, because that's

1021
00:49:58,520 --> 00:50:01,239
Speaker 4: a big score for Benjamin Att yahow to do.

1022
00:50:01,480 --> 00:50:03,359
Speaker 9: There should be a White House list the lay up here.

1023
00:50:03,400 --> 00:50:05,520
Speaker 4: Yeah, we'll talk more about it then. Great to see you,

1024
00:50:06,360 --> 00:50:09,359
Speaker 4: Seersucker Thursday. He's at Day Ahead. That's how they play

1025
00:50:09,400 --> 00:50:13,960
Speaker 4: it on K Street. Lester Munson at BGR Group. Of course,

1026
00:50:14,080 --> 00:50:16,279
Speaker 4: our good friend here often a panelist and great to

1027
00:50:16,280 --> 00:50:20,960
Speaker 4: have a long form conversation with Lester. Thanks for listening

1028
00:50:20,960 --> 00:50:24,280
Speaker 4: to the Balance of Power podcast. Make sure to subscribe

1029
00:50:24,320 --> 00:50:27,000
Speaker 4: if you haven't already, at Apple, Spotify, or wherever you

1030
00:50:27,080 --> 00:50:29,839
Speaker 4: get your podcasts, and you can find us live every

1031
00:50:29,840 --> 00:50:34,080
Speaker 4: weekday from Washington, DC at noontime Eastern at Bloomberg dot com.