Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: We begin this hour in Washington, President Trump leaving the
Speaker 2: door open for trade talks and piling on the pressure
Speaker 2: for the Fed to cut interest rates.
Speaker 3: We're still willing to talk.
Speaker 1: Literally every country wants to make it dew we have
Speaker 1: no inflation or stock market hit record highs.
Speaker 3: With no inflation, we should be at one percent.
Speaker 2: Thanks as well to Treasure Secretary Scott Besson, who's doing
Speaker 2: a fantastic job. He goes on television, he calms the market.
Speaker 3: I go on television. I rile the market.
Speaker 2: It's time for some calm. Joining us now the seventy
Speaker 2: ninth Secretary of the Treasury, Scale Besson. Mister secretary, welcome
Speaker 2: to the program sir. Let's pick up on that theme,
Speaker 2: not you calm in the markets, but on inflation and
Speaker 2: where rates should be. As I'm repointed out, we've had
Speaker 2: a string of softer and expected inflation reads in this country.
Speaker 2: We've had four, we might get five at a thirty
Speaker 2: Eastern time. Why do you believe that signal and non noise?
Speaker 1: Well, I mean there's some persistence there, Jonathan, And look,
Speaker 1: I do have access to the number of the night
Speaker 1: before but when I'm coming on TV, I don't look
Speaker 1: at it. So I don't know what the number is
Speaker 1: going to be at eight thirty, and I wouldn't. I
Speaker 1: don't know whether it's going to be down, up or flat,
Speaker 1: but I wouldn't put too much emphasis on one number.
Speaker 1: I think it's the trend. And I think one thing
Speaker 1: that Wall Street, a lot of economist market in general
Speaker 1: got wrong early on was that tariffs were going to
Speaker 1: cause a substantial price level rise, which just hasn't happened.
Speaker 2: And there are some people on the FMC the Federal
Speaker 2: Reserve still worried about the prospect of that happening. Through
Speaker 2: the summer, We've all sensed the frustration from the White
Speaker 2: House across the administration with FED Chair J Powell, and
Speaker 2: a lot of confusion. I think at this point that
Speaker 2: maybe we can address in this conversation, is firing the
Speaker 2: Federal Reserve Chair under active consider in the White House
Speaker 2: and the Treasury in your administration.
Speaker 1: President Trump said numerous times he's not going to fire J. Powell.
Speaker 1: You know, he's working the refs. And I've said before
Speaker 1: I'm a basketball fan. There are two schools of working
Speaker 1: the refs. There's the Bobby Knight school, and there's the
Speaker 1: Dean Smith School. President Trump seems to prefer the Bobby
Speaker 1: Knight school. And I'll tell you, I went back over
Speaker 1: the weekend and looked, and Bobby Knight won three NCAA championships.
Speaker 1: My hero Dean Smith only won two.
Speaker 2: The NCAT director, Kevin Hasset, I'm not sure what you'd
Speaker 2: call him, but he was asked over the weekend, can
Speaker 2: the FED chair be fired? He said, that's the thing
Speaker 2: that's being looked into. How should we understand those comments?
Speaker 1: Look, and I will point out Kevin was a collegiate
Speaker 1: basketball player, and I think, as President Trump said, he's
Speaker 1: not looking to fire a chair. And as I've said,
Speaker 1: I'm not going to come I'm not going to comment
Speaker 1: on future policy or future mistakes the federal make. I'll
Speaker 1: only comment on past mistakes. And look, they've had some
Speaker 1: big forecasting errors and this may be one. Now.
Speaker 2: Is there a reason for not firing Kim? And I
Speaker 2: asked that question because the President's also said that his
Speaker 2: term is about to expire in May of next year.
Speaker 2: Is that the reason to ultimately just wait? Or is
Speaker 2: it something cal so you convinced by the negative consequences
Speaker 2: associates it with such a move.
Speaker 1: Look, I think an independent central bank is very important
Speaker 1: for the conduct of monetary policy, and we can see
Speaker 1: that in terms of both the financial markets, the term
Speaker 1: premium and longer term debt.
Speaker 2: You said previously the interview process would begin later on
Speaker 2: in the fall. There's been plenty of speculation as to
Speaker 2: whether that process would be brought forward, mister Secretary, Do
Speaker 2: you still, as far as you understand, believe that's when
Speaker 2: the INTERVIEWSS to replace the FED chair will begin in
Speaker 2: the fall, or as a formal process already started.
Speaker 1: Well, look, there's a formal process that's already starting. There
Speaker 1: are a lot of great candidates, and we'll see how
Speaker 1: rapidly it progresses. It's President Trump's decision and it will
Speaker 1: move at his speed.
Speaker 2: Do you see any merits at all and selecting maybe
Speaker 2: a candidate that's already on the committee on the FMC
Speaker 2: versus taking a look at someone outside of the Federal Reserve.
Speaker 1: Again, there are a lot of good candidates inside and
Speaker 1: outside the Federal Reserve.
Speaker 2: Jonathan has the chairman himself, the FED Chair, Jake pal
Speaker 2: given you any indication whatsoever as to what he would
Speaker 2: do once his term has expired, will if a as
Speaker 2: the governor at the Federal Reserve.
Speaker 1: Well, traditionally the FED chair also steps down as a governor,
Speaker 1: and there's been a lot of talk of a shadow
Speaker 1: FED chair causing confusion in it events of his or
Speaker 1: her nomination, And I can tell you I think it'd
Speaker 1: be very confusing for the market for a former FED
Speaker 1: chair to stay on.
Speaker 3: Also, mister Treasury Secretary, I love to talk to you
Speaker 3: about what's going on in Video. This morning, Jensen Wang,
Speaker 3: the CEO, out in a blog statement saying that the
Speaker 3: company has quote provided an update to customers, noting that
Speaker 3: in Nvidia is finding applications to sell the H twenty
Speaker 3: GPU again. The US government has assured the company that
Speaker 3: licenses will be granted and then Video hopes to start
Speaker 3: deliveries soon. Can you a test whether that that's true
Speaker 3: or not? The United States is willing to let Nvidia
Speaker 3: sell H twenties once again in China?
Speaker 1: Well again, I emrie. I think that'd be a judgment
Speaker 1: that the Chinese indigenous manufacturers, namely Huawei and some others
Speaker 1: already have an equivalent chip. So if there's an equivalent chip,
Speaker 1: then the DAH twenty could be sold because I can
Speaker 1: tell you the one thing that we do not want
Speaker 1: is a digital Belton road springing up around the world
Speaker 1: because other countries or China are substituting for our American
Speaker 1: chip manufacturers.
Speaker 3: This is the same chip though, that the Trump administration
Speaker 3: blocked with export controls in April. So why the change
Speaker 3: in policy now.
Speaker 1: Emery, You might say that that was a negotiating chip
Speaker 1: that we used in Geneva and in London.
Speaker 3: So this was part of the trade talks when it
Speaker 3: comes to Washington and Beijing. Yes, was it a quid
Speaker 3: pro quo then, as you said, it wasn't, But was
Speaker 3: it potentially to make sure that you can get the
Speaker 3: licenses when it comes to rare earths.
Speaker 1: I think it was all part of a mosaic. They
Speaker 1: had things we wanted, we have things they wanted, and
Speaker 1: we're in a very good place. I expect to meet
Speaker 1: my Chinese counterpart, the Vice premiere, in the next few weeks.
Speaker 3: So when and where will that meeting take place.
Speaker 1: We're still working on that. The Chinese leadership has a
Speaker 1: big conclave at the beginning of August, so we're trying
Speaker 1: to work out whether that could be in a third
Speaker 1: country before or after that conclave?
Speaker 3: Well, the administration released the framework of the Geneva and
Speaker 3: London talks.
Speaker 1: Well, we have released some of it, and I'll tell
Speaker 1: you that now having settled on tariffs on the export controls,
Speaker 1: we can move on to the next stage of talks.
Speaker 1: And I think it's very important both for the global economy,
Speaker 1: for the US economy and for the Chinese economy, for
Speaker 1: US to move on and talk about China opening its
Speaker 1: markets and the increase domestic and consumer production.
Speaker 4: There.
Speaker 3: Are you hoping to get to that next phase before
Speaker 3: August twelfth, when that's currently the day taunt between these
Speaker 3: two economies.
Speaker 1: Yeah, Look, I think we're in a very good place.
Speaker 1: And I tell market participants not to worry about August twelfth.
Speaker 4: Should they worry about what's happening with Europe with respect
Speaker 4: to the thirty percent teriff rate. They don't seem to
Speaker 4: be worrying. But I'm just curious whether that's the final
Speaker 4: rate or whether the letter was part of a negotiation
Speaker 4: that Europe received from President Trump.
Speaker 1: Well, Lisa, you know what I would say is President
Speaker 1: Trump's able to create a lot of leverage here, A
Speaker 1: lot of leverage because he's indifferent. He's indifferent whether we
Speaker 1: take in the thirty percent rate or whether the Europeans
Speaker 1: come to us with a much better deal. As I've
Speaker 1: been saying for a while that if countries or trading
Speaker 1: blocks don't come with their best deals, then the rates
Speaker 1: could boomerang back. So President Trump's leading this, and what
Speaker 1: I will tell you is that a lot of the deals,
Speaker 1: and this is where his leadership has been invaluable, A
Speaker 1: lot of the deals that I thought were excellent deals
Speaker 1: keep getting improved upon every time he takes up the
Speaker 1: maximum pressure strategy.
Speaker 4: There is a theory in markets, and you don't even
Speaker 4: have to calm them. They're pretty calm. They're watching all
Speaker 4: of these rates and they're not freaking out in parlance
Speaker 4: on Wall Street, They're taking this in stride. We're close
Speaker 4: to all time highs, if not at all time highs.
Speaker 4: Do you see this as giving a green light to Trump?
Speaker 4: To President Trump to keep going, to take hardline approaches,
Speaker 4: and to keep trying to get better and better deals.
Speaker 1: Look, I think this narrative of this subsessive focus on
Speaker 1: the market isn't right. President Trump views this as a
Speaker 1: generational opportunity to reset trade in a fair and sound
Speaker 1: manner for the American people. So the idea that some
Speaker 1: market ups or downs are going to be the deciding
Speaker 1: factor here. What we are concerned about, and President Trump
Speaker 1: is laser focused on, is getting the best deals because
Speaker 1: we were not having fair trade and now we're seeing
Speaker 1: with these countries coming to the table, the quality of
Speaker 1: the deals gets better and better. So we're not going
Speaker 1: to rush just because of some market deadline. Now. I
Speaker 1: think what the market's seeing is market's willing to look
Speaker 1: forward three, six, twelve months and this is going to
Speaker 1: be good for the US, is going to be good
Speaker 1: for the global economy.
Speaker 4: If you do get some sort of signal from the
Speaker 4: market though that this isn't going to be good for
Speaker 4: the US economy, Is there a trigger point? Is there
Speaker 4: sort of a sense at which it acts as a
Speaker 4: gut check of pulls back some of the negotiating tactics.
Speaker 1: Look, I think that the market understands what we're doing.
Speaker 1: Sometimes individual market people don't, sometimes the television personalities don't.
Speaker 1: But good thing about President Trump is he always tells
Speaker 1: you what he wants and what he wants his fair
Speaker 1: trade here.
Speaker 3: I won't take that as a slight on me and
Speaker 3: my colleagues around the table, mister Treasury Secretary. But you
Speaker 3: did tell me on April second, on Liberation Day, that
Speaker 3: this was the ceiling when it comes to those rates.
Speaker 3: But since then we have actually had some tariff rates
Speaker 3: the President announced in letters higher than those rates he
Speaker 3: announced on that big chart on April second. So is
Speaker 3: there no longer a ceiling when it comes to tariff
Speaker 3: rates when you are dealing with trading partners.
Speaker 1: I think that I said, if they come and they
Speaker 1: negotiate in good faith in those are ceilings. And some
Speaker 1: of the talks got off to very very slow starts.
Speaker 3: So who's negotiating good faith at this moment? Who's not?
Speaker 1: Again? I congratulated the UK the other day, as I
Speaker 1: told many of our trading partners, and Anne Marie I
Speaker 1: may have said on that day or a few days
Speaker 1: after April second, I'd advise countries to move quickly because
Speaker 1: the President Trump the first deals are usually the best deals,
Speaker 1: and the UK came in early, they got a great deal,
Speaker 1: and everybody else is kind of dragging right now.
Speaker 3: Well, when it comes to Japan, you're headed there at
Speaker 3: the end of this week, do you expect to come
Speaker 3: back with a deal.
Speaker 1: I'm going to Japan to represent the United States government
Speaker 1: and the American people at the International Expo, which we
Speaker 1: used to know as the World's fairst So this coming
Speaker 1: Saturday is going to be America's Day, and I'll be
Speaker 1: taking a delegation includes the Labor Secretary, Deputy Secretary of
Speaker 1: State will be representing the US. This is a celebration
Speaker 1: of the US more than trade.
Speaker 2: Talks, MISSUS Secretary. Before you go, just to final question,
Speaker 2: I'm embarrassed to say that my knowledge of college basketball
Speaker 2: is nothing like yours, but I can tell you back
Speaker 2: in the nineties in English football, there used to be
Speaker 2: a concept of player managers. There used to be certain
Speaker 2: managers of football teams that also put themselves on the field,
Speaker 2: and they play too effectively. They had two jobs. And
Speaker 2: I'm wandering from your perspective whether that's something you'd be
Speaker 2: interested in. We've seen that throughout the administration. Is that
Speaker 2: something you think that you could pursue both the Treasury
Speaker 2: Secretary and the Fed chet.
Speaker 1: Look, I think I have the best job in town.
Speaker 1: I will do what President Trump wants. We got a
Speaker 1: lot of great FED candidates and I'm confident it's going
Speaker 1: to be a robot process.
Speaker 2: Jonathan, has he asked you, what's that? Has he asked you?
Speaker 2: Are you part of the process.
Speaker 1: I am part of the decision making process, but again
Speaker 1: it's the final decision.
Speaker 2: Is going to be President Trump's secretary. I appreciate your time.
Speaker 2: Thank you. The Treasury Secretary there Skyll Beson on a
Speaker 2: range of issues, including trade and the future of this
Speaker 2: federal Reserve.