WEBVTT - Live from NYC: What Is Trumponomics 2.0? 0:00:02.720 --> 0:00:07.200 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:16.440 --> 0:00:19.239 Welcome to Trump Andomics, the Bloomberg podcast that looks at 0:00:19.280 --> 0:00:22.040 the economic world of Donald Trump, how he is shaping 0:00:22.280 --> 0:00:25.800 the global economy, and what on Earth will happen next. 0:00:26.440 --> 0:00:29.080 We're hosting this episode in front of a live audience. 0:00:29.720 --> 0:00:33.080 I can't help emphasizing the word live because the last show, 0:00:33.200 --> 0:00:35.199 the last show we did was at the World Economic 0:00:35.240 --> 0:00:37.440 Forum in Davos. But I think you're very alive and 0:00:37.520 --> 0:00:41.760 much more excitingly, you're at the New York Bloomberg headquarters. 0:00:42.040 --> 0:00:45.879 We have put together top class panel of Bloomberg experts 0:00:46.360 --> 0:00:50.520 to help us unpack the topic of the week. Kind 0:00:50.520 --> 0:00:53.440 of hard to pick these days what the one topic is. 0:00:54.120 --> 0:00:57.000 But I think what is trump Andomics two point oh? 0:00:57.080 --> 0:00:59.840 What have we actually learnt in the first few weeks 0:00:59.880 --> 0:01:03.000 of this administration? Is not a bad place to start. 0:01:03.200 --> 0:01:06.240 You know, Donald Trump has always made his own weather. 0:01:06.640 --> 0:01:10.319 People tend to talk a lot about him flooding the zone, 0:01:10.680 --> 0:01:12.760 because last weekend we had not so much flooding the 0:01:12.840 --> 0:01:14.880 zone as threatening to blow it up. In the case 0:01:14.920 --> 0:01:19.760 of the closest economic relationships that the US has with 0:01:19.840 --> 0:01:23.839 its neighbors, Canada and Mexico. We talked a bit about 0:01:23.840 --> 0:01:25.920 that in the last episode of Trump Andnomics, but we're 0:01:25.920 --> 0:01:29.039 going to broaden it out with this excellent panel we 0:01:29.120 --> 0:01:33.560 have here to consider. What have we learned about the 0:01:33.600 --> 0:01:37.400 way the president's making his decisions, Who's up, who's down? 0:01:38.080 --> 0:01:41.640 And especially important, I hope to Bloomberg subscribers, what's the 0:01:41.720 --> 0:01:45.680 impact on this for markets and for investors. So let's 0:01:45.680 --> 0:01:48.080 get to it. We have a couple of Trump Andomics regulars. 0:01:48.080 --> 0:01:49.840 This is only what the third or fourth episode, but 0:01:49.840 --> 0:01:52.680 we can still we can call you regulars. Nancy Cook, 0:01:52.880 --> 0:01:55.600 who I thank very much for taking the train from 0:01:55.720 --> 0:02:00.000 DC to be with us tonight, our senior national political correspondent. 0:02:00.320 --> 0:02:02.040 Thanks Nancy, thanks for having me. 0:02:02.080 --> 0:02:03.120 It's so nice to be in New York. 0:02:03.240 --> 0:02:05.480 Did you get a moment of piece, touch a tiny 0:02:05.480 --> 0:02:07.120 moment of piece as you sat on the train or 0:02:07.160 --> 0:02:08.639 was it just hopeless to me? 0:02:09.280 --> 0:02:11.919 I went out to dinner last night and Trump said 0:02:11.919 --> 0:02:16.240 that he was going to take over Gaza, So I thought, 0:02:16.280 --> 0:02:19.080 we welcome to Trump to point out you can't go 0:02:19.080 --> 0:02:20.359 out to dinner, okay. 0:02:20.520 --> 0:02:23.400 And we have Tim o'briane, Senior Executiveloper of Bloomberg opinion, 0:02:23.520 --> 0:02:26.120 and crucially for the purpose of the podcast, author of 0:02:26.160 --> 0:02:30.120 Trump Nation, The Art of Being the Donald, Tim very 0:02:30.120 --> 0:02:33.680 good to see you, and later we're going to have 0:02:34.240 --> 0:02:38.480 Bloomberg and Ka Katie Gryfield and senior editor Ed Harrison. 0:02:38.840 --> 0:02:41.720 That'll be the more sort of money part of things. 0:02:43.000 --> 0:02:45.560 But part of the challenge with this administration, I was 0:02:45.600 --> 0:02:47.640 alluding to it before, is not so much distinguishing a 0:02:47.680 --> 0:02:50.080 signal from the noise as just kind of drawing breath. 0:02:50.440 --> 0:02:54.239 So I think it's particularly important for us, in sort 0:02:54.240 --> 0:02:57.000 of podcasts like this and events like this, to sort 0:02:57.040 --> 0:02:59.920 of step back and think what we've learned. So, Nancy, 0:03:00.080 --> 0:03:04.200 I know you've been tearing around reporting out how some 0:03:04.280 --> 0:03:08.760 of these decisions are being made, how the tariff news 0:03:09.639 --> 0:03:11.799 came together, So give us a bit of an insight 0:03:11.840 --> 0:03:12.200 into that. 0:03:12.919 --> 0:03:14.760 You Know, one thing I've learned i've covered Trump since 0:03:14.760 --> 0:03:17.720 twenty fifteen is often decisions are made on the fly, 0:03:18.400 --> 0:03:21.040 and I would say with the tariff decision, that was 0:03:21.200 --> 0:03:23.880 the case there as well. We wrote a story last 0:03:23.919 --> 0:03:26.800 week saying as of Thursday, they really hadn't made a decision, 0:03:26.919 --> 0:03:29.920 and that was true. There were some advisors calling for 0:03:30.000 --> 0:03:33.280 gradual tariffs, some people trying to say, well, let's just 0:03:33.400 --> 0:03:37.680 teariff certain industries or certain countries. There was a tiny 0:03:37.760 --> 0:03:40.680 group of people in the White House, including Stephen Miller, 0:03:40.760 --> 0:03:43.480 who many people know, who's one of the deputy chiefs 0:03:43.480 --> 0:03:46.800 of staff, who was advocating for things. The Treasury Secretary 0:03:46.840 --> 0:03:49.760 Scott Besson had just gotten in there. Trump was hearing 0:03:49.760 --> 0:03:52.560 from all these different people, also including Peter Navarro. We 0:03:52.600 --> 0:03:55.160 can't forget about him. He's quite hawkish on China and 0:03:55.280 --> 0:03:59.640 tariffs in general. But they were basically building the tariff policy, 0:04:00.080 --> 0:04:02.480 you know, as he was making the threats and sort 0:04:02.480 --> 0:04:05.040 of having all these meetings, and at the end of 0:04:05.080 --> 0:04:07.480 the day, Trump's decided that he was going to do it, 0:04:07.760 --> 0:04:10.960 and it was really like a sort of twelve hour decision. Okay, 0:04:10.960 --> 0:04:13.720 we're going to teariff these two major US allies. 0:04:13.760 --> 0:04:15.840 And do you think, just to remind ourselves, the people 0:04:15.840 --> 0:04:19.160 that he'd said were officially in charge of trade policy 0:04:20.120 --> 0:04:23.960 are not confirmed, and when you didn't mention them in your. 0:04:23.800 --> 0:04:26.479 Description, just then yeah, they're not even there yet. So 0:04:26.640 --> 0:04:29.800 officially the Commerce Secretary, who if he's confirmed, will be 0:04:29.839 --> 0:04:32.880 Howard Luttnik, who was in charge of Canter Fitzgerald. He 0:04:32.960 --> 0:04:34.600 will be in charge of it, along with the US 0:04:34.640 --> 0:04:37.600 Trade Representative Jamerson Greer, who worked in the first Trump 0:04:37.680 --> 0:04:41.520 administration as the chief of staff to Bob Leittheiser. And 0:04:41.760 --> 0:04:43.479 they're supposed to be in charge, but they're not even 0:04:43.480 --> 0:04:47.440 confirmed yet. And there was really not a political appointees 0:04:47.520 --> 0:04:50.960 at these agencies. And so right now these huge trade 0:04:51.000 --> 0:04:54.760 decisions are basically being made by Donald Trump and then 0:04:55.000 --> 0:04:56.239 three aids in the White House. 0:04:56.440 --> 0:04:58.359 Do you get the impression on the Sunday and Monday 0:04:58.920 --> 0:05:03.960 as we trying to manage the blowback from this announcement, 0:05:04.680 --> 0:05:08.360 was there sort of an disagreement about how to respond, 0:05:08.440 --> 0:05:09.479 how quickly to give in? 0:05:09.800 --> 0:05:11.880 Well, I think that there is. There was disagreement, a 0:05:11.920 --> 0:05:15.200 ton of disagreement in the first Trump administration about trade policy, 0:05:15.320 --> 0:05:18.039 and I think there continues to be disagreement. You know, 0:05:18.080 --> 0:05:21.400 Peter Navarro, who I mentioned, is much more sort of 0:05:21.440 --> 0:05:23.279 hawkish and wanting to teariff everything. 0:05:24.040 --> 0:05:24.200 You know. 0:05:24.240 --> 0:05:27.000 I would put Howard Lutnik, the incoming Commerce Secretary, in 0:05:27.040 --> 0:05:29.560 that camp, but Scott Besnt wanted to make it more gradual. 0:05:29.760 --> 0:05:31.840 But just one more example of how Trump makes these 0:05:31.839 --> 0:05:35.800 decisions on the fly. When he threatened the tariffs on Columbia. 0:05:35.839 --> 0:05:38.479 For instance, he was in Miami and golfing at his 0:05:38.520 --> 0:05:41.839 club in Durrell and you know, one source told me 0:05:42.040 --> 0:05:45.120 he was on the golf cart and pulled out his 0:05:45.279 --> 0:05:48.760 phone and on true social announced that he was going 0:05:48.839 --> 0:05:49.200 to terror. 0:05:49.240 --> 0:05:51.000 He explains what he misspelled. Columbia. 0:05:51.120 --> 0:05:53.600 Yes, announced like while he was, you know, in his 0:05:53.640 --> 0:05:56.240 golf outfit, said he's going to put tariffs on Columbia, 0:05:56.600 --> 0:05:59.000 you know, and if they don't take action in one week, 0:05:59.040 --> 0:06:01.000 they will rise to fifty And then got back on 0:06:01.080 --> 0:06:03.520 the golf cart. And so that is really I think 0:06:03.560 --> 0:06:06.520 the perfect metaphor for how he is making these decisions. 0:06:06.800 --> 0:06:08.080 You know, you could sort of make fun of it, 0:06:08.200 --> 0:06:09.760 or you could say, oh, he's doing this on the fly. 0:06:09.839 --> 0:06:11.560 But I will say, having covered him for a long 0:06:11.600 --> 0:06:13.240 time and spent a lot of time with him on 0:06:13.279 --> 0:06:17.359 the campaign trail, he is like a much more self 0:06:17.360 --> 0:06:20.080 assured leader this time. And I do think knows what 0:06:20.160 --> 0:06:22.280 he wants even more so, I. 0:06:22.240 --> 0:06:26.719 Mean tim there is this sort of line developing of oh, 0:06:26.760 --> 0:06:28.880 this was again, you know, policy being done without the 0:06:28.880 --> 0:06:31.039 grown ups in charge some of these, or with the 0:06:31.040 --> 0:06:34.280 grown ups not in the room. He's on his golf court, 0:06:34.360 --> 0:06:38.599 car whatever. But I know you're always saying, we shouldn't 0:06:38.640 --> 0:06:41.880 be surprised by any of this. This is his modus oparendum. 0:06:41.920 --> 0:06:44.080 Yeah, I mean he's you know, he's been this way 0:06:44.120 --> 0:06:49.680 since he was seven. This shouldn't surprise anybody. He's not 0:06:49.760 --> 0:06:53.680 a linear thinker. He doesn't think strategically. He thinks emotionally, 0:06:54.360 --> 0:06:58.159 and everyone around him, you know it's calling it trade 0:06:58.160 --> 0:07:00.680 policy is almost a misnomer because I think what is 0:07:00.720 --> 0:07:04.200 real intention is to use it as a cudgel, at 0:07:04.279 --> 0:07:08.560 least in the near term, to have various groups that 0:07:09.320 --> 0:07:13.200 he wants to flex around. I think he's also, particularly 0:07:13.240 --> 0:07:18.440 on Mexico, there's this confluence of campaign promises he's trying 0:07:18.440 --> 0:07:24.400 to keep around trade, immigration, drugs, and they were all 0:07:24.520 --> 0:07:27.400 critiques he had of the Bided administration. So when one 0:07:27.440 --> 0:07:32.200 fell swot he's trying to say, I will solve immigration, 0:07:32.440 --> 0:07:36.520 trade and other things that ail US as quickly as 0:07:36.560 --> 0:07:40.480 possible and with as much blunt force as possible. But 0:07:40.680 --> 0:07:43.960 the advisors he has around has around him, none of 0:07:44.000 --> 0:07:48.400 them think massive tariffs are really good. They know it's 0:07:48.480 --> 0:07:51.920 bad for trade, they know it's bad for economies, they 0:07:51.920 --> 0:07:56.160 know it dense global diplomacy, but there's succoming because you 0:07:56.240 --> 0:07:59.600 don't become a member of Trump's White House unless you 0:07:59.680 --> 0:08:00.680 get the agenda. 0:08:00.960 --> 0:08:01.320 And so. 0:08:02.800 --> 0:08:06.400 Kevin Hassett was on CNBC yesterday saying, I guess I 0:08:06.440 --> 0:08:11.680 shouldn't say the any of our competitor another network saying 0:08:11.680 --> 0:08:13.560 that this isn't a trade war, it's a drug war. 0:08:14.200 --> 0:08:16.280 And some of that is threading an eel around the 0:08:16.360 --> 0:08:19.480 legalities that Trump would need to deploy in order to 0:08:19.680 --> 0:08:23.960 act unilaterally around this. And then Scott Bessens, who also 0:08:24.000 --> 0:08:28.640 knows better the Treasury secretary, is advocating a rigorous escalation 0:08:28.760 --> 0:08:32.000 of tariffs, even though for all of his adult life 0:08:32.600 --> 0:08:35.360 he understands the virtues and importance as of free trade, 0:08:35.440 --> 0:08:39.000 and Trump himself really does not have a sophisticated grasp 0:08:39.400 --> 0:08:44.800 of economics or trade. He is interested, I think, in 0:08:44.880 --> 0:08:47.439 creating chaos because it keeps people back on their heels 0:08:47.720 --> 0:08:51.520 and it gives him room to maneuver. He did it 0:08:51.559 --> 0:08:54.840 in his business life before Trump one point zero. He 0:08:54.880 --> 0:08:56.920 did it in his first term. He will do it 0:08:56.960 --> 0:09:00.360 for the next four years. And it generally is coming 0:09:00.400 --> 0:09:04.560 from a desire to occupy the spotlight and to keep 0:09:04.600 --> 0:09:06.959 everyone else guessing about what he wants to do next. 0:09:07.240 --> 0:09:10.440 And that's an effective campaign strategy, he's proven that. But 0:09:10.480 --> 0:09:14.160 as a governing strategy, or as a way of messaging 0:09:14.200 --> 0:09:17.240 to the business community that needs to think ahead about 0:09:17.280 --> 0:09:22.360 investing long term, hiring long term, having long term trading relationships, 0:09:22.559 --> 0:09:23.679 it's an utter disaster. 0:09:24.080 --> 0:09:25.800 It's interesting. I would push back on a few this. 0:09:26.000 --> 0:09:29.480 I do think we learned. In fact, I'm allowed. I'm 0:09:29.520 --> 0:09:32.079 allowed to disagree with people. I disagree with you. No, 0:09:32.200 --> 0:09:36.240 I think we did learn actually from the president's interview 0:09:36.280 --> 0:09:39.080 with our own editor in chief John Wicklithwaite. Then he 0:09:39.160 --> 0:09:41.600 does have a theory of tariffs. I think he actually had, 0:09:41.640 --> 0:09:43.680 and he actually has an idea of using them for 0:09:43.679 --> 0:09:46.599 different things. Because we were pushing him back. John mclwaite was 0:09:46.640 --> 0:09:49.280 pushing him on isn't it inconsistent to say you're going 0:09:49.320 --> 0:09:51.560 to raise lots of money but also move production, because 0:09:51.559 --> 0:09:53.440 if you move production and reduce the amount of imports, 0:09:53.480 --> 0:09:54.920 you're not going to be able to raise the money. 0:09:55.160 --> 0:09:57.200 And he was quite clear he's like, some things we 0:09:57.240 --> 0:09:58.840 want to raise money on, we put it at a 0:09:58.840 --> 0:10:01.600 low rate. Other things we actually want to bring it 0:10:01.640 --> 0:10:04.000 back home. And that's what I think the danger that's 0:10:04.040 --> 0:10:05.560 not a theory, no, well, the Dane, well, it is 0:10:05.559 --> 0:10:08.640 that this is a selective tariff theory. I just made 0:10:08.679 --> 0:10:11.960 it up, but I think the and actually on the 0:10:12.080 --> 0:10:14.520 this week's episode of Trumponomics and A Wong, the Chief 0:10:14.600 --> 0:10:17.640 US Economists was introducing us the idea of optimal tariff theory, 0:10:17.640 --> 0:10:19.720 which I'm not sure he's read that book. It sounded 0:10:19.720 --> 0:10:23.360 way too complicated. But the difference this time is that 0:10:23.440 --> 0:10:25.880 he's also seeming to want to use it for any 0:10:26.160 --> 0:10:28.439 as a bludgeon, as you say, for lots of different things, 0:10:29.120 --> 0:10:31.880 and as a way he's using it in the same 0:10:31.960 --> 0:10:34.640 way that he used the kind of dramatic statements about 0:10:35.280 --> 0:10:38.320 Mexico paying for the wall in the first administration, or 0:10:38.320 --> 0:10:41.520 some of the sort of ground standing with NATO, and 0:10:41.760 --> 0:10:44.640 the economic costs of that could be quite significant. 0:10:44.679 --> 0:10:47.880 That much uncertainty, and I think in a world that 0:10:48.000 --> 0:10:52.400 is naturally populated with uncertainties and threats, you, I think 0:10:52.440 --> 0:10:55.840 you want leaders in various and stakeholders across society to 0:10:56.440 --> 0:11:00.240 engage in certainty and rationality. And I don't think either 0:11:00.280 --> 0:11:02.080 one of those things are going to be his strong suits. 0:11:02.080 --> 0:11:04.360 So I think people trying to sort through how you 0:11:04.400 --> 0:11:06.439 make your own decisions, either as a business leader or 0:11:06.440 --> 0:11:08.760 an investor, as a citizen, it's just going to be 0:11:08.800 --> 0:11:11.520 constantly left on their heels, and that's exactly how we 0:11:11.559 --> 0:11:14.559 want it. I would also, I would say, though I 0:11:14.600 --> 0:11:17.400 don't think there's a theory. I think there is just 0:11:18.640 --> 0:11:22.640 a need to occupy the conversation. I think that's different. 0:11:23.480 --> 0:11:26.120 Just going back to Scott Beston, because you've both mentioned him, 0:11:26.640 --> 0:11:29.280 and it struck me. I mean, he had been he 0:11:29.400 --> 0:11:31.599 was one of the early members of the administration that 0:11:31.760 --> 0:11:37.000 was nominated and was felt to be gave that dose 0:11:37.040 --> 0:11:41.079 of normality along with Marco Rubio and particularly on the economics, 0:11:41.080 --> 0:11:43.760 on the trumpnomics, he's supposed to be this critical figure 0:11:43.800 --> 0:11:48.040 of sort of stability as Wall Street background and investing background. 0:11:48.600 --> 0:11:50.760 I feel like changed our view of him a bit 0:11:50.800 --> 0:11:52.560 over the last couple of weeks. It seems like he's 0:11:52.640 --> 0:11:56.920 signing the permission slips for Elon Musk's people, letting them 0:11:57.200 --> 0:12:00.560 resting him run wild in the Department of Treasury. I mean, Nasi, 0:12:00.679 --> 0:12:02.960 is that Do you think we should think of him 0:12:02.960 --> 0:12:05.200 as a different kind of figure in this administration or 0:12:05.240 --> 0:12:06.240 is it two early days. 0:12:06.400 --> 0:12:08.240 I think that it's a little bit early, but I 0:12:08.240 --> 0:12:11.040 will say my owner reporting from he's been Treasury Secretary 0:12:11.080 --> 0:12:13.599 for a week, and I think. 0:12:14.040 --> 0:12:16.080 It's been a really quiet week for the Treasury. 0:12:16.800 --> 0:12:19.200 But I do think that he has been in a 0:12:19.240 --> 0:12:21.959 tough spot. I would say he's been in charge of 0:12:22.000 --> 0:12:24.400 one of the key agencies for just a short period 0:12:24.480 --> 0:12:27.080 of time, and Elon Musk has rolled up in there 0:12:27.559 --> 0:12:30.920 and now has access to the Treasury payment system, and 0:12:31.280 --> 0:12:34.360 that is a huge thing to control or like even 0:12:34.400 --> 0:12:37.200 have access to. Scott Besson did not get his pick, 0:12:37.240 --> 0:12:40.080 for instance, for the IRS Commissioner. You know, have reporting 0:12:40.120 --> 0:12:42.840 that he did not want the former Congressman Billy Long 0:12:42.920 --> 0:12:45.640 to get that job, so he sort of overruled on that. 0:12:46.120 --> 0:12:47.840 You know, there was a lot of fighting during the 0:12:47.880 --> 0:12:52.079 transition between Scott Besson and Howard Lutnik over who would 0:12:52.080 --> 0:12:55.240 actually get the Treasury secretary job. So I'm looking ahead 0:12:55.280 --> 0:12:58.120 to that and what the tension is between the two 0:12:58.160 --> 0:13:01.600 of them both leading trade stuff, and also just you 0:13:01.640 --> 0:13:04.719 know how that level of infighting develops. So I think 0:13:04.760 --> 0:13:08.079 it's been a tricky week and Scott is someone who 0:13:08.160 --> 0:13:11.920 I would say Wall Street respects and bond market respects, 0:13:12.040 --> 0:13:13.640 and I think people did think he was going to 0:13:13.679 --> 0:13:15.560 be the grown up in the room, and he did 0:13:15.600 --> 0:13:18.560 a pretty good job of courting sort of fringe Trump 0:13:19.320 --> 0:13:22.080 allies and building his own coalition to get the Treasury 0:13:22.120 --> 0:13:24.840 secretary job. But now that he is in there, being 0:13:24.880 --> 0:13:29.360 in Trump world does require real survival skills and real 0:13:29.679 --> 0:13:33.240 sort of political infighting skills, and I will be curious 0:13:33.280 --> 0:13:36.760 to see how he fares in that political environment. 0:13:36.640 --> 0:13:39.720 How he fared Slash losts well. 0:13:39.760 --> 0:13:41.880 You know. The other thing is that the Treasury secretary 0:13:41.920 --> 0:13:46.120 is a weak cabinet position and FED chairman, you know, 0:13:46.120 --> 0:13:48.280 that was where the action is in terms of having 0:13:48.800 --> 0:13:50.880 I think real power to affect the economy. And I 0:13:50.920 --> 0:13:57.280 think Treasury secretaries are spokespeople for an administration's economic worldview. 0:13:57.280 --> 0:13:59.960 And the ones who've been I think very effective at it, 0:14:00.080 --> 0:14:04.960 Jim Baker during the Bush administration, Bob Rubin during the 0:14:05.000 --> 0:14:08.720 Clinton administration. They're in sync with their presidents. There's a 0:14:08.840 --> 0:14:11.839 unified philosophy, and they're the ones out in the world 0:14:11.880 --> 0:14:15.600 saying these are our economic goals. And it's very hard 0:14:15.640 --> 0:14:18.280 for Trump advisors to be in sync with Trump because 0:14:18.280 --> 0:14:24.200 he's unpredictable, and then secondly, I think whatever Bessen's is 0:14:24.240 --> 0:14:28.840 saying now about Trump and his approaches to these things, 0:14:29.280 --> 0:14:32.480 it runs up against how I think Bessant has rolled 0:14:32.480 --> 0:14:34.480 through most of his career, and so he's going to be, 0:14:34.480 --> 0:14:38.200 I think, constantly caught between Irock and a hard place philosophically. 0:14:38.600 --> 0:14:41.880 Yeah, I think Besson has also recently told allies. I 0:14:41.920 --> 0:14:44.800 think he's trying to set expectations in Washington, and he 0:14:44.800 --> 0:14:47.560 has told people my number one priority for twenty twenty 0:14:47.560 --> 0:14:50.360 five is really getting through a sweeping tax bill. And 0:14:50.400 --> 0:14:52.720 so I think he's trying to steer clear of some 0:14:52.800 --> 0:14:55.800 of the landmines like trade policy and focus on this 0:14:55.840 --> 0:14:58.040 one thing. And I just think that's an interesting thing. 0:14:58.080 --> 0:15:00.440 Because I disagree with you. I think Treasury is is 0:15:00.480 --> 0:15:03.960 a great job. You're in charge of like sanctions, tax policy, 0:15:04.360 --> 0:15:07.600 international diplomacy, Like there's such a range of things that 0:15:07.680 --> 0:15:09.480 you're in charge of. You at your own plane, This. 0:15:09.360 --> 0:15:09.960 Is a cool job. 0:15:10.320 --> 0:15:12.280 I disagree with you. I don't want to be I'm 0:15:12.280 --> 0:15:14.200 happy as a reporter, but I think it's a big job. 0:15:14.200 --> 0:15:16.920 But I do think he is trying to set expectations 0:15:16.960 --> 0:15:18.600 like I will get through the tax bill, and that 0:15:18.680 --> 0:15:21.840 will be I'll be successful if I get that through. 0:15:22.720 --> 0:15:25.200 Well, I'm glad you said that. That's it. I agree 0:15:25.240 --> 0:15:27.360 with you, and I definitely have to agree with Tim 0:15:27.400 --> 0:15:30.680 because having worked for Bob Rumer, that's Treasury I saw, 0:15:30.840 --> 0:15:33.520 I think Treasury at a particularly powerful time. And we 0:15:33.600 --> 0:15:35.120 might just add that it was the last time we 0:15:35.120 --> 0:15:39.080 had a budget surplus. I'm just saying, all right, so 0:15:39.120 --> 0:15:41.400 we're going to get that gets us very nicely onto 0:15:41.440 --> 0:15:45.480 the sort of more economic y market bit of the discussion. 0:15:45.520 --> 0:15:47.120 But Nancy and Tim, thank you very much, and we're 0:15:47.120 --> 0:15:49.760 going to get you back for questions a bit later on. 0:15:49.920 --> 0:16:04.800 But thanks very much. Thanks, So we're going to bring 0:16:04.840 --> 0:16:06.880 on the other speakers. The last time we did do 0:16:06.920 --> 0:16:09.400 one of these events was at the World Economic Forum, 0:16:09.400 --> 0:16:12.240 though not with subscribers because the describers didn't make it 0:16:12.320 --> 0:16:16.000 up the hill. But the feeling there was that the 0:16:16.040 --> 0:16:20.200 investors were so incredibly positive about everything to do with 0:16:20.240 --> 0:16:23.000 the US. The markets were kind of pricing. I felt 0:16:23.040 --> 0:16:25.480 it was like pricing for the best of all possible trumps, 0:16:25.640 --> 0:16:28.280 you know, all the good things for markets, the deregulation, 0:16:28.480 --> 0:16:31.080 the extension of tax cuts, none of the bad things. 0:16:31.360 --> 0:16:32.720 And I don't know. I mean, one of the things 0:16:32.720 --> 0:16:35.880 we will get onto is whether the events of the 0:16:35.960 --> 0:16:38.320 last couple of weeks have sort of changed that feeling 0:16:38.360 --> 0:16:40.640 of a sort of fair weather for markets on Donald Trump, 0:16:40.680 --> 0:16:42.640 and I was very struck. One of my former colleagues 0:16:42.680 --> 0:16:45.160 at JP, Morgan Bruce Kasman, put out a note in 0:16:45.160 --> 0:16:48.680 the last couple of days saying this weekend's announcements point 0:16:48.720 --> 0:16:52.480 towards a materially different US policy mix than built into 0:16:52.480 --> 0:16:55.080 our outlook, and challenge the underlying view that the Trump 0:16:55.080 --> 0:16:59.000 administration will strive to limit disruptive policies. In fact, the 0:16:59.120 --> 0:17:01.600 risk is that the policy mix is tilting into a 0:17:01.680 --> 0:17:05.119 business unfriendly stance. So that's I think as sort of 0:17:05.480 --> 0:17:07.880 framing for this second part of the conversation. I'm very 0:17:08.000 --> 0:17:11.399 excited to welcome Katie Greifeld, Bloomberg TV hosts many of 0:17:11.480 --> 0:17:15.600 you will know, and co host of the Money Stuff podcast. Katie, 0:17:15.680 --> 0:17:17.480 thank you very much for joining us, Thanks for having 0:17:17.520 --> 0:17:20.760 me and Ed Harrison, senior editor and author of the 0:17:20.760 --> 0:17:24.240 Everything Risk newsletter, who's also come from Washington to be here. 0:17:24.359 --> 0:17:27.200 Katy on that, do you get the sense with all 0:17:27.240 --> 0:17:29.560 the guests that you talk to on Bloomberg TV and elsewhere, 0:17:29.600 --> 0:17:31.600 that the mood is shifting, that there is a fear 0:17:31.600 --> 0:17:34.040 that this is going to be a business unfriendly administration, 0:17:34.080 --> 0:17:35.639 at least with this kind of uncertainty. 0:17:36.560 --> 0:17:39.920 What I keep coming back to, both with guests and 0:17:40.080 --> 0:17:42.000 you know, with my Bloomberg team, is that it's only 0:17:42.040 --> 0:17:45.320 week two, so it's really hard to say, but I 0:17:45.359 --> 0:17:48.159 will say the experience with tariffs I think rattled a 0:17:48.200 --> 0:17:50.480 lot of investors that I've been speaking to this week, 0:17:50.520 --> 0:17:53.399 also a lot of business executives, because I mean, you 0:17:53.440 --> 0:17:56.520 just think about the automakers. We had forward report earnings 0:17:56.560 --> 0:18:01.960 this afternoon. And maybe tariff's a negotiating tactic. It certainly 0:18:01.960 --> 0:18:04.560 seems like the last week has proven that. But if 0:18:04.560 --> 0:18:07.320 you're running a company, if you're putting money to work, 0:18:07.400 --> 0:18:09.880 the will he won't he? When it comes to tariffs, 0:18:10.119 --> 0:18:13.240 you still have to respond. You have to game plan, 0:18:13.320 --> 0:18:16.200 you have to try to, you know, make decisions here. 0:18:16.400 --> 0:18:19.600 You think about Ford, for example, and you think about, okay, 0:18:19.640 --> 0:18:21.760 maybe we pushed out tariffs for a month. When it 0:18:21.760 --> 0:18:25.280 comes to Canada and Mexico, the auto industry would be 0:18:25.600 --> 0:18:28.800 so affected by those levies if they wanted to affect, 0:18:28.800 --> 0:18:31.840 But also how long they lasted whether or not we 0:18:31.880 --> 0:18:35.960 saw retaliation, and Jim Farley, I mean saying he said 0:18:36.040 --> 0:18:38.160 on BTV actually just about an hour or two ago, 0:18:38.280 --> 0:18:41.760 that they can see he's the CEE of Ford. They 0:18:41.800 --> 0:18:43.960 can handle a couple weeks of tariffs, but if it 0:18:44.000 --> 0:18:47.320 goes beyond that, it'll be billions and billions of dollars 0:18:47.359 --> 0:18:51.919 in incremental profit headwinds. So those are real considerations, and 0:18:52.160 --> 0:18:55.000 I think that optimism is still there. I mean, Farley 0:18:55.000 --> 0:18:57.119 went on to say that he thinks Trump will be 0:18:57.200 --> 0:19:01.359 overall positive for the auto industry, but there's question marks 0:19:01.400 --> 0:19:04.560 around that. Just all out enthusiasm and felt like we 0:19:04.600 --> 0:19:05.919 saw after the election. 0:19:07.720 --> 0:19:10.000 I would agree with that. What I would say is 0:19:10.000 --> 0:19:12.639 is that when he came on board, people were thinking 0:19:12.760 --> 0:19:16.960 low tax is low regulation, that's good for business. But 0:19:17.280 --> 0:19:20.479 with the tariffs, that's changed. And I think the thing 0:19:20.520 --> 0:19:25.640 that's changed that's most obvious is inflation expectations. That is, 0:19:25.800 --> 0:19:30.520 the expectations both from consumers and from the market that 0:19:30.840 --> 0:19:34.960 inflation will stay low. As soon as Trump became more 0:19:35.119 --> 0:19:39.720 likely to win, we saw from September forward the expectations 0:19:39.720 --> 0:19:42.600 over the next two years of inflation that's market based 0:19:42.680 --> 0:19:47.120 go from something in the one percentage area to now 0:19:47.280 --> 0:19:52.320 three percent, which is quite a move, and interestingly, very 0:19:52.320 --> 0:19:56.320 recently we've also seen an increased risk of recession, and 0:19:56.359 --> 0:20:00.359 so that's a sign that perhaps he's not going to 0:20:00.400 --> 0:20:02.119 be as friendly as we thought he was going to be. 0:20:03.040 --> 0:20:05.160 How are people thinking about the FED in that context? 0:20:05.200 --> 0:20:07.560 Because actually, well, Casey, you reminded me that we'd had 0:20:07.600 --> 0:20:10.280 this very interesting comment from the President in the last 0:20:10.320 --> 0:20:12.840 week about the FED, who's he'd always been keen on 0:20:12.880 --> 0:20:14.399 having lower and lower interest rates. 0:20:14.600 --> 0:20:18.120 Yeah, Trump loves the voliage erom pale. But this week, 0:20:18.160 --> 0:20:19.919 I mean lost sort of in all the news that 0:20:19.960 --> 0:20:21.000 we got over the weekend. 0:20:21.080 --> 0:20:23.320 He did say that he thought that the. 0:20:23.200 --> 0:20:25.520 FED made the right move last week at their meeting 0:20:25.560 --> 0:20:29.120 to hold interest rates steady, which honestly was the most 0:20:29.160 --> 0:20:30.880 surprising thing I saw over the weekend. 0:20:31.080 --> 0:20:34.520 And it is interesting to think. I love the fact. 0:20:34.560 --> 0:20:35.720 Can I just say I love the fact that you 0:20:35.760 --> 0:20:37.800 thought that was more exciting than the twenty five. 0:20:39.440 --> 0:20:40.960 Yeah, if I couldn't, I wish I could be a 0:20:41.000 --> 0:20:43.720 fly on the wall to seedge roam palcy that headline. 0:20:43.760 --> 0:20:44.560 But I don't know. 0:20:44.640 --> 0:20:47.560 There's this idea of the FED put that has always percolated. 0:20:47.600 --> 0:20:50.160 There's the idea of the Trump put that's been out there, 0:20:50.280 --> 0:20:53.040