1 00:00:02,520 --> 00:00:10,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cockley and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,360 --> 00:00:29,560 Speaker 2: Alongside Jordan's King Abdullah, President Trump holding forth in an 7 00:00:29,640 --> 00:00:32,720 Speaker 2: unexpected news conference that was supposed to be close press 8 00:00:32,760 --> 00:00:35,880 Speaker 2: and a meeting that will extend through the day. Here, 9 00:00:35,960 --> 00:00:38,480 Speaker 2: of course, the first Arab leader to visit this new 10 00:00:38,479 --> 00:00:41,400 Speaker 2: White House at a precarious time in the Middle East, 11 00:00:41,720 --> 00:00:45,200 Speaker 2: Donald Trump speaking to his proposals for the Gaza strip 12 00:00:45,720 --> 00:00:48,000 Speaker 2: that are quite controversial and one that the King of 13 00:00:48,080 --> 00:00:50,880 Speaker 2: Jordan is likely not going to be agreeing with even 14 00:00:50,920 --> 00:00:53,760 Speaker 2: after meetings today. Although Kaylee, as we just heard from 15 00:00:53,840 --> 00:00:57,520 Speaker 2: King Abdullah, Jordan will be receiving a couple of thousand 16 00:00:57,840 --> 00:01:01,520 Speaker 2: sick Palestinian children as opposed to the hundreds of thousands 17 00:01:01,960 --> 00:01:05,800 Speaker 2: of potential refugees under the eyes of Donald Trump that 18 00:01:05,840 --> 00:01:09,360 Speaker 2: he was hoping Jordan might accept. I'm Joe Matthew alongside 19 00:01:09,440 --> 00:01:12,120 Speaker 2: Kaylee Lines in Washington. This is Balance of Power on 20 00:01:12,200 --> 00:01:16,320 Speaker 2: Bloomberg TV. And radio. Interesting to have the media in 21 00:01:16,360 --> 00:01:18,520 Speaker 2: the room for what was supposed to be a private conversation. 22 00:01:18,920 --> 00:01:21,160 Speaker 3: Yeah, and there is no telling whether or not this 23 00:01:21,280 --> 00:01:23,679 Speaker 3: is something the King of Jordan was actually looking forward 24 00:01:23,720 --> 00:01:26,039 Speaker 3: to considering. They made a point to not schedule a 25 00:01:26,120 --> 00:01:28,319 Speaker 3: joint press conference where they would have to field questions 26 00:01:28,360 --> 00:01:30,679 Speaker 3: from reporters, and yet they did have to do so 27 00:01:30,760 --> 00:01:33,039 Speaker 3: inside the Oval Office. To your point, show the number 28 00:01:33,080 --> 00:01:36,360 Speaker 3: two thousand six children from Gaza that Jordan has agreed 29 00:01:36,400 --> 00:01:39,960 Speaker 3: to accept, but no such agreements made on wider acceptance 30 00:01:40,120 --> 00:01:43,399 Speaker 3: of those who are currently in Gaza, and no real 31 00:01:43,680 --> 00:01:47,040 Speaker 3: input from the King of Jordan as to Donald Trump's 32 00:01:47,040 --> 00:01:49,200 Speaker 3: plan for the US to take over Gaza. The King 33 00:01:49,440 --> 00:01:51,920 Speaker 3: suggested that the Egyptian plan needs to be looked at 34 00:01:51,960 --> 00:01:54,120 Speaker 3: as well. Really, no commitments made on that front, even 35 00:01:54,160 --> 00:01:56,640 Speaker 3: though clearly the President of the United States is doubling 36 00:01:56,680 --> 00:01:57,160 Speaker 3: down on that. 37 00:01:57,520 --> 00:02:01,360 Speaker 2: Yeah, and suggested they were ninety percent on the way 38 00:02:01,400 --> 00:02:03,200 Speaker 2: to a deal with Egypt. I think was the word 39 00:02:03,200 --> 00:02:05,400 Speaker 2: that he used. So we'll see what comes from all 40 00:02:05,440 --> 00:02:09,280 Speaker 2: of this. This is obviously an important conversation since Donald 41 00:02:09,280 --> 00:02:12,240 Speaker 2: Trump came into office and he has reiterated his threat 42 00:02:12,520 --> 00:02:16,160 Speaker 2: for all Hell to break out in Gaza if hostages 43 00:02:16,200 --> 00:02:18,720 Speaker 2: are not released by noontime on Saturday. He said he 44 00:02:18,760 --> 00:02:21,000 Speaker 2: did not accept that to happen. Expect that to happen. 45 00:02:21,080 --> 00:02:21,320 Speaker 1: Kid. 46 00:02:21,440 --> 00:02:22,760 Speaker 3: Yeah, So we want to get into all of this 47 00:02:22,800 --> 00:02:25,800 Speaker 3: now and turn to Ian Marlow, who covers foreign policy 48 00:02:25,800 --> 00:02:27,520 Speaker 3: for US here at Bloomberg and is here with us 49 00:02:27,520 --> 00:02:30,119 Speaker 3: in our Washington, d C. Studio. So, Ian, obviously there's 50 00:02:30,120 --> 00:02:31,880 Speaker 3: a lot to work through here. But when it comes 51 00:02:31,919 --> 00:02:34,919 Speaker 3: to the plans and Gaza specifically, there's first the notion 52 00:02:35,040 --> 00:02:39,079 Speaker 3: that Palestinians would be forced to leave Gaza and unclear 53 00:02:39,240 --> 00:02:41,040 Speaker 3: listening to the President just now as to whether or 54 00:02:41,080 --> 00:02:44,160 Speaker 3: not they would be welcome back to it once the 55 00:02:44,240 --> 00:02:46,120 Speaker 3: land is redeveloped. Then there's the question of who would 56 00:02:46,120 --> 00:02:49,000 Speaker 3: actually accept these individuals if they dained to leave. Are 57 00:02:49,040 --> 00:02:51,920 Speaker 3: we getting clarity on whether there's going to be cooperation 58 00:02:52,000 --> 00:02:53,720 Speaker 3: with what President Trump wants to do here. 59 00:02:54,040 --> 00:02:57,560 Speaker 4: No, And the only thing I think the whole region 60 00:02:57,600 --> 00:02:59,959 Speaker 4: can agree on is that this idea is a total 61 00:03:00,120 --> 00:03:04,000 Speaker 4: non starter. It is fascinating to watch the Jordanian king 62 00:03:04,760 --> 00:03:08,320 Speaker 4: kind of squirm in his chair there, possibly not even 63 00:03:08,400 --> 00:03:10,880 Speaker 4: realizing this was going to be a public meeting. With 64 00:03:11,000 --> 00:03:13,799 Speaker 4: media there asking questions, asking questions to him about whether 65 00:03:13,840 --> 00:03:17,160 Speaker 4: he would accept Palestinians. You have to remember, throughout the 66 00:03:17,160 --> 00:03:21,200 Speaker 4: whole Biden administration, throughout several decades, the idea of Palestinians 67 00:03:22,320 --> 00:03:26,800 Speaker 4: being expelled from Gaza is unbelievably offensive to to so 68 00:03:26,919 --> 00:03:29,240 Speaker 4: many people across the Middle East. And as part of 69 00:03:29,720 --> 00:03:34,080 Speaker 4: the animating idea, you know that there's the animating challenge 70 00:03:34,120 --> 00:03:38,840 Speaker 4: but behind the Israeli Palestinian conflict, and and Trump is 71 00:03:38,840 --> 00:03:42,480 Speaker 4: coming in here hoping to ignore history and view this 72 00:03:42,760 --> 00:03:46,080 Speaker 4: as a real estate deal. And the Jordanian king, who 73 00:03:46,200 --> 00:03:49,240 Speaker 4: himself is dealing with a bit of a shaky proposition 74 00:03:49,280 --> 00:03:51,680 Speaker 4: at home in terms of the population, the popularity of 75 00:03:51,720 --> 00:03:55,240 Speaker 4: the monarchy and UH, and you know, potential unrest that 76 00:03:55,320 --> 00:03:57,680 Speaker 4: they worry about will kind of trickle over the border 77 00:03:57,760 --> 00:04:01,320 Speaker 4: from from from the West Bank into join Uh. There's 78 00:04:01,560 --> 00:04:06,440 Speaker 4: huge concerns there about what being forced to take Palestinians 79 00:04:07,080 --> 00:04:09,680 Speaker 4: out of out of Gaza, you know, out of Palace, 80 00:04:09,720 --> 00:04:12,760 Speaker 4: you know what they view as Palestine and have them 81 00:04:12,800 --> 00:04:15,280 Speaker 4: never come back. I mean, this is just it's it's 82 00:04:15,840 --> 00:04:19,680 Speaker 4: for for Jordanians, for Egyptians. This is not going to 83 00:04:19,720 --> 00:04:24,440 Speaker 4: happen and so it's it's very interesting to see how 84 00:04:24,480 --> 00:04:26,680 Speaker 4: Trump is going to keep pushing this forward. What he 85 00:04:26,720 --> 00:04:29,360 Speaker 4: hopes to get. Is it just to pressure Hamas into 86 00:04:29,440 --> 00:04:32,360 Speaker 4: taking a deal. Is it something he's going to really 87 00:04:32,400 --> 00:04:36,799 Speaker 4: fully carry through on. It's it's fascinating to watch. 88 00:04:36,839 --> 00:04:39,159 Speaker 2: What happens at noontime Saturday. 89 00:04:40,120 --> 00:04:44,240 Speaker 4: Yeah, it'll be interesting to see exactly how Hamas and 90 00:04:44,360 --> 00:04:50,000 Speaker 4: Israel deal with this. To some degree, Israel and the 91 00:04:50,080 --> 00:04:53,880 Speaker 4: Israeli far right are the only people in the region 92 00:04:54,480 --> 00:04:57,599 Speaker 4: or in the world who are really taking the idea 93 00:04:57,680 --> 00:05:02,159 Speaker 4: of expelling Palestinians from Gaza seriously. To them, the idea 94 00:05:02,520 --> 00:05:05,599 Speaker 4: is great. I mean, there's a lot on the Israeli 95 00:05:05,680 --> 00:05:08,000 Speaker 4: right who who want to do that and have wanted 96 00:05:08,040 --> 00:05:09,640 Speaker 4: to do that for years, and they want the West 97 00:05:09,640 --> 00:05:14,400 Speaker 4: Bank as well. So it's that idea has found traction 98 00:05:14,560 --> 00:05:18,080 Speaker 4: in Israel in a way that it it hasn't, and 99 00:05:18,160 --> 00:05:21,440 Speaker 4: so it's now that it's being tied up with the 100 00:05:21,480 --> 00:05:26,080 Speaker 4: actual hostage release process in the ceasefire. I don't know 101 00:05:26,080 --> 00:05:30,200 Speaker 4: if that's incredibly combustible or whether it you know, whether 102 00:05:30,240 --> 00:05:31,760 Speaker 4: it's a good thing or a bad thing in terms 103 00:05:31,800 --> 00:05:34,440 Speaker 4: of piling pressure for them to keep the deal going 104 00:05:34,480 --> 00:05:39,359 Speaker 4: because you know, the alternative that Trump is offering is 105 00:05:39,440 --> 00:05:42,240 Speaker 4: just so extreme. You can imagine the Jordanians and the Egyptians, 106 00:05:43,160 --> 00:05:45,039 Speaker 4: you know, want the ceasefire to keep going. They don't 107 00:05:45,080 --> 00:05:48,320 Speaker 4: want to see, you know, you know, some renewed conflict. 108 00:05:47,880 --> 00:05:50,120 Speaker 3: Aium well, and on the kind of extremity of what 109 00:05:50,279 --> 00:05:52,760 Speaker 3: the president is proposing. He was asked by journalists in 110 00:05:52,800 --> 00:05:55,240 Speaker 3: the Oval Office this notion that this is not US 111 00:05:55,279 --> 00:05:57,680 Speaker 3: sovereign territory we're talking about. When he was asked by 112 00:05:57,680 --> 00:05:59,680 Speaker 3: what authority he thinks the US can go in, he 113 00:05:59,720 --> 00:06:02,839 Speaker 3: just said, US authority suggested they wouldn't have to buy Gaza, 114 00:06:02,920 --> 00:06:05,960 Speaker 3: they can just go in Ian is that's not true. 115 00:06:06,279 --> 00:06:09,200 Speaker 4: It's not true, It's not possible. You know a lot 116 00:06:09,240 --> 00:06:12,240 Speaker 4: of people who have watched the region for decades, who 117 00:06:12,240 --> 00:06:14,000 Speaker 4: have worked for the US government, are just saying this 118 00:06:14,760 --> 00:06:18,440 Speaker 4: idea does not make any sense, and that privately a 119 00:06:18,440 --> 00:06:23,279 Speaker 4: lot of the Arab officials think this is it's nutty, right, 120 00:06:23,400 --> 00:06:25,320 Speaker 4: And it's just a. 121 00:06:25,320 --> 00:06:28,440 Speaker 3: Question if anyone would act to stop the US trying 122 00:06:28,480 --> 00:06:30,600 Speaker 3: to do this, if Donald Trump were really just send 123 00:06:30,600 --> 00:06:31,120 Speaker 3: people over. 124 00:06:31,440 --> 00:06:33,880 Speaker 4: Yeah, it's hard to see it. It's hard to even 125 00:06:33,880 --> 00:06:36,320 Speaker 4: fathom what that would what that would look like other 126 00:06:36,360 --> 00:06:38,520 Speaker 4: than boots on the ground, and boots on the ground 127 00:06:38,600 --> 00:06:40,600 Speaker 4: is something that you know, a lot of people who 128 00:06:40,680 --> 00:06:43,080 Speaker 4: voted for him, a lot of people you know, in 129 00:06:43,160 --> 00:06:45,919 Speaker 4: his defense department, don't really want to see. And so 130 00:06:46,120 --> 00:06:48,320 Speaker 4: it'll be interesting to see what that looks like. I mean, 131 00:06:48,320 --> 00:06:53,880 Speaker 4: Gaza is largely rubble now. It is a very complicated, 132 00:06:54,920 --> 00:06:59,320 Speaker 4: tragic situation. And again, like you know, the White House 133 00:06:59,360 --> 00:07:03,240 Speaker 4: is selling this is outside the box thinking. And you know, potentially, 134 00:07:03,480 --> 00:07:06,800 Speaker 4: you know, as the authors of the Abraham Accords that 135 00:07:07,279 --> 00:07:10,320 Speaker 4: united parts of the region before in the last administration, 136 00:07:11,080 --> 00:07:13,560 Speaker 4: maybe they have some track record thinking outside the box 137 00:07:13,600 --> 00:07:15,720 Speaker 4: on this. But for many people who look at these 138 00:07:15,720 --> 00:07:20,880 Speaker 4: issues seriously, it's hard to see how any of the 139 00:07:20,920 --> 00:07:25,920 Speaker 4: logistics or mechanics or practicalities of this would work in 140 00:07:25,960 --> 00:07:26,680 Speaker 4: any way at all. 141 00:07:27,200 --> 00:07:29,680 Speaker 2: Insights from Ian Marlow. Thank you Ian, as always reporting 142 00:07:29,680 --> 00:07:33,080 Speaker 2: on diplomacyed foreign policy here at Bloomberg in Washington. 143 00:07:35,280 --> 00:07:38,760 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 144 00:07:38,840 --> 00:07:42,280 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 145 00:07:42,360 --> 00:07:45,360 Speaker 1: Cockley and Android Auto with the Bloomberg Business app. You 146 00:07:45,400 --> 00:07:48,880 Speaker 1: can also listen live on Amazon Alexa from our flagship 147 00:07:48,920 --> 00:07:53,520 Speaker 1: New York station, Just Say Alexa played Bloomberg eleven thirty. 148 00:07:54,280 --> 00:07:56,840 Speaker 2: We've been balancing a couple of developing and breaking stories 149 00:07:56,840 --> 00:07:59,520 Speaker 2: since we came to air at noontime Eastern. It was 150 00:07:59,560 --> 00:08:02,440 Speaker 2: only about an hour ago, in fact, that fed Share J. 151 00:08:02,680 --> 00:08:06,320 Speaker 2: Powell wrapped his first of two days of testimony on 152 00:08:06,360 --> 00:08:10,000 Speaker 2: Capitol Hill, making it clear that no interest rate cuts 153 00:08:10,040 --> 00:08:11,240 Speaker 2: are coming anytime soon. 154 00:08:12,320 --> 00:08:15,640 Speaker 5: With our policy stance now significantly less restricted than it 155 00:08:15,840 --> 00:08:19,200 Speaker 5: restrictive than it had been, and the economy remaining strong, 156 00:08:20,040 --> 00:08:21,800 Speaker 5: we do not need to be in a hurry to 157 00:08:21,880 --> 00:08:26,200 Speaker 5: adjust our policy stance. We know that reducing policy restraint 158 00:08:26,400 --> 00:08:30,360 Speaker 5: too fast or too much could hinder progress on inflation. 159 00:08:32,000 --> 00:08:36,680 Speaker 2: Also watching and listening today, Diane Swank, chief economist KPMG, 160 00:08:36,840 --> 00:08:40,080 Speaker 2: with us now live on Bloomberg TV and Radio. Diane, 161 00:08:40,080 --> 00:08:41,600 Speaker 2: it's great to have you back. Thank you for your 162 00:08:41,679 --> 00:08:43,960 Speaker 2: patients as we balance a couple of stories here based 163 00:08:44,000 --> 00:08:47,000 Speaker 2: on what you just heard from Chair Powell today, and 164 00:08:47,040 --> 00:08:48,960 Speaker 2: of course we're going to have another conversation on the 165 00:08:48,960 --> 00:08:52,600 Speaker 2: House side tomorrow, and the fact that basically rate cuts 166 00:08:52,679 --> 00:08:55,680 Speaker 2: are not fully priced in until September. Should the fed 167 00:08:55,679 --> 00:08:57,920 Speaker 2: Share just take the next six months off. 168 00:09:00,960 --> 00:09:02,440 Speaker 6: I think the Fed's going to take more than the 169 00:09:02,480 --> 00:09:05,200 Speaker 6: next six months off. The bottom line is the FED 170 00:09:05,280 --> 00:09:07,200 Speaker 6: is made very clear that they're not going to front 171 00:09:07,240 --> 00:09:11,199 Speaker 6: run any policies by this administration. I think that's important. 172 00:09:11,240 --> 00:09:13,719 Speaker 6: The other side of it is they have eased that 173 00:09:13,840 --> 00:09:17,600 Speaker 6: last cut in December was controversial within the Federal Reserve. 174 00:09:18,000 --> 00:09:20,920 Speaker 6: We saw the descent, but we also saw thirty percent 175 00:09:20,960 --> 00:09:23,560 Speaker 6: of participants that were at that meeting did not see 176 00:09:23,600 --> 00:09:27,160 Speaker 6: any cuts at all going forward. And the fact that j. 177 00:09:27,360 --> 00:09:29,680 Speaker 6: Powell was much more open to the fact that the 178 00:09:29,760 --> 00:09:33,680 Speaker 6: neutral rate had moved up substantially from where we were 179 00:09:33,800 --> 00:09:37,480 Speaker 6: pre pandemic is important as well, because the fear is 180 00:09:37,720 --> 00:09:42,359 Speaker 6: with inflation still smoldering out there, you could easily reignite 181 00:09:42,480 --> 00:09:44,640 Speaker 6: inflation and that is not a place they want to be. 182 00:09:44,679 --> 00:09:48,479 Speaker 6: And frankly, all the economic data makes them very comfortable 183 00:09:48,600 --> 00:09:51,319 Speaker 6: being on the sidelines well. 184 00:09:51,360 --> 00:09:54,959 Speaker 3: As we talk about inflation smoldering, though Diane Chairman Powell 185 00:09:54,960 --> 00:09:58,319 Speaker 3: today suggested that inflation expectations are still well anchored, and 186 00:09:58,360 --> 00:10:00,600 Speaker 3: I wonder if you share that view. Consider on the 187 00:10:00,600 --> 00:10:03,480 Speaker 3: subject of data, we had missed figures that showed inflation 188 00:10:03,600 --> 00:10:06,920 Speaker 3: expectations rising on the part of the consumer because of tariffs. 189 00:10:07,000 --> 00:10:09,440 Speaker 3: Is there not a risk here that an unanchoring could 190 00:10:09,440 --> 00:10:10,079 Speaker 3: be upon us. 191 00:10:12,800 --> 00:10:15,280 Speaker 6: I think there is a risk that ungreed could be 192 00:10:15,360 --> 00:10:18,319 Speaker 6: upon us. We saw in the University of Michigan Index 193 00:10:18,520 --> 00:10:21,760 Speaker 6: two months in a row where fears of inflation moved 194 00:10:21,840 --> 00:10:24,880 Speaker 6: up on fears of tariffs. So clearly that's in the 195 00:10:24,920 --> 00:10:29,120 Speaker 6: consumer's mindset. CEOs are not showing as much of an 196 00:10:29,120 --> 00:10:32,360 Speaker 6: increase in their inflation expectations, and they've actually continued to 197 00:10:32,400 --> 00:10:35,160 Speaker 6: come down. And there's mixed news from the New York 198 00:10:35,160 --> 00:10:37,959 Speaker 6: Fed as well. Their surveys show that a pickup in 199 00:10:38,040 --> 00:10:42,760 Speaker 6: inflation in December, but expectations by consumers in January, because 200 00:10:42,760 --> 00:10:46,800 Speaker 6: we did not get the initial tariff announcements on the 201 00:10:46,840 --> 00:10:49,960 Speaker 6: inauguration day that actually came off a little bit. So 202 00:10:50,200 --> 00:10:52,080 Speaker 6: there's a lot of mixed news down that. But we've 203 00:10:52,120 --> 00:10:55,840 Speaker 6: also seen within the FED themselves debating whether or not 204 00:10:56,240 --> 00:11:00,920 Speaker 6: inflation expectations are well anchored and could they be unanchored. 205 00:11:00,960 --> 00:11:04,440 Speaker 6: We heard Lori Logan address this from the Dallas FED 206 00:11:04,480 --> 00:11:06,959 Speaker 6: two and I think that's very important to remember, is 207 00:11:07,000 --> 00:11:09,720 Speaker 6: that the debate within the FED is really heating up 208 00:11:10,040 --> 00:11:13,360 Speaker 6: as inflation is not cooling as fast as they'd like, 209 00:11:13,520 --> 00:11:17,439 Speaker 6: and that concern about reigniting those smolder numbers is still 210 00:11:17,440 --> 00:11:17,959 Speaker 6: out there. 211 00:11:18,960 --> 00:11:21,800 Speaker 2: So to what extent then, could tariffs still change the 212 00:11:21,920 --> 00:11:24,280 Speaker 2: view of the Fed. We've basically got a thirty day 213 00:11:24,320 --> 00:11:27,200 Speaker 2: review underway right now when it comes to Canada and 214 00:11:27,280 --> 00:11:30,880 Speaker 2: Mexico for instance, Donald Trump has also been promising more 215 00:11:30,920 --> 00:11:34,160 Speaker 2: when it comes to reciprocal tariffs. What is it going 216 00:11:34,200 --> 00:11:40,200 Speaker 2: to take for tariffs to change the forecast? For Jpowell? 217 00:11:40,320 --> 00:11:42,200 Speaker 6: Well, this is a FED that doesn't want to front 218 00:11:42,240 --> 00:11:45,280 Speaker 6: run any policy, so they'll wait and see what the 219 00:11:45,320 --> 00:11:49,600 Speaker 6: actual impact of tariffs are and what tariffs are actually implemented. 220 00:11:49,960 --> 00:11:54,080 Speaker 6: That said, we do know that historically the tariffs are 221 00:11:54,200 --> 00:11:58,120 Speaker 6: inflationary unless we see a big spike in unemployment, and 222 00:11:58,480 --> 00:12:01,320 Speaker 6: those two things have not yet occurred, and so the 223 00:12:01,360 --> 00:12:03,680 Speaker 6: FED doesn't want to get too far ahead of itself. 224 00:12:03,920 --> 00:12:07,480 Speaker 6: But the bottom line is, if tariffs are enacted without 225 00:12:07,480 --> 00:12:10,240 Speaker 6: a spike in employment unemployment, you will see the FED 226 00:12:10,320 --> 00:12:14,319 Speaker 6: act and continue to stay on the sidelines. Hopefully they 227 00:12:14,360 --> 00:12:16,840 Speaker 6: don't want to have to reverse course and after raise 228 00:12:16,960 --> 00:12:19,520 Speaker 6: rates against after they cut rates so much, And I 229 00:12:19,559 --> 00:12:22,160 Speaker 6: think that's important as well, because if we're talking about 230 00:12:22,200 --> 00:12:25,319 Speaker 6: a much higher neutral rate, what is it? And nobody 231 00:12:25,320 --> 00:12:28,360 Speaker 6: actually knows what the neutral rate is. That's sort of 232 00:12:28,360 --> 00:12:31,600 Speaker 6: a fuzzy number that moves around, and the concern is 233 00:12:31,640 --> 00:12:34,440 Speaker 6: that we could be already too close to it. And 234 00:12:34,480 --> 00:12:36,680 Speaker 6: that's something I think that you're going to see much 235 00:12:36,720 --> 00:12:39,840 Speaker 6: more of a debate within the FED coming out in 236 00:12:39,960 --> 00:12:43,400 Speaker 6: terms of people talking differently about how they see inflation 237 00:12:43,559 --> 00:12:44,240 Speaker 6: going forward. 238 00:12:45,800 --> 00:12:47,800 Speaker 3: Well, and of course it's not just the FED talking 239 00:12:47,840 --> 00:12:50,880 Speaker 3: amongst themselves, Diane, but people talking about the FED, including 240 00:12:50,880 --> 00:12:54,000 Speaker 3: those in this administration. Just last week, we had an 241 00:12:54,000 --> 00:12:57,559 Speaker 3: exclusive conversation with Scott Best and the new Treasury Secretary 242 00:12:57,640 --> 00:13:00,600 Speaker 3: suggesting he does not want to weigh in on monetary policy, 243 00:13:00,880 --> 00:13:03,640 Speaker 3: basically saying that this administration is not concerned as to 244 00:13:03,679 --> 00:13:05,960 Speaker 3: whether or not the FED wants is to cut rates 245 00:13:06,000 --> 00:13:08,320 Speaker 3: or high rates. They're just trying to make sure that 246 00:13:08,400 --> 00:13:10,680 Speaker 3: the tenure yield goes down. We heard the Chairman talking 247 00:13:10,720 --> 00:13:12,840 Speaker 3: about this in the testimony today, that actually the FED 248 00:13:12,880 --> 00:13:15,559 Speaker 3: only has so much control over things like mortgage race 249 00:13:15,600 --> 00:13:17,720 Speaker 3: because it's about what the tenure is doing. Do you 250 00:13:17,800 --> 00:13:23,040 Speaker 3: see the ability for fiscal conversations happening here in Washington, 251 00:13:23,080 --> 00:13:24,839 Speaker 3: even if the FED is not really trying to take 252 00:13:24,880 --> 00:13:28,280 Speaker 3: those into accounts, still altering what borrowing costs look like 253 00:13:28,320 --> 00:13:28,559 Speaker 3: in this. 254 00:13:28,559 --> 00:13:35,480 Speaker 6: Economy absolutely, I mean everything from deficit financying of tax 255 00:13:35,600 --> 00:13:39,200 Speaker 6: cuts that could push the yield up even further. On 256 00:13:39,240 --> 00:13:41,280 Speaker 6: the other side of it, some of the spending cuts 257 00:13:41,280 --> 00:13:44,680 Speaker 6: that they're trying to attempt to do may actually take 258 00:13:44,720 --> 00:13:47,120 Speaker 6: some of the steam out of the upward rise in 259 00:13:47,280 --> 00:13:50,800 Speaker 6: bond yields. So clearly this is outside of the Fed's purview. 260 00:13:51,160 --> 00:13:53,000 Speaker 6: They can only do what they can do at the 261 00:13:53,000 --> 00:13:55,960 Speaker 6: short end of the curve. The Treasury Secretary is also 262 00:13:56,000 --> 00:13:58,400 Speaker 6: made clear that he would like to change some things 263 00:13:58,400 --> 00:13:59,960 Speaker 6: that he's doing at the long end of the cur 264 00:14:00,080 --> 00:14:03,120 Speaker 6: her and perhaps be able. There has been a statements 265 00:14:03,160 --> 00:14:06,120 Speaker 6: by the administration they'd like to see a dollar depreciation. 266 00:14:06,320 --> 00:14:08,640 Speaker 6: That's why they're so focused on the long end of 267 00:14:08,679 --> 00:14:12,040 Speaker 6: the yield curve. What is unclear is how much they 268 00:14:12,040 --> 00:14:14,680 Speaker 6: could actually engineer that on their own. 269 00:14:15,880 --> 00:14:20,160 Speaker 2: What's the higher deficits mean for inflation, Diane, particularly if 270 00:14:20,160 --> 00:14:24,040 Speaker 2: the Trump tax cuts, if extended, are not paid for. 271 00:14:27,040 --> 00:14:29,760 Speaker 6: Well. The extension of the tax cuts alone aren't all 272 00:14:29,760 --> 00:14:33,400 Speaker 6: that stimulative because we're already in place, so you know, 273 00:14:33,480 --> 00:14:36,480 Speaker 6: falling off a cliff of not extending the tax cuts 274 00:14:36,520 --> 00:14:40,080 Speaker 6: that would be holding back the economy quite dramatically. What 275 00:14:40,120 --> 00:14:43,320 Speaker 6: really matters is the composition of tax cuts going forward. 276 00:14:43,360 --> 00:14:46,560 Speaker 6: Are they going to be just extensions and sweeteners for 277 00:14:46,720 --> 00:14:50,600 Speaker 6: individuals or will there also be some offsets on investment 278 00:14:50,640 --> 00:14:53,720 Speaker 6: to try to offset any losses we see due to 279 00:14:53,800 --> 00:14:56,800 Speaker 6: tariffs and the higher costs of tariffs. And that's where 280 00:14:56,800 --> 00:14:59,360 Speaker 6: a lot of debate is currently going on in Washington 281 00:14:59,400 --> 00:15:01,680 Speaker 6: and trying to think about how do we think about 282 00:15:01,800 --> 00:15:05,160 Speaker 6: expensing investments right now? How do we think about R 283 00:15:05,200 --> 00:15:06,840 Speaker 6: and D. I don't think they're going to come up 284 00:15:06,840 --> 00:15:09,800 Speaker 6: with any solutions on that till year end because it 285 00:15:09,880 --> 00:15:13,520 Speaker 6: is so complicated. But depending on where the tax cuts 286 00:15:13,560 --> 00:15:16,360 Speaker 6: actually come, that will have a different effect on the 287 00:15:16,440 --> 00:15:19,720 Speaker 6: overall treasury bond market. But we have seen some return 288 00:15:19,840 --> 00:15:23,040 Speaker 6: globally of the bond vigilantes, and I don't think they're 289 00:15:23,040 --> 00:15:26,880 Speaker 6: limited anymore to developing economies alone. We've already seen the 290 00:15:27,000 --> 00:15:30,400 Speaker 6: UK and France actually feel their ire. 291 00:15:31,880 --> 00:15:35,160 Speaker 3: Well, Diane. Obviously, the argument the administration makes in favor 292 00:15:35,160 --> 00:15:37,600 Speaker 3: of tax cuts is that is going to juice growth, 293 00:15:37,720 --> 00:15:40,720 Speaker 3: but I do wonder what realistically you think GDP growth 294 00:15:40,760 --> 00:15:43,320 Speaker 3: expectations will look like if yes, you get those tax cuts, 295 00:15:43,360 --> 00:15:45,840 Speaker 3: or at the very least we don't fall off a cliff, 296 00:15:45,880 --> 00:15:48,880 Speaker 3: but it's coming with tariffs, with changes in the labor 297 00:15:48,880 --> 00:15:52,040 Speaker 3: market because of deportations from the reduction and size of 298 00:15:52,080 --> 00:15:54,280 Speaker 3: the federal government. How does all of that come together 299 00:15:54,320 --> 00:15:55,200 Speaker 3: as one big picture? 300 00:15:57,800 --> 00:16:01,080 Speaker 6: What really is an issue of sequencing what happens first 301 00:16:01,160 --> 00:16:04,480 Speaker 6: and what matters first? Because the tax cuts are likely 302 00:16:04,520 --> 00:16:07,720 Speaker 6: backloaded into twenty twenty six and twenty twenty seven, so 303 00:16:08,040 --> 00:16:11,560 Speaker 6: the upward effect on growth is in those years. Well, 304 00:16:11,840 --> 00:16:16,880 Speaker 6: the suppressing effect of higher inflation and the immigration losses 305 00:16:17,240 --> 00:16:20,360 Speaker 6: that comes up front as well. It depends on how fast. 306 00:16:20,440 --> 00:16:23,600 Speaker 6: Usually we see these things evolve very slowly, but the 307 00:16:23,640 --> 00:16:25,920 Speaker 6: shock and add that the administration has been going for 308 00:16:26,120 --> 00:16:30,640 Speaker 6: to get faster economic results, particularly on the immigration front, 309 00:16:30,800 --> 00:16:34,320 Speaker 6: could also have more damaging effects. We already have heard, 310 00:16:34,520 --> 00:16:37,640 Speaker 6: certainly anecdotally from a lot of firms that have said 311 00:16:37,720 --> 00:16:40,560 Speaker 6: they're not able to do the kind of things that 312 00:16:40,600 --> 00:16:43,800 Speaker 6: they thought they could because workers literally aren't showing up 313 00:16:43,880 --> 00:16:48,240 Speaker 6: because of fear of deportation. So that has its own 314 00:16:48,600 --> 00:16:52,040 Speaker 6: stagnating effect on the economy and its own drag on 315 00:16:52,160 --> 00:16:55,920 Speaker 6: economic growth. It also cuts into our ability to grow 316 00:16:56,040 --> 00:16:59,200 Speaker 6: potential growth. And of course we know immigration is a 317 00:16:59,200 --> 00:17:02,320 Speaker 6: big part of the deficit in terms of lowering it 318 00:17:02,400 --> 00:17:06,240 Speaker 6: because immigrants pay into Social Security and Medicare, but they 319 00:17:06,280 --> 00:17:09,399 Speaker 6: cannot collect it unless they ever achieve a Green card 320 00:17:09,840 --> 00:17:11,480 Speaker 6: or actual US citizenship. 321 00:17:12,960 --> 00:17:14,879 Speaker 3: All right, Diane Swank helping us look at all the 322 00:17:14,920 --> 00:17:18,680 Speaker 3: different pieces of this puzzle. Chief economist at KPMG, thank 323 00:17:18,720 --> 00:17:21,240 Speaker 3: you for joining us here on Balance of Powers. We 324 00:17:21,320 --> 00:17:25,520 Speaker 3: watch from Washington the testimony Jerome Powell gave on Capitol 325 00:17:25,560 --> 00:17:28,840 Speaker 3: Hill earlier today. 326 00:17:29,880 --> 00:17:33,359 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 327 00:17:33,440 --> 00:17:36,879 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 328 00:17:36,920 --> 00:17:40,280 Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen 329 00:17:40,359 --> 00:17:43,480 Speaker 1: on demand wherever you get your podcasts, or watch us 330 00:17:43,520 --> 00:17:45,800 Speaker 1: live on YouTube. 331 00:17:46,080 --> 00:17:47,600 Speaker 2: Good to have you with us here on the Tuesday 332 00:17:47,680 --> 00:17:50,280 Speaker 2: edition of Ballance of Power on Bloombird TV and Radio. 333 00:17:50,840 --> 00:17:54,000 Speaker 2: I am Joe Matthew alongside Kaylee Liones in Washington, where 334 00:17:54,000 --> 00:17:56,879 Speaker 2: Donald Trump today is meeting with the King of Jordan. 335 00:17:56,960 --> 00:17:59,879 Speaker 2: Will keep eyes on what may come from their can 336 00:18:00,000 --> 00:18:03,159 Speaker 2: continued meetings. They already allowed reporters into the Oval office 337 00:18:03,200 --> 00:18:05,520 Speaker 2: for a while. Not too much news, but Jordan has 338 00:18:05,520 --> 00:18:08,800 Speaker 2: agreed to take a couple of thousand sick Palestinian children 339 00:18:09,080 --> 00:18:13,640 Speaker 2: as Donald Trump looks for more help in resettling Palestinian refugees. 340 00:18:14,119 --> 00:18:15,560 Speaker 2: I'll tell you what though, when it comes to the 341 00:18:15,600 --> 00:18:18,359 Speaker 2: executive actions, Kayley, that we've seen from this White House, 342 00:18:18,400 --> 00:18:24,080 Speaker 2: the courts have been very busy. Usaid employees are suing, 343 00:18:24,280 --> 00:18:28,920 Speaker 2: universities are filing over NIH funding cuts, public citizen claims, 344 00:18:29,000 --> 00:18:32,919 Speaker 2: foreign aid freeze, labor unions filing a challenge over the DOGE. 345 00:18:33,160 --> 00:18:36,680 Speaker 2: Just got another ruling here yep. Doge remains temporarily blocked 346 00:18:37,040 --> 00:18:40,879 Speaker 2: from accessing Treasury data. Of course, the hand was in 347 00:18:40,920 --> 00:18:43,840 Speaker 2: the cookie jar pretty early on this one, as the 348 00:18:43,960 --> 00:18:46,640 Speaker 2: payment system is in fact seized by the DOGE. 349 00:18:46,960 --> 00:18:50,400 Speaker 3: Yeah, or a granted access to and a federal judge 350 00:18:50,440 --> 00:18:53,920 Speaker 3: had already earlier this week or over the weekend ruled 351 00:18:53,920 --> 00:18:55,959 Speaker 3: that they cannot have access to that system. Then there 352 00:18:56,080 --> 00:18:57,960 Speaker 3: was concern on the part of the government, the Department 353 00:18:58,000 --> 00:19:00,200 Speaker 3: of Justice counter saying that actually they were cutting off 354 00:19:00,240 --> 00:19:03,320 Speaker 3: Treasury officials' ability to access the system as well. So 355 00:19:03,359 --> 00:19:05,880 Speaker 3: it's a bit of a revision to the restrictions from 356 00:19:05,920 --> 00:19:09,000 Speaker 3: the federal judge leadership at the Treasury is now exempted. 357 00:19:09,280 --> 00:19:12,640 Speaker 3: Dog can still not get in, but obviously that probably 358 00:19:12,880 --> 00:19:15,960 Speaker 3: only does so much to pacify those concerned or to 359 00:19:16,440 --> 00:19:19,600 Speaker 3: alleviate what the administration is saying is the courts acting 360 00:19:19,640 --> 00:19:22,520 Speaker 3: in a way that they should not be exercising authority 361 00:19:22,520 --> 00:19:23,560 Speaker 3: over executive power. 362 00:19:23,960 --> 00:19:26,639 Speaker 2: It's an interesting moment here, as we saw in the 363 00:19:26,640 --> 00:19:30,040 Speaker 2: first Trump administration and now in the second, just testing 364 00:19:30,080 --> 00:19:33,440 Speaker 2: a lot of ideas in the courts as Congress watches along. 365 00:19:33,480 --> 00:19:35,840 Speaker 2: That's where we start our conversation with our signature panel. 366 00:19:35,840 --> 00:19:38,720 Speaker 2: They're back today, Rick Davis, partner at Stone Court Capital, 367 00:19:38,800 --> 00:19:43,800 Speaker 2: Republican strategist and Bloomberg Politics contributor, alongside Democratic analyst Genie Shanzano, 368 00:19:43,840 --> 00:19:48,360 Speaker 2: Bloomberg Politics contributor and political science professor at Iona University. 369 00:19:48,680 --> 00:19:50,920 Speaker 2: What do you think here, Genie? It was a read 370 00:19:51,080 --> 00:19:53,520 Speaker 2: only as we understand it, read only access to the 371 00:19:53,520 --> 00:20:00,359 Speaker 2: Treasury's payment system and personal information that was tied to it. 372 00:20:00,440 --> 00:20:04,040 Speaker 2: Is keeping guardrails up here? Will the courts be the answer, 373 00:20:04,560 --> 00:20:07,960 Speaker 2: the check and the balance to this Trump White House 374 00:20:07,960 --> 00:20:09,000 Speaker 2: of Congress will not be. 375 00:20:10,520 --> 00:20:13,159 Speaker 7: They are trying to be that check. I don't know 376 00:20:13,240 --> 00:20:16,159 Speaker 7: if it will sustain long term, because, of course, we 377 00:20:16,280 --> 00:20:18,879 Speaker 7: have a vice president who just the other day said 378 00:20:19,359 --> 00:20:22,760 Speaker 7: they can rule, and you know, we may not listen 379 00:20:22,800 --> 00:20:25,679 Speaker 7: to those rulings, and that has set off this real 380 00:20:25,840 --> 00:20:30,400 Speaker 7: concern that we will see a constitutional conflict like we've 381 00:20:30,440 --> 00:20:33,600 Speaker 7: never seen between the executive and the judicial branch. But 382 00:20:33,840 --> 00:20:37,439 Speaker 7: the reality is the judge is right about this. The 383 00:20:37,960 --> 00:20:41,040 Speaker 7: when you look at the Treasury, the issues of privacy, 384 00:20:41,280 --> 00:20:46,440 Speaker 7: cyber security, the constitutional issues, the security threats arising from 385 00:20:46,480 --> 00:20:50,440 Speaker 7: what has happened by letting people who have not been 386 00:20:50,520 --> 00:20:55,679 Speaker 7: properly vetted and who are not nonpartisan civil servants have 387 00:20:55,840 --> 00:20:59,600 Speaker 7: access to these systems is incredibly dangerous. Not to mention 388 00:20:59,720 --> 00:21:03,560 Speaker 7: the that it is Congress who the Supreme Court has 389 00:21:03,600 --> 00:21:07,639 Speaker 7: long agreed authorizes the funding, and it is not the 390 00:21:07,760 --> 00:21:11,560 Speaker 7: will of the Treasury or the executive branch to decide 391 00:21:11,760 --> 00:21:14,359 Speaker 7: when they listen and when they don't. That is long 392 00:21:14,440 --> 00:21:18,399 Speaker 7: set an American constitutional law and should not be upended 393 00:21:18,440 --> 00:21:21,320 Speaker 7: by people who have not been elected or anyone else. 394 00:21:21,400 --> 00:21:24,640 Speaker 3: Quite frankly, well so too Genie's point. 395 00:21:24,720 --> 00:21:24,920 Speaker 5: Rick. 396 00:21:25,200 --> 00:21:27,200 Speaker 3: Obviously, we can look at each of these cases in 397 00:21:27,240 --> 00:21:31,520 Speaker 3: the judge's rulings individually, whether it's USA idea or NIH related, 398 00:21:31,560 --> 00:21:35,000 Speaker 3: if it's birthright citizenship, But all of this broadly seems 399 00:21:35,040 --> 00:21:37,919 Speaker 3: to be about a question around the constitution. Do you 400 00:21:38,040 --> 00:21:41,199 Speaker 3: sense that there is a kind of constitutional crisis brewing 401 00:21:41,400 --> 00:21:42,760 Speaker 3: just weeks into this administration. 402 00:21:45,000 --> 00:21:45,359 Speaker 6: No? Not. 403 00:21:45,480 --> 00:21:47,960 Speaker 8: At this point, I'm not exactly sure how much of 404 00:21:48,000 --> 00:21:51,119 Speaker 8: this is constitutional and how much of it's not. I 405 00:21:51,200 --> 00:21:55,480 Speaker 8: am not a constitutional expert, so I'm my own layman's 406 00:21:55,520 --> 00:21:58,200 Speaker 8: point of view is that this is actually a strategy 407 00:21:58,280 --> 00:22:01,600 Speaker 8: that the Trump administration is actually trying to foment, which is, 408 00:22:02,320 --> 00:22:05,200 Speaker 8: let's poke around and see whether or not we can 409 00:22:05,240 --> 00:22:10,879 Speaker 8: extend the power of the executive branch by treading on 410 00:22:10,960 --> 00:22:14,920 Speaker 8: some of the things that have historically been the purview 411 00:22:14,960 --> 00:22:19,760 Speaker 8: of Congress and even in some cases the judicial system, 412 00:22:19,880 --> 00:22:22,000 Speaker 8: and then let the judicial system tell me whether I'm 413 00:22:22,080 --> 00:22:26,040 Speaker 8: right or wrong. And so far that's pretty much how 414 00:22:26,040 --> 00:22:28,800 Speaker 8: it's been played out. As you pointed out, there are 415 00:22:28,840 --> 00:22:34,000 Speaker 8: a lot of lawsuits on the issues that have been 416 00:22:34,040 --> 00:22:38,920 Speaker 8: presented as far as access to and manipulation of agency 417 00:22:38,920 --> 00:22:44,440 Speaker 8: funding for congressionally approved programs, and I think that it's 418 00:22:44,480 --> 00:22:46,959 Speaker 8: going to be a real test for the judicial branch 419 00:22:47,040 --> 00:22:51,160 Speaker 8: to say how much they feel this executive encroachment into 420 00:22:51,200 --> 00:22:56,520 Speaker 8: the congressional authority is allowed. And the greatest, I think 421 00:22:56,640 --> 00:23:00,879 Speaker 8: interesting aspect of all this is the credible lack of 422 00:23:02,119 --> 00:23:07,560 Speaker 8: engagement by Congress. Republicans in Congress seem perfectly happy to 423 00:23:07,600 --> 00:23:12,720 Speaker 8: abdicate their authorities to this executive branch, and I would 424 00:23:13,119 --> 00:23:16,520 Speaker 8: I would caution him only that if Democrats were ever 425 00:23:16,560 --> 00:23:19,359 Speaker 8: elected to the presidency again, they're going to want to 426 00:23:19,440 --> 00:23:21,640 Speaker 8: have that authority and Republicans are going to probably try 427 00:23:21,680 --> 00:23:25,440 Speaker 8: to resist it. So you're you're putting yourselves in an 428 00:23:25,440 --> 00:23:30,120 Speaker 8: interesting position of having to seed this temporarily to this president, 429 00:23:30,160 --> 00:23:32,040 Speaker 8: and you know, no telling who's going to be the 430 00:23:32,080 --> 00:23:33,920 Speaker 8: next president and whether or not you're going to want 431 00:23:33,960 --> 00:23:37,200 Speaker 8: that to happen again. So I think we're creating precedent 432 00:23:37,320 --> 00:23:41,320 Speaker 8: more than breaking constitutional mandates. But I think the courts 433 00:23:41,320 --> 00:23:43,919 Speaker 8: are going to tell us just how far this administration 434 00:23:44,000 --> 00:23:44,320 Speaker 8: can go. 435 00:23:45,440 --> 00:23:48,960 Speaker 2: Well, how about Democrats in Congress? Genie is Hakim Jeffrey's 436 00:23:49,000 --> 00:23:50,800 Speaker 2: the right leader for right now? 437 00:23:52,520 --> 00:23:55,080 Speaker 7: He's the leader we have. You know, Democrats don't have 438 00:23:55,200 --> 00:23:59,000 Speaker 7: a lot of they don't they're not empowered really to 439 00:23:59,160 --> 00:24:03,320 Speaker 7: push back. They are trying to do some of that. 440 00:24:03,760 --> 00:24:06,600 Speaker 7: There is a lot of disagreement in the Democratic Party 441 00:24:06,640 --> 00:24:08,920 Speaker 7: on how best to do that, and I think we're 442 00:24:08,920 --> 00:24:12,600 Speaker 7: going to say see that rather play out, particularly when 443 00:24:12,640 --> 00:24:15,160 Speaker 7: it comes to raising the debt ceiling when it comes 444 00:24:15,160 --> 00:24:19,600 Speaker 7: to the funding for this year. One of the problems 445 00:24:19,720 --> 00:24:24,080 Speaker 7: is is that Democrats have long sought protection in the courts, 446 00:24:24,600 --> 00:24:28,200 Speaker 7: and that is not a viable solution for a political party. 447 00:24:28,280 --> 00:24:30,439 Speaker 7: So they need to win the hearts and minds of 448 00:24:30,480 --> 00:24:34,399 Speaker 7: the voters. These cases that are going up through the 449 00:24:34,440 --> 00:24:36,879 Speaker 7: courts will continue to go up. But I would just 450 00:24:36,960 --> 00:24:40,119 Speaker 7: say that what's changed on the part of the Trump 451 00:24:40,160 --> 00:24:44,479 Speaker 7: administration here is the rhetoric. In the past, they have 452 00:24:45,000 --> 00:24:48,920 Speaker 7: appealed decisions they didn't like, but accepted the rulings. What 453 00:24:48,960 --> 00:24:51,720 Speaker 7: we have heard from jd. Vance, what we have heard 454 00:24:51,720 --> 00:24:54,960 Speaker 7: from Elon Musk, even what the President hinted at, which 455 00:24:54,960 --> 00:24:58,600 Speaker 7: has gotten people very concerned about a constitutional crisis, is 456 00:24:58,640 --> 00:25:02,840 Speaker 7: the idea that judges have stepped over their ease on this. 457 00:25:03,320 --> 00:25:06,320 Speaker 7: They don't have the power to set limits on the 458 00:25:06,359 --> 00:25:10,240 Speaker 7: executive branch, and if they try, we may beating. The 459 00:25:10,240 --> 00:25:14,640 Speaker 7: Trump administration not listen to that that is if it happens, 460 00:25:14,720 --> 00:25:19,159 Speaker 7: a constitutional crisis like we've never seen before in the 461 00:25:19,200 --> 00:25:22,760 Speaker 7: modern era, and that's what's got people concerned. So far, 462 00:25:23,200 --> 00:25:26,639 Speaker 7: they have listened, but when it gets to the final arbiter, 463 00:25:26,760 --> 00:25:29,359 Speaker 7: the Supreme Court, if they choose not to listen because 464 00:25:29,359 --> 00:25:33,160 Speaker 7: they don't like the outcome, that is a constitutional crisis, 465 00:25:33,240 --> 00:25:36,880 Speaker 7: and that is something that you know, in American history, 466 00:25:37,000 --> 00:25:39,520 Speaker 7: would put us in unprecedented times. 467 00:25:41,240 --> 00:25:44,200 Speaker 2: Judy Shanzino and Rick Davis our signature panel. It's great 468 00:25:44,240 --> 00:25:46,040 Speaker 2: to have you both back with us again today on 469 00:25:46,080 --> 00:25:49,840 Speaker 2: Bloomberg TV and Radio. It's Balance of Power, the Tuesday edition. 470 00:25:49,880 --> 00:25:52,919 Speaker 2: I'm Joe Matthew alongside Kaylee Lions in Washington. As we 471 00:25:53,000 --> 00:25:55,080 Speaker 2: turn our attention Kaylee back to the Middle East. The 472 00:25:55,160 --> 00:25:57,439 Speaker 2: King of Jordan at the White House today does not 473 00:25:57,480 --> 00:25:59,560 Speaker 2: agree with Donald Trump on a two state solution. 474 00:26:00,200 --> 00:26:03,360 Speaker 3: Yeah, not willing to buy into the US taking over 475 00:26:03,440 --> 00:26:06,000 Speaker 3: gaza Idea either. We're going to get into that with 476 00:26:06,040 --> 00:26:08,520 Speaker 3: a former ambassador to Jordan, David Hale, is on his 477 00:26:08,600 --> 00:26:11,160 Speaker 3: way in next on Balance of Power on Bloomberg TV 478 00:26:11,440 --> 00:26:12,000 Speaker 3: and Radio. 479 00:26:14,119 --> 00:26:17,600 Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch 480 00:26:17,680 --> 00:26:20,520 Speaker 1: us live weekdays at noon and five pm. E's durn 481 00:26:20,680 --> 00:26:24,080 Speaker 1: on Apple Cocklay and Android Auto with the Bloomberg Business app. 482 00:26:24,119 --> 00:26:27,160 Speaker 1: You can also listen live on Amazon Alexa from our 483 00:26:27,200 --> 00:26:32,040 Speaker 1: flagship New York station, Just Say Alexa play Bloomberg eleven thirty. 484 00:26:33,320 --> 00:26:36,720 Speaker 3: Kaylee Lines alongside Joe Matthew. Here in Washington, where an 485 00:26:36,720 --> 00:26:39,080 Speaker 3: important meeting has taken place today at the White House 486 00:26:39,119 --> 00:26:41,760 Speaker 3: between President Donald Trump and King of Dullah of Jordan, 487 00:26:42,359 --> 00:26:44,400 Speaker 3: with much on the agenda and in fact the two 488 00:26:44,400 --> 00:26:47,280 Speaker 3: sitting down together in the Oval Office and welcoming press 489 00:26:47,320 --> 00:26:50,400 Speaker 3: in despite our previous understanding that there would not be 490 00:26:50,720 --> 00:26:53,040 Speaker 3: a press involved in much of this meeting. No joint 491 00:26:53,040 --> 00:26:55,280 Speaker 3: press conference was scheduled, and still the two of them 492 00:26:55,520 --> 00:26:59,200 Speaker 3: fielded a number of questions from reporters about Donald Trump's 493 00:26:59,240 --> 00:27:02,400 Speaker 3: plans for Gaza, specifically in the role Jordan would play 494 00:27:02,840 --> 00:27:05,320 Speaker 3: in them. Here's a taste of what President Trump said 495 00:27:05,320 --> 00:27:06,000 Speaker 3: about his vision. 496 00:27:06,880 --> 00:27:08,359 Speaker 2: It's not a complex thing to do. 497 00:27:09,119 --> 00:27:11,480 Speaker 9: And with the United States being in control of that 498 00:27:12,400 --> 00:27:15,040 Speaker 9: piece of land, a fairly large piece of land, you 499 00:27:15,080 --> 00:27:17,840 Speaker 9: can have stability in the Middle East for the first time, 500 00:27:18,560 --> 00:27:22,400 Speaker 9: and the Palestine inje or the people that live now 501 00:27:22,400 --> 00:27:25,040 Speaker 9: in Gaza will be living beautifully in another location. 502 00:27:26,640 --> 00:27:29,800 Speaker 2: When asked by reporters if he planned personally to help 503 00:27:29,840 --> 00:27:34,080 Speaker 2: develop portions of Gaza, the President said no, and so 504 00:27:34,119 --> 00:27:36,720 Speaker 2: we're glad to bring you a voice of experience on 505 00:27:36,760 --> 00:27:40,480 Speaker 2: this matter and someone with great experience in the region. 506 00:27:40,600 --> 00:27:43,800 Speaker 2: David Hale is with this global fellow with the Wilson Center, 507 00:27:43,840 --> 00:27:47,240 Speaker 2: former Undersecretary of State for Political Affairs, and most importantly, 508 00:27:47,560 --> 00:27:50,919 Speaker 2: former ambassador to Yes Jordan along with Pakistan and Lebanon. 509 00:27:51,000 --> 00:27:53,240 Speaker 2: Mister ambassador, welcome. It's great to have you with us 510 00:27:53,280 --> 00:27:56,320 Speaker 2: here today on Bloomberg TV and radio. You know the 511 00:27:56,359 --> 00:27:58,639 Speaker 2: stakeholders here, and I wonder before we get to some 512 00:27:58,720 --> 00:28:01,199 Speaker 2: of the substance, what you make of this move to 513 00:28:01,280 --> 00:28:03,639 Speaker 2: bring the press pool into the Oval office for what 514 00:28:03,720 --> 00:28:06,320 Speaker 2: was supposed to be a closed press meeting. It's this 515 00:28:06,400 --> 00:28:07,520 Speaker 2: all part of the pressure play. 516 00:28:08,520 --> 00:28:11,120 Speaker 10: Well, I don't know exactly what was going on. It's 517 00:28:11,160 --> 00:28:13,600 Speaker 10: common and normal to have the press there. So even 518 00:28:13,600 --> 00:28:15,920 Speaker 10: if it wasn't originally planned, I'm sure that the King 519 00:28:16,000 --> 00:28:18,640 Speaker 10: wasn't going to object if the President Trump suggested. 520 00:28:18,200 --> 00:28:18,560 Speaker 6: They do it. 521 00:28:18,600 --> 00:28:20,640 Speaker 2: He didn't look terribly comfortable, no, because it. 522 00:28:20,600 --> 00:28:24,120 Speaker 10: Was a surprise, and you know he speaks English very well, 523 00:28:24,119 --> 00:28:25,760 Speaker 10: but it's not his native language, so he may not 524 00:28:25,800 --> 00:28:27,040 Speaker 10: have been fully prepared for it. 525 00:28:27,080 --> 00:28:28,000 Speaker 2: But the fact of. 526 00:28:28,040 --> 00:28:30,119 Speaker 10: The matter is that the king is one of our 527 00:28:30,160 --> 00:28:32,840 Speaker 10: closest allies, one of our most reliable partners, not just 528 00:28:32,880 --> 00:28:35,960 Speaker 10: in the Middle East but globally, and the conversation that 529 00:28:36,000 --> 00:28:38,880 Speaker 10: they undoubtedly had was potentially quite consequential. 530 00:28:39,360 --> 00:28:42,160 Speaker 3: Well, and the conversation itself could be uncomfortable when you 531 00:28:42,200 --> 00:28:45,520 Speaker 3: consider what ask the President is making here. He wants Jordan, 532 00:28:45,640 --> 00:28:49,600 Speaker 3: together with Egypt, to accept millions of Palestinians into the 533 00:28:49,600 --> 00:28:52,280 Speaker 3: country so that Gaza can be redeveloped. Is there any 534 00:28:52,280 --> 00:28:54,160 Speaker 3: way the President is going to be able to convince 535 00:28:54,160 --> 00:28:56,200 Speaker 3: the King that that is a suitable plan. 536 00:28:56,080 --> 00:28:59,920 Speaker 10: Today, Well, my guess is that the King probably behind 537 00:29:00,000 --> 00:29:02,960 Speaker 10: closed doors, thank to the President for at least demonstrating 538 00:29:03,080 --> 00:29:05,160 Speaker 10: concern for the welfare of the people living in Gaza, 539 00:29:05,160 --> 00:29:07,240 Speaker 10: which a lot of people don't seem to want to express, 540 00:29:07,520 --> 00:29:10,280 Speaker 10: and to try to think about new ideas, because frankly, 541 00:29:10,680 --> 00:29:13,880 Speaker 10: new realities do require creative thinking. Now, this may be 542 00:29:13,880 --> 00:29:18,080 Speaker 10: more creative than people are prepared to swallow, but at 543 00:29:18,160 --> 00:29:20,240 Speaker 10: least it's the beginning of a conversation and I'm sure 544 00:29:21,000 --> 00:29:22,719 Speaker 10: if the King were able to offer ideas of his 545 00:29:22,800 --> 00:29:27,080 Speaker 10: own to compliment what the President is offering, then there's 546 00:29:27,080 --> 00:29:28,240 Speaker 10: a conversation to be had. 547 00:29:28,520 --> 00:29:31,360 Speaker 2: So that's my question for you. They're back behind closed 548 00:29:31,400 --> 00:29:35,000 Speaker 2: doors now, So what extent can King Abdullah bring Donald 549 00:29:35,000 --> 00:29:39,000 Speaker 2: Trump into his fold and talk about the stakes in 550 00:29:39,040 --> 00:29:42,080 Speaker 2: the region and why this may be asking the impossible. 551 00:29:42,400 --> 00:29:44,920 Speaker 10: Well, again, in my experience, a lot of presidents, and 552 00:29:44,960 --> 00:29:48,360 Speaker 10: I don't mean this as criticism, it's understandable, don't necessarily 553 00:29:48,360 --> 00:29:51,320 Speaker 10: know all the details and all the problems that led 554 00:29:51,400 --> 00:29:54,200 Speaker 10: us into these dilemmas that we face like today. So 555 00:29:54,240 --> 00:29:55,960 Speaker 10: that's one task I think for the king is to 556 00:29:56,000 --> 00:29:58,040 Speaker 10: explain the realities on the ground. And for Jordan, there 557 00:29:58,040 --> 00:30:00,880 Speaker 10: are two realities. One is a already have been generous 558 00:30:00,920 --> 00:30:04,200 Speaker 10: since sixty percent of their population is Palestinian origin, and 559 00:30:04,280 --> 00:30:07,160 Speaker 10: there is a Jordanian West East Bank population that is 560 00:30:07,520 --> 00:30:10,720 Speaker 10: rock solid with the king. They are his base, but 561 00:30:10,760 --> 00:30:13,760 Speaker 10: they don't want one more Palestinian, so that's a political reality. 562 00:30:14,120 --> 00:30:18,240 Speaker 10: The second problem is that the whole issue between the 563 00:30:18,240 --> 00:30:21,760 Speaker 10: Palestinians and Israelis is largely now to summarize one of 564 00:30:21,840 --> 00:30:25,480 Speaker 10: land for security, and so the Palestinians are loath to 565 00:30:25,480 --> 00:30:30,640 Speaker 10: give up their land without any kind of guarantees about 566 00:30:31,200 --> 00:30:33,400 Speaker 10: what they keep. It's the land, it's the dispute is 567 00:30:33,440 --> 00:30:35,640 Speaker 10: over the land, and so if the king were to 568 00:30:35,640 --> 00:30:38,200 Speaker 10: come along and cooperate with a proposal that deprived them 569 00:30:38,200 --> 00:30:39,640 Speaker 10: of that, he would be viewed. 570 00:30:39,440 --> 00:30:39,960 Speaker 2: As a trader. 571 00:30:40,440 --> 00:30:43,480 Speaker 3: Well, and the President has suggested that Palestinians wouldn't necessarily 572 00:30:43,560 --> 00:30:45,960 Speaker 3: be welcomed back to Gaza, that they would be in 573 00:30:46,080 --> 00:30:50,600 Speaker 3: nicer conditions in his view elsewhere. He suggested as well 574 00:30:50,800 --> 00:30:52,560 Speaker 3: when he was asked by a reporter that the US 575 00:30:52,640 --> 00:30:54,520 Speaker 3: does have the authority to do this, to just go 576 00:30:54,640 --> 00:30:56,840 Speaker 3: in to Gaza and not buy it, he says, but 577 00:30:57,000 --> 00:31:00,720 Speaker 3: just take it over as its own. What authority is that, master. 578 00:31:01,240 --> 00:31:03,640 Speaker 10: Well, the legal status of Gaza is a little bit 579 00:31:04,160 --> 00:31:08,720 Speaker 10: nebulous anyway. It's not just a matter of law or authority, 580 00:31:08,760 --> 00:31:10,800 Speaker 10: but also what our interests are, and I think our 581 00:31:10,800 --> 00:31:14,400 Speaker 10: interests are to work carefully and wisely with the Israelis, 582 00:31:14,400 --> 00:31:16,440 Speaker 10: the Palestinians, and the Arabs to come up with a 583 00:31:16,480 --> 00:31:20,120 Speaker 10: solution that will improve the welfare of the people living 584 00:31:20,160 --> 00:31:21,960 Speaker 10: in Gaza, but also get us back on a path 585 00:31:22,000 --> 00:31:23,960 Speaker 10: toward finding a durable solution. 586 00:31:24,960 --> 00:31:28,720 Speaker 2: The President indicated in a conversation with reporters last evening 587 00:31:28,800 --> 00:31:32,000 Speaker 2: that he would be open to threatening at least to 588 00:31:32,200 --> 00:31:36,320 Speaker 2: pull some funding from Jordan. I don't know if you'd 589 00:31:36,320 --> 00:31:38,080 Speaker 2: take him at his word there, but what we'll we 590 00:31:38,120 --> 00:31:40,160 Speaker 2: be talking about to what extent does Jordan rely on 591 00:31:40,320 --> 00:31:43,680 Speaker 2: US funding? We certainly know how it relies on military support. 592 00:31:43,920 --> 00:31:44,080 Speaker 6: Right. 593 00:31:44,120 --> 00:31:47,040 Speaker 10: We provide over a billion dollars a year to Jordan, 594 00:31:47,160 --> 00:31:49,280 Speaker 10: so it's quite substantial. But we do it because it's 595 00:31:49,320 --> 00:31:52,440 Speaker 10: in our interest, not necessarily because it's in Jordan's interest 596 00:31:52,680 --> 00:31:55,080 Speaker 10: is of course as well. But we do it because 597 00:31:55,800 --> 00:31:58,160 Speaker 10: the King of Jordan and the Government of Jordan and 598 00:31:58,360 --> 00:32:02,040 Speaker 10: army and intelligence services are solid partners. This is an 599 00:32:02,040 --> 00:32:06,640 Speaker 10: island of moderation on Israel's eastern border, and if we 600 00:32:06,720 --> 00:32:09,240 Speaker 10: risk put in jeopardy that support, it puts in jeopardy 601 00:32:09,280 --> 00:32:11,960 Speaker 10: the stability of the monarchy, and I think that would 602 00:32:11,960 --> 00:32:13,680 Speaker 10: be an extremely dangerous course to take. 603 00:32:14,120 --> 00:32:14,280 Speaker 6: Well. 604 00:32:14,280 --> 00:32:16,320 Speaker 3: And we should remember as well last year when Aron 605 00:32:16,440 --> 00:32:18,920 Speaker 3: sent the barrage of missiles and drones over to Israel. 606 00:32:18,960 --> 00:32:20,720 Speaker 3: It was the US and UK that were helping take 607 00:32:20,760 --> 00:32:24,320 Speaker 3: those down, but Jordan Air Defense Jordanian air defense was 608 00:32:24,360 --> 00:32:26,480 Speaker 3: involved in that too. Obviously, that is just one of 609 00:32:26,480 --> 00:32:28,800 Speaker 3: the players we're talking about here, though there's Egypt as well, 610 00:32:28,800 --> 00:32:30,400 Speaker 3: and King of Dolah said, we need to see the 611 00:32:30,400 --> 00:32:33,160 Speaker 3: Egyptian plan too. Are they on the same page the 612 00:32:33,200 --> 00:32:35,800 Speaker 3: two of them together? Will Egypt be viewing this any differently? 613 00:32:36,440 --> 00:32:39,920 Speaker 10: Well, Jordan will probably seek an Arab consensus for any outcome, 614 00:32:39,960 --> 00:32:42,520 Speaker 10: and obviously it may serve his purposes to hide a 615 00:32:42,520 --> 00:32:45,640 Speaker 10: bit behind the absence of an Arab consensus to support this. 616 00:32:45,720 --> 00:32:49,640 Speaker 10: It's the Saudis will really matter, and they've already rejected 617 00:32:49,640 --> 00:32:51,800 Speaker 10: this proposal. But you know, you touched on a very 618 00:32:51,800 --> 00:32:54,360 Speaker 10: important point, which is that Jordan is an ally of 619 00:32:54,360 --> 00:32:57,120 Speaker 10: ours in dealing with the Iranian problem, and so a 620 00:32:57,160 --> 00:33:00,400 Speaker 10: lot of this is frankly a distraction from the real issue, 621 00:33:00,440 --> 00:33:03,760 Speaker 10: which should be strategically, how do we do something that 622 00:33:03,840 --> 00:33:08,040 Speaker 10: permanently puts around the reversal of fortune that Duran has suffered. 623 00:33:08,400 --> 00:33:10,960 Speaker 10: How do we make that permanent? And Jordan has a 624 00:33:10,960 --> 00:33:12,720 Speaker 10: big role to play and a lot of at stake 625 00:33:12,760 --> 00:33:15,560 Speaker 10: in that, and so I hope they're also discussing some 626 00:33:15,640 --> 00:33:16,040 Speaker 10: of those. 627 00:33:15,920 --> 00:33:19,680 Speaker 2: Issues, Ambassador. This is all further complicated by Donald Trump's 628 00:33:19,680 --> 00:33:22,440 Speaker 2: threat for all hell to break out again starting at 629 00:33:22,440 --> 00:33:26,880 Speaker 2: noontime Saturday in Gaza if hostages are not released. He 630 00:33:26,920 --> 00:33:29,840 Speaker 2: indicated just now he doesn't expect them to be released 631 00:33:30,760 --> 00:33:33,320 Speaker 2: to the extent that you know, King Abdullah, what does 632 00:33:33,320 --> 00:33:35,920 Speaker 2: he make of talk like that and what might Gaza 633 00:33:35,960 --> 00:33:37,360 Speaker 2: look like at noon on Saturday. 634 00:33:38,240 --> 00:33:41,440 Speaker 10: Well, my interpretation is just as voud as anyone else's. 635 00:33:41,480 --> 00:33:44,640 Speaker 10: But was that the President was speaking about his expectations 636 00:33:44,640 --> 00:33:47,560 Speaker 10: of reality, not necessarily that he was threatening that or 637 00:33:47,600 --> 00:33:48,239 Speaker 10: he wanted that. 638 00:33:48,360 --> 00:33:50,760 Speaker 2: But that would mean the ceasefire agreement is out the window. 639 00:33:51,520 --> 00:33:53,600 Speaker 10: That he believes that if they don't provide, if we 640 00:33:53,640 --> 00:33:55,800 Speaker 10: don't finish phase one, there won't be a phase two, Yes, 641 00:33:55,840 --> 00:33:57,320 Speaker 10: and if there's no phase two, there will be a 642 00:33:57,320 --> 00:33:59,320 Speaker 10: resumption of the war. So that's a statement of fact. 643 00:34:00,240 --> 00:34:03,080 Speaker 10: King of Bella also understands those facts. So we should 644 00:34:03,080 --> 00:34:06,280 Speaker 10: be doing what we can to sustain the ceasefire process. 645 00:34:06,960 --> 00:34:09,480 Speaker 10: The problem there is that Phase two of the ceasefire 646 00:34:09,520 --> 00:34:13,640 Speaker 10: calls for the withdrawal of the idea fully from Gaza, 647 00:34:14,000 --> 00:34:16,520 Speaker 10: and yet there's been nothing done to prepare for what 648 00:34:16,600 --> 00:34:19,120 Speaker 10: replaces that, Who or what will be providing security in 649 00:34:19,160 --> 00:34:20,960 Speaker 10: that context. So the Israelis are not going to pull 650 00:34:20,960 --> 00:34:23,319 Speaker 10: out if they don't have a reliable partner on the 651 00:34:23,320 --> 00:34:26,200 Speaker 10: other side of the fence, which is not Hamas and 652 00:34:26,239 --> 00:34:28,799 Speaker 10: not the Palestinian authority. The Arabs have said, well, we 653 00:34:28,840 --> 00:34:31,799 Speaker 10: can do it, but only if that Nyahoo commits to 654 00:34:31,840 --> 00:34:34,799 Speaker 10: a two state solution for the Palestinians. And there's no 655 00:34:34,800 --> 00:34:37,960 Speaker 10: consensus in Israel for something like that. So Phase two 656 00:34:38,040 --> 00:34:41,160 Speaker 10: is in serious jeopardy, not because of what President Trump said, 657 00:34:41,200 --> 00:34:43,239 Speaker 10: but because of the realities of these differences. 658 00:34:43,520 --> 00:34:44,920 Speaker 3: So even if you don't see a break in the 659 00:34:44,920 --> 00:34:48,440 Speaker 3: ceasefire on Saturday, when this forty two day period is expired, 660 00:34:48,520 --> 00:34:50,880 Speaker 3: you don't see a likelihood that it's extended beyond that. 661 00:34:50,960 --> 00:34:52,600 Speaker 3: If Phase two is the requirement for that. 662 00:34:52,880 --> 00:34:56,000 Speaker 10: I think it's very fragile and very unlikely to happen 663 00:34:56,000 --> 00:34:58,879 Speaker 10: in my opinion. I hope I'm wrong, but it would 664 00:34:58,920 --> 00:35:02,040 Speaker 10: require certain the changes to the agreement or compromises on 665 00:35:02,080 --> 00:35:05,600 Speaker 10: the part of Israel that in the current psychological climate 666 00:35:05,640 --> 00:35:07,240 Speaker 10: I think are extremely unlikely to happen. 667 00:35:07,560 --> 00:35:09,080 Speaker 2: I want to ask you about a story that broke 668 00:35:09,120 --> 00:35:11,560 Speaker 2: a short time before you joined us here. The Kremlin 669 00:35:11,560 --> 00:35:15,840 Speaker 2: has freed Mark Fogel, a man who has your former job. 670 00:35:16,040 --> 00:35:19,360 Speaker 2: Actually Steve Whitkoff put him on his private plane. Is 671 00:35:19,480 --> 00:35:22,160 Speaker 2: they are apparently on their way back outside of Russian airspace, 672 00:35:22,200 --> 00:35:24,560 Speaker 2: so we can now talk about this. Mike Waltz made 673 00:35:24,560 --> 00:35:27,880 Speaker 2: this clear. This is the first time that a senior 674 00:35:27,960 --> 00:35:31,080 Speaker 2: US official has touched down like this in Moscow since 675 00:35:31,400 --> 00:35:34,319 Speaker 2: the former CIA director Burns touchdown to try to head 676 00:35:34,360 --> 00:35:37,239 Speaker 2: off a war in Ukraine. To what extent does this 677 00:35:37,320 --> 00:35:40,560 Speaker 2: development help to pave the road for a deal over Ukraine? 678 00:35:40,760 --> 00:35:42,480 Speaker 10: Well, he was my predecessor, but I didn't have a 679 00:35:42,520 --> 00:35:46,440 Speaker 10: private plane to bring into the equation. Look, my experience 680 00:35:46,440 --> 00:35:49,799 Speaker 10: with President Trump and his first administration was he cares 681 00:35:49,840 --> 00:35:53,240 Speaker 10: passionately about the fate of American citizens for being detained 682 00:35:53,520 --> 00:35:58,239 Speaker 10: unlawfully overseas by governments or terrorist groups. So I think 683 00:35:58,280 --> 00:36:00,840 Speaker 10: this is a plus. What we don't know, of course, 684 00:36:01,120 --> 00:36:04,680 Speaker 10: is what the conversation was and what if any trade 685 00:36:04,760 --> 00:36:08,080 Speaker 10: was made in exchange for the release of this man. 686 00:36:08,200 --> 00:36:10,279 Speaker 10: We just we don't know that, but undoubtedly it'll become 687 00:36:10,280 --> 00:36:10,919 Speaker 10: a parent soon. 688 00:36:11,280 --> 00:36:13,200 Speaker 3: Well, what does it say that the Middle East envoy 689 00:36:13,320 --> 00:36:14,920 Speaker 3: is the one who was sent to Russia to do this. 690 00:36:15,200 --> 00:36:18,279 Speaker 10: Yeah, I don't know how to make what to make 691 00:36:18,320 --> 00:36:20,040 Speaker 10: of that, except that I also believe he's a close 692 00:36:20,080 --> 00:36:22,520 Speaker 10: president friend of the president, so it may be on 693 00:36:22,560 --> 00:36:24,960 Speaker 10: a personal basis that they all felt that he had 694 00:36:25,920 --> 00:36:27,080 Speaker 10: what it took to get the deal done. 695 00:36:27,320 --> 00:36:30,319 Speaker 2: Does it give you hope on the relationship or at 696 00:36:30,400 --> 00:36:32,879 Speaker 2: least the ability to negotiate with Moscow? When you hear 697 00:36:33,440 --> 00:36:36,600 Speaker 2: a development like this, usually this doesn't happen in a vacuum. 698 00:36:36,640 --> 00:36:39,440 Speaker 10: That's right, and so in that sense it's positive. But 699 00:36:39,520 --> 00:36:42,160 Speaker 10: we don't know what it is that Putin got in return, 700 00:36:42,760 --> 00:36:44,680 Speaker 10: so I would want to know that before I've made 701 00:36:44,719 --> 00:36:45,600 Speaker 10: any further judgment. 702 00:36:46,120 --> 00:36:49,200 Speaker 3: Well, and we also have to consider the relationship that 703 00:36:49,520 --> 00:36:51,960 Speaker 3: these conflicts have with one another. We're talking about the 704 00:36:51,960 --> 00:36:55,160 Speaker 3: war in Ukraine and Russia, which obviously has ties to Iran. 705 00:36:55,239 --> 00:36:57,480 Speaker 3: China is involved in this as well, as often described 706 00:36:57,520 --> 00:36:59,680 Speaker 3: to us on this program as a new axis of 707 00:36:59,719 --> 00:37:01,880 Speaker 3: ev Well, how do these puzzle pieces fit together in 708 00:37:01,880 --> 00:37:03,960 Speaker 3: your mind? If Russia is going to the negotiating table 709 00:37:04,320 --> 00:37:07,760 Speaker 3: on Ukraine, does it have implications for the behavior of Iran? 710 00:37:07,840 --> 00:37:09,680 Speaker 3: For what role does China play in this? 711 00:37:09,719 --> 00:37:10,320 Speaker 7: For example? 712 00:37:10,440 --> 00:37:14,440 Speaker 10: Yeah, I mean everyone's watching everyone and Iran has developed 713 00:37:14,440 --> 00:37:17,320 Speaker 10: an alliance at least of convenience with Russia and China, 714 00:37:17,440 --> 00:37:20,440 Speaker 10: so that's a factor as well. But I think Russia 715 00:37:20,480 --> 00:37:22,279 Speaker 10: is definitely on the defensive in the Middle East with 716 00:37:22,320 --> 00:37:24,799 Speaker 10: the collapse of their ally in Syria, So I'm not 717 00:37:24,840 --> 00:37:28,040 Speaker 10: sure that has any immediate implications. But for the United States, 718 00:37:28,880 --> 00:37:31,440 Speaker 10: what we do in one theater of operations and one 719 00:37:31,440 --> 00:37:34,880 Speaker 10: set of problems that definitely influences attitudes towards us in 720 00:37:34,960 --> 00:37:37,480 Speaker 10: coping with other problems. So the idea that we're going 721 00:37:37,520 --> 00:37:42,360 Speaker 10: to assert strength, you know, peace through strength actually works, 722 00:37:42,640 --> 00:37:45,200 Speaker 10: and that is I think a foundation of Trump's approach. 723 00:37:45,400 --> 00:37:47,000 Speaker 3: What about the idea that we could just go in 724 00:37:47,040 --> 00:37:49,280 Speaker 3: and take over Gaza. What might that signal to China 725 00:37:49,400 --> 00:37:50,160 Speaker 3: about Taiwan. 726 00:37:52,040 --> 00:37:52,800 Speaker 2: It's a good question. 727 00:37:53,480 --> 00:37:55,600 Speaker 10: I don't have an answer to it, but I accept 728 00:37:55,640 --> 00:37:57,160 Speaker 10: that I don't really believe it's going to happen. 729 00:37:58,800 --> 00:38:00,640 Speaker 2: Well, I'll tell you what, when you start to pull 730 00:38:00,640 --> 00:38:03,600 Speaker 2: out the lens here and look what's happening in the region. 731 00:38:04,120 --> 00:38:06,719 Speaker 2: We recall a visit by Benjaminett, yeah who to the 732 00:38:06,719 --> 00:38:09,520 Speaker 2: White House last week, and people were musing openly here 733 00:38:09,560 --> 00:38:13,120 Speaker 2: in Washington about a preemptive attack against Iran. That that 734 00:38:13,280 --> 00:38:15,479 Speaker 2: is what Beebe was trying to talk to Donald Trump 735 00:38:15,520 --> 00:38:21,000 Speaker 2: about Iran on its heels go after the nuclear facilities. Now, 736 00:38:21,680 --> 00:38:24,120 Speaker 2: is that something in the realm of possibility for you 737 00:38:24,280 --> 00:38:27,680 Speaker 2: or is that talk at a cocktail party in Washington? 738 00:38:27,880 --> 00:38:28,000 Speaker 9: Oh? 739 00:38:28,000 --> 00:38:30,160 Speaker 10: I think it's very much in the realm of the possible. 740 00:38:30,360 --> 00:38:33,600 Speaker 10: And it was a theme for many conversations between President 741 00:38:33,680 --> 00:38:36,920 Speaker 10: Obama when I was Middle East Envoy and Prime Schmid 742 00:38:37,000 --> 00:38:40,360 Speaker 10: you know who he was in office then, and that 743 00:38:40,480 --> 00:38:42,520 Speaker 10: was part of the incentive and motivation for us to 744 00:38:42,560 --> 00:38:45,720 Speaker 10: get the nuclear deal that was flawed deeply, but something 745 00:38:45,760 --> 00:38:47,840 Speaker 10: that we got. So I'm sure it was discussed, and 746 00:38:47,880 --> 00:38:49,879 Speaker 10: I'm sure King Bell is very interested in knowing what 747 00:38:50,080 --> 00:38:50,680 Speaker 10: exactly is. 748 00:38:50,880 --> 00:38:53,239 Speaker 2: You think that's something that they're discussing today as well. 749 00:38:53,280 --> 00:38:55,360 Speaker 10: I hope so, and the King will be very happy 750 00:38:55,360 --> 00:38:57,279 Speaker 10: if we're going to keep the pressure on Iran, but 751 00:38:57,320 --> 00:38:59,359 Speaker 10: we want to know how and to be ready for it. 752 00:38:59,600 --> 00:39:02,480 Speaker 10: The fact is Roun his air defenses I think are 753 00:39:02,520 --> 00:39:07,080 Speaker 10: apparently gone, and so this is a good time to 754 00:39:07,080 --> 00:39:09,960 Speaker 10: think about how we can really eliminate this threat. 755 00:39:10,440 --> 00:39:12,600 Speaker 3: All right, Ambassador, thank you so much for joining us 756 00:39:12,600 --> 00:39:15,759 Speaker 3: here in our studios. In Washington, DC. David Hale, as 757 00:39:15,760 --> 00:39:18,440 Speaker 3: we mentioned, former ambassador to Jordan as well as Pakistan 758 00:39:18,480 --> 00:39:21,360 Speaker 3: and Lebanon, now Global fellow with the Wilson Center. 759 00:39:25,920 --> 00:39:29,120 Speaker 2: Thanks for listening to the Balance of Power podcast. Make 760 00:39:29,160 --> 00:39:32,120 Speaker 2: sure to subscribe if you haven't already, at Apple, Spotify, 761 00:39:32,200 --> 00:39:34,799 Speaker 2: or wherever you get your podcasts, and you can find 762 00:39:34,840 --> 00:39:38,080 Speaker 2: us live every weekday from Washington, DC at noontime Eastern 763 00:39:38,400 --> 00:39:39,800 Speaker 2: at Bloomberg dot com.