WEBVTT - Bloomberg Surveillance TV: June 28 2024 0:00:02.440 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.400 Terminal and the Bloomberg Business app. Let Me Cantrell with 0:00:37.440 --> 0:00:39.920 Pimco joins us around the table, Libby, how does the 0:00:39.960 --> 0:00:41.760 President of the United States come back from that? 0:00:43.159 --> 0:00:43.479 Well? 0:00:43.920 --> 0:00:45.919 That is the I think the question for a lot 0:00:45.960 --> 0:00:50.280 of democratic strategies and for the White House. You know, Interestingly, John, 0:00:51.280 --> 0:00:53.720 you know, even though I think we all saw the 0:00:53.720 --> 0:00:57.680 same debate and you know, arguably the president really did 0:00:57.720 --> 0:01:01.920 not meet the very low expectations that were established for 0:01:02.000 --> 0:01:05.480 him by President Trump. You know, the the you know, 0:01:05.520 --> 0:01:08.520 the Biden campaign is acknowledging that he you know, as 0:01:08.640 --> 0:01:11.160 as Vice President Kamala Harris said, he had a slow start, 0:01:11.600 --> 0:01:12.800 but he finished strong. 0:01:13.240 --> 0:01:14.200 This is one debate. 0:01:14.319 --> 0:01:18.119 There will be another opportunity for another debate on September tenth. 0:01:18.240 --> 0:01:21.640 I doubt that debate happens at this point, honestly, So 0:01:21.760 --> 0:01:24.200 I think that they are, you know, they are at 0:01:24.280 --> 0:01:28.560 least indicating that this is, you know, this is going 0:01:28.600 --> 0:01:31.000 according to plan, and I do you know, I just 0:01:31.000 --> 0:01:33.560 think from a process perspective, it's really important to keep 0:01:33.600 --> 0:01:38.080 in mind here that there is no you know, party 0:01:38.160 --> 0:01:41.160 elder in the back room smoking a cigar deciding who 0:01:41.160 --> 0:01:43.240 the next Democratic nominee is going to be. 0:01:43.760 --> 0:01:45.000 This is Joe Biden. 0:01:45.080 --> 0:01:49.280 Joe Biden will be the nominee unless he steps down. 0:01:49.440 --> 0:01:53.600 Unless he decides, really in the next two weeks or so, 0:01:54.000 --> 0:01:56.120 that he is no longer going to run. That has 0:01:56.160 --> 0:01:59.000 to be his decision. That is nobody else's decision. That 0:01:59.040 --> 0:02:01.080 is not the donor's decision, it is not the Democratic 0:02:01.080 --> 0:02:03.640 strategy decision. That has to be Joe Biden's decision. And 0:02:03.640 --> 0:02:06.680 then even then there is no consensus candidate. So the 0:02:07.000 --> 0:02:09.680 thing that the Democrats risk here is that they don't 0:02:10.120 --> 0:02:13.239 if Joe Biden does decide not to run, that there 0:02:13.240 --> 0:02:16.800 could just be chaos, and that then undermines their whole 0:02:16.800 --> 0:02:19.200 pitch to the American people that they are the Party 0:02:19.280 --> 0:02:23.240 of stability, but it was very objectively an incredibly bad 0:02:23.320 --> 0:02:24.000 night for the president. 0:02:24.080 --> 0:02:26.079 You've indicated to us repeatedly that a lot of the 0:02:26.160 --> 0:02:28.200 questions you get asked is about who is going to 0:02:28.520 --> 0:02:31.400 ultimately be the candidate for the Democrats, And the words 0:02:31.400 --> 0:02:34.120 that you hear repeatedly from clients is not Joe Biden. 0:02:34.160 --> 0:02:36.480 You hear things like Michelle Obama, even Jamie Dimond. I 0:02:36.480 --> 0:02:37.960 think you shared with us a number of months ago. 0:02:38.160 --> 0:02:41.000 What do those conversations sound like now, particularly yesterday evening. 0:02:41.200 --> 0:02:43.160 Yeah, well, I would say that our traders had lots 0:02:43.160 --> 0:02:45.880 of ideas, had lots of views last night, and we're 0:02:45.880 --> 0:02:50.240 sharing with them with me, you know, in a very 0:02:50.280 --> 0:02:54.000 generous way that you know. I think that that, of course, 0:02:54.240 --> 0:02:57.840 is that narrative John is going to probably is going 0:02:57.840 --> 0:03:00.400 to reach a fevered pitch if it hasn't already. I 0:03:00.440 --> 0:03:03.160 just think people have to really understand though, that there 0:03:03.240 --> 0:03:06.799 is a process here that the Democratic Party has established 0:03:06.840 --> 0:03:09.120 and they have put their thumb on the scale. Joe 0:03:09.120 --> 0:03:12.600 Biden is going to be their nominee again unless the 0:03:12.600 --> 0:03:14.760 President of the United States takes it not this can 0:03:14.880 --> 0:03:16.480 only be his decision. 0:03:16.520 --> 0:03:17.839 I just can't reinforce that enough. 0:03:17.919 --> 0:03:18.800 So yes, I do. 0:03:18.880 --> 0:03:21.600 I think that the narratives around Michelle Obama and Jamie 0:03:21.639 --> 0:03:26.440 Diamond are going to just accelerate, for sure, But I 0:03:26.440 --> 0:03:29.639 don't think that changes the reality that this is likely 0:03:29.720 --> 0:03:32.160 what this is, and if it's not going to be, 0:03:32.240 --> 0:03:34.720 the decision has to be made really within the next. 0:03:34.480 --> 0:03:35.000 Week or so. 0:03:35.560 --> 0:03:37.640 Libby, you broke up the fact that Biden camp is 0:03:37.640 --> 0:03:40.600 saying he finished strong. Arguably he didn't. He didn't even 0:03:40.760 --> 0:03:42.920 end with a real pitch. The American people didn't bring 0:03:43.000 --> 0:03:44.800 up abortion. It's supposed to be all this money they're 0:03:44.840 --> 0:03:46.520 going to spend on trying to get out the vote. 0:03:47.040 --> 0:03:49.360 At the same time, I'm sure your phone was blowing 0:03:49.440 --> 0:03:53.520 up like mine with Democrats saying this is an unmitigated disaster. 0:03:54.040 --> 0:03:57.520 Do you see a schism now between Democrats and the 0:03:57.520 --> 0:03:58.680 White House and the campaign? 0:03:59.400 --> 0:04:02.080 Well, I do think that the down ballot Democrats, and 0:04:02.240 --> 0:04:04.440 you know we've talked about this before that, of course, 0:04:04.480 --> 0:04:08.320 the Democrats are much more vulnerable in the US Senate. 0:04:08.400 --> 0:04:10.720 They only control the Senate by one vote. Right now, 0:04:11.200 --> 0:04:13.600 twenty three of the thirty four seats are being defended 0:04:13.600 --> 0:04:16.200 by Democrats. Of those twenty three eight are vulnerable. So 0:04:16.279 --> 0:04:19.320 for those folks and Marie who are in these vulnerable 0:04:19.400 --> 0:04:21.960 races in the Senate and then also in the House, 0:04:22.000 --> 0:04:24.640 of course, I think that the Democrats are hoping that 0:04:24.680 --> 0:04:26.920 they can flip the House. There is a lot of 0:04:26.960 --> 0:04:30.600 concern that even though the polling shows that those Democrats 0:04:30.640 --> 0:04:34.440 are actually outperforming Biden by a pretty significant margin, that 0:04:34.520 --> 0:04:38.040 Biden's performance last night will just you know, continue to 0:04:39.080 --> 0:04:42.200 weigh not only on him but on their candidacy. 0:04:42.279 --> 0:04:43.160 But again, I. 0:04:43.080 --> 0:04:46.960 Just think this is the reality here is this is 0:04:47.040 --> 0:04:49.360 very difficult to change at this late in the game. 0:04:49.520 --> 0:04:53.000 This was not some sort of again just going to 0:04:53.040 --> 0:04:55.800 the conspiracy theories, This was not some plan by the 0:04:55.839 --> 0:04:59.159 Democrats to show Joe Biden's weakness and then to try 0:04:59.200 --> 0:05:01.919 to change the taicket. This is I think this was 0:05:01.920 --> 0:05:05.640 a mistake. This was sort of a political miscalculation. They 0:05:05.680 --> 0:05:08.000 really were, as you said earlier, they were really trying 0:05:08.040 --> 0:05:10.640 to reset the race. They wanted this, They set the 0:05:10.720 --> 0:05:12.760 terms for the debate. They were hoping that this would 0:05:12.800 --> 0:05:13.800 be able to recalibrate. 0:05:14.279 --> 0:05:14.640 And it's not. 0:05:14.880 --> 0:05:16.320 I think from a market's perspective. 0:05:16.560 --> 0:05:18.839 Let's see what happens I mean, there was some discussion 0:05:18.880 --> 0:05:22.560 about terroriffs yesterday, there was some sort of brief discussion 0:05:22.800 --> 0:05:27.240 about deficits. I didn't hear anything about that either candidate 0:05:27.360 --> 0:05:29.200 is going to be there's going to be any fiscal 0:05:29.200 --> 0:05:32.120 consolidation right there. They did not talk about deficit reduction. 0:05:32.680 --> 0:05:35.560 Only thing they did talk about was reinforcing the importance 0:05:35.600 --> 0:05:38.720 of Medicare and Social Security and not touching those entitlement programs. 0:05:38.760 --> 0:05:40.640 And as we know, that's a big source of the deficit. So, 0:05:40.960 --> 0:05:43.520 you know, maybe the market starts pricing in some of 0:05:43.560 --> 0:05:45.720 the terror risks that they've been sort of ignoring at 0:05:45.720 --> 0:05:48.400 this point. Maybe, you know, yields, you know, maybe the 0:05:48.440 --> 0:05:51.680 yield curve starts normalizing a little bit with this sort 0:05:51.680 --> 0:05:53.440 of the expectation that we're going to see, you know, 0:05:53.480 --> 0:05:54.240 even more spending. 0:05:54.320 --> 0:05:56.440 Yeah, yields are up a couple of basis points four 0:05:56.440 --> 0:05:59.040 point two eight percent yesterday on the ten year today. 0:05:58.800 --> 0:05:59.839 It's four point three percent. 0:06:00.080 --> 0:06:03.400 Whoo big fear, especially compared to what's going on in 0:06:03.440 --> 0:06:04.480 French bond markets. 0:06:04.640 --> 0:06:06.480 We talk a lot about Biden this morning. We didn't 0:06:06.480 --> 0:06:08.159 talk about Trump. We didn't talk. 0:06:08.040 --> 0:06:10.680 About the fact that it was really the focus on Biden, 0:06:10.720 --> 0:06:14.120 but it wasn't though Trump really representing the stellar performance. 0:06:14.440 --> 0:06:17.719 I am wondering about what this does to embolden him 0:06:17.760 --> 0:06:20.760 with respect to his choices for vice president, whether he 0:06:20.839 --> 0:06:23.440 leans more to a populist rather than a centrist, whether 0:06:23.480 --> 0:06:26.560 he feels like he has more of a mandate to 0:06:26.960 --> 0:06:29.840 cater more to the fringes in a way because there 0:06:29.880 --> 0:06:31.400 is a sort of a vacuum on. 0:06:31.360 --> 0:06:32.360 The other side of the ticket. 0:06:32.960 --> 0:06:35.880 Yeah, I think it's a great point. If Joe Biden 0:06:36.279 --> 0:06:38.960 did not meet the very low expectations that were established 0:06:39.000 --> 0:06:43.080 for him, and I think arguably President Trump did outperform expectations. 0:06:43.160 --> 0:06:47.080 He was more disciplined than certainly he was in those 0:06:47.120 --> 0:06:51.160 first debates in twenty twenty. He was more moderated. I 0:06:51.200 --> 0:06:53.600 actually think the format probably helped him, the fact that 0:06:53.600 --> 0:06:55.880 the mics were being muted. But I do think your 0:06:55.920 --> 0:07:00.280 point about vice president this is it puts his aper 0:07:00.320 --> 0:07:03.640 focus now because you know, folks are now, because of 0:07:03.680 --> 0:07:06.200 concerns around Biden's age, are going to make this much 0:07:06.240 --> 0:07:09.120 more of a referendum on the vice president than even 0:07:09.160 --> 0:07:12.160 it was before. And as a result, who Trump's vice 0:07:12.200 --> 0:07:14.560 president is going to be, it's probably even more important 0:07:14.600 --> 0:07:17.160 as well, because that debate that is likely to happen 0:07:17.240 --> 0:07:20.480 either an end of July or August is going to 0:07:20.520 --> 0:07:24.240 be you know again, more important. So so I do 0:07:24.360 --> 0:07:26.120 think that this is, you know, this is this was 0:07:26.120 --> 0:07:28.720 a win for for President Trump. As we all know, 0:07:28.960 --> 0:07:33.160 debates are more performed performative. They're more about performance than 0:07:33.160 --> 0:07:35.600 they are about style. And I think on style, you know, 0:07:36.520 --> 0:07:38.920 he you know, he definitely he won. 0:07:39.120 --> 0:07:39.440 All right. 0:07:39.480 --> 0:07:42.440 So you also said that the fiscal is coming into focus, 0:07:42.640 --> 0:07:44.360 and I want to get a sense from you, given 0:07:44.400 --> 0:07:46.520 what we didn't here yesterday, which is any discussion about 0:07:46.520 --> 0:07:49.840 taming this, how long can the United States remain, as 0:07:50.040 --> 0:07:53.800 John has mentioned many many times before, in this place 0:07:53.800 --> 0:07:56.640 of being able to have the privilege of acting recklessly. 0:07:56.720 --> 0:07:59.200 How long before the US starts to feel the same 0:07:59.240 --> 0:08:03.320 pressure of France does Yeah, And I think that is. 0:08:03.680 --> 0:08:05.000 The big question for sure. 0:08:05.360 --> 0:08:08.120 Again, you know what we've talked about this many times 0:08:08.240 --> 0:08:10.800 that you know, you can't replace something with nothing. And 0:08:10.840 --> 0:08:13.160 the fact that the US is the reserve currency, the 0:08:13.160 --> 0:08:16.040 fact that the treasury is the reserve asset of the world, 0:08:16.120 --> 0:08:19.920 the fact that central banks still hold treasuries, that the 0:08:19.920 --> 0:08:22.480 fact that they still have this flight to quality characteristics. 0:08:22.600 --> 0:08:24.160 I mean, all of this just sort of speaks to 0:08:24.160 --> 0:08:26.720 the fact that this privilege is still extended to the 0:08:26.840 --> 0:08:29.720 United States. And what we do expect, though, what we're 0:08:29.760 --> 0:08:33.200 telling our clients is that while we're not expecting the 0:08:33.200 --> 0:08:37.120 bond vigilanties necessarily to come back and to sort of enforce, 0:08:38.120 --> 0:08:41.559 you know, spending restraints on Washington anytime soon, we would 0:08:41.559 --> 0:08:43.960 expect that there would be some term premium that would 0:08:44.000 --> 0:08:45.840 increase at the long end of the curve. Right so, 0:08:45.920 --> 0:08:48.360 right now, the curve has been flat inverted for the 0:08:48.440 --> 0:08:51.600 last two years. You haven't, as an investor, been getting 0:08:51.640 --> 0:08:54.240 that premium to hold longer. 0:08:54.000 --> 0:08:55.920 Dated paper with deficits. 0:08:55.920 --> 0:08:57.560 And I think this is interesting. This didn't really come 0:08:57.600 --> 0:09:01.760 up last night, but the CBO last we upgraded their 0:09:01.800 --> 0:09:05.040 deficit projections for the United States and that they're numbers 0:09:05.040 --> 0:09:08.440 that are just really, you know, pretty surprising. They're six percent, 0:09:08.520 --> 0:09:11.480 seven percent, eight percent. You add back the cost of 0:09:11.520 --> 0:09:14.320 the Trump task cuts should the if and when they 0:09:14.360 --> 0:09:17.520 get extended, and then you're talking about eight percent deficits. 0:09:17.920 --> 0:09:20.480 And yet the markets don't really move. So we are 0:09:20.600 --> 0:09:23.600 expecting this to the markets to sort of internalize this 0:09:23.720 --> 0:09:26.440 at some point and be reflected again and increasing term 0:09:26.440 --> 0:09:28.400 premu at the long end of the curve. But in 0:09:28.480 --> 0:09:31.240 terms of the reserve currency status, the reserve assets status, 0:09:31.280 --> 0:09:33.480 that does not seem like it's going away, because as 0:09:33.520 --> 0:09:36.040 we've been mentioning, I mean, look at the other developed countries, 0:09:36.080 --> 0:09:38.520 look at the alternatives, right, you know, as we've talked 0:09:38.559 --> 0:09:41.360 about a lot Bill Gross's you know, you know assertion 0:09:41.480 --> 0:09:45.200 about the cleanest dirty shirt, the US is the cleanest 0:09:45.200 --> 0:09:47.840 dirty shirt. It's not clean, but it's a lot less 0:09:47.880 --> 0:09:49.760 dirty than a lot of the other alternatives. 0:09:49.920 --> 0:09:52.240 The best thing about treasuries this morning than not French bumps. 0:09:52.440 --> 0:09:55.080 I mean, that's kind of it, right. But what Lebby said, well, 0:09:55.160 --> 0:09:57.319 Libby said, I think is absolutely vine. So Deutsche Band 0:09:57.320 --> 0:09:59.120 could talk to about this as well. The extent to 0:09:59.160 --> 0:10:01.920 which is going to go on to pursue a very 0:10:01.960 --> 0:10:05.360 aggressive protectionist trade policy is something you have to take 0:10:05.679 --> 0:10:08.760 much more seriously this morning, based after what we saw 0:10:08.840 --> 0:10:09.320 last night. 0:10:09.559 --> 0:10:12.680 Even an independent government agency, as Libby was talking about, 0:10:12.840 --> 0:10:14.640 is ringing the alarm bells and saying that we're going 0:10:14.640 --> 0:10:16.679 to see deficits unlike what we have ever seen in 0:10:16.720 --> 0:10:20.040 our history. That is akin to more of an emerging market, 0:10:20.280 --> 0:10:22.640 and nobody's really noticing it, saying we'll be able to 0:10:22.720 --> 0:10:23.280 work it out. 0:10:23.440 --> 0:10:24.600 When do they start to notice? 0:10:24.760 --> 0:10:26.440 Lebby, thank you, it's good to see you. Thank you. 0:10:26.559 --> 0:10:36.360 A focus on the process, let me Cantrell of Pinco. 0:10:38.000 --> 0:10:40.280 The former World Bank president David Malpas writ in this 0:10:40.360 --> 0:10:43.000 in the Wall Street Journal, Mister Biden has blamed everything 0:10:43.160 --> 0:10:47.640 except the actual cause, expensive regulations and massive government spending. 0:10:47.760 --> 0:10:51.000 Donald Trump's approach to inflation should be he returned to 0:10:51.080 --> 0:10:54.160 office is likely to be different. Let markets produce more 0:10:54.240 --> 0:10:56.960 so that growth goes up and prices go down. David 0:10:57.040 --> 0:10:59.000 joins us now for more, David wonder for to get 0:10:59.000 --> 0:11:01.160 your perspective on the program. So I'm sure you've read 0:11:01.160 --> 0:11:03.200 the piece, the letter that came from the sixteen Nobel 0:11:03.240 --> 0:11:06.640 laureates earlier in the week warning about the risk associated 0:11:06.679 --> 0:11:09.600 with a Trump presidency and how it would reignite inflation. 0:11:09.840 --> 0:11:11.440 What would you say back to that this morning? 0:11:13.520 --> 0:11:16.680 That Trump was pretty clear on how you could get 0:11:16.760 --> 0:11:19.400 more growth and that's going to have a big impact 0:11:19.559 --> 0:11:22.760 on whether you have inflation. I think you know, I 0:11:22.800 --> 0:11:27.920 don't want to say PhD economists are off base, but 0:11:28.440 --> 0:11:31.800 the group really has a model that hasn't been working. 0:11:32.120 --> 0:11:34.760 Think of all the huge mistakes that have been made 0:11:34.800 --> 0:11:39.080 on inflation forecasts in the past. So what we know 0:11:40.040 --> 0:11:45.000 is that Trump articulated this plan where you have more energy, 0:11:45.480 --> 0:11:50.040 that holds down prices, that allows interest rate cuts, and 0:11:50.160 --> 0:11:53.400 you have more growth within the economy. He was really 0:11:53.440 --> 0:11:56.800 clear on how do you get jobs for minorities, you 0:11:57.280 --> 0:12:00.200 cut off illegal immigration, and you have more growth than 0:12:00.240 --> 0:12:03.920 the economy. I was surprised by the contrast with Biden, 0:12:04.120 --> 0:12:07.240 who was talking it seemed like almost as a senator 0:12:07.559 --> 0:12:11.480 talking about pell grants, talking about first time home buyer credits, 0:12:11.960 --> 0:12:14.960 the small things that aren't really getting to the core 0:12:15.040 --> 0:12:18.120 of the affordability crisis that we're in right now. 0:12:18.280 --> 0:12:20.800 David, let's just go through some of the policies extending 0:12:20.840 --> 0:12:25.080 the twenty seventeen tax cuts, potentially implementing a flat tariff. 0:12:25.320 --> 0:12:27.520 You've heard those same economists talk about why that would 0:12:27.600 --> 0:12:30.000 lead to higher inflation on those two specific issues, why 0:12:30.040 --> 0:12:32.160 wouldn't they contribute to higher prices. 0:12:33.559 --> 0:12:36.120 Yeah, I think if you raise taxes, you're going to 0:12:36.160 --> 0:12:40.559 get less production, and that actually will be inflationary. And 0:12:41.120 --> 0:12:46.320 Biden is proposing big tax increases and that's factored into 0:12:46.320 --> 0:12:49.400 the growth forecasts that CBO put out. You know, the 0:12:49.520 --> 0:12:53.720 deficit forecasts that they're projecting under Biden are dependent on 0:12:54.080 --> 0:12:57.000 the idea that the economy will stay slow growing into 0:12:57.080 --> 0:13:01.120 the future. Trump is really going the opposite way and saying, no, 0:13:01.280 --> 0:13:04.800 that's not the economy that we want. We want a 0:13:04.840 --> 0:13:08.559 better economy that would generate more tax revenues and also 0:13:08.679 --> 0:13:10.160 more prosperity for people. 0:13:10.520 --> 0:13:12.520 David, this is something that we've just discussed before, and 0:13:12.520 --> 0:13:15.600 it's a controversial point, the idea that you can grow 0:13:15.640 --> 0:13:18.360 your way into the deficit by cutting taxes versus having 0:13:18.360 --> 0:13:20.600 to raise revenues. I don't want to have that debate 0:13:20.720 --> 0:13:22.560 right now. I do want to talk about the idea 0:13:22.559 --> 0:13:24.839 of tariffs and what that does going forward, which is 0:13:24.880 --> 0:13:27.959 something that Donald Trump could unilaterally do. Do you believe 0:13:28.160 --> 0:13:31.360 in your core that if the former president does become 0:13:31.400 --> 0:13:34.840 elected and does engage with pretty significant tariffs across the board, 0:13:34.840 --> 0:13:37.760 which you can do unilaterally, that if the market sells off, 0:13:37.840 --> 0:13:38.800 h would reverse course. 0:13:41.559 --> 0:13:45.200 We've seen Biden continue the tariffs that were on China, 0:13:46.000 --> 0:13:48.600 and the market is able to digest a whole lot 0:13:48.640 --> 0:13:50.440 of things, as it's doing this morning. 0:13:50.720 --> 0:13:51.360 So I think the. 0:13:51.840 --> 0:13:56.360 Market adjusts to the policies, and the overall question is 0:13:56.360 --> 0:13:58.480 is the US going to be a strong player on 0:13:58.520 --> 0:14:02.880 the international scene. Trump talked to I thought very effectively 0:14:02.960 --> 0:14:07.120 last night about Afghanistan and the disaster that that created, 0:14:07.200 --> 0:14:09.920 and it's spilling over to all the other world situations. 0:14:10.160 --> 0:14:13.480 So you can create a better world by having an 0:14:13.480 --> 0:14:17.200 actual plan that's based on production. And so you're saying, 0:14:17.240 --> 0:14:20.480 what about tariffs, Well, there's a whole there's a whole plan, 0:14:20.840 --> 0:14:24.480 or excuse me, there are lots of things that can 0:14:24.520 --> 0:14:27.280 be done in the US to really allow this strong 0:14:27.360 --> 0:14:28.640 economy to move forward. 0:14:28.680 --> 0:14:30.760 Well, but David, just to sort of pick up on 0:14:30.840 --> 0:14:33.120 the tariff point and what I was getting at, there 0:14:33.160 --> 0:14:36.360 is a belief in markets that potentially the former president 0:14:36.400 --> 0:14:39.560 would reverse course on tariffs that were highly negative for 0:14:39.720 --> 0:14:41.160 the market. A lot of people have come on the 0:14:41.200 --> 0:14:43.240 show and said a lot of the tariffs that have 0:14:43.240 --> 0:14:46.840 been proposed would increase inflation in this country and would 0:14:46.880 --> 0:14:50.040 actually create a real negative situation for a number of companies. 0:14:50.680 --> 0:14:52.880 Do you believe that if the market does sell off, 0:14:53.080 --> 0:14:55.480 that will provide a check to the former president and 0:14:55.480 --> 0:14:56.560 the hue reverse course. 0:14:57.080 --> 0:15:02.080 Huh, Well, that's a real hypothet. So really, I think 0:15:02.400 --> 0:15:05.000 what we have to do is over the next five months, 0:15:05.200 --> 0:15:08.560 survive and then see how do you resolve some of 0:15:08.560 --> 0:15:13.680 the wars and how meaning resolve them quickly and allow 0:15:13.960 --> 0:15:17.760 energy production to start. And then as you look at tariffs, 0:15:18.240 --> 0:15:21.040 I think there needs to be a real rethink of 0:15:21.360 --> 0:15:24.080 how do we interact with China, who has been this 0:15:24.280 --> 0:15:30.960 giant overproducer or very successful industrial producer that takes away 0:15:31.040 --> 0:15:33.320 jobs from rest of the world. There needs to be 0:15:33.360 --> 0:15:36.880 a world discussion of that. You're seeing the politics in Europe. 0:15:37.120 --> 0:15:39.960 You were just referring to it of people in Europe 0:15:40.080 --> 0:15:45.880 realizing that this cost on climate is really hurting their competitiveness. 0:15:46.000 --> 0:15:49.160 So Germany's economy is in deep trouble in part because 0:15:49.280 --> 0:15:52.720 energy costs are so high, So that drives people to 0:15:53.040 --> 0:15:57.040 other answers to try to deal with and interact with 0:15:57.160 --> 0:16:00.000 China into the future. I think that'll be an important 0:16:00.080 --> 0:16:02.200 part of a new administration. 0:16:02.720 --> 0:16:05.000 David, Let's go where you almost went though. What is 0:16:05.040 --> 0:16:07.720 the plan on tariffs? Are these just talking points right 0:16:07.760 --> 0:16:09.960 now or is this a plan? If we were to 0:16:09.960 --> 0:16:12.400 get Trump to be president again, that is going to 0:16:12.440 --> 0:16:15.600 be ten percent tarifful for all imported goods and fifty 0:16:15.640 --> 0:16:17.720 plus on Chinese imported goods. 0:16:20.080 --> 0:16:21.920 You have to have a room with people in it, 0:16:21.960 --> 0:16:24.160 with lawyers in it, with how do you what is 0:16:24.200 --> 0:16:28.280 the legislative process with it? So I think there will 0:16:28.320 --> 0:16:33.200 be a very detailed discussion of how do we protect 0:16:33.720 --> 0:16:37.560 or excuse me, how do we have sectors in the 0:16:37.720 --> 0:16:41.000 US that are able to stand up to subsidize production 0:16:41.400 --> 0:16:44.680 from abroad. And that's a valid discussion to have, should 0:16:44.680 --> 0:16:48.200 have been happening already and needs to be done more deeply. 0:16:48.880 --> 0:16:52.400 We had on Miyamaguinness today from the Committee for Our 0:16:52.600 --> 0:16:55.600 Responsible Federal Budget. I'm sure you know her well, and 0:16:55.880 --> 0:16:58.400 they put out some numbers this week about how President 0:16:58.520 --> 0:17:01.360 Trump approved eight point four trillion dollars of new tenure 0:17:01.400 --> 0:17:04.280 barring during his full term and Biden during his first 0:17:04.280 --> 0:17:07.000 three years and five months approved four point three trillion 0:17:07.000 --> 0:17:09.840 of new ten yure barring. Do you honestly think either 0:17:09.880 --> 0:17:12.760 of these individuals are not going to add a substantial 0:17:12.800 --> 0:17:13.800 amount of money. 0:17:13.720 --> 0:17:14.480 To the deficit. 0:17:16.800 --> 0:17:21.200 To the deficit, so let's talk about debt and deficit. 0:17:21.440 --> 0:17:24.399 If you have a faster growing economy, you won't have 0:17:24.440 --> 0:17:27.200 as big a deficit, as Biden is projected to have. 0:17:27.520 --> 0:17:31.320 CBO is operating from the economic plan that's in place now, 0:17:31.520 --> 0:17:33.760 which is one where and you heard it all last 0:17:33.840 --> 0:17:36.960 night in great detail. The government is going to be 0:17:37.040 --> 0:17:39.840 the solution for each thing. And interest rates are going 0:17:39.880 --> 0:17:42.720 to stay high for a long time because of the inflation. 0:17:43.040 --> 0:17:45.360 So if you project that out, you're going to get 0:17:45.480 --> 0:17:48.520 huge deficits into the future, which is what shows up 0:17:48.520 --> 0:17:51.879 in the CBO forecast. If you redo the forecast based 0:17:51.880 --> 0:17:55.600 on a growth program, you don't get those deficits now. 0:17:56.480 --> 0:17:59.680 I think there also has to be very strong restraint 0:17:59.760 --> 0:18:04.280 on spending. Washington is spending like crazy, and it's out 0:18:04.320 --> 0:18:08.360 into the future. It's every month, it's trillions of dollars 0:18:08.400 --> 0:18:11.560 going out the door. President Trump talked about the Paris 0:18:11.600 --> 0:18:16.040 Agreement costing one trillion dollars. I think he's understating it. 0:18:16.040 --> 0:18:19.000 It's worse than that. So on the energy front alone, 0:18:19.520 --> 0:18:24.760 that's the The subsidies and credits that are being put 0:18:24.800 --> 0:18:28.400 out on that side are super expensive. Some of that 0:18:28.520 --> 0:18:32.800 can be saved still, and the market will react positively 0:18:33.119 --> 0:18:36.600 if you say anything that causes them to think you're 0:18:36.600 --> 0:18:39.080 going to have some restraint. Right now, they're operating on 0:18:39.160 --> 0:18:42.520 the idea of no restraint and that keeps interest rights high. 0:18:42.880 --> 0:18:44.720 David, you're close to the campaign. It's all quite on 0:18:44.760 --> 0:18:46.960 the VP front. Who should we be focused on? 0:18:47.040 --> 0:18:47.480 Do you think? 0:18:49.160 --> 0:18:52.879 No, I don't have a you know, that's up to 0:18:52.960 --> 0:18:55.560 President Trump, and I think what you saw last night 0:18:55.640 --> 0:18:57.720 is somebody that's going to make a lot of decisions 0:18:57.960 --> 0:19:01.280 on things. He landed a lot of blows, and one 0:19:01.320 --> 0:19:05.439 of them was that Biden hasn't fired anyone. You know, 0:19:05.920 --> 0:19:10.040 this is a really important part of management and of governing, 0:19:10.320 --> 0:19:14.040 of choosing people, and Trump will have the chance to 0:19:14.080 --> 0:19:17.520 have really strong people in across the board, and I 0:19:17.520 --> 0:19:21.320 think that can really help. There just hasn't been enough 0:19:21.359 --> 0:19:25.600 strength within the US administration. That's that's operating now, and 0:19:25.640 --> 0:19:29.199 you see it in every policy meeting that that I 0:19:29.359 --> 0:19:33.480 was in. You see it in the results that came 0:19:33.520 --> 0:19:36.520 out of those programs. It's not working and so we 0:19:36.560 --> 0:19:37.199 need change. 0:19:37.440 --> 0:19:39.760 David scrat a catch ups as always, and I will 0:19:39.760 --> 0:19:42.040 continue this conversation over the next four months or so. 0:19:42.320 --> 0:19:53.479 David Malpass, the former Will Bank president, joining us now 0:19:53.520 --> 0:19:56.720 to continue this conversation. And police are Saize Mohammed Aaron 0:19:56.760 --> 0:19:59.720 of Queen's College, Cambridge Mohamed, Let's talk about the fatality 0:19:59.720 --> 0:20:00.000 of the day. 0:20:00.200 --> 0:20:01.440 I'm going to sound like a FED official. 0:20:01.800 --> 0:20:03.719 When you look at the totality of the data, are 0:20:03.760 --> 0:20:06.479 you seeing concrete signs of the economic slow down, a 0:20:06.520 --> 0:20:09.240 loss of momentum? And do you think a conversation about 0:20:09.240 --> 0:20:12.080 reducing interest rates as soon as next month is warranted? 0:20:13.440 --> 0:20:13.640 Yes? 0:20:13.720 --> 0:20:16.240 And yes, John, So if you look at the data 0:20:16.280 --> 0:20:19.879