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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch Just Live weekdays at

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Speaker 1: noon Eastern on Appocarplay, and then roud Otto with the

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Speaker 1: Bloomberg Business app. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: We just heard from President Biden describing what he said

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Speaker 2: the hatred of the Holocaust brought back to life on

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Speaker 2: October seventh when he said that Hamas unleashed terror on Israel,

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Speaker 2: going on to describe what he called a quote ferocious

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Speaker 2: surge of anti semitism around the world in the aftermath,

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Speaker 2: saying too many people have been denying, downplaying, or rationalizing

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Speaker 2: the horrors of the Holocaust, and October seventh, saying that's

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Speaker 2: despicable and it must stop. He also touched on the

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Speaker 2: right to free speech and peaceful protest, but he said

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Speaker 2: there is no place on any campus or any place

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Speaker 2: in America for hate speech or violence of any kind,

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Speaker 2: whether against Jews or anyone else. He also said in

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Speaker 2: this speech that he is calling on all Americans to

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Speaker 2: stand united against anti Semitism and hate in all of

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Speaker 2: its forms. We want to get reaction now to this

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Speaker 2: speech on Bloomberg Television and Radio from Terry Haynes. He

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Speaker 2: is the founder of Pangaea Policy and is with me now, So, Terry,

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Speaker 2: I'm sure you are just hearing the words of the president. Obviously,

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Speaker 2: this speech comes in a very tenuous political time for him,

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Speaker 2: as he has been facing blame for what we're seeing

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Speaker 2: happening on college campuses across the country, a lot of

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Speaker 2: backlash in regard to his support and policy toward Israel.

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Speaker 2: Did he do what he needed to do with this speech.

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Speaker 3: Today, Well, I think he didn't hurt himself by the speech.

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Speaker 3: A couple of things. Firstly, it's a fine and necessary

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Speaker 3: thing for the president to do. In that sense, it's

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Speaker 3: a very good thing, and as a citizen I applauded

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Speaker 3: number one. Number two is somebody that knew Tom landis

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Speaker 3: a little bit as an old congressional staff hand. I'm

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Speaker 3: very glad to hear his name and his example raised

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Speaker 3: up and discussed. I think the you know what the

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Speaker 3: president needs to do is more than that. Though. Those

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Speaker 3: are fine words, and I have no doubt that they

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Speaker 3: are sincerely meant and sincerely delivered. At the same time,

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Speaker 3: what you have in the President's government is the lack

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Speaker 3: of really two things. One is, and this goes back

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Speaker 3: to you know, before the current difficulties of the past

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Speaker 3: six months or even the last week, You've got two problems.

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Speaker 3: One is that the President needs to clearly state and

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Speaker 3: work to persuade people of what the foreign policy of

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Speaker 3: the United States is. This is really the first time

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Speaker 3: in about eighty years, ever since the Second World War,

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Speaker 3: that a unified view of foreign policy has been challenged,

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Speaker 3: and it's one reason why it took six months to

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Speaker 3: get aid for Ukraine, aid for Israel, aid for the

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Speaker 3: Indo Pacific. The second thing you need to see is

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Speaker 3: clear execution of that foreign policy. What we're getting in

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Speaker 3: the current Middle East situation, I'm sorry to say, is

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Speaker 3: a lot of muddle. And the suspicion is right from

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Speaker 3: even among allies that what's happening is that the United

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Speaker 3: States domestic politics are making it difficult for the United

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Speaker 3: States to respond strong, forcefully, and consistently. And the President

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Speaker 3: needs to use a lot of that sentiment that he

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Speaker 3: just expressed in order to write that ship. I think.

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Speaker 2: Well, and I wonder how much of the ability to

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Speaker 2: write this ship is predicated on a temporary ceasefire goeriment

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Speaker 2: being reached Terry not only helping it navigate the situation

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Speaker 2: geopolitically in regard to what's happening in the Middle East,

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Speaker 2: but also at home in terms of pacifying some of

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Speaker 2: those who have been protesting against this warrant against this administration.

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Speaker 3: My two cents is that you deal with the situation first,

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Speaker 3: straight up, as is, and then you apply the politics

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Speaker 3: to the situation. Other than applying the politics first and

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Speaker 3: then dealing with the substance later. You've got an awful

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Speaker 3: lot of concerning loose ends out there, in my estimation,

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Speaker 3: loose ends about the degree to which the United States

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Speaker 3: knew about what is now known as a Hamas counter offer,

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Speaker 3: not an agreement, who knew about it, when they knew

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Speaker 3: about it, and whether the United States was trying to

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Speaker 3: pressure Israel into it when Israel had made it clear

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Speaker 3: previously supposedly that they would not agree with those terms.

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Speaker 3: You know, there's a publicly it looks like what's happening

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Speaker 3: is that the United States is trying to buffalo Israel

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Speaker 3: a little bit through armed shipments, through rhetoric, and a

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Speaker 3: bunch of other things. This is a pretty good time

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Speaker 3: whatever else for the United States and Israel strong allies

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Speaker 3: to get back on the back on the same foot together,

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Speaker 3: and hopefully we see evidence of that in the next days.

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Speaker 2: Well, of course Biden is still at this event, Terry.

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Speaker 2: He is actually sitted seated right next to the Speaker

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Speaker 2: of the House, Mike Johnson. In the House has passed

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Speaker 2: some anti semitism legislation just last week regarding the definition

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Speaker 2: of anti semitism, a broadening of it is specifically as

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Speaker 2: it's applied by the Department of Education. Raised a lot

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Speaker 2: of concerns about free speech. Should we expect that that

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Speaker 2: legislative effort or any others to combat and anti semitism

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Speaker 2: can actually make it through both chambers, knowing it's unclear

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Speaker 2: at this time what the Senate's going to do with

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Speaker 2: that particular piece of legislation.

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Speaker 3: Oh, I expect it will. It's it's difficult to you know,

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Speaker 3: from looking at it from a politician's perspective, it's difficult

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Speaker 3: to argue that what you shouldn't do is is expressed

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Speaker 3: as strongly as possible. You know your your opposition to

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Speaker 3: anti semitism in all its forms. At the same time,

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Speaker 3: you know the President's quite right to say that the

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Speaker 3: government response by itself as much, you know, won't do

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Speaker 3: the job. And you know is I'm I'm not Jewish,

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Speaker 3: but I know will believe that. You know, governmental statements

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Speaker 3: are well and good and fine, but that's not the

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Speaker 3: sole solution and won't by itself fix the problem. But

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Speaker 3: you have a situation here where you know the government

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Speaker 3: will do things certainly, but at the same time, you know,

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Speaker 3: the more pressing question is not just anti semitism at home,

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Speaker 3: but it's also what the administration does abroad. And my

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Speaker 3: assessment is the United States needs to be a lot

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Speaker 3: clearer about what they expect, how they expect it, and

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Speaker 3: why they expect it in the Middle East, and also

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Speaker 3: at the same time do things that help the broader

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Speaker 3: peace process that involves Saudi and Jordan and a bunch

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Speaker 3: of other nations along. That's a difficult balancing act. I

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Speaker 3: don't say it because it's easy, but that's the task

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Speaker 3: before the administration.

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Speaker 2: Well, and we'll see if they ultimately are able to

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Speaker 2: complete that task in its entirety. Terry, there is a

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Speaker 2: separate piece of breaking news I do want to get

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Speaker 2: your take on as well. We just got from two

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Speaker 2: TikTok a filed petition in federal court suing the US

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Speaker 2: government as expected over that divest or ban bill that

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Speaker 2: was passed as part of the Supplemental Package by both

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Speaker 2: chambers of Congress and signed into law by President Biden.

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Speaker 2: TikTok says it is seeking to overturn what it calls

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Speaker 2: a quote constitutional TikTok ban. They say a standalone US

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Speaker 2: platform would not be commercially viable and that a qualified

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Speaker 2: divestiture is not possible.

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Speaker 4: Terry, how do you see all of this going down?

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Speaker 2: TikTok, pointing out here the law would force a shutdown

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Speaker 2: of the app by January nineteenth of twenty twenty five.

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Speaker 4: Is this going to be legally resolved by then?

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Speaker 3: You know, I think it probably by January of twenty

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Speaker 3: twenty five. I think it's more more likely than not

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Speaker 3: that it's not completely resolved. They will, you know, they'll

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Speaker 3: they'll use all their legal tools, including appeals to the

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Speaker 3: Supreme Court and the like to do that. And we're based,

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Speaker 3: so we're basically talking about less than nine months in

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Speaker 3: order to achieve that. So, you know, I doubt that

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Speaker 3: that happens in the end. The other thing, I'll say

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Speaker 3: about this is from a perspective as an old communications

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Speaker 3: lawyer and a telecom advisor in both Congress and at

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Speaker 3: the FCC, where I was a presidential appointee once upon

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Speaker 3: a time that you know, I don't find TikTok's views

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Speaker 3: here persuasive at all. First Amendment rights fundamentally are those

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Speaker 3: expressed and held and used by citizens. There are limited

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Speaker 3: First Amendment rights for corporations.

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Speaker 5: And the like.

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Speaker 3: But you know, the net of this is that nobody's

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Speaker 3: speech rights are are being affected negatively in any way.

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Speaker 3: If TikTok goes away, they you know, just liked in India,

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Speaker 3: they'll migrate to other apps, and you know you'll be.

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Speaker 6: Done with it.

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Speaker 3: But the core of this issue here isn't speech at all.

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Speaker 3: It's national security. And you know, TikTok and the Chinese

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Speaker 3: government beyond it probably don't want a situation where the

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Speaker 3: United States government starts talking about exactly how TikTok uses

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Speaker 3: its app. And you know, even if it's done behind

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Speaker 3: closed doors, the least that will happen is that TikTok

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Speaker 3: itself and the Chinese government will be somewhat embarrassed by that.

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Speaker 3: So it may well be that what happens is you

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Speaker 3: say you have a teeth gnashing today in a legal sense,

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Speaker 3: but in the end they divest or they shut down.

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Speaker 2: Well, and of course a divestiture, to your allusion to

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Speaker 2: the Chinese government terry would need to be signed off

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Speaker 2: on by China, and I wonder if that really is

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Speaker 2: the rub here, is if the CCP is going to

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Speaker 2: be signing off on this or not.

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Speaker 3: Yeah, well they you know, I think they'll probably push

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Speaker 3: as hard as they can to the contrary, not only

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Speaker 3: because you know, they want to continue the operations that

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Speaker 3: they're using the app for in the United States, but

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Speaker 3: they want to do so in other countries as well,

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Speaker 3: So you know, yeah, they'll try to push back on

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Speaker 3: that as much as possible. But you know, just like

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Speaker 3: in the in the United States, you can't have foreign entities,

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Speaker 3: you know, even owning broadcasts channels, foreign governments and the like.

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Speaker 3: You know, the United States government also is not going

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Speaker 3: to stand for situations where data scraped and used for

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Speaker 3: whatever purposes by a foreign government that's thought of as

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Speaker 3: best as a competitor and worst as somewhat less than

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Speaker 3: openly hostile. So what you have is a situation where

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Speaker 3: where the Chinese government is, is you know, much more

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Speaker 3: between a rock and a hard place than I think

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Speaker 3: the United States government is. Frankly all right.

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Speaker 2: Terry Haynes, founder of PINAGEA Policy, thank you so much

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Speaker 2: for joining not just on this news from the lawsuit

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Speaker 2: from TikTok, but also of course after President Biden delivered

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Speaker 2: his remarks on anti Semitism from Capital Hill.

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

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

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Speaker 1: Ronaldo with them Bloomberg Business Ad. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just Say Alexa Play Bloomberg. Eleven thirty.

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Speaker 2: We're awaiting the latest from Capitol Hill after the second

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Speaker 2: meeting in as many days between the Speaker of the

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Speaker 2: House Mike Johnson and Congressman Marjorie Taylor Green of Georgia,

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Speaker 2: who of course has threatened to act on her motion

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Speaker 2: to vacate the speaker as soon as this week. Before

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Speaker 2: the meeting that was scheduled for twelve thirty pm today,

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Speaker 2: she said she's clear in what her demands to Mike

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Speaker 2: Johnson are. She would like to see the Hastart rule followed,

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Speaker 2: which means a majority of the majority must support any bill.

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Speaker 2: She wants no more funding for Ukraine, to defund the

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Speaker 2: special counsels who are looking in to former President Donald Trump,

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Speaker 2: and avoid a shutdown before the election by passing ACR

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Speaker 2: to automatically enact a one percent spending cut. The question

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Speaker 2: is what leverage does the congresswoman have over the speaker?

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Speaker 2: Is he likely to agree to any of this, especially

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Speaker 2: when Democrats have said that they will act to table

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Speaker 2: emotion to vacate if indeed it is brought forward. So

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Speaker 2: we want to get reaction to all of this now

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Speaker 2: from inside the Republican Conference, I'm pleased to say joining

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Speaker 2: me here on Bloomberg Television and Radio live from Capitol

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Speaker 2: Hill is Congressman Byron Donald's, the Republican from Florida. Congressman,

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Speaker 2: welcome back to Bloomberg. It's great as always to have you.

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Speaker 2: What is your understanding as to what could go down

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Speaker 2: in your chamber in regard to this motion to vacate

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Speaker 2: in the coming days.

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Speaker 7: Well, I think what's likely is that the emotion will

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Speaker 7: be tabled by large amounts of the Republican Conference and

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Speaker 7: from what we're hearing members of the Democrat conference. Look

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Speaker 7: at the end of the day, there have been questions

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Speaker 7: from many Conservatives about a lot of the bills that

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Speaker 7: have passed on the House floor, where a majority of

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Speaker 7: Democrats who have been voting for those measures. But I

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Speaker 7: believe that right now going through a battle for the

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Speaker 7: speakership is not in the best centries of the Republican

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Speaker 7: Conference or in Congress overall. I think at the end

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Speaker 7: of the day, it's gonna get tabled and then we're

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Speaker 7: gonna move on. We're gonna move on to the appropriations

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Speaker 7: process for the next fiscal year.

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Speaker 2: Congressman, is this so much about Democrats being willing to

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Speaker 2: protect the House speaker, which may be the thing that

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Speaker 2: keeps him with the gabble in hand, or about the

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Speaker 2: support from former President Donald Trump to what extent does

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Speaker 2: he influence the outcome here?

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Speaker 7: I think President Trump has made his views known that

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Speaker 7: he doesn't want to see the House go through this

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Speaker 7: motion of vacate process right now. So I think right

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Speaker 7: now you have a lot of people up here on

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Speaker 7: both sides of the aisle who just want to basically

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Speaker 7: get to the election season and let the American people

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Speaker 7: have their voices heard about which way they want Washington

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Speaker 7: to go. Do we want to continue to go down

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Speaker 7: the line of the crazy agenda of Joe Biden and

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Speaker 7: the Democrats that's led to massive open borders, massive inflation

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Speaker 7: on the or of World War III? Or do we

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Speaker 7: want to go back to Trump era policies which actually

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Speaker 7: improved wages in our country, kept inflation low, led to

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Speaker 7: a more peaceful planet across the board, and actually secured

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Speaker 7: our nation. And so that's what that's the conversation I

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Speaker 7: think every member on Capitol Hill wants to have. I

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Speaker 7: think we're probably going to get to that. We're definitely

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Speaker 7: going to get to it. I think the motion of

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Speaker 7: VAKA is probably going to get tabled in the process.

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Speaker 2: Well, Congressman, you just mentioned there the border, which of

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Speaker 2: course is something that your conference has focused immensely on

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Speaker 2: in passed HR two, though with no Democratic support, never

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Speaker 2: got the chance to vote on that bipartisan border deal

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Speaker 2: that was reached between Senate negotiators and the White House.

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Speaker 2: President Biden has though expressed interest in doing something on

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Speaker 2: the border legislatively, trying perhaps that effort again. Do you

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Speaker 2: expect you will have a chance to vote on something

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Speaker 2: else before the election.

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Speaker 7: No, no, I don't, because what Joe Biden wants to

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Speaker 7: do is play politics with the issue of securing our nation.

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Speaker 7: Even the bill that was in the Senate, that was

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Speaker 7: pure politics. The Senate didn't even bring it up for

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Speaker 7: a vote. That's how toxic that bill was. And so

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Speaker 7: the reality is is that what Joe Biden wants to

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Speaker 7: do is give a fig leaf, give a patina to

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Speaker 7: the American people right before the election, to demonstrate that

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Speaker 7: he cares about securing the border. The truth is he

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Speaker 7: does not. He never has because if he cared about

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Speaker 7: border security, he would have worked with Republicans at any

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Speaker 7: point over the last eighteen months, he has refused to

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Speaker 7: do that, and over the course of his entire presidency,

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Speaker 7: we've now seen anywhere from eight to ten million illegal

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Speaker 7: immigrants come into the United States. So he doesn't care

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Speaker 7: about the border. He uses it for his own political gain,

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Speaker 7: and now he wants to do something right before the

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Speaker 7: election because his poll numbers suck because he's been worse

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Speaker 7: at his job.

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Speaker 2: Well, of course, he had been working with one Republican

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Speaker 2: at lease, Senator James Langford, who helped negotiate that bipartisan

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Speaker 2: border deal. But moving on, Congressman, there is another issue

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Speaker 2: with which the president has been grappling. In fact, he's

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Speaker 2: on Capitol Hill today. I understand you are there at

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Speaker 2: his remarks, but he did give an address on anti semitism,

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Speaker 2: talking about how there is a freedom to free speech

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Speaker 2: in this country, not though room for hate speech or

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Speaker 2: violence on college campuses. Given what we are seeing across

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Speaker 2: the country, including schools like GW where I know you yourself

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Speaker 2: visited here in Washington, what else would you like to

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Speaker 2: see be done to address this issue?

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Speaker 4: Is the speech itself.

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Speaker 7: Enough No, the president's speech is not enough. It's nine

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Speaker 7: or ten days too late. Well, why are we surprised?

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Speaker 7: Joe Biden is no leader. He's late to every crisis

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Speaker 7: that faces our country, including the rise of anti semitism

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Speaker 7: from the radical democratic left. So no, the speech is

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Speaker 7: simply not enough. What we should be talking about right

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Speaker 7: now is the fact that you have students whose civil

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Speaker 7: rights have been violated. So these schools which do not

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Speaker 7: take campus securities seriously, we should be invoking Title six

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Speaker 7: of the nineteen sixty four Civil Rights Acts, and we

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Speaker 7: should be defunding these institutions if they're not going to

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Speaker 7: protect the civil rights of students. It's that simple. And

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Speaker 7: this goes back very clearly if you go back to

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Speaker 7: the Civil Rights era. The reason why Title six was

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Speaker 7: put into the Civil Rights Acts is because you have

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Speaker 7: black students whose civil rights were not being protected on

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Speaker 7: college campuses. So if it was good enough, then it

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Speaker 7: should be good enough.

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Speaker 6: Now.

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Speaker 2: Well, Congressman, when we think more widely about what many

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Speaker 2: of these protests have emanated from, Obviously it is the

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Speaker 2: ongoing conflict between Israel and Hamas and Gaza, where we

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Speaker 2: have seen tens of thousands of Palestinian lives lost. There

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Speaker 2: are questions now as to whether or not Israel will

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Speaker 2: be moving forward with a further ground invasion into Rafa,

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Speaker 2: potentially resulting in more loss of civilian life. Would you

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Speaker 2: be supportive of any alteration to US policy toward Israel

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Speaker 2: if Israel were to do that when the administration has

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Speaker 2: warn't against doing so, conditioning aid for example, No.

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Speaker 7: I don't think we should do that. This is something

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Speaker 7: where Harmas committed a a disgusting atrocity against the people

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Speaker 7: of Israel on October seventh, and so what the United

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Speaker 7: States government should do is stand behind its ally. If

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Speaker 7: Hamas refuses to surrender. That is because Hamas is a

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Speaker 7: terrorist organization that literally hides behind women and children in Gaza.

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Speaker 7: They would prefer to see Palestinians die so that Harmas

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Speaker 7: can live. I know that's very strong language for your network,

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Speaker 7: but those are That's the truth of what's happening overseas,

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Speaker 7: and so Hamahs should have surrendered long ago. The only

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Speaker 7: reason why they haven't surrendered to this point is because

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Speaker 7: they are getting political coverage from a lot of news

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Speaker 7: stations around the world and from the radical left in

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Speaker 7: the Democrat Party who continue to give them cover. When

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Speaker 7: it comes to the Palestinians and Gaza who have died

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Speaker 7: in this conflict. Nobody wants to see the loss of life.

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Speaker 7: But when you have Hamas hide behind women and children,

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Speaker 7: using them as human shields, there is going to be

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Speaker 7: loss of life. And they do that for one very

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Speaker 7: important reason. Hamas hides behind women and children because they

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Speaker 7: believe that Israel will weaken and not follow through with

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Speaker 7: eliminating Hamas. But Israel's resolve is high. They should continue

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Speaker 7: the incursion in Tarafa as we speak. They should not

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Speaker 7: stop from doing that, because if you let Hamas hide

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Speaker 7: behind women and children and then rebuild themselves by sending

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Speaker 7: aid over there, which, by the way, hamas right now

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Speaker 7: is stealing the aid for their own purposes from the

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Speaker 7: Palestinian people. If you allow them to survive, you're only

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Speaker 7: going to invite more attacks in the future. I think

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Speaker 7: Israel's doing the right thing. They should proceed forward, and

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Speaker 7: the White House, led unfortunately by Joe Biden and the

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Speaker 7: Secretary of State mister Blincoln, they should stand behind our ally,

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Speaker 7: not behind hamas well.

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Speaker 2: Congressman, do you not think the White House has done

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Speaker 2: that to this point, considering we have not seen conditions

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Speaker 2: put on aid, and we have heard many times expressed

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Speaker 2: by Biden and other officials within the administration that the

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Speaker 2: US alliance with Israel is ironclad.

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Speaker 7: Listen, we've heard the words from the Biden administration, but

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Speaker 7: when you go into where they've been talking with the

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Speaker 7: Israeli government behind closed doors, what you've seen is then

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Speaker 7: putting pressure on Israel, trying to get them to change

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Speaker 7: the battle plans that the IDF is going through right now.

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Speaker 7: They've been saber rattling to Israel, saying that there are

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Speaker 7: certain conditions that the United States wants to see and

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Speaker 7: how they proceed in this conflict. That is not the

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Speaker 7: appropriate response from our government. That is a cowering response

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Speaker 7: from our government, which is sad to see because at

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Speaker 7: the same time, you have the Biden administration is back

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Speaker 7: channeling to the Iranian regime, trying to cut a new

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Speaker 7: Iranian deal with that regime. And we all know that

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Speaker 7: the Iranians are the backstop for Hamas. Hamas is a

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Speaker 7: puppet regime of Iran. And so when you have Tony

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Speaker 7: Blincoln and President Biden going behind closed doors to back

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Speaker 7: channel to the Uranians and then also to limit what

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Speaker 7: Israel can do, then I would tell you no, the

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Speaker 7: speeches might sound good, but what's happening in reality has

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Speaker 7: not been good and not supportive of Israel.

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Speaker 2: Congressman, your displeasure with the way that this president has

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Speaker 2: conducted himself in regard to this conflict is well noted.

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Speaker 2: I would like to ask you, though, about the former

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Speaker 2: president with whom I know you have a close relationship.

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Speaker 2: I'm sure this will come as no surprise to you

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Speaker 2: that your name has come up quite repeatedly in terms

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Speaker 2: of who may potentially be Donald Trump's vice presidential candidate

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Speaker 2: join him on the ticket.

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Speaker 4: Come November.

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Speaker 2: What conversations have you had, if not with him, with

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Speaker 2: others on his team about that.

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Speaker 7: There's really not been any conversations. I think everybody is

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Speaker 7: aware of kind of what this the short list is

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Speaker 7: to use your language, But what we're focused on is

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Speaker 7: making sure that the Trump campaign is in the best

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Speaker 7: position possible to retake the White House this November. Look,

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Speaker 7: whatever President Trump decides to do when it comes to

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Speaker 7: the vice presidency, I'm gonna fully support because I just

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Speaker 7: want to win and get our country back on track.

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Speaker 7: We have an amazing country if our leadership is actually

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Speaker 7: smart and gets out of the way of the American people.

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Speaker 7: I think four years ago the American people were lied to.

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Speaker 7: Joe Biden said that the adults were going to be

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Speaker 7: in the room, and the adults are going to come

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Speaker 7: back to Washington, DC. But what we have seen in

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Speaker 7: the last three and a half years is the most

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Speaker 7: disastrous policy, both domestically and on a foreign policy basis,

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Speaker 7: our country has ever seen. Joe Biden is the master

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Speaker 7: of disaster and he needs to go whoever the vice

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Speaker 7: president is, that'll be fine. President Trump's gonna make that decision.

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Speaker 7: I will support that. But we got to get our

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Speaker 7: country back on track. The American people deserve no less,

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Speaker 7: and our allies deserve no less.

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Speaker 2: Great Congressman Iron Donald, the Republican from Florida, thank you

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Speaker 2: so much for joining us on Bloomberg Television and Radio

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Speaker 2: live from Capitol Hill. We appreciate your time, sir, and

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Speaker 2: we want to get a bit of reaction now from

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Speaker 2: our political panel. And pleased to say Genie Shanz, a

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Speaker 2: no Bloomberg Politics contributor, is joining me alongside Republican strategist

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Speaker 2: Lester Months and co head of the International Group at BGR.

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Speaker 4: So Lester, if I could just first go to you.

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Speaker 2: Obviously, a lot of criticism of the Biden administration dealt

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Speaker 2: there by Congressman Donald's. At the same time, while Biden

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Speaker 2: is navigating the situation with Israel, Donald Trump is spending

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Speaker 2: his days, including today, in court in New York. When

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Speaker 2: a voter is considering these two choices, potentially disagreements over

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Speaker 2: policy versus something about character. What will win out in November?

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Speaker 8: What a wonderful question. I don't think we know yet.

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Speaker 8: This is a pretty close election. I think mister Donald's

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Speaker 8: just demonstrated why he's on that list. That was a

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Speaker 8: lot of forceful messages, master of disaster, as he called

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Speaker 8: Joe Biden. He's he would be a great you know,

438
00:24:05,800 --> 00:24:09,800
Speaker 8: just objectively, you're looking for an attack dog vice presidential candidate,

439
00:24:09,960 --> 00:24:13,280
Speaker 8: he would be terrific. He hit all the marks that

440
00:24:13,400 --> 00:24:17,840
Speaker 8: those messages resonate with Republicans. That's that's going to help

441
00:24:17,960 --> 00:24:21,040
Speaker 8: Donald Trump, who might be trapped in a courtroom for

442
00:24:21,119 --> 00:24:24,560
Speaker 8: the next few months, either in New York or in

443
00:24:24,640 --> 00:24:27,840
Speaker 8: Florida or DC. He's going to be trapped in courtrooms

444
00:24:27,880 --> 00:24:30,080
Speaker 8: Byron Donalds. Could is one of the people who could

445
00:24:30,080 --> 00:24:32,760
Speaker 8: be out there, you know, bringing the attack on behalf

446
00:24:32,800 --> 00:24:35,000
Speaker 8: of the former president. I thought that was pretty effective.

447
00:24:36,760 --> 00:24:39,600
Speaker 2: Well, Genie, when you consider what exactly the attacks were,

448
00:24:39,880 --> 00:24:43,080
Speaker 2: everything from the way that he has conducted his Israel

449
00:24:43,560 --> 00:24:46,440
Speaker 2: policy to the way that he has handled the situation

450
00:24:47,000 --> 00:24:49,600
Speaker 2: on the US border. Are these not two issues that

451
00:24:49,720 --> 00:24:53,199
Speaker 2: are actually among perhaps the highest ranking in terms of

452
00:24:53,200 --> 00:24:56,520
Speaker 2: what's going to be weighing down Joe Biden's re election effort.

453
00:24:58,080 --> 00:25:00,399
Speaker 9: They are. And the third one, of course, would be

454
00:25:00,440 --> 00:25:03,560
Speaker 9: the economy and inflation. And so he did hit those

455
00:25:03,600 --> 00:25:09,239
Speaker 9: talking points. You know, Unfortunately, the veracity of some of

456
00:25:09,280 --> 00:25:12,520
Speaker 9: what he said was not something that many people who

457
00:25:12,520 --> 00:25:16,359
Speaker 9: have looked, for instance, at the Jim Langford bill on

458
00:25:16,720 --> 00:25:20,200
Speaker 9: border security would agree with. You know, he talked about

459
00:25:20,200 --> 00:25:23,080
Speaker 9: it as if it was, you know, Joe Biden's bill

460
00:25:23,240 --> 00:25:27,000
Speaker 9: uninterested in border security. Well, you asked Jim Langsford, you

461
00:25:27,040 --> 00:25:30,720
Speaker 9: asked the Wall Street Journal, this conservative editorial board. They

462
00:25:30,800 --> 00:25:34,879
Speaker 9: described it as the most conservative security bill, not an

463
00:25:34,880 --> 00:25:37,960
Speaker 9: immigration bill, that we had seen in a hundred years.

464
00:25:38,080 --> 00:25:40,800
Speaker 9: And so, of course it was the House of Representatives,

465
00:25:40,800 --> 00:25:44,040
Speaker 9: the Republicans who punted on that because it wasn't in

466
00:25:44,119 --> 00:25:48,720
Speaker 9: Donald Trump's interests as it pertains to the election in November.

467
00:25:48,760 --> 00:25:50,679
Speaker 9: He didn't want Joe Biden to get a win on

468
00:25:50,720 --> 00:25:53,879
Speaker 9: that before the election. So you know, yes, is he

469
00:25:54,240 --> 00:25:58,119
Speaker 9: making good talking points on behalf of Donald Trump. Absolutely,

470
00:25:58,440 --> 00:26:02,000
Speaker 9: But when it comes to governor, big, big questions have

471
00:26:02,160 --> 00:26:04,520
Speaker 9: to be asked, you know, just going back to the

472
00:26:04,520 --> 00:26:07,959
Speaker 9: issue of Israel, for instance, I listened to Joe Biden

473
00:26:08,040 --> 00:26:11,639
Speaker 9: speak carefully. He talked about an iron cloud commitment to Israel,

474
00:26:11,960 --> 00:26:13,919
Speaker 9: and I'm not sure how that could be questioned at

475
00:26:13,920 --> 00:26:14,359
Speaker 9: this point.

476
00:26:15,760 --> 00:26:16,080
Speaker 4: All right.

477
00:26:16,160 --> 00:26:19,840
Speaker 2: Jeanie Shanzo, Bloomberg Politics contributor and Lester Munson of BGR

478
00:26:19,880 --> 00:26:21,879
Speaker 2: Group wish we had more time with you both today,

479
00:26:21,880 --> 00:26:23,080
Speaker 2: but thank you so much.

480
00:26:23,119 --> 00:26:30,359
Speaker 1: As always, you're listening to the Bloomberg Balance of Power podcast.

481
00:26:30,640 --> 00:26:33,479
Speaker 1: Catch Just Live weekdays at noon Eastern on Eppo car

482
00:26:33,600 --> 00:26:36,480
Speaker 1: Play and then Proudo with the Bloomberg Business app. Listen

483
00:26:36,560 --> 00:26:39,600
Speaker 1: on demand wherever you get your podcasts, or watch us

484
00:26:39,640 --> 00:26:41,240
Speaker 1: live on YouTube.

485
00:26:43,200 --> 00:26:45,960
Speaker 2: Welcome to Balance of Power on Bloomberg Television and Radio,

486
00:26:46,000 --> 00:26:48,400
Speaker 2: where the markets, of course trading all day with no break.

487
00:26:48,440 --> 00:26:50,960
Speaker 2: There is a break, however, up in New York in

488
00:26:51,000 --> 00:26:53,840
Speaker 2: the trial of Donald Trump, the criminal hush money trial

489
00:26:53,880 --> 00:26:55,680
Speaker 2: that is is on the lunch break until the end

490
00:26:56,040 --> 00:26:58,880
Speaker 2: of this hour. But before that break started, we got

491
00:26:58,960 --> 00:27:02,280
Speaker 2: multiple hours of ten testimony from porn stars Stormy Daniels,

492
00:27:02,280 --> 00:27:05,320
Speaker 2: who of course has been in focus in this case.

493
00:27:05,560 --> 00:27:07,720
Speaker 2: She was the recipient of this one hundred and thirty

494
00:27:07,800 --> 00:27:11,480
Speaker 2: thousand dollars hush money payment that prosecutors alleged was intended

495
00:27:12,040 --> 00:27:15,199
Speaker 2: to influence the results of the twenty sixteen election in

496
00:27:15,240 --> 00:27:17,800
Speaker 2: Donald Trump's favor, and of course that the payments to

497
00:27:17,840 --> 00:27:20,440
Speaker 2: Michael Cohen, the fixer who made the payments to Stormy Daniels,

498
00:27:20,680 --> 00:27:25,280
Speaker 2: were misclassified improperly as legal fees thus the charges of

499
00:27:25,359 --> 00:27:28,240
Speaker 2: falsification of business records. We want to get more now

500
00:27:28,760 --> 00:27:30,760
Speaker 2: with June Grosso, who of course is the host of

501
00:27:30,760 --> 00:27:34,800
Speaker 2: Bloomberg Law, has been following this trial incredibly closely, So June,

502
00:27:34,840 --> 00:27:37,960
Speaker 2: it's unclear what else we'll hear from Stormy Daniels when

503
00:27:37,960 --> 00:27:40,439
Speaker 2: the lunch break returns. How much longer she could be

504
00:27:40,840 --> 00:27:43,240
Speaker 2: on the witness stand. Have we gotten though, all of

505
00:27:43,320 --> 00:27:46,200
Speaker 2: the details that really prosecutors likely wanted to get at

506
00:27:46,520 --> 00:27:47,000
Speaker 2: from her.

507
00:27:47,400 --> 00:27:49,080
Speaker 10: Well, it's hard to know because I don't know what

508
00:27:49,119 --> 00:27:52,040
Speaker 10: else she has they have that she could testify to.

509
00:27:52,200 --> 00:27:55,200
Speaker 10: But the most important thing, and she's talking about it now,

510
00:27:55,320 --> 00:27:58,080
Speaker 10: is the hush money trial, and they certainly have gotten

511
00:27:58,119 --> 00:28:01,520
Speaker 10: into that also. I think what's in important for prosecutors is,

512
00:28:01,920 --> 00:28:04,639
Speaker 10: you know, the jurors have been hearing Stormy Daniels, Stormy

513
00:28:04,720 --> 00:28:07,320
Speaker 10: Daniels to this whole trial. They want, you know, the

514
00:28:07,400 --> 00:28:11,680
Speaker 10: jury to meet Stormy Daniels and also to talk about

515
00:28:12,040 --> 00:28:15,439
Speaker 10: the sexual encounter she had with Donald Trump, which she

516
00:28:15,520 --> 00:28:19,159
Speaker 10: recounted in great detail. And what they want is to

517
00:28:19,200 --> 00:28:22,840
Speaker 10: show the jury why Donald Trump wanted to keep this

518
00:28:23,400 --> 00:28:27,240
Speaker 10: so secret, desperately didn't want it coming out before the election.

519
00:28:27,640 --> 00:28:29,840
Speaker 10: And when you hear some of the details she gives,

520
00:28:30,320 --> 00:28:33,879
Speaker 10: you can imagine that this is something that someone running

521
00:28:33,920 --> 00:28:37,080
Speaker 10: for president would not want to be out there. I mean,

522
00:28:37,119 --> 00:28:39,160
Speaker 10: he said things like, first of all, he asked her

523
00:28:39,160 --> 00:28:43,600
Speaker 10: a lot of intimate questions, and he said at one point,

524
00:28:43,680 --> 00:28:46,720
Speaker 10: do you remind me of my daughter? So this whole

525
00:28:46,840 --> 00:28:51,640
Speaker 10: scenario is unsavory, and that's putting it mildly, and it's

526
00:28:52,160 --> 00:28:54,880
Speaker 10: a good reason for Donald Trump to want it to

527
00:28:54,880 --> 00:28:57,520
Speaker 10: stay out of the public eye.

528
00:28:58,200 --> 00:28:59,840
Speaker 2: Yeah, well, when it comes to some of the detail,

529
00:28:59,840 --> 00:29:02,560
Speaker 2: of course, the judge had previously ruled that not all

530
00:29:02,600 --> 00:29:05,800
Speaker 2: of the sexual detail needed to be born out by

531
00:29:05,800 --> 00:29:08,480
Speaker 2: Stormy Daniels on the witness stand, though certainly she did

532
00:29:08,520 --> 00:29:10,080
Speaker 2: get into.

533
00:29:09,560 --> 00:29:12,480
Speaker 4: Some of it. But she got into a lot of

534
00:29:12,480 --> 00:29:14,240
Speaker 4: this positions.

535
00:29:14,040 --> 00:29:18,320
Speaker 10: Right because she talked so fast. From everyone I've been hearing,

536
00:29:18,520 --> 00:29:22,320
Speaker 10: she talks so fast that it comes out before, you know,

537
00:29:22,480 --> 00:29:25,400
Speaker 10: minutes too late. And the defense hasn't been objecting that much.

538
00:29:25,440 --> 00:29:27,040
Speaker 10: But you got a lot of detail. I don't know

539
00:29:27,080 --> 00:29:30,880
Speaker 10: what other details she could have really talked about. So

540
00:29:30,960 --> 00:29:33,240
Speaker 10: I think that the judge I understand that he was

541
00:29:33,320 --> 00:29:36,280
Speaker 10: none too happy. And this is a very even tempered

542
00:29:36,360 --> 00:29:40,200
Speaker 10: judge not much gets him, you know, concerned, but he

543
00:29:40,520 --> 00:29:44,440
Speaker 10: was unhappy about this thing and sounded as if he

544
00:29:44,600 --> 00:29:46,160
Speaker 10: was losing his temper a little bit.

545
00:29:47,800 --> 00:29:47,880
Speaker 11: So.

546
00:29:48,000 --> 00:29:51,960
Speaker 2: Of course, the detail of the actual sexual sexual encounter

547
00:29:52,040 --> 00:29:54,800
Speaker 2: June is one thing. The detail on the actual NDA

548
00:29:54,880 --> 00:29:57,080
Speaker 2: and the payment is another. Before the break, we did

549
00:29:57,120 --> 00:29:59,720
Speaker 2: hear Daniels talking about that non disclosure agreement.

550
00:29:59,720 --> 00:30:02,000
Speaker 4: She said that it was intended to keep information secret.

551
00:30:02,040 --> 00:30:04,880
Speaker 2: She was asked by the prosecutor who the beneficiary of

552
00:30:04,880 --> 00:30:07,920
Speaker 2: the NDA was. She answered Donald Trump, adding that it

553
00:30:07,960 --> 00:30:10,000
Speaker 2: was arranged by Michael Cohen. She went on to say

554
00:30:10,040 --> 00:30:12,680
Speaker 2: she had wanted the deal done by October fourteenth, prior

555
00:30:12,720 --> 00:30:15,760
Speaker 2: to the November twenty sixteen election, because she was afraid

556
00:30:15,800 --> 00:30:18,320
Speaker 2: if it wasn't done before the election that she would

557
00:30:18,320 --> 00:30:20,840
Speaker 2: not be safe. And she raierated that the deal was

558
00:30:20,840 --> 00:30:23,480
Speaker 2: for one hundred and thirty thousand dollars, that she could

559
00:30:23,520 --> 00:30:26,600
Speaker 2: not tell the story and he could not contact her.

560
00:30:26,640 --> 00:30:29,120
Speaker 2: Of course, another name, though, has come up in that

561
00:30:29,560 --> 00:30:32,280
Speaker 2: testimony from Daniels, which is Michael Cohen June, who we

562
00:30:32,320 --> 00:30:33,640
Speaker 2: have yet to hear from.

563
00:30:33,680 --> 00:30:34,520
Speaker 4: How could her.

564
00:30:34,360 --> 00:30:37,600
Speaker 2: Testimony and his ultimately be attempted to be pieced together

565
00:30:37,920 --> 00:30:38,720
Speaker 2: by the prosecution.

566
00:30:39,160 --> 00:30:42,280
Speaker 10: Well, so a lot of the witnesses that we've heard

567
00:30:42,320 --> 00:30:45,840
Speaker 10: from up until this point from the prosecution, are there

568
00:30:46,000 --> 00:30:49,880
Speaker 10: to buttress what Michael Cohen is going to testify. You know,

569
00:30:49,960 --> 00:30:53,760
Speaker 10: as I've said, Michael Cohen is comes to the courtroom

570
00:30:53,880 --> 00:30:57,040
Speaker 10: with a lot of baggage, a lot of ways for

571
00:30:57,120 --> 00:30:59,600
Speaker 10: the defense to attack his testimony. I mean, we could

572
00:30:59,640 --> 00:31:03,080
Speaker 10: count them many ways. So he is a witness whose

573
00:31:03,120 --> 00:31:06,320
Speaker 10: credibilities has to be bolstered by the prosecution, and they're

574
00:31:06,320 --> 00:31:08,840
Speaker 10: going to do that with documents, but also with some

575
00:31:08,920 --> 00:31:11,920
Speaker 10: of the testimony, for example, the testimony that she's giving

576
00:31:11,960 --> 00:31:15,240
Speaker 10: about how Michael Cohen set this up and how also

577
00:31:15,560 --> 00:31:19,480
Speaker 10: how she was afraid she wouldn't get paid before the election,

578
00:31:19,640 --> 00:31:21,840
Speaker 10: and you know, we have that whole thing about how

579
00:31:21,920 --> 00:31:25,080
Speaker 10: Michael Cohen was trying to get the payment and finally

580
00:31:25,120 --> 00:31:27,320
Speaker 10: had to put it up, you know, with an equity

581
00:31:27,360 --> 00:31:30,520
Speaker 10: loan on his own home. So all these little things

582
00:31:30,560 --> 00:31:33,120
Speaker 10: are going to be brought together by the prosecution, or

583
00:31:33,120 --> 00:31:35,560
Speaker 10: at least they hope it'll be brought together in one

584
00:31:35,600 --> 00:31:39,240
Speaker 10: big piece where the jury will say, well, he has

585
00:31:39,280 --> 00:31:40,040
Speaker 10: his problems.

586
00:31:40,080 --> 00:31:41,719
Speaker 4: He has a lot of problems.

587
00:31:41,760 --> 00:31:45,640
Speaker 10: You know, he perjured himself and all this, but he's

588
00:31:45,680 --> 00:31:48,960
Speaker 10: backed up by all these witnesses and by all this

589
00:31:49,120 --> 00:31:51,960
Speaker 10: paper that we have here. So I think that's what

590
00:31:52,000 --> 00:31:56,400
Speaker 10: the prosecution is tempting to do with her testimony. But also,

591
00:31:56,480 --> 00:31:58,360
Speaker 10: as I said, you know, they're also getting in a

592
00:31:58,360 --> 00:32:04,200
Speaker 10: lot of sort of details about Donald Trump that might

593
00:32:04,240 --> 00:32:07,520
Speaker 10: disturb some jurors because they come off as slazy. So

594
00:32:07,600 --> 00:32:11,480
Speaker 10: who knows what the jurors are thinking at this point.

595
00:32:12,080 --> 00:32:14,800
Speaker 2: Yeah, of course I will wait and see ultimately how

596
00:32:14,880 --> 00:32:19,200
Speaker 2: this jury rules whether or not or decides he's convicted

597
00:32:19,560 --> 00:32:22,320
Speaker 2: or acquitted. The prosecution has said it it does expect

598
00:32:22,320 --> 00:32:24,479
Speaker 2: it could be calling witnesses for another two weeks, so

599
00:32:24,480 --> 00:32:27,560
Speaker 2: it could be weeks still until this whole affair wraps up.

600
00:32:27,880 --> 00:32:30,600
Speaker 2: June Grasso, host of BLOOMBERGLAS, thank you so much, as

601
00:32:30,600 --> 00:32:33,800
Speaker 2: always for your expert insight and analysis as to what

602
00:32:33,880 --> 00:32:36,120
Speaker 2: exactly is happening in the courtroom in New York. And

603
00:32:36,120 --> 00:32:39,120
Speaker 2: of course, what happens in this trial in New York

604
00:32:39,320 --> 00:32:42,320
Speaker 2: has broader ramifications considering this is not just a former

605
00:32:42,320 --> 00:32:46,440
Speaker 2: president Donald Trump on trial, but current presumptive Republican nominee

606
00:32:46,440 --> 00:32:48,720
Speaker 2: who is actively campaigning to once against it.

607
00:32:49,080 --> 00:32:49,920
Speaker 4: In the Oval Office.

608
00:32:49,960 --> 00:32:51,920
Speaker 2: So we want to talk now more about how this

609
00:32:52,000 --> 00:32:55,280
Speaker 2: case factors into voter opinion as we get closer and

610
00:32:55,320 --> 00:32:57,760
Speaker 2: closer to that vote in November, and bring in Cliff Young.

611
00:32:57,800 --> 00:33:01,080
Speaker 2: He is US Public Affairs President IPSOS and is joining

612
00:33:01,080 --> 00:33:02,760
Speaker 2: me here in our Washington, d C.

613
00:33:02,920 --> 00:33:03,320
Speaker 4: Studio.

614
00:33:03,320 --> 00:33:05,280
Speaker 2: Cliff, always great to see you. Thank you so much

615
00:33:05,320 --> 00:33:08,040
Speaker 2: for coming back to Bloomberg. If we just start with

616
00:33:08,080 --> 00:33:11,040
Speaker 2: the impact of this trial or potential impact ultimately of

617
00:33:11,080 --> 00:33:15,320
Speaker 2: the verdict if Donald Trump is convicted, and then depending

618
00:33:15,360 --> 00:33:19,000
Speaker 2: on potentially whatever the sentence is after that conviction, how

619
00:33:19,000 --> 00:33:21,840
Speaker 2: does that impact as odds of winning in November.

620
00:33:22,080 --> 00:33:24,840
Speaker 12: Well, first and foremost, we don't know, because it is

621
00:33:24,880 --> 00:33:27,400
Speaker 12: the future and they're sort of extraordinary events. They're not

622
00:33:27,440 --> 00:33:30,120
Speaker 12: events that we can sort of compare to in the past.

623
00:33:30,120 --> 00:33:34,000
Speaker 12: We don't have a database of convicted former presidents that

624
00:33:34,040 --> 00:33:36,640
Speaker 12: we can draw from. But we do test things, We

625
00:33:36,720 --> 00:33:39,600
Speaker 12: experiment on these sorts of issues in our polling, and

626
00:33:39,680 --> 00:33:43,280
Speaker 12: what we do find is a conviction and more importantly,

627
00:33:43,680 --> 00:33:47,040
Speaker 12: a conviction and prison time has an effect on the

628
00:33:47,080 --> 00:33:52,400
Speaker 12: margins that it basically sort of rattles moderate Republicans, They

629
00:33:52,440 --> 00:33:55,000
Speaker 12: sort of migrate to undecided That doesn't mean they wouldn't

630
00:33:55,000 --> 00:33:58,400
Speaker 12: come back again if the messages were right, But without

631
00:33:58,440 --> 00:34:01,200
Speaker 12: a doubt, this sort of event probably, like I said,

632
00:34:01,600 --> 00:34:03,560
Speaker 12: has an effect on the margins, is.

633
00:34:03,520 --> 00:34:06,840
Speaker 2: That more that would be Trump voters would be more

634
00:34:06,960 --> 00:34:09,879
Speaker 2: likely to gravitate towards say an alternate choice, a third

635
00:34:09,920 --> 00:34:12,759
Speaker 2: party candidate, or that they actually would then go out

636
00:34:12,760 --> 00:34:15,439
Speaker 2: and vote for Joe Biden, because there is a difference there.

637
00:34:15,640 --> 00:34:18,040
Speaker 12: I don't think there's any sort of world where a

638
00:34:18,080 --> 00:34:20,680
Speaker 12: Trump voter would decide not to vote for him and

639
00:34:20,680 --> 00:34:24,400
Speaker 12: then vote for Biden. There's a likelihood that they migrate

640
00:34:24,440 --> 00:34:27,360
Speaker 12: to a third candidate RFK as an example, but more

641
00:34:27,560 --> 00:34:29,680
Speaker 12: than likely they would not vote at all. They just

642
00:34:29,719 --> 00:34:31,800
Speaker 12: stay home and just wait for the next election.

643
00:34:32,080 --> 00:34:34,080
Speaker 2: So ultimately, Cliff, a lot of this is probably not

644
00:34:34,160 --> 00:34:36,319
Speaker 2: about that base Trump voter who would be voting for

645
00:34:36,400 --> 00:34:39,160
Speaker 2: him no matter what, or certainly not voting for someone

646
00:34:39,160 --> 00:34:42,520
Speaker 2: else who isn't him, versus a base Biden voter who

647
00:34:42,640 --> 00:34:45,759
Speaker 2: is already committed to voting for the Democratic candidate. It's

648
00:34:45,800 --> 00:34:48,480
Speaker 2: about that basket of undecided, and I just wonder how

649
00:34:48,520 --> 00:34:52,719
Speaker 2: big that basket realistically is and whether or not we're

650
00:34:52,760 --> 00:34:56,040
Speaker 2: talking about that undecided group potentially growing larger because of

651
00:34:56,040 --> 00:35:00,440
Speaker 2: issues like this or others that more people become person waitable.

652
00:35:01,040 --> 00:35:04,440
Speaker 12: Yeah, this is a very uncertain electoral cycle. So already

653
00:35:04,640 --> 00:35:07,000
Speaker 12: from the get go we have between fifteen to twenty

654
00:35:07,040 --> 00:35:09,440
Speaker 12: percent of the population, depending how we ask the question,

655
00:35:09,840 --> 00:35:13,520
Speaker 12: I'm unsure about their answer about how they would vote.

656
00:35:14,320 --> 00:35:17,360
Speaker 12: This obviously increases as the legal troubles sort of expose

657
00:35:17,400 --> 00:35:22,040
Speaker 12: themselves over time. They hurt Trump specifically. I think it

658
00:35:22,120 --> 00:35:27,000
Speaker 12: probably translates more into not showing up and voting than

659
00:35:27,040 --> 00:35:29,919
Speaker 12: somehow someone changing their vote and voting for the other side.

660
00:35:30,280 --> 00:35:31,720
Speaker 12: But obviously we will see.

661
00:35:31,920 --> 00:35:35,279
Speaker 2: Well on that note of really ultimately it being about

662
00:35:35,320 --> 00:35:37,640
Speaker 2: who turns out and actually decides to cast a vote.

663
00:35:37,680 --> 00:35:38,720
Speaker 4: In November, you did.

664
00:35:38,520 --> 00:35:40,960
Speaker 2: Some polling with ABC that came out just a few

665
00:35:41,000 --> 00:35:43,480
Speaker 2: days ago that did suggest looking at the headline of

666
00:35:43,560 --> 00:35:47,640
Speaker 2: just you know, American voting age people, donald Trump is leading.

667
00:35:47,800 --> 00:35:51,200
Speaker 2: When you narrow that basket to likely voters, it's Joe

668
00:35:51,280 --> 00:35:54,040
Speaker 2: Biden that is ahead. So how should we be thinking

669
00:35:54,080 --> 00:35:58,879
Speaker 2: about the turnout elements of this? And ultimately, when we're

670
00:35:58,920 --> 00:36:02,399
Speaker 2: seeing Donald Trump leading consistently across national pulling swing state

671
00:36:02,400 --> 00:36:05,279
Speaker 2: polling as well, including our own here at Bloomberg. How

672
00:36:05,360 --> 00:36:07,879
Speaker 2: turnout is ultimately going to factor in whether he's as

673
00:36:07,920 --> 00:36:10,279
Speaker 2: strong with people who are actually going to show up.

674
00:36:10,360 --> 00:36:13,680
Speaker 12: Yeah, we have to be very careful right now looking

675
00:36:13,719 --> 00:36:15,759
Speaker 12: at sort of likely voters, that is, those who are

676
00:36:15,760 --> 00:36:17,600
Speaker 12: going to show up on election day or vote in

677
00:36:17,640 --> 00:36:20,840
Speaker 12: the election. It's fuzzy at best. We're six months out,

678
00:36:21,800 --> 00:36:24,440
Speaker 12: but it is suggestive that Trump has a lot of

679
00:36:24,640 --> 00:36:29,600
Speaker 12: voters on the ledge, on the fence. There's uncertainy about him.

680
00:36:29,760 --> 00:36:32,799
Speaker 12: There's uncertainly because of illegal troubles and frankly because of

681
00:36:32,960 --> 00:36:35,600
Speaker 12: many of those sort of related sort of issues that

682
00:36:35,640 --> 00:36:37,960
Speaker 12: could work itself out over the course of electoral cycle.

683
00:36:38,239 --> 00:36:41,520
Speaker 12: But today, when you look at likely voters, they like

684
00:36:42,239 --> 00:36:43,600
Speaker 12: Biden more than they like Trump.

685
00:36:44,120 --> 00:36:47,000
Speaker 2: Well, Biden has his own share of issues though as well,

686
00:36:47,000 --> 00:36:49,680
Speaker 2: while Donald Trump has legal problems. We saw Joe Biden's

687
00:36:49,680 --> 00:36:51,760
Speaker 2: perhaps on full display today when he was at Capitol

688
00:36:51,800 --> 00:36:55,080
Speaker 2: Hill giving a speech on anti Semitism. As we're seeing

689
00:36:55,120 --> 00:36:58,279
Speaker 2: college campuses across the country royaled by protests many who

690
00:36:58,280 --> 00:37:00,439
Speaker 2: are unhappy with his handling of.

691
00:37:00,360 --> 00:37:01,640
Speaker 4: His policy toward Israel.

692
00:37:01,680 --> 00:37:05,239
Speaker 2: Given the high civilian death toll in Gaza, how much

693
00:37:05,320 --> 00:37:08,040
Speaker 2: is that going to influence more so than other issues

694
00:37:08,080 --> 00:37:12,439
Speaker 2: like the economy or immigration, voters who are deciding whether

695
00:37:12,520 --> 00:37:14,960
Speaker 2: or not to show up in November for Biden.

696
00:37:15,040 --> 00:37:19,600
Speaker 12: Yeah, I really think that Gaza and Israel is a

697
00:37:19,640 --> 00:37:23,520
Speaker 12: false negative. Let's call it for Biden, It's not the issue.

698
00:37:24,080 --> 00:37:28,440
Speaker 12: The real issue is actually inflation, and younger Americans really

699
00:37:28,520 --> 00:37:32,799
Speaker 12: hit by high price levels, like minorities as well. When

700
00:37:32,840 --> 00:37:34,920
Speaker 12: we look specifically at the data, we put sort of

701
00:37:35,280 --> 00:37:38,400
Speaker 12: Gaza on the one hand, inflation on the other. Across

702
00:37:38,440 --> 00:37:42,080
Speaker 12: all demographics, inflation wins out in terms of the number

703
00:37:42,080 --> 00:37:45,560
Speaker 12: one issue, though number one worry, and that's really a

704
00:37:45,600 --> 00:37:48,040
Speaker 12: Biden's achilles heel today. It's inflation.

705
00:37:48,200 --> 00:37:50,400
Speaker 2: Well, you mentioned young people specifically, who of course have

706
00:37:50,440 --> 00:37:51,719
Speaker 2: really been at the heart of a lot of this

707
00:37:51,880 --> 00:37:56,560
Speaker 2: protest activity, and so to hear that maybe it is

708
00:37:56,640 --> 00:37:59,360
Speaker 2: perhaps more about the economy for them than other issues.

709
00:37:59,440 --> 00:38:01,480
Speaker 2: Your point is well taken. Yet, in the primaries, the

710
00:38:01,520 --> 00:38:03,880
Speaker 2: Democratic primary we have seen across a number of states,

711
00:38:03,920 --> 00:38:06,720
Speaker 2: Michigan perhaps most predominantly comes to mind, given its importance

712
00:38:06,760 --> 00:38:10,960
Speaker 2: as a swing state of primary voters choosing uncommitted or

713
00:38:11,440 --> 00:38:15,120
Speaker 2: something to that effect. Different languages depending on what state

714
00:38:15,120 --> 00:38:17,480
Speaker 2: we're talking about, but actively choosing not to vote for

715
00:38:17,560 --> 00:38:19,560
Speaker 2: Joe Biden in the primary. Are you saying that that

716
00:38:19,640 --> 00:38:22,840
Speaker 2: protest vote over Israel policy is limited to the primary,

717
00:38:22,920 --> 00:38:24,759
Speaker 2: isn't likely to be as much of a factor in

718
00:38:24,800 --> 00:38:25,280
Speaker 2: the general.

719
00:38:25,480 --> 00:38:27,680
Speaker 12: Now, I was saying that inflation is more important, Okay,

720
00:38:27,719 --> 00:38:30,960
Speaker 12: And to understand sort of where younger Americans stand. It's

721
00:38:31,000 --> 00:38:34,279
Speaker 12: really about inflation. It's not about Gaza and Israel. That's

722
00:38:34,280 --> 00:38:36,360
Speaker 12: not to say that you can have a specific effect

723
00:38:36,400 --> 00:38:38,920
Speaker 12: in a specific state. We know all these elections are

724
00:38:39,000 --> 00:38:41,239
Speaker 12: very very close. That's not to say that once again

725
00:38:41,239 --> 00:38:44,440
Speaker 12: on the margins, that the issue can't have an effect,

726
00:38:44,760 --> 00:38:48,800
Speaker 12: But when looking overall, it's really about inflation today. Biden's

727
00:38:48,840 --> 00:38:52,279
Speaker 12: problem is bringing those constituencies most affected by inflation back

728
00:38:52,280 --> 00:38:52,920
Speaker 12: into the fold.

729
00:38:53,120 --> 00:38:53,680
Speaker 4: Would one of.

730
00:38:53,600 --> 00:38:57,080
Speaker 2: Those constituencies include black voters, Because we've also seen some

731
00:38:57,160 --> 00:39:00,319
Speaker 2: ipsos pulling with the Washington Post on the idea that

732
00:39:00,760 --> 00:39:03,239
Speaker 2: fewer black voters say they're highly likely to turn out

733
00:39:03,280 --> 00:39:05,120
Speaker 2: and vote in November this time around. I believe it's

734
00:39:05,160 --> 00:39:08,000
Speaker 2: twelve points less than in twenty twenty.

735
00:39:08,120 --> 00:39:10,759
Speaker 12: It's very worrisome. Indeed, it's not just black voters. It's

736
00:39:10,840 --> 00:39:14,319
Speaker 12: Latinos as well. Those two constituency groups have been very

737
00:39:14,320 --> 00:39:18,160
Speaker 12: important for Democrats, and they've been majorly hit by inflation

738
00:39:18,200 --> 00:39:22,480
Speaker 12: over the last few years, and they're less enthusiastic in

739
00:39:22,600 --> 00:39:25,760
Speaker 12: sort of their outlook in terms of voting for Biden

740
00:39:25,920 --> 00:39:28,000
Speaker 12: than they were just two years before.

741
00:39:28,640 --> 00:39:33,160
Speaker 2: When we think about enthusiasm as well in many different states,

742
00:39:33,200 --> 00:39:35,279
Speaker 2: and I mentioned one of them being Michigan, a swing

743
00:39:35,280 --> 00:39:37,280
Speaker 2: state that we pay a lot of attention to. Typically

744
00:39:37,280 --> 00:39:39,440
Speaker 2: we look at, you know, there's roughly seven of these

745
00:39:39,440 --> 00:39:41,719
Speaker 2: swing states that we think will be highly influential. We

746
00:39:41,800 --> 00:39:44,680
Speaker 2: heard from down in Florida over this past weekend Donald

747
00:39:44,680 --> 00:39:49,200
Speaker 2: Trump's campaign at a donor event suggesting Minnesota and Virginia

748
00:39:49,719 --> 00:39:52,800
Speaker 2: could also be in play, that their polling suggests Donald

749
00:39:52,800 --> 00:39:55,880
Speaker 2: Trump might actually be able to win those states.

750
00:39:55,920 --> 00:39:58,000
Speaker 12: What do you think about that, Clinton, No, I don't

751
00:39:58,000 --> 00:40:00,120
Speaker 12: think that's I don't think that hits some Mark. I

752
00:40:00,160 --> 00:40:03,600
Speaker 12: think that Trump is overstated right now. Now Biden is

753
00:40:03,640 --> 00:40:05,879
Speaker 12: week and Biden has problems with his numbers, and that's

754
00:40:05,880 --> 00:40:08,719
Speaker 12: something that the Biden campaign is going to have to

755
00:40:08,719 --> 00:40:12,840
Speaker 12: worry about. But Minnesota and Virginia, especially Virginia sort of

756
00:40:12,840 --> 00:40:15,480
Speaker 12: turning I don't think that's when you look at the

757
00:40:15,560 --> 00:40:19,279
Speaker 12: historical data, that's possible. Anything's possible. But I don't think

758
00:40:19,320 --> 00:40:19,879
Speaker 12: that's the case.

759
00:40:20,320 --> 00:40:22,360
Speaker 2: Okay, fair enough, So maybe it is going to ultimately

760
00:40:22,400 --> 00:40:25,160
Speaker 2: come down to just those seventh I think so seven states.

761
00:40:25,440 --> 00:40:28,160
Speaker 2: To what the point the polling now is showing that

762
00:40:28,200 --> 00:40:31,560
Speaker 2: Biden is losing, if not in all of them, depending

763
00:40:31,600 --> 00:40:34,320
Speaker 2: on the poll you're looking at, in the vast majority.

764
00:40:34,360 --> 00:40:36,160
Speaker 2: But certainly there could be some room for that to

765
00:40:36,239 --> 00:40:37,120
Speaker 2: change over the next one.

766
00:40:37,080 --> 00:40:38,919
Speaker 12: Now, without a doubt, over six months, those things can change.

767
00:40:38,960 --> 00:40:42,719
Speaker 12: We expect it to narrow these Historically these states have

768
00:40:42,760 --> 00:40:45,960
Speaker 12: shown differences of one to two percentage points. They're at

769
00:40:46,000 --> 00:40:48,360
Speaker 12: four and five some of them. It's much too large,

770
00:40:48,440 --> 00:40:52,320
Speaker 12: much too in favor of Trump. As the economy improves,

771
00:40:52,360 --> 00:40:57,200
Speaker 12: we expect Biden to improve. Yes, but today Trump wins

772
00:40:57,200 --> 00:40:58,400
Speaker 12: and all the keys winging states.

773
00:40:58,640 --> 00:40:59,960
Speaker 4: Of course, there's still a long way to go.

774
00:41:00,160 --> 00:41:02,560
Speaker 2: So we'll probably keep having you back here on Bloomberg

775
00:41:02,560 --> 00:41:04,600
Speaker 2: Television and Radio to talk about it over the next

776
00:41:04,640 --> 00:41:07,880
Speaker 2: six months. Cliff Young, of course, is US Public Affairs president.

777
00:41:07,880 --> 00:41:08,600
Speaker 4: Over at episodes.

778
00:41:08,640 --> 00:41:12,680
Speaker 2: Thank you so much for joining me here.

779
00:41:13,239 --> 00:41:16,640
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens

780
00:41:16,760 --> 00:41:19,799
Speaker 1: just live weekdays at noon Eastern on Applecarplay and then

781
00:41:19,880 --> 00:41:22,480
Speaker 1: royd Oto with the Bloomberg Business App. You can also

782
00:41:22,520 --> 00:41:26,040
Speaker 1: listen live on Amazon Alexa from our flagship New York station,

783
00:41:26,400 --> 00:41:30,440
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

784
00:41:31,200 --> 00:41:33,200
Speaker 2: We got you covered all across the East Coast from

785
00:41:33,200 --> 00:41:35,760
Speaker 2: New York to Washington and the West Coast as well.

786
00:41:35,840 --> 00:41:38,080
Speaker 2: And that's where we go next, out to California where

787
00:41:38,080 --> 00:41:42,120
Speaker 2: the Milkin Institute Global Conference is taking place. Romain Bostik

788
00:41:42,160 --> 00:41:44,200
Speaker 2: and Carol Masser are there and they're joined now by

789
00:41:44,200 --> 00:41:48,040
Speaker 2: a very special guest, Minneapolis Fed President Neil Kashkari.

790
00:41:48,520 --> 00:41:51,480
Speaker 4: Carol Romaine, Thanks Kelly.

791
00:41:51,600 --> 00:41:54,640
Speaker 13: We are sitting here right now with Neil Cashcari, President

792
00:41:54,719 --> 00:41:57,120
Speaker 13: of the Minneapolis Fed. There's been a lot of talk

793
00:41:57,160 --> 00:42:00,120
Speaker 13: about how persistent inflation has shown itself to be. You

794
00:42:00,160 --> 00:42:02,680
Speaker 13: were pretty early on, at least amongst FED members are saying,

795
00:42:03,000 --> 00:42:06,120
Speaker 13: don't get too ahead of yourselves and talking about cutting rates.

796
00:42:06,400 --> 00:42:08,200
Speaker 13: A lot's change, at least from the data that we've

797
00:42:08,200 --> 00:42:10,120
Speaker 13: gotten over the last I don't know three months or so.

798
00:42:10,520 --> 00:42:13,239
Speaker 13: Has that changed your view as well about staying where

799
00:42:13,280 --> 00:42:13,640
Speaker 13: we are?

800
00:42:13,960 --> 00:42:14,200
Speaker 6: Well?

801
00:42:14,239 --> 00:42:18,160
Speaker 11: The second half of twenty twenty three surprised us at

802
00:42:18,160 --> 00:42:21,640
Speaker 11: how rapidly inflation fell. That was really good news, and

803
00:42:21,680 --> 00:42:24,719
Speaker 11: the economy remains strong. We all hope that was going

804
00:42:24,760 --> 00:42:27,320
Speaker 11: to continue the first quarter of this year.

805
00:42:27,600 --> 00:42:28,959
Speaker 6: It seems like it's stalled out.

806
00:42:29,200 --> 00:42:31,799
Speaker 11: So it's a little too soon to declare that we're

807
00:42:31,800 --> 00:42:34,759
Speaker 11: definitely stalled out, or maybe it's just taking more time.

808
00:42:35,280 --> 00:42:37,160
Speaker 11: I think we're in a good place right now. Labor

809
00:42:37,160 --> 00:42:39,799
Speaker 11: market is still strong. We can take our time to

810
00:42:39,840 --> 00:42:43,319
Speaker 11: get more data to see if disinflation is going to continue,

811
00:42:43,640 --> 00:42:46,400
Speaker 11: and if it does, great, If it doesn't, then we

812
00:42:46,440 --> 00:42:47,480
Speaker 11: need to take that on board.

813
00:42:47,800 --> 00:42:51,640
Speaker 13: What is the complexion right now of disinflation? What actually

814
00:42:51,719 --> 00:42:53,520
Speaker 13: drove us at least down to the level where we're

815
00:42:53,560 --> 00:42:54,200
Speaker 13: at right now.

816
00:42:54,280 --> 00:42:56,520
Speaker 11: Most of the gains that we saw last year were

817
00:42:56,600 --> 00:43:01,399
Speaker 11: supply side improvements. Supply chains getting better, are Americans coming

818
00:43:01,440 --> 00:43:04,640
Speaker 11: back to work, a lot more workers entering the labor force.

819
00:43:04,680 --> 00:43:05,800
Speaker 6: That's really positive.

820
00:43:06,520 --> 00:43:11,280
Speaker 11: I don't think monetary policy actually brought demand down that much,

821
00:43:11,680 --> 00:43:13,440
Speaker 11: and so most of the gains will because of the

822
00:43:13,440 --> 00:43:17,080
Speaker 11: supply side. Now, the question is if monetary policy has

823
00:43:17,120 --> 00:43:19,600
Speaker 11: to take us the rest of the way there, is

824
00:43:19,640 --> 00:43:22,080
Speaker 11: it tight enough to do that. I wrote an essay

825
00:43:22,120 --> 00:43:25,239
Speaker 11: today on our website raising that question. And I'm not

826
00:43:25,280 --> 00:43:28,760
Speaker 11: sure how tight monetary policy is. We need more data

827
00:43:28,800 --> 00:43:29,400
Speaker 11: to assess it.

828
00:43:29,600 --> 00:43:33,320
Speaker 5: How do we know that the inflationary process has still

829
00:43:33,480 --> 00:43:35,640
Speaker 5: some ways to go, or how do we know that

830
00:43:35,680 --> 00:43:38,320
Speaker 5: maybe this is it, this is the new normal.

831
00:43:38,719 --> 00:43:40,960
Speaker 11: Well, it's not the new normal because it's three percent

832
00:43:41,080 --> 00:43:44,840
Speaker 11: and the FED can and will achieve two percent. The

833
00:43:44,960 --> 00:43:49,320
Speaker 11: question is if disinflation is still underway, then maybe it'll

834
00:43:49,320 --> 00:43:51,120
Speaker 11: continue on its own, and we can.

835
00:43:51,080 --> 00:43:52,520
Speaker 6: Then take that on board.

836
00:43:52,800 --> 00:43:54,840
Speaker 11: If we need to hold rates where they are for

837
00:43:54,880 --> 00:43:57,520
Speaker 11: an extended period of time to tap the brakes on

838
00:43:57,560 --> 00:44:00,600
Speaker 11: the economy, or if we even needed to raise we

839
00:44:00,640 --> 00:44:02,360
Speaker 11: would do what we need to do to get inflation

840
00:44:02,440 --> 00:44:02,799
Speaker 11: back down.

841
00:44:02,960 --> 00:44:04,640
Speaker 13: I have to dis ask you, though, about two percent,

842
00:44:04,800 --> 00:44:07,120
Speaker 13: and I know why the FED stands by that two percent,

843
00:44:07,480 --> 00:44:09,560
Speaker 13: But I talk to people around the room this week

844
00:44:09,600 --> 00:44:12,560
Speaker 13: here and their cost of capital. They're basing that more

845
00:44:12,680 --> 00:44:15,600
Speaker 13: on closer to a three percent rate. And the idea

846
00:44:15,719 --> 00:44:19,399
Speaker 13: is they're saying, look, the two percent target that needs

847
00:44:19,400 --> 00:44:22,360
Speaker 13: to come up, that that's not the reality long term structurally,

848
00:44:22,480 --> 00:44:23,920
Speaker 13: at least not for the folks in this room.

849
00:44:24,000 --> 00:44:25,120
Speaker 6: Yeah, I disagree with that.

850
00:44:25,440 --> 00:44:28,160
Speaker 11: I mean, I think that ultimately the central bank, whether

851
00:44:28,160 --> 00:44:30,320
Speaker 11: it's the FED or the ECB or the Bank of England,

852
00:44:30,840 --> 00:44:34,680
Speaker 11: can determine whatever the inflation rate is, and over time,

853
00:44:34,760 --> 00:44:38,600
Speaker 11: if they conduct their policy appropriately, people will come to

854
00:44:38,680 --> 00:44:42,400
Speaker 11: understand that will adjust their behavior. We're committed to two percent,

855
00:44:42,480 --> 00:44:44,879
Speaker 11: we will get to two percent, and we will get

856
00:44:44,880 --> 00:44:48,280
Speaker 11: an interest rate environment necessary in order to achieve two percent.

857
00:44:48,440 --> 00:44:50,160
Speaker 5: You know, one of the arguments, though, Neil, is that

858
00:44:50,280 --> 00:44:53,680
Speaker 5: the idea of near shoring, bringing things back home, building

859
00:44:53,719 --> 00:44:55,800
Speaker 5: chips in America, that's going to create They're going to

860
00:44:55,840 --> 00:44:58,160
Speaker 5: be more expensive than if we were building them overseas,

861
00:44:58,400 --> 00:45:01,880
Speaker 5: and that is going to be consistent. Inflationary pressure is

862
00:45:01,960 --> 00:45:05,080
Speaker 5: longer term. There are some macro forces underway. Why not

863
00:45:05,520 --> 00:45:07,240
Speaker 5: think that it's got to be above two perceptions.

864
00:45:07,640 --> 00:45:11,040
Speaker 6: I think those trends are real. But those who suggest to.

865
00:45:11,000 --> 00:45:13,759
Speaker 11: Me a one time increase in the price level not

866
00:45:14,040 --> 00:45:18,400
Speaker 11: necessarily an ongoing increase of inflation at a higher level

867
00:45:18,600 --> 00:45:21,719
Speaker 11: that we believe and I believe that the monetary authority

868
00:45:22,040 --> 00:45:25,840
Speaker 11: can ultimately long run determine the inflation of the economy,

869
00:45:26,080 --> 00:45:29,200
Speaker 11: but the rate environment necessary to achieve that may be

870
00:45:29,320 --> 00:45:31,520
Speaker 11: different depending on these broader macro forces.

871
00:45:31,640 --> 00:45:34,000
Speaker 5: So rate cut this year, should we take it off

872
00:45:34,000 --> 00:45:35,799
Speaker 5: the table? Is it still a possibility?

873
00:45:35,920 --> 00:45:37,759
Speaker 11: It's certainly still a possibility. We need to let the

874
00:45:37,800 --> 00:45:40,600
Speaker 11: inflation data tell us. I mean, I think my colleagues

875
00:45:40,600 --> 00:45:42,279
Speaker 11: and I we all have a range of views on

876
00:45:42,680 --> 00:45:45,520
Speaker 11: where the economy is going, but we're all committed to

877
00:45:45,560 --> 00:45:48,040
Speaker 11: letting the data guide us. And if the data comes

878
00:45:48,040 --> 00:45:52,640
Speaker 11: in in a positive manner suggesting disinflation continues, will adjust.

879
00:45:52,800 --> 00:45:55,520
Speaker 6: Hey, go ahead. But is it just housing pressure?

880
00:45:55,560 --> 00:45:57,520
Speaker 5: Like you write a lot about housing pressure, We talk

881
00:45:57,520 --> 00:45:59,280
Speaker 5: about it, we're talking to with a lot of people

882
00:45:59,280 --> 00:46:02,760
Speaker 5: in the real estates. There's not enough supply of houses

883
00:46:02,800 --> 00:46:05,520
Speaker 5: out there, and that's creating inflation on the housing front.

884
00:46:05,719 --> 00:46:07,960
Speaker 5: Is it just housing pressures that you guys are really

885
00:46:07,960 --> 00:46:09,560
Speaker 5: focusing on, or that you're focusing on.

886
00:46:09,680 --> 00:46:13,360
Speaker 11: I'm focusing on housing first of all, because it's traditionally

887
00:46:13,360 --> 00:46:16,600
Speaker 11: the most interst right sensitive sector of the economy. And

888
00:46:16,719 --> 00:46:20,080
Speaker 11: if the most interst rate sensitive sector is not showing

889
00:46:20,120 --> 00:46:23,040
Speaker 11: as much disinflation as I would have thought, For example,

890
00:46:23,400 --> 00:46:26,040
Speaker 11: new lease rates appear to be climbing back again.

891
00:46:26,239 --> 00:46:29,359
Speaker 6: Yeah, that's surprising to me. Why is that that makes me.

892
00:46:29,400 --> 00:46:33,160
Speaker 11: Wonder is policy as tight as I would have otherwise assumed.

893
00:46:33,400 --> 00:46:36,440
Speaker 11: We are seeing some effect of monetary policy on credit

894
00:46:36,440 --> 00:46:40,760
Speaker 11: card delinquencies, on auto loan delinquencies, especially for lower credit

895
00:46:40,800 --> 00:46:43,920
Speaker 11: score borrowers. So it is having some effect, but it's

896
00:46:43,960 --> 00:46:46,080
Speaker 11: not having as much effect as I would have guessed.

897
00:46:46,080 --> 00:46:47,760
Speaker 13: By now, I know we have the benefit of hindsight.

898
00:46:47,840 --> 00:46:49,640
Speaker 13: But you go back to whin the rate hiking cycle

899
00:46:49,880 --> 00:46:53,279
Speaker 13: effectively pause. Do you think that the FEDS should have

900
00:46:53,360 --> 00:46:55,360
Speaker 13: kept going with hikes meeting additional hikes?

901
00:46:56,200 --> 00:46:56,719
Speaker 6: I don't know.

902
00:46:56,920 --> 00:46:59,960
Speaker 11: I mean, I think that there are lags in monetary policy,

903
00:47:00,640 --> 00:47:04,719
Speaker 11: and we saw such rapid disinflation in the second half

904
00:47:04,760 --> 00:47:07,360
Speaker 11: of last year. I mean, it was a really wonderful

905
00:47:07,400 --> 00:47:11,120
Speaker 11: scenario that was real and that surprised.

906
00:47:10,640 --> 00:47:12,920
Speaker 6: Us, and so it's reasonable to say, let's just let

907
00:47:12,960 --> 00:47:15,719
Speaker 6: that continue. Maybe it'll take us all the way home.

908
00:47:16,120 --> 00:47:18,120
Speaker 6: It ended up strolling out at least for a little bit.

909
00:47:18,239 --> 00:47:20,840
Speaker 13: You feel like you can accurately assess those lags what

910
00:47:20,880 --> 00:47:23,400
Speaker 13: those lags are, because even when you talk about disinflation,

911
00:47:23,520 --> 00:47:25,640
Speaker 13: you acknowledge yourself a lot of that is driven by

912
00:47:25,719 --> 00:47:28,600
Speaker 13: supply side issues and not just monetary policy. How do

913
00:47:28,600 --> 00:47:29,799
Speaker 13: you assess what the balance is.

914
00:47:29,960 --> 00:47:30,680
Speaker 6: Yeah, it's hard.

915
00:47:30,960 --> 00:47:31,120
Speaker 13: You know.

916
00:47:31,200 --> 00:47:33,560
Speaker 11: For example, in the housing market, which we're talking about,

917
00:47:33,800 --> 00:47:36,839
Speaker 11: we know a lot of Americans refinanced their homes at

918
00:47:36,920 --> 00:47:39,919
Speaker 11: when the mortgage rates were very low, and so they're

919
00:47:39,960 --> 00:47:42,840
Speaker 11: not feeling the pinch of higher rates because they have

920
00:47:42,880 --> 00:47:43,920
Speaker 11: not had to refinance.

921
00:47:44,440 --> 00:47:46,160
Speaker 6: And so that happens. That happened in the.

922
00:47:46,200 --> 00:47:49,200
Speaker 11: Late nineteen seventies and early eighties as well. That's part

923
00:47:49,239 --> 00:47:51,840
Speaker 11: of the lag in the policy process. So we have

924
00:47:51,920 --> 00:47:53,640
Speaker 11: a lot of data that we look at and we

925
00:47:53,719 --> 00:47:56,080
Speaker 11: ultimately have to use judgment to try to put it together.

926
00:47:56,200 --> 00:47:58,280
Speaker 6: Speaking of data, growth, we're doing okay.

927
00:47:58,440 --> 00:48:01,640
Speaker 5: Jay Powell consistently reminds this is a good thing. We

928
00:48:01,719 --> 00:48:04,439
Speaker 5: hear it, we feel it here at Milton. Is there

929
00:48:04,520 --> 00:48:07,600
Speaker 5: the possibility that you don't even have to cut rates at.

930
00:48:07,440 --> 00:48:10,480
Speaker 6: All this year because the economy is strong? Well, no,

931
00:48:10,560 --> 00:48:11,319
Speaker 6: that's you're right.

932
00:48:11,400 --> 00:48:15,040
Speaker 11: So if inflation moves sideways, and if the labor market

933
00:48:15,040 --> 00:48:18,200
Speaker 11: continues to be strong and growth continues to be strong.

934
00:48:17,960 --> 00:48:20,600
Speaker 6: Then I would be in the camp of we shouldn't.

935
00:48:20,160 --> 00:48:22,560
Speaker 11: Do anything, just let this play out for an extended

936
00:48:22,600 --> 00:48:25,239
Speaker 11: period of time. If, on the other hand, we start

937
00:48:25,239 --> 00:48:28,279
Speaker 11: to see inflation come back down or meaningful weakness in

938
00:48:28,320 --> 00:48:30,840
Speaker 11: the labor market, then that might say we need to

939
00:48:30,840 --> 00:48:34,160
Speaker 11: start dialing back, or if inflation proves to be more

940
00:48:34,160 --> 00:48:34,960
Speaker 11: in trench, we.

941
00:48:35,040 --> 00:48:37,320
Speaker 6: Could have to go up. Yeah, but is the economy

942
00:48:37,360 --> 00:48:38,239
Speaker 6: is its strong.

943
00:48:37,960 --> 00:48:38,600
Speaker 11: For every market?

944
00:48:39,400 --> 00:48:41,600
Speaker 6: Well, no, it's of course not. And we know that.

945
00:48:42,040 --> 00:48:45,120
Speaker 11: We know that the way policy works, it slows down

946
00:48:45,200 --> 00:48:48,719
Speaker 11: parts of the economy, and the lower income workers tend

947
00:48:48,719 --> 00:48:51,359
Speaker 11: to feel the pain the most, and that's I mean,

948
00:48:51,840 --> 00:48:55,400
Speaker 11: I wish that were not the case. It's also frustrating

949
00:48:55,440 --> 00:48:57,719
Speaker 11: that every time there's a piece of good news you

950
00:48:57,760 --> 00:49:02,160
Speaker 11: see the Wall Street rally, Ufouria returns to Wall Street, though,

951
00:49:02,480 --> 00:49:04,440
Speaker 11: and yet there are people who are feeling the pain.

952
00:49:04,760 --> 00:49:07,640
Speaker 6: So it's definitely uneven how this gets felt. You did

953
00:49:07,680 --> 00:49:08,080
Speaker 6: mention that.

954
00:49:08,120 --> 00:49:10,120
Speaker 5: If inflation starts to go up, I thought I heard

955
00:49:10,160 --> 00:49:13,040
Speaker 5: you say we could have to increase the FED. That's

956
00:49:13,080 --> 00:49:15,600
Speaker 5: a smart narrative still to have out there, that you

957
00:49:15,640 --> 00:49:18,279
Speaker 5: could that the Fed could possibly have to raise rates again.

958
00:49:18,640 --> 00:49:20,640
Speaker 6: Well, of course, I mean, we are data dependent.

959
00:49:20,719 --> 00:49:23,080
Speaker 11: We are committed to getting inflation back to our two

960
00:49:23,239 --> 00:49:25,839
Speaker 11: percent target, and we will do what we need to do.

961
00:49:25,920 --> 00:49:29,280
Speaker 11: Nobody has taken any rates completely off the table.

962
00:49:29,600 --> 00:49:30,759
Speaker 6: I think the bar is high.

963
00:49:31,120 --> 00:49:33,880
Speaker 11: Much more likely we would stay put for an extended

964
00:49:33,920 --> 00:49:36,040
Speaker 11: period of time and then we'll see where we are.

965
00:49:36,120 --> 00:49:38,160
Speaker 13: How would you actually prepare those the markets for that.

966
00:49:38,160 --> 00:49:39,360
Speaker 13: That's not the kind of thing you just want to

967
00:49:39,400 --> 00:49:41,520
Speaker 13: go into a meeting and surprise the markets on.

968
00:49:41,600 --> 00:49:43,279
Speaker 6: I mean, you need a little build up there.

969
00:49:43,320 --> 00:49:47,040
Speaker 11: I agree, but like there's no shortage effect, and there

970
00:49:47,120 --> 00:49:52,520
Speaker 11: is no shortage effects to signal when people's perspectives are changing.

971
00:49:52,640 --> 00:49:53,680
Speaker 6: Is that fed communication?

972
00:49:53,800 --> 00:49:54,040
Speaker 5: Though?

973
00:49:54,600 --> 00:49:56,919
Speaker 13: Do you think it's fair? And by that, I mean

974
00:49:57,160 --> 00:49:59,840
Speaker 13: is it too much? Because you get so many different opinions?

975
00:49:59,840 --> 00:50:02,400
Speaker 13: And in the media it's great, we love it, but

976
00:50:02,480 --> 00:50:04,560
Speaker 13: I feel like for investors sometimes it feels like, Okay,

977
00:50:04,600 --> 00:50:05,560
Speaker 13: we're getting too many people.

978
00:50:05,640 --> 00:50:10,000
Speaker 6: Tell them I understand their concerns. They're twelve reserur banks.

979
00:50:10,239 --> 00:50:13,440
Speaker 11: We represent regions of the country here, so people across

980
00:50:13,520 --> 00:50:16,799
Speaker 11: the six states that the Minneapolis Fed represents want to

981
00:50:16,840 --> 00:50:17,480
Speaker 11: hear from us.

982
00:50:17,840 --> 00:50:20,759
Speaker 6: Often I turn down ninety.

983
00:50:20,400 --> 00:50:23,239
Speaker 11: Five percent of my speaking invitations that I get, So

984
00:50:23,360 --> 00:50:26,279
Speaker 11: I go out across the district. I'm usually saying the

985
00:50:26,320 --> 00:50:29,960
Speaker 11: same thing, but in the spirit of transparency, I live

986
00:50:30,000 --> 00:50:32,480
Speaker 11: stream it so that can so I'm not giving any

987
00:50:32,560 --> 00:50:35,719
Speaker 11: secrets away, and if people want to watch it and

988
00:50:35,800 --> 00:50:38,640
Speaker 11: cover it, I can't control that, and so it's a

989
00:50:38,680 --> 00:50:41,480
Speaker 11: balancing act where we want to be transparent to the

990
00:50:41,520 --> 00:50:44,880
Speaker 11: constituents that we represent, and yet we also want to

991
00:50:44,880 --> 00:50:46,840
Speaker 11: be show that we're not giving secrets.

992
00:50:46,440 --> 00:50:47,680
Speaker 6: Away doesn't cost Cory.

993
00:50:47,719 --> 00:50:50,840
Speaker 5: I feel like there is more clarity of thought about

994
00:50:50,840 --> 00:50:53,320
Speaker 5: what the Fed may do next, certainly here at Milcote

995
00:50:53,400 --> 00:50:54,080
Speaker 5: this year around.

996
00:50:54,120 --> 00:50:54,960
Speaker 6: But having talked to.

997
00:50:54,920 --> 00:50:57,520
Speaker 5: You, we could cut rates, we could raise rates. Your

998
00:50:57,560 --> 00:51:00,560
Speaker 5: data dependent, I get it. Do you at the and

999
00:51:00,600 --> 00:51:03,080
Speaker 5: the FMC feel like there is where clarity that kind

1000
00:51:03,120 --> 00:51:05,120
Speaker 5: of where we are in the economy and where the.

1001
00:51:05,120 --> 00:51:06,319
Speaker 6: Trouble spots are. Well.

1002
00:51:06,360 --> 00:51:09,319
Speaker 11: I think there's more clarity on our reaction function, which

1003
00:51:09,360 --> 00:51:11,879
Speaker 11: is we are all committed to watching the data. We've

1004
00:51:11,880 --> 00:51:14,080
Speaker 11: been our models have not worked very well in the

1005
00:51:14,160 --> 00:51:16,360
Speaker 11: last few years, so we have to watch the actual

1006
00:51:16,360 --> 00:51:20,000
Speaker 11: inflation data that will guide us. We all agree on

1007
00:51:20,040 --> 00:51:23,800
Speaker 11: that now, whether inflation goes sideways or continues to fall,

1008
00:51:24,160 --> 00:51:26,640
Speaker 11: we have a range of perspectives on that. That's where

1009
00:51:26,680 --> 00:51:29,640
Speaker 11: the deviations lie. But our commitments are doing what we

1010
00:51:29,719 --> 00:51:32,480
Speaker 11: need to do. There's no deviation around the table.

1011
00:51:32,239 --> 00:51:34,239
Speaker 13: On that you're still paying a lot of attention to

1012
00:51:34,360 --> 00:51:36,560
Speaker 13: financial markets and how they are reacting to absolutely.

1013
00:51:36,600 --> 00:51:39,280
Speaker 11: I mean, it is a channel through which monetary policy

1014
00:51:39,320 --> 00:51:41,799
Speaker 11: affects the real economy. And when you know it took

1015
00:51:42,080 --> 00:51:45,600
Speaker 11: three negative inflation prints in a row, markets started to

1016
00:51:45,640 --> 00:51:48,560
Speaker 11: take that on board, and then one positive job report

1017
00:51:48,920 --> 00:51:50,200
Speaker 11: in euphoria returns.

1018
00:51:50,440 --> 00:51:52,719
Speaker 6: All right, I guess I forgot. Yeah, we got a wrap.

1019
00:51:52,760 --> 00:51:54,560
Speaker 13: You don't see all those people in the background Carol

1020
00:51:54,840 --> 00:51:56,120
Speaker 13: like that saying that that means wrap.

1021
00:51:56,280 --> 00:51:56,520
Speaker 7: Neil.

1022
00:51:56,600 --> 00:51:58,239
Speaker 6: Always great to talk to you, Great to see you.

1023
00:51:58,320 --> 00:52:01,920
Speaker 13: Thanks You'll Cash Minneapolis President live here at the Bilpit stage.

1024
00:52:04,000 --> 00:52:07,239
Speaker 3: Thanks for listening to the Balance of Power podcast. Make

1025
00:52:07,239 --> 00:52:10,200
Speaker 3: sure to subscribe if you haven't already, at Apple, Spotify

1026
00:52:10,320 --> 00:52:12,879
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1027
00:52:12,960 --> 00:52:16,640
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1028
00:52:16,680 --> 00:52:17,960
Speaker 5: Bloomberg dot com.