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Speaker 2: We just heard from President Biden describing what he said
Speaker 2: the hatred of the Holocaust brought back to life on
Speaker 2: October seventh when he said that Hamas unleashed terror on Israel,
Speaker 2: going on to describe what he called a quote ferocious
Speaker 2: surge of anti semitism around the world in the aftermath,
Speaker 2: saying too many people have been denying, downplaying, or rationalizing
Speaker 2: the horrors of the Holocaust, and October seventh, saying that's
Speaker 2: despicable and it must stop. He also touched on the
Speaker 2: right to free speech and peaceful protest, but he said
Speaker 2: there is no place on any campus or any place
Speaker 2: in America for hate speech or violence of any kind,
Speaker 2: whether against Jews or anyone else. He also said in
Speaker 2: this speech that he is calling on all Americans to
Speaker 2: stand united against anti Semitism and hate in all of
Speaker 2: its forms. We want to get reaction now to this
Speaker 2: speech on Bloomberg Television and Radio from Terry Haynes. He
Speaker 2: is the founder of Pangaea Policy and is with me now, So, Terry,
Speaker 2: I'm sure you are just hearing the words of the president. Obviously,
Speaker 2: this speech comes in a very tenuous political time for him,
Speaker 2: as he has been facing blame for what we're seeing
Speaker 2: happening on college campuses across the country, a lot of
Speaker 2: backlash in regard to his support and policy toward Israel.
Speaker 2: Did he do what he needed to do with this speech.
Speaker 3: Today, Well, I think he didn't hurt himself by the speech.
Speaker 3: A couple of things. Firstly, it's a fine and necessary
Speaker 3: thing for the president to do. In that sense, it's
Speaker 3: a very good thing, and as a citizen I applauded
Speaker 3: number one. Number two is somebody that knew Tom landis
Speaker 3: a little bit as an old congressional staff hand. I'm
Speaker 3: very glad to hear his name and his example raised
Speaker 3: up and discussed. I think the you know what the
Speaker 3: president needs to do is more than that. Though. Those
Speaker 3: are fine words, and I have no doubt that they
Speaker 3: are sincerely meant and sincerely delivered. At the same time,
Speaker 3: what you have in the President's government is the lack
Speaker 3: of really two things. One is, and this goes back
Speaker 3: to you know, before the current difficulties of the past
Speaker 3: six months or even the last week, You've got two problems.
Speaker 3: One is that the President needs to clearly state and
Speaker 3: work to persuade people of what the foreign policy of
Speaker 3: the United States is. This is really the first time
Speaker 3: in about eighty years, ever since the Second World War,
Speaker 3: that a unified view of foreign policy has been challenged,
Speaker 3: and it's one reason why it took six months to
Speaker 3: get aid for Ukraine, aid for Israel, aid for the
Speaker 3: Indo Pacific. The second thing you need to see is
Speaker 3: clear execution of that foreign policy. What we're getting in
Speaker 3: the current Middle East situation, I'm sorry to say, is
Speaker 3: a lot of muddle. And the suspicion is right from
Speaker 3: even among allies that what's happening is that the United
Speaker 3: States domestic politics are making it difficult for the United
Speaker 3: States to respond strong, forcefully, and consistently. And the President
Speaker 3: needs to use a lot of that sentiment that he
Speaker 3: just expressed in order to write that ship. I think.
Speaker 2: Well, and I wonder how much of the ability to
Speaker 2: write this ship is predicated on a temporary ceasefire goeriment
Speaker 2: being reached Terry not only helping it navigate the situation
Speaker 2: geopolitically in regard to what's happening in the Middle East,
Speaker 2: but also at home in terms of pacifying some of
Speaker 2: those who have been protesting against this warrant against this administration.
Speaker 3: My two cents is that you deal with the situation first,
Speaker 3: straight up, as is, and then you apply the politics
Speaker 3: to the situation. Other than applying the politics first and
Speaker 3: then dealing with the substance later. You've got an awful
Speaker 3: lot of concerning loose ends out there, in my estimation,
Speaker 3: loose ends about the degree to which the United States
Speaker 3: knew about what is now known as a Hamas counter offer,
Speaker 3: not an agreement, who knew about it, when they knew
Speaker 3: about it, and whether the United States was trying to
Speaker 3: pressure Israel into it when Israel had made it clear
Speaker 3: previously supposedly that they would not agree with those terms.
Speaker 3: You know, there's a publicly it looks like what's happening
Speaker 3: is that the United States is trying to buffalo Israel
Speaker 3: a little bit through armed shipments, through rhetoric, and a
Speaker 3: bunch of other things. This is a pretty good time
Speaker 3: whatever else for the United States and Israel strong allies
Speaker 3: to get back on the back on the same foot together,
Speaker 3: and hopefully we see evidence of that in the next days.
Speaker 2: Well, of course Biden is still at this event, Terry.
Speaker 2: He is actually sitted seated right next to the Speaker
Speaker 2: of the House, Mike Johnson. In the House has passed
Speaker 2: some anti semitism legislation just last week regarding the definition
Speaker 2: of anti semitism, a broadening of it is specifically as
Speaker 2: it's applied by the Department of Education. Raised a lot
Speaker 2: of concerns about free speech. Should we expect that that
Speaker 2: legislative effort or any others to combat and anti semitism
Speaker 2: can actually make it through both chambers, knowing it's unclear
Speaker 2: at this time what the Senate's going to do with
Speaker 2: that particular piece of legislation.
Speaker 3: Oh, I expect it will. It's it's difficult to you know,
Speaker 3: from looking at it from a politician's perspective, it's difficult
Speaker 3: to argue that what you shouldn't do is is expressed
Speaker 3: as strongly as possible. You know your your opposition to
Speaker 3: anti semitism in all its forms. At the same time,
Speaker 3: you know the President's quite right to say that the
Speaker 3: government response by itself as much, you know, won't do
Speaker 3: the job. And you know is I'm I'm not Jewish,
Speaker 3: but I know will believe that. You know, governmental statements
Speaker 3: are well and good and fine, but that's not the
Speaker 3: sole solution and won't by itself fix the problem. But
Speaker 3: you have a situation here where you know the government
Speaker 3: will do things certainly, but at the same time, you know,
Speaker 3: the more pressing question is not just anti semitism at home,
Speaker 3: but it's also what the administration does abroad. And my
Speaker 3: assessment is the United States needs to be a lot
Speaker 3: clearer about what they expect, how they expect it, and
Speaker 3: why they expect it in the Middle East, and also
Speaker 3: at the same time do things that help the broader
Speaker 3: peace process that involves Saudi and Jordan and a bunch
Speaker 3: of other nations along. That's a difficult balancing act. I
Speaker 3: don't say it because it's easy, but that's the task
Speaker 3: before the administration.
Speaker 2: Well, and we'll see if they ultimately are able to
Speaker 2: complete that task in its entirety. Terry, there is a
Speaker 2: separate piece of breaking news I do want to get
Speaker 2: your take on as well. We just got from two
Speaker 2: TikTok a filed petition in federal court suing the US
Speaker 2: government as expected over that divest or ban bill that
Speaker 2: was passed as part of the Supplemental Package by both
Speaker 2: chambers of Congress and signed into law by President Biden.
Speaker 2: TikTok says it is seeking to overturn what it calls
Speaker 2: a quote constitutional TikTok ban. They say a standalone US
Speaker 2: platform would not be commercially viable and that a qualified
Speaker 2: divestiture is not possible.
Speaker 4: Terry, how do you see all of this going down?
Speaker 2: TikTok, pointing out here the law would force a shutdown
Speaker 2: of the app by January nineteenth of twenty twenty five.
Speaker 4: Is this going to be legally resolved by then?
Speaker 3: You know, I think it probably by January of twenty
Speaker 3: twenty five. I think it's more more likely than not
Speaker 3: that it's not completely resolved. They will, you know, they'll
Speaker 3: they'll use all their legal tools, including appeals to the
Speaker 3: Supreme Court and the like to do that. And we're based,
Speaker 3: so we're basically talking about less than nine months in
Speaker 3: order to achieve that. So, you know, I doubt that
Speaker 3: that happens in the end. The other thing, I'll say
Speaker 3: about this is from a perspective as an old communications
Speaker 3: lawyer and a telecom advisor in both Congress and at
Speaker 3: the FCC, where I was a presidential appointee once upon
Speaker 3: a time that you know, I don't find TikTok's views
Speaker 3: here persuasive at all. First Amendment rights fundamentally are those
Speaker 3: expressed and held and used by citizens. There are limited
Speaker 3: First Amendment rights for corporations.
Speaker 5: And the like.
Speaker 3: But you know, the net of this is that nobody's
Speaker 3: speech rights are are being affected negatively in any way.
Speaker 3: If TikTok goes away, they you know, just liked in India,
Speaker 3: they'll migrate to other apps, and you know you'll be.
Speaker 6: Done with it.
Speaker 3: But the core of this issue here isn't speech at all.
Speaker 3: It's national security. And you know, TikTok and the Chinese
Speaker 3: government beyond it probably don't want a situation where the
Speaker 3: United States government starts talking about exactly how TikTok uses
Speaker 3: its app. And you know, even if it's done behind
Speaker 3: closed doors, the least that will happen is that TikTok
Speaker 3: itself and the Chinese government will be somewhat embarrassed by that.
Speaker 3: So it may well be that what happens is you
Speaker 3: say you have a teeth gnashing today in a legal sense,
Speaker 3: but in the end they divest or they shut down.
Speaker 2: Well, and of course a divestiture, to your allusion to
Speaker 2: the Chinese government terry would need to be signed off
Speaker 2: on by China, and I wonder if that really is
Speaker 2: the rub here, is if the CCP is going to
Speaker 2: be signing off on this or not.
Speaker 3: Yeah, well they you know, I think they'll probably push
Speaker 3: as hard as they can to the contrary, not only
Speaker 3: because you know, they want to continue the operations that
Speaker 3: they're using the app for in the United States, but
Speaker 3: they want to do so in other countries as well,
Speaker 3: So you know, yeah, they'll try to push back on
Speaker 3: that as much as possible. But you know, just like
Speaker 3: in the in the United States, you can't have foreign entities,
Speaker 3: you know, even owning broadcasts channels, foreign governments and the like.
Speaker 3: You know, the United States government also is not going
Speaker 3: to stand for situations where data scraped and used for
Speaker 3: whatever purposes by a foreign government that's thought of as
Speaker 3: best as a competitor and worst as somewhat less than
Speaker 3: openly hostile. So what you have is a situation where
Speaker 3: where the Chinese government is, is you know, much more
Speaker 3: between a rock and a hard place than I think
Speaker 3: the United States government is. Frankly all right.
Speaker 2: Terry Haynes, founder of PINAGEA Policy, thank you so much
Speaker 2: for joining not just on this news from the lawsuit
Speaker 2: from TikTok, but also of course after President Biden delivered
Speaker 2: his remarks on anti Semitism from Capital Hill.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
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Speaker 2: We're awaiting the latest from Capitol Hill after the second
Speaker 2: meeting in as many days between the Speaker of the
Speaker 2: House Mike Johnson and Congressman Marjorie Taylor Green of Georgia,
Speaker 2: who of course has threatened to act on her motion
Speaker 2: to vacate the speaker as soon as this week. Before
Speaker 2: the meeting that was scheduled for twelve thirty pm today,
Speaker 2: she said she's clear in what her demands to Mike
Speaker 2: Johnson are. She would like to see the Hastart rule followed,
Speaker 2: which means a majority of the majority must support any bill.
Speaker 2: She wants no more funding for Ukraine, to defund the
Speaker 2: special counsels who are looking in to former President Donald Trump,
Speaker 2: and avoid a shutdown before the election by passing ACR
Speaker 2: to automatically enact a one percent spending cut. The question
Speaker 2: is what leverage does the congresswoman have over the speaker?
Speaker 2: Is he likely to agree to any of this, especially
Speaker 2: when Democrats have said that they will act to table
Speaker 2: emotion to vacate if indeed it is brought forward. So
Speaker 2: we want to get reaction to all of this now
Speaker 2: from inside the Republican Conference, I'm pleased to say joining
Speaker 2: me here on Bloomberg Television and Radio live from Capitol
Speaker 2: Hill is Congressman Byron Donald's, the Republican from Florida. Congressman,
Speaker 2: welcome back to Bloomberg. It's great as always to have you.
Speaker 2: What is your understanding as to what could go down
Speaker 2: in your chamber in regard to this motion to vacate
Speaker 2: in the coming days.
Speaker 7: Well, I think what's likely is that the emotion will
Speaker 7: be tabled by large amounts of the Republican Conference and
Speaker 7: from what we're hearing members of the Democrat conference. Look
Speaker 7: at the end of the day, there have been questions
Speaker 7: from many Conservatives about a lot of the bills that
Speaker 7: have passed on the House floor, where a majority of
Speaker 7: Democrats who have been voting for those measures. But I
Speaker 7: believe that right now going through a battle for the
Speaker 7: speakership is not in the best centries of the Republican
Speaker 7: Conference or in Congress overall. I think at the end
Speaker 7: of the day, it's gonna get tabled and then we're
Speaker 7: gonna move on. We're gonna move on to the appropriations
Speaker 7: process for the next fiscal year.
Speaker 2: Congressman, is this so much about Democrats being willing to
Speaker 2: protect the House speaker, which may be the thing that
Speaker 2: keeps him with the gabble in hand, or about the
Speaker 2: support from former President Donald Trump to what extent does
Speaker 2: he influence the outcome here?
Speaker 7: I think President Trump has made his views known that
Speaker 7: he doesn't want to see the House go through this
Speaker 7: motion of vacate process right now. So I think right
Speaker 7: now you have a lot of people up here on
Speaker 7: both sides of the aisle who just want to basically
Speaker 7: get to the election season and let the American people
Speaker 7: have their voices heard about which way they want Washington
Speaker 7: to go. Do we want to continue to go down
Speaker 7: the line of the crazy agenda of Joe Biden and
Speaker 7: the Democrats that's led to massive open borders, massive inflation
Speaker 7: on the or of World War III? Or do we
Speaker 7: want to go back to Trump era policies which actually
Speaker 7: improved wages in our country, kept inflation low, led to
Speaker 7: a more peaceful planet across the board, and actually secured
Speaker 7: our nation. And so that's what that's the conversation I
Speaker 7: think every member on Capitol Hill wants to have. I
Speaker 7: think we're probably going to get to that. We're definitely
Speaker 7: going to get to it. I think the motion of
Speaker 7: VAKA is probably going to get tabled in the process.
Speaker 2: Well, Congressman, you just mentioned there the border, which of
Speaker 2: course is something that your conference has focused immensely on
Speaker 2: in passed HR two, though with no Democratic support, never
Speaker 2: got the chance to vote on that bipartisan border deal
Speaker 2: that was reached between Senate negotiators and the White House.
Speaker 2: President Biden has though expressed interest in doing something on
Speaker 2: the border legislatively, trying perhaps that effort again. Do you
Speaker 2: expect you will have a chance to vote on something
Speaker 2: else before the election.
Speaker 7: No, no, I don't, because what Joe Biden wants to
Speaker 7: do is play politics with the issue of securing our nation.
Speaker 7: Even the bill that was in the Senate, that was
Speaker 7: pure politics. The Senate didn't even bring it up for
Speaker 7: a vote. That's how toxic that bill was. And so
Speaker 7: the reality is is that what Joe Biden wants to
Speaker 7: do is give a fig leaf, give a patina to
Speaker 7: the American people right before the election, to demonstrate that
Speaker 7: he cares about securing the border. The truth is he
Speaker 7: does not. He never has because if he cared about
Speaker 7: border security, he would have worked with Republicans at any
Speaker 7: point over the last eighteen months, he has refused to
Speaker 7: do that, and over the course of his entire presidency,
Speaker 7: we've now seen anywhere from eight to ten million illegal
Speaker 7: immigrants come into the United States. So he doesn't care
Speaker 7: about the border. He uses it for his own political gain,
Speaker 7: and now he wants to do something right before the
Speaker 7: election because his poll numbers suck because he's been worse
Speaker 7: at his job.
Speaker 2: Well, of course, he had been working with one Republican
Speaker 2: at lease, Senator James Langford, who helped negotiate that bipartisan
Speaker 2: border deal. But moving on, Congressman, there is another issue
Speaker 2: with which the president has been grappling. In fact, he's
Speaker 2: on Capitol Hill today. I understand you are there at
Speaker 2: his remarks, but he did give an address on anti semitism,
Speaker 2: talking about how there is a freedom to free speech
Speaker 2: in this country, not though room for hate speech or
Speaker 2: violence on college campuses. Given what we are seeing across
Speaker 2: the country, including schools like GW where I know you yourself
Speaker 2: visited here in Washington, what else would you like to
Speaker 2: see be done to address this issue?
Speaker 4: Is the speech itself.
Speaker 7: Enough No, the president's speech is not enough. It's nine
Speaker 7: or ten days too late. Well, why are we surprised?
Speaker 7: Joe Biden is no leader. He's late to every crisis
Speaker 7: that faces our country, including the rise of anti semitism
Speaker 7: from the radical democratic left. So no, the speech is
Speaker 7: simply not enough. What we should be talking about right
Speaker 7: now is the fact that you have students whose civil
Speaker 7: rights have been violated. So these schools which do not
Speaker 7: take campus securities seriously, we should be invoking Title six
Speaker 7: of the nineteen sixty four Civil Rights Acts, and we
Speaker 7: should be defunding these institutions if they're not going to
Speaker 7: protect the civil rights of students. It's that simple. And
Speaker 7: this goes back very clearly if you go back to
Speaker 7: the Civil Rights era. The reason why Title six was
Speaker 7: put into the Civil Rights Acts is because you have
Speaker 7: black students whose civil rights were not being protected on
Speaker 7: college campuses. So if it was good enough, then it
Speaker 7: should be good enough.
Speaker 6: Now.
Speaker 2: Well, Congressman, when we think more widely about what many
Speaker 2: of these protests have emanated from, Obviously it is the
Speaker 2: ongoing conflict between Israel and Hamas and Gaza, where we
Speaker 2: have seen tens of thousands of Palestinian lives lost. There
Speaker 2: are questions now as to whether or not Israel will
Speaker 2: be moving forward with a further ground invasion into Rafa,
Speaker 2: potentially resulting in more loss of civilian life. Would you
Speaker 2: be supportive of any alteration to US policy toward Israel
Speaker 2: if Israel were to do that when the administration has
Speaker 2: warn't against doing so, conditioning aid for example, No.
Speaker 7: I don't think we should do that. This is something
Speaker 7: where Harmas committed a a disgusting atrocity against the people
Speaker 7: of Israel on October seventh, and so what the United
Speaker 7: States government should do is stand behind its ally. If
Speaker 7: Hamas refuses to surrender. That is because Hamas is a
Speaker 7: terrorist organization that literally hides behind women and children in Gaza.
Speaker 7: They would prefer to see Palestinians die so that Harmas
Speaker 7: can live. I know that's very strong language for your network,
Speaker 7: but those are That's the truth of what's happening overseas,
Speaker 7: and so Hamahs should have surrendered long ago. The only
Speaker 7: reason why they haven't surrendered to this point is because
Speaker 7: they are getting political coverage from a lot of news
Speaker 7: stations around the world and from the radical left in
Speaker 7: the Democrat Party who continue to give them cover. When
Speaker 7: it comes to the Palestinians and Gaza who have died
Speaker 7: in this conflict. Nobody wants to see the loss of life.
Speaker 7: But when you have Hamas hide behind women and children,
Speaker 7: using them as human shields, there is going to be
Speaker 7: loss of life. And they do that for one very
Speaker 7: important reason. Hamas hides behind women and children because they
Speaker 7: believe that Israel will weaken and not follow through with
Speaker 7: eliminating Hamas. But Israel's resolve is high. They should continue
Speaker 7: the incursion in Tarafa as we speak. They should not
Speaker 7: stop from doing that, because if you let Hamas hide
Speaker 7: behind women and children and then rebuild themselves by sending
Speaker 7: aid over there, which, by the way, hamas right now
Speaker 7: is stealing the aid for their own purposes from the
Speaker 7: Palestinian people. If you allow them to survive, you're only
Speaker 7: going to invite more attacks in the future. I think
Speaker 7: Israel's doing the right thing. They should proceed forward, and
Speaker 7: the White House, led unfortunately by Joe Biden and the
Speaker 7: Secretary of State mister Blincoln, they should stand behind our ally,
Speaker 7: not behind hamas well.
Speaker 2: Congressman, do you not think the White House has done
Speaker 2: that to this point, considering we have not seen conditions
Speaker 2: put on aid, and we have heard many times expressed
Speaker 2: by Biden and other officials within the administration that the
Speaker 2: US alliance with Israel is ironclad.
Speaker 7: Listen, we've heard the words from the Biden administration, but
Speaker 7: when you go into where they've been talking with the
Speaker 7: Israeli government behind closed doors, what you've seen is then
Speaker 7: putting pressure on Israel, trying to get them to change
Speaker 7: the battle plans that the IDF is going through right now.
Speaker 7: They've been saber rattling to Israel, saying that there are
Speaker 7: certain conditions that the United States wants to see and
Speaker 7: how they proceed in this conflict. That is not the
Speaker 7: appropriate response from our government. That is a cowering response
Speaker 7: from our government, which is sad to see because at
Speaker 7: the same time, you have the Biden administration is back
Speaker 7: channeling to the Iranian regime, trying to cut a new
Speaker 7: Iranian deal with that regime. And we all know that
Speaker 7: the Iranians are the backstop for Hamas. Hamas is a
Speaker 7: puppet regime of Iran. And so when you have Tony
Speaker 7: Blincoln and President Biden going behind closed doors to back
Speaker 7: channel to the Uranians and then also to limit what
Speaker 7: Israel can do, then I would tell you no, the
Speaker 7: speeches might sound good, but what's happening in reality has
Speaker 7: not been good and not supportive of Israel.
Speaker 2: Congressman, your displeasure with the way that this president has
Speaker 2: conducted himself in regard to this conflict is well noted.
Speaker 2: I would like to ask you, though, about the former
Speaker 2: president with whom I know you have a close relationship.
Speaker 2: I'm sure this will come as no surprise to you
Speaker 2: that your name has come up quite repeatedly in terms
Speaker 2: of who may potentially be Donald Trump's vice presidential candidate
Speaker 2: join him on the ticket.
Speaker 4: Come November.
Speaker 2: What conversations have you had, if not with him, with
Speaker 2: others on his team about that.
Speaker 7: There's really not been any conversations. I think everybody is
Speaker 7: aware of kind of what this the short list is
Speaker 7: to use your language, But what we're focused on is
Speaker 7: making sure that the Trump campaign is in the best
Speaker 7: position possible to retake the White House this November. Look,
Speaker 7: whatever President Trump decides to do when it comes to
Speaker 7: the vice presidency, I'm gonna fully support because I just
Speaker 7: want to win and get our country back on track.
Speaker 7: We have an amazing country if our leadership is actually
Speaker 7: smart and gets out of the way of the American people.
Speaker 7: I think four years ago the American people were lied to.
Speaker 7: Joe Biden said that the adults were going to be
Speaker 7: in the room, and the adults are going to come
Speaker 7: back to Washington, DC. But what we have seen in
Speaker 7: the last three and a half years is the most
Speaker 7: disastrous policy, both domestically and on a foreign policy basis,
Speaker 7: our country has ever seen. Joe Biden is the master
Speaker 7: of disaster and he needs to go whoever the vice
Speaker 7: president is, that'll be fine. President Trump's gonna make that decision.
Speaker 7: I will support that. But we got to get our
Speaker 7: country back on track. The American people deserve no less,
Speaker 7: and our allies deserve no less.
Speaker 2: Great Congressman Iron Donald, the Republican from Florida, thank you
Speaker 2: so much for joining us on Bloomberg Television and Radio
Speaker 2: live from Capitol Hill. We appreciate your time, sir, and
Speaker 2: we want to get a bit of reaction now from
Speaker 2: our political panel. And pleased to say Genie Shanz, a
Speaker 2: no Bloomberg Politics contributor, is joining me alongside Republican strategist
Speaker 2: Lester Months and co head of the International Group at BGR.
Speaker 4: So Lester, if I could just first go to you.
Speaker 2: Obviously, a lot of criticism of the Biden administration dealt
Speaker 2: there by Congressman Donald's. At the same time, while Biden
Speaker 2: is navigating the situation with Israel, Donald Trump is spending
Speaker 2: his days, including today, in court in New York. When
Speaker 2: a voter is considering these two choices, potentially disagreements over
Speaker 2: policy versus something about character. What will win out in November?
Speaker 8: What a wonderful question. I don't think we know yet.
Speaker 8: This is a pretty close election. I think mister Donald's
Speaker 8: just demonstrated why he's on that list. That was a
Speaker 8: lot of forceful messages, master of disaster, as he called
Speaker 8: Joe Biden. He's he would be a great you know,
Speaker 8: just objectively, you're looking for an attack dog vice presidential candidate,
Speaker 8: he would be terrific. He hit all the marks that
Speaker 8: those messages resonate with Republicans. That's that's going to help
Speaker 8: Donald Trump, who might be trapped in a courtroom for
Speaker 8: the next few months, either in New York or in
Speaker 8: Florida or DC. He's going to be trapped in courtrooms
Speaker 8: Byron Donalds. Could is one of the people who could
Speaker 8: be out there, you know, bringing the attack on behalf
Speaker 8: of the former president. I thought that was pretty effective.
Speaker 2: Well, Genie, when you consider what exactly the attacks were,
Speaker 2: everything from the way that he has conducted his Israel
Speaker 2: policy to the way that he has handled the situation
Speaker 2: on the US border. Are these not two issues that
Speaker 2: are actually among perhaps the highest ranking in terms of
Speaker 2: what's going to be weighing down Joe Biden's re election effort.
Speaker 9: They are. And the third one, of course, would be
Speaker 9: the economy and inflation. And so he did hit those
Speaker 9: talking points. You know, Unfortunately, the veracity of some of
Speaker 9: what he said was not something that many people who
Speaker 9: have looked, for instance, at the Jim Langford bill on
Speaker 9: border security would agree with. You know, he talked about
Speaker 9: it as if it was, you know, Joe Biden's bill
Speaker 9: uninterested in border security. Well, you asked Jim Langsford, you
Speaker 9: asked the Wall Street Journal, this conservative editorial board. They
Speaker 9: described it as the most conservative security bill, not an
Speaker 9: immigration bill, that we had seen in a hundred years.
Speaker 9: And so, of course it was the House of Representatives,
Speaker 9: the Republicans who punted on that because it wasn't in
Speaker 9: Donald Trump's interests as it pertains to the election in November.
Speaker 9: He didn't want Joe Biden to get a win on
Speaker 9: that before the election. So you know, yes, is he
Speaker 9: making good talking points on behalf of Donald Trump. Absolutely,
Speaker 9: But when it comes to governor, big, big questions have
Speaker 9: to be asked, you know, just going back to the
Speaker 9: issue of Israel, for instance, I listened to Joe Biden
Speaker 9: speak carefully. He talked about an iron cloud commitment to Israel,
Speaker 9: and I'm not sure how that could be questioned at
Speaker 9: this point.
Speaker 4: All right.
Speaker 2: Jeanie Shanzo, Bloomberg Politics contributor and Lester Munson of BGR
Speaker 2: Group wish we had more time with you both today,
Speaker 2: but thank you so much.
Speaker 1: As always, you're listening to the Bloomberg Balance of Power podcast.
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Speaker 2: Welcome to Balance of Power on Bloomberg Television and Radio,
Speaker 2: where the markets, of course trading all day with no break.
Speaker 2: There is a break, however, up in New York in
Speaker 2: the trial of Donald Trump, the criminal hush money trial
Speaker 2: that is is on the lunch break until the end
Speaker 2: of this hour. But before that break started, we got
Speaker 2: multiple hours of ten testimony from porn stars Stormy Daniels,
Speaker 2: who of course has been in focus in this case.
Speaker 2: She was the recipient of this one hundred and thirty
Speaker 2: thousand dollars hush money payment that prosecutors alleged was intended
Speaker 2: to influence the results of the twenty sixteen election in
Speaker 2: Donald Trump's favor, and of course that the payments to
Speaker 2: Michael Cohen, the fixer who made the payments to Stormy Daniels,
Speaker 2: were misclassified improperly as legal fees thus the charges of
Speaker 2: falsification of business records. We want to get more now
Speaker 2: with June Grosso, who of course is the host of
Speaker 2: Bloomberg Law, has been following this trial incredibly closely, So June,
Speaker 2: it's unclear what else we'll hear from Stormy Daniels when
Speaker 2: the lunch break returns. How much longer she could be
Speaker 2: on the witness stand. Have we gotten though, all of
Speaker 2: the details that really prosecutors likely wanted to get at
Speaker 2: from her.
Speaker 10: Well, it's hard to know because I don't know what
Speaker 10: else she has they have that she could testify to.
Speaker 10: But the most important thing, and she's talking about it now,
Speaker 10: is the hush money trial, and they certainly have gotten
Speaker 10: into that also. I think what's in important for prosecutors is,
Speaker 10: you know, the jurors have been hearing Stormy Daniels, Stormy
Speaker 10: Daniels to this whole trial. They want, you know, the
Speaker 10: jury to meet Stormy Daniels and also to talk about
Speaker 10: the sexual encounter she had with Donald Trump, which she
Speaker 10: recounted in great detail. And what they want is to
Speaker 10: show the jury why Donald Trump wanted to keep this
Speaker 10: so secret, desperately didn't want it coming out before the election.
Speaker 10: And when you hear some of the details she gives,
Speaker 10: you can imagine that this is something that someone running
Speaker 10: for president would not want to be out there. I mean,
Speaker 10: he said things like, first of all, he asked her
Speaker 10: a lot of intimate questions, and he said at one point,
Speaker 10: do you remind me of my daughter? So this whole
Speaker 10: scenario is unsavory, and that's putting it mildly, and it's
Speaker 10: a good reason for Donald Trump to want it to
Speaker 10: stay out of the public eye.
Speaker 2: Yeah, well, when it comes to some of the detail,
Speaker 2: of course, the judge had previously ruled that not all
Speaker 2: of the sexual detail needed to be born out by
Speaker 2: Stormy Daniels on the witness stand, though certainly she did
Speaker 2: get into.
Speaker 4: Some of it. But she got into a lot of
Speaker 4: this positions.
Speaker 10: Right because she talked so fast. From everyone I've been hearing,
Speaker 10: she talks so fast that it comes out before, you know,
Speaker 10: minutes too late. And the defense hasn't been objecting that much.
Speaker 10: But you got a lot of detail. I don't know
Speaker 10: what other details she could have really talked about. So
Speaker 10: I think that the judge I understand that he was
Speaker 10: none too happy. And this is a very even tempered
Speaker 10: judge not much gets him, you know, concerned, but he
Speaker 10: was unhappy about this thing and sounded as if he
Speaker 10: was losing his temper a little bit.
Speaker 11: So.
Speaker 2: Of course, the detail of the actual sexual sexual encounter
Speaker 2: June is one thing. The detail on the actual NDA
Speaker 2: and the payment is another. Before the break, we did
Speaker 2: hear Daniels talking about that non disclosure agreement.
Speaker 4: She said that it was intended to keep information secret.
Speaker 2: She was asked by the prosecutor who the beneficiary of
Speaker 2: the NDA was. She answered Donald Trump, adding that it
Speaker 2: was arranged by Michael Cohen. She went on to say
Speaker 2: she had wanted the deal done by October fourteenth, prior
Speaker 2: to the November twenty sixteen election, because she was afraid
Speaker 2: if it wasn't done before the election that she would
Speaker 2: not be safe. And she raierated that the deal was
Speaker 2: for one hundred and thirty thousand dollars, that she could
Speaker 2: not tell the story and he could not contact her.
Speaker 2: Of course, another name, though, has come up in that
Speaker 2: testimony from Daniels, which is Michael Cohen June, who we
Speaker 2: have yet to hear from.
Speaker 4: How could her.
Speaker 2: Testimony and his ultimately be attempted to be pieced together
Speaker 2: by the prosecution.
Speaker 10: Well, so a lot of the witnesses that we've heard
Speaker 10: from up until this point from the prosecution, are there
Speaker 10: to buttress what Michael Cohen is going to testify. You know,
Speaker 10: as I've said, Michael Cohen is comes to the courtroom
Speaker 10: with a lot of baggage, a lot of ways for
Speaker 10: the defense to attack his testimony. I mean, we could
Speaker 10: count them many ways. So he is a witness whose
Speaker 10: credibilities has to be bolstered by the prosecution, and they're
Speaker 10: going to do that with documents, but also with some
Speaker 10: of the testimony, for example, the testimony that she's giving
Speaker 10: about how Michael Cohen set this up and how also
Speaker 10: how she was afraid she wouldn't get paid before the election,
Speaker 10: and you know, we have that whole thing about how
Speaker 10: Michael Cohen was trying to get the payment and finally
Speaker 10: had to put it up, you know, with an equity
Speaker 10: loan on his own home. So all these little things
Speaker 10: are going to be brought together by the prosecution, or
Speaker 10: at least they hope it'll be brought together in one
Speaker 10: big piece where the jury will say, well, he has
Speaker 10: his problems.
Speaker 4: He has a lot of problems.
Speaker 10: You know, he perjured himself and all this, but he's
Speaker 10: backed up by all these witnesses and by all this
Speaker 10: paper that we have here. So I think that's what
Speaker 10: the prosecution is tempting to do with her testimony. But also,
Speaker 10: as I said, you know, they're also getting in a
Speaker 10: lot of sort of details about Donald Trump that might
Speaker 10: disturb some jurors because they come off as slazy. So
Speaker 10: who knows what the jurors are thinking at this point.
Speaker 2: Yeah, of course I will wait and see ultimately how
Speaker 2: this jury rules whether or not or decides he's convicted
Speaker 2: or acquitted. The prosecution has said it it does expect
Speaker 2: it could be calling witnesses for another two weeks, so
Speaker 2: it could be weeks still until this whole affair wraps up.
Speaker 2: June Grasso, host of BLOOMBERGLAS, thank you so much, as
Speaker 2: always for your expert insight and analysis as to what
Speaker 2: exactly is happening in the courtroom in New York. And
Speaker 2: of course, what happens in this trial in New York
Speaker 2: has broader ramifications considering this is not just a former
Speaker 2: president Donald Trump on trial, but current presumptive Republican nominee
Speaker 2: who is actively campaigning to once against it.
Speaker 4: In the Oval Office.
Speaker 2: So we want to talk now more about how this
Speaker 2: case factors into voter opinion as we get closer and
Speaker 2: closer to that vote in November, and bring in Cliff Young.
Speaker 2: He is US Public Affairs President IPSOS and is joining
Speaker 2: me here in our Washington, d C.
Speaker 4: Studio.
Speaker 2: Cliff, always great to see you. Thank you so much
Speaker 2: for coming back to Bloomberg. If we just start with
Speaker 2: the impact of this trial or potential impact ultimately of
Speaker 2: the verdict if Donald Trump is convicted, and then depending
Speaker 2: on potentially whatever the sentence is after that conviction, how
Speaker 2: does that impact as odds of winning in November.
Speaker 12: Well, first and foremost, we don't know, because it is
Speaker 12: the future and they're sort of extraordinary events. They're not
Speaker 12: events that we can sort of compare to in the past.
Speaker 12: We don't have a database of convicted former presidents that
Speaker 12: we can draw from. But we do test things, We
Speaker 12: experiment on these sorts of issues in our polling, and
Speaker 12: what we do find is a conviction and more importantly,
Speaker 12: a conviction and prison time has an effect on the
Speaker 12: margins that it basically sort of rattles moderate Republicans, They
Speaker 12: sort of migrate to undecided That doesn't mean they wouldn't
Speaker 12: come back again if the messages were right, But without
Speaker 12: a doubt, this sort of event probably, like I said,
Speaker 12: has an effect on the margins, is.
Speaker 2: That more that would be Trump voters would be more
Speaker 2: likely to gravitate towards say an alternate choice, a third
Speaker 2: party candidate, or that they actually would then go out
Speaker 2: and vote for Joe Biden, because there is a difference there.
Speaker 12: I don't think there's any sort of world where a
Speaker 12: Trump voter would decide not to vote for him and
Speaker 12: then vote for Biden. There's a likelihood that they migrate
Speaker 12: to a third candidate RFK as an example, but more
Speaker 12: than likely they would not vote at all. They just
Speaker 12: stay home and just wait for the next election.
Speaker 2: So ultimately, Cliff, a lot of this is probably not
Speaker 2: about that base Trump voter who would be voting for
Speaker 2: him no matter what, or certainly not voting for someone
Speaker 2: else who isn't him, versus a base Biden voter who
Speaker 2: is already committed to voting for the Democratic candidate. It's
Speaker 2: about that basket of undecided, and I just wonder how
Speaker 2: big that basket realistically is and whether or not we're
Speaker 2: talking about that undecided group potentially growing larger because of
Speaker 2: issues like this or others that more people become person waitable.
Speaker 12: Yeah, this is a very uncertain electoral cycle. So already
Speaker 12: from the get go we have between fifteen to twenty
Speaker 12: percent of the population, depending how we ask the question,
Speaker 12: I'm unsure about their answer about how they would vote.
Speaker 12: This obviously increases as the legal troubles sort of expose
Speaker 12: themselves over time. They hurt Trump specifically. I think it
Speaker 12: probably translates more into not showing up and voting than
Speaker 12: somehow someone changing their vote and voting for the other side.
Speaker 12: But obviously we will see.
Speaker 2: Well on that note of really ultimately it being about
Speaker 2: who turns out and actually decides to cast a vote.
Speaker 4: In November, you did.
Speaker 2: Some polling with ABC that came out just a few
Speaker 2: days ago that did suggest looking at the headline of
Speaker 2: just you know, American voting age people, donald Trump is leading.
Speaker 2: When you narrow that basket to likely voters, it's Joe
Speaker 2: Biden that is ahead. So how should we be thinking
Speaker 2: about the turnout elements of this? And ultimately, when we're
Speaker 2: seeing Donald Trump leading consistently across national pulling swing state
Speaker 2: polling as well, including our own here at Bloomberg. How
Speaker 2: turnout is ultimately going to factor in whether he's as
Speaker 2: strong with people who are actually going to show up.
Speaker 12: Yeah, we have to be very careful right now looking
Speaker 12: at sort of likely voters, that is, those who are
Speaker 12: going to show up on election day or vote in
Speaker 12: the election. It's fuzzy at best. We're six months out,
Speaker 12: but it is suggestive that Trump has a lot of
Speaker 12: voters on the ledge, on the fence. There's uncertainy about him.
Speaker 12: There's uncertainly because of illegal troubles and frankly because of
Speaker 12: many of those sort of related sort of issues that
Speaker 12: could work itself out over the course of electoral cycle.
Speaker 12: But today, when you look at likely voters, they like
Speaker 12: Biden more than they like Trump.
Speaker 2: Well, Biden has his own share of issues though as well,
Speaker 2: while Donald Trump has legal problems. We saw Joe Biden's
Speaker 2: perhaps on full display today when he was at Capitol
Speaker 2: Hill giving a speech on anti Semitism. As we're seeing
Speaker 2: college campuses across the country royaled by protests many who
Speaker 2: are unhappy with his handling of.
Speaker 4: His policy toward Israel.
Speaker 2: Given the high civilian death toll in Gaza, how much
Speaker 2: is that going to influence more so than other issues
Speaker 2: like the economy or immigration, voters who are deciding whether
Speaker 2: or not to show up in November for Biden.
Speaker 12: Yeah, I really think that Gaza and Israel is a
Speaker 12: false negative. Let's call it for Biden, It's not the issue.
Speaker 12: The real issue is actually inflation, and younger Americans really
Speaker 12: hit by high price levels, like minorities as well. When
Speaker 12: we look specifically at the data, we put sort of
Speaker 12: Gaza on the one hand, inflation on the other. Across
Speaker 12: all demographics, inflation wins out in terms of the number
Speaker 12: one issue, though number one worry, and that's really a
Speaker 12: Biden's achilles heel today. It's inflation.
Speaker 2: Well, you mentioned young people specifically, who of course have
Speaker 2: really been at the heart of a lot of this
Speaker 2: protest activity, and so to hear that maybe it is
Speaker 2: perhaps more about the economy for them than other issues.
Speaker 2: Your point is well taken. Yet, in the primaries, the
Speaker 2: Democratic primary we have seen across a number of states,
Speaker 2: Michigan perhaps most predominantly comes to mind, given its importance
Speaker 2: as a swing state of primary voters choosing uncommitted or
Speaker 2: something to that effect. Different languages depending on what state
Speaker 2: we're talking about, but actively choosing not to vote for
Speaker 2: Joe Biden in the primary. Are you saying that that
Speaker 2: protest vote over Israel policy is limited to the primary,
Speaker 2: isn't likely to be as much of a factor in
Speaker 2: the general.
Speaker 12: Now, I was saying that inflation is more important, Okay,
Speaker 12: And to understand sort of where younger Americans stand. It's
Speaker 12: really about inflation. It's not about Gaza and Israel. That's
Speaker 12: not to say that you can have a specific effect
Speaker 12: in a specific state. We know all these elections are
Speaker 12: very very close. That's not to say that once again
Speaker 12: on the margins, that the issue can't have an effect,
Speaker 12: But when looking overall, it's really about inflation today. Biden's
Speaker 12: problem is bringing those constituencies most affected by inflation back
Speaker 12: into the fold.
Speaker 4: Would one of.
Speaker 2: Those constituencies include black voters, Because we've also seen some
Speaker 2: ipsos pulling with the Washington Post on the idea that
Speaker 2: fewer black voters say they're highly likely to turn out
Speaker 2: and vote in November this time around. I believe it's
Speaker 2: twelve points less than in twenty twenty.
Speaker 12: It's very worrisome. Indeed, it's not just black voters. It's
Speaker 12: Latinos as well. Those two constituency groups have been very
Speaker 12: important for Democrats, and they've been majorly hit by inflation
Speaker 12: over the last few years, and they're less enthusiastic in
Speaker 12: sort of their outlook in terms of voting for Biden
Speaker 12: than they were just two years before.
Speaker 2: When we think about enthusiasm as well in many different states,
Speaker 2: and I mentioned one of them being Michigan, a swing
Speaker 2: state that we pay a lot of attention to. Typically
Speaker 2: we look at, you know, there's roughly seven of these
Speaker 2: swing states that we think will be highly influential. We
Speaker 2: heard from down in Florida over this past weekend Donald
Speaker 2: Trump's campaign at a donor event suggesting Minnesota and Virginia
Speaker 2: could also be in play, that their polling suggests Donald
Speaker 2: Trump might actually be able to win those states.
Speaker 12: What do you think about that, Clinton, No, I don't
Speaker 12: think that's I don't think that hits some Mark. I
Speaker 12: think that Trump is overstated right now. Now Biden is
Speaker 12: week and Biden has problems with his numbers, and that's
Speaker 12: something that the Biden campaign is going to have to
Speaker 12: worry about. But Minnesota and Virginia, especially Virginia sort of
Speaker 12: turning I don't think that's when you look at the
Speaker 12: historical data, that's possible. Anything's possible. But I don't think
Speaker 12: that's the case.
Speaker 2: Okay, fair enough, So maybe it is going to ultimately
Speaker 2: come down to just those seventh I think so seven states.
Speaker 2: To what the point the polling now is showing that
Speaker 2: Biden is losing, if not in all of them, depending
Speaker 2: on the poll you're looking at, in the vast majority.
Speaker 2: But certainly there could be some room for that to
Speaker 2: change over the next one.
Speaker 12: Now, without a doubt, over six months, those things can change.
Speaker 12: We expect it to narrow these Historically these states have
Speaker 12: shown differences of one to two percentage points. They're at
Speaker 12: four and five some of them. It's much too large,
Speaker 12: much too in favor of Trump. As the economy improves,
Speaker 12: we expect Biden to improve. Yes, but today Trump wins
Speaker 12: and all the keys winging states.
Speaker 4: Of course, there's still a long way to go.
Speaker 2: So we'll probably keep having you back here on Bloomberg
Speaker 2: Television and Radio to talk about it over the next
Speaker 2: six months. Cliff Young, of course, is US Public Affairs president.
Speaker 4: Over at episodes.
Speaker 2: Thank you so much for joining me here.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
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Speaker 2: We got you covered all across the East Coast from
Speaker 2: New York to Washington and the West Coast as well.
Speaker 2: And that's where we go next, out to California where
Speaker 2: the Milkin Institute Global Conference is taking place. Romain Bostik
Speaker 2: and Carol Masser are there and they're joined now by
Speaker 2: a very special guest, Minneapolis Fed President Neil Kashkari.
Speaker 4: Carol Romaine, Thanks Kelly.
Speaker 13: We are sitting here right now with Neil Cashcari, President
Speaker 13: of the Minneapolis Fed. There's been a lot of talk
Speaker 13: about how persistent inflation has shown itself to be. You
Speaker 13: were pretty early on, at least amongst FED members are saying,
Speaker 13: don't get too ahead of yourselves and talking about cutting rates.
Speaker 13: A lot's change, at least from the data that we've
Speaker 13: gotten over the last I don't know three months or so.
Speaker 13: Has that changed your view as well about staying where
Speaker 13: we are?
Speaker 6: Well?
Speaker 11: The second half of twenty twenty three surprised us at
Speaker 11: how rapidly inflation fell. That was really good news, and
Speaker 11: the economy remains strong. We all hope that was going
Speaker 11: to continue the first quarter of this year.
Speaker 6: It seems like it's stalled out.
Speaker 11: So it's a little too soon to declare that we're
Speaker 11: definitely stalled out, or maybe it's just taking more time.
Speaker 11: I think we're in a good place right now. Labor
Speaker 11: market is still strong. We can take our time to
Speaker 11: get more data to see if disinflation is going to continue,
Speaker 11: and if it does, great, If it doesn't, then we
Speaker 11: need to take that on board.
Speaker 13: What is the complexion right now of disinflation? What actually
Speaker 13: drove us at least down to the level where we're
Speaker 13: at right now.
Speaker 11: Most of the gains that we saw last year were
Speaker 11: supply side improvements. Supply chains getting better, are Americans coming
Speaker 11: back to work, a lot more workers entering the labor force.
Speaker 6: That's really positive.
Speaker 11: I don't think monetary policy actually brought demand down that much,
Speaker 11: and so most of the gains will because of the
Speaker 11: supply side. Now, the question is if monetary policy has
Speaker 11: to take us the rest of the way there, is
Speaker 11: it tight enough to do that. I wrote an essay
Speaker 11: today on our website raising that question. And I'm not
Speaker 11: sure how tight monetary policy is. We need more data
Speaker 11: to assess it.
Speaker 5: How do we know that the inflationary process has still
Speaker 5: some ways to go, or how do we know that
Speaker 5: maybe this is it, this is the new normal.
Speaker 11: Well, it's not the new normal because it's three percent
Speaker 11: and the FED can and will achieve two percent. The
Speaker 11: question is if disinflation is still underway, then maybe it'll
Speaker 11: continue on its own, and we can.
Speaker 6: Then take that on board.
Speaker 11: If we need to hold rates where they are for
Speaker 11: an extended period of time to tap the brakes on
Speaker 11: the economy, or if we even needed to raise we
Speaker 11: would do what we need to do to get inflation
Speaker 11: back down.
Speaker 13: I have to dis ask you, though, about two percent,
Speaker 13: and I know why the FED stands by that two percent,
Speaker 13: But I talk to people around the room this week
Speaker 13: here and their cost of capital. They're basing that more
Speaker 13: on closer to a three percent rate. And the idea
Speaker 13: is they're saying, look, the two percent target that needs
Speaker 13: to come up, that that's not the reality long term structurally,
Speaker 13: at least not for the folks in this room.
Speaker 6: Yeah, I disagree with that.
Speaker 11: I mean, I think that ultimately the central bank, whether
Speaker 11: it's the FED or the ECB or the Bank of England,
Speaker 11: can determine whatever the inflation rate is, and over time,
Speaker 11: if they conduct their policy appropriately, people will come to
Speaker 11: understand that will adjust their behavior. We're committed to two percent,
Speaker 11: we will get to two percent, and we will get
Speaker 11: an interest rate environment necessary in order to achieve two percent.
Speaker 5: You know, one of the arguments, though, Neil, is that
Speaker 5: the idea of near shoring, bringing things back home, building
Speaker 5: chips in America, that's going to create They're going to
Speaker 5: be more expensive than if we were building them overseas,
Speaker 5: and that is going to be consistent. Inflationary pressure is
Speaker 5: longer term. There are some macro forces underway. Why not
Speaker 5: think that it's got to be above two perceptions.
Speaker 6: I think those trends are real. But those who suggest to.
Speaker 11: Me a one time increase in the price level not
Speaker 11: necessarily an ongoing increase of inflation at a higher level
Speaker 11: that we believe and I believe that the monetary authority
Speaker 11: can ultimately long run determine the inflation of the economy,
Speaker 11: but the rate environment necessary to achieve that may be
Speaker 11: different depending on these broader macro forces.
Speaker 5: So rate cut this year, should we take it off
Speaker 5: the table? Is it still a possibility?
Speaker 11: It's certainly still a possibility. We need to let the
Speaker 11: inflation data tell us. I mean, I think my colleagues
Speaker 11: and I we all have a range of views on
Speaker 11: where the economy is going, but we're all committed to
Speaker 11: letting the data guide us. And if the data comes
Speaker 11: in in a positive manner suggesting disinflation continues, will adjust.
Speaker 6: Hey, go ahead. But is it just housing pressure?
Speaker 5: Like you write a lot about housing pressure, We talk
Speaker 5: about it, we're talking to with a lot of people
Speaker 5: in the real estates. There's not enough supply of houses
Speaker 5: out there, and that's creating inflation on the housing front.
Speaker 5: Is it just housing pressures that you guys are really
Speaker 5: focusing on, or that you're focusing on.
Speaker 11: I'm focusing on housing first of all, because it's traditionally
Speaker 11: the most interst right sensitive sector of the economy. And
Speaker 11: if the most interst rate sensitive sector is not showing
Speaker 11: as much disinflation as I would have thought, For example,
Speaker 11: new lease rates appear to be climbing back again.
Speaker 6: Yeah, that's surprising to me. Why is that that makes me.
Speaker 11: Wonder is policy as tight as I would have otherwise assumed.
Speaker 11: We are seeing some effect of monetary policy on credit
Speaker 11: card delinquencies, on auto loan delinquencies, especially for lower credit
Speaker 11: score borrowers. So it is having some effect, but it's
Speaker 11: not having as much effect as I would have guessed.
Speaker 13: By now, I know we have the benefit of hindsight.
Speaker 13: But you go back to whin the rate hiking cycle
Speaker 13: effectively pause. Do you think that the FEDS should have
Speaker 13: kept going with hikes meeting additional hikes?
Speaker 6: I don't know.
Speaker 11: I mean, I think that there are lags in monetary policy,
Speaker 11: and we saw such rapid disinflation in the second half
Speaker 11: of last year. I mean, it was a really wonderful
Speaker 11: scenario that was real and that surprised.
Speaker 6: Us, and so it's reasonable to say, let's just let
Speaker 6: that continue. Maybe it'll take us all the way home.
Speaker 6: It ended up strolling out at least for a little bit.
Speaker 13: You feel like you can accurately assess those lags what
Speaker 13: those lags are, because even when you talk about disinflation,
Speaker 13: you acknowledge yourself a lot of that is driven by
Speaker 13: supply side issues and not just monetary policy. How do
Speaker 13: you assess what the balance is.
Speaker 6: Yeah, it's hard.
Speaker 13: You know.
Speaker 11: For example, in the housing market, which we're talking about,
Speaker 11: we know a lot of Americans refinanced their homes at
Speaker 11: when the mortgage rates were very low, and so they're
Speaker 11: not feeling the pinch of higher rates because they have
Speaker 11: not had to refinance.
Speaker 6: And so that happens. That happened in the.
Speaker 11: Late nineteen seventies and early eighties as well. That's part
Speaker 11: of the lag in the policy process. So we have
Speaker 11: a lot of data that we look at and we
Speaker 11: ultimately have to use judgment to try to put it together.
Speaker 6: Speaking of data, growth, we're doing okay.
Speaker 5: Jay Powell consistently reminds this is a good thing. We
Speaker 5: hear it, we feel it here at Milton. Is there
Speaker 5: the possibility that you don't even have to cut rates at.
Speaker 6: All this year because the economy is strong? Well, no,
Speaker 6: that's you're right.
Speaker 11: So if inflation moves sideways, and if the labor market
Speaker 11: continues to be strong and growth continues to be strong.
Speaker 6: Then I would be in the camp of we shouldn't.
Speaker 11: Do anything, just let this play out for an extended
Speaker 11: period of time. If, on the other hand, we start
Speaker 11: to see inflation come back down or meaningful weakness in
Speaker 11: the labor market, then that might say we need to
Speaker 11: start dialing back, or if inflation proves to be more
Speaker 11: in trench, we.
Speaker 6: Could have to go up. Yeah, but is the economy
Speaker 6: is its strong.
Speaker 11: For every market?
Speaker 6: Well, no, it's of course not. And we know that.
Speaker 11: We know that the way policy works, it slows down
Speaker 11: parts of the economy, and the lower income workers tend
Speaker 11: to feel the pain the most, and that's I mean,
Speaker 11: I wish that were not the case. It's also frustrating
Speaker 11: that every time there's a piece of good news you
Speaker 11: see the Wall Street rally, Ufouria returns to Wall Street, though,
Speaker 11: and yet there are people who are feeling the pain.
Speaker 6: So it's definitely uneven how this gets felt. You did
Speaker 6: mention that.
Speaker 5: If inflation starts to go up, I thought I heard
Speaker 5: you say we could have to increase the FED. That's
Speaker 5: a smart narrative still to have out there, that you
Speaker 5: could that the Fed could possibly have to raise rates again.
Speaker 6: Well, of course, I mean, we are data dependent.
Speaker 11: We are committed to getting inflation back to our two
Speaker 11: percent target, and we will do what we need to do.
Speaker 11: Nobody has taken any rates completely off the table.
Speaker 6: I think the bar is high.
Speaker 11: Much more likely we would stay put for an extended
Speaker 11: period of time and then we'll see where we are.
Speaker 13: How would you actually prepare those the markets for that.
Speaker 13: That's not the kind of thing you just want to
Speaker 13: go into a meeting and surprise the markets on.
Speaker 6: I mean, you need a little build up there.
Speaker 11: I agree, but like there's no shortage effect, and there
Speaker 11: is no shortage effects to signal when people's perspectives are changing.
Speaker 6: Is that fed communication?
Speaker 5: Though?
Speaker 13: Do you think it's fair? And by that, I mean
Speaker 13: is it too much? Because you get so many different opinions?
Speaker 13: And in the media it's great, we love it, but
Speaker 13: I feel like for investors sometimes it feels like, Okay,
Speaker 13: we're getting too many people.
Speaker 6: Tell them I understand their concerns. They're twelve reserur banks.
Speaker 11: We represent regions of the country here, so people across
Speaker 11: the six states that the Minneapolis Fed represents want to
Speaker 11: hear from us.
Speaker 6: Often I turn down ninety.
Speaker 11: Five percent of my speaking invitations that I get, So
Speaker 11: I go out across the district. I'm usually saying the
Speaker 11: same thing, but in the spirit of transparency, I live
Speaker 11: stream it so that can so I'm not giving any
Speaker 11: secrets away, and if people want to watch it and
Speaker 11: cover it, I can't control that, and so it's a
Speaker 11: balancing act where we want to be transparent to the
Speaker 11: constituents that we represent, and yet we also want to
Speaker 11: be show that we're not giving secrets.
Speaker 6: Away doesn't cost Cory.
Speaker 5: I feel like there is more clarity of thought about
Speaker 5: what the Fed may do next, certainly here at Milcote
Speaker 5: this year around.
Speaker 6: But having talked to.
Speaker 5: You, we could cut rates, we could raise rates. Your
Speaker 5: data dependent, I get it. Do you at the and
Speaker 5: the FMC feel like there is where clarity that kind
Speaker 5: of where we are in the economy and where the.
Speaker 6: Trouble spots are. Well.
Speaker 11: I think there's more clarity on our reaction function, which
Speaker 11: is we are all committed to watching the data. We've
Speaker 11: been our models have not worked very well in the
Speaker 11: last few years, so we have to watch the actual
Speaker 11: inflation data that will guide us. We all agree on
Speaker 11: that now, whether inflation goes sideways or continues to fall,
Speaker 11: we have a range of perspectives on that. That's where
Speaker 11: the deviations lie. But our commitments are doing what we
Speaker 11: need to do. There's no deviation around the table.
Speaker 13: On that you're still paying a lot of attention to
Speaker 13: financial markets and how they are reacting to absolutely.
Speaker 11: I mean, it is a channel through which monetary policy
Speaker 11: affects the real economy. And when you know it took
Speaker 11: three negative inflation prints in a row, markets started to
Speaker 11: take that on board, and then one positive job report
Speaker 11: in euphoria returns.
Speaker 6: All right, I guess I forgot. Yeah, we got a wrap.
Speaker 13: You don't see all those people in the background Carol
Speaker 13: like that saying that that means wrap.
Speaker 7: Neil.
Speaker 6: Always great to talk to you, Great to see you.
Speaker 13: Thanks You'll Cash Minneapolis President live here at the Bilpit stage.
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