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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 Applecarplay and Enrounoo with the Bloomberg Business app.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: Cogress woman, when more about the democrat from Wisconsin is

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Speaker 2: with us right now? Congresswoman, it's great to see you

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Speaker 2: before we move on to some other issues, Welcome back

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Speaker 2: to Bloomberg Hearing. Wes Moore talk prompts a number of

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Speaker 2: questions about this effort. We've had some lawmakers suggest that

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Speaker 2: a funding bill, or at least a commitment to fund

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Speaker 2: rebuilding that bridge, could be attached to a Ukraine funding

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Speaker 2: bill that the House could act on soon. Would that

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Speaker 2: be an appropriate vehicle to cover the cost of this

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Speaker 2: bridge in Baltimore.

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Speaker 3: I have to just tell you that I don't know.

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Speaker 3: I have not heard that proposal. I do know that

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Speaker 3: getting funding to Ukraine is a heavy lift all by itself,

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Speaker 3: and so perhaps the thinking is that the extent to

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Speaker 3: which we're able to do that heavy lift, maybe it

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Speaker 3: could just live on to that. I hadn't heard that strategy.

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Speaker 3: But I do think that the Baltimore Bridge really has

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Speaker 3: an impact on not only local passenger traffic, but commerce,

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Speaker 3: and so I know that it should be it is

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Speaker 3: a very high priority.

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Speaker 4: Well, Congresswoman, you just described Ukraine Aid as a very

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Speaker 4: heavy lift. We heard yesterday from some members on the

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Speaker 4: Republican side that that could be voted on next week,

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Speaker 4: but we also saw yesterday a rule failing again on

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Speaker 4: the House floor. How confident are you not just that

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Speaker 4: this could be brought to the floor, but go anywhere

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Speaker 4: at all.

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Speaker 5: Please can't do it.

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Speaker 3: Ask me for confidence, because I don't have the confidence

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Speaker 3: about anything that can happen in the House of Representatives.

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Speaker 5: The margins are very very narrow.

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Speaker 3: I do know that there is a lot of support

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Speaker 3: for Ukraine in both caucuses and especially among Democrats. We

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Speaker 3: do have a very lively caucus I think, headed up

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Speaker 3: by Marjorie Taylor Green that is against Ukraine Aid, and

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Speaker 3: if it comes to the floor, it will pass. So

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Speaker 3: if a Republican has told you that we could be

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Speaker 3: voting on it in a few weeks, I am sure

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Speaker 3: that they have assessed and evaluated the.

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Speaker 5: Democratic support that may or may not be there.

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Speaker 3: Now They may bring it up on suspension, in which

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Speaker 3: case that they could bypass the Rules Committee and they

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Speaker 3: won't have to rely on Democratic votes to pass their rule.

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Speaker 3: Weis that came under a rule, so if it comes

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Speaker 3: under suspension, they must have assessed.

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Speaker 5: That the votes were two thirds of the House would.

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Speaker 3: Vote for it for it to come under under suspension

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Speaker 3: of the room.

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Speaker 2: Speaking of that rule failing, we spoke with your colleague

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Speaker 2: French Hill, the Republican from Arkansas, I was a champion

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Speaker 2: of renewing FIZA. He spoke with us shortly after that

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Speaker 2: happened here on Bloomberg's TV and radio and expressed his

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Speaker 2: extreme disappointment.

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Speaker 6: Here's what he told us. Congresswoman, we'll have you respond.

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Speaker 6: Let's listen.

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Speaker 7: It's very frustrating today. This bill was important, a renewing

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Speaker 7: seven zero two authority which allows us to monitor communications

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Speaker 7: from our adversaries outside of the United States, not American citizens.

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Speaker 8: Not American citizens.

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Speaker 7: It is non negotiable that has to be renewed before

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Speaker 7: April nineteenth.

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Speaker 2: Congresswoman, as a progressive Democrat, do you want to see

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Speaker 2: FIST renewed in its current form? Should a warrant be

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Speaker 2: required if an American is involved in data collection.

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Speaker 3: Well, just let me say that the bill that came

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Speaker 3: to the floor that would have been come had we

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Speaker 3: passed the rule, did have some reforms in it, so

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Speaker 3: we are at risk of not having those reforms in

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Speaker 3: it to protect American citizens. I think the Republicans listened

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Speaker 3: to Donald Trump, who had a bone to pick with FISA,

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Speaker 3: since you know he and you know his comrades were

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Speaker 3: engaged in in conversations inappropriately with Russia were caught up

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Speaker 3: in the in the visa warrants. So I think that

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Speaker 3: you know that he has personalized this and not looked

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Speaker 3: at the broader the need to make sure that our

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Speaker 3: country is protected by our adversaries overseas. There were reforms

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Speaker 3: that that I agreed with, and perhaps we won't see

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Speaker 3: those reforms if they have to come up with a

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Speaker 3: near renewal.

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Speaker 4: Well, Congresswoman. As you bring up former President Donald Trump,

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Speaker 4: it's worth noting that the House Speaker, Mike Johnson will

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Speaker 4: be alongside him tomorrow in a news conference at mar

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Speaker 4: A Lago in Florida. Especially given all of the murmurs

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Speaker 4: we have heard about potentially Democrats such as yourself stepping

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Speaker 4: in to save the speaker should Marjorie Taylor Green actually

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Speaker 4: move on a motion to vacate the chair, does his

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Speaker 4: closeness with the former president change the calculation for Democrats?

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Speaker 4: What do you think about whether you would ever cast

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Speaker 4: a vote or just not vote at all to help

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Speaker 4: save the speaker?

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Speaker 3: Well, I can tell you does a person who's sick

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Speaker 3: and tired of the impeachments and censorships and punishments. I

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Speaker 3: can say that I'm very disappointed that he's going down

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Speaker 3: there to kiss the ring on so called election integrity,

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Speaker 3: which is another Trump groups for I gotta be elected.

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Speaker 5: I'm gonna do January sixth all over again.

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Speaker 3: I'm very disappointed that the Speaker shows the path of

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Speaker 3: going down to kiss the ring as opposed to just

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Speaker 3: working with the Democrats on avoiding the Marjorie Taylor Green

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Speaker 3: initiative to expel him.

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Speaker 5: She wants to expel him because.

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Speaker 3: He cooperated with Democrats to keep the government from shutting down,

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Speaker 3: and now if he were to bring the Ukraine Bill

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Speaker 3: to the floor, she has threatened to do that. I

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Speaker 3: hate to see the Grand Old Party now becoming the

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Speaker 3: Party of Putin.

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Speaker 2: Well, with that said, Mike Johnson isn't exactly the he's

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Speaker 2: not exactly the normal kind of partygoer at mar A Lago. Congresswoman,

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Speaker 2: what advice would you give the Speaker before he flies

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Speaker 2: to Palm Beach.

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Speaker 3: Well, you know, bipartisanship is the only game in town,

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Speaker 3: and he should lean into it and go down in history,

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Speaker 3: you know, as a speaker that's saved the one hundred

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Speaker 3: and eighty the Congress from being the worst Congress in history.

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Speaker 4: Well, and you mentioned, Congresswoman, the idea that he may

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Speaker 4: be in hot water with his own party because he

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Speaker 4: worked with yours to keep the government funding funded. If

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Speaker 4: he were to work with Democrats in the House as

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Speaker 4: well to make sure that Ukraine got funding, do you

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Speaker 4: think it is likely that his speakership would remain intact

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Speaker 4: due to democratic action. Have you heard anything from Hakim

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Speaker 4: Jeffries about that idea.

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Speaker 5: Well, the person to hear from is Mike Johnson.

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Speaker 3: Instead of flying down to Florida, why doesn't he walk

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Speaker 3: across the hall and talk to Hakim Jefferies.

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Speaker 5: I just think that it's you know, it's less.

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Speaker 3: Time consuming and less expensive, and it's more integrity saving

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Speaker 3: to do that.

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Speaker 2: Congress Woman, when more with a sum Bloomberg TV and Radio. Lastly, Congresswoman,

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Speaker 2: I'm struck by a new poll from the d Triple C,

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Speaker 2: of course, tasked with electing Democrats to the House. A

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Speaker 2: poll of more than a thousand likely voters in more

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Speaker 2: than sixty competitive House battleground districts. They found two issues

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Speaker 2: were deal breakers, immigration and abortion. Thirty six percent of

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Speaker 2: voters say they cannot support a candidate who disagreed with

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Speaker 2: them on abortion, and I think we can agree that

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Speaker 2: that's been helping Democrats. Thirty three percent as well said

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Speaker 2: the same for immigration. With that in mind, do you

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Speaker 2: support President Biden acting on his own through executive order

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Speaker 2: to manage the flow of illegal immigrants crossing our southwestern border?

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Speaker 3: You know, I just want to point something out. There

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Speaker 3: was a lot going on January twentieth, twenty twenty one.

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Speaker 3: We had just two weeks earlier, had January sixth insurrection,

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Speaker 3: So people don't remember that Day one of the Biden administration,

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Speaker 3: he introduced immigration reform legislation. People don't remember.

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Speaker 6: Should you do more?

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Speaker 5: Just check the facts.

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Speaker 3: And then the Republicans put forth a border bill that

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Speaker 3: the border protection lobby supported, and Donald Trump told Republicans

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Speaker 3: not to bring it forth because he wants to run

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Speaker 3: on this broken immigration system.

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Speaker 5: I want to remind people.

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Speaker 3: I mean, so, the broken borders and immigration is a

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Speaker 3: gift that keeps on giving to Donald Trump, who wants

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Speaker 3: to run a gift President Biden on that. But I

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Speaker 3: want people to know that President Biden, from day one

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Speaker 3: of his administration has tried to fix immigration.

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Speaker 4: All right, Congresswoman Gwen Moore at the Democrat from Wisconsin,

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Speaker 4: thank you so much for joining us today on Balance

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Speaker 4: of Power.

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

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Speaker 2: Live from Washington alongside Kaylee Lines. It's the fastest show

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Speaker 2: in politics, with big questions about funding for Ukraine even

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Speaker 2: as we see some very difficult headlines emerge from Ukraine. Kayleie,

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Speaker 2: we were talking about this earlier, the missile barrage again

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Speaker 2: against a Kiev that knocked out the biggest power plant

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Speaker 2: in that area, and now an emergency meeting by the

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Speaker 2: UN's Atomic Watchdog on what might happen to Zaparijia. You

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Speaker 2: could go back a year and tell these same kinds

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Speaker 2: of stories. Yet the concern about funding is a real one.

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Speaker 2: As the Speaker of the House heads to mar A

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Speaker 2: Lago this weekend, and we know how Donald Trump feels

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Speaker 2: about that.

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Speaker 4: Yeah, it's still a major question what action the US

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Speaker 4: Congress may take, and frankly, how quickly an actual vote

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Speaker 4: on providing additional military assistance Ukraine could actually transmit to

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Speaker 4: Ukraine getting the assistance it needs to fend off missile

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Speaker 4: attacks like the one we saw. And this is where

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Speaker 4: we begin with General Mark kim At, the retired brigadier

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Speaker 4: general in the US Army who was joining us here

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Speaker 4: in our Washington d C studios. So, general, as we

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Speaker 4: see once again Russia arguably weaponizing energy, we hear President

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Speaker 4: vladimir's Alynsky during a visit to Lithuania saying that air

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Speaker 4: defense is the biggest challenge that they have. How quickly

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Speaker 4: could the US, even if it decided it wanted to

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Speaker 4: help Ukraine in that regard.

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Speaker 9: Well air defense capabilities, there is a significant amount in

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Speaker 9: the inventory that could get over there pretty quickly. Where

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Speaker 9: we are having problems is in manufacturing artillery rounds.

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Speaker 6: That's where there's a shortage.

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Speaker 9: They would draw down from existing stocks, perhaps take them

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Speaker 9: from other theaters. But that's one of those systems that

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Speaker 9: I think if we can get it over there. I

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Speaker 9: haven't seen the list. I didn't see a large amount

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Speaker 9: of air defense weapons on there in a few snippets

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Speaker 9: that have been shared with me, but I think that's

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Speaker 9: something that they could get over quite quickly.

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Speaker 2: This is a Pentagon spending a lot of plates right now,

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Speaker 2: and if you believe reporting, there is an imminent strike

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Speaker 2: that we're preparing for either by Iran or Iranian proxies

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Speaker 2: against Israel following the Israeli strike against the Iranian embassy

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Speaker 2: in Damascus. To what extent can we model the possibilities here?

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Speaker 2: What are they talking about today behind closed doors at

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Speaker 2: the Pentagon?

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Speaker 9: Yeah, I think the options for the Iranians would be

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Speaker 9: a direct strike on Israel from Iranian territorial units.

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Speaker 6: I think that is significant.

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Speaker 9: That would be significant, and that could very well draw

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Speaker 9: the United States in, because President Biden has told Prime

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Speaker 9: Minister Netnyahu.

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Speaker 6: That he would help.

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Speaker 9: But this would sound more like an instance where the

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Speaker 9: Iranians would work through their proxies.

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Speaker 6: If you go over the.

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Speaker 9: Annual report given by the State Department on State Sponsors

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Speaker 9: of Terrorism, the lines drawn in there about Iran and

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Speaker 9: their terrorist activities are enormous. So it would be likely

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Speaker 9: that perhaps not in the Middle East, but Iran could

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Speaker 9: in fact go after an Iranian go after an Israeli

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Speaker 9: embassy somewhere in South America that would take their fingerprints

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Speaker 9: on it, off of it if they use a group

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Speaker 9: like Hezbola, and there wouldn't.

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Speaker 6: Be direct attribution.

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Speaker 9: As you remember, Iran sent an agent into Washington, d C.

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Speaker 9: To try to assassinate dua ambassador, so I would expect

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Speaker 9: something like that to happen.

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Speaker 4: Well, we heard the take from Senator Marco Rubi, or

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Speaker 4: at least we could read it on x where he

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Speaker 4: posted this morning, Iran wants to launch a large scale

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Speaker 4: attack from their own territory against Israel respond instantly with

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Speaker 4: an even more severe counterattack inside of Iran. What happens

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Speaker 4: next is the most dangerous Middle East moment since nineteen

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Speaker 4: seventy three.

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Speaker 9: You think, I think it's exactly right if that was

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Speaker 9: what the Iranians were to do. I laid that out

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Speaker 9: as an option, but I think it's a very low

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Speaker 9: probability to that having happening, because Ron has enough problems

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Speaker 9: of its own right now, internal descent, huge amount of

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Speaker 9: inflation shortages that would almost be apocalyptic, if not suicidal.

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Speaker 2: So it comes through a proxy group, then most likely

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Speaker 2: we've already got a carrier group in the region to

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Speaker 2: deal with that. Is that how it ends, or would

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Speaker 2: we have to send additional resources to manage an attack

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Speaker 2: of that sort.

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Speaker 9: Well, if a proxy group goes after an Israeli embassy

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Speaker 9: in South America or in Western Asia, I don't think

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Speaker 9: that that carrier is going to do a lot of good.

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Speaker 6: How about if it stays in the region.

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Speaker 9: However, if it stays in the region, I think it

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Speaker 9: would depend on the severity the attack, whether it was

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Speaker 9: against US assets in the region. As you remember, when

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Speaker 9: we targeted Costumsulamani, the response from the Iranians was in

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Speaker 9: fact an attack from Iranian territorial units, but it was

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Speaker 9: a fairly soft attack on a U space that created

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Speaker 9: a number of soldiers getting PTSD and their bells rung essentially,

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Speaker 9: but it wasn't much more than that.

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Speaker 4: Of course, against the backdrop to all of this is

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Speaker 4: the ongoing war between Israel and Tamas, and a lot

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Speaker 4: of questions around how the US policy in regard to

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Speaker 4: that may be changing. As we hear from the Biden administration.

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Speaker 4: If they don't see the changes they would like to

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Speaker 4: see from Israel, US policy might change. There's been talk

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Speaker 4: about conditioning aid. Can the US do anything like that?

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Speaker 4: Knowing that this threat against Israel, not just from Hamas

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Speaker 4: but from other Iranian proxies or iron itself, seems so

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Speaker 4: real right now.

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Speaker 9: I think there's a policy issue and there's a political issue.

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Speaker 9: I won't go into the political issue because it would

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Speaker 9: appear that President Biden is trying to walk the fine

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Speaker 9: line between support for Israel and also support for these

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Speaker 9: Lama communities here in the United States.

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Speaker 6: But on a.

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Speaker 9: Policy issue, we already have the laws. We have laws

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Speaker 9: such as the Lehi Law, which prevents the Americans from

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Speaker 9: giving equipment to foreign countries if they're verifiable human rights violations.

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Speaker 9: So I would simply say that if the president uses

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Speaker 9: the laws in the book, he has a tremendous way

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Speaker 9: to hold up that support to Israel.

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Speaker 6: I don't think he will.

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Speaker 2: What will happen in Rafa if the idea I actually

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Speaker 2: rolls in. We hear there's a date that's according to Benjaminttinya,

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Speaker 2: who I know that the administration is trying to prevent

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Speaker 2: this from happening, but surely they have plans as well.

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Speaker 6: If they're executed, what does it look like?

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Speaker 1: You know?

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Speaker 9: That's what confuses me, because it sounds like it would

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Speaker 9: be what we saw in Gaza. I don't think it

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Speaker 9: would be anything more than that, which was tragic in

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Speaker 9: and of itself. The only difference, of course, would be

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Speaker 9: somewhat of Hamas's last stand. But what I would note

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Speaker 9: is if we go through with some of these programs

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Speaker 9: to limit the amount of precision weapons given to Israel,

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Speaker 9: well they're going to use much more, much less precise

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Speaker 9: weapons and cause a whole lot more collateral damage and

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Speaker 9: death of civilians. So I think we've got to accept

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Speaker 9: that Prime Minister Netanya, who's going to do what he

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Speaker 9: thinks is best for his country and candidly listen to

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Speaker 9: the Americans when it is convenient and ignore it when

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Speaker 9: it's not convenient to him.

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Speaker 4: Well, and what we consistently hear from Netanya, who is

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Speaker 4: that victory it can only be achieved if the remaining

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Speaker 4: battalions are eliminated, and there's of course multiple Hamas battalions

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Speaker 4: still in Rafa. But I guess I question what the

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Speaker 4: idea of elimination really means if we're talking about taking

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Speaker 4: out the actual Hamas fighters or their military capabilities. But

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Speaker 4: can you defeat the Hamas ideology? And I just wonder

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Speaker 4: if how victory can even realistically be achieved in the

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Speaker 4: longer term sense.

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Speaker 9: Well in the short term sense. What he can do

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Speaker 9: in his legacy that he is trying to achieve is

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Speaker 9: he does not want to be another Israeli Prime minister

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Speaker 9: that stops the fight short and you all of a

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Speaker 9: sudden have Sinoar going up and down the streets of

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Speaker 9: Dohag declaring victory. He wants to end Hamas. He will

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Speaker 9: never end the ideology. That's a long term problem. What

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Speaker 9: he can do is forestall another attack that Hamas has

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Speaker 9: promised will happen time and time and time again. That's

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Speaker 9: why he wants to go after the infrastructure. That's why

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Speaker 9: he wants to take out Hamas fighters.

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Speaker 2: General Mark Kimmitt, great to see you back with us

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Speaker 2: here at the table at Bloomberg.

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Speaker 6: You're always welcome. We appreciate the insights, Kaylie.

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Speaker 2: There are huge questions about what's going to happen next

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Speaker 2: and whether that attack actually takes place at all.

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

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Speaker 1: Just Live weekdays at noon Eastern on Applecarplay and Enrounoo

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Speaker 1: with the Bloomberg Business app. Listen on demand wherever you

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Speaker 1: get your podcasts, or watch us live on YouTube in.

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Speaker 2: The Nation's capital, thanks for being with us on Bloomberg Radio,

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Speaker 2: on the satellite and on YouTube. With Congress in town,

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Speaker 2: the President is here as well, but not a lot

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Speaker 2: of news after that FISA bill was stopped in its

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Speaker 2: tracks yesterday. Couldn't even get a rule passed in the House,

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Speaker 2: making us wonder if anything can move in the House,

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Speaker 2: including Ukraine funding, which some thought might happen in the

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Speaker 2: next week.

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Speaker 6: It is feeling a lot less like it at the moment.

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Speaker 2: As Speaker Mike Johnson prepares to make a visit to

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Speaker 2: mar A Lago in a couple of days, going to

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Speaker 2: be holding a joint news conference apparently with Donald Trump.

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Speaker 2: This could impact the agenda. We'll talk about that more ahead,

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Speaker 2: because the news from Ukraine has been very concerning over

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Speaker 2: the past twenty four hours. I think we can call

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Speaker 2: it desperate, as a UN atomic watchdog now calls an

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Speaker 2: emergency meeting in Vienna to talk about the increasing risk

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Speaker 2: of a meltdown at the nuclear power plant in Zaparisia.

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Speaker 2: And that follows Russian missile attacks knocking out the biggest

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Speaker 2: power plant in the Kiev region yesterday, taking advantage of

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Speaker 2: pockets in the air defense. And that's where we start

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Speaker 2: here with Nick Watdams, Bloomberg's, of course, National Security team leader.

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Speaker 2: He drives our coverage here from Washington and a regular

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Speaker 2: on this broadcast. It's great to see you Nick, as

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Speaker 2: we join together again to talk about some pretty tough news.

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Speaker 2: I wonder, are we going to be hearing all of

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Speaker 2: this being a cause of a lack of ammunition or

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Speaker 2: would this have happened either way with Ukraine?

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Speaker 10: Well, I mean, there is no question whether or not

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Speaker 10: you draw a direct causal link. There is no question

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Speaker 10: that Russia has been much more aggressive in the skies

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Speaker 10: over Ukraine. You had that footage a day or two

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Speaker 10: ago of Russian jets essentially flying unchallenged over Ukraine, something

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Speaker 10: that would not have happened several months ago. And we

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Speaker 10: know very clearly that Ukraine is running out of ammunition,

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Speaker 10: and the US says, listen, there is no Plan B

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Speaker 10: here if you do not get us the money. This

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Speaker 10: is Ukraine has already rationing ammunition, It's running out of

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Speaker 10: its air defenses. They need help, and we don't have

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Speaker 10: any other options, so you got to act. It be

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Speaker 10: very interesting to see what happens in mar A Lago,

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Speaker 10: because you know, if Mike john Hinson does force this vote,

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Speaker 10: the sort of common wisdom is that that's going to

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Speaker 10: force his ouster. But we're also hearing, you know, Donald

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Speaker 10: Trump likes Mike Johnson. He doesn't want to have another

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Speaker 10: Republican leadership fight, so there may be some wiggle room there.

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Speaker 10: We'll see.

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Speaker 2: Very curious to hear what might emerge from that conversation.

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Speaker 2: I wonder if either of them know we remember Vladimir

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Speaker 2: Putin using the cold as a weapon in the winter season.

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Speaker 2: He's using energy, I guess as a weapon in this case,

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Speaker 2: actually targeting energy infrastructure, whether it's this plant that he

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Speaker 2: knocked out in Kiev, the concerns about the nuke plant

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Speaker 2: in Zaporisha.

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Speaker 6: Where does this go? What's he trying to accomplish?

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Speaker 11: Well?

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Speaker 10: It's always difficult to tell how much of this is

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Speaker 10: a deliberate strategy. I mean, obviously the goal right now

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Speaker 10: is to inflict as much pain on Ukraine. It's military

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Speaker 10: but also the civilians there as he possibly can. And

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Speaker 10: it's both inflicting pain and also exacerbating the really low morale.

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Speaker 10: I think that you're seeing among Ukrainian troops in a

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Speaker 10: sense that they are not getting what they need from

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Speaker 10: the West. I don't know if you'd say they feel

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Speaker 10: abandoned by the US and European allies, but certainly a

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Speaker 10: feeling that, you know, if Russia is allowed to do

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Speaker 10: something like this unchallenged, well what does that say about

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Speaker 10: the relationship. So I mean, as ever, Vladimir Putin delights

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Speaker 10: in exploiting these rifts and points of tension between Ukraine

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Speaker 10: and its allies. I think that's what he's doing here.

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Speaker 2: All the while, we have quite a situation brewing in Israel.

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Speaker 2: It's getting more complex for this administration, it seems like

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Speaker 2: by the day, as we now anticipate what we're told

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Speaker 2: as an eminent strike by Iran or by its proxies

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Speaker 2: in retaliation against this Israeli strike in Damascus.

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Speaker 6: Do we believe that something like this could.

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Speaker 2: Be born originated from Iranian soil, or would this be

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Speaker 2: from Yemen or someone else.

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Speaker 10: You know, it's a great question because the thing that

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Speaker 10: you really have not seen in this conflict so far

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Speaker 10: is Israel and Iran going toe to toe against each

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Speaker 10: other directly. It's all been playing out through proxies. So

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Speaker 10: I mean, yes, you had Israel targeting Iranian generals, but

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Speaker 10: they were based in Syria, so it was yes, they

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Speaker 10: were going after Iranian forces, but there was that half

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Speaker 10: step that they were actually in serious So you know,

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Speaker 10: a direct strike from Iran on Israel or vice versa,

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Speaker 10: frankly that was actually publicly acknowledged would be a huge escalation.

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Speaker 10: So we're all, I mean, this is this occupying all

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Speaker 10: of our time at the moment, trying to figure out

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Speaker 10: what the contras of this strike would be.

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Speaker 1: But what is clear.

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Speaker 10: I mean, as President Joe Biden said yesterday, they are anticipating.

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Speaker 10: They do have strong evidence that something is coming. The

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Speaker 10: question is what and how escalatory it's going to be.

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Speaker 6: That we are laser focused.

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Speaker 2: On it, and we have a high ranking military official

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Speaker 2: in Israel right now talking about how they respond to

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Speaker 2: the response would that be coordinated with the US either way.

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Speaker 12: Yes.

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Speaker 10: I mean it's a very interesting dynamic there because the

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Speaker 10: US Defense Department has played a role in advising Israel

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Speaker 10: on its responses both to Hamas but also in this

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Speaker 10: proxy fight. But you know, it hasn't always been the

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Speaker 10: case that Israel has taken that advice, and there has

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Speaker 10: been some frustration in the Pentagon that hey, we're sending

444
00:24:20,440 --> 00:24:23,000
Speaker 10: you these assets and you're not listening, You're not paying

445
00:24:23,040 --> 00:24:25,800
Speaker 10: attention to us. So again you get back to that

446
00:24:26,040 --> 00:24:29,680
Speaker 10: other really festering issue, which is the continued tension between

447
00:24:29,800 --> 00:24:30,480
Speaker 10: US and Israel.

448
00:24:30,600 --> 00:24:32,720
Speaker 6: Something tells me we'll talk again soon. Yeah, if it'll

449
00:24:32,760 --> 00:24:33,600
Speaker 6: come back to help us out.

450
00:24:33,720 --> 00:24:36,159
Speaker 2: Great to see you, Nick, as always, Nick Wadams, just

451
00:24:36,160 --> 00:24:39,520
Speaker 2: doing great work as always on Bloomberg's National Security team

452
00:24:39,600 --> 00:24:42,359
Speaker 2: here in Washington. They have a very important corner of

453
00:24:42,400 --> 00:24:45,080
Speaker 2: our bureau, and we really do rely on them, certainly

454
00:24:45,119 --> 00:24:47,520
Speaker 2: since I've been here at Bloomberg considering everything that has

455
00:24:47,560 --> 00:24:49,960
Speaker 2: gone on around the world and is continuing to unfold here.

456
00:24:50,600 --> 00:24:53,520
Speaker 6: We'll stay in touch with Nick for you here at home.

457
00:24:53,720 --> 00:24:56,800
Speaker 2: The President actually talking about this today in a trilateral

458
00:24:56,920 --> 00:24:59,119
Speaker 2: meeting with the Prime Minister of Japan, of course, was

459
00:24:59,160 --> 00:25:01,240
Speaker 2: in town yesterday, and you're adding the President of the

460
00:25:01,240 --> 00:25:04,679
Speaker 2: Philippines today all of this with an Ion China. But

461
00:25:04,720 --> 00:25:07,680
Speaker 2: as we heard from the Prime Minister Kishida, the Prime

462
00:25:07,680 --> 00:25:10,440
Speaker 2: Minister of Japan before a joint session of Congress earlier,

463
00:25:10,840 --> 00:25:16,320
Speaker 2: they are deeply invested in this situation in Ukraine with

464
00:25:16,359 --> 00:25:18,040
Speaker 2: an Ion China as well.

465
00:25:18,040 --> 00:25:20,200
Speaker 6: It's interesting how these stories overlap.

466
00:25:20,480 --> 00:25:22,800
Speaker 2: The President speaking yesterday not only about this in the

467
00:25:22,840 --> 00:25:26,200
Speaker 2: Rose Garden, but also taking a question about the border.

468
00:25:26,640 --> 00:25:30,359
Speaker 2: Fascinating to hear him talk on Univision about his plans

469
00:25:30,400 --> 00:25:33,760
Speaker 2: to take executive action here in lieu of a legislative solution.

470
00:25:33,840 --> 00:25:36,959
Speaker 2: Remember that compromise went up in smoke following Senate passagees

471
00:25:37,320 --> 00:25:39,800
Speaker 2: DOA in the House. So here we are again, quote,

472
00:25:39,880 --> 00:25:43,399
Speaker 2: we're examining whether or not I have that power unquote.

473
00:25:43,640 --> 00:25:45,760
Speaker 2: The President himself does not know if this will hold

474
00:25:45,840 --> 00:25:48,840
Speaker 2: up in court, as he seeks to tighten the definition

475
00:25:49,320 --> 00:25:51,439
Speaker 2: of asylum, and we wanted to get more into that

476
00:25:51,480 --> 00:25:54,320
Speaker 2: today with somebody who has some experience in that field.

477
00:25:54,400 --> 00:25:57,800
Speaker 2: Leon Fresco is with US former Deputy Assistant Attorney General

478
00:25:57,800 --> 00:26:00,720
Speaker 2: at the Department of Justice, Office of Immigration litigation is

479
00:26:00,760 --> 00:26:03,160
Speaker 2: now at Holland and Knight, Leon, Thank you for being

480
00:26:03,200 --> 00:26:03,560
Speaker 2: with us.

481
00:26:03,680 --> 00:26:05,560
Speaker 6: Is this going to be a protracted court battle? And

482
00:26:05,560 --> 00:26:06,399
Speaker 6: if so, who wins?

483
00:26:07,600 --> 00:26:10,960
Speaker 12: Well, absolutely it will be a protracted court battle because

484
00:26:11,080 --> 00:26:15,879
Speaker 12: the premise of the entire reason that the Republicans have

485
00:26:15,920 --> 00:26:19,480
Speaker 12: made this argument that there is an exclusion authority under

486
00:26:19,560 --> 00:26:23,000
Speaker 12: what is known as INA Section two twelve F is

487
00:26:23,040 --> 00:26:26,400
Speaker 12: because there's a ban and that travel ban is permitted,

488
00:26:26,920 --> 00:26:30,119
Speaker 12: but the ban is on this word called entry, meaning

489
00:26:30,440 --> 00:26:33,480
Speaker 12: if you're outside of the United States, you can be

490
00:26:33,600 --> 00:26:37,159
Speaker 12: banned from entering the United States. So you can be

491
00:26:37,200 --> 00:26:39,639
Speaker 12: banned from getting a visa, you can be banned when

492
00:26:39,680 --> 00:26:42,600
Speaker 12: you're at the airport. But here's the problem. Once you've

493
00:26:42,640 --> 00:26:46,679
Speaker 12: crossed illegally, there's hundreds of years of case law that

494
00:26:46,760 --> 00:26:49,159
Speaker 12: says that that is an entry, which is why you

495
00:26:49,240 --> 00:26:53,640
Speaker 12: can be charged criminally with illegal entry, and so then

496
00:26:53,720 --> 00:26:57,560
Speaker 12: the bar doesn't actually apply to you because you've already entered.

497
00:26:58,000 --> 00:27:00,159
Speaker 12: And at that point then the question is, well, you

498
00:27:00,200 --> 00:27:03,959
Speaker 12: ban people from applying for asylum, and so the answer

499
00:27:04,200 --> 00:27:07,000
Speaker 12: is yes, but that doesn't mean you can ban them

500
00:27:07,000 --> 00:27:10,679
Speaker 12: from applying for something else, which is called withholding of removal,

501
00:27:11,119 --> 00:27:15,560
Speaker 12: which is a statutory relief that is short of asylum,

502
00:27:15,560 --> 00:27:19,680
Speaker 12: but that lets people stay. And so these bars, those

503
00:27:19,720 --> 00:27:22,960
Speaker 12: are the two problems with them. Is one, will a

504
00:27:23,080 --> 00:27:25,720
Speaker 12: court actually let you get away? Well, a court actually

505
00:27:25,800 --> 00:27:28,840
Speaker 12: let you get away with not calling it an entry

506
00:27:28,920 --> 00:27:31,640
Speaker 12: when someone has already entered and saying yes, we can

507
00:27:31,680 --> 00:27:34,960
Speaker 12: kick them out because they haven't actually entered, that's one thing.

508
00:27:34,960 --> 00:27:37,720
Speaker 12: And then could you actually ban them from applying for

509
00:27:37,880 --> 00:27:40,480
Speaker 12: any sort of relief? And in both of those those

510
00:27:40,480 --> 00:27:43,760
Speaker 12: are things tried by President Trump, and President Trump was

511
00:27:43,800 --> 00:27:45,639
Speaker 12: unsuccessful on both of those grounds.

512
00:27:45,640 --> 00:27:47,360
Speaker 6: In the pipes my god.

513
00:27:47,520 --> 00:27:51,160
Speaker 2: Well, for those of us who are more confused than

514
00:27:51,240 --> 00:27:54,000
Speaker 2: when we started, leon, let me ask you about the

515
00:27:54,040 --> 00:27:56,840
Speaker 2: definition of asylum, because they tried to get to this

516
00:27:57,520 --> 00:28:01,160
Speaker 2: in the Senate compromise. These are people who are fleeing

517
00:28:01,720 --> 00:28:07,359
Speaker 2: obviously economic conditions as well as violent conditions, and the

518
00:28:07,440 --> 00:28:11,560
Speaker 2: idea was to tighten this definition to include only those

519
00:28:11,600 --> 00:28:14,080
Speaker 2: who were in physical harm. How do you think it

520
00:28:14,119 --> 00:28:15,760
Speaker 2: should read? What would stand up in court?

521
00:28:16,560 --> 00:28:20,560
Speaker 12: Well, the definition of asylum is what it is, which

522
00:28:20,640 --> 00:28:24,760
Speaker 12: is that you fear persecution on the basis of your race, religion,

523
00:28:24,880 --> 00:28:29,199
Speaker 12: national origin, social group, or political opinion. So basically on

524
00:28:29,280 --> 00:28:33,919
Speaker 12: an inutable factor of you specifically, not on the basis

525
00:28:34,320 --> 00:28:38,000
Speaker 12: of something that's happened happening economically in your country. The

526
00:28:38,160 --> 00:28:40,479
Speaker 12: problem has been with the burden of proof you have

527
00:28:40,560 --> 00:28:43,600
Speaker 12: to show to make your initial case that allows you

528
00:28:43,640 --> 00:28:47,120
Speaker 12: to stay for many years, and people have thought that

529
00:28:47,120 --> 00:28:51,600
Speaker 12: that initial burden, which is called credible fear, which is

530
00:28:51,760 --> 00:28:54,640
Speaker 12: one where you basically have to show the best is

531
00:28:54,960 --> 00:28:59,719
Speaker 12: a significant possibility that you could win, was too low,

532
00:29:00,320 --> 00:29:04,320
Speaker 12: and so administrations have tried to rent that up administratively.

533
00:29:04,640 --> 00:29:07,280
Speaker 12: But the problem is they can't change that because that

534
00:29:07,560 --> 00:29:11,600
Speaker 12: standard is in the statutory law. So all they can

535
00:29:11,680 --> 00:29:15,320
Speaker 12: do is basically issue memos that say, hey, remember what

536
00:29:15,440 --> 00:29:20,600
Speaker 12: the standard is, which triggers sort of a subliminal readout

537
00:29:20,680 --> 00:29:23,520
Speaker 12: to the agent, Hey, maybe you want to deny more cases.

538
00:29:23,840 --> 00:29:27,840
Speaker 12: But when that happens, then lawsuits happened because people say, hey,

539
00:29:28,120 --> 00:29:30,640
Speaker 12: what you're trying to do is actually change the standard

540
00:29:30,880 --> 00:29:34,560
Speaker 12: from what it actually is, which is why the president

541
00:29:34,640 --> 00:29:38,360
Speaker 12: was asking for a congressional change, so that that initial

542
00:29:38,440 --> 00:29:42,440
Speaker 12: threshold standard could be raised to something more definitive, or

543
00:29:42,480 --> 00:29:46,320
Speaker 12: you had to already present something more concrete than just

544
00:29:46,520 --> 00:29:50,959
Speaker 12: articulating some magic words Hey, I'm against the government in

545
00:29:51,000 --> 00:29:54,440
Speaker 12: my country, and so that's why I'm trying to come in,

546
00:29:55,000 --> 00:29:57,240
Speaker 12: and that that would be more You know that you

547
00:29:57,280 --> 00:29:59,160
Speaker 12: would need more than that. You would already need some

548
00:29:59,280 --> 00:30:03,360
Speaker 12: documents or something to show that you actually could justify

549
00:30:03,400 --> 00:30:05,320
Speaker 12: what you're saying in order for you to stay and

550
00:30:05,360 --> 00:30:06,840
Speaker 12: make the second part of your case.

551
00:30:07,880 --> 00:30:10,720
Speaker 2: Spending time with immigration attorney Leon Fresco at Holland and

552
00:30:10,840 --> 00:30:14,680
Speaker 2: Night getting back to this idea of qualifying entry. Leon

553
00:30:14,880 --> 00:30:18,960
Speaker 2: under section two twelve f of the Immigration and Nationality Act,

554
00:30:18,960 --> 00:30:24,120
Speaker 2: which Donald Trump tried to leverage repeatedly, it says that

555
00:30:24,160 --> 00:30:27,280
Speaker 2: the president has brought leeway to block entry of certain

556
00:30:27,280 --> 00:30:32,160
Speaker 2: immigrants if it would be detrimental to US national interests.

557
00:30:32,160 --> 00:30:33,880
Speaker 6: What qualifies as detrimental.

558
00:30:34,760 --> 00:30:37,920
Speaker 12: So there in the Trump versus Hawaii case, the court

559
00:30:37,960 --> 00:30:41,120
Speaker 12: actually gave President Trump. The Supreme Court and that was

560
00:30:41,160 --> 00:30:43,920
Speaker 12: when they remember, we had the travel ban, which first

561
00:30:44,000 --> 00:30:48,680
Speaker 12: started with during the election, the allegation that he would

562
00:30:48,680 --> 00:30:51,640
Speaker 12: ban all quote unquote Muslims, and then it kind of

563
00:30:51,680 --> 00:30:54,040
Speaker 12: shrunk it to a seven He kind of shrunk into

564
00:30:54,040 --> 00:30:57,680
Speaker 12: a seven country ban, and it was more security oriented

565
00:30:57,840 --> 00:31:01,360
Speaker 12: than Muslim orient that there was about whether those countries

566
00:31:01,400 --> 00:31:05,240
Speaker 12: had specific security thresholds in place. But in any case,

567
00:31:05,680 --> 00:31:09,080
Speaker 12: the Supreme Court gave broad authority to presidents to be

568
00:31:09,120 --> 00:31:12,680
Speaker 12: able to say that that was not reviewable that issue.

569
00:31:12,920 --> 00:31:17,160
Speaker 12: They only had to say that there was this there

570
00:31:17,320 --> 00:31:21,360
Speaker 12: was this reason, and as long as a reason was articulated,

571
00:31:21,640 --> 00:31:25,240
Speaker 12: then it wasn't reviewable. So the reason itself was not

572
00:31:25,560 --> 00:31:29,400
Speaker 12: relevant as long as it was articulated. And so there

573
00:31:29,440 --> 00:31:32,320
Speaker 12: that's a huge standard. But again, the problem isn't bad.

574
00:31:32,760 --> 00:31:37,280
Speaker 12: The problem is that the people coming across illegally are

575
00:31:37,320 --> 00:31:41,520
Speaker 12: already entering, which is what makes them liable for illegal entry.

576
00:31:41,960 --> 00:31:45,080
Speaker 12: So then you can't ban their entry because they've already entered.

577
00:31:45,480 --> 00:31:48,480
Speaker 12: The entries that can be banned are people who are outside,

578
00:31:48,880 --> 00:31:50,680
Speaker 12: or who are at the board of Entries, or who

579
00:31:50,720 --> 00:31:54,160
Speaker 12: are at the airport, but not the people who crossed illegally.

580
00:31:55,720 --> 00:32:00,000
Speaker 2: Leon, you're reminding me why I'm not a lawyer President Biden's,

581
00:32:00,000 --> 00:32:02,480
Speaker 2: he says, we're examining whether or not I have that power.

582
00:32:02,480 --> 00:32:04,680
Speaker 2: What's his legal team telling him? What should they be

583
00:32:04,720 --> 00:32:05,440
Speaker 2: telling him today?

584
00:32:06,040 --> 00:32:08,480
Speaker 12: Well, I think he's getting two kinds of advice. One

585
00:32:08,600 --> 00:32:11,000
Speaker 12: kind of advice is, look, just do it. Have the

586
00:32:11,040 --> 00:32:13,200
Speaker 12: court say it's illegal, and say, you see, I did

587
00:32:13,240 --> 00:32:17,960
Speaker 12: everything I could. You Republicans told me everything, told me

588
00:32:18,000 --> 00:32:20,640
Speaker 12: I had this power. I clearly didn't. Let's get back

589
00:32:20,680 --> 00:32:23,520
Speaker 12: to the drawing board and let's negotiate something. And then

590
00:32:23,560 --> 00:32:26,040
Speaker 12: the other lawyers are telling him you can't do it,

591
00:32:26,080 --> 00:32:28,840
Speaker 12: and you shouldn't do it because we don't pass laws

592
00:32:28,880 --> 00:32:30,960
Speaker 12: here that are going to get enjoined by the court.

593
00:32:31,000 --> 00:32:33,240
Speaker 12: We swore an ope not to do that. And he's

594
00:32:33,280 --> 00:32:35,440
Speaker 12: just got to decide which advice he wants to take

595
00:32:35,480 --> 00:32:36,320
Speaker 12: in that situation.

596
00:32:37,120 --> 00:32:39,560
Speaker 6: Do you think he's got an angel on one shoulder

597
00:32:39,560 --> 00:32:40,520
Speaker 6: and a devil on the other?

598
00:32:41,160 --> 00:32:41,640
Speaker 5: Correct?

599
00:32:41,760 --> 00:32:44,560
Speaker 12: And this is always the fifty to fifty burden of

600
00:32:44,600 --> 00:32:48,360
Speaker 12: any president in this situation is do you do it now?

601
00:32:48,680 --> 00:32:50,840
Speaker 12: You're always gonna have to have a credible argument because

602
00:32:50,880 --> 00:32:52,960
Speaker 12: you don't want the lawyers going to court to get

603
00:32:53,000 --> 00:32:55,560
Speaker 12: in trouble or get this barred that they've made a

604
00:32:55,640 --> 00:32:58,400
Speaker 12: ridiculous argument. So you're gonna have to do something that's

605
00:32:58,440 --> 00:33:01,240
Speaker 12: at least credible enough to pass the threshold of the

606
00:33:01,360 --> 00:33:05,520
Speaker 12: lawyers being sanctioned. But the point is, if you think

607
00:33:05,560 --> 00:33:09,160
Speaker 12: you're gonna win, then that's really what you should move forward.

608
00:33:09,520 --> 00:33:11,760
Speaker 12: But he might do it not thinking he's gonna win,

609
00:33:12,000 --> 00:33:14,720
Speaker 12: just so he can prove everybody that they were wrong.

610
00:33:14,840 --> 00:33:16,960
Speaker 12: I hear, because he'd ever had that power in the

611
00:33:17,000 --> 00:33:17,560
Speaker 12: first place.

612
00:33:18,640 --> 00:33:20,760
Speaker 2: Hey, Leon, thanks for coming to talk to us today,

613
00:33:20,920 --> 00:33:24,280
Speaker 2: Leon Fresco, Hollanden Knight, as we try to figure out

614
00:33:24,720 --> 00:33:27,040
Speaker 2: President Biden's next move on this one or what the

615
00:33:27,080 --> 00:33:29,960
Speaker 2: courts might say. Much more ahead on Balance of Power.

616
00:33:30,040 --> 00:33:30,920
Speaker 2: This is Bloomberg.

617
00:33:34,400 --> 00:33:37,680
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Can

618
00:33:37,880 --> 00:33:40,760
Speaker 1: just live weekdays at noon Eastern on Apple CarPlay and

619
00:33:40,760 --> 00:33:43,600
Speaker 1: then Ronoo with the Bloomberg Business app. You can also

620
00:33:43,640 --> 00:33:47,160
Speaker 1: listen live on Amazon Alexa from our flagship New York station.

621
00:33:47,560 --> 00:33:51,560
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

622
00:33:52,640 --> 00:33:55,480
Speaker 2: Certainly after yesterday's route and as we try to rebuild

623
00:33:55,480 --> 00:33:57,880
Speaker 2: things at least to some extent today, we want to

624
00:33:57,880 --> 00:33:59,720
Speaker 2: make sure you know what's happening in the markets. With

625
00:34:00,560 --> 00:34:02,800
Speaker 2: one day PPI, the next here we are do they

626
00:34:02,840 --> 00:34:03,800
Speaker 2: cancel each other out?

627
00:34:04,160 --> 00:34:05,320
Speaker 6: Remember how upset.

628
00:34:05,040 --> 00:34:07,280
Speaker 2: Everyone was around this time yesterday We had the end

629
00:34:07,280 --> 00:34:09,719
Speaker 2: of the world situation. We're never cutting rates again as

630
00:34:09,719 --> 00:34:13,359
Speaker 2: long as we're alive. And then twenty four hours later,

631
00:34:13,440 --> 00:34:16,719
Speaker 2: PPI and everyone starts turning in the other direction. Almost

632
00:34:16,840 --> 00:34:20,080
Speaker 2: a little bit of relief here on a very different

633
00:34:20,160 --> 00:34:23,280
Speaker 2: reading when it comes to wholesale inflation and the Fed's

634
00:34:23,400 --> 00:34:29,280
Speaker 2: preferred reading here, of course, the core Personal consumption Expenditures

635
00:34:29,360 --> 00:34:32,640
Speaker 2: Price Index, which I woke up thinking about this morning.

636
00:34:33,360 --> 00:34:35,759
Speaker 2: I'm Joe, Matthew and Washington, joined at the table by

637
00:34:35,800 --> 00:34:37,880
Speaker 2: Lindsay Owens of the Groundwork Collaborative.

638
00:34:37,920 --> 00:34:39,319
Speaker 6: She's with us at the table today.

639
00:34:39,360 --> 00:34:41,839
Speaker 2: Great to see you in studio here at Bloomberg. Thanks

640
00:34:41,920 --> 00:34:44,560
Speaker 2: for joining us. We last spoke around jobs Day. As

641
00:34:44,600 --> 00:34:48,800
Speaker 2: you reminded me, We've had two big data points since then. Yesterday,

642
00:34:48,880 --> 00:34:51,360
Speaker 2: as I said, people thought, okay, this is a problem

643
00:34:51,719 --> 00:34:54,719
Speaker 2: three months as a trend. Then you see something that

644
00:34:54,800 --> 00:34:58,279
Speaker 2: many people consider a leading indicator with the PPI data

645
00:34:58,440 --> 00:35:00,480
Speaker 2: this morning, and we feel a little bit better about things.

646
00:35:00,480 --> 00:35:00,880
Speaker 6: Where are you?

647
00:35:01,480 --> 00:35:01,640
Speaker 12: Yeah?

648
00:35:01,680 --> 00:35:04,280
Speaker 8: I mean, look, Job's Day was great. Last week.

649
00:35:04,680 --> 00:35:07,560
Speaker 11: We saw continued strength in the labor market. That's building

650
00:35:07,600 --> 00:35:10,160
Speaker 11: on continued strength in the economy overall. Right, we've had

651
00:35:10,200 --> 00:35:13,520
Speaker 11: great GDP numbers. I think folks sort of fell back

652
00:35:13,560 --> 00:35:15,799
Speaker 11: down to earth this week with the inflation numbers coming

653
00:35:15,840 --> 00:35:19,719
Speaker 11: in hotter than expected. Yesterday worrying that maybe inflation is

654
00:35:19,760 --> 00:35:22,560
Speaker 11: a bit stickier than we'd hoped, the sort of disinflation

655
00:35:22,719 --> 00:35:26,839
Speaker 11: story of twenty twenty three, you know, maybe eroding a bit.

656
00:35:26,880 --> 00:35:29,520
Speaker 11: But then you know, today's PPI numbers, I think give

657
00:35:29,600 --> 00:35:32,040
Speaker 11: us a little bit of hope. You know, they tell

658
00:35:32,120 --> 00:35:35,960
Speaker 11: us that the Fed's preferred gauge PCE is maybe softening

659
00:35:36,000 --> 00:35:38,879
Speaker 11: a touch, and you know, perhaps we'll still get those

660
00:35:38,920 --> 00:35:41,640
Speaker 11: rate cuts that we're hoping for from the Fed later

661
00:35:41,719 --> 00:35:45,839
Speaker 11: this year. I think for me, the question is, you know,

662
00:35:45,960 --> 00:35:49,719
Speaker 11: why would the Fed continue this high interst rate environment

663
00:35:50,440 --> 00:35:53,320
Speaker 11: for longer given what we saw under the hood yesterday

664
00:35:53,400 --> 00:35:57,799
Speaker 11: in those CPI numbers. Well, housing is really what's continuing

665
00:35:57,840 --> 00:36:02,200
Speaker 11: to drive CPI. And as you know, we don't get

666
00:36:02,239 --> 00:36:06,520
Speaker 11: relief in the housing market with higher interest rates. We

667
00:36:06,640 --> 00:36:11,040
Speaker 11: get higher mortgage rates putting pressure on rental prices. Right,

668
00:36:11,080 --> 00:36:14,359
Speaker 11: Folks aren't moving out of houses, and folks aren't leaving

669
00:36:14,360 --> 00:36:17,920
Speaker 11: the rental market to jump in and start buying. So

670
00:36:18,600 --> 00:36:20,719
Speaker 11: you know, the Fed's interest rate tool is not very

671
00:36:20,760 --> 00:36:23,560
Speaker 11: well matched for housing inflation. If anything, it may be

672
00:36:23,600 --> 00:36:26,680
Speaker 11: exacerbating housing inflation. And so that's the real sort of

673
00:36:26,760 --> 00:36:28,759
Speaker 11: paradox and predicament I think we're in here, is how

674
00:36:28,760 --> 00:36:29,360
Speaker 11: do we get out of this?

675
00:36:29,640 --> 00:36:32,719
Speaker 2: Sure without a building boom, Sure you're trying to take

676
00:36:32,760 --> 00:36:35,920
Speaker 2: another lever, But if you're Jay Powell, you're saying, look,

677
00:36:36,000 --> 00:36:38,560
Speaker 2: i mean we're not anywhere near two percent right now,

678
00:36:38,640 --> 00:36:40,759
Speaker 2: and the last thing I want to do is start cutting.

679
00:36:40,440 --> 00:36:42,279
Speaker 6: And have to start racing again. And I'm sure you

680
00:36:42,800 --> 00:36:45,440
Speaker 6: empathize with that. Yeah, I mean, he has history shows

681
00:36:45,480 --> 00:36:46,200
Speaker 6: the danger there.

682
00:36:46,320 --> 00:36:48,000
Speaker 11: He has one tool in his toolbox, right, he has

683
00:36:48,040 --> 00:36:50,480
Speaker 11: interest rates, and so that's what he's looking at. Is

684
00:36:50,480 --> 00:36:52,000
Speaker 11: he going to stay the course? Is he going to

685
00:36:52,000 --> 00:36:54,880
Speaker 11: be higher for longer? Is he going to sort of

686
00:36:54,920 --> 00:36:57,799
Speaker 11: continue with his promise to begin cutting this year? I mean,

687
00:36:57,840 --> 00:36:59,520
Speaker 11: my guess is the language that we'll see from the

688
00:36:59,560 --> 00:37:02,400
Speaker 11: FED won't change very much. It'll still talk about an

689
00:37:02,440 --> 00:37:05,040
Speaker 11: outlook of cuts beginning this year. But I think this

690
00:37:05,120 --> 00:37:07,600
Speaker 11: does maybe call into question how quickly they move to

691
00:37:07,640 --> 00:37:10,160
Speaker 11: the first cut, maybe puts June.

692
00:37:10,560 --> 00:37:11,960
Speaker 8: A little bit in the rear view mirror.

693
00:37:12,600 --> 00:37:15,799
Speaker 11: But I'm still I'm still optimistic that you know, that

694
00:37:15,960 --> 00:37:19,640
Speaker 11: really could see movements sooner this year in June, maybe

695
00:37:19,680 --> 00:37:21,760
Speaker 11: not June, but you know, still optimistic.

696
00:37:21,520 --> 00:37:22,919
Speaker 2: Because the worry is, oh, now there was a sudden

697
00:37:22,920 --> 00:37:24,680
Speaker 2: we're in political season. He's not going to want to

698
00:37:24,719 --> 00:37:27,080
Speaker 2: do anything in the fall. Does that apply at this point?

699
00:37:27,080 --> 00:37:29,080
Speaker 2: Whenevery other norm has been thrown out the window? Does

700
00:37:29,120 --> 00:37:31,040
Speaker 2: history matter? If j Palell thinks he needs to cut

701
00:37:31,120 --> 00:37:32,879
Speaker 2: rates in September, he's going to.

702
00:37:32,840 --> 00:37:35,040
Speaker 11: Do it, right, Yeah, I mean, look, federal reserved tres

703
00:37:35,080 --> 00:37:37,640
Speaker 11: have cut rates during election years before. There is no

704
00:37:37,840 --> 00:37:40,600
Speaker 11: law or rule that says you can't cut an interest

705
00:37:40,680 --> 00:37:41,719
Speaker 11: rate during an election year.

706
00:37:41,840 --> 00:37:44,879
Speaker 2: You know what people would say though, that it's political. Well,

707
00:37:44,920 --> 00:37:47,560
Speaker 2: he's auditioning for the job again. He's trying to of

708
00:37:47,600 --> 00:37:49,960
Speaker 2: course political that's that's that would be the refrain, and

709
00:37:49,960 --> 00:37:51,040
Speaker 2: that's what he's trying to avoid.

710
00:37:51,120 --> 00:37:52,560
Speaker 8: Yeah, he's trying to avoid politics.

711
00:37:52,560 --> 00:37:55,319
Speaker 11: Look, I think you know, in that case, I would

712
00:37:55,400 --> 00:37:58,480
Speaker 11: argue actually that you know, cutting rates earlier with more

713
00:37:58,640 --> 00:38:02,359
Speaker 11: gap between now and November is less political than sort

714
00:38:02,360 --> 00:38:04,040
Speaker 11: of moving to recuts in the fall.

715
00:38:04,400 --> 00:38:05,720
Speaker 8: Right on the eve of the election.

716
00:38:05,880 --> 00:38:09,400
Speaker 2: Did the President help Yesterday? He actually went there. We

717
00:38:09,440 --> 00:38:11,960
Speaker 2: can't get anybody to talk about the fedting. God knows,

718
00:38:12,000 --> 00:38:13,200
Speaker 2: we've tried.

719
00:38:13,480 --> 00:38:13,800
Speaker 6: I don't know.

720
00:38:14,080 --> 00:38:17,160
Speaker 2: Heather Bouchet, who's going to join us later today, Jared Bernstein.

721
00:38:17,280 --> 00:38:21,040
Speaker 2: They're trained to say we're not going there. As opposed

722
00:38:21,080 --> 00:38:23,200
Speaker 2: to the last administration. The president was tweeting at j

723
00:38:23,320 --> 00:38:25,719
Speaker 2: Powell every day. But yesterday Joe Biden, in front of

724
00:38:25,719 --> 00:38:27,759
Speaker 2: a rose garden full of reporters, says, there's going to

725
00:38:27,760 --> 00:38:29,080
Speaker 2: be a ray cut this year. You might have to

726
00:38:29,080 --> 00:38:31,600
Speaker 2: wait a month, he said, talking almost like somebody who

727
00:38:31,600 --> 00:38:34,560
Speaker 2: would come on Bloomberg. Did he cross the line or

728
00:38:34,760 --> 00:38:39,239
Speaker 2: did it at least change an unspoken policy.

729
00:38:38,760 --> 00:38:39,800
Speaker 6: At this White House?

730
00:38:39,920 --> 00:38:41,800
Speaker 11: Yeah? I mean, look, just like there's no rule against

731
00:38:41,840 --> 00:38:44,560
Speaker 11: the Federal Reserve chair cutting interest rates the election year,

732
00:38:44,800 --> 00:38:47,680
Speaker 11: there's a rule against the president talking about the Federal Reserve.

733
00:38:47,760 --> 00:38:48,640
Speaker 8: I think this kind of.

734
00:38:48,640 --> 00:38:51,440
Speaker 2: But they reinforced that independence when they came into office.

735
00:38:51,480 --> 00:38:51,719
Speaker 8: They do.

736
00:38:51,920 --> 00:38:54,319
Speaker 11: I mean, but it's really custom, it's not law. These

737
00:38:54,320 --> 00:38:57,440
Speaker 11: are norms, you know, not hard and fast rules. And

738
00:38:57,880 --> 00:39:00,440
Speaker 11: I actually think it's a disservice. And so ways, the

739
00:39:00,440 --> 00:39:03,520
Speaker 11: American people should be hearing from the President about his

740
00:39:03,600 --> 00:39:05,600
Speaker 11: plans to bring down inflation, and they should be hearing

741
00:39:05,600 --> 00:39:08,720
Speaker 11: from the President whether or not he thinks interest rates

742
00:39:08,760 --> 00:39:11,280
Speaker 11: are helping or hurting. And I think in this case, again,

743
00:39:12,040 --> 00:39:15,040
Speaker 11: you know where we see housing driving a huge percentage

744
00:39:15,080 --> 00:39:17,759
Speaker 11: of continued inflation, and the interest rate environment is not

745
00:39:17,840 --> 00:39:18,439
Speaker 11: our front here.

746
00:39:20,719 --> 00:39:22,879
Speaker 2: I suspect he's going to lean into this more as

747
00:39:23,000 --> 00:39:26,040
Speaker 2: we get closer to the election. We'll see what happens

748
00:39:26,080 --> 00:39:30,640
Speaker 2: to the economy. You wonder how much his political fortunes

749
00:39:32,120 --> 00:39:33,920
Speaker 2: lie in a soft landing, if we can call I

750
00:39:33,960 --> 00:39:35,600
Speaker 2: don't know if we're even beyond calling it that at

751
00:39:35,600 --> 00:39:37,200
Speaker 2: this point. Some people think we're already in one.

752
00:39:37,600 --> 00:39:37,799
Speaker 3: Yeah.

753
00:39:37,840 --> 00:39:40,360
Speaker 11: Look, I think obviously the economy is going to be

754
00:39:40,440 --> 00:39:43,719
Speaker 11: a huge part of the story in November, and I

755
00:39:43,760 --> 00:39:46,640
Speaker 11: don't think a high interest rate environment helps President Biden.

756
00:39:46,719 --> 00:39:50,640
Speaker 11: I mean, punishingly high borrowing costs for families. They notice those,

757
00:39:50,760 --> 00:39:53,319
Speaker 11: and they're frustrated by those, and they'd like to see

758
00:39:53,320 --> 00:39:56,840
Speaker 11: those go down. So the President is surely aware of that. Obviously,

759
00:39:56,880 --> 00:39:59,520
Speaker 11: continued high prices are a problem too. I think he's

760
00:39:59,560 --> 00:40:01,399
Speaker 11: done a great, great job, and you know, he did

761
00:40:01,400 --> 00:40:04,880
Speaker 11: this yesterday as well, at pointing out that there's a

762
00:40:04,920 --> 00:40:08,040
Speaker 11: place where we could see inflation come down considerably, where

763
00:40:08,040 --> 00:40:09,719
Speaker 11: we could get a lot of pricing back.

764
00:40:09,680 --> 00:40:11,000
Speaker 8: And that's in the markup channel.

765
00:40:11,640 --> 00:40:14,560
Speaker 11: You know, continued high actually, you know right before the

766
00:40:15,520 --> 00:40:18,480
Speaker 11: you know, the easter break, we saw corporate profits come

767
00:40:18,480 --> 00:40:20,560
Speaker 11: in at their all time record high, not a post

768
00:40:20,560 --> 00:40:23,120
Speaker 11: pandemic record high, a true all time record high.

769
00:40:23,600 --> 00:40:24,960
Speaker 8: And markups are up as well.

770
00:40:25,080 --> 00:40:27,400
Speaker 11: And you know, the President has said repeatedly that he

771
00:40:27,480 --> 00:40:29,960
Speaker 11: thinks markups are a place where we could see softening

772
00:40:30,000 --> 00:40:32,440
Speaker 11: and prices, And you know, just yesterday he mentioned that

773
00:40:33,040 --> 00:40:35,360
Speaker 11: he'd like to see those sort of record high grocery

774
00:40:35,400 --> 00:40:39,120
Speaker 11: margins he passed back to consumers in terms of, you know,

775
00:40:39,160 --> 00:40:40,359
Speaker 11: in the form of lower food prices.

776
00:40:40,440 --> 00:40:42,600
Speaker 2: Well, why did you mention that, because actually one of

777
00:40:42,640 --> 00:40:45,200
Speaker 2: the positive refrains from the CPI was food wasn't as

778
00:40:45,239 --> 00:40:48,760
Speaker 2: bad as its How worried are you about grocery prices?

779
00:40:48,840 --> 00:40:50,719
Speaker 2: There's a real political side to this because just like

780
00:40:50,760 --> 00:40:52,359
Speaker 2: gas prices, people see it every day.

781
00:40:52,560 --> 00:40:52,759
Speaker 8: Yeah.

782
00:40:52,800 --> 00:40:55,960
Speaker 11: Look, I mean here's the here's the rub for the consumer.

783
00:40:56,560 --> 00:40:59,600
Speaker 11: Disinflation doesn't mean lower prices, right. The fact that prices

784
00:40:59,600 --> 00:41:02,040
Speaker 11: stop accelerating doesn't mean that you go to a grocery

785
00:41:02,040 --> 00:41:04,640
Speaker 11: store and you know the price of eggs doesn't take

786
00:41:04,680 --> 00:41:08,320
Speaker 11: your breath away, right, So the sticker shock, I don't think,

787
00:41:09,480 --> 00:41:12,560
Speaker 11: you know, really gets alleviated by today's numbers. But of course,

788
00:41:12,680 --> 00:41:14,160
Speaker 11: you know it's a positive sign that we don't have

789
00:41:14,200 --> 00:41:15,680
Speaker 11: continued to inflation in food.

790
00:41:15,880 --> 00:41:16,800
Speaker 6: Uh huh.

791
00:41:16,920 --> 00:41:20,000
Speaker 2: The other is energy, and we're looking at gas prices rising.

792
00:41:20,040 --> 00:41:22,640
Speaker 2: Of course, there's a seasonal pattern here, and the last

793
00:41:22,680 --> 00:41:24,560
Speaker 2: thing the president wants to hear about is four dollars

794
00:41:24,560 --> 00:41:24,920
Speaker 2: a gallon.

795
00:41:24,960 --> 00:41:26,920
Speaker 6: But that could happen. That is in some forecasts.

796
00:41:27,040 --> 00:41:27,600
Speaker 8: Absolutely.

797
00:41:27,640 --> 00:41:30,000
Speaker 11: I mean, we've got a seasonal pattern on gas prices

798
00:41:30,000 --> 00:41:30,720
Speaker 11: and energy prices.

799
00:41:30,760 --> 00:41:32,520
Speaker 8: We've also got geopolitical.

800
00:41:31,960 --> 00:41:36,240
Speaker 11: Factors now and looming that are going to affect energy prices.

801
00:41:36,320 --> 00:41:38,359
Speaker 11: And again I would just point out this is yet

802
00:41:38,360 --> 00:41:40,440
Speaker 11: another area where the feed is not going to be

803
00:41:40,520 --> 00:41:42,640
Speaker 11: much helped, and so we are really in a little

804
00:41:42,640 --> 00:41:45,200
Speaker 11: bit of a predicament here where the primary tool we're

805
00:41:45,280 --> 00:41:47,440
Speaker 11: using to bring down prices is probably not going to

806
00:41:47,440 --> 00:41:48,320
Speaker 11: give us a lot of relief.

807
00:41:48,440 --> 00:41:49,799
Speaker 2: Well, so when you sit down at the ground, we're

808
00:41:49,800 --> 00:41:52,360
Speaker 2: collaborative and consisted, consider where we're going to be in

809
00:41:52,400 --> 00:41:53,000
Speaker 2: six months.

810
00:41:54,000 --> 00:41:55,160
Speaker 6: What's your vision here?

811
00:41:55,360 --> 00:41:57,760
Speaker 2: Is it a no landing, is it a hot landing

812
00:41:57,840 --> 00:42:00,000
Speaker 2: like I heard this morning on Bloomberg Surveil.

813
00:42:00,320 --> 00:42:01,960
Speaker 6: What does it feel like in the fall?

814
00:42:02,440 --> 00:42:06,600
Speaker 11: Yeah, Look, we're really optimistic about the continued likelihood of

815
00:42:06,640 --> 00:42:07,400
Speaker 11: a soft landing.

816
00:42:07,480 --> 00:42:09,319
Speaker 8: You know, we've been saying for years that it.

817
00:42:09,320 --> 00:42:12,719
Speaker 11: Is possible to have both a strong labor market and

818
00:42:12,840 --> 00:42:15,399
Speaker 11: low prices, that we didn't have to choose between those that,

819
00:42:15,760 --> 00:42:18,240
Speaker 11: you know, the path forward for bringing down prices wasn't

820
00:42:18,480 --> 00:42:21,000
Speaker 11: eviscerating the labor market making us all too poor to

821
00:42:21,000 --> 00:42:23,759
Speaker 11: buy stuff, yeah, and bringing down prices that way. And

822
00:42:24,000 --> 00:42:28,840
Speaker 11: I do think, you know, overall, you know, this couple

823
00:42:28,880 --> 00:42:31,240
Speaker 11: of months hasn't been great on the inflation front, but overall,

824
00:42:31,239 --> 00:42:34,680
Speaker 11: what we've seen now is twenty six full months of

825
00:42:34,800 --> 00:42:38,960
Speaker 11: unemployment below four percent and inflation coming down off its

826
00:42:39,000 --> 00:42:41,399
Speaker 11: peak for you know, a year and a half now,

827
00:42:41,440 --> 00:42:44,240
Speaker 11: and so obviously, you know, we're not getting that straight

828
00:42:44,280 --> 00:42:46,360
Speaker 11: line on inflation that we'd like to see. But I

829
00:42:46,360 --> 00:42:49,160
Speaker 11: think overall the pattern is a strong labor market and

830
00:42:49,160 --> 00:42:52,400
Speaker 11: continued disinflation. And that's the story of a soft landing,

831
00:42:52,480 --> 00:42:54,640
Speaker 11: and that's the story of a strong economy that we're

832
00:42:54,640 --> 00:42:55,240
Speaker 11: hoping to see.

833
00:42:55,320 --> 00:42:59,640
Speaker 6: So you're actually projecting that that will happen. We're hoping

834
00:42:59,640 --> 00:43:01,160
Speaker 6: for it that's not already happened.

835
00:43:01,200 --> 00:43:01,640
Speaker 8: Absolutely.

836
00:43:01,760 --> 00:43:03,680
Speaker 2: Yeah, it's great to see you. Thanks for coming in

837
00:43:03,760 --> 00:43:06,640
Speaker 2: to talk to us in studio. As always, Lindsay Owens groundwork,

838
00:43:06,680 --> 00:43:10,000
Speaker 2: collaborative and a really interesting take on the economy that

839
00:43:10,040 --> 00:43:11,960
Speaker 2: we wanted to bring to you. Lindsay spent time as

840
00:43:11,960 --> 00:43:15,640
Speaker 2: an economic advisor to Senator Elizabeth Warren, to Congresswoman at

841
00:43:15,640 --> 00:43:19,200
Speaker 2: Primela Jaia Paul, and part of the equation here in Washington.

842
00:43:19,239 --> 00:43:21,760
Speaker 2: When we think about the interest rate cycle the impact

843
00:43:21,800 --> 00:43:24,239
Speaker 2: that it's having politically on this administration, Lindsay is.

844
00:43:24,160 --> 00:43:29,880
Speaker 6: A voice that we turn to. Thanks for listening to

845
00:43:29,920 --> 00:43:31,520
Speaker 6: the Balance of Power podcast.

846
00:43:32,120 --> 00:43:35,239
Speaker 2: Make sure to subscribe if you haven't already, at Apple, Spotify,

847
00:43:35,360 --> 00:43:37,920
Speaker 2: or wherever you get your podcasts, and you can find

848
00:43:38,000 --> 00:43:41,240
Speaker 2: us live every weekday from Washington, DC at noontime Eastern

849
00:43:41,520 --> 00:43:42,960
Speaker 2: at Bloomberg dot com.