Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with
Speaker 1: David Gura. Daily we bring you insight from the best
Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance
Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,
Speaker 1: on the Bloomberg At the morning on a Thursday, August.
Speaker 1: This is Bloomberg Surveillance on Bloomberg Radio. David Gurray in
Speaker 1: New York. Francy Laca with me in London. Tom King's
Speaker 1: summer vacation continues whereabouts unknown. Mr Keane, We'll see him
Speaker 1: back here on Tuesday of next week. Central bank policy
Speaker 1: makers have made their pilgrimage to northwestern Wyoming for the
Speaker 1: Kansas City feds Annual Economic Policies and Post. He will
Speaker 1: hear from the host of that event. Just a little
Speaker 1: later this hour, our colleague Michael McKee sits down with
Speaker 1: Esther George for a wide ranging conversation on monetary policy.
Speaker 1: So Francing Lack which joins me in London, and Ron
Speaker 1: Temple with me here in on our Bloomberg eleven three
Speaker 1: oh studios in New York. We just got off television
Speaker 1: with him. Had some great conversations, and let's circle back
Speaker 1: to monetary policy if we could. I started off on
Speaker 1: TV asking you what you're gonna be listening for from
Speaker 1: from Jackson Hole. Uh. Do you expect the conversation here
Speaker 1: largely to center on inflation? This is something that each
Speaker 1: of these banks is worrying about in its own specific way.
Speaker 1: I do think there will be quite a bit of
Speaker 1: conversation around inflation. I do think obviously, Janet yell and
Speaker 1: speech I believe is going to be about financial stability.
Speaker 1: Um so, the ultimate crux of the discussion should be
Speaker 1: around inflation and should be understanding what is structurally changed
Speaker 1: versus cyclical um so. As a you know, I think
Speaker 1: one of the things we've done a lot of work
Speaker 1: here on is understanding the Phillips curve e either relationship
Speaker 1: between unemployment wage growth, Understanding why even though unemployment has
Speaker 1: declined so far that wage growth is not accelerated more.
Speaker 1: It's a phenomenon across the U S, Germany and Japan.
Speaker 1: So I think there'll be a lot of conversation around
Speaker 1: topics like that and transitory factors affecting inflation. Hi, Ron,
Speaker 1: it's ranting from London. Do you believe that we still
Speaker 1: need to look at the Phillips curve or is it broken?
Speaker 1: Will it come back? It's hard to answer that with
Speaker 1: a high degree of confidence. In my view right now
Speaker 1: is that we should rely on the Phillips curve, and
Speaker 1: my base case assumption in the next one to two
Speaker 1: years is that it will reassert itself. Now we've done
Speaker 1: some interesting analysis here, by the way, Typically the Phillips
Speaker 1: curves looked at at the U three i e. The
Speaker 1: headline unemployment rate relative to wage growth. But if you
Speaker 1: use the U six, which is what people describe as
Speaker 1: the underemployment rate i e. People who are working part
Speaker 1: time but wish they could work full time, where they're
Speaker 1: discouraged workers, Um, there's actually a much higher correlation between
Speaker 1: that U six and the wage growth. And I do
Speaker 1: think as the U six or the underemployment rate continues
Speaker 1: to decline, we should see the Phillips curve reassert itself
Speaker 1: in the US over the next couple of years. Yeah.
Speaker 1: I like that U three U six. I think it
Speaker 1: was a Thomas chart of the year a couple of
Speaker 1: weeks ago. You look, if you look at Jackson Hall
Speaker 1: and we had you on TV and you basically believe
Speaker 1: that the policy mistake would come from the FED or
Speaker 1: anyone else was hiking too soon because they need to wait,
Speaker 1: in your eyes, for inflation to really come through. But
Speaker 1: where will the biggest policy mistake come from? Is it
Speaker 1: b O J? Is it Fed? Is it B O
Speaker 1: E or E C D? I mean that stuff it
Speaker 1: does seem Let's let's talk about probability versus severity. So
Speaker 1: in terms of the probability the highest probability of mistake,
Speaker 1: I would have to say it still seems to be
Speaker 1: the FED, because the FED is taking a very hawkish
Speaker 1: line in terms of their commentary that they make in
Speaker 1: the speeches. UM, it does seem that there's been an
Speaker 1: extreme level of discomfort with the UM the unprecedented monetary
Speaker 1: policy measures they had to take during the crisis, and
Speaker 1: there's an eagerness to get out of those now. I
Speaker 1: think that would be the FED would be well advised
Speaker 1: to pull back a bit and allow their policies to
Speaker 1: have a chance to succeed. I would argue, frankly, they
Speaker 1: could have been more aggressive than they were. UM. In
Speaker 1: terms of the severity of mistake, I think if the
Speaker 1: B O J were to surprise markets by starting normalized early.
Speaker 1: That would be an incredibly damaging UH factor. I also note,
Speaker 1: obviously the news you've reported this morning about business encouraging
Speaker 1: a BEY to raise taxes, I think would be a
Speaker 1: major mistake. In Japan, we we finally got six quarters
Speaker 1: of GDP growth. Let's not nip this recovery in the
Speaker 1: bud front temple with us SEES the co had of
Speaker 1: multi asset investment Lizard Asset Management. Just on the broader
Speaker 1: subject of monetary policy and how that dovetails with with
Speaker 1: the markets, to what degree is that the biggest influencer
Speaker 1: of where markets are right now? You know that that's
Speaker 1: that's one of the good news items in the last
Speaker 1: stage six to nine months, actually nine to twelve months,
Speaker 1: is that monetary policy has receded a bit in terms
Speaker 1: of the background. If I look back over the last
Speaker 1: several years, there are periods of time where it felt
Speaker 1: like monetary policy was the singular focus of markets, and
Speaker 1: I do think, you know, one one piece of evidence
Speaker 1: of that is correlations within the market and cross markets
Speaker 1: have actually declined quite a bit. Um so I think
Speaker 1: that's been quite positive, especially for firms like ourselves that
Speaker 1: are really focused on security. Selection is an opportunity to
Speaker 1: see differentiation between companies that win and lose based on
Speaker 1: the economy, not just what the FED or the C B, R,
Speaker 1: B O J do. So I think it has received somewhat,
Speaker 1: but it's still very important in that it could undermine
Speaker 1: the economic recovery or that synchronized global growth we see
Speaker 1: right now. A friend and I talked to Chris sim
Speaker 1: Is from Princeton yesterday, the Nobel Laureate, about the handoff
Speaker 1: between monetary policy to fiscal policy and how that's been
Speaker 1: fumbled a little bit here in the US. I think
Speaker 1: you could say, how long do you do you give
Speaker 1: that to work? In other words, we've heard the clarion
Speaker 1: call for so long that there needs to be that
Speaker 1: shift take place here in the US, and it seemed
Speaker 1: like there was the opportunity for it to happen, at
Speaker 1: least in the immediate aftermath of the presidential election. Uh
Speaker 1: do you have you if you have you given up
Speaker 1: on that happening yet? Well? I mean to be fair,
Speaker 1: I think that the real disappointment is that fiscal policy
Speaker 1: should should have been much more aggressive back in two
Speaker 1: thousand and eight and two thousand nine. I mean, that's
Speaker 1: that's when we were basically falling into the abyss. We
Speaker 1: did actually have a seven eighty seven billion dollar fiscal
Speaker 1: stimulus package in the US, but it's easy to forget
Speaker 1: that only a small part of that. I believe something
Speaker 1: on the order of eighty billion dollars was infrastructure. UM
Speaker 1: I could argue you should have had five hundred billion
Speaker 1: to eight hundred billions of infrastructure alone. UM So I
Speaker 1: do think, you know that was the time for a
Speaker 1: major fiscal stimulus. At this point in the cycle, I
Speaker 1: think fiscal stimulus is less necessary. But what we do
Speaker 1: still need is investment to increase the long term productivity
Speaker 1: of this economy through infrastructure, through job training for people
Speaker 1: who have been displaced by trade. Um and basically we
Speaker 1: also need tax reform to basically give businesses confidence and
Speaker 1: how they should invest. What's pricing at the moment run,
Speaker 1: if anything, what's pressing a price priced in? Price priced in?
Speaker 1: I think very little is priced in In In terms of
Speaker 1: policy change. I think the markets have basically reached the
Speaker 1: conclusion that you know that we discussed some good ideas,
Speaker 1: some frankly bad ideas, but very few of those ideas
Speaker 1: will be implemented because there's not the organization in the
Speaker 1: White House um and collaboration between the White House and
Speaker 1: the Congress to get things done right. So if you
Speaker 1: do see, for example, some tax reform because the Trump
Speaker 1: administration says they need to do it a sp to
Speaker 1: kind of get away from all the controversies, that would
Speaker 1: play it on equities, but also affect treasuries or not,
Speaker 1: it should affect both. I mean, let this be very
Speaker 1: clear to in terms of semantics. I mean early on
Speaker 1: we talked in I actually just use the term tax reform. Typically,
Speaker 1: tax reform is intended to mean revenue neutral. I EU
Speaker 1: some tax rates, streamline the tax code, but find ways
Speaker 1: to replace that revenue. I think the probability of that
Speaker 1: is less than five percent at this point. I think
Speaker 1: what we're really talking about right now is tax cuts,
Speaker 1: which will increase the deficit and should have a a
Speaker 1: long term arguable depending on the structure of the tax cuts,
Speaker 1: a negative implication for bond prices and e higher yields
Speaker 1: because of the credit quality of the sovereign um. So
Speaker 1: we'll see how that plays out. But even if President
Speaker 1: Trump does come out and say I want tax cuts
Speaker 1: right now, leadership is not a tweet. Leadership is actually
Speaker 1: delineating what kind of tax cuts, what form, and then
Speaker 1: actually engaging with Congress effectively on a sustained basis to
Speaker 1: make sure it happens. And so far that's really been
Speaker 1: missing in the policy action. I'm struck around reading your
Speaker 1: your research, how optimistic you are about the global economy generally,
Speaker 1: Given that, where do you see the most opportunity? Now,
Speaker 1: I mean it's it's it's it's I think emerging markets
Speaker 1: again still have the best opportunity, partly because they are
Speaker 1: basically just coming off the bottom in terms of commodity
Speaker 1: price stabilization and worries around FED policy. And the valuations
Speaker 1: importantly are although above historical levels, not as far above
Speaker 1: as say Europe and the US. Just give you a
Speaker 1: sense a magnitude relative for the Ford median, the median
Speaker 1: forward Pe over the last ten years, emerging markets is
Speaker 1: one and a half pe multiples rich. Europe is about
Speaker 1: two points seven rich. In the US is three and
Speaker 1: a half multiples rich. So you are paying a premium
Speaker 1: to history, but not as much, and earnings arguably are
Speaker 1: still depressed in these countries. So I like the U
Speaker 1: S and I like European equities, but I think I'm
Speaker 1: probably offers a better, say, three year view than those
Speaker 1: developed economies. Quick bite, If I could get you to
Speaker 1: talk about China a little bit as well. We've been
Speaker 1: following news about the country trying to reduce its capital outflows.
Speaker 1: How does that how does that change the level of
Speaker 1: opportunity there for you? Ye, China's obviously, I think for
Speaker 1: any foreign or visiting China and investigating China, it is
Speaker 1: more opaque than these, say, European, US Japanese economies. I
Speaker 1: do think China has done a good job of stimulating
Speaker 1: growth in the short term and early two thousand and
Speaker 1: sixteen with credit and fiscal stimulus UM. But I do
Speaker 1: think the biggest challenge facing China is the Everett humulating
Speaker 1: pile of corporate debt um. We've seen corporate debt go
Speaker 1: from a hundred thirty eight percent of GDP in two
Speaker 1: thousand eleven in two thousand and sixteen. That basically implies
Speaker 1: a hundred eighteen percent increase in corporate debt in four years,
Speaker 1: and so China needs to basically wean itself from the
Speaker 1: heroine of debt and basically continue rebalancing economy now. To
Speaker 1: be fair to them, they've done a good job of
Speaker 1: moving more to services. But but it's gonna be a challenge.
Speaker 1: And as it relates to capital flows, I think the
Speaker 1: biggest issue in capital flows is controlling the boom bus
Speaker 1: cycle in real estate. Um, every time we have a
Speaker 1: boom in real estate and proceeding follows to a bust,
Speaker 1: we see capital flows increase. And I think the Chinese
Speaker 1: authorities have recognized that. Ron, Thank you so much, Fron
Speaker 1: Temple there what a way with words? He is Lazar
Speaker 1: Asset Management Managing Director. In the meantime, the focus of
Speaker 1: course a turn inning turning on Jackson Hole and the
Speaker 1: central bankers meeting there, the dollar strengthening, stocks in Europe
Speaker 1: advancing David Garry here in York, Francy in London, A
Speaker 1: frenzy local in London. Aside, now four weeks into the shift,
Speaker 1: begin to watch things like that. I think it's greatly
Speaker 1: in London. Will to make the change. David Washington, there
Speaker 1: you go, perfect, Uh want to flag some news here
Speaker 1: out of Venezuela. Washington in Venezuela, Washington levied some sanctions
Speaker 1: on individuals related to Venezuela they're now reportedly considering blocking
Speaker 1: trades of Venezuela and held dollar denominated notes sold by
Speaker 1: the government and the state run oil company. Here to
Speaker 1: talk about this with us as Shannon O'Neill, she's a
Speaker 1: senior fellow at the Council on Foreign Relations, And as
Speaker 1: we get into this, I'm curious, this is a country
Speaker 1: that has not defaulted on its debt despite the worsening
Speaker 1: political and economic situation there. There seems to be a
Speaker 1: a real sense of of strength or dedication here to
Speaker 1: not defaulting. How likely is that to continue? Do you think? Well,
Speaker 1: we have seen that they have chosen to pay their
Speaker 1: interest and some principle over paying for basic food, in
Speaker 1: medicine and the like, especially as oil prices will come
Speaker 1: down there's less cash flowing around Venezuela. They've chosen to
Speaker 1: pay creditors and not feed their people, and they will
Speaker 1: continue to do that, I think, as long as they can.
Speaker 1: The question is, they've been running down their reserves, they've
Speaker 1: been selling off assets, they've been trying to get money
Speaker 1: from Russia and China other places, and they're coming to
Speaker 1: the point where there's really nowhere else to go for money,
Speaker 1: and particularly if the United States would put sanctions on
Speaker 1: and make it harder for them in financial markets, are
Speaker 1: harder for them to sell their oil around the world.
Speaker 1: It would be very difficult to continue servicing this debt.
Speaker 1: I ask you about rhetoric. I spent some time in
Speaker 1: Bolivia in the early two thousands, and strong rhetoric from
Speaker 1: the US had a very positive effect, as I heard it,
Speaker 1: among the rhetoric that you would hear domestically, that that
Speaker 1: could be spun kind of countintuitively in a positive way
Speaker 1: in that country. Here we see strengthened, harsher rhetoric from
Speaker 1: the US with regard to Venezuela. We're hearing the word
Speaker 1: dictatorship and dictator used now regularly by senior administration officials.
Speaker 1: What's the effect of that been here on the situation
Speaker 1: in Venezuela domestically, Well, it looks like it may be
Speaker 1: providing Maduro, the president of Venezuela, a bit of a lifeline.
Speaker 1: Um he has and those before him, have created, all
Speaker 1: by themselves, a huge humanitarian and financial and economic crisis
Speaker 1: that's happening, real catastrophe that is all of their own making.
Speaker 1: But when the United States steps in and with this
Speaker 1: kind of rhetoric or perhaps even moving further into sanctions
Speaker 1: and the like. It gives them an excuse, it gives
Speaker 1: them an outside enemy. And while we in the United
Speaker 1: States tend to look to the president in the future,
Speaker 1: Latin American countries really focus often on the past, on
Speaker 1: history and the what they see is sort of imperials
Speaker 1: in the United States intervening in the region. So there
Speaker 1: is this reflex action against this tough talk. All right,
Speaker 1: what's the best thing to do here? Shouton I mean,
Speaker 1: you see that there's a possible but and also in
Speaker 1: certain trades, but then that would also heard off or
Speaker 1: cut off a lifeline to, you know, a country which
Speaker 1: is heavily indebted. There is a real challenge for the
Speaker 1: United States. As much as they want to do something
Speaker 1: tough on Venezuela, as democracy ends there, as there's a
Speaker 1: crackdown on the opposition, it's hard to know what to do.
Speaker 1: And really the most successful policies, I would say, would
Speaker 1: be ones that bring other Latin American nations in to
Speaker 1: condemn this regime. And there are many options out there.
Speaker 1: There are a lot of presidents who have stepped up,
Speaker 1: whether Medicio Macri and Argentina, Paninieto in Mexico, the President
Speaker 1: Peru of Chile. Many of these see the end of
Speaker 1: democracy there as a huge problem for the region, so
Speaker 1: their allies there, but tough funeralateral actions in the United
Speaker 1: States will drive them away rather than bring them together.
Speaker 1: I mean, it seems that the President has not really
Speaker 1: ruled out a military option in Venezuela. What does that
Speaker 1: mean for for the country. He did mention that that
Speaker 1: this Department of Defense walked back pretty quickly from what
Speaker 1: that might mean, um, And it's hard to imagine even
Speaker 1: what that would look like, um, some sort of military
Speaker 1: intervention there. I think one thing you might see is,
Speaker 1: particularly the humanitarian crisis deepens, you could imagine the United
Speaker 1: States government, in part the Department of Defense helping with
Speaker 1: some of that movement of people that are flooding today
Speaker 1: already into Columbia, Brazil and other countries nearby. Just lastly,
Speaker 1: here in the minute we have left with you, let
Speaker 1: me ask you about the status of the NAFTA renegotiation efforts.
Speaker 1: We have the first round of those meetings here over
Speaker 1: the last week or so. What are you watching, what
Speaker 1: are you listening for? As they get underway? I gather
Speaker 1: they meet again on September the first for the next round.
Speaker 1: They have decided a lightning round of renegotiations here and
Speaker 1: meetings to try to change nap TO to to update NAFTA.
Speaker 1: And so what I'm watching is do that continue? Do
Speaker 1: they really think they can end this by the end
Speaker 1: of the year or beginning of two thousand eighteen. If
Speaker 1: they stick to that schedule, then I wouldn't expect big
Speaker 1: changes to NAFTA, or the changes I would expect would
Speaker 1: be the ones that I have already been negotiated in TPP,
Speaker 1: the Trans Pacific Partnership. Great to speak here, Thanks for
Speaker 1: thanks for coming in. Shannon O'Neil from the Council on
Speaker 1: Formulations who joined us here on Bloomberg Surveillance on Bloomberg
Speaker 1: Radio Bloomberg Television as well. You can check out her
Speaker 1: interview there on Bloomberg dot com or on the Bloomberg terminal.
Speaker 1: This is the forty one Economic Symposium for the Kansas
Speaker 1: City Fed here in Jackson Hall, and Ester George, the
Speaker 1: President of the Kansas City Fed, is the host. And
Speaker 1: you've been here for all No, not really, neither of IY.
Speaker 1: This has changed significantly over the years the TV presence,
Speaker 1: the focus on it. Janet Yellen is speaking on Friday,
Speaker 1: Mario dragging speaking on Friday, Global Wall Street on the
Speaker 1: edge of their chairs, expecting them to make news. But
Speaker 1: that's not what this was designed to do. Know, the
Speaker 1: purpose of the conference is really to dig into issues
Speaker 1: that we think matter to central banking, matter to monetary policy,
Speaker 1: and ultimately matter to the real economy. And so you
Speaker 1: want people on the program that are thoughtful about those issues,
Speaker 1: that can debate those issues, bring different perspectives to them.
Speaker 1: And that's really our goal every year is to try
Speaker 1: to have a relevant topic that will add to our
Speaker 1: understanding of these issues. Well, the relevant topic for people
Speaker 1: on Wall Street lately has been inflation. So let's talk
Speaker 1: about that a little bit. You've long argued in favor
Speaker 1: of higher rates to head off inflation, and people have
Speaker 1: said Estra George is wrong because there's no inflation. What
Speaker 1: if we flip that argument on its head and say
Speaker 1: you've raised rates and there's no inflation, have you accomplished
Speaker 1: what you set out to do? So? And I think
Speaker 1: about inflation, Mike, I think about our mandate, which is
Speaker 1: price stability and relative to an economy that's growing at
Speaker 1: two and is adding jobs. I think we're in a
Speaker 1: pretty good place, and we still have very accommodative monetary policy,
Speaker 1: So that tells me we should begin to, as we've indicated,
Speaker 1: gradually removing that accommodation as long as the outlook supports
Speaker 1: that we are moving in the right direction, and I
Speaker 1: think we are. So that suggests you are in favor
Speaker 1: of yet another rate move this year, as the dot
Speaker 1: plot would indicate. So that was my last forecast, and
Speaker 1: each time we put those together is a new opportunity
Speaker 1: to look at the data. So I'll be looking at
Speaker 1: the data in the next few weeks as we get
Speaker 1: ready for the September meeting and see whether that still
Speaker 1: makes sense. Based on what I've seen today, I think
Speaker 1: there's still opportunity to do that, so by the end
Speaker 1: of the year, not necessarily in September. No, No, that's
Speaker 1: I don't pick a meeting, and I don't consider that
Speaker 1: rate path in those projections a commitment. So I think
Speaker 1: it is a general sense of where rates should go
Speaker 1: well to what extent is inflation a lagging indicator. It's
Speaker 1: something FED officials have argued for a long time. In
Speaker 1: other words, is the Phillips curve broken or is nayru
Speaker 1: lower than it has been in the past. What's happened
Speaker 1: to inflation? Well, I don't know that I'm going to
Speaker 1: have a good answer for you there because many people
Speaker 1: are studying that very issue. The things I look at
Speaker 1: when I look at inflation, so goods, the price of
Speaker 1: goods that's been falling. Maybe that's due to technology. There
Speaker 1: are a number of factors that I think may be
Speaker 1: pressing down. When you look at services, which is two
Speaker 1: thirds of the economy, you see that those rates are
Speaker 1: actually staying at two percent and higher. So in the
Speaker 1: context of the economy we have today, that's why I
Speaker 1: think you have to be careful getting to focus on
Speaker 1: a point estimate as opposed to the broader trends that
Speaker 1: you see and the expectations that are out there. Well,
Speaker 1: speaking of expectations, with inflation not rising and you've had
Speaker 1: five months of disappointments and the CPI market expectations are falling,
Speaker 1: is that a problem for a FED that has always
Speaker 1: said expectations are key to keeping prices stable. So I
Speaker 1: think you have to pay very careful attention to that,
Speaker 1: and I would include myself there but again you have
Speaker 1: to know what drives those expectations, and that's the challenge
Speaker 1: is constantly looking at what's going on in the economy,
Speaker 1: what might be reflected in those numbers, as opposed to
Speaker 1: overreacting to UH some specific point estimate that you see.
Speaker 1: You do have new forecasts for growth and inflation and
Speaker 1: unemployment coming out in September. How have yours changed or
Speaker 1: have they changed at all as the economy has evolved? Well,
Speaker 1: in my own case, unemployment has come down faster than
Speaker 1: some of my projections. UM, inflation has stayed lower on
Speaker 1: the whole, I think over this period, and the economy
Speaker 1: did not take off, I think as many of us
Speaker 1: hoped it would, but it's been coming in at a
Speaker 1: two pretty steady rate of growth. So this month marks
Speaker 1: consecutive month of growth in our economy, and I think
Speaker 1: it gives us a better sense as we look forward
Speaker 1: that that might be what we expect. Do you have
Speaker 1: any reason to mark up or mark down your growth forecast?
Speaker 1: So not at this point. I'm encouraged that the global
Speaker 1: economy UM is looking better and you see growth beginning
Speaker 1: to pick up. Um In terms of domestic policies that
Speaker 1: might have posed an upside uh to whether it's infrastructure spending,
Speaker 1: tax reform, and other things. I've always taken a weight
Speaker 1: and see approach on that, and I'll continue to do that.
Speaker 1: The Open Market Committee has said that it still expects
Speaker 1: inflation to hit the two percent target, maybe not as
Speaker 1: soon as we thought. But are you ready to throw
Speaker 1: in the towel? I mean, at what point do you
Speaker 1: say this is not happening, there's something wrong with our models. Well,
Speaker 1: there may in fact be something wrong with the models.
Speaker 1: I don't know. I think that continues to be a
Speaker 1: question that many economists are asking. But I also know
Speaker 1: that what we need to look to is the long run.
Speaker 1: So whether we hit on the nose um is less
Speaker 1: important to me than understanding how the economy is doing
Speaker 1: more generally, And I think today the price level has
Speaker 1: continued to grow, the rate of change has bounced around,
Speaker 1: and right now it continues to run below two. That
Speaker 1: doesn't concern me about the health of the economy. There
Speaker 1: then a lot of talk about financial stability. Jennet Yellen
Speaker 1: is going to speak on it on Friday. With financial
Speaker 1: conditions easy, even though you've raised rates and stock prices
Speaker 1: continuing to rise, to new records. Is that a reason
Speaker 1: to continue raising interest rates? Do you have a concern
Speaker 1: arn about the level of asset prices? Well, I think
Speaker 1: the QUEUEI that was undertaken over the last ten years
Speaker 1: aimed at boosting asset values. So when you see that
Speaker 1: we've made four rate moves since December and financial conditions
Speaker 1: have eased, UH, that I think points to the idea
Speaker 1: that we need to adjust the balance sheet. That's a
Speaker 1: tool we haven't had experience with, and so I think
Speaker 1: that's an important next step to be looking at that.
Speaker 1: I want to ask you about the balance sheet, but
Speaker 1: let me just quickly follow that and ask you if
Speaker 1: investors too complacent these days. I don't know. I think
Speaker 1: you'll have to see where that comes out. But as
Speaker 1: I said, when you set conditions that have had easy
Speaker 1: monetary policy for a long time, the incentives to reach
Speaker 1: for yield UH, the committee signals that it will be
Speaker 1: gradual could feed into that, and UM, I watch those
Speaker 1: asset values carefully, but I'm not sure there's anything you
Speaker 1: can target specifically when it comes to setting policy. Right
Speaker 1: the balance sheet taper. Wall Street is betting it's September
Speaker 1: that you're going to announce it any reason that they
Speaker 1: would be wrong from your point of view. Well, I've
Speaker 1: been favored of doing this for some time, and I
Speaker 1: think the estimates suggests that the economy is in a
Speaker 1: good place to begin doing that. So I'll look forward
Speaker 1: to the discussion in September about that opportunity. Do you
Speaker 1: have any estimate of the impact on financial markets from that,
Speaker 1: particularly yields, and whether or not it will amount to
Speaker 1: a de facto tightening. Yeah, I've seen various estimates, and
Speaker 1: it's hard to know, again because we don't have experience
Speaker 1: doing this. You would expect, because of the duration of
Speaker 1: these assets, that as you begin to shrink that balance sheet. Um,
Speaker 1: I hope it does get reflected in the yield curve.
Speaker 1: How sensitive will you be to market reactions to the
Speaker 1: tapering process. Well, I think we're always taking that into account.
Speaker 1: Um whether it alters the path of policy, I think
Speaker 1: is a broader discussion about what else we see going on.
Speaker 1: Do you think asset prices deflate as you shrink the
Speaker 1: balance sheet in the way that they inflated when you
Speaker 1: blew up the balance sheet. I don't know. I've heard
Speaker 1: various views on that too, And again I wish I
Speaker 1: had some experience to draw on here. UM. What I
Speaker 1: know is the aim was to boost asset values. I
Speaker 1: think we've seen that. UM. Whether that ends up having
Speaker 1: a symmetric reaction on the other side, I think we
Speaker 1: have to wait and see. But I think again, the
Speaker 1: very gradual approach that's being taken there gives the committee time, UM,
Speaker 1: and it's given markets time to understand where that balance
Speaker 1: sheet is headed. The one thing you haven't told investors
Speaker 1: is how big the balance sheet is ultimately going to be,
Speaker 1: and that will depend on what monetary policy system you
Speaker 1: end up using. Are you in favor of staying with
Speaker 1: the current system of interest on access, reserves and repos
Speaker 1: or would you go back to UH strictly setting a
Speaker 1: FED funds target. Well, it's appealing to go back because
Speaker 1: we know how that looks, but we are where we
Speaker 1: are today and I think it makes sense to judge
Speaker 1: as we move forward how we see the economy unfold.
Speaker 1: What you don't know is you could get hit with
Speaker 1: a shock at any time. You'll have another set of
Speaker 1: decisions to make. So the ultimate operating framework is not
Speaker 1: something the Committee has um opined on yet. It's talked
Speaker 1: about it UM. There's been analysis under way, but I
Speaker 1: think for now we have to use I O we
Speaker 1: are we have to use the overnight reverse repo tools
Speaker 1: as part of how we begin to normalize policy. As
Speaker 1: part of the reasoning for why you want to do
Speaker 1: this now and for why you want to continue raising rates,
Speaker 1: is it because you need some cushion, you need some
Speaker 1: tools should the economy turn down. Well, I think that
Speaker 1: would be UM obviously attractive when you think about the
Speaker 1: next downturn. But I wouldn't say it's my primary motivation,
Speaker 1: because what you're trying to do is make sure that
Speaker 1: the economy is going to benefit in the ability to
Speaker 1: grow in a sustained fashion. So the motivation is where
Speaker 1: is unemployment, how is inflation performing? And do those suggests
Speaker 1: you need to begin to have interest rates reflect that?
Speaker 1: That's my motivation. Uh, whether it gives us all the
Speaker 1: ammunition we need at the time we next need to decide,
Speaker 1: that would be UM an added benefit. You know you
Speaker 1: gotta run. But let me ask you just quickly about
Speaker 1: this conference. Uh. The theme is creating a dynamic economy.
Speaker 1: What would esther George do? What's the most important thing
Speaker 1: to do going forward to create a dynamic economy. Well,
Speaker 1: we've seen in our own economy and you see this
Speaker 1: around the world. Changes that are happening because of technology,
Speaker 1: because of demographics, many things, and some of those will
Speaker 1: be talked here at this conference. What you want is
Speaker 1: sustainable growth that has broad effects, uh for the economies
Speaker 1: that you're in. And as the world changes because of
Speaker 1: some of these factors, um policies have to change, and
Speaker 1: that's really what we're after with this con and just
Speaker 1: try to bring more insight to where are those opportunities
Speaker 1: how might policymakers think about that going forwards. Finally, just
Speaker 1: one last quick question. I know you can't incorporate what's
Speaker 1: happening in Washington into your forecast because nobody knows what's
Speaker 1: happening in Washington, But do you worry about a debt
Speaker 1: ceiling crisis? Well, we've had experience with this over the
Speaker 1: last few years, and we know it creates uncertainty as
Speaker 1: it did a few years ago. It can affect the
Speaker 1: real economy. But I'm hopeful that um OUR policymakers can
Speaker 1: come to terms with that and take actions that will
Speaker 1: benefit the economy going forward. As I mentioned, Tim Plenty
Speaker 1: joins us now the former governor of the State of Minnesota,
Speaker 1: CEO and the financial services at round table. He's in
Speaker 1: our Bloomberg Studios in Washington, d C. And I want
Speaker 1: to sharp by just asking you to take stock at
Speaker 1: the last week plus, as we all have been doing.
Speaker 1: We certainly watched what unfolded in Charlottesville, Virginia, heard the
Speaker 1: rhetorics surrounding that, heard the response to it from politicians
Speaker 1: including the President. Listened to President Trump as he spoke
Speaker 1: in Arizona the day before yesterday in Reno last night
Speaker 1: with a different sort of message. What's your what's your
Speaker 1: sense of where things stand politically in this country? Obviously
Speaker 1: your focus now on uh largely on policymaking in Washington,
Speaker 1: d C. How much has the politics distracted from the policy.
Speaker 1: What's a really good question, David, Good morning to you
Speaker 1: and to Francine. I always like to remind people that
Speaker 1: policy follows politics, and politics reflects culture. And I don't
Speaker 1: mean by that ethnic culture, I mean political culture. So
Speaker 1: your question, I think is spot on to try to
Speaker 1: assess and analyze where we are in terms of political culture,
Speaker 1: because ultimately that leads to policy. I think obviously the
Speaker 1: country has divided. The country is in many ways anxious,
Speaker 1: and the events of the last few weeks with the
Speaker 1: president that you just chronicled through, each of those events
Speaker 1: represents different things. Obviously, his speech to the veterans group
Speaker 1: was very different than his speech in Arizona, which of
Speaker 1: course was uh related in some ways to some of
Speaker 1: the tone and unfortunate content that he put out post Charlottesville.
Speaker 1: And so I think it's it's a pause moment in
Speaker 1: Washington because of the August recess, but I think it's
Speaker 1: also a chance for people to step back and say,
Speaker 1: with the debt ceiling coming, with the prospect of tax
Speaker 1: reform coming, with the prospects of the president new chief
Speaker 1: of staff maybe having a positive influence on how the
Speaker 1: White House operates, perhaps this could be a moment where
Speaker 1: you could hope for some improvement coming into the fall.
Speaker 1: What could a group like yours do to encourage that um.
Speaker 1: I spoke with Tim Phillips, the president of Americans for
Speaker 1: Prosperity a few weeks back, and he talked about his
Speaker 1: his interest here and getting the administration and lawmakers to
Speaker 1: focus on tax reform exclusively. He's trying to interface with
Speaker 1: lawmakers and the White House to make that happen. We
Speaker 1: hear about the intractability of this White House. Of course,
Speaker 1: John Kelly coming into change how things are run there.
Speaker 1: How much influence does a group like yours have on
Speaker 1: the way things are running the Washington of today. Well,
Speaker 1: we don't influence things that I'm macro level, but I
Speaker 1: do think we can at least contribute directionally to the
Speaker 1: discussion by bringing information forward in a sense of urgency
Speaker 1: and accountability. So tax reform, I think, is a jobs bill.
Speaker 1: And all the politicians right and left always like to say,
Speaker 1: I'm for the working people, I'm for middle America. I
Speaker 1: want to get the economy moving in particularly I want
Speaker 1: to grow good paying jobs. And so if you believe
Speaker 1: all of that, then it's not a big leap. Get
Speaker 1: to convince them that tax reform could help ignite the
Speaker 1: economy and get GDP hopefully moving from its anemic level
Speaker 1: to something better. Um, Tim, how do you do that?
Speaker 1: I mean, how do you have to get on who
Speaker 1: do you have to get on site actually to make
Speaker 1: sure that I guess the you know, we move away
Speaker 1: from the controversy and actually get something done. Yeah. Really,
Speaker 1: it's it's the Republicans obviously control both the House and
Speaker 1: the Senate. So I don't want to say it's easy,
Speaker 1: because it obviously isn't. But they it's fully within their
Speaker 1: control if they use this process called reconciliation where they
Speaker 1: only need fifty one votes in the Senate, the Republicans,
Speaker 1: if they want to can pass with Republican votes only.
Speaker 1: A tax bill and tax reform has been the political
Speaker 1: holy grail for much of the Republican Party for a generation,
Speaker 1: and so it is in alignment with what they've been
Speaker 1: asked to do, what they ran on. It's also good policy,
Speaker 1: by the way, so candidly, if you just look at
Speaker 1: it from a macro level perspective, it shouldn't be that hard.
Speaker 1: Of course it is, but but they should get this done.
Speaker 1: It shouldn't be that hard, but it looks pretty hard
Speaker 1: at the moment. So who is a president kind of
Speaker 1: instrumental to this? Is there something that he can do
Speaker 1: and doesn't really Back to Charlottesville. I know some people
Speaker 1: in your party have asked for him to apologize. For example,
Speaker 1: I don't Charlottesville, of course in my view, and I
Speaker 1: think obviously for many people, the way that he handled
Speaker 1: that was disappointing, But I don't think that represents an
Speaker 1: impediment in the intermediate and longer term to getting tax
Speaker 1: reform done for the reasons I mentioned, and by the way,
Speaker 1: that the President just needs to sign it. The Mitch
Speaker 1: McConnell and Paul Ryan and their teams in the Congress
Speaker 1: need to put it forward, and I don't think the
Speaker 1: President is going to get hung up on a lot
Speaker 1: of the details. Frankly, so if they put something on
Speaker 1: his desk that he can plausibly agree is tax reform
Speaker 1: and directionally helpful, there's a very high chance he's gonna
Speaker 1: sign it. Um. So I don't I don't think he's
Speaker 1: even with the unfortunate approach that he took to Charlottesville
Speaker 1: and reaction to it, is an impediment to tax reform
Speaker 1: getting done. Uh. And by the way, in terms of
Speaker 1: the other impediments that I've always breaks down at this level,
Speaker 1: everybody's for reducing the rates. Everybody's for cleaning up the exemptions, credits, deductions,
Speaker 1: and preferences until it comes to their exemption, credits, deduction,
Speaker 1: or preference, and then people head for the exits on
Speaker 1: an overall effort when their particular thing gets put on
Speaker 1: the chopping block. Should our listeners be disappointed that they
Speaker 1: haven't seen more meat on the bone when it comes
Speaker 1: to tax reform. A few months back, we got that
Speaker 1: first one page document from the White House, really just
Speaker 1: you know, two hundred words bullet points of what the
Speaker 1: White House was interested in. We got something from the
Speaker 1: Big Six before lawmakers went on recess. It's still a
Speaker 1: page long, a bit more detail. We learned the border
Speaker 1: adjusted tax no longer on the table as they discuss
Speaker 1: a taxi from going forward here. But I keep thinking
Speaker 1: of this document that we got from the Treasury Department
Speaker 1: on financial regulation visa via the banks, the first chapter
Speaker 1: we're told in in in other documents like it that
Speaker 1: are going to be very detailed, very focused on what
Speaker 1: the administration can do. Our listeners right to be disappointed
Speaker 1: that we haven't gotten documents like that on tax reform,
Speaker 1: on other issues that this White House, it said that
Speaker 1: wants to take a look at. Yeah, you know, it
Speaker 1: is not the first ninety days. It is now almost September,
Speaker 1: So I suppose it's appropriate to say there should be
Speaker 1: some disappointment that it hasn't gone further and faster. But
Speaker 1: it's a once in a generation opportunity, so probably better
Speaker 1: to cut twice. Excuse me, cut once and measure twice.
Speaker 1: And I think there's two basic or three basic forks
Speaker 1: in the road, but they include are they willing Are
Speaker 1: Republicans willing to disregard or discount the CBO score on
Speaker 1: how much red ink a bill is projected to create
Speaker 1: and say the CBO is wrong or the CBO is
Speaker 1: underestimating the growth potential? And then our conservatives willing to
Speaker 1: sign up for some red ink as part of a
Speaker 1: tax bill that remains to be seen. And now number two,
Speaker 1: how deeply are they willing to go on reform as
Speaker 1: opposed to just lowering rates? And the reform part is
Speaker 1: in exchange for lowering rates? Are you willing to clean
Speaker 1: up all of the mind numbing complexity and all those exemptions,
Speaker 1: preferences and deductions that I mentioned earlier? That that from
Speaker 1: a conservative standpoint also represents in many cases allegations of
Speaker 1: chrony capitalism, that government's picking winners and losers through these
Speaker 1: niche uh provisions that benefit narrow interests as opposed to
Speaker 1: just a broader approach to lowering rates. You are a
Speaker 1: Republican you're heading up this this business group representing financial
Speaker 1: services companies. Let me ask you about the issue bipartisanship
Speaker 1: in tax reform. There was a small olive branch in
Speaker 1: that statement I mentioned from the Big Six, these six
Speaker 1: leaders working on on tax reform, they'd like to see
Speaker 1: Democrats come to the table to work work with them
Speaker 1: or so they say, uh, we don't see that happening.
Speaker 1: How do how do you make that happen? When you
Speaker 1: when you look back at when we did get comprehensive
Speaker 1: tax re form in the eighties, it was a bipartisan effort.
Speaker 1: Senator Bill brad came onto Bloomberg Television and told me
Speaker 1: that it was hard. It involved a lot of negotiation,
Speaker 1: a lot of losing what one thought that he deserved
Speaker 1: to get. How do we get back to that point
Speaker 1: where you've got Republicans and Democrats back at the table
Speaker 1: talking about what is a signature issue here? That's very
Speaker 1: difficult to do, especially when the Republicans technically don't need
Speaker 1: the Democrats to pass it, and you have such polarization
Speaker 1: and silo mentalities in politics today. So I think the
Speaker 1: idea of going back to a Reagan and O'Neill and
Speaker 1: having these states men and states women come to the
Speaker 1: middle on something that's a political hot potato is probably unlikely.
Speaker 1: You may be able to get a small number of
Speaker 1: Democrats to join the efforts, particularly Democrats who are up
Speaker 1: for re election in twenty eighteen and read states like
Speaker 1: Indiana or Wyoming or some places like that, if the
Speaker 1: bill is, you know, generally reasonable, but if it's an
Speaker 1: aggressive kind of pro growth republican bill, you may see
Speaker 1: it be totally partisan, and they won't they won't necessarily
Speaker 1: feel compelled to bring along Democrats because they don't have to.
Speaker 1: But there was a wave of business leaders right stepping
Speaker 1: down from advising the president last week. Carli Kun for example,
Speaker 1: also saying he was no longer advising Mr Trump because
Speaker 1: of regulatory concerns. And we're hearing that this is because
Speaker 1: of the lack of tax reform and reform in general.
Speaker 1: How do you answer that? If I understood Mr Icon's concerns,
Speaker 1: he was involved in a bunch of business deals where
Speaker 1: there was at least informal concerns that he was in
Speaker 1: a conflicted position and he didn't want the headache, so
Speaker 1: he just quit. So I don't I don't see that
Speaker 1: as an impediment or in any sort of road bump
Speaker 1: to the discussion or progress on tax reform. Again, keep
Speaker 1: in mind for the Republican Party, if you're a Republican leader,
Speaker 1: you've run around this country for a decade or more
Speaker 1: saying if we ever get in charge, we're gonna do
Speaker 1: at least two things. We're gonna repeal and replace Obamacare.
Speaker 1: Obviously they didn't do that yet. But the second thing,
Speaker 1: which is very important to the entire Republican Party and
Speaker 1: all the people who support it financially and otherwise, is
Speaker 1: they're going to fix and reform and streamline and improve
Speaker 1: the tax code so they can get the economy movement.
Speaker 1: David Guray in New York, Francy Lackaway in London. This
Speaker 1: is Bloomberg surveillance on Bloomberg Gritty. We're having a conversation
Speaker 1: with Temple Lenty, the former gun from Minnesota now the
Speaker 1: CEO of the Financial Services Roundtable advocacy group for America's
Speaker 1: financial services industry in Washington at d C and Governor Palenty.
Speaker 1: Let me ask you about the debate over the debt ceiling.
Speaker 1: We heard it mentioned by the President in speeches a
Speaker 1: couple of days ago. Obviously, we're coming up to a
Speaker 1: point where we reach that X status it's called by
Speaker 1: the Treasury Department, when it will no longer be able
Speaker 1: to pay its bills. The Treasure Department saying that's going
Speaker 1: to happen at the end of September or early October.
Speaker 1: We've been here before. Does it feel different this time
Speaker 1: because of the composition of the government? Um? Not really. No.
Speaker 1: I would say it's uncomfortable for Republicans who control the
Speaker 1: Congress to have to deal with this issue because they
Speaker 1: don't like, at least rhetorically, the idea of debt. But
Speaker 1: they've already spent the money. And so when I was
Speaker 1: a kid, you used to say he can't dine in dash,
Speaker 1: which is you go eat the meal and run out
Speaker 1: of the restaurant without paining. That's illegal, it's irresponsible. So
Speaker 1: you can't spend the money, and then refused to authorize
Speaker 1: the payment for the money you've already committed to to spend.
Speaker 1: So they're gonna approve it. It's going to be ugly,
Speaker 1: it'll be uncomfortable, it'll be a lot of squirming, But
Speaker 1: I think there's a as Mitch McConnell as somebody said
Speaker 1: the other day, almost zero percent chance they're actually going
Speaker 1: to default. Uh, looking at the president's rhetoric surrounding the
Speaker 1: debt ceilings, surrounding the prospects for government to shut down,
Speaker 1: and and I wonder what you might say to him
Speaker 1: about the gravity of that when when the government shuts down,
Speaker 1: it is at a very basic level of nuisance for
Speaker 1: for for people. It certainly has effects for those who
Speaker 1: work within government and who rely on the government for
Speaker 1: for services. What would you say to him at the
Speaker 1: gravity of of seeing that happen. Well, I would distinguish
Speaker 1: between defaulting on the debt and the government shutdown. Both
Speaker 1: our negative developments, obviously. But I was the first time
Speaker 1: governor in a hundred fifty years or so of a
Speaker 1: Minnesota history that had a government shut down for a
Speaker 1: couple of weeks over a budget battle. And it it
Speaker 1: was certainly not helpful to the people who are working
Speaker 1: or rely on those services. But it also is something
Speaker 1: we were able to survive. So you don't want the
Speaker 1: US to default on its payments. You don't want the
Speaker 1: government to shut down. But those are two, at least
Speaker 1: somewhat different things that we should separate. The discussion. But Governor,
Speaker 1: when you look at the shutdown of the possible you know,
Speaker 1: the possible shutdown of the US, what kind of indication
Speaker 1: does it give to the rest of the world of
Speaker 1: how the US is acting? If you're a foreign direct investor,
Speaker 1: why go into America? Now? Well, and first of all,
Speaker 1: relative to the rest of the world, America is still
Speaker 1: incredibly successful, stable and desirable. So as you think about
Speaker 1: that analysis, you got to think about it in relative terms.
Speaker 1: And number two, we've had a brief shutdowns in the
Speaker 1: past and most people won't even remember that they occurred. Right.
Speaker 1: But at the same time, I mean, sure, Europe is
Speaker 1: hasn't been as stable as a US for a long time,
Speaker 1: but actually growth is better here. So again, if I'm
Speaker 1: a foreign direct investor, what's the attractiveness of being in
Speaker 1: America at the moment where it seems that the president
Speaker 1: sometimes talks out of hand. Yeah, well, again, I would say,
Speaker 1: I'm not arguing for a shutdown. Don't get me wrong.
Speaker 1: I don't want to leave that impression. It would be
Speaker 1: negative for all the reasons that you're suggesting. I'm just
Speaker 1: not I'm saying it's not as apocalyptic if it's brief
Speaker 1: and short, as you know some would suggest. I'm very
Speaker 1: quickly sir, how sorry, um, Governor. What is the one
Speaker 1: thing that the Trump administration can do in the next
Speaker 1: six weeks to make sure that it gives a strong
Speaker 1: message to investors around the world that they mean business.
Speaker 1: I think the best thing that could happen, we touched
Speaker 1: on it earlier, would be for this Congress and this
Speaker 1: White House to work together in a crisp, hopefully productive
Speaker 1: way between now and the end of the calendar year,
Speaker 1: although it spills into next year. That's better than nothing,
Speaker 1: and get comprehensive tax reform done. That's pro job, pro investment,
Speaker 1: and it, you know, sends the message we're serious about
Speaker 1: moving this GDP level from anemic to something better. Just
Speaker 1: looking at Twitter now, as I want to do here,
Speaker 1: as we have a president who likes to tweet, and
Speaker 1: he says this is gonna be a two part or
Speaker 1: maybe a three part tweet. But the first, the first
Speaker 1: tweet he's fired off this money he has. I requested
Speaker 1: that Mitch McConnell and Paul Ryan tie the death sealing
Speaker 1: legislation into the Popular v A bill, which just passed.
Speaker 1: And then there's an ellipses dot dot dot. But the
Speaker 1: indicating here that would be something would make it be
Speaker 1: approved easily. Where do you stand? Where does the Financial
Speaker 1: Services Roundtable stand on the the prospect of a clean
Speaker 1: death ceiling rays? Is this something that you think should
Speaker 1: be kept separate from from other issues? We we think
Speaker 1: and our members believe strongly we you don't mess with
Speaker 1: the debt ceiling. Authorize it. And if you've got to
Speaker 1: do things to increase the likelihood that you're going to
Speaker 1: get votes to authorize it, great, But you know, clean
Speaker 1: would be I think the wise way to go, because
Speaker 1: then it could be potentially bipartisan and you wouldn't get uh,
Speaker 1: you know, people either voting for against it for right
Speaker 1: along reasons. Obviously, the President is saying, let's attach it
Speaker 1: to something that's very popular and that people would support,
Speaker 1: which is support for veterans men and women in the military,
Speaker 1: and that might increase the chances of getting votes for it.
Speaker 1: So that would be perhaps something that would draw some
Speaker 1: votes and maybe increase the likelihood of it passing. But
Speaker 1: it has to pass. I believe it will pass. Uh
Speaker 1: in clean would be fine to Governor Planty really appreciate
Speaker 1: the time of this morning. Thank you very much for
Speaker 1: coming in. As I said to our Bloomberg nine nine
Speaker 1: one studios there in Washington, d C. Governor Tim Planty,
Speaker 1: former governor of the State of Minnesota, now CEO of
Speaker 1: the Financial Services round Table, that's a advocacy group antiel
Speaker 1: services companies, again based in Washington, d C. Great to
Speaker 1: speak with him about a host of issues facing lawmakers
Speaker 1: when they get back to Washington early September. Obviously, chief
Speaker 1: among them raising the dead ceiling as we've been talking about,
Speaker 1: and dealing with government funding as well, both of those
Speaker 1: deadlines rapidly approaching and uh Fran, as you mentioned, we've
Speaker 1: heard a lot from the President on these two issues
Speaker 1: in particular here over these last few days. The President
Speaker 1: making a trip to the western US. He spoke on
Speaker 1: the border in Yuma, Arizona, then moved up to Phoenix
Speaker 1: to deliver a speech at a rally on Tuesday night.
Speaker 1: He was in Reno, Nevada yesterday to dress the American Legion.
Speaker 1: Two very different speeches. As Governor Tim Plenty was was
Speaker 1: highlighting for us, the one that he gave in Phoenix
Speaker 1: and the one that he gave in Reno. This is
Speaker 1: Bloomberg Surveillance on Bloomberg Radio. David Durray in New York,
Speaker 1: Francine Lakwa in London. Thanks for listening to the Bloomberg
Speaker 1: Surveillance podcast, asked Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keene. David Gura is at David Gura. Before the podcast,
Speaker 1: you can always catch us worldwide. I'm Bloomberg Radio