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Painting out of four buckets Today, there's a lot going on around here. Presidential debates, primary results, an Israel vote in the House today, and of course CPI Day. We're going to knock down all of these stories with some of the smartest minds in politics and economics over the next hour, and glad you're with us as we begin with data this morning at eight thirty. Suddenly everyone feeling pretty good about things as I read the headline of the terminal US inflation EBBS for first time in six
months in relief for FED. This is the headline that so many have been hoping for. But let's look under the hood, because the headline does not always tell the whole story. Mark Hamrick joins us Now bank Rate Washington Bureau chief with his take on this market. It's good to have you back. Is the euphoria justified?
It's going to be with you, Joe. I think David Kelly summed that up well in the earlier SoundBite, in the sense that we did not suffer another negative surprise here, and so just to have things show up essentially in line with expectations feels like a moral victory. But as we sort of think about this battle against inflation, the battle continues and we cannot say that victory is declared. But you'll take the wins when you can get them.
And of course, you know, if we're thinking about the prospect of a raid hike around September, there's a heck of a lot of things that need to happen between now and then, including statistical data releases.
Yeah, now you meant hike or cut, because people have been talking about both.
Mark Well.
Chairman Palse is not talking about a rate hike, and so I think we probably need to follow his lead on that unless we get some truly remarkable surprise, and so we're talking about a rate cut. And I think that as we've either been part of these discussions, Joe or listen to them more broadly, I think part of this is trying to keep some things in perspective, and part of that also is to acknowledge high degrees of uncertainty between then and now the world can change quickly.
The other part is that higher for longer, which is sort of the baseline expectation for interest rates these days, can persist beyond the first rate cut. So what is the destination? And we'll have a better idea about that, you know, as we move along that journey as well.
Another way of saying that, compared to what happened before the pandemic, it's probably a good expectation, in other words, a smart expectation or assumption to say that rates will remain elevated for the foreseeable future, but just not as high as they have been or are right now.
Spending time with Mark Hamrick at bank rate, we're going to have to start seeing two tenths, right, maybe one tenth. We've got to start getting down to lower numbers here before we can have a real conversation about rate cuts. Right, we're celebrating point three instead of point four. But these need to start going lower.
They do if only to sort of meet the Federal Reserves expectations for its preferred inflation gauge, personal consumption expenditures and core And so could that happen short. I think that you know, as was mentioned earlier, as we see consumers spending, as we see consumers saying no to a lot of prospective purchases, trading down where they are accepting the terms of those purchases, and in the marketplace perhaps
setting prices at lower levels. I think we're seeing some weakness now and automobile sales which are showing up on dealer lots. They have essentially a couple of ways to
respond to that, including price. Affordability is really the other watchword of our day, because we talk about inflation being this dynamic that's been present for more than two years in a significant way, but affordability or lack thereof, is really the end result of that, and that's the thing that so many people are struggling against.
Really interesting to hear some of the anecdotal evidence as well from earnings reporting season, Mark, and I know this doesn't qualify as data for someone like yourself, but when you hear Starbucks talking about people trading down or not buying that expensive cup of coffee the way they were a couple of months ago, when you hear McDonald's in that same reporting season say the same thing, they're trying to work on a five dollars value meal to keep
people coming into the restaurant. How do you add that to the composite of data that's going to prompt the FED one way or the other.
Well, it's color right, And I think, you know, these are data points. They're not government you know, statistical data, but they are data points. And I literally did write down that five dollars meal thing on my sort of omnibus notepad this morning because I think that's sort of
how this presented itself is presenting itself. You know, if you can't get people to pay let's say, you know, nine dollars per meal at a McDonald's, then you have to adjust because ultimately, unless we're on the road, these are discretionary purchases right in the words, you do not have to go get that four dollars twenty five cent coffee that you could make at home for significantly less than that, And that's where it becomes almost a luxury.
And I think that's where consumers are drawing their own lines on that. I've done it in the past several days myself, where you know, we had Mother's Day last weekend. I opted against the beef to put on the grill. Went for the chicken instead, And you know, I was more satisfied with the latter purchase.
Than I would have been with the former.
I get that.
I don't know.
Next year, maybe take mom for the five dollar value, mel I think.
That's We'll see how that goes over.
Yeah, it's good to have you back. Mark Hamrick with his instant read on CPI, the Bank Rate Washington Bureau Chief with us here on balance of power. We'll hit this data as we work through the program. If only in our market checks. This is going over real well on Wall Street and Charlie Pellett. We'll breathe some life into that for us a little bit later on, As I mentioned, four buckets were painting at it today. We
just went through one with CPI. The other is a looming vote today in the House on a piece of legislation, a resolution that will essentially call everyone on the carpet when it comes to our policy in Israel. This follows, of course. You remember we had a lot of talk about this last week, Joe Biden's decision to withhold some weapons shipments from Israel that prompted the Speaker of the House and Republican leadership to bring this resolution to the
floor to compel the President to continue supporting Israel. And the whipping right now is looking interesting. We're hearing that as many as thirty or forty Democrats could break away from the White House to vote for this resolution. Everybody's trying to cover themselves here in an election cycle. So we talk about the policy in Israel. There's also big news coming out of Ukraine, and that's why we wanted to spend some time with Michael Allen, who's just made
his way across town from Beacon Global Strategies. It's great to see you, sir, Welcome back to Bloomberg. You, of course, former Special Assistant to the President, former Senior Director Counterproliferation Strategy, National Security Council. Your experience is important to us here. Let's start with Israel right now, because I'm having a
hard time telling what's going on. Last week, we're telling everybody about these two thousand pound bombs that the President was withholding, But the headline this morning is he's working up a new billion dollar weapons package even as this vote takes place to essentially condemn his decision last week. How do you rationalize all of these at once.
So it's very confusing. I mean it even goes back farther. We just appropriated another fourteen billion dollars to go to Israel, and we say act in your own self defense. But yet we're saying with the other hand, we're going to deny you some arms. It's especially confusing this week, though, I think that real answer is a boring, bureaucratic answer that some of these things have been in the pipeline and they're multiple times for Congress and the administration to
sort of say these things are ready to go. But it must infuriate them from a strategic messaging standpoint, because it looks like they're trying to to, on the one hand, limit what BB's doing in RAFA by saying no more offensive weapons while reassuring everyone, well, there's more long term stuff on the way. So it's really confusing, and I wouldn't blame anybody for trying to say, what is the Biden policy?
Well, I'll tell you interesting insights from General David Petraeus, retired General, back from the Cutter Economic Forum, where he sat down with our editor in chief John mckelthwaite to talk about what it is to go after Hamas, remembering, of course, his experience in the Middle East fighting the Taliban. Here's what he told Bloomberg earlier today.
Let's listen, you have to clear and hold and keep the enemy out of the people. And I do believe, by the way, that Hamas is the equivalent of the Islamic State. This is an irreconcilable extremist group that I believe does need to be destroyed. But how you do that matters a great deal, and I would welcome seeing a commitment that we are going to make your lives better. Pavillions in Gaza.
Michael, I love your take on that. Do you see Hamas as the equivalent of the Islamic State Israel essentially fighting Isis Does that go for Hesbela to the north as well.
I think I do agree with him, and I agree that both Hesbilay and Hamas are rejectionist groups. They're irreconcilable. There's no way to bring them over into a more moderate camp, if you will. I was in Israel last week. The issues are just as you think. Netanyahu cannot say anything about a post Gaza situation because he would lose the right wing of his governing coalition in the Kanesse, so he is restrained and saying things like he's saying today of oh, well, I can't talk about this until
the whole thing is over. But yeah, I think even though the Israeli society is racked with concerns about the hostages, they generally agree we need to destroy Hamas at the very least the four battalions who are in the Rafa area, and then we can begin to see our way through the end of this phase.
Of the war. You were there last week? Yeah, How did people react when they were talking with somebody fresh out of Washington here? Did you get an earful on this? Did they want to talk to you about the protests in America? What was the conversation?
They were very concerned. They're very concerned about the growth and explosion, frankly, of anti Semitism. They are, though, trying to plead with us and say, after September eleventh, you wouldn't have agreed to anyone trying to restrict your freedom of action. Why is Biden trying to do this to us? The thing I think, though, that is the most concerning for them is the idea that over time we would
cut them off from arms and assistants. On the one hand, they want to say, listen, we're going to do this ourselves. But on the other hand, Netnyaho cannot sacrifice in the end relationship with the United States. That is the greatest asset arguably that Israel has, at least national security wise.
So we may not be able to talk him out of going into Rafa, But if he's thinking about going into Hespola before the election, I really don't think the relationship with Israel in the United States will survive that.
That's saying a lot because a lot of people think that's about to happen. Yeah, I need to ask you, Michael about Ukraine troubling. If you're concerned about the future of Ukraine troubling reporting in the New York Times today that would suggest we are at an inflection point that could be the turn upon which Ukraine really starts losing this battle. Eighteen months ago, White House some Pentagon officials, as we're reminded, we're debating whether Russia was about to collapse.
Russia is making a serious move right now. Ukraine is asking for weapons, a patriot battery for Kharkiv, where Russia is making quite a bit of headway here, but to see the side effect of a month's long debate actually show itself on the battlefield like this is troubling a lot of US officials. What's the real situation on the ground.
It's alarming. The Ukrainians are losing villages. The Russians are exploiting what their strengths are, which are manpower and industrial might, and throwing everything they can at the Ukrainians. Now with the Ukrainians got a morale boost out of the fact that on April twentieth we paced, we did the Ukrainian aid, but not all of that, not even a small portion of that has come online yet, So I don't know that they're enjoying the benefits of what they might in
another month or two. But they're trying to hold on. The Battle of Harkiev, as you mentioned, has begun. I think the Russians don't have enough troops, they don't have it sized correctly to take the entire city. But it's touch and go, and things are going to get worse before before they get better.
For Ukraine. Well, okay, but that also would suggest there's time for Ukraine to turn this around.
Yes, because Russia at the end of the day still doesn't have the right strategy or the right leadership. I think to do a sustained breakthrough in Ukraine, they may win villages, they may make some progress here and there. It is going to be alarming and seem alarming. But for them to break through, for example, like the Ukrainians did when they took Karkey, yes War Hairson in twenty twenty two, I don't think you're going to see anything that dramatic, but wow, that would cause a panic.
Well, your perspective is important here because I'm here in too little, too late. You don't agree with that.
I think it came just in time, but barely.
I mean.
The hard part, of course is getting all this stuff over there and getting it online. There are obviously munitions, backlogs.
And all sorts of a lot more to deliver.
I think they'll hold on, but it's going to be touch and go, and.
A lot more to manufacture as well, in that sixty billion dollar truck. Gosh, Michael, it's great to see you. Michael Allen from Beacon Global Strategies helping us walk through the news today on the geopolitical front.
You're listening to the Bloomberg Balance of Power podcast kens just live weekdays at noon Eastern on Applecarplay and Android Oro with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play Bloomberg eleven thirty.
It's not just CPI day. This is also a day where we got news not just on inflation, but on presidential debates will be happening between Joe Biden and Donald Trump. The first will be on June twenty seventh in Atlanta, the swing state of Georgia, and that is where we go in our next conversation. I'm pleased to say that joining us here on Balance of Power on Bloomberg Television and Radio as doctor Bernice King. She's the daughter of Martin Luther King, Junior and the CEO of the King Center.
Joining us from our Atlanta bureau, Doctor King, thank you so much for being here. We appreciate your time as we look ahead to what will go down in Atlanta just over a month from now. It comes against a backdrop of polls suggesting, including a New York Times Siana pol just earlier this week, that not only is Donald Trump leading in swing states including Georgia. Twenty percent of
black voters is the tally he's winning right now. That would be the highest for any Republican presidential candidate since the enactment of the Civil Rights Act of nineteen sixty four. What exactly do you see happening here? Why is support shifting?
Well, I think when people feel like they are not getting their issues heard or represented in a period of time, and there is a shift in the possibility of changing administrations or candidates, people have a tendency to shift parties or shift.
To other individuals who may be running in the same party.
We saw that, as you know, in two thousand and eight with President Obama after President Bush.
We saw that.
When Obama ran again, some people who did not vote for him the first time voted for him the second time, or people who did not vote for him who people who voted for President Bush and this time around when Obama was running, did not vote in the Republican Party voted in the Democratic Party because.
They wanted hope, they wanted change.
So I think there are people in the black community who are feeling like not a lot has changed, especially economically in the black community, and I think many of them are being driven by that.
Doctor King.
It's great to have you with us, and I appreciate the time that you're giving us today. From Atlanta. We were in Atlanta for the Senate runoff that re established Raphael Warnock as the Senator from Georgia, and I had the opportunity to walk around the King Center, spent time walking past that beautiful reflecting pool, and the people we spoke with that day talked about Joe Biden and Democrats
what they could do to help Georgia. Raphael Warnock, of course, is a big part of that conversation, and we're having a very different conversation at this point now. But you're there. What are you actually hearing from people? Do you believe these polls? Do you believe that Donald Trump is going to secure the black vote in twenty twenty four.
I don't know if it's a matter of a belief. I think there are many people concerned that that could be the case, and it's not speculation. I mean, especially black males who seemed to be more attracted to Donald Trump and his candidacy. And I think there's going to be a There has to be a plan and a strategy for the Biden administration to really creatively figure out how to reach especially this next generation who's very disgruntled
right now. UH with the Biden administration. It's not gonna be easy, unfortunately, but it this is uh, this probably is the the most defining l election of of my my time. You know, I've been here sixty one years, I've been you know, voting for what forty five somewhere around there forty four years.
Or so, you know.
I it's an important election and people have to be very thoughtful about how they wanna see our nation move forward uh in the coming years, and who is going to best represent that policy wise and tone and tenor wise.
Because it all goes together. Presidents set a.
Tone in a nation and that is to me just as important as the policy side. As we know, most of the policies are passed by Congress. Th they're running as well this year, So it has to be very thoughtful in the approach. And I'm not sure many people are being thoughtful at this time. Typically people are led by you know, emotion, and we also have to be thoughtful globally. You know, it can't just be about me,
because I live collectively in community. It's about my neighbors, So I have to think about it holistically, you know, about who would best represent us holistically as a nation and also those very fundamental issues that affect the least among us.
Well as we consider the issues, and knowing that President Biden himself will actually be down in Georgia this weekend giving the commencement address at Morehouse, we've seen a lot
of turmoil on college campuses lately. The issue of Israel and the ongoing war in Gaza is definitely one that seems to be shaping this election cycle, and especially given you and your family's legacy a peaceful protests, what do you make of what we have seen on campuses across the country that have not always been peaceful and in fact, in many instances have turned violent.
Well, I think I think in all fairness, UH, it has to be a balanced approach and how we talk about it. UH. As as with any UH protest, any movement, there's gonna be people who infiltrate UH happen with my father. The difference I think in today's time is because there's not a real strategy that people are organizing around collectively with parameters and criteria. It's it's very difficult in a world where people can get you know, information instantly, uh
to have those kind of regulations. But you have to, uh because otherwise what becomes the stories what you're saying.
Uh.
My my father was able to guard against that, as you know Memphis, they had to pull him out right before uh he was assassinated. Shortly before he assassinate that he led a protests there and some people that didn't filtrate it to turn it violent. And he had a track record of nonviolence, and that's important uh as well
as we approach to see. So yes, that that is true that there have been some, but I I do want to applaud the young people who have not been violent, the ones who have been trying to press the message about what's happening to the Palestinians, and those who are pressing the message about Palestinians and freeing the hostages, because all of this is getting lost because I think there are people out there who genuinely want a holistic approach
to what's what's happening, and they want something that's humane and the saving of lives period and and so that's not getting to the surface.
And so I do not.
Uh support the violence because I'm I come from a place of nonviolence, but I do know that there are people out there who do have a posture of trying to do this in a peaceful way, and unfortunately, when people feel like their demands are not being heard, it often happens. That's when Daddy said, you get the violence is the language of the unheard. So we have to look at why is this happening as well.
It's an awfully important line right now, Doctor King. Kayley mentions the speech at Morehouse, the commencement addressed by President Biden. That's not all we have on the schedule this week. On Thursday tomorrow he'll be meeting with platus from Brown
versus the Board of Education case and their families. On Friday, he's speaking at an NAACP event, who will address members of the Little Rock nine a campaign event on Saturday in Atlanta, and then Morehouse on Sunday, Doctor King, is being present like this help.
Well? If being present is consistent?
Yes, it's very difficult if people perceive your presence as being more political. And I think that's what a lot of people who in elected office face, and that is where are you in the middle? You know, in the in the times in between, UH, and and I think people are experiencing that they're showing up now, but what about those other times. Now, I'm not suggesting that UH, that has not been the case with the administration. But if it is the case that you have been consistently present,
then the messaging has to improve, UH. And people need to know that you have and those people who n who know you've been present, need to be the voice saying, let me show you how they've been present.
Here are the results.
So the the campaign can't speak. The people who have benefited from UH, the administration, should, I say, need to be speaking. Let me show you how this has impacted my life. This is what I have gotten from the Biden administration. So it's now's the time for the people who believe in this candidate, who believe in President Biden, because he's a candidate. Now unfortunately he's the president, but
yet he's a candidate. So now the people who believe in what he's done as the president need to be speaking for him while he is the candidate and saying, this is what he's done for our communities, our group with these issues.
Only you could make the point in the way that you just did, Doctor King, were delighted that you could come and talk to us today live from Atlanta. Doctor Bernice King, CEO of the King Center, thank you for joining here on Balance of Power on Bloomberg TV and Radio. I'm Joe Matthew alongside Kaylee Lines. Fascinating conversation, Kaylee, as we spend so much time talking to strategists from here
inside the beltwagh. Obviously the conventional wisdom inside the bubble is important when you're dealing with Congress and the White House, but hearing your perspective like that be awfully important for both campaigns right now.
Yeah, And the message from doctor King there essentially is consistency is key, not just one week of events that ultimately will make a difference when voters in specific demographic troops are questioning whether or not your policies ultimately have cater to them or not.
Her words were carefully chosen there. I'll be curious to see his reception at these events this week.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on a car play and then roudoto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
My eyes are looking out, Joe to the twenty seventh of June. My calendar is marked big red circle, first debate between Biden and Trump of the twenty twenty four cycles.
Yeah, is on. It's going to be like a pin dropping in that room. Imagine no crowd. Yeah, No one's clapping, no cheering, Not that they're supposed to anyway, but this is what happens, and then they get their mics caught off over time. It's going to be a surreal environment.
For these two, assuming that all those rules can be agreed to fair enough. When Donald Trump's indicating he would prefer something with a live audience, a bigger venue, maybe not wanting the mic to be clipped at any one time.
Yes, right, so we'll see, I guess again, assuming that everyone agrees to all of this, Let's see what the panel thinks. Rick Davis, of course, Bloomberg Politics contributor Republican strategist, has actually not only run presidential campaigns, but been deeply involved in this planning process that typically includes the Commission on Presidential Debates. He's with us alongside Brad Howard, Democratic
strategist founder of the Corkoran Street Group. Brad, I know you're feeling pretty good about the position that Joe Biden is in walking into this, But how worried are you about live fact checking? Or just Donald Trump, who never cared about the rules anyway, why would he start now?
Yeah, I mean that's obviously going to be a concern.
You know, we saw just how rattling it was when he did it to Hillary of twenty sixteen, was unprepared to holding a two account.
Then I think did better in twenty twenty.
But you're right, the combination of trying to hold him to account could develop every single answer on that show. And you know, and I think there is some legitimate concern of is it really the moderator's role to correct everything that they say? That should that be left up to the American people? So I think, you know, I
think there's a reasonable happy medium there. I think the moderators that I'm sure seen and will choose will be you know, they have a great set a bench of experienced moderators, and so I think I trust these views organizations to handle it.
Better probably than the commission here.
So we'll look forward to it and just to the point of your your son units driver's license where I'm from.
Our response to that would just be bless your heart, So good luck with that.
Bless your heart. All right?
Well, Rick, come on in here, because obviously we've seen a debate between Donald Trump and Joe Biden before in the twenty twenty cycle. We know how perhaps undignified at certain points it was. To characterize it, how do you prep this go around for a debate between Donald Trump, who isn't always reluctant to stray from the truth, if you're Joe Biden, who tends to stick more to the truth.
Yeah, I think Joe Biden's going to have to really figure out a way to distance himself from Trump, but also be really on alert because I agree it's hard to fact check Donald Trump, but I mean to some degree that's going to be Biden's job. He can't just ignore factual misrepresentations coming from his opponent because you can't rely on the moderators. CNN has a bad track record
with Donald Trump. You know, they much discussed town hall that CNN did during the campaign with Donald Trump turned into a live fest and they lost control of it. Donald Trump is a disruptive guy. He knows how to take control of these situations. He's got enough, you know, capacity to really be a just truptive force in it something like a debate. And you know, General Joe Biden, I mean, come on, I mean, he's he's a dignified guy who tries to play by the rules, even if
there are no rules to be played by. And so I think that they're going to have to throw out the playbook with Joe Biden, force him to not think about debates the way he traditionally has. I mean, he's got fifty years of you know, political experience debating on one set of rules, and this is a different time,
a different place, and a different opponent. You've got to throw out that rule book and ready be ready to really go to town on Donald Trump and and have a firm grasp of the facts so that he can correct the record, because if the record stands, he's going to look really bad.
I still have so many questions for both of you here, Brad, including who's going to watch nobody's going to mourn.
I realize the end of the.
Death of the Commission on Presidential Debates, but there was a purpose here to not just have a presidential debate, for instance, on a single cable network. A lot of people won't even be able to watch that. We spend all day talking about cord cutting here, Brad, Are we gonna lose something when the commission goes away?
I mean, possibly it remains if you see it. I mean, there are ways that I imagine that these candidates will ensure that folks in their orbits will be able to wash you know, I think, as we've seen time and again, the first debate usually is a very highly watched affair.
But the truth you to remember, the truth thing.
That swayed these debates is the spin afterwards. It's does a candidate give the other campaign a moment to really attack them with and run it in paid media.
Over and over and over.
So if Biden has a bad moment, if Trump has a bad moment, trust me, swing voters will see it in paid ads throughout the country. One has a good there's a good moment, You'll see that and paid ads across the country.
So they will get down.
But you know, the start to finish kind of full broad spectrum watching the debate.
If you want to watch it, there will be ways to watch it. I'm surely be.
Watch parties and things on college campuses and et cetera, So I'm less concerned about that. I mean, the average viewer today is a little more savvy than they were probably ten years ago, so there's an ability to find any program you want to watch these days.
This is going to raise the stakes, though, Kayleie. In that world, everyone's just going for a moment, right.
You're looking for a SoundBite or whatever. It can go virall on TikTok or assuming we still have it at that point, we should, right, both campaigns are Both campaigns are on it, but it's about what gets replayed over and over again the next day, which just underscores Rick.
How much of this, especially for two candidates who are the age that they are, this is about performance and being able to show stamina and dexterity and speak in your speech when you're ad libbing, not necessarily reading off a teleprompter. Is this ultimately really going to be about policy, especially because these two candidates are so well known, as are a lot of their stances.
That's a fair statement. What do people really take away from these I was there at the debate when George Bush looked at his watch.
George H. W.
Bush looked at his watch, and that's the only thing people could remember. You know, that was a Bill Clinton win because of a self enforced error on the part of the president. And remember we have some history with these two guys. They have debated a couple of times, and arguably Donald Trump lost the first debate because he kept talking over Joe Biden.
I mean like he went in loaded for bear.
He was not going to give Biden a chance to speak, and Biden so famously said, you know, shut up and let me miss my answer, and that became I mean like there's nothing subjective about that, but it was like, Wow, Joe Biden didn't fall asleep at the debate.
This is good.
And he actually pushed back on Donald Trump, who was kind of being a bully. So yeah, I think you're right, Kaylee. I think these these have the opportunity to showcase the vitality of the candidates but also their ability to sort of operate under the heat of those cleague lights that are going to be on that studio and Atlanta, And I do think it's going to be that dynamic between the two of them, because I don't care what moderator, you get. I'm sure CNN will post up some really
good ones. They're going to lose control of this debate in the first five minutes, and then it's going to be mono amano and we'll see what happens.
Picturing the way in at some point here, Kaylee, I feel like this is you know, this is like pay per view stuff. Was this on purpose? Bred to make sure RFK Junior was not allowed on the stage. I know that he's not on the ballot in most states, but there's some polls showing him fifteen to twenty percent. He could potentially qualify for an old fashioned commission debate.
You know, I don't know.
I mean, I think it's all the roll of the dice with who RFK hurts and helps. You know, a lot of his conspiracy based theories from vaccines and et cetera. You know, traditionally we have a home in the Trump orbit is you know, last name is a home in the Democratic orbit, And there's enough data to suggest and pulling goes both ways on this, So you know, I don't know, you know, I think, you know, I agree with Rick.
I thought he had a really good analysis of that.
If you can't get to two hundred and seventy because you're not on enough states, then you should not be in these debates.
I agree with that, you know.
I think what's interesting here though, is you know, if I were Trump, I'd be a little more careful of how he's approaching these debates because right now he's setting the standard where Trump has very high expectations and Joe Biden has very low expectations. And so Joe Biden doesn't literally fall asleep at the podium, he may have a win, and it may have won the expectations game, which is a big part of these debates as well.
That's right, Rick.
Finally, I know we just had a whole conversation about how much of this is about performance over policy, But is a debate the best chance for Joe Biden to actually clarify what his policy in regard to Israel is considering all the back and forth we've seen in the last few weeks.
Yeah, I think it certainly gives him a chance to talk directly to the voters. And he has been sort of flip flopping on this, which is all unforced errors on his part, right, I mean, like he was fine with the approach he took.
He decided to veer the other way.
Republicans now are taking advantage of that, especially in the House of Representatives, forcing Democrats to take sticky votes on Israel. The bottom line is he needs to convince people that he's got a firm grass for the economy, because nobody is going to decide this election on Israel, but it is going to be decided on the economy. And regardless of what the economic measures are today, especially with the CPI,
he isn't getting that through to the American people. And if that's not the major topic of his conversation, he's cheating himself and his administration on the progress they've made, and he will not be able to get voters to start thinking differently about the economy.
All right.
Rick Davis, Bloomberg Politics contributor and Republican strategist, and Brad Howard of Corcoran Street Group, thank you both so much.
Listening to the Bloomberg Balance of Power podcast Ken just Live weekdays at noon Eastern on Applecarplay and then rod Oro with a Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa play Bloomberg eleven thirty.
As we try to figure out next steps here for the FED and exactly what is the state of our economy, knowing that the headline numbers don't always tell the whole story. I'm Joe Matthew alongside Kaylee Lines in Washington. It's good to have you with us on Bloomberg TV and radio. The euphoria on the street is one thing, Kaylee, but it's a different consideration when you start talking to economists about where we are.
Yeah, especially if you're talking about economists who live over at the Federal Reserve, who, yes, may be encouraged by this one month of data, but at the end of the day, this is just one month of data after three consecutive CPI prints that came in hot. It's great news to get one that was cooler than expected. But they're looking for a pattern here sure, not just a one office because they are haunted by the ghosts of decades pass and do not want to risk cutting brakes
too early. So that is where we begin with Lindsay Oh And she is Groundwork Collaborative executive director, former Senior economic policy advisor to Senator Elizabeth Warren lindsay, welcome back to balance of power. Obviously you can see good things in the data today, but how many more data sets like this are we going to need to get before the Fed can feel comfortable cutting interest rates?
Yeah, thanks for having me. I mean, look, the print this morning was undeniably good news, good news I think for American families, good news for the White House, and hopefully good news over at the Eccles Building.
You know where the share of the Federal Reserve.
Hangs out as well. You know, seeing core CPI come in at its lowest level since April of twenty twenty one, you know, really three years now, when you sort of cleave off that those food costs and those energy costs, you know, that's just really really great to see. And so you know, we'll see sort of how many more good prints the Federal Reserve chair needs to see before he moves to rate cuts. But you know, hard to ask for much better than what we saw this morning.
So instead of trying to predict the Fed, lindsay, what's your thought, should we start cutting now?
Oh?
Absolutely? I mean you do not want to be behind the eight ball on rate cuts. We've got a strong job market, right, now we've got wages beating prices. And look, while the trend line hasn't been as sort of steadily downward as we'd like, overall inflation has really been coming down off its peak for you know, for over a year and a half now, and so I think the line is moving in the right direction. Borrowing costs are
really pinching families. We're really starting to see some negative impacts in the housing market where mortgage rates are sky high. So I'd really like to see a rate cut sooner rather than later, you know, September at the latest.
Well, as you talk about what's happening in the housing it's worth pointing out that where we're still seeing the stickiness inflation, in inflation does include shelter prices. That has been pretty persistent over a number of data sets. So lindsay, what's the solution. There are higher interest rates going to help solve that problem?
No, I'm quite the opposite, right, high interest rates. We have the high mortgage rates which keep folks in the rental market unable to come in to the single family housing market, and that keeps some rent prices high, and that shows up in that shelter index, which you know also has there's some data issues there too, Right, the shelter index really lags, and so it takes a little while for us to get relief on on housing costs
that show up in the in the CPI print. But if you're worried about housing costs in the United States, a high interest rate environment is certainly not going to get you in the going to get you in the right direction. It's not going to get Americans any relief in the housing market.
Spending time with Lindsay Owens from the Groundwork Collaborative, Lindsay. President Biden made a big splash yesterday announcing new terror riffs on some Chinese imports with some big increases on EV's solar panels, some other things semiconductors, while keeping all of the Trump tariffs in place. Is this the new normal now, this protectionist approach for Democrats and Republicans.
Yeah, I think that's exactly right. You know, tariffs used to be a four letter word in both parties in Washington, you know, you know, really just a decade ago, and I think there's been a sea change in how folks on both sides of the aisle think about trade and think about what makes a strong and resilient American economy. I mean, I like to go back to the eve of the pandemic, when I think Americans really got a glimpse of what it looks like to have an economy
that is reliant on imports from China. And you know what we saw when the pandemic hit is we couldn't make anything here. We couldn't make the COVID test here, we couldn't keep ppe here. You know, we had all sorts of shortages because of the supply chains being gummed up, you know, coming in from Asia and China in particular.
And I think Americans took a look around and said, look, a resilient economy, a strong economy is one in which we have a vibrant manufacturing class in America and is one in which we can sort of keep our own shelves stocked during a crisis. And so I think the Biden administration is making the exact right move when it
comes to trade with China. If you want a green transition, a strong green transition, you know, completely relying on cheap solar panels for China is going to get you in a heap of trouble.
Okay, So, Linda, you think the Biden administration is making the right move here, But essentially they move that they have made is to stand by the decisions of the Trump administration when it comes to tariffs and in fact just go further in certain key sectors. When Trump first implemented these tariffs, when that trade war kicked off back in twenty eighteen, there was a lot of talk among economists about the detrimental effects that was going to have
on the US economy. It doesn't feel like we're hearing that as much this time around, and I just wonder why.
Look, I think I think the economics profession is evolving, albeit slowly, on this point. But I think part of this is the story isn't just about trade deficits here, right, The story is about trade offs, if you will. What are the things that we're trying to build to build a strong economy. One of the things we want is good jobs in America. If we make all of our evs in China, we don't have a vibrant auto manufacturing industry in America. So that's an important piece of what
we're trying to do with trade policy here. As I mentioned, we're looking for a green transition, but we're looking for resilient green transition, one that isn't going to be at the whims of shifts in the Chinese economy, but that
is durable in the United States economy too. And so I think when you look at the big picture, when you look at the suite of interest here the American worker, what we want for American industrial policy, and what our foreign policy concerns are as well, it really points to the types of decisions that the Biden administration is rolling out based on really thorough reviews by the USTR's office.
Lindsay, it's great to have you back. Lindsay Owens, Groundwork Collaborative Executive Director, per view on today's CPI data.
Great to have you back.
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