Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on Applecarplay and Enrouno with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Here at the Outpost in Washington. We did make it to the end of the week. An interesting one here with the PCE data. Not really interesting the word I'm sure the White House is using as it looks at this repeated reminder. Now three months in the making PCE hotter than they wish, pushing back expectations for FED rate cuts, of course, one of which Joe Biden himself predicted by
the end of the year. The headline on the terminal inflation data reinforce Powell shift toward higher for longer, so you can come up with your own theory as to why stocks are higher. But it's not lifting moods in the Biden campaign. As I turned to another headline on the Terminal from our friend Gregory Cordy, inflation overshadowing US economic resilience, hurting Biden and he's with us right now.
Gregory Cordy here in Washington. Goodness us her. This is sort of the ultimate good news is bad news story, isn't it.
Yeah, So we're having this sort of soft landing, but it's such a soft landing that it's sort of excruciating to watch the economy grow a little slower than expected while inflation remains a little higher than expected. And it's really put President Joe Biden in this sort of vice where the economy is betwixt and between, and when people get conflicting signals about the economy, they tend to be
negative about. Uncertainty is bad for markets, and it's bad for voters who want to kind of see the light at the end of the tunnel and they're not quite seeing it by the end of this year.
Well, that's right, and that means, you know, potentially higher for longer, which is a problem for a lot of people for a lot of reasons when they're borrowing money. It certainly has an impact on the housing market here, young people asking for a break when it comes to debt. Joe Biden, as I mentioned, predicted a rate cut. And I know that the White House constantly differs, doesn't want to talk about the FED and we try Jared Bernstein will be on later.
Don't tell them. I'll probably try. But they've got to have.
Their own dot plot inside the West Wing, just like they do in the Biden campaign, and they were banking on that, not just a soft landing, but to be able to say, hey, we licked inflation, and that's starting to look out of reach.
Yeah.
One of the biggest problems is that the second quarter of an election year, so right about now, is when voters tend to kind of solidify their opinions about the economy that they take with them to November. The perception always lags the reality. So if the reality is uncertain, now, what's it going to be in November? And if so, if you're a Biden campaign, you want some good news
not just by November, you want it pretty soon. So if people have a time to really digest that news and feel it by the time they go into the voting booth in November.
In the meantime, we tend to talk about not economic data but the political campaign. They do have an opportunity for the next six to eight weeks. The other guy is locked in a courtroom. To what extent can Joe Biden leverage that he's been certainly traveling a lot more while to reinforce the split screen.
Yeah, it's really interesting because Biden has been, and we remember this from twenty twenty, a bit of a homebody, remember the Basement campaign, and in common presence, tend to wage the Rosegarden campaign, do a lot of official announcements, but stay at the White House. And really the amount that President Biden is traveling now you have to think that it's a deliberate response to the fact that Trump
can't travel and taking avantage of that. He's in not just going to swing states, but he's in New York this week. He's doing media. He's doing not just the sort of campaign thing, but he's he's trying to project a very sort of energetic presidency.
We should mention the fact. And for our satellite radio listeners. On another channel, he's doing a sit down interview with Howard Stern today.
Yeah, it just concluded. It was an hour and thirteen minutes, no commercial interruptions. Yes, that's the way that on Howard Stern dive and it was a deep dive into his life story, his loss of his wife, the loss of his son. Does very emotional interview it's part of this kind of I've old enough to remember this Arsenio strategy. Remember when Where's the Saxophone went on the Arsenio Hall Show and everybody at the time said, you can't do that.
Oh, that was a big thing.
That's you know, there's a there's rules of political decorum, and you have to do interviews with professional journalists.
Now they're announcing campaigns on late nights exactly, And so Howard Stern has an audience that does not over lap with entirely with the Bloomberg audience.
Right.
There's sure there's an overlap set that them then diagram, but it's not exactly the same audience. So he's trying to get that the listeners who might not pay attention to politics. And Stern was a very friendly interview. It's interesting because he enjoyed a very cozy rapport with Trump for a decade.
Regrets, isn't that interesting?
Great to see it come back more often, Gregor recordy and find the story inflation overshadowing economic resilience not what they want to be reading, but likely are this weekend in the Biden White House. Then again, he's got a comedy routine tomorrow and I'm trying to keep it light. It's the White House correspondence to Dinner weekend, and I'm sure on Monday will be playing tape of some of the routine.
I'm Joe, Matthew and Washington.
Glad you're with us today on Balance of Power here on Bloomberg Radio, on the satellite and on YouTube, where you can find us right now search Bloomberg Global News and find our live feed. One of the other top stories that were fallowing today because we've heard so much little about it, is the beginning of construction of this temporary peer, the floating peer, to bring humanitarian aid to Gaza.
We've got news today and the Washington Post of fascinating write up not only on the fact that this has begun, but it's already becoming a target, or at least one that militants would like to make a target. They launched mortars at Israeli forces in Gaza, according to the Post, as those forces prepared for the arrival of goods. The attack on this marshaling area did not cause damage to the US, as we're building all this outside of mortar
range hundreds of yards off the coast. But the Pentagon's talking about this already, pat Ryder making it very clear that the risks are high. Security analysts have been talking about any number of threats, speedboats packed with explosives, divers swimming with mines, and then of course incoming rockets. All of this could become a very real problem when they need to connect the bridge, the peer to land. And it's something we wanted to talk about with David Harden.
He's managing director at Georgetown Strategy Group, former USAID Mission director to the West Bank and Gaza. He knows about this firsthand, former senior advisor to President Obama, special envoy from Middle East. Piece David, it's great to see you. Thank you for coming to talk to us today on Bloomberg. Is this going to be a major story and in a bad way in a couple of weeks when this temporary peer is within range?
It could be.
I mean it could be, but I like the peer, and I may be one of the few humanitarians or the one of a few military strategists who does what we ultimately need to do. And just look at this from an economics perspective, what needs to happen is that all crossings need to be open as much as possible on a most predictable basis, with as much food flooding the market as possible.
If you are.
Able to open multiple entry points, then no one entry point becomes is that particularly important? And so you know, first and foremost the land crossings need to work, they need to work more robustly, and that would be in the north areas and cum Schlom in the south, and then Rafa.
On the Egyptian border.
But if you were able to also get a peer going in, then you might actually be able to flood the zone with more food, more basic commodities, lowering the price, lowering the risk, lowering the chaos.
But it's true the peer is a potential target.
Of course, ill conceived from the start, is how Senator Roger Wicker, Senate Armed Service Committee's ranking member here, this is becoming a political issue to what extent and will its success resonate here in Washington. It's success or not on a political level.
I mean, clearly a failure is going to accrue to Biden just like a success would. I disagree though with the notion that's an ill conceived idea.
I mean I like it another for a geopolitical reason, which is look.
Facts on the ground matter in the Middle East, and the Israelis are masters that are having facts on the ground, whether it's settlements or checkpoints or roads in the West Bank or whatever. The Palestinians never get facts on the ground. Putting a peer that would take basic commodities, that would allow for basic commodity imports is a fact in their favor.
The Israelis control.
That maritime zone, so let's be real crystal clear about that. They've controlled it for the last fifteen years and they've been able to lock it down.
It doesn't mean that they couldn't an.
Attack, of course they could. But back to my bigger point, right, if there.
Are more crossings, and again let's talk about land crossings, then there is then no one particular access point is that important.
So if the pier is the only way to get basic commodities in.
It's going to be attacked.
If the pier is one of five different ways of getting basic commodities in, it doesn't matter so much.
What's your worry right now, Dave? When you see headlines like Israel stepping up cross border strikes on Hesbola to the north, the early stages, it seems of an invasion of Rafa. What is it that keeps you up at night right now when we're in such a tenuous moment in our relationship with Israel.
Yeah, I mean.
The Israeli Iranian play seems to have stabilized for the moment, Okay, and that's good.
I mean you should expect continued has bull of strikes.
The thing that really deeply worries me is the famine risk, and you know, and that would include an attack on Rafa that just exacerbates to humanitarian catastrophe. The Israelis are great at saying, well, we've killed thirteen thousand Hamas fighters, we're ahead of the game, and there's only four battalions left in Rafa.
You know, that all may be true, and it also may be immterial, because what we don't know is maybe.
They've killed thirteen thousand Hamas fighters, but fifty thousand.
People have lined up the joint and perhaps they're not as trained.
Or they're not as sophisticated, but the pipeline is open.
That very well could be the case. Further, I think the.
Israelis have really lost in the pr war.
And so look, Hamas is a terrorist organization and they have killed Americans.
And yet you know, for right a wrong, and in a sense.
It doesn't matter for this point, for.
Right or wrong, the American college campuses are ablaze with Hamas supporters.
Now, that just goes to show you that after more than six months of fighting, Disraelies may not.
Have degraded the elements of Hamas sufficiently enough to defeat them.
And they may never do that. And so when you add in.
The risk of famine, which I think the administration has already said is ongoing, then you're just looking at generations of grievances and the sons and the grandsons, and the daughters and the granddaughters that the current fighters are going to be fighting again.
None of this occrues to the US Benefit day.
If I only have a minute left, if you were still in your role as a senior advisor to the president, would you tell him to address these young people on campuses directly?
I mean, the election is pretty profound for America, and it's important that in my view, you know that Gaza is put in the context of a whole array of issues that are consuming America at the moment, and you know he's not going to win in a debate on you know, at Columbia for sure, but to engage and to understand h and to understand the legitimate aspirations of the Palestinian people too right, I mean.
We could be on the wrong side.
Let's be clear about this.
The Palestinians are going to get a state.
We just blocked them.
In the u n you know, are We're going to block them forever because because this will propel terrorism and and it's a fundamental risk.
To his election campaign.
So yeah, I think he's he's really facing kind.
Of an ambiguity, is strategic ambiguity with no clear path forward, and I I feel like he's at pretty profound risk geopolitically, national security wise, daplastically.
And David, I'm sorry I don't have more time for you.
David Harden. Come sit with us in studio next time. It's great to have you with us. I'm Joe Matthew. This is Bloomberg.
You're listening to the Bloomberg Balance of Power podcast kens just live weekdays at noon Eastern on Apple CarPlay and thenroyd Oto 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.
I'm Kaylee lines alongside Joe Matthew live in Washington, d C. Where we know President Biden always tries to put a positive spin on economic data when we get it. For a while, Joe, it did seem that the data was trending more in the favor of an incumbent president, with growth in the labor market hanging in their inflation was cooling. It feels that maybe that is happening to a lesser
degree now. It wasn't too hot today, but it was still slightly hot, hotter than expected at least one of the metrics, And.
There's thoughts that revisions could be a greater problem as we seem to be stuck here. If plateauing is the word to use, I'm not sure. I guess that's better than continuing to rise. But Anna Wong is with us from Bloomberg Economics for her take is Anna is frequently the contrarian on some of these issues and not always in line with the conventional wisdom on Wall Street.
Good to see you, Anna, Does this.
Confirm the fears that so many people had yesterday because it's really being kind of snuffed out by strong earnings and a different attitude today.
In the market.
Yeah, it's actually better than what people feared yesterday. I was here in this program yesterday and I said that the Wall Street was reacting to yesterday's GDP implied inflation, thinking that today they're going to see core PCEE going at zero point four to eight. Instead, we got zero point three to two, which was what we in line
with what we were expecting yesterday. And this is why today we see that two year yields and the ten year yields actually came down because it's not as bad as still it's uncomfortably hot.
Well, and I guess that kind of brings us to this question as to whether or not not being as bad as it could have been makes it really good news if you're the Federal Reserve thinking about how tight policy is going to need to stay for how much longer, if you're a market wondering when the Fed is going to be making those decisions that they can ease policy. Ultimately, this doesn't really change what we thought yesterday in terms of what the Fed will do.
Right, Yeah, exactly, Kelly. So the big picture is that inflation is stickier than the FED wants. And next week we're gonna have Powell probably coming out to make a big hawkish pivot. And the reason why we expect that big hawkish pivot from Powell next week is that, you know, the other day one of the most dubvish member of the FOMC, Austin Goilsby, said that the FED will have
to recalibrate the strategy. So if even the most hawkish member said they need to reac calibrate, it means that the whole committee is likely going to signal something big next week.
Wow. Fascinating.
So the news conference, if not the statement itself, the language might change in the statement. What would be j Powell's posture here, because he seems to have gotten to the point where he wanted to to convince the markets that we're not cutting anytime soon.
Yeah. I think Powell could even briefly hinted that maybe they won't cut rates and in fact a rate hike could be an option on the table. I think that would be enough to send the market.
We'll go over well.
Yeah, all right. Anamal, chief US economist at Bloomberg Economic, has been a busy couple days for you and it's certainly going to be busy next week. Thank you so much as always, and of course, Joe, as we've discussed on this program in the last several weeks, Joe Biden has not actually proven that reluctant to talk about FED policy recently, standing by his idea that the FED will cut at least once this year, maybe just a month delayed.
In his word, we planned back that sape.
Well, yeah, I guess.
We'll see about that.
And we know that Donald Trump and his administration was very vocal about.
What the federating at him every day. You see this Wall Street Donald story.
Yes, indeed the Trump administration if there's another reshaping the FED. They're talking about allies of Donald Trump though, they're having these meetings about how they could sort of dismantle things and have the president himself for herself play a role in sending interest rates. But I wonder if Donald Trump himself is involved in those conversations. The story didn't seem to indicate knowledge, So we'll look.
For more clarity that we might not be getting it today because Donald Trump is a bit tied up at the moment. He is in court in New York in the hush money case where David Pecker is being cross examined on the stand. It seems that his defense teams trying to make it trying to make the case that David Pecker was not just trying to help Trump politically, but potentially help the playboy model in question, Karen McDougal
reset her career. So that is where we begin now with Dave Ehrenberg, who's the state attorney down Palm Beach. We always love to have Dave on the show. Welcome back to Balance Power on TV and radio. Dave, just walk us through how you are reading the days of testimony that we have seen thus far from mister Pecker, and how you think the case is going so far for the defense on the one hand, for prosecutors on the other.
Well, it's great to be back with you. I think it's going well for prosecutors because Pecker is able to corroborate Michael Cohen's story that he will tell. And Michael Cohen has been a very important but flawed witness because he had a prior conviction for perjury among other things, even though he was lying on behalf of Donald Trump. But it's important to get corroboration and Packer was part of Trump's inner circle during his campaign, and the key for Pecker is also to set the stage for what
was going on. This wasn't a one off, This wasn't a one time deal with Stormy Daniels. This was a coordinated effort to catch and kill stories that would be damaging to Donald Trump for the sake of his election. It was done right before the election. There was a non disclosure agreement with that doorman that expired right after the election. There was the payment to Stormy Daniels two weeks before the election. So this also undercuts Donald Trump's
certain defense that this wasn't for the election. This was just to help Trump with his wife Milanya to keep this stuff secret. So it was to protect his marriage. No, Pecker exposes the falsity of that, because it was, according to his testimony, all about the election.
So, David, it's great to have you. Good to see you. When are we getting a ruling on this gag order? We have to wait for another hearing.
We thought we had a hearing, but then I guess five more violations since then. It almost seems like a strategy. As long as Donald Trump continues to violate the gag order, they'll never be able to enforce it.
Yeah.
Donald Trump supporters say that he's being treated differently than everyone else, and I agree, but not for the reasons they say. I think he's being treated better than others, because, Joe, if you and I were out there bashing the judge and violating his orders, we would be locked up yesterday. I mean, we would be wearing an orange jumpsuit and
steel bracelets. But Donald Trump is able to do these things because judges don't want to appear political and they want to show their even handed so they bend over backwards to give him the deference, the grace to continue doing this, and at most he'll get hit with the fine. Do not expect that he will be incarcerated pre trial because of his words, no matter what he says.
Okay, well, what about post trial, Dave? I mean, ultimately, when we're considering the very jury going to decide whether or not to convict him of these charges. These are felony charges, thirty four of them, maximum penalty of four years in prison for a class E felony. Do you think realistically that will ever happen, that we would see Donald Trump behind bars?
Unlikely? I think he would get either probation, which he's eligible for there is no mandatory minimum with these charges,
or perhaps he gets some version of house arrests. I cannot envision the Secret Service taking up shop in the cell next to Donald Trump in New York, especially because this case, although I do think the prosecution is a good case, on appeal, it could get a little shaky because there's some uncharted territory here legally speaking as to whether you can use the second statute, which appears to be a state election conspiracy statute, to elevate a state
misdemeanor to a state felony when that other statute involves campaign finance stuff, And can the state regulate campaign finance when that's a federal election. Wouldn't they be preempted by federal law? These are the kind of arguments that Trump's lawyers will be certain to make on appeal, and I think Trump has a better chance on appeal than he has in this current trial, where I think it's probable he's going to be found guilty.
Fascinating Dave.
I was talking to June Grosso a little bit earlier about the security that's afforded the witnesses high profile witnesses like Michael Cohen and Stormy Daniels. This is going to take a whole take on a whole new look and feel when we see these two individuals specifically, and I'd say even most, especially Stormy Daniels taking the stand, and it's going to be here a pin drop. The kind of stories that she's going to be telling will be explosive.
It's one thing to be in the courthouse. What kind of security are they afforded while they're in New York for this whole experience.
Well, the security would be pretty much their own that if they would have to come up with I don't see that none. Yeah, the prosecutors will take care of them while they're testifying and around the time they're going to the courthouse back and forth. But after it's over, after they testifier, before it's up to them. And that's the scary thing. That's why you have a gag order, because you don't want Trump to rile up his very
aggressive masses. He's got some real hardcore supporters who will show up at Barack Obama's Georgetown condo with a van full of guns and ammunition after Trump docks is the former president so we've seen this before. We saw it on January sixth. So yeah, it's your right to be concerned about their safety. And that's why the judge should enforce these gag orders more strictly, because you don't want him tempting to tamper with witnesses.
Well, on the subject of witnesses, Dave, it's also worth pointing out that Donald Trump is indicated he may testify in his own defense at some point, not just other witnesses that will take the stand. If you were on the prosecution team or on the defense team, how would you feel about Donald trump testimony As these trial weeks go on.
There is zero chance that Donald Trump will be taking the stand. I know he's saying he's going to, but that's for public consumption. That's for the benefit of his team of his supporters, so that they say, yes, he's got nothing to high and then I'll find a reason why he's not taking the stand. If he takes the stand,
he's subject to a withering cross examination. He'll have to deal with the embarrassing details of the Stormy Daniels relationship, and he'll have all the stuff that's going to come in about for example, the civil fraud trial that he was just found guilty of up there in New York. I mean things that will embarrass him he will not want to respond to. And if he'd he does respond and lies, he could be charged for that. So he'd be walking into a perjury trap. His lawyers will not
let him take the stand. Donald Trump knows better. Right now, it's all bluster. Don't believe the hype.
Who's the slam dunk in our remaining moment here, Dave, Who's the slam dunk witness? They've been trying very hard to discredit Michael Cohen? Is it Stormy Daniels herself?
No, I'm gonna go off the board here. It's not Stormy Daniels, not Karen mcdom, not Michael Cohen. They're all They're all important witnesses, but they have somewhat of an acc of grind. You know who doesn't have an acc of grind? Joe Hope Hicks. Hope Hicks was in the room where it happened. She was on Air Force one steaming his clothes while Trump was still wearing them. I mean, she's privy to a lot of private conversations, and she's a Trump loyalist and she cooperated with the grand jury.
She's gonna be brought in for corroborations. That's gonna be musty TV, even though there are no cameras in the courtroom. But at least maybe people can watch us talk about it afterwards, because is when Trump sees one of his most loyal aids up there to corroborate Michael Cohen's testimony. I think that's going to be the big thing, So watch for that.
Incredible. It's always great to have Dave Ahrenberg. Good to see you. Dave. Let us know when you're back in town.
He's Palm Beach County State Attorney, reinforcing the drama, Kayley in this case that typically does not need a lot of reinforcement. If there's one thing we have in ample supply, it's the drama in New.
York, certainly, and some of that is brought in and out of the courtroom in front of the cameras. When Donald Trump speaks. We did hear from him, by the way earlier today, because it's not just a trial day for Donald Trump, it's also his wife's birthday. This is what he said about that.
I want to start by wishing my wife Malania, very happy birthday.
He nice to be with her, but I'm at a court house for a rig drive. Terrible, but we're doing very well in this rig drift.
Everybody knows yesterday was a big day, but I.
Do have to begin my wishing happy birthday.
Happy birthday, so the former First Lady, who we don't see very often with Donald Trump, but nice of him to mention Milania as we assembled our panel, just for a couple of minutes here, want to have Rick Davis and Jeanie Shanzeo each take a swing at what we heard and we'll have a deeper dive coming up here on balance of power, our signature panel with us, Rick, what do you think after hearing from Dave Ehrenberg and what we're about to experience the next couple of weeks
for someone who's trying to be elected again to the White House.
Yeah, I can't even fathom the campaign disarray around having your candidates sitting in the courthouse, you know, four days a week with Wednesdays off, and trying to beat out some kind of message each day. It's it's just intolerable and there's no good news coming out of this right you'd have to dig for the pony to find a positive news story out of these trials.
Happening right now for him, well, Genie Rick mentions he's stuck in court four days a week. He does have Wednesdays off. Reportedly he spent this Wednesday this week his day off from court golfing at his club in Bedminster. So what do we do with that information?
Yeah, we thought maybe they'd sneak in a campaign event. They did not. You know, it's fascinating to me to hear him wish you a happy birthday to his wife, the former First Lady, Happy birthday, but then he slips right in there to calling the trial rigged, rigged, rigged. He simply cannot control himself or help himself, and he's walking dangerously close to more and more violations of this gag order, which we still don't have a ruling on
by the judge. And all of this makes it not just a headache for the campaign, which is big, but for his attorneys as well. I mean, we don't even know the next witnesses because he's constantly attacking them. The prosecution won't reveal the list, so it's a it's a nightmare for everyone trying to work with it, and you know, there's not much more that they can.
Do to control him, though, Jenny Shanzano and Rick Davis, We're going to have a lot more coming up with our panel. They've got to do another hearing on the gag order, right, there's five.
More next Thursday.
Leeg's Violations. I'm Joe Matthew alongside Kaylee Lines. I'm more coming up a Balance of Power only on Bloomberg.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on Apple car Play and then roun Oo with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
A lot of New York news this week. We're here at Washington talking about New York every day. Joe Biden there, Donald Trump of course there in court. And there are questions today after Joe Biden did an interview with Howard Stern about whether we're going to see any debates at all. This is not the first time that this has come up, because we know that Joe Biden has questioned this. He says, well, what you know, what if he is lying through the whole thing. How do we manage that is the a
credible person to debate? And we also know that Republicans have a huge problem with the Commission on Debates and don't want any of the mainstream moderators who have been suggested.
Yeah. Well, and Donald Trump did not partake in a single Republics from primary debate. We just saw Ron DeSantis, Nikki Haley, and veg Ramaswami fighting it out amongst themselves as Trump remained the front runner. So I guess we'll see if things are different now that we're in the general. This is what President Biden had to say on the matter.
Can I tell you what fantasy I had? I don't know if you're going to debate your opponent. I am somewhere. I don't know when I'm happy.
So that was President Biden. The voice you heard before if you're listening on radio, was Howard Stern, who was conducting this interview. And I will conduct an interview of our own now with Rick Davis and Jeanie Shanzino. Our signature of political panel are with us. So, Genie, is this a good idea for Biden? He doesn't exactly know where or when it seems, but he's open to it.
Yeah, I mean, this was fascinating. Apparently this was an unscheduled or at least I shouldn't say on scheduled, unannounced stop in New York. He's in New York today and you know, even the White House press pool didn't know he was going too serious to do this interview. He goes there and he makes news. So, you know, I think it was a coup for the campaign in that regard.
I think it's also telling it is on Howard Stern and obviously not you know, in a more mainstream media outlet, but it is of course important because it's the first time we've heard the president commit to debating Donald Trump. And of course we had Donald Trump not that long ago at a rally with an empty podium talking to it, waiting for Joe Biden to debate. So the you know, Trump campaign has said they want to debate. Joe Biden's
ready to debate, so you know, here we go. But you know, I also think it's a good a good thing for the campaign on Biden's part that they've been able to get breakthrough sort of the news of the Trump trial in this way during this trip to New York. So a good day all around for the Biden team so far.
Well, Rick Davis, we've come full circle, I guess on a couple of matters. Howard Stern is now hanging out with Joe Biden. I can remember when Donald Trump was one of his favorite guests. He could come out with a catalog of archival interviews. Some would suggest he helped to get him elected in the first place by making him the character that he became on that program. But it seems like Donald Trump maybe maybe Republicans have come
full circle on the idea of debates. I thought they had an allergy to debates on network television with mainstream media moderators, but recent reporting has suggested otherwise.
Are these two guys going to get on a stage or not?
Yeah, I've said in that studio with Howard Stern talking to John McCain about presidential ambition, and nothing made.
Me more worried than that.
Our long time and frankly thing to recall, we did it as a stop by too. We didn't tell our media pool and just went over there. So it's the place you go to have some fun. It was a pretty light interview, but I disagree with Jennie. If I were sitting there and John McCain said, I commit to debating my opponent, why.
Would you do that.
We haven't negotiated with them yet. I've negotiated a number of presidential debates, and if you're an incumbent, you start out with why should I debate you? And you'll negotiate from there. Best I can tell, Donald Trump nor the White House has agreed to the commission terms. There's a National Commission on Presidential Debates that has already arranged times, places and dates, and nobody has said yes to any of that.
So we're a long way.
From having an agenda where those two candidates are going to be on the stage together.
And I don't even know.
I haven't seen anything in reporting that indicates that they've appointed debate negotiators and even begun that process, which is pretty formal. You come up with a memorandum of understanding and it governs the entire debate. So I wouldn't hold my breath all right now if you were planning on going to a debate right.
Away, all right, reality check from wow Rick Davis. We always appreciate it. There's also just the question of what a debate would accomplish. I think we all remember how debates went down in the twenty twenty matchup between these two Genie It wasn't pretty. At the risk of editorializing, and they are now because Biden ultimately won that election. Two presidents were talking about here the American people know them. So would a debate accomplish for either of them?
Yeah?
That debate, you know, I remember it so well myself. It was stunning, and now we think Donald Trump had COVID during it, potentially, you know, I still am a believer in the debates because I do think it's important that the American public be given the chance to see the two candidates on the stage together speaking as much as possible. There is certainly room for improvement, God knows, but I do think it's important, and I disagree with Rick.
I think this was Joe Biden quintessential calling Donald Trump's bluff. Yeah, I'll debate you. I think the worst thing he could have said to Howard Stern and his audience today was Oh, I'm gonna sit back. No, you know, I'm not sure.
No, bring it on.
He can debate him, He's done it before and he has won. I can guarantee Donald Trump, who hasn't debated this cycle yet, is going to come up with all kinds of excuses not to be there and make it hard. The Republican Party has already stepped away from the commission. So absolutely Joe Biden did the right thing. He's on the right side of this, and let's see Donald Trump come forward and agree to it. He hasn't for any of his others.
Okay, Genie, your wish maybe is Donald Trump's command because he just posted on true Social crooked Joe Biden just announced he's willing to debate. Everyone knows he doesn't really mean it. But in case he does, I say anywhere, anytime, any place. It goes on after that. But I guess those all caps all caps of course they are.
We'll see that all right now.
So now we've confirmed that Donald Trump does listen to the program, which is interesting to me for starters. But they're both going to act like I'm assuming they want to debate. You're one of the first people I've heard suggest that that will not happen.
We didn't.
To Kaylee's point, see Donald Trump in a debate once in the primary cycle.
So will this be the debate less campaign.
Yeah, very well could be. The reality is the media organizations and the Biden campaign having learned, as Genie points out from two thousand and twenty, that there's no way to actually monitor the facts that come out of Donald Trump's mouth. I should say, messages that come out of Donald Trump's mouth for factualness. You can't stop the debate after every answer and say, okay, here are the things
that he said that aren't true. You know, and when you look at town halls and things like that that CNNA has done and other outcomes, they're a disaster for those organizations because you know, there's no way to govern Donald Trump's behavior.
And so.
Unless you have some understanding that it's going to be a fact base endeavor, it's like taking Joe Biden and tying both his arms behind his back because he's likely to try and be accurate. Now, he may forget things, and he may have other kinds of problems, but it won't be the kind of problems Donald Trump presents to the stage. And so if you're the Democrats, and I know having talked to some of their political folks, this
is a real problem. Right One's fighting by Marcus at Queensberry's rules, and the other is fighting by the bronx bring chains and a gun. You know, I'm sorry, Joe Biden, but that is not the way you operate. And so why say yes to that kind of a brawl.
Yeah, you don't bring a knife to a gunfight, Jeannie. This but this post on truth social goes further as he concludes with let's do the debate at the courthouse tonight on national television. I'll wait, is this kind of goating going to be what we do all summer?
I think it will be. And of course number one, of course he's listening to you too, and I'm so glad to hear it. Over to seven point thirty one Bloomberg and get on there. They should both debate. But you know what I really have to say, Joe Biden enjoys being underestimated.
He is up to this.
He will absolutely be there and be present for a debate. Look at the last two states of the unions, he outperformed what anybody expected. He's one person who has debated Donald Trump and in an election, so I would not underestimate him in this context. So bring on the brawl.
It's gonna be a great summer, we're getting like West Side still, can we pull that?
I want to play that back. I don't know what are we going to do, Kayley.
I don't know. I feel like we did a disservice by not reading the full tweet, because it's not just at the courthouse tonight. After he sas New York references anywhere anytime, any place, he goes on to say, I suggest Monday evening, Tuesday evening, or Wednesday evening at my Raley in Michigan, going on to say an alternative, he's in New York City today, although probably doesn't know it, and so am I stuck in one of many.
Although probably doesn't know it.
Yes, you can find that whole post on truthsocial dot com.
You're spending people there now, Rick Davis and Genie Shanzde No, thank you. It must be Friday, and we need our closers with us. They'll be back later on, by the way, our signature panel five PM, the late edition bounce of Power Bloomberg Radio and TV.
Always something to learn from Rick in Genie, We're.
Going to talk a little bit more coming up here, Kayley, about our other top story today that's economic data.
Absolutely, we're going to get Mark Zandi from Moody's on the program.
You're listening to the Bloomberg Balance of Power podcast. Can just live weekdays at noon Eastern on Applecarplay and Enrounoo 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.
Seems that Friday is a better day. Yes, the data is not as scary today perhaps for the market as it was yesterday.
Some better than expect journings going a long way here, and it's hard to tell if we're caught in the glare of Google and Microsoft beating estimates, Kaylee, or if there's a little bit of a reversal in the negativity surrounding the PCEE data yesterday. Quarterly monthly data out today
and it's telling a bit of a different story. We're certainly seeing a reaction here, a bit of a sigh of relief realizing the headlines of problem as we've discussed politically for Joe Biden, but in terms of the economy itself. Mark Xandy at Moody's Analytics out of a tweet yesterday that might tell us a lot about where we are today. Mark writes the Weaker that expected growth was largely the result of a bigger increase in the trade deficit driven
by more imports. Perplexed by the sell off in the stock and bond markets, he's with us now again. Chief Economists Moods Analytics Market. It's great to see you. We're overdue for a catch up here. Did the data today reinforce your point from yesterday?
I think so, Joe, Yeah, yesterday was a bit perplexed at the market reaction, I mean, big sell off. It felt like folks were focused on the strong increase in the core PC for the quarter, But in today's data reaffirmed that, well, inflation remains sticky. It's not coming in quite as fast as everyone would like. You know, it's not hair on fire. You know, it is coming in and it will continue to come in, you know, over
the course of the next several months. I think everyone's just a bit more relaxed today, and that on top of the good earning, so you know, contributed to green today compared to red history. But if you add of both days, we're kind of.
Where we sort of started. So no real.
Change Okay, fair enough. It's also worth pointing out that PC was not the only data that we got today, Mark, We did get University of Michigan sentiment figures and inflation expectation figure sentiment going down, inflation expectations at least for the year ahead ticking up. How should we be thinking about the consumer, the engine of the economy, that was what is driving the GDB growth that we are seeing, and how they're how firm they are at this moment, how stable.
Bill rock solid and Ni Ailey, you know, they're driving the train, have been throughout the since the pandemic, continued to do so. No sign of any kind of weakening and consumer spending at least not in the reports we got today and yesterday, and for good reason. All the fundamentals look good. Wage growth is stronger than inflations, of people's purchasing powers improving, and that's across the entire wage distribution.
Low wage workers, high wage workers. You know, unemployments for four percent been there for more than two years, so that, yeah, that's not changed.
So barg If all of that is true, why isn't sentiment higher? Why don't people feel better? Bloomberg's polling suggests people feel that the economy is going to get worse, not better, in the months moving forward. So what's the disconnect.
Well, partly you're looking at the wrong index, you know, again the interest of Michigan survey that's biased by political people's political prism. I think if you look at the Conference for survey, yeah, you know, that's exactly right down the fairway.
I mean, it's they've.
Been doing that survey for decades and it's a little bit above average, no change in the last six, nine, twelve months, very consistent with the spending we're getting. So I wouldn't pay much attention now. Having said that, I do think people, you know, the typical American is still feeling the sting of the high inflation we suffered back in twenty one twenty two going into twenty three, and
people are paying a lot more. Even though inflation has come back in, people are still paying a lot more for food, for rent, you know, kind of the staples of life.
You know.
I just got my insurance motor insurance, vehicle insurance bill, joked when I saw it. So, you know, we're still inflation's in and that's great, and that's very positive for future Fed policy and interest rate cuts. But you know, people still have are still feeling the ill effects about high inflation that we suffered back a couple three years ago.
Where are you on interest rate cuts? So we're going to get any of this year?
I think so, Joe.
I mean, if there were no election, I'd say we'd get two, maybe three. But there's an election, and that messes things up. So it feels like it's going to take a few months for the Fed to collect the evidence they need that. You know, the Zandi's right, and inflations come in and we're going to be fine, and that probably takes us to the September meeting. But you know,
September is right before the election. You're right in the middle of the election, and I mean you've been seeing reports about what President Trump might do to the next Federal Reserve. They're going to be politicized. They just don't want to do that.
Now.
Not lowering rates when the inflation numbers say you should lower rates is also political, but less likely you get wrapped up in the politics if you don't cut right. So that means that takes you to the November meeting. But the November meeting is like days after the election. I mean like literally right after the election. Making a
movement feels political. So I know, when you add it all up, given all these dynamics, I say one rate cut in December and then quarter a rate cut every quarter next year going into twenty twenty six.
Okay, so it might be a while because of the election before you see the support for the economy in the form of policy easing perhaps, And I would imagine in that same vein market also, we should have very little expectation that if something were to break, if things were to suddenly materially soften, but the Fed, still fighting inflation, wants to keep policy tight that you wouldn't have any kind of fiscal policy stepping in to try to do some of that work either.
No, No, that's just not going to happen. So the economy is on its own. I do think if something breaks in the financial system, and just as a reminder, you know, when the Fed's got the funds rate of five and a half percent, you'll curve is inverted. Financial system is under a lot of pressure. That's one reason why you might want to cut sooner rather than later, not to so nothing breaks there. Yeah, and there's you know,
things to be cautious about in the broader economy. The lib market feels really good, but that's resting on no layoffs, and that feels like something that can change very quickly if there's an event or sentiment shifts among business people and they start laying off workers. So I do think there's a strong argument to start cutting interest rates, and I think the FED would cut rate if something did break, even though inflation is not quite back to where it needs to be, at least in their book.
Spending time with Mark Xandy from Moody's Analytics here on Bloomberg TV and Radio. That's reporting out today Wall Street Journal story Mark, that makes you wonder what the FED might look like if Donald Trump as president again. He's hearing advice apparently from some of his allies, that there'd be a way to take power away from the FED and even introduce the commander in chief, make the president part of the interest rate decision making mechanism. This is
all blue sky stuff right now. But what would another Trump term mean for the Fed?
Well, as you know, it's coming from the Wall Street Journal, I have no other knowledge than that. But let me just say, you know a bedrock of a well functioning economy, a market economy. Our economy is an independent federal reserve, if fed, a reserve that can make interest rate decisions independent of political factors, or at least as best as they can do if they're changing policy because it makes for good politics, and that Trump's what's needed for a good economy.
That's just a prescription for disaster.
And I think every investor on the planet knows that, and I think everyone would throw up all over that. So hopefully that's just a report, just a report, and nothing more than that, all.
Right, Mark Zandy, Moody's analytics chief economist. Always great to have you here on Bloomberg Television and Radio.
Thank you so much, thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at New Time Eastern at Bloomberg dot com.