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Good to see you.
Welcome to the Tuesday edition of Bloomberg's Balance of Power. I'm Joe Matthew in Washington, where we have news the President leaving the bubble today on his way to Florida to raise money and making news, saying that he holds Iran responsible in the recent deadly attack on US troops in Jordan. Of course, people for the last forty eight hours have been asking what will the response be. He says, Iran is responsible quote in the sense they're supplying the
weapons unquote. To sort of unpack what he may have meant by that, we're parsing words at this point. Before we talk to Michael Knights, we bring in Jordan Fabian from Bloomberg's White House Team. Jordan, it's good to see you. Every word matters in a tense situation like this. Much has been said about the options facing the president. He also went so far as to indicate as Bloomberg is now reporting that he's made up his mind.
Do we have any sense of what it is?
Well, Joe, it appears there's going to be some retaliation militarily, whether that is against Iran itself or a proxy group, whether they're targeting personnel or weapons, as Joe Biden mentioned in that gaggle, remains to be seen. And these are the tough questions that he has to make in deciding how the US will respond, because of course there are major consequences whatever way he decides.
I wonder if he intended to say that. Maybe that was all by design, but it sure seemed like the administration spent the weekend and Monday going out of its way to say, we do not want a wider war Jordan. We're not seeking war or a military conflict with Iran. But when you say something like that in the driveway makes you wonder.
Right, So that would suggest, I mean, and he did repeat that too, then he does not want a wider war. Or this morning right after he said that he holds Iran responsible, so that would point to something more limited, something more like a check the box strike like they've done against the Huthis over their shipping attacks. But there's a domestic audience as well. Republicans some Democrats want to see a very forceful response because three Americans died in
that attack in Jordan. So will that satisfy the domestic audience As he heads into a.
Reelection, that becomes the question, of course the language we're hearing from Republicans and even some Democrats. But look at the Armed Services Chair in the House, Mike Rogers. Biden's fear of escalation has morphed into a doctrine of appeasement. That is not a narrative that the president can withstand on the campaign trail.
No, his foreign policy has really come under attack. There's a sense that Republicans are trying to put out there that the world is on fire under Joe Biden's watch, pointing to the Israel Hamas War, the warren Ukraine, and now these attacks on Americans. So he needs to show strength, and that's why he might need to do something a little more than just a token response here.
I'm sure you can speak to the line he's trying to walk here, though, he's got progressives on the left who are ready to bail on him because they think he's being too supportive of Israel, and he's got critics on the right, like I'm saying here, and even on both sides of the Aisle who think he needs to do more when it comes to Iran. It is kind of the definition of a no win.
It is.
But I will point out Shoe that that is how he won in twenty twenty was kind of pushing away the extremes in both parties and presenting himself as this reasonable candidate. So if he is in that position where the right and the left are angry at each other, he can kind of try to thread the needle that way. But at the same time, look, the polls show that voters are deeply skeptical of his leadership on the world stage.
So he needs to, you know, at least would like to have the Israel Hamas war wind out, these hostilities against American forces, stop.
Spending time with Jordan. Fabian Bloomberg, White House correspondent. As President Biden heads out of town, he's on his way to Florida. As I mentioned, fundraisers in Jupiter and Miami, tickets going for as much as two hundred and fifty thousand dollars. Jordan, will he get an earfull on any of these issues at some of these. He's been interrupted at so many events recently. I wonder if this is part of a fundraiser or a choreograph fundraiser that's happening outside of town.
A lot of propouse city and protesters have disrupted him. As you mentioned, Joe, it happens a little less at the fundraisers. Those are a little tougher to get into the crowds. There aren't necessarily sharing the same views as those supporters. You can actually might get an earful from the other side of the sort of the republican arguments that he made, which is, you know, he needs to
do more to support Israel. He shouldn't be questioning the Israeli government at a time of war, so you might hear from the other side.
At this event in South Florida.
We heard from the Secretary of State Anthony Blinken talking about a possible response, and again, while Bloomberg is reporting that the president has made up his mind, we don't know what that decision is. The line from the secretary a response could quote be multi leveled, come in stages, and be sustained over time, as opposed to Jordan's some shockun awe bombing campaign that happens later on tonight. This may not feel like the response that some people get.
This could come to the Secretary's point in stages.
That's right, and I would look to the response against the who Thi's as a possible model, which is there have been multiple air strikes. They are trying to target their weapons depots so that they don't have the capacity to keep hitting shipping channels. You could see something like that against possible areas where Iran strones are being stored.
Sure the reporting today, by the way, that this may have been prompted. This attack may have been allowed because of confusion. They thought an American drone was coming back to base, but apparently it was the one from this Iranian proxy. If we had any confirmation on that.
Not that I've seen, Joe, but obviously that would be a concerning intelligence failure. If true, it's a whole new fog of war on the age of drones. It's remarkable, Jordan, thank you for coming in. We rely on Jordan Fabian on this program so often. Bloomberg White House correspondent with the line from the other end of Pennsylvania Avenue here
as we add Michael Knights to the conversation. I've been looking forward to this the Washington Institute, Jill and Jay Bernstein, fellow specializing in the military and a real expert here on the region and the players. Michael, it's great to have you back on Bloomberg. We're talking so loosely about Iranian proxies. I wonder if we can be more specific before I ask you questions about what's coming next. The Whuthis have been on the front page. Obviously, people are
familiar with Hesbollah and Hamas. Are these the three primary groups we're talking about or are there more?
Well? In some ways, the mass is a bit of a newcomer, you know, because they're a Palestinian movement from Sunni Islamic community, whereas most of Iran's proxies come from the Shi'a Islamic community, and they would include Lebanie says Bulla, the first and earliest the Iraqi Shia militias who fought on Iran's side during the Iran Iraq War for those
listeners who can remember the eighties. And then finally the newest member of that access of resistance, the Huthis down in Yemen, who kind of form a southern hbulla like the southern pincer of a kind of a crab claw that the Iranians have got around Israel and the Eastern Mediterranean and the Red Sea.
So what do you make then, of what we're hearing from the White House, the President telling reporters that Iran is responsible for supplying the weapons in this attack that took place in Jordan, and that he's made up his mind. Do you have a sense, based on what you've seen already from the Bidendministration what might be about to happen.
I think what's about to happen is that we're probably going to strike inside Iran for the first time since the nineteen eighty hostage rescue.
I'll come.
And that's, you know, the reason being that essentially we've run out of options, We've run out of runs on the escalation ladder. We're trying to convince the Iranians and their proxies to stop mounting attacks that could kill us in Iraq and Syria and to stop attacking global shipping in the Red Sea through the Hoothies, and they're simply not responding. So that tells us that you can't just
keep attacking the tentacles of the octopus. You've got to attack the head of the octopus the way the Israelis describe Iran's network, and I think that's coming next.
How do you do that and not prompt a wider war?
The Biden administration has been so careful to try to not escalate things. Wouldn't that define escalation?
Well, it does. But this is what happens when you run out of road in your existing escalation management strategies. I mean, essentially Iran and Iran and the US have both been what we call escalating to de escalate, and both of their strategies have not been working. So essentially, you know, we've got two failed de escalation strategies hitting head on, like two trains hitting each other. And for US now Iran, doing something in Iran is the next step.
But of course, if you did something very lightweight in Iran, if you just pecked away at a particular base in the middle of nowhere, revolutionary God training base, if you went for some radars on the coast, what you're doing there is that you are breaking the seal on the Iranian homeland. You're saying, we're ready to do this from now on. We haven't done it for the first forty plus years of the Islamic Revolution's life in Iran, but we're doing it now, and we are only going to
do it a little bit at the start. But next time it might be worse. That could have the shock effect required to make the Iranians back down their proxies, or it might require something even stronger.
What would be the Iranian response to an attack on Tehran ran directly on Iranian soil.
If we hit something on Iranian soil, even if it doesn't really hurt very much, they're going to have to hit us back at one of our regional bases, probably our Sad in Iraq, which is where they hit us after we killed the castm. Solomoni, their senior general in the region in January of twenty twenty. You know, they hit us back in Alas Sad, and even though we didn't suffer and he killed that day, you know, they rung the bells pretty badly through traumatic brain injuries, you know,
well over one hundred troops. So they're going to do something like that. If we hit them very hard in Iran, they might do something a bit more aggressive.
Even that's just official action from Iran and the Revolutionary Guard, what would become of Iran's proxies, not to mention, just lone wolf terrorists who would love a reason to strike at the US.
It's interesting to note that when we hit Kassum Solomoni in twenty twenty under the Trump administration, which was about the most painful thing we could have done to them, honestly, they didn't get their proxies to hit us back. Immediately. They basically said to all of those guys, hold, we'll do it ourselves. This is our business, our avenge to get and we can do it precisely in a way that probably the Americans won't respond to.
And that was true.
Trump came out and said, fees fair, we hit them, they hit us. Is over, and so it may well be that that will be their response another time. The problem for the Biden ministry is we want this cycle to stop, and ideally we wanted to stop before the Gaza war ends, which might happen in February or March,
or it might take a lot longer. And so we're trying to work out what's the cold splash of water to the face that's going to make the Iranians find a safe, face saving way to just turn this off, and we're not sure if it's going to work or if it's going to make things work.
Wow, well, clearly the stakes could not be higher here. You might have heard me reference Anthony Blincoln. He said something else yesterday. I would argue, said the Secretary of State, We've not seen a situation as dangerous as the when we are facing now across the region since at least nineteen seventy three, and arguably even before that.
Would you agree with that statement?
Yeah, I would agree. And you know, it's hard not to look at a lot of the policies of the last ten years and you know, fifteen years and say this was really a problem of our own making, honestly, because we failed to stop these kind of threats before they evolved to become so significant a networked.
Well, it makes you wonder what future policy is going to mean with the two possible presidents. Let's say that this is a Trump Biden campaign, what would this mean, Well, the Trump administration less than a year from now.
Well, we know that Republicans are amongst the leading voices who want to move to mainland Iran and begin to affect the head of the octopus, not just the tentacles, so we could say they're more likely to do that in the future. I'll say one thing though, you know, the last three years, if you look at the failure to try and rebuild the nuclear deal and then you look at the increasingly militarized competition with it between the US and Iran since the goals of war began, there's
no putting Humpty Dumpty back together. It's very hard to imagine any administration, Democrat or Republican having faith in the idea of a significant de escalation with Iran. Instead, what we're looking at is more of a containment strategy as we had with let's say the Soviet Union open ended or North Korea. It's an open ended, containment mechanic strategy against a near nuclear adversary.
Think we'll see some action in the next twenty four hours.
Yeah, I'm surprised we haven't seen it already, But I think that demonstrates the Biden administration is not willing to just hit the targets it can fined, which is those in Iran. It's looking to hit the targets it wants to hit instead, which are probably some leaders who they're waiting for them to pop up in Iraq or Syria so they can take a whack at them there.
Think of that when you see the headlines. Michael, it's good to see you, and I appreciate you're joining us. Michael Knights with us from the Washington Institute for Near East Policy. Getting things rolling here.
Listening to the Bloomberg Balance of Power podcast Ken just live weekdays at noon Eastern on Applecarplay and then Rodoo 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.
Welcome to Bloomberg Balance of Power, Kaylee. The President has just touched down in Florida. There were some questions about whether he should have stuck with the schedule today knowing that there could be a response coming against Iran or its proxies as soon as tonight.
Yeah, we don't actually know the timing. We don't even know what that response ultimately will entail. We just know that he has made a decision about what the response will be. And actually Admiral John Kirby, the spokesperson for the NSC was briefing reporters on the plane to Florida and said it will be a tiered response. So this isn't necessarily just something flies, you know, tonight or in whatever day the administration chooses, but we could see multiple steps to this retaliatory process.
There we say a laddered response. We spoke with Michael Knights.
A little bit earlier on Bloomberg Radio Kayley, and this is someone who knows Iran's proxies as well as anyone. He predicted here on Bloomberg Live that we're done with escalation, there's nowhere further to escalate, and that the US he believes, will strike Iran directly, and he thinks it could happen as soon as tonight. That's a pretty incredible prediction to consider what the response to that might be. And I wonder if we might see the president where's the Oval Office address at a moment.
Like this, Well, if we indeed see a strike like that, then surely he would have to address it in some form.
It's interesting, though, that he would characterize that as not an escalation when we haven't actually had that's a direct strike on Iranian territory in decades so if we did it this time around, that certainly would, at least from a lot of the conversations I've had, bring this conflict to a much different level than it is right now, when basically the US to this point is only engaged with Iranian proxies.
Sure, exactly, it would be remarkable, and to his point, it would draw a response. I wonder Hugar Shamali's thoughts on this, the former director for Syria and Lebanon at the National Security Council, founder of Greenwich Media Strategiesguard. It's good to see you, Thanks for coming back to talk to us. What's your thought on this? What should be the response from the administration?
Well, there are three levels of options that the administration could pursue. And by the way, I'd add, when I was at the White House, one of the things that was very common is that the Defense Department lives to do contingency planning, so they have plans for all sorts of scenarios of this kind, and they likely had something in the can. They had options that were laid out
pros and cons of those options. And the thing that the Biden administration has to achieve here is to send a message to put an end to all this aggression coming from these Iran back to militant groups, while not escalating things into a full scale war, and also protecting the rest of our troops and US presence across the region. We have twenty five hundred troops in Iraq, nine hundred in Syria, and we have a number of bases across the Gulf and elsewhere, and that is not including our
US embassies diplomatic personnel. So there's a lot here, a lot of fine line he has to walk. Now in terms of the options, he could go very tough and very tough. I would put that that would include any kind of strike or action within Iran's borders. That would be something like weapons depots, airports, perhaps leadership, the Islamic
Revolutionary Guard Corps, stations, things of this kind. Then you have a second tier, if you will, something like Iranian presence across the region instead of targeting Iran within the borders, meaning sinking its worship in the Red Sea or other vessels in the Gulf, things of that kind. And then at the lowest level, I would put a heightened attacks, perhaps simultaneous attacks against those Iran backed militant groups in Iraq and Syria. But the administration has really already done that.
And by the way, if they only do that, Iran won't care about those kinds of strikes. So it needs to be a level above Yeah.
Well yeah, at the end of the day, Higar, isn't this what Iran will care about, because it's not just about retaliating for the attacks we have already seen. Keeping in mind that sure, this was the first deadly one that occurred in Jordan a few days ago, but we've seen more than one hundred and fifty against the US troops in the region since October seventh. It's also trying to deter make sure that future attacks don't happen at all.
How can you actually deter Iran and its proxies if you don't go after Iran itself.
Well yes, I mean you make a point at the end that's very valid. You have to go after Iran in some way, shape or form, whether it's related to its leadership or to its money, and I mean, these are the things they care about the most, and also its reputation, how it looks, how it looks publicly. They need to see a message that indicates to them that the US is not afraid. These dictators and thugs don't
understand the language of democracies. It's not the same. So we shouldn't in my opinion, we shouldn't be afraid to strike Iran, but we shouldn't be afraid or Iranian targets in the region because that's the only thing they understand in order for them to the United States seriously to know that if they dare respond to that, that the US has no fear in escalating further. And so those
are the kinds of targets that you could see. They could also pursue other announcements like saying that the nuclear deals off the table, for example, but they are going to have to hit Iran. One last point I would say on this is that while Iran may not be behind every single execution of these attacks from these Iran backed groups, these iron backed groups across the region wouldn't exist if it weren't for them. They fund them, arm them,
train them, they give them technical assistance and intelligence. And also on the flip side, Iran has that building to tell them to cut it out. So that's why the message has to be at Iran.
Okay, So how about with all of that said Haigar, how about all of the above. What odds would you put on in all of the above response to make a point from this administration.
If I had to place it, bet, I would say that their response would probably fall somewhere in the second tier. But you know it could listen, it could it could go either way. Second tier meaning and certainly an Iranian target, an Iranian high profile target. There are Iranian leaders of the IRDBC who are based in the Middle East. They have vessels and diplomatic embassies, and they have IRGC offices
and and bases inside the Middle East. Those are not the same as Iran back to middleitant groups across the Middle East. So that's where I would expect an action to take place. And as Secretary of Blincoln has said, we expect this to be long term. And as you said, it'll be tears, that's normal. It's not going to be just tonight or tomorrow, whenever this happens this week. There
will be multiple, multiple steps. And the point the reason the administration's conveying that message is to say it's not just going to be this. There is more to come, and we're going to keep you on your toes wondering what will be the next step.
And of course this is a decision that the President is making or already has made, we're just waiting to see execute it on But can the US really make this kind of call in iolation when a lot of the strikes that has been carrying out against Iranian proxies
have been done in concert with the United Kingdom. Obviously, there's the wider maritime task force in the Red Sea, and the consideration as well of Arab allies like Saudi Arabia, who have been very reluctant to further provoke Iran proxies like the Houthis in particular because of the attacks they have seen from those groups. How does the US need to think about the wider picture here in the other countries at play?
Will I find the Middle Eastern leaders, all of them, including the Saudis, have been very weak, in my opinion, in pushing back on how Iran has messaged their views since October seven, how the Houthis have been behaving. The Houthis in particular, the Saudis themselves waged a nine year brutal war against the Huthis, so for them to say for them to come off as weak as they've been, I find to be quite a disappointment. And listen, they
have their own interests. Of course, they're trying to manage their own public opinion while still while still advancing their national security and economic interests. I can see where they're
coming from. But the US, when it comes to a situation like this, this is an instance of self defense and the way the US views it and the White House views it, and this is by the way, why the US doesn't why the White House won't need congressional approval either, is because not only was this an act of self defense, but whatever the response is is specifically meant to eliminate the threat posed to US presence in
the region. Which is why President Biden can take this decision as commander in chief without consulting Congress, maybe consulting, but not waiting for congressional approval. And also he is not likely to consult other Arab allies because it could leak. And I am sure you've seen the administration has been deliberately very vague on who even conducted the drone attack
in Jordan, which Iran backed group? Where was it? But we don't know if it was Iraq or Syria, and that's by design because they don't want anybody to be on guard. They don't want that militant group to have their missile missile defenses up or anything of that kind.
It's the element of surprise is critical. And so if they consult anybody, it would I would assume it would only be the UK or anything anybody in what's called the Five Eyes, which is the group of five English speaking countries who are who share intelligence.
You talk about the modeling that you would have been doing at the National Security Council in your time working for the Obama administration reguards what extent is proportionality modeled. We keep hearing that, you know, we can't do this forever, responding to every drone attack with a million dollar cruise missile. How do we how do we manage this new age of warfare?
Yeah, I mean, the proportionality is an important one because and it's very important to the United States, the U S. Government. We assess proportionality very carefully and and that comes for any any war. And I believe, by the way, for example, proportionality has to do with deeming how big a threat, how large is the threat, how significant is it to the national security of the United States. It's foreign policy,
it's economy. And when something is deemed a significant threat, then that's what determines whether or not you go after that threat, what the collateral damage might be, and how you go after that threat. And there are threats that sometimes the US doesn't go after because perhaps the collateral damage is too big for a threat that is not actually that significant. Something like this is very significant, right, killing US soldiers, something that results in killing US soldiers
is significant. Now. I've heard some say that there have been one hundred and sixty five attacks since October seven from these are Ron backed groups, and that this was one hundred and sixty fourth and that they just got lucky on their end. And I don't mean to use the term lucky on us. It's actually it's devastating, but on their end. And that might be the case, but regardless, it's a red line. We knew that with this situation and help precarious, it would be that this could be
there's a risk of something like this happening. And so when it comes to proportionality and you have US soldiers who've been killed and you're facing that threat, the proportionality is going to be assessed. There is no threat, they're not going to go after. The only thing that they're going to make sure of is that there isn't a massive, massive civilian death.
Well, speaking of civilian casualties, Hagar, that of course is very much in focus when it comes to the root cause of a lot of this escalation and the way we have seen things intensify in the Middle East, which is the ongoing war between Israel and Hamas, and we
know that happening in Paris in recent days. Conversations still ongoing are talks to try to reach a ceasefire agreement in exchange for the release of hostages that are still being called held in Gaza, stopping hostilities for at least some period of time, especially considering the Huthis say that they are acting in support of Hamas of Iranian proxies.
If we could see an agreement like that, could that help ease not just what's happening between Israel and Humas, but what is happening more whyly in the region.
I'm so glad you asked this question, because I think there's a lot of misunderstanding about the connection between the aggression pursued by these Iran backed Milton groups and what's happening in Israel Gaza. So obviously what happened, what's happening in Israel Gaza, and what's happened since then and since October seven, has resulted in a massive increase in these
attacks that we're seeing from these Iran backed groups. Militants behootis all of them, but their claim that they're doing it to fight for the Palestinian mission or cause, or that they're doing it to protest against the war and to protect Palestinians is a lie. The reason they do this is in part because whenever any time there's instability in the region wherever, whatever it might be, they use
it as an opportunity to create more trouble. And the reason they do that is not only because they're troublemakers and they like to do that, but because it's how they gain legitimacy and variety, and reeling in a big fish like goading the United States into a war for
them is massive. It would allow them to fundraise further, to recruit further, to get more notoriety publicly, to be back on the map, to have a ron look at them like the Darling you know, and so that is why they pursue this type of behavior, and it's why they don't really care about going the United States into a war because they have nothing to lose. They don't it's not about whether or not they'd win, they'd obviously lose.
It's about putting them on the map. And so when you have if you have an agreement in Paris, and by the way, I'm hopeful that they'll get to some kind of agreement, though I don't expect it to result in a permanencyas fire. I would expect these attacks to continue without a strong response from the United States. Like if that response is not strong enough, then I would see these kind of you know, low level attacks continuing. And that's likely because there won't be a permanent ceasefire.
But even if you had a permanent ceasefire, we've seen these attacks for the last few years. It's just been at a lower level. They just always heighten when there's something that goes wrong, when it talks between the US and Iran fall or when things happen in Syria. I mean, they always they.
Go up and down, all right, Hagar Shimali, thank you so much as always for joining us. We always appreciate your insight on these topics. Thank you for your time. And Joe, it's important to hear from the likes of Hagars. I've heard recently in just the last twenty four hours or so, this idea that the Huthis may cool things off if there is indeed a ceasefire with Hamas. But maybe the line is not actually that direct, and these proxies have other incentives here.
That's right.
You wonder about the political incentive here domestically as well. President Biden being criticized by both sides of the island. He needs to flex to show to Hagar's point that the administration is not afraid.
Yeah, a lot of people trying to paint his administration as weak on Iran. So it'll be interesting to see how this moves forward.
Yet, that's for sure. We'll have a lot more ahead on Balance of Power. This is Bloomberg.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on AMO car Play and then Broudoto with the Bloomberg Business app. Listen on demand wherever you get your podcasts. I'll watch us live on YouTube.
As we consider the news today on the campaign trail, Kaylee lines, this is a big one for Nicki Haley.
This is the big meeting with.
The whales, the big donors, yep, who will likely give her a chance to continue campaigning here in the weeks ahead, knowing that money is so important to staying alive. But I'll tell you what, the folks at IPSOS, the polling firm, are already moving on to the general election.
Sounding like a lot of Americans.
Right now, Yeah, just not Nicki Haley. She's talking about the establishment who wants to call this thing done and dusted already. She is not willing to do that. We'll see if these donors, big names well known to our television and radio audiences, Stan Druck and Miller, Kenlyn gone right, all these kind of wall streets, if they continue to keep financially backing her as long as they want, real
reason why she can't stay in the race. But to your point, Joe, it's looking like it may it could be good money going after bad at this point if she can't start winning states, picking up more delegates, and actually pose a real challenge to Trump to secure the nomination.
Reinforces this idea that it's not about winning a bunch of early states. It's about collecting delegates just enough to hang on and maybe be there.
If something should happen to Donald Trump.
But at IPSOS, they're running numbers today on the general election campaign, and you know, we have to talk to Cliff Young when they come out with something that's making news. Here, Public Affairs President at IPSOS US Cliff, it's good to see you. Welcome. The headline says it all here. The twenty twenty four US presidential election outcome is highly uncertain.
It takes a lot to cast out this far. We're told not to pay too much attention to hypothetical national polls, So what do you get in that here?
So basically we're not just looking at polls.
This is a look at a series of models that we use at episodes, both in the United States and around the world. This is our first cut at the election from a forecasting perspective. Obviously things can change, But when we say it's highly uncertain, we're not talking about distance from the election and perl distance how far out it is, because it's always uncertain. What we're really talking about is we have an uncertain economy that will really
define the election for Biden or for Trump. And what we do more specifically is sort of detail those sorts of things that any sort of analyst should be looking at as the election season unfolds.
Well.
On the subject of the economy, you point out how public opinion is typically a lagging indicator on the economy. That's something we talk about a lot here at Bloomberg TV and radio. This idea that the economic data is looking pretty good, inflation's coming down, the labor market is still in there, and yet President Biden has really poor approval numbers on his handling of the economy. When does that lag actually kick in and potentially start helping him more.
Yeah, that's a great question, and I would say that with if it were related to unemployment, we would have a better idea. It's about three to five months. With inflation, we've had so little experience with inflation the United States, we're not quite sure what the lag is. What I would say is the killer quarter. The quarter you should look at is the second quarter. If the numbers have not caught up by then, for Biden from an economic perspective,
he should have problems looking forward. So at ipsis we're really looking at that second second quarter. Our expectation is that things will improve. We don't know how much they will them.
You refer to temporal fuzziness that your models suffer from. I guess like all of us at this point here, Cliff, you mentioned the economy its ability to change, creating a real fluid situation for us as we head into this election cycle, this election year. You also refer to the potential for black swan events, and we certainly saw that in the last election. That would have been something impossible to poll around, and that's what we became what became known as COVID nineteen.
Yeah, exactly, black swan events. We can set those aside because we just don't know right. We'll know it when they're here, but we don't have them at this point, and so let's set them aside. What we're really looking at is the effect of the economy on the main issue today. The main issue is the economy, and Trump by far outpaces Biden on that issue. That's Biden's achilles heel,
the economy. But with an improving economy, our expectation is that we'll have other issues come to the four Immigration, crime, saving democracy. We're not quite sure which ones, and so we'll be tracking them very consistently over time and ipsos. But that's the key issue, or the key analytical point all of us should be looking at.
What is the main issue?
What is that thing that Americans are really worried about because they'll vote on that issue from November.
Well, on the.
Subject of these issues, and you actually have a great chart kind of laying out the different models you are looking at in which ones favor the incumbent president Biden or Trump. And one of them is the idea that if the economy and the inflation is the main problem, that is strong Trump in terms of modeling. Yet, we have been having a lot of conversations in recent weeks and we saw this in New Hampshire and Iowa that perhaps even more so than the economy, it's the border
that is weighing on the minds of voters. Are you seeing that reflected in your pulling? And how would that change perhaps the Leeds Trump versus Leans Biden.
Yeah, so the economy obviously favors Trump. Immigration favors Trump as well. Right now now at this point, immigration is a Republican issue. It's something that mobilizes the Republican base, though Democrats are worried about it, it's a Republican issue. If it becomes the primary issue after the economy, Biden will have problems because Trump dominates that issue.
Boy, what can we expect from IPSOS on this? Now that you've schooled us a bit here.
On the method? How often are you going to update these going through the year.
Yeah, we're not gonna the models will be updating about every two months or so.
We don't want to, you know, overdo it.
But what we will be updating much more consistently are those main issues, the evolution of what people are worried about, because.
In our mind, that will define the election.
Will it be a Biden issue, an issue that favors Biden, will be a tr Trump issue, one that favors him. We don't know still, and so we'll be very closely following those specific questions over time.
And just finally, Cliff, because you are just talking about Biden and Trump, is Nicki Haley not even really a factor you need to be considering anymore?
Well, I would say the following. Trump dominates the Republican base. He is their champion. It's more than you know relative to Nikki Haley. It's it's more than than the majority. That's not to say she doesn't have some chance. I mean, we have to be honest with ourselves. Something could happen, but I think it's highly unlikely that she's able to sort of.
Turn the tide.
I mean, ultimately, if you just look at the polls today, every single national pole on the primaries has Trump in the lead, and most of the polls at the state level. Once again, things can change. It's possible. We should never count anyone out, but I think it's highly unlikely that she'll be the nominique.
All Right, Cliff Young joining us from IPSOS, thank you so much for your time. We always appreciate it. And Joe, of course, Bloomberg will have a poll of our own, the poll of swing states that we've been running consistently for the last few months. The latest comes out tomorrow.
It's also not been good news for Joe Biden, specifically in the states that we'll decide the next election. Kaylee's 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 noontime Eastern at bloomberg dot com.