Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch Just Live weekdays at noon Eastern on Appo, CarPlay.
And then Proud Otto with the Bloomberg Business app.
Listen on demand wherever you get your podcasts, or watch us live on YouTube.
We had a layer of breaking news here, as we found out earlier this hour, Kayley, the sentencing in the bragcase in New York, the Hushbuny trial that brings us back to Stormy Daniels and Michael Cohen and so forth delayed until after the election. Kaylee will have to wait till November twenty sixth.
Yeah, although we will get some more before then. On November twelfth, the judge will rule on his immunity. Remember, he and his legal team have argued in light of the Supreme Court decision from this summer, which found that he does have immunity for official acts that that might need to mean this case when which he was convicted, is thrown out or potentially change the outcome here, because of course these were in part checks that were signed while he was sitting in the Oval office, raises a
lot of questions. So they'll get a decision on that by November twelfth. But again, November twelfth, all the votes will be in.
That's correct.
At that point nothing has happened prior to the election, but the.
Votes will have been cast.
I remember that whole argument about official business versus unofficial business. This is actually what this is all coming down to here now, So another date.
To circle on your calendar here.
Knowing as well that the election interference case brought by Jack Smith we learned just yesterday, we'll also have to wait now officially until after the election.
Kyle, Yes, although we will get some things in that case before then, briefs that are filed from the Special Council that could honor evidence that the American electorate has not heard about at this time.
June Grosso is with us now. It's amazing how the redhead hits the terminal. June Grosso pops.
Up in the studio.
Yeah, Bloomberg Law, Yes, indeed, another one June. Look, we saw this coming here. A couple of important court dates for Donald Trump. November twenty six means what for this case.
So we're talking about the election interference case right now because we have a couple.
Of we're away for sentencing. Okay, I know, okay, let's start in New York where you are with the.
Brag case, all right, because there are three things going on today. So in New York with the bradcase, the judge it's basically, you know, we don't want to show an appearance of impropriety. We don't want to have people looking at this and saying that we are decision on
sentencing had anything to do with the presidential election. And also, you know, sentencings get put off all the time, and the DA in this case, Alvin Bragg did not oppose putting off the sentencing, so there really was no counter to this. And the judge also said, you know, a lot's going on in this case. It's a very important date and a very important thing to sentence someone, and
I don't want any other distractions during that. So, I mean, he had a lot of different considerations and you know, what's what's the point from a judicial point of view of sentencing Trump before the election, There really is no rush.
Well yes, but does it not change the potential outcome if he is say not just former president Donald Trump, but president elect Donald Trump. When the sentencing happened, isn't that likely to influence a decision on say, actual prison time.
Well, I don't think that the judge would admit that, and I don't think that this judge would consider that he is pretty much, you know, by the book judge, he's straightened, on the straight and narrow. I don't think he would let that influence his decision, but you know, I don't. I also don't think that there's any way that Donald Trump is going to be sentenced to prison in this hush money case. If anything, it might be a suspended sentence or you know, something where he wears
an ankle monitor. But I just highly doubt that the judge would send him to prison in any case.
Got the Egen Carroll case as well with the former president and voluntarily back in the courtroom today for oral arguments. They're trying to appeal this five million dollar verdict June. What should our listeners and viewers know.
So it was a very short hearing ten minutes for each side, not unusual in an appellate hearing, and they kept them.
To that ten minutes.
The basis for Trump's appeal is some of the evidence that was submitted. There were two women who were allowed to testify about prior instances in which they alleged Donald Trump sexually assaulted them, and also the admission of the Access Hollywood tape. Now, at one point, one of the judges on the panel set to Trump's attorney, you know, it really is difficult to overturn a trial judge's decision on evidence. I don't know if that will have anything
to do with this. But also the judges noticed that this is sort of there are some novel issues here, and not just because Trump was president or anything like that, but because of the New York law that is allowed these kinds of cases to go forward after so many years, the sexual assault cases, So there are some novel issues that the court may want to consider. And as far as what Egene Carroll's attorney said, she said that the Excess Hollywood tape was like a confession by Donald Trump,
so it should be allowed to be played. And also that you know, the testimony of the women was well within the bounds of what the trial judge could do. And as the court said, it's very difficult to get a judge's trial judge's decision about evidentiary matters reversed on appeal. So it's an uphill battle to begin with.
Wow. So that's two of the cases. Then, of course there's the third that we got developments in yesterday, where Judge Chudkin essentially said it's an exercise and futility to try to schedule a trial before the election. So three strikes.
Big win though before and went for the Special Council there though, because then she decided that she's gone allow him to as you refer to in the intro, she's going to allow him to put in this brief that will support his idea or his superseding indictment. And he has said, or someone from his office has said that there might be new evidence in there, including grand jury transcripts and transcripts of FBI interviews with witnesses. So we're
going to hear that. And that was a win for the Special Council because Trump's attorneys wanted to file a motion of their own first.
All right, Gene Grosso, host of Bloomberg Law, breaking down all of these various cases for us, Thank you so much. And of course they do have political implications because the man we are talking about is running for president of the United States and doing so against of all people a former prosecutor who has definitely tried to make that
contrast clear on the campaign trail. So let's play it now to our political panel Genie Shanzano, Senior Democracy Fellow at the center of the study of the Presidency and Congress, alongside Rick Davis, Stone Court, Capital Park and or both of them Bloomberg Politics contributors. So we will see if you use the words of the Harris campaign or others, Rick the prosecutor and the felon sharing a stage on
Tuesday night in the debate. He may not be seeing more trials before the election, but he is he actually going to be able to avoid questions on this from moderators or from Kamala Harris herself.
Yeah, I was actually surprised that the moderators in the first debate with Joe Biden really didn't focus much on his legal problems. And so I think it's an open question as to whether or not in this instance, especially because these cases are now in various ways being moved to post election, whether the moderators will think that that's germane.
I would say, I think all of this is having some kind of condition effect on Donald Trump, because when I was reading for instance, the fundraising information out of
the Harris campaign this morning. You know, she's getting a pretty good share of Republican women first time donors to a Democrat, and I think there's enough evidence, you know, whether it's motivated by things like the impression women get from these cases, or whether or not it's related to, you know, the Dobbs decision and the overturning of Brovy Way and all the anxiety that's existed in these states over the initiatives that have been going on, or whether
you're running against the first woman potentially president.
Of the United States.
I think that Republicans have a serious problem, not just with the traditional gender gap that's always existed, but the confluence of all these things in this election cycle right now is an overwhelming weight on Republicans right now.
Geeni, I wonder your thought on what we might hear later this month. As June was just reminding us here and Kayley mentions in Judge Chutkins case, Jack Smith is going to be able to make a filing in late September that could bring new evidence in this trial that could potentially, just by its own nature, change the way some people look at the Trump candidacy. Is that going to be our October surprise?
Yeah, it very well could be. I don't think we know yet, although I would just caution that people have been well versed and they are very familiar with the cases or the fact that Donald Trump is facing these cases. And let's not forget after every indictment, even after he was convicted, his fundraising and his support went up. Now, maybe this October surprise, if we get one, would change that. But I wouldn't bet on it if I was Democrats, if I was a Democrat. What I think is important
to underscore is amiss all of this. Donald Trump spent almost an hour today literally attacking a woman that he was found guilty of sexually assaulting, and then he was found guilty of defaate aiming her, and almost an hour of a screed on that. So when we want to talk about why women of all stripes, conservative and liberal are tending to look again at Kamala Harris, look at
who this man is. People know this, So you combine that with abortion and everything else, and that gives women another look at who this person is.
Yeah, we should note for TV and radio audience that it was technically a civil case, So he was found liable for these things, but wasn't actually convicted of any crime. It wasn't a criminal case. But to this point, on this being a number of Trump legal pieces of news we've gotten today, we actually started our day not talking
about that, but talking about a softer jobs report. Even though the unemployment rate did take back down to four point two percent, it is looking like an economy that wasn't as strong over the last several months as maybe previously thought. Genie, does that need to recharacterize how Kamala Harris frames the economy she and Joe Biden have created during this administration when she speaks to the nation from that podium on Tuesday.
You know, I don't think she'll need to reframe it. I think we've heard in the last few days where she is going to take things. She's going to try to differentiate herself from Joe Biden on certain aspects. But we have to be very clear that the unemployment rate has been low during Joe Biden's presidency, historically low by some measures, and the number of jobs created historically high, far and above what Donald Trump did his first three years,
and certainly that last month. Even though a lot of that had to do with COVID, which he Democrats would tell you mismanaged. So, you know, this remains an issue for Kamala Harris on the economy. I don't think we'll see a change from what she's been saying the last few days. She's going to try to ride down the middle and differentiate herself a bit from Joe Biden in certain aspects.
Well, Rick, the market stories that are going to come out of this week are going to be tough, loaded with superlatives. The worst week for the S and P five hundred since when that could bleed into next week. I wonder the extent to which you see the market action here Wall Street hanging over Kamala Harris as a member of the current administration.
Well, you know, it's not had much effect on either booing Donald Trump's numbers. When he takes credit for when the market goes up, he says, ah, they must have realized that I'm going to be president and vice versa. He'll blame, you know, Kamala Harris for a downturning economy. But we don't really see any impact in the numbers. I mean, it's it's been a relatively tumultuous both positive and negative summer in the markets, and you really don't see that kind of slide affecting the data. And so
I'm going to side here with the empirical data. We have a really stable race. We know that people are focused on the economy, and we know that there's a hangover with the Biden administration related to that, and we know that there's an upli for Trump on managing the economy. So I think the onus is on Harris in this debate on Tuesday night that we'll be broadcasting on that.
She's got to make the mark on the economy. I think the real pressure is on her to bust through the ceiling that she's got on whether or not she can manage the economy better than Donald Trump.
Eight pm Eastern Time, Tuesday.
We'll meet you here. Rick and Janie are going to be with us. Of course, I'll be here with Kaylee and we're going to walk you through this debate together with clutch analysis from our signature panel. We're looking forward to it. It may be the only debate that is currently the only scheduled debate between Donald Trump and Kamala Harris. That's Rick Davis and gd Shanzay No our signature panel Bloomberg Politics contributors, with a lot more on the way, Kaylee.
We're going to Head of the White House coming up next to continue this conversation about politics and the economy.
Yep, Heather Bouchet will be joining us on this Job's Friday, so stick with us. There's more ahead on Bloomberg TV and radio.
You're listening to the Bloomberg Balance of Power podcast Ken Just Live weekdays at noon Eastern on Applecarplay and then royd Outo 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 Kaylie Lyons alongside Joe Matthew here in Washington, where it's not just market reaction to the data that matters,
but political reaction as well. As we are now in the home stretch of an election, and of course the incumbent Vice president is running against former president, getting ready to join him on a debate stage on Tuesday and try to defend the economy under the administration she's been serving in for three and a half years and based on today's jobs data, it's an economy that's a little bit softer than previously thought.
Well, the market sure doesn't like that idea. And of course it's not just going to be defending the state of the economy, Kaylee. They'll be projecting into what they see as their own economies if they're elected. And we've got some dribs and drafts who spent the week talking about it, some ideas on tax proposals, some ideas on inspiring growth, but not a complete picture. And there are a lot of questions about to what extent they'll finish
painting those pictures. On Tuesday, Style over substance is the headline on our story. So maybe not so much, but when it comes to substance when we talk about the economy, there's one voice that you know well here on Bloomberg, and it's always a pleasure to bring in. Heather Bouchet of the White House Council of Economic Advisors. She joins us from the north lawn of the White House. Good to see you after Chicago, Heather, Thanks for joining here today.
We've been obsessing over the data all day as you have, and we see the reaction on Wall Street. There is a concern that things are slowing down more quickly than some may have thought over the course of the summer.
Are they wrong?
Well, listen, you know, we got a report today that shows that the economy continues to move forward. We continue to add jobs at a healthy pace, and importantly, we continue to see a healthy pace of wage gains for workers across the economy, including faster wage gains for the eighty percent of workers who are production in non supervisory employees. So you know, we have another a few other bright spots from today's reports again, yet another historic rise in
the labor force participation rate of prime age women. Labor force participation still looking quite strong, quite robust. So there's a lot of indications that this is an economy that has really reached its cruising speed. That you know, we are moving forward, continuing a pace, and a job market that continues to perform well.
If it's reached cruising speed, it does raise the question of whether or not the current rate of policy is what is appropriate. I won't ask you to weigh in on the actual decision the Fed will make in a few weeks time, Heather, from your position at the White House, I just wonder if we see a sudden easing in policy, if you worry, that may actually send a signal that the economy is in a more dire strait than you think it is, especially with an election just around the corner.
Well, you know, again will not comment on FED policy, but we all watch all of these different kinds of data so closely, and I think, you know, one of the things that we continue to see is that the economy does continue to move forward at a healthy pace. We have good data on you know, GDP growth and output.
We can continue to see strong consumer spending. We have seen, of course inflation come back down, and then alongside this we have this ongoing, steady pace of job gains in the economy that continue to be associated with a healthy pace of wage gains. So when you put all of the data together, you really do have an economy that is you know, I'm just going to keep saying it. We hit our cruising speed and you know, are moving along at a healthy pace.
I want to ask you about the revisions, Heather, and how we should read into this eighty six thousand downward revision for June and July. Adding to the idea that things might be softer than the headlines suggests. Should we anticipate a revision for August? And how much of this has to do with funding at BLS to get the numbers right?
Well, you know, revisions are a part of the process. You know, they get their data in and they revise it as they get more real time data in from firms so that it's more accurate over time, and that is an important part. It does require that they have the resources to do the job that they need to do. Data quality, we've seen over the course of this economic recovery how imperative it is that we have access to
good quality data. Listen though, you know, again we saw job gains of one hundred and forty two thousand per month last month. In August, we've seen, you know, a steady pace even with revisions of one hundred and sixteen thousand per month over the past three months. We believe that that is about what we need to keep pace with the increase in the labor supply. So even with revisions, this does look like a healthy job market. And we continue to learn, you know, as the months go on, what the data.
Tell us well, and of course the job market isn't monolithic. There are many different components of it that you could look at how they're specific. What's caught our attention in recent months is manufacturing. We're a sector in which we're seeing a bit more weakness. What exactly is happening with the employment picture you see in the manufacturing sector.
Well, certainly you have seen that flatlined and you did lose some jobs last month.
You know.
One of the things that we have been focusing on in the Investment in America agenda is how the President's agenda is revitalizing parts of American manufacturing through the construction at this point of new manufacturing facilities, which we're seeing all across the country. And so we've been actually watching very carefully the increase in construction employment that you've seen, and you actually saw a big uptick in that last month.
You know, we believe that, you know, as you build those facilities, those workers will come into these new sectors that we are building out. But you know, for now, we are seeing this flattening in the employment and manufacturing.
There's been a lot of talk about US deal this week. Heather.
I don't know if this is something that you helped to advise the president on, but now you've got Joe Biden, along with the two presidential candidates, opposing this acquisition by Japan's upon Steel. It was reporting this week the President Biden was preparing imminently to formally block that deal.
Is that about to happen?
That is not something I can speak to today.
Well, I don't know if you're allowed to talk about this proposal at all, But there have been questions about whether if this deal wins support, for instance, from the United steel Workers Union, if that might change the look of this arrangement. Do you have a thought on that.
Well, listen to zoom out to the big picture here. The President has been focused and the vice president from day one on making sure that we have the economic sectors in our economy, across our economy that are vital to our national and economic security. The President's been focused on making sure that we're making those investments, that we're making sure to create good jobs as we do so, and I think that he is taking on these decisions in light of those overarching goals.
Well, of course, he has a few months to still make those decisions before a potential new administration would take over. Heather, have there been conversations within the Council of Economic Advisors as to what kind of economy in January you expect the next president will inherit and to what extent is that dependent on some kind of monetary policy change having
kicked in. I won't ask you to give me a number on the number of basis points you think the rate FED funds rate might be lower, but what will that have done over the course of the next several months by January.
Well, here's here's what I think, right. You know, as we've all talked on our team about where the economy is, you know, the consensus really is that this is an economy that just keeps it is kept on moving forward, and so it you know, obviously things can happen, they can move us off track, but on the path we are on, you know, we are on target to deliver an economy for the incoming administration that is strong where then the fundamentals are strong and when we continue to
see low unemployment and strong wage growth, so you know, and that is on top of the other indicators that we've seen with you know, prices coming back down, with you know, growth overall, and consumption remaining a good level. So I think that you know, we have achieved this strong, robust recovery that the President's set out to do when he came into office.
All right, Heather Bruschet of the White House Council of Economic Advisors joining us from the White House North Lawn this afternoon. Thank you so much, Heather. Enjoy the weekend. Always great to have you here. On Bloomberg TV and radio.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on Apocarplay.
And then Proud Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Again.
In the hush money case, his sentencing has been delayed until after the election. It will now take place on November twenty sixth, not September eighteenth. Donald Trump, of course, had argued that a sentencing prior to the election was election interference, Joe, and that will no longer be happening according to the ruling today of Judge Marshawn.
That's right.
We're going to go into this election with decisions based on policy, not legal action, clearly in this case, Kaylee. But we also have to allow for the idea that these trials could take place next year if Donald Trump doesn't win the election.
Yeah, it's a fair point, but of course a lot of votes still have to be cast that will determine. That's another world right that of course, if he wins the election, he has a number of policy proposals he would like to see enacted in a second term in the Oval office. And that's what we want to discuss now with Joe Lavornia. He is america First Policy Institute Senior Fellow, and of course served in the first Trump administration. Joe, welcome to Bloomberg TV and Radio. It's great to have you.
We do want to talk about some of the tax policy proposals specifically, But I do have to ask you, just given the news that we've gotten here, do you actually think Donald Trump's various legal battles considering he also held a press conference earlier today on the civil Egene Carol case, is this factoring into the vote at all? Do voters care about these things anymore?
I'm going to stick completely with the economics, which is what I do, so I'm not going.
To answer that.
Okay, So if it's the economics talk.
About, I want to talk about the economy and policy, and all right, let's do it.
Delvoe.
I'm looking forward. I am looking forward to this conversation. So let's just start with what we heard from Donald Trump yesterday. He'd like to cut the corporate tax rate to fifteen percent for companies that make products in the US. He wants to make his twenty seventeen tax cuts permanent. We know about the no tax on tip policy. We can get to different areas of revenue generation that you
think might offset that first. But if we could just tally up the toll that will take in revenue lost, what figure does that put you at?
Well, we have broad contours of what policy looks like, but we can't score anything. What I can say is the CBO scores the job tax, the Job Cuts and Tax Act of twenty seventeen as a losing revenue, which I don't believe.
I don't believe that's the case.
I don't believe the CBO is doing enough dynamic scoring. If we look at their estimates back in twenty sixteen, and what they assumed TIKJA is a sort of known on the hill, what that would produce in revenues, their revenue estimates were well short of what actually turned out to be the case, especially on the corporate sidere revenues are actually quite strong, so we need to Eventually we'll get more details and we'll see how things play out.
But I'd be careful on scoring this because right now we're not that detailed yet.
Well understood on scoring.
Voters are trying to make decisions based on the limited information they have here, and a lot of the analysis that we're hearing is that while Donald Trump seems to be considered more friendly to Wall Street, his idea to make permanent the tax cuts and add the tariffs would have a more inflationary impact than what Kamala Harris, the Democrat, is proposing in this case.
Is that wrong?
I don't know.
The thing is the problem is is that everybody looks at these different proposals in isolation. You have to look at lower corporate tax rates, less regulation, permanency of tax cuts, much cheaper energy costs, an intention to reshore and reindustrialize, all as a comprehensive package. You can't just look at one in isolation and say this is inflationary and this isn't.
What I could tell you is on the energy side, in terms of lifting energy production to be a real commitment to expand energy production and get energy costs significantly lower. If we want to do a simple inflation adjustment, I could tell you that the energy share of the economy is almost twice the import share of the economy. So again, if you get those lower energy costs, you would offset
any teriff impact. And by the way, as the President said yesterday, you know these things are open for negotiation.
That's why the specificity at this point I think is premature.
It's a transactional approach basically to help us manufacturing in jobs. And you either may believe that theory, you may not, but I think it's very It all holds together when you look at it in its totality and not just break apart simple pieces.
So if we want to focus on energy here specifically, if there were a blanket tariffs on all imports into the United States, that too would impact energy right and could result in higher energy costs. I'm sure you're going to say that Donald Trump wants America to produce more to be energy independent, but we're already pumping a record amount of oil and gas. Because these are companies that like to exercise capital discipline and our returning a lot to shareholders. Is that what you think is I.
Just want to change one thing you said.
The thing is we have increased production, but you have to keep in mind that to get to keep low and stable energy costs in place, you have to have long term capital investment. So the intention is to do things that will improve the energy platform in a way that it's sustainably producing cheap, low cost energy we had under the Trump administration. If you look at where energy costs war and if you look at where inflation was.
So I think the plan is very comprehensive and it makes sense when it's looked at in totality.
We're looking at WTI crude oil below sixty eight dollars a barrel in the future's market here, Joe, where should that be?
I mean the market is pretty efficient.
I mean I think part of the reason the oil markets and energy markets are soft right now is growth.
I'm very downbeat on growth.
Yes, I was listening to Michael McKee talk about the data. I looked at the data today's being very soft. If we look at the private sector, excluding healthcare, because healthcare is very interconnected, intertwined with government policy. The last three months, we have even generated forty thousand private sector jobs. The unemployment rate did tick down point zero three in August, but temporary hiring fell again.
Manufacturing was weak.
One of the areas of strength was in construction, but it seems to me that's ripe for a major pullback, and of the big drop in construction openings and the fact that construction activity is extraordinarily softly. You look at home sales, or look at pending home sales, or starts permits, builder sentiment, all those things suggest to us that the construction industry could shed up or is it a million.
Workers, which by itself would push the unappoint rate up near five percent?
Well, that certainly would be something four point two percent is where we sat as of today's figures. As you talk about construction and housing specifically, of course, we know a lot of that has to do with just where interest rates are in federal reserve policy. Donald Trump has suggested, including in an interview on Bloomberg Business Week, and he's doubled down on it a few times now, that he does think the FED should have input when it comes
to monetary policy. What would that look like if the US Central Bank wasn't fully independent of politics.
Well, the FED is an independent institution, but that doesn't mean the FED it is immune or should be immune from people criticizing it both construct you know, on a constructive basis. We know that in twenty eighteen, and I argued this when I had nothing to do with the administration, that policy was too tight, and the President agreed, and the FED wound up cutting because the FED was too tight.
One of the reasons why monetary policy is tight is because inflation has been high and the FED has reacted to that by keeping rates elevated. I think rates will come down, Rates need to come down, but that's because I believe the economy is fundamentally soft. We've had basically every month, almost every month in the last three years, we've had the index libaiting indicators negative. This week we saw industrial production in the ISM at its lowest level
since pre COVID. So, yes, signals are mixed, but unfortunately, you know, they get mixed at turning points. And the revisions in the data are very important because revisions in the data often tell us about the underlying momentum in the economy. And the revisions we had that we learned about a few weeks ago the eight hundred thousand plus. My analysis suggests it'll be closer to a million. But importantly,
these current revisions do not pick that up. So we could eat learn a year or so from now that if we're not in recession, we're very close to one and that ultimately will bring rates down, which is a good thing. But I think the comment on policy being restrictive, I think I don't have a problem with that.
Yeah, we could learn that this was a very different summer than we thought when it comes to the job market. Here, Jose, a lot of people say, fifty basis points, let's get to it.
The Fed's late. But you also know as well as I.
Do, that we're going to hear a loud cry of that day that a cut of that magnitude at this time is politically motivated.
What will you say?
Look, I could be critical to FED, and I do it in a constructive way, and I think the President has as well. What I could tell you is the j Powell did market easing back in December and then went on sixty minutes somewhat similar to Ben Bernanke and talked about the need eventually.
To lower rates from a restrictive level.
I was a little bit surprised that the pivot in June, when the FED had three cuts, they went to one, and then by July they were talking about maybe cutting. At that meeting, at least several members were. But I think they've laid the groundwork for ray cuts. I do think the economy soft. I'm not sure whether if fifty or twenty five is going to make a huge difference
in terms of the longer term outlook. And I don't think it really necessarily plays into the politics, because, as you yourself have suggested, economists are debating whether it's twenty five or fifty. So I don't see this really as being a political a political decision, all right, Well.
That's fair enough, and as we've said, the FED has made it very clear prefers to make these decisions independent of politics. As we consider, though, the idea that monetary policy does have a lagged effect on the way it tightens and on the way it eases, regardless of whether or not Donald Trump or Kamala Harris wins, what kind of economy do you expect they will inherit in January based on how much policy has eased and to what extent that has actually influenced economic outcomes.
That's an excellent question because it's not clear we're in recession, and we may avoid recession if the Fed starts cutting and equity markets can get excited about the future. I'll leave it to the margus to decide what it thinks
is going to be better for policy. Clearly, I'm familiar with the President's economic policies and think from a supply side capital formation, productivity, enhancing household income and wage boosting phenomenon that his policies will work much better than the alternative. But to be honest, I don't know what vice President's economic policies are at this point.
We've got a little bits and pieces. She'll have to describe it.
But the economy will be influenced by what happens in November, and we'll see what happens. I do think any short term things are soft. I hope we avoid recession, but we'll see.
Yeah.
As we spend time with Joe Lavornia here on Bloomberg TV and Radio, I just want to get back to this question about tariffs and energy, where we spent a little bit of time Joe. There was reporting in Politico this week that the idea of imposing terrorists up to twenty percent on all imported goods would have a direct impact on gasoline exports. The eight million barrels of crude oil that the US imports could be impacted and cause
ripple effects throughout the energy space. How do you balance that with drill, baby drill and an effort to lower prices.
Well, I mean, look, you have to remember it's they're going to be carve outs and all I could again the tariffs are used as a means to reON shore and as a means.
Donald Trump proposed that carve out. That's some important news of that.
Well, no, I'm saying that when I say that in terms of there are transactions involved. In other words, there's certain countries that the President I think has a certain view that maybe not contribute as much to NATO, or maybe aren't having what might be a level playing field or fair trade. So I think it kind of depends
on what happens as things evolve. There's nothing that's predetermined, and the President yesterday was very clear and not giving specific numbers as it related to specific regions and specific policies. It's just an overall narrative, and we kind of know where the direction of things are going, which is terrorifts will be used to improve US bargaining position as it relates to key industries and things of that sort.
Are you hoping, Joe, that you'll have a role in the shaping of that policy if Trump wins a second term.
Thank you for asking. I'm very happy. I actually have a Wall Street day job, and we'll see what happens. But I very much like what I do, and if I get the call to serve, obviously be honored. But right now, focused on the markets, which you know are very, very tricky and interesting. We're trying to figure out twenty five or fifty.
All right, stay in touch with us on that, Joeliforne, great to have you back, Joe, America.
First Policy Institute Senior fellow.
That's a deep dive with Michael McKee and Joelifornia with our eyes on the markets, of course, on a big day for economic data against the backdrop of these economic proposals from the two candidates.
You're listening to the Bloomberg Balance of Power podcast kens Just Live weekdays at noon Eastern on Applecarplay and then royin Oo with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa playing Bloomberg eleven thirty.
Now I'm starting to lose my ability to tell what is good news and bad news around here. Thankfully, that's not my job. It is the job of Ed Mills, who I'm happy to say is with us at the table today in Washington. Managing director Raymond James Ed, it's good to see you here in the studio. Thanks for coming in. I'm going to ask you a little bit about some of the candidate's plans that we've heard this week.
But I'd love your take on this Job's report this morning, because it does seem like one of these sets of data where you can find whatever it is you're looking for. I thought the whole point, though, was for the FED to start slowing the job market so it could start cutting rates.
Isn't this going as planned?
Arguably yes, And arguably it's pretty amazing because when you look back at previous presidential administrations. Yeah, it's a kind of almost taboo in DC to ever celebrate the economy too much because what goes up goes down, and for the Biden administration. This is still an administration that has had record job growth during his term. We're kind of north of fifteen million jobs created since he's come into office.
And so you would say, all right, someone in that position as his vice president is running, shouldn't that be an asset? But and things in life is always compared to what and so where the direction is, where the momentum is. Any sign of weakness, Trump is going to seize on that and try to weigh down and tie it to inflation. In some of the other parts of where voters think that the country is on the wrong track.
Political season, It was just a couple of weeks ago that Jay Powell said the job market was in balance?
Is it not well?
I mean, when we look at the unemployment rate, when we look at the job creation over the last four years after coming out of the pandemic, there's a really lot of positive things to say. Wage growth added into that. I don't think if you were to kind of zoom out and ask someone when you have a unemployment rate in the fours and job creation that has been steady,
people would say that's largely imbalanced. I don't think there would be a view that there is a crisis, but it's kind of a concern of directionally, is the other shoe about to drop? And is that the reason why the Fed has to move here in September? And how aggressively should they move? Clearly the debate that we get here at Raymonds.
Ye are you at fifty now? As we're split on.
This, Yeah, I mean I think it makes more sense to kind of take the over between twenty five or fifty basis points. The reason not to is I do think that the Fed is concerned about stimulating the economy too much, having a second wave of inflation. You've seen them take every rate hike that they could get to have the dry powder. So if I would caution to not go too far too fast, If they do fifty now, that could be slower cuts later this year.
Understands to understand what the impact of the election.
Is to get to the same spot eventually, just a question of where and how these cuts fall ed.
Mills.
You've been watching, like we have the candidates roll out economic plans. They're leaving a lot of holes in these plans that roll out.
It's doing a lot of work.
It might yeah, okay, fine, so we've got a couple headlines.
That's what we have.
And Donald Trump had a big one yesterday on the corporate tax rate. Let's listen to what he said before the Economic Club of New York.
To further support the revival of American manufacturing, my plan calls for expanded R and D tax credits, one hundred percent bonus deppreciation expensing for new manufacturing investments, and a reduction in the corporate tax rate from twenty one percent to fifteen percent, solely for companies that make their product in America.
All right there, it is so fifteen percent, we've heard that before. Unclear he can get that through Congress. Kamala Harris looking for a higher number in this case, but she put forth a smaller than expected number on capital gains taxes for the highest earners. You throw all this stuff up in the air, Ed Mills, Wall Street thinks it has a sense. It's trying to react to this stuff. Do you have enough of a picture to make a ruling?
So I think what we've said is that who wins the presidency will dictate this debate, and if there is a Trump presidency, most if not all, of the tax cuts will get extended. If Harris Wins. I think there is a strong kind of argument to be made where most, if not all, of the individual tax cuts reset and what gets paid for could be something that comes later on as it relates to the R and D tax
credit bonus appreciation where you let off in those clips. Yes, those were all parts of the twenty seventeen tax cuts. Donald Trump gets credit for those those have expired. There's bipartisan support to get those extended. Those will be extended.
I think the caveat on that fifteen percent, if it is made in the United States, is because the fact that when we look at the price tag of extending out these tax cuts just on the individual, it's four point six trillion, So doing a one percent cut is about one hundred and thirty to one hundred and fifty billion dollars. So you're not going to get down to fifteen percent across the board. But what he is trying to do, and what he always does, is move the goalposts.
So preserving what's there becomes the compromise versus being what is battled over. It's just I think a negotiating tactic from his perspective.
Okay, so that's a starting point here. Yeah, I guess, how about you paying for all this stuff? On either side here there have been you know, I guess talking points right.
Trump says we'll grow out of it.
Drill baby, drill will lower energy prices to get there, essentially in stoke growth that will absorb the.
Extra spending and tariffs.
Yes, and you can find a lot of economists who have big questions about that. Kamala Harris has her own approach here, this price gouging thing that has a lot of people very upset. Also, housing initiatives. Wall Street's done pretty well under the Biden administration. But the markets seem to have a bias here. And maybe you see it differently that Donald Trump in fact will be friendlier to investors.
Do you see it that way?
I think it's much more nuanced than that.
And my job at Raymond James has to been to say, all right, here are the Trump policies that could be good for the market, here are the ones that are negative, and here's for Harris that are good and negative. I do think that the market generally likes split government. And what I hear a lot at Raymond James's concerns about is there a second wave of inflation. If Trump is reelected under his tariff, trade and immigration.
Policies, well that's a big question there, and that would not be very friendly to Wall Street. So you're kind of cherry picking. Then what do you want to.
Hear Tuesday and analyzing? Not cherry picking?
I mean that's not fair, but you're looking at different elements that might benefit the markets from both campaigns. Can you crystallize that more after this debate Tuesday night.
That is my hope, and that is my goal. I mean, I do think that what the market will be most focused on are the twin fiscal cliffs of the debt limit and the extension of the tax cuts at the
end of the year next year. One thing that we've highlighted that we think happens regardless, and I think that's been a fun part of this, is that we think that there's energy permitting reform regardless of who wins, that's going to help and supercharge the Inflation Reduction Act, that should help capex, that will help construction, that will help jobs.
And so if either of them win, we'll all focus on some of those positive aspects of the agenda and give a reason why the market should go up usually the year after a presidential election. For the S and P five hundred, it's a pretty robust and positive outcome for the market. Great once we get that uncertainty out of the way.
I've been looking forward to this conversation. Can we stay in touch between now and the election? Because I want to know where your head is. This is important stuff in a conversation you'll only hear on Bloomberg.
You're listening to the Bloomberg Balance of Power podcast Can't Just Live weekdays at noon Eastern on Epocarplay.
And then Proudoro with the Bloomberg Business app.
Listen on demand wherever you get your podcasts, watch us live on YouTube.
This all being factored, of course, into the conversation that's going to be had in Philadelphia next Tuesday. The economy will loom large over the presidential debate. Donald Trump Kamala Harris might be the only one we get. ABC News will bring it to you live here in special coverage on Tuesday night, and a great story on our terminal right now about prep once again, the two candidates are taken two very different roads to Philadelphia literally and metaphysically.
Kamala Harris is hunker down at Pittsburgh right now. It's going to spend the whole weekend there, and they're actually doing mock debates, as we've told you, with Philip Rains dressed up in a big suit, red tie playing Donald Trump. He did this with Hillary Clinton, as I read in this great story by Bloomberg. Though Trump team sees it awfully different. JDV says, we're not going to have some formal debate prep session. He likes to sit down workshop
one liners. He considers moments like yesterday that we showed you at the Economic Club of New York to be prep And so they're coming from two very different areas here and a lot of questions about what will happen when they come together. Look who's back to talk to us about it, Wendy Benjaminson, back in the nation's capital, of course, reporting for Bloomberg, our senior Washington editor. Nice to see you back just in time for the big throw down here. We talked around the first debate when
it was Joe Biden. How different is this one going to Because the rules, it turns out.
Wendy, are the same. The mics will be mute at all the same stuff. I guess we'll have a press pool in the room.
But Donald Trump needs to calibrate or modify his approach in what way at all?
Well, not too much, actually, because the strategy within Trump world is for him to let Kamala Harris speak. He wants her to go into her long winded answers that we saw on the CNN debate, remember, and she can kind of meander down a wandering path to the point of her sentences. It's just one of her personality ticks,
and she can do that. Trump wants viewers to hear her say that we noticed in the first debate that Trump, at least compared to the awful performance President Biden put in, he was able to because he was being disciplined by the muted mics. He was the one who was able to keep his answers short and to the point and relatively on topic.
So her her.
Goal in this debate is to knock him off a little bit. I think she'll try to fact check him, use her time to fact check, use her time to argue with him, and to kind of probably tick him off a little bit. That would be my strategy. She wanted that bad. She really really can't do that, and they could spa a little bit. The one thing I don't think we're going to see in this debate is a is the two of them walking out over things like the differences between their tariffs on tips, I mean
their taxes on touch income policies. I think they're going to go for Kamala Harris wants to you know, introduce herself more to people. She wants to talk about her biography. She wants to make him look bad, and his goal is the same. But I think, you know, and he's an experienced showman, so I think he's going to you know, really you know, hit all of his grade one liners that he's been working on all the Wait.
Well, I guess, so we're going to find out. It's curious though the headline on the story is style over substance.
These are two candidates.
Who have left voters hungry for details. Sounds like they're not going to get any.
They may not.
I mean, the questions should elicit some factual answers, but I don't think they're going to spend a lot of time.
It's a personality contest.
This one might be a personality contest, but we'll see. Maybe they will get into it.
Knowing there's a good chance this will be the only debate we get between.
These things exactly.
I mean, depending on.
How this goes, I suspect will determine whether there's a second debate, right.
I mean this they just want to keep their base and attract a few new voters, and maybe getting into the weeds on policies might not be the way to do that.
Interesting, this is a nine o'clock throw down. She doesn't have the whole eight o'clock issue that Joe Biden have.
What issues does she have?
Though?
Is it train of thought? As you said, the meandering answers? Because Donald Trump was called out for that frequently as well. He was talking about wind the other day and he went right into bacon and then there wasn't Sometimes these are sometimes they're both hard to follow, right.
Oh, absolutely, And Trump is famous for winding down into sharks and batteries and things like that that we don't know. She is actually a very good debater, and remember she is a prosecutor exactly. She nailed him in twenty nineteen on his nineteen seventies vote on buzzing to end segregations. She hit Telsey Gabbard pretty hard in debates with in
that year. And if you remember the Brett cav and All Supreme Court confirmation hearings, when she wants to drill down and nail someone, she is quite capable of deerating a hearing.
That's right.
Sure, we'll see if she can duplicate that.
And he can only hurt himself with the one liners. If he calls her nasty or questions her race and ethnicity, that could go bad.
Oh, we're doing this, Wendy. Thank you.
It's great to have you back. Wendy Benjaminson. See she's still with us Washington, senior editor here at Bloomberg and the force behind our Bloomberg Swing State Pole.
You know who else is here. I've been looking forward to this.
The voice of New Hampshire, the voice of the establishment Republican Party in New Hampshire. I'm not talking about Chris Snunu. I'm talking about Steve Dupree, former chairman of the New Hampshire Republican Party, now owner of dupre Companies. And he's been with us before. Of course we spent some time together in New Hampshire. He was behind Nicki Haley and now he's trying to figure out what to do in November. Steve, it's great to see you. Welcome back and thanks for
joining us here on Bloomberg. What do you want to hear on Tuesday Night or is your mind.
Made of Well?
I'd like to hear substance, but I think, as we've all predicted, it will be short on substance and more on style. And I think the commentators have dailed it. We have a showman who's created one liners, and we have a prosecutor former attorney general who's good on the facts.
So it'll be very interesting to see the interaction. I think for people who are still on the fence, there are a lot of people who remember what they think was a better economy under President Trump, and he's going to remind voters of that, and I think try to put Vice President Harris on the defensive, saying, hey, this is your economy and the price of groceries is your responsibility.
And she's got to counter that. She's got to somehow separate herself from the Biden administration and make Donald Trump, in the way he conducts himself and his erratic policy pronouncements, the issue, and somehow diplomatically also point out that now there's only one very older candidate in the race, who, if elected, would be older than Joe Biden was when he took the oath of office. So it's going to
be a very interesting show. I think there is a group of persuadable Hayley slash McCain, Bush slash Reagan Republicans out there who have not made up their mind. They probably disagree with many of Vice President Harris's policy proposals, but they're also offended to some degree by the conduct of former President Trump. They're understood out there, and they could determine the election.
They could determine the election, certainly in a state like New Hampshire, if we zero in on the state that you know so much about, Steve, there was reporting this week that New Hampshire might be off the table for the Trump campaign. That take has been challenged. I wonder if you see it differently.
No, I know the Trump folks very well. I know Corey Lewandowskie, Steve Stephanak, some of the leaders. That was a foolish pronouncement, apparently by a volunteer from Massachuset. Since the Trump campaign is working hard in New Hampshire and the assumption of the rewarding that they're pulling out is just incorrect. And I will point out that in twenty sixteen when he ran, it was no effort. In twenty
twenties loosely organized. They are very well organized. They showed that in the primary, and they are contesting the state. And I know the polls currently show Vice President hair Us up by about six points. And she was here and had a very successful visit on Wednesday, but this state is very much in play.
It's interesting she chose to go to New Hampshire to talk about the economy. Stephen, I'm wondering if anyone is resonating with you. As a fiscal conservative, it's not a question of which candidate might be responsible for more deficit spending. It's about which candidate will spend more.
Am I wrong?
No?
And for those of us who actually believe the debt and deficit matters, what's happened? I remember in two thousand and eight when John McCain and Barack Obama were arguing about an eight trillion dollar death sit not won the size of now. It's just amazing to me that neither candidates seems focused on that because there aren't easy answers to it, as we all know.
I actually thought it was a smart move by Vice President Harris to come to New Hampshire and talk about supporting small businesses because this is a state primarily made up of very small businesses.
So I think that's an appealing message. That's a differentiation from what the Biden administration did in many regards. So from all accounts, and I was not there. I don't go to many political events. I try to avoid as many as I can. We've got a bunch of hot races here in New Hampshire. It was a successful visit, and of course every time President Trump comes to New Hampshire, the rallies are big, and he has an incredibly large crowd the way he does at all of his rallies.
So I think both of them are fighting hard. Both have organizations in the state. In fact, there are races down ballot for governor for Congress that are very hotly contested. Means the Trump campaign will be here and those reports are just not that they somehow pulled out, are just not accurate.
Well, this is really important to hear from a credible voice in New Hampshire.
I've only got about a minute left.
Steve will small business then break for Trump or Harris in New Hampshire.
You know, that's a very interesting play because those of us in small businesses like my own remember some of the tax breaks and tax cuts that help particularly as we went through as we right before we went in COVID. But then again the Biden administration put in lots of supports that helped the state and kept the economy going. So I think that small business people are very much in play, just like you hear the President and the Vice President talking about non taxing tips for wait staff
and workers like that. That's very popular, and they're both trying to appeal to that small slice of the audience that in six or seven states can make the difference in the outcome.
The voice of Republican politics in New Hampshire, and of course the Snowshoe Club.
Steve, it's great to see you.
Your input is important to us. Let's stay in touch as we get closer to November. Steve Dupree to pre company's former chair of the New Hampshire Republican Party.
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.