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Alongside Jordan's King Abdullah, President Trump holding forth in an unexpected news conference that was supposed to be close press and a meeting that will extend through the day. Here, of course, the first Arab leader to visit this new White House at a precarious time in the Middle East, Donald Trump speaking to his proposals for the Gaza strip that are quite controversial and one that the King of Jordan is likely not going to be agreeing with even
after meetings today. Although Kaylee, as we just heard from King Abdullah, Jordan will be receiving a couple of thousand sick Palestinian children as opposed to the hundreds of thousands of potential refugees under the eyes of Donald Trump that he was hoping Jordan might accept. I'm Joe Matthew alongside Kaylee Lines in Washington. This is Balance of Power on Bloomberg TV. And radio. Interesting to have the media in the room for what was supposed to be a private conversation.
Yeah, and there is no telling whether or not this is something the King of Jordan was actually looking forward to considering. They made a point to not schedule a joint press conference where they would have to field questions from reporters, and yet they did have to do so
inside the Oval Office. To your point, show the number two thousand six children from Gaza that Jordan has agreed to accept, but no such agreements made on wider acceptance of those who are currently in Gaza, and no real input from the King of Jordan as to Donald Trump's plan for the US to take over Gaza. The King suggested that the Egyptian plan needs to be looked at
as well. Really, no commitments made on that front, even though clearly the President of the United States is doubling down on that.
Yeah, and suggested they were ninety percent on the way to a deal with Egypt. I think was the word that he used. So we'll see what comes from all of this. This is obviously an important conversation since Donald Trump came into office and he has reiterated his threat for all Hell to break out in Gaza if hostages are not released by noontime on Saturday. He said he did not accept that to happen. Expect that to happen.
Kid.
Yeah, So we want to get into all of this now and turn to Ian Marlow, who covers foreign policy for US here at Bloomberg and is here with us in our Washington, d C. Studio. So, Ian, obviously there's a lot to work through here. But when it comes to the plans and Gaza specifically, there's first the notion that Palestinians would be forced to leave Gaza and unclear listening to the President just now as to whether or not they would be welcome back to it once the
land is redeveloped. Then there's the question of who would actually accept these individuals if they dained to leave. Are we getting clarity on whether there's going to be cooperation with what President Trump wants to do here.
No, And the only thing I think the whole region can agree on is that this idea is a total non starter. It is fascinating to watch the Jordanian king kind of squirm in his chair there, possibly not even realizing this was going to be a public meeting. With media there asking questions, asking questions to him about whether
he would accept Palestinians. You have to remember, throughout the whole Biden administration, throughout several decades, the idea of Palestinians being expelled from Gaza is unbelievably offensive to to so many people across the Middle East. And as part of the animating idea, you know that there's the animating challenge but behind the Israeli Palestinian conflict, and and Trump is coming in here hoping to ignore history and view this
as a real estate deal. And the Jordanian king, who himself is dealing with a bit of a shaky proposition at home in terms of the population, the popularity of the monarchy and UH, and you know, potential unrest that they worry about will kind of trickle over the border from from from the West Bank into join Uh. There's huge concerns there about what being forced to take Palestinians out of out of Gaza, you know, out of Palace, you know what they view as Palestine and have them
never come back. I mean, this is just it's it's for for Jordanians, for Egyptians. This is not going to happen and so it's it's very interesting to see how Trump is going to keep pushing this forward. What he hopes to get. Is it just to pressure Hamas into taking a deal. Is it something he's going to really fully carry through on. It's it's fascinating to watch.
What happens at noontime Saturday.
Yeah, it'll be interesting to see exactly how Hamas and Israel deal with this. To some degree, Israel and the Israeli far right are the only people in the region or in the world who are really taking the idea of expelling Palestinians from Gaza seriously. To them, the idea is great. I mean, there's a lot on the Israeli right who who want to do that and have wanted to do that for years, and they want the West
Bank as well. So it's that idea has found traction in Israel in a way that it it hasn't, and so it's now that it's being tied up with the actual hostage release process in the ceasefire. I don't know if that's incredibly combustible or whether it you know, whether it's a good thing or a bad thing in terms of piling pressure for them to keep the deal going because you know, the alternative that Trump is offering is just so extreme. You can imagine the Jordanians and the Egyptians,
you know, want the ceasefire to keep going. They don't want to see, you know, you know, some renewed conflict.
Aium well, and on the kind of extremity of what the president is proposing. He was asked by journalists in the Oval Office this notion that this is not US sovereign territory we're talking about. When he was asked by what authority he thinks the US can go in, he just said, US authority suggested they wouldn't have to buy Gaza, they can just go in Ian is that's not true.
It's not true, It's not possible. You know a lot of people who have watched the region for decades, who have worked for the US government, are just saying this idea does not make any sense, and that privately a lot of the Arab officials think this is it's nutty, right, And it's just a.
Question if anyone would act to stop the US trying to do this, if Donald Trump were really just send people over.
Yeah, it's hard to see it. It's hard to even fathom what that would what that would look like other than boots on the ground, and boots on the ground is something that you know, a lot of people who voted for him, a lot of people you know, in his defense department, don't really want to see. And so it'll be interesting to see what that looks like. I mean, Gaza is largely rubble now. It is a very complicated, tragic situation. And again, like you know, the White House
is selling this is outside the box thinking. And you know, potentially, you know, as the authors of the Abraham Accords that united parts of the region before in the last administration, maybe they have some track record thinking outside the box on this. But for many people who look at these issues seriously, it's hard to see how any of the logistics or mechanics or practicalities of this would work in any way at all.
Insights from Ian Marlow. Thank you Ian, as always reporting on diplomacyed foreign policy here at Bloomberg in Washington.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cockley and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
We've been balancing a couple of developing and breaking stories since we came to air at noontime Eastern. It was only about an hour ago, in fact, that fed Share J. Powell wrapped his first of two days of testimony on Capitol Hill, making it clear that no interest rate cuts are coming anytime soon.
With our policy stance now significantly less restricted than it restrictive than it had been, and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance. We know that reducing policy restraint too fast or too much could hinder progress on inflation.
Also watching and listening today, Diane Swank, chief economist KPMG, with us now live on Bloomberg TV and Radio. Diane, it's great to have you back. Thank you for your patients as we balance a couple of stories here based on what you just heard from Chair Powell today, and of course we're going to have another conversation on the House side tomorrow, and the fact that basically rate cuts are not fully priced in until September. Should the fed Share just take the next six months off.
I think the Fed's going to take more than the next six months off. The bottom line is the FED is made very clear that they're not going to front run any policies by this administration. I think that's important. The other side of it is they have eased that last cut in December was controversial within the Federal Reserve. We saw the descent, but we also saw thirty percent of participants that were at that meeting did not see
any cuts at all going forward. And the fact that j. Powell was much more open to the fact that the neutral rate had moved up substantially from where we were pre pandemic is important as well, because the fear is with inflation still smoldering out there, you could easily reignite inflation and that is not a place they want to be. And frankly, all the economic data makes them very comfortable being on the sidelines well.
As we talk about inflation smoldering, though Diane Chairman Powell today suggested that inflation expectations are still well anchored, and I wonder if you share that view. Consider on the subject of data, we had missed figures that showed inflation expectations rising on the part of the consumer because of tariffs. Is there not a risk here that an unanchoring could be upon us.
I think there is a risk that ungreed could be upon us. We saw in the University of Michigan Index two months in a row where fears of inflation moved up on fears of tariffs. So clearly that's in the consumer's mindset. CEOs are not showing as much of an increase in their inflation expectations, and they've actually continued to come down. And there's mixed news from the New York
Fed as well. Their surveys show that a pickup in inflation in December, but expectations by consumers in January, because we did not get the initial tariff announcements on the inauguration day that actually came off a little bit. So there's a lot of mixed news down that. But we've also seen within the FED themselves debating whether or not inflation expectations are well anchored and could they be unanchored.
We heard Lori Logan address this from the Dallas FED two and I think that's very important to remember, is that the debate within the FED is really heating up as inflation is not cooling as fast as they'd like, and that concern about reigniting those smolder numbers is still out there.
So to what extent then, could tariffs still change the view of the Fed. We've basically got a thirty day review underway right now when it comes to Canada and Mexico for instance, Donald Trump has also been promising more when it comes to reciprocal tariffs. What is it going to take for tariffs to change the forecast? For Jpowell?
Well, this is a FED that doesn't want to front run any policy, so they'll wait and see what the actual impact of tariffs are and what tariffs are actually implemented. That said, we do know that historically the tariffs are inflationary unless we see a big spike in unemployment, and those two things have not yet occurred, and so the FED doesn't want to get too far ahead of itself. But the bottom line is, if tariffs are enacted without a spike in employment unemployment, you will see the FED
act and continue to stay on the sidelines. Hopefully they don't want to have to reverse course and after raise rates against after they cut rates so much, And I think that's important as well, because if we're talking about a much higher neutral rate, what is it? And nobody actually knows what the neutral rate is. That's sort of a fuzzy number that moves around, and the concern is
that we could be already too close to it. And that's something I think that you're going to see much more of a debate within the FED coming out in terms of people talking differently about how they see inflation going forward.
Well, and of course it's not just the FED talking amongst themselves, Diane, but people talking about the FED, including those in this administration. Just last week, we had an exclusive conversation with Scott Best and the new Treasury Secretary suggesting he does not want to weigh in on monetary policy, basically saying that this administration is not concerned as to whether or not the FED wants is to cut rates or high rates. They're just trying to make sure that
the tenure yield goes down. We heard the Chairman talking about this in the testimony today, that actually the FED only has so much control over things like mortgage race because it's about what the tenure is doing. Do you see the ability for fiscal conversations happening here in Washington, even if the FED is not really trying to take those into accounts, still altering what borrowing costs look like in this.
Economy absolutely, I mean everything from deficit financying of tax cuts that could push the yield up even further. On the other side of it, some of the spending cuts that they're trying to attempt to do may actually take some of the steam out of the upward rise in bond yields. So clearly this is outside of the Fed's purview. They can only do what they can do at the
short end of the curve. The Treasury Secretary is also made clear that he would like to change some things that he's doing at the long end of the cur her and perhaps be able. There has been a statements by the administration they'd like to see a dollar depreciation. That's why they're so focused on the long end of the yield curve. What is unclear is how much they could actually engineer that on their own.
What's the higher deficits mean for inflation, Diane, particularly if the Trump tax cuts, if extended, are not paid for.
Well. The extension of the tax cuts alone aren't all that stimulative because we're already in place, so you know, falling off a cliff of not extending the tax cuts that would be holding back the economy quite dramatically. What really matters is the composition of tax cuts going forward. Are they going to be just extensions and sweeteners for individuals or will there also be some offsets on investment to try to offset any losses we see due to
tariffs and the higher costs of tariffs. And that's where a lot of debate is currently going on in Washington and trying to think about how do we think about expensing investments right now? How do we think about R and D. I don't think they're going to come up with any solutions on that till year end because it is so complicated. But depending on where the tax cuts actually come, that will have a different effect on the
overall treasury bond market. But we have seen some return globally of the bond vigilantes, and I don't think they're limited anymore to developing economies alone. We've already seen the UK and France actually feel their ire.
Well, Diane. Obviously, the argument the administration makes in favor of tax cuts is that is going to juice growth, but I do wonder what realistically you think GDP growth expectations will look like if yes, you get those tax cuts, or at the very least we don't fall off a cliff, but it's coming with tariffs, with changes in the labor market because of deportations from the reduction and size of the federal government. How does all of that come together as one big picture?
What really is an issue of sequencing what happens first and what matters first? Because the tax cuts are likely backloaded into twenty twenty six and twenty twenty seven, so the upward effect on growth is in those years. Well, the suppressing effect of higher inflation and the immigration losses that comes up front as well. It depends on how fast.
Usually we see these things evolve very slowly, but the shock and add that the administration has been going for to get faster economic results, particularly on the immigration front, could also have more damaging effects. We already have heard, certainly anecdotally from a lot of firms that have said they're not able to do the kind of things that they thought they could because workers literally aren't showing up
because of fear of deportation. So that has its own stagnating effect on the economy and its own drag on economic growth. It also cuts into our ability to grow potential growth. And of course we know immigration is a big part of the deficit in terms of lowering it because immigrants pay into Social Security and Medicare, but they cannot collect it unless they ever achieve a Green card or actual US citizenship.
All right, Diane Swank helping us look at all the different pieces of this puzzle. Chief economist at KPMG, thank you for joining us here on Balance of Powers. We watch from Washington the testimony Jerome Powell gave on Capitol Hill earlier today.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Good to have you with us here on the Tuesday edition of Ballance of Power on Bloombird TV and Radio. I am Joe Matthew alongside Kaylee Liones in Washington, where Donald Trump today is meeting with the King of Jordan. Will keep eyes on what may come from their can continued meetings. They already allowed reporters into the Oval office
for a while. Not too much news, but Jordan has agreed to take a couple of thousand sick Palestinian children as Donald Trump looks for more help in resettling Palestinian refugees. I'll tell you what though, when it comes to the executive actions, Kayley, that we've seen from this White House, the courts have been very busy. Usaid employees are suing, universities are filing over NIH funding cuts, public citizen claims, foreign aid freeze, labor unions filing a challenge over the DOGE.
Just got another ruling here yep. Doge remains temporarily blocked from accessing Treasury data. Of course, the hand was in the cookie jar pretty early on this one, as the payment system is in fact seized by the DOGE.
Yeah, or a granted access to and a federal judge had already earlier this week or over the weekend ruled that they cannot have access to that system. Then there was concern on the part of the government, the Department of Justice counter saying that actually they were cutting off Treasury officials' ability to access the system as well. So it's a bit of a revision to the restrictions from the federal judge leadership at the Treasury is now exempted.
Dog can still not get in, but obviously that probably only does so much to pacify those concerned or to alleviate what the administration is saying is the courts acting in a way that they should not be exercising authority over executive power.
It's an interesting moment here, as we saw in the first Trump administration and now in the second, just testing a lot of ideas in the courts as Congress watches along. That's where we start our conversation with our signature panel. They're back today, Rick Davis, partner at Stone Court Capital, Republican strategist and Bloomberg Politics contributor, alongside Democratic analyst Genie Shanzano, Bloomberg Politics contributor and political science professor at Iona University.
What do you think here, Genie? It was a read only as we understand it, read only access to the Treasury's payment system and personal information that was tied to it. Is keeping guardrails up here? Will the courts be the answer, the check and the balance to this Trump White House of Congress will not be.
They are trying to be that check. I don't know if it will sustain long term, because, of course, we have a vice president who just the other day said they can rule, and you know, we may not listen to those rulings, and that has set off this real concern that we will see a constitutional conflict like we've never seen between the executive and the judicial branch. But
the reality is the judge is right about this. The when you look at the Treasury, the issues of privacy, cyber security, the constitutional issues, the security threats arising from what has happened by letting people who have not been properly vetted and who are not nonpartisan civil servants have
access to these systems is incredibly dangerous. Not to mention the that it is Congress who the Supreme Court has long agreed authorizes the funding, and it is not the will of the Treasury or the executive branch to decide when they listen and when they don't. That is long set an American constitutional law and should not be upended by people who have not been elected or anyone else.
Quite frankly, well so too Genie's point.
Rick.
Obviously, we can look at each of these cases in the judge's rulings individually, whether it's USA idea or NIH related, if it's birthright citizenship, But all of this broadly seems to be about a question around the constitution. Do you sense that there is a kind of constitutional crisis brewing just weeks into this administration.
No? Not.
At this point, I'm not exactly sure how much of
this is constitutional and how much of it's not. I am not a constitutional expert, so I'm my own layman's point of view is that this is actually a strategy that the Trump administration is actually trying to foment, which is, let's poke around and see whether or not we can extend the power of the executive branch by treading on some of the things that have historically been the purview of Congress and even in some cases the judicial system, and then let the judicial system tell me whether I'm
right or wrong. And so far that's pretty much how it's been played out. As you pointed out, there are a lot of lawsuits on the issues that have been presented as far as access to and manipulation of agency funding for congressionally approved programs, and I think that it's going to be a real test for the judicial branch to say how much they feel this executive encroachment into
the congressional authority is allowed. And the greatest, I think interesting aspect of all this is the credible lack of engagement by Congress. Republicans in Congress seem perfectly happy to abdicate their authorities to this executive branch, and I would I would caution him only that if Democrats were ever elected to the presidency again, they're going to want to have that authority and Republicans are going to probably try
to resist it. So you're you're putting yourselves in an interesting position of having to seed this temporarily to this president, and you know, no telling who's going to be the next president and whether or not you're going to want that to happen again. So I think we're creating precedent more than breaking constitutional mandates. But I think the courts are going to tell us just how far this administration can go.
Well, how about Democrats in Congress? Genie is Hakim Jeffrey's the right leader for right now?
He's the leader we have. You know, Democrats don't have a lot of they don't they're not empowered really to push back. They are trying to do some of that. There is a lot of disagreement in the Democratic Party on how best to do that, and I think we're going to say see that rather play out, particularly when it comes to raising the debt ceiling when it comes
to the funding for this year. One of the problems is is that Democrats have long sought protection in the courts, and that is not a viable solution for a political party. So they need to win the hearts and minds of the voters. These cases that are going up through the courts will continue to go up. But I would just say that what's changed on the part of the Trump administration here is the rhetoric. In the past, they have appealed decisions they didn't like, but accepted the rulings. What
we have heard from jd. Vance, what we have heard from Elon Musk, even what the President hinted at, which has gotten people very concerned about a constitutional crisis, is the idea that judges have stepped over their ease on this. They don't have the power to set limits on the executive branch, and if they try, we may beating. The Trump administration not listen to that that is if it happens, a constitutional crisis like we've never seen before in the
modern era, and that's what's got people concerned. So far, they have listened, but when it gets to the final arbiter, the Supreme Court, if they choose not to listen because they don't like the outcome, that is a constitutional crisis, and that is something that you know, in American history, would put us in unprecedented times.
Judy Shanzino and Rick Davis our signature panel. It's great to have you both back with us again today on Bloomberg TV and Radio. It's Balance of Power, the Tuesday edition. I'm Joe Matthew alongside Kaylee Lions in Washington. As we turn our attention Kaylee back to the Middle East. The King of Jordan at the White House today does not agree with Donald Trump on a two state solution.
Yeah, not willing to buy into the US taking over gaza Idea either. We're going to get into that with a former ambassador to Jordan, David Hale, is on his way in next on Balance of Power on Bloomberg TV and Radio.
You're listening to the Bloomberg Balance of Power podcasts. Catch us live weekdays at noon and five pm. E's durn on Apple Cocklay and Android Auto 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.
Kaylee Lines alongside Joe Matthew. Here in Washington, where an important meeting has taken place today at the White House between President Donald Trump and King of Dullah of Jordan, with much on the agenda and in fact the two sitting down together in the Oval Office and welcoming press in despite our previous understanding that there would not be
a press involved in much of this meeting. No joint press conference was scheduled, and still the two of them fielded a number of questions from reporters about Donald Trump's plans for Gaza, specifically in the role Jordan would play in them. Here's a taste of what President Trump said about his vision.
It's not a complex thing to do.
And with the United States being in control of that piece of land, a fairly large piece of land, you can have stability in the Middle East for the first time, and the Palestine inje or the people that live now in Gaza will be living beautifully in another location.
When asked by reporters if he planned personally to help develop portions of Gaza, the President said no, and so we're glad to bring you a voice of experience on this matter and someone with great experience in the region. David Hale is with this global fellow with the Wilson Center, former Undersecretary of State for Political Affairs, and most importantly, former ambassador to Yes Jordan along with Pakistan and Lebanon. Mister ambassador, welcome. It's great to have you with us
here today on Bloomberg TV and radio. You know the stakeholders here, and I wonder before we get to some of the substance, what you make of this move to bring the press pool into the Oval office for what was supposed to be a closed press meeting. It's this all part of the pressure play.
Well, I don't know exactly what was going on. It's common and normal to have the press there. So even if it wasn't originally planned, I'm sure that the King wasn't going to object if the President Trump suggested.
They do it.
He didn't look terribly comfortable, no, because it.
Was a surprise, and you know he speaks English very well, but it's not his native language, so he may not have been fully prepared for it.
But the fact of.
The matter is that the king is one of our closest allies, one of our most reliable partners, not just in the Middle East but globally, and the conversation that they undoubtedly had was potentially quite consequential.
Well, and the conversation itself could be uncomfortable when you consider what ask the President is making here. He wants Jordan, together with Egypt, to accept millions of Palestinians into the country so that Gaza can be redeveloped. Is there any way the President is going to be able to convince the King that that is a suitable plan.
Today, Well, my guess is that the King probably behind closed doors, thank to the President for at least demonstrating concern for the welfare of the people living in Gaza, which a lot of people don't seem to want to express, and to try to think about new ideas, because frankly,
new realities do require creative thinking. Now, this may be more creative than people are prepared to swallow, but at least it's the beginning of a conversation and I'm sure if the King were able to offer ideas of his own to compliment what the President is offering, then there's a conversation to be had.
So that's my question for you. They're back behind closed doors now, So what extent can King Abdullah bring Donald Trump into his fold and talk about the stakes in the region and why this may be asking the impossible.
Well, again, in my experience, a lot of presidents, and I don't mean this as criticism, it's understandable, don't necessarily know all the details and all the problems that led us into these dilemmas that we face like today. So that's one task I think for the king is to explain the realities on the ground. And for Jordan, there
are two realities. One is a already have been generous since sixty percent of their population is Palestinian origin, and there is a Jordanian West East Bank population that is rock solid with the king. They are his base, but they don't want one more Palestinian, so that's a political reality.
The second problem is that the whole issue between the Palestinians and Israelis is largely now to summarize one of land for security, and so the Palestinians are loath to give up their land without any kind of guarantees about what they keep. It's the land, it's the dispute is over the land, and so if the king were to come along and cooperate with a proposal that deprived them of that, he would be viewed.
As a trader.
Well, and the President has suggested that Palestinians wouldn't necessarily be welcomed back to Gaza, that they would be in nicer conditions in his view elsewhere. He suggested as well when he was asked by a reporter that the US does have the authority to do this, to just go in to Gaza and not buy it, he says, but just take it over as its own. What authority is that, master.
Well, the legal status of Gaza is a little bit nebulous anyway. It's not just a matter of law or authority, but also what our interests are, and I think our interests are to work carefully and wisely with the Israelis, the Palestinians, and the Arabs to come up with a solution that will improve the welfare of the people living in Gaza, but also get us back on a path toward finding a durable solution.
The President indicated in a conversation with reporters last evening that he would be open to threatening at least to pull some funding from Jordan. I don't know if you'd take him at his word there, but what we'll we be talking about to what extent does Jordan rely on US funding? We certainly know how it relies on military support.
Right.
We provide over a billion dollars a year to Jordan, so it's quite substantial. But we do it because it's in our interest, not necessarily because it's in Jordan's interest is of course as well. But we do it because the King of Jordan and the Government of Jordan and
army and intelligence services are solid partners. This is an island of moderation on Israel's eastern border, and if we risk put in jeopardy that support, it puts in jeopardy the stability of the monarchy, and I think that would be an extremely dangerous course to take.
Well.
And we should remember as well last year when Aron sent the barrage of missiles and drones over to Israel. It was the US and UK that were helping take those down, but Jordan Air Defense Jordanian air defense was involved in that too. Obviously, that is just one of the players we're talking about here, though there's Egypt as well, and King of Dolah said, we need to see the Egyptian plan too. Are they on the same page the two of them together? Will Egypt be viewing this any differently?
Well, Jordan will probably seek an Arab consensus for any outcome, and obviously it may serve his purposes to hide a bit behind the absence of an Arab consensus to support this. It's the Saudis will really matter, and they've already rejected
this proposal. But you know, you touched on a very important point, which is that Jordan is an ally of ours in dealing with the Iranian problem, and so a lot of this is frankly a distraction from the real issue, which should be strategically, how do we do something that permanently puts around the reversal of fortune that Duran has suffered. How do we make that permanent? And Jordan has a big role to play and a lot of at stake in that, and so I hope they're also discussing some of those.
Issues, Ambassador. This is all further complicated by Donald Trump's threat for all hell to break out again starting at noontime Saturday in Gaza if hostages are not released. He indicated just now he doesn't expect them to be released to the extent that you know, King Abdullah, what does he make of talk like that and what might Gaza look like at noon on Saturday.
Well, my interpretation is just as voud as anyone else's. But was that the President was speaking about his expectations of reality, not necessarily that he was threatening that or he wanted that.
But that would mean the ceasefire agreement is out the window.
That he believes that if they don't provide, if we don't finish phase one, there won't be a phase two, Yes, and if there's no phase two, there will be a resumption of the war. So that's a statement of fact. King of Bella also understands those facts. So we should be doing what we can to sustain the ceasefire process.
The problem there is that Phase two of the ceasefire calls for the withdrawal of the idea fully from Gaza, and yet there's been nothing done to prepare for what replaces that, Who or what will be providing security in that context. So the Israelis are not going to pull out if they don't have a reliable partner on the other side of the fence, which is not Hamas and not the Palestinian authority. The Arabs have said, well, we can do it, but only if that Nyahoo commits to
a two state solution for the Palestinians. And there's no consensus in Israel for something like that. So Phase two is in serious jeopardy, not because of what President Trump said, but because of the realities of these differences.
So even if you don't see a break in the ceasefire on Saturday, when this forty two day period is expired, you don't see a likelihood that it's extended beyond that. If Phase two is the requirement for that.
I think it's very fragile and very unlikely to happen in my opinion. I hope I'm wrong, but it would require certain the changes to the agreement or compromises on the part of Israel that in the current psychological climate I think are extremely unlikely to happen.
I want to ask you about a story that broke a short time before you joined us here. The Kremlin has freed Mark Fogel, a man who has your former job. Actually Steve Whitkoff put him on his private plane. Is they are apparently on their way back outside of Russian airspace, so we can now talk about this. Mike Waltz made this clear. This is the first time that a senior US official has touched down like this in Moscow since the former CIA director Burns touchdown to try to head
off a war in Ukraine. To what extent does this development help to pave the road for a deal over Ukraine?
Well, he was my predecessor, but I didn't have a private plane to bring into the equation. Look, my experience with President Trump and his first administration was he cares passionately about the fate of American citizens for being detained unlawfully overseas by governments or terrorist groups. So I think this is a plus. What we don't know, of course, is what the conversation was and what if any trade was made in exchange for the release of this man.
We just we don't know that, but undoubtedly it'll become a parent soon.
Well, what does it say that the Middle East envoy is the one who was sent to Russia to do this.
Yeah, I don't know how to make what to make of that, except that I also believe he's a close president friend of the president, so it may be on a personal basis that they all felt that he had what it took to get the deal done.
Does it give you hope on the relationship or at least the ability to negotiate with Moscow? When you hear a development like this, usually this doesn't happen in a vacuum.
That's right, and so in that sense it's positive. But we don't know what it is that Putin got in return, so I would want to know that before I've made any further judgment.
Well, and we also have to consider the relationship that these conflicts have with one another. We're talking about the war in Ukraine and Russia, which obviously has ties to Iran. China is involved in this as well, as often described to us on this program as a new axis of ev Well, how do these puzzle pieces fit together in your mind? If Russia is going to the negotiating table on Ukraine, does it have implications for the behavior of Iran? For what role does China play in this?
For example?
Yeah, I mean everyone's watching everyone and Iran has developed an alliance at least of convenience with Russia and China, so that's a factor as well. But I think Russia is definitely on the defensive in the Middle East with the collapse of their ally in Syria, So I'm not sure that has any immediate implications. But for the United States, what we do in one theater of operations and one set of problems that definitely influences attitudes towards us in
coping with other problems. So the idea that we're going to assert strength, you know, peace through strength actually works, and that is I think a foundation of Trump's approach.
What about the idea that we could just go in and take over Gaza. What might that signal to China about Taiwan.
It's a good question.
I don't have an answer to it, but I accept that I don't really believe it's going to happen.
Well, I'll tell you what, when you start to pull out the lens here and look what's happening in the region. We recall a visit by Benjaminett, yeah who to the White House last week, and people were musing openly here in Washington about a preemptive attack against Iran. That that is what Beebe was trying to talk to Donald Trump about Iran on its heels go after the nuclear facilities. Now, is that something in the realm of possibility for you or is that talk at a cocktail party in Washington?
Oh?
I think it's very much in the realm of the possible. And it was a theme for many conversations between President Obama when I was Middle East Envoy and Prime Schmid you know who he was in office then, and that was part of the incentive and motivation for us to get the nuclear deal that was flawed deeply, but something that we got. So I'm sure it was discussed, and I'm sure King Bell is very interested in knowing what exactly is.
You think that's something that they're discussing today as well.
I hope so, and the King will be very happy if we're going to keep the pressure on Iran, but we want to know how and to be ready for it. The fact is Roun his air defenses I think are apparently gone, and so this is a good time to think about how we can really eliminate this threat.
All right, Ambassador, thank you so much for joining us here in our studios. In Washington, DC. David Hale, as we mentioned, former ambassador to Jordan as well as Pakistan and Lebanon, now Global fellow with the Wilson Center.
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.