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I want to bring back in David Weston, host of Wall Street Week, to talk about the legacy of President Carter. And you know, we talked a little about his four years in office, but I think where he really made his mark was after that. He won the Nobel Peace Prize. You mentioned the Camp David Accords. He worked towards peace for the rest of his life. What are the standout accomplishments achievements.
It's interesting you mentioned the Nobel Peace Prize, which was actually for what he did after lift office, not for the Camp David Accords. One might have thought he might have gotten for that. Actually was for what happened afterwards, because as you know, he set up the Carter Center and really traveled the world a policing election, making sure democracy was succeeding, also fighting for human rights and of
course for diseases like in Sub Saharan Africa. He was really in the vanguard of that, so he did a huge amount. And then of course there's habitat for humanity in the United States where he would go out and build houses. A really extraordinary period post presidency.
Something I've been thinking about a lot over the last twenty four hours is some of the things that happened at that time. For example, you mentioned Paul Vulker leading the FED really bringing down inflation in a really aggressive way, something Carter was very of course and supportive and needed to happen. Did happen painful choice at the time. Do you think choosing policy over politics would happen in that kind of a manner.
That's a great question.
Certainly he did do that, and a lot of people really say that's why he got beaten so badly by Ronald Reagan, because he was very principled. Whatever you think about his policies, he was a very principled man, and he would follow policy no matter what, even with Paul Volker. When Paul Vulker said, you know, we're going to really run into a recession, he said, I'll handle the politics, you handled the economy, And he really backed him on that, knowing that he would pay a very steep price he
started to did have we seen that since then? I'm not sure. I mean, it's fairly hard to find true profiles and courage these days, I would say, and I'm saying that for both Democrats and Republicans.
It's hard to find that.
Right even in today's Republican party. If you were to go against the grain, your primary seat is being threatened already, So I don't know that that could happen.
Well, that's true, but I would say this is getting into politics. But I think there's a version of the Democratic side too, where you had Joe Biden go in and become president and it seemed to trim his sales because of his concerns with the left wing of the party. So you know, I think that to Song said he was hemmed in by that as well. So I'm afraid things have evolved. But Carter was sort of a transitional figure.
I mean, let's be frank Gerald. Ford lost him by a narrow margin, in large part because he pardoned President Nixon and so he came in. He was from no where. He was an outsider, maybe our first outsider as president, because his presidensor has all been insiders. Maybe in that way he led the path. Wall Street Journal wrote about this today, maybe led the path toward to Donald Trump.
I think one of the legacies of President Carter is his post presidential career, which was so rich and so diverse, and it almost kind of set the template for some of the other presidents. How do I spend my post presidential years, you know, having my centers and trying to you know, be active and constructive and it. You know, certainly President Carter did that as well as anybody.
No think.
I think he did change the nature of post presidency. I think is exactly right, Paul. And certainly we saw with Bill Clinton that happened, George Herbert Walker Bush for that happened even George W. Bush, who doesn't get as much attention for it. He's done a lot of good with his Presidential Library and his center as well, and has really devoted himself to doing good things and using
their status to really accomplish things around the world. And I think Carter did change the entire nature of what happens after your president.
All right, David Weston, host of Wall Street Week, thanks very much for joining us on the legacy of Jimmy Carter. What can we expect from Wall Street Week coming up on this Friday.
Okay, So we're going to.
Take a look forward into what we're seeing in twenty twenty five and what the biggest issues are that we're going to have, and so we're going to try to set that out, to set the table, as it were. And then I'm going to get on the road and go out to visit oil fields in the middle of winter.
Cool.
Yeah, I'm in with you on Wyoming out of Wyoming to report on methane.
I would like to go to Wyoming right now too. I feel like it's a great time to go to Wyoming. I think you could go to Jackson Hall, Jackson Hole.
Yeah, well, I just stop in Jackson Hall, then I drive for a couple hours outside of Jackson Hole.
David, thank you so very much for joining us. Of course, on the legacy of Jimmy Carter. We're looking for to your Wall Street Week. Of course, everyone is taking out their playbook for twenty twenty five. It's going to set up to be a difficult one, a lot of questions around which industries will succeed.
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Let's bring in Claudia Slam. She's a New Century Advisor's chief economists, former Federal Reserve economists as well, and a good friend of Bloomberg. Claudia, let's think about twenty twenty five. I mean, I've got an economy that I think is you know, kind of puts it along pretty darn well. I got inflation that well, I'd like it to be a little bit lower. The Fed would like it to be a little bit lower. It's reasonable the labor market, people who want a job generally have a job. They're
getting some wage increases. What are you telling your clients about twenty twenty five in this economy?
Don't be complacent.
I mean these, as you said, if we could keep it as it is right now, largely, this would be another great year ahead of us. You know, we've been surprised at how well the past two years have gone, particularly when you think about both on how the consumers have held up, uh and that, but that doesn't have to keep going. So what we really want people to focus on are what like the blind spots right what
could go wrong? Where who isn't getting enough attention? And I think one area, you know, if I had to maybe point some FED officials to a blind spot, I think they showed a lot of complacency in their last summary of economic projections on how well the labor market would continue to hold up. You know what we saw them kind of write down the typical.
Official was something that basically has.
The unemployment rates sticking out where it is right now for the next three years. That's a pretty remarkable and frankly not would be very unusual path to the labor market. And that's and yet there was all kinds of concerns about inflation and the answer to round inflation. But I think I keep I'm still concerned that there are things in the labor market, while good, don't quite look like sustainable and that's where the problems can come in.
And so that's that's.
One way audio. So if I ask which is a bigger risk a weakening labor market or stubborn inflation, you're going with the former rather than the latter.
Inflation's fine right now.
I mean, we are really not that far from two percent, and we've seen a lot of encouraging signs under the hood that this we are getting to this last mile on inflation.
But right now, before tariffs, that's before we deep work, before millions of workers, that's before Donald Trump comes into office. So things could change drastically after January twentieth.
Absolutely, they could change drastically.
And I think it's appropriate that we have had a very deep conversation about the policies that have been put on the table. There have been a lot of policies put on the table, and it's really important to have this conversation and talk about some of their potential pitfalls and maybe we won't see all of them put into place, and that probably would be a good thing, uh, for
the economy. And yet, you know, kind of taking for granted the good stuff that we've got going in the economy that's a little more nuts and bolts, like the labor market functioning, and just saying, oh, well, that'll just keep going, that's all fine, it's in a good place.
I think that's a real that could be a real mistake.
In terms of because the labor market in particular is always and has been the past few year, is such a lynchpin to this amazing period of a big disinflation. Growth has stayed strong and unemployment has stayed relatively low, you know, and that's something we want to keep going.
And I don't think that's to just be taken for granted.
I think I'm very unpopular for asking this question repeatedly. I know, you got to look at all the risks, right and if you have to think about potentially inflationary policies and sticky areas of inflation next year, and worries about growth as well, especially if you have kind of a fiscal appetite to pull back. How big of an issue with stagflation or big of a world whe is it?
There are absolutely paths we could go down where we end up in a stagflationary environment.
We're good ways from that point.
Because again we're starting from a well above trend growth and inflation is relatively low. It's not to do percent, but it's relatively low. But there are absolutely paths we could go on that are uh could get us a stagflation. And the thing about stagflation is, you know, we talked about Oh, think about all the different risks and keep an eye out to the risk. And we do need to do that.
But some risks come with.
Bigger problems, right, Solving a stagflationary economic environment, like policy solutions for that are a lot trickier because, say, for the FED example, they're fighting both inflation and trying to keep employment high.
Right, and their tools are going to be at odds with each other.
So there's some like dark corners of the economic world that we want to stay away from because if we get there, they're a big problems. So I think it's important to think about secflation. I don't think that's one that's like highest probability, but if we get there, is probably one of the highest probability of being a big mess.
How does the consumer look to you, Claudia, Because as you pointed out at the top, the consumer held up much better than we had anticipated in twenty twenty four, and yet all the savings I would guess are spent off the pandemic era savings. This is a consumer that at least the bottom you know, four Quinn tiles, is not well prepared for retirement. The housing market is a tough one to get into if you aren't already, and I guess if you are, that's how you fund your retirement.
But what does the consumer look like to you right now?
In the US?
So as a whole, the consumer is still in a good place. We certainly as time has gone on, we have seen more strains at lower income household That's why I keep coming back to the labor market as so essential because from most Americans that's where the money comes from, that they're going to be spending. So you need a vibrant labor market that has good, strong wage growth as we have seen, and good job opportunities. So that is so important for the bulk of Americans, the bulk of consumers.
You know, we've also seen really positive trends with some probably middle class, upper middle class, wealthier consumers bolstered by you know, the stock market has been very good. We've had you know, we've had some trends that have continued to bolster the consumer and their demand. And you know, I mean I always say, don't bet against the American consumer, right Like, if they have if they have the music out and spend, they're gonna they're going to spend.
And that's what we have that's what we have seen the past few years.
Should I be concerned about this, this weakness in the manufacturing sector. I know it's only and I just underline, only thirty percent of the US economy, But what does that tell you? How do you think about that?
I think we've seen not just one more data point of weakness from the manufacturing sector. I mean, we've seen years of what could be seen as contractionary trends in manufacturing, and and there, you know, we have to have a discussion that's more about a structural you know, this this is an economy that just hasn't been based on manufacturing the same.
Way it had been many decades ago.
And this is a transition that's been happening very slowly over time. And it's probably one of the discussions that's hardest to have data release date to data release, right because it just kind of the trends get glomed together. So and then you know, and we're having a very robust and I think a lot you know, this year, a big part of this policy discussion is going to be center around do you revive the manufacturing sector in the United States?
And how do you do it best?
I mean, we certainly saw under President Biden a lot of tax incentives and big, large programs. We're trying to give money to companies to build up manufacturing in different specific sectors, and we may see an approach that's quite different in using tariffs to protect domestic industries and manufacturing being one in the area.
So I think it's going to.
Be an ongoing discussion, but it really is more about the deep underlying structure of the US economy and what we want that deep underlying structure of the US economy to look like clytie.
You know, you look at the long end of the curve and just how much tenure thirty year rates have decoupled. How much ConTroll does the Federal Reserve really have over that longer end when you see investors equally concerned about other issues like the fiscal term premium needed.
So the FED never hasn't never will have full control over a ten year horizon. So that much shorter horizons of treasury is like the two year you can really have a conversation about the FED is very active in what those treasure yields look like.
Out of the tenure.
There always are a host of concerns about or issues in the US economy that are going to fit into what do those treasury yields look like? And I think we may there's just a lot of action right now. Right there's a lot of information coming out of the FED in terms of where they think they're going to end up in terms of or potentially end up with
the rates. And this whole discussion about the terminal rate or the neutral rate of interest, it's actually one where while it comes out of FED official's mouths, it is tied very much back to these structural features of the economy and those are things like productivity or concerns about debt, sustainability, demographics, other big issues, and those then can get I mean, those are also issues that the tenure Treasury plays into.
So while as you said, the FED doesn't control the tenure Treasury, and maybe we're seeing that.
Potentially some of those links weaken even more just because the room is getting crowded in terms of issues that people in the treasure markets need to absorb. But I don't It's it's nothing unusual per se. It's what's maybe more unusual is we're having there's big question marks out there about the structure of the economy like we are we a stronger economy or are we going to withstand and really thrive with higher interest rates than.
We did for the pandemic.
I mean these and they're very much open questions right now and very very central to where those longer dated treasury markets will land.
I have a curveball question for you, Claudia as Good an economist. Were you at the Beta Theta pie house in March of nineteen ninety No, I'm kidding. What do you think about the effect of GLP one drugs on the US economy? We had a listener right in earlier asking why you know the government doesn't just subsidize these things and save US billions of dollars a year in terms of healthcare. What do you think about the effect of this drug? Have you given it any thought?
I think the way an economists like I said, would probably tie this back in into this economic discussion would be to think about the ability it gives individuals to be more productive as workers. You know, and this lives in the broad category of health and all all the different kinds of pharmaceuticals and healthcare that we provide individuals
or they have access to that. Can you know, potentially lengthen lives, make them more rich and fulfilling, make them more able to stay off save disability roles, and be in the workforce. So I think, you know, a healthier, more productive workforce is one that is going to you know, benefit the economy as a whole, do I think, But that's me again being macroeconomist, a very big picture thinking about the labor market as I often do, and not.
You know, there absolutely will be disruption under the hood in terms of winners and losers in the economy from you know, particular industries or particular institutions, and there will be I mean, there's an answer to that question in the beginning. I mean the massive budgetary impacts if say Medicare or large government programs pick up these these kind of drugs. Right, So there's all kinds of issues here.
But I think in terms of you know, a quality of life, a healthier, healthier population, there is a lot of both individual benefits and then their social benefits from you know, if the healthier population as a whole.
Gladdy, we have to leave it there. Thank you so very much for joining us today. Of course, it's a wild bond market out there, and expect expectations changing quickly around the course for next year as well.
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All right, President elect Donald Trump is offering his complete and total endorsement to Speaker Mike Johnson as he wards off a potentially crippling leadership fight in the House that threatens to slow his agendic Greg Valley are agf ands San's chief US policy strategist joints US. Now, Greg, what's the position of President Trump? President Elect Trump here as he gets ready to take office January twentieth.
That's incredibly uncertain, and it depends on who you talk at, what time of the day is you know, we're going to raise the death ceiling and we're going to invade Toronto. Are we going to have who are we going to have as Speaker of the House. These stories change almost by the hour, and I think we're all going to have to get used to this uncertainty for the next four years.
If you have uncertainty over the next four years. Where would it be the most at this point because there are range of issues that investors are keeping an eye on, the country is keeping an eye on. We talk a lot about tariffs here at Bloomberg News. Of course that is one of the places that of course we don't know the plan yet. But how do you think about this in terms of where the president elect will spar with Congress.
His promises have been so grandiose that I think he has to sort of stand up for what he has said. I think on inauguration day, on the twentieth, we'll be talking about terrace. I think he has to move on that against China, Canada, other countries and immigration.
He has to move on that.
A failure to do what he has promised would would really set him up for mockery and it would embolden people like Elon Musk.
I will chime in on something that I haven't brought up yet. Okay, Donald Trump promised to get rid of the state and local tax deduction cap that he put on the.
Tax Cuts and Jobs Acts.
So, as we all know, before Trump came into office, you could write off your state and local taxes from your federal filing. He said he's going to get rid of that cap that he put into place. What do you think the likely of that is.
I'll bet you live in New Jersey.
Just a wild guess, but I do think I do think it's going to be an issue that he'll have problems with for the simple reason that we can't afford all this stuff. If you look at what he has promised in the last six months, a tax break for waiters and waitresses, the state and local tax as you mentioned, all sorts of things that I think will annoy people in this very fiscally conservative house. You know, people say, well, Trump and Johnson, House Speaker Johnson will get along. I'm
not so sure about that. Johnson can only afford to lose one or two votes. And the Freedom Caucus may have an issue if people in the Freedom Caucus who live in Texas or Florida, they may have a big issue with the salt tax.
So, you know, Greg, One of the other big issues that'll probably be a day one type of issue for the president, like Trump, will be migration and perhaps deportation of certain illegal immigrants. How do you think that's really going to play out in practicality?
I think your practicality.
Trump and Elon Musk and Ramaswami are going to have to align.
It's going to be difficult with the Trump base.
I think Steve Bannon will lead that base and say we don't want any immigration. But that's that's just not practical. There are areas in our economy that need people from India or wherever. And I think Trump is going to have to moderate his tone on this.
Yeah, Trump has said he's in favor of the h one B visus. He's already come out on Musk's side, on Rama Swami's side on that issue, and he goes up against Laura Loomi and maybe Margaret Taylor Green on that. But it seems that it's a fairly easy easy position to hold because those aren't people stealing American jobs.
Right.
The problem is you can't fill those jobs to begin with.
Right.
And again, just to reiterate the problem is the uncertainty. Is he going to stick to his guns on the death ceiling? People I talked to on Capitol Hill last week were incredulous that he would inject the issue with the death ceiling a hammer the Republicans can use later in the year, that he's going to inject it now, it just complicates everything.
Speaking of complications, you know, when we're talking about that immigration issue, you really did see a fracturing in certain parts of the MAGA Party, if you will, or for the right part of the Republican Party, where you did see differences an opinion, very very vocal differences. Is it too early to ask how this would play out in the midterms.
No, that's a really good question. No, it's not too early. I think it's going to confuse people so much that it's going to get Democrats enthusiastic by spring that they have a chance to regain control of the House and Senate.
Well, taking that a step further, Greg, if I'm a part of the I don't know the Washington bureaucracy, I'm going to be there five years now, ten years from now, twenty years from now. In my department, Do I treat this administration almost as a lane duck administration?
Not? Probably, not yet.
I mean, people who under estimate Trump do so at their own peril. And I think Trump will have some successes, but he can't keep changing his line every week or so. That's going to exasperate people and it's going to cost him the most important thing a politician has, and that's political capital. And I think Trump's political capital just in the last ten to fifteen days has taken a hit.
Greg. We thank you so much for your time. That is Greg Valuer of AGF Investments. He's the chief US policy strategist there. You might have missed it. This is another big question. But late Friday night you had Janet Yellen sending a letter to congressional leaders saying when the new debt limit is going to come to the surface,
and the window is right around drum roll inauguration. So that's another thing to watch out for in the coming weeks, as well as those debt disputes coming back to the surface.
I'm surprised you don't have a drum roll button. Yes, Tom, not pushed to get those kind of things.
You're right, that's a great point.
I'll put that up.
I'll put a ticket in for that.
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