A More Hawkish Foreign Policy Ahead, Bremmer Says

to task one, which is Mike Pompeo. Is he going to be different than Rex Tillerson and getting us to an operational, functional State Department or the will the President block that effort? I mean, you know, I think he his foreign policy views are generally much more in line

with the President Trump's, so much more hard line. I think Secretary Tillerson did have a foreign policy outlook that was much more conventional and sort of in line with what we would have thought of the more republican, moderate republican administration in the past. Uh that had led to a sort of war between the Secretary Tillerson and the White House where uh, there we was there was a lot of sparring over nominees for posts. That was one of the big reasons why, uh, these slots were not

getting filled. He was objecting to some of the President Trump's nominees for posts. The Trump White House was objecting to his positions, so usually had this sort of deadlock over these nominees. Well, just thirty five days ago, or excuse me, forty five days ago, Thomas Shannon left the State Department is under Secretary of State for Political Affairs. That's just one example of people leaving the door. When

does the hemorrhagen stop? Nick, Well, I don't think this is something that is going to end with Mike Pompeo. If anything, it will only hasten it. Um Uh. There's a lot of criticism of recky Dollerson, but actually when you look at his foreign policy prescriptions, they were fairly standarded in line with past administrations. If anything, Mike Pompeo will be even more harder to the right and and

will alienate this building even more. Those those these these people tend to be sort of cautious and careful um and orthodox and their prescriptions. So when you put in someone like Mike Pompeo. They're going to have allergic reaction to him. Marta Shanka, I want you to come in on this and tell us your thoughts. But specifically, does this have anything to do with the ongoing or non

ongoing relationship that the United States has with Russia. I note that that Retch to Listen yesterday was quoted as saying that the United States has tried to work more diligently and more carefully with the Russians on a variety of issues, but said that the Russians have taken it upon themselves to us. He says, pivot, Uh in a more hardline direction. You know, to me, that's one of the more fascinating things. And Nick and chime in on this is just what Mike Pompeo thinks about the Russian

interference in the two thousand and sixteen election. The CIA has a central role in looking at that issue. Um. Does his political alignment with Donald Trump preclude him from being outspoken about the Russians meddling in the election? Or does he speak the truth to the president? Uh? That will be something that will be fascinating and it will come out in his confirmation hearing. UM, I would suspect

he would get confirmed. But they're going to be some hard questions asked at that at that hearing when it had when it happens, Marty are they're hard questions to be asked about the actual role of the State Department no matter who is in charge, because, I mean, there has been money allocated for the State Department that is yet to be spent. There are a variety of ambassadorial posts that have been vacant and have not received any

specific appointments. Is there a philosophical issue of about how the president views the State Department and its use for peign policy. Well, traditionally state departments have been really run out of the White House. I mean it's the President of the United States who sets policy and directs the

state head of state to actually execute it. One of those things that Rex Tillerson did, which was very controversial, is a strict adherence to budget restraints and a lot of the lack of people in those posts was a philosophical issue that we didn't need to Now the question is does Mike Pompeo take the same approach and then Nick Adams, for example, to your coverage of former Secretary of State Tillerson in Chad the other day. How alone is he out there compared to Secretary carry traveling three

and four and five years ago. Oh, I mean, this is fascinating. We literally just ended that trip to Africa about four hours ago. We got back about five am from Nigeria, and on the plane with us he did

when he obviously knew what was going on. He didn't give any indication of it to us at the time, but he did have this very rare moment where he spoke with us on the record in the back of the plane, which he had not traditionally done, very harsh words for Russia, which was in dissonance with with the administration. H a lot of confidence, he said, he was very

confident in himself and his own abilities. Um, when we asked him about the possibility of negotiations with Kim jongun, and then you see this over and over, this dissonance with the administration in Chad. He said, Chattians are welcome in the United States. Whether it was the administration that had imposed this travel panactual reporting and he's in the

back of the plane coming back from Nigeria. Would you suggest that the secret of the former Secretary of State in his interview with you and other reporters on that airplane, supported the President's efforts with Mr Kim and North Korea. Yes, there's there's no question that he did. But he was clearly blindsided by the President's decision to accept the meeting with Kim Jong hun on on spur of the moment.

I mean, this goes against everything Rex Tillerson believes in, which is deliberation, process, doing things right, making sure you have all the bases covered before you go into a meeting. So he was not surprised by the president's decision to meet with Kim Jong un. He was very surprised by the President's decision to say, yes, let's just do this meeting, uh quickly without the proper preparation. She's just joining us worldwide.

Pim Fox and Tom King with our foreign policy reporter, State Department reporter, Nick Waddams, and Martin Schenker with us of course running all of our Washington shop and now head of all of content for Bloomberg News. Marty a question for Mr Wadhons just off the plane. Yeah, Nick, What's interesting to me is that you're convinced that Rex Tillison absolutely knew what was going on? What makes you think that that's so? I mean, this president sometimes keeps

his own counsel, even on things like this. Uh. Two reasons. One, on the plane, he he cut this trip short by a day, which struck us as extremely odd. You're on a five nations trip to Africa. Why come home only one day early? If you're gonna cut it short, you know why. He he also had he was ill at one point in Nairobi, so he spent the entire day off. That struck us as odd. He basically had no appointments on on that one day. Um. He also said that

he got a call on Friday morning. He had gotten a call on Thursday about North Korea that kept him up all night. Then he said, I got another call on Friday and I asked him specifically what was that call about, and he said, I can't tell you about that yet. But so clearly there was a lot going on. This is critical. Nick Wadhams, have you seen a change behavior in the former Secretary of State over the last

week or so on this trip to Africa? Well, interestingly, the changing behavior I think was the fact that he was more willing to speak to us generally he's been quite cautious and uh not very outspoken. He would rarely do on the record uh interviews with us in the back of the plane. This time he did, and he

was very forth right, particularly in his condemnation of Russia. UM. And then, you know, just looking back and piecing some of these things together, it is interesting that he obviously canceled, he cuts the trip short, which struck us all as odd. He had this day where he didn't emerge from his hotel room. They said he was ill, which you know, obviously in Africa is entirely possible. But when you look back and sort of connect the dots like that, it does seem that there was a level of sort of

strain and chaos about this trip. You know, there's also this fascinating moment where he basically took the entire afternoon off on Sunday to do a game drive with his staff in that Roby National Park, UM, which you know, for Secretary Kerry had done something similar when he was when he was on the job. To do it for so many hours on a trip like that, it's just interesting. You know, another sort of data point, uh, Nick, just quickly give you about thirty seconds here. Gina haspell named

to become the head of the Central Intelligence Agency. As Mike Pompeo looks to the next Secretary of State, tell us about the challenges that she faces. Well, I mean again, you're gonna have this issue of the intelligence community colliding against the Trump administration. Mike Pompeo has been adamant that he has not shaded intelligence at all to fit what

President Trump wants. But there's a huge war going on over the exact role that Russia played, you know, obviously in the middle of the US elections, and the role it continues to play. She's going to be under a lot of pressure from both sides, the intelligence community and the administration to get this right. Fascinating. Nik Wadhams greatly appreciate your travels for Bloomberg News, and of course this reporting from the plane was Secretary Tillerson over the last

few days. Mr Wadhams is our foreign policy reporter in Washington. We think Martin Schenker as well, particularly Marty pointing out the hearings that are to come with the new Secretary of State. Mr Pompeio wanted to bring you now a gentleman that we opened the year with with his top Rists of the Year, Ian Bremer of Eurasia Group. Dr Bremer, thank you for making time with us today. Frankly, this instability within six Pennsylvania Avenue and the administration was one

of your risks this year. We're not surprised, though, are we. Uh No, And let's keep in mind that you know the initial firings, which you know are at an unprecedented level. Uh. Senior posts worried about something like almost double that we've seen any any modern day administration in the first year. But most of those that were forced out early were people that really were not competent to govern needed to

be out. We're problematic for a bunch of reasons. Most recently the Gary Cone and now Rex Tillerson removals are actually very different. These are people that are clearly very competent, lots of experience, Uh maybe maybe not the best fits for the administration for lots of reasons, and certainly king with their own problems, but will make it harder to

do them. Ian, do you just assume that Secretary of State Pompeo, if he's more aligned with President Trump, will have a State Department that is ever more empty than the one that Secretary of State Tillerson enjoyed. No, I wouldn't assume that. I mean tell us it was truly loathed by the diplomats. Uh. He kept his own counsel, a very small basically kitchen cabinet within State, and people he brought over from his days at X on Mobile. Uh,

there was enormous Uh. You know, I had to do with more of his management style, and I suspect Pompeo is not going to do much force might do a little better on that front and on the people around him immediately around him issue. The issue had much more to do with the actual policies, to listen, has a lot of experience dealing with difficult leaders all over the world. Um, he had been a moderating force and a fairly independent force on trade, on trade with China, on North Korean negotiations,

on the Iran deal, on Russia. Pompeo will be none of those things. Will be you geological hawkus and much willing to do whatever Trump wants. Here the bell there markets open up a hundred and zero five Ian bremer Ian. If I know Pim Fox wants to jump in here, if I can play off your new book, US versus Them, the failure of globalism, US versus them, the failure of our foreign policy. What does Secretary of State Pompeio need to fix day one? Uh, He's not gonna fix anything

they want. That's not why he's being brought in. I mean, you know, you now have a president that is saying he's going to meet with Kim Jong run um and wants to play nice if that works, but if he doesn't, he's prepared to become a hard line. Pompeo, I think, doubles down on that message. You have an Iran deal, the Trump says he wants it better or he wants to break it. By May, Pompeo doubles down on that.

He creates a much more binary set of outcomes that either the US gets it the way we want on all of these issues, or you're going to see a considerably more hawkish policy. Um. Trump might consider that fixed in the sense that it's more of what Trump wants, but it's much more dangerous world it's and it's more volatile for the market. And just a little bit more on Mike Pompeo graduated first in his class at West Point. His law degree at Harvard and was a congressman from Kansas.

He also desires regime change in North Korea. What's his position going to be as the President prepares for his historic meeting with Kim Jong Long of North Korea? Well, again, I mean, I think if you're Pumpel in this environment, you know the reason you're being brought in is to tell Trump that you're right about everything. So it's much

more like Lightheiser as US trade representatives. It's hearing what Trump wants and figuring out a way to deliver that message to others and get it back to the Boss. So you're never gonna see him making statements on television which you're not aligned with Trump. He'll be much more like Minute And in that regard and on and because we're gonna be talking a lot about North Korea going forward, he's gonna be a hot He's gonna be one saying um that if we don't see a path or deuterization,

the military option is on the table. You never hate that he's gonna be one talking about maximum sanctions and pressure until we get something from Kim Jong lend he makes it more likely that the North Koreans offer something substantive, but he also makes it more likely the talks breakdown or even never happen. What has been his role at the at the Central Intelligence Agency? Has it changed under the direction of Mr Pompeo. Uh, you know, I think

that it's been pretty aggressive in terms of counter terrorism efforts. UH. Certainly support for an expanded US presents internationally in places where we're going with bad actors. UM. You've seen that in American support for the saudiast on Yemen. Pompeo has played a significant role there. A lot of people say that to war the Americans shouldn't be involved in. I think Pompeo's position is these are bad guys. They need to take military and intelligence efforts everything we can. We

need to hit them hard. Also, Pompeo's replacement in c i A UH was in charge of one of the most important black side CIA operated UM, you know, with lots of enhanced interrogation techniques. Again, what you're seeing is a move towards a more focus, more certaive American foreign policy, but more in the lateral as well. Well. In that context, Mike Pompeo was in charge of the Counterintelligence Mission Center.

I believe right. This is at the CIA, and that's the department which began the investigation into possible links between associates of Donald Trump and Russian officials. Yeah, I mean, I get. I think that what we're gonna see on Russia is very interesting to watch. That Trump removed Tillerson.

By the last thing we heard from Tillison were a couple of very strong statements that the United States fully supported um Theresa May uh in the belief that the Russians were behind these nerve agent attacks against British nationals, that the Americans would support action against Russia. UM. Pillison's also supported sanctions against Russia expanding Uh. The White House has absolutely refused to mention the Russians explicit regists. I think that Pompeo will know way took a hard wine

on Moscow unless we see a shift from Trump going forward. Um. That's it's very clear we're going to see no daylight between these two. Well, can you tell us about his relationship with James Madis, Secretary of Defense and specifically the military's awareness of climate change as a as a threat to US security. That doesn't seem to be consistent with Mr Pompeo's views, it's not. But having said that, Madis's views have not been consistent with much of the Trump

in the race. And Madis been very good at not getting in the limelight, not making big statements that he's going to get criticized for UM and UH and and I think that keeping his own counsel UH. The morale at the Pentagon, unlike the State Department on the Tilliston, has been very high. Maddis as one of the generals, has held in very high refused by both both Trump

and the White House. I actually think everyone that talked about a suicide path that the past and was gone, that Maddis was gone to I think that was complete b speculation that we time mad Dr Bremer. One more question, if we could generous of your time this morning the President Tilts and his recent comments I don't know you've seen, I mean towards Iran. How will our relationship with Iran

change and does that provide for further Middle East instability? Well, there's been a lot of negotiation with Killerson and with his advisors, with the Europeans transpiring the way to UM continue to ensure that the Iranians will not be able to develop nuclear capacity at the end of the tenure period. Other words, strengthen uh de termined it the deal without

breaking the deal. Um. I think that Pompeo is going to be less interested um in that path, is going to be more interest in trying to bring the iranience back to the table to change or break the deal. Like with North Korea, it's a more digital and it's a more risky out. The new book Us versus then the failure of globalization. Ian Bremer with us this morning. We're honored now him to bring in George Friedman with us. Really really, uh, I think this is a timely interview. Pim.

Why don't you bring in Mr Freedman with geopolitical futures on defense and how it links into the State Department. Well, just let him go ahead and tell us what he thinks about this new appointment of Mike Pompeio as our u S Secretary of State. George Freedman, your thoughts not very important at all. Uh. First, this president's which is people around. Secondly, a large number of presidents, most of

them are their own secretaries of state. Trump just made a decision, really radical decision to go to North Korea to meet with Kim on a major crisis. Uh. He obviously doesn't feel that Tillerson is prepared to take you know, the he's kind of changes. Tillersen is a very conservative player, and he wants somebody backing him who is going to be more in tune with him. But I mean, in terms of foreign policy, I mean Trump is very, very radical.

I mean, any other presidents who said, look, I'm not going to go to war with North Korea, I'm going to talk to them, well be praised a high heaven. Uh. In this case, of course, everything he does is going to be condemned. But in general, he's had a very conservative foreign policy. Tillerson has backed it, but he loves shifting personnel around for whatever reason. So in general, the Tillerson leaving doesn't mean a whole lot. Pompeo coming in doesn't mean a whole lot. Trump is running the show.

If that's the case, If President Trump is running the show, why would Mike Pompeo want this job. Well, to be called Secretary of State means a lot. Pompeo seems to be closer to the President this week than the other. But there have been a lot of press who have been whose nowhere to the Secretary of States. When Henry Kissinger went to China to open China, William Rodgers, whose Secretary of State, was never told that it was happening in The reason was it didn't trust the State's Department,

not the leak. What George treatment from where you set with your defense abilities? What is the linkage of our State Department with our defense department? Is that overdone? Is it overrated? Or is there a real tangible working relationship between the two Well depend on the level. There's lots of routine things going on that they work together on. They have different perspectives on the world at different missions,

different jobs. But this president and other presidents had felt that they could not trust the State Department to follow their policies. The State Department has a reputation earned or not that they have a view of the world and whatever the president says, they're going to go and do it. And so in many administrations, the State Department has been cut out. They have been left with the routine things, but the major breakthroughs they haven't touched. Killerson was told

to cut the State Department. The budget has been cut. We'll see what happens with that, But I mean there's always been attention between the Defense Department's view of the world, the State department ze of the world, and the CIA's department of the world due the world, and good presidents have always allowed that to go on, and you know, try to have a foreign policy that kind of combines the two at that level. So in this particular case,

this president doesn't trust the State Department. He clearly trust the Defense Department, and he has a love hate relationship the Sea. The most one of the more more important books that you put out is the Flashpoints the emerging crisis in Europe. What do you expect Mike Pompeio to contribute to the alleviation of any crisis in Europe? Well,

the crisis in Europe is a European crisis. Uh. Their failure to deal with the two thousand eight crisis has generated fragmentation among nations, bricksit being only the most visible and within nation the rise of nationalist movements. There's the United States has not touched the European situation by and large, there's nothing we can do and the Europeans wouldn't respond.

So when we talk about the crisis in Europe, it is the crisis, the fact the EU is failing, failing is an entity, and that it's kicked off a political crisis where even the Germans don't have a coherent government. So it's an internal process that really doesn't affect us. One of the things. Remember Trump, oddly enough, he's pulled back from being responsible for the world. George Freeman, thank you so much. That geopolitical futures greatly appreciate the time

today on short notice. We're there. Economic data, Vincent del Judas, good morning time. The consumer price indext the CPI February, both the headline and the core rising at a slower pace than the prior month, both up point two percent c p I in the core month over month February up point two percent year over year. We see a little bit of a pickup in the CPI two point two percent versus two point one, but the all important core year over year holding steady at one point eight percent.

I'm Vinnydale Juda, so let's go back to New York. Vinny, thank you very much. The number bang in line, the market going nowhere. Treasuries unchanged, the US tenure at two six, pretty much unchanged on the session. Euro dollar unchanged off the back of this as well. At one fifty two, we're up about a tenth of one percent. That we do start to climb a little bit higher on euro

dollar now by about two tents of one percent. A very marginal reaction in the f facts market, a weak dollar story, and a very small reaction in the bond market, which just a tiny bit coming into thrice ras Now drama here, Michael McKay, Blind Black's very joining us in the studio in New York. No drama in the numbers, Mike, No, I'm straining here to find something exciting to talk about. We did see a small decline and energy prices that

probably has to do with seasonals. Energy prices did not rise as much as they usually do during the month. They're kind of flat, uh down to a certain extent. Gasoline prices where so you get a one tenth rise that's certainly shaved some off. But almost every category was up, which is something that will you know, encourage the the inflation hawks. But not up by much. I mean, cannot

change significantly from January. But Michael McKee, if Mark Mobius, legendary investor per chance, was here, he would tell me Tom do what the cf as do. Run the smooth moving averages, exponential or simple. I run simple moving averages. Mike mr Mobius always runs exponential moving averages. The vectors going up. But we can't break out of the moving averages that we saw four years ago or longer ago, you know, pre crisis. All this. Where's the breakout? Where's

the breakout? Breakout? It's on about the fifteen of April when we get the CPI numbers for March. Is that a base effect issure effect issue? But what you're seeing here is inflation starting to rise across the board. A lot of things are moving up in price. And we used to have a much more uh stratified, you know, diversified thing where if some things went up, something you down. Most most are going up, they're just not going up by much. I mean, airline fares rose by six tenths

during a month. Um the motor vehicle insurance last month was a big deal because it was up one point three percent. Was at one point seven percent this time. So you're you're still seeing a lot more stuff going up. We're going to hear a lot about goldilocks in the days to come. Michael McKey because this is fertile ground for for risk assets in the minds of a lot

of people. Inflation, Yes, things are moving high, they're drifting higher, but it's so gradual and the pressure is so subdued that what you see in terms of reaction on the screen today, Tom, it's not in effect. It's not in the bond market, it's in the equity market. Equity future is really spiked off the back of that inflation print. It's the fear of inflation, Michael, is what's gripping investors.

And I guess this report this morning says, at least for now, nothing to fear, though as you've pointed out, next month, in the month after that could be quite critical in the next move fear itself, Tom, And we're talking about this on surveillance television this morning. Uh, the idea that the markets are really really terrified of inflation out there, but it's going to be very gradual and it's not going to be the inlation of your past. Mike McKee, Thank you so much. Much more on this

in the coming weeks. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts. SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene before the podcast. You can always catch us worldwide. I'm Bloomberg Radio