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Bloomberg Audio Studios, podcasts, radio news. 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.

You're now six and a half weeks into the Trump administration. Keeping in mind, this is a president who, during the first term of his presidency liked to use the stock market as a barometer of how he's doing. The barometer right now probably isn't sending ultra positive signals, though, and this is actually something that was asked of the Press Secretary Caroline Levitt during a briefing yesterday.

You're now six and a half weeks into the Trump administration. Keeping in mind, this is a president who, during the first term of his presidency liked to use the stock market as a barometer of how he's doing. The barometer right now probably isn't sending ultra positive signals, though, and this is actually something that was asked of the Press Secretary Caroline Levitt during a briefing yesterday.

President Trump has made clear, Caroline, but he loves tariffs, but the stock market does not.

President Trump has made clear, Caroline, but he loves tariffs, but the stock market does not.

How does he factor that into his decision making.

How does he factor that into his decision making.

I think for folks on Wall Street who may be concerned, look at what this president did for you in his first term. Wall Street boomed, stock market boomed. The president expects that to happen again. But most importantly, Main Street is going to boom. And that's why the president has this whole of government economic approach, which includes tax cuts, tariffs, regulation cuts in an energy industry that will bring down costs for American consumers.

I think for folks on Wall Street who may be concerned, look at what this president did for you in his first term. Wall Street boomed, stock market boomed. The president expects that to happen again. But most importantly, Main Street is going to boom. And that's why the president has this whole of government economic approach, which includes tax cuts, tariffs, regulation cuts in an energy industry that will bring down costs for American consumers.

Well, it just isn't happening yet.

Well, it just isn't happening yet.

Markets have taken us on quite a round trip back in time to before the election. And that's where we start our conversation with Michael McKee, Bloomberg's International Economics and Policy correspondence with us from World Headquarters in New York. Michael, of course, you're forte is the economy. You can speak to the data today, whether it's the trade gap, whether it's challenger jobs. You know, the federal workers are going to start showing up in the jobs reports at some point, even if it's not in the monthly reading tomorrow. But what happened to animal spirits? I thought Wall Street was excited for this.

Markets have taken us on quite a round trip back in time to before the election. And that's where we start our conversation with Michael McKee, Bloomberg's International Economics and Policy correspondence with us from World Headquarters in New York. Michael, of course, you're forte is the economy. You can speak to the data today, whether it's the trade gap, whether it's challenger jobs. You know, the federal workers are going to start showing up in the jobs reports at some point, even if it's not in the monthly reading tomorrow. But what happened to animal spirits? I thought Wall Street was excited for this.

That's a good question.

That's a good question.

I think basically where we are now is that the market got way ahead of itself and pe ratio went way up, and people started getting nervous about the possibility of something that would send the market lower. We had some disappointing earnings numbers from some of the biggest tech companies, and then you start to pile on all this other stuff, and people who are looking for black clouds are finding them on the horizon, and we certainly got some today With the economy. You mentioned the Challenger numbers. One hundred and twenty two thousand extra job cuts announced. Doesn't mean they'll all take place, but it caught Wall Street's attention, and we've had some other slow economic numbers this week, especially on the labor market front. So there's kind of a feeling out there that maybe this is a time when the economy is going to slow and that will push the markets down.

I think basically where we are now is that the market got way ahead of itself and pe ratio went way up, and people started getting nervous about the possibility of something that would send the market lower. We had some disappointing earnings numbers from some of the biggest tech companies, and then you start to pile on all this other stuff, and people who are looking for black clouds are finding them on the horizon, and we certainly got some today With the economy. You mentioned the Challenger numbers. One hundred and twenty two thousand extra job cuts announced. Doesn't mean they'll all take place, but it caught Wall Street's attention, and we've had some other slow economic numbers this week, especially on the labor market front. So there's kind of a feeling out there that maybe this is a time when the economy is going to slow and that will push the markets down.

But to Joe's point about when the reference date actually is for the jobs report, we're going to get tomorrow. Despite what we've seen in the Challenger figures, I believe that was up one hundred and three percent from the same levels last year. The DOGE cuts to the federal workforce are not going to really be evident in tomorrow's data, right, Mike.

But to Joe's point about when the reference date actually is for the jobs report, we're going to get tomorrow. Despite what we've seen in the Challenger figures, I believe that was up one hundred and three percent from the same levels last year. The DOGE cuts to the federal workforce are not going to really be evident in tomorrow's data, right, Mike.

Now, if you remember, Kaylee, the Valentine's Day president that a lot of people in the federal government got from the administration was a notice that they were being fired. But that was the fourteenth, and that was the last day of the data survey period for the BLS in the month of February, So we're not going to really see a huge impact from what's happened since then you'll get a much bigger impact in the March numbers when we get to April. So tomorrow could be sort of a headfake in the sense that we may get relatively solid growth. And historically February is a reasonably strong month, seasonal month for job growth. So if that is the case, then maybe we see the markets rebound a little bit tomorrow. But as you mentioned at the top of the show, it's all the back and forth that's really making people crazy this point.

Now, if you remember, Kaylee, the Valentine's Day president that a lot of people in the federal government got from the administration was a notice that they were being fired. But that was the fourteenth, and that was the last day of the data survey period for the BLS in the month of February, So we're not going to really see a huge impact from what's happened since then you'll get a much bigger impact in the March numbers when we get to April. So tomorrow could be sort of a headfake in the sense that we may get relatively solid growth. And historically February is a reasonably strong month, seasonal month for job growth. So if that is the case, then maybe we see the markets rebound a little bit tomorrow. But as you mentioned at the top of the show, it's all the back and forth that's really making people crazy this point.

So what is the thought at the moment here among economists on tariffs? And I'll I guess i'lask again in five minutes maybe when this changes.

So what is the thought at the moment here among economists on tariffs? And I'll I guess i'lask again in five minutes maybe when this changes.

But we woke up to a.

But we woke up to a.

World this morning where there maybe wouldn't be all that many terriffs.

World this morning where there maybe wouldn't be all that many terriffs.

The USMCA was there for a reason.

The USMCA was there for a reason.

I guess we'll acknowledge that with Mexico, we've already got autos carved out.

I guess we'll acknowledge that with Mexico, we've already got autos carved out.

With Canada. Is this getting better.

With Canada. Is this getting better.

Better?

Better?

Being a relative term, it is fair enough getting a little lighter, put it that way. And now you know he said he told President Sheenbauma Mexico that they're not going to tear off anything that is covered under US MCA because Mexico doesn't tear of US under that and the same would be true for Canada. Although he hasn't announced it yet, there seems to be some sort of additional animus with the with the Canadians. But the problem is he's still talking about and his spokesmen are still talking about the idea of major tariffs coming on in the future, particularly this April second date. Howard Lutnik was out today talking about these are what we have now is just teentanyl related and the big tariffs are coming on April second. Scott Bessant the short time ago saying we're looking for the tariffs on April second to raise a lot of revenue. And so you can't plan. You just have to assume that something's going to happen and you don't know what.

Being a relative term, it is fair enough getting a little lighter, put it that way. And now you know he said he told President Sheenbauma Mexico that they're not going to tear off anything that is covered under US MCA because Mexico doesn't tear of US under that and the same would be true for Canada. Although he hasn't announced it yet, there seems to be some sort of additional animus with the with the Canadians. But the problem is he's still talking about and his spokesmen are still talking about the idea of major tariffs coming on in the future, particularly this April second date. Howard Lutnik was out today talking about these are what we have now is just teentanyl related and the big tariffs are coming on April second. Scott Bessant the short time ago saying we're looking for the tariffs on April second to raise a lot of revenue. And so you can't plan. You just have to assume that something's going to happen and you don't know what.

Well, you might not be able to plan, but maybe importers are able to hedge. I think that's what's evident in the trade balance data we got today. As I mentioned the deficit widening to a record, is the value of imports in January mic rows ten percent. What does that indicate about where inventories will be. Assuming these tariffs are ultimately implemented, and if they stick around for some time, how long will it be until companies actually have to start eating the costs of those imported goods given everything they tried to buy in advance, Well, most.

Well, you might not be able to plan, but maybe importers are able to hedge. I think that's what's evident in the trade balance data we got today. As I mentioned the deficit widening to a record, is the value of imports in January mic rows ten percent. What does that indicate about where inventories will be. Assuming these tariffs are ultimately implemented, and if they stick around for some time, how long will it be until companies actually have to start eating the costs of those imported goods given everything they tried to buy in advance, Well, most.

Of the buying in advance seems to have been in industrial supplies, things that go into making other things, and so it maybe a little while. Metal products were a big category there, and that could imply metal products coming in from Canada that go into cars, and so maybe some of these dire predictions of how high car prices could go will be held off for a while. But they're also there was also a rise in consumer goods. Now it's not clear which kind yet, we don't know whether they meant bringing in clothing or toys or just what Those are lower dollar dollar values, so they may not have as much of an impact, but you're right it may postpone some of the pain for some time. Although when you talk to FED officials, as we talked to John Williams from the New York Fed earlier this week, so companies are saying they're prepared to take advantage of this if prices for their inputs go up, they're going to raise prices on American consumers.

Of the buying in advance seems to have been in industrial supplies, things that go into making other things, and so it maybe a little while. Metal products were a big category there, and that could imply metal products coming in from Canada that go into cars, and so maybe some of these dire predictions of how high car prices could go will be held off for a while. But they're also there was also a rise in consumer goods. Now it's not clear which kind yet, we don't know whether they meant bringing in clothing or toys or just what Those are lower dollar dollar values, so they may not have as much of an impact, but you're right it may postpone some of the pain for some time. Although when you talk to FED officials, as we talked to John Williams from the New York Fed earlier this week, so companies are saying they're prepared to take advantage of this if prices for their inputs go up, they're going to raise prices on American consumers.

So we have that to look forward to, going to try to flex that pricing power. Bloomberg's Michael McKee, thank you so much. Of course, we'll be hearing more from the fedis in the aftermath of tomorrow's jobs report too. When Jerome Pale speaks tomorrow, certainly a conversation will all be listening for, and we'll have it on Bloomberg TV and radio. But joining us right now on Bloomberg, I'm pleased to stay on balance of power. From Capitol Hills, Republican Congressman Ryan Mackenzie, who represents Pennsylvania's seventh district congressman, thank you for joining Joe Matthew and myself. I would love to know your reaction to the pullback. It seems we're already getting to tariffs that were implemented just days ago. What good does this chaos serve for American companies and American consumers?

So we have that to look forward to, going to try to flex that pricing power. Bloomberg's Michael McKee, thank you so much. Of course, we'll be hearing more from the fedis in the aftermath of tomorrow's jobs report too. When Jerome Pale speaks tomorrow, certainly a conversation will all be listening for, and we'll have it on Bloomberg TV and radio. But joining us right now on Bloomberg, I'm pleased to stay on balance of power. From Capitol Hills, Republican Congressman Ryan Mackenzie, who represents Pennsylvania's seventh district congressman, thank you for joining Joe Matthew and myself. I would love to know your reaction to the pullback. It seems we're already getting to tariffs that were implemented just days ago. What good does this chaos serve for American companies and American consumers?

Yeah, well, I think it's important that we shouldn't take tariffs off the table. They are an important tool in our toolbox of economic policy across the country. For far too long, they've actually been ruled out, and so I think it's appropriate that you put them on the table.

Yeah, well, I think it's important that we shouldn't take tariffs off the table. They are an important tool in our toolbox of economic policy across the country. For far too long, they've actually been ruled out, and so I think it's appropriate that you put them on the table.

Now.

Now.

We are going through the negotiation process, which there always will be ups and downs. We've seen the reaction from the Mexican gut president recently saying that she appreciates the pull back in the tariffs because they're going to continue to work on things. Ultimately, the goal is to make sure that we actually do bring down these barriers that are impeding the flow of goods out of America, hurting American manufacturers, bring down those barriers for everybody across the board, and if we can get that reciprocal agreement, that'll actually be something that will be long term more beneficial for American consumers.

We are going through the negotiation process, which there always will be ups and downs. We've seen the reaction from the Mexican gut president recently saying that she appreciates the pull back in the tariffs because they're going to continue to work on things. Ultimately, the goal is to make sure that we actually do bring down these barriers that are impeding the flow of goods out of America, hurting American manufacturers, bring down those barriers for everybody across the board, and if we can get that reciprocal agreement, that'll actually be something that will be long term more beneficial for American consumers.

In the meantime, Congressman, and welcome to Bloomberg. What should be the message to the markets here we're dealing with massive uncertainty in a stock market that has round tripped. We're all the way back now to where we were before the election. Is the message just hang on a little while better times are coming.

In the meantime, Congressman, and welcome to Bloomberg. What should be the message to the markets here we're dealing with massive uncertainty in a stock market that has round tripped. We're all the way back now to where we were before the election. Is the message just hang on a little while better times are coming.

Yeah.

Yeah.

I think the message is that we do have to show some caution and restraint when we're making these wild moves. I think it's a little premature, and so you know, I heard recently talk about a potential recession. I was asked a question about that. That is a long term two quarters of negative GDP growth. We haven't even seen that yet happening in one quarter. So I think people just need to slow down. I think there are fluctuations, a lot of that we know is driven by uncertainty. We understand that, and so in Congress we're looking to take swift action. We have a budget that is going to start moving next week to meet the March fourteenth deadline. Also with reconciliation, we took that critical first step recently here in Congress, and we want to make sure that we get these things done as quickly as possible so that we can bring back certainty to the markets, show them that Congress can operate on these critical issues that are important for the American economy, American workers and actually get some results and help our entire country. So we want to make sure that we're doing that as quickly as possible. You've seen that action here in Congress from Speaker Johnson. When people said it was not going to be possible to get that first piece of legislation through the House, we were able to do it now it's in the Senate, and those negotiations are going to happen. So I think urging and so showing restraint, saying don't move too quickly one direction or the other. Continue forward. There are a lot of positive economic indicators out there, and when I talk anecdotally to businesses all across our economy, people are saying that they're still very optimistic about America's future, and so they want to move forward. I think the presidency with Donald Trump was a huge boon to business because they were concerned that if Kamala Harris was in there, they were going to have significant pressure coming from the government in all kinds of areas. So that optimism is still out there. I'm not discouraged at all. So I think we just need to wait for tomorrow's job numbers and continue to hold tight on the tariffs.

I think the message is that we do have to show some caution and restraint when we're making these wild moves. I think it's a little premature, and so you know, I heard recently talk about a potential recession. I was asked a question about that. That is a long term two quarters of negative GDP growth. We haven't even seen that yet happening in one quarter. So I think people just need to slow down. I think there are fluctuations, a lot of that we know is driven by uncertainty. We understand that, and so in Congress we're looking to take swift action. We have a budget that is going to start moving next week to meet the March fourteenth deadline. Also with reconciliation, we took that critical first step recently here in Congress, and we want to make sure that we get these things done as quickly as possible so that we can bring back certainty to the markets, show them that Congress can operate on these critical issues that are important for the American economy, American workers and actually get some results and help our entire country. So we want to make sure that we're doing that as quickly as possible. You've seen that action here in Congress from Speaker Johnson. When people said it was not going to be possible to get that first piece of legislation through the House, we were able to do it now it's in the Senate, and those negotiations are going to happen. So I think urging and so showing restraint, saying don't move too quickly one direction or the other. Continue forward. There are a lot of positive economic indicators out there, and when I talk anecdotally to businesses all across our economy, people are saying that they're still very optimistic about America's future, and so they want to move forward. I think the presidency with Donald Trump was a huge boon to business because they were concerned that if Kamala Harris was in there, they were going to have significant pressure coming from the government in all kinds of areas. So that optimism is still out there. I'm not discouraged at all. So I think we just need to wait for tomorrow's job numbers and continue to hold tight on the tariffs.

On the steel industry, in particular in your state of Pennsylvania. What are you hearing from them, because we are expecting tariffs on steel and aluminum to go into effect next week.

On the steel industry, in particular in your state of Pennsylvania. What are you hearing from them, because we are expecting tariffs on steel and aluminum to go into effect next week.

Absolutely, So look what we're hearing is that people actually do tout and credit some past terrrifaction for maintaining that activity here in Pennsylvania, and so that is rightfully, so, we've seen China dumping their products into the market for years, and this was one way to guard against that. Obviously, they've taken routes to get around some of those tariffs, and we want to make sure that we are continuing to protect not only industries that are critical to America's economy, but also to our national security. And steel and aluminum are two of those industries. We cannot have people like China dumping products in purely not just undercut the wages, but actually to discourage American activity in an American investment in national security related industries. So again, we need to make sure that we have that protection in place we're appropriate so that we can actually have a strong American economy.

Absolutely, So look what we're hearing is that people actually do tout and credit some past terrrifaction for maintaining that activity here in Pennsylvania, and so that is rightfully, so, we've seen China dumping their products into the market for years, and this was one way to guard against that. Obviously, they've taken routes to get around some of those tariffs, and we want to make sure that we are continuing to protect not only industries that are critical to America's economy, but also to our national security. And steel and aluminum are two of those industries. We cannot have people like China dumping products in purely not just undercut the wages, but actually to discourage American activity in an American investment in national security related industries. So again, we need to make sure that we have that protection in place we're appropriate so that we can actually have a strong American economy.

Well, Congressman, our viewers and listeners should know you represent the seventh Congressional district of Pennsylvania that's home to Allentown, Bethlehem. Bethlehem Steel closed a lot of years ago. Well, tariffs like these help to preserve the industry in your district.

Well, Congressman, our viewers and listeners should know you represent the seventh Congressional district of Pennsylvania that's home to Allentown, Bethlehem. Bethlehem Steel closed a lot of years ago. Well, tariffs like these help to preserve the industry in your district.

Is that your point?

Is that your point?

Well, what I would say is, again there are reasonable applications of tariffs again to protect industries when somebody is dumping a product I think is a reasonable approach when somebody is doing something to impact negatively our national security also appropriate. And so what we are looking for ultimately is long term not only free trade, but we want fair trade. And so many of these instances with our allies, they have been imposing tariffs on us, hurting American producers for many years, stopping the flow of our goods going into their country. And so what we want to see is we want to see these barriers come down across the markets for all of our allies, and ultimately that will help American producers. So I think it's a little bit of a red flag or red herring that is put out there when people say that this is directly going to hurt Americans by putting these tariffs on. I question, why then, does somebody like Justin Trudeau in Canada say that they're going to take reciprocal action by increasing tariffs. That defies logic that they would be doing something in response that would be a negative impact in hurting their home consumers as well. But what this is about is a negotiation that we are going through right now. I think it is long overdue that we have this discussion in conversation, because ultimately, we want our goods to go into other markets without those kind of barriers. We want there to be low tariffs that would help American producers, would create American jobs, which would raise American wages as well. So ultimately we're going to get there, but this process is a negotiation.

Well, what I would say is, again there are reasonable applications of tariffs again to protect industries when somebody is dumping a product I think is a reasonable approach when somebody is doing something to impact negatively our national security also appropriate. And so what we are looking for ultimately is long term not only free trade, but we want fair trade. And so many of these instances with our allies, they have been imposing tariffs on us, hurting American producers for many years, stopping the flow of our goods going into their country. And so what we want to see is we want to see these barriers come down across the markets for all of our allies, and ultimately that will help American producers. So I think it's a little bit of a red flag or red herring that is put out there when people say that this is directly going to hurt Americans by putting these tariffs on. I question, why then, does somebody like Justin Trudeau in Canada say that they're going to take reciprocal action by increasing tariffs. That defies logic that they would be doing something in response that would be a negative impact in hurting their home consumers as well. But what this is about is a negotiation that we are going through right now. I think it is long overdue that we have this discussion in conversation, because ultimately, we want our goods to go into other markets without those kind of barriers. We want there to be low tariffs that would help American producers, would create American jobs, which would raise American wages as well. So ultimately we're going to get there, but this process is a negotiation.

And Congressmen, on a separate note, given your seat on the Committee on Education and the Workforce, there had been reporting today that the President this afternoon could sign an executive order for the dismantling of the Department of Education. The White House has pushed back on that notion a bit, but fundamentally, is that a job for the President of the United States or should that be left to you and your colleagues.

And Congressmen, on a separate note, given your seat on the Committee on Education and the Workforce, there had been reporting today that the President this afternoon could sign an executive order for the dismantling of the Department of Education. The White House has pushed back on that notion a bit, but fundamentally, is that a job for the President of the United States or should that be left to you and your colleagues.

In Yeah, so that would be something that should come through Congress. So we've heard the same reports, haven't seen the actual language on something like that if it's even going to happen. So again, ultimately that should reside in Congress, and we're going to make sure that on education in the workforce, we do everything that we possibly can to protect American workers, promote education, skills, trainings, workforce development. We need all of that in this era because as markets are transitioning. We want to make sure that our workers and our economy is best suited to compete globally.

In Yeah, so that would be something that should come through Congress. So we've heard the same reports, haven't seen the actual language on something like that if it's even going to happen. So again, ultimately that should reside in Congress, and we're going to make sure that on education in the workforce, we do everything that we possibly can to protect American workers, promote education, skills, trainings, workforce development. We need all of that in this era because as markets are transitioning. We want to make sure that our workers and our economy is best suited to compete globally.

Congressman, we've only got a minute left. I don't want to set you up to have to cut you off, but we're nine days out. Will we avoid a government shutdown? Will you have the cooperation of your full conference and maybe a couple Democrats to keep the lights on.

Congressman, we've only got a minute left. I don't want to set you up to have to cut you off, but we're nine days out. Will we avoid a government shutdown? Will you have the cooperation of your full conference and maybe a couple Democrats to keep the lights on.

I'm confident that we are going to avoid a shutdown, And the reason for that is because I think, as we just talked, when changes are being made via executive action in executive order, in many instances, those are things that actually need to be put into LEDGIS. So right now where we are as a conference is that we believe any of these changes that need to be done legislatively, that takes a lot of time. So we need to slow down on some of those things and ultimately give ourselves the breathing room the ability to put that into a budget if we choose to do that in September or the end of the year, and so a continuing resolution would bridge that gap get us to that point later in the year where we could make those decisions. So again, I think We're going to avoid the shutdown now and then consider Thomas Horn.

I'm confident that we are going to avoid a shutdown, And the reason for that is because I think, as we just talked, when changes are being made via executive action in executive order, in many instances, those are things that actually need to be put into LEDGIS. So right now where we are as a conference is that we believe any of these changes that need to be done legislatively, that takes a lot of time. So we need to slow down on some of those things and ultimately give ourselves the breathing room the ability to put that into a budget if we choose to do that in September or the end of the year, and so a continuing resolution would bridge that gap get us to that point later in the year where we could make those decisions. So again, I think We're going to avoid the shutdown now and then consider Thomas Horn.

Ryan mackenzie, Republican from Pennsylvania. Come see us again. This is Bloomberg.

Ryan mackenzie, Republican from Pennsylvania. Come see us again. This is Bloomberg.

You're listening to the Bloomberg Balance of Power podcasts. 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 play Bloomberg eleven thirty over.

You're listening to the Bloomberg Balance of Power podcasts. 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 play Bloomberg eleven thirty over.

We are live in Washington, where things are changing fast, at least when it comes to the narrative around tariffs. As yes, President Trump has said at least until April second, Mexico and goods under the USMCA agreement will be exempt from the twenty five percent tariff that was just implemented on Tuesday, as he talked about Tuesday night. But he also on Tuesday night reiterated that April second is still the date that reciprocal tariffs will go into place, which is why Mexico's reprieve could end up being short lived. And who knows at this point about Canada. But on the subject of what we heard from the President Tuesday night, his voice. Of course, Joe was not the only one that was heard in the House chamber during that addressed to a joint session of Congress. At times there were boos and shouts of lives from Democrats, but none more vocal than Democratic Congressman Al Green of Texas, who actually had to be escorted from the House floor.

We are live in Washington, where things are changing fast, at least when it comes to the narrative around tariffs. As yes, President Trump has said at least until April second, Mexico and goods under the USMCA agreement will be exempt from the twenty five percent tariff that was just implemented on Tuesday, as he talked about Tuesday night. But he also on Tuesday night reiterated that April second is still the date that reciprocal tariffs will go into place, which is why Mexico's reprieve could end up being short lived. And who knows at this point about Canada. But on the subject of what we heard from the President Tuesday night, his voice. Of course, Joe was not the only one that was heard in the House chamber during that addressed to a joint session of Congress. At times there were boos and shouts of lives from Democrats, but none more vocal than Democratic Congressman Al Green of Texas, who actually had to be escorted from the House floor.

Yeah, he was thrown out of the House and now censured formally, which is a pretty remarkable moment. Going back to Joe, Wilson was not formally censured. There was a reprimand following the ulied moment, but people were really upset about this. And the part that's got my attention is less the outcome of the vote, more the fact that ten Democrats.

Yeah, he was thrown out of the House and now censured formally, which is a pretty remarkable moment. Going back to Joe, Wilson was not formally censured. There was a reprimand following the ulied moment, but people were really upset about this. And the part that's got my attention is less the outcome of the vote, more the fact that ten Democrats.

Voted for censure.

Voted for censure.

Here now Democrats, or some of them, are at least just singing we shall overcome in the well of the Senate while Tom Swazi, Marie Glusen Camp, several others.

Here now Democrats, or some of them, are at least just singing we shall overcome in the well of the Senate while Tom Swazi, Marie Glusen Camp, several others.

Here, Jim Himes, Jim Heins.

Here, Jim Himes, Jim Heins.

Tommy Barras surprised me a little bit, but in some cases, looking to make a point, Kaylee, they thought the protest was inappropriate.

Tommy Barras surprised me a little bit, but in some cases, looking to make a point, Kaylee, they thought the protest was inappropriate.

Yeah, keeping in mind the Democratic leadership had signaled to members in advance of Trump's address that they needed to keep their cool. Remained stoic as the President spoke clearly that is not actually the outcome that we saw.

Yeah, keeping in mind the Democratic leadership had signaled to members in advance of Trump's address that they needed to keep their cool. Remained stoic as the President spoke clearly that is not actually the outcome that we saw.

Well, we're not going to do the whole panel on this, but we do want to get our panelist view here because it just happened. John Seaton, a Republican strategist, is back with us today CEO founder Echo Canyon Consulting, alongside Brad Howard, the force behind the Corcoran Street Group here are democratic strategist.

Well, we're not going to do the whole panel on this, but we do want to get our panelist view here because it just happened. John Seaton, a Republican strategist, is back with us today CEO founder Echo Canyon Consulting, alongside Brad Howard, the force behind the Corcoran Street Group here are democratic strategist.

Great to have both of you, gentlemen with us here.

Great to have both of you, gentlemen with us here.

Brad talked to me ten Democrats, what were they thinking when they voted to CenTra al Did this need to happen?

Brad talked to me ten Democrats, what were they thinking when they voted to CenTra al Did this need to happen?

No? No, the cincher did not need to happen.

No? No, the cincher did not need to happen.

I mean, it's ridiculous because of what we saw when Biden was president. Uh and you know, between Marjorie Taylor Green and Lauren Bobert and going on all the way back to Joe Wilson, you know, uh, he's just outrageous and Marie and uh, Marjorie Taylor Green did it several times throughout Biden's speech, and the last one. It wasn't just like a one off thing. So No, the center did not need to happen. But however, if I were a chieve of staff to a moderate blue dog member of Congress or a new DIM, I would have said, yes, vote to censure, like because you shouldn't do that, and like the Democrats have got to have a reconcilt, Like we've got to reconcile if we're gonna be the party that's consistently defending kind of like the not morallity, but like the kind of good behavior, the professionalism and being members of Congress of you know, what the Republicans are doing is shredding decency and et cetera.

I mean, it's ridiculous because of what we saw when Biden was president. Uh and you know, between Marjorie Taylor Green and Lauren Bobert and going on all the way back to Joe Wilson, you know, uh, he's just outrageous and Marie and uh, Marjorie Taylor Green did it several times throughout Biden's speech, and the last one. It wasn't just like a one off thing. So No, the center did not need to happen. But however, if I were a chieve of staff to a moderate blue dog member of Congress or a new DIM, I would have said, yes, vote to censure, like because you shouldn't do that, and like the Democrats have got to have a reconcilt, Like we've got to reconcile if we're gonna be the party that's consistently defending kind of like the not morallity, but like the kind of good behavior, the professionalism and being members of Congress of you know, what the Republicans are doing is shredding decency and et cetera.

Then we've got to call out things like this.

Then we've got to call out things like this.

And when you look at it in a vacuum, did he do something he shouldn't have done?

And when you look at it in a vacuum, did he do something he shouldn't have done?

Yes?

Yes?

Did he stop when they asked him to do? No, Therefore he was removed and should be censured. And Mike, I get that that's unpopular thing on the left because of the hypocrisy, but like you've got to take these things at the moment in time.

Did he stop when they asked him to do? No, Therefore he was removed and should be censured. And Mike, I get that that's unpopular thing on the left because of the hypocrisy, but like you've got to take these things at the moment in time.

It's a political game, like it's you know, and like, don't do that again. M hmm.

It's a political game, like it's you know, and like, don't do that again. M hmm.

Happen well, And regardless of the reason though John our censure is getting a little too popular in the modern day House of Representatives.

Happen well, And regardless of the reason though John our censure is getting a little too popular in the modern day House of Representatives.

You know, I I do think that it loses its its impact or its import after after it's kind of used as a tool so much. And and the one thing I think maybe some people myself included forgot about a President Trump is that things move so fast. I'm guessing that Congressman Green, this censure, et cetera will be will be forgotten in in in very short course. Having said that, I mean, I do believe the bread. I agree with Brad that it's it's difficult. Democrats are in a difficult position. And look, I've been on the other side of a trifectus, so it can be very very challenging when you're the minority party to kind of figure out the right way to respond to policies and actions that you strongly disagree with. But if Democrats really do want to be the party that is at the kind of the party of norms and of governance, I think they really do need to do what they can to kind of shut down the kind of behavior that we saw on Tuesday night.

You know, I I do think that it loses its its impact or its import after after it's kind of used as a tool so much. And and the one thing I think maybe some people myself included forgot about a President Trump is that things move so fast. I'm guessing that Congressman Green, this censure, et cetera will be will be forgotten in in in very short course. Having said that, I mean, I do believe the bread. I agree with Brad that it's it's difficult. Democrats are in a difficult position. And look, I've been on the other side of a trifectus, so it can be very very challenging when you're the minority party to kind of figure out the right way to respond to policies and actions that you strongly disagree with. But if Democrats really do want to be the party that is at the kind of the party of norms and of governance, I think they really do need to do what they can to kind of shut down the kind of behavior that we saw on Tuesday night.

Well, the fact of the matter is they'll probably be raising money on it, probably already is because that's what Center does.

Well, the fact of the matter is they'll probably be raising money on it, probably already is because that's what Center does.

For you now, it makes you money.

For you now, it makes you money.

I want to ask you both about the budgeting process that's underway right now in the presence of Elon Musk. He was on the Hill to meet with members of both chambers yesterday and we spoke with a Senator Capito, Shelley Moore, Capito, Republican from West Virginia. Following her luncheon on the Senate side with Elon Musk, he then had dinner with House members.

I want to ask you both about the budgeting process that's underway right now in the presence of Elon Musk. He was on the Hill to meet with members of both chambers yesterday and we spoke with a Senator Capito, Shelley Moore, Capito, Republican from West Virginia. Following her luncheon on the Senate side with Elon Musk, he then had dinner with House members.

Here's what she said.

Here's what she said.

We just had lunch and Elon Musk was there, and if you listen to him, logically talk about some of the waste, fraud, and abuse that they found in systems such to Social Security, where fifteen people are getting paid off the same number, or fifteen checks are being sent off the same number, things that are make total common sense. This is where I think DOGE has been extremely helpful and will continue to be and even more so.

We just had lunch and Elon Musk was there, and if you listen to him, logically talk about some of the waste, fraud, and abuse that they found in systems such to Social Security, where fifteen people are getting paid off the same number, or fifteen checks are being sent off the same number, things that are make total common sense. This is where I think DOGE has been extremely helpful and will continue to be and even more so.

Brand I'll tell you though, you look at the wall of receipts and the trophies keep coming down, and I wonder if they've found enough money to save to make a difference in legislation. We don't even have to debate the doge or the authority of Elon Musk or the rest of it. Will they have the goods to help save money this budget season?

Brand I'll tell you though, you look at the wall of receipts and the trophies keep coming down, and I wonder if they've found enough money to save to make a difference in legislation. We don't even have to debate the doge or the authority of Elon Musk or the rest of it. Will they have the goods to help save money this budget season?

Well, look, let's be clear why they want to save money here. They want to save money so they can cut federal services for that people depend on to give tax cuts two billionaires. That's the whole point. We're trying to find these savings. But keep in mind, like the issue here is not I think what a lot of Democrats are frustrated by, and I'd say a lot of you're starting to see it at town halls from the average Americans too. It's not that they're cutting spending though I think there are some Democrats that oppose that, don't get me wrong, But I think a bulk of the bulk of Americans that were said about it, how they're doing it when you're gutting things like closing Social Security offices and gutting VA benefits. Uh. You know, the people that benefited the most from DEI hiring policy in the federal government were veterans. If you're a veteran, you bumped to the front bury top of the pack of the pole of resumes because you have you come with the security clearance.

Well, look, let's be clear why they want to save money here. They want to save money so they can cut federal services for that people depend on to give tax cuts two billionaires. That's the whole point. We're trying to find these savings. But keep in mind, like the issue here is not I think what a lot of Democrats are frustrated by, and I'd say a lot of you're starting to see it at town halls from the average Americans too. It's not that they're cutting spending though I think there are some Democrats that oppose that, don't get me wrong, But I think a bulk of the bulk of Americans that were said about it, how they're doing it when you're gutting things like closing Social Security offices and gutting VA benefits. Uh. You know, the people that benefited the most from DEI hiring policy in the federal government were veterans. If you're a veteran, you bumped to the front bury top of the pack of the pole of resumes because you have you come with the security clearance.

Typically you've been had of review.

Typically you've been had of review.

You you know, they have a lot about your information about you already, and you come with a specific skill set and you understand government, so you're a great hire. A ton of veterans got laid off and is that really the people we want to And even.

You you know, they have a lot about your information about you already, and you come with a specific skill set and you understand government, so you're a great hire. A ton of veterans got laid off and is that really the people we want to And even.

The White House advisor she said.

The White House advisor she said.

That they're questioning whether or not they even have the capability or capacity to have a job at this moment, which was incredibly insulting for veterans across the country. And by the way, veterans come from their service with this stigma that they're not quite adjusting to the private sector, which is part of the hurls they have in getting jobs, which is why the federal government said, if the private sector won't hire, you.

That they're questioning whether or not they even have the capability or capacity to have a job at this moment, which was incredibly insulting for veterans across the country. And by the way, veterans come from their service with this stigma that they're not quite adjusting to the private sector, which is part of the hurls they have in getting jobs, which is why the federal government said, if the private sector won't hire, you.

Come to us.

Come to us.

And so you've got it's a mess there how you're supposed to respond to these doze emails and job things. I got a buddy that works with FBI. He's like, it's so funny to watch. We'll get the elon Musk email and then next we'll get the cash Betel email and then like it's just a mess. I don't think anyone thinks this process has been efficient. I get they're trying to get efficiencies, but we haven't seen it yet. And by the way, you can't trust the numbers they're putting out. They're claiming eight billion when it was eight million. They're claiming people were on the payroll getting Social Security when they were two hundred, even though they were in the row rosters. There's an automatic cutoff at one hundred and twenty five. So like, they're kind of misrepresenting a lot of stuff here. And when you don't have an independent or other branch of government confirming this information, which is what Congress typically does, or to inspector general or GAO, then we're just having to take their word for it. And already they're full of inaccuracies and misstatements and lies.

And so you've got it's a mess there how you're supposed to respond to these doze emails and job things. I got a buddy that works with FBI. He's like, it's so funny to watch. We'll get the elon Musk email and then next we'll get the cash Betel email and then like it's just a mess. I don't think anyone thinks this process has been efficient. I get they're trying to get efficiencies, but we haven't seen it yet. And by the way, you can't trust the numbers they're putting out. They're claiming eight billion when it was eight million. They're claiming people were on the payroll getting Social Security when they were two hundred, even though they were in the row rosters. There's an automatic cutoff at one hundred and twenty five. So like, they're kind of misrepresenting a lot of stuff here. And when you don't have an independent or other branch of government confirming this information, which is what Congress typically does, or to inspector general or GAO, then we're just having to take their word for it. And already they're full of inaccuracies and misstatements and lies.

So, you know, I don't know what to think here.

So, you know, I don't know what to think here.

I welcome efficiencies, obviously, but this process has been anything but efficient.

I welcome efficiencies, obviously, but this process has been anything but efficient.

Well in the process, John is running into a little bit of a headwind. Headwind in our judicial system. You look at the Supreme Court ruling on usaid from yesterday, in which Chief Justice John Roberts and Conservative Justice Amy Coney Barrett ruled against the administration. We're seeing plenty of DOGE oriented or forcing DOGE pauses or rulings that it's not following the law in the lower courts as well. And we know that one of the things that senators shared in the room with Elon Musk yesterday is that he needs Congress to implement some of these cuts. He cannot do it alone or he's going to run into court challenges. Do you think there's going to be a recognition of that in the administration moving forward. Are they just going to keep plowing ahead and leaving it up to the judges to decide.

Well in the process, John is running into a little bit of a headwind. Headwind in our judicial system. You look at the Supreme Court ruling on usaid from yesterday, in which Chief Justice John Roberts and Conservative Justice Amy Coney Barrett ruled against the administration. We're seeing plenty of DOGE oriented or forcing DOGE pauses or rulings that it's not following the law in the lower courts as well. And we know that one of the things that senators shared in the room with Elon Musk yesterday is that he needs Congress to implement some of these cuts. He cannot do it alone or he's going to run into court challenges. Do you think there's going to be a recognition of that in the administration moving forward. Are they just going to keep plowing ahead and leaving it up to the judges to decide.

No.

No.

Look, I think the ultimate goal is going to stay the same, which is to find efficiencies to remove waste, fraud and abuse to ultimately save American taxpayers money in areas where there is perceived to be an overreach, there is a judicial system in place, there is a Republican majority in Congress. So I do think that progress will continue to be made to find some of these kind of egregious examples of waste fraud and brute abuse.

Look, I think the ultimate goal is going to stay the same, which is to find efficiencies to remove waste, fraud and abuse to ultimately save American taxpayers money in areas where there is perceived to be an overreach, there is a judicial system in place, there is a Republican majority in Congress. So I do think that progress will continue to be made to find some of these kind of egregious examples of waste fraud and brute abuse.

And listening to.

And listening to.

You know, democratic members of Congress and senators talk negatively about this and say, at the same time, while we all want efficiency, that's fine, but when there was a democratic trifecta not that long ago. I don't recall a whole lot of actions being taken to look for some of these inefficiencies to look for some of this waste, frauden abuse, and so yeah, Elon Musk is very very aggressive.

You know, democratic members of Congress and senators talk negatively about this and say, at the same time, while we all want efficiency, that's fine, but when there was a democratic trifecta not that long ago. I don't recall a whole lot of actions being taken to look for some of these inefficiencies to look for some of this waste, frauden abuse, and so yeah, Elon Musk is very very aggressive.

He's a very very.

He's a very very.

Smart guy, and he is going to you know, push as far as he possibly can. Where checks are needed, those will come into you know, will come into place. But I think the goal is ultimately going to stay the same, and I don't think DOGE as a concept is going anywhere as long as President Trump is in office.

Smart guy, and he is going to you know, push as far as he possibly can. Where checks are needed, those will come into you know, will come into place. But I think the goal is ultimately going to stay the same, and I don't think DOGE as a concept is going anywhere as long as President Trump is in office.

Remarkable headline here is the the GSA brad pulls more than four hundred and forty real estate sites off the market that had been put up for sale, some of them clearly should not have been on the list, as Bloomberg reports.

Remarkable headline here is the the GSA brad pulls more than four hundred and forty real estate sites off the market that had been put up for sale, some of them clearly should not have been on the list, as Bloomberg reports.

The inventory of.

The inventory of.

Properties included a specialized satellite facility for Noah, a three million square foot FDI research lab and this is a new one in Northern Virginia campus. I don't know if you saw this, Kayley that does not appear in federal property records because of its association and use by the CIA. They apparently outed a black op site in northern Virginia. Brad, what should be the fallout from this?

Properties included a specialized satellite facility for Noah, a three million square foot FDI research lab and this is a new one in Northern Virginia campus. I don't know if you saw this, Kayley that does not appear in federal property records because of its association and use by the CIA. They apparently outed a black op site in northern Virginia. Brad, what should be the fallout from this?

Well, I mean, this is my point, right, just like it's sloppy, it's the best. The The reason and the two reasons are going this fast, right is because number one, they've got to get the savings ahead of the end of the fiscal year so they can give them, they can pull these services and give them to billionaires. And they've got to do that by September thirtieth, that's the end of the fiscal year. And conversely, his special Elon Musk's special employment designation runs out I think in like one hundred and third and twenty days, so he's got to finish it before that.

Well, I mean, this is my point, right, just like it's sloppy, it's the best. The The reason and the two reasons are going this fast, right is because number one, they've got to get the savings ahead of the end of the fiscal year so they can give them, they can pull these services and give them to billionaires. And they've got to do that by September thirtieth, that's the end of the fiscal year. And conversely, his special Elon Musk's special employment designation runs out I think in like one hundred and third and twenty days, so he's got to finish it before that.

But this, look, this.

But this, look, this.

Is why there are processes in place to review these things.

Is why there are processes in place to review these things.

This is why the cuts typically take a long time.

This is why the cuts typically take a long time.

Is because there's so many sensitivities to Americans personal and private data, to our nation's secrets, to all this stuff. We've got to keep in mind that when you rush through and you're letting twenty two year olds run the thing, they don't have the capacity to understand that and take it all into account, all.

Is because there's so many sensitivities to Americans personal and private data, to our nation's secrets, to all this stuff. We've got to keep in mind that when you rush through and you're letting twenty two year olds run the thing, they don't have the capacity to understand that and take it all into account, all.

Right, Brad Howard and John Seaton, our political panel today. Thank you both so much for joining us on this Thursday in which we're seeing a deep cell off in the equity market. Stocks now at the lowest level since before election Day. We'll have more on that ahead on Bloomberg.

Right, Brad Howard and John Seaton, our political panel today. Thank you both so much for joining us on this Thursday in which we're seeing a deep cell off in the equity market. Stocks now at the lowest level since before election Day. We'll have more on that ahead on Bloomberg.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on almal Cockley and Android Otto with the Bloomberg Business app. Listen on demand wherever you get your podcast, or watch us live on YouTube.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on almal Cockley and Android Otto with the Bloomberg Business app. Listen on demand wherever you get your podcast, or watch us live on YouTube.

I am, indeed Kaylee lines alongside Joe Matthew in Washington where we are closely following the story on tariffs, the story on Department of Government efficiency, how all of it is translating into the economic data we're seeing, and how that's feeding through to what Charlie was just talking about. The markets today, the equity markets certainly not having a good one. And as Charlie promised, Nora me, Linda is here with us for more. She covers the stock market for Bloomberg. So, Nora, do we assign this to the data we're getting to the uncertainty around tariff policy, which arguably actually improved today with the at least delay of tariffs or over pri from tariffs on Mexico until April. Second, what actually is up here?

I am, indeed Kaylee lines alongside Joe Matthew in Washington where we are closely following the story on tariffs, the story on Department of Government efficiency, how all of it is translating into the economic data we're seeing, and how that's feeding through to what Charlie was just talking about. The markets today, the equity markets certainly not having a good one. And as Charlie promised, Nora me, Linda is here with us for more. She covers the stock market for Bloomberg. So, Nora, do we assign this to the data we're getting to the uncertainty around tariff policy, which arguably actually improved today with the at least delay of tariffs or over pri from tariffs on Mexico until April. Second, what actually is up here?

Well, Kaylee, this has truly been a very dizzying news cycle. As you clearly laid out here, we've got traders looking at not only economic data, but also they're monitoring these headlines that we're getting throughout the day about what the outlook for terrorifts might be and what the outlook could be for a potential global trade war. Here in some ways it feels like the federal reserves passed path forward is the last thing on trader's minds. We've got volatility really being the name of the game. We have analysts that are really pointing toward this idea that volatility seems to be the only certainty right now as we look at what things could look forward. If we look at the volatility index, the VIX index, that's Wall Street's fear gauge, it's sitting above the twenty handle at about twenty five right now. So that really tells you what investors are thinking right now.

Well, Kaylee, this has truly been a very dizzying news cycle. As you clearly laid out here, we've got traders looking at not only economic data, but also they're monitoring these headlines that we're getting throughout the day about what the outlook for terrorifts might be and what the outlook could be for a potential global trade war. Here in some ways it feels like the federal reserves passed path forward is the last thing on trader's minds. We've got volatility really being the name of the game. We have analysts that are really pointing toward this idea that volatility seems to be the only certainty right now as we look at what things could look forward. If we look at the volatility index, the VIX index, that's Wall Street's fear gauge, it's sitting above the twenty handle at about twenty five right now. So that really tells you what investors are thinking right now.

What are the analysts saying looking at the vics. It's the one green spot on my screen here of fifteen percent here, Norah back above twenty five. Are analysts telling clients to cool their heels, just wait or sell.

What are the analysts saying looking at the vics. It's the one green spot on my screen here of fifteen percent here, Norah back above twenty five. Are analysts telling clients to cool their heels, just wait or sell.

Well, Joe, I mean, that's really the question here. When you look at so many different areas of the market, there is a lot going on, But if we take a look under the hood, what's really been the uncertain point has been the tech sector. So we are seeing a pretty strong sell off in tech stocks today, and that's all kind of couch in this idea that what is the AI intelligence boom going to look like moving forward, especially as we think about deep seek of the news that came weeks ago, and then now as we're thinking about what the outlook could look like in terms of how Chinese companies are really boosting their AI and whether or not a lot of these US companies can stay afloat and stay in play.

Well, Joe, I mean, that's really the question here. When you look at so many different areas of the market, there is a lot going on, But if we take a look under the hood, what's really been the uncertain point has been the tech sector. So we are seeing a pretty strong sell off in tech stocks today, and that's all kind of couch in this idea that what is the AI intelligence boom going to look like moving forward, especially as we think about deep seek of the news that came weeks ago, and then now as we're thinking about what the outlook could look like in terms of how Chinese companies are really boosting their AI and whether or not a lot of these US companies can stay afloat and stay in play.

Here.

Here.

I want to ask you as well, Nora, because I know you cover home builders specifically, about what we've been seeing in rates which have actually moved lower, and you're seeing a pickup in mortgage applications. Mortgage rates themselves have moved down substantially. Is that translating into some positivity at least in the home oriented sectors of the market, And is that expected to continue.

I want to ask you as well, Nora, because I know you cover home builders specifically, about what we've been seeing in rates which have actually moved lower, and you're seeing a pickup in mortgage applications. Mortgage rates themselves have moved down substantially. Is that translating into some positivity at least in the home oriented sectors of the market, And is that expected to continue.

Frankly, well, Kelly, it's really mixed. I mean, as you mentioned, we do have some data that is a bit positive, if you can call it positive. When I last look more stiggage rates, we're sitting at about six point eight percent. But funnily enough, it's actually one of the more recent lows that we've seen when you think about mortgage rates. But as we think about the home building industry more broadly, we actually had Seaport Global Research at least a report where they actually upgraded home builders are seeing a twenty seven percent upside when we think about the outlook for the industry. But I mean, if you ask the average person and whether or not they're really interested in taking on a thirty year mortgage rate right now with the high rates, of course, the answer is a bit uncertain.

Frankly, well, Kelly, it's really mixed. I mean, as you mentioned, we do have some data that is a bit positive, if you can call it positive. When I last look more stiggage rates, we're sitting at about six point eight percent. But funnily enough, it's actually one of the more recent lows that we've seen when you think about mortgage rates. But as we think about the home building industry more broadly, we actually had Seaport Global Research at least a report where they actually upgraded home builders are seeing a twenty seven percent upside when we think about the outlook for the industry. But I mean, if you ask the average person and whether or not they're really interested in taking on a thirty year mortgage rate right now with the high rates, of course, the answer is a bit uncertain.

All right, Nora, thank you so much.

All right, Nora, thank you so much.

From world headquarters in New York, Normal Linda, Bloomberg Stock Market Reporter really helps to set the baseline for us for the conversation we're going to have next with Nathan Dean from Bloomberg Intelligence. Because tariffs are in the air today, we don't know exactly how this is going to land. With Canada, but Mexico's got the exemption. Canada has a partial exemption, at least with regard to auto's. Scott Besson, the Treasury Secretary, talked about it this morning at the Economic Club of New York.

From world headquarters in New York, Normal Linda, Bloomberg Stock Market Reporter really helps to set the baseline for us for the conversation we're going to have next with Nathan Dean from Bloomberg Intelligence. Because tariffs are in the air today, we don't know exactly how this is going to land. With Canada, but Mexico's got the exemption. Canada has a partial exemption, at least with regard to auto's. Scott Besson, the Treasury Secretary, talked about it this morning at the Economic Club of New York.

People say, oh, tariffs are very are a regressive tax? That well, are they a regressive tax if you then use the income from tariffs to no tax on tips, no tax on social Security, no tax on overtime, making auto own tax deductible. Those four policies with President Trump put forward during the campaign, all a crew to the bottom fifty percent of wage earners and working Americans.

People say, oh, tariffs are very are a regressive tax? That well, are they a regressive tax if you then use the income from tariffs to no tax on tips, no tax on social Security, no tax on overtime, making auto own tax deductible. Those four policies with President Trump put forward during the campaign, all a crew to the bottom fifty percent of wage earners and working Americans.

As we turn to the senior US policy analyst at Bloomberg Intelligence, Nathan Dean, whose phone has been ringing clients who have terminal subscriptions want to know what to do next.

As we turn to the senior US policy analyst at Bloomberg Intelligence, Nathan Dean, whose phone has been ringing clients who have terminal subscriptions want to know what to do next.

And boy, Nathan, great to see you again. You were here just yesterday.

And boy, Nathan, great to see you again. You were here just yesterday.

Because this keeps changing, you obviously can't make plans. The question is do you throw it all out because this market is back to where we were before the election.

Because this keeps changing, you obviously can't make plans. The question is do you throw it all out because this market is back to where we were before the election.

You know, we've been actually been coined this the Shokonhaf strategy for tariffs. I mean President Trump did this with his executive orders, and it looks like he's doing this with tariff's as well.

You know, we've been actually been coined this the Shokonhaf strategy for tariffs. I mean President Trump did this with his executive orders, and it looks like he's doing this with tariff's as well.

He makes a statement, he makes a you.

He makes a statement, he makes a you.

Know, we're going to put tariffs on Canada, Mexico. We're going to go twenty five percent. Well, then we delay it for thirty days. Well, then we're actually going to put it forth, and then now we're going to have an exemption for USMCA goods, like Award Lutnik was saying today, Mexico's now delayed till April second. So what we're telling our clients is that you have to prepare for these tariffs, but you also have to prepare for the scenario that they maybe a day or two later, you get this headline that says that, nah, maybe we're going to pare it down a little bit. But you know, there's a lot of uncertainty that's still coming with this. But what we do think is going to happen is April second, reciprocal tariffs are going to come. But then within the days after April second, then you'll see whatever negotiations take place and something that could potentially get into the White House to scale that back.

Know, we're going to put tariffs on Canada, Mexico. We're going to go twenty five percent. Well, then we delay it for thirty days. Well, then we're actually going to put it forth, and then now we're going to have an exemption for USMCA goods, like Award Lutnik was saying today, Mexico's now delayed till April second. So what we're telling our clients is that you have to prepare for these tariffs, but you also have to prepare for the scenario that they maybe a day or two later, you get this headline that says that, nah, maybe we're going to pare it down a little bit. But you know, there's a lot of uncertainty that's still coming with this. But what we do think is going to happen is April second, reciprocal tariffs are going to come. But then within the days after April second, then you'll see whatever negotiations take place and something that could potentially get into the White House to scale that back.

Well, so I feel like we've asked this question of political strategists this idea that do we run into a boy who cried wolf scenario eventually where it stops working as a negotiating tactic when everybody sees that you're willing to pull tariffs back and the threat doesn't last very long. And I wonder if it could be true for market participants as well, that they just stopped taking him at his word on tariff threats until they actually see it in action. They no longer try to discount that.

Well, so I feel like we've asked this question of political strategists this idea that do we run into a boy who cried wolf scenario eventually where it stops working as a negotiating tactic when everybody sees that you're willing to pull tariffs back and the threat doesn't last very long. And I wonder if it could be true for market participants as well, that they just stopped taking him at his word on tariff threats until they actually see it in action. They no longer try to discount that.

Yeah, and absolutely, I mean I think I think there are several people and then look, I know I've talked to several people in the last week that are taking that view as well, that look, these tariffs are never going to happen. We have this debate within BI, you know, just whether or not on odds, But you know, you have to prepare for him because there's only one person in this world that decides whether or not these tariffs go forward, and it's President Trump. And we have yet to meet a Trump whisper that can predict at one hundred percent certainty what is going to happen here. So you have to prepare scenario analysis, and that starts with preparing for these tariffs with the idea that potentially could come back, because look, we may do this on April first, and we may now have an extension of May first.

Yeah, and absolutely, I mean I think I think there are several people and then look, I know I've talked to several people in the last week that are taking that view as well, that look, these tariffs are never going to happen. We have this debate within BI, you know, just whether or not on odds, But you know, you have to prepare for him because there's only one person in this world that decides whether or not these tariffs go forward, and it's President Trump. And we have yet to meet a Trump whisper that can predict at one hundred percent certainty what is going to happen here. So you have to prepare scenario analysis, and that starts with preparing for these tariffs with the idea that potentially could come back, because look, we may do this on April first, and we may now have an extension of May first.

We just don't know, but you still have to prepare.

We just don't know, but you still have to prepare.

Well.

Well.

We're seeing a lot of front running ahead of any potential tariffs taking effect. And I don't want to try to fold you into being an economist here, but are you getting questions about this the increasing potential say for a week second half, because so much business was done to try to get ahead of the tariffs.

We're seeing a lot of front running ahead of any potential tariffs taking effect. And I don't want to try to fold you into being an economist here, but are you getting questions about this the increasing potential say for a week second half, because so much business was done to try to get ahead of the tariffs.

You know, at the tail end of twenty twenty four, the number one question I got, whether it was New York, London, Berlin, wherever, was when is the United States going to deal with the deficit? And that question remains today, and the question is said, are this year? I mean, but the question is you have Doge, you have tariffs, and you also have the House Republican plans to extend tax reform, which you know, assuming they use the baseline, could cost somewhere between four point five and even potentially higher. And so I think traders are looking at this holistically and they're trying to figure out, Okay, when is Washington going to get serious about the deficit?

You know, at the tail end of twenty twenty four, the number one question I got, whether it was New York, London, Berlin, wherever, was when is the United States going to deal with the deficit? And that question remains today, and the question is said, are this year? I mean, but the question is you have Doge, you have tariffs, and you also have the House Republican plans to extend tax reform, which you know, assuming they use the baseline, could cost somewhere between four point five and even potentially higher. And so I think traders are looking at this holistically and they're trying to figure out, Okay, when is Washington going to get serious about the deficit?

My response always back.

My response always back.

To the trader, is you tell me when you get you know, get worried, and we begin to see market moves.

To the trader, is you tell me when you get you know, get worried, and we begin to see market moves.

So the vigilantes need to come out.

So the vigilantes need to come out.

Well, we just haven't seen anything yet, and Washington is still going to proceed down this path. So you know, tariffs is a catalyst that's happening right now. You have the debt ceiling coming this summer that potentially could change the fixed income debate a.

Well, we just haven't seen anything yet, and Washington is still going to proceed down this path. So you know, tariffs is a catalyst that's happening right now. You have the debt ceiling coming this summer that potentially could change the fixed income debate a.

Little bit, and then you have the House Republican tax reform at the end.

Little bit, and then you have the House Republican tax reform at the end.

But at the end of the year, I'm still not one hundred percent confident that the deficits can be resolved well.

But at the end of the year, I'm still not one hundred percent confident that the deficits can be resolved well.

And before we even get to the debt ceiling or budget reconciliation, there's a shutdown looming potentially in just over a week, and no clear sign yet that they have a definitive plan that they know can pass to avert at Nathan, where are your odds right now?

And before we even get to the debt ceiling or budget reconciliation, there's a shutdown looming potentially in just over a week, and no clear sign yet that they have a definitive plan that they know can pass to avert at Nathan, where are your odds right now?

So I don't think that definitive plan is going to come until maybe March thirteenth, that like you know, ten pas etalent. But what we are telling our clients is we are at a forty percent chance of a shutdown assuming the Republicans push forward a clean CR. I don't think the Democrats are going to be able to stomach a shutdown if the Republicans push forward this clean CR. If the Republicans push forward a plan that codifies DOGE cuts or includes policy writers, then the odds.