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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.

We got two separate statements from spokes people for the White House yesterday in the aftermath of what was immense selling pressure taking stocks down to the lows of well before election day, In fact, the worst day we saw on the tech heavy Nasdaq one hundred going back to twenty twenty two, with no real direct remark from President Trump, no saying markets calm down.

We got two separate statements from spokes people for the White House yesterday in the aftermath of what was immense selling pressure taking stocks down to the lows of well before election day, In fact, the worst day we saw on the tech heavy Nasdaq one hundred going back to twenty twenty two, with no real direct remark from President Trump, no saying markets calm down.

My tariff policy won't actually that bet be that bad.

My tariff policy won't actually that bet be that bad.

Instead, actually what we got today was a doubling down on the thread of tariffs, at least in the case of Canada, going from a twenty five percent rate on steel and aluminum to now fifty percent, and.

Instead, actually what we got today was a doubling down on the thread of tariffs, at least in the case of Canada, going from a twenty five percent rate on steel and aluminum to now fifty percent, and.

A promise shut down the auto industry in Canada while he's at it, which we're pretty intertwined with here. These as you mentioned, Kayla, you're set to take effect at midnight, would be along with all the other countries facing steel and aluminum tariffs and a market that just doesn't know what to do with it. As we told you, the President will be speaking to the Business Roundtable a bit later on today. You were there when he spoke as a candidate. Very different world we're in, i'd say now, But the very same people who were expressing concern over policies like these will be there, and we're going to talk in a moment with Joe Lavorgnia, of course, former Trump economic advisor. First, Laura Davison, Bloomberg Politics editor, is with us at the table as we try to get our arms around all of this. It's good to see, Laura. This is a president that was supposed to be obsessed with Wall Street driven by the markets. Not so much this.

A promise shut down the auto industry in Canada while he's at it, which we're pretty intertwined with here. These as you mentioned, Kayla, you're set to take effect at midnight, would be along with all the other countries facing steel and aluminum tariffs and a market that just doesn't know what to do with it. As we told you, the President will be speaking to the Business Roundtable a bit later on today. You were there when he spoke as a candidate. Very different world we're in, i'd say now, But the very same people who were expressing concern over policies like these will be there, and we're going to talk in a moment with Joe Lavorgnia, of course, former Trump economic advisor. First, Laura Davison, Bloomberg Politics editor, is with us at the table as we try to get our arms around all of this. It's good to see, Laura. This is a president that was supposed to be obsessed with Wall Street driven by the markets. Not so much this.

Time around, Well at least right now, though, it's clear that both he and his allies are very worried about what they're seeing.

Time around, Well at least right now, though, it's clear that both he and his allies are very worried about what they're seeing.

In the markets.

In the markets.

We didn't hear at all from the President yesterday. That's really unusual. Normally he comes out and speaks to the press at least once. Later today he set to speak with a bunch of CEOs in Washington.

We didn't hear at all from the President yesterday. That's really unusual. Normally he comes out and speaks to the press at least once. Later today he set to speak with a bunch of CEOs in Washington.

We'll see how that goes.

We'll see how that goes.

The CEOs are very concerned about these tariff policies they see and really the uncertainty of their you know, set at one level, the next day, they could be double the next repealed the final day.

The CEOs are very concerned about these tariff policies they see and really the uncertainty of their you know, set at one level, the next day, they could be double the next repealed the final day.

Nobody knows how to plan.

Nobody knows how to plan.

And that's what really what's feeding into a lot of the market reaction we're seeing today.

And that's what really what's feeding into a lot of the market reaction we're seeing today.

Well, and I'm sure that is what business leaders would have to say to President Trump this afternoon, that they notoriously don't like uncertainty. Nor do people who are trading financial markets.

Well, and I'm sure that is what business leaders would have to say to President Trump this afternoon, that they notoriously don't like uncertainty. Nor do people who are trading financial markets.

Do.

Do.

We have a sense of if this is going to be a two directional conversation, lauris he going giving a speech and leaving without hearing them out.

We have a sense of if this is going to be a two directional conversation, lauris he going giving a speech and leaving without hearing them out.

Generally, how these exchanges have gone in the past, there has been some sort of question and answer where CEOs get to pose questions to the president. Generally, this has not been in front of the press. Even staff is generally not allowed in the rooms. The idea is to keep these meetings very tight that we have gotten some readouts in previous from previous meetings back in the spring when he met last spring before the election, when he met with them, he said he was going to lower the corporate rate to twenty percent. I think we'll also see some questions from CEO saying, hey, you know, we're really HEARDing from these tariffs.

Generally, how these exchanges have gone in the past, there has been some sort of question and answer where CEOs get to pose questions to the president. Generally, this has not been in front of the press. Even staff is generally not allowed in the rooms. The idea is to keep these meetings very tight that we have gotten some readouts in previous from previous meetings back in the spring when he met last spring before the election, when he met with them, he said he was going to lower the corporate rate to twenty percent. I think we'll also see some questions from CEO saying, hey, you know, we're really HEARDing from these tariffs.

When are we going to get these tax cuts?

When are we going to get these tax cuts?

Boy, I don't know what the message will be or whether even if we'll hear it, because this will be largely behind closed doors. From what we understand, that would be typical for the business round table. But every time Donald Trump goes on truth social you know, the market's kind of brace for what's coming next here. And we've got a CPI report tomorrow morning. We've also got a vote on a stop gap to keep the government running. Here, We've got a lot of plates we're spinning in the air right now. What's the Communications Office going to be doing at the White House in the next twelve to twenty four hours.

Boy, I don't know what the message will be or whether even if we'll hear it, because this will be largely behind closed doors. From what we understand, that would be typical for the business round table. But every time Donald Trump goes on truth social you know, the market's kind of brace for what's coming next here. And we've got a CPI report tomorrow morning. We've also got a vote on a stop gap to keep the government running. Here, We've got a lot of plates we're spinning in the air right now. What's the Communications Office going to be doing at the White House in the next twelve to twenty four hours.

They're clearly trying to spin this forward, saying, look, you know, this is going to be just a period of you know, a little bit of unrest, but soon the market will figure out and decide that these policies are correct. I mean, this is really going to be the issue. If you've got donors, you've got other people who are already concerned. Businesses are cutting their forecast saying look, we just don't know how to plan. Consumer sentiment is shaky, small business second sentiment is shaky. This is not just one bad indicator. This is a lot of bad indicators, and it's going to be very difficult for the White House to just talk their way out of one.

They're clearly trying to spin this forward, saying, look, you know, this is going to be just a period of you know, a little bit of unrest, but soon the market will figure out and decide that these policies are correct. I mean, this is really going to be the issue. If you've got donors, you've got other people who are already concerned. Businesses are cutting their forecast saying look, we just don't know how to plan. Consumer sentiment is shaky, small business second sentiment is shaky. This is not just one bad indicator. This is a lot of bad indicators, and it's going to be very difficult for the White House to just talk their way out of one.

Well.

Well.

And I would imagine that's why the White House through at least right now, Vice President Jady Vance, who is dispatched to Capitol Hill today, are emphasizing extra that a continuing resolution to keep the government funded beyond midnight Friday is necessary to pass urging no dissent.

And I would imagine that's why the White House through at least right now, Vice President Jady Vance, who is dispatched to Capitol Hill today, are emphasizing extra that a continuing resolution to keep the government funded beyond midnight Friday is necessary to pass urging no dissent.

Yeah, so we see the House they've already decided they're going to devote today and then leave to try to jam the Senate. That could also potentially, you know, throw a wrench into the system. It's really just not a good day to be at the White House. You have a lot of things that could potentially go wrong. And if you know, there is a shutdown, even a short one, or you know, we see you know, Marcus continue to fall, there's a bad meeting with the CEOs, all this could really just continue this tailspin.

Yeah, so we see the House they've already decided they're going to devote today and then leave to try to jam the Senate. That could also potentially, you know, throw a wrench into the system. It's really just not a good day to be at the White House. You have a lot of things that could potentially go wrong. And if you know, there is a shutdown, even a short one, or you know, we see you know, Marcus continue to fall, there's a bad meeting with the CEOs, all this could really just continue this tailspin.

All right.

All right.

Laura Davison, Bloomberg Politics Editor, thank you so much. And tailspin is one way to describe it, Joe. But what we're seeing is not just a down pressure on risk assets, but you're also seeing some specific language floating around out there, be it stagflation, people floating the idea that it's the end of US exceptionalism, and increasingly the word recession seems to be entering.

Laura Davison, Bloomberg Politics Editor, thank you so much. And tailspin is one way to describe it, Joe. But what we're seeing is not just a down pressure on risk assets, but you're also seeing some specific language floating around out there, be it stagflation, people floating the idea that it's the end of US exceptionalism, and increasingly the word recession seems to be entering.

Yeah, the conversation that was the fallout from the weekend. That was why we were blaming losses yesterday on this and it's still resonating, and I'll be curious to hear if the R word starts to emerge in more conversations with credible economists. It was really just a Sunday morning interview. Yeah, President didn't want to rule it out that got us this far.

Yeah, the conversation that was the fallout from the weekend. That was why we were blaming losses yesterday on this and it's still resonating, and I'll be curious to hear if the R word starts to emerge in more conversations with credible economists. It was really just a Sunday morning interview. Yeah, President didn't want to rule it out that got us this far.

Well, it did emerge in one conversation between a former Treasury secretary, Larry Summers, who sat down with our colleague David Weston earlier today and had this to say.

Well, it did emerge in one conversation between a former Treasury secretary, Larry Summers, who sat down with our colleague David Weston earlier today and had this to say.

I think you have to say that there's in the range of i'd say, still slightly below a fifty percent chance of a recession starting this year.

I think you have to say that there's in the range of i'd say, still slightly below a fifty percent chance of a recession starting this year.

So let's see if our next guest agrees with that. Joining us now here on Bloomberg TV and Radio as Joe Lavornia. He's a former Special Assistant to the President and chief economist at the National Economic Council during the first Trump administration. He's now chief economist and Managing director for smb NCO Securities America. Joe, welcome back to Balance of Power. I don't know if you think receession odds are in the ballpark of being a coin flip here, but do you at least see greater risk of it now than perhaps before. Seems to be the prevailing wisdom on the street.

So let's see if our next guest agrees with that. Joining us now here on Bloomberg TV and Radio as Joe Lavornia. He's a former Special Assistant to the President and chief economist at the National Economic Council during the first Trump administration. He's now chief economist and Managing director for smb NCO Securities America. Joe, welcome back to Balance of Power. I don't know if you think receession odds are in the ballpark of being a coin flip here, but do you at least see greater risk of it now than perhaps before. Seems to be the prevailing wisdom on the street.

It's higher, Kley than it was before, because it seems like this administration is not actually going to be very serious to the extent possible in trimming a government spending which has been a huge prop to growth the.

It's higher, Kley than it was before, because it seems like this administration is not actually going to be very serious to the extent possible in trimming a government spending which has been a huge prop to growth the.

Last several years.

Last several years.

So that does increase, if not recession, certainly a period of subpar growth, but that clearly would be a good trade off or will be a much more sustainable fiscal trajectory. The recession risk is not as high in my opinion as what Larry Summers just mentioned, but it is rising. That may be the price to pay though, to get inflation back under control and to really rejigger the government's finances which are really a mess.

So that does increase, if not recession, certainly a period of subpar growth, but that clearly would be a good trade off or will be a much more sustainable fiscal trajectory. The recession risk is not as high in my opinion as what Larry Summers just mentioned, but it is rising. That may be the price to pay though, to get inflation back under control and to really rejigger the government's finances which are really a mess.

That would though, portend Joe and welcome back a more optimistic view for the long term, wouldn't it. I know you're a chief economist and not achieve investment strategist, but what do you make of this visceral reaction on Wall Street, which is of course trying to price out where we're going to be six to nine months from now.

That would though, portend Joe and welcome back a more optimistic view for the long term, wouldn't it. I know you're a chief economist and not achieve investment strategist, but what do you make of this visceral reaction on Wall Street, which is of course trying to price out where we're going to be six to nine months from now.

Right now, Joe, thank you for having me again. Right now. This is a correction.

Right now, Joe, thank you for having me again. Right now. This is a correction.

And the market S and P had been up twenty percent plus the last couple of years. The very narrow growth concentrated into very select number of stocks. P ratio is very high, the equity risk premium very low. We had good growth last year, Unemployment was very low, but we ran a budget deficit to GDP almost at seven percent.

And the market S and P had been up twenty percent plus the last couple of years. The very narrow growth concentrated into very select number of stocks. P ratio is very high, the equity risk premium very low. We had good growth last year, Unemployment was very low, but we ran a budget deficit to GDP almost at seven percent.

That's not sustainable.

That's not sustainable.

I am optimistic, very optimistic on the outlook because I see productivity trend, productivity which started to recover rapidly under President Trump and continued over the last few years.

I am optimistic, very optimistic on the outlook because I see productivity trend, productivity which started to recover rapidly under President Trump and continued over the last few years.

You've got this huge AI boon.

You've got this huge AI boon.

We need to get capital expensing back full thrust to keep KAPEC strong.

We need to get capital expensing back full thrust to keep KAPEC strong.

So I'm very upbeat on the outlook.

So I'm very upbeat on the outlook.

I think we're living remarkable times, but it's going to take some time. As the Treasury Secretary, I believe said last week, we're going to be in a detox phase, and this is what we're living in right now.

I think we're living remarkable times, but it's going to take some time. As the Treasury Secretary, I believe said last week, we're going to be in a detox phase, and this is what we're living in right now.

Well, so, if it is all about the outlook and what's going to happen longer term, Joe. Usually markets being discount mechanisms that are forward looking would reflect what's going to happen in the future. It's not just about right now. Typically they can look ahead to what's coming down the road, and that doesn't seem to be happening at this moment.

Well, so, if it is all about the outlook and what's going to happen longer term, Joe. Usually markets being discount mechanisms that are forward looking would reflect what's going to happen in the future. It's not just about right now. Typically they can look ahead to what's coming down the road, and that doesn't seem to be happening at this moment.

Are the market I would saying, or is this site no? Please?

Are the market I would saying, or is this site no? Please?

And I think the markets are wrong. I mean, if you look at credit spreads, they've held it very tight. If there was real recession risk, we'd see much more stress there. The bond market tends to sniff that out much sooner. It ten see much more accurate than the equity market. As I said, we had a huge rally in the equity market, and this is correction phase. Once the market gets clarity, and there will be clarity at some point. There will be attacks bill passed this year. The sooner the better that will provide clarity. Once we get a gettuing resolution to fund the government through the end of the year, that will provide clarity. And as he moved into April, after the April to reciprocal tariff dates, we're going to get some clarity on that as well. So I think, Kelly, we're going to see the markets kind of congeal and sort of stabilize that have actually moved higher if there's no recession.

And I think the markets are wrong. I mean, if you look at credit spreads, they've held it very tight. If there was real recession risk, we'd see much more stress there. The bond market tends to sniff that out much sooner. It ten see much more accurate than the equity market. As I said, we had a huge rally in the equity market, and this is correction phase. Once the market gets clarity, and there will be clarity at some point. There will be attacks bill passed this year. The sooner the better that will provide clarity. Once we get a gettuing resolution to fund the government through the end of the year, that will provide clarity. And as he moved into April, after the April to reciprocal tariff dates, we're going to get some clarity on that as well. So I think, Kelly, we're going to see the markets kind of congeal and sort of stabilize that have actually moved higher if there's no recession.

Is Donald Trump a changed man here? Joe, you've actually had a chance to sit in the room. You ran the National Economic Council in the first Trump administration. You've talked about his view on the stock market, and that's always been the wrap. He's driven by the markets. He kind of measures his success by the markets. But now we're talking about a drug war, not a trade war, and a different set of principles, and there are new questions about whether he cares about this market reaction. He said just a couple of days ago, he hasn't been watching it.

Is Donald Trump a changed man here? Joe, you've actually had a chance to sit in the room. You ran the National Economic Council in the first Trump administration. You've talked about his view on the stock market, and that's always been the wrap. He's driven by the markets. He kind of measures his success by the markets. But now we're talking about a drug war, not a trade war, and a different set of principles, and there are new questions about whether he cares about this market reaction. He said just a couple of days ago, he hasn't been watching it.

What do you think He definitely cares about the markets. But Joe, really is where is the stock market? Where is the economy in twelve months, twenty four months, forty eight months? Where are we over the next handful of years. As you know from following markets, I've been doing this for a long time. People get nervous and they tend to overreact. There's a people I think right now are being way too a motive. The President certainly cares about the markets, cares about Wall Street, but cares more about Main Street. And it's his strong view that eventually we're going to bear significant positive fruit to Main Street, because that was the case in his first administration when you had roughly a six thousand increase in media and real family income, which was about six times what had been the prior sixteen years.

What do you think He definitely cares about the markets. But Joe, really is where is the stock market? Where is the economy in twelve months, twenty four months, forty eight months? Where are we over the next handful of years. As you know from following markets, I've been doing this for a long time. People get nervous and they tend to overreact. There's a people I think right now are being way too a motive. The President certainly cares about the markets, cares about Wall Street, but cares more about Main Street. And it's his strong view that eventually we're going to bear significant positive fruit to Main Street, because that was the case in his first administration when you had roughly a six thousand increase in media and real family income, which was about six times what had been the prior sixteen years.

So the President cares about these things.

So the President cares about these things.

As they said, this is going to be an adjustment, a reset process, and the market ultimately we'll see in a positive light despite the volatility we have right now.

As they said, this is going to be an adjustment, a reset process, and the market ultimately we'll see in a positive light despite the volatility we have right now.

Well, and it doesn't seem that the market is only paying attention exclusively to what the President says. Joe, you can also look at what we're getting out of corporations, warnings from retailers today, from airlines about waning demand or the impact of tariffs. The business community does seem to be signaling that there is going to be an impact, certainly on their bottom lines. But as they see shifts in consumer behavior. Some of these very same business leaders could be in the room when the President addresses the business roundtable this afternoon. What do those leaders need to hear from him in order to restore business confidence and consumer confidence?

Well, and it doesn't seem that the market is only paying attention exclusively to what the President says. Joe, you can also look at what we're getting out of corporations, warnings from retailers today, from airlines about waning demand or the impact of tariffs. The business community does seem to be signaling that there is going to be an impact, certainly on their bottom lines. But as they see shifts in consumer behavior. Some of these very same business leaders could be in the room when the President addresses the business roundtable this afternoon. What do those leaders need to hear from him in order to restore business confidence and consumer confidence?

Well, well, let me say that the business confidence.

Well, well, let me say that the business confidence.

If you look at the NFIB we had the data today, Yes, you had a big increase of uncertainty as it relates to tariffs, and of course the tax bill.

If you look at the NFIB we had the data today, Yes, you had a big increase of uncertainty as it relates to tariffs, and of course the tax bill.

Let's not exclude that.

Let's not exclude that.

To me, the tax bill, the uncertainty whether those tax cuts get extended is very important. But small business confidence is very high still over one hundred. I mean at the corporate level, and we're earnings come in. That was a function of the economy prior to when the President came in office. Clearly CEOs are worried about the outlook. But these tariffs really have not been fully put into effect yet. We don't know exactly what the impact is and to the extent there will ultimately be higher tariffs. I do think there'll be some level of higher tariff than what we had if it comes at the expense of the continuation of low marginal rates or reduction and corporate tax rates, lower tax on tips, over time, and social security.

To me, the tax bill, the uncertainty whether those tax cuts get extended is very important. But small business confidence is very high still over one hundred. I mean at the corporate level, and we're earnings come in. That was a function of the economy prior to when the President came in office. Clearly CEOs are worried about the outlook. But these tariffs really have not been fully put into effect yet. We don't know exactly what the impact is and to the extent there will ultimately be higher tariffs. I do think there'll be some level of higher tariff than what we had if it comes at the expense of the continuation of low marginal rates or reduction and corporate tax rates, lower tax on tips, over time, and social security.

That is, to me, is a very good trade off.

That is, to me, is a very good trade off.

Those supply side initiatives, I'd argue, would offset any weakness that people are worried about on the demand side, which I think too often maybe a Corporate America focus is too much on short term demand and that long term sustainable supply innovations that keep productivity and living standards ultimately higher.

Those supply side initiatives, I'd argue, would offset any weakness that people are worried about on the demand side, which I think too often maybe a Corporate America focus is too much on short term demand and that long term sustainable supply innovations that keep productivity and living standards ultimately higher.

Question from a listener on the terminal here, Joe, what's the endgame with the tariffs? Is it to strike a deal on a so called mar a lago accord? I guess to maybe expand on that a little bit. Is there a grand scheme here that maybe the market doesn't know about? Or is Donald Trump riffing every day throwing stuff at the wall to see what sticks.

Question from a listener on the terminal here, Joe, what's the endgame with the tariffs? Is it to strike a deal on a so called mar a lago accord? I guess to maybe expand on that a little bit. Is there a grand scheme here that maybe the market doesn't know about? Or is Donald Trump riffing every day throwing stuff at the wall to see what sticks.

No, they're definitely now. If you look at how many executive orders.

No, they're definitely now. If you look at how many executive orders.

There have been, it's been unprecedented because the administration clearly had a very strategic view of what they wanted to accomplish when they came in. I believe they know what they want to do on tariffs, but they're not going to say it publicly because that is a negotiation and you wouldn't tell people exactly what they're doing. And I have to think that ultimately there will be some sort of deal. The president's very transactional, it's got a very good business sense, very good business skills, and there will be some resolution. But what it looks like, Joe, I don't know. But ultimately the benefit is going to be geared towards the US performing well, and that's not President Trump. Ultimately will be measured where are we four years from now? Where's the equity market, where's the unemployment rate? Is the inflation rate back down well below two percent as it was in his first term, or is it up near three percent? All those factors will come into play. And I think too often we want results too quickly, We're too impatient.

There have been, it's been unprecedented because the administration clearly had a very strategic view of what they wanted to accomplish when they came in. I believe they know what they want to do on tariffs, but they're not going to say it publicly because that is a negotiation and you wouldn't tell people exactly what they're doing. And I have to think that ultimately there will be some sort of deal. The president's very transactional, it's got a very good business sense, very good business skills, and there will be some resolution. But what it looks like, Joe, I don't know. But ultimately the benefit is going to be geared towards the US performing well, and that's not President Trump. Ultimately will be measured where are we four years from now? Where's the equity market, where's the unemployment rate? Is the inflation rate back down well below two percent as it was in his first term, or is it up near three percent? All those factors will come into play. And I think too often we want results too quickly, We're too impatient.

And you know, it's only March.

And you know, it's only March.

If we haven't e finished the firste hundred days yet, and here we're talking about losing US exceptionalism. I think that's very that's too much doomsday.

If we haven't e finished the firste hundred days yet, and here we're talking about losing US exceptionalism. I think that's very that's too much doomsday.

Well, Joe, we could add to that list potentially in terms of where the unemployment rate is or what have you. Also where borrowing costs are, what the average thirty year mortgage rate is. What does all of this conversation due to your expectations around monetary policy will change right now.

Well, Joe, we could add to that list potentially in terms of where the unemployment rate is or what have you. Also where borrowing costs are, what the average thirty year mortgage rate is. What does all of this conversation due to your expectations around monetary policy will change right now.

I see the Fed on hold.

I see the Fed on hold.

I do think rates ultimately a move lower, getting rates ultimately probably down to three percent, maybe a bit less.

I do think rates ultimately a move lower, getting rates ultimately probably down to three percent, maybe a bit less.

That assumes an economy that's q.

That assumes an economy that's q.

Roughly three percent, that Kale would take the ten year note on a sustainable basis to around three seventy five maybe four percent, so lower, well, a steper curve at lower yields that would also be consistent with an.

Roughly three percent, that Kale would take the ten year note on a sustainable basis to around three seventy five maybe four percent, so lower, well, a steper curve at lower yields that would also be consistent with an.

Inflation rate around two percent.

Inflation rate around two percent.

I mean the world that I envision is one that is very similar to what we had prior to the pandemic. GDP growth around three percent, low and stable inflation, very low and stable unemployment, and a very strong equity market.

I mean the world that I envision is one that is very similar to what we had prior to the pandemic. GDP growth around three percent, low and stable inflation, very low and stable unemployment, and a very strong equity market.

Joe, it's great to have you back. We'd love to compare notes once we understand how this conversation went with the Business Roundtable. You're always welcome here, of course, former Special Assistant to the President and the first Trump administration Chief Economists, National Economic Council now SMBC, NCO Securities America. Really interesting, Kley, as we try to feel our way through this with so much uncertain tea in the air in a market that's pointing lower.

Joe, it's great to have you back. We'd love to compare notes once we understand how this conversation went with the Business Roundtable. You're always welcome here, of course, former Special Assistant to the President and the first Trump administration Chief Economists, National Economic Council now SMBC, NCO Securities America. Really interesting, Kley, as we try to feel our way through this with so much uncertain tea in the air in a market that's pointing lower.

Yeah, and of course not for the first time. It has been a pretty brutal several weeks, and yet no direct comment on that from the President, at least at this point, beyond saying yesterday he's not looking at the stock market.

Yeah, and of course not for the first time. It has been a pretty brutal several weeks, and yet no direct comment on that from the President, at least at this point, beyond saying yesterday he's not looking at the stock market.

I think it's hard not to be looking this week, that's true.

I think it's hard not to be looking this week, that's true.

I guess we'll lead to say something a little bit later on. We'll assemble our panel next. We've got an important vote in the House today to try to keep the lights on this weekend. This is Bloomberg.

I guess we'll lead to say something a little bit later on. We'll assemble our panel next. We've got an important vote in the House today to try to keep the lights on this weekend. This is Bloomberg.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple Cockley and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple Cockley and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.

Here in Washington, an important vote set to take place just hours from now in the House of Representatives, where a continuing resolution that would keep the government funded through the end of the fiscal year September thirtieth is set to hit the floor.

Here in Washington, an important vote set to take place just hours from now in the House of Representatives, where a continuing resolution that would keep the government funded through the end of the fiscal year September thirtieth is set to hit the floor.

The thing is.

The thing is.

Republican leadership is not counting on any Democratic votes for this measure, which means they have to keep basically the entire conference together on this one because there's only so many votes that they can afford to lose, presuming that you have attendance that is as expected on both sides.

Republican leadership is not counting on any Democratic votes for this measure, which means they have to keep basically the entire conference together on this one because there's only so many votes that they can afford to lose, presuming that you have attendance that is as expected on both sides.

The thing is, though, Joe, already you.

The thing is, though, Joe, already you.

Have one hard no, likely unchangeable no in Congressman Tom Massey, the gentleman from Kentucky who is now being threatened with a primary challenge by President Trump.

Have one hard no, likely unchangeable no in Congressman Tom Massey, the gentleman from Kentucky who is now being threatened with a primary challenge by President Trump.

But there's others too.

But there's others too.

Not necessarily is Heart taking as hard line as Massy on this, but saying at this time, even after meeting with the Vice President Jady Vance on the Hill earlier today, they remain undecided on whether they're going to vote for this similar names.

Not necessarily is Heart taking as hard line as Massy on this, but saying at this time, even after meeting with the Vice President Jady Vance on the Hill earlier today, they remain undecided on whether they're going to vote for this similar names.

We've been hearing Burchett, Crane, McCormick, Ogles, Gonzales, and about a half dozen here on the fence. So I suspect that the phone call will start coming in from the White House soon, unless, of course, the strategy is to bring everybody on the floor and dare them to vote now.

We've been hearing Burchett, Crane, McCormick, Ogles, Gonzales, and about a half dozen here on the fence. So I suspect that the phone call will start coming in from the White House soon, unless, of course, the strategy is to bring everybody on the floor and dare them to vote now.

Yeah, which we have seen in the past, mind you, when they were trying to pass their budget ten which is setting the stage for the reconciliation battle that still has yet to come, because we have so much to look forward to. They let everyone leave the floor, then called them back immediately, and suddenly the votes.

Yeah, which we have seen in the past, mind you, when they were trying to pass their budget ten which is setting the stage for the reconciliation battle that still has yet to come, because we have so much to look forward to. They let everyone leave the floor, then called them back immediately, and suddenly the votes.

Were there thirteen minutes later.

Were there thirteen minutes later.

Pressure is an amazing thing.

Pressure is an amazing thing.

Well, we heard from the speaker a little bit earlier, of course, Kayley, speaking optimistically about these hold outs. Here's what he said.

Well, we heard from the speaker a little bit earlier, of course, Kayley, speaking optimistically about these hold outs. Here's what he said.

You can all read the bills nine to nine pages. This clean cr contains no poison pill riders, no policy writers there at all, no cuts to Medicare, medicator so security zero, No cuts to veterans benefits zero. In fact, as was noted, we plus up the accounts for veterans.

You can all read the bills nine to nine pages. This clean cr contains no poison pill riders, no policy writers there at all, no cuts to Medicare, medicator so security zero, No cuts to veterans benefits zero. In fact, as was noted, we plus up the accounts for veterans.

Wouldn't want to be Tom Massey today. I can only imagine the emails and phone calls. Donald Trump takes the truth social referring to him as a congressman with quotation marks. I won't read this whole thing, it's another long one, but he says, Thomas Massey is a grand stander, and the great people of Kentucky are going to be watching a very interesting primary in the not too distant future. This on Bloomberg TV or YouTube you can take and read yourself. As we assembled our signature panel. Rick Davis is here, a Republican strategist and partner at Stone Court Capital, alongside Jeanie Shanzano or Democratic Analyst, senior Democracy Fellow with the Center for the Study of the Presidency and Congress. What do you think, Rick, does the pressure play work?

Wouldn't want to be Tom Massey today. I can only imagine the emails and phone calls. Donald Trump takes the truth social referring to him as a congressman with quotation marks. I won't read this whole thing, it's another long one, but he says, Thomas Massey is a grand stander, and the great people of Kentucky are going to be watching a very interesting primary in the not too distant future. This on Bloomberg TV or YouTube you can take and read yourself. As we assembled our signature panel. Rick Davis is here, a Republican strategist and partner at Stone Court Capital, alongside Jeanie Shanzano or Democratic Analyst, senior Democracy Fellow with the Center for the Study of the Presidency and Congress. What do you think, Rick, does the pressure play work?

Does this pass?

Does this pass?

Well?

Well?

I think they're beyond pressure with top Massy. Now it's just recrimination. And we have to look at the history and every time there's been a big vote, even before Donald Trump was elected.

I think they're beyond pressure with top Massy. Now it's just recrimination. And we have to look at the history and every time there's been a big vote, even before Donald Trump was elected.

When he intervened, he changed people to his position.

When he intervened, he changed people to his position.

So my guess is you'll get what he wants out of this, and frankly he should because I mean, the reality is this as much to do about nothing.

So my guess is you'll get what he wants out of this, and frankly he should because I mean, the reality is this as much to do about nothing.

We got to keep the government floated financially.

We got to keep the government floated financially.

This is insane that we're even having a conversation about a full year cr It is.

This is insane that we're even having a conversation about a full year cr It is.

An indictment on Washington.

An indictment on Washington.

You can't pass appropriations bills, you can't set policy. They should all turn in their paychecks for last year. It's just amazing, but that's where we are. It should be non controversial, and I think not only will the House pass this bill, but I think the sentence lined up to do the same.

You can't pass appropriations bills, you can't set policy. They should all turn in their paychecks for last year. It's just amazing, but that's where we are. It should be non controversial, and I think not only will the House pass this bill, but I think the sentence lined up to do the same.

Well, and typically we've seen, at least in recent years, not only is this it's always controversial, but at the very least it can be nonpartisan or a bipartisan effort.

Well, and typically we've seen, at least in recent years, not only is this it's always controversial, but at the very least it can be nonpartisan or a bipartisan effort.

Genie.

Genie.

Typically Democrats do support or provide the votes needed to keep the government open when it counts. They have signaled they are not willing to do that this time. At least leadership has signaled that. And I do wonder if you expect every Democrat to stay in line with Hakeem Jeffreys when this thing goes to the floor, if there could be some breaks to his guidance.

Typically Democrats do support or provide the votes needed to keep the government open when it counts. They have signaled they are not willing to do that this time. At least leadership has signaled that. And I do wonder if you expect every Democrat to stay in line with Hakeem Jeffreys when this thing goes to the floor, if there could be some breaks to his guidance.

There may be some breaks. I mean, he has really been whipping a hard no on this. And of course for Democrats, they had no input on the bill. And the clip you just played, we heard Mike Johnson talking about how this is a clean cr well almost clean. It's not quite clean according to the Democrats, and in particular the fact that it does give the executive branch more discretion the federal government to spend money, and that of course is a non starter for the base of the Democratic Party, very concerned about an emboldened Doge, and so it's not clean from their perspective. But I do think most Democrats will stick with Hopking Jeffries, but I agree with Rick in all likelihood this gets through the House. At least that's been the record. Mike Johnson seems to go right up to the line and then they pass. And if they get out of town, I think the I think the Senate will be able to avoid a filibuster, which means you're going to need to see about eight Democrats go over. But I just think it's hard at this point for Democrats to imagine shutting down the government. That said, this is going to be very tight, and a lot of this depends, for instance, on things like who's actually present today when they call this vote, which it looks like we'll be later this afternoon.

There may be some breaks. I mean, he has really been whipping a hard no on this. And of course for Democrats, they had no input on the bill. And the clip you just played, we heard Mike Johnson talking about how this is a clean cr well almost clean. It's not quite clean according to the Democrats, and in particular the fact that it does give the executive branch more discretion the federal government to spend money, and that of course is a non starter for the base of the Democratic Party, very concerned about an emboldened Doge, and so it's not clean from their perspective. But I do think most Democrats will stick with Hopking Jeffries, but I agree with Rick in all likelihood this gets through the House. At least that's been the record. Mike Johnson seems to go right up to the line and then they pass. And if they get out of town, I think the I think the Senate will be able to avoid a filibuster, which means you're going to need to see about eight Democrats go over. But I just think it's hard at this point for Democrats to imagine shutting down the government. That said, this is going to be very tight, and a lot of this depends, for instance, on things like who's actually present today when they call this vote, which it looks like we'll be later this afternoon.

Talking about the stock market here quite a bit for obvious reasons over the last couple of days, including this one, and we can tell you the headline just crossed the terminal. The S and P five hundred set to enter correction territory after falling ten percent, that of course, being the definition from the record high and Kaylee. It follows some commentary from the Press secretary being asked about this. As you would suspect, a snapshot of a moment in time. She describes the market.

Talking about the stock market here quite a bit for obvious reasons over the last couple of days, including this one, and we can tell you the headline just crossed the terminal. The S and P five hundred set to enter correction territory after falling ten percent, that of course, being the definition from the record high and Kaylee. It follows some commentary from the Press secretary being asked about this. As you would suspect, a snapshot of a moment in time. She describes the market.

After saying that we're in a period of economic transition. Very similar language to what President Trump said in that interview on Sunday Morning Futures that ran over the weekend, in which she refused to rule out a recession. Noteworthy though, to now be speaking about the stock market as a snapshot of a moment in time, compared to the language about the stock market we heard in the first Trump administration. Yep, perhaps Trump's language about the stock market when President Biden was president. It does seem like there is a bit of a tone shift underway here as we're seeing equities obviously taking tariffs on the chin. Not just a ten percent correction territory now for the S and P five hundred, but the Nasdaq is already well below.

After saying that we're in a period of economic transition. Very similar language to what President Trump said in that interview on Sunday Morning Futures that ran over the weekend, in which she refused to rule out a recession. Noteworthy though, to now be speaking about the stock market as a snapshot of a moment in time, compared to the language about the stock market we heard in the first Trump administration. Yep, perhaps Trump's language about the stock market when President Biden was president. It does seem like there is a bit of a tone shift underway here as we're seeing equities obviously taking tariffs on the chin. Not just a ten percent correction territory now for the S and P five hundred, but the Nasdaq is already well below.

It's already the territory S and P five hundred down eighty three points right now. By the way, we're down one and a half percent at the moment, and a bit of a fit here. After Donald Trump made that post on truth Social there was talk of a recovery today and that has obviously gone out the window. Rick, when you have the uncertainty over government funding over the debt ceiling over Trump tax cuts. How important is this vote today for the view of the market.

It's already the territory S and P five hundred down eighty three points right now. By the way, we're down one and a half percent at the moment, and a bit of a fit here. After Donald Trump made that post on truth Social there was talk of a recovery today and that has obviously gone out the window. Rick, when you have the uncertainty over government funding over the debt ceiling over Trump tax cuts. How important is this vote today for the view of the market.

You know, look, it's a confidence building exercise. They can't really do any good with this. They're not like showing fiscal responsibility. It's a cr it's just to kick the can funding mechanism. But if it doesn't pass, it's a huge problem. So they're not going to get any credit for doing the cowards way out, but they will get blamed if, for whatever reason something this benign doesn't get passed. And I think Democrats and Republicans take it on the chin. They will both get blamed by the market because we'll enter this period of political instability that we've seen in the past, where you can't make business decisions based on the political instability of the system in Washington. And I think that's what today's all about, is avoiding that appearance. Last thing we want is Moodies looking at the federal government and saying, you know, potential downgrade because they can't get their act together. I mean, that's like a horrible indictment on the system and the people in it.

You know, look, it's a confidence building exercise. They can't really do any good with this. They're not like showing fiscal responsibility. It's a cr it's just to kick the can funding mechanism. But if it doesn't pass, it's a huge problem. So they're not going to get any credit for doing the cowards way out, but they will get blamed if, for whatever reason something this benign doesn't get passed. And I think Democrats and Republicans take it on the chin. They will both get blamed by the market because we'll enter this period of political instability that we've seen in the past, where you can't make business decisions based on the political instability of the system in Washington. And I think that's what today's all about, is avoiding that appearance. Last thing we want is Moodies looking at the federal government and saying, you know, potential downgrade because they can't get their act together. I mean, that's like a horrible indictment on the system and the people in it.

Well, and I guess the White House is very much trying to read the market activity is not being an indictment of the president's policies. But Genie, the suggestion from the Press secretary that what financial markets are reflecting right now, or where stock market levels are is just a moment in time. Are you surprised by this language coming from the White House, given how previously they've talked about the stock market. Just weeks ago, President Trump was touting stocks at record highs.

Well, and I guess the White House is very much trying to read the market activity is not being an indictment of the president's policies. But Genie, the suggestion from the Press secretary that what financial markets are reflecting right now, or where stock market levels are is just a moment in time. Are you surprised by this language coming from the White House, given how previously they've talked about the stock market. Just weeks ago, President Trump was touting stocks at record highs.

Yeah, I am so surprised. First of all, they obviously haven't been listening the last couple years when we raked Joe Biden over the Coohals for using the term transitory, And to me, a snapshot is very much just a synonym of transitory. And the other thing is that, you know, right before his inauguration, Donald Trump went to the arena and he talked about with great celebratory you know, sort of look at me, look what all I've done to the market. That's all been wiped away. And now they're saying, well, it's just transitory. You know, This to me is quite stunning from a man who typically likes to tout the crowds, likes to tout the strong numbers, who ran on making America affordable again, and all I can just imagine is that this explains his silence over the last twenty four to forty eight hours, except for his tweet, is his truthing again to Canada and about Elon Musk. He has been suspiciously quiet and we have to wait to see what he says to the roundtable. But the communication strategy here from Donald Trump speaks volumes, because it's not like Donald Trump to be quiet.

Yeah, I am so surprised. First of all, they obviously haven't been listening the last couple years when we raked Joe Biden over the Coohals for using the term transitory, And to me, a snapshot is very much just a synonym of transitory. And the other thing is that, you know, right before his inauguration, Donald Trump went to the arena and he talked about with great celebratory you know, sort of look at me, look what all I've done to the market. That's all been wiped away. And now they're saying, well, it's just transitory. You know, This to me is quite stunning from a man who typically likes to tout the crowds, likes to tout the strong numbers, who ran on making America affordable again, and all I can just imagine is that this explains his silence over the last twenty four to forty eight hours, except for his tweet, is his truthing again to Canada and about Elon Musk. He has been suspiciously quiet and we have to wait to see what he says to the roundtable. But the communication strategy here from Donald Trump speaks volumes, because it's not like Donald Trump to be quiet.

Well, We've got a couple headlines coming out of the press briefing Rick before our global television audience joined us. We were talking about Donald Trump's post on truth Social after Midnight, in which he pledged to buy a Tesla to help support Elon Musk, who he says is under a great distress here and being criticized by the other side. Press secretaire says, a tesla is on the way to the White House. Now, remembering Donald Trump was gifted a cyber truck on the campaign. I mentioned this, Rick, because Elon Musk is a big factor here and I wonder the extent to which you see him playing into the uncertainty on Wall Street. How much of this is tariffs versus the rest of the DOGE policy and the host cutting efforts in this White House.

Well, We've got a couple headlines coming out of the press briefing Rick before our global television audience joined us. We were talking about Donald Trump's post on truth Social after Midnight, in which he pledged to buy a Tesla to help support Elon Musk, who he says is under a great distress here and being criticized by the other side. Press secretaire says, a tesla is on the way to the White House. Now, remembering Donald Trump was gifted a cyber truck on the campaign. I mentioned this, Rick, because Elon Musk is a big factor here and I wonder the extent to which you see him playing into the uncertainty on Wall Street. How much of this is tariffs versus the rest of the DOGE policy and the host cutting efforts in this White House.

Well, there's no question that Elon Musk is taking the brunt of the downsizing the federal government argument for those people who aren't happy with what they're seeing, right. I mean, it's just actually amazing how much Elon Musk has been this tip of the spear on a policy that Donald Trump's been talking about for almost ten years.

Well, there's no question that Elon Musk is taking the brunt of the downsizing the federal government argument for those people who aren't happy with what they're seeing, right. I mean, it's just actually amazing how much Elon Musk has been this tip of the spear on a policy that Donald Trump's been talking about for almost ten years.

And so that's been a huge help to Donald Trump.

And so that's been a huge help to Donald Trump.

The fact that he doesn't have to take all the barbs, he doesn't have people at the town hall screaming his name to Republican officeholders about their unhappiness is a huge advantage. And honestly, this is a part of Donald Trump's kind of attractive He actually care about Elon musk feelings and the fact that being hurt because he's thrown himself into the political friend Washington, Look, put on your big boy pants and go to work.

The fact that he doesn't have to take all the barbs, he doesn't have people at the town hall screaming his name to Republican officeholders about their unhappiness is a huge advantage. And honestly, this is a part of Donald Trump's kind of attractive He actually care about Elon musk feelings and the fact that being hurt because he's thrown himself into the political friend Washington, Look, put on your big boy pants and go to work.

There are things to be.

There are things to be.

Done in Washington, and you shouldn't have to someone's tesla to make them go into the office in the morning.

Done in Washington, and you shouldn't have to someone's tesla to make them go into the office in the morning.

Come on, Well, Rick Davis and Genie Shanzanos certainly shown up for work today, joining us here on Balance of Power. Our signature signature panel. Thank you both so much. As we keep one eye on domestic politics, another on geopolitics with US and Ukraine's talks underway and Saudi Arabia. We'll have more on that in just a moment, as we also keep our third eye, I guess on financial markets, the S and P five hundred touching into correction territory. We'll have a check on those for you on the other side of the break. Here on Bloomberg TV and radio.

Come on, Well, Rick Davis and Genie Shanzanos certainly shown up for work today, joining us here on Balance of Power. Our signature signature panel. Thank you both so much. As we keep one eye on domestic politics, another on geopolitics with US and Ukraine's talks underway and Saudi Arabia. We'll have more on that in just a moment, as we also keep our third eye, I guess on financial markets, the S and P five hundred touching into correction territory. We'll have a check on those for you on the other side of the break. Here on Bloomberg TV and radio.

You're listening to the Bloomberg Balance of Power podcast Ketch US live weekdays at noon and five pm. E's den 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 listening to the Bloomberg Balance of Power podcast Ketch US live weekdays at noon and five pm. E's den 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.

The trading on this Tuesday, which initially we thought might see the start of a rebound after the brutal selling pressure that rippled across US equity markets yesterday, and instead of true social post from President Trump raising the planned tariffs on steel and aluminum for cannabis specifically to fifty percent set to take effect at midnight, seems to have sapped risk sentiment all over again, and dip buying doesn't necessarily seem to be materializing at this moment as we look at correction territory on the S and P five hundred. So for more, as Charlie promised, we go to Mike Reagan, Bloomberg senior editor, who was joining.

The trading on this Tuesday, which initially we thought might see the start of a rebound after the brutal selling pressure that rippled across US equity markets yesterday, and instead of true social post from President Trump raising the planned tariffs on steel and aluminum for cannabis specifically to fifty percent set to take effect at midnight, seems to have sapped risk sentiment all over again, and dip buying doesn't necessarily seem to be materializing at this moment as we look at correction territory on the S and P five hundred. So for more, as Charlie promised, we go to Mike Reagan, Bloomberg senior editor, who was joining.

Us from New York.

Us from New York.

Mike, at what point is this just the selling pressure kind of amplifies itself and we're looking at technical levels here and kind of algorithms kicking in, or does this still seem to be active decision making on the part of traders to trade off of what we're hearing from the president.

Mike, at what point is this just the selling pressure kind of amplifies itself and we're looking at technical levels here and kind of algorithms kicking in, or does this still seem to be active decision making on the part of traders to trade off of what we're hearing from the president.

Yeah, Kelly, I think my guess is that it's a little bit of both. From a technical perspective, if you look at the chart of the stock market, it's really just a classic down trend since the last high in the S and P five hundred on February nineteenth. So you know that trend until it's breached, and it looks like, you know, it's broke that down trend. Technically minded traders are going to be a little bit nervous about what this market looks like right now. The S and P is below it's two hundred day moving average first closed yesterday in a long time, below that average that's another signal to technically minded traders that you know, this this sell off is not your classic, you know, sort of minor correction, that it is potentially something more serious. But as I was saying earlier, I would also point out that, you know, this has kind of gone beyond just the headlines from Trump and his posts on social media and his comments about tariffs. We are seeing companies themselves, you know, Coals today, Dick Sporting Goods really giving sort of alarming forecasts for their profit in the rest of the year. That is really catching investors attention, and those stocks are down pretty significantly. You know, it really looks like it's being translated from just sort of tweets and posts from Donald Trump and sort of confusion about tariffs to actually what looks like to be the start of damage to Corporate America's profitability. Doing in part because obviously, if you fire a lot of government workers, that's going to reduce some consumer demand, and it makes other consumers nervous, it makes companies confused about how they should respond to these tariff threats. So you know, it is getting beyond just sort of the headline risk and the social media post risk from Donald Trump into something more serious with these companies warning about their profit forecast.

Yeah, Kelly, I think my guess is that it's a little bit of both. From a technical perspective, if you look at the chart of the stock market, it's really just a classic down trend since the last high in the S and P five hundred on February nineteenth. So you know that trend until it's breached, and it looks like, you know, it's broke that down trend. Technically minded traders are going to be a little bit nervous about what this market looks like right now. The S and P is below it's two hundred day moving average first closed yesterday in a long time, below that average that's another signal to technically minded traders that you know, this this sell off is not your classic, you know, sort of minor correction, that it is potentially something more serious. But as I was saying earlier, I would also point out that, you know, this has kind of gone beyond just the headlines from Trump and his posts on social media and his comments about tariffs. We are seeing companies themselves, you know, Coals today, Dick Sporting Goods really giving sort of alarming forecasts for their profit in the rest of the year. That is really catching investors attention, and those stocks are down pretty significantly. You know, it really looks like it's being translated from just sort of tweets and posts from Donald Trump and sort of confusion about tariffs to actually what looks like to be the start of damage to Corporate America's profitability. Doing in part because obviously, if you fire a lot of government workers, that's going to reduce some consumer demand, and it makes other consumers nervous, it makes companies confused about how they should respond to these tariff threats. So you know, it is getting beyond just sort of the headline risk and the social media post risk from Donald Trump into something more serious with these companies warning about their profit forecast.

Kelly, I just wonder, Mike, you know what capitulation looks like. Here you've got a VIX bumping up against twenty nine. Now, and we heard another call this morning fifty five hundred, much like we heard from Mike Wilson and Goldman Sachs, JP, Morgan Asset Managements David Leibovitz. He says it's time to start writing a shopping list. Mike, when do we know it time?

Kelly, I just wonder, Mike, you know what capitulation looks like. Here you've got a VIX bumping up against twenty nine. Now, and we heard another call this morning fifty five hundred, much like we heard from Mike Wilson and Goldman Sachs, JP, Morgan Asset Managements David Leibovitz. He says it's time to start writing a shopping list. Mike, when do we know it time?

I think, you know, you know, Joe, I'm not sure that that's consensus that this is a dip that is to be bought at a certain level. You know, we have seen other strategists being much more cautious, so you know, it's hard to really say where the bottom of this is. I think what Wall Street really craves now is a little bit of a softer tone from President Trump on the tariffs, and not to mention all of the other you know, the cuts and spending, you know, all the DOGE cuts being made and the firing of government workers. A lot of this is adding up to real concern about the strength of the consumer for the rest of the year. So I'm not sure it's one of those sort of dips that reaches a level where, you know, you see this knee jerk response and people start to buy into it. That certainly could happen, But I you know, I think this correction, this sort of draw down from the high eyes, is likely here to stay for a while, and so we learn more about how aggressive President Trump really wants to be with these tariffs. You know, he's he's very flexible and sort of tends to change what he wants to do with tariffs quite a bit. And I think we Wall Street's really coming to grips with right now is that this correction in the stock market is not yet enough to really change his mind about trade policy and all his other policies. So, you know, I think this drawdown is here to stay until there's more clarity on exactly you know, where the line in the sand is for Trump as far as how aggressive he wants to get with tariffs and with you know, cutting government spending and the job cuts that come along with it.

I think, you know, you know, Joe, I'm not sure that that's consensus that this is a dip that is to be bought at a certain level. You know, we have seen other strategists being much more cautious, so you know, it's hard to really say where the bottom of this is. I think what Wall Street really craves now is a little bit of a softer tone from President Trump on the tariffs, and not to mention all of the other you know, the cuts and spending, you know, all the DOGE cuts being made and the firing of government workers. A lot of this is adding up to real concern about the strength of the consumer for the rest of the year. So I'm not sure it's one of those sort of dips that reaches a level where, you know, you see this knee jerk response and people start to buy into it. That certainly could happen, But I you know, I think this correction, this sort of draw down from the high eyes, is likely here to stay for a while, and so we learn more about how aggressive President Trump really wants to be with these tariffs. You know, he's he's very flexible and sort of tends to change what he wants to do with tariffs quite a bit. And I think we Wall Street's really coming to grips with right now is that this correction in the stock market is not yet enough to really change his mind about trade policy and all his other policies. So, you know, I think this drawdown is here to stay until there's more clarity on exactly you know, where the line in the sand is for Trump as far as how aggressive he wants to get with tariffs and with you know, cutting government spending and the job cuts that come along with it.

Mike, we can't thank you enough. Mike Reagan, Bloomberg Senior Editor, is super helpful these last couple of days, and we might need to stay close on this, joining us live from World Headquarters in New York. Of course, Kaylee, we're going to be watching the meeting of the Business Roundtable after the closing bell five pm Eastern time. Donald Trump will hold forth with some pretty important executives who have already, upon his last visit as a candidate, expressed some concern about the impact of these very policies we're talking about tariffs, tax cuts put together.

Mike, we can't thank you enough. Mike Reagan, Bloomberg Senior Editor, is super helpful these last couple of days, and we might need to stay close on this, joining us live from World Headquarters in New York. Of course, Kaylee, we're going to be watching the meeting of the Business Roundtable after the closing bell five pm Eastern time. Donald Trump will hold forth with some pretty important executives who have already, upon his last visit as a candidate, expressed some concern about the impact of these very policies we're talking about tariffs, tax cuts put together.

Yeah, we're looking forward to hearing hopefully from the President in the five o'clock hour in the late edition of Balance of Power. And I would also keep in mind we're actively waiting to hear from the Secretary of State Marco Rubio. He's been expected to gaggle with press gathered in Saudi Arabia with US and Ukraine talks now underway. It seems those talks have been lasting for an extended period of time that has delayed those remarks, But of course we're eager to hear what the Secretary has to say, as the US is suggesting both Ukraine and Russia are going to have to make some concessions here.

Yeah, we're looking forward to hearing hopefully from the President in the five o'clock hour in the late edition of Balance of Power. And I would also keep in mind we're actively waiting to hear from the Secretary of State Marco Rubio. He's been expected to gaggle with press gathered in Saudi Arabia with US and Ukraine talks now underway. It seems those talks have been lasting for an extended period of time that has delayed those remarks, But of course we're eager to hear what the Secretary has to say, as the US is suggesting both Ukraine and Russia are going to have to make some concessions here.

That's right, Secretary of State Marco Rubio in the room, Mike Waltz back there, Steve Witkoff as well. Our producer James told us about nine hours in. James, is that correct? At this point they still have not emerged. I wanted to talk to Maura Rubbin about this. This is obviously it could be a pivotal meeting here, professor at the University of Virginia's Miller Center, former US diplomat with us back here on Bloomberg, Mar it's great.

That's right, Secretary of State Marco Rubio in the room, Mike Waltz back there, Steve Witkoff as well. Our producer James told us about nine hours in. James, is that correct? At this point they still have not emerged. I wanted to talk to Maura Rubbin about this. This is obviously it could be a pivotal meeting here, professor at the University of Virginia's Miller Center, former US diplomat with us back here on Bloomberg, Mar it's great.

To see you.

To see you.

Does the length of this meeting, the fact that it's going into overtime encourage.

Does the length of this meeting, the fact that it's going into overtime encourage.

You, well, I think it's it's better than if it was an abrupt meeting. They certainly a lot to talk about, and in Mike.

You, well, I think it's it's better than if it was an abrupt meeting. They certainly a lot to talk about, and in Mike.

Waltz and Secretary of Rubio, you have serious thinkers who understand the ramifications of what the President and others have put out there.

Waltz and Secretary of Rubio, you have serious thinkers who understand the ramifications of what the President and others have put out there.

And so I'm hoping that this could be a sign that there are serious discussions underway and recognizing that all parties involved are going to need to be able to stay clearly what their bottom lines are. And it's particularly tough for Ukraine because all of the negotiating is literally going on on their territory or about their territory and about their sovereignty, which puts an ad burden on them, which I certainly hope that Secretary Rubio and Mike Waltz understand and appreciate and appreciate why US interests are so at play here in terms of protecting Ukrainian sovereignty.

And so I'm hoping that this could be a sign that there are serious discussions underway and recognizing that all parties involved are going to need to be able to stay clearly what their bottom lines are. And it's particularly tough for Ukraine because all of the negotiating is literally going on on their territory or about their territory and about their sovereignty, which puts an ad burden on them, which I certainly hope that Secretary Rubio and Mike Waltz understand and appreciate and appreciate why US interests are so at play here in terms of protecting Ukrainian sovereignty.

Well, we do know this came up in the White House Press briefing just a moment ago, as the Press Secretary Caroline Lovitt says that the President has received positive briefs about the meeting so far today and that they'll have a full readout later on. But Mar to your point about Ukrainian territory being in question here, what Russia is going to be able to keep hold of versus what Ukraine may be able to claw back. How do you see the minerals deal that the US still seems intent on signing with Ukraine. Factoring into that knowing that where a lot of that material actually is is in territory currently occupied by Russia, does that actually give Ukraine some leverage via the United States?

Well, we do know this came up in the White House Press briefing just a moment ago, as the Press Secretary Caroline Lovitt says that the President has received positive briefs about the meeting so far today and that they'll have a full readout later on. But Mar to your point about Ukrainian territory being in question here, what Russia is going to be able to keep hold of versus what Ukraine may be able to claw back. How do you see the minerals deal that the US still seems intent on signing with Ukraine. Factoring into that knowing that where a lot of that material actually is is in territory currently occupied by Russia, does that actually give Ukraine some leverage via the United States?

Hard to say.

Hard to say.

I suspect that the United States has also been talking to Russia on the minerals topic, and it's understandable for any US administration to recognize that the United States needs to do far better in building and protecting a resilient critical mineral supply chain. I don't happen to disagree. I don't happen to agree with how this administration has gone about making those claims or assertions, but I expect to having conversations with both Russia and Ukraine. For Ukraine, what's most important and presidence of Zelenski's chief of staff has already stated that publicly is the need for security guarantees from the United States with whatever Ukraine may put on the table, in addition to their openness on the critical mineral.