August 1, 2025 • 42 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
US job growth cooled sharply over the past three months and the unemployment rate rose, showing the labor market is shifting into a lower gear amid widespread economic uncertainty.
Payrolls increased 73,000 in July after the prior two months were revised down by nearly 260,000, according to a Bureau of Labor Statistics report out Friday. In the last three months, employment growth has averaged a paltry 35,000 — the worst since the pandemic.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Bloomberg Economics US Economist Stuart Paul.
- Brookings Institution Vice President and Director of Economic Studies Ben Harris.
- Massachusetts Governor Maura Healey.
- Bloomberg Politics Contributor Jeanne Sheehan Zaino and Former RNC Communications Director Lisa Camooso Miller.
- Former Republican Congressman and Bloomberg Contributor Patrick McHenry.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
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Speaker 2 (00:25):
Both the equity and pond market having a strong reaction
to today's non farm payrolls report just seventy thousand or
seventy three thousand jobs added Downwarder visions also something to
pay attention to, as we're looking at over the course
of the last three months, on average, the slowest jobs
growth we have seen since back in the pandemic era,
raising the question as to whether or not maybe it
(00:46):
was Governor Waller, not Chairman Powell, who was singing the
right tune at the Fed's decision this week to not
lower interest rates. Waller, of course, was citing concern over
the labor market, and as we consider the overall state
of the labor we actually had a chance here at
Bloomberg TV and Radio to catch up with the Labor Secretary,
Lori Shabs Dreamer earlier today, and this is how she
(01:07):
characterized the.
Speaker 3 (01:07):
Figures certainly, we know they could have been better, but
you know, we look at the positive because we still
have a net positive almost a half a million new
jobs since the President took office. What has happened on
the ground, the one big beautiful bill by Congress, the
President leaning in and keeping the promises made by negotiating
fair trade deals for the American workforce. And now what
(01:30):
we need is the Federal Reserve to jump in and
lower those interest rates. I talked to businesses just yesterday
who said, you know, we've invested in our American workers,
We're paying attention to our facilities. We're wanting to invest
in borrow more money, but they're concerned with borrowing that
more money.
Speaker 4 (01:47):
So how did everybody get this so wrong? Stuart Paul
joins us from World headquarters in New York. Bloomberg Economics
US economist Stuart, it's not just this month, the worst
three months job growth since the pandemic, and when you
look back to the past couple of months, here massive revisions,
(02:08):
prompting the question how could we be so far off
for so long?
Speaker 5 (02:13):
There are a few things to keep in mind. The
first is that, yes, payroll growth has been marked down.
We always knew that payrolls were being overstated. In particular,
we knew that private payrolls are being overstated. They still
probably are being overstated. We saw eighty three thousand additional
jobs added in the private sector. The revisions that we
saw to pass month's data and the weakness that we
(02:35):
saw in the July report was mostly because of government hiring. Now,
as you spoke with Molly Smith earlier today and she
has a great story about this on the terminal, there
are seasonal adjustment factors at play that are affecting particularly
state and local employment in the field of education. When
those workers were marked as being on payrolls in the
(02:55):
month of June, it didn't fully interact with the season
adjustment factor perfectly. So it's not a true shock that
either payrolls are being marked down or that there are
peculiarities in the interaction between actual headcount and some of
the seasonal adjustment factors that are estimated at the Bureau
(03:16):
of Labor Statistics. Yes, the labor market is cooling. Yes,
today's data validates some of the arguments that we heard
from Governor Waller just two weeks ago today on Bloomberg TV,
where was warning about a cooling labor market. But all
things considered, a zero point one percentage point uptick in
the unemployment rate is really going to be the thing
(03:38):
that matters for the broader swath of members of the
Federal Open Markets Committee, for our monetary policy makers. And
as we heard just this morning from FED, excuse me
from Regional FED President Beth Hammock, she said, Look, hot
inflation right now means that the FED is failing more
on the price stability side of its mandate then it
(04:00):
is on the maximum employment side of its dual mandate,
with just a four point two percent on employment rates.
So I don't think that either the headline numbers, the
revisions to the headline numbers, or the balance of risk
for the FED has really materially changed with today's report.
I see that markets are pricing in a bit more risk,
considerably more risk that the FED would move in September. Yeah,
(04:21):
but all things considered, our base case is still for
a December move, just twenty five basis points in December.
Speaker 2 (04:27):
But where could the labor market ultimately be by then
stored if the FED stands pat for that long.
Speaker 5 (04:32):
Well, Look, we've been expecting the unemployment rate to continue rising,
it would not come as a major shock to me
to see the unemployment rate reaching let's say four and
a half percent at that point. That still puts us
relatively more bbarrash on the labor market than most forecasters
out there. But in terms of where we are in
managing the Fed's balance of risks, with persistent core inflation,
(04:56):
even a four and a half percent on employment rate
might not be enough for the FED to move. And
if it's the case that nominal GDP growth is still
running well above what would be consistent with let's say
the two percent target, that two percent inflation target plus
maybe one percentage point of real growth, I think it's
(05:18):
fair to say that the FED would remain on hold
even if we saw four and a half percent unemployment rate.
Speaker 2 (05:24):
All right, Stuart, we appreciate it as always. Stort Paul
is a US economist for US at Bloomberg Economics. Here
with us on Bloomberg TV and radio and joining us
now for more in our Washington, d C.
Speaker 6 (05:34):
Studio. Is Ben Harris.
Speaker 2 (05:35):
He's vice president and director of Economic Studies at the
Brookings Institution, also former Assistant Secretary for Economic Policy and
chief economist at the Treasury Department. Ben, great to have
you back here and to see you in our studio
as we consider these jobs figures today in the downward revisions,
knowing that just days ago the Fed made the decision
not to ease policy, maybe that would have been a
(05:58):
different decision had they had these figures in hand. Do
you think Chairman Palam maybe made a mistake this week.
Speaker 7 (06:03):
I don't think he made a mistake this week. He's
been put in this impossible position. You've got a labor
market which is clearly in freeze mode. And so my
interpretation of today's report is I don't remember a job's
report that provides so much clarity because it's not just
about the past month, it's about the past three months. Right.
So with the revisions, we are clearly in a situation
(06:24):
where employers are freezing hiring, they're taking care of the
workers they have. We're only adding thirty five thousand jobs
or so a month, and most of that is a
healthcare sector. So you've got a labor market which is frozen.
But on the price's side, it's very clear that we're
in the middle of an inflationary episode because of tariffs, right,
and so you would expect the normal lag to be
three to five months after tariffs are implemented. The Fed
(06:47):
is an impossible position. Prices are rising, the labor market
is stagnant. So I don't think that Pale made a mistake,
but he's been put in this position, a position he
did not ask for.
Speaker 4 (06:54):
How's it going to feel in September if this kind
of deterioration continues.
Speaker 7 (06:58):
So if the labor market is the same and we
see the hikes that we're expecting in prices, yeah, it's
sort of like, what is the worst case? What's what's
the worst shock? So are we seeing prices rise more
than we thought? Or we can see core pcee go
above three percent? If core pce is above three percent,
how can the Fed possibly start cutting? It can't even
(07:19):
if even if the U three is at you know,
four three four four four five, yes, okay, And so
if prices continue to rise, we expect them to I
don't think the Fed can cut and markets disagree right now,
So you see this big one day change between yesterday today.
Yesterday markets thought the cut the Federal cut between one
and two times between the end of the year, between
twenty five and fifty BIPs. Now markets are certain to
(07:41):
cut the federal cut by at least fifty BIPs, maybe
seventy five. But I think that maybe they're misinterpreting the
impact these these higher prices owing to tariffs.
Speaker 2 (07:49):
Well, so let's talk about those tariffs. Obviously, it's August first,
while the levies aren't actually going to be collected until
August seventh, so there's still a bit of wiggle room here.
We're looking, according to Bloomberg Economics, and an aggregate rate
tariff rate on average that's going to move up to
fifteen point two percent. What difference will that ultimately make
in the prices people see at the store and how
it actually tracks into inflation gauges.
Speaker 7 (08:11):
So the rule of thumb is that for every percentage
point increase in the average tariff rate, you see a
point ten increase in the inflation rate. So if you're
going from around a rate of around three percent like
we saw it to being the Trump administration up to fifteen,
we're talking about one point two percentage points increase in inflation,
which is a lot in a short period of time,
and you know, you're starting to see prices get passed
(08:32):
through and exactly the way we would have predicted. So
you can look at things like recreational goods, you can
look at things like home furnishings. These are things we
import from China, and those prices are rising, and so
it's very clear that the tariffs are having inflationary impact.
Speaker 4 (08:46):
We're going to talk with Peter Navarro on the late
edition of Balance of Power. He is sat in that
chair and argued and he would fight with you right
now on the idea that tariffs are inflationary. And you've
heard this line from the White House that when you
have a one time change in prices, that it's a
different phenomenon. You're seeing a trend though that will continue.
Speaker 7 (09:06):
So I don't agree with Peter Navarro on almost anything, understand,
but I do agree that it is a one time shock.
And so when I look at tariffs, I think that
the real concern with them is not the inflationary impact.
For the reasons that Navarro says it's a one time shock.
That's bad news, it's terrible timing. It's a time when
(09:26):
you'd like to see the fedbiale to cut in a can.
The real problem with tariffs are that it has eroded
the United States credibility as a trading partner, and you're
seeing that in terms of not just trading but also investment.
Investment has been stagnant despite this four trillion dollar bill.
And so if you look at sort of the average
teriff rate on China, they're all over the place. Tariffs
(09:48):
start off at ten percent, with twenty percent, they're one
hundred and four percent for a while, one hundred and
forty five. Now they're down to thirty. I don't know
what they're gonna be in three months. Need is Peter
Navarrow needed his President Trump? Who would want to trade
with someone who is rapidly switching prices like that so frequently.
So it's not this one time price shock from tariffs
that really concern me. It's the erosion of our credibility
(10:08):
as a trading partner.
Speaker 2 (10:10):
Well, when we consider the investment question which you raised,
the White House would contend they've had trillions of dollars
in investment pledges coming in from various governments or companies
announcing they're going to be building more manufacturing capacity in
the US, even if some of that money had already
been previously announced as well, Even if it does materialize,
how long does it actually take to translate into more
demand for labor, more American jobs if it were to
(10:33):
work as they say it's designed.
Speaker 7 (10:35):
So the White House has no credibility on this point.
The White House has no credibility on this point because
we have an example in the first Trump administration, we
had that Phase one deal with China. We had hundreds
of billions of dollars of commitments that China had no
intention of fulfilling and that the administration did nothing to
ensure that it was fulfilled. There's outstanding confusion around these
trade deals. Let's just be clear what these trade deals are.
(10:57):
They're frameworks. So the usmca A bill that was signed
in the first Trump administration was eighteen hundred pages. The
trade framework with the UK, which was the most comprehensive
so far, was five These are not trade deals. There's
massive confusion. You can look at the Japanese trade deal,
five hundred and fifty billion dollars in investment pledges. Japan said,
you know, these aren't really investment pledges. These are loans
(11:20):
at market rates. That's the White House called it a
blank check.
Speaker 4 (11:24):
Yeah, and so what happened six months to a year
from now when they're trying to draw down this cash.
Speaker 7 (11:29):
No one knows, No one knows, and so if I
was gonna characterize the US economy right now, it would
be chaos and confusion. And you're seeing that in businesses.
You're seeing businesses, You're seeing from business leaders. They're saying,
I don't know what's going to happen with trade, I
don't know what's going to happen with the regulation. So
what I'm doing is I'm standing patent til there's some clarity.
This is really bad for American business.
Speaker 2 (11:49):
Well, so should it be bad for American markets or
US equity markets? Because until today, where yes, you are
seeing some significant downward pressure, we were hovering around record highs.
It seemed like everybody was in a a pretty good
mood or at the very least willing to look through
the president's latest tariffs.
Speaker 7 (12:04):
Yeah. I think the reason for that is during the
transition between administrations, the way that economists and the way
the financial markets were looking at the Trump administration was
this kind of fight between On the good side, you
have this massive tax cut coming, and you've got widespread deregulation,
and a lot of executives are really excite about that,
and then on the other side you have pretty stark
(12:25):
tariffs and a really aggressive anti immigration platform, and so
you have this fight between these two different factors. It's
clear that the negative impacts of tariffs and going to
zero immigration, which we haven't talked about yet, I think
is a real factor, is beating the positive impacts of
this really expensive tax package and deregulation. So I think
that's what you're seeing in equi markets today.
Speaker 4 (12:45):
Participation in the jobs reports today fell to the lowest
level in months. Does that suggest full employment? People are
sitting on their hands waiting for something. You add a
number of mass deportations, what's that number going to look like,
say the end of this year. So in terms of participation,
(13:06):
when I'm looking at some of the alternative labor market metrics,
you're seeing there are a lot of people who want
to work who aren't And after you spend enough time
looking for a job, you're eventually going to start dropping out.
And so you can expect that to happen. That's what happens,
as you guys know, when economies weekend. In terms of immigration,
I mean, the answer has to be I don't know.
So going back to nineteen ninety Outside of COVID, we
(13:27):
have added in net migration in the United States between
one million and one point eight million people every single year.
This happened during the first Trump administration. It happened during Clinton.
We're about to go close to zero.
Speaker 7 (13:37):
So you look at estimus coming out of my colleagues
at Brookings, we think we're going to be anywhere between
minus five hundred thousand and plus about one hundred and fifty.
We have never seen anything like that, and I don't
know what that means. I don't know what that means
for housing markets. It's probably bad for certain industries like agriculture, fishing,
some manufacturing. But this is this is an unprecedented experiment,
(13:58):
and we're all gonna go in a bit of a
right here.
Speaker 4 (14:00):
We need to stay in touch on a lot of
things here. Ben Harris, it's great to have you back.
Thanks for having with Brookings now of course a veteran
of the Biden Administration's Treasury Department. Great analysis on this
jobs Day and Tariff's day. What are we calling this?
Is this liberation dig again or that's a week from now.
Speaker 2 (14:15):
If it is, it would have to be like.
Speaker 4 (14:16):
August seven, is when they take effect, right, Okay, so
we'll call it that again in a week.
Speaker 1 (14:24):
You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 4 (14:43):
We've been having a little trouble on Wall Street following
the jobs report this morning, the earnings news that you've
been hearing Charlie talk about, and what a busy Friday
this has become Friday news dump. The Corporation for Public
Broadcasting is closing down. We did learn that today, along
with the tariff rates that will be taking effect a
week from now. One of the more important stories that
(15:06):
you may not hear about, and I'm looking at you, Boston,
if you're listening to us now on ninety two nine FM.
It's called DRIVE, a new initiative by the Governor of
Massachusetts and it has everything to do with federal funding
or the lack thereof. DRIVE stands for Discovery, Research and
Innovation for a vibrant economy and Governor Mara Heely is
(15:27):
pushing this idea right now, joining us live from my
former hometown of Boston. Governor Healey, it's great to see you.
Welcome back to Bloomberg TV and Radio. You've carved out
four hundred million dollars here an investment pool to help
create jobs, to help fund research. Anyone who's been to
Boston knows the dozens of research hospitals that are there,
(15:47):
never mind the scores of universities that you have in
the city and across the state. Is this a direct
response to the cuts that have come from the Trump
White House.
Speaker 8 (15:57):
Well, Joe, thanks for having me on, and I'm really
excited about this.
Speaker 6 (16:02):
This is what this is about.
Speaker 8 (16:03):
This is an investment in the Massachusetts economy. It's about
job creation, and it's about the recognition that one in
ten research and development jobs in the United States, one
in ten are here in Massachusetts. We have the highest
percentage of STEM graduates per capital, We receive the greatest
(16:24):
amount of venture funding. We also receive the greatest amount
of NIH funds. Research drives and powers the Massachusetts economy,
and in the face of some uncertainty from the federal
government and sure funding going away.
Speaker 6 (16:37):
In some respects.
Speaker 8 (16:38):
I thought it was really important to lean in and
to send a message not.
Speaker 6 (16:43):
Just to the United States, but to the world.
Speaker 8 (16:46):
If you're an innovator, an entrepreneur, a scientist, a researcher,
Massachusetts is where you want to be.
Speaker 6 (16:52):
We will continue to be.
Speaker 8 (16:53):
A place that powers the world with our research, with
our science, we will continue to be the place that
incubates all those cures and treatments and discoveries that have
really transformed the world. And that is the message that
I'm trying to send with this public investment in research,
which we hope to leverage with additional private dollars to
(17:16):
really make this thing go. I'm very excited about it
and what it's going to mean, not just for Massachusetts
but for the United States.
Speaker 2 (17:25):
Well, Governor, that's what I wanted to ask you, is
you talk about this being about job creation, but in
some degree, if funding is going down, it also has
to be about protecting existing jobs. So is do you
see the need here for this four hundred million dollars
to actually grow to something much more substantial. Does that
number need to get higher ultimately?
Speaker 8 (17:43):
Well, you know, Kaylee, I'd love to see it grow.
It's also the case. Let me just explain when I
talk about research jobs, know that for every research job
here that is funded, that is supported, that is spinning
off so many other jobs, and can instruction in real
estate and hospitality, in restaurants and retail. So it's such
(18:05):
an important catalyst for so much. And when I think
about our incredible teaching hospitals, our colleges and universities, they've
had funding hits, as you know, and that directly impacts
economic growth and progress, not just for Massachusetts but for
the United States because we're competing against China. China is
(18:26):
the one who's looking to recruit our scientists and our
researchers and those who are in our labs today. I
want those folks staying in Massachusetts, staying in the United States,
and I want them to be part, to continue to
be part of what has been so essential to American
GDP and growth and dominance around the world.
Speaker 4 (18:49):
I guess my question for you in this case, Governor,
is would this be necessary if the federal government maintained
the funding that Massachusetts was already injoin or was this
something that you wanted to reach for beyond the federal
funding that you've seen come into Beacon Hill and do
something more for research in Massachusetts. Was this idea underway
(19:12):
before President Trump and the DOGE and the cuts.
Speaker 8 (19:15):
Well, I'll say that the DOGE and the NIH cuts
certainly put a focus on this and not only the
primacy of research here, but the need now to make
sure that is really supported. It's also the case that
we did not see prior to Donald Trump's actions, the
efforts to recruit on our campuses, at our teaching hospitals,
(19:36):
at our pre eminent, world renowned research institutions here in Massachusetts,
the presence of so many people from so many countries
looking to lure American talent and intellectual assets away. So
it absolutely has been precipitated by what we've seen for
the federal government.
Speaker 6 (19:55):
That said, as governor, I would have wanted to.
Speaker 8 (19:58):
Make this investment any ways, because this is about growth
and innovation in our economy, which has always driven Massachusetts
jobs and economic success here.
Speaker 2 (20:10):
Governor. As you well know, President Trump and his administration
are in a bit of a battle with Harvard University specifically,
and there has been reporting in recent days that Harvard
is looking to spend or open to spending at least
up to five hundred million dollars to settle with the administration.
A group of House and Senate Democrats have now sent
a letter to Harvard suggesting there will be a rigorous
(20:31):
investigation if the school ultimately cuts a deal such as that.
What would you advise Harvard to do here?
Speaker 8 (20:37):
Well, I haven't spoken with Harvard about this, and my
hope is Harvard will make a decision that is in
the best interests of academic freedom. I think that's really
important and central to American higher ed. So we'll see
how that goes. But you know, I have expressed my
concerns about what the Trump administration has done in weaponizing,
(20:58):
whether it's DOJ or other things against Harvard and other
universities in an attempt to essentially silence critics, silence academic freedom.
Speaker 6 (21:08):
And you know that's just to me an American governor.
Speaker 4 (21:12):
Heally, you've been pretty outspoken about your opposition toward the
President's tariff regime as well, with Canada specifically in mind.
Speaker 3 (21:20):
Here.
Speaker 4 (21:21):
You launched the Tariff Response and Business Operations Support initiative
to support local business, and you gathered a bunch of
Northeastern governors and Canadian premiers back in June to talk
about this. Canada is really feeling it. They're at thirty
five percent.
Speaker 7 (21:35):
Now.
Speaker 4 (21:35):
It looks like outside of the USMCA, we looked at
the numbers here. Massachusetts exported three billion dollars in goods
to Canada in twenty twenty four, making it the state's
third largest trading partner. What will these tariffs on Canada
mean for your economy?
Speaker 6 (21:52):
Well, tariff's air tax.
Speaker 8 (21:54):
And you know, I'm a governor who is trying to
build housing as quickly as possible in my state. My
lumber comes from Canada, right, So you know that's just
one example of how reckless this is. Canada is our
largest trading partner, of course, and you know the reason
I brought together Canadian premiers and the North Northeast governors
(22:15):
a few weeks ago was to send a message, we
are your friends, we are your allies. We want to
continue to do business with you, We want to continue
to structure energy deals and you know, support tourism and
support trade. I mean, it is so integral to our
economies on both sides of the border. So you know,
it's terribly disappointing, terribly frustrating to see the President continue
(22:38):
to hammer on our great friends to the north, and
it's going to hurt households and businesses here. And that's
why I've tried to be proactive, reaching out, meeting with
my Canadian allies and colleagues, working together with other governors
on this issue, and also supporting our businesses.
Speaker 6 (22:53):
Here who are already feeling it. You know, I'm all
for reshoring.
Speaker 8 (22:57):
Okay, let's let's let's but let's let's be sensible and
smart about what it is that's practical to reshore and
what isn't. And you know, as governor, I'm very focused
on this and just continue to be really dismayed at
the devastation caused by this because it's also the uncertainty.
Right you don't have capital deployed in your state or
(23:17):
in this country. You have people turning away from the
United States for investment. That's not good for American competitiveness,
that is not putting America first.
Speaker 2 (23:29):
Well, when we consider the uncertain nature of the president's
tariff policy, knowing how frequently governor that they have changed
or deadlines have moved, is it so simple for businesses
in Massachusetts the tariffs go away? Okay, great, we can
make a different decision or do they have to think
differently about that. I just wonder to what extent the
impact will be permanent, regardless of the decisions of the president.
Speaker 6 (23:51):
I Cayley.
Speaker 8 (23:52):
That's a great point, because you have to make decisions
judgments in real time about orders right for parts, for supplies,
figure out how you're going to source things, and it
has become incredibly difficult for so many companies to try
to figure this out.
Speaker 6 (24:07):
It's hard for the largest.
Speaker 8 (24:09):
Companies, right, and imagine all the small businesses who have
been affected in Massachusetts and elsewhere. I'll also give you
an example because looking out behind me as the beautiful
Boston skyline, this is the time of year where we
like a lot of people to come tourists, visit New England,
visit Massachusetts.
Speaker 6 (24:26):
All of us are getting killed.
Speaker 8 (24:28):
Tourism numbers are off in New England between twenty and
sixty percent as a result of our treatment, mistreatment of
our Canadian friends who we count on to come here.
So I'll still reach out my hand and hope to
continue to find ways to do business, working with other governors,
working with Canadian premiers, encouraging that because we are in
(24:51):
a global economy, Massachusetts is certainly in a global economy,
and we need certainty, and we need.
Speaker 6 (24:58):
This insanity to be put to bed and rent.
Speaker 4 (25:00):
And I want to ask you, lastly, Governor, about the
effort to read districts in the state of Texas, and
a trend that might become a national one, as Republicans
in Texas redraw the congressional map in an effort to
generate five more seats that President Trump has asked for
that are expected to be Republican seats, an effort to
(25:20):
maintain the Republican majority of every thin majority.
Speaker 7 (25:23):
In the House.
Speaker 4 (25:24):
I bring this up with you because not only are
you a Democratic leader in this country, but we talked
to Senator Ted Cruz about this last night and he
brought up your state of Massachusetts. Listen to what he said.
Speaker 9 (25:37):
I'm in particular amused at the Democrats who are clutching
their pearls, because the Democrats have always been much much
more ruthless in jerrymandering. I'll give you an example the
state of Massachusetts. State of Massachusetts, about thirty five percent
of Massachusetts votes Republican, about sixty to sixty five percent
votes Democrat. Do you know what percent of Massachusetts congressional
(25:58):
delegation is Republican at zero.
Speaker 4 (26:02):
Yeah, they drew it.
Speaker 9 (26:04):
Hit is elected.
Speaker 4 (26:06):
I reminded him of some of the other redistricting phenomena
that have happened that redistricts a couple of lawmakers right
out of their own districts. I'm just wondering if he
has a point there, Governor, and where you'd put the
Republican seat in Massachusetts.
Speaker 6 (26:24):
Well, first of all, I'm not questioning my pearl's senator.
Speaker 8 (26:28):
What I am as a governor who believes in fair representation,
and what's going on in Texas is just you know,
it's an abomination right now, the effort to redraw those maps.
The Senator himself made the point, which is that sixty
five percent of the voters in Massachusetts happened to not
be Republicans. So we end up with a delegation that
is right now all Democrat. But you know, I will
(26:50):
do everything as governor to always ensure that there is
fair play and fair representation. Clearly, you know there are
governors elsewhere a Governor Abbott working together with a g
pack that are not about that. They are about playing
games right now and playing politics to try to retain
a very thin House majority.
Speaker 6 (27:07):
That's what's happening, all right.
Speaker 2 (27:10):
Governor, We thank you so much for joining us here
on Bloomberg TV and Radio Live firm our Boston Bureau.
The Governor of Massachusetts more heally here with us on
balance of power, talking not just redistricting, but of course
the economic impact being felt in Massachusetts by the policies
of the Trump administration, be it cuts to funding for
things like research, or of course the tariff policy of
(27:31):
the President, which is in focus today as we have
the announcement but not necessarily the collection yet of these
duties on a number of our trading partners terras ranging
from a ten percent baseline all the way up to
around forty percent going into effect as of August seventh,
on the very same day that we get a softer
than expected jobs are for it at just seventy three
thousand jobs. So for more on this we turn to
(27:52):
our political panel. Gy Schianzeno is with us Democratic analyst,
Bloomberg Politics contributor and senior Democracy Fellow at the Center
for the Study of the Presidency in Congress, alongside Lisa
Kamusa Miller, Republican strategist, former R. And C communications director
and host of the Friday Reporter podcast, Lisa, When we
consider the President obviously stands by his economic policies. He
has touted the strong gdprefigures we got earlier this week.
(28:15):
He believes tariffs are a good thing for America, not
a bad thing when you put them together with what
we just heard from Governor Healy about how it's already
impacting businesses and potentially hiring decisions with the softer jobs report.
Is he about to face the need to u turn
on this once again.
Speaker 10 (28:33):
Oh, he'll never admit that what he's put in place
is something that should be reversed, but he certainly will
keep an eye on the markets and try to do
everything he can to make it appear like he has won,
that his policies are winning, and that they're doing the
right thing for the American economy. I think, though, that
the market itself this morning reacted not only to the
(28:53):
announcements that he offered last night as it relates to
last minute trade activity, but also this morning keeping a
close on how that's going to all change and react
in a real time. I think that the President probably
is paying very close attention and will continue to retool,
not a retreat, but more in a way to say
he's watching and he's paying attention. He's going to do
(29:14):
whatever it can to make the economy a winner.
Speaker 7 (29:17):
Genie.
Speaker 4 (29:18):
Does Morihieley have a model there for other states around
the country to make up for the lack of federal
funding or is this a Massachusetts specific issue when it
comes to the many universities and research hospitals in that state.
Speaker 11 (29:31):
You know, it really struck me listening to your conversation
with Governor Keeley. What a breath of fresh air. And
this is what you hear more and more from voters.
They are not turning to the federal government. They are
turning to their local and state officials like Governor Keeley,
to say what do we do at this time of
enormous uncertainty. And she does have a plan with this
(29:53):
drive to address what has been taken from the state
as a result of Doze cuts and others. And I
think we will see other governors left and right, Republican
and dencre try to emulate that. But you know, even
more than the specifics, I feel like listening to her
in a very common sense, calm way, she's talking about
(30:16):
what so many people are feeling today as a result
of tariffs, you know, the cuts to the Corporation for
public broadcasting, so much unease. Going on to hear that
there are leaders on the ground who know what people
are feeling and are prepared to address those is a
reassuring and much reassuring needed conversation to have. So I
(30:38):
was very grateful to listen to you all talk to
her about what she's doing for her states so close
to the Canadian border at this time of uncertainty.
Speaker 4 (30:46):
Yeah, well, we appreciate going overtime with our panel here.
Many thanks to Jeanie Shan Say No, Bloomberg Politics contributor
at Lisa Kumuso Miller, former RNC Comms director look for
her Friday Reporter podcast. Many thanks to you both for
the insights.
Speaker 1 (31:02):
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. You
can also listen live on Amazon Alexa from our flagship
New York station, Just Say Alexa Play Bloomberg eleven thirty.
Speaker 4 (31:21):
Market's a big part of the story today in Washington,
as the tariff rates are rolled out. Charlie just mentioned it.
We got a big pile of paper end of the
day yesterday. More of this rolled through the evening here
and we got a whole new date. I was going
to say, you know, happy Liberation Day or whatever this is,
but circle August seven on your calendar. That's the actual date.
(31:41):
I guess this takes hold at twelve oh one am
August seven, So you got a week you still want
to make a deal. Of course, this was all supposed
to take effect today, but we understand that the extra
week was needed for Customs and Border Protection to update
the tariff schedule with all of these new numbers. Fifteen percent,
(32:01):
the big industrialized economies, European Union, in Japan, South Korea.
We talked about that those with a small trade deficit
get fifteen percent, Countries with which the US runs a
trade surplus get ten percent. And if you Canada, well
just I don't know. Called back another time. Jamison Greer
(32:24):
was on Bloomberg TV and radio this morning. The US
Trade representative, of course, had a lot to do with
the outcome. Here's what he said.
Speaker 12 (32:30):
We'll be finishing the paperwork in the next weeks and
maybe a couple of months. But these deals are pretty
much set. They are set right. We wouldn't make an
agreement unless we all knew the contours of it and
the countries knew it. And it's an exciting time because
the president has essentially reset the global trading system, and
so we'll be you know, finalizing everything that's been agreed
to on paper and then monitoring compliance going forward.
Speaker 4 (32:53):
It doesn't look like Wall Street is in love with this.
Not that a lot of this is a surprise. You know,
we've got jobs data that you've been hearing about kind
of confusing things a little bit too. But it's decidedly
lower today. The S and P five hundred is down
seventy five points, more than one percent. Nasdac's down three
fifty one and a half percent. We've got a big
move in the bond market here. The Vicks is back
(33:15):
above nineteen. Even the companies with good earnings look at
Exon Mobile turning negative, down a couple of dollars. Apple
had a nice story to tell. It's down almost five dollars.
And if you miss estimates, boy, you're going to be punished.
Amazon not inspired by the forecast. It's down eighteen dollars
or eight percent. So we've got a lot at play here,
(33:37):
but we want to talk about the fact that we
actually have these numbers now, the tariffs, and as well,
what's happening on Capitol Hill. With our good friend Patrick McHenry,
Bloomberg Politics contributor. I always love saying that the former
Republican congressman, former Chair Financial Services who actually held the
speaker's gavel for a short time. Mister mckenry, Great to
see you. Happy Friday. The President was talking about Powell
(34:01):
earlier today on Truth Social as he's been known to
do too little, too late, He writes, Jerome too late.
Powell is a disaster. Drop the rate. It's funny Donald
Trump never, i guess, talks like this to his face.
But is he starting to sound like he's on the
right side of history. It's time to start cutting. What
do you think, well, I.
Speaker 13 (34:22):
Think it is. But look, the Federal Reserve is an
independent monetary authority in our system. It's well designed that way.
The Supreme Court degrees this is long standing a practice
for the United States. That's one. Two. There is the
political effect here, which is when the American people see
(34:44):
an economy that they don't like, who is to blame
in the presence, reminding them to blame the Federal Reserve,
not the Republicans they elected to run Washington. So that
is a useful political tool, that is at the present
it disposal that this president is use more than other presidents.
But he's not the only one to use this. They
(35:06):
complain of the Federal Reserve system LBJ and FDR. We're
quite notable in using it as well. So he's not
the first, but he is obviously the loudest and the
most adept at stoking those flames.
Speaker 4 (35:21):
We tend to think of Patrick McHenry as an old
style conservative Republican Allah Ronald Reagan, correct me if I'm wrong.
Speaker 7 (35:29):
Congressman's that's about right.
Speaker 4 (35:32):
Tariffs are not part of that ideology. Where are you
with this tariff regime now that we actually have the numbers,
and how worried are you about what happens to the
economy in the second half of the year.
Speaker 13 (35:45):
Well, there are two issues here. One is allowing China
to come into the first world trading regime but getting
the rules of the third World. And so I think
think some of our trading agreements have benefited other countries
to a much more substantial impact to them than to us.
(36:10):
We've given away a lot of our native industries and
some of these deals. So while you could be a
free trader, you don't have to necessarily agree with the
contours of each one of the trading regimes that we
set up each negotiation. The president's resetting that, and he
believes by resetting these tariffs we were going to get
back to a much more normative set of competition and
(36:34):
in this global trading regime. So some of this is
quite practical. This is why you haven't seen Hill Republicans
who are free traders speak up in any organized fashion.
So that is what he's speaking to. Now how he
does it, of course, Look, I mean as somebody who
thinks we have benefited overall by being the biggest trading
(36:57):
partner in the world. That has given us the ability
of a strong dollar, policy, has made us the reserve
currency for the world, has given us a greater part
borrowing power. There are a lot of benefits that have
come from our strength as a trading part I think
we have to maintain that edge, and we have to
be the place that people want to come to. That
(37:19):
people intellectual property come to place for capital and also
a place that leads the world in trade, and we
don't want to undermine that. So that's the countervailing piece
that I think has not been hotly pushed back on
this administration. I think it should be sharpened up.
Speaker 4 (37:40):
Interesting. Well, you know, we love talking to you because
you have a real sensitivity to the economy here and
of course, following your chairmanship, you have such a good
sense of what this means for the Federal Reserve when
we start talking about interest rates, the idea that this
could creep into the data, but we've also got this
software that expected jobs report to and you know a
lot of people the narrative out there is j Powell
(38:02):
would have been cutting in February if it were not
for Donald Trump himself and the tariff regime. Do you
believe that? And do you think that we do see
some kind of inflation spike in the next few months.
Speaker 13 (38:14):
Well, I think that's what the market's trying to figure out.
But the president has been given the benefit of doubt
by elected official, like by other Republicans in Washington, because
you've not seen the economic harm of this tariff fight.
And I think there is a notion in understanding that
the real culmination of all this discussion about tariffs is
(38:40):
the trading relationship with China and the world, and everything
that the President has done this year with the national security,
international presence and security negotiations and endeavors and tariff conversations
are all laying the predicate for a big deal with China,
and so they want to see that. They want to
(39:01):
see that big deal, and they're willing to go along
with you know, less optimistic economic data in order to
get to that deal. I think the markets see that.
But the data is now showing that this uncertainty and
this cost structure is creating a burden on the US economy.
The question is to the extent, and I think that
(39:23):
that's why the market is I think that's why you're
seeing VIS up and Congress is out, and so I
don't think you're going to hear much until September about
tariffs or any discussion about the effects.
Speaker 4 (39:39):
Well, of course, the whole conversation when members come back
is going to be about a shutdown. I know you're
hearing this as well as we are. Democrats say they're
out because of the decisions package. Do you think we
shut down.
Speaker 7 (39:49):
In the fall.
Speaker 13 (39:50):
I think so. I think you need Democratic votes to
the Senate United States Senate in order to keep the
government open. I think what you will see as a
move for a continued to keep the government open, and
that passed the House, and then it gets to the Senate,
and it's really up to the Senate minority, the Democrats,
on whether or not they're going to allow that to
(40:10):
go to the president's desk. I think theirve the incentives
right now for Chuck Schumer and the Democrat leadership in
Washington is to show they have some fight, that they're
going to fight President Trump, and so they're going to
try to lay the blame of a government shut down
at the president's fee. It's going to be a huge
battle for the fall, and I think that will cloud
(40:32):
the rest of the debate, the public policy debate that
could otherwise be quite bipartisan.
Speaker 4 (40:37):
It's amazing how predictable this seems to be here. Patrick McHenry,
I have to ask you about what's going on in
your home state before you leave us. There's a new
poll out on the North Carolina Senate race now that
your former governor Roy Cooper has jumped in here. Emerson
College Polling finds Cooper with a six point lead in
(40:58):
this race over Michael Wattley to you've got twelve percent undecided.
Does this sound right to you? And how much of
an uphill battle will Michael Whatley have in this race?
Speaker 13 (41:10):
So two things, there's something for everyone in this poll.
If you're Roy Cooper, you said, well, look, I'm leading
got in the race. Now you have a Democratic lead
for what is a current Republican held seat, So they
get to have that narrative. But the Republicans have the
narrative of saying, we've got a guy who's never been
elected to anything and he's within six points of a
(41:35):
popular two term Democratic governor this and so therefore, what
we know is that this will be a very expensive,
probably the most expensive Senate race in the country this
election cycle, and it will be a nasty dog fight
based off the fact that we are a narrowly Republican.
North Carolina is a narrowly divided state. So watch out.
(41:58):
It's going to be long, long and nasty.
Speaker 4 (42:02):
God knows that. We heard from Donald Trump on this.
He posted about this as well on truth Social Michael
Wattley has my complete and total endorsement. This is the
bottom of a very long post. He will never let
you down. All caps, exclamation point. We're gonna have to
keep talking about this one. Patrick McHenry, I hope you're
having a great summer, and thank you for chiming in
as always, Bloomberg Politics contributor former Republican Congressman Patrick McHenry
(42:25):
with his view on the Friday edition here of Balance
of Power. Really fascinating to look at these polling results
in again, what will likely be the most expensive Senate
contest is going to have to be between North Carolina
and Texas here right. Thanks for listening to the Balance
of Power podcast. Make sure to subscribe if you haven't already,
(42:47):
at Apple, Spotify, or wherever you get your podcasts, and
you can find us live every weekday from Washington, DC
at noontime Eastern at Bloomberg dot com.
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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Speaker 2 (00:25):
Both the equity and pond market having a strong reaction
to today's non farm payrolls report just seventy thousand or
seventy three thousand jobs added Downwarder visions also something to
pay attention to, as we're looking at over the course
of the last three months, on average, the slowest jobs
growth we have seen since back in the pandemic era,
raising the question as to whether or not maybe it
(00:46):
was Governor Waller, not Chairman Powell, who was singing the
right tune at the Fed's decision this week to not
lower interest rates. Waller, of course, was citing concern over
the labor market, and as we consider the overall state
of the labor we actually had a chance here at
Bloomberg TV and Radio to catch up with the Labor Secretary,
Lori Shabs Dreamer earlier today, and this is how she
(01:07):
characterized the.
Speaker 3 (01:07):
Figures certainly, we know they could have been better, but
you know, we look at the positive because we still
have a net positive almost a half a million new
jobs since the President took office. What has happened on
the ground, the one big beautiful bill by Congress, the
President leaning in and keeping the promises made by negotiating
fair trade deals for the American workforce. And now what
(01:30):
we need is the Federal Reserve to jump in and
lower those interest rates. I talked to businesses just yesterday
who said, you know, we've invested in our American workers,
We're paying attention to our facilities. We're wanting to invest
in borrow more money, but they're concerned with borrowing that
more money.
Speaker 4 (01:47):
So how did everybody get this so wrong? Stuart Paul
joins us from World headquarters in New York. Bloomberg Economics
US economist Stuart, it's not just this month, the worst
three months job growth since the pandemic, and when you
look back to the past couple of months, here massive revisions,
(02:08):
prompting the question how could we be so far off
for so long?
Speaker 5 (02:13):
There are a few things to keep in mind. The
first is that, yes, payroll growth has been marked down.
We always knew that payrolls were being overstated. In particular,
we knew that private payrolls are being overstated. They still
probably are being overstated. We saw eighty three thousand additional
jobs added in the private sector. The revisions that we
saw to pass month's data and the weakness that we
(02:35):
saw in the July report was mostly because of government hiring. Now,
as you spoke with Molly Smith earlier today and she
has a great story about this on the terminal, there
are seasonal adjustment factors at play that are affecting particularly
state and local employment in the field of education. When
those workers were marked as being on payrolls in the
(02:55):
month of June, it didn't fully interact with the season
adjustment factor perfectly. So it's not a true shock that
either payrolls are being marked down or that there are
peculiarities in the interaction between actual headcount and some of
the seasonal adjustment factors that are estimated at the Bureau
(03:16):
of Labor Statistics. Yes, the labor market is cooling. Yes,
today's data validates some of the arguments that we heard
from Governor Waller just two weeks ago today on Bloomberg TV,
where was warning about a cooling labor market. But all
things considered, a zero point one percentage point uptick in
the unemployment rate is really going to be the thing
(03:38):
that matters for the broader swath of members of the
Federal Open Markets Committee, for our monetary policy makers. And
as we heard just this morning from FED, excuse me
from Regional FED President Beth Hammock, she said, Look, hot
inflation right now means that the FED is failing more
on the price stability side of its mandate then it
(04:00):
is on the maximum employment side of its dual mandate,
with just a four point two percent on employment rates.
So I don't think that either the headline numbers, the
revisions to the headline numbers, or the balance of risk
for the FED has really materially changed with today's report.
I see that markets are pricing in a bit more risk,
considerably more risk that the FED would move in September. Yeah,
(04:21):
but all things considered, our base case is still for
a December move, just twenty five basis points in December.
Speaker 2 (04:27):
But where could the labor market ultimately be by then
stored if the FED stands pat for that long.
Speaker 5 (04:32):
Well, Look, we've been expecting the unemployment rate to continue rising,
it would not come as a major shock to me
to see the unemployment rate reaching let's say four and
a half percent at that point. That still puts us
relatively more bbarrash on the labor market than most forecasters
out there. But in terms of where we are in
managing the Fed's balance of risks, with persistent core inflation,
(04:56):
even a four and a half percent on employment rate
might not be enough for the FED to move. And
if it's the case that nominal GDP growth is still
running well above what would be consistent with let's say
the two percent target, that two percent inflation target plus
maybe one percentage point of real growth, I think it's
(05:18):
fair to say that the FED would remain on hold
even if we saw four and a half percent unemployment rate.
Speaker 2 (05:24):
All right, Stuart, we appreciate it as always. Stort Paul
is a US economist for US at Bloomberg Economics. Here
with us on Bloomberg TV and radio and joining us
now for more in our Washington, d C.
Speaker 6 (05:34):
Studio. Is Ben Harris.
Speaker 2 (05:35):
He's vice president and director of Economic Studies at the
Brookings Institution, also former Assistant Secretary for Economic Policy and
chief economist at the Treasury Department. Ben, great to have
you back here and to see you in our studio
as we consider these jobs figures today in the downward revisions,
knowing that just days ago the Fed made the decision
not to ease policy, maybe that would have been a
(05:58):
different decision had they had these figures in hand. Do
you think Chairman Palam maybe made a mistake this week.
Speaker 7 (06:03):
I don't think he made a mistake this week. He's
been put in this impossible position. You've got a labor
market which is clearly in freeze mode. And so my
interpretation of today's report is I don't remember a job's
report that provides so much clarity because it's not just
about the past month, it's about the past three months. Right.
So with the revisions, we are clearly in a situation
(06:24):
where employers are freezing hiring, they're taking care of the
workers they have. We're only adding thirty five thousand jobs
or so a month, and most of that is a
healthcare sector. So you've got a labor market which is frozen.
But on the price's side, it's very clear that we're
in the middle of an inflationary episode because of tariffs, right,
and so you would expect the normal lag to be
three to five months after tariffs are implemented. The Fed
(06:47):
is an impossible position. Prices are rising, the labor market
is stagnant. So I don't think that Pale made a mistake,
but he's been put in this position, a position he
did not ask for.
Speaker 4 (06:54):
How's it going to feel in September if this kind
of deterioration continues.
Speaker 7 (06:58):
So if the labor market is the same and we
see the hikes that we're expecting in prices, yeah, it's
sort of like, what is the worst case? What's what's
the worst shock? So are we seeing prices rise more
than we thought? Or we can see core pcee go
above three percent? If core pce is above three percent,
how can the Fed possibly start cutting? It can't even
(07:19):
if even if the U three is at you know,
four three four four four five, yes, okay, And so
if prices continue to rise, we expect them to I
don't think the Fed can cut and markets disagree right now,
So you see this big one day change between yesterday today.
Yesterday markets thought the cut the Federal cut between one
and two times between the end of the year, between
twenty five and fifty BIPs. Now markets are certain to
(07:41):
cut the federal cut by at least fifty BIPs, maybe
seventy five. But I think that maybe they're misinterpreting the
impact these these higher prices owing to tariffs.
Speaker 2 (07:49):
Well, so let's talk about those tariffs. Obviously, it's August first,
while the levies aren't actually going to be collected until
August seventh, so there's still a bit of wiggle room here.
We're looking, according to Bloomberg Economics, and an aggregate rate
tariff rate on average that's going to move up to
fifteen point two percent. What difference will that ultimately make
in the prices people see at the store and how
it actually tracks into inflation gauges.
Speaker 7 (08:11):
So the rule of thumb is that for every percentage
point increase in the average tariff rate, you see a
point ten increase in the inflation rate. So if you're
going from around a rate of around three percent like
we saw it to being the Trump administration up to fifteen,
we're talking about one point two percentage points increase in inflation,
which is a lot in a short period of time,
and you know, you're starting to see prices get passed
(08:32):
through and exactly the way we would have predicted. So
you can look at things like recreational goods, you can
look at things like home furnishings. These are things we
import from China, and those prices are rising, and so
it's very clear that the tariffs are having inflationary impact.
Speaker 4 (08:46):
We're going to talk with Peter Navarro on the late
edition of Balance of Power. He is sat in that
chair and argued and he would fight with you right
now on the idea that tariffs are inflationary. And you've
heard this line from the White House that when you
have a one time change in prices, that it's a
different phenomenon. You're seeing a trend though that will continue.
Speaker 7 (09:06):
So I don't agree with Peter Navarro on almost anything, understand,
but I do agree that it is a one time shock.
And so when I look at tariffs, I think that
the real concern with them is not the inflationary impact.
For the reasons that Navarro says it's a one time shock.
That's bad news, it's terrible timing. It's a time when
(09:26):
you'd like to see the fedbiale to cut in a can.
The real problem with tariffs are that it has eroded
the United States credibility as a trading partner, and you're
seeing that in terms of not just trading but also investment.
Investment has been stagnant despite this four trillion dollar bill.
And so if you look at sort of the average
teriff rate on China, they're all over the place. Tariffs
(09:48):
start off at ten percent, with twenty percent, they're one
hundred and four percent for a while, one hundred and
forty five. Now they're down to thirty. I don't know
what they're gonna be in three months. Need is Peter
Navarrow needed his President Trump? Who would want to trade
with someone who is rapidly switching prices like that so frequently.
So it's not this one time price shock from tariffs
that really concern me. It's the erosion of our credibility
(10:08):
as a trading partner.
Speaker 2 (10:10):
Well, when we consider the investment question which you raised,
the White House would contend they've had trillions of dollars
in investment pledges coming in from various governments or companies
announcing they're going to be building more manufacturing capacity in
the US, even if some of that money had already
been previously announced as well, Even if it does materialize,
how long does it actually take to translate into more
demand for labor, more American jobs if it were to
(10:33):
work as they say it's designed.
Speaker 7 (10:35):
So the White House has no credibility on this point.
The White House has no credibility on this point because
we have an example in the first Trump administration, we
had that Phase one deal with China. We had hundreds
of billions of dollars of commitments that China had no
intention of fulfilling and that the administration did nothing to
ensure that it was fulfilled. There's outstanding confusion around these
trade deals. Let's just be clear what these trade deals are.
(10:57):
They're frameworks. So the usmca A bill that was signed
in the first Trump administration was eighteen hundred pages. The
trade framework with the UK, which was the most comprehensive
so far, was five These are not trade deals. There's
massive confusion. You can look at the Japanese trade deal,
five hundred and fifty billion dollars in investment pledges. Japan said,
you know, these aren't really investment pledges. These are loans
(11:20):
at market rates. That's the White House called it a
blank check.
Speaker 4 (11:24):
Yeah, and so what happened six months to a year
from now when they're trying to draw down this cash.
Speaker 7 (11:29):
No one knows, No one knows, and so if I
was gonna characterize the US economy right now, it would
be chaos and confusion. And you're seeing that in businesses.
You're seeing businesses, You're seeing from business leaders. They're saying,
I don't know what's going to happen with trade, I
don't know what's going to happen with the regulation. So
what I'm doing is I'm standing patent til there's some clarity.
This is really bad for American business.
Speaker 2 (11:49):
Well, so should it be bad for American markets or
US equity markets? Because until today, where yes, you are
seeing some significant downward pressure, we were hovering around record highs.
It seemed like everybody was in a a pretty good
mood or at the very least willing to look through
the president's latest tariffs.
Speaker 7 (12:04):
Yeah. I think the reason for that is during the
transition between administrations, the way that economists and the way
the financial markets were looking at the Trump administration was
this kind of fight between On the good side, you
have this massive tax cut coming, and you've got widespread deregulation,
and a lot of executives are really excite about that,
and then on the other side you have pretty stark
(12:25):
tariffs and a really aggressive anti immigration platform, and so
you have this fight between these two different factors. It's
clear that the negative impacts of tariffs and going to
zero immigration, which we haven't talked about yet, I think
is a real factor, is beating the positive impacts of
this really expensive tax package and deregulation. So I think
that's what you're seeing in equi markets today.
Speaker 4 (12:45):
Participation in the jobs reports today fell to the lowest
level in months. Does that suggest full employment? People are
sitting on their hands waiting for something. You add a
number of mass deportations, what's that number going to look like,
say the end of this year. So in terms of participation,
(13:06):
when I'm looking at some of the alternative labor market metrics,
you're seeing there are a lot of people who want
to work who aren't And after you spend enough time
looking for a job, you're eventually going to start dropping out.
And so you can expect that to happen. That's what happens,
as you guys know, when economies weekend. In terms of immigration,
I mean, the answer has to be I don't know.
So going back to nineteen ninety Outside of COVID, we
(13:27):
have added in net migration in the United States between
one million and one point eight million people every single year.
This happened during the first Trump administration. It happened during Clinton.
We're about to go close to zero.
Speaker 7 (13:37):
So you look at estimus coming out of my colleagues
at Brookings, we think we're going to be anywhere between
minus five hundred thousand and plus about one hundred and fifty.
We have never seen anything like that, and I don't
know what that means. I don't know what that means
for housing markets. It's probably bad for certain industries like agriculture, fishing,
some manufacturing. But this is this is an unprecedented experiment,
(13:58):
and we're all gonna go in a bit of a
right here.
Speaker 4 (14:00):
We need to stay in touch on a lot of
things here. Ben Harris, it's great to have you back.
Thanks for having with Brookings now of course a veteran
of the Biden Administration's Treasury Department. Great analysis on this
jobs Day and Tariff's day. What are we calling this?
Is this liberation dig again or that's a week from now.
Speaker 2 (14:15):
If it is, it would have to be like.
Speaker 4 (14:16):
August seven, is when they take effect, right, Okay, so
we'll call it that again in a week.
Speaker 1 (14:24):
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.
You can also listen live on Amazon Alexa from our
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Speaker 4 (14:43):
We've been having a little trouble on Wall Street following
the jobs report this morning, the earnings news that you've
been hearing Charlie talk about, and what a busy Friday
this has become Friday news dump. The Corporation for Public
Broadcasting is closing down. We did learn that today, along
with the tariff rates that will be taking effect a
week from now. One of the more important stories that
(15:06):
you may not hear about, and I'm looking at you, Boston,
if you're listening to us now on ninety two nine FM.
It's called DRIVE, a new initiative by the Governor of
Massachusetts and it has everything to do with federal funding
or the lack thereof. DRIVE stands for Discovery, Research and
Innovation for a vibrant economy and Governor Mara Heely is
(15:27):
pushing this idea right now, joining us live from my
former hometown of Boston. Governor Healey, it's great to see you.
Welcome back to Bloomberg TV and Radio. You've carved out
four hundred million dollars here an investment pool to help
create jobs, to help fund research. Anyone who's been to
Boston knows the dozens of research hospitals that are there,
(15:47):
never mind the scores of universities that you have in
the city and across the state. Is this a direct
response to the cuts that have come from the Trump
White House.
Speaker 8 (15:57):
Well, Joe, thanks for having me on, and I'm really
excited about this.
Speaker 6 (16:02):
This is what this is about.
Speaker 8 (16:03):
This is an investment in the Massachusetts economy. It's about
job creation, and it's about the recognition that one in
ten research and development jobs in the United States, one
in ten are here in Massachusetts. We have the highest
percentage of STEM graduates per capital, We receive the greatest
(16:24):
amount of venture funding. We also receive the greatest amount
of NIH funds. Research drives and powers the Massachusetts economy,
and in the face of some uncertainty from the federal
government and sure funding going away.
Speaker 6 (16:37):
In some respects.
Speaker 8 (16:38):
I thought it was really important to lean in and
to send a message not.
Speaker 6 (16:43):
Just to the United States, but to the world.
Speaker 8 (16:46):
If you're an innovator, an entrepreneur, a scientist, a researcher,
Massachusetts is where you want to be.
Speaker 6 (16:52):
We will continue to be.
Speaker 8 (16:53):
A place that powers the world with our research, with
our science, we will continue to be the place that
incubates all those cures and treatments and discoveries that have
really transformed the world. And that is the message that
I'm trying to send with this public investment in research,
which we hope to leverage with additional private dollars to
(17:16):
really make this thing go. I'm very excited about it
and what it's going to mean, not just for Massachusetts
but for the United States.
Speaker 2 (17:25):
Well, Governor, that's what I wanted to ask you, is
you talk about this being about job creation, but in
some degree, if funding is going down, it also has
to be about protecting existing jobs. So is do you
see the need here for this four hundred million dollars
to actually grow to something much more substantial. Does that
number need to get higher ultimately?
Speaker 8 (17:43):
Well, you know, Kaylee, I'd love to see it grow.
It's also the case. Let me just explain when I
talk about research jobs, know that for every research job
here that is funded, that is supported, that is spinning
off so many other jobs, and can instruction in real
estate and hospitality, in restaurants and retail. So it's such
(18:05):
an important catalyst for so much. And when I think
about our incredible teaching hospitals, our colleges and universities, they've
had funding hits, as you know, and that directly impacts
economic growth and progress, not just for Massachusetts but for
the United States because we're competing against China. China is
(18:26):
the one who's looking to recruit our scientists and our
researchers and those who are in our labs today. I
want those folks staying in Massachusetts, staying in the United States,
and I want them to be part, to continue to
be part of what has been so essential to American
GDP and growth and dominance around the world.
Speaker 4 (18:49):
I guess my question for you in this case, Governor,
is would this be necessary if the federal government maintained
the funding that Massachusetts was already injoin or was this
something that you wanted to reach for beyond the federal
funding that you've seen come into Beacon Hill and do
something more for research in Massachusetts. Was this idea underway
(19:12):
before President Trump and the DOGE and the cuts.
Speaker 8 (19:15):
Well, I'll say that the DOGE and the NIH cuts
certainly put a focus on this and not only the
primacy of research here, but the need now to make
sure that is really supported. It's also the case that
we did not see prior to Donald Trump's actions, the
efforts to recruit on our campuses, at our teaching hospitals,
(19:36):
at our pre eminent, world renowned research institutions here in Massachusetts,
the presence of so many people from so many countries
looking to lure American talent and intellectual assets away. So
it absolutely has been precipitated by what we've seen for
the federal government.
Speaker 6 (19:55):
That said, as governor, I would have wanted to.
Speaker 8 (19:58):
Make this investment any ways, because this is about growth
and innovation in our economy, which has always driven Massachusetts
jobs and economic success here.
Speaker 2 (20:10):
Governor. As you well know, President Trump and his administration
are in a bit of a battle with Harvard University specifically,
and there has been reporting in recent days that Harvard
is looking to spend or open to spending at least
up to five hundred million dollars to settle with the administration.
A group of House and Senate Democrats have now sent
a letter to Harvard suggesting there will be a rigorous
(20:31):
investigation if the school ultimately cuts a deal such as that.
What would you advise Harvard to do here?
Speaker 8 (20:37):
Well, I haven't spoken with Harvard about this, and my
hope is Harvard will make a decision that is in
the best interests of academic freedom. I think that's really
important and central to American higher ed. So we'll see
how that goes. But you know, I have expressed my
concerns about what the Trump administration has done in weaponizing,
(20:58):
whether it's DOJ or other things against Harvard and other
universities in an attempt to essentially silence critics, silence academic freedom.
Speaker 6 (21:08):
And you know that's just to me an American governor.
Speaker 4 (21:12):
Heally, you've been pretty outspoken about your opposition toward the
President's tariff regime as well, with Canada specifically in mind.
Speaker 3 (21:20):
Here.
Speaker 4 (21:21):
You launched the Tariff Response and Business Operations Support initiative
to support local business, and you gathered a bunch of
Northeastern governors and Canadian premiers back in June to talk
about this. Canada is really feeling it. They're at thirty
five percent.
Speaker 7 (21:35):
Now.
Speaker 4 (21:35):
It looks like outside of the USMCA, we looked at
the numbers here. Massachusetts exported three billion dollars in goods
to Canada in twenty twenty four, making it the state's
third largest trading partner. What will these tariffs on Canada
mean for your economy?
Speaker 6 (21:52):
Well, tariff's air tax.
Speaker 8 (21:54):
And you know, I'm a governor who is trying to
build housing as quickly as possible in my state. My
lumber comes from Canada, right, So you know that's just
one example of how reckless this is. Canada is our
largest trading partner, of course, and you know the reason
I brought together Canadian premiers and the North Northeast governors
(22:15):
a few weeks ago was to send a message, we
are your friends, we are your allies. We want to
continue to do business with you, We want to continue
to structure energy deals and you know, support tourism and
support trade. I mean, it is so integral to our
economies on both sides of the border. So you know,
it's terribly disappointing, terribly frustrating to see the President continue
(22:38):
to hammer on our great friends to the north, and
it's going to hurt households and businesses here. And that's
why I've tried to be proactive, reaching out, meeting with
my Canadian allies and colleagues, working together with other governors
on this issue, and also supporting our businesses.
Speaker 6 (22:53):
Here who are already feeling it. You know, I'm all
for reshoring.
Speaker 8 (22:57):
Okay, let's let's let's but let's let's be sensible and
smart about what it is that's practical to reshore and
what isn't. And you know, as governor, I'm very focused
on this and just continue to be really dismayed at
the devastation caused by this because it's also the uncertainty.
Right you don't have capital deployed in your state or
(23:17):
in this country. You have people turning away from the
United States for investment. That's not good for American competitiveness,
that is not putting America first.
Speaker 2 (23:29):
Well, when we consider the uncertain nature of the president's
tariff policy, knowing how frequently governor that they have changed
or deadlines have moved, is it so simple for businesses
in Massachusetts the tariffs go away? Okay, great, we can
make a different decision or do they have to think
differently about that. I just wonder to what extent the
impact will be permanent, regardless of the decisions of the president.
Speaker 6 (23:51):
I Cayley.
Speaker 8 (23:52):
That's a great point, because you have to make decisions
judgments in real time about orders right for parts, for supplies,
figure out how you're going to source things, and it
has become incredibly difficult for so many companies to try
to figure this out.
Speaker 6 (24:07):
It's hard for the largest.
Speaker 8 (24:09):
Companies, right, and imagine all the small businesses who have
been affected in Massachusetts and elsewhere. I'll also give you
an example because looking out behind me as the beautiful
Boston skyline, this is the time of year where we
like a lot of people to come tourists, visit New England,
visit Massachusetts.
Speaker 6 (24:26):
All of us are getting killed.
Speaker 8 (24:28):
Tourism numbers are off in New England between twenty and
sixty percent as a result of our treatment, mistreatment of
our Canadian friends who we count on to come here.
So I'll still reach out my hand and hope to
continue to find ways to do business, working with other governors,
working with Canadian premiers, encouraging that because we are in
(24:51):
a global economy, Massachusetts is certainly in a global economy,
and we need certainty, and we need.
Speaker 6 (24:58):
This insanity to be put to bed and rent.
Speaker 4 (25:00):
And I want to ask you, lastly, Governor, about the
effort to read districts in the state of Texas, and
a trend that might become a national one, as Republicans
in Texas redraw the congressional map in an effort to
generate five more seats that President Trump has asked for
that are expected to be Republican seats, an effort to
(25:20):
maintain the Republican majority of every thin majority.
Speaker 7 (25:23):
In the House.
Speaker 4 (25:24):
I bring this up with you because not only are
you a Democratic leader in this country, but we talked
to Senator Ted Cruz about this last night and he
brought up your state of Massachusetts. Listen to what he said.
Speaker 9 (25:37):
I'm in particular amused at the Democrats who are clutching
their pearls, because the Democrats have always been much much
more ruthless in jerrymandering. I'll give you an example the
state of Massachusetts. State of Massachusetts, about thirty five percent
of Massachusetts votes Republican, about sixty to sixty five percent
votes Democrat. Do you know what percent of Massachusetts congressional
(25:58):
delegation is Republican at zero.
Speaker 4 (26:02):
Yeah, they drew it.
Speaker 9 (26:04):
Hit is elected.
Speaker 4 (26:06):
I reminded him of some of the other redistricting phenomena
that have happened that redistricts a couple of lawmakers right
out of their own districts. I'm just wondering if he
has a point there, Governor, and where you'd put the
Republican seat in Massachusetts.
Speaker 6 (26:24):
Well, first of all, I'm not questioning my pearl's senator.
Speaker 8 (26:28):
What I am as a governor who believes in fair representation,
and what's going on in Texas is just you know,
it's an abomination right now, the effort to redraw those maps.
The Senator himself made the point, which is that sixty
five percent of the voters in Massachusetts happened to not
be Republicans. So we end up with a delegation that
is right now all Democrat. But you know, I will
(26:50):
do everything as governor to always ensure that there is
fair play and fair representation. Clearly, you know there are
governors elsewhere a Governor Abbott working together with a g
pack that are not about that. They are about playing
games right now and playing politics to try to retain
a very thin House majority.
Speaker 6 (27:07):
That's what's happening, all right.
Speaker 2 (27:10):
Governor, We thank you so much for joining us here
on Bloomberg TV and Radio Live firm our Boston Bureau.
The Governor of Massachusetts more heally here with us on
balance of power, talking not just redistricting, but of course
the economic impact being felt in Massachusetts by the policies
of the Trump administration, be it cuts to funding for
things like research, or of course the tariff policy of
(27:31):
the President, which is in focus today as we have
the announcement but not necessarily the collection yet of these
duties on a number of our trading partners terras ranging
from a ten percent baseline all the way up to
around forty percent going into effect as of August seventh,
on the very same day that we get a softer
than expected jobs are for it at just seventy three
thousand jobs. So for more on this we turn to
(27:52):
our political panel. Gy Schianzeno is with us Democratic analyst,
Bloomberg Politics contributor and senior Democracy Fellow at the Center
for the Study of the Presidency in Congress, alongside Lisa
Kamusa Miller, Republican strategist, former R. And C communications director
and host of the Friday Reporter podcast, Lisa, When we
consider the President obviously stands by his economic policies. He
has touted the strong gdprefigures we got earlier this week.
(28:15):
He believes tariffs are a good thing for America, not
a bad thing when you put them together with what
we just heard from Governor Healy about how it's already
impacting businesses and potentially hiring decisions with the softer jobs report.
Is he about to face the need to u turn
on this once again.
Speaker 10 (28:33):
Oh, he'll never admit that what he's put in place
is something that should be reversed, but he certainly will
keep an eye on the markets and try to do
everything he can to make it appear like he has won,
that his policies are winning, and that they're doing the
right thing for the American economy. I think, though, that
the market itself this morning reacted not only to the
(28:53):
announcements that he offered last night as it relates to
last minute trade activity, but also this morning keeping a
close on how that's going to all change and react
in a real time. I think that the President probably
is paying very close attention and will continue to retool,
not a retreat, but more in a way to say
he's watching and he's paying attention. He's going to do
(29:14):
whatever it can to make the economy a winner.
Speaker 7 (29:17):
Genie.
Speaker 4 (29:18):
Does Morihieley have a model there for other states around
the country to make up for the lack of federal
funding or is this a Massachusetts specific issue when it
comes to the many universities and research hospitals in that state.
Speaker 11 (29:31):
You know, it really struck me listening to your conversation
with Governor Keeley. What a breath of fresh air. And
this is what you hear more and more from voters.
They are not turning to the federal government. They are
turning to their local and state officials like Governor Keeley,
to say what do we do at this time of
enormous uncertainty. And she does have a plan with this
(29:53):
drive to address what has been taken from the state
as a result of Doze cuts and others. And I
think we will see other governors left and right, Republican
and dencre try to emulate that. But you know, even
more than the specifics, I feel like listening to her
in a very common sense, calm way, she's talking about
(30:16):
what so many people are feeling today as a result
of tariffs, you know, the cuts to the Corporation for
public broadcasting, so much unease. Going on to hear that
there are leaders on the ground who know what people
are feeling and are prepared to address those is a
reassuring and much reassuring needed conversation to have. So I
(30:38):
was very grateful to listen to you all talk to
her about what she's doing for her states so close
to the Canadian border at this time of uncertainty.
Speaker 4 (30:46):
Yeah, well, we appreciate going overtime with our panel here.
Many thanks to Jeanie Shan Say No, Bloomberg Politics contributor
at Lisa Kumuso Miller, former RNC Comms director look for
her Friday Reporter podcast. Many thanks to you both for
the insights.
Speaker 1 (31:02):
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. You
can also listen live on Amazon Alexa from our flagship
New York station, Just Say Alexa Play Bloomberg eleven thirty.
Speaker 4 (31:21):
Market's a big part of the story today in Washington,
as the tariff rates are rolled out. Charlie just mentioned it.
We got a big pile of paper end of the
day yesterday. More of this rolled through the evening here
and we got a whole new date. I was going
to say, you know, happy Liberation Day or whatever this is,
but circle August seven on your calendar. That's the actual date.
(31:41):
I guess this takes hold at twelve oh one am
August seven, So you got a week you still want
to make a deal. Of course, this was all supposed
to take effect today, but we understand that the extra
week was needed for Customs and Border Protection to update
the tariff schedule with all of these new numbers. Fifteen percent,
(32:01):
the big industrialized economies, European Union, in Japan, South Korea.
We talked about that those with a small trade deficit
get fifteen percent, Countries with which the US runs a
trade surplus get ten percent. And if you Canada, well
just I don't know. Called back another time. Jamison Greer
(32:24):
was on Bloomberg TV and radio this morning. The US
Trade representative, of course, had a lot to do with
the outcome. Here's what he said.
Speaker 12 (32:30):
We'll be finishing the paperwork in the next weeks and
maybe a couple of months. But these deals are pretty
much set. They are set right. We wouldn't make an
agreement unless we all knew the contours of it and
the countries knew it. And it's an exciting time because
the president has essentially reset the global trading system, and
so we'll be you know, finalizing everything that's been agreed
to on paper and then monitoring compliance going forward.
Speaker 4 (32:53):
It doesn't look like Wall Street is in love with this.
Not that a lot of this is a surprise. You know,
we've got jobs data that you've been hearing about kind
of confusing things a little bit too. But it's decidedly
lower today. The S and P five hundred is down
seventy five points, more than one percent. Nasdac's down three
fifty one and a half percent. We've got a big
move in the bond market here. The Vicks is back
(33:15):
above nineteen. Even the companies with good earnings look at
Exon Mobile turning negative, down a couple of dollars. Apple
had a nice story to tell. It's down almost five dollars.
And if you miss estimates, boy, you're going to be punished.
Amazon not inspired by the forecast. It's down eighteen dollars
or eight percent. So we've got a lot at play here,
(33:37):
but we want to talk about the fact that we
actually have these numbers now, the tariffs, and as well,
what's happening on Capitol Hill. With our good friend Patrick McHenry,
Bloomberg Politics contributor. I always love saying that the former
Republican congressman, former Chair Financial Services who actually held the
speaker's gavel for a short time. Mister mckenry, Great to
see you. Happy Friday. The President was talking about Powell
(34:01):
earlier today on Truth Social as he's been known to
do too little, too late, He writes, Jerome too late.
Powell is a disaster. Drop the rate. It's funny Donald
Trump never, i guess, talks like this to his face.
But is he starting to sound like he's on the
right side of history. It's time to start cutting. What
do you think, well, I.
Speaker 13 (34:22):
Think it is. But look, the Federal Reserve is an
independent monetary authority in our system. It's well designed that way.
The Supreme Court degrees this is long standing a practice
for the United States. That's one. Two. There is the
political effect here, which is when the American people see
(34:44):
an economy that they don't like, who is to blame
in the presence, reminding them to blame the Federal Reserve,
not the Republicans they elected to run Washington. So that
is a useful political tool, that is at the present
it disposal that this president is use more than other presidents.
But he's not the only one to use this. They
(35:06):
complain of the Federal Reserve system LBJ and FDR. We're
quite notable in using it as well. So he's not
the first, but he is obviously the loudest and the
most adept at stoking those flames.
Speaker 4 (35:21):
We tend to think of Patrick McHenry as an old
style conservative Republican Allah Ronald Reagan, correct me if I'm wrong.
Speaker 7 (35:29):
Congressman's that's about right.
Speaker 4 (35:32):
Tariffs are not part of that ideology. Where are you
with this tariff regime now that we actually have the numbers,
and how worried are you about what happens to the
economy in the second half of the year.
Speaker 13 (35:45):
Well, there are two issues here. One is allowing China
to come into the first world trading regime but getting
the rules of the third World. And so I think
think some of our trading agreements have benefited other countries
to a much more substantial impact to them than to us.
(36:10):
We've given away a lot of our native industries and
some of these deals. So while you could be a
free trader, you don't have to necessarily agree with the
contours of each one of the trading regimes that we
set up each negotiation. The president's resetting that, and he
believes by resetting these tariffs we were going to get
back to a much more normative set of competition and
(36:34):
in this global trading regime. So some of this is
quite practical. This is why you haven't seen Hill Republicans
who are free traders speak up in any organized fashion.
So that is what he's speaking to. Now how he
does it, of course, Look, I mean as somebody who
thinks we have benefited overall by being the biggest trading
(36:57):
partner in the world. That has given us the ability
of a strong dollar, policy, has made us the reserve
currency for the world, has given us a greater part
borrowing power. There are a lot of benefits that have
come from our strength as a trading part I think
we have to maintain that edge, and we have to
be the place that people want to come to. That
(37:19):
people intellectual property come to place for capital and also
a place that leads the world in trade, and we
don't want to undermine that. So that's the countervailing piece
that I think has not been hotly pushed back on
this administration. I think it should be sharpened up.
Speaker 4 (37:40):
Interesting. Well, you know, we love talking to you because
you have a real sensitivity to the economy here and
of course, following your chairmanship, you have such a good
sense of what this means for the Federal Reserve when
we start talking about interest rates, the idea that this
could creep into the data, but we've also got this
software that expected jobs report to and you know a
lot of people the narrative out there is j Powell
(38:02):
would have been cutting in February if it were not
for Donald Trump himself and the tariff regime. Do you
believe that? And do you think that we do see
some kind of inflation spike in the next few months.
Speaker 13 (38:14):
Well, I think that's what the market's trying to figure out.
But the president has been given the benefit of doubt
by elected official, like by other Republicans in Washington, because
you've not seen the economic harm of this tariff fight.
And I think there is a notion in understanding that
the real culmination of all this discussion about tariffs is
(38:40):
the trading relationship with China and the world, and everything
that the President has done this year with the national security,
international presence and security negotiations and endeavors and tariff conversations
are all laying the predicate for a big deal with China,
and so they want to see that. They want to
(39:01):
see that big deal, and they're willing to go along
with you know, less optimistic economic data in order to
get to that deal. I think the markets see that.
But the data is now showing that this uncertainty and
this cost structure is creating a burden on the US economy.
The question is to the extent, and I think that
(39:23):
that's why the market is I think that's why you're
seeing VIS up and Congress is out, and so I
don't think you're going to hear much until September about
tariffs or any discussion about the effects.
Speaker 4 (39:39):
Well, of course, the whole conversation when members come back
is going to be about a shutdown. I know you're
hearing this as well as we are. Democrats say they're
out because of the decisions package. Do you think we
shut down.
Speaker 7 (39:49):
In the fall.
Speaker 13 (39:50):
I think so. I think you need Democratic votes to
the Senate United States Senate in order to keep the
government open. I think what you will see as a
move for a continued to keep the government open, and
that passed the House, and then it gets to the Senate,
and it's really up to the Senate minority, the Democrats,
on whether or not they're going to allow that to
(40:10):
go to the president's desk. I think theirve the incentives
right now for Chuck Schumer and the Democrat leadership in
Washington is to show they have some fight, that they're
going to fight President Trump, and so they're going to
try to lay the blame of a government shut down
at the president's fee. It's going to be a huge
battle for the fall, and I think that will cloud
(40:32):
the rest of the debate, the public policy debate that
could otherwise be quite bipartisan.
Speaker 4 (40:37):
It's amazing how predictable this seems to be here. Patrick McHenry,
I have to ask you about what's going on in
your home state before you leave us. There's a new
poll out on the North Carolina Senate race now that
your former governor Roy Cooper has jumped in here. Emerson
College Polling finds Cooper with a six point lead in
(40:58):
this race over Michael Wattley to you've got twelve percent undecided.
Does this sound right to you? And how much of
an uphill battle will Michael Whatley have in this race?
Speaker 13 (41:10):
So two things, there's something for everyone in this poll.
If you're Roy Cooper, you said, well, look, I'm leading
got in the race. Now you have a Democratic lead
for what is a current Republican held seat, So they
get to have that narrative. But the Republicans have the
narrative of saying, we've got a guy who's never been
elected to anything and he's within six points of a
(41:35):
popular two term Democratic governor this and so therefore, what
we know is that this will be a very expensive,
probably the most expensive Senate race in the country this
election cycle, and it will be a nasty dog fight
based off the fact that we are a narrowly Republican.
North Carolina is a narrowly divided state. So watch out.
(41:58):
It's going to be long, long and nasty.
Speaker 4 (42:02):
God knows that. We heard from Donald Trump on this.
He posted about this as well on truth Social Michael
Wattley has my complete and total endorsement. This is the
bottom of a very long post. He will never let
you down. All caps, exclamation point. We're gonna have to
keep talking about this one. Patrick McHenry, I hope you're
having a great summer, and thank you for chiming in
as always, Bloomberg Politics contributor former Republican Congressman Patrick McHenry
(42:25):
with his view on the Friday edition here of Balance
of Power. Really fascinating to look at these polling results
in again, what will likely be the most expensive Senate
contest is going to have to be between North Carolina
and Texas here right. Thanks for listening to the Balance
of Power podcast. Make sure to subscribe if you haven't already,
(42:47):
at Apple, Spotify, or wherever you get your podcasts, and
you can find us live every weekday from Washington, DC
at noontime Eastern at Bloomberg dot com.
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