July 3, 2025 • 44 mins
Bonds fell and the dollar rose as stronger-than-forecast employment growth soothed concern the US economy is poised to slow, stanching speculation the Federal Reserve will need to cut interest rates any time soon. Stocks hit fresh all-time highs.
Treasury two-year yields surged 10 basis points to 3.88%. Swap traders saw almost no chance of a July Fed cut, compared with a roughly 25% probability seen before the data. The chance of a move in September ebbed to about 70%. The S&P 500 climbed 0.8%. After the close of trading in a shortened pre-holiday session, the House passed President Donald Trump’s tax bill.
On a special pre-holiday edition of The Close, hosts Romaine Bostick and Matt Miller speak with:
- Bloomberg Opinion columnist Jonathan Levin
- Liz Ann Sonders, Charles Schwab managing director and chief investment strategist
- Patrick de Haan, head of petroleum analysis at GasBuddy
- Michael Balboni, former New York State Director of Homeland Security
- Scott Bessent, US Treasury Secretary
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
Clapping on, Cheering on Wall Street.
Speaker 1 (00:10):
An early close ahead of the July fourth holiday weekend,
the S and P five hundred pushing higher by about
eight tents of a percent, adding about fifty two points
sixty two to seventy nine and change. As we wait
for these numbers to settle. Romain Bostick alongside Matt Miller,
another record close for US equities.
Speaker 3 (00:27):
Yeah, absolutely, we see Macy's there ringing the opening bell
before this holiday weekend. Happy fourth of July tomorrow, and
happy early close to the trading day. We'll see the
bond market stay open for another hour. Right now, we're
looking at bond yields that are considerably higher, but that
is not holding stocks back from new records of the
(00:48):
S and P at sixty two to seventy nine, even
with the tenure pushing back up to six thirty five.
Speaker 1 (00:53):
And I just want to point out the Russell two thousand,
up about a percent on the day. And I say
that because the last few sessions we've seen the Russell,
the small and MidCat names really start to outperform the
larger cap names. And it will be interesting to see
if that continues end of next week.
Speaker 3 (01:05):
All right, take a look at the IMAP. It's a
really dynamic way to track the industry groups. Moving on
the S and P five hundred, right, any index that
has a breakdown like this, so you can see that
we have a gain for it. So tech stocks rising
with that Chip news. Financials are up for a second
day in a row after they proceeded with buybacks, pat
(01:28):
post passing the FEDS dress tests, and industrials are gaining
as well. Really looks like the picture that we've seen
year to date, and the defensive stocks are on the
lower end of the spectrum. Your healthcare, real estate, and
consumer staples all bringing up the rear.
Speaker 1 (01:42):
About three hundred and forty nine stocks in the S
and P are higher about one hundred and fifty our lower.
Jonathan Levin is our Bloomberg opinion columnists who lives in
the great state of Florida down there in Miami. He's
joining us right now to take a closer look as
some of the big individual gainers and decliners.
Speaker 4 (01:57):
Jonathan, Yeah, okay, so we've got Service now with a
nice game plus three point five percent. It got a
nice little price target bump over at Morgan Stanley, and
it has second quarter results of course coming later this month.
They've got great momentum coming off of Q one here
at Romain, and they're up about twenty seven percent since
(02:18):
Liberation Day, helped by some impressive subsbscription revenue. But I
also want to talk our own book for a moment here.
You had a great interview with service Now's chief people
and AI enablement officer, Jackie Canny on the close yesterday,
I believe, and she's talking about how AI is already
(02:39):
bringing some productivity gains to her team.
Speaker 5 (02:42):
So interesting stuff there.
Speaker 4 (02:44):
Moving on, we've got data Dog up fourteen zero point
nine percent, called fifteen percent. The software solutions company Romaine
is getting added to the S and P five hundred
effective prior to the open on July ninth, replacing Juniper Networks.
(03:04):
Just to point out Dan ives over at web Bush
also saying that data Dog's products fit well into recent
AI trends, and he calls out the company's recent partnership
with open AI.
Speaker 6 (03:16):
So bull.
Speaker 3 (03:19):
It.
Speaker 4 (03:19):
You know, I'm not in the weeds on Dan's thinking.
Speaker 2 (03:24):
I'll go ahead, and it was a trick question, John.
I love the by the way, I know you're going
to get to lose it. And I love this story.
Speaker 3 (03:31):
Lucid and Rivian are two companies that you expect to
be losers on the back of the big beautiful bill
removing or reducing incentives and pulling that forward to September,
but they're actually gaining today.
Speaker 4 (03:43):
Yeah, it's a little bit of a weird one, somewhat counterintuitive.
I'm not one hundred percent sure that I buy this narrative,
but here's the story. B MP Paraba out with a
note saying that some.
Speaker 5 (03:55):
EV makers may actually.
Speaker 4 (03:57):
Benefit from the sun setting of EV tax credits under
the Big Tax and Spending Bill. The logic here, Matt,
is basically that the end of the tax credits will
lead to a pullback from the likes of gm Ford
and Kia, and so there's going to be more market
share available to the likes of Lucid, Rivian and Tesla,
(04:19):
the exclusively electric guys. So sort of a glass half
full take. Not sure how I feel about but I
also want to flag Lucid out out this week with
its two Q deliveries, and they missed on soft demand
for those luxury evs, so you know, make what you
will of it.
Speaker 3 (04:36):
They hardly make any They hardly sell any By the way,
you know, Ford only sold sixteen thousand electric vehicles in
the second quarter.
Speaker 1 (04:42):
Are they trying anymore with guards evs?
Speaker 2 (04:44):
Feel like they may have just taken a bit of
a pause there.
Speaker 7 (04:47):
Yeah, I think so too.
Speaker 1 (04:49):
All right, John, you got some decliners too. It's funny
you were talking about a little bit earlier about Data
Dog being added to the S and P five hundred.
I saw Robinhood was down today. Is that because they're
not going in total?
Speaker 4 (05:00):
This is the flip side of what we were just
talking about with Data Dog. So you know a lot
of folks were expecting the company to get in there
to get that S and P five hundred nod.
Speaker 5 (05:11):
It doesn't get it. So disappointment. Not a big.
Speaker 4 (05:14):
Surprise there, Sentien, which of course was the big story yesterday.
Extending losses a little bit. I have it down a
little bit more than one percent, small adjustment in the
grand scheme of things after the company withdrew its profit
outlook on risks from Affordable Care Act plans.
Speaker 5 (05:34):
One final one that I want to call out here.
Speaker 4 (05:37):
Let me just double check the final pricing on mirk
ends up closing down one point eight percent. This is
a stock that has really not been able to find
its footing all year, hurt by underwhelming guidance and tariff concerns,
of course, but we're starting to hear some bottom feeders
getting interested in this name. Merk is currently trading at
(06:01):
quote deep valuation discounts, which offers free optionality on the
drug makers pipeline and and beyond this this per note
from Burremberg out recently, and the analysts went ahead and
reiterated their buy recommendation on the stock as well as
their one.
Speaker 5 (06:19):
Hundred dollars price target. So there you have it, all.
Speaker 3 (06:22):
Right, Jonathan Levin there from Blueberg Opinion, thanks very much
for that. Really appreciate you moving us through some of
the stocks that closed higher and lower at the end
of this shortened trading day. Remember the bond markets still
open for about an hour. I want to get right
now to one of our good friends, liz Ane Sonders.
She is the chief investment strategist at Charles Schwab.
Speaker 2 (06:43):
They have, of course.
Speaker 3 (06:44):
Trillions of dollars I'm going to say ten trillion dollars
of assets under management, and Lizanne, we got a number
at the top of the at the top of the
day here a half hour before that trading opened.
Speaker 2 (06:57):
That was pretty impressive.
Speaker 3 (06:59):
Hundred and forty seven thousand jobs at it, and we
were only looking for one hundred and six thousand.
Speaker 2 (07:04):
The revisions were good.
Speaker 3 (07:05):
The unemployment one number, it was lower, and we didn't
even get as much inflation and hourly wages as we expected.
Is that all systems go in your opinion for the
labor market.
Speaker 8 (07:17):
TVD yes, relative to not just the consensus expectation, was
it better, but well better than what had been the
whisper number that had been floating around out there, which
was in the more like seventy thousand. That said, it
was seventy thousand of private sector jobs, a huge jump
in both government sector, which was all at the state
and local level, and education and health. You guys have
(07:40):
been talking about it. The education one is a little
bit of a head scratcher, given we're talking about education
jobs in June, so there's some suggestion maybe that there's
seasonals that have come into play with that. Also, the
Beer of Labor Statistics does a birth death model where
they estimate the birth and death of businesses, the birth
(08:00):
and death of people, and that may have flattered the
number on the upside, and it's not uncommon when you're
in some sort of slow down in the economy or
an inflection point in the labor market that that birth
death model overstates the birth of new businesses and can again.
Speaker 6 (08:18):
Flatter the payroll number.
Speaker 8 (08:19):
So yet again some cracks under the surface, but clearly
to the benefit of the stock market, good news is
good news kind of day.
Speaker 1 (08:27):
Absolutely, And it gets to this idea of what the
longer term trajectory could be when it comes to the
labor market. I mean, there was a lot of doom
and gloom I think in March and April, people saying
that the effects of these trade policies and other Washington
policies would really hamper the economy. And I know the
jury is still out on that question, but at least
for right now, Lizan, it does not appear that some
of those, at least the worst case scenarios are materializing
(08:50):
just yet correct.
Speaker 8 (08:52):
And I think what all of this represents is sort
of a period of status. We're just looking at kind
of a pause in activity, and that's manifested itself into
labor market data via a limited amount of firings on
a six month rolling basis, Challenger layoffs are up and
(09:14):
bear watching, but the most recent reading was actually on
the lighter side, which in the terms of layoff announcements,
obviously being on the lighter side is good.
Speaker 6 (09:24):
So I think it's been much discussed.
Speaker 8 (09:26):
I'm not saying anything new here, but it's kind of
a no hiring, no firing kind of backdrop, and until
we have more policy related clarity, particularly with regard to
tariffs and the important upcoming date next week of July ninth,
I think that's the backdrop we're going to.
Speaker 6 (09:41):
Businesses sort of have themselves in.
Speaker 8 (09:43):
A timeout from a hiring from a major investment capex perspective,
and frankly, the FED put itself in a time out
late last year, and clearly what we saw in the
immediate aftermath of today's release was a plunge from not
elevated levels, but a plunge in expectations that we might
possibly get a July cut that seems definitively off the table.
Speaker 2 (10:02):
Lizan, my four own K looks fantastic. Right now.
Speaker 3 (10:06):
Do I move what I have left in cash into
risk assets or should I just chill at these high levels?
Speaker 6 (10:16):
You know, what Matt.
Speaker 8 (10:16):
Anybody that answers that question with specificity, shame on them.
I know you, I've known you for a long time,
but I'm not your financial advisor. I don't know what
your entire portfolio looks like, what your needs for income,
what your past experiences, whether you've got a wider and
narrow gap between your emotional risk tolerance your financial risk tolerance.
How disciplined are you. I mean, the list goes on
(10:37):
and on. So I think those kind of any kind
of cookie cutter answer suggests you're not paying attention to
the vast differences that exist from one investor to another.
So I think never should there be an investment approach
that is sort of at one time, get in, get out,
all or nothing. That's just gambling on moments in time.
(10:59):
So if the idea is to increase exposure to equities,
you do it via dollar cost averaging. You do it
via rebalancing, as opposed to trying to pick entry points.
I think that's what gets individual investors into trouble.
Speaker 1 (11:13):
All right, An Le's Ane Thunder's over at Charles Schwab
have a wonderful weekend.
Speaker 3 (11:17):
Welcome back to a special early edition of The clothes.
I'm Matt Miller here with Romaine Bostik on his program.
Thank you for letting me sit in today. Shortened trading
week because of the fourth of July, and Triple A
is projecting more than seventy two million people will hit
the road for this weekend. Gas Buddy has some good
news for those drivers. A national average price of gasoline
(11:39):
is expected to fall this weekend to its lowest level
since twenty twenty one. Joining us to talk about that
is Patrick Dehan, head of petroleum analysis at gas Buddy.
And Patrick, I always wonder when we talk about these things,
we're just talking about unleaded, right, and a lot of
cars you've got to put premium in them. And I've
seen prices at least around me and New York still
hovering all over four dollars a gallon.
Speaker 9 (12:02):
Yeah, it's kind of the mystery that's not being told.
Speaker 10 (12:04):
As you mentioned, you know, eighty seven percent of Americans
use regular You and apparently me are some of the
few that.
Speaker 9 (12:11):
Have to use premium.
Speaker 10 (12:12):
And you know you mentioned that, and premium here in
Chicago's at least hovering your five bucks a gallon. But
for the rest of Americans, falling gas prices has been
really what's happened over the last seven to ten days
or so as tensions in the Middle East have cooled.
Gas prices now about ten cents lower than where they
were at the height of that situation. The national average
out about three fourteen a gallon. That graphic that you
(12:33):
just showed twenty twenty one on July four was three twelve,
so we could get beyond that. All in all, Americans
spending a lot less to hit the road. Gas prices
down thirty seven cents from this time last year. That's
going to save Americans half a billion dollars between.
Speaker 9 (12:50):
Today and Sunday. That's real economic savings.
Speaker 10 (12:54):
I'm sure the President's going to be all over this,
but certainly gas price is much lower.
Speaker 3 (12:59):
I love that eighty seven percent of Americans used regular
gasoline because of the octane level.
Speaker 2 (13:04):
It's fantastic.
Speaker 3 (13:06):
What what kind of run up do you see when
we see crude? You know, it eclipsed eighty one dollars
a barrel a week ago Sunday and came straight back
down under seventy What kind of run up do you
see at the pump when you see that happen?
Speaker 2 (13:21):
So quickly and crude.
Speaker 10 (13:23):
Yeah, you know, if that situation had continued at a
heightened level, we probably would have seen the national average
going up somewhere in the app ballpark of fifteen to
maybe twenty cents a gallon.
Speaker 9 (13:33):
Thankfully, we never saw the full impact of that.
Speaker 10 (13:35):
The national average advanced about twelve cents, stopped dead in
its tracks, and now it's actually gone down another about
eight nine cents a gallon or so here in.
Speaker 9 (13:44):
The last week.
Speaker 10 (13:45):
So you know, generally speaking, there are some proportions that
we follow, although I will say for the Middle East tensions,
gasoline was certainly on the less receiving side of a
big jump. Diesel really took the brunt of that jump.
In fact, diesel prices at the peak jumped about thirty
cents a gallon in many markets.
Speaker 9 (14:03):
So the truckers logistics.
Speaker 10 (14:04):
Companies out there, you know, they were the ones getting
raked over the coals over that jump.
Speaker 9 (14:09):
Diesel only now starting to reverse.
Speaker 10 (14:11):
That's the good news is bold diesel, gasoline, and jet
fuel all starting to decline. And I always like to
put this myth to bed all Americans. I swear say
that gas prices go up for holidays. This is the
prime example. Forty eight of the nation's fifty state seeing
gas prices lower today than a week ago. So let's
put that one to bed. Gas prices don't always go
(14:32):
for the holidays. Sometimes they do, and most of the
time it's coincidental.
Speaker 1 (14:35):
Absolutely, And I am curious Patrick, as we get deeper
past the holiday season. There is a lot of talk
right now about just what our refining capacity is in
the US, how much wiggle room is left in that space.
Should we see any other potential shocks to the global
oil and gas story.
Speaker 10 (14:55):
Yeah, I mean that's a great point, because that's what
a lot of Americans don't realize is we still have
very little breathing room. EIA data from the government yesterday
showing about ninety five percent of refining capacity utilized, So
that's not a whole lot of breathing room for the
height of the summer. Those numbers are typical. Though we
have seen refining capacity holding nearly where it was last year,
(15:17):
it's still close to the highest we've ever seen on record,
I believe, if I remember right, yesterday's EIA data showing
over seventeen million barrels of oil being shoved into refineries
every day.
Speaker 9 (15:28):
That's a pretty good amount.
Speaker 10 (15:30):
But keep in mind diesel inventories are running about twenty
percent below the five year average. Now, some of that
may be skewed by the use of biodiesel, which is
not really tracked in that government data, But keep in mind.
Speaker 9 (15:41):
Diesel is the fuel of the economy.
Speaker 10 (15:43):
So we talk about growth and trade and tariffs, and
diesel prices are really the mainstay behind economic growth. So
keep that in my ditel inventories rather tight. That's also
why they saw such a slingshot here. Diesel is really
carrying the momentum for refineries. Talk about refinery profit ability,
a lot of that pulling on the shoulders of dealal
right now.
Speaker 1 (16:03):
And so, and this gets to the idea, then if
that is sort of what is actually holding up or
at least providing the biggest boost to the market, what
is the biggest risk?
Speaker 9 (16:12):
Yeah, you know, you look at the graphic there OPEC output.
Speaker 10 (16:15):
Speaking of OPEC, they'll be meeting here in a couple
of days in Vienna to talk about what they're going
to look at for the month of August.
Speaker 9 (16:21):
That could be very critical.
Speaker 10 (16:23):
I think a lot of the reason why gas phrases
are lower this year. The last year is kind of
that development that we saw just a couple of months ago.
OPEC starting to win back and recapture some of that
market share. They're raising production that's been substantial. That's a development.
Keep in mind OPEC started cutting oil production back in
twenty twenty three when oil was about the same level.
(16:43):
Now OPEK reversing that policy. So Middle East tensions that
could play a role. That's in the cooling.
Speaker 9 (16:49):
Stages right now.
Speaker 10 (16:50):
But you know, something happens economically, whether the trade or
tear policy suddenly reverses, or you know, we see a
little bit.
Speaker 9 (16:57):
Of a mixed match in economic data. You know, as
goes the economy, asco oil prices, whether to the goods
oil rises, or if.
Speaker 10 (17:04):
We see a slow down in the economy, oil prices
could cool off. The other factor here, as we get
into August, mother nature hurricane season can shut down rigs
in the Gulf. They also can shut down refineries in
Texas and Louisiana.
Speaker 3 (17:16):
Hey, we're going to talk to treasure Secretary Scott Bessant
coming up in the next hour. And during the campaign
he had this three three three mantra, right, three percent
deficits three percent growth and adding three million barrels of
oil per day production in the US. How's it going
so far on the ladder there?
Speaker 9 (17:37):
Boy, that is going to be real sluggish to see
to fruition.
Speaker 10 (17:40):
I mean, US domestic oil production has been holding at
about the mid thirteen million barrel arrange now for probably
close to a year. Right, it's been kind of bouncing
off thirteen point four thirteen point five. It's going to
be hard in this pricing environment for oil companies to
really ratchet up and raise rigs. I mean, we've seen
falling rigs for months, and that's the leading indicator on
(18:01):
where US oil production is going. There's a lot of folks,
myself included the Permian, right, that's kind of plateaued already.
So unless we see oil prices really perk up, I
think it's going to be a huge struggle to get
anywhere near that three million barrel increase. I mean, I
don't even know if we'll see fourteen by the end
of the year, And even the government forecasts are painting
(18:22):
a picture that we may struggle. Now, maybe OPAC jumps
in here and raises production, but keep in mind, if
OPEK throws more oil out of the global market. That's
going to have a very negative impact on US oil
production in the months and years ahead.
Speaker 3 (18:35):
Right, I mean, aside from higher prices, which would incentivize
American drillers to pump more oil. What else can the
government do, Because it's not just this year that they're
worried about, it's actually a part of the CEA's projection
to achieve a surplus or to reduce the deficit. With
this big, beautiful bill, what more can they do to
(18:56):
boost oil production in America?
Speaker 7 (18:59):
Matt?
Speaker 9 (19:00):
The catalysts are there.
Speaker 10 (19:01):
I mean Trump has made it a little bit easier,
loosening regulations, widening the guardrails. But essentially, what the president
you can't do is get oil prices to go up
because you want some lower right, drill baby, drill lowers
oil prices. That flies in the face of oil companies
desire to raise production. It's kind of like your boss saying, hey,
you want to work on July four, I'll pay you
half as much, but I'll expect you to be twice
(19:22):
as productive. No oil company is going to jump with
that opportunity.
Speaker 7 (19:26):
Are we getting paid for this?
Speaker 10 (19:27):
Matt?
Speaker 3 (19:27):
I think I hope, So I just do as much
as I can and hope it shows up in my
bank account every two weeks.
Speaker 1 (19:32):
All right, Well, well, I hope Patrick Seton paid for this.
Always great, one of the best in the business. There,
Patrick de'han over at gas Buddy.
Speaker 3 (19:46):
New York City's Fourth of July fireworks will kick off
under heightened alert for terrorist threats. That's according to a
joint assessment from the FBI and the Department of Homeland Security.
For more on what security measures are being taken heading
into the big holiday weekend, let's bring in Michael Balboni,
former Director of Homeland Security for New York State. Michael,
(20:06):
thanks so much for joining us. Let me ask you
first what exactly this means? Under heightened alert for terrorist threats?
How serious is it?
Speaker 11 (20:15):
So whenever there is a conflict in the Middle East
in particular, really actually across the world, you can have
this situation reverberate here in the United States, especially in
cities as diverse as New York City. So the FBI
Homeland Security they put out a joint intelligence bulletin which
(20:35):
essentially talks about the risk of Iranian sponsored groups doing
something here to try to project power. You know, when
you think about what the Iranian leadership has to do.
They have to convince their people that meistating being having
their nuclear facilities bombed and frankly losing a lot of
their air capability, there's still a force.
Speaker 9 (20:55):
To be reckoned with.
Speaker 11 (20:56):
So the question is could they manifest that overseas? So
that comes into a couple of different things. I think
that right now, in addition to the concern about kinectic attacks,
there's also a big concerned about cybersecurity. The Iranian government
has prepared and supported a very robust cyber attack capability
(21:19):
by Iranians and their survius. So I think that that
there's going to be a mix of things going on
right now. But heightened alert is always in the mix
when you have something overseas that could affect a population here.
Speaker 3 (21:31):
So what can the average citizen do to stay as
safe as possible? I mean, imagine you're living here in
New York City on Manhattan Island and you want to
see the fireworks.
Speaker 2 (21:43):
How do you go about that?
Speaker 11 (21:45):
So New York City in particular has In New York
the NYPD is the world's best, in my opinion, at
dealing with major events, major crowds. I mean, we take
a look everything from papal visits to presidential visits in
New Year's Eve. They really know how to do this.
They have it down to a science. Obviously, that doesn't
mean that it can stop every single threat, but in
(22:06):
terms of what people should know and see out there
is that they're going to see the visible, which is
obviously lots of police officers in uniform, and the invisible
undercovers social media monitoring, surveillance cameras. You know, we face
a much different landscape for security than we did after
nine to eleven. Nine eleven, we did not have the
mix of security cameras around the city like we do
(22:28):
that we have right now. In addition to which you know,
there's a lot of intelligence sharing that is much better
today than it was in the past.
Speaker 1 (22:36):
I am curious, Michael, when we talk about what assistance
local authorities will have. Will there be a big federal
presence in the city tomorrow.
Speaker 11 (22:45):
So in New York City is blessed with a lot
of agencies for the not only federal agencies, but the MTA,
Police support authority, police, state troopers. There's a lot of
agencies that will all combine in terms of intelligence share
and also patrol responsibilities. We see it in Penn Station,
we see it in Grand Central. You have the National Guard,
(23:06):
you have the police standing next to each other. Now, this,
this kind of mixed back and forth is a multi
agency approach that again is unique following the attacks of
nine to eleven, so so many years ago.
Speaker 1 (23:18):
All Right, Michael really appreciated Michael and Balboni there as
the former head for New York State's Homeland of Security operations.
Of course, trying to keep everyone safe for this July fourth,
a weekend, Matt, I don't know if you're going to
make it out to the fireworks or in any other
public events, but obviously in a city like New York
something everyone is always top of mine.
Speaker 3 (23:37):
Yeah, absolutely, I mean I will be going around to
I don't know exactly what yet with my two daughters
and my wife, and I want to keep everyone as
safe as possible, but I tend to just do whatever.
Speaker 1 (23:59):
And right now you are looking at the floor of
the House of Representatives. Hakeem Jeffries, Democrat from the state
of New York and the leader of the Democratic Party,
has now surpassed Kevin McCarthy to deliver the longest speech
in the history of the House of Representatives now clocking
in somewhere around eight hours and thirty six minutes. This
(24:19):
speech ostensibly Matt Miller about opposing the President Trump's big
legislative agenda, this one big beautiful bill, this budget, tax
and spending bill that is still likely to pass, of course,
a very narrowly divided House of Representatives with about two
hundred and twenty Republicans who all, based on what we
know right now, are in line with the Speaker of
(24:41):
the House, Mike Johnson, and as soon as Speaker Jeffrees
seeds the floor based on procedure, Republicans will then pick
up the mantle and will most likely vote on that
one big beautiful bill and will likely pass it.
Speaker 2 (24:52):
Yeah, I have to just shout out.
Speaker 3 (24:54):
I got to say, regardless of which side of the
aisle you sit on, this is an athlete achievement. I mean,
speaking for that long with such enthusiasm and passion takes
a lot out of you.
Speaker 1 (25:08):
Yeah, and we should point out for anyone who doesn't
understand Washington politics, any foreigners watching this wondering what the
heck is going on. So the procedures basically say that
once he starts talking he's basically given sixty seconds to talk.
But there's a loophole here where as long as he
keeps talking, does not stop, does not sit down, does
not effectively move from that podium, he can go as
(25:29):
long as he wants.
Speaker 3 (25:30):
Yeah, absolutely and yes for sure. To foreigners, it may
seem silly. Of course, every civil government and parliament has
its own silly procedures, right, But Kevin McCarthy did the
same thing last time.
Speaker 1 (25:42):
All right, of course, will keep an eye on this,
and more importantly, what we really are keeping an eye
on is when the House of Representatives resumes its normal
procedures here, which would be to move forward with the
vote on that tax and spending bill, a big legislative
agenda for President Trump. Legs slate of agenda that does
appear poised to pass. Speaker Mike Johnson at somewhere around
(26:04):
three a m. This morning did finally secure enough votes
and enough support to move that bill forward. Hakeem Jefferies
since then, effectively since about four point fifty this morning,
has been trying to stall a final vote on that
But barring any sort of major surprises here, that bill
will likely be voted on sometime soon and it is
likely to pass. Of course, one of the people who
(26:25):
will be in charge for helping to implement a lot
of provisions in that bill is the Treasury Secretary of
the United States, and I'm pleased to say that he
joins us right here on the close. Scott Bessant. Great
to have you here on the program. Let's start off
with the bill. I know we are still awaiting a vote,
a vote that is likely to occur today, and of
course the signing that the President himself has said he
(26:46):
would like to get done tomorrow on July fourth, as
you then fan out after July fourth to sell this
bill to the public and more importantly, to implement some
of the provisions. What is your number one priority?
Speaker 12 (26:59):
Number one is making sure the American American people understand
that this bill is the route to parallel prosperity. It
is the best of what we saw in the twenty
seventeen tax cuts and job backed along with President Trump's campaign,
promises no tax and tips, no taxes over time, eighty
(27:22):
five percent of seniors will not be paying tax on
Social Security and the deductibility of auto loans if the
car is made in the United States. It also funds
the president's agenda in terms of defense, border, and school choice.
Speaker 1 (27:37):
There's salesmanship that you and for that matter, the other
cabinet members will have to do to the public. But
there's also salesmanship that you have to do here, Scott.
For the markets, there's a lot of concern about that
addition to the federal deficit, the idea of a widening
of that deficit because of some deficiencies and pain for
some of those tax cuts. What is your message to the.
Speaker 12 (27:57):
Market, Well, Roman, I'm not quite sure what you mean,
because stock markets had a new high and the bond
market just had its best six months in five years,
so I disagree with that. So I think the markets
are telling us that they liked the bill and that
they believe that it is fiscally prudent and stimulative for growth.
(28:21):
And importantly, I think we can get back to the
kind of growth that we saw in President Trump's term
two point eight three point two percent non inflationary growth,
which the Biden administration was not capable of.
Speaker 3 (28:36):
Mister Secretary Matt Miller here, I'm wondering, as someone who
grew up with Alex P. Keaton watching Milton Friedman on
Phil Donahue and always thinking we were on the wrong.
Speaker 2 (28:46):
Side of the laughter curve.
Speaker 3 (28:48):
Why haven't these kind of massive tax cuts worked to
really stimulate growth in the past, and they certainly haven't
worked to replace the amount of revenue that's taken out.
We didn't see that with the Reagan tax cuts. It
didn't work out with the Bush tax cuts, and it
didn't work out with the TCJA in twenty seventeen either.
Speaker 2 (29:06):
Why is it going to work now?
Speaker 12 (29:08):
Well, I would disagree with TCJA. TCJA was a work
in progress, and then we hit COVID, and I think
what's different here also is we're going to be constraining spending.
I spend a lot of time with the Freedom Caucus
members and their constituents should be very proud of them.
(29:29):
They should be very proud of themselves. They changed the
center of gravity of the debate. So we are both
going to stimulate the economy, pick up tax revenues, but
more importantly constrain and pull down spending.
Speaker 3 (29:44):
So far, though, it looks like we're going to boost
deficits up to seven percent.
Speaker 2 (29:49):
You ran on this three three three plan.
Speaker 3 (29:52):
Three percent deficit, three percent economic growth, and three million
barrels of oil, an increase of three million barrels of
oil a day in the US US. Do you expect
to get to that by the end of President Trump's term.
Speaker 12 (30:04):
I do, And I'm not sure where the seven percent
number is coming from, right because I reject the CBO scoring.
But on the other side, the CBO also scored terriff
income at two point eight trillion, so you know that
substance that substantially increases government revenues.
Speaker 7 (30:23):
I think the growth is going to be.
Speaker 12 (30:25):
Much higher, and I believe that what we've done in
constraining spending here is just the first bite at the apple.
Speaker 1 (30:34):
Do you anticipate, mister secretary, that the US government's financing needs,
the Treasury's financing needs will increase over the next couple
of years.
Speaker 7 (30:44):
I think that.
Speaker 12 (30:47):
We will see what happens to interest rates, and there
could be an increase in financing needs based on yields.
But everything that I'm seeing says that inflation is under
control and likely coming down.
Speaker 1 (31:04):
There's, of course, the costs to finance that, and we
look at where yields have been, and we know there's
been a lot of volatility there some stability in recent
week's up partly because of some of the things that
you've done and said publicly. But we've also seen a
little bit of reticence to buy into longer dated US treasuries.
I know you have been public about the idea, at
(31:26):
least in the short term, of relying a little bit
more on shorter term treasury issuance. Do you anticipate that
will continue?
Speaker 12 (31:34):
Well, I think what we're going to see is one
of the underreported things of the One Big Beautiful Bill
is it also gets us away from this terrible debt
ceiling dilemma, and because of that, we've had to constrain issuance.
So it's likely that initially we will use bills to
(31:54):
refill the Treasury General account.
Speaker 1 (31:57):
Do you worry about any potential rollover risk in that strategy, No,
I don't.
Speaker 12 (32:03):
We've seen very durable and robust treasury auctions that I
see who the buyers are. I think that we are
going to see US banks would take up more of
the debt issuance because of the supplementary supplementary leverage ratio
(32:26):
reliefs that they're going to be getting, and were going
to pass the bill today. President Trump's going to sign
that tomorrow. And then probably the following week we're also
going to have the stable coin legislation, which I think
could create at least two trillion in demand for treasury bills.
Speaker 1 (32:47):
We just want to just flag to our viewers right
now that the minority leader in the House of Representative,
Jakeem Jefferies, does appear to be wrapping up his speech,
and based on procedures in the House of Representatives, this
means the floor would seed back to the Republicans Matt Miller,
who are prepared to vote for this bill, a bill
that does appear to have the votes to.
Speaker 3 (33:08):
Pass, right and a bill that at least, according to
the CBO, is going to add another almost three trillion
dollars to the national debt. Right now, we're looking at
more than thirty six trillion dollars, mister Secretary, And I
know you take issue with the CBO's scoring and especially
the growth rates that they forecast out. Where do you
(33:28):
think we're going to see the national debt, for example,
at the end of President Trump's term in January of
twenty twenty nine, Will it be lower than it is
right now?
Speaker 12 (33:37):
Well, I think the growth is going to be much slower,
and one of the things that Secretary Yellen and I
agree on is not the absolute level of the debt,
it's the debt to GDP. So I think we are
going to see the debt to GDP well into the
nineties by the end of President Trump's term.
Speaker 3 (33:55):
Well, we were talking with Stephen Myron this morning. He
expects that this bill will bring down the national debt
by between five and a half and eleven trillion dollars
ten years out. Does that make sense to you that
we could see a lower absolute number at the end
of the decade after this legislation has passed.
Speaker 12 (34:14):
Well, again, I think that it's very difficult to predict
ten years out. But you just said that CBO expects
three trillion at the end of the window. But they've
also said that there's two point eight trillion in terraf
income that we didn't get scored. So a lot of
moving pieces here, but I'm confident that we're going in
(34:37):
the right direction.
Speaker 1 (34:39):
So, mister Secretary, I do want to get your thoughts
about just broader policies coming out of this administration beyond
just this one big, beautiful bill that is now appears
to be advancing in Congress. There's been a lot of
questions in the market about what the administration's stances on
the dollar, whether there truly is a strong dollar p policy,
(35:00):
or whether that policy a long term policy. All of
strong dollar support has shifted to something else.
Speaker 12 (35:06):
I'm not sure why that is in the market. The
price of the dollar has nothing to do with a
strong dollar policy. Current currencies move up and down based
on a variety of factors. But a strong dollar policy
means several things. One is what is the dollar strong against?
(35:28):
Or the other is another currency stronger higher in price
of the moment. That doesn't have anything to do with
a strong dollar policy. The strong dollar policy is are
we doing the things over the long term to ensure
that the US dollar remains the reserve currency of the world.
Speaker 7 (35:48):
And we are.
Speaker 12 (35:50):
We are setting the stage for economic growth, we are
constraining inflation, we are making the United States the best
destination for global capital, and I think that's going to
continue to happen.
Speaker 7 (36:03):
I think, as I said.
Speaker 12 (36:07):
Many times over since World War Two, the demise of
the dollar as reserve currency has been predicted, and I
think once again the skept is going to be wrong.
Speaker 7 (36:18):
But there is no change in policy.
Speaker 1 (36:21):
Fair enough, but I'm sure you understand that the weakness
that we've seen in the dollar to start the year
is something we have not seen in decades, and there
are other countries that have been trying to take advantage
of it. In a speech just this week we heard
from the Chinese Central Bank governor who really laid out
at least their vision, the Chinese vision for a new
global currency order, which would of course mean a reduced
(36:42):
rule for the dollar and in their view, a greater
role for the Yuon Now, regardless of whether that is
a viable plan, I am curious as to what you
think about the idea that this is even being spoken
about publicly.
Speaker 7 (36:55):
Well, I mean, look, what are the Chinese going to say?
Speaker 12 (36:58):
And by the way, policy they have a non convertible currency,
so how are they going to be a reserve currency.
They also have one point four billion people who want
to get their money out of China. They have capital
constraints on taking out money. The sine kwannon for a
(37:20):
reserve currency is that it trades freely. And I saw
my friend Christian Legard, president of the ECBs, the other
day said that maybe this is the Euro's moment. But
I can tell you if the Euro hits one twenty,
Europeans are going to be squawking that it is too strong.
They are an export economy, so let's see what happens.
(37:41):
They should be careful what they wish for, whereas in
the United States we recognize the responsibility that comes with
being a reserve currency.
Speaker 3 (37:50):
I want to ask about this Republican Party's shift, seeming
shift to support blue collar workers. We've seen a wage
boom among those people, an increase one point seven percent
in the first five months of President Trump's term, and
that's I think the fastest growth we've seen for that
segment since nineteen sixty nine. You talk about no tax
(38:12):
on tips, you talk about no tax on overtime. Why
why do you think that this party has really shifted
to become the party of the blue collars.
Speaker 12 (38:22):
Well, I'm going to correct you on that, because it's
the fastest we've seen since twenty seventeen. Previous to President
Trump was nineteen sixty nine. And look that this is
the party that delivers for working Americans. The Biden administration
wiped the floor with the bottom fifty percent of wage earners.
(38:44):
That the great inflation. The official statistics were around twenty
percent for President Biden's term, but really for the package
of goods and services that working Americans buy, it was
well in excess of thirty percent, So that was a
real increase and purchase in power. In President Trump's first term,
we saw hourly workers, non supervisory workers wages increase faster
(39:10):
than supervisory workers. We saw the bottom fifty percent of
households have net worth gains in excess of the top
ten percent. And again my message here is parallel prosperity.
Both sides can do well, but we are focused on
Main Street catching up to Wall Street. But it doesn't
have to be one or the other.
Speaker 3 (39:31):
At the same time, the CBO has projected that this
one big, beautiful Bill Act passing would result in seven
point eight million people being taken off the Medicaid rules.
They would lose their healthcare coverage, and we've seen also
projections that millions would lose snap benefits. We're talking about,
(39:51):
you know, single mothers with children. We're talking about people
who have difficulty dealing with the untamable bureaucracy of government.
How can you make that kind of move with compassion.
Speaker 12 (40:06):
Well, let's start at one point four our illegal aliens,
So they're not supposed to be receiving Medicaid benefits. The
approximately five million to six million are what we believe
are able bodied adults. So there's going to be a
twenty hour a week work requirement, and we are saying
(40:29):
that this needs to get back to the people who
Medicaid was meant for. It was meant for pregnant women,
it was meant for mothers, it was meant for children.
So we are focusing on the benefits for those who
need them and not be able bodied.
Speaker 1 (40:46):
We're in conversation right now with the US Treasury Secretary
Scott best In for our viewers worldwide, we should point
out that Speaker Mike Johnson is now on the floor
of the House of Representatives, presumably to move forward with
a formal and final vote on that tax and spend bill.
Mister Treasury, Mister Secretary, I am curious about what comes
next after this. We know that we ostensibly have this
(41:09):
July ninth deadline on trade, and I know it's going
to take several weeks, if not months, following that to
really start to hammer out some of these deals. Do
you anticipate that we're going to see additional deals and
more substantive deals pretty soon within the next few weeks.
Speaker 12 (41:26):
I think we're going to see a flurry of deals
before July ninth. We'll see how the President wants to
treat those who are negotiating, whether he's happy that they're
negotiating in good faith. I think that we're going to
see about one hundred countries who just get the minimum
ten percent of reciprocal tariff and we'll go from there.
(41:50):
So I think we are going to see a lot
of action over the coming days.
Speaker 1 (41:56):
Have you been directly involved in any of those negotiations
and it's so, are there specific provisions that those other
countries have been asking the US?
Speaker 12 (42:05):
Well, I'm not going to negotiate on international television, but I.
Speaker 6 (42:10):
Don't want to negotiate.
Speaker 1 (42:11):
Just tell us.
Speaker 12 (42:12):
Well, yeah, sorry. What I would say is some countries
have come with or trading blocks, have come with good deals,
some would come with okay, some would come with deals
that are unacceptable, and we are going to be announcing
(42:33):
several deals. The President has the final say. And what
I can tell you is that the career staff, whether
it's a Treasury, Commerce USTR, are all saying that they
can't believe that these countries are given up things that
they haven't seen them offer in the past two or
three decades. So this is a win for the American people.
(42:56):
It's a win for fair trade.
Speaker 3 (42:58):
Can I ask, just finally about the pressure the President
and others in administration have put on Jerome Palat to
cut rates. President Trump has asked now for three full
percentage points of cuts, three hundred basis points. And it
strikes me that that would either overheat the economy or
cause absolute chaos in the treasury market. Don't you think
(43:20):
it's important that the Federal Reserve operate with an amount
of independence?
Speaker 12 (43:25):
Well, fed Reserve does operate with an amount of independence,
just like a referee does out of the floor of
the basketball court. They're independent, but the coaches work the
ref all the time. President Trump is the most sophisticated
president economically, perhaps in the past one hundred years.
Speaker 7 (43:45):
Perhaps.
Speaker 12 (43:46):
Ever, I will note that in his first term he
was more right than the Fed was on when it
was time to cut rates. Bed normally followed later on.
So I think he's going to make his views known.
And I would also point out that the market agrees
(44:08):
with President Trump in terms of the direction, if not
the magnitude of the cuts.
Speaker 3 (44:13):
Do you agree with President Trump that the FED should
cut by three percent in July?
Speaker 12 (44:18):
I believe that I followed the market and the market
both for the rest of the year, and the two
year market is signaling cuts.
Speaker 5 (44:27):
Well.
Speaker 3 (44:28):
We really appreciate your time, mister secretary, thank you so
much for joining us, and I suppose I could take
congratulations on the big, beautiful built Treasury or Secretary Scott
Bessent talking
Speaker 2 (44:38):
To us here on an early edition of The Closed
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
Clapping on, Cheering on Wall Street.
Speaker 1 (00:10):
An early close ahead of the July fourth holiday weekend,
the S and P five hundred pushing higher by about
eight tents of a percent, adding about fifty two points
sixty two to seventy nine and change. As we wait
for these numbers to settle. Romain Bostick alongside Matt Miller,
another record close for US equities.
Speaker 3 (00:27):
Yeah, absolutely, we see Macy's there ringing the opening bell
before this holiday weekend. Happy fourth of July tomorrow, and
happy early close to the trading day. We'll see the
bond market stay open for another hour. Right now, we're
looking at bond yields that are considerably higher, but that
is not holding stocks back from new records of the
(00:48):
S and P at sixty two to seventy nine, even
with the tenure pushing back up to six thirty five.
Speaker 1 (00:53):
And I just want to point out the Russell two thousand,
up about a percent on the day. And I say
that because the last few sessions we've seen the Russell,
the small and MidCat names really start to outperform the
larger cap names. And it will be interesting to see
if that continues end of next week.
Speaker 3 (01:05):
All right, take a look at the IMAP. It's a
really dynamic way to track the industry groups. Moving on
the S and P five hundred, right, any index that
has a breakdown like this, so you can see that
we have a gain for it. So tech stocks rising
with that Chip news. Financials are up for a second
day in a row after they proceeded with buybacks, pat
(01:28):
post passing the FEDS dress tests, and industrials are gaining
as well. Really looks like the picture that we've seen
year to date, and the defensive stocks are on the
lower end of the spectrum. Your healthcare, real estate, and
consumer staples all bringing up the rear.
Speaker 1 (01:42):
About three hundred and forty nine stocks in the S
and P are higher about one hundred and fifty our lower.
Jonathan Levin is our Bloomberg opinion columnists who lives in
the great state of Florida down there in Miami. He's
joining us right now to take a closer look as
some of the big individual gainers and decliners.
Speaker 4 (01:57):
Jonathan, Yeah, okay, so we've got Service now with a
nice game plus three point five percent. It got a
nice little price target bump over at Morgan Stanley, and
it has second quarter results of course coming later this month.
They've got great momentum coming off of Q one here
at Romain, and they're up about twenty seven percent since
(02:18):
Liberation Day, helped by some impressive subsbscription revenue. But I
also want to talk our own book for a moment here.
You had a great interview with service Now's chief people
and AI enablement officer, Jackie Canny on the close yesterday,
I believe, and she's talking about how AI is already
(02:39):
bringing some productivity gains to her team.
Speaker 5 (02:42):
So interesting stuff there.
Speaker 4 (02:44):
Moving on, we've got data Dog up fourteen zero point
nine percent, called fifteen percent. The software solutions company Romaine
is getting added to the S and P five hundred
effective prior to the open on July ninth, replacing Juniper Networks.
(03:04):
Just to point out Dan ives over at web Bush
also saying that data Dog's products fit well into recent
AI trends, and he calls out the company's recent partnership
with open AI.
Speaker 6 (03:16):
So bull.
Speaker 3 (03:19):
It.
Speaker 4 (03:19):
You know, I'm not in the weeds on Dan's thinking.
Speaker 2 (03:24):
I'll go ahead, and it was a trick question, John.
I love the by the way, I know you're going
to get to lose it. And I love this story.
Speaker 3 (03:31):
Lucid and Rivian are two companies that you expect to
be losers on the back of the big beautiful bill
removing or reducing incentives and pulling that forward to September,
but they're actually gaining today.
Speaker 4 (03:43):
Yeah, it's a little bit of a weird one, somewhat counterintuitive.
I'm not one hundred percent sure that I buy this narrative,
but here's the story. B MP Paraba out with a
note saying that some.
Speaker 5 (03:55):
EV makers may actually.
Speaker 4 (03:57):
Benefit from the sun setting of EV tax credits under
the Big Tax and Spending Bill. The logic here, Matt,
is basically that the end of the tax credits will
lead to a pullback from the likes of gm Ford
and Kia, and so there's going to be more market
share available to the likes of Lucid, Rivian and Tesla,
(04:19):
the exclusively electric guys. So sort of a glass half
full take. Not sure how I feel about but I
also want to flag Lucid out out this week with
its two Q deliveries, and they missed on soft demand
for those luxury evs, so you know, make what you
will of it.
Speaker 3 (04:36):
They hardly make any They hardly sell any By the way,
you know, Ford only sold sixteen thousand electric vehicles in
the second quarter.
Speaker 1 (04:42):
Are they trying anymore with guards evs?
Speaker 2 (04:44):
Feel like they may have just taken a bit of
a pause there.
Speaker 7 (04:47):
Yeah, I think so too.
Speaker 1 (04:49):
All right, John, you got some decliners too. It's funny
you were talking about a little bit earlier about Data
Dog being added to the S and P five hundred.
I saw Robinhood was down today. Is that because they're
not going in total?
Speaker 4 (05:00):
This is the flip side of what we were just
talking about with Data Dog. So you know a lot
of folks were expecting the company to get in there
to get that S and P five hundred nod.
Speaker 5 (05:11):
It doesn't get it. So disappointment. Not a big.
Speaker 4 (05:14):
Surprise there, Sentien, which of course was the big story yesterday.
Extending losses a little bit. I have it down a
little bit more than one percent, small adjustment in the
grand scheme of things after the company withdrew its profit
outlook on risks from Affordable Care Act plans.
Speaker 5 (05:34):
One final one that I want to call out here.
Speaker 4 (05:37):
Let me just double check the final pricing on mirk
ends up closing down one point eight percent. This is
a stock that has really not been able to find
its footing all year, hurt by underwhelming guidance and tariff concerns,
of course, but we're starting to hear some bottom feeders
getting interested in this name. Merk is currently trading at
(06:01):
quote deep valuation discounts, which offers free optionality on the
drug makers pipeline and and beyond this this per note
from Burremberg out recently, and the analysts went ahead and
reiterated their buy recommendation on the stock as well as
their one.
Speaker 5 (06:19):
Hundred dollars price target. So there you have it, all.
Speaker 3 (06:22):
Right, Jonathan Levin there from Blueberg Opinion, thanks very much
for that. Really appreciate you moving us through some of
the stocks that closed higher and lower at the end
of this shortened trading day. Remember the bond markets still
open for about an hour. I want to get right
now to one of our good friends, liz Ane Sonders.
She is the chief investment strategist at Charles Schwab.
Speaker 2 (06:43):
They have, of course.
Speaker 3 (06:44):
Trillions of dollars I'm going to say ten trillion dollars
of assets under management, and Lizanne, we got a number
at the top of the at the top of the
day here a half hour before that trading opened.
Speaker 2 (06:57):
That was pretty impressive.
Speaker 3 (06:59):
Hundred and forty seven thousand jobs at it, and we
were only looking for one hundred and six thousand.
Speaker 2 (07:04):
The revisions were good.
Speaker 3 (07:05):
The unemployment one number, it was lower, and we didn't
even get as much inflation and hourly wages as we expected.
Is that all systems go in your opinion for the
labor market.
Speaker 8 (07:17):
TVD yes, relative to not just the consensus expectation, was
it better, but well better than what had been the
whisper number that had been floating around out there, which
was in the more like seventy thousand. That said, it
was seventy thousand of private sector jobs, a huge jump
in both government sector, which was all at the state
and local level, and education and health. You guys have
(07:40):
been talking about it. The education one is a little
bit of a head scratcher, given we're talking about education
jobs in June, so there's some suggestion maybe that there's
seasonals that have come into play with that. Also, the
Beer of Labor Statistics does a birth death model where
they estimate the birth and death of businesses, the birth
(08:00):
and death of people, and that may have flattered the
number on the upside, and it's not uncommon when you're
in some sort of slow down in the economy or
an inflection point in the labor market that that birth
death model overstates the birth of new businesses and can again.
Speaker 6 (08:18):
Flatter the payroll number.
Speaker 8 (08:19):
So yet again some cracks under the surface, but clearly
to the benefit of the stock market, good news is
good news kind of day.
Speaker 1 (08:27):
Absolutely, And it gets to this idea of what the
longer term trajectory could be when it comes to the
labor market. I mean, there was a lot of doom
and gloom I think in March and April, people saying
that the effects of these trade policies and other Washington
policies would really hamper the economy. And I know the
jury is still out on that question, but at least
for right now, Lizan, it does not appear that some
of those, at least the worst case scenarios are materializing
(08:50):
just yet correct.
Speaker 8 (08:52):
And I think what all of this represents is sort
of a period of status. We're just looking at kind
of a pause in activity, and that's manifested itself into
labor market data via a limited amount of firings on
a six month rolling basis, Challenger layoffs are up and
(09:14):
bear watching, but the most recent reading was actually on
the lighter side, which in the terms of layoff announcements,
obviously being on the lighter side is good.
Speaker 6 (09:24):
So I think it's been much discussed.
Speaker 8 (09:26):
I'm not saying anything new here, but it's kind of
a no hiring, no firing kind of backdrop, and until
we have more policy related clarity, particularly with regard to
tariffs and the important upcoming date next week of July ninth,
I think that's the backdrop we're going to.
Speaker 6 (09:41):
Businesses sort of have themselves in.
Speaker 8 (09:43):
A timeout from a hiring from a major investment capex perspective,
and frankly, the FED put itself in a time out
late last year, and clearly what we saw in the
immediate aftermath of today's release was a plunge from not
elevated levels, but a plunge in expectations that we might
possibly get a July cut that seems definitively off the table.
Speaker 2 (10:02):
Lizan, my four own K looks fantastic. Right now.
Speaker 3 (10:06):
Do I move what I have left in cash into
risk assets or should I just chill at these high levels?
Speaker 6 (10:16):
You know, what Matt.
Speaker 8 (10:16):
Anybody that answers that question with specificity, shame on them.
I know you, I've known you for a long time,
but I'm not your financial advisor. I don't know what
your entire portfolio looks like, what your needs for income,
what your past experiences, whether you've got a wider and
narrow gap between your emotional risk tolerance your financial risk tolerance.
How disciplined are you. I mean, the list goes on
(10:37):
and on. So I think those kind of any kind
of cookie cutter answer suggests you're not paying attention to
the vast differences that exist from one investor to another.
So I think never should there be an investment approach
that is sort of at one time, get in, get out,
all or nothing. That's just gambling on moments in time.
(10:59):
So if the idea is to increase exposure to equities,
you do it via dollar cost averaging. You do it
via rebalancing, as opposed to trying to pick entry points.
I think that's what gets individual investors into trouble.
Speaker 1 (11:13):
All right, An Le's Ane Thunder's over at Charles Schwab
have a wonderful weekend.
Speaker 3 (11:17):
Welcome back to a special early edition of The clothes.
I'm Matt Miller here with Romaine Bostik on his program.
Thank you for letting me sit in today. Shortened trading
week because of the fourth of July, and Triple A
is projecting more than seventy two million people will hit
the road for this weekend. Gas Buddy has some good
news for those drivers. A national average price of gasoline
(11:39):
is expected to fall this weekend to its lowest level
since twenty twenty one. Joining us to talk about that
is Patrick Dehan, head of petroleum analysis at gas Buddy.
And Patrick, I always wonder when we talk about these things,
we're just talking about unleaded, right, and a lot of
cars you've got to put premium in them. And I've
seen prices at least around me and New York still
hovering all over four dollars a gallon.
Speaker 9 (12:02):
Yeah, it's kind of the mystery that's not being told.
Speaker 10 (12:04):
As you mentioned, you know, eighty seven percent of Americans
use regular You and apparently me are some of the
few that.
Speaker 9 (12:11):
Have to use premium.
Speaker 10 (12:12):
And you know you mentioned that, and premium here in
Chicago's at least hovering your five bucks a gallon. But
for the rest of Americans, falling gas prices has been
really what's happened over the last seven to ten days
or so as tensions in the Middle East have cooled.
Gas prices now about ten cents lower than where they
were at the height of that situation. The national average
out about three fourteen a gallon. That graphic that you
(12:33):
just showed twenty twenty one on July four was three twelve,
so we could get beyond that. All in all, Americans
spending a lot less to hit the road. Gas prices
down thirty seven cents from this time last year. That's
going to save Americans half a billion dollars between.
Speaker 9 (12:50):
Today and Sunday. That's real economic savings.
Speaker 10 (12:54):
I'm sure the President's going to be all over this,
but certainly gas price is much lower.
Speaker 3 (12:59):
I love that eighty seven percent of Americans used regular
gasoline because of the octane level.
Speaker 2 (13:04):
It's fantastic.
Speaker 3 (13:06):
What what kind of run up do you see when
we see crude? You know, it eclipsed eighty one dollars
a barrel a week ago Sunday and came straight back
down under seventy What kind of run up do you
see at the pump when you see that happen?
Speaker 2 (13:21):
So quickly and crude.
Speaker 10 (13:23):
Yeah, you know, if that situation had continued at a
heightened level, we probably would have seen the national average
going up somewhere in the app ballpark of fifteen to
maybe twenty cents a gallon.
Speaker 9 (13:33):
Thankfully, we never saw the full impact of that.
Speaker 10 (13:35):
The national average advanced about twelve cents, stopped dead in
its tracks, and now it's actually gone down another about
eight nine cents a gallon or so here in.
Speaker 9 (13:44):
The last week.
Speaker 10 (13:45):
So you know, generally speaking, there are some proportions that
we follow, although I will say for the Middle East tensions,
gasoline was certainly on the less receiving side of a
big jump. Diesel really took the brunt of that jump.
In fact, diesel prices at the peak jumped about thirty
cents a gallon in many markets.
Speaker 9 (14:03):
So the truckers logistics.
Speaker 10 (14:04):
Companies out there, you know, they were the ones getting
raked over the coals over that jump.
Speaker 9 (14:09):
Diesel only now starting to reverse.
Speaker 10 (14:11):
That's the good news is bold diesel, gasoline, and jet
fuel all starting to decline. And I always like to
put this myth to bed all Americans. I swear say
that gas prices go up for holidays. This is the
prime example. Forty eight of the nation's fifty state seeing
gas prices lower today than a week ago. So let's
put that one to bed. Gas prices don't always go
(14:32):
for the holidays. Sometimes they do, and most of the
time it's coincidental.
Speaker 1 (14:35):
Absolutely, And I am curious Patrick, as we get deeper
past the holiday season. There is a lot of talk
right now about just what our refining capacity is in
the US, how much wiggle room is left in that space.
Should we see any other potential shocks to the global
oil and gas story.
Speaker 10 (14:55):
Yeah, I mean that's a great point, because that's what
a lot of Americans don't realize is we still have
very little breathing room. EIA data from the government yesterday
showing about ninety five percent of refining capacity utilized, So
that's not a whole lot of breathing room for the
height of the summer. Those numbers are typical. Though we
have seen refining capacity holding nearly where it was last year,
(15:17):
it's still close to the highest we've ever seen on record,
I believe, if I remember right, yesterday's EIA data showing
over seventeen million barrels of oil being shoved into refineries
every day.
Speaker 9 (15:28):
That's a pretty good amount.
Speaker 10 (15:30):
But keep in mind diesel inventories are running about twenty
percent below the five year average. Now, some of that
may be skewed by the use of biodiesel, which is
not really tracked in that government data, But keep in mind.
Speaker 9 (15:41):
Diesel is the fuel of the economy.
Speaker 10 (15:43):
So we talk about growth and trade and tariffs, and
diesel prices are really the mainstay behind economic growth. So
keep that in my ditel inventories rather tight. That's also
why they saw such a slingshot here. Diesel is really
carrying the momentum for refineries. Talk about refinery profit ability,
a lot of that pulling on the shoulders of dealal
right now.
Speaker 1 (16:03):
And so, and this gets to the idea, then if
that is sort of what is actually holding up or
at least providing the biggest boost to the market, what
is the biggest risk?
Speaker 9 (16:12):
Yeah, you know, you look at the graphic there OPEC output.
Speaker 10 (16:15):
Speaking of OPEC, they'll be meeting here in a couple
of days in Vienna to talk about what they're going
to look at for the month of August.
Speaker 9 (16:21):
That could be very critical.
Speaker 10 (16:23):
I think a lot of the reason why gas phrases
are lower this year. The last year is kind of
that development that we saw just a couple of months ago.
OPEC starting to win back and recapture some of that
market share. They're raising production that's been substantial. That's a development.
Keep in mind OPEC started cutting oil production back in
twenty twenty three when oil was about the same level.
(16:43):
Now OPEK reversing that policy. So Middle East tensions that
could play a role. That's in the cooling.
Speaker 9 (16:49):
Stages right now.
Speaker 10 (16:50):
But you know, something happens economically, whether the trade or
tear policy suddenly reverses, or you know, we see a
little bit.
Speaker 9 (16:57):
Of a mixed match in economic data. You know, as
goes the economy, asco oil prices, whether to the goods
oil rises, or if.
Speaker 10 (17:04):
We see a slow down in the economy, oil prices
could cool off. The other factor here, as we get
into August, mother nature hurricane season can shut down rigs
in the Gulf. They also can shut down refineries in
Texas and Louisiana.
Speaker 3 (17:16):
Hey, we're going to talk to treasure Secretary Scott Bessant
coming up in the next hour. And during the campaign
he had this three three three mantra, right, three percent
deficits three percent growth and adding three million barrels of
oil per day production in the US. How's it going
so far on the ladder there?
Speaker 9 (17:37):
Boy, that is going to be real sluggish to see
to fruition.
Speaker 10 (17:40):
I mean, US domestic oil production has been holding at
about the mid thirteen million barrel arrange now for probably
close to a year. Right, it's been kind of bouncing
off thirteen point four thirteen point five. It's going to
be hard in this pricing environment for oil companies to
really ratchet up and raise rigs. I mean, we've seen
falling rigs for months, and that's the leading indicator on
(18:01):
where US oil production is going. There's a lot of folks,
myself included the Permian, right, that's kind of plateaued already.
So unless we see oil prices really perk up, I
think it's going to be a huge struggle to get
anywhere near that three million barrel increase. I mean, I
don't even know if we'll see fourteen by the end
of the year, And even the government forecasts are painting
(18:22):
a picture that we may struggle. Now, maybe OPAC jumps
in here and raises production, but keep in mind, if
OPEK throws more oil out of the global market. That's
going to have a very negative impact on US oil
production in the months and years ahead.
Speaker 3 (18:35):
Right, I mean, aside from higher prices, which would incentivize
American drillers to pump more oil. What else can the
government do, Because it's not just this year that they're
worried about, it's actually a part of the CEA's projection
to achieve a surplus or to reduce the deficit. With
this big, beautiful bill, what more can they do to
(18:56):
boost oil production in America?
Speaker 7 (18:59):
Matt?
Speaker 9 (19:00):
The catalysts are there.
Speaker 10 (19:01):
I mean Trump has made it a little bit easier,
loosening regulations, widening the guardrails. But essentially, what the president
you can't do is get oil prices to go up
because you want some lower right, drill baby, drill lowers
oil prices. That flies in the face of oil companies
desire to raise production. It's kind of like your boss saying, hey,
you want to work on July four, I'll pay you
half as much, but I'll expect you to be twice
(19:22):
as productive. No oil company is going to jump with
that opportunity.
Speaker 7 (19:26):
Are we getting paid for this?
Speaker 10 (19:27):
Matt?
Speaker 3 (19:27):
I think I hope, So I just do as much
as I can and hope it shows up in my
bank account every two weeks.
Speaker 1 (19:32):
All right, Well, well, I hope Patrick Seton paid for this.
Always great, one of the best in the business. There,
Patrick de'han over at gas Buddy.
Speaker 3 (19:46):
New York City's Fourth of July fireworks will kick off
under heightened alert for terrorist threats. That's according to a
joint assessment from the FBI and the Department of Homeland Security.
For more on what security measures are being taken heading
into the big holiday weekend, let's bring in Michael Balboni,
former Director of Homeland Security for New York State. Michael,
(20:06):
thanks so much for joining us. Let me ask you
first what exactly this means? Under heightened alert for terrorist threats?
How serious is it?
Speaker 11 (20:15):
So whenever there is a conflict in the Middle East
in particular, really actually across the world, you can have
this situation reverberate here in the United States, especially in
cities as diverse as New York City. So the FBI
Homeland Security they put out a joint intelligence bulletin which
(20:35):
essentially talks about the risk of Iranian sponsored groups doing
something here to try to project power. You know, when
you think about what the Iranian leadership has to do.
They have to convince their people that meistating being having
their nuclear facilities bombed and frankly losing a lot of
their air capability, there's still a force.
Speaker 9 (20:55):
To be reckoned with.
Speaker 11 (20:56):
So the question is could they manifest that overseas? So
that comes into a couple of different things. I think
that right now, in addition to the concern about kinectic attacks,
there's also a big concerned about cybersecurity. The Iranian government
has prepared and supported a very robust cyber attack capability
(21:19):
by Iranians and their survius. So I think that that
there's going to be a mix of things going on
right now. But heightened alert is always in the mix
when you have something overseas that could affect a population here.
Speaker 3 (21:31):
So what can the average citizen do to stay as
safe as possible? I mean, imagine you're living here in
New York City on Manhattan Island and you want to
see the fireworks.
Speaker 2 (21:43):
How do you go about that?
Speaker 11 (21:45):
So New York City in particular has In New York
the NYPD is the world's best, in my opinion, at
dealing with major events, major crowds. I mean, we take
a look everything from papal visits to presidential visits in
New Year's Eve. They really know how to do this.
They have it down to a science. Obviously, that doesn't
mean that it can stop every single threat, but in
(22:06):
terms of what people should know and see out there
is that they're going to see the visible, which is
obviously lots of police officers in uniform, and the invisible
undercovers social media monitoring, surveillance cameras. You know, we face
a much different landscape for security than we did after
nine to eleven. Nine eleven, we did not have the
mix of security cameras around the city like we do
(22:28):
that we have right now. In addition to which you know,
there's a lot of intelligence sharing that is much better
today than it was in the past.
Speaker 1 (22:36):
I am curious, Michael, when we talk about what assistance
local authorities will have. Will there be a big federal
presence in the city tomorrow.
Speaker 11 (22:45):
So in New York City is blessed with a lot
of agencies for the not only federal agencies, but the MTA,
Police support authority, police, state troopers. There's a lot of
agencies that will all combine in terms of intelligence share
and also patrol responsibilities. We see it in Penn Station,
we see it in Grand Central. You have the National Guard,
(23:06):
you have the police standing next to each other. Now, this,
this kind of mixed back and forth is a multi
agency approach that again is unique following the attacks of
nine to eleven, so so many years ago.
Speaker 1 (23:18):
All Right, Michael really appreciated Michael and Balboni there as
the former head for New York State's Homeland of Security operations.
Of course, trying to keep everyone safe for this July fourth,
a weekend, Matt, I don't know if you're going to
make it out to the fireworks or in any other
public events, but obviously in a city like New York
something everyone is always top of mine.
Speaker 3 (23:37):
Yeah, absolutely, I mean I will be going around to
I don't know exactly what yet with my two daughters
and my wife, and I want to keep everyone as
safe as possible, but I tend to just do whatever.
Speaker 1 (23:59):
And right now you are looking at the floor of
the House of Representatives. Hakeem Jeffries, Democrat from the state
of New York and the leader of the Democratic Party,
has now surpassed Kevin McCarthy to deliver the longest speech
in the history of the House of Representatives now clocking
in somewhere around eight hours and thirty six minutes. This
(24:19):
speech ostensibly Matt Miller about opposing the President Trump's big
legislative agenda, this one big beautiful bill, this budget, tax
and spending bill that is still likely to pass, of course,
a very narrowly divided House of Representatives with about two
hundred and twenty Republicans who all, based on what we
know right now, are in line with the Speaker of
(24:41):
the House, Mike Johnson, and as soon as Speaker Jeffrees
seeds the floor based on procedure, Republicans will then pick
up the mantle and will most likely vote on that
one big beautiful bill and will likely pass it.
Speaker 2 (24:52):
Yeah, I have to just shout out.
Speaker 3 (24:54):
I got to say, regardless of which side of the
aisle you sit on, this is an athlete achievement. I mean,
speaking for that long with such enthusiasm and passion takes
a lot out of you.
Speaker 1 (25:08):
Yeah, and we should point out for anyone who doesn't
understand Washington politics, any foreigners watching this wondering what the
heck is going on. So the procedures basically say that
once he starts talking he's basically given sixty seconds to talk.
But there's a loophole here where as long as he
keeps talking, does not stop, does not sit down, does
not effectively move from that podium, he can go as
(25:29):
long as he wants.
Speaker 3 (25:30):
Yeah, absolutely and yes for sure. To foreigners, it may
seem silly. Of course, every civil government and parliament has
its own silly procedures, right, But Kevin McCarthy did the
same thing last time.
Speaker 1 (25:42):
All right, of course, will keep an eye on this,
and more importantly, what we really are keeping an eye
on is when the House of Representatives resumes its normal
procedures here, which would be to move forward with the
vote on that tax and spending bill, a big legislative
agenda for President Trump. Legs slate of agenda that does
appear poised to pass. Speaker Mike Johnson at somewhere around
(26:04):
three a m. This morning did finally secure enough votes
and enough support to move that bill forward. Hakeem Jefferies
since then, effectively since about four point fifty this morning,
has been trying to stall a final vote on that
But barring any sort of major surprises here, that bill
will likely be voted on sometime soon and it is
likely to pass. Of course, one of the people who
(26:25):
will be in charge for helping to implement a lot
of provisions in that bill is the Treasury Secretary of
the United States, and I'm pleased to say that he
joins us right here on the close. Scott Bessant. Great
to have you here on the program. Let's start off
with the bill. I know we are still awaiting a vote,
a vote that is likely to occur today, and of
course the signing that the President himself has said he
(26:46):
would like to get done tomorrow on July fourth, as
you then fan out after July fourth to sell this
bill to the public and more importantly, to implement some
of the provisions. What is your number one priority?
Speaker 12 (26:59):
Number one is making sure the American American people understand
that this bill is the route to parallel prosperity. It
is the best of what we saw in the twenty
seventeen tax cuts and job backed along with President Trump's campaign,
promises no tax and tips, no taxes over time, eighty
(27:22):
five percent of seniors will not be paying tax on
Social Security and the deductibility of auto loans if the
car is made in the United States. It also funds
the president's agenda in terms of defense, border, and school choice.
Speaker 1 (27:37):
There's salesmanship that you and for that matter, the other
cabinet members will have to do to the public. But
there's also salesmanship that you have to do here, Scott.
For the markets, there's a lot of concern about that
addition to the federal deficit, the idea of a widening
of that deficit because of some deficiencies and pain for
some of those tax cuts. What is your message to the.
Speaker 12 (27:57):
Market, Well, Roman, I'm not quite sure what you mean,
because stock markets had a new high and the bond
market just had its best six months in five years,
so I disagree with that. So I think the markets
are telling us that they liked the bill and that
they believe that it is fiscally prudent and stimulative for growth.
(28:21):
And importantly, I think we can get back to the
kind of growth that we saw in President Trump's term
two point eight three point two percent non inflationary growth,
which the Biden administration was not capable of.
Speaker 3 (28:36):
Mister Secretary Matt Miller here, I'm wondering, as someone who
grew up with Alex P. Keaton watching Milton Friedman on
Phil Donahue and always thinking we were on the wrong.
Speaker 2 (28:46):
Side of the laughter curve.
Speaker 3 (28:48):
Why haven't these kind of massive tax cuts worked to
really stimulate growth in the past, and they certainly haven't
worked to replace the amount of revenue that's taken out.
We didn't see that with the Reagan tax cuts. It
didn't work out with the Bush tax cuts, and it
didn't work out with the TCJA in twenty seventeen either.
Speaker 2 (29:06):
Why is it going to work now?
Speaker 12 (29:08):
Well, I would disagree with TCJA. TCJA was a work
in progress, and then we hit COVID, and I think
what's different here also is we're going to be constraining spending.
I spend a lot of time with the Freedom Caucus
members and their constituents should be very proud of them.
(29:29):
They should be very proud of themselves. They changed the
center of gravity of the debate. So we are both
going to stimulate the economy, pick up tax revenues, but
more importantly constrain and pull down spending.
Speaker 3 (29:44):
So far, though, it looks like we're going to boost
deficits up to seven percent.
Speaker 2 (29:49):
You ran on this three three three plan.
Speaker 3 (29:52):
Three percent deficit, three percent economic growth, and three million
barrels of oil, an increase of three million barrels of
oil a day in the US US. Do you expect
to get to that by the end of President Trump's term.
Speaker 12 (30:04):
I do, And I'm not sure where the seven percent
number is coming from, right because I reject the CBO scoring.
But on the other side, the CBO also scored terriff
income at two point eight trillion, so you know that
substance that substantially increases government revenues.
Speaker 7 (30:23):
I think the growth is going to be.
Speaker 12 (30:25):
Much higher, and I believe that what we've done in
constraining spending here is just the first bite at the apple.
Speaker 1 (30:34):
Do you anticipate, mister secretary, that the US government's financing needs,
the Treasury's financing needs will increase over the next couple
of years.
Speaker 7 (30:44):
I think that.
Speaker 12 (30:47):
We will see what happens to interest rates, and there
could be an increase in financing needs based on yields.
But everything that I'm seeing says that inflation is under
control and likely coming down.
Speaker 1 (31:04):
There's, of course, the costs to finance that, and we
look at where yields have been, and we know there's
been a lot of volatility there some stability in recent
week's up partly because of some of the things that
you've done and said publicly. But we've also seen a
little bit of reticence to buy into longer dated US treasuries.
I know you have been public about the idea, at
(31:26):
least in the short term, of relying a little bit
more on shorter term treasury issuance. Do you anticipate that
will continue?
Speaker 12 (31:34):
Well, I think what we're going to see is one
of the underreported things of the One Big Beautiful Bill
is it also gets us away from this terrible debt
ceiling dilemma, and because of that, we've had to constrain issuance.
So it's likely that initially we will use bills to
(31:54):
refill the Treasury General account.
Speaker 1 (31:57):
Do you worry about any potential rollover risk in that strategy, No,
I don't.
Speaker 12 (32:03):
We've seen very durable and robust treasury auctions that I
see who the buyers are. I think that we are
going to see US banks would take up more of
the debt issuance because of the supplementary supplementary leverage ratio
(32:26):
reliefs that they're going to be getting, and were going
to pass the bill today. President Trump's going to sign
that tomorrow. And then probably the following week we're also
going to have the stable coin legislation, which I think
could create at least two trillion in demand for treasury bills.
Speaker 1 (32:47):
We just want to just flag to our viewers right
now that the minority leader in the House of Representative,
Jakeem Jefferies, does appear to be wrapping up his speech,
and based on procedures in the House of Representatives, this
means the floor would seed back to the Republicans Matt Miller,
who are prepared to vote for this bill, a bill
that does appear to have the votes to.
Speaker 3 (33:08):
Pass, right and a bill that at least, according to
the CBO, is going to add another almost three trillion
dollars to the national debt. Right now, we're looking at
more than thirty six trillion dollars, mister Secretary, And I
know you take issue with the CBO's scoring and especially
the growth rates that they forecast out. Where do you
(33:28):
think we're going to see the national debt, for example,
at the end of President Trump's term in January of
twenty twenty nine, Will it be lower than it is
right now?
Speaker 12 (33:37):
Well, I think the growth is going to be much slower,
and one of the things that Secretary Yellen and I
agree on is not the absolute level of the debt,
it's the debt to GDP. So I think we are
going to see the debt to GDP well into the
nineties by the end of President Trump's term.
Speaker 3 (33:55):
Well, we were talking with Stephen Myron this morning. He
expects that this bill will bring down the national debt
by between five and a half and eleven trillion dollars
ten years out. Does that make sense to you that
we could see a lower absolute number at the end
of the decade after this legislation has passed.
Speaker 12 (34:14):
Well, again, I think that it's very difficult to predict
ten years out. But you just said that CBO expects
three trillion at the end of the window. But they've
also said that there's two point eight trillion in terraf
income that we didn't get scored. So a lot of
moving pieces here, but I'm confident that we're going in
(34:37):
the right direction.
Speaker 1 (34:39):
So, mister Secretary, I do want to get your thoughts
about just broader policies coming out of this administration beyond
just this one big, beautiful bill that is now appears
to be advancing in Congress. There's been a lot of
questions in the market about what the administration's stances on
the dollar, whether there truly is a strong dollar p policy,
(35:00):
or whether that policy a long term policy. All of
strong dollar support has shifted to something else.
Speaker 12 (35:06):
I'm not sure why that is in the market. The
price of the dollar has nothing to do with a
strong dollar policy. Current currencies move up and down based
on a variety of factors. But a strong dollar policy
means several things. One is what is the dollar strong against?
(35:28):
Or the other is another currency stronger higher in price
of the moment. That doesn't have anything to do with
a strong dollar policy. The strong dollar policy is are
we doing the things over the long term to ensure
that the US dollar remains the reserve currency of the world.
Speaker 7 (35:48):
And we are.
Speaker 12 (35:50):
We are setting the stage for economic growth, we are
constraining inflation, we are making the United States the best
destination for global capital, and I think that's going to
continue to happen.
Speaker 7 (36:03):
I think, as I said.
Speaker 12 (36:07):
Many times over since World War Two, the demise of
the dollar as reserve currency has been predicted, and I
think once again the skept is going to be wrong.
Speaker 7 (36:18):
But there is no change in policy.
Speaker 1 (36:21):
Fair enough, but I'm sure you understand that the weakness
that we've seen in the dollar to start the year
is something we have not seen in decades, and there
are other countries that have been trying to take advantage
of it. In a speech just this week we heard
from the Chinese Central Bank governor who really laid out
at least their vision, the Chinese vision for a new
global currency order, which would of course mean a reduced
(36:42):
rule for the dollar and in their view, a greater
role for the Yuon Now, regardless of whether that is
a viable plan, I am curious as to what you
think about the idea that this is even being spoken
about publicly.
Speaker 7 (36:55):
Well, I mean, look, what are the Chinese going to say?
Speaker 12 (36:58):
And by the way, policy they have a non convertible currency,
so how are they going to be a reserve currency.
They also have one point four billion people who want
to get their money out of China. They have capital
constraints on taking out money. The sine kwannon for a
(37:20):
reserve currency is that it trades freely. And I saw
my friend Christian Legard, president of the ECBs, the other
day said that maybe this is the Euro's moment. But
I can tell you if the Euro hits one twenty,
Europeans are going to be squawking that it is too strong.
They are an export economy, so let's see what happens.
(37:41):
They should be careful what they wish for, whereas in
the United States we recognize the responsibility that comes with
being a reserve currency.
Speaker 3 (37:50):
I want to ask about this Republican Party's shift, seeming
shift to support blue collar workers. We've seen a wage
boom among those people, an increase one point seven percent
in the first five months of President Trump's term, and
that's I think the fastest growth we've seen for that
segment since nineteen sixty nine. You talk about no tax
(38:12):
on tips, you talk about no tax on overtime. Why
why do you think that this party has really shifted
to become the party of the blue collars.
Speaker 12 (38:22):
Well, I'm going to correct you on that, because it's
the fastest we've seen since twenty seventeen. Previous to President
Trump was nineteen sixty nine. And look that this is
the party that delivers for working Americans. The Biden administration
wiped the floor with the bottom fifty percent of wage earners.
(38:44):
That the great inflation. The official statistics were around twenty
percent for President Biden's term, but really for the package
of goods and services that working Americans buy, it was
well in excess of thirty percent, So that was a
real increase and purchase in power. In President Trump's first term,
we saw hourly workers, non supervisory workers wages increase faster
(39:10):
than supervisory workers. We saw the bottom fifty percent of
households have net worth gains in excess of the top
ten percent. And again my message here is parallel prosperity.
Both sides can do well, but we are focused on
Main Street catching up to Wall Street. But it doesn't
have to be one or the other.
Speaker 3 (39:31):
At the same time, the CBO has projected that this
one big, beautiful Bill Act passing would result in seven
point eight million people being taken off the Medicaid rules.
They would lose their healthcare coverage, and we've seen also
projections that millions would lose snap benefits. We're talking about,
(39:51):
you know, single mothers with children. We're talking about people
who have difficulty dealing with the untamable bureaucracy of government.
How can you make that kind of move with compassion.
Speaker 12 (40:06):
Well, let's start at one point four our illegal aliens,
So they're not supposed to be receiving Medicaid benefits. The
approximately five million to six million are what we believe
are able bodied adults. So there's going to be a
twenty hour a week work requirement, and we are saying
(40:29):
that this needs to get back to the people who
Medicaid was meant for. It was meant for pregnant women,
it was meant for mothers, it was meant for children.
So we are focusing on the benefits for those who
need them and not be able bodied.
Speaker 1 (40:46):
We're in conversation right now with the US Treasury Secretary
Scott best In for our viewers worldwide, we should point
out that Speaker Mike Johnson is now on the floor
of the House of Representatives, presumably to move forward with
a formal and final vote on that tax and spend bill.
Mister Treasury, Mister Secretary, I am curious about what comes
next after this. We know that we ostensibly have this
(41:09):
July ninth deadline on trade, and I know it's going
to take several weeks, if not months, following that to
really start to hammer out some of these deals. Do
you anticipate that we're going to see additional deals and
more substantive deals pretty soon within the next few weeks.
Speaker 12 (41:26):
I think we're going to see a flurry of deals
before July ninth. We'll see how the President wants to
treat those who are negotiating, whether he's happy that they're
negotiating in good faith. I think that we're going to
see about one hundred countries who just get the minimum
ten percent of reciprocal tariff and we'll go from there.
(41:50):
So I think we are going to see a lot
of action over the coming days.
Speaker 1 (41:56):
Have you been directly involved in any of those negotiations
and it's so, are there specific provisions that those other
countries have been asking the US?
Speaker 12 (42:05):
Well, I'm not going to negotiate on international television, but I.
Speaker 6 (42:10):
Don't want to negotiate.
Speaker 1 (42:11):
Just tell us.
Speaker 12 (42:12):
Well, yeah, sorry. What I would say is some countries
have come with or trading blocks, have come with good deals,
some would come with okay, some would come with deals
that are unacceptable, and we are going to be announcing
(42:33):
several deals. The President has the final say. And what
I can tell you is that the career staff, whether
it's a Treasury, Commerce USTR, are all saying that they
can't believe that these countries are given up things that
they haven't seen them offer in the past two or
three decades. So this is a win for the American people.
(42:56):
It's a win for fair trade.
Speaker 3 (42:58):
Can I ask, just finally about the pressure the President
and others in administration have put on Jerome Palat to
cut rates. President Trump has asked now for three full
percentage points of cuts, three hundred basis points. And it
strikes me that that would either overheat the economy or
cause absolute chaos in the treasury market. Don't you think
(43:20):
it's important that the Federal Reserve operate with an amount
of independence?
Speaker 12 (43:25):
Well, fed Reserve does operate with an amount of independence,
just like a referee does out of the floor of
the basketball court. They're independent, but the coaches work the
ref all the time. President Trump is the most sophisticated
president economically, perhaps in the past one hundred years.
Speaker 7 (43:45):
Perhaps.
Speaker 12 (43:46):
Ever, I will note that in his first term he
was more right than the Fed was on when it
was time to cut rates. Bed normally followed later on.
So I think he's going to make his views known.
And I would also point out that the market agrees
(44:08):
with President Trump in terms of the direction, if not
the magnitude of the cuts.
Speaker 3 (44:13):
Do you agree with President Trump that the FED should
cut by three percent in July?
Speaker 12 (44:18):
I believe that I followed the market and the market
both for the rest of the year, and the two
year market is signaling cuts.
Speaker 5 (44:27):
Well.
Speaker 3 (44:28):
We really appreciate your time, mister secretary, thank you so
much for joining us, and I suppose I could take
congratulations on the big, beautiful built Treasury or Secretary Scott
Bessent talking
Speaker 2 (44:38):
To us here on an early edition of The Closed
Hosts And Creators
Tim Stenovec
Carol Massar
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