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00:00From the world of politics to the world of business this is balance of power with David Westin. From Bloomberg World Headquarters in New York to our television and radio audiences worldwide welcome to Balance of Power. There is one big story for Bloomberg audiences today and that of course is the Federal Reserve and what it is likely to do in Washington. So we've sent our best and brightest down to Covid Michael McKee. So like you're down there to cover this. What are we expecting. Well David the question is how does Jay Pyle get around the question of will the Fed speed up interest rates increases. We're already going to see that today with 50 basis points baked in. But the question becomes do they go faster. You take a look at where they expect to be which is neutral in the market now sees that at over 3 percent by the end of the year. Well the white line is where we would be at the end of the day. That's more than 200 basis points away. So to get to the terminal rate by the end of the year or at least to get to neutral the Fed would have to do maybe some 75 basis point moves. So those are the questions for today. Do we see the Fed do 75 basis points. Probably not today but do they hint at doing it in the future. And then the statement is probably going to emphasize the fact that there are going to be additional rate increases that the news conference with Jay Powell saying do we think that you're going to raise rates 75 basis points. We'll see how he dodges that. We also get the news on the balance sheet and how they're going to proceed with that. That probably won't have as much market impact as the question of where the Fed is going and how fast and real begin to get some of those answers and talk like today with the statement in. Then of course that news comes as that all the special and Michael McKee will be back right here coming from Washington to bring it all to us. Thanks so much Mike for being with us today. And now in the meantime in advance of that Fed decision today J.P. Morgan chair and CEO Jamie Blunt giant diamond talked with our colleague Francine Lacqua about the job in front of Chair Pile today. And the Fed is going to have to raise rates reverse QE and they're going to know if they can. They're gonna try to slow down the economy enough so that 8 percent starts to come down over time. And I wish him the best. Yeah we're a little late. But you know remember two years ago we had 50 percent unemployment and no vaccine. So I think people should take a deep breath give me a chance. And I think they're going to move. I think the sooner they move the better. So you have to be patient right. Breath. But what could go wrong. I mean you talk about you know a strong U.S. consumer strong business. You talked also about storm clouds. What are those. Strong crowd clouds. What's worst case. I hate the word unprecedented but this kind of fiscal and monetary induced unbelievable growth in the U.S. which was true around the world. It's obviously slowing down in Europe. That's abnormal. We've never really quite had that before. We've never had Kutty before. So you look at QE. That's where the greatest experiment is ever done. Going to be writing books for 50 years on it. And we're going to have to reverse it. And that's a huge change in the flow of funds over time or on bonds and rates and stuff like that. My own view is that rates apply. We'll still have to go up from here. That of course is Jamie Diamond the chair and CEO of JP Morgan speaking earlier today to Bloomberg. Now we're going to turn to one of the consistently best kind of the predictors that we are as we will really rate them here at Bloomberg is Steven Stanley's the chief economist at Amherst Pierpont Securities. It is now a Santander company. So Steven congratulations first of all your new and your new relationship. But give us your sense of what you're expecting on the Fed today. Yeah I think Chairman Powell has a tough job ahead of them because as Mike outlined the markets have really gotten pretty aggressive about their expectations of future rate hikes. And I'm not sure the Fed is inclined at this point to quite match what the market has priced in. But at the same time having been so slow to the game and really balling it really you know to be blunt on inflation. Chairman Powell has to be tough and he has to be consistently tough. And I think we'll see that tone again today as we have over the last several appearances that he's made. Stephen you point to a really interesting point. I wonder if there's an air to air to be made here. Does he need to air on the side of hawkishness rather than dovish was given the fact that he may have lost a bit of credibility on the inflation question. Absolutely. I think the Fed is is struggling at this point to regain that credibility. And it feels like the markets have kind of taking control of the narrative. I feel like the market's kind of pushed the Fed into going so aggressively at this meeting is doing not only 50 basis points but also balance sheet reduction at the same time. And now as Mike said a lot of people are thinking in terms of maybe the Fed having to go 75 at the next meeting. So the Fed is kind of chasing events a little bit at this point in. Chairman Powell will hopefully try to wrest control of that narrative back today in his press conference. And what effect is this all likely to have in the economy. Where are we. I've seen in your most recent notes we're still pretty good in terms of business and consumer spending. Yeah I think the economy still has a lot of momentum in the short run. We're you know we're hearing a lot of anecdotal evidence of very strong consumer spending. I think households are are still getting back to what we would think of as normal fully reopen fully reopened activity travel and things like that. So it's very much going to be I think strong growth for the next few quarters. And eventually tighter Fed policy means potentially tougher conditions and possibly even a slowdown or a recession. But we're you know we're pretty far away from that. That's probably two years out or maybe even more. So Stephen you suggested perhaps to some extent Jay Powell the chair of the Fed right now is chasing the markets with respect to the bond markets. Is he also chasing the labor market. Is he also chasing the housing market which seems to be going ahead as well. And that is an inflation problem potentially. Yeah I think housing is actually going to be a nice test case of this because mortgage rates obviously have risen much faster than what we're going to see for a lot of other borrowing rates. So if housing sustains its strength through the next six months into the latter part of 2022 that's going to be a good sign for the economy. I think I can tell you that the economy can withstand higher rates than anyone in contrast. If housing starts to slow down rapidly later this year then I think you're going to have a verdict on just how sensitive the economy is to rates. In the meantime as you again pointed out one of your notes were almost 2 2 job openings for every person without a job. So where were the labor. We have the dual mandate. Obviously share power right now is very clearly focused on inflation. Does he not have to worry at all about the influence beside the two are very much linked. I think at this point the labor market is so tight it's red hot. And as a result you're seeing you know ongoing strong wage gains. And that is going to continue to feed into the inflation picture. He certainly doesn't have to worry about employment in the sense of having to be easier to get the labor market into help. We're in full health right now. I think the unemployment rate is probably going to continue to fall over the course of the year. We might even see below 3 percent on the unemployment rate by next year. And where are you right now. Stephen on the prospect of recession we ask everybody that question. By and large we hear a lot of probably not this year but maybe next. Yeah I think it's I would say it's it's a certainly a real possibility if the Fed has to get really aggressive. And I fear that is the risk that the Fed ends up having to go much more than than what is currently priced in ultimately to get inflation under control. But I think it's going to take a while for that to do its have its full effect on the economy. So if we're going to have a recession I'm thinking it's probably latter half to 2024 or maybe even 2025. Stephen finally as you suggest we feel like we know an awful lot about what's going to be said today both with respect to the rates and also for that matter with the balance sheet given the notes from the last meeting. If we are surprised where will we likely be surprised. I think it's really going to come down to the tone that Chairman Powell conveys and what the market interprets from that about how fast the Fed is going to go. So you know as Mike said I think the markets like very explicit guidance. So they would love for chairman probably come out say we're going to do X Y and Z in the next three meetings. And of course he's not going to say that but his language is going to be passed very carefully. And that's I think going to determine how the markets respond based on whether he's ruling in or out certain options that he might have at his disposal and what he has to say about how far the Fed might need to go to get inflation under control. Okay. That's always so helpful to talk with you. Thank you. That's Steven Stanley. Be sure to follow our special coverage of the Fed decision on Bloomberg Television Andrea starting today at 2:00 p.m. 1:00 p.m. Eastern Time. Beg your pardon. Coming up we'll talk with Republican Senator Marsha Blackburn of Tennessee. Well what happened to that regulation of big tech. Washington has been talking about this is balance of power on Bloomberg television and radio. This is balance of power on Bloomberg television and radio. I'm David Westin want to keep it up to date with news from all around the world. For that we turn to Riddick Gupta here with the first word Riddick. Thanks David. The European Union is proposing to ban Russian crude oil over the next six months. European Commission president. That's live on the line. Also said that refined Russian fuels would be banned by the end of the year. Bloomberg's land that Hungary and Slovakia won't have to enforce the ban until the end of 2023. Both were opposed to a quick cutoff of Russian oil. Northern Ireland elections on Thursday could mark a major shift in the region's sensitive political balance and undermine UK Prime Minister Boris Johnson's bid to redraw the terms of the UK split from the European Union. Opinion polls show Sinn Fein whose ultimate goal is to unite the region with the Republic of Ireland on course to become the biggest party. Such an outcome would hold profound significance for Northern Ireland which has been historically dominated by parties loyal to Britain. And a study from the U.K. says that civic Covid may cross long lasting cognitive impairment equivalent to losing about 10 IQ points. Patients were assessed six to 10 months after being hospitalized. They showed slower and less accurate responses than what was expected. The study says it was similar to how much brain power 70 year olds typically have lost compared to those age 50. And the White House is boosting support for quantum computing as China pours billions into the next generation technology. President Biden is signing a couple of tech focused directives today. One would require the country's most vulnerable I.T. systems to adopt new standards against the threat of code cracking from quantum computers. Federal agencies will also help to develop comprehensive plans to safeguard America's intellectual property. Lebanese 24 hours a day on our on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts and more than 120 countries I could get to. This is Glenn Beck. David thank you so much Rebecca. Well we've heard new news about regulation of big tech but it's on the other side of the Atlantic. Over in Brussels as the European years move forward the two different acts to really address some big tech issues. In the meantime back in United States we haven't heard as much recently but we have we're joined now by somebody who really knows this area terribly well. She's Senator Marsha Blackburn Republican of Tennessee. Senator thank you so much for joining us. I want to talk about big tech with you as I always do. But first just spend a minute or two with us on that leaked decision or opinion coming out of the Supreme Court. You've tweeted about it. What do you make of what we saw. Yeah you know David what we saw was an activist inside the court someone who is working for a justice obviously and whether they're from the left or the right. What they did was wrong. They're trying to influence an outcome. The justices spend a lot of time in conversation and sending drafts back and forth in editing as they reach their opinions. Confidentiality is paramount. To do this is a violation of that trust that has been placed in that individual. My I'm pleased that Chief Justice Roberts is beginning an investigation. The marshals are going to do an investigation. I think in short order they will know exactly who did this and they should be punished to the full extent allowable etc. Actually I worked up there as a law clerk many years ago and I can tell you it is shocking the breach of confidence no question about it. But I wonder if we could also ask you about the political consequences potentially of this development. One of the things that Senator Schumer from the Democratic side noted yesterday is so far that Republicans said you yourself have focused on the leak not of the merits of it. Do you think that this will be helpful to Republicans if in fact we don't know this will happen. The court comes out the way this opinion would indicate. Yeah I think it would be appropriate at this point to focus on on what happened to the integrity of the court and then respond appropriately when there is a decision whether they uphold or whether they send this back to the state. It's important to note is that there would not be anything that banned abortion. It would be positioning it with the state to make the restrictions and regulations on abortion et cetera. I do want to turn to the big tech issue because this is something you do know a lot about. You invest a lot of your personal time and effort in it. We have two new acts. They're called Coming out of Europe the Digital Markets Act Digital Services Act to regulate big tech. Thus far we don't have I don't believe any counterpart in United States. What do you make of what Europe is doing and should we be doing something similar. Oh indeed. And Senator Blumenthal and I have worked in a bipartisan manner drafting legislation that would address some of these in holding hearings. You know we've had five hearings on big tech this year and focusing on what is happening online whether it's to consumers whether it's to children looking at what is happening in the section to 30 round which as you mentioned the Digital Services Act goes after that fraudulent information fraudulent merchandise that is more closely akin to our section 230 when it comes to privacy. That is their market act. And I think David if you as I have talked to those parliamentarians from the UK from the EU from Canada. But when the EU when they look at what happened with GDP are they feel like they overreached and therefore they stifled innovation. So they wanted to do a revisit of that into something that would be more friendly to innovation. And I appreciate the thoughtfulness that they have brought to this. They felt like it was important to move forward. They are ready for us to move forward. I'm ready to move forward with consumer privacy. We have our legislation about ready to go and are looking forward to getting that filed. Of course our open app market bill is ready to go to the floor for markup. Our kids online safety bill is ready to receive a markup in Commerce Committee. So Senator you pointed to that question I wanted to get to which is the balance between promoting innovation and yes free speech such as it is such as it is online at the same time protecting people against certain forms of speech. That's something that Elon Musk as he buys Twitter. He wants to have more open forums not as much regulation to regulations such as the Digital Services Act potentially imposing responsibilities on people like Elon Musk to make sure they are police in their speech at least to some degree. Yes. When you look at their Digital Services Act what you will see is that these aggregator sites are going to have to confirm that the information they're sending forward is accurate or that the products that they are pushing into the marketplace are not fraudulent products. This just it doesn't limit free speech. It does limit change of ideas. What it does is focus on the the creator of that content. And I think that this is a way for them to keep that open forum if you will. So and when I look at what it what we do in America the public square which we're talking about Twitter and a lot. Now David when that started it was to be the online public square. And this nation and our freedoms have been well served by robust respectful bipartisan debate getting that point and that counterpoint. We want to make certain that free speech in the USA continues that people have the right to speak their mind. And we're not going to agree all the time. But I accept that. And I realize that I learn from hearing someone give a counterpoint to a point that I have made. That's a good thing. We want to keep speech free. We want to keep these platforms accessible. And we want to make certain that products that are sold online are not fraudulent products. At the same time as you said you've got legislation that you're proposing with Senator Blumenthal. What are the prospects of getting it enacted anytime soon. The prospects increase every day when you talk to moms. One of the things that they want to see is privacy for their children online safety for their children online. They also want to make certain that there is a way to protect the privacy of their family and them and themselves individually. I call it protecting and owning their virtual you. They want to control that information. And every day that goes by and certainly Covid contributed to this. What we hear from people as I want to own my information and legislation that I've been working on for years would enable you the consumer to provide explicit consent. If you want to share your information. If you withhold that consent the platform could not boot you off the platform and they could not make that the price if you will for using their platform. Senator thank you so much. Really appreciate your being with us at Senator Marsha Blackburn of Tennessee. Coming up we're going to take a look at the markets ahead of that Fed decision to about just over 90 minutes right now. This is balance of power. I'm Bloomberg Television and on radio. This balance of power on Bloomberg Television Radio I'm David Westin as we all know the Fed is due out in about an hour and 34 minutes right now with this Fed decision late decision on rates and then to be followed by a news conference. And so we're going to take a look at the markets in advance of that return to critic Gupta. So what are the markets doing. Pretty well. The markets are down David and this is really strange because traditionally at least going back in the last year every time we've had a Fed meeting you've had this kind of risk off ramp up. And the day of the Fed meeting seems a little bit of green on the screen this time around. You see the exact opposite. You've had two days of gains and then some positive or I should say two days of gains and then moves down this morning as well. And really what comes down to what they're going to say about their dual mandate for our TV audience. You're seeing a graphic on your screen about the unemployment versus the inflation. You can see that they've really done that. But a lot of these comments today are going to be about the jobs market. How tight is too tight at a time when you're actually seeing a lot of concern about the jobs market. I believe the statistic out is almost two open jobs for every one unemployed person. So it's really interesting to see that this tightness of the labor market that was really praised pre pandemic now really called extreme and considered something to address it at the same time credit having the markets priced in. An awful lot of tightening at this point. Is there a chance that actually they could react with some favor depending on what Jay Powell says what the Fed says. I believe they call this jawboning. How much has the Fed really prepared the market for. What they're going to hear today 50 basis points is what's priced into the market for the next I believe three meetings for sure 75 basis points is where it really gets tricky because you do start to see these market calls for 75 basis points at some point. You even saw some market pricing for that. And the Federal Reserve has already shown even with the last interest rate hike that it happened 25 basis points in the last meeting. You really saw the market far far ahead of it. The Fed had to do some catching up. So if the market is pricing in 75 basis points will the Fed catch up. And that's really what we're waiting to see. Any comments in that direction or if they completely kind of throw that out of the window that 50 is as big as they're going to go. OK. Thank you so much for setting it up for us. That's pretty good stuff on the markets ahead of that Fed decision. Coming up we get the latest on the war in Ukraine with Russia expert Angela Stent of Brookings. That's coming up next. And we are on blue balance of power on Bloomberg television and on radio. This is balance of power on Bloomberg television and radio. I'm David Westin. Now we want to keep up to date with news from around the world. Then we go to Riddick Gupta here with the first word Riddick. Thanks. David. Rosser is focused on cementing both military and political control over the Ukrainian territory. It has taken so far the Kremlin is installing occupation governments and has ordered locals to use rubles for transactions. And that's one that will be also be referendums in some areas to open the way for full annexation. North Korea launched what appeared to be a medium range ballistic missile today as Kim Jong un wraps up his nuclear program ahead of President Biden's first visit to Seoul South Korea said it was still analyzing details of the launch in North Korean state. Media often don't reveal details of such exercises until at least the next day. Kim's regime is on pace for its busiest testing year ever. Biden is expected to make his first visit to Seoul as president on May 20. Shanghai and Beijing are sticking to that Covid zero policies and no matter what the economic cost is. But Hong Kong is gradually moving towards opening up to the rest of the world. The city is accelerating a plant with social distancing rules. Hong Kong is also ending a ban on visits by all non residents and relax some restrictions on inbound flights. And the number of people going hungry surged by twenty five percent last year. And that toll is rising as the war in Ukraine sends food prices even higher. Conflicts in countries like Ethiopia and Afghanistan have worsened crises that and economic shocks from the Covid-19 pandemic Covid food access in many areas. That's according to new data from the Global Network Against Food Crises which found almost one hundred and ninety three million people across more than 50 countries suffered acute food insecurity in 2021. Lebanese 24 hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts and more than a hundred and twenty countries farmers could get this thing back. David thank you so much for NIKKEI. I want to go back to the story Riddick has just told us about and that is the apparent attempt to annex parts of the eastern Ukraine particularly around the dumbass region. We're going to turn now for a read on what is really going on over there to a true Russia. And for that matter Vladimir Putin. Expert Angela Stent is Brookings Institution senior fellow and she is author of Putin's World Russia Against the West and With the Rest. So Angela thank you so much for being with us. What do we know about what's going on in the Donbas region right now. Well there's fierce fighting going on there as the Russian troops try and take the whole of the Donbass region. They only control some of that now. But we have heard rumors that it's possible that next week they will announce they've annexed those two separatist entities and they will become part of Russia. And that's one of the stories we hear. And then we hear that there will be as good as he was saying before referenda and some of the chance that they've currently taken over nearby and that those referenda will also have to do with joining Russia or at least becoming a quote unquote independent people's republic. So they are installing occupation governments and yes trying to get people to use the ruble. Now as I understand it Angela these are areas that for the most part Russian forces or Russian sympathizers were occupying already. So this is not because of the war necessarily. Is this a shift away from trying to take the rest of the Donbas. I don't think it's a shift away. I think what they're trying to do is consolidate that power there. And some of the towns like her son where they aren't going to apparently going to have a referendum were not under Russian occupation before. So I think they're just trying to consolidate everything they can there with the hope. They think once they've stabilized that of moving further west and taking more territory which gets the nearer to Moldova. And we already heard a Russian general a couple of weeks ago saying that was one of their ultimate aims was to get to the separatist region of Transnistria which is part of Moldova. And we've heard a lot of talk about May 9 which is a holiday in Russia to celebrate their victory over Germany in World War 2. How important is that day and what sort of announcement might we expect out of Vladimir Putin. Clearly he's not going to announce that he's moved into Kiev. So it's a very important holiday and particularly under Putin. He's now created this cult of World War 2. And so he doesn't need to make a big announcement. Some people think he is going to declare general mobilization and actually say that declare war on Ukraine. Remember until now it's a quote unquote special military operation. But that would mean general mobilization might income war popular criticism of this war because obviously there would be more casualties but it would also enable it to put the Russian economy on a wartime footing. Other people say that he's not going to do that. That he will declare victory of some sorts in the Donbas. And he might declare as we were just saying that those two republics of handsome Donetsk are now part of Russia. So all eyes are on that night May 9th parade. We've already seen pictures of them rehearsing for all of the nuclear missiles being paraded there and the troops doing that goose steps. And Jill when we talk about a general mobilization could that also include a broader draft or conscription of forces. Because there are reports that in fact they're going through their troops fairly quickly. There were reports for example they had to shift some in from the Far East. Yes no doubt. That definitely would mean general mobilization means a much broader draft. And they've already been using draftees in this military operation. But yes more people would be conscripted into the army. Also we heard today of plans first of all out of the European Union for a decline in the purchase of oil for Russia really shutting it off by the end of the year the same time we heard out of Moscow. Boy that's a two edged sword I think was expression they use. What do you make of that. How much would that affect Russia if in fact that came to pass. Well if they do phase out imports of Russian oil that's really pretty significant. You know in terms of the earnings that Russia gets you know right now it supplies a goodly amount of oil to the European Union. And of course the Europeans will have to find alternative sources. And that's what they're scrambling to do at the moment. But they appear to be determined to cut off this source of revenue that fuels that Russian war machine. Which raises the broader question of how many more sanctions can we have. President Biden came on an address to a specific the economy earlier today. But in the course that he was asked a question about it. This is what he said. We're always open to additional sanctions and I believe I'll be speaking with members of the G7 this week about what we're going to do or not do so until of course he said we're talking with the G7 most people say it's much more effective. You can get other people to join you in the sanctions as there are a lot more we can do to Russia. Well we've just sanctioned another cut off another major bank spare bank from the swift system. I guess there are more banks that could be totally cut off from the international payment system. I don't. There aren't a whole lot more sanctions. I think that can be imposed at this point. And as you alluded to it a large number of countries of course have not joined the sanctions. China India a number of you know Latin American countries Africans the Middle East. So the the Western sanctions are powerful. Obviously the countries that have imposed them you know have the lion's share of the world's GDP but not all countries are going to join those sanctions. And that gives Russia still that opportunity needs to trade and get financing. And so as I mentioned you wrote that really terrific book Putin's World. And so I think of you as sort of somebody who can sort of identify what's going on with President Putin at any given time. What do we know about his state right now. There are reports that he is relatively isolated. There's speculation even about his mental state or his physical state. Do we know anything. I mean a lot of speculation. We certainly can assume that he was informed by those around him. They gave him a false picture of what was going to happen. He apparently really did believe that this would be an easy win over Ukraine. But I think he also seems to be dug in now determined to finish at least taking part of Ukraine really resulting at the moment or what could be a Ukraine that's divided between the eastern part that really is with Russia and then the kind of the rest of Ukraine that would have to function without a lot of its economic lifeline. So we don't see any indication at the moment that Putin wants to make any concessions or to withdraw troops. Well what about that possibility. As I say I read your book and I learned a lot about Vladimir Putin. How patient a man is he. Because if in fact he takes for example let's make it up the eastern part. So part of the Donbas. So maybe in all the Donbas but then he has to wait for the rest of it to try to really put more pressure on keeping the rest of Ukraine which is would be supported I assume. But then I'd say is he patient. That could be a matter of years and there could be conflict going on in the meantime. I think he's fairly patient although you know he turns 70 in September. So he may be more focused on his legacy now than he would have been 10 years ago. But I this is a conflict that could go on for a long time. It could one phase of it could end say. You know in a few weeks or maybe months when the cease fire. And you know territorial rearrangements. But then it could resume again assuming that he's not going to give up on his broader goal of really subjugating Ukraine and creating this Slavic state consisting of Russia Belarus and Ukraine. Angela do we have any good sense of the degree to which he's enjoying support from within Russia. Because there is some thought at the beginning the Russian people would not be very excited with this new mentioned. If there's a general mobilization that might actually be counterproductive because people be more nervous about it. But then there are reports that in fact he's gathering support. Yes his support levels if you're to believe this is an independent pollster. And I do believe them. His support has grown as this war has gone on. People seem to believe that now in a patriotic fight you know to save Russia against Western enemies. And that's how he's casting it now. It's not just Russia against Ukraine. It's essentially Russia against NATO and particularly the United States. And so that he seems to have gained popularity among those people who are still in Russia. Obviously a large number of Russians have left. I heard a figure of 600000 yesterday. That's true. And those people are clearly not supporting him. But those that are left there seems to still be support for the war and an acceptance that you know when the body bags come home these people's sons and husbands and brothers have died in a noble cause. Angela finally what do we think about Vladimir Putin's plans beyond Ukraine. Originally there was speculation at least in the West that he had thought about sort of a greater Russia re-establishing a former empire that would have included other countries. And he's already moved into northern Georgia of course. But the Baltics and some other areas given what's happened here isn't almost necessary that he's re-evaluating that because this clearly didn't go as easily as he thought it might have gone. Right. And so the Slavic state to which I just alluded that would be hard to create now because he doesn't have the whole of Ukraine. We did have the generals say that they're interested in linking up with Transnistria so they may have their eyes on Moldova for instance where you have a very pro. Western president at the moment but someone ready yet the wings who is much more pro-Russian. So I think his appetite is larger than what Russia is doing at the moment. But I think they don't have the capabilities to do that at the moment. So that might be a longer term plan for him. But I don't think he's going to give it up as long as he is in power. And it's always so helpful to talk to you. Thank you so much for being here. That's Angela Stent of the Brookings Institution. Coming up we're going to go to talk about the new primaries and just came out yesterday in Ohio and Indiana. With our Washington correspondent and host of Sound that is of course Joe Matthew. That's coming up next. A balance of power on Bloomberg television and radio. This is balance of power Bloomberg Television Radio. I'm David Westin. The midterm election race got off to more or less of an official start yesterday with primaries in Indiana and Ohio. Here to give us an update on exactly where we stand two primaries in is Washington correspondent Joe Mathieu. He is host of Sound on weekdays on Bloomberg Real Yield 5 p.m. Eastern Time. So Joe thanks for being here. I guess Ohio is the one we're really focused on. Yeah we'll focus on Ohio. That was the one that got the most attention here. And in fact had David the most expensive Senate primary in the country so far. And it ended up being a very good night. A win for J.D. Vance. That also means it was a good night for Donald Trump who endorsed Vance pretty late in the Senate primary lifting him from the middle back of the pack to front runner. And that's despite stiff competition from former state treasurer Josh Mandel who was neck and neck with Vance in some polls. And he wrapped himself in all things Trump even without getting an endorsement that he vied for which some thought might confuse voters. Even Donald Trump himself struggled with their names at a rally last weekend. Listen. US we need it know. And J.D. Mandel he said combining their two names that prompted new campaign ads late in the process here but they were for not J.D. Vance one David by almost ten points which is a pretty remarkable turnout for someone who was a former never Trump R and had never run for office before. He will face 10 term Congressman Tim Ryan in the race to replace outgoing Senator Rob Portman. David it was a good night for Trump. Across the board all 22 of his endorsed candidates in Ohio and Indiana won their races. I'm sure he's celebrating today Joe. But as we look at this we have two leading candidates out doing one other. Just set aside who's closer to Trump to replace Rob Portman who is a long way from relevant. What does this say about the general election. Is it possible that the candidate might go too far if I can use the expression right to elicit enough support to win the general. Well it's a great question. You're right. Rob Portman kind of represents the last bastion of old Republican establishment a moderate Republican here who helped to negotiate the infrastructure now law with Democrats and with President Biden. So it's a little bit of a different look here. This pits a conservative populist in J.D. Vance against a moderate Democrat. And Tim Ryan who likes yoga and spent a lot of his time trying to appeal to blue collar voters to peel away former Trump voters who might not have been too happy with the way 2020 worked out. David this is going to be an interesting race to watch and it will be a bellwether for the midterms. Yeah really important race. Thank you so much Joe Matthew once again. Host of Sound on every day of the week at 5:00 p.m. Eastern Time on Bloomberg Radio. Coming up we're gonna go to the White House with Jared Bernstein of the Council of Economic Advisers with a recap of President Biden's remarks on inflation earlier today. And we look forward to the Fed decision. Now just over an hour from right now. This is balance of power on Bloomberg television and on radio. This is a balance of power. Bloomberg Television Radio I'm David Westin the economy is front and center in Washington day with President Biden coming out about 11 o'clock this morning to address questions particularly involving inflation. And now we have the Fed Reserve going to be issuing their decision in just about an hour and 10 minutes right now to bring us up to speed on all of this. Welcome back. Now Dr. Jared Bernstein and the president's Council of Economic Advisers. So Dr. Bernstein thank you so much for being with us. Let's start first with a recap of what President Biden had to say. He addressed several different things I heard including some plans from Rick Scott the senator from Florida. What was the central message for the president today. Well first of all let me just give a shout out to the Army band played behind me making some some beautiful noise if they're not here just to play me in there. They're here for an event. So this morning the president talked about some of our key economic issues obviously whenever he talks about the economy. He elevates the challenge that inflation is posing to household budgets and what we as a White House are doing about that. Now today of all days of course the Federal Reserve has always signaled out as the first and foremost inflationary fighting institution right now. But we're doing a ton whether it's lowering gas prices through the release of an historically aggressive release of barrels of oil from the strategic reserve whether it's strengthening supply chains whether it's helping to lower costs for families whether it's health care premiums or prescription drugs. We're on to that as well. The president also mentioned some historic deficit reduction numbers and that kind of negative fiscal impulse also helps ease inflationary pressures. So Dr. Bernstein I did listen to the president and he laid out a lot of different things. But I'm curious about the fact that some of the things he's talking about would require Congress to get involved. It would require legislation. What about things that are uniquely within the power administration. Let me give you a two or three. One is China tariffs. That's something you would take off right away and help the situation with inflation. What are the Jones Act. As I understand it you can waive that for a period of time. There are various things like that that you could do even the Buy America plan that could bring down inflation. What about those sorts of initiatives. These are all completely fair and germane questions but I am part of a big team that works on all of them and there's no readout on any of those right now. What I can tell you is that at the instruction of the president everything is on the table. He wants to hear about any idea that will help ease inflationary pressures. Now we always have to look at the impacts of our policies. All of the things you mentioned have all kinds of follow on a knock on effects that we have to be aware of as well. But anything that might help ease inflationary pressures on the table. Now you talked about legislation. I do want to point out that one thing that has been legislated is the Bipartisan Infrastructure Act and that is also on the president's mind today particularly as he travels to talk about the future of electric vehicles. I think it was Secretary Granholm in Michigan announcing three billion from the Bipartisan Infrastructure Act in terms of expanding charging capacity and making sure that fleet grows to the effect that we target our electric vehicles as being half of vehicle sales by 2030. Jared let me turn to the Fed from it. And I understand you don't control the Fed but to that point it's widely speculated the Fed is going to be tightening. We're going to hear it today at 2:00 this afternoon. It's going to be hearing it in subsequent meetings as well. What can the White House do to try to maximize the chance of what is called a soft landing that is to say a tightening that doesn't take us into recession. Well first of all I think it's important to note I think it's actually one of the things the White House can do. You might think of this as forward guidance from the president. He has very consistently endorsed the Fed's pivot. Not every person is going to say that. But this president is out there saying the Fed is the primary inflation fighter and they should do what they need to do to do so. Obviously he's put up a slate of top notch candidates nominees. We'd love to see them all confirmed as soon as possible. Then while the Fed really works on the demand side of the economy all the things I ticked off a few minutes ago they're on the supply side. And while we can try to bring supply up to meet demand I think that's what we can do in a complementary sense. Our work at the ports has brought down the dwell time the amount of time CAC can contain the amount of time containers dwell on the ports. I'm sorry some somebody is talking in my ear. That's coming from Bloomberg. Please don't talk in Gerard's ear. He can do several things at once but that's one too many. I got enough going on. So our work at the ports has brought down the dwell time at which containers spend there. Of course moving to 24 and seven are work in the trucking has helped increase the supply of trucking. Goods are now getting to shelf at pretty much the. They were pre pandemic of course our work in energy markets all of them are geared towards aligning supply and demand more fulsomely. From our position. So it's a busy day for you. I know. I really appreciate you taking the time. That's Dr. Jared Bernstein of the President's Council of Economic Advisors. Coming up you want to stay tuned to Bloomberg at 2 o'clock for that Fed decision followed by the news conference. And this is Bloomberg.

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Balance of Power Full Show (05/04/2022)

On Bloomberg’s ‘Balance of Power’ with David Westin, Stephen Stanley, Amherst Pierpont chief economist, on the Fed hikes. Sen. Marsha Blackburn, (R) TN, on regulating the tech sector. Angela Stent, Brookings Institution senior fellow, on Russia's annexation plans in Ukraine. Jared Bernstein, White House Council of Economic Advisers member, on inflationary pressures on the U.S. economy. (Source: Bloomberg)