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00:00We had it. Are we going to learn something from this Kevin McCarthy debacle when it comes to Speaker of the House through to a debt ceiling debacle? Yeah, I think you definitely have a lot to learn, and I would say that Kevin McCarthy needs a strong hand here. I mean, he's Irish. I'd recommend you call Roddy Piper how those two hundred members that he actually has in his back pocket marched down the floor and then see if another 8 team will follow. The debt ceiling is an issue that's going to come up in the late first quarter. I anticipate Treasury Secretary Yellen would send a letter to Congress around that saying that we're about to start using extraordinary measures and that historically you get three to eight months of functionality before you have to actually take the vote in the House. So getting McCarthy in early right now would be very constructive on him getting as much time as possible to sort of build up some goodwill with his caucus. They do not trust him. That's why there are those five to 15 members who are on the fence about supporting him right now, including, as Amory just suggested, the five who are never Kevin's. He needs to break one of those down. And if he does, investors, I think, would be able to take a little bit of solace in the idea that he could potentially find a path to. Yes. On the debt ceiling. Come late July or late September, if he's able to do this quickly, if it takes well into the night or even the second ballot would be the first time in 100 years that we have to go to a second ballot. I'd be extraordinarily difficult and just harmful to McCarthy as speaker. And I think like Speaker Boehner beforehand and Paul Ryan just after that, it's likely to cost him his job eventually, if not immediately. So giving some time to deal with that would be in his best interest. Henrietta, from a market perspective, good morning, happy New Year, it's guy. What is the worst case scenario here? How bad could it get? I was just talking to some clients this morning. We're looking at the floor in terms of expectations. I'm not getting any legislation to pass under the House Republican Conference day before seat margin. It's very, very difficult. We're seeing that you might not be able to get the rules package in the speakership claimed. So passing this super confrontational, contentious legislation is a really heavy lift. But what do you want to see from the investment perspective? Is time give McCarthy as much leeway as he can between today's votes, maybe votes. Well into the night. There's been some speculation that this could take all week. That's a really long time in D.C. Getting into tonight would be damaging in and of itself. The first vote, as you all were talking about earlier, is going to start around noon. Will probably take at least an hour to get that first roll call vote. Everyone needs to actually go to the floor, raise their hand and say who they're going to vote for. My information suggests that every Democrat is going to vote for Kim Jeffries. So McCarthy really is going to need to get all 218 on his own from his own caucus. And it could take very deep in tonight into tonight. But speculation that it could go until later this week is sort of along the lines of that contested convention conversation. We have every presidential cycle. It's fun to talk about, but doesn't usually happen so late tonight is really as far as I'm willing to go right now. I'm hearing about how and when should this be priced into markets. Well, I honestly, I think investors should already have a firm handle that nothing's going to happen this year except for the bare minimum, the must pass stuff. So for market participants now, no matter what goes down with the speaker's vote tonight, I'm expecting a debt ceiling suspension to be agreed to either in late July or September. We do need to get a farm bill. So there will be a fight over food stamps. That's usually a very big indicator for anybody in the commodity space, in the low income space, the consumer retail space, because there are already calls from the Republican conference to slash wick and food subsidy spending. Then there is obviously the need to fund the government into October 1st of 2023. So we'll have that fight later. But those are a couple of months down the road and we have already sort of predict how that's going to play out. It's going to be contentious no matter how tonight's vote goes. Henrietta Donald Trump supports Kevin McCarthy. Why do these members never Kevin's plus the other nine, not support him if Donald Trump does? And what does that say about Donald Trump's authority within the party? You know, you really you bring up a really interesting point here. As you know, anybody can be speaker of the House. So the speculation already is that if Kevin McCarthy has to go into the second or third ballot, they're going to start calling up non members. There are a couple of names out there. Justin Amash with his name in the ring on Twitter this morning. Then you have some folks calling for Newt Gingrich. But it is within the realm of possibility that Donald Trump himself could find a way out of becoming the presidential candidate and become speaker. I mean, so Trump supports Kevin McCarthy right now. And I think that's been a hard fought relationship for McCarthy, a hard battle to wage, especially in the wake of the immediate days after the January 6th insurrection. But there is a long way to go here. And the other members are looking for things like a vote on term limits, which are just not going to be agreed to, things like the Fair Tax and a handful of other policy items that they just do not have the votes for. You're not going to get a balanced budget amendment passed. So these are things that unfortunately push the Republican leadership to negotiate more closely with Democrats than indicator with those five to 15 very conservative Republicans who are effectively holding the party hostage with no chance of victory.

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Veda Partners' Treyz on McCarthy's Future

Henrietta Treyz, Veda Partners Managing Partner and Director of Economic Policy, discussed the future for Republican Congressman Kevin McCarthy as he makes his bid for House Speaker with Alix Steel and Guy Johnson on "Bloomberg Markets: Americas." (Source: Bloomberg)

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