This is Balance of Power live from
Washington DC.
>> From Bloomberg's Washington DC studios
to our TV and radio audiences worldwide.
Welcome to Balance Power. Alongside
Michael Shepard, I'm Tyler Kendall.
>> Tonight, Trump rapid ratchets up the
pressure on the Federal Reserve. The
strong words from the president today
targeting another member of the Fed,
this time Fed Governor Lisa Cook. What
the president is alleging on the eve of
the Jackson Hole Forum and how
Washington is reacting up ahead.
>> Plus, following another Russian drone
barrage, NATO's defense chiefs meet on
the next steps in trying to guarantee
security for Ukraine. We'll discuss what
a potential outcome might look like with
former defense secretary Leon Petta.
Also tonight, how California is looking
to match Texas's redistricting efforts
when California Attorney General Robont
joins us.
>> And one month after the president signed
a series of artificial intelligence
executive orders, are we headed for a
data center bonanza? We're in Northern
Virginia's data center alley for a look
at how the issue is playing out on the
ground. But we begin with the latest.
But we begin with the latest from the
Trump administration. The president
ramping up his attacks on the Federal
Reserve. This time aiming his eyeire at
Fed Governor Lisa Cook calling for her
resignation after Trump appointee FHFA
Director Bill Py urged an investigation
into Cook over a pair of mortgages.
Trump taking to Truth Social to post
that Cook, who was appointed by Joe
Biden, quote, must resign now end quote
citing Py's allegations. It all comes as
the Jackson Hole Economic Policy
Symposium kicks off with Fed Chair
Jerome Powell slated to speak two days
from now. And we've got the news covered
for you from across the country.
Bloomberg's Kate Sullivan from the White
House, Michael McKe in Jackson Hole.
Former Deputy Treasury Secretary Wally
Amo here with us in Washington. But we
begin tonight with Kate Sullivan from
the White House North Lawn. Kate, thanks
for being here. Can you just break down
for us what we actually know about these
allegations that President Trump is now
pushing when it comes to Fed Governor
Lisa Cook?
>> Absolutely. So Trump is once again
trying to exert power and control over
the Fed. So today, as you mentioned, he
called on Fed Governor Lisa Cook to
resign. He actually in the truth social
posts uh where he called on her to
resign, he actually shared a Bloomberg
article written by my colleague Josh
Windgrove uh that was talking about what
Bill Py's allegations. So PY, the
federal housing finance uh agency
director is urging Pam Bondi to
investigate Cook over a pair of
mortgages that that she took out. So
Py's allegations are PY suggesting that
there could be criminal activity here
and is claiming that she falsified bank
documents and property records to get a
more favorable loan. So Trump, you know,
is pointing to these allegations as he's
trying to pressure yet another top Fed
official to resign.
All right, Bloomberg's Kate Sullivan, we
thank you as always for your reporting.
And now for a closer look into what
President Trump's recent Fed calls mean
for the central bank, we turn to
Bloomberg's Michael McKe. He joins us
live in Jackson Hole ahead of tomorrow's
economic policy symposium kicking off.
Uh Mike, let's just start with the
pressure campaign that we have seen from
this White House. We know that there is
a very high legal bar here if there is
any consideration to remove a Fed
governor. Tell us uh how this is likely
to play out.
>> Well, the Federal Reserve Act says that
Fed governors are appointed for 14-year
terms unless removed by the president
for cause. And it's that for cause
clause that is at issue here. The
Supreme Court said in a decision earlier
this year that the way the Fed is set
up, the Fed president can't just fire
somebody. They do have to have a reason.
Now, Bill Py is alleging that there is a
reason that it is fraud on her mortgage
applications and that would be cause.
Now whether Lisa Cook is on the board or
not isn't really going to help the
president in his desire to get lower
interest rates because she votes with
the majority all the time and she votes
with the chair and at this point she is
considered someone who is not going to
break ranks and she's if the majority
votes for a rate cut she would go along.
What may be happening here is that the
president is looking to get her off the
board so he can appoint a fourth member
to the uh Fed uh governor's board and
then he would have some sort of control
if he could get all four of the members
he's appointed in uh the Fed and try to
push interest rates lower and maybe do
some other policy changes at the central
bank.
>> Bloomberg's Michael McKe. Thank you. Now
for a look at the economic impact of
President Trump's call for Fed Governor
Lisa Cook to resign is Wally Edo. He is
a former US Deputy Treasury Secretary in
the Biden administration who joins us
live here in our Washington bureau.
Wally, thank you for being with us
tonight. I want to start with you from
your perspective as a former Treasury
official. What does this pressure
campaign look like when it comes to the
US position uh of global trust uh across
the world economy?
>> I think it's important for us not to
look at this as an attack on one
individual Fed governor, but an attack
on an institution and the independence
of the Federal Reserve has been at its
core central to the confidence that
investors around the world have in the
US economy. You know, in my old job, one
of the things I did was be with
investors in the United States, but
people around the world who wanted to
deploy capital here in the United
States. And one of the reasons they felt
confident doing that was because of the
rule of law and because of the strength
of our institutions. One of the
strongest institutions has been the
Federal Reserve. And maintaining that
independence is key to our economic
growth. So the calls for various Fed
governors to resign who are both
Democrats and Republicans but frankly
all of whom have focused on the data
rather than politics undermines one of
the key strengths of the economy.
>> Well a quick follow on this notion of
trust. What does this mean for instance
in the world's trust in the dollar uh
the global reserve currency?
>> The reality is that one of the things
the Fed is charged with is making is
monetary policy decisions. Ultimately,
those decisions that they make, those
calls that they make being independent
of political interference is one of the
reasons that countries around the world
are willing to lend money to the United
States, knowing that the Fed is going to
make a decision based on its dual
mandate, not based on politics,
regardless of if the president is a
Democrat or a Republican. Having that
confidence in the Fed is important to
not Democrats and Republicans, but to
Americans in terms of our ability to
make sure that we have an economy that
continues to grow. Well, of course, at
the moment, the Fed's monetary policy
and this wait and see mode that we've
seen from the central bank does have to
do with the president's tariff plans.
And you had a really interesting piece
in foreign affairs. And I wanted to pull
a quote from it where you write that
quote, "Trump deserves some credit for
forcing the world to grapple with the
failures of the existing global trade
order. Decades of de-industrialization
have harmed large swats of the American
workforce and undermined US national
security by creating supply chain
dependencies on potential adversaries.
So when we are looking holistically at
the White House's tariff plans, these
trade policies, what in your view is
working versus what isn't so much? What
the president has done is focused
attention on the issue, but ultimately
what we need is a trade strategy that
lowers costs for the American people,
creates more manufacturing jobs for our
workers and our companies, but allows
Americans to be able to export things to
the rest of the world. What is working
is the president has drawn attention to
the issue. The challenge, of course, is
that the tariff strategy that he's put
in place is in places increasing costs
on Americans. The best example of this
is you look at the F-150 truck which is
made here in the United States. The
F-150 when you look at the tariff taxes
on that vehicle is going to cost more
than for example a Toyota an F150 made
here in the United States is going to
cost more for tariffs than a Toyota
vehicle made in Japan shipped to the
United States. That can't be an outcome
that anyone wants.
>> And part of the administration's push
has been this idea of national security.
We've seen the section 232 tariffs
enacted on it and you talk about this
emphasis on national security carveouts.
Talk to us about the balance here that
the administration would need to thread
when you hear perhaps the current
Treasury Secretary Scott Besson talk
about the difference uh between
decoupling versus de-risisking uh when
we are looking at those countries where
we have those national security concerns
like China. I think one of the most
important things about the national
security issues that we deal with is
that they be done in a bipartisan way.
That's what we did with the Chips and
Science Act, which is allowing America
to build chips in a cutting edge way.
But we have to separate out what is
national security versus what is
economics. I've seen some say that
building textiles and building shoes
here in the United States is a key to
national security. That can't be true.
We need to focus on true national
security concerns, be they chips or be
they things like critical minerals that
are key to our defense industrial base
because doing so will allow us to invest
in these things, protect the United
States, but also allow American
companies and firms to compete with the
rest of the world. We're in the middle
of earning season and when you hear
these CEOs talk, they're making very
clear that tariffs are costing them
money and that they're planning to pass
on those costs to their consumers. That
isn't in anyone's interest. We need a
strategy that allows American companies
to grow, workers to earn money, and for
us to sell American goods around the
world.
>> Wally, you brought up the Chips and
Science Act. We're seeing, and Bloomberg
has broken the news, that the
administration is weighing whether to
use some of that chips act money to take
equity and equity stake in Intel and
perhaps even other companies. Now, is
this a good use or even proper use of
that money? And is this an effective
strategy to have the government taking
uh essentially an ownership stake in
companies like that?
>> My view is that I uh I believe in the
private sector and its ability to
innovate and government should largely
stay out of running private companies
unless it's absolutely necessary. uh
based on what we've seen in terms of
private investments in Intel, I think
the key is to make sure that what
government does, especially with the
chips and science money, is that we
create incentives for these companies
that allow them to create good paying
jobs here in the United States and
unlock the ability of the private sector
to deliver for the American people. When
the Chips and Science Act was passed, as
I mentioned, it was done on a bipartisan
basis because we knew that in addition
to national security concerns, we wanted
to make sure we had the ability to
create good paying jobs here in the
United States. The goal was not for the
United States government to be the
driver of chip creation. We wanted to
make sure that American companies not
only built chips for America, but to my
point that the chips that were built
here, we could ship to the rest of the
world so American jobs could be created
shipping things across the world.
So, uh, just moving forward here, when
you do see the administration take
perhaps more hands-on industrial policy,
we saw this with the Nepon deal, for
example, and the so-called golden share,
how do you see this evolving? This
already appears to be the path that at
least this administration's already on.
>> And I think that the reality was that in
the Biden administration, there was a
great deal done when it came to
industrial policy as well. The question
really is around are you creating
incentives and then allowing the private
sector to take it from there or is the
government taking ownership stake in
actually controlling companies in the
economy. My view is that we should let
the private sector do what it does well
which is innovate, create jobs and move
forward. But in some cases it's
important for the United States
government to create incentives. That's
what we've done on chips and science.
That's what we need to do in select
industries that are key to our national
security and to building out our
economy. The challenge of course is that
tariffs instead of creating those
opportunities to create jobs. What we're
seeing today is those tariffs are
increasing the cost for consumers and
making it harder for our companies to
operate.
>> How soon are we going to start seeing
some of those costs really play their
way through the economy from businesses
and then to consumers?
>> And I think people have been surprised
that you haven't seen more of that
already. But when you listen to these
earning calls, these CEOs are making
clear that you are they're starting to
see those costs increase and they're
going to pass them on to consumers. I
think the challenge today is that as you
look at the labor market and you're
starting to see apparel cost and as
parents get ready to go shopping for
back to school, they're going to see
potentially higher cost for clothing.
And these companies are seeing higher
cost for inputs. And what that naturally
means is that American companies are
going to be less competitive visav
companies in China or companies in the
rest of the world, which isn't anyone's
goal. That's why we think that it's
important for us to work together with
our allies and partners to lower tariffs
and then to jointly confront China in a
way that allows us to create jobs, to
lower cost, and also to create
opportunities for American companies to
sell things not just here in the United
States, but around the world.
>> All right, fascinating, fascinating
conversation. Wally Adio, former US
Deputy Treasury Secretary under the
Biden administration. Thank you so much
for joining us here on Bloomberg. And
now, as President Trump calls for Fed
Governor Lisa Cook to resign, central
bank leaders are gathering in Jackson
Hole, Wyoming to await Jerome Powell's
speech, his final speech as Fed chair at
the economic policy symposium on Friday.
Here are some analysts this morning on
Bloomberg surveillance previewing the
remarks we could expect later this week.
There is lingering concerns about what's
going to happen on Friday with Pal.
There's a downside risk to J. Pal's
comments. It's going to be something
that might ding home builders.
>> Very much unlike last year when Powell
made it clear that that that a cut was
coming in in September 2024, he's going
to keep his options open.
>> I think what we're likely to see is
hearing from all of the other central
bankers uh pushing back and really
defending the Fed about the importance
of independence.
Now for more insight into this week's
symposium, we turn now to Danielle D.
Martino Booth, CEO and chief strategist
at QI Research, who joins us live from
world headquarters in New York.
Danielle, thanks so much for being here,
of course, as we head into Friday's
speech with Jerome Powell, perhaps uh
overshadowing is these new allegations
from President Trump when it comes to
Fed Governor Lisa Cook. just your
initial reaction on how investors should
be weighing this rhetoric from the
administration as we got the minutes
today and then Powell's speech on
Friday. Well, you know, I I think we're
in an interesting time here because the
administration probably has a greater
appreciation uh for the history of
Mariner Marinel Eckles, who in 1948 when
Truman booted him out as the chair of
the Fed decided to finish out his
14-year term as a Fed governor. And we
we know that Jay Powell can stay through
the end of January 2028. And as such,
it's clear that the administration feels
like it needs to make room to put
somebody else on the committee that's
going to speak in its voice. And I think
that that is a lot of what's driving
this. Uh the Bloomberg terminal had a
great story today covering the
Philadelphia Fed uh and some research
that it conducted and released in 2023
that shows that these types of this this
type of mortgage fraud which is being
allegated that this is in 2 to 3% um of
the mortgages that have existed after
the housing bust uh of the late 2000s.
So this it's it's not crystal clear that
that that the administration will
prevail. Um, but it's clear that Fed
it's clear that Trump really wants to
change the complexion of the the
leadership at the Fed one way or
another.
>> Danielle, what do you expect from Chair
Jay Powell during his remarks on Friday?
When it comes to defending Fed
independence, this in a way will be his
validtory remarks at Jackson Hole as Fed
chair. This would be an opportunity
perhaps for him to lay down more of a
marker. It it certainly would and uh you
know indemnifying his legacy is is
clearly going to be front and center for
him. He will lean on the importance of
of Fed independence and as your prior
guest said that's going to be extremely
important for everybody in the audience
as well. He will have a very welcoming
audience that also wants to safeguard
the independence of the Fed. A lot I
think also remains on tomorrow morning's
data though. We're going to get the
survey week data out for August payrolls
in the initial jobless claims data
that's released tomorrow. We hope that
that is as as benign as as it's been
recently. But Powell, given the theme of
Jackson Hole, centers on the labor
market, Powell certainly doesn't need
any more ammunition against him in the
hard data.
>> Well, building off of when we're talking
about the labor market, we did of course
get the FOMC minutes today. the majority
seeing inflation risks outweighing
employment risks. But they also said
perhaps not surprisingly that several
committee members expected companies
will pass on those tariffs to consumers.
And I'm wondering which sectors you're
watching, but also I wanted to point out
another data point. How does perhaps
slower income growth limit the extent to
which firms can pass on those costs to
consumers?
>> So I think you bring up a very valid
point. It's not that American companies
don't want to pass along higher input
costs. We're seeing the margin squeeze
play out in real time, but to your
point, is their purchasing power? The
Atlanta Fed wage growth tracker is
showing a sustained decline in wage
gains all the way back to where we were
prior to the pandemic hitting. And
you've got multiple um uh record numbers
of Americans working multiple jobs,
plenty of people working part-time when
they would rather have full-time
positions. There were 440,000 full-time
positions lost in the month of July
alone. That purchasing power is
absolutely key. And I think that that's
one of the reasons we're seeing food
inflation reignite in areas where you
absolutely have no choice but to pass
along those higher input costs. Will it
remains to be seen to me at least when
we're going to see this tariff pass
through in more discretionary
consumption areas?
>> Danielle D. Martino Booth, CEO and chief
strategist at QI Research. Thank you.
Turning overseas now where Ukraine was
hit overnight by a barrage of Russian
drones, igniting a fire at an energy
facility in the Odessa region that had
emergency workers racing to the scene. A
drone from that attack crashing into
Poland. Poland, an EU and NATO member,
claiming the crash was a provocation
from Russia. That coming the same day
that NATO military chiefs met remotely
as we await more details for a potential
trilateral meeting between Presidents
Trump, Putin, and Zalinski. For more, we
want to bring in Leon Petta, former US
Secretary of Defense and former director
of the CIA. Thank you for joining us,
Director Petta. We want to start tonight
with this whole question of security
guarantees, which has been the main and
driving topic of Ukraine this week since
the meeting on Monday at the White House
between President Trump and European
leaders. To your view, what do security
guarantees need to look like to
essentially prevent a repeat of what
happened in 1994 with the Budapest
memorandum that really left Ukraine over
the long run uh short of an adequate
defense against a potential Russian
invasion?
Well, the the primary point that uh
needs to be made with these security
asurances
is that uh the United States uh and our
European allies uh particularly those
that are part of NATO
uh will in fact make clear that they
will come to the assistance of Ukraine
uh if Russia should attack in the
future. And so Europe has indicated that
they're prepared to move in that
direction. I think the president
indicated that he was prepared to
support security clearances. Even though
he was he pulled back on boots on the
ground, he did say that uh they would
look seriously at providing air support
uh to help in those security asurances.
The one the one problem right now is
that Russia is saying that somehow it
needs a veto power over what those
asurances look like. Uh and since the
primary purpose of those security
asurances is to be able to protect
Ukraine from a Russian invasion, I'm not
so sure uh that's something that's going
to happen.
>> Well, and Mr. Secretary, we did have
Bloomberg News reporting today actually
that European leaders are discussing a
guarantee for Ukraine that would commit
allies to decide within 24 hours whether
to provide military support to the
country if it was attacked again by
Russia. Much to your point, but just to
drill down a little further on this, I'm
wondering what is realistic? What should
we expect from the US when it comes to
their side of contributing to these
guarantees? For example, we hear a lot
about air cover and that seems to be an
emerging themes in these uh in these
discussions.
>> Well, I I think to be fair, uh security
assurances are not going to work uh
unless the United States is part of that
agreement.
uh we bring a lot to the table uh
obviously from a military point of view
uh and from the ability to try to
support any military effort uh that
might have to occur on the ground. So
it's very important that the United
States be part of those security
assurances. It's very important that
Europe agree that u that they will come
together uh and support uh Ukraine in
that event. I think 24 hours uh is uh
you know probably makes some sense, but
it really has to look like
implementation of a title five kind of
approach that once Russia decides to
invade Ukraine again that all of the
nations of NATO will again respond as
they have now.
>> Director Petta, last night on Balance of
Power, we spoke with William Taylor,
former US ambassador to Ukraine. Here's
what he had to say about the prospect of
Vladimir Putin really participating in a
bilateral, even trilateral meeting with
Voteir Zalinski.
>> Putin doesn't want to end this war.
Putin wants to drag it out. He wants to
keep pounding the Ukrainians until they
give up. They're never going to give up,
but he's going to keep pounding until
he's forced to come to the table for a
ceasefire. So, no, I don't think he's
eager. I don't think he's has any
intentions of coming to a bilateral
meeting. He may say something on the
phone to President Trump um to tell
President Trump that he's willing to do
it, but they're not serious about these
negotiations and and Putin is not
either. Putin wants all of Ukraine and
he wants to pound them until he gets
that.
>> Director Petta, we have yet to hear from
Moscow about whether they will or will
not agree to a meeting between Vimir
Zalinsky and Vladimir Putin. How much
time should Donald Trump give the
Russian leader to agree to a sitdown?
And what happens next if Putin bulks or
refuses?
>> Well, again, there is a a fundamental
principle here that Bill Taylor referred
to, which is that you can't trust uh
Vladimir Putin uh in these issues. You
just can't. Uh I think it's 88% of the
American people in a recent poll said do
not trust Vladimir Putin. That's pretty
good judgment on the part of the
American people. Uh that's the reality
is that um it's very difficult to
really try to find a way to get Putin to
negotiate seriously right now. I think
he's largely playing for time. Uh he's
continuing the war. He's refused to
agree to any kind of ceasefire. Uh he
even talked about the need to eliminate
the root causes of the war. Well, the
root cause of the war was that Russia
invaded Ukraine uh on the basis that it
is a part of Russia and not a sovereign
democracy on its own. So he basically is
saying he wants to win. I think it's
very important for President Trump to
make very clear to Putin that he wants
him to participate uh in this trilateral
or meeting with with Zalinski. Uh, and
if it doesn't happen, I think the
president really does have to uh he he's
got to he's got to come back and hold
tough with Putin by implementing
sanctions, by providing weapons, and by
making very clear to Vladimir Putin that
he cannot win this war. That is going to
be very important to our ability to
negotiate.
>> Leon Petta, former US Secretary of
Defense and former director of the CIA.
We thank you so much for joining us on
Bloomberg. And coming up, while
California Democrats have advanced their
redistricting plan, the Republican
colleagues are gearing up for a fight to
that proposal. Stick with us. This is
Bloomberg.
[Music]
This is Balance Power on Bloomberg TV
and radio. Alongside Michael Shepard,
I'm Tyler Kendall. The artificial
intelligence race has been the driver
behind tech stock's recent surge to
record highs. And demand for the data
centers to support AI is so strong that
Bloomberg is reporting that Morgan
Stanley turned to private credit
investors for $29 billion in financing
for Meta's massive servers.
>> But it's not just money that data
centers are consuming with a ferocious
appetite. Tyler, these giant buildings
are also gulping up resources like power
and land, too, making for a tense
situation in communities nationwide. For
more, we're taking you to Northern
Virginia, a data center hotbed that
Bloomberg reporter Josh Saul visited
earlier this year as part of a Bloomberg
Originals report. Here is a part of that
piece.
>> So, over here is our called our cold
aisle containment system. This is where
all the cabinets are landed and lined
up.
>> Why do you need a cold aisle? Why Why
does it got to be cold? We have to make
sure that they stay cold while the
servers are all on inside of each rack.
We have to make sure all the output that
they're doing is staying as cold as
possible so they run efficiently.
>> How much electricity would this whole
room consume?
>> Once this room is at full capacity, it
can go up to 4 megawatts of power.
>> Okay. Okay. 4 megawatt. Help me out with
that. Like how many homes could that
power?
>> Yep. So, if we break it down, 1 megawatt
could power about 3 to 4,000 homes. So,
this could power up to 12,000 homes.
>> Wow.
So, what are we going to see out here?
>> So, right now we're on the roof of this
data center. Uh, you can see it's filled
with what we need to cool down all of
those crack units or computer room air
conditioners we saw inside of the data
hall. So, these are called ACUs or air
conditioned compressor.
>> They're kind of noisy.
>> Uh, yes, they're very noisy. That's why
we kind of have the walls kind of boxes
in the sound
>> cuz we keep the resonance in mind. So,
we try and make sure the sound is as
buffered in as possible. They would be
louder during the summer time.
>> I was going to say it's kind of cold. We
should have brought our jackets. Why Why
are they even running right now?
>> So, they they're running on what's
called a free cooling mode, which means
it's using the outside air instead of
>> just big fans. They're big fans.
>> Big fans.
>> Why is it so important that you have
power continually? If you didn't have
power and the data center just shut down
for a couple days, why is that a big
deal?
>> So, in data centers, we have healthcare,
we have transportation, we have
government. Imagine a government
shutdown. How chaotic that is. Something
like that happens in a data center.
Nobody can send an email. Nobody can
work. Everyone loves to have the day
off, but it has such a huge impact on
the neighborhood, the city, the world.
>> I was elected in November 2023. I wanted
to run because I disagreed with the
direction the county was going in,
particularly with land use and with the
placement of data centers. The good
thing, you know, data centers do
generate revenue. And last year when we
raised the CMP tax rate, we generated
more money, you know, for the county and
for our schools, but everything in
moderation. For us on the board of
county supervisors, I'm saying we have
to be the traffic hop. We cannot approve
a data center any and everywhere. These
are industrial warehouses. They
shouldn't be next to homes, schools,
national parks. They should be in areas
that have enough power to run these
facilities. The land we give to data
centers is land that other businesses
aren't able to to purchase. It's also
land that, you know, we're not able to
use for housing or retail or any other
development.
Virginia is a beautiful Commonwealth.
It's very scenic. We have so much
history here. I'm afraid that that's
going to be lost if we're just giving in
to data cent's demands.
When you talk with legislators today, be
clear that we're not against data
centers. We want them to be better.
>> Our morning started really early in a
really cold, really dark parking lot
where we met a group of data center
opponents and we all got on a bus to
travel here to Richmond where they are
lobbying their lawmakers for what they
would call responsible data center
development. In transportation, there
are speed limits. There are safety
standards. There are noise limits. And
we're here to lobby about an industry in
Virginia that is overwhelming us and
there are no laws and standards.
>> We traveled with one woman, Elena
Schllober, who's sort of at the center
of this fight and she's been going
toe-to-toe with the biggest data center
developers for about the past decade.
That's really something I I want to
message the legislators is the history
books are being written right now. And
the question is, you know, what do you
want the history books to say about you?
The first year we went, nobody knew
about data centers. What's a data
center? The next year we went, suddenly
people are starting to go, oh, there's
maybe something about data centers. Oh,
so the Legislative Review Commission
report finally came out and my favorite
word was unconstrained.
Unconstrained data center development is
what is risking our reliable energy, our
clean air and clean water, the health
and well-being of the state of Virginia.
>> You can head to Bloomberg Originals
YouTube page to watch the rest of that
report.
>> And we do want to bring you some
breaking news coming in just moments
ago. Federal Reserve Governor Lisa Cook
issuing a statement following President
Trump's allegations of mortgage fraud
and calling for her resignation. Cook
saying in a statement, quote, "I have no
intention of being bullied to step down.
I do intend to take any questions about
my financial history seriously as a
member of the Federal Reserve and so I
am gathering the accurate information to
answer any legitimate questions and
provide the facts. We will be following
this story all day here on Bloomberg and
we'll come up with more news when
Michael McKe joins us from Jackson Hole.
>> For now, we're going back to our
reporting on data centers. And joining
us now for more is the reporter featured
in that piece, Bloomberg's Josh Saul,
who joins us live from world
headquarters in New York. Josh, it's
been almost a month since the president
announced his AI action plan and
executive orders loosening restrictions
on data centers. What have we seen
change and what is the vibe out there in
the places where these data centers are
going to be built?
>> Data center developers were already
chomping at the bit to build huge
numbers of these new facilities and
utilities are extremely excited for
these new customers. Um I would say that
the act Trump's action plan and these
executive orders are a tailwind that's
uh kind of heating up an already super
hot super hot part of the economy.
And Josh, can you give us just a little
bit more insight here into what
President Trump's AI action plan
actually does in principle? What did the
administration outline last month when
they unveiled this?
>> Trump's main idea is that the US needs
to be the global leader in artificial
intelligence. Um the grid is no longer
sort of a boring concern of utilities.
Uh it's a top national priority. Um so
uh his action plan and the executive
orders uh they aim to loosen
restrictions um on AI and data center
development uh and they aim to kind of
supercharge energy dominance and the
energy supply so that there's enough
electricity uh moving around to power
all of these data centers because that
that's crucial uh without electricity
data centers really can't do anything.
All right, fascinating stuff.
Bloomberg's just Saul, thank you so much
for your reporting. And for more, we
turn now to Ragu Martin, CEO of Data
Bank, the holder of over 60 data centers
nationwide. He joins us now from world
headquarters in New York. Uh Mr. Martin,
thanks so much for joining and I want to
pick up on something that Josh was just
talking about when it comes to just how
much energy consumption these data
centers use. In your view, can the US
energy grid as it stands right now uh
support all of this demand that we're
seeing from data centers?
>> Hi, uh great to be here. So, uh yeah, as
Josh just said, there's been just a
tremendous amount of demand for data
centers across the country. uh you do
see some markets that have been
struggling to meet that demand but but
ultimately what you're seeing happen is
just like any you know economic system
is developers are going to places where
there is power where there is land where
there is an ability to build them. So
you're starting to see data center
developments happening in places like
North Dakota and in western Texas and in
Wyoming which are places that
traditionally data centers didn't
develop. So it's going to be a tight uh
you know supply and demand balance but
on balance you know the energy uh the
sector is going to continue to evolve
and people are going to find a way to
bring these data centers to market.
>> I do want to drill down a little bit
more on this idea of energy consumptions
with data centers because I was actually
at the Pennsylvania Energy and
Innovation Summit last month as you
likely know was where the Trump
administration unveiled a lot of its
plans to keep the US competitive when it
comes to artificial intelligence. But as
the name suggests, energy was really the
main component here. And there was this
conversation about how AI energy demand
is impacting consumers. And I actually
had the chance to ask the coreweave CEO
his thoughts on this and whether or not
this is proving to be a burden to
consumers. And here's what he said.
I think that you know uh policy uh
makers raising that issue to ensure that
the the the data centers uh the
consumers of compute are paying their
fair share is a completely reasonable
approach to take to this. It is
necessary but it's also necessary to
understand that this is a absolutely
critical infrastructure bill that's
going on and will continue to go on for
many many years.
I'd love to get your view on this. Is
that uh the realistic interpretation
here? How much concern do you have that
the consumption from these AI data
centers could pose a burden on consumers
when it comes to energy prices?
>> Yeah. Well, look, this is a complicated
topic. There's a lot to unpack here,
right? The reality is, as people know,
over the last two decades, electric
demand in the US has been totally flat.
And what that's resulted in is
underinvestment in the electric grid.
And then over the last five years,
you've had a number of trends.
Obviously, the trend towards renewable
energy, kind of the uh the chips act
driving a lot of uh semiconductor
manufacturing here in the US. Obviously,
Trump's policies are looking to bring
back manufacturing to the US. And now
you have AI data centers and regular
data centers also driving demand. So,
it's this classic case of, you know,
demand and supply coming out of out of
balance at this point. But ultimately
all these users of of electricity I mean
when we connect to the grid we're buying
off a utility tariff right that tariff
by definition is made so that the
utility can make you know we're cover
their cost and earn a return on that. So
no one's getting a free ride here. We
are paying for the power that we're
consuming and the utilities rightly so
are making sure that you know they don't
build too much that then doesn't get
used in the future. But ultimately, I
think this is all going to solve itself
just through normal market uh factors.
And you're already seeing it happen.
>> Well, well, we're seeing this enthusiasm
by the administration and the tech
industry to build baby build on AI and
on data centers. And yet, uh the report
we just saw suggests that there might be
a little bit of fear and loathing out
there in the communities where some of
these data centers ultimately may be
located. What is the responsibility that
the industry and companies like you have
to be good neighbors and address issues
like noise and and other questions?
>> Yeah, absolutely. And we and we and
look, I I think every responsible data
center developer out there and let's not
forget the largest data center
developers in the US are kind of the
hyperscalers, right? The Amazon's, the
Microsofts, the Google's, you know, I
would argue that as a as a industry,
we've been good neighbors. We try to
develop, you know, very efficient data
centers because obviously efficiency is
a way we can drive down costs and
remember that data center development
only occurs with local zoning, right? So
we don't we can't just build a data
center anywhere. We have to go to places
that the local community has dictated
that from a zoning perspective, you can
build a data center. So, you do have
some markets where historically data
centers have developed kind of with less
um zoning controls like in the Northern
Virginia area that the video pointed
out, but for the most part, we're
developing in industrial areas. We're
developing kind of outside of urban
areas. And again, the the the town is
telling us, hey, we can site a data
center. And I'll give you a perfect
example. About 50 miles south of Ashurn,
there's a a community called Co Pepper.
And what Co Pepper decided to do is,
hey, we we do want data centers here,
but we want to control how they get
developed. So they created a couple
thousand acre Coal Pepper technology
zone. And in that area, data center
developers can build data centers
because it's a place where electricity
can be brought in in a cost-effective
manner. And you can still preserve all
the other uses for different types of
development outside of that economic
zone. So I look at examples like that as
the future of how the community and the
data center sector can you know
collaborate together to bring this
commodity you know to to market. Let's
not forget that what happens in a data
center is really our entire digital life
right everyone wants to remote you know
work remotely everyone wants to send
their emails wants to access through
their medical health records or every
digital interaction originates and
terminates in a data center. So the data
centers are are supporting our economy.
They're supporting our way of life. We
need to find a way to harmoniously, you
know, make it work and and live
together.
>> Ral Martine Neck, CEO of Datab Bank.
Thank you. Now, we want to turn back to
that breaking news from FG Governor Lisa
Cook. Cook pulling out a statement just
moments ago saying that she is not
stepping down despite the president's
call for her resignation. Bloomberg's
Mike McKe is back with us from Jackson
Hole in Wyoming. Mike, what are we
seeing in this statement? she is
standing her ground and are we getting
any sense that the Fed is uh closing
ranks around her and are we expecting to
see her at uh the symposium in Jackson
Hole later this week?
>> Well, she was expected here. We don't
know what her plans are or if they have
changed since this morning, but she did
put out a statement just a short time
ago saying that she would not be bullied
into resigning of stepping down from my
position because of some questions
raised in a tweet. She says she intends
to take questions about my financial
history seriously as a member of the
Federal Reserve. So, I am gathering the
accurate information to answer any
legitimate questions and provide the
facts. So obviously more to come on this
from Lisa Cook and from the Fed. As far
as whether the Fed is closing ranks
around her, we would assume that to a
certain extent they would, but Fed
officials aren't going to have the
answers either. So I would expect that
most of her colleagues on the Fed will
say we can't comment at this time.
>> Yeah. Well, Mike, can you give us just a
little bit more context here into
whether or not this really is clouding
this meeting that's happening uh thrown
by the Kansas City Fed because there's a
lot of different things on the horizon
here ahead of Jerome Powell's speech on
Friday, not to mention the potential for
a September rate cut.
>> Yeah, there are three things sort of on
the unofficial and official agendas here
that are all going to be overlapping and
take up a lot of time here. One, of
course, is JPAL's speech on Friday and
whether he gives the markets any hints
of a September rate cut. The other is
what's happening with Lisa Cook. I've
seen several senior Fed officials who
have arrived here in the last couple of
hours and all we talked about was the
Lisa Cook issue at this moment. And then
what is it that the president is trying
to do to the Fed? Is he trying to take
over? Is he trying to get Lisa Cook out
so he can appoint somebody else? uh
that's going to be an issue for uh
people's discussion as well as what's
the Fed going to do in September and
will the president's efforts have any
kind of effect on what the Fed is
thinking when they get to that meeting.
>> Mike, you've been to a number of these
uh meetings there in Jackson Hole over
the years and we're also expecting
central bankers from around the world.
Are they preparing to mount a global
defense of sorts of the Fed against this
uh pressure against its independence by
Donald Trump?
>> I think of sorts is the right way to put
it. Mike, the foreign central bankers
who were at the CRA meeting, the ECB's
annual meeting in Portugal in June did
give fairly robust uh defenses of uh
central bank independence, saying that
central banks that were free to make
their own monetary policy as best they
saw fit would uh have better results for
their economies. And we expect some of
them to say similar things here, but
they probably won't put it in the
context of J. pal or Lisa Cook just
central banks in general.
>> Bloomberg's Michael McKe from Jackson
Hole. Thank you. Turning now to Texas.
This is the scene playing out right now
on the floor of the House Chamber with
state Republicans there on the verge of
passing a key hurdle in adopting new
congressional maps in the state that
could give the GOP up to five seats more
away from Democrats. The floor debate
today happening as state Democrats
remain under supervision of police to
stay in the state as the legislature
proceeds with their special session. A
move that lawmakers protested against
last night. Now, Democrats in blue
states are vowing payback for the Texas
map with California lawmakers now poised
to approve their own retaliatory
gerrymandered map for voters to consider
in November. Joining us now for more
here on Balance of Power on Bloomberg TV
and Radio is Rob Bont, Attorney General
of California.
And vice, we uh Attorney General Bont,
we have to ask, Republicans in
California are preparing to mount a
legal challenge of their own against
whatever Gavin Newsome and Democrats in
the state may try to do when it comes to
gerrymandering there and redistricting
there. How are you preparing to fend off
that challenge and ensure that whatever
new maps are proposed and perhaps passed
by the legislature actually hold up?
>> Well, I think it's really important.
Thanks. Thanks for having me first of
all. And I think it's really important
to remember that Trump started this. He
called Governor Abbott and asked for
five more seats. Just like in 2020
following the election that he lost, he
called the Secretary of State of Georgia
asking for 11,000 more votes. and
Governor Abbott started this. Texas
started this. Republicans started this
and California through Governor Nuome
and the legislature and their actions
are trying to end this, trying to block
this, trying to stop this abuse of power
and this rigging of the system uh to try
to defend against what is inevitable
that Democrats will win the midterm
elections and retake the House. And the
uh plan uh that Governor Nome has
articulated and the legislature uh seems
to be supportive of, we'll see how they
vote this week, is to present maps to
the people, let them vote. The the
ultimate form of direct democracy. And
the new maps would only take effect if
triggered by Texas or another red state
uh improperly uh abusively trying to uh
rig the system uh and add more more
seats and we would go back to an
independent redistricing redistricting
commission in 2030 after the next census
count uh according to everything the
governor has said and the legislature uh
seems to be supporting. So, it it it's
it's a principled uh uh lawful response
to an abuse of power by Texas and by
Trump and by Republicans and by Abbott
and by red states. And my role uh would
be if there's a lawsuit and there's
already been uh at least one lawsuit
filed uh earlier this week, we will
defend the the state of California uh uh
to the extent an an agency or department
asks for our representation and our job
is to defend the laws of the state of
California in court uh which we will do
dutifully and professionally and
ethically.
>> So Mr. Attorney General, it sounds like
you feel confident that there is a legal
argument here when it comes to
California, but I'm wondering if you
have any level of concern about this
potentially backfiring considering voter
sentiment in California around
incumbents. How are you factoring that
into these calls when it comes to
potentially remaking the congressional
map?
>> I think there is a strong desire to stop
the abusive uh conduct of Trump, of
Republicans. It is clearly transparently
a attempt to rig the system. Uh if their
policies were so popular, and clearly
polling shows they're not, uh they
wouldn't have to find more districts.
They could just run on their record, run
on their policies. They can't. So
they're trying to choose their voters
instead of having the voters choose them
and choose the Constitution and the
majority of the House. So I think that
uh the people of California want
California to fight. They want us to
push back against abusive actions like
what's happening in Texas to block it,
to neutralize it, to styy it, uh, and to
not allow it to to happen. And so, um,
uh, of course, the independent
redistricting commission is a good idea.
I supported it at the time, and I think
every state should have it. Uh, but we
cannot tie one hand behind our back here
in California. The governor has said we
got to fight fire with fire. The
governor has said uh we can't be
involved in unilateral um disarmament.
Uh the governor has said and I agree.
Attorney General Bontto wanted to bring
up another point of conflict between the
states and this white house and that is
crime. Uh earlier today, Vice President
JD Vance was at Washington's Union
Station meeting with National Guard
troops who were patrolling in the city.
And here is the vice president's message
amid protesters in the background.
>> We do not have to allow our cities to be
taken over by violence and disorder and
by chaos. You can actually do stuff. You
can actually bring you can actually
bring law and order to communities.
You've just got to have the political
willpower to do it. I think that if we
set a standard in Washington DC that
political willpower can bring some
common sense law order back to these
communities, then maybe some other
communities and other cities will follow
suit.
Attorney General Bonte, how concerned
are you that the president may try again
to send uh guard troops and uh mobilize
them and send the US military to cities
in California and perhaps in other
cities across the country where he may
have a difference and what is your legal
response to that?
It is Trump's articulated desire to
treat the patriotic men and women of our
military as political pawns as his
personal army to deploy them in only
blue cities and blue states completely
transparently partisan about it and to
do so unlawfully uh in violation of the
Posi Kamatus Act which has been in place
since the late 1800s over a century.
part of the the the founding principles
of our nation when the British monarchy
placed the army in the colonies to be
involved in civilian law enforcement. Uh
he cannot place the military in to
American cities on American soil to
engage in civilian law enforcement is
against the law and he is saying he
wants to fight crime. That is the
definition of civilian law enforcement.
So um if he seeks to do it he we will
see him in court. We will stop him. We
will block him. He will be clearly in
violation of the law and you know he is
a repeat offender. He is lawless and
lawbreaking. We have sued him 39 times
in 30 weeks. We have secured restraining
orders and preliminary injunctions over
90% of the time when the court has ruled
on our request. So he is taking L's day
after day in court because he's breaking
the law. And he complains quite a bit
about losing in court and court orders
that are against him. If he doesn't want
quarters against him, court orders
against him, he should stop breaking the
law. It's that simple. He breaks the
law, we sue. He doesn't break the law,
we don't sue.
>> Right, Mr. Attorney General, just in the
last 30 seconds that we have you, I do
want to keep on this topic of crime
because I know you're part of a
litigation effort against the Trump
administration blocking access to grants
for victims of crime. Have you gotten a
response from the administration?
>> No, we filed uh on Monday and you know
this is an anti-public safety, anti-
victim administration. They are trying
to treat victims as political pawns,
victims of domestic violence, of gun
violence, of sexual assault, and pull
funding away from them through the
victims of crime act, which provides a
billion dollars to over 10 million
victims every year and trying to
leverage that funding to force states
unlawfully to engage in participate in
their um mass deportation, cruel
immigration agenda. It's against the
law. They can't do it. And if Trump
really wants to help places that need uh
help with crime, he should look at
Louisiana, Alabama, and Arkansas, which
have as of 2022 the top three highest
homicide rates in the nation.
>> All right, Rob Bont, attorney general of
California, thank you so much for
joining Bloomberg.
>> And make sure to tune in to Balance of
Power tomorrow for Michael McKe's
interview with Austin Goulsby, president
of the Chicago Fed from Jackson Hole.
That will be right here at 5:45 p.m.
Eastern on Bloomberg TV and Radio.
>> Well, tune in tomorrow night for our
interview with former Vice President
Mike Pence. That's tomorrow at 5:00 p.
p.m. Eastern. Thanks so much for joining
us on Balance Power. This is Bloomberg
alongside Michael Shepard. I'm Tyler
Kendall. We'll see you back right here
tomorrow.