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, Jerome Powell leaves the door
open to rate cuts. But is it enough to
quiet the president's pressure campaign?
>> Jay Powell today said he he you know
suggested that they might cut interest
rates but they haven't proceeded.
>> Well, we call him too late for a reason.
He should have cut them a year ago. He's
too late.
>> We'll bring you some of the Federal
Reserve chairman remarks that sent
stocks and bonds surging and have fresh
reaction from Jackson Hole when former
Kansas City Fed President Esther George
joins us. Plus, developments from the
White House regarding embattled
chipmaker Intel. The president saying
the company has agreed to give the
government an about 10% equity stake in
the company. We'll have more on that
potential deal live from the White
House.
>> And the big news from Canada tonight.
America's second largest trading
partner, saying it will remove its
retaliatory tariffs on a long list of US
products. Prime Minister Mark Carney
announcing the decision a short time
ago. Why? And why now? when Dominic
Leblanc, the minister responsible for
Canada US trade, joins us up ahead.
>> But we begin tonight with Federal
Reserve Chair Jerome Powell's remarks
today from the Jackson Hole Economic
Policy Symposium. He discussed the
possibility for the central bank to
adjust its policy stance following
recent data.
>> The stability of the unemployment rate
and other labor market measures allows
us to proceed carefully as we consider
changes to our policy stance.
Nonetheless, with policy in restrictive
territory, the baseline outlook and the
shifting balance of risks may warrant
adjusting our policy stance.
>> And joining us now for more live from
Jackson Hole, Wyoming, following Fed
Chair Pal's remarks is of course
Bloomberg's Michael McKe. Mike, thanks
for being here. Can you just give us a
recap? What sort of details did we
really glean from the Fed chair today
when it comes to the future path of
monetary policy?
Well, you notice he qualified it in that
statement saying it may be time to
adjust uh our our rate, but uh the
markets don't do nuance and they read
that as we are going to cut rates on
September 17th and that's why you're
getting the reaction that you got going
into this. People thought he would be a
little more cautious and try to hedge
his bets some because you've got two
things going on. You've got the labor
market weakening, at least in the last
report, and that would require one kind
of monetary policy response. You've got
inflation picking up because tariffs are
starting to work their way into the
price chain, and that would require
another uh Federal Reserve type of
response. Today, what the chairman said
was, "We think it will be a faster
reaction in the labor market to the
president's fiscal policies than it will
be in inflation." inflation will take a
little longer to show up because it has
to go sector by sector, company by
company, and country by country given
that there are all kinds of different
tariff rates the president has put on
it. And so, uh, they think the immediate
danger is more in the labor market. Now,
we'll have to see what happens when we
get the next payrolls report on August,
uh, September 5th and when we get the
next CP CPI report on September 11th,
but for right now, it looks like they're
poised to cut rates.
Bloomberg's Michael McKe. Thank you. And
this afternoon, reports circulated that
President Donald Trump will be meeting
with the Intel CEO at the White House
today. This comes just moments after the
president announced that the chipmaker
had agreed to give the US a 10% stake in
the company. Take a listen.
>> You know what? I think the United States
should be given 10% of Intel.
and he said, "I would consider that." I
said, 'Well, I'd like you to do that
because
uh Intel has been left behind.
>> Joining us now with the latest from
President Donald Trump's announcement
today is Bloomberg Skyler Woodhouse, who
is with us from the White House North
Lawn. Skyler, we've gotten some more
details on what this deal is looking
like. Can you go through them and can
you also lay out a little bit about how
the president described the way this
deal came about?
>> Absolutely. This is really what this is
really President Trump's sort of latest
um move and you know bringing
manufacturing back to the US and sort of
setting um you know the president that
the US is this you know dominant global
partner. um he has said from you know
since taking office that the US um you
know is sort of going to you know set
its mark on the world and this is what
we're seeing right now um with with the
with Intel and the US taking a 10% stake
in the American company. It's really
stunning just the way the um US has sort
of intervened in this um this tech
company. So we'll have to see you know
sort of as the details come out what
this looks like. Um but right now it's
you know it's what we've received from
the meeting today with um President
Trump meeting with um the Intel CEO is
that the US will get 9.9% in fully
diluted common shares. So um we'll see
you know when this like all takes effect
but you know this is really uh the next
step in sort of President Trump um you
know leaning into American dominance and
and state craft.
And uh Skyler, the other, of course, top
story that we've been following today is
the White House's pressure campaign on
the central bank. And President Trump
actually escalated his threats against
Fed Governor Lisa Cook earlier today.
Let's take a listen to what he had to
say.
>> President Trump, you going to fire Lisa
Cook, the Fed governor, over her
mortgage?
>> If she doesn't resign. Yeah, she's she
what she did was a bad So, I'll fire her
if she doesn't resign.
Now, Skyler, we should say and give the
context here that President Trump is
elevating these allegations of mortgage
fraud against the Fed Governor, Lisa
Cook. But at this point, that's what
they are. They're just allegations. No
formal charges have been filed against
Cook. But what do we know about
potentially the legal basis here that
President Trump might be considering?
And what does this tell us about the
White House's strategy when it comes to
its pressure on the central bank?
>> Absolutely. you know, for President
Trump, he is looking to um, you know,
win the majority across the Fed board.
So, obviously, if he's able to remove um
Fed Governor um Lisa Cook, whether that
is with her resigning on her own merit
or firing her, you know, should she step
aside, that gives Trump the opportunity
to sort of bring in his own um governor
um to take majority of the board. And
that is what he's looking to do.
Obviously, what we've seen from
President Trump, you know, since taking
office in January are the repeated
attacks on Fed Chair um Jerome Powell.
Um so, this is really just the next step
in ter sort of him, you know, uh
continuing his war against the Fed. And,
you know, only time President Trump
today did not say how long he would give
Fed Governor Lisa Cook to sort of
evaluate if she would resign, but that
is something we're closely watching to
see when she resigns or when the
president might intervene with an actual
firing.
Right. Exactly. A very high legal bar
there if President Trump were to do so.
Bloomberg Skyler Woodhouse, we thank you
so much for your reporting as always.
And for more insight into Fed Chair
Pal's remarks today, as well as
President Trump's latest pressure on the
central bank, I'm pleased to say we're
joined now by Esther George, the former
president of the Federal Reserve Bank of
Kansas City. She's live with us from
Jackson Hole, Wyoming. Uh, President
George, thank you so much for being here
and I want to pick up on this
conversation. When it does come to the
White House's pressure campaign on the
Federal Reserve, do you think that there
is risk here to Fed credibility if and
when the Fed does cut rates?
Well, that's always the concern because
the Fed has been designed to be
insulated from political pressure and
the more that pressure comes to bear, it
begins to create uh sort of a cloud over
their decision-making for the public. I
think that is not true for the
individuals around the table. They are
quite focused on uh their
responsibilities to the American public.
But of course, the communication that
runs uh into this issue can become more
difficult.
>> President George, were you expecting to
hear a little bit more perhaps from
Jerome Powell uh in defense of central
bank independence given that this is in
essence his validtory speech at Jackson
Hole?
>> Yeah, I wasn't surprised. I mean I'm not
sure what could be said at this point
that hasn't already been said and he has
been very clear that he is focused on
the job that was given to this
committee. So talking about the economy
talking about the framework which
describes how the Fed goes about its
business I think was his way of saying
we are sticking to uh the business at
hand and I I think that was appropriate
for him.
Well, let's pick up on that framework
and what we learned today because I do
want to ask you about inflation concerns
because the monetary policy framework
review was revised to emphasize
maintaining 2% inflation expectations.
But what can the Fed do if uh you were
advising here to keep consumer
expectations well anchored when we
really haven't seen them deliver on that
2% target in recent memory?
A couple questions.
>> Yeah, I think it's a pretty big issue
right now for the Federal Reserve. And
of course, you heard the chairman
characterize the upside risk to
inflation that exist. You heard his
emphasis in the framework review that
having well anchored long run inflation
expectations would be critical uh for
this committee to do its work. And so
right now, depending on where you are
looking for evidence of the anchoring of
those inflation expectations, I think
you have consumers feeling one way, you
have businesses uh beginning to think
about how the inflation pressures that
lie ahead might be affecting them. And
so I think it creates a tentative
environment, if you will, about what the
public expects inflation to be down the
road. And that, of course, is going to
be, I think, one of this committee's
biggest challenges. ahead is that you
have an inflation dynamic right now
where inflation was already running well
above the Fed's stated target, their
definition of price stability. Now you
have the tariff effects which again the
committee might be willing to look
through but it becomes pretty difficult
to disentangle where some of those
effects are coming from. So it is a time
I think of really having to lean into
where are the risk around this monetary
policy.
President George I wanted to dial into
that question of tariffs and their
impact on prices. And today during his
remarks Jerome Powell did indicate that
he saw it more as a uh fleeting impact
on inflation rather than uh something
that would be persistent. but he did not
rule out the latter scenario entirely.
What is your view about the risk down
the road, especially given that the
administration isn't done with the
imposition of tariffs?
I think that's why this question becomes
so difficult to answer because if
tariffs were coming in one discreet move
in a very precise amount then you might
feel more comfortable saying this is a
one-time hit to the price level and and
we can look through that. But the truth
is you now have inflation that is
reacting to uh how these tariffs are
being uh carried out. They're being
carried out with a fair amount of
discretion by country. uh companies will
be responding to those in different ways
and that's why I think it is going to be
more difficult and frankly more
challenging as the committee tries to
keep its credibility tries to keep that
inflation expectation anchored to know
what is driving the impact of inflation
here. So it just creates a lot of
uncertainty and I think you heard that
today in the chairman's speech. This is
being conducted in the context of
significant uncertainty.
significant uncertainty and we also
heard Fed Chair Jerome Powell talk about
uh the idea of how tightening
immigration policy is impacting the
labor market and I'm curious what you
think about this idea as uh firms try to
absorb some of the excess costs when it
comes to tariffs and passing that on to
consumers. Are they also going to be uh
perhaps faced with some higher labor
costs here too as we watch more of the
administration's policies play out?
So I think this is also a very open
question. The dynamics between these two
are going to be worth watching because
you'll be watching for the wage impact
as we see price effects come into play
and companies will have to make
decisions here about whether their
ability to pass on cost to pay workers
all of that mix is going to be very
important in how the Fed judges what its
next steps are going forward. So yes,
those two are very tightly linked I
think when it comes to trying to
decipher the economy. And you heard the
chairman say today the labor market is
reacting to both supply and demand
factors right now which make and I think
he used the word a curious uh mix to
come up with the current unemployment
rate. So it is a time of uncertainty and
understanding the dynamics that are
affecting both the price inflation as
well as labor rates is going to be an
important one for them to decipher.
>> Esther George, former Kansas City Fed
president. Thank you so much. Coming up,
Wimir Zalinsky says only President Trump
can stop Vladimir Putin as details of
potential peace talks remain unclear.
We'll discuss with Evelyn Farcus of the
McCain Institute up ahead. But first,
Canada says that they will remove
retaliatory tariffs on US products in an
olive branch move to Donald Trump. We'll
discuss this with Dominic Leblanc,
Minister for Canada, US Trade, next on
Balance of Power on Bloomberg TV and
Radio.
[Music]
He's removing his tariffs. Yeah, he's
he's removing his retaliatory tariffs,
which I thought was nice. And we're
going to have another call soon. Yeah,
we had a very good call.
>> They're getting closer and towards the
end trade.
>> I like them. You know, look, I'm
fighting for the United States, Canada,
and Mexico. Taking a lot of our business
over the years, over 25, 30 years.
That was President Donald Trump earlier
today discussing Canadian Prime Minister
Mark Carney's decision to remove
retaliatory tariffs on US products that
comply with the US MCA deal in a move
that appears to be an olive branch to
the US after months of trade
negotiations. Joining us now with more
insight is Dominic Leblanc, president of
the King's Privy Council for Canada and
the minister responsible for US Canada
trade. Minister Leblanc, thank you so
much for joining us. We have to ask this
is coming across as uh something of an
olive branch to the US but what is
Canada getting in return at this moment
and then down the road from this
gesture.
>> So thank you for the question. Um, as
the president said today and as he said
to the prime minister in his uh what we
thought was a positive telephone
conversation yesterday, um, if if we're
preparing uh for a review of the USMCA
of the trade agreement which is built
into the agreement in 2026, um, the
Americans had in their tariffs respected
uh, imports into the United States that
were compliant with with the USMCA
agreement.
Um and we thought that it was
appropriate and proper for Canada to
assume a similar posture and therefore
adjust the retaliatory tariffs that we
had put in place um in February and
March to ensure that like the
administration the United States were
respecting uh those uh goods that are
compliant with the USMCA. We took down
those retaliatory tariffs and based on
my conversations with Secretary Lutnik,
the prime minister speaking with
President Trump, we're optimistic that
we can work with President Trump and his
administration um and come to an
agreement that can be beneficial for the
economy of both countries. There are so
many things that we can do
collaboratively. The economies are so
integrated in strategic sectors
important to the president. We think
there's a lot of positive things that we
can do and this was an important step in
terms of getting us to that
conversation.
>> Well, I do want to drill down on this
idea of strategic sectors and ask you
about how negotiations are going when it
comes to steel and aluminum tariffs
because 50% levy is of course a very
high rate. Have you gotten any
indications that that rate is going to
come down?
>> Um, no, not yet. We're we're we're
optimistic. We're uh continuing to talk
to Secretary Lutnik and others in the
Ambassador Greer, others in the
administration, but your your question
is a good one. Um the section 232
tariffs on the strategic sectors, the
president has applied with very little
relief. Uh those tariffs globally,
including in agreements that he signed
with other trading partners as important
as the European Union or or the United
Kingdom. So other major trading partners
have not gotten much relief uh from
those 232 sectoral tariffs. The
difference with Canada is that those are
precisely the sectors in which our
economies are the most integrated. So um
if it's the automobile tariffs, the
aluminum tariffs, um softwood lumber is
another example. Um for decades we have
integrated supply chains, just in time
delivery. I've said before, Canada and
the United States don't as much as sell
things to each other, but build things
together and sell them around the world.
Um, we've taken very, very tough
measures, as has the United States, with
respect to dumping from countries like
China of steel and aluminum. So, we're
optimistic that we can continue to have
those conversations um with President
Trump's administration um and make the
case that there's an economic
opportunity for both countries um if we
reset some of those sectoral tariffs.
Minister LeBlanc, uh, a number of other
US trading partners, including Japan and
the European Union, have made investment
pledges in the US, uh, as a way of
perhaps lowering, uh, the tariff burden
that they might ultimately face from
Washington. Is Canada considering making
a similar commitment to invest in the US
uh, the way that other trading partners
have so far? Those have absolutely been
uh part of our conversations uh with
President Trump's administration at at
many levels. Um Canada is already the
second most important foreign direct
investor in the US economy. If you take
just the pension funds in Canada, just
take that one example. There's eight
large pension funds that uh invest
around the world. Um if you take the
enterprise value of those investments,
it's almost a a trillion dollars of
investment in the United States economy.
Um and that figure can grow hundred
billion dollars a year. like there's
there is to to answer your question very
directly there are numerous examples
where Canadian private sector uh and
quasi public sector in the case of
pension funds um can invest in very
important sectors to President Trump and
to the US economy you could think of
energy you can think of mineral projects
um but we can also invest in Canada and
do things jointly defense security um
just to be uh Just to offer two quick
examples again where Canada and the
United States have always and we are
increasing as a Canadian government um
our investments in those sectors. So
therein lie huge opportunities for
partnerships with the United States as
well.
>> Minister, in the final minutes that we
have with you, I want to ask you about
this idea that Canada was really one of
the only countries to retaliate against
President Trump's tariff plans. than
when you've seen the sort of more
preferential rates that our other
trading partners have been able to
secure. In retrospect, would you have
taken this same tact?
Um, sure. I think we would have. I think
as I say that the circumstance
uh of last February or March um is
different than the circumstance at the
end of August. Um the US administration
has been clear in terms of the 232
sectoral tariffs. We've seen to your
question examples of agreements they've
signed with those countries that haven't
provided uh much relief uh if any in the
in the 232 sectoral tariffs. But as we
said at the beginning, the fact that
President Trump in his executive uh
order at the end of July confirmed
uh the American uh exemption that
they're according to uh imports from
Canada that are compliant with the USMCA
with the free trade agreement means that
um Canada should mirror that exemption
and that's the decision that Prime
Minister Carney announced today. We
believe in the USMCA. We believe it's in
the interest of the Canadian and
American economies and the Mexican
economy as well. Um that we strengthen
and commit ourselves to that agreement.
Um President Trump did that with the
carve out that he provided Canada which
puts us at a marginal um advantage to
other countries. Uh but we want to uh we
want to respect that commitment and
ensure that we're also mirroring um that
decision that President Trump made.
All right, Dominic Glanc, president of
the Kings Privy Council for Canada and
Minister responsible for Canada US
Trade. Thank you so much. Of course,
Mike, this is a story that we watch very
closely here at Bloomberg. And when you
look at those other more preferential
rates that other countries have been
able to secure, we've been waiting for
some sort of update when it comes to
Canada.
>> And it's such an important trade
relationship. And yet, it's one that
have really gone off the rails from the
time that Donald Trump took office. They
really have been at loggerheads and
having difficulty in reaching this
understanding and maybe we have a path
there perhaps through investment.
>> Right. All right. We'll continue that
conversation, but coming up first, a
federal judge has ordered that alligator
Alcatraz must wind down operation. We'll
bring you those details as well as the
latest on the war with Ukraine. This is
Bloomberg.
The baseline outlook and the shifting
balance of risks may warrant adjusting
our policy stance. Our policy rate is
restrictive modestly so in my view. The
stability of the unemployment rate and
other labor market measures allows us to
proceed carefully. While the labor
market appears to be in balance, it is a
curious kind of balance. Longerterm
inflation expectations, however, as
reflected in market and survey based
measures appear to remain well anchored.
We will not allow a one-time increase in
the price level to become an ongoing
inflation problem.
That was Fed Chair Jerome Powell
delivering his last speeches at the
Jackson Hole Economic Policy Symposium
as the head of the central bank earlier
today. His signals about a possible rate
cut as soon as September were what Wall
Street wanted to hear. And for more on
that, we turn to power moves with
Bloomberg's Vonnie Quinn, who joins us
live from world headquarters in New
York. Vonyie, that really is the
question. Are traders only hearing what
they want to hear? Were there not any
other somewhat hawkish notes in there
that could be somehow divined?
>> Funny, you should mention our own Anna
Wong of Bloomberg Economics is pointing
to that very phenomenon, right, Mike?
She's actually saying that there were
plenty of hawkish notes to this speech.
There was a lot of talk about growth
slowing, for example. There was a lot of
talk about fragilities in the labor
market that might just get worse. And of
course, the Fed chair also pointed to
other scenarios, maybe not as base
scenario, but other scenarios that could
come to fruition, such as tariff effects
having a longerterm impact on inflation
or inflation expectations, which would
really be something that the Fed would
be worried about because it would impact
the consumer greatly. That said, as you
mentioned, markets took the signal for a
September cut and ran with it, pricing
in about a 90% chance now of a cut in
September. Once again, not a fully 100%
of a chance, but definitely a 90%
chance. And the major indexes were
higher on the day. In fact, the Dow
Jones Industrial Average had a record,
its first record this year. It hadn't
been this high since last December. Same
for the S&P 500. It reversed all those
days of declines. And we had the Nasdaq
100 ending positive on the week.
Obviously, yields were where you saw the
most reaction. And we had the 2-year
yield dropping nearly 11 and a half
basis points on the session. It was an
incredible plummeting in the front end,
which is of course the most sensitive
part of the curve to whatever the Fed
decides to do next. Traders obviously
will be looking out to October and
December to the next Fed meetings now as
well and postulating perhaps after a
week's break in August to celebrate the
end of the month what the Fed will
actually do. But of course, there's more
data between now and then as well. We
get inflation data next Friday and
there's the September jobs report at the
beginning of September as well. I do
want to point as well to the weaker
dollar because that will also have an
impact on our trading partners and also
other political news today and it is
political is the stake in Intel. So the
president just trusing out a few minutes
ago this confirmation that he had
reached this deal with Lip Bhutan, the
CEO of Intel a little earlier. He's
talking about how the 10% government
share is valued at roughly 11 billion.
It's a very very unorthodox deal. We
haven't seen the government take a stake
in a company since way back after the
financial crisis when it took stakes
obviously in the mortgage lenders, the
GSSE's Fanny and Freddy and it's it's
still in them right now. We learned from
Intel earlier that it's going to be a
passive ownership stake. There won't be
any board members and the US government
has agreed to vote with the company's
board. Also that the US will get a
warrant for an additional 5% of Intel.
So bear in mind this is an almost 15%
stake once it fully vests assuming that
it does. But again, president very proud
and truthing this out just a few minutes
ago. So those shares were higher as were
the broader market today falling off a
little bit in the post market as the
market digests exactly what this means.
And then just another little story for
all of you Siri users out there. It
looks like Apple is now exploring
Google's Gemini to make Siri a little
bit better. I know a lot of people that
would be very happy about that, would
like Siri to understand them a little
bit better, but is also in talks with
others. So, for example, Anthropic and
Open AI. So, as our own reporter Mark
German called it earlier, it's a little
bit of a bake off and it is obviously
going to come down to cost and whose
model works the best.
>> All right, a great roundup by
Bloomberg's Bonnie Quinn from World
Headquarters in New York. We thank you
as always. And we turn now to overseas
and the war in Ukraine. After President
Trump told reporters this afternoon
while he's not happy about what's
happening in the Russia Ukraine talks,
he's giving Russian President Vladimir
Putin another twoe deadline to come to
the table.
>> No, I'm not happy about anything about
that war. Nothing. Not happy at all.
We'll see what happens. I think over the
next two weeks, we're going to find out
which way it's going to go. and uh I
better be very happy.
>> And joining us now here on Balance of
Power on Bloomberg television and radio
with her analysis is Evelyn Farcus,
executive director of Arizona State
University's McCain Institute and former
deputy assistant secretary of defense
for Russia, Ukraine, and Eurasia under
the Obama administration. Evelyn, it's
good to see you and thanks for being
here. We heard from the Ukrainian
President Zalinsky earlier today who
said that President Trump is quote
currently the only person who can stop
Putin. Can you put this into context for
us here? Is that the right assessment?
How much leverage does the US president
have when it comes to trying to get this
war to end?
Yeah, I mean, Taylor, I would agree um
that President Trump is if there's a
single person who can put well, if
there's a single person who can put an
end to the war, it is Vladimir Putin
ultimately because he's waging this war
against Ukraine. Ukraine doesn't want a
war. They would put down their weapons
the minute, you know, Russia really is
willing to make peace. Having said that,
short of Vladimir Putin, the next person
with all the cards and all the influence
to make this war end is President Trump.
But of course, it requires us to put
more pressure on the Kremlin, and that
means sanctions. That means providing
more weapons to Ukraine. And I'm glad to
see that President Trump is threatening
sanctions again. Although, I will say I
don't know why he's waiting two weeks
because President Putin has clearly been
playing for time to get his troops more
time on the battlefield and that is not
in the interest of the United States.
Evelyn, we have heard from Russian
Foreign Minister Sergey Lavrov
essentially that uh they have very
little interest in a meeting right now.
He was dismissive in an interview on
NBC's Meet the Press that will air this
weekend of the idea of a meeting between
Vladimir Putin and Zalinski. Yet Donald
Trump is signaling that he'd be willing
to give as much as two weeks to the
Russian leader. Is that too much time?
Should Donald Trump simply turn around
now and say, "Look, it's time to move on
sanctions."
>> Yes. And he should have turned around
and done that, you know, when the
Russian president refused his ceasefire
ultimatum, you know, at that meeting in
Alaska last Friday. So, you know, he's I
think our president is being way too
lenient when it comes to Vladimir Putin.
And we have all the power to make
Vladimir Putin afraid. so afraid that
when President Trump threatened
sanctions before, Vladimir Putin said,
"Oh, wait, wait. Don't sanction me. I'll
come and meet you in Alaska." Well, he
came to Alaska again. President Trump
said, you know, you need to give us a
ceasefire and start negotiating in
earnest. And President Putin said no.
Went away. And I guess maybe he gave
President Trump the impression that he
would meet with President Zilinski
one-on-one. Those of us who know how
Putin thinks and understand kind of the
the mentality, the ideology that's
driving him know that he does not view
President Sullinsky as his equal. He
would never meet one-on-one with
President Sullinsky unless he was, you
know, defeated militarily by President
Sullinsky and President Trump insisted
on it. So, um, unfortunately, I think
the Russians have been misleading our
president and we really need to slap
those sanctions on, as you said, Tyler
or Mike rather, immediately.
>> And for our radio listeners, we're
showing right now President Trump. He
was in the Oval Office earlier today
showing a picture of uh himself and
Russian President Vladimir Putin. And
one of the main uh threads that we've
been following this week, Evelyn, of
course, has been the idea of Europe and
the US trying to get something on paper
when it comes to security guarantees.
That really has been dominating the
conversation. There seemed to be
optimism at the start of the week, but
now we've seen these roadblocks emerge
and our reporting indicates a lot of it
is coming from Russia wanting to have a
say in what Ukraine security guarantees
are going to look like. Uh, I know that
you're talking about uh the US giving uh
perhaps more more uh weapons and support
here, but when it comes to long-term
guarantees, what is realistic to expect?
What do you think can actually get done
that would get a deal over the finish
line?
>> Well, that's a really good question
because what what is the right thing to
do, the smart thing to do may not be
realistic yet, Taylor. So at the moment
you know I can say the right thing to do
is to you know give an article 5 like
agreement to Ukraine. That means if
Ukraine's invaded the United States will
come to its military defense in every
way possible. And if you one better
would be to you know include Ukraine in
NATO. They certainly have deserved it.
They're now the largest most capable
European fighting power you know that
exists because of this horrible war
that's been thrust upon them. So they
would actually be an asset inside NATO
and certainly would be horrible if they
were on the other side of the equation
if if Russia conquered them. So you know
we are we that would be the best case
scenario. The unfortunately the Russians
they sometimes seem to give President
Trump the impression I guess maybe last
week they gave the impression that they
would be willing to have European
tripwire troops on Ukrainian territory.
Now the Russians are saying no way. Um,
at the end of the day, the Ukrainians
will want foreign troops to guarantee
that peace, but they will also want that
article 5 guarantee, the guarantee that
if they are attacked again by Russia, we
will come to their military direct
military assistance. And this is the
thing that Ukraine, as much as they want
to stop this war, they don't want to be
reinvaded by Russia. And they don't want
a ceasefire. That means that they have
to be on alert, you know, and they can't
live as free people because Russia's
going to invade again. And let me just
say one other thing that China is
watching. So this is not just about
Ukraine and Europe. China's watching and
I am afraid that Vladimir Putin will try
to distract or China will try to
distract, you know, create more
confusion by trying to attack Taiwan or
that Vladimir Putin will conduct some
sort of lower level military action
against a NATO ally.
Evelyn, I'm glad you brought up China
because next week uh Xiinping is hosting
a meeting of the leaders of Russia,
Turkey and India. And when we talk about
secondary sanctions, India and China
loom as the largest uh targets for the
US if Donald Trump were to proceed in
that direction. And yet doing so would
be at odds with his goals on trade with
those two economies.
>> Well, yeah, this is where it gets
complicated. putting more tariffs on
China when it comes to purchase of oil
and gas, you know, could be problematic
for the United States because we're also
trying to work out an overall tariff
deal with China. We don't want a global
trade war and the stakes are very high
when it comes to the United States and
China. So, you know, I think President
Trump will have to weigh that in the
balance. But frankly, I think if the
Chinese are are faced with that kind of
a sanction, maybe they would put
pressure on Russia to stop the war, to
make a deal. You know, that these are
the kind of things that actually
President Trump is equipped to assess
because he is willing to take on risk in
in a way that, you know, is different
from other presidents. And I I give him
credit for that because he he's not
afraid to say, "Well, I may put
sanctions on." and he put sanctions on,
you know, higher tariffs on India
because they were buying continuing to
buy oil from Russia, which was something
no one foresaw.
Evelyn Farcus, executive director of
Arizona State University's McCain
Institute and former deputy assistant
secretary of defense for Russia,
Ukraine, and Eurasia in the Obama
administration. We thank you for your
insight. Coming up, Gerlain Maxwell's
closed testimony to the Department of
Justice's release to Congress. Plus, the
FBI raid on former national security
adviser John Bolton when we assemble our
political panel next on Balance of Power
on Bloomberg TV and Radio.
most fundamental bottom line thing is
that we want America to win the global
AI race. This has been one of the
president's top priorities and he wants
to sort of unleash the animal spirits of
American innovation and AI. He's made
that very clear. But of course, my job
as the consumer protection watchdog is
just to make sure as we unleash American
innovation, consumers at least are being
told, you know, honestly how AI products
work, what they can do, what the
consequences are.
This is Balance of Power and that was
FTC Chair Andrew Ferguson speaking to
Bloomberg earlier today on the
administration's approach to embracing
and regulating artificial intelligence.
You can find the whole interview online
and on the terminal.
>> Now, let's get to some of the other top
stories that we're following in today's
Power Brief. A federal judge says that
the sprawling immigrant detention camp
located in the Florida Everglades was
built without a proper environmental
review and must be dismantled. State and
federal officials have 60 days to remove
the fencing, lighting, and other
infrastructure installed to support the
facility. The judge rejected an argument
that the federal facility was exempt
from review because it was built by the
state of Florida, noting that the Trump
administration had pledged $600 million
in federal funding to support the
initiative. A Florida state official
filed a notice of appeal.
>> Plus, Nvidia is instructing component
suppliers to stop production related to
the H20 artificial intelligence chip.
According to a report from the
information, the order comes after
Beijing urged local companies to avoid
using H20 chips, which were originally
designed specifically for the Chinese
market. Nvidia and competitor AMD both
recently secured Washington's approval
to resume uh lowerend AI chip sales to
China, but only on the condition that
they give the US government uh 15% of
their related revenue. Bloomberg has not
independently confirmed this report.
>> And FBI agents raided the home of
President Donald Trump's former national
security adviser, John Bolton, early
this morning. A sign the White House is
stepping up a campaign of retribution
against some of its fiercest critics. A
source tells Bloomberg the search is
linked to an investigation into whether
Bolton retained or shared classified
documents. President Trump addressed the
raid earlier today.
>> I'm not a fan of John Bolton. He's a a
real sort of a low life. He's a uh not a
smart guy, but he could be a very
unpatriotic guy. I mean, we're going to
find out.
>> During Trump's first term, prosecutors
investigated Bolton over his tell all
2020 memoir, which detailed Bolton's
belief that Trump was unfit for the
presidency. Trump accused Bolton of
using classified information in the book
and sued unsuccessfully to block its
publication.
>> And joining us now with their reaction
to this story and more is this evening's
political panel, Bloomberg politics
contributor and Democratic analyst
Jeannie Shanzeno, democracy visiting
fellow at Harvard Kennedy School's Ash
Center, alongside Republican strategist
Matt Terrell, managing partner at
Firehouse Strategies. Let's just start
here with this latest story when it
comes to the FBI raid against Bolting.
And Jeannie, we actually had a very
interesting conversation about this on
the early edition of Balance of Power.
And I would love to get your thoughts
again. What's your level of concern when
it comes to this raid?
>> You know, it is concerning, but I think
we should all just take a breath and
wait because in this case, this is not
just the executive branch going in or
directing the DOJ to go in. This is a
judge who signed off on an affidavit and
was convinced that there was enough
evidence or enough probable potentially
probable cause to go in and to conduct a
search. And so given that, I think we
should take a hands-off approach and
wait and see if and what they find. That
said, Tyler, um the timing is
interesting. coming on the same day that
Congress gets the Epstein files, the DOJ
decided at the very time that those are
released and the transcripts that they
would go in and do this. So, the timing
is interesting, but I would hold off on
judgment till we see what they found.
>> Matt, are you holding off on judgment on
this? What is your take on this raid of
the Bolton residents? Do you see it as
part of a pursuit by the president
against some of his adversaries,
including in his own party and his own
former allies like John Bolton?
>> Well, look, I think it is good to see
the president say that he was unaware of
this raid. Didn't know it was going to
happen. But look, the reality is I think
many in the make a movement for sure
recognize that President Trump had his
home raided and now they're seeing this
happen with Ambassador Bolton. And look,
there's no question there's more
information we need to find out on this,
but there were judges that signed off on
this. This wasn't just the president
going in and saying, "This is me doing
this." Judges signed off on doing this,
and we'll have to just wait and see
where all the information lies on this.
>> Uh, Jeie, I'd like to turn to you next
on a different topic, and this is one
that maybe Matt can address as well, and
that is the president's announcement
this afternoon on an investment by the
US government in Intel. Uh yesterday in
this uh room and earlier today, we heard
from Mike Pence and La Brainard each
expressing reservations and concern
about the US government taking this kind
of role in industrial policy. What is
your take? Is this a good idea? What
sort of precedent are we setting here,
if any? You know, I it is so stunning to
me that the Republican party that has
long talked about the freedom to conduct
business unencumbered by the government,
has long supported free trade and the
like, is now in a position not only of
moving away from its traditional trade
policies, but also taking the biggest
stake we've ever seen in a company like
this. It just heralds to me a new day in
what it means to be a Republican, at
least in this current iteration of the
Republican party. So, I have enormous
concerns about that. And you can just go
through the litany of concerns, but at
the top of them is the concern that what
does this mean about innovation and what
does it mean as it impacts national
security? Those two things weigh
heavily. So I agree with Mike Pence and
I seldom say that Mike Shepard, but I
agree it is a concerning concerning
change.
So Matt, what's your take here when we
have seen this trend from the
administration of a perhaps more
hands-on industrial policy, not just
with Intel, but the so-called golden
share, when we think about the Nepon
deal, and you hear White House officials
saying that perhaps this is the push
that they need to do in order to
accomplish their industrial policies,
reshoring manufacturing, things like
that.
>> Well, it's not the first time that the
United States has made an investment in
a company. That's happened before.
Happened in 2008, for example. But look,
this does map with the president's
strategy of trying to onshore
opportunity here in the United States.
Take for example production of
semiconductors and chips. A lot of that
obviously taking shape and being
produced in Taiwan, wanting to get that
produced here in the United States. Part
of that's economic opportunity. Part of
it's just national security. But the
other side of this is look this what
we're talking about here is building off
of the grants that are you know taxpayer
funded grants that are provided under
the B administration to this company.
And I think a lot of Americans look at
this and say why were we providing
taxpayer funded grants to a company
that's worth billions of dollars. You're
giving billions of dollars of grants
into a company that's worth billions of
dollars. And so this is an also an
opportunity for the United States to get
economic opportunity out of this, to get
equity out of this, to get a return on
their investment as taxpayers. So part
of it's the strategy of what you just
outlined, but another part of it I think
is a philosophy that many people are
going to rally behind on the use of
taxpayer funds uh and Washington in
general on that. Uh Genie, I wanted to
turn to a different story that we've
been following really all year, but
especially this week, and that is the
question of Fed independence in the
light of the pressure campaign on Fed
Chair Jerome Powell to lower rates and
this week, of course, the uh calls for
Fed Governor Lisa Cook to resign. Have
we gone past the point of no return when
it comes to politicizing the central
bank and challenging its independence?
You know, I really hope not. Um,
sometimes it's hard to put that genie
back in the bottle and I think that's a
concern for most of us because the
independence of the Fed is critical and
we've seen it in other countries and we
see it here and so we should have an
independent Fed. I was struck by the
fact that Jerome Powell today in his
remarks didn't even go there beyond
saying that they would continue to
follow the data and make decisions based
on the data because we haven't seen the
Fed, at least in my lifetime, under this
much political pressure. And of course,
you know, we want an independent Fed
because Republicans have to remember if
it is not independent, it's going to be
Democrats pushing it as well. All
presidents want lower interest rates and
want to have control of the Fed.
>> Sorry to do this. Only 15 seconds here.
Really, Matt. Should the president be
pressuring the Fed?
>> Well, look, it's his right to do what
he's doing. He's got the right to go out
and vocally express how he feels and he
believes that you got to get these rates
down. Bottom line is you saw the the
market rally today, surge today with the
notion there may be rate cuts on the
way. President Trump has a big economic
agenda that he wants to fulfill. Part of
that is hoping these rate cut rate cuts
come down. We'll see what happens.
>> Jeannie Shanzeno and Matt Terrell, thank
you both. And a programming note, make
sure to tune into a brand new Wall
Street Week with Bloomberg's David
Weston. That's coming up at 6 p.m.
Eastern right here on Bloomberg TV and
>> Thanks for joining us on this edition of
Balance of Power alongside Michael
Shepard. I'm Tyler Kendall. This is
Bloomberg. We'll see you back here on
Monday.