[Music]
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 of Power. I'm Joe
Matthew. Tonight, pushing back on the
president.
If you're doing your job well and if you
are executing on the vision and the
promises that the president made to the
public who elected him back to this
office, then you should have no fear
about your job. Just do your job.
>> The multi-pronged resistance happening
right now in Washington. Federal Reserve
Governor Lisa Cook suing the White House
over the president's attempts to oust
her. What Cook's legal team is saying
now is behind the alleged mortgage fraud
while the president digs in. Plus, from
a member of the Surface Transportation
Board to the now fired CDC director, the
pivotal legal battles taking form over
the president's efforts to reshape
independent agencies as CDC leaders
resign. A new name being tapped as
interim director and other agency
workers walking out to make their voices
heard amid the fight.
America
needs to see that you are the people
that protect America and we are going to
be your loudest advocates.
[Applause]
Also tonight, the ripple effect of
Nvidia's earnings call forecasting
decelerating growth after 2 years of AI
booming, but pointing as well to
possible Blackwell sales in China. We'll
speak to former ambassador Nick Burns on
how the country's fraying economic
relationship with China is exacerbating
concerns for the world's most valuable
company and the fall of US pending home
sales for a second consecutive month.
Why buyers are still bulking and what it
foretells for a sluggish housing market
heading into fall. But we begin tonight
with news surrounding Federal Reserve
Governor Lisa Cook's push back on the
president's move to oust her from
office. officially now filing suit
against the president and new reporting
from Bloomberg from Cook's lawyers
suggesting a quote clerical error done
unintentionally may have been behind the
mortgage dispute over which the
president wants her fired. That report
coming just hours before Cook appears in
federal court for an emergency hearing
tomorrow morning. She sues the White
House now to remain in her role. This is
a fastmoving story tonight as the clock
ticks down to that 10:00 a.m. hearing
covering it all for us tonight.
Bloomberg's Eric Larson in New York.
Bloomberg's Skyler Woodhouse here in
Washington. An attorney and former
Watergate prosecutor Nick Aki. We start
now with Eric Larson from our global
headquarters in New York. Eric, the suit
has finally been filed. What do we know
this evening that's new? We're hearing
about a clerical error that her legal
team is pointing out.
>> Yeah, right. We weren't really expecting
her to start labeling her defenses this
early in the case. Uh but she did signal
that to the extent there was potentially
a problem with her mortgage applications
on these two homes back in 2021. Uh that
there are innocent potential
explanations as you mentioned
potentially a clerical error. Uh that it
was innocent. Uh these are just a a
signal of possibly how she would have
defended against these claims if they
had gone through the typical procedure
that she says Trump has skipped entirely
uh by attempting to fire her. Um, so
it's really more about what Donald
Trump's claims are going to be, what his
defenses are going to be uh at this
hearing tomorrow because he's the one on
the defense here. He has to show that
this firing is justified and legal.
>> Okay. So, bring us to 10:00 a.m.
tomorrow morning. What will happen in
this hearing? And does she need to
appear?
>> She may be there. Uh, she has a
certainly a reason to be there. It's her
lawsuit. Uh, this is uh her big fight,
the fight for her career. Um, usually,
uh, plaintiffs show up at for a hearing
like this. It's a motion for a temporary
restraining order. That's a short-term
order that would essentially keep her in
her job for at least 2 weeks or so, uh,
while the judge considers potentially a
longerlasting injunction. Uh, but even
though it would be a, you know, a
short-term ruling potentially that we
could get tomorrow from the bench, it
would be the first sign of what this
judge potentially thinks about these
claims. The claim being that President
Trump did not have legal authority to
fire her. He doesn't have authority. He
doesn't have legal cause to fire her
under the Federal Reserve Act. And that
he didn't follow the typical procedures
uh that should have been gone done like
giving notice of the allegations and
having a administrative hearing instead
of just firing her over a social media
post.
>> Well, we'll find out a lot more tomorrow
with the help of Bloomberg's Eric
Larson. Thank you, Eric, for setting us
up. The battle over the Federal Reserve
coming here as another fight over the
CDC takes place in real time with a new
report now from the Washington Post as
we came to air saying Jim O'Neal, a top
RFK Jr. HHS deputy, close associate of
Peter Teal, has been chosen to be the
interim director at the CDC. Joining us
now for more, Skyler Woodhouse with us
on set covering the White House beat for
us tonight. Skyler, this is a really
interesting development and I know it
happened even since we just came in the
studio here, but the firing of the CDC
director followed by a series of
resignations and now a big walk out by
uh members of the agency tells us what
about the way this story is going to
unfold.
>> It really shows that um the White House
has created um this tone that it's
really the Trump way or no way. And what
we're seeing right now, you know, with,
you know, the ousting of the CDC
director and then those following
behind, um, you know, it's appearing
that folks who came into this
administration wanting to work with the
administration, it's clearly showing
that, you know, maybe there's even, you
know, so much that they, you know, h
have limits for and that they're not
willing to sort of cross that line. And
I mean, like Caroline Levit said earlier
today, um, you know, it's if you're
doing your job well, then you will be
fine, but if you're not, then, you know,
you might be fired. And that's clearly
clear clearly sort of what we are seeing
right now with the CDC and obviously the
way um the president is going after um
Lisa.
>> Yeah, pretty remarkable to see uh senior
officials walking out of the agency
including the chief medical officer. We
heard as well from the CDC's top
respiratory illness and immunization
official who put up a a wild resignation
letter that says HHS policies do not
reflect scientific reality and are
designed to hurt rather than improve the
public's health. RFK Jr. in an interview
today said we need to better align the
agency with Donald Trump's agenda. What
does that mean? Well, I think you know
what we have seen from uh
health secretary uh you know vaccine
skeptic um you know there and this comes
at a time where we've seen a lot of
policy changes sort of happening right
now around vaccines and they're really
leaning into this maja the make America
healthy again um agenda um as they you
know and so it's creating some tension
right now between you know what the
administration is looking to do and
those who are working there whether
they're newly appointed you know Trump
folks who came in in January or career
officials. There's, you know, a lot of
tension right now as they try and get
those policies across the finish line.
>> Well, this is a remarkable moment and we
appreciate the help as always. Bloomberg
Skyler Woodhouse. Thank you, Skyler. As
we turn back to you, now that we've
established the two breaking stories
that we're going to be managing this
evening on Balance of Power, we turn
back to Lisa Cook's lawsuit. And with us
for more analysis is Nick Arian, the
former assistant US attorney and former
Watergate prosecutor. It's great to have
you back, Mr. Acriman on Bloomberg TV
and radio. Now that you have gotten a
sense of what this lawsuit includes and
what the defense approach will be as
someone who's actually dealt with
mortgage fraud cases like this, does a
clerical error get Lisa Hook, Lisa Cook
off the hook?
>> It may very well because you have to
show fraudulent intent to get a
conviction on a mortgage fraud case. Uh,
and if you can't show that this if this
was just a mistake, if they haven't gone
back, which I'm sure they have not done,
and talk to the people at the banks who
actually accepted those forms, find out
what the circumstances were, as to who
checked off what, who did what, at what
point did Lisa Cook sign these mortgage
applications. if they haven't done their
homework, I I think they're in big
trouble here because it's very difficult
to bring a mortgage fraud case like this
unless you've lined up all of your
evidence and you can block out any kind
of mistake defense at all. And I just
don't see that they've done that.
They've just shot from the hip. They've
got a person looking at this trying to
find something that might show somehow
that there was a misstatement and that's
the best they can do at this point. So,
I don't see them doing anything at this
hearing tomorrow uh for a temporary
restraining order. I think they have to
really kind of go uh with what's there
and what's there,
>> okay,
>> isn't much.
>> Let's talk about cause. Earlier today on
Bloomberg, Scott Alvarez, the former
Federal Reserve general counsel, got
into this and discussed how the courts
will likely look at this case. Take a
listen. We'll have you respond.
>> The courts have not decided whether uh
behavior before a person has taken a job
um counts as cause for removing them
from the job. Um, in the suit that Lisa
has filed uh this morning, she's arguing
that cause must be related to job
performance uh so that it doesn't
include anything that happened before uh
she took the job at the Fed
>> comes down almost to the simple question
of what is cause in this case. We had
Peter Navaro with us last evening. He
said the documents themselves represent
due process. the president has caused.
What is your view?
>> Well, the documents themselves don't
mean anything. You have to first show
fraudulent intent and you have to show
it wasn't a mistake. And they simply
haven't done that up to this point. Nor
can they do it because they haven't put
together the facts. Um yes, it's true uh
that in terms of what is for cause uh
probably only relates to somebody
misperforming and doing something wrong
on the job itself. Uh that is probably
the way it's going to be interpreted.
But the bottom line is this whole thing
with this mortgage fraud uh allegation
is completely made up. Uh, it's not
something you'd even raise in the public
until you actually had a case and you
had it pinned down, which they don't
have. I mean, what's really worrisome
here is that it's obvious that what
Donald Trump and his minions are doing
is investigating everybody on the Fed
board. They're trying to find anything
they can. They tried to do it with the
chairman of the board with an overrun on
this new building and Donald Trump had
it all screwed up because he was
pointing to a building that had already
been built at this point in time. So,
they've got to get their act together.
They're flailing around trying to come
up with crazy allegations, conspiracy
theories without putting together a real
legal case. And without that, they're
going nowhere.
Well, that's interesting because as
someone who is deeply involved in the
Watergate case, I wonder your thoughts
and I think you just touched on this a
little bit, but but more about what's
going on inside that building. Is this
an administration that's just digging
through the backgrounds of anyone they
disagree with or is it more strategic
than that?
>> No, that's pretty much what it is. Look,
here's the problem. The problem is the
Supreme Court's opinion last year that
essentially said the president has
immunity for official acts. So
everything that Donald Trump does now is
clothed in an official act. Whether he's
going after universities uh and trying
to uh use various government agencies uh
to bring investigations, an official
act, whether he's filing a executive
order, another official act, he's done
that with law firms. He's doing it with
individuals that were in his cabinet,
not in his cabinet, but in his his
administration before. Uh he's clothed
everything in official acts. Back in the
day when I was in Watergate, I was
investigating Nixon's uh actions against
his enemies list. And part of the
problem was proving the motive and the
intent in terms of what they did to
various people. Here, it's out in the
open. It's in the executive orders. It's
in the investigation orders to the AG,
to Homeland Security, to the EEOC, and
because it's part of an official act,
Jim Roberts has basically given Donald
Trump a free pass to do whatever he
wants.
>> Remarkable moment we're in. Nick Arian,
thank you so much for coming back to see
us. Former assistant US attorney, former
Watergate prosecutor. We thank you.
Coming up, RFK Jr., as we mentioned,
says the CDC needs to better align with
the president's agenda after firing the
AY's director. We'll continue our
coverage of the new interim director now
reportedly in place. Coming up, but
first, following Nvidia's earnings
report yesterday, the US and China AI
race back in the spotlight, and we'll
discuss the implications, what it means
for our two countries relations with
Nicholas Burns, former US ambassador to
China. That's next on Balance of Power
on Bloomberg TV and Radio.
AI over the last few years has certainly
caught the imagination of everybody.
Huge promise but also huge risks.
>> Expectations are just a little somewhat
elevated and it needs a digestion
period. Longer term, we're still bullish
on technology. We're still bullish on
the AI theme. I think the boom's just
starting. The godfather of AI, Jensen,
and Nvidia continue to dominate this and
I think this is just a further
validation. Tech stocks go higher.
>> I'm not worried about Nvidia's uh
valuation. If you look at what's driving
the market and is it a very small group
of companies, absolutely. That's very
concerning.
It's balance of power on Bloomberg TV
and radio. I'm Joe Matthew with insights
there from analysts this morning on
Bloomberg's surveillance on the market
reaction to yesterday's earnings report
from Nvidia which raised some concerns
with its forecast. Nvidia also going out
of its way now to address an
unconventional plan by the Trump
administration to take a 15% cut of
Nvidia's AI chip sales to China. We got
into this last night as the report was
unfolding today. The company's CFO
following up on Bloomberg to say it
would not adhere to that plan unless it
sees a quote true regulatory document.
For a closer look, we bring in power
moves now with Bloomberg's Roma Bostic
live from world headquarters in New
York. A lot to cover here out of this
report. Roma and the stock barely
budged.
>> Yeah, absolutely. It was kind of an
interesting reaction because there was
decelerating growth and that was more of
a holistic story, but everybody was
really focusing on the company's
comments here about its ability to sell
its advanced chips to China and quite
frankly to other parts of the world.
Right now they seem to be hamstrung.
There is some concern about whether the
Trump administration will allow that and
to be sure whether the Xiinping
administration would allow that on its
end. And then of course you also heard
from the CFO Klet Crest talking about
this agreement that Trump had announced
earlier this month that if they did
allow Nvidia to sell those chips, the US
government would take a 15% cut of any
revenue. Now that does not appear to
have been a done deal and that did cause
some concern amongst investors. The
shares did drop as much as 3% early in
the session, but a lot of folks came in
and started buying the dip. as you
played with some of those voices a
little bit earlier, that long-term
growth story, at least in the eyes of
investors, is still there. But there is
still political risk, Joe. And I do just
want to turn your attention to two
stories developing here in the after
hours with Caterpillar and with GAP. GAP
just reported earnings, and it
articulated that it is going to see a
meaningful hit to its operating margins
and its gross margins going forward
because of tariffs. Caterpillar which
reported earnings three weeks ago and
was not quite able to articulate how
much tariffs would hurt now today saying
that it has put a number on that saying
it will be in a range of about 1.5
billion to $2 billion on the margin
side. Though we should point out they
say this won't impact their sales
outlook itself but in terms of
profitability there is a big concern
here about some of these policies and
the impact it would have.
>> Wow those are some big moves after
hours. Roma thank you so much. We'll be
talking about this again tomorrow, I'm
sure, at Bloomberg's Roma Bostic in New
York. Joining us now as we widen the
lens on this whole story involving
Nvidia export controls and on a greater
scale, US China relations is Nicholas
Burns, the former US ambassador to China
in the Biden administration, professor
at Harvard's Belelfford Center. Mr.
Ambassador, welcome back to Bloomberg TV
and Radio. It's great to have you. It
seems all roads lead to China. We're
talking about Nvidia or new tariffs on
India. So, let's start where we're
already talking and that's export
controls and this idea of Nvidia opening
once again a new market in China.
There's even reporting today that Nvidia
is talking about a Blackwell chip that
might be available, scaled down version
for the China market, but there's still
no deal and from what we understand, no
licenses to begin reselling these AI
chips in China. Will it happen?
>> This is going to be a consequential
decision for the Trump administration.
uh US policy for several years now, for
three years, has been to deny to China
those dual use exports like advanced
chips for AI purposes that might then
help the people's liberation army to out
compete the United States military in
this ferocious competition for military
technology power that's underway and
that will in many ways define the
relationship. And you saw when President
Trump permitted the sale of the Invidia
and H20 chip, the Chinese government
turned around and said that they had
problems even that they might not give
authority to Chinese uh companies to
purchase the chips because they
suspected these chips could be
problematic for them. And so now you
have a second decision coming up by the
Trump administration. I certainly hope
that the Trump administration will be as
tough- minded as President Biden was.
deny this technology to China because
it's far more important that the United
States weaken the People's Liberation
Army and not strengthen it by allowing
the sale of an advanced chip.
>> Well, you know, if you talk to Jensen
Wong about that, he would tell you that
that only strengthens Huawei and in fact
strengthens China's hand to sell this
type of technology if it were to catch
up with the United States to other
countries. Do you believe that we're
mortgaging our national security by
selling this technology?
Oh, I believe that there would be a
great injury to our national security if
we sold this technology. We certainly
realize and in 2022 when the Biden
administration put in place these
stringent export controls, we understood
this would be problematic for those
American chip producers exporting to
China. But there's something more
important at stake here. The national
security of the United States, the
balance of military power between China
and the United States. And while
certainly the Chinese have have gone a
long way towards innovating now around
these export controls, we were never
under any illusion they would stop
progress, technological progress in
China, but we would delay progress and
that has happened. So I think President
Biden's initial decision nearly three
years ago now was correct and and it's
very important the Trump administration
hold the line. I think you'll hear that
from many members of Congress on in both
political parties, by the way.
Yeah, you'll hear from them right here
on this program, I'm sure. As we
consider what some would describe as an
economic cold war here, or at least a
trade war uh with China, the prospect of
pushing India closer to China has been
on the table this week with now a 50%
tariff that the US has put on India.
Half of that was added as punishment for
India buying Russian oil ambassador. I
talked about this last evening with
Peter Navaro, the White House senior
counselor for trade and manufacturing.
He made a lot of news not only here but
in Delhi today with his answer what he
said about India's prime minister Modi
and his culpability regarding Russia's
war in Ukraine. Let's listen.
Everybody in America loses because of
what India is doing. the con consumers
and businesses and everything lose and
workers lose because India's high
tariffs cost us jobs and factories and
income and higher wages and then the
taxpayers lose because we got to fund
Mod's war.
Mod's war was the headline on the front
page of every major newspaper this
morning in India and it led all of their
newscast when he said that last evening.
It was considered an insult and framed
to be inaccurate. What do you make of
this rhetoric coming from the White
House?
>> I think it's unfortunate. I also think
it just doesn't make a lot of sense if
you look at the history of the US India
relationship. You know, we have this
historic competition with China underway
really for which of us is going to be
the strongest country in the Indoacific
and in the world in the future. India
has been now for 25 years one of the key
strategic partners of the United States.
Every American president, starting with
President Bill Clinton, Democrat and
Republican, has believed, and this
includes President Trump in his first
term, that of we've got to get along
with India. We've got to strengthen our
military partnership because that's that
strengthens our ability to leverage
China and to make sure that China um is
hemmed in in its territorial ambitions
on the India China border in the
Himalayas, but also in places like the
South and East China Sea. So, I
understand that the Trump administration
believes in this policy of high tariffs,
but when you exact these high tariffs on
India, Japan, South Korea, the European
Union, you're weakening our natural
coalition of countries that want to be
with us uh in in terms of going up
against the Chinese and limiting their
power. But it's difficult to do when
you've got 50% American tariffs on
Indian products coming into the United
States. Every country has domestic
politics. Every leader.
>> Well, just like that in
>> President Trump and Prime Minister Modi
have domestic politics.
>> It's already happening. We're reporting
that in March, Beijing began quiet
outreach uh to India. President Xi wrote
a letter uh to test the waters on
improving ties. I have less than a
minute and I don't want to cut you off,
ambassador, but is is where does this
end with this letter?
I well you know the there's going to be
an historic meeting between President
Xiinping and Prime Minister Modi on
September 3rd in Beijing and this is
this is a step backwards a major step
backwards for the United States because
we had we since the end of the '9s long
time ago we've established this true
partnership with India and now it's at
risk because of this misguided terrorist
tariff policy by the the Trump
administration.
There you have it from Nicholas Burns,
the former US ambassador to China and
the Biden administration. Ambassador,
thank you for your insights. I'm Joe
Matthew in Washington on Balance of
Power. This is Bloomberg TV and Radio.
She was not aligned with the president's
mission to make America healthy again.
Um, and the secretary asked her to
resign. She said she would and then she
said she wouldn't. So, the president
fired her, which he has every right to
do. The president has the authority to
fire those who are not aligned with his
mission. A new replacement will be
announced by either the president or the
secretary very soon. and the president
and secretary Kennedy are committed to
restoring trust and transparency and
credibility to the CDC.
>> This is Balance of Power on Bloomberg TV
and radio. I'm Joe Matthew. That was
White House press secretary Caroline
Levit today at the White House briefing
talking about the president's decision
to fire the director of the CDC. Now,
news on who is serving as interim CDC
director. just out tonight with
Bloomberg confirming Jim O'Neal, current
deputy HHS secretary and former close
associate of Peter Teal will be stepping
into that role. This news coming just
moments after CDC staffers were seen in
the streets of Washington staging a walk
out in solidarity with managers who
resigned in protest. Joining us now with
the latest details surrounding the CDC,
the Health and Human Services Secretary
as well, RFK Jr.'s plan to upend the
agency is Bloomberg's Madison Mueller,
who's been all over this story for us.
Madison, it's great to have you back
this evening. I guess we do have an
interim leader in place. And after what
we heard from RFK Jr. today, that the
CDC was somehow not in line with the
Trump agenda, we ask tonight, what is
the Trump agenda for health?
I mean, that is a really good question
because only a few months ago, um, RFK
Jr. was actually tweeting that he
handpicked, uh, Susan Monores to serve
in the CDC role and that she was someone
that was very much aligned with the MA
agenda. So, clearly something has
changed uh, within the last few months.
And what we're hearing transpired over
the last week or so is that there was a
confrontation or a clash over uh,
vaccine policies and that Dr. Monresz
was not willing to uh take steps that
RFK wanted her to take and to um sort of
accept the recommendations that ASIP
which is a vaccine rec vaccine advisory
group uh made for the immunization
schedule going forward and didn't want
she didn't want to blindly accept those
recommendations and so it it's led to
obviously some fallout the last few
days. Uh we've had we've seen several
senior leaders from CDC depart as well
within the last day. Um and hearing
about potentially more uh staffers that
are leaving as well.
>> Yeah. One of them included the CDC's top
immunization official, Dimmitri
Dascalakis, who put up a doozy of a
resignation letter that was made public,
saying in part that the new HHS
policies, quote, do not reflect
scientific reality and are designed to
hurt rather than improve the public's
health. That's a direct quote. With that
in mind, then what does this new interim
leader think about vaccines?
>> Yeah, so Dr. Dr. O'Neal or sorry not Dr.
O'Neal, Jim O'Neal has actually said
that he is in support of vaccines. Um
there was a confirmation hearing for him
to become deputy HHS secretary a couple
of months ago and during that hearing he
said that he was very much in favor of
vaccines and thought that they were an
important part of the human health
story. Um and so it remains to be seen
what he will do and sort of what
policies he'll impart in this role. I
mean, he is going to be acting CDC
director, which means I mean, again, we
were speaking about this yesterday. CDC
director is now a Senate confirmed role.
So, he will would have to go through a
Senate confirmation process um to be CDC
director. And as of right now, he's just
acting CDC director. So, there might be
someone else that ends up coming into
this role, but as of right now, that's
what we're hearing. Uh that's who we're
hearing is going to be taking the helm.
>> Understood. Bloomberg's Madison Muller
with the very latest on this. Madison,
thank you again. Joining us now for more
insights here, Dr. Nahed Bedellia,
founding director of Boston University's
Center on Emerging Infectious Diseases.
She also served as a senior policy
adviser for the global CO 19 response
for the White House from 2022 to 2023.
Dr. I want to welcome you to Bloomberg.
It's great to have you here this
evening. There's been a lot of talk
about credibility at the Federal Reserve
and some other uh independent agencies
here in Washington that have endured
pressure from this administration if not
outright firings in this case at the
CDC. What is going on in that building
and what will it mean for the
credibility of this agency?
>> Yeah, Joe. I mean I think yesterday and
the last two days events come in the
setting of a whole series of things that
have destabilized science and federal
public health infrastructure here in the
US. Right? 25% of the employees at the
CDC were gutted. Entire divisions have
been removed. Most recently we heard
that food safety division was removed
which makes no sense because I believe
one of the major tenants of MA is safe
nutritious food. Um and and now we're
seeing and and then you also see entire
cuts to budgets to science. My concern
is, you know, in the setting of the
firing and and what we're seeing in the
resignation letter that there was a
pressure that the political office of
the HHS secretary is influencing health
policy and then trying to backs stop
policy decisions with science that
doesn't exist or you know what science
can't back up that that itself hearing
that is going to lead to just not just
distrust among the public but
potentially a shadow of doubt among
health professionals who are responsible
for carrying out that policy,
>> which could be pretty dangerous. What do
all of these departures mean? It's not
just the CDC director. There were a
handful of major resignations uh by CDC
leaders today as well. What kind of
brain drain will this bring to the
agency?
>> Yeah, this is the latest and and really
a deep cut. You know, Dr. Descalakis and
I actually worked at the White House
together. He was the deputy director of
the EMPOX response while I was with the
White House COVID response team. And
he's a he's an incredible long-term
public health advocate, but also
somebody, as you said, brings this
institutional memory. We're losing
decades, you know, add additively
centuries of experience from our public
health agencies, not just at CDC, but
also at the FDA and the NIH that we've
seen in terms of layoffs, the, you know,
the reassignments. Um I and the other
part of this you can say we're we're
casting doubt on the performance of our
agencies which is which are by the way
it filled with incredible dedicated
career scientists who have been doing
this regardless who the administration
is for a very long period of time but
and at the same time what you're seeing
is all these external advisory
committees um and groups like the uh the
ASEP the advisory committee on
minimization practices or the FDA
committees all of those are being gutted
and replaced by those who don't have
qualifications and those who have
expressed uh doubts and and sown
distrust in vaccines and that will also
expand distrust in both public health
but also vaccination.
>> Okay. I want to ask you about the
broader uh agenda then which we're
trying to define and this morning uh it
came about on Fox News. RFK Jr. the
secretary uh did an interview and talked
about this whole situation at the CDC.
Here's what he said.
So we need to look at the priorities of
the agency if there's really a deeply
deeply embedded I would say malaise at
the agency and we need strong leadership
that will go in there and that will be
able to execute on President Trump's
broad ambitions.
Jim O'Neal presumably part of that
strong leadership but there are people
in Washington who are asking questions
including some on Capitol Hill. doctor,
look no further than Senator Bill
Cassidy, of course, also a doctor,
taking to Twitter to say, "These
high-profile departures will require
oversight by the help committee, which
of course he chairs." Will there be a
congressional response? Will there be
any other guidepost here beyond the
administration itself?
>> Honestly, one can only hope, right? I I
I think that we spoke about the
devastation that you're seeing in terms
of the loss of the public health
infrastructure and then the lack of
trust, but there aren't many other
things that can backs stop that kind of
response, the government science um
plays. The White House's role maybe to
provide broad priorities of course for
public health and an investment, but its
role is not to dictate science. That's
really where the federal scientists play
a role. I I think we just talked about
uh Mr. O'Neal. I think one of the I I
don't know anything about of course his
own background, but of course one
concern that one might have is that this
is a person who's very close to uh
Secretary Kennedy and one of the reasons
Susan Monores was fired was that she did
not agree to go with a dictated policy
handed down that was not based in
science. Or do we then say that someone
who's close to the secretary will do
that? And and remember the confirmation
process may take some time and this
person may be in that position for for a
bit.
>> Well, there's going to be a hearing next
week. It might not be before the help
committee. RFK Jr. will sit before the
Senate Finance Committee. And I suspect
that this whole conversation uh just got
a lot more interesting. What will we
hear from Democrats? What question
should they be asking when he testifies?
>> Yeah, I I think the the biggest thing is
what you just laid out. What is what is
the health policy of this
administration? Is the policy just to
gun? Right? Which is what we're seeing.
We haven't seen a we have this uh you
know in in theory a maja policy is
actually a great thing. We are one of
the unhealthiest industrialized nations
with our obesity rates and chronic
diseases. Wonderful to work at on those
things. But how can that be achieved by
completely destroying the public's trust
and the infrastructure that we have to
work towards that? Um, and also
reflective of, you know, what Secretary
Kennedy said, asking him about what his
intentions are in terms of filling those
missed posts, the the the loss of the
people that we've seen now. Will he now
also aim to fill those positions with
people who are not scientists, who don't
have qualifications. Um, he's
responsible for the nation's health. And
and Jim, I got to say, you know, I'm
I've been around enough that I' I've
hear that commercial that says if you go
to you go to my Nikki, you get a
muffler. what do we expect? We selected
antivaccine
uh advocate and this is exactly what
we're getting which is the main policy
of this HS seems to be to limit the
access of vaccines for the American
public.
>> Dr. It's been great to have you Dr.
Nahid Badelia former senior policy
adviser for the global co 19 response at
the white house in 22 and 23. We thank
you for the insights. Coming up, pending
home sales falling for a second month in
July as potential buyers bulk at still
elevated prices and borrowing costs.
We'll have details. And President Trump
says he's considering a midterm
Republican convention to rally support
the GOP ahead of the elections. We'll
discuss implications with our political
panel next. This is Balance of Power on
Bloomberg TV and Radio.
This is Balance of Power on Bloomberg TV
and Radio. I'm Joe Matthew. Thanks for
joining us. We'll have a lot more on the
developments out of Washington regarding
the Fed, the CDC, and a lot more ahead
with our political panel. First, some of
the stories we're watching in today's
Power Brief. While the president
threatened substantial tariffs on
countries that impose digital services
taxes earlier this week, Bloomberg now
reports Meta CEO Mark Zuckerberg met
with Donald Trump late last week to
discuss the threat of these taxes in
countries like France, Italy, and the
UK. It's not the first time the Facebook
co-founder has sought to exert his
influence on the White House. Zuckerberg
has increased his presence in DC as of
late, purchasing two homes right near
the Naval Observatory and bringing
several Trump allies into his company
and board of directors. Pending sales of
existing homes in the US fell for a
second consecutive month in July as
potential buyers bulked at still
elevated prices. Borrowing costs
consistent with a sluggish housing
market. An index of contract signings
slipped 4/10en of a percent last month,
right around where it's lingered for
much of the year, according to the
National Association of Realtors.
Despite some improvement in inventory
and housing affordability, interest
rates of course remain high, double what
they were at the year end 2021, leaving
buyers hesitant, making for some of the
lowest home sales since 2011. The
president is now floating the idea of
something not seen since the mid1980s, a
pre-midterm
Republican national convention, posting
on Truth Social earlier today that
quote, "Based on the great success we
are having, we are poised to win big in
the midterms." We should note the
president's posts came one day after
Axios reported senior Democratic
officials were considering the same as
they try to ramp up their bid to take
back control of Congress. Joining us now
with their reaction to this story and a
lot more today this evening's political
panel. Republican strategist Matt Gorman
is with us. Executive vice president at
Targeted Victory and Democratic
strategist Arshik Sadiki, founder CEO of
Bellweather Government Affairs. It's
great to have both of you with us.
Thanks for being part of our
conversation. Matt, I'll start with you
as our Republican. Does the RNC really
need another RNC?
>> I mean, it was good seeing you out in
Milwaukee a couple last year, Joe, so
why not? Um I I think Yeah. No, look, I
think it's actually pretty smart. Look,
you it draws attention to your party in
advance. It also look what has been the
biggest problem for Republicans in off
your elections in the Trump era. It's
getting our base out. So, if they're
they're tuned in, they're engaged. I
think that's very helpful. One other
thing, too, is in the Trump era, it's
very top down. So, unlike Democrats who
might not want Zora Manni and Joe
Mansion in the same place, we don't mind
having Trump and some of our swing
people in the same place. I think that
make it makes sense strategically, too.
Well, I'm sure Kid Rock will have a
piece of that action. I have to ask you
uh Arshie about the the big beautiful
bill when we consider the midterms and
the way that that's playing around the
country. Earlier this week during the
president's cabinet meeting, President
Trump discussed the name of the bill.
He's no longer calling great big
beautiful something. Take a listen.
>> I also proudly signed the largest
workingclass tax cuts in American
history. So, the bill that uh I'm not
going to use the term great, big,
beautiful. That was good for getting it
approved, but but it's not good for
explaining to people what it's all
about. It's a massive tax cut for the
middle class. It's a massive tax cut for
jobs.
The issue is, Arshie, people are having
trouble understanding what is in such a
massive piece of legislation. They're
also hearing reports about cuts to
Medicaid. And so the White House wants
to zero in on the things that poll well.
How did Democrats answer this?
>> Well, I think clearly it's a rebrand.
And so it's a rebrand of a bill and I
think that actually underscores a real
issue in terms of the substance and
unfortunately or fortunately you can't
run away from that in in a big policy.
>> So uh Affordable Care Act, uh tax
subsidies, that's a great example that
those are expiring at the year end of
the year, but premiums are going to go
up starting now. folks are going to
start getting notices because they're
being negotiated now. So, that was a a
concerted decision not to include that
into the package and they chose not to.
They chose to double down on on tax cuts
for millionaires and billionaires. So,
these policies are going to start um
unfolding and so I think and we've seen
this with tariffs as well as you know
>> and this is what we're going to be
talking about for the balance of this
midterm election cycle even though we
have some contests uh before we get that
far. And of course, lawmakers need to
get back to work next week. Uh Matt,
they're going to be talking about
funding the government, and it is the
very big, beautiful bill that we're
talking about that's creating the
problem was followed by a recisions
package as well that basically destroyed
trust between Republicans and Democrats
on Capitol Hill. Are you going to come
back here in four weeks when we're
talking about a government shutdown?
>> Uh yeah, I think we might be talking
about government shutdown. I don't think
we'll get there. I think Democrats
instinctively want to keep the
government open and Republicans being in
power have every incentive to do that as
well. I also wouldn't take off the table
another recisions package. I think the
as I understand it the plan is to keep
doing the recisions packages till they
can't pass them anymore. And I think
they got the first one done. I wouldn't
be surprised if they try for another
maybe after they figure out what the
funding looks like in the government at
the end of the month. But I think we're
likely to have another recisions package
as well sometime into the fall.
>> Wow. Another recision package would mean
what for funding the government for ever
cutting a deal over appropriations.
>> I think it's a poison pill in many ways.
I think Democrats will will view it as
how can you cut a deal when uh nobody
can stick to the deal and we've already
seen this once. So I think this is a
real danger and I think it it's going to
forote some some real issues. I think
also Republicans really take advantage
of this notion that and it and there and
Matt's exactly right. Democrats do
always want to do the right thing, keep
the government open, but at some point
if you can't trust your negotiating
partner, then you know some some there
has to be consequences. At some point,
>> you expect to shut down. Would Democrats
do that without a plan to reopen?
>> No, we we're too early for that. I think
Democrats are always I mean, Matt,
that's why Matt's right. Democrats will
always do what they can to keep things
going and in for the good of the
American people. But I also think that a
recisions package would would back them
in a corner. And that's never a good
thing to do in a negotiation.
>> I have to ask you both about it's been
like a episode of the apprentice around
here today, the last 24 hours. Multiple
firings that we're talking about coming
from the White House, Matt, one of them
going through in the form of the CDC
director. But the Fed Governor, Lisa
Cook, is is not going easily. She filed
a lawsuit today and there are questions
about due process. Would it not behoove
this White House to wait for the
conclusion of an investigation to see if
charges were filed to see if there is
wrongdoing?
>> I think, look, I think what we're seeing
right now is a gambit we've seen from
much of the Trump administration, right?
He is going to push as far as he can use
the courts to try and get 100%. If he
gets 60% of what he wants, 30%, it's 30
or 60% more of what he would have had if
he didn't go that way. I think he wants
this battle, though. Look, make no
mistake. You're seeing on several fronts
the, you know, the alleged mortgage
fraud that Cook's accused of as well as,
you know, other notable people that
Trump uh and Trump antagonists, he's
willing to to have this fight uh and put
uh Lisa and other people on defense. So,
this is not the uh end of it. It's
merely the beginning.
>> It sure feels like it. It was
fascinating to hear this morning on
Bloomberg surveillance from John Lee,
the US managing director of Eurasia
Group, former policy adviser to Senator
Mitch McConnell. talked about the
pattern that he's seeing emerge from
this administration regarding federal
agencies. Take a listen.
>> The whole allegation came out of the
FHFA, which has no business randomly
looking into the mortgages of high
ranking federal officials. And it looks
like that's what they're doing. So, I
actually think that's probably an
underrated piece of this is the
weaponization of these federal agencies
uh against people that the Trump
administration doesn't like.
We hear the word weaponization a lot
around here. That's a word that Donald
Trump, in fact, used a lot uh on the
campaign trail and Republicans did with
regard to Joe Biden. How do you see
what's going on here? Is this a
president who's reshaping government uh
to to match his own vision here? You
serve at the pleasure of the president.
That's the way it goes in Washington. or
is he going beyond the line of his own
authority by not engaging Lisa Cook for
instance in due process?
>> Well, I think it's bigger than Governor
Cook, right? because we see these these
repeated examples of I mean basically
creating a culture of intimidation and I
think that is not only a challenge for
somebody like Governor Cook but it also
is is creating this this notion and
we've seen it with universities we've
seen it with the corporate community
everybody keeping their head down and
this whole notion of a a marketplace of
ideas debate deliberation all the things
that make Washington DC vibrant and lead
to better policy those are all getting
getting um suppressed with this culture
of intimidation.
>> Matt, is the president strengthening or
weakening these agencies that we're
discussing with these moves?
>> He's shaping them in his image. And
look, I I would be very very careful, I
think, as we talk about due process for
those that are opposing Trump because
look, the due process could be let's go
to and try and get indictments on
alleged mortgage fraud in some of these
cases, right? I think right now, as far
as I know, he is simply trying to remove
her from position, not going after what
is attentively against the law. So, I
would be very very careful as as people
push due process. He might go for due
process, but it might not be the one
that Lisa Cook and others like.
>> Well, appreciate that. And they seem
like they feel they have a pretty great
case. They're calling this a clerical
error, unintentional, and if you can't
prove intent here, you can't prove
fraud. Yeah, I think um but I think Matt
the way Matt has phrased this I think
that just goes back to the intimidation
piece, right? It's just it it's she has
her legal recourse and even there
they're pushing back on that.
>> So is this not even about getting her
fired? Is this just simply about
thumbming the scale here and putting a
chill across the board of governors.
>> Yeah, absolutely. And because right now
he is he has placed the board of
governors in a position where they are
to cause with some of the economic
issues that American families are
facing. So I think the one good the
president is very successful in in
creating these simple narratives where
he places the blame somewhere else and I
think that that is part of this
narrative.
>> Markets don't seem too bothered by any
of this at least not yet. Matt Gorman,
do you worry about Fed independence as
we discuss all day long?
>> Look, I think markets have priced a lot
of this in it seems like it and it seems
like markets are far more stable than we
give them credit for. You see this on
tariff front, see this on the drone pal
front. Um certainly an attempt to fire
say Jerome Pal. We saw what the markets
would do to that. This isn't even close
to that. Uh but it seems like the
markets are pretty resilient and
especially coming off some of the
economic indicators today on GDP and
inflation. I I I anticipate that to
continue as well. Um Trump pays
attention to the markets very closely.
That seems to be one of the few guard
rails um in his mind to what he feels
like is justified in its power.
>> Yeah, he does seem to pay attention when
they're doing well. Matt Gorman and
Arshie Sadiki, thank you so much. Great
panel, great conversation. It's always
great to have you both. I'm Joe Matthew
in Washington. We urge you to check out
the Washington Edition newsletter to
read up on all the stories we've been
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back here tomorrow. This is Bloomberg.