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At Duke Energy, we're making smart investments to add enough capacity to power 10.5 million more homes over the next five years. It's all part of our commitment to deliver the reliable energy America needs. Learn more at duke-energy.com poweringamerica Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. There you have it. President Trump live in France, speaking for more than an hour off the cuff and for an extended back and forth with reporters at the conclusion of his visit to the G7 in France that taking place in Evian. Live here on Bloomberg TV and Radio with the headline on the terminal, the president saying he may sign a deal with Iran tomorrow or Friday, adding this isn't like in his words, you're sign signing a lease on a candy store corner. He said it's a memorandum of understanding. If it does not get done in 60 days, we go back to bombing. And I don't want to do that. I'm Joe Matthew in Washington. Thanks for being with us here on the Wednesday edition of Balance of Power on Bloomberg TV and Radio. We wanted to give you a full splash there with President Trump in France as we work our way towards another important news conference today. That of course, being with the Fed chair Kevin Warsh, Kailey Leinz at my side with questions, Kelly, about the highly enriched year uranium in Iran. The president saying that technical discussions on its removal will start immediately.
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B
And of course, questions around what Iran will get in exchange for potential concessions on its nuclear program that will be ironed out over the next 60 days. The president, contending when pushed by Bloomberg's Tyler Kendall about sanctions relief on energy products, said that that will happen when Iran behaves. When Iran behaves, he says we will do something at one point during the press conference also suggesting I guess we'll have to give Iran its money back, making the case that Iran's not going to get direct payments of US Funds but unfrozen assets.
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A different story suggesting that the US Took a lot of their money, he said, but also returning repeatedly to the idea of resuming strikes if necessary. He also had some tough words for Israel and Benjamin Netanyahu, specifically saying we had an amazing partnership. He's an amazing prime minister, but a dispute over Lebanon and I say you can do a little softer touch.
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B
Yeah, it's a lot to unpack. And I'm glad to say that we can do so with Republican Senator Bill Hagerty of Tennessee, who is joining us now live from Capitol Hill on Bloomberg TV and radio. Senator, welcome back and thank you for your patience as we heard many words from the president there. I would love your take on this memorandum of understanding with Iran as you have been on this network many times during the Biden administration, criticizing President Biden for not having stronger financial restrictions around Iran via sanctions and other means. Does it sit well with you, the notion that we could soon have an easing of sanctions and a releasing of frozen assets?
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C
Kelly it certainly does if that's in exchange for actual performance. And if I can contrast this to what happened during the Obama Biden administration, if you think about what they did with the jcpoa, they essentially bribed and paid off the Iranian regime, which turned into funding for terrorism. What President Trump is doing is he's forcing the Iranians to pay for the terrorism that they've conducted. If you think about where the Iranian regime is right now, their nuclear stockpile is under a mountain. Their navy is at the bottom of the sea. They have no control of their airspace. They're in a fundamentally different place with respect to their economy. It's in ruins right now. This is a very different situation. And Iran has every incentive now to perform in my understanding. I've spoken with the White House about it this week. This will be a pay for performance type of structure, meaning they're not going to get any sort of relief until they've actually demonstrated concrete performance. Right now we're at an MOU stage. This is not a treaty. This is an opportunity. Lay out the details, work out the details. It's going to be complicated, I think, particularly with respect to the nuclear material that you're talking about. But there's going to be a path now to work that out. And I hope that the Iranians will realize President Trump is dead serious about this, as all of us are here in Washington.
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A
Important what you just said about the mou, Senator, does that suggest then that Congress would not play a role until this was a formalized deal and then would sign off on a treaty, as you put it?
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C
Joe that's correct. An MOU is just an agreement to move forward. It's an understanding to try to get to a point that we might actually have a treaty. But until that point occurs, Congress doesn't have a role to play right now. This is just a next step, if you will, for the administration to engage more deeply and in more specific actionable terms about what the Iranians must do in order to see their economy begin to move back in the right direction.
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What about what the Israelis must do? Senator, we just heard more from the president around the issue with Lebanon and the divergence we see between what this administration would like versus the Netanyahu government in Israel. How does that get reconciled if Israel still believes it is facing an existential threat?
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Kaylee, this is something I think is at the, at the very heart of the challenge that we're trying to deal with right now. And the question is whether Iran can actually control Hezbollah. If you think about it, Hezbollah has been like the sword of Damocles over the Israeli government there, over the Israeli economy because they're there in Lebanon, you know, intermittent str on a constant basis. The Israelis certainly have the right to defend themselves. That's what they've been doing. President Trump, I don't think is suggesting that, that the Israelis stand down if the Iranians can't control Hezbollah. I really want to wait to see what the details are. Let's see what the MOU has and where we actually get over the course of the next 60 days. But this certainly is going to be an area that's going to require a lot of attention.
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Senator, what's going on with the dni? I'm looking at a tweet from Senator Tom Cotton who says it's regrettable the President has directed Jay Clayton not to appear at his confirmation hearing today. And indeed, that was the word from the president overnight on Truth Social. Will Bill Pulte end up being the Director of National Intelligence? And what does this mean for the renewal of fisa?
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C
Well, I think the president has raised a number of concerns and I understand his frustration with respect to the withdrawal, and I should say it's a postponement of Jay Clayton's appointment. I can certainly understand why the President wants to make certain that the second District of New York that is filled. You think about what's happening there. It's the most critical Attorney General's position in the United States. That's where the trimadoro. That's where a number of very difficult cases are brought, cases that directly affect our national security. This is why Jay Clayton is such an excellent candidate long term for dni. But President Trump clearly wants to make certain that that position is filled. I think he's deeply concerned that President Schumer will. I'm sorry, that that leader Schumer will try to block the president in terms of his next nominee. A highly again from Sullivan and Cromwell that he wants to see replace Jay Clayton. That needs to be done. He's basically making sure he's got the insurance to do it. What does that mean? That means Bill Pulte be in a position to move into DNI on Friday. That's my understanding, is how it will move. And again, there should be every incentive then for this for the Senate to confirm the Next, the next U.S. attorney for the Senate District Manhattan for the 2nd District.
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A
We want to get into the Fed here, Senator, but do you agree with the President's assertion that Republicans fell into a trap by setting up this fast track to prevent essentially Pulte from becoming dni?
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C
I don't, I don't know that there, there's a trap here. But again, I think the President is looking at the situation as it stands. He sees zero cooperation coming from the Democrats right now. They've done everything they can to lock up the government, to make it nonfunctional. I think they're going to try to shut down the government at the end of September. That seems to be their playbook is ultimate chaos. There's been an agreement here and I think President Trump wants to make certain that we don't confirm before we get the actual on the other side from the Democrats. So I understand his frustration.
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B
Well. So there may not be a confirmation vote for DNI in the Senate this week. There may, though, be a vote on bipartisan, bicameral housing legislation. Senator, are you happy with the compromise that was reached between your chamber and the house on the 20th 21st century road to Housing Act?
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C
The majority of the Senate did. The vast majority, frankly, it had. It came out yesterday. We voted it through with overwhelming support.
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Support.
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I think we're in a position now to see it on a bicameral basis. We have unity between the House and the Senate. So this bill is going to move forward with a large degree of support on both sides.
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A
It's Fed day. You, of course, introduced the now chair of the Fed, Kevin Warsh, at his hearings on Capitol Hill, his confirmation hearing. Senator, I'm wondering what you think about the, the rock in a hard place that he finds himself in with, of course, the president on one shoulder asking for lower interest rates. And I know that was his charge at one point. And we'll have that opportunity eventually. But the price pressure that we've seen, in part because of the war in Iran has made that very difficult. We've already seen the bond market reacting with interest rates. And I'm wondering what you'd like to hear from him today when he meets with reporters and issues his first policy statement.
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C
Well, Joe, I think the market is largely priced in no action today. I think the question is what happens in the future? And I think that's going to be the real, the real question in my mind is how does Kevin Wash, our new Fed Chairman, handle his communication about the future? He's been critical of communications in the past, the Fed being too engaged in sending forward messaging. So it'll be very interesting to see how he looks at it today, how this first press conference goes. But I'll say this, he's got a number of variables to examine here. If you think about what the President just covered in his press conference, energy prices are, as they said, plummeting. If you look at the, if you look at the futures markets, there's definitely an expectation prices are coming down dramatically today, and the expectation is they'll come down far more in the future. As we get more clarity around this memorandum of understanding, we get to a final deal, I think we'll see even further downward pressure on energy. There are a couple of other aspects that I think are inherently deflationary. If you look at where we're going with I. The, the actual opportunity for productivity increases, that again suggests that we could see more on inflation in the downward direction. And frankly, the deregulatory efforts that are underway here are very, very significant in terms of being deflationary themselves. We're removing trillions of dollars worth of compliance costs that have been imposed upon this economy by the previous administration. The estimates are anywhere between 4 and 8 trillion dollars worth of compliance cost that the Biden administration imposed upon America. Those are being peeled off. The economy is being liberated as a result. So I think that there are inherently a number of deflationary pressures. When will that happen again? The markets today have a rate increase priced in by the end of the year. I could see, you know, I could see Chairman Marsh being very cautious about how he handles this press conference today because there are a lot of variables in play. And I could see certainly downward pressure. The question is, when does that really take hold?
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B
Well, we're all looking forward to hearing from Sharon Warsh this afternoon. Senator, before we let you go, I also have to ask you about the Clarity act, the market structure legislation for cryptocurrencies. We're still seeing a debate between the banks and crypto companies around stablecoin rewards programs. How is this ultimately going to shake out? Senator, when can clarity move forward?
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C
I think that we've got a number of pieces. Again, the Housing act is moving right now. That's a Banking Committee product. My expectation is that we are going to continue to focus on clarity, probably getting to it in the July time frame. I certainly like to see this done before the August recess takes place. I think the ecosystem here in the marketplace in America needs to see this. We've moved significantly down the pike with the digital asset legislation that I sponsored last year. The Genius act that put America in the driver's seat in terms of, you know, modern payment systems. It puts the American dollar in the digital arena. It makes certain that America continues to lead. When we have a stablecoin that is dollar for dollar backed by U.S. treasury securities. What we need to do now is expand that, that clarity, expand that governance system so that it's very clear what happens here in America that people have confidence to continue to invest in this technology that has great innovative capacity. So I'm very hopeful that we'll get to it in a matter of weeks.
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A
If it's not done by the end of July, is it on to next year?
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C
Joe? It's not clear. Certainly we'll be back in session in September. I just think the closer we get to an election, the more difficult it is to get anything accomplished here for that before.
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Senator, it's great to see you and thank you for joining us on Fed Day. We'll of course be listening closely when the chair does, in fact, meet the Press. Bill Haggerty, the Senator Republican from Tennessee, with us live on Bloomberg TV and radio. And as we work our way closer to our special Fed coverage, we want to check in with Bloomberg's Tyler Kendall. She's still in the room at the G7 now that the President has just left with his top lieutenants, the Secretaries of Treasury, State, Commerce with him as he answered questions from reporters, including Tyler Kendall. Now, Kelly just referred to the question that Tyler had for the President of the United States moving forward with the lifting of sanctions. Tyler, do we expect this MoU to be signed tomorrow?
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D
Well, Joe, President Trump told us reporters in the room it could be signed tomorrow, it could be signed the next day. We're still waiting on that official confirmation from the White House as well as the official confirmation on what is in this finalized text. Now, as you mentioned, I had the chance to ask President Trump a few questions, including when it comes to whether we will see any sort of assurances that the US Was able to receive that Iran will not charge what Iranian state media is calling fees in the Strait of HORMUZ after that 60 day extension, our understanding is there are assurances around being a toll free waterway for that first 60 days. And he told me in part, quote, the thing that's going to stop them from doing that because you can't cover everything in a document is common sense. They don't want to get bombed, they don't want to get hit. So it doesn't seem like we will actually get anything related to fees in the long term security of the strait in this document. Then when it comes to those sanctions, I asked him if he could confirm that Iran will get that immediate relief to get their crew to market off the heels of some incredible reporting from Bloomberg News yesterday. And he didn't confirm it, he didn't deny it, but he did reference this idea that Iran does need to see sanctions lifted in order for their country to rebuild.
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B
Yeah, he, he suggested that they'll be lifted once Iran does something. Tyler, just quickly, obviously the president was lukewarm as to whether or not he was going to stick around in Europe for the signing ceremony. Do we know firmly what is on his schedule when he's supposed to return home?
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D
Well, Kelly, at this point we know that tonight he's going to head over to Versailles and have a dinner with President French President Macron and his wife. He did talk about that, said he's excited to go to that visit. We know that the pair of leaders have a lot to discuss beyond just the conflict in Iran, including President Trump's threat of a 100% tariff on French wine if France does not drop its digital services tax, as well as what is happening when it comes to artificial intelligence. These leaders met with big tech CEOs earlier today, including Open Air and Anthropic. I was in the press conference earlier with the French President, Macron. He didn't directly answer the question about whether or not France is seeking to access Anthropic most advanced models amid a recent ban from the Trump administration. Joe and Kelly, I bet that might come up over dinner tonight night.
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All right, Bloomberg's Tyler Kendall live in Evian, France, after that long press conference from President Trump. Thank you so much.
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Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at Noontime Eastern@Bloomberg.com at Duke Energy. We deliver reliable energy that powers lives, grows businesses and transforms communities. That's why we're making smart investments to add up to 14 gigawatts of new capacity over the next five years. That's enough to power 10.5 million more homes. Putting customers first Advancing American progress Powering the next generation learn more@duke-energy.com Powering America
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