David Westin (2:39)

Interesting and important inflection point next week that Tyler points out. I'll have to ask you as well about Iran, Tyler. The president was asked in the driveway, Iran not negotiating in good faith and conscience. That does not make us feel like strikes are off the table. What are you hearing?

Tyler Kendall (2:56)

No, Joe. The president said he's not happy with how Iran is negotiating with tracks with a person familiar with Washington's position telling us that special envoy Steve Wyckoff and the president's son in law Jared Kushner emerged from the third round of talks in Geneva yesterday disappointed with the progress. That is a much different tone than what we heard from Iran and the mediators. Oman that had struck a more optimistic tone. But the thing is we know that there are just so many such big disagreements at this point. Of course, the main focus of this round of talks are the Iran's nuclear program and there are disagreements about how much domestic enrichment capacity, if at all Iran should be allowed to have. But we have repeatedly heard from US Officials that they need to see some other agenda items on the table, including Iran's ballistic, ballistic missile program as well as its support for proxy militia groups. There's a few different developments that happened just today that could throw an extra wrinkle into these talks, including Joe Bloomberg News reporting that Iran has been conducting extra activity at these uranium enrichment sites that were bombed last summer during Operation Midnight Hammer. That's according to these UN atomic inspectors that haven't been allowed to examine these sites. And it is raising some big questions about what is ultimately happening at the negotiating table.

David Westin (4:13)

He's going to Palm beach for the weekend, Tyler. That's the plan from Texas to Florida.

Tyler Kendall (4:20)

That is what is on the official schedule as of now. So we'll keep our eyes out for any developments. You mentioned President Trump heading down to Texas. This is part of that domestic tour as we are here talking about foreign policy. But we know that the White House over the past week with the State of the Union has been trying to refocus that narrative around domestic policy and affordability concerns. He's going to be speaking at an energy cost event. But then also we'll be keeping our eyes if we get any sort of endorsement for that hotly contested primary that we are all watching to see how that one shakes.

David Westin (4:50)

That'd be huge. John Cornyn is on the plane with him. Tyler, I, you know, listen, maybe they'll have a moment. Maybe this will be different by the time they land. Bloomberg's Tyler Kendall, you need her on that Wall. She's our Washington correspondent on the North Lawn of the White House and doing a great job. As we consider the president's next moves with Iran, he may have to deal with Congress. Then again, I don't think Republicans are much in the mood for and even some Democrats, asked Josh gottheimer, are not in the mood to support a war powers resolution. One man who is we spoke with last evening on balance of power, Congressman Jake Auchincloss, the Democrat from Massachusetts, notably a Marine Corps combat veteran who served in Afghanistan, was not mincing words. Here's what he said.

CBS Sunday Promo Announcer (5:31)

If the president wants to engage in coercive diplomacy against Iran in order to

David Westin (5:36)

prevent it from acquiring a nuclear weapon, ballistic missiles, or to continue funding of

CBS Sunday Promo Announcer (5:42)

proxy terror forces, I think that's appropriate

David Westin (5:45)

and I support that course of diplomacy. But if he thinks he's going to use American warplanes to conduct an aerial strike, he needs Congress to say so. We'll see about that, as we add the voice of Richard Haass, of course, the president Emeritus, the Council on foreign relations. Mr. Haass, great to have you back as part of our conversation here on Bloomberg TV and radio. And I'm deeply curious to hear what you have in mind as the president just now in the White House driveway says that he is not happy with the way Iran is negotiating, going further to say that he does not believe that they are well intended at the negotiating table. Does this give you pause? Do you expect strikes this weekend?

Richard Haass (6:28)

Look, I have no idea whether there'll be strikes or when they might be. The real question is what is it the United States is asking of Iran? What are we asking when it comes to their nuclear activities? Are we prepared to be serious about asking them to rein in their ballistic missile program, their support for proxies? You don't hear people talking much about protecting the internal opposition. So we just have to decide how ambitious we're going to be. Obviously, the more ambitious we decide to be in what we ask, the less likely we're going to get an agreement. That means we've got to use military force, presumably. Well, then you've got to ask yourself, what is military force likely to accomplish? What are the risks of using military force given how Iran could could retaliate? So the fact that we're happy or unhappy with the Iranians, the first question is what is it we are asking for and how. And how essentially, how serious are we about demanding it?

David Westin (7:26)

Well, as we often have seen with the administration, there's been an evolving sort of justification that began with Protection of protesters. Remember, that was weeks ago. Donald Trump said on social media help is on its way. And he actually took credit for Iran for, for Tehran backing off threats to hang protesters. At the State of the Union, though, Richard Haass, he talked about more than 30,000 protesters being killed. I don't know if they think that we've abandoned them or what they think of the prospect of strikes, but now it seems to be about not acquiring a nuclear weapon. And then we add another log on the fire with ballistic missiles. And is this too much? As the President says Tehran is not negotiating good faith. Is it too much for their negotiators to follow?

Richard Haass (8:08)

Well, again, if we ask Iran to give up every aspect of a nuclear program, their ballistic missiles and the rest, they're going to tell us to take a hike. And they believe that they can put pressure on us. In some ways, they may be bad. They may think they are better positioned to take a punch over time than we can deliver one. There's things they could do to raise the price of oil, given how important affordability is in this country politically. They may be calculating. That's not something this president really wants. So we're still at the stage. I think, yes, we're negotiating, but some of this is also pre negotiating. It's bluffing. And I think, again, using a boxing analogy, again, I think the two sides are still feeling each other out.

David Westin (8:50)

Okay, little rope, a dope, maybe. But I do wonder with the prospect of talks being scheduled for next week, if that matters, based on the behavior you've seen by this administration.

Richard Haass (9:01)

Well, in the past, the United States, last spring, we used force, even though talks were scheduled. So what, you know, what could drive things forward is if the United States thinks that talks are hopeless or that they see activities, as you suggested, possibly taking place where the Iranians were trying to move or hide some important technology. But at the moment, my guess is the President's still improvising. I don't think he's decided what the United States is going to ask for, much less what it's going to do if it doesn't get it.

David Westin (9:30)

Okay, that's what I wanted to get to. Richard Haass believes Donald Trump is improvising, which could be dangerous in its own right. But I guess this is the way he operates. Right. We Talked to Bob McNally, Richard, at Rapidan Energy, who's got a real sense of the potential fallout here when it comes to what Iran might do, whether it's a bloody nose strike or a much longer campaign. Here's what he said if Iran chose to make the Hormuz Strait unsafe, it could do so for weeks. Sort of like back in April when

Richard Haass (10:02)

The Houthis absorbed 52 days of pummeling

David Westin (10:04)

by the US military. And we did not stop them from making Babel Mandab unsafe. Iran has much better weaponry, better coastline than the Houthis. So I can almost see spikes and reversals here. And if it gets to a prolonged Hormuz disruption, well over $100 a barrel. And of course, Iran knows this. Richard, how far do you think Iran would go to retaliate?

Richard Haass (10:25)

Like Iran will go pretty far if it needs to in order to, one, preserve the regime, and two, again, they may calculate that extended conflict where the price of oil goes up, that they're better positioned than we are to hang in there. Look, part of the administration problem is they've amassed all this force, but they haven't really thought it through. I call it an armada in search of a strategy. I really don't think we've thought through where we're going to go with this. And not just what's a desirable outcome. We also have to think about what's an achievable outcome. And I don't hear a lot of people talking about that.

David Westin (11:01)

Wow. You are, of course, someone who is steeped in many years of diplomacy. And I wonder your thoughts about the two gentlemen at the table, specifically Jared Kushner. It's been suggested that his relationship as the son in law to the president, United States, actually brings leverage and credibility. Is that true?

Richard Haass (11:21)

I tend not to talk about people. I focus on policy. No one doubts that both he and Steve Wyckoff have extraordinarily close relations with this president, which makes them both credible. But what matters more than their credibility is what policies are they authorized to advance. And I would keep the focus on that more than personal relationships or anything else.

David Westin (11:44)

Interesting. There have been questions about whether the administration is not only tapping the right people, but is not using enough of its expertise and institutional knowledge in this case. And I guess I would ask you, I know you don't want to talk about individuals in their case, but we have a secretary of state who's going to be on his way to Israel in the coming days. How important will that visit be?

Richard Haass (12:07)

Well, again, I think the Israelis got the message when the prime minister visited the president here a few weeks ago to hang back. The United States wants, I think, a deal, if it can get one, without a. A military exchange. So I think the question is making the Israelis comfortable, providing certain types of equipment, air defense against Iran's ballistic missiles. Maybe we'll reach some understandings about what Israel would do or could do with our support if Iran widened the war and attacked it. But I don't think that's important. What's more important again is what is the United States going to demand, whether Iran will agree. The more ambitious we are, they're not going to agree. And that what we're prepared, prepared to do and how what Iran's prepared to do in retaliation. So Israel's important, but I wouldn't say right now it is, it is central.

Joe Weisenthal (12:59)

Got it.

David Westin (13:00)

When we consider off ramps, Richard, and based on what we've seen the administration do in Ukraine, in Venezuela, even Greenland, Iran knows who it's dealing with. And I wonder if an economic arrangement is how this ends, maybe in exchange for a lifting of sanctions when it comes to critical minerals, when it comes to energy. Is that something that would tempt this president?

Richard Haass (13:23)

I hope not in this case because again, I think the president's right when he talks about a ceiling on Iran nuclear capabilities. The Israelis are concerned about ballistic missiles. I would, I don't want to see happen here what happened in Venezuela where essentially we cut a deal and ignored the population. I don't want to see the Iranian people somehow cast aside simply because the United States wants some sort of arrangement in the, the, the oil sector. So I would hope that that kind of a deal is not on anybody's mind.

David Westin (13:54)

Interesting. What are you watching this weekend? What should our listeners and viewers keep in mind as we go through Saturday and Sunday?

Richard Haass (14:01)

I think to watch more than anything is whether there are activities on the Iranian side that would suggest somehow that time is of the, of the essence, what each side says about the negotiations. But again, this is a crisis. Let's be clear. It's hard to answer your question because this crisis came about without a rationale. It wasn't as though Iran triggered it by its nuclear program or ballistic missiles or proxies. Yes, it did terrible things to its own people. We threatened them, then we did nothing. So two months later, we are where we are. So it's hard to know what to look for next because nothing, essentially, you'd be hard pressed to explain how it is we got to this point.

David Westin (14:44)

When you see Saudi Arabia and Iran both accelerating exports of crude, what does that tell you about the status of talks?

Richard Haass (14:54)

What that tells you is they want to keep some cushion, some stability in the oil market. As you see in oil prices have gone up, what, plus or minus 10% over the last couple of weeks. So the Saudis tend to be, you know, want to stabilize things. And it's a way of also signaling the Iranians that their ability to hook to inflict pain on the world through oil pricing is not as great as they think it is.

David Westin (15:17)

Well, I'll tell you, oil prices are on the move here, Brent, up two and a half percent. WTI is as well. We're back to $67 a barrel almost in Texas, Richard. So investors are certainly paying attention to this and we're awfully glad to have you with us. RICHARD haass, PRESIDENT emeritus, the Council on Foreign Relations. We thank you for the insights as always.

CBS Sunday Promo Announcer (15:36)

This CBS Sunday, it's three incredible heroes on one unmissable night. First, it's the series premiere of Marshalls. Casey Dutton is back in a new era of Yellowstone. Then Justin hartley returns in TV's number one show tracker. When your loved one goes missing, he's the man for the job. Followed by Morris Chestnut in an all new Watson. The series premiere of Marshals, followed by a new Tracker and a new Watson. CBS Sunday starting at 8, 7 Central and streaming on Paramount.

Christina Ruffini (16:05)

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. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130.

David Westin (16:24)

Remarkable. Just days after the Supreme Court ruling, in fact, well, that was a week ago today, wasn't it? A remarkable headline on the terminal. President Trump faces 2,000 tariff lawsuits following the Supreme Court loss, knowing, of course, he's taking actions under different auspices to continue tariffs. But this has been a pretty noisy week. And as they say, send lawyers, guns and money because this is going to be how we spend the rest of the year. No one knows this more than my good friend David Westin. I'm really excited he can spend some time with us in the flesh, the host of Bloomberg Wall Street Week. David, it's great to see you. This has been a huge story for you leading up to the ruling. And I feel like I don't know that we have a lot more clarity than we did a week ago. Do we?

Joe Weisenthal (17:08)

A noisy week, but also an exhausting week for you. I mean, among other things, Also, hour and 47 minutes late night with the State of the Union. Yeah, it's been quite, quite a weekend. And it does include, of course, the tariff issue. But we had on Jason Furman because as you know, Joe so well, in some ways that State of The union was largely the state of the economic union because so much it was about domestic economics that President Trump was talking about. And so we asked Jason Furman, who, after all did. Was the chief economist for President Obama, what he thought about the economy, and he said, it's not the horror the Democrats want to say, it's not the turnaround the Republicans want to. And we asked about the tariff issues that you've identified. Identify, Joe, and specifically, how much difference does that make for the economy whether we have this tariffs or not? This is part of our discussion.

Jason Furman (17:52)

I think it is subtracted a bit from growth and added a meaningful amount to inflation. On the inflation, one is easier to prove. You can just look through the different types of goods and, you know, furniture, consumer electronics, you see those prices rising, and normally you would have expected them to be stable at a time like this. So it really is showing up. Is it a dramatic recession or an apocalypse? Definitely not. In fact, the models never predicted that you would have something that dramatic. But that doesn't mean that we should be blase about what might be tens of billions of dollars of damage to the economy.

Joe Weisenthal (18:32)

Business leaders often talk about uncertainty and how that is really a dampener on growth for them. Whatever the tariff rate is, tell me what it is and I'll deal with it. As opposed to. I'm not sure. There's been a lot of uncertainty, both in the way the tariffs were imposed and now with the Supreme Court decision. Can you approximate what that might mean for the economy? Is it having an effect on the economy?

Jason Furman (18:52)

Probably it leads to some delay of investment, some desire to do things overseas rather than in the United States. The Supreme Court decision, I think, ultimately will give us more certainty because the IIPA tariffs that the president had been doing before, he'd been constantly changing them

David Westin (19:10)

at a drop of a hat. He didn't like the tone of voice,

Jason Furman (19:12)

didn't like a television ad in another country.

David Westin (19:15)

You know, tariffs go up.

Jason Furman (19:17)

The new authorities that he's still going to have, like Section 301, take more time and effort. They're hard to change them on a dime. And so if he wants to have high tariffs, we're going to have high tariffs. He can't quite change them on a whim in the way he was doing

David Westin (19:34)

before under the new legal regime.

Joe Weisenthal (19:36)

So, Joe, as you know, that's Jason Furman, who was the chair of the Council of Economic Advisor under President Obama. He is a professor of economics up at Harvard. And so he basically said, steady as she goes. Although I want to add One thing you will remember because you were covering it, Joe, the President saying we can replace the income tax with tariffs.

David Westin (19:54)

How about that?

Joe Weisenthal (19:55)

And Jason Furman, who's a very, very measured economist, had one word, ludicrous.

David Westin (19:59)

Ludicrous.

Joe Weisenthal (20:00)

He said there's just no way that could ever happen.

David Westin (20:02)

Wow, I'm just a dangle. That out there in a State of the Union is pretty remarkable. I hope they're not going to throw us out of here. James, let us know. But delayed investment were the two words that, that struck me there. Because when you talk about uncertainty, it's as simple as that. Right. President Trump talks about trillions being invested in this country, but how many more have been delayed?

Joe Weisenthal (20:21)

Well, exactly. And one of the questions is what happens with all those deals, supposed deals. We'll see what happens on the investment. Like Japan example, with $550 billion going to be investing here. Well now, when it's not so clear that President Trump had the authority to actually negotiate those under ipa, what happens to all that investment and how material is that? Or will countries decide they just as soon go along rather than have President Trump angry with him?

David Westin (20:46)

Boy. And to the, to the point he made about Section 301, for instance, taking a lot more time. Is Wall street ready for a six month investigation? What's this going to require?

Joe Weisenthal (20:56)

Well, they've had it before and Trump won. And the first version, they had a 301 against China. Yeah. And they go through it and you know, as I say, business can adjust to just about anything. They just like to know what the rules are. And as a practical matter, it's what, about 10, 11% effective tariff rate right now after this all. Yeah, that's on goods. Goods are only 25% of the total economy. So it's not quite as massive as some people have warned in the past. But that cuts both ways. It isn't as bad perhaps as some Democrats would say and as Jason Fervin says, it might not be as good as the Republicans like to believe.

David Westin (21:33)

Way very, very interesting. And I'll be curious to see how Republicans in Congress weather this once particularly we get through primary season. David, is this where the President's going to find the line?

Joe Weisenthal (21:42)

Well, so you would know this better than I, Joe, but it seems to me it's going to be a question of what the constituents are thinking back home.

David Westin (21:48)

Yeah.

Joe Weisenthal (21:48)

If inflation kicks in again and there's a lot of stimulus coming in under the one big beautiful bill act and there's a lot of stimulus coming in if inflation starts picking back up again, a lot of what the president has said about affordability just being a ruse from the Democrats might be uncomfortable for some members of Congress, particularly in the House, going back and and campaigning in their home districts.

David Westin (22:09)

Well, we'll hear and see that full interview with Jason Furman on the program this evening. Bloomberg Wall Street Week with the great David Westin. Great to see you in person, David, here at world headquarters in New York as we assembled our political panel for their take on what we're talking about. And it really just comes down to an incredibly long week in the world of politics. A week ago, SCOTUS Tuesday night, the longest State of the Union address in human history. And we have Rick Davis and Jeannie Shan Zaino to break it down. Bloomberg Politics contributors. Jeannie is our Democratic strategist, democracy visiting fellow at Harvard Kennedy School's Ash Center. Rick is our Republican strategist and partner at Stone Court Capitol. Jeannie, we've talked a lot about finding the line, so to speak, on Capitol Hill. And a number of Republicans have explored, expressed their concern about moving forward with tariffs under various justifications. Whether it's 301 or something different, The Democrats have any say in where this goes. If Republicans aren't seizing on this in Congress, does the legislature stay out of

Jeannie Shan Zaino (23:06)

the mix, you know, unless something happens, as Donald Trump knows all too well in November and Democrats take the gavel or, you know, we, we see Gonzalez moved out and we are looking at an even house. I, there's, there's a, we're so tight in these margins, there's a lot of opportunity. But at this point, you know, the president said during the State of the Union that congressional legislation wouldn't be next. And to me as a political scientist, that's terribly disheartening because he missed the entire message of Neil Gorsuch, his opinion, which was that American government depends on an active legislating Congress, not an active legislating President through EOs and certainly not legislating from the bench. So terribly disheartening for those of us in the political science realm to hear him say that.

David Westin (23:59)

Rick, you work in the investment world. What are you hearing when you have conversations with people about delayed investments? To Jason Furman's point? Yeah, I think it's just a lack of clarity of public policy that, you know, over time you would hope get smoother and easier. And instead, certainly this week it's been incredibly disruptive. And so I think that all, all, you know, investors want is sort of a level playing field and some certainty around policy. And I think it's a good example where we haven't had a lot of certainty around the policy of the Trump administration, especially as it relates to the tariffs. And David's right, they haven't been as punitive as everybody thought they were going to be, certainly not as threatened on Liberation Day as we thought. But at the end of the day, you're making decisions based on years of investment return and, you know, you're seeing changes in public policy on a daily basis. You know, the president came out just this last weekend and said he was going to up those tariffs by 15% post SCOTUS ruling. And it turns out when they were filed, they were only 10%. And so people are making decisions on Saturday would have had a different question than they got on Monday. So in that regard, we certainly haven't had a lot of certainty to work with. And that the truth. And then you start wondering how they feel at the Federal Reserve about this. But, boy, cue the lawyers. Jeannie, this is really something. More than 100 companies have filed new lawsuits since the ruling just in the last week. You talk about finding the line on Capitol Hill. Maybe we're finding the line when it comes to corporate America. These are not small companies. FedEx, Dyson, Dollar General, Bausch and Loan, Brooks Brothers on holding l'. Oreal. The justices, of course, were silent on the refund question. Jeannie, are any of these companies going to get money?

Jeannie Shan Zaino (25:58)

I don't know if they're going to get it, but I think if we step back and look at this from a political, political lens, wildly unpopular these tariffs are, the president has doubled, tripled down on them. And, and now we're talking about this big boon for lawyers who have, you know, filed all these lawsuits on behalf of these behemoth major and smaller companies. And do they get refunds? I don't know. But for somebody who ran promising to help the middle and lower class and quite frankly want one on that, a lot of people when they go to vote in November are going to be scratching their head to say, wait a minute, you're giving back refunds of our tax money to these big companies when that those costs were passed to consumers in many cases, why aren't we getting refunds? Which by the way, is what the president said he was going to do with these tariffs. So this is a huge political mess for the president and the administration as they march into midterms where people are very unhappy about tariffs, inflation and how he is handling the economy. And he's done this to himself, which is the most mind numbing part of this.

David Westin (27:06)

Just 30 seconds left, Rick, will the president regret offering $2,000 checks or promising two dollar checks to all Americans? No, I think that's pretty much overtaken by events. I mean it's such a scrambled deck right now. I don't think anybody has any expectations. But kudos to corporate America. FedEx already has a website where you can apply for your. Yeah.

Richard Haass (27:26)

Return.

David Westin (27:26)

So I mean corporate America will fill this vacuum if the Trump administration smart, they'll just get silent on it. Once again, I think Costco is the first. They're leading the charge on that. Rick Davis and Jeannie Shanzano, great content and great conversation as always. Thank you both.

CBS Sunday Promo Announcer (27:42)

This CBS Sunday, it's three incredible heroes on one unmissable night. First, it's the series premiere of Marshalls. Kayce Dutton is back in a new era of Yellowstone. Then Justin hartley returns in TV's number one show tracker. When your loved one goes missing, he's the man for the job. Followed by Morris Chestnut in an all new Watson. The series premiere of Marshalls, followed by a new tracker and a new Watson. CBS Sunday starting at 8, 7 Central and streaming on Paramount.

Christina Ruffini (28:13)

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.

David Westin (28:29)

Got a Dow down over 600 points. Vix is up, crypto's down. Got to talk to Mike Regan about why Bloomberg managing editor for U.S. equities. Also with me in the flesh. Mike, it's great to see you. The pessimism coming off of this earnings season is something, I guess unless your name is Michael Dell today, it's been pretty much straight down for tech. Even in video with this knock the COVID off the ball report couldn't get investors excited. Is this going to be kind of, if not correction, a digestive phase that lasts an extended period of time?

CBS Sunday Promo Announcer (28:59)

You know, Joe, hard to really predict and say for sure. But you know, you make a good point about it potentially just being a correction. I mean, look, you look at the stock market, it went pretty much straight up from the volatility last April when Trump announced all his tariffs that he later sort of softened all the rates on. But I really think, you know, we've seen this shift in the narrative surrounding AI that's really hard to ignore. You know, it went from being, you know, the big beneficiary of this Nvidia and Alphabet and the other companies really leading the market higher to sort of two different perspectives of pessimism. One, are these companies really getting over their skis too much as far as the hundreds of billions of dollars in capex that they're investing in data centers? But two, you know, everyone is admitting that AI is a truly disruptive technology. So if you look at the biggest losers this month, it's really those software companies.

David Westin (29:55)

Brutal.

CBS Sunday Promo Announcer (29:56)

Yeah, you know, you're into, it's the tax software workday.

David Westin (30:00)

Microsoft.

CBS Sunday Promo Announcer (30:01)

Yeah, yeah, it's just, you know, this vibe coding idea that AI is going to be able to basically replace a lot of these software as a service revenue streams is really alarming. And then you pile on top of that. So many of the private credit companies were heavily invested in software companies. So you're looking at companies like Apollo Global, KKR really getting beaten down this week. You know, on top of that you have Mark Market Financial Services in London, the mortgage company running into trouble there and worries about all their counterparties in the U.S. blackRock's Private Debt Fund cutting its dividend today. You know, I hate to use that cockroach cockroach analogy, but it really is what people are talking about that the cockroaches in this private credit space are really starting to scurry about.

David Westin (30:48)

At the same time though. And I always come back to this point when we talk. If you look at the equal weight S&P 500, it's basically at an all time high.

CBS Sunday Promo Announcer (30:56)

It's amazing.

David Westin (30:56)

How often do you see this much volatility beneath the surface but, but so much stability in the indexes and a rotation that apparently is lifting the equal weight to new heights.

CBS Sunday Promo Announcer (31:08)

Yeah, it's really fascinating. And even on, you know, I don't know about today, but yesterday days we've seen these really big drops in the S&P 500. Most stocks in the index are up and that equal weight index is outperforming by something like 6 or 7 percentage this year. It's remarkable. So you know, it's, it's not so much investors completely giving up on the market but really trying to focus on, you know, some people are calling it the halo stocks.

David Westin (31:34)

That's right.

CBS Sunday Promo Announcer (31:35)

Heavy asset, low obsolescence, meaning.

David Westin (31:37)

That's right.

CBS Sunday Promo Announcer (31:38)

Those sort of energy companies, utilities can't vill those businesses. Yeah, the companies that can't get put out of business by AI. At the same time you're starting to see the valuations in those creep up to somewhat alarming heights. Valuations you're not used to seeing in these sectors. So you're right that the story is more about a rotation. But from the market cap weighted S and P level, it is a downdraft this month, really the worst month. We're poised for about percent and a half, not a disaster.

David Westin (32:10)

One and a half percent.

Richard Haass (32:11)

Yeah. One and a half percent.

David Westin (32:11)

It felt a lot more painful than that.

CBS Sunday Promo Announcer (32:13)

It feels a lot more painful than that. Especially, you know, when you look at some of these individual movers, you know, these software companies that you're used to sort of leading the growth in the

David Westin (32:21)

index really getting hammered, this single stock nightmare. But the indexes are hanging in. Mike, thank you so much. With February under the bridge, well, almost at least. Mike Regan reporting for Bloomberg managing editor, US equities doing a lot more than reporting. And with us here, on balance of Power, this is the part of the program where we get to hang out with the cool kids because the real reason we came here was not for the buddy movie with Charlie Pellet. It was for these two weekends will never be the same at Bloomberg or hopefully for you and your household. You've got the clock set. I already told you, it's at 7am and I'm not going to let something like this pass by without trying to be here, witness it in person, maybe even be part of it. And they were kind to invite me. This is, of course, David Gore at Christina Ruffini. You've heard about Bloomberg this weekend. They've had no opportunities to talk about it on the air. So we wanted to bring him in right now because look, this isn't some wacky variety show or morning zoo show unless you guys.

Jason Furman (33:15)

Surprise.

David Westin (33:16)

Yeah, I didn't expect that at all. But it's actually you guys are covering hard news and Christina, that begins with the Democratic leader of the House.

Christina Ruffini (33:25)

It does. We actually just wrapped that interview this afternoon and we asked a variety of questions. One of the good things about this show is a bit like your show. We've got time to talk to these people. It's not a two or three revolutionary. We've got time to sit down, run them through all the questions you want to ask them. My question for any leader in the Democratic Party is always who is in charge of your party? We asked that and a couple other questions to the leader. And I think we've got, I think we've got that sound for you now. Do you think your party is united enough to hold that line? And who is the leader of the Democratic Party right now?

Richard Haass (33:58)

I'm the House Democratic leader We've got great members of the House Democratic Caucus as well that are leading in a wide variety of different ways. Race it's not my job to make determinations as to who's the Democratic Party leader. What I can tell you is that Democrats have won elections consistently for the last 14 months. And so whoever the leader may be, he or she is doing a great job because literally we haven't lost a meaningful election in the entirety of the Trump administration. Winning races up and down the ballot across the country in places like New Jersey, in New York, in Virginia, in California, certainly during the off year elections last November in Mississippi, in Georgia, three state supreme court races that we swept in Pennsylvania and then went on to win races in Florida, the Miami mayors race for the first time in 30 years. And of course, these special elections that we've seen dramatic over performance most recently in in Texas by 31 points and then in Louisiana, the home state of Mike Johnson and Steve Scalise by 37 points in terms of an overperformance from the Trump number. So collectively we're going to continue to message and communicate to the American people our values. Juxtapose that with the extremism that the Republicans are unleashing on the American people and let the chips fall where they may.

David Westin (35:21)

An emboldened he had all that at the ready.

Jason Furman (35:24)

Seems like he was ready to rattle that off.

David Westin (35:27)

Wow. Boy, what a moment for him as the world predicts a landslide essentially for the House in November.

Jason Furman (35:35)

Well, the world is maybe predicting that he is as well. Of course, he said that at the press conference at the beginning of this retreat that the Democrats in the House had in Lansdowne over these last few days. He seemed to me, and Christina, correct me if I'm wrong, very confident about the path forward here. And the first thing we asked him about was the status of that affordability agenda that he and other Democrats so often talk about. He was prepared as well to kind of tick through what the tenets of that plan are. And you know, a lot of our conversation, which again you can hear in full tomorrow morning, centered on the way that Democrats, varied as they are, are going to kind of unify and convey that message to the American electorate. That of course, Joe, is the big challenge here if this party can stay unified and focused here going into those midterms in November.

David Westin (36:16)

I guess he got some sleep after that two hours speech.

Christina Ruffini (36:18)

Look, and David also really pressed him on whether he would or would not seek to impeach the president if the Democrats take back the House and we're not going to tell you what he said.

David Westin (36:27)

You're going to really. You went there the.

Christina Ruffini (36:30)

I were in.

David Westin (36:31)

You know, a lot of Democrats are very worried about that being the sort of knee jerk because that's the muscle memory from the first Trump administration.

Christina Ruffini (36:37)

There's this debate. Do they overplay their hand? You know, in, in the Biden administration going after Trump, which seemed to embolden him and his base and swept him back into office, are they going to repeat those same mistakes?

David Westin (36:47)

You know, it dawns on me as well, you guys are launching at an incredible moment. We're talking about a potential military action against Iran. You guys also have Berkshire tomorrow, right? Don't you? Have I, was Bloomberg ever been live for Berkshire?

Jason Furman (37:00)

I was told and accepting this assignment there would be no earnings. And lo and behold, they are on Saturday mornings for Berkshire Hathaway. Warren Buffett was of the school of thought that if they came out on a Saturday when the markets were closed, you could go about your day on Saturday and Sunday.

David Westin (37:13)

Three hour thing on TV with the Coke cans anymore if Buffett's not there.

Jason Furman (37:17)

So what we will find out tomorrow is, yes, the quarterly report, the annual report and then the first letter from Greg Abel, who has succeeded Warren Buffett as CEO. And in that letter, customarily, Warren Buffett would, would say when that shareholder day is going to be in Omaha. So we're looking for news of that sometime. It'll be sometime in May.

David Westin (37:32)

Amazing. So you guys, I mean, it's an interesting job doing this on a, on a Saturday, on a Sunday when the investment worlds, you know, nobody actually really ever sleeps, nobody stops working. But you don't have live markets to deal with. Which gives you, I hope, just a great opportunity to, to explore.

Christina Ruffini (37:49)

I think so. I mean, look, we do have crypto.

Jason Furman (37:50)

Yes, in a very crypto.

David Westin (37:52)

And you know, I'm going to get all kinds of emails about that now,

Christina Ruffini (37:56)

you know, if I have to go on one more date where someone talks to me about crypto and now we've got to talk about it on the weekend.

David Westin (38:02)

I want to know what you're hearing.

Christina Ruffini (38:03)

And crypto's trading, that's a, that's an off camera discussion, Joe. Crypto is trading. We've got poly markets which are increasingly taking up oxygen and part of the discussion in the financial markets. And this is the kind of world that needs some sort of news on the weekend. And we know Bloomberg viewers are not completely dialing out on the weekends, but we're hoping we can do this in Kind of a different way in longer form and give you what you need to know before you start your week.

Jason Furman (38:27)

We're although part of this elite team, members of which have gotten a call at an early hour in the morning when big news is broken on the weekend. So this in effect is kind of formalizing.

David Westin (38:35)

This is all good for me.

Richard Haass (38:36)

Well, it's good for you.

David Westin (38:37)

This is a lifestyle improvement for.

Jason Furman (38:38)

I'll let you know. My vacation day is many months in advance, Joe. But it formalizes that if news breaks on the weekend, there is a place to go to for an update on that. It's not going to be ad hoc. And so we have great plans for what we hope to cover this week and next weekend. Of course we're aware the fact all of that could be scuttled, perhaps dramatically. But we are prepared and as you know the newsroom is so huge and willing to spring into action.

David Westin (38:58)

What's couch she saying about this launch, James? Are they running odds on this working or Poly Poly market?

Jason Furman (39:04)

America's producers, you know, checking that.

Christina Ruffini (39:06)

I would unfortunately, look, I would unfortunately put my money on. On something happening this weekend.

David Westin (39:12)

You just.

Christina Ruffini (39:12)

Yeah, just.

David Westin (39:13)

You just came out with that unsolicited.

Jason Furman (39:15)

I would have say. Yeah, I would have kept that.

David Westin (39:16)

I want to know why though.

Christina Ruffini (39:18)

I think, I mean I was asked this yesterday so I'm happy to say it. And you never know with this administration and, and there are so few people making these decisions. It's a really close hold and it's advantageous them because they can pivot very quickly and it's not like they have to claw back a bunch of commands because they keep those so close to the vest. But I've been watching this situation in the US Embassy in Israel and I think the fact that they've gone on authorized departure tells you something.

David Westin (39:40)

How about that?

Christina Ruffini (39:41)

So we'll have to see. You know the counterpoint to that would be there are talks on the books for next week, technical talks. I am happy to be proven wrong and we will have you covered either way.

David Westin (39:49)

Where are Those odds, James? 25% chance of strikes by March to 50% by March 13th. That's polymarket.

Christina Ruffini (39:58)

Yeah, that would shock because if you're banking on those, those technical talks going ahead next week, that would be where that. I think that's where that.

David Westin (40:05)

But if this bloody nose things happens, you know that could be at any time they say to strengthen the hand at the table.

Jason Furman (40:11)

And that aircraft carrier has arrived for sure close to arriving.

David Westin (40:14)

I know, absolutely. So you guys got a couch in there and there's a couch. Nothing like anything in our studio. No.

Jason Furman (40:21)

Well, I mean you're standing thing.

David Westin (40:22)

Well, I mean viewers know listeners don't.

Jason Furman (40:24)

You're standing up.

David Westin (40:25)

Well, you've been in there. It's just a, just a big desk.

Jason Furman (40:28)

Yeah.

David Westin (40:29)

Well, we're looking.

Jason Furman (40:29)

You're going to be there tomorrow.

David Westin (40:30)

I will. I want to see you have like a breakfast nook. I understand. Yeah. Is there anything else?

Jason Furman (40:36)

Come hungry.

David Westin (40:37)

Okay. Great.

Jason Furman (40:37)

Beautiful content and breakfast.

David Westin (40:39)

What time can people hear this interview with Hakeem Jeffries that 9 o' clock

Jason Furman (40:44)

at 9 o' clock is when that's going to air tomorrow in full. And we've got congressman from Tennessee coming in as well. Always.

David Westin (40:52)

Did you see Tim Burchett?

Jason Furman (40:54)

Yes, I did.

David Westin (40:54)

Oh, see, I'm showing up.

Jason Furman (40:55)

They're showing up for that. He's been up in Chappaqua, I believe. So we'll get an update from him.

David Westin (40:59)

Ask him about the UFOs. Ask him about UFO files. I'm not.

Christina Ruffini (41:02)

You're the second person to say it to me. I also want to ask him about these long boards that he hand carves members of Congress.

David Westin (41:07)

And if you want to be a friend, bring some cheese Whiz. Just apps just between us for Tim Burchett. Long, long blocks.

Jason Furman (41:13)

I'll bring the Triscuits as well.

David Westin (41:14)

Very perfect. See, this is working out. I can't wait. 7 o' clock tomorrow morning. I'm getting up early and you should, too. Well, it's not really that early. Seven to ten both days. Saturday, Sunday, Bloomberg this weekend with two of my favorite people, Christina Ruffini and David Gura. Give them hell, guys. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already. Apple, Spotify or wherever you get your podcasts. And you can find us live every week from Washington, D.C. at noontime eastern@bloomberg.com from coast to coast. Unlock adventure at Red Lion Hotels by Sinesta, where restful sleep, friendly service and local knowledge await. Whether for business or pleasure, spend less and make more of every trip. When you sign up for Sonesta TravelPass, you'll get their best rates instantly. Go to sonesta.com to book your stay and unlock their best rates with Sonesta Travel Pass here today, Rome tomorrow. Join now@sinesta.com Terms and conditions apply.

CBS Sunday Promo Announcer (42:14)

This CBS Sunday, it's Three Incredible Heroes on one unmissable night. First, it's the series premiere of Marshalls. Casey Dutton is back in a new era of Yellowstone. Then Justin hartley returns in TV's number one show tracker. When your loved one goes missing, he's the man for the job. Followed by more Shadow chestnut in an all new Watson. The series premiere of Marshalls, followed by a new Tracker and a new Watson. CBS Sunday, starting at 8, 7 Central and streaming on Paramount.