Trump Plays Down Prospects for Iran Talks Amid Red Sea Threat

Summary

Balance of Power — Bloomberg Podcast

Episode: "Trump Plays Down Prospects for Iran Talks Amid Red Sea Threat"

Date: July 21, 2026
Hosts: Joe Mathieu & Kailey Leinz with guest analysts Jeannie Shan Zaino, Leslie Shedd, and Rep. Byron Donalds

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Overview

This episode focuses on escalating conflict in the Middle East, with President Trump signaling little optimism for new Iran talks as threats in the Red Sea disrupt global trade and drive up oil prices. The show also dives into the upcoming South Carolina Senate race, key midterm primary developments (notably in Arizona), domestic ramifications of energy market volatility, and an interview with Rep. Byron Donalds about data center policies, agriculture, and the Florida governor’s race.

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Key Segments and Insights

1. Market Update: Oil, Semiconductors, and Geopolitical Volatility

[00:55 – 04:57]

• Markets Rebound Despite Global Risks:
  • Semiconductor and software sector momentum rebounding after hedge funds trimmed long positions; Nasdaq up despite global concerns.
  • Oil prices have surged (Brent above $91, WTI at $85); gasoline average over $4.00/gallon.
• Geopolitical Context:
  • Ongoing conflict with Iran and disruptions in the Strait of Hormuz/Red Sea by Houthi rebels causing supply concerns.
  • Retired Gen. Ben Hodges (cited from a prior episode) expects conflict to persist through U.S. elections.
  • Goldman Sachs warns Brent could exceed $120/barrel if disruptions persist.
• Key Quote (Joe):
  • “We are looking at you, Micron... it’s flying in the face of higher oil prices. And this is where the storyline gets more complicated.” [01:33]

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2. Trump’s Stance on Iran: Low Prospects for Talks, Hints of More Strikes

[04:58 – 09:07]

• 10 Night Streak of Bombings:
  • U.S. military operations against Iranian and Houthi targets continue, including major incidents in Jordan.
• Intelligence & Nuclear Concerns:
  • Reports of Iran burying uranium centrifuges under "Pickaxe Mountain."
• Trump’s Comments:
  • Downplays Iran’s interest in serious negotiations.
  • Hints at imminent strikes on Iranian nuclear infrastructure.
  • Dismisses significance of new centrifuge installations unless tied to actual nuclear material.
• Notable Quotes:
  • Trump: “We are degrading them at levels that nobody thought was possible.” [04:58]
  • Trump: “It doesn’t mean anything unless they have the material... And we’ll be hitting that area very probably pretty soon.” [07:25]
  • Analyst: “This dovetails into this picture that we are looking at likely more escalation ahead.” [07:57]

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3. Congressional Funding for War: Politics & Election Dynamics

[09:07 – 10:02]

• Massive Spending Requests:
  • Administration seeking up to $1 trillion in annual defense funding, plus $67 billion for conflict-specific needs.
  • Growing Democratic skepticism around blank-check funding without authorization/curbs.
  • Legislative uncertainty: Potential difficulty in passing NDAA or further funding in the next 48 hours.

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4. South Carolina Senate Race: Darlene Graham Enters the Fray

[11:51 – 18:56]

• Darlene Graham (Lindsey Graham’s sister) Announces Candidacy:
  • Received President Trump’s endorsement.
  • Panelists debate her prospects, the power of Trump’s endorsement, and South Carolina’s political traditions.
• Competitive Primary:
  • Despite her advantage, multiple GOP contenders (Ralph Norman, Russell Frye) remain in the race.
  • Historical context: Graham/Thurmond held the seat for 70 years.
  • Emerson poll: Only 41% of GOP voters see Trump’s endorsement as decisive.
• Notable Quotes:
  • Leslie Shedd: “She’s got the president’s endorsement, that’s gonna be huge in South Carolina... But, politics isn’t for the faint of heart.” [13:45]
  • Jeannie Shan Zaino: “60% of South Carolinian Republicans said either Trump’s endorsement would have no impact or would make them less likely to vote for a candidate.” [15:15]

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5. Arizona Primaries: Republican Strategy in a Purple State

[18:56 – 22:43]

• Open Seat Battleground:
  • David Schweikart and Andy Biggs vie for key Republican nominations.
  • Trump endorsement less uniformly embraced; candidates court McCain-aligned moderates.
• Key Insight:
  • Republicans in Arizona strategically avoid alienating moderates—a lesson from prior races featuring Kari Lake.
• Notable Quotes:
  • Jeannie Shan Zaino: “Andy Biggs... he’s hugging Hakeem Jeffries and John McCain. It’s quite startling.” [22:05]
  • “Katie Hobbs is going to be a formidable candidate... If Biggs wins, Arizona will be the first state to have an election denier as governor.” [22:12]

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6. Domestic Fallout: Oil, Inflation, and Election Impact

[22:43 – 24:49]

• Gas Prices and Political Risks:
  • Gas at $4.02/gallon sparks concern among panelists about voter pocketbook issues this fall.
  • Ongoing conflict with Iran and Houthi disruptions threaten further price spikes.
• Panelist Perspectives:
  • Leslie Shedd: “At the end of the day, most voters are driven by pocketbook issues... The president... needs to show them that he is not afraid to bring them to their knees.” [23:04]
  • Jeannie Shan Zaino: “If (Trump) doesn’t wrap this up, we’re going to have an economic disaster.” [24:01]

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7. Interview: Rep. Byron Donalds on Florida Policy, Data Centers, and Gubernatorial Race

[26:19 – 36:59]

• Fast-Moving Congress:
  • Rep. Donalds skeptical of Democrats’ intentions; pushes procedural votes to avoid a shutdown.
  • “Democrats... would rather shut down the government for political purposes because they have no solution, they have no policy.” [27:24]
• Budget and Farm Policy:
  • Supports timely farm aid, dislikes deficit spending but stresses American self-sufficiency.
• Data Center Regulation:
  • Donalds opposes moratoriums, advocates for “bring your own power” and strict regulation to protect state resources and local communities.
  • “What they did in New York makes no sense at all... If you have a governor who knows economics... you don’t need a year-long moratorium.” [30:26]
• AI and Economic Growth:
  • Emphasizes AI’s transformative role, the strategic necessity of US-based compute infrastructure.
  • “Every company on the planet is already embracing AI. The question is, do we have enough bandwidth to support all the uses?” [32:38]
• Vision for Florida Governorship:
  • Praises DeSantis’s record, pledges continuity on law and order, tax policy, and regulation while addressing growth and environmental balance.
  • “We are quickly becoming a major economic power... The next governor has to know how to make the regulatory changes to impact affordability.” [34:32]
• Primary Prospects:
  • No plans to debate single-digit opponents; expects to face David Jolly, welcomes DeSantis’s support.
  • “Why would I elevate you when you couldn’t elevate yourself?” [36:04]

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8. Data Centers as a Bipartisan Political Issue

[37:41 – 39:55]

• National Debate Intensifies:
  • Data center development now central to races across the country, not just in tech-heavy states.
  • Community concerns (NIMBYism, environment, water, and electric rates) increasingly cross party lines.
  • Leslie Shedd: “It doesn’t really feel like a partisan issue... I do think it is shortsighted to create a moratorium.” [39:23]

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Memorable Quotes & Moments

• President Trump: “We are degrading them at levels that nobody thought was possible... They did slip something through in Jordan... but because we have the best equipment in the world.” [04:58]
• Joe on South Carolina: “This seat was held by Lindsey Graham and Strom Thurmond for a combined 70 years.” [17:07]
• Jeannie Shan Zaino: “If Biggs wins, Arizona will be the first state to have an election denier as governor.” [22:12]

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Timestamps for Reference

• Market & Oil Update: 00:55 – 04:57
• Trump on Iran & Centrifuges: 04:58 – 09:07
• War Funding & Congressional Debate: 09:07 – 10:02
• South Carolina Senate Race: 11:51 – 18:56
• Arizona Primary Analysis: 18:56 – 22:43
• Gas Prices & Election Impact: 22:43 – 24:49
• Interview—Rep. Byron Donalds: 26:19 – 36:59
• Panel Reflection on Data Centers: 37:41 – 39:55

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Tone and Style

The podcast maintains an analytical, fast-paced, slightly conversational tone, with political nuance and frank debate. Joe Mathieu effectively steers the discussion while allowing a healthy degree of disagreement and expert insight among his panelists and guests.

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Summary

This jam-packed episode of Balance of Power brings clarity to fast-moving headlines: President Trump remains unyielding on Iran as the risk of wider war and energy disruption grows; key senators' races show how much (or little) a Trump endorsement means in 2026; artificial intelligence and infrastructure take center stage in state and federal politics; and, as always, the American voter is watching the price at the pump. Both the tone and the guests reflect the uncertainty and high stakes of the election season ahead.

Transcript

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[Joe]

I guess we bounced back, huh? UBS was talking about it this morning first thing I in Bloomberg Daybreak on my Bloomberg app. That is actually for real how I start my day every day. If you want to read in and know what's going on, that's what it's there for. D A Y B go ubs. His trading desk says the sector may be finding a floor the big momentum stock unwind. Yeah, we are looking at you. Micron hedge funds, they say have cut their long positions in momentum and semi stocks by about 5% of gross market value. That is one of the biggest pullbacks on record according to the prime brokerage data at ubs. It's left net positioning in semiconductor and software stocks back where we were in April and boy, didn't things feel good then. So do you jump in and buy microns up almost $100 right now because that's kind of become the poster child for the momentum movement here, right? When you look around though, not only are the indexes doing well and you've got a Nasdaq up almost 1 1/2 percent. It's flying in the face of higher oil prices. And this is where the storyline gets more complicated. The President was just talking to reporters in the Oval office. You got 2 1/2% bump in Brent above $91 now, almost 2 1/2 for WTI $85. And yeah, gas is higher to $4.02 on average according to AAA. When you look at the energy stocks, oh my God, I mean even the integrated oils are moving higher here. Refiners keep bumping new all daily basis because that part of the story is probably not going to change. Remember Ben Hodges was on the late edition of Balance of Power yesterday. Did you see the 5:00 clock show retired general, army general, who knows what he's talking about here. He's been a very reliable voice considering his dalliances in diplomacy as well. And the general told us he expects this conflict in Iran war, whatever you call it, to still be underway when voters go to the polls in November. That'd be a pretty big deal. Where do you think oil prices will be then? Goldman Sachs had a note out this morning. Brent could rally to more than $120 a barrel by the fourth quarter if disruptions in the Strait persist. And of course, we're adding the potential for disruptions in the Red Sea as the Houthis get busy once again. Is everybody going with Hootie now? I keep hearing Hooty or Houthi and the Blowfish playing in Yemen. It's the Houthi rebels. There's an H in there. But I digress. Yeah, the President says the Houthis, Right. Is that why they're all doing it? I mentioned he spoke with reporters. So if you're following the beat on this, we're 10 straight nights of bombing. That's the most we've seen since the initial phase, the initial two week campaign of strikes. And if you read the tip sheets this morning, the President's got some pretty big decisions to make here. You've either got this 10 day cease fire that the mediators were hawking yesterday or, well, the hawks are going to keep hawking and we're going to be in a full on war. Washington Post says Iran's government is likely not to be swayed with more bombing unlikely to feel significant impact or soften its negotiating position. This is a new intelligent assessment described by current and former U.S. officials, analysts at American spy agencies also concluding Tehran and Washington are for now stuck in indefinite limbo between peace and war. Kind of like what Ben Hodges said. And the market seems to be living with this pretty well at the moment. President says though we're still knocking him and we have more strikes ahead. He even referred to Pickaxe Mountain. And we'll talk about that with Tyler in a moment. Here's the President from the Oval Office.

[President Trump]

We are doing very well. We are degrading them at levels that nobody thought was possible. They're being degraded really. So seriously, they did slip something through in Jordan and if we had planned, other operators, you know, would have not happened, unfortunately. But we, because we have the best equipment in the world.

[Joe]

When he says they slipped something through, of course we saw those ballistic missiles touch down in Jordan and kill Americans who were serving their country. On the base. Tyler Kendall is our Washington correspondent and is back with us here in the room, in the bureau on a Groundhog Day, at least with this story. It does feel like we're churning here. Right? We're treading water. He was in the room with the president of Lebanon, which, of course, has a lot of skin in this game. Has anything changed in his posture when it comes to Iran?

[Political Analyst]

We are getting conflicting signals today again, because on one hand, Bloomberg News had confirmed that there are Iranian officials in Pakistan for apparently another round of talks with mediators today. But as that reporting came down, we also got confirmation from Kuwait and Bahrain that Iran was hitting US Assets in those countries. So we have seen escalation, but also the door still open for diplomacy. But President Trump's posture in this meeting with the Lebanese president seemed to point toward escalation. He said in part, quote, we're not finished at all with Iran. He said that Iran wants to desperately meet, in his words, but that the US has no interest unless Iran wants to meet in a, quote, meaningful way. He didn't elaborate on what that would look like, though. We've gotten very little indication Iran is willing to let up its leverage when it comes to the Strait of Hormuz. Overnight, hitting another tanker in the strait, this time linked to Kuwait, as we really see those flows go down to a trickle, if at all.

[Joe]

Yeah, apparently nothing got through the strait overnight. I want to ask you about the centrifuges. This is a Wall Street Journal report. Israeli intelligence telling the United States that thousands of uranium enrichment centrifuges were brought by Iran into tunnels deep inside the mountain that we call pickaxe mountain. This is like 450ft underground. The president was asked about this today, and it seems he's got plans to deal with it. Listen,

[President Trump]

it doesn't mean anything unless they have the material. You're talking about the centrifuges. Yeah, it doesn't mean anything unless they have the material they don't have. We follow the material. That's where the action is. And we'll be hitting that area very probably pretty soon.

[Jeannie Shan Zaino]

Soon.

[President Trump]

And there's not. Not a thing they can do about it. You know, normally I wouldn't say that. If I thought they could do something about it, I would never say that. But we'll be hitting that area pretty soon and very heavily.

[Joe]

So he kind of said that we're going to be hitting it pretty soon,

[Political Analyst]

which would be pointing toward escalation. Interestingly enough, in this reporting, it goes on to say that the US has actually been monitoring activity at Pickaxe Mountain for the last 15 months since we saw Operation Midnight Hammer last Summer Day bombing campaign, which has definitely raised questions about the targets so far that the Trump administration has gone after. But we know President Trump has been saying that they want to target and degrade any of Iran's ability toward building a nuclear weapon. So it also makes sense that we would see the administration point toward potential strikes here. It just dovetails into this picture that we are looking at likely more escalation ahead. A White House official had told us earlier that for now we should expect US Strikes to continue until President Trump decides that we need a different course of action or if maybe there's some outside factors that could impact him. Notably, of course, the disruptions we're seeing with supply amid this new threat from the Houthi rebels, as you mentioned, to disrupt maritime trade related to Saudi Arabia. President Trump was asked about this. He said that if it happens, we will take care of it. Yeah, of course, oil disruption is large on the president's radar as well.

[Joe]

That's the one reaction we're seeing in the market as the stock market kind of whistles past the graveyard. We're just seeing through this. It seems later today interesting the president's top lieutenants, and by that I mean the defense secretary and the chairman of the Joint Chiefs of Staff, Pete Hegseth General Dan Kaine will be on Capitol Hill to make the case for paying for this war. And there's a big ask for a lot more money. This is the $67 billion that they're talking about, or is this the full funding for the year in excess of a trillion dollars or both?

[Political Analyst]

I believe it is the fiscal year 2027 budget appropriations, the appropriations process. And they have to make the case essentially to lawmakers that it is worth it to keep funding the conflict. At one time, this wouldn't have been considered controversial. It would have been an easy vote to get more money defense on both sides of the aisle. But right now, we know Democrats are really pushing for those curbs when it comes to how President Trump is conducting this conference.

[Joe]

They might not even be able to pass the NDA. It looks like we'll find out that procedural 24 to 48 hours here with a lot to cover, of course. Tyler Kendall, thank you, Tyler. It's not Groundhog Day, but the story's not changing real fast. Stay with us on Balance of Power. We'll have much more coming up after this.

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[Joe]

Wall street for us every day here on Balance of Power. Whether the chips are in or out, Darlene is in. We talked about this a little bit at the end of the day yesterday. It was kind of a late breaker. She sat down. This is the late Senator Lindsey Graham Sister Darlene, the caretaker of the seat. Many wondered if she would run for the real job as the president, and apparently the governor urged her to. President Trump was talking about this at the time and sure enough, the sister of the late Republican Senator Darlene Graham says she plans to run in the midterm elections, and she dropped the news on the Hannity program last evening on Fox.

[Host]

Listen, I feel like I can do it. I feel an inner peace about it. Will it be difficult?

[Joe]

Yes, absolutely.

[Leslie Shedd]

So you're inclined to get in or

[President Trump]

you have you even made a final decision?

[Host]

I've made a decision.

[Sponsor Voice]

You're in, I'm in.

[Jeannie Shan Zaino]

I'm in.

[Host]

I can't see it any other way.

[Joe]

I'm in, she said, although he said it first. That's the way you do these things. You pick the interviewer to drop the news like that. Hannity won the day and the question is, can she win the seat? It's on the terminal right now and we play it to our political panel We've got a good one for you today. Bloomberg Politics contributor Jeannie Shan Zaino is with us, of course, our Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ash Center. And it's an honor to welcome Leslie Shedd to THE EARLY show, President of Rising Communications, our Republican strategist. We call this hour the Elephant Sometimes. Welcome. It's great to have you. That's not a political reference. We got to talk about Darlene. And Leslie, I'm going to start with you because, you know, you knew Lindsey Graham very well. You actually just told me you were an intern in his office. Going back to the glory days.

[Leslie Shedd]

Exactly.

[Joe]

Can Darlene carry the torch here?

[Leslie Shedd]

I mean, I think she can. She's got the president's endorsement that's gonna be huge in South Carolina. I'm from South Carolina. I can tell you that Donald Trump is incredibly popular in the state. So I think that will help him help her. I also think that, you know, people are gonna wanna honor his legacy. He was a legend in South Carolina and I think that they will. See sister in the seat is a way to honor that legacy. My question will be if she wins, does she like it? Because politics really isn't for the faint of heart.

[Jeannie Shan Zaino]

Right?

[Joe]

Well, I'm not sure I had a sense of that. She was ready to really start living this lifestyle in that interview. This is a very delicate moment for her. She just found out about her brother. And now you've got the president on the phone and the world swirling around you. Does she clear the field?

[Leslie Shedd]

I don't think she clears the field.

[Joe]

So Ralph Norman's gonna hang in there.

[Leslie Shedd]

Look, if you're Ralph Norman, you've lost your chance at governor. You're gonna this congressional, why not try it? And even with Russell Frye, they've changed the rules so that he's going to be, if he wins this primary, he would be allowed to be on the ballot both for his congressional seat and for the Senate seat. And then he can pick which one he wants. So it's kind of a win win situation here. And you know, in South Carolina, we tend to have senators that sit in their seat for quite some time. This could be a once in a generation opportunity. I think that, I think she won't clear the field, but I think she's the presumptive nominee. Yeah, I think she wins.

[Host]

Yeah.

[Joe]

What do you think of this, Jeannie? It's one thing to win, it's another thing to govern. Would Darlene Graham make a good senator?

[Jeannie Shan Zaino]

First she's got to win the primary. And I think the idea that Donald Trump's endorsement matters so much in South Carolina, we just saw that that's not the case in the governor's election or the primary for the Republicans there. And so what I think this is, is a big test for Donald Trump's of power, of endorsement. We're seeing that out, by the way, in the primaries in Arizona today, over 100 days. Joe Matthew, until the midterm is getting exciting. And we're seeing it in South Carolina. And of course, just last week we had. Now, this was before he endorsed Darlene. This was just after Lindsey Graham passed. We had an Emerson College poll, and the results were striking because 60% of South Carolinians Republicans, said either Donald Trump's endorsement would have no impact on their vote or their support for a candidate or would make them less likely to vote for a candidate. 60%, only 41% said that it would move them to support the candidate. Those are stunning numbers in a state as red as South Carolina. And, you know, the other thing is that if the power was so great, she would have cleared the field. And so you have seen she cleared Nancy Mace, that's for sure. But she hasn't cleared Ralph Norman, who was on News Nation the other day. She hasn't cleared Russell Frye. She hasn't even cleared Mark lynch, who is out there, by the way, saying she may not be eligible to run because she didn't vote in the last two primaries. I found no evidence of that, by the way. So there's a lot there. She's got to win this thing. And do Democrats come in there? Probably not at South Carolina, but if this is a really, really divisive primary, Democrats may be more inclined to spend a little bit there.

[Joe]

Wow. But that's okay. So we got a lot there. Jeannie, if you haven't seen the Nancy Mace video, I, I was going to play a producer. James won't let me get a bleep in. It's getting all kinds of trouble here. She's clearly moving on to the second career. You know, I'll tell you, when we talk about the tenure in South Carolina, Leslie, this seat was held by Lindsey Graham and Strom Thurmond for a combined 70 years.

[Leslie Shedd]

Exactly. I mean, that's why I'm saying, you know, I'm not surprised that people are jumping in. I don't think that that really signifies, you know, that Darlene is not going to be the, at least the presumptive leader right now in the race. I just think you Know, it's a once in a generation type of a

[Joe]

seat is she up for? Actually, maybe I should ask it differently. Do the gloves come off in this primary? I mean, South Carolina, I need to tell you, is known for really tough politics. Oh, yeah, it can get super negative. Do you go after a Trump endorsed member of the Graham family?

[Leslie Shedd]

I think you'll see something where the others that are running will try to tout their Trump credentials. They're already starting to do that. Right. Talk about how they work with the president. They like the president, they've helped the president, you know, get his agenda out. Be surprised if there is some light discussion or hit on the fact that, you know, she doesn't have a lot of experience, she doesn't necessarily fully understand how policy works. But I would be really surprised. I just don't think it's a good look for, you know, men in South Carolina beating up on a woman who just lost her brother. And it's such a short, condensed time period. I think that if this was going for, you know, two or three months, it would be different. But I think right now it's really going to be, you know, how many people like it's going to be about voter turnout and it's going to be about name id.

[Joe]

Name ID is one thing that she has. But I suppose you could say that Ralph Norman does as well. To your point, though, if this doesn't work out for him, he's done after this. Jeannie, you mentioned Arizona. And I just want to put a finer point on this because we've got primary day once again. Where's Rick Davis? Is he out there running these races? An open seat in the first district. This is David Schweikart is going to run for governor here and is said to be one of the most competitive swing states in the country. Amish Shah went from this very packed primary but lost to Schweikart in the general election and is now running again. DCCC though the establishment behind Marlene Galan Woods, a former TV journalist, they guess they all run for office out there in Arizona. Jeannie, how are you looking at this contest?

[Jeannie Shan Zaino]

This means, Joe, you're next. You're going to have to run.

[Joe]

I don't think so.

[Jeannie Shan Zaino]

You know, I think it's just fascinating because I think the big marker here is what Andy Biggs is doing now. He's expected to win the primary. He does have Donald Trump's endorsement. But boy, Joe Matthew, was he running away from it. You can see him sort of reading this line. He's out there, which may be why our friend Rick Davis isn't here today talking about his love for John McCain. He's out there today talking about Joe Matthew will work with Hakeem Jeffries. You know, that is, that is stunning from Andy Big. And it seems pretty clear that he learned from Kerry Lake because if you recall two years ago when people raised the idea of her bringing in the McCain coalition, these Middle ground voters, she dismissed that outright and lost to Ruben Gallegos. So you see, Biggs is not dismissing that, particularly this year. And I think, you know, it just speaks to the fact that this is the state that is purple and these Republicans cannot run in the general in particular, too far to the right and take these moderate Republicans for granted. So I suspect we have Rick Davis doing something out there. I won't say what.

[Joe]

I'm not trying to float anything. He's probably at a party right now. But this is important. David Schweikart, Andy Biggs, you got two very different Republican flavors here. Who should Katie Hobbs be worried about?

[Leslie Shedd]

I mean, I think they'll both be really great candidates. You know, you were talking about how Arizona is a purple state. I think it's a purple state in a different way than a Michigan is or Wisconsin is. And I also think too that, you know, they're going to, they're going to be a state that was most directly impacted by the justice insane amount of illegal immigrants that were coming over during the Biden administration and how secure the border feels now. So while it seems to be a topic that's kind of been forgotten in the news cycle because it got cleaned up, I think it will still resonate with the people of Arizona. And I think that, you know, a Republican will win the state in the at the end of the day.

[Joe]

Well, you know, Andy Biggs has quite a story to tell as a member of the Freedom Caucus. Jeannie, is the suggestion that he is too far right for what you describe as a purple state?

[Jeannie Shan Zaino]

I think that's his suggestion based on the fact he's hugging Hakeem Jeffries and John McCain. It's quite startling.

[Joe]

Fair enough.

[Jeannie Shan Zaino]

And you heard Schweitzer in the debate was saying things like, aren't you tired of losing speaking to this? But I will tell you, Joe, Katie Hobbs is going to be a formidable candidate for whichever and I suspect it may be Biggs, her statement, and she's been saying this a lot lately. If Biggs wins Arizona, Arizona will be the first state to have an election denier as governor. That is Quite a swipe at Biggs. And it's going to be hard for him to run away from that, no matter how much he tries to hug Hakeem Jeffries and John McCain.

[Joe]

Well, I've got a big number for both of you. It's $4.02. That's the national average for gas today, at least according to Triple A has been rising on a daily basis as crude does the same. Leslie, how worried are you about the Iran war continuing into the fall when people are starting to make decisions and watching prices remain under pressure here like this?

[Leslie Shedd]

I mean, honestly, I am worried. I think that at the end of the day, most voters are driven by pocketbook issues, by how much it costs to get food on the table and take their kids to their soccer games. I think it's a problem. I do think the president has been trying everything that he can to get gas prices low to get the strait reopen. The problem is that Iran is essentially a terrorist regime. And I think he is realizing every time he's tried to give them the benefit of the doubt and say, okay, look, you know, I don't want to drop more bombs on your cities. I want to stop this. I want to get the strait reopen so that we can have a nice, free and fair world. And Iran says no, absolutely not, because they're a terrorist regime. So he's restarted strikes. I think that that's a good strategy. He needs to show them that he is not afraid to bring them to their neighbor knees.

[Joe]

10 straight nights of strikes. Jeannie, do you expect 12, 13. How long does this go for?

[Jeannie Shan Zaino]

I mean, I think this is going to go indefinitely. And absolutely we should all be scared as we see the Red Sea, the strait there is being closed or essentially impassable. This is going to have a huge impact. And I will tell you, Donald Trump was right when he said I've got to sign this ridiculous mou. I'm calling it ridiculous. He didn't. Because if not, we're going to have an economic disaster. We're going to have an economic disaster if he doesn't wrap this up.

[Joe]

Well, man, I'll tell you what, the markets just couldn't care less. Look at the s and P500 up 1%. Nasdaq up 1 1/2 percent, even as crude oil prices jump 2 1/2 percent. We've got a great panel and they'll be back in our second hour. Leslie Shed, Jeannie, Shan Zaino, thank you for the insights. Stay with us. On balance of power. We'll have much more coming up after this.

[Leslie Shedd]

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[Host]

It's a busy day, a busy week on Capitol Hill, specifically in the House of Representatives, which is racing to get done a long list of things before they break for the August recess. And they're going to try to take that first step today by passing a rule. This is procedural to try to tee up votes on everything else. This is government funding. This is the National Defense Authorization we were just discussing with our political panel. And of course the budget resol to try to get reconciliation 3.0 across the finish line. Also should mention fresh off a Charlie Pellet market check stock trading ban for Congress is also included.

[Joe]

All in the next 24 to 48 hours. Going to be so the speaker has to defy gravity once again. Can he pull a rabbit out of the hat? We're lucky to have, as I mentioned, some time with the Congressman from Florida. Byron Donalds is with us. Republican representing the 19th congressional district and also happens to be a candidate for Governor of the Sunshine State. Congressman, welcome. It's great to see you here in our bureau. Thanks for joining us on Bloomberg. Start with we've been walking out on procedure all day today before we get to your race. Does the speaker have the votes for the cr? Are we about to get this done?

[Byron Donalds]

I believe so. I mean, look, at the end of the day, we know that the Democrats have been talking for about a month now about wanting to see another government shutdown right before the midterms. So think about this. The Democrats would rather shut down the government for political purposes because they have no solution, they have no policy. They're just trying to oppose the president at every turn and they would shut down our government again just for the sake of getting more votes.

[Joe]

Are they telling you that behind the scenes? Because we ask Democrats every day and they tell us they remember how bad the last one was and they don't want to shut down.

[Byron Donalds]

But come on, man, like they're going to tell you what their real plans are. We hear they are telling you behind the scenes. This is what we're hearing. And so to get away from that kind of nonsense, let's just continue government funding until after the elections are over and then we move from there.

[Joe]

Yeah.

[Host]

Well, before we move to your election, in particular, this budget reconciliation package, more than $90 billion of spending that is not offset by anything. Does that sit well with you?

[Byron Donalds]

Look, I think we have to do what we need to do for, for our military members right now, make sure that they have the funding that they need. Secondarily, I believe there's about $12 billion in funding in there for agriculture interest throughout, throughout the country. Florida is on that list. Back in February, Florida lost 3.5 billion do worth of crops from the big Arctic freeze that moved through that early week of February. We lost three and a half billion in crops. Florida is slated to receive some of those dollars. But it's also indicative of what's happened to Washington, D.C. there is no talking to the Democrats. They don't want to talk about anything constructive. So then reconciliation becomes a vehicle of use in order to get things done for the American people.

[Joe]

We saw analysis from Bloomberg Intelligence about the farmers. Specifically, this $11 billion is believed to go to in many cases, particularly for older farmers, to pay off debt. Do you think that we're going to have to have another round here for help for America's farmers if China doesn't start buying soybeans or if we're not selling white corn across the border to the extent that we hope?

[Byron Donalds]

I don't think so. But I think it's important that we stabilize our farms here in the United States. In short, we don't want to be in a situation where we are importing products from overseas. We don't want to be in that position so farming, agriculture is a bedrock foundation of our country, any country, especially ours. We want to be able to feed our own people. And so what we're doing in reconciliation 3.0 is to make sure that our farming community has the resources they need so we can still put American food on the table for the American people. And to be clear, this is to be something that the Democrats work with us on and they refuse to.

[Host]

So you want to make sure people are fed. People also want to guarantee that they're going to have access to water and access to things like power. Yes, obviously an issue in Florida, specifically around data centers. The man you very well may be up against in November, Mr. Jolly, has suggested that there should be a data center moratorium in the state of Florida like we're now seeing in New York. You are arguing for a different approach. Basically bring your own power. Is that the happy medium? How do you guarantee that that will protect rate payers ultimately if data center demand keeps, keeps moving higher?

[Byron Donalds]

Well, a couple things. One, what they did in New York makes no sense at all. It's one of the reasons why capital writ large, not just around AI, but in any other part, any other industry is leaving New York because they have stupid regulatory policy that does not allow for capital to flourish. We don't want to see that happen in the state of Florida. Number two, we already have on the book Senate Bill 44. Governor DeSantis just signed it into law in our state. Utility rates for Floridians will not go up because of a, a hyperscale data center. The other thing that's a part of that bill, you have to get a consumptive use permit from our water management districts who are expressly tasked with protecting Florida's aquifers in order for a data center to be constructed to make sure that they contain water usage to protect Florida's fresh water resources into the future. What I want to see happen on these data centers, if they're allowed to, if they come to Florida, build a closed loop filtration system on site. So whatever water they do take initially, they recycle and clean that water and keep it self contained on their property. And then the last thing, and I think a lot of Floridians are looking at this proximity. Listen, I don't want to see a data center outside of my front door. I know Floridians don't want to see one outside of their front door. So making sure that they're away from residential areas just makes common sense. That's the way you do this, what Mr. Jolly is saying is that he needs to go study a more. He needs to go study and have a moratorium in place where you can go study it. The truth is, if you have a governor who knows economics, who knows how to look at us building schematic, you don't need a year long moratorium. You can make real decisions in real time that are in the best interest of Floridians while also making sure that if you do build one of these centers that it can bring real economic impact in a positive way to the state of Florida. So these moratoriums, they sound good politically, but that's because it's a political answer. Instead of mitigating the issues that do come along with hyperscale data centers.

[Joe]

If your bill became law, and this story is really important to our audience at Bloomberg, we talk about it, Congressman, every day. And as we've traveled the country this midterm cycle, we've really been surprised at the level of NIMBYISM that we're hearing that data center has become a true political issue. If your bill becomes law, do you embrace data center for job growth, for economics growth? Is this the future of our economy?

[Byron Donalds]

Well, that's the wrong way to look at it. You have to look at what companies are already doing. Every company on the planet, every industry on the planet is already embracing AI. It's happening right now. The question is, do we have enough bandwidth to support all the uses? And this is where, from a national security perspective, the Trump administration is very clear. The Chinese do not want us to build out the infrastructure because the Chinese want to build that infrastructure. So all the data on the face of this earth is warehoused in China. I don't trust the Chinese. I don't want American data over there. I would rather us have common sense approaches like protecting ratepayers and protecting water resources here in the United States so that we actually make sure we warehouse our data. The other piece is that compute power is going to continue to expand in the United States. And so if you're a small business and now you're having to pay more for compute power because we don't have the necessary infrastructure, who does that help? I'll do you one better. Any, any American who's using AI right now. And by the way, most Americans are. If you do in a Google search today that's now being run by Google Gemini, not the old search engine. If you're on Netflix and they recommend a show to you, that's AI. If you're in the Amazon marketplace and they recommend a product to you that's AI. And so AI is being used in ways that most people don't even see or understand. So it's already here. The question is, are we going to have the necessary infrastructure in order to manage to compute power that is going to continue to grow. And what we're already seeing when we have the access to compute power with AI, it actually is demonstrating some positive impacts in our economy that are helping companies stabilize their, their income statement, stabilize their balance sheets, stabilize costs for end users. And I think that's what people truly do want to see happen.

[Host]

Well, and you mentioned that they're already on the books in Florida under Governor DeSantis. I would imagine you would like to see that continue. When we consider your potential governorship, though, how should we expect it to differ from the administration of Ron DeSantis?

[Byron Donalds]

A couple things. One, law and order is still going to be the standard like it has been under Governor DeSantis. Number two, we are going to have a limited government, low tax environment, low regulatory environment. We want to continue to have, frankly, the ecosystem where the Florida dream has been built upon. We're going to to keep all that in place. Governor DeSantis has done a tremendous job leading our state. What comes next for the next governor is how do you balance the growth that has come to Florida with our environment, making sure we maintain conservation areas, we protect our waterways, we finish Everglades restoration, we provide fresh water, have a plan for fresh water into the future, even though people are coming to Florida because we are quickly becoming a major economic power, not just in the United States, but in the world. So how do you balance that? That's going to be the question for Florida's next governor. It's not a matter of differences from Ron DeSantis, it's how do you build on the successes that he's already brought? And this is where my career is unique. I spent 17 years in the financial industry, four years in the statehouse. I chaired the insurance and Banking subcommittee in the Florida House. You want to talk property and casualty insurance, I don't need talking points from anybody. I know the subject matter because I chaired that committee and I spent time in the business world, so I know that subject matter. The next governor has to know how to make the regulatory changes to impact affordability in our state while also planning for the state's future growth based upon the same common sense, conservative principles that's made Florida the envy of the other 49 states.

[Joe]

You're going to have a debate in the Republican primary?

[Byron Donalds]

Probably not. I mean, those guys are still in single digits.

[Joe]

Yeah.

[Byron Donalds]

And if they, you know, we released polling today. Our internal numbers have us at 53. Another public poll came out, had us at 44, I think it was we had one come out last week, had us at 48. These candidates, they're still in single digits. So at this point, the Republican primary is going to be decided in 28 days. Why would I elevate you when you couldn't elevate yourself?

[Host]

Just quickly after this primary is over, do you expect Ron DeSantis will endorse you to do you think he'll campaign with you ahead of November?

[Byron Donalds]

We'd love to have Governor DeSantis endorsement and working with him and campaigning out there on the trail. I will tell you, the thing I'm looking forward to is debating. David Jolley, you were talking about debates. Those are the debates I'm looking forward to because then it's going to be about the contrast of vision for the future of our state. And I believe that Governor DeSantis completely agrees with us about the next steps for Florida. And so I look forward to having his endorsement and being out there on a campaign trail with him.

[Host]

All right, Florida gubernatorial candidate and current congressman from Florida, Byron Donalds, back with us on Bloomberg TV and radio. Thank you so much for joining us in our Washington, D.C. studio and to react to the conversation we just had with the congressman. We want to bring back in our political panel. Jeannie. Shannon Zaino and Leslie Shedd are still with us. Jeannie, to begin with, you obviously Congressman Donalds is very much looking forward to debating Mr. Jolly at some point. Of course, Jolly still maintains the Republican primary needs to finish up first. In a state like Florida, how close would you expect it to be between a Republican and a Democrat? Ultimately, yeah.

[Jeannie Shan Zaino]

I mean, I think the environment this year is better for Democrats than it has been, but I still think it's an uphill battle. And I thought it was fascinating the discussion you had about the data centers. That is a huge, huge issue. It's a big issue in Florida. It's a big issue across the country. I'm hoping they debate and we hear more about that. The other thing I hope for Florida is we hear more about the cost of insurance, particularly housing insurance, which is a huge issue there. And then of course, the economy overall, which impacts all of us.

[Joe]

What's your thought, Leslie, as the data center becomes a primary political issue? A year ago, I'm not sure you could have seen this one coming, but the spending has been so robust and it's impacting so many communities that I know Congress, McDonald's is not one of them. But even some Republicans are worried about, for instance, rural areas being overtaken.

[Leslie Shedd]

It's everywhere. And, you know, I am an adviser to the Republican Attorneys General association. And this is something that is coming up in almost all, all of these races, this discussion about data centers. The problem is we need them, right? As AI grows and especially as we are able to develop more and more substantive quantum computing, we need data centers. So the question is, how are we going to be able to build them in a way that is responsible to communities and that doesn't make voters angry? And I think you're seeing that on both sides of the aisle right now.

[Host]

Mm. Well, clearly Congressman Donalds is against the notion of moratoriums. He thinks that New York made a bad decision. But would you be surprised to see that spread to other states, that idea of moratorium, even to red ones?

[Leslie Shedd]

You know, I have to tell you, in my limited experience with this, it doesn't really feel like a partisan issue right now to me. You hear some Democrats that are supportive, some Republicans, and then flip flops on the other side side. Right. I haven't seen it really solidify as a Republican or red state versus blue state issue. I do think it is shortsighted to create a moratorium. I understand the concerns. I want to make sure that we are building these things, that we are building them in a respectful and, you know, an effective way. But the idea that somehow you can just say no data centers, it's just not realistic.

[Joe]

There's a lot of money at stake here. That's the big question, of course, Kelly, is about whether compute becomes commoditized and becomes a much cheaper thing without the need for such massive data centers. And it's going to take some time to answer those questions. Big thanks to our panel for swooping in after our conversation with the Congressman. Jeannie Shan Zaino, Bloomberg Politics contributor. Our Democratic analyst, Leslie Shedd, Republican strategist, Rising Communications. We thank you both so much. 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 weekday from Washington, D.C. at noontime [e-mail]

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