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- [00:01]
Kelly Leinz
Never bet against American grit or American energy through innovation.
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Aaron David Miller
Venture Global is not only building some of the largest energy facilities in the
- [00:11]
Kelly Leinz
world right here in the United States, but delivering American energy at a fraction
- [00:16]
Aaron David Miller
of the cost in a fraction of the time. So while others are busy talking, we're busy building.
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Kelly Leinz
That's Venture Global.
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Joe Matthew
That's unstoppable energy.
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Podcast Host
Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [00:56]
Joe Matthew
We are now basically at $75 a barrel on WTI. Brent is nearing $80 a barrel, up six and a half percent on the day, just shy of 79 as we speak on, of course, renewed hostilities in the Middle east and around the Strait of Hormuz. Specifically, of course, we saw yesterday Iran striking three commercial vessels in the Strait of Hormuz. And in response, US Central Command conducted a number of strikes against Iranian targets. And President Trump, speaking in Ankara, Turkey, today, suggested that more strikes could come again tonight. While he pushed back on the idea of the war completely restarting, he also said that he views the ceasefire and the memorandum of understanding as essentially being over at this point and that he does not have a lot of confidence in the way negotiations could move forward from here. He says he wants to finish the job in Iran. Yes, it's just not clear that a deal is going to be what finishes it. This is what the president told the press earlier today, based on their actions
- [01:55]
Aaron David Miller
over the last week or two. They're not, they're not doing a service to the people. And I think more than anything else is I got to know them and I'm not sure I want to make a deal with them. We can play games, but I'm not sure I want to make a deal. Let's just finish the job.
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Kelly Leinz
The president adding that Iran wants to make a deal, but, quote, they don't know how to make a deal, referring to the fact that he says they're working with very fine people, Witkoff, Jared, J.D. vance, Marco and Scott Kayleigh. He said, quote, they're a little loco, they're a little crazy, which is nicer than what he said earlier in the day following his bilateral with the secretary general of NATO. The cease fire, when he said was done at that time, the MoU, he said, was dead. And he referred to the leaders of Iran as liars, cheats and sick people. Kelly he Said they are scum. Which makes you wonder how exactly you pick up talks from here.
- [02:51]
Joe Matthew
Well, yeah, he suggested he will allow the negotiators you just mentioned to continue the talks, but he's not expressing much confidence in them at this point. And it is also striking, Joe, that we are now having a conversation based almost entirely around Iran in the aftermath of the president's attendance of the NATO summit on a day that it very well could have been all about Ukraine. It was not just a bilateral meeting that the president had with the NATO Secretary General, also the Syrian president and also Ukrainian President Vladimir Zelinsky, as the US Said it will allow the licensing of Patriot missile systems to be made in inside Ukraine, knowing Ukraine has a desperate need for those. And the US Says effectively right now, at least there aren't enough to go around.
- [03:30]
Kelly Leinz
And where have we heard that before? It was 24 hours ago on this program that we heard this from the Atlantic Council. If you were with us yesterday, on balance of power, you saw this coming, a pretty remarkable turn there, that this technology will be licensed to Ukraine. And the president was asked about the potential for a reciprocal deal for us to license Ukrainian drone technology. He was more than open to that. So that actually could end up happening. After what Melinda Herring floated here on the program yesterday, we're actually seeing it come to fruition, which could be, by the way, the biggest news that came out of this summit.
- [04:01]
Joe Matthew
Yeah, it very well could. We also are wondering if we're going to get similar news around weaponry when it comes to Turkey in particular. The president had some very warm words for Turkey under the leadership of President Erdogan, suggested that he may like to see a return for turkey to the F35 program. He was pressed about that in the press conference as well.
- [04:22]
Kelly Leinz
Well, let's bring in Annmarie Horden. She's made her way to Bloomberg's cameras in Ankara, having been inside the room with President Trump for that news conference that we brought you live in our last hour here on Bloomberg, our chief political correspondent on the case. As the sun sets over Ankara, Anne Marie, there are a lot of questions as of course you're asking as well, coming from the markets, coming from investors, coming from Americans who thought there was a cease fire in place. Is the president serious when he says it's over?
- [04:52]
Annmarie Horden
Well, I think a lot of people left that room a little bit confused because earlier this morning the president was very emphatic and said the cease fire is over. They can keep talking. He thinks it's a waste of time. Hot rhetoric about the regime saying they are, quote, scum and a bunch of their cuckoo. Now, the president, when he was pressed by reporters, he had this line where he said he doesn't think it's going to start again. I think it's going to go very quickly. They hit a couple of ships and so we hit that much harder on the heels of also before that press conference in one of the bilateral meetings, says he will, quote, probably strike Iran again tonight. So are we left with a very fragile cease fire? Are we going back to full fledged war? It feels like we're in this moment of just a continuation of a stalemate that has tit for tat skirmishes, whether it's issues at the negotiating table or actual issues in the Strait of Hormuz, which is why a lot of individuals in the room and also in the financial markets are perplexed about what is the path forward when it comes to the conflict of Iran.
- [05:59]
Joe Matthew
Well, and having heard previously from the president, including at the G7, the suggestion that you need the conflict with Iran, rap for the president to fully turn his attention to the conflict between Russia and Ukraine. We did get news on that today, Anne Marie, with the licensing agreement that the US Is going to allow Ukraine to make their own Patriot missile systems effectively. That's been overshadowed by the recent news on Iran in his recent comments.
- [06:28]
Annmarie Horden
Yeah, it was certainly overshadowed because the US had strike last night on Iran as well as lifting those OFAC waivers when it comes to Iran's ability to ship oil on the open market. That was massive news in terms of the conflict in Ukraine and a major win for President Volodymyr Zelensky, who coming into this conflict was talking about that he was having trouble really fending off the ballistic missiles from Russia. He needs more of the defense systems. He needs the Patriot missile systems. And there's been discussion for months now whether or not the US Would allow Ukraine just to produce these missiles in in country. And the president looked over to President Zelensky at the top of that bilateral meeting and said, I think I'm going to give you that license. Now we need a lot more details on this. How long is it going to take to train individuals to make this? How long from start to finish could we see Ukraine actually have a Patriot defense missile. But that is a major breakthrough and something a lot of NATO countries wanted to see. I spoke with the Finnish president yesterday, Alexander Stube. I think in the American media he's known as one of these close allies to President Trump. An individual has gone golfing with him. And he really wanted to see and said that would be a welcome development. He really wanted to see Naito's deliver on that. So that was a win for Zelensky. But a lot of wins have been really, as you mentioned, Kelly, hanging under the radar because the conflict in Iran has overshadowed the summit.
- [07:54]
Joe Matthew
Indeed it has. All right, Bloomberg's AnnMarie Horden reporting live from Ankara. Anne Marie, thank you and safe travels home. Of course, as we consider the president's own travels home is not going to be aboard the new Air Force One that was gifted to him from Qatar. He's going back on the old one, as we've noted for our audience. But we want to get more insight now into what exactly is happening between the US And Iran and whether there will be a resumption of the war which President Trump is suggesting against. As we turn to Aaron David Miller, senior fellow at the Carnegie Endowment for International Peace and a 24 year veteran of the State Department. Aaron, welcome back to Bloomberg TV and Radio. Would you call this a resumption of war if the president is saying that the MoU is dead and the cease fire is over?
- [08:37]
Aaron David Miller
You know, at some level, and I don't know if anyone should be surprised by this, a flawed military campaign has produced a flawed memorandum of understanding which has produced a flawed process of implementation in which the Iranians believe, probably correctly, that they have come out of a five month on and off war with more assets and a greater resolve to continue. So there were only been three out three possible outcomes to this. One, a return to full scale war. I don't see that happening. A second is a breakthrough in negotiations which would take weeks, if not months to come to fruition. And then the third issue, which I think you're watching play out a kind of new normal, which will be episodic use of economic and kinetic power by both Iran and the United States against one another. The straits, of course, remain fraught and probably will not return to the condition they were in on February 27, February 28. And this could go on for quite some time. I'm reminded of what the of what the Taliban said to the Americans in Afghanistan. You may have the clock, but we have the time. And I think the Iranians actually do believe that they're in a better position to protect their core requirements. And one critical core requirement is making sure that their new rules of transit applied to the Straits of Hormuz.
- [10:01]
Kelly Leinz
What's the impact of the rhetoric, Erin? Presumably Steve Witkoff and Jared Kushner will get back to a table with some, whether it's direct or indirect, at some point with Iran president call him scum, loco, crazy, sick people. Does that resonate?
- [10:21]
Aaron David Miller
Well, I mean, look, you're now in almost the sixth day, right, of the, of the funeral burial of the late Ali Khamenei. Most of Al Khamenei, his son has not been seen. He's supposed to attend the actual burial of his father tomorrow in Mashad. The fact that may or may not occur because of the recent uptake in kinetic activity, I mean, this guy saw his mother and his wife and at least one of his children killed during those Israeli and US strikes on February 20th. What do you suppose he thinks if in fact he is a supreme leader with confidence and control? That's unclear right now. What do you suppose he thinks of Donald Trump and the United States? I mean, I suspect this is only going to harden their views and increase their risk readiness rather than their risk aversion when it comes to confronting the United States.
- [11:20]
Joe Matthew
Well, so let's talk about the nuclear program as well, because we've heard the argument frequently since this conflict began that it actually may just reinforce to Iran the idea that it needs to pursue a nuclear weapon. The president in this news conference has contended that effectively Iran isn't going to be able to have a nuclear weapon because it's so buried underground the nuclear dust, that only the United States would be able to access it in the first place and they would just blow up anyone that tried. Is that enough to guarantee that Iran will never have a nuclear weapon?
- [11:50]
Aaron David Miller
No, it's not. I mean, capacity and knowledge are the two ingredients, and the Iranians have both. There's no question, though, that from a tactical point of view, Israeli and US Strikes has fundamentally degraded Iran's nuclear infrastructure and put more time on the clock. They talk about breakout time on the eve of this war, the breakout time, that is to say, the time required for the Iranians to actually, actually have all of the elements required to make a weapon. The fissile material, the computer modeling miniaturizing the warhead delivery system was a matter of months. I think that breakout time has now increased. It's probably well into a year plus, maybe even longer. But again, I'm reminded of the Afghan notion, you have the clock, but we have the time. This regime has endured military campaigns by the world's most powerful military in the US and the region's most powerful military, the Israeli Defense Forces. Not only is that has it survived, but it has now has a new, arguably nuclear weapon. Which is weaponizing the Straits of Hormuz. That in my judgment in the end will be the ultimate indicator of who quote, won or lost this war. And frankly, the Iranians will go to extreme lengths to ensure that new rules apply to the straits. Preferential access, prescribed routes, navigation fees, environmental fees. It'll be a protection racket to force shippers and oil exporters to pay. And you know, Panama Canal and Suez, those are man made transit points. They reap anywhere from what, four to $10 billion a year. You're not supposed to charge tolls in a natural waterway according to international law. But the fact is I saw one calculation. Iranians, if you take 100, 230 ships on a day to day basis charged at 2 million a ship, 365 days a year, I mean we could be talking multiple billions of dollars. And the Iranian Revolutionary Guard, Islamic Revolutionary Guard Corps Navy, which is controlling this, sees this as a, as an ATM machine for their own narrow pursuits and use. I think this is the key problem that the administration confronts. And the president is in a box and coming from the NATO meeting, he's in a box, it seems to me, all alone. Where are the Chinese? Pressing the Iranians. They import 80 to 90% of their oil from the Saudis. And the Iranians, where are they? How come they're not pressing? The Europeans, frankly have disappeared largely because the president has criticized them and preempted them. But Trump is in a box and again, I'll say it, he's all by himself. I just don't see how they get how this administration gets out of this without leaving the straits in with an enormous amount of control by the Islamic Republic of Iran. And that's going to be key to the international economy for, for many years to come until alternate infrastructure is developed and of course to the global oil economy.
- [15:03]
Kelly Leinz
Always great to spend some time with you, Aaron.
- [15:05]
Rick Davis
Aaron.
- [15:05]
Kelly Leinz
David Miller has the time and the clock at the Carnegie Endowment for International Peace. Thanks for being with us as always on Bloomberg TV and radio. We'll play this to the panel coming up next on Bloomberg. Rick Davis and Jeannie Shan Zaino, Bloomberg Politics contributors on an important day for geopolitics and domestic politics. The president is heading for the old Air Force One to make his way home. Now stay with us on balance of power. We'll have much more coming up after this.
- [15:34]
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- [16:30]
Kelly Leinz
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Joe Matthew
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- [16:39]
Kelly Leinz
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- [16:44]
Podcast Host
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. You can also listen live on Amazon Alex Alexa from our flagship New York station, just say Alexa play Bloomberg 11:30.
- [17:02]
Joe Matthew
I'm Kailey Leinz alongside Joe Matthew here in Washington on Bloomberg TV and radio and on YouTube. And if you're with us on YouTube or on Bloomberg TV, we're showing you a live look now of the presidential motorcade just rolling up to Air Force One at the airport in Ankara after the conclusion of the NATO summit hosted of course this year by Turkey. But the plane that the President just rolled up to in the Beast is not the new Air Force One gifted to this president by Cutter, of course, painted in his preferred colors of navy blue instead of robin eggs blue. Robin's egg blue. He's on the old plane for his journey home. The new one instead is going to go to Europe and apparently be showed to American troops on our European bases. Joe he was asked about this in the press conference he gave at the conclusion of the summit and he went to a place of security concern concerns and previous attempts on his life that Iran has sponsored. He suggested I'm number one and this is a quote on the kill list for Iran going on to say they're lovely people. As he climbs now the stairs of
- [18:07]
Kelly Leinz
Air Force One, he said, I like being number one on TikTok better, Kelly, and we should be careful to connect the dots on this. The President didn't speak directly to that decision to take the old Air Force One home outside of what he had already Written on Truth Social. To your point, he said that it'd be headed to Mildenhall Air Force Base in the UK to give our troops a tour of the aircraft. But he was repeatedly referring to the fact that he is number one on Iran's kill list. We do know that assassination squads from Iran have been in this country seeking to target the President of the United States. And it's clearly something that he is aware of. Repeatedly referring to the dangers that come with this job. We have a lot to talk about with our political panel as the president wraps this NATO summit. We turn to Bloomberg Politics contributors Jeannie Shann Zaino and and Rick Davis. Jeannie is our Democratic analyst and Democracy visiting Fellow at Harvard Kennedy School's Ashe Center. Rick is a Republican strategist and partner at Stone Court Capital. We want to get to the geopolitics involved here, guys. The president saying earlier that the cease fire is over. But Rick, if I could just ask you about this so we don't have to come back around to it. Are you concerned to see the new Air Force One gifted by Qatar stay behind? There are worries that this may not have been clean and may not be a secure jet to carry the President home from the Middle East.
- [19:27]
Rick Davis
Yeah, look, I'm highly confident that, you know, the traditional Air Force One has been hardened in a way that the new jet would not have had the time or the ability to get done. When these things are custom made for the President, United States at the beginning of the construction process, they can do things to really fortify the plane, which they should. When you receive a gift like that from Cutter, they're not going to strip it down and refortify it in a way that is going to reflect the kind of safety and security that the traditional Air Force One gets. So flying around the United States, you're reducing your threat level a lot. Flying overseas, I'm sure the Secret Service has said let's stick with what we know and the defensive measures that are on board. So I think it's a ounce of prevention is probably what was called for.
- [20:19]
Kelly Leinz
I see.
- [20:21]
Joe Matthew
Well, it's incredible to consider, as I mentioned, Jeannie at the end of an answer when questioned about the plane, the president did trail back to the threat against his life and Iran's previous desire to assassinate him. He said there that he's their number one kill target, ending his sentence with their lovely people after earlier suggesting that they were cuckoo, loco, scum, loco, to name a few. Suggesting repeatedly in the last 24 hours that he doesn't necessarily think they are people that can be negotiated. With his rhetoric, Jeannie, would indicate that he is giving up on the diplomatic process. He says he's not even sure if he wants to make a deal. Even as he says he doesn't think the war is going to resume outright. He still declared the Memorandum of Understanding dead. So where does that leave us?
- [21:11]
Jeannie Shan Zaino
Yeah, I have to say I seldom say I agree with Donald Trump, but I agree with him on the MOU being dead. I also agree with what he said three weeks ago when a prolonged war in the Middle east with Iran, the US Israel and extending to the Gulf states would result in an economic catastrophe for the world. And you know, I don't think the United States is going to re engage militarily, but there's a reason we're not going to. It's because we tried a shooting war with Iran, we lost. We tried a blockade with Iran, we lost. We ended up settling for this mou, which flawed is an understatement of this mou. And we're currently trying to work our way out of it. And it is dead at this point. And what's also happening, Kelly, is you've got one of the parties to these negotiations attacking several times the mediators. In what universe can you continue a negotiation when Iran is attacking Qatar repeatedly, they have an attacked Pakistan yet probably because they were in air war with them a few years ago. So that suggests that Iran wants to extend this war to the Gulf states and that is a economic catastrophe for the world. And it suggests that we are not going to see anything but a continuation of this back and forth, economic, political, diplomatic and potential military back and forth between all of these countries for the long term now, which is exactly what we should have been trying to avoid all along, which is why in February and now none of this, what the United States and Israel did made any sense unless we were prepared to finish the job, which means troops on the ground and we never were.
- [23:06]
Kelly Leinz
So Jeannie brings us back to what Aaron David Miller just said, which is the new normal. And Rick Davis, you could argue, realizing that we hit Iran pretty hard last night, that if you back off here, nothing actually has changed. We've had continuous tit for tat strikes with Iran attacking boats and we shoot back, all under the guise of this sort of shooting, cease fire. And nothing really in this world other than the President's rhetoric has changed with regard to the status of the MoU. Is that how you're looking at this?
- [23:41]
Rick Davis
Yes, it's very confused at this point. I applaud Donald Trump for saying that the MOU isn't in force. Because when we define success as getting a deal from Iran, it hands Iran all the leverage. I think that the President ought to rip up the MoU for good. It didn't do anything for us and did a lot for Iran. If Iran attacks ships in the Gulf, they should be responded to. There should be a guarantee by the United States to escort ships through the Strait of Hormuz to get oil out, minimizing the economic impact that Jeannie was just talking about. And if Iran resists, they should be met with serious force. Iran is the largest sponsor of state terrorism in the world, and we cannot treat them as a co equal in a negotiation to basically get them to start stop terrorizing the Gulf. And I just think that this could be a step in the right direction. I would hope that the President would rescind his invitation to his negotiators to spend time continuing to talk about an incredibly flawed agreement. Start fresh, secure the Gulf, get trade going back through there. And if they resist and try to interrupt the free flow of goods going through the Gulf international waters, they should be handled accordingly.
- [24:59]
Joe Matthew
Well, of course, it was the reopening of the Strait of Hormuz that the President really was seeking and that the MOU was supposed to accomplish. And the idea that the Strait may not be free and clear for the time being is what has sent oil prices higher today. But there's also the consideration of Russia as we contend with what's happening not just in crude, but in refined products as well, like diesel. As Russia announced today that it's banning diesel exports after a number of its refineries have been hit by Ukraine. This is actually something we were discussing yesterday prior to that announcement from Russia with oil strategist Tom Closer. This is what he told us.
- [25:35]
Aaron David Miller
The big story that's not getting covered
- [25:37]
Kelly Leinz
that much are the drone strikes in Russia. You know, Russia has probably lost somewhere over a million barrels a day of dollars capacity.
- [25:45]
Aaron David Miller
Every week you see more large refineries
- [25:48]
Kelly Leinz
in Russia set fire and they're not going to be back any time in 2026. It looks like Russia is going to
- [25:56]
Aaron David Miller
see lower and lower refinery runs because
- [25:59]
Kelly Leinz
Ukrainian drones are going to strike them.
- [26:01]
Aaron David Miller
If the President really wants to impact the oil market right now, he would, you know, basically go 24, 7 and
- [26:09]
Kelly Leinz
try to get a peace deal for Ukraine, Ukraine and Russia.
- [26:14]
Joe Matthew
And Jeannie, President Trump did have a bilateral meeting today with the Ukrainian President, Vladimir Zelinsky, and said that the U.S. would be licensing Patriot missile systems for Ukraine to produce in country. Is this a sign that the president is ready to get a peace deal for Ukraine more materially ready and more on Ukraine's side perhaps than he was?
- [26:38]
Jeannie Shan Zaino
You know, I think it's hard to say because of course, this has been a real sort of engagement in my view on the part of the president and then a sort of lack of engagement, chastising Zelensky back and forth. So, you know, I think this is part of the problem. You know, Trump's way of dealing with these international issues has been to keep people on their toes, not know what to expect. But of course, that can work in some places. But in other places it means you don't really know is Donald Trump going to follow through with what he says? Is he going to engage long term? And, you know, as we step back and look at whether it's Iran, whether it's Russia and the issue of the economic impact and the price of oil, this is where the president was right again three weeks ago when he talked about the catastrophe. Economically, this is and it's not just the Iran, it's not just the strait issue, it's Russia as well. And unless it is addressed in total, and that is not going to just be something United States can do independently. We need our allies. We need all of our European and NATO partners. And this is why I was happy to hear, you know, a slightly nicer tone to NATO in this presser. But this has been a back and forth all year with the president and it leaves us in a difficult position economically.
- [28:02]
Joe Matthew
All right, Jeannie, Shan Zaino and Rick Davis, Bloomberg Politics contributors. The both of them, thank you so much for joining us. And as we consider Russia and that diesel export ban, yes, oil prices are moving higher today. I would point you to diesel futures too, right now up about 10 and a half percent on the session. We'll have more ahead here. On Balance of Power.
- [28:20]
Kelly Leinz
Stay with us. On Balance of Power. We'll have much more coming up after this.
- [28:26]
Public.com Advertiser
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- [29:22]
Joe Matthew
Public Investing Brokerage Services by Open to
- [29:25]
Kelly Leinz
the Public Investing Inc.
- [29:26]
Joe Matthew
Member FINRA and SIPC Advisory Services by Public Advisors LLC, SEC registered advisor.
- [29:32]
Kelly Leinz
Complete disclosures available@public.com disclosures.
- [29:36]
Podcast Host
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. You can also also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.
- [29:55]
Kelly Leinz
I don't know if the dip buyers are getting at it, but as Charlie made clear, stocks are pulling off their lows, oil's pulling back from the highs, and we want to go a little bit deeper under the hood right now with Nora Melinda, Bloomberg's markets correspondent, who is live at world headquarters in New York. Nora, it's great to have you with us here. I'm not sure what's getting your attention, but we're seeing obviously slightly improved conditions from where we started the day.
- [30:19]
Nora Melinda
Yes, slightly improved. I was just looking at the S&P 500 earlier, just hitting a few minutes ago a session high. So we are seeing a pairing of some of those earlier declines that of course we saw sparked by President Donald Trump. But we are seeing in the market materials the worst performing group in the S&P 500. The best performing group right now though in The S&P 500 is tech, interestingly so we were seeing a bit of a risk on a risk rather off rally earlier in the session, but we are seeing some pockets of bright spots where we are potentially seeing some profit taking, maybe some dip buyers here in the market right now.
- [30:56]
Joe Matthew
Well, especially after we saw really steep losses for a lot of the chip stocks yesterday. It's interesting to see that reversing today, Nora, but I guess that's just been the story as of late. Some days are good for the AI oriented trade and some days are not. Well Kelly, it's been a bit of
- [31:13]
Nora Melinda
a push and pull. I honestly feel so dizzy just trying to keep up with chip makers and how investors are viewing tech right now. On the one hand, you have investors that are concerned that these companies have taken on way too much debt and maybe we've seen a rally in tech go too fast, too far. But I mean, potentially on the other end, you have people saying that, you know, tech is the way to go and there are pockets of opportunity. But what I've been hearing from sources as well is that, you know, a richly valued market is more vulnerable to some of the negative headlines that we've been seeing. So you will expect some of these things after a strong rally. As we think about the broader macro picture, investors are all still thinking about inflation, especially with these renewed fears about energy. Also supply disruptions potentially. And when we think about the Strait
- [31:58]
Kelly Leinz
of Hormuz, interesting to see in video moving higher today, it's actually doing pretty better than we've seen in several sessions here, up 3% as China greenlights some sales of H200 chips microns getting a little bit of a bid. It was actually higher earlier and now down just a fraction of 1%. Interest rates are another story, Nora. They've been pretty sticky here and pretty stubborn. When you look at the 10 year holding well above four and a half, 4, 5, 7, the two years at 421, obviously the long bond has been holding well over 5%. This is keeping a lid on things, huh?
- [32:33]
Nora Melinda
Certainly, especially as we think about the bond market more broadly and how investors are thinking about it there. In the equity market, we have been seeing of course, still double digit gains if you look at the year to date scope for the nasdaq. So as we continue to keep an eye on tech, we are still seeing strength there. So while we have been seeing these headlines that have been rattling markets here and there, you are still seeing investors pushing through and along. And what I've also been hearing from my sources is just the idea of maybe some short term volatility, but not necessarily that reflecting on the broader landscape and outlook for the market more broadly.
- [33:12]
Joe Matthew
All right, Bloomberg Markets correspondent Nora. Melinda, thank you so much. As Nora said, markets are being rattled by headlines here, specifically when they are coming from President Trump and when they are pertaining to Iran, as he declared the memorandum random of understanding dead, the cease fire over and suggested that the US could once again strike Iran tonight. So for more we turn to the former chair of the House Financial Services Committee and former speaker pro tem now Bloomberg Politics contributor Patrick McHenry. Mr. Chairman, always good to have you. As we consider this notion of resumed hostilities with Iran, even if the president suggests that we're not going back to war, war outright, I would imagine if you're a member of the House or someone up for reelection in the Senate and you're Home. Right now you're having to answer to this for your constituents.
- [34:03]
Nora Melinda
Right.
- [34:04]
Joe Matthew
I would imagine that as we draw closer to the midterms, these kind of headlines only get harder for electeds to, to navigate.
- [34:12]
Patrick McHenry
Yes, it's uncertain, uncertain for all of us watching the situation, but particularly jarring for those seeking reelection and trying to give your constituents a sense certainty, especially about the cost of things in their life, particularly gas prices. It's very hard for an elected official to say that we're in much better shape than we otherwise should be. Given the fact that the straits are affected. The Strait of Hormuzza is effectively closed. That's a very hard message. But America is in a dramatically better position than where we've been in previous generations with our oil supply and production and refining capacity here in the United States. That's a lame message to take if you're running for reelection, that things could be worse. That is never a good election year message, but that's what they have to contend with right now.
- [35:07]
Kelly Leinz
As somebody who's run for reelection a couple of times, Mr. Chairman, you wonder what the mentality is going to feel like by Labor Day. And I don't know if you buy into that, that long standing bit of wisdom that people start to solidify their opinions right around the beginning of September and that's when these races start to start to harden, that the races start to codify themselves based on what we're seeing in the current standing in the polls right now, I guess everybody's on the beach, you know that they're not paying quite as much attention. But when does $3.79 become a real problem for consumers who are starting to make decisions for November?
- [35:44]
Patrick McHenry
Well, it's currently a problem for families that are traveling this summer. This is prime travel season 5 motoring season in the United States.
- [35:54]
Kelly Leinz
And when do they connect the dots to elections?
- [35:57]
Patrick McHenry
But you're right, Labor Day, it does solidify. Everything kind of crystallizes and feelings get locked in. And since election day is no longer really Election day, once you hit the month of October, you have people voting, starting to vote across the country. That means that you basically have a month long election day here in the United States. And so you really want to have your act together. And as an incumbent running for reelection, especially as a Republican going into midterm, it's going to be tough. It's a very tough message. So that is when you want to have things, things have a smoother path forward when it comes to Iran. And with energy prices, you want to see Things starting to recede by then. Otherwise it's going to lock in a very negative view for Republicans, a negative view for President Trump going into Election Day, which, which is really catastrophic for House Republicans especially, and some Senate races as well.
- [37:00]
Joe Matthew
Well, I'd like to ask you about one Senate race race in particular, the Senate race in Maine. We are still waiting to see what Graham Platner's future will be if he does ultimately drop his campaign in his bid to unseat Susan Collins in the face of sexual assault allegations, which of course he denies. Mr. Chairman, if you're Susan Collins right now, is it heartening to know you may have a new opponent in a matter of weeks who isn't going to have as much time to build up support, or did you want to run against Graham Blattner?
- [37:34]
Patrick McHenry
No, I think, I think Senator Collins wanted to run against Graham Platner. And the Democrats started to understand that with multiple serious allegations and each one becoming more damning and less defensible for the Democratic Party. And as late as three days ago, you had Democratic operatives, especially from the socialist wing of the party party, defending every bit of allegation against, against Graham Platner. It's troubling for them to have to answer for that. But there's this larger divide within the Democratic Party we're going to see come to four, which could be a benefit to Senator Collins and to Republicans generally, which is the divide within the Democratic Party between the socialist left that is ideologically fixed. They were hoping that a grand platinum working class looking guy who was, you know, you know, went to elite boarding schools, but they've tried to write that out of his narratives. But the socialists wanted a white working class guy to make this look like instead of an elite intellectual activity from the socialist and not diverse, they were trying to show a level of diversity with this ideology that's never been evident. And so, so you're going to have that wing of the party versus those that really want to win with a more pragmatic view, though, liberal. And those things are going to play out in coming days in Maine and we're going to see that really open up. Not just what happened in New York and New York primary elections from a few weeks ago, but to show an additional state that you have this serious ideological divide within the party between moderate or liberals versus the very far left socialist wing of the party driven by Elizabeth Warren and Bernie Sanders.
- [39:22]
Kelly Leinz
Well, the main Democratic Party does not seem divided on the issue of getting Graham Platner out of the race and keeping him out of whatever comes next. Pretty dramatic stuff, Mr. Chairman, from Devin Murphy Anderson, the executive director of the Maine Democratic Party, who was so upset about what she was hearing and overtures apparently, from the Platner campaign that she put up this video to send a very stern message. Let's watch and listen.
- [39:47]
Joe Matthew
The Maine Democratic Party has been working around the clock to develop a process to replace our U.S. senate nominee that is open, inclusive, transparent, and fair. The integrity of this process is just as important as the outcome, and we are committed to ensuring that Democrats across our state can have confidence. Unfortunately, Graham Platner's team has repeatedly reached out to us in an attempt to put their thumb on the scale of what this process looks like.
- [40:18]
Kelly Leinz
Wow. So what do you see here, Patrick McHenry, some sort of shotgun primary process? What. What could the party do in Maine to satisfy voters that they had a say in this and that Platner's thumb was not on the scale?
- [40:32]
Patrick McHenry
Nothing. All of it. All, all. It is a show. This is what happened with Kamala Harris replacing Joe Biden after it became evidence of his inability to see through a successful election as President Trump. So it's going to play out like that again. You're going to see theater about inclusivity and input. But the party apparatus and party rules dictate, and state law will dictate this replacement process, which is very, very closed circuit in the, in the Democratic Party within Maine, just like most parties across the country. This is a closed door, effectively a closed door event, but they'll have some theater to show inclusivity. The word integrity, though, is very interesting to hear. The Democratic Party is trying to regain their sense of integrity, having done this elaborate dance to defend Graham Platner in the hopes of gaining the Senate seat. Both parties, in fact, my friends and Republicans in Texas are doing something similar around a, you know, a pretty bad Republican nominee in the Texas Senate race. So both parties are dealing with this. And these are, these are, these are things that parties have to deal with from time to time. And unfortunately, we're all going to be able to. Unfortunately for Democrats in Maine, they're the ones that have to go through this pretty nasty and arduous process to find a way to salvage an election in Maine.
- [41:59]
Joe Matthew
We just got a headline crossing from the Washington Post that Platner will be speaking about the future of his campaign tonight. So I guess we'll see if that is when a formal announcement will come. Of course, CNN had early reported there would be a video. I guess we will all stay tuned to find out. Mr. Chairman, thank you so much for your time. As always, the former chair of the House Financial Services Committee and now a Bloomberg Politics contributor, Patrick McHenry. And McHenry, of course there was talking about Ken Paxton or alluding to him, another candidate whose morality has been in question and yet is the nominee in the Senate race. But of course there are other questions around where the lines are in politics in a modern age in which you also have a president of the United States who was found liable for sexual abuse.
- [42:43]
Kelly Leinz
That's correct. This is not going to get easier for Graham Platner. And when he speaks tonight, I of course we'll be listening and let you know more. The Washington Post saying that the campaign team held a call this afternoon. Leadership sounded resigned to the idea that it could be ending soon. This is Bloomberg. 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 eastern@bloomberg.com
- [43:15]
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