US Hiring Slows, Curbing Momentum

Summary

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Balance of Power – US Hiring Slows, Curbing Momentum

Podcast: Balance of Power (Bloomberg)
Episode Date: July 2, 2026
Hosts: Kelly Evans, Kaylee Hartung
Key Contributors: Michael McKee, Jason Smith, Susan Del Bene, Rick Davis, Matt Robison, Eric Weiner
Theme: Analyzing the weaker-than-expected June jobs report, reactions from Washington, and the intersection of key economic and political developments as the US approaches its 250th birthday.

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Overview

This episode centers on the surprising slowdown in US hiring as indicated by the June jobs report and its implications for the broader economy, the Federal Reserve's policy, and political narratives ahead of the July 4th holiday and the semi-quincentennial celebrations. The conversation brings together economic analysis, Congressional perspectives, and political panel insights, also touching on AI, party polarization, fundraising, and a rare policy debate regarding government stakes in AI firms.

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Key Discussion Points

1. June Jobs Report: Surprise Slowdown

Segment: 00:55–06:22

• Report Highlights:

  • Only 57,000 jobs added in June, well below expectations (most forecasts were ~200,000).
  • Downward revisions to the previous two months' reports.
  • Significant drop in labor force participation (down by 720,000) and a 61,000 job loss in leisure & hospitality—the largest since 2020.

• Interpretation of the Data:

  • Michael McKee: Suggests that some figures are statistical anomalies, possibly due to survey errors or seasonal adjustments. Economists may "take some of that with a grain of salt" (02:30).
  • The Fed is likely to focus on the steady, low unemployment rate, interpreting the data as signaling at least stability for now.

• Implications for Interest Rates:

  • Consensus: Rates will likely remain on hold through 2026 unless inflation data change substantially.
  • Quote: "At this point, it looks like the most likely outcome is they just stay on hold for the rest of the year.” – Michael McKee (04:03)

• Consumer Perspective:

  • Weak job growth is a public concern—“the story…that will get printed in the small town newspaper is going to be that hiring is weak.” (05:11)
  • While wages have ticked up, real earnings still lag behind inflation, continuing to be a challenge for the President.

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2. Congressional Response: Rep. Jason Smith (R-MO), House Ways and Means Chair

Segment: 07:24–15:42

• Views on Economic Data:

  • Questions data validity due to frequent, sizable revisions; calls for better data quality.
  • Quote: “We need to do a better job on that.” (07:24–09:06)

• Impact of the "One Big Beautiful Bill":

  • Shares anecdotes of constituents benefiting from tax credits and tip tax relief.
  • “I had a young lady…say thank you. I just did my taxes. I got a refund of over $10,000.” (07:24)

• Legislation Outlook:

  • Focus on bipartisanship within Ways and Means (fostering initiatives for foster children, bipartisan tax, trade, healthcare bills).
  • Open to using reconciliation as a tool, but emphasizes House focus on passing legislation by simple majority.

• Social Security Reform:

  • Emphasizes need for bipartisan action to address Social Security insolvency, open to all ideas.
  • Quote: “We ultimately cannot fail with the American people because too many people, including my mother, relies on Social Security.” (11:54)

• USMCA (Trade):

  • Supports tougher US negotiating stance with Canada and Mexico to ensure original trade deal terms are honored.

• AI and Government Involvement:

  • Acknowledges the national importance of US leadership in AI but expresses skepticism toward government taking equity stakes in tech firms, aligning with preference for limited government intervention.
  • “Let me tell you I'm about the government's less involvement in everything… government’s too big and it needs to be limited.” (15:29)

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3. July 4th Celebrations & Politics of Patriotism

Segment: 17:43–29:12

• Semi-quincentennial (America 250):

  • Extreme heat and air quality concerns expected to hamper attendance at National Mall events.
  • Highly politicized celebration environment, with dueling “America 250” (bipartisan, congressionally-endorsed) and “Freedom 250” (Trump-aligned) operations sparking fundraising disputes.
  • Rick Davis: "Unfortunately, inside the Beltway…is a cesspool. Makes the reflecting pool look clear.” (23:15)
  • Matt Robison: Stresses ongoing patriotism, community spirit, and nonpartisanship among most Americans.

• Panel Reflection on US Party System:

  • Discussion on rising polarization and potential fractures in the two-party system.
  • Joe Weisenthal: Notes growing share of new voters registering as independents, reflecting disaffection with both parties (27:14).
  • Rick Davis: Endorses bipartisan cooperation as a hopeful note for the nation’s next 250 years (28:26).

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4. Campaign Fundraising in the Wake of Supreme Court Rulings

Segment: 30:46–40:03

• Impact of SCOTUS Decision:

  • Recent Court ruling allows closer coordination and higher spending between candidates and campaigns.
  • Susan Del Bene, DCCC Chair: Frames the ruling as a Republican power-grab in response to losing ground.

• Democratic Fundraising Response:

  • Notable spike in DCCC contributions post-ruling—$400,000 in 24 hours, 20% from new donors.
  • “People across the country hate what Republicans are doing here. They hate the decision of the court.” – Susan Del Bene (33:40)

• Primary Dynamics:

  • Acknowledges a handful of Democratic Socialist primary victories, primarily in very blue districts.
  • DCCC focus remains on competitive purple/swing districts for November.

• Progressive Movement and the Democratic Party:

  • Opposition utilizes the rise of progressives/Democratic Socialists as a campaign wedge.
  • Del Bene asserts moderate, service-oriented credentials of key swing district candidates.

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5. Markets & AI: Rotation and Policy

Segment: 40:49–43:39

• Market Trends:

  • Major rotation out of chip/AI stocks amid volatility and uncertainty about long-term capital allocation.
  • Eric Weiner (Senior Equities Editor): “It’s a market led by a very strange group, which is chip stocks.” (41:12)

• AI Trade & Policy Connection:

  • Ongoing debate about possible public stakes in AI majors like OpenAI, Alphabet; hosts and panel discuss the market and policy risks of such moves.

• Light Moment:

  • Breaking news: President declares "National Scallops Day" (43:39) – a quirky aside noting the mix of hard policy and lighter political theatre.

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Notable Quotes & Memorable Moments

• Michael McKee:

  • "People are going to just kind of take some of that [employment data] with a grain of salt and they're going to do the same with the leisure and hospitality you were talking about... probably some seasonal adjustment issue there and then maybe something else statistically. Fluky." (02:30)

• Kelly Evans:

  • Commenting on jobs data: “Should we not be seeing that show up more materially in the economy by now?” (06:23)

• Jason Smith:

  • “Those are pretty big things for just everyday, average Americans." (08:18)
  • “I'm about the government's less involvement in everything, so across the board I'm worried about that.” (15:29)

• Rick Davis (On America 250):

  • “But look, I mean, all of this stuff, unfortunately, inside the Beltway... is a cesspool. Makes the reflecting pool look clear.” (23:15)

• Joe Weisenthal (On party realignment):

  • “More and more voters are just basically rejecting the concept of being a Republican or a Democrat... new registrants are basically splitting 27, 27% each for Republican and Democrat, but the rest are all identifying as independents...” (27:14)

• Susan Del Bene:

  • “They want to be able to pick their representatives, not have politicians pick their voters.” (33:40)
  • “We're winning across the country and we're focused on the issues that matter, number one being the economy and the challenges that families are facing.” (37:13)

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Timestamps: Key Segments

| Time | Segment Description | |-----------|--------------------------------------------------------------------| | 00:55 | Jobs report analysis begins | | 02:30 | Michael McKee on anomalies in the June data | | 04:03 | Fed outlook on interest rates | | 05:11 | Consumer sentiment and political implications | | 07:24 | Rep. Jason Smith on jobs bill impacts, anecdotal stories | | 09:06 | Calls for better economic data | | 11:54 | Social Security reform and insolvency concerns | | 13:25 | USMCA trade deal commentary | | 14:44 | Government/American stake in AI companies debate | | 17:43 | July 4th event preview, political overtones | | 23:15 | Fundraising dispute: Freedom 250 vs. America 250 | | 27:14 | Political panel: party polarization and the rise of independents | | 30:46 | Supreme Court’s political spending ruling, impact on fundraising | | 33:40 | DCCC’s fundraising surge post-ruling | | 35:24 | Democratic Socialists’ primary victories discussion | | 38:55 | Purple district case study – NY-17 | | 40:49 | Market rotation, chip stocks volatility, AI public policy | | 43:39 | National Scallop Day announcement – lighter moment |

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Final Takeaways

• Economic Signals Are Mixed: The June jobs report surprised markets and politicians alike—revealing both statistical confusion and real economy anxieties. The Fed is expected to hold steady barring dramatic new data, and the White House faces a narrative challenge as real wage growth continues to trail inflation.

• Political Divides and Policy Shifts: With the country on the brink of its 250th anniversary, the hosts and guests reflected on increased partisan divisions, a volatile legislative environment, and questions about whether the US political system will adapt to rising independent voter sentiment.

• Campaign Capital and Court Decisions: Recent SCOTUS rulings are shifting the campaign finance environment; Democrats are capitalizing on donor outrage, but the overall regulatory environment is expected to exacerbate partisanship ahead of the midterms.

• AI’s Central Place in Markets and Policy: The ongoing volatility in chip/AI stocks and the policy debate over public versus private control of foundational technologies offers another prism of both opportunity and debate in the current US landscape.

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Summary prepared for those seeking an in-depth, accessible, and balanced understanding of the episode without needing to listen in full.

Transcript

[Joe Weisenthal]

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[Kelly Evans]

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[Joe Weisenthal]

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[Kelly Evans]

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[Kaylee Hartung]

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[Joe Weisenthal]

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[Kaylee Hartung]

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[Kelly Evans]

deep in the work that moves the business. Let's create smarter business. IBM

[Podcast Announcer]

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.

[Kelly Evans]

Checking out the markets on this Thursday that is helping us close out the trading week because yes, of course, tomorrow, the holiday ahead of the July 4th holiday, which is on a Saturday this year, which is why we have the very unusual Thursday jobs report. We don't see that very often, but of course it was today that we got the print due to the holiday, and the print was weaker than most economists expected. I believe only one in the Bloomberg survey thought the print would be as low as it was at 57,000 jobs added in the country in the month of June, and downward revisions as we mentioned, to the prior two months as well. So it paints a picture of a labor market that perhaps is not as strong as the White House was like to sell it. As though certainly we did hear the National Economic Council director Kevin Hassett saying that this is still a strong labor market we're seeing when he spoke to our colleague Dani Berger earlier.

[Michael McKee]

I think this is a really strong, healthy job market and that this was a little bit on the other side of expectation. But the trend over three or four

[Kaylee Hartung]

months is consistent with our view that again, that we were growing about 3%

[Rick Davis]

and that we're going to have a

[Michael McKee]

better second half of the year as

[Kaylee Hartung]

those factories turn on the lights. Interesting that we want to spend some time on this with Michael McKee, Bloomberg's international economics and policy correspondent, with questions about why the number could be so far off and in fact, if there is strength under the hood as Kevin Hassett suggests. Mike, we're confounded by the numbers. By, by the way, was far beyond the market consensus at 200,000. We saw the biggest decline in leisure and hospitality payrolls since 2020. We saw the pullback in participation. What do you make of all this?

[Michael McKee]

Well, I think there are parts they're just going to get tossed out by economists. They're not going to really worry about it because they're so out of line that they have the characteristics of things that are just randomly, statistically weird and they'll probably snap back. And one of them is the labor force falling by 720,000. And as part of the unemployment report, the household survey of employment fell by 500,000. And that's kind of a ridiculously high number. So people are going to just kind of take some of that with a grain of salt and they're going to do the same with the leisure and hospitality you were talking about, that loss of 61,000 jobs. This is the time of year when normally leisure and hospitality establishments are hiring people. So there's probably some seasonal adjustment issue there and then maybe something else statistically. Fluky. And so really what it comes down to is the Fed is going to do what it always does and look at the unemployment rate and say the unemployment rate is as low as it probably will go, and that means we have at least a steady stable labor market for the moment.

[Kelly Evans]

Well, so if, if that's how the Fed will read it, it may not call for rate hikes this year then, Mike. But maybe not call for rate cuts either. Is the picture, economic picture we're seeing painted here, one that suggests that actually rates probably are where they need to be right now?

[Michael McKee]

I think that's going to be the majority of opinion on the open market committee. They will have to look at the latest inflation figures when we get them and see if they have eased somewhat now that oil prices are going down. And if that's the case, they'll probably stay on hold. There is sticky inflation on the services side of the economy that is not related necessarily to either tariffs or to the war. And if that continues, there'll still be some hawks who are worried about it. But at this point, it looks like the most likely outcome is they just stay on hold for the rest of the year. The markets still think at the moment that they will raise rates by the end of the year. The December Fed funds futures suggest that. But that obviously is going to move around a lot as we get more and more details.

[Kaylee Hartung]

We've talked so much about the affordability issue with regard to the consumer. Mike, we're looking at $68 a barrel oil for WTI. I'm looking at $3.83. Gas prices slowly coming down. Could we start to see a reflection of that in consumer sentiment surveys in the months ahead?

[Michael McKee]

Well, it's something to watch for. We thought we might see that in the conference Board Consumer Sentiment Index confidence Index that came out earlier this week and we did not. But it may have been just too the survey and too uneven because gas prices vary around the country. However, as we go forward, we should see that improve a little bit. Probably the more worrying thing for the administration is the consumer confidence numbers from the conference board showed declining trust in the job market, concerns about what the labor market is going to be. And then in today's jobs report, you had the weak hiring, which as I said, won't matter so much to the Fed, but that's the number that kind of will stick in people's minds. You know, the, the story that will get printed in the small town newspaper is going to be that hiring is weak. And so that's an issue for the President. And then the, the whole question of average hourly earnings, while they ticked up a little bit, they're still well below inflation, Americans are still losing ground. And that is of course, as you know, a big cross for the President to bear at this point.

[Susan Del Bene]

Mm.

[Kelly Evans]

All right, Bloomberg's Michael McKee in New York, our economics and policy correspondent. Thank you so much for joining us. And with the economic picture that Mike just described, we want to turn now to Capitol Hill where we still find the chair of the House Ways and Means Committee. Congressman Jason Smith of Missouri is joining us. He might be one of the very few people left in the rotunda after the House went home for the July 4th recess a bit early. Mr. Chairman, it's good to have you back on Bloomberg TV and radio. I hope you find yourself in a, well, air conditioned space as it is very hot here in the capital. I'm sure you heard some of what our colleague Mike was just describing. The weakness we have seen in consumer confidence data, some weakness in hiring, specifically economic data that does not paint a picture of an economy that has reaped massive benefit from the one big beautiful bill that was signed almost a year ago. Should we not be seeing that show up more materially in the economy by now?

[Jason Smith]

You know, I think the bigger question is, is to look at all these reports and the data because they've been all over the place. And so there's a reason why they've been all over the place. And then whenever they go back and revise the prior month's reports being so far off that that shouldn't be the case. We need to do a better job on that. But in regards to what I'm hearing from people on the ground of what they've experienced, experience from the working families tax cuts the big beautiful bill. A lot of people's very happy. I had a, I always point to this, this young lady two months ago who, who stopped me in Fredericktown, Missouri, and she's like, congressman, I want to say thank you. I just did my taxes. I got a refund of over $10,000. This was a single mom of three kids who benefited from the expanded child tax credit of $2,200 made permanent. Plus she was a waitress. No tax on tips. Plus she works overt in overtime. And because of that, she said, I'm going to be able to pay for my rent for an entire year. I had a waiter that came up to me and said, because of the no tax on tips alone provision, it's going to allow them to pay for their utility bills for the whole year. Those are, those are pretty big things for just everyday, average Americans.

[Kaylee Hartung]

Yeah. And I know that you're celebrating one year since the bill crossed and we'll be talking about that more. I just. Chairman, I want to go back to the your answer initially on the jobs report today. Are you concerned that there's bad data in the system, that these anomalies are because of a poor response rate, that we're not actually seeing a reflection of the economy in these reports?

[Jason Smith]

I absolutely have concerns with the data and that we need to make sure that the data gets better because consistently the reports are revised every month. Let's get it right. And I think that's because the data has just not been proper.

[Kelly Evans]

Well, I guess we'll look to see if the data becomes more clear as the months go on. Obviously, as we talk about the one big beautiful bill one year on that was budget reconciliation 1.0. We just saw recently 2.0 cross to fund ICE and CBP. Now there is an active conversation, as I'm sure you're well aware, Mr. Chairman, about reconciliation 3.0. How quickly is there a real chance of that getting done when currently nothing is able to get across the House floor to do to certain colleagues of yours who want to see the Save America act passed by both chambers first?

[Jason Smith]

You know, I'm focused on legislating. I'm focused on accomplishing great pieces of legislation, putting them on the president's desk. We did that in the one big beautiful bill, which was a partisan approach. It was a reconciliation bill. Now, on the Ways and Means Committee, we're working on a lot of bias, bipartisan things. For example, the first Lady's Fostering the Future initiative to help foster kids who are aging out of the system. It passed out of the Ways and Means Committee and the House of Representatives with every single Republican and every single Democrat voting for it. We're also working on some bipartisan tax issues and bipartisan trade and bipartisan health care. That is what we need to deliver to the president's desk. That's what we can accomplish over the next very few legislative days that are left.

[Kelly Evans]

So is the Ways and Means Committee. Mr. Chairman, not currently looking at any possible tax provisions that could be folded into a third reconciliation bill?

[Jason Smith]

Oh, we absolutely are looking at every vehicle that could be used. Reconciliation, though, is only a tool of the United States Senate. It allows them to overcome the 60 vote filibuster rule and to just pass with 51 in the House of Representatives. We just need to pass the good tax policies, the good legislation. And that's done with the simple majority, whether you do it in reconciliation or not. And that's what we're focused on, is trying to deliver legislative means. But let me tell you, I have a list of ideas that I would love in any piece of tax legislation moving forward.

[Kaylee Hartung]

I'm curious your thought on this idea by Elizabeth Warren and Bernie Moreno to see a D and an R combine on this is interesting. A proposal to eliminate the Social Security tax cap, which would mean a pretty big increase. And you can, I'm sure, quantify this more on top earners. The idea to prevent cuts to benefits as soon as 2032, is that an idea you would support?

[Jason Smith]

You know, it's a big concern about the insolvency of Social Security, which is expected at 2032, also with Medicare. And it's something that Republicans and Democrats have to come to the table, figure out something. And it has to be bipartisan. It cannot just be with one party fixing this. And I think we're going to have to look at every, every idea that's out there, both Republicans and Democrats, because we ultimately cannot fail with the American people because too many people, including my mother, relies on Social Security.

[Kaylee Hartung]

Well, I'll tell you what. You know, you can, you can of course pass a lot of bills, but you need the President to sign them. And I'm just curious if you know anything about the bipartisan housing bill. We've had so many Republicans and democrats join us. Mr. Chairman, most recently last evening, Mike Flood trumping the benefits of this bill that the President calls a big yawn. Do you know if he plans to sign it?

[Jason Smith]

I don't know what the president's intentions are in regards to the housing bill. The housing bills within the financial Services Committee. So I'm truly just focused on tax trade and health care. The president keeps me fairly busy whenever we, we're looking at those three different areas, but I couldn't predict what, what happens in regards to the housing bill.

[Kelly Evans]

Okay, so I'll pick one of those three areas. Trade. The US Announced yesterday it doesn't intend to renew the USMCA trade agreement. What will that mean for our economy if we move from a trilateral deal to potentially two bilateral deals or pull ourselves out of this altogether?

[Jason Smith]

You know, when I look at the usmca, the trading relationship with Canada in Mexico, it's super important. It's important to all three countries. But have they been fulfilling and honoring the parameters of the original usmca? Absolutely not. We've been raising concerns where, for example, the Canadians when it comes to dairy, the issues that they've been doing there. We also had issues with Mexico when it came to corn. I represent a very rural congressional district and these issues are very, very important to my people. And I appreciate the administration's not just going to sign off on, want to continue negotiations. They're not saying we don't need a trading relationship with Canada and Mexico. They're saying that we need a better trading relationship with Canada, Mexico, and I'm 100% behind that.

[Kaylee Hartung]

Mr. Chairman, we've only got a couple of minutes left. I'd love to get your take on this story about the government potentially taking stake in another company or maybe several companies, as Open Air has reportedly opened discussions about giving the government a 5% stake stake and might include other firms as well, like Anthropic or Alphabet. Is there a national interest in doing so or does that run counter to your conservative values as a lawmaker?

[Jason Smith]

Well, I don't know much about what the proposal is that you're, you're referring to, but what I will say in concept, just, just what I will say in concept is, is that AI is extremely important. It's transformational. We need to make sure that the United States is the leader in AI and not China. That's what we're seeing a battle out in. So many different, different items playing out. I don't know all the details of what's necessary to make sure that the United States is the, is the continuous leader of the world when it comes to AI, But I definitely don't want to allow, allow it to be countries such as China.

[Kaylee Hartung]

Yeah. Some would call it socialism, though, the government taking stakes in private companies. Do you worry about that becoming a trend?

[Jason Smith]

Yeah. Let me tell you I'm about the government's less involvement in everything, so across the board I'm worried about that. I think government's too big and it needs to be limited.

[Kaylee Hartung]

Well, I'm glad you could join us to spend some time ahead of the holiday. Mr. Chairman. Enjoy your fourth and try to stay cool out there if you're staying in town. My God, it's going to be 100 degrees Caylee by the end of this day. And just as hot for the celebrations this weekend. They're now telling people not to attend the rehearsal for the big concert on the Mall tomorrow night. It's going to be too hot. We're going to turn up the air conditioning and come back later this hour. Susan Del Bene, Chair of the dccc. Stay with us on balance of power. We'll have much more coming up after this.

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[Kelly Evans]

like 101 degrees right now. Yes, the heat dome does extend up north. We're not just suffering from it here in Washington, where the real feel currently is also triple digits. We're at an even 100 right now. And it's only going to get hotter as the weekend progresses, including on July 4th, when of course, celebrations are scheduled on the National Mall as they are every Independence Day. Though this one is extra special as it is the semi quincentennial and there are celebrations for America's 250th birthday with 40 minutes of fireworks planned in the district around 11pm Because President Trump is planning to address the crowds on the National Mall before that. Assuming there are crowds. It's going to be really hot. You can't bring in coolers, you can't bring in chairs. There's probably going to be a lot of potential suffering alongside the celebrating in heat like this. But it speaks to one of the many challenges around this event is it's also something that has grown to be quite political due to the heavy involvement of President Trump, who of course has his own Freedom 250 operation beyond the bipartisan America 250, which was of course originally put into place by Congress.

[Kaylee Hartung]

This is going to be quite a weekend around here, by the way, because of the extreme heat. Capitol Police now say the public is not invited to tonight's rehearsal for a Capitol fourth concert. That's the one that runs tomorrow night when the President is at Mount Rushmore, the big one on Saturday. You're talking about you can't bring anything but yourself, basically. And we're going to have that triple digit heat combined with enormous amounts of smoke from what will be a record setting fireworks display which all the Guinness people are here for this. You know, they've got a, they've got to mark down the biggest air show ever, biggest fireworks display ever are both set for Saturday. The National Park Service with documents obtained by the Washington Post, deeply concerned about air quality, predicting very hazardous and unhealthy levels of particulate matter coming from the smoke from the fireworks. The Capitol weather gang at the Washington Post predicting so much smoke will collect over the Mall that it is possible no one will see the bulk of the fireworks.

[Kelly Evans]

Yeah. So we're painting a really celebratory atmosphere.

[Joe Weisenthal]

Absolutely.

[Kaylee Hartung]

We haven't mentioned the fundraising dispute either. We'll get into with our panel should we bring them in? Rick Davis is back with us, Bloomberg Politics contributor, Republican strategist and partner at Stone Court Capital. And Matt Robeson is here to Democratic strategist, former campaign manager. Gents, happy 4th of July when we start talking about America 250 and we'll get into this whole fundraising Mess. The Freedom 250 versus America 250. Rick Davis, are we in a world in which celebrating the country's birthday has become a partisan activity? We're hanging a flag, an American flag in front of your house is an indication of your political persuasion?

[Rick Davis]

Yeah, I don't think it's gotten that far. I think there's been plenty of competition in Washington around who controls what events and, and that kind of thing. I mean, obviously the President, when he took office, created his own group, Freedom250, to compete with the congressionally mandated official celebrations that have worked for years to prepare the country for this great anniversary. But I gotta tell you, Joe, after you and Kaylee's description of the mall

[Joe Weisenthal]

on the 4th of July, who in

[Kaylee Hartung]

the world would go down there?

[Rick Davis]

I mean, isn't there something positive you could say, like, oh, by the way, the hot dogs will be really good or something?

[Kaylee Hartung]

We're working on it. We're looking.

[Kelly Evans]

Well, Joe did mention they're trying to set a Guinness World Record for number of fireworks. You may not be able to see them, but you could still say you were there when the record is set. And at the end of the day, Matt, is this not about patriotism? Are we lacking that? Is this we celebrate 250 years?

[Joe Weisenthal]

I don't think we're lacking patriotism, but I agree. Kelly, you've just done a banged up job of describing what sounds like hell, noxious vapor, stifling heat, a fetid swamp where the reflecting pool used to be. Yeah, I'm not exactly signing up for that. Look, I agree with Rick, though. There's been no better display of the true spirit of America than what's been widely reported around the country. Real Americans welcoming visitors from around the world to our home soil, World cup, showing the generosity of spirit, the friendliness, the neighborliness that really is quintessentially American. So that's what I like to focus on. I was watching the World cup match last night with my family. We had our American flag out, proudly displayed. I don't think that's become particularly partisan yet. As for the celebrations on the National Mall. Yeah, not so much.

[Kaylee Hartung]

Okay, well, that's. I'm glad to hear you're both together on that, Rick. I'll tell you what, regardless of America 250 or Freedom 250, you would have felt that tingle when you saw the Thunderbirds F16 fly over there a little while ago. And it's going to be a riot. I'm sure on Saturday I need to see some of this stuff. But I do want to ask you about the fundraising matter, because this is real news. The Washington Post reports that House Democrats are accusing President Trump's allies of working to divert funds away from the official Congressionally mandated event. You referred to America 250 and toward Freedom 250, whose officials and allies, they say, steered money away from America 250 and toward projects shaped by President Trump. Some donors were given routing and account numbers that directed funds to Freedom250, the Trump event. So what's going on here?

[Rick Davis]

Yeah, Look, I mean, Freedom 250 is basically a for profit organization. The commitment initially was that private funds would be used to foster this kind of patriotic activity. Doesn't seem like a lot of the events have panned out that well. Various celebrations on the mall didn't attract the kind of headliners you wanted, so the headliner became Donald Trump. Now, Donald Trump's given a speech on the Fourth of July. Sure, everyone is just hot in anticipation of that happening for a couple hours before the fireworks. But, but look, I mean, all of this stuff, unfortunately, inside the Beltway, as Matt and I described, is a cesspool. Makes the reflecting pool look clear. And the reality is all going to be investigated significantly throughout the course of this year and next by Democrats in Congress, especially if they get majority. And it'll just add to the frustration that the American voters have about whether or not their leaders in Washington care more about themselves and then voters and citizens of their country. A sad reflection of our country's 250th anniversary.

[Kaylee Hartung]

Look forward to the hearings, huh?

[Kelly Evans]

Well, yeah, especially as we consider the potential outcome of the midterms, as we consider the American voter, though, Matt, knowing that when this country was founded, some of the very founders, though they eventually did divide into factions that turned into political parties, warned against party systems. George Washington obviously didn't want that to happen. And yet here we have not only a party system, but one in which it seems that they're growing farther and farther apart in a country that is getting more polarized, polarized in terms of political opinion than people being brought together. And I just wonder, especially as we consider what we're seeing in this primary season, how you see this playing out. Are we still going to have a two party system or are we going to have a four party system that includes the far left, the far right, and then those more in the middle?

[Joe Weisenthal]

Well, Kaylee, that's a fascinating question. I hadn't really thought about it that way. But you're right, that is kind of the dynamic that we're seeing play out right now where people with outsider credentials are doing well in Democratic primaries. We've seen this kind of dynamic on the Republican side before, of course, the ultimate avatar of the outsider credential is Donald Trump himself. And it does seem like party establishments on both sides do have a vested interest in quietly trying to preserve the system against outsiders who seem pretty bent on radical change. And in the case of the Republican Party, I'm sorry to say, a certain amount of corruption and graft that we're seeing grow up around this Trump administration. The news of how much profit Trump has garnered through his cryptocurrency ventures, the mining venture that Howard Lutnick announced, which is going to profit his sons and Trump's sons, that doesn't seem to be the direction that the American people would want or that the founders envisaged. So I don't necessarily foresee a fracturing of the parties into, into four, but I do see a kind of a common set of shared interests emerging where the question is really going to be, do we want to preserve the system that we're celebrating over the course of 250 years? Do we think that that's been largely successful? Do, do we all feel invested in it, or do we not

[Kaylee Hartung]

weigh in on this? Rick, you were still working with John McCain in the Senate when the Tea Party emerged. You've been through distortions before, particularly in a primary season, particularly in an off year when the party's in a minority position on the Hill. Is this just par for the course or is Kelly right? We could be going outside of the lines of these traditional party structures in this next cycle.

[Rick Davis]

Yeah, look, I mean, there's always going to be the flanks of the party that pose a obstacle to party unity. And, and yet I would say one of the things that is disturbing to me, I'm a big fan of the two party system. I think it's done really well for our country for a long period of time, creating security and prosperity. But at the end of the day, more and more voters are just basically rejecting the concept of being a Republican or a Democrat. I just saw a recent poll that new registrants are basically splitting 27, 27% each for Republican and Democrat, but the rest are all identifying as independents, which is a massive increase in the number of self identified new registered voters going on the independent route, meaning that they're not happy with either party or looking for options. At the end of the day. I was very impressed with your interview just now about with the chairman of the Ways and Means Committee who said, you know what, we're working on all these bipartisan bills and he enumerated a number of them. I never thought today I would hear such a deep throated endorsement of bipartisanship from a Republican in Congress.

[Kaylee Hartung]

So there's hope.

[Rick Davis]

Maybe it's a message for the next 250 years here, here and we will

[Kelly Evans]

leave it on that hopeful note. Rick Davis and Matt Robison, our political panel, thank you so much for joining us on this eve of the holiday weekend and a very happy 4th of July to you. And of course, the conversations around America 250 freedom 250 the semi quincentennial do not Stop with Balance of Power There will be plenty more to come this weekend, including a special broadcast of Bloomberg. This weekend, David Gura, Christina Raffini and Lisa Mateo will be broadcasting live from the Intrepid with special coverage celebrating America's 250th birthday. You can find it all morning on the deck of the Intrepid on the Hudson River. Watch and listen live on Bloomberg Television, Bloomberg Radio and of course the Bloomberg Business app on Saturday, July 4th starting at 7am Eastern.

[Kaylee Hartung]

Stay with us on Balance of Power. We'll have much more coming up after this.

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[Kaylee Hartung]

It is the final trading session of the week and so we'll have a focus on stocks and bonds as we get closer to the close. Won't be back to trading until Monday. It's been a really busy Newsweek that we've packed into a shortened trading week. And the Supreme Court had a lot to do with that, with some landmark rulings this week that got a lot of attention, including first and foremost, birthright citizenship. But the ruling on political spending was key and one that we've been focused on here on balance of power, throwing out federal limits, Kayleigh. To coordinate essentially between spending between candidates and campaigns. And it resulted in, with the analysis, if you buy it, an advantage to Republicans, a huge fundraising hall for Democrats in the House.

[Kelly Evans]

Yeah. And that's what we want to speak to now as well as the climate overall as we get closer and closer to the midterms and of course, are in the thick of primary season. As we turn to the chairwoman of the Democratic Congressional Campaign Committee. Congresswoman Susan Del Benegh of Washington is back with us here on Bloomberg TV and Radio. Chairwoman, it's good to have you and a very happy 4th of July weekend to you. Almost on Joe's point around the Supreme Court decision and the closer coordination we could see with the party committees and individual candidates, the conversation in the aftermath was net benefit Republicans because they have the fundraising advantage. How do you turn this into an advantage for you?

[Susan Del Bene]

Well, you know, we saw this coming. Republicans have been trying to rig the system. They know they're losing and they've attacked everything, trying to attack voting rights, gerrymandering. And obviously with this case to the Supreme Court, traditionally our candidates are stronger fundraisers. Their campaigns have been stronger and Republicans have struggled and they wanted to get rid of limits so that committees could come in and help invest more in their candidates. And that's exactly what the Supreme Court is allowing them to do. We have incredibly strong candidates who running all across the country. We're going to have the resources to make sure they communicate and they're on the side of the American people. That's absolutely why we're going to win. A disappointing decision for what this means going forward and kind of highlights how important it is that Congress takes action on campaign finance.

[Kaylee Hartung]

Well, a lot of Democrats snap to attention, it seems. Madam Chairwoman, thanks again for joining us. Dtrip, according to what I'm reading here, raised $400,000 in the 24 hours following the ruling. Biggest day in more than a year. And 20% of the earnings that day came from over 1,000 new donors, the biggest increase in new donors in a single day this year. Should we also maybe look at this as the best thing that could have happened to your fundraising efforts in the midterm cycle.

[Susan Del Bene]

Well, people across the country hate what Republicans are doing here. They hate the decision of the court. They want to be able to pick their representatives, not have politicians pick their voters. And more and more we are seeing Republicans in an attempt to do that because they know they're losing and people are reacting. We saw that in people reacting because of the gerrymandering that's gone on when people had a say in a right to vote. They rejected Republican attempts here.

[Kaylee Hartung]

And what you're seeing, donations continued.

[Susan Del Bene]

People are standing up, they're speaking out. They're gonna stand up. And this is one way they're also gonna stand up with their votes in November.

[Kaylee Hartung]

I'm sorry to interrupt, but is this wave of donations continuing since that first 24 hours?

[Susan Del Bene]

I can't tell you. I don't have all the exact numbers more recently, but I know people are pretty outrageous. And so I won't put be surprised to continue to see people respond again. They want to make sure that we have elections, that candidates are running those elections, and that it's not just Republicans using outside money to impact elections.

[Kelly Evans]

Well, let's talk about the elections that are happening prior to November. What we're seeing this primary season where we have seen in four instances, instances Democratic Socialist candidates victorious in primaries and in multiple cases ousting incumbents. We could see a few more instances of incumbents facing DSA challenges or challengers younger than them, the likes of Wesley Bell or Ed Case or Joe Larson. Does dtrip plan on spending on behalf of the incumbents in those races?

[Susan Del Bene]

Well, first of all, you're talking about a handful of races in very, very bright blue districts. Our focus is on those purple districts. Those are the ones that are going to decide the majority. The DCCC is working with our in our opportunities across the country to flip seats to take back the House. Those purple seats absolutely have incredible candidates running who are actually winning across the ideological spectrum to bring folks together to win in these swing districts. That's our goal, make sure we take back the majority. And that's where the D trip is focused.

[Kaylee Hartung]

We have been hearing from a lot of Republicans, as you might imagine, Congresswoman, about these self described Democratic socialists as a national trend. And they're celebrating these wins as they come along in primary season. In terms of the Progressive Change Campaign Committee, though, they're embracing the criticism from Republicans and in fact trying to turn it against them. You might have seen this new ad in which they highlight Speaker Mike Johnson his comments about Progressive Democrats, Socialist Democrats, and they just Flip the words and say, yeah, that's exactly who we are. Here's a taste of the ad that's running. They put this on paper, they're saying the quiet things out loud. Replace the two party system with a multi party democracy.

[Michael McKee]

Yep.

[Joe Weisenthal]

Expand the House of Representatives.

[Podcast Announcer]

That's right.

[Kaylee Hartung]

You see progressives candidates saying yep, that's right when he's sending the barbs. I just wonder when we hear so much about the role that Hakeem Jeffries is playing endorsing candidates there in some cases. And I realize to your point, it's only a handful of races. Why not just embrace them and say that there's a big tent in the Democratic Party, maybe enjoy some of the energy behind these campaigns.

[Susan Del Bene]

You know, we are focused on making sure we get done the work of the American people. People are having their say in elections across the country, but the math for the majority, so that we have the gavels to get things done runs through purple districts. And that math has not changed. We have 45 districts where we're on offense across the country to flip seats and across the board, strong candidates talking about the issues that matter, winning in seats where people have many different political views. In fact, these generally are seats that Donald Trump won last cycle. We won 14 of those seats in 2024 with Democratic candidates. We're winning across the country and we're focused on the issues that matter, number one being the economy and the challenges that families are facing.

[Kelly Evans]

Well, your point is well understood, Chairwoman, on focusing on the purple swing district. So let's take one of them as an example. New York 17th currently held by Republican Congressman Mike Lawler. We had him on this program the day after the New York primary when we discovered or learned that it's Kate Connelly. He would be up against someone who is not a Democratic socialist, who could be described as more moderate? That is something he disputed. And he said, look, she doesn't disagree with many of these policies. Does it make it harder for D trip for candidates in the purple district that they're going to inevitably by their Republican opponents be compared to the Democratic socialist movement? And being asked to disavow those policies, does it make your job more difficult even if it isn't directly impacting the candidates in those races, that they may not be Democratic socialist candidates, but are still going to be lumped in with them?

[Susan Del Bene]

Well, I don't think anyone's going to be confused. Kate Connelly has a strong record of service to her community, a strong record of service in the military. No one's going to be confused about where Kate Connelly stands. Mike Lawler, though, has been clearly a rubber stamp for Donald Trump over and over and over again. And he's running scared. And so, you know, instead of focusing on the needs of his community, he's going to say whatever he's going to say because he's trying to protect his seed. But just look at his record, his record of being a rubber stamp for Donald Trump, raising prices on his community. And we have this incredibly strong candidate who has a record of public service who's going to win in New York 17 and no matter what he says, it doesn't stick because it can't stick because when people know Kate Conley, they know it's absolutely not true.

[Kaylee Hartung]

She chairs the Democratic Congressional Campaign Committee.

[Susan Del Bene]

We have all across the country. That's one one instance of districts that we have across the country.

[Rick Davis]

Yeah.

[Kaylee Hartung]

Congresswoman, thank you for joining us. Susan Del Bene, the Democrat from Washington. Happy fourth, Congresswoman. We'll see on the other side of the holiday as we track Wall street as well on this jobs day, far below expectations, 57,000 when we look at payrolls, when the market was looking something in excess of 100,000. Markets keying off of that to an extent, Kelly, but we're seeing this rotation continue with another record likely in store for the Dow industrial Average. But we're watching the Nasdaq and The S&P 500 sink on some tough moves here for chip stocks. Primarily, the semis are being unwound. And we just wanted to compare notes with Eric Weiner for a moment to talk about this. Bloomberg News senior editor for equities joins us live from New York. Is this the real rotation this time, Eric? Is it going to stick?

[Eric Weiner]

Whether it sticks or not is really the question. What's what appears to be going on is sort of a consolidation of the AI trade, where we're really focusing now on the chip stocks, the memory stocks that are part of the build out of the the data centers. But everybody else is kind of taking it on the chin. There's skepticism about the the spending, their skepticism about the spenders, their skepticism about the where the money's coming from because it's not coming from their cash piles, it's coming from equity or from debt. And that raises a whole bunch of other questions about whether this money is going to end up showing up. So once this happens, and I mean, you also have to realize chips are extremely volatile. So they go to through these swings like this a lot and they'll have Their they'll have down years. Micron has lost money in in the last three years. So, you know, this isn't all that weird. It's just it's a market led by a very strange group, which is chip stocks.

[Kelly Evans]

Well, and when we consider the heavy weight that they have in the market, it helps explain why you're seeing a difference in performance between the market weighted and equal weighted S&P 500 today. Certainly when we consider what will have big weighting, though Space X, of course, is now one of the biggest public companies out there. And am I correct, Eric, that it's going to join at least the NASDAQ 100 next week?

[Eric Weiner]

Yes, that. Well, I don't know exactly when, but that is the word.

[Kelly Evans]

Okay. Eligible.

[Michael McKee]

Yeah.

[Eric Weiner]

Yeah. They're going to ease the eligibility. Actually, a bunch of other than the escalation S&P 500, a bunch of indexes are going to allow it in. And we're also going to get the listing for SK Hynix, which is another memory chip maker, and they will probably go right into the NASDAQ 100 as well. And that'll keep this rotation kind of going. The question is whether, I mean, like today we have this upward bias and yet they're selling because of chip stocks. So, you know, at what point the cart leads the horse and the horse leads the cart is really where the market needs to figure things out.

[Kelly Evans]

All right. Eric Weiner, Bloomberg News senior editor for Equities Americas, thank you so much for joining us. And it's fascinating, Joe, to see the market trying to figure out what to do with this AI trade at the very same time that there seems to be an active conversation in Washington about the government having a stake in some of these AI companies opening. I were to go public and be subject to this kind of volatility and the US government would have a 5% stake in that game. Maybe it's not necessarily a good thing.

[Kaylee Hartung]

It's worked out pretty well for intel so far, but that might be a little bit difficult to duplicate. Kelly, we should note breaking news, President Untrue Social declaring a National Scallops Day and in fact opening the northern edge of Georgia's bank off Cape Cod to scallops fishing. If you're with us on 90 to 9 in Boston, this is a big business story, something we might have more on later on.

[Kelly Evans]

I would have, I would have read that as scallop.

[Kaylee Hartung]

Depends if you're from New England.

[Susan Del Bene]

Okay.

[Kaylee Hartung]

That's a Boston thing. We'll see a little later. On balance of Power on 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 [e-mail]

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