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Morning Joe
Morning Joe 12/19/24
00:36:23
Trump opposes bipartisan government funding deal less than two days before deadline
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- [00:00]
UNHCR Representative
Unhcr, the UN Refugee agency, responds to emergencies and provides long term solutions for refugees in more than 130 countries including Ukraine, Syria and Afghanistan. UNHCR supports people forced to flee from war, violence and persecution at their greatest moment of need. During the winter, people forced to flee are faced with increased hardships and costs. As temperatures drop, families struggle to meet basic needs like heating their shelters, buying warm clothes and cooking hot meals. Refugees and displaced people are struggling to survive like never before. Funding shortfalls and rising food prices forced UNHCR to dial back its life saving aid to vulnerable families around the world. Donor support is crucial to address the need for essentials for millions of families. Without sufficient funding, life saving assistance will be threatened, cutting off a vital lifeline for refugees and displaced people. This is a tremendous challenge for people forced to Flee. Donate to USA for UNHCR by visiting unrefugees.org winter all gifts before December 31st are automatically matched in the California Road Trip Republic.
- [01:03]
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- [01:33]
Willie Geist
This is absurd. And what we have here is a.
- [01:36]
Mike Johnson
Bipartisan deal that Mike Johnson, the Speaker.
- [01:39]
Willie Geist
Of the House, negotiated and brought to.
- [01:42]
Donald Trump
The House that has been scuttled by.
- [01:46]
Mike Johnson
Donald Trump and Elon Musk and is putting us on the brink of of a government shutdown.
- [01:52]
Willie Geist
House Republicans will now own any harm.
- [01:58]
Donald Trump
That is visited upon the American people.
- [02:02]
Willie Geist
That results from a government shutdown or worse.
- [02:08]
Jonathan Lemire
You have confidence in Speaker Johnson staying on then? Well, I don't know. I'm only one.
- [02:13]
Willie Geist
I'm only one vote out of 220.
- [02:14]
Mike Barnacle
Look, I think the speaker could have handled this differently. At this point, I'm still supportive of the Speaker.
- [02:20]
Willie Geist
But I will tell you that voices.
- [02:21]
Jonathan Lemire
Both inside the House Freedom Caucus and.
- [02:23]
Mike Barnacle
Outside the Freedom Caucus have been very.
- [02:25]
Willie Geist
Disappointed at what's happened this week. Do you think Johnson should stay the speaker nominee? Oh, it doesn't. Johnson's going to be the Speaker.
- [02:32]
Mike Barnacle
You're going to get Democrats to support him.
- [02:34]
Donald Trump
He's not going to be able to get him through just the Republicans. He's going to need Democrats to support him or he'll never make speaker. He just, he's not going to.
- [02:41]
Willie Geist
Extraordinary developments on Capitol Hill. Democrats pointing fingers at Republicans, Republicans blaming Speaker Mike Johnson, all while Donald Trump and Elon Musk. Musk pushed Congress toward a government shutdown, ordering Republicans yesterday not to support the bipartisan spending deal. Good morning. Welcome to Morning Joe. It is Thursday, December 10th. I'm Willie Geist. Joe and Mika have the morning off with us, the host of Way Too early for One More Day, Jonathan Lemire. Also MSNBC contributor Mike Barnacle. The host of MSNBC's Inside with Jen Psaki. Jen Psaki. And former treasury official and Morning Joe economic analyst Steve Ratner. We're going to get to Capitol Hill in just a moment, but let's set up what happened yesterday. A bipartisan plan to fund the government and avoid a shutdown fell apart yesterday after President Elect Trump and Elon Musk voiced their opposition to the bill despite having the stamp of approval from congressional leadership. Trump and Vice President Elect JD Vance put out a joint statement condemning the bill, also demanding the legislation include a debt ceiling increase, writing in part, increasing the debt ceiling is not. But we'd rather do it on Biden's watch and we should pass a streamlined spending bill that doesn't give Chuck Schumer and the Democrats everything they want. That came after Musk spent hours criticizing the sprawling bill on social media, posting about it more than 100 times throughout the day. The president elect also threatened to support a primary opponent to any Republican who went against his wishes. With that bipartisan legislation dead, Vance went to the Hill in an attempt to iron out a new deal ahead of tomorrow evening's deadline. Let's bring in NBC News Capitol Hill correspondent Julie Cirkin. Julie, good morning. Great to see you. Gosh, so much to talk about here, including the future of Speaker Mike Johnson. But let's start with what exactly happened yesterday. This appeared to be going toward passage. It's a bipartisan deal. Everybody's going to get out of town for the holidays. And now, as of midnight tomorrow, the government could be shut down.
- [04:46]
Jonathan Lemire
Welcome to the next four years, Willie. I think this is something that those of us who have covered the first Trump administration, Capitol Hill, during Trump's first term are keenly aware of, and so are the lawmakers who were in the building during those four years. Certainly the way yesterday was going. You played that bite from Andy Harris, the House Freedom Caucus chairman. I asked him that question about whether he would still support Speaker Johnson because he and a group of conservatives in the House and senate spent about 35 minutes going one by one talking through their plans for next year, which include that border package, that ambitious tax cuts deal, and then an hour later, this must pass government funding package that they had all but buttoned up got fully crushed and killed by the president elect and his team of allies, including Elon Musk. So, look, it's not good news for the House speaker. He was in the Capitol, as you mentioned, Willie, until very late last night, huddling with the vice president elect, huddling with Steve Scalise, his leadership team, trying to count the votes and see how they can get to yes on even a clean government funding bill, a debt ceiling lift now, something that House Republican leadership have not even been talking or thinking about. Certainly Trump has been sounding the alarm bells on that for some time now. These kinds of negotiations take weeks, if not months to hammer out. And they have about a day to figure this out until the government lights are out. And certainly this is not something they want to be doing right ahead of Christmas vacation. But boy, do they have a lot of work cut out for them. I assume it's going to be a very long day, but today really is the last day the House can get going on this process to get the government funded in time.
- [06:22]
Willie Geist
Yeah, Julie, as you say, this bill is more than 1500 pages. That takes a long time and there's a lot in there. They thought they had the deal. So my question to you is, was Speaker Johnson blindsided by these tweets that started yesterday from Elon Musk, by this threat from Donald Trump? Now he's going to order primaries for anyone who crosses him on this. And as you say, preview of coming attractions. By the way, if this is how the government's going to run, you do anything he doesn't like, he threatens a primary. 6 Elon Musk on you. Did Republicans see this coming yesterday?
- [06:54]
Jonathan Lemire
I mean, Republicans spent pretty much the whole day we heard from senators, from House members talking about how bloated this bill was. Let's be clear, this wasn't a clean government funding bill. This had a lot of extra provisions on it, including, of course, the disaster relief, the farm bill, which is a must pass item, but additional assistance for farmers, too. And don't forget that pay raise from members of Congress that hasn't happened in more than a decade. So certainly all of those things go against the grain of what we've been hearing from this incoming administration, from this incoming Republican trifecta, cutting spending, slashing government waste. That kind of goes against the theme that we've been hearing. And so I'm not sure that it should have been a surprise to Johnson, who spent the entire day pretty much holed up in his office. We were outside waiting for him to go open the floor in the middle of the day, thinking perhaps they could have even rushed this bill, made the House vote on it, and get out of town before this could really sit out there and linger and get the kind of reception that we saw later in the day. So Johnson sitting in his office was pretty telling. I think we kept hearing consternation around the Hill again. When Trump put the final nail in the coffin, though, I don't think anyone expected him to speak out. And when he did, it was definitely game over. I got a text immediately from a senior Senate leadership aide telling me the CR is dead and that Johnson really effed up.
- [08:11]
Willie Geist
So, Jen, you know, we saw this in some ways thinking back to earlier this year with the bipartisan immigration package that was worked on with James Lankford, other Republicans. They got to a place where Republicans were happy, and Donald Trump decided he didn't want them to do it because he wanted it as a campaign issue. And he just made a phone call to Mike Johnson and others and got rid of the thing. So this does appear, as Julie says, to be the way it's going to go. You've got Donald Trump, who will be the President of the United States again, and Elon Musk, whatever his title is, clearly he has perhaps equal power just beneath the President of the United States to get these things killed. Buckle up if this is the way we're going to run the government.
- [08:52]
Jen Psaki
That's what I was going to say. Buckle up, everyone, for 2025, because this is what it's going to look like. I mean, to Julie's point, this is, first of all, yesterday the feeling in Washington was, this is done. It was a bipartisan agreement. This is done. Everyone's packing up their offices, making their Christmas travel plans, and all of a sudden, it wasn't done. Which happens occasionally in Washington when there's policy making and bills being passed. But this was a bit of a surprise to a lot of people in this town yesterday. It reminds me a lot, Willie. I think we all lived through the first Trump term when the team at the White House would say something and Trump would say something that contradicted it on Twitter or X or whatever you're calling it now. You have the owner of that platform as an additional person who may be contradicting what the plan is. Maybe it's what the plan is from the White House come a month from now. Maybe it's what the plan is from Congress. And this certainly sets up quite a challenging situation for Mike Johnson, who, as you read the reporting. He was in a position where he was needing to explain to Elon Musk and Vivek Ramaswamy how government funding works. As much as this was a very large bill. And to Julie's point, lots of Republicans didn't like it. People who were. People who want to cut spending didn't like it, but he was explaining to them. And I was also struck by what he said, where he was talking about himself almost in the third person, where he was saying, they said, I'm not to blame, essentially, and that this was an impossible task. Anytime you're in a position of doing that, you know that it is going to be a challenging path forward. So, yes, to. To end where we started. Buckle up, everyone. This is probably what governing looks like in 2025.
- [10:32]
Mike Johnson
So I'm thinking of a photograph that was taken at the Army Navy game just this past weekend. We're in the front row, in the box where they're sitting. It's Trump, John Thune, the incoming majority leader, and then House Speaker Johnson. It's meant to be this unified front, Republicans in control. We're going to get a lot done. Looming in the background of that picture, though, is Elon Musk. And that's what we have seen now, where all this talk about Republicans this time around, Trump, he's learned how to navigate Washington. He's going to get done. He's better organized, he's more disciplined. Nope, this is the same chaos that we saw his first time around. And it's imperiling Speaker Johnson's hold on the gavel. It is underscoring Elon Musk's power here. He tweeted over 100 times yesterday. He and Vivek Ramaswamy both came out against this, then pushed seemingly Trump and Vance to do the same. And we should note, Steve, they're doing for different reasons. I mean, Trump wants to lift the debt ceiling, Musk wants to slash. So there's competing interests there. But if the government shuts down first talked about that, the economic impact, if it does shut tomorrow night, but also just this unpredictability and chaos that's going to roil everything from government to markets next year.
- [11:40]
Donald Trump
Yeah, that is exactly the problem. We are facing a period of chaos, and the markets will be unhappy about it if it doesn't get resolved. Trump wants to extend the debt ceiling because he doesn't want to have it come up on his watch. You've got members of the hard right, you know, his base, in effect, who have, who will never vote for a debt ceiling increase. And he doesn't want to get in the middle of that. So he wants to push that out of the way. But he also does want to get rid of some of the spending and some of his. Trump's tweet yesterday was about all these Democratic priorities and Chuck Schumer shouldn't get what he wants and so on and so forth. And so here we are. Look, we have played this brinksmanship game many, many times before. We have had some government shutdowns, admittedly very brief or happily very brief, and the markets have accepted all that. But as everybody else has been saying so far, we now add this additional factor of this larger than life force, the richest man in the world weighing in 100 times on X with his points of view. And so it's a big mess. And what's also different this time is the Democrats are saying we're not going to bail you guys out because we had a deal. Yes, it was a deal. A 1500 bill loaded with all kinds of stuff that was a Christmas tree, but we had a deal. And so now you guys are going to twist in the wind. And Mike Johnson's margin is so thin, it's almost hard to imagine how he passes anything without Democratic support because he's got these hard right members who will never vote for spending, never vote for a debt limit increase. And so you've got a rock and a hard place colliding here.
- [13:10]
Mike Barnacle
You know, it also exposes another incredible weakness within the Republican Party in that two people who are not yet part of the official process, the President elect and Elon Musk, they are not officially members of the party. I mean, they're members of the party, but they're not part of the process. And Julie, the other aspect of it that is potential bad news for American taxpayers, American citizens, is what is in the bill. You mentioned it briefly earlier, things like a new football stadium for the Washington Commanders National Football League team, other things like that just thrown into the bill at the end of the day, proving on paper that the Congress of the United States, led by a Republican speaker, cannot do its job. These are things that ought to have been passed during the course of ordinary parliamentary process during the last two years. And they load it up on Christmas Eve and they can't get it done. So what does that pose for a the future of Mike Johnson as speaker with a thin margin and balance? The prospects of the Republican Party just not being able to get anything done legislatively in the House of Representatives.
- [14:24]
Jonathan Lemire
Boy, what a loaded question. More loaded than that original C.R. i mean, look, where do I start? Let's start with Mike Johnson. He is a very precarious road ahead of him. It's interesting because going into the day yesterday, I mean, you heard that interaction with the House Freedom Caucus chairman. They're all standing there complaining about this process, about the bill, but still say that they support the Speaker. I think that might look a little bit differently right now. The big question here is what does Trump do? Has been working for weeks, if not months, to get in Trump's good graces, to get in his good corner. Back then he was even less a part of this process as somebody who was running for office again. But he still had tremendous influence and it's why Johnson spent so much time cozying up to him, as did John Thune, by the way, the incoming Senate Majority leader. So we'll see what happens on January 3rd. He was unofficially elected, of course, already behind closed doors. Some Republicans, as you played, said that he might need Democrats to bail him out after this. I doubt that's going to happen again. Remember, they did it a couple of months ago. Settles that. Kind of. To your second part of the question, which is can they get anything done over the next two years? We have not seen things happen in regular order in quite some time. I will say during the first two years of the Biden administration, they got a lot done. They got a lot of bipartisan legislation done. They also got the Inflation Reduction act done. So some big items that they tried to pass also using reconciliation, cutting that wonky procedural tool that would enable them to bypass that 60 vote threshold. Essentially only one party is needed to pass what they want. If it has to do with those budget constraints. That's what Trump is looking to do on the border on tax cuts. And they're going to need all Republicans to stick together to get it done. But my sources told me there is no interest from the incoming administration to work with Democrats to cut any deals on the other side of the aisle, at least during those first two years of his presidency.
- [16:11]
Willie Geist
You know, there is a ton of pork in this bill. 1500 pages. Obviously. There's going to be one thing, though, that Republicans complain about is that football stadium question. There's actually no federal funding in this bill for a football stadium. It just transfers control of the site of the old RFK Stadium to the Washington, D.C. government to redevelop, involves no federal funds. So there's maybe plenty to complain about, but they're also making some stuff up, too. Julie, before we let you go, let's talk about the House Ethics Committee secretly voting earlier this month to release the findings of its probe into the alleged sexual misconduct and drug use by former Congressman Matt Gaetz. According to two sources, the report expected to be made public as soon as this week. G went on social media criticizing the move, saying while his behavior was embarrassing, it was not criminal. Gates resigned from the House after being named as Donald Trump's pick for Attorney General, a process cut short after the former congressman became entangled in so many controversies that he just stepped aside. They all threatening his confirmation. He has denied all of those allegations. So there had been that deadlock vote Julie, at first not to release the report. Looks like now it's going to see the light of day.
- [17:23]
Jonathan Lemire
It is and I think it's in large part because one Matt Gaetz is no longer somebody who is attached to the President elect. There is no Republican that's going to have to go out on a limb, especially in the House, and vote to release a report that could tank a potential nominee of the incoming administration. Of course, this report was really the linchpin, the centerpiece for why Matt Gaetz's bid was a record eight days long. And it's because of the information that this report could contain. The committee spent on and off three years investigating this situation. Gates had taken to X to say that he can't debate this report. I'll remind you that he had plenty of opportunity to speak to the committee and decided in September of this year that he was done doing so. I think his comments were interesting, but the fact that the committee, the bipartisan panel voted to release the report may be shocking, but in some ways it's not surprising. And I think it's because Gates still has plenty of bad blood among Republicans in the House. They want this report to see the light of day for whatever Gates decides to do next. There could be some damaging information in here. The committee did talk to a lawyer for a 17 year old girl that allegedly had a sexual encounter with Gates that he denied. So that report could come out as soon as this week. Definitely something that could have come out last night if the House passed the continuing resolution. But they want to get out of town before this sees the light of day and they have to answer questions about that.
- [18:42]
Willie Geist
Expect to be some ugly stuff in there. All right, Julie, before we let you go, just quickly, what do we expect now with this shutdown deadline at midnight tomorrow? Is there even time? Is there the will to get this clean CR through?
- [18:54]
Jonathan Lemire
Well, now they need to rely only on Republican votes and Johnson's margin is extremely tight. Democrats are not going to help him. If they want to get it done by midnight tomorrow, they have to start the process today going to the Rules Committee, trying to make sure that those hardliners on that panel muscle this bill through. It is going to be a very heavy lift. I suspect we'll be here into the weekend.
- [19:14]
Willie Geist
NBC News Capitol Hill correspondent Julie Serkin doing a great job walking us through this very complicated process. Julie, thanks so much. Appreciate it. So here we are, John, Elon Musk, Donald Trump sitting at Mar a Lago, wherever they're sitting, watching developments in Washington say no thumbs down to that. And Washington scrambles and total chaos.
- [19:33]
Mike Johnson
And I'm sure we know that this was exactly what his first term was like and the number of times that Republicans and at times Democrats thought they'd have a deal and that he would blow it up with a tweet or a statement. The new thing here is the role that Elon Musk plays. And Jen, let's spend a little more time on that. I mean, Musk, look, he spent $277 million, that's the accounting, to help Trump win this election. He's been given a powerful post. It's outside of government, but he certainly in doge has gonna have a say. We know the conflicts of interest are just robust with all of his various companies. There's been recent scrutiny about whether he should have a security clearance. The list goes on and on and on. But right now what he has is Donald Trump's ear. But we know how this works. When someone starts to get a lot of attention, when a Trump staffer or an aide or a friend or a family member even starts to outshine Donald Trump. Donald Trump doesn't much care for it.
- [20:29]
Jen Psaki
No, he does not. And we'll see how long this lasts. Because right now, even the killing of the funding bill here is Elon Musk is being given credit for that really more than Donald Trump is. And you have to wonder how Donald Trump feels about that. Exactly. You know, the other piece here that I think is an interesting theme we're seeing over the last couple of weeks in terms of what the threats look like is there is a lot of threatening about funding primary opponents. We have seen that. And Elon Musk was involved with this, too. We've seen that as it related to Senator Joni Ernst and her lukewarm statement she put out about Pete Hegseth. Then all of a sudden there was all of this activity behind the scenes and publicly threatening a primary opponent against and that's also in the language that has been in some of the 100 tweets or whatever, however many there were from Elon Musk here. That is clearly impacting Republicans. I'm interested to see if that's a threat they continue because it works. But to go back to your original point here, Elon Musk is around Trump all the time. He was in that picture that you referenced that was at the Army Navy game creepily kind of right over his shoulder. He seems to be living at Mar a Lago. I don't know how Trump feels about that. Maybe he's enjoying it currently. Will he still? And he's also getting credit for having power over Congress, over Trump. How does that sit with Trump? We know from history typically doesn't sit well.
- [21:58]
Willie Geist
And we've heard some Republicans and former Republicans referring to Donald Trump right now as Vice President Trump. That is not going to sit well. Still ahead on MORNING joe, more on Elon Musk appearing now to have much, much more power and more money than ever. Steve Rattner has charts on must skyrocketing net worth just since Donald Trump's election election win. Also ahead, Secretary of State Antony Blinken will be our guest this morning in studio. We'll talk to him about President Biden's priorities on the world stage in the final days of his administration. You're watching Morning Joe. We're back in just 90 seconds.
- [22:33]
California Tourism Representative
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- [23:36]
Willie Geist
You could hear love, what would it sound like?
- [23:46]
Mike Barnacle
Son, can we talk about your drinking?
- [23:50]
Willie Geist
Yeah, Dad, I think we should. Helping those closest to you think about their excessive drinking. Maybe that's what love sounds like. More@rethinkthedrink.com An OHA initiative.
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California Tourism Representative
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- [24:37]
Willie Geist
Beautiful live picture United States Capitol 6:22 in the morning before sunrise. President elect Donald Trump's election win has been extremely profitable for Elon Musk, whose net worth has grown by $276 billion since November 5, meaning Musk's net worth now has inched closer to nearly half a trillion dollars. Steve Ratner has some charts on this. Steve, what are you looking at?
- [25:01]
Donald Trump
So not only is Elon Musk the maybe the second or even the first most powerful man in Washington, he's also the richest man in the world, as you just suggested. So let's take a look at why. It's principally because of two companies. Tesla, his electric vehicle company, which we're all familiar with, has more than doubled its market value, literally since the election. You can see down here, the stock price was kind of piddling along and now it just shot up after the election. The company is now worth 25 times what General Motors is worth, even though it produces far fewer cars. Why did it shoot up like that? Because Musk is obviously counting on government policy to help him keep out Chinese imports, put in other EV regulations that will favor Tesla, and so buyers are buying it. His other company, which may not be as familiar to people, is SpaceX, because it is the most valuable private company in the world. SpaceX only does its valuation twice a year because it's not publicly traded. But what's happened since the election is it's raised some more money at a value that is 67% higher. Higher than what it raised it at just six months earlier. So 67% up in one in one six month period. Why is that? Because SpaceX obviously is heavily dependent on government contracts and government support for its launches. In fact, the new head of NASA, the proposed head of NASA, has been on a SpaceX rocket twice and is an investor in SpaceX. So kind of imagine they're going to get more or less what they want. And so that is now a $350 billion company. The most valuable private company in the world, as I said. So when you put it together, what do you have? Musk has Tesla shares, he's got SpaceX, he's got Tesla options, which are just another piece of this puzzle. And then he's got a bunch of stuff that looks pretty small here, but it's 7 billion, it's 13 billion, it's 25 billion in OpenAI in X, as we know, in some futuristic things called the Boring company and neuralink, all of which have gone up enormously in value. And so as you said in your lead in what's happened, his net worth has gone up 135% since the election. $276 billion. He's now worth $480 billion. The wealthiest man in the world. Half of that roughly, since the election alone.
- [27:20]
Willie Geist
Wow, Stunning. And Steve, you mentioned this with SpaceX and NASA, but conflicts of interest really concern a lot of people. If he is running this so called Doge Agency, he could, could he not have the power to say, pull federal funding or pull federal contracts from a competing EV company, for example?
- [27:38]
Donald Trump
Yeah, this is sort of so far off the fairway, you're never even going to find this ball. When you work in the government, and I did this, you are subject to rigid conflict of interest rules. You are required to divest yourself of anything that could prove a conflict in your work for the government. Obviously he's not going to divest all this stuff. He's not even a government employee, which is a whole other legal question as to what he can or should be doing. And so this is another classic example, example of kind of the swamp coming to Washington and Trump and his people doing whatever they feel like, regardless of what's appropriate, regardless of what even the law is. In some cases, perhaps it's really working.
- [28:15]
Willie Geist
For Elon Musk so far. So Steve, let's get to some more of your charts on the Federal Reserve, which announced yesterday it has cut interest rates by an additional quarter of a percentage point, its third and final rate cut for 2024. Fed Chair Jerome Powell telling reporters the latest cut, not an easy decision, decision.
- [28:34]
Donald Trump
I would say today was, was a closer call. But we decided it was the right call because we thought it was the best decision to foster achievement of both of our goals, maximum employment and price stability. We see the risks as two sided, moving too slowly and needlessly undermine economic activity in the labor market or move too quickly and needlessly undermine our progress on inflation. So we're trying to, to steer between those two Risks.
- [29:00]
Willie Geist
The stock market plunged after yesterday's announcement with all three major indexes having their worst day in months. Chairman Powell also indicated rate cuts are likely to slow down in the new year. Steve now back at the table with more charts to help break this down. So expected at a quarter of a percentage point, I think. Steve. Right. I guess the reason the markets went down though is because of that idea that this be the end of these cuts for a while.
- [29:25]
Donald Trump
Yeah, and it was unexpected what the Fed said. I think the market was expecting that the Fed's new set of projections, which we can talk about, was going to, were going to provide for four cuts next year and instead the market's projections now only for one cut, for two cuts, excuse me, next year. So what this chart shows you is simply the path of interest rates and you can see that they peaked at about five and a half percent and they've come down over the past year by a full percentage point. I put in the mortgage rate because some people may say, well, why haven't mortgages come down? Mortgages haven't come down because they are actually tied more to the 30 year treasury which has in fact been going up somewhat in yield rather than down. But if you take a look at this next chart, you'll see that what the market had been expecting was much lower interest rates sooner and that all the way at the bottom is September and what people thought in September was going to happen to interest rates. And then you can see each succeeding quarter passing three month period, passing expectations of rates are staying higher and higher. Why do people think, and why does the Fed in particular think rates may not go down as fast as we thought? It's kind of good news in a way. It's because the economy has actually been stronger than people expected and then the Fed expected, which you can see a bit on the next chart chart where they've changed their projections and they're now expecting the economy will grow, that's this black line, by 2 1/2% next year rather than the 2% that they projected previously. So the market and the Fed for that matter, more importantly think the economy is a bit stronger on the negative side of it. On the next chart you can see what they were thinking about inflation. The Fed just three months ago thought inflation would come down to 2% which is their target target next year. Now they think inflation, which is kind of stuck in the 3 range, is only going to come down to 2 and a half percent. So that is part of why Powell said what he said in his opening comments about about it now. Why did the stock market go down so much? Because higher interest rates are the enemy of stock prices. When interest rates go up or don't go down as fast as you expect, people move their money into bonds, into money market funds and other things that pay an interest rate rate they view as more attractive than stocks. And so the stock market was really kind of shocked a bit, obviously by the news yesterday that rates are not going to come down as fast as they thought and that's why the market rolled over.
- [31:55]
Mike Johnson
So, Steve, imagine another person not throw this news is going to be President elect Donald Trump, who prizes the stock market greatly, who if inflation does stay higher, that's going to make it that much more challenging for his promise to lower prices. It also calls into question his relationship with the Fed because we know that he has suggested he wants far more influence over the Fed, even control over the Fed. Jerome Powell, though, has said no.
- [32:17]
Donald Trump
Yeah, those are all great points, of course, Jonathan. So first, in a way, Trump got a little bit of a break. The stock market took its pain this year rather than next year. And if this is the end of the stock market decline and obviously we don't know, then he'll be able to. His watch starts on January 20th, of course. Secondly, it's important to note that I think the Fed was pretty clear yesterday that everything they did did has nothing to do with Trump's proposals. Trump's proposals would actually make all of this worse because he wants tariffs, which are a tax, create inflation. He wants to spend. He wants to cut taxes a lot more. That would raise the budget deficit. That puts pressure on rates. He wants to deport people. That hurts the labor force, which forces wages up and creates more inflation. So all of this is actually not even taking into account what he might do. So he may have even more pain ahead of him him. And yes, he will take on the Fed. He can't fire Jerome Powell. Jerome Powell has already said I ain't going. He's got about another 15 or 16 months to go and then Trump can obviously put his guy in. But you can't fight the Fed. In a way what the Fed is doing is necessary. And if you put someone in there, and we've had this before, who doesn't respond to the inflationary pressures by keeping rates higher, who doesn't do the right thing, not what the president necessarily wants, you could have real economic chaos.
- [33:38]
Mike Barnacle
So, Steve, we've seen Elon Musk is a large example of this and an imperfect example of this. But whenever Anything happens, the rich always get richer somehow and the average American family stumbles along. What does the rocky relationship that exists between President Trump, President Elect Trump and Chairman Powell, how does that impact the average American family?
- [34:03]
Donald Trump
The average American family has a mortgage. They may have credit card debt or an automobile loan. And a lot of these policies that Trump is pursuing, as I said, could keep interest rates higher for longer or even push them up altogether. And that's the impact on the American family. And then of course, you get the question, what is the impact on the economy? Economy and things like tariffs slow the economy, slow economic growth, cost jobs, deporting immigrants you may think is good for the average American worker. It's not because you end up with worker shortages and the economy again slows and you get more inflation. So none of this, in my opinion anyway, is good for the American family. And then on top of that, Trump's tax proposals are highly regressive, meaning that people at the rich would get a much larger percentage increase in their after tax income. People at the bottom, what a surprise. Well, he did it before the 2017 tax cut, which he wants to extend, would essentially did the same thing. It basically gave more to people at the top, even in percentage terms, let alone in dollars, than to people at the bottom.
- [35:08]
Willie Geist
And as you mentioned, tariffs would raise prices as well. So that's all in the stew. Morning Joe economic analyst Steve Rattner with his charts this morning. Steve, it really resonated with us at the table when you said the ball was hit so far off the fairway you can't find the ball. We all went. I know the feel. The feeling. Steve, thanks so much.
- [35:25]
Donald Trump
My pleasure.
- [35:26]
Willie Geist
Still, Head Secretary of State Antony Blinken joins us live in studio to discuss the latest out of the Middle East. Plus a live report from Pennsylvania where the man charged with the murder of United Healthcare CEO Brian Thompson will appear for a hearing on the efforts to extradite him to New York. Also ahead, our conversation with director, producer, writer and actor Tyler Perry about his new film, the Six Triple eight. Morning Joe's coming right back.
- [36:00]
California Tourism Representative
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- [37:33]
Mike Barnacle
Nice coverage on the part of Cam Sydney.
- [37:35]
Willie Geist
Both of These teams have 17 interceptions and about a fake P the shovel pass. How good was that? Marshall Nichols, the punter executes it perfectly. Wow, look at that two handed shovel pass. A big gain for UNLV and a fake punt. The running rebs held off Cal 2413 in the LA bowl last night. The 11th victory for UNLV. This year marks its best season ever in the FBS, capped by the program's first bowl game win since the year 2000. Good for UNLV. Their coach Odom left to go to Purdue, but did a great job building up that program there. In Florida, James Madison had its first ever bowl win last night after beating Western Kentucky 2717 in the Boca Raton Bowl. Meanwhile, the 12 team College Football Playoff kicks off tomorrow night. Number 7 Notre Dame hosting number 10 Indiana in the first round. The winner moves to the quarterfinals to play second seeded Georgia in the Sugar bowl on New Year's Day. That's kind of a fun John in state rivalry. And it's not really a rivalry, but Indiana just going over the down the road to play South Bend on a Friday night. Should be fun.
- [38:50]
Mike Johnson
Yeah, I was just thinking that it's an unlikely rivalry in football anyway, but it should be a fun one. And I think more than anything it's just we're finally there. We're kicking off this College Football Playoff newly expanded playoffs. You know, some controversial selections along the way, we won't mention one particular SEC school that didn't make it. But Mike, I think it'll be, you know, this is college football clearly experimenting. They're moving to 12 teams. Let's see how it looks. And let's see the games are here.
- [39:14]
Mike Barnacle
You know, it's odd that Alabama is not among the 12, right? I was looking at it yesterday. I was looking for Alabama. They're not there. It's a big game for Notre Dame, by the way. Notre Dame versus Indiana. Game two of Notre Dame season this year. They lost. I forget.
- [39:27]
Willie Geist
To Northern Illinois.
- [39:29]
Mike Barnacle
Yeah.
- [39:29]
Willie Geist
Yep.
- [39:30]
Mike Barnacle
And so this is a big game for them and God bless them. But you're right, I mean, the, you know, narrowing it down, leaving out teams like Alabama is kind of shocking to, you know, normal football fans who are used to seeing Alabama and other clubs in, in bowl games.
- [39:45]
Willie Geist
And of course, all those games overshadowed by next Friday's Birmingham bowl where the Vanderbilt Commodores coming off their magical season, that's the one take on the Georgia Tech Yellowjackets, the Ramblin wreck.
- [39:56]
Mike Johnson
We'll see you there.
- [39:57]
Willie Geist
Should be a good one in Birmingham. In the NFL, Kansas quarterback Patrick Mahomes looks like he's trending toward playing this Saturday against the Texans. He was a full participant in practice for a second consecutive day yesterday after suffering pretty bad ankle sprain, one of those high ankle sprains during last Sunday's win over the Browns. The first place Chiefs are in the middle of a tough stretch of three games in 11 days against good teams, ending on the road against the Pittsburgh Steelers on Christmas Day. What's the upside of playing him Saturday?
- [40:28]
Mike Johnson
Who are we to second guess Andy Reid? But I'm second guessing Andy Reid and Patrick. First of all, The Chiefs, they're 13 1. They have a two game lead over the Bills for the top seed. You're playing twice in a matter of five days. Like Mahomes, you know, he's, he's tough, but like we have seen him banged up before. Why not sit him on Saturday, sit him on Saturday, give him the day off, rest him for Christmas, which, you know, the league wants him to play on Christmas. The first time the NFL has had a Christmas game and then after that you'd have another 10 days off before your season finale. I just, I think there's more risk than reward here for, for the Chiefs at Mahomes place.
- [41:00]
Mike Barnacle
Totally agree. Totally agree. Andy. Sit them, Sit them. Wait for, wait for the Bills game.
- [41:06]
Willie Geist
And we do want to see him on Christmas week 16 of the NFL regular season starts tonight in LA. Chargers hosting the Broncos on Thursday Night Football. Pretty good game, actually.
- [41:15]
Mike Johnson
Thursday night division rival game and two teams looking for a playoff spot. Both very much in the mix. Broncos 9 and 5, Chargers 8 and 6. Huge game tonight. Should be a fun one.
- [41:27]
Willie Geist
Be fun.
- [41:27]
California Tourism Representative
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