White House Steps Up Pursuit of Fed’s Lisa Cook

Live from Washington DC, this is Balance of Power with Joe Matthew and Kaylee Lines. The Lisa Cook saga takes a plot turn. Welcome to the Friday edition as President Trump announces a new White House committee to investigate fraud allegations into the Fed governor, forcing her to appear at a White House hearing at the beginning of next month. I'm Joe Matthew alongside Kaylee Lines in Washington. This is a new concept here, Kaylee. I'm curious how this hearing is going to work and what authority the White House has. Yeah, Lisa Cook's attorneys seem to have the same question about this hearing, which is scheduled for just two days after the midterm elections, >> November 5th. Clearly, this is an issue that President Trump is not ready to put to rest and probably is going to guarantee that Jerome Pal is going to maintain his seat on the Fed board as he said he wasn't going to be leaving until all investigations uh into the Fed were well and truly over. And I would imagine Lisa Cook is included in that. >> Well, that's right. He said the committee would investigate whether there is cause, but it's unclear what the White House would do with that information or exactly how this would be staged. He has named some members uh of uh this investigative committee, but we have a lot more to learn, and we'll check in with Tyler Kendall at the White House for more on that. Indeed, we're also going to speak this hour uh with an important voice on the economy, Steven Moore, who in the last Trump administration served as one of the primary economic adviserss to uh President Trump about this, as well as some of the data we're seeing today with once again a deterioration in University of Michigan consumer sentiment, hitting a fivemon low, which tells you a lot uh about the psyche uh in the economic feeling of voters as we get closer to the midterm. views of current economic conditions hit an all-time low with 25 days to go until the midterm elections. And we're coming off a rambunctious night on the campaign trail with a lot of debates uh from Michigan to Maine to Georgia as we key up for what's going to be an awfully important election. So, a lot to cover today as always with our eyes on the markets. >> Indeed. And for the eye on the markets, the eye up in New York at our world headquarters, Charlie Pellet is always watching. Charlie, we'll hand it over to you. >> I thank you very much, Joe and Kaylee. Happy Friday. What a week. We all We seem to say that every Friday. The Dow, the S&P, NASDAQ, all advancing right now with the S&P holding on to a gain up now by just about 510 of 1%. 7809. Very close to session highs on the S&P. Up 44 again, up by just about 6/10 of 1%. The Dow now higher by almost 400 points, up by 8/10en of 1%. S&P, by the way, is definitely on track for a winning week. We've got NASDAQ up 6/10 of 1% with the NASDAQ 100 index up now by 4/10en of 1%. 2-year at 4.79%, the 10-year 5.24% and the 30-year currently yielding 5.60%. Gold up 1.4%, 4191 the ounce. We're looking at oil fluctuating. West Texas Intermediate Crude down 4/10en of 1%, 9123 the barrel. Brent 10387 down 3/10en of 1%. Oil has been swinging between gains and losses as Washington's asurances that the US will not attack Iran ahead of November's midterm elections competes with mounting supply risks specifically a hurricane in the Gulf. S&P right now up 44 up by about 6/10 of 1%. Oil majors today they are advancing along with the price of crude Exon Mobile up 510 of 1%. Chevron up 610. Kico Phillips up now by just about 510en of 1%. Former Chicago Bears coach Mike Ditka has died at age 86. No cause of death was announced. I'm Charlie Pellet. Joe and Kaylee. That is a Bloomberg Business Flash. >> All right, Charlie Pellet watching the markets for us on this Friday. Thank you so much. And we of course have continued to keep you up to uh date here on Balance of Power about the ongoing disputes between President Trump and fairing members of the Federal Reserve Board. Jerome Pal of course was long included in that and perhaps still is so as was Lisa Cook who of course was attempted to be fired. Uh this administration attempted to fire her over allegations of mortgage fraud which she denies. There's been a number of court cases around this including going all the way up to the Supreme Court which has allowed her to remain in the job as this fight continues. And apparently this fight is now going directly to the White House which is forming a committee uh we learned today, Joe, to investigate uh these allegations and will have her appear before the committee on November 5th. Her her attorneys are saying today that this hearing that they have scheduled on that day, they have grave doubts as to whether it's a legitimate one that would conform to the law. >> Yeah, Abby Lol with quite the statement as always. If it is anything close to objective, the conclusion will be Governor Cook did not commit mortgage fraud, leaving no cause to remove her from the Federal Reserve Board. Even if that's the case, though, who would they be forwarding this information to and exactly under what authority is our question? And we'll start there with Tyler Kendall. Ahead of our conversation with Michelle Bruhard, we want to get to the hurricane and the impact on oil prices with news from the Strait of Hormuz. Tyler is our Washington correspondent and live on the north lawn of the White House. Uh Tyler, as Kaylee mentioned, be a hearing on November 5th. How's this all going to work? >> At this point, it's unclear. And it's unclear if we'll get actually any live pictures from that hearing. According to the memorandum released by the White House, is going to be behind closed doors. Fed Governor Lisa Cook can submit an official statement ahead of time and be able to bring her lawyer into the room, but we are still waiting on further details, much to the points that both of you are bringing up about the legality around this. says Lisa Cook's own lawyers say that they have concerns, but they went on in that statement to say that they are actively engaging with the White House to evaluate whether the quote process proposed has a possibility of being a genuine one and not simply a boxchecking exercise, adding that Cook welcomes the opportunity to clear her name. So, uh, this may be something that continues to develop. We're definitely going to stay on top of it because of course it has very big implications when it comes to the independence of the central bank. Joe and Kaylee, as you both know, the backdrop being that back in June, the Supreme Court had ruled against the Trump administration in its bid to oust Cook, ruling that she can retain her job for now uh because she wasn't given that due process. And I think that idea is going to continue to come up. As we know, there is a very high legal bar to remove a Federal Reserve official from their position. >> Well, Tyler, in addition to getting this news from the White House, we know that President Trump uh spoke at the White House earlier today at a a Columbus uh day event and we'll be hearing from him as well later on this evening uh when he travels to Syracuse, New York. What's it about and who's going to be with him? >> Well, Kaylee, at this point, President Trump is actively going on the campaign trail. Interesting enough though that this is a place that's not considered to be a Republican stronghold like a lot of those other events that we've seen him at earlier this week. New York is a place where registered Democrats outnumber Republicans 2 to one. But this is really seen as a way to help bolster some of the congressional candidates but also potentially the gubanatorial candidate Bruce Blakeman uh who is running against the incumbent Kathy Hokll. I pulled these statistics from the last hour, but Blakeman really behind when it comes to the money. $178,000 in the bank compared to $19 million for Governor Hokll in terms of cash on hand. So perhaps President Trump could be there to try to bolster some of the funding and fundraising that goes into these races. But as you both know, the dilemma at the moment is what does President Trump's presence uh in these states mean for those down ballot candidates? Mike Lawler, for example, Republican uh running uh in a district further away from Syracuse. That's one of the reasons why his campaign says he will not be there tonight. But that does underscore the balancing act that many of these candidates have to face. >> It's like a five or six hour drive, Tyler. Gas is expensive. I need to ask you with expensive gas in mind about the latest from Iran. The president said yesterday that he would not attack Iran before the midterm elections, but Iran is escalating attacks in the straight of Hormuz to the point of seeing a a lower number of barrels getting through the straight overnight. The president just said in this Columbus Day event that millions of barrels got through last evening. Do we have a sense of what is actually going on? >> Well, at the moment, Joe, there has been a significant uptick in attacks in the Straight of Hermuse. We got an update from the UK Maritime Trade Organization earlier this week that says that so far the month of October, we've seen nine direct attacks on ships. For context, that is half the amount for the entire month of September. So, we are uh escalating at a very quick pace here. We heard from Iranian state media overnight as well that ships that were transiting through what they are calling illegal routes were hit by mines in the straight raising questions of course by the messaging that we have heard that the mines had been cleared. Uh this contributes to what feels like we are pointed toward escalation. We had heard President Trump though as you mentioned uh tamp down on those reports that he was weighing military option before the midterms. Though, as we've discussed, often times President Trump's statements don't necessarily align with what ends up being the course of action. So perhaps it could be misdirection or it could be listening to what is dismay with the conflict in Iran. But one thing is for sure, voters want action. We had a new poll out from Pew Research overnight uh that showed deep uh distrust in terms of how President Trump has been utilizing the military in the conflict in Iran. So, we'll have to see how it ultimately goes from here. Of course, we're also watching the Houthis in Saudi Arabia. That uh conflict is escalating as well. >> Indeed. All right, Bloomberg's Tyler Kendall live at the White House for us on this Friday. Tyler, thank you so much. And we want to further explore the reality of how much crude is moving through the Middle East uh right now amid all this escalation as we turn to Michelle Brohard joining us from Kepler where she's head of policy and geopolitical risk. Michelle, welcome back to Bloomberg TV and radio. What is your real time read on what is getting through the straight of horror news right now as Iran seems to be upping its threat against commercial shipping? >> Oh, well, Kaylee, I'm glad you asked because we get the question all the time and we've put together a new way of displaying the data so that we can see collectively how much is getting out of the region. So, not just through the straight, but through the Red Sea, through um shipto- ship transfers in the Gulf of Oman. And we have a two-day lag to make sure that we capture everything accurately so that we're not misreporting data. And as of October 7th, we had 19 and a half million barrels a day of oil and refined products leaving. 17.3 million barrels a day of that is crude oil and the remaining is is refined products, which means refined products are down. um their 2.1 million barrels a day down from 6.3 million barrels a day from the year prior. So a pretty significant recovery in crude without a significant recovery in products which again brings to the high prices in in diesel, gasoline and jet fuel. >> Interesting. This of course follows oil flows through the straight rebounding close to pre-war levels in September and early this month. uh how expensive how difficult is it to maintain those types of flows when you consider the naval escorts that are required? >> Yeah, you know, we don't exactly know how much it's costing the US Navy to send uh to be able to escort those ships through. We know that freight rates are the highest. I mean, they're a hundred times higher than where they were this time last year. And I think the problem that we're really starting to see and the reason that we're going to have a really hard time seeing crude prices come down are these extremely high freight rates that we're seeing. And those freight rates include insurance. They include the fact that there's not a lot of freight not a lot of ships available to bring them through. And we also keep in mind don't have Iranian barrels that we that were leaving before. So those tankers are also offline. So there's a shortage of tankers. There is super high insurance premiums. There are super high costs just getting the ships out of the straight. And so because those freight rates continue to remain high, we continue to have high prices in crude. Well, just on those Iranian barrels, uh Michelle, is there any Iranian product that remains on the water? Has all of that been exhausted? It's one thing for new product to be leaving Iran. It's another for uh product that already was able uh to exit uh to have reached its end destination and there for there to be nothing left. Are we at that point? >> Yeah, we're we're getting near the point where Iranian crude on the water has started to um has started to draw down to levels that it's just a trickle at this point. Um so that is that is part but also that fleet of tankers is offline. So we don't even have that fleet of tankers moving moving any crude around whether it's Iranian crude or Iraqi crude like those tankers because they're dark tankers and um they're illicit. we just don't even see them participating in the marketplace, keeping freight rates again really high. >> I'm curious about the insurance costs that are tied to shipping uh through the straight right now. Michelle, this has been a moving target as well. And we saw reporting last week in the Wall Street Journal uh that sailors are being offered $25,000 bonuses to do the cannonball run in the middle of the night just to get through that waterway. There was a time when insurers wouldn't even have this conversation. What is it like now? You know, it I I do actually have a lot of questions about who is insuring, right? We know that the US government offered insurance to some of these ships that were passing through. Are they getting insurance through the US government? Are the um countries that are sending the ships through, are they insuring them? So, who's actually insuring these ships? And again, I I saw that article as well. I think they said that the seaman can make up to like $100,000 um just to get just to take the ships out. So like they get a signing bonus plus they get a really high salary. So just moving those ships out is an extremely high cost to a person's life. But also just the ship in general, it's an expensive ship to move through the straight and if one of them c gets hit or catches on fire then you really have another ship that's offline, right? we the you're removing supply from the ship market and removing that kind of supply from the ship market keeps crate rates high right it's keeps going back to the same answer I know I keep repeating it but it goes back to the same answer which is you need to solve the freight rate problem and taking supply offline whether they're getting hit by mines in the straight or whether they're getting hit by missiles from Iran or um or if they just aren't even brave enough to to to transit the straight those all of those things are keeping freight rates significantly higher than where they should be. >> Well, and we've been focusing on the straight of Hormuz, but what about the Bal of Mdup? Uh, Michelle, as we watch what's happening off the coast of Yemen as Saudis are actively uh on the assault along with the Yemeni government against the Houthis. How precarious is that potential choke point? >> Right. That choke point also is up there with um the straight of Hormuz. And it's just it's very difficult for these ships to transit keeping um insurance rates high even going through the Bab and probably even going through the Suez Canal because those uh Houthies can actually get some of those drones up there to hit some of the targets even further north in the Red Sea and especially as the Houthies start to make ground into I don't think they've crossed into southern Saudi Arabia but as they move north more further north into Yemen then you can start to see them really target some ships that are further up into the Red Sea. And so it's going to um continue to put put ships at risk in both the Suez, the Bab, and the um straight and foremost. >> Quite a bit of timing to add a hurricane here. Uh Michelle, it's our first of the season that's going to be knocking on the Gulf Coast tonight and into tomorrow. What will Issa mean if it stays on this track? >> Joe, it's such a good point. I mean, if you couldn't you can't add one more thing. This market is not is not hurricane ready for sure. We have currently 1.2 million barrels a day offline um due to just closures from the hurricane, they could come back up as long as no platforms are hurt and then come back pretty quickly. Thankfully, there's no refining capacity offline. So, as long as we don't have refining capacity offline, if we don't lose any diesel, if we don't lose any gasoline, um at least refined products will be able to like to chug along. But losing 1.2 2 million barrels a day of crude oil isn't helpful in a market that's already at really low inventories and already has um really high crude prices due to just the inability to get crude into the refinery or into the refining regions. >> And if we see a material uh refinery uh offline series, if this storm intensifies or is worse than feared, Michelle, how would that translate into prices? Yeah, it it it'll actually be interesting because it will be harmful not just for the global price, but it'll be harmful for the US price. And it's not something that the administration probably is looking forward to into going into this election if it does take out refineries. I mean, um I remember I'm sure you guys remember Hurricane Harvey, which came through in 2017, which they didn't think was going to be that bad and ended up flooding a lot of Houston refineries. And so if we do see something that was is a surprise where it starts taking out some of the refiner refineries then you will see a a significant spike in refined products in the US um as well as globally because the US is such a large exporter. I don't anticipate seeing that happen this time but of course like any of anything can happen at this point. Um, and we do know that Trump said there's going to be some big diesel announcement coming soon. And I'm curious what that diesel announcement is going to look like if that's in relation to this hurricane that's coming also. >> Yeah, we're dying to know what that is as well, Michelle. And when we find out, of course, we'll let you all know. Michelle Brewhard, really great to have you back. Ker's doing really important work tracking the barrels through the straight and through the region. Head of policy and geopolitical risk, Michelle Brewhard with us live on Bloomberg. We're going to turn our attention to this ICE shooting in New York. Coming up, Bloomberg's Miles Miller. Our senior reporter on national security is going to join us here in studio and we'll assemble our political panel, Jeannie Shenzeno and Lisa Kamuso Miller along the ride here on the Friday edition of Balance of Power only on Bloomberg. It's 121 on Wall Street. We do check markets all day long here at Bloomberg. Next up for Wall Street earnings. Right now we have got stocks pushing higher. Traders sending stocks higher despite concerns ongoing concerns about energy prices and Treasury yields. But most firms in the S&P 500 are gaining. S&P now at 7806. We're off session highs but still close to the highs of the day up 41 up 510 of 1%. Dow industrials up 373 now up 7/10en of 1%. The NASDAQ composite index up by 510 of 1%. All of this with the VIX, Wall Street so-called fear gauge holding just below 15. A 2-year yielding 4.79%, a 10-year at 5.24% and the 30-year 5.60%. Spot gold up 1.5% now to 41.94 the ounce while West Texas intermediate crude oil 9134 a barrel. We are seeing a retreat in crude today down now by onetenth of 1%. trend also lower and little changed at 10409 a barrel down 2/10en of 1%. Jet fuel prices in New York and Los Angeles are climbing back towards $5 a gallon due to Iran uh Ukrainian attacks on Russian refineries also curtailed Middle East shipments of refined products. Meanwhile, Delta Airlines is reducing its fullear earnings outlook as jet fuel prices remain elevated. The stock today tumbling 1.8%. Other airlines also lower. United down 1.7%. American down 1.4%. Southwest lower now by 510 of 1%. For on demand news 24 hours a day, subscribe to Bloomberg News now wherever you get your podcast. I'm Charlie Pellet. Joe and Kaylee. That is a Bloomberg Business Flash. >> All right, Charlie Pellet in New York. Thank you so much. And it's on New York that we keep our focus now in the aftermath of a shooting in Manhattan yesterday uh by ICE in the afternoon. non-lethal, but seven rounds went into a vehicle uh that carried not only the man they were targeting, but his 5-year-old son who was also in the car and was uninjured. The entire episode sparking backlash uh from protesters in the city and from the mayor of the city himself, Zoran Mdani, who was demanding now that ICE end enforcement operations there. Listen, >> we know, and I have said this directly, whether to the president or to the public, ICE undermines public safety. It makes us less safe. New York City will not stand by while ICE agents shoot New Yorkers, and we will not back down from the demand that so many, including myself, have put forward time and again. This is an agency that must be abolished. an agency that must be abolished. The mayor referred to ICE as an agency rotten to its core. Fast forward to this morning and the Secretary of Homeland Security out before cameras and microphones, Mark Wayne Mullen, defending the shooting of this man by an immigration officer in New York and pushing back hard on the mayor. Let's listen. >> He said that ICE is rotten to the core. Really? men and women at ICE each day are enforcing the laws that he refuses to enforce. We arrest thousands weekly that are criminals going after the worst of the worst and he turns a blind eye to it. At that news conference was Bloomberg's Miles Miller and our senior reporter for national security, I'm glad to say, is with us now in studio. Uh Miles, we feel like we've been here before. What's different this time? >> Well, I think the thing that's different here is twofold. The one thing is that this happened in New York >> uh and there has been quite a conversation between Mayor Mumdani who's had a really interesting relationship with the president uh and also Governor Hokll who have both said that they don't want ICE enforcement in New York and there needs to be a pause in enforcement. You had an individual here who ICE uh had a detainer on for two prior um criminal cases in New York. Once they lodge a detainer, they want to go and get that person. In this instance, he had his child in the back seat. Uh and Mark Way Mullen said this morning, it was unclear that the agents knew that there was a child in the back seat, that he tried to ram at them and and that's what caused him to be shot. Um and and and that is what is sort of creating this powder keg moment right now for ICE Homeland Security and uh the officials in New York. >> So when it comes to the investigation, have we seen video of the a actual incident yet? I saw that NYPD put out body cam video of one of the responding officers, but that was after the shooting had already taken place. >> We've seen mostly bystander videos in the aftermath of what happened. Um the beginning of it is caught on camera, but then uh it sort of goes out of frame. Um you know, I asked the Homeland Security Secretary today, you know, was it possible that they didn't know that there was a child in the backseat of the car? Um what kind of surveillance did they do? Because they certainly were looking for him since September. Apparently, when they went to arrest him in September, he ran from them and then they tried to get him again yesterday and that's when this all unfolded. And that much seems like it's not clear. Uh but um the FBI is going to do this investigation into what happened here. But you can imagine that the New York is very different than Minnesota where those other two shootings, those fatal shootings happened. You know, New York officials will try to get involved at every step. Um the NYPD held that crime scene and so they want a piece of it. So does uh the state attorney general and others who are going to be looking into just what happened there. Yeah. >> Just quickly, Miles, the president offering to turn the man over to the New York City Police Department. Mayor doesn't want this to happen. >> Yeah. So last night, Mayor Mani said he spent two hours speaking both with Mark Wayne Mullen and with the president specifically about this case. Uh the mayor's contention is that this guy who ICE had had, you know, attempted to arrest and wound well shot and then attempt and then arrested after um was a person who had previously been arrested, was on probation, uh and then there was a arrest for another charge. And the mayor's contention is that this is a person who should be able to have due process and wait it out while he goes through court. Um, it is important to note that immigration detainers are just really a civil piece of paper. It's not a criminal uh uh it's not a piece of it's not a it can't actually be used um to hold somebody indefinitely. We're going to hear from a judge later today about what she believes should happen in this case. He's already been moved out of New York State. The judge uh signed an order today that says that needs to be reversed. So, we'll see what happens with with his whereabouts, but he's right now in a place that not even his lawyers know. >> Wow. >> Wow. All right. Bloomberg's Miles Miller covering this story for us. Miles, thank you so much. Nice to have you here uh in DC with us. >> And as we consider that all of this is happening as President Trump is heading to New York himself today, not the city though, upstate in Syracuse, we turn now to our political panel. Jeannie Shanzeno is with us, a democracy visiting fellow at Harvard Kennedy School's Ash Center. Democratic analyst and a Bloomberg politics contributor alongside Republican strategist Lisa Kamusa Miller who's founder of Friday Reporter Public Affairs. Welcome to you both. Lisa, is as the president gets ready to make this trip upstate, does what happened in Manhattan yesterday have any influence you think on on on his remarks or the mood of the rally? Is he rallies particularly for someone who's trying to be governor of all of New York State and would be faced with these kind of issues if elected? I think it's like gonna be like catnip, Kaylee. I think it's gonna be hard for him not to say something about it. But he's also then gonna focus on on himself. The president is on the stump and he wants Republicans to be successful in this election. And so while he'll talk about that, he'll also talk about his victories and the wins that he sees as opportunities for more success in the elections uh in November. And so there'll be some mention of what's happening in New York, but there'll be a broader mention of how he's cracking down on immigration and how it's making uh things in New York State that much better. And that's why voters should support a Republican candidate for governor. >> Jeannie, Secretary Mullen said, quote, "It is shameful we're giving this particular case so much attention when this was a thug." Unquote. Is he right? What is actually shameful is that on a beautiful Thursday afternoon, and those of us with kids have all been there, you go to pick up your kids from school, there are parents, there are teachers, there are little boys and girls, babies coming out of school on a beautiful 400 p.m. in the afternoon in New York City and you choose that time to randomly shoot seven bullets into a car where you admit you didn't see the 5-year-old boy sitting in the back. There's a reason no law enforcement agency in this country shoots into a parked or moving vehicle. There was no need to shoot. You can peacefully take him into custody. And that is the problem here. And you know the video cam that Kaylee mentioned, I've watched it. Go take a look at it. And this is after the event. You have a man in a construction vest brandishing an AR-15 style rifle on the streets of New York while a little boy is sitting in a car as his father is laying out on the street bleeding out. So that is what is shameful. And you would think that Secretary Mullen would have learned from his predecessor's response to the Min Minneapolis ICE shooting of two American citizens shooting and killing, we should say. And yet he seems not to have done that. And that is what is actually shameful. What's also shameful is they've increased the numbers that these agents have to detain from two to 3,000 through the midterm. and we have 5,000 more of these agents on the street of the streets of this city by the end of this year. That is a shameful policy. We are not a country where we send people who are in unmarked cars with construction vests and masks onto the street to shoot in the middle of a school afternoon into cars not knowing where children are. That's shameful. Well, and Lisa, as we think about the notion that Latino voters do seem to be breaking from Republicans more in this cycle than they did uh just two years ago when they swung toward Trump, with ICE enforcement seen in large part as one of the reasons for that, is this rising to the the surface in the news cycle problematic for Republicans, vulnerable ones in particular, in uh states like Florida or Texas, even if it didn't happen there? >> No doubt about it. There's no question. But the other thing, Kaylee, is that will this suppress voters who likely would go to the polls and see this see a polling place as a threat and a potential where this kind of activity could go on and decide not to cast their vote because of the risk it could present. That's the biggest disadvantage in what's happening here. I mean, for so many genie's one million% on the nose about how unbelievably adhorent what happened in New York is. The difference is though that this actually for the Republicans who see an opportunity uh they are seeing this as a deterrent. It's it's unfortunate in this way because it will keep people from the polls, especially that Hispanic those Hispanic voters that are concerned about what potentially could happen. There's been plenty of news coverage about how there's going to be armed uh law enforcement and and armed services at the polling places. And that's the other thing that I go back to again and again is that this particular election is about trust. Do we trust that our vote is secure? Do we trust that we will be safe in the p polling places? Those are the kinds of things that I'm especially concerned about regardless of who the voters are. There is a big piece of this that will be voter suppression and I think that that's something that we should continue to be keeping an eye on. >> These kind of headlines uh can move opinions, can activate voters, Jeie, the timing here is something with 25 days uh left until the midterms. Does this have an echo when people hit the polls in November? >> It does and we've seen that already. The other day we were talking about the polls of Hispanics in Texas and elsewhere around the country. A huge constituency that has helped Donald Trump assume the presidency twice now. Moving away from him in droves. One of the big issues is immigration. They, like most Americans, want a sound immigration policy. They want the border closed. What they don't want are ICE agents who are untrained shooting and killing Americans and immigrants on the streets of our towns and cities and it's happened all over the country. >> Well, I want to thank you both uh for venturing into a very controversial issue with Grace and we appreciate both of your opinions. Genie Shenzeno and Lisa Kamuso Miller, our great panel today. Thank you. Much more ahead on Bloomberg TV and radio including our conversation with Steven Moore. It's 140 on Wall Street. We do check markets all day long here at Bloomberg with the Dow, the S&P, NASDAQ all advancing right now on track for a weekly gain of just about 1.1% on the S&P. Currently, the index is at 7807, up 42 points. That is a gain of 510 of 1%. Stocks are higher as Wall Street gears up for earnings. Big banks start reporting next Tuesday. The Dow right now up 406 points, up 8/10en of 1%. Again, S&P as a baseline up 510, NASDAQ up 510 of 1% and the Russell 2000 index of small cap shares also gaining 510 of 1%. 2-year yield 4.79%, the 10-year 5.25% with the 30-year 5.60%. Gold meanwhile up 1.5% 4193 the ounce. West Texas intermediate crude 9177 a barrel up 3/10en of 1% barrel of print up 3/10en of 1% at 10457 KR is prohibiting non-compete agreements for lower paid employees at its US portfolio companies aiming to show that the contracts are not needed for firms to remain competitive. KKR shares they're up now by just about 2.2%. Again, recapping the Dow, the S&P, Nasdaq, all higher. S&P up by 510 of 1%. Joe and Kaylee, that's a Bloomberg business flash. >> All right, Charlie Pellet running us through the Friday markets. Thank you so much. The markets of course trading with today's economic data in mind perhaps. Uh though it's interesting to see stocks on the rise and bond yields moving a bit higher in the face of sour uh consumer sentiment data at least in the form of yumish consumer sentiment which fell to a fivemonth low a reading of 46.3 current conditions at an all-time low down with a 44 handle and inflation expectations uh over the course of the longer term at 3 and a half%. It all speaks to a consumer that is feeling the economic pitch even if the economic data as the White House suggests, including the director of the National Economic Council, Kevin Hasset, uh still shows that things are hanging in there. And to get into, uh why these readings are the way they are when the data is holding up. Danny Burgerer spoke to Joanne Shu of the University of Michigan. She's their director of consumer surveys and gave Danny some more insight. Here's part of their conversation. We should read today's reading as essentially very little change from last month. Um the the primary change that we do see is a pretty sharp decline in buying conditions for durables. Um and that's not surprisingly being driven by higher interest rates. Uh we see buying conditions for all major purchases, not just durables, but cars and homes as well. uh coming down uh near historic lows on the basis not just of high prices which consumers have been unhappy about for quite some time but now higher borrowing costs. Um at the same time they're still expecting high prices to remain. You saw that inflation expectations ticked up. Uh so consumers are still expecting pain on their pocketbooks to come. It it's interesting because the this report also comes just on the heels of earnings from Delta where they said fuel prices are going up and they needed to cut their outlook maybe unable to pass along those high prices. Jan, it's a consumer that's been dealing with price fatigue. Is anything different this time around? Is the sentiment finally translating into consumers who are pushing back spending in different ways? Consumers have been telling us pretty loud and clear for uh for for the past few years that you know high prices really are quite um quite a weight on their personal finances. Uh back in 2022 they had the strength of high of high strong incomes and strong labor markets. Uh right now there's support coming from stock markets but only for wealthy consumers. Uh for middle income, middle wealth, lower wealth consumers who don't own substantial stock that stock market doesn't help them at all. you know, the soaring AI trade doesn't help them at all. Uh, so many of them, you know, have been trying to make do. They've been trying to trade down in how they spend without necessarily reducing their total spend. Um, but they're looking at further adjustments to their spending going forward. >> Where are you seeing those adjustments? I see some specific categories that that you put out here, things like food, groceries, household durables. Some of this does feel like necessities, food and groceries, but just how widespread is some of that movement? The thing is a lot of the the items that have seen uh the most notable uh increases in prices have been necessities have been uh non-discretionary goods and and so especially with gas prices if you drive to commute to work and you don't have any other options there's not much you can do to adjust that and so what that means is that consumers are needing to adjust make adjustments elsewhere wherever they can. >> There you have it straight from the source at the University of Michigan. uh the director of consumer surveys. This of course was part of the discussion last evening on the campaign trail. It was debate night and while some talk about the partisan nature of the University of Michigan survey, we certainly got the partisan take on the economy last evening and we want to hear from both sides. This is Abdul Elsay who was in conversation if you will in a meeting in Michigan uh with Mike Rogers. Mike Collins, also the Republican congressman who was in a debate with John Oaf, the uh the Democratic senator. We'll hear from all of them ahead of our conversation with Stephen Moore. Let's play you back last evening because we were watching so you didn't have to. >> $80. $80 to fill up your gas tank. And yes, I would support pausing the federal gas tax. But there is one thing that is actually causing this. It's the war in Iran. A war that has been cheerled by my opponent since the beginning. >> So I've called for a diesel rebate. number one uh and a uh pause on uh exports of diesel to give a temporary break. We can re resume that once the war comes to an end. I do believe it's going to come to an end. We need it to come to an end. >> My opponent voted for those Biden nomics that causes historic inflation, not just on gas and gas is too high and we're bringing that down, but on everything that you purchase out there. These tariffs are crushing our state and we'll repeal those tariffs. And I'd like to hear the congressman explain why he voted for them over and over and over again. >> People will freeze to death this this winter because they can't afford to heat their home. >> I have been the leading proponent of the lowincome home heating program in Congress. We had the voices of Troy Jackson and Susan Collins there at the end. With 25 days left, this is the discourse across the country. And a pleasure to have Stephen Moore back with us as part of our conversation. The chairman co-founder of Unleash Prosperity, former senior economic adviser uh to President Trump in the first term. Stephen, it's great to have you back. With 25 days left, everyone's trying to come up with an idea or pin the blame on somebody. That's the way it goes in the final throws of a campaign. How would you describe the state of this economy with gas prices, oil prices where they are, diesel where it is as voters hit the polls in November? >> Well, great to be with you there at Bloomberg. Thank you for having me. I was listening to your previous conversation with uh the Senator Genie Shaheen and so on and I just wanted to make one quick point which is you know 24 days, right? That's how many we have. That's a lifetime in politics. I bet if you ask most people on the street, did you know there's an election coming up in three or four weeks? They they probably don't even know it. So, a lot of Americans haven't even really focused that much yet on the elections and a lot of people make up their minds in the last uh in the last few days or last few weeks. But this is the crucial period and there's no question Republicans are behind the eightball right now uh undoubtedly. Um but it is a strong economy. It is it's a very good economy. I wouldn't say it's great, but it's very strong uh in terms of just how industry is doing. We're seeing a construction boom. We're seeing a a manufacturing boom. We have fewer Americans signed up for unemployment insurance benefits than any time in American history. That's pretty amazing. We have more jobs than people to fill them. That's a good problem to have. Um even on one one interesting thing, and I did listen to the uh interview with the uh the woman from uh the Michigan survey. Um in economics, we have a uh we have a saying called reveal preference. In other words, you don't have to ask uh someone at the University of Michigan what consumers feel. All you have to do is look at what they're doing. And so, there was an interesting chart, I don't know if you saw it on the front page of the Wall Street Journal, I think it was earlier this week, that showed consumer sentiment way down and consumer spending way up. And so, the revealed preference, even though consumers say they're being squeezed, they're still spending a lot. In fact, consumer spending is one of the reasons the Federal Reserve Board thinks we might have 4% growth in this quarter. So yes, the Republicans are in a hole, but there's a lot of time to make that up and they have to really make the case for the strong economy because frankly the media won't do it. >> Well, when you talk about the strength of the economy, Stephen, and it's great to have you and we appreciate you listening us to our our conversations with Joan Shu and and Jeannie Shanzeno and Lisa Kamusa Miller, our political panel. When you talk about the strength of the economy and you cite manufacturing and the like specifically is there breadth to that strength or is in large part this economy right now riding on a boom of artificial intelligence and associated infrastructure >> great that's a great question and I guess yeah yes but you know that's become if you look for example at the numbers on employment uh we're seeing a big construction boom and you're exactly right um the vast majority of those jobs are related to technology techology sector including data centers. I don't understand why people are against data centers when they're huge uh you know in fact the unions are very strongly in favor of uh more data centers because that's where a lot of the jobs are coming from. Um so listen I know from my own family members that people are angry about prices. I'm angry about I can't believe how much things cost. Um this is an inflation problem that's been going on for five or six years now. Uh look, 80% of it happened under Biden, but people are angry that prices are still so high and they're still rising. And it is true. This is all being driven by the oil price. Uh because as you guys mentioned, every time the oil price goes up, it that filters into the price of just about everything else. >> Only Steven Moore could smile when he's saying he's angry. There's just something, I don't know, contagious about it. Stephen, uh we just saw a report. >> God love you now. Okay, he's bringing the anger. Um, Reuters, uh, feeling that anger is reporting on the president's moves here, uh, on diesel. I I'm only I only know what I'm reading to you off of Twitter. This is Jarrett Renshaw. I'm told the president will issue a directive ordering officials to reign in diesel costs. There are three industry sources uh, uh, pushing this story, pushing department heads to bypass state and local regulations, blocking energy production. How would that work? And would it actually lower prices? >> Well, I think I don't know a whole lot about that. I don't know exactly what >> I'm blindsiding you with this. >> Yeah. No, but I I would say that. So, for example, you know what state has by far the highest diesel and gas prices, right? >> You're going to say California. >> Yeah. California. They're way way way above any other state. Uh, in fact, people in California pay at least a$125 to a$150 more than people in other states. And what that's telling you is there's something about the energy policies in California. By the way, New York and New Jersey are very high price too. And on the infrastructure issue, one of the most important things we have to do, now this isn't going to solve the problem of high gas prices now, but you know, did you know we have not built a refinery in this country for over 40 years? We need refineries. We need pipelines. We need to have uh LG terminals. We're producing more energy in the United States, oil and gas, than any other time in American history. And yet, the infrastructure to move along that oil through pipelines and to get it refined, just hasn't uh kept pace. And that's in part because many, especially blue states, have rules that make it very difficult to to build that infrastructure. Well, even if uh there is a move to ease permitting and regulations and build that infrastructure, it's not going to be a near-term solve to these uh prices. And that's something that the Federal Reserve has to consider. Obviously, its ability to respond to a supply side challenge is limited, but we saw one rate hike and the expectation is we could very well see another by the end of the year. Stephen, do you think it would be a mistake uh for the Fed to hike again given that so much of this is being driven by the supply side or is it necessary that they do so for fear of not only actual uh recognized inflation but inflation expectations to get back to the sentiment and consumer uh expectations data we started with could run away from that? I do think President Kevin Worch did the right thing in raising uh the rates a quarter point at the last Fed meeting because we as you just said we're running at three and a half% inflation right now and that is driven by the energy sector but you know we're going to have to see prices fall in other areas uh to bring that inflation rate down to back to below 2%. By the way, I'd like to see them aim for 1% given how much prices have risen. As to whether the Fed should be raising rates again, I mean I I'm not in a good position to really say. I don't know what the data, you know, the Fed has access to a lot of the data that me mortals like us don't necessarily have. So I I can't really say, but I do think Kevin Worsh, I will say this to your viewers and listeners, Kevin Worsh is an inflation hawk and he is quite correctly focused on one thing, bringing inflation back down by whatever means possible. >> I don't know if you have a take, Stephen, on this Lisa Cook story, but this is a doozy today. The White House is going to be launching an investigative committee as it's being referred to. There'll be a hearing at the White House in November. It's unclear what authority this uh this would be on. Should should Lisa Cook show up for that hearing? >> You know, um I uh you as you probably both know, I was nominated to be on the Federal Reserve Board by Donald Trump in the first. I did not make it through the process, but you know, I I went through it. And so I look, if Lisa Cook did what she is alleged to have done with respect to these the mortgage fraud, she should be off the Federal Reserve Board. I think everybody would agree with that. I mean, the mortgage fraud is what created one of the greatest financial panics in American history. And if she was in any way part of that, I I I just don't see the reason why she should be sitting on the Federal Reserve Board. Now, I don't know if she's I don't know the facts of the case. So, yes, I think it should be investigated and I think everybody should want to get to the bottom of it. >> All right. Of course, she denies uh those allegations. Steven Moore, it's great to have you, chair and co-founder of Unleashed Prosperity and former senior economic adviser to President Trump. We appreciate you joining us on the early edition of Balance of Power. We'll be back for more at 5:00 p. p.m. Eastern right here on Bloomberg TV and Radio.