tv Bloomberg Markets Balance of Power Bloomberg October 9, 2017 1:00pm-2:00pm EDT
david: here at the top stories we are watching at this hour. president trump's agenda remains in question as he takes aim at gop senators like bob corker. what is the late -- latest tete-a-tete mean? king jeffries will weigh in on tax reform. we will discuss the latest on the national rifle association comments and much more. in the race for the fed, president trump's team is wanting to rollback regulations and the bills to run a large organization. ♪ david: it will be difficult for president trump to take on one republicans. bob corker was key of the committee. here to explain how their feud which took place over the weekend could affect prospects is our chief washington
andespondent, kevin cirilli marty shanker who joins us on set. limits are with you. this is something that has been boiling over for some time. , go backionship soured to july last year, 2016. he was rumored to be a running mate for president trump. how did this relationship sour? i think it is more senator corker decided he did not want to align himself with this president. there were reports that he himself -- he took himself out of the state race and rather than donald trump not extending that invitation. things have soured since then. he is a very independent-minded senator. well-respected within the chamber. just about a month and a half ago, he raised questions about the soundness of this quest -- of this president. shery: how will this impact tax reform at a time when the president needs every vote he can get? kevin: that is the big question.
talk about a lot of drama on twitter over the weekend. in terms of tax reform, i have spoken with the several sources all morning. republican senators here inside the senate. they are scratching their heads. they are not sure what the calculations was on behalf of the administration to so actively go after one of their own. for the cap collision for senator corker, as marty pointed out, he has nothing to lose at this point. he is not running for reelection. i can tell you that in terms of this having a direct impact, it could simply because according to my sources, they really starts to great a normalized environment in which republicans going aftery openly this administration. i have spoken with two sources senator corker was never on board with president trump to begin with. despite him being on that vice presidential shortlist are in the campaign. i will tell you that if you play
this forward in terms of tax reform, every vote counts. senator corker, while note -- while not the most fiscally conservative, his raising the fiscal issue really is in line with some members of the far right in the senate have also been saying. that poses significant risk for tax reform. david: marty, on that note, i go to this interview with senator corker. a lot came out of that that was published in the m.i.t. this morning. one element of that is senator corgan -- parker has given voiced -- voice to something. do you buy that? do you buy that things are coming to a head without the republicans think or regard this president? marty: whether it is coming to a head is a question during one thing that the senate is not in session this week. it is hard to get a former react -- formal reaction. i wouldn't six the backed -- i
would suspect he will not see great moments from the senate. saying that people they respect bob corker. that said, we does not help his agenda at all. i do think there are probably concerns widespread in congress. this is not new. this has been going on since this trump presidency took place. shery: president trump demanding congress funding for his border saying that will be in exchange for letting the dreamers stay in the country. how much more of a distraction will this be? marty: they will be another distraction. chuck schumer and anti-policies said that is a nonstarter. there is no way they will accept that. this makes the promise of keeping this issue alive probably to the midterm elections, which is when you polling, the vast majority of americans support a clean daca bill that provides protection. it is going to be delayed if it does not happen. from nancyme quote
pelosi and chuck schumer. they said "we told the president we were open to border security measures alongside the dream act. this list goes so far beyond what is reasonable, this proposal fails to have it compromise." you can look at immigration and what was released last night. tax reform is an example. how is congress responding to policy statements like the one we saw a release last night? i spoke with a source over the weekend who really said that they lack of specifics seemingly coming from the white house on a host of issues, whether it is tax reform or immigration, was a strategy of sorts to let congress deal with it. democrats are- saying this is a nonstarter. when you force republicans to deal with one another, you exasperate these divisions within the party. i think it is of note that the president is golfing with senator lindsey graham, a republican in south carolina and
by no means someone who has been a staunch fan of president trump. i think that sam mimic coupled with the developments of last week in the report regarding the relationship of rex tillerson and the president, and now bob corker, ii think that think then outreach effort and an understanding on behalf of the administration to align where they can with people like senator graham to deal with foreign-policy issues. but then to bring it back to immigration. republicans feel their stance on immigration is a winning one, definitely a nonstarter with democrats. they do feel it is a winning one. kevin, looking ahead to president trump's agenda, we know he will speak with prime minister trudeau, this coming as the nafta negotiations become more contentious. what are we expecting? kevin: they have definitely become more contentious. even with canada. many people thought the dynamic
between the u.s. and mexico would be the top pot stirrer during nafta negotiations. it turns out that canada trade issue has heated up. i definitely think you could be hearing a lot about nafta when these two leaders meet. now with daca back in the news as well, i think it will be very interesting to see what mexican government officials have to say about nafta as well. david: marty, do we have a good sense of what this white house wants us to be focusing on once legislature is to be focusing on as well? is it trade, immigration, tax policy? marty: -- i think your priority list is donald trump's twitter feed. that is the message that is coming out of the white house. you can tell what he is thinking right then and there. david: marty, kevin, thank you. that is kevin cirilli and marty shanker. we have the bond market
on holiday. equity markets feeling the pressure. let's bring in abigail doolittle with the latest. abigail: we are looking at small declines for the major averages. the dow, s&p 500 are all down fractionally. it is a positive last week's gains are the s&p 500 as of last friday up for weeks in a row. the longest stretch since march. the s&p 500 is on pace for its first today decline since march -- since september 8. and about a month. be very smallay but it is certainly a bit of a reversal of a bullish activity. some of this could have to do with going into earning seasons. investors on pause ahead of what could happen. he is saying he thinks earnings biton could prove to be a of a tell when considering investors are looking for 5% year-over-year growth at that achievable. a lot of text -- tech companies have been positive. this is g #btv 620.
bottom, energy. the worst sector. up top, take a look at that. technology is up 28.5%, on pace for its best year since 2009. coming out of the great recession. having its best year since all of the initial accommodations from the fed. i perform in the s&p 500 and the financial sector in a big way. willthink these gains continue based on tech companies who have been guiding to a positive result. could have tongth do with the s&p 500 current valuation. this is g #btv 8946. it is a forward pe. we see that out of that 2009 low, climbing, climbing, climbing, now 18 times. its highest level since 2002 technology evaluations tend to -- but text strength could explain some of that rising pe we are seeing.
some laggards on the day coming out of the entertainment and gaming space. we have viacom and 21st century fox trading lower after blade ruer put in a disappointing openin box office. these gaming stocks are lower. it has downgraded. both shares market perform. the analyst there is worried about the competition. he thinks that fiscal year 19 could prove to be a multi-year earnings peak. some weakness in there. david: think it very much. abigail doolittle with that upcoming market. facebook'sl you why chief security office -- officer is saying the task is more complicated and dangers and then you might think. that is sex. this is bloomberg. ♪
♪ shery: this is "bloomberg markets: balance of power." let's get a check of bloomberg first word news. mark crumpton has that. minister u.k. prime theresa may addressed the house of commons today. she discussed brexit's future and timeline. >> how long the period should be is determined simply by how long it will take to prepare and implement the new systems we need. as of today, these considerations forward to two and information the period of two years. mark: the prime minister reiterated brexit's objectives of securing security relationships with the european union. says thepresident ongoing diplomatic dispute between washington and ankara is "very saddening." 12 sides have so the --
suspended be says to dozens looking to visit the other country. the president spoke today during a state visit to ukraine. the dispute started after the no one administration arrested a turkish national who works in a consulate for alleged involvement in last year's coup attempt. nato does not want a new cold roar with russia, despite members concerns about the russian military buildup. secretary-general jen stoltenberg spoke today at the end of a four-day nato parliamentary assembly in the romanian capital. he said nato is concerned about russia's "lack of transparency when it comes to military exercise." a special prosecutor says he has a charge of involuntary manslaughter against michigan's chief medical executive and a criminal investigation of the flint warner crisis. sixthctor would be the person to face manslaughter charges tied to an outbreak of disease in the flint area of
2014 and 2015. the attorney general's office says key officials knew about a spike in legionnaires but failed to tell the public until january of 2016. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. -- shery: thank you. fixing the problem is going to be harder than it sounds. that is according to facebook chief security officer alex's team is. he has been handling the company's investigation into russia's use of facebook ahead of last year's election. here to talk about the consequences of fixing fakes -- big news is sarah frier who is with us from san francisco. he was saying it could be more dangerous to solve than the public actually thin. what is he talking about. >> basically what he is saying is it is not an easy computer effects. and you look at how to
technologically solve this problem, basically you are talking about flagging stories that you think bob would be spreading and then killing those stories. that ends up to two b and information judgment. is this information of high quality, is it seemingly spread by other countries? there is not a quick way to do that. if they do implement a quick way to do that, it could end up silencing ideas from one side or the other. tweet storm his showed so much frustration have a public is viewing facebook's role here. he said there are a lot of people who want them to come up with solutions that would favor their ideology. he said that kind of thing could turn facebook into a ministry of truth that all might certain ideas fly. ist facebook has been doing have the they don't
machine learning capabilities to solve this problem. they just hired 1000 more people to help go through political ads. they let advertisers know that adds about target people based on their politics, race, will be manually reviewed. it is a difficult problem. hired you mentioned they 1000 more people. i think back to an article that someone wrote five years ago centering on how youtube was hiring people to screen videos that were flagged by its users. and the difficulty of making those judgments. it is hard if you have people within those jobs. how equipped with these 1000 more staff members is facebook to deal with this? sarah: facebook has to come up with some very difficult guidelines for these people. no two people are going to have the same natural, personal response to one of these things. they will be better at discovering anomalies. i remember when a bot created a
fake facebook profile of me. you could just tell based on the way the sentences were written that they were written automatically grabbing things from i-8 bio that do not make sense. obviously, a human could look at that and say, this is a bot. when it comes to more nuanced things like people sharing news stories, anyone can share a news story. but does not necessarily mean this is a bot. i think it is going to be easier for humans to spot anomalies, but it is going to be difficult still to answer the broader question of, is this fake, is this something that needs to be dealt with? a long road for facebook. shery: google had previously said they found no evidence of their activity in platform. now they are saying they are taking a deeper look. have they found anything? sarah: google is saying they have found russian ads. keep in mind that these companies do not really
traditionally talk to each other about what they are finding. i think in this discovery that facebook has made, twitter went and looked at what it had to google looked at what twitter had. all of these companies are now starting to compare notes about this. incredible that competitors would do that. but also, surprising that they had not already on a matter that event.ecting this great this presidential election. i think google is realizing it little bit more data points but they did not have before. shery: sarah frier, bloomberg news, thank you so much. diplomatic staff between the united states and rkey as escalating. -- wes after the turkey will have the latest from istanbul next. this is bloomberg. ♪
♪ shery: welcome back, this is "bloomberg markets: balance of power." david gura. a deepening standout between turkey and the u.s. has resulted in suspended visa. a statement from the turkey reads "effective immediately we have suspended visa's regarding u.s. citizens in the u.s.." -- i talk with where we go want to quote from a readout. the white house gave after a meeting between the presidents a week ago. it said they met here in new york. they are reaffirmed the strategic partnership between the united states and turkey and toeed to continue working defeat terrorism in all its forms. at the beginning of that meeting, all looked well or seemingly well. what has happened?
>> it is a shocking decision. as you mentioned, two weeksgo, tunnel trump and president erdogan where meeting, trump called him and said he was becoming a good friend and he was getting high marks. i think what has happened here from the u.s.n that some of its employees and even u.s. citizens are being -- have been taken hostage to be used as political leverage. shery: we all know that nato members are already at odds over syria appeared what will the impact be when nato member -- four nato member countries? time --key, for a long there have been questions about turkey's position in the nato alliance. it is increasingly in conflict with the u.s. over syria policy. onkey is very much focused doing these groups but the u.s. has partnered with in syria as a threat. it sees them as a main threat.
these strategies have not aligned for a long time. turkey it has partnered with russia and iran in syria and is expected to start a new invasion anytime. david: there is that issue and there is this issue of a cleric living in penn -- living in insulting you. of theirotten a result attitude toward him? the turks demand he be sent back to turkey. ben: the u.s. is consistently said that the turkish government has not provided sufficient evidence linking him directly to the coup. that request seems to be going nowhere. shery: given the status of ham and all the other issues between the u.s. and turkey, what is left in order to help the sq late the situate -- de-escalate the situation? back tohink getting your question, a lot of this is going to depend on whether erdogan and trump can get together and work this out.
president erdogan gave brief remarks at a press conference in kiev. the message or sing part of that is probably that he very squarely laid the blame for this decision on the u.s. ambassador and not on the administration. which is his way of leaving the door open for some sort of reconciliation. the time we have left with you, let's talk about the economic ramifications. we mentioned the weakening of the lira in the wave of this new. this affect will the most, tourism or will it have wide-ranging economic fx? -- affects? ben: the u.s. is turkey's third biggest trade partner. there is a significant volume of trade there. as far as tourism, it is not a major source of tourist for turkey. it is important for turkish airlines and those shares were down a percent today. props most important is a signaling.
governmentss and are dependent on foreign investment. i think investors will be questioning whether this is going to lead to further action against turkey that could cut off that funding. david: i preach at the time. that is benjamin harvey, bloombergs euro chief joining us from in stemple. hill: stalemate on capitol and the debate on gun control. officialp nra backpedaled on the possibility of new restrictions. what are the democrats next step? also, tax reform is on the agenda as we speak to the congressman. this is bloomberg. ♪
mark: nate is moving its way across the u.s. east coast dumping heavy rains and bringing powerful winds as a tropical depression. yesterday, hurricane nate brought a burst of flooding and power outages to the gulf coast. as the first hurricane to make landfall in mississippi since katrina in 2005. a woman who lived in a florida nursing me that last air-conditioning during hurricane irma last month has becoming the 13th fatality linked to the home. authorities say the woman died from ailment she suffered when the rehabilitation center at hollywood heels lost -- hills lost power. the woman's husband died in september. the state has suspended the facility's license. another white house tweets is raising questions about whether president trump is considering military action against north korea. the president tweeted today that the u.s. has been giving north korea billions for 25 years in getting ash and getting nothing. he added "policy did not work."
the vice president said there could be an "civil war was quote over cure cook if talks over kurdish independence are left unresolved. isod told the press he urging both sides to show restraint. saids owner jerry jones the nfl cannot leave the impression it tolerates players disrespecting the flag and any cowboys making such displays will not play. the cowboys and jones knelt arm in arm before the anthem when they played in arizona two weeks ago. if you days after president criticized nfl players for anthem protests. all of them stood during the anthem with arms locked yesterday, vice president hence left the game in indianapolis between the colts and 49ers when some of the players did not stand for the anthem. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.
shery: thank ou a top nra official bcktracked on the possibility of a bump stock ban yesterday after an increasing number of republican lawmakers signaled they were open to regulating the device. they issued a statement an agreement. the debate over gun control has had a familiar stalemate on capitol hill. with democrats pushing for legislation. bans haveot believe worked on anything. what we have said has been clear. if something transfers a semi automatic to function like fully automatic, it ought to be regulated differently. regulations are not going to do it. we need a law. it can't be changed by another president. shery: we are joined by congressman hakeem jeffries, a democrat from new york. we heard from chris coxe now, he talked about california banning these high-capacity magazines preventingping and
us. what do you say to those types of arguments? rep. jeffries: we will never be able to completely eliminate gun violence as long as we have bad actors in a community in the city -- city or country. we can certainly minimize the do in that mad men could the context of a mass shooting. there is no reason to believe that we should allow a single individual to kill more than 50 people in las vegas, injure or wound more than 500 because of his ability essentially to have an automatic weapon unleashing a reign of terror on individuals. that should be an acceptable in america. and certainly we should be able to do something about it. david: i was struck by the conversation about -- around bump stocks. feinstein talking about the need of bans. twotalked about this in thousand 13. you hear someone like house speaker paul ryan who says he needs to look into it. how do you square that?
how do you explain that disconnect? the time for talk is ended. the time for action has been long amongst us. we have gotten mass shooting after mass shooting. sometimes it is in a church as a charleston, south carolina. sometimes it is at a concert. sometimes it is in a classroom as was the case in connecticut. sometimes it is in a place of work as was in san bernardino, california. at some point, i think the american people are going to make clear to congress, you must act to minimize this level of violence. in america, we have a second amendment. we also recognize we have 5% of the world's population, 50% of the world's guns. that means there are more than 300 million guns floating around america. take those away from lawful gun owners. but many of those guns find their way into the hands of individuals who would do harm to
innocent people throughout this country. we have to do everything we can to stop that. shery: not only gun control which is coming to the forefront, but also we are again hearing about border wall funding from the president himself. saying, take ad hike. trump doubled down on building a wall and wants to pay for it. here is a thought, take a hike. how do you respond to president trump's request? the democrats thought you had a tentative agreement. he seems to be backtracking. if there was an agreement. how are you taking it? the president has not demonstrated himself to be a man of his word. he says one thing, does another, over and over. he did that in business, now he is doing it again as the president. fully everyone will recognize that we have an immigration that is broken. you can either take one of several different approaches.
here is mass deportation, seemingly has flirted with that. that is completely impractical. there is the status quo, essentially doing nothing. that would be highly problematic. everyone understands we have to address our immigration system. then there is comprehensive immigration reform, trying to find a tough but fair pathway toward citizenship for the dreamers, people who came to this country not of their own volition. often at a young age. and then for others who are hiding in the shadows, who can be productive citizens if given the opportunity. us arethe three of sitting in a sanctuary city. the mate -- mayor of new york has declared it so. in the document last night, that seems to be a target of this administration. withholding funding of cities that with -- that say they are as such. do you think we will see the erosion of the number of sanctuary cities? rep. jeffries: time and time again we have seen the court system have to step in.
article three federal judges to rein in the administration when he gauges and unconstitutional action. we have seen that rick respect to the travel ban -- with respect to the travel ban. prohibits thement federal government from engaging in certain types of compulsory action to try to commandeer states resources for what essentially is a federal purpose. i would expect that if the president overreaches and goes in far, as has been the case many incidences, that he will be reined in by the federal courts. shery: the house adopted a bunch of her of dutch resolutions. what do you believe are the biggest issues here? have you been approached by republicans to try to find a bipartisan solution to the issues of tax reform? rep. jeffries: everyone wants meaningful tax reform. it should be tax reform from the middle out, not from the top down.
many of my colleagues on the other side of the aisle seem wedded to this failed theory of trickle-down economics. you have a massive tax cut in 1981, he did not pay for itself. it blew a hole in the deficit. you had a massive tax cut in 2001, another in 2003. never paid for itself. not jump said the econy. even though you dropped t top lostate from 39.6 235%, we 650,000 jobs during eight years of george w. bush's administration. the tax rate increased under barack obama. is aaying there correlation, but it certainly did not halt the ability of the economy to move forward. we gained more than 40 million private sector jobs. if we are going to have tax reform, it should be focused on the middle class. those who aspire to be part of it. something mark crumpton mention, he talked about jerry jones from the pressure on athletes to stand or the national anthem for have weighed in on this. might be at ae
positive moment, that is to say, colin kaepernick began to do this. some people were talking about why he was doing it. now it is front and center. do you think we are seeing the contours of the debate changes the result of the back-and-forth we have been seeing? rep. jeffries: i hope so. we have come a long way including racial and social justice. we still have a long way to go. one of the things that colin kaepernick wanted to highlight in his protest was the fact that you still have far to believe many unarmed african-american after city being killed at the hands of police officers. i think it is reasonable for us as a society to have a debate as to how we can resolve that. that theyen said concept of liberty and justice for all is an american value. that is what these nfl players are trying to stand up for equal protection under the law, an american value. that is what these nfl players are trying to stand up for. i think it is something we can
repeal and replace? abigail: yes. this is an interesting story. it, on has to do with pace for its worst day since august 15. on the possibility that president trump could sign an executive order on health care which could lead to another version of her peel and replace. basically, this executive order loosen the, standards around the obamacare now whereby lots of participants will go away from the exchanges and go through assigned groups. we see the weakness. take a look at community health. down 5.7%. tenet healthcare, quorum health, universal health services, down in a big way. lots of weakness. these health care stocks tend to trade much -- any more ball tiles fashion -- in a more volatile fashion. only a percent to 12% of their earnings comes from obamacare. isically, this plan could
incentivize participants to move away from the exchanges. and toward other has ability is. it is unclear as to whether or not there will be a penalty. is a great, lots of turmoil. we are seeing that for these stocks today. a little under the radar screen. we are hearing about repeal and replace, my first impression is a quite version of taking away obamacare. -- quiet version of taking away obamacare. david: we saw a lot of sectors will underway as we thought we would get infrastructure spending, tax reform. you see sectors getting into that. we are not seeing that and health care. abigail: we initially wear. the newor has been on -- unbelievably volatile. if we look at g #btv 4874, this shows this is a bloomberg health care -- hospital index. at the beginning of the year, this index was up more than 30%. that action was on hopes from investors that obamacare would
not go away. the affordable care act would not go away. as republicans really tried to make it go away, all those efforts, we see this index going down. i went point down 5%. now up 5%. lots of volatility. it will be interesting to see. shery: thank you. david: trump administration tax concerns among republican lawmakers over how to keep middle-class -- middle-class taxpayers from footing the bill. chris collins was focus on solidifying, telling bloomberg best. we are committed, the republicans are committed. middle income earners and even upper middle income earners are not going to pay more in taxes whether you live in alabama, or whether you live in new york or new jersey. republicans -- we are joined by sahil kapur. he joins us from capitol hill. let me ask you what republicans are worried about. we can get into details in a moment.
what the republicans are concerned about is specific provisions in this plan that would end attacks put brakes -- tax breaks. in blue states. like new york and new jersey and california. that debt -- there has been a limitation of exemptions worth about 4000 per child. if you are looking at a large statenthat lives in island or long island or a new jersey, that could be a significant tax increase for them. that is according to studies done by a nonpartisan group like the tax policy center which found most middle-class americans would see a tax cut under this framework. but the broader message that republicans have does not leave a lot of room to allow some middle-class families taxes to go up. and create political problems. that is what the republicans are trying to find to mitigate. from thee pushback
trump administration has been, especially from the chief economist, that they use a lot of imagined numbers. that the details are not out there. what is the deal here? sahil: there are details to be filled in. kevin hassett was right about there. chairman kevin brady in the house said the same thing. he has gone further in his criticism, calling it a work of fiction. the framework included a lot of blanks. they did that for a few reasons. republicans wanted to keep room to decide later on what they would do in terms of the increase in the child tax credit. where they are going to put the income tax brackets. theythese studies did was used the brackets but the republicans put out in their 2016 blueprint. not a crazy ascension. it may not be precise. if they change that, the numbers could change. they have that to decide and they have to decide the size of the child tax credit whichould mitiga some of the possible tax sites on middle income
families, about 30%. and 100 50,000 would see a tax hike. the question is why republicans can be surprised with these analyses if you do not put in these details, then the number crunchers cannot factor them in. kevin joins me at 7:45. let me ask you have united the republican caucus and the house is at this point? it sounds like republicans are looking to find common ground and color in these gaps in the plan. are they on the same page? the broady are on strokes. they want to reduce taxes across the board. for individuals and especially for corporations, for pass-throughs as well. they are on board with the sugar. they agree on the desert. they do not agree on the vegetables. you cannot get a bill through the senate and make it permanent unless you have revenue rates to balance out these tax cuts.
they agree on the nice things. they do not agree how to balance that out. david: great to speak with you. that is sahil kapur joining us from capitol hill. coming up, fed watch. new details on what the trump administration is looking for in the next federal reserve chief. that story is next. this is bloomberg. ♪
♪ shery: mrs. "bloomberg markets: balance of power." david: i'm david gura. in the race for the next fed chair, the white house making demands known. they want them to roll back financial regulation in a decision that will outlast his presidency. we are joined by gina, a reporter at bloomberg news. let's talk about where things stand. i think back on recent speeches we have heard from chair yellen, regulation is something they have held up as a signature achievement of her tenurth far. gina: absolutely. i think it is important not to
overstate that. one thing we hear from fed official is regulation has been this cornerstone of achievement. they are willing to negotiate around the edges. we often hear they think regulations might be too onerous for small banks. yellen says she supports regulation implemented after the financial crisis. is she often the candidate list if they want somebody who will want to ease financial regulation? jeanna: that is a good question. what it boils down to is how much of any as they are looking for. if you look at janet yellen, she is not uniformly saying all these regulations have to stay the same. what she says is good, there is room for working around the edges. just the small banks idea. you could make these regulations a little bit less intense for these small and midsize institutions. david: let's talk about the candidates. what they think about this issue
in particular. kevin warsh of sanford has met with the president. what do we know about his stance on financial regulation? jeanna: we know he should be one of the more comfortable of the group and rolling back financial regulation. -- he definitely has a conservative job. president trump could nominate five governors out of the seven person. what sort of impact will this have on the fed? jeanna: trump will be able to trump will be able to reshape the federal reserve during his administration. it is for governors unless yellen leaves in which case he has a fifth. out of seven people, that is a substantial portion. it is important to remember that these are the people with permanent votes on monetary policy. while there are -- they all wrote on a rotating basis where government is on a permanent
list. have written about this for bloomberg markets. we have seen the balance where those fed presidents have more power. but is not a permanent thing. it seems like the situation we have now. what are the effects of that as the fed ways and how it normalizes the balance sheet? jeanna: i think one thing that is important about the fed president having greater numbers on the committee is they do tend to be the monetary policy maverick. see dissent.e we the last governor dissent was in 2005. sometimes, it heralds the big policy change like when eric dissented of a rate increase, everyone knew what was going to happen. i think we can see more predictable policy of the governors take a stronger position on the committee. shery: what about the monetary policy? they tend to be more hawkish. jeanna: that is definitely
historically true. 10 to be more hawkish. this is an unusual fed. you have a large number of appointments by a republican president. republicans tend to favor a more hawkish stance. i think it could be anything goes with the actual policy to get out of that. david: w had glenn hubbard on bloomberg tv earlier. let's listen to what he had to say on the subject of the fed. >> i think, and i think the fed leadership would agree with this, that we have seen a series of very important supply shocks in the world economy that have restrained inflation as wage growth has risen. over time, as wages continue to rise, inflation will pick up. hubbard, maybe not a front runner, talking about inflation. where does he fit into all of this and went are the betting odds -- what are the betting odds? jeanna: he has really dropped. he is at the bottom of the pack. if you look at the line.
you see warsh and powell emerging followed by cohen. i think what glenn hubbard is saying is that wages are going to drive up inflation. if they get a conventional fed chair, they will probably be saying the same thing. david: thank you so much. she is the reporter bloomberg news joining us in new york. that is it for the czar. you can sign up for the balance of power newsletter at bloomberg's politics.com or bloomberg.com/politics. get the latest on global politics in your inbox every day. coming up on bloomberg markets we talked to a democratic congressman from new york. this is bloomberg. ♪ who knew that phones would start doing everything?
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