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00:00From the world of politics to the world of business, this is balance of power with David Westin. From Bloomberg World Headquarters in New York to our television and radio audiences worldwide welcomed balance of power. We start with the U.S. economy today as we just got those fourth quarter numbers for GDP out this morning and we turned to Michael McKee to interpret them for us. He is Bloomberg International economics and policy correspondent. Mike, thanks for being here. I mean, when they first came out, at least the headline number look strong to me. It wasn't bad. The overall data dump we got today wasn't bad. But there are some questions under the hood. GDP, as you mentioned, maybe comes in stronger than expected, two point nine percent for the fourth quarter. That's down just a little bit from three point two percent in the third quarter. The trade balance widened, which was a surprise. And here's the real surprise in the numbers today. Look at the jobless claims numbers. What about all those layoffs? We could talk about that if you want. There is an explanation. Durable goods orders, five point six percent, but underneath the hood. And let's let's talk about that when you look at what the composition of GDP was. Consumer spending was good. Up two point one percent. But business spending up just seven tenths of a percent. And once you back out Boeing nondefense aircraft from the durable goods orders, you're down a tenth of a percent. So businesses seem to be pulling back at this point. Do they know something that the Fed doesn't know? Are they buying into the recession story instead of the soft landing? Government spending was one of the leaders in this most recent quarter, but interestingly enough, defense spending wasn't up that much. We're expecting that to go up as we pay for all the stuff that we sent to Ukraine. This was an inventory story. Inventories the fastest growth in a year. Now, if you're a politician, you're looking at the overall trend. And GDP has turned itself around. This summer, we had the very weak quarters in the second and first quarters. The third and fourth quarter have been strong. What we don't know is what's going to happen. You can see there what's going to happen when we get into 2023. The forecasts are for a big drop in GDP in the first and second quarters. Yeah, at least I would think if businesses are not investing, it might affect productivity going forward. It might affect growth down the road. Yes. Thank you so much to Bloomberg's Michael McKee for that report on the GDP numbers. We're gonna turn now to Capitol Hill and the new 100 18th Congress, what we were expecting from it and specifically ask Republican Congressman from Kentucky, James Comer. He is the chair of the House Oversight Committee. So, Congressman, thank you so much for being with us. Congratulations are in order. You are the chair. I know you've called it an all star committee. You've got access said it's the most exciting congressional history. Tell us exactly what you're expecting out of your committee in this new Congress. Well, we're probably going to provide some oversight to this administration. Look, the Biden administration has enjoyed two years without any top of congressional oversight from the House of Representatives. And you look at that two year time period, there's been record spending and we can make arguments. And I'm sure you have guests that will argue whether or not we have inflation because of overspending, because of overstimulation or whatever. But at the end of the day, the facts remain that there was record there was a record amount of spending in the name of Covid. And in the name of stimulus. But yet nobody in the House of Representatives has had any type of oversight over that spending. And we hear reports every day about TPP loan fraud, about unemployment insurance fraud and about stimulus fraud. But yet nobody's looked into that. So I'm very virtuous and we'll be next week and that we're just going to roll our sleeves and start trying to go back over the past two years and try to determine if there was indeed massive amounts of waste, fraud and abuse. And we're going to see if, number one, we can quality that money back. And number two, hold people accountable who made decisions that led to potential fraud with our tax dollars. Two things there. Number one, most the people, the economists, certainly we talked to here do agree the American rescue plan was part of the stimulus that really caused some of the inflation from Larry and Summers on down. So we all agreed on that. You're talking about maybe misspent money, not just the fact that we were spending, we were misspending it. Is that your number one priority? After the oversight committee, we want to get the backs of the American taxpayer. We're also going to be the committee tasked with investigations and we have several high profile investigations that are in the news a lot. We're very concerned about some of the decisions that this administration has made that have led to an open border policy. We're very concerned about some of the decisions that were made with our foreign policy. For example, when we pulled out of Afghanistan and left all of that military equipment behind. I don't think the American people have an inventory of how much equipment was left behind and where is that military equipment now? These are things that we're going to investigate. We're also concerned about Biden family influence peddling. That's been in the news a lot lately. We feel like this administration could potentially be compromised because of the millions of dollars that the Biden family and Biden family interests have received from our adversaries in China and Russia. Is there a risk of spreading yourself too thin? I mean, you've already listed several things. You'd, by the way, didn't mention the confidential documents. I suspect you might want to look into that as well. That's an awful step to look at. Is there a risk of covering so many things that you won't be able to get to any of them in the depth that you'd like to? Well, I said from the beginning, we have the bandwidth to be able to conduct between 40 and 50 major probes and investigations at the same time. We have a large staff. Our staff grew when we went for the minority, the majority. I have 26 very quality, very passionate members of the House oversight from my side of the aisle. So I think that we have the bandwidth to do this. We're only focused on, you know, things that we deem major violations of either taxpayer dollars or national security. So these are areas where we're going to continue our focus. And look, we're partnering with other committees. If we feel that there's oversight that we need, that another committee of jurisdiction can can help out. Then we're certainly going to pass that over. I'm going to be kind of like to the referee for oversight in this Congress for the majority. And if I feel like there's something the Financial Services Oversight Subcommittee should look into, then we're gonna pass that along to them. So 40 or 50 investigations is a lot now. I understand you're saying that's the bandwidth. You're not necessarily saying you'll use all that bandwidth. But as you look ahead into this Congress, do you have an estimate of how many investigations you might commence? Well, we want to try to when we look at an investigation, what happens a lot of times with congressional investigations is they just keep growing and growing and growing. That's what happens with special counsels as special prosecutors. That's why I've never advocated for one. I don't think we need them there. Their scope starts out narrow and there are no guardrails. It just keeps widening and widening. And then the thing never ends. The Durham investigations are a perfect example of that. So we're having narrow scopes, if we will. You know, we want to know how much military equipment was left behind in Afghanistan and where is that military equipment now? That's the scope of that. We want to know, you know, is is this administration compromised because of all these shady business deals that the Biden family has done, because of all the millions of dollars that went to the University of Pennsylvania that funded the bodies that are for diplomacy? We're concerned about who bought that artwork, that hunter selling for record prices in New York. We have reason to believe that's going to our adversaries in China as well. So we want to trace that back. Now, we have specific requests from banks with request with respect to specific financial transactions. And we're also going to try to determine if if part of the influence peddling scheme included things like classified documents and things that would jeopardize our national security. So, you know, it's it's a big investigation, but it has a pretty narrow scope as far as investigation goes. So we hope to wrap these investigations up issue report and move on to the next issue that we need to consider in the oversight committee, of course, where we don't have the results of these investigations yet. So when you refer to shady business dealings, we'll find out. I presume that's what your committee was looking into. You've got some interesting cast of characters. I can put it that way on your committee to be very, very different political persuasions. What is that going to do to the effectiveness of your committee? On the one hand, you have AOC. On the other hand, you have Margaret Taylor Green. Well, look, I think you can be an asset. The media is obsessed with those two. The media loves AOC and Margaret Territory. For better or worse, they add a top celebrity to the committee. They help you get media in there. We have four of the five members of the squad. We had the majority of the Freedom Caucus. We have the majority of the guys that were given Kevin McCarthy Fitz for the first week during the speaker's nomination. But we also have a lot of quality here. Look, the Democrats have broken up. I think he is a credible quality member of the Democrat conference. We have people like Mike Turner, who's chairman of the Intelligence Committee. He's the new Adam Schiff. And going to be a much improved version of Adam Schiff. We also have a Virginia Fox who's a very well respected. HD, the head of the education committee. So we have a good mix of members in the oversight committee. I think that the benefit of having more of what I would call firebrands is that they draw attention to what we're doing. A lot of committees work hard in Congress, but they never get any media attention. This this committee is going to get a lot of media attention if for no other reason, because we have so many firebrands on both sides of the aisle on the committee. So, Congressman, I must say, I walked right into the media obsession with the AOC in March of Jihye Lee Green and you called me on it. Good for you. I'm going to ask one last question that's not mine is from a viewer here. It was now when the question I was gonna ask and it's actually about Representative Santos, we all know about the story of Jorge Santos here. And the question is, is there going to be some broad rebuke of him? Does that fall within the jurisdiction of the oversight committee? No. Thank God he's gonna be in front of the Ethics Committee, but he's also being investigated for campaign finance violations. Look, I've been very critical of Santos. I've called him out on Meet the Press in lots of different media outlets. At the end of the day, you can't let someone you can't prohibit someone from serving in Congress for lying just about every member of Congress who said something that was proven to be not accurate. But you can't keep people out of Congress if they violate the law and the law, campaign finance laws are very serious. They're taking very seriously up here. It's my understanding he's under investigation for campaign finance violations. If he, in fact, committed campaign finance violations, then he won't be in Congress very long. But as far as you know, whether or not he should be seated in Congress, he won an election. Now he lied about his background. Lots of members. You know, Elizabeth Warren wasn't truthful about her ethnicity. You know, we can go down, have people in both parties that said things about their military service that may not have been true. But at the end of the day, you're lying about your background won't prohibit you from being in Congress. But if you break the law, then that will prohibit you from being in Congress. And that's where his biggest problems are right now with the campaign fight with potential campaign finance violations. Thank you so much for being with us. I hope we can check back in with you on those investigations as they develop. Thank you so much. That is Congressman James Comber of Kentucky. Coming up, we're going to go to the Senate side of the Hill to talk with Republican Senator Tom. Tell us about his plans for the Senate Banking Committee. This is balance of power on Bloomberg television and on radio. This is BOVESPA Bloomberg Television and Radio. I'm David Westin. Well, this dispute continues over the debt ceiling on Capitol Hill. And one of the things that we have heard is from Democrats saying why did the Republicans tell us what they like to cut? This is what Senator Schumer just said. Americans deserve to know what kind of cuts Republicans want to make and why they think it is worth forcing an unnecessary crisis that will hurt most American families. That was the Senate majority leader speaking from the floor on Monday. Now we turn to the other side of the aisle, Republican Senator Thom Tillis of North Carolina. So, Senator, thank you so much for being with us. What is the answer to Senator Schumer's point? I mean, why don't the Republicans say if they want cuts, what they would be? Well, I think the later Schumer had stopped at that. The fact that we do as Republicans, particularly the Republicans in the House, do have an obligation to put forth a proposal along cuts. But you say at the end of his statement, he already prejudged something. He doesn't know anything about what those cuts would be. I think we have to sit down, recognize we have divided Congress. We have a White House that should work in good faith with the Republican leadership in the House and come up with a way to avoid something that I hope that we can absolutely avoid. And that say they are not raising the debt ceiling and potentially moving towards default. There's no question that there are opportunities to cut the current rate of growth in spending in Washington. And it's on us, guys, Republicans controlling one of the chambers in Congress to put forth an offer and expect Biden to step off of his. I'm not negotiating stance and get to work so that we can do good for the American people. Yeah, I will say we've asked some Democratic lawmakers, why does it make sense to say we're not going to negotiate at all? But let me ask you, because the Democrats accuse accuse the Republicans right now of saying they want to cut Social Security, Medicare. Is that on the table from your point of view? David, I think that those are tired old tactics that I hope that we can get past. I've worked on a number of bipartisan legislation and thus in the last Congress alone. And you don't start by by misleading the American people. We do need to do work. When you talk about changes to Social Security, many on the left, we'll say that you're going to you're going to cut current benefits. It couldn't be further from the truth. What we're trying to do is put programs like Social Security and Medicare on sound footing so that we can continue to fulfill the promise for people already on those programs are soon to be on him over the next 20 or 30 years. But maybe rethink the mechanics of the program. So that is a promise we can fulfill for thirty five year olds. Twenty five year olds and 15 year olds, current course and speed. That's not a promise we can fulfill. We talk with Joe Manchin, the Democratic senator from West Virginia, last week, and he put forward this idea of a bipartisan commission. Such has been done with base closings as such has been done with Social Security sometime in the past. Is that sort of an interesting pipe dream or do you think there might be actually momentum in the Senate, in the House to go forward? That sort of basis? I think where I think we should. I would also note that when Senator Manchin, my friend Senator Manchin, suggested that people went back and talked about the disastrous Simpson-Bowles commission that was commissioned and the Obama administration, the fact of the matter is the Simpson-Bowles commission had some great recommendations. If we had acted on, remember, we were approaching 12 trillion dollars in debt when President Obama rightfully decided to move forward with a commission. Now, we're over 30 trillion dollars in debt and we're getting closer to a time when solvency threats are going to occur, particularly with Social Security within the next seven to 10 years. I think that that makes sense. It's probably the only way that we could reach some sort of bipartisan consensus on a problem Congress must solve. Senator, you of course, you're on the banking, Housing and Urban Affairs Committee. You lost one Republican member in Pat Toomey when he decided not to run for re-election. He would. You was steadfast in saying we need more oversight of the Federal Reserve in the way it works, this institution. So for you to step into that role. I believe that I will. And I think a lot of it has to do with transparency. We're talking about increased opportunities for under the Freedom of Information Act to get to information that I think can be managed and should be within the public's eye, at least within Congress. As I also think that we have to work on a lot of regulatory overreach, particularly with respect to the FCC. I think Gensler has taken us down a path where I have colleagues on the other side of the aisle or thinking maybe we need to tap the brakes a bit on his rapid expansion of regulations, compressed time frame for getting notice and comment, promulgating rules that I think are problematic. And I think there's a growing sense here that that may be a bipartisan effort going into this Congress. Senator, I know that you're going to want to try to do it all, but do I infer correctly from what you just said, that if you're going to put a list of priorities, you'd put the S.E.C. oversight ahead of Fed oversight? Well, I think they're both important, but just that the pace of change with the S.E.C. is very concerning to me. But I think we can walk and chew gum at the same time. I mean, the FCC is one agency that we need to look at. I think we need to address the legitimate concerns about transparency and oversight and the Federal Reserve. And I intend to focus on both of those. Senator, finally, I've talked to others. I'm curious about what you think. Is there any prospect for some bipartisan legislation, both houses, to switch to crypto? Currency, because you have a shared brown, you're chairman of your committee, who is interested in that. Also, Patrick Henry on the House side, Republican who's also interested in it. I think there absolutely is an opportunity. I think I have to give Senator Lamas a lot of credit for the work that she did in the last Congress. Senator Gellibrand played a role in this. I think that there is bipartisan interest in getting it right. And David, there we have to have a regular regulatory regimen of some sort. I'm in favor of a light regimen so that we don't stifle innovation. But even even minor things like proof of reserves, things that maybe could have avoided the RTX disaster. And that's that's a good example of where Gensler took his ISE that fall. And he owes some here. He has to claim some responsibility for the loss of billions of dollars overnight. But I do think in the crypto space, there's gonna be an opportunity for bipartisan work in both the House and the Senate. And I'm glad the respective chairs also have that interest. Senator, thanks so much, as always. Really helpful to have you on the Senator Thom Tillis from North Carolina. Still to come, we're going to talk with former Congressional Budget Office director Douglas Holtz-Eakin. But those GDP numbers out this morning. This is balance of power on Bloomberg television and on radio. The season is here. Thanks. That was the big story, the big banks to big tell everybody is out a lot. It's a question of how high the bar is set. Bloomberg Daybreak the numbers for a blockbuster number, low and through estimates. These guys are minting money with exclusive expert analysis. This approach makes sense. You're going to have to make an acquisition this quickly, become just a really crappy business model. I don't think their business is as broke as the world think. Bloomberg Television and Radio. The fastest numbers and analysis you trust. This is BOVESPA Bloomberg Television Radio. I'm David Westin with a lot of us have been similarly obsessed with the GDP numbers. I'm not sure whether the markets are to answer that question. We turn now to critic Gupta. So are the markets reacting to the GDP numbers using critique? They're not at the moment. And look, I think one of the key pieces is to think about here is in the premarket, you very clearly saw that in futures, you saw in the bond market as well. Essentially, the idea that the economy is slowing down, perhaps not the recession that we were expecting or hoping for by the pricing of the markets to be swiftly. No one's obviously hoping for a recession, but something that did actually move the markets this morning. But look, you've seen this recovery. And really, if you look beneath the numbers, it becomes a question of inventories more than anything else. And that really is where I think you're seeing the rebound led, by the way, by a lot of these tech numbers. For example, some of the biggest movers this morning are coming or this afternoon are coming from your biggest tech players, your Microsoft, your apples, your Amazons and of course, your Tesla as well, which had a massive beat on earnings yesterday, has been rewarded in a really big way by the stock market. Which raises a question I'll put you on the spot about is Tesla a tech stock at this point or our stock? That's a tough one because it was trading a multiple of attack. I'm not sure it is so much anymore. Right. And that is the argument that a lot of automakers are an auto analysts are now saying, look, they are being measured on their deliveries. And today it absolutely is part of the story because, look, they're being rewarded for increasing their capacity of production, not necessarily the software or the engineering behind it. They're talking about just production. How many cars can you get out of the factories, specifically in Berlin and Austin, that are now ramping up way more than they were before? So Tesla's certainly a big part of the story from an individual basis. But look, you have some earnings that aren't so great either. Look at Southwest, for example. Some numbers that we were kind of expecting would happen in the first quarter. Fourth quarter they'd missed in a very big way, big cash flow, negative, of course, because of those weather scheduling problems. And on top of that, have promised to invest in a really big way when it comes to their technology. So, Christi, do we have a sense yet of where we're headed in earnings? Because going into this year, people thought earnings would be the big story for equities in the first quarter and we're well into the earnings season now. Do we have any sense of where we're coming out compared to where we thought we would be? Yeah. And, you know, I'm going to quote Gina Martin Adams, our chief equity strategist, over Bloomberg intelligence, because she said at best, look, the earnings on the surface level, top line. They're coming out great. Look under the hood, though, and you're starting to see the economy catch up essentially with what some of these stocks are priced in. That's realistically a slowdown in sales. So you've seen sales misses, but the profitability is increasing and that's the takeaway so far from earnings. Terrific. Great to have you with us. Critic, as always. That's critic Gupta. And you can catch her anchoring at 1:00 p.m. Eastern Time on Bloomberg Markets. Coming up, I'm going to talk with Jane Harman of the Wilson Center about those tanks headed for Ukraine and what comes next. This is balance of power and we are on Bloomberg Television and Unglued Burg Radio. This is balance of power. I'm Bloomberg Television Radio. I'm David Westin to keep you up to date with news from all around the world. We turn now to Mark Crumpton here with the first word. David, thank you. Russia has launched a major barrage of missile attacks against Ukraine. The assault, which also includes drones overnight, was unleashed after Ukrainian President Vladimir Zelinsky expressed hope that donations of advanced weaponry would follow a pledge by the United States and Germany to supply Ukraine with battle tanks. At least 11 people have been killed. Meantime, NBC is reporting President Biden is considering a trip to Europe in February to coincide with the one year mark of Vladimir Putin's invasion of Ukraine. Italian Prime Minister George Moloney is preparing to head to Libya as part of her efforts to secure more oil and gas supplies from North Africa. Bloomberg has learned she may go to the capital, Tripoli, as early as Saturday. She visited Algeria earlier this week. Italy's state energy company is set to agree to an eight billion dollar investment in Libyan gas fields in the coming days. The Republican National Committee meets tomorrow in Southern California to choose a new party chair. The New York Times interviewed about a third of the members. Many of them say they like someone other than Donald Trump as their nominee for president early next year. So they appreciate what the former president has done for the party, but they're not sure he can win. U.S. health officials would like to get the frequency of Covid shots down to just one year. Today, they'll start discussing how to do that. Food and Drug Administration advisers will talk about what strains of quantum virus would be in an annual vaccine and how they would be chosen. Global news 24 hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalists and analysts in over 120 countries. I Mark Crumpton. This is Bloomberg. David, thank you so much, Mark. Well, just about 24 hours from right now, we heard from President Biden that he would be sending some 31 M1 Abrams tanks over Ukraine after all. And at the very end of the remarks, he was asked the question about exactly why he was doing it, whether Germany had something to do with it. Dirty enforcement to change your mind. Want to make sure we're all together as we're going to do all that's to doing right now. To get her perspective on this, something of an about face for the U.S. government. We turn now to Jane Harman. She's Freedom House board chairman. She's former congresswoman from California and author of Insanity Defense Why Our Failure to Confront Hard National Security Problems Makes US Less Safe. So, Jane, thank you so much for being back with us. What about it? What is the relationship between, on the one hand, the M1 Abrams decision for the United States and the Leopard to decision on behalf of Germany? Well, Germany was making clear that they would not send tanks unless we sent tanks, and the good news about this is threefold. Number one, it's the right decision. Number two, the German tanks are available now and we'll be there to confront any spring offensive by the Russians. ISE will take longer. We have to have them built, apparently. But number three, May the countries in Eastern Europe have tanks as well. And they'll send them in. I think this a huge barrage last night. I buy Putin in Ukraine's signals that he's getting even more desperate and afraid that the West will be unified and will provide enough weapons on the ground. And I I salute this. I miss you in Davos last week, David. But the the the the the refrain there was, we are all Ukrainians. I think we are I must say, I've got I came back saying the same thing that every gathering I went to that we started off talking about Ukraine, not about the economy, ironically, but when it comes to the use of these Leopard 2 tanks. I've heard numbers like maybe a hundred would go maybe get there this spring. Could that make a real difference on the battlefield as we go toward what could be a spring offensive on the part of the Russians as well as Ukrainians? I think you can make a big difference. First of all, the the leverage to tanks are pretty easy to operate. Our tanks are much harder and they'll have to be training for that, plus this long acquisition system that we have. But I think the Russians are kind of running out of gas, literally. They don't have the weapons they had. They certainly have a very mediocre to poor army. And they're using drones as much of their firepower and missiles. And let's remember that we're going to help the Ukrainians with missiles even more than we have with missile defense. So the good news is that that we are putting the Ukrainians in a position to win the most important weapon they have, which I say over and over is the Ukrainian heart. It is stronger than any tank or platform. It's amazing what they're capable of doing. They certainly are demonstrating that every single day. I must say, my experience thus far has been saying Patriot missile. No, we will do it. Then we will. And then it was M1 Abrams tanks. No, we won't do it. Yes, we will. Now, we saw President Zelinsky in response. The decision from Germany, United States, say thank you very much, but I need those long range missiles and I need those fixed wing aircraft. Is that coming next? Well, we'll see. I mean, if we are committed, then certainly Lloyd Austin, who's a very impressive secretary of defense, says we are to helping the Ukrainians win this war. We've got to provide them with the equipment that they need. I think the argument that, oh, dear, if we send another tank, the US will get attacked or Germany will get attacked. It's completely bogus. Well, that can happen anyway. But I think the Russians respect the fact that if NATO goes to war against them in Ukraine, hopefully it won't have to. That would be devastating for them. And they're on their back foot already. Somewhat different. But related topic, I talk with those confidential documents. Some of them printed, classified for President Trump, President Biden, now former Vice President Pence. I mean, you were ranking members. I recall the Intelligence Committee. You dealt with a lot of classified information. What is going on? Well, I am surprised that some Biden papers from Congress were discovered because the systems for protecting classified information in Congress are very strong. This stuff comes in. Envelopes and papers are taken away after you've raised in a so-called gift, a secure communication that that center building, sometimes a trailer in a garage, whatever it is. So I'm surprised about that. The executive branch at high levels. The papers are left here. But I have felt for years in the 9/11 Commission. Let's remember this two decades ago recommended that we should reduce overclassification of material. And in fact, my bill to do this was the last thing that happened to me anyway. I was literally in President Obama's office when he signed this bill into law. And it's call that Reducing Overclassification Act of 2010 and creates an office to try to do this, to do portion marking and documents. One of the problems, David, is if there's one sensitive paragraph or sentence that could expose sources and methods, which we don't want to do, the whole document gets classified. We don't need to do that. We can just mark that portion and take it out of the documents it's otherwise circulated. And this matters because thinking about information sharing in the United States, if we want to share what we know about sensitive plots with, let's say, the cop on the beat and it's classified and that person doesn't have access to classified information, we're stuck. So getting information out in a declassified form is a priority. And I think this mess that we're in right now exposes the fact that we over classified and also to be fair, that a few people who were somewhat careless with classified information, in one case, there was a refusal to turn it over in the other cases of Vice President Hanssen, President Biden. There was total cooperation. So I think a lot of Americans right now are wondering what's the next shoe to drop? Are there lots of other shoes to drop? You've just suggested why. Perhaps it would be unlikely we'd find it from former congressmen and senators. But what about senior executive members of the executive branch going beyond the president, vice president? We're going to find some former head of the CIA who had these in their basement or former defense said I would be really surprised if intelligence community members would have been would be sloppy about this. Is it possible that some other members of Congress might have some papers? I really don't. I hope not. I just remember as a member of the Gang of Eight, which was the most secret group in Congress, I never took a shred of classified material out out of that classified environment and even notes that I just never, ever. And I hope I don't rue the day that I find something, but I don't think it will. And I think most people like me were very respectful. It's classified information. OK. Jane, this is very helpful, as it always is. Thank you so much as Jane Harman. She's Freedom House board chairman and former congresswoman from California. Coming up, we're going to go through the GDP numbers from this morning with Douglas Holtz-Eakin. He's president of the American Action Forum. This is balance of power on Bloomberg television and on radio. This is balance of power on Bloomberg television and radio. I'm David Westin and we did get those GDP numbers, United States for the fourth quarter of last year. Today, headline number was pretty, pretty strong, stronger than expected. But as sometimes happens, there's a little nuance to the numbers as well. Take us through that nuance we welcome now. Douglas Holtz-Eakin. He's president of the American Action Forum and former director of the Congressional Budget Office. Douglas, thank you so much for being back with us. So explain to these numbers to us, if you can. Well, I think it's it's a pretty mixed report, to be honest, and people are reading into it. I think what they want to see. So take that top line. Two point nine. About half of that is an increase in inventories. Typically transitory. Don't want to count on it. You take that out. It's a much, much, much weaker read inside the report. I can give you two numbers that are good news and one is bad news. The numbers that are good news are that we saw across the board solid spending in the household sector goods durable and non durable as well as services. A rebound for for durable goods in particular, people then awaiting the demise of the U.S. household on the spending front just doesn't seem to be in the data. Similarly, the market based personal consumption expenditures price index, the core came in at three point eight percent at an annual rate, down from five in the third quarter. That's a market improvement in the Fed's preferred measure of inflation and is going to get some attention inside the Federal Reserve. So that's the good news. The bad news, we've saw equipment and investment go negative for the second time in three quarters. If you look at post-war recessions, they start with a decline in business spending. Households typically lag that. The only exception that was the pandemic. So I think we're back to staring at the business sector and seeing if it has legs. That makes me nervous. Well, let's pursue that, because you're an economist. I'm not. When I see reduced business spending, particularly investment, then I worry about longer term growth and productivity. You should. I mean, this is this is the foundation of increases of productivity, which are the increases in real wages and the standard of living. We've had very weak, Don, residential fixed investment. The equipment and the intellectual property investments have held up the investment accounts. We're now down to intellectual property, as you know, residential investments in the tank. That's a real downdraft in the economy. So that area is very weak right now. And we go out this morning as well. A report on new orders for capital goods. Big top line. No, it's all airplanes. So if you take out the volatile airline orders, it was a pretty weak future indicator of investment spending. So I'm looking at that. I've been concerned for a while that we'd have a higher probability recession this year, and that would be the sector that would lead it down. And so it's worth watching. So put yourself in the Fed for a moment, if you could. What do you make of these numbers when you're getting these economic numbers that come in? Some of them were positive or negative. I'm not sure how you know where the economy is or more important words going. Well, I think we know what the Fed's biases. They've been very clear that they think it's a mistake to ease prematurely and that it is better to keep going. But I think we're also about to enter the season of internal dissent. The chairman has, I think, been able to keep them pretty united in these increases. Seventy five, 50. Now, I think there's going to be some real disagreement about the size of the increase at the next meeting. I don't think there's going to be a disagreement about an increase. But as the year progresses, the possibility for open dissent votes against the chairman rising. And so this is the hard part of the job. How long do you go and how fast? Before you before you stop doing increases? So this is going to feed the folks who want to go slower and in smaller steps. We'll see. Doug, take a step back, if you would. You spend a lot of time over capital. You know Congress terribly well. We've a new Congress now. One hundred eighteen. We have the shift in the House over the Republican side. Give us your take early on about how they're putting themselves together, in particular as we look toward that debt ceiling that a lot of us are concerned about. Well, I think the dynamic that you will see if the past is prologue is right now the press and everybody watching Congress is really focused on the disagreement. The debt ceiling fight, partisan politics. You know, clashes and sort of very strident language underneath that. There are new chairman, new ranking members, new members of committees who are trying to get to know their colleagues and making pledges to work together and do the job the people elected them to do. So there's a really big mismatch between the top line, sort of this is what your Congress is up to. They're fighting and what's going on on the ground right now. They're trying to see what they can get done together, see where they agree. They they want to be able to go back to the constituents that we passed, X, Y and Z. And and then they're trying to see what that might be. The question is whether the sort of goodwill survives and turns out to dominate the outcome or whether the impending disagreement about how you handle increasing the debt limit, which they will do, takes over the feelings across the board. And so this is the season of hope in Congress, and I'm hopeful that they get it right. So we have a two year Congress, as we always do, the second year. That's going to be very much an election year. Do we have any period of time here where that's not the primary thing that people are saying, oh, do we have some window here where they maybe could think about it, but not that much? I think we've got a year, maybe a year in three months, but certainly by the time you get to June of the election year, everything's locked down, there's not much more is going to happen. So that's why they're trying to see where they can agree because they want to be able to move relatively quickly, get done what they can before outside events, force their hand. And elections guarantee that they can't cooperate. OK. Doug, thank you so much for being with us, as always. Very helpful. That's Douglas Holtz-Eakin. He is president of the American Action Forum. Coming up, we'll go to Santiago, Chile, for a report from our colleague and co-anchor Bloomberg's group, Charity Cherry on this is balance of power on Bloomberg television and on radio. This is balance of power on Bloomberg Television Radio. I'm David Westin. Like other Latin American countries, Chile has a somewhat challenged economy these days as the central bank is about to issue its latest rate decision. And our colleague Shery Ahn, she's anchor Bloomberg A.G., is there for the decision, but also for an exclusive interview with the central bank governor down there in July. So, Shery Ahn, thank you so much for being here. A beautiful shot for those of on radio she has behind her the presidential palace. So give us a sense of what the central bank governor and for that matter, the government there is confronting in their economy. David, it's a beautiful day here in Chile. And behind me, as you say, is up by last year and I'm on there. And on the corner there, you can see the central bank as well. Really clouding the outlook for the Chile, though, is high inflation. We're talking about double digit inflation accelerating at the fastest pace in decades. And the central bank governor Hassan Acosta, who I'm speaking to tonight, really has a challenging job. The expectation right now is that she'll keep rates at eleven two point five percent, which is the highest since nineteen ninety eight. She's had a challenging job since she took the helm last year, of course. We've seen really the incredible pressure on the peso against a U.S. dollar that reached record lows. Now, though, we do have a storage and pestle that's appreciated about 20 percent in the past three months, perhaps helping that inflationary pressure. But, of course, political uncertainty in this country also continues. And now the expectation is that Chile will be the only South American nation to contract this year. Well, I was going to ask about that political issue specifically because we'd like to have fiscal and monetary sort of moving hand in glove. How does a central bank fit together with the political government down there? The government may be making things a little bit tougher for the central bank. We are expecting a spending package for social aid of two billion dollars. Of course, this is very important for leftist president Gabriel Body, who came in promising really to help the poor and middle class. And he's had a tough job as well right now. If we move to the right and we go 10 minutes, we are going to be up last night. Dahlia, where hundreds of thousands of people gathering in 2019 for mass protests against economic inequality. Now, we are, of course, seeing more stability these days, but the rewriting of the constitution continues after a failed attempt last year which announced that it went too far. Now, this week, they've announced that they have the members of the committee to outline the new charter. It's expected to be more moderate than last year. But that political process can be difficult. Sure. If you would just go north of the border there into petrol, go up past that ECA into interior room, that is even a more troubled situation. What is going on right now in Peru? And really is that narrative of the left, right. We saw the impeachment of President Gus Bedell Castillo and a new president being installed, his vice president, you know, worldwide. There now today we've learned the leftist parties are trying to impeach her as well. The parties include better liberty. And that was the party that actually she run on the ticket on for vice president. But the violence has continued from supporters of federal Castillo who want to see him released. More than 50 people have died in the past six weeks of ongoing violence. We continue to watch these markets because they represent really the future for Latin America at a time when markets are very concerned about where chill children, the richest country here in the continent. Peru is also going under a leftist administration. So what is going on with the economy in Peru? I mean, you've described discuss one of the challenges for the Chilean economy, but it is a strong economy in many respects for Latin America. What about Peru? We are also seeing in Peru the same story unfold, which is very high inflation rates and the central bank of Peru having to hike rates more than a dozen times consecutively. The economy, though, is accelerating very fast, which is of course, one of the reasons why Peru's central bank has had to try to rein in that very exuberant economic activity as well as inflationary pressures. So we continue to watch what's happening. But the protests have affected many different industries in Peru, including tourism, agriculture, mining. Of course, mining is a very important sector for the Peruvian economy, which has also taken a hit. We continue to watch the operations of those mines can continue. OK. Shery Ahn, thank you so much. Sherry on the anchor of Bloomberg Asia, where we're looking forward to her exclusive interview with the central bank governor from Chile. That'll be airing this evening. Check out the Balance Power newsletter on the terminal and also online. Coming up, Balance of Power continues on Bloomberg Radio. In our second hour, we'll talk to the woman who helped set the Doomsday Clock at 90 seconds to midnight. She is Suzette McKinney of Sterling Bay. This is balance of power on Bloomberg television and on radio.

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