Trump Sees Iran Deal by Friday — Balance of Power 6/17/2026

[00:00:00] Joe Matthew: This is balance of power. I'm Joe Matthew in Washington. Thanks for being with us here on the Wednesday edition of balance of power on Bloomberg TV and radio. We wanted to give you a full splash there with President Trump in France as we work our way towards another important news conference today that of course being with the Fed chair Kevin Warsh. [00:00:30] Kaylee: Kaylee lines at my side with questions Kaylee about the highly enriched uranium in Iran. The president saying that technical discussions on its removal will start immediately. And of course questions around what Iran will get in exchange for potential concessions on its nuclear program that will be ironed out over the next 60 days. The president contending when pushed by Bloomberg's Tyler Kendall about sanctions relief on energy products said that that will happen when Iran behaves. When Iran behaves he says we will do something. [00:00:59] Joe Matthew: At one point during the press conference also suggesting I guess we'll have to give Iran its money back making the case that Iran's not going to get direct payments of U.S. funds but unfrozen assets a different story. Suggesting that the U.S. took a lot of their money he said but also returning repeatedly to the idea of resuming strikes if necessary. He also had some tough words for Israel and Benjamin Netanyahu specifically saying we had an amazing partnership he's an amazing prime minister but a dispute over Lebanon and I say you can do a little softer touch. [00:01:29] Kaylee: Yeah. It's a lot to unpacked and I'm glad to say that we can do so with Republican Senator Bill Haggerty of Tennessee who is joining us now live from Capitol Hill on Bloomberg TV and radio. Senator welcome back and thank you for your patience as we heard many words from the president there. I would love your take on this memorandum of understanding with Iran. As you have been on this network many times during the Biden administration criticizing President Biden for not having stronger financial restrictions around Iran via sanctions and other means. Does it sit well with you the notion that we could soon have an easing of sanctions and a releasing of frozen assets. [00:02:13] Bill Haggerty: It certainly does if if that's in exchange for actual performance. And if I can contrast this to what happened during the Obama Biden administration. If you think about what they did with the JCPOA they essentially bribed and paid off the Iranian regime which turned into funding for terrorism. What President Trump is doing is he's forcing the Iranians to pay for the terrorism that they've conducted. If you think about where the Iranian regime is right now their nuclear stockpile is under a mountain. The Navy is at the bottom of the sea. They have no control of their airspace. They're in a fundamentally different place with respect to their economy. It's in ruins right now. This is a very different situation and Iran has every incentive now to perform. In my understanding I've spoken with the White House about it this week. This will be a pay for performance type of structure meaning they're not going to get any sort of relief until they've actually demonstrated concrete performance. Right now we're at an MOU stage. This is not a treaty. This is an opportunity to lay out the details work out the details. It's going to be complicated. I think particularly with respect to the nuclear material that you're talking about. But there's going to be a path now to work that out. And I hope that the Iranians will realize President Trump is dead serious about this as all of us are here in Washington. Important what you just said about the MOU senator. [00:03:24] Joe Matthew: Does that suggest then that Congress would not play a role until this was a formalized deal and then would sign off on a treaty as you put it. [00:03:33] Bill Haggerty: That's correct. An MOU is just an agreement to move forward. It's an understanding to try to get to a point that we might actually have a treaty. But until that point occurs Congress doesn't have a role to play. Right now this is just a next step if you will for the administration to engage more deeply. And in more specific actionable terms about what the Iranians must do in order to see their economy begin to move back in the right direction. [00:03:59] Kaylee: What about what the Israelis must do senator. We just heard more from the president around the issue with Lebanon and the divergence we see between what this administration would like. Versus the Netanyahu government in Israel. How does that get reconciled if Israel still believes it is facing an existential threat. [00:04:19] Bill Haggerty: Kaley this this is something that I think is at the at the very heart of the challenge that we're trying to deal with right now. And the question is whether Iran can actually control Hezbollah. If you think about it Hezbollah has been like the sword of Damocles over over over the Israeli government there or the Israeli economy because they're there in Lebanon. You know in intermittent strikes on a constant basis. Israelis certainly have the right to defend themselves. That's what they've been doing. President Trump I don't think is a suggesting that that that the Israelis stand down if the Iranians can't control Hezbollah. I really want to wait to see what the details are. Let's see what the MLU has and where we actually get over the course of the next 60 days. But this certainly is going to be an area that's going to require a lot of attention. [00:05:04] Joe Matthew: Senator what's going on with the DNI. I'm looking at a tweet from Senator Tom Cotton who says it's regrettable the president has directed Jake Clayton not to appear at his confirmation hearing today. We're going to talk to him over the night on truth social. Will Bill Pulte end up being the director of national intelligence. And what does this mean for the renewal of FISA. [00:05:27] Bill Haggerty: Well I think the president has raised a number of concerns and I understand his frustration. With respect to the withdrawal and I should say it's a postponement of Jay Clayton's appointment. I can certainly understand why the president wants to make certain that the second district of New York that is filled. You think about what's happening there. It's the most critical attorney general's position in the United States. That's where the trying Maduro. That's where a number of very difficult cases are brought cases that that directly affect our national security. This is why Jay Clayton is such an excellent candidate long term for DNI. But President Trump clearly wants to make certain that that position is filled. I think he's deeply concerned that that that that President Schumer will I'm sorry that that leader Schumer will try to block the president in terms of his next nominee. A highly competent person again from Sullivan and Cromwell that he wants to see replace Jay Clayton. That needs to be done. He's basically making sure he's got the insurance to do it. What does that mean? That means Bill Pulte be in a position to move into DNI on Friday. That's my understanding is how it will move. And again, there should be every incentive then for the Senate to confirm the next the next U.S. attorney for the seven district in Manhattan for the second district. [00:06:38] Joe Matthew: We want to get into the Fed here, Senator. But do you agree with the president's assertion that Republicans fell into a trap by setting up this fast track to prevent essentially Pulte from becoming DNI? [00:06:51] Bill Haggerty: I don't I don't know that there there's a trap here. But again, I think the president is looking at the situation as it stands. He sees zero cooperation coming from the Democrats right now. They've done everything they can to lock up the government to make it nonfunctional. I think they're going to try to shut down the government at the end of September. That seems to be their playbook is ultimate chaos. There's been an agreement here. And I think President Trump wants to make certain that we don't confirm before we get the actual performance on the other side from the Democrats. [00:07:17] Kaylee: So I understand his frustration clearly. Well, so there may not be a confirmation vote for DNI in the Senate this week. There may, though, be a vote on bipartisan, bicameral housing legislation. Senator, are you happy with the compromise that was reached between your chamber and the House on the 20th 21st Century Road to Housing Act? [00:07:39] Bill Haggerty: Yeah, Kayleigh, the majority of the Senate did, the vast majority, frankly. It had it came out yesterday. We voted it through with overwhelming support. I think we're in a position now to see it on a bicameral basis. We have unity between the House and Senate. So this bill is going to move forward with a large degree of support on both sides. [00:07:58] Joe Matthew: It's Fed Day. You, of course, introduced the now chair of the Fed, Kevin Warsh, at his hearings on Capitol Hill, his confirmation hearing. Senator, I'm wondering what you think about the rock in a hard place that he finds himself in, with, of course, the president on one shoulder asking for lower interest rates. And I know that was his charge at one point. And we'll have that opportunity eventually. But the price pressure that we've seen in part because of the war in Iran has made that very difficult. We've already seen the bond market reacting with interest rates. And I'm wondering what you'd like to hear from him today when he meets with reporters and issues his first policy statement. [00:08:41] Bill Haggerty: Well, Joe, I think the market is largely priced in no action today. I think the question is what happens in the future. And I think that's going to be the real, the real question in my mind is how does Kevin Warsh, our new Fed chairman, handle his communication about the future. He's been critical of communications in the past, the Fed being too engaged in sending forward messaging. So it'll be very interesting to see how he looks at it today, how this first press conference goes. But I'll say this. He's got a number of variables to examine here. If you think about what the president just covered in his press conference, energy prices are, as they said, plummeting. If you look at the, if you look at the futures markets, there's definitely an expectation. Prices are coming down dramatically today. And the expectation is they'll come down far more in the future as we get more clarity around this memorandum of understanding. We get to a final deal. I think we'll see even further downward pressure on energy. There are a couple of other aspects that I think are inherently deflationary. If you look at where we're going with AI, the actual opportunity for productivity increases. That again suggests that we could see more impact on inflation in the downward direction. And frankly, the deregulatory efforts that are underway here are very, very significant in terms of being deflationary themselves. We're removing trillions of dollars worth of compliance costs that have been imposed upon this economy by the previous administration. The estimates are anywhere between four and eight trillion dollars worth of compliance costs that the Biden administration imposed upon America. Those are being peeled off. The economy is being liberated as a result. So I think that they're inherently a number of deflationary pressures. When will that happen? Again, the markets today have a rate increase priced in by the end of the year. I could see, you know, I could see Chairman Warsh being very cautious about how he handles this press conference today because there are a lot of variables in play. And I could see certainly downward pressure questions. When does that really take hold? Well, we're all looking forward to hearing from Chairman Warsh this afternoon. [00:10:33] Kaylee: Senator, before we let you go, I also have to ask you about the Clarity Act, the market structure legislation for cryptocurrencies. We're still seeing a debate between the banks and crypto companies around stablecoin rewards programs. How is this ultimately going to shake out? [00:10:52] Bill Haggerty: Senator, when can clarity move forward? I think that we've got a number of pieces. Again, the Housing Act is moving right now. That's a banking committee product. My expectation is that we are going to continue to focus on clarity, probably getting to it in the July timeframe. I'd certainly like to see this done before the August recess takes place. I think the ecosystem here in the marketplace in America needs to see this. We've moved significantly down the pike with the digital asset legislation that I sponsored last year, the Genius Act. That put America in the driver's seat in terms of, you know, modern payment systems. It puts the American dollar in the digital arena. It makes certain that America continues to lead when we have a stable coin that is dollar for dollar backed by U.S. Treasury securities. What we need to do now is expand that clarity, expand that governance system so that it's very clear what happens here in America, that people have confidence to continue to invest in this technology that has great innovative capacity. So I'm very hopeful that we'll get to it in a matter of weeks. If it's not done by the end of July, is it on to next year? Joe, it's not clear. Certainly we'll be back in session in September. I just think the closer we get to an election, the more difficult it is to get anything accomplished here. [00:12:11] Joe Matthew: Heard that before, Senator. It's great to see you. And thank you for joining us on Fed Day. We'll, of course, be listening closely when the chair does, in fact, meet the press. Bill Haggerty, the senator, Republican from Tennessee, with us live on Bloomberg TV and radio. And as we work our way closer to our special Fed coverage, we want to check in with Bloomberg's Tyler Kendall. She's still in the room at the G7. Now that the president has just left with his top lieutenants, the secretaries of Treasury, state commerce with him as he answered questions from reporters, including Tyler Kendall. Now, Kayleigh just referred to the question that Tyler had for the president of the United States moving forward with the lifting of sanctions. Tyler, do we expect this MOU to be signed tomorrow? [00:12:51] Speaker 4: Well, Joe, President Trump told us reporters in the room it could be signed tomorrow. It could be signed the next day. We're still waiting on that official confirmation from the White House, as well as the official confirmation on what is in this finalized text. Now, as you mentioned, I had the chance to ask President Trump a few questions, including when it comes to whether we will see any sort of assurances that the U.S. was able to receive that Iran will not charge what Iranian state media is calling fees in the Strait of Hormuz after that 60-day extension. Our understanding is there are assurances around being a toll-free waterway for that first 60 days. And he told me in part, quote, the thing that's going to stop them from doing that because you can't cover everything in a document is common sense. They don't want to get bombed. They don't want to get hit. So it doesn't seem like we will actually get anything related to fees in the long-term security of the strait in this document. And then when it comes to those sanctions, I asked him if he could confirm that Iran will get that immediate relief to get their crew to market off the heels of some incredible reporting from Bloomberg News yesterday. And he didn't confirm it. He didn't deny it. But he did reference this idea that Iran does need to see sanctions lifted in order for their country to rebuild. [00:14:00] Kaylee: He said, yeah, he suggested that they'll be lifted once Iran does something. Tyler, just quickly, obviously the president was lukewarm as to whether or not he was going to stick around in Europe for the signing ceremony. Do we know firmly what is on his schedule when he's supposed to return home? [00:14:20] Speaker 4: Well, Kayleigh, at this point, we know that tonight he's going to head over to Versailles and have a dinner with French President Macron and his wife. He did talk about that, said he's excited to go to that visit. We know that the pair of leaders have a lot to discuss beyond just the conflict in Iran, including President Trump's threat of a 100 percent tariff on French wine if France does not drop its digital services tax, as well as what is happening when it comes to artificial intelligence. These leaders met with big tech CEOs earlier today, including OpenAI and Anthropic. I was in the press conference earlier with the French President Macron. He didn't directly answer the question about whether or not France is seeking to access Anthropic's most advanced models amid a recent ban from the Trump administration. Joe and Kayleigh, I bet that might come up over dinner tonight. [00:15:07] Kaylee: All right. Bloomberg's Tyler Kendall live in Evian, France after that long press conference from President Trump. Thank you so much. And yes, the dinner at Versailles still on the president's agenda. Not gold leaf, he says. Not gold leaf. It's the real thing. He's excited to see the beautiful building after, of course, just holding a nearly more than hour long press conference. We actually thought for a minute that that press conference of President Trump might run right into the other big press conference we're watching in Washington and on Wall Street today, which is, of course, the one that the Fed chair Kevin Warsh will give his inaugural as chair of the Federal Reserve after an interest rate decision, which is expected to be once again a holding of interest rates. So we want to get into this now as we beat the drum to our special Fed decides coverage as we're joined by Kitty Richards of the Groundwork Collaborative, where she is a senior fellow. She's also a former official at the U.S. Department of Treasury. Welcome back to Bloomberg TV and radio. Thanks for having me. So I would imagine you are also of the mind that the Fed is not going to move. I think that's the expectation from everyone. The real question is [00:16:11] Speaker 5: going to be what kind of forward guidance or lack thereof we get on how the Fed might move in the future. Chairman Warsh, this is his first FOMC meeting, and he has signaled that he would like to see the Fed communicate less and less frequently. He feels that it somehow binds the Fed. I think markets like to have as much information as they can about what the Fed is thinking, but they will be releasing economic projections and the so called dot plot, which will tell us a little bit of where the Fed governors see interest rates and the economy going over the next six months. [00:16:46] Joe Matthew: There's a question about whether he actually puts a dot on the plot. Yeah. Does the bond market care? And would that be strange if he didn't? [00:16:52] Speaker 5: You know, I think it would be an unusual departure, but the Fed is not made up of one person. And so I think the guidance received from what all the other Fed governors will still be useful to the bond markets. [00:17:06] Kaylee: Well, it's interesting to consider this decision as well in the context of a memorandum of understanding between the U.S. and Iran that President Trump says will mean the Strait of Hormuz is opening back up at the end of this week. He says that energy and oil prices are going to drop. Can the Fed count on that? How do you expect that their reaction function changes to the geopolitical developments? [00:17:30] Speaker 5: I think that the past few months have shown us that policymakers can't count on President Trump's pronouncements about what is going to happen in the Strait of Hormuz. You know, when the war in Iran was initially launched, it was supposed to last a matter of weeks. The supply shocks in the oil market have persisted for months now, and they're starting to drive other prices higher. And so, you know, what the Fed is really thinking about is how to react to what's already happened in the oil price shocks. And there are differences of opinion on how one should respond to what could be supply shocks that are short lived, that don't propagate through the economy. But to be honest, at some point when you have supply shock after supply shock or so-called transitory impacts over and over that keep inflation elevated for long periods, it starts to become a little bit messier of a position for the Fed to be in. [00:18:29] Joe Matthew: Looking at oil prices today, they're actually slightly higher after some pretty significant declines. Yesterday, there is a thought that $76 a barrel could be our new reality. And if that's the case, if it's months more of this, realizing it's not 100 or 120, what is the impact on prices and consumer spending? [00:18:49] Speaker 5: I think that we are going to see prices continuing to rise. And that is going to happen both because fuel costs are a direct cost for families across the economy, but also it costs more to ship goods and provide services when fuel costs are high. And so we might start to see more of those costs showing up in food prices. [00:19:11] Joe Matthew: That's not a one-time event then. We're not seeing through that, are we? [00:19:14] Speaker 5: That's exactly right. It's not a one-time event. And, you know, the Fed's in a difficult position because the reason that they don't tend to want to respond aggressively to temporary supply shocks is that they can't solve the oil supply problem. All they can do to bring down prices is squeeze families even more with higher borrowing costs so that families can't afford to buy as much and spend as much in the market. But that's really hard on those families. It's hard on businesses that are trying to give people a raise. But another issue is it's not clear how effective it's going to be. One thing I've been really watching is how rising inequality is impacting the Fed's ability to affect inflation with interest rate changes. You know, we now have a lot of data showing that about half of consumer spending is from just the top 10 percent. And so one question is how much are those folks affected and their ability to keep paying ever higher prices, how much are they affected by these changes in interest rates versus the squeeze that it puts on ordinary Americans? [00:20:25] Kaylee: Well, and you mentioned raises there that businesses are not able to give. We obviously are no longer seeing wage gains keeping place with inflation, even as we're seeing the overall labor market, it seems hanging in there. That's exactly right. We're considering that part of the dual mandate. What is the real state of things? [00:20:45] Speaker 5: You know, it's it's hard to pull apart. So we've now had two straight months of real wage declines, not just not growth, but they're actually falling. That's really squeezing families. But, you know, the unemployment rate is staying low. We saw some reasonable job growth. We're no longer in a position, I think, where folks who are really worried about the labor market side of the Fed's mandate are going to be arguing for cuts. So I think that when you weigh the balance of risks here, I anticipate we're going to see more governors moving toward potentially future hikes. And probably in that dot plot, we're not going to see many people arguing that we're going to see rate cuts later this year. [00:21:30] Joe Matthew: So how careful does Kevin Warsh need to be in this first dance with reporters? It's not an easy job for anybody, especially with this room of smart people. You know, when Michael McKee comes packing with that question, you need to answer it on international television. [00:21:42] Speaker 5: I think that the chair is going to really have to deal with the fact that there are people who have concerns that he is a Trump lackey who is going to potentially abandon the interest rate target, cut interest rates in order to goose the economy, make the president happy. So I imagine there are going to be questions about that. He's going to have to walk a very careful line. What I'm really curious about is whether he's asked any questions about his stance, not just on interest rates, but on the Fed's balance sheet. So he has said repeatedly that he thinks that the Fed should unwind its multi trillion dollar balance sheet, which consists of Treasury bills and mortgage mortgage backed securities. And that would have a big effect on the market. [00:22:32] Joe Matthew: And that's where we could get some real news potentially today. With the help of Kitty Richards, we set ourselves up for special Fed coverage. And of course, the actual event, Kaylee, a special edition of Bloomberg Surveillance. The Fed Decide starts after this. We'll meet you back here on the late edition of balance of power at 5:00 p.m. Eastern here on Bloomberg.