I mean, that's amazing.

Yeah.

I mean, I...

Look, I think it's, it's 70 million accounts that have been created.

60 million have been funded.

Uh, if you have a child under the age of, uh, 18, they're going to have a Trump account waiting for them.

I believe in the state of New York, I looked at the numbers, uh, just yesterday, there's over $450 million sitting in Trump accounts, uh, between what Michael Dell has put into Trump accounts and what the US government has put into Trump accounts.

And, uh, and, uh, well, we should-

So, Phyllis, what's the latest? And also, I love the fact that Elon Musk is playing a big role with sort of starting the next generation, giving, what is it, it's like a share of SpaceX? I mean, that's amazing.

Look, I think it's 70 million accounts that have been created, 60 million have been funded.

If You have a child under the age of 18.

They're going to have a Trump account waiting for them.

I believe in the state of New York, I looked at the numbers just yesterday, there's over $450 million sitting in Trump accounts between what Michael Dell has put into Trump accounts and what the U.S. government has put into Trump accounts.

And, you know, much of that still remains unclaimed.

So people need to go to the app, the Trump account, Trump accounts app, which is super easy to find, put in the information about their child, claim the account.

These

I mean, that's amazing.

Look, I think it's 70 million accounts that have been created.

60 million have been funded.

If You have a child under the age of 18.

They're going to have a Trump account waiting for them.

I believe in the state of New York, I looked at the numbers just yesterday, there's over $450 million sitting in Trump accounts between what Michael Dell has put into Trump accounts and what the U.S. government has put into Trump accounts.

And, you know, much of that still remains unclaimed.

We have somebody from J.P. Morgan on our board, and we have somebody from Bank of America on our board.

So I wonder what you make of that in terms of the interplay of where inflation is, what Kevin Warsh has said he wants to do to get inflation down, and market expectations.

I do think the price action was fascinating to watch.

You had strong retail sales.

You had strong IP.

You had oil prices going to new at the back months in particular, I think, hitting new highs.

This little bit of a, you know, I wouldn't call it.

A big move up, but certainly the core was hotter than people wanted in the CPI.

10 year yields.

Tell us what you found.

Well, the report suggests after looking at, I believe, over 100,000 complaints and 50,000 records at... almost two-thirds of the U.S. banking system.

They found in particular that nine banks engaged in the activity that you described in your opening monologue, which is targeting religious groups, targeting conservative groups, targeting groups that were associated with the Trump administration, targeting those that were involved in the firearms business.

So it went further and further and further.

And a lot of the targeting, Tony, was... done under the veil of ESG or DEI or BLM or one of those acronyms that had been so aggressively pushed during the Biden administration against their foes.

And so this is, as you said, a bombshell reporter.

So with that in mind, what's next? Is there going to be further investigations to this? Will the banks that did this to conservative organizations be held accountable?

Well, that would be the idea.

Remind us how these accounts work and who's eligible.

All children are eligible under the age of 18, and then you are able to contribute much like an IRA structure through tax-free compounding and returns.

And then when you turn 18, the account basically turns into what is an IRA-style account.

So you can turn it into a traditional IRA and then use that, a Roth IRA, a regular IRA, and use that to feed... retirement savings just like anybody would.

So it's a jumpstart on savings for everything from college to a new house to ultimately could be all the way to 59 and a half and you could use it for your retirement.

So it's just a vehicle to participate in the upside of the American economy through our equity markets and through other vehicles that allow folks to feel like they are an owner of this economic growth story.

Any concerns about that? And is there anything that the Treasury can do to combat this?

Sure.

the hood that is causing this, this change in bond prices and yields?

Well, absolutely not on inflation.

You took a...

You look at the break evens, they haven't budged.

You look at the survey data over the long run, hasn't really budged.

Yes, the short-term stuff has gone up a little bit, and yes, the ECB and the Fed and others and BOJ have reacted to that, and that pushes up the expected path for rates.

But, you know, I, I think at the end of the day, the longer-term view on where rates and inflation will be has not moved that much, and we're gonna get through this.

... oil, and thus gasoline and whatever, stick around these prices for another couple months or longer?

Well, you know, Wayne, it's a

bigger phenomenon that we've seen with a lot of these surveys, like the conference board that does consumer confidence, the University of Michigan, which does a confidence survey, and polling data more broadly, that people seem to have this negativity, and they've had it.

For many years, this is not a new phenomenon.

And a lot of those statistics that we would have said as economists correlate with growth and employment and success.

They broke down and they've broken down pretty significantly since COVID, really.

And even just before that, you could say they were breaking down as well.

So it remains a puzzle as to why the sentiment indicators that we've looked at for decades just show such growth.

Yeah,

Tell us about your background with, uh, Scott Bessent.

Well, sure.

I, I've been on, uh, Wall Street basically, uh, or in the financial markets for almost 35 years.

I had two stints at the Federal Reserve as a visiting advisor during the crisis in '09, and also started my career there in the early '90s as an economist fresh, fresh out of grad school.

Uh, but most of my career has been spent either in London or New York or Miami, uh, being, uh, on, on the Wall St- Wall Street side in the private sector advising, uh, clients and also trading, uh, global macro like the secretary did in his stints with the Soros group as well as running his own funds.

So we've crossed paths a number of times.

I think I've known him for a little less than 20 years, right, right around the time of the global financial crisis coming out of that.

So j- just speak to that for a minute, that gas can't be everything in life, and it's only temporary.

That's part of this revolution.

I think, Larry, one other point that's important is this administration set up this economy to be able to do what the president decided to do at the end of February of this year without having us completely fall on our face, which is go after this Iranian president.

terror organization, which has been in place for 40 plus years.

And no other president has taken on that incredible task, that unbelievably difficult task.

But the economy was set up.

And I've got to say, as much as oil prices are up and mortgage rates are up and everybody in the mainstream media is yapping on about all this negative stuff.

This economy, this job market, this equity market has held up incredibly well.

This is going to go on for quite some time.

What's your overview of the economy? Let's start with that.

My overview of the economy is that we are in the midst of a, you know, once in a I don't know if it's century, but certainly once in a 50- to 25-year period that happens when we get these incredible shifts in productivity and in the supply side of the economy, something that you've described throughout your entire career as being one of the main drivers of economic progress.

And we're in it, and it's working, and it's affecting productivity.

It's doing everything the textbook says.

There are some shifts on the demand side that we can talk about.

But the primary driver of this economy right now is a major and significant shift in the supply side.

And it's twofold, Larry.

That's part of this revolution.

Fed people look at that, don't they?

they?They do.

And, and the other thing is people don't talk about the fact that the core CPI is at 2.4%, and the other core measures, the Dallas and the Cleveland trimmed means, and the Atlanta, uh, trimmed mean, uh, are, are all in the mid to low twos, Larry.

So nobody...

We have four really, you know, well-respected core measures of inflation that are actually, uh, going very close to target at two, and have been trickling no- lower now for many months.

It's only been the core PC that's been sticky, and we just revised away a lot of that stickiness.

So I think this is a, uh, a, a real negative for those that have been, uh, pushing a, a view that inflation is troubling, inflation is coming back.

If business is booming, if we're generating all this new machinery and equipment and factories, okay? How can that be inflationary?

... where do people go to, for your updates?

Well, I just, I just converted, uh, an X account that I've had out there, so DavidZervosDC, that's where I'll try to be putting out some higher frequency information.

And, uh, and I think from that and, and, uh, appearances like this and, and regular appearances in the news media to try to continue to, to push the narrative, which, you know, I've been very, uh, very focused on for the last few years, that, that things are actually moving quite swiftly and quite aggressively on the economic growth front.

And the idea that we need to slow that down with monetary policy because of some of these demand side worries about inflation I think are just way overblown, Steve.

And they're actually, you know, dragging us down, and they're, they're having a particular impact on, on the interest rate sensitive components of the economy, like housing and like things that affect the young men you were just speaking of.

You've got uncertainty about what AI is gonna do to the younger generations in the job market, and you've got- ... a significant interest rate move that's being designed to cool AI, but it's really having most all of its impact in the consumer sector, and particularly those that are looking at, uh, entering the home buying market for the first time.

So it's a, it's a, it's sort of like putting a policy in place that really isn't designed, uh, to do what needs to be done.

Are, are you gonna put a full on onslaught to the business media to make sure they understand this? 'Cause the people that should get this the most, it seems to me, have twisted the story the worser.

Where do we go to get all your information? Where do people go for your updates?

I just converted an ex-account that I've had out there, so David Zervos, D.C. That's where I'll try to be putting out some higher frequency information.

And I think from that and appearances like this and regular appearances in the news media to try to continue to push the narrative, which I've been very... very focused on for the last few years, that things are actually moving quite swiftly and quite aggressively on the economic growth front.

And the idea that we need to slow that down with monetary policy because of some of these demand side worries about inflation, I think are just way overblown, Steve.

and they're actually dragging us down.

And they're having a particular impact on the interest rate sensitive components of the economy, like housing, and like things that affect the young men you were just speaking of.

You've got uncertainty about what AI is going to do to the younger generations in the job market, and you've got significant interest rate move that's being designed to cool AI, but it's really having most all of its impact in the consumer sector and particularly those that are looking at entering the home buying market for the first time.

Are you going to put a full onslaught to the business media to make sure they understand this? Because the people that should get this the most, it seems to me, have twisted the story the worst, sir.

You have a lot of fiscal spending out there and a lot of AI spending out there.

Well, Sarah, I think the supply side story is the one I've attached myself to over this cycle and over many cycles in the past.

And I just think those traditional overheating demand side discussions are overblown.

And we have a number of folks on the committee that have used those as justification for getting out in front of raising rates, much like many on the committee in the 90s were pushing Alan Greenspan to raise rates.

And he did once in 1997 and then had to turn that around in 98. when there was a crisis.

But I think the upshot for me is this is just much more driven by supply-side considerations.

And that is ultimately going to be a disinflationary growth story, not an inflationary growth story.

So, David, as counselor to the Treasury Secretary, would you counsel him to go for a bigger bazooka in the bond market with the 30-year fresh highs?

So it would be saying, "Look, the market's practically egging you on," and yet I, I know you think that the Fed might be getting ahead of itself by hiking, so explain.

Well, I don't...

I try not to do too much of the what I think the Fed should do, and it's what I think the Fed will do.

Uh, given the seat that I'm in, I'm trying to help our clients, your viewers, um, you know, navigate that, and I think they have backed themselves into a corner here.

I don't, I think the odds are actually, uh, a little too high.

I wouldn't certainly put 96 down to make 4 cents or 92 down to make 8 cents.

I think that's a pretty bad bet.

I mean, that's independence to me in a way, is him saying, "This is why I think this is the right thing to do."

But how much right now, given the wars, Ukraine, Russia, Iran, et cetera, oil, inflation, how much does the Fed matter to the macro markets right now?

Well, Brian, I'm all about highlights.

Lowlights just don't interest me.

Unfortunately, for your coverage on the 16th, I just don't think this matters that much.

And we've been saying this to our clients now for a while.

The drivers of the macro are really not important.

focused in on the federal reserve we have deregulation we have changes from the fiscal side tax cuts depreciation we have the technology story which is the biggest story of all we have energy which you focus on consistently and constantly and energy policy more generally all of these are far more important than are they going to go 25? Are they not going to go 25? What that means for financial conditions? The razor thin story is just, to me, so overblown.

why buy back bonds that have two and a half percent yield? Why would you buy back two and a half percent debt to issue bills at the same rate?

So would you be recommending investors buy bonds at these levels?

I think these are good levels for long-term investors to get involved in the bond market, absolutely.

And I think that the rate hike excitement is overblown, but it doesn't rule it out.

And there's a lot of politics behind that as well.

So we have to watch for that.

And certainly there could be a break a little bit higher before all is said and done.

But I think your opening segment with Steve was the sort of right way to frame this for our watchers and clients today.

I assume you disagree with that.

Is that meaningful, just slightly more hawkish?

I don't think it's that meaningful.

I think at the end of the day we're seeing this Federal Reserve under, under Chairman Warsh kinda roll things back.

Like, he's just saying, "I wanna go back to the Greenspan era.

I wanna be less involved in the mar- kinda follow the Steve map of just I'm not, you know, I'm not this leader, this maestro that you all need to follow.

Go figure it out." I think what was missing for me from today's speech was just more focus on the supply side, the AI story, the productivity story, and the disinflation over the long run that we've all been thinking about with that story.

He has been a big believer in that, and it seemed like he kinda pivoted to the other side where many of his colleagues are worrying about demand side inflationary flare-ups.

Does that mean that Kevin Warsh, the FOMC, they don't see the war in Iran and the energy spike as temporary? They see this as a longer term situation.

Do you think that 333 is really 0 for 3?

I don't.

I think as a secretary said yesterday, you know, we had a pretty sizable drop in 2025.

We have this war to contend with and the tariff sort of shakedown back and forth.

And we'll see how that comes out in 26.

But I think the trajectory is still there.

I think the growth numbers, as the Atlanta Fed points out, look like they're pointing back up.

You know, we're queuing off the markets because we're not giving forward guidance when the market is now going to be, you know, not manipulated, but you know, influenced by what the treasury is doing?

What's your sort of one or two hot takes on the headlines?

My hot take on the Fed in general over the last four months has been to probably, my takeaway has been that it's just not been that important, Brian.

And I think these minutes also are just not that important.

And the market doesn't seem to be moving so much.

So I guess the market is agreeing on that.

Think about this, Brian.

Before the conflict in Iran began, we were priced for 50 basis points of rate cuts.

And I think the inflation story, I thought, was an important one to the

Does this change anything? Does this change your view, or does this, you know, inform you about, uh, the independence of the Fed and, and maintaining that independence even despite various political pressures that may be brewing?

Well, listen, I don't think it changes much.

I think we've, we've, uh, largely expected this decision to not go the president's way in terms of an immediate firing, and so the market was probably set up for this.

I didn't think the market reacted much to it, to be honest with you.

Didn't see much in the yield curve or in stocks that you could point to was related to this.

So I don't think that's the story.

Whether it sets up some precedence, whether it sets up a, a sort of, a more independent or a less independent Fed, I'm not really sure that I, I can buy into that story.

[laughs]

What were your, your main impressions?

So I guess I'm a little, I, I'm a little surprised at how hawkish, you know, Steve just was and maybe some of the other commentators beforehand.

And I guess I'm, I'm modestly surprised at the two-year note, maybe a little bit, but not, not overly stressed about it.

And I certainly think the, the market moves in equities are pretty tame so far.

Let's see how it goes in the next 24 to 48 hours.

But a percent is, is not really something to get too worked up about.

What I will say is I, I think this is all very much as advertised.

Um, so David, do you think that he buys himself a little pad because he's saying, you know, "2%, but I don't care what's to the right of the decimal"?

Dave, I, if you wanna take this one and kind of answer some of Brian's questions about what do we know about what's happening in the strait, how does it relate back to oil, which is still up today, and the broader markets.

So I think we've gotten somewhat immune to the oil story.

It just, it comes, it goes, and stocks for the last three and a half months have largely, after the initial downtrade, have just come back up and grinded higher, up until Friday, and Friday we had a bit of a, a new pattern developing and people are getting a bit freaked out about everything from, you know, equity supply coming through IPOs to labor market data that might be a little stronger to a, maybe a slight lengthening of the time energy prices stay higher because of new escalation.

So I think all of those rationales are probably, um, not great reasons to keep a negative view over the long run.

Maybe they'll work over the short run, but I think over the long run we've, we've seen this oil story before.

We've seen it spike.

The market gets through it, and it'll get through it again.

It's not a 0% chance is my point

How do you see it today, and do you maintain that positive view, and where do you think we go from here?

Luke, I actually don't even just maintain it.

I think I've come out of all of this just feeling even more confident and excited about owning capital in this marketplace, and I'll tell you why.

I think we've learned this year two really valuable lessons.

The economy starting at the end of February, February twenty-seventh, was hit by an energy price shock.

We've seen oil prices and global energy infrastructure prices effectively rise fifty to sixty percent on a sustained basis.

Non-trivial shock by any historic standard.

Mm-hmm