Pre-Fourth of July Special: Stock Jump on Jobs Surprise, Trump's Tax Bill Passes
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Clapping on, cheering on Wall Street, an early close ahead of the July 4th holiday weekend. The S&P 500 pushing higher by about eight tenths of a percent, adding about 52 points, 62.79 and change as we wait for these numbers to settle. Romain Bostic alongside Matt Miller, another record close for U.S. equities.

Yeah, absolutely. We see Macy's there ringing the opening bell before this holiday weekend. Happy Fourth of July tomorrow and happy early close to the trading day. We'll see the bond market stay open for another hour. Right now we're looking at bond yields that are considerably higher, but that is not holding stocks back from new records of the S&P at 62.79, even with the 10-year pushing back up to 6.35.

And I just want to point out the Russell 2000 up about a percent on the day. And I say that because the last few sessions we've seen the Russell, the small and mid cap names really start to outperform the larger cap names. And we'll be interesting to see if that continues into next week. All right. Take a look at the IMAP. It's a really dynamic way to track the industry groups moving on the S&P 500 or any index.

that has a breakdown like this. So you can see that we have a gain for IT. So tech stocks rising with that chip news. Financials are up for a second day in a row after they proceeded with buybacks post-passing the Fed stress test. And industrials are gaining as well. Really looks like the picture that we've seen year to date. And the defensive stocks are on the

on the lower end of the spectrum here, healthcare, real estate, and consumer staples all bringing up the rear. About 349 stocks in the S&P are higher, about 150 are lower. Jonathan Levin is our Bloomberg Opinion columnist who lives in the great state of Florida down there in Miami. He's joining us right now to take a closer look at some of the big individual gainers and decliners. Jonathan.

Yeah, OK. So we've got service now with a nice gain, plus 3.5 percent. It got a nice little price target bump over at Morgan Stanley. And it has second quarter results, of course, coming later this month. They've got great momentum coming off of Q1 here at Romain, and they're up about 27 percent since Liberation Day, helped by some impressive subscriptions.

revenue. But I also want to talk our own book for a moment here. You had a great interview with ServiceNow's chief people and AI enablement officer, Jackie Canney, on the close yesterday, I believe. And she's talking about how AI is already bringing some productivity gains to her team. So interesting stuff there. Moving on.

We've got Datadog up 14.9%, called 15%. The software solutions company, Romain,

Is getting added to the S&P 500 effective prior to the open on July 9th, replacing Juniper Networks. Just to point out, Dan Ives over at Web Bush also saying that Datadog's products fit well into recent AI trends. And he calls out the company's recent partnership with OpenAI. Is he bullish?

You know, I'm not in the weeds on Dan's thinking. He is bullish. I'll go ahead and sign that for you. It was a trick question, John. By the way, I know you're going to get to Lucid, and I love this story. Lucid and Rivian are two companies that you expect to be losers on the back of the big, beautiful bill, removing or reducing incentives and pulling that forward to September. But they're actually gaining today.

Yeah, it's a little bit of a weird one, somewhat counterintuitive. I'm not 100% sure that I buy this narrative, but here's the story. BNP Paribas out with a note saying that some EV makers may actually benefit from the sunsetting of the EV tax credits.

under the big tax and spending bill. The logic here, Matt, is basically that the end of the tax credits will lead to a pullback from the likes of GM, Ford, and Kia. And so there's going to be more market share available to the likes of Lucid, Rivian,

and tesla the exclusively electric guys since a sort of a glass half full take not sure how i feel about but it but i also want to flag lucid out uh... out this week with its to cue deliveries and they missed on soft demand for those luxury evs so

Make what you will of it. They hardly make any. They hardly sell any. By the way, you know Ford only sold 16,000 electric vehicles in the second quarter? Are they trying anymore with car CEDs? I feel like they may have just taken a bit of a pause there. Yeah, I think so, too. All right, John, you got some decliners, too. It's funny. You were talking a little bit earlier about Datadog being added to the S&P 500. I saw Robinhood was down today. Is that because they're not going in?

Totally. This is the flip side of what we were just talking about with Datadog. So, you know, a lot of folks were expecting the company to get in there to get that S&P 500 nod. It doesn't get it. So disappointment. Not a big surprise there. Centene, which, of course, was the big story yesterday, extending losses a little bit. I have it down a little bit more than 1 percent. Small adjustment there.

in the grand scheme of things after the company withdrew its profit outlook on risks from affordable care act plans uh one final uh one that i want to call out here let me uh just double check the uh the final pricing on on merc ends up closing down 1.8 this is a stock that has really not been able to find its footing

all year hurt by underwhelming guidance and uh... tariff concerns of course uh... but we're starting to hear some bottom feeders are getting interested in this name uh... murk is

Currently trading at, quote, deep evaluation discounts, which offers free optionality on the drug makers pipeline and beyond. This per a note from Berenberg out recently. And the analysts went ahead and reiterated their buy recommendation on this on the stock, as well as their hundred dollar price target. So.

There you have it. All right. Jonathan Levin there from Bloomberg Opinion. Thanks very much for that. Really appreciate you moving us through some of the stocks that closed higher and lower at the end of this shortened trading day. Remember, the bond market's still open for about an hour. I want to get right now to one of our good friends, Lizanne Saunders. She is the chief investment strategist at Charles Schwab. They have, of course, trillions of dollars. I'm going to say $10 trillion on

of assets under management. And Lizanne, we got a number at the top of the, at the top of the day here, a half hour before the trading opened, that was pretty impressive. 147,000 jobs added, and we were only looking for 106,000. The revisions were good. The unemployment one number was lower, and we didn't even get as much inflation and hourly wages as we expected. Is that all systems go in your opinion for the labor market?

TBD, yes. Relative to not just the consensus expectation was it better, but well better than what had been the whisper number that had been floating around out there, which was in the, you know, more like 70,000. That said, it was 70,000 of private sector jobs, a huge jump in both government sector, which was all at the state and local level.

and education and health. You guys have been talking about it. The education one is a little bit of a head scratcher, given we're talking about education jobs in June. So there's some

suggestion maybe that there's seasonals that have come into play with that. Also, the Bureau of Labor Statistics does a birth-death model where they estimate the birth and death of businesses. It's not the birth and death of people. And that may have flattered the number on the upside. And it's not uncommon when you're in some sort of slowdown in the economy or an inflection point in the labor market that that birth-death model overstates

the birth of new businesses and can, again, flatter the payroll numbers. So yet again, some cracks under the surface, but clearly to the benefit of the stock market. Good news is good news kind of day. Absolutely. And it gets to this idea of what the longer term trajectory could be when it comes to the labor market. I mean, there was a lot of doom and gloom, I think, in March and April, people saying that the effects of these

trade policies and other Washington policies would really hamper the economy. And I know the jury's still out on that question, but at least for right now, Lizanne, it does not appear that some of those, at least the worst case scenarios, are materializing just yet.

Correct. And I think what all of this represents is sort of a period of status. We're just looking at kind of a pause in activity. And that's manifested itself into labor market data via a limited amount of firings. On a six-month rolling basis, challenger layoffs are up and bear watching. But the most recent reading was actually on the lighter side, which in

The terms of layoff announcements, obviously, being on the lighter side is good. So I think it's been much discussed. I'm not saying anything new here, but it's kind of a no hiring, no firing kind of backdrop. And until we have more policy related clarity, particularly with regard to tariffs and the important upcoming date next week of July 9th,

I think that's the backdrop we're going to be in. Businesses sort of have themselves in a timeout from a hiring from a major investment CapEx perspective. And frankly, the Fed put itself in a timeout late last year. And clearly what we saw in the immediate aftermath of today's release was a plunge from

not elevated levels, but a plunge in expectations that we might possibly get a July cut. That seems definitively off the table. Lizanne, my 401k looks fantastic right now. Do I move what I have left in cash into risk assets, or should I just chill at these high levels?

You know what, Matt? Anybody that answers that question with specificity, shame on them. I know you. I've known you for a long time, but I'm not your financial advisor. I don't know what your entire portfolio looks like, what your needs for income, what your past experience is, whether you've got a wide or a narrow gap between your emotional risk tolerance, your financial risk tolerance, how disciplined are you? I mean, the list goes on and on. So,

I think those kind of any kind of cookie cutter answer suggests you're not paying attention to the vast differences that exist from one investor to another. So I think never should there be an investment approach that is sort of at one time.

get in, get out, all or nothing. That's just gambling on moments in time. So if the idea is to increase exposure to equities, you do it via dollar cost averaging. You do it via rebalancing as opposed to trying to pick entry points. I think that's what gets individual investors into trouble.

All right. Lizanne Saunders over at Charles Schwab. Have a wonderful weekend. For enterprise organizations, managing all your food needs is a tall order. But with Easy Cater, you get a single workplace food vendor with the tools and resources to make it easy. Giving teams across your organization an easy way to order from a huge variety of restaurants, all on one platform. All while consolidating your corporate food spend so you can control costs.

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Welcome back to a special early edition of The Close. I'm Matt Miller here with Romain Bostic on his program. Thank you for letting me sit in today. Short and trading week because of the 4th of July. And AAA is projecting more than 72 million people will hit the road for this weekend. GasBuddy has some good news for those drivers. The national average price of gasoline is expected to fall this weekend to its lowest level since December.

2021. Joining us to talk about that is Patrick DeHaan, head of petroleum analysis at GasBuddy. And Patrick, I always wonder when we talk about these things, we're just talking about unleaded, right? And a lot of cars, you got to put premium in them. And I've seen prices, at least around me in New York, still hovering well over $4 a gallon.

Yeah, it's kind of the mystery that's not being told. As you mentioned, you know, 87 percent of Americans use regular. You and apparently me are some of the few that have to use premium. And, you know, you mentioned that and premium here in Chicago is at least hovering near five bucks a gallon. But for the rest of Americans, falling gas prices has been really what's happened over the last seven to 10 days or so as tensions in the Middle East have cooled. Gas prices now about 10 cents lower than where they were at the height of

of that situation. The national average now at about 314 a gallon. That graphic that you just showed, 2021 on July 4 was 312. So we could get beyond that. All in all, Americans spending a lot less to hit the road. Gas prices down 37 cents from this time last year. That's going to save Americans half a billion dollars between today and Sunday.

That's real economic savings. I'm sure the president's going to be all over this, but certainly gas prices are much lower. I love that 87% of Americans use regular gasoline because of the octane level. It's fantastic. What...

What kind of run up do you see when we see crude, you know, eclipsed $81 a barrel a week ago Sunday and came straight back down under 70? What kind of run up do you see at the pump when you see that happen so quickly in crude?

Yeah, you know, if that situation had continued at a heightened level, we probably would have seen the national average going up somewhere in the ballpark of 15 to maybe 20 cents a gallon. Thankfully, we never saw the full impact of that. The national average advanced about 12 cents, stopped dead in its tracks, and now it's actually gone down another about eight, nine cents a gallon or so here in the last week. So, you know, generally speaking,

there are some proportions that we follow although I will say for the Middle East tensions gasoline was certainly on the less receiving side of a big jump diesel really took the brunt of that jump in fact diesel prices at the peak jumped about 30 cents a gallon in many markets so the truckers logistics companies out there you know they were the ones getting raked over the coals over that jump diesel only now starting to reverse

But that's the good news is both diesel, gasoline and jet fuel all starting to decline. And I always like to put this myth to bed. All Americans, I swear, say that gas prices go up for holidays. This is the prime example. Forty eight of the nation's 50 states seeing gas prices drop.

lower today than a week ago. So let's put that one to bed. Gas prices don't always go up for the holidays. Sometimes they do. And most of the time it's coincidental. Absolutely. And I am curious, Patrick, as we get deeper past the holiday season, there is a lot of talk right now about just what our refining capacity is in the U.S., how much wiggle room is left in that space should we see any other potential shocks to the global oil and gas story.

Yeah, I mean, that's a great point because that's what a lot of Americans don't realize is we still have very little breathing room. EIA data from the government yesterday showing about 95 percent of refining capacity utilized. So that's not a whole lot of breathing room for the height of the summer. Those numbers are typical, though. We have seen refining capacity holding nearly where it was last year.

It's still close to the highest we've ever seen on record. I believe if I remember right, yesterday's EIA data showing over 17 million barrels of oil being shoved into refineries every day. That's a pretty good amount. But keep in mind, diesel inventories are running about 20% below the five-year average.

Now, some of that may be skewed by the use of biodiesel, which is not really tracked in that government data. But keep in mind, diesel is the fuel of the economy. So we talk about growth and trade and tariffs and diesel prices are really the mainstay behind economic growth. So keep that in mind. Diesel inventory is rather tight. That's also why they saw such a slingshot here. Diesel is really carrying the momentum for refineries. Talk about refinery profitability. A lot of that falling on the shoulders of diesel right now.

And so, and this gets to the idea then, if that is sort of what is actually holding up or at least providing the biggest boost to the market, what is the biggest risk?

Yeah, you know, you look at the graphic there, OPEC output. Speaking of OPEC, they'll be meeting here in a couple of days in Vienna to talk about what they're going to look at for the month of August. That could be very critical. I think a lot of the reason why gas prices are lower this year than last year is kind of that development that we saw just a couple of months ago. OPEC starting to win back and recapture some of that market share. They're raising production. That's been substantial.

That's a development. Keep in mind, OPEC started cutting oil production back in 2023 when oil was about the same level. Now OPEC reversing that policy. So Middle East tensions, that could play a role. That's in the cooling stages right now. But, you know, something happens economically, whether the trade or tariff

policy suddenly reverses or, you know, we see a little bit of a mix match in economic data. You know, as goes the economy, as go oil prices, whether to the good side, oil rises or if we see a slowdown in the economy, oil prices could cool off. The other factor here as we get into August, Mother Nature, hurricane season can shut down rigs in the Gulf. They also can shut down refineries in Texas and Louisiana.

Hey, we're going to talk to Treasury Secretary Scott Besant coming up in the next hour. And during the campaign, he had this 3-3-3 mantra, right? 3% deficits, 3% growth and adding 3 million barrels of oil per day production in the U.S. How's it going so far on the ladder there?

Boy, that is going to be real sluggish to see to fruition. I mean, U.S. domestic oil production has been holding at about the mid-13 million barrel range now for probably close to a year, right? It's been kind of bouncing off 13.4, 13.5. It's going to be hard in this pricing environment for

uh... oil companies to really ratchet up and rephrase rates i mean we've seen falling rates for months and that's a leading indicator on where u_s_ oil production is going there's a lot of folks myself included the permian right that that's kind of plateaued already so unless we see oil prices really perk up i think it's going to be a huge struggle to get anywhere near that three million barrel increase i think

I don't even know if we'll see 14 by the end of the year. And even the government forecasts are painting a picture that we may struggle. Now, maybe OPEC jumps in here and raises production. But keep in mind, if OPEC throws more oil out of the global market,

That's going to have a very negative impact on U.S. oil production in the months and years ahead. Right. I mean, aside from higher prices, which would incentivize American drillers to pump more oil, what else can the government do? Because it's not just this year that they're worried about. It's actually a part of the CEA's projection to achieve a surplus or to reduce the deficit with this big, beautiful bill. What more can they do to boost oil production in America? Yeah.

Matt, I think the catalysts are there. I mean, Trump has made it a little bit easier, loosening regulations, widening the guardrails. But essentially what the president can't do is get oil prices to go up because he wants them lower. Right. Drill, baby, drill lowers oil prices. That flies in the face of oil companies desire to raise production. It's kind of like your boss saying, hey, you want to work on July 4? I'll pay you half as much, but I'll expect you to be twice as productive. No oil company is going to jump at that opportunity.

Hey, are we getting paid for this, Matt? I think. I hope so. I just do as much as I can and hope it shows up in my bank account every two weeks. All right. Well, I hope Patrick's getting paid for this. Always great. One of the best in the business there. Patrick DeHaan over at Gas Buddy.

New York City's 4th of July fireworks will kick off under heightened alert for terrorist threats. That's according to a joint assessment from the FBI and the Department of Homeland Security. For more on what security measures are being taken heading into the big holiday weekend, let's bring in Michael Balboni, former director of Homeland Security for New York State. Michael, thanks so much for joining us. Let me ask you first what exactly this means under heightened alert for terrorist threats. How serious is it?

So whenever there is a conflict in the Middle East, in particular, really actually across the world, you can have this situation reverberate here in the United States, especially in cities as diverse as New York City.

So the FBI Homeland Security, they put out a joint intelligence bulletin, which essentially talks about the risk of Iranian-sponsored groups doing something here to try to project power. And when you think about what the Iranian leadership has to do, they have to convince their people that, notwithstanding having their nuclear facilities destroyed,

and frankly losing a lot of their air capability, they're still a force to be reckoned with. So the question is, could they manifest that overseas? So that comes into a couple of different things. I think that right now, in addition to the concern about kinetic attacks, there's also a big concern about cybersecurity. The Iranian government has said,

prepared and supported a very robust cyber attack capability by Iranians and their surrogates. So I think that there's going to be a mix of things going on right now, but heightened alert is always in the mix when you have something overseas that could affect the population here. So what can the average citizen do

to stay as safe as possible. I mean, imagine you're living here in New York City on Manhattan Island and you want to see the fireworks. How do you go about that?

So New York City in particular has, the NYPD is the world's best, in my opinion, at dealing with major events, major crowds. I mean, we take everything from papal visits to presidential visits, New Year's Eve. They really know how to do this. They have it down to a science. Obviously, that doesn't mean that it can stop every single threat.

But in terms of what people should know and see out there is that they're going to see the visible, which is obviously lots of police officers in uniform, and the invisible, undercovers, social media monitoring, surveillance cameras. You know, we face a much different landscape for security than we did after 9-11. 9-11, we did not have the mix of security cameras around the city like we do now.

that we have right now. And in addition to which, you know, there's a lot of intelligence sharing that is much better today than it was in the past. I am curious, Michael, when we talk about what assistance local authorities will have, will there be a big federal presence in the city tomorrow?

New York City is blessed with a lot of agencies, not only federal agencies, but the MTA police, the Port Authority police, state troopers. There's a lot of agencies that will all combine in terms of intelligence sharing and also patrol responsibilities. We see it in Penn Station. We see it in Grand Central. You have the National Guard. You have police standing next to each other. This kind of mix back and forth is a multi-agency approach.

that, again, is unique following the attacks of 9-11 so many years ago.

All right, Michael, really appreciate it. Michael Balboni there is the former head for New York State's Homeland Security Operations, of course, trying to keep everyone safe for this July 4th weekend. Matt, I don't know if you're going to make it out to the fireworks or any other public events, but obviously in a city like New York, something everyone is always top of mind. Yeah, absolutely. I mean, I will be going around to, I don't know exactly what yet, with my two daughters and my wife, and I want to keep everyone as safe as possible. But I tend to just

Do whatever.

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And right now you are looking at the floor of the House of Representatives. Hakeem Jeffries, Democrat from the state of New York and the leader of the Democratic Party, has now surpassed Kevin McCarthy to deliver the longest speech in the history of the House of Representatives, now clocking in somewhere around eight hours and 36 minutes.

This speech, ostensibly, Matt Miller, about opposing the President Trump's big legislative agenda, this one big, beautiful bill, this budget, tax, and spending bill that is still likely to pass. Of course, a very narrowly divided House of Representatives with about 220 Republicans.

who all, based on what we know right now, are in line with the Speaker of the House, Mike Johnson. And as soon as Speaker Jeffrey cedes the floor based on procedure, Republicans will then pick up the mantle and will most likely vote on that one big, beautiful bill and will likely pass it. Yeah, I have to just shout out, I got to say,

regardless of which side of the aisle you sit on, this is an athletic achievement. I mean, speaking for that long with such enthusiasm and passion takes a lot out of you. Yeah, and we should point out for anyone who doesn't understand Washington politics, any foreigners watching this wondering what the heck is going on. So the procedures basically say that once he starts talking, he's basically given 60 seconds

But there's a loophole here where as long as he keeps talking, does not stop, does not sit down, does not effectively move from that podium, he can go as long as he wants. Yeah, absolutely. And it's for sure to foreigners, it may seem silly. Of course, every government and parliament has its own silly procedures. Right. But Kevin McCarthy did the same thing last time.

All right. Of course, we'll keep an eye on this. And more importantly, what we really are keeping an eye on is when the House of Representatives resumes its normal

procedures here, which would be to move forward with a vote on that tax and spending bill, a big legislative agenda for President Trump, a legislative agenda that does appear poised to pass. Speaker Mike Johnson at somewhere around 3 a.m. this morning did finally secure enough votes and enough support to move that bill forward. Hakeem Jeffries since then, effectively since about 4.50 this morning, has been trying to stall a final vote on that

But barring any sort of major surprises here, that bill will likely be voted on sometime soon, and it is likely to pass. Of course, one of the people who will be in charge for helping to implement a lot of provisions in that bill is the Treasury Secretary of the United States. And I'm pleased to say that he joins us right here on The Close, Scott Besson.

Great to have you here on the program. Let's start off with the bill. I know we are still awaiting a vote, a vote that is likely to occur today. And of course, a signing that the president himself has said he would like to get done tomorrow on July 4th. As you then fan out after July 4th to sell this bill to the public and more importantly, to implement some of the provisions, what is your number one priority?

Number one priority is making sure the American people understand that this bill is the route to parallel prosperity. It is the best of what we saw in the 2017 Tax Cuts and Job Act, along with President Trump's campaign promises, no tax on tips, no tax on jobs.

Over time, 85% of seniors will not be paying tax on Social Security and the deductibility of auto loans if the car is made in the United States. It also funds the president's agenda in terms of defense, border, and school choice.

There's salesmanship that you and for that matter, the other cabinet members will have to do to the public. But there's also salesmanship that you have to do here, Scott, for the markets. There's a lot of concern about that addition to the federal deficit, the idea of a widening of that deficit because of some deficiencies in paying for some of those tax cuts. What is your message to the market? Well, Romain, I'm not quite sure what you mean, because stock markets had a new high and the bond market just had its

best six months in five years. So I disagree with that. So I think the markets are telling us that they like the bill and that they believe that it is fiscally prudent and stimulative for growth.

And importantly, I think we can get back to the kind of growth that we saw in President Trump's term, 2.8%, 3.2%, noninflationary growth, which the Biden administration was not capable of. Mr. Secretary, Matt Miller here. I'm wondering, as someone who grew up with Alex P. Keaton, watching Milton Friedman on Phil Donahue and always thinking we were on the wrong side of the Laffer curve, what's your take on that?

Why haven't these kind of massive tax cuts worked to really stimulate growth in the past? And they certainly haven't worked to replace the amount of revenue that's taken out. We didn't see that with the Reagan tax cuts. It didn't work out with the Bush tax cuts, and it didn't work out with the TCJA in 2017 either. Why is it going to work now?

Well, I would disagree with TCJA. TCJA was a work in progress, and then we hit COVID. And I think what's different here also is we're going to be constraining spending. I spent a lot of time with the Freedom Caucus members

And their constituents should be very proud of them. They should be very proud of themselves. They changed the center of gravity of the debate. So we are both going to stimulate the economy, pick up tax revenues, but more importantly, constrain and pull down spending.

So far, though, it looks like we're going to boost deficits up to 7%. You ran on this 3-3-3 plan, 3% deficit, 3% economic growth, and an increase of 3 million barrels of oil a day in the U.S. Do you expect to get to that by the end of President Trump's term?

I do, and I'm not sure where the 7% number is coming from, right? Because I reject the CBO scoring, but on the other side, the CBO also scored tariff income at $2.8 trillion. So, you know, that substantially increases government revenues. I think the growth is going to be much higher, and I believe that what we've done in

constraining spending here is just the first bite of the apple. Do you anticipate, Mr. Secretary, that the U.S. government's financing needs, the Treasury's financing needs, will increase over the next couple of years? I think that...

We will see what happens to interest rates. And there could be an increase in financing needs based on yields. But everything that I'm seeing says that inflation is under control and likely coming down.

There is, of course, the cost to finance that. And we look at where yields have been, and we know there's been a lot of volatility there, some stability in recent weeks, partly because of some of the things that you've done and said publicly. But we've also seen a little bit of reticence to buy into longer-dated U.S. treasuries. I know you have been public about the idea, at least in the short term, of relying a little bit more on shorter-term treasury issuance. Do you anticipate that will continue?

Well, I think what we're going to see is one of the underreported things of the one big beautiful bill is it also gets us away from this terrible debt ceiling dilemma. And because of that, we've had to constrain issuance. So it's likely that initially we will use bills to refill the Treasury general account. Do you worry about any potential rollover risk in that strategy?

No, I don't. We've seen very durable and robust Treasury auctions. I see who the buyers are. I think that we are going to see U.S. banks take up more of the debt issuance because of the supplementary leverage ratio reliefs that they're going to be getting. And we're going to

passed the bill today. President Trump's going to sign that tomorrow. And then probably the following week, we're also going to have the stablecoin legislation, which I think could create at least $2 trillion in demand for Treasury bills. We just want to just flag to our viewers right now that

Right. And a bill that, at least according to the CBO, is going to actually be passed in the House of Representatives.

another almost $3 trillion to the national debt. Right now, we're looking at more than $36 trillion, Mr. Secretary, and I know you take issue with the CBO's scoring and especially the growth rates that they forecast out. Where do you think we're going to see the national debt? For example, at the end of President Trump's term in January of 2029, will it be lower than it is right now?

Well, I think the growth is going to be much slower. And one of the things that Secretary Yellen and I agree on is not the absolute level of the debt. It's the debt to GDP. So I think we are going to see the debt to GDP well into the 90s by the end of President Trump's term. Well, we were talking to Stephen Myron this morning. He expects that this bill will...

bring down the national debt by between $5.5 and $11 trillion 10 years out. Does that make sense to you that we could see a lower absolute number at the end of the decade after this legislation is passed?

Well, again, I think that it's very difficult to predict 10 years out. But you just said that CBO expects $3 trillion at the end of the window. But they've also said that there's $2.8 trillion in tariff income that we didn't get scored. So a lot of moving pieces here, but I'm confident that we're going in the right direction.

So, Mr. Secretary, I do want to get your thoughts about just broader policies coming out of this administration beyond just this one big, beautiful bill that is now appears to be advancing in Congress. There's been a lot of questions in the market about what the administration's stance is on the dollar, whether there truly is a strong dollar policy or whether that policy, a long term policy of strong dollar support has shifted to something else.

I'm not sure why that is in the market. The price of the dollar has nothing to do with a strong dollar policy. Current currencies move up and down based on a variety of factors, but a strong dollar policy means several things. One is

What is the dollar strong against or is another currency stronger, higher in price at the moment? That doesn't have anything to do with a strong dollar policy. The strong dollar policy is are we doing the things over the long term to ensure that the U.S. dollar remains the reserve currency of the world and

We are. We are setting the stage for economic growth. We are constraining inflation. We are making the United States the best destination for global capital. And I think that's going to continue to happen. I think, as I said,

You know, many times over since World War II, the demise of the dollar as reserve currency has been predicted. And I think once again, the skeptic is going to be wrong. But there is no change in policy. Fair enough. But I'm sure you understand that the weakness that we've seen in the dollar to start the year is

is something we have not seen in decades. And there are other countries that have been trying to take advantage of it. In a speech just this week, we heard from the Chinese central bank governor who really laid out at least their vision, their Chinese vision, for a new global currency order, which would, of course, mean a reduced rule for the dollar and, in their view, a greater rule for the yuan. Now, regardless of whether that is a viable plan, I am curious as to what you think about the idea that this is even being spoken about publicly.

Well, I mean, look, what are the Chinese going to say? And by the way, it's a complete fallacy. They have a non-convertible currency. So how are they going to be a reserve currency? They also have 1.4 billion people who want to get their money out of China. They have capital constraints on taking out money.

sine qua non for a reserve currency is that it trades freely. And I saw my friend Christian Lagarde, president of the ECB the other day, said that maybe this is the euro's moment. But I can tell you, if the euro hits 120, Europeans are going to be squawking that it is too strong. They are an export economy. So

know, let's see what happens. They should be careful what they wish for. Whereas in the United States, we recognize the responsibility that comes with being a reserve currency. I want to ask about this Republican Party's

shift, seeming shift to support blue collar workers. We've seen a wage boom among those people, an increase of 1.7 percent in the first five months of President Trump's term. And that's, I think, the fastest growth we've seen for that segment since 1969. You talk about no tax on tips. You talk about no tax on overtime. Why or why do you think that this party has really shifted to become the party of the blue collar?

Well, I'm going to correct you on that because it's the fastest we've seen since 2017. Previous to President Trump was 1969. And look, this is the party that delivers for working Americans.

The Biden administration wiped the floor with the bottom 50 percent of wage earners, that the great inflation, the official statistics were around 20 percent for President Biden's term, but really for the

package of goods and services that working Americans buy, it was well in excess of 30%. So there was a real decrease in purchasing power. In President Trump's first term, we saw hourly workers, non-supervisory workers' wages increase faster than supervisory workers. We saw the bottom 50% of households

have net worth gains in excess of the top 10%. And again, my message here is parallel prosperity. Both sides can do well, but we are focused on Main Street catching up to Wall Street, but it doesn't have to be one or the other.

At the same time, the CBO has projected that this one big, beautiful bill act passing would result in 7.8 million people being taken off the Medicaid rolls. They would lose their health care coverage. And we've seen also projections that millions would lose SNAP benefits. We're talking about single mothers with children. We're talking about people who have difficulty dealing with the health

untameable bureaucracy of government. How can you make that kind of move with compassion? Well, let's start. 1.4 are illegal aliens, so they're not supposed to be receiving Medicaid benefits. The approximately 5 million to 6 million are what we believe are able-bodied adults. So there's going to be a 20-hour period

a weak work requirement. And we are saying that this needs to get back to the people who Medicaid was meant for. It was meant for pregnant women. It was meant for mothers. It was meant for children. So we are focusing on the benefits for those who need them and not the able-bodied.

We're in conversation right now with the U.S. Treasury Secretary Scott Besson. For our viewers worldwide, we should point out that Speaker Mike Johnson is now on the floor of the House of Representatives, presumably to move forward with a formal and final vote on that tax and spend bill. Mr. Treasury, Mr. Secretary, I am curious about what comes next after this. We know that we ostensibly have this July 9th deadline on trade, and I know it's going to take several weeks, if not months, for

following that to really start to hammer out some of these deals. Do you anticipate that we're going to see additional deals and more substantive deals pretty soon within the next few weeks? I think we're going to see a flurry of deals before July 9th. We'll see how the president wants to treat those who are negotiating, whether he's happy that they're negotiating in good faith. I think that we're going to see about 100

countries, who just get the minimum 10% of reciprocal tariff and will go from there. So I think we're going to see a lot of action over the coming days. Have you been directly involved in any of those negotiations? And if so, are there specific provisions that those other countries have been asking the U.S.?

Well, I'm not going to negotiate on international television, but I will say... You don't have to negotiate. Just tell us. Well, yeah, sorry. What I would say is some...

Countries have come with or trading blocks have come with good deals. Some have come with OK. Some have come with deals that are unacceptable. And we are going to be announcing several deals. The president has the final say. And what I can tell you is that the career staff, whether it's a treasury, commerce,

USTR are all saying that they can't believe that these countries are giving up things that they haven't seen them offer in the past two or three decades. So this is a win for the American people. It's a win for fair trade. Can I ask just finally about the pressure the president and others in the administration have put on Jerome Powell to cut rates? President Trump has

asked now for three full percentage points of cuts, 300 basis points. And it strikes me that that would either overheat the economy or cause absolute chaos in the Treasury market. Don't you think it's important that the Federal Reserve operate with an amount of independence?

Well, the Federal Reserve does operate with an amount of independence, just like a referee does out on the floor of the basketball court. They're independent, but the coaches work the refs.

all the time. President Trump is the most sophisticated president economically, perhaps in the past hundred years, perhaps ever. I will note that in his first term, he was more right than the Fed was on when it was time to cut rates. Fed normally followed later on. So I think he's going to make his

views known. And I would also point out that the market agrees with President Trump in terms of the direction, if not the magnitude of the cuts. Do you agree with President Trump that the Fed should cut by 3% in July?

I believe that I followed the market and the market both for the rest of the year and the two year market is signaling cuts. Well, we really appreciate your time, Mr. Secretary. Thank you so much for joining us. And I suppose I could say congratulations on the big, beautiful bill. Treasury Secretary Scott Besant talking to us here on an early edition of The Close.

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