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00:00From Bloomberg World Headquarters in New York to our TV and radio audiences worldwide welcomed a balance of power. I'm Joe Matthew in for David Westin. We start with breaking news. Just hearing reports now at this hour that Supreme Court Justice Stephen Breyer is set to retire. We'll have more for you on this as we learn more throughout the day. Uncertainty is the word here today from the Russia Ukraine standoff to the situation with the Federal Reserve. As we wait for word from policymakers front and center here. We're going to tackle both of these stories today as investors countdown to a rate decision and news conference from Sheriff Jay Powell this afternoon. The Fed widely expected to signal a March rate hike. Liftoff. For more on that we're joined now by Tiffany Wilding PIMCO North America economist. Tiffany thank you for being with us. I'd like to hear what your expectations are today. We're hearing talk of a potential 50 basis point hike as soon as March. Do you expect Jay Powell will signal that. And what would the reaction be. Well first Joe thanks for having me on. So we're just cut to the chase we're not expecting the chair to you know signal a 50 basis point rate hike at the March meeting. We think that out that outcome is actually very unlikely. I think there's other policy levers that the FOMC could take to tighten monetary policy that would be less abrupt. You know and when we look at the data although you know labor markets do look tight they look like to be rapidly progressing towards maximum employment. Inflation obviously has overshot. The data doesn't suggest to us that type of abrupt policy is necessary as of yet. So our expectation is is that you'll have a 25 basis point rate hike in March. But the chair probably will signal that you should expect additional interest rates after March. So it's not just one. One and done here. It's a path of interest rates. I mean of course in addition they'll probably start to talk more about how the central bank is really going to implement QE T or the reduction of its balance sheet. We've already known from the minutes from the December meeting that it's going to be more aggressive and sooner this rate hiking cycle relative to the past. Tiffany Wilding PIMCO for North America. Economists thank you for setting the table for us. And stay tuned for special coverage of the Fed decision coverage beginning at 130 Eastern Time Bloomberg TV and radio here on Bloomberg. We want to get back to our breaking story now. As we mentioned right off the top here reports that Supreme Court Justice Stephen Breyer is set to retire. And we're joined by none other than David Westin right now of course a longtime expert the host of this broadcast and an expert on all things Supreme Court. David we've been waiting for this word. What does it mean. Well it means a shift further shift in the court away from the so-called liberal wing. Stephen Breyer was appointed in 94 by Bill Clinton President Bill Clinton to replace Harry Blackmun. And he was one of the mainstays an intellectual leader really of what some people think it was the left wing the court. It is an opportunity potentially for President Biden to appoint someone at the same time given where we are in the Senate. I don't expect that's going to be an easy thing to do. Boy that is something to say David. We talk a lot about the Biden agenda and the opposition that he has faced in Congress with such slim majorities for Democrats. What kind of a confirmation battle will this set up if he tries to appoint another liberal justice. Well the one thing you know for sure Joe is it's not going to happen before November. There's no way that's going to happen. Remember what happened with Merrick Garland and how long they held that. And then that really puts a lot of pressure on the question of the Senate in November. Until recently was that the Senate would likely remain in Democrat hands. That's that's very much I think the question now you would know that as well as I am. Well considering that everyone saw this coming in fact a lot of people thought this would happen before now. David do we have any sense of a short list the type of individual that the president might seek to nominate that might resonate on both sides of the aisle or is there no such thing. Well you know for sure one thing Joe from what Joe Biden said as candidate he is going to appoint someone of color and quite possibly a woman who said that very clearly. And so I think you need to look at those. There are some candidates. There's a there's a judge in the District Columbia herself who is thought of as a leading candidate potentially. They're going to have to quickly bet all those people and figure out who they can put forward. But you know it's going to be somebody diverse. The other thing that President Biden has said is he wants a different kind of diversity on the Supreme Court. And that is somebody who comes from the background of criminal defense work who's worked with some of the the underclass in the country who have had to suffer through the criminal justice process. He's concerned that we've had too many academics by the way. Stephen Breyer was a very distinguished professor at Harvard before. He's on the first circuit and then the Supreme Court. He himself was a Marshall scholar. He was a real intellectual is a real electoral. But the President Biden is NIKKEI. He wants to go a different direction. He wants people who have been things like criminal defenders considering some of the issues that we have seen go before the court and expect to go before the court. Roe v. Wade David is obviously a huge one. And then this idea most recently about mandates the ocean rule for private sector workers. That rule struck down the vaccine or test mandate by the court. As it stands now with these decisions be different in any way when when if the president adds the diversity to the court that you're suggesting or is this going to be one liberal justice for another. Well it's hard if if in fact they get a liberal justice appointed. I think you have to jump over that hurdle to get. That's not a given I think. But it's that. You're right. You're a subsidy one for another. But you pick up a very important point potentially. Basically for the Bloomberg audience Joe which is Justice Breyer's background was administrative law. He dealt with things like the authority of agencies. You saw the striking dog OSHA rules you said. There's a whole line of cases that are being pressed right now particularly because it's perceived some of the more conservative justices are more inclined to cut back on the authority of regulatory agencies. As we've seen a little bit of already in some of the writings and Justice Breyer really was an authority in that area. You'll be losing potentially that authority. Who really knows the history of law liberal or conservative. Put that aside. Really knows that area. And I think that may be a battleground going forward if the Supreme Court. Would be very important for the Bloomberg audience. This deal this year is beginning to take shape for President Biden. David we've talked a lot about his legislative agenda which has been severely challenged but we're of course going into some important confirmation hearings for his nominees for the Federal Reserve. Those three open seats now we add a Supreme Court justice and this year is becoming a lot more complicated for a president who didn't end last year in very good stead on Capitol Hill. Warren as you point out Joe I mean particularly when you're talking with the chair and the vice chair which are pending right now time's a wasting. Jay Powell technically is no longer chair as of February 5th. It doesn't look like they're going to get him confirmed as looks likely to re up his term in time. And then you have three other openings with some real issues having been raised about Sarah Bloom Raskin by Republicans. So you've got a real potential indecision or uncertainty with respect to the Fed which is a big issue by the way. The OMB director is about to be nominated to as I understand the acting the woman who's acting is mostly nominated for or be director. So he's got a lot of nominations that he's gonna have to fight for. Great to spend some time with David Westin. David thank you for being available to us here. And of course we'll be back in this chair soon. On balance of power I'm Joe Matthew in New York. We should note that these are reports right now on the Supreme Court justice retiring and we are working to independently confirm that. Want to bring in June Grasso who joins us on the line now as well Bloomberg's June Grasso who's been talking about this for months. June we thought this might come last year. What do you make of the timing. Well I think that you know Justice Breyer is politically savvy and he thought that he's going to give the Biden administration time enough to be able to line up a successor and get that successor confirmed before there is any hint of a change in the composition of the Senate. And you know there's been this campaign for Breyer to retire. They've been really liberals across the board have been urging him to retire. And he knows what's up because he saw what happened with Justice Ruth Bader Ginsburg. So that's why he's doing it I'm sure because he signed he's shown no sign of slowing down on the bench at all. He is as engaging and provocative as he's always been. He also seemed to suggest or indicate that he didn't want to be tossed out the door. He wanted to leave on his own time. June I guess this is it. Well I I think it's not really his own time. I think he would like to stay on the bench even longer. But he sees the political realities around him. And despite you know these talked a lot about the court not being political and has put that message out there. But he knows what's happening and he knows that the court right now has six solid conservative only three liberals. If he leaves them remember that Mitch McConnell has said that if he takes control of the Senate he might not even approve a Supreme Court nominee by Biden in the last two years of his term which is sort of unheard of the way the system has been changing to be so much more political. So I think that Justice Breyer knows that and he's doing what's best for the Supreme Court rather than what he would really like to do. Well then how does the White House prepare for this confirmation process. June. What is their short list look like. Is there anyone with a chance of passing. Yeah. There is a there's a judge on the D.C. Circuit Court of Appeals right now and she was elevated from the from the district court and Justice Tom Keene Brown Judge CAC Brown I'm jumping the gun there. So she is considered the front runner here. Biden has said what he was even campaigning that he wanted to choose a black woman to sit on the Supreme Court. So he is considered really the front runner in this because she's been on the bench the federal court bench for quite a while. She's very well respected. And the thought was that they elevated her the D.C. Circuit sort of as the Trump administration elevated justice. Amy Kony Barrett to the Seventh Circuit. And then shortly. Year after she was put on the Supreme Court the same thing here. So whatever happened during her hearings below to get on the 7th Circuit you have to imagine that everything was asked at that point. Given that she'll have easy going when it comes to confirmation. Now there is another. There are a couple of other possibilities. There's a judge in California who sits on California's state supreme court that's also considered in the running. June Grasso Bloomberg News expert on all of this. Thank you for jumping on the line with us. Michael Barr breaking story here and sharing insights. I want to go to Washington now to bring in our Washington correspondent Annmarie Horden ahead of a conversation with the ambassador to the U.S. from Britain. And Mary this is not exactly the news that the White House was probably planning to hear today. We heard from Press Secretary Jen Psaki speaking to this is to say that this the Supreme Court justice can decide to retire when they want to. Any justice can decide to retire when they want to is the line. How prepared is The West Wing to deal with this. Starting now. Are we going to start hearing names in the coming days. Well interesting enough Jen Psaki is not even confirming it Joe. She says We have no additional details or information to share from the White House. So they have not even confirmed yet that this is the case that he is going to retire but does look like that's the direction of travel. It seems like because we are heading into those midterms and everyone is talking about a potential red wave maybe he wanted to make sure he could get out in time for this White House to prepare to put a justice there that leans where he did on the left. Of course he was appointed by former President Bill Clinton. And I imagine this is just going to be one extra to do list for a very busy administration dealing with domestic issues as well in the foreign policy front. Well hopefully we can get some confirmation on this soon from the West Wing. You know how this goes. Anne-Marie every time President Biden is in public starting now this is the only thing anyone is going to be asking him about of course even with everything going on in the world. Yeah I think I'll be justices inflation and what's going on in Ukraine. Yeah. This is this is certainly going to be the attention and the focus of D.C. will certainly look we'll look to the White House to see who's the short list. Do they have a short list. I mean that's the big question. Well joining us now from Washington as we continue this conversation is Dame Karen Pierce the U.K. ambassador to the United States along with Bloomberg's Ann Marie Hauser and Marie. Yes. Where Joe was so excited to have ambassador here especially ISE you're actually nearing your one year anniversary Feb. 7 2020. You got the post here in Washington first. WOMAN 2 To be the ambassador of the United Kingdom here. I want to focus in on the crisis going on right now with Ukraine Downing Street and White House. They seem to be in sync in terms of tone and rhetoric. It seems that some of the other Europeans is a little bit harder to get on board. How hard is it been to get all the capitals of Europe alongside Washington to agree on a harsh sanctions package. Well Britain is working really closely with the administration at all levels on all aspects of the crisis. President Biden the other day did refer to the total unanimity we had in the gun what we call the quantum plus format. When he talked to a number of European leaders NATO Secretary-General and the EU and that was a very good meeting. Sanctions are complicated because everyone has different legal systems. The EU has one legal system the Americans another. And we the Brits have now got an independent sanctions regime. So they won't look exactly the same. But we are working on a wide ranging deep package of sanctions going further than was done in 2014 over Crimea. And everybody is on the same page in the sense that President Putin risks very severe sanctions if he goes into Ukraine. But as the past sanctions worked we have 2008 with Georgia 2014 annexation of Crimea. You were at the UN during the poisoning of Sergei and Yulia Scruple in Salisbury. It doesn't seem like these sanctions are deterrents for Vladimir Putin. Well you could look at it that he hasn't done anything since 2014 and that may have been because of the sanctions put on him then. We do know that they slowed the Russian economy down and we do know that that has an effect on decision making. But I think as well as Secretary Blinken said sanctions are also a deterrent. The threat of sanctions is in itself a deterrent. And we'll see we'll see whether that deterrent works. We're offering dialogue. President Putin has a different way forward than keeping troops on the Ukraine border. Documents Bloomberg has seen shows that Germany is pushing for these exemptions especially when it comes to the energy sector. And Prime Minister Borsch ISE is talking about some of the particulars of how hard it's going to be for some nations given their reliance on Russia when it comes to energy. Do you expect there's going to be some exemptions within the Russian economy. In my experience all sanctions regimes have some exemptions that typically on the humanitarian and medicine side. So I wouldn't find that an unusual concept. We'll have to see how negotiations go on sanctions within the European Union. Certainly the Germans have made clear that if Putin invades Ukraine they will reconsider Nord Stream too. I want to also get your take given the fact that you were the ambassador in Afghanistan. So you've been in conflict zones. Just a few hours ago the US embassy in Kiev said we urge all U.S. citizens to leave. Now when you see a message like that from your experience how quickly is the situation deteriorating. Oh it sounds very alarming but in fact it's prudent and sensible contingency planning. In my experience you don't want any to take any more risk than you absolutely need to as a government. So you try and get nationals out in very good time. But different countries have different criteria. We still have an embassy open. We've taken out some non-essential staff and their dependents but our embassy is still there. Ambassador this is Joe. Matthew is the US in consultation with your government about the written response to Russia's demands. We expected that this week. Is that forthcoming. We're in close touch with the Americans about that and about all aspects of the policy and the approach to the Russians. We coordinated before the NATO Russia Council. The US are in close touch with the rest of NATO. And yes we're talking about that with them. But it will be a US response and then there'll be probably a NATO response as well. There are a lot of elements that we can discuss here Ambassador. But just to get to the heart of the story do you feel like we are moving closer to war. I wouldn't want to say that I think the threat of conflict is is there. Obviously there are over 100000 troops on the Ukrainian border and imbalances. That's a very dangerous situation. I think you have to ask President Putin why he has so many troops there and what he intends to do with them. He wants to destabilise Ukraine. He's threatening Ukraine. That's obviously unacceptable in itself. Ukraine is independent and sovereign but it is also worrying to those NATO members who are in the south east and east of Europe. Getting back to is questions on sanctions. Does the UK support this idea that President Biden floated yesterday or he was asked about it to be fair but said yes that the U.S. is considering directly personally sanctioning personal sanctions against Vladimir Putin along with other leaders in the government. Is that the answer. Well we're looking at a range of sanctions too. Each country makes its own decision the European Union will decide. We already have the ability to sanction individuals as opposed to governments. We are introducing legislation to give us more facility on sanctions. What is the case is that the sanctions will be very wide ranging and they will go to the heart of the Russian economy. But as I said earlier primarily we would like them to be a deterrent so that President Putin thinks twice. Ambassador I think of sanctioning President Putin. It seems almost impossible because officially his assets are very very little. Most of his money is very difficult to track. But what is easy to track are some of the very wealthy oligarchs that take haven in London. Are they on the table. We look at all aspects of Russian money illegal money illicit money. We have introduced new legislation in the UK to go after illicit money including from Russia. And we keep it under very close review and we won't hesitate to act if we think there is a case to do so. I don't want to get into the whole psychoanalyzing of Vladimir Putin. But you've worked with the Russians your entire career. That's right. Why now. I think that's a really difficult question to answer. I think it isn't the case that President Putin genuinely feels NATO is a threat and that Ukraine joining NATO is imminent. So I don't buy that line of argument. I don't know anyone who does. I think it may simply be that President Putin has concluded there may never be a better time. Not that it's a good time. But this is his best chance to destabilise Ukraine in whatever form whether that's by trying and disinformation campaign whether it's by an incursion or an invasion. I don't think we know yet but I suspect he thinks this is a good time. And if you think it was 2014 when he went into Crimea 2008 when he went into Georgia he spaces these things out. And they a lot of the times come around the same time as Olympic Games. So that's why I'm very keen on looking at what happens when he goes to Beijing for the Olympics. You're heading back to London. And I know you're a civil servant but I just want to get your take on the domestic situation in the U.K. Prime Minister Boris Johnson Johnson's under mend Amanda's pressure and he refuses to resign over these alleged parties he was hosting at Downing Street or attended. I'm not going to get your take on whether or not he should resign or not. I know you can't give me that answer but as a leader when you see your leadership not abiding by their own rules how do you expect British citizens to do so. What I see Boris Johnson doing is leading is working really hard on Russia Ukraine crisis and on resolving the pandemic. And we're making good progress on the latter. We've just been talking about the former Boris Johnson as being right at the heart of all the conversations with President Biden and NATO that have been going on on the parties. There's an investigation underway. I won't pre-empt that. The prime minister has apologized to parliament. He said he understands the anger that people feel. But primarily he is focused on Russia Ukraine and the pandemic. And we're making progress on the latter. Many thanks. That Dame Karen Pierce the U.K. ambassador to the United States. Thanks as well to my colleague Bloomberg's Annmarie Horden Washington correspondent who will be back a bit later on this hour for more conversation about this. Want to join Michael McKee though on the line for more on this breaking story as we understand that Justice Stephen Breyer is now preparing to announce his resignation. Mike how does this news set you today. What does it mean in terms of timing. Well the timing is going to be very interesting because prior one of the few justices left on the liberal wing is also the oldest justice on the court. And Democrats have been very very concerned that he would stay too long. Might as Ruth Bader Ginsburg did die in office and Republicans would get a chance to nominate and confirm his replacement. So we don't know if he's bowing to pressure. He said for the last couple of months that he would make a decision when he was ready to go. But it does help Joe Biden if they can get the confirmation process up and running in enough time to get him confirmed before we get too close to the midterm elections. You can bet Republicans will make this an election issue. Says he will step down at the end of the term according to reports. How much time does that give the White House to come up with a shortlist. While the White House I imagine already has a short list but to make it popular. We should say here. The court's term traditionally ends in June. So the question is which I'm not clear on but I believe that the White House would be able to start the nomination process before Justice Breyer actually retires. He could go a replacement through the nomination hearings and probably a committee vote before there was an opening and then get a floor vote as soon as Justice Breyer actually leaves. With what we've seen in terms of President Biden's relationship Mike with this with this Congress with Mitch McConnell specifically the minority leader in the U.S. Senate. This could be a grind. What is the White House in for here. What is the nominee going to be in for. Well this is gonna be a really really tough one because it's not just in an election year when Republicans have threatened are threatening to take over the Senate and take over power over who is on the court. But it's also a year and we would expect a decision in the summer where Roe v. Wade could be struck down. So the whole midterms could change from right now an emphasis on inflation to an emphasis on the Supreme Court and the White House would have to be able to mobilize people get them to care enough to vote on that issue. And it isn't clear that Democrats have the same feelings about it. The Republicans have. Mike I never thought we'd be talking about the Supreme Court today. This is Fed Day which is of course your your wheelhouse. And I wonder what your thoughts are as we go into this decision and this announcement a bit later on. You'll have special programming of course here on Bloomberg TV and radio when we hear more from Jay Powell. In terms of the statement though what are you going to be looking for with a sense of what might come in March. My first thought when I saw the brighter headlines was gee we don't have enough news today. But I think what we'll get is what the market is expecting. They will say we've basically reached the point of maximum employment at full employment. We're way over their target on inflation. So therefore it justifies raising interest rates sometime in the future. They probably won't say the month of March Madness what Wall Street is betting on and they'll talk about the balance sheet as something that they will get to. We won't get a decisions on that today but they probably will continue tapering rather than cutting it off immediately because the amount of money is so small they don't get anything out of it. And then finally the big question is going to be what kind of forward guidance do they give us. Because for the last two years we've been watching for full employment and inflation. And now that we have those what we'll get the Fed to move the next time. How will they make decisions on how far they're going to raise interest rates and how soon. Sounds like a full rewrite is on the way. Many thanks to Mike McKee. Much more on the reported retirement. A Supreme Court Justice Stephen Breyer ahead. This is balance of power. Michael Bloomberg TV and radio. This is balance of power on Bloomberg TV and radio. I'm Joe Matthew in for David Westin for Bloomberg First World News. Now let's go to Mark Crumpton Mark. Joe thank you. As we've been reporting. Supreme Court Justice Stephen Breyer reportedly says he will retire giving President Biden a chance to fill his first vacancy on the U.S. Supreme Court. And reinforcements outnumbered liberal wing Justice Breyer the court's oldest member at 83 has decided to retire at the end of his term. That's according to news reports appointed by President Bill Clinton in 1994. Breyer was a pragmatist and consensus builder who tend to side with the court's liberal wing in divisive cases. He's been under increased pressure to resign. Americans in Ukraine are being urged to leave the country. The U.S. embassy in Kiev issued the guidance today as tensions with Russia increase in Moscow. Russian Foreign Minister Sergei Lavrov said the Kremlin will respond to any aggressive action. And an ally of President Vladimir Putin proposed shipping weapons to separatists in eastern Ukraine. Russia has denied it intends to invade Ukraine despite massing thousands of troops tanks and equipment near its neighbors eastern border. A major milestone in vaccination reports around the world according to the Bloomberg vaccine tracker. More than 10 billion doses of Covid-19 vaccines have been given across the globe. The World Health Organization has set a goal of vaccinating 70 percent of the global population by the middle of this year. An analysis by Bloomberg finds the current pace of vaccinations is enough to get a first dose to 75 percent of the population in the next four months. British Prime Minister Boris Johnson is batting away more calls for his resignation. The latest came today from opposition Labour Party leader Keir Starmer over allegations of those rule breaking parties at Downing Street during the Corona virus lockdown. We've taken the tough decisions. We've got the big calls right. Any particular hi I'm getting over the Joel Weber. Prime Minister Johnson told the House of Commons he couldn't comment on the matter while it's still under investigation. 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'm Mark Crumpton. This is Bloomberg joke. Mark thank you. Joining us now is Bloomberg's Washington bureau chief Peggy Collins who is with us live on the line. Peggy I am looking at a tweet from Jen Psaki the White House press secretary that ends with the line. We have no additional details or information to share from the White House. Or are we to believe that Justice Breyer did not give the president a heads up. I don't know if you can say that at this point Joe but what they are saying is that they are pointing to the personal decision of the Supreme Court justice. So far. He also said it's always been the decision of any Supreme Court justice. If and when they decide to retire. So I think what they're trying to do is deflect and move the spotlight onto the individual decision. But obviously this is a huge moment for a potential Biden legacy here to have another liberal justice appointed to the court that could stay on for decades to come. He is the oldest member of the court at 83. Peggy how important will it be for President Biden to nominate someone not only diverse as he has suggested but also younger in years. I think it will be important as our Supreme Court reporter great store has reported. Bryden has promised to nominate the first black black woman to the court. And there are leading candidates out there but also that this would not necessarily tip the balance of the court because right now it is multiple people in favor on the conservative side. So it's very important for the Biden legacy and for Democrats. But it is not necessarily going to tip the balance as it stands right now. Everyone seems to agree based on what I've heard so far this hour since this headline broke Peggy that this is going to be an ugly confirmation process no matter who Joe Biden selects. We've seen this relationship with Republicans deteriorate if there ever was a relationship certainly when it comes to legislation. How difficult of a process will this be. Well I think as you said Joe the process is getting more and more difficult. And we have to remember that this is now in the context of an election year 2022. So I think it will be a laborious process. But they do have time unlike what we saw with Ruth Bader Ginsburg. Ginsburg when she passed away. So I think that time could be in their favor. But it certainly will be an uphill battle because of the rancor that we have seen time and time again Capitol Hill. Well the timing words we're talking about here the possibility Peggy is that this is how the Biden White House will spend the summer a critical time for campaigning. This will be added to the conversation about inflation. That's right. And we've certainly seen that the Biden administration is trying to get its message out on that and even accept the message there. But they're fighting battles on multiple fronts. Certainly Ukraine is an issue right now where geopolitics and international affairs are front and center at the same time that Americans as you say are really focused on the domestic side of things with two things happening. One Covid still very much in play. And to inflation as you say. Thanks to Peggy Collins our Washington bureau chief. Let's bring back our panel. I'm joined again by Bloomberg Washington correspondent Annmarie Horden Shery Ahn. White House correspondent Josh Wingrove is also with us. What's your first blush reaction to this when Josh you've been covering a White House that has been in the middle of a legislative storm trying to deal with Covid. Inflation is top of mind on this Fed day. And now this this sort of redefines walking and chewing gum at the same time doesn't it. Yeah well I think they're going to walk chew gum and juggle now but they're going to have to. And I think this will be met broadly frankly with relief among Democrats who've been wondering if and when this day may come worried that they won't get a chance to do it if Justice Breyer didn't take this move you know sooner. These these midterm elections of course put the Senate at risk if the Democrats don't control the Senate. The hope that they can pass anyone let alone someone they wanted are slim or arguably none. So this this is this will be I think greeted as an opportunity for them. They will absolutely go younger. As you mentioned Biden is as has pledged put a black woman on the top corner. I think certainly Kentucky Brown Jackson who they've already nominated to the D.C. court already. The will will be a top candidate. One of the top candidates if not be a top candidate that all eyes will be on in this confirmation process. Emory as it will be coming in the middle of an election season a midterm election season in summertime. Is this then a blessing for this White House as Josh suggests that the timing to actually get this done while Democrats are still in the majority. I think for them it's going to be a lot more work. As Josh said it's now about juggling chewing gum walking. But it is a blessing I imagine in the sense that they have the control right now. So now would be the time to act. It's also potentially a moment for the administration to pacify some individuals in their party that they've been struggling with. Potentially this is one way to get some members in their party and make some check marks and green light from them in order to get other agenda items done like build back better and working on inflation. So I imagine for this White House this is definitely going to be something that's welcomed. Then as Peggy said it is a way for President Biden to cement his legacy. This would be a win for them. Ann Marie and Josh thank you. Joining us now is Congressman Andy Levin Democrat from Michigan a former practicing lawyer. Congressman I know you have a good sense of of how Democrats are feeling about this. Are you relieved to hear about the timing as some are suggesting. Well I'm very happy about it Josh. I mean Justice Breyer has contributed so much to our country. You know he I remember he visited us with a law student. And it's just you know he's had an amazing run and it's great that he's retiring and that President Biden's committed to appoint the first black woman to the Supreme Court United States. It's high time that happened. There's so many brilliant qualified you know African-American women who are jurists who are lawyers. And so I'm really really excited. And we'll be able to confirm that nominee though in this in this Senate Congressman. He will. He will confirm it. They will get it done. I mean after you looked at what happened and the way that Mitch McConnell has used scorched earth tactics really violating the good faith processes of the Senate to prevent President Obama from appointing someone with over nine months left in his term. Now here President Biden's just entering his second year of this term. So of course the Senate needs to confirm a highly qualified candidate that President Biden will put for Congress with a you understand of course better than most. The rift in Washington between these two parties. What do you expect to hear from Republicans. Why do you why do you seem to think this will be as easy as you're suggesting. Well I'm not saying it will be easy. I'm saying it's necessary to do it. And I think the the Senate realizes its responsibility here. Certainly Democrats in the Senate do. And so I think it's you know I think the president will work really hard to find a candidate who will be just extremely qualified and will you know will just be an undeniably great addition to the to the Supreme Court and in the Senate will get it done. As a former practicing lawyer I wonder what your thoughts are on Justice Breyer. We've been looking forward since this headline broke. But looking back what will his legacy be as a Supreme Court justice. Well I mean he you know he has been a real expert on administrative law. He's been a you know a very I think kind of a practical justice. I mean he he was appointed in I believe the year I graduated law school in 1994 by President Clinton. And so you know he's been on there long time. He's the oldest justice. And so you know he's he's written many important decisions. But you know I think that it's it's really makes sense for him to retire now with President Trump having you know put three people out there on there it's time for a Democratic president to be able to appoint someone. You know I think really need to look at the whole Supreme Court and how the nomination process works. And we ought to think about reforms in multiple ways. But this is just a great moment where somebody who's contributed so much is retiring and giving Joe Biden the chance to to appoint somebody who will really hopefully be a solid contributor to justice for all in our country for decades. Congressman Andy Levin of Michigan one Democrat of many relieved to hear this news today. Thank you for being with us. On balance of power U.S. banks are facing increased scrutiny by the Consumer Financial Protective Bureau for the fees that they charge you consumers according to the agency. And we're joined now by the CFP B's director Rahim Chopra. Director. Thanks for being with us here on Bloomberg TV. As you pivot here in your effort to eliminate what you'd like to call junk fees to the financial sector to the banking sector what are the most egregious fees you plan to target as a credit cards. Well you know Americans are concerned about rising prices and fees creep across so many products. Last year we reported how overdraft and NSF fees you know total 15 billion dollars tens of billions of dollars credit cards mortgage closing costs. And we want to look at all of them to see where we can make sure this market is more competitive honest and upfront. 15 billion dollars a lot of money. That was the banking revenue as you mentioned from 2019. That came only from overdraft fees. It's something that is an issue for a lot of consumers. But are the banks actually doing anything wrong or are they breaking the law. Well in some cases the facts depend on the facts are going to tell us if they're breaking the law or not. CPB has done a number of enforcement actions related to overdraft practices related to other fee practices. But I think I'm more concerned about again the creep of fees at the back end rather than advertising the true price to true price upfront. And we see this across the economy. When you buy tickets online when you book hotel rooms and these bank fees add up to tens of billions of dollars that drain money from family budgets. I know you're asking for input. You want public comment on this people to weigh in and describe what their most egregious junk fees are. I just wonder what comes next. Is that going to be followed by fines or other enforcement action against banks. Well in some cases we're going to look at rules. The CPB is a part of the Federal Reserve System. We now administer a lot of the rules that we took over from our partners at the Fed. They relate to bank accounts credit cards and so many other products. But you're right enforcement may be part of this too. If companies are colluding if banks are engaged in practices to manipulate how they can harvest more fees and sometimes that breaks the law they'll have to face a liability for that about crypto traders face some pretty hefty fees in the crypto world. I wonder if the CFTC plans to go there as crypto in your portfolio. Well you know we want to hear from. Everybody in terms of all the products that they're dealing with. It's our authorities going to depend on the specific facts. But as more and more people are transferring money whether it's peer to peer payments crypto or anything else we want to hear about the churn and the fees that they're incurring. In some cases those fees may be way out of line with the actual cost or the service that they're getting. What does this mean for the CFP at this stage of the game. As part of the Biden administration are you are you looking at a more aggressive posture in dealing with this type of thing than what we saw for instance in the Trump administration. Well look our job is to enforce the law and that's what I am going to do. We want to make sure markets are competitive. You know this week President Biden convened many agency heads and cabinet members and we talked about all we need to do to attack the lack of competition including in the financial sector where a handful of giants often dominate certain markets. So the end at the end of the day we want to make sure that the more we have competition the more that prices are lower that people have more choices that we get more innovation. And that's going to be top of mind for us at this yet. Is this a big conversation about inflation in disguise here. Is that what we're really talking about. I know the administration has found a number of ways to get to inflation in some very narrow focused efforts. Is this one of them. Well I see this as a long standing problem. You know when you go to the supermarket you can see when prices are going up. When you buy things online some people can feel when prices are changing. A lot of times in banking these fees are on the back and it's advertised as free or as low fee. But in reality people get penalized and many financial institutions make big money on this fee creep that we're seeing. And ultimately the more we can make it clearer and competitive. Some of those fees might go away. Some banks are already announcing they're getting rid of overdraft fees and NSF fees. And I think we're going to see more of that. Director you were once the agency's student loan ombudsman. A see you know a bit about this. I wonder why does the Biden administration continue to resist calls to forgive student loan debt from the likes of Senator Elizabeth Warren and other progressives. Well you know that's really a decision for the Education Department from the CFTC. They see CFP as enforcement action have canceled debt especially when it's been illegally or illegally originated. You won't wait for a decision. I am definitely worried about the return to repayment which is going to start in a few months. We need to make sure that borrowers who have been cheated or borrowers who know their rights. And I think we're all waiting for a decision on what might happen when it comes to student loans. So realizing that's not necessarily in your purview but you have a unique view on that. Is it something that you expect to change in terms of the Biden administration's stand on this or should students get used to paying these bills. Well what we'll see. I think what we are already seeing in the past few months is more borrowers are actually getting cancellation of their loans under programs that already exist. Many of the loan servicers made it very difficult for borrowers to actually be able to repay their loans take advantage of these opportunities that were enshrined in law. Some of that is changing for the better. But at the end of the day we still have well over a trillion dollars in student loan debt that many people worry is holding back the economy. Thanks to CFP director of Reheat Chopra. Thanks for your insights today director. And we do want to get back to breaking news and reports about the retirement of Justice Breyer that has been confirmed now by Bloomberg News. Breyer retiring according to a person familiar with the justices thinking bringing Bloomberg Law reporter Kimberly Robinson for more on this. Kimberly the timing here is conspicuous. Democrats were hoping to have time to solve this before the midterm elections. Did they get it. Well you know the timing here is somewhat surprising in that it comes in January rather than kind of the more traditional markers that we see which are in April and June. But the fact that he's retiring this year isn't all that surprising. We have some hints early on that that would be the case giving the Senate the opportunity while still under Democrats to replace his successor. Kimberly what comes next. How much time does the White House have to think this through and start making public comments about it. Well that's something that's really changed a lot with the last confirmation of Anthony Barrett. So you take a few months to get a nominee through. Well of course that timeline changed quite a bit with Anthony Barrett who was on the bench about a month after Justice Ruth Bader Ginsburg passed. So there's really an opportunity for Democrats to move quickly here. I think in all likelihood this is something that will be done before the next term starts in October. So that seems to be a pretty sure bet. Let's bring in Bloomberg editor at large Marty Schenker for more on this. It's great to see you Marty at a moment like this. Joe Biden has had a lot of plates spinning in the air you might say against the backdrop of a pandemic and against the backdrop of inflation. Is this White House able to do enough things at once to handle this too. And don't forget Ukraine. That's right. I mean Ed I'm sure they have a very short list of nominees waiting for this. It came as as your previous guest just said. It came as a surprise to come now. I mean it could have been that NBC News just found it out and broke it. And so they may have been a little flatfooted on the response but they I'm sure they have a very good idea of who they want to nominate. And the question of getting confirmation is probably not much of a question given they have a 50 seat in the Senate and a tie vote of the vice president. How much will this complicate the midterm election process for Democrats or does it give them an asset to run on. It depends on who the president decides to nominate. Obviously if he nominates someone on the very far left of the political and philosophical spectrum it will give the GOP an opportunity to to campaign against it. You know my suspicion is he will pick someone who will be able to be confirmed fairly easily. He and Joe Biden has promised to nominate a black female. And I assume that's what he's going to do based on what we've seen with regard to laws on reproductive rights voting rights mandates some of the issues that have been circling the court here. This could be a major progressive cause a motivator in a midterm election cycle now. It could very well be. But let's also remember that the philosophical framework of whoever is nominated by Joe Biden will conform to pretty much to Justice Breyer and will not change the dynamics of the court. So the opinions may be more strident one way or the other. But the bottom line votes probably won't change. But diversity and female representation on the court could be a major factor if the if you judge by the Fed nominees that are still pending before Congress. Diversity is a key issue for the Biden administration. What is a 5 4 court look like. It looks like a 5 4 court. And you know that I think attention is now going to swirl around Clarence Thomas who's 73. There's been some speculation that he might retire. And the whole question of what happens in the midterms and what happens in the Senate becomes center stage on the next opening. Remember to we have three nominees for the Fed. We're going to be a series of confirmation hearings that could give Republicans a lot of fodder at a critical time. That's correct. But they the Republicans also can overplay their hand. Let's not forget the vast majority of Americans support Roe versus Wade. And so if they campaign on that issue they're running against the popular vote over the country. Marty Schenker many thanks for being with us. In a breaking news environment he's the one you want to talk to. This is balance of power on Bloomberg TV and radio. This is balance of power on Bloomberg TV and radio. I'm Joe Matthew in for David Westin. Recapping the breaking news that we heard to start this hour. Justice Stephen Breyer is set to retire because a Fed day is not enough. We have had quite a number of headlines break over the course of this broadcast that we will be chasing throughout the day. We've heard reaction from the White House but very limited reaction from Jen Psaki the press secretary out with a tweet saying it has always been the decision of any Supreme Court justice if and when they decide to retire and how they want to announce it. The how is the interesting part here as we wait to hear more from the White House coming up. Balance of power continues on Bloomberg Radio. Live coverage of the Fed decision starting at 1:00. Thirty p.m. Eastern Time and special coverage ahead. This is balance of power on Bloomberg TV and radio.

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'Balance of Power' Full Show (01/26/2022)

"Bloomberg: Balance of Power" focuses on the intersection of politics and global business. Supreme Court Justice Stephen Breyer is going to retire at the end of the term. Reaction and analysis from Rep. Andy Levin, Bloomberg's David Westin, Kimberly Robinson, Peggy Collins and more. Plus, U.K. Ambassador to the United States, Dame Karen Pierce, talks the tools the U.K. is prepared to employ, to ward off Russian aggression. Finally, CFPB Director Rohit Chopra on his agency's plan to crack down on hidden bank fees. (Source: Bloomberg)

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