Fed Cuts Rates by Quarter-Point; Powell Cites Weakness in Jobs

22:37We don't know where the money is. There's no accountability.

22:40Carol Massar:So how do you do this then? You're saying that with this consumption tax, you'll have the money to do this. And how do you get, how quickly can you get it built? Well, so it's a combination of things. One is yes, the money is there. Although we've squandered so much money already, the money is there for this. Second of all, we have to use smart building. We don't have government. We need public-private partnerships. And my government will lean very heavily on private excellence to work in tandem with public oversight to get things done fast. And I think that modular housing is definitely one of the answers.

23:15But we have to combine competence, a commitment to safety, and a love for our fellow people. I'm proud to be in California. We care for our most vulnerable neighbors. That will never change, but we need to do it the right way. These people, unfortunately, with all the money we've spent, still sleep on the pavement. We're speaking with Ethan Penner, 2026 candidate for governor of California, also the founder and managing partner of Mosaic Real Estate Investors. On the homelessness question, it obviously has to do with housing. It has to do with mental health. There's no easy solution, as we've learned.

23:51On the regulatory side of things, you said for building housing, you want to streamline regulations, get rid of red tape. But how specifically do you do that? Because it's an easy thing to say. But as we're learning in the wake of the fires in Pacific Palisades and the waste removal going to new Calabasas and the landfill there, people are not happy about that. Like, how do you do this in a way that satisfies these constituents? Well, I think it's top down, actually. So I think we have to set a standard from the from the governor's office in Sacramento. And that standard has to be, look, if I get elected, it will be with a mandate for change, right?

24:30I'm the consummate outsider. I don't belong to either of the main parties. I've never had a day in political office. So I'm running for a mandate for change with specific policies in mind. And I believe the people's will will be heard through me. And that will that will empower me to actually make change. But you understand. I mean, I do understand. I understand bureaucracy very well. I've worked at big companies.

24:53Carol Massar:But I'm just thinking about Elon Musk, Doge, even in the federal government. And yes, USAID dismantled other offices or other built departments dismantled. But it's not easy to kind of, you know, all of these regulatory checkpoints. I mean, how do you really do it when it gets down to it? How do you do it in, you know? I'll tell you two things. One, I am not willing to accept that it's hard or impossible to do, and I'm going to commit myself fully to doing that. And I know for sure, if people like you and I don't commit ourselves to positive change, the answer is 100 % bad. So I'm going to commit myself and I'm going to do as good a job as I can.

25:36Second, I really do believe that most people in government, in state government in California, go into their jobs wanting to do the right thing for their people. I really do believe that. And I think that as a nonpartisan and a non-career politician who's not trying to advance my career at all, I think I'm going to be very uniquely well-received by the legislature because I won't be viewed as oppositional in any way. we got to talk property taxes do you think something has to change with property taxes in california in the context is that somebody like my parents who've lived in the same house since the 1990s pay basically nothing in property taxes thanks to the passing of a certain proposition many years ago but if somebody were to buy that house like you know the next family to own that house the property taxes would be debilitating and it makes it so people stay in homes for a very long time and contributes to the housing crisis, some critics say.

26:31You know what? I don't believe that's true. Why? I don't accept that. I think that I think that we are our society, our community is served well by continuity. And I think that having people be forced out of their homes because of appreciation, it denigrates our community. It denigrates the continuity of our community. So I would I would not try to change that policy. I think that's a wonderful policy.

26:58Carol Massar:Got to ask you about Governor Newsom, his feud with the president, the president's attention on California, on many states. How would you posture yourself toward President Trump? Well, I think that both parties are busy fighting with each other about the president, pro or against the president. And I feel that it's a gigantic distraction from the incompetence that they've brought to the table in actually doing their job for the citizens of California. I will not be engaged in that distraction. For me, I'm laser focused on serving the needs of the people in California who would be electing me, who I care for.

27:36Carol Massar:But what do you do though, Ethan, if President Trump, you do a policy and you are a social media post at 7 a.m. in the morning of something he doesn't like. And he says, maybe we're going to go down to California and talk to Governor Penner. Well, what do you do? I think that every leader, Carol, has to approach their job with humility. And I don't see that as often as I would like. So Governor Penner would remember that Governor Penner is a servant for the people. And Governor Penner would understand that whatever he says or does, he has to take in mind, is this in the best interest of the people who he's serving?

28:16and fighting with the president of the United States, it's not in the best interest of the people. Okay. This is definitely not. So I would try to have a workable relationship with, with both the legislature that I would need to work with, but also the federal government, because as you point out, that's a very important relationship, whether it's this president or, uh, or another president, it's not about my personality and the personality of another, which I think, unfortunately, we see today becoming the story. I don't need to be the story. My personality is not that important to me. My job as serving the needs of the people who elected me is the only thing I care about.

28:57Carol Massar:Well, stay in touch as this year progresses. Love to see how things are going. Ethan, thank you so much. Thanks for having me. Yeah, really appreciate it. Ethan Penner, 2026 candidate for governor of California, founder and managing director of Mosaic Real Estate Investors. We did not get to talk about the CMBS market, So maybe next time around. Next time. Ethan, thank you. Stay with us. More from Bloomberg Business Week Daily coming up after this.

29:23Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like if the VIX hits 25, buy a put option on the S &P 500. Or if my cash balance goes above$20 ,000, move the excess into my direct index. You approve of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined.

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31:53Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. These days, it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agent's identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta, you'll turn risk into opportunity. Secure every agent.

32:30Secure any agent. Okta secures AI. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Hey, I want to get to some breaking news. Redhead crossing the Bloomberg terminal just in the last hour. Tesla working on a redesign of its vehicle door handles, which have drawn scrutiny over safety issues. We've got Matt Miller with us. He's the co-host of Open Interest on Bloomberg TV and the Hot Pursuit podcast with Hannah Miller.

33:11Matt, this news coming thanks to an interview that you and Hannah did with somebody at Tesla. It's longtime design chief. What can you tell us? Yeah. Hannah Elliott, first of all. Oh, Hannah Elliott. Did I say Hannah Miller? She hooked up this interview with Franz von Holtzhausen. She ran into him at the Tesla Diner in Los Angeles. She goes to that diner. It sounds like a fair amount. And she said, hey, come on our podcast. It's called Hot Pursuit. You can find it on Spotify, Apple Podcasts, or wherever you listen. And yeah, we asked him about the door handles because, you know, Bloomberg Businessweek wrote this story about people having difficulties getting out or first responders, even more concerningly, having difficulties opening doors from the outside after accidents.

33:55And what he told us, and of course he designed everything from the Model S to the Cybertruck, is that their response is a new door opening mechanism where, for example, you push a button, the lighter press opens it electronically. But if the battery is dead and you panic, you push harder and that activates a mechanism that opens it just like a normal door would. Lucid kind of has this in the opposite direction. You pull a little bit and it opens electronically. But if you're panicking, pull harder, it opens mechanically. So it's pretty cool.

34:31Carol Massar:We actually have some of that interview with Tesla's longtime design chief that you and Hannah did. Let's listen in, everybody. We actually have a mechanical release that's, you know, basically right at the electronic one, too. And we're combining the two. So, you know, in the moments that you're in a panic situation, the muscle memory to go to, you know, what you know is right there. So you just pull a little bit further on the lever and you have the mechanical release. So that's something that we're working on. Yeah. And it's in the cars now. All right. So if there is if there is then a China ban, you're ready to roll that out so that.

35:10Well, actually, the ban, I guess, the Chinese issue is the flat outer door handle. So would you do something? Would you make a change? Like, you know, Ferraris have that little crease you can reach into. Is there some idea about that on the outside? Yeah, we're working on it right now and just looking at the details of the regulation, if and when that happens, and we'll have a really good solution for that. I'm not worried about that.

35:40Carol Massar:it makes sense you know i know like it's one thing for us adults to know that but for kids you know it's a little bit different to expect a kid to know how to go for a manual release yeah so the idea of combining the electronic one and the manual one together into one button i think um you know makes a lot of sense it really helps to you know the muscle memory of reaching for something every day um is there and so you intuitively just grab the same thing and and you're free. All right. So that's Franz von Holzhausen, Tesla's longtime design chief, catching up with Hannah Elliott and you. Anything that surprised you in the conversation?

36:18Carol Massar:I love that they're kind of moved pretty quickly. I mean, understanding this is a pretty serious situation. Yeah, it's a serious situation. And not only has Beijing acted with potentially new regulation, at least look into it, but the National Highway Transportation Safety Administration, and NHTSA is also looking into it. Yeah. I thought it was quite cool that rather than reacting defensively, as you might expect, he was like, you know what? Let's just find a sensible solution. He's really focused on sustainability. He's really focused on a better way to travel for more people, for lower income people.

36:58And don't forget, that was the initial idea of this car company. Obviously, they make these luxury vehicles now And we think of them for, you know,$100 ,000 Cybertrucks. But the goal is, or always has been, to fight climate change. And they've always been trying to make a lower-priced vehicle. They kind of achieved that in a Model Y, but they think they can get the price lower. And Franz has been there from the start. So he's really focused on those goals.

37:27Carol Massar:All right, great stuff. And everybody can hear it. He's not German. That was what surprised me the most. What is Swiss? Franz von Holzhausen. What is he? Is not German. He's from Connecticut. Oh, what? From Greenwich? We live in the melting pot, Carol. We love the melting pot. Matthew Miller, thank you so much. Be sure to check out the full conversation that Matt and Hannah had with him. You can find it on his podcast. It's the Hot Pursuit podcast. Catch it on Bloomberg Radio, and of course, wherever you find your own podcasts and you download them. Franz joining Matt and Franz, joining Matt, and that's how you say it in Connecticut.

38:01Matt and Hannah. from the Tesla Robo van. I was, you can see. Oh, is that where he was? Yeah, you can see it. I've never seen an interior that looks like this. It's a, this is a planned futuristic mass, not mass. At the diner? No, I don't know if it was at the diner, but that thing looked like something out of the future. I was like, what is that thing?

38:23Carol Massar:Yeah, it is pretty interesting. So check out the podcast, the video portion too. Yeah, it's also on the Bloomberg and at Bloomberg.com. Check out the story. Stay with us. This more from Bloomberg Business Week Daily coming up after this.

38:38Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. or if my cash balance goes above$20 ,000, move the excess into my direct index. You approve the workflow and your agent handles the rest. Monitoring the market, watching for your conditions and executing your strategies exactly as defined.

39:16An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokerage services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results.

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40:30That's exactly what the people at Optum are trying to do every day. They're a health care company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills.

41:08Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. These days, it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agent's identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta, you'll turn risk into opportunity. Secure every agent.

41:45Secure any agent. Okta secures AI. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app.

41:59Carol Massar:Or watch us live on YouTube. All right, let's get to the most read story on the Bloomberg today. It's been there all day. It's about how, like Fed Governor Lisa Cook, U.S. Treasury Secretary Scott Bessent has made Tim some contradictory mortgage pledges. Secretary Bessent once agreeing to occupy two different houses as his, quote, principal residence at the same time. The story by Anthony Cormier and Zach Meiter. Zach joins us with more on their reporting. Zach is Bloomberg News reporter, Pulitzer Prize winning Bloomberg reporter. He joins us here in our Bloomberg Interactive Brokers Studio. He's just an amazing reporter.

42:31Carol Massar:I like to lay it out for everybody. This story is getting picked up far and wide. Everyone's picking up this story. Tell us about your reporting. What did you find? Sure. So when you saw the president try to fire Lisa Cook, he said, you signed one piece of paper saying you're going to live in Michigan and another promising you're going to live in Georgia. Two different houses at the same time as a condition of getting your mortgage. Like your primary residence, right? Yes. And he's saying, maybe that's fraud. We don't know. But it's enough to fire you. And so we and I think a lot of other people in the press got curious about, well, is she the only person that this has ever happened to?

43:06And by the way, I should mention that she said she's done nothing wrong. And she subsequently, you know, documents have come to light to say at least in one case, the bank was understanding this was going to be a vacation home. So we looked in it turned out that the Treasury Secretary himself had also signed agreed to two different to live in two different places at the same time. And there's the important, important context in your story and what you learned, too, from the reporting as far as who represented the Treasury Secretary in the signing of these documents. Talk a little bit about that.

43:42Sure. So first of all, he didn't sign them himself. He gave power of attorney to a lawyer who signed on his behalf. But the bigger difference is there's really no chance that what Besson did could possibly have been mortgage fraud because both of the mortgages were from the same bank. It was all part of one big deal. It was one lender. So it wasn't like he was tricking one lender into thinking it was his primary residence and then going to a different lender and getting a loan. So how is that different than the allegations against Lisa Cook? cook she refinanced her longtime home in michigan and then she bought a condo in georgia from a different bank a couple weeks later and and and in that mortgage signed a a clause saying she would live there for the next year and she which she had also done in her michigan one now subsequently a document came to light saying showing that in the in the in the atlanta case uh it looks like the bank had the understanding that this was actually going to be a vacation home.

44:42So the question is, well, why did it get papered this way? And you can ask a similar question about Besson. Clearly, the bank didn't expect him to split himself in half and live in both places. And yet the paperwork got filed that way.

44:53Carol Massar:Yeah. He said it, right? That he said that both would be his principal residence. He agreed to both of those mortgages, which both of them obligated him to live in those two different places. I mean, I don't know. I'm assuming, Zach, you and the team are like looking at this, as you said. I mean, we've been talking about this in the newsroom that we're thinking, gosh, you know, didn't the government, when they thought about kind of going after Lisa Cook, think about, hey, anybody else had this situation? What are you finding out as you reported out this story, but just in general? Is this common?

45:27I don't know about common, but, you know, there's another cabinet secretary, the secretary of labor who has kind of a fairly similar, you know, two mortgages, two months apart in two different states where she's pledging to live there for the next year. So it's not super uncommon because we found a few just in looking at the top officials in the government. It's probably not all that rare for people to actually do it because of fraud. But in all of these cases, the people involved or documents we've obtained show that they have at least a pretty good argument that this wasn't fraud at all and that maybe it was just a matter of not filing the paperwork in the right order.

46:11Typically, these things are, everyone signs basically the same mortgage agreement. And then if you have a second home, you sign another thing called the second home rider, which waives that occupancy clause. So if somebody forgets to put that in front of you and to file it, then maybe it just kind of slips through the cracks and no one cares unless you happen to be on the fed board as you and the team ride charles rich had power of attorney to sign secretary scott besson's documents on behalf of him rich who signed the documents wrote that bank of america was fully aware that the provincetown property was not a principal residence and waived any requirement that it be used as a principal resident there was absolutely nothing improper about mr besson's loan applications with which he was minimally involved as he had delegated delegated authority to me so is it the end of the story So just to be clear, our story isn't saying that Besson did anything wrong.

47:02Rather, it's saying that maybe just because these two pieces of paper are filed saying you're going to live in two different places, it doesn't mean that you've necessarily committed mortgage fraud. Clearly, in Besson's case, he didn't. And in a lot of the other cases that we've seen, there's often an innocent explanation that really means that it's more of like a paperwork error.

47:24Carol Massar:Yeah, I do think about that, right? just, you know, getting it wrong, as you said, either not signing something or something not getting done. If you guys have ever been to a closing for a house, you're asked to sign about 10 ,000 pieces of paper. It's like you get your hand gets tired from writing. I don't think there's that many people who've read every single word on every page. I certainly haven't. I mean, when I think of mortgage, I don't know, when you think of mortgage fraud, I think of something nefarious. Yeah, I kind of do like intent. Yeah. Right. Like a plan to kind of deceive either a lender or someone?

47:54I don't think it's that unusual, though, for somebody to buy a vacation home and when they get the mortgage, tell the lender they're going to live there, even if they really won't. That would technically be fraud if they really intended to deceive the lender and get a more favorable interest rate. Right. But we haven't seen that in Besant's case. No. Is there anything we have to understand about the difference between the words principal and primary? The word in the papers is always principal. It's always principal? Yeah. And I think it's just it basically means, you know, this is your real house.

48:28Right. And and no other. Yeah.

48:31Carol Massar:You know, I also think it's different. You know, you guys say how the situations are unidentical. And we've touched on this a little bit, Zach, but like Besson's mortgages two decades ago signed by his lawyer. He obviously was wealthy. There was no concern about his ability probably to manage any kind of loans. And Cook signed hers personally and much more recently. There are distinctions. Oh, there absolutely are. I think the common theme, though, is that if the Trump administration's view is that anyone who signs these documents that conflict with each other needs to be removed from office, then there are actually other people in Washington who are in that same situation.

49:14Even if, and let me be clear, they didn't do anything wrong. and are, you know, not only didn't commit mortgage fraud, but didn't do anything wrong. In Besson's case, probably wasn't even aware of it until we asked questions a few weeks ago.

49:26Carol Massar:I can't help but feel that like there are lots of officials potentially right now looking at things, right? And looking at their documentation. Right. Saying, wait a second, going back and looking. Well, that everybody's looking at it. And you're right. And it doesn't mean that anybody had intent to do something wrong. Is there, does the investigation continue or not even investigation, but you guys continuing to look? The court case is proceeding with Lisa Cook. She's she's contesting her. The Trump's attempt to fire her. She's for for the moment. She's participating with the Fed today. Right.

49:58And and so it's going to be up to the courts to decide. It could it could come down to whether she actually did defraud a lender or not. But it may it may not. And as we heard from Jay Powell today, he will not comment on a court case that's ongoing.

50:14Carol Massar:Yeah, he made it very, very clear. Interesting stories. We said it's the most read story in the Bloomberg. Zach, thank you so much. Thanks. I always appreciate it. Zach Meider, Bloomberg News reporter here. And of course, you can read the entire story. Just head to the Bloomberg or Bloomberg.com. This is the Bloomberg Business Week Daily Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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