now i would like to turn to treasury implementation of u.s. sanctions. the secretary also must provide this committee with complete answers today regarding the treasury department's actions to the list companies associated with the russian old guard. he is a criminal and who should not be let off the hook from sanctions that were put in place to punish bad actors. i am very concerned that the agreement the treasury implemented sends exactly the wrong message. other russian oligarchs and putin himself because he was still will do a great deal of influence over his previously sanctioned companies. including at the summit last summer when trump in explicitly cited with putin over his own justice department when the fbi indicted 12 russian intelligence officer for conspiracy to interfere in the 2016 u.s. presidential elections. very troubling it appears that this dynamic may be effecting sanctions policy with the trump administration's treasury department for enabling russian bad actors moreover congress mandated several sanctions to be placed on russia. the

it is important right as a part of treasury's work, the restrictions the treasury does, an important aspect and much of the strength of that comes from being a reserve currency and the u.s. financial system being such a large part of the global financial system and i wonder if you would talk about what threats there might be to that system and architecture of that system coming from our large counter part countries. >> well, it is a tremendous benefit for us to be the reserve currency of the world and it's a tremendous responsibility and that's why when we look at sanctions we have to take into considerations, but sanctions are effective because we are the reserve currency for the world and the u.s. financial system. it is an utmost importance maintaining that status. >> and those policy threat that is might imperil us being the u.s. currency and imperil the system and restrict the system to reach and compete globally, those might adversely impact in the long run the efficacy of these sanctions and the united states being a leader and being able to conduct those operations around the

us to be consistent with the treasury funding the actc , i humbly ask the treasury to do its part to fund the eitc on guam. this is very critical, mr. secretary for a variety of reasons. one of them is the fact that with poverty rates so high on guam, the diversion of general fund coffers in the territory of guam to fund the eitc payouts impacts education and it impacts health and it impacts public safety and those diversions also result in deficits to the territory because we are having to pull other tax resources that would be otherwise to meet our protections. so the time is for us to have the conversation not only have the treasury fund the eitc on guam going forward, but deeply appreciate if the treasury would work with government of guam for all paid out since 2008 so we can recover those funds because it has resulted in deficits. it has resulted in debt. it has resulted in deferred maintenance. we don't even have textbooks in our public schools that are within the reasonable seven-year age of textbooks. there is so many diversions going on and this eitc of 76 million a year ac

ask the treasury is responsible for paying out the eit c, that's correct. >> of the treasury from thebility by diverting funds for education, health or public itsafety cannot. >> the treasury funds everything on a general basis. there is no specific allocations from one program to any other program. >> to reiterate the treasury is responsible for funding the earned income tax credit. >> the treasury is responsible for dispersing the earned income tax credit. the u.s. government is d responsible for hefunding it. >> am glad we have this on the record mr. secretary because i'm a delegate from guam and since 2008 guam has been absorbing 100% of the earned income tax credit payouts that have been filed from our taxpayers and territory. this has actually ballooned to account for over 50% of the annual set-aside rehab for tax reforms altogether. so what i'm really hoping especially tax season in full gear is that we can have the treasury work with the guam department of revenue and taxation to figure out what the earned income tax credit amount the treasury should be paying for the taxpayer

us to be consistent with the treasury funding the actc , i humbly ask the treasury to do its part to fund the eitc on guam. this is very critical, mr. secretary for a variety of reasons. one of them is the fact that with poverty rates so high on guam, the diversion of general fund coffers in the territory of guam to fund the eitc payouts impacts education and it impacts health and it impacts public safety and those diversions also result in deficits to the territory because we are having to pull other tax resources that would be otherwise to meet our protections. so the time is for us to have the conversation not only have the treasury fund the eitc on guam going forward, but deeply appreciate if the treasury would work with government of guam for all paid out since 2008 so we can recover those funds because it has resulted in deficits. it has resulted in debt. it has resulted in deferred maintenance. we don't even have textbooks in our public schools that are within the reasonable seven-year age of textbooks. there is so many diversions going on and this eitc of 76 million a year ac

the treasury department. but in his op-ed piece, former treasury secretary larry somers says the treasury secretary should have absolutely nothing to do with chairman richie neal's demand for the trump tax returns because the treasury secretary years ago specifically delegated this responsibility directly to the commissioner of the irs. larry somers writes the an appropriate response of the treasury secretary is very clear. under a long-standing delegation order, the secretary does not get involved in taxpayer specific matters and has del guyed to the irs commissioners as follows, "the commissioner of internal revenue shall be responsible for the administration and enforcement of the internal revenue laws." moreover, this is not a delegation that is readily revokable. federal law provides that if the secretary determines not to delegate a power such determination may not take effect until 30 days after the secretary notifies the tax writing and other specified committees. so the, so far the secretary to seek

what a week for treasuries.lds coming in 10 basis points on the 2-year, 2.28 on a week where we had a pretty decent gdp print. the nuances are the important part of all this. yields coming low on the 10-year as well. down six basis points. still ahead, the final spread. the spotlight shifting to jay powell. another news conference following an fomc rate decision. that is coming up next. this is bloomberg "real yield." ♪ jonathan: i'm jonathan ferro. this is bloomberg "real yield." it is time for the final spread. coming up over the next week, a busy one. more tech earnings wrapping up with google on monday. apple results on tuesday. trade representative bob lighthizer and steven mnuchin traveling to beijing to resume talks on wednesday. a fed decision and news conference with chairman powell coming up. rates likely to remain on hold for the bank of england on thursday. a busy week for u.s. data concluding with jobs numbers on friday. still with us is matthew hornbeck, greg staples, and iain stealey. let's look a

the treasury very busy through the week. the treasury offering two, five, and seven-year notes.saw pretty solid demand. the $32 billion seven-year auction was awarded a yield of 2.46% with primary dealers receiving the highest shares since october. in corporates, netflix continuing to attract demand, luring another $6 billion in orders in pricing. the 10.5-year dollar securities will yield 5.375% while the euro notes were sold at 3.875%. and finally, automotive seat manufacturer avian priced 7% senior secured bonds together with a new $800 million term loan. it will refinance its existing bank credit facility, another sign capital markets remain supportive for high-yield issuers. matthew hornbach, greg staples, and iain stealey are still with me. i want to begin with you. the high-yield market, still starved for supplies? do you still get the feeling that this is wide open for issuance? iain: i think so. and we saw that in europe this week with very little supply over the course of the year. eight or so deals came about after the easter break. and investors have been snapping th

we just heard the treasury secretary say he will comply with the law.is one of the simplest possible laws anywhere in the tax code, and it simply says that the secretary shall furnish the tax returns. is there any way that you can see of complying with that law tomorrow other than handing over -- having the irs commissioner hand over donald trump's tax returns? >> lawrence, thanks again. pleasure to be with you again. i completely agree with you. the law is really very straightforward and i'm very happy to hear that secretary mnuchin is planning to comply with the law because the law directs him to furnish the information that -- that chairman neal requested. so that's what i anticipate happening tomorrow. >> let's listen to what former treasury secretary larry summers said on this program last night about this. >> it's the essence of the integrity of the tax system that politically appointed officials not be involved in these matters, and that's why there is a delegation to the head of the irs, and it wouldn't have ever occurred to me and wouldn't have

the current treasury department may not know how to handle this issue.treasury secretary larry summers says it's actually quite simple. in a coldly blistering op-ped in "the washington post" today, larry summers writes what he would do were he in secretary mnuchin's position. "for the secretary to seek to decide whether to pass on the president's tax return to congress would surely be inappropriate and probably illegal. i would surely not have done it. rather, i would have indicated to the irs commissioner that i expected the irs to comply with the law as always." joining us now, very pleased to say is lawrence summers, he's the former treasury secretary under president clinton. he's former director of the national economic counsel under president obama. he currently serves as economics professor at harvard university. he also authored this opinion piece in the "washington post" making the case the current treasury secretary shouldn't stop the irs commissioner from releasing president trump's tax returns. secretary summers, thank you for joining us. it's

, but you must be aware that we're a bureau of treasury, and the treasury, you know, supervises us. >> as anybody in the trump administration at any time, including your nominee vetting process, discussed with you how you'd comply or not comply with a congressional request to obtain the president's tax returns? >> no. >> has anyone in or on behalf of the white house directly or indirectly instructed you to not comply with chairman neal's request? >> no. >> will you pledge to inform this committee if anybody in the white house directly or indirectly asks you to not comply with chairman neal's request? >> yes, and i believe the law also provides that anybody in the irs who would get such a request would be required to also advise -- >> i'm just going to move on but i want to make sure you understand you told us in the confirmation process. you told me when we were visiting you were going to resist political pressure. my reading -- and that's why i went through all of the facts -- is that it is your job and yours alone to respond to chairman neal's request, and i hope that will be the ca

, that that's delegated by the treasury secretary.tary is not permitted to casually alter that delegation order, but can only alter it with 30 days' notice to the congressional committee, which has not been given. so i think it's also clear that this is a matter under law that sits with the irs commissioner. i don't see either of those as matters with ambiguity associated with them, and, frankly, the only thing that seems to me clearer than the two propositions i just stated is that it's inappropriate for the white house to be involved in making dictates about how the president's tax return is going to be handled. >> one of the things that emerged today, to that last point, is when secretary mnuchin was answering questions in congress, he conceded that members of his staff at treasury have already consulted with the white house about how they are to respond to this demand from the ways and means chairman. they've already started talking to the white house about this. there seemed to be some lack of clarity in congress, even during tha

jonathan: your view is treasury yields are going lower.atthew: we are at 2.25 by the end of the year. we look at the data this morning , the thing that really jumps out at me, putting the gdp report to the side, is what the university of michigan report was telling us about consumer expectations about long-term inflation. typically, the preliminary report gets revised higher, but but the final report this time didn't. 2.3% as we look on the terminal. this is a low expectation from consumers on inflation. heaven forbid the oil price goes down and breakeven inflation comes off. the fed will be even more worried than today. jonathan: i want to get to a dynamic that has confused a lot of people. treasury yields are coming this week and the dollar strengthened. can you make sense of that? greg: the u.s. is still the high-yielder in the world. now, if you are a levered investor and you need to borrow money to buy something, you are not coming to the u.s. because it cost money to borrow here. but if you are not, if you are a real money investor a

treasury and the treasury supervises us. anyone in the has trump administration discussed with you about thousand comply or not comply with the president's requests to obtain the president's tax returns? mr. rettig: no. senator wyden: has anyone in on or behalf of the white house instructed you not to comply? mr. rettig: no. senator wyden: will you pledge to inform this committee if anyone directly or indirectly asks you not to comply. mr. rettig: yes and anyone who -- anyone in the i.r.s. who was have such a request would to inform you. senator wyden: my reading is that it is your job and yours alone to respond to chairman neal's request and i hope that will be the case. mr. rettig: i believe based on our personal interactions off good read on me as a person and i'll leave it at that senator wyden: ok. i want to ask you about earned income tax credit recipients being more likely to get audited and millionaires being less likely to get audited. you heard me go through the numbers. i think it's shameful that poor folks in hum

just yesterday, we saw gotv, the ishares treasury bond etf investing treasury across the spectrum.ts largest daily inflow ever. more than $600 million. we've seen a lot of interest in tlt. meanwhile, we are seeing money continue to really rush out of the likes of stip. that is zero to five year bond etf's. when you look at where the flows are going, it seems like the investors truly believe that rates are going to stay lower for longer, that the fed is on hold and maybe we will get a rate cut. eric: you are a behavioral psychologist. we look at the bond etf's that betterman holds. they are kind of all over the map. short-term, long-term, medium-term. do those shift at all? the fed but everybody on this wild, sort of shift. do you change this at all? how does this shift with the fed in mind? dan: i have a saying if you want to make god laugh, try to get -- time the bond market. we don't change anything, however it does impact the advice we give to client. the risk curve is something you can infer. it tells you what the market thinks interest rates will do over time. we think risky r

so the treasury secretary can make a determination or the irs commissioner and treasury department canthis. >> no. no, it says shall. >> that's on congress, chris. procedurally, then it's on congress to hold them in contempt. >> did you just say that line through gritted teeth, jimmy? did you just say something through gritted teeth? >> no, i was just finishing. it's up to congress to hold them in contempt and go to the d.c. courts after the fact to actually hold them in contempt and ask for relief seeking to produce those documents. >> but wait a minute -- >> then a court gets involved. >> elliot. >> the president doesn't need to go at this point in time to protect those documents. it's a decision that the treasury department can make. >> all right. jimmy -- >> they have an argument to be made. >> jimmy, i hear you. don't filibuster. one point at a time, jimmy. one point at a time. jimmy, one point at a time. elliot -- >> yeah, all right. >> that is not how litigation works when you don't like the operation of a statute. the irs gets to figure out whether or not they want to comply. w

the treasury very busy through the week. offering to, 5, 7-your notes.hey $32 billion seven-your auction was awarded with 2.46% with primary dealers receiving the highest shares since october. netflix attracting demand, luring another $6 million in pricing. the 10.5-year dollar securities while the euro5% notes were sold at 3.875%. automotive seat manufacturer avian price 7% senior secured bonds together with a $800 million term loan. it will refinance is is this thing that credit facility, another sign capital markets remain supportive for high-yield issuers. matthew hornbeck, greg sta ples, and iain stealey are still with me. do you still get the feeling that this is wide open for issuance? iain: i think so. we saw that in europe. very little supply over the course of the year. came about after the easter break. investors have been snapping them up. there has been a thirst for supply, cash on the sidelines. people came into the are slightly defensive. i think supply can come. the good news from the european was fornt, a lot of it refinancing, so we are

the treasury secretary does not comply, they will issue a subpoena or institute litigation.cannot be the case that the president or the administration refuses to comply with the law, simply because they don't want to. the committee will uphold the rule of law and will insist on getting those returns, so they can do their work, the work of the committee. >> you just heard the latest from the speaker, nancy pelosi, saying they're not yet ready to begin the process of impeachment proceedings in the house of representatives. what's your reaction? >> well, you know, wolf, i read the entire mueller report and all of the appendices. i think first and foremost, it confirms what we knew, that the russians in a very sophisticated, broad campaign attacked our democracy with an attempt to help donald trump and hurt hillary clinton. it certainly then in the second volume details acts, which constitute obstruction of justice. we know that's an impeachable offense. but our work has really just begun. now we have that report, we need the balance of the report. the stuff that has been kept s

i will refer you to the secretary of treasury about that. he is under audit. he has submitted hundreds of pages. you know the argument. one thing i want to say is echo the secretary of the treasury. my good friend, steve mnuchin. this administration has no intention to weaponize the irs the way the nixon administration did. and all of this looks too political for us. i will leave it there and refer you to the treasury secretary. that is all i have on that. no, you may not. i have nothing else to say to -- on the matter. i refer to the treasury department. the republican tax plan that passed has a perception problem. americans don't like it. why do you think that is the case? mr. kudlow: i don't know. here is the deal. poll after poll, almost 60% -- i need the umbrella. it is starting to really poor. -- pour. the wall street journal, nbc, the harvard poll, all show tremendous approval of the economy. taxes are a means towards that end. the tax debate, i don't know. i think at the end of the day you have a very prosperous america with low unemployment. blue-coll

because the request goes to treasury. to treasury to decide if the tax returns should or should not be released. and so any well-meaning person could, should deduce why is treasury talking to the white house? why? what do they need to coordinate about? do they need to ask the white house what they're doing? why? why? i don't know. that's why they had the hearing today. we didn't get any answers today. tell us why, aaron. >> secretary mnuchin was very measured in his response. he was very precise in his language. and he talked about conversations between lawyers, the treasury lawyers and the white house counsel. >> not a conversation he had with the president. >> it wasn't the president and secretary mnuchin discussing the strategy on the release of his returns. it was two sets of lawyers talking about how it was going to be done, not out of the ordinary. >> so, there were some moments today, mark. >> that's an understatement. >> between the chairwoman, maxine waters and mnuchin, on him wanting to leave by the time they sa

counsel of the treasury. attorney general william barr, irs commissioner charles reddick might all be staring at donald trump's lawyer's letter tonight right now trying to see if there is any legal hook they can possibly hold onto as an excuse for not complying with very clear law, or they might not. they might all be honorable men who happen to be appointed by donald trump who take their oaths of office very seriously ask recognize that the president's lawyers letter is a legal joke to be dismissed as soon as they read it. maybe. the lawyer's letter says requests for tax returns and return information must have a legitimate legislative purpose. chairman neil's letter demanding the tax returns says consistent with its authority the committee is considering legislative proposals and conducting oversight related to our federal tax laws including but not limited to the extent to which the irs audits and enforces the federal tax laws against a president. it is necessary for the committee to determine the scope of

treasury secretary steve mnuchin revealed today that white house lawyers consulted with the treasuryartment about the president's tax returns before house democrats formally requested those records. >> this marks the first time we are hearing that the white house could be playing a role in the treasury department's decision to release donald trump's taxes despite a law that is meant to limit political involvement. here's what steve mnuchin said earlier -- >> our legal department has had conversations prior to receiving the letter with the white house general counsel. >> and did they brief you as to the contents of that communication? >> they have not briefed me to the contents of that communication. i believe that was purely informational. >> you believe what was purely informational? >> i believe that the communication between our legal department and the white house general counsel was informational, that we obviously had read in the press, that we were expecting this. >> quick asterisk, before being named treasury secretary, steve mnuchin was the finance chair of president donald

treasury. -- that hasmon come in.hether headlines from north ,orea, that could be a pullback we still have the china trade ,ssue, brexit is still there there are a lot of issues still keeping these yields lower. we have to be careful. we have seen huge inflows into investment grade and munis over the last couple weeks. people like to go in when yields are low. you have to position yourself properly so if we see yields go higher, you are prepared. jonathan: let's talk about one of those risks. china improves as the year goes older. they keep pushing stimulus. the nature of stimulus has changed. i wonder because the nature of the stimulus has shifted, if the degree of the spillover has changed? take the eurozone pmi. some people take comfort that in germany it will take a while to get there. what if it does not get there at all because the stimulus china has put into the economy will not be enough to get the degree of spillover we are used to? gershon: you touched on everything we've talked about. what does it all mean

treasury yields, from everywhere else?riya: even though we are not looking for the economy to slow down, we're looking for over 2% gdp. if the 10 year in europe is stuck around zero, how high can the spread go? if the front end is going to be anchored around 2.40, i think the long end for the 10 year will struggle to go above 2.75. jonathan: victoria, i want your view. you can be constructive on the economy. it does not mean you are as bearish on treasuries, does it? victoria: there are uncertainties. they are out there. we are not looking through rose-colored glasses. there are things keeping rates lower. besides the fed saying they are on pause, you do have the global issues pulling things down. look at the spread between bunds and u.s. treasury. that has come in a little bit, we were at 250 last week and we are at 235 now. that has come in. there are going to be uncertainties, whether headlines from north korea, that could be a pullback, we still have the china trade issue, brexit is still there, we don't know if we wil

>> john paley, assistant secretary of the treasury. josiah dubose. randolph paul, general counsel of treasury. these are major figures in this history. thanks. >> commissioner? >> thank you, madam chair. you mentioned a lot of executive branch individuals involved in this. what, if any, individuals in congress could you highlight as being advocates for greater refugee influx, doing anything? were there factions in congress? it was notably absent from much of the discussion we had. you would think there might be more involvement from the legislative branch. >> sure. i talked earlier today about a bill for child refugees sponsored by robert wegner, democrat from new york, and edith north rogers, republican from massachusetts. that effort is bipartisan. emmanuel seller, a democrat from brooklyn, is a constant voice on behalf of refugees. amuel dickstein as well, also new york democrat. thenuel seller is, hart-seller act that replaces the johnson-reed immigration ler, is after emmanuel sel 20 years after the holocaust finally overturning the immigration

the treasury lawyers.e lawyers than you can possibly count all to advise on be whether shall still means shall. >> it's a simple one-sentence piece of the tax code. it's one of the -- i mean, congressman doggett, you and i have read and you've written a lot of this tax code. much of it unintelligible to civilians. this is not one of those. it simply says that the section 6103 simply says that this information shall be furnished to the chairman any information about tax returns and underlying documents involving tax returns to the chairman's demands. go ahead. >> well, exactly. you've noted the well reasoned well crafted letter that chairman neal sent. and i think the fact that all these lawyers are involved and all this delay and ditering that is occurring raises questions as to why is and if president trump is being audited, whether his lawyers are trying to intimidate the internal revenue service into not doing its job, whether the internal revenue service has in mind a blessing to trump of the type deca

the treasury department is favoring a yes and approach. we can win the war, we can administer humanitarian aid and try to rescue all. -- rescue people. the treasury department wins out in that debate in 1944 in that is why the u.s. has a rescue -- most of those people who were saved had no idea the u.s. government was behind any of that work. moment where the takes the turn, where the treasury department starts to win the argument. it's a really interesting moment in american history. we can diverge resources. our actions can match our rhetoric about democratic values. ever -- i apologize for asking too many questions again. what was the turning point that got treasury to win? there's a couple things in play. there's a resolution in congress : four rescue response. there are activist advocating. there is an orthodox rabbi march on washington. and then the treasury department lays out a case against the state department, a case they have been deliberately delaying humanitarian aid that could be helping people. they have been saying we could

the treasury department is just responding. let's go "out front." good evening, i'm erin burnest.t front" tonight a stunning claim from the attorney general bill barr. he said he thinks the obama administration spied on the

he is addressing it to the treasury department, the counsel at the treasury department. he makes a reference to asking the treasury department to wait until the justice department basically tells them what to do. what's your reaction to that part of it? >> well, i don't really see any fwrounds for that at all. again, the law is very clear, and i thought that chairman neal's request was actually very smart also in that it was quite targeted. so, you know, there is a limited amount of information that's being requested, and i would think that depending on how difficult it is to assemble it, it could be forwarded fairly quickly. i don't really see the need for the justice department interpretation. the law is really pretty straightforward. >> and congressman gomez, the president has always said as a campaigner and he still says you can't see my tax returns because they are being audited. we don't know if that was ever true when he was a candidate, but it is true that the president's tax returns are routinely automatically audited by the irs, but barack obama as president di