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LIVE FROM WASHINGTON, D.C., THIS IS "BALANCE OF POWER" WITH JOE MATHIEU AND KAILEY LEINZ. KAILEY: ONE WEEK AFTER VOTERS MADE THEIR CHOICES, HOUSE REPUBLICANS HAVE TO MAKE THEIRS. WELCOME TO "BALANCE OF POWER" ON BLOOMBERG TV AND RADIO. I AM KAILEY LEINZ IN WASHINGTON, ALONGSIDE TYLER KENDALL TODAY. JOE MATHIEU IS OFF. HOUSE REPUBLICANS WILL BE GATHERING TO DECIDE WHO WILL LEAD THEM IN THE MINORITY. HOURS AFTER THAT, 5:30 P.M.

EASTERN, THEY WILL DECIDE WHETHER TO KILL THE IMPEACHMENT EFFORT AROUND DEFENSE SECRETARY PETE HEGSETH. TYLER: IN A LOT OF WAYS THE CONFLICT IN IRAN IS FRONT AND CENTER. CONSIDERING THERE WAS SO MUCH FOR YOUR ME ON HOW THE ADMINISTRATION HANDLED THE, WE WILL CHECK IN WITH ERIK WASSON LIVE ON CAPITOL HILL. REPUBLICANS ARE TRYING TO FIGURE OUT IF THEY WANT TO KEEP SOME MEMBERS IN LEADERSHIP -- CONGRESSMAN STEVE SCALISE -- FOUR HAVE A NEW PHASE IN JIM JORDAN.

KAILEY: WE WILL SPEAK TO TROY DOWNING OF MONTANA, JOINING US SHORTLY. HE IS A MEMBER OF THE HOUSE FINANCIAL SERVICES COMMITTEE. INTERESTED TO HEAR HIS AGREED ON THE ECONOMIC PICTURE, AFFORDABILITY QUESTION, ESPECIALLY IN LIGHT OF THE HOT INFLATION DATA THIS MORNING SENDING STOCKS DOWN AND YIELDS WAY OUT. THE MARKET IS CONCERNED THAT THE FED WILL BE HIKING RATES IN DECEMBER. TYLER: WE SAW THE FRONT END OF THE YIELD CURVE JUMP, SENSITIVE TO THE SHORT-TERM FED POLICY.

THE NUMBER CAME IN HOTTER THAN EXPECTED. YOU PAIR THAT WITH HAWKISH RHETORIC FROM FED SPEAKERS INCLUDING LORIE LOGAN. WE WILL GET TO THAT WITH LAEL BRAINARD AT THE END OF THE HOUR. WE HAD OVER TO CHARLIE PELLETT AT WORLD HEADQUARTERS. CHARLIE: THANK YOU, TYLER AND KAILEY. DOW, S&P, NASDAQ ALL IN THE RED. GOT TO BEGIN WITH THE TWO-YEAR. CPI TUESDAY, 4.74%. 10-YEAR, 5.00% NOW. CONSUMER PRICE INDEX TAKING OUT FOOD AND ENERGY, UP .3% FROM A MONTH EARLIER.

S&P DOWN 64, A DROP OF .8%. DOW INDUSTRIALS DOWN ALMOST 300 POINTS. DECLINE OF .6%. NASDAQ DOWN 1.4%. NASDAQ 100 INDEX DOWN 1.4%. RUSSELL 2000 INDEX OF SMALL-CAP SHARES LOWER BY PERCENT. BLOOMBERG MAG 7 INDEX DOWN 1.4%. THE PHILADELPHIA SEMICONDUCTOR INDEX DOWN 1.6%. NVIDIA CONTINUES ITS SLUMP. IT IS DOWN 6.1%. 10-YEAR, 5.00%. GOLD DOWN 3%. CRUDE DOWN .6%. BRENT BRIEFLY BELOW 90. THE GLOBAL BENCHMARK DOWN .8%. OIL SELLING OFF.

FOR THE MOST PART, OIL STOCKS LOWER. CHEVRON ALSO DOWN BY .2%. CONOCOPHILLIPS UP .8%. S&P DOWN 69 POINTS, DROP OF .9%. 10-YEAR, 5.01%. KAILEY AND TYLER, THAT IS A BLOOMBERG BUSINESS FLASH. TYLER: ALL RIGHT, CHARLIE PELLETT, THANK YOU SO MUCH. LIVE FROM OLD HEADQUARTERS, AS CHARLIE MEASURED, I AM TYLER KENDALL, ALONG WITH KAILEY LEINZ IN THE NATION'S CAPITAL. WE ARE 30 MINUTES AWAY FROM REPUBLICANS HAVING A CRUCIAL VOTE TO DECIDE THEIR LEADERSHIP BECAUSE, KAILEY, THE QUESTION THE PARTY IS HOW TO MOVE FORWARD AFTER LOSING BOTH OF THEIR MAJORITIES IN CONGRESS.

KAILEY: AND MUSIC AND SIGNIFICANTLY,WHICH IT---LOSING IT SIGNIFICANT, WHICH IS THE QUESTION REPUBLICANS ARE FACING. YOU STICK WITH PEOPLE LEADING THE MAJORITY THAT IS LOST, OR TO GO FOR NEW BLOOD? THAT IS THE NEW BLOOD ARGUMENT THAT JIM JORDAN HAS BEEN MAKING VS. STEVE SCALISE, WHO IS CURRENTLY IN THE CONGRESS, STILL GOING ON HIS LAME-DUCK SESSION, MAJORITY LEADER, AND HAS BEEN A SECOND TO MIKE JOHNSON IN A LOT OF WAYS.

BOTH OF THESE INDIVIDUALS HAVE BEEN SITTING IN THIS CHAMBER SINCE THE BUSH ERA. IT'S BEEN 20 YEARS. THEY ARE VERY WELL-KNOWN ON CAPITOL HILL. DOES THIS EFFECTIVELY SPELLED END, OR THE BEGINNING OF THE END OF THEIR POLITICAL CAREERS? TYLER: THAT IS ONE OF THE MAIN QUESTIONS, AND THEY ARE PITCHING THEMSELVES AS DRINKING DIFFERENT ASPECTS TO--BRINGING DIFFERENT ASPECTS TO ABOUT THE REPUBLICAN CONFERENCE WILL LOOK LIKE. YOU OUTLINED THE MAIN CONCOURSE, BUT STEVE SCALISE IS KNOWN AS A MAJOR FUNDRAISER FOR THE PARTY.

HE HAS WON MANY LEADERSHIP ELECTIONS BEFORE. DO REPUBLICANS WANT TO GO WITH SOMEBODY WHO HAS THE LEADERSHIP EXPERIENCE? OR AS WE LOOK AT WERE DEMOCRATS' PRIORITIES ARE GOING TO BE, AND THEY SPELLED OUT AN ENTIRE ARRAY OF WERE INVESTIGATIONS WILL LEAD, YOU HAVE THE CURVATURE OF THE JUDICIARY COMMITTEE--CURRENT CHAIR OF THE JUDICIARY COMMITTEE, JIM JORDAN, VERY FAMILIAR WITH HOW INVESTIGATIONS WORK. HE WANTS TO MAKE SURE THAT REPUBLICANS ARE WELL-POSITIONED TO MAINTAIN A DEFENSE TO WHAT IS GOING TO BE INCREASED OVERSIGHT.

KAILEY: PITCHING HIMSELF AS THE FIGHTER, BULLDOG AGAINST DEMOCRATS. THERE IS OTHER RACES CONTESTED IN THE HOUSE INCLUDING THE REPUBLICAN CONFERENCE CHAIR SEAT HELD BY CONGRESSWOMAN LISA MCCLAIN.IN THE SENATE , THERE IS EXPECTED TO BE LEADERSHIP ELECTIONS TODAY. SOME SENATORS PUSHED FOR A DELAY OF THOSE THAT MORE CONVERSATION. THE FACT IS THAT JOHN THUNE IS THE ONLY CHOICE. NO ONE HAS STEPPED UP TO CHALLENGE THEM. THE ASSUMPTION IS WHENEVER THIS MOVE HAPPENS, IT WILL BE JOHN THUNE, LEADER OF THE MINORITY COME JANUARY.

TYLER: WE ARE TAKING THAT VOTE TO HAPPEN AT THE TOP OF THE NEXT HOUR, 2:00 P.M. EASTERN. JOHN THUNE RUNNING UNOPPOSED. HOW DOES HE HELP HIS CONFERENCE ROOM AN ERA WHERE PRESIDENT TRUMP SAYS HE WILL NOT SHY AWAY FROM THE VETO POWER? WE ARE STILL LOOKING AT A PARTY THAT WANTS TO GET THROUGH SOME SORT OF LEGISLATIVE PRIORITIES, PERHAPS ON A BIPARTISAN BASIS. LAST NIGHT MAYBE WE SAW ONE SIGN OF THAT WHEN IT COMES TO PERMITTING REFORM.

THAT ENDED UP PASSING THE SENATE, ALTHOUGH IT STILL NEEDS AMENDMENTS TO IT. WE ARE TALKING ABOUT WHAT IS GOING TO HAPPEN IN THE NEW CONGRESS. THERE IS 54 DAYS LEFT OF THIS CONGRESS. KAILEY: 54 DAYS ON THE CALENDAR, 19 LEGISLATIVE DAYS, BECAUSE THEY WILL BE TAKING A LOT OF BREAKS, AS THEY ALWAYS DO IN BETWEEN. WE TURN TO OUR POLITICAL PANEL, RICK DAVIS AND JEANNE SHEEHAN ZAINO. STRATEGIST. JEANNE A DEMOCRAT AND VISITING FELLOW AT HARVARD KENNEDY SCHOOL'S ASH CENTER.

RICK, AS THE REPUBLICAN, I WILL COME TO YOU ON THE CHOICES REPUBLICANS HAVE TO MAKE. IN THE HOUSE, HOW DIFFERENT WILL IT BE GOVERNING IN A MINORITY ALONGSIDE A ROBUST DEMOCRATIC MAJORITY? IF IT WAS STEVE SCULLY'S DOING THAT VS. JIM JORDAN--STEVE SCALISE DOING THAT VS. JIM JORDAN, DO YOU HAVE AN OPINION ON WHO IS BETTER POSITIONED? RICK: TWO TOTALLY DIFFERENT VISIONS OF WHAT TO DO AS A PARTY. NO QUESTION THAT STEVEN SCALIESE REPUBLICAN INPUT OF TRYING TO GET THE LEGISLATION REFLECT MORE GOP VALUES IN EXCHANGE FOR TURNING OVER ROADS WHER--TURNING OVER VOTES WHERE THE CAUCUS MAY HAVE A SHORTAGE OF DEMOCRATS.

JIM JORDAN WOULD DEFINITELY BE MORE COMBATIVE. OPPOSING DEMOCRATIC INITIATIVES WAS ADVERSELY -- VOCIFEROUSLY, TRYING TO USE LEGISLATIVE RULES TO STOP OR SLOW DOWN INITIATIVES PROMOTED BY THE DEMOCRATS, AND REALLY FIGHT IT OUT FOR THE BALANCE OF THE TWO YEARS. THAT IS PART OF THE APPROACH THAT THE NEW MEMBERS WANT TO TAKE A LOOK AT. ARE THEY THERE TO GO INTO BATTLE MODE, OR DO THEY WANT TO GET SOME OF THEIR IDEAS INCORPORATED IN DEMOCRATIC LEGISLATION THAT WOULD HAVE A CHANCE TO GET THROUGH CONGRESS?

I THINK THERE IS A STARK DIFFERENCE. TYLER: JEANNE, TO THE POINT THAT YOU HAVE JIM JORDAN PITCHING HIMSELF AS SOMEBODY WHO COULD BE A BULWARK AGAINST DEMOCRATIC EFFORTS TO LAUNCH OVERSIGHT AND MORE INVESTIGATIONS, WHAT DOES IT SAY TO YOU THAT THERE SEEMS TO BE A MAJOR APPETITE IN THE REPUBLICAN CONFERENCE TO HAVE SOMEBODY THAT IS GOING TO GO UP AGAINST THE INITIATIVES, OR NO MATTER WHAT HAPPENS, IS THERE ANY OPTIMISM THAT WE WOULD BE ABLE TO FIND BIPARTISANSHIP IF DEMOCRATS ARE ABLE TO FOCUS MORE ON POLICY MAKING THAN ON POTENTIAL PROBES?

JEANNE: OH, GOSH, I WISH I WAS ABLE TO BE OPTIMISTIC. BUT I AM NOT FEELING OPTIMISTIC ABOUT BIPARTISANSHIP. I THINK EXACTLY THE WAY THAT RICK DESCRIBE THE DIFFERENCES BETWEEN THESE TWO CHOICES, BOTH OF WHOM HAVE RUN FOR THIS POSITION BEFORE. BUT JIM JORDAN -- THEY ARE BOTH FIGHTERS, BUT JIM JORDAN IS A REAL FIGHTER. AFTER A LOSS THIS BIG, AND WE ARE GOING BACK TO THE 1970'S SINCE WE HAVE SEEN A ROUT LIKE THIS, IS A HARD VOTE FOR REPUBLICANS BECAUSE THEY DO NEED SOMEBODY THAT IS NEW.

WE HAVE SEEN SCALISE, EMMER. THEY WERE IN LEADERSHIP BEFORE. THAT IS A HARD CHOICE. THAT SAID, THEY ALSO HAVE A REALLY GOOD