Trump Attacks Fed Hike, Suggests Tariffs on Europe

0:02Speaker 1:Bloomberg Audio Studios, podcasts, radio, news. Good morning, I'm Nathan Hager.

0:11Speaker 2:And I'm Karen Moscow. Here are the stories we're following today.

0:16Speaker 1:Karen, President Trump is criticizing the Fed for deciding to raise interest rates to a range of three and three quarters to four percent. It was a unanimous quarter point hike, the first Fed's increase in borrowing costs in more than three years. The president spoke to reporters about chair Kevin Warsh and the decision.

0:35Speaker 3:I'm relying on Kevin, but he's got, you know, a very tough board. He's got a board that was put there by a lot of other people. And the interest rates are too high. They're not appropriate. And I told I talked to Kevin and I said, you might as well vote with the board because it's not going to matter.

0:52Speaker 1:President Trump went on to say rates should be at one percent or lower.

0:55Speaker 2:Kevin Warsh, Nathan, President Trump's pick to lead the Fed, was sworn in less than four months ago. He defied many skeptics with the rate hike.

1:03Speaker 4:The labor side of the Fed's congressional remit is in good shape. Yet for more than five years, inflation has been running above target. So our predominant focus is on the price stability side of our mandate. The plain fact is that inflation is too high and has been for too long.

1:25Speaker 2:Traders quickly priced in additional rate increases from Warsh and his colleagues and pushed down their expectations for inflation in coming years. We got this reaction from former Fed regional presidents James Bullard and Patrick Harker.

1:38Speaker 5:I think this is a pretty good outcome for the Fed. You know, they got their interest rate increase in, which I think was appropriate. Yeah, three more sounds a little high compared to what the committee seemed to be saying. They probably want to see more data before they commit to that.

1:54Speaker 2:And former Fed regional presidents James Bullard and Patrick Harker reacting to the Fed's rate hikes. Traders are pricing in more than a 50 percent chance of a hike at the central bank's next meeting in late October. King Charles is preparing to host the world's leading tech executives today. at a royal event in Scotland. And AI, it's going to be the big topic. Tom McKenzie is covering the meeting in Glasgow.

2:17Speaker 6:This is quite telling, isn't it, that it falls to King Charles III to try to cajole and browbeat these AI executives into committing that they will build this technology in a way, the king says, that benefits all people. He was also pointing out he wants to see this AI technology to ensure that it's not just ecologically sustainable, but interestingly, I thought as well, economically. It seems that this is a king, this is a monarch, this is a palace that wants to use its leverage to bring these executives together to see if there's some kind of consensus that can be formed.

2:48Speaker 2:Bloomberg's Tom McKenzie in Glasgow says NVIDIA CEO Jensen Wang, OpenAI's chief financial officer Sarah Fryer, and Google DeepMind co-founder Demis Hassabis are attending the event.

3:00Speaker 1:And here in the U.S., Karen, OpenAI CEO Sam Altman will be on the guest list when President Trump hosts China's Xi Jinping for a White House state dinner next week. OpenAI confirmed that to Bloomberg News, and a source says former Apple CEO Tim Cook will be there as well, along with NVIDIA's Jensen Wang. The gathering comes as lawmakers debate whether and how to add guardrails to artificial intelligence. Republican Congressman Mike Lawler of New York says there needs to be a whole-of-government approach to regulate AI.

3:28Speaker 7:We want to have standards across the board that all of these AI companies are abiding by to make sure that you don't have a situation of hacking or cyber attacks. and also so that we are prepared in dealing with China, because China's not going to abide by the rules of the road.

3:45Speaker 1:New York Republican Mike Lawler appeared on Bloomberg's Balance of Power. President Trump has blasted existential fears about AI as a hoax. He said the U.S. needs to maintain its technological edge over China. At the same time, he says he has a great relationship with President Xi.

4:00Speaker 2:Now to the latest from the Middle East, Nathan. Crude oil, it's falling as Saudi Arabia races to get a key pipeline back online after recent attacks. Sources say the East-West pipeline could be back to about half capacity within days and full operation is expected in six weeks. Bloomberg Middle East News Director Will Kennedy has more.

4:19Speaker 8:People had been very worried that this crucial pipeline, which has been a really important benefit during the Hormuz crisis because it allows Saudi Arabia to shift oil exports from the Persian Gulf to the Red Sea, would be out of action for several weeks. If they can get it online and half of it online, that would be several million barrels a day. Much quicker, that will be some salve to the market, although it doesn't solve the whole problem.

4:44Speaker 2:MS Bloomberg's Will Kennedy. Axios is reporting President Trump plans to meet with Persian Gulf leaders next Tuesday on the sidelines of the U.N. General Assembly in New York to discuss the next steps in the Iran war. Checking oil prices right now, Brent, it is down 1.3 percent at $ 104.

4:58Speaker 9:44 a barrel.

4:59Speaker 2:West Texas Intermediate at $ 101. 43. And prices at the pump are rising. AAA's latest average for regular unleaded, it's up to $ 4. 44 a gallon. That's more than seven cents higher than yesterday. And diesel, it's hit a new record, almost $ 6. 40 a gallon.

5:20Speaker 1:Now to the latest on the trade front, Karen. President Trump is floating new tariffs on imports from the European Union if he deems that blocks relationship with Canada harmful to the U.S., The news comes after European Commission President Ursula von der Leyen proposed Canada becoming the EU's first associate member during yesterday's State of the Union address. President Trump says that news could have trade implications.

5:43Speaker 3:Canada's been a terrible trade partner, and no, I don't see that. And if they do that, if I think it's at all a hostile act, I will put very serious tariffs or stop trading with Europe. on many things.

5:58Speaker 1:President Trump imposed 50% tariffs on $ 20 billion of Canadian goods after trade talks collapsed last month.

6:05Speaker 2:Well, Nathan, President Trump made his latest comments as he headed back out on the campaign trail in Gastonia, North Carolina, to boost Republican Senate candidate Michael Watley.

6:14Speaker 3:If we lose, you're going to lose your border, you're going to lose your tax cuts, you're going to lose your wealth, and our country is going to go through hell. and we're going to be a laughingstock all.

6:25Speaker 9:Over the world.

6:26Speaker 2:President Trump's trip is the kickoff of what he's called a nationwide sprint to election day. The latest polling average from Real Clear Politics shows Whatley trailing his Democratic opponent, former Governor Roy Cooper, by nearly eight points in the race to replace retiring Republican Senator Tom Tillis.

6:44Speaker 1:Like in Washington, Karen, the House is out for a nearly two-month recess ahead of the midterms. But before they left, lawmakers passed a major new sanctions package against.

6:54Speaker 2:On this vote, the yeas are 262, the nays are 159.

6:57Speaker 10:The motion is adopted.

7:00Speaker 1:The measure, sponsored by the late Senator Lindsey Graham, gives the president new powers to impose 100 percent tariffs on the top purchasers of Russian energy, including China, India and Turkey. House Speaker Mike Johnson says it'll put more pressure on Russian President Vladimir Putin.

7:15Speaker 4:It's the most significant international action taken so far in to bring the unjust war to an end over there.

7:21Speaker 1:That's House Speaker Mike Johnson. But business groups and some Democrats opposed the measure. House Foreign Affairs Ranking Democrat Gregory Meek says the bill will make America's affordability crisis worse by allowing more tariffs on U.S.

7:33Speaker 11:Allies.

7:36Speaker 2:Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning.

7:44Speaker 11:Good morning, Karen. Democratic Congresswoman Joyce Beatty asked for an emergency court hearing into the closure of the Kennedy Center, suggesting the move may violate a court order against an earlier attempt to shutter the venue. Beatty said the Kennedy Center's board decision to physically shutter the facility may be violating the clear and unambiguous order of the court. While on his way to North Carolina last night, President Trump suggested that he has owed his name on the Kennedy Center building due to the money he claims he has raised towards its repairs.

8:18Speaker 3:I think that the Trump administration should certainly have recognition because, frankly, if we don't do that, it's going to close. It'll end up being ripped down. It's in very, very bad shape, very dangerous shape.

8:30Speaker 11:Congress has already earmarked $ 257 million for renovations for the Kennedy Center. In Los Angeles, the NTSB says they are working to analyze the wreckage after an MVC-4 helicopter crashed, killing a news reporter, the pilot, and one on the ground. The aircraft went down while covering a car and bus crash that also left at least two others dead. The NTSB's Fabian Salazar says they hope to gain some insight into a possible cause of the crash in a video captured by the reporter inside the cockpit as the chopper went down.

9:04Speaker 9:In that recording, we are clearly hearing sounds that are consistent with the engine changing its speed. And we're also hearing tones that are being generated that are likely advisories to the pilot.

9:18Speaker 11:The helicopter was operated by Angel City Air. U.S. prosecutors allege a former Russian military officer offered $ 25, 000 to a U.S. citizen to track and kill someone in Lithuania's capital who was, quote, telling lies about Russia. The Justice Department has unsealed charges against five people working for Russia's intelligence services to conduct attacks and killings in Europe and the U.S. The allegations detail Russia's expanding campaign of hybrid attacks against European nations that supply weapons and money to Ukraine. Global news 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen.

9:57Speaker 2:Thanks, Michael. Time now for our Bloomberg News. Sports Update. And for that, we bring in John Stashower.

10:03Speaker 3:Thanks, Karen.

10:03Speaker 12:The Buffalo Bills play at the same stadium for 53 years. Tonight, they'll play at their new one, Highmark Stadium, which cost $ 2. 2 billion to build. It's the Bills and the Lions to kick off Week 2. No Sam Darnold Sunday for Seattle against Arizona. He's got the hip injury suffered yesterday. In the season opener, the Seahawks will start Drew Locke at quarterback. Big college game Saturday, LSU against Ole Miss. Lane Kiffin against his old team. The LSU quarterback, Sam Leavitt, listed as doubtful. That's your Bloomberg Sports Update.

10:35Speaker 2:Stay with us. More from Bloomberg Daybreak coming up after this.

10:43Speaker 10:Coast to coast on Bloomberg Radio.

10:45Speaker 11:Nationwide on Sirius XM.

10:47Speaker 1:And around the world on Bloomberg.com and the Bloomberg Business App.

10:52Speaker 10:This is Bloomberg Daybreak.

10:53Speaker 11:Good morning. I'm Nathan Hager.

10:55Speaker 1:Well, it might not have been what the president wanted, but the Fed delivered the quarter percent rate hike it's been expecting with inflation still elevated and energy prices on the rise. Fed Chair Kevin Warsh puts it simply, inflation has been too high for too long.

11:08Speaker 4:Today's policy action will support a timelier return to the committee's 2% goal. This committee will deliver price stability.

11:17Speaker 1:This is Fed Chair Kevin Warsh at the Post Decision News Conference. You heard live on Bloomberg Radio. Joining us now is Jennifer Lee, Senior Economist at BMO Capital Markets. So, Jen, the hike was expected. Was it as hawkish as you expected?

11:31Speaker 11:Good morning.

11:32Speaker 10:Good morning, thanks for having me on. And I'm going to say the answer is yes. And just the fact, I had three big takeaways, or the three big things that shocked me. Number one, that it was unanimous. And I remember I called out right away, someone check Truth Social. And the second little bit of surprise was that the press release was so short for such a big announcement. And of course, the 30-minute press conference, which is about half of the usual time. Those are the three big surprises that came to me. But overall, certainly a lot more hawkishness. Again, the fact that it was a unanimous vote.

12:09Speaker 10:And some of the comments which the Fed chair gave, a lot of it was like a repeat of what he said back in Jackson Hole. But he hasn't swayed from that at all. So it sounds like we do have one more hike to come before the end.

12:21Speaker 2:Of the year.

12:22Speaker 1:Certainly what we're seeing in the dot plot, at least as far as the averages go. In terms of that unanimity, do you expect that to continue as we head further along?

12:32Speaker 10:I'm going to say yes. But of course, a lot of this is going to depend on what happens with the war in Iran, how long the straightforward moves will be shut down for. Because I think that's been the overriding factor for inflation, not just for the Federal Reserve, for all the central banks around the world, except for maybe Brazil who cut rates last night. But it's all about energy prices and about inflation expectations and putting a damper on inflation expectations. If that comes to an end, then before the end of the year, then we may see some stepping back from various voters. But right now, as it stands, I wouldn't be surprised if we have another unanimous vote in December.

13:10Speaker 1:You've been calling out energy prices a couple of times there. Does this look to you like a data-dependent Fed still, or was this a case of the market moving the Fed in this direction, given the pricing that we saw before the decision?

13:25Speaker 10:I don't think the Federal Reserve, as independent as they are with everything, I don't think they can ignore completely what the market is saying. And again, it was oil prices, it was the CPI report, which even Chris Waller had said that that August CPI report was going to be the one that he was going to base his September decision on. So there is data obviously involved in what the Fed is saying, even though the Fed chair yesterday said that he wasn't, I think he said, quote, I'm not a data dependent kind of guy.

13:58Speaker 1:So in our last 30 seconds here, October, is it live?

14:03Speaker 10:You know, that's a tough one. You know, I think every meeting is going to be live. But I think the Federal Reserve probably will want to wait a little bit more to get some more data to see what's going to happen before they move again in December. Things have to go wrong really quickly on the oil front. And the data have to be uber, uber strong, I think, to see another rate hike coming in October. And the dot plots are also saying only one more hike before the end of the year.

14:29Speaker 2:This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

14:36Speaker 1:Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen.

14:42Speaker 2:You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

14:57Speaker 1:Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces.

15:03Speaker 2:And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow.

15:16Speaker 1:And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.