Fed Served With DOJ Subpoenas; Iran Says Protests Quelled After Hundreds Reported Killed

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning, I'm Nathan Hager and I'm Karen Moscow. Here
are the stories we're following today.
Karen, we begin with an escalation in the feud between
President Donald Trump and FED Chair j Powell. This time
the Justice Department is involved. Bloomberg's John Tucker joins us
with the very latest, John and Nathan.
Federal Reserve Chair Jerome Pal s as the US Central
Bank has been served grand jury subpoenas from the Justice Department,
threatening a criminal indictment. Pal made the announcement in an
extraordinary video statement released last night.
This unprecedented action should be seen in the broader context
of the administration's threats and ongoing pressure.
The Trump administration last summer ramped up scrutiny at the
feds renovation of two buildings and rising costs associated with
the projects. But Powell says this is just pretext to
end FED independence.
The threat of criminal charges is a consequence of the
Federal Reserve setting interest rates based on our best assessment
of what will serve the public, rather than following the
preferences of the President.
In an interview with NBC News on Sunday, President Trump
denied having any knowledge of the DOJ's investigation into the
Central Bank. The President has repeatedly called for aggressive rate
cuts and has repeatedly mused about firing Pale. At the
end of last year, Trump said he was considering what
he called a gross incompetence lawsuit against Powell. In another
extraordinary staff he sought to fire FED Governor Lisa Cook,
where the Supreme Court is sent to take up the
Cook case later this month in New York, Coome John
Tucker Bloomberg.
Radio, All right, John, thank you well. Bloomberg News has
learned Federal Housing Finance Agency Director Bill Poulte was a
driving force behind the Trump administration's decision to subpoena the
Federal Reserve Balty has been a vocal force within the
administration investigating Trump's foes for mortgage fraud. He also submitted
a criminal referral to the Jay about FED Governor Lisa
Cook that is at the root of Trump's push to
fire her. The latest FED subpoena has drawn criticism from
Democrats like Massachusetts Senator Elizabeth Warren and Republican Senator Tom
Tillis of North Carolina. Tillis says he will oppose the
confirmation of any nominee for the FED until the legal
matter is fully resolved on Nathan Cel. America's sentiment is
sweeping through markets today after the Trump administration escalated its
attacks on the federal reserve. The dollar, treasuries, and US
equity futures are all sliding in early trading. The selloff
revives debate over just how far the President Kennon should
influence the nation's rate stance, which in recent decades has
been insulated from political interference so as to ensure price stability.
Gold and silver, in turn, are trading at record highs
this morning.
There's some geopolitical tensions to follow this morning as well.
Karen Iron's foreign minister says security forces have quote full
control of the country after two weeks of ongoing upheaval.
Activists say at least five hundred and forty people have
been killed so far in the latest waves of protests
in Iran. President Trump says he is closely monitoring the
protests and considering potential military options.
We're looking at it very seriously.
The military is looking at it, and we're looking at
some very strong options.
The president added.
The regime's leaders have contacted the US for negotiations. Iran's
parliament speaker, Mohammed Bager Khalibov, had this warning for the
US if it chooses to strike in.
Given your explicit admissions regarding your intention to carry out
military aggression against Iran within the framework of legitimate self defense,
we do not consider ourselves limited to reacting only after
an attack occurs, and we will act based on concrete
indications of threats.
It was Iran's parliament speaker, speaking through an interpreter. Communications
in Iran remain largely cut off and that has made
it difficult to track the full scope of the protest movement.
Well, Nathan, we want to turn out to new developments
involving Greenland. Danish broadcaster tvqu who says top diplomats from
Denmark and Greenland will meet Secretary of State Marco Rubio
in Washington on Wednesday. Denmark is banking on the meeting
to defuse President Trump's renewed push on Greenland. The President
insists ownership of the island is a key issue.
Book If we don't take Gleenland Russia, what China will
And I'm not letting that happen. If we don't take
Gleenland Russia, what China will take Greenland?
And I am not going to let that happen.
Yeah.
Sure, I'd looked at it and make a deal with
them that's easier. But one way or the other, we're
going to have Greenland.
May while Bloomberg News has learned a group of European countries,
led by the UK and Germany, as discussing plans for
a military presence in Greenland.
Meanwhile, Karen, President Trump is signaling he is leaning toward
excluding Exon mobil from his push for US oil majors
to rebuild Venezuela's petroleum industry. The President says he's displeased
with the company's response to his initiative viving oil and
then dooing years of under investment and mismanagement in Venezuela
would buy some estimates, require one hundred billion dollars and
take a decade.
Well back here, nathantentions are made high in Minneapolis days after,
and immigration and Customs enforcement officers shot and killed a
woman drive during a tense confrontation in her car. Now,
Homeland Security Secretary Christie Nomes says even more federal agents
are headed to the city.
We're sending more officers today and tomorrow they'll arrive. There'll
be hundreds more, and in order to allow our Ice
and our Border patrol individuals that are working in Minneapolis
to do so safely.
Homeland Security Secretary Christie Nome appeared on the Fox News
programs Sunday Morning Futures. But the debate continues over whether
ICE agent Jonathan Ross was justified in shooting Renee Good,
with multiple videos of the incident adding to the fearer.
Democratic Senator Tina Smith Minnesota is saying that federal investigators
need to work with state and local law enforcement.
We need to have a free, fair and unbiased investigation
so we can gather all of the evidence and all
of the information and we can know exactly what's happening.
And what I think is going on here is the
administration does not want that to happen, and that looks
to me like a cover up.
Minnesota Democrat Unis Smith appeared on ABC's This Week Heard
Every Sunday on Bloomberg Radio.
Turning back to Markets Now, Karen, besides fed pressure, investors
have another thing to focus on this week, bank earnings
let's get a preview of that from Bloomberg's Charlie Pellett.
The results from the nation's biggest banks will give us
the first glimpse into how Wall Street navigated the last
months of twenty twenty five amid President Trump's trade wars
and ongoing geopolitical tensions. Betsy Graysia is Global head of
Banks at Morgan Stanley.
Our setup is positive for Tuesday kickoff, and what I
think matters is both the outlook here for earnings as
well as the pent up backlog building in the capital markets.
JP Morgan Chase reports Tuesday. City Group, Bank of American,
Wells Fargo all report on Wednesday in New York. Charlie
Pellett Bloomberg Radio.
All right, Charlie, thank you. Credit Card Company is falling
in early trading. The drop comes after President Trump said
that credit card lenders would be in violation of the
law if they do not heed his call to cap
interest rates at ten percent for one year. Right now,
Capital One and Synchrone Financial are both down about nine percent,
and American Express is down more than four percent.
Walmart Karen is up more than three and a half percent.
The retail giant's getting ready to join the NASDAQ one
hundred index, replacing Astra Zeneca. The change takes effect before
the market opens January twentieth. Walmart's edition follows its move
last year to shift its stock listing from the New
York Stock Exchange to the Nasdaq.
And in Europe, Nathan Heinegan looking for a new boss.
CEO Dolph benden Brink is stepping down after six years
at the Helm of the Brewer. The move comes months
after the company warn't on profit overfalling beer sale. Time
now for look at some of the other stories making
news in New York and around the world, and for
never joined by Bloomberg's Michael Barr Michael, good morning.
Good morning Karen. About sixteen thousand nurses at New York
City hospitals are set to strike any moment now. If
the union does not reach a contract agreement with private
hospitals soon, it would be considered the largest nurses strike
in city history. Their contract expired December thirty first, The union,
the New York State Nurses Association, is still in talks
with those private hospitals. They want higher pay and safer
working conditions. It comes as flu cases are spiking In
New York, Governor Kathy Hochele has declared a state of
emergency ahead of the potential strike, pleading with both sides
to stay at the table.
This could jeopardize the lives of thousands of New Yorkers
and patients.
Forty two states, including New York, are seeing high or
very high levels of flu activity. A plan protest in Westwood, California,
by Los Angeles' Iranian community was disrupted Sunday afternoon when
a U haul truck drove into the crowd. After running
to get out of the way, people went after the driver,
dragging him out of the cab of the box truck.
LAPD Captain Richard Galbadon was asked about charges against the driver.
It's an open traffic investigation.
We're looking a possible assault with the daily weapon, the
daily weapon being the vehicle of being used.
But that's all going right now, Captain Galbadon says. The
driver's identity has not been released and is being treated
at a local hospital for injuries. Paul Thomas Anderson's Ragtag
revolutionary saga One Battle after Another and the Shakespeare drama
Hamnet took top honors at Sunday's eighty third Golden Globes,
Anderson became just the second filmmaker in Golden Globes history
to ever sweet Best Film, Best Director, and Best Screenplay.
Only Oliver Stone were born on the fourth of July nine,
is the same feet Timothy Chalamay won his first Golden
Globe for Marty Supreme.
My dad instilled in me a spirit of gratitude growing up.
Always be grateful for what you have. It's allowed me
to leave the ceremony in the past empty handed, my
head held high, grateful just to be here. But I'd
be lying if I didn't say those moments didn't make
this moment that much sweeter.
Centners won for Best Score in Cinematic and Box Office Achievement.
The ceremony was broadcast on CBS Global News twenty four
hours a day and whenever you want it with Bloomberg News. Now.
I'm Michael Barr, and this is Bloomberg Karen.
Thanks Michael all the time. Now for our Bloomberg Sports Update,
and for that we bring in John Stashauer.
Thanks Daring.
The NFL playoff tripleheader begin in Jacksonville. The Bills and
Jaguars six lead changes four in the fourth quarter, Josh
Allen's touchdown Ronald just over a minute to play gave
Buffalo a twenty seven to twenty four victory. It's the
Bill's first playoff road win since nineteen ninety two. Next,
top Philadelphia, the forty nine ers a trick play touchdown
first play of the fourth quarter, and then with five
minutes to go, Christian McCaffrey scored on a past with
Rock Purty. Niners dethroned the Eagles twenty three to nineteen.
Last night, the Patriots beat the Chargers sixteen to three.
That's your Bloomberg Sports Update.
Stay with us more from Bloomberg day Break coming up
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Bloomberg Business app. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. The Federal Reserve is facing
even more political and legal pressure now, with chair J.
Powell saying the Justice Department has served subpoenas against the
Central Bank over his testimony about the FEDS building renovations.
But Powell is vowing to stand firm.
Public service sometimes requires standing firm In the face of threats.
I will continue to do the job the SAT confirmed
me to do with integrity and a commitment to serving
the American people.
I was chair Powell in a video statement last night
and this morning we're joined by Bloomberg's DC Breaking News
editor Alexander Pearce and alex to say there's new pressure
on the FED maybe a real understatement. Now, what do
we know more about these subpoenas that the chairman announced
last night?
Good morning, Good morning, Nathan. Yes, this was really quite
an escalatory move by the Trumpan administration yesterday, and so
far we've actually heard very little from the administration. We
got this announcement from Chairman Powell about the subpoenas, but
we've not yet heard from the Department of Justice or
Attorney General Pampondi. Yet, we did get some comments from
President Trump yesterday as he was traveling, saying that he
was not aware of the subpoenas, but he thought that
they had nothing to do with interest rates. As Chairman
Powell contended that the move was about, well.
We are getting some information though, aren't we, about who
may be behind these subpoenas. I mean, has been an
ongoing pressure campaign as you say, against the Federal Reserve
coming out of the Trump administration.
Absolutely.
Yeah, so we do have this has not been confromed
yet officially, but we have we have our own reporting
indicating that the fine the Housing Finance Director Bill Poulti
was really a driving force behind the subpoenas he's long
been a very vehement critic of j. Powell and also
the Federal Reserve's pace of cutting rates last year. And
we yeah, we have it that he has been sort
of pushing this, but he's obviously.
Has a.
In Trump, someone who is also very much believing that
the Federal Reserve has not been cutting rates aggressively enough
and has now you know, it's now escalated to this
point where actually there's a there's a threat of a
criminal indictment.
And we know that the Chairman Poulty has also been
a driving force behind the pressure campaign on FED Governor
Lisa Cook, the accusations of mortgage fraud that continue to
play themselves out in the courts. Put this in that
context as well. I mean, it really does seem like
there is just unrelenting pressure on the FED at this moment.
Yeah. Absolutely, it really just keeps escalating and as you say,
another Federal Board member, Lisa Cook, is also under investigation
for alleged mortgage fraud that's now going to go to
the Supreme Court. And you know, this is all basically,
at its most simple level, it's really just the Trump
administration's frustration with the Federal Reserve as it is constituted
right now, in its caution with cutting interest rates. J
Powell and other Federal Reserve Board members are still a
bit cautious about elevated inflation, about inflationary pressures from tariffs,
and so they have been cutting, but cutting at a
relatively cautious rate sort of pace. And Trump and his
allies have, you know, repeatedly ever since taking office last year,
for far more aggressive stance on interest rates.
And what could this mean for some of the other
aspects of this that we're watching going forward? I mean,
we're expecting that President Trump at any moment really is
going to be announcing his replacement for chair Powell. What
kind of pressure does that potentially put on who that
next pick could be.
That's right, So currently President Trump is considering a number
of names to replace Chairman Powell when his term as
chairman ends in May. And really these moves against Chairman
Powell and other members of the Federal Reserve is also
seen as a signal to whoever succeeds J. Powell in
that position, obviously with the intention of making sure that
they toe somewhat toe the line of the administration when
it comes to setting monetary policy.
And we've also heard from at least one Republican Senator,
Tom Tillis, saying that with this kind of pressure sure
on Chairman Powell, he may be reticent to cast any
vote in favor of confirmation for the next FED chair.
I mean, it puts a signal out there as well,
doesn't it that whoever comes out there is going to
face a pretty tough road for confirmation while this continues
to play out.
Absolutely, and it's notable given that Tom Tillis is also
Republican senator, and you know that is also just emblematic
of really quite a lot of anxiety not just within government,
within Congress, but also in the wider markets. As to
Trump's campaign here, there is a sort of sense that
he won't really go too far in threatening FED independence,
but you know, each move that he makes has been
quite escalatory, and that's probably led people like Senator Tillis
to come out and really quite vehemently oppose what's being
done and to threaten the nomination of any future nominee
to the Federal Reserve Board.
And while we continue to watch this pressure on the Fed,
we're monitoring the developments as well in Iran, where the
regime there appears to be under the kind of pressure
that it hasn't seen in many years of these street
protests that have been underway since late last year.
What's the latest there, Alex, Yeah, So it's now entering
his third week of quite violent protests in Iran, with
hundreds of people who have been killed, thousands have been arrested,
and President Trump has ever since they erupted, voiced very
strong support for the protesters, without really elaborating what kind
of support he might offer them. Last night, he did
say that he was considering military options, and there was
a report from the Wall Street Journal yesterday or earlier, sorry,
that said that he would meet with some of his
senior advisers to discuss those options. It's not really clear
what exactly he might choose. There are a number of
things he could do. There could be a direct military strike,
that could be some sort of cyber attack that could
be maybe a tightening of sanctions on Iran. So right
now we don't really know where the administration is leaning,
but they're certainly considering an action that could be quite
severe for Iran should these protests continue.
It's kind of difficult at this point to gauge just
how serious a threat these protests are to the regime,
given that the Internet is blocked in much of the country.
But what is the sense that we're hearing from some
activist groups and other observers as to where this could
go from here with these protests continuing. Alex got about
a minute left.
Yeah, I mean, really, it's the most sort of These
protests are the biggest challenge for the Islamic Republic since
really nineteen seventy nine, according to many observers, given that
they that the economy is not doing well. There is
a currency crisis right now and that actually sparked these
protests a couple of weeks ago, and going forward, they're
not really showing any signs of abating, and so if
they continue, it could be a threat for the regime there.
And as you say, we don't really know with crystal
clarity what's going on on the ground, but Trump himself,
as she did, say yes that he would potentially contact
Elon Muster try and get a Starling connection to try
and get more information about what's happening there, just given
that we can't, given that the internet's been cut off
in the country, know all of the facts.
This is Bloomberg Daybreak, your morning podcast on the stories
making news from Wall Street to Washington and beyond.
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