US-Iran Nuclear Talks; Trump's List to Succeed Fed Chair Powell

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 the latest from the NATO leader
summit in the Hague. President Trump is calling it a
major success after finalizing a significant defense spending boost from
member states.
In a very historic milestone this week, the NATO allies
committed to dramatically increase their defense spending two that five
percent of GDP, something that no one really thought possible.
And they said, you did it, sir.
You did it.
Well.
I don't know if I did it, but I think
I did.
President spoke at a news conference following the NATO summit,
or live on Bloomberg Radio. The agreement gives member nations
until twenty thirty five to reach the five percent spending threshold.
Nathan.
Also at the NATO summit, President Trump opened the door
to diplomacy with Iran after last weekend's airstrikes on its
main underground nuclears.
We're going to talk to them next week. With the
run we may shine an agreement.
I don't know.
To me, I don't think it's that necessary.
The President repeated, his argument that the strikes obliterated around
to nuclear facilities. An initial Pentagon assessment said it may
have set the program back just a few months. Bloombergs
dew Monibor said she has more on where the talks
could go from here.
In the run up to this war, five rounds of
discussions had taken place, mediated by Oman by Katar in
order to progress with the nuclear deal. The sixth round
was supposed to take place a couple of days after
the war began, but of course, at the twelve day
war that ensued, putting back all of those discussions. Now
the US are expressing optimism that the two sides can
find some form of an agreement. Yesterday, the Special ENVOYE.
Steve Whitcoffe, in an interview, said we are hopeful for
a comprehensive peace agreement. The signs are.
There, and Bloombergs dew maniber Sechi, reporting from Dubai, President
Trump said the war between Iran and Israel is effectively
over after the US bombing campaign, though he says it
could start again and Karen.
President Trump is once again taking aim at J.
Powell.
The Wall Street Journals reporting the President could actually announce
a replacement for the FED chair as soon as September.
He says he has a list of people to succeed
Powell when his term expires next year.
Yeah, I know within three or four people who are
going to pick. I mean, he goes out pretty so unfortunately,
because I think he's terrible. We have no inflation, we
have a tremendous economy.
President Trump is called on the FED to lower rates
by two and a half points. Last week, the Central
Bank decided to leave rates unchanged in the range of
four and a quarter to four and a half percent.
Markets are pricing sixty two basis points of easing by
the end of this year. The chance of a cut
next month remains at about twenty percent.
Meanwhile, Nathan Powell wrapped up two days of congressional testimony
on Capitol Hill. The head of the FED repeated his
message that it's tough to figure out how tariffs will
affect inflation.
The question is who's going to pay for the tariffs.
Originally it's the importer, but it gets passed along through
the distribution change to some extent of the consumer. The
ultimate question of it is how much of it does
show up in inflation and Honestly, it's very hard to
predict that in advance.
Powell told the House Financial Services Committee that recent economic
data is backward looking and many economists expect a meaningful
increase in inflation over the course of this year due
to tariffs.
Karen Investors get a slew of reports to the GEST
this morning on the economy, and we get a preview
from Bloomberg's Michael McKee.
Bit by bit, analysts are hoping to build a picture
of the post tariff announcement economy. Initial jobless claims will
be front and center today claims have ratcheted a little
higher in recent weeks. Any rise in unemployment may suggest
earlier fed Rake cuts. We'll also get new orders for
durable goods. A jump in orders for expensive Boeing jets
should boost the headline number, but capital goods, a proxy
for overall all business spending, are forecast to rise only modestly.
That may be another signal the economy is slowly also
on tap today the first look at trade in May.
Imports are expected to drop for a second month after
a lot of tariff front running purchases the first part
of the year. That should narrow the overall trade deficit.
Michael McKee, Blueberg Radio.
All right, Michael, thank you. As for the equity markets,
futures are higher ahead of the Thursday session. Chares a
Micron Technology. You're up two and a half percent in
early trading. The chip maker is forecasting stronger than expected
revenue this quarter, citing booming demand for AI related ships.
Kim Forrest is founder at Boca Capital Partners.
I think they really eclipsed what I had thought they
could do in this quarter. Remember the chips that are
driving their earnings hire sold out for the end of
this year, which is next quarter, so they're already booking
next year's twenty twenty six high bandwidth memory order.
And Kim Forest of Boga Capital Partners. Micron has been
one of the chip industry's hottest stocks this year. Shares
have gained more than fifty percent so far this year.
And Karen Fellowship maker and Vidia is trading at a
record high this morning. It's up another one percent in
the pre market. The AI Darling's market cap has risen
sixty three percent off in April low, a rally that
has added nearly one and a half trillion dollars to
its valuation, and Vidia has now overtaken Microsoft as the
world's largest stock with a market cap of nearly three
point eight trillion dollars and Europe.
Nathan Shell says it has no intention of making an
offer for rival oil giant BP, and we get the
very latest from Bloomberg's Ewen Potts Ewen coarenon.
Nathan Shell's announcement today quell speculation of the UK's two
oil major's Cookabine to take on the likes of Exxon
and Chevron. Bp'sadyrs briefly surged in New York yesterday after
The Wall Street Journal reported the company was in early
stage takeover talks, but today Well has clarified it has
no intention of making an office of BP and says
no talks have taken place in London. I'mium Pots Splinberg Radio.
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, Good morning, Karen. Closing arguments as scheduled
to begin today in the Sean Diddycombe sex trafficking trial. Yesterday,
federal prosecutors asked a judge to strike language regarding attempted
kidnapping and arson from jury instructions, while the rap mogul
also faces racketeering conspiracy counts. Prosecutors said in a filing
to the judge that they understand the court's desire for
streamline instructions to jurors. People are still talking about this
week's political shocker. In the New York Democratic primary for mayor,
a thirty three year old self described democratic socialist State
assemblyman Zoron Mumdani, defeated nearly a dozen candidates, including former
Governor Andrew Cuomo. I'mdani, speaking the WABC, was asked about
democratic socialism.
I think of the words of Doctor King, who decades
ago said call it democracy or call it democratic socialism.
There must be a better distribution of wealth for all
of God's children in this country. And it gets to
the heart of the matter, which is inequality and my
belief that every New Yorker should have what they need
to live a dignified life.
From Donnie campaign on freezing rent, making buses free, and
opening city run supermarkets. Barring any surprises, Mamdanni will face
the city's current mayor, Eric Adams, who is running as
an independent in November.
Is a snake oils salesman.
He was say and do anything to get elected. Former
Governor Cuomo has conceded the primary, but he's not out
of the race just yet. He is now weighing his options,
including whether to run as an independent in the general election.
Today Marx ten years since the Supreme Court's landmark ruling
which granted same sex couples the right to marry in
the US. It comes as LGBTQ advocate have worn that
under the Court's new conservative majority, which eliminated the right
to abortion, marriage equality could also be at risk. The
Human Rights campaigns Jonathan Lovetz.
The legal setbacks for LGBTQ people, particularly trans people, are
deeply troubling. But on the other side, the groundswell of
support for our community to protect our rights is louder
and growing louder by the day.
The Human Rights Campaigns Jonathan lovettz Global News twenty four
hours a day and whenever you want it with the
Bloomberg News Now, Michael Barn, this is Bloomberg Karen.
All right, Michael Barr, thank you time now for the
Bloomberg Sports Update. Here's Sean Stashaur John Good morning.
Good morning, Karen's been a rough couple of weeks for
both the Mets and the Yankees, especially the Mets ten
losses and eleven games. They went from a five game
division lead down to second place. But for one night
of city field and team together against the Braves, who
they were zero and five against. It started in the
fourth inning. Iswuan Soto won one game.
As we go to the bottom of the fourth and
he drives.
One at deep right center, fail Becos Harris to the wall.
It's a hair what pitch the Metsu back in.
Front on one?
SODA's eighteen come out to be here sn wy.
The Sodo blast started a five run inning in three
innings later, Sodo homeward again, his fourth multi home run
game this season. Mets beat Atlanta seven to three. The
series ends tonight. The Yanks salvage won in Cincinnati seven
to one, out hit the Reds thirteen to four. Both
Trent Christian and Jason Dominguez had four hits to back
Max Freed, who leads baseball with ten wins. Yanks now
have their first day off in a while. They'll host
the A's tomorrow. Red Sox limp home with the five
game losing the streak, beating again by the Angels five
to two. The Socks struck out fourteen times. Nationals held
the three hits, lost one nothing. At San Diego Dukes
eighteen year old Cooper Flag second youngest first overall NBA
draft pick. Only Lebron James was younger, and that was
by eight days. What's so different about Flag? He'll be
the first NBA player born in raised in the state
of me.
It means a lot to me. You know, to have
the support of the whole state, and you know, I
know how, and you showed up today and supported me
at some of the draft parties back home, So it
feels amazing. No, I can inspire younger kids. I mean
I was in their shoes really not that long ago.
So just to know I can give give those kids
those feelings and have the whole state behind me, it
means a lot.
Headed to the Dallas Mavericks San Antonio, with a second
book pick, took Dylan Harper from Rutgers, and another Duke freshman,
com Ki Nipple, went forth to Charlotte, and the other
Rutgers freshman, a'st Bailey went fifth to Utah Nets at
five first round picks. Then Nicks will get to make
a pick tonight in the second round. John Stasheware, Bloomberg Sports.
Karen Nathan.
Coast to Coast on Bloomberg Radio, nationwide on Sirius XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak.
Good morning.
I'm Nathan Hager. President Donald Trump has left the NATO
Leader summit in the Hague after sealing a commitment from
member states to raise defense spending two levels many thought
was impossible just months ago, five percent of GDP.
I think we had a great victory here. This is
an ongoing project. This is the safety of Europe, the
safety of the world.
President Trump spoke there to post some news conference heard
live on Bloomberg Radio this morning. We're joined by Bloomberg
News senior writer Stephanie Baker. Stephanie, good morning. Of course,
five percent target would be a massive change to Europe's
security architecture. Can member states get there given the challenges
that so many of them had just getting to the
current two percent goal?
Good morning, good morning, You're right, five percent would effectively
mean hundreds of billions of euros of additional defense spending,
but I think it's clashing with fiscal realities. Many European
countries just don't have the scope or the fiscal room
to spend anywhere near that kind of money. And remember
the five percent target is actually three point five percent
on actual defense spending, one point five percent allocated to
defense related infrastructure. So it's all a bit fuzzy, and
France and Italy have opted not to use the EU
rules that would allow them to take on additional debt
to finance that spending. I think the real leader here
will be Germany, which has promised really ambitious additional new
spending on defense and infrastructure, and we'll probably pull ahead
and be a real leader on that.
Well, we heard the criticism from President Trump with Spain
openly talking about the challenges. It says that they could
face reaching that five percent target, talking about maybe making
them spend twice as much on a trade deal. Of course,
Spain's part of the EU. But could this affect this fuzziness?
Could this effect what's going on in a trade talks
between the US and the EU?
It could, And for countries like Spain, they'll have to
choose whether or not they want to spend it potentially,
you know, tens of billions more on defense or lose
maybe single digit billions on a bad trade deal with
the US. And I think that's the kind of calculation
many will be making. The NATO summit was really designed
to deliver Trump a victory by agreeing to that headline
five percent figure while getting Trump to reaffirm the US
commitment to NATO's Article five that he would the US
would come to the defense of any NATO country that
was attacked. And it achieved that goal. But I think
they fledged the numbers and that will come back to
haunt them down the road if they are unable to
really deliver that kind of spending.
What does that mean going forward when it comes to
putting continued pressure on Russia to ease back on the
fighting between Ukraine and come back to a negotiating table.
It's incredibly important, and I think that's one of the
things that was sort of sidelined at the NATO summit.
Ukraine needs a new package from the United States for
military aid. What the Biden administration had approved before he
left office is now coming to an end, and Ukraine needs,
in particular, patriot missile defense systems to ward off further
Russian air attacks. Trump said at the summit that he
would look at it, but we are very far from
any kind of deal that would provide additional serious military
aid to Ukraine. And in fact, a lot of these
European countries are counting their military aid to Ukraine as
part of that NATO pledge, which is again another kind
of fudging of these sort of fuzzy numbers, and they're
using the proceeds from Russian frozen assets to finance it.
So there's a real lack of money here, and I
think that is the central problem. Ukraine needs really serious
additional military aid to ward off Russian attacks because Putin
does not seem to have any appetite to come to
the table for a seafire.
Just thirty seconds left. Does all this make it more
difficult for Europe to put further sanctions pressure on Russia?
Well.
EU leaders are meeting today to approve their eighteenth package
of sanctions, and it's expected to widen restrictions on Russian
banks and Russia's shadow fleet of oil tankers, a proposal
to lower the price cap on Russian oil, which is
set at sixty dollars a barrel to forty five dollars,
a bill that seems dead in the water now because
Trump opposed that, even though most EU leaders were supportive
of it. There does need to be a more robust
package of sanctions to really drive down Russia's oil revenues
to really impact Putent's ability to finance the war.
This is Bloomberry Day Break, your morning podcast on the
stories making news from Wall Street to Washington and beyond.
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here on Bloomberg Day.
Ray