Trump Moves to Fire Fed Governor Cook; Trump Latest Tariff Threat

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning, I'm Nathan Hager and I'm Lisa Matteo. Here
are the top stories we're following today, Lisa.
Investors are bracing for a possible historic legal fight between
the White House and the Federal Reserve. President Trump has
moved to oust FED Governor Lisa Cook following allegations she
falsified mortgage documents. Cook has responded once again, saying the
President has no authority to fire her and she won't quit.
We get more from Bloomberg Economics reporter Katta Dmitrieva.
She's on the FOMC. Importantly, that's the committee that votes
to set interest rates. Importantly, she's also the first black
woman to serve on the FED board and was appointed
by Biden in twenty twenty two, and her term wasn't
said to expire until twenty thirty eight, so more than
a decade from now up until these allegations. So the
allegation stemmed from Bill Poulty, who's the Federal Housing Finance
Agency head, and he posted on social media alleging that
Cook had committed mortgage fraud.
Bloomberg's Katya Demitrieva reports Lisa Cook's lawyer is planning to say, quote,
whatever actions are needed to prevent President Trump's quote illegal action.
Forcing Cook out would give the President an opportunity to
secure a four person majority on the fed's seven member
Board of Governors.
Well reaction pouring into this showdown between the White House
and the Fed. Nathan Danielle di Martino Booth is a
former advisor to the president of the Dallas Federal Reserve.
There is, indeed the opportunity for Governor Cook to immediately
go to the courts and an ash for and injunction
such that she stay in her position while this while
the courts decide what the path is going to be. Again,
I'm no legal expert, but everything that I've read this
evening since this news hit suggests that she can indeed
make every attempt to stop this right now.
Former Dallas Feed advisor Danielle de Martino Booth. Now no
charges have been filed against Cook, there were Justice Department
official last week signaled possible plans to investigator Alisa.
President Trump is also issuing a new trade threat against
countries with digital services taxes. In a social media post,
he said he will impose fresh tariffs and export restrictions
on advanced tech and chips unless other nations drop measures
that he says discriminate against US tech. Polk Amesa with
Javelin Wealth Management says this adds more uncertainty to the
tech sector.
Canada did give in on on on the digital tax,
but Europe is holding firm. So it's again we feel
that you can't make long term predictions based on a
turre of being announced or threatened now and then being
taken off again or some deal being struck. So I
still think that it's probably going to be again a
negotiation some Dean's bean's truck.
Javelin Wealth's Polkamieshra says she does not think President Trump's
terror threats will derail the overall AI rally well.
Later this week, Nathan China is sending a key trade
negotiator to Washington as the latest ninety day tariff pause
with the US continues. The Wall Street Journal reports Chinese
Vice Commerce Minister Lee chen Gang we'll meet with US
Trade Representative Jamison Greer and Treasury Department officials, along with
US business figures. President Trump says when it comes to
trade with China, the US has the upper hand.
They have some cards.
We have incredible cards, but I don't want to play
those guys that wouldn't do. If I played those cards,
that would destroy China.
I'm not going to play those goods.
President Trump says.
The US cards include parts of Boeing planes that he
says he held back due to China's policies on rare
earth magnets. China halted most shipments of those key minerals
to the US in April, but agreed to normalize flows
as part of the latest trade truce.
Well, we're looking at stocks in France this morning, Lisa.
They are down on one point eight percent. That's what
French Prime Minister Francois Bayrou calling a confidence vote that
may top or his government as soon as next month.
We get more from Bloomberg's Caroline Conna in Paris.
Sois Beiro's idea was to anticipate the social anger by
calling this vote of no confidence two days before. Several
far left groups have threatened to totally block the country
on September tenth, So trying to avoid some sort of
general strike and general protests in the streets. But clearly
since Francoiber, who presented his initial budget plan mid July
with forty four billion euros of savings. He hasn't really
managed to convince French public opinion that this is the.
Right way to go.
Bloomberg's Caroline Conna says.
The far right National Rally Party, the leftist France on Boo,
the Greens and the Socialists all say they will vote
against the September eighth motion, which gout forced Beiru two
submit his government's resignation.
Well, turning back to the markets now, Nathan, we are
just one day away from the eagerly awaited earnings report
from Nvidia. Bloomberg's Pretty Gupta says the results could have
a major impact on global markets.
This is a big one this time around for a
couple of reasons. Nvidia has grown into not only the
most expensive and largest company in the world, but also
one that has a lot of ripple effects because from
a thematic trading point of view, it has geopolitical implications.
It means big things for other mega cap tech players
like Apple, Amazon, Alphabets, even though they're not all in
the same category of company necessarily, they are still mega
cap tech. And then, of course it kind of sets
the bar for other chip companies as well.
Bloomberg's Pretty Gupta says in Nvidia is the biggest weight
in the S and P five hundred at almost eight percent.
And staying in the tech space, Lisa Elon Musk is
suing Apple and open Ai, accusing them of colluding to
block rivals in the artificial intelligence market. In the federal lawsuit,
Musk's x and Xai claim Apple's integration of chat GPT
into iPhones gives it an unfair monopoly deprives consumers of choice.
Mark German is covering this story for Bloomberg.
Elon is right, they do give pretty hot promotion to
some of the other AI companies in the app store.
They haven't done a lot of that promotion for Groth
and so maybe we'll see more of that from Apple.
But all in all, I find this lawsuit to be frivolous.
I don't personally consider it an antitrust situation, but it's
obviously not up to me to decide, and it is
a little surprising that Elon Musk actually went.
Through with this.
Bloomberg's Mark German says Musk is seeking billions of dollars
in damages. Apple hasn't commented, but open Ai is dismissing
the case as harassment, and.
A new research report finds artificial intelligence is making it
harder for entry level workers in the US to find
jobs in fields like software development and customer service. Stanford
University researchers say they found that over the last three years,
employment has dropped thirteen percent for people who were just
starting out in fields determined to be the most exposed
to AI, things like accountants, developers, and administrative assistants. All right,
time now for a look at some of the other
stories making news in New York and around the world.
For that, we're joined by Bloomberg's Michael bar Good morning, Michael, Good.
Morning, Lisa. Illinois Governor JB. Pritzker and Chicago Mayor Brandon
Johnson held a joint news conference slamming reported efforts by
the government to potentially call up the National Guard in Chicago,
just days after the Guard was deployed to cross Washington,
DC earlier Monday. Inside the Oval Office, President Trump called
the city a killing field Chicago.
Everybody knows how that it is.
Everybody standing there and knows we know you don't have
to be doing any studies.
Governor Pritzker, Donald Trump looked at the assembled cameras and
asked for me personally to say, mister president.
Can you do us the honor of protecting our city?
Said I say, mister President, do not come to Chicago.
According to Chicago Police, violent crimes are all down from
twenty twenty four, including a thirty three percent reduction in homicides.
Kilmar Abrego Garcia is protected from redeportation for now. A
federal judge rule that the government is forbidden from sending
Abrego Garcia to Uganda while the matter is litigated. The
Salvadoran immigrant was mistakenly deported in March. He was returned
to the US in June, then charged with human smuggling
and is now detained by Ice in Baltimore. The co
founder of Mexico's powerful Sineloa cartel pleaded guilty Monday to
federal drug trafficking charges. Seventy five year old Ismail Zambona Garcia,
who is also known as El Mayo, pleaded guilty in
a Brooklyn courthouse, including engaging in a continuing criminal enterprise
with thirty five years. Judge Brian Cogan said he was
sent Zimbada to life in prison. Attorney General Pam Bondi.
El Maya will spend the rest of his life behind bars.
He will die in a US federal prison where he belongs.
Ag Bondi, says. Zimbada. Garcia admitted in court to quote
directing people under my control to kill others to further
the interests of my organization. Global news twenty four hours
a day and whenever you want it with Bloomberg News. Now.
I'm Michael Barr, and this is Bloomberg LEAs.
Thank you, Michael. Time now for our Bloomberg Sports update,
and for that we bring in Dan Schwartzman.
Thanks Nathan. Major League Baseball Scoreboard, the Mets dominate the
Phillies thirteenth to three, while the Yankees of both the
Nationals ten to five. Elsewhere Division leaders, the Blue Jays,
the Brewers, and the Dodgers all win, as do the
Red Sox and Mariners, who get another homer from Cal Rawley,
his fiftieth, while the Tigers lose their second straight no upsets,
and the men throughout the US Open as Carlos al
Karaz and Jack Draper dvance's second round, and the women's
raw six seed Mass and Keys disasted in the first
round by Renata Zarazua. Meanwhile, forty five year old Venus
Williams played her first Grand Slam match in two years,
falling to Karolino Musheva in three sets. It's cut down.
The NFL active rosters have to be trimmed to fifty
three by four pm Eastern Time today. That's your Bloomberg
Sports Update. Stay with us.
More from Bloomberg Daybreak coming up after.
This 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 on Nathan Hager.
It is a threat to President Donald Trump's been making
for days, even as late as last week's Jackson Hole symposium.
Weather to fire Federal Reserve Governor Lisa.
Cook gonfi Alwisa Cooke, the Fed governor of her morning
fun or if.
She doesn't resign, you know, she's see what she did
was a band, So I'll fire her if she doesn't resign.
And now President Trump is moving to follow through on
that thread, posting on social media he has sufficient cause
to fire Cook for allegedly making false statements on mortgage loans,
but Cook is questioning the president's authority, vowing to stay
on the board, joining us now Bloomberg Economics reporter Katya Dmitrieva, Katya,
good morning. This seems like a culmination of a threat
that the president has been making for some time.
But with Cook vowing to stay on, where does this
go from here?
Good morning, good morning, and good evening here in Hong Kong.
I mean, that's kind of the big question, right. We're
in completely uncharted territory here with this move. We've never
had a president before getting rid of a fed governor
in this way, and suffice to say, by social media
as well, because it's all of course stems from that
social media post by Bill Pulti, the Federal Housing Finance
Agency head, who told his followers and told the world
essentially that had committed mortgage fraud and just to catch
people up on this if they hadn't been tuning in
in recent days. Basically, the allegations are that she purchased
two homes within the span of a year in different states,
and both of them were putting down that it was
going to be her primary residence, so raising some eyebrows there.
And to be clear, no charges have been filed. Even
at this point, even as the president is said he's
moving towards firing her, and Cook has said, of course
that she's innocent and she'll be staying in the role.
Of course, that raises a lot of questions, not the
least of which is whether a president could fire a
FED governor for cause on an issue like this, and
on an issue that hasn't been fully litigated yet.
Yeah, and technically they can. So technically a president can,
and the reasons are quite broad. So there's generally three
buckets that would give a president the right to fire
a FED governor. It's inefficiency, neglect of duty, and malfeasance.
A president hasn't fired a governor before, though, so this
is a lot of kind of untrodden ground. But what
we do know legally what could happen if Trump does
move forward to remove her from the role, then she
has the ability and her lawyers have the ability to
take this to court and to litigate it, so she
would be able to get reinstated in her role continue
as that litigation is ongoing and would probably go up
to the Supreme Court. Now, she has said and her
lawyers have said that they'll do everything in their power,
and they in fact called Trump's actions illegal. And as
far as we know, what she's told us is that
she's not going to be, in her words, bullied into
leaving her position. She's going to stay in the position
for now.
Now we know the President has been threatening this for
some time, but I've got to ask, why do this
now when we've gottenn indication so Jackson Hole just last
week from Chairman Powell that he's at least open to
cutting into got about thirty seconds left.
Yeah, that's a great question. I mean, if you're in
the markets right now, maybe you think that he's angling
to cut rates sooner and really make sure that they
cut rates. I mean, look, we're what we've heard from
officials is that they're just doing their job. They're going
after an official who has done some questionable things on
their mortgage application. But you do have to look at
the numbers. If she leaves, that's four members of the board,
a majority voting majority on the FMC who would be
Trump allies. So the math kind of works in his
favor as well.
This is Bloomberg day Break, your morning podcast on the
story's making news from Wall Street to Washington and beyond.
Look for us on your podcast feed by six am
Eastern each morning, on Apple, Spotify, or anywhere else you listen.
You can also listen live each morning starting at five
am Wall Street Time on Bloomberg eleven three to zero
in New York, Bloomberg ninety nine to one in Washington,
Bloomberg ninety two nine in Bustin, and nationwide I'm Serious
XM Channel one twenty one.
Plus listen coast to coast on the Bloomberg Business app
now with Apple CarPlay and Android Auto Winterfaces.
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
Nathan Hager and.
I'm Lisa Matteo. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak