Powell Probe Stirs GOP Concern; Trump Vows 25% Tariff on Iran's Trading Partners

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 ongoing controversy around the probe
into j Powell and the FED. Bloomberg's John Tucker joins
us with the very latest. John, Good morning, and good morning.
Nathan.
Bloomberg has learned that Washington, DC, US attorney and former
Fox host Jeanine Piro subpoena of the Federal Reserve without
ever seeking permission from her bosses at the Justice Department,
and she doesn't plan to back down. The blowback from
lawmakers and government officials continues to grow. Federal Reserve Bank
of New York President John Williams among those leaping to
the defense of FED Chair Jerome Powell.
He's proven himself to be a man of impeccable integrity
and a man who has been calmly leading the Federal Reserve.
Former Philadelphia Fed President Patrick Harker, as members of Congress
can't let this happen.
Grim, You've talked to members of Congress on both sides
of the aisle. They understand this. They may have different
rhetoric out in public, but you talked to them one
on one. They understand how critical the Federal Reserve is
and they are going.
To push back.
Senator Tom Tilli is a key GOP member, and the
Banking Committee bound to oppose any Trump nominees to the
FED until this is resolved. Senate Majority Leader John Thune
said the threat of a legal battle with the Fed
could make confirming future nominees quote challenging. Axios reported the
Treasury Secretary Scott Besson warrent President Trump the investigation had
created a mess that could be banned for financial markets,
and judging by market reaction, investors doubt the probe of
the FED is going to lead anywhere In New York.
I'm John Tucker, Bloomberg Radio.
All right, John, thank you. By the Trump administration is
facing new legal action over the immigration crackdown. In Minnesota.
The Estate is suing the Department of Homeland Security and
Secretary Christi nom over the precedented surge of ICE officers
at Minneapolis and Saint Paul. Here's Minnesota Attorney General Keith Ellison.
The deployment of thousands of armed mass DHS agents to
Minnesota has done our state serious harm. This is, in essence,
a federal invasion of the Twin Cities and Minnesota, and
it must stop.
Minnesota Attorney General Keith Ellison's lawsuit comes nearly a week
after an ice officer shot and killed thirty seven year
old Renee Good in Minneapolis. Her death during a tense
confrontation in her car has sparked protests across the country.
Tourneing to US foreign policy now Karena by partisan congressional
delegation is headed to Copenhagen later this week to show
unity with Denmark mid tensions over Greenland. Delaware Senator Chris
Coons is leading the trip. It includes at least nine
members of Congress. They plan to meet with Danish and
Greenlandic officials on Friday and Saturday.
Let's get to the latest from the Middle East, Nathan.
President Trump plans to meet with advisors today to weigh
options on responding to deadly protest in Iran. On social media,
the president announced a twenty five percent tariff on countries
that do business with the Islamic Republic that could upset
his one year trade truce with China. Alivias is Iran
Project director at International Crisis.
Group we have to see if that thread is really implementable,
because Iran's biggest trade trading partner is China, and of
course the US is a complicated relationship when it gets
through in position of tariffs on China second most important
trading partner is the UEE, again the close ally of
the United States, and it's hard to imagine that these
countries would be willing to really cut off all their
ties with Iran.
Overnight Aliviyas with International Crisis Group notes, China is the
world's biggest buyer of Iranian oil. It's unclear if President
Trump would stack the new tariffs on top of existing
duties or announce carve outs for China.
In Japan, Karen Prime Minister Sanai Atakiichi is reportedly planning
to call a snap election. Success at the holes for Takaichi,
who has been in the premiership since October, would provide
a mandate for her to continue hawkish diplomacy and pro
stimulus policies. Stocks rallied and the end week into its
lowest level since July twenty twenty four on the news.
Well in the US here Nathan stocks and bonds rebounded
on Wall Street to eke out gains. After initially dropping
on news, the Trump administration escalated its attack on the FED.
Steve Chiverone is Deputy Chief Investment Officer of Equities at
Federated Hermes.
It doesn't matter how you get to where we were.
It's not good, right. If you have a FED share
that's engaging in illegal activity, that's not good. If you
have political pressure on a FED share being exerted through
the courts, that's not good to have. The video release
is certainly not helpful for markets. So nobody benefits from this.
And Federated Hermes Steve Chivarone. Right now, futures again are lower.
SMP futures down a tenth of uve percent this.
Morning, and attention will now turn Karen to real economic data.
This morning we get the latest inflation report for December.
Bloomberg's Michael McKee has a CPI preview.
We get a full month's data in the December CPI,
but the numbers will remain somewhat unreliable because there was
no October data. The Bureau of Labor Statistics imputed them.
The imputation was zero no change, which to anyone who
went shopping during the month knows is wrong. That decision
biased the November CPI lower. For December, we should see
some payback an upward bias. That bias may or may
not push the annual inflation rate higher. Analysts are divided,
so confidence in what the numbers are telling us may
be low. Markets however, don't see the Fed moving anyway
this month, and we'll have January and February CPI data
in hand before the next Fed meeting.
Michael L.
Key, Bloomberg Radio.
All right, Michael, thank you. In addition to the CPI report,
investors will get earnings from the first of the big banks,
JP morgan Chase reports. Before the opening bell, we get
a preview with Bloomberg's Tom Busby.
JP Morgan Chase's trading and investment thinking businesses will be
in focus, with revenue from trading stocks and bonds expected
to rise thirteen percent from a year ago, helping share
so the bank up thirty five percent in the past
twelve months, easily topping the sixteen percent gain in the
SMP five hundred Financials index. Bloomberg consensus calls for adjusted
revenue of forty six point three five billion dollars for
the fourth quarter on adjusted earnings per share of four
dollars ninety two cents. Tom buzzby Bloomberg Radio.
Okay, Tom, thank you. Look at company news now. City
Group is among three major companies cutting jobs. The bank
is set to slash about one thousand positions this week
as part of CEO Jane Fraser's March to keep a
lid on costs, and Blackrocks cutting hundreds of jobs across
its company as well. Those cuts total about one percent
of blackrocks global headcount and include members of its investment
in sales teams and meta platforms. Plans to cut about
ten percent of its employees in the reality Labs division.
That's part of a broader strategy to shift money away
from some virtual reality products and into other AI wearables.
Nathan President Trump says big tech must bear the costs
of raining in electricity costs. In a post on truth
Social the President said his administration have been talked with
Microsoft to ensure that consumers quote don't pick up the
tab for enormous data centers. The rapid construction of data
centers is widely seen as one reason why electricity has
become more expensive in the US, though it is not
the only one.
Later Today Karen, President Trumble visit a key battleground state
to promote his tariff and manufacturing policies and flesh out
a more populist economic message. He'll visit a factory that
makes Ford F one to fifty trucks and promote his
policies and an event sponsored by the Economic Club of Detroit.
This is the president's third trip to a bellweather state
since early December.
Time now for a look at some of the other
stories making news in New York and around the world
and from ever. Joined by Bloomberg's Michael Barr Michael, Good Morning,
Good Morning Karen.
About fifteen thousand nurses in New York City are on
the streets into the second day of their strike. Nurses
say they'll stay there until their demands are met.
We want a fair contract, so we want to save
our healthcare, save our pension, and provide safe staffing for
our patients.
Nurses are also calling for higher wages and better staffing.
Hospital officials say union leaders are making reckless demands, including
nearly forty percent wage increases. A New York City Council
employee was detained by federal immigration officials when he appeared
for a routine immigration appointment. That's according to City Council
Speaker Julie Menin, who says the employee works as a
data analyst and has the legal authorization to remain in
the country until October.
DHS confirmed that this employee had gone in for a
routine court appointment and was nevertheless detained. They provided no
other basis for his detainment.
According to the DHS, the employee is a criminal alien
from Venezuela who has an assault arrest and no work authorization.
New York Mayor Zoram Mamdani calls the detention and assault
on democracy and demands the employee's immediate release. New York
Governor Kathy Hockle will reveal how she plans to tackle
making housing more affordable for people. Hokel would use today's
State of the State address to detail how she plans
to cut red tape for developers to boost the state's
housing supply amid a widespread shortage of affordable units. It
would be through her let Them Build program. The proposal
has drawn criticism from green groups, who argue that changes
to the law could open up loopholes that could be
exploited by business interests. Global News twenty four hours a
day and whenever you want it with Bloomberg News Now,
I'm Michael Barr. This is Bloomberg Karen.
Thanks Michael.
All time now for our Bloomberg Sports updating. For that,
we bring in John stash Hour.
Thanks. During the end of the NFL Wild Guard Playoff
round of the Houston Texans had a one point le
in the fourth quarter in Pittsburgh and then scored twenty
three points in a span of ten and a half minutes.
They had two defensive touchdowns. Houston won thirty to six
to advance to play New England on Sunday. Was this
the last game for Aaron Rodgers? Will he retire? There
was talk the Packers might fire coach Matt Lafleur. Instead,
they're talking about a contract extension with him. John Harbaugh's
first coaching interview with Atlanta. That to 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 opp This is Bloomberg Daybreak.
Good morning.
I'm Nathan Hager. The Justice Department's moved to launch a
grand jury probe against fedchair Jay Powell is drawing rare
pushback from many Republicans on Capitol Hill. Louisiana Senator John
Kennedy is among them. He says, a perjury allegation against
Congress is a serious allegation.
Is serious as four heart attacks on a stroke.
And if you make an allegation like that, by God,
you better be prepared to put it tobaccul up.
That was Republican Senator John Kennedy of Louisiana on Capitol
Hill this morning. We're joined by Bloomberg New senior editor
Alistair Bull and Alistair. We're just getting word from central
banks around the world issuing a joint statement of solidarity
for Chairman Powell as well. It does seem as though
the pushback against this Justice Department probe is pretty remarkable.
Good morning, morning morning, Thanks for having me on it.
It is remarkable, But I think the most remarkable thing
is the strident tone taken by key Republican senators.
Who are in a position to do something about it.
Investors may well heat comments by other central bankers and
bis it could affect their long term view on US assets.
That's obviously important.
The bombmarket vigilantes do have a role to play here.
Senate Republicans can stop Trump from putting his NOMA nominees
on the FED board, and that really sort of like
blocks the Trump campaign to get more control over the
Central Bank.
So that's very serious pushback.
What are we hearing in terms of how these subpoenas
came about. It sounds like there might have been some
kind of disconnect between the Attorney General or the US
Attorney in DC and the Justice Department rid large.
Well, you know, that's very interesting because the reporting yesterday
made it clear that there were a lot of people
around the White House who didn't know this coming and
were not happy to happen, including Treasury Secretary Scott Besson, who,
according to Axios, was very quickly on the phone to
Trump on Sunday night to tell him this was going
to be a mess and it was going to put
a stick in the spokes of his effort to nominate
a new FED share. We don't entirely know what happens next. Really,
the ball really is.
In the court of.
Because till The Republican Senator Tom Tillis said this needs
to be cleared up soon. And that clip you played
from Senator to Kennedy said, if you're going to make
these allegations, you better back them up.
So I think people are going to want to.
See movement, but they've really not very said very much
to clarify what happens.
Now, what kind of role could Congress play to get
that kind of transparency from the Justice Department. Could we
see a clash there?
Yeah, I expect so. I mean I think till this
also sits on the Justice Committee, so I mean he
has power here.
The important thing is that the Senate has oversight, Congress
has oversight of the Federal Reserve, which was very carefully
constructed to insulate it away from political pressure. Now the
Trump president Trump is testing those layers of defense, but
he hasn't breached them yet. And there's another important thing
that's going to happen this month, which is a Supreme
Court going to start here the argument around Governor Lisa Cook,
who Trump fired for cause, and she's fighting that the
Supreme Court indicated that it wants to give some sort
of carve out to the FED as a special quasi
private public agency. If a Supreme Court comes down on
Lisa Cook's side. That's going to give the FED even
more protection and insulate Powell further from sort of an
assault that he has identified as.
A threat to FED independence.
And importantly, Republican senators say they agree with him, they
say it is a threat to FED independence.
And of course this is coming as we're still waiting
for an announcement from President Trump on who his successor
choice for chairman Powell will be. With Senator Tilla saying
he'd block any further FED nominees, that has to complicate
even that announcement, doesn't it.
Yeah, absolutely, I mean that's the big story, the big
news we are expecting on the FED this week or
maybe after Trump goes to Davos for the World Economic Forum.
Was his pick for FED share but that's been completely
overshadowed by this. And if Tilli sticks to his word,
if he if he votes, if he votes to block
any norminee, he basically has a vita on Senate Banking
it's split it thirteen eleven. If he crosses the floor
to join the Democrats, that's twelve twelve that blocks it
there to move out of the committee over an objection
sixty senators under the current rules. You've already got lis Mkowski,
You've got Kramer, You've got Kennedy sounding dubious. You've got
John fun Who's you know, majority leader, saying this needs
to be fixed soon, so they you know, Trump may
not have the votes in the Senate. So it basically
freezes the whole plan, which is why when you read
the Besson Treasury sectary, Psson was.
Very angry and frustrated by this. You're not surprised.
This is Bloomberry Daybreak, your morning podcast and the stories
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