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

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Good Morning, I'm Nathan Hager and I'm Karen Moscow. Here

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<v Speaker 2>are the stories we're following today.

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<v Speaker 3>Karen, we begin with the ongoing controversy around the probe

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<v Speaker 3>into j Powell and the FED. Bloomberg's John Tucker joins

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<v Speaker 3>us with the very latest. John, Good morning, and good morning.

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<v Speaker 4>Nathan.

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<v Speaker 5>Bloomberg has learned that Washington, DC, US attorney and former

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<v Speaker 5>Fox host Jeanine Piro subpoena of the Federal Reserve without

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<v Speaker 5>ever seeking permission from her bosses at the Justice Department,

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<v Speaker 5>and she doesn't plan to back down. The blowback from

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<v Speaker 5>lawmakers and government officials continues to grow. Federal Reserve Bank

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<v Speaker 5>of New York President John Williams among those leaping to

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<v Speaker 5>the defense of FED Chair Jerome Powell.

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<v Speaker 6>He's proven himself to be a man of impeccable integrity

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<v Speaker 6>and a man who has been calmly leading the Federal Reserve.

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<v Speaker 5>Former Philadelphia Fed President Patrick Harker, as members of Congress

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<v Speaker 5>can't let this happen.

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<v Speaker 7>Grim, You've talked to members of Congress on both sides

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<v Speaker 7>of the aisle. They understand this. They may have different

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<v Speaker 7>rhetoric out in public, but you talked to them one

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<v Speaker 7>on one. They understand how critical the Federal Reserve is

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<v Speaker 7>and they are going.

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<v Speaker 8>To push back.

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<v Speaker 5>Senator Tom Tilli is a key GOP member, and the

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<v Speaker 5>Banking Committee bound to oppose any Trump nominees to the

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<v Speaker 5>FED until this is resolved. Senate Majority Leader John Thune

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<v Speaker 5>said the threat of a legal battle with the Fed

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<v Speaker 5>could make confirming future nominees quote challenging. Axios reported the

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<v Speaker 5>Treasury Secretary Scott Besson warrent President Trump the investigation had

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<v Speaker 5>created a mess that could be banned for financial markets,

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<v Speaker 5>and judging by market reaction, investors doubt the probe of

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<v Speaker 5>the FED is going to lead anywhere In New York.

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<v Speaker 5>I'm John Tucker, Bloomberg Radio.

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<v Speaker 2>All right, John, thank you. By the Trump administration is

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<v Speaker 2>facing new legal action over the immigration crackdown. In Minnesota.

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<v Speaker 2>The Estate is suing the Department of Homeland Security and

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<v Speaker 2>Secretary Christi nom over the precedented surge of ICE officers

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<v Speaker 2>at Minneapolis and Saint Paul. Here's Minnesota Attorney General Keith Ellison.

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<v Speaker 9>The deployment of thousands of armed mass DHS agents to

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<v Speaker 9>Minnesota has done our state serious harm. This is, in essence,

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<v Speaker 9>a federal invasion of the Twin Cities and Minnesota, and

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<v Speaker 9>it must stop.

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<v Speaker 2>Minnesota Attorney General Keith Ellison's lawsuit comes nearly a week

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<v Speaker 2>after an ice officer shot and killed thirty seven year

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<v Speaker 2>old Renee Good in Minneapolis. Her death during a tense

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<v Speaker 2>confrontation in her car has sparked protests across the country.

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<v Speaker 3>Tourneing to US foreign policy now Karena by partisan congressional

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<v Speaker 3>delegation is headed to Copenhagen later this week to show

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<v Speaker 3>unity with Denmark mid tensions over Greenland. Delaware Senator Chris

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<v Speaker 3>Coons is leading the trip. It includes at least nine

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<v Speaker 3>members of Congress. They plan to meet with Danish and

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<v Speaker 3>Greenlandic officials on Friday and Saturday.

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<v Speaker 2>Let's get to the latest from the Middle East, Nathan.

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<v Speaker 2>President Trump plans to meet with advisors today to weigh

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<v Speaker 2>options on responding to deadly protest in Iran. On social media,

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<v Speaker 2>the president announced a twenty five percent tariff on countries

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<v Speaker 2>that do business with the Islamic Republic that could upset

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<v Speaker 2>his one year trade truce with China. Alivias is Iran

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<v Speaker 2>Project director at International Crisis.

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<v Speaker 10>Group we have to see if that thread is really implementable,

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<v Speaker 10>because Iran's biggest trade trading partner is China, and of

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<v Speaker 10>course the US is a complicated relationship when it gets

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<v Speaker 10>through in position of tariffs on China second most important

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<v Speaker 10>trading partner is the UEE, again the close ally of

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<v Speaker 10>the United States, and it's hard to imagine that these

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<v Speaker 10>countries would be willing to really cut off all their

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<v Speaker 10>ties with Iran.

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<v Speaker 2>Overnight Aliviyas with International Crisis Group notes, China is the

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<v Speaker 2>world's biggest buyer of Iranian oil. It's unclear if President

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<v Speaker 2>Trump would stack the new tariffs on top of existing

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<v Speaker 2>duties or announce carve outs for China.

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<v Speaker 3>In Japan, Karen Prime Minister Sanai Atakiichi is reportedly planning

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<v Speaker 3>to call a snap election. Success at the holes for Takaichi,

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<v Speaker 3>who has been in the premiership since October, would provide

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<v Speaker 3>a mandate for her to continue hawkish diplomacy and pro

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<v Speaker 3>stimulus policies. Stocks rallied and the end week into its

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<v Speaker 3>lowest level since July twenty twenty four on the news.

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<v Speaker 2>Well in the US here Nathan stocks and bonds rebounded

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<v Speaker 2>on Wall Street to eke out gains. After initially dropping

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<v Speaker 2>on news, the Trump administration escalated its attack on the FED.

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<v Speaker 2>Steve Chiverone is Deputy Chief Investment Officer of Equities at

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<v Speaker 2>Federated Hermes.

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<v Speaker 11>It doesn't matter how you get to where we were.

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<v Speaker 11>It's not good, right. If you have a FED share

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<v Speaker 11>that's engaging in illegal activity, that's not good. If you

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<v Speaker 11>have political pressure on a FED share being exerted through

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<v Speaker 11>the courts, that's not good to have. The video release

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<v Speaker 11>is certainly not helpful for markets. So nobody benefits from this.

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<v Speaker 2>And Federated Hermes Steve Chivarone. Right now, futures again are lower.

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<v Speaker 2>SMP futures down a tenth of uve percent this.

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<v Speaker 3>Morning, and attention will now turn Karen to real economic data.

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<v Speaker 3>This morning we get the latest inflation report for December.

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<v Speaker 3>Bloomberg's Michael McKee has a CPI preview.

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<v Speaker 12>We get a full month's data in the December CPI,

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<v Speaker 12>but the numbers will remain somewhat unreliable because there was

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<v Speaker 12>no October data. The Bureau of Labor Statistics imputed them.

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<v Speaker 12>The imputation was zero no change, which to anyone who

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<v Speaker 12>went shopping during the month knows is wrong. That decision

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<v Speaker 12>biased the November CPI lower. For December, we should see

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<v Speaker 12>some payback an upward bias. That bias may or may

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<v Speaker 12>not push the annual inflation rate higher. Analysts are divided,

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<v Speaker 12>so confidence in what the numbers are telling us may

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<v Speaker 12>be low. Markets however, don't see the Fed moving anyway

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<v Speaker 12>this month, and we'll have January and February CPI data

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<v Speaker 12>in hand before the next Fed meeting.

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<v Speaker 10>Michael L.

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<v Speaker 12>Key, Bloomberg Radio.

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<v Speaker 2>All right, Michael, thank you. In addition to the CPI report,

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<v Speaker 2>investors will get earnings from the first of the big banks,

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<v Speaker 2>JP morgan Chase reports. Before the opening bell, we get

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<v Speaker 2>a preview with Bloomberg's Tom Busby.

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<v Speaker 6>JP Morgan Chase's trading and investment thinking businesses will be

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<v Speaker 6>in focus, with revenue from trading stocks and bonds expected

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<v Speaker 6>to rise thirteen percent from a year ago, helping share

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<v Speaker 6>so the bank up thirty five percent in the past

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<v Speaker 6>twelve months, easily topping the sixteen percent gain in the

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<v Speaker 6>SMP five hundred Financials index. Bloomberg consensus calls for adjusted

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<v Speaker 6>revenue of forty six point three five billion dollars for

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<v Speaker 6>the fourth quarter on adjusted earnings per share of four

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<v Speaker 6>dollars ninety two cents. Tom buzzby Bloomberg Radio.

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<v Speaker 3>Okay, Tom, thank you. Look at company news now. City

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<v Speaker 3>Group is among three major companies cutting jobs. The bank

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<v Speaker 3>is set to slash about one thousand positions this week

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<v Speaker 3>as part of CEO Jane Fraser's March to keep a

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<v Speaker 3>lid on costs, and Blackrocks cutting hundreds of jobs across

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<v Speaker 3>its company as well. Those cuts total about one percent

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<v Speaker 3>of blackrocks global headcount and include members of its investment

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<v Speaker 3>in sales teams and meta platforms. Plans to cut about

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<v Speaker 3>ten percent of its employees in the reality Labs division.

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<v Speaker 3>That's part of a broader strategy to shift money away

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<v Speaker 3>from some virtual reality products and into other AI wearables.

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<v Speaker 2>Nathan President Trump says big tech must bear the costs

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<v Speaker 2>of raining in electricity costs. In a post on truth

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<v Speaker 2>Social the President said his administration have been talked with

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<v Speaker 2>Microsoft to ensure that consumers quote don't pick up the

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<v Speaker 2>tab for enormous data centers. The rapid construction of data

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<v Speaker 2>centers is widely seen as one reason why electricity has

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<v Speaker 2>become more expensive in the US, though it is not

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<v Speaker 2>the only one.

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<v Speaker 3>Later Today Karen, President Trumble visit a key battleground state

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<v Speaker 3>to promote his tariff and manufacturing policies and flesh out

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<v Speaker 3>a more populist economic message. He'll visit a factory that

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<v Speaker 3>makes Ford F one to fifty trucks and promote his

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<v Speaker 3>policies and an event sponsored by the Economic Club of Detroit.

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<v Speaker 3>This is the president's third trip to a bellweather state

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<v Speaker 3>since early December.

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<v Speaker 2>Time now for a look at some of the other

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<v Speaker 2>stories making news in New York and around the world

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<v Speaker 2>and from ever. Joined by Bloomberg's Michael Barr Michael, Good Morning,

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<v Speaker 2>Good Morning Karen.

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<v Speaker 4>About fifteen thousand nurses in New York City are on

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<v Speaker 4>the streets into the second day of their strike. Nurses

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<v Speaker 4>say they'll stay there until their demands are met.

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<v Speaker 13>We want a fair contract, so we want to save

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<v Speaker 13>our healthcare, save our pension, and provide safe staffing for

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<v Speaker 13>our patients.

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<v Speaker 4>Nurses are also calling for higher wages and better staffing.

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<v Speaker 4>Hospital officials say union leaders are making reckless demands, including

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<v Speaker 4>nearly forty percent wage increases. A New York City Council

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<v Speaker 4>employee was detained by federal immigration officials when he appeared

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<v Speaker 4>for a routine immigration appointment. That's according to City Council

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<v Speaker 4>Speaker Julie Menin, who says the employee works as a

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<v Speaker 4>data analyst and has the legal authorization to remain in

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<v Speaker 4>the country until October.

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<v Speaker 13>DHS confirmed that this employee had gone in for a

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<v Speaker 13>routine court appointment and was nevertheless detained. They provided no

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<v Speaker 13>other basis for his detainment.

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<v Speaker 4>According to the DHS, the employee is a criminal alien

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<v Speaker 4>from Venezuela who has an assault arrest and no work authorization.

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<v Speaker 4>New York Mayor Zoram Mamdani calls the detention and assault

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<v Speaker 4>on democracy and demands the employee's immediate release. New York

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<v Speaker 4>Governor Kathy Hockle will reveal how she plans to tackle

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<v Speaker 4>making housing more affordable for people. Hokel would use today's

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<v Speaker 4>State of the State address to detail how she plans

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<v Speaker 4>to cut red tape for developers to boost the state's

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<v Speaker 4>housing supply amid a widespread shortage of affordable units. It

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<v Speaker 4>would be through her let Them Build program. The proposal

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<v Speaker 4>has drawn criticism from green groups, who argue that changes

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<v Speaker 4>to the law could open up loopholes that could be

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<v Speaker 4>exploited by business interests. Global News twenty four hours a

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<v Speaker 4>day and whenever you want it with Bloomberg News Now,

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<v Speaker 4>I'm Michael Barr. This is Bloomberg Karen.

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<v Speaker 12>Thanks Michael.

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<v Speaker 2>All time now for our Bloomberg Sports updating. For that,

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<v Speaker 2>we bring in John stash Hour.

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<v Speaker 14>Thanks. During the end of the NFL Wild Guard Playoff

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<v Speaker 14>round of the Houston Texans had a one point le

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<v Speaker 14>in the fourth quarter in Pittsburgh and then scored twenty

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<v Speaker 14>three points in a span of ten and a half minutes.

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<v Speaker 14>They had two defensive touchdowns. Houston won thirty to six

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<v Speaker 14>to advance to play New England on Sunday. Was this

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<v Speaker 14>the last game for Aaron Rodgers? Will he retire? There

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<v Speaker 14>was talk the Packers might fire coach Matt Lafleur. Instead,

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<v Speaker 14>they're talking about a contract extension with him. John Harbaugh's

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<v Speaker 14>first coaching interview with Atlanta. That to Bloomberg Sports Update.

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<v Speaker 8>Stay with us.

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<v Speaker 2>More from Bloomberg Daybreak coming up after this.

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<v Speaker 1>Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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<v Speaker 1>and around the world on Bloomberg dot Com and the

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<v Speaker 1>Bloomberg Business opp This is Bloomberg Daybreak.

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<v Speaker 14>Good morning.

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<v Speaker 3>I'm Nathan Hager. The Justice Department's moved to launch a

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<v Speaker 3>grand jury probe against fedchair Jay Powell is drawing rare

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<v Speaker 3>pushback from many Republicans on Capitol Hill. Louisiana Senator John

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<v Speaker 3>Kennedy is among them. He says, a perjury allegation against

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<v Speaker 3>Congress is a serious allegation.

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<v Speaker 8>Is serious as four heart attacks on a stroke.

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<v Speaker 12>And if you make an allegation like that, by God,

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<v Speaker 12>you better be prepared to put it tobaccul up.

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<v Speaker 3>That was Republican Senator John Kennedy of Louisiana on Capitol

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<v Speaker 3>Hill this morning. We're joined by Bloomberg New senior editor

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<v Speaker 3>Alistair Bull and Alistair. We're just getting word from central

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<v Speaker 3>banks around the world issuing a joint statement of solidarity

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<v Speaker 3>for Chairman Powell as well. It does seem as though

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<v Speaker 3>the pushback against this Justice Department probe is pretty remarkable.

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<v Speaker 8>Good morning, morning morning, Thanks for having me on it.

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<v Speaker 15>It is remarkable, But I think the most remarkable thing

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<v Speaker 15>is the strident tone taken by key Republican senators.

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<v Speaker 8>Who are in a position to do something about it.

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<v Speaker 15>Investors may well heat comments by other central bankers and

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<v Speaker 15>bis it could affect their long term view on US assets.

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<v Speaker 8>That's obviously important.

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<v Speaker 15>The bombmarket vigilantes do have a role to play here.

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<v Speaker 15>Senate Republicans can stop Trump from putting his NOMA nominees

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<v Speaker 15>on the FED board, and that really sort of like

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<v Speaker 15>blocks the Trump campaign to get more control over the

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<v Speaker 15>Central Bank.

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<v Speaker 8>So that's very serious pushback.

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<v Speaker 3>What are we hearing in terms of how these subpoenas

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<v Speaker 3>came about. It sounds like there might have been some

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<v Speaker 3>kind of disconnect between the Attorney General or the US

0:12:25.080 --> 0:12:28.160
<v Speaker 3>Attorney in DC and the Justice Department rid large.

0:12:29.800 --> 0:12:33.400
<v Speaker 15>Well, you know, that's very interesting because the reporting yesterday

0:12:33.520 --> 0:12:35.320
<v Speaker 15>made it clear that there were a lot of people

0:12:35.440 --> 0:12:37.800
<v Speaker 15>around the White House who didn't know this coming and

0:12:37.840 --> 0:12:42.199
<v Speaker 15>were not happy to happen, including Treasury Secretary Scott Besson, who,

0:12:42.600 --> 0:12:45.040
<v Speaker 15>according to Axios, was very quickly on the phone to

0:12:45.080 --> 0:12:46.800
<v Speaker 15>Trump on Sunday night to tell him this was going

0:12:46.840 --> 0:12:49.600
<v Speaker 15>to be a mess and it was going to put

0:12:50.240 --> 0:12:52.960
<v Speaker 15>a stick in the spokes of his effort to nominate

0:12:53.000 --> 0:12:58.199
<v Speaker 15>a new FED share. We don't entirely know what happens next. Really,

0:12:58.200 --> 0:12:59.120
<v Speaker 15>the ball really is.

0:12:59.080 --> 0:12:59.840
<v Speaker 8>In the court of.

0:13:02.120 --> 0:13:06.280
<v Speaker 15>Because till The Republican Senator Tom Tillis said this needs

0:13:06.320 --> 0:13:08.440
<v Speaker 15>to be cleared up soon. And that clip you played

0:13:08.480 --> 0:13:10.560
<v Speaker 15>from Senator to Kennedy said, if you're going to make

0:13:10.600 --> 0:13:12.320
<v Speaker 15>these allegations, you better back them up.

0:13:12.480 --> 0:13:13.719
<v Speaker 8>So I think people are going to want to.

0:13:13.679 --> 0:13:17.880
<v Speaker 15>See movement, but they've really not very said very much

0:13:17.920 --> 0:13:19.079
<v Speaker 15>to clarify what happens.

0:13:19.120 --> 0:13:22.640
<v Speaker 3>Now, what kind of role could Congress play to get

0:13:22.720 --> 0:13:26.960
<v Speaker 3>that kind of transparency from the Justice Department. Could we

0:13:27.000 --> 0:13:27.960
<v Speaker 3>see a clash there?

0:13:29.040 --> 0:13:30.800
<v Speaker 8>Yeah, I expect so. I mean I think till this

0:13:30.920 --> 0:13:33.040
<v Speaker 8>also sits on the Justice Committee, so I mean he

0:13:33.120 --> 0:13:33.960
<v Speaker 8>has power here.

0:13:34.559 --> 0:13:38.480
<v Speaker 15>The important thing is that the Senate has oversight, Congress

0:13:38.520 --> 0:13:41.360
<v Speaker 15>has oversight of the Federal Reserve, which was very carefully

0:13:41.400 --> 0:13:45.640
<v Speaker 15>constructed to insulate it away from political pressure. Now the

0:13:45.679 --> 0:13:50.040
<v Speaker 15>Trump president Trump is testing those layers of defense, but

0:13:50.200 --> 0:13:53.040
<v Speaker 15>he hasn't breached them yet. And there's another important thing

0:13:53.080 --> 0:13:55.200
<v Speaker 15>that's going to happen this month, which is a Supreme

0:13:55.240 --> 0:13:59.720
<v Speaker 15>Court going to start here the argument around Governor Lisa Cook,

0:14:00.000 --> 0:14:02.760
<v Speaker 15>who Trump fired for cause, and she's fighting that the

0:14:02.800 --> 0:14:04.920
<v Speaker 15>Supreme Court indicated that it wants to give some sort

0:14:04.920 --> 0:14:07.520
<v Speaker 15>of carve out to the FED as a special quasi

0:14:07.760 --> 0:14:10.560
<v Speaker 15>private public agency. If a Supreme Court comes down on

0:14:10.600 --> 0:14:13.320
<v Speaker 15>Lisa Cook's side. That's going to give the FED even

0:14:13.400 --> 0:14:18.319
<v Speaker 15>more protection and insulate Powell further from sort of an

0:14:18.320 --> 0:14:20.800
<v Speaker 15>assault that he has identified as.

0:14:20.840 --> 0:14:22.040
<v Speaker 8>A threat to FED independence.

0:14:22.080 --> 0:14:25.760
<v Speaker 15>And importantly, Republican senators say they agree with him, they

0:14:25.800 --> 0:14:27.760
<v Speaker 15>say it is a threat to FED independence.

0:14:28.680 --> 0:14:31.160
<v Speaker 3>And of course this is coming as we're still waiting

0:14:31.200 --> 0:14:34.600
<v Speaker 3>for an announcement from President Trump on who his successor

0:14:34.800 --> 0:14:38.120
<v Speaker 3>choice for chairman Powell will be. With Senator Tilla saying

0:14:38.160 --> 0:14:41.320
<v Speaker 3>he'd block any further FED nominees, that has to complicate

0:14:41.680 --> 0:14:43.440
<v Speaker 3>even that announcement, doesn't it.

0:14:44.400 --> 0:14:47.240
<v Speaker 15>Yeah, absolutely, I mean that's the big story, the big

0:14:47.280 --> 0:14:49.480
<v Speaker 15>news we are expecting on the FED this week or

0:14:49.520 --> 0:14:53.400
<v Speaker 15>maybe after Trump goes to Davos for the World Economic Forum.

0:14:53.520 --> 0:14:56.480
<v Speaker 15>Was his pick for FED share but that's been completely

0:14:56.520 --> 0:14:59.800
<v Speaker 15>overshadowed by this. And if Tilli sticks to his word,

0:15:00.000 --> 0:15:04.560
<v Speaker 15>if he if he votes, if he votes to block

0:15:04.600 --> 0:15:07.600
<v Speaker 15>any norminee, he basically has a vita on Senate Banking

0:15:07.640 --> 0:15:10.440
<v Speaker 15>it's split it thirteen eleven. If he crosses the floor

0:15:10.440 --> 0:15:13.320
<v Speaker 15>to join the Democrats, that's twelve twelve that blocks it

0:15:13.400 --> 0:15:15.840
<v Speaker 15>there to move out of the committee over an objection

0:15:16.200 --> 0:15:21.320
<v Speaker 15>sixty senators under the current rules. You've already got lis Mkowski,

0:15:21.480 --> 0:15:26.280
<v Speaker 15>You've got Kramer, You've got Kennedy sounding dubious. You've got

0:15:26.360 --> 0:15:29.160
<v Speaker 15>John fun Who's you know, majority leader, saying this needs

0:15:29.200 --> 0:15:31.600
<v Speaker 15>to be fixed soon, so they you know, Trump may

0:15:31.680 --> 0:15:35.479
<v Speaker 15>not have the votes in the Senate. So it basically

0:15:35.520 --> 0:15:38.640
<v Speaker 15>freezes the whole plan, which is why when you read

0:15:38.760 --> 0:15:40.840
<v Speaker 15>the Besson Treasury sectary, Psson was.

0:15:40.880 --> 0:15:43.440
<v Speaker 8>Very angry and frustrated by this. You're not surprised.

0:15:44.720 --> 0:15:48.160
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